3/10/2009 News Radar

by JASON | 6:38 AM in |

American taxpayers’ finances are being sucked dry faster than a naked northern Minnesotan in a swarm of mosquitoes. But it is Uncle Sam’s fault. He is the one who so readily gave away the clothes off their backs, so that the big boys on Wall Street could cover their financial nakedness.

Now Uncle Sam is dangerously exposed too, and the mosquitoes’ feeding frenzy is sapping the national lifeblood.

When Congress approved the first bailout money, politicians said taxpayers could reasonably expect to turn a profit out of the deal. About $9.7 trillion later, the government has committed more money than at any time by any government in history, and the Great Recession rages on. In exchange for the servitude of multiple future generations, America has experienced almost zero success. There is no way that taxpayers will profit from this mess, and politicians know it.

Federal Reserve Chairman Ben Bernanke, speaking at the Council on Foreign Relations right now, said that broad overhaul of the financial regulatory system is necessary to prevent another crisis from happening.

Specifically, he said, the problem of "too big to fail" must be addressed -- the concept that a firm, typically a bank or a non-bank financial institution such as AIG, that is so big that if it fails, it will drag down the whole system.

Bernanke said that system-wide oversight, something known as "macroprudential regulation" is required, and that the Fed could be the home for that, or it could be another agency.

In macroprudential regulation, a government agency, or agencies, monitors an entire economy to look for possible bubbles and attempts to deflate them, rather than focusing tightly on individual sectors or firms.

Real nice....create the problem...then suggest a solution for even more control...this time world wide of course...

The man at the center of a fraud scandal at the Treasury Department has been allowed to quietly quit and retire from his job as a government regulator, despite allegations that he allowed a bank to falsify financial records and amidst outcries from investigators who say the case shows how cozy government regulators have become with the banks and savings and loans they are supposed to be checking on.

Darrel Dochow, the West Coast regional director at the Office of Thrift Supervision who investigators say allowed IndyMac to backdate its deposits to hide its ill health, quit last Friday. Prior to his leaving, Dochow was removed from his position but remained on the government payroll while the Inspector General’s Office investigates the allegations against him.

Treasury Department Inspector General Eric Thorson announced in November his office would probe how Dochow allowed the IndyMac bank to essentially cook its books, making it appear in government filings that the bank had more deposits than it really did. But Thorson’s aides now say IndyMac wasn’t the only institution to get such cozy assistance from the official who should have been the cop on the beat.

Investigators say Dochow, who reportedly earned $230,000 a year, allowed IndyMac to register an $18 million capital injection it received in May in a report describing the bank’s financial condition in the end of March.

KREMS, Austria—Obsessed as we are about our own crumbling economy, it’s hard for most Americans to see and appreciate the global nature of the crisis and how it is impacting and will impact others throughout the world. We don’t recognize how many in other countries blame the fall of their own economies on a kind of “financial AIDs” born in the United States.

Protests are spreading and Britain just put its own army on alert for fear of disruptions this summer by anarchists bent on class war with slogans like “burn a banker.” Mass demonstrations show no sign of abating in France, Iceland, Ireland, Greece, and other EU countries.

People here have politicized economic issues perhaps because of a more thorough and diverse media environment as well as an expectation that their governments have a duty to protect their people.

The Federal Reserve is bankrupt for all intents and purposes. The same goes for the Bank of England!

This article will focus largely on the Fed, because the Fed is the "financial land-mine".

How long can someone who has stepped on a landmine, remain standing – hours, days? Eventually, when he is exhausted and his legs give way, the mine will just explode!

The shadow banking system has not only stepped on the land-mine, it is carrying such a heavy load (trillions of toxic wastes) that sooner or later it will tilt, give way and trigger off the land-mine![1]

BUCHAREST (Romania) - AILING US carmaker Ford Motor Co. will receive euro143 million (S$279 million) in aid from the government of Romania, where the company owns a carmaking plant, lawmakers said on Tuesday.

The state aid, spanning until 2012, will support production of cars and engines at the factory in Craiova, in southern Romania.

The money to be given to Ford is considered state aid for regional development, Romanian lawmakers said.

In 2007, Ford bought a 72.4 per cent stake in the state-owned Automobile Craiova, paying US$88 million and vowing to invest US$1 billion to upgrade and expand car production.

