ITill Quarterly Economic Report

The deflationary collapse of the Western ba.Rking system

First Quarter 1986

The 60% collapse in the world oil price between January and March has destabilized the international financial system, and accelerated the impetus toward what has been called, "a new depression, on top of the present depression."

What should be done? The answer is simple. Impose an emergency oil import tariff now. The free­ marketeers, and their Soviet friends, will scream about it, but th,e measure is the most readily available alternative to halt the unraveling of the bankrupt international and national financial syster:n.

Did you know that ...

• $250 billion of U.S. banks' domestic assets • The U.S. is on the verge of a revolution in will go bad, in the wake of the collapse of oil medical technology. But the Gramm-Rudman prices since November 1985. The crash will by budget-cutters and Washington cost­ no means be limited to banks' loans to energy accountants threaten to keep these technologies companies. from being introduced, and are "reforming" the • Conditions have been set for a general Medicare and medicaid system into a means for panic among savings-bank depositors, wholesale euthanasia against America's sick whose $1.2 trillion in deposits lack federal and elderly. insurance backing.

Since the fall of 1979 Lyndon LaRouche's forecasts have established a record unparalleled in accuracy by any other economic forecasting service in the nation. Data Resources International and Chase Econometrics proved unable, in the fall of 1979, to correctly forecast the consequences of the credit policy then being initiated from the Federal Reserve by Paul VoJcker. LaRouche did, in the EIR Quarterly Economic Report. Those agencies, and their co-thinKers, have been repeatedly exposed as incompetent bunglers, while the LaRouche record has been maintained.

Full year subscription: $1,000 Single issue (first quarter 1986),150 pp.: $250

Order from: EIR News Service P.O. Box 17390, Washington, D.C. 20041-0390 Founder and Contributing Editor: Lyndon H. LaRouche. Jr. Editor-in-chief: Criton Zoakos Editor: Nora Hamerman Managing Editors: Vin Berg and Susan Welsh Production Director: Stephen Vann Contributing Editors: Uwe Parpan-Henke. Nancy Spannaus. Webster Tarpley. From the Managing Editor Christopher White. Warren Hamerman. William Wertz. Gerald Rose. Mel Klenetsky. Antony Papen. Allen Salisbury Science and Technology: Carol White T he mass-circulation Soviet weekly SovietskayaKultura has run a Special Services: Richard Freeman front-page article defending one of the most notorious mob banks in Advertising Director: Joseph Cohen Director of Press Services: Christina Huth America, First Fidelity of New Jersey, against Lyndon LaRouche.

.;, INTELLIGENCE DIRECTORS: The Russians tell readers that the EIR founder is "at the center of Africa: Douglas DeGroot. Mary Lalevee attention of reporters dealing with the criminal world of the United Agriculture: Marcia Merry Asia: Linda de Hoyos States" (pages 41). Counterintelligence: Jeffrey Steinberg. Paul Goldstein Why are the Russians so obsessed? The article states: "LaRouche Economics: David Goldman . . . has wanted to assume the role of a political leader to revive European Economics: William Engdnhl. Laurent Murawiec America. He even was a candidate for President of the United States, Europe: Vivian Freyre Zoakos and he has not abandoned this idea. . . ." Thero-America: Robyn Quijano. Dennis Small Law: Edward Spannaus Even as the attack appeared, however, Russian propaganda also Medicine: John Grauerholz. M.D. began to extend apparent support to certain LaRouche policies op­ Middle East: Thierry Lalevee Soviet Union and Eastern Europe: . posed by the Russians for more than a decade-for example, East Rachel Douglas. Konstantin George German radio's ringing praise for the same Alan Garda of Peru Special Projects: Mark Burdman United States: Kathleen Klenetsky whom an East German anns shipment was designed so recently to INTERNATIONAL BUREAUS: overthrow (page 49). The fact is, the Russians wish to drive a wedge �angk:ok: Pakdee and Sophie Tanapura between LaRouche and the Reagan administration, and how better Bogota: Javier Almario Bonn: George Gregory. Rainer Apel to do so, than to arrange for LaRouche policy proposals to appear Chicago: Paul Greenberg "Soviet-supported"? Copenhagen: Poul Rasmussen Houston: Harley Schlanger Among the latest developments guaranteed to cause the Soviets Lima: Sara Madueno Los Angeles: Theodore Andromidns to do such backward somersaults are: Mexico City: Josefina Menendez • The annual conference in Erice, Sicily, where the U.S. dele­ Milan: Marco Fanini New Delhi: Susan Maitra gation presented a package unmistakably composed of "LaRouche Paris: Christine Bierre formulations" on the Strategic Defense Initiative, AIDS, and Third Rio de Ianeiro: Silvia Palacios Rome: Leonardo Servadio. Stefania Sacchi World development (page 38). Stockholm: William Jones • President Garda's meeting in Lima with Ibero-American trade United Nations: Douglas DeGroot Washington, D.C.: Nicholas F. Benton, union leaders in defiance of the IMF, to map out a strategy for lbero­ Susan Kokinda America's leaders in defiance of the IMF, to map out a strategy for Wiesbaden: Philip.Golub. Goran Haglund Ibero-America's salvation very like LaRouche's Operation Juarez ElR/Executive Intelligence Review (ISSN 0273-6314) is published weekly (50 issues) except for the second week (page 28). of July andfirst week of January by New Solidarity • President Reagan's launching of a "LaRouche-style" War on International Press Service 1612 K St. N.W .• Suite 300. Washington. D.C. 20006 (202) 955-5930 Drugs, which is to say, war on a major component of Soviet low­ Distributed by Caucus Distributors. Inc. EIU'I1pHIJH.tIdq_n: Executive Intelligence Review intensity warfare against the West. And suddenly, it has erupted into Nachrichtenagentur GmbH. Postfach 2308, Dotzheimerstrasse 166, 0-6200 Wiesbaden, Federal Republic the European press that the largest heroin shipment ever seized in ofGennany Tel: (06121) 8840. Executive Directors: Anno Henenbroich, Europe came from ...Riga, U.S.S.R. (page 40) Michael Liebig In a just-released policy document on the urgency of implement­ In D.nllUll'k: E1R, Haderslevgade 26, 1611 Copenhagen (01) 31-09-08 ing his proposed new U.S. Middle East policy (page 44), LaRouche In Muko: E1R, Francisco Dlas Covarrubias 54 A-3 Colonia San Rafael, Mexico OF. Tel: 705-1295. himself summarizes why the Soviets and their liberal Democratic Jf1lHIII'uJneription .1Iles: O.T.O. Research Corporation, Takeuchi Bldg., 1-34-12 Takatanobaba, Shinjuku-Ku, Tokyo allies are jumping up and down about his growing role. 160. Tel: (03) 208-7821. Copyright C> 1986 New Solidarity International Press Service. All rights reserved. Reproduction in whole or in part without pcnnission strictly prohibited. Second-class postage paid at Wasbingtan D.C., and at an additional mailing offices. 3 months-$I25, 6 months-$225, I year-$396, Single issue-$IO Academic library rate: $245 per year Postmaster: Send all addre ss changes to EIR, P.O. Box 17390. Washington. D.C. 20041-0390. (202) 955-5930 TIillContents

Interviews Economics Science & Technology

26 Dr. Dale Meade 4 Tax reform: last nail in Dr. Meade, in charge of Tokamak U.S. industry's coffin Fusion Test Reactor (TFTR) The new tax bill is not a "free­ experiments at the Princeton market" bill, but a governmental Plasma Physics Laboratory. attack on investment in new plant and equipment.

6 Africa: Survival of Departments millions is threatened

14 From New Delhi 7 The key problem is yet to Kicking the sacred cow. be tackled in the Indian economy The Princeton University Tokamak Fusion Test Re­ 52 Vatican Ramtanu and Susan Maitra, actor (TFTR). False pacifists march on Assisi. writing from New Delhi, explain why the Rajiv Gandhi 20 Fusion test reactor hits 53 Andean Report government's "new economic 200-million-degree policy" is failing to get the proper No to "narco-tolerance." milestone results. Fusion research results are exceeding original estimates. 54 Northern Flank 13 Currency Rates AIDS debate breaks out in 24 The 1980s is not an era for Norway. 15 Agriculture standing still in science Where's the beef? 55 Report from Bonn Excerpts from the speech by Professor Marshall N. Rosenbluth A united ticket for the 16 Domestic Credit conservatives? upon receiving the Department of Commerce Dept. has it backwards. Energy's Fermi Award on Feb. 6, 1986. 72 Editorial 17 Foreign Exchange II gran rifuto . Bonn, Tokyo won't prop up 26 Results that are exceeding dollar. the original TFTR design An interview with Dr. Dale 18 Business Briefs Meade. Volume 13 Number 34, August 29, 1986

Feature International National

38 American scientists uphold 58 Moscow deploys Congress LaRouche ideas at Erice against the President At the VI Seminar on Nuclear And in tum, the President has Warfare in Erice, Italy, on Aug. declared war on Congress over the 18-21, the American delegation issue of national defense. officially proposed to the Soviets Documentation: President that they collaborate to develop Reagan's Aug. 16 radio address. SDI systems. 61 U.S. Attorney Weld's war 40 Soviet link to Rotterdam on U.S. defense Peruvian President Alan Garcia (second from left) re­ heroin haul breaks into ceives leaders ofibero-America's tradeunions in Lima international press on Aug. 15. To his right is Jorge Carrillo (Colombia); 62 The questions Weld must to his leftare Rodolfo Seguel (Chile) and Luis Negrei­ Why have Western governments answer now ros (Peru), and Antonio Carlos Batista (Brazil). have covered it up for so long? Last week, EIR presented National Democratic Policy Committee 29 Democratic trade unions 41 Soviet hand in financial chairman Warren Hamerman's rally behind Peru's Alan war against LaRouche testimony to the Senate Judiciary Garcia A Soviet cultural weekly attacks Committee. Here is the addendum, The IMF declared his country Lyndon LaRouche ...for credit the questions concerning areas of "ineligible" for further credits­ card fraud! investigation the NDPC wishes to but Garcia declared the IMF see pursued. "ineligible" to impose its will on 43 Russian maneuvers biggest sovereign nations, and support for since 1984 65 Massive Soviet biological him is growing. warfare buildup exposed 44 LaRouche: Overhaul by the Pentagon 31 The Lima Declaration: Mideast policy now! Unionists pledge support 68 EIR reports offer radio for Garcia 47 Is a transformation alternative coming in Sino-Soviet 33 'A symbol for all of Latin relations? 69 Eye on Washington America' Recess witnesses the purging of A speech by former Colombian 49 Soviet cell in U.S. bared heretics. labor minister Jorge Carrillo. by 'Pia Vesta'? 70 National News 34 Garcia addresses Ibero­ 51 The Trust & the American trade union Monarchy-Part II leaders On Lord Mountbatten's education The President's historic reply to of England's Red Prince. the IMP's financial warfare against Peru. 56 International Intelligence 36 Colombia needs a new labor federation Jorge Carrillo's address at a Bogota meeting to organize a new labor federation. �TIillEconomics

Tax reform: last nail in U.S. industty's coffin

by David Goldman

Blithely unaware of the bitter irony involved, House and magically occurs when there is demand for it, and that there Senate conferees chose the 15th anniversary of Aug. 15, is no economic difference between bordellos and steel mills, 1971, to approve tax legislation which may well prove to be could produce such an idiocy. the most devastating economic-policy blunder since the day The central issue of thetax "reform"now beforeCongress that President Richard Nixon unlinked the U.S. dollar from is the elimination of the Investment Tax Credit and the gold. With nearly a fifth of our total physical consumption, stretching-outof depreciation schedules for industry,intend­ and a quarter of our capital goods,accounted for by our trade ed to raise about $120 billion from corporations, in order to deficit,the United States hardlyexists as an industrial power. finance a tax cut to consumers. That is not a "free-market" Now Congress, with the open support of President Ronald tax bill (which the President should have suspected, since it Reagan, proposes to tear down the last remaining policy­ originated with liberal Sen. Bill Bradley (D-N.J.) in the first supports for heavy industry, agriculture, mining, and basic place), but a dirigistic attack on investment in new plant and infrastructure. equipment. By now, theusual commentatorshave registeredthe fact­ Governmentsdo not tax corporations' cost of doing busi­ of which EJR first warned in January 1986-that tax reform ness; they tax profits. Capital investment is a cost of doing proposed a general deindustrialization of the United States. business, as much as are wages and salaries. But that cost is That is not how the bill has been sold to the President, by paid out over several years, i.e. over the life of the equip­ such misadvisers as ProfessorMilton Friedman, who has had ment. If an electric utility chooses to scrap a coal-burning Ronald Reagan's ear for much too long. The misadvisers furnacefor a more-efficientnuclear powersystem, increasing laud "the bottom line of tax reform," as the Wall Street its productivity, and lowering the cost of electricity, it ab­ Journal editorialized Aug. 20, supposedly that "it is not sorbsthe cost of its earlier investment at the moment it junks designed to reward or punish income classes or economic the old equipment. Under current rules, it may write off its sectors, but to begin dismantling a complex system of reward investment-that is, renew its plant and equipment-over and punishment. There will be losers, no doubt, but everyone 16 years. The new tax law raises this level to 25 years for must have some sense by now that the intended direction is power-generatingequipment, and the disadvantages to other toward tax neutrality, certainly the right way to go." basic-industry sectors are comparable. "Tax neutrality" has become the most vapid euphemism The government proposes, in effect, to order electric in the recent history of economics. Federal revenues now utilities to postpone new investments in more productive account for a fifth of national income. Tax neutrality? Only powergeneration until 25 yearsafter their earlier investments a gang of economists who believe that capital magically have been made. It has told the rest of industry to delay appears when the market demands it, and that production improving their plant and equipment, because they may not

4 Economics EIR August 29, 1986 treat such improvements as a cost of doing business for tax Agriculture hit worst purposes.That is not tax neutrality; that is a dirigistic direc­ But the worst loser of all is the nation's most productive, tive to heavy industry not to prove productivity. and most depressed,sector: farming. "Congress is saying that capital-intensive industries aren't A coalition of eight farm groups,led by the Des Moines­ as important as service companies," the Wall Street Journal based National Pork Producers Council,sent a letter Aug.15 Aug.19 quoted an expert at the accounting firmTouche Ross. to members of the House- Senate conference committee By eliminating the Investment Tax Credit,an incentive to warning that the depressed farm economy will be devastated capital investment which dates from the Kennedy adminis­ by some of the proposed changes in the tax code. Other tration, and cutting back the depreciation schedule for most groups in the coalition include the American Farm Bureau capital investment,the new tax code penalizes heavy industry Federation, the National Cattlemen's Association, the Na­ more than any other sector. tional Com Growers Association,the National Association of Wheat Growers,the National Cotton Council, the National Real estate the other big loser Grange and the National Milk Producers Federation.The bill The other big loser is the nation's real-estate bubble,the would repeal income-averaging provisions in the current tax one apparent source of support to the nation's economy dur­ codeand limit health-insurance deductions for self-employed ing the continuing post -1979 depression.President Reagan's taxpayers, both widely used by farmers.The loss of income first, 1981 tax revisions sucked virtually all available cash averaging alone will cost farmers $300million per year. into real-estate development,especially commercial real es­ "If Congress repeals income averaging,it would mean tate.The new bill prevents real-estate investors from using farmers suffering from natural disasters and severe fluctua­ tax-losses generated by real-estate investments made with tions in market price would not be able to even out their borrowed money, to write off taxable income from other receipts to more accurately reflect their annual income," a sources.In other words,it eliminates the entire rationale for spokesman for the coalition said.In addition,repeal of the the real-estate bubble of 1979-1985, which produced a 25% Investment TaxCredit would cost farmers another $1 billion. vacancy rate in commercial buildings in the nation's major urbancenters, and wipes out roughly 40% of the resale value Trade collapse of much commercial real estate. At a time when the administration and Congress arecom­ The result, according to Executive Intelligence Review's plaining the loudest that thenation's $170 billion tradedeficit Quarterly Economic Report for the second quarter of 1986, is forcing the country into recession,approval of the new tax will be to wipe out $150 billion in bank loans to real estate, bill takes on a special kind of lunacy. on top of $100 billion of loans already gone bad.The $250 Reuters news service reported on Aug.18, ''The tax re­ billion of bad debt associated with commercial real estate is form bill passed by a Senate-House conference committee larger than American banks' loans to South America. thisweekend is likely to furtherworsen the U .S. trade deficit, Among the capital-intensive industries,the legislation analysts said today. They said a major weakness is that it will: repeals investment tax credits and reduces accelerated depre­ 1) Wipe out the last vestiges of the steel industry,which ciation, considered vital to many heavy industries who need will refuse to make new investments,according to published to modernize to compete with foreign firms in such fields as statements by the management of USX (formerly U.S. Steel); steel and car-making.... Analysts said the tax bill,which 2) Increase the cost of American-made machine tools by has yet to be approved by the full Congress,will increase the at least 10%; price of buildings and machines used by manufacturers 10% 3) Destroy the ability of depressed heavy-equipment to 15%, and this,one said, is about one-third of total produc­ companies to use their losses of the 1979-1986 period to tion cost." offset future income in any recovery, and thus hurt their This year's $170 billion trade deficit, up from $150 bil­ ability to obtain credit; and lion last year,reflects fewer but costlier imports, given the 4) Deliver a final blow to domestic petroleum explora­ collapse of the U.S.dollar. Federal Reserve chairman Paul tion-and-development companies, which will no longer be Volcker, among other public officials,is warning that a fur­ able to finance drilling on the basis of tax incentives. thercollapse of the dollar (now barely above 2 German marks, Originally,the tax package had been advertised as a boon against 3.4 German marks at its 1985 peak) will destroy to consumers,at the expense of business-in fact, a typical America's ability to borrow the funds abroad needed to fi­ income-redistribution program of the sort the liberal Malthu­ nance the gigantic deficit. · sians have pushed for two generations. Since it was hatched One bank commentator, Fidelity Bank of Philadelphia, in the office of such a liberal Malthusian, Senator Bradley, warns,"Current tax reform proposals fundamentally lower that is no surprise.The House- Senate joint bill does some­ the equilibrium level of the u.S. dollar by depressing real thing even worse: What the tax bill takes from heavy indus­ after-tax rates of return on U.S.dollar-denominated assets." try, it hands out to retailers,brokerage firms,broadcasting, That is, the tax bill will crush profits,and eliminate any and other service-industry sectors. further reason to put money into the dollar.

EIR August 29, 1986 Economics 5 The reports says: "Locusts, grasshoppers, armyworms, Africa and rats threaten hundreds of thousands of acres throughout Africa, and the survival of millions of African people, just recovering from drought and famine." In Sudan, malnutrition among children in the South is "approaching the 1984-1985 famine rates," says the report. "Prolonged rains and absence of any kind of shelter makes their condition particularly miserable." Some towns in the Survival of millions South are deserted, while the towns of Juba, Wau, and Ma­ lakhal have takenin respectively50, 000, 40,000,and 35,000 is threatened refugees, mainly women and children. A recent report from Oxfam reveals that of 1 ,600recent arrivalsat one camp, 14% to 28% of the children suffered from malnutrition. "Some by Mary Lalevee 2.5 million people, largely women and children, will need food aid, well into 1987. . . . The majority of thepopulation, On Aug. 18, the International Red Cross announced that it particularly children, are still highly vulnerable to outbreaks was suspending flights of food and other air into several of infectious diseases [such as measles and typhoid] ," contin­ towns in southernSudan, following the shooting down above ues the Unicef report. the city Malakhal of a civilian airliner shortly after take-off In Chad, a plague of grasshoppers is threatening "devas­ from the airport of Wau in southern Sudan. The Sudan Peo­ tation," writes Unicef. The grasshoppers, which last year ple's Liberation Army (SPLA), actively backed by Ethiopia, destroyed some 60,000 tons of cereals, have laid eggs, which claimed responsibility, announcing it had used a SAM-7 hatched in the rainy season. Grasshoppers have been found missile in the operation. All of the 60 passengers and crew at a rate of 500,000 per hectare in areas 80 km south of the were killed. capital, N'djamena. The FAO reports that despite urgent Later, the SPLA announced it would fire on any aircraft appeals to the international community for pesticides: "No flying over the territory it controls, whether military or civil­ pesticides have been delivered to Chad as yet. Requests for ian. A spokesman for the SPLA, interviewed on Aug. 18 by help from rural provinces throughout the country are reaching Radio France Internationale, justified theactions of the rebels crisis proportions," adds Unicef. With no action taken so far, in de facto cutting supplies of food aid into the starving areas a "second attack" of grasshoppers is expected by September, of the south: "Relief aid is abused by the Sudanese govern­ striking leaves and heads of fully grown plants, killing not ment. Aid is going to the Sudanese army." only the final crops but also next year's seeds. Since 2 million Sudanese are facing starvation, the SPLA Burkina Fasso (Upper Volta), Mali, Mauritania, Niger, is deliberately allowing the famine in the region to worsen, and Cape Verde are described by the Unicef report as being in order to win more support for its secessionist efforts. "under siege" from grasshoppers, while in Sudan and Ethio­ "Sudan's famine is SPLA leader Col. John Garang's best pia, widespread infestations of African migratory locusts are weapon," commented a local observer. reported. In Mozambique and Zambia, swarms of red locusts Dramatic as it is, this is just one crisis among many in were produced in three areas for the first time since the plagues Africa. Just how bad the situation is in the Sudan and other in 1930 and 1944. In Botswana, swarms of brown locusts African countries, hit by rebellions, civil wars, insurgencies, have extended over the south, threatening more than 20% of and by draconian austerity measures, is described in a grim the crops with devastation. report issued by the United Nations Children's Fund (Uni­ Unicef also reports that Ghana, a country whichhas signed cef), on Aug. 12. multiple agreements with the IMF, there has been a "marked In its previous report, "Within Human Reach," issued at deterioration in the situation of mothers and children over the the end of 1985, Unicef had strongly criticized the Interna­ last few years-as basic services and other essential needs tional Monetary Fund (IMF) and the World Bank for insisting have become critically limited." The under-five mortality on austerity measures in Africa which had directly led to rate in Ghana has increased from 110 per thousand in 1983 increased infant and maternal mortality rates-through cut­ to 155 per thousand in 1985. Malnutrition rates among chil­ backs in health care, social services, and infrastructure. Its dren are running at 30%. There are several cases of AIDS in latest report, "Update on Emergency Assistance to Affected Ghana not reported by the Unicef report. Countries in Africa," does not name explicitly these organi­ Conditions in other African countries are as bad: Accord­ zations, but is still a damning indictment of those who insist ing to the conclusion of the Unicef report, millions of people, that African nations must first pay their debts, devalue their especially children, are threatened in Angola, Botswana, currencies-making vaccines more expensive and cutting Burkina Fasso, Cape Verde, Chad, Ethiopia, Ghana, Le­ revenue from raw material exports which are already at all sotho, Mozambique, Madagascar, Mali, Mauritania, Niger, time low-prices-and cut government spending. Sao Tome and Principe, Sudan, and Zambia.

6 Economics EIR August 29, 1986 The key problem is yet to be tackled in the Indian economy by Ramtanu Maitra and Susan Maitra from New Delhi

Since April 1985, the Rajiv Gandhi administration has intro­ prise. They did so, overwhelmingly. duced a plethora of measures with the goal of streamlining But nearly two years later, the vision of India of the 21st the slow-growing Indian economy and giving it an impetus century remains hazy. As the Indian popUlation awaits a for faster growth. Commonly referred to as the "new eco­ briefing on the order of battle, a question is taking shape in nomic policy," this package has been the focus of great ex­ their midst: Is it politics-as-usual again, after all? citement both here and abroad. Only the most cynical doubt the Rajiv Gandhi adminis­ Inside India, a coalition of Neanderthal businessmen and tration's intentions. At issue is whether he and his associates socialist ideologues erupted to protest the government's possess the combination of wisdom and courage to take po­ "capitalist turn." On Wall Street, an equally myopic group litical control of economic policymaking, and take the kind celebrated Rajiv Gandhi's alleged conversion to "free mar­ of action necessary to make good on thepromises. ket" magic. Both miss the point. The five-year plans exemplify the problem-instead of The policy package has two principal aims: to loosen the being a powerful lever for transformation of the economy, tight regulatory grip that has strangled industry, on the one the plan has becomea bureaucratic mechanism for placating hand, and on the other, to streamline the fiscal-budgetary all constituencies, for creating the aura of "a socialistic pat­ process to enhance revenue collection and stabilize the busi­ tern of society." While the Gandhi administration might de­ ness climate. Liberalization of import licensing was just one servedly expect kudos for implementing the plan efficiently of the more controversial features of thepackage. and in full, it will be a Pyrrhic victory. While critical infra­ These measures were long overdue. But from the stand­ structural sectors, a prerequisite to productive investment, point of the prerequisites actually needed to move the Indian gasp for breath, ineffective "anti-poverty" cash distribution economy, it is like the elephant producing a mouse. The multiplies. The anti-poverty fundsare controlled by the same urgent problems which have put a brake on the growth of the political powerbrokers who systematically sabotage public­ physical economy over the last two decades, and formed the sector projects in their states by using them as "employment basis for ethnic and religious clashes now threatening to tear factories" for political patronage. The present administration the nation apart, have so far remained untouched. no less than others has found itself dependent on these poli­ Besides infrastructure, which is in impossibly short sup­ ticos to stay in power. Only a campaign for national devel­ ply, and modernization in certain basic industries such as opment can break the stalemate, creating at one and the same steel, machine-tools, andbasic engineering, the centralprob­ time a new mass constituency for progress and a political lem in the Indian economy is productivity, in particular ag­ apparatus across the country capable of translating the Gan­ ricultural productivity. What is requiredis a focused, priority dhi government's intentions into reality. program to generate surpluses in agriculture to vastly in­ It is characteristic of large, slow-moving creatures that it crease investment resources for industry and bring forth the is only with great difficulty that they can be induced to either agro-industries that will provide the transition for the work­ slow down or speedup in the short term. Thus one would not force from agriculture to industry. expect to see much impact one way or the other-either of the policy measures or sins of omission on this account-in Political obstacles a review of theeconomy's 1985-86 fiscal year performance. The problem is only of political economy, in the sense The economy appeared stable. The rate of inflationin the that Friedrich List and Henry Carey stressed by that, the wholesale price index showed a 3.7% rise over the year, development and mobilization of the productive powers of a down considerably from the 7.6% jump it registered in the nation. In the 1984 December elections, less than two months previous year. Industrial outputgrew by 6.1 %, and foodgrain after Prime Minister Indira Gandhi was brutally murdered, production was 148.5 million tons-an increase of 2.3 mil­ the present administration won a massive majority. Rajiv lion tons over the 1984-85 harvest, but about 11.5 million Gandhi campaigned on a commitment to takeIndia into the tons below target, due to a continuing erratic monsoon pat­ 21st century, and he bid thepopulation join him in the enter- tern. Meanwhile, the country's buffer stock of foodgrains

EIR August 29, 1986 Economics 7 has grown to 29 million tons. The government's effort to manage the bufferstock with exports met with some success: TABLE 1 $250 million worth of foodgrains were exported during the Incremental capital to output ratio (leOR) year-an increase of $87 million over 1984-85. The core sectors of industry also registered moderate Plan Years ICOR growth rates. Capacity utilization in the public-sector steel First Plan 1951-56 3.2 plants rose from 73%-79% in 1985-86, and the Steel Author­ Second Plan 1956-61 4.1 ity ofIndia, Ltd. (SAIL), which manages the plants, showed Third Plan 1961-66 5.4 a profit of $600 million for the year. SAIL has entered into a 3 Annual Plan 1966-69 4.9 collaboration agreement with NKK of Japan for upgrading Fourth Plan 1969-74 5.7 and modernization of technology at its three main plants­ Fifth Plan 1974-79 3.9 the Rourkela plant, the Durgapur complex, and the Indian Sixth Plan 1980-85 5.0 Iron and Steel Co. at Bumpur. Saleable steel production rose Seventh Plan 1985-60 5.5 est. by 11.1 % during the year and cement production, now over 32 million tons, showed a rise of 8.4%. Coal, a key ingredient for the power and railroad sectors, registered an annual output of 160 million tons. In order to meet the Seventh Plan target of 226 million tons by 1989-90, Although some industrial facilities, both in the private and several measures have been mandated: improvement of infra­ public sectors, have improved capacity utilization, output structural facilities, opening of new mines, improvement of from capital investment continues to show a downward trend labor and machinery productivity, expediting of land acqui­ (see Table 1). sition for coal mining, and controlling worker absenteeism. After 35 years of planning by the experts, the country Petroleum, used chiefly in the transportation sector and still depends heavily on the monsoon rains for its foodgrain fertilizer industry, went through a price hike to reduce con­ production; power shortages not only haunt industrialistsand sumption and furnish a margin of funds to the treasury. The households, but also farmers. Transportation of raw mate­ oil consumption growth rate did moderate by 0.9% against rials, intermediate products, and finished goods is still a the previous year's growth rate. Electricity generation rose nightmare for entrepreneurs and a financial blessing to the by 8.6% overall; hydroelectric generation, one-third of the railway mafiawho routinely chisel valuable assets by stealing total, dropped by 5.3%. Thermal power plant output,helped from loaded wagons. Indian portshave earnedthe distinction by new installations of more than 2,000 megawatts, in­ of being the most costly in the world. creased by 15.8%. This defines the most immediate context for the govern­ The foreign trade figures, however, were disappointing. ment's bid to move the economy into a faster growth mode. The current account deficit based on trade imbalances rose to A glance at some Indian economic history explains the spe­ about $6.9 billion-an increase of about $2.6 billion. What cific task they have taken on. For decades, Indian business­ caused the deficit is not only the rise of imports-which men, many of whom started as mere traders during the British jumped by $1.6 billion-but also a drop in overall exports. Raj, have complained of the all-pervasive presence of gov­ A key factor was the reduction in crude-oil exports, which ernment bureaucracy in economic activity. They protested had ballooned while India's refining capacity was being ex­ high taxation, delays in obtaining industrial licenses, denial panded to artificially boost the export profile. Generally, of expanded market shares through the Monopolies and Re­ however, volume exports of the traditional commodities­ strictive Trade Policy (MRTP) law, tight controls over for­ sugar, tea, tobacco, spices, raw cotton, cotton yarn, silk eign exchange, and the public-sector domination of the econ­ fabrics, jute products, etc.-stagnated at the same time that omy. terms of trade declined. The new measures, beginning with the 1985-86 budget On the other hand, with the significant drop in spot­ released in March 1985, are an attempt to put to rest those market oil prices and concerted import substitution plans for complaints and put the ball in the industrialists' court. The several large bulk imports such as sugar and edible oil, it is labyrinthine controls over import and export, and other busi­ generally anticipated here that the trade deficit will moderate ness activity, were not the brainchild of any Indian leader, in the next few years. but were introduced by the British Raj to serve its own inter­ India's debt abroad has reached the $20 billion mark, ests, principally keeping India deindustrialized. Following mostly long-term foreign assistance, and debt-service pay­ independence, the welter of trade controls were lifted to ments are estimated at 13.6% of current account receipts for facilitate the heavy industry-based industrialization program 1984-85. It is expected to rise to an average of 17.6% be­ of the first two five-year plans. A "single window" clearing tween 1985-90 at 1984-85 prices. system, which guaranteed investors all necessary infrastruc­ Overall, in the past 15 months, the economy has lum­ tural backup once the license was issued, was adopted. bered along, but with virtually no increase in productivity. But then, in 1958, as a result of a very large burst of

8 Economics EIR August 29, 1986 imports of industrial plant and capital equipment, India was policy, featuring a fairly extensive liberalization of import plunged into a serious foreign-exchange crunch. What controls, was set forth. The policy is aimed at modernization emerged from the crisis was a system in which all industrial and exports, at facilitating technology and other imports licensing was subjected to clearance from the standpoint of needed to augment production. Imports under the so-called foreign-exchange requirements, and a myriad of controls "Open General License" have been significantly increased, were imposed which pushed delays in the licensing process withmajor benefitto the automobile, oil fieldservices, leath­ up to 6-10 years. Over the years, the issuing of licenses and er, electronics, jute manufacturers, ready-made garment, permits has become a thriving new business in its own right. canning, and other industries. As Indians put it: The British Raj was replaced by the License Sectoral policies, such as the textiles policy, were also and Permit Raj. announced. Fertilizer subsidies were reduced and petroleum In March 1985, the government accelerated the liberali­ prices hiked to reduce the foreign-exchange drain. Mean­ zation process that had begun five years before. Twenty-five while, a vigorous effort has begun to bring in the huge pool broad categories of industries were de-licensed entirely, and of unaccounted money from industrial houses, businessmen, in June the de-licensing was extended to 82 bulk drug and government employees, and others. relateddrug-formulation companies. In December 1985, de­ licensing was again extended, now to companies in 22 indus­ A hesitant response tries that were subject to the MRTP and Foreign Exchange The response of the business and industrial communities Regulation Act (FERA), provided that such undertakings to these reform measures has been mixed. Investors were were located in a centrally declared "backward area." For happy to see part of the complex regulatory structure stream­ many of the industries remaining within the ambit of indus­ lined. If the stock market, one of the main sources of capital trial licensing, the facility of "broad-banding" was adopted for the corporate sector, is any indicator, enthusiasm is run­ to allow them to make changes in their product-mix without ning high. Following the announcement of the new mea­ losing time seeking fresh licenses. The government also an­ sures, the stock market showed a steady, almost heady up­ nounced a scheme of capacity re-endorsement for all licensed tum. About $1.5 billion was raised from the capital market units, except those in small-scale sectors or in certain indus­ during the fiscal year, almost a 30% improvement over last tries suffering from acute shortage of raw materials or infra­ year (see Table 2). However, real investment by the private structure, or characterized by high pollution. corporate sector has not shown such optimism: 1985-86 in­ Government also took a series of steps to rationalize the vestment of $2.6 billion is only 10% more than last year. MRTP Act itself. The asset threshold bringing a unit under The financial community's reaction to the government's the purview of the act, set at the equivalent of u.s. $20 policy moves must also be looked at in light of the Seventh million in 1969, was raised to $100million. Later, a new list Plan, launched in 1985, and their own appreciation of the was published specifying 30 broad industry groups in which need for "political will." The total plan outlay stands close to MRTP or FERA companies are permitted to set up new $270 billion (see Table 3). Although modest growth targets capacity, provided the items of manufacture are not specifi­ have been projected overall, there is a great deal of skepticism cally reservedfor the small-scale or public sectors. as to whether even that can be attained. The allotted monies The 1985-86 budget also introduced major tax reforms to will be spent, but if previous plans are any guide, time and foster an environment for growth and savings while at the cost overruns will paralyze a large chunk of the capital. same time encouraging compliance and providing relief to Investors' cautiousness has been accompanied by cau­ lower income groups. As a result, tax collections increased tionary notes froma number of senior Indian economists. Dr. by more than 20% in 1985-86. K. N. Raj, for instance, has drawn attention to the danger of As a followup to the budget, in December 1985, a Long TermFiscal Policy (LTFP) was announced, the firstin India's history. According to the government's annual economic TABLE 2 survey, the LTFP has four objectives. It is expected to impart Funds rised from capital market a definite direction and coherence to the sequence of annual budgets, thus contributing to greater predictability and sta­ Amount Percentage to net bility in the economic environment. Second, it will place Year (million U.S. $) domestic savings more reliance on rule-based fiscal and financial policies as 1980-81 $110 0.6 opposed to discretionary, case-by-case administration of 1981-82 440 2.3 physical controls. Third, the LTFP will facilitate coordina­ 1982-83 640 2.9 tion of different aspects of economic policy. Finally, it is 1983-84 720 2.8 expected to strengthen the operational linkages between the 1984-85 1,100 3.9 fiscal and financial targets of the Seventh Plan and the annual 1985-86 1,580 N.A. budgets. Besides these measures, a new three-year import-export

