"

THE ONLY WAY n_H � A TO STOP 1 MARSHAL OGARKOV'S WAR PLAN!

The greatest strategic weapon in the Russians' arsenal against the West, is not any of their weapons systems as such, but their ability to exploit the flaws in Western so-called economic thinking, which go by the name of "free enterprise."

�TIill How to reverse the economic policy QUARTERLY blunders that led to 'Irangate' CONTENTS ECONOMIC • An international financial blow-out: the real story behind 'Irangate' REPORT • The technology-driver of the new economic upsurge: the forty- year Mars-colonization project

• The explosive impact of AIDS on the world economy

EIR Quarterly Economic Report Make check or money order payable to: First $ J ,000 annual subscription Executive Intelligence Review $250 single issue. P.O. Box 17390 Quarter Washington, D.C. 2004 J -0390 1987 Founder and Contributing Editor: Lyndon H. LaRouche, Jr. Editor-in-chief: Criton Zoakos Editor: Nora Hamerman From the Editor Managing Editors: Vin Berg and Susan Welsh Contributing Editors: Uwe Parpart-Henke, Nancy Spannaus, Webster Tarpley, Christopher White, Warren Hamerman, William Wertz, Gerald Rose, Mel Klenetsky, Antony Papert, Allen Salisbury Science and Technology: Carol White Special Services: Richard Freeman Advertising Director: Marsha Freeman Circulation Manager: Joseph Jennings

INTELLIGENCE DIRECTORS: Africa: Douglas DeGroot, Mary Lalevee Agriculture: Marcia Merry his week's cover Feature is the first of a� series of articles to Asia: Linda de Hoyos T Counterintelligence: Jeffrey Steinberg, appear in this publication which will give subscribers a small sam­ Paul Goldstein pling of the contents of our forthcoming Special Report, "Global Economics: David Goldman " European Economics: William Engdahl, Showdown II, the 1987 sequel to the July 1985 360-page report that Laurent Murawiec Europe: Vivian Freyre Zoakos revolutionized Westernperceptions of Soviet policy. Two years ago, Thero-America: Robyn Quijano, Dennis Small we documented the Soviet war plan for world domination by 1988. Law: Edward Spannaus Medicine: John Grauerholz, M.D. The new report centers on the integration of "regular" and "irregular" Middle East: Thierry Lalevee modes of warfare in the Soviet war drive. Soviet Union and Eastern Europe: Rachel Douglas, Konstantin George While the dossier in this issue on narco-terrorism in Thero-Amer­ Special Projects: Mark Burdman ica focuses on the "irregular" mode of warfare-the drug mafia's United States: Kathleen Klenetsky guerrilla army-future articles will also describe the mammoth INTERNATIONAL BUREAUS: Bangkok: Pakdee and Sophie Tanapura growth of the Soviet "regular" capabilities. While President Reagan Bogota: Javier Almario was being focused, to the point of obsession, on "stopping commu­ Bonn: George Gregory, Rainer Apel Chicago: Paul Greenberg nism" in Central America by backing the unsavory "narcontras," the Copenhagen: Poul Rasmussen Soviets were building that irregular army and making massive eco­ Houston: Harley Schlanger Lima: Sara Madueno nomic and diplomatic gains all over the continent. Los Angeles: Theodore Andromidas The report also runs down the checkerboard pattern of states in Mexico City: Josejina Menendez Milan: Marco Fanini the continent of Africa which already are-or are about to become­ New Delhi: Susan Maitra Soviet client states, under State Department-blessed "regional mat­ Paris: Christine Bierre Rio de Janeiro: Silvia Palacios ters" accords with Moscow. Compare this to our conference report Rome: Leonardo Servadio, Stefania Sacchi on UNCTAD VII (page where the United States is throwing away Stockholm: William Jones 7), United Nations: Douglas DeGroot the chance to consolidate potential allies in Africa by sabotaging all Washington, D.C.: Nicholas F. Benton discussion of the debt issue, and thus handing the stage over to Soviet Wiesbaden: Philip Golub, Goran Haglund propaganda maneuvers. ElRIExecutive Intelligence Review (ISSN 0273--6314) is published weelcly (50 issues) except for the second week EIR's analysis of the Soviet command changes, and maps and ofJuly and last week ofDecember by New Solidarity International Press Service P.O. Box 65178, Washington, tables on Soviet strategic forces, prepared for this Special Report, DC 20035 (202) 785-1347 are far moreaccurate and frightening than those appearing in official EurrJfMtIII HHtlqlUll1en: Executive Intelligence Review Nachrichtenagentur GmbH, Postfach 2308, U. S. government publications. This report is being rushed into print Dotzheimerstrasse 166.0-6200 Wiesbaden, Federal Republic of Germany in order to block the various "zero options" deals by which a weak­ Tel: (06121) 8840. Executive Directors: Anno HeUenbroich, Michael Liebig ened President Reagan is being induced to give not only Europe but I" De""""": EIR, Rosenvaengets AUe 20, 2100 Copenhagen OE, Tel. (01) 42·15-00 every corner of the globe over to Soviet hegemony.

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10 Osvaldo de Rivero 24 Mining helium-3 on the 4 The biggest Ponzi game in The Undersecretary for Economic Moon for unlimited energy history Affairs in the Peruvian Foreign There is enough fuel on the The news is not that American Ministry and head of the Peruvian Moon's surface to power the banks will show the worst net loss delegation at UNCTAD VII. fusion reactors that can advance in history during the second the Earth's economy and begin quarter, but rather, that the 11 Daniel Suazo industrializing space. Marsha banking industry will continue to Freeman reports . show such losses for the third The Minister Counselor, quarter, the fourth quarter, and so Ambassador at the Permanent forth, until such time that it ceases Mission of the Dominican to exist, as matters stand . Republic in Geneva. Departments 12 Bernard Chidzero 7 Debt on the agenda at UNCTAD VII, but West The minister of finance, economic 47 Report from Bonn cedes the floor to Soviets planning, and development of A long-overdue look at the Red Zimbabwe. Army . A first-hand report on the Geneva conference. 13 Abdul Munim 48 Northern Flank Docmnentation: Excerpts from the speeches of French President Commerce minister of Bangladesh. AIDS time bomb ignites in Mitterrand, Norwegian Prime Sweden. Minister Bruntland, and Egyptian President Mubarak, and interviews 49 Rio Report with four government delegates. Book Reviews Kremlin blesses Brazil's "theolibbers . " 15 Foreign Exchange 60 Confessions of a Soviet How long for the Japanese inflow? Trust agent 50 Dateline Mexico Scott Thompson looks at Hammer, A "green" presidential campaign. 16 Overcoming the Reagan by Armand Hammer with Neil "Recovery" Lyndon. 51 Andean Report U.S. manned space-flight A new front against Garcia. headquarters to be in Virginia. Third in a series. 63 Books Received 20 Agriculture 65 Labor in Focus "Meat and milk will make you 'Foreigners' threaten auto? sick."

72 Editorial 21 Domestic Credit Pentagon ignoring Soviet scientific Government bankrupt by end of lead? July?

22 Business Briefs Volume 14 Number 30, July 31, 1987

Feature International National

42 U.S Gulf deployment a S4 Walsh launches next phase blow to New Yalta deal of Iran-Contra probe The emergence of Weinberger's The Justice Department is under military policy raises the fire . Will the "Hashemi file" be possibility of a positive shift in opened next? U.S. foreign policy, but there is a deeper problem to be solved. 56 Anti-AIDS ballot initiative gets under way in Raid on a coca plantation where cocaine labs were 44 North Korea and State California found, in Paime, Colombia, on June 12, 1987. In the Department seek deal for center of the photo is the "liberation" newspaper of Proposition 64 was defeated in cocainekingpin and Soviet asset. Carlos Lehder. Korean peninsula 1986, but many things have changed. 4S Alfonsin, IMF push 30 Has the U.S. given in to Argentina to brink 57 President's AIDS panel: a Moscow in the war on lost opportunity drugs? 52 International Intelligence Soviet-directed narco-terrorism has 58 How U.S. laws were penetrated every nation of Ibero­ changed to be pro­ America. This flank of the Russian Empire's subversion of the West mosquito-and against demonstrates exactly how Soviet AIDS Update humans irregular warfare operates, and Crimes of environmentalism. why the United States has been 20 OSHA demands worker losing that war to Moscow for the protection against AIDS 66 Eye on Washington last 20 years . Vo1cker: Greenspan's deregulation 20 Colorado meatpacking is disastrous. 33 Narco-terrorists' target: firm will test workers the Canal 67 Elephants & Donkeys 48 AIDS time bomb ignites in Hart campaign manager scores 34 Symbiosis of drugs and Sweden Iowa "blackmaiL" terror in Peru 56 Anti-AIDS ballot initiative 68 Congressional Closeup 39 Drugs and terrorism in gets under way in Colombia: The two are California 70 National News combined into one 57 President's AIDS panel: a 41 AIFLD: friend of drug lost opportunity traffickers 68 GOP task force told: AIDS politically protected �ITillEconomics

The biggest Ponzi game in history

by David Goldman

The news is not that American banks will show the worst net Bank of America and Manufacturers Hanover Trust , set aside loss in history during the second quarter, exceeding $10 reserves against a much smaller portion of their overseas billion. The news is that the banking industry will continue exposure, and only under pressure, following Citibank's ac­ to show such losses for the third quarter, the fourth quarter, tion. Their present capital base could not withstand a writeoff and so forth, until such time that it ceases to exist, as matters proportionalto Citibank's. stand. The second-quarterloss alone compares badly to the last The bankers' argument that the immense loan-loss re­ time the banking sector lost money. That it was in the year serves registered by the major banks represent a salutory 1934, when it lost $600 million, or roughly half the second­ housecleaning, is equivalent to thinking of Auschwitz as the quarter loss, when adjusted for inflation. But when will the ultimate weight loss camp. Most analysts argue that the losses stop? booming stock market liked the loan-loss reserves, led by Washington analysts fear that Brazil's failure to pay in­ Citibank's $3 billion set-aside, so much, that it will like even terest on its $100billion debt may spark the re-emergence of bigger losses better. It is argued that the Americans are now a Third World debt crisis with a vengeance, forcing the major emulating the German and Swiss banks, which wrote offtheir U.S. banks to register multibillion-dollar losses for each of Third World loan exposure early, and gained by it. A major­ the next succeeding quarters. If Brazil fails to pay by Octo­ ity of the same European bankers who wrote offtheir Ibero­ ber, the entire Brazilian debt to U.S. banks, which roughly American loans early in the 1980s, expect the worst crash in equals the shareholders' capital of several big banks, must be the banking system's history-as Italy'S Carlo De Benedetti, written off, forcing several banks into virtual insolvency. Switzerland's Hans-Georg Rudloff, and other prominent The Treasury still holds to the long-discredited "Baker Plan," bankers have insisted in recent public statements. Since these under which Third World nations would tum their economies bankers are the intermediators of a large portion of the un­ over to creditor management in return for new credits. A guaranteedfore ign deposits which make up some 40% of the newly reorganized World Bank, the International Monetary major banks' deposit base, turned over an average of every Fund's sister institution, was to become investment banker week or so, these views might otherwise attract attention. to the Treasury, under President Barber Conable. In fact, Citibank's $3 billion addition to loan-loss re­ Thus far, the banks have provided no new credits, except serves covered less than a fifthof its more than $15 billion in to pay interest back to themselves in the cases of Mexico and loans to the developing sector, let alone its exposure to oil Argentina; the countries have shied at handing their national and gas drillers, real-estate developers, shipping lines, and a patrimony (e.g., Mexico's oil reserves) to their creditors, dozen other loss-making industries. Other banks, notably and offered chunks of their economy worthonly a few billion