The Federal Home Loan Bank (FHLB) of Seattle said it didn't meet a regulatory capital requirement at the end of last month because of the declining value of mortgage-backed securities.

The FHLB of Seattle, a government-chartered cooperative, said in a statement Monday that because of the capital deficiency it is disallowed from paying a dividend or repurchasing capital stock.

The Seattle bank in January became the second FHLB, after San Francisco, to warn of a potential capital shortage and take steps to guard reserves. As many as eight of the 12 banks may fall short of capital requirements after writing down holdings of so-called nonagency mortgage securities, Moody's Investors Service predicted.

March 9 (Bloomberg) -- Bank of America Corp., the largest U.S. bank by assets, and General Electric Capital Corp. raised a combined $16.5 billion today selling bonds backed by the U.S. government as they seek to hold down borrowing costs.

Bank of America, based in Charlotte, North Carolina, sold $8.5 billion of notes in its second-largest offering under the Federal Deposit Insurance Corp.’s Temporary Liquidity Guarantee program. The finance arm of General Electric Co. sold $8 billion of notes, also its second-biggest under the program.

Financial companies are relying on the FDIC program as yields relative to benchmarks on their debt that isn’t guaranteed by the government soar to the highest on record. Banks have few alternatives to finance themselves at lower interest rates as investors grow concerned that they don’t have enough capital to absorb losses amid a deepening global recession, said Guy Lebas, chief economist at Janney Montgomery Scott LLC in Philadelphia.

“It’s so much cheaper to issue TLGP debt than unsecured that every bank out there is replacing maturing debt with TLGP deals,” Lebas said in a telephone interview. “No financial issuer in their right mind would come with a non-FDIC debt issue right now. Markets are penalizing them very severely.”

March 10 (Bloomberg) -- Chinese home prices fell by a record last month, paced by a 15 percent plunge in the southern export hub of Shenzhen, where factories closed as growth in the world’s third-biggest economy slowed.

A police officer has been shot dead while on patrol in Northern Ireland, in what has been described as an "evil deed" by "terrorists". No one has yet claimed responsibility for the latest shooting but the Real IRA said they carried out the killings on Saturday.

Mexico's national government sent 5,000 troops this past weekend to Ciudad Juarez across from El Paso, Texas. Hundreds have been killed there -10 a day in February alone. More than 6,000 were killed in Mexico in drug violence in 2008, according to The Associated Press.

To curtail the violence in Ciudad Juarez, Mexican soldiers are expected to patrol the city for at least several months. The military presence is being described as a "surge" to crack down on drug gangs.

The reference to the military "surge" tactic used with success by U.S. forces in Baghdad is no accident. It appears that high level military contacts have been taking place between Mexico and the United States.

The chairman of the U.S. Joint Chiefs of Staff, Adm. Mike Mullen, just returned from Mexico after consulting about the drug violence crisis there and indicated the U.S. military could offer techniques it had learned from fighting terrorist groups in the Middle East.

Mr Sarkozy offered his Mexican counterpart Felipe Calderon help with police training and technology for gathering intelligence.

The two leaders also unveiled plans to build a $550m (£397m) Franco-European helicopter factory in Mexico.

A police chief and a state police commander are among the latest victims of violence in Mexico. Six people were killed Monday in a series of attacks in the Pacific coast state of Guerrero. The police chief died when gunmen shot him several times as he drove his red Mustang on a highway near his small town. Also Monday, gunmen shot and killed a state police commander outside police headquarters in the city of Zamora.

March 9 (Bloomberg) -- Mexico’s peso-denominated bonds fell, pushing benchmark yields up for a third day, after a government report showed annual core inflation climbed to a seven-year high, limiting the central bank’s room to cut interest rates.

Mexico's peso has weakened to a record 15.49 against the U.S. dollar despite the government's efforts to stop its fall.

WASHINGTON - March 9 - The Brady Center to Prevent Gun Violence is issuing a background document for journalists covering the gun violence in Mexico and the policy issues surrounding how America’s gun laws are helping to fuel that violence.

AUSTIN - The state and federal governments have prepared contingency plans to deal with spillover violence from across the border as Mexican troops clash with ruthless drug cartels terrorizing Mexico.