ElK August 29, 1986 Economics 9 complacency with regardto investment resources implied by the World BankIIMF. For the record, India has duly regis. the new policy so far. Raj finds fault with the government's tered its distress at the situation, but has so far shown scant apparentassumption that the private sector has virtually un­ interestin backing up those delVeloping-nationleaders locked limited resources, such that it can take up whatever the public in battle with the internation.t financial institutions for the sector cannot or should not handle, that the public sector future of their nations. India's decision to observe from the itself does not have a serious resource problem, and that sidelines ensures that any hopefor increased exports is mere exports can be raised fast enough to meet thebulk of foreign­ rhetoric. exchange requirements of the Seventh Plan. The public sector continu!!s to be a net drain on the na­ Raj's concern points to the underlying issue-a low rate tional economy (see Table 5). In 1984-85, public-sector of productivity growth in the economy, the fact that the rate facilities recordeda 2.5% returnon capital employed. Out of of growth of real surplus is static at best. the 207 major operating units, only half showed any profit (and that, before taxes). Ninety units incurred losses, and What didn't change another two managed to break even. Total profit earned was India's export performance over the decades has been about $760 million on invested capital of more than $32 less than satisfactory (see Table 4). The problem was both billion. Without the petroleum sector's $930 million contri­ in increasing the volume of exports, and at the same time, bution, thepicture is one of net losses acrossthe boards. moving out of traditional goods to make a dent in the capital­ There has been no dearth of criticism of the public sec­ goods markets internationally. Untangling the red tape and tor's miserable performance over the years, including from allowing increased technology imports arethemselves of lit­ prime ministers and those accountable for the failures. Re­ tle help. In the first place, no superior (imported) technology cently two reports have been issued by high-level, govern­ can have an effective impact unless the basic infrastructure ment-appointed committees detailing the problems and sug­ in the form of electricity, water, speedy and reliable com­ gesting remedies. The Jha Committee report contains solid munications, cheap and abundant transport, and a pool of recommendations on management, autonomy, and account· skilled and constantly upgraded manpower exists in surplus. ability, governmentclearances and approvals,and the profit­ In its absence, new technology cannot pay for itself, in terms ability of public enterprises, but has so far not met with any of producingan improved quality of product, raising produc­ response fromthe administration or the politicians. tivity, or in the product's export competitiveness, and the The profit motive was, however, never associated with economy would as a result suffer doubly. the public-sector operation. When these facilities were set The second factor is internationaland even more impor­ up, the purposewas to createproductive activity in the back­ tant. Development lending is drying up, as the bankrupt ward areas, and to a certain extent this objective has been Bretton Woods monetary system presides over the descent fulfilled, though not without a cost. The private sector can into trade war and depression. While Ibero-American, Afri­ claim no such excuse. But the private sector has squandered can, and some Asian nations are being strangled by Interna­ away valuable capital by opting for obsolete technology, tional Monetary Fund "conditionalities," India is lobbying employing cheap and unskilled labor, and producingshoddy fiercely for a greater percentage of concessional loans from products. Depending entirely either on government-devel-

TABLE 3 Seventh Plan Sectoral investments in billion U.S. dollars

(1 u.s. $ = 12 Indian rupees)

Gross Investment target Sector Public Private Total

Agriculture & allied products $23.0 $28.3 $51.3 Mining & Manufacturing 35.4 51.8 87.2 Electricity 26.8 0.3 27.1 Railways 10.3 10.3 Other transport 7.4 15.0 22.4 Communications 5.3 5.3 Other services 20.4 44.9 65.3 Total $128.6 $140.3 $268.9

10 Economics EIR August 29, 1986 TABLE 4 Total exports and imports (Average per change)

Export Import Country 1970-75 1975-80 1980-85 1970-75 1975-80 1980-85

India 4.9 5.2 4.2 6.5 0.6 5.5 Indonesia 7.7 4.2 -3.3 21.2 6.4 3.8 South Korea 30.5 16.4 2.9 11.4 11.1 7.7 Brazil 10.5 6.7 3.1 14.1 0.3 1.7 Mexico 4.8 18.6 8.1 9.3 13.3 -8.5

oped technologies or on government pennission to import land under forest cover. By contrast,less than12% of India's foreign technologies, entrepreneurs have spent most of their land has adequate forest cover, and that is dwindling fast. timepleading for further governmentfavors . Today, with the Large-scale deforestation has set into motion a myriad of hint of a productivity drive, modernization, and competition, ecological problems, including massive annual flooding in their first impulse is to look for the nearest socialist ideo­ the Gangetic Valley, the wholesale drainage of rich topsoil logue! into the Bayof Bengal , siltationof reservoirs, and consequent reduction of the lifespan of some hydroelectric units, wid­ The physical drag ening of rivers, and losing of precious rich land, and increas­ In the most basic sectors of the physical economy, the ing the dredging cost of those river-mouth ports. surplus generation essential for any serious, long-term in­ The disastrous impact of the power shortage requires vestment push is negative. The infrastructural weaknesses placing the task of electrification on a war footing. which have become more and more visible will become de­ But the currentenergy plan, which calls for generation of cisive tothe extent thatthe impetus forfaster economic growth 100,000 MW of electrical power by the year 2000, will still takes hold. Moreover, this particular weakness has a geo­ leave the country hostage to power shortages. Plans to pro­ metriceff ect. duce electricity through coal-based thermal power stations Shortage of electricity, for example, does not simply have severe limitations, in particular, thepotential to cause a mean a stopping of productive activity in a particular indus­ breakdownof the alreadyweak transportation system and the try; it will necessarily affect other industries linked in the guarantee of multiplying dangerously high levels of environ­ production chain. The lack of electrical power forces millions mental pollution. to depend on burning wood, which not only gives rise to a Nuclear power is the only solution to India's large power high rate of airpollution, but also to large-scale deforestation. requirement. But to date, inaction on the partof government It was precisely by meeting electricity demand that such fast­ to mobilize industry to build up a strong and efficient com­ growing nations as South Korea have kept 37% of its total ponent supply capability has kept nuclearpower insignificant

TABLE S Performance of public sector enterprises (in millions of U.S. dollars)

1974-75 1979-80 198N1 1981-82 1982-83 1983-84 1984-85

Number of enterprises 120 169 168 188 193 201 207 Capital employed $5,500 $13,480 $15,170 $18,280 $22,100 $24,910 $31,800 Pre-tax profit $260 $18.8 $15.0 $853.0 $1,285.0 $1,240.0 $775.0 Retum to capital 4.7 1.4 0.1 4.6 5.8 5.0 2.5 employed (%)

EIR August 29, 1986 Economics 11 so far as electricity generation is concerned. The plan to sector, employing fully 70% of the workforce. The majority generate 10,000 MW, or 10% of total electricity supplies, of India's rural poor-about 80% of India's population still through nuclear by the year 2000 is inadequate , and ignores lives in rural areas-who earnless than $400annually belong the potentials of the atomic-energy sector, which has enjoyed to the agricultural sector. A good percentage of the urban a vast amount of money and skilled manpower. poor also properly belong to the agricultural sector; they are India's basic steel sector, key to heavy industry, is simi­ driven into the cities to try to make ends meet. larly eating into the national economy. The steel industry , No fiscal or monetary policy will make any dent on the which produces 10 million tons of saleable steel annually, national economy unless the agricultural sector is made high­ has recorded a statistically insignificant growth rate in the ly productive , and the necessary ingredients to do so are made last two decades. Not surprisingly, the cost of Indian steel is plentiful . The first change will have to be abandonment of about twice the cost of Japanese steel . India produces 16 kg the self-servingpre judice that subsistence agriculture consti­ of steel per capita as against 500-600 kg per capita in the tutes some kind of "productive" economic activity, a lie advanced sector, and even this 16 kg is illusory, because in which has served as a ready rationale for the propriety of the the rural areas where more than 80% of the population lives, status quo among planner and politician alike. per capita availability comes down to about 3 kg . That is a The fact that some excellent work has been done in Pun­ significant barrier to the industrialization process in rural jab, Haryana, parts of Uttar Pradesh, and Tamil Nadu in India. raising agricultural productivity underscores the political na­ Here, too, the potential exists: India has one of the largest ture of the problem. As the datafor agriculture shows, overall deposits of iron ore in the world, along with other raw mate­ productivity remains dismally low (see Table 6). In 25 years, rialsrequired for steelmaking, such as limestone and coking average perhectare rice production rose by a mere 0.42 tons. coal. In the 1950s, Japan was producing less saleable steel During the same period, performance in wheat was much than India; today, with no domestic raw materials whatso­ better, and both contrastwith a low performance in the crucial ever, Japan produces 12 times as much steel as India. oilseeds sector-which is today costing India $1 billion per There is a related crucial problem in basicindustry , against year in foreign exchange. which even the limited fiscal-regulatory measures will run The same set of figures show some of the reasons. For aground. And that is the lack of an appropriate industrial instance, only 42% of the irrigable land under rice cultivation relations policy in India. Steel plants, shipyards, mines-in is actually irrigated. Again, in the case of wheat, the situation fact, any industry one cares to look at-is stockedwith any­ is slightly better, while for oilseeds it is disastrous. Fertilizer where from2 to 10 times, and sometimes more , workers than consumption, use of pesticides, and high-yield varieties (in is necessary. While four shipyard workers handle containers the case of rice and wheat) point in the same direction. in the Sri Lankan ports , Bombay port allocates 20 people to Agriculture is not simply production of foodgrains, pulses, do the same job. As a direct result, Indian ports have earned and oilseeds; it also properly encompasses agro-industries the distinction of being the costliest in the world . such as food processing, growing and processing fodder for Former Reserve Bank Gov. R. K. Hazari has recently expanded herds of cattle and poultry, and maintenance and drawn attention to this matter. "It is futile and unnecessary other industrial activities on the input side . Agriculture also to maintain high levels of high-wage employment at the ex­ properly encompasses education and development of the ru­ pense of competitive productivity," Hazari wrote recently in ral population . the New Delhi daily Economic Times. "If we are serious about productivity and desire some elbow-room for innova­ A vision to move the nation tion and the healthy working of competitive forces, there In this, India can take a leaf from South Korea's Saemul must take place a large measure of deregulation of industrial Undong , or "New Community" movement, launched by the relations to encourage collective bargaining. . . . Labor must late PresidentPark Chung Hee in the early 1970s when South be explicitly recognized as a self-respecting adult human Korea was plagued by food shortages. The movement resource, not a protected infantile species." launched by the government involved a $2 billion investment in improving the living quarters of thepeasants, and proceed­ The central challenge: agriculture ed to develop leaders from within the rural communities to The major issues in Indian economic policymaking center oversee the use by the peasants themselves of raw materials on raising productivity and alleviating poverty in that pro­ supplied by the government to build roads, bridges, irrigation cess, and, in particular, in a multifold development of infra­ canals, and make improvements on the land. Saemul Undong structural facilities and some core sector industries, such as was an intense political campaign that reaped a rich harvest: steel, fertilizer, machine tools, electrical machinery, and en­ It raised South Korea's rice productivity by 250% in less than gineering. Top priority must be given to agriculture. a decade ! Statistics show that the Indian agricultural sector-where The urgency of a similarly appropriate political-econom­ subsistence farming is still pervasive-continues to be a net ic approach to transforming Indian agriculture can be seen drain on the economy. Agriculture is the country's largest from the standpoint of land. One hundred years from now,

12 Economics EIR August 29, 1986 TABlE 6 Currency Rates Performance of agricultural sector

Years The dollar in deutschemarks 1960-61 1970-71 1980-81 1984-85 New York late IIfte.--. tbInc

Area under rice production 34.1 37.1 40.2 41.2 (million hectares) 1 .• To tal rice production 34.6 42.2 53.6 58.6 (million tons) 1.lI Percentage of area irrigated 44.7% 37.5% 40.5% 41.9%" Percentage of rice N.A. 14.9% 39.7% 60.4% 1.10 cultivation under HYV Under wheat production 12.9 18.2 22.3 23.6 1.10 �i"""'-� ..... (million hectares) � '-..... To tal wheat production 11.0 23.8 37.5 44.2 1.01 (million tons) 7/ 1 718 7/15 7/22 7/29 8/5 8/12 8119 Percentage of area irrigated 15.1 % 54.5% 69.7% 72.4%" Wheat cultivation under HYV N.A. 35.8% 72.2% 83.1 The dollar in yen New York late afternoon fixing Under oilseed production 13.8 15.4 15.6 19.9 (million hectares) To tal oilseed production 7.0 9.6 9.4 13.1 190 (million tons) Percentage of area irrigated 1.5% 2.9% 7.2"k 14.9%" 1l1li Fertilizer consumption N.A. 11.4 33.8 62.8 (average kg/hectare 170 of arable land)

160 � t-__ � - 'figures available only for 1982-83. � � - ISG 7/1 7/8 7/15 7/22 7/29 8/5 8/12 8/ 19

The dollar in Swiss francs New York late afternoon fixing India's geographic parameters will have remained the same, while everything else will have increased: population, cattle 2.00 numbers, foodgrain production, organized industrial activi­ ty, housing, clothing demand, etc. Surely the food and agri­ 1.90 cultural raw materials demand will not be met by fostering agriculture "anywhere and everywhere." Productivity is the 1.l1li solution. '-- - Agriculture is suitable only in limited areas where the 1.70 '" highest productivity can be achieved. That means concen­ - , � ... --- trateduse of energy per hectarein the form of mechanization, 1.60 711 7/8 7/ 15 7/22 7/29 HIS 8/ 12 8/ 19 improved seed varieties, chemical fertilizers, pest�cides, and so on, to reduce the total energy consumption per ton of The British pound in dollars agricultural produce. It means tilling the most fertile land New York late afternoon fixing using pumped groundwater. -- One such area is the Gangetic Valley, stretching from I.SO � V - - Uttar Pradesh to the Bay of Bengal. This area holds the key � 1.40 to India's economic awakening. Three hundred million peo­ ple live in this basin and the area can provide all the agricul­ 1.30 tural produce that the entire country would possibly need in the year 2000. It can provide more: It can provide the couryry 1.20 with exportable surpluses, with new agro-industrial com­ plexes, new cities, and can be a huge workshop for the pro­ 1.10 duction of skilled manpower. 7/1 7/8 7/15 7/22 7/29 8/5 8/12 8/ 19 Most important, it is a vision that can move the nation.

EIR August 29, 1986 Economics 13 From New Delhi by Susan Maitra

Kicking the sacred cow teria of profitability demanded by the A polemical salvo by Union Energy Minister Sathe boosts moves government. All the units are being to overhaul the public sector. asked to prepare concrete plans, de­ tailing their production programs for the next period and longer-term per­ spective. Depending on the viability of the unit, its management, and plan, furtherconcessions such as interest and ' loan-repayment holidays will be We can't go on the way are ," is marily lie with the adoption of a wrong granted . the way Union Minister for Energy concept of socialismwhich equates an Another major initiative is a poli­ Vasant Sathe headlined the first of a overemployed, top-heavy, inefficient cy now being debated in Parliament to three-part analysis of the crux of In­ and unaccountable public sector with control administered prices, for the dia's economic problems that is pres­ socialism. " To top it off, he adds , "We prices of products produced in the ently circulating in the Parliament and started treating it as a holy cow." Nat­ public sector. Establishing new crite­ the Congress Party , and which was urally, reverent local capitalists were ria for setting administered prices, published in the Times of India. not slow to grab the teat, with its reg­ linked strictly to capital and current The straight-talking Mr. Sathe, a ular, free flow of contract funds. costs of production, will eliminate a senior Congress (I) leader, pulls no Sathe's salvo will undoubtedly major (inflationary) racket by which punches when he documents the mi­ spark a lively and useful debate, com­ public-sector managers paper over serable levels of productivity in the ing as it does in the midst of deter­ huge, chronic losses . core infrastructure and basic industrial mined government moves to clean up In other moves, the Department of sectors of the economy-the power, the mess. Most important, Sathe has Public Enterprises set a startling prec­ coal, and steel industries-andpoints challenged the politicians to lead in edent recently when-for the first to the betrayal of the founding fathers' this urgent nation-building drive­ time-the head of a public sector unit, vision of a "socialist democracy" this pointing out that there is no "monetar­ theheavy engineering firmBum Stan­ represents . ist" solution. Efficient production of dard , was suspended in connection In Australia, 30,000 workers pro­ basic infrastructural goods-cheap with the squandering of public funds . duced 145 million tons of coal an­ and in quantity-is the only basis for A measure of the government's nually, while in India nearly 700,000 creating the new industries to expand determination to kick the sacred cow cannot match that output, Sathe re­ employment and raise living stan­ is the fact that it has refused to bow to ports. Similarly, in steel, while 14,500 dards. a noisy, populist attack on its decision workers at South Korea's Pohang steel The the fate of the Seventh Plan is toenter a jointventure with U. -basedS. plant produce 9 million tons of steel a crucially dependent on the public sec­ non-resident Indians (NRI) , a potent year, 125,000 steelworkers in India tor generating a surplus. In the latest economic factor here these days, to cannot produce 6 million tons. measure to make this possible, the provide management consultancy to Moreover, per capita availability governmentannounced a plan for cap­ the public-sector companies. of these basic itemsis abysmally Iow­ ital-restructuring of the public-sector The proposal forwarded by a group an average 180 KWH of electricity per companies in which accumulated of NRIs in early 1985, was accepted capita, for instance, compared to 7,000 losses through March 31, 1986 are to after a government study advised that KWH in developed countries. But the be written off. No small matter. It is there was a "widening gap" between averages are illusory. For 80% of the estimated here that the cumulative the expertise available in India for Indian population living in rual areas, losses of just five of the heavy engi­ project management, and recom­ the average is more like 30 KWH per neering units add up to about $700 mended that such a joint venture could capita. Ditto for steel . The production million ! serve not only Indian companies, but is not only limited, but so costly that The idea is to free these units of be a base for offering such services to 90% of the population is unable to buy past burdens to given them a chance third countries. Opponents argue that and use electricity or steel at all. to implement new productivity-ori­ it foreshadows a foreign takeover of "The causes of our dismal perfor­ ented measures to improve their per­ the public sector, and an attack on In­ mance," Sathe states bluntly, "pri- formance according to strict new cri- dia's self-reliance.

14 Economics EIR August 29, 1986 Agriculture by Marcia Merry

Where's the beef? " was 9 million sows. Today, the num­ For thefirst time in history, it appears that Americans will eat ber is down to 6.4 million. Although more poultry than beef in 1986. the average number of pigs per litter has gone up from7.1 to about 7.7, this is not enough to compensate for the decline in breeding stock. The USDA has been part of the "anti-meat" lobby during this time pe­ riod, altering their recommended In the latest issue of the USDA mag­ the media propaganda telling you to amounts of meat in the diet, in defer­ azine , Foreign Agricuiture, it is noted "not eat meat," will soon be very evi­ ence to bogus fears about harmful ef­ that the U.S. per capita consumption dent. fects. The scientific reasons for main­ of beef has fallen significantly in the The reasons for the meat output taining animal protein in the diet, es­ 1980s. Recent USDA figures show that decline lie in the mass bankruptcy or peciallyfor children, are well known, beef consumption per capita was 94.4 voluntary close-down of cattle and hog but ignoredby theUSDA guidebooks. pounds annually in 1976; it has fallen producers, under the combined pres­ In this atmosphere, the beef pro­ to 79. 1 pounds in 1985. For the first sure of debt burdens and imports . The ducers have taken the step of attempt­ time in the history of the country, it International Monetary Fund (IMF) ing to counter the anti-meat lobby by appears that Americans will eat more and World Bank have imposed orders conducting their own pro-meat cam­ poultry than beef in 1986. on Third World and other nations to paign. Beef producers are adopting Where's the beef? The U. S. De­ export meat-for example beef from new merchandising techniques in­ partment of Agriculture should know . Mexico, Canada, and Australia, or cluding brandnames such as "natural" The number of cattle and calves in pork from Canada and Denmark-to for products that come from animals the United States has been declining the point of undercutting domestic without anti-biotics, or "light" for beef throughout the 1980s, and rapidly de­ producers so they must shut down. which contains 25% less fat than other clining in the past two years . In 1970, Meanwhile, Mexico and other na­ types of meat. there were 112.37 million cattle in the tions have been impoverished in their Campaigns which counter anti­ country. The number went up to 132 own food supply, to the point of nutri­ meat food-fadism are useful. But this million in 1975. However, today , the tion collapse and disease outbreaks. does not get to the coreof theproblem. number has fallen back to 112 million, The United States-potentially the That requires action in two areas . despite population growth. This means largest producer and exporter of meat First, there are food cartel collab­ that there was .55 of a cow per person and herd technology-accounts for orators of the IMF/World bank that in 1970, but today there is barely .46 only 3% of the world's beef trade. The have desired the reduction in meat of a cow per person. recent years ofIMF-dictated tradepat­ output and availability, in order to gain The same picture exists for pork . terns has put the United States into a further control over meat supplies. For The numbers of hogs and pigs has been position similar to the last days of the example, the nation's top two beef declining steadily in the last 20 years , Roman Empire . During that time, processors-Iowa Beef Processors and plunging in the last year. In 1963, Rome and its immediate territory be­ (IBP), owned by Armand Hammer's for example, there were 59.8 million came so decrepit, the empire relied on Occidental Petroleum; and Excell, hogs and pigs . This number was sus­ food "imports" from conquered lands owned by Cargill, the grain giant­ tained until 1980-8 1, and then began to sustain itself in the home country. dominate all beef supplies in many falling. Today there are only 48.8 mil­ The U. S. beef cattle and hog parts of the country. lion hogs and pigs. breeding stock numbers are shrinking Secondly, most American house­ In 1970, there was about .4 of a at a rate that guarantees severe short­ holds are not eating meat with their pig for every person in the nation. To­ ages in the near future. The calf crop "meat and potatoes" anymore , be­ day there is about .2 of a pig . is one gauge of this . In 1970, the calf cause they are unemployed and can't The imports of beef and pork have crop was 45 .9 million; in 1975, it was afford it. To use this depression as propped up the meat supply temporar­ 50.2 million. In 1986, theestimate for justification for allowing meat output ily. But the real state of shortages , the calf crop is 40. 1 million. potential to decline-as the USDA is currently masked by both imports and The hog breeding stock in 1963 doing-is disastrous.

EIR August 29, 1986 Economics 15 Domestic Credit by David Goldman

Commerce Dept. has it backwards home, because American importers The country'sfo reign dependence means that the shrinking real paid 25% to 40% less thanhome prices for European or Japanese goods , and trade deficit is what caused the economic downturn. 60% to 80% less than home prices for South American goods . That $300 billion tradedeficit rep­ resentedjust under 20% of America's total consumption of physical goods. Stripped of the trade deficit, the U. S. economy would have declined by F or the past eight months,EIR has Since inflation is normally five somewhat less than 20%; some, but warned that the fall of the U.S. dollar pointsor morehigher than the govern­ not most, ofthe goods we importmight would shut down U.S. physical out­ ment reports it to be, an accurate infla­ have found domestic substitutes. put. Now the Commerce Department tion adjustment would undoubtedly In fact, America's capacity to pro­ has revised its second-quarter ''real'' show a decline of Gross National duce declined continuously through­ GNP growth rate data to only 0.6%, Product by several percentage points . out the period. Most production in­ and blamed it on the trade deficit. In the U.S. Treasury Depart­ creases since 1979 are deceptive. Thatis true, but not in the way the ment'sodd view of the world,the fail­ For example, America produced Commerce Department argues. Na­ ure of West Germany and Japan to over 9 million automobiles in 1978, tional-income bookkeeping deducts stimulate their own economies has led and 8.4 million automobiles in 1979; net imports from domestic product, them to buy less from us than we buy the total fell to barely 6 million during and the trade deficithas increased to a from them. the early 1980s, before rising to 8 mil­ $170 billion annual rate . America supposedly buys foreign lion cars in 1985. But the American­ But the real volume of imports has products , and displaces its own man­ made automobile of 1979 gave way to shrunk by perhaps 10%, since a dollar ufacturing and employment with im­ an American-assembled vehicle, 25% worth 40% less than last year's against ports , because of the stinginess of for­ of the components of which were im­ the German mark and Japanese yen eign central banks . ported from abroad . buys fewer goods . Since U.S. indus­ If only Japan, Germany, and oth­ In addition, virtually all of Amer­ trydepends on importsfor a quarter of ers would agree to stimulate their ica's refined copper and aluminum, its capital goods and almost as much economies, the Treasury argues, the major components of automobile pro­ of its industrial components and sup­ American economy would start to duction , and a large proportion of plies, the dollar's fall has drastically grow again. America's sheet steel , were imported increased the cost of operating of nu­ The first fraudulent assumption in as well. merous industries. Auto making is a the Treasury's claim that weak foreign In short, automobile production case in point. trade caused the present downturn, is remainswell below its peak of output, There is no reason whatever to that the United States economy had and the relative improvement since suspect that the Commerce Depart­ experienced anything but a downturn 1980-82 disguises a changeover from ment's report that GNP-i.e., the in­ since 1979. American manufacturing to mere do­ flation-adjusted value of all sales in True, Americans sold and con­ mestic assembly. the nation's economy-is accurate. sumed more, but the net subsidy to the Now that the dollar has dropped With automobile output in the most United States by our trading partners by more than 40% against the Japa­ recentreporting week down a fullone­ more than accounts forany increase. nese yen and the West German mark , third from last year's levels, and alu­ In 1979, when the dollar was foreign components for the auto in­ minum and steel outputdown by about priced reasonably against other lead­ dustry have risen in cost, even though 15%, America's physical economy is ing currencies, the United States ran a the growing proportion of imported shrinking , probably at a 15% to 25% trade deficit of only $27 billion, against components from developing nations annual rate as of the present quarter. last year's $150 billion. remains relatively cheap. McDonald's is still selling ham­ But last year's $150 billion deficit The subsidy is shrinking, and the burgers , so the value of all sales may represented goods which would have American economy cannot make it on not fall as fast as physical production. cost about $300 billion to produce at its own strength.

16 Economics EIR August 29, 1.986 Foreign Exchange by EIR Staff

Bonn, Tokyo won't prop up dollar ity, but to bail out the bankrupt U.S. America's economic suicide should not become an international banking system. Since the U.S. administration, pact, West Germany and Japan agree. through the present tax bill, Gramm­ Rudman, and related programs, in­ sists upon tearing down the facade of economic recovery, and accelerating the decline of U.S. physical produc­ tion, there is no reason for Bonn or Months of top-level international Since the United States depends Tokyo to suspect that Washington is meetings, from the Sept. 22, 1985 upon short-term capital inflows to fi­ remotely interested in stimulating meeting of the Group of Five finance nance its annual $170 billiontrade def­ economic growth. ministers at New York's Plaza Hotel, icit, a collapse of the dollar will ruin They have good reason to suspect through the May Economic Summit in American capital markets, precisely that Washington wants them to mort­ Tokyo, turned to dust on Aug. 21 and when dollar markets face their worst gage their national currencies to re­ 22. The White House on Aug. 21 is­ crisis in history. flate the American banking system. sued, through presidential press On the surface of events, the Fed­ Since Washington, under the con­ spokesman Larry Speakes, an official eral Reserve on Aug. 20 panicked in tinued policy-guidance of Secretary of demand that West Germanyand Japan the face of lower economic growth, State George Shultz and White House lower interest rates, in coordination after the Commerce Department an­ Chief of Staff Don Regan, supports with the Federal Reserve's lowering nounced that "real" Gross National the IMF against Peru and its Ibero­ of the U.S. discount rate to 5.5% on Product had grown by only 0.6% dur­ American allies, they also have no Aug. 20. ing the second quarter. reason to suspect that Washington in­ On Aug. 22, the West German The economic reality is much tends to settle the debt crisis in any Bundesbank issued a blunt statement worse (see Domestic Credit) , and the sensible way. to the effectthat West Germany'scen­ financial reality is even worse thanthat. It is no surprise,under the circum­ tral bank would not bow to outside The 91st U.S. bank failure this year stances, that West German central pressures upon its monetary policies. occurred the same day. The Federal bank spokesman Claus Koehler Aug. That leaves the dollar positioned Deposit Insurance Corporationis run­ 22 responded to Reuters news ser­ for a collapse better resembling the ning out of tricks to keep insolvent vice's question about the White House destruction of the British pound under banks afloat. dictates concerningGerman monetary the Callaghan government in 1976-77, Worse still is the position of the JPOlicy, "That we are going to do in than the previous collapse of the U.S. major U.S. international banks, of peace.We have never let ourselves be dollar during 1978. Britain, before which the 15 largest have accumulat­ influencedby pressure-eithera pres­ North Sea oil came on line, reliedupon ed more than $1.25 trillion in "off­ sure from inside or outside." foreign deposits held in British pounds balance-sheet liabilities," offering Regarding the collapse of the dol­ to finance its trade deficit. loan-guarantees and similar forms of lar, continuing on foreign-exchange Reluctance of international hot risk-exposure, in return for up-front markets, Koehler told Reuters, "We money to remain in sterling, given the fee income. have accepted the lower dollar rate and collapse of the Britisheconomy, forced Peru's rejection of the Internation­ done nothing against it." England to raise interest rates to 18%, al Monetary Fund brings the devel­ A week earlier, the governorof the a peacetime record exceeded three oping-sector debt crisis to the fore­ Bank of Japan, Satoshi Sumita, said years later by Fed Chairman Paul front, at the moment that the oil price­ that Japan had no intention of lower­ Volcker, to keep funds in the country. collapse is scything down oil-patch fi­ ing interest rates. The U.S. dollar now stands at just nancial institutions, and the new tax In any event, it is folly to believe over DM 2.04 and yen 153, a six-year reform legislation threatens to pop a that lower West German or Japanese low in Frankfurt, and a postwar low in $250 billion real-estate lending bub­ interest rates would have any impact Tokyo. There is nothing to stop the ble. whatever on economic activity, or dollar from falling well below its 1978 Germany and Japan are being anything otherthan a temporary effect bottom of DM 1.78. asked not to stimulate economic activ- on the dollar's exchange rate.

ElK August 29, 1986 Economics 17 BusinessBrief s

Waron Drugs American economic aid: This was the con­ international financial circles. According to Democrats introduce tents of a private message sent by Secretary an editorial in Financial Times of Aug . 12, of State George Shultz to Israeli leaders, via Egypt must be prepared to make many fur­ their own bill Finance Minister Moshe Nissim, the Finan­ ther concessions before it can expect its in­ cial Times reported on Aug. 16. As a result, ternational creditors to upgrade economic A $1.4 billion drug-trafficking bill was in­ the Israeli government has decided to ap­ assistance to Egypt. troducedinto the Senate on Aug. 15 by Den­ point two separate committees to "study the The editorial warned that the present nis DeConcini (D-Ariz.), who typically at­ Shultz economic proposals. " Egyptian government was not doing enough tempted to make the need for anti-drug leg­ Pending a restructuring of the "state­ to meet IMF demands. Thus, perhaps there islation into an issue against President Rea­ dominated Israeli economy," the adminis­ "should be a change in the government." gan's Strategic Defense Initiative. trationwill not offerfurther emergency eco­ A Similar threat against the Mubarak "We're willing to gamble $3.5 billion nomic aid to Israel, the message said. government was made in the Aug. 15 issue on a 'StarWars ' system that might not work, According to Reuters on Aug. 19, State of the :'Foreign Report" of London's The yet the Reagan administration has been un­ Department spokesmanCharles Redman told Economist. which revealed that Defense willing to provide the muscle needed by our reporters George Shultz would consider Minister Abu Ghazala "may oust Mubarak law-enforcement agencies to put our anti­ making a trip to the region if a "break­ in hopes of satisfying [Egypt's] critics." drug effort into overdrive ," Senator De­ through" appeared imminent, and that the It goes on to detail the rise of Islamic Concini said. ''This legislation will finally administration is reviewing recent "positive fundliirlentalist activities in the country, provide our law-enforcement agencies with developments" in the Middle East that have shown by dozens of fires deliberately set in the resourcesthey need to mount a full-scale raised hopes for progress in the Arab-Israeli and around Cairo in August. Although some war on illegal drugs." peace process. 175 members of the al Jihad organization The bill calls for the Defense Depart­ "We keep events in the Middle East un­ were arrested in early August, their arrests ment to provide $900 million in additional der constant review," Redman said. "There showed that they are receiving strong sup­ resources to civilian agencies and $357 mil­ have been positive developments involving portfrom army officers , the Report claimed. lion tothe U. S. Customs Service to increase the region recently. " air and sea-interdiction programs. It also earmarks $100million for the Coast Guard Technology for new equipment and 1,500 additional Debt drug-enforcement personnel. Swe

18 Economics EIR August 29, 1986 Briefly

"Cows have had to be kept indoors ....All a new medium-range rocket with the speci­ this to prevent human beings from eating fication that it have a commercial applica­ dangerous substances. Nuclear power must tion. Private commercial launches could be- • GIBRALTAR is becoming the begotten rid of. " gin by 1989. "Hong Kong of the Mediterranean," Strangely, Carlsson had no harsh word attracting large sums of money pri­ for the Russians or their lack of safety mea­ marily fromBritish expatriates living sures, although Chemobyl reactors are of a Foreign Exchange in Spain andPortugal, theDaily Tel­ type discontinued in the West in the 1950s. egraph of London reported Aug. 16. The speech marked a renewed campaign 'Foreign transactions' "Gibraltar has obvious benefits over under way inside Carlsson's Social Demo­ such places as Panama. It is also out­ cratic Party to outlaw nuclear power, which outstrip world trade side the realm of U.K. tax legisla­ would demolish the Swedish economy. tion." Sweden is, at present, 40% nuclear-depen­ The United States, Britain, and Japan aver­ dent for energy . aged $60 trillion in gross foreign transac­ • FIVE U.S. SENATORS intro­ tions as of March 1985. According to stud­ duced a bill on Aug. 15 to impose a Space ies released by central banks, daily gross barrel fee on imported oil to protect foreign-exchange transactions averaged the domestic industry. The sponsors Administration says $240 billion among the three countries. hail from oil-producing states, and U. S. banks and financialinstitutions had include Sens. Lloyd Bentsen (D­ orbiter will be built gross foreign-exchange transactions of $77 Tex.), Russell Long (D-La.), and Pe­ billion a day in March-or roughly $59 bil­ ter Domenici (R-N.M.). The bill President Reagan announced Aug. IS that a lion, eliminating double-counting of trans­ would set a $4 per barrel fee on oil fourth Space Shuttle orbiter will be con­ actions between two institutions. prices below $18 per barrel, falling structed to replace the Challenger, begin­ The average trade by U.S. banks was incrementally to reach zero when oil ning this year, and, contrary to lying reports $3 .4 billion, but London leads the world in prices reach$22 perbarre l. in the media, without cutting any other foreign exchange volume, according to a NASA program to pay for it. He will ask survey by the Bank of England. • THE WORLD BANK'S net Congress foran additional $272 million for This is about 50 times theannual volume transfer to the developing sector in FY1987. The orbiter is to be completed by of world trade . 1985 was close to zero, according to 1991. the London-based Afr ica Research The Presidentsaid that the effort will not Bulletin in ap.d-August. One finan­ interfere with the timetable for the construc­ International Trade cial analyst said: "The very raison tion of the permanently manned space sta­ d'etre of the Bank as a development tion. The announcement keeps the United u.s. wants to keep finance agency will come into ques­ States on the timeline for optimum deploy­ tion ....We are facing a disastrous ment of both the SDI and the Space Com­ Soviets out of GATT scenario whereby theWorld Bankand mission's projections for a permanentsettle­ theIMF have becomea 'drain' on the ment on Mars by 2015. The Reagan administration will opposethe resources of the developing coun­ White House spokesman Larry Speakes Soviet bid to participate in the General tries." In the fiscal year ending June broke precedent by making a direct link be­ Agreement on Trade and Tariffs (GATT), 30, the IMF had withdrawn some $4 tween the Shuttle effort and the President's the U.S. Trade Representative's office said billion fromdeveloping countries. Strategic Defense Initiative, normally on Aug. 21. avoided because of the civilian role of Spokeswoman Debra Busker said, "The • ITALY'S ALITALIA Air Line is NASA. In response to queries by EIR . Soviet internationaltrading system is at fun­ beginning direct flights between Speakes made the understatement, "[The damental, practical, and philosophical var­ Rome and Lima, Peru, Alitalia's di­ new Shuttle] will help more than hurt." iance with the principles and practices of the rectors announced on Aug. 19. The Also, the path for this deployment was GATT." flights will be twice weekly, and will cleared by allowing private development of GATT sources in Geneva announced bethe only directflights to Lima from space launch capabilities, with the an­ Aug. 20 that the Soviet Union had made a southern Europe. Alitalia's directors nouncement that NASA would no longer bid to take part in the 92-member world said the flightswere beinginitiated in handle commercial contracts. Contracts from trade body, in a letter from General Secre­ view of the growing trade between the Department of Defense were drawn up tary Mikhail Gorbachov to the GATT sec­ Italy and Peru. in early August to four major firmsto design retariat. -

EIR August 29, 1986 Economics 19 TIillScience &: Technology

Fusion test reactor hits 200-mi]1ion-degree mllestone

By 1980, scientists were sure enough qfJus ion to propose a commercial plant by the year 2000-but recent resultsar e better than predicted even six months ago. Carol White reports.