4 Economics EIR July 31, 1987 dollars; and the World Bank reorganization has turned into a cherished "level playing field" right off the cliff. nightmare for Mr. Conable, who now faces a class action suit Growth-even to gigantic size-through the market­ by senior staffwho object to this reorganization. American place is fine, but to do it with further government aid, sources suspect that the prominent role of Belgian central encouragement, or intervention would be outrageous. bank official and World Bank director Jacques de Groote in Big banks today have an absolute guarantee against fomenting opposition to Conable's much-vaunted reorgani­ failures-they can pursue any course of action, be it zation, indicates that the European central banks are sending sound or reckless or even indifferent, with the certain a message of mistrust to the U.S. administration. knowledge that should failure approach, bailout will Treasury Assistant Secretary for International Affairs not be long behind. The governmenthas never allowed David C. Mulford, who ran the international desk of White, a big bank to fail, and it never will. With the single Weld when it dominated Wall Street's connection to the exception of Penn Square , a tiny shopping-center bank Swiss money-laundromat, is badly worried, according to in Oklahoma City that exploded overnight into a $500 friends. He still intones the same Baker Plan formulas in million embarrassment, no bank with more than $200 public addresses. But he reportedlywill take the opportunity million in assets has ever been closed and paid off. of a privately organized meeting on international monetary The administration presumes that creative bookkeeping affairs in Vienna Sept. 2 to air his fears concerningthe con­ techniques associated with banking deregulation will permit sequences of the continuing Brazil moratorium. the megabanks to report income, despite the collapse of their loan-portfolio quality, while the government's implicit, ab­ The Ponzi game solute guarantee of their deposit base will discourage the PresidentReagan 's threat to veto banking legislation oth­ depositors' run which otherwise might be expected. In May, erwise supportedby retiring Federal Reserve Chairman Paul when Citibank announced its $3 billion addition to loan­ Volcker, shows how the administration plans to handle the loss reserves, Chairman John Reed boasted that the bank mess: by doing for the commercial banks what it has already would rid itself of the other $12 billion of developing-sector done for the savings banks. The administration and its Fed loans, through secondary-market trading of such loans. Ea­ chairman-designate Alan Greenspan have fought Volcker ger investment bankers in London, Switzerland, West Ger­ and New York Fed President Gerald Corrigan over banking many, and elsewhere, welcomed the chance to earn fees by deregulationfor years. What makes the administration's po­ "securitizing" Citibank's Third World debt holdings. sition most suspect, is Congress's failure (as of EIR's dead­ line) to approve a federal debt ceiling, and enable the Trea­ It won't work suryto continue borrowing. Ifthe Congress does agree before Misled, perhaps, by their positive experience with rising the July 27 "drop dead" date (see Domestic Credit), it will U.S. securities markets, none of these enthusiasts have likely be with restored automatic sequestration, preventing stopped to ask whether worthless paper will trade on the the administration from using emergency funds to bail out secondary market. the banks, and leaving the Federal Reserve's printing press Two economists for the New York Federal Reserve Bank, as the finaland sole defense of the financial system. Eli Remolana and David Roberts, released a study July 12 It is entirely possible that the federal government, which through the Group of 30, a private advisorybody to the IMF, has backed deregulation with a series of implicit and explicit now chaired by former Bank of England Governor Lord guarantees, will be unable to spend money, long before it is Richardson. It won't work, warn the two Fed staffers. The called upon to do so on behalf of the financialsystem . boom in secondary-market trading of Third World debt pro­ Former Federal Deposit Insurance Corporation chairman moted by Citibank and other institutions would "complicate Irvine Sprague explained the administration's motives in a an already difficult rescheduling process without providing critique published July 15 by the Wall Street Journal: overriding benefits for debtorsor creditors," the paper says. The drive toward concentration of the nation's Analysts who agree with Roberts and Remolana say the economic resources in megabanks already has turned problem is that the paper just isn't worth anything without into a stampede-but this apparently is not fast enough some kind of official guarantee, and the U. S. Congress is not to satisfy the Reagan administration. Undersecretary going to put up the money, not while it can't agree to guar­ George Gould has been quoted as saying that the Trea­ antee savings deposits or bail out farmers. "Nobodywants to sury Department has concluded we should foster the put up real money," one analyst said. "Investment banks creation of 5 or 10 giant banks in combination with would love to securitize my grocery receipts, but how do you large industrial companies, setting up powerful insti­ securitize something that's trading at a discount" without an tutions to compete in world markets ....Megabanks officialguarantee? It is one thing to promote a Ponzi scheme already enjoy substantial advantages from the gov­ involving worthless Third World debt, by guaranteeing in ernment, and to foster the Gould suggestion with added some fashion (as Group of 30 founder Peter Kenen has pro­ government aid would require pushing the banker's posed) debt written down by 40% or more, with some gov-

EIR July 31, 1987 Economics 5 ernment money. It is another thing entirely to promote a came in response to a $6 billion net outflow from S&Ls in Ponzi scheme with the mere aura of government endorse­ April, threatening to collapse insolvent institutions. S&Ls as ment, but without the hope of governmentmoney. a whole showed a $0.9 billion net inflowduring May. Overblownestimates of the size of the secondary-market, ranging up to $12 billion for 1986 debt swaps, circulated in Losses accelerate the wakeof John Reed's announcement of Citibank's strate­ Meanwhile, losses are continuing, even accelerating, gy; estimates collected by the Fed economists were as low as among savings banks. Delinquent loans at thrift institutions $2 billion. Citibank's grand plan, its justification for the rose to 6.2 % of their mortgage portfolioin May 1987, against mega-losses, never got off the ground, and never will. 4.2% a year earlier, and about 2% in 1985, the Federal Home Meanwhile, the Federal Deposit Insurance Corporation's Loan Bank Board reports. Analysts at the FHLBB, which regulates savings and loans, W!U11 that the much higher delin­ quency rate implies a comparably higher level of losses dur­ ing 1987. The administration hasjust been The savings industry as a whole ran a loss during the second half of 1986, and will, analysts warn, run an even handed an additional $50 billion bigger loss this year. Collapsing real-estate values under the bill on behalfoj the thrift industry administration's 1986 tax reform are behind the surging loss­ alone. At some point, some major es of savings and loans, according to analysts at the Federal Home Loan Board Bank. "The tax reform act is having its depositors will take a hard look at consequences in the real-estate market. There are a lot of the quality ojtheir guarantees, and foreclosures of commercial property, and a lot of developers the game will come to an end are walking away from deals after the tax advantages that motivated the deals ceased to exist. So, the S&Ls are taking faster than you can say, "tulip bulb a lot of property back," said one analyst. The tax reform bill futures." eliminated the tax benefitswhich had prompted the building boom of 1981-87, which led to a 25% oversupply of urban office space in the United States. Since the FSLIC is out of money, and the $8.5 billion announcement that it would accept lower-than-usual capital recapitalization program not yet passed by Congress would ratios at commercial banks in economically troubled areas, not even cover the bankrupt Texas thrifts, the generalization affectingas many as 2,000of the nation's 14,000commercial of the savings-industry crisis to the rest of the financial system banks, shows that the savings-and-loan approach has already is already a fact. FHLBB planners suggest that either the worked through to the weaker elements of the commercial commercial banks' guarantor, the Federal Deposit Insurance banking system. For three years, the Federal Savings and Corporation, will have to bail out the savings banks, or the Loan Insurance Corporation has permitted a growing num­ Federal Reserve will have to bend its charter, and buy up ber-nowover 500-of "zombie" savings and loans to con­ bankrupt S&L assets directly from the failing banks. Either tinue operating, because it lacks the $50 billion it would now alternative would have devastating consequences. The FDIC taketo close these institutions and pay off their depositors. has prepared an internal working paper analyzing the thrift These institutions, with negative capitalization, continue industry's problems and concludes that it could cost as much torun losses; they are being supported by what Federal Home as $40 billion to resolve them, twice the FDIC's current Loan Bank Board staffers call a "government-operatedPonzi available resources. Earlier, the General Accounting Office, game." The FSLIC ran out of its last cash a while ago, and citing FSLIC data, put the tab for closing the most troubled staffers responsible for winding up the affairs of bankrupt thrifts at $25 billion. But the FDIC study, prepared in the institutions are now making paper airplanes. The insolvent, spring, concluded that that figure wastoo low. The FHLBB' s loss-makingsavings banks are being kept alive by the Federal "Ponzi game" with guaranteed deposits has raised the figure Home Loan Board Bank, which is "hustling" deposits from to perhaps $50 billion. deposit brokers, FHLBB officials say. Deposit-brokers take An administration committed to a $108 billion deficit large sums of money from pension funds and other financial target for fiscal-year 1988, now likely to run a $200 billion institutions, and break them down into deposits of $100,000 deficit as matters stand, has just been handed an additional or less, the maximumguaranteed by the now-bankrupt FSLIC. $50 billion bill on behalf of the thriftindustry alone, and the Theinsolvent, or "zombie" S&Ls pay premium interest rates, losses are accelerating in both the savings and commercial often 2% above going rates, for these deposits, which are banking sectors. At some point, some major depositors will guaranteed by the government, and use them to pay off old take a hard look at the quality of their guarantees, and the depositors . game will come to an end faster than you can say, "tulip bulb FHLBB "hustling" in cooperation with deposit brokers futures."

6 Economics ElK July 31, 1987 Conference Report

Debt on the agenda at UNCTAD VII, but West cedes the floor to Soviets

by Ana Maria Mendoza and Hartmut Cramer

The first working week of the seventh session of the United 1930s" as virtually every representative from the OECD and Nations Conference on Trade and Development (UNCTAD developing countries alike had to admit. Mubarak urged VII) in Geneva came to a close, having defined the world "North" and "South" to "close ranks," "coordinate action," economic crisis as in many cases "worse than the depression and "look at the situation not in terms of profits and losses, of the 1930s," as UNCTAD General Secretary Kenneth Dad­ but rather from the perspective of the success of mankind in zie noted in his opening speech to the delegates of 168 nations facing the ultimate challenge: to be or not to be." on July 9, but very far from any solution-thanks to the "I don't think the developing countries this time will sabotage of the Western industrialized nations. content themselves with just some vague argument from us According to the French daily Le Monde, the OECD concerningthe impending economic upswing and some gen­ countries met some days before the opening of UNCT AD eral statement of intent to solve the crisis," a high-ranking VII and reached a secret agreement "to not get involved in member of the Irish delegation said. In fact, a big fightbroke any technical discussion on debt that would be oriented to­ out in "Committee I," the committee dealing with the debt ward a decision." This suicidal strategy was followed to the question. After Peru had been denied the chair due to its last detail by Michel Rouge, a financialexpert in the French "extremist" position on debt, Mr. Taniguchi, Japan's ambas­ Economics Ministry, who is coordinating strategy and tactics sador to the Permanent Mission in New York, was elected for the OECD countries vis-a-vis the debt problem. chairman, because "everybody thinks Japan has some excess The OECD first tried to prevent any mention of the for­ money to distribute," as Ambassador Kobayashi, the acting eign debt, by claiming that "financial matters" cannot be head of the Japanese delegation, told us. discussed at aU.N. conference "on trade and development" In Committee I, the leaders of "Group B" (the OECD but only at meetings of the "financial experts of the Interna­ countries) and of "Group of 77" (the developing countries), tional Monetary Fund (lMF) and World Bank." Forced to put though using polite, diplomatic language, clashed on the the debt on the agenda of the first of the four committees at debts. Osvaldo de Rivero, the head of the Peruvian delega­ UNCTAD VII, the OECD then tried every trick in the book tion, who is chairing the Group of 77 , so skillfully marshaled in order to prevent any serious discussion of it. his facts about the collapse of the terms of trade, the murder­ ous policy of high interest rates, the unpayability of the debt, Reality intrudes and the need for real development and a global solution, that No speaker, including even the few heads of government Michel Rouge, the spokesman for Group B, could only resort from the OECD countries attending such as President Fran­ to "defining," "analyzing" and "categorizing" the debts in his �ois Mitterrand of France and Prime Minister Gro Brundtland desperate attempts to avoid serious discussion. of Norway, could fail to mention the grim reality of the "It doesn't make any differencewhether you pay the debt economic crisis. The foreign debt has skyrocketed to "uni­ or not; if the present monetary system prevails, you don't get maginable heights" according to Mitterrand, and "will not be any fresh money for development anyway," the Chilean am­ paid back in any real sense" as Brundtland frankly admitted. bassador blew up after another fruitless exchange between Egypt's President Mubarak was even more explicit: "The "North" and "South." He specifiedthat Chile, one of the pet problem of debt has reached serious proportions that cannot projects of the IMF, "which should be applauded by the IMF be ignored," he said, adding that the debt volume of the and the international bankers, since it so far has managed to developing countries last year reached "210% of their total pay back the debt service down to the last cent," nevertheless exports," with the situation being "much worse for the Afri­ "didn't get one penny of new credits." He concluded bluntly: can countries south of the Sahara, where it reaches 270%." "Let's admit that the debt can not be paid in the foreseeable The prices ofraw materials, the only source of income in future ." the developing sector, and with it the terms of trade have What solution does the "South" offer? "Give up your collapsed to levels "lower than those of the depression of the linear, 'Cartesian thinking,' because if you continue in this

EIR July 31, 1987 Economics 7 national trade are equally important. Real commodity prices have never been so low since the 1930s .... The setting is urgent. The development crisis is real. UNCTAD and the whole international community are at a.crossroads. Business as usual will not do. We must all join forces in a new partnership between North and South Speeches to the in the fight against poverty and for a sustainable develop­ Unctad conference ment. Fran�ois Mitterrand We excerpt below noteworthy portions of the speeches of Excerpts translated fr om the sp eech delivered to three heads of governmentto the UNCTAD conference. UNCTAD VII in Geneva, by the President of France, on July 10: Gro Harlem Bruntland The creation of wealth (today) is less and less linked Quotedfr om the sp eech given by the prime minister of to industrial development but more and more to monetary Norway on July 10, in Geneva: and financial gambling. Capital moves bring about more Let us be frank about this: Much of the debt will not profit than industry and trade. Thus the financial depart­ be paid back in any real sense. To maintain such a demand ments of companies are becoming more important than will entail political disturbances in many countries of such the production and construction facilities and productive magnitude that they would be completely unacceptable. investment is decreasing in favor of financial operations What is needed is new lending on concessional terms, new which are oftenspeculative .... investments and economic and social reforms. Major The rich countries must stimulate world economic debtors also need more loans on commercial terms. New growth ....They should boldly take on great projects policies must comprise debt relief, long-term reschedul­ that generate growth. For example, ...the construction ing and conversion to softerter ms. of the tunnel under the [English] Channel. This will bring But lending alone will not suffice. Aid must be ex­ about in our two countries [France and Great Britain] as panded after years of decline. Developing countries need well as in neighboring countries the creation of road infra­ significant increases in financial and other contribu­ structure, telecommunications, rapid railways, and a whole tions .... series of new programs which will contribute to the growth

Aid and lending efforts are essential. In the longer of this region. . . . term, measures to secure increased income from commod­ [We have to] set up a new international monetary ity exports and the abolishment of protectionism in inter- system to better stabilize exchange rates and to establish

way, we will never finda constructive, workable solution," felt almost insulted by the Reagan administration's decision Osvaldo de Rivero told Mr. Rouge, as all delegates from the to limit the American delegation to only a third of those of developing sector smiled broadly and the OECD diplomats France and Japan and to head it with a mere "senior deputy were stunned at the echoes of U.S. economist Lyndon La­ assistant secretary" of the State Department. This has leftthe Rouche, whose ideas and methods dominate international fieldwide open for Moscow to make a big propaganda move discussion of the debt problem. LaRouche's Op eration Juar­ in the developing sector. Observers noted that Boris Aristov, ez proposal for U.S. collaboration with the Ibero-American the Soviet Minister of Foreign Trade, made great efforts to debtor nations, to reorganize the unpayable debt and use it as sound "responsible" and "moderate," when he quoted his a springboard for a worldwide economic boom, has been "comrade prime minister" on the need for the "establishment intensely studied by leading circles throughout the Western of a new international economic order" and a "new political Hemisphere and on other continents since it was firstis sued thinking" based "on the priority of values common to the in 1982. whole of mankind." To the astonished audience, he went on "Take a fresh look at the reality of the problem and let's to support every argument on economic and financialmatters work together to solve the debt crisis in a creative way," was ofthe "South," a move Moscow so far had carefully avoided. Rivero's advice to the OECD countries. When he announced at the end of his speech, that his governmenthas authorized himto sign the agreement of the Washington gives floor to Moscow "Common Fund" of raw materials (draftedby Henry Kissin­ Besides the debt, the other major issue of this conference ger many years ago), all the delegates rose to applaud the is the internal U.S. situation. Representatives of all nations Soviet Union. Afterwards Soviet delegates were seen in many

8 Economics EIR July 31, 1987 a reasonable level of interest rates. . . . an amount exceeding $3 1 billion .... It seems to me only common sense, that the financial What is required is that we live up to the challenge . policy agreed upon by internationalinstitutions and states We should fully understand that this state of affairs, re­ should not endanger development. In order to invest­ sulting from the collapse of the export earnings of the and they have to invest-the countries of the South need developing countries to their lowest level since the great

a net capital inflow. economic crisis of the thirties, cannot go on forever. . . . An economic collapse in any part of the world will Hosni Mubarak engulf all nations, sparing none, even the powerful. No Quotes fr om the speech given by the President of the nation or a group of nations can aspire to live as an Arab Republic of Egypt to UNCTAD VII, July 10 in Ge­ What can self-reliance achieve in conditions dominat­ neva: ed by fluctuating exchange rates, rising interest rates, in­ We have to admit that, so far, all efforts made on the creasing protect,onist policies, increasing restrictions and international level have not yielded concrete results ca­ barriers, finally,the diminishing international liquidity? pable of redressing the structural imbalance of the world The situation is indeed serious. We must start by admitting economy, halting the persistent deterioration of the situa­ that we are all in the same boat to drift, [and] none of us, tion in the developing countries and achieving more jus­ whatever might be his might or power, will survive. We tice and ensuring equal opportunity to all nations and have to close ranks. We have to coordinate our action. We peoples .... have to look at the situation, not in terms of profits and I propose to concentrate on two basic issues, which I losses, but rather from the perspective of the success of believe deserve a special attention and a high priority, on mankind in facing the ultimate challenge: to be or not to account of their great influence in shaping the contempo­ be. rary internationalsit uation ....The firstiss ue is the prob­ We have no other alternative but to act together ear­ lem of debt, which has reached such serious proportions nestly and sincerely to get out of the impasse and to over­ that it cannot be ignored, threatening grave consequences come the crisis. unless the international community, debtors and creditors Failing this, we will have abdicated our responsibility alike, take effective action ....The second issue I would in making history and creating progress. This generation, like to raise before you is the question of the deteriorating which has scored the greatest scientific achievements in terms of trade ....Thi s phenomenon has been accom­ human history, cannot let fall the torch or allow the march panied by a decline in the real flowof development assis­ of civilization to come to an end. The challenge is im­ tance from the rich industrialized nations and a rise in mense, and the responsibility great, but the flame of hope interest rates resulting in a reverse flow of financial re­ will not die and the standard will not fall if we are resolved sources from the developing to the developed countries in to continue unitedly our march forward.

comers of the conference hall intensely briefingdeveloping­ utter some slogans from "Comrade Gorbachov" on the "de­ sector politicians, no doubt stressing the advantages of Mos­ fensive nature of the Red Army," and then rushed to close cow's "peaceful" policy as opposed to the United States. down his press conference only I 0 minutes after it began. The next day, the whole conference was interrupted for In the absence of any sound economic policy from the about one hour so that all delegates be present in the last part U.S. government, the political ideas of LaRouche and his of the propaganda ploy staged by the Soviets, the signing of growing influence in the United States were intensely dis­ this more-than-useless agreement, since the $427 million cussed in Geneva. "Who is going to exploit the international earmarked for the Common Fund will never help to stabilize political vacuum: Moscow or LaRouche?" many a delegate the prices of raw materials, which have collapsed in the last asked, voicing concern about ongoing revelations about the five years alone by about $90 billion. "It's completely use­ "secret government" plans to abolish the U.S. Constitution. less, I agree," said one African diplomat, "but maybe it's a Since LaRouche's economic policies are widely known in political signal that finallysomething will be done." the developing sector, the main topic of discussion was the While everyone recognized the "typical Soviet propagan­ chances of his presidential campaign, and whether there is a da," it was left to EIR to bell the cat. Confronted by EIR's chance, "to get the United States to act with responsibility," correspondent with the question of whether his nice words as the president of UNCTAD VII, Zimbabwe's Finance Min­ about the connection between disarmament and development ister Chidzero told EIR in an interview. No cheap anti-Amer­ meant that Moscow will now abolish its ambitious arms pro­ icanism was expressed in Geneva-just the fear, that Mos­ gram in favor of investments in development projects, the cow would quickly dominate a world abandoned by the gov­ Soviets' Aristov needed some time to recover before he could ernmentof the United States.

EIR July 31, 1987 Economics 9 INTERVIEWS EIR: So you don't think that, with Peru being the spokesman of the entire developing sector on the debt question the fa­ Osvaldo de Rivero mous "10% solution" of your country can gain a majority and be accepted as a solution of the debt problem at this confer­ ence? Rivero: Well, firstof all, the position of Peru is not that all the countries adopt the so-called "10% solution." What we are trying to do is to convince the internationalcommunity that every developing country has a heavy debt burden and that each country has to accommodate the servicing of the Debt problem in debt to its real capacity to pay. This means that it can be limited to a certain percentage of export earnings, of the 'dynamic stage' GNP, of the trade surplus, or related to the price of raw materials; but every country is sovereign to chose the param­ Osvaldo de Rivero is Undersecretaryfo r Economic Affairs eters, according to its real capacity to pay. That principled in the Peruvian Foreign Ministry and head of the Peruvian position of Peru has already been accepted by the Group of delegation at UNCTAD VII in Geneva. Since Peru has been 77 i.e., the entire developing sector. elected chairman of the Group of7 7 in the important "Com­ Now we are going to propose that same principle to the mittee /" at this conference, which deals with the debt prob­ developed countries, although we think that the developed lem, Osvaldo de Rivero is the spokesman fo r the whole de­ countries are not ready to accept this position at this moment. veloping sector on the debt issue. This interview of July 15, But they have to admit, at least in an abstract manner, that and the others which fo llow, were conducted during UNC­ new formulas are needed in order to solve the debt problem. TAD VII in Geneva by EIR correspondents Ana Marfa Men­ Maybe they even think of the possibility of accepting this doza and Hartmut Cramer. concept and furthermore these kinds of formulas. But the problem is that the Peruvian position at this mo­ EIR: Mr. Rivero, what prospects do you see for UNCTAD ment is still unilateral, it has not been negotiated with cred­ VII? Do you think, that unlike in Belgrade, constructive itor countries until now, and I don't think that the creditor solutions will come out? Especially on the crucial debt ques­ countries are going to accept that unilateral act. But they can, tion? possibly, further down the road, agree to negotiate on this. Rivero: Well, I don't want to be optimistic; I have to be After all, this is a political problem, not a technical one. realistic. I think, that because of the political timing of the conference there will be no concrete solutions on the debt EIR: You are optimistic that thiscan happen? question. The debt problem is now in a very dynamic phase, Rivero: I don't want to be optimistic, but the only way that it is in a transition stage, because the banks and the creditor our position is accepted by the creditor countries is that they countries are now forced to think about the debt in a different say: "Ok, we accept the payment of 10% of the debt and we way. They begin to believe that the debt is possibly unpaya­ start a negotiation process." I think the thesis is going to be ble. For the firsttime , the banks are building capital reserves accepted little by little; it has been already accepted by the to prepare for the possibility that the debt can't be paid. Group of 77. Maybe other countries are ready to accept it on Also, many developing countries are starting to think that the condition that we are ready to negotiate. development comes firstand servicing the debt second. The We are not against negotiations, but the problem we are fact, that Peru was elected as chairman and spokesman for facing now is that we are governed by the "creditors' law." the Group of 77 in "Committee 1" is a reflectionof this. The creditors simply impose their law on us. When we put You see, Peru is a country which a year ago was consid­ our "debtors' law," the "10% solution" or any other percent­ eredto be a typical "pirate"; even for developing countries age on the table, we are faced with the "creditors' law," Peru was the bad example, the "bad guy." Now the situation which means you have to refinanceand pay spreads and more is different; Peru is no longer alone: Now Brazil doesn't pay interest, which in tum increase the debt burden, with the the debt, as well as Ecuador, Costa Rica, and the Ivory Coast. result that each year or every two years this vicious circle of Furthermore, in Africa you have Zaire and Nigeria paying "refinancing" is continued. only 20% of their export earningsand Zambia only 10%, like If you accept this, you are going to pay an eternal revenue Peru. Whatwas very new two years ago when Peru started to the system. To this we say: No! it, is now verycommon in the Group of 77, but I don't think, If the creditors want to agree with the principle that we that the conference is prepared to accept this as a solution to have to get revenues and then negotiate on the basis of our thedebt problem. I think we have to wait a bit more, the time revenues, we say, yes. But we don't accept a decision where is not yet favorable to reach agreements. the "creditors' law" is imposed on us; we want a decision

10 Economics EIR July 31, 1987 where the law of the creditor and that of the debtor are treated equally as in all civilized countries. In a civilized country Daniel Suazo you have civil rights also for the debtors. For example, if you owe money in the U.S.A. and your creditor increases the interest, you have the right to go to court and sue him. This principleof law does not exist on the international scene. What we want is to negotiate a new general and multilat­ eral framework to solve this problem. Not the law of the creditors like the Club of Paris and the Committee of the New York banks which are both unilateral. They claim it's multi­ lateral; maybe for them, but for us it's unilateral. We would ann like to negotiate a new framework where the 10% or 20% Palliatives c ot solution can be agreed upon, but we will never accept this "creditors' law" which is prevailing now. If the creditors solve debt problem insist on that, they will see that what happened in Peru is going to happen in many more countries. Peru was the first Daniel Suazo is Minister Counsellor, Ambassador at the to move, but now we have Ecuador, Brazil, and the African Permanent Mission of the Dominican Republic in Geneva. countries I already mentioned. Since the creditors insist on He was interviewed in Geneva on July 16. their terms, the debtors are starting also to impose their law, unilaterally. EIR: Mr. Suazo, the biggest obstacle to development is undoubtedly the foreign debt, which is intensely discussed in EIR: The United States have not spoken yet at this confer­ "Committee I" at UNCTAD VII here in Geneva. Peru has ence, but the fact, that they have downgraded their delegation been elected as chairman of the Group of 77 in this important at UNCTAD VII is seen by many observers almost as an committee, which means that Peru is representing the whole insult. What role do you think will the U.S.A. play here in developing sector at this conference. Does this also mean, Geneva? that the Peruvian position, the famous "10% solution," can Rivero: For me, the attitude of the U. S. governmentat this be agreed upon as a solution to the debt crisis? conference reflects that they are still pursuing very conser­ Suazo: What you are saying is only a number. The essential vative policies concerning the problems of the world econo­ thing is the principle which Peru has introduced. The reality my, whereas the important step which Japan has already is that the developing countries cannot pay the debt under the decided to take reflects the dynamic nature of the Japanese conditions the international financial institutions are impos­ economy. With these initiatives they are one of the big actors ing on these countries, so there has to be a change in these in this conference, as well as the Soviet Union. policies. As I said in my speech to the conference: If this type The only big country that unfortunately has not changed of situation continues, then my country could initiate soon a id the U.S.A., they still keep the same pace that started with special commercial relation with countries in the East bloc to the Reagan administration. I hope they will rethink their try to find amarket for its sugar production. attitude and live up to their responsibility , because the U. S. My country, for example, has suffered immensely from economy is the biggest in the world, it is the most popular the drop in the terms of trade since 1970. The problem of country and they have to start thinking in a more cosmopoli­ foreign debt is also linked to the fact that every year, less and tan way. less capital comes into the country, so there is no money for investment. Consequently, this has resulted in a general de­ EIR: In the ongoing election campaign in the U. S., Demo­ terioration of the living standard of the population and has cratic presidential candidate Lyndon LaRouche is the only threatened our social and political stability. Latin American candidate in sight who campaigns for an economic policy economies were placed in strong and compulsive adjustment based on growth and development. Would Peru like to see programs, which resulted in more contraction. The problem Mr. LaRouche playing a more prominent role in the U.S. cannot be solved with temporary palliatives or with more elections? debt restructuration accompanied by new money to pay old Rivero: Yes, I think the United States needs new politicians, loans. Our country's debt has now risen to $4 billion, which all the way. I do not know Mr. LaRouche personally, but I means we would have to pay more than 100% of our export have heard that he is a very dynamic and provocative man. earnings in order to pay the debt. That's impossible. Well, you know, an open society needs some kind of provo­ So obviously we need relief on the debt, but first of all, cation sometimes. I think it's good that he runs for President we need new credits for investment and development so that and provokes the American people to think and to change. we can generate more wealth. Whether such a policy can be Why not? agreed upon at this conference. I cannot say.

EIR July 31, 1987 Economics U EIR: What are , in your view, the most important develop­ views, but certainly I would very much like to see these ments at UNCTAD VII so far? What especially do you think economic views gain moreinfluence inside the United States. about the speech of French President Mitterrand in which he talked about hosting a Paris conference on development, the stabilization of the monetary system, and the necessity to start infrastructure projects in the developing countries in the same way that France and Great Britain started to build the cross-Channeltunnel , or "Chunnel"? Bernard Chidzero Suazo: Of course, I appreciate his speech. But I also would like to say that it depends whether the speech was given by the statesman or the politician. If it was given by the states­ man, then not only my country, the Dominican Republic, but I think the majority of the Latin American countries would be very happy to see these kinds of policies applied. Let me 'There must be a add, that such policies will be very much appreciated, not only if they come from France, but from any other industrial­ reasonable limit' ized nation. Bernard Chidzero. the minister of finance. economic plan­ EIR: Speaking about other industrialized countries, what is ning. and development of Zimbabwe. has been elected pres­ your comment on the fact, that the governmentof the United ident of UNCTAD VII in Geneva. He was interviewed on July States has decided to downgrade its delegation to UNCTAD 16. VII to the level of a "senior deputy assistant secretary" of the State Department? EIR: There is no doubt, that the problem of the foreigndebt Suazo: It is very sad to see such an attitude from the United is one of the biggest obstacles for development. Does the fact States of America. There are even times when the seats re­ that Peru has been elected as the spokesman of the entire served for the delegation of the United States are empty in developing sector at UNCT AD VII as far as the debt problem the assembly while representatives of other nations are giving is concerned mean. that their "10% solution" will spread to their speeches. Thatis not what we would wish to see from a other countries tooand couldn't the Peruvian principle be the country with such a history as the United States. common basis for an understanding between "North" and We would like to see, that this country returns to the "South"? moral standards it had long ago. The last time we saw the Chidzero: Surely, that is what it means. The fact that Peru United States of America show a sincere intent to help de­ has been elected or appointed spokesman of the "Group of veloping countries in Latin America on a wide, large scale 77" on this issue, does not necessarily mean that there is was during the presidency of John F. Kennedy, when he unanimity or that there is a fixedposition which is identical initiated his famous program, "Alliance for Progress." With to that one which Peru has taken. There are different forms all its errors and misinterpretations, this was a good program of the same principle applied by different countries: Peruhas to aid the development of Third World nations. limited its debt service payment to 10% of its exportearnings ; recently Zambia has taken similar measures, they are going EIR: The only presidential candidate in the U.S. so far who to pay about 5% of their export earnings; Brazil has post­ has proposed to get out of the economic depression by giving poned the payment of its interest; recently Ivory Coast has new long-term, low-interest credits directed specifically to taken similar measures; Zaire has been doing it and some great projects in the developing sector, is Lyndon LaRouche. countries have just silently stoppedpaying. Is this the kind of program you are talking about? What doesthis mean? Peru has recognized as Zambia, as Suazo: These policies, as I indicated in my speech, are cer­ Ivory Coast and even Brazil that they have an obligation to tainly the kind of policies that we in the developing countries pay back, they do not repudiate the debt service as such. But need in order to solve our financial crisis. Whoever adopts they want to change the conditions. You cannot expectpeople such policies, which are the ones that we want and need to to commit suicide in order to meet an obligation, as they say see, is welcome. in Latin "Primo vivere, secundo philosophare," first you The Baker Plan and Senator Bradley's initiatives are also must eat, before you philosophize. policies that we have hopes for. Unfortunately, we have seen It is absolutely essential that the debt service payments they have not been fully developed. should not exhaust the financial resources of any country to the point that there is no money for education or health, let EIR: Does that mean you support Lyndon LaRouche? alone for investments in agriculture, mining, transportation, Suazo: I don't know him enough to support his political etc., which is the very basis to secure its future so they can

12 Economics EIR July 31, 1987 meet further obligations. In other words, what is driven home whole to correct certain things, imbalances for instance, is that there must be a reasonable limit. How do we measure without harming any of the long-term interests of the devel­ it? Whether it is a percentage of the GDP, of the export oped countries, because what we need is a broader coopera­ earnings, or of the total revenue coming from various sources, tion, not unilateral declarations. We think that particularly there always must be a net ftowback into the economy, that Bangladesh has been helped by the Western world to a large is the gist of the argument. extent. In fact, when our country gained independence, the Western world made a tremendous contribution and gave whole-hearted support. Of course, then we were in a very bad condition, as you know; Bangladesh is a country of 52,000 square miles, and with a population of 100 million people-85 million at that time-it has the highest popula­ Abdul Munim tion density in the world.

ElK: Can you tell us a bit more about this? Munim: Ours are very peculiar circumstances, compared to Bangladesh needs other developing countries. My personal belief is that Ban­ gladesh is a country with great potentialities. The problem is that for a long time we had considerable mismanagement of infrastructure this potential; but the main problem was, that we never had been in control of our destiny. Abdul Munim, Commerce Minister of Bangladesh , headed But since we became independent in 1972, we are in his country'sdelegation to UNCTAD VII, where EIR inter­ control of our destiny. We would like to go forward, and I viewed him in Geneva on July J 5. feel that we can and make a contribution to the world. But for that we need help, not charity. We are not beggars; if we ElK: Mr. Minister, several speakers have not only stated take something. we will return it. Of course we cannot pay the fact that UNCTAD is the only forum where the "North­ the interest rates in the commercial market and things like South" dialogue still takes place, but have even said. that this that, but although we have immense problems, we have been seventh session may be the last chance to findsolutions to the paying back the money we owe. We have not defaulted so great problems the developing sector is facing. What does far. your country expect from this conference? Munim: Well, I would not call it the last chance. Definitely ElK: Undoubtedly the biggest issue which will be discussed UNCT AD VII offers a chance for dialogue and cooperation during this conference is the debt issue. The proposal of the that can steer the world economy into the right direction. My developing sector on the table of UNCT AD VII calls for debt government feels, and I think most of the developing coun­ relief, a new monetary system and a new, just world econom­ tries feel , that it is in the interest of the world economy as a ic order. It seems that French President Mitterrand in his

At the UNCTAD meeting, the Soviets led the effo rt to implement Henry Kissinger's Common Fund plan, in opposition to Alan Garda's "10% solution" and Lyndon LaRouche's "Operation Juarez." This cartoon, drawn at the time o/ Garda 's September 1985 visit to the U.N., portrayed the Kissinger­ Castro policy convergence which is so much in evidence today .

ElK July 31, 1987 Economics 13 speechto the conference went in this direction when he called for a "new internationalmonetary system". . . . Currency Rates Munim: ...Yes , I mentioned this in my speech too. We acknowledge with gratefulness the declaration of President The dollar in deutschemarks Mitterrand, and it is goodthat France as a leading country in New Yo rk !me ..nern- lIxlna thisrespect is giving help where help is necessary. We also think that a substantial program of action has not really taken 1.11 off. If this statement by the French President makes it more 1." positive and morereal , it is very interesting. The developing world is a very big market which needs 1.90 certain things. Our position is clear: Our countries need fi­ nancial resourcesand investments, so that we can develop all � �� 1.88 - our potentialities and increase the living standards of our - population. It is necessary to increase the living standards, 1.70 the education rates, just to "take off'; because there is a 612 619 6116 6/23 6130 717 7114 7121 certain"minimum" below which you cannot "take off." The dollar in yen For this we need investments which, naturally, have to NewYork "Ieal'lernoon fixing be, at least for the time being, given at low interest rates. Thatis all we want, and understanding. 170

EIR: PresidentMitterrand alsomentioned that great projects 160 wereneeded to revive the worldecon omy. What would be the kind of greatpro jects for a country like Bangladesh, in 158 - orderto ''take off'? .- � - - ...... Munim: As for our country, the projects which we really 1411 r- need areinfrastructure pro jects in the communications sector and in the energy sector. We also need water management 1311 projects, but for these we only need loans, while for the ones 612 619 6116 6123 6130 717 7114 7121 I first mentioned, we need not only the financial resources, The British pound in dollars but also technical advice and machinery. We also want our Se,,· \ork lale afternoon Ihinl! peopleto beeducated by these technical advisers too. As far as investment is concerned, we need investments 1.70 mainly in infrastructure, especiallyin electricity and gas. We have a lot of natural gas, but our exploration has not been UI � � - �.... completed, each exploration needs a lot of money and we don't have it. Thereis even the chance to drill for some oil in 1.50 certain locations in our country, but we do not have the 1M resourcesto follow up the investigations. We have got some resourcesfrom the World Bank and concessional loans from 1.30 other institutions, but those are very small amounts. So it is 612 619 6116 6/23 6130 717 7114 7121 verydifficult for us to move forward. The dollar in Swiss francs EIR: In the ongoing U.S. election campaign, Democratic New York "Ie afternoon fixing presidentialcandidate Lyndon LaRouche is campaigning on thebasis of solving the world economic crisis by implement­ 1M ing a new monetary system which will generate longterm, low-interestcredits for greatdevelopment projects, especial­ 1.78 ly in the"South ." What do you think about that? I .• Munim: Well, I'm not acquainted with Mr. LaRouche, but definitely I think that the policies you mentioned are good � ... "'""--- and that they actually could change the situation for the bet­ -- "-"" ter. These policy changes ultimately, in the interest of are, 1M the world economy. That is what I personally think, not 612 619 6116 6Ill 6130 717 7/14 7/21 necessarilythe position of my government.

14 Economics EIR July 31, 1987 Foreign Exchange by David Goldman

How long for the Japanese inftow? cies, and the dollar's role as reserve A political deal over the Persian Gulfhas temporarily boosted currency is receding rapidly. the dollar. All that Japanese institutions need to do to make life miserable for the U.S. capital markets, in any event, is to "hedge" their dollar securities hold­ ings, i.e., sell the same securities short in futures markets. t appears that the Japanese govern­ selling by securities and trading hous­ However, the Japanese have an Iment showed its gratitude to Washing­ es." The securities and trading hous­ extremely practical attitude toward the ton for keeping the Persian Gulf oil es, it continued, "have turned from net cost of their security, which depends lane open, by forcing Japanese finan­ buyers to net sellers after recent de­ upon the United States. To the extent cial institutions to buy dollar-denom­ clines in the U.S. bond market." that Weinberger's policy of protecting inated securities. Japan's monetary authorities had the Gulf prevails, they will assist the By the week of July 19, Wall Street a double motivation for squeezing U.S. administration with its own appeared to have forgotten the days funds into the dollar during June and problems-as Prime Minister Naka­

when bond traders programmed their July. First, they were committed to sone did by stabilizing the U . S. dollar desk-top computers to show the dol­ shaking out a securities market bubble days before the last November elec­ lar-yen spot rate at all times, and bank­ which had pushed price-earnings ra­ tions. ers feared that a retaliatory trade bill tios on the Tokyo stock exchange into But the question remains: How might prompt the Japanese to reduce three digits. That shakeout was more long can this continue? Clearly, the their purchases of U.S . securities, or less accomplished early in the week Japanese will not compromise their provoking a crisis in the U.S. capital of July 19. own financial system in the processof markets. Second, Japan was the principal supporting the dollar, as Bank of Most analysts argued that the Jap­ beneficiary of American-British­ America learnedwhen it failed to raise anese capital inflow would continue French military action in the Persian capital from Japanese institutions. indefinitely, noting that the rising dol­ Gulf. Japan receives 70% of its energy Japan's problem is how to deal lar of the month of July provides cap­ through the Gulf, and stands to lose sensibly with an administration whose ital gains for Japanese investors' dol­ the most from Iranian attacks against existence is in visible jeopardy, and lar portfolios, much as the falling dol­ oil tankers. whose leading foreign-policy initia­ lar caused huge losses. A less immediately, but equally tives now compromise the most fun­ The dollar's rebound to a peak of important aspect of Japanese-Ameri­ damental of Japanese strategic inter­ DM 1.86 and yen 153, following the can military cooperation came to the ests, i.e., the American nuclear um­ previous week's announcement of a surface the same week, when Defense brella over its allies. huge $14.4 billion trade deficit, ap­ Secretary Caspar Weinberger signed Against growing domestic oppo­ peared to lend credibility to this argu­ an agreement with Tokyo for cooper­ sition, Japan's Prime Minister Yasu­ ment. ation in strategic defense research, ig­ hiro Nakasone has bludgeoned the re­ But by EIR ' s July 24 deadline, the noring the scandal surrounding the luctant Japanese monetary authori­ yen had fallen to 1 .49, and major New Toshiba firm's sales of technology to ties, who have bludgeoned the even­ York banks warned their foreign ex­ the Soviet Union. more-reluctant financial institutions, change customers that Japanese insti­ It is emphatically not the case that to maintain the flow into the dollar. tutions had turnedinto heavy net sell­ Japan's nearly $100 billion a year of In the case of the currenttrade bill, ers of dollars. investible surpluses "cannot bypass the the issue is not so much that Japan One bank's commentary for for­ U.S. capital markets," as Treasury might retaliate against injury done by eign-exchange customers July 24 Assistant Secretary David C. Mulford the U. S. Congress. Rather, the pro­ warned that "sentiment for the U.S. bragged in aJuly 16 speech. The glob­ tectionist mobilization is viewed, cor­ currency is weakening," noting that al capital market, which used to issue rectly, by the Japanese, as an index of the dollar's steep fall in overnight 80% of its paper in dollars, now issues the administration' s own collapse of trading was due to "active speculative 60% of its paper in non-dollar curren- credibility in the economic arena.

EIR July 31, 1987 Economics 15 Overcoming the Reagan 'Recovery'

u. s. manned space-flight headquarters to be in Virginia by Joyce Fredman

The third in a series of EIR surveys of state-level production very initiation of such a program sends the entire nation's capabilities shows the SDI and space-related potential of economy into a capital investment boom that increases the Virginia . amount of capital equipment available per industrial opera­ tive. This is the "Manhattan Project" approach: an off-budget The new manned space station which is being planned by operation, totally detached from the Office of Management NASA will have its management headquarters located in and Budget and other such bureaucratic constraints. This Reston, Virginia, only a short distance from the nation's means a huge upsurge in mining, manufacturing, construc­ capital. Aside from its own workforce, this means numerous tion, and utilities, as technology developed by previous pro­ corporations such as Lockheed, Boeing, and TRW will most grams, but not yet implemented, is infused into the economy. likely set up some sort of officesnear by. Along with the new For many, the SDI means more silicon chips, more teflon, shuttle museum planned for Dulles InternationalAirport, the and the vision of so-called "Beltway Bandits" chomping at whole Northern Virginia corridor could go from hotels and the bit for high-tech contracts. Even though there indeed will shopping malls to a center of science. be effects of this nature, the guts of the program and its economic impact are something much more profound and The SDI much more durable-rooted in American System econom­ One of the most important aspects of an economic over­ ics. This is a program, subsumed under a Moon-Mars project, haul of the state of Virginia is the impact of the Strategic which lifts Man's eyes to the stars. It is a program which also Defense Initiative, both in its own right, and as a driver for raises living standards around the globe. It represents eco­ many spin-off industries. nomic activity in its noblest moment-man organizing his An important consideration for the impact of the SOl in universe at the highest level. Virginia is the large number of high-priority military targets in this region. Military facilities alone cover some 450 square An SDl fleet miles: the Pentagon, the Administrative Center of the De­ In Virginia, the shipyards ofNewport News and Norfolk partmentof Defense (Arlington), Norfolk Naval Base, Quan­ could quadruple their output and lead the country into a 21st­ tico Marine Base, Langley Air Force Base, and the Coast century defense, building an "SOl-dedicated fleet." The most Guard, not to mention the Capital, Dulles International Air­ obvious requirement is the ballistic missile submarines that port, Newport News shipyard, NATO's United States head­ could launch pop-up x-ray lasers and mirrors into space. quarters command, and the Federal Aviation Administration What is also required for the SOl is a general fleet buildup. station. At present, the United States has a minimal anti-submarine In the immediate term, a ground-based anti-missile- mis­ warfare capability. For this, two types of vessels are needed: sile capability is needed, which would continue to be a per­ attack submarines, which would pursue enemy submarines manent feature of SOl for some time. The exciting feature of carrying ballistic missiles; and missile-carrying surface ships, the SOl program is that within two days of the announcement which attack enemy submarines sighted by aircraft or located of a commitment to its full-scale implementation on a crash by sonar. Since submarines take several years to complete, basis, the impact would be felt throughout the state and na­ their construction must begin immediately. tion. The program necessitates that capital goods industries A large hidden-redundant launch capability is also a crit­ expand to produce the most advanced possible equipment ical feature. In Virginia's case, this would mean an under­ and systems, and do so within a specific time-frame. The water missile-launch facility.

16 Economics EIR July 31, 1987 Uranium and major coal regions in Virginia Counties containing the deposits are shown

MARYLAND

� Uranium � Coal '/

TENNESSEE NORTH CAROLINA

The construction of these means not only a gear-up of the worth noting. Presently, there are only two nuclear power shipbuilding facilities of Virginia, but of the total infrastruc­ plants. One is in Surry , and has a capacity of 1,830 mega­ ture of the state . The productive manpower needed for such watts; the other is in North Anna at Lake Anna, and has a a program means a demand for advanced education, access capacity of 1,562 megawatts. They provide 22 billion kilo­ to quality health care , high nutrition, and living sta'1dards. watt-hours/year, approximately 50% of Virginia Power's Infrastructure must be upgraded. The state's 65,000 miles electricity. of streets and highways will have to be improved to handle When asked about future plans for nuclear plants, spokes­ larger traffic Hows. Currently, there are \3,000 urban, 52,500 men said there absolutely weren't any. In fact, four nuclear rural , and 1,024 interstate miles; the interstate and urban units that had previously been planned have been cancelled: systems must be rapidly improved and expanded. Here is two at Surry in the late 1970s, and two more at North Anna where the construction industry will be immediately affected. in the early 1980s. Why? Because now "thetrend" is to build Thousands of jobs could be opened up and new contracts smaller non-nuclear units with shorter lead time, approxi­ issued right away. mately two years , such as the combined cycle unit planned at Chesterfield. It will have a capacity of 205 megawatts and Power for the project use natural gas or coal. Virginia Power argues that the 10- In order to power such an effort , the state must have a year lead time and initial capital investment required for clear and stated commitment to maximum energy-producing nuclear plants is no longer justified economically, as popu­ capabilities, with no homage to the conservationists. Where lation is not growing at a fast enough rate , nor is an industrial does the state's energy program stand currently? The prob­ capacity developing at rates comparable to earlier times. lems involved in Virginia's energy policy are indicative of Under these circumstances, there appears to be a virtual the backward national trends acclimatized to a cultural pes­ glut of energy. simism nurtured in an economy which considers progress Nuclear is not the only power source being passed by. passe. Even hydroelectric power is being reevaluated. Hydroelec­ Virginia's electricity production breaks down as fo llows, tric now provides for approximately 5% of the state's energy, in kilowatt-hours: hydroelectric-818 million; fossil fuel- while fossil fuel accounts for 45%. 18.9 billion; nuclear-22.3 billion. If we are to provide adequate energy for a crash SDI Virginia Power, which provides electricity for 60% of program , we will minimally need to revitalize the programs the state's land area and 80% of the population, is an example for the four aborted nuclear units, to permit supporting a

EIR July 31, 1987 Economics 17 population expected to increase exponentially. Additionally, TABLE 1 reliable "excess" power sources are required for directed­ Virginia companies with SOl contracts energy (e. g., laser) research. (dollar amounts for FY86) Virginia's uranium Institute for Defense Analysis $57,438,000 One of Virginia's unique features is its capacity to mine Atlantic Research Corp. $ 3,231 ,000 and process its own uranium for local power plants, as well Schafer WJ Assoc. Inc. $ 3,094,000 as make more available for exports. There are two areas of Kaman Sciences Corp. $ 2,850,000 uranium deposits in the state (see map). In 1981, Marline Int. Business Machines $ 2,054,000 Uranium Corp. discovered an estimated 30 million pounds G T Devices Inc. $ 1,928,000 of high-grade uranium in Pittsylvania County (southernVi r­ BDM Corp. $ 1,299,000 ginia). Marline, a subsidiary of the New York-based Marline Polaris Inc. $ 1,1 27,000 Oil Corp., had leased about 55,000 acres in Virginia and had TRW Inc. $ 1,019,000 been drilling near Danville. The find, if developed, was es­ Betac Corp. $ 593,000 timated to be worth $200 mill ion and 900 jobs to the county. System Planning Corp. $ 400,000 There was considerable local support for the project, al­ Computer Sciences Corp. $ 325,000 though the Virginia Farm Bureau eventually came out against Orlando Tech. Inc. $ 238,000 the mining for fear that contaminated water would poison General Research Corp. $ 207,000 tobacco crops. Science Applications Int. $ 193,000 Some 15,000 acres were also discovered in the more Shenandoah System Co. $ 185,000 northern counties of Orange, Culpeper, Fauquier, and Mad­ Analytic Decisions Inc. $ 153,000 ison, and it was in these areas (in the general vicinity of the Presearch Inc. $ 105,000 University of Virginia at Charlottesville) that local protests Sparta Inc. $ 57,000 were organized. The radical conservationist Piedmont Envi­ ronmental Council was leader of the pack. Through a series Total $97,986,000 of legislative maneuvers, a bill was passed in the 1982 leg­ islative session and signed by Gov. Charles Robb in April 1982, providing for a moratorium on issuing uranium mining permits in Virginia. The moratorium extended until July 1984, but declared that it was state policy to allow mining in the future if it could be done safely. In October 1984, the uranium task force of the General Assembly recommended that uranium mining be permitted in Virginia on condition that more stringent radiation stan­ dards than the federal ones be applied; it also called for a prohibition on discharges of processed water into surround­ ing streams, and for strict liability standards to be adminis­ tered by the courts. Marline was working toward developing joint ventures with the Tennessee Valley Authority and other utilities. Despite visits to the French government uranium­ processing plant at Limoges by a few optimistic state repre­ sentatives, the efforts were never brought to fruition. It is no small matter that in a region as depressed and burdened by poverty as southwestern Virginia, a gang of special-interest "environmentalist" incompetents known as the Piedmont Environmental Council (PEC) , with Gov. Charles Robb's acquiesence, were able to execute a death sentence on a much needed industry, uranium mining. The PEC simply does the leg-work for private interests that include the Mellon family, who oppose the development of SOl, nuclear power, and just about everything else. The North Anna Power Station, one of Virginia 's two nuclear Aside from the uranium potential, the most important plants, needed to power an industry buildup . mineral resource in Virginia, both in quantity and value, is

18 Economics EIR July 31, 1987 bituminous coal . Coal, although antiquated as an energy Institute of Marine Science, as well as Norfolk Southern source, is in great demand for making composite materials. Corp. Railroad, and several shipyards, the maritime center Seven counties in the Appalachian Plateaus region, underlaid is being built instead of the proposed Cousteau Ocean Cen­ chiefly by sandstone, shale, and coal , constitute the South­ ter, which was envisioned as an indoor amusement park. In west Virginia Coal Field (see map). During 1985, more than this case, at least, wiser heads prevailed. 44 million tons of bituminous coal valued at $1.55 billion were produced from this field. Bituminous coal has also been produced in the Richmond area and semi anthracite coal in the Valley and Ridge region. In 1985, Virginia ranked sixth among coal-producing states, with large reserves of high­ quality coal still present. SILVER Virginia is also rich in economically valuable rock for construction. Deposits of granitic rocks, trap rock, soap­ SHORT SQUEEZE , stone, slate, quartzite, and other rocks occur in the Piedmont • WHO? e WHAT."e WHY?,'. region. The production of stone, which may be crushed for NOt whatyou think! Daily limits soon. E;xchatlge': roads, concrete aggregate, and other uses, or shaped for use ,cannot . stop this one because . it · js different,' as dimension stone, comes next in importance aftercoal . The Send $5 ta SlllET for information. He:.'thiI'. advisor . ·the total value of stone quarried in 1985 was more than $228 '9ft. who prediccell oth8t _. ' ... squeezes. Make per million. Kyanite occurs in the Piedmont, and Virginia is the ".0 �! '.. . SIIBET PU IUCAfl ONS leading state in production of this mineral , which is used for 1091 E. WaOOBURY r:!O., PASAOlEN�. CA 9t104 ceramic and refractory products. Hence, there is a tremen­ Name_�- ---' dous amount of natural resources in Virginia for the building ��_�� projects needed. Ad�ess ______� __ . State Zip A space museum, ship museum, and space station ' The ambitious plans already under way in the state for technology museums and science centers can be of great educational value in giving the local and regional population CONSULTING some of the tools required to enter the Space Age. The Air and Space Museum in Washington, D.C.-the ARBORIST most heavily trafficked museum in the world-is going to Available to Assist in open a Shuttle museum branch at Dulles International Air­ port. On June 5, the National Capital Planning Commission The planning and development of approved an estimated $1.9 billion in federal facilities, which wooded sites throughout the continental included $32 million for the Dulles Wing of the National Air United States as well as and Space Museum. The project was described by the Federal Capital Im­ The development of urban and provements Program in the following terms: "Thirty-two suburban planting areas and million dollars for the design and construction of a 100,000 square-foot aircraft hangar-type building for the exhibition The planning of individual of large aircraft and spacecraft such as the space shuttle, homes subdivisions or the Concorde, and the Boeing 747 and 707 jetliners." The industrial parks description concluded that , eventually, the Smithsonian In­ stitution believes that four hangar facilities of approximately 100,000 square feet each could be constructed over a lO­ IS year period. This could be a major science and educational institution. For further information and availability please contact Perry Crawford III In June, plans were released for a $30 million national maritime center on the Norfolk waterfront. It would combine Crawford Tree and Landscape Services the latest in marine technology with international shipping 8530 West Calumet Road Milwaukee, Wisconsin 53224 and naval history. Combining groups such as the Navy, the Coast Guard, the Virginia Port Authority, and the Virginia

EIR July 31, 1987 Economics 19 •

1 Agriculture by Marcia Merry

'Meat and milk will make you sick' plenty on the shelves because millions Food fa ddist "experts" rationalize the loss of U.S. fa rm output of people can't afford to buy meat and potential. dairy foods. The anti-meat and -milk lobby is so activated, they filed a request on July 21, to have the Food and Drug new phase of propaganda has be­ The number of meat animals na­ Administration reclassify certain cat­ gunA from the food faddist camp about tionally (cattle, hogs, and sheep) has egories of milk to attempt to deter the the dangers of animal protein in the now dropped to the lowest level since public from wanting normal-fat-con­ diet. In mid-July, a series of articles the early 1960s. Domestic output of tent (3.2%) milk, or even 2% fat-con­ appeared in the major U.S. press, on beef, lamb, veal, and pork per capita tent milk. The 2% fat-content milk, the theme "Research is Linking Too has dropped drastically. and the 1 % fat-content milk they con­ Much Protein to Disease" (headline Temporarily, in recent years, im­ tend aremisl eading if called "low fat." article in the Richmond Times-Dis­ ports of these products disguised the They contend that only skim milk (no patch, July 16). The so-called re­ decline in home output. However, the fat) should be called "low fat." search review was released by the lower-valued dollar now commands The argument being made against Center for Science in the Public Inter­ fewer imports; at the same time, farm­ meat and milk by the faddist "experts" est, a Naderite group that has consist­ ers abroadas well as at home, are going is that since individuals with weak ently opposed nuclear power and ad­ under, and sources of exports are fall­ kidney functioning benefit by reduc­ vanced technology R&D for industry , ing. ing the throughput of nitrogen-con­ agriculture, medicine, and the envi­ For example, the meat herd num­ taining waste products from meat and ronment. bers in Canada are shrinking under the milk, then healthy people of all ages The theme of the article-and the worldwide depression conditions. and sizes should also reduce their meat accompanying propaganda cam­ The number of milk animals has and milk consumption. . paign-goes far beyond the questions fallen. Over the last 15 months of the Their contention is that whatever of cholesterol, lactose, or other food federal "Dairy Herd Termination Pro­ the daily calorie requirement for an elements that are undesirable for cer­ gram," at least 1.5 million milk ani­ individual, little of it should come from tain individuals. The new theme is mals were eliminated. Milk output has animal sources-neither animal fats "Less Steak, More Pasta," and that been reduced so significantlythat there nor proteins. meat should better be used as a flavor­ now is no reserve capacity (unless Consider: If you think this way, ing, and milk as merely an ingredient farmers were induced to rev up pro­ then the decline in the ability of the (in cereals products), not as a food. A duction again). United States to produce food is sup­ July 15 Washington Post cooking col­ Every pound of the current "sur­ posed to be "good for you," and you umn aimed at "Yup-persons" is typi­ plus" dairy product stocks in govern­ won't demand emergency action to re­ cal: "CSPI recommends eating at least ment storage (under the milk market­ store the productive potential of U.S. one meal a day with little or no animal ing stabilization program) are com­ agriculture. protein. It urges us to learnnew ways mitted for distribution in one of the The real issue of kidney function­ to prepare grains, legumes, pasta, and national school or charity distribution ing in the population at large is a mat­ vegetables, and to use meat and poul­ programs. ter of the aging process, except in in­ try only as condiments." Imagine or­ When school opens in September, dividual cases of illness and malfunc­ dering "aura of steak" as a side dish, some urban areas will beshort of milk, tion. In populations that live long, the and com and applesauce as the main and have to ration. As it is, the only decline in kidney function shows up. meal. reason the lack of outputis not visible, According to researcher Mackenzie The argument that meat and milk is that more and more households are Walser of the Johns Hopkins School are harmful, advanced by the "ex­ impoverishedand unable to afford the of Medicine, "If there were nursing perts" at the Center for Science in the high-quality animal protein in their homes for old rats, they'd be full of . Public Interest, is bogus. But first, diet-meat, ice cream, dairy prod­ animals withkidney disease ....All consider the timing of the campaign ucts, whole milk, that used to be rou­ laboratory rats developed this as they against meat and milk. tine. Therefore, there appears to be age."

20 Economics EIR July 31, 1987 Domestic Credit by EIR Staff

Government bankrupt by end of July? run out of control , and turned into a An unresolved fe deral debt ceiling crisis may blow up in the real-life catastrophe. administration's fa ce. No one has yet brought up the sub­ ject of how a failing economy will be brought into line with the Gramm­ Rudman-Hollings "targets." On July 16, Budget Director Mill­ ill Simon has not yet announced a for the General Accounting Office of er told the Cabinet that the deficit for Bleveraged buyout of the Office of the U. S. Congress to institute auto­ the fiscal year ending Sept. 30 would Management and Budget, but the matic across-the-board cuts, should the fall to $155 billion, down from pre­ prospects that the federal government deficit numbers exceed proscribed vious estimates of $173 billion. That will actually run out of money were levels. assumes a $20 billion windfall from strong and growing at EIR's July 22 All factions in Congress agree that tax reform, which will turn into a $20 deadline. automatic sequestration must now be billion reduction in revenues during Five days before the Treasury will restored. What they disagree about is Fiscal Year 1988, to which the run out of money, neither the Senate the extent to which the administration Gramm-Rudman straitjackets apply. nor House has reached agreement on will be entrusted to administer them, Even assuming that Budget Direc­ an extension of the federal debt ceil­ or to what extent Congress will exe­ tor Miller is right, and tax reform pro­ ing, which expired July 17. cute the cuts. duces a $20 billion swing toward the The Treasury cannot borrow mon­ Since the latter demand, favored black, the current tax schedules, which ey to cover its deficit, and will fail to by Senator Chiles, who "does not trust postpone tax reduction to future years, mail Social Security checks if the fed­ the administration to carry out the pol­ should push the deficit back to the eral debt ceiling is not extended by icy," according to Senate sources, $190-$200 billion range for Fiscal Congress by July 27. raises constitutional issues, brewing 1988. Although Senate Budget Commit­ the poison is no simple job. Gramm-Rudman currently de­ tee sources insist that some makeshift Most commentators have, hereto­ mands a $108 billion deficit for that agreement will emerge by then-per­ fore , dismissed these events as the year. Even that assumes a continued haps only a 30-day extension-Sen­ usual debt-ceiling cliffhanger, which gain in tax revenues. ate Budget Committee chairman Do­ Congress has enacted every time the As the sagging economy produces menici is still locked in negotiations debt ceiling came up since late 1985, less tax revenues, and more federal with Senators Lawton Chiles (D-FJa.) when it passed Gramm-Rudman­ obligations for entitlements pay­ and Phil Gramm (R-Tex.) over an in­ Hollings in the process. ments, the deficit will rise well into tended "strengthening" of Gramm­ However, the commentators have the $220 billion range registered dur­ Rudman, to be attached to the debt proved wrong; rather than resolve the ing FY 1986. ceiling bill. debt-ceiling issue within days of its That does not count a $50- 100 bil­ Nothing has yet come to the Sen­ expiration July 17, neither the House lion looming bailout for the Federal ate floor. After the Senate votes, the nor Senate has shown any sign of res­ Savings and Loan Insurance Corpo­ House must undergo the same pro­ olution. The administration's eco­ ration, nor the corresponding bailouts cess, and then the two versions must nomic credibility has finally died, and of the Farm Credit System, the Pen­ be reconciled in conference-all every rodent on Capitol Hill has come sion Benefit Guarantee Board, and within six days. If not, the checks will to gnaw on the corpse. sundry other federal agencies. not be mailed. What Domenici. Chiles. The House and Senate are re­ That could bring the deficit up to and Gramm cannot agree on, is the sponding, however incoherently, to the $300 billion range. specific method of budgetary suicide massive constituency pressure to "do As EIR suggested last week, the which the administration will be asked something" to correct the administra­ Reagan administration's solution to commit. tion's disastrous economic policy, might be to declare a recession, sus­ Last year, the Supreme Court which forced heavy Republican losses pending Gramm-Rudman with two threw out so-called "automatic se­ in the last election. successive quarters of GNP growth of questration" of funds, which provided The usual staged cliffhanger has less than 1 %.

EIR July 31, 1987 Economics 21 Business Briefs

Biological Holocaust "We believe we need to begin enforcing our stutz (formerly of the Cargill grain cartel), existing guidelines," said an unnamed La­ who talked tough about protectionist mea­ Brazil is running bor Department source. "We don't think that sures. [adherence to] the guidelines by employers On July 22, the U.S. Senate approved a out of TB medicine is consistent enough ." protectionist trade bill, which would force the President to retaliate against other coun­ By the end of August, Brazil will have ex­ tries' "unfair practices. " hausted its reserves of tuberculosis medica­ Real Estate tion, as a result of its economic crisis, ac­ cording to a report in the newspaper 0 Glo­ Tax reform bill Industry bo July 23. The country still has 32 million worsens S&L crisis pills or injections, for 120,000 patients. Of­ Europe will slash ficials estimate that 6,000 patients who be­ gan treatment this year will be left without Collapsing u.s. real-estate values because its steel production . medicine. of the Reagan administration's 1986 tax re­ TB causes 5,800 deaths per year in Bra­ form are worsening the disastrous losses of The European Commission on July 21 ap­ zil. Without treatment, 50% of the patients savings and loan institutions , according to proved a $7 billion , three-year plan to cut are expected to die in two years , 25% will analysts at the Federal Home Loan Board Western European steel capacity by 30 mil­ remain in a chronic state of illness, and 25% Bank. lion tons. The program proposes that mem­ will recover on their own. "The tax reform act is having its conse­ ber-countries maintain production quotas on Imports have been blocked since last year quences in the real-estate market. There are the most common steel products, shut down because of exchange controls, and medi­ a lot of foreclosures of commercial proper­ a number of large mills, and cut 80,000jobs . cines have already run out in many locali­ ty , and a lot of developers are walking away The plan will be submitted to the member ties. People are refusing to go to the main from deals after the tax advantages that mo­ governments for consideration in Septem­ TB hospital in Rio de Janeiro, Santa Maria tivated the deals ceased to exist. So the S&Ls ber. Hospital, because conditions are so bad that are taki�g a lot of property back ," said one Several thousand West German steel 11% of patients die. analyst. Losses have increased from 4.2% workers demonstrated the fo llowing day In 1979, Brazil spent $100 million to to 6.2% of S&L mortgage portfolios over against the measure . In the Saarland cities cure 55% of the TB cases which were treat­ the year to May 1987. of Dillingen and Voelklingen, which have ed. Today, it spends $67 million, of which The tax reform bill eliminated the tax an official unemployment rate of 18-19%, $10 million is for medicine , to cure 97% of benefits which had prompted the building several thousand steel workers called on the those who complete the six-month treat­ boom of 1981-87, which led to a 25% ov­ Bonn government to secure jobs for the Saar ment. ersupply of urban office space in the United Steel Corporation , and to resist the Europe­ States. an Community'S quota for closures of steel plants. Health Also 4,000 workers of Maxhuette Steel International Trade in eastern Bavaria took to the streets, de­ OSHA demands worker manding job security through joint emer­ 'Pasta war' looms gency action by the Bavarian state govern­ protection against AIDS ment in Munich and the federal government. between U.S., Europe Maxhuette Steel has filed the equivalent of The U. S. Labor Department's Occupational Chapter II bankruptcy, and there are plans Health and Safety Administration (OSHA) The European Community on July 20 re­ to lay off 3,000 of the 4,500 workers em­ will soon begin penalizing health care em­ jected as "completely unacceptable" a U.S. ployed at the plant. ployers who fail to protect workers from demand for large cuts in pasta export subsi­ exposure to AIDS and other blood-borne dies, raising the prospect of a transatlantic diseases, the Washington Post reported on "pasta war" beginning in August, UPI re­ AIDS July 23. ports . The decision means that the federal gov­ If the United States imposes sanctions Colorado meatpacking ernmentwill begin subjecting hospitals and on European pasta imports on Aug . I, then other medical facilities to legal sanctions , the EC would retaliate with "mirror mea­ firm will test workers such as fines, for failing to enact safeguards sures." The EC position was stated by offi­ protecting workers against transmission of cials after the July 17-18 ministerial meeting The Montford Meatpacking company of AIDS . OSHA, however, has decided not to in Copenhagen, which U.S. Agriculture Colorado, owned by Conagra, Inc., has an­ issue new safety standards for AIDS and Secretary Richard Lyng attended, alongwith nounced that it will test all prospective em­ hepatitis B, but to use existing federal rules. the outgoing Undersecretary Daniel Am- ployees for AIDS . President Ken Montford

22 Economics EIR July 31, 1987 Briefly

• OCCIDENTAL Petroleum, Ar­ said that the company is trying to protect its not have a penny, the money for this would mand Hammer's company, said it employees, who work with knives, from be contributed by foreign governments, as may sell "a substantial minority in­ spreading AIDS-contaminated blood. money "to fight the war on drugs." But the terest" in IBP, the nation's largest If blood from an AIDS-infected worker money would go to a fund run by the Inter­ meat processor, which was fined $2.6 is spilled in an industrial accident, it could national Monetary Fund, which would give million for violations of fe deral safe­ serve as a conduit for spreading AIDS to it to Bolivia only to pay off the banks. ty regulations. Inspectors compared others, said Montford, adding: "My philos­ Bolivia says it would go through a book­ conditions at the company's plants to ophy is that it is a communicable disease, keeping game: The pesos budgeted for anti­ those portrayed in Upton Sinclair's and we have historically tested for commu­ drug activities would be used to buy back The Jung/e. nicable diseases." the foreign debt. Eventually, the war on drugs would supposedly be financed by diverting • AN IMF TEAM which left Tur­ pesos which would have gone to debt ser­ key late in July issued a statement Transport & Communications vice. accusing the Turkish government of The catch is that Bolivia now spends mismanagement. The statement de­ Thailand maps nothing on fighting drugs and has not paid manded cuts in public-sector firmsand foreign creditors since 1985. So, it all boils in the money supply, calls the infla­ trade ties to U.S.S.R. down to foreign contributions for fighting tion rate "most discouraging," and drugs going to pay off the intemational banks expresses "a pessimistic view." The The government of Thailand has approved that set up Bolivia's drug economy in the IMF also attacked a decision to de­ a proposal to open air and sea links with the firstplace , and reap the lion's share of prof­ crease interest rates, aimed at pro­ Soviet Union, and has called upon the com­ its from it . moting internal investments . munications ministry and Thai Air to inves­ tigate possible transport links between Infra structure • BOLIVIA'S CENTRAL BANK Bangkok and Vladivostok. will offer for sale its gold reserves in The opening to Moscow is a direct result Thailand's Kra Canal Europe, in order to finalize the con­ of actions by the U. S. State Department and version of tradeable resources, affiliated"Pro ject Democracy" networks, to project moves ahead Spain's EFE news agency reported antagonize Thailand and break its tradition­ July 22. The head of the central bank al ties to the United States. The Kra Canal Committee of the Thai Par­ will go to Switzerland and West Ger­ The Joint Public-Private Consultative liament is now finalizing plans for delega­ many to conclude the deal . Committee, under Prime Minister Prem, also tions to go to Egypt and West Germany to asked Thai firms and the Chamber of Com­ inspect canals built there , preparatory to • PENTAGON SOURCES re­ merce to come up with ways to expand trade building a canal across the Isthmus of Kra cently returned from Africa describe with the U.S.S.R. All of these initiatives which would make it possible to vastly ex­ the AIDS pandemic there as the larg­ have been taken under the direction of For­ pand shipping in the Pacific and Indian est-scale genocide in history. Ac­ eign Minister Siddhi Savestila, an associate Oceans' basins. cording to these estimates, fully 30% of Henry Kissinger, who announced that he The project has been vigorously pro­ of black Africa's intelligentsia is in­ will be visiting China and North Korea Aug. moted by EIR's Bangkok Bureau, along with fected, and 50% of the officercorps . 18-25, to increase bilateral ties. On an­ the Mitsubishi Research Institute of Japan . nouncing the trip, a foreign ministry spokes­ The proposed canal is getting regional • BURTON BONGARD, the for­ man noted that Thailand officially supports support. A Chinese government spokesman mer president of Ohio's Home State unification of North and South Korea. on a visit to Thailand said that China would Savings Bank, was sentenced to a help with explosive devices which would maximum of 10 years in prison July make construction cheaper. 22, on four charges of fraud stem­ The Debt Bomb When U.S. Defense Secretary Caspar ming from the 1985 collapse of the Weinberger visited to Bangkok June 12, h� Cincinnati-based thrift . Bolivia will divert also indicated his support for the canal . At a press conference, EIR's Bangkok Bureau • A NEW INSURANCE PLAN anti-drug funds to banks Chief SophieTanapura asked him if he would went into effect in Maryland on July support the canal. Weinberger responded , 1, which raised rates for obstetricians Bolivia and the international banks have "We have not had a formal request of that 16-40%, depending on location and worked out a novel "solution" to the coun­ kind at this point, but I think we would tend size of practice. An average obstetri­ try's foreign debt problem: $1 billion of the to be very sympathetic to requests for things cian, who delivers 100 babies a year, debt will be bought up from the banks at 15¢ that we believe could strengthen the country would see his or her rates increase on the dollar. economically or from the point of view of from $39,000 to $52.000. But since the Bolivian governmentdoes security."

EIR July 31, 1987 Economics 23 �TIillScience &: Technology

Miningheli um-3 on the Moon for unlimited energy

There is enoughJu el on the Moon's sUiface to power theJusion reactors that can advance the Earth 's economy and begin industrializing sp ace. MarshaFree man reports.

For years, space scientists have dreamed of one day using based on the work of the Wisconsin team, that goal can be fusion power to build cities in space, a task that would be met much earlier than Ehricke had envisioned. impossible with less efficient chemical fuels or inefficient Industrial materials processing on the Moon will be sig­ solar energy, or even with more efficient nuclear fission tech­ nificantly different than conventional Earth technologies, nology. At the same time, fu sion researchers hoped that in which require vast amounts of water, chemicals, and other the near future, the most advanced fusion fuels would open volatiles that do not exist in the lunar environment. Fusion the age of unlimited plasma energy. Now, both of these has great advantages, even over nuclear fission, for materials dreams could become a reality just after the tum of the cen­ processing and other industries: It requires a small amount of tury, by implementing a new proposal to mine helium-3 from fuel, most of the fuel is already on the Moon, it produces no the Moon. Helium-3 will be a crucial fuel for fusion reactors waste that requires recycling, it requires virtually no radiation on Earth and in space. protection, and it can make use of direct conversion technol­ "There is enough fuel on the Moon to meet the present ogies such as magnetohydrodynamics (MHD)-getting rid energy needs of the entire Earth for close to 2,000 years," of the steam turbine. In fact, direct plasma processing, using Dr. Gerald Kulcinski told a lunar science conference in Sep­ the high-temperature charged-particle product of the fusion tember 1986. This lunar fuel is an Earth-rare isotope of heli­ reaction itself, has the potential to increase productivity by urn, which is abundant in much of our Solar System and on orders of magnitude over today' s chemical or even electrical the Moon. Kulcinski and the research group at the Fusion processing technologies. Technology Institute at the University of Wisconsin are now Previously, the only obstacle Ehricke and others saw to a working out the details of a plan to begin lunar mining of lunar fusion economy, was that the deuterium (D) and tritium helium-3, not only for use in setting up lunar industries and (T) isotopes of hydrogen, which scientists planned to use as powering Earth reactors, but also for advanced fusion pro­ fuel, had to be transported from Earth, creating a serious pulsion systems to open the rest of the Solar System to man's economic penalty. exploration. Fusion scientists knew that eventually they would be able Using fusion energy on the Moon was the centerpiece of to use advanced fuel cycles, such as the fusion of helium-3 the lunar industrialization plan worked out by space scientist and deuterium, and that this was desirable because it would Krafft Ehricke. In an article on industrializing the Moon in greatly reduce radiation problems from tritium and highly 1982, Ehricke noted that Selenopolis, his name for a lunar energetic neutrons. In addition, with advanced fuel cycles, city, "cannot be built with yesterday's technology." Fusion energy conversion efficienciescould