EIR Executive Intelligence Review Special Reports

The special reports listed below, prepared by the EIR staff, are now available.

1. Prospects for Instability in the Arabian Gulf 5. The Significance of the Shakeup at Pemex A comprehensive review of the danger of instabil­ EIR correctly forecast the political troubles of ity in Saudi Arabia in the coming period. Includes former Pemex director Jorge Diaz Serrano, and analysis of the Saudi military forces, and the in­ this report provides the full story of the recent fluence of left-wing forces, and pro-Khomeini net­ shakeup at Pemex.lncludes profile of new Pemex works in the country. $250. director Julio Rodolfo Moctezuma Cid, implica­ tions of the Pemex shakeup for the upcoming 2. Energy and Economy: Mexico in the Year 2000 presidential race, and consequences for Mexico's A development program for Mexico compiled energy policy. $200. jointly by Mexican and American scientists.Con­ cludes Mexico can grow at12 percent annually for 6. What is the Trilateral Commission? the next decade, creating a $100 billion capital­ The most complete analysis of the background, goods export market for the United States. De­ origins, and goals of this much-talked-about tailed analysis of key economic sectors; ideal for organization. Demonstrates the role of the com­ planning and marketing purposes. $250. mission in the Carter administration's Global 2000 report on mass population reduction; in the 3. Who Controls Environmentalism P-2 scandal that collapsed the Italian government A history and detailed grid of the environmental­ this year; and in the Federal Reserve's high ist movement in the United States. Analyzes interest-rate policy. Includes complete member­ sources of funding, political command structure, ship list. $100. and future plans. $50. 7. Near-Term Prospects for Gold Price Increase 4. Prospects for Instability in Nigeria A political guide to the reasons for the recent A full analysis of Nigeria's economic develop­ decline in the price of gold, and likely price move: ment program from a political standpoint. In­ ments in the future. Includes analysis of control cludes review of federal-state regulations, analy­ over international private gold stocks, ongoing ef­ sis of major regional power blocs, and the en­ forts to corner the market, and review of scenar· vironment for foreign investors. $250 ios now in circulation for remonetizing gold.$500.

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�X.:�:I:��n::e:e::e:.���::::�t�s:::::::�:=:::.:�1���:8�: ______1 L ______Founder and Contributing Editor: Lyndon H. LaRouche. Jr. Editor-in-chief: Criton Zoakos Editor: Robyn Quijano Managing Editor: Susan Johnson Art Director: Martha Zoller Contributing Editors: Uwe Parpart. Christopher White. Nancy Spannaus Special Services: Peter Ennis From the Editor

INTELLIGENCE DIRECTORS: Africa: Douglas DeGroot Agriculture: Susan B. Cohen Asia: Daniel Sneider I Counterintelligence: Jeffrey Steinberg Economics: David Goldman European Economics: Laurent Murawiec Energy: William Engdahl Europe: Vivian Zoakos Latin America: Dennis Small Law: Edward Spannalls Middle East: Robert Drf'xfilSS Military Strategy: Steven Bardwell Science and Technology; Marsha Freeman Soviet Sector: Rachel Douglas United States: Graham Lowry

INTERNATIONAL BUREAUS: Bogota: Carlos Cota Meza Bonn: George Gregory. Rainer Apel Chicago: Paul Greenberg The transformation of the anti-technology peace and environmental Copenhagen: Vincent Robson movements into an openly fascist force is the subject of our Special Houston: Harley Schlanger. Nicholas F. Benton Report this week. It is essential to understand analytically what many Los Angeles: Theodore Andromidas Germans know from experience: that an anarchic, countercultural Mexico City: Josejina Menendez Milan: Muriel Mirak stratum, recruiting among youth, can be very quickly turned into a Monterrey: M. Luisa de Castro fanatical paramilitary bludgeon against civilization itself. The report New Delhi: Paul Zykofsky was prepared by Susan Welsh, an EIR specialist who has just returned Paris: Katherine Kanter. Sophie Tanapura from West Germany, by Michele Steinberg of our Counterintelligence Rome: Leonardo Servadio staff, and by members of our Wiesbaden bureau. Stockholm: Clifford Gaddy United Nations: Nancy Coker The fact that on both sides of the Atlantic this emerging fascist Washington D.C.: Richard Cohen. movement began with opposition to all things involving nuclear Laura Chasen. Susan Kokinda Wiesbaden: Philip Golub. Mary Lalevee. power is of the utmost relevance. In the United States, that mob's co­ Thierry Lalevee. Barbara Spahn thinkers in government office are succeeding to a drastic extent in blocking President Reagan's philosophical commitment to nuclear Executi ve In telligence Review (ISSN0273-6314) energy from accomplishing any practical results, a political and ispubli.l'hedweeAhf 50 issue.' Je.\('ef't/(Jrthl'.\(·,oIlJ economic emergency addressed in our National section. week oJJu11' and first weeA ofJal1l1arrhl' NewSolidari(l' illlerl1aliol1a/ Press ,{;et'\'j, c A preliminary victory has been secured, however, against the 304 W. 58thSirect. Sew) ori.. \.) J{)III'J. In Europe: Executive Intelligence Revi.". Justice Department's effort to intimidate or eliminate legislators at Nachrichten Agentur GmbH. Postfach 2308, 0.6200 Wiesbaden Tel: 30-70-35 will: the Senate vote on expUlsion of Abscammed New Jersey Demo­ Executive Directors: Anno Hellenhroich. crat Harrison Williams has been postponed. If one reviews the process Michael Liebig In Mexico: EIR, that began with Watergate, one will recall that the wreckage of the Francisco Dfaz Covarrubias 54 A-3 Colonia San Rafael. Mexico OF. Tel: 5'12-0424. Weimar Republic's institutions in interwar Germany was accom­ Japan subscription sales: O.T.O. Research Corporation plished not only by storm troopers, but on the parliamentary and Takeuchi Bldg. 1-34-12 Takatanobaba judicial level. The national mobilization that secured this setback for Shinjuku-Ku, Tokyo 160 Tel: (03) 208-7821 opponents of the American System can now be escalated.

Copyright" 1981 New Solidaritv. International Press Service All rights reserved. Reproduction in whole or in part without permission strictly prohibited. Second-class postage paid at New York, New York and at additional mailing offices. Subscription by mail for the U.S.: 3 months-SI25. 6 months-$225. I year-$396, Single issue-$IO Academic library rate: $245 per year TImContents

Departments Economics

13 Interview 4 A Caribbean model for C. Fred Bergsten, director international credit? of the new Institute for The advent of International ' International Economics. Banking F acilities in the United States. 44 Middle East Report The U.S.-Israeli 6 Professor Mundell on strategic accord. his gold proposal

45 Dateline Mexico 7 De Chambrun seeks Pol Pot-style experiment gold-reserve system in Oaxaca. A French spokesman revives the approach 57 Interview of Jacques Rueff. Part II: Stephen Mumford ofthe International Fertility 9 Gold Research Program. Along the trading routes .

60 Congressional Closeup 10 Agriculture Soil and water conservation. 64 Editorial U.S. mission to II Domestic Credit stop fascism. Fiscal crunch for states I and localities.

12 The spring strategy for breaking labor A two-tiered approach to negotiations.

14 Currency Rates

15 World Trade

16 Business Briefs Volume 8 Number 48 December 15, 1981

Special Report International National

30 The Fahd plan depends 48 Williams postponement: on a superpower thaw a victory against Abscam 32 U.S. and Soviets The Senate vote on begin disarmament expulsion opens room for negotiations: the counterattack against questions at stake executive-branch frameups By Editor-in-Chief of legislators. Criton Zoakos. Documentation: Excerpts 52 The anti-nuclear coup West German neo-Nazis, shown here at a Frank­ furt action, are in the leadership of the 'green' from the Schmidt-Brezhnev against the Reagan movement. Bossu/Sygma communique and administration statements by both. A resurgence of regulatory barriers to fission power and 18 Green fascism is on the 35 Can Central America technology exports, and rise again in Germany be rescued? new fiscal blows to fusion development. The phenomenon, its The "AI and Fidel sponsors, and its Show" continues. historical parallels. 54 Financial warfare 36 Fidel Castro: how a against the utilities 22 European Labor Party Jesuit asset is The second problem fo r calls for defense of manufactured nuclear power plants: an constitutional rights Energy Insider report. The European Labor Party 38 Mitterrand's first 62 National News demands a mobilization by government crisis all constitutional parties. Economic incompetence is catching up with 24 German Protestants the Socialists. tied to the new fascists 39 Cabinet reshuffle As in the 1930s: by Lyndon H. LaRouche, Jr. strengthens Suzuki Japan's basic policies 26 Avowed neo-Nazis in will remain the same. environmentalist leadership 41 Balkan crisis over 'Greater Albania' 28 The 'green' origins 46 International Intelligence of Hitler's SA

29 Christiania: fascist enclave in Denmark The rest of Europe is not immune. �ITrnEconomics

A Caribbean model for international credit?

by David Goldman, Economics Editor

This week's inauguration, after two years of corporate banks fe ar they will be victimized by such flows, e.g. the infighting, of the International Banking Zones in New European Monetary System, controls will be imposed. York City and other U.S. money centers could mark a Unless the central banks find a means to generate turning point in recent financial history . To the extent orderly forms of liquidity at acceptable interest rates, that various administration officials, including President e.g. by mobilizing their gold reserves to provide low­ Reagan himself Sept. 29 before the International Mone­ interest international trade credits, as EIR has proposed, tary Fund, have endorsed a "Caribbean" model for the this type of monetary disintegration will be the principal developing sector, they have ignored the much vaster fa shion in which a "Crash of '79" becomes manifest. implications for the industrial heartland itself. Should a major crack in the chain of dollar payments The world is entering a liquidity crisis of unmanage­ emerge, for example, the IBFs, as they are called, will able proportions, and therefore world finance is reacting themselves become a principal instrument of U.S. ex­ according to the classical profileof the 1930s: change controls-a means whereby international banks 1) Where liquidity is to be gotten, banks will fight might "walk away" fr om the liabilities of Cayman for it, fair or dirty . Islands subsidiaries made bankrupt by default of their 2) National governments will adopt financial-pro­ debtors-as New York Federal Reserve officials report tectionist measures, e.g., exchange controls, currency in background discussions. blocs, where it protects their liquidity position. Most financial press discussion of the IBFs misfocus There is nothing contradictory in these seemingly on such issues as whether the shift in reserve-free opposed types of action. The Caribbean model as such intern ational banking operations will damage the status was represented at the outset by Jamaica's Prime Min­ of London and other Eurodollar centers relative to New ister Mr. Seaga as a means of capturing the funds York, or whether they will lend unfair advantage to the generated by the country's huge marijuana crop. In a New York banks relative to their continental European liquidity crisis, cash margins of this type-the interna­ competition, as Bundesbank President Karl-Otto Poehl tional narcotics traffic is worth over $200 billion and charged last September. A scan against the financial second only to oil as an item in international trade­ horizon shows that a movement parallel to the IBFs is can become decisive. It only need be remembered that taking place across the entire banking world. the British "gold standard" of the last century was in Britain, as usual, anticipated the most dramatic fact based on the opium revenues of the British East decontrol measure yet taken in American banking a India Company, which covered a 40 percent imbalance year ago, by eliminating the fo reign-exchange controls of imports over exports on the British trade accounts. that had eliminated sterling as an international lending Where banks believe they may capitalize on such currency by the early 1970s; but only as the countdown flows, e.g. the Hong Kongs, Londons, and (as of Dec. to the opening of the.New York free zones began did 3) the New Yorks, controls will be lifted. Where central the full importance of Britain's earlier turnabout be-

4 Economics EIR December 15, 1981 come clear. During October and November London re­ book will not occur, there can be no question about the awoke the financial dead, with a rash of sterling-denom­ seriousness of the economic situation at present. inated loans-including a spectacular £375 million "I hesitate to use the word 'crisis' but I believe that acceptance facility for the Mexican national oil compa­ what I shall have to talk about tonight is a crisis scenario ny Pemex-that returned sterling to a place of signifi­ if ever there was one in the postwar years ...." cance among the world lending currencies. No one "I will readily admit that the European Monetary would have predicted that a billion pounds would be System has performed a good deal better than I expect­ lent in a bare six weeks earlier this year. Effectively, ed at the outset. But I would have to add that I cannot London has become an international banking facility applaud all the reasons why it has functioned better unto itself, drawing strength fr om what most recently than expected [including] the Bundesbank's fe ars that was considered a bankrupt national currency. its monetary policies might be endangered by too large The next step fo r such surprises is likely to be taken a volume of intervention .... The EMS will remain a in Australia, where the Campbell Commission, presided shell that is in constant danger of cracking under the over by the country's premier real-estate operator, will pressures fr om inside, without the promise of a viable shortly give judgment over the Australian system of organism emerging from it. ... We cannot be satisfied exchange controls. Currency the Australian central with a 'zone of monetary stability in Europe' merely in bank intervenes in fo reign-exchange markets to peg the terms of more stable exchange rates supported by Australian dollar to an (unpublished) basket of curren­ intervention obligations, by settlement mechanisms cies of its trading partners. Part of the exchange-rate based on a precarious European Monetary Unit, by management program is a system of exchange controls credit lines involving considerable liquidity creation .... preventing short-term, speculative capital inflows. The "One subject of heated debate among EMS partners Campbell report is expected to argue that the develop­ over recent months has been that of a 'common attitude ment of Australia's natural resources, i.e., one of the vis-a-vis third currencies,' meaning especially a 'com­ world's biggest sprees in real-estate speculation, re­ mon dollar policy.' My own reaction to the various quires complete freedom of capital movement and pressures deriving from developments and policies therefore cannot brook management of exchange rates. across the Atlantic [stems from] the poor chances of any Brazil, meanwhile, is looking toward an offshore intervention on our part with the U.S. authorities . ... market-a "Rio Dollar"-to cope with the fi nancing We may not have lived through the phase of repeated probl�ms associated with a $20 billion annual foreign strains and instability yet. The short-term outlook for borrowing requirements. On Nov. 19 the President of U.S. inflation is clouded more than anything else by the that country's central bank, Gerardo Langoni, an­ size of the federal budget deficit now projected. The nounced in Bahrain that Brazil would bring over a team immediate outlook is clouded also by the prospect of of specialists to study its offshore money market, imply­ economic slowdown which may yet go deeper than ing, according to Brazilian press accounts, that the intended as part of the fightagainst inflation." government now leans toward the establishment of an Poehl, who should (and sometimes does) know offshore money center in Rio. Citibank, the Canadian better, fo rmulated a classy equivalent to. "every man for Imperial Bank of Commerce, and various other inter­ himslef," with the proviso that the salvation, in the national and domestic banks began to float such a fo rm of life-raft sorts of currency arrangements, re­ proposal in 1979, as if in order to say that, because quires increasingly brutal austerity approaches to credit Brazil had already accumulated such great debt, it issuance, along the lines proposed during the last Inter­ " should transform itself into a debt with a country national Monetary Fund meeting by Poehl's Dutch attached, as Voltaire said of Prussia. colleague, the outgoing President of the Bank fo r International Settlements, lelle Zijlstra. Karl-Otto Poehl's revelations Far fr om representing an increment to American The President of the German Federal Bank, who is power, the International Banking Facilities betray the now presiding over a slow but deliberate shift in Ger­ yawning weakness in the dollar credit structure, and in man banking operations from Eurodollar borrowing particular the collapse of the Federal Reserve's ability and lendi ng to German mark-based financing out of to manage dollar liquidity. It is to be emphasized above Germany's own landlocked Cayman Islands, the Grand all that the world is in a liquidity crisis brought on in Duchy of Luxembourg, has stated the matter in theoret­ part by the $140 billion annual fo reign borrowing ical terms. Speaking before a Forex Research confer­ requirement (almost all to refinance debt service) ofthe ence in Paris Nov. 16, he said: developing sector, and what Karl-Otto Poehl euphe­ "As the year is drawing to a close perhaps the only mistically called "a crisis scenario if ever there was one good thing iJJwe can say about it is that the 'crash of 79' in the postwar period." Speaking at the same confer­ has not occurred in 1981.... Although I believe that ence, the chief economist of the Bank for International such a crash as described so vividly in [Paul Erdman's] Settlements, Belgian Alexandre de Lamfalussy, put it

EIR December 15, 1981 Economics 5 this way: "Expenditure-restraining monetary policies money in the United States-bank money, low-powered are unavoidable if we want to put an end to inflation money so to speak-becomes essentially high-powered and so are its costly effects in terms of lost employment money in Europe, so that ordinary deposits in Chase and real income.... [Government must] defuse infla­ Manhattan or First National City Bank in the United tionary expectations by sending more signals about States form not only part of the money supply in that interest rates and credit shortages." country, but also the base of a potentially explosive During fiscal 1981, Manufacturers Hanover Trust money supply in Europe." Could your gold proposal pointed out in their Nov. 23 Financial Digest, the sum work under these circumstances? Wouldn't explosive of fe deral borrowings already equalled net private sav­ money growth in Eurodollars drain away American ings, and this year's deficit threatens to be half again as gold? high as last year's; broadly speaking, the deficits of Mundell: It's possible for it to operate, yes. The problem leading industrial-nation governments due to the con­ is that all U.S. liabilities aren't liabilities of the Fed. sequences of two years' of Paul Volcker's "expenditure­ The Federal Reserve cannot be liable for Eurodollars, restraining monetary policy" are greater than the world only for base money in the United States. To get gold sum of advanced-sector savings, and can only be fi­ fr om the United States you wouldn't be able to take a nanced through the intervention of savings pools like check from a fo reign bank and present it at the Treasury. the OPEC investment fu nds. This means the advanced­ sector governments are not much better off than those Goldman: Let's say that U. S. Steel borrows $1 billion of the Third World. abroad to buy Marathon Oil, and Marathon stockhold­ ers get that $1 billion in the form of checking accounts at U.S. banks. Could they use these dollars to buy gold fr om the Treasury? Mundell: No, they would have to pay fo r gold in base money, in cash. That way the dollars coming into the Treasury would cut the reserve base of the U.S. monetary system, and would eventually create a squeeze on the Eurobanks. If the Fed doesn't replace those dollars, total reserves will be lower in New York, and this will have an effect throughout the financial markets. Any reduction in the monetary base will create a multiple contraction in the volume of quasi-dollars in the Euromarket. The Fed would only give gold in return for Professor Mundell real dollars, fo rcing a withdrawal of cash fr om the bank­ ing system . on his gold proposal Eurodollars are not real dollars, but bank debts. To buy gold people would have to take vault cash out of the banking system [which fo rms part of banks' reserves­ Professor Robert Mundell, fo rmerly at the International D.G .], and that tightens the system. Monetary Fund and University of Chicago, is the acknowl­ edged creator of the "supply-side economics" promoted by Goldman: With the introduction of International Bank­ his graduate student A rthur Laffe r and fo rmer Wall Street ing Facilities, Federal Reserve officials are pointing to Journal editor Jude Wanniski. the factor of country risk-that IBFs are safer fo r depos­ In this Dec. 3 discussion with EIR's David Goldman, itors than bank foreign subsidiaries that might be aban­ Professor Mundell shows how his gold plan would prevent doned in case of a series of defaults on the international excess money manipulation in the Euromarkets from market, after which dollar liabilities would be frozen. draining U.S. gold reserves, but acknowledges that specu­ How does your proposal address this problem? lative capital inflows from the Eurodollar market might Mundell: This is a danger. That is why gold must be turnin to a squeeze on American banking resources. remonetized at a comfortable price. . In addition, he warns of a possible credit crack and It would be a great mistake to set the gold price at a argues fo r a gold price high enough to generate internation­ low level. There would be serious risks in putting the . al liquidity sufficient to prevent this. price of gold too low in a completely convertible gold standard system . For example, a level of $200 to $300 Goldman: Professor Mundell, in 1971 you warned that would be too low, but a level of $400 to $500 would be "we have moved into a system where what is ordinary comfortable.

6 Economics EIR December 15, 1981 convertible into gold have a fixedexch ange ratio between themselves refering to their counterpart value in gold. What broke the gold standard? The financial necess­ ities of World War I obliged the participating states in volved in the conflict to run into deficit in order to finance the military needs. The United States, who was the main industrial supplier of the Allies Qecause of the De Chambrun seeks power of its industry, had themselves extended large credits mainly to France and England, breaking away themselves in the fo rm of credit from the gold standard. gold-reserve system Due to these particular factors of excess dollars being supplied to the allied nations and coming back to the The fo llowing slightly abridged contribution to the debate United States in the form of industrial orders, inflation over international gold remonetization was drafted by the had struck the United States, prices had gone up 50 Comte de Chambrun, who was State Secretary fo r Foreign percent, and even though at the time e.ver ybody thought Trade under President de Gaulle in 1966-67, Vice-Presi­ that it would be possible for the Occidental nations to dent of the National Assembly's Foreign Affa irs Commis­ bring things back to normal, in 1922, a major phenome­ sion in 1968-71, and is now active in business andfin ancial non intervened and the fact was that all the prices had circles. During this year's French presidential race, he gone up except the price of gold. This meant that there made a tour of the United States along with Gaullist leader wasn't enough gold available in all the central· banks to Michel Debre. Emphasis is in the original. allow the Occidental nations to re-establish the metallic convertibility. This is a first draft paper for the purpose of explain­ The temptation to draw the world out of this embar­ ing, on one hand, the principle of the gold standard rassment appeared in the form of a document called theory, and on the other hand, the political advantage " Document No. 9" at the International Monetary Con­ that the Arab producing states could obtain if they ference recommending to member states to save the use ' decided to make a world proposal based on that theory. of gold by the use of drawing rights upon one another. One could summarize the situation of the oil producing This meant that in fact the member states could not only states of the Arab peninSUl a in the fo llowing manner: create money as before against gold or credits labled in They are accused of being hoarders, of putting in their own [}}Oney, but also, and this is an important perjl the world economy, of risking to precipitate the factor, against any type of credits in fo reign monies world into general conflict, and as fo r themselves, they provided that these fo reign monies were themselves con­ are faced with the knowledge that unless they fi nd some vertible into gold. For reasons which have no importance global re-investment solution, they face the risk of hold­ in this demonstration and with the exception of the ing in their hands, over the next few years, a great deal of English point up until 1931, only one money could offer accumulated assets having only paper value. itself the luxury and that was the dollar. At that time, Nevertheless, I am struck by the fact that today they nobody among the experts that had invented this medi­ are probably the only political fo rce in the world able to cine fo resaw that they had introduced a shock in a school straighten out the disorders that world economy has of butterfish. The shock was the dollar in regard to all faced since 1950, disorders fo r which they are not respon­ the Occidental monies. sible. The principal consequence of this system was that First, I would like to describe very briefly what the· whenever the United States had to buy outside merchan­ gold standard theory is as expressed by Mr. Jacques dise or wanted to make loans or make any type of Rueff, world authority on the subject since 1922, Chan­ substantial expenditure-military, for instance-they cellor of the Institute of France, and whose predictions, did not have to put fo rth any gold. They could pay in even though condemned by most American economists, dollars, but these dollars in Paris, London or Berlin were have unfortunately proven themselves to be true over the of no particular use, so the same day they were sent back last decade. on the American money market. This boomerang system What does the gold standard mean? It simply means gave to the United States this unique privilege denounced that all major currencies are in stantly convertible into for so long by General de Gaulle and financed their gold at a set reference value. To the bearer of a bank fo reign deficitin their own money.

note, his note is worth x quantity of gold. One could argue that this was not the cause of having What does it imply? Central banks must keep a a deficit in their balance of payments ...in theory, but in reserve of gold suffi cient within reason to meet any fact, it is only human, and when one has the right or the demand from creditors . This also means that monies facility to run up a deficit, he uses 'it and this is what

EIR December 15, 1981 Economics 7 happened to the United States. Their balance of pay- - buyings on the international market. These two dates are ments was in profound and permanent deficit, and the very important. They will prove to be important dates in creditor states which had bought enormous quantities of the history of humanity since in the meantime, a new dollars started to print national money against these factor had appeared which seemed insignificant in the dollars which had been sent back to American banks beginning and was originally provoked by the Soviet under the label of dollar balances. Union in 1952. At the time, we were in a Cold War and So, in comparison to the gold standard, the gold the U.S.S.R. feared that its dollar holdings would be exchange standard created a diabolical situation where blocked or seized, and they gave instructions to the two the United States had no immediate disagreeable conse­ banks that represented them in the Occident to sell these quences of this position as debtors because the very day dollars on the European market. The Eurodollar was they supplied dollars to someone, they recuperated them born-a money without attachment of any kind discov­ under a different label. This allowed them the next day to ered a ho le in the wall, and became a suppletive money buy again something else with money that they owed. and has today more than the total monetary circulation This has been called the privilege of deficit without tears. in the European countries. Under the principle an­ For American businessmen, it was indeed a golden age. nounced by the English economist Hartley Whithers, For the creditor, there are three inconveniences. First that "loans make deposits," all the private banks have of all, world economy being tied together in one fo rm or become, through the Eurodollar, monetary institutes. If another, the permanent increase of the American deficit one looks at it this way, there is no finaldiscou nter of the one day has to turn ag ainst the creditor. At the limit, the money. This is a tremendous danger to the world econo­ debtor becomes incapable of paying his debts. Secondly, my. the countries that held these dollar balances created as a What is the remedy to that situation? counterpart in their own country, national money which 1) One remedy would be to say that national banks generated inflation. Finally, even though in theory it was do not open credits in any other money other than the the gold-exchange standard, there were accumulated money of their own country . paper holdings on a country whose reserves in gold and 2) To revalue the gold reserves to a price more fo reign exchange didn't increase in proportion. There is compatible to provoke the gradual reabsorption ofthese no need to be a great prophet to predict that this should liquidities which are flowing fro m one fi nancial place to inevitably lead to a dramatic end. This is what happened the other. in October 1929. Unfortunately, human memory is short 3) The third would be to create a Marshall Plan in and since 1959, everybody started acting as if everything reverse, which would be in the form of non-American was forgotten. states disposing of dollar balances in the form of a long­ Time and time again since 1960, American Secretaries term loan at low interest. The loan amount loan should of the Treasury have openly said that the American be at least equal to the added value resulting from the deficitand its balance of payments would be stopped and setting of the price of gold, in order to allow the Ameri­ time and time again, the gold standard experts, Mr. cans to re-establish the convertibility of the dollar into Rueff particularly, have specified that with this sytem, it gold. Then, providing that rule number 1 be kept and would not do so, and that on the contrary the deficit convertibility maintained against any outstanding credit would increase, which it has co nstantly done. balance, the economic system would return to normal. During this period, theoretically, all the creditor It seems evident to me that the Arab nations are today countries could ask to be reimbursed for their dollar in a position to take the lead in such a move . Needless to balance with gold. Then the United States started to say it is the preoccupation of their leaders to maintain apply pressure so that the creditor countries would not the purchase value of their surplus monetary balance. If do so . Furthermore, they offered interest, sometimes at a the world goes into the economic chaos threatening to­ very high rate, to induce the creditor countries not to day, the credit balance of the Arab states will become require the exchange in gold. They are dong something worthless. Furthermore, they will be accused, wrongly, similar toward the oil producing countries at the mo­ of course, of having created world depression. ment. But, finally on Aug. 15, 1971, the President of the From a political point of view, I think that it is United States had to announce to the world the end of indispensable that they soon make a major proposal, the dollar convertibility into gold. This marks the date of which would be in their own interest, obviously. If the beginning ofthe monetary crisis. brought to success, it could present them as the savior of The second important date was the 13th of March, the Occidental economy . Psychologically the moment is 1973, when the European States and Japan stopped the right. Everybody is talking of the recirculation of Arab machine in the sense that they decided that day against dollars, but nobody is giving a satisfactory solution. I the terms of the Treaty of Bretton Woods and that they think that it is along the lines expressed in this note that would not intervene to sustain the dollar by massive we have the elements that could upturn the situation.

8 Economics EIR December 15, 1981 Gold by Montresor

Along the trading routes used as means of purchasing illegal O/ Turks, Iranians, Italians, Viennese, and some remarkable drugs and weapons, in particular in East bloc operatives. the Near and Middle East. Much of this jewelry is wrought in Floren­ tine workshops, under the aegis of the Monte dei Paschi bank, which then has it shipped especially to Syria and Dubai. These seem to be Impeccable sources in the Paris profound comment on the state of the major transshipment points fo r gold-trading community report the world is that my Paris source the sale, resale and smuggling oper­ some startling features of the past added that the gold is retailed to the ations, in particular into the Soviet few years' international gold fl ows, world market by way of Bulgaria­ Union, where gold jewelry is a which reveal as much about the upwards of 100 tons of gold has this much more convenient source of actual controlling fo rces of the in­ year alone been officially or unoffi­ value than, say, Exxon or IBM pre­ ternational economy as about the cially shipped through the old Slav­ ferred stock. gold trade itself. Private citizens in ic kingdom. Byzantine Bulgaria, Libya, an old Italian colony, is Turkey are now dumping on the later Ottoman Bulgaria, was sub­ today a main ground for collabora­ world market the up to 90 tons of ject to the rule of both the Phana­ tion between secret entities of East gold acquired in a short period until riot and the Ladino financiers, who and West, both of which obviously three or fo ur years ago. In the con­ ran the Sultan's finances as well as see fit to accumulate as much gold text of the Organization of Eco­ his administration and fo reign ser­ as possible. As far as the East is nomic Cooperation and Develop­ vice. concerned , I refer to the recent 24- ment-led destructive austerity poli­ The famous French investment hour decision taken by the Buda­ cies fo r the Turkish economy last bank Paribas, the Banque de Paris pest authorities to join the IMF. year, the International Monetary et des Pays-Bas, was established in Hungary's central bank figurehead Fund was able to insist that, as a 1872 at the initiative of a Ladino Janos Fekete, also a fixture of Basel precondition for any loan , banks family of "Royal Sephardic" Por­ BIS meetings, has not given one should not scrutinize any cash de­ tuguese Jews, the De Camondos. major speech in the last five years posits likely to come from the so­ They were among the Portugese without stressing the urgency ofre­ called "black economy" too kings' premier financiers before the turning to some form of a gold closely. The more recent military Inquisition in 1492. After a half standard. Now, the fo rint will grad­ coup d'etat has put financial con­ century in Venice, the fa mily was ually be made convertible. At the trol of Turkey in the hands of brutal dispatched to Stamboul. There the Hungarian national bank before monetarist henchmen like Turgut De Camondos were for more than 1945 Fekete wore the livery of the Ozal, Deputy Prime Minister. The three centuries prime fin anciers of local subsidiary of the Rothschild age-old tradition of the ruling the Sultans. In the middle of the bank. Greek Phanariot princelings and 19th century, a young De Camondo Fekete is a prominent member the Ladino bankers is back in fo rce inherited fr om his father a fabulous of the Siena Group, along with in Stamboul. (1840 equivalent) $30 million, Robert Triffin, who sees our mone­ Private Iranian citizens are also which explains the fa mily nickname tary future in gold-mediated "re­ liquidating the vast private gold "The Rothschilds of the East." gional currency blocs," and Art hoards accumulated under the More of the picture can be put Laffer's mentor Robert Mundell, Shah. It would be enlightening to together fr om the gold routes. Li­ whose gold proposals, directly in­ know the names of the fa milies bya, the same Paris source indi­ spired by BIS ex-head Jelle Zijlstra, presently controlling usury at state cates, has bought up to 90 tons of are currently being discussed by an level in Teheran, and it would not gold this year, part in the fo rm of unsuspecting President's special be surprising to findthat some are ingots for central banks' use, part in Gold Commission. Old, old geo­ as old as the hidden Imam himself. the fo rm of jewelry. Wrought gold politics, gold-plated, shine through What makes these situations a is very easy to smuggle, and is often the modernized liveries.