Fusion scientists and engineers at the Departmentof Energy 's simultaneously means that we'are now indeed on the verge Princeton Plasma Physics Laboratory have achieved a tem­ of a new industrial age-the plasma age , perature of 200 million degrees (Celsius) in the Tokamak The ability to obtain power generation from sea water Fusion Test Reactor (TFTR) , it was announced on Aug. 7. (where the needed deuterium and tritium isotopes of hydro­ This is 10 times hotter than the center of the Sun and the gen arefound) is only a harbinger of an age in which mankind highest temperature ever recorded in a laboratory . will have orders of magnitude higher energies at its disposal. "This marks a major milestone in progress toward the By controlling high energy plasmas, mankind will be able to development of fu sion energy," said Energy Secretary John fulfil the alchemist's dream, transforming and creating the S. Herrington. "The temperature achieved is in the range basic chemical elements at will by devices such as the fu sion required for a fu sion reactor. These promising results bring torch. us closer to the goal of fusion energy." According to Dr. John The immediate goal, predicted for next year, is energy Clarke, director of the Department of Energy's Office of break-even, which means that the release of energy from the Fusion Energy, which is responsible for the funding of the fu sion process exceeds the amount of energy needed to gen­ TFTR , we can have a practical fu sion power reactor within erate the process. TFTR is one of four major tokamak facili­ 15 years . ties in the world today, the others being locatedin the United Since the beginning of the Atomic Age, scientists have Kingdom, Japan, and the Soviet Union. Similar results are known that it would be possible to create in a reactor on Earth expected in these as well. the process that powers the Sun and the stars , and for 30 In order to reach break-even in a fusion reactor, two years, there has been steady progress in understanding and separate conditions must be met: Both the plasma tempera­ doing this. Fusion reactions occur when the nuclei of the ture and the quality of magnetic heat insulation must exceed isotopes of hydrogen (deuterium and tritium) "fuse" to form threshold values. The problem with achieving nuclear fusion a helium atom , releasing energy in the process. is that it is not sufficientto simply heat the fu sion fuelto some By 1980, the scientific community felt assured enough of requiredtemperature . At the same time that it is being heated , the promise of fusion research to push for U.S. legislation the fuel must be kept concentrated and insulated against los­ that would mandate a commercial fusion plant by the year ing its temperature . The general approach to doing this that 2000. The latest results, however, are better than predicted, is being pursued at Princeton is thatof magnetic confinement. even withinthe last six months. They are especially important The TFTR consists of a doughnut shaped magnetic "bot­ because the high temperature achieved is coupled with im­ tle," which is used to trap and insulate hydrogen fusion fuel . provements in the density of the plasma and the duration and At the high temperature-44 million degrees Celsius-re­ strength of containment. quired for fusionof the heavy isotopesof hydrogen to occur, The fact that all of these developments are occurring the hydrogen gas is ionized. That is, the gas is a plasma, like

20 Science & Technology EIR August 29, 1986 Field CoIls

L-����ct�-���

TFTR that in a neon light. Because plasma is highly responsive to than for break-even. But an ignited fusionplasma provides electricity, it can be confined by the properly configured the basis for a practical fusion reactor. In 1976, based upon magnetic fields. his revolutionaryAlcator results, Coppi proposed to leapfrog While the TFfR is no longer the largest in the world­ a break-even experiment and achieve full ignition, with a the European Community's Joint European Torus (JET) at small Tokamak, but one built with the most intense magnetic Culham, England is the largest inthe world, and the Japanese field possible. His compact ignition designs were based on IT-60 is next-the TFfR was the pioneer. When it was in the results being obtained on the Alcator, including an en­ the planning stage, it was probably the most sophisticated hanced confinementregime which has now, probably, been construction project in the world, a challenge to American rediscoveredby the TFfR. engineering. For example, it had to be machined to a toler­ At the time, Dr. Coppi was ignored. But today, after ance of 1I30,000th of an inch, a demand that only one U.S. almost a decade of experimental confirmation of Dr. Coppi's company was capable of fulfilling at the time. projections, we have reached the point where his compact In 1974, the MIT Alcator Tokamak, built under the di­ tokamak ignition proposals have been adopted as the chief rection of Professor Bruno Coppi, essentially demonstrated focus of the U.S. magnetic fusion program. that the confinement and insulation needed for break-even The emergence of the enhanced confinement regime on could be attained, and in 1978, the predecessorto the TFfR , the Princeton TFfR vastly increases the possibilities for the thePrinceton PLT Tokamak, attained a temperature of better Western European JET tokamak to attain fusion ignition by than 60 million degrees Celsius-far in excess of the 44- 1990.JET is much larger than TFfR and has the capability million-degree minimum. Far more important, this experi­ of a much longer sustainment time. This could possibly be ment demonstrated a qualititative result, that fusion temper­ furthered by using radio frequency ramp-up to increase the ature plasma regimes could be stably confined (kept concen­ sustainment time. This approach is based on a process in trated) with some degree of good insulation-what can also which radio waves can be used to generate electrical currents betermed energy confinement, and energy confinement time. in tokamak plasmas. Ignition is the essential prerequisite for a practical fusion Actual ignition experiments will provide the context in reactor. It is defined as the point at which the fusion plasma which a real science of the fusionprocess can be empirically is able to maintain itself at fusion temperatures. That is, the developedfor the firsttime . Based on our currentknowledge, fusion plasma first of all produces a large output of fusion we know that ignition can lead to the development of practical energy. Second, the plasma absorbs enough of this fu sion fusion reactors within 15 years. But new processes which energy output to balance its own heat loss. ignition may uncover, could lead to the development of self� Much higher temperatures, plasma densities, and energy sustained fusion systems and near-term realization of ad­ confinement times are required for fusion plasma ignition vanced-fuel direct-conversion fu sion reactors .

EIR August 29, 1986 Science & Technology 21 TABLE 1 Progress on some major tokamaks

TFTR JET JT-60 Alcator C Doublet III ISX-B Princeton Culham, England Tokal, Japan MIT San Diego Oak Ridge

1. Date operational 12182 6/83 4/85 4/78- 11/86 1978-9/84 1978-84

2. Highest combined density & confinement time, nT (seconds x nuclei/cm3)( x 1013) 15 4-5 3-4 6 1.3 -0.07

3. Ion temperature at highest nT (kiloelectron volts) 1.2 1.8 -1.5 1.7 2

4. Highest average electron density, n. (electrons/cm3) (x 1014) 3 0.8 0.5 15 1.2 1.5

5. Longest confinement time, T (seconds) 0.75 0.8 0.4-0.5 .055 0.120 0.025

6. Highest ion temperature, T, (kiloelectron volts) 18-20 7 2 6 1.6

7. Lowest impurity level, Z." high density -1.0 (avg. atomic number) low density 2.5-3 2-2.5 good 1.2 1.0 1.1

8. Highest confinement quality, J3 (%) <1 2.6

9. Toroidal field strength at highest confinement quality, B, (tesla) 10 r0.6 ro1.3 0.8

10. Highest toroidal field strength used, B, (tesla) 5.2 3.5-4 4.2 14 2.6 1.6

11. Highest current used, I (megamperes) 2.5 4.8 1.5 0.8 2 0.23

12. External heating, P (megawatts) neutral beam (deuterium) 12.5 now, 25 soon -7 8 2.5 radio frequency -7 1 .6 absorbed 0. 15

13. Major radius of torus, R (meters) 2.48 2.96 3.0 0.64 1.43 0.93

14. Plasma volume (cubic meters) 35 170 54

Fusion breakeven-and beyond-will soon be achieved by the "big three," TFTR , JET, and JT-60, and by the successor to the Alcator C. All of these machines have achieved the necessaryLawson prod­ uct (combined densityand confinementti me, fiT; the threshold is 3 X 1013 nuclei-seconds per cubic centimeter), as shown on line 2. None of them has simultaneously sustained the temperature of 93 million degrees Celsius (8 kiloelectron volts) that is the other thresh­ old condition fo r breakeven, as shown on line 3. The more than 200 million degrees Celsius (actually 18-20 kiloelectron volts) achieved by theTFTR in mid-July, a world record (see line 6) exceeds the thresholdfor breakeven and is suitable fo r an economical working reactor. But it was achieved at a signifi­ cantly lower Lawsonproduct (1 X 1013). Machines pursuing confinementquality , rather than breakeven, are GA Technologies' Doublet 1Il and the ISX-B at Oak Ridge National Laboratory(see lines 8 and 9) . Confinement quality, �, essential fo r an economical working reactor, is the ratio of the energydensity of the plasma (density X temperature) to the strength of the magnetic fieldrequired to confine it. Beta of 6-10% is consid­ ered necessaryfo r a working reactor. The highest � so fa r, 5.3%, was achieved on the Princeton Beta Experiment, PBX, not shown above, but described in the interview with Dr. Meade .

Princeton University's Tokamak Fusion Test Reactor (TFTR)

22 Science & Technology EIR August 29, 1986 The status of the tokamak projects

TheTFTR , built and operated at Princeton University for the Department of Energy, in mid-July achieved a new temperature record of 200 million degrees Celsius, 10 times hotter than the center of the Sun and the highest temperature ever recorded in a laboratory. "This marks a major milestone in progress toward the development of The JT-60,a large tokamakdesigned by the Japanese Atomic fusion energy," according to Energy Secretary John S. EnergyResearch Institute. Herrington. "The temperature achieved is in the range required for a fusion reactor. These promising results bring us closer to the goal of fu sion energy," he said. Doublet III is GA Technologies' experiment in con­ finement quality (Table I line 8). It has already been JET is the Joint European Torus, a project of the European succeeded by Doublet III -D (firstplasma , February19 86), Community. It is by far the world's biggest tokamak in but it is too early for significantresults. High betas (�), or terms of the volume of plasma contained-and volume is the ratio of the outward pressure of the plasma to the field important (see line 14 on Table 1). JET and the TFrR are strength required to confine it, are expectedthis winter, the only tokamaks equipped to handle tritium-the deu­ once neutral beam heating is in place, says Dr. James terium-tritium combination is 200 times more reactive Luxon, technical coordinator for the Doublet. than deuterium-deuterium. Neither has yet achieved re­ ISX·B, the Oak Ridge National Laboratory experi­ sults adequate for introducing tritium. ment in confinement efficiency, was shut down in 1984. Because of stingy funding, there is no successor tokamak JT·60 is the big Japanese tokamak, operational only since planned. The lab is building a stellarator, the Advanced April 1985. The early results shown here are based on Toroidal Facility (ATF) , that is expected to achieve high incomplete instrumentation and are only indicative, ac­ � at high temperatures in steady state operation, according cording to Dr. Curt Bolton of the Department of Energy to Dr. Michael Saltmarsh,head of the ORNL Confinement Office ofFusion Energy. Neutral beam heating began this Projects Section. It will operate with plasma in March month , and its substantial contribution should be reflected 1987, "but we will not have a clear picture of what it will in early results, Bolton says. do for about a year," Saltmarsh says. ORNL's continuing major contribution to tokamak MIT's Aleator C, operated under contract with the De­ research is its development of neutral beam and pellet partment ofEner gy, was designed to achieve break-even injection equipment-technologies as complex as the to­ with a small, compact machine using very strong magnetic kamak proper. The TFTR uses pellet injection built at �elds (Table 1 lines 2, 3 and 10). Alcator C will cease ORNL, and Princeton's PBX device uses four ORNL operating in November 1986, but may be reincarnated at neutralbeam injectors. Lawrence Livermore National Laboratory. The successor The Soviets are still a major contributor to tokamak machine at MIT, the Aleator C·Mod, will have new to­ development-an approach they invented-while not at roidal and poloidal magnets and a new vacuum chamber. its forefront. Their current machine, the T·tO, is roughly It has been designed to maintain a high Lawson product comparable to thePrinceton Large Torus (PLT) , a leading (m) while achieving high temperatures with radio fre­ machine of the late 1970s. Work done with the T-1O on quency heating. It is projected to achieve 5 kiloelectron electron cyclotron heating (a form ofradio frequency heat­ volts while m = 1-2 x 1014, according to Dr. Ron Parker ing) has been unique. of MIT's Plasma Fusion Center. That would still be below The next Soviet tokamak is to be the T -IS, according the threshold for full ignition. But C-Mod would serve as to Bolton at the Department of Energy . The T-15, he says, a half-scale prototype of the projected Compact Ignition is the rough equivalent of the TFrR or JT-60, and con­ Tokamak (CIT), having the same magnetic field as the struction is under way. "Two years ago, it was to come up eventual CIT, according to Parker. in 1986; obviously, there have been delays," Bolton says.

EIR August 29, 1986 Science & Technology 23 The 1980s is not an erafo r standingstm in science

A speech byfusion scientist Professor MarshallN. Rosenbluth upon accepting the FermiAwar d.

Professor Marshall N. Rosenbluth, leading U.S. fusion fusion's prospects for eventual success? Not only because of theoretical scientist, received the Department of Energy's the increasingly better plasma conditions we have achieved, prestigious Fermi Award on Feb . 6, 1986. Whatfollows are but more basically for a reason which may sound a bit strange excerptsfrom the sp eech he made on that occasion. Rosen­ to a nonscientist-that I have felt, especially within the past bluth has directed the Institute fo r Fusion Studies at the few years, that understanding is maturing, that theory and University of Texas at Austin since 1980. Prior to that, fr om experiment are converging, and that within the parameters of 1967 to 1980, he was at the Institute fo r Advanced Study at our understanding lie the parameters for success. Princeton . Let me perhaps run quickly wit;h you through those 30 years of magnetic fusion research we have shared . The 1950s Science today is no longer primarily a product of individual were a decade of innocence when we hoped to succeed with­ brilliance. To paraphrase Thomas Edison, it is 10% inspira­ out really understanding what we were doing. Early research, tion and 90% cooperation. While I am delighted to receive in particular my own at Los Alamos, centered on the simple this award, I am happier still with the real purpose of the Z-pinch. We could properly estimate the dynamical time occasion: to recognizethe efforts and contributions of many, scales, but immediately uncovered the insidious kinks and many people in fu.si9n research, some of whom I am pleased sausages, the first visible head of the instability hydra. Early to see heretoday. work with stellarators and magnetic mirrors also quickly ran I am a physicist, like most of us, for two reasons. First, into trouble. Confinement in all these earlydevices was many for the intellectual thrill of understanding the universe a little orders of magnitude below what we hoped for and have now better. To me that understanding has a deep spiritual mean­ attained. I might remark parenthetically that one of the real ing. A ceremony such asthis conveys thatour citizens, through triumphs of understanding of recent years has been the final our government, share to some extent in the feeling that an elimination, in accordance with the very complex theory, of increase in scientificknowledge adds a little bit to all of us. the so-called losscone modes which had plagued mirrors My second reason for becoming a physicist was a deep since those early days. conviction that technology could make life easier and better The 1960s were the decade in which a fundamental for the human race, indeed was essential for its continued frameworkof theory was laid down-a solid, if incomplete, existence. I have been extremely fortunate in being able to framework which serves us to this day. From the raw intract­ combine these two motivations into a careerprimarily devot­ able equations for the behavior of innumerable individual ed to the quest for controlledthermonuclear fusion . Precisely particles we could derive the appropriate tractable equations because of these dual satisfactions, the worldwide fusion for the basic types of plasma dynamics-the ideal magneto­ community is a close-knit and happy one. Being associated hydrodynamics, resistiveMHD , small-scale drift waves, and with it has brought me great joy through the friends I have the anisotropy driven modes referred to before . These modes made . areknown not only in laboratoryplasmas , but throughout the President Reagan at the summit demonstrated keen in­ universe. The 1960s were perhaps the era of my own maxi­ sight by recognizingthat fusionresearch is an area where the mum productivity, the Golden Years of the TAERF program world has worked in harmony and can continue to do so. I at General Atomic, which incidentally marked the beginning trust that concrete details ofthis great cooperation can soon of my "Texas Connection" which continues happily today at be finalized. the Institute for Fusion Studies in Austin. Why, after 30 years of effort, am I so optimistic about While the 1960s were a decade of progress in theory,

24 Science & Technology EIR August 29, 1986 experimentscontinued to be disappointing-duein large part termneeds must be met. Much human distress mustbe alle­ to small scale and to inadequate technology. This situation viated. What is necessary for national defense is not com­ was changed towards theend of the decade withthe dramatic pletely under our control. successes of the Soviet Tokamaks. In the face of those demands , do we have the national The 1970s saw a great increase in support for fusion resolve, and the appropriate mechanisms for pursuing the research, due in part to renewed hopes raised by Tokamak long-term adventures on which 21st-century greatness will results and in part to the oil crisis of those days . With these rest? Basic physics and biology, energy research, and space new funds , the needed technology, for example, heating and exploration come to mind. diagnostic techniques, could be developed and smarter, often Progress in such adventures is often slow; sometimes we costlier, but more successful experiments deployed. I was suffer failures as Three Mile Island and last week's terrible fortunate enough to be in Princeton during this era of progress Challenger tragedy illustratetoo well. Thetemptation to drop and participated as theoretical work of the 1970s evolved towards nonlinear theory and large-scale computation. Now in the 1980s, the world's break-even size tokamaks are on line: The Princeton TFrR, the Euratom JET, and the I would happily exchange the Japanese JT-60. It is striking that, despite the more than a proceeds ojthis marvelous dayJor decade that has passed since theirplanning, and despite many fascinating details we have not yet digested, their overall the assurance that I will be able to behavior is very close to original predictions . They will al­ take partin this great human most certainly fully meet their objectives. triumph. I want to see controlled To illustrate why I say understanding is maturing, let us look at the three main features of tokamak behavior. When fusion in my lifetime, and I am enough heating power was applied to test predicted pressure sure I will, justas I am confident confinement limits , these limits exactly matched those of the that taming our most abundant MHD theory . Magnetic islands grew and saturated or dis­ rupted , and sawteeth reconnected just as a priori nonlinear energy source will ultimately lead resistive theory had postulated. And while a theory precise us to new heights. enough for engineering calculations does not yet exist for anomalous heat loss, this loss has been shown to derive in about the right magnitude from drift-wave microturbulence. Much of its scaling is understood. these challenges is great. No national disasters will ensue in In short, the theoretical framework of the 1960s, after20 the near term and few votes will be lost. But, can we be a years of disagreement due to experimental or theoretical in­ proud and successfulnation 20 yearsfrom now if we abandon adequacies, now explains in broad outline the experimental the struggle? I doubt it. This is not an era for standing still. results of the 19808. This understanding, which gives grounds I am not pessimistic . I have a great faith in the wisdom of for optimism, has a very important corollary . There are new America's people, and in the workings of the American sys­ avenues which theory begs us to explore-feedback control tem of government. In often mysterious and sometimes tor­ of magnetic islands has long been my favorite , shaping and tuous ways, the right decisions are eventually made, the path profile control are others . These new avenues will surely to greatness is followed. convert presently projected parameters , marginal for a reac­ What I have experienced and seen of history in my life­ tor, into satisfactory ones. time assures me that the exploration of our frontiers will I am well aware that scientific success is only a beginning continue . We now stand in fusion research on the threshold for reaching the Fusion Era. Many extremely difficult engi­ of scientific success. One final step is urgently needed: to neering problems must be solved before the test of the mar­ produce an ignited plasma, to actually see the effects of ketplacecan be applied. My crystal ball is necessarily cloudy, fu sion products, so long dreamed of and studied on paper, to but there is one safe prediction for the future: computer­ give the proof test to the existence of a burningfusion-r eactor controlled manufacture and quality control and robotic op­ fuel . Studies of the last year have convinced us we can pro­ eration will resolve many of what appear today as very high­ vide such a test at moderate cost. technology issues. I would happily exchange the proceeds of thismarvelous day for the assurance that I will be able to take part in this The budgetary outlook great human triumph . I want to see controlled fusion in my There is one problem about which it is difficult to be lifetime, and I am sure I will, just as I am confident that optimistic in the near term-the budgetary support outlook. taming our most abundant energy source will ultimately lead The nation faces very difficult choices. Many urgent short- us to new heights .

EIR August 29, 1986 Science & Technology 25 Interview: Dr. Dale Meade

Results that are exceeding the originalTFTR design

Dr. Dale Meade is in charge of experiments on the Tokamak now, we'd achieve the original objectives for the TFTR. Fusion Test Reactor (TFTR) at the Princeton Plasma Physics After 1976, we boostedthe objectives. By 1979, we were Laboratory. He put the latest achievements of the TFTR in saying the TFfRshould reach real break-even. In the coming perspective in this Aug. 15 telephone interview with David year, with deuterium plasmas, we expectto achieve the con­ Cherryof the Fusion Energy Foundation. fo r EIR. ditions for break-evenonce tritiumis introduced.

EIR: The TFTR has set two new records that bring us closer EIR: How will that be done? to fusion as a practical energy source. What are they? Meade: One-third to one half of the reactions are going to Meade: In mid-July we set a world record for the highest come from neutralbeam ions hitting tritons [tritiumnuclei] . temperature achieved in a laboratory. 18-20 kiloelectron volts To get break-even utilizing these beam-target reactions, you of ion temperature. * that is, roughly 200 million degrees need 15-20 kiloelectron volts and nT of 2-3 x 1013. That's Celsius. This is comfortably within the range in which a twice the nT we now have at this temperature. Without these working fusion reactor will function, but achieved at a lower neutral beams of deuterium, we'd need nT of 6 x 1013. In density than will be required. 1983, the Alcator C got nT of 6 x 1013, without beams. < • In March, the TFTR set a new record for the Lawson At present, the TFTR with tritium would produce a Q of product, nT , or quality of confinement. It is the product of 0.25. Within the next year, the four neutral beam heaters will density and confinement time. By enriching the fuel, with go from half to fullpower , and we'll get longer pulses, pulses fuel pellet injection, and doing this at high plasma density, of two seconds instead of typically one-half second. Q will we achieved an nT of 1.5 x 1014 nuclei-seconds per cubic go to 0.5 as a result. centimeter. Our pellet injectors were developed at the Oak To get Q = 1, we face the following problem. We use Ridge National Laboratory . The density itself was 3 x 1014 the injection of fuel pellets to get high nT. The pellets will nuclei per cubic centimeter, confinement time was .5 sec­ penetrate a dense plasma, but not above a certain tempera­ onds, and temperature was 1.2 kiloelectron volts. If our high ture. We use neutral beams, beams of deuterium atoms, temperature and nT achievements can be combined, we will trained into the plasma to heat it, but neutral beams will not easily have break-even, where the power produced equals penetrate a sufficientlydense plasma. thepower required to heat the plasma. Putting it another way, the ratio Q of power produced to power required equals 1 (Q EIR: So, it is the hornsof a dilemma. or quality factor = 1). That is beyond the original TFfR Meade: Yet, we must approach the objective from both design. directions. For the high temperature regime, we will perhaps improve the density with the injection of smaller fuel pellets. EIR: This is being done with deuterium alone? Working from the high density regime where we have a high Meade: Yes. These are 0-0 reactions. The combination of nT, the ion cyclotron range of frequencies [lCRF, one form deuterium and tritium (0-T) is two hundred times more re­ of radio frequencyheating-ed .] becomes useful for increas­ active. When we started our tokamak work in 1974, we had ing the temperature. We will be depositing 5 megawatts of rather modest objectives. For example in 1976, people said ICRF right in the center of the plasma column. Neutral beams we should produce 1-10 megajoules of fusion energy per do not reach the center of the plasma. pulse with temperatures of 5-10 kiloelectron volts and nT of Coming back to the latest results on the TFfR. The com­ 1013. Part of the significanceof these latest results with deu­ mon thread in these two regimes-the very dense and the not terium plasmas is this: We believe that if we put tritium in so dense-is that they both have sharply peaked density profilesalong the diameter ofthe plasma column. We weren't able to get high temperatures until we learnedto get peaked * The electron volt is the standard for measuring the temper­ profiles using only neutral beam heating. Now, we get them ature of both electronsand ions; one kiloelectron volt is 1 ,000 with neutral beams or pellet injection right to the center. electron volts. The new high-temperatureresults over the pasttwo months

26 Science & Technology EIR August 29, 1986 FIGURE 1 Progress In tokamak confinement

The new, mid-Julyhigh- temperature achievement is shown with a star. The latestachievements of Princeton's TFI'R as oftwo months ago were represented by the two op en dots. On the x-axis is the combined density andcon finementtime, the product nT , where n is the nuclei per cubic centimeter andT is confinementtime in seconds. For fusionbreakeven, nT must be 3 x 1013 or better, as shown. Ion temperature is plotted on the y-axis in electron volts: breakeven requires B,OOO electron volts or better. Breakeven will occur in the upperright-hand region marked Lawson (fulfillmentof the Lawson criteria). Arrowsfrom the open circles point to convergence on this region. Self-sustainingfusion will oc­ cur in the region marked burn.

1 0' 1 010 1 011 1 012 1 013 1 010 1 015

Density x confinement time, nT

have been achieved by first firing many shots at low density er hybrid means intermediate in frequency between electron to clean impurities from the machine and condition the inte­ cyclotron and ion cyclotron frequencies. In the heating of rior of the chamber. Then, we would get one good shot. ions, we have traditionally used ion cyclotron waves. Now , Again, many shots at low density, then three good shots. we are heating with Bernstein waves-the 5th, 6th or 7th Then, afterthe same routine, 10 good shots. harmonicsof ion cyclotronwav es, and looking at other forms Concerningour Marchresults in the high-density regime, of radio frequency current drive. density and temperature are now so good that hydrogenic The PLT will shut down at the end of September, 1986. bremsstrahlung accounts for 20% of energy loss at the cen­ Ifwe had the money, it would not ! ter-it used to be negligible.

EIR: By that you mean that results are so good that the FIGURE 2 amount of energy being lost by radiation has now assumed Peaked plasma density significance, where previously it was a negligible proportion of the general energy losses? Meade: Precisely. +- cross section of plasma column EIR: What is being accomplished with Princeton's other tokamaks? Meade: The TFfR is on the main line of tokamak develop­ ment. The Princeton Large Torus (PLT) and Princeton Beta Experiment(PBX) , like the Doublet III in San Diego, are on the advanced tokamak line. The PBX is investigating ways of shaping the cross-section of the plasma column to achieve P [confinement quality] of 10%. The PBX has already achieved 5%. It is now being modified-it will be PBX-M­ in order to achieve a theoretical P of 20%, but practically, 11 the objective is 10%. PBX-M will start operation in April 1987. The highest temperatures are now being achieved in plasmas in which the center of the plasma column is very dense, with The PLT is working on techniques for radio frequency sharply decreasing density toward the circumference. (The heating to achieve steady-state operation, instead of pulses. curve shown is illustrative, not a laboratory result.) It is achieving 5 kiloelectron volts of electron temperature now, using lower hybrid-current-drive of 2.5 gigaherz. Low-

EIR August 29 , 1986 Science & Technology 27 TIillFeature

Democratic trade unions rally behind Peru'8 Alan Garcia

by Val erie Rush

The International Monetary Fund's Aug. 15 decision to declarePeru ineligible for new credit may prove to be the biggest mistake the Fund ever made . Instead of terrifying the Alan Garcia government and its potential allies into submission, the IMF has triggered a "financialMalvinas . " GreatBritain 's 1982 war with Argentina over the Malvinas Islands created a continent-wide nationalist backlash and a drive towardIbero- American unity, which now threatens to emerge with renewed vigor. Since the Malvinas War, the IMF's austerity conditionalities have driven one country after another to accept mass unemployment, starvation, and disease, in hopes of getting a few crumbsof credit from theinternational banks . Now, support for Peru 's courageous stand against usury has begun to snowball across the conti­ nent, and the IMF may soon find that its "tough stand" against Peru could bring down the financial house of cards it has committed genocide to maintain. Garcia delivered his rebuttal to the IMF at a meeting in Lima Aug. 15, with a group of democratic trade-union leaders who had come from across the continent to express their solidarity with his battle, and to pledge their efforts to mobilize labor continentally in Peru's defense (see below for the relevant speeches and documents). The meeting was convened by Peruvian Sen. Luis Negreiros, the veteran leader of the labor sector of Garcia's APRA party and until recently the president of the Senate. It was organized with theassistance of the Ibero-American Trade Union Commission of the Schiller Institute, and the Commission's four coordinators attended the meeting. Former Colombian Labor Minister Jorge Carrillo Rojas was chosen by the group as its spokesman . A veteran labor leader, he is known for his endorsement of the "American System" economics of Abraham Lincoln's advisers, policies based on a "harmony of interest" between labor and industrial capital, in the interests of the development of the nation. After meeting with Garcia, Carrillo returnedto his countryto preside over the creation of a new unifiedlabor federa­ tion, representing over 80% of the country's trade union organizations. In his Aug. 16 address to the new movement (see Documentation) , Carrillo emphasized that

28 Feature EIR August 29, 1986 President Garcia tells [hero­ American trade-union leaders: "There is nothing to fe ar. " Garcia (center) is shown here at the Lima meeting on Aug. 15 with Luis Negreiros (Peru). Antonio Carlos Batista (Brazil). Eduardo Rios (Panama). and Rodolfo Seguel (Chile) .

it was incumbent upon the trade unions to intervene in eco­ cerned about the possibility of a Mexico-Argentina-Brazil nomic policy-making, since the lives of working people are debtors' axis, limited its strategy on Peru to effortsat "con­ at stake. With burning issues like the foreign debt and Latin taining" the "10% solution" while attempting to pick off what American integration waiting to be resolved, why shouldn't it perceived as its more dangerous adversaries. the union movement "become its own great political force in In the course ofthe year, Argentina and Brazil were lured, the country?" bribed, and cudgeled into what has since emerged as the President Garcia, in responding to the IMF financial war­ IMF's dream come true: a "common market" integrating fare decision, emphasized that the workers' movement of the Brazil's cheap labor pool with the remnants of Argentina's continent would have to be the vanguard of the fight for production infrastructure, to facilitate the export of every­ economic sovereignty and social justice. "I know that in thing not nailed down. The Fund offered the desperate Mex­ every country it is the workers who have assumed leadership ican governmenta handfulof minor concessions in exchange on this point, because they know that nothing would endure for a new letter of intent and another roll-over scheme, and without economic sovereignty; because they know that de­ thus succeeded-at least temporarily-in cooling out that mocracy will be a mere anecdote without Latin American situation as well. integration; because they know that no country on its own That left Peru, and a President intransigent on the ques­ can negotiate, renegotiate, or escape the problem of the for­ tion of putting the needs of his people over bankers' interest eign debt unless all Latin American countries assume a com­ payments. The IMF decided it was time to "make an exam­ mon position." ple" of Peru , and so declared the credit suspension. However, the Fund badly miscalculated. As Garcia noted, "the theo­ A year of preparation ries, the threats, the declarations are all paper tigers. " They The Peruvians have been expecting, and preparing for, think they can isolate us, but "the voices begin to be heard in the IMF sanction for a long time, since President Garcia came many countries ....To open the doors of history frequently to power on July 28, 1985 and announced that he would limit requires sacrificing a reverential fear of many institutions." foreign debt payments to 10% of the nation's foreign ex­ Indeed, among the firstvoices to be heard on the continent change earnings. Last September, Garcia met with the Trade were those of Argentines, who were taught a lesson in soli­ Union Commission of the Schiller Institute, including many darity during the Malvinas War with Britain. In a rarealliance of the same labor leaders he received on Aug. 15, and told of Peronist and ruling Radical Party forces, the entirety of them that he anticipated all-out war by the internationalcred­ the Argentine Congress officially declared its support for itor banks against his country to be launched in October. At Garcia, and attacked the IMF. "In the midst of difficulties the time, however, the International Monetary Fund, con- stemming from crisis, the foreign debt, terrorism, and the

EIR August 29, 1986 Feature 29 drug trade,the unjust behavior of the IMPcan now be added," will have to come to some sortof personaldeal with Peru. Of said the Aug. 21 congressional declaration. course, we have to consider if thisis an unwise precedentfor Peronist deputy Antonio Cafiero also introduced a reso­ other debtors to deal outside the IMF,but Brazil has already lution to Congress, signed by numerous other Peronists, which set a far larger prececedent. " urged President Alfonsin to seek ways of "supporting the brother country in this difficult moment" and which noted Labor mobilizes for integration that Garcia's "10% solution" was ''the only choice, if one Colombia, under the 1978-82 governmentof TurbayAy­ tries to safeguardpresent standards of living." ala, earned the unenviable title of "Cain of the Americas," Argentine labor, represented by trade union leader Saul by joining withBritain and the United States against Argen­ Ubaldini, expressed its solidarity with Peru as well, deliver­ tina during the Malvinas War. Although the Barco govem- · ing a message of "support for the Peruvian people" to that ment today has not yet taken a public stand in solidarity with country's ambassador to Argentina. On the other end of the Peru, the Colombian labor movement is attempting to bring spectrum, even Argentine central banker Alfredo Concep­ that about as quickly as possible. ci6n confessed that"all of us are or will be ineligible [for new When former Labor Minister Carrillo returned Aug. 16 loans] like our brothers in Peru" because debtor nations are fromhis Lima meeting withGarcia , he told the pressawaiting forced "to make commitments that are impossible to fulfill. " him at the Bogota airport that he carried a message from the In Mexico, which Garcia is rumored to be visiting im­ Peruvian President. That same day, speaking to representa­ minently, a faction of the ruling PRI party is attempting to tives of 400 Colombian trade unions, Carrillo declared, revive the Peruvian-style debt initiative first formulated by "Yesterday, the usurious international banks representedby PRI president Lugo Verduzco before the de la Madrid gov­ the IMF declared the brother republic of Peru ineligible for ernment signed with the IMF. In a speech to a Mexico City futUre loans ....I, returned only yesterday from Lima, am forum on thefore ign debt Aug. 19, formerU.N. Ambassador witnessto the fact that the Peruvianpeople have receivedthe Munoz Ledo urged that a ceiling be imposed on Mexican bankers' decision with delight, because it will allow themto debt service payments, based on a rational percentage of continue a policyin defense of national sovereignty, the fight export income. He noted that such a decision would signify against imperialism and for improvement of the living stan­ no more thanwhat the government hadalready agreed upon, dardsof the Peruvian people." together with the restof the continent, in last year's Cartagena Carrillo urged the Colombian labor movement to take up Consensus. the banner of Peru's struggle, and make it their own as well. Brazil has issued no formal statement regardingPeru , but At the conclusion of Carrillo's statement, the trade union Rio de Janeiro publisher Helio Fernandes has urged that leaders present unanimously formulated an organizing doc­ Brazil leap to Peru's defense: "The victim is now Peru, a ument, which states in part: country which the IMF considers to be weaker. . . . But, if "We salute the brave measUres of those nations which not we lost the chance to fight in the same trench with Mexico, only question dependency on international finance capital, we must not lose the new opportunityoffered by Peru. Through but have taken concrete measures to limit debt payments to a the integration between Argentina, Uruguay and Brazil, we fixedpercentage of exports , that will not harm our develop­ have to aid that country, with the certainty that we will be ment. marching towards the liberation of all. " "Thus, we support the brother nation of Peru and its The Latin American Parliament, through its president Presidentin the face of blackmail by the International Mon­ Luis Leon, has also declared its support for Peru . In a tele­ etary Fund, which yesterday declared [Peru] a country ineli­ gram sent to PresidentGarcia , Leon declaredthat "I send you gible to receivecredits from the international banks. in the name of the Latin American Parliament our solidarity "We know that Peru will not alter its sovereign decisions and decision to accompany our brothers in Peru in the efforts because of this assault of the IMF, and we commit ourselves and sacrifices imposed by their fight for dignity and sover­ to mobilize in defense of the people so that Colombia adopts eignty." The Andean Reserve Fund has alreadypledged $100 similar measures for its national sovereignty. million in aid to Peru for next year, and theministerial-level "In fightingfor trade union unity centered arounda single meeting of the Latin American Economic System (SELA), organization, we seek thereby to recapture the role of the to be hosted in Peru in September, is expected to produce workingclass as a determining factor in an economic dynam­ some show of support for Peru's fight with the IMF. ic and social movement subject to independent and sovereign That the IMF may have overplayed its hand in its treat­ development, in substitution for the oligarchic structure of ment of Peru can perhaps best be seen in the reactions of power." Britain's leading private bankers. As one senior London In September, 80% ofColombia 's organized labormove­ banking officialtold EIR. "In a perverse sort of way, the IMF ment will participate in the founding congress of the new move opens the way for the private banks to starttalking with Central Unitaria de Trabajadores (CUT). It is expected to set Peru in a meaningful way. My own feeling is that the banks a historic precedent for the continent.

