economic • DO YOU REMEMBER when Boris Yeltsin aimed in April, for high-level talks and seminars at the invitation of the Russian Army's tanks at the Parliament and started the Universal Ecological Academy, of which he is a mem­ shooting? ber. His briefing, on return from Russia, became the first chapter of this Special Report, and the warm reception he • DO YOU REMEMBERlast December's vote for got shows that there is still time to reverse the criminality Zhirinovsky? and descent into chaos in Russia, if we act now.

Were you shocked? AND ACf WE MUST, for our own sake as well as Russia's. As laRouche himself said: "Although we are While you were shocked, EIR was acting. Informed by focused upon the subject of Russia, only charlatans could nearly two decades of analysis of the Soviet Union by such speak of the future of Russia without taking into account leading thinkers as American economist Lyndon laRouche explicitly the factors which are of immediately decisive and Germany's Gen. Paul-Albert Scherer, EIR's European importance for each and all nations of this planet. Indeed, staff put together this report to warn western policymakers the present crisis within Russia (as of all of eastern Europe) that the countdown was on to what could be the century's is a relatively mild form of the catastrophe which is soon to biggest strategic disaster. strike down every nation upon this planet. The way we Then Lyndon laRouche, released from confinement as a treat the problems of Russia today is the mirror of the political prisoner in January 1994, traveled to Moscow with early- to medium-term future of China, of Japan, of North his wife, Schiller Institute Chairman Helga Zepp-LaRouche, America, and of western Europe."

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______o Please send a full listing of publications Exp. Date. Signature ______available from EIR News Service, including other Special Reports. Make check or money order payable to: EIR News Service P.o. Box 17390 Washington, D.C. 20041-0390 Founder and Contributing Editor: Lyndon H. LaRouche, Jr. Editorial Board: Melvin Klenetsky, Antony Papert, Gerald Rose, Dennis Small, Edward From the Associate Editor Spannaus, Nancy Spannaus, Jeffrey Steinberg, Webster Tarpley, Carol White, Christopher White Senior Editor: Nora Hamerman he arrests of the drug-traffickersthat are the s bject of this week's Associate Editor: Susan Welsh T � Managing Editors: John Sigerson, Feature are a victory for EIR and the political m�vement of Lyndon Ronald Kokinda LaRouche, which kicked off a campaign for a war on drugs with the Carol White Science and Technology: Dope, Inc. Special Projects: Mark Burdman publication of the best-selling book in � 978. In his preface Book Editor: Katherine Notley to the second edition, dated April 10, 1986, Lyndon LaRouche laid Advertising Director: Marsha Freeman out the goals of the campaign; these speak directly to the political Circulation Manager: Stanley Ezrol situation today, and what the next steps by the Clinton administration INTELLIGENCE DIRECTORS: ' Agriculture: Marcia Merry ��be: Asia and Africa: Linda de Hoyos "Americans, and others, are increasingly fearful of international Counterintelligence: Jeffrey Steinberg, Paul Goldstein terrorism. Few, unfortunately, understand that terrorism is so tightly Economics: Christopher White European Economics: William Engdahl integrated with the international drug-traffic that the two can not lbero-America: Robyn Quijano, Dennis Small be separated from one another. If we destroy the narcotics traffic, Law: Edward Spannaus Russia and Eastern Europe: terrorism's essential logistical base is destroyed. iHowever, destroy­ Rachel Douglas, Konstantin George ing the crops and shooting down the planes carrying the drugs is Kathleen Klenetsky United States: not enough. Unless the hundreds of billions of dollars of the drug­ INTERNATIONAL BUREAUS: Bangkok: Pakdee Tanapura, Sophie Tanapura traffickers are confiscated, and the gUilty bankers and financial bro­ Bogota: Jose Restrepo kers are sent to prison, the United States and Western Europe are Bonn: George Gregory, Rainer Apel Buenos Aires: Gerardo Teran helpless against terrorism. As long as such cre*ors of the money­ Copenhagen: Poul Rasmussen laundering system as Donald T. Regan areallowed to exert influence Houston: Harley Schlanger Lima: Sara Madueno over the policies of our own and allied governments, there is no Mexico City: Hugo Lopez Ochoa serious 'War On Drugs,' nor is there any serious action against Milan: Leonardo Servadio New Delhi: Susan Maitra international terrorism." Paris: Christine Bierre With the arrests of Michael Abbell, Robert Vesco, and Gilberto Rio de Janeiro: Silvia Palacios Stockholm: Michael Ericson Rodriguez Orejuela, that program has taken a big step forward. Now, Washington, D.C.: William Jones the drug bankers must be jailed, and the "Bush leaguers" must be Wiesbaden: Goran Haglund cleaned out from the U.S. Department of Justice. Michael Abbell EIR (ISSN 0273-6314) is published weekly (50 issues) served at the DOJ under Mark Richard, leaving in 1984 to become except for the second week qfJuly, and the last week of December by EIR News Service Inc., 317 Pennsylvania an agent of the Cali Cartel. Richard and other "Bush leaguers" are Ave., S.E., 2nd Floor, Washington, DC 20003. (202) 544-7010. For subscriptions: (703) 777-9451. still there, however. These are the people who railroaded LaRouche EuropetIII Hetllltiuarters: Executive Intelligence Review into prison, and whose policies led to the Waco massacre. EIR will Nachrichtenagentur GmbH, Postfach 2308, 0-65013 Wiesbaden, Otto von Guericke Ring 3, 0-65205 be presenting a full dossier on their crimes in a fQrthcoming issue. Wiesbaden, Federal Republic of Germany Tel: (6122) 9160. Executive Directors: Anno Hellenbroich, Don't miss the report (p. 58) on LaRouche's:latest visit to Mos­ Michael Liebig III Delllllflrlc: EIR, Post Box 2613, 2100 Copenbagen 0E, cow, where he addressed a meeting at the State .Quma (Parliament), Tel. 35-43 60 40 among other gatherings. Upon his return, he characterized the visit I" Mexieo: EIR, Francisco Diaz Covarrubias 54 A-3 Colonia San Rafael, Mexico DF. Tel: 705-1295. as "probably of strategic significance." We publish here his speech JfI/HJII sub.criplWlI .ales: O.T.O. Research Corporation, Takeuchi Bldg., 1-34-12 Takatanobaba, Shinjuku-Ku, to the Institute of Economics of the Russian Academy of Sciences. Tokyo 160. Tel: (03) 3208-7821.

Copyright © 1995 EIR News Service. All rights reserved. Reproduction in whole or in part without pennission strictly prohibited. Second-class pustage paid at Washington D.C., and at an additional mailing offices. Domestic subscriptions: 3 months--$125, 6 months-$225, I year-$396, Single issue--$lO Postmaster: Send all address changes to EIR, P.O. Box 17390, Washington, D.C. 20041-0390. IIillContents

Departments Strategic Studies Economics

55 Australia Dossier 58 LaRouche presents 4 Clinton puts financial Expose of royals draws blood. economic recovery reform on international program in Moscow agenda 72 Editorial Russia and the United States "have The "reforms" proposed in the final The rights of men, women, and a historic, common interest to communique of the Halifax summit children. fulfill" in putting the central of the Group of Seven will do banking system into bankruptcy and nothing to solve the crisis; but launching a new monetary system, behindthe scenes were battles over Lyndon H. LaRouche said on June the real issues of economic 8 in an address to the Institute of development. Economics of the Russian Academy Photo and graphic credits: Cover: of Sciences in Moscow. 6 Mexican private banking AFP. Page 11, EIRNS/John system is melting down Sigerson. Page 19, Courtesy of Of the 18 private banks still in Celerino Castillo. Page 22, El existence, six have resorted to the Espectador. Pages 30, 35, EIRNS/ federal bailout entity Procapte. Stuart Lewis. Page 34, EIRNS/Jon Pearl. Page 35, EIRNS. Page 42, 7 Currency Rates Courtesy Hongkong Tourist Association. Pages 59,63, EIRNS/ Rachel Douglas. 8 Japan's banking crisis could trigger global financial collapse Disclosure of huge bad loans lifts the veil offa crisis that is now five years old.

10 The Third World's biological holocaust can be stopped New research shows that easily cured nutritional deficiencies could be a major factor in countries afflicted by deadly outbreaks like that of the Ebola virus.

12 'Shock therapy' yields food crisis in CIS

14 Armenia's President deludes his countrymen "Minimum wage" is purely symbolic.

16 Business Briefs Volume22, Number26, June23, 1995

Feature International National

36 Shut down U.N. 's Beijing 66 Whitewater Starr chamber Conference on Women may be running out of Documentation: Excerpts from the steam Draft Platform for Action of It may not be accidental that at the Proposals for Consideration in the same time that the Clinton Preparation of a Draft Declaration, administration is making some and the Draft Platform for Action dramatic moves against drug­ Commission on the Status of trafficking and money-laundering Women at its 39th session. networks-moves which implicitly Cali drug cartel kingpin Gilberto Rodriguez Orejuela hit circles closely linked to George (second from left) after his arrest in Cali, Colombia. 39 Bosnians gather forces for Bush's secret government apparatus The U.S. Drug Enforcement Administration main­ tains that the Cali Cartel is responsible for supplying an offensiveto liberate the which came to prominence in the 80% of the cocaine sold in the United States. nation 1980s-the attacks on President To deal with the Bosnian war, Clinton himself seem to be 18 Three drug busts prove Lyndon LaRouche urges the United escalating. Dope, Inc. can be defeated States military to recover the winning philosophy it had before 68 Congressional Closeup 20 Indictment against the Cali MacArthur was fired. Cartel 70 National News 41 China cleans out British 21 Colombia's Samper hits free trade vulnerabilities By Michael O. Billington . . Cali Cartel, but negotiates with 'Third Cartel' 45 Kissinger China war comes to Congress 23 Will Robert Vesco spill the beans on the Dope, Inc. ? 47 'Green' vice president of German parliament praises 24 How Vesco set up the paganism Medellin cartel

50 Baroness Lynda Chalker 28 Soros provides funds for targets Kenya for tribal drug legalization warfare 29 Bush's legalization strategy 52 Italy at the crossroads set back in Colombia Part I of a series: Is Italy in danger of fascism? 31 Panama: George Bush's narco government 56 International Intelligence

32 Venezuela: Cisneros & Co. in the sights

33 LaRouche was right: 20- year war on drugs

r' �TIillEconoIDics

Clinton puts financialreform on international ageqda by William Jones I

Although the Halifax G7 summit began under the shadow of sections on "growth and employment" that put the creation increased violence in Bosnia, a subject that even dominated of jobs in the center of interest. "The central purpose of our the Clinton press conference on June 16, the issue of reform economic policy is to improvd the well beingof our people, of the international financial institutions was the central item allowing them to lead full and productive lives," the commu­ of discussion, resulting in a final communique that was no nique begins, noting that only �ough the promotion of "du­ real resolution of the problem, but at least pointed in the rable job creation" can that "well-being" be secured. "Good direction of a solution. fiscal and monetary policies will not on their own deliver The "reform" mechanisms specified in the communique the full fruits of better econOlpic performance." It will also are themselves useless to "manage" the global financialdisin­ require "achieving the 10nge11-term potential of our econo­ tegration now under way-an impossible task. But commit­ mies to grow and create secure, well-paying jobs," reads the ment to economic development-insisted upon by President communique from the seven leaders. The jobs issue was of Clinton in the case of financing for Mideast development, is prime concernto President Clinton who had taken the initia­ reflected in the final communique. tive to the "Jobs Summit" in I)¢troitlast yearand was strongly The first working dinner of the Group of Seven heads of supported by French PresidenUacques Chirac, who had been state (Canada, United States, France, Germany, Italy, Japan, elected on a strong jobs progratn. The leaders decided to have Britain) at Government House on June 15 was to have been another "jobs summit" this year, underlining the importance the site of a major discussion of international financial re­ of the problem. i form . As the Bosnian Army initiated measures to break the President Clinton, who, at last year's summit in Naples, Serb stranglehold on the Bosnian capital of Sarajevo, the G7 Italy, had called for a review of the international financial leaders, concerned over the increasing fighting, decided to institutions at this year's sunnpit, "engaged in a fairly lively call in their respective foreign ministers and get a briefingon interchange on the financial tnarkets issues," according to events in Bosnia. After discussions, Canadian Prime Minis­ U. S. "sherpa" for the G7, Daniel Tarullo, Assistant Secretary ter Jean Chretien, the host of the summit, issued a statement of State for Economic and Busliness Affairs. Clinton recount­ appealing to the Bosnia Serbs and to the Bosnian government ed for the other leaders the experience the United States had "to establish an immediate moratorium on military opera­ had with Mexico, emphasiziqg "the importance he attached tions." Canada was particularly concerned about the fate of to the specificity of proposals for both prevention and trans­ their peacekeepers, some of whom remain hostages with the parency," and "on the capacity to react with adequate re­ Serbs. sources when emergencies strike," Tarulloexplained. But the economic discussions were duly resumed the The measures taken by the G7 Summit leaders do not, following morning, where leaders each explained the eco­ however, represent fundamental reform of a bankruptfinan­ nomic situation in their respective countries. cial system. They contain, in fact, some rather dubious ele­ Interestingly enough, the communique begins with long ments, undoubtedly the result of the numerous political com-

4 Economics ElK June 23, 1995 promises required to write the statement from these seven for the World Bank. The communique clearly states: "We leaders. agree on the need to actively support the peace process in the The IMF received a strengthened mandate to monitor Middle East. Such support would include the establishment countries' economies. The G71eaders called on the IMF to 1) of a new institution and financing m�hanism enhancing re­ establish benchmarks for the timely publication of economic gional cooperation. We therefore urge the Task Force already data; 2) identify the countries which comply (or don't com­ at work to continue its deliberations with an aim to arriving ply) with those benchmarks; and 3) provide "sharper policy at a suitable proposal in time for the Amman summit next advice to all governments, and deliver franker messages to October." Dan Tarullo, who had successfully maneuvered countries that appear to be avoiding necessary actions." A the issue through the "sherpa" process prior to the review by new "Emergency Financing Mechanism" was to be estab­ the G71eaders, expressed particular pride in having the Bank lished that would provide access to Fund arrangements fi­ included in the communique. nancing to be linked to the IMF's "conditionalities." The goal The leaders also expressed concern about the poorest was to achieve an emergency fund of $58 billion financed nations, calling for increasing debt relief. They called on through an increase of the Group of Ten's General Agree­ the multinational institutions to develop a "comprehensive ments to Borrow (GAB), rather than through an increased approach" to assist countries with multilateral debt problems, IMF quota as desired by IMF Managing Director Michel through the "flexible implementati0n of existing instru­ Camdessus. ments" and through "new mechanisms where necessary." Nor was the IMF given "dictatorial powers" as Director They called for "appropriate measures in the multilateral Camdessus may have wished. The communique also con­ development banks" to advance this objective. tains considerable criticism of the functioning of the multina­ tional institutions. "We will work with the [Bretton Woods] Derivatives, 'the AIDS of our; economies' organizations and all their members to ensure relevant multi­ The discussion over what to do about currency specula­ lateral institutions," the communique reads. They calion the tion , derivatives and all forms of the highly volatile high-risk multilateral institutions to "encourage the development of a capital markets, was hot. French President Chirac went very healthy private sector, expand guarantees and co-financing far in his criticism of aggressive money traders, referring to arrangements to catalyze private flows, and increase credit such speCUlation as "the AIDS of our economies" during for small and medium-sized enterprises" and to continue to leaders' discussions on June 16. provide resources for the infrastructure needed for sustain­ However, the wording of the communique is circum­ able development," (which goal they define as "a higher spect. It calls for "close internationaloooperation in the regu­ quality of life for all people"). lations and supervision of financial institutions and markets," The multinational institutions have received a new lease in order "to ensure an effective and integrated approach, on on life, but their operations are now under the microscope. a global basis, to developing and enhancing the safeguards, Representatives for the administration have time and again standards , transparency and systems necessary to monitor expressed the President's desire that these institutions orient and contain risks." towards "investing in people"-something the IMF has done Canadian Prime Minister Chretien has repeatedly ex­ everything to sabotage. pressed concern that new instruments lof investment and cur­ rency speculation are destabilizing financial markets.Just a Mideast Development Bank few weeks before the summit, he had;a high-profile meeting But it is not only reform of the bankrupt Bretton Woods in Ottawa with Prof. James Tobin of"ale University, author institutions that was the focus of the financial discussion, but in 1978 of the proposal to tax curren¢y speculation transac­ also, under strong protest from British and other circles, the tions, now called the "Tobin tax." The i'LaRouche proposal," question of new institutions for economic development. The made in March 1993, for a one-tenth of one percent tax on U.S. worked hard to rally support for the establishment of a derivatives transactions, has also popped up since then in Mideast Development Bank. draft bills to Congress, and in Europe�lD debate. A spokesman for the European Union, as late as the first But under pressure from the "free market" enthusiasts, day of the summit, expressed concernabout establishing and any such tax was officially tabled in Halifax. In a "Review "new financial institutions." In response to a question from of International Financial Institutionsj" issued together with EIR, he complained that there is "really no need for new the communique, it is remarked tha� "administrative mea­ banks when we have the World Bank"-a continual com­ sures, such as selective taxes or conbtOls on capital transac­ plaint from some of the European governments, particularly tions, are an ineffective and very costly means to attempt to the British during the entire course of negotiations around limit exchange market volatility. Sincp it would be impracti­ such a bank that have been held throughout this year. cal to implement such controls across geographic areas and But the commitment of the President to this particular financial instruments, they would mqrely shift the location project outweighed objections from some of the apologists of activity or the financial vehicle forthe transactions."

EIR June 23, 1995 Economicl; 5 In fact, the bank was already bankrupt and was forced either to shut down or be bailed out by Procapte, the Tempo­ rary Capitalization Program which the government uses to artificially keep other Mexican banks afloat.Somehow , the Mexicanprivate banking government stepped in through Fobaproa, which became the down second largest shareholder. It is rumored that the Madariaga system is melting Lomeli group was left with 4% of the stocks and he was by Carlos Cota Meza kept on as president of the institution, only in order to not dismantle the bankers' association. The government's purchase of non-performing debt has In an EIR Feature, "Mexico's Debt Bomb Explodes; Who raised a flurry ofprot ests, to which the chairman of the Na­ Will Follow?" this author established that the immediate ef­ tional Banking and Stock Commission, Eduardo Fernandez, fect of the Mexican government's insolvency would be "the responded: "If the conditions of high interest rates and other disappearance of the national private banking sector, with macroeconomic elements were to lead to a situation in the the potential for a chain reaction of bankruptcies." future in which this debt suffered losses, the damage would "The Mexican banking system now faces the condition now not affectthe shareholders, but the owner of the debt, in of being at once insolvent creditors and delinquent debtors. this case Fobaproa." . . . The foreign debt of the banking sector went in one If the government is subsidizing the bankers this way, year from $20 billion to $25 billion (a 25% increase) .... because it considers them victims of the "effects of the cri­ According to statistics of the National Banking Commission, sis," why not deal the same way with the millions of debtors Mexico's private banks are currently facing external pay­ in the farming, manufacturing, and commercial sectors? ments of $8.7 billion on loans which their internationalcredi­ Could it be that they are considered to blame for the crisis tors do not want either to renew or to renegotiate. In sum, the and therefore the Interior Department wants to make them Mexican private banking system, privatized only 30 months pay the debts by police-state methods, in order to keep sup­ ago, is in absolute bankruptcy. All that is missing is the porting the bankers? official announcement." (See EIR, Vol. 22, No. 5, Jan. 27, Fobaproa and Procapte have already turnedinto a bottom­ 1995, "Mexico's Financial Crisis: Metastasis of a Specula­ less barrel. Insofar as information is known, of the 18 banks tive Cancer," pp. 24-25.) still officially in existence, six have turnedfor bailouts to Pro­ The reason the banks are going bust, is not the devalua­ capte (Inverlat, Confia, Serfin� Banorie, Bital, and Bancen), tion of the peso but the unrestrained practice of incurring but the amounts used have not been made public. The Bank short-term external debt; the speculative investment of the of Mexico reports that up to the firstquarter of this year,Foba­ stock market in its own issues, a practically unlimited re­ proa had intervened in four banks (Uni6n and Cremi, both course to self-lending; and the huge cuts taken by middle­ owned by the fugitive banker Carlos Cabal Peniche; Banpais men, which have worsened the common debtor's non-per­ of Angel Rodriguez, another fugitive; and Banco Obrero , forming debt. which belongs to the big labor confederation, CTM). The bankruptcy of the Mexican banks is so evident that The amount of capital used in these interventions is 12.3 even the president of the Association of Mexican Bankers billion new pesos (to which the 4.6 billion new pesosused in (ABM), Jose Madariaga Lomeli, is no longer a banker, but Probursa would have to be added). In addition, Fobaproa an employee of the Banco Bilbao Vizcaya, a Spanish entity, granted $3.8 billion to the banks to pay their overdue foreign which took controlof the Probursa Financial Group (its bank, debt in the first quarter, mainly that contracted for issuing its stock brokerage, and subsidiaries and affiliates) on May certificates of deposit abroad. 29 for $350 million! According to these limited figures, in just five months The Mexican government, via the Banking Fund for Pro­ Mexico's government has dpled out to the banks 39,706 tection of Savings (Fobaproa, comparable to the U.S. Federal million new pesos ($6.619 billion) and yet the banks keep Deposit Insurance Corp.) acquired the bank's "bad debt" for right on collapsing. On Jan. 26, the Finance Secretary asked 4.6 billion new pesos, or about $800million , which amounts the lower house of Mexico's Congress to cut the budget by to one-third of the present debt holdings of the Probursa bank. 20 billion new pesos, or the equivalent of 1.3% of Gross Madariaga Lomeli explained the reasons for the merger Domestic Product. What has been given to the banks already of the first privatized bank, four years ago, with a foreign adds up to 2.5% of GDP. This figure will keep rising. The bank: "The operation does imply an enormous sacrifice for Inverlat, Serfin,Ba nco Mexicano, and Bital banks (three of the present stockholders ....We directly set aside 1 billion them already bailed out by Procapte) are in line to be absorbed new pesos as reserves and we ended up with 200 million in by foreign banks, because the latter are demanding that the capital. . . . Either we had to move ahead or we would have government "clean up its debt holdings" as happened with come to a screeching halt." Probursa.

6 Economics EIR June 23, 1995 Since the government at the moment shows no sign of wanting to change its financial fundamentalism, in the com­ urre ing weeks we will see even more banks going belly-up, and C ncy Rates like the Probursa bankruptcy, this will be extremely costly for the Mexican treasury. The dollar in deutschemarks New York late afternoonfixing Major firms will be unable to pay Right behind the banks in line for bankruptcy are the 1.70 Mexican companies which had "access" to the international 1.60 capital market. The external debt of these companies, be­ tween 1993 and 1994 , grew by 100% and went from $15 1.50 million to $3 1 million. Various reports establish that 12 of , - the 55 top companies on the Mexican Stock Market in the 1.40 I/' 1\. next six months will have to meet payments of $1. 284 billion, - --- """"" mainly in the so-called Mexican Eurobonds and commercial 1.30 paper. Among these, the standouts are: the airline Aeromexi­ 411':1 4Il6 513 5110 Sll1 5131 co, currently restructuring external liabilities which it could The dollar in yen not pay in February; Sidek, which suspended payments in New York late afternoonfixing March; Cemex, whose suspension of payments is deemed imminent; as well as Synkro, Iusacell (cellular phones), and 120 Cydsa of the Monterrey Group.

Stock market analysts maintain that if they don't find no sufficient backing, the stock values of these companies will plunge more than 50% or to minimum values, which could 100 cause their shares to be suspended from listing on the stock , market, provoking a new collapse in the Mexican Stock !III Market. � !Ill -- "---' But 1995 is the easy year for these companies. Between 411':1 4Il6 513 5110 5111 5124 5131 6fT 1996 and 1999, the companies that issued external obliga­ tions have to pay around $8.3 billion in Mexican Eurobonds, The British pound in dollars with a whopping $4 .145 billion concentrated in 1998. And New York late afternoon fixing who knows if they will get through 1995! Beyond this, a banking corruption scandal is about to 1.80 explode. The 12 "representative" companies are also in debt for the second quarter to the national banks for 5 billion new 1.70 pesos ($1 billion), which they do not consider debt, because 1.60 in one way or another, they were partners in the purchase of � - the privatized banks. Rather, they were self-loans-precisely 1.50 the corrupt practice for which the banks were nationalized in 1982. lAO The advisory service EI Inversionista Mexicano ("The 411':1 4Il6 513 SIlO SlI7' 5131 6fT Mexican Investor"), in an exhaustive analysis of the first­ The dollar in Swiss francs quarter reports of 54 Mexican Stock Market firms, shows New York late afternoon fixing that they report a short-term internal bank debt of 54. 146 , billion new pesos ($8.357 billion), and that the same compa­ 1.50 nies paid 8 billion new pesos, or $1.333 million in interest in

the firstquarter. This reveals that the bulk of non-performing 1.40 , and related debt falls on these 50-odd "representative" com­ panies of the economic model of the former Salinas de Gortari 1.30 , government. Were the governmentto accede to a review and classification of non-performing debt, we would discover 1.10 1/ that the delinquency of the farmers as well as small and - - - medium-sized businesses and retailers would be an easily 1.10 r--' � manageable problem. 411':1 4Il6 513 5110 5117, 5/24 5131

EIR June 23, 1995 Ec onolll!fS a 7 Japan's banking crisis could, trigger global financial collapse by William Engdahl

Details are only beginning to surface in Japan of a banking for six months or more, as well as restructured loans to weak crisis which could well detonate a global systemic financial borrowers. But even this figure, equal to some 9% of the total crisis of titanic dimensions. On June 6, the Japanese Ministry Gross Domestic Product (GD�) of Japan, vastly understates of Finance revealed details of total loan losses of all Japanese the reality, according to infonned banking analysts. Yukiko banks, which they now admit to be "approximately" $471 Ohara of UBS Securities Ltd. calculates that actual problem billion. This figure, which according to informed accounts loans could reach as high as 100 trillion yen, that is, $1.15 vastly understates the problem, already puts the Japanese trillion, a sum equal to one-quarter of the GDP of the world's bank crisis at a scale far beyond the 1980s crisis of U. S. second largest industrial natioQ. savings and loan institutions, and orders of magnitude be­ According to a number of Japanese financialsource s, this yond the recent losses of France's Credit Lyonnais. higher figure of $1.15 trillion in bad debts is realistic. "The On June 8, the Ministry of Finance also unveiled a long­ Ministry of Finance and Bank of Japan figures deliberately awaited proposal for dealing with the bank crisis, but the understate the problem so as not to cause panic," according details, which were few, did not reassure anyone. The pro­ to one such report. Banks have been allowed to extend "cos­ posal called for better bank disclosure of bad loans-present metic" loans to many insolvent clients, only those compa­ rules are extraordinarily liberal, meaning accurate estimates nies, often real estate construction companies, can in tum of the damage are almost impossible to formulate. A second use the new loans to make interest payments on their old proposal was to increase the now tiny bank deposit insurance loans. Of course, bank loans to problem companies merely fund through a levy on the banks themselves, which the banks increase as a result, even if the banks can pretend the loans argue they cannot do in their present difficulties. No Japanese are still good. This perverse example of "throwing good bank has been allowed to fail in the past 50 years, but this money afterba d," has turned what may have been a manage­ would presumably pave the way for some failures to be ad­ able bank problem of 1990 into what today is threatening to mitted. What was conspicuously absent were any proposals become a global systemic breakdown. for a U.S.-style Resolution Trust Corp. , in which the govern­ The net result of this dangerous practice has been that, ment would step in to assure liquidity while the bad debts are despite the deflating of the huge Japan real estate and stock disposed of. Failure to include this provision led to near­ speCUlation bubble more than five years ago, Japanese banks panic selling of Japanese stocks and the collapse of the Nikkei today are in far worse condition than they were in 1990. This Dow to the dangerous low of 14,600by June 13. is the element which is beginning to create alarm in banking "Japan's banking problems outweigh all else now in the circles from Europe to New York. global financial domain as a focus of systemic concern," emphasized S.J. Lewis, a senior City of London financial A world-class financial bubble figure. "This is the real 'Tokyo earthquake' doomsday sce­ The size of the Japanese financial structure is so great nario. If Japanese banks now begin to admit and write off that, were a full-scale banking crisis to erupt, it would deto­ their actual bad loans , it could well start a snowball effect of nate a domino-style series of financial liquidations which every bank rushing to dump bad debts, a process which could would be felt around the world. well pull the entire system down with no government safety Nine of the world's ten largest banks in asset size are net in place. This is one reason the Nikkei stock market has Japanese. The three largest each has assets of more than $500 been so weak in the past days. " billion, dwarfing every major European bank and even the For a nation renowned in the West as the epitome of large New York banks. Only Mitsubishi Bank has felt strong organized action and coordinated industrial efficiency, the enough to begin to write off most of its bad loans. All the disclosure of bank bad loans marks the first official Japanese rest are left holding a growing pile of uncollectable debt. government estimate of bank losses in a crisis that is now Technically, almost the entire Japanese banking system is five years old. The $471 billion figure includes all loans to bankrupt-liabilities far in excess of assets and income. The firms now bankrupt, loans on which no interest has been paid political issue is whether the Japanese taxpayer now will be

8 .. E.conomics EIR June 23, 1995 forced to pay the bill for bailing out those banks or the prob­ for consumer purchases, in short, the entire economy had lem will be allowed to grow to the point that it is fully out of tied itself to the soaring prices of land and stocks by 1989. control. Further, the added 25% drop of the Nikkei this year alone, During the 1980s, as the yen began its rise fo llowing has severely impaired bank earnings by wiping out much of the October 1985 Plaza Accord of the Group of Seven (an banks' so-called "hidden assets" in long-term stock shares in agreement to stop the rising dollar) , Japanese banks began to other companies which were badly needed to offset losses reap the rewards of a 60% appreciation in the yen. As their from the old bad loans on real estate,and other speculations international lending was done in dollars, and their bank of the past decade. In a vicious circle, much of that Nikkei balance sheets were calculated in yen, their paper profits and fall came from desperate Japanese banks selling their stocks assets exploded. to cover bad loan writeoffs. This in turn has forced Japanese In addition, Japanese banks, alone of all major banks in insurance companies to dump their stocks, further fuelling the Organization for Economic Cooperation and Develop­ the Nikkei fall. ment, count their stock holdings as part of their core bank capital. Most OECD bank regulators regard stocks as far The other shoe to drop too speculative for such purposes. During the 1980s, as the For most of the past two years, while U.S. and European Nikkei Dow seemed to rise with no limit, Japanese banks' financial structures have been rocked by a series of crises capital base for further lending grew with it to dangerous (from theMetallgesellsc haft derivatives debacle in Germany heights. This sudden explosion of paper "riches" in the end and Spain's Banesto Bank failure in December 1993, to the turned out to be a curse. bond market crisis in February 1994, to the Orange County, Japanese banks gloried in overtaking Citicorp to become California derivatives collapse and Mexico's peso crisis in the world's "largest" banks. Compounding the problem, as December 1994, and, more recently, to the dollar crisis), Japanese industrial exports stagnated or fell under the pres­ little attention has been paid to the fragility of the Japanese sure of the more expensive yen in the late 1980s, many financial structure. With the latest admissions from the Japa­ Japanese firms like Toyota turned, from industrial expansion nese government, that is beginning to change rapidly. into what Japanese called "Zaitech," or financial engi­ In a lead editorial on June 1, the Wall Street Journal neering-that is, speculation on international currencies, wrote , "Today's Japan is not the economic powerhouse that stocks, interest rate moves, or real estate. All Japanese busi­ gripped the conventional wisdom five years ago. Instead, ness was caught up in the fever of financial speculation to a it is the most fragile member of an interdependent world degree not witnessed even in the United States of the 1980s. economy." They warn about "any economic implosion in By 1989, Japan had created a speculative bubble of gar­ Japan and the shock waves this would send through the world gantuan proportions. Banks and companies' assets were economy." mainly cross-holdings of other companies' stock shares. As By the early 1990s, Japanese b�nks and investors held the banks were floodedwith new money from the speculative the largest share of bank loans in America's largest state, bubble, they poured a portion into the Tokyo Nikkei Stock California, of nearly 40%. Japanese investors recently were Exchange. The Nikkei Dow index rose that year to an all­ forced to declare Chapter 11 bankruptcy on their ownership time high of 38,916 yen by December 1989. The total value of a major New York office complex, Rockefeller Center, of all stocks traded in Tokyo at that point was near to $5 further depressing weak New York real estate prices. Japa­ trillion, making Tokyo the largest stock market in the world, nese investors and the Bank of Japan are estimated to be the larger even than New York. largest single foreign holders of U.S. Treasury bonds and When the new governor of the Bank of Japan, Yasushi bills. Were the Japanese to liquidate those Treasury securi­ Mieno, took office in December 1989, he was alarmed that ties, it would collapse the U.S. bond market, forcing U.S. the runaway speculative frenzy in stocks and real estate, interest rates through the roof, and those of Europe with termed the "bubble economy" in Japan, threatened to col­ it. For more than a decade, Japanese banks and investment lapse and bring down with it the entire Japanese industrial institutions had been the largest souree of foreign capital for economy. To control that danger, Mieno began a series of much of the world. calculated interest rate rises aimed at "slowly deflating" the At this point, Japanese authoriti4s are estimated to have stock and land prices. till Sept. 30 to come up with a convincing resolution of the It was anything but slow and painless, as the Nikkei bank crisis. That is when Japanese iCompanies must report crashed to 18,000 from 39,000 in only a few months. Real semi-annual profit results. If this haSi not materialized, there estate firms, construction companies, and others became in­ will erupt a full-blownJapanese bankingcr isis and a continu­ solvent overnight.Japanese industry went into a deep reces­ ing stock market fall. In that case,! the growing Japanese sion which today threatens to become a major depression. bank crisis could very well be the detonator to a new, global Rising stock and land prices were used during the bubble system-wide crisis of the form which Lyndon LaRouche fore­ years as backing or collateral for corporate new investment, cast in June 1994.