EIR December IS, 1981 Economics 9 Agriculture by Susan B. Cohen

Soil and water conservation soil conservation service are hard­ The administration/ails to see it's an economic and not an pressed to find any merit or logic beyond crude budget-cutting. environmental problem. Technically the proposal was made in response to requirements of the Resource Conservation Act. But what RCA specifies,one source cause of the problem, and attack pointed out, is that such proposals At a press conference before the federal farm programs for en­ be based among other things on a Thanksgiving, Agriculture Secre­ couraging "high-cost cultivation thorough review and evaluation of tary Block told reporters that once methods." existing programs. This, they insist, the farm bill is finally out of the In line with this, NRDC has was not done. Indeed, the program way, soil and water conservation mounted a campaign to hinge eligi­ evaluations cited in USDA's 1981 will head the U.S. Department of bility for participation in the farm Program Report are either outdat­ Agriculture's list of legislative programs by an individual produc­ ed or have not yet been completed. priorities. A month earlier the Sec­ er on his implementation of a speci­ The claim that the proposed pro­ retary appeared before the Senate fied set of conservation measures. gram will be more effective than Agriculture Committee to present Since producers don't have the cap­ existing programs is questionable. the outlines of the department's ital to invest in conservation meas­ It is likely that the plan did not proposed program, a sharp depar- , ures to begin with, this proposal is a in fact originate in USDA at all. It ture from current policy. prescription fo r squeezing fa rmers is widely rumored that the plan was USDA estimates that America out of business at an even faster a surprise to Block himself, who is is losing about 5 billion tons of pace than recent years. reported to have been handed the topsoil every year to water and Instead of building soil fe rtility program and ordered to go with it wind erosion. The erosion affects the environmentalists would cut by David Stockman's OMB. The both cropland and rangeland, esti­ back production to conform to plan is frankly based on the as­ mated to be producing fo rage pres­ growing infertility . sumption that its aim cannot be ently at about 50 percent of capaci­ But Secretary Block's program achieved-that any program that ty. Approximately one in four acres will create the same result by a dif­ would actually reduce soil degrada­ of cropland is affected, and USDA fe rent path . The program outline he tion to tolerable limits would be estimates that failure to halt the presented has two main fe atures. "prohibitively expensive." resulting productivity loss will First, it will establish specific na­ Nowhere is the real cause and mean giving up 75 million metric tional priorities for the conserva­ solution of soil erosion in the U.S. tons of grain production every tion effort starting with soil ero­ addressed. The simple fact is that year-equivalent to half last year's sion. (Proponents contrast this with producers have been forced at an exports. the first-come-first-served "cafete­ accelerating rate to fo rego capital The problem is real. But the ria" approach of existing pro­ investments in the maintenance of remedies advanced so far, whether grams.) Second, and further-reach­ their soil-just as they've bl!en fr om the environmentalist camp or ing, the program will shift respon­ forced to forego capital investment the USDA, are unlikely to do any­ siblity for funding and direction to in machinery-under circumstan­ thing but make matters decidedly the states, transforming current ces of a cash flowsq ueeze. worse. federal program fu nds into match­ Soil erosion is the hidden price environmental lobby's pet issues. ing block grants to states already of operating at below the cost of They have harped on it to bolster undergoing a fiscal crisis. The plan, production for more than 30 years. their assertion that there are "lim­ which will require legislation and Only a parity price for American its" to growth. The National Re­ cannot in any case be implemented farm products, based on the profit sources Defense Council and before 1983, has caused a fracas necessary to assure reinvestment Council on Environmental Quality within USDA. Knowledgeable in­ for future production, will solve the identify "overproduction" as the dividuals both in and outside of the problem.

10 Economics EIR December 15, 1981 Domestic Credit by Richard Freeman

Fiscal crunch for states and localities This crisis is likely to affect the The recession, tax revisions, and federal cutbacks are having a credit markets in several ways. Ac­ dramatic, destructive effect. cording to Manufacturers Hano­ ver, $50 billion of the $110 total surplus in the fo ur years ending in 1980 went to purchase U.S. govern­ ment securities. Some of these were purchased directly with the operat­ Information reported in two recent spending limitations reduce their ing surpluses, which will certainly bank newsletters confirms that available fu nds. Coupled with gen­ be sold when the deficitma terializes state and local-level government fi­ eral economic stagnation, these next year. With cuts (or ceilings on nances are heading sharply into the factors would have reduced the sur­ increases) in various federally sub­ red, with major negative conse­ plus to nearly zero even without sidized entitlement programs, so­ quences for fi nancing urban infra­ fe deral cutbacks. cial insurance funds will also be structure, for the capital markets, According to the Morgan likely to sell U.S. government secu­ and for efforts to limit the effects of Guaranty letter, the co ngressional rities. the current recession. reconciliation bill is expected to re­ This means not only that the According to the Morgan Guar­ duce fe deral grants by $7 billion state and local contribution to net anty Survey for November, the op­ from the $94 billion recommended national savings (15 percent last erating balance of states and mu­ by President Carter. In real terms, year) will shrink, but that federal nicipalities as a whole is headed for this is a 14 percent fa ll (8 percent in borrowing will now need to soak up a $5 billion deficit in 1982, the first current-dollar terms) during 1982. even more funds fr om the private deficitsince the 1975 recession. This This contrasts with an annual 6 per­ markets, including whatever the fo llows five years of declining sur­ cent real rise during the past dec­ state and local governments sell pluses, which have shrunk fr om ade. Moreover, several provisions plus what they would have normal­ $10.1 billion in 1977, more than $9 of the Economic Recovery Tax Act ly bought, but will not be able to, billion in 1978, $3 billion in 1979, of 1981 may reduce state and local this year. As Manufacturers Hano­ just over $2 billion in 1980 and tax collections by $2.5 billion, be­ ver points' out, "astonishingly, in almost $4 billion estimated for this cause of the close linkage of state fiscal 1981, total fe deral and feder­ year. Next year's shortfall results tax bases to federal income-tax re­ ally related borrowings were al­ from the cutbacks in fe deral grants turns. Many of the federal personal ready just about equal to net private to cities, an adverse impact on state and corporate tax reductions will savings." So the added strain will finances from the Economic Re­ automatically lower state levies, simply "displace fu rther private covery Tax Act of 1981, and the unless tax rates and schedules are sector credit demands." shortfall in tax revenues. changed which is often impossible. Note that even while running The Manufacturers Hanover Fi­ As the recession deepens, sales the nominal surpluses in recent nancial Digest for Nov. 23 reported tax revenues fall with softening years, most municipalities, espe­ that, adding in revenues derived sales; income-tax levies decline with cially the medium-sized and larger from retirement and disability con­ lowered incomes and ballooning cities, have vastly underi nvested in tributions, states and localities unemployment rolls; and welfare renewing their infrastructure, from reaped a cumulative surplus be­ and unemployment payments rise. · bridges and roads to sewers, water tween 1977 and 1980 of $110 bil­ Morgan estimates that even with supplies and mass transit. With his­ lion, of which $24 billion was in the new revenue-raising actions of torically sky-high borrowing rates operating balance account. This some 30 states this year, state and for city bonds likely to continue surplus has been cited to indicate local tax collections will grow at indefinitely, combined with the ex­ that the cutbacks in fe deral aid will only 9 percent next year, down pected deficits, infrastructure in­ not create a crisis. But beginning from II percent this year. But even vestment will be cut still fu rther, with Cali fornia's Proposition 13 in this assumes a mild and short-lived portending a virtual collapse of 1978, many states have seen tax and recession. many urban services.

EIR December 15, 1981 Economics II well as regulars and extra drivers, can be pushed aside alongside with other work rules. Harold Gibbons, the social-democratic chief of the Teamsters St. Louis-based The spring strategy region, has already publicly announced that the union will allow a bargaining away of the distinction between for breaking labor short-haul and over-the-road drivers. Rail operating unions: Last month, the railroads al­ lowed a relatively generous 32 percent wage settlement Johnson by Leif over 39 months to the rail clerks and other non-operating crafts as a ploy to win major work-rule abolitions from University-based organized labor controllers have re­ the operating employees, who have yet to settle. vealed the outlines of a spring offensive against labor in Auto: The target here is quite different, fo cusing on the United States. On the basis of a highly specificunion­ direct wage cuts. General Motors wants to reduce the by-union map, labor's remaining political and organiza­ present average $12 hourly wage to something close to tional power is to be undercut without destroying the $8 and scrap as many of the health, pension, and other outward institutions themselves. The unions will be al­ benefits (including vacation and sick leave) as possible, lowed to remain as enforcers of new levels of austerity although American auto production would not be com­ against the workers in their own industries-particularly petitive with the more intensively capitalized Japanese in auto and rubber. industry even if wages were equal (see EIR. Nov. 10). This is the outlook at MIT and other adherents of the Blaming the auto production worker for the produc­ Tavistock Institute approach to psychological warfare tivity gap with Japan and other foreign manufacturers is on behalf of de-industrialization, originally developed currently the goal of a fo rmidable propaganda barrage through Britain's World War II Special Operations Ex­ in the U.S. press. Typical was an article in the Dec. 3 ecutive. Wall Street Journal by John Schnapp of the Boston­ Traditional bargaining in every third year, such as based consulting firm Harbridge House. 1982, would begin with construction. The results influ­ Schnapp deems the 1982 auto negotiations the "last ence the Teamsters talks, which in turn affect the out­ hurrah" for the stability of the UAW, which has conclud­ come of the September auto bargaining. This year the ed three-year pacts with the automakers since 1948. line-up will be broken, and the premise will be that scared Schnapp's explanation is that UA W President Doug workers will accept large cuts in their standard of living. Fraser, the last of the 1930s-generation ofUAW leaders, Building Trades: Talks begin in April. Homebuilding has ignored the fact that "U.S. auto workers are not has collapsed. A 30 percent decline in state and municipal conscientious about productivity, uncaring about quali;­ road and public works construction and a drop in office ty, and have no sense of commitment to the interests of cpnstruction are expected. This comes on top of a decade­ their employers." long open-shop and ostensible Affirmative Action attack According to a Midwestern academic who worked on the unionized industry, and a tradition of grudging with the United Auto Workers leadership under UAW union acceptance of wage cuts and "double-breasted presidents Walter Reuther and Leonard Woodcock, GM shops"-union firmsthat also run a non-union side. will convince the workers to accept the wage medicine by Teamsters: The "double-breasted" pattern, as well as passing up its fo urth-quarter dividend-the first such wage reductions, have spread in the trucking industry, omission since the Great Depression. which has been thrown into increasing chaos by the 1980 The UAW, which claims to have a close reading of deregulation measures and the industrial effects of Re­ the pulse of its more activist mem bers, will emphasize a serve usury. "small-is-beautiful" campaign, arguing that it is not The main effort against the Teamsters is to wreck the wages that count but a spirit of union-management Master Freight Agreement, i.e., nationwide work rules collaboration, to save the industry so the industry can and pay schedules for over-the-road drivers. Once the save jobs . Former UAW Vice-President Irving Blue­ Master Freight Agreement is shredded, an event that stone, now a labor controller at Wayne State University would grant finalsuccess to the Kennedy family vendetta in Detroit, is a leading fo rce in the Quality of Working against ex-Teamster president Jimmy Hoffa, the union Life movement designed to convince workers that (as locals will have to deal on a company-by-company basis Hitler claimed vis-a-vis Western Europe) workers and with the truckers. corporations together are really proletarians in common One top Tavistockian operative at MIT predicted struggle agairtst aggressive Japanese capitalists. that as soon as Master Freight is dead, the 70-hour Once auto wages have been pushed down to the blue­ weekly driving limit can be eliminated, and distinctions collar average, steel can be picked off next year, accord­ between over-the-road, short-haul, and city drivers, as ing to the Tavistockian labor academics' plans.

12 Economics EIR December 15, 1981 the Third World, and phasing out the dollar's world Interview reserve role. EIR's Stanley Ezrol interviewed him on Nov. 23; excerpts follow.

Ezrol: Is there a particular ideological bent that the Institute has? Bergsten: No, no. I think everybody was very clear from the outset there would be no ideological bias, no political bias; it would be an objective research institution .... The only [project] that we've launched definitively is on the question of conditionality of IMF lending pro­ grams .... John Williamson, a senior member of the staff here, will be directing that study. We will be spon­ soring a major conference March 24 through 26 to discuss the issues with about a dozen papers presented by top economists and others fr om around the world on the C. Fred Bergsten sees subject. ... continuity between Ezrol: In looking at your Board and your Advisory Committee, I find people who have been intimately involved in fo rm ulating policy-people like Dr. Mahbub Carter and Reagan ul-Haq of the World Bank; Lester Brown, who certainly represents a particular point of view, and Alan Green­ A Brookings Institute fellow who was Jimmy Carter's span, who may represent a different view. How do you Assistant Treasury Secretary for International Affairs, see this diverse group as being able to affect policy­ C. Fr ed Bergsten was recently selected by the German making in a coherent way? Marshall Fund as executive director of their new U.S. Bergsten: Well, the diverse group was chosen because of venture, the Institute fo t Internatio nal Economics. As its diversity ....We're not trying to forge any consensus described in a Nov. 9 statement by the Fund, the institute in either our board or our advisory committee as to the is intended to influence U.S. foreign economic policy, substance of our research. I think it probably will be because the Fund concludes that "there is no existing possible to forge some kind of consensus-not a unani­ U.S. institution which addresses international economic mous view, but a majority view-on what are the most issues on a sufficiently sustained and policy-relevant important issues ... but the research will be carried by basis. " the staff of the Institute itself, and that's not going to be The German Marshall Fund was established in 1972 affected by any particular policy views on the part of the under the chancellorship of Socialist International board members or advisory committee members or any­ Chairman Willy Brandt to promote "post-industrial" body else. and "alternate life-style" policies of zero-growth. It is financed out of West German tax revenues. Its board of Ezrol: Doesn't the inclusion of someone like Lester directors and honorary committee include Mr. Brandt; Brown, who is generally considered to be somewhere out C. Douglas Dillon; John J. McCloy; John B. Conant; on the environmentalist fr inge, tend to detract from the David Rockefeller; Milton Katz of the Ford Foundation credibility of whatever the Institute does overall? . and Carnegie Endowment; Gabriel Hauge of Manufac­ Bergsten: I would have thought it was the other way turers Hanover; Russell Train, U.S. President of the around, fr ankly-I wouldn't characterize Lester as being World Wildlife Fund; Paul G. Hoffman, former Mar­ on the fringe, incidentally, he certainly is deeply con­ shall Plan administrator, now at New York Life Insur­ cerned wtih environmental issues and things of that type; ance Company; Guido Goldman of the Aspen Institute; but no, I think it's important for us in fo rmulating our and B. R. Giffo rd, director of the Russell Sage Founda­ work program and our product to make sure that we described in a Nov. 9 statement by the Fund, the institute take account of the whole range of considerations . . . . I and pilot projects in both the United States and West regard it as a strength to have a guy with that particular Germany; funded the "Eurosocialism" conference in expertise and point of departure involved in our pro­ Washington on Dec. 5-7, 1980; and helped to launch the gram. World Bank's Brandt Commission on North-South is­ sues. Mr. Bergsten himself is known as a spokesman fo r Ezrol: It seems like there may beso me difficulty there in abolishing industrial and export-financing subsidies in making your influence fe lt. The previous ad ministration

EIR December 15, 1981 Economics 13 seems to be very heavily represented. Bergsten: Well, I don't know. You've got George Schulz, Alan Greenspan, and Pete Petersen, and Dennis Currency Rates Weatherstone and people like that. You've got a number of people there that clearly are not related to the previous administration, and, in fa ct, many of them have pretty good ties to this administration. Be that as it may, I think there's an important point here, in relation to the ques­ The dollar in deutschemarks tion of influence. When we talk about influence, we're New York late afternoon fi xing talking not only about trying to get specific recommen­ dations accepted, but providing a better analysis, a better 2.35 understanding of what the issues are and what their 12.30 1 implications are .... The whole area of international 2.25 -- ./""\.. economic policy has tended over the years to be pretty '\- .,.,.." ..... non-partisan. You can think of a few issues where that 2.20 '--- r breaks down, but on balance, there has been pretty bi­ ...... I partisan and even non-partisan continuity of U.S. policy �I 10/ 14 10/21 10/28 11/4 II/II 11/18 11/ 25 12/2 in the international economic area, really through the whole post-war period .... Thedollar in yen Ezrol: Peter Petersen, the Chairman of the Board of the New York late afternoon fixing Institute, served on the Brandt Commission; would you characterize that as fa lling into what you call the "prag­ 230 I matic mainstream"? 220 � Bergsten: Well, ah , the first point, of course, is to say that Petersen's been 'i nvolved in other things as well. He's 210 � �./., � been heavily involved in U ,S. trade matters, investment '-- 200 matters, in monetary matters as well. . ... I don't know I that every commissioner of the Brandt Commission 1 90 I 10/ 14 10/21 10/28 11/4 II/II 11/18 11/25 12/2 agreed wit.h every proposal in the whole report. ... In the international economic area, I would come back to the fact that all administrations, whether liberal or con­ Thedollar in Swiss francs servative, including the current administration, support New York late afternoon fi xing most of the tenets th at have underlain policy throughout I the post-war period. 1.90 � -- V The current administration is certainly supportive of 1.85 , the open trading system . They've been taking initiatives to reduce trade barriers fu rther. They've been taking 1.80 � lAo -- important initiatives to try to start on a process of 1.75 l/'V reducing international barriers to investment flows. So I think in that major area, they're very much continuing 1.70 10/14 10/21 10/28 11/4 II/II 11/18 11/ 25 12/2 the policy stream of the past 30 to 40 years . In the monetary area, they've certainly supported the system of flexible exchange rates; thetve certainly sup­ The British pound in dollars ported the central role of the International Monetary New York late afternoon fi xing Fund. There have been a couple of areas in which they've made some changes at what I would call second orders of 1.95 .. ,." magnitude. Things like intervention in the exchange 1.90 -- .... / markets, comments on some of the terms of IMF lending, - fo r example. They have raised some questions about the 1.85 ,..- ...... I � proper role of the World Bank, and the multilateral 1.80 development banks as a channel fo r assistance to the developing countries, vis-a-vis bilateral channels or pri­ 1.75 10/ 14 10/21 10/28 11/4 II/II 11/18 11/25 ·12/2 vate market channels. But even there, they've supported all of the commitments of the previous administration.

14 Economics EIR December 15, 1981 Wo rldTrade by Mark Sonnenblick Cost Principals Project/Nature of Deal Comment

UPDATE

$42 mn. Iran/New Zea­ New Zealand studying Iranian request that it accept Iran joins Algeria, an­ land barter payment in oil for more than 20,000 tons lamb other high-price oil pro­ sold to Iran. Iran is suffe ring severe cash-flowproblems ducer run by fundamen­ at the central bank, which have delayed payments on talists, in pressing for current imports and led New Zealand to embargo barter system. fu rther shipments, including some lamb already loaded on ships.

$100 mn. Brazil from Port expansion loan committed over a year ago expect­ Funds provided by Ja­ Japan ed to be signed in December. Goes toward Tubarao pan's Overseas Econom­ port for Brazilian-Japanese export-oriented steel plant, ic Cooperation Fund to be completed in 1983; also for new port at mouth of may be spent in Japan, Amazon which will service new alumina-aluminum Brazil or other develop­ complex, and possibly Amazon basin grain barges and ing countries; 5.75% on ores fr om fa bulous Carajas mines project. yens for 17 yrs. Japanese funding for the Carajas mines have been de­ layed; watch effects of new cabinet shift.

NEW DEALS

$1.6 bn. Venezuela Italian state IRI signed agreement with the Venezuelan from Italy Investment Fund as framework for contracts during coming year. Projects include steel rolling mill, devel­ opment of Zulia coalfields, and a number of hydroelec­ tric, shipbuilding, and bauxite projects for which IRI is competing.

$333 mn. Norway from Norwegian state oil company gave contract for 850 km. Pipes are uncoated 36- W. Germany/ of steel pipes for gas-gatheri ng systems to Mannes­ inch to 30-inch. Japan mann, Bergrohr, Nippon Kokan, Nippon Steel, Sumi­ tomo Metal, and Kawasaki Steel.

$290 mn. Brazil from Petro bas has contracted Worley Engineering, Micoperi, U.K.jltaly and the Brazilian Montreal Engenaria for installation of gas- and oil-gathering systems on offshore platforms in Campos Basin.

$72 mn. Greece fro m Krupp and Siemens, plus Biex of Greece, will make 2 Greek companies will W. Germany rotary shovels for open-pit coal mine. Shovels weigh get 40% contract. 5,400 MT each and have 105,000 cubic meters daily capacity:

$26 mn. Colombia from Fujitsu will deliver a telephone exchange for Medellin Turnkey basis. Japan starting in 1983. Fujitsu won bidding for 5,600-circuit electronic digital system.

$50 mn. Nigeria from 100,000 tpy steel lamination plant is being designed and One of many light indus­ Italy supervised by Danieli di Butterio of Rome. trial steel plants near Ekket.

$58 mn. Abu Dhabi Make and install 100 megawatt electrical plant using its Turnkey basis. from U.K. gas turbine generators.

$50 mn. Algeria from Rudic had received order fo r two shoe factories each Contract includes train­ Yugoslavia producing 1,350,000 pairs per year. ing Algerian workers.

EIR December 15, 1 98 1 Economics 15 Business Briefs

u.s. Economy hon Keizai Shimbun, Japan, though not 'There are even reports of infanticide in named, was the report's major target. In city hospitals, with doctors killing babies Machine-tool orders particular, government support for a rev­ immed iately after birth if they are third olutionary fifth-generation computer children." one-third below last year's that could challenge IBM's technological supremacy was seen as a target. For the first IO months of 1981, machine­ Japan, backed by France, attacked 'Risk Analysis ' tool orders have averaged more than a the OECD p'roposal, but Germany and the U.S. pushed through the majority third below the net orders of the first 20 IRIS to be a months of 1980. view. Ironically, it was American fo und­ Net orders for 1980 (which subtract ing father Alexander Hamilton who pro­ unique operation cancellations from total new orders), av­ vided Japan with the model of govern­ eraged $388 million per month for a year­ ment-aided industrial progress. The International Reporting and Infor­ ly total of $4,662 million. mation Services or IRIS, formed at the The first 10 months of 1981 produced end of November, claims to be the largest net orders of $253 million per month, or Peking 's Program private intelligence agency in history. It 34.7 percent below the 1980 levels. boasts of computer facilities, based in The industry's order backlog stood at Chinese continue Crystal City, Maryland, larger than the $5,027 million in January 1981. The fig­ CIA's computer in Langley, Virginia and ure for October 198 1 was only $3,360 decapitalization plans the capabilities to monitor all interna­ million. tional publications and radio and televi­ The dramatic plunge of net machine­ The National People's Congress, the sion broadcasts . Incorporated in the tool orders indicates that the auto indus­ Chinese rubber-stamp parliament, was Netherlands, IRIS is run out of Wash­ try, the largest purchaser of machine addressed by Premier Zhao Ziyang at the ington, D.C. from offices of the Govern­ tools, is carrying out its threat to scale opening of its meeting in Peking Nov. ment Research Corporation, the publish­ down investment while seeking produc­ 29, and told that China would have to er of the National Journal. According to tivity increases by trimming the work­ suffer at least five more years of austerity, press accounts, it employs more than 120 force. which Premier Zhao calls "adjustment." fo rmer CIA agents and scores of other The figures also indicate that the in­ Zhao made it clear that the policy of fo rmer intelligence agents and analysts creased defense budget has yet to be virtually zero capital investment in in­ from other nations. IRIS has a fo ur­ translated into demand for machine dustry and agriculture over the past three member advisory board, headed by tools. years would continue. Brandt Commission member and fo rmer The principal economic policy of the Tory Prime Minister of Britain Edward Chinese rulers remains "zero population Heath, comprising fo rmer World Bank Industrial Strategy growth," for which it has been hailed by. President Robert McNamara, a Club of the World Bank and others as a global Rome member, as well as former Colom­ o ECD declares war on model. The content of Chinese popula­ bian Finance Minister Rodrigo Botero tion policy is forced abortion and infan­ and fo rmer Giscard cabinet minister J. F. Hamiltonian economics ticide, which ,the Peking government Deniau, who many people say was re­ hopes will achieve a significantly reduced sponsible for Giscard's election defeat The political-economic division of population by the middle of the next this year through his mismanagement of NATO, the Organization for Economic century. the former French President's campaign. Cooperation and Development (OECD), The Wall Street Journal Nov . 30 re­ A Heritage Foundation source close has declared total war against the eco­ ported new horrors carried o ut under to British intelligence stated Dec. 2 that nomic principles of Alexander Hamilton government aegis in Canton. These in­ IRIS is a project of the circles in London and his Japanese adherents. The OECD volved the termination of pregnancies in who run the London School of Econom­ produced a report fo llowing a Nov. 16- the seventh, eighth, and ninth months, ics and their policy networks. The intel­ 17 meeting in Paris which called for an and the use of injections when a woman ligence gathering, he stated, is a ruse. end to governmental subsidies to the is in labor to obtain the birth of a still­ I RIS's plan is to take over all fu nctions high-technology industries. The OECD born child or an infant so sick that it dies of so-called "risk analysis" in the private charged that such subsidies not only within a few days. sector and use this to implement the pol­ "distort" free trade, but could lead to The Journal quotes a Chinese source: icy positions of the Brandt Commission what it called "overinvestment" and "ov­ "Every day hundreds of fetuses arrive at and Heath . IRIS will fu nction in part as ercapacity." According to the Dec. I Ni- the morgue." According to the Journal, a dirty-tricks capacity against targeted

16 Economics EIR December 15, 1981 Briefly

• MEXICAN officials charged the first week in December that the World Bank is attempting to put a credit squeeze on Mexico. The bank is demanding that all its new lending to Mexico-a significant part of Mexico's fo reign credit­ enemies of the Club of Rome networks Banking and their deployable Socialist Interna­ be in the form of co-financing with tional allies. "They [IRIS] are not inter­ commercial banks. This would ested in money," said the source. "They Free banking to bring close Mexico off from the Bank's subsidized fixed rates and long­ are interested in power." Aside from hot money flood monies from GRC, a suspicious outfit term maturities, and force Mexico headed by the London School of Eco­ even more onto Volckerized world Free banking zones, also known as Inter­ nomics-trained Andrew Stout, IRIS re­ rates and short-term maturities. national Banking Facilities, went into ceives fu nding from six British and con­ The World Bank move comes as effect in major U.S. cities Dec. 3, and are tinental merchant banks. Mexico faces a gigantic leap in its already threatening to fl ood the U.S. net fo reign borrowing needs, from with billions in hot money and other some $4 billion last year to $11 Gold speculative Eurodollars, Federal Reserve billion this year. The largest por­ sources said. tion of the increase corresponds 'Supply-side' gold Federal Reserve economists estimat­ directly to financing higher inter­ ed this week that the Fed's new IBF plan est rates on the world markets. option at the DIS? will bring as much as $125 billion in Eurodollars into the U.S. banking sys­ • JAMES McCLURE, Republi­ "Supply-side" publicist Jude Wanniski, tem "within weeks." The new free zones can of Idaho, told members of the who left the Wall Street Journalto run a "will return a substantial portion of the American Nuclear Society and political-economic consulting firm, put $1.6 trillion Eurodollar business to the Atomic Industrial Forum that nu­ the version of the gold standard currently United States shores," New York State clear power is a "moral issue." associated with Arth ur Laffer, Rep. Jack Superintendent of Banks Muriel Siebert "The moral issue is international. Kemp, and Lewis Lehrman into a Busi­ said in a congratulatory letter sent to Nations go to war when their sur­ ness Week "Ideas and Trends" column each of the dozens of banks which vival is threatened." He cited the Dec. 7. Although Wanniski describes the opened International Banking Facilities 1978 NAACP statement support­ proposal as a growth option, he cites as in New York this week. ing nuclear energy as "the hall­ identical a plan offered by Bank fo r In­ IBFs were first proposed in 1978 by mark" statement for the joint con­ ternational Settlements President Jelle the New York Clearing House Associa­ fe rence. Zj ilstra-who wants to use gold to re­ tion of the top 12 New York commercial duce growth. banks, led by David Rockefeller's Chase • LESTER THUROW, MIT ' "The entire world, Communist as Manhattan and Walter Wriston's Citi­ professor and author of Commit­ well as capitalist, has been led into reces- bank. The plan was approved by the tee on the Present Danger policy . sion and the path of a gathering fi nancial Federal Reserve Board afterthe personal documents, has called for a "na­ storm by obsolete U.S. monetary policy. endorsements of Fed Chairman Volcker tional corporate investment com­ Only the careful use of gold through a and New York Fed President Anthony mittee" consisting of labor, man­ particular kind of gold standard can now Solomon earlier this year. agement and government officials prevent a U.S.-led world depression," IBFs are designed, as a Chase Man­ to direct credit into "sunrise" post­ Wanniski wrote. He adds, "In that spirit, hattan spokesman told EIR , to "bring industrial sectors of the economy. we discard the various gold 'cover' stand­ the Eurodollar markets back home," that ards that rely on quantities of gold as a is, to bring into the U.S. the sort of • AN EXIMBANK official con­ way of fo rcing discipline on the monetary unregulated and speculative banking firmed to the Fusion Energy authorities. " practices which fo reigners and Ameri­ Foundation Dec. 2 that the bank He concludes by urging "a telephone cans have heretofore had to go abroad to will not be involved in financing call from President Reagan to Treasury conduct-outside the authority of U.S. American nuclear exports to Secretary Regan to initiate the Mundell­ regulators. As in the Euromarkets, the Egypt as a result of "a decision Zj ilstra proposal." free zones here will be so scantily regulat­ reached at the highest levels of the However, in a Paris speech Nov. 23, . ed by U.S. authorities that they will pro­ Bank." The official said that since Zj ilstra's chief assistant Alexandre de vide ample room for drug and other Exim is "like a regular commercial Lamfalussy called on governments to money laundering. bank," projects that receive fi­ "defuse inflationary expectations by Free zones are free of: reserve re­ nancing from it must bring in their sending out more signals about interest quirements-banks need hold no re­ own fo reign exchange to pay off rates and credit shortages"-the oppo­ serves against loan losses; federal regu­ the debt to Exim. site of what the supply-siders say they lation; interest rate-ceilings; and fe deral, want. state, and city taxes.