30 FeatUre EIR August 29, 1986 deal with the situation, but unfortunately, those have not The Lima Declaration given the expected results. We see in the Peruvian decision a genuine anti-imperialist outlook which rejects the colonial­ ism of the international banks and defends national sover­ eignty. The Peruvian position on the foreign debt is serious and responsible, since it recognizes the debt, but it also recog­ nizes the physical and moral impossibility of paying it under Unionists pledge current conditions. The road chosen is a democratic road because it defends social justice and the right of the peoples supportfo r Garcia to development. In reality, the excessive growth of the debt is illegitimate. This is the document signed in Lima on Aug. 15, by the trade­ If the impact of high interest rates, the deterioration of terms union Leaders who participated in the preparatory meeting of trade, and capital flight, especially since 1979, is subtract­ fo r the Latin American Workers' Coriference, and met with ed, the region's foreign debt would hardly reach $60 billion, Peruvian President ALan Garcia . which would be readily manageable. Between 1981 and 1983, fifteen countries of the region The foreign debt of our Greater Fatherland, from Mexico to were forced by their creditors to impose drastic adjustment Argentina, currently is about $400 million. On the average, programs whose prescription is the same in every case: Elim­ half of our nations' income from exports is devoted to serv­ inate subsidies, massively devalue the currency, indiscrimi­ icing that debt, and, what's worse, that proportion is tending nately open up the economy, increase taxes, etc. It is not true to increase. With the imposition by the IMF of "adjustment that each country has its crisis; in truth, the cause of Latin programs" on our economies, especially since 1981, the cri­ America's crisis is one and the same; and thus Latin America sis, rather than abating, has gotten more critical. We have should act in concert to solve it. What is at stake is the very reached the point where debt service is growing at a faster existence of nations and democracy. With the reduction of rate than the production of tangible goods, and, in tum, the the populations' living standards, the family, the basic cell cuts in investments and consumption made in order to guar­ antee debt payments, reduce physical production capacities more and more with every passing day. The result of this process has been famines, epidemics, galloping unemploy­ ment, and the growth of subemployment and "informal" ac­ tivities like narcotics trafficking. The adjustment programs have caused the countries im­ plementing them the loss of several million jobs. Continuous devaluations have debased our currencies. Every day what we sell is valued less and what we buy costs more. Real wages have decreased and in several countries the social benefits of the workers have begun to be cut back. In other words , the labor movement faces the challenge of uniting to defeat those policies or remaining dispersed, slowly weak­ ening itself until it disappears as a signficant force. The President of the Republic of Peru, Dr. Alan Garda, has had the moral integrity to decisively and responsibly confront the usurious international financial institutions which caused this crisis. But this struggle cannot be conducted exclusively by the governments;at its head must be the trade­ union movement, which historically has been a factor in the great economic and social changes benefitingthe population in general. Therefore, we, democratic labor leaders of Latin Amer­ ica, demand that our countries and all the workers of the region take a united position toward the grave problem of the foreign debt and the International Monetary Fund. Children in a Colombian slum. lMF austeritypolicies are We recognize that some countries have taken steps to destroying the fa mily in lbero-America .

EIR August 29, 1986 Feature 31 of society, is disappearing. IMF policies are a blatant rejec­ social costs, sacrificingthe right to development, which then tion of Christianity's basic principles of defense of human eludes them, while other peoples enjoy opUlence. Dialogue dignity. among peoples is indispensable to reach equitable agree­ If those of working age in Latin America are to be given ments , in which not everything would be left subject to an decent occupations, 100 million new jobs will have to be economic policy unbreakably dependent on economic laws created by the year 2000. By the end of the century, adequate without soul and moral criteria. Herein lies the urgent need food for 600million people inhabiting the Greater Fatherland for international solidarity, which today is especially re­ must be provided . This giant task demands the continent's quired for the problemof the foreign debt, which overwhelms physical integration by means of infrastructure works such Latin America and other countries of the world ." as railroads, roads, canals, ports, etc . These great projects We workers are the backbone of integration. The labor will not be carried out if we do not have the will for victory. movement must take on the role of leadership which it has not fully taken so far. We cannot continue merely being simple spectators; our responsibility has to do with making decisions on the economic policies which should be imple­ "What is at stake is the very mented. Likewise, we reaffirm our faith in democracy, which is existence qfnations and nothing otherthan the genuine participation of the people in democracy. With the reduction oj all decisions which affect the lives of our nations. Thus , we the populations' living standards, condemn the dictatorships existing on the continent and ex­ press our solidarity with the brotherpeoples who struggle to theJa mily, the basic cell qfsociety, recoverfr eedom, justice, and democracy. is disappearing. IMF policies are a Finally, unity in action of all workers of the continent with respect to the debt is required to achieve integration. blatant rejection qfChr istianitys From Lima, we urge all our fellow workers to act decisively basic principles qfdlif ense qf against aggression from the creditors. human dignity. " We make a fervent call to' all national labor confedera­ tions, to the trade-union organizations existing in the conti­ nent, that, united in their sole purpose, which is the defense of Latin America's working class, on Oct. 18 and 19 of this year, we hold a great encounter of the workers of the conti­ Under today's circumstances, the only ones integrated nent in the city of Lima, with the rej ection of the IMF's evil are the narco·-terrorists, and the continent faces a wave of policies as its fundamental goal. aggression of all sorts , whose goal is to break the resistance of the peoples so that they accept another round of austerity. Lima, Peru, Aug. 15, 1986 The demands are the same: Sell state enterprises; abandon great projects which have been undertaken;open up the econ­ omies-without any regulation-to foreigninvestment; pay Antonio Carlos Batista da Costa" president of the Fed­ the debt withthe equity of companies, etc . eration of Workers in Mechanical and Electrical Material Every nation which resists the designs of those would-be Industries of the State of Rio de Janeiro, Brazil masters of the world is destabilized. Panama is threatened Gumersindo Bueno Calder6n, treasurerof the Confed­ with not having the canal returned to it; Mexico is threatened eration of Railroad Workers of Bolivia on its border; and it is predicted that Peru will be totally Jorge CarriUo Rojas, former minister of labor and social isolated for having defended its sovereignty from its credi­ security of Colombia tors . Manuel CaruIias, presidentof theCenter for Trade Union The oligarchycan no longer continue controllingmillions and Social Studies, Argentina of working men who have been losing everything, including Dep. Luis Negreiros Criado, Union of Workers of the their own jobs. Our dilemma is not "export or die," as some Peruvian National Port Company tell us, since by exporting we areall dying. The truechallenge Eduardo Rios Molinar, secretary of the Single Union is to achieve integration, because, if not, the bankers will of Construction Workers; National Council of Organized crush us. It is absurd that less than 20% of our total exports Workers ,Panama go to each other. Only by means of integration could we Pedro Rubio, general secretary of the Union of Workers achieve industrializationand the accomplishment of the great of Bogota and Cundinamarca projects. Rodolfo Seguel, president of the Confederation of Cop­ As his Holiness John Paul II emphasized on his recent per Workers and president of the National Workers' Com­ visit to Colombia, "Poor populations cannot pay intolerable mand, Chile

32 Feature EIR August 29, 1986 world, the principles of Christianity. I find no difference between the voice of the Presidentof Peru, Mr. Alan Garcia, and that of His Holiness Pope John Paul II, when the latter said, during his recent trip to Colombia, that Man comes first, first comes the dignity of the human individual, first comes the development of peoples, then the payment of a debt which has grown by the unilateral decision of our cred­ 'A symbol fo r all itors . Thus our meeting in Lima was meant to reaffirmour will of Latin America' to fightand continue fightingfor those ideals, but also to call for a giant conference of workers of Latin America in the Jorge Carrillo Rojas, who has just leftoffi ce as the firsttrade unionist to serve as minister of labor in Colombia, made these remarks at the Aug. 15 meeting of trade unionists with Peruvian President Alan Garcia. lfind no dtfference between the voice ojthe President ojPe ru, Mr. Congressman Luis Negreiros, friends: Alan Garcia, and that ojHis You have wished that I be the one who gives the Presi­ dent, Dr. Alan Garcia, the warm and fraternal greetings of Holiness Pope John Paul II, when the trade unionists we proudly represent. It is for us a high the latter said, during his recent honor tobe here with you today, because your figurenot only trip to Colombia, thatfirstcomes represents the wish for redemption and change of the Peru­ vian people, but the wish for change and improvementof the the dignity ojthe human entire Latin American population. individual,firstco mes the Mr. President, we have gathered in the city of Lima at development ojpeo ples, then the the compelling and generous invitation of our friend and fellow Luis Negreiros, whom we view not only as a fighter payment oj a debt. in his own right, but as an heir of a line of trade unionism, since his father, Mr. Negreiros, was not only a bold labor leader but a martyr of democracy. Thus I have answered that call, together with my fellow month of October herein the capital of Peru , where all exist­ trade unionists, and have come to this city to pledge the ing labor unions and confederations without distinction may solidarity of Colombian workers with the Peruvian govern­ participatein giving supportto this position. We believe, Mr. ment's position on the most serious problem of the foreign President, that this encounter will be successfuland transcen­ debt, which comes close to $400 billion, and for the sake of dental for all our countries. We would wish to count-as we whose payment our countries are being subjected to adjust­ surely will-on the acceptance and approval of the Peruvian ment programs which plunge our peoples into misery and government in this call. despair. As you, Mr. President, haveaptly put it, most of our countries devote to the payment of debt servicean average of The necessity of integration 50% of their exports . Thus the development of our peoples Finally, Mr. President,I wish to reiteratethis line of Latin is being sacrificed in order to satisfy the internationalbanks. American integration. If the adjustment programs imposed Those countries subjected to adjustment programs have lost by international financial circles continue to be applied, the close to 10 million jobs because of those programs. Our efforts of our peoples to topple dictatorships and impose currencies continue to drop every day, and everything we governments which express the will of the people shall not importbecomes more expensive and what we export is ever last long. Thus such an extraordinary effort which has been cheaper. It is a policythat loots our resources and our efforts. made in many countries is at stake. Little would it help, for You, Mr. President, have had the courage andmoral instance, if the Chilean people, which is fighting bravely to integrity to tell the world that Peru shall pay its foreign debt, rescuefree dom, justice, and democracy, had a victory in the but only according to its possibilities; that it will only de­ shortterm , if on theother hand, these economic policies kept vote-as indeed it has- l0% of its exportearnings to pay­ beingimplement ed. ment of that debt; that the Peruvianpeople comes before the You, then, Mr. President,in our judgment as trade union­ payment of debt; that life comes before debt. This is a nation­ ists and sincere workers not in the habit of flattering Heads alist and anti-imperialist position, one of social justice that of State, are asymbol for the entire population of the conti­ fitsin with theprinciples which have given life to the Western nent.

EIR August 29, 1986 Feature 33 excessive prices; of countries indebted by these means, each one now negotiating in isolation, in a weak position in regard to the great power of the world creditors. Our history is the history of a continent which has not Garcia addresses achieved its consciousness, which has not attained the his­ toric unity of a consciousness for action. So, the issue of the Ibero-American foreign debt was not chosen at random for political action; the foreign debt summarizes the history of Latin America, is trade union leaders the current summary expression of the low prices of Latin America, of the high-cost urbanindustrialization which Latin Peruvian President Alan Garcia delivered the fo llowing ad­ America has undergone in the past 30 years. The foreign debt dress to the meeting of Ibero-American trade unionists in also reflects the high interest rates imposed on us in order to Lima, Peru on Aug. 15, the day that the International Mon­ maintain an unjust distribution of world finances. etaryFund (IMF) declared Peru ineligiblefo r furthercredit: Garcia's '10% solution' Fellow Latin American citizens and tradeunionists: It is for this reason that the country which I rule has Peru's house of government is ennobled by receiving the decided to take a positionwhich does not fall into the extreme representatives of the workers of the continent. And its Pres­ of stopping payment, but takes a realistic and revolutionary ident thanks you in the name of the Peruvian people forthis position, which warns that a country cannot sacrifice its peo­ unforgettable gesture of Latin American solidarity with a ple, nor its destiny, to benefitthe appetite of the international country which can only express the voice of Latin America, banks, whose interest rates are leonine and usurious. And and be a part of the job of opening the path of the future, that a country cannot solve these problems by resorting to which is the independence and the economic sovereignty of new loans topay old debts; much less can a country renounce our continent. its economic sovereignty, allowing itself to be governed not Brother Carrillo, minister and trade-unionist, Panama­ by an elected government, but by letters of intent from an nian and Argentine brothers , and brother Rodolfo Seguel, economic philosophy and theory already rejected by thepeo­ from Chile, your presence has profoundmeaning to me . The ple. presence of all of you is the voice of solidarity and popular Thus the country announced one year ago, and at great understanding of the path that our countries must follow. pains and amidst much incomprehension has continued to For several days now, in anticipation of what would hap­ uphold, its decision to limit payment of the foreign debt to pen to Peru in its relationship with the IMF, which is the 10% of the value of its exports, because in this way we relate great guardian and keeper of the imperialist economy and what is paid us for our labor, what is considered our money, international capitalism, many press and news services have withthe payment they demand from us abroad. insinuated that Peru is isolating itself and that this is its Thus, fundamentally, we demand that our labor be better greatest mistake . And I answer, before you and with you, valued. Why should we accept the low prices they pay for that we are going to isolate ourselves fromdomination, that our raw materials? Why should we remain silent, while they we are going to isolate ourselves from imperialism and from pay us less and demand more interest payments from us? exploitation, that we are going to isolate ourselves from a Why should we underestimate fhe right to life of our workers? system of injustice and unjust distribution of the world's Why should we conclude that their sweat has no historic wealth. But we will always be on the side ofthe Latin Amer­ meaning? ican people, and we will always be on the side of the Latin We defend the fundamental right of Latin America to American workers , who are the ones who must open the make its own history. Without anyone calling upon us to do broad pathways to the future. so, but rather due to the obligationof being Latin Americans, You know that Peru's position is rooted in ideological we have raised our voice to say that neither the banks , nor principles: There can be no democracy without economic the IMF, nor thepolitical design of some other countries shall independence, if there is no national sovereignty. There can determine the destiny of our continent. be no popular sovereignty without economic sovereignty. Someone must begin, then, and I know that voices begin But therecannot be democracy in any single country, without to be heard in many countries.. Political will and initiatives an anti-imperialist concept that links and unites all the other begin to come together, and, something fundamental and countries of Latin America in a single position and on a single refreshing: I know that in every country, it is the workers path. The history of Latin America is the history of the con­ who have assumed leadership on this point, because they stant depredation of 20, 21 or 22 countries which exportraw know that nothingwill endure without economic sovereignty; materials, for which we are paid low prices; of countries because they know that any democracy will be a mere anec­ which buy machines and technologies for which we pay dote without Latin American integration; because they know

34 Feature EIR August 29, 1986 that no country on its own can negotiate, renegotiate, or America to have conditions of equality. There will not be a escape the serious problem of the foreign debt unless all Latin just international economic order without a monetary order American countries define a common position. to sustain it .... I want to tell you, who come from across Latin America, Peru has chosen the Latin American path, the path of that the fact that we have not yet achieved a joint and unified economic sovereignty. Because throughout these all these position for all of Latin America does not make us impatient years of permanent pressure to pay off old debts, we have nor intimidate us. Better times shall arrive; history makes its handed ourselves over many times to the will of the IMF, way through the greatest incomprehension. To open the doors which is the champion of an economic theory already rejected of history, frequently requires sacrificing a reverential fear as unacceptable and inapplicable to the poor countries of of many institutions. Latin America and the world. Throughout these years, we have accepted the imposition of a liberal theoryof economic policy that has reduced the expendituresof the State, that has reduced the wages of the workers, that has limited the social We dfjend our right to make our participation of the poorest, that has reduced the productive own history. Without anyone capacity of countries. This liberal and monetarist theory is what has ultimately calling up on us to do so, but rather aggravated the situation of our countries over the last 10 due to the obligation qfbein g Latin years. And so the problem is not solely a matter of credit or Americans, we have raised our of money needed to pay previous debts; it is essentially a problem of economic conception. We cannot accept, for the voice to say that neither the banks, sake of eligibility or of playing by the rules of the Fund, nor the IMF, nor the political design . letters of intent which tell us we must devalue the currency qfso me other countries shall as they wish, and destroy and devalue the laborand effort of our fellow citizens. . . . determine the destiny qfour continent. The survival of the nation We cannot tolerate that the nationaleconomy bestrangled to satisfy foreign demands, which might have a legal title, but lack a moral foundation in historical terms . And because The IMF's move against Peru we have chosen a different economy, an economy of social I know that your presence in Peru is no coincidence, and sense, a nationalist economy, it has been this year, in spite stems from a generous decision to be here, when for the first of terrorism-a grave adversity we suffer-and in spite of time a country of Latin America is on the verge of a situation the incomprehension of some political layers, we have suc­ from which their appears to be no return. Today is the 15th, ceeded in significantlyreducing inflation, increasing our pop­ and the directors of an institution well known throughout ulation's consumption capacity, thereby reactiving the in­ Latin America would decide Peru's internal situation . The dustrial and agricultural economy. . . . International Monetary Fund, as an institution created 40 I thank you all very much for being with us today, on this years ago, had some purpose in the reconstruction of the Aug. 15. We have presented the IMF with our proposal, with world economy after the bloody war. But in those years , it our legitimate claim; as a country we are unable to pay what established that a world currency would be used which was they demand, either to the private banks, to the IMF, or to not the currencyof a country,but a currency linkedto a world the governments of the world. We will pay, but according to metal, gold. When that currency was released from its gold our conditions, as the country grows and develops and we denomination 30 years later, the IMF lost all purpose, be­ solve the problems of inequality and miserythat exist. cause using a world currency from that point on obliged one But it must be understood that a country cannot sacrifice to use the currency of a single country, and therefore tied the its people to benefit interest rates set in New York or in economies of the poor countries of the Earth to the fate of London. It must be understood that our workers, our dark­ that single country. skinned Latin American people, are worth more to us than This is the central point: If we want a more just economic the interest rates of a few investors who have plenty of right, order in the world, we need a more just monetary order in the but to whom this decision will not mean tuberculosis, or world. We need world liquidity to be an expression of our crime, or subversiori, or hunger. Thus we've told the IMF­ people, too, and not doom us to obsequiously use a single which is also a lender bank-we will send what we can. If liquidity which is the property of a single issuing country. they accept, well and good; if theydon 't, a pity. But we will And this does not mean enmity toward a country, but rather adhere to this position .... the demand for other countries of the Earth and of Latin And we have demanded, I repeat before you here, that

EIR August 29, 1986 Feature 35 just as a single currency is used and a single precious metal, gold, so has another precious metal, silver, been stripped of its right to be considered a reserve currency for our coun­ tries.... So, despite having our Andes in Mexico and in Peru, with a womb full of silver, we are not rich. We are poorby a decision of the IMP, because silver is not a precious metal . And if we had gold, I am certain that another type of metal would be sought, so that the minerals of the poor countries of the earth could be declared not precious metals. Colombia needs a Therefore , we can say to the Fund, you want us to pay you? We will pay in our precious metal , which is silver .... new labor federation All of these demands boil down to a nationalist, decisive attitude . If the price of that nationalist attitude is, as they say, isolation, I know that it is an isolation with respect to the On Aug . 16, fo rmer Colombian labor ministerJorge Carrillo world centers of power . . . but I also know that there is not addressed representatives of 400 Colombian unions at a Bo­ isolation but close identification with the countries of Latin gota meeting to organize a new unified labor fe deration . America, and if some don't understand or watch passively Excerpts fo llow: what is happening in Peru now, well they should know that tomorrow it will be the peoples who will unite, not with Peru , . . . Yesterday, the usurious internationalbanks represented but with the historic will of the entire continent, to make true by theInternational Monetary Fund declaredthe sister repub­ what our heroes and founding fathers , from the Rio Grande lic of Peru ineligible for future loans. In other words , they to the tip of Chile, left us as a mandate: independence made said that Peru would remain isolated from the international through unity; independence made through integration. financial sector. Having just returned from Lima yesterday, I am witness 'There is nothing to fear' to the fact that the Peruvian people received the bankers' I greet you and thank you for this gesture of solidarity, decision with delight, because it allows them to continue a which is the principle of democracy. Solidarity is the proof policy of defense of their national sovereignty, of frontal of democracy, because while speeches and successes can be battle against imperialism and for improvement of the living applauded over and over again, what is important to me is to standards of the Peruvian people. see in my Peruvianpeople and in the continent not applause, The President of the Republic had declared: "It's finethat but solidarity in difficult moments . That's when one knows no more loans are coming, if the loans are conditioned such one's friends; that's when one finds if the votes were truly that they go to paying the bankers their debts , if the loans cast, not merely as another option , without putting one's condition the national sovereignty such that it be the bankers responsibility and life on the line. who decide what kinds of wage increases the workers should And now , today , Aug. 15, as Peru surely suffers already get, such that it be the bankers who decide what rate of the consequences of its decision, it is veryimportant that you devaluation the national currency should have, such that it be are here. And I tell you, and through you the Peruvian people, the bankers who say which areas of production should be that there is nothing to fear. The theories, the threats , the reactivated, and which not. declarations, are allpaper tigers . When a people understands "The decision of the bankers is welcome, because it al­ and knows its destiny, when a people has no fear, when a lows Peru to use its own resources, its own foreign ex­ peopleknows that so much wealth has lefthere and that more change-which is the soul and blood of nations-so that wealth can be generated by its efforts, by its solidarity, with­ there be health, education , and food for the Peruvian people out expecting everything in a single day, then the economy instead of handing dollars over to the international of Peru and of other countries will be saved. banks ...." There is nothing to fear, and if the Presidentof Peru, in As the Peruvian President said, we don't deny that we the name of the Peruvians, makes a decision and sticks to it have a debt, but we are going to pay solely in accord with our in spite of any declaration, you should know that nothing can possibilities. What is Colombia going to do in allocating be done historically to harm the country. Rather, we are more than 40% of its exports to payment of the debt? It is opening the doors to another situation and another possibili­ going to cut back expenditures to meet this obligation? Is the ty , to leave a better situation and a better society, without rate of cutbacks going to increase? . . . violence and with greater justice, for our children. It has been said that public investment will be spent on I thank you all for your presence and your words, and I the poorest, the neediest, and this is good, thatthere be state­ want you to know that this house and all of Peru are Latin financedhealth for indigents . . . . But it must be stated where American territory at your service. the money is going to come from for these expenditures. It's

36 Feature EIR August 29, 1986 fine for there to be education, for there to be public works. handed theinternational banks more than $100billion through But, where will the money come from? capital flight. Thus, on thebottom line, after these sums are Inour case, it has been said that themoney will come out subtracted, we would have a tiny , easily manageable debt. of workers' social benefits, from the "oligarchy in overalls" Thus His Holiness John Paul IT has raised his deepest which would now have to give up its "privileges," that trade protest, has most energetically condemned the situation, and unionism is the obstacle to the country's development, that has said that there is no solution other than the solidarity of unionism is the danger, that unionism is what is behind the all countries, to confront the catastrophe approaching us. seizure of power, thatunionism is strangling businesses with These adjustment policies, brothers, have caused infant mo­ collective bargaining agreements, severance pay, and other rality to increase. Colombia is at the top, as far as child benefits. mortality is concerned-because of malnutrition in the ma­ Whoever said this meant, in other words, that the work­ jority of cases. This has caused the reappearance of epidemics ers' movement should be wiped out. The workers' move­ of diseases which we all thought had disappeared. . . . ment, which alone could oppose thedesigns of foreign capital These challenges have been making people, working against our nations. And the best way for that annihilation to people, conscious thatthe only way to defeat the national and occur, is by reducing the workers' movement to anarchy, foreign oligarchy is by uniting the workers with bands of dividing it, creating quarrels among its leaders, diverting it steel aroundconcrete objectives. The division of the working from its objectives, getting it to fight for little things, while class is the only thing which has let theusurious banksrapidly what the internationalbanks have designed for Colombia and achieve their fatal design�. We have kept divided for more for the rest of the countries becomes a reality. . . . than 40 years, ostensibly because of ideological problems, although everybody without exception is united for the de­ The unemployment crisis fense of our country, for the defense of our people, for the Let nobody be fooled. In Colombia they now want to defense of democracy, for the defense of liberty. abolish the most sacred rights 'of the working class. The Therefore, I say that theconditions are present right now argument used is that of unemployment. We have a million for the workers to unite in a great, broad, democratic, plural­ and a half unemployed in Colombia, and this is a grave ist, and non-leftistworkers ' confederation, whose social goal problem which must be begun to be solved. But who created would be the struggle against the International Monetary this problem? Where did Colombia's unemployment prob­ Fund, the struggle to defend what workers have won, respect lem come from? We all know that it began with the imple­ for the working class and that obligation which all democratic mentation of anti-national economic policies. If the state, states have for the working class to play its due role in a which is the great employer, has to cut health investments, democratic society, that the working class intervene in eco­ there will be no opportunities for employment in the health nomic questions, in the decisions which affect it, in social area.... And if national industry is prostrate, as indeed it programs and-why not-for the united working class to is, working only to meet interest payments, there there will become its own great political forcein thecountry . be no employment possibilities in the productive sector. In this great crusade forunity , nobody is going to give up Where, then, does the unemployment problem come a comma, in so far as ideological principles are concerned. from? Whatcauses it? Workers' social benefits?The unions? It's not a question of ideological principles, but of unity of No ! Next year Colombia will have to pay in interest on the action on concrete themes. Because every time someone foreign debt alone, about $1.8 billion. Withthat sum, trans­ speaks of unity, those of us who bring up the subject are lated into pesos, we could solve the most pressing problems immediately labeled communists, leftists, enemies of the we have in the country, with just one yearof grace on pay­ nation, enemies of democracy. . . . ment of that sum. I know that the attacks are just beginning, especially And another thing about that debt, about Latin America's against me, and that theyare going to get worse in the future, $400 billion, Colombia's more than $12 billion: It is illegit­ that the professional slanderers are going to try to disorient imate; we have already paid it. Why is it illegitimate? Be­ the workers . This is not a question of one person, but a cause they unilaterally increased interest rates, and thus in­ steamroller movement which moves upward from the grass creased Latin America's debt by more than $60 billion. Be­ roots. This is an unbreakable decision 'Of the workers to cause the terms of trade have made Latin America lose, unite .... through the sale of its products at a much lower price and The challenge to which we Colombian workers are called through the devaluation of our currenciesby more than $100 has tremendous significance. The future of several genera­ billion. tions is at stake ....We have a historic commitment, all of And by the incentives to capital flight, which have made us, thousands and thousands of workers must do their part. more than $100billion leave Latin America. How paradoxi­ And I believe we will not fall short of this historic commit­ cal! Peru is closed off from credit, but Latin America has ment ....

EIR August 29, 1986 Feature 37 American scientists uphold LaRouche ideas at Erice

by Giuseppe Filipponi

At the "VI Seminary on Nuclear Warfare," which occurred Then Andrei Kokoshin, chief of the Soviet delegation in in Brice, Italy, Aug. 18-21, organized by Dr. Antonino Zich­ Brice, intervened. "In realitythe restrictions in the passage ichi, the Xmerican scientificdelegation , fromLivermore Na­ of technology between West and East and the contacts be­ tional Laboratory , officially proposed to the Soviets what tween scientists arebecoming moresevere and difficult. This U.S. presidential candidate for 1988 Lyndon LaRouche has is a sign that Washington does not want a technology ex­ proposed since 1982, that the Soviet scientists collaborate change in a delicate sector such as the military one, and with the Americans to develop the "SDI," the Strategic De­ besides, we have decided to not develop the space shield. fense Initiative . "We are workingto develop systems against enemy mis­ This proposal, which recently was taken up again by siles, but ours are simple, cheap systems," Kokoshin went President Ronald Reagan in his well-known letter to Gorba­ on. "We are working on anti-missile missiles, space mines, chov, was formulated explicitly in Brice by the head of the and Earth-based lasers directed against space stations whose U.S. delegation, Dr. Robert Budwine of Livermore. orbitscannot be easily changed, and therefore will be known. "We are de facto already cooperating in trading infor­ We will then use the sophisticated systems of electronic war­ mation on inertial and magnetic-confinementnuclear fusion. fareto disrupt and dislocatethe enemy's command and com­ Why can't we collaborate also on the SDI?" said Budwine. munications system. We will spend something, but in any "Gorbachov is trying hard to propagandize new initiatives, case less than for implementing the SDI, which would have but the only real novelty can come froman effective pursuit costs too high for our economy. We will not do more than I of an exchange of new aspects of military technology. Just have laid out. The theoreticalbasis for building an x-ray laser the merefact of working together in such a project will create we have, but we have not developed these lasers." and deepen the necessary political conditions for an East­ Arbatov continued ironically: "Areyou perhaps offering West dialogue. Both I and Professor Teller are available to to share with us the civilian aspects of the space shield?" shareand inform the Soviets on all of our researches. " Budwine: "Both civilian and military. Teller sent a message The Soviet response to such a proposal was immediately of confirmationto Zichichi on this." given by Alexei Arbatov, the 35-year-old exponent of the Arbatov: "But what good is it? Against whom should we Academy of Sciences in Moscow, and it was a decisive jointly develop the anti-missile shield?" Budwine: "Against "nyet." whoeverwants to make nuclearwar. " Arbatov: "I don't un­ "This proposal is pure propaganda," Arbatov said. "A derstand anything anymore." joint SDI cannot be done, and above all it cannot be done So, a tart Soviet "no" to the American proposal. with regard to x-ray lasers. We are against Star Wars, we are against carrying the arms race into space." A majorSoviet admission Budwine answered: "We built the x-ray laser on the basis Meanwhile, in Moscow, an adviser to former President of the Soviet scientific literature. I cannot imagine that you Arbatov and current Soviet strongman Mikhail Gorbachov aremore behind than we are . If you don't accept, it means admitted publicly, for the first time, what the Soviets have you already have the space shield." refused to ever admit about President Reagan's offers-that

38 International EIR August 29, 1986 what is at stake is joint development of weapons of the sm, ease in the Mediterranean countries; a study on the older i.e., "the LaRouche doctrine." On a Moscow radio program population in the same area; the application of seismological on Aug. 10, Aleksandr Bovin, top Soviet foreign-policy "in­ researches in high-risk countries; and the application of flui­ sider," stated that Reagan is proposing a five-year delay in dized-bed technologies for coal. deployment of the new defensive systems, "and thenwe will The Soviet Rodinov then spoke about space exploration, hold talks with you for two years. Talks about what? Talks and another Soviet, Vladislav, presented the state of fusion about how to gradually move into a new era, an era oriented research. He said that in the Soviet laboratories, the maxi­ toward defense systems . In other words, talks about how to mum temperature reached up to now has been 35 million deploy these systems in space. And if we fail to reach any degrees (perhaps a bit too low to be believed), and that only agreementduring these two years, then either of the two sides at the end of the century could they reach the conditions for will have the right to begin deploying these systems after fusion. giving the other side six-months' notice." Reversing the Soviets' claim, since 1983, that Reagan's The 'Big Bang'? new military doctrine was just a "cover for a first-strike pol­ During all the presentations and the debate, the Soviet icy," Bovin admitted that Reagan is demanding "thatwe sign scientists and various Western scientists influenced by the an agreement with him permitting u.S. deployment of these appeasement-oriented Pugwash group tried in every way to systems . . . he proposes that we change our position 180 present peaceful scientific cooperation between East and West degrees, and . . . recognize the necessity of these systems." as the antithesis of both the American sm project and, ex­ plicitly, the Moon-Mars colonization project. Biological challenge in Africa Such a conflict in fact does not exist. But the polemics Ironically, this year the Erice conference was pivoted on were nasty, above all in the final session where American the theme , "Cooperation and Its Prospects," and despite the Nobel Laureate Lee and Zichichi presented the 10th "World Soviet refusal to collaborate in the SDI, the scientists present Lab" project, that of building in Italy a mega-particle accel­ pledged to support the 10 great scientific research projects erator to be called Eloisatron . which are being studied within the so-called World Labora­ This would be a circular accelerator 250 kilometers in tory, an idea developed in Erice last year and whose founding circumference. To build it, the governments of all the world document was signed a few months back in Lausanne. Ten would have to contribute $10 billion. The idea, as put forward thousand scientists from all over the world are already in­ by Zichichi, would be to "build a machine in which one could volved. search for the conditions in which the universe found itself From the discussion around these 10 scientific projects, 15 billion years ago, a fraction of a second before the Big it became clear that the world scientific community today is Bang." tremendously challenged by the implementation of thesm , Although a financial commitment of these dimensions by the even vaster project of colonizing the Moon and Mars would have to be supported with more convincing argu­ proposed by LaRouche and by President Reagan, and in ments, the Chinese-American Nobel prize winner Tsung D. general by the proposals of the Schiller Institute and the Lee immediately definedit as a much more worthwhileproj ­ Fusion Energy Foundation, in particular, in regard to theidea ect than that of colonizing Mars. IrwinPless of Massachusetts of a "Biological sm" which would include optical biophys­ Instituteof Technology then stressedthat instead of spending ics and a massive sanitation and economic intervention into money on the sm, the U.S. government should pitch in to Africa, in order to block the eruption of dangerous pandem­ finance theEloisatron . ics. As could be expected, Professor Oleg Krokiin, of Mos­ Two of the 10 projects presented at Erice regard, in fact, cow's Academy of Sciences, pronounced the Eloisatron ex­ thepreparation of medical personnel and the prevention and cellent, and the U.S.S.R. will certainly take part. But ... cure of diseases in Africa, in particular tuberculosis, Burk­ the funds it can give will be very limited. itt's lymphoma, and T-cell leukemia, all diseases which we So, no money; but attempts to get the American SDI and know to be closely linked to the spread of AIDS. Inthe reports Mars colonization projects into hot water, and at the same presented it was made explicit that such epidemics are ex­ timeto cut a fine figure, at all costs, in international scientific panding rapidly from Africa toward Europe and North Amer­ collaboration-this is what the Soviets did at Erice. ica and we have to intervene at once. In the end, Arbatov went so far as to give a little press Also discussed was flood control on the Yellow River in conference on the Chernobylnuclear accident, where he said China, where floods yearly cause massive damage to agri­ that the accident was due to human errorby two irresponsible culture, and a project to develop agricultural systems in the technicians. When he was asked, however, if the U.S.S.R. Sahel region and to prevent drought and desertification of was now willing to pay reparations to neighboring countries, Africa. he seraphically replied: "I can only guarantee that those re­ Other projects regard prevention of cardiovascular dis- sponsible for the accident will be severely punished."