“Anything you can think of that’s happened in Mexico, we have to think could happen here,” said Steve McCraw, Gov. Rick Perry’s director of homeland security. “We know what they’re capable of.”

A crackdown by Mexican President Felipe Calderon has turned Ciudad Juarez, just across the border from El Paso, into a war zone as federal troops battle feuding cartels.

Thousands of soldiers and agents have surged into the border city in the government’s latest effort to free Mexican citizens from a daily spectacle of assassinations, kidnappings and beheadings ordered by rival drug czars.

McCraw predicted that the violence in Mexico “will get worse before it gets better.”

Mexico’s active-duty armed forces number more than 130,000 and are being aggressively used to combat the cartels. But U.S. Sen. John Cornyn, R-Texas, told reporters last week that Mexico’s two largest drug cartels have fielded a combined army of 100,000 foot soldiers to battle not just government forces but also one another.

Joint Chiefs of Staff Chairman Admiral Michael Mullen briefed President Barack Obama over the weekend on the so-called drug war in Mexico and the prospect of increased US military involvement in the conflict south of the border.

Mullen had just returned from a six-day tour of Latin America, which took him on his last and most important stop to Mexico City. There he held meetings with Mexico's secretary of national defense and other top military officials and discussed proposals for rushing increased US aid to Mexico under the auspices of Plan Merida, a three-year, $1.4 billion package designed to provide equipment, training and other assistance to the Mexican armed forces.

In a telephone press conference conducted as he returned from Mexico, Mullen said that the Pentagon was prepared to help the Mexican military employ the same tactics that US forces have applied in counterinsurgency operations in Iraq and Afghanistan.

The US military, he said, was "sharing a lot of lessons we have learned, how we've developed similar capabilities over the last three or four years in our counterinsurgency efforts as we have fought terrorist networks." He added, "There are an awful lot of similarities."

With US backing, Mexican President Felipe Calderon has increasingly militarized the country, deploying tens of thousands of troops in areas ranging from Matamoros and Reynosa in the east to Tijuana, Guerrero, Michoacán and Sinaloa in the west.

On the eve of Mullen's visit, the Mexican military poured some 5,000 additional troops into Ciudad Juarez, across the border from El Paso, Texas, redoubling patrols by combat-equipped units and effectively sealing the city off with roadblocks. Some 2,500 troops had already been deployed in the city last spring.

He said that in his meetings with Mexican military officials he had discussed US aid focusing on "intelligence, surveillance and reconnaissance," or ISR in US military parlance.

He indicated that intelligence-sharing had already been implemented, but that "there are additional assets that could be brought to bear across the full ISR spectrum."

In the first instance, this could mean the deployment of US manned surveillance aircraft as well as unmanned drones over Mexican territory. It could likewise suggest the deployment of Special Forces units or military "contractors."

The West is seriously concerned about a possibility for Russia to conquer African energy resources. It goes about Nigeria and its natural gas, first and foremost. However, there are too many problems connected with the country which make the development of its energy resources quite complicated. It may just so happen that the Nigerian game may not be worth the Russian candle.

Western countries are concerned that Russia is determined to force them back from Nigeria – a key energy supplier in the world. This African country is one of the basic suppliers of oil to Europe. In addition, it is also the fifth most important exporter of black gold to the United States.

Enormous reserves of natural gas were found in the country not so long ago. The West was hoping that the new reserves would let it weaken the energy dependence on Russia, but Gazprom, Russia’s gas monopoly, was the first one to snatch up the tasty bit.

Russia’s Prime Minister Vladimir Putin had a meeting with Nigerian President Umaru Yar’adua. Putin promised him a more lucrative contract and said that Russia could do better in the development of the nation’s energy resources. The West is now concerned that Gazprom may force Western companies that already work in Nigeria out.

A large arms deal between Russia and China has not taken place over a possible violation of intellectual property rights. Russia has refused to sell Su-33 deck-based fighter jets to China, The Moskovsky Komsomolets newspaper wrote.

The talks about the deal began quite a while ago. China intended to buy up to 50 jets for its aircraft carriers, although the country originally wanted to buy only two Su-33 jets on a trial basis. This intention became the bone of contention in the talks between the two countries: Russia believed that the Chinese customers could copy the Russian technology for the production of their own clones of the Russian fighters.