EIR June 23, 1995 EconomiCs 9 The Third World's biological holocaust canbe stopped by Carol Hugunln

Today we are seeing a biological holocaust in Africa, and, "For HIV transmission in d�eloping countries to be sub­ increasingly, also in Asia: starvation, epidemics of human stantially reduced," wrote Dr. Lurie, "economic policiesthat immuno-deficiency virus (HIV), which causes acquired im­ may have promoted disease spread must be modified. . . . mune deficiency syndrome (AIDS); cholera, malaria, tuber­ First, the satisfaction of basic Ihuman needs such as food, culosis, and the gruesome and deadly Ebola hemorrhagic housing, and transport must become a primary goal. . . . virus in Zaire. These diseases are fostered by the level of Finally, the charters of the IMF and World Bank must be austerity forced on developing countries by the International altered to permit the cancellation or rescheduling of debt." Monetary Fund (IMF) and World Bank. At the same time, Dr. Lurie further proposes thatlthe IMF and World Bank be new research shows that easily cured nutritional deficiencies, forced to issue AIDS impact reports with their loan propos­ such as a lack of vitamin A or selenium, could be a major als, taking direct responsibility for the impact of their pol­ factor in some of the worst-affected countries. icies. The situation generated by IMF-dictated economic poli­ The World Bank found thi!! criticism so painful, that its cies is so insane that even the academic world, normally well officials wrote two letters to the editor of the London-based insulated from economic and political issues, is forced to AIDS journal, protesting that tJte publication of this article take notice. In the May 18 issue of AIDSmagazine , Dr. Peter was "unacceptable," "ignorant," and "extraordinarily na­ Lurie of the University of California, San Francisco, laid the ive." Reached by Reuters to comment on the World Bank's blame for the AIDS epidemic right where it belongs: with the reaction to his paper, Dr. Lurie: said it was "classical institu­ structural adjustment programs (austerity) forced on devel­ tional defensiveness," and that they should "take a more oping countries by the IMF and World Bank in order for honest look at what it is their programs might have caused these countries to get loans. in these developing countries ,I and revamp their programs These structural adjustment programs increase poverty, accordingly. " unemployment, and force decreases in government spending In the case of AIDS, professionals were initially claiming on health, education, and social welfare . They destroy ag­ that it was primarily a homosexual disease, yet Dr. Mark ricultural self-sufficiency, forcing the import of expensive Whiteside in Belle Glade, Florida found very high prevalence food , and tear down developing industries, forcing citizens of AIDS among migrant workers, and others have clearly into unemployment. A marginalized population is then leftto found a very high prevalence among Africans subject to tre­ prostitution and drug trafficking. And these changes have mendous poverty . In 1978, Dr. i John Grauerholz of EIR pro­ been forced on developing countries at precisely the time that posed that economic breakdown creates successive waves they can least afford them. By the year 2000, it is expected of viral , bacterial, and parasitic disease which weaken the that 90% of all manifestations of HIV will have occurred in immune system, leaving impoverished populations exceed­ developing countries. HIV spreads rapidly among prostitutes , ingly vulnerable to diseases like AIDS. intravenous drug users, and in conditions of poor nutrition, Now scientific experiment$ are beginning to rigorously and where syringes and similar equipment are reused due to document that there are certail1 key nutrients necessary for lack of available medical supplies, forced by budget cuts. the body to maintain its immune system defenses. Scientists What Dr. Lurie is explaining about the relationship of the are documenting that for just ipennies a day per person in malthusian policies of the IMF and World Bank and the nutritional supplements, pandemics like AIDS could be dras­ spread of HIV is exactly what Lyndon LaRouche predicted tically slowed down. A series of recent experiments has in 1974 would occur: Malthusian policies would foster the shown that anti-oxidants (such las vitamin A, vitamin E, and resurgence and spread of old diseases, as well as the develop­ selenium) play a crucial role in enabling the immune system ment of new ones. to fightviral diseases, including HIV.

Itl Beonomics EIR June 23, 1995 Mutant Coxsackie and Keshan's disease A group of scientists led by Melinda Beck, M.D., at the Keshan Disease and Kaschin-Beck Disease, University of North Carolina, has discovered that a common, correlated with the belt of sellenium-deficient. relatively harmless virus can mutate to a virulent heart­ food grains in China damaging fonn in mice that have poor diets. The virus used was Coxsackie, a ribonucleic acid (RNA) virus which hu­ mans experience as a common childhood disease. The mice suffered deficiencies in selenium (Se) and/or vitamin A. The very virulent mutant fonnleads to Keshan's disease, a weak­ ened heart muscle condition that ends in heart failure, which is found in an area of China where grains are selenium­ deficient, and which, until recently, crippled thousands of women and children through a broad belt of China. Now the Chinese government uses nutritional supplements that include selenium to protect these people from the disease. A report on this work was published in the May issue of Nature Medicine. Coxsackie virus, like HIV and influenza, is a single­ strand RNA virus, which means that it lacks the capacity to correct mistakes which occur during replication; hence, like these other RNA viruses, it mutates rapidly as it reproduces itself. Dr. Beck's experiments created shock in the medical � Marginal or Deficient selenium food grains community for two reasons. This is the first time that nutri­ Keshan and/or Kaschin-Beck Disease tional deficiencies in the host have been documented to en­ � gender more virulent viral mutations. It is also the firstdocu­ mentation that, once mutated, the virus can inflict the same damage on mice fed a diet adequate in selenium and vitamin A. Some scientists have speculated that maybe the reason the HIV transmission and vitamin A deficiency more virulent fonn of Coxsackie virus hasn't swept around Dr. Richard Semba, of Johns Hqpkins School of Medi­ the world, killing countless humans with heart failure, is that cine in Baltimore, has published a series of papers linking since the more virulent fonn of Coxsackie virus is still a vitamin A deficiencyto transmission of HIV frommother to single-strand RNA virus, it mutates back to a less lethal fonn infant. His team studied 567 HIV-i mlected pregnant women just as readily as it mutated to that more lethal fonn. in a hospital in Blantyre, Malawi. Nearly 70% of thesewom­ Dr. Beck noted in her paper the broad ramifications of en were vitamin A deficient, one of tile highest rates of vita­ her team's work: "If our findings with Coxsackie virus are min A deficiency in the world. The: women with the most generalizable to other RNA viruses, perhaps they can explain severe vitamin A deficiencyhad a 32% chance of transmitting the steady emergence of new strains of influenza virus in HIV to their newborns,compared with a 7% chance among China, which has widespread Se-deficient areas. Our find­ those who had no vitamin A deficiency. Some 93% of the ings might even help to explain the crossing over of certain infants born to mothers with the most severe vitamin A defi­ viruses to a new host species through accelerated mutation ciency died of AIDS in the first year of life. rates. For example, the crossingover of HIV to humans may have been facilitated by the existence of Se-poor regions in Vitamin E and murine AIDS, Africa." A group lead by Dr. Ronald Watson at the University This is the trend that LaRouche hypothesized in 1974, of Arizona has done large-scale experimentation on mice, when he said that malthusian economic policies would create indicating that vitamin E slows the progression of HIV to conditions that act as a Petri dish, breeding new and more clinical AIDS. The mice get murine AIDS, which is clinical­ virulent fonns of disease, which would spread out of their ly similar to human AIDS, and the�ore is frequently used place of origin to the entire world. for laboratory research. Very preliminary unpUblished clini­ Dr. Beck's group hypothesizes that selenium and vitamin cal trials in Europe indicate thatsupplementing HIV-positive A, both being anti-oxidants, help maintain the ability of the patients with vitamin A, vitamin E, selenium, andother anti­ immune system to fightinfection. Neither selenium nor vita­ oxidants seems to prolong the periodin which the HIV virus min A, however, should be taken in large doses, since both remains in the donnantphase , blockill1gdevelopment of full­ become toxic at high doses. blown clinical AIDS.

EIR June 23, 1995 Economic� \ 1· Selenium and RNA virus dormancy The crucial role anti-oxidants play in enhancing the abili­ ty of the immune system to function normally, may not be the only way selenium deters RNA viruses from causing 'Shock therapy' yields disease in humans. Will Taylor, Ph .D., a scientist at the CIS University of Georgia, is developing evidence that many food crisis in RNA viruses, including HIV, Coxsackie, and possibly Ebola by Rosa Tennenbaum'and virus, have a gene for a selenium-protein. This selenium­ . MarCia MerryBa ker protein keeps the virus in a dormant, non-reproducing phase, much like zinc-rich proteins; the so-called zinc fingers wrap around deoxyribonucleic acid (DNA), in humans, control­ The month of May, which should be the high point of spring ling what DNA is expressed and what remains dormant. planting in the Eurasian farmlands of the former Soviet bloc, This allows RNA viruses like HIV to quietly hide for years instead this year marked a new:low in declining agricultural within the human host's cells. Under certain conditions of potential and per capita food consumption in the Community immune system and or nutritional stress, these viruses will of Independent States (CIS). Russian State Duma (Parlia­ suddenly start reproducing, and possibly mutating like ment) Economic Policy Committee Chairman Sergei Glazy­ crazy. ev, writing in Nezavisimaya Gazeta on May 11, asked, "The Dr. Taylor's hypothesis provides an excellent description President and the parliamentary opposition sat by while sci­ of what is clinically observed in the progression from a long ence-intensive industry was liquidated in 1994. Will they dormant HIV-positive status to full-blown AIDS. It is well be as calm in the face of the bankruptcy of our domestic known that HIV uses precisely this strategy, hiding in white agriculture?" A European Union delegation to farm regions blood cells for years, to evade an immune response from its in CIS republics in May called the situation "depressing" in human host. According to Dr. Taylor, some human immune severity, and gave accounts of desperate food shortages to cells also have large selenium needs for normal immune the June 6 issue of Agra-Europe. functions. So, under conditions of selenium deficiency, the The recent years of shock therapy economics and the HIV virus can no longer make the selenium protein which "reform" looting of all vital sta�s of national food systems­ keeps it from reproducing and mutating rapidly. And, the water, land, and transport infrastructure, farm inputs, farm immune cells lack the selenium protein ammunition they operations, and food processing and distribution-have re­ need for proper immune function. Hence, one observes a sulted in a full-scale food crisis.: A year ago, an EIR statistical typical clinical pattern of rapid shift from a lengthy HIV­ feature report warnedof these consequences ("ShockThera­ positive phase, in which selenium levels in the blood are py Ravages Russia's Food Production," by Robert Bakerand adequate and no signs of AIDS are present, to an AIDS Paul Gallagher, EIR March 18. 1995 , pp. 18-33). phase of rapidly dropping selenium levels and rapid clinical As of mid-May, the Agriculture Ministry in Moscow deterioration, in which the immune system is increasingly calculated that equipment, spare parts, and fuel existed in less capable of fightingHIV . amounts sufficient only to cult.vate at most 30 million hect­ In studying the area in Africa where AIDS was first ares out of the 71 million hecttrres in Russia that should be thought to have emerged, medical teams found low selenium planted to crops. Not even one-fourth of the national farm blood levels in the tiny town of Karawa, and the somewhat equipment inventory was in working order because of the larger town of Businga in northernZaire . These towns are in lack of parts and fuel. The same situation exists elsewhere. the Mongala River watershed area, associated with the small­ As of late May, in Kyrgyzstan, spring planting wasfar be­ er Libala and Ebola rivers-the same general area in which hind, with little more than half the land planted. Every third the Ebola virus first emerged. That whole area of northern tractor and planting machine was sitting in a repair shop, and Zaire is medically known as a thyroid goiter belt. Since sele­ farms had no means to pay for repair bills. One-third of the nium is required for iodine to be properly utilized by the trucks, which play a vital role on the farms in this region, were thyroid gland to form crucial thyroid hormones, the presence out of commission because thert is no money for gasoline. of goiters throughout this area is further evidence of human However, even if the machinery fleetwere miraculously selenium deficiency. mobilized, the lack of quality seeds and farm chemicals Although these areas need further medical research, they would jeopardize the crops. Over the seven-year period point to a simple reality: If the political will is there to reverse 1987-94, annual tonnage of fe:rtilizer applied in Russia fell the current global economic policy, developing countries by 90%, dropping from 14.2 million tons in 1987, to 1.4 could quite quickly be provided with nutritional supplements million tons last year. As of this April, in 52 out of 89 that would curtail the spread of some of the world's most administrative regions, farms did not purchase one single ton deadly diseases, while long-term industrial development pol­ of fertilizer for use this season, because of a lack of funds. icies are put into place to transform Africa and Asia. Only one-fourth of the area planted in Russia was fertilized

11 Economics EIR June 23, 1995 in 1994. On average, in all of the CIS, only 25% of the grain process cannot be sustained through (:ven this year. acreage is being fertilized. The Russian fertilizer industry is In Tajikistan, Georgia, and Arm�nia, less than 100kilo­ producing way below 50% of capacity, and if companies grams of grain were reaped per capi� in the last harvest. At want to stay in production at all, they are forced by the the same time, these countries no lo!ger have any means at "reform mafia" to export fertilizers, for example potash, on hand to pay for grain imports . As of F�bruaryof this year, the the world market at prices that are far too low. The conse­ United States had pledged a donation <)f133 ,000tons of wheat quences are reduced cropyields and degraded soils. to Armenia, and 37,000 tons to Georgia. Azerbaijan has ap­ The livestock sector shows the same ravages. Without pealed to international relief organizations for food aid. means to feed and support the national meat herd, farms have The food supply of Moscow itself is heavily dependent eliminated millions of animals. Radio Moscow reported on on foreign imports, because of the breakdown of agriculture May 25 that 18 million cows have been lost in Russia during in Russia. About 80% of the food forthe city of Moscow is shock therapy, and there is an urgent need for milk-powder imported, as is 60% of the food for tJte surrounding region. imports. However, milk-powder prices have gone up from Meantime, farms in adj acent Kalinin, Ryazan, and Bryansk $600 a ton to $2,400per ton. are unable to produce and market their potential output. The loss of beef and milk cattle is most dramatic in the Russia's sugar supply has turned iintoa national security centers of meat and milk production-Russia, Ukraine, and issue. According to a memorandumlto the Duma (national Kazakhstan. Last year, the number of beef cattle fell by parliament) in May, the governmen�'s decision to stop im­ 10.3% in Russia, and is expected to fall another 12.7% this porting raw cane sugar fromCu ba, andto import white sugar year. The number of milk cows fell 6% in 1994, and is from the West (whose sources are clominated by London­ expected to drop 7.6% this year. Hog numbers dropped financier commodities processors sllch as Archer Daniels 12.6% last year, and are falling at a 13.4% rate so far this Midland), means catastrophe for b<)th Russian sugar beet year. Sheep and goat numbers fell 17% last year, and are growers and Russian sugar processots. Compared to a con­ falling at the annual rate of 17% right now. sumption demand of 5 million tons of sugar per year, last National meat production in Russia dropped by almost year only 1.7 million tons were produced in Russia. Parlia­ 40% over the past two years. These declines have caused mentarians fear that Russia will be f.,rced to seek 5 million crises in the food-processing sector. In Belarus and Moldova, tons of white sugar a year from the West. output of meat products went down by 20% from first-quarter 1994 to the same time in 1995. In Russia and Uzbekistan, the drop was 30%; and in Kazakhstan, 50%.

Farm sector drained This devastation in the farm and processing sector shows up in both financialstatistics and "on the table." The president of the Academy of Agriculture Science, Gennadi Romanen­ ko, calculated in May that the disparity between industrial and farm commodity prices sucked roughly $33.5 billion out of the Russian farm sector in the last three years . As a result, consumption per capita is falling below the minimum necessary for millions throughout the CIS repub­ lics. According to the Russian State Committee for Statistics, meat consumption per capita fell from 69 kg in 1991, to 57 kg in 1994, in contrast to 1989, when it was still 75 kg. Moscow economists estimate that 10% of Russian citizens' food intake is at or below the biological survival level , and that this percentage could easily rise to 30% by year's end. Overall, grain production in the CIS fell by 19.8% in just one year, 1993-94. This represents an absolute drop in the 1994 harvests in 9 of the 12 republics, because cultivation was reduced due to a lack of machines, fertilizers , fuel, and other inputs. In only two republics, Turkmenistan and Kyrgyzstan, did the grain harvest in 1994 rise as compared with the previous year. The reason for the rise was because the area planted was increased, while average yields per hectare fell by 16% due to lack of essential inputs. This

EIR June 23, 1995 Economics 13 tor of the standard of living of tlile country's population. The method of estimating the population's standard of living by calculating the cost of a "minimum biological market basket" is based on a calculation of the cost of 17 basic types of Armenia's President products (nonnative monthly consumption) and minimum transportationcosts , as shown in Table 1. This is to be distin­ deludes his countrymen guished from the minimum consumer market basket, which by Vigen Akopyan also takes into account a person's monthly expenditures on clothing, basic services, and other necessities. Besides the aforementioned,list of products and transport The author is a member of Armenia's Union of Constitutional services, the table includes the average exchange rate of the Rights. dollar (in drams) for the month, and the extent to which the cost of the "minimum biological market basket" is defrayed Speaking at a session of Annenia's Parliament, Annenian by the state-established minimum wage each month. President Levon Ter-Petrossian announced that "in 1994 the The table includes the datil for four months of 1994: growth of wages surpassed the growth of consumer prices. " January, as the starting (base) month of the year, and the last He said that in 1994, average monthly wages of state sector three months of the year, since the data for precisely these workers reached 4,000 drams, which in October 1994 was three months were cited in President Ter-Petrossian' s speech. approximately $10.40. By promulgating these data, Presi­ Moreover, it was in December 1994, on the recommendation dent Ter-Petrossian wanted to convince his own nation and of the international financialorganization s, that breadprices the world that tendencies for improvement of the popula­ were raised in Annenia, which could not fail to affect the tion's life have been observed in Annenia. standard of living of the country's people in December as Only a criterion such as the "minimum biological market well as partially in November (the factor of the expectation basket," and the state's establishment of a minimum wage of inflation came into play). sufficientfor its purchase, can be seen as an objective indica- It is clear that the so-called minimum wage in Annenia

TABLE 1 Cost of Armenia's 'minimum biological market basket' (in drams, 1994)

Jan. Oct. Nov. Dec. Unit Price of Unit Price of Unit Priceof Unit Priceof Product price norm price norm price norm price norm

Bread 1.5 15 6 60 6 60 66 660 Macaroni 26 13 130 65 160 80 200 1 00 Sugar 75 1 50 250 500 270 540 Meat 250 1,250 700 3500 700 3,500 700 3,500 Fish 30 60 300 600 300 600 200 400 Milk 20 220 200 1,100 150 1,650 Cottage cheese 54 27 720 350 760 380 440 Sour cream 60 30 500 250 550 275 540 270 Cheese 350 350 800 800 900 900 1,000 1,000 Eggs 360 240 580 990 660 1,800 1,200 Potatoes 20 280 80 720 100 900 100 900 Vegetables 10 220 200 2,200 250 2,750 100 1,100

Jan. Oct. Nov. Dec.

Dollar exchange rate (drams) 106 406 450 426 Minimum wage (drams) 110 230 230 375 Percent defrayment of "minimum 3.15% 1.61% 1.44% 2.3% biological market basket" by minimum wage

14 Economics EIR June 23, 1995 FIGURE 1 FIGURE 2 Cost of 'minimum biological market basket' Percent of 'minimum biologijcal market basket' in Armenia defrayed by wages I (U.S $) 35% $40 30% 35 25% 30 20% 25 20 15% 15 10 Minimum wages 5% 5 / O% l=:;�==���������� o J F M A M J A SON D Month Month

FIGURE 3 is purely symbolic, and its level is in no way economically Average wages fall shortof paying for grounded. The minimum wage did not change significantly 'minimum biological market - basket' in the course of the whole year (the lowest level, $0.418, was (drams) reached in May, and the maximum, in January, was $1.037). 18.000 Minim� biological As Figure 1 shows, even in April, the month most favorable market:basket 16.000 for the population, when the cost of the "minimum basket" was $24.95, the cost of the "basket" was simply beyond 14.000 comparison with the minimum wage, which was too low to 12.000 be drawn on the same graph. Yet, the very purpose of a 10.000 minimum wage is to satisfy the minimum, if even just biolog­ 8.000 ical requirements for a person. 6.000 The cost of the "basket," however, fluctuatedsubstantial­ 4.000 ly, from $24.95 in April to $38.19 in December. An even 2.000 sharper rise in the cost of the "basket" was registered in 0 September-December-exactly the period President Ter­ J FMAMJJIASOND

Petrossian considers the most successful. In these three Month months alone, the cost of the "basket" rose by $10.49, while the minimum wage increased only by $0.43. Thus it becomes course of the year this indicator vacillated between 1 and 2%. apparent, that the relative stability registered from July to Commentary is simply superftuous.iThe graph also shows September (basically connected with seasonally low prices the defraymentof the "minimum basket" by the average wage for fruits and vegetables) was replaced at the end of the year for each month of the year. by a sharp increase of the cost of the "market basket. " The highest indicator, recorded in September, was President Ter-Petrossian in his speech announced that 32.29%. Thus 67.71% of the minimum biological require­ the rise in the price of bread had not worsened the already ments either were not satisfied, or the sources for their de­ catastrophic situation of the people; but the figures prove the frayment were not recorded and are'unclear. Of course, if reverse. Considering that in October the average wage in the compared with the first half-year, "successes" are apparent. state sector of the economy was $10.90 (according to data But even 32.29% of the defrayment of minimum require­ of the statistical directorate of Armenia) , and that after the ments, against the backdrop of the hal{-yearof existence, can­ increase in bread prices, the cost of the "basket" increased not be the basis for reports of victory � especially since in the by $2.79 (or 25.59% of the average wage), it is simply mean­ months that followed, even this 32.29% was not maintained. ingless to talk about a stable standard of living. Despite the fact that the average wage in the state sector Figure 2 shows that the minimum wage's defrayment of increased (Figure 3), nonetheless it always was catastrophi­ the cost of a "minimum basket" in this country is simply a cally compared to what is required !pr satisfying minimum fiction. The "basket's" cost was defrayed to the greatest ex­ consumption requirements. In the firrst months of 1995, the tent at the beginning of the year (only 3.15%), and in the cost of this minimum rose once again.

EIR June 23, 1995 EconomiaS: �S BusinessBrief s

Germany strong creativity, he said. "China's modern­ Central Bank Governor Paul Ogwuma, both ization must mainly rely on our own efforts. of whom are "free-marketeers," according to Railways will not follow . . . [This is the] fundamental support for Reuters. , had British on privatization China's modernization drive." "My cOIhmittee membersfeel we have Technological progressis the only way for enough of tMF-Worid Bank intervention in China to achieve powerand progress, he said. our econo� ," Aluko said. "Unless we put a Gennany'srailways will not follow British rail "Overconsumption of natural resources and check to th4ir further intervention, they will into the lethal trap of privatization, Deutsche sacrificing the biological environment can not leave u� until our people go rioting, loot­ Bahn (national railway) Chainnan Heinz only yield temporary success." High-technol­ ing, vandaliZing, or go to communal warwith Duerr told the Swiss financial daily Neue ogy development should focuson renovating one another," ZUrcher Zeitung on June 6. Duerrharshly de­ traditional industries, developing high-tech­ Aluko blamed Ani and Ogwuma for nounced privatization experts at the Kiel nology products, and upgrading agricultural allowing the naira (the Nigerian currency) to World Economic Institute, one of the tbink­ technologies. Heightened awareness of sci­ bedevalued; in Januaryafter it was battered by tanks of the "Conservative Revolution" cur­ ence and technology, especiallyamong deci­ the IMF-World Bank-backed adjustment rent in Gennany. sion-makers, is decisive for modernizing drive from !1986 on. "In 1995, in one fell The Kiel Institute has criticized Duerr's China, Song said. Reforms should focus on swoop,bo11lofyou succumbed to and colluded concept of railway restructuring as "merely establishing an "open, flexible, competitive, with the IMf-World Bank and pressuredthis formal," and because it does not include an and cooperative" researchenvironment. administraqoninto devaluing the naira to80- "intra-modalelement of competition." Duerr, Vice PrimeMinister Li Lanqing said in his 82 to $1. � consequence of that single act is in tum, charged the Kiel expertswith "incom­ speech closing the conferencethat ministries to completely pauperizeour citizens andcrimi­ petence," emphasizing that it was never his in­ and localgovernments must set specific goals nalize them and virtually stop any production tention in hisreform proposal to createa "capi­ and take concrete measures tohelpthe national activity." He said the international agencies talist enterprise" or free market-oriented economy develop through science and tech­ have acted $oreas debt collectorsforthe West framework for transportation policies. The nology. than developers of economies. railway had to fulfillanational-economic func­ OnMay 6, the Chinese Communist Party Aluko �aid that in the upcoming period, tion, Duerr said. "It is an exception iftranspor­ Central Committee and the State Council the two agehcies would make more demands tation policyis organizedalong methodsof the reached a decision to implement the strategy on Nigeria such as further devaluation of the free market." of invigorating Chinathrough scienceandedu­ nairaand aniincreasein fuelprices , as a precon­ Automation and the use of modem infor­ cation. They released a 4O-article document dition for tlteir approval . mation technologies would beenhanced by the on May 21, stating, "Science and technology Gennan railway reforms, Duerr said. He re­ are the most important productive forces be­ jectedthe British-style modelof privatization, hind economic and social development, and which will split up British Rail into several aredecisive factors for achieving prosperity in Italy entities. He forecast the end of theBritish rail­ China ." way sector as a whole, should that policy BuDd ibfrastructure prevail . for jobs, leader says Nigeria RoccoBun !glione, secretarygeneral of one of China IMF policy only offers Italy's two ItalianPopular Parties(PPI) , called for changes in government budget policy in unrest, official warns Scientists called upon order to promote large-scale infrastructure projects to ¢reatejobs , in a cornmentaryin the to be more creative Sam Aluko, chainnan ofthe National Eco­ daily Avvenire on June 5. nomic IntelligenceCommittee, a government The ppt split last spring when themajority Chinese State Council member Song Jian, agency, said that Nigeria will face riots and of its natioki council voted against Buttigli­ chainnan of the Science and Technology chaos unless it rejects the economic prescrip­ one and in flavorof supportingRomano Prodi, Commission, called on Chinese scientists to tions of the International Monetary Fund who was backedby speculatorGeorge Soros, become more creative, during the National (lMF) andthe World Bank, the Nigerian news­ in thenext general elections. Buttiglione's fac­ Science and Technology Conference in paperVanguardreported on June 7,according tion, whic� could keep the symbol of the old Beijing on May 26-30, China Daily reported. to Reuters. Aluko, who was interviewed in Christian Democracy, is tactically allied with China's policy is to strengthencooperation in EIR (see July 29, 1994 issue, p. 34), de­ the"moder itte"partie s, ForzaItaiia(Go Italy!) scientificfields, and China can only have equal nounced the financialdictatorship of the IMF and Nationhl Alliance. exchanges and cooperation on the basis of in a letterto Finance Minister Anthony Ani and Italy's infrastructure deficit has been cal-

16 ·Economics EIR June 23, 1995 I ! Bfildly

• CAXTON Corp., a Rothschild­ tied New YOIjk investment firm, has thrown up it� hands and shrunk its assets under �anagement by about two-thirds, rdtuming $1.3 billion to culated to be over $300 billion, Buttiglione are met with hostility wherever they go," he investors. It :had earned profits of pointed out, yet,"in past years, Stateexpendi­ said. about 30% a ear during its first 12 tures have beencut by hitting, aboveall, fund­ The Financial Times acknowledged, � years, but ran�ed from a I % profit to ing for new infrastructure. It is necessary that "Ghana has endured more than a decade of a 2.3% loss lal;tyear, the June 9 Wall with the new budget law, such a tendency be IMF and World Bank belt-tightening but civ­ Street Journal reported. inverted and we go back to investing in the il servants and other workers say they have future of the country . We need to improve, little to show for their sacrifices. " • THE WtST VIRGINIA Su­ enlarge, modernizeour roadnetwork, our pat­ Reuters reported that a May II march or­ preme Court (In June 5 overturned a rimony of ports and airports . We must improve ganized in Accra by the opposition Alliance decisiorrby IQrnawha County Circuit and strengthen water and energy distribution for Change ended in violence. Five people Judge Andre� MacQueen, that Mor­ networks,and restructureour railways by add­ died in clashes with government supporters gan Stanley Imd Co.' had violated ing high-speed and high-capacity lines. These who openedfire on protesters. Other protests state laws bafting speculation, and are all productive investments that pay back passed off peacefully. Traders have also op­ sent the case !:jackfor a jury trial. The their costs and together improvethe efficiency posed the new tax, saying that it was proving firm was the �tate' s financial adviser of our economic system and the citizens ' quali­ bad for business. when the stat� lost $32 million trad­ ty of life." ing U.S. Treal;ury bonds in 1987. Unfortunately, Buttiglione proposes to finance the projects by contributions from the • CANADIAN National railroad is EuropeanUnion; "private investors," who will being restructPred for sale, Associat­ begiven a concession to exploit the infrastruc­ ed Press rep

EIR June 23, 1995 Economics 17 TIillFeature

Three drugbus ts prove Dope, Inc. can be defeated by Jeffrey Steinberg

In a series of stunning developments since the beginning of June, the Clinton administration, working in coordination with patriotic Ibero-American forces, has demonstrated that the internationaldrug cartel-which Lyndon LaRouche in 1978 labeled Dope, Inc.-can be decisively defeated. • On June 5, 1995, the U.S. Justice DepartmeQt unsealed a 161-page indict­ ment against the entire leadership of the so-called Cali Cartel-including four former U.S. Justice Department prosecutors and two other Florida lawyers. The indictment provided the most detailed profile ever presented by the federal govern­ ment of how the internationaldrug mafiaoperates an underground "parallelecono­ my," managed and abetted by the highest-level officials of the offshore banking industry, leading figures in the legal profession, and other "citizens above suspi­ cion." The Cali Cartel, according to the papers, smuggled nearly 300 tons of cocaine into the United States over the past decade; siphoning trillions of dollars out of the U.S. economy. • Four days later, U. S. Drug Enforcement Administration andCentral Intelli­ gence Agency personnel aided Colombian special police units in a raid on a Cali, Colombia apartment of Gilberto Rodriguez Orejuela, capturing the cartel boss as he cowered in a bedroom closet. For years, the top leadership of the carteloperated in the open, secure in the fact that they controlled the streets of Cali and enjoyed the protection of the corrupt George Bush apparatus in the United States, and of the British-centered Club of the Isles. (For a dossier on the secretive Club of Isles, see EIR , Oct. 28, 1994, "The Coming Fall of the House of Windsor.") • The same day that Rodriguez Orejuela was being captured in Colombia, the Cuban governmentannounced the arrest of fugitive narco-financierRobert Vesco , and offered to extradite him to the United States. DUring his 23 years on the lam, Vesco---afro ntman for the Rothschild apparatus and the Club ofthe Isles-created the Caribbean dope-smuggling and money-laundering infrastructure for Dope, Inc. and then integrated both the Sandinista and Castro regimes into the narco-

18 Feature EIR June 23, 1995 A raid on a drug cartel hideout in 1985, during Peru's Operation Condor, in which Peru's law enforcement authorities joinedfo rces with their U.S. counterparts. Today, the bigger fishare getting caught. web. This Vesco-created infrastructure not only bankrolled u.S. financial and political instituti ns were drawn in and every narco-terrorist gang in Ibero-America; it simultane­ corrupted by the growing clout of thel harco-dollar, culminat­ ously financed the Contra apparatus of George Bush, Oliver ing in the alliance between the Geo ge Bush faction of the North , Richard Secord, et al. U.S. government and the Colombian drug cartels in what was mislabeled the Iran-Contra Aff�ir. This was no mere Clinton versus the Club of the Isles affair; it was a full-blown marriage! What has made these victories possible, is the Clinton administration's "war and a half' with the British Crown and What next? the Club of the Isles. That war, which has been fought out These bold moves by the Clint· n administration now with increasing intensity in recent months on many fronts mean that there is no turning back. Having clobbered the around the world, has freed the Clinton administration from British apparatus on its weakest flank the administration can the shackles of the Anglo-American "special relationship" and must move forward . and made it possible for some administration policymakers to A road map for what to do next as sketched out back in see the world from the vantage point of the 200-year struggle March 1985 by Lyndon LaRouche in a speech before a between American. republicanism and British oligarchism. conference in Mexico City. LaRouche presented a 15-point The international narcotics trade is Britain's Achilles' war plan for defeating Britain's Dop I, Inc. apparatus here in heel. As the authors of EIR's bestselling book Dope, Inc.: the Western Hemisphere. The LaRouche plan called for the Britain's Opium War Against the U.S. first wrote in 1978, marshalling of all of the high-tech re�ources available to the the British Crown created the modem internationaldrug trade U.S. government and its allies to take out the drug barons in the late eighteenth century, and has run it-top down­ where they can be hurt the most-in their pocketbooks. ever since. The anti-drug initiatives taken by the Clinton administra­ With the deregulation and disintegration of the interna­ tion have already done serious damage to Britain's Dope, tional financial system of the last 30 years, the power of the Inc., and have put some of the most corrupt Bush-league offshore "underground economy"-the drug economy-has elements within the government burraucracy on notice that grown astronomically. Today, it is a trillion-dollar-a-year their days may be numbered. To helP our readers compre­ enterprise, and an integral part of the out-of-control specula­ hend the significance of these moves, we assemble here a tive bubble. background dossier, much of it drawb from material that we Increasingly, during the narco-bonanza of the 1980s, have published over the past 17 year .

EIR June 23, 1995 Feature 19 Honduras by a local firm, Pue� de Castilla, and filledwith cocaine, to Port Everglades, florida, where it was picked up by Valencia Import and Export qo. Indictmentaga inst The transport of Cali Carte� cocaine across the United States was done in trucks purcltased by cartel automobile the Cali Cartel dealerships and sold to buyers �sing phony names and ad­ dresses. Other cartel export-import firms specialized in col­ by Jeffrey Steinberg lecting and shipping back to Colombia the vast cash proceeds from the cocaine sales.

The 161-page indictment of the Cali Cartel hierarchy, un­ The lawyers were the caws sealed in Miami, florida on June 5, 1995, provides the most While the cartel indictment 4etails one case of murderof detailed profile ever assembled of the inner workings of the a confidential government infor$ant, the document makes it world's biggest dope-trafficking organization. clear that the enforcers for thel cartel's U.S. organization According to the indictment, the Cali organization set up were for the most part high-priqed lawyers, usually former 31 businesses in Colombia, Venezuela, Honduras, Guatema­ federal or state prosecutors. The bIost notorious was Michael la, Mexico, Panama, and florida that, between 1986 and Abbell, who served for 17 years in the Departmentof Justice, 1993, smuggled over 124,000 kilos-a quarter of a million and during the Reagan-Bush aclIministration was the chief pounds-of purecocaine into the United States. The cartel­ of the Office of International �ffairs, responsible for the owned companies included airlines, import-export agencies, extradition of big time dope smu�glers. food processing firms, auto dealerships, wood product manu­ The indictment charges that �bbell, his law partnerFran­ facturing plants, janitorial service companies, coffee and cisco Laguna, ex-federal pros�cutors Joel Rosenthal and vegetable plantations, and engineering firmsthat specialized Donald Ferguson, and ex-flori�a state prosecutor William in the construction of security vaults for the storage of guns, Moran, all served as in-house dounsel for Cali Cartel boss drugs, and cash. Miguel Rodriguez Orejuela. On his behalf, they delivered The government figures of the scope of the Cali Cartel's death threats and bribery offers to cartel managers and em­ operations are , if anything, an understatement, based on the ployees who were captured by A.merican authorities, laun­ documentation seized in recent raids on the offices of top dered drug money, and extorted false evidence eXCUlpating cartel managers, like Harold Ackerman, who handled a size­ Rodriguez Orejuela from involvement in the captured drug able portion of the Colombians' money laundering. The in­ shipments. The attorneys are also charged with obtaining dictment, nevertheless, provides an in-depth profile of the confidential government information, including details of cartel's modus operandi. For example: pending grand jury indictments: and the identities of confi­ In Guatemala, a Cali Cartel front company called Xela dential governmentinformants and witnesses, and of facili­ produced frozen broccoli, packaged it along with cocaine tating the escape of cartel opera1ives under indictment. smuggled in from Colombia through Panama, and shipped it These are not the actions of over-zealous defense law­ to Miami. There, three other cartel frontcompani es, National yers, Deputy AttorneyGeneral Jamie Gorelick noted, in an­ Food Distributors, Palmetto InternationalFoo ds, and South­ nouncing the indictment. "These attorneys are charged with east Agrotrade, separated out the cocaine, disposed of the conduct aimed at corrupting the legal system for the benefit vegetables, and distributed the drugs to the Cali Cartel's vast of one . . . of the largest drug.trafficking organizations in wholesale marketing apparatus in florida, New York, and the world." Texas. Between 1986 and April 1992, the indictment charges, 65,000 kilos of cocaine were smuggled into the EIR was right United States through this route. Ten years before the grand jury indictment was unsealed, Beginning in 1990, a Venezuelan company, Tranca, be­ the second edition of EIR ' s bestselling book Dope, Inc. high­ gan manufacturing cement fence posts filled with cocaine, lighted many key facets of the drug cartel operations now and shipping them to cartel frontsin Miami. In Miami, cartel corroborated with the Miami prosecution-including the role manager Jorge Lozano supervised the breaking down of the that Venezuela's ex-President Carlos Andres Perez and the posts and the initial distribution of the cocaine, via truck Cisneros banking family played in the cartel's operations; route to Longview, Texas, where the cartel maintained a the role of prominent American attorneysas cartelprotectors regional distribution network. Between 1990 and 1991 alone, and financial advisers; and the role that corrupt U . S. govern­ this route smuggled 50,000 kilos of cocaine into the United ment officials played in preveqting any real crackdown. If States. federal prosecutors follow the Dope, Inc. example, the next A third smuggling route identified in the indictment in­ superceding indictments should include some prominent volved the shipment of hollowed lumber, manufactured in American and Ibero-American bankers.