EIR August 29, 1986 International 39 Soviet link to Rotterdam heroin · haul breaks into international press by OurSpecial Correspondent

Following a two-month blackout, the international press has tion official cited in the Aug. 20 issue of the London Daily widely reported the Soviet link to the transportof 220 kilos Express. He said that he doubted Soviet officialinvolvement! of heroin seized in the Portof Rotterdam last May 30. The An editorial in Die Welt, the leading West German con­ illegal drugs had been transportedfrom Kab ul, Afghanistan, servative daily, clearly underscored the implications of the through the Soviet Union to the Soviet Baltic port of Riga, Soviet role. Die Welt writes: "Free nations have become and transported from Riga to Rotterdam on the Soviet cargo accustomed to a lot by way of East bloc 'exports.' Spies, vessel, Kapitan Tomson . disinformation, terror, peace movements , and weapons are The story, with which readers of EIR and related publi­ 'exported'. . . . In South America, communist terrorists work

cations have been familiar for over a month, brokeafter ElR together with drug dealers .. � . At the same time, detente opened up a can of worms in the Netherlandswhile following politiciansin the West are anxiouslytrying to prevent anyone up a report on the Soviet connection to the drug seizure by from getting the impression that a socialist dictatorship de­ the Italian High Commissioner for Investigating the Mafia, stabilization is under way. . . . It will be interesting to see Riccardo Boccia. The story was then picked up by the Am­ how Soviet authorities try to justify their smuggled heroin sterdam-based De Telegraph, thelargest-circulation daily in wares. Is state terrorism, which has left so many tracks in the Netherlands, on Monday, Aug. 18. The De Telegraph blood, to take on a new dimension?" story promptedDutch Christian DemocraticParliamentarian The originalsource for this story, as was reportedover a Hans Gualtherie Van Weezel to convene a press conference month ago in this publication, was Commissioner Ricardo demanding a government explanation as to why the Soviet Boccia, whose written report on the Soviet role in narcotics involvement was kept secretfor nearly two months. trafficking was reported in Italy's II Giornale, in a series of Following this press conference, which was widely cov­ articles published on July 2 and 5. Commissioner Boccia, eredby the Europeanpress as well as radio and TV, Mr. Van outlining the route from Kabul through the Soviet Union to Weezel on Tuesday, Aug. 19 put beforeparliament six ques­ Riga, and on to Rotterdam, underlined the significanceof the tionsdemanding an explanation of the affair fromthe fo reign, seizure: "For the first time, we have proof that narcotics interior, and justice ministries. Joined by fellow parliamen­ traffickers of Soviet citizenship have been involved." The tarian Mr. Van Der Bergh, Mr. Van Weezel asked: 1) Did commissioner's report was delivered to thejoint United States the Dutch government receive any cooperation from Soviet and Italian anti-terrorism and anti-narcotics committee, which authorities in the investigation; 2) Have the Soviet police includes U.S. Attorney-General Edwin Meese. authorities in the Portof Riga done anything on this case; 3) Commissioner Boccia revealedin his reportthe existence Why did the Dutch police wait two months beforereleasing of a top secret directive, number"M- 120/00-050," outlining the information; 4) Has the Dutch governmentany informa­ Soviet plans to use the drug trade to destabilize the West. A tion on other cases of Soviet involvement in otherEuropean copy of this directive, plus 499 other Soviet KGB-related ports; 5) Will the Dutch Secret Services inform the parlia­ documents, was handed to Western intelligence services on mentary security commission on the case; and 6) Has the Feb. 10, 1971 by the former high-ranking officerof the Bul­ Dutch government informed other governments of its infor­ garian State SecretService (KDS ), code-named Stafen Sver­ mation on Mghan heroin entering Europe. The ministries dlev, after he escaped from Bulgaria in 1971. have up to 20 days to reply. Commissioner Boccia explained that everything started It is hoped that the questions will not only prompt the in 1967 , the year Yuri Andropov took over the KGB , during Dutch governmentto come forward with information on the a top-level meeting in Moscow of Warsaw Pact security Soviet role,but other governments as well, most particularly, service chiefs to develop plans to "exploit and hasten the thatof the United States. Mr.Van Der Bergh told ElRhe felt inherentcorruption of Western society." A subsequent meet­ that ''the U.S. government knows very well what is going ing of the KDS officials in Sofia established a three-year on" in termsof Soviet involvement, but has refusedto make "action plan" to implement the"exploitation ." The defector, that information public. This refusal was affirmedby a com­ Sverdlev, said KGB-KDS directive "M -120/00-050" was is­ ment from an unamed U.S. Drug Enforcement Administra- sued in June 1970, assessing the status of the East bloc plan

40 International EIR August 29, 1986 to "destabilize Western society through . . . the narcotics involved, claiming that the containers had been sealed prior trade." to crossing the Soviet border. Also, a Dutch organized-crime Commissioner Boccia's reportagain fingeredBulgaria as network was involved on the Rotterdam side of the operation. "a big open door for narcotics trafficking." This charge of In fact, on May 14, in the city of Amsterdam, a known, Bulgarian involvement in arms-for-drugs deals has been well though not major, organized-crime figure Rob Koning (38) documented by both the American Drug Enforcement was professionally gunned down; he was believed to have Administration as well as various Italian prosecutors and been involved in the case. judges involved in investigating Bulgaria's links to the at­ Presumably the Afghani side of the operation involved tempted assassination of Pope John Paul II, and to organized Afghan nationals, operating in a country occupied by over crimeand internationalnarcotics and illegal-arms trafficking. 120,000 Soviet troops who are heavily engaged in military Subsequent investigations have also linked Bulgaria to the operations against rebels throughout the country, making Colombian drug mafias along with the Soviet Union's other "normal commercial activity" relatively difficult. ally, Cuba. The U.S.S.R. in fact controls the largest part of Afghan­ istan territory where opium cultivation is carriedout , in what 'Normal commercial shipping channels' is considered the heart of the "Golden Crescent." According The only information released by the Dutch authorities is to Dutch sources, opium production has increased tremen­ that the heroin was put into two shipping containers that had dously in the past five years . In Mongahar Province alone, raisins and wool, and shipped to Rotterdam along "normal poppyproduction increased from 4,200 kilos to 17,500kil os. commercial shipping channels" from Afghanistan. Sources These areas are also contiguous to major opium-produc­ admit that the Dutch authorities have no account of how and ing zones inside the Soviet Union. The French daily Le Fi­ by whom the heroinwas transported from mountaingrowing garo of June 4 identified the Soviet Central Asian Republics areas and put in containers, assert that no Soviet citizen was of Uzbekistan , Turkmenistan, and Tadjikstan, and the Trans-

"The Associated Press correspondent gives the news Soviethand in finanCial from Washington a few days ago that LaRouche was sued in Federal Court for blackmail and fraud. First Fidelity war against LaRouche Bank is suing him for $750,000, which LaRouche appro­ priated for himself in one stroke, using the resources of The "Hidden Hand" of Moscow as an integral part of the his financial empire. This money has been transferred to dirtyfinancial warfare operations mountedagainst various his account by credit card manipulation. This kind of organizations politically associated with U. S. 1988 Dem­ crime is not new in the United States, especially through ocratic presidential candidate Lyndon H. LaRouche has the use of computers . surfaced via a front-page slander article in the Aug. 7 "All this wouldn't be worth mentioning, were it not edition of the Soviet weekly Sovietskaya Kultura. The for one interesting detail. In recent years , Lyndon La­ article by Grigori Oganev, titled "About a Fraud," pur­ Rouche, who professes extreme right-wing opinions, has ports to inform the Soviet readership about "swindlers" wanted to assume the role of a political leader to revive and "fraud"in U. S. society, but the bulk of the text deals America. He even was a candidate for President of the exclusively with Moscow's "Public Enemy No. I" in the United States, and he has not abandoned this idea, even United States: Lyndon H. LaRouche. though he failed catastrophically. We reprint here the portions of the article which attack "In a way, LaRouche is right. If one President of the LaRouche and his associates, thus bringing to public light United States could get involved in the Watergate scandal, therole of Moscow in co-directing the organized financial and another had among his personal friendsswindlers who harassment by the Dope Lobby against LaRouche's bid had misused public funds ...why can't LaRouche ma­ for the presidency in 1988: nipulate credit cards in the fight. . . ? Why not, in fact, "Today, a new name has been added to the list of those since other Presidents were involved in all sorts of shady gentlemen of fortune. The name is Lyndon LaRouche, a business, wouldn't he try his luck and combine the use­ typical American nouveau riche businessman, the owner ful-all sorts of tricks with credit cards-with the fight of a large network of financial and credit organizations, for the presidential seat and become a big shot?" who got himself suddenly in the center of attention of As EIR (and the Wall Street Journal)have documented reporters dealing with the criminal world of the United at great length-First Fidelity Bank is one of the foremost States. mafia-linkedbanks in the United States!

EIR August 29, 1986 International 41 caucasian Republic of Georgia as the two major poppygrow­ ing areas. Big poppy plantations are also found in the south of Russia from Krasnodar to Stavropol-the home territory of YuriAndropov and Mikhail Gorbachov. Do You Have the While the cover of transporting raisins as a means of smuggling may appear credible, Afghanistan exported a min­ Latest uscule 271 tons of raisins last year, the Soviets, 100 tons. According to a Rotterdam fruit importer, "No one imports Ammunition Afghan raisins unless some Afghani walks into your office and makes an offer, afterwhich he disappears ." A shipping To Fight for the agent of Ocean Freight, the only Westerncompany allowed to arrange shipments from Rotterdam through the U.S.S.R. SDI? and which specializes in shipping cargo into Afghanistan, said he never heard of exports from Afghanistan entering Rotterdam. Japan and the SDI: Shipping cargo through the Soviet Union is extremely An Inside Look uncomplicated. Everything is handled by Soviet state com­ panies, since no foreign transport companies are allowed to Japan's full-scale participation in the u.s. Stra­ operate within the Soviet Union. The only company able to tegic Oefense Initiative could shorten the re­ ship cargo through the Soviet Union to or from Holland is search time for deployment by a full two years. Transworld Marine Agency (TMA) , the Soviet shipping and bring enormous economic and defense company that operates as a joint venture between the Soviet benefits to Japan. How this can happen is detailed in the just­ state shipping companies and private Belgian and Dutch in­ published transcript of a two-day conference terests . They have offices in Amsterdam, Rotterdam, Ant­ in Tokyo, "SOl: Military, Economic. and StrategiC werp, and Dusseldorf. Implications.· sponsored by the Fusion Energy Soviet shipping interest in the port is considerable. Near­ Foundation and the Schiller Institute on April 22- ly 1,300 Soviet ships call at the port annually, making it the 23, with 180 members of Japan's scientific and third most frequent flagcarrier in the port. TMA was founded political elite in attendance. in the Netherlands as a private joint venture only after the The consensus at the end of the two days was Dutch governmentref used the Soviet request for a consulate that Japan's participation in the SOl as an equal in Rotterdam, amid fears that such a consulate would beused partner is both necessary and urgent. As Prof. for espionage and other intelligence activities. In fact, it has Makoto Momoi of the Yomiuri Research Center put it, "Every day that Japan does not partici­ been reported in the Antwerp press that Soviet employees of pate in the SOl is another day lost" in the battle the Antwerp office of Transworld Marine were deported be­ to counter the Soviet threat. cause of espionage activities, and that the company has been used to launder nearly several million Belgian francs to the Top U.s., European, and Japanese scientific. mil­ Portuguese Communist Party in the early 1970s. Transworld itary, and political representatives discussed: is also the shipping agent for the Kapitan Tomson, which is • the latest technologies of the SOl; a well-known caller in Rotterdam. It is engaged in a regular • specifically what Japan can contribute; service between Riga and Rotterdam as well as Antwerp. • the pOlitical climate in Japan; Interesting to note was the fact that the Kapitan Tomson • the nature of the Soviet threat. up until the en\! ofMarch 1986 had been cruising the Medi­ terranean, calling at such ports as Syria's Lattakia, Beirut, Fully documented at the conference is how SOl Lebanon, and ports in Greece, Cyprus , and Turkey. technologies will bring about a 100-fold leap in A call by a would-be Afghani raisin importer to Tran­ energy flux density, abruptly reversing the de­ sworld requesting information for transshipping two con­ cline in productivity in industry. tainers of raisins from Afghanistan revealed an interesting disparity in the claim that this was a "normal" commercial shipping route . Transworld asserted that these containers Now, the full proceedings of the conference are available in a transcript. Order your copy could only be taken by rail from the border crossingat Haer­ for $100.00 by writing the Fusion Energy Foun­ atan and forwarded to Leningrad, to be loaded on board ships dation, P.O. Box17149, Washington, D.C. 20041- and then direct to Rotterdam. When asked whetherthe raisins 0149. Or call (703)771-7000 to place your order could be shipped through Riga, our raisin importer was told by telephone. Visa/MasterCard accepted. that would be iQ'lpossible, as "the normal commercial ship­ ping route is through Leningrad, not Riga."

42 International EIR August 29, 1986 Since the end of Ju1y, the GSFG has had a new com­ Russian maneuvers mander in chief, Army Gen. Valeri A. Belikov. Before this, Belikov, a tank general, had commanded the Carpathian biggest since 1984 Military District since the end of 1979, and before that­ from 1976 to 1979-commanded the North Caucasian Mil­ itary District, where he was on the regional military council by Konstantin George with one Mikhail Gorbachov. Belikov's predecessor as GSFG commander in chief, Army Gen. Pyotr Lushev, departed for By early September, the Soviet Union will be conducting the Moscow on July 19, to become, in one of the biggest pro­ biggest military exercises on the border with the Federal motions in Soviet military history, first deputy defense min­ Republic of Germany since the mammoth Russian military ister. maneuvers of late June/early July 1984. In those exclusively Behind theterse officialSoviet maneuver announcement Russian maneuvers, thelargest ever conducted in the postwar is unfolding a Russian military maneuver of alarming dimen­ history of the Soviet Union-and embracing East Germany, sions. The "official" figure of 50,000 troops is a deliberate · Czechoslovakia, Poland, Hungary, and the Baltic Sea and misrepresentation, referringonly to the active component of the Western Military Districts of the Soviet Union-the Rus­ combat units drawn from the GSFG. The real dimensions of sian Armed Forces simulated a surprise invasion of the Fed­ the purely Russian military exercise will be either double or eral Republic. triple that figure. At the peakof the exercises, the three Russian armies in On the same day on which the Russian maneuvers begin, EastGermany stationed near theborder with West Germany, Sept. 8, theofficially announced WarsawPact "Druzhba '86" launched a coordinated simulated invasion of theFederal ("Friendship '86") maneuvers involving the Soviet "Central Republic by deploying nearly all their divisions to the West, Group of Forces" stationed in Czechoslovakia, the Czech stoppingjust shortof the border. and Hungarian Armed Forces, will also begin, lasting until The 1984 maneuvers were commanded by Soviet Mar­ Sept. 13. Thus, for the first time since June/July 1984, there shal Nikolai Ogarkov , at the time Chief of the Soviet General will be simultaneous, coordinated Russian surprise-attack Staff, and soon-in September 1984-to acquire three cru­ rehearsals conducted along the entire length of the Federal cial responsibilities in the new wartime high command sys­ Republic's border with the Warsaw Pact. tem that he set up: the Soviet Union's overall wartime com­ The first half of September will see large-scale Soviet mander in chief of the Armed Forces; commander in chief of naval and airmaneuvers-probably also including naval in­ the Soviet forces committed to fighting and defeating the fantry-in and over the Baltic Sea. According to military United States and NATO in a general war; and commander sources, the Soviet Baltic Fleet, since July under a new com­ in chief of the Western Theater of War, responsible for any mander, Vice-Admiral Ivanov, has now gatheredat its head­ limited wars or surgical strikes in Central Europe against the quarters and major naval base at Baltisk (Pill au) in Soviet­ Federal Republic . occupied East Prussia, undergoing preparations for major MarshalOgarkov in his latter two capacities spendsmuch naval exercises. of his time in East Germany , supervising the perfecting of Experts are warning that one should expect"surprises" in the surprise attack offensive capabilities of the nearly 500,000 the coming weeks, including the incorporationof the massive Soviet spearhead invasion troops stationed there . For exam­ Soviet military forces based in the Military Districts of the ple, Ogarkovwas in East Germany during April when Soviet Soviet Union into the purely Russian maneuvers-as was leader Mikhail Gorbachov spent a full week in East Berlin done in 1984. for the Socialist Unity Party Congress, and held secretmeet­ The 1984 maneuvers were purely Russian for military ings with Gorbachov and the Soviet military leadership. and political reasons. Under conditions of Russian decisive Sources emphasize that whether or not it "leaks" into the strategic superiority, the Soviet Union could well attempt to public, Ogarkov will be the de facto commander in chief of grabWest Germany by military intimidation. One very pos­ the upcoming huge maneuvers. sible "scenario"preceding a Soviet surgical strike seizureof The news of the upcoming maneuvers was conveyed on the Federal Republic would be Russia invoking its "rights" Aug. 18, when the Soviet Union announced that its forces as a World War II victor, under the 1945 Potsdam Agree­ stationed in East Germany, the "Group of Forces in Ger­ ments, to intervene militarily anywhere in Germany, to pre­ many," GSFG, will conduct large-scale militaryexercises on vent a recurrence of "fascism." To maintain the legal fiction Sept. 8-13. The announcement stressed that the exercises, for such a case, the military intervention must be purely which will have a minimum "official" troop strength of Russian. In this context, it was no coincidence that the 1984 50,000, will be exclusively Russian-as in thefamous 1984 Russian maneuvers were followed by a Soviet government maneuvers . The East German National Peoples Army will demarche, addressed to the Bonn government, charging West not participate. Germany with violating the 1945 Potsdam Agreements.

EIR August 29, 1986 International 43 Plan' backers, to reach practical agreements of a kind which will set the trend for all so-c�lled moderate Arabs. If that works, the Middle East can still be saved. If not, the entire eastern Mediterranean will soon become a Soviet lake." LaRouche : Overhatli LaRouche is convinced that PresidentReagan could gain the support of a bipartisan majority for the New Marshall Mideast policy now! Plan proposal. "One of the reasons certain liberal Democrats are reacting with such hysterical desperation against me now, is that their polls show that I represent approximately one­ bemocratic presidential candidate Lyndon H. LaRouche, Jr. quarter of the Democratic voters at this time. About fifteen Aug . 20 demanded an immediate and revolutionary overhaul percentof this support is described as 'hard core,' with more of U.S. policies toward Israel and the Middle East. than twice that number seen as leaning toward supporting In submitting his policy-document to this news agency, candidates known to be associated with me . Whenever the LaRouche denounced "the continuing Soviet-appeaser roles President and I might tend to converge on importantpolic ies, of both Secretary of State George Shultz and Assistant Sec­ there is potential for supportfrom abipartisan majority." retary Richard Murphy" in Middle East affairs . However, he On his own political strength, he added the following described the recent Middle East visits of Vice-President information. "My intelligence sources inform me, that the George Bush as "positive overall ," despite Bush's "unfortun­ Soviet government rates my present support among Demo­ ate clash with Egypt's President Mubarak over the issue of cratic voters at between one-quarterand one-third of the total. IMF conditionalities." Thatis one of the reasons that Moscow has been thrown into Positive changes in U. S. policy toward both Israel and confusion by the President's recent letter to Secretary Gor­ the Middle East generally are in progress, LaRouche thinks; bachov. but, "action in these directions is moving much too slowly, "Sources such as Assistant Secretary Richard Perle and and there is still dangerous vacillation on a number of the key William Schneider have been assuring Moscow's friends in issues involved." the West, that the Strategic Defense Initiative might not sur­ The candidate criticizes the Reagan administration, "for vive the end of President Reagan's second term. Also, Mos­ failing to give clear and positive support to Prime Minister cow had been convinced, through Western channels, that Peres' 'New Marshall Plan' proposal, and for failing to re­ SOl 'population defense' was being scrapped in favor of alize that the harsh IMF conditionalities which the U.S. State Zbigniew Brzezinski's point-defense of missile sites. Now, Department is imposing upon Egypt, Tunisia, and other na­ since President Reagan's affirmation of a commitment to tions, could destroy already collapsing u.S. influence in the early deployment of an effective SOl 'population defense,' Middle East very soon." some Moscow leaders have lost confidence in the Soviet LaRouche emphasized, that he continues to be supportive of the administration's earlier "Reagan Plan," and efforts to revive this kind of policy-thinking today. He fears that the administration has not appreciated fully the way in which Alexander Haig and George Shultz sabotaged the "Reagan Positive changes are in progress. Plan," paving the way for such events as the threatened, but. action is moving much too Syrian-directed holocaust of genocide against Lebanese slowly. and there is still dangerous Christians today. LaRouche , widely regarded as sympathetic to Israel's vacillation on a number qfthe key Prime Minister Shimon Peres, reports that he has been in issues involved. occasional contact with Peres and Peres' circles on these issues for years . "The thing which must be stressed," he qualifies, "is that a wide range of leading Israelis, in addition to Peres' current within the Labour Party, are thinking in the U.S.A.-Canada Institute's reading on U.S. politics. same general direction today. There may be shadings of "Any time Moscow sees the President and me agreeing difference, as to exactly how the 'New Marshall Plan' effort on a major policy-issue, especially since the recent growth should be shaped and implemented; but, most U. S. observers of visible supportfor my policies among Democratic voters, would be astonished if they knew the range of political cur­ Soviet leaders worry, fearing that they may be forced to back rents in Israel thinking in this direction." away from some of themore aggressive Russian postures." LaRouche emphasizes, that there is a clear convergence For similar reasons, LaRouche's thinks, that if he and of thinking among leaders of Israel and some of its Arab Mr. Peres could sell President Reagan on a New Marshall neighbors . He proposes: "The United States must concentrate Plan policy, Moscow might pull back Syria, and back off on assisting President Mubarak and Israel's 'New Marshall from some of its other Middle East adventures.

44 International EIR August 29, 1986 Israeli-Syrian showdown or brinkmanship diplomacy? by ThierryLalevee

For the third time since the beginning of the year, military This was described on Aug. 18 as a very "tangible threat" by tension between Israel and Syria is running high enough that Brig.-Gen. Yosef Eyal of the Engineers Corps, and by De­ talks of a September or October warare being heard in most fense Minister Rabin. Middle Eastern and Western capitals. Twice at the end of Eyal elaborated that IOF units are equipped to fight such 1985 and in the spring of 1986, the threat ofwar was defused a chemical war, and have been trained to do so ever since the with the activation of the hot-line between Moscow and introduction of such weapons into the Iran-Iraq war. How­ Washington. ever, Rabin pointed out that, though Syria's SS-21 could not Testing Israeli reactions, Syria had engaged from No­ "accurately reach such cities as Tel Aviv," it could reach vember 1985 on in a strange kind of ballet, deploying and other cities in the North. According to Israeli military sources, withdrawing at will its SAM 6 and SAM 8 batteries in Le­ Syria's operational capabilities to use chemical weapons , banon and at Syria's borders with Lebanon. In November could become the real casus belli. 1985, two Syrian MiG-23s were shot down by the Israelis Additionally, it was announced on Aug. 15 that the Soviet over the Bekaa valley in Lebanon. By the following month, Union had begun its deliveries of the very advanced MiG-29 ' Syria was receiving deliveries of the SAM-5 missiles from jetfighters. Syrian pilots have been trained in the Soviet Union Moscow. for over a year on how to handle these sophisticated planes, At the roots of the present crisis are several politicaland which represent a real threat to the Israeli Air Force, made military considerations. Militarily, Syria, whose avowed up of French and American fighters . purpose has been to "reach strategic parity with Israel," in The arrival of these MiG-29s is the latest piece of the the words of Syrian President Hafez Assad, did reach new puzzle to enable Syria to concretize its waraims . For over a stages of development. It is now able to man and deploy a year, through one military maneuver after the other, the Syr­ whole range of surface-to-surface missiles, such as the an­ ian army has been systematically restructured to face a blitz­ tique Scuds or Frogs, supposedly updated, but especially the krieg type of war from Israel, as it beefed up its military more modern SS-21 middle range missile. presence in the Golan Heights-deploying several dozen T- In a numerical comparison between military capabilities 72 tanks. in Lebanon, Damascus has a 3 to 1 advantage, and has some While Syria, despite its economic crisis, has been able to 4,200 troops over Israel's 3,600. But this is not considered a spend more than 55% of its Gross National Product for its serious threat for an Israeli army which has already fought arms buildup, Israel's army has suffered drastic cuts. In a against three Arab armies at once on several fronts . review of the Israel Defense Forces' status over the period Israeli military sources and reports from Jane's Defense 1986-96 which began in August, Israeli military specialists Weekly also indicate that the Israeli army has by now enough warned that "because of the Gramm-Rudman amendment," experience in electronic warfare , that should Syria deploy its Israel's armycould be in an even weaker state in 10 years SS-21 against Israeli northern cities, it would encounter a thannow . few surprises. The analysis underlined that U. S. economic and military aid should be expected to decrease , with obvious political Syria's new military capability consequences for the American-Israeli relationship which Militarily, the threat comes rather from a new develop­ was strengthened when Vice-President George Bush an­ ment. By mid-July, Israeli specialists had rung the alarm bell nounced in lateJuly that Israel would receive the NATO-type on Syria's ongoing development of chemical weapons. Ac­ "most favored nation status ." The military strengthening of cording to Prime Minister Shimon Peres and Defense Min­ Assad in Syria and the decline of Israeli forces as a result of ister Yitzak Rabin, the Syrians are developing the kind of the Gramm-Rudman treatment may lead the Israeli govern­ devices which could be fitted in the warhead of the SS-21. ment to draw the properconclusions .

EIR August 29, 1986 International 45 Meanwhile, Israeli military and political leaders are fol­ talks, its intention is to reach just a such a deal. lowing with great interest the events in Lebanon and the To do so, Sharon and Company are once again prepared renewed shelling across the borders to northern Israel. Be­ to sacrifice the Lebanese Christians, even though they are tween Aug. 10 and 14, Israeli air forces intervened three telling them just the opposite. However, this is far from times against Palestinian bases, notably in the Bekaa-inter­ evoking unanimity inside Israel, where many consider the ventions which aimed both at attacking the Palestinians, and continued existence of an independent anti-Syrian Christian at testing the readiness of Syria's anti-aircraft defense. movement as a matter of Israel's national security. Israeli sources connected to former Defense Minister Ar­ Israelis won't interfere in Lebanon to reestablish the pre- iel Sharon, who expects to be the number two in Shamir's 1975 situation, but they will consider any Syrian attempts at government in October when the Likud party leader takes taking over the easternpart of Beirut, as near to being a casus over as premier under the rotation agreement with Peres, have belli. too. expressed "dismay" at the inability of Hafez al Assad to Damascus did receive the message and has moved cau­ impose the "Pax Syrianica" in the country. They argue that tiously, using its usual tactic of divide and rule within the Israel and Syria have a common aim in Lebanon: to rid the Christian camp, and of terror through car-bombs. However countryof any Palestinian, especially PLO, influence. Syri­ cautious he is, Assad is expected to make a mistake, as he a's recent defeats in Lebanon mean that the PLO is back in cannot tolerate too long this embarrassment to Syrian pres­ the country . tige. Syria's inability to eliminate the Palestine Liberation Or­ If he does so, he will gamble his future, despite his at­ ganization, so runs the argument, is a danger to Israel, which tempts at reconciliation with several Western countries. Is­ should be prepared to act! The political clout behind such rael's Prime Minister Shimon Peres is himself in no hurry to arguments is Sharon's longstanding negotiating deal with consider such a war; the momentum of his surprise summit Moscow and Damascus to exchange Lebanon for the Golan, at Ifrane with Morocco's King Hassan, and his upcoming which he would have recently discussed again with Soviet summit with President Hosni Mubarak of Egypt, are priori­ officialsduring an early August trip to Turkey. ties. Though Syria is totally isolated in the Arab world, a war Moscow itself has leftno doubt that, behind the Helsinki could adversely affect the regime of President Mubarak.

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46 International EIR August 29, 1986 Is a transfonnation coming in Sino-Soviet relations? by Mary McCourt and Linda de Hoyos

The extended visit of Soviet First Vice-Premier Ivan Arkhi­ common benefit. . . . The official border could pass along pov to Beijing has raised eyebrows in capitals around the the main channel" -implying that Beijing would retain the world. At issue is thepossible transformation of Sino-Soviet Ussuri River island of Chenbao, under Chinese occupation relations in the weeks following Soviet leader Mikhail Gor­ since 1969. Gorbachov also related thatthe U.S.S.R. is pre­ bachov's July 28 speech on Soviet foreign policytoward Asia paring to cooperate on the construction of a railway linking in Vladivostok. the Xinjiang Uygur Autonomous Region of China to the Arkhipov, who was the Soviets' chief adviser to China in Soviet Kazakhstan. The U.S.S.R. has also proposed coop­ the 1950s, at the height of the Sino-Soviet alliance, was eration in space, "which could include training of Chinese reportedly in Beijing from July 27 on-that is, before Gor­ cosmonauts," Gorbachov noted. bachov's speech-in order to receive acupuncture treat­ The Soviet strategy is to make concessions to China on ments. However, according to the French press agency AFP the northern border, without losing momentum in the Sovi­ on Aug. 19, Arkhipov has managed to find enough time to ets' growing hegemonyon the Pacific rim encircling China, meet with "one of China's most influential new leaders, Vice fromAfghanistan throughIndochina to North Korea. PremierQiao Shi." According toWesterndiplomatic sources The Soviet objective is twofold. First, to securethe Rus­ cited by AFP, the meeting is of special significance because sian "back" as the militaryprerequisite for a finalshowdown Qiao is a member of both the Politburo and the Secretariat of withthe West. This requires at least Chinese neutrality. Sec­ the Chinese Communist Party, as well as a possible successor ond, · replace the West-and most emphatically Japan-as to China's most powerful leader, Deng Xiao Ping. Arkhipov China's premier economic partner. For Moscow, Japanese also met withVice-P remiers Yao Yilin, Wan Li, and Li Peng. economic intervention into China is dangerous-just as it The effect of Gorbachov's Vladivostok Doctrine speech­ was dangerous in the period that led to the Russo-Japanese in which he put forward new concessions to China-has been War of 1904 and thereafter. Moscow would prefer that Jap­ to tum all eyes in Asia toward the northeast. A full Sino­ anese business and technology be focused on the develop­ Soviet rapprochement would have a drastic impact on the ment of Russian Siberia. correlation of forces between East and West, and place a Sino-Soviet imperial condominium over most of the nations The three obstacles of Africa and Asia. To fulfill these purposes requires that Moscow induce The impetus for this rapprochement has come primarily China to accept neutrality and implicit partnership with the fromthe Soviet side. Pravda stated shortlyafter Gorbachov' s Soviet Union, without jeopardizing military gains in Asia speech: "The Soviet Union is ready at any time and on any already achieved. But military withdrawal is the crux of level to discuss with China in the most serious manner ways China's posed "three obstacles" to full normalization of re­ of creating an atmosphere of good-neighborliness in order to lations: Soviet withdrawal from Afghanistan, Vietnamese strengthen and promote the obvious improvement in our re­ withdrawal from Kampuchea, and Soviet withdrawal of troops lations which has taken place in recent years [emphasis and missiles from the Sino-Soviet border. Where do these added] ." points stand? On Aug. 5, Chinese leader Deng Xiao Ping tentatively 1) Afghanistan: Gorbachov reportedin his July 28 speech reciprocated, telling visiting Japanese leader Susumu Nikai­ that the Soviet Union had ordered the withdrawal of six full do , "It seems to me there are some positive elements in the regiments from Afghanistan. However, this was soon re­ Gorbachov speech." vealed to be no more than a propaganda ploy, when Afghan Gorbachov's offers to China included initial steps to set­ leader Najibullah declared early in August that the Mghan tle outstanding border disputes in China's favor. "We do not, army continued to be plagued with desertions and that efforts for example, want the Amur frontier to be a water obstacle. at recruitment had fallen flat. In U.S.-sponsored talks in May the basin of this mighty river be a means of uniting the Geneva between Afghanistan and Pakistan, the Soviets in­ efforts of the Chinese and Soviet people to exploit the very dicatedthat the best they could come up with was a four-year rich resources and water engineering installations there, for timetable for withdrawal.