Russia had a motive to think so, the newspaper wrote. In 1995, China received a license for the production of 200 Su-27 fighters of specific modification, complete with Russian avionics, radars and engines. However, Russia terminated the agreement for the purchase of 95 planes in 2006, because Chinese aircraft-makers began to produce a similar fighter, although it was equipped with Chinese avionics and systems.

To put it in a nutshell, China has an experience of cloning the fighters of Russia’s renowned Sukhoi jets. The problem was discussed at the 13th meeting of the Russian-Chinese Committee for Military Cooperation in December. It is obviously highly unprofitable for Russia to let cheaper Chinese analogues of its reputable jets appear in the region.

One of China's biggest issues - protection of IP!

Private military companies supply bodyguards for the Afghan president and pilot armed reconnaissance planes and helicopter gunships to destroy Coca crops in Colombia. They are licensed by the State Department; they are contracting with foreign governments, training soldiers and reorganizing militaries in Nigeria, Bulgaria, Taiwan, and Equatorial Guinea. The PMC industry is now worth over $100 billion a year.

A private military company can be very efficient in local conflicts, where the use of regular armies can be complicated for legal reasons. For example, Russia can not send its troops to Nigeria if Nigerian gunmen attack employees of Russian companies – it would be a gross violation of international laws.

Russian PMCs – Tiger Top Rent Security and Orel Antiterror - do not lag behind their US or British colleagues. The only difference is that Russian PMC fighters are paid a lot less.

Russian PMCs took part in the military actions in Iraq, Afghanistan, Israel, Lebanon and Palestine.

Russia’s largest companies such as Russian Aluminium (Rusal), Lukoil, Rosneft and Gazprom received a carte blanche to form military structures to protect their interests both inside and outside Russia.

BEIJING – Chinese fishermen nearly made off with some of the US Navy’s most modern and secret submarine tracking equipment, it seems, in a South China Sea incident Sunday that is making diplomatic waves.

Unarmed American seamen on the USNS Impeccable were reduced to turning their firehoses on five Chinese military and fishing vessels – one of which approached to within 25 feet before the US ship withdrew, according to the US Navy account.

So what was going on last Sunday? Just a more public, and possibly more dangerous spat in the ongoing cat and mouse game that the US and Chinese navies play quietly all the time in the South China Sea.

There is little doubt what the Impeccable was doing 75 miles off the coast of the island of Hainan, where the Chinese have built a major submarine base. It is one of only four US ships worldwide equipped with the latest generation of sub-hunting sonar, known as SURTASS LFA (which stands for Surveillance Towed Array Sensor System - Low Frequency Active, in case you were wondering.)

At one point during the incident, “the Chinese used poles in an attempt to snag the Impeccable’s towed acoustic array sonars,” reported the US Navy’s press service, quoting Pentagon spokesman Bryan Whitman.

Had they succeeded, it would have been embarrassing, to say the least. In a 2007 environmental impact statement, the Navy described LFA as “the only available technology capable of meeting the US need to improve detection of quieter and hard-to-find foreign submarines at long range.”

Remember this???

When the U.S. Navy deploys a battle fleet on exercises, it takes the security of its aircraft carriers very seriously indeed.

At least a dozen warships provide a physical guard while the technical wizardry of the world's only military superpower offers an invisible shield to detect and deter any intruders.

That is the theory. Or, rather, was the theory.

American military chiefs have been left dumbstruck by an undetected Chinese submarine popping up at the heart of a recent Pacific exercise and close to the vast U.S.S. Kitty Hawk - a 1,000ft supercarrier with 4,500 personnel on board.

By the time it surfaced the 160ft Song Class diesel-electric attack submarine is understood to have sailed within viable range for launching torpedoes or missiles at the carrier.

According to senior Nato officials the incident caused consternation in the U.S. Navy.

The Americans had no idea China's fast-growing submarine fleet had reached such a level of sophistication, or that it posed such a threat.

One Nato figure said the effect was "as big a shock as the Russians launching Sputnik" - a reference to the Soviet Union's first orbiting satellite in 1957 which marked the start of the space age.

The incident, which took place in the ocean between southern Japan and Taiwan, is a major embarrassment for the Pentagon.

This was the first military standoff between U.S. and China since the Taiwan Strait Crisis in 1996.