20 Feature EIR June 23, 1995 Colombia's Samper hits Cali Cartel, but negotiates with 'Third Cartel' by Javier Almario

"I feel like someone 's taken a piano off my shoulders," said dent CesarGaviria and of Emesto Sarnper had favored the Colombian President ErnestoSamper Pizano on June 9, upon drug trade . The Clinton administrationdiplomatically disas­ learningthat Cali Cartelkingpin Gilberto Rodriguez Orejuela sociated itself fromToft 's charges� but never rebutted them. had been captured in a National Police dragnet. The Cali Sarnperwas in desperate need 0f aU.S. seal of approval Cartelis a criminal organization that produces and transports on his Presidency. State Departmep.t officials on several oc­ an estimated 80% of the cocaine consumed in the United casions had told him in private, an4 occasionally in public as i States, along with substantial and growing percentages of well, that "we aren't interested in . the past; what matters is marijuana and heroin. Samper told the press that "this is the that we see results. " beginning of the end of the Cali Cartel. " In February, U.S. Ambassador to Colombia Myles While Samper's enthusiasm is motivated not by any inter­ Frechette announced that the U. S. Congress would not certi­ est in ending the drug trade, but rather in protecting his own fy Colombia for effective action in the war on drugs. This skin, the fact remains that the capture of Rodriguez Orejuela would have meant depriving the countryof preferentialtariffs is a major victory in the war on drugs. and other benefits given to Andean countries fightingdru gs. The police had raided an apparently modest home in a As theresult of President Clinton's intervention, the U.S. middle-class section of the southwest city of Cali. There, Congressfinally certified Colombia, but with the clarification hidden behind a false wall, was the multi-billionaire Gilberto that it was certifying the country, not the Sarnper gov­ Rodriguez Orejuela. Hidden elsewhere in the house were ernment. documents, including intelligence reports and other detailed In May of this year, U.S. Assistant Secretaryof State for information, on cartel payments to various individuals and Narcotics Matters Robert Gelbard,got into a fight with the companies. Among the documents were proof that the traf­ Samper government because he was demanding the capture fickers had paid substantial sums of money to buy a constitu­ of the Cali Cartel bosses. "We Americansare pragmatic, and tional ban on extradition from the 1991 Constituent As­ we like to see action. We want to !lee arrests," said Gelbard sembly. during a trip to Colombia, when journalists asked him to National and international pressure on Colombia's gov­ evaluate Colombia's fightagainst drugs . Gelbard set a dead­ ernment to produce results in the war on drugs had been line of May 1996 for the kind of "action" the U.S. govern­ dramatic since before Samper assumed the Presidency last ment was demanding. summer, when the existence of taped conversations by Cali But domestic pressure was also ,significant. In July 1994, Cartel chiefs Gilberto and Miguel Rodriguez Orejuela was Alfonso Valdivieso Sarmiento was harnedto the postof pros­ revealed. On those tapes, the cartel bosses discussed multi­ ecutor general. A cousin of the political leader Luis Carlos million-dollar sums given to Samper Pizano's presidential Galan who was assassinated by the eartelin 1989, Valdivieso campaign. Samper took office on Aug. 7, 1994, after win­ reopenedvarious investigations that his predecessorde Greiff ning by a margin of less than 2% of the vote. had prematurely closed, and moved full stearn ahead on an In July, while still President-elect, Samper was hastily investigation into cartel corruptionof political figures. Every clearedby then-Prosecutor General Gustavo de Greiff, today day, new lists of individuals who, had taken cartel money the Colombian ambassador to Mexico. De Greiffs nomina­ began to appear in the press: congressmen, sports leaders, tion to the latter post is widely viewed as a political payoff ex-governors, movie stars, U.S. lawyers like Michael Ab­ for having exonerated the President. In October, U.S. Drug bell. Even the current Comptroll¢r General and Attorney Enforcement Administration (DEA) chief in Colombia Jo­ General ! seph Toftcaused a scandal when he accompanied his resigna­ Samper's only chance at a political future lay in proving tion with charges that the governmentsof both former Presi- that he bears no allegiance to the! Cali Cartel. In a recent

EIR June 23, 1995 Feature 21 against Rodriguez to try him fo r homicide, which would mean many more years in jail I even though it is common knowledge that Rodriguez donated money to a fund put to­ gether by the cartels to financb the 1984 assassination of then-J ustice Minister Rodrigo lara Bonilla, and the 1986 assassination of El Espectador dewspaper director Guillermo Cano Isaza. The success of the ColomlilianI authorities in capturing Rodriguez Orejuela has led the �ast majority of Colombians to hope that if it is possible t defeat the Cali Cartel "su­ permen," it should be equally !fssible to mobilize an effec­ tive response to the F ARC and tlLNnarco- terrorists, and that instead of dialogue and negotiations with them, they should be defeated in battle, just as Perbvian President AlbertoFu ji­ I mori did with Shining Path and the' MRTA narco-guerrillas. Unfortunately, just as the:J has been international pres­ sure--especially from the Clintpn administration-to say no to a deal with the Cali Cartel, so there has been international pressure in fa vor of peace talks with the "Third Cartel," the F ARC and ELN. The main l essure is coming from the human rights non-government I organizations (NGOs), the one-worldist apparatus of the a ited Nations, and those ele­ ments inside the U. S. State Department which supportth em, whose intention is to use a ne�otiated deal with the narco­ The drug cartels' legacy in Colombia: The headquarters of the terrorists as a weapon against the Colombian Armed Forc­ Department of SecurityAdministration in Bogota was bombed in es-a tactic already being purkued in Mexico, Argentina, 1989. Brazil, Guatemala, and elsewh�re. The other decisive factor th t has favored the drugtrade meeting with top military and police personnel, Samper an­ in Colombia has been the fre trade policies adopted-re­ nounced that he would remove from their commands any moving tariffs on imports, a etaomplete opening to foreign officer who did not produce results in the war against drugs. capital, privatization of stateco panies, and the entire pack­ He set a deadline of Aug. 7 to see some action, the firstyear age which has come to be knorn as neo-liberal economics. anniversary of his government. The DEA, for example, has issued several reports complain­ When Samper learned of Rodriguez Orejuela's capture, ing that free-trade economic po icies "favor the drugtrade ," he held an impromptu party at the Presidential Casa de the "laundering of drug mone�," and the buy-up of state Narino, displaying a euphoria which many described as exag­ sector companies by the drug drtels. gerated, since Rodriguez has been neither triednor convicted But to the international finahcial interests who are deter- I yet. Another problem Samper has yet to face, is that his mined not to let Colombia's �uge oil reserves and other government remains committed, at all cost, to effecting a wealth escape them, drugs and terrorism are not an obstacle. negotiated peace agreement with the narco-terrorist F ARC If anything, they can serve as a eapon to be used to pressure and ELN guerrillas, who are described in military intelli­ the governmentinto greater concessions. For example, it was gence reports as Colombia's third cocaine cartel. no accident that in the mid- 198bs, the late Armand Hammer So far, the prosecutor's office has announced that it has had a public alliance with the narco-terrorist ELN, whose evidence and an effective case against Rodriguez for drug constant sabotage attacks on theI facilities of Colombia's oil trafficking, illicit enrichment, bribery, and illegal arms pos­ monopoly Ecopetrol permitted �reater inroads for Hammer's session. In Colombia, the maximum sentence for such crimes Occidental Petroleum and British Petroleum. is 30 years , and the sentences are served concurrently. If Indeed, during an early Jun� 1995 visit to Colombia by a Rodriguez confesses to any of the crimes, gets time off for British trade mission, Her Maje�ty's Trade SecretaryRicha rd good behavior, or works and studies while in prison, he could Needham insisted that drugs add violence were no obstacles get as little as nine years . Samper would have to amend the whatsoever to British investorL Asked to comment on the 1991 Constitution in order to permit major drug traffickers negative reactions to these pro lems by "other countries"­ like Rodriguez to get sentences "proportional to the crimes" a reference to Clinton administ I ation pressures on Colombia committed, as the Clinton administration has urged. to crack down on the cartels- eedham responded, "That's Thus far, Prosecutor Valdivieso has no absolute evidence their problem, isn't it?"

22 Feature EIR June 23, 1995 Will RobertVe sco spill thebe ans on Dope, Inc.?

by Richard Freeman and Jeffrey Steinberg

On June 9, officials of the Cuban government infonned the of All-American Engineering, a Delawarecompany that was Clinton administration that they had arrested fugitive Ameri­ ostensibly a subsidiary of the DuPont Chemical conglomer­ can financier and accused drug kingpin Robert Vesco, and ate, but was actually a grooming wound for future covert asked whether the United States was interested in Vesco's intelligence operators. extradition. Immediately, U.S. officials began dusting off In New York in the early 1960sj where he was working extradition papers against Vesco that dated back to the mid- as a "financial consultant," Vesco 'was picked up by Dr. 1970s, when he fled the country after looting the Investors Benjamin Payne, a financialadviser tothe Rothschild family, Overseas Service (lOS) mutual fund of over $270 million. In one of the most important financier houses of the Club of 1989, Vesco was indicted as a kingpin of the Medellin Cartel. the Isles. Through Payne, Vesco wl$ introduced to Georges The extradition offer has spread panic among some of the Karlweis, the managing director of 8aron Edmond de Roth­ leading financialcircles in the City of London and the Swiss schild's Geneva merchant bank Banque Privee. In 1965, cantons, at the New York City headquarters of the Anti­ Karlweis provided Vesco with a "loan" that enabled the De­ Defamation League (ADL) of B 'nai B'rith, and within the troit Kid to buy a small New Jersey defense-aerospace finn, political inner circle of fonnerPresident George Bush. Captive Seal, merging it with a smaU, already debt-strapped Remember Joe Valachi, the 1960s "Mafia-made man" company that he had set up called International Controls who turned on the Crime Syndicate and delivered damning Corp. (ICC). (Two years later, Katlweis would provide a inside infonnation before televised congressional hearings? similar startup capital fund to speculJitorGeorge Soros.) Well, move over Joe! If Robert Vesco comes back to the Over the next three years, Vesco j with the financialback­ United States and begins spilling the beans, he can bring ing of Baron de Rothschild, would buy up a stringof defense down the Club of the Isles' entire offshore dirty-money oper­ industries, "asset-strip" them to pay! off handsome profits to ation, and thereby cripple the international dope cartel. Ves­ Banque Privee, build up an inflatedi portfolio of ICC stock, co is potentially the Club of the Isles' worst nightmare-their and end up with a capital pool of over $40 million. Along the very own "Joe Valachi." way, Vesco was introduced to the B�on, dining at his home Long before he washed up on the shores of Cuba to in Switzerland on several occasions.1 teach Fidel Castro the fine art of money laundering and drug The Rothschild-Vesco alliance !Was fitting. In the first smuggling, Vesco was sponsored, bankrolled, and deployed decades of the nineteenth century, the Rothschilds had won by the very highest levels of the London-centered Club of the the favor of the British Crown by rupning gold- and contra­ Isles, the $10 trillion oligarchical cartel headed by Queen band-smuggling operations that deffiated Napoleon's block- Elizabeth II and her royal consort, Philip Mountbatten. ade of England. i Robert Vesco is living proof that the Club of the Isles and Via his Rothschild connection,i Vesco was also intro­ the House of Windsor run organized crime-including the duced to Henry Buhl III, an heir to the General Motors for­ nearly trillion-dollar-a-year illegal dope trade-on a world­ tune, and a board member of IOS. SQon lOS's subsidiarylIT wide scale. was swimming in ICC stock, and Velsco was becoming even wealthier. The Rothschilds had pill-Ilted the seeds for the Baron Edmond and the Detroit Kid takeover, looting, and reincarnationof lOS. Robert Vesco was born in Detroit, Michigan in 1936, i the son of an Italian immigrant auto worker. Although he Enter the ADL and Meyer Lpnsky dropped out of high school, he developed skills as a drafts­ From the very beginning, in 195�, lOS was a front-opera­ man that complemented his talents as a super-salesman and tion for the Meyer Lansky organize4 crime syndicate, spon­ hustler. Sources involved in the highest echelons of U.S. sored ostensibly by the New York CitjyDreyfus Fund. Taking intelligence during the late 1950s place Vesco in the employ advantage of Swiss bank-secrecy laws, minimal disclosure

EIR June 23, 1995 Feature 23 requirements for mutual funds in most countries, and the large U.S. corporations, including Chrysler and Penn porous Canadian oversight of non-resident corporations, lOS Central. founder Bernie Cornfeld, who had worked for B 'nai B'rith Out of the Paris meeting came the Vesco takeover of lOS. in the 1950s, gradually built up a global army of "salesmen" It began with Vesco's purchase of the entire bloc of lOS who traversed internationalborders carrying satchels of cash stock that had been just grabbed by Riklis. Riklis had beena to Geneva's Banque du Credit International. BCI was headed surrogatefor the Rothschild-Vesco shakeup of lOS from the by Tibor Rosenbaum, an intimate of British intelligence's outset. I Maj. Louis MortimerBloomfield , the head of the Montreal­ The takeover cost Vesco ab�olutely nothing. He agreed based Permindex front-company implicated in the assassina­ tion of President John Kennedy and the failed efforts to kill President Charles de Gaulle. Rosenbaum's Swiss bank was staffed by top officials of the Lansky crime syndicate , such as Sylvain Ferdman and John Pullman. By 1970, the burgeoning international drug trade, the How Vesco set up offshore gambling business, and other Lansky "growth in­ the Medellin �el dustries" had outstripped the labor-intensive money-laun­ deringmethods pioneeredby Cornfeldand crew. At its peak, lOS had launderedmany millions of dollars a week in flight In 1971, Robert Vesco fled the United States to set up capital and crime revenue. But everything was about to shop in the Bahamas and Costa Rica. He had a new assign­ change. ment: to direct the founding of a cocaine "cartel," organiz­ Despite its sleazy clientele, lOS was a class outfit, count­ ing the disparate operations,of traffickers into an inte­ ing among its directors GM's Buhl; Sir Eric Wyndham grated, Americas-wide "industry," operating under White, KCMG, a former director general of the General centralized production, transport, distribution, financing, Agreement on Tariffs and Trade (GAIT); Count Carl Johan and protection. The results transformed the Western Bernadotte, youngest son of the late king of Sweden; Martin Hemisphere into the greatest drug production region in the Montague Brooke, senior partnerin the London investment world, a region bled by marauding narco-terroristarmi es. bank Guiness Mahon & Co.; and James Roosevelt. The Media stories that Vesco joined Colombia's Carlos French branch of the Rothschild banking empire headed its Lehder and Cuba's Fidel Castro in the dope trade some­ stock-underwritingsyndicate. where along the way, invert reality. In threecentral areas , So, when it came time to break up and redeploy the lOS Vesco played a critical role in creating the MedelHn and cash pool, it was the Rothschild-Club of the Isles apparatus associated Cali cartels, as institutions: that handled the transition. • He picked up small-tiline Colombian thug and ex­ In early 1970, the lOS crisis was triggered by Buhl and convict, Lehder, providing him with the political protec­ Sir Eric White, when they leaked out apparently false infor­ tion and financialbacking he required to set up the cocaine mation that lOS's cash position was vastly inflated in the transport pipeline between Colombia and the United latest corporate report. This caused a run on lOS stock, which States; in turn triggered orders to many lOS regional managers to • He set up the cartel's first sophisticated money­ begin dumping their stock portfolios to generate quick cash. laundering schemes; and At a May 3, 1970 meeting at Cornfeld's Geneva mansion, • He brokered the provi$ion of political and military the lOS board was pressured by the Rothschild team to sell protection for spreading drug plantations across the re­ the company to an outside "rescue committee" that would gion, by Cuba-aligned terroristforc es-protection contin­ come up with badly needed cash. Already, Cornfeldhad sold ued today by the members of the Sao Paulo Forum. off a large bloc of preferred stock to Meshulim Riklis, a Turkish-born, but now Minneapolis-based frontman for the 'New instruments of hance' local grain cartels and for ADL official Burton Joseph. When he first fled the United States, Vesco found A month after the Geneva meeting, Banque Rothschild, assured protection in two Caribbean countries which had the Paris branch headed by Baron Guy de Rothschild, con­ long served as operations basts for the Meyer Lanskymob vened an emergency meeting attended by officialsfrom Bar­ and the "men above suspicion" which deployed it: the clays Bank, Hill Samuels, Chemical Bank, Bank of America, British Crown Colony and offshore banking center of the and other leading financial houses. The meeting had been Bahamas (whose prime minister, Lynden Pindling, was requested by top officials of the U.S. Treasury Department, in Lansky's hip pocket), and Costa Rica. who were alarmedthat the lOS crisis had caused a run on the Vesco went first to the Bahamas, and then in 1972, New York stock market and threatened to bankrupt several

24 Feature EIR June 23, 1995 to put in an initial cash infusion of $5 million, which he of Hill Samuels & Co.-who in tum alerted the Rothschilds obtained on loan from Butler Bank, a shady bank in the and Vesco. Bahamas with which he had had prior dealings. The Butler loan was collateralized by a $5 million deposit fromlOS . Poor Richard's folly How did the supposedly cash-strapped lOS come up with The blowout of lOS, orchestrated by the Rothschilds and the money to place on deposit with Butler? In reality, the lOS Hill Samuels to facilitate the takeover/restructuring of the funds were never drained. They were siphoned into a string money siphon, also served another far more strategic end of secret accounts , which were known to Sir Kenneth Keith from the standpoint of the Club of the Isles: the breakup of

moved to Costa Rica, where he lived until 1978, under When heat from the United States ran him out of the the personal protection of PresidentJose "Pepe" Figueres. Bahamas in 1981, Vesco began moving between the Brit­ From the time he first seized power in 1948 in a farcical ish colony of Antigua and Sandinista Nicaragua. By 1983, five-week"guerrilla war ," Figueres had run Costa Rica as however, he settled in Havana, Cuba. As an adjunct of a regional deployment center for the Caribbean Legion, a the dope trade, Vesco provided the Castro regime aid in Social Democratic political machine linked to the Lansky smuggling into Cuba high-technology goods banned by mob and backed by the Rockefeller and J. Peter Grace the U.S. embargo. interests. The Legion, using exiled communist fighters On Aug. 4, 1985, Castro made Cuba's protection of from the Spanish Civil War, trained various guerrilla op­ the cartel architect official. He told foreign reporters: "Is erations over the decades; its most famous operation was it just, that the country where people speak so much of its sponsorship of Castro's 1957 expedition back to Cuba human rights [the United States] ...goes after someone on the Granma. said to have evaded paying taxes?" He announced that he Figueres sent a letter in 1972 to President Richard had told Vesco, "If you want to live here, live here." Nixon, reportingthat Vesco "has been visiting Costa Rica From the outset of the Medellin cartel, Castro's most with a view to helping us establish some new instruments critical role in the transformation of the Americas into a of finance and economic development." Figueres pro­ drug empire has not beenthrough the extensive logistical moted Vesco's financial schemes-which included plans supportthe cartel has provided on the island of Cuba nor to tum the Caribbean and Central America into a "Hong­ the shipments allowed through Cuban territory. Rather it kong West"-arguing that this was vital for regional "de­ has been Cuban deployment of narco-terrorism, directing velopment." He wrote, "I am impressed by his ideas, allied terrorist forces in other Ibero-American countries, his group of business leaders, and the magnitude of the both to defend the drug trade and to assault government anticipated investments. He may provide the ingredient and politicalforc es seeking to suppress it. Today, despite that has been lacking in our plans to create, in the middle their protestations to the contrary, Cuba and its allies in of the Western Hemisphere, a showpiece of democratic the Sao Paulo Forum remain intensely involved in the development. " drug trade. The bestknown exemplars of Ouban-allied narco-ter­ Cuban bases rorism from the 1980s are Colombia's M-19 and Nicara­ When a new Costa Rican President took office in gua's Sandinistas. Lehder's alliance with the M-19 was 1978, he expelled Vesco, who returned to the Bahamas, publicly hailed by Lehder and M-19 leaders alike. The M- where he had already established operations. In 1977, 19's most devastating blow for the drug trade was the Lehder had begun setting up drug transshipment head­ 1985 seizure and destructionof Colombia's Justice Palace quarters on a small Bahamian island, Norman Cays, later and the resulting murder of 12 members of the Supreme owned in its entirety by Vesco and Lehder together. Lehd­ Court. Likewise, the Nicaraguan Sandinistas, whose er associates, turnedgovernment informa nts, later report­ 1978-79 "revolution" was financed,in partby Vesco part­ ed that Lehder considered Vesco a "financialgeni us," and ner Pepe Figueres, were in on the drug trade from the told them that Vesco was "schooling him in the use of beginning. Vesco was a frequent visitor in Nicaragua offshore banks to launder money," according to the book throughout the 1980s; U.S. governmentsources identified Kings o/ Cocaine, by Guy Gugliotta and JeffLeon (1989). Vesco as the boss of Federico Vaughn, the ex-vice minis­ Lehder also bragged that it was Vesco who had introduced ter of the interior filmed by DEAundercover agents in him to both Bahamian Prime Minister Pindling and 1984 loading cocaine on a plane waiting at a Nicaraguan Castro. military air base.-Gretchen Small

EIR June 23, 1995 Feature 25 Britain's Dope, Inc. is under attack

House of Windsor Club of the Isles ; / i House of Mont Pelerin Society Margaret Thatcher � i Rothschild I Banque Privee / 'Georges Karlweis / "'- Bush Robert George Milton ADL apparatus Ve�co Soros Friedman / I DOJ Michael Asm ids Medellin and Cliba Abb � Cali cartels Castro DPF / DPF Dope ; Dope Lobby � Lobby I

Sandinistas, M-19, 'Narc- Shining Path, FARC-ELN, VContras' Sao Paulo Forum ,.

the postwarBretton Woods monetary system, the destruction the chairman of the Committee to Reelect the President of the Nixon Presidency (part of the Club's longstanding (CREEP), Vesco immediately contacted him and proposed commitment to destroy the United States as a sovereign na­ to sock $250,000 into the campaign. Stans told him thatsuch tion-state), and the creation of the biggest speculative finan­ a large contribution could onlly be legally made between cial bubble in history . March 6 and April 6, 1972, due to pending changes in the The lOS stock collapse caused tremors on all the world's campaign finance laws. Vesco !agreed, but stalled on deliv­ major stock markets. lOS had become a major player on Wall ering the cash until April 100four days after the new laws Street, at one point carrying out upwards of 25% of all the had gone into effect. daily trading on the New York Stock Exchange. When lOS Vesco then went around Washington indiscreetly de­ began dumping its portfolio to generate cash, the markets manding that the Nixon team, in returnfor the cash, intercede trembled, President Richard Nixon intervened by pressing to block a pending Securities . and Exchange Commission the Federal Reserve to hike interest rates, and the U.S. Trea­ (SEC) case against lOS from being referred to the Justice sury went, hat in hand, begging the Rothschilds to intervene Department. The upshot: Vesc�'s antics all came out during to prevent a market crash. the congressional WatergatePf(l)be , and Mitchell, Stans, and When the smoke cleared on the lOS-triggered market Vesco were indicted for attempted obstruction of the SEC panic, President Nixon was broken. He approved the Aug. investigation (Vesco had by this time fled the United States 15, 1971 decoupling of the dollar from the gold-backed, for good). fixedexchange rate system. Now in the driver's seat at lOS , Vesco began spreading Looting lOS around his new-found wealth. Througha New Jersey Repub­ In April 1972, Vesco began die systematic lootingof IOS lican Party crony, Vesco got an introduction to several of of all of its cash. This was by no means a one-man operation. President Nixon's top aides, including Attorney General Vesco was acting on behalf of his Rothschild sponsors, and John Mitchell and Commerce Secretary Maurice Stans. their subsidiary Lansky crime syndicate. When Stans left the Commerce post in early 1972 to become The dismantling of lOS was handled by lawyers from

26 Feature EIR June 23, 1995 the Wall Street finn of Willkie, Farr, and Gallagher, whose his own finn,Compagnie de Services Fiduciares SA (CSF) , managing partner, Kenneth Bialkin, was a top official of the to "give advice on fiscal , financial, judicial, and economic ADL, soon to become the League's national chainnan. A matters and [to] handle all financial goods of the customer," fonner Willkie, Farr lawyer and longtime Bialkin intimate, according to Swiss corporate filings. A decade later, CSF was Willard Zucker, was installed as lOS's in-house counsel fol­ swimming in business. Its prime client: the George Bush-run lowing the Vesco coup. and Oliver North- and Richard Secprd-managed Iran-Contra Details of the Willkie, Farrrole in the theft of over $270 "Enterprise." Zucker's CSF managed all of the CreditSuiss e million came out in the course of a federal civil suit, filed in 1980 in the Southern District of New York [74 Civ. 1980 (CES)], which named Vesco and Willkie, Farras defendants. Eventually, a jury ordered Willkie, Farr to pay over $30 million to investors who were robbed by the shutdown of FromVesco-lOS to lOS. Milken-Drexel How did Bialkin, Zucker, and the other Willkie, Farr Burnham lawyers carry out the grand larceny? Between April and De­ cember 1972, under Vesco's instructions, lOS liquidated lOS went out of existence in 1972-75, and during the over $220 million in blue chip stocks. The cash was funneled same years, Drexel Burnham Lambert was trans­ into a string of dummy companies that Vesco, via Willkie, fonned into the premier deal.making, money-laun­ Farr and others, had set up all over the Caribbean. The funds dering finn in the world, pioneering the junk bond were washed back and forth within a hennetically sealed mania of the 1980s, wreaking havoc on corporate network of these Vesco offshore banks and dummy compa­ America, and eventually sending its best-known trad­ nies. Ultimately, the emptied shells would declare bankrupt­ er, Michael Milken, off to fedefal prison. cy, thereby breaking the paper trail from lOS to the secreted The emergence of Drexel was part of the shakeout Vesco cash. The sums removed may have exceeded $1 bil­ of lOS, orchestrated by the Rotbschilds for the Club of lion. In 1969 alone, lOS had generated $500 million in cash the Isles. Drexel was lOS's lead investment bank and that had been funneledoff into secretaccounts . underwriter. lOS officials knew, from the inside, just In all these activities, Vesco was by no means the boss. how Cornfeld, and then Vesco, structured their global He was a well-paid employee. And, while large numbers of hot-money laundry. honest investors lost their shirts in the looting of lOS and in Drexel enjoyed thepersonal backing of Baron Ed­ the preceding stock market manipulations, the vast majority mond de Rothschild, who helped orchestrate protege of the "disappeared" cash consisted of the cash proceeds of Max Fisher's takeover of United Fruit Company in the Lansky syndicate's far-flung criminal enterprises. The 1975. Fisher, a Prohibition Era member of the Purple money would move on to bigger and better fonns of offshore Gang, in tum helpedbankroll Cincinnati businessman "creative" financing schemes, including the launching of the Carl Lindner, who became one of Drexel's primary Colombian cocaine and marijuana pipeline into America. frontmen in a series of insider takeovers of a string of Indicative of the Rothschild-Vesco-Lansky plans for the fu­ American companies. In this effort, Lindner was ture were two failed takeover bids that Vesco maneuvered joined by other Drexel "blue chip" clients, including with the cash he siphoned from lOS . First, he came a hair's Meshulim Riklis, the Minneapolis Anti-Defamation breadth away from successfullypurchasing Resorts Interna­ League (ADL) operator who helped insert Robert Ves­ tional, the Caribbean gambling enterprise that got started co into the driver's seat at lOS; New York City investor with construction loans from lOS. And a few months later, and Jacob Rothschild business partner Saul Steinberg; Vesco moved to take over the Beirut-based Intra Bank, owner Miami gangster Victor Posner; and hotel and media of the world's largest gambling casino, Club Leban. takeover artist Laurence Tisch. When, in the mid- 1980s, :the Drexel junk bond From lOS to Contragate bubble blew sky high, the finnwent under and Milken, Vesco and lOS disappeared from the Swiss landscape the Beverly Hills, California high-flying trader who before the end of 1973, but the network employed by Vesco's handled the accounts of all tbe above-cited clients, Rothschild and Club of the Isles' controllers remained in went off to jail. place, and went on to become involved in some fascinating Before his wings were cliwed, Milken tossed $1 and sleazy operations. million into the coffers of his favorite "charity," the Willard Zucker, the ex-Willkie, Farrattorney who played ADL, Robert Vesco's chief allies in the original lOS "Mr. Inside" in the looting of IOS , obviously knew that he'd scam. soon be out of a job, because in September 1971, he created

EIR June 23, 1995 Feature 27 The total of Soros largesse: $10.5 million. Soros provides funds Kevin Zeese, formerly the national director of the for drug legalization National Organization for the Reform of Marijuana Laws (NORML), now the DPF's vice president and counsel, bragged that the money would allow for massive expan­ The Drug Policy Foundation (DPF), America's leading sion on the part of DPF: "Programs may include support­ lobby for drug decriminalization, announced on July 8, ing and evaluating new ways to care for drug users, re­ 1994 that it would be receiving $10.5 million over the searching medicinal uses of prohibited drugs, assessing next three years from derivatives "king" George Soros. foreign drug decriminalization efforts and, in countries Soros was set up in business by the identical Rothschild­ that allow it, supporting drug maintenance for addicts." Club of the Isles apparatus as was Robert Vesco. Georges All these programs are simply a sideshow to help sell Karlweis, the right-hand man of Baron Edmund de Roth­ DPF's main agenda: global dope legalization by the schild, bankrolled Soros just a few years after he put year 2000. up the cash for Vesco's looting binge. The similarities Soros's feeble explanation f<)rthe funding is as outra­ between Vesco and Soros are striking. Both are high-paid geous as his actions: "I do not consider myself an expert hookers for Dope, Inc. on drug policy, but I do think we need a more open debate The Hungarian-bornspecula tor was already notorious and more humane policies in this country." for his generosity to the dope lobby, even prior to his Aryeh Neier, president ofSOf OS' s Open Society Fund, announced $10 million "gift." But he is now surpassing which is providing the money, has been even more blunt: all other benefactors from the financial world who find it "Soros doesn't think the drug war makes any sense from profitable to legalize mind-deadening drugs. an economic standpoint. There's an enormous crime prob­ According to Rolling Stone magazine, "In 1992, the lem that is attributable to drugs, there are vast numbers of same year Soros earnedover $650 million betting on for­ people in prison and people who are dependent on drugs." eign currency, he began funding DPF through his Open Neier, whose two pet projeats for Soros are the dope SocietyFund . Soros has contributedover $500,000so far legalization push and the "right to die," elaborated: "Both [thru May 1994] , and ...is ready to give much more." the concern with dying and the drug issue have this basic That "much more" has now been actualized as a $6 philosophical commitment. ...We want the dying to million pledge, $3 million for operational support and $3 gain greater control over the way in which they die and million for a grant program. Soros's grant through the we want persons involved in the drug culture, who are Open Society Fund, established in 1969 by Soros, must currently treated as objects of state action, to regain con­ be matched by other donors. trol over their own lives. "-Scott Thompson

accounts of Lake Resources, the Swiss money conduit for all war (1980-88). of the Reagan-Bush administration secret parallel intelli­ The head of the Swiss Rothschild bank nexus, Swiss gence operations. And, according to congressional investiga­ banker Alfred Hartmann, headed the Swiss branches of both tors and former American drug enforcement officials, it was BCCI and BNL, and served as the chief financial officerof Zucker's Swiss accounts into which the Medellin and Cali BCC Holding (Georges Karlweis remains on the board of cartels passed millions of dollars to assist their favorite "char­ both banks). An indication of the growth of the Club's off­ ity," the Contras. shore hot-money operations is that, when BCCI folded in the early 1990s aftera series of drug. money-laundering prosecu­ BCCI and BNL tions in the United States, an estimated $22 billion was miss­ During this same period, the Rothschild's Swiss incarna­ ing, and to this day remains unaccounted for. Club banker tions of Banque Privee, Banca Privata in Lugano SA, and Alfred Hartmann is probably the only man alive who knows Rothschild Bank AG of Zurich ran (from behind the scenes, the whereabouts of thosefund s. of course) the Swiss branches of two of the most notorious One of the first questions that prosecutors should ask financial institutions of the 1980s-the Bank of Credit and Robert Vesco-if theADL doesn't kill him first-is what he Commerce International (BCCI), and Banco Nazionale del knows about the BCCI-BNL-CSF booty. His knowledge of Lavoro (BNL). BCCI and BNL, apart from their involvement these more recent affairs may shock and scare some very in drug money-laundering and other black market antics, well-placed peoplein London, New York, and Geneva. And were pinned as two of the main sources of funding for mas­ a former President of the United States, now resident in the sive arms sales to both Iran and Iraq during their nine-year Houston area, may get the biggest shock of all.

28 Feature EIR June 23, 1995 government-under pressure frdm the Bush administra­ tion-is in the process of negotiati�g a virtual power-sharing arrangement with the cocaine cartels. With the cartels de Bush's legalization facto legalized, the de jure legalizaltionof their product is just around the comer." strategy set back And so, while President Bush pretendedto supporta "war on drugs," Colombia was depriv�d of the means to wage in Colombia such a war. Its most dedicated leaders were assassinated, its population demoralized, and its government eventually driven to pursue a "deal" with the,cartels. Meanwhile, hun­ by ValerieRush dreds of tons of narcotics were pouringinto the United States.