EIR August 29, 1986 International 47 2) The Sino-Soviet border: The U.S.S.R. has not indi­ tions that have not been made before ." Six days later, Chinese cated any motion on the issue of Soviet deployment within State Councilor and Foreign ,Minister Wu Xeqian met with its own borders . On the 4,500-mile Sino-Soviet border, the the Soviet charge-d'affaires i� Peking to discuss Sino-Soviet longest land border in the world , 500,000 Soviet troops with affairs . the most modem weapons face some 1.5 million ill-equipped For the first time, Wu said, "China attaches importance Chinese troops. to the [Vladivostok] speech, and expresses its welcome to However, Gorbachov announced that the Soviets would the proposals." execute a "significant withdrawal" of troops from Outer Much remains to be negotiated, of course. Wu empha­ Mongolia. The announcement appeared to pave the way for sized that the Chinese "were not satisfied" because Gorba­ a fast succession of diplomatic moves between China and the chov's speech evaded, in particular, the question of the Viet­ Soviet satellite state to its north . On Aug. 9, China signed a namese troops in Cambodia, the obstacle to improved rela­ consular agreement with Mongolia, after a visit by Chinese tions China considers most important. Vice-Foreign Minister Liu Shuqing, the highest-ranking However, Wu ended his discussion with the Soviet at­ Chinese officialto visit the Mongolian capital of Ulan Bator tache , the Xinhua news agency reported, by stating: "The in two decades, to discuss "bilateral and some international Chinese side sincerely wishes to see early normalizing of issues." Sino-Soviet relations, and hopes that the Soviet side will 3) Indochina: Motion on this front began in the fall of earnestly consider theviews of the Chinese side." 1983, when Politburo member Geidar Aliyev visited Hanoi Even before Gorbachov'$ speech, Moscow's chief ne­ and made the statement that an effort should be made to gotiator, Viktor Karpov , at the U.S.-Soviet arms talks in improve relations with China. New Vietnamese Secretary­ Geneva stopped in Beijing f� "an exchange of views." On General Truong Chinh, who had such strongties tothe Chinese the economic side, the first Chinese trade fair in 33 years Communist Party that he was nicknamed "Long March," opened in Moscow, with 5 Chinese ministries and 22 trading visited Moscow Aug. 12 for discussions on the Sino-Soviet­ firms represented. Earlier in July, a group of Chinese trade Vietnamese conumdrum over Kampuchea. The Soviet news unionists visited Moscow for the first time in 20 years . agency TASS, reporting on Truong Chinh's meeting with On the cultural side, Mrs. Raisa Gorbachov, a board Gorbachov , stated: "The Soviet Union and Vietnam reiterate member of the newly created Soviet Cultural Foundation, theirreadiness to normalize relations with China, which would paid a rare social call to the Chinese embassy in Moscow in be very significant to improving the situation in the Asian­ early August, to attend a Chinese fashion show. ''This was Pacificregion and consolidating universal peace ." quite an event," a diplomatic source told the London Times Upon Truong Chinh's return , the Indochinese foreign Aug. 11. "This sort of thing hasn't happened in 20 years." ministers met and issued a communique stating that the In­ Mrs. Gorbachov's visit follows a cultural exchange between dochinese countries will "strive persistently forthe normali­ Beijing and Moscow worked out by a visiting Chinese dele­ zation of relations and re-establishment of good neighborli­ gation to the U.S.S.R. in mid-July. ness" with the people of China. Echoing the earlier Pravda In September, Soviet Deputy Foreign Minister Mikhail article, Radio Hanoi reported Aug . 18 that the countries were Kapitsa will arrive in Beijing, allegedly in response to a prepared to meet "at any level and anywhere " to normalize Chinese invitation issued last year. Soviet First Deputy Prime relations with China. Minister Talyzin will also visit China this fall, according to For their part, the Chinese have proposed that the Khmer a July 31 wire from the Japanese news agency Kyodo. Taly­ Rouge cut down its armaments to the levels of its non-com­ zin, Kyodo stressed, is a more important figure than Arkhi­ munist partners, the forces of Son Sann and Norodom Sihan­ pov, since he is Moscow's economic planning chief. In Oc­ ouk. The Chinese hope to force the Khmer Rouge into ad­ tober, Soviet Foreign Minister Shevardnadze and China For­ justments that might make the Pol Pot genocidal force ac­ eign Minister Wu are expected to meet in New York during ceptable in a coalition government with, not only Son Sann the United Nations General Assembly. . and Sihanouk, but also the Vietnamese-backed Heng Samrin There are also strong rumors that East German leader government in Phnom Penh. So far , the Khmer Rouge has Erich Honecker will visit Beij'ng, as part of a r.cheduled trip rejected the proposal . to North Korea. This would be the first time an Eastern European head of state has visited China in over 20 years . China welcomes proposals The selection of Honecker for this honor is not without sig­ While China has not given up its "three conditions," it nificance. Honecker also played a role in negotiating North has leftthe door open for far greater collaboration with Mos­ Korea's return to the Soviet fold; an East German-North cow . In the three weeks since Gorbachov's speech, Bejing's Korean friendship treaty signed in 1985 paved the way for response has warmed . On Aug . 7, Chinese foreign ministry the delivery of Russian MiG-23s to North Korea and the spokesman Yu Zhizhon noted that Gorbachov had "made Soviets' increasingsponsorship of North Korean diplomacy. some new remarks on the improvement of Sino-Soviet rela- To be continued.

48 International EIR August 29, 1986 dozen-plus shell companies. Duncan was said to be a CIA agent in Peru's press, but he denied it. On Aug. 12, the Duncan interview was finally published Soviet cell in U. S. by the Miami Herald. Duncan claimed that the Peruvian Navy had contracted for the weapons, but when they backed bared by 'Pia Ve sta'? out of the deal, he arranged to sell them to El Salvador's military. Spokesmen for both institutions deny Duncan's story. A by Gretchen Small communique from the President's office in Peru on July 16, suggested that documents implicating the Peruvian Navy in Have Peruvian and Panamanian authorities uncovered a So­ the deal were fabricated to "launder" the weapons. Specula­ viet nest within u. S. intelligence networks operating in the tion has arisen that the weapons were destined for the Nicar­ Western Hemisphere? Is a faction of U.S. intelligence in­ aguan "contras." volved in trafficking Soviet weapons to Thero-America? Washington's silence on the Duncan affair matched that The investigation is still clouded, but the few facts al­ of East Germany. The French press agency AFP reported on ready establishedin the Pia Vesta scandal, pose these harsh Aug. 12 that police and U . S. State Department officialsclaim questions. This spring, East German state agencies sold 250 that no record of Duncan as an arms-agent could be found­ tons of Soviet-made weapons to a Miami-based U.S. arms nor was any necessary, as long as he didn't sell U.S. arms, trafficker, who planned to sell them in Thero-America. The or import arms to the United States. One governmentsource news has been met with black-out in Washington, D.C., but dismissed the matter, claiming that "not much worry existed the cover-up is about to be blown. over a shipment of arms which went fromone banana repub­ The scandal began on June 14, when Panamanian au­ lic to another. " thorities detaineda Danish ship at the request of the Peruvian Soviet weapons for lbero-America dismissed as a matter government. The ship, the Pia Vesta, had anchored off the of "banana republics?" The response smacks of cover-up­ coast of Peru in early June, remained in Peruvian waters for on a grand scale! The Pia Vesta case raises national security a few days, and then turned back to sea. When the ship was questions. What is a U.S. arms-agent doing in a pact with searched in Panama, 250 tons of Soviet-made weapons and Soviet intelligence services? Is Duncan a Soviet agent? Is equipment were found aboard . The ship's documents showed Duncan part of a Soviet-protected cell within U.S. intelli­ the weapons had been loaded at Rostock, East Germany­ gence involved in arms-trafficking in the Western Hemi­ by East German state trading companies. sphere? The Pia Vesta carried enough weapons to equip a terrorist battalion: 1,500machine-gun s, 1,500 rocket-launchers, and Answers demanded 32 light-weight trucks . Three days after the weapons were On Aug. 13, Peru recalled its ambassador from East uncovered, Sendero Luminoso (Shining Path) narco-terror­ Germany, to protest its failure to answer repeated Peruvian ists attemptedan uprising in Peru , which later proved to have requests for information on the Pia Vesta matter. "The situ­ been planned as the trigger for the overthrowof Alan Garcia's ation remains confused, because all the investigations end in government. false leads, non-existent companies, or falsifieddocum ents," Were the Soviet weapons going to the terrorists? The Peruvian Foreign Minister Allan Wagner told the press Aug. news covered the front pages in Panama and Peru-but was 13. But East Germany has failed to explain its involvement met with silence in other Western news media. in the "illicit arms traffic;" calling it a "commercial transac­ The story soon become more complicated. Wire reports tion"! identifiedtwo East German state trading companies (Import­ "In accordance with international law , I must express the Export Gesellschaft MBH and VEB Schiffsmaklerei), the Peruvian government's strong protest for not having received Swiss Verwaltungs und Finanzierungs AG (VUFAG), the documented information which would allow us to clarify the Paris-based France Maritime du Commerce, Uruguay's Mar­ participation of your country's state firms in what shapes up nix S.A., and a "Sinato International Co.," location un­ to be a case of illicit arms traffic," a Foreign Ministry note known. stated. Those behind the shipment "have put at risk the se­ In mid-July, a Miami-based arms trafficker, David Dun­ curity of Peru and the sovereignity of the country. " can, stepped forward as the dealer who bought the Soviet On Aug. 16, the Peru sent another diplomatic note , re­ weapons. In an interview with a Miami Herald reporter, questing U. S. assistance in investigating Duncan. "Said arms published by the Peruvian magazine Caretas on July 31, dealer has been identifiedas the proprietor of the cargo aboard Duncan bragged that he was among the top 30 arms agents the Pia Vesta and had involved elements of the Peruvian in the world, selling $3.8 billion worth of military hardware armed forces in this contraband. In light of the need to com­ in lbero-America, the Middle East, and Africa, through two plete the investigations," U.S. cooperation is now required.

EIR August 29, 1986 International 49 The Trust & the Monarchy-Part II

On Lord Mountbatten's education of England's Red Prince by Scott Thompson

It was Louis, Earl Mountbatten of Burma, son of Queen nize Russia along the lines of the German cameralist Fried­ Victoria's radical granddaughter, who managed the educa­ rich List, who had earlier been the model of Abraham Lin­ tion of his nephew, Prince Philip, Duke of Edinburgh, as coln's chief economists, theCarey brothers . well as his courtship of Princess Elizabeth. Such was the After training at the Royal Naval College at Dartmouth, British royal couple's gratitude to Lord Mountbatten that they Lord Mountbatten entered Cambridge in 1919, where his gave him their first offspring, Charles, Prince of Wales , to education in Marxism took another step forward . While educate for the British throne. Mountbatten may have had contactwith Bertrand Lord Rus­ Other European noble families to whom Lord Mountbat­ sell and other famous communists on the Cambridge faculty , ten served as an intimate adviser on such matters of state his most notorious liaison was with a student named James include: Prince Andrew of Greece, who married Mountbat­ "Peter" Murphy, who would become his "private secretary" ten 's sister, Princess Alice; their children; their relative, King when Mountbatten held major defense posts. Philip Ziegler, Constantine of Greece; King Gustaf VI of Sweden, who in his 1985 biography, Mountbatten, states: "Murphy was marriedanother sister of Mountbatten, Princess Louise; their distrusted by many of the officers who surrounded Mount­ child, King Gustaf VII of Sweden. batten and it was frequently suggested that his influence was Lord Mountbatten 's political involvement with the West­ . . . damaging to the national interest. In 1952, he was de­ ern oligarchic partners of the Soviet intelligence services' nounced as a Communist agent. . . . Mountbatten felt that operations, therefore becomes a matter of major conse­ he had to ask the Security Service to investigate his friend." quence. This relationship is epitomized by his introduction Their findings were no surprise to Mountbatten, who knew of Soviet fixer Armand Hammer to both Prince Philip and that, although Murphy was not a member of the Communist Prince Charles, who are now on intimate terms with this Partyof Great Britain, he was aMarxist and a homosexual. friendof Felix Dzerzhinskii, the chief founder of the Cheka. Despite this, Mountbatten told journalists: "See Murphy Sufficientevidence exists in public records alone to show if you want my views on the Soviet Union." that Lord Mountbatten , throughout his adult life, was an His intimate relationship with Murphy led to one of oligarchic controller of those networks that U. S. intelligence Mountbatten's more humorous exchanges with his wife. "Four classified through its World War II experience as "Nazi­ different people," wrote Mountbatten, "have come to me in communists." From his mother, Princess Victoria of Hess, the last two or three days to say that London is buzzing with Lord Mountbatten had learned to make use of mass social rumours . . . that I was to be offered an immediate post movements , such as Fascism or Communism, to undermine abroad so as to remove us from being able to influenceLilibet repUblicanism. His mother insisted that history could only be [Queen Elizabeth] through Philip ....There also was the understood from the study of such movements. Lord Mount­ view that I would be passing on extreme left-wing views batten, in tum, stressed this in the education his two proteges, from you !" To which Edwina replied, " ...How wicked ! Prince Philip and Prince Charles. . . . You always stress the point about my politics. . . . I have This view led him to sympathize with-his father's stated endless worryings about your links with people such as Peter belief that the Russian Revolution was largely a consequence and supposedly Communist sympathisers from many who of his great-aunt, Princess Alix of Hesse, the wife of Czar appear to think I am Right Wing compared to you!" Nicholas II , having gone "crazy." The grain of truth in this Not only was Murphy a member ofwhat the British Secret is that the Czarina had embraced the most hideous, Pan­ Intelligence Service then dubbed "the Homintern," but Pri­ Slavism of the Raskolniki ("Old Believers"), as epitomized vate Eye alleged in 1979 and 1980 issues that Mountbatten by Rasputin , which was the historical basis of Russian-style, was as well. This followed a 1975 article in the Daily Mirror Mir Communism. What Lord Mountbatten never acknowl­ linking Mountbatten to "a homosexual ring centred on the edged was that this caused the Bolshevik Revolution by pit­ Life Guards' barracks in London." Lord Mountbatten's re­ ting the Tsar against Count Sergei Witte's plans to Wester- sponse that he spent his married life hopping in and out of

50 International EIR August 29, 1986 bedwith various mistresses hardly disproves the allegation. chess of Windsor throughout their life in exile. Entire books have been written on the links between this Next to Edward VIII, Mountbatten was the closest, among Homintern and the Cambridge Apostles, advised by Lord his royal cousins at this time, to George, the Duke of Kent, Russell, and through which Sir Anthony Blunt (the future who shared his brother Edward's Nazi sympathies to such a Adviser on the Queen's Drawings and Pictures) would recruit degree that he traveled with him into exile for his meetings H. A. R. "Kim" Philby, Guy Burgess, et al . as Soviet agents with Herman Goering and other ranking Nazis. George's a decade later. All that is known of this Cambridge commu­ death in a mysterious Royal Air Force crash during World nist ring while Mountbatten was at the college, is that it had War II has been seen as an attempt to close this chapter of the sufficient influence upon him that Lord Mountbatten, the House of Windsor's history. future First Sea Lord and Chief of the Defence Staff, argued in the Junior Acton Club to have Britain's fleet turned over Education of a prince "lock, stock and barrel" to Robert Cecil's proposed League Lord Mountbatten, who often counseled Prince Philip of Nations. and Prince Charles to learn from Edward VIII's errors, sent them for high-school equivalent study to Gordounstown, Great Britain's would-be Fuhrer whose founder, Kurt Hahn, also initiated the United World It was at Cambridge that Lord Mountbatten befriended College (UWC) project which Lord Mountbatten chaired the future Edward VIII. "Dickie" Mountbatten accompanied from 1968 until his death. Mountbatten brought Armand the Princeon his early colonial tours , including trips to Aus­ Hammer into this project in 1979, and Prince Charles, having traliaand India. In Madras in 1921, Mountbatten met a friend taken Mountbatten's post, got Hammer to build the Armand of his sister Louise, the Russian-born Baroness de Kuster, Hammer UWC in Montezuma, New Mexico. who was a member of Okhrana agent Mme . Blavatsky's Only a relative of King Edward VIII could call Hahn a Theosophists, then run byBritish Fabian Society co-founder "leading German anti-fascist," as the British royal family Annie Besant. Mountbatten became deeply indoctrinated in does. Hahn was an adviser to Colonel von Hiiften, when he this Satanic theory, which played a major role in the Nazis' worked with General Ludendorff to assist in the "sealed­ own inner mystical religion. train"operation that sent Lenin from Switzerland to lead the It was also on this trip that he became engaged to Edwina Bolshevik Revolution-a project foisted on the German Im­ Ashley, the daughter of Major Ashley (later Lord Mount perial Government by Alexander Helphand ("Parvus"), an Temple), who "was one of the leading partisans in this coun­ agent of the"last Doge of Venice," Volpe di Misurata. Hahn try of the Nazi regime ," according to Brian Connell's Mani­ remained a public apologist for Hitler up through Crystall­ fe st Destiny. Edwina was also the principal heiress of her nacht. according to a biography for which Prince Philip wrote grandfather, the Hofjuden banker Sir Ernst Cassel, who had theintroduction. been the banker for King Edward VII. Major Ashley would Lord Mountbatten was partof a select group that advised become notorious, later, as chairman of the Anglo-German Queen Elizabeth II to send Prince Charles to Cambridge. His Fellowship, whose patronwas the Princeof Wales and among competence as an adviser on such matters has been called whose staff was "Kim" Philby, the future KGB general. into question by those who point out that Mountbatten's own Through the Duke of Saxe-Coburg-Gotha, the Anglo-Ger­ daughter, Lady Pamela Hicks, described herself as a com­ man Fellowship sought an open alliance of Great Britain with munist. Indeed, in his 1985 biography, Charles and Diana. Nazi Germany against Russia. The Prince of Wales was the Ralph G. Martinstates that Prince Charlesspent his evenings "best man" at Mountbatten's wedding. at Cambridgein all-night "rap sessions" with Hylwel Jones, It was not his proposed marriageto Mrs . Wallis Simpson, "a socialist who had read Karl Marxwhen he was fourteen." but Edward VIII's support for an Anglo-Nazi military and So great was Jones's influencethat, Martinstat es: political alliance, together with his plans to stage a coup "One evening Prince Charles knocked on Rab Butler's against Parliament that would establish him as Fuhrer of door to ask the Master of Trinity [College, Cambridge[ a GreatBritain , that was the basis for a faction in the Houses question: Would it be all right for him to join the University of Lords and Commons forcing his abdication. Mountbatten Labour Club? 'Hell, no!' said Butler, carefully explaining reportedlywent so far as to seek support through his friend, the absolute need for the Prince to maintain political neutral­ John Strachey, a co-founder of Sir Oswald Mosely's fascist ity ...." New Party , for the intervention of British communist Claud In Ziegler's biography, Mountbatten. it is noted that the Cockburn, editor of The Week, to write articles on behalf of communist homosexual Peter Murphy had similarly influ­ Edward VIII during the abdication crisis. Mountbatten was, enced Prince Charles's mentor, "Uncle Dickie," to join the by this time, Edward's naval aide de camp; upon his abdica­ Labour Partyat Cambridge. Later, Mountbatten was reported tion, Mountbatten offered to accompany the now-Duke of to say after meeting the new Soviet-linked British Labour Windsor into exile, where the Duke continued his high-level prime minister, Harold Wilson, that he was "very im­ contacts with the Nazi leadership. Mountbatten remained the pressed ....All the Labour Ministers have a higher 'I.Q.' British royal family's principal liaison to the Duke and Duc- thanthe Conservatives."

EIR August 29, 1986 International 51 Vatican by Augustlnus

False pacifists march on Assisi The little squad was led by about Neo-Malthusians, masons, oligarchs, and Russian Orthodox 10 people in all. Among them was a prelates conspire to sabotage the Pope's intentions. young Franciscan, Friar Domenico Dominici, and four Ethiopians. Brother Domenico in fact,· when not marching, takes careof Ethiopian ref­ ugees in Italy. The band set out on Aug. 3 and reached the capital after a OnJan. l, 1986, the Pope, address­ sage to Ronald Reagan, by whom they few days. There it was received by the ing the world from St. Peter's in Rome werereceived , and to YuriAndropov , premier's undersecretary, Giuliano on the World Day of Peace, de­ Soviet partychief. Amato, who, after listening to their nounced the "false pacifists" saying: In Moscow, the Franciscansgot a proposals, pronounced himself per­ "There are false proclaimers of peace rather chilly welcome; Andropov had plexed. No one received them in the in the world. They say peace, but they died, and they were not received by Vatican. do the opposite." He added: "We must then-Sovietparty chief Chernenko, so Despite the miserable outcome of becertain that thesame desire for peace they celebrated a mass and went back the "anti-nuclear pacifistmarc h," it got be present everywhere, and the same home. Next, on May 17, theFrancis­ huge attention from the media, espe­ relationship toward it." cans invited to Assisi the Soviet am­ cially the pro-communist media. The A few days later, at St. Paul's ba­ bassador to Italy, Nikolai Lunkov, and real aim of the march was to brand silica, the Pope announced his propos­ the number-two man in the U.S. em­ Assisi, weeks before the meeting or­ al for a Prayer Encounter for Peace bassy in Rome, William Holmes, and ganized by the Pope, as the site of with representatives of all the reli- had them sign a joint document in fa­ Catholic-Marxist dialogue, a center of . gions of theworld , to be held in Assisi vor of peace. the anti-nUclear pacificism dear to next Oct. 27. For thePope , Franciscan activism Moscow's demagogues. Confirming For many observers , the Pope's had gone off the religious track. John thisplot is theplan of the international initiative represented a project to claim Paul n sent a papal observer to the World Wildlife Fund to hold its own for himself all serious discussions on "General Chapter" of the Franciscan conferencein Assisi on "Conservation peace and to thus put an end to the order witha letter to the 135 delegates, and Religion," from Sept. 24 to 29. hegemony exerted by the communist calling the Orderto "a revisionof the­ Among the participants are Prince camp on this topic. ory and practice." Moreover, manyof Philip, Duke of Edinburgh, a noted It was no accident that the city of the more moderate sectors of the Or­ freemason, and the Aga Khan. The Assisi was selected as the site of the der did not sharethe ultra-radical line sessions will be coordinated by the historic meeting. There , perhaps, more of the general superior, the Californi­ World Council of Churches, known than any place else, the word "peace" an John Vaughn. But Vaughn, pro­ for its close ties with the Russian Or­ has been abused. In Assisi in October moter of monastic-Marxist dialogue, thodox Church and Soviet intelli­ 1983, the keeper of the Monastery of turneddeaf a ear. gence. St. Francis, Father Vincenzo Coli, in­ This time, the solemn initiative of In recent days, it became known vited the leader of the Italian Com­ the Pope, thePrayer Encounterat As­ thatthe Russian OrthodoxChurch will munist Party, Enrico Berlinguer, to sisi, seems to have createdfear among sendMetropolitan Filaret to thePope 's dinner. the"false pacifists. " This may bewhat Assisi En�ounter. Filaret has distin­ It was not the first time that the prompted the minor friars of Assisi to guished himself for the interviews he enterprising Franciscan used religion organize a march fromAssisi to Rome, has given to Italian dailies attacking to promote dubious ideological proj ­ together with the ecologist Prince Ni­ thePope and President Reagan's Stra­ ects . A few months earlier, Father cola Caracciolo;Edoardo Agnel li, the tegic Defense Initiative. Coli, together with such neo-Malthu­ son of financier Giovanni Agnelli; the Neo-Malthusians, masons, oli­ sian entities as the Club of Rome, had ex-leader of the Maoist gang "Lotta garchs, and Russian Orthodox prel­ drafted the famous Gubbio Charter, Continua" Alexander Langer (known ates seem tobe in cahoots to try totum with an explicitly anti-life philoso­ for his pro-terrorist stance); and a di­ . the Encounter at Assisi into an event phy. In 1984, a delegation of Francis­ rector of the Communist Party's rec­ totally opposed to what the Pope had cans left Assisi to bring a peace mes- reation association. ARC!. in mind.

52 International ElK August 29, 1986 Andean Report by Val erie Rush

No to 'narco-tolerance' they are being watched, Minister Venezuela'sjustice minister has taken off the gloves against Manzo Gonzalez had spoken to the high-level drug corruption . Council of Generals of Venezuela's SuperiorWar College ofhis resolve to "redouble and triple our efforts" against the drug mob and its allies, the national and international drug banks. Said Manzo Gonzalez, "Anyone from a slum dweller to the most respected A fight has broken out inside Ven­ the issue of corruptjudges becauseof bankerwho launders the dollars com­ ezuela over whether widespread drug the "provisional" release in Colombia ing from drug sales can participate in corruptionin high places will continue of cocainetrafficker Jorge Luis Ochoa thiscrime ." to be tolerated. Speaking forthe anti­ on Aug. 15. Ochoa, who had been Thejustice minister added, "We drug faction is Justice Minister Jose sentenced to two years in jail for ille­ have never seen a banker with a gun Manzo Gonzalez; whose keynote ad­ gal smuggling of bulls , had postedbail in his hand assaulting a citizen; if that dress to the Aug. 15- 19 South Amer­ and, as expected, disappearedfor parts happened, I think it would be an ex­ ican Conference on Public Security unknown. Ochoa is not only one of ceptional case. . . . But theremany are held in Caracas was a powerful call the most infamous of drugtraffickers bankers , here and elsewhere in the for crushingthe drug trade and its ter­ internationally, but has beennamed as world, who have agreements with the rorist counterpart. one of the authors of the April 1984 narcotics traffickers in which they get That conference, at which police assassination of Colombian Justice the revenue from cocaine sales as forces from across lbero-America Minister Rodrigo Lara Bonilla. He is commissions; that is, they are part of unanimously agreed that nothing less sought by U. S. authorities as a key the criminal apparat and organiza­ than a collaborative continent-wide link in the drug-smuggling chain that tion." Manzo was putting on notice war against the drug trade could hope includes Nicaragua's Sandinista gov­ those Venezuelans who believe that to win, set the tone for the battle now ernment. their white collars and Gucci shoes unfolding in Venezuela. In fact, judges acrossthe continent disguise theircriminality . The earlyAugust acquittal on drug have been targeted as a weak link in It is well known that thereis grow­ charges of multi-millionaire business­ the fight against drugs by the interna­ ing discontent within military and re­ man Ciro Martinez Marquina, along tional dopemafia. In Colombia, judges lated law-enforcement circles inside with fiveof eight others imprisoned in have been threatened, tortured, and Venezuela over theconstant sabotage connection with a multi-million dollar murdered by the score to create a ma­ of their anti-drug efforts. The Nation­ cocaine bust linked to the Francisco fia-controlled environment in the al Guard of Venezuela, described as Ocando paz ring, set off a public furor courts. When enforcementof a U .S.­ the institution which "wages war in over the evident corruption of the pre­ Colombia Extradition Treaty threat­ peacetime" against such enemies of siding judge. Justice Minister Manzo ened to disrupt that controlled envi­ the nation as the drug mafia and ter­ used the occasion to send a public let­ ronment, the mafia sent in the narco­ rorism, has announced that, for the ter to the Attorney General's office, in terrorist M-19 to murder half the Su­ first time, they are uncovering sub­ which he protestedthe sabotage of the preme Court justices in last Novem­ stantial cultivation of drugs-mari­ government's anti-drug efforts . In his ber's Justice Palace atrocity in Bogo­ juana and cocaine-on Venezuelan letter, published in the press nation­ ta. territory. Some 900 hectares of both ally Aug. 16, Manzo demanded an In Venezuela, the case of Ciro drugs were recently uncovered in the immediate investigation of the affair, Martinez Marquina is hardly the first La Perija region along the Venezuela­ theassignment of a special attorney to incident of such "narco-tolerance" Colombia border, and the National the case, and recommended a change among judges. In fact, the phrase Guard commander in the region, Gen. in venue of drug trialsto avoid future "narco-complacence" appears regu­ Corredor Ruiz; has asked for logisti­ such incidents. The judge's decision larly now in the national press of that cal support to patrol the 238,000 hec­ has since been appealed by the Attor­ country. tares theof mountain range, "which is ney General's office. Just before issuing his public being eyed by the international drug Attentionis especially focused on warning to Venezuela's judges that trade."

EIR August 29, 1986 International 53 N orthem Flank by William Jones

AIDS debate breaks out in Norway placed by . someone prepared to deal A leading doctor has proposed a classical public-health with the AIDS threat more effective­ approach to the crisis: universal testing . ly. Fagerhol pointed out that volun­ tary testing had not succeeded in get­ ting more than 5% of the high-risk groups to take the test, thereby creat­ ing a serious threat to the rest of the , population. "They are afraid that the If the devil himself had developed impression that the medical authori­ results of the tests will be positive, and a means to destroy mankind, the situ­ ties had things under control. The therefore will simply not allow them­ ation could not be worse." This is the number of people infected was report­ selves to be tested," said Fagerhol. way Magne Fagerhol, superintendent ed in the hundreds. Now it is estimated In his letter to the Health Services, of the Blood Bank and Epidemiology that there are approximately 2,000 Fagerhol a;}sorecommended that it be Clinic at Ullevaals Hospital in Oslo, carriers of AIDS-and that is proba­ considered a felony, equivalent to at­ characterized the growing threat of an bly a gross underestimate. The Health tempted murder, if anyone who has AIDS epidemic. On July 22, Fagerhol Service estimates that, at the present AIDS does not inform his sexual part­ wrote a letter to the Department of rate of spread, there will be 100,000- ner that he or she is infected. A few Health, criticizing the nonchalant 200,000 cases by 1990-1991. days later, the Norwegian Department manner in which the department was Fagerhol, in an interview to the of Justice issued the results of a study treatingthe AIDS threat. Stockholm-based Radio Free Swe­ which indicated that there is already Fagerhol recommended that the den, stressed that the AIDS epidemic on the books a law which would allow entire population of Norway be AIDS­ not only threatened the "high-risk prosecution of anyone who with tested twice a year. Apart from the groups," but all Norwegians. Manda­ knowing intent infects another person danger of infection outside the so­ tory testing of the entire population of with a contagious disease. It was in­ called high-risk groups , Fagerhol rea­ Norway, a little over 4 million people, dicated that this law could be applied soned that mandatory testing would would cost 100-300million Norwegi­ to an AIDS carrier. Such a crime is forestall any objection on the part of an Crowns ($14-30 million) according punishable with up to eight years in the more vociferous homosexual to Fagerhol; treatment of AIDS pa­ prison if tl:Ie person so infected dies, groups that such measures would be tients by the year 1991 would cost up and up to five years otherwise . discriminatory . Fagerhol's letter was to $3.5 billion. The Fagerhol intervention has published on July 25 in the daily eve­ The cost of testing would be sparked off a political debate, and the ning paper Dagbladet, equivalent to a two-week national AIDS question will come up for dis­ Some weeks earlier, the Oslo tab­ strike at the state-owned liquor stores cussion when Norway's Parliament loids hadsparked a minor uproar, when or about one beer for every person in reconvenes in September. Norwegian it became known thatthe superintend­ Norway. "This would be a reasonable Prime Minister Gro Harlem Brundt­ ent of one of the local hospitals had price to pay," said Fagerhol, "espe­ land, a physician by profession, was had patients suspected of being drug­ cially if you consider that without such interviewed on television concerning users or homosexuals AIDS-tested a measure, the treatment of AIDS pa­ the Fagerhol letter and the position without their knowledge. If the test tients in 10 years would cost us just as taken by her health director Mork. proved positive, the patients were in­ much as an entire year's health budg­ BrundtIand said that she did not nec­ formed of the results . The doctor was et." essarily agree with the director of the accused of using unethical methods The Fagerhol letter was especially Health Serwices, and that she consid­ and wanting to introduce fascist meth­ critical of the director of the Health ered AIDS a far more serious problem odsinto the health services. Services, Torbjorn Mork, who has in­ than was generally recognized. She Publication of the Fagerhol letter sisted on keeping AIDS testing on a set up a committee to investigate the further heated up the issue. Previ­ voluntary basis, and has tried to issue and to make recommendations ously, the whole AIDS question had squelch any talk of mandatory testing. for an eventual change of government been treated somewhat peremptorily Fagerhol recommended that Mork policy. Possible policy changes would in the Norwegian press, giving the consider resigning his post and be re- then be voted on by Parliament.

54 International EIR August 29, 1986 Report from Bonn by RainerApel

A united ticket for the conservatives? security affairs officialin West Berlin, Will Strauss walk out of Kohl's coalition and seek a conservative a staunch conservative who had long electoral partner outside Bavaria? Maybe he will. beentargeted for ouster by leftists and members of the anarchist under­ ground in the city. Peter Lorenz, also from West Berlin, will be ousted from his post as undersecretary in the Ger­ man Affairs Ministry, because he is ' On Ian. 25, 1987, elections for the and state elections afterMarch 1983, known to be a critic of Foreign Min­ next national parliament in West Ger­ causing a 5%-12% drop in CDU votes. ister Genscher's friendly policy to­ many will take place. A good portion The party's liberal leadership should wards the East German regime of Er­ of voters, between 5% and 12%, have have seen the writing on the wall, but ich Honecker. tunied their back on Chancellor Hel­ it didn't. The head of a major opinion Many other such examples could mut·Kohl's party , the CDU (Christian polling institute explained this para­ be given. The main question now is, Democrats) since 1983 because of his dox to EIR in the late summer of 1985: how the various conservative voter appeasement of liberalism. More and "Obviously, the CDU leadership even blocs of the CDU will react in the face more voters dislike Kohl's policy of welcomes thedesertion of the conser­ of these purges. Manyhopes have been sacrificing one conservative position vatives, because they think that re­ set on Franz-Josef Strauss, the chair­ afterthe other. lieves them of many problems. With­ man of the CSU (Christian Social The role of the liberal Free Dem­ out the conservatives, they believe Union), theindependent Bavarian state ocrats (FDP) has become dispropor­ things are less complicated." section of the Christian Democrats . tionate in the coalition government that Indeed: Without the conserva­ Will he, who has often attacked the was formed after the last elections in tives, liberalized politics could pro­ Genscherites on key issues such as March 1983. Consequently, Chancel­ ceed much faster among the Christian Libya, the sm, Berlin, and the sabo­ lor Kohl's views have been deter­ Democrats, This assumption became tage of anti-riot and anti-terror laws, mined by FDP Foreign Minister Hans­ a policy in 1985 and throughout this have the courage to present a conser­ Dietrich Genscher, and the conserva­ year. Preparing for the national elec­ vative election alternativeto the CDU tive wing of the CDU is considered a tions in January 1987, conservatives "Genscherites ?" nuisance, a source of constant trou­ of the "steel-helmet group" were On Aug. 14, the CSU walked out bles. kicked offCDU slates. In most cases, of the joint program commission with In particular, the conservatives are those who were kicked off were the Christian Democrats. This means viewed as an obstacle to a continua­ staunch opponents of Foreign Minis­ that each party may run on a program tion of the policy of appeasement to­ ter Genscher's appeasement policy. of its own in the 1987 elections. But ward the Soviets. They are viewed as Thus, the national president of the will Strauss runoutside of the state of too pro-American, too much oriented German Refugee Association, Her­ Bavaria? One of Strauss's closest ad­ to NATO . They are considered trou­ bert Hupka, was sacrificed, and other visers, Prof. Guenther Rohrmoser, ble-makers against disarmament, and prominent conservatives such as Hans called on the CSU to walk out of the as fanatical supporters of the Ameri­ GrafHuyn and Ludwig Graf Stauffen­ coalition government itself, should can Strategic Defense Initiative. They berg . They were replaced by liberal Chancellor Kohl decide to keep are , all in all, considered a "relic from Christian Democrats . The same hap­ Genscher as foreign minister. Rohr­ the Cold War period. " pened to Werner BroIl, the party's moser urged Strauss: "The CSU must The liberal wing of the CDU, spokesman on domestic security, who either expand nationally, or seek a which works with the FDP and has been calling for tighter anti-terror­ partner to agree with outside of Ba­ Genscher and is appropriately char­ ism laws. varia." This advice has posed the acterized as "the Genscherites," keeps Several other prominent Christian question to many whether Strauss battling with the "steel-helmet group," Democrats were or are going to be would collaborate with the most pow­ as they call the conservative wing. ousted from their posts. One of the erful political formation among Ger­ Many conservatives took revenge most shocking affairs in this respect man conservatives, the "Patriots for by deserting the CDU in all municipal was the ouster of Heinrich Lummer, Germany." Maybe he would.