According to Jan. 16 dispatch by China Times in Taiwan, on Nov. 23 last year, Kitty Hawk battle group was en route to Japan after China refused its port call in Hong Kong, entering Taiwan Strait instead of using its normal route. China immediately dispatched a Song-class submarine which happened to be in the neighborhood, and had it track the battle group.

China also sent a missile destroyer Shenzhen from its Southern Fleet which was readying itself in Hainan Island for the (upcoming) visit to Japan, joining the Kitty Hawk watch.

The battle group with the carrier and its eight escort ships were sailing northward at an even distance away (from China and Taiwan,) and the Chinese submarine and the destroyer were following and watching the battle group from the western side along the Chinese mainland.

Carrier Kitty Hawk was alerted by a P3-C anti-submarine plane from U.S. forces in Japan that a Chinese submarine and its destroyer were following them. The group stopped sailing and went into battle-ready mode, sending out warplanes to protect the fleet.

After tense 28-hour standoff, the battle group was able to return to Yokosuka base in Japan only in Nov. 24.

Denny Roy, a U.S.-based expert on Asia-Pacific security, said the confrontation did not appear accidental, and was rather China's way of sending a message to Washington that it wanted respect for its growing military reach in the region.

"I don't think this happened spontaneously," said Roy, of the East-West Center in Honolulu, Hawaii, "No doubt it had the endorsement of central leaders in Beijing."

The latest row suggests Beijing will take a tougher stance as its naval ambitions grow, said analyst Shi Yinhong.

"The United States is present everywhere on the world's seas, but these kinds of incidents may grow as China's naval activities expand," Shi, an expert on regional security at Renmin University in Beijing, said.

ABU GHRAIB, Iraq: In the face of increasing suicide bombs, assassinations and improvised explosive devices, Iraqi military officials and community leaders say they fear a renewed effort by Sunni extremists to disrupt the relative calm in Iraq and undermine its fragile political alliances.

In the second suicide bombing since Sunday, a bomber took aim Tuesday at a group of Iraqi Army officers on their way to a high-profile reconciliation conference on the western outskirts of Baghdad.

In the bedlam that followed the explosion, there was wild shooting. Of the 33 people killed, at least 7 were Iraqi Army officers and 2 were Iraqi journalists covering the event. A third journalist was seriously wounded. There is an investigation into whether the shooting after the bombing was an ambush by gunmen or undisciplined gunfire by Iraqi security forces, said Major General Qassim Atta, spokesman for the Baghdad security plan.

The attack, the second since Sunday to kill more than two dozen people, suggested a renewed ability by insurgents to mount effective suicide bombings after a long period in which such attacks were relatively few and less lethal because of heavy security precautions.

According to several of the secret legal memos released Monday, Yoo argued that Bush could, in effect, waive all meaningful constitutional rights of American citizens, including the First Amendment’s protections on free speech and a free press and the Fourth Amendment ban against unreasonable search and seizure, in the name of fighting terrorism.

"First Amendment speech and press rights may also be subordinated to the overriding need to wage war successfully," Yoo wrote in an Oct. 23, 2001, memo entitled “Authority for Use of Military Force to Combat Terrorist Activities Within the United States.” Yoo added, "The current campaign against terrorism may require even broader exercises of federal power domestically."

What was striking to some about Yoo’s reference to the First Amendment was that the paragraph was tossed, almost as an after-thought, into a memo about stripping Americans of their Fourth Amendment rights. While saying Bush could order spying on and military attacks against U.S. domestic targets at his own discretion as Commander in Chief, Yoo added that the President could abrogate the rights of free speech and a free press.

Another Yoo memo, dated June 27, 2002, said Bush also could ignore the right of Americans to public trials. In the memo, Yoo asserted that Bush had the power to declare American citizens “enemy combatants” and detain them indefinitely.

When the memos were issued, Yoo was a deputy assistant attorney general at the Justice Department's powerful Office of Legal Counsel, which advises a President on the limits of his constitutional powers.

US Vice President Joe Biden told NATO that the situation in Afghanistan was a threat to the West as a whole.

"The deteriorating situation in the region poses a security threat not just to the United States but to every single nation round this table," Biden told representatives of the 26-nation military alliance during a visit to Brussels on Tuesday, March 10.