EIR December 15, 1981 Economics 17 TIillSpecialReport

Green fascism is . on the rise again in Germany

by Susan Welsh

A fascist movement has emerged once again on German soil, under the banner ofthe "green" environmentalists and the self-styled peace movement. As in the 1930s, today's fascists aim to destroy the nation-state based on expanding industri al technology and replace it with a (e udalist zero-growth society, a new Dark Age. The Nazi movement was fostered by British oligarchical circles who hoped to destroy the threat Germany and Russia represented to their geopolitical designs. So today the green fascist move­ ment is nurtured and manipulated by those anti-progress Anglo-American factions best khown as the supporters of Global 2000 and the Club of Rome. As we document, Die Griinen (the Green Ones), as the environmentalist/ disarmament political party is called, are joining forces directly with such openly neo-Nazi forces in West Germany as the Nationaldemokratische Partei Deutschlands (NPD). What does the new face of German fascism look like?

• Increasingly during the past year, West Berlin and the cities of West Germany have been hit with rioting by tens of thousands of disaffected youth organized into paramilitary squads. The riots often begin as purportedly "peaceful demonstrations" but the young punks carryirig plastic bags filled with bottles, stones, and clubs wait until nightfall to begin wanton destruc­ tion.

• The Frankfurt International Airport, West Germany's largest, was fo rced to close down Nov. 15 by a bloody demonstration of 150,000people. Flaming barricades were set on highways fo r miles around, and a hard core of several hundred battled police at the "village" constructed 00 the proj ected site of a new runway for the airport. The demonstrators are demanding an end to the expansion of the airport-a proj ect which the government of the State of Hesse defends as economically essential and ecologically acceptable. Molotov cocktails, stones, and clubs were hurled at police, and an elderly woman died when her car was trapped in a mob of rioters.

• Frankfurt mayor Walter Wallmann, a Christian Democrat, said in an interview with the Frankfurter Allgemeine Zeitung Nov. 20 that developments

18 Special Report EIR December 15, 1981 Violent demonstrations on Sept. 13. 1981. during the u.s. Secretary of State's visit to West Berlin.

in his city reminded him of the disintegration of demo­ Friedmanism and the Club of Rome. The CDU's pro­ cratic rule in the Weimar Republic, before Hitler took growth base tended to support Schmidt during the 1980 over. fe deral election-an option that becomes more and more

• Hesse Governor Holger Borner, a Social Demo­ difficult for them as the leftist takeover of the SPD crat, in a Nov. 15 interview with the Frankfurter Allge­ advances. meine Zeitung described the greenies' legalistic argu­ Die GrUnen was established in the European Parlia­ ments as "Nazi jargon" which reminded him of Josef mentary elections of 1979. Headed by Petra Kelley, a Goebbels. The green fa scists, including a wing of his own fo rmer member of the World Federalists, and Carl Social Democratic Party (SPD), have targetted Borner Amery, it works closely with Aurelio Peccei through an fo r ouster in the upcoming fall 1982 state elections. institution called Ecoropa, the coordinating body for Borner is the most important ally of Chancellor Helmut green parties in France, Italy, West Germany and other Schmidt within the SPD, and Schmidt's only remaining countries. ally among the states governed by the SPD; the other • Public meetings by pro-nuclear, pro-growth parties SPD governors are from the leftist Willy Brandt wing of or groups are systematically subjected to harassment and the party. The fi ght in Hesse assumes unusual strategic violence by the green fascists, often in alliance with the significance, since if Borner is ousted or neutralized, it German Communist Party (see below). will be virtually impossible fo r the embattled Schmidt • World-renowned physicist Dr. Krafft Ehricke, government to survive. during a tour of West Germany this month sponsored by

• As in Weimar Germany, the leading constituency­ the Fusion Energie Forum, in collaboration with the based political parties are disintegrating. The Social U.S. Fusion Energy Foundation, was repeatedly con­ Democratic Party, which at its best has represented the fronted by greenies who attempted to prevent him from i nterests of productive workers in a labor-industry alli­ speaking. Dr. Ehricke, a German-born scientist now ance fo r the good of the nation, is on the verge of a split. living in California, reported to a New York audience The trade-union -based wing, Schmidt's support, is being Nov. 28 how deeply he had been saddened and angered assaulted by the left wing, which was gradually assimilat­ to see the same madness he had witnessed as a youth in ed into the party by chairman Willy Brandt and deputy Berlin during the rise of the Nazi movement in 1929-3 1. chairman Herbert Wehner. In the Christian Democratic Union (CDU) party, the traditional base among busi­ The instigators nessmen and conservatives is disen fr anchised; the party's The rise of green fa scism is now apparent in various industrial and banking mentors have allowed its leader­ fo rms throughout Western Europe and the United ship to beco me dominated by the twin ideologies of States. Violent demonstrations like those in Frankfurt

EIR December 15, 1981 Special Report 19 and West Berlin have occurred in Amsterdam, ZUrich, arresting demonstrators and forbidding police to use and other cities. In France, the government of President fo rce against demonstrators, even if protestors are Fran�ois Mitterrand itself is committed to the same armed. ideology as the street-thug Gronen. From December to June 1981, the resuit of Baum's The mass European "peace movement" which has policy was a massive increase in areas directly controlled surfaced is systematically organized at the top by the by "squatters"-anarchists who seize apartment build­ Socialist International and the Club of Rome, the two ings and declare free zones, which police are not permit­ major institutions vyhich provide the ideological and ted to enter. Attempts by state and city governments to polItical framework for the neo-fascist anti-technology clear occupied areas have resulted in riots. movement. By June 1981, the house occupier "scene" had expanded from an initial 100 apartment houses in West From terror to fascism Berlin to "free zones" in more than 20 West German It was after March 1981, when a series of leading cities. Law enforcement experts outside the Interior U.S. radicals, including Richard Barnet of the Institute Ministry have asserted that, contrary to Baum's own for Policy Studies and members of the Washington, statements, the occupation zones are major centers for D.C.-based Center for Defense Information toured Eu­ terrorist protection and recruitment. rope to set the stage fo r an "anti-Reagan" and "anti­ NATO" turn in the green movement, that the environ­ Why West Germany? mentalists have become increasingly violent. In Septem­ It should be clear that in West Germany the green ber, underground leaders of the RAF masterminded the fascism phenomenon has a particular intensity and a attempt to assassinate Gen. Frederick J. Krosen, Com­ special strategic importance. If West Germany suc­ mander of the U.S. Army in Europe, Central Army cumbs to Die GrUnen, if Chancellor Schmidt is defeat­ Group . At the same time, military personnel and bases ed, then there will be no economic or political force in throughout West Germany were the targets of bombing Western Europe that could successfully oppose the and arson attacks. spread of green fascism. In Frankfurt, reports of intimidation have been made Since the electoral defeat in May 1981 of Schmidt's to police by store owners who were warned by environ­ ally, French President Valery Giscard d'Estaing, the mentalist groups that they would be vandalized unless situation has deteriorated sharply. Now Schmidt, alone they displayed signs opposing the expansion of the among European heads of government, consistently Frankfurt Airport. represents a policy of war-avoidance and economic Functioning as media spokesmen and funding con­ progress, rational versions of East-West detente, and duits for green fascism are the Campaign for Nuclear high-technology development for both North and Disarmament, based in London and headed by environ­ South. Should Schmidt's effort to draw Washington mentalist E. P. Thompson; Pax Christi, also London­ and Moscow toward an effective war-avoidance policy ' based, composed of Catholic and Protestant "liberation advance, the world may stand a chance of escaping theologists" and a sponsor of fo rums and demonstra­ nuclear holocaust. If Schmidt's mediation between the tions against nuclear power and nuclear weapons; the superpowers does not soon show results, however, the Evangelische Kirche Deutschland (Lutheran Church of political fabric of his own country will be ripped apart Germany), a center for SPD left environmentalists, and Schmidt himself will not survive. including Erhard Eppler, and for support of the West The fall of Giscard did more than deprive Schmidt Berlin squatters; and the Dutch Inter-Church Peace of an ally in fo reign policy. One of the first moves of the Council (lKV), headquartered in Amsterdam, which Mitterrand government was to scrap Giscard's policy . serves as international coordinator for both peace dem­ of restricting the movement of "green" punks and onstrators and house occupations. Several thousand terrorists across French borders. Now the green fascists Dutch "squatters" have functioned as organizers for are able to travel freely from a demonstration against a establishing the violence-prone, counter-cultural squat­ nuclear power plant in France to a riot in Frankfurt or ters' movements continentally. Hamburg . According to law-enforcement sources in West Ger­ While the green fascists are deployed by Schmidt's many, the policy of Interior Minister Gerhard Baum in highly placed international political enemies, there are dealing with the protest groups and their allies in the also reasons why some layers of the German youth house occupier "scene" has contributed to spreading population provide a fe rtile ground for such move­ anarchy and terror. Baum, who is member of the Free ments. Take the case of individuals drawn to the "peace Democratic Party, coalition partners with Schmidt's movement" through opposition to NATO's decision to SPD, has maintained a policy of a "long leash," i.e. not install U.S. medium-range missiles in West Germany.

20 Special Report EIR December 15, 1981 Of course not all these people are fascists! Many are justifiably afraid that the deployment of those missiles will be the trip-wire for nuclear war, since the Soviet Union will be no more likely to tolerate U.S. nuclear missiles within a fi ve-minute fl ight time of Moscow than the United States was ready to accept Soviet missiles in Cuba in 1962. Many Germans drawn to the peace m ovement reject that NATO decision as a violation of German national sovereignty, since the Federal Republic

could be destroyed in a thermonuclear war initiated fr om its territory without so much as a by-your-Ieave fr om Washington.

An historical point of view These justified concerns can be compared to the rage fe lt by the German population against the 1918 Treaty of Versailles. The brutal peace imposed by Great Britain upon Germany deprived the defeated nation of its army and its industry, fo rcing payment of enormous repara­ tions. Only the 1922 Rapallo Treaty with Soviet Russia allowed Germany to survive economically. But the anger against Britain and its Versailles Treaty was manipulated by the Nazis, who used it to recruit bitter and disaffe cted youth to their ranks. After the Second World War, Germany was once again humiliated and ravaged by the victorious pow­ ers-the British and their factional supporters in the other allied countries. The nation was occupied, divided, deprived of sovereignty, its industry smashed and its citizens told again and again that each one of them was personally responsible fo r the crimes of Hitler. Under Chancellor Konrad Adenauer after the war, the new Federal Republic was able to slowly regain some of its dignity and sovereignty as it rebuilt its industry. Under C hancellor Schmidt, the country has begun to find a sense of nationhood, a pride in the Federal Republic's role as a fo rce for world peace and prosperity. But the youth of today, born in the 1960s and 1970s, don't understand the pride their parents feel at having built a nation out of a rubblefield. These are the youth educated by the "reformed" school system introduced u nder Chancellor Willy Brandt (1969-74), which abol­ ished the humanist classical tradition in German edu­ cation. Instead of learning the excitement of scientific discovery and the inspiration of German classical liter­ ature and music, today's youth are taught about "limits to growth" and an existentialist literature of despair. Add to this a growing consumption of drugs in the Federal Republic and an economic crisis worldwide, and it is easy to see how a new fascist movement can arise again in Germany-seemingly overnight. ------

AtaSept. l, 1981 anti-war demonstration oj2 0,OOO in West Berlin: Weimar revisited.

EIR December 15, 1981 Special Report 21 Documentation

European Labor party calls for defense of constitutional rights

Th e fo llowing declaration was released by the European the harassment was attended by about 100 citizens, 50 Labor Party in West Germany on Nov. 22. Th is version is from the heavily targeted Neckarwestheim region? What slightly abridged. were the political views expressed there, which at this point cannot be publicly represented in this country For some time, members of the European Labor without great personal risk? Party [Europiiische Arbeiterpartei-EAP] have been Mayors Armbrust and Bohler emphasized how nu­ subjected both to numerous press slanders and to physi­ clear energy is economically necessary; Dr. Ehricke dis­ cal assaults by opponents from the ranks of the militant cussed its role in the development of outer space, which Griinen. The reason is the EAP's public support for among other things would facilitate the disposal of nu­ economic growth, technological progress, and peaceful clear waste. Mrs. Zepp-LaRouche emphasized that nu­ application of nuclear energy. In the past week in partic­ clear power is indispensable not merely for maintaining ular, these attacks have assumed a dimension which now living standards in West Germany; sabotaging nuclear represents a direct threat to the democratic order of the energy there would have the effect of condemning some Federal Republic of Germany: EAP representatives, as hundreds of millions of human beings in the Third World well as other citizens, have been subj ected to a wave of to death. Halting nuclear development would thus make massive threats, including bomb threats and physical us responsible fo r a holocaust a hundred times greater attacks, which have injured the basic rights of freedom than the one that occurred under Adolf Hitler. It is of expression of opinion and assembly in an intolerable unacceptable, she stressed, to condemn the Third World way. to make the transition to development on the basis of its The primary occasion of this escalation was an EAP own internal resources; and she condemned the Club of fo rum in Neckarwestheim bei Heilbronn, called to give Rome as racist Malthusians who, in concert with certain political support for the construction of a second nuclear NATO officials, openly encouraged American soldiers power plant unit, as well as for the necessity of technolog­ during the Vietnam War "to slaughter as many women ical progress. The speakers included Mayor Armbrust of and children as possible, so that at least if the war could Neckarwestheim, a Free Democrat, his counterpart Al­ not be won, the Vietnamese population would be drasti­ cally reduced." As an alternative the EAP chairwoman phonse Bohler from Cattenom, France (where a similar " fight is occurring over nuclear power), space researcher endorsed the creation of a new world economic order Dr. Krafft Ehricke fro m California, and Mrs. Helga which would enable genuine economic development in Zepp-LaRouche, federal chairwoman of the European the southern hemisphere through application of science Labor Party. and technology. For an export-dependent nation like Mayor Armbrust was heavily pressured through tele­ West Germany, she said, this is the only practicable way phone calls, letters, and a bomb threat, to distance out of the current world economic crisis. She concluded himself from this event, and not to appear. Through with an appeal against the enemies of science typified by rumors and press slanders, an effort was made to intimi­ Robespierre, who used the slogan "the Revolution needs date people in the area from attending. And, at the door, no scientists" to murder the greatest thinkers in France. a group of masked youths moved to physically prevent citizens from enteri ng. When about 40 of them began to Nationwide attacks storm the meeting hall, the police had to intervene. We now document the wave of slanders, threats, and What was the content of this meeting, which despite physical assaults which have occurred, noting that the

22 Special Report EIR December 15, 1981 press has apparently performed a considerable and evil demonstrators surveyed the former office of the EAP, role in this affair. We also note that these attacks are whose national headquarters are in Wiesbaden. On being investigated in the context of a vehicular homicide Nov. 17, a "spontaneous demonstration" suddenly attack against Mrs. Zepp-LaRouche in West Germany passed this office again, and had to be disbanded by the on Sept. 22, 1981. police. On Nov. 19, the EAP is informed that the Heilbronn/Neckarwestheim: Nov. 14: About 15 men "Runway Opponent� Scene" is collecting addresses of attack an EAP literature table in Heilbronn on which EAP members to carry out "a kind of nationwide are lying invitations to the above event, among other Kristallnacht" against the EAP. (Kristallnacht was the things. The books and newspapers are destroyed. A few 1938 rampage against Jews by Hitler's SA). During the days later, Mayor Armbrust receives an anonymous night of Nov. 20-2 1, the new EAP office is painted over threatening letter which calls the EAP a "fascist organ­ with defamatory slogans. ization," encloses a clipping from an old slander against These brutal methods are being employed in order the EAP in Der Sp iegel magazine, and demands that he to achieve several different goals. A climate of heated not attend the event. Numerous threatening phone calls slanders is being created, endangering the security of are also received. The local SPD organization in Heil­ the EAP's national chairwoman, who only eight weeks bronn� a bastion of Griinen allyErhard Eppler, spreads ago escaped a professional assassination hit, as well as the slander that the EAP is "a right-wing organization that of other EAP members. financed by the CIA." Secondly, through intimidation and outright terror, On Nov. 20, the day of the event, the Heilbronner the population itself is to be kept in check .... Fifty Stimme publishes an article headed "Disquiet Before citizens of Neckarwestheim demonstrated considerable the EAP Event Today-Right-Wing Radical Group or courage, despite threats, and the fact that they had to Labor PartyT Physical attack against the event, and in push their way through a crowd of masked figures. One particular against Mrs. Zepp-LaRouche, is virtually said, "What happened in Frankfurt and what happened advocated. The CDU [Christian Democratic Union] here-these are SA methods ." Mayor Armbrust stated city councilor of Neckarwestheim, Mrs. Widemann, that he absolutely refused to be dictated to as to which receives threats that if she attends, her windows will be events he could and could not attend. The CDU coun­ smashed. cilwoman who had been threatened said that it is On Nov. 20, at 6:45 p.m., a threat is phoned into the perilous for democracy if someone can be stopped from Heilbronner Stimme that a bomb will explode during doing and saying what one considers to be right in the event. public. As police are searching for the bomb, 40 militant masked Griinen attempt to storm the meeting hall Call to all democratic parties under paramilitary command. They curse the police as The Federal Executive Committee of the EAP here­ "pigs," "fascists," and "Nazis," and shout "They by calls upon all politicians and democratic parties in should have gassed you" and "Pour on the gas," as well the Federal Republic to take the events described here as "We want to see Helga." as a warning signal, and act so that the great majority A half-dozen journalists and photographers on the of the population is not brought to silence by a small scene, as a group, take up the cause of the disrupters, but violent minority. Each has the right to express his with a volunteer at the Heilbronner Stimme maintaining views, to freedom of speech and assem bly, even if that contact between the Griinen inside and outside the hall. person is mistaken or incorrect. However, no one has Aachen: A Nov. 19 forum held by the Fusion Energy the right to rob his fe llow citizens, through the use of Foundation was presented to an audience of 200 by Dr. physical violence, duress, and blanket terror, of the Krafft Ehricke on the industrialization of space. About basic rights of freedom of speech and assem bly. If 40 disrupters attempted to break into the room, armed journalists participate in such actions, they are abusing with bottles and other objects; the police report that the freedom of the press. they are "professional demonstrators" from outside the Unfortunately, We are already well past the point area. Had the police not intervened, the event would when we could have said, "Halt this at its inception!" have had to be canceled under the threat of injuries. In no other [democratic] nation in the world has the Hamburg: On Nov. 21, a wall poster was hung in terror against political opponents described here already the mathematics division of the university, calling for taken on such forms as-now for the second time-in the break-up of a fo rum scheduled there two days later Germany. In a democratic republic, other laws are valid by Dr. Ehricke. than those of the Hobbesian struggle of each against Wiesbaden: During the demonstration against the all. Democratic political leaders must not tolerate such nearby Frankfurt airport expansion, a contingent of abuses against our constitution fo r one more day.

EIR December 15, 1981 Special Report 23 German Protestants tied to the new fascists

by Lyndon H. LaRouche

Normal Protestant church-members in the Federal Re­ terrorism were in fact sinister circles of the "extreme public of Germany are increasingly frustrated and an­ right." This is massively documented in the public do­ gered by the visible connection of prominent Protestant main in Italy, where it is a matter of public record that officials to the fascist stormtroopers currently unleashing the ostensibly "right wing" and "left wing" terorrists are . terror on the streets of the nation. Bitter, old memories closely interlinked under a common direction by circles are stirred, as older citizens remember the dabbling with closely linked to would-be mass-murderer Aurelio Peccei Adolf Hitler by such Protestant churchmen as Pastor of the Club of Rome. The fa scist circles backing Bettino Martin Niemoller. Craxi of the Socialist Party of Italy have believed that In Germany, where a significant portion of the pop­ destroying the credibility of constitutional order with ulation is old enough to remember firsthand the storm­ "left wing" terrorism is the appropriate way to bring trooper tactics of Hitler's fascist bullies, the current fa scist forces into dictatorial power again in Europe. tactics of -the "greenies" ("environmentalists") bring The surfacing of underground networks of the old from the mouths of many shocked older citizens, "Just neo-Nazi NPD as leading forces within the "environ­ like the Nazis." The increasing visibility of figures linked mentalist" fe rment reflects the fact that the same is true to the neo-Nazi NPD (Nationaldemokratische Partei of "left wing" terrorism and environmentalist hooligan­ Deutschlands) within leading ranks of the "greenies" ism in Germany. It is true that the Boris Ponomarev helps to remove any remaining doubt that the hard core faction of the Soviet leadership is massively supporting of Germany's "environmentalists" are the neo-Nazi the green fascist element-linked to the neo-Nazi NPD's mass-based fo rces of the 1980s. underground networks-within the West German peace In the eyes of these same citizens, liberal Protestant movement. Ponomarev doubtless knows the fascist con­ priests and figures such as the Protestant Church's nections behind these left wing fo rces, but is cynically [Evangelische Kirche Deutschland-EKD] Erhard Ep­ using the fascist fo rces fo r the purpose of attempting to pler, also a prominent SPD figure, continue to play a undermine the West from within. prominent and crucial role in placi.ng this growing fa scist This is also true inside the United States. Ideological­ terrorism on the streets of the nation. Perhaps, like ly, Tom Hayden's faction. of Students for a Democratic Pastor Niemoller, the liberal Protestant churchmen will Society was already philosophically fascist during the turn away from the fa scist beast they have again helped late 1960s, as the Chicago Democratic Convention riot so much to create-after the present Republic of Ger­ of 1968 accurately reflects this. There is no difference many may have been destroyed through tolerating the between fascist elements such as the drugged Yippies or fa scist storm troopers of "environmentalism" for too the Yippie backers in the Anti-Defamation League Fact­ long, as liberals of Weimar destroyed that republic Finding Division and the green fascist stormtroopers of through soft tactics toward the Nazis then. West Germany today. Scratch a liberal from the Trilater­ Intelligence services in Europe have known since al Commission circle and one draws fascist blood, the 1969-70, that the contro lling fo rce behind ostensibly left same variety of Malthusian world-federalist fascism ooz­ wing "environmentalist" hooliganism and international ing from the unwholesomely large pores of Aurelio

24 Special Report EIR December 15, 1981 Peccei. adopt its own arbitrary set of goals and values upon On the surface, most citizens of the United States society generally. That is Sorel's doctri ne of the "fascist might imagine wrongly that there are major differences mythos," and the fascist doctrine of the Mussolini­ between Hitler's Nazis and the green-fascist stormtroop­ supporter and Weber student, Robert Michels. ers of Germany today. Popular opinion associates Hitler The means to bring such a fascist order into being, with "big industry"-which is largely mythical. Public Weber argued, was to replace mass political parties opinion forgets that the Nazis of the 1920s were recruited based on a coherent philosophical world-outlook (Welt­ largely from the Weimar "back to nature" countercul­ anschauungspartei) with what are called "populist" ture, and were passionately committed to "population (Volkspartei) forms of pluralist aggregations. Out of policies" against "non-Anglo-Saxons," "small is beau­ this pluralist stew, particular groups organized around tiful" utopias, and anti-industrial-capitalist ideology a fascist variety of mythos-such as the Hayden faction identical as a philosophical world-outlook with the ide­ within the present-day Democratic Party of the ology of the modern environmentalists. The only differ­ U.s.A.-can exploit a crisis to create a fascist form of ence between today's environmentalists and yesterday's dictatorship. Nazis is that the doped environmentalists are crazier and In other words, the kind of liberalism associated smell much worse. with Max Weber's sociological dogmas, or the "plural­ There is nothing accidental in the parallel between ism" of William James, is designed to serve as an liberal-Protestant dabbling with Nazism earlier and lib­ efficient conveyer belt for creating fascist dictatorships eral-Protestant sponsoring of the emergence of the green through crisis. One group, with its own irrationalist fascist movement now. "Liberal Protestants," like East­ choice of special goals and arbitrary beliefs, imposes its ern Orthodox or Anglican priests, are not Christians, but "triumphant will" (Nuremberg-rally sort of "will") agents of gnostic cultism, closely allied in theology to upon a society wrought with chaos. overtly Lucifer-worshipping cults such as theosophy and Dr. Bottiger compared Max Weber's views with the spin-offs of theosophy such as the anthroposophic cult doctrine of the "super-elite" advanced by Pareto, the of Germany. same fascist doctrine explicitly proposed for Latin The key to understanding the twisted, pro-fascist American alternating "left wing" and "right wing" mentality of liberal varieties of Protestant priests was coups by Carter's National Security adviser Zbigniew outlined by Dr. Helmut Bottiger to a session of the Brzezinski, the latter a person of fascist credentials recent, Mainz conference of the International Caucus of acquired at birth. (The Polish fascist regime which Labor Committees. Brzezinski's father served was fully as evil as Hitler's regime in all but one historically-relevant respect: it was Roots of German fascism materially far weaker than Hitler's regime.) To understand the development of German fascism Pareto's doctrine is historically more accurate than over the last half of the 19th century into the present Weber's sociology. There are powerful "super-elites," century, one must begin with two key sets of facts. One typified by the Byzantine "black nobility" of Venice­ must trace the transplantation of Venetian aristocratic centered Europe, which simultaneously create and spon­ families into such regions of Germany as today's Baden­ sor both "left wing" and "right wing" elites. Exactly as Wiirttemberg, and trace out the evolution of the mass­ Pareto outli nes, the "super-elite" alternately builds up, based fascist movements fr om the German and Swiss or cuts down the power of its squabbling children, the branches of Giuseppe Mazzini's "Young Europe" radi­ "right wing" and "left wing" sub-elites. So Venice cals of the 1840s. Within this setting of Venetian simultaneously financed the propaganda-campaign to subversion of the ranks of Germany's elites and populist build up Martin Luther out of obscurity, and fo llowed radicalism, there are two more specific developments that by organizing the counter-reformation after the leading directly into Hitler: the romantic cultism of the Hapsburg sack of Rome in 1527 (the sack of Rome Richard Wagner circle around Hitler's sponsor, -Hous­ ordered by the Venetians who owned the Hapsburgs). ton Chamberlain, and the ideology of the founder of This "super-elite" function is typified by the hier­ modern sociology, Max Weber. archy of the Greek Orthodox Church and its Russian Dr. Bottiger emphasized the distinction between Orthodox and other autocephalic offshoots. Ordinarily, Weber's sociology dogmas and the more siIllplistic the Church hierarchy appears to be occupied entirely notion of a value-free culture. Weber's sociological with liturgical matters, avoiding obvious engagement doctrine is the direct basis for all modern fascist move­ with secular affairs. The Church hierarchy thus creates ments. an apparent distance between itself and those various Using the Jesuit's hoax-argument, that the world is political movements it manipulates into and out of so "interconnected" that no mind could know truth, power, as the Greek hierarchy recently brought the Weber asserted that each group within society must Papandreou government to power.

EIR December IS, 1981 Special Report 25 In the Hitler case, although liberal Protestants and anthroposophs performed a decisive role in bringing Hitler to power, the anthroposophs followed the policy of attempting to function as a "super-elite," a small liberal swing force which brought fascism to power, Av owed neo-Nazis without itself assuming direct responsibilities of partici­ pation in the Nazi Party. in the midst of the Some liberal Protestants did become somewhat more directly involved in promoting Nazism, to the point environmentalist that without this Protestant liberals' help, the degree of support gained by the Nazis would not have been political leadership possible. However, like the circle of Benedetto Croce in Italy (who played a key role in bringing Mussolini to by Charlotte Vollrads in Wiesbaden power), once the fa scist regime was entrenched numbers of the liberal Protestant priests who had earlier helped create the environment fo r Hitler's rise to power, disen­ On November 15, 1981, Holger Borner, Governor ofthe gaged themselves to fo rm part of a liberal opposition to West German state of Hessen, warned in an interview in Hitler, thus attempting to play the ostensibly detached the Frankfurter Allgemeine Zeitung that the "environ­ role of what Pareto described as the "super-elite." mentalist" movement was taking a direct fascist form in This repeats itself in many nations with the rise of West Germany. "green fascism" world-wide. The anthroposophs, the Commenting on the violent demonstration taking original "nature freaks" of Germany, together with place that day against the expansion of the Frankfurt liberal Protestant priests and figures. such as Eppler, International Airport (a demonstration where one elder­ have played a key leading role in creating the green­ ly woman, trapped in a mob of demonstrators, was fascist development around the fascist Malthusian doc­ killed), Borner denounced the environmentalists' use of trine of genocide of Aurelio Peccei and of the Venice­ rhetoric about the "will of the people" as reminiscent of and Netherlands-based cultural associations from which "Nazi jargon." Borner, whose Energy Minister, Heinz the en vironmentalist movement and the Bilderbergers Karry, was killed by terrorists linked to the Rote Armee were spawned. The Geneva-based offices of the World Fraktion (RAF) last May, declared, "Goebbels began by Council of Churches and networks run thro ugh the talking about the Reichstag (Parliament) as a 'chamber International Red Cross play a key, coordinating role for empty chatter' and the final result was the Reichs­ internationally. kristallnacht. " The Kristallnacht was the Nazi confisca­ The key to the minds of the fascist-lea.ning variety of tion and destruction of Jewish property in 1938 liberal priests is gnosticism, a pseudo-Christian disguise which revealed to the world the true nature of Hitler's for the wicked pagan cults of Apollo (Lucifer) and other National Socialists. spawn of the Magi and Taoists, which centers its The fascist hooligan tactics already being used by Die opposition to the Judeo-Christian doctrine of "man's Griinen and its allies in the environme!ltalist movement dominion over nature" irt "mother earth" cults, or against any supporters of nuclear power and technolog­ ' Manichean cults. For this reason, the recent Papal ical growth, bear m ore than a sociological resemblance Encyclical, Laborem Exercens. provides a conclusive to the Hitlerites of the 1930s. From its very beginning, sort of "litmus test" of who is really a Jew or Christian, Die Griinen, the environmentalist party of West Ger­ as opposed to liberal pseudo-Jews and pseudo-Chris­ many founded in 1979, has been directly connected to tians. right-wing extremist organizations, and has been guided Therefore, let no one say that the ICLC is attacking by fascist ideologues. either Christianity or Judaism. The ICLC is defending The following information, which was compiled by both against liberal cultists and the fascist storm trooper the Executive Intelligence Review's German-language spawn of the work of those liberals. These cultists, these counterintelligence newsletter, Spuren und Motiv. is more liberal freaks, some in priests' clothing, are filled with a than sufficientgro unds to apply to Die Griinen the same gnostic hatred against civilization, and would unleash constit.JJtional criteria which ban neo-Nazi parties in any hellish force upon earth in service of their cultists' West Germany. determination to return society to a depopulated condi­ tion of pre-civilized barbarism. The founders of Die Griinen Either this "green fa scist" horde of environmentalist In 1979, the executive board of Die Griinen was genocidalists is crushed quickly now, or there will be no created to launch an environmentalist slate in the elec­ civilization. tions fo r the European Parliament. Along with Petra

26 Special Report EIR December 15, 1981 Kelley, the current Chairwoman of Die Griinen, a more than a paper organization. member of the party's executive was August Hausslei­ In 1978, the NPD created a new electoral fr ont in ter, who had also been a fo unding member of the right­ Rheinland-Pfalz, one of the 10 West German states. wing Christian Social Union. This last organization is Called the Griine List-Rheinland Pfalz, the party adopt­ the Bavarian-based Christian Democratic affiliate of ed Gruhl's book as its national program. The chairman Franz-Josef Strauss. of the Griine List was Dr. M. O. Bruker, the head of Haussleiter's major credential in 1979 was that he the World Association for the Protection of Life-a controlled the fi rst and oldest environmentalist party in group which adhered to the "race-science" theories of West Germany, the Aktionsgemeinschaft Unabhangi­ the Ludendorff Movement. ger Deutscher (A UD), which launched the firstenviron­ Gruhl took a more active role in the politics of the mentalist program in 1976: (The name translates " Ac­ Griine Aktion Zukunft (GAZ) around this same time. tion Group of Independent Germans.") Haussleiter, Along with Christian Meves, a reporter for the presti­ who resigned from Die Griinen last year in a faction gious conservative daily Die Welt. Gruhl wrote the fight with the party's left wing, has a penchant for political program for the group, making it one of the fo unding parties, including neo-fascist groupings. strongest envirol)mentalist blocs in the Federal Repub­ Shortly after resigning from Strauss's CSU in the 1950s, lic. Haussleiter created the Deutsche Gemeinschaft, (Ger­ While Meves put into print the social policy pro­ man Society) predecessor to the AUD. In the mid- gram for the GAZ, he was also writing for Courage. the 1950s, in a celebrated court case, the West German newspaper of the Young National Democrats, youth Constitutional Court banned sections of the Deutsche group of the NPD. Meves has appeared as a speaker at Gemeinschaft because of their connection the overtly conferences sponsored by the Gesellschaft flir Biolo­ Nazi-oriented Sozialistische Reichspartei. gische Anthropologie, Eugenik und Verhaltensforsch­ What is most striking to researchers is the way in ung (Institute for Biological Anthropology, Eugen­ which Die Griinen shares the same ideologues as the ics and Behavioral Research) headed by Hamburg . right extremist Nationaldemokratische Partei Deutsch­ lawyer Jiirgen Rieger. The Gesellschaft is notorious for lands (NPD) a party often accused of being an electoral ascribing to the race-science theories associated with the front for the constitutionally forbidden neo-Nazi par­ Nazi Party. Both Gruhl and Meves have repeatedly ties. One of the joint NPD/Die Griinen ideologues is written for Integral. the newspaper of the Reverend Herbert Gruhl, controller of the GriineAkt ion Zukunft Moon Unificatio n Church in West Germany. (Green Future Action), a grouping which essentially dissolved into Die Griinen in 1979, when Gruhl himself Right-wing terrorism became a spokesman for Die Griinen. In 1978, in the state of Hessen, the environmentalist Gruhl's program for a fascist future, made fa mous slate received the active support of the Volkssozialis­ in his book A Planet is Looted (Ein Planet Wirt Geplun­ tische Deutsche Partei (VSDP), a right-wing extremist dert) was adopted as the national party program of the group. The VSDP is closely connected to the Volks­ NPD. In this book Gruhl warns that Earth is being sozialistische Bewegung Deutschlands-Partei der Arbeit depleted of its natural resources, and that this can only (VSBD-PDA), an openly terrorist group some of whose be solved by adopting a "spaceship economy," in turn members were killed in a shootout with police in requiring totalitarian world government. "This dicta­ Munich in September 1981. torship," Gruhl writes, "eventually has to be tougher That same month, UdQ. Reinhardt, a candidate for than Stalin's .... In the future only those peoples will the Die Griinen-backed electoral slate in Hannover, the gain an advantage who succeed in maximizing their Griine-Alternative-Biirger Liste, (GABL) was exposed armament, while at the same time, keeping the standard as being a member of another right-extremist sect linked of living at the absolute minimum ." to the VSBD-PDA. After some deliberation, the gov­ erning board of GABL decided that Reinhardt would The case of the NPD remain their candidate in the election. From 1965 to 1969, the Nationaldemokratische Par­ The merging of the old fascists and the new is a tei Deutschlands, created in 1964 as the merger of three deliberate operation. Daniel Cohn-Bendit, the anarchist smaller right-wing parties, including Haussleiter's student leader of the 1960s, today continues to play a Deutsche Gemeinschaft, caused great alarm as it suc­ leading role in the green movement in Fran kfurt, where ceeded in placing elected officials in several state Parlia­ he publishes an alternative magazine, Pfl asterstrand. ments in Germany. In 1969, the NPD reached its Cohn-Bendit has openly said that while the environmen­ electoral zenith, missing by only 0.7 percent having a talist movement must "criticize" the neo-Nazis' admi­ deputy elected to the Bundestag (lower house of Parlia­ ration for the Hitler period, the movement cannot reject ment) . For almost the next 10 years, the NPD was little their "revolutionary potential."

EIR December 15, 1981 Special Report 27 Goebbels's pounding refrain-was the ideology of the SA, the street fighters, the thugs. For Hitler, Goebbels and the narrow circle of cultists around them, there was the theory of the supermen (Herrenmenschen), among which of course they included themselves. Goebbels had the SA in mind when he said: "The essential thing fo r this revolutionary development is that individualism be The 'green' origins smashed and that the Volk take the place of the individual man and his idolatry." of Hitler's SA The SA shocktroops operated through small gangs of five to ten people that could coalesce into "storms" of 100 or more. The same organization exists among the by Michele Steinberg and Wiesbaden staff Greens today, as small squads organized along paramili­ tary lines battle police. Whether in a meeting-hall or in the street, the right Although the SA fo ught bloody battles with the to self-assertion always knows only one way: communists, the two groups converged through their against great violation to marshal greater violence. radica l anti-capitalist ideology, just as the Greens in Terror can only be broken by terror, never by West Germany today bring together Communists and bashful, tame protests. neo-Nazis. According to an SA document: "The SA­ -Ehrenbuch der SA , (Indoctrination Book of man can, if necessary, understand the militant Red; he Hitler's Storm troopers), 1934 recogn izes in him the readiness to give his life for an idea; he stands by him since he too comes fr om the Volk; he Experience shows that nothing is moved peaceful­ has sympathy fo r him because l)1any [SA] comrades ly ...."Th e masses" is a fiction! What is not fiction ' originally came from the Commune and had first to be is violence, which at least we can say is noticed .... won over to the Fuhrer. Never does the SA-man have the Things have been peaceful for much too long. slightest sympathy fo r anything reactionary." -Tageszeitung (West Germany's leading It is therefore no surprise that the SA and the Com­ counterculture newspaper), September, 1-981 munists fo un d themselves jointly supporting a strike by Berlin streetcar drivers in November 1932, and carrying Hitler's brownshirts, the Sturmabteilung (SA), have out joint "direct actions" (sabotage). more in common with today's Greens than mere dedica­ During Hitler's "Night of the Long Knives" on June tion to violence and terror. 30, 1934, the left wing of the Nazi party, including SA The youth gangs of Weimar Germany of the 1920s leaders Rahm and Strasser, was murdered. The SA de­ and 1930s which became the SA had a "green" program, creased in importance after that, giving way to the even an anti-capitalist ideology, and hostility to "trade union more horrible SS and Gestapo. But the years of street big-wigs" against whom they waged their campaign of terror of the SA had so destroyed the capability of the terror. German people to resist Hitler, that many citizens fe lt The Gregor Strasser wing of the Nazi party worked relief when the Sturmabteilung passed from the scene. out a strict anti-capitalist program for the SA starting in 1926. Although later amended by Hitler, its essential features remained, and are equivalent in many respects to the Greens' program for an "alternative economy" today. The goal was a return to an artisan, pre-capitalist economic forn:, to primitive exchange of agricultural goods and handicrafts. Most SA-members knew the details oftheir program no better than today's Greens understand the workings of a nuclear power plant. Then as now, what was essential was the ideology of "comradeship." The National So­ cialists called theirs a "socialist-idealist world-view," against the "individual-liberal world-view" of the aver­ age citizen and the materialism of the Marxists. I as an individual being am nothing; my Yolk is everythingf- Bookburning on May 10, 1933.

28 Special Report EIR December 15, 1981 of Deviance and Social Control presently operates as a primary vehicle through which "radical criminologists" effect the normalization of deviancy. At the Oct. 31 meeting of the Nordic Council, Justice Ministers fr om Finland, Sweden, Norway, and Iceland demanded that "Christiania," a 47-acre "free town" in the heart of Copenhagen, Denmark be shut down. The Christiania: fascist ministers condemned Christiania as a center of the Scan­ dinavian drug trade and reported that it was a main topic enclave inDe nmark at the Council's meeting. Swedish Justice Minister Carl Axel Petri, in a nationally televised statement, reported that Christiania was responsible for at least 80 percent of by Marilyn James the hashish available in southern Sweden. Before this statement and exposes by the European West Germany is not the only target of Weimar-style, Anti-Drug Coalitions, Christiania was hailed through­ deliberately created fascism among youth. In Denmark out Europe as a model "social experiment" in which there exists a laboratory for that purpose which has every individual participating has the freedom to "do his affected all of Europe. own thing." That experiment was expected to spin off Christiania was formed in October 1971 when drug dozens of "Christianias" across the globe, including the addicts, anarchists, environmentalists, criminals, and United States. hippies led by a hard core of "squatters" -not unlike Previous attempts to shut down Christiania, includ­ those who fo rmed the fi rst generation of Baader-Mein­ ing a Danish Supreme Court ruling ordering Parliament hof terrorists-stormed the abandoned Baadsmands­ to do so, were blocked by its political protectors in the straede Garrison. Since then, Christiania has existed Danish royal fa mily and the Socialist International-con­ under total government sanction and dubbed "an alter­ trolled wing of the ruling Social Democrats. native life-style social experiment." In a 1973 Danish Parliamentary debate over the fate In reality, Christiania is a center for the distribution of Christiania, leading Social Democrats acted to protect of dangerous drugs, such as heroin and hashish (7 tons it. Social Democratic Defense Minister (currently For­ sold annually), LSD, mescaline and various ampheta­ eign Minister) Kj eld Olesen attempted to refute statistics mines. It also serves as a large safehouse for terrorist demonstrating that Christiania's existence corresponded units striking throughout Europe. Finally, it is a breed­ to a dramatic rise in violent crimes. Olesen then defended ing gro und for "greenies," homosexuals, pederasts, so­ Christiania as cost-effective: "Without the existence of do mists, prostitutes, and other hardened criminal ele­ Christi ania, a great part of the squatters would be under ments seeking refuge from the law. treatment in state mental hospitals, special schools and When law enforcement closed in on Baader-Meinhof homes, or in one of our detoxification clinics ...." terrorists Knut Folkerts and Christian Klar, the two. Through this governmental support mobilization, were in possession of Danish passports believed to have Christiania has become a semi-official city with a resident come from Christiania. hard-core population of 900 to I ,500 (in the summer Christiania was created as a pilot project of the months). Immediately prior to the recent meeting of the British-based Tavistock Institute. The Tavistock Insti­ Nordic Council, the Danish Parliament was proposing tute is a specialty house for the British Secret Intelligence to make Christiania a separate municipality, complete Service which coordinates psychological warfare, social with a city hall and postal zip code. control, and behavior modification operations through­ Christiania already has its own "police fo rce" called out the world. Operation Phoenix, one such Tavistock the Rainbow Army. The "Army" has an auxiliary force, Institute project, was the operational name given to the called the "resistant networks," that numbers 40-50,000 dissemination of deviancy in a fashion designed to "nor­ youths from the Copenhagen metropolitan area, mobi­ malize deviancy" among broad layers of populations. lized through a telephone-chain structure. A special unit This project was, in part, funded by the U.S. Ford and of Christiania's Rainbow Army, the Black Detail, is an Rockefeller Foundations. assortment of criminal goon squads which since May 1 The corresponding proj ect initiated in the U.S., has put 16 plainclothes detectives into the hospital. The dubbed MK-Ultra, specifically coordinated the spread European Anti-Drug Coalitions, which have launched of the drug counterculture and was responsible for the an international campaign to close down Christiania, creation of, fo r example, the Haight-Ashbury experi­ have been targeted with threats and physical assaults ment. The British-created European Group for the Study from Christiania "residents."

EIR December 15, 1981 Special Report 29 The Fahd plan depends on a superpower thaw

by Robert Dreyfuss, Middle East Editor

The failure of the Nov. 25 Arab summit in Fez, Morocco, merely shelved for a period of time. Whether it is acted is a serious setback to the prospect of a peace agreement upon will be determined by the diplomacy of the next in the Middle East, and it leaves the Reagan administra­ two months, and the extent to which Washington and tion facing a dangerous and complex situation between Moscow can move toward a strategic accord on the now and the scheduled April 1982 final Israeli withdraw­ Middle East. If Reagan, emulating the Eisenhower of al from the occupied Sinai peninsula. The expected en­ 1956, can get tough with and force reality on the Israelis dorsement by the Arab bloc of Saudi Crown Prince and if the U.S.S.R. agrees to end its opportunistic sup­ Fahd's eight-point peace plan, the principal agenda item port for Libya's terrorist Col. Muammar Qaddafi, then at Fez, never materialized-thus eliminating what might it is possible that the two big powers can replicate have been a powerful diplomatic asset in the administra­ something like the October 1977 Joint Statement on the tion's otherwise aimless Middle East policy. Middle East . But the major conclusion to be drawn from the Arab summit is still a hopeful one. The reality of the Fez Danger of polarization meeting is that Fahd plan came far closer to actual The immediate danger, however, is that with the success than seemed possible earlier this year. In the postponement of the Arab summit the enemies of the coming months, careful diplomacy might yet succeed in Fahd plan will join together to escalate tensions in the bringing the Fahd plan to its intended result: a general region and polarize the Middle East between the United Arab willingness to make peace with Israel in exchange States and Soviet Union. Those enemies include the for a Palestinian state on the occupied West Bank and British Secret Intelligence Service (SIS); the Soviet KGB Gaza territories. and the ideologues in Moscow around Boris Ponomarev What the summit postponement signifies, however­ and Mikhail Suslov; and, finally, Israel's Mossad. especially by the boycott of the Fez meeting by Syrian It was these forces which combined to cause the President Hafez Assad-is that a fi nal decision on the assassination of Egypt's Anwar Sadat on Oct. 6, and Fahd plan will probably have to await an improved which are committed to joint efforts to undermine the environment of U.S.-Soviet rapprochement. Judging influence of the United States in the Middle East. It is from the outcome of the Nov. 22-25 meeting between the combination of British, Soviet, and Israeli secret Soviet President L.I. Brezhnev and Chancellor Helmut services who control the Muslim Brotherhood and other Schmidt of West Germany, it is now posible that Brezh­ extremist elements in the Arab world. nev and President Reagan may begin to grope toward an Quick visits to the United States by Israel's Foreign accord that would subsume the Middle East crisis. Chan­ Minister Yitzhak Shamir and then Defense Minister cellor Schmidt already has committed himself to try to Ariel Sharon last week have reportedly set the stage for mediate relations between Washington and Moscow. Israel to increase military pressure along the Lebanese, Thus, Prince Fahd's peace plan has not been defeated, Jordanian, and Syrian fr ontiers . In turn, according to

30 International EIR December 15, 1981 reliable sources, such actions by Israel are intended to plan. Pragmatically, it would be of great benefit to provoke increased Soviet involvment in Syria and the Syria; and politically Assad-having already accepted Arab world, meanwhile drawing America into support U.N. Resolution 242 of 1967-was on record as having for Israel's position (see page 44). accepted every point of the Saudi plan. Britain's Lord Carrington, who lobbied mightily in Yet Assad refused: for Syria to have joined the a vain effort to block the sale of AWACS radar planes Saudis in Fez would have meant an open break with to Saudi Arabia, has redoubled his efforts to destroy Moscow, chief military supplier to Syria, and it is very the Fahd plan . The British gameplan, sources report, is likely that the Soviet leadership warned Assad not to to lock the United States into a narrow position in attend the Fez meeting. In addition, British and Israeli support of the Camp David pow

EIR December 15, 1981 International 31 u.s. and Soviets begin disarmament negotiations: the questions· at stake by Criton Zoakos. Editor-in-Chief

The Geneva arms-control negotiations between the Within days after that historic vote, President Reagan, in United States and the Soviet Union which began at the a remarkable press conference, announced his proposal end of November are taking place in very fragile circum­ to cancel the scheduled deployment of intermediate­ stances, and represent perhaps the world's proverbial last range nuclear missiles in Europe if the Soviet Union chance before an uncontrollable plunge into a period of agrees to withdraw its own, already-deployed SS-20s. military conflicts, strategic showdowns and unbridled A few days later, on Nov. 22, President Brezhnev arms competition. paid a three-day visit to Bonn, West Germany, and That these talks are taking place at all is a tribute to subsequently, the U .S.-U .S.S.R. talks in Geneva started the sense of responsibility and peaceful commitments of promptly at the pre-scheduled date. They are expected to primarily three individuals: Chancellor Schmidt of the be exceptionally protracted, and their ultimate outcome Federal Repbulic of Germany, President Reagan of the is viewed genera lly as doubtful. United States, and President Brezhnev of the Soviet That outcome will depend on the political fortunes of Union. To a large extent, these heads of government the three protagonists who made the talks possible. have worked over many months toward the purpose of Reagan, Schmidt, and Brezhnev are all facing enormous getting the Geneva talks off the ground, over the objec­ political problem s at home. If the political fo rtunes of tions of powerful opposition raised by both political any one of the three suffers a serious reversal, the fragile factions and bureaucratic cliques within their respective peace process will disintegrate. nations. This delicate situation was best potrayed by a speech Contrary to widespread lies published in the major Chancellor Schmidt gave before the German Federal American newspapers, the Geneva negotiations which Parliament on Dec. 2. There are three distinct "philoso­ started Nov. 29 were made possible by many months of phies of military security," Schmidt emphasized in refer­ secret personal diplomacy conducted between Presidents ring to the various factions involved in the strategic Reagan and Brezhnev with the mediation of Chancellor debate, both East and West: first there is the tendency Schmidt. This "secret diplomacy" apparently started which argues that peace can be secured only if one's own very early in the Reagan administration, perhaps after side attains military superiority; second, there are those the President's first meeting with the Chancellor during who arg ue that onlY'unilateral disarmament of one's own the transition period. During the months which fo llowed side will secure peace; third , there is the view that the that initial meeting, Secretary of State Alexander Haig maintenance of military equilibrium between the two maintained an obsessive effort to impose exclusive per­ sides is a necessary precondition for establishing the sonal control over all U.S.-U.S.S.R. contacts, official political trust required for the maintenance of world and unofficial, diplomatic and otherwise. peace. The President's own personal channel of communi­ Schmidt, who identifies his efforts with this third cation with Mr. Brezhnev, mediated through Chancellor "philosophy of military security," proposed the estab­ Schmidt, apparently was the most important U.S .-Soviet lishment of a "politische Sicherheitspartnerschaft."a po­ liaison which eluded the watchful secretary's vigil. litical security partnership, between East and West for Although Secretary Haig himself was also fo rm ally the purpose of mainta ining world peace . He thus came committed to starting the Geneva negotiations, he jeal­ very close to proposing a political fa ctional alliance ously insisted on controlling the negotiating process, across the East-West boundary. because he desires to obtain from them a different set of Chancellor Schmidt is continuously confronted with policy results than the President does. The secretary's the threat of being toppled by fanatics from the so-called objectives have been in jeopardy ever since the Senate peace-movement within his own party and within his voted in favor of selling AWACS planes to Saudi Arabia. coalition government. The controllers of that peace

32 International EIR December 15, 1981 movement are primarily interested not in "peace" per se, crowd, the military are going to be at a severe disadvan­ but rather in toppling Schmidt in order to destroy the tage. Without an alliance between themselves and the tenuous Reagan-Schmidt-Brezhnev connection. Once political fo rces represented in the " Brezhnev-Grishin" this connection is broken , then the disaramament nego­ configuration, it will be difficult to prevent the Soviet tiations will fall in the hands of the one-worldist systems­ allies of the Club of Rome from imposing a SALT III­ analysis crowd associated with the British Secret Intelli­ like limitation on technological growth. gence Service and Lord Carrington's diplomatic deploy­ A similar problematic factional lineup existed in the ments. Under the control of this faction, the disarma­ Soviet Union when Nikolai Buk harin tried to impose his ment negotiations would either collapse and open the anti-industrial "agrarian socialism" model. The Bukhar­ way fo r an unbridled arms competition involving a pro­ in case is linked with issues very much alive today in tracted massive waste of economic resources, or in the Soviet politics. Bukharin anti-technology wrecking-op­ SALT III type of technology-control agreement designed erations were defeated by means of Stalin's purges. The to foster a "post-industrial society" political faction in issue of those purges was critical in Khrushchev's rise to the Soviet Union. power and it thus touches on the arrangements which Soviet President Brezhnev is facing a domestic polit­ brought into existence the post-Cuban Missile Crisis ical situation equally as uncertain as that threatening arrangement among factions which has ruled the Helmut Schmidt. Brezhnev's most formidable oppon­ U.S.S.R. from 1963-64 to date. That arrangement is nents are in the Suslov-Ponomarev configuration of the apparently about to be replaced in a way that will be Politburo, i.e., the "one-worldist" Marxist-Leninist ide­ closely associated with the Geneva disarmament negoti­ ological priesthood whose historical pedigree goes back ations. to an era in Soviet history dominated by such British­ Venetian intelligence assets as Karl Radek, Trotsky, and Bukharin. This faction, through its "systems analysis" cult institutions, is in close contact with both British intelligence and certain NATO intelligence centers through which the old European "black" nobility is working out its "one-worldist" scenarios (e.g., the Club of Rome, International Institute of Applied Systems Analysis, and the "Libyan" connection). A second faction within the Soviet Politburo chal­ From the official , lenging President Brezhnev's efforts is that which is associated with the military establishment. Their attitude Bonn communique basically is: we are willing to give a pro forma chance to the peace negotiations but a) the United States govern­ ...He lmut Schmidt and Leonid Ilyich Brezhnev stressed ment is too unstable and too war-provocative to be . the great importance of political dialogue between states, trusted and b) we shall be watching the world map to see influencing relations between them, especially in the what happens in the hot spots, the Middle East, Carib­ present international situation. They believe such a dia­ bean, Angola, Southwest Africa, and so fo rth, more than logue must fu lfill the task incumbent on all states of we watch the speeches at Geneva. overcoming the pressing problems of the present day. Both these Soviet factions tend to collaborate in They consider it important that both states contribute, in pouring all sorts of resources into the West European accordance with their responsibility, to a positive and and especially the West German "peace movement," stable development of the international situation and to along with Lord Carrington's and Willy Brandt's Social­ securing a lasting peace. ist International and, ironically, along with Israeli intel­ Mindful that such a policy plays an important role in ligence. If that "peace movement" succeeds in toppling the concrete shaping of bilateral relations in various Helmut Schmidt the "fears" and "preconditions" of fields, both sides will continue efforts to develop econom­ both the Suslov-Ponomarev and the military factions will ic relations of mutual interest consistently on the basis of have turned into self-fulfilling prophecies. If so, the existing treaties, especially the long-term treaty of May Brezhnev faction's chances of dominating the leadership 6, 1978, and the long-term program of July I, 1980. succession process in Moscow will be reduced to virtually They thereby assume that a good development of nil. This leaves the leaders of the Soviet military "hawks" economic relations, in accordance with mutual interests, with a serious problem on their hands: if the leadership has positive effects on their overall relations and can succession issues are reduced to a simple confrontation make a contribution to international stability and the between the military and the Suslovian/systems anslysis reinforcement of peace.

EIR December IS, 1981 International 33 They welcome the agreements reached by companies, only concern the affected states, but can also have nega­ banks and organizations on both sides about the deli very tive effects on the whole international situation. of Soviet natural gas to the Federal Republic of Germany They consider it particularly important in the present and other West European countries and of pipe and situation that all states, taking into account their respon­ pipeline equipment to the Soviet Union .... sibility fo r the maintenance of peace and for proper In the course of the talks, Helmut Schmidt and restraint in their mutual relations, concentrate their ef­ Leonid I1yich Brezhnev paid particular attention to the fo rts on the removal of existing sources of tension and questions of security, arms control and disarmament. the prevention of new situations of conflict. The only They belive it necessary to contribute through concrete reliable and sensible means fo r this is the achievement of negotiations to a stable parity of power at the lowest necessary political solutions. possible level. They set out frankly their respective views of the They expressed their satisfaction that the negotia­ situation in Asia, Africa and Latin America, where de­ tions agreed on Sept. 23. 1981 between the United States velopment has considerable significance from the view of America and the Soviet Union are to start in Geneva point of international security. They came out in support on Nov . .30. Both sides set out their respect ive views of of a solution of the existing problems by peaceful means the related problems, on which differences of opinion that would enable the people of these regions to concen­ between them ex ist. They take the view that the creation trate their efforts on realizing the task of their economic of balance at the lowest possible level. in the field of and social development. weapons which wi ll be the subject of the talks, is of great They are convinced that in the present world situation importance fo r consolidating stability and international contacts between the leading statesmen in West and East security, and that all efforts must be made to reach a are particularly important. They called for a continua­ corresponding agreement. ... tion of the dialogue and of the contacts between the Helmut Schmidt and Leonid I1yich Brezhnev stressed Federal Republic of Germany and the Soviet Union at that crisis and conflict in various parts of the world not the highest and other levels ....

What Schmidt and Schmidt continued: "I want to stress that our two nations should consider themselves to be in a kind of Brezhnev said peace partnership ....Our two nations were hit most The official West German press spokesman, Kurt by the last war .... Therefore our commitment is Becker, told the press on Nov. 23 that Chancellor never to let it happen again .. ..We k now from three

H elmut Schmidt, in his meetings with Soviet President person al meeting with you, Mr. Brezhnev, since 1978 Leonid Brezhnev, had stressed that because Germany that you are as much com m itted to peace as I am, or has had to live with the threat of Soviet missiles for as Mr. Reagan, the Presiden t of the United States, is.

years, it also has understanding fo r the Soviet concern You know me and k now , therefore, that I have always over the new missiles scheduled to be deployed in told you the truth. I know th at Mr. Reagan wants

Western Europe. "If you really w ant to prevent the tal ks, and wants substanti al disarmament on the mis­ stationing of new weapons on our side," Schmidt si les problem. I have perso nal ly never had any doubt

reportedly told Brezhnev, "you should red uce arma­ that you are no war-monger. But Mr. Reagan is not a ments on your side in order to make stationing of new war-monger either. ..." weapons in the West unnecessary." Schmidt, accord­ Leonid Brezhnev was reported by spokesman Za­ ing to Becker, stressed too that the issue of medium my atin to have responded in the fo llowing way: " ... range missiles should have been discussed "long ago We know the American position quite well. The new at the SA LT level," and that at the upcoming Geneva weapon s are a significant sh ift in strategic terms, they negotiations the French and British missiles should be can reach Soviet territory from Western Europe while included in the negotiations. Becker also reported that our SS-20s cannot reach U.S. territory ....Be aware

Schmidt told the Soviet President that: '" never be­ that on ly some min utes might decide, if the new lieved you, Mr. Brezhnev, would ever try to push the weapons a re stationed, on th e fate of the European nuclear button, but the existence of your missiles is a continent. ... We do not want war, we want peace. means of exerting possible pressure .... You must We a pprove the U.S. commitment to enter negotia­

withdraw all those missiles which are targetted against tions with us because this has been a lo ngstanding

E urop e ," proposal of the U.S.S.R."

34 1 nternational EIR December 15, 1981 Portillo's call for a "truce ofsi lence" in Central America from both the U.S. State Department and from the Nicaraguan and Cuban governments-lest tensions in Central America get totally out of control. Nicaraguan Interior Minister Tomas Borge fl outed Can Central America the Mexican request: "It is the aggressors who should moderate their language, not the victims of aggression." be rescued? ' And a few days later, Nicaraguan Foreign Minister Miguel D'Escoto, a priest fr om the Jesuit-controlled Maryknoll order, announced that he would visit Moscow by Dennis Small, Latin America Editor from Dec. 10-17, and told the press: "It's logical to suppose that in the talks between Nicaraguan and Soviet Henry Kissinger last week got personally involved in the leaders, we will speak of the support that the Soviet ongoing Jesuit and British intelligence plot to unleash Union could give in case the U.S. threats against Nica­ region wide warfare in Centr�1 America and the Carib­ ragua are carried out." bean. Kissinger travelled to four South American coun­ D'Escoto's attempt to embroil the Soviet Union in tries-Brazil, Argentina, Chile, and Peru-to convince the Central America crisis was preceded by a similar them to support a possible "Inter-American" military move to involve Mexico. After meeting with the Mexican intervention in Central America. From Buenos Aires, the president and listening politely to his request that Nica­ former Secretary of State provided special counsel to the ragua cool down its rhetoric, Father D'Escoto confided less-experienced Alexander Haig, telling him that an in private to friends that the Sandinistas' real contingen­ immediate, direct military intervention by the U.S. in cy plans center around what they view as a "certain" Central America "would be too giant a step," Besides, American invasion of Nicaragua. Under such circum­ he pontificated, there are "more efficient intermediate stances the Sandinistas plan to retaliate with takeovers of steps" that can be taken. foreign embassies in Managua, a possible invasion of Kissinger was taking into account the resistance to neighboring Honduras, and activating guerrilla allies in entering a shooting war in Central America on the part the rest of Central America. The only real question, of both the Reagan administration and American allies D'Escoto noted privately, is whether Mexico will militar­ like Mexico. The Kissinger/Haig counter-strategy is to ily defend Nicaragua under such circumstances. build up such tensions and confrontations in the area The idea that President Lopez Portillo might deploy that Mexico's voice is drowned out in the din, and the Mexican military to fight a land war in Central President Reagan and his more realistic Pentagon advis­ America against U.S. troops, is ludicrous-but it is ers can shortly be swept into the military momentum. clearly the direction in which the Jesuits would like to The key to the success of this strategy of escalating push developments. provocations, is the cooperation of Fidel Castro and his Haig, fo r his part, responded similarly to Mexico's Nicaraguan allies. To every threat emanating from the request for reduced rhetoric. The Secretary of State State Department to his regime, both Castro and the leaked to the press that the State Department had pre­ Sandinista Junta have answered with counter-threats and pared a new secret White Paper "documenting" Cuban war preparations. military presence in Central America. Haig also let it be This "Fidel and AI" game, as it has come to be known known that he will launch a "ferocious attack" against among Washington insiders, is made possible by the fact Cuba in a speech he will deliver later this week at the that allpa rties involved are essentially run by the Society annual meeting of the Organization of American States. of Jesus (Jesuits). Kissinger, of course, is based at the Haig has for weeks also been publicly threatening to Jesuit Georgetown University in Washington, the de­ blockade Cuba and Nicaragua, and on Dec. I pushed ployment center for all of Central America's "leftist" through a reorganization of the U.S. Caribbean Com­ Jesuits. Haig is Jesuit-trained, and his brother is a mem­ mand designed to facilitate such a move were it adopted. ber of that schismatic order. The Sandioiistas were put in Pentagon sources, however, have told EIR that the Haig power by the Jesuits and are totally controlled by them blockade plan is, "off the record, total horse manure." down to the present. And the bearded enfant terrible of The Pentagon spokesman explained that it would require the Caribbean, Fidel Castro himself, was han d-picked, at least one-third of all American naval fo rces and would educated, groomed (so to speak), and put in power by therefore totally undermine America's presence in the the Society of Jesus-as we document in the exclusive Middle East; it would raise monumental strategic consid­ expose below. erations should a Soviet ship try to run the blockade; and This "right-versus-Ieft" Jesuit game was visible in the its efficiency in cutting off arms shipments is highly responses this week to Mexican President Jose Lopez questionable.

EIR December 15, 1981 International 35 Profile

Fidel Castro: how a Jesuit asset is manufactured by Gretchen Small

American conservatives and Latin American leftists Jesuit-controlled instrument he was molded to be. share the common delusion that Fidel Castro is a "Soviet agent," that he is a Russian puppet carrying out the United Fruit Company bidding of "international communism" in Latin America "You could see this .... That he was to do great and the rest of the Third World. U.S. Secretary of State things .... That he is for great things, not fo r ordinary Alexander Haig is fo nd of promoting that myth by things," wrote Father Amando Llorente, SJ. in his denouncing Castro as a "Russian proxy" at every turn. evaluation of Fidel Castro upon the latter's graduation And Castro himself likes to contribute to the delusion. from Cuba's exclusive Jesuit-run Colegio Belen in Ha­ But the fact of the matter, as Haig knows perfectly vana in 1946. Castro had in fact gone to Jesuit-run well, is that Fidel Castro is a long-term cultivated asset schools throughout childhood, sent there by his middle­ of the Society of Jesus, the Jesuits, whom they have class father, who had made his first money working fo r successfully thrust deep into the Soviet camp. the United Fruit Company's vast sugar plantation in Castro was educated by the Jesuits. He was selected Cuba-the same United Fruit (UFCO) that is extensive­ by them to continue his career in politics. His 1959 ly involved in the international drug trade, and which revolution was financed and supported by the Jesuits and has worked closely with the Jesuits fo r the past decades their allies. In the mid 1960s, his Cuban regime fo llowed i n train.ing left and right terrorists across Central Amer­ the Jesuit policy of promoting "wars of National Liber­ ica (see EIR , Dec. 8). Castro Sr. eventually made ation" in the Third World. In the early 1970s Castro enough money working fo r UFCO to establish his own established a strategic alliance with the Jesuits by joining sugar plantation, on land bordering UFCO's estates in the Allende government in Chile in calling fo r a " Chris­ the Cuban province of Mayari . tian-Marxist dialogue." And he re-affirmed that alliance United Fruit, then based out of New Orleans, and most recently in a December 1980 Cuban Communist now called United Brands, is central to the real story of Party meeting which helped trigger the current Jesuit-led Castro's 1959 Cuban Revolution, since its apparatus destabilization of Central America. typically ran both sides of that operation. For example, Castro has on occasion-chiefly under the whole­ the bloody dictator whom Castro eventually overt hrew, some influence of Mexican nationalists and of pro-devel­ Fulgencio Batista, was, like Castro, the son of a United opment factions inside the Soviet Union-adopted poli­ Fruit employee. Batista came to power in 1952 through cies hostile to the Jesuits' zero-growth perspective. This a military coup, and established a government interna­ was the case with his speech at the August 1979 Havana tionally recognized as nothing b ut a front for the Non-Aligned Conference, in which he supported a ne­ gambling, prostitution, and drug-running apparatus of gotiated solution between North and South to the eco­ Meyer Lansky, whose Caribbean mob networks heavily nomic devastation of the Third World. And it has gen­ overlap UFCO's New Orleans mob. erally been the case with domestic economic policies Yet the entire opposition movement to Batista, which have fa vored Cuba's industrial growth. But on including Fidel Castro, was also financed by UFCO balance, and emphatically today, Castro remains the and the dope lobby, principally through the person of

36 International EIR December 15, 1981 one Carlos Prio Socarras. Pdo, a social democrat, had aid from Figueres, Betancourt, Prio, and others . Fi­ been President of Cuba from 1948 until Batista over­ gueres, incidentally, did exactly the same thing 20 years threw him in 1952. It was precisely during the Prio years later when he financed the entire Southern Front of the that Lansky's boys moved their operations into Cuba Sandinista revolution. lock, stock, and barrel. Prio in fa ct, until his death in 1970, was a long-time board member'of Permindex, the Christians and Marxists corporate shell used by the highest levels of the inter­ Pdo Socarras and many of his immediate associates national drug lobby to carry out political assassinations. broke with Fidel Castro during the 1960-6 1 radicaliza­ Permindex has been identified by French intelligence, tion of the Cuban revolution. Many of them left Cuba­ for example, as responsible fo r over 30 assassination to take up new positions dominating the drug-running attempts on the life of Charles de Gaulle and was networks in the Cuban exile community. The ideo logy investigated by New Orleans District Attorney James they left behind, however, was not terribly different Garrison in connection 'with the John Kennedy murder from their own jesuitical outlook. as well. In fact, there is strong reason to believe that the It is conservatively estimated that Permindex's Prio Jesuit/Dope, Inc. networks, including those esconced in personally pumped in over $5 million to fi nance every the U.S. government at the time, deliberately drove one of the terrorist "action groups" opposing Batista Cuba "communist" in the early 1 960s, in order to during the 1950s-including somewhere near a quarter deliver it to the Soviet bloc as an "offer that couldn't be million dollars to Castro's guerrilla movement. It was refused." Cuba thus became a kind of "tar baby" fo r Prio who financed Castro's famed Granma boat expe­ the Soviet Union in the Caribbean, a tar baby which dition fr om Mexico to Cuba in 1956, to the tune of has been used since by these Jesuit networks and their $72,000, fo llowing a meeting between Castro and Prio allies in the Soviet KGB to strengthen their interests in McAllen, Texas in August 1956. and factional position within the Soviet Union. Cuba has been critical to pushing the Soviet Union Guerrilla baptism to endorse the suicidal policy of "wars of National Pdo was the leading Cuban in the so-caIled "Dem­ Liberation" for the developing sector; and it has repeat­ ocratic Left" in Latin America in the post-war period­ edly served as a casus belli between the two superpow­ the allies of the Socialist International which included ers, in 1962 helping to bring the world to the brink of such personalities as Venezuela's R6mulo Betancourt, nuclear war. Costa Rica's Pepe Figueres (a wholly owned individual Explicit Cuban-Jesuit cooperation-dubbed the subsidiary to this day of United Fruit), and Peru's "Christian-M arxist dialogue" at the time-began on a Mussolini-loving Haya de la Torre. Put together by a practical level in 1972. During his visit to Allende's combination of Jesuit and Italian oligarchical interests, Chile that year, Fidel Castro held a six-hour meeting in and financed by United Fruit and the RockefeIlers, the the Cuban embassy in Santiago with the leadership of Democratic Left created an armed, leftist mercenary the Jesuits' newly fo rmed "Christians fo r Socialism" force known as the Cari bbean Legion whose nominal group. Liberation Theologists present stated afterward mission was to overthrow various right-wing dictator­ that Castro there acknowledged fo r the first time that ships then established in Latin America. the alliance between "revolutionary Christians" and As a university student, Castro received his first Marxists could be "strategic," and not merely tactical. political and insurrectionary training fr om precisely The Cuban-backed, but Jesuit-run, Sandin ista Revolu­ these networks. Castro's baptism as a guerrilla occurred tion in Nicaragua in 1979, sealed the practical impor­ in the Caribbean Legion's own fi rst operation in 1947- tance of this "Christian-M arxist dialogue. " a planned expedition to overthrow the Dominican Re­ Cuba's present total adoption of the Jesuit policy public dictator Rafael TrujiIlo, launched from the Cu­ line was most emphatically reaffirmed during the De­ ban island of Cayo Confites. cember 1980 Congress of the Cuban Communist Party. The principal military advi ser and trainer of the At this meeting, Castro characterized both the "revolu­ Caribbean Legion throughout this period was the Span­ tionary Christian elements" in the Church and the ish Civil War veteran "General" Alberto Bayo, who Socialist International fo rces, as critical aIlies for all the then went on to train Castro's Granma expedition team "national liberation movements" Cuba endorses in Lat­ in Mexico. Bayo also trained Castro's Latin American in America and worldwide. guerrilla operatives in later years, and once referred to Cuba's short step to its current posture of increasing Che Guevara as his best pupil. political and logistical backing fo r the "left" side of the Alongside Bayo's military backing, the Caribbean genocide sweeping Central America has brought Fidel Legion supported Castro's insurrection with financial Castro full circle to his original Jesuit roots.

EIR December 15, 1981 International 37 resistance to the nationalization plan of the government. FRANCE At bottom lies an astonishing level of incompetence on economic policy . Mitterrand himself knew nothing about economics before assuming power. According to insiders in Paris, he has become increasingly detached from fundamental economic and strategic problems, able to concentrate only on day-to-day power struggles. In short, he has become increasingly mystical, believing himself to have been given some historic cleansing task, Mitterrand's fi rst though having no coherent economic or strategic policy. The policy he does have is simple: destroy the people, government crisis institutions, parties, and realities of the Gaullist era. Beyond that all is haze. by Philip Golub The Prime Minister, Pierre Mauroy, has shown him­ self recently to be moving in the same direction: his awkward, halting, and mediocre presentation of the In announcing late last month that the French national Nationalizations Bill in fr ont of the Senate revealed a assembly will be asked to grant the Mauroy government more than superficial incompetence on fundamental exceptional powers, Fran�ois Mitterrand's Socialists questions. made one further large step toward the alienation of Who then rules economic affairs in France? In part, democratic republican civil rights in France. Jean Riboud, Chairman of the Schlumberger corporate The week of Dec. 7- 11, the Socialist-controlled par­ empire; Bilderberg Society member Jacques Attali, in liament will abdicate its legislative powers to the govern� part. Minister of Economics Jacques Delors; and 10 or ment, which henceforth will rule by decree on all matters 15 equally trusted advisers all "contribute to the debate." concerning social, labor, and economic policy. Even The result: incoherence and incompetence. One need but though the use of Article 38 of the Constitution of the look at the government to understand how this works: Fifth Republic is fo rmally legal, previous governments Jean-Pierre Chevenement is a radical Marxist, who is of the Fifth Republic have invoked the act only under pro-nuclear and who hates Michel Rocard; Michel Ro­ exceptional conditions of parliamentary paralysis, such card, Minister of State for Planning, is an anglophile as in 1967 under de Gaulle. technocrat and violent anti-communist who, however, Given that Fran�ois Mitterrand's Socialists possess hates Mitterrand and is hated in return; fo ur Commu­ an overwhelming majority in the Parliament, it is all the nists whose allegiance is exclusively to their party, but more astonishing that the government should invoke who have their word on policy; and two or three radical measures originally designed to correct continuous con­ socialist utopians such as Minister of Culture Jack Lang, frontations between the parliament and the executive. Minister of Solidarity N icole Questiaux, and Elysee aides The Socialists may deviously argue that the measure is such as Club of Rome policy advocate Paul Quiles. designed to quicken the pace of change and veto the The cacaphony of voices merely reflects the reality upper house's opposition, but the measure is unquestion­ that Mitterrand cannot fulfill the fa ntastic promises he ably an assault on the very principles of parliamentary made to the French population before the vote: a real 3 democracy so long touted by the author of Le Coup percent growth rate, major new investments, major em­ d'Etat Permanent." ployment programs, and reduction of inflation. In the Why dissolve a parliament or emasculate it when it is context of worsening international economic crisis, an little more than a rubber-stamping institution of the incompetent mixture of Keynesian reflationand selective presidency? Where is the crisis which has provoked this austerity has antagonized whole layers of small business­ disproportionate, frantic reaction? men who helped put Mitterrand in power. Is the aim to impose silence on the opposition in He promised the unions many more jobs. He prom­ parliament? Yes, in part. It is a fi rst step in an attempt to ised small and middle industry tax relief and the ability destroy the Senate? Yes, of course, yet much more is at to compete. He now asks both to face the crisis and is stake. A mere six months after assuming power, the attempting to impose both policies by will alone. He has Mitterrand regime is in a crisis. alternatively imperiously commanded and coaxed the The crisis is not so much the doing of the opposition, middle-sized industries to employ more workers and cut although striking results have been obtained in the Sen­ down work hours. ate, which is still dominated by the UDF (Union pour la Yet only the very large, high-technology state enter­ Democratie Fran�aise)-RPR (Rassemblement pour Ie prises, such as the aeronautics industry, can affo rd to Republique) coalition, such as the Senate's successful employ more under conditions of world recession-and

. 38 International EIR December 15, 1981 then, according to calculations, only if productivity in­ JAPAN creases at least 3 percent. The SNPMI, the association of small and medium­ sized industries which backed Mitterrand's candidacy, now stands in opposition to everything the government does. The continuous turbulent interruptions of Budget Minister Laurent Fabius at the recent Socialist Party convention in Valence testifiedto the change in mood. As the crisis intensifiesdomestically and internation­ ally, the unions will be fo rced to oppose the government Cabinet reshuffle as the latter fo rces austerity and slashes living standards. The major gains made by the generally oppositional strengthens Suzuki union, Force Ouviere, in La Hague over the CFDT (the left-wing trade union confederation) are eloquent testi­ by Richard Katz mony of things to come. Mitterrand is in a hurry. He must smash institutions, reduce the opposition, divide the enemy, get control of Japanese Prime Minister Zenko Suzuki-who has con­ the nation before the crisis gets out of control. demned Federal Reserve Chairman Paul Volcker's high Mitterrand's race for power has been slowed by the interest rates more than any other head ofstate-reshuf­ Senate, which has adopted a strategy of constitutional fled his cabinet Nov. 30 in a fashion that strengthens his resistance . The Senate and Constitutional Court remain administration's ability to continue opposing Volcker. the constitutional power bases left to the opposition. In particular, the reshuffleincr eases the power of the When overruled by the National Assembly, the opposi­ faction of former Prime Minister Takeo Fukuda within tion-dominated Senate will have the Court as a final the cabinet, which is a carefully balance coalition of the recourse. Were Mitterrand to attempt to override both five major factions within the ruling Liberal Democratic Senate and Court, he would plunge into unconstitutional Party (LOP). Fukuda is widely believed to be the "elder illegality. statesman behind the throne" who advised Suzuki on The opposition is greater than he imagined. Whole many of the fo reign policy initiatives taken since this modern nations cannot be reshaped in six months; Gaull­ spring: e.g. the alliance with West German Chancellor ism is not so easily reversible. Heady with power, Mitter­ Helmut Schmidt in opposing Volcker; heavy financial rand launched in early fa ll a scorched-earth policy . The support for industrialization programs in the developing police were purged, and were put under systematic per­ countries, and opposition to Alexander Haig's China manent attack by Mitterrand's Interior Minister Def­ Card and provocatory posture toward the U.S.S.R. ferre. The minister accused the police of racialism, bias, The success of the reshuffle means that Suzuki is very and in some cases, criminality. In six months the govern­ likely .to be re-elected as LOP President and thus Prime ment completely alienated the national police force of Minister this coming fall, unless some intervening event France, one of the best of the world. Even pro-Socialist destabilizes his regime. parts of the police had reason to wonder at government The most important single shift in the regularly policy when youth gangs were permitted to riot in the scheduled midterm reshuffle was the replacement of Lyons area by the government, which forbade the police Foreign Minister Sunao Sonoda by Yoshio Sakarauchi. to vigorously intervene. Sonoda's style was an unusual bluntness in criticizing At the same time, implicit support for Armenian, what Tokyo regarded as mistakes by Washington. He Latin American, and other varieties of terrorism has had been suddenly appointed last May when Suzuki made the security fo rces furious: the plotters jailed for dismissed Foreign Minister Ito and reversed Ito's policy attempting to destroy the state are free today to roam the of bowing to Washington even on mistaken policies. At streets seeking revenge. Only after5, 000 policemen dem­ the time of Sonoda's appointment, one Japanese banker onstrated against Defferre in LYQIls three weeks ago has told EIR, "Sonoda was appointed because he talks big the government realized the full extent of the malaise. and will 'tell off Washington. Then he will be replaced And the abolition of military security and military police by a negotiator." has led to similar insecurity within the army. The person is Sakarauchi. A 69-year-old party politi­ The programs of the zero-growth utopians around cian who previously served as Minister of International Mitterrand can only be implemented in full under a Trade and Industry (MIT!) and in the powerhouse post dictatorship. The Socialists are moving in that direction, of LOP Secretary-General, he is known as a "fixer", but clumsily. The government is stimulating opposition, much like Suzuki himself. He is expected to apply his creating new resistance . talents to trying to "patch things up" with Washington,

EIR December 15, 1981 International 39 while still holding onto policies that Tokyo believes are fact get the powerful job of LOP Secretary General. in its national interest and the interest oflong-term U.S.­ However, Nikaido obtained this post as part of a Japan partnership. carefully designed all-faction cabinet. His power is One mark of the reshuffle's success, at least fr om being kept within bounds. Suzuki's point of view, is that U.S. press supporters of The overall character of the cabinet is a balance in Haig and Volcker, led by the Washington Post and the the fashion of what the Japanese regard as "national­ Morgan-owned New York Journal of Commerce (JOC) interest consensus." The 21 posts are divided as follows: immediately raised alarms at both the reshuffle and fo ur each fo r the most important factions of Suzuki, Suzuki personally. The JOC reserved its most venenous former Prime Minister Kakuei Tanaka and former criticisms for the reasonable statement of Economic Prime Minister Takeo Fukuda (an increase of one for Planning Agency Director Toshio Komoto that the Fukuda); three each for prime ministerial contenders precondition for resolving trade disputes is economic Yasuhiro Nakasone and Toshio Komoto; and three expansion. Komoto, a faction leader who was retained nonfaction ministers. Fukuda increased his power (and during the reshuffle, is Japan's foremost public oppo­ thus policy influence) not only by obtaining the power­ nent of both Volcker and the low-growth Club of Rome ful MITI minister's post for his "crown prince," Shin­ ideas fa vored by Volcker, Haig and Treasury Secretary taro Abe, but also by taking away the powerful patron­ Donald Regan. Komoto had served as Suzuki's chief age-loaded Construction Ministry from the Tanaka adviser at the October North-South summit in Cancun, faction, and obtaining one of the three LOP executive Mexico. posts for his faction. Prior to the reshuffle, the Haig-Volcker-Regan fac­ The cabinet is also heavily loaded with men known tion tried to destabilize Suzuki. Beginning with Haig's as party politicians rather than fo rmer Ministry bureau­ advice to Reagan to refuse Suzuki's request for a crats. These constituency and business-tied politicians personal meeting at Cancun, this faction used defense tend more than Foreign Ministry bureaucrats (for ex­ and trade issues to try to create the impression that ample), to balance what they regard as national interest U.S.-Japan relations would be damaged unless the with the ever-present need to maintain good ties with reshuffleproduc ed a cabinet which supported their own Washington whenever the two goals conflict. policies. Haig's deputy Walter Stoessel warned in Tokyo that Haig's trade-war response Congress would link the defense and trade issues. The Haig-Volcker-Reagan faction's response to the Heritage Foundation-linked Sen. Jesse Helms (R-N.C.) reshuffle was seen immediately at the Dec. 1 Senate circulated a memo which personally defamed Suzuki International Trade Subcommittee hearings on trade and Sonoda as "leftists" and proposed threatening and the auto industry. Unprecedentedly harsh attacks Japan with "trade reprisals" unless Japan did "more" on Japan's successful economic system were made by on defense. the three administration witnesses: Assistant Secretary Donald Regan next went to Tokyo to warn of trade of State Robert Hormats (a Carter holdover), Com­ reprisals unless Japan lowered its trade surplus with the merce Undersecretary Lionel Olmer (a Kissinger hol­ United States, which could hit $15-$17 billion this year. dover), and Deputy Special Trade Representative David Suzuki and Komoto repeatedly pointed out that, while Macdonald. Hormatz and Olmer in particular tried to Japan restrained its exports in p·articular fieldssu ch as promote the impression that U.S. exporters' inability to a 10 percent absolute drop in auto shipments to the get equal market access in Japan on some items was the United States, the major cause of the overall trade major cause of America's trade deficitwith that country, imbalance is the disruptive currency, trade, and invest­ a ludicrous proposition never before advanced. Hor­ ment effects of Volcker's high interest rates. The admin­ matz and Olmer, echoing a notorious Carter-era speech istrations's escalated rhetoric on the trade issue, accord­ by the fo rmer, demanded that Japan virtually restruc­ ing to a Senate Finance Committee source, led to an ture its entire domestic economic and business system, unleashing of protectionist sentiment on Capitol Hill. i.e., the system Suzuki represents. Ironically, this system This in turn produced a sense of a U.S.-Japan trade was created by Japan in the 1870s and 1880s on the crisis right before the reshuffle. model of the economics of Alexander Hamilton and Abraham Lincoln. A balanced coalition Fired up by weeks of administration-led crisis-mon­ The Haig-Suzuki-Volcker faction hoped their tough gering, Sens. Robert Dole (R-Kans.) and John Danforth tactics would lead either to a knock-down, drag-out (R-Mo.) then threatened to legislate measures including fight that would destabilize Suzuki, or at least result in a special tax on Japanese products sold here, unless greatly increasing the power of the Kissinger-associated Japan "opened its markets." Under the guise of trade Japanese politician Susumu Nikaido. Nikaido did in frictions, a political assault has been launched .

40 . International EIR December 15, 1981 in Kosovo could set in motion all the other nationa,ity questions in the Balkans which remain "unsolved" since World War II. While Greek commentators and politi­ cians now charge that Greeks living in Albania are Balkan crisis over oppressed, the Yugoslav RepubJic of Macedonia re­ proaches the Tirana (Albania) regime for repressions 'Greater Albania' against Albania's Macedonian minority. When unrest broke out among the Albanian popula­ tion in Kosovo last March, it was difficult for some by Edith Hassman i� Wiesbaden outside observers to understand why the people of this province in southern Yugoslavia, who, thanks to geo­ The Balkan peninsula, which gave its name to the strate­ graphical proximity, common language and kinship re­ gy of fragmenting nation-states for the benefit of impe­ lations, are better informed than anyone else about the rial strategic goals, is primed to explode once again. The wretched conditions within Albania, could nevertheless footsoldiers of British and Soviet intel1lgence services are take to the streets under such slogans as "Long Live on the march there, as are the overlapping freemasonic Enver Hoxha" or "We Want a United Albania." One and religious fu ndamentalist networks of the ancient example sufficies to illustrate the difference in living European oligarchy whose histc.rical headquarters is standard. In Kosovo, there is one car to a family in the Venice. cities and one to every three families in the countryside; An old piece of Venetian turf, the Albanian ethnic in Albania, there are not even bicycles. province of Kosovo inside Yugoslavia, is the point of To discover why British 'intelligence finds Albanian leverage. The Albanians of Kosovo, which is a part of chauvinism the best lever ' fo r shaking the entire nation­ the Serbian Republic, have demanded from Belgrade alities structure in the Balkans with the aim of destabil­ recognition as an independent republic and thereby the izing Yugoslavia, one must examine the historical con­ right to secede from the Yugoslav fe deration and seek nections, networks, and traditions which the British have merger with the "motherland," Albania. already mobilized many times in history for political Riots swept Kosovo last spring, in the wake of which power purposes. The catchword is Balkan War. the communist party there has suffe red one purge after another. Local police were reinforced with special units Secret societies of Dervishes for combatting the underground nationalist movement, A comparison may be drawn with the destabilization provio.ng at least the appearance of calm. But in Octo­ of Iran by Khomeini's hordes. Ninety percent of the ber, the London Economist. which reflects the priorities Albanians in Yugoslavia are Muslims, and only 10 of British intelligence circles, advised the Yugoslav gov­ percent are Christians. As one observer stated recently, ernment to grant the Kosovars their republic now in the Catholic population in Kosovo-most likely on order to avoid "a bigger explosion later." The Kosovo instructions fr om the Vatican, mediated through local story is by no means over. priests-has maintained strict distance from the unrest, Abroad, the anti-Yugoslavia activities of Kosovo which was exclusively carried out by Albanian Muslims. Albanians have reached the point of terrorism. In July, a In his recently published book Sonderfa ll Albanien (The "Croatian-Albanian" underground organization, Case of Albania), Albanian affairs expert Bernhard fo unded in Sweden not long before, claimed responsibil­ Tonnes writes that these Muslims are influenced to no ity fo r an attack on two Yugoslav diplomats in Brussels. small extent by a numerically small group of orders of According to the West German Press Agency (DPA), Dervishes. These Dervish orders are organized as secret this group announced that there would be further acts of societies, so that very little is known about them. terror unless its demands for an independent Croatia and Even if the uprisings in Kosovo were carried out by "the return of Albanian regions to Albania" were satis­ Muslims, the reader may object, this does not explain fied. The Kosovo Albanians are demanding that their the "Great Albanian" character of the movement. How fu ture "republic" encompass Albanians who live in Ma­ can a Muslim consider as his homeland atheistic Alban­ cedonia and Montenegro, two more of Yugoslavia's six ia, where all religions are banned and the mosques (and constituent republics. At demonstrations held this past churches) locked? summer in Washington, Stockholm, Geneva, and Frank­ At this point, an error must be cleared up: the fu rt, Kosovo emigTt!es distributed a map depicting communist leadership of Albania has always waged a "Greater Albania." It provoked heated debates in the bitter struggle against the Catholic religion, as a repre­ Greek parliament, because the map not only covered sentative of Western culture, while the historically "pos­ areas within Yugoslavia, but also claimed a part of itive" role of Islam and the Orthodox Church is digni­ northern Greece. "Great Albanian" chauvinism revived fied even in the writings of Albanian communist chief

EIR December 15, 1981 International 41 Enver Hoxha. One effect of the Kosovo unrest, an up to the highest degree of "enlightened pantheism." ironic but perhaps an intended one, was to thrust the Politically, the Bektashis over the centuries were Serbian Orthodox Church into prominence in "a spec­ always enemies of the Ottoman Empire, a fact which tacular rapprochement with the central authorities" in proved useful for their rapid expansion under the Al­ Belgrade, as one French report put it. To combat banian tribal chiefs and fe udal lords. Their Shi'ite Albanian nationalism, the government employs Serbian beliefs reject any worldly governmental power. This sect nationalism, which has given Serbian· Orthodoxy new possessed enormous influence in the Ottoman Empire: opportunities. until the Sultan's infantry, the Janissaries, was disband­ In its own right and as catalyst of such processes in ed in 1826, it was the military arm of the Bektashis neighboring territories, Albania, which first came under rather than that of the empire. In the areas of Bektashi Venetian control in the 12 century and then lived 500 influence in the Balkans and Asia Minor, the monaster­ years under Turkish rule, has remained, from the acqui­ ies of the order never lay more than six hours journey sition of official independence in 1912 up to the present apart, so that any traveler in the Ottoman Empire was day, a bulwark of orientalism on the European conti­ compelled to make use of their "hotel service." The nent. Bektashi Grand Vizier Ali Pasha employed the brothers of the order as spies and diplomats. In the 19th century, The Bektashi they were the main movers of the so-called Young Turk This historical continuity stems above all from the movement, which, as the British Empire wished to fact that Albania fo r centuries has been the homeland expedite the disintegration of the Ottoman Empire, was of the Bektashi Dervishes, who today still control assigned appropriate subversive tasks by the English approximately 15 to 20 percent of the Albanian popu­ and Italian freemasons. lation, and most probably have installed several of their It might seem a paradox that the Bektashis, members in the Central Committee, if not the Politburo, throughout their long political career, always supported of the Communist Party. Despite Turkish republican the fu ndamentalist, anti-Western and anti-progress lines Kemal Atatiirk's having banned the order in 1925, there in the Islamic world, while their leaders, right up until are probably 7.5 million Bektashis in Asia Minor. today, cultivated personal contacts with the "intellectual The Bek-tashi Order, whose fo under Haxhi Bektash elite of Western Europe." In the last century, for Veli came fr om Persia, expanded into the Balkans example, the blen ding of Bektashis and freemasons during the period of Turkish rule. Tonnes describes it went so far in Albania that the two cults founded joint as "a pantheistic Shi'ite sect with pronounced Mani­ lodges. Regardless of any East-West coloration of the chean influences." It unites "pagan, Christian, and issue, the commonality of world views between the Islamic" elements in its philosophy and its members are Bektashis and the freemasons resides in the fact that the only ones, besides the Sufimy stics, to accept the so­ both are pagan cults, which, although rightly banned by called "Hurufi" number theory, a "revelation" which the great religions as heresies, nevertheless enjoy great holds that divine creation repeats itself in a recurring support among certain circles, as instruments for estab­ cycle, and that each cycle lasts 1 ,360 years. lishing a neo-fe udalist. oligarchical world order. We Since the order is organized as a secret society and need only refer to the examples of Club of Rome co­ its members are sworn to protect the secrets from fo under Alexander King, who is a Sufi mystic, and the outsiders, fe w details of Bektashi mysticism are known. recently killed Ayatollah Beheshti, who belonged to a Bektashi holy men are distinguished, however, by their freemasonic lodge in Hamburg. In Albania, these view that they, unlike normal mortals, are able to pagan , pantheistic ideologies have survived in unadul­ achieve unity with God-who not only dwells in every terated fo rm. man, but also peeps out fr om behind every plant, every leaf and every musical note-in one moment of "pas­ 'The religion of Albanians is Albanianism' sionate love." Their opponents in the orthodox Islamic This key phrase from the vocabulary of Enver camp reproach them for holding orgiastic cult ceremo­ Hoxha brings us back to the circumstances under wh ich nies, in which at night, behind locked doors, they enjoy "Albanian nationalism" was fo rmulated in the second unveiled women and alcoholic means of intoxication. half of the last century . The Albanian national myth The Bektashis also believe in transmigration of souls; it must somehow deal with the fact that the tribal chiefs has been reported that their monks used to wear bells and fe udal lords occupied a privileged position under on their shoes to scare away insects, for they feared they the Turkish occupation and that the "Beys" looked might otherwise trample an ancestor to death. Like that down with great contempt on the neighboring Slavic of the freemasons, the Bektashi organization has diffe r­ populations, who were employed as guest workers on ent degrees of initiation into the secret knowledge­ their estates. Albania was "Bektashiland." from the lower degrees of downright silly hocus-pocus The" two leaders of the so-called national rebirth of

42 International EIR December 15, 1981 Albania, Nairn Frasheri (1846- 1 900) and his brother goal in the region fo r this century is to fragment the Sami (1850-1 904) were just right for the task. Nairn, a Soviet Union. Bektashi theologian and Sufi mystic, made no secret of During World War II, the British were already his hope that Bektashi mysticism would one day become cultivating the Bektashi Albanians as a future Trojan "the religion of all Albania" and be the connecting Horse in the Soviet bloc. Churchill's "generous" tissue binding together the various Albanian tribes and concession to Stalin, that Albania would belong to the religions. He is the creator of a racist national ideology, communist sphere of influence while the Soviets with­ still alive today, which is mixed together with the drew fr om Greece as a return favor, must be interpreted pantheistic Bektashi outlook and Nietzschean superman against this background. Sir Julian Amery, the British philosophy. Here is a morsel fr om Nairn'spo etry: liaison officer in Albania, had strict instructions to promote, as best he could, only the communist part of Men are based all in certain races, the resistance movement, which was also supported by Each one has its different type, the Bektashi and a great number of the Albanian fe udal The white race is the best of them, lords. The chief of the "Special Operations Executive" As in everything, so also in its face. (SOE) bureau in Cairo, responsible for the entire Middle The others all have different colors, East including Albania, was Jame Klugman, the very Yellow, black, re d, brown; � same Klugman who in the 1930s had built Ia communist However many men there are in these races, cell at Cambridge University together with Guy Burgess They are all, so to speak, barbarians .... and Harold "Kim" Philby, the "master spy" of later The white race is divided into nations, years. In the 1950s, Klugman attained the post of And is split into branches .... Politburo member in the Communist Party of Great Of that race which came into Europe, Britain, while his comrade Philby defected to the Soviet And then divided into many pieces, Union. All this was preceded by an SOE operation in The fo remost obviously are the Pelagians Albania, intended to heighten Philby's worth in Soviet And their sons, we Albanians. eyes. In 1947, Albanian monarchists planned a landing -Science, 1888 operation by sea and by land, to free their homeland Since Albania became independent in 1912, the fr om "the communists"-with promised British and Bektashi have played an important role in running the American assistance, naturally. Philby, at that time on government apparatus. Many ministers came fr om this duty at a high-ranking post in British intelligence, group and dominated cultural· life. When the Albanian "betrayed" this ridiculous undertaking to the Soviet Fascist Party was fo unded in 1939, under the Italian Union. Since his flight east, Philby has enjoyed a occupation, its party newspaper bore the name of the meteoric ca,reer, reaching the rank of KGB general. greatest Bektashi shrine in Albania, the Tomori moun­ From this position, he promoted Khomei ni's seizure of tain. During World War II, the Bektashi leader Marta­ power in Iran and is generally known to spur the Soviet neshi fought in the communist resistance movement led leadership toward support of Islamic fu ndamentalism. by Enver Hoxha. Martaneshi, who made Hoxha a British intelligence counts on his influence in its Bektashi chief, was killed in 1947 by other Dervishes present-day Albanian operation. There are indications because, following Hoxha's policy of isolation, he want­ that London is speculating on the possibility of induc­ ed to sever the order's ties to its brothers in Asia Minor ing, by means of the current manifestations ' of Great and other countries. Albanian nationalism, the appropriate KGB networks The latest accomplishment of the order may be the in the Balkans to support the rebellion of Kosovo ideological, if not-despite the official ban-the person­ Albanians against Yugoslavia. London hopes that, al preparation of rapprochement between Albania and while this policy could be sold to the Soviet Union as a Khomeini's Iran, which fo und its preliminary culmina­ possible power gain in the Balkans, the various nation­ tion in the visit of Iranian Deputy Prime Minister Yasbi alities in the Soviet Union would fo llow the example of ' to Tirana (etymologically, "little Teheran") in Febru­ the Kosovo Albanians and push the Moscow leadership ary. to grant the right of self-determination to nationalities in the Soviet Union itself. Splitting the Soviet Union Ironic as it may sound, the Albanian party chief At the turn of the century, the British empire, Enver Hoxha, maintaining his obstinant anti-Soviet working through freemasonic networks, steered Alban­ ideology, has opposed so far the construction of this ian nationalism and that of other Balkan nations first strategic sand-castle, which would destabilize not only against the Turks and then against the Austro-Hungar­ the Balkans, but the entire international situation. ian Empire. A slight strategic miscalculation occurred "When Hoxha is gone, all the dams will break," recently in these efforts, which led to World War I. Britain's commented one expert on Albania.

EIR December 15, 1981 International 43 MiddleEast Report by Robert Dreyfuss

- The U . S . Israeli strategic accord Nevertheless, rumors abound of Sharon's aim is straightforward: to ensnare the Reagan an unpublished section of the ac­ cord involving the sharing of secret administration and wreck U. S. influence among the Arabs. satellite intelligence data and other such information. The Reagan administration is reluctant to play along with the full Israeli gameplan, as evidenced by The memoran dum of understand­ American influence among Arabs. Defense Secretary Caspar Wein­ ing on military-strategic coopera­ Specifically, the Begin govern­ berger's refusal to accept all Shar­ tion signed between Israel and the ment intends to build on its alliance on's demands around the accord. United States Nov. 30 could under­ with the United States by provok­ However, the administration has mine altogether the chances of the ing a conflict with Syria. By attack­ yet to come up with a competent Reagan administration's pursuing ing Syria, Israel will draw the Soviet and effective policy to counter the an even-handed peace initiative in Union deeper into the area-exact­ Israeli thrust. the Middle East. ly what the KGB wants-and "Israel would like to make the Although the memorandum thereby win stronger American memo seem much larger and more fa lls far short of the all-emcompass­ backing. The memorandum signed effective than it really is," said one ing war pact that Israeli Defense by Israel and the United States Washington intelligence source. Minister Ariel Sharon was gunning commits both to jointly take on "And they would like to drag us in. fo r, it constitutes Israel's first suc­ Soviet-backed threats to the region. The problem in the administration cessful effort to counter its defeat To create the pretext for such an is that there is no clear policy direc­ on the U.S. sale of AWACS radar operation, the KGB and the British tion for the region, and without planes to Saudi Arabia, and to re­ are cooperating to foment a Leba­ Dick Allen there to pull the pieces emerge as Washington's principal non-style civil war in Syria aimed at together there is an even less likely ally in the Middle East. promoting the emergence of a chance that anything coherent According to intelligence Muslim Brotherhood revolution could emerge. Therefore, it is very sources, the U.S.-Israeli accord is against the Assad regime. possible that some sort of Israeli the fi rst step in a larger operation to Israel is hardly hiding its inten­ provocation could succeed in forc­ draw the Reagan administration, tions to use the strategic accord to ing an American move in support weakened as it is by the Reagangate draw in the United States around ofIsrael. " scandals being thrown at it, into an such an operation. After meeting The Israel-American strategic ever-closer embrace with the extre­ with a sympathetic Alexander Haig accord has already had one effect. mist troika now running Israel­ Dec. I in Washington, Sharon When U.S. special envoy Philip Prime Minister Menachem Begin, emerged to tell a group of Israeli Harbib arrived in Syria Dec. I as Foreign Minister Yitzhak Shamir, reporters that there "will be" secret part of a Reagan-sponsored effort and Defense Minister Sharon-and clauses in the U.S.-Israeli memo­ to maintain the fragile ceasefire in to set the stage for a rupture in randum of understanding. Then, Lebanon, he was greeted with a U.S.-Arab relations. turning to some American report­ barrage of charges that Washing­ The Begin government is ers, Sharon added (in English) that ton had eliminated itself as a serious known to be covertly cooperating there "might be" secret clauses. and impartial mediator of the Le­ with the Soviet KGB and the Brit­ Sharon's extremely provocative banon crisis as a result of the accord ish Secret Intelligence Service (SIS), . statements led to the immediate is­ with the Israelis. The Soviet press as I have str�ssed. All three favor suance of an official Defense De­ agency TASS called the agreement the growth of Muslim Brotherhood partment statement that it is "total­ a "new aggressive military-strateg­ fu ndamentalism in the interest of ly erroneous" that there is anything ic alliance" against the Arab world, building up Israel's image as the at all to the memo of understanding and the PLO charged that it repre­ only stable fr iend of the United beyond the publicly announced sented a "declaration of '(merican­ States in the region while wrecking terms ofthe agreement. Israeli war against the Arabs."

44 International EIR December 15, 1981 DatelineMexico by Josefina Menendez

Pol Pot-style experiment in Oaxaca the solidarity of all the anti-imperi­ Ey ewitness accounts tell of a reign of terror that is taking place alist organizations of Me xico is necessary," he proclaimed in the in Juchitan. pages of the pro-terrorist Por Esto! magazine on Oct. 29. The reader is doubtless asking how it is possible that neither the state nor fe deral government has Some of my readers will recall our under which COCEI threatens to taken any action against this en­ report last spring on the surprise make indiscriminate expropria­ clave. victory of the Mexican Communist tions from supposedly "rich" farm­ EIR is in possession of docu­ Party-allied te rrorist grouping, ers and store-owners. ment showing that a faction inside COCEI, in the Juchitan, Oaxaca, Schools are practically para­ the ruling PRI party in the region, municipal elections. We pointed lyzed; the technical school which exploiting latitude opened by Mex­ out then the danger of giving politi­ played a major role is almost ico's political reform program, ac­ cal power to the ultra-left. What has closed. The high school slated fo r tually arranged the electoral irregu­ gone on there not only confirms the construction will now be located larities and related operations validity of our warning, but obliges elsewhere, since the COCEI rejects which helped defeat their own par­ us to predict that the experiment "bourgeois education." Anything ty. I am not sure whether the then­ being carried out in Juchitan is a smelling of growth, development, President of the PRI, Gustavo Car­ wedge for the genocidal policies of or production orientations is reject­ vajal, who lost his job partly as a Cambodia's Pol Pot regime. ed by the municipal president. result of the PRI defeat in Juchitan, Recent visitors and other relia­ Prostitution and drug traffick­ knew whatwas being pulled off. ble sources state that Juchitan has ing enjoy such freed()m that they When the COCEI lost elections suffered a radical change since the are carried out even inside the town the first time lastMa rch, the Elec­ alleged electoral victory of the hall, my direct informants tell me. It toral Action arm of the local PRI group, called the Worker, Peasant, is not hard to believe rumors that apparatus granted the COCEI, for­ and Student Coordinating Group arms smuggling goes hand in hand mally affiliated with the Commu­ of the Isthmus (COCEI). with the drug traffic. nist Party, a shot in new electio�. Juchitan is located on the bor­ The chiefof COCEI created his In the second elections, the PRI der of the strategic state of Chiapas, own "people's militia," separate inexplicably printed ballots with at the crossroads of major high­ from the usual state police, and re­ the same colors as the COCEI par­ ways-the Panamerican running cruited from his own base of thugs. ty, and did not send enough PRI southeast to Guatemala and the The direct terrorist side of the ballots for the voting. Voter regis­ Trans-Isthmus highway running operation has moved ahead apace. tration cards were well in excess of across the Isthmus of Tehuantepec Busloads of deployable zombies the number of qualifiedvote rs. to the oil-refining center ofCoatza­ from the COCEI group have been Most important, throughout coalcos.'The COCEI and its munic­ repeatedly sent up to Mexico City the entire per iod, the local PRI ipal ·president have set up such a by their controllers to serve as can­ failed to carry out any political edu­ reign of terror that the place is non fodder in violent takeovers of cation and mobilization drives of its known as "the town without law." fo reign embassies. own-particularly significant in a ' People flee to the neighboring In the latest development, the town which has a long history of towns simply because they fear for municipal president, one LeoPdldo political fractiousness, going back their survival under COCEI poli­ de Gyves, is openly threatening to the period of Benito Juarez. cies. The small merchants who re­ sabotage of the new Trans-Isthmus It looks like cleaning up the main do so under threat that they container "land bridge" set to go COCEI also involves cleaning up will lose businesses built up over into operation early 1982. those who protect it in the PRI and years if they try to flee the "new "In the face of this industrial in contaminated government lay­ distribution of wealth," the slogan project and imperialist penetration, ers, up to the national level.

EIR December 15, 1981 International 45 International Intelligence

circles from the right-wing of the ruling The Andean Labor Party has already Say Kissinger, Haig Liberal Democratic Party, and "influen­ launched a campaign to expose the way behind Allen scandal tial people" in Washington, including in which the Malthusian backers of the circles at the Stanford Research Institute, Global 2000 report in the United States the Hudson Institute, and others associ­ and their Colombian allies have depopu­ A source close to the White House has ated with Kissinger. lated the nation over a 15-year period told EIR that he is convinced that Alex­ Takase was reportedly heavily in­ through application of the zero-growth ander Haig and Henry Kissinger, the key volved in promoting the "Lockheed programs designed by the World Bank. operators in the Watergate scandal scandals" in Japan that Kissinger used to "The basic problem in thinking about against ex-President Nixon, are behind topple the government ofTakeo Tanaka. our energy future," Londono empha­ recent scandal-mongering against Presi­ sized, "is that the World Bank and relat­ dent Reagan's National Security Adviser ed agencies have imposed their 'small is Richard Allen. Although the Justice De­ beautiful' outlook on virtually every partment has announced it will not ap­ planning and development agency in the point a special prosecutor in the instance Colombian candidates nation. Thus, the Institute for Nuclear of Allen's receipt of $I,OOO from a Japa­ Affairs is the most anti-nuclear agency in nese journalist, the case is far from over. anti-drug, pro-nuclear the country ....Young scientists trained The Japanese networks which have abroad who return to Colombia with a been fi ngering Allen on various matters Andean Labor Party (PLAN) Secretary­ pro-industry perspective are immediately are associated with Henry Kissinger. It is General Maximiliano Londono, and forced to submit to the degraded World noted that while press and other media anti-drug leader Fausto Charris Romero Bank view . are attacking Allen, they are simultane­ have announced their candidacies for "Our population has been brain­ ously promoting Kissinger and his asso­ seats in the Bogota, Colombia municipal washed into believing that a developing ciates as men who could give the admin­ council and in the Colombian Congress country like ours can't have advanced istration a strong foreign policy. It is in the March 1982 elections. technology," Londono told the Bogota noted that Miles Costick, head of the In their dual campaigns for the city press. "We will expose this for the lie that Institute for Strategic Trade, which was and federal offices-a common practice it is .... Our people must understand created by Fritz Kraemer, a Defense De­ in Colombian politics-Londono and that unless we have nuclear energy and partment official who boasts of having Charris will stress three key planks: anti­ free ourselves from the dictates of the "created Henry Kissinger," told a re­ drug measures, the reversal of Global World Bank, ours will never be a sover­ porter that he has been actively organiz­ 2000 depopUlation, and nuclear energy eign nation." ing against Richard Allen among admin­ development. istration officials. The PLAN is demanding that the Exempliuy of the press role is the Colombian government immediately in­ Dec. I Christian Science Monitor, whose troduce a drug eradication program editorial suggested that Reagan needs based on the use of the herbicide para­ Pakistan bans EIR "an efficient, knowledgeable administra­ quat. In numerous radio and television tor of the caliber of Brent Scowcroft," interviews, PLAN activist Charris, inter­ drug expose Henry Kissinger's fo rmer aide, who will nationally known as the President of the be a fe atured speaker at next week's Colombian Anti-Drug Coalition, has The Pakistani military dictatorship American Enterprise Institute "Policy warned that the spraying program must moved this week to seize copies of a Week." be carried out before the April 1982 pres­ Peoples Party newsletter which has been Investigation of the "Japanese con­ idential elections, given the likelihood widely circulating underground in the nection" reveals individuals closely tied that the next President will favor legaliz­ country . The newsletter, which was offi­ to Kissinger circles in the United States. ing the drug trade. cially banned by the provincial govern­ Richard Allen was asked to set up the The PLAN platform also calls on the ments of Baluchistan, the Northwest now notorious Nancy Reagan interview Reagan administration to guarantee re­ Frontier, and the Punjab, contained a by Tamotsu Takase, whom Allen met at peal of the Percy Amendment, which highly charged expose of the involve­ the Hoover Institution in the 1960s, and currently prohibits use of foreign aid for ment of senior army officials, including who had various business dealings with paraquat drug eradication programs. It both Gen. Ziaul Haq, the head of the Allen's Potomac Associates consulting requests U.S. technical and financial as­ Pakistani junta, and the military gover­ firm. Takase is a supporter of Henry sistance for Colombia to permit eradica­ nor of the Northwest Frontier Province, Kissinger's Asian policy, including a de­ tion of marijuana crops and the creation in running drugs out of Pakistan. fense buildup by Japan. He is known as of gainful employment for farmers and The banned Pakistan Peoples Party an operator who made himself the con­ peasants now engaged in marijuana cul­ newsletter is published in the United tact man between influential Japanese tivation. States by the U.S. branch of the Pakistan

46 International EIR December 15, 1981 Briefly

Peoples Party (PPP), the party fo unded of Nov. 13, some Japanese explain that SWEDISH by murdered Pakistani Premier Z. A. the European-U .S. imbalance, unlike Ja­ • authorities have Bhutto. In its September issue the news­ pan's, is viewed by the Europeans and charged leading activists in the letter carried an expose of the drug-run­ Americans as "a white man's deficit." newly formed Swedish Environ­ ning activities of the junta, tied into ille­ mentalist Party (Miljoeparteit) gal arms deals as well. The official an­ with the smuggling and sale of nouncement of the Pakistani regime millions of kroner worth of am­ claimed the newsletter contained "mali­ phetamines and cocaine. Rustan cious material aimed at fomenting disaf­ Kissinger network moves Saend and Eva Sydhoff, with 40 fection towards the present accomplices, were arrested and in­ government. " in on Mideast policy dicted Aug. 27 in what was then The drug expose in the newsletter was publicized as one of the largest A group of individuals tied into the net­ based in part on information published drug busts ever to occur in Swe­ works around fo rmer Secretary of State in the Oct. 6 EIR . According to Pakistani den. It was not until late Novem­ Henry Kissinger have put out a Middle sources, hundreds and thousands ofpho­ ber that Swedish press reports re­ East policy report recommending that tocopies of the EIR story have been cir­ vealed that Saend and Sydhoff the Reagan administration broaden and culating both inside Pakistan and were prominent members of the intensify its role as an impartial peace­ throughout Pakistani exile communities Environmentalist Party. maker. from the Persian Gulf to London and the The report, based on a trip to Saudi United States. Figures named in the ar­ • THE WORLD CENTER for Arabia, Syria, Jordan, Egypt, and Israel, ticle, such as drug-money banker Agha the Development of Social Uses of was authored by former Assistant Secre­ Hasan Abedi, a top financier of the Zia Microcomputer Technology was tary of State Harold Saunders, now of regime who heads the London- and Du­ officially established in Paris on the A erican Enterprise Institute; Philip bai-based Bank for Credit and Com­ Vl Nov. 27 at the instigation of Presi­ Klutznick, president emeritus of the merce International, are reported to be dent Mitterrand. Run by the Club World Jewish Congress and honorary greatly exercised about the impact ofthis of Rome-linked Jean-Jacques Ser­ president of B'nai B'rith International; expose on their activities. van-Schreiber, the center will draw Merle Thorpe, Jr., a Washington-based specialists from around the world lawyer and Director of the Foundation on such subjects as artificial intel­ for Middle East Peace; and Joseph ligence, on behalf of promoting Greene, an ex-Foreign Service officer "the wired society." A 'white man 's who heads up the Seven Springs Center in Mt. Kisco, New York. Saunders's AEI trade deficit ?' • THE LONDON TIMES on will feature Henry Kissinger as its main Dec. I published the account num­ attraction at a week-long conference Is a subliminal resurrection of "Yellow ber and address through which tarting Dec. 7 . peril" racism behind the strange emo­ � readers may contribute to fr ont tional intensity that seems to pervade The report by Saunders et al. calls for groups for the Muslim Brother­ trade . disagreements with Japan? Palestine Liberation Organization in­ hood organization in Syria that On e Japanese businessman com­ volvement in the peace process and rec­ was responsible for the bombing mented t() EIR , "Whenever there is a ommends that the United States not rule in Damascus that killed 150 people trade dispute between a European and out the possible establishment of a Pal­ on Nov. 29. American company, the injured party estinian state on the West Bank as part of attacks the company they think is at a settlement that includes Arab recogni­ • COSMO 82, a Japanese science fault. But when a Japanese company is tion of Israel. magazine with a circulation of involved, they blame the whole nation of The report is part of a larger effort to 100,000, fe atures in its Dec. 5 issue Japan." place Kissinger and his circle in the cen­ a translation of "The World Needs Japanese officials also express dismay ter of Middle East policy-making. It is in T en Billion People: A Scientific at the degree of heat directed at Japan by this spirit that columnist Joseph Kraft Refutation of Global 2000," by both Europeans and Americans over an has suggested the appointment of Sol EIR Military Editor Steven Bard­ expected $15 billion trade surplus Japan Linowitz as special Middle East negotia­ well. Portions of the article by Dr. New is anticipated to have with each this year. tor. Similarly, William Safire of the Bardwell, who is Editor-in-Chief York Times They note that Europe's deficit with recommends, "Now we need of Fusion magazine, appeared in America, which is twice as large as that a high-powered American at the auton­ the June 9, 1981 issue of EIR . with Japan, has not generated anything omy talks, leading to Camp David II and like the same emotional outbursts. Ac­ a new concentration on Egypt as our cording to Far Eastern Economic Review central Arab ally."

EIR December 15, 1981 International 47 �ITillNationa1

Williamspos tponement: victory against Abscam

by Warren Hamerman andAnita Gallagher

The Senate officially announced Dec. I that expulsion trial before the Senate itself, with the complete right to proceedings against Abscam frame-up victim Sen. Har­ cross-examine Civiletti, current FBI Director William rison Williams (D-N.J.) would be indefinitely postponed Webster, and 23 other witnesses, including the fe deral from Dec. 3. The Senate leadership's decision came after prosecutor in his case, Thomas Puccio, and other senior Williams established with increasing success that Justice Justice Department officials . Senate leaders of both Department misconduct and perjury pervaded the DOl's parties, spearheaded by Minority Leader Robert C. investigation and prosecution of him, and Sen. Daniel Byrd (D-W. Va.), rejected outright the demand. On Inouye (D-Hawaii) urged that the Senate abjure a "rush Nov. 23, Senator Williams took the unprecedented to judgment." action of going to federal court in Washington against The decision of the Senate leadership, in fact, is the that decision, demanding that the court enforce his outcome of one of the most stunning political counter­ request for a full trial before his peers because prosecu­ attacks of the recent period. Labor and constituency tion witnesses had perjured themselves. groupings had been mobilized, with coordination from Two days later, Katharine Graham's Washington the National Democratic Policy Committee (NDPC) of Post ran a front-page box and long fe ature article EIR founder Lyndon LaRouche, into an effective nation­ attacking Senator Williams and Mr. LaRouche for al force. Their efforts delivered a tactical defeat to the fo rcing to the surface the Nazi corruption in the Carter Watergate apparatus of tainted elements in the Justice Justice Department. LaRouche and his associates in the Department associated with former Attorney General 9,OOO-mem ber NDPC-one of the largest political Benjamin Civiletti and with the FBI. It is also a major action committee memberships in American politics-with tactical setback for the Eastern Establishment press. Senator Williams could blow the lid ofTmor e than Abscam. Williams himself has publicly charged that A brief review among Jimmy Carter's and Benjamin Civiletti's primary Williams was a target of a special police-state oper­ motivations for "getting" Williams was that in 1976, ation run by the Carter Justice Department in which and again in 1980, the Senator was in the midst of DOJ operatives, including convicted fe lons, attempted national efforts to prevent Carter from winning the to bribe political officials. Although he refused every Democratic Party's presidential nomination. bribe, Williams was convicted last spring at the urging The Washington Post article obliquely expressed the of Judge George Pratt, who withheld critical evidence reason for Katharine Graham's hysteria. Graham, the from the jury. publisher of the Post, is one of the longest-standing On Nov. 17, Senator Williams requested of his political opponents of LaRouche on international and Senate peers the right to conduct an extraordinary full domestic policy issues, centering around the questions

48 National EIR December 15, 1981 of depopulation and de-industrialization. The Nov. 25 not whether Williams committed a crime, but whether Post article states: "Senator Williams, who said the he is guilty of "ethically repugnant" behavior-i.e., NDPC represents his most active grass-roots support, whether the news media had succeeded in making him described LaRouche and his supporters as 'very "look bad," no matter what the facts. thoughtful people' and said their research into the constitutional questions raised by the Abscam case have been 'very accurate.' ...In literature discussing what he Williams meets the press describes as the 'frameup' of Williams, LaRouche ... In a Dec. I press conference following the announce­ describes Abscam as a 'treasonous' action designed to ment of the postponement of the expulsion vote until at break the willof Congress, then goes on to doubt the least Jan. 25, 1982, when the Senate reconvenes, Wil­ 'moral capacity' of Congressmen to stand up to it. liams said that "The Senate action this morning will 'There are members of Congress on both sides of the now give me the opportunity I need to fully develop all aisle so degenerate or so swayed by political opportun­ the evidence and present a winning defense against ism that they variously promote or condone policies charges of unethical conduct. ... This is the first time more hideous than those perpetrated by Albert Speer in history that the executive branch has moved in and and others under Adolf Hitler,' he writes ... . " tried to set up someone, has tried to manufacture and In over 30 states, LaRouche's political forces have create what they hoped would be criminal conduct." secured signatures from prominent officials on the Under questioning, Williams criticized the Senate fo llowing urgent telegram to members of the U.S. Ethics Committee, saying that it had made "a mistake Senate: in Testricting its investigation .... I question whether the Ethics Committee was getting a comprehensive We the undersigned, condemn the entrapment and picture .... The Ethics Committee has continued to harassment methods of Abscam. If a constitution­ deny me the minutes of executive meetings." al democracy is to continue to function in this One of the difficulties involved in the Ethics Com­ country, these sorts of operations must be rooted mittee revealing its deliberations is that the committee's out. In that light, we call on the U.S. Senate to chief investigator, Donald Sanders, has fu nctioned conduct a real investigation of this sordid affair throughout as virtually part of Abscam Prosecutor Tom and to put off any railroad vote on Sen. Harrison Puccio's team. Williams until such an investigation is concluded. To repeated questions of whether he would resign in January if he did not have 34 votes needed to defeat Signers include numerous Democratic Party county expulsion, Williams said, "I intend to fight all the way. chairmen, heads of labor unions, and leaders of state It is not for myself, but for the principles." He added and regional central labor councils. that if he were able to raise what he called "the right kind of fight," he would not lose his seat. Questioned as 'Rush to judgment' delayed to whether the Senate was victimizing him to make the The postponement occurred when Senator Inouye Ethics Committee look clean, Williams said, "I think asked the Senate . leadership for time to prepare Wil­ the Senate is being victimized by the FBI and Justice liams's defense. Inouye said that if he were to do only Department, and I am the center of that. This kind of that, it would take more than a month. The request by conduct is wrong in this country. It is loaded with the the widely respected Senator was the culmination of a opportunity for the worst kind of intimidation and fear­ process of counterattacks against the prosecution which mongering of the legislative branch. mark a turning point in the entire Abscam war on Two of the questions directed to Williams concerned constituency-based politics. Inouye made the point to the role of the NDPC in his defense. Williams replied, the Senate leadership that "We would look like a bunch "Anyone who fe els as I do that basic constitutional of self-righteous people trying to preserve our image in provisions have been massively violated in this matter a rush to judgment," if the Senate voted to expel and feels that they must speak out, then I am glad that Williams and then his conviction was overturned . Wil­ they are fighting this fight." The press conference was liam's motions charging violation of due process are blacked out in the major Eastern press; but on Dec. 2-4, still pending before Judge Pratt. the Baltimore Sun, New York Times, and Washington Inouye also impressed upon the Senate leadership Post each carried editorials attacking Williams. that all 15 expulsions in the history of the Senate had Late in November, Williams's office announced that been for treason, and all occurred after the appellate the Senator had assembled substantial new evidence of process was complete. Justice Department misconduct and perjury on the part That reading of history contradicts the construction of witnesses, including FBI agents. The postponement that the Ethics Committee and other Senators are of the Senate vote will enable Williams to make use of attempting to put on the Williams case: that the issue is that evidence.

EIR December 15, 1981 National 49 New budgetary traps set for the White House: is Chief of Staff James BakerIII a mole? by Richard Cohen, Wa shington Bureau Chief

While national attention has been riveted on the daily that the OMB chief was the most capable domestic­ escalating scandals surrounding the case of now sus­ policy official in the administration, and that Stockman pended National Security Adviser Richard Allen and the would be crucial in the final weeks for the 1983 budget. emerging press-generated smell of illegality directed at Importantly Stockman was revived even though one some of the President's most trusted advisers, close ob­ of Reagan's advisers, Michael Deaver, Went so far as to servers of the White House are warning that President question Stockman's loyalty, in a clear reference to Reagan has been under extreme pressure over the past Stockman's open adoption of the "deep-cuts" approach two weeks to make fa tal blunders on economic policy. which has been promoted since Day One of the Reagan The public signals point to an all-out effort to fo rce the administration by fo rmer Ford Treasury Secretary Alan President to capitulate to the dictates of Federal Reserve Greenspan, by the current U.S. Ambassador to West Board Chairman Paul Volcker, by endorsing a 1983 Germany Arthur Burns, and by Volcker. In fact, Green­ economic program which is, reported to include the most span, the chief negotiator during the 1980 Republican massive assault yet on the already whittled-down U.S. Convention fo r the attempts by the unsavory Max federal government domestic budget, plus a frontal at­ Fisher and fo rmer Secretary of State Henry Kissinger tack on critical entitlement programs including the So­ to seize control of key Reagan cabinet appointments, cial Security system. has repeatedly organized open rebellions on Wall Street White House observers note that presidential Chief against the early budgetary and tax-cut political victo­ of Staff and fo rmer George Bush campaign manager ries by the Reagan administration on Capitol Hill. James Baker III has played a role that could most The Greenspan-inspired downturns in the "mar­ charitably be described as "puzzling," in locking the kets," in conjunction with Volcker directed up-ticks in President into a politically suicidal economic approach interest rates, represented the muscle behind Green­ that happens to be diametrically opposed to Reagan's span's demands for a fiscal-austerity policy which would pro-growth inclinations. The result of such a policy, by eliminate the tax cut while slashing into the remai�s of the time of the January State of the Union message, the domestic budget, entitlements, and defense. would be to ensure that current and planned Watergate­ On Nov. 27, aftera weekend in which Stockman was style attacks on Reagan's loyal fo llowers in his adminis­ rehabilitated on Capitol Hill, presidential press spokes­ tration-possibly including the President himself-find man Larry Speakes put out the line that th e President a ready market in an outraged population. These observ­ accepts most elements of the Greenspan "deep-cuts" ers believe that the heightened campaign to fo rce presi­ policy. Speakes reported that President Reagan would dential acceptance of this disastrous "deep-cuts" policy spend most o f his time in mid-December hearing "final coincided with the resuscitation of Office of Manage­ appeals" from cabinet secretaries on OMB-outlined cuts ment and Budget Director David Stockman. in departmental budgets. He then warned that the President expected a huge number of appeals from The saving of Stockman's skin cabinet officials because the cuts would be "very deep." Of increasing interest is the fact that Stockman's The staggering scope of the OMB-proposed cuts "skin was saved" fo llowing his open attack on Reagan's was signaled early last week when Ed Kintner, the tax cut in the pages of the Atlantic Monthly at a Nov. Department of Energy's Associate Director for the 17 White House meeting at which Reagan loyalists Office of Fusion Research, quit on the basis of still­ Presidential Counselor Edwin Meese, Assistant to the unrevealed cuts in the 1983 fusion budget. On Nov. 27, President Michael Deaver and Presidential political Ann Gorsuch, the chairman of the Environmental Pro­ adviser Lyn Nofziger pressed for Stockman's fi ri ng. tection Agency, and a close associate of Interior Secre­ Only James Baker III defended Stockman, asserting tary James Watt, complained loudly to the press about

50 National EIR December IS, 1981 an OMB-proposed 36 percent cut in the EPA budget. been cut from federal social programs under the fiscal On the same day Commerce Secretary Malcolm Bald­ 1982 budget. Following the Dec. 2 HUD budget-cut ridge howled over the fact that Stockman proposed revelation, Senate Banking Committee Chairman Jake cutting three entire divisions of his department; these Garn (R-Utah) called some of the Stockman proposals included the Office of Export Development, the primary "j ust plain crazy." Sources on Capitol Hill report that channel for U.S. aircraft and nuclear exports which even austerity advocate Pete Domenici (R-N.M.), the rank second and third respectively next to U.S. fo od Senate Budget Committee Chairman, was "shaken" by exports. In addition, Baldridg6 1earned that the Bureau some of the figureshe saw in the Stockman proposal. of Industrial Economics and the Foreign Commercial Service, which employs 600 economists in U.S. embas­ Baker and the Allen affair sies and is responsible fo r virtually the entirety of U.S. The revival of David Stockman at the insistence of economic intelligence, would be eliminated. James Baker was immediately followed on Nov. 18 by The scope of the cuts was further revealed when another meeting of Reagan White House advisers. At Presidential Science Adviser George Keyworth told this meeting, Baker strongly promoted the early dis­ staff members of the Washington Post on Dec. I that he missal of Allen in the face of objections fr om Ed Meese. has recommended halting all new planetary space mis­ This has led to an emerging belief that Baker is the key sions for at least the next decade, an idea he said the "inside man" operating on behalf of Max Fisher- Kis­ White House is buying. singer elements. Recent information suggests that Kis­ By the morning of Dec. 2, the next cabinet Secretary singer was behind critical information leaked to the to holler was Samuel Pierce, Secretary of Housing and Washington Post and the New York Times implicating Urban Development. Stockman has recommended that Allen in unethical relationships with fo rmer clients of federally subsidized housing fo r an annual increment of Potomac International. This information, according to 150,000 people under Section 8 and other programs be sources close to the White House, "will clinch Allen's phased out and eliminated altogether by FY 84. In final dismissal." Reports are that either Gerry Ford's addition, OMB wants to cut a total of $3.6 billion in National Security Adviser Brent Scowcroft, a Kissinger community and urban-development grants. protege, or Kissinger surrogate David Abshire of While sources on Capitol Hill report that these cuts Georgetown University , is slated to replace Allen . represent samples for what is to come, Treasury Secre­ Interestingly, Deaver had backed Baker's early in­ tary Donald Regan, appearing on national television sistence on Allen's dismissal. On Nov. 30, the day Nov. 29, predicted that if there is a recovery in mid- following Allen's suspension, nationally syndicated col­ 1982 (an absurd assumption) and all the drastic cuts umnists Evans and Novak (who have close relationships were accepted by Congress, there would still be a $60 to with the administration) reported that subsequent inves­ $70 billion deficit for fiscal '83. Thus, he warned, "We tigations of Allen's relationship to fo rmer Deaver busi­ are going to have to get into entitlements sooner or ness partner Peter Hannaford will turn up an unethical later." Regan's prediction was immediately turned into relationship between Deaver and Hannaford similar to an ugly operational effort. At the White House Confer­ the one alleged between Allen and Hannaford. ence on Aging held here in Washington on Nov. 30- If Deaver should fo llow in the path of Allen, Reagan Dec. 3, the administration stacked the key "Economic would be left with only one trusted adviser, Meese. Well-Being Committee" in order to pass a resolution Nofziger has already handed in his resignation, effective opposing support for Social Security from general in January. revenue funds, and supporting Social Security benefit Nofziger has blamed James Baker for an excess of cuts for workers now paying into the system. While "Bush appointments." My sources further report that ultimately rejected, the proposal clearly identified ad­ Nofziger, a strong believer in candidate and party ministration intentions. The most sinister aspect of the loyalty, also opposed an "olive-branch" approach to affair is revealed by the fact that President Reagan the AFL-CIO leadership, once it was clear that AFL­ himself has been pressured to make several recent public CIO President Lane Kirkland had broken with the appearances in order to get the "deep-cuts" campaign tradition of George Meany and openly attacked the off the ground, even though he had previously canceled President. Nofziger was opposed by Baker. several appearances due to the escalation of assassina­ Baker has now convinced the President to delegate tion threats against him. himself, along with Stockman and Dick Darman, Bak­ The "deep-cuts" campaign has already put the Pres­ er's close assistant and a former aide to GOP Fabian ident at odds with some of his closest supporters on Elliot Richardson, to work out budget problems on Capitol Hill. In remarks to reporters after speaking to Capitol Hill with respect to the Dec. 15 deadline for FY the annual meeting of the National League of Cities in '82. He and Stockman will also join Meese in dealing Detroit on Nov. 30, Reagan confidant Sen. Paul Laxalt with departmental objections to Stockman's FY '83 of Nevada warned that too much money had already budget.

EIR December IS, 1981 National 51 The anti-nuclear coup against the Reagan administration

by Paul Gallagher

In a series of clear and public moves coming in rapid With the resignation of Mr. Kintner, an engineer succession over a two-week period of time, a Malthusian from Adm iral Rickover's nuclear navy, the Heritage network among officials of the Department of Energy, Foundation campaign has nearly succeeded. Kintner's Nuclear Regulatory Commission, and the White House, Deputy Director, Dr. John Clarke, one of the few re­ has cut the heads off both the fusion and fissionenergy maining strong supporters of the 1980 Fusion Energy programs of the United States. The provoked resignation Act within the DOE, was passed over, and the acting of Edwin Kintner, head of the DOE Fusion Office and head of the DOE Office of Fusion Energy became Dr. acknowledged leader of the nation's past five years' James Kane, a high-energy physicist who admittedly progress in fusion development, and the shocking public knows very little about fusion energy ! collapse into N aderism of Nuclear Regulatory Commis­ While a new permanent director will be announced, sion Chairman Nunzio Palladino leaves the NRC, the this is not likely to occur before the fiscal- 1983 budget White House Science Advisor's Office, and the DOE battles begin in January . For that budget process, the bureaucracy lined up with David Stockman's OMB OMB has already leaked its intention to reduce the against the President's own commitment to nuclear en­ magnetic fusion program back to pre- 1980 budget levels ergy. in absolute dollars. Both OMB and energy advisers in the In its zeal to close down the Department of Energy, a office of White House Science Advisor Dr. George Key­ creation of RAND Corporation's fanatic Malthusian worth, state their intention to dismantle a number of James Schlesinger, the Reagan White House has been large engineering-design projects in the fu sion program, sucked directly into a scenario repeatedly scripted in and send the program "back to the basic research stage" British scientificjo urnals and by Carter administration with commercialization see!) after the middle of the next officials like Dr. Frank Press since mid-summer. These century-in effect, never. "science authorities," represented directly among ad­ Policy for the program is now apparently being set ministration figures by the Heritage Foundation think by Keyworth, a fusion theoretician fr om Los Alamos tank, have begun to use the chaos of the fo rced ser;ond National Laboratory, a devotee of Sir Isaac Newton and round of budget cuts and the DOE phase-out to inaugu­ Sir John Clerk Maxwell, and a strong opponent of the rate a sustained period of "re-assessment of basic science 1980 Fusion Engineering Act, and the 0 M B. directions and priorities." Their increasingly obvious In fact, Keyworth's energy group is advised on fu sion intent has been stated more and more boldly: to eliminate policy by Dr. Douglas Pewitt, a Carter administration American advanced engineering capabilities, particu­ figure hounded out of his fo rmer DOE responsibilities larly those directly related to large-scale energy technol­ by congressional backers of the Fusion Engineering Act, ogy development, while preserving increasingly classi­ who charged angrily that Pewitt was openly attacking fied, and increasingly stagnant, "basic science" pro­ the mandate of the legislation to begin a large-scale grams in the midst of general economic depression. fusion engineering program. Future EIR reports will expose in detail the ongoing Both Keyworth and Pewitt are fo llowing to the letter efforts by Club of Rome/Global 2000 networks in scien­ the Heritage Foundation's original report on energy tific research fields to use fu nding cutbacks to shift policy given to the Reagan administration a year ago. American science toward Malthusian directions. Of most Pewitt calls the Fusion Engineering Act "permissive immediate importance for America's future is the year­ legislation," and recommends that it be scrapped as an long campaign of the Heritage Foundation to nullify the excresence of "big government." The same British Fabi­ Magnetic Fusion Energy Engineeri ng Act of 1980, the an Society-run Heritage Foundation wrote "95 percent," crucial 20-year en abling legislation for the one area of in their phrase, of Keyworth's official administration science and engineering in which the United States indis­ policy statement on nuclear energy. Its effects so far have putably has led the Soviet Union and all other national assisted the Federal Reserve in collapsing the nuclear and multinational effo rts over the past five years. industry financially,and have cut it off from exports and

52 National EIR December 15, 1981 government reprocessing, despite the pro-nuclear and anti-regulatory rhetoric involved. It is no accident that the commitment to fusion engineering development and commercialization of the 1980 act, known before its passage as the McCormack Bill, has been the prime target of attack in the field o� energy policy by the free-trade fo llowers of Milton Fried­ man and British monetarism in and around the Reagan administration-despite their lip-service to nuclear en­ ergy "in general." Much of the so-called nuclear lobby in the United States consists of individuals who have worked in the industry but oppose the method of large­ scale government intervention into the economy which brought it into being. Today they oppose the same effort for fusion. As the rare nuclear veterans like Kintner know, the future of all progress in nuclear energy today hangs on the commitment to go as rapidly as possible to fission-fusion hybrid forms of nuclear fuel breeding for conventional reactors, and to full commercialization of fusion power. In the way the early American infrastructure-building projects created the Army Corps of civil and construction engineers, the Atomic Energy Act and nuclear navy program created nuclear engineers, and the NASA pro­ gram created aeronautical engineers on a broad scale, so the McCormack Fusion Energy Engineering Act was to have begun the creation of the first large cadres of

government and industry specialists in fu sion-reactor Laser fu sion research: the Shiva-Nova system. design, materials development for high-energy plasmas, and fu sion-power engineering. As Charles B. Stevens demonstrates in his latest annual review of fusion re­ strated as a viable route to fusion."

search and development, written for the February 1980 • "The Tandem Mirror design for magnetic confine­ issue of Fusion magazine, the U.S. fusion program is ment of the hot plasma gas, merely a theoretical concept more than ripe for such engineering development. in 1975, now has gone through demonstration phases Stevens, an engineer with the Fusion Energy Foun­ and a large-scale Tandem Mirror Fusion Test Facility is dation who has since 1975 become the world's most being constructed at Lawrence Livermore Laboratory in widely read journalist on the progress of fusion develop­ California, expected to equal or surpass the Princeton ment, makes the followil.lgbasi c points in his review: Tokamak Fusion Test Reactor by 1985. Furthermore, • "Despite budget and program curtailments, steady Lawrence Livermore has designed a Fu�ion En gineering progress in all aspects of the mainline magnetic fusion Device based on the tandem mirror, which could be built tokamak effort has been maintained, in basic physics and for one-third the cost proj ected fo r a tokamak engineer­ engineering technology, and simultaneously major ing device, and within only fo ur years. The building of breakthroughs have been achieved in alternative (non­ fusion engineering devices is the core of the next "engi­ Tokamak) magnetic approaches. These latter break­ neering phase" of the fusion effort mandated in the throughs enhance the rate at which the tokamak itself is McCormack bill. However, the OMB and Keyworth task developed by providing scientific and technological force do not even envision building the mirror test facility shortcuts to thedevelopment of reliable power reactors." already started."

• "Alternative approaches are now making even more • "The tokomak has demonstrated the first steps to­ rapid progress than the tokamak. The ZT -40, a Los ward self-organized confinement, the ideal situation in Alamos reversed field pinch, or "zeta-pinch" toroidal magnetic confinement of a hot plasma gas, where cur­ experiment, has achieved several startling breakthroughs rents in the gas itself-not external generators-create during 1981; and with this ZT-40 success, virtually every the complex toroidal magnetic geometry needed to con­ approach to magnetic fu sion developed in the 1950s­ fine the plasma. The ZT -40 device has taken this a step the tokamak, the stellarato r, the "mirror" confi nement fu rther, having almost the entire confining magnetic design, and the toroidal zeta-pinch-have been demon- fieldgenerat ed internally to the plasma."

EIR December 15, 1981 National 53 • "Non-implementation of the funding levels and en­ gineering efforts of the 1980 Fusion Engineering Act will Energy Insider cause the rapidly advancing program to "go over the cliff." The Princeton Test Facility will come on line in 1982 and almost certainly demonstrate that the mainline tokamak approach can be developed into a breakeven reactor; but none of the other steps needed to realize this is currently being pursued. The Mirror Fusion Test Facility disappears entirely in the OMB's fi scal- 1983 proposal. Britain has unilaterally abandoned the joint U.S .-British fo llow-up to the ZT-40 experiment, and the only other toroidal confinement system being designed has been cut out ofOMB's 1983 budget." Financial warfare If Reagan administration policy is being turned, at the orders of the British science establishment and the against the utilities Heritage Foundation, away from government-spon­ sored fusion engineering development, and from govern­ by William Engdahl ment-led export of nuclear energy to waiting nations, then the domestic nuclear industry cannot remain a "private enterprise pet project" of an administration The nation's electric power utilities are undergoing the contemplating the British-dominated "free market." most severe crisis since at least the period of the 1930s - In fact, the past weeks' sudden turn of the NRC Great Depression. against the nuclear industry was engineered by part of This worsening situation is the result of more than 12 ' precisely the same Malthusian network-most particu­ years ofsystematic local and national environmental and larly, by NRC Commissioner Victor Gilinsky. On Nov. other "constituency" obstructionism, combined with al­ 30, when NRC Chairman Palladino, a Reagan appointee most two years of unprecedented interest rates which and a nuclear design engineer, suddenly attacked the have all but killed the long term bond market as a viable system of international safeguards on nuclear exports in capital source for fi nancing construction of new capacity. a letter to Congress, virtually implying the United States Perhaps most alarming is the widespread conviction should stop all nuclear exports, Palladino was repeating among industry and Wall Street analysts that the Reagan the conclusions of a report prepared on Galinsky's spec­ administration's widely-touted Tax Act of 1981 will ifications. make little or no contribution to ameliorating this crisis Gilinsky is a member of the London International over the next several years, and could have a slightly Institute for Strategic Studies, and was Schlesinger's negative overall impact. protege at the RAND Corporation. Speaking to the Current industry utility construction commitments Atomic Industrial Forum in San Francisco Dec. 1, Pal­ over the decade to the end of 1990 today total some ladino attacked the quality control standards of the 190,000 megawatts. To put this in perspective, this is an domestic nuclear industry. Recently, Galinsky had stated increment equivalent to some one third of total U.S. that 20 plants nearing licensing in the United States electric installed generating capacity at the first of this would be denied licenses due to "poor quality control." year, and 45 percent of 1980s record peak load of 438,000 Only three weeks earlier, Palladino had publicly com­ megawatts. Even this construction commitment has mitted the NRC, based on a report from its staff, to shrunk dramatically, especially over the last years since expedite the licensing of 33 nuclear plants by 1983. Jimmy Carter's 1977 inauguration. In 1980 alone, var­ Within ten days, Palladino was announcing the revoca­ ious utilities postponed 60 planned generating plants tion of the license of one of those plants, Pacific Gas & totalling 59,000 megawatts for at least one year because Electric's Diablo Canyon nuclear unit 1. In between, of financial and regulatory problems. Galinsky and Peter Bradford, the other anti-nuclear This fo rward commitment for 190,000 additional NRC Commissioner, ran a high-profile series of media megawatts of capacity is a drastic and already dangerous attacks on Palladino's expedited-licensing policy. decline from the record high level of such forward com­ Meanwhile, the congressional hearings on the Rea­ mittment of 312,000 MW. That peak was planned by the gan administration's plans for "public perceptions of industry in the 1974 wake of the OPEC oil embargo and nuclear energy," scheduled fo r Dec. 1, were postponed ensuing 400 percent oil price rise. Clearly, nuclear power with no new date announced-a part of their own script generation of electricity was overwhelmingly the most which the Heritage Foundation now wants dropped rational and economical option for the future. In every altogether. respect it still is. The problem is we will not see it realized

54 National EIR December 15, 1981 at the present pace. product (GNP) of 4-5 percent through 1980s. All revenue A recent and little-publicized study by the U.S. De­ projections and investment projections are contingent on partment of Energy predicts that if the trend of delays achieving this growth. and cancellations of plants continues, the United States Historically, it is clear there is a vital "leading" will undergo electricity shortages beginning in the last relationship between growth in electricity demand and half of the 1980s, even assuming absurdly low GNP growth in GNP. From 1953 to 1973, electricity use grew growth rates in the overall economy. This DOE study is roughly twice as fa st as GNP. Even with the sustained being fo llowed with one, as yet unpublished, titled, "Fi­ industrial stagnation in the U.S. economy fo llowing the nancial Deteri oration of Electric Utilities." According to 1973 OPEC price escalation, electricity growth has led another study by the North American Electric Reliability GNP by 150 percent. This would mean that to achieve Council, over 50 percent of planned electric power capac­ real growth in GNP of 4-5 percent, we must attain ity has already been delayed on average almost two electric capacity growth over the next decade of at least years. 6-7 percent. At present trend, we are adding less than 2 Projections by the utility industry's research arm, percent annually. The situation is getting worse, not Edison Electric Institute, show that this dramatic forced better, every day that prime interest rates stand in the contraction of forward construction commitment will double digits. have devastati ng impact on the very parameters of "de­ mand" or overall growth of the economy. The very "States' rights" and the PUC problem financial requirements of even the cited inadequate Vastly complicating this dangerous situation is the growth and replacement commitments, according to the fact that historically, regulation of the vast majority of EEl's latest analysis, call fo r spending of between $455 public utility rates has been left to the states. This fact and $485 billion over this next decade. The capital ex­ has not been overlooked by the top-level strategists of penditures of the electric utility industry would accolint the cited zero growth think tanks. Traditionally, in for between 10-15 percent of all non-residential fixed times of low interest and inflation rates, utility financing investments of the total U.S. economy during the decade. and rate rises were a relatively routine function of There is a criminal fraud that has been promoted by providing for future industrial expansion in a region. Robert o. Anderson's zero growth think tank the Aspen With the onset of sustained chronic structural inflation Institute, the Club of Rome, and their ilk. The argument over the past years, a systematic targeting took place. is that reduced "demand" is our top priority. They Because many were popularly elected, this opened the applaud the rapid collapse of the utility industry at the door for many Naderite "crusaders" to get elected or same time that they funnel millions of dollars into the so­ placed on such regulatory bodies on the basis of their called consumerist movement to insure an actual eco­ stated commitment to "stop big greedy utilities" from nomic depression. They well understand the central re­ robbing the "poor little homeowner." Perhaps the most lation of energy as the generator of economic growth. aggravated example of such an operation is the Califor­ Robert Anderson wants to destroy the generator itself. nia PUC. Since 1973, it has deliberately shifted the The depth of the impending disaster becomes clearer burden of rate rises away from residential onto industry if we extend our view another decade to the year 2000. consumers. As a result, industrial rates have risen 343 To maintain a state of even zero growth in total primary percent in eight years . This has in turn forced industry energy use, which is EEl's so-called "low growth" scen­ to leave the state to seek cheaper rates. ario fo r the period until the end of the century, our One authority on the crisis of the utility industry, electric utilities would need to order more than 400,000 Mr. Perry Seiffe rt, helped organize a seminar on the megawatts of generating capacity over the next two subject recently to focus the attention of the utility decades. This is more than twice the figure of 190,000 industry, bond houses, government and large industrial MW now on order. The basic reason for the larger figure users. The most worrisome conclusion, according to is the fact that at least 100,000megawatts of capacity will Seiffert, a member of the Washington law firm of Doub need to be retired and replaced, as it will be 40 years of and Muntzing, is the fact that there is as yet so little age. In addition, 50,000 MW of present oil burning awareness of the gravity of the problem. "Nobody on capacity will have to be replaced. Not surprisingly, the Capitol Hill is on top of the seriousness of this problem Edison evaluation concludes that "without a marked yet," he emphasized in an interview with EIR. The improvement in its ability to raise capital it is questiona­ problem , Seiffe rt fe els, is further complicated by a ble whether the industry can maintain its present forward susceptibility in the present administration to cater to commitment, let alone fund any new capacity additions." forms of "states' rights" for ideological reasons, making The administration's Economic Recovery program decisive federal action to reverse the degeneration on projections for the beleagured U.S. economy are prem­ the state regulatory level highly unlikely. ised on an assumed real annual growth of gross national As a group, in recent years, state regulatory bodies

EIR December 15, 1981 National 55 have dealt with inflation and interest rates by simply denying adequate rate increases or forbidding utilities from including an offsetting of new construction work in progress for new nuclear or coal capacity (termed CWIP) into the current rate base. This CWIP figure at

2 year-end 1980 totalled almost $65 billion, /3 of it nuclear. Because of the deliberate effort to prohibit STATEMENT OF OWNERSHIP, CWIP inclusion, no cash can be earned on CWIP funds. MANAGEMENT AND CIRCULATION With delays due to environmentalist intervention drag­ (Required by 39 V.S.c. 3685) ging licensing on for up to 14 years, this has resulted in escalating capacity cancellation by utilities as a short­ Title of Publication: Executive Intelligence Review (EIR) term survival mechanism. I. IA. Publication No: ISSN 0273-6314 One estimate of the add-on cost of delaying a 2. Date of Filing: November 23, 1981 nuclear plant begun today for a 12 year period, accord­ 3. Frequency of Issue: weekly but for two weeks

ing to Baltimore Gas and Electric, an experienced 3A . No. of Issues Published Annually: 50 utility, compared with a more normal 8 year construc­ 38. Annual Subscription Price: $396.00 4. Complete Mailing Address of Known Office of Publication: tion schedule, is a cost addition of fully $1 billion. That 304 West 58th Street, New York, N.Y. 10019 is the diffe rence between a $2.7 and a $3.7 billion bill to 5. Complete Mailing Address of the Headquarters or General Business ratepayers, due solely to current interest and inflation Offices of the Publishers: 304 West 58th Street, New York, N.Y. 10019

charges! 6. Full Names and Complete Mailing Address of Publishers. Editor. Instead of allowing a construction cost return on and Managing Editor: Publisher: New Solidarity International Press Service, 304 West investment to be derived from CWIP addition to current 58th Street, New York, N.Y. 10019 rates as the new plants are being built, utilities are Editor: Robyn Quijano, 304 West 58th Street, New York, N.Y. 10019 generally forced to compensate for cost outlays fo r Managing Editor: Susan Johnson, 304 West 58th Street, New construction until the new facility generates electricity York, N. Y. 10019 by capitalizing the interest and carrying costs and 7. Owners: New Solidarity International Press Service; Steve Parsons; Marjorie Mazel; Fay Rosinsky; Marielle Kronberg; all adding this to the finalcost of the operational plant 14 of 304 West 58th Street, New York, N.Y. 10019 years fr om today. This ballooning is termed Hallowance 8. Known Bondholders. Mortgagees. and other Security Holders Own­ ing or Holding I Percent or More of Total Amount of Bonds. fo r funds used during construction" or AFUDC. Since Mortgages or Other Securities: None.

this is the only remedy generally allowed by state utility 9. Extent and Nature of Circulation: commissions, with the exponential increase of interest and inflation rates in the last several years, it is a simple Average No. Actual No. Copies Copies Each Issue of Single Issue calculation to discover the source of the astronomical During Preceding Published Nearest Months to Filing Date "cost overruns" of nuclear projects. Washington State's 12 A. Total No. WPPSS, the largest single bond borrower, is now Copies Printed 11,697 12,800 Paid Circulation estimated at a figure of $23.9 billion for 5 plant units B. I. Sales Through because of AFUDC. At 12-15 percent add-on per Dealers and Carriers, Street annum, this figure is easily reached. While a proposed Vendors and Counter Sales 2,007 2,008 rule allowing construction work in progress to be 2. Mail Subscrip­ included in the rate base is before the Federal Energy tions 6,87 1 8.101 c. Total Paid Regulatory Commission in Washington, FERC juris­ Circulation 8.878 10,109 D. Free Distribution diction covers only the 10-12 percent of utilities in by Mail. Carrier or Other Means wholesale or interstate. The rest, almost 90 percent, are Samples. state regulated. Complimentary, and Other Free The situation is severe enough to lead some to Copies 250 250 E. Total Distribution 9, 128 10,3 59 predict necessary "nationalization" bailout to preserve F. Copies Not the nation's electric power grid. Whether argued on Distributed I. Office Use. Left national · defense or other grounds, this is hardly a Over, Unaccounted, welcome prospect . But, so long as Paul A. Volcker's Spoiled After Printing policies are tolerated it will soon become academic. The 2,000 2,000 2. Returns From utilities will have closed their doors long since. The News Agents 569 44 1 G. Total 11.697 12.800 prospects for effective change are not bright if Energy 10 . I certify that the statements made by me above are correct and Secretary Edwards' assessment is indicative. He recently complete. /�""�u editor. told the utilities bl untly; " Bailing out the electric utility industry is not on our schedule."

56 National EIR December 15, 1981 Interview

Part II: Stephen Mumford on the American Church

Below is the second and final part of an interview with the population-control proposals. That is the kind of Stephen Mumford of the International Fertility Research historical depth of thinki ng that we fi nd very seldom, Program in North Carolina, conducted on Nov. 6 by except among people who are elites in one fo rm or EIR's European Editor, Vivian Freyre Zoakos. another . Would you comment on how you zeroed in on Mumford, the author of an article in the January­ the A ugustinian tradition and the implications of that? February issue of the Humanist magazine castigating the Mumford : Well, I looked for what was inhibiting the Vatican's opposition to population-reduction policies, birth-control efforts. I looked at many, many different was identified by ElR fo under Lyndon H. LaRouche, fa ctors over several years, and ultimately I zeroed in on Jr., in a Nov. 17, 1981 EIR article titled "The Jesuits this. I see nothing else having anything like the same Charge that LaRouche Is 'An Agent of the Vatican,' as impact that this tradition of the Church is having on a spokesman fo r both the schismatics within the Roman population-growth issues. Catholic Church who seek to destroy the Augustinian commitment to science and progress, and fo r their secu­ Zoakos: Do you see that tradition as being alive-and if lar counterparts who drafted the Global 2000 Report / so where-within the American Church? Global Fu ture Report under the Carter administration, Mumford : I think that certainly it is alive within the advocating reduction of the world population by some 2 conservative leadership of the American Church, very billion people by the turn of the century. m uch so. I think this fanaticism on the part of the ultra­ Those circles, including Mumford, wrote LaRouche, conservative leadership threatens U.S. and global secu­ sincerely but wrongly view him as an agent of the Vati­ rity. Religious fa naticism drives the entire anti-abortion can, out of wishful thinking that such a characterization movement. The energy and organization and direction would weaken LaRouche's credibility. of this movement is derived from religious fanaticism. In the first part of the interview, M urnfo rd stressed Notice I said movement. Not all people who are anti­ his belief that "the American Church must break away abortion are religions fa natics, but most people who are from the Roman Church, and with this break will come anti-abortion gain considerable reinforcement from the a sharp decrease in power of the central Church ...." I religious fa natics who lead the movement. Last week I don't think there's any other activity coming under way received a memo fr om another population organization that is leading more to schism than the Church's opposi­ which indicated that population organizations were tion to this Global 2000 Report." He defends the Global being infiltrated by the Church fo r certain purposes. This 2000 Report as a scientifically based document, and cites is religious fa naticism. There is no difference between his own book, Population Growth Control: the Next these fa natics and religious fanatics in Iran, and Egypt, Move is America 's. as an elaboration of his view that and Saudi Arabia. world population growth is a national-security threat to the United States. Zoakos: I have seen you mention Father Andrew Gree­ ley, I believe in the same Humanist piece where you Zoakos : Returning to the Church fo r a moment: one discuss Father Murphy. I have been reading some of comment I wanted to make is that I would like to Father Greeley's writings lately. First, let me ask if you commend you on the fa ct that you were able to zero in on agree with the views of Father Greeley? I know you share the Augustinian tradition as representing the kind of si milar concerns. thinking which is the stumbling block to the success of Mumford : Yes.

EIR December 15, 1981 National 57 Zoakos: Well, I think there are some very shocking a number of years-that American Catholics are divided moral questions that he raises. I know in one of his into two groups. In one group you have about 50 million books, he talks about the need for priests to be the erotic intellectually honest Catholics who think very much like symbol of the community, and takes offfrom there. Also, I do. Then, in the other group, you have a couple of he discusses the Virgin Mary as a sex symbol. I bring this million who tend to believe in infallibility and/or are up, because you were talking about religious fanaticism intellectually dishonest, and unfortunately, at this point, from the conservative side, but, looking at the liberal the conservative leadership of the Church finds itselfvery side, tell me what you think of this type of component much in this latter group. I have seen signs already that morally? Let me add that-as you must know better than this schismatic movement is taking hold. I, since you have cited him-I am not putting words into Father Greeley's mouth when I say this. He is quite Zoakos: What kinds of signs are these? explicit on all this. Mumford: Articles, primarily, and discussions with Mumford: I tell you, I haven't read all of Father Gree­ Catholics. I think it's a matter of time, I think it will ley's work. He has published 80 books and I've only read move very fast, and-as I said earlier-nothing has a couple of them . I've read other articles that he's written, assisted in promoting the schismatic movement more but I would not want to make any generalizatons on his than the conservative leadership's attack on the Global work, because I'm certainly not familiar enough with it 2000 Report. I hope that you will read this Volume II. to do so. You are obviously very bright and I think that it would be difficult not to come to the same conclusions as the Zoakos: What about your own work, Mr. Mumford? writers of that report. It is not just that there is a thin What do you do to realize your concerns in these matters? thread throughout that report. There are so many differ­ Humanist What kind of work is the itself involved in, as ent projections that make it obvious that times are going well as yourself as an individual? to get very difficult, and we're going to pay a deep price in Mumford: Let me first tell you that I was invited by the the number of lives of children as the disparity between Humanist magazine to publish this report there when food supply and numbers continues to grow. Georgetown University elected not to publish it. I do not claim to be a humanist. I'm a rather inactive Methodist Zoakos: Continuing on the subject of the Church, you and have been for years. cited repeatedly the conservative leadership within the American Church. It seems to me that it would be Zoakos: What, then, properly do you consider your difficult to have a schism unless the issue of a conserva­ work to be? tive leadership were dealt with in some way. How do you Mumford: I work in an organization that evaluates new see that being dealt with? Or are you thinking in terms of and improved contraceptive technologies. 30 to 40 years hence, when we would have, through whatever means, cardinals and bishops in the United Zoakos: Which is something very much related to the States who 'are not conservative? But you seem to be types of things you are talking about in your writings, it talking about much sooner that that. seems to me. Correct? Mumford: Yes, I am talking about something certainly Mumford: It's related, but rather distantly. I for this decade. I think there is developing a movement within the Church to break away from the existing Zoakos: Do you, for example, maintain connections leadership, and whether or not the group or groups who either by attending public fo rums or seminars, or lead the breakaway will include any of the current cardi­ through private correspondence, or whatever, with Cath­ nals and bishops, I'm not certain. I believe that this olic circles in the United States? movement will include at least some bishops. Mumford: Yes, but on a very limited basis.

Zoakos: Presumably these being circles which share Zoakos: Which ones in particular do you have in mind? your point of view? Mumford: I wouldn't care to say at this point. Mumford: That's right. Zoakos: So you are talking about a movement it la Zoakos: Then let me ask you something as an insider in Luther? That is, a grassroots groundswell from more this. How do you see the schism developing in the local leadership? Church, and how do you gauge the chances of such , Mumford: That's right. thing occurring? Mumford: I think there is virtually a 100 percent chance Zoakos: But for such a thing to succeed you would have it will occur. It's still unclear to me what the mechanics to have in place some fairly impressive communication will be. but I'm convinced-from studying this issue for networks.

58 National EIR December 15, 1981 Mumford: I think this communication system already such, but which would be involved in this? After all, if exists. we're talking about the Church's stance on population control as being a national-security problem, then you Zoakos: Do you mean through the publications that would expect to see institutions in the United States, already exist? whether Catholic or not, being involved in trying to deal Mumford: That's right. I think there already exist the with the obstruction represented by the Church. groups, both Catholic and non-Catholic, leading the Mumford: I think that certainly there is going to be a breakaway in communicating with the grassroots. There 'growing number of institutions that are not Catholic that is a growing awareness that the Church is being very will be promoting this schism, due to the fact that the effective in thwarting population-control efforts, and Church is, in its opposition to birth control and abortion, there are tens of millions of American Catholics who threatening the security of all nations, including the recognize that this is suicidal, and are looking for lead­ United States. At this point abortion has become a ership-even breakaway lelldership that they can sup­ national-security issue. That point is no longer debata­ port-and see through this schism the only hope of ble. It is going to be spoken of much more in the near saving the American Catholic Church-the American future. It is becoming increasingly apparent that some Catholic Church and the world Church, which is ob­ members of Congress and some members of the admin­ viously very threatened by this insistence that popula­ istration are recognizing this fact. After all, it takes only tion-growth control not be undertaken. At some point I simple calculations to show that, in the absence of the 40 think this movement will move very fast once it starts, to 50 million abortions that take place every year world­ because Americans have been educated in large part­ wide, the world growth rate would be 50 percent greater not nearly as much as they should be-but there is an that it is today, or about 120 million per year. And if awareness on the street that the conservative leadership overpopulation threatens the security of all nations­ of the Church is leading the Church to doom. You are which is rapidly being recognized by more and more aware of the fact that, since 1965, the number of men people in and out of government-then it follows that going into the priesthood has dropped catastrophically. those who oppose abortions for those who wish to use it It is now one-fourth of what it was in 1965, a mere 16 threaten the security of all nations, including the United years ago, and this is just one symptom of this growing States. awareness in the United States, that we cannot continue as we are now in supporting this conservative leadership Zoakos: We in our work have seen some of the institu­ of the Church. tional connections as being particularly interesting. For example, Georgetown University's diplomatic training Zoakos: Our thinking on this is that various Catholic school provides somethi ng like 50 percent of key person­ educational institutions, including many of the seminar­ nel for the State Department. It is a well-known fact that ies, are very much a part of the kind of schismatic it is the State Department from which these population­ movement you are talking about. Do you agree with control policies have originated at the level of govern­ that, and if so, which institutions? ment institutions. This is one fact which is especially Mumford : Well, I wouldn't want to name any particular compelling. Also we have noted, and have been told, of institutions. Alexander Haig's connections with liberal Church net­ works, which we generically term Jesuit. His policy Zoakos: You cited Georgetown University, for exam­ orientation is also very much the one that you are talking ple, as having been the people who commissioned this about. Would you agree that these kinds of connections article of yours for the Humanist. Would you consider are not just accidental? Georgetown to be a part of this? Mumford: I question whether training at an institution Mumford: Well, I think that is pretty obvious. is necessary to arrive at the conclusion that overpopula­ Zoakos: Yes, we think so also. What about places like tion is threatening security. I have no such training . Notre Dame University, of Father Hesburgh, who is so myself. It is also obvious that abortion has become a very close to Father Greeley and those same networks? nationd:-security issue, and you really don't need to be Mumford: I think it's wrong to try to identify a few trained in this. You use a little common sense, and put a institutions. I think this movement is coming fr om cer­ few numbers together, and it becomes very obvious. So I tain groups fr om within all of these institutions, the think it is more a matter of common sense than any higher-education institutions. rinstitutional training. Certainly if Stephen Mumford could have arrived at these things without any training, Zoakos: Are there other, non-Catholic institutions I'm sure a lot of other people people could have too. I which you see as playing a part in this, institutions such don't know whether there is any connection between as the Heritage Foundation, which are not Catholic as these two or not.

EIR December 15, 198 1 National 59 Congressional Closeup by Barbara Dreyfuss and Susan Kokinda

sion set up to propose changes in includes this tax incentive but at a Deregulators gear up rate-making rules for the trucking lower level than in the Kemp bill. attack on ICC industry by January 1983. Chaired Significantly, the task fo rce backed Back-to-back hearings on Capitol by Commerce Committee Chair­ a key Kemp proposal to allow Hill in mid-November began to set man and deregulator Sen. Bob areas designated as enterprise the climate fo r further attacks on Packwood (R-Ore.), whose last zones to become free-trade zones the trucking industry, the Interna­ service to the administration was as well. Under this plan, low-wage tional Brotherhood of Teamsters, to lead opposition to the AWACS light-assembly plants could be set and the Reagan administration it­ sale, the commission includes the up to produce items whose com­ self, if it resists further deregula­ author of trucking deregulation, ponents could be made in foreign tion and destruction of the nation's Edward Kennedy. The commission countries or whose product would trucking industry. heard the Federal Trade Commis­ be exported without tariffs . Former Carter administration sion chairman propose the virtual But Kemp's aides worry aloud "anti-inflation" czar Alfred Kahn abolition of the rate-making bur­ that the White House task force delivered scathing testimony eaus which allow for the minimal wants to limit the number of zones, against ICC Chairman Reese Tay­ maintenance of an economically running the risk that the proposal lor and the Reagan administration viable national trucking system. will be termed token or experimen­ at hearings of the Joint Economic tal. Committee on Nov. 17. The hear­ While Kemp has issued a pub­ ings were in fact called at Kahn's lic warning that the administration urging, and may be the opening Kemp presses Reagan should not water down his propos­ shot of attempts to "Watergate" to back E-zones als, he fully expects to work out a the administration around its so­ Aides to Rep. Jack Kemp (R­ jointly approved plan with the called ties to the Teamsters and N.Y.) report that he has stepped White House. The problem, these organized crime. Kahn charged, up pressure on the White House to aides say, is that the White House "The public-and Congress-have back his legislation to create urban has "dragged its feet for too many even more reasons to be upset that free-enterprise zones modeled on months on this." They worry that President Reagan chose to replace the low-wage Hong Kong econo­ by the time something is finally Dr. Gaskins [former pro-deregu­ my. worked out, it will wind up right lation ICC Chairman] with a A special administration task in the middle of next year's fight Chairman who enjoyed the active fo rce on enterprise zones finally over the budget. "We want some­ support of the American Trucking met with the President to deliver thing passed this year," said a frus­ Association and the Teamsters­ its recommendations on Dec. 2. trated Kemp aide. "We put togeth­ both of them opponents of genuine Capitol Hill sources report that the er a bipartisan coalition and now regulatory reform-and that the task fo rce couldn't agree on a sin­ the White House might fumble newly constituted Commission gle proposal and instead presented everything a way." proceeded in a series of decisions two versions, one developed by the Kemp, who has received his to interpret its mandate under the Treasury crew and a second by prompting on the bill from the amended act in a more protection­ Housing and Urban Development Fabian Society networks who con­ ist, anti-competitive manner than people. Both proposals differ on trol the nominally right-wing Her- . its predecessors .... Make no mis­ points with the bill introduced by itage Foundation, is said to think take about it: these people are reg­ Kemp and Rep. Robert Garcia (0- that if a general bill were passed ulators and cartelizers, with a cap­ N.Y.). The Treasury proposal re­ through Congress, radical plans ital R and a capital C." portedly cuts out tax incentives to for privatization of services within Kahn's broadside was fo llowed encourage the hiring of workers areas designated as zones could be the next day by a meeting of the within the zone from CET A or carried out on a local level. Some congressional advisory commis- welfare rolls. The HUD proposal individuals involved with the

60 National EIR December 15, 1981 White House task force, such as The NRC announcement that the grand cosmic scope of things," Undersecretary for Policy Emman­ had precipitated the heari ngs came declared an aide on the committee. ual Savas, wanted this and other in a Nov. 27 letter from Commis­ "We will be asking searching ques­ things spelled out. Kemp's aides sion Chairman Nunzio J. Palladi­ tions. The first ones will be on the say that internal bickering and lack no to the chairmen of several role of the federal government in of focus delayed the task fo rce. congressional committees which science and technology. The sec­ Now there must be yet another oversee nuclear regulation and ex­ .ond will be the fact that the budget meeting of the task force next port. The letter charged that IAEA document is a major statement of month to see if it can agree on a safeguards "would not detect a policy, given the major changes single proposal. diversion [of weapons-grade mate­ the document indicates, we want rials] in at least some types of to know the impact it will have on facilities. " science programs in the United

The Senators' anti-nuclear ex­ States and on our technology, it Senator calls for port drive was given open backing which has given the world its high nuclear export moratorium by Richard T. Kennedy, Undersec­ standard of living ." Barely a week after budget-cutter retary of State for Management The legislators intend to grill David Stockman's proposal to and Alexander Haig's ambassador Keyworth about how the adminis­ shut down the nuclear export sec­ to the IAEA. Testifying before tration will determine which high­ tion of the Commerce Department Percy's committee, Kennedy said energy physics programs it will became public, leading Senate lib­ that, in his opinion, the ability to back, whether the administration erals launched an attack on nuclear detect diversion of nuclear fuels to is concerned about the lack of sci­ exports from a diffe rent angle. In military use "is not generally at­ ence-education programs in the testimony before a sympathetic tainable" by the IAEA. country, and whether Keyworth Senate Foreign Relations Commit­ really wants to eliminate aU plane­ ' tee on Dec. 2, Sen. Gary Hart (0- tary exploration programs for the Colo.) called on the Nuclear Reg­ next decade. ulatory Commission (NRC) to Major science In what committee staffers be­ "suspend all exports until it is con­ h£arings upcoming lieve was an effort to set the stage fident of the adequacy of Interna­ The House Science and Technolo­ fo r these hearings, Keyworth had tional Atomic Energy Agency gy Committee, chaired by Don Fu­ a luncheon meeting with the Wash­ (lAEA) safeguards." Hart, who is qua (D-Fla .), will hold what one ington Post Dec. 2 and went into a the ranking Democrat on the En­ aide called the "most important major attack on NASA planetary vironment and Public Works Nu­ hearings we will hold in the next exploration programs and general clear Regulations Subcommittee, decade" on Dec. 10. The hearing is science-education programs. Key­ was testifying at a hearing called at intended to be a major discussion worth announced that he has rec­ the urging of Sen . Alan Cranston of U.S. science and technology ommended halting all new plane­ (D-Calif.), an ardent supporter of policy and what it must be. This tary space missions for the next the Malthusian Global 2000 per­ hearing will be the kickoff to fol­ decade and using any available spective, in the wake of an NRC low-up sessions planned for Feb. 2 fu nds in the space program only announcement that it was consid­ and 3. for the experimental · payloads on ering revising its own export-licen­ Lead-off witness will be George the Space Shuttle. sing standards because of deter­ Keyworth, the President's science Keyworth criticized the admin­ mined inadequacies in IAEA safe­ adviser. He will be fo llowed by the istration's cuts in the social science guards. Hart called the IAEA safe­ two previous science advisers, budget while calling the science­ guards a "fa�ade" which are used Frank Press and Guy Stever. education programs "ineffective" to "legitimize U.S. international "This is perhaps our most im­ and announcing that they will be trade" in nuclear technologies. portant hearing-it will deal with ended by 1982.

EIR December 15, 1981 National 61 National News

Pennsylvania, New Jersey, and Dela­ New York .... there are thousands of ware alsa have euthanasia bills pending . leaflets in every [subway workers'] de­ Said Klenetsky, "At the Nuremberg pot. ..." This refers to a leaflet issuedby Libertarian politicians trials after World War II a prominent the TWU leadership using NDPC docu­ U.S. physician, Dr. Leo Alexander, tes­ mentation of connivance between Haw­ proliferate in Texas tified that widespread genocide started tin and New York's Global 2000 de-ur­ The Libertarian Party is out to launch an with small beginnings by Nazi doctors in banization networks to dump Lawe. electoral force in Texas comparable to the euthanasia movement. The concept Hawtin has been in charge of scripting radical environmentalist Tom Hayden's of "a life not worthy to be lived" was Post attacks on Lawe and the union. Coalition for Economic Democracy in applied first to the "severely and chroni­ California, with a free-market twist for cally sick." This led to the mass murder Texas. The Libertarian movement is of the mentally ill under "Action T-4" backed by Robert O. Anderson , the At­ until 1942 when the "lives not worthy to lantic Richfield chairm an who runs the be lived became Jews, Poles and any Moldea outlines war Aspen Institute. opponent of the Nazi leaders," Klenet­ Their most blatant success thus far sky charged. against Reagan has been the November mayoral election Spokesmen for the NDPC scheduled Dan Moldea, the Walter Sheridan pro­ in Houston, where a coalition of liberals, a press conference on Dec. 3 outside the tege connected to the Institute fo r Policy homosexuals, and libertarians elected offices of Sen. Charles Mathias (R-Md.) Studies, has outlined in an interview pro­ Kathy Whitmire. At the same time, the to announce the committee's national vided to EIR his scenario for the destruc­ "cowboy" version of British liberalism campaign against the Natural Death tion of the Reagan administration ran sufficiently rampant to defeat the Act, D.C. Act 41 15. Mathias chairs the through the current wave of scandals Clayton water development bill and the Senate subcommittee on the District of aimed at top Reagan administration of­ Austin nuclear energy project . Columbia, and will be put on the spot to ficials. In Houston, three card-carrying Lib­ introduce a resolution of disapproval in Earlier this year Moldea had read a ertarian Party members were elected to Congress. Mathias is a supporter of the two-hour presentation at a forum spon­ the Harris County School Board, run­ Global 2000de population doctrine. sored by the Institute for Policy Studies, ning on a slick free-market pledge to trim on the "organized-crime connections" of bureaucracy, which is in fact a foot in the the Reagan administration. door fo r their program of dismantling In the interview Moldea stated that public edu.::ation. Reagan's National Security Adviser In a post-election interview, one of Murdoch's Ne w Yo rk Post Richard Allen was dead politically; that the three, Bill Fraser, indicated that the Labor Secretary Raymond Donovan party intends to establish a precinct-level upset about LaRouche would not last more than 60 days because machine in Texas and work actively The tabloid daily New York Post, owned of his involvement with indicted Long through the state legislature to pass their by Anglo-Australian press baron Rupert Island Teamster official Harry Gross; programs if they are stymied locally. Murdoch, on Dec. I carried a banner and that CIA Director William Casey page-three article titled "Neo-Nazis was next on the hit list fo r links to organ­ Smearing Lawe's Rivals in TWU." The ized crime. background to the article is that the While proclaiming with relish the im­ Post's British intelligence controllers pending destruction of the Reagan ad­ National mobilization have been disconcerted by the National ministration, Moldea sang the praises of Democratic Policy Committee's counter­ FBI Director William Webster for pro­ to stop euthanasia attack against the Post's scandalmonger­ moting the Abscam-style "sting" entrap­ Mel Klenetsky, fo rmer New York City ing attempts to wreck the Transit Work­ ment operations against politicians and Democratic mayoral candidate and a ers' Union (TWU), whose current chief, the labor movement, and bemoaned the spokesman for the National Democratic austerity opponent John Lawe, is up for "raw deal" Webster was getting in the Policy Committee (NDPC), announced re-election against a crew of news media because of his conversation this week that he will lead a national "dissidents. " with Richard Allen. effort to ensure Congress vetoes the Dis­ Post author Guy Hawtin charges that Moldea said that the Reagan admin­ trict of Columbia's Natural Death Act. "neo-N azi party workers have mounted istration was handling organized crime Congress must pass a "resolution of a massive propaganda campaign aimed with "kid gloves" and that Webster was disapproval" against the act by the end at smearing Lawe's opponents ...claim ­ the only person in the administration of January to prevent it from becoming ing union reformers are backed by 'big who was interested in investigating the law. business interests' who want to destroy Hmob,"

62 National EIR December 15, 1981 Briefly

• JIMMY CARTER has formed a new political action committee which will raise money for Demo­ Moldea also said that he was to be the fo llowing way: "If we don't act now to cratic candidates and for causes "spokesperson" for the independent turn some federally held lands over to such as human rights and Mideast truckers' movement connected with Bill private hands fo r exploitation of natural peace. The fo rmer president said Hill in an upcoming truckers' strike sup­ resources, then within \0 to 20 years we in a letter released Dec. 2 that the posedly timed for around Christmastime. will be faced with a national energy PAC "in no way is for my own Moldea's mentor, Kennedy Justice De­ shortage crisis, such that will fo rce the political career," but instead will partment operative Walter Sheridan, fe deral government to come in and de­ focus on supporting environmen­ said that it would take something like the stroy the environment of the West in tal quality, arms control and "a truckers' strike to really rev up the scan­ order to force the development of needed humane approach to fiscal respon­ dal against Reagan because of his likely energy resources. sibility." Unconfirmed reports in­ support of the Teamsters' Union against "I saw it when I was on the Federal dicate that Carter's PAC will be the independents, which could be played Power Commission during the severe named "Peanut PAC," or by Reagan's enemies as a "political con­ winters of 1976 and 1977, when a million PEAPAC for short. flictof interest." jobs were lost and real energy shortages threatened the Great Lakes and North­ • EDWIN L. DALE, Jr., the Di­ eastern states. Then, the government rector for Public Affairs of the would have done anything to get the Stockman OMB, co-authored a energy it needed." pamphlet on economic and budg­ Watt undercutting Speaking like an environmentalist at etary policy in 1976 with Donald that point, Watt then declared, "If that Lesh, the Executive Director ofthe resource development push? happened, then my homelan d [Wyo­ U.S. Club of Rome, EIR investi­ I�erior Secretary James Watt astonished ming] would be raped by the govern­ gators learned recently. Dale is a the press corps in Houston on Nov. 24 by ment. former New York Times columnist mouthing the argument of the environ­ While Watt's promise to release fed­ who in 1971 con fe ssed in print that mentalists he allegedly opposes in de­ erally held lands for private exploitation he had no idea what to do about fense of a stand against a plan to bring is appealing to pro-growth interests, it economic policy . water from Alaska. also thwarts the ability for real economic "The environmental impact would be growth, especially in the West. This view • PROF. MEL BRADFORD of horrendous. That, combined with the as­ opposes the "dirigist" role which every­ the University of Dallas has been tronomical cost involved, means that I one who has been involved in the real endorsed by 16 Senators to head ·will not allow a single penny to be spent history of how the West was developed the U.S. National Endowment fo r out of my department to even study the knows the government must play. the Humanities, although he prais­ idea oftransferring water from Alaska to Without water resource develop­ es "moral indifference" toward Canada," Watt stridently asserted to the ment, there is no real economic develop­ slavery and, according to column­ shocked press. ment, as the development of the West ist George Will, he likened Abra­ Watt's emphatic stand against the proves. Such development always re­ ham Lincoln to Adolf Hitler. Lin­ NAWAPA concept-revealed publicly quires strong government support. coln, claims Professor Bradford, for the first time at the Houston press Yet, Watt shrugged his shoulders and "undermined our inherited consti­ conference-contradicts interest ex­ grinned when asked what words of com­ tutional system" by replacing pressed by others close to President Rea­ fort he had for farmers in the High Plains "positive pluralism" with a "uni­ gan in reviving a study of the Alaskan who are faced with ruin if no new water fo rmitarian" doctrine. water option. is provided. It also coheres with other views ex­ "Nothing will be done at least until • CORRECTION : In our Dec. 8 pressed by the Interior Secretary which the end of the decade," he said. "But issue, two names were misspelled are causing many pro-growth observers that's all right. It will take that long for a in the article on the U.S. Club of to begin to have second thoughts about real crisis to provoke something getting Rome conference in Washington, Mr. Watt. done." D.C. The Club of Rome member For example, ' in his speech to the Even then, he noted, water develop­ in the Defense Department re­ Houston Forum, Watt insisted that ment would come only as a partnership ferred to as Donald Dewitt is Dr. everything he stood for was ultimately of state and private interests as a condi­ Darnell M. Whitt II. George Bur­ aimed at preventing the federal govern­ tion for government involvement. ris is in fact George Bird of the ment from unleashing a "Manhattan Water fr om Alaska? "It is the furthest Fusion Power Company in New Project-style" program to develop the thing from my mind. I won't spend a Jersey. nation's energy and natural resources. penny on it. It will ruin the ecology," he Watt related his views on this in the says.

EIR December IS, 1981 National 63 Editorial

u. s. mission to stop fa scism

"It is a little bit disconcerting that the same shock­ creation of a parallel fascist movement here. Featured troop kind of tactics stand at the end of one's life as I in the group is Karl-Heinz Hansen, a leftist West have seen as a very young person in Berlin in '29, '30, German parliament member named last year by Der '31," space scientist Krafft A. Ehricke remarked at the Sp iegel magazine as a fo rmer member of Adolf Hit­ opening of a talk on the future of space development ler's elite Werewolf organization, established at the given in New York City Nov. 28. Dr. Ehricke, who end of World War II to carry forward the will of the played a key role in the U.S. space program, was Fuhrer after the collapse of the Third Reich. Flanking referring to the mindless environmentalists, enraged Hansen were Petra Kelley, a former aide to Sen. against his advocacy of nuclear energy and space Edward Kennedy who moved to Europe and became industrialization, who had kicked in the doors at head of the West German Green Party;.Kurt Bastian, several of his fo rums during a just-concluded tour 6f a retired European commander; and Josephine Rich­ Western Europe. ardson, a member of the British Labor Party. These are the "green fascist" shock troops whose Hansen began his U.S. appearances at the U nitar­ rise in Germany is reported in our Special Report this ian Church in Princeton, New Jersey on Nov. 30. week. Like the original Hitler Youth, they are de­ "The Green Party is against nuclear power because it ployed in the service of an oligarchical conspiracy, does not improve the quality of life, but raises the directly involving Europe's royal families, to trigger a standard of living," Hansen said. He laid out a scena­ 'new Holocaust that will make the Nazis' pale by rio for "complete transformation of the political sys­ comparison. Dr. Ehricke reported that he had chal­ tem in Germany by the 1984 elections." The current lenged those of his "green" opponents who had riots are designed to "pressure the major political enough brains left to verbalize their objections with parties" until they "change their outloo k"-renounce two simple questions. First, do you agree that there is technological progress and growth. Hansen and his a problem? Second, what is your solution? three associates presented an all-day forum sponsored The problem, as Dr. Ehricke put it eloquently, is by the same Edward Kennedy on Capital Hill on

that 12 million infants die every year in the Third Capitol Hill on Dec. 2. . World because of lack of food, energy, health care, The United States, which welcomed German-born and social services. There is no solution except nuclear scientists like Dr. Ehricke after World War II, has a energy and the rapid development of fusion energy. special obligation to defeat the new Nazi movement. The "alternative" is a conscious commitment to The return of this country to a policy based on the genocide. The scale of the murder envisioned by the principles of what Alexander Hamilton called "the green-fascist movement is at least 2 billion people­ American System" is the best hope that our still­ the figurefor reduction of population projected in the immense industrial resources can be applied to turn­ Global 2000 Report prepared by the Carter administra­ ing back the Dark Age. As Dr. Ehricke emphasizes, tion and backed by the Haig State Department. there are no limits to growth provided mankind utili­ Four leaders of the violent green movement in zes nuclear energy and conquers outer space. With Europe have recently been bro ught to the United this national mission, we can nip the green fascist States sponsored by Citizens fo r a Sane Nuclear Poli­ movement in the bud here""":and strengthen the resist­ cy, for a week-long speaking tour to promote the ance to the new fa scism in Europe.

64 National EIR December 15, 1981 Finally, a magazine that brings the science ofprogre ss to Americas children

The Yo ung Scientist

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