EIR August 29, 1986 International 55 International Intelligence

the cultural ministry, Academies of Arts and ruvian government's alleged "mistreat­ Can Moscow beat the We st Sciences, the Soviet Peace Council, and the ment" of the Shining Path (Sendero Lumi­ extreme Russian-nationalist Society for the naso) terrorists, who have ravaged the na­ in 'cultural warfare'? Preservation of Historical and Cultural tion of Peru, killing thousands of innocent Monuments. people. Top Russian officials have announced the The Greens' press release came imme­ imminent formation of a new Soviet Cultur­ diately afterWest German Minister for Eco­ al Fund, whose purpose is officially de­ Is Austrianparty a nomicCooperation Jiirgen Warnke returned scribedas the promotion of "the cultural and from Peru; where he had made a commit­ spiritual richness" of Russia, and the estab­ te"orist money conduit? ment for West Germany to supply equip­ lishment of enhanced "cultural ties to coun­ ment for Peru'santi-drug fight . The Greens, tries abroad." The obscure, 15,OOO-member Austrian a neo-Nazj formationriddled with East bloc Intelligence analysts believe that the CommunistParty is the richestparty in Aus­ agents, stated: "The Federal Republic of Fund is aimed against the expanding influ­ tria, with an estimated annual turnover of Germany, foryears, has been tlfe main sup­ ence of Lyndon H. LaRouche, Jf., who ar­ 500million Britishpounds-sterling, or, about porterof Peruvian state terrorism," and then gues that the superiority of Western, Augus­ $750 millionper year, according to the Aug. listed German weapons deliveries to the Pe­ tinian culture is the basis for the West to 21 London Guardian. ruvian military and police forces over the defeat Soviet plans to achieve world domi­ The money comes from a business em­ last six yellifS . nation. The committee mandated to formthe pire, based on controlover an oil company, The Greens began their anti-Peru cam­ new Soviet Fund contains numerous "La­ Turmol, which the Communists gained fol­ paignin October 1985 (two months afterthe Rouche watchers," notably journalists who lowing a trial in July in which the star wit­ inauguration of President Alan Garcia), os­ specialize in published attacks on the U.S. ness for the party was the Soviet ambassador tensibly protesting the arrest of a German political figure. in Vienna. Turmol controls 40 gas stations national fot terrorist activities. They inten­ The creation ofthe Fund was announced in Austria, and monopolizes 80% of the sifiedtheir opposition to the Garcia govern­ on Aug. 7, the same day that the Russian country's domestic heating-oil market. ment duringthe Shining Path terroristprison cultural journal Sovietskaya Kultura pub­ In May of this year, the party hosted a revoltin June. lished a front-page attack on LaRouche (see meeting of communist parties from several excerpts , p. 41). The newly appointed chief countries of Western Europe in Vienna, at Colombian te"orists editor of Sovietskaya Kultura, A. Belyayev, which a strategy of collaboration with Eu­ is a member of the initiating committee for ropean "environmentalist" and "green" or­ assault laborleaders the Soviet Cultural Fund. ganizations was worked out. Other committee members include A. Is the Austrian Communists' $750 mil­ The offices of the Schiller Institute Trade Chakovskii, the editor of Literaturnaya lion a giant war chest for the Greens and Union Commission in Bogota, Colombia Gazeta; LitGaz commentator and KGB of­ other terrorists? were attackedin the early morning hours of ficialFyodor Burlatskii (author of attacks on Aug. 18 by two unknown persons, who stole LaRouche and the U.S. Strategic Defense a typewriterand scrawled slogans of the M- Initiative); KGB-linked writer Julian Se­ German Greens: 19 terrorist group on the office walls. myonov, another "LaRouche watcher"; The Schiller Institute is a cultural insti­ Russian Orthodox Church Archbishop Pitir­ Stop aidto Peru! tution which promotes an intellectual ren­ irn of the Moscow Patriarchate Publishing aissance, attacks the drug trade, and works Department; Raissa Gorbachov; and Val­ TheGerman Green Party has demanded that to achieve a new international economic or­ entin Falin, former ambassador to West West Germany reconsider all economic aid der against usury. Germany , now an official of the Central to Peru, stop all arms exports to and military The attack on the Institute comes in the Committee's information department. cooperation with that country, and recall the context of a public slander campaign against The idea for the Fund was put forward West German military attache from the em­ it being runby mafia-linked Victor Acosta, at a recent Soviet Writers' Union Congress. bassy in Lima, according to an officialGreen president of the Union of Colombian Work­ According to the Aug. 8 edition of the So­ Party press releaseput out on Aug. 8. ers (UTC), and Julio Roberto Gomez, pres­ viet government newspaper Izvestia, the The radical ecologist Greens, contrary ident of the General Federation of Colom­ committee includes cinematographers, mu­ to their occasional professions of pacifism, bian Workers (CGT), under orders of the sicians, architects, institutes and organiza­ are supporters of Germany's terrorists, and American Institute for Free Labor Devel­ tions with "culturalties to countriesabroad ," issued the currentrelease to protest the Pe- opment (AIFLD) . Roberto Gomez and other

56 International EIR August 29, 1986 Briefly

• THE PUGWASH GROUP of East-West "crisis managers" will hold individuals connected to the CGT have said occupied territories of Gaza and the West a closed-door meeting in Budapest, that their intention is to smash the Schiller Bank are moving closer to agreement with Hungary Sept. 1-6. Phase two in Institute, before it grows any larger. Egypt and Israel. Pugwash's autumn organizing plans One of the Schiller Institute's interna­ Hanna Siniora, chief editor of the Pal­ will be a conference on "convention­ tional coordinators is Pedro Rubio, the sec­ estinian newspaper AI-Faj r, recently broke al forces" in Pisa, Italy scheduled for retary general of the Colombian tradeunion ranks with the PLO leadership by meeting October. federation Utraboc . One of his subordi­ Vice-President George Bush during the lat­ nates, Utraboc treasurer Gonzalo Casas, was ter's visit to Israel. "Maybe he was permit­ • THE GREEK GOVERN­ brutally assaulted on Aug . 20 by UTC head ted by someone in the PLO to do it," said a MENT is refusing to approve the Victor Acosta and an accomplice. Casas had source linkedto the Israeli government. Such posting of any more Russian monks gone to Acosta to ask him to repay a debt, Palestinian leaders , who live in the occupied to the Greek Orthodox monastery at and was suddenly set upon by the two men territories, are the ones upon whom Israeli Mount Athos, the London Daily Tel­ and pistol-whipped about the head and legs. officials seem to be counting for initiating egraph reported Aug. 20, citing gov­ Utrabocis the Bogota-based regionalor­ negotiations. PLO chief Yasser Arafat, ernment sources in Athens. "Greece ganization which abandoned the corrupt meanwhile, is reported to be going to Egypt is reluctant to grant approval because UTC federation to join the new unified labor in the immediate future. of securityconsideratio ns, the sources central under former labor minister Jorge said. A Russian request to set up a Carrillo (see Feature, pp . 28-37). consulate in Salonika is not being met So. Africa'SBotha: for the same reason." Mount Athos is We won't commit suicide a center for cultural and political in­ telligence warfare operations. Mubarak, Peres to South African President P. w. Botha, in his holdsummit in Egypt opening speech to the congress of his ruling • SOVIET KIRGIDZIA is a cen­ National Party on Aug. 14, vowed that he ter for drug-production in the Israeli Prime Minister Shimon Peres an­ would take all necessary measures to ensure U.S.S.R., the Moscow weekly Lit­ nounced on Aug . 20 that he and Egyptian that his country is not destroyedby econom­ eraturnaya Gazeta reported in Au­ President Hosni Mubarak would hold a ic sanctions from the West, or by interna­ gust. Some 300Communist Party of­ summit meeting in Egypt during the first tional demandsfor concessions to terrorists. ficials have been caught red-handed half of September. This will be the first He and other government spokesmen operating a "private" drug market. meeting between the two leaders . have made it clearthat, if pushed to the wall, Boris Yeltsin, head of the Moscow The meeting is "phase two" of Peres's South Africawill be forced to take counter­ party , admits that there are 3,000 new Mideast peace initiative, which began sanctions against the West, including a pos­ knowndrug addictsin Moscow alone. with the historic July 22 meeting with Mo­ sible debt moratorium. rocco 's King Hassan. Peres has advanced Botha renewed his offer to the Western • WOLFGANG ROTH, a leading the idea of a "Mideast Marshall Plan," to nations and his African neighbors to con­ left-wing Social Democrat in West underwrite a peace settlement witheconom­ vene an international conference on eco­ Germany , took up Moscow's charges ic development programs for the region. nomics and security in the region; but at against Chancellor Helmut Kohl on Peres,in his announcement of the meet­ present, the likelihood of such a conference Aug . 21, accusing the Bonn govern­ ing on Israeli television, specifiedthat Egypt does not appear great. ment of violating the nuclearnonpro­ would first have to name an ambassador to Although the reform-minded President liferation treaty by secretly working Tel Aviv. Cairo withdrew its ambassador in has sought to removeracial barriers in South on the manufacture of a "nuclear 1982, to protest the Israeli invasion of Le­ Africa, he has moved too slowly to allow bomb." banon. moderate black leaders to outflank the radi­ If the upcoming summit opens the way cals . Originally, the President was expected • ALL FOUR of Peru 's labor con­ for a regional Mideast peace conference, as to announce new constitutional reforms at federations on Aug. 20 offered Pres­ is hoped, what will the role of the Palestine the current party congress, toward actual ident Alan Garcia theirsupport in his Liberation Organization be? Israeli Labour power-sharing by the black population. This battle against the International Mon­ Party circles close to Peres and Economics did not occur, however, and black moder­ etary Fund, which on Aug . 15 de­ Minister Gad Ya' acobiestimate that the PLO ates like Chief Mangosuthu Buthelezi feel clared Peru ineligible for further leadership is drifting rapidly toward Syria, unable to enter into national negotiations credit. while leading spokesmenfor the PLO in the with the President as a result.

EIR August 29, 1986 International 57 �TIillNational

Moscow deploys Congress against the President

by Criton Zoakos

In his nationally broadcast radio statement of Aug. 16, Pres­ salvage their delusions of the long-evaporated political uni­ ident Reagan declared war against the u. S. House of Rep­ verse of "detente" and arms-control agreements. For the resentatives, on grounds that the defense bill they had voted President and those close to him, this battIe is the last chance the previous day had met all the requirements of the Soviet for rallying this countryto face up to the gravity of the Soviet government's bidding. A livid President Reagan identified military threat. For the Soviet command, pitting all of their the five specific Soviet military objectives in favor of which overt, covert, direct, and indirect influences and assets in the House had voted , and announced to the American people, Congress against Reagan, is the only response they could "Make no mistake: The House defense bill is a reckless as­ compose to President Reagan's ingenious July 25 letter to sault upon the national defense of the United States." General Secretary Gorbachov. He also pointed out that "Soviet military planners must In that letter, the President formally placed on the nego­ be astonished at the blows the House delivered this week to tiating table his generous offer to share with the Soviets our America's national defense ." rapidly advancing Strategic Defense Initiative technology, Finally, he vowed, "While it is my custom not to say and further proposed a joint or parallel deployment of SDI whether I will veto a bill until it reaches my desk, if the systems. The Soviet command, as of this writing, is still in a defense budget arrives in anything like the present form , it quandary as to how to respond to this offer. Their principal will be vetoed. And national security will be the issue in reaction so far has been to pull those strings of influence and 1986." call in those available politiclll "chits" that eventually pro­ Thus, finally, the real issue of the 1986 congressional duced the Aug. 15 congressional vote , which in turn pro­ elections has formally become exactly that issue which Ex­ voked the President's wrath. ecutive Intelligence Review had warnedduring July 1985 had to be brought forward for the electorate to decide, whether Forces and moods behind the issues the West were to have a chance of countering the Soviet Even though the President said that "national defense" military challenge. will be the issue for 1986, neither he, nor the Soviets, who Following President Reagan's "declaration of war" on are watching the situation closely, believe that this alone will congressional liberals and pro-Soviet arms-control apolo­ determine how the American peoplewill vote in November. gists, his opponents, including the Democratic chairman of Many deluded congressmen may take this narrowview of the the House Armed Services Committee and many Republi­ matter, and many may also believe that they can "buck" the cans of the Senate, indicated that they are ready to fight him President's authority and influence at the polls on grounds on the defense issue at the November polls. Privately, the that he is a "lame duck" President. Those who proceed on President announced his intention to personally campaign such calculations are: a) completely out of touch with the against anti-defense incumbents around the country. Thus, "sea change" in the national mood, b) underestimate the thefight has been joined. political cunning of President Reagan, and c) are likely to be For the liberals of both parties, it is a last ditch effort to out of a job in November.

58 National EIR August 29, 1986 Soviet observers of the American political process are that the 1986 election issue is Congress's sellout to Moscow more likely to focus their attention on how the American on matters of national defense. people are reacting to the War on Drugs and to the AIDS The Russians and their "McGovernReform" Democratic epidemic , and try to make their political deductions from dupes and allies could prevail in November only if a) there these observations. The important elements which will de­ were no LaRouche movement to threaten to reorganize the termine voting patterns next November are the broad shifts affairs of the Democratic Party and b) if Reagan begins to be in cultural and moral orientation now under way, rather than perceived as a "lame duck" President with waning ability to specific preferences on specific options for defense policy. influenceevents . Though "national defense" may be the overt, spoken issue of Regarding the firstof these two matters, it is known both the campaign, the way people will vote will be determined to this news service and also to U . S. governmentcircl es, that by the less visible and mostly unspoken changes away from Soviet officialsare involved in numerous efforts to derail the the liberal social agenda of permissiveness, abandon, and growing LaRouche movement. Among these efforts are in­ moral indifferentism toward the Soviet Union. cluded informal but officialrepresentation to both State De­ Soviet intelligence has been attempting to gauge these partment officials and to non-official leaders of the Liberal shifts in the American national mood both directly and indi­ Establishment, demanding that "something be done" about rectly, by watching closely the growing influence of the po­ LaRouche. Otherwise, Soviet agencies are being caught vir­ litical movement associated with 1988 Democratic presiden­ tually every day in instigating or participating in a wide tial candidate Lyndon H. LaRouche, Jr. Their estimate at variety of "dirty tricks" against the LaRouche movement, present is that LaRouche, at this time, commands somewhere from financialwarfare to frivolous legal assaults, attempts at between 15% and 25% of Democratic voters, easily the larg­ frameups, and so forth . est single "constituency" within the Democratic Party. To Respecting the prospects of a "lame duck" Rea:gan pres­ such observers, the present growth of theLaRouche influence idency: It appears that those anti-defense Democratic oppo­ portends that in any confrontationbetween President Reagan nents of President Reagan who are counting on a "lame duck" and liberal Democrats, the latter would not stand much of a effortto survive a confrontation with him, are going to wake chancethis coming November. up to a very sobering surprise: The drive to repeal the 22nd The Soviet Union's senior policymaking leadership, that Amendment of the Constitution, which prohibits third-term country's "old men," know well that the era of "detente" and Presidents, is much further ahead than most observers real­ "the arms-control process," during which they accumulated ize. During the early months of the year, the Republican theirpresent formidable strategic superiority, had been made Congressional Campaign Committee undertook an exhaus­ possibleonly because of the 1 %8 liberal-radical assault against tive feasibility study to ascertain whether it would be possible the traditional labor-farmer-minorities constituencies of the to repeal the 22nd Amendment, which eventually produced Democratic party, and because of the 1972 "McGovern Re­ the conclusion that, with the appropriate kind of leadership forms" in thatparty . The growth of the LaRouche movement from the White House, the repeal could be carried out in no into what Moscow now terms a "formidable force," threatens more than 90 days. to undo that political arrangement, upon which "the detente After the conclusion of this study and the relevant prep­ process" had depended. arations for a mass organizing drive through the Republican Hence, when Moscow decided to abandon all caution and Party, the Republican Congressional Campaign Committee instigate an identifiably "Made in Moscow" defense budget submitted, in the House of Representatives, a bill to repeal vote in the U. S. House of Representatives, it was taking the the amendment. This took place on July 28, exactly three risk of potentially sending its congressional assets and dupes days after President Reagan sent his SDI letter to General into their last "suicide mission." For Moscow, any Demo­ Secretary Gorbachov. cratic elected politician who is-committed to defending the If that amendment is eventually repealed when the new "McGovern Reforms" of 1972 as a matter of fundamental Congress comes in next January, President Reagan may or principle, is counted as a Moscow asset or potential asset­ may not decide to take advantage of it for himself. He will, whetheror not the politician in question knows thathe or she however, have the option of remaining open for the 1988 is so designated by Moscow. nomination, thus preserving his ability to dominate the pro­ The Soviets instigated the House vote of Aug. 15 because ceedings of the 1988 Republican Convention. As soon as the they needed it in lieu of a serious response to Reagan's offer July 28 repeal bill was submitted, both the Soviets and the of July 25 . However, this so-instigated vote has made the congressional Democrats were forced to readjust and begin "McGovern Reform" Democrats more vulnerable to the contending with the prospect of either a Reagan presidency LaRouche challenge in the Democratic Party . This vote also stretchinginto 1992, or a Regan-determined presidency until had the effect of finally provoking President Reagan into at least thatyear. This is the reason why nobody has, so far, publicly announcing on Aug. 16 what some 900LaRouche­ ventured to consider Mr. Reagan as a "lame duck" President, associated candidates have been saying since Jan. 1, namely, though manyhave been tempted to.

EIR August 29, 1986 National 59 finding a way out of the prison of mutual terror; it is an idea Documentation that helped bring the Soviets back to the negotiating table to Geneva. To gravely underfund sm is to place in jeopardyall our hopes for arms reduction. It is to leave America indefi­ nitelynaked to missile attack, whether by accident or design. President Reagan's These radical cuts in sm would permit the Soviet Union, which has been working on strategic defense for decades, to make strides at the expense ofthe United States. Aug. 16 radio address Finally, the House voted to deny us any funds to move beyond the limits of SALT II, even though SALT II was My fellow Americans, when I campaigned for the Presidency never ratified, even though the Soviet Union has violated its in 1980, I made a solemn commitment to do all in my power terms. What message is receivedin Moscow when a majority to restore to our country a national defense second to none. of the House votes to forceits own countryto strictlyobserve In thatelection, and again in 1984, the American people, I an expired and unratified treaty the Soviet Union has itself believe, gave me a mandate to do precisely that. Today, undercut? however, that commitment-andmany of the greatgains we Beyond this, the House voted to cut away at several of 've made together these past fiveyears-have been placed in the programs that are at the heart of this nation's strategic jeopardyby actions taken in the House of Representatives. deterrent:the land-based MX missile, theTrident submarine, Let me outline for you a few of the decisions which, if and the advanced cruise missile. Soviet arms negotiators permitted to stand, would pull the rug out from under our must be mystifiedtoday that U.S. legislators would give away arms negotiators in Geneva and eventually imperil the na­ in Washington what they have been unable to win at Geneva. tional security of the United States. First, the House voted to Soviet militaryplanners must beastonished at the blows the deny the U.S. Air Forcethe right even to test our small anti­ House delivered this week to America's nationalde fense. satellite weapon called ASAT. The ASAT is designed to Finally, the House mandatedthat 10% of countless mili­ destroy, in the event of a conflict, Soviet military satellites tary contracts be awarded without competition, on the basis that would guide Russian bombers and missiles to American of a quota for certain business. And this they call military targets. It is a defensive weapon, built to help protectthe men reform. It's a step in the wrong direction. and women of the U.S. armed forces at home and abroad. It's inexplicable to me how the House could deny us the right to even test this weapon, when a killer satellite weapon has long been deployed inside the Soviet Union. Soviet arms negotiators must be Second, the House voted to halt any nuclear test larger mystified today that U.S. than a single kiloton. If that vote is permitted to stand, all legislators would give away in testing to maintain the safety, credibility, and reliability of the U.S. strategic deterrent would come to an end. Has a Washington what they have been majority of the House forgotten history?In 1958, the United unable to win at Geneva. Soviet States agreed to a similar moratorium. Threeyears later, the militaryplann ers must be Soviets unilaterallysmashed that moratorium with the largest series of nuclear tests in history. It took us almost a decade astonished at the blows the House to discover what the Soviets had learned from those tests, delivered this week to Americas prepared in secret, even as the United States relied upon a national dlifense. Soviet promise. We must not make the same mistake again. Third, the House, by a single vote, refused to fund the chemical weapons we requested. If that vote is permitted to stand, the House will have increased the probability these Make no mistake: The House defense bill is a reckless dreadful weapons will one day be used. History has taught assault upon the national defense of the United States . It repeatedly that the best deterrent to such awful weapons is threatens our hopes for arms control and moves us back when both sides, not just one side, possess them. Hitler did toward an era and policies which the American people em­ not use his terrible gas weapons against the allies for a single phatically rej ected in the last two national elections. reason: He feared retaliation by the allies withthe same kind While it is my custom not to say whether I will veto a bill of weapon. until it reaches my desk, if the defense budget arrives in Fourth , the House voted to severelyslash our requestfor anything like the presentform, it will be vetoed. And national the Strategic Defense Initiative. But sm is not the only-or security will be the issue in 1986. not only, I should say-the great hope of this country for Until next week, thanks for listening, and God bless you.

60 National EIR August 29, 1986 u. s. Attorney We ld's war on defense by John Scot

Boston V.S. Attorney William Weld, already notorious for In point of fact, Weld's undercover operationcreated the his baseless prosecutions, will use his position as head of the crime. Weld built his case on tape recordings of plant shop Justice Department's Criminal Division, should his nomi­ floor conversations picked up from a microphone planted on nation be confirmed, to conduct a massive "Watergating" a disgruntledWaltham employee, and on batches of defective campaign against America's defense industries. This is now parts produced by the company. Weld's informant was the absolutely clear, based on Weld's stated "environmentalist company's own production inspector, and to ensure that evi­ peacenik" sympathies, his record in office, and sources close dence would exist for theV. S. Attorney's case, the inspector! to his office. informantrefused to inspect batches of flash suppressors that Over the last two years, in order to advance his political later became evidence in the case, according to the source. career, Weld fabricated a case of defense procurement fraud (Flashsuppressors are installed on the end of the barrel of the against a tiny New Hampshire machining company, Wal­ M-16 to prevent detection of the rifleman when the gun is tham Screw Co. , according to a source close to Weld's office, fired at night.) who assertedthat court records substantiate these charges. After treating the Bankof Boston with a "slap on the These disclosuresgive new significanceto Weld's prom­ wrist" for laundering billions in drug money, Weld unleashed ise before the Senate Judiciary Committee Aug. 13 to "take incredible rage and effort against an apparently innocent small personal responsibility" for "vigorous enforcement in the machining company. areaof defense procurement fraud." Weld told the committee Therationale for Weld's giving investigations of defense that "white collar and public corruptiona re my private agenda companies a high priority is simply becausethere is an arms items," and called for new positions of Assistant V.S. Attor­ buildup going on. In one interview, Weld's subordinate, ney for Defense Fraud to be created in every V . S. Attorney's Assistant V. S. Attorney Richard Steams, declared that de­ office. fense procurement fraud is "one of three key areas of prose­ Back in March, Weld announced that he was going to cution [in the Boston office] ...including narcotics." He devote much of the resources of the V.S. Attorney's office said that his office is now "focusing attention on companies in Boston to "prosecutions of environmental polluters ." In hiding costs of fixed-price contracts in research and devel­ responseto a hostile question, he was provoked into stating: opment and other overhead categories." Steams explained "I am an environmentalist terrorist. I was on the board of the density of recent cases, with the remark that "fraud fol­ trusteesof several environmental groups. " Before the Senate lows the dollars. There has been a big armsbuildup over the committee, he as much as admitted that he was going after past five years." defense industries because they are defense industries, not This would imply that fraud would concentrate among becausethey are engaged in wrong-doing. Weld promised to firms wanting to get into defense to make a fast buck. How­ "start with a definition of the problem: look at where the big ever, all the cases investigatedto date involve companies that defense contractors are, and see if there's fraud in those have been defense contractors for decades, particularlyWal­ [geographical] areas ." tham Screw, which began producing for the military during theKorean War. Fabricating the evidence To "get" the case against Waltham Screw, during a period Weld's record establishes that, should he find no "fraud of two months, Weld's agents sat in a van in a parking lot in those areas," he will create it. For example, Weld bragged near the plant, recording conversations picked up by the before the Senate Judiciary Committee on Aug. 13 about his hidden microphone. Sections of tape with comments like, "success" in jailing managers from two defense contractors "To hell with it, just do it that way," were patched together in New England, including Waltham Screw Co. plant man­ to produce plausible sequences of dialogue to substantiate ager George Olmsted, who is serving an 18-month prison the conspiracy charge,backed up by the partsthat the inform­ term. Waltham Screw, a company with six employees, and ant refused to inspect, according to the source. The jury in manager Olmsted were charged with conspiracy to manufac­ the case was directed to focus on listening to the tapes pro­ ture and deliver defective flash suppressors for the M -16 rifle. vided by the V.S. Attorney's office, and disregarded the

EIR August 29, 1986 National 61 substantial counterarguments presented by the company dur­ tions, reference material has been supplied to the Committee, ing the trial . Furthermore , the judge threatened to hold the which documents the information and leads therein. jury over if it did not rule immediately following the end of the trial. I. Money laundering and Weld's office has indicted six defense contractors since the Bank of Boston case January 1985. The companies include Hybrid Components, FACT: William Weld let the First National Bank of Bos­ which produced microchips for the Patriot anti-aircraft mis­ ton off the prosecutorial hook with a mere $500,000 fine, sile, space laser technology, and the B-1 bomber; Murdock which the Bank's annual report says had little effect. This Webbing, which has produced aircraft-restraining webbing amounts to 1/20 of one percentof the illegal transactons. for aircraft carriers since World War II; Gibson Motor and Contrary to common belief, William Weld never prose­ Machine Services, now bankrupt; and Aster Engineering, cuted the Bank of Boston fo r any violations of the law that which produces components for militaryaircraft engines. pertained to the Angiulos' organized crime money launder­ Unlike Waltham, most of the companies chose not to ing. fight the indictments. For companies as small as these, the Between 1979 and 1983, the Bank of Boston sold handing down of an indictment from the Justice Department $7,372,343 in cashiers checks to various members of the is an overwhelming attack, because they do not have the Anguilo organized crime family. These domestic transac­ resources to fight the federal government. Hybrid Compo­ tions were never mentioned, at least publicly, when the bank nents, MurdockWebbing , and Gibson Motor all tried to plea was indicted. The government centered its case on interna­ bargain with the prosecutor. As a result, there is little in the tional transactions. public record to help concerned citizens determine whether William Weld is financially tied to the Bankof Boston they were guilty or innocent. The case involving Aster En­ through Credit Suisse, one of the banks which was transfer­ gineering is expected to come to trial in November. ring large amounts of cash that went unreported under the provisions of the Bank Secrecy Act. CreditSuisse purchased parts of White, Weld Securities, the company founded and owned by his father, David Weld. A. Is it not the case that the Bank of Boston was found to Documentation have engaged in 1 , 163 currency transactions totaling $1,218,682,28 1 (over $1.2 billion) without reporting them under the Bank Secrecy Act? B. On what basis was the decision made to prosecute the The questions We ld Bank of Boston for only one felony count for theseviolations , each one of which would be a felony? C. Did your office request records from Credit Suisse, must answer now Zurich; Bank Leu, Zurich; Union Bank of Switzerland, Zu­ rich; Swiss Bank Corp., Basel; Barclays Bank International, On Aug. 14, the Senate Judiciary Committee announced that New York; Bank of Boston SA, Luxembourg; Die Erste it had canceled its planned vote on the nomination of William Oesterreichische, Vienna; CanadianImperial Bank of Com­ Weld, U.S. Attorney in Boston, to the post of head of the merce, Ottawa, Canada; or Standard Chartered Bank Limit­ Criminal Division of the Justice Department. The vote on the ed; New York, all of which exchanged unreported money Weld confirmation is now expected to come up on Sept. 10. with Bank of Boston? If not, why not? On Aug. 13, Warren J. Hamerman, chairmanof the National D. Why did you fail to pursue the line of questions that Democratic Policy Committee, testified before the commit­ might have revealed where the large amount of cash in small tee, urging them to reject the Weld nomination on the grounds demoninations from these Swiss banks originated? that it would deal a mortal blow to President Reagan's War (In other words , a competent investigation would have on Drugs, given evidence of Weld's "conflict of interest" in extended to Switzerland to attempt to prove that the money the handling of the Bank of Boston money-laundering case, originated from drug-linked accounts. Another U.S. Attor­ and his record of abusing his offi ce fo r selective persecution ney, Rudolph Giulianiof the SouthernDistrict of New York, of political opponents. has had tremendous success in getting Bank Leumi to open The last issue of EIR presented Hamerman' s written tes­ its records in a case of insider-trading within the last month.) timony to the committee. Below is the addendum to that E. Between 1979 and 1983, the Bank of Boston sold testimony, also submitted on Aug. 13, which is the list of $7,372,343 in cashiers checks to various members of the suggested questions concerning areas of investigation the Angiulo family, including 163 checks for $2,163,457 in cash. National Democratic Policy Committee wishes to be pursued Did you determine the origin of this money when you pros­ by the Senate Judiciary Committee. With each group of ques- ecuted Gennaro Angiulo? Why were these transactions not

62 National EIR August 29, 1986 mentioned in the final criminal indictment of the Bank of leader of the Jewish Defense Organization (which is a splinter Boston? group of the Jewish Defense League, a terrorist group, ac­ F. Why was the decision made to exempt officers and cording to the FBI report, attached), was called as a witness employees of the Bank of Boston from prosecution? Were by Weld against the National Democratic Policy Committee not employees of the Provident Institution of Savings indict­ and Lyndon H. LaRouche, Jr. , a Democratic presidential edfor the same violations of the Bank Secrecy Law regarding candidate for 1988. Attached documents show Levy's role in the Angiulos, that the Bank of Boston employees were not two terrorist murders in 1985, the most serious terrorist in­ indicted for? cidents that occurred in the domestic United States that year. G. Did this exemption from prosecution include officers A. Do you believe that it is justifiable to grant federal at the North End Branch of the Bank of Boston, which han­ protection to a life-long drug dealer in order to use him for dled the Angiulo cash transactions? testimony? H. Were those officers of the North End Branch of Bank B. Do you believe that "white collar crime" is a worse of Boston questioned about the exempt status which the An­ offense than selling marijuana? giulo family enjoyed at that branch? (The Angiulo accounts C. Do you believe that marijuana should be decriminal­ were on the "Exempt" list of accounts and therefore were not ized in the United States? required to file CTRs.) D. Do you believe that cocaine should be decriminalized I. Did you investigate who made the decision to exempt in the United States? those accounts? E. Is it true that Jesse Waters , a drug-dealerwho has been J. Did you investigate why the head teller, Howard K. arrested dozens of times in Boston, is now a protected wit­ Matheson, resigned fromthe bank in the middle ofthe inves­ ness, despite the fact that he shot a police officer, Francis tigation? Tarantino?Has Waters' 1 O-yearja il sentence for the shooting K. What answers did you receive about who in the Bank of Officer Tarantino been reduced or erased because of his of Boston granted exemptions from cash reporting for the testimony? Angiulo-connected accounts? F. Isn't it true that Officer Tarantino had to retire from L. Were Bank of Boston's Honorary Director William the policeforce because of the critical injuries he suffered in C. Merceror Senior Vice President Peter M. Whitman, who that shooting? both contributed to your 1978 election campaign, involved G. Isn't it the case that Waters profited, according to in arranging the exemptions for the Angiulo business ac­ federal court records, in the range of $1.49 million during • counts? Were they in any way involved in making the deci­ only three years , frotn his drug dealing and other illegal sion to "overlook" the cash transactions reporting law in activities? dealing with the Swiss banks? H. When the FBI subpoenaed Mordechai Levy under M. Is it true that Bankof Bostonchairman William Brown your and Mr. Daniel Small's orders, were you aware that asked you or your office to drop any prosecution of the An­ Levy is under investigation for two deaths caused by terrorist giulo-related violations in return for them pleading guilty to bombs planted in 1985? the violations involving the Swiss banks? (Sources in Boston I. Were you aware that a Boston police officer was seri­ believe thatthis "gentleman's agreement" between Weld and ously injured-having lost his foot-attempting to disarm a Brown, avoided the embarassment of linking Brown and bomb that was planted by a Jewish extremist group? Were others directly to Boston-centered crime and drug-selling) . you aware that Mordechai Levy may be implicated in that bombing which injured a Boston police officer? II. Use of criminals as witnesses J. Was your office aware that the FBI is conducting an FACT: A convicted cop-shooter and high-level drug investigation, and there are other U.S. Attorneysin the U.S. dealer, Jesse Waters , is currently being employed by Mr. who may be questioning Mordechai Levy , or that he may be Weld as the chief witness in a witchhunt against the Boston a target of a federal investigation? Police Department which has significantly undermined the K. Did you or your office offer immunity to Mordechai morale and effectiveness of law enforcement in Boston. Levy in return for his testimony, in the same manner that Waters , convicted of shooting a police officer for arresting your office seems to have done for Jesse Waters , a drug him in the act of selling a controlled substance, is presently dealer, who shot a police officer? in the Federal Witness Protection Program at the behest of L. Do you plan in the future to offer such immunity to Mr. Weld. Waters claimed that he had evidence that he was Levy? bribing Boston police, including Francis Tarantino , the offi­ M. Will the fact that you subpoenaed Mordechai Levy cer he shot, aft er he was convicted of the shooting and of possibly effect the FBI and government's investigation into federal tax evasion related to drug profits-over $1.4 mil­ the murders of Alex Odeh of the American-Arab Anti-Dis­ lion. crimination League, and of New Jersey resident Tscherim In another case, Mordechai Levy, the self-proclaimed Soobzokov?

EIR August 29, 1986 National 63 N. Does your interest in pursuing the investigation of setts Attorney-General, a sequence of complicated transac­ politicalfigure Lyndon H. LaRouche, Jr. , overrideyour con­ tions occurredwhich successfully buried the origins of White cernabout theterrorist crimes in which MordechaiLevy may Weld, the Weld family company. Merrill Lynch appears to have been involved? have purchased White Weld for $50 million. Subsequently, O. Were you aware that the House Judiciary Subcom­ Credit Suisse purchased from Merrill Lynch White Weld's mittee conducted hearings this past July into the terrorist stockholders' "stake" for $25 million. Afterward, Credit killing of Alex Odeh, where substantial testimony on Mor­ Suisse boughtinto First Boston, Inc. and First Boston bought dechai Levy was presented? into White Weld Securities of London. A. What was the relationship of your father David Weld to Credit Suisse? m. Abuse of office and selective prosecution B. What is the currentrelation of the [David] Weld Trusts FACT: William Weld has used his office to prosecute listed on your financial disclosure to Credit Suisse or any of political enemies and run "trial by press" campaigns even thebanks named in the Bank of Boston indictment? when no convictions resulted. TheodoreAnzalone , the chief C. What interest do you or your spouse currently have fundraiser for former Boston Mayor Kevin White was ulti­ with Credit Suisse or any of the banks named in the Bank of mately acquitted of charges brought against him by Weld. Boston indictment? Judge Juan Torruella wrote in the appeallate courtdecision D. What interest do you or your spouse currently have overturning theconviction of Anzalone, "We cannot engage through Scudder Cash Investment Trust to Credit Suisse or in unprincipled interpretation of the law lest we forment any of the banks named in the Bank of Boston indictment? lawlessness instead of compliance." The press play that sur­ E. What financial changes occurred in 1978 to the com­ rounded the case was enough to convince Mayor White to pany formerly known as White Weld? Was thereany relation cancel his planned re-election campaign. to those changes and your running forstate Attorney-Gener­ Similarly, Vincent Piro, a memberof the Massachusetts al? state legislature, was the target of a three-year FBI investi­ F. Did you ever discuss with family or with financial gation into politial corruption in Sommerville and Chelsea, advisers the need to circumvent public financial disclosure Massachusetts Piro was accused of federal extortioncharge s. prior to your running for state Attorney-General, or taking The jury which acquitted him said that the government was the positionof U . S. Attorney? Did these discussion have any "overzealous" and had, using undercover FBI agents, en­ bearing on the change in structure of White Weld at that trapped Piro into the scheme. time? A. Who made the decision to prosecute Theodore Anza­ G. Bank of Boston and Baybanks of Massachusetts are lone on currency transactionviolations? For what reason? engaged in joint ventures. Did your holding stock in Bay­ B. Was the prosecution of Theodore Anzalone in any banks have any bearing on your plea bargain decision in the way related to the re-election campaign of Mayor Kevin Bank of Boston case? White? H. Did you have any discussions withyour cousin, Chris­ C. Was Mayor White's re-election campaign ever dis­ topher Weld, in regard to the Bank of Boston plea bargain? cussed in the course of the Anzalone investigation or prose­ (Christopher Weld is employed at Sullivan & Worchester, cution? attorneys for the Bank of Boston.) What bearing did these D. Who made the decision to prosecute Vincent Piro? discussions have on the final plea? For what reason? I. Didn't the fact that Bank of Boston's Honorary Direc­ E. Was Vincent Piro's position in the state legislature tor William C. Mercer or Senior Vice President Peter M. ever discussed in the course of the investigation or prosecu­ Whitman contributed to your 1978 election campaign for tion? Was it discussed in the course of determining the FBI's Massachusetts Attorney General, influence your decision to activity in investigating corruptionin Sommervilleand Chel­ plea-bargain withthe Bank of Boston? sea? J. Are there any additions to your 1984 financial disclo­ sures at the present time? IV: Questions on personal finances K. Are you now, or have you been in the past, a consult­ FACT: There area number of openquestions on William ant, or investor to a company called Tellabs, Inc., based in Weld's and his family's finances which could seriously call Lisle, Illinois, with a branch in Canada? into question his fitness for this very importantjo b. L. Do you receive remuneration of any kind, including Flrst,is the areaof conflictof interest on Credit Suisse as frominvestments , from Tellabs, Inc. ? Can you describethis? it pertains to money laundering with the Angiulo organized­ M. The Middle Ages, Inc., the company listed on your crime familyand the Bank of Boston. William Weld's father, disclosure form of 1984, states that the partnership is "be­ David Weld, had, since at least the 194Os. lieved to have no value." Has that status changed since then? In 1978, the year that William Weld ran for Massachu- Do you receive income from that partnership?