"It was from the very same mountains that the attacks of 9/11 were planned," he said, adding that NATO should seek "pragmatic solutions" to its war in Afghanistan.
Not unless George Bush Sr has hanging out in the mountain there....What a joke! Drug production must not be keeping up with demand!

As the growing world-wide economic crisis deepens, military forces from Canada, the United States, and the United Kingdom are preparing to meet angry citizens on the street. The economic crisis - and the public outrage it is causing - is at the forefront of intelligence agencies and military forces in the western world.

Prominent trends forecaster Gerald Celente has been sounding the alarm for years, warning that riots and tax revolts are coming to America. The Pentagon, U. K. Ministry of Defense, and Canadian military apparently agree. In November of 2008 the United States Army War College released the report Known Unknowns: Unconventional "Strategic Shocks" in Defense Strategy Development. The report identifies economic collapse as a reason for the defense establishment to conduct domestic operations. The report states,

"Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security. Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency..."

The CIA and MI5 are both watching the economic situation for signs of unrest and political instability. As the Washington Post reports, the CIA has added an economic situation report to its threat assessment for the White House. A further sign that the United States government is anticipating widespread unrest comes with the domestic stationing of the 1st Brigade Combat Team of the 3rd Infantry Division. The Army Times reports,

"They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack."

Canadian military forces have been given a nearly identical domestic mission in a synchronized move with the United States. Canada's National Post reports that,

"The Canadian military has embarked on a wide-ranging plan to turn its reserve soldiers into focused units trained and equipped to respond to a nightmarish array of domestic threats, including terrorist "dirty bomb" attacks, biological agent containment, Arctic catastrophes and natural disasters."

David Bercuson, director of the Centre for Military and Strategic Studies at the University of Calgary admits that contingencies exist that "...envisioned scenarios that might require a form of constabulary or policing function for reserves in civilian containment and security."

The owner of the flight school in Venice FL where the two hijackers who crashed airliners into the World Trade Center took flight lessons, was arrested last May after assaulting his 17-yr old step-daughter outside a sports bar in Naples, Florida.

78-year old Wallace J. Hilliard of Naples FL was charged with misdemeanor battery on May 28 2008, according to Collier County, FL arrest records.

"He stopped his car behind her as she was walking," an eyewitness told police. "Then he walked up behind her and hit her twice in the back of the head."

The witness told Hilliard to stop hitting the girl.

Hilliard's reply was, "Do you really want to get involved in my personal life?"

"I do if you're going to hit girls," said the good Samaritan. Then he called the cops.

Making this sordid tale of more than puerile interest: Hilliard played an as-yet undetermined role in the curious choice of Mohamed Atta and his terrorist compatriots to attend a flight school in a sleepy retirement community, Venice, Florida, whose attraction for the hijackers remains an enduring mystery.

After leaving Venice in December of 2000, Mohamed Atta and bodyguard Marwan Al-Shehhi returned there on three separate occasions during the six weeks of their lives, according to Brad Warrick, who rented the duo three separate cars from his car rental agency in Fort Lauderdale.

No one knows why.

Compounding the sense of mystery and cover-up surrounding the terrorists' stay in Venice is another unexplained fact:

Less than three weeks after Mohamed Atta and Marwan Al-Shehhi began flying lessons on July 3, 2000 at Huffman Aviation in Venice FL, Huffman owner Wally Hilliard's Learjet was swarmed by DEA agents brandishing submachine guns after it landed, on July 25, at Orlando Executive Airport.

The Lear, agents discovered, was carrying 43 lbs. of heroin, an amount known in the trade as “heavy weight.”

The Orlando Sentinel called it "the largest seizure of heroin in Central Florida history."

After retiring to Naples in 1996, Hilliard hobnobbed with an assortment of international 'players" who are decidedly uncharacteristic of circles a retired-to Florida insurance executives might normally travel in.

A retired insurance executive from Green Bay Wisconsin, Hilliard appears to be the last person anyone would suspect of up-to-their-necks involvement in international intrigue, drug trafficking, or geo-political stratagems.

In the seven years since 9/11 Wally Hilliard has remained embroiled in controversy.

For example, in Jerry Falwell’s Lynchburg, VA in 2002 a previously-unknown company housed inside Hilliard’s Huffman Aviation in Venice managed to win a large government contract at Lynchburg’s Airport, under circumstances that left aviation observers there feeling queasy.

Several years earlier Hilliard had "loaned" Jerry Falwell $1 million to bailout his failing religious enterprise, a loan the televangelist never repaid.

When it won the big contract, Britannia had two employees and a bank balance of $500. Their main competitor had $45 million. In cash.

Hilliard is currently the subject of a multi-jurisdictional fraud investigation into a scheme which may have cost investors as much as $100 million. The State of Florida Office of Financial Investigations and the FBI have interviewed witnesses, including over 50 people, mostly from Wisconsin, who lost millions.

Hilliard never alerted investors that he was under investigation, had a federal tax liability going back to 2001, and had been denied an airline license by the FAA.

Tommy Barranza is reportedly currently under suspicion for structuring cash transactions so Hilliard could avoid currency reporting.

Hilliard is suspected of funneling large amounts of cash to the Bahamas.

Hilliard has friends in high places, including former Florida Secretary of State Katherine Harris, and former Florida Gov. Jeb Bush.

During a recent settlement hearing, a woman who recently sued Hilliard said she asked Hilliard if he ever worried about going to jail.

"Not in Florida, baby doll," Hilliard replied. "No one ever goes to jail in Florida."

After the $700 billion bailout of the financial industry and the $17.4 billion bailout of domestic automakers, Americans are now being asked to pony up billions more to rescue states that have been fiscally irresponsible. A bailout, many argue, would not force states to re-examine their fiscal policies to prevent future deficits and instead would encourage them to continue to overspend.

With more than 41 states facing budget deficits in the current fiscal year, governors are asking the federal government for $1 trillion to help them pay for education, infrastructure projects, and a host of social and health-care programs, according to the National Conference of State Legislatures.

While some are debating the fairness of citizens in states that have been fiscally responsible being forced to pay for the fiscal irresponsibility of other states, the larger question, according to some legal experts, is whether such a bailout is constitutional.

Nick Dranias, director of the Goldwater Institute’s Center for Constitutional Government, said he believes the bailout of states by the federal government would violate the 10th Amendment of the Constitution, known as the enumerated powers doctrine.

The 10th Amendment states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”

This same argument, along with others, has been espoused by Robert A. Levy, chairman of the Cato Institute, to say that the $700 billion Emergency Economic Stabilization Act of 2008 is unconstitutional. Dick Armey, former Republican House majority leader and chairman of the FreedomWorks Foundation, is considering a possible legal challenge to the so-called “Paulson bailout.”

“The federal government does not have the constitutional authority to spend taxpayers’ money to redistribute wealth from one state and give it to another,” Dranias said, as the proposed federal stimulus plan would do because the federal government would be taking possession of a power reserved to the states.

In doing so, the federal government would effectively be “undermining state Sovereignty and rendering meaningless the boundaries among the states and between the states and the federal government,” Dranias said.

“States lack the power by consent to accept the money or to sanction unconstitutional conduct by the federal government,” Dranias said.

If a state creates fiscal policies that lead to a budget deficit, the federal government does not have the authority to take tax dollars of other states to cover the shortfall. Such a bailout would make policy competition among the states impossible, Dranias said.

The framers of our Constitution understood the dangers of unlimited federal power and set up a system of checks and balances to prevent it.

In 1782, Thomas Jefferson wrote that “whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force.”

“If Congress can do whatever in their discretion can be done by money, and will promote the general welfare, the government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exception,” wrote James Madison in a letter to Edmund Pendleton in January 1792.

Later, in 1825, Jefferson lamented that the federal government had already begun to usurp states’ rights and consolidate its own power, saying, “It is too evident that the three ruling branches of [the federal government] are in combination to strip their colleagues, the State authorities, of the powers reserved by them, and to exercise themselves of all functions foreign and domestic.”

James Madison in an address to the Virginia Assembly in 1799 said that “in the case of deliberate, palpable, and dangerous exercise of other powers [not granted to the federal government in the Constitution], the states who are parties thereto have the right, and are in duty bound, to interpose for arresting the progress of the evil, and for maintaining within their respective limits, the authorities, rights and liberties appertaining to them.”

Presently, there is no precedent for challenging these bailouts, Dranias said, because of the problem of “taxpayer standing,” meaning it is hard for individual taxpayers to sue the federal government unless they can prove the spending would be injurious to them personally.