The arrestof Cali Cartel kingpin Gilberto Rodriguez Orejuela George Bush's duplicity in Colombia, and the indictments against Cali Cartel net­ The duplicity of the Bush adm�nistration in presenting its works inside the United States, have implications far beyond "War on Drugs" as a foreign policy success is astounding: the dismantling of a single South American criminal organi­ • While denouncing the blooidy narco-terrorism of the zation. The apparent determination of the Clinton administra­ so-called Medellfn Cartel, the Bu,Sh administration was se­ tion to reverse nearly two decades of inaction and/or outright cretly hiring that cartel's violent :elements to run a drugs­ betrayal of America's anti-drug commitments by taking ac­ for-guns supply operation to the anti-Sandinista Nicaraguan tion against the drug cartels is a direct slap in the face to "Contras." A July 1985 plan by the U.S. DrugEnforcement the Anglo-American financial interests which stood behind, Administration (DEA) to capture all of Colombia's top drug especially, the George Bush government, and whose net­ lords in one bust in the Caribbean was sabotaged by Vice works still infest the halls of power in Washington today. President George Bush and his "Contra" project director, Lt. As EIR documented in its April 1991 Special Report Col. Oliver North. Three days before the operation, North entitled Bush's Surrender to Dope, Inc., "the international leaked information and photographic evidence to the press financial system has become progressively more addicted to about the Sandinista government's involvement with thecar­ the flow of drug monies, to the point where today, the bank­ tel, thereby alerting the cartel leaders and frustratingthe raid. ing system is as hooked as a junkie on heroin." The interna­ DEA informant Barry Seal, who had played a key rolein tional financial elites, to preserve that decadent banking sys­ the plan, and who knew details of how Bush and Northwere tem, are determined to maintain control over Dope, Inc.'s financingthe Contras with drug money, was murdereda short billions. That, the report insists, means promoting drug legal­ time later, when cartel assassins "discovered" his unprotect­ ization by any and all means. ed hideout in Baton Rouge, Louisiana. British financial interests have been especially outspoken • While criticizing the Colombian government for its in their advocacy of drug legalization. For nearly a decade, failure to rein in the narco-terrorists, the Bush government the London Economist, a mouthpiece of British banks, has was denying crucial financial ailil, logistical support, and repeatedly called for drug legalization. In June 1989, the technology and defense materiel to that country's ill­ magazine editorialized, "It is obvious . . . that drug dealers equipped Armed Forces. Former U. S. SouthernCommander use banks ....The business . ..has become part of the Paul Gorman testified to the Senate Foreign Relations Com­ financial system. . . . If you had morals or ethics in this mittee in February 1988, "We have been promising the Co­ business, you would not be in it." lombians materiel help since 1983. We have simply not de­ The role of the Bush government was to wage a phony livered." In September 1989, National Police Chief Gen. war on drugs while encouraging, through such bankers' insti­ Miguel Gomez Padilla protested that $65 million in emergen­ tutions as the Inter-American Dialogue, the legalization of cy aid sent to Colombia from the United States was largely drugs as "a necessary evil." As early as 1986, the Dialogue "symbolic," and "more suitable for conventional warfare was promoting "selective legalization" to "decrease vice and than the kind of struggle we are waging here against the drug corruption." In 1989, the Dialogue was warning that "the traffickers. " fight against cocaine can threaten democratic governments • While Bush ordered an invasion force into Panama in as seriously as trafficking itself." In 1988, the State Depart­ 1989 to murder thousands of innocent civilians, destroy its ment's annual International Narcotics Control Strategy Re­ defense forces, and kidnap its leader on the pretense that he port suggested that the profits of the drug trade "can provide was working with the Colombian drug cartels, the puppet benefits to some otherwise economically unattractive coun­ government set up by Bush in that unhappy country was tries. " chosen directly from the boards of directors of some of the Colombia was chosen as the testing ground for legaliza­ most prominent drug banks at the time, including the jointly tion. As the EIR Sp ecial Report noted, "Today, Colombia's owned Cali and Medellfn cartels' First InterAmericas Bank

EIR June 23, 1995 Feature 29 order to enlist their support in "fighting communism"in Nica­ ragua and elsewhere. Througijoutthe 1980s, and especially at the height of the violence irt Colombia when high-profile l political assassinations and c -bombings were paralyzing that nation, the U.S. media repeating the administration line that, unlike their MedelHWI -based brethen, the Cali traf­ fickers "deploredviolence ," " e businesslike and efficient," I "have many legitimate busine ses," and "do not seek public office." Bush's strategy was b osted by Gaviria, whose 1990 presidential campaign claimed an alleged distinction be­ tween mere "drug traffickers" I nd "drug terrorists." Although many in the DEAland in other law-enforcement agencies knew better-after ah , the Ochoa clan from Med­

ellin were business partner ith the Rodriguez Orejuela brothers from Cali-the myth� that "one can work with" the Cali Cartel continued to ap ar in the U.S. media and in government layers. Small w r.der, when Michael Abbell, for 17 years an employee of lhe U.S. Justice Department, George Bush lies too . His "war on drugs" was a phony, who became section chief of th'e department's officeof inter­ promoting such pro-legalization outfits as the Inter-American national affairs (in charge of e tradition procedures), quit his Dialogue. post in 1984 to become the o�cial lobbyist and lawyer for the Cali Cartel. It's all right, h9 assured the Washington Post: and Florida's Dadeland Bank. "The people in Cali are adamantly opposed to any violence. • Were Bush networks also behind the September 1989 . ..My impression is you can work with these people." assassination of Colombia's front-running presidential can­ In fact, the U.S. governIflentl had been working with didate and anti-drug leader Luis Carlos Galan? Documenta­ "these people" since the mid- 1970s, when taxpayers' dollars tion that later appeared indicated that the weapons that had were being given by the State Department to the American been used in the cartel hit against Galan , had originally been Institute for Free Labor Devel pment (AIFLD), widely con­ financed by U.S. intelligence cut-outs for a Panamanian sidered a dirty-tricks arms of corrupt U.S. intelligence net- I . "Contra" force against Panama's Gen. Manuel Noriega. It works , and ended up bankrolhng drug-mafia money-laun- has never been clarified how they got into the hands of Co­ dering operations. In 1974, a half-million-dollar grant from lombian cartel assassins. Galan's campaign manager, who the U. S. lnteramerican Foundabon (on whose advisoryboard succeeded him as presidential candidate and went on to take sat AIFLD director William oherty, Jr.) was given to the dJ the Presidency, was Cesar Gaviria. Colombian UTC labor federat on as seed money to startthe • Even while the Bush administration knew that then­ Colombian Workers Bank. The head of the UTC at the time, Colombian President Cesar Gaviria was tainted, George Tulio Cuevas, was an AIFLD Itrustee. Cuevas became a di­ Bush personally sponsored Gaviria's 1994 bid for secretary rector of the Workers Bank, a�(Jsix months later began legal general of the Organization of American States, which he maneuvers to sell off the ban){s' assets to "legitimate busi­ holds today. Bush knew, for example, that Gaviria had pos­ nessman" and banker Gilberto fOdriguez Orejuela. In 1978, session of videotapes, made with DEA assistance, showing AIFLD's Cuevas and RodriguerzOre juela were sitting togeth­ cartel bribery of the 1991 Constituent Assembly which er on the bank's board. banned extradition, and that Gaviria had buried those tapes. Rodriguez Orejuela retaine his holdings in the bank until Bush also knew that Gaviria had appointed to his administra­ 1984, when his notoriety as a trafficker began to spread. tion four proponents of legalization-Health Minister and Shortly afterdivesting himself of his bank stocks, the Work­ "former" M-19 narco-terrorist chieftain Antonio Navarro ers Bank was officially identi ed as one of four Colombian Wolf, Justice Minister Monica de Greiff, Development Min­ banks involved in drug money-laundering, and taken over ister Ernesto Samper Pizano(today President of Colombia), by the Colombian governmenL Later that year, Rodriguez and Prosecutor General Gustavo de Greiff-and yet Bush Orejuela was arrested in Spai on drug charges. Thanks to publicly applauded Gaviria as "a man of courage, devoted to the efforts of former Justice pepartment official Michael law and liberty." Abbell and of Cuevas's successor at the UTC, Victor Acosta The Bush strategy to encourage the legalization "solu­ (who in 1986 travelled to Sp I in to testify on Rodriguez's tion" was centered around a working alliance with one of behalf), Rodriguez Orejuela was extradited to Colombia in­ Colombia's three narcotics cartels, the so-called Cali Cartel stead of the United States, whe�e he used his influenceto get of Gilberto and Miguel Rodriguez Orejuela, purportedly in the charges against him droppdct.

30 Feature EIR June 23, 1995 was also involved with launderiqg money through Corpo­ raci6n Ford." EIR also reported on Jan. 5, 1990 that "Second Vice President Guillermo 'Billy' Ford is up to his elbows in drug Panama: George Bush's money laundering." Ford and two political associates-Car­ los Rodriguez, named by Endara as Panama's ambassador to Washington, and Roberto Eisenm�nn, publisher of Panama' s narco government leading pro-government newspaper, La Prensa--own the Dadeland National Bank in MiaITIli, Florida. That bank was The fo llowing is excerpted from EIR's Special Report revealed in 1985 to have served i as a laundromat for one "Bush's Surrender to Dope, Inc.," issued in April 1991 . It of the largest marijuana-smuggling rings ever caught in the sheds light on the Bush administration's "Just Cause." United States, that of Antonio ("Tony") Fernandez. Eisen­ mann also sits on the board of Baru:oContinental . In March 1985, Panamanian authorities intervened against Guillermo Endara himself is b)Jsinesspartner to a leader First Interamericas Bank, S.A. (FIB), shutting it down for of Panama's former opposition wino was caught red-handed "failure to heed Panamanian banking laws" and for unex­ in the dope trade, CIA bagman darlos Eleta Almaran. Be­ plained transfers of funds abroad-that is, for laundering sides being the corporate attorneyfor the Eleta family's con­ drug money. The two majority stockholders in First Inter­ siderable interests, Endara owns significantstock in, and sits americas were Rodriguez Orejuela and his partner, Jorge on the board of, Harinas Panama. S.A.; Carlos Eleta is the Luis Ochoa, both of whom were by that time sitting in a company's president and founde�. Eleta had served as the Madrid jail cell. Managing the bank at the time of its seizure intermediary of the U . S. campaign to buy the 1989 Panama­ was former UTC treasurer and Colombian Workers ' Bank nian elections, with $10 million given him by the Central director Antonio Beltran. Intelligence Agency. Even more interesting were some members of FIB 's Eleta was arrested in April 19\89 in Macon, Georgia by board of directors, who today are running the new U.S. the Bibb County sheriff and DE';' personnel, and charged Army-installed government of Panama. Puppet President with conspiring to import 600 kilos of cocaine permonth into Guillermo Endara has named Carlos Lucas L6pez Tejada as the United States, and planning to set up shell companies in Chief Justice of Panama's Supreme Court, Rogelio Cruz as Panama to launder the estimated $300 million per month in AttorneyGeneral , and Mario Galindo as Treasury Minister. drug profits. All three-L6pez Tejada, Cruz, and Galindo--sat on FIB 's Justice Department charges against Eleta were suddenly board of directors. Cruz remained loyal to Rodriguez Ore­ dropped on Feb . 13, 1990 for "lacl. ofproof," despite claims juela to the end. Even afterit was made public that Rodriguez of the authorities who had conducted the arrest that proof Orejuela was the owner of First Interamericas, Cruz contin­ certainly did exist, including audiorand videotapes of Eleta's ued to appeal the government's decision to shut down the efforts to set up the dummy corporations for money laun­ bank. The appeal was turneddown in April 1985. dering. Asked why the indictme� was dropped, the police President of First Interamericas was Jaime Arias Calde­ answered that "that decision was qIadeby the U. S. Attorney r6n, the brother of Endara's first vice president, Ricardo General and by the federal prosecutor of Georgia," EdEnn is. Arias Calder6n. Ricardo's banker brother is also one of the Eleta's lawyer in the case w� Gregory B. Craig, who owners of Banco Continental, which has served as a conduit has significant links of his own to �he U.S. intelligence com­ for financing the election campaigns of Ricardo's party, the munity. Craig is a partner in th� Washington law firm of Christian Democrats. In 1985, a captured Colombian drug­ Williams and Connolly, the firm pf Oliver North's counsel runner confessed that he had laundered some $40 million for Brendan Sullivan. Colombian drug cartels through the Banco Continental­ One question that has recently arisen concerningCra ig's with the full knowledge of another opposition leader, Cesar role is whether the Bush admini�tration used Panamanian Tribaldos, who sat on the board of Banco Continental. government funds to get the drug-trafficking Eleta off the Named to run the Col6n Free Zone by the Endara regime hook. According to official U.S. documents, Craig was a was Jaime Ford Lara, nephew of Panama's Second Vice registered agent of the fictitiousFI�rida-based "government" President Guillermo ("Billy") Ford. According to the Miami of Eric Delvalle, and in that capacity had received in 1989 Herald on Jan. 5, 1990, convicted Medellin Cartel money­ tens of thousands of Panmanian g�vernmentdollars that had launderer Ram6n Milian Rodriguez "laundered millions of been illegally seized by the Bush �ministration as partof its dollars in drug money in the early 1980s through a Panamani­ economic warfare against Panam�. The Delvalle "govern­ an company in which Ford's brother Henry was an officer." ment" fiction had, in fact, been I kept alive, among other The Herald added that Milian Rodriguez, currently serving reasons, to provide a conduit for fuJnneling Panamanian mon­ a 43-year racketeering sentence, said that "Guillermo Ford ies to U.S. cronies and agents insilie Panama.

EIR June 23, 1995 Feature 31 Reenter Rosenthal. In 1992-93, Rosenthal served as the prosecutor seeking indictment in Miami of Gen. Ram6n Guillen Davila, former commander of the anti-drugdivision of the Venezuelan National Guard-in which the principal Venezuela: Cisneros accuser against Davila was none other than Nelson Ramirez, brother of the former governorof Caracas, Adolfo Ramirez, whom General Davila had jailed! as part of a drug-running & Co. in the sights network operating among the United States, Venezuela, and Switzerland. According to a story filed by reporter Ricardo Guanipa of Once in private practice, aacording to El Nacional's the Caracas daily El Nacional, writing from Miami on June June 9 report, Rosenthal served as legal counsel to Orlando 9, one of the fugitive bankers wanted by Venezuelan justice, Castro, as well as various Venezuelan politicians. Rosenthal financier Orlando Castro Llanes, had used the services of defended Castro in a suit brought against him in Miami in one of the lawyers named as a Cali Cartel agent in the June 1994, by former Presidential Anti�Drug Commissioner Thor 5 U.S. Justice Department indictment, Joel Rosenthal, a Hallvorsen. Castro had accused Hallvorsen of being the former Assistant U.S. Attorney in New York and Miami, mastermind of the car-bomb which exploded in a Caracas who pled guilty to drug-money-laundering charges. shopping mall in 1993. (Earlier, Castro had accused Hallv­ Castro is a business associate of Venezuelan magnate orsen of being responsible for Congressman Hernandez's Gustavo Cisneros Rendiles, whose brother Ricardo is now, charges against him.) After Venezuelan courts found him like Castro, a fugitive from Venezuelan justice. Ricardo fled innocent of the car bombing charge, Hallvorsen filed suit after the Cisneros family's Banco Latino went bankrupt in against Castro in Miami. Castro was found innocent, and 1994, as a result, in large part, of the bank's illicit financial then tried to get a grand jury 110 indict Hallvorssen, but operations. Readers of this magazine will remember Gustavo failed. Cisneros as the person who in 1985 got a corrupt judge to By 1994, when Castro hired Rosenthal to defend him, ban circulation in Venezuela of EIR's book Dope, Inc., Rosenthal had been working for Miguel Rodriguez Orejuela because it documented his connections to financial interests for years. His job wasn't just money laundering; as detailed involved in drug money laundering. Will the Cisneroses in the June indictment of the cartel, Rosenthal also delivered now try to prohibit coverage of the U.S. indictment of the death threats for the cartel. That job he did in 1991, to try lawyers for the Cali Cartel, to protect their friends? and keep the lid on a cartel factory in Venezuela, TRANCA, which manufactured concrete posts in which cocaine could Rosenthal and Ramirez be hidden. The factory was discovered after a joint U.S.­ Rosenthal established his Venezuelan connections by at Venezuelan operation seized a single shipment of 12.25 tons least 1989-90, when he helped prosecute the famous drug­ of cocaine hidden inside posts. Some 50 tons of cocaine money-laundering investigation known as Operation Polar were shipped into the United Stares from TRANCA in 1990 Cap. Among those named in that case were two Vene­ and 1991, in lots of 5-8 tons apiece. zuelans, Nelson Ramirez Torres and his partner, Sergio The 12.25-ton load was shipped aboard a Danish boat, Martinez, who had been lawyers for the wife of a drug­ the Mercadian Continent, the same boat which in December traffickernamed Florentino Fernandez. Ramirez and Marti­ 1988 carried a 175-kilo shipment of cocaine to a Miami­ nez were paid a half-million dollars for their services, money based company, Celere, Inc. The Caracas daily El Globo which the U.S. Drug Enforcement Administration (DEA) reported on Sept. 19, 1991 that Celere was owned by Gusta­ determined came fromdrug trafficking. That charge, howev­ vo Cisneros. Although this was never proven, the owner of er, could not be proven in court, and the lawyers were Celere was Rogelio Ugarte Bresselau, a top security adviser exonerated. to both the Banco Latino and fomer Venezuelan President What the case did appear to firmly establish, however, Carlos Andres Perez, now being triedfor corruption. Ugarte, were ties between prosecutor Rosenthal and defendant like Perez, has extensive ties to the Cisneroses. Ramirez. So, too, does Orlando Castro. Castro served as a In 1991, Ramirez turned up as the lawyer for Orlando frontman for Gustavo Cisneros in his 1991 hostile takeover Castro, after Venezuelan Congressman Guillermo Hernan­ of the Televen television netwQI'k. Joining Castro in that dez accused him of laundering money for the Medellin Car­ operation were various Cisnerosfro ntmen, the most conspic­ tel, at the point that Castro had teamed up with banker Jose uous being Ignacio Andrade Arcaya, now also a fugitive, Alvarez Stelling and various Cisneros family retainers, to as he was a director of the bankrupt Banco Latino. When take the Banco de Venezuela. At the time, the Caracas press Castro and Alvarez Stelling took over the Banco de Vene­ published the news that Ramirez Torres himself had been zuela in 1992, they placed on its board of directors Beatrice investigated by the U.S. DEA for drug-money laundering. Rangel Mantilla, an employee of Gustavo Cisneros.

32 Feature EIR June 23, 1995 November-December 1978: the authors of Dope, Inc. give four hours of documentation t<>the chief bank regulators of the Federal Reserve, showing that the Hongkong and LaRouche was right: Shanghai Banking Corp., dating qack to the British Opium War against China, was in control M production and distribu­ tion of opium from the Golden Trilangle and of the resulting 20-year war on drugs money laundering. The HongShanjghad recently made a bid to take over the Marine Midland Bank, based in New York This chronology is excerpted/rom a more extensive timeline City with assets of over $13 millipn. published in New Federalist newspaper on Feb. 7, 1994. Spring 1978: Edgar Bronfm�n orders his attorneys to prepare libel action against LaRo�che and New Solidarity, February 1974: New Solidarity, a national newspaper following publication of articles exposing Bronfman family founded by Lyndon H. LaRouche, Jr. , launches a series of involvement in drug trafficking. H�s attorneys warn him that articles on terrorist armies in the United States and Europe such a suit would be foolish. : created through drug-induced brainwashing, including the July 1978: The Anti-Defamatipn League of B 'nai B'rith Symbionese Liberation Army, which kidnapped heiress Pa­ issues a "fact-finding report" slahdering LaRouche as an tricia Hearst. The series highlights the role of the London anti-Semite. The smear is in reaction to published exposes Tavistock Institute, which played a role in the CIA's secret that top ADL officials are tied to Meyer Lansky's national MK-ULTRA program to spread psychedelic drugs. crime syndicate. May 15, 1974: U.S. Labor Party, founded by LaRouche , Nov. 11, 1978: Armed attac� against Paris offices of holds a press conference outside the Lincoln Detox Center EIR , during press conference announcing the release of in South Bronx, New York, and is attacked by members of Dope, Inc. the Black Liberation Army (BLA) and Revolutionary Union December 1978: First meetiQg of the Michigan Anti­ (RU), resulting in the shooting of a LaRouche associate. Drug Coalition, founded at the inspiration of LaRouche. Press conference detailed the use of the methadone mainte­ Within months, fraternal organizations spring up in 15 other nance program at the hospital to recruit drug addicts to the states. BLA and the Puerto Rican terrorist group F ALN. Sept. 29, 1979: National Anti�Drug Coalition (NADC) January 1977: EIR warns of imminent nomination of is created in Detroit, Michigan. heroin legalization advocate Peter Bourne to Carter cabinet. Oct. 5, 1979: Founding in Rome of the Italian Anti­ February 1977: EIR publishes expose of drug legalizers Drug Coalition (ADC). Within a month of its founding, the in the Carter cabinet, including their ties to National Organi­ Italian ADC defeats an effort by Italian Health Minister zation for the Reform of Marijuana Laws (NORML) . Altissimo to legalize heroin on the "British model." March 15, 1977: Carter administration introduces legis­ August 1979: Dennis King begins 13-part slander series lation to Congress for decriminalization of marijuana. against LaRouche in New York City newspaper Our Town, President Carter appoints Peter Bourne as White House which is owned by convicted mobster Ed Kayatt; its attorney chief of Officeof Drug Abuse Policy, and nominates Mathea is Roy Cohn. King is on the payroll of the ADL. Falco as assistant secretary of state for narcotics control December 1979: Founding of Colombian Anti-Drug Co­ matters. Both are NORML members. alition. March 18, 1977: U.S. Labor Party testifiesbefore Mary­ January 1980: LaRouche, campaigning for the Demo­ land State Senate Judiciary Committee on the medical dan­ cratic Party presidential nominatiOJil, issues a six-pointstrate­ gers of marijuana. Two days later, the committee defeats gy for combatting the drug epidemic. drug decriminalization bill. Over the next four years, efforts January 1980: Founding of the West German Anti­ by LaRouche associates defeat decriminalization legislation Drug Coalition. In November, ADC launches a German­ in 11 other state legislatures. language quarterly magazine, Krieg dem Rauschgift (War June 21, 1977: EIR exposes bankers' efforts to force on Drugs), which reaches a circulation of 60,000. developing-sector countries such as Colombia to tum the February 1980: Anti-Drug Coalitionfo unded in France. cultivation of drugs into a cash crop to pay their foreign February 1980: LaRouche, campaigning for the Demo­ debts to the banks. cratic Party presidential nomination, gives interview to September 1978: EIR runs feature on "Why the World NBC-TV newsman Mark Nykannen in which he details the Bank Pushes Drugs," updating the efforts to promote drugs role of the British monarchy in sp(>nsoring the international as a Third World cash crop. drug trade . After editing, the interview peddles the smear December 1978: Publication by the U.S. Labor Party that "LaRouche says the Queen of England pushes dope." of the first English edition of Dope, Inc., subtitled Britain's May 1980: Danish Anti-Drug Coalition leads a cam­ Opium War Against the United States. paign to shut down Christiania, a commune and drug-traf-

EIR June 23, 1995 Feature 33 Lyndon LaRouche addresses an Anti-Drug Coalition meeting in 1979 . Two years later, the Illinois Attorney General shut down the Illinois Anti-Drug Co.alition, under pressure from the Anti-Defa mation League.

"Rolling the tanks down State Street" in Chicago to stop the drug trade: LaRouche Democrats Janice Hart and Robert Patton on parade in Chicago, May 10, 1986 . Hart won the Illinois Democratic primary election fo r secretary of state, and her associate Mark Fairchild won the primary election fo r lieutenant governor. ficking center in Copenhagen. Jan. 26, 1982: EIR nAr'n""'ntc ties of Charles Manatt, June 1980: LaRouche publishes How to Defeat Liberal­ chairman of the Democratic Committee, to syndi- ism and William F. Buckley, spotlighting Buckley's mem­ cate boss Meyer Lansky and cartel bigwig Max Fisher. bership on the advisory board of NORML and his admission February 1982: commissions a memo by to smoking marijuana on his yacht. EIR's counterintelligence Investigative Leads to June 1980: National Anti-Drug Coalition publishes the federal law enforcement , identifying Bank of first issue of War on Drugs magazine. The magazine will Credit and Commerce (BCCI) as a drug- publish 15 issues through November 1981, when a massive money-laundering outfit illegal cash into Middle dirty tricks campaign by corrupt state prosecutors instigated East terrorist groups. The is circulated to FBI, DEA, by the ADL will force it to shut down. Secret Service, and Treasury enforcement units. Jan. 17, 1981: At the founding conference of the state Spring 1983: LaRouche, memo to senior officials of Anti-Drug Coalition in Jalisco, Mexico, the first issue of a the Reagan administration, nrr\nn.cpc War on Drugs in the Spanish-language edition of War on Drugs is released. Guer­ WesternHemisph ere as the effective means for dealing ra a las Drogas widely circulates throughout Ibero-America. with the national security posed by the Sandinistas Feb. 10, 1981: Mobilization by Anti-Drug Coalition in Nicaragua. LaRouche the Sandinistas as successfully blocks International Cannabis Alliance for Re­ sponsors of " along with Cuba's Fidel form (ICAR) application for status as non-governmental Castro. organization at the United Nations. July 1984: LaRouche collaborator and editor of Colom­ I November 1981: Illinois Attorney General , under prod­ bia's Guerra a las Drogas (W r on Drugs) magazine Patricia ding from ADL and from High Times magazine writers Chip Paredes de Londono is kidnagped and tortured by members Berlet and Dennis King, orders the shutdown of the Illinois of the Universal Christian Gnostic Church, on orders of Anti-Drug Coalition on bogus charges of violating state the drug cartel. Londono is re leased by her captors in a charity laws. Berlet had penned High Times article attacking disassociated state on Aug. 1. National Anti-Drug Coalition, complaining, "They want to Jan. 23, 1985: Narcotrafi(jo, S.A., the Spanish-language take your drugs away." edition of Dope, Inc., is relefsI ed. Dec. 16, 1981: Dennis King, Chip Bedet, and Russ Feb. 21, 1985: E1R hold� a press conference in Boston Bellant hold press conference in Washington, D.C. de­ to release documents showin¥ that U.S. Attorney William manding Justice Department prosecution of LaRouche. Weld had given only token punishment for dirty money-

34 Feature EIR June 23, 1995 Anti-drug editor Patricia Paredes de Londono in Colombia, 1984 . She was kidnapped and tortured on orders of the drug cartel (later released).

Anti-Drug Coalition organizing in Brooklyn, N.Y., 1981 . Similar groups were active in 16 states and half a dozen other countries. laundering to the Bank of Boston. which describes efforts of tactlOll$ March 13, 1985: LaRouche unveils IS-point program Department to install a drug cartel g01{en:1mlent in Panama, for fighting drugs at a conference in Mexico City. Over the through their campaign against Noriega. next year, LaRouche's plan will be presented at forums and Jan. 27, 1989: LaRouche and private briefings throughout the Western Hemisphere. federal prison. After a federal Feb. 28, 1986: In EIR , LaRouche responds to William in a mistrial in May 1988, was reindicted in Webster's claim that narco-terrorism does not exist, by call­ October 1988 in Virginia on identical charges. ing him "a bald-faced liar, and even much worse," and April 1991: EIR issues Report titled "Bush's demanding his resignation. Surrender to Dope, Inc. ," which �o<:unlents how official March 7, 1986: EIR attacks plans of Project Democracy U . S. policy fostered Colombia's with the drug traf­ to overthrow the government of Panama and destroy the fickers and helped tum Colombia a testing ground for Panamanian Armed Forces. global drug legalization strategy. March 16, 1986: EIR editors Webster Tarpley, Dennis Jan. 4, 1992: Presidential LaRouche issues a Small, and Jeffrey Steinberg hold press conference at head­ campaign statement on why Bush's on drugs failed. He quarters of Guatemalan defense minister, opposing the re­ highlights U. S. collusion with the Israeli mafiain Colombian newal of U.S. governmentaid to the Contras, citing rebels' cocaine trafficking, and singles oJt Oliver North, Elliott ties to cocaine cartel. Abrams, and George Bush for sab taging anti-drug efforts March 16, 1986: LaRouche Democrats Mark Fairchild to conceal drug trafficking by Contbs and their backers in and Janice Hart win Illinois Democratic primary elections sections of the CIA and Israeli MoFsad. for lieutenant governor and secretary of state. They cam­ Spring 1992: E1R issues third English-language edition paigned on a platform vowing to "roll the tanks down State of Dope, Inc., subtitled The Boo� That Drove Kissinger Street" to shut down the drug trade. Crazy . New preface catalogues U.S. government collusion April 1986: EIR issues second English-language edition with drug cartels during Iran-Contrlt affair. I of the book Dope, Inc., subtitled Boston Bankers and Soviet Jan. 6, 1993: EIR releases the book The UgLy Truth Commissars. It includes an appendix cataloguing the role About the ADL, which documents the role of the ADL in of the ADL in fostering the narcotics trade . the illegal drug trade, ties to inte'j"ationalI terrorism, and July 1986: EIR issues "White Paper on the Panama espionage. The book sells over 100,000 copies in its first Crisis: Who's Out to Destabilize the U.S. Ally, and Why?" year and helps trigger criminal probe of ADL.

EIR June 23, 1995 Feature 35 �ITillInternational

Shut downU. N. 's Beijing Conference on Women by Marianna Wertz and Linda de Hoyos

Preparations for the United Nations Fourth World Confer­ and "indigenous," unscientific, tnd dangerous medical prac­ ence on Women, scheduled to take place in Beijing, China on tices. As the contested paragrap1l 37 of the opening manifesto Sept. 4-15 as partof the U.N. ' s 50thanniversary celebration , reads: have turnedinto a battlefieldbetwe en, on the one side, devel­ "The major cause of the continued deterioration of the oping nations, represented at the Preparatory meetings by the global environment is the unsustirinablepatterns ofconsump­ Group of 77 , and the Vatican; and on the other, the oligarchi­ tion of production, particularly in industrialized countries, cal designers of the conference, whose voice is heard through which is a matter of grave concern, aggravating poverty and the U.N. bureaucracy, delegations from industrialized na­ imbalances. Therefore, equitable social development that tions, and the 6O,000-odd representatives expected at the recognizes empowering people living in poverty, particularly conference from the so-called non-governmental organiza­ women, to utilize environmental resources sustainably is a tions (NGOs), most of whom are funded by the governments necessary foundation for sustaibable development. Women or semi-private foundations of western Europe, the United as citizens can help change consumption patterns in their States, and Canada. multiple role as consumers, householders, workers, and The draft declaration and draftplatform of action repre­ voters." sent the continuing effort of the U.N., especially through the The core idea of this statement is that women learn how NGOs, to dictate policies to governments. In Beijing, as in to adapt to the poverty which in fact is responsible for their all other U.N. conferences of the same type, the 60 ,000 poor health and nutrition, early deaths, lack of medical care NGO delegates, including 5,000 press, far outnumber the for their children, and so forth . governmental delegates. U.S. statesman Lyndon LaRouche The answer for women, the: U.N. document claims, is has called for shutting down the conference as an abrogation "empowerment"-a nebulous �rm evidently meaning that of the concept of national sovereignty. No supranational women would be given powers they do not currently have. agency can be allowed to dictate policy to sovereign nation­ In reality, the idea is to forge a "women's" constituency to states, LaRouche said, pointing to the extravagantly expen­ enforce the program of enslavement represented by "sus­ sive role of the NGOs, which presume to order governments tained development." Women in the developing sector, par­ to conform to their radical feminist and environmentalist ticularly those dubbed "indigenpus," such as narco-terrorist constituencies. and Nobel Prize-winner RigobeJrta MenchU, are particularly Further, the document continues to peddle the same mal­ targeted as potential leaders in' a force of maenads, which thusian program of "sustainable development" as was ped­ would demand backwardness and policies of population con­ dled at the September 1994 Cairo U.N. Conference on Popu­ trol, such as sterilization and abortion. In addition, the imple­ lation and Development. A phrase conjured up allegedly on mentation section of the document calls for an absurd agenda behalf of environmentalism, it is used to force acceptance, of "genderization" of data and economic impact studies, and in the developing countries, of the sole use of "recyclable," affirmativeaction-type measures to be taken globally to bring low-technology energy resources; technology which is "ap­ women into the workforce. propriate" to a backward civilization, like hoes and shovels; Thus, the agenda of the U.N.-NGO apparatus deployed

36 International EIR June 23, 1995 on behalf of the international oligarchy, is represented paragraph 37 quoted above. : throughout the document, particularly in the implementation The major achievement of the l opposition , as reflected in section. However, this agenda is running into severe the draft, is repeated denunciatiob of the "structural adjust­ problems. ment policies" imposed by the In.ernational Monetary Fund on developing nations. For instance, paragraph 15, entirely Reality's backlash in brackets (indicating its rejecti�n by malthusians), reads: As originally conceived, the Beijing conference was to be ". . . Moreover, debt burden ha$ forced many developing the last of a tripartite plan by which a U.N. world dictatorship countries to undertake structural ¥justment policiesthat are would be imposed for the purposes of carrying out malthusian detrimental to their social develoI1ment. The number of peo­ policies of population reduction, by any means. The Cairo ple living in poverty has therefort increased disproportion­ U.N. conference of last September was to impose a universal ately in most developing countries, particularly the heavily "consensus" for population reduction upon countries; the indebted countries, during the last decade." March 1995 Copenhagen conference on Social and Econom­ From this point on, the entiTei first half of the document ic Development, according to the U.N. Development Pro­ is a harsh and realistic portrayal i of the conditions of ''un­ gram Report of 1994, was to create the global institutions­ speakable poverty" that the vast m�jority of the world's wom­ Economic Security Council, Global Central Bank, global en confront every day (see Docum{!ntation). Although noting police, global taxation, and global "peacekeeping force"­ that 25% of the world's households are headed by women, to enforce such population reduction, by sanctions or military the document fails to acknow ledg� that the terrible conditions force if necessary . The Beijing conference was to consolidate for most women described are 1 � an accurate barometer of the constituency of "women" as the on-the-ground enforcers the general collapse of economic lj,ndcultural life; and 2) that for such policies. women confront this "unspeakable poverty" as the primary The design did not work, because an alliance of the Unit­ care-givers and protectors of their families, especially their ed States, the Vatican, developing countries, Muslim forces, children. Only by stating as a g0al the reduction .of infant and the LaRouche movement internationally was able to and under-five mortality globally, does the document offer draw the line against the destruction of national sovereignty backhanded acknowledgement o�women's primaryconcern embodied in the Cairo declaration, as originally proposed, for the welfare of their children, and hence, for all society. and denied any consensus that alleged "overpopulation" is In general, in the implementation section of the docu­ the prime source of the world's current crisis. As the U.N. 's ment, the solutions offered to the

Australia, the conference was up in the air until mid-June, equitable social and economic in�ernational order . . .] will when U.N. Secretary General Boutros Boutros-Ghali sent enable the world to meet the chal�nges of the next century." personal envoy Ismat Kittani to Beijing to work out a compro­ Thus, despite the best-laid plans of the malthusian blue­ mise. With certain concessions from Beijing, the NGOs have print behind the Beijing conference, it is becoming increas­ been forced to accept the out-of-town site for their parallel ingly difficult for governments t() escape the reality that the conference. only hope for reversing the collap�e into barbarismdescribed A strong dissenting voice can also be heard in the draft in the Beijing document, is the reorganization of the world document for the Beijing conference to the U.N.-NGO mal­ monetary system to generate global industrial development, thusian agenda, again coming from the Group of 77 devel­ as Lyndon LaRouche has placed (hat urgent necessity before oping countries, the Vatican, and Muslim forces. As a result, governments around the world. I This is the central issue, nearly 50% of the draft document is in brackets, including which even the United Nations is no longer able to block out.

EIR June 23, 1995 International 37 internal displacements are factors contributing to the rise of Documentation female-headed households. . . . 39. According to World Health Organization (WHO) es­ timates, by the beginning of 199$ the number of cumulative Excerpts fr om the DraftPlatf orm fo r Action of Proposals fo r cases of AIDS was 4.5 million. An estimated 19.5 million Consideration in the Preparation of a DraftDeclaration and men, women, and children have been infected with HIV, the Draft Platform fo r Action Commission on the Status of since it was first diagnosed, and it is projected that another Women at its 39th session. Numbers indicate the paragraph 20 million will be infected by the end of the decade. Among numbers of the document. Those paragraphs, sentences, or new cases, women are twice as likely to be infected than phrases that are bracketed indicate that the words are under men. In the early stage of the AIDS pandemic, women were contention and must be debated in Beijing. not infected in large numbers; however, there are now about 8 million women infected. Young women and adolescents 18. A widespread economic recession as well as political are particularly vulnerable. It is estimated that by the year instability in some regions, have been responsible for setting 2000, more than 13 million win be infected and 4 million back development goals in many countries. This has led to women will have died from AIDS-related conditions .... an expansion of unspeakable poverty. Of the more than 1 72 ....Approximately 100million children, including billion people living in abject poverty, women are an over­ at least 60million girls, are without access to primaryschool­ whelming majority. The rapid process of change and adjust­ ing, and more than two-thirds of the world's 960 million ment in all sectors, has also led to increased unemployment illiterate adults are women .. .. and underemployment, with particular impact on women. In 77 ....Girls are often deprived of basic math and sci­ [many] cases, structural adjustment programs have not been ence education and technical training, which provide knowl­ designed so as to minimize their negative effects on vulnera­ edge they could apply to improve their daily lives and en­ ble and disadvantaged groups or on women, nor have they hance their employment opportunities. Advanced study in been designed to ensure positive effects on those groups science and technology prepares women to take an active by preventing their marginalization in economic and social role in the technological and industrial development of their activities .... countries, thus necessitating a diverseapproach to vocational 20. Recent international economic developments have and technical training. . . . had in many cases a disproportionate impact on women and 93. In many countries, in particular in developing and children, the majority of whom live in developing countries. least-developed countries, [structllral adjustment,] [the dete­ For those States that have carried a large burden of foreign rioration of public health systems, a decrease in public health debt, structural adjustment programs and measures, though spending, and in some cases, increasing privatization of beneficial in the long term, have led to a reduction of social health care systems without appropriate guarantees of univer­ expenditures, thereby adversely affecting women, particu­ sal access] further reduce health care availability. . . . larly in Africa and the least developed countries. This is 98. . . . Complications related to pregnancy and child­ exacerbated when responsibilities for basic services have birth are among the leading causes of mortality and morbidity shifted from governments to women .. .. for women of reproductive age in many parts of the devel­ 22. Macro and microeconomic policies and programs , oping world .. .. including structural adjustment, have not always been de­ 115. Other acts of violence against women include viola­ signed to take account of their impact on women and girl tions of the human rights of women in situations of armed children, especially for those living in poverty. Poverty has conflicts, in particular murder, systematic rape, sexual slav­ increased in both absolute and relative terms, and the number ery and [forced pregnancy]. [Acts of violence against women of women living in poverty has increased in most regions. also include terrorism, forced sterilization and [forced abor­ There are many urban women living in poverty; however, tion,] coercive/forced use of COJlltraceptives, [female foeti­ the plight of women living in rural and remote areas deserves cide/prenatal sex selection,] and female infanticide.] ... special attention given the stagnation of development in such 137. Women and childrenconstitute some 80% of the 23 areas. In developing countries, even those in which national million refugees and of the 26 million [internally] displaced indicators have shown improvement, the majority of rural persons in the world. They are threatened by deprivation of women continue to live in conditions of economic underde­ property, goods and services, and deprivation of their [basic] velopment and social marginalization .. .. right to returnto their homes of origin as well as by violence 24. One-fourth of all households worldwide are headed and insecurity. Particular attention should be paid to sexual by women and many other households are dependent on violence against uprooted women and girls employed as a female income even where men are present. . . . Family method of persecution in systematic campaigns of terrorand disintegration, population movements between urban and ru­ intimidation and forcing members of a particular ethnic, cul­ ral areas within countries, international migration, war and tural or religious group to fleetheir homes. . . .

38 International EIR June 23, 1995 Bosniansgather fo rces for ani offensive to liberate thenation by Katharine Kanter

Lyndon LaRouche, on his return from a two-week trip to mess in that part of former Yugpslavia, and bring it to a Russia and Poland, discussed what the United States is to do peaceful conclusion, rather rapidly," LaRouche predicted. in Bosnia during a June 14 radio interview: "The United "Those who are talking about six months to a year to two States must use its aerospace capabilities, to do , within a years in this situation, are talking double-talk, particularly if period of less than 24 hours, or 48 at most, but during the the double-talk is coming from Pentagon circles who are next 30 days or less, what was done to the Iraqi military in being too much influencedby the diplomats." the combat phase of the Gulf war. According to the former Democratic presidential candi­ "We have the capabilities. The problem is, when Tru­ date, the primary mission of the U.S. military, "is to be man, under British influence, fired Gen. Douglas Mac­ prepared to eliminate, within a tlmespan of not more than Arthur, the result was a fundamental change in military phi­ 48 hours, the essential heavy-w¢apons capabilities of the losophy," he said. The change "became more obvious in the Bosnian Serbs, and to do the samd thing, if necessary, in the Vietnam War, in which the United States no longer fought parts of Croatia which are occupied by the relatedforce s, and wars as MacArthur or any other competent commander to , at the same time, as the Congress has moved, to lift the fought warsto win them most quickly, with the least expendi­ embargo on Croatia and Bosnia. ture of effort, and then to make peace. Rather, we got into "Under those conditions, a d(amatic, simple aerospace the policy of starting wars . . . in order to use war as a action, primarily aerospace, would tilt the balance," said Mr. bargaining chip at the table of diplomacy. LaRouche. ''The danger is, if you allow this thing to bleed "Now if the military could get the diplomatic utopian hats on, it can have global, what Henry Kissinger would call off, and just sit down at the table and recognize that the 'geopolitical impact.' " President is the Commander-in-Chief of the military, not the State Department, then the military would go to the President Campaign to free Bosnia and say, 'Mr. President, you asked for our opinion, here's This is the background to th¢ electrifying news of the our opinion,' and would give a war plan." middle of June, which we pray, will be the opening of the LaRouche added: "I have my own sources, including final phase of the campaign to me Bosnia. On the day of military-intelligence sources and others in Europe , including LaRouche's interview, June 14, Bosnia Prime Minister Haris in the Balkans, on the nature of the problem there , from a Silajdzic told reporters in Washi(lgton, after meeting with military standpoint. House and Senate leaders, that Bosnia troops were massing "The Serbian forces, contrary to what's being said and to defend Sarajevo. circulated through some military circles here , are not a good Military intelligence of several nations says that a Bosni­ military force. These fellows, are a very poor quality of an force made up of possibly as much as 20,000 men from troops, relatively speaking, would not be able to have pre­ the 3rd and 7th Corps of the Armij� (Bosnia Army), has been vailed, as they did, unless the United Nations had assisted gathering about 12 kilometers not1hwestof thecapital , in the them in conducting their atrocities with impunity; unless the area between Breza and Visoko. As of this writing on June Bosnians had been stripped of military capability; and unless, 15, there are reports that thousands of regular Croatian sol­ in particular, these Bosnian Serbs had heavy weapons capa­ diers and Bosnian Croat militiamen are now massing near bilities which they were able to use to neutralize the superior the town of Livno, 50 miles southwest of Sarajevo, to join fightingcapabilities which are developed around the Bosnian forces with the Bosnian Armija. The highest Bosnian offi­ infantry units. cials, including Foreign Minister Muhamad Sacirbey, have "Were the heavy weapons capability to be stripped away refusedto confirmor deny that an offensive to breakthe siege from the Bosnian Serbs, or to be exterminated, then the of the capital is imminent, but Canadians running observation combination of the Croat military forces, and the Bosnian posts over the front lines toward Sarajevo have been told Army , if they were allowed to be armed, would clean up the to leave immediately "for their oIWn security"; hospitals in

EIR June 23, 1995 International 39 Visoko and Zenica are said to have had wards cleared in the Armija mobilization can have but a "very little" objective, preparation for expected military casualties, and civilians such as clearing the crossroads toward the enclave of Tuzla. have been evacuated from the frontline areas . Others , more realistic, such as Miss O'Kane of the Guardian. Bosnian radio has been calling upon the population of the are telling their countrymen to make the best of a bad job: capital to start saving water and food from their pitiful kitchen "The Bosnian Serbs are losing the war," she writes from gardens; sandbag walls are being built near windows and Banja Luka, a Serbian-occupied province from which photo­ doors in anticipation ofthe offensive. The mayor of Sarajevo, journalists arenow banned. The �anja Luka daily The Voice Tarik Kupusovic, said that the Armija will try to lift the siege no longer carries its Page 4 spedal, "News from the Front": "maybe within days. The final deadline is early August." As There is nothing upbeat to report. of June 15, the city had had no water, electricity, or gas for Making sure that the Bosni3i1ls "lose thousands"-i.e., almost six weeks; the airport had been closed for ten weeks, the British intend to "wreck the joint" as they pull out under and the population was running out of food. American pressure-is the policy now put into effect. U.N. Special Envoy Yasushi Akashi has laid down new policy Rapid Deployment Force 'sent to stop us' guidelines for Unprofor: In spite: of the fact that the U.N. is Can the siege of the capital be broken? In spite of the to get a reinforcement of 10,000 heavily armed men, food extreme disparity in materiel, yes. Bosnian Army 12th Divi­ convoys into Bosnia are no lon$er to be escorted by U.N. sion officials, responsible for the defense of Sarajevo, say troops, because it is "too risky"!: After all the rubbish about that the Serbians have 600 cannon, mortars, 30 tanks , and a "vigorous new policy" following the taking of the hostages 12,000 soldiers in trenches and fortified bunkers around the at the beginning of June, what :has emerged is, indeed, a city. Furthermore, thanks to the United Nations, the Serbians vigorous policy of making sure that no food whatsoever gets have "stolen" a quarter of the 300heavy weapons from U.N. into Bosnia, neither to the capital, nor to the enclaves. The storage points, while the rest are already up and firing: The U.N. in Bosnia has been instructed to hand the convoys over collection sites are actually Serbian gun positions, which the to the Serbian police, which has "promised" to deliver the U.N. was thoughtful enough not to dismantle. food ! Hasan Muratovic, Bosnian minister for U.N. relations, In pursuance of Akashi's vigorous new policy, on Sun­ said in Sarajevo on June 11, that Unprofor delivers "tanks, day, June 11, a convoy of 60 tons of food aid for the besieged ammunition, food, and petrol" to the Bosnian Serbs, under enclave of Zepa, was stolen by the Serbians. The U.N. put the guise of "theft." He referred to the systematic Serbian out a communique saying it had been "rerouted" to theSerbi­ "thieving" of materiel from U.N. storage depots. U.N. an stronghold of Sokolac. On Wlednesday, June 14, outside spokesmen have themselves admitted that "millions of Sarajevo, a U.N. food convoy was dutifully delivered by the pounds" worth of vehicles , including armored vehicles, have U.N. to the Serbian "police," who of course then refused to been stolen-from heavily-armed Unprofor soldiers who deliver it. Where is it now? An)'IWay, the plan for Unprofor could defend themselves by raising their little finger. "These to provide cover for the food convoys snaking over Mt. Ig­ may just be robberies, but we cannot be sure that it is not all man-the road is so dangerous lit can only be traversed at part o/ the deal," said Dr. Muratovic. night-has also been dropped. Unarmored Bosnian vehicles Most importantly, according to eyewitness reports in are now attempting to bring food in to the capital and to Bosnia, the British elite troops flown in since June 8 are the U.N. Mission, members of iwhich are, by the by, also already busy obstructing the preparations for the offensive starving ! and are interfering with communications lines. Bosnian Unprofor has also decided that the last 20 miles outside Army 2nd Corps Commander Andjelko Makar told the Cro­ Sarajevo are too dangerous, and these convoys too will have atian review Panorama: "Our goal is to free the whole of to be escorted by the Armija. Alex Ivanko, U.N. spokesman Bosnia, from the river Drina, the river Una, to the sea. At in Sarajevo, told journalistson June 12: "The Bosnian Serbs some point the world will say: Stop, you cannot go further! are calling most of the shots. I'm sure there are some shots Their estimate is that we are very close to that moment, so they are not calling, Ijust can't think of them at the moment." they are bringing in heavy forces in order to stop us and force This as reported in the Guardianlon June 13. us to negotiate." Elsewhere on the battlefront, Serbian forces have suf­ fered reverses of note, in the rurea around Mt. Treskavica. Bad for the British, good for the world Between May 30 and June 5, the Bosnian Army recovered Aware that the mere rumor of a Bosnian offensive has 70 square kilometers of territory; Bosnian dispatches say already electrified the world-a "nonlinear" political effect that the Armija now controls the chokepoints toward eastern if there ever was one-some British military correspondents Bosnia and most of Hercegovina. On Mt. Ozren, the 2nd and are "sounding the alarm" as the Times puts it, now claiming 3rd Corps ofthe Armija are said tobe only 6 kilometers apart; that Bosnia cannot win the war, but will lose "thousands" if to the north, this peak overlooks the province of Tuzla, to the there is an attempt to raise the siege. Some are claiming that east, the enclaves, and to the south, Sarajevo.

40 International EIR June 23, 1995 China cleans out British free tradevulne rabilities by Michael O. Billington

, Over the past four months, Beijing has taken dramatic steps matters. He is also reputed to be one . f the primary financiers to eliminate certainvulnerabilities within China to the effects for the Hollinger Corp., the Canad' -based British intelli­ of the ongoing crisis in the world financial system and the gence operation headed by Conrad �lack, and whose board shock therapy demands of the British and the International includes such luminaries as Henry issinger, Edgar Bronf­ MonetaryFund (IMP). Since February, a number of promi­ man, and Margaret Thatcher. He is close to the Keswick nent political and business leaders, from Politburo members family of Jardine-Matheson, the histry rical controller of Brit­ totop executives in state industries and financial institutions, ain's Dope, Inc. Li has served fro the beginning on the have been arrestedand/or forced to resign. There is no longer Preliminary Working Committee o� Hongkong leaders and any question that Beijing is serious about the "Anti-Corrup­ officialsworking with Beij ing on th4 1997 transition, and in tion Campaign," a campaign which has been demanded by 1994 he was a founding partner in th� New China Hongkong most policy factions in China since the early stages of the Group, a corporate alliance of goven1mentand business lead­ reform begun in 1979, and was even acknowledged by the ers from both Hongkong and the Ptople's Republic which Beijing leadership to be a legitimate demand of the student­ was formed to extend Hongkong-stYle government into the led mass demonstrationsin Tiananmen Square in 1989. Until mainland. these recent events, however, it was generally believed that Although Beijing has publicly asserted that neither Li the well-connected elite were untouchable on their wide­ Kashing nor any of his corporate entities are under any offi­ open financial dealings, as many leaped into the hot-money cial investigation, it is clear that the networks within China empireof colonial Hongkong. connected to the kinds of "shock t�erapy" deregulation of Therehave been three notable targets of the anti-corrup­ industry and finance, such as those associated with the Hong­ tion cleanup thus far. The firstwas the family which runs the kong speculators , are being cleaned out. The British have nation's largest steel complex and a nest of subsidiary firms consistently portrayed China as bein, on the verge of general in Hongkong which areprimarily engaged in real estate and chaos and disintegration, a condition which the British them­ related speculativeactivitie s. The second target was the pow­ selves are attempting to create. However, the current leader­ erful secretary of the Beijing municipal Communist Party ship alliance in Beijing has in fact shown itself to be quite committee, and extended to other prominent figuresinvolved stable, and has increasingly over thd past year turned China in massive Hongkong real estate development deals in away from the British-IMF demands for privatization, dereg­ Beijing. The third target was the corporate leadership of the ulation, and an emphasis on the co/tstal low-technology in­ largestbrokerage firmon the Shanghai Stock Exchange. dustries for export, in favor of majorinfrastructure projects The British press in the Crown Colony has gone to great and the development of heavy ind�stry, especially in the lengths to portray these developments as merely the jock­ interior of the country. The recent aqests and forced resigna­ eying for position of contending forces, maneuvering to take tions indicate that Beijing recognize$ that such real develop­ control upon the death of the ailing supreme leader Deng ment will not be possible unless the tulnerabilities to British Xiaoping. This has functioned as a smokescreen for the fact financial destabilization and shock tijerapy areremov ed. that all the critical targets of the campaign have been directly tied to the leading Hongkong agent for British operations in A sketch of the reform era China, Li Kashing. A brief sketch of the reform era is necessary to properly Li Kashing, reputed to be a member of the 14K Triad, situate these developments. As Deng Xiaoping began the the executive body of China's secret societies, is the leading reforms in 1978 to bring China out from under the ravages of modem-day British comprador in Hongkong. His primary the Maoist era, he believed that the massive financial re­ holdings are in real estate, but he serves on most of the sources of Hongkong were the neces$ary source for the mod­ significantagencies and boards in the Crown Colony, includ­ ernization of China. In the early 1980s, when Li Kashing ing that of the Hongkong and Shanghai Bank, which func­ began to move large amounts of de\lelopment capitalout of tions as the effective government in regard to most financial Asia, into Canada in particular, Deng determined that he

EIR June 23, 1995 International 41 tries which imported raw mate ,-als and semi-finished goods from "outside" the country and merely processed them into exports, returning the product to the "outside," which, he said, would improve neither t�e national economy nor the skill level of the population in t�e long run. Hu Yaobang's warnings Went unheeded. The policy which ultimately guided the sEfls was that of Zhao Ziyang, who was to replace Hu Yaobadg as general secretary of the Communist Party when Hu was �urged in 1987. Zhao Ziyang was the darling of the New Age monetarists in the United States, those who are now known as the gurus of the Newt Gingrich, Phil Gramm "Cons;� ative Revolution," such as futurologist kook Alvin Toffte�, the Mont Pelerin Society's Milton Friedman, and king 0 the derivatives speculators George Soros, who was to be ome the primary sponsor of "shock therapy" in eastern Euro e after 1989, With this team of advisers, Zhao Ziyang's re rms created several coastal boom towns, flush with hot mo ey , cheap labor, drugs, cor­ ruption, and a relatively rich eli e, while the rest of the coun­ try stagnated, By the early 19 Os, the decay of basic infra­ Beijing's "anti-corruption campaign" is designed to eliminate structure, such as power, wate , and transportation, and the vulnerabilitiesto the worldfinancialcolla pse, especially those tied to threat of a breakdown of agri ultural production, as well the Hongkong agentfor British operations in China, Li Kashing, who as the social crisis caused by �50-2oo million unemployed sits on the board of the Hongkong and Shanghai Banking Corp . peasants, combined to cause a erious reconsideration of the (above) which dominates Hongkong' s CentralDistrict. JI direction of the reform proce s. The disastrous effects of shock therapy in Russia and th other eastern European na­ must redirect these funds into the mainland. The 1984 agree­ tions were watched extremely I are fully in Beijing, and the ment with the British to return Hongkong to Chinese sover­ purported wisdom of its architycts from the IMF, Harvard, eignty at the end of the loo-year lease on the New Territories and London was seriously questioned. in 1997 , included an unwritten protocol that China would Development planning to k a dramatic shift. While establish several Special Economic Zones (SEZs), on the Shanghai was being rebuilt as rn international trade center, sites of the old British colonial treaty ports , where foreign it was to be viewed not as anottier SEZ, but as the "bow" for investors would be permitted to set up tax-free, labor-inten­ generating development alongl the "arrow" of the Yangtze sive industries to exploit the cheap labor of the rapidly ex­ River, deep into the interior. T�e plans for the Three Gorges panding pool of displaced peasants from the countryside. Dam on the Yangtze were finaiIy approved, including mas­ China became the "model" for the Third World side of the sive water diversion projects t I solve the water shortage in "globalization" of industry, a process led by Margaret the north . Proposals for new Asian-European and Asian­ Thatcher and her American sycophant George Bush to dis­ African rail lines, along the routes ofthe old Silk Roads, were mantle industry in the advanced sector, moving some of it to reactivated and partially implerbented, with the included idea the Third World sources of cheap labor. As the productive that these lines would serve a "development corridors" in economies of the West were replaced by speculative binges the interior. At the same time the policies of the IMF and in junk bonds and derivatives, the "emerging markets" of the the Hongkong financiers, who 4emanded rapid privatization, Third World increasingly became a source for both cheap decontrol of prices, eliminatiort of guarantees for the welfare labor and for massive speculative looting to feed the global of the state sector workforce, a so forth , came under attack, financialbubble , leading to such fiascoesas the Mexico crisis not only by diehard Marxist a vocates of central planning, and the Barings Bank collapse, with many similar disasters but by also many leaders of th reform in the government. waiting to explode. Over 1993 and 1994 , Chinaf learned that the British Hong­ In China, the implementation of the SEZ policy was a kong investors, who constitu d the largest percentage of I matter for considerable debate. Hu Yaobang, who had been foreign investment in the mainland, were not willing to put in charge of the de-communization of agriculture, and who their money into these long-tedn infrastructure development was the designated successor to Deng Xiaoping until 1987, programs in the interior withoJt unacceptable conditions on insisted that the trade zones must be developed as anengine Chinese sovereignty and exorbitant guaranteed rates of re­ for China's domestic industrial infrastructure . He warned turn. At the same time, the Ho gkong-led speculators easily against what he called "two ends outside," referring to indus- found ways to circumvent the rimitive government efforts

42 International EIR June 23, 1995 to control speculation in real estate and in the new stock by a lack of regulation of the circulation sphere and market markets, contributing to the worst inflation in the history of prices." the People's Republic, and the recurring collapse of several Zhu Rongji also defended the state sector industries, localized speculative bubbles. Junior officers of state sector speaking at the World Economic forum in Davos, Switzer­ industries were seduced into speculation in the London deriv­ land. "China's state-owned enterprises are not losing as much atives markets by some of the yuppies deployed by the City as claimed by some foreign medja. In fact, the economic of London, resulting in the loss to the Chinese government performance of China's state-ownctdenterpri ses is becoming of hundreds of millions of dollars. The IMF, meanwhile, better year after year. The majority of the losing enterprises used China's desire to join the new World Trade Organiza­ are the small and medium-sized o�es, and their total assets tion to demand that China drop all protective measures for its and number of employees are les� than 20% of those of all still primitive agriculture and industries, declaring that China state-owned enterprises," he said. !Zhu also pointed out that must be considered an already "developed" nation merely only two public sectors require rqaj or state subsidies, coal because of its size. and the military industries, totaling about $600 million. While denouncing free trade, Chinese governmentagen­ No blind worship of western cies also published documents stl1>ngly supporting the for­ economic textbooks eign policy initiatives of U .S. President Bill Clinton. Clinton The conflict came to a head in August 1994 when Zhu has replaced the "globalization" erqphasis of the Bush admin­ Rongji, the Communist Party and government leader in istration with a policy of fostering high-technology exports charge of the economy and head of the central bank, ad­ and investment in infrastructure, �med at developing strong dressed a special conference on the agricultural crisis. Zhu, economies around the world. The official Beijing journal who had since 1989 been considered by many in the West as Shijie Zhishi on Feb. 1 praised "Clintonomics" as an attempt the most liberal of the reform leaders in China, launched a to "replace laissez1aire with actiVism and restrengthening scathing, surgical attack on the ideological roots of the shock government intervention in economic life." China Daily on therapists and their supporters within China. Zhu said: April 3 even declared that the "spe¢ial relationship" between "There exist a series of erroneous ideas on the question of the United States and Britain was finished, and the situation whether the government should intervene in the market and was "irreversible," praising Clintpn's efforts to "combine regulate. This series of erroneous ideas has led to chaos in central and easternEurope together, to stabilize Russia, and the circulation sphere. We have suffered great losses as a then to form a new European pattetn beneficial to it. " result of such chaos! . . . It is still being advocated that the market is a panacea, that market means complete laissez­ The arrests ja ire, letting prices be formed by the market spontaneously, In late February, Zhou Guanwu, president of Shougang and that there should be no regulation." Steel, the premier steel company in China, suddenly resigned, He refuted those in the party who complained that he while his son, Zhou Beifang, was attestedfor unspecifiedeco­ was proposing to go backwards, to retreat from the reform. nomic crimes. The father, a close friend of Deng Xiaoping, "Blindly worshipping and applying western economics text­ had pioneered the "contract manag!!ment" form of industrial books," Zhu said, "will have grave consequences ....The management as head of Shougangl Steel, while the son had western economics which is worshipped blindly is not even headed its far-flungHongkong opeqttions. In 1993, Zhou Bei­ the practice of western economies, but stuffin westerntext­ fang, in partnership with the young�st son of Deng Xiaoping books of economic theory. . . . Those comradesof ours have and the infamous Li Kashing in HPngkong, launched what not fully grasped western economic theories, even less the became known as "backdoor listings" in Hongkong. practical experiences of western economies and capitalist Five small or failing companie� listed on the Hongkong market economies, but they would go all-out to advocate the exchange were purchased by subsidiariesof Shougang Steel. market economy based on free competition, brandishing the These shell companies then acqui¢d a number of mainland stuff in textbooks, and letting an invisible hand guide the firms, and proceeded to pour money into Hongkong real economy. . . . The question is, is it still possible to find a estate and other speCUlative ventu¢s. This method not only market economy based on totally free competition in today's bypassed both the Beijing and the 1II0ngkong regulations for world? No." forming new listed companies, butialso provided a means to On the effects of the free trade policies on the economy, transfer Chinese government-owned companies into private Zhu said: "Since the beginning of last year, we have suffered hands in, at best, a quasi-legal manner. It was also widely overly great losses. Nothing is regulated now. . . . Presently, suspected that billions of dollars were illicitly laundered out fraudulent, fake, and substandard goods are prevalent; many of the mainland and into private accounts in Hongkong, some people no longer have any sense of quality or law, and are of it reinvested back into the mairUand, thus receiving the not public-minded or ethical at all . Price increases on the past special concessions reserved for "foreign investments." As year are not caused by a tight supply-demand situation, but enormous amounts of money flowed in and out of the main-

ElK June 23, 1995 International 43 land through Shougang and similar networks, the biggest real place for the relatively small number of Chinese investors and estate bubble in world history drove Hongkong prices to four speculators since the stock market died along with the Hong­ times the value of prime New York office space, with some kong bubble at the end of 1993. In a single day of tradingon mainland values in the SEZs not far behind. The bubble burst Feb. 23, about $150 billion in bond futures were traded. The at the end of 1993. governmentstepped in towardthe end of the day, closed trad­ The Beijing governmenthas reported that Zhou Beifang' s ing, and determined that SIS had been trading tens of billions arrest is not related to his Hongkong business dealings. It is of yuan worth of bond futures 00 its own account, without rumored that the charges will be related to an "illegal fund­ meeting margin requirements, in an attempt to get out from raising scheme" in Jiangsu Province with links to State Secu­ under a losing position. The government canceleda portionof rity. Li Kashing has reportedly expanded his connections the day's trading, and forced tradersto unwind their positions with the Shougang group, but the group's stocks have fallen through negotiations. The firm, partially owned by the city dramatically on the exchange. Li also, for the first time, government, may have lost several million dollars. moved a sizeable portion of his personal holdings in his Both Zhu Rongji and Premier Li Peng personallyvisited Hongkong corporate structure into a trust in the British Cay­ and investigated the Shanghai exchange. In March, a new man Islands, perhaps seeing the handwriting on the wall. director of the China Securities Regulatory Commission was The second scandal revolves around the Beijing municipal appointed. In April, the president and founder of SIS, Guan authorities and party leadership, and their connections to the Jinsheng, resigned, together with the chairman Xu Qinxiong. planned Oriental Plaza in Beijing, close to Tiananmen It is not yet known if there will be criminal charges. Square, which was to be built by Li Kashing. The original Here again there is a Li Kashing connection, although in plan gave Li 63.7% of the project, through his major holding this case the connection is not : as well known. When the company, Cheung Kong, and its main subsidiary, Hutchison Shanghai stock exchange was first set up, the government Whompoa. Last year, controversy arose over the height of provided funds to two existing brokerage firms, including the building, over a previously existing contract with a Mc­ SIS, as start-up money. SIS founder Guan Jinsheng, working Donalds on the same property, and over the percentage of in conjunction with Li Kashing, used the governmentmoney ownership going to Li Kashing. Broader questions of corrup­ to run a scam on the state-sector workforce. During the early tion then arose, and the investigation spread to 17 construction 1990s, Beijing dealt with recurring governmentliquidity cri­ projects, and 40 or so top officials, according to Hongkong ses by resorting to a "forced savings" policy against state­ press reports. The primary figurein the center of the scandals sector firms and employees, docking pay checks to pay for is Chen Xitong, the head of the Party Committee for Beijing governmentbonds which were only redeemable over a period and a high-ranking Politburo member. Chen was previously of years. SIS officials traveled the country, buying up these mayor of Beijing, and was one of the leading advocates of the government bonds for a fraction of the face value from des­ military crackdown against the 1989 demonstrations. perate workers who needed the cash to survive the record On April 4, the executive vice mayor of Beijing, Wang rates of inflation. These bonds were then discounted with Li Baosen, committed suicide some time afterhis secretary had Kashing, providing a windfall for SIS and for Li Kashing­ been detained for questioning. Wang was the head of the city an auspicious beginning to the "free market" ! In the absence Planning Commission and a former aid to Chen Xitong. After of adequate regulation, such scams were run with impunity. three weeks of intense speculation, Chen Xitong resigned as SIS fared less well this year with their criminal manipula­ head of the party (although he has retained his position on tion of the futures mark ets, which resulted not only in the the Politburo). Chen's son Chen Xiaotong sometimes called dismissal of those responsible, but also in the elimination of "Beijing's Li Kashing," who runs one of the top hotels, is the bond futures market altogether on May 18. The govern­ also under investigation. Again, no exact charges have been ment regulators announced that the "experiment" in bond announced, and Li Kashing was not publicly named in any futures was indefinitely suspended. Over the past months, in criminal matter. According to theMay 6 London Economist. fact, the government has banned futures trading in foreign Li Kashing has "proclaimed his probity and threatened legal exchange, steel, sugar, coal, rapeseed oil, and certain varie­ action against anyone who suggests otherwise." ties of rice. The British effort to create a series of "new Chen Xitong has been replaced as Beijing Party chief by Hongkongs" in the mainland is suffering a severe blow. Wei Jianxing, a Politburo member who is himself in charge of the party's anti-corruption investigation. The Oriental Hongkong 'spin doctors' Plaza is on hold. The Hongkong and British press have attempted to hide The third major scandal involves Shanghai International the clear intent of these measures by reducing them all to Securities (SIS), the leading securities broker in the Shanghai mere machinations of power struggles in a classical Chinese exchange. On Feb. 23, SIS was caught in a massive price Dynasty change. The general spin is that Jiang Zemin is rigging of governmentbond futures during a day of total panic running all these "purges" in order to establish his indepen­ on the market. The bond markets had become the favored dence from Deng Xiaoping before Deng dies, to avoid the

44 International EIR June 23, 1995 fate of Mao Zedong's chosen successor Hua Guofeng, who had been quickly deposed after Mao's death. Much is made of the fact that the Zhou family of Shougang Steel was close to Deng, and that one of Deng's children is part of the Shou­ gang corporate structure in Hongkong. Such media deceit not only covers up the scope ofthe anti-corruption actions, China but also feeds into the primary British operation in the Asia Kissinger's theater today-the intention to break up China in the period following Deng's death, through economic warfare and pro­ war voked civil or regional war. This is an exact replay of the comes to Congress by Kathy Wolfe British policy during and after World WarII , as documented in the May 12 EIR Special Report, "Britain's Pacific Warfare against the United States." Following Henry Kissinger's attack on China as a strategic For example, the May 11 issue of the Far Eastern Eco­ threat in a March 29 speech in London, former British Prime nomic Review from Hongkong reports on the measures taken Minister Margaret Thatcher's petpolitician George Bush and against Li Kashing's allies under the title "Palace Purge," friends have begun a preelection attack on President Clinton calling the arrestof Beijing partychief Chen Xitong "the first over China and Asia policy. public shot fired in the struggle to succeed ailing patriarch Despite Kissinger's past as a� architect of the U.S. Deng Xiaoping," ignoring the now generally recognized fact "China card" policy, the newly beknighted former secretary that that "struggle" has been going on for years and is now of state is now raising the alarm against Beijing. In a March quite firmly settled. Most revealing is the fact that the cover 21 speech in Bombay, India, Kissinger said bluntly that it is story of that issue was entitled "Fragile China," a report China per se, with its "extraordinary economic progress," on the supposedly "futile battle" to hold China together. which threatens "especiallyNortheast Asia," because China Britain's preeminent China specialist, Gerald Segal of the "is on course to emerge as an extraOlrdinarysuperpower with­ International Institute of Strategic Studies in London, is in 20 years." In his March 29 speech to a conference of the quoted saying: "The bottom line is that if you want to run a Royal Institute of International Affairs (RIIA) in London, modem, market economy you cannot do so in a country of Kissinger demanded that the United;States adopt British geo­ this size without federalism-full stop ....So something political policy, that China must �ot be allowed to grow has to give. The party can give way, accept decentralization strong. "It is against the American interest that any major and learnto live with this new world. Or it can fight, in which region of the world, either Europe or Asia, be dominated by case it will face economic problems, or political ones, or any country," he said, also predicijng an outbreak of wars both. There is no going back." in Asia. Similarly, the May 20 issue of the Economist covers the The Kissinger theme has now been picked up by Bush arrests as nothing more than Jiang Zemin's "chance to purge networks in the United States. Their promotion of the June a few political rivals and slightly improve the party's popular­ 8-11 visit to the United States of Taiwan PresidentLee Teng­ ity ." However, the same issue also carries an indirect re­ hui is but one move in a plan to demonize the People's sponse to the May 12 EIR Special Report on Britain's historic Republic of China (P.R.C.) "as if it were some sort of 'evil and continuing warfare with the United States. The Econo­ empire,' " Dr. Lawrence Niksch, Asia director for the Con­ mist reviews a book by Chinese historian Lanxin Xiang, gressional Research Service, warned a Capitol Hill seminar "Recasting the Imperial Far East," which was featured prom­ on Taiwan on June 1. He noted that theBus h group is mount­ inently in the EIR Sp ecial Report as a valuable documentation ing an attack on China, as a "lightning rod" to attack President of Britain's efforts to sabotage President Roosevelt's policy Clinton, for betteringU.S. relations to Beijing. of fostering a strong Chinese nation, preferring to keep China The major promoters of Lee's U. S. trip were the British­ weak and divided. The Economist admits it all, and defends linked Heritage Foundation; Bush'� ambassador to Taiwan the policy! "Certainly, Britain's view of China was colored and Beijing, James Lilley; and George Bush himself, Heri­ by its century-old dealings in a strife-tom country and its tage Foundation Asia expertBrett qppencott told EIR . They proven ability to extract profit from a chaotic economy," are working in Congress with SenSj. Frank Murkowski (R­ writes the Economist. But there is nothing wrong with that, Alaska), and Jesse Helms (R-N.C.), and Reps. Douglas Be­ since Britain was only trying to "make the best of a bad hand reuter (R-Neb.), and Benjamin Gilm.an(R- N.Y.). on protecting its commercial interests. Here, there was no This same group has inserted "Qver 20 pages of China­ hope of an understanding between Americans and British." bashing" into the major U.S. foreign aid bills this year,both British efforts to divide and weaken China have not changed, HR 1561, the "American Oversea� Interests Act," and its and the Beijing leadership is demonstrating an increasing Senate counterpart, the "Foreign Relations Revitalization ability to defend the country. Act of 1995," an aide to Representative Bereuter, head of the

EIR June 23, 1995 International 45 House International Relations Asia subcommittee, revealed ensure that China does not bedome more dangerous as it on June 7. grows richer and stronger, is to ensure that in practice, there is more than one China to deal With," IISS wrote. Clinton-bashing The Bush-fostered foreign aid bills are intended to paint President Clinton, for his part, invited Chinese Ambassa­ China as the new strategic threat, Niksch told EIR in a June dor Li Daoyu to the White House to say that the United States 7 interview. He noted that Bush's Ambassador Lilley had has a "one China policy, not a two China policy." told a June 1 forum on Taiwan on Capitol Hill that "the U.S. The British, however, want to remove President Clinton intends to 'encircle' China." Thd anti-China bills now before from office at all costs, to halt his programs for developing Congress are "part of the plan tOiencircle China," he said. not only China and Korea, but for stabilizing the Middle East, Ireland, and other areas. London and the Bush faction Contents of the foreign ai� bills have harshly criticized Clinton's plan for nuclear power de­ Provisions in the foreign aid ibills include: velopment in North Korea, which has gone ahead despite • A legal requirement as law that the United States admit their opposition in the U.S. Congress. the President of Taiwan in the future for informal visits; Now the Bush group is attacking Clinton on China. "The • A sharp expansion of U .SI. arms sales to Taiwan; Lee [Teng-hui] visit will have been very useful for the Repub­ • Wording on Tibet attack�g the national sovereignty licans," who plan to use China as the centerpiece of a major of China. Both require the Unit�d States establish a special attack on Clinton's foreign policy, Lippencott told EIR in an envoy to Tibet, to foster direct .elations with Tibet's break­ interview on May 26. "They will go after Clinton for backing away religious guru, the Dalai L�ma, treating the rebel prov­ down in face of P.R.C. pressure and for economic expedi­ ince of Tibet as a sovereign nation. ency. They'll attack Clinton as someone who fell for the The Senate version states: '�Tibet is an occupied sover­ myth of the Chinese market, the myth that says this is 1.2 eign country under international law and its true representa­ billion people, you have to be deferential to Beijing .. .. tives are the Dalai Lama and the Tibetan Government in "The Republicans will say: 'The U.S. was deferential, Exile. . . . Because ofthe invohtntary loss of their sovereign­ and we got nothing for it. They'll question how much China's ty , the Tibetan people are entitled to the rightof self-determi­ helped us in North Korea. They'll question how much China nation," i.e., to secede from China; is aiming to scale back democracy in Hongkong. They'll • Both bills require a "much tougher U.S. policy on question why China remains hostile to Taiwan. They'll ques­ Chinese human rights violation," Bereuter's office said, in­ tion China's nuclear development .. .. cluding a provision that would forbid President Clinton from "The Republicans will put it in a big foreign policy picture making a much-wanted visit to China, unless there is specific of, 'Look, we have Castro making a mockery of us, China is "progress" acceptible to the Republican Congress; a big problem,' they'll point to the Mideast or say India is a • Both bills condemn China's occupation of Mischief problem with repression in Kashmir. It all adds up-and Reef Island in the South China Sea (also claimed by the China will play a big part in it." Philippines) and call on the United States "to support our Conservative Revolution leaders such as House Speaker democratic friends" against "aggression" from China. Newt Gingrich (R-Ga.) and Sen. Phil Gramm (R-Tex.) will Sen. John McCain (R-Ariz.�, Gilman, and other Clinton say, "Be tougher on China," Lippencott predicted. "They'll critics "put tremendous pressure on the State Departmentto use China, saying, 'We didn't get what we wanted out of issue its recent warningagainst aggression in the SouthChina China, Clinton could not make China live up to their promises Sea," Niksch told EIR . "McCaiin'sMay 21 Washington Post of a market.' " commentary made the very, vet1ysignificant statement on the South China Sea that the U. S. must normalizerelations with China-bashing Vietnam immediately-specifi¢allyto contain China"; Since the 1820s Opium Wars, Britain has promoted the • Requirements that Chinese-made imports into the idea that China is a strategic threat to the West, as an excuse United States be certified that they were not made by forced for colonizing and looting China and for programs to reduce labor; its vast population. Britain's most recent articulation of this • Establishment of a new Cold Warprogram , Radio Free was a March 1994 report, "China Changes Shape:Regional­ Asia, to broadcast into China against the government. ism and Foreign Policy," by the London Institute for Interna­ The House bill passed the full House on June 9. The tional and Strategic Studies. "The reality in China is tending Senate version, sponsored by Senate Foreign Affairs Com­ increasingly toward developed power," the IISS study said. mittee Chairman Helms, has b¢n reportedout of committee, The IISS report called for China to be broken up like and Senate Majority Leader aob Dole (R-Kan.) says he Yugoslavia into regions, by dividing off Tibet, Taiwan, wants the Senate to pass it by the July 4 recess. President Mongolia, the western Muslim provinces, and the southern Clinton has said he would vet() the bill; whether votes exist areas nearby Hongkong. "It may be that the only way to to override a veto is unclear.

46 International EIR June 23, 1995 'Green' vicepres ident of Gennan parliament praises paganism · by Rainer Apel

"The anti-Christian current has set as its goal, the destruction which can be characterized as the, mother-hen for all the of the value of the Cross, emptying it of its meaning, by other radical environmentalist groups which sprang up in the denying that in it, Man finds the roots of his new life , and by meantime. As this newspaper has repeatedlydocumented, it claiming that the Cross is incapable of nourishing future was in Prince Philip's office that tile "green" Zeitgeist and prospects or hopes. Man, they say, is only a creature of the its "movement" was forged as a weapon against modern earth, which ought to live as if God did not exist." industrial society: On May 18, 199<), speaking before the So reads a key statement at the beginning of the new National Press Club in Washington, p. c., Philip took a stand papal encyclical, "Vt unum sint: On the Commitment to against Judeo-Christian values, sayiI).gthat for him, it is "now Ecumenicism," which calls upon all churches within the obvious that the environmental pragmatism of the so-called broad Judeo-Christian spectrum to strengthen their efforts to pagan religions such as that of thei American Indians, the oppose the onslaught of the Zeitgeist and of pagan cults. It Polynesians, and the Australian Abqrigines, is more reality­ especially points to the common martyrdom which all Chris­ oriented from the standpoint of en\!ironmental ethics, than tian religions have suffered under the onslaught of neo-pagan that of the rather intellectually monotheistic philosophy of currents such as fascism and bolshevism. The encyclical con­ the religions of revelation. " centrates on religious questions, questions of the commonali­ Prince Philip's false equationS--"nature equals pa­ ties and differences among the various religious communi­ ganism" and "destruction of nature equals Christianity"­ ties, and it goes right up to the edge of the realm of politics, are a central feature of the ecologica1 propagandaagainst the and even of economic policy, in that each of the various idea of population growth. Another central feature is the concepts of economics follows a distinctly different image claim made by contemporary anthropology (ecology's some­ of man. But together with previous encyclicals issued by what older sister-movement), that nUm is by nature a violent Pope John Paul II, what emerges is a general attitude of creature, and has always been a beast whose bloodthirstiness opposition to neo-liberalism, and especially opposition to the has been somewhat curbed, but never completely overcome. ideology of the Conservative Revolution (and its "green" It is further claimed that the old cults knew about the bestial variant), whose view of Man is that he is a beast. Venturing in Man, but that this has been suppressed by the modern far beyond the realm of the Catholic Church itself, the new religions, and that the cultish, primitive societies could sur­ encyclical reminds all Christian believers that in Christianity , vive better than our modern, more cpmplicated social order Man is understood as the image of God, as a creature who is can. The crisis of modern civilization, according to the an­ clearly distinct from the beast, and who possesses some of thropologists, is once again bringing)out the beast in Man­ God's positive-creative potential. The encyclical spreads op­ just look at the Balkans, Rwanda, et¢. timism that on the threshold of the third millennium, it is It has been necessary to preface our report with this rather indeed possible to better humanity's situation. long-winded discourse, in order to set the proper context for reading and evaluating a German-language book by Antje Prince Philip is the driving force Vollmer titled Heisser Frieden (Hot feace), which appeared This culturally optimistic conception of man stands dia­ shortly before the release of the papal encyclical. Antje Voll­ metrically opposed to the cultist conception, which, from mer, co-founder of the German Greenparty , at the instigation time immemorial , has been propounded by the oligarchy, of Christian Democratic parliamentarygroup manager Wolf­ and in modern times by the English monarchy, to the end of gang Schiiubele, and with the votes pf the Christian Demo­ manipulating its "subjects." It is therefore no wonder that cratic faction, was elected in 1994 to the post of vice president since 1961, Prince Philip, the Duke of Edinburgh, has been of the German parliament, the Bundestag. Had Mrs. Voll­ the driving force at the head of the World Wide Fund for mer's book appeared at an earlier point, it is quite likely that Nature (formerly the World Wildlife Fund) , an organization a number of parliamentari8:ns from the ChristianDemocratic

EIR June 23, 1995 International 47 Union and the Bavaria-based Christian Social Union-parti­ actually gods, and will rule over the city for one week." es which still at least like to consider themselves Christian­ During that one week ofcontinuous cult festivities, sacri­ would have had second thoughts about electing Schiiubele's fices are made throughout the city; animals are slaughtered candidate to one of the highest posts in our parliamentary in every locality-but in a special way, as Mrs. Vollmer democracy. describes: "Usually the thing to be sacrificed is something living: With bare hands, with a sharpenedthumbnail , a suck­ A book about violence ling pig's heart is tom out of its body . Then begins the time Mrs. Vollmer's foreword gives us ill forebodings of what ofthe Great Slaughter; all the streetsare covered with blood," is to follow. She begins: "This is a book about violence-a etc . At the conclusion of these "festivities," everyone drinks discomforting topic. Violence, long thought tamed, is now one more time from the blood ora freshly slaughtered buffa­ returning to Europe in devastating and archaic forms. Any­ lo, and goes into an "ecstatic, wild dancing, which refuses to one can confirmfor themselves this swelling tide of chaotic end, and grows wilder and more aggressive than at the outset. currents and goat-songs (tragedies), and can at the same time In former days, so it is said, it was not uncommon that one realize how impotent the culture of the modems is to deal of the Nava Durgas would fall to the ground, dead, after this with them adequately." Here Antje Vollmer uses a well­ excess. It was a dance of the dead. So powerfulwas its magic knowntrick from anthropology, not naming violence by its spell, that it literally determined life and death. Afterwards, real name, and acting as if violence were ubiquitous and the city and its inhabitants returned to their former peacable present in all men, and as ifthe distinction between criminals ways." and victims did not exist. Now, Antje Vollmer, who erroneouslybelieves that here Mrs. Vollmer does not wish to name names. "This book she has discovered echoes of the animal-sacrifice practices is based on an assumption," she writes in the foreword. "It of the Jewish and early Christian tradition, sees the Dassain proceeds from the assumption that the discussion about vio­ Festival as a sign of higher human development, since the lence goes astray whenever it inquires about the roots, the "transition from human sacrificeto animal sacrifice is found guilty parties, or the ostensibly lacking norms and values. at the start of all high cultures." But Mrs. Vollmer is quick Contrary to the usual practice, our investigation does not to add that everyone knows "at the same time, that this is not dwell upon the search for causes. It takes as a given, what always successful," since these festival days are seen "as the myths speak about: that violence has always existed, rowdy days, as eerie times when the old, outmoded orders since the dawn of human history." reclaim their rightful place and must be vanquished anew; At this point, one might be tempted to simply close the the old German tribes knew this, as well as the early natural book and cast it into thepile of those countless, trendy books religions of the Celts. The totem as a taboo area, within on "violence," none of which adds a jot to our actual compre­ whose bounds all is permitted: murder and incest, debauch­ hension of the subject. But her foreword also contains a ery (etc.)." strange formulation which makes our ears prick up: "With Has the Protestant theologian Antje Vollmer, we might this other view of the dark side of human history, I have ask, ever celebrated the Christian Christmas festival, which found that well-known concepts have often become murky , proclaims quite another mess�e? But she seems to have and previous judgments have been overturned: Sacrificial written offthe Christian religion: She does not look to Chris­ cults, myths, and rites were not, after all, merely instruments tianity to provide any solution to such "problems" as the for the enslavement of human souls through magic, but rath­ "immense influx [into Europe] of people from the East and er, were often also regulatory systems of great wisdom and the South"-a danger which she paints large in her book, knowledge about human nature." despite the possibility of industrial and agricultural develop­ Let us, therefore , see where theBundestag vice presi­ ment. "The real cradle of civilization," she writes, "is not in dent-who, by the way, is also a theologian of the German Europe at all; rather, it was on the dusty, redsoil of the land Evangelical Church-leads us on her journey toward the of two rivers, the birthplace of three world religions. But ostensible wisdom of the pagan oracles. She first takes us to what was thought, dreamed, passed on, and written down Nepal, to the Dassain Festival of theGods , which she herself concerningrules of social behavior, commandments, norms, attended a few years ago. There, in the city of Bhaktapur, and values, has now been almost completely used up." the climax of the days-long Dassain Festival occurs when the Mrs. Vollmer explains that in her opinion, "even a peo­ gods of the city (Nava Durgas) sacrifice a consecrated lamb ple's morality and ethics" is also "a finite resource; over­ atop a white stone; the lamb's blood trickles down onto a exploited, it, too, can go into decline, just as mineral depos­ crowd of peoplewho are concealed underneatha white cloth. its, rain forests, topsoil, and the ozone layer can." This is Now the magic moment is come, "when all Nava Durgas indeed an insane trainof thought,one worthy of Prince Philip drink from the freshly spurting blood. They immediately himself. become dizzy and go into a trance. This is the Incarnation: Mrs. Vollmer apparently got this idea from cultural an­ Now the Nava Durgas are no longer of this world, they are thropologist Rene Girard, author of the book Das H eilige und

48 International EIR June 23, 1995 die Gewalt (Violence and the Sacred), whom she frequently Up to now, apparently, no oQe in the otherwise astute quotes in her book, and who is highly respected by certain and "politically correct" German literary scene has gotten neo-pagan circles. Girard, in turn , in his own book, admir­ upset over this passage in Antje Vqllmer's book. Could it be ingly cites anthropological studies by one Edward E. Evans­ that this is because she is from � Green party? One need Pritchard of certain tribes along the Upper Nile, who believe only think back to 1988, when the Greens unjustly accused that man and beast have equal status. This English "research­ Bundestag President Philipp Jenninger of having made ex­ er" just happens to be the father of a certain Michael Evans­ cuses for the Nazis and their holQCaust, causing a scandal Pritchard, who of late has been functioning as one of the lead which forced Jenninger to resign, But now, almost seven actors in the English-oligarchical slander campaign being years later, a "green" Bundestag vice president can get away waged by the media against President Clinton. So the neo­ with picking out an ostensibly positive feature from the Nazi pagan, oligarchical world is rather small, afterall . era, actually writing it down on paper-and absolutely noth­ Mrs. Vollmer herself, who has apparently skimmed ing happens to her! Of course, elsewhere in her book, Antje through all this without giving it much thought, feels no need Vollmer is politically "correct" enough to include a condem­ to know much about the oligarchical background; all she nation of Hitler and Stalin, the "fascist-racist" and "socialist­ wants to do , is follow in the footsteps of many other promi­ bolshevik" variants of the "violent excesses" of the 20th nent people, and spread this neo-pagan propaganda far and century. wide. For example, in her book she expresses the view that humanity is almost inexorably and compulsively striving to­ The counterculture cult ward a "new barbarism," a bloodbath similar to the Thirty Antje Vollmer is not far off the mark with her observation Years War, because of the failure of the elites. The chief on the connection between Leni Riqfenstahl and modernrock reason why the elites failed, according to Mrs. Vollmer, is music. Years ago, it was reported that English rock singers that they were too late in taking to heart the wisdom of the were using old Hitler films, carefully studying his gestures old cults, because they were not quick to create new sacrifical as he spoke before mass rallies, and attempting to apply this rituals in order to channel people's ostensibly "innate" vio­ for their own purposes. lent proclivities (just look at the Nepalese Dassain For Antje Vollmer, rock musi¢ carries the seeds of the Festival. . .) and to usher in the "third phase of civilization." "third phase" of civilization. Since; 1989, i.e., since the end Nevertheless, Mrs. Vollmer says, there are some places of the Cold War, we have had a "bot peace," an extremely where a start could have been made, and perhaps could still unstable condition, she writes. There are "no longer elites bemade before it is "too late"-in the media, for example. which can entrustthemselves with such civilizing tasks," and "Ever since the 1920s, the new media have been the the "chief actors in the third phase pf civilization-<:rafty at coveted goal of political movements. The media set the aes­ surviving, experienced in doing without, responsible for the thetic criteria of our public places; they lend everything an whole, and yet still creative abou� the future-have yet to aura of irresistibility. Heretofore unimaginable possibilities appear upon the European stage." for influencing themasses open up for whoever becomes the "But also in European and American culture, artists and first to possess the new media. The media always play upon stars have in the meantime constituted themselves as a lonely people's curiosity and thirst for fascination, and thus on their avant-garde in the social processes of mollifying and taming creative potential, on their ability to marvel. At the same violence," Mrs. Vollmer explains in another passage. "With time, the media also prey upon their gullibility and defense­ a great sense of doing the obvious, and mostly without even less naivete," Antje Vollmer writes. She continues: "On the knowing what they are actually bringing about, they are la­ question of the usefulness of the new media, no one was boring together on this most diffic�lt work. Thus, they are more modern than National Socialism. In contrast to the far ahead of the politicians. They rare the true citoyens of pictorial arts-where what dominated, in keeping with the today's civilization. Within themselves they gather up the Fuhrer's tastes, were the quaint, and, in the final analysis, entire confusion of collective emotions and affects, and give harmless Nazi bacon-slabs in the manner of the 19th centu­ them an incomparable, authetic expression." ry-the films, the architecture of the grand plazas and show­ "Make love-not war! It's still happening today. Despite streets of Nazi culture were sensationally modern. This will all the denials, the Vietnam War was actually lost on the to form, this aesthetic bid for power is typified by Leni Rie­ fields of Woodstock," Mrs. Vollm�'s book says at the very fenstahl's films (which admittedly show a certain formal ge­ end. And though one might have doubts about whether that nius), and was further refined by Sergei Eisenstein. This will be enough to deter the Serbs (to take just one example), modernity is symbolized by the suggestive colorings and we are neverthelessanxious to see what course the Bundestag light-beacons, the almost mystical decorations of public will take under this vice president. �Soon, perhaps, we may places, and the mass marches. Today, every rock concert see bags flying as they did back in 1983-bags filled with contains elements of such a multi-dimensional intensity of Leni Riefenstahl's "suggestive dye�" so cherished by Mrs. experience. " Vollmer.

EIR June 23, 1995 International 49 Baroness Lynda Chalkertarge ts Kenya for tribalw-arf are by Joseph Brewda

British Overseas Development Minister Baroness Lynda 31, Leakey confirmed his foreign sponsorship. "I am given Chalker has been caught in a new plot to engulf Kenya in the time of day in the corridorsof power in Whitehall [British genocidal wars like those she is overseeing in Rwanda and Foreign Office], Washington, and Paris, not because I'm Burundi. The plot centers around toppling the government white, but because of what I've !done," he said. Thepaper of President Daniel arap Moi, through promoting the new added, "He says he will not hesitate to use his personal friend­ party of Richard Leakey, the environmentalist son of the ship with Lady Chalker, Britain's Overseas Development famous British anthropologist and British intelligence opera­ Minister, whom he met on his recent trip to Europe, to further tive Louis Leakey. his party's objectives." Moi's non-tribal government balances the two largest The Overseas Development Administration which Bar­ tribes, the Kikuyu and Luo, who have a long history of oness Chalker runs, was formed in 1964,to replace the Brit­ conflict, and who have their own tribal-based parties. If Moi ish Colonial Office, which was formallydisbanded as partof were toppled, neither opposing tribe could easily come to the policy of decolonization. "Decolonization" meant that power, raising the specter of the kind of ethnic conflict that the Union Jack would come down and the armies would destroyed neighboring Somalia in the aftermath of the fall of leave, but it did not mean that the British would leave. The the governmentof Siad Barre . ODA retained the colonial offic¢'s top officers, staff, files, The plot surfaced in early May, when Leakey, the former and agents-in-place. Officially ;in charge of all overseas head of the Kenyan parks department, announced that he grants, it funnels some $3.5 billion a yearto non-governmen­ was forming a new party to challenge the Moi government. tal organizations (NGOs), politioal parties, and other organi­ Leakey claimed that the public is "totally demoralized" over zations serving British geopolitical aims in its former colo­ Kenya's "slipping backward." "What I want to know," he nies. The Mwangaza Trust, run ;by Leakey crony Miute, is asked, "is why our schools have no running water and no typical of these NGOs. Last ¥arch, Moi denounced the books, why you can't get a simple antibiotic anywhere?" group as "coached by the Europeans." While the International MonetaryFund (IMF) was not men­ Among Baroness Chalker's tPp agentsis Ugandan Presi­ tioned, Leakey decried "corruption"and "mismanagement," dent Yoweri Museveni, who hasturned neighboring Uganda which he offered to correct through his leadership. The situa­ into a base of British operations throughout the region, in­ tion also requires a change in the Constitution, he said, to cluding against Kenya. In January 1995, the Ugandan-based end government control of radio and television, the civil "February 18th Movement," led by Kenya exile and Luo service, and the security forces. Leakey has called for a leader John Odongo, began military operations into Kenya boycott of the scheduled 1997 elections unless these constitu­ from easternUganda with the backing of the Ugandan Army. tional changes are made before then. Tensions further increased in April when Moi expelled the Rwandan ambassador over Ugandan Army-backed massa­ Another agent of her Baroness cres of 8,000 Hutu refugees at the Kibeho refugee camp in Joining Leakey in founding the new party was Paul Rwanda. Baroness Chalker, alope among all westernpoliti­ Muite, a Kikuyu politician and former president of the Law cal figures, justified the massacres, claiming in an April 22 Society, who feels that the problem facing Kenya is that "the BBC interview that only 300 people were killed. She dis­ European and Asian communities here tend to take a back missed the dead as "Hutu extremists ....It must be for the seat in politics." "Richard was born here," he said, "he's as governmentof Rwanda to restoJ!e order." Kenyan as I am." President Moi immediately condemned Leakey for want­ A continuing campaign ing to "destabilize the country" and to "return to colonial­ The assault against Kenya began in May 1990, when ism." He added that Leakey is using the "colonialist antics U.S. Ambassador Smith Hempstone gave an address to the of dividing Africans along tribal lines to exploit them." Nairobi Rotary club announcing that, henceforth, U.S. aid In an interview in the London Daily Telegraph on May would only go to those countries that "nourish democratic

50 International EIR June 23, 1995 institutions." The speech was taken by leading dissidents as orchestrated Mau Mau rebellion, which became the model an assurance that "they could oppose the government and for British efforts to destabilize the continent, including cur­ have the support of a major world power," according to the rent operations in Rwanda and Burundi, and those planned press. The Bush administration, loyally following the policy for Kenya. of Britain's Thatcher administration, opened up its coffers to From 1952 to 1960, the British had imposed a state of the British-run Kenyan opposition. Hempstone, formerly the emergency over their Kenyan colony . The purported reason publisher of the Anglophilic Washington Times, conduited was to combat a planned insurrection of the Mau Mau, a at least $3 1 million to the opposition parties-the Forum Kikuyu secret society dedicated to expelling the British. The for the Restoration of Democracy (FORD) and the Kenya existence of the Mau Mau , and th¢ir planned insurrection, Democratic Party . had been discovered by Leakey. In qrderto crush theconspir­ By November 1991, Kenya's westerndonors threatened acy, the British forced the mass resettlement of Kikuyu and that aid would cease unless Moi held "multi-party" elections. other peoples from their lands, and bUrntdown whole forests. While warningthat this crusade for democracy invited tribal The Mau Mau insurrection proved to be a strange one. warfare, Moi called elections for December 1992. Over 800 Whereas only 22 whites were killed in the fighting, an esti­ people were killed in tribal violence. As expected, FORD mated 20,000 natives died, primarily in clashes between Ki­ split apart in 1992 along tribal lines, with FORD-Kenya kuyu factions and with other tribes.iAgriculture in the white representing the Luo, and FORD-Asili representing the regions was untouched, and the Mau Mau failed to even Kikuyu. attack the vulnerable transportation network or any key facili­ In March 1993, Moi got into deeper trouble when he ty in the cities. Col. Frank Kitson later boasted in his intelli­ broke with the IMF, whose policies, he said, were forcing gence manual Gangs and Countergdngs that the British were Kenya to "commit suicide." IMF dictates had increased the leading large-scale Mau Mau units, and that many, if not all, price of bread 45-fold that year alone, while depreciating the of these units had been created by the colonial authorities. By Kenyan shilling by 60% . Both the FORD-Asili and FORD­ orchestrating violence between "gangs" and "countergangs," Kenya parties denounced the break. FORD-Kenya econo­ the British ensured that only native slaughter, and not revolu­ mist and prominent Nairobi businessman Robert Shaw com­ tion, would result. plained that Moi's refusal to comply with IMF dictates was The Mau Mau gangs were coveI1llydirected by Col. Mer­ "catastrophic ," and had "plunged Kenya's economy into the wyn Cowie, the manager of the Kenyan parks system. Fol­ Dark Ages and back into inefficient and corrupt state con­ lowing the emergency, Cowie's top aides found employment trol ." The similarity to Leakey's lingo is not accidental. Shaw as game wardens at the major parks, which remained as persuaded Leakey to form his new party, according to British intelligence enclaves following independence. In the Kenyan sources. 1960s, Cowie retired from the parks departmentand returned Although Moi backed down in the face ofmassive British to England, where he became a top executive in Prince threats, he has since renewed his campaign. On June 9, he Philip's World Wildlife Fund. The WWF has been the British told a rally that henceforth "the government willnot swallow royal family's key intelligence arm since its creation in 1961. wholesale all conditions of the [IMF] structural adjustment The vast parks of Africa, which in Kenya comprise 8% of its programs that are detrimental to the welfare of the common territory, remain safe-havens and training grounds for Mau citizen." The donors have called an extraordinary Paris meet­ Mau-modeled, WWF-steered insurtections throughout the ing in July in response, citing "fears regarding some aspects continent. of economic reform," as well as concern over"human rights In 1988, Richard Leakey, the longtime head of the East abuses and corruption in the political elite." African Wildlife Society, took chaJlge of the parks depart­ ment, and continued the traditions of his father. Like father, like son In September 1988, Leakey began a high-profile press The Leakeys are old hands at using tribal conflictto desta­ campaign, claiming that gangs of poachers were wiping out bilize Kenya, and have been involved in such tricks since the the country's elephant and rhinoceros herds, and that the beginning of the century. Richard Leakey's grandfather, a governmentwas only "paying lip serVice" to protective mea­ missionary, came to Kenya in 1901, and translated the Bible sures. Aftera WWF-coordinated international press barrage, into the language of the Kikuyu. Louis Leakey, Richard's the governmentcapitulated to demands todeploy paramilita­ father, was recruited into British intelligence at least by the ry squads to protect the elephants. By the end of the year, 1930s, when he authored a 1 million-word secret profile of Leakey's squads had killed over 30 rtportedpoachers , most­ the tribe, and its vulnerability to manipulation. Operating ly minority Somalis. Security forcesiwere ordered to "shoot under the cover of an anthropologist, Leakey played an im­ on sight" anyone suspected of poaching, while thousands of portant role in British East African operations during World people living near the parks weredeliained . In 1992, Leakey War Il. was fired after his boasting about J!laving killed scores of After the war, Leakey played a major role in the British- Africans in these man-hunts provoked international outrage.

EIR June 23, 1995 International 51 Italy at the crossroads

The London-centeredJorces plan a modem version qfltalianjascism, without Black Shirts. Firstqf aseries by Claudio Celani.

The question "Is there a fascist danger in today ' s Italy?" must The two alternatives of the oligarchy be answered "No" if the term "fascism" refers to Mussolini' s Gianfranco Miglio, a leading spokesman of the Northern historical model. But if the fact is established, that the Black League from 1989 to 1994, explained at a business meeting Shirts were only one of the various kinds of jacobin popu­ in Cernobbio in September 19913 that the two alternatives for lism, then the answer to our question is "Yes." the oligarchy in Italy are: sepllIatism or dictatorship. "The When Margaret Thatcher presented her book The Down­ centralized system is the root of corruption," he said, "and if ing Street Years in May 1993 in Paris, she declared that we want to maintain it and clear it up, we should move to an both Italy and Germany could not be considered real nations. authoritarian State, a State no longer based on law and with­ In Mrs. Thatcher's statement one finds the whole signifi­ out a democratic Constitution.'1 The alternative, Miglio said, cance of the so-called Italian revolution which, initiated by is "federalism," the division ofl. Italy into cantons, like Swit- London-centered forces after the German reunification, has zerland. started a process of demolition of national institutions whose The irony is that the destI1lction of old political parties intended outcome should be the reduction of Italy to a mere boosted not only the rise of the Northern League (which "geographical expression," as Austria's Prince Metternich became the largest parliamen(ary bloc in the last political characterized it in the 19th century, when the nation was elections), but also of a party c�lled National Alliance (AN), divided into several small states and ruled by an oligarchical which is also called "post-fa$cist," since it was born out system. of the old Movimento Social� Italiano (MSI), which was Since 1993 Italy has been governed by technocrats com­ inspired by Mussolini's Salb Rkpublic. ing from the Bank of Italy (first Carlo Azeglio Ciampi, then Today, AN leader Gianfranco Fini has officiallyrepudiat­ Lamberto Dini, with the short interlude of TV magnate ed historical Fascism, in favor of free-marketpolici es. Fini's Silvio Berlusconi) who have no popular mandate , and whose liberal "centralism" is playing �he role of phony opposition to task is to impose the destructive policies ordered by the the League's localist thrust, inithe typical gang-countergang International Monetary Fund. Such a situation has been system worked out by the ps�chological warfare experts at possible thanks to the manipulation of public opinion the London Tavistock Institut�. After a trip to London early through London-directed scandals, which have imposed the in 1995 , Fini and Miglio ag�ed on a common reform of myth that "politicians are corrupt" and that they have trans­ Italian institutions, combining a "federalist" Constitution formed the central State into a giant corruption machine. with a presidential system. While such a reform sounds like Ergo, government must be put in the hands of "non-politi­ the American constitutional system, the reader should not cians" and the presence of the State in the national economic fall into the trap: Whereas for the United States a federalist life must be reduced. Constitution meant a process of unity, for Italytoday it would In reality, the technocrats' aim is to so drastically weaken be exactly the opposite, especially because the main idea the power of the centralState as to make possible the physical behind this proposed "federaHsm" is to take away the power dismemberment of the Italian nation, helped in this by the of taxation from the central Stllte. newest creation of the "Conservative Revolution," the Miglio's second alternativ¢ to federalism, a dictatorship, Northern League (Lega Nord) . This article will try to present would play on a chauvinistic :"national" model, whose aim to an American audience how all this was put into motion. would be not to promote eCOl�omic development but to im­ It will necessarily be a simplified picture, but we hope it pose budget cuts, especiallyiIll social spending. Such a model will supply a key for reading Italian events both for the is based on the same principle'of "territorial identity" pushed ordinary reader and for policymakers who otherwise depend by the Northern League separatists, and denies the universal for their analyses on the lies and mythologies spread by the values of the real Italian national identity, born out of the international media. Renaissance.