64 National EIR August 29, 1986 EIR Charges Upheld

Massive Soviet biological warfare buildup exposed by the Pentagon by Wa rren J. Hamerman

The author is the director of the Biological Holocaust Task Force . Documentation

On Aug. 8, Douglas J. Feith, the deputy assistant secretary Excerptsfrom the Testimony on Biological and Toxin Weap­ of defense for negotiations policy, delivered dramatic testi­ ons Before the Subcommittee on Oversight and Evaluation of mony before Congress presenting a detailed exposure of mas­ the House Permanent Select Committee on Intelligence by sive Soviet research into, and production of, offensive bio­ Douglas J. Feith, deputy assistant secretary of defense fo r logical warfare (BW) and bacteriological weapons. negotiations policy, Aug. 8: Six months earlier, the 1972 Kissinger treaty , negotiated as part of his sell-out package that included the ABM and I appreciate the opportunityto address this Subcommittee on SALT treaties, had been targeted in the same way by EIR in the military problem of biological and toxin weapons. Bio­ a 150-page special report titled "An Emergency War Plan to logical agents (i.e., live organisms) and toxins (i.e., toxic Fight AIDS and Other Pandemics." In fact, the widely cir­ chemicals produced by live organisms) are similar in essen­ culated EIR Sp ecial Report, which was released on Feb. 15, tialrespects and I shall refer to themcollectively as "BW." 1986, printed the entire text of the 1972 "Kissinger Proto­ The stunning advances over the last five to ten years in cols," and called for the V. S. to publicly exposethe massive the field of biotechnology-the advances that have brought Soviet violations of the treaty and not renew the Kissinger into Common parlance such terms as genetic engineering, agreements . At the time, EIR also launched an international recombinant DNA techniques, monoclonal antibodies, and campaign for the V.S. to commence a crash Biological Stra­ Nutrasweet-mean more than new foods, pharmaceuticals, tegic Defense Initiative (BSDI), utilizing the most modern and fertilizers. They mean new and better biological weapons laser and other optical biophysics technologies to restore for any country willing to violate what the V . S. Government America's basic biodefense system. still insists is an international norm against the possession of Feith's report six months later came only weeks before such weapons. New technology has exploded the standard the scheduled September review in Geneva, Switzerland of idea about BW that prevailedten or more years ago. the 1972 V.S.-Soviet Biological Warfare Protocols which Those old ideas can easily be summarized: BW was had been negotiated by Henry A. Kissinger. thoughtto be a small problem solved. It was thought small In Feith's testimony, the Pentagon asserted that the 1972 because BW was judged militarily insignificant or, at most, Kissinger Biological and Toxins Weapons Convention (BWC) of highly restricted utility. Agents best suited for military was "critically deficient and unfixable." use-those, for example, like snail or shellfishtoxins , which The Aug. 18 issues of the papers Le Figaro in France and disseminate well in effectiveconcentrations and work quick­ Siiddeutsche Zeitung in West Germany, reported on the re­ ly and somewhat controllably-could not be produced af­ lease of Feith's report, which documents how massively the fordably in large quantities. Those that could efficiently be Soviets have violated the conventions forbidding the devel­ produced worked in general less quickly and spread infec­ opment of BW weapons, which were signed by 100 nations tious disease, with large attending risk to the attacker as well in 1972. According to the Feith report, "The configurationof as the target. BW was deemed a strategic weapon and, from biological and chemical weapons has been radically changed a militarypoint of view, far inferior to other-that is, nucle­ by recent scientific progress. . . . It is from here on possible ar-strategic weapons.... to synthesize bacteriological products for military uses." The BW picture has been radically altered by recent sci­ Douglas Feith's closing remarks on the need to build a entific developments. It is now possible to synthesize BW "defense" against the Soviet biological "offense" are most to agents tailoredto military specifications. The technology that the point. makes possible so-called "designer drugs" also makes pos-

EIR August 29, 1986 National 65 sible designer BW. States unconstrained by their treaty ob­ designed to be effective across the spectrum of combat, in­ ligations can now produce BW agents of varying effects­ cluding special operations and engagements at the tactical different types of fast-acting incapacitants as well as lethal level. No field equipment has yet been developed that can substances. Agents can be developed for various climatic detect BW agents , let alone identify them. There are no conditions. They can be mixed to complicate indentification antidotes now available against many possible agents . And and their chemical structure can easily be altered to circum­ it is not certain that our troops' protective gear would be vent immunogens or antigens that the other side is suspected effective against all such agents. to possess. The BW field favors offense over defense. It is a tech­ The limits of arms control nologically simple matter to produce new agents but a prob­ As for the arms control implications, these divide into lem to develop antidotes. New agents can be produced in two categories. The first can be labeled "crime and non­ hours; antidotes may take years . To gauge the magnitude of punishment," and the second "technology overtakes the the antidote problem, consider the many years and millions treaty." The systematic violations of the BWC by the Soviet of dollars that have thus far been invested, as yet without Union and its clients undermine the treaty and the anti-BW success, in developing a means of countering a single biolog­ norm it symbolizes. At least equally grave , however, is the ical agent outside the BW field-the AIDS virus . Such an international community's unwillingness to take a collective investment far surpasses the resources available for BW de­ interest in the evidence of those violations . A treaty may fe nse work .... survive breaches by some parties. But can it long survive The Soviet Union evidently appreciates the military op­ general indifference as to whether it is violated? portunities created by the biotechnological revolution of re­ What is unwholesome, I wish to emphasize, is not the cent years . Though U.S. policy remains what it was in 1969 failure of many BWC parties to endorse the U.S. govern­ after President Nixon's unilateral renunciation of BW (and ment's conclusions about Soviet violations, but their refusal there is no thought within the administration to change the even to inquire into them or urge formal investigation. Some policy) , the Soviet Union has built a large organization de­ states explain their inaction by asserting that the U.S. gov­ voted to the development and production of offensive BW. ernment's case is not conclusive. Reasoning like Lewis Car­ At thevery time when Soviet officials were negotiating and roll's Queen of Hearts , they contend in effect that treaty signing the BWC [Biological Weapons Convention] , a high­ parties have no responsibility to investigate charges of vio­ ranking Soviet defector has reported, the Politburo decided lations until the allegations are proved. to intensify the Soviet BW program. Many states, after dismissing violation controversies as The Soviets retain stockpiles of BW agents produced in mere politics between the "superpowers," feel justified in pre-recombinant-DNA days . At known biological warfare exhorting the U.S. governmentto conclude new arms control facilities in the Soviet Union, they maintain highly secret agreements with the Soviet Union. They claim standing on weapons storage facilities under military control . They have, the grounds that they, as members of the international com­ as alluded to above , transferredBW to their clients in South­ munity, are affected by the quality of relations between the east Asia. They have themselves used toxins against their powers . They do not in general take this stand cynically, enemies in the Afghanistan war. And they are developing wryly acknowledging its irony. On the contrary, they ear­ new means of biological warfare based on current bio�engi­ nestly assert their responsibility for promoting new arms neering technologies. In other words, the Soviet Union has control treaties and equally earnestly assert, once a treatyhas not only violated the BWC, but every major prohibition in it. been signed, the propriety of their not heeding Soviet viola­ The scale and seriousness of the Soviet BW program are tions. Their earnestness notwithstanding, however, they have formidable. There are at least seven biological warfare cen­ dimmed severely the prospects for arms control agreements ters in the U.S.S.R. under military control , all with unusually ever contributing to international security. rigorous security . One such facility constitutes a veritable The major arms control implication of the new biotech­ city with a large number of residents who work and live there nology is that the BWC must be recognized as critically full time, isolated from the rest of society. These residents deficient and unfixable. A state contemptuous of internation­ must possess extraordinary security clearances, a require­ al law and unconstrainedby anti-BW public or parliamentary ment that excludes individuals or ethnic groups considered opinion could now maintain an offensive BV: capability disloyal. The level of effort committed to research on various without violating any of the specificprohibitions of the BWC. natural poisons-such as snake venoms-is far in excess of (Maintaining such a capability would necessarily violate the what could be justifiedto deal withsuch substances for purely BWC's general prohibition; the treaty's purpose, after all, is medical or public health purposes. to ban BW. But if a state refrains from stockpiling large All of this , of course, has implications for both the mili­ quantities of agent, it would as a practical matter be impos­ tary and the arms control aspects of the BW problem. The sible to prove any such violation.) prevailing judgment of years ago, that BW is not a militarily Given the ability to produce militarily significant quan­ significant weapon, is now quite unsustainable. BW can be tites of BW from seed stock within a month or so, it is not

66 National EIR August 29, 1986 necessary to stockpile agent. Such a state need only maintain in a freezer a few hundred test tubes full of seed stock and a production facility which in the normal course of things makes agricultural or medical products. In the unlikely event the EIR freezer were discovered, a closed society would have little difficulty characterizing it as part of a research effort for BW SpecialReport defense. In fact, because seed stock can be synthesized in a matter ofda ys, one could get by even without the freezer. As for the rest of the infrastructure required for a BW capability-such as munitions-filling equipment, aerosoli­ An Emergency zation and dissemination testing, and training-it could be maintained openly. It is essentially identical to the infrastruc­ War Plan to Fight ture entailed in a chemical weapons capability. While it in no way excuses or belittles the importance of the Soviet Union's BWC violations , the fact is that their AIDS compliance with the treaty 's specific prohibitions would not obviate concern about their BW capabilities. Because new technology makes possible a massive and rapid break-out, EIR 's Biological Holocaust Task Force has prepared the world's only science-intensive "Emergency War the treaty constitutes an insignificant impediment at best. Its Plan to Fight AIDS." The newest discoveries of opti­ principal failing, therefore , is no longer the absence of veri­ cal biophysics and advanced laser technology can fication provisions or lack of effective complaint mecha­ improve diagnosis and lead to research break­ nisms, the commonly acknowledged shortcomings, but its throughs-if governments move now. The War Plan begins with the President of the inability to accomplish its purpose-to ensure that even states United States, in his capacity as civilian leader and respecting its specific terms pose no BW threat. commander-in-chief, declaring a War on AIDS and invoking National Emergency powers to avert disas­ A problem with no apparent solution ter. In parallel, heads of state of other nations of What therefore is to be done and not done? First of all , the Western alliance shall declare war on this scourge to mankind. the administration is not interested in altering the longstand­ A ISO-page Special Report for governments, sci­ ing U.S. policy against possession or development of an entists, public health officials, and all citizens con­ offensive BW capability. cerned with a policy to fight AIDS, before a Secondly , the United States will remain a party to the pandemic wipes out millions. BWC and will remain in full compliance with it. Though the Contents treaty has been overtaken by technology as well as system­ I. The emergency war plan to fight AIDS and other atically violated, the administration continues to support the pandemics idea behind it-prohibiting BW. II. The real story of AIDS in Belle Glade, Florida Third, aware that the BWC serves as a false advertise­ III. AIDS in Africa: the unfolding of a biological holo­ ment to the world that the BW problem has been solved, the caust administration will make an effort-especially at the second IV. The biology of AIDS

BWC Review Conference, which will convene in Geneva in V. Flow cytometer and other laser technology poten­ September 1986-to highlight the nature of the problem and tial for combatting AIDS the critical defects of the BWC. The danger of not publicizing VI. The relevance of optical biophysics for fighting these matters is that friends and allies will continue to neglect AIDS: designing a Biological Strategic Defense Ini­ tiative (BSDI) BW defense work aimed at developing detection and medical capabilities and protective gear. VII. How Kissinger and Pugwash destroyed America's biodefense against AIDS and other deadly diseases It is not a pleasant task to deliver so dismal a report to the The Soviet command and control of WHO's AIDS Congress. The material's distressing nature probably ac­ VIII. Policy counts in large part for why it is so little treatedin the public IX. Why the Reagan administration has tolerated the debate on national security issues. It is axiomatic that the CDC cover-up of the AIDS pandemic only successful politics in a democracy is the politics of hope. X. The necessary public health program to fight AIDS But can one responsibly inflate hope for an escape from the military problems posed by the Soviet BW program? There $250.00. Order from: EIR News Service, P.O. Box Deus ex can be no Arms Control in this arena. In answer to 17390, Washington, D.C. 20041-0390. Order those who crave a constructive suggestion under even the #85020 least promising circumstances, one can only recommend: Defense.

EIR August 29, 1986 National 67 services to provide public reportage of breaking events. EIR Radio Reports also provides stations with a weekly 15-minute interview with EIR editors and newsmakers. Pro­ gram directors like to use the interviews as either separate programs or as leads for "open-line" call-in shows. An inter­ view with Mark Burdman of EIR's Wiesbaden bureau broke EIR reports offer the story in the U. S. media of Soviet heroin traffickersnabbed in the West, days before President Reagan went public with radio alternative his Waron Drugs. EIR still is the only news service to report the bust, despite the Justice Department's full knowledge of it. by Franklin Bell EIR's legal staff has affidavitsdocumenting that Justice's FBI has been quick to act on other matters, however. In the The media moguls of New York and Hollywood may be in Southeast and Midwest, stations have been harassed for air­ for shocks that in the next few months will convulse their ing EIR Radio Reports . The harassment has come from FBI ratings. Just by attempting to adapt to the convulsions, the agents as well as other, unofficial, accomplices of the Anti­ moguls will be setting themselves up for more. The nation's Defamation League. Why? "cultural paradigm shift"-harbingered by its growingintol ­ EIR radio programs answer a need more and more lis­ . erance for the drugs-AIDS counterculture-will soon be re­ teners and station owners recognize: The programscover the flected in Americans' media choices. Defying the profiles breaking news the networks and wires distort or try to black projected by Nielson and Arbitron, more and more Ameri­ out. To hearthe content of the President's Strategic Defense cans will be flipping channels and switching dials in search Initiative speech or the story behind "Palacegate" in Britain, of sane programming. for example, the EIR programs arethe only source on the air. These people alreadyhave a few friends at radio stations EIR Radio Reports provide extensive coverage of the news across the country. "We like to airmaterial that is not popular behind the AIDS pandemic, narco-terrorism, International with the networks," says general manager Ed Graham of Monetary Fund genocide, the Russians' drive for global WNTR-AM (1050 khz) outside Washington, D.C. "People showdown, the cultural battle between oligarchs and repub­ keep calling us, saying, 'Thank you for airing thatprogr am. licans, and scoresof other processesthat the U. S. subjects of You'rethe only place we can get that. ' " the media's perception games are not supposed to be inter­ For more than a year now, Graham has been airing Ex­ ested in. ecutive Intelligence Review Radio Reports during morning drive for commuters braving the Beltway. The single-topic, Controversy sells four-and-a-half minute news program relies on EIR's intel­ Radio staffers with backbones expect-and thrive on­ ligence staffs to provide listeners with informationthey rec­ controversy. The EIR programsgenerate controversyfor two ognize they can get fromno other source. reasons:Their accurate reportagecontradicts the morewidely "I use EIR Radio Reports to the fullest extent. They heard story-telling of the networks; and time and again EIR provide an in-depth perspective that makes it possible for an Radio Reports scoopthe moguls on whole categories of cov­ otherwise misinformed listening audience to clearly under­ erage. The war on narco-terrorism is a good example . Sta­ stand thenuances of domestic and internationalaffairs ," stat­ tions across the countryreport thatEIR Radio Reports have ed newsman Roy Wood of WENN-FM (107.7 mhz) and enhanced their listenership, and increased audience-shares WAGG-AM (1320 khz)in Birmingham. Wood made it clear benefitadvertising sales. he has a far different view of his audience than the network Some disagree. Clark Quillen ofWMTN radio in Morris­ chiefs: "An informed citizen is a better citizen," he said. town, Tennessee, discussing EIR Radio Report�: "The qual­ Woodcited EIR's exposes' of the international narco-terror­ ity of the programs is good. Thereis a lot of good information ist mafiaas the most helpful to his listeners. in them ....But we don't like to run news like that. Once Graham's, Wood's, and about 100 other stations across we reported that the unemployment figures were rising; peo­ the country now use EIR Radio Reports regularly. Five pro­ ple got so upset that they cut back on advertising. So we don't grams each week provide the latest intelligence on the wide runthat kind of news. " spectrum of issues this magazine covers. Stations find a va­ But some can sense a shifting of the winds. A year ago, riety of effective ways to use the programs: as separate news one talk-show host, who broadcasts his program in several features, openers for talk shows, segments of larger news major media markets fromNew York City, vowed with char­ programs, and as counterpoint to the usual "collapse-is-re­ acteristic vehemence never again to have anyone associated covery" newspeakby "recognized experts"the liberal media with EIR on his program. Now he calls EIR . use. Because of their short production- and delivery-cycle, For more information, radio stationpersonnel may call EIR Radio Reportsoften are the firstof the EIR-related news EIR National Press Staff202-955-5930.

68 National EIR August 29, 1986 Eye on Washington by Nicholas F. Benton

in the Church, and used this to justify Curran evaded answering: "There are his defense of homosexual and extra­ 10 members of our sociology faculty marital sex, as well as abortion, steri­ present who would probably be better lization, euthanasia, and population equipped to answer that question than control. me ." At an increased pace over recent But the question remains. How years , Pope John Paul II and Cardinal many of the 4 million Americans in­ Recess witnesses the Ratzinger have been striking back at fectedwith the AIDS virus can Father the terrible social consequences of the Curran take personal credit for? purging of heretics cultural shift into this " Aquarianage ." Curran tried to argue that "St. Pe­ Keeping things lively in the nation's The Pope has attacked the narco­ ter would have flunked a Catholic cat­ capital during the summer recess for terrorist networks of South America echism" because "he wouldn't know the President and Congress, the Vati­ and their controllers, denouncing the how many persons there are in the can struck a blow against the moral drug businessas the "new slavery" that Godhead, how many natures in Christ, decay eating away at Western civili­ threatens an entire generation. Rock or how many holy sacraments there

zation by stripping Fr. Charles Curran music and promiscuous sex, as well are ." He meant this to argue that the of his right to teach theology at the as the immorality of euthanasia and theological doctrines of the Trinity, Catholic University of America here . population control, have been singled consubstantiality of Christ, and the This move by the Vatican's Con­ out for attack by both the Pope and holy sacraments were part of the "ev­ gregation for the Doctrineofthe Faith, Ratzinger. olution" of the Church, and that his headed by Joseph Cardinal Ratzinger, The economic barbarism under­ controversial views should be seen as has implications that will affect the lying the Aquarian conspiracy, the part of that "evolution." entire American Church, and extend usury of the International Monetary In fact, the Church has been fight� far beyond the Church itself. Fund and its proponents, has also come ing heresy within its ranks since the Father Curran was a much-pub­ under attack. timeof Simon Magus, and in this fight lished proponent of the decadent mor­ But the blow struck against Father has consistently recognized that the al and social dogmas that became the Curran's heresy is a major escalation advocacy of hedonism always occurs vogue in the West during the late by the Pope and Ratzinger, and has at the expenseof the sanctityof human 1960s, when the massive social-engi­ created reverberations throughoutthe life. The Curran issue is just another neering project, described as "the American Church-Curranwas , after case of this, because his support of Aquarian conspiracy" by the Stanford all, a fair representative of a sizable hedonism in the formof sexual prom­ Research Institute's Marilyn Fergu­ numberof "American heresy" Catho­ iscuity is coupled with his rejection of son, the author of a book by that name, lic prelates. While the architectsof the the sanctity of life in his support for unleashed the "sex-drug-rock coun­ moral decay shriek about "violations both euthanasia and population con­ terculture . " of academic freedom," the American trol. Father Curran was among those people applaud, as they did President Curranclaimed he has "never sup­ who argued the merits of the new de­ Reagan's recent escalation of the war ported the use of euthanasia for the generate hedonism in high-flown and on drugs. purpose of population control," but esoteric theological language in order This reporter put the relevant then admitted that he has written in to undercut the traditional pastoral question to Curran during his press supportof both euthanasia for the el­ function of the Church to resist these conference Aug. 20: "Can you deny derlyand population control in devel­ trends. Therefore , as he himself con­ that the impact of your ideas has con­ oping sector nations. cedes, his arguments were always tributed to the spread of AIDS?" Of course, Curran is not alone. veiled in "carefully nuanced" terms , The standing-room-only crowded There are many like him who have to sound acceptable to Church doc­ auditorium, jammed with press and chipped away at the moral fabric of trine, while profoundly undercutting erstwhile supporters of Curran, re­ society,if few have been in such influ­ its content. coiled in shocked horror. The reaction ential positions to do so. More impor­ He helped draft a formulation by dozens was so angry, outraged, and tant is the fact that the Vatican, to the adopted by the U.S. Catholic Bishops spontaneous, that I knew it had hit the benefit of us all, Catholic or not, has in 1968 "allowing" theological dissent mark. When the noise settled down, started to crack down.

EIR August 29 , 1986 National 69 NationalNews

program. If the U . S. could persuade the So­ er heroin, cocaine, marijuana, and other il­ viet Union to cut back on its offensive stra­ legal drugs. Results of negative tests would tegic weapons, the U.S. "wouldn't need as be made public on an initial testing . For Cuomo asks life much defense," he opined. He also said that positives, a second test would be allowed the United States should limit SDI to "some before results were released. for 'crack' dealers kind of site defense," at least for the next 20 Feeling the politicalpressure fromthe Pres­ years . ident's War onDrugs , New York Gov. Mar­ McFarlane also now works out of CSIS io Cuomo (D) has proposed legislation un­ at Georgetown University, where he runs a der which anyone convicted of selling crack task force, with Henry Kissinger's clone, Qaddafi and Solarz: could be sentenced up to life imprisonment. Brent Scowcroft, that is supposedto be de­ "We will accept nothing less than the vising a new "arms control regime" to suc­ not-so-strange bedfellows toughest penalties forthose who would sell ceed SALT II. Representative Stephen Solarz (D-N.Y.) on this addictive, destructive drug to our chil­ Aug . 15, demanded that the United States dren ," said Cuomo, a 1988 presidential cut offall aid to Pakistan-despite its posi­ hopeful . tion as a front-line state against Soviet A Cuomo spokesman said that he is aggression fromAfghanistan-until the Zia trying to get the "law to change as quickly Drug tests for government frees opposition leader Benazir as the drugs are changing." Several New Bhutto. Bhutto has beenplaced underdeten­ York district attorneys, including Mario state legislators? tionfor a month . Merola and Elizabeth Holtzman, praised Assemblywoman Marian Lafollette (R­ Only last winter, Solarz played an in­ Cuomo's proposal . Northridge) called yesterday for mandatory strumental role in toppling U.S. ally Ferdi­ drug tests for members of the California leg­ nand Marcos in the Philippines. Bhutto's islature. The proposal was immediatelycrit­ movement is a pawn in the "New Yalta" icized by her Democratic colleagues. strategy of the Kremlin and its Western in­ Immediately after Lafollette's press terlocutors , to disintegrate Pakistan and its Warner, Nunn attack conferenceannouncing herresolution, ACR neighbor India. 165, the opposition held its own press con­ Solarz was joined in his protest from President's SDI ference. Assembly Speaker Willie Brown Tripoli, Libya, by Muarnmar Qaddafi, who Senator Sam Nunn (D-Ga.) teamed up with (D-San Francisco) dismissed it as "an elec­ sent Zia a message demanding the Pakistani Sen. John Warner (R-Va.) on Aug. 17 to tion year ploy." State Sen. Diane Watson President lift "cruel measures" against Ben­ deliver a bipartisan assault on President (D-Los Angeles) said. "It's a ridiculous azir Bhutto . Bhutto's arrest, the Libyan dic­ Reagan's conception of strategic defense. thing." Senator ArtTorres (D-Los Angeles) tator said, could be construed as "personal Interviewed on "This Week With David said drug testing should be voluntary: "I persecution" or as an "anti-democratic act." Brinkley," Nunn declared that "it's incre­ would welcome the opportunity to do it." Qaddafi hopes that "all restrictions and dible" that President Reagan says the U.S. Another senator, Herschell Rosenthal (D­ all kinds of persecution will be lifted from should deploy the SDI "when it hasn't even Los Angeles) derisively said of the proposed Bhutto and from the People's Party, which been developed," while Warner opined that urine samples, "I suggest we put it all in a includes friends of ours . " the program's emphasis should be shifted common pit." Senate President Pro Tem from the "large umbrella" concept (i.e. , David Roberti (D-Los Angeles) asserted the populationdef ense) to site defense. measure "shows not an iota of concernabout While claiming to believe that the House due process, probable cause and the right of version of the defense authorization bill is privacy ." Stevenson comes out unacceptable, Nunn said that the adminis­ However, the Senate Minority Leader, tration's failureto move ahead on arms con­ James Nielsen (R-Rohnert Park) said it against war on drugs trol createda "vacuum" which the House is sounded like "a good idea." Assembly Mi­ Adlai Stevenson III , the ill-starred Demo­ now filling. Both Warner and Nunn are nority Floor leader Pat Nolan (R-Glendale) cratic nominee for governor of llIinois until closely associated with Georgetown's Cen­ said, "If it's good enough for Reagan, it's he dropped out of the party rather than run ter for Strategic and International Studies. good enough for me ." with a LaRouche supporter, issued what his Brinkley also interviewed former Na­ Lafollette's resolution calls for urine campaign called a "challenge" to Illinois tional Security Adviser Robert McFarlane, tests by the end of next week and the results Gov . Jim Thompson (R), and what turned who also said that the United States should to be reportedto the Joint Rules Committee out to be, instead, a defense of a pro-drue: agree to an "offensive-defensive tradeoff' by Aug. 29. The tests could be administered position. and make the SDI a site or missile-defense by the lawmakers' own physicians and cov- Stevenson is now running for governor

70 National EIR August 29, 1986 Briefly

• PLAYBOY magazine has "been significantly hurt on the news­ the "Illinois Solidarity Party" ticket. stands," Christie Hefner, Playboy On Aug. 14, Stevenson declared that he Enterprises president, said Aug. 20. opposed mandatory AIDS testing as pro­ Judge nixes Jersey She was referring to theimpact of the posed by LaRouche, and that drug-testing report of the U.S. Commission on for himself and his cabinet would be "inap­ 'nuclear-free zone' Pornography established by Attor­ propriate unless there is some evidence of a AU.S. district court judge in Union County, ney-General Edwin Meese. She esti­ problem." This is in direct opposition to New Jersey ruledAug . 12 that the ordinance mated that the magazine had lost President Reagan's declared War on Drugs passed by county freeholders declaring 15,000 retail outlets since the issu­ measures. Union County a "nuclear-free zone" was un­ ance of the report. Stevenson challenged Governor constitutional. Thompson to say where he stands on the two Judge John Bissell said that the ordi­ • WILLIAM WELD, the Massa­ issues; a spokesman for Thompson dis­ nance was preempted by the federal Atomic chusetts U. S. Attorney who has been missed Stevenson's "challenge" as "his usu­ Energy Act and the Hazardous Materials nominated to head the Justice De­ al dippy campaign rhetoric that we've been Transportation Act and that it also violated partment Criminal Division, used a hearing all along ." Perhaps so, but some are the commerce clause of the U.S. Constitu­ conference in Boston Aug . 20 to call wondering where Thompson does stand on tion . for death sentences for two types of the issues of drugs and AIDS testing . The ruling came in the case of a lawsuit people: "drug lords" who are leaders filed by Radiation Technology, Inc., the of rings doing more than $10 million flagship food irradiation firm in the United in business a year, and law-enforce­ States, which had planned to build a food ment officers who "betray their trust." Alabama Democrats irradiation plant in Elizabeth, the county seat, Commented one wag: "Weld should but found itself at odds with the unconstitu­ clearly commit suicide." nominate the loser tional ordinance . Alabama Democratic officials awarded the • JEFFREY HART, the conser­ party's gubernatorial nomination to Lt.-Gov. vative columnist, praised Aristotle in Bill Baxley-the loser in the primary run­ the Aug. 19 Washington Times, but off! The state's Attorney-General, Charles Brooklyn police nab for some reason, doesn't mention the Graddick, received 8,756 more votes than name of Lyndon LaRouche, today's Baxley. Israelis dope dealers leading philosopher in the traditionof Graddick, a former Republican, de­ Police arrested fiveIsraeli nationals for drug Aristotle's deadly enemy, Plato . clared after the apparent contradiction of ac­ trafficking in Brooklyn, New York Aug . 20, cepted democratic practices, "I want the Police Lt. Ronald Naimoli announced. "It • TRANSPORTATION Secre­ millions of Alabama voters to know that I'm was a major ring and this will take a lot of tary Margaret Dole, in the wake of mad and I won't let them down. Only in drugs off the street," he said. President Reagan's announcement Russia doe� the party pick the candidate." Police said the group dealt in heroin and that NASA responsibility for launch­ Graddick should have been forewarned. some cocaine, primarily imported from Is­ ing commercial satellites will cease, A month earlier, "LaRouche Democrat" rael, Indonesia, and Europe . They imported called a press conference Aug. 19 to Glen Thompson, a lifelong registered Dem­ $50 million a year in heroin and cocaine. discuss prospects for a new commer­ crat, sought to become Democratic chair­ Three cars were seized, along with cial launch industry. She confirmed man of Madison County, Alabama, through $10,000 in cash and a pound of heroin. The that thePresident 's decision was based the traditional means of seeking election to bust, assisted by Hebrew-speaking police on clearing the way for the Shuttle, the job. But Thompson was barred by the officers who translated tapedtelephone con­ the Space Station, Strategic Defense Democratic County Executive, because he versations, capped an 18-month investiga­ Initiative and scientific research. was supported by associates of LaRouche . tion that led to 25 undercover purchases from The State Party Executive, the body that ring members totaling more than $140,000 • THE ACLU said Aug. 18 it will chose loser Baxley over winner Graddick, worth of narcotics. go to court to challenge a new law upheld the decision against Thompson. The arrests are the beginning of a re­ thatrequires twice-convicted child sex In neighboring Georgia, the Democratic newed attack on a certain faction of the Mos­ offenders to register with local police

hacks carried out a similar action against sad, Israel's foreign intelligence arm, in the agencies. "This is a case . . . [ that] "LaRouche Democrats" seeking election to United States, according to intelligence goes against the whole idea of reha­ party posts . Commented one member of the sources. The Brooklyn ring is just one of bilitation and reintegration into soci­ state executive who voted against the exclu­ dozens in the country, which finance Israeli ety upon release from prison," said sion: ''I'm just back from Russia and this intelligence operations, arms purchases, and ACLU spokesperson Jane Wicher. action is just like the politics practiced there ." the corruption of government officals.

EIR August 29, 1986 National 71 Editorial

Il gran rifiuto

One month has passed since the Presidentof the United quired for SOl, and powered by the cheap and virtually States, in a letter to Mikhail Gorbachov, generously unlimited source of fu sion energy, has virtually no lim­ offered to Russia to share America's most advanced its visible by the vision of even the most visionary scientific and technological secrets associated with the person of the present generation. Strategic Defense Initiative , provided that Russia agreed The scientific implications and the technological to proceed with a joint and coordinated deployment of prowess of the work associated with the SOl, can truly these purely defensive and otherwise quite harmless liberatemankind 's creative potential fromthe fetters of devices, whose only awesomeness will be their ability small life on this planet and launch the great adventure to knock out thermonuclear missiles in flight. of conquering, first, our solar system, and then of the Though Mikhail Gorbachov is still silent as a tomb great space beyond. on the subject, the hollow brass cymbals of his propa­ These implications are very well known to the Rus­ ganda machine continue their irrational denunciations sian leadership. It is these implications that they fear in of the SOL President Reagan's offer, more than any petty military Some say, Gorbachov's silence is a sign that he will consideration. Western culture , despite its recent prob­ eventually come around and accept this generous lems, is still endowing its members with the moral and American gift of the new, marvelous, directed high cultural impulse to rapidly assimilate ever broadening energy technologies; some say thathis silence portends scientific and technological horizons and, firmly stand­ that he is scheming to gain time beforehe unleashes his ing on science, carry on the adventure of human prog­ thunders . The weeks ahead will tell. ress in God's creation. Yet, why all this suspense and high drama over a Eastern culture, whose military champion Mos­ simple offer of a technology, of which the laymanknows cow, the Third Rome, today is, has long ago impris­ nothing , the politician very little, and most scientists a oned, and still keeps in chains, this creative moral im­ little more than very little? pulse in its members . The introduction of technologies The layman is waiting to be informed before he gets which might enable Western societies to ease into a caught in the excitement of these new technologies' one-shot 400% increase in industrial productivity, if golden promise; the average politician fears an un­ introduced inthe Russian kind of society, might trigger, known world made better by the rational power of sci­ in short order, a breakdown of existing hierarchical , ence; the run· of the mill scientist fears that the vast despotic social arrangements. Leaders such as Gorba­ horizons of the emerging scientific and technological chov do not serve society; they serve the particular revolution will render him obsolete. political system which has culled them for the leader­ The layman can begin to appreciate the profundity ship role. Reagan's generous offer would be most ben­ of the historical implications of these technologies-so eficialfor the members of Russian society, but it might generously offered by Reagan to Russia-by this sim­ prove deadly to the political cult which is dominating ple example: Back during 1982, EIR's economic anal­ that society at this time. ysis project, theLaRouche-Riemann Model , did a com­ So, Gorbachov is sitting there , in the Kremlin, si­ puter projection of what the introduction of SOl tech­ lent, and his silence suggests a grand rejection, Dante's nologies would do to the economy of theUnited States . gran rifiuto, which hurls its tormented practitioner The answer was a 400%increase in productivity during straight into Inferno 's oblivion. Or maybe he shall ac­ the initial phase of application ! cept Reagan 's "giftof fire," and prove himself a better An industrywhose forges are commanded by lasers man than we think? with the kind of deliverable punch and versatility re- Regardless of what he does , we must go on .

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