However, a state itself could challenge the constitutionality of the bailout, as could members of Congress. Representatives and senators do have “standing” and have exercised that power in the past to challenge certain laws, such as the McCain-Feingold Act dealing with campaign finance reform, said Dranias.

“One problem with conservatives is that they believe so much in abiding by laws, they often forget that unjust laws do exist,” said Dranius, “and such laws are meant to be broken, peaceably and nonviolently.” He also suggested that those who believe the federal bailout of states would be both an unjust and unconstitutional law could force change much like what happened during the Civil Rights Movement as a result of hundreds of individual lawsuits.

It has become almost commonplace, since the release last week of seven "legal" opinions written in 2001 and 2002 by the Justice Department, to remark that unbeknownst to us we came within an inch of dictatorship. And with President Obama announcing an end to torture and a new policy on signing statements, it is extremely common to speak as if we are moving quickly and deliberately in the opposite direction. But this picture is far too simplistic.

We knew a great deal about what was happening when Bush and Cheney were president. In fact, the reason we find the latest handful of memos so "shocking" is that we are already familiar with many of the actual crimes and abuses they were used to justify. While the transfer of unconstitutional powers to the president began when George Washington held that office and has advanced over the centuries, it did take a dramatic leap forward during the reign of Bush-Cheney. We were indeed within a foot, if not an inch, of outright dictatorship, but we were well aware of it. Many chose to avert their gaze for a variety of reasons. Chief among them were approval of presidential power, loyalty to Republicans, and loyalty to Democrats who chose not to rock the boat.

The picture is also too simplistic because there is far more smoke than fire in President Obama's retreat from imperial power, and there is a fundamental defect in our assumption that limiting presidential power can and should be done by a president, rather than by Congress, courts, and the American people. Obama has announced policy changes, some of them very much for the better, but to choose a policy of not torturing, or a policy of not altering laws with signing statements unless absolutely necessary, is to make choices in areas we previously supposed to allow no room for choice at all. In other areas, including the launching of missiles into foreign nations, rendition, unlawful detention, outrageous claims of "state secrets" and "executive privilege", claiming the right to deny courts access to any classified information, the continuation and even escalation of aggressive wars, the refusal to prosecute known crimes of the previous administration, and the creation of gargantuan powers to spend and lend without accountability for the purposes of bailing out bankers, stimulating the economy, and potentially even providing healthcare in a manner acceptable to health insurance companies, Obama has not only made policy choices but made the wrong ones, made the ones that the Constitution does not allow him.

It strikes me as very unlikely that Obama and Biden will abuse their offices to an extent equal to Bush and Cheney. But it is equally unlikely that the presidency in 2013 will possess only the powers it possessed in 2000, if we leave the job of restricting those powers to the president. Most of us are pleased that Obama has just legalized stem-cell research. Others of us are furious. But we should all be terrified of the state of affairs in which a single person can make such fundamental decisions. The problem is not just that the next president can reverse such decisions, but also that he or she can make decisions completely contrary to the will of the majority of Americans or the rights of individuals. If Obama can choose to stop torturing, but not prosecute any of the torturers, a number of horrible consequences follow. First, the torturers have nothing to fear and torture continues even within a government opposed to it. Second, the levels of secrecy permitted the president allow no one to be sure how much torture is happening. Third, we stand in violation of our laws and international treaties, encouraging lawlessness around the world, allowing the foreign minister of Algeria when accused of human rights abuses by our State Department last month to reply, in effect, "Look who's talking!" Fourth, no matter how much truth we get or how reconciled we become, there is nothing to deter the next president from secretly or openly establishing a policy of torture, and nothing to stop any president from violating any other law. Fifth, we no longer elect executives to execute the will of Congress, but elected despots, kings for four years.

History shows that powers claimed by one president are almost always claimed by future ones, even if not abused to the same extent by the immediate successor. A statement from a president, no matter how good and righteous, is not the way to end a pattern of unconstitutional statements from presidents. Congress should pass a bill banning the use of signing statements to alter laws. Of course, this bill could be signing-statemented or ignored, but it wouldn’t be if the threat of impeachment were reestablished. One way of doing that would be by impeaching Bush and Cheney despite their being out of office, an action for which there is precedent. Another step in the right direction would be to impeach Jay Bybee, former torture memo author, now appellate court judge.


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