52 International EIR June 23, 1995 The debate on the two oligarchical models unfolds in occasion, the inauguration of the Eden Hotel, belonging to the pages of the geopolitical magazine Limes, which can be the Anglo-Italian Charles Forte. Th�tcher was accompanied, considered the theoretical laboratory of the Italian "Conser­ among others, by Lord William Rees-Mogg, the spokesman vative Revolution." Limes is published by Count Carlo Cara­ for the Club of the Isles, the Duke OIfMarlborough, Lord and cciolo, who also publishes the weekly Espresso and the daily Lady McAlpine, and the present London Times editor, Peter La Repubblica. His father, Prince Filippo Caracciolo, was Stothard. The strict "right-wing" pr()fileof the Britishgentle­ a British agent during World War II under the codename men did not keep Carlo De Benedetti from being one of the "Commander Phillips." Caracciolo is allied to the Agnelli few Italian businessmen seated at Mrs. Thatcher's side. De family which, in addition to owning the first Italian private Benedetti, head of the Olivetti group, is a business partner of financial group, FIAT, also publishes the daily La Stampa. Carlo Caracciolo and, like the Catacciolos, belongs to the Gianni Agnelli's wife, Marella, is Carlo Caracciolo's sister. "progressive" faction of the financial oligarchy. The Agnelli siblings, Gianni, Umberto, and Susanna More important was the delegation of Italy's "black no­ (Italy's present foreign minister) are members of Prince Phil­ bility" (the families that, afterthe Piedmontese troops entered ip's 1001Club , which gathers the outer circle of the interna­ the Pontifical State in 1870, wore black robes as a sign of tional oligarchy. If we want to go a step higher, we have to mourning, and dominated the Vatioan Curia until Pope Paul go through Enrico Cuccia, the real manager of Agnelli and VI expelled them) . Among others,. there were the Marquis Caracciolo's financial interests. Cuccia, 90 years old, is the Sacchetti, Baron Salleo (director general of the Ministry of head of Mediobanca, a merchant bank which controls the Foreign Affairs and cousin of Antonio Martino, about whom largest banking-insurance group in the country, Assicurazio­ we will speak later) , Count and Countess Pecori-Giraldi, and ni Generali. A look at Generali's board gives the names Count and Countess Attolico. The l�st two names reveal the of members of the "central committee" of the international extraordinary continuity between the present Italian revolu­ oligarchy, the "Club of the Isles." tion and Fascism. In this central committee the decision was made in 1993 to launch the Clean Hands anti-corruption investigation, . From Mussolini to Thatchelt which has been used to foment ajacobin mood and to destroy • Giacomo Attolico is the Italian ambassador to London. the traditional parties which took part in Italy's Constitutional He recently organized, together with his colleague in Rome, Convention in 1946. The "new" forces that emerged thereaf­ Sir Patrick Fairweather, a long list of humiliating visits of ter are all conditioned by the jacobin "paradigm shift," and Italian political leaders to the City of London , starting in 1994 are either deliberate or de facto vehicles of the oligarchical with leftist leader Achille Occhettp and Northern League projects. spokesmen Maroni and Pagliarini, and in 1995 with Oc­ chetto's successor Massimo d' Alema and post-Fascist leader Mrs. Thatcher and the black nobility Gianfranco Fini. Attolico is no diplomat. He is a count whose That spring of 1993, Baroness Thatcher thought it inop­ family played a major role in British geopolitical schemes in portune to present her book in Rome , given a few insulting both the First and Second World W us. statements which the book contained against former Premier Count Bernardo Attolico (1880-1942), Giacomo's fa­ Giulio Andreotti and other Italian politicians. She chose to ther, was the author of the Steel Pact between Mussolini and hold a conference in Milan, where she was introduced by the Hitler. Ambassador in Berlin from 1935 to 1939, he worked moderator as "the woman who has initiated the Conservative along the lines of British strategy ! in support of the Nazi Revolution in the world." Joining her on the podium was the regime with the perspective of an "Qnly eastward" war. Pre­ present European Community Commissioner Mario Monti. viously, during World War I, Attolico had started his career In the audience, in the front row , sat former Italian President in London, firstas Italian representative in the committee for Francesco Cossiga. Both Monti and Cossiga are leading rep­ food supplies, then as chief of the Italian delegation for war resentatives of the "visible" part of the mercenary troops purchases. Afterwards, he joined the War Purchase Execu­ that have carried the offensive in the anti-State revolution. tive and the Allied Maritime Transport Executive. Practical­ Cossiga, in fact, when he was still President in 1992, started ly, Attolico was the intermediary between the Italian govern­ to attack the Parliament, characterizing the political parties ment and the Morgan bank, which financed all members of including the Christian Democracy to which he belonged as the Triple Entente (Britain-France-Russia). The payment of "Cosa Nostra" (Mafia). He then used his people in the secret that debt dictated afterwards the heavy conditions imposed government apparatus to start the "anti-corruption" investi­ on Germany with the Versailles Treaty, which ensured the gation. Mario Monti is a free-market "guru" who has pushed rise of Nazism. for dismantling welfare and for privatization of State-owned • Galeazzo Pecori-Giraldi, member of an old noble dy­ industry. nasty from Bergamo, is part of the. "Britannia boys," who Two years afterthe Milan event, Baroness Thatcher went met on June 2, 1992, on board Queen Elizabeth's royal yacht to Rome and gathered her troops on an apparently mundane to map out Italian privatization. At that meeting, the plan for

EIR June 23, 1995 International 53 privatization was presented by Peter Baring , whose banking Pietro, the Milan prosecutor who in 1993 started the Clean "expertise" led to the spectacular bankruptcy of his bank Hands probe into "political corruption." Di Pietro, who re­ earlier this year, thanks to derivatives speculation. signed from the judiciary in 1994 to start a political career, "Britannia boy" Pecori-Giraldi is manager of the Italian is the major culprit for having turnedthe Italian judiciaryinto branch of Morgan Stanley which, following the British plans, an instrument of political persecution. But he has only been has been named as an adviser for the privatization of the a tool . Italian State communications holding STET. It is, together Among Carnelutti's friends im 1924 was Antonio Segni. with the planned sale of the electricity company ENEL and Together the two founded the Rivista di diritto processuale (a the oil company ENI, one of the biggest privatizations, be­ trial law review). Segni, who later served as Italian President, cause the value of the holding company is estimated at about was the political mentor of Francesco Cossiga, who inherited 30,000billion Italian liras ($18 billion). Segni's network at his death. Cossiga, in turn, has been The present Count Pecori-Giraldi too, belongs to a family protector of Antonio Di Pietro, both when he was a prosecu­ directly involved in the rise of Mussolini's Fascism. Ga­ tor and also later, when Cossiga i pushed Di Pietro to start a leazzo's grandfather, Marshal Guglielmo Pecori-Giraldi, political career. Carnelutti's friend Segni had a son, Mario was commander of the Rome military district during Musso­ Segni, who has made a politic� career as an institution lini's Marchon Rome (1922). When King Victor Emmanuel wrecker. It was Mario Segni who started the "referendum III had to decide whether to sign the decree prepared by movement" that called on the voters to decide, by referen­ the government which would have imposed martial law and dum, whether Italians need political parties or not to elect blocked the Fascist march, he called Pecori-Giraldi and Com­ their representatives to the Parliament. The referendum, mander in Chief Armando Diaz, who said that the Army which took place in 1991, was seen as the signal that Italian would obey orders, but that it was advisable not to issue public opinion was ripe to be manipulated into the radical­ them. populist "Conservative Revoluti()n." To be members of families that played an active role in Fascism or supported it in some form does not authorize an George Bush's network automatic "hereditary" judgment of them. However, in our The Carneluttilegal firmis runtoday by Francesco's son, case we have families that have acted through successive and has offices in New York and London. A member of the generations, in a continuity of economic, oligarchical, and New York office is Richard Malrtin, former FBI agent and especially cultural connections,·which must be taken into former "special representative" in Rome of George Bush's account in order to understand contemporary history. Attorney General Richard Thornburgh, from 1987 to 1990. Martin is the main supplier of Mafia witnesses at the present 'Venetian' fascists trial against former Italian Premier Giulio Andreotti. The For a deeper look, let us take the example of Dino Grandi, most powerful politician until �993, Andreotti represented a Fascist "Quadrumvir" of the March on Rome, who was the unshakable power of the Christian Democratic Party, a more reliable than his jacobin peers for running the delicate party which was based on a coalition of interests from all job of foreign minister. In a precious interview given before classes of society. his death to Giangiacomo Migone, his diplomatic scion and For some reasons, Andreotti could not be destroyed by today "foreign minister" of the post-communist Party of the the "anti-corruption" investigation, but the job was done Democratic Left (PDS), Grandi recounted how he was cho­ through accusations of connections to the Sicilian Mafia. sen by Salvatore Contarini, Grand Old Man of the Anglo­ The operation against Andreotti started after the two most Venetian oligarchy and director general of the Foreign Minis­ experienced anti-Mafia investigators, Giovanni Falcone and try , to run foreign policy for Mussolini's government. Later, Paolo Borsellino, were killed in :1992. Richard Martin's Ma­ in 1943, when the oligarchy decided to overthrow Mussolini fia witnesses have destroyed Andreotti and, through An­ to gain better terms of surrender with the Allied powers, dreotti's destruction, dealt the final blow to the Christian Grandi was given the task again. Democratic Party . We ran into the figureof Grandi when we decided to track Another associate of the Carneluttilaw firm, in Rome, is down the fortunes of a character whose name springs out of Vincenzo Figus, who, according to reliable sources, orga­ the Anglo-American networks involved in the juridical as­ nized financing for a pro-League publication, Padania. pect of today's Italian anti-State revolution. In 1941 Grandi named after the plain along the Po River, in northern Italy. was justice minister and carried out a reform of the Civil Even the most skeptical reader will conclude that these Code according to Fascist criteria. The man he appointed to are too many coincidences. We are dealing with a political do the job was Francesco Carnelutti, whose legal office in network whose visible representatives (Bush, Thatcher) are Rome handled the famous political trials in the postwar peri­ identifiedwith precise and knownpolici es, and whose histor­ od. One of Carnelutti's proteges was Arbace Mazzoleni, ical origins bear oligarchical footprints. who, 40 years later, became the father-in-law of Antonio Di To be continued.

54 International EIR June 23, 1995 AustraJja Dossier by Allen Douglas

Expose of royals draws blood the prompting of Prince Philip, been One of Prince Philip's lackeys has filed "racial vilification" spearheading the move for "land rights" for the past two decades. Be­ charges against LaRouche's co-thinkers . cause many Australians are becoming increasingly upset over the fact that 30% of their country is now being locked up under "World Heritage," On June 7, the leader of the Labor and the publications themselves are "conservation," or "Aboriginal land Party in the Australian Capital Terri­ presented quite professionally, but of rights" guises, tJte Labor Party would tory (ACT), Canberra, Rosemary Fol­ course they are manipulations of fact. urgently wish to put a lid on the EIR­ lett, filed charges against Lyndon ...The headings, for instance, typi­ New Citizen charges. LaRouche's Australian co-thinkers, cal headings in these articles, are 'In­ Follett's mdVe, in the short term the Citizens Electoral Councils digenist Plot to Destroy Australia,' at least, has done exactly the opposite. (CEq, with ACT's Human Rights and ' Are Anthropologists Creating CEC National Secretary Craig Isher­ Office. Follett complained that mate­ Another Chiapas in Australia?' Of wood appeared on the television eve­ rials distributed by the CEC relating course, that was a well-known terror­ ning news in Canberra and on several "to Australia's indigenous peoples ist group that resulted in a great many radio shows to refute Follett's have no other purpose than to incite murders and there are pictures charges, including on one drive-time hatred, contempt, and ridicule of Ab­ throughout the article of murdered radio interview with Follett herself. original people," and therefore breach people, The clear implication is that One of the main charges of EIR the ACT's Discrimination Act. this has something to do with Aborigi­ and the New Citizen is that anthropolo­ Follett apparently did not read the nal land rights. In fact, all of the mur­ gists created the whole "land rights" relevant documents-"Prince Phil­ der victims are from other countries." movement from scratch, with the fi­ ip's 'Indigenist' Plot to Destroy Aus­ The charge that "indigenous nancing and political direction from tralia" (an EIR Special Report in the rights" would lead to bloodshed was the Australian • Conservation Foun­ April 28 issue), nor the April-May in fact emphasized by the chief orga­ dation. New Citizen, which featured part two nizer of land rights in Australia, Prof. Typical of how this works is the of a major expose entitled "The Fraud Henry Reynolds of James Cook Uni­ Hindmarsh Island bridge dispute, of Aboriginal Land Rights." Had she versity, in an interview printed in both which has been ,prominent in the na­ done so, she would have seen that the publications. tion's press for several weeks. Federal person marked out for "hatred, con­ Follett's charges were curiously Aboriginal Affairs Minister Robert tempt, and ridicule" of the Australian timed. That very same afternoon, the Tickner stopped a $5 million bridge population, if anyone, is the royal federal Senate was scheduled to de­ across to Hindmarsh Island in South consort, Prince Philip. bate "racial vilification" ws,la which Australia, and a related $100 million Through the Australian Conserva­ the ruling Labor Party has been trying construction prqject, because the site tion Foundation, which Prince Philip to ram through the Parliament for was nominally involved in "secretAb­ set up in 1963 as a branch of his World months. A couple of days before , original women's business." Wildlife Fund (WWF, now World again with timing fortunate for those Tickner stopped thebridge with­ Wide Fund for Nature), he founded trying to force the legislation through, out ever knowing what the actual is­ Australia's "Aboriginal land rights the grave of Eddie Mabo was dese­ sues were, since he, as a male, was movement," using Aborigines as can­ crated with swastikas. Mabo had been not allowed to know what the "secret non fodder, in order to splinter the organized to file the case, which be­ women's business" was all about, but Australian nation-state. came known as the famous 1992 High took the wordof a female anthropolo­ Follett herself came close to ad­ Court "Mabo decision," which gist, who was allowed to examine the mitting the Special Report charge that opened up most of Australia to land "secrets. " all this is heading toward the same sort grabs under "Aboriginal" auspices, by However, it has now emerged of separatist violence which has ac­ Professor Reynolds. from the testimony of an Aborigine companied the WWF's similar activi­ The general assessment in Can­ who was involved in manufacturing ties in other nations, on a Canberra berrais that Follett is acting as a eat's the entire episode, that the "secrets" radio show on June 8: "The articles paw for the Labor Party, which has, at were a hoax fromthe beginning.

EIR June 23, 1995 International 55 InternationalIntelligence

that we have, in our less creative era, come bombing in late 1993, was also recently Heat on John Major to take for granted. This one man developed caught at the Indo-Nepal border. Indian of­ over Iraq inquiry a prototype design for a helicopter; designed ficials are also concerned by reports that a motor for a "flying machine" modeled on agents of the Pakistani Inter-Services Intel­ The BBC on June 6 raised the possibility the internal mechanisms of a clock; de­ ligence (lSI)! have been using Nepal. Visas that an investigation into British officials' signed prototypes for sand-clocks, astro­ are not requ�red by Nepal citizens to visit nomical clocks, wheel-gear-driven clocks, involvement in sanctioning arms deals to India. etc.; devised entire canal and hydraulic proj­ Iraq during the 1980s could topple Prime Minister John Major from power. Major is ects, for transportation systems, water-driv­ en energy, and the like; developed a model extremely shaky following his party's heavy 'Chiapas model' presented "steam-engine"-driven cannon 300 years losses in local elections . before James Watt; revolutionized military to Argentine military BBC obtained a copy of a draft report weaponry and war-fighting and fortification written by the official commission, headed technologies; and made significant break­ One hundre

56 International EIR June 23, 1995 • SOUTH �FRICA struck down the death penalty on June 6. The unanimous decision by the II-mem­ ber South African Constitutional Court, was its firstsince it was estab­ thanks to general omertii [code of silence 1," April 7-21 period, are close to absolute lished last F¢bruary. The office of Guerzoni stated. equality, with the exception of Jacques Che­ President Nel on Mandela called the If the Red Brigades were really what minade. ' Finally, there is Mr. Michel Polac, f court's delibttations "sober and hu­ they declared to be, Guerzoni said, they who wrote in the April 22 issue of Libera­ mane," but Deputy President F.W. would have published all the information tion: 'If the supply was bigger this year, the De Klerk vowed to lead a campaign they had gotten from Moro on corruption quality of the debate seriously regressed. for a constitutiional amendment to re­ inside the Christian Democracy and on other One could feel the government control and instate capital punishment. sensitive questions. Instead, they kept the the careerist prudence of the television pro­ secret and what they published afterward fessionals. The best example was the out­ • HENRY KISSINGER, at an was manipulated and censored. The day burst against candidate Cheminade during event sponso�d by the Norddeutsche after Moro's capture, Guerzoni said, the his TFI interview.' This sets the record Landesbank in Hanover, proclaimed Italian governmentasked the American CIA straight; I have nothing else to add," con­ that it was a mistake to recognize for collaboration in tracking down the kid­ cluded Cheminade. Bosnia, a "c�struct without its own nappers . "The answer came after two weeks language," asia nation-state. He was and was negative, because, they said, the invited to help celebrate the bank's CIA capabilities of foreign activity had been 20th anniversflryon June 9. restricted. In reality, such capabilities did Rhine-Rhone canal legally exist." According to Guerzoni, there • AN ASSAD-RABIN summit is was in American circles "a political judg­ Philip's latest target not out of the question, according to ment and something more" against Moro. WarrenChristopher. The U . S. secre­ British Royal Consort Prince Philip's fanati­ taryof state said at a pressconference cal crusade to stop human population in Amman, J�rdan, on June 12, that Cheminade finally gets growth in the name of quack "ecological" Syrian President Hafez aI-Assad and science is not dampened by his imminent Israeli Prime Minister Yitzhak Rabin to reply in Le Mond e retirement as president of the World Wide might meet at a certain stage of the Fund for Nature . He showed up in France in Mideast peac� process. The June 8 issue of Le Monde, France's June on a WWF campaign to block con­ "newspaper of record," finally published struction of the vitally needed Rhine-Rhone • KARACI/II, Pakistan was former presidential candidate Jacques Che­ canal (detailed in EIR of Aug. 5, 1994). In brought to a halt on June 6 by drug minade's reply to an article calling him a an interview to the French daily Le Figaro terrorists fro� the Mohajir separatist "bad loser" for having blamed his low score on June 7, Philip said that the Rhone tribu­ movement, who forced shops to in the recent presidential elections on the tary area in France between the Saone and close and burnedvehic les. The death media hate campaign against him. Che­ Doubs valleys is one of the "richest ecosys­ toll rose to nearly 60 over the two­ minade is a longtime associate of American tems," with "wild flora and fauna." The week periodprior to June 6. The Mo­ economist Lyndon LaRouche. "priority objective" for such a region is hajirs, whose: leader lives in London, "Called a 'bad loser' in an article pub­ "conservation." He droned on, about how have been w�rking to make Karachi lished by your newspaper on Tuesday April river systems should not be "seriously ungovernable! in a bid to destroy the 25, I would like to bring to your attention changed by man," since, left to themselves, governmentof Benazir Bhutto. three opinions which go in my direction. they "naturally" stem flooding, and so on. First of all, a letter dated April 20 of the He said he was active against dam and canal­ • BARONESS CHALKER, the National Control Commission of the Cam­ building not only in France, but for the Dan­ overseer of tile slaughter in Rwanda, paign to Elect the President of the Republic: ube in Hungary and Slovakia, and in Swit­ has personally threatened Nigeria, 'Afterhaving read and heard the informa­ zerland, Spain, and Greece. according to a June 8 item in the Lon­ tion programs of TFI, France 2, and Radio He also said that his own "principal con­ don Times: '!Unless Nigeria's mili­ France that you denounce, the Commission cern" as WWF president, is "money," and tary government restores democracy considered that the balanced treatment in to make sure that there are "strict financial and respects human rights, the coun­ the presentation of the candidates, of their controls" about how it is spent. As usual, try might b¢ suspended from the comments, and their declarations, had not he harped that the overgrowth of human Commonwe�th, Baroness Chalker, been fully respected.' Next, the April 24, population is putting an undue demand on the Overseas :DevelopmentMinist er, 1995 report of the High Audiovisual Com­ the "limited natural resources of this plan­ told a House of Commons commit­ mission considers that: 'concerning the TV et. " Resources are being regularly exploited tee" on June 7. channels, the speaking time, covering the "beyond their capacity of renewal."

EIR June 23, 1995 Intematio�l 57 �ITillStrategic Studies

ouche presents LaR economic recoveryprogram in Moscow

American statesman and economist Lyndon H. LaRouche tional reform, economic growth, and the organization of made his second visit to Russia, fromJune 5 through June 9. management. Currently, we areworking in all of these fields, He was accompanied by his wife, Helga Zepp-LaRouche, taking into account the specific situation in Russia today. and a delegation of the Schiller Institute in Germany, which We have contacts with stat:(: institutions in Russia, and she heads. with international organization$, from both the Near and the On June 6, LaRouche gave an address at the State Duma Far Abroad. I think that the Instituteof Economics is known of the Russian Federation, on the topic "The World Financial in the United States, as is its director, Academician [Leonid] System and Problems of Economic Growth," which was at­ Abalkin. tended by deputies of the Duma, staffmembers, and members Now I would like to ask Professor Muranivsky to say a of the public. On subsequent days, he spoke to enthusiastic few words about Mr. LaRouche. audiences at the Institute of Economics of the Russian Acade­ my of Sciences, the Methodological University, and Moscow Prof. Taras Muranivsky: We've been in touch for a few State University. LaRouche also met with representatives of years already with organization$ throughoutthe world which Moscow scientificcircl es. are united by being called the Schiller Institute. This move­ The impact of LaRouche' s presentations was amplifiedby ment, of which the Schiller Institute is a part, was conceived the circulation, during the visit, of the just-published Russian and is led by the leading Americimpolitical figureand econo­ translation of his memorandum "Prospects fo r Russian Eco­ mist, Lyndon LaRouche. nomic Recovery" (Bulletin #5 of the Moscow Schiller Insti­ As a scientist, a thinker, and a politician, LaRouche has tute fo r Science and Culture; see EIR, March 17, 1995 for put forward a number of original ideas, which, as might be the English text) and the Russian edition of "Summary of expected, did not always coincide with the official point of Evidence on the Record Demonstrating the Innocence ofLyn­ view. And we think of America a little bit differently than is don LaRouche and His Colleagues. " The latter pamphlet was accepted. Propaganda here tens us that there's prosperity published by the Bureaufor Human Rights Defense Without there, absolute freedom and human rights. In reality, ideas Borders. that are not accepted because they challenge official circles The fo llowing is the text of LaRouche's speech on June 8 aresubjected to pressure. Therefore, because of his forecasts, to the Institute of Economics of the Russian Academy of Mr. LaRouche was convicted. There were two trials in 1988. Sciences in Moscow. He was introduced by Prof. Taras Mur­ One dido't succeed; the second: one did. The jury was fixed, anivsky, president of the Moscow Schiller Institute fo r Sci­ and he was sentenced to 15 years. Through the pressure of ence and Culture. public opinion, he was released last year, and is visiting our country for the second time. Dr. V.1. Mayevsky: Let us begin our meeting with Mr. Besides the high morality and humanist basis of his teach­ LaRouche. I would like to say a few words about our Insti­ ings, I would like to draw your attention to the fact that he is tute , which is one of the oldest in Russia. It deals with basic the founder of an independent 4irection in science, which he economic problems, including property questions, institu- has called physical economy. And his book [So, You Wish to

58 Strategic Studies EIR June 23, 1995 Lyndon LaRouche speaks at Moscow State University. June 8. 1995 .

Learn All About Economics?], which we translated two years and he does not know economics. The President is not as bad ago, contains very harsh criticism of the conception of the on economics as that, but there are po itical difficultiesin his free market of Adam Smith. The philosophical roots of liber­ stating what he believes. alism and neo-liberalism were exposed by him almost a de­ Now, let us look at this from the s andpoint of what some cade before the monetarists imposed these policies on us in a call the Group of Seven Halifax meefng, what Boris Yeltsin pure form , which no other country applies to itself without has called "the G-71f2 meeting." Let' look at the three views some modification. which are going into that meeting. This free-market conception, which is to maintain the One view is that the present mo?etary system, with its British rule, has been very widely spread throughout the financial attributes, shall continue. Tre two other views be­ former U.S.S.R. and eastern Europe. I just wanted to draw lieve the present monetary system fust be changed. The your attention to these few points, and then to tum the floor majority of the most influential people in the West, including over to Mr. LaRouche. many in London, is that the present bonetary and financial I system globally, led by the Internati nal Monetary Fund, is Lyndon LaRouche: Let me firstof all give you an optimis­ doomed. However, among those of us who believe that the l tic view of certain problems: optimism from the standpoint system is doomed, as I do, there are tw0 opposing interpreta­ of an old fighter, not necessarily the man in the street. tions of this. l As most of you know, since most of you are senior, or Some believe the present IMF system must be reformed have worked with senior people, the foreign ministries of but essentially only administrative reforms. Others of us take governments rarely express the positions of their govern­ the view, as I do, that the internationalmonetary and financial ments. And, sometimes, even a President of a country ex­ system of the world today, is totally oankrupt, and that only presses the opinion of his foreign ministry , contrary to his the elimination of that system by bankruptcy, and the estab­ own opinion. We must appreciate that fact, in understanding lishment of a new system, is possiblel the difficulties which President Clinton has in his dealings There is an increasing number o� people in western Eu­ with Russia. rope and the United States who share my opinion. I under­ There is only one leading officialof the State Department stand that opinion will be expressed lat Halifax. But again, who agrees with President Clinton, and that is Strobe Talbott; we have another problem. You may know something about

EIR June 23, 1995 Strategic Studiy politicians. Politicians, even when they are good, tend to be key here is the relationship between developments in Europe pragmatic, and they will say to me , as some in the U.S. in economy, and the great pop�lation centers of South Asia government say to me , "You are right, but we would be shot and East Asia, in which the key is Siberia. This was under­ if we triedto do what you propose at this time. We must wait stood by [Dmitri] Mendeleyev;: it was the understanding of until the crisis becomes worse, and then we will have popular Mendeleyev's friend and admilrer Count Witte, it was the support for the necessary changes." subject of treaty negotiations ih the 1890s between Russia The change that I propose, which I believe must occur and France, and it was an effprt which was supported in soon, is that several leading governments of the world, in­ Germany by circles around Wilhelm von Siemens. cluding the President of the United States, who has special The point was proposed then by Witte and others, to build powers for this kind of condition, will put their central bank­ a system of railroads from the Atlantic to the Pacific,and to ing system into bankruptcy. This would mean, in the United the Indian Ocean. That is still the requirement today, more States, that the President would use his emergency powers to than ever, and that would chan$e the course of history from take over the Federal Reserve System, a private bank, and the kind of disasters we've hacil for the past two centuries. declare it bankrupt, and to use the powers which are invested The possibility of the proper relations between the United in the President and in the Congress under the Constitution States and the nations ofEurasi�, is based on such a proposal. to establish a new system of currency and a new system of national banking; not to call in dollars, but to cease the new The strategic conflict ; circulation of Federal Reserve dollars, to limit the new circu­ Now let's look at our probl¢m, briefly. Contrary to what lation of dollars to U.S. Treasury currency notes, as issued is taught as economics in most i-vesternuniversitie s, modem under laws enacted by the U.S. Congress. economy is divided into two · rincipal forces. One is the There are many precedents for this in United States histo­ old oligarchical system, whic originated in modem times ry: The 1789-91 reforms under Treasury Secretary Alexander through Venice, a system of1 nancial oligarchy based in Hamilton, are the first example. The second example, is the usury: as against a new form f economy which began in Second National Bank of the United States, under Presidents France in 1461 with the accesJion of Louis XI, which was Monroe and John Quincy Adams. The third example, is the called the "commonwealth fOr$" at that time: the first mod­ wartime financing of the United States in the Civil War by em nation-state. President Lincoln. The modem nation-state was based on the development The issue of such currency would be loaned through a of the physical economy, that is, the increase in the wealth national bank to national infrastructure projects, and to spe­ per capita, per family, and per �quare kilometer. The key to cial private categories of borrowers. The purpose is to rebuild this, was the extension of the system of education to include U . S. employment and production in industry and agriculture, adolescent boys who had bee1l1 orphaned, and others who and to foster an increase in what is called hard-commodity were members of poor families. The increase of larger pro­ international trade . To establish a new monetary system, portions of the total populationlto assimilate and to generate would requirethat several governmentsjo in the United States new knowledge, was the basis for the great growth in popula­ in this form of reform. I would hope that Russia would be tion density over the past 550 years. one of those states that would join in that reform . This new form of society, the modem nation-state, came We have an historic, common interest to fulfill under into conflict with the old forces of oligarchy. The result was those conditions. The historic interest, of course, is associat­ a stand-off, a kind of symbiosis between two systems. ed with the relations between the United States and Russia, On top, was the financial system, which was originated both in the period of Catherine II, when Russia supported the from Venice, which emerged later, as, essentially, the fi­ United States' independence, and the second period was from nancial system of the markets of the Netherlands and about the 1850s until 1901, through the period of Alexander London. II through the efforts of Count Sergei Witte, until the election At the bottom, was the development of modem economy, of a disastrous fellow by the name of Teddy Roosevelt, who or what we might call agro-industrial economy, based on was practically an agent of King Edward VII of England. scientificand technological progress, and struggles to extend And, you know then there was a certain war that occurred in education to universal education. the easternpart of Russia with Japan. During the past 500 years since this symbiosis emerged President [Franklin] Roosevelt tried to reestablish some between the two systems, we have a period, up until 1963, relations in that direction; then, President Roosevelt died, of peaceful coexistence, mixed with wars, between the two and we had a lot of trouble, with which many of you are systems. Since technological progressnot only increases the familiar. productive powers of labor but also the firepowerand mobili­ The historic interest of Russia lies in its history and geog­ ty of military forces, the oligarchy was not able to rid itself raphy. The center of the world is the Eurasian continent; as entirely of the new system. But for various political and was understood by all Russian leaders in modem times, the social reasons, the new system could not rid itself of the

60 Strategic Studies EIR June 23, 1995 oligarchy. tal , or fictitious capital, such that over the past 25 years, we In the meantime, the oligarchy ruled the world by balance see a growth in terms of financial iaggregates per capita, of power struggles. The last great such balance of power while, as measured in physical terms, there has been a decline struggle was a struggle between the western powers and the in physical output and consumption per capita. This reached Soviet Union. That last struggle began to come to an end in the point of insanity about 1987-88 �ith the emergence of 1963, in the negotiations which followed the Cuban Missile significant activity in a category calle!dderivative s, financial Crisis of 1962. The so-called detente agreements between derivatives. the Khrushchov governmentand the governmentof President The derivatives explosion, which now runs into perhaps Kennedy, created a condition in which the majority of the three times as large as the total world GNP, is at such a degree British and of certain British-allied forces in the United that now, based on 1992-93 estimates, both from the U.S. States, came to the opinion that major wars on this planet Treasury and from other official agencies, out of 100% of were impossible, that the superpowers, which included at average daily foreign-exchange turnoverworldwide , the per­ that time China, as well as the Soviet Union and the United centile of foreign-exchange turnover attributable to imports States, would not go to war, that only limited wars, or surro­ and exports of hard commodities, is today less than 2% gate wars would occur. worldwide. The worst situation among countries is in Britain, As a result of that belief, we had the unleashing of post­ where it's less today than 0.5%. But theaverage is about 2% industrial utopianism: It was possible to build a society in or less worldwide. A few countries, such as Germany today, which we no longer had scientific and technological progress are about 5%. In other words, there has been a decoupling of nor industry, to go back to a pastoral or barbaric form of finance from production and trade. I existence. And, then, we had the unleashing of such forms The only sane winner of the No�l Prize for Economics of insanity as ecologism, systems analysis, and so forth , in since the beginning of that prize, has [beenMaurice Allais of which science and other things were somewhat destroyed. France. All others are insane, and $Ome of them, most of As a result of that, the policy of investment in scientific them, are actually, palpably fascists in their economic theo­ and technological progress, for the purpose of increasing the ry. Maurice Allais somehow sneake4 in as a sane person, I productive powers of labor, came to an end. Not all at once, don't know how that happened. They probably didn't speak but over a period of 1964through 1972. This erupted around French. the Harold Wilson government in England, spread into the Some of you have probably rel¥i his articles at some United States rapidly, was expressed in the so-called 1968 length in Le Figaro. I think there are three major pieces, and revolutions in France and in the United States. The result he's accurate in what he says, in his analysis of the system. we've had has been called by some a global "cultural para­ As you know, in Moscow, where you do not have cholera digm shift"-over the past 30 years. As a result of that, the but banks, there is a disease in whi�h you cannot tell the average income, as measured in physical terms, and also the difference between a bank and a gambling casino. Everything productivity of labor measured in the same terms , in the is being destroyed. United States, has collapsed. And so, in conclusion, put it this:way: Once the finance The income and productivity of the average U. S. person sector began to loot the very basis of tbe economy, and began in the labor force or household, is about half of what it was to shrink the economy by taking on usury, you had a situation in 1967-69. And there is, of course, a disaster which has like cancer, in which the cancer grows by shrinking the host. erupted in the so-called developing sector during the same As the host shrinks , the cancer grows. As the cancer grows, period. The idea of development decades in the U.N. died in its appetite increases. It is a system in which one man's meal about 1967 . The floating exchange-rate system established is another man's stomach. Finally, in the terminal stage of in 1972 now leads to two conditions which are responsible for cancer, the victim, the host, becomes Ivery weak. The cancer the inevitability of the total collapse of the present economic becomes pervasive; sometimes it appears in the metastatic system. form of banks. First of all, the peaceful coexistence between finance The cancer now has a tremendou� appetite. You cannot capital (the oligarchical form) and the nation-state , or agro­ maintain the cancer, except by killing the host. Some people industrial economy, was based on the fact that the finance­ have said recently that this is the sta� of Russia. I tell you: looting of nations was limited to a share of the macro-eco­ It's the state of the world . Russia may be delivered a greater nomic profit of nations, except, of course, in the case of shock, but this is a condition we have seen for a long time in colonial nations or semi-colonial nations, which werelooted. Ibero-America, for example. This is:the situation in Africa With the new change, when the total macro-economic profit for a long time; and the same disease comes here. of the system became negative, the only form in which profit But also, the same disease comes to western Europe, to could be taken fromthe system by finance, was, in net effect, North America, to Australia. You see rumbles of it in Japan. through usury . The world can no longer live with this system. What will So, what we had was the vast expansion of finance capi- happen? We have two ways to go.

EIR June 23, 1995 Strategic Studies 61 The crisis in Russia, you have a new election coming up. Who knows­ We are now headed toward what [Karl] Kautsky and I don't know-what will happen? We have a President of the Rosa Luxemburg debated as a breakdown crisis. We are United States. There are heads of state in various countries. headed, first of all, to a collapse which resembles, in prece­ You have studied, perhaps, mostof them. What do you think dence, Germany 1922. If we had idiots who behave like of their ability to come up with tIle idea and make the decision Hilferding, it will then go to a collapse like 1923 in Germany. on this matter? Is it not the case that the institutions which If you just try to print banknotes to cover the collapse, you advise these governments, and these figures, must be pre­ will have an explosion, and the whole system will disinte­ pared to go to their governments as Jacques Rueff went to grate . If you use fictitious aggregates, instead of banknotes, Charles de Gaulle, and when the President says, "Will it it will be even worse, which is what the IMF system is now. work?" you and I must be prepared, with others, to say, "We Now, only governments can cure the problem. No inter­ stake our life's reputation on the fact that it will work"? national institution can deal with this problem. Only sover­ Without that, most politicians, even goodon es, will not act. eign nation-states. And it can only be cured by major sover­ Ladies and gentlemen, that's our problem. eign nation-states, because it's a worldwide problem. It is imperative that the United States take the leadin this, because the U.S. dollar is presently 60% of the world monetary re­ Questionsand answers serves. Ifwe do not do that (some of you know the Kolmogorov equations, which are the famous equations for a chemical Dr. Mayevsky: We've had this very interesting presenta­ chain reaction), what will happen, under the action of what tion by Mr. LaRouche. It would certainly be appropriate and is called "reverse financial leverage," is that one morning, timely to ask some questions, to allow the situationand your you will have a financial system; 48 to 72 hours later, there positions to be more precise. will be no financial system existing in the world: a reverse­ leverage collapse in a chain-reaction implosion. Q: Your views are close to mine, and I would like to zero in Therefore, the important thing is the political-strategic on the essence and goals of your conception, of which there aspect. It is probably true, as people in the U.S. government are three. First, a new economic paradigm. Second, a more tell me, that the political will and the political support to rational distribution of the world social product. Third, make a needed change now, do not exist. It is probably the would be the stimulation of new growth in production and case, that we have to wait until the situation becomes worse technology. before the political will to act appropriately will be found. What kind of ecological and resource limitations do you But, when you're faced with an implosion which wipes out take into account in this, and wbat limitations are there from a system within two to three days, you cannot expect to begin the standpoint of the model? to experiment once the situation become very bad. LaRouche: There are essentiailly no limitations in practice, The most important thing is, that in every important gov­ if we look at the history of mankind. If mankind were merely ernment in the world, and in those influential institutions an animal, and subject to ecological models, the human pop­ which advise them, the alternativebe completely definedand ulation of this planet would never have exceeded in the past worked out. So, when the politician says, "What do we do?" 2 million years, several millionindividuals. By the middle of we have the answer ready for them, the ideas are developed, the 14th century, we had achieved a level of several hundred they don't have to be developed then, they're already de­ million people. We now have 0ver 5.3 billion people. If we veloped. had used the technology which we had on this planet as of Finally, on that point: In the middle of the 1970s, I had a the Moon landing in 1969, we could have supported a world meeting with Jacques Rueff, who was the man who organized population of 25 billion and a standard of living potentially the heavy franc for Charles de Gaulle. We discussed this that of the United States at that time. matter, where the world was going under the floating ex­ This involves a discussion of a scientificprinciple, which change-rate system. He said, "You're right in the analysis, I've been discussing with interest with some scientificinstitu­ but the politicians will not do it." And, he described how the tions here in Russia. We have some disagreements, but I heavy franc was put in, in France. And he said he went to believe I'm correct, even though I learn something frommy President de Gaulle and proposed the heavy franc reorganiza­ critics here. But the point is that the human being is unique tion, and de Gaulle said, "This is very good, but most of my among all living creatures. We can create completely new advisers disagree with you." And Jacques Rueff, who already levels of technology. Every resource limitation, we can su­ was a famous man in France, said, "I stake my reputation persede, by new technology. We can recycle waste. If we and my life's work on this proposal. " De Gaulle said, "There­ continue with space exploration, we will be forced to develop fore I will do it." And it succeeded. techniques in space exploration which will have great benefit The same situation exists now. You have a government on this planet.

62 Strategic Studies EIR June 23, 1995 Lyndon LaRouche (left) with Jonathan Tennenbaum, a representative of the Schiller Institute in Germany, during their visit to Moscow, June 1995.

We in European civilization and extended European civi­ whether we have a possibility to use some parts of the lization, through the benefits of universal education, and scientific community within econo I ics, to promote your experience with progress, realize that the individual human ideas and similar ideas. being is very special and very important. That is not well The second is a very short questi�n. You mentioned the understood among the majority of this planet. question of reversing northern rivers in Russia, to the south. The basic problem we have, is to bring the benefits of You see , this question has a very lodg history of debate in that attitude toward the human individual into the internal Russia, and there are two different le�els of discussion, one development of people, and as a principle of relations among level just general, whether it has some ecological and other states. Then the human race can solve any of its own prob­ minuses and pluses, and the second !oncerns the economic lems; but we must make that step. and more narrow aspect. You see, all r ' oj ects which we had before about this reversal, �o a great e;xtent, were pr�je�ts to Q: Let me ask two questions, one rather general , and one promote or to support certam economic structureswlthm the l very short. First the general question. There are two ways country, which were very much inte ested in digging more of making some efforts. One way you said, with your exam­ and more without any results. ple of de Gaulle and Rueff, technical efforts to find a short LaRouche: On the first question, tl at involves a number way to the result. The second is more strategic-to deal of subjects that I've written on. I d n't think there's any with the scientific community, general public opinion, and contradiction between the two approaehes, that is, the politi- pI so on and so forth. From this point of view, what's your cal approach and the scientific. The political action by nation- opinion about the situation in economic science, which can­ states strategically, must occur. How�ver, in order for agen­ not be limited to monetarists and neo-c1assical economic cies such as this one, to play its role i� advising government, science? In other words, there are currents of economic a quality of scientificcertainty must be achieved. So the two thought which are very critical of neo-c1assical and moneta­ things must go together. ristic approaches. What's your opinion of these currents of On the question of new economic thinking: The most economic thought? What's your opinion of the works of interesting direction, I think, in ecoAomic thinking, I find l Nicolas Georgescu-Roegen, Philip Mirovsky, and so on and already going on here, in scientific ins itutions. I don't neces­ so forth? This question is connected with the situation of sarily agree with what's being propos for example, by this ' EIR June 23, 1995 TStrategic Studi� 6S3() I gentleman Pobisk Kuznetsov, but he has posed the correct problem was that since the beginning of the Soviet system, question. That is the useful direction. there was primitive socialist accumulation, based on military The question is: What is the relationship between those preparedness. And I believe manyinstituti ons, including this axiomatic changes in scientificprinciple which are generated one, emphasized the importance of coming to avoidance of in physical science, and also in great Classical art? How does this military conflict, as a way of unleashing resources to this knowledge become transmitted, as through the machine­ address these problems, which I propose is the condition tool sector, and through education, to increase the productive now, and we should just take a

64 Strategic Studies EIR June 23, 1995 term, trade and tariffs . those precedents, rather thanon the basis ofthe United States' Take the case of how Russia would develop, just with the victory in the Cold War, which was one of the long-term initiative of a United States reform . If the United States, with consequences of the influence of Th�ore Roosevelt, then the support of a few other countries, declares the IMF system indeed it will be possible to talk about the development of bankrupt, what happens to the IMF system? Who will obey joint action by the United States and Russia to carry out it? What country will obey it? It's lost its power. Without the positive programs. backing of the United States, the IMF is a toothless tiger. Development of Russia, in my view, depends upon the Dr. Mayevsky: I'll permitmyself toitake threeor four min­ land-bridge concept, the Eurasian land-bridge, from Brest utes. I would like to say that I have denved great satisfaction to the Pacific, and to the Indian Ocean. This becomes an from the lecture Mr. LaRouche gavb, and it's interesting internationalpro ject, which means that Russia, on the basis for me that, although Mr. LaRouche is not strictly in the of that kind of project, together with China and other coun­ Schumpeter tradition of evolutionaryl economics, neverthe­ tries involved, become prime credit risks for the supply of less, Mr. LaRouche's basic findings are very close to the credit, both for what they have to import to do the project, position of this school, beginning with Kondratyev. and for credit to their own industries, which will become When for our audience here, Mr. LaRouche says that it's vendors to the project. That would build up immediately the necessary to develop infrastructure in order to develop the employment and tax revenue base here , at which time, I economy, this is directly related to the research which is presume, your government wbuld take the appropriate steps being done on Kondratyev long waves. Cesario Marchetti, to come into line with that kind of international system. one of the leading experts in this area, wrote an article in 1993 which showed, on the basis of the past 220 years of Q: I'd just like to say a few words, considering the time U.S. figures, that it was precisely theidevelopment of infra­ limit, on three aspects, which seem the most interesting to structure, namely the railroads, can., and so on, that was me , in the Memorandum of Mr. LaRouche, although I also the basis for the most recent rise of a long wave. This is am not in agreement with everything. But, there are three statistically proven, and if it's interesting forMr . LaRouche points which seem to me to be particularly interesting. to see this article, I can show it to him. I can show Mr. The first is his analysis of the genesis and development Marchetti's conclusion that the next cycle-and we'renow of post-industrial utopianism. The second is the historical in the process of transition to the fifth Kondratyev cycle­ analysis, the counterposition between the commonwealth has also to begin with the powerful pevelopment of infra­ and what he calls the "Venetian oligarchical type ." I find structure. There's no alternative to thi$. very interesting his observation that the penetration of the Secondly, on the question of thfl dynamics of finance institutions of a country and subjugation of those institutions capital from the standpoint of Kon4ratyev's theory, Mr. to its influence is typical of this Venetian type. LaRouche said, very rightly, that over the past 35 years If we take the history of Russia and eastern Europe, there's been a surpassing growth of finance capital relative what's very interesting, first of all, is what the historian to physical-economic activity, and that securities specUlation Gumilyov recently proved. I don't agree with everything he exceeds GNP by double. From the standpoint of the long­ says either, but he showed that the [Sept . 8, 1380] battle at wave theory, insofar as by 1995, the world economy was on Kulikovo Field, which was one of the most outstanding the down side of the long wave, this is lawful. There is an events in the history of Russia, was actually a confrontation, accumulation of financialcapital , in onterto beable to invest not with the Tatar-Mongol horde, but with mercenaries of it in the future, in the next wave of inmtstructure, andin new Italian usury capital. technologies. This really does correspondto this theory. The second aspect is that the peoples of the Greek islands Finally, on the non-entropic characterof the development and Balkan Europe, with all the travails of being under the of the world economy: I think that this is a very interesting Ottoman yoke, nevertheless preferred the Turks to the Vene­ observation, although Pobisk KuzneflSov, as I understand, tians. says "negentropy," and you say "not-fintroPy . " The third aspect, which is extremely important, is the I didn't fully understand what wa$ laid out here, on the precedents you've cited for friendly relations between Russia relationship of the ratio of free energy to the energy of the and the United States, insofar as Professor LaRouche attri­ system; but in any case, these connectiCl)ns betweenthe physi­ butes great significance to friendship between the United cal and economic sides of a process are considered very States and Russia, giving the examples of the assistance in the urgent in the long-wave theory. War of Independence against Britain, and then the assistance On the whole, I would like to saYi that Mr. LaRouche's extended by Czar Alexander II in the 1860s. I think that if, presentationwas a pleasantsurprise folt me personally. It was in the United States itself, the number of people were to a very interesting one, and we should Utank him. I thinkwe increase, who formulate their attitude to Russia based on can applaud.

EIR June 23, 1995 Strategic Studi� �TIrnNational

Whitewater Starr chamber may be running out of steam

by Edward Spannaus

It may not be accidental that at the same time that the Clinton a fool by publicly snubbing an invitation to visit with the grand administration is making some dramatic moves against drug­ jury," and that Starr "was ready to go after everyone. And trafficking and money-laundering networks-moves which that includes First Lady HillarYClinton ." implicitly hit circles closely linked to George Bush's secret government apparatus which came to prominence in the Dead ends? 1980s-the attacks on President Clinton himself seem to be Starr's petulant indictmertt of Tucker and his seeming escalating. escalation against circles assdciated with President Clinton Just as the federal prosecutors were bringing a massive could be seen as a sign of weakness. This was suggested indictment against the Cali Cartel and its Bush-linked law­ by, among others, the Londom Observeron June 11, which yers , Whitewater special prosecutor Kenneth Starr indicted asserted that Starr's massive judicial inquiry "appears to have Clinton's successor in Arkansas, Gov. Jim Guy Tucker, run into dead ends. " along with Tucker's lawyer and a former business partner. The Observer noted that aides of Clinton say Starr "is Another associate of Tucker's pled guilty to a misdemeanor casting his net far wider than the President and the First Lady, charge, and reportedly agreed to cooperate with the special and that he has spent $10 million with 'nothing dramatic, prosecutor. The news media are rife with speculation that the nothing serious' to show for it." noose is tightening around President Clinton's neck, and that Several of the supposedly big stories have fallen through, the latest indictments portend that Starr is closing in on the said the Observer: Hillary Clinton's commodity-tradingdeal White House. turned out to be nothing criminal, and sinister shreddings of The Tucker indictment was, no doubt, a nasty piece of documents turned out to be routine disposals. work. But there may be less here than meets the eye. The Observer line on Whitewater is remarkably similar Governor Tucker and his wife had both refused to give to a front-page feature run in the Wall Street Journal last Feb. testimony before the Whitewater grand jury a week prior 22, which already at that time pointed to Starr's failure to to his indictment. Tucker had accused Starr of improperly come up with a case against Bill and Hillary Clinton. What pressuring his wife and others for information. "Many of is most noteworthy about tM Whitewater case, it said, "is those people have had their wives threatened and their futures how many of the biggest Whitewater headlines appear to be threatened. Just sheer intimidation," Tucker said. "If I don't heading toward the cutting-room floor." The juiciest resist this kind of stuff, who will?" Whitewater allegations, such as Hillary's commodities On June 8, Starr replied to Tucker's attack by indicting profitsor the shredding of mySterious documents, "have been him, on chargeswhich have nothing to do with President Clin­ all but discarded by criminal investigators." ton. The next day, New York Post financial columnistJohn The authors ofthe Journalpiece went through nine differ­ Crudele, who has been receiving extremely detailed informa­ ent areas of investigation, including Whitewater-Madison, tion on Starr's investigation, claimed that other indictments campaign loans , the Vincent Foster case, and document will soon be forthcoming. Crudele reported that Starr was "Ii v­ shredding, and show that in every single area, there was id" and "fuming" because Tucker "tried to make him look like either no evidence of criminal wrongdoing, or if there were

'lID lNational EIR June 23, 1995 any possible evidence, that the statute of limitations had server piece also presented a caricatureof "conspiracy theo­ already expired. Lesser figures might go to jail on white­ ries" allegedly floatingaround the united States. The article, collar charges, they wrote, but there is almost no one who titled, "Paranoia, MI6, and the Whitewater 'Plot,' " de­ believes anymore that Whitewater will ensnare the Clintons scribed a U.S. magazine called Paranoia, and went on: in criminal charges. "Amid the sightings of unmarked black helicopters and The only route that Starr could take would be to try to forces of the new world order at work in the O.J. Simpson come up with a "coverup case" charging obstruction of jus­ trial, Whitewater was all a plot, they are told, manipulated tice, the authors wrote; they said that Starr is trying to figure not by Bill Clinton, but by MI6 [the British foreign intelli­ out if he can cook up something around the removal of docu­ gence service]. ments from Foster's White House office after his death. But ''The theory goes roughly like this: The British Crown, if no documents turn out to be missing, there would be no frustrated by an Oxford alumnus in the White House who got such case even here . rough with the special relationship, orchestrated the Starr is now focusing on the circumstances surrounding Whitewater affair through the good · offices of the Sunday the death of Foster, according to a number of recent reports . Telegraph, the [Rupert] Murdoch press, and even theEcono­ He has now retained a crime-scene specialist, Henry C. Lee, mist, to destroy the President." to review the original reports on Foster's death. Lee is the A little furtheron , the articlegot to its central point:"The chief forensic scientist for the State of Connecticut, and has British angle has been circulating for some time, pushed by testifiedin many nationally high-profilecases . the aging far-right extremist, Lyndo. LaRouche, perennial Starrhas gone back and forth on the Foster case. Earlier presidential candidate, anti-Semite and millionaire ex-con­ this year, Starr appeared to be accepting the conclusion of vict. LaRouche's supporters put out 100,000 pamphlets, the previous Whitewater special prosecutor, Robert Fiske, hawked on Washington streetcorners � detailing the plot; they that the Foster death was a suicide. But a second Whitewater also think the British killed JFK. " grand jury , sitting in Washington, D.C., is continuing to call Despite its lying characterizations of LaRouche, the Ob­ witnesses regarding the Foster case. server was compelled to admit that such conspiracy theories An expensive propaganda campaign exploiting the death are "inspired by the wide play that con�ervativeBritish news­ of Foster has been being conducted by the same circles which papers, primarily the Sunday Telegraph, have given to the are promoting the "Conservative Revolution" in Congress more lurid Whitewater scoops." and generally revving up Whitewater. The "king of Foster The Observer also highlighted the role of the London conspiracy theories" is Christopher Ruddy, who writes for a Times's Lord Rees-Mogg, who, it noted, wrote last February Pittsburgh paper owned by Richard Scaife, a Mellon family "that Clinton was presiding over a deeply corruptstate where heir and chief backer of the British-spawned Heritage Foun­ businessmen made billions of dollars from drug smuggling dation; Ruddy's chief sponsor otherwise is James Dale Da­ and killed 'dangerous witnesses, including schoolboys and vidson, the business partner of Lord William Rees-Mogg probably including Vincent Foster.' " who also circulated an inflammatory tract titled "Wac02" in the period prior to the Oklahoma City bombing, charging Starr's army that Clinton and "Field Marshal Reno" (Attorney General Meanwhile, Starr is continuing to beat the bushes in Ar­ J anet Reno) were about to declare martial law . kansas-as well as around Fort Marcy park near Washing­ Besides Rees-Mogg, the other architect of Whitewater ton-trying to come up with something, anything, with has been the London Sunday Telegraph's Ambrose Evans­ which he could nail Clinton's hide to the wall. Pritchard, who devoted his June 11 column once again to Last February, it was reportedthat Starralready had more the Foster case. Pritchard, always in the van of Whitewater than 100 FBI agents based in Lit(le Rock working on reportage, claimed that it's now clear to everybody that Starr Whitewater. It was reported at that time that they were "is working from the premise that Vincent Foster may have scouring through every financial transaction ever conducted been murdered." involving Bill and Hillary Clinton-which seems to be con­ firmed by the subpoena issued to Tucker, which involved The LaRouche Role more than 100,000 documents spreading over 15 years. The story of the role of Rees-Mogg, the London Sunday The costs of Starr'sfishing expedition to thetaxpayers is Telegraph, and Evans-Pritchard in concocting the Whitewa­ enormous. Recent General Accounting Office audit figures, ter assault on the U.S. Presidency was broken exclusively by reported in the June 7 Wall Street Journal, indicate that in the EIR and its founder Lyndon LaRouche-although others, first eight months of operation, the tWo Whitewater special even the White House, have more recently commented on prosecutors spent $5.5 million just on FBI agents and servic­ the role of the British press. es alone. Whitewater spending is running at a far higher In a transparent effort to take the edge off LaRouche's clip than Iran-Contra special prosecutor Lawrence Walsh's critical role in uncovering the British plot, the June 11 Ob- investigation, which spanned the globe.

ElK June 23, 1995 National 67 congressional Closeup by William Jones and Carl Osgood

President Clinton vetoes midst of the Depression, and replace hood thatinnocent people will be exe­ Republican rescissions it with temporary aid that would end cuted in this country." President Clinton issued his first veto after five years. It would guarantee The habeas provision has nothing on June 7, rejecting a $16.5 billion support to poor families for no more to do withcombatting terrorism; it ap­ package of spending cuts passed by than 60 months over a lifetime, after parently was added to take advantage the House. "I cannot in good con­ which able-bodied parents would be of the outrage in the wake of the Okla­ science sign a bill that cuts education cut off and dependent children would homa City bombing to push through a to save pet congressional projects," receive a voucher to pay only for their major plank of the Contract with the President said. "That is old poli­ needs. Recipients would be pushed to America agenda. tics. It is wrong." get private-sector jobs immediately, Kenbedy noted that as many as Republicans, aware that they instead of being able to enroll in work 20% of all death sentences are over­ don't have the votes to override the training or educational programs, as turned by federal habeas review, President's veto, have said they are is now the case. "very often because a defendant has prepared to revamp the bill in order to The Democratic variant would, been inltdequately represented at tri­ work out differences. "We will proba­ however, retain the "entitlement," or al ." In apdition, he said, "the bill lim­ bly in very quick order be able to finda guarantee of benefits, to eligible its the circumstances under which a bill with the same budget reduction," Americans who follow all the rules, death ro� inmate may raise a claim of said House Majority Leader Dick for up to five years. The Democratic innocence based on newly discovered Arrney (R-Tex.) "There will be some plan would also require states to con­ evidence ....The proposal to limit increase in social spending on the tinue to provide their traditional levels inmates . to one bite at the apple is President's part and his folks will be of support for the poor and prohibit sound iIi principle . . . but surely our helpful in determining where we'll them from reducing benefits below interest 1n swift executions must give find the cuts so the numbers don't 1988 levels, and would provide more way in the face of new evidence that change." money for child care and work pro­ an innocent person is about to be put The rescissions would have cut grams than the Republican bill. to death ....The attempt to jam it from a variety of federal programs. into thl1 pending bill is a cynical at­ Although the differences will un­ tempt to manipulate public concern doubtedly be worked out, a bigger about 4:rrorism, and the Congress fight is looming in the fall over the should : reject it. " Several other 1996 budget. GOPers put habeas limits amendIitents by Democrats at­ in anti-terrorism bill tempting to mitigate the Republican On June 7, the Senate voted 91-8 to restrictions were quietly tabled or vot­ pass the Comprehensive Terrorism ed down. Prevention Act of 1995 , a measure The anti-terrorism legislation Democrats present their proposed by the Clinton administra­ would increase penalties for terrorist own workfare bill tion in the aftermath of the Oklahoma crimes and conspiracies involving ex­ After Republicans recently presented City bombing. Republicans added a plosive$, broaden federal jurisdiction a draconian measure to shift the re­ measure that would significantly cur­ over terrorist-motivated crimes, and sponsibility for welfare from the fed­ tail habeas corpus appeals. create a federal death penalty for ter­ eral government back to the states, Senate Democrats unsuccessfully rorist murders. It would also stream­ Senate Democrats presented "Work opposed the habeas limitations. Sen. line procedures for deporting alleged First," their own, albeit less draconi­ Edward Kennedy (D-Mass.) attacked alien terrorists and expand the govern­ an, workfare bill, at a press confer­ them as an attempt to "short-circuit ment's authority to exclude suspected ence on June 8. the Constitution." The Republican alien tetrorists from entering the coun­ The Democratic alternative tactic is "the worst kind of opportun­ try. Th¢ Senate voted to make it easier WOUld, as does the GOP proposal, ism," he said, coming "in the wake of to get "roving" wiretaps of multiple eliminate the 60-year-old welfare pro­ this national tragedy." Kennedy said phones that a suspect uses, but reject­ gram Aid to Families with Dependent that the measure "precludes meaning­ ed a proposal to allow emergency Children (AFDC), established in the ful review" and "increases the likeli- wiretaps without a court order.

EIR 23, 68,} National June 1995 I Energy panel cuts Republican budget adds $25 million, work of family farmers . For that rea­ fu sion, nuclear budgets but the money is contingent upon the son, we ought to have a safety net, not On June 8, the Energy and Environ­ outcome of a National Academy of for a set of goldel:t arches or for the ment subcommittee of the House Sci­ Sciences review now under way. largest agrifactorifs, but a safety net ence Committee eliminated entire R&D programs in the Environ­ for family farmers." programs in advanced nuclear tech­ mental Protection Agency were also Conservative �evolution backers nology and magnetic fusionenergy re­ cut by 22%, solar and renewable pro­ are targeting Republican members in search in their markup of the FY 96 grams in the DOE were cut in half, farm states who have been less inter­ Department of Energy (DOE) budget. and the budget for the National Oce­ ested in cutting farmers off at the For magnetic fu sion, the Clinton anic and Atmospheric Administra­ knees, in an attempt to eliminate farm administration's request of $366 mil­ tion, upon which weather forecasting subsidies entirely. lion was reduced by $136 million, to depends, was cut 22%. $229 million. The Princeton Tokamak Fusion Test Reactor (TFTR) would be shut down. Construction on the next­ generation Tokamak Physics Experi­ House GOP�rs intent on ment (TPX) would be halted. Dorgan urges support tax cut for the wealthy Dr. Stephen Dean, who heads the for family farming As congressional negotiators got to­ industry group Fusion Power Associ­ In remarks on the Senate flooron June gether on June 8 to work out a budget ates, described the Republican budget 5, Byron Dorgan (D-N .D.) suggested plan, House Republicans voted over­ as a "total disaster. " that the next five-yearfarm bill ought whelmingly to reaffirm their support At a press conference on June 7, to help farmers actually produce food . for a $354 billion tax cut, despite the subcommittee Chairman and Conser­ "We ought to have an economy that fact that this issue. is causing a major vative Revolution wildman Dana rewards less speCUlation and rewards rift with Senate Republicans. Rohrabacher (D-Calif.) claimed that more real production," Dorgan said. The Senate version of the budget the fusion programs were "no longer Dorgan proposed that "we struc­ contains no specific tax cuts, and justified," even though they "may ture farm program price supports . . . doesn't promise aftything more than have seemed a good idea at incep­ so that the strongest price goes to the $170 billion in tax relief later on and tion." After40 years and $9 billion of firstincrement of production. " In oth­ that only on condition that Congress taxpayer funds, he complained, "none er words , a farmer should get a parity has successfully worked out a plan to of the research has reached 'break­ price for the first 20,000 bushels of eliminate the budget deficit. Senate even,' the point at which the fusion wheat that he raises and take his Republicans are nIore intent on im­ reaction generates the same amount of chances with the market for any posing budget austerity than offering energy as put in." amount over 20,000. "We do not need their constituents the "bonus" of a tax The subcommittee's DOE budget to provide a stimulant for corporate giveaway. zeroes out all funding in FY96 for the agrifactories to plow," he added, be­ Senate Budget Committee Chair­ development of standardized light wa­ cause they "will darn sure make cer­ man Pete Domenici (R-N.M.) has ter nuclear reactors, which programs tain that consumers would be paying barred Rep. Phil Gramm (R-Tex.) were co-funded with industry, for a well above the cost of production for from the House-Senate conference cut of $49.7 million. Republicans re­ food ." committee. Gramm has threatened to leased a list of companies that suppos­ Dorgan urged his colleagues to "kill the budget" if1it does not "elimi­ edly benefitfrom "corporate welfare" give more consideration to main­ nate the deficitand cut taxes." Gramm through the federal R&D programs, taining a functioning agriCUlture had proposed an amendment in May in an attempt to justify the cut. The based on the traditional family farm . that would have added most of the Advanced Reactor R&D program, to "Now for social and economic rea­ House's $354 billion, seven-year develop the next-generation liquid sons, this country ought to care about package of tax cuts for families and metal and high-temperature gas­ who produces its foodstuffs ," he said. businesses to the �nate budget reso­ cooled reactors , had already been "It ought to care about the farm belt. lution. The GramQI amendment was eliminated in the Clinton budget. The It ought to care about preserving a net- defeated in a 69-3 1 vote.

EIR June 23, 1995 National (j9 NationalNews

yourself. From the point of view of the Con­ tionally in 1987. The board ofdirectors of gress, welfare reform has stopped being the committee reads like a Who 's Who of Clinton: Int'l economic welfare reform primarily. Primarily, wel­ Prince pJjlip's green apparatus. One of farereform is a way to cut spending on the them, Robert Strange McNamara, fresh 'trends' cause poverty poor, so that we don't have to worry about from his public mea culpa on the Vietnam President Clinton told the National Gover­ it, and we can balance the budget in seven War, proclaimed that the NIE "will give us nors Association meeting in Baltimore on years and give a big tax cut largely benefit­ a strong base to deal with potential environ­ June 6 that "rising poverty" and stagnating ting upper-income people who have done mental thfj!atsto our nation and the world in incomes in the United States are "clearly pretty well in the 1980s . That's what this is the decades to come. " about." the result of international economic trends The NIE is also supportedby major cor­ sweeping all advanced countries and nation­ porations and leading environmental orga­ al economic policies. And all those things nizations ..All major pharmaceutical corpo­ are reinforced, one with another. We're on rations support the NIE, as do AT&T and the verge of having a 40-year low in the the DuPont Corp. Green organizations in­ minimum wage." Gingrich pushes new clude Gteenpeace, the World Wildlife President Clinton's address, as tran­ Fund, the' Sierra Club, the Nature Conser­ scribed by Federal News Service, focused environmental agency vancy, Zeiro Population Growth, Friends of on the welfare reform bill the Conservative House Speaker Newt Gingrich (R-Ga.) is the Earth, the Cousteau Society, and the Revolutionists have been pushing through the leading toady for yet another attempt Gorilla Project. Congress. "The current bill gives states an by Britain's Prince Philip to impose pagan incentive," Clinton said, "to save money environmentalism on the United States. simply by throwing people off the welfare Newt is hopping about Capitol Hill trying to rolls. The House bill even gives states what pass a bill to establish a new "super­ the Catholic Church has called an 'illegiti­ agency," dubbed the National Institutes for Historian confirms FDR macy bonus'-an incentive for more people the Environment (NIE), which would con­ to have abortions. That is not welfare finethe remaining research efforts of several plan to end Brit empire reform." fe deral agencies to "environmental Further evidence has emerged of British As for the impact on children ofthe Sen. science." rage at President Clinton's repeated defi­ Phil Gramm (R-Tex.)-Rep. Newt Gingrich The proposed new agency would absorb ance of their claim to a controlling "special (R-Ga.) schemes, Clinton told the gover­ all or part of several federal agencies, in­ relationship" with the United States. A new nors, "If you put this welfare reform block cluding the National Aeronautics and Space book by a British historian denounces for­ grant, with less money and no local mainte­ Administration, the National Oceanic and mer Prime Minister Winston Churchill for nance requirement, up against the Medicaid Atmospheric Administration, and the Envi­ "selling out" Britishinter ests, by overplay­ cuts and the education cuts and the other ronmental Protection Agency. The scheme ing that card in dealing with President things that are in this budget, you tell me was originally promoted by former EPA Franklin D. Roosevelt at the end of World how the poor children of your state are going head Russell E. Train, former head of the War II. Tpe argument includes confirmation to fare ....You know, everybody wants World Wildlife Fund in the United States, from the British side that FDR was unalter­ to cut Medicaid to shreds because they say and a collaborator of Prince Philip. ably opposed to preserving or restoring the that's just a poor person's health care. You The bill, which was introduced last year British Empire, as EIR has extensively doc­ know as well as I do almost 70% of that as H.R. 2918, will soon be reintroduced by umented. money goes to the elderly and the disabled. Rep. Jim Saxton (R-N.J.), chair of the The London Times ran a synopsis on And they're all coming to see you and your House Natural Resource Committee's Fish­ June 7 by historian John Charmley of his state legislators . Now, how are they going eries, Wildlife, and Oceans Subcommittee. new work, Churchill's GrandAlliance: The to do?" Gingrich was one of the co-sponsors of the Anglo-American Sp ecial Relationship, In the event of another "serious national bill last year, together with radical green 1940-19$7. The same Charmley wrote a di­ recession," Clinton warned, little could be congressmen such as Bruce Vento (D­ atribe against President Clinton and the done if the government provided neither Minn.) and George Miller (D-Calif.). Sup­ United S�ates for the Hollinger Corp.'sSun­ welfare nor jobs at sustaining wages. "Why porters say they expect the bill to be signed day Telegraph on March 19, headlined, would somebody who was on welfare who into law by the end of the summer. "The U.S. is nofri end ofBritain, " in which had two kids, who at least had health care The legislation is being promoted by the he denounced the Americans as "disloyal from Medicaid and they got food stamps, go Committee for the National Institutes for the colonists, " to work if we won't even raise the minimum Environment, headed by Richard E. Bene­ In previewing his book, Charmley wage to keep it up to where it was 10 years dick, the former State Department official claims that Churchill personally rigged an ago?" who negotiated the Montreal Protocol ban­ international East-West crisis over Poland, The President added, "Now, don't kid ning chlorofluorocarbons (CFCs) interna- during and after the 1945 Churchill-Roose-

70 National EIR June 23, 1995 Brildly

• AFL-CIO President Lane Kirk­ land has decid¢d not to seek re-e1ec­ tion, in the face of opposition by velt-Stalin grand summits, in order to force payments for most of its revenue. union leaders representing morethan the Americans into Europe, in alliance with A spokesman for the United Federation half the AFL-CIO' s 13 million mem­ Britain. Churchill promoted an artificial of Teachers (UFT) told EIR that the city bers . The leading candidates to suc­ Cold War, using Poland as his "chip" in the schools had already sustained about $1.5 ceed him are expected to be incum­ game, in orderto build his "specialrelation­ billion in budget cuts over the past five bent Secretary-Treasurer Thomas ship," CharmIeycharg es. Churchill regard­ years . Donahue, and leader of the anti-Kirk­ ed the Polish question as a good "pretext" In May 15 testimony at a City Council land movemept, SEIU President for a showdown with the Soviets-and as a hearing , Chancellor Cortines attacked the John Sweeney. "hook" to keep the Americans in Europe, New York Times's lying assertion that the allied with Britain. previous budget cuts had been "painless" • PRO-CONFEDERATEGeorge But "there was one obstacle: Roose­ reductions of a bloated bureaucracy, with Allen (R) of Virginiabrought a trade velt," CharmIey says. "Roosevelt had made the implication that further cuts would be delegation to lJondon on June 6, the it clear ever since [the Teheran summit] that easy. thirdU . S. govt1lllor to do so this year. he was not going to enter some exclusive Cortines told the City Council, "Our Virginia is "open for business," he special relationship with the British. For capital budget has been devastated. Nearly said, and has cheap labor to offer. He him, the British Empire was as much to be every building in our system is plagued by beganhis visit with a private meeting deplored as Soviet Communism, and there system failures-leaky roofs , antiquated with Margaret Thatcher. Governors are no signs that he was willing to do what boilers and plumbing, faulty wiring, deteri­ Christine Todd Whitman (R-N.J.) Churchill wanted, which was to use bur­ orated paint and plaster, etc. Half our ele­ and William Weld (R-Mass.) earlier geoning American powerto preventthe So­ mentary and middle schools are overcrowd­ sought greater ties with Britain's viets dominating Europe." ed, as are of our high schools, and 80% Thatcherized and bankrupt economy. Despite Churchill's efforts, CharmIey we anticipate that there will be more than says, "Roosevelt tried hard to avoid pres­ students without school seats in 150,000 • ESCAMBIA County, Florida's enting Stalin with an Anglo-American only five years." former comptroller was indicted on front," and never wanted to provoke what June 7 by a county grand jury. Joe laterwould becomethe Cold War. On April Flowers was charged with making il­ FDR wrote to Churchill, "I would 11, 1945, legal derivativeS purchases and sales, minimize the general Soviet problem as banking funds without open bidding, much as possible, because these problems, Sen. Simpson proposes and entering an illegal lease purchase in one formor another, seem to arise every agreement. The county lost $21 mil­ day and most of them straighten out." The two-tier citizenship lion on $30 million in purchases. next day, Roosevelt died. "Henceforth," Sen. Alan Simpson (R-Wyo.) has proposed Charmley concludes, "the cruder methods an amendment to the Senate welfare reform • THE FBI has arrested Vyaches­ which Churchill dignified with the term 'su­ bill which would restrictpublic aid to immi­ lav Kirillovich Ivankov, reputed perior statecraft' would prevail; the true ex­ grants , even after they become citizens, ac­ leader of the Russian organized­ ponentof the arthad passed from the scene, cording to the June 11 Washington Post. crime mafiain Brooklyn, New York. leaving no worthy successor." The blatantly unconstitutional proposal The June 11 Wflshington Times said would create two categories of citizenship, the arrestis the "rst fruitof the collab­ native-bornand immigrant. oration between U.S. and Russian The House version of the bill already authorities, set :in motion by FBI di­ Devastating cuts aimed denies most formsof aid to legal immigrants rector Louis Freeh during a trip to who are not citizens. The Senate bill would Moscow one year ago. at N. Y . C . public schools restrict access only to Social Security. The New York City schools chancellor Ramon nature of the Senate proposal is otherwise • SEN. JOE BIDEN (D-Del.), Cortines says the school system must cut highlighted by the so-called "deeming" calling for lifting the "illegal" arms $1 billion from its current budget of $7.7 provisions, which apply to immigrants embargo against Bosnia, told the billion, according to the June 8 New York applying for public assistance. The rules re­ Foreign Relations Committee on Times. New York Gov. George E. Pataki quirethat the income of the applicant and the June 8 that "the Bush administration and the state legislature agreed on a state sponsors be jointly considered when there is was asleep at th� switch" in failing to budget plan on June 7, which imposes sub­ a requestfor public aid from Aid to Families revokeit in April 1992, when Bosnia­ stantial reductions in state aid to the New with Dependent Children, food stamps, and Hercegovina 'las admitted to the York City public school system. Large­ Supplemental Security Income. The Senate United Nations� The U.N. Charter, scale cuts are also expected in the city's bill would extend the "deeming" of spon­ he noted, guarantees every state the already scandalously degradedhospital sys­ sor's income even after a person becomes a right of self-defense. tem, which depends upon state Medicaid citizen.

ElK June 23, 1995 National 71 Editorial

The rights ojme n, women, and children

On Sept. 5-13, 1 994, the United Nations held an Inter­ The Beijing Conference is a thinly disguised cover national Conference on Population and Development, for the same genocidal polici�s which were advocated, in Cairo. The planners of the conference had intended if not enforced, at Cairo, w�ich is clear in the Draft to create a body of law which would allow use of U.N. Platform for the conference :now being circulated. It Blue Helmets to enforce genocidal laws on the impov­ is important to recognize that the term "sustainable erished-whether whole nations or those people development" is coded langulage, a demand that Inter­ deemed to be an underclass. Social coercion to enforce national Monetary Fund con�itionalities be accepted in sterilization and the withdrawal of medical services order to prioritize payment ¥ debt, on the one hand, were to be the means favored. over investment in social Vlfelfare and infrastructure Fortunately, a broad-based ecumenical alliance de­ development on the other. R�ference to environmental featedmoves to forciblyimplement theseproposa ls. Pres­ concernsfu nctions in the same way. ident Clinton's oppositionto allowing theUnited Nations That is what the draftdodument really means when to assume supranational, dictatorial powers was an im­ it states: "The major cause of the continued deteriora­ portant element in the success of the alliance. Unfortu­ tion of the global environmeijtis the unsustainable pat­ nately, Lyndon LaRouche's demand that the conference terns of consumption of pro�uction, particularly in in­ itselfbecancelled could not beimplemented in full;none­ dustrialized countries, whi¢h is a matter of grave theless, this was a significant, if limited, victory. concern, aggravating poverty and imbalances. There­ Now the United Nations is planning a followup fore, equitable social develoJllment that recognizes em­ conference, on the theme of women's rights, with the powering people living in p�verty, to utilize environ­ same kind of so-called structural reforms-which are mental resources sustainably!is a necessary foundation prescriptions for genocide-embeddedwithin it. This, for sustainable development;" the United Nations Fourth World Conference on Wom­ The Beijing Conference comes at a time ofgrowing 4-15. en, is scheduled to be held in Beijing on Sept. recognition that the world I financial system is ap­ The ideology underlying both conferences, the axi­ proaching blow-out. Some f�rm of bankruptcyreorga­ omatic belief structure used to justify these degenerate nization is inevitable. The question is: Who is to pay events, is a pagan counterposition to the notion of the the price? Events like the u.N. Conference on Women sanctity of human life. The belief shared by Christians, are intended to foment cultUral degeneracy in order to Jews, and Muslims, that man is created in the image of undermine any organized r(1Sistance to the imposition God, is absolutely counter to the pagan notion that the of a bankers' dictatorship. 1.he conference should cer­ worth of man is on a par with that of animals. tainly be stopped if possible, but even more important In Evangelium Vitae released on April 6, Pope John is to foster a recognition of t1p.e only kind of bankruptcy Paul II expressed the absurdity of pretending to defend reorganization which can defend the sanctity of all hu- human rights while supporting a bestial notion of hu­ man life. I manity, which denies families the basic means to sup­ Lyndon LaRouche is catatyzing an increasing num­ port a decent life for themselves, their unbornchildr en, ber of people around the 'fIorld to understand what and those too old to fend for themselves. In it, he wrote: must be done. This involves! governmentsputting their "Those noble proclamations [on human rights] are un­ central banks, which now function in the interest of fortunately contradicted by a tragic repudiation of them private speculative interests!, into bankruptcy, and us­ in practice ....How can we reconcile these declara­ ing emergency powers to establish viable national cur­ tions with the refusal to accept those who are weak rencies and national bank� based on rebuilding the and needy, or elderly, or those who have just been physical economy. Only in this way can all human conceived?" rights, including those of w�men, be protected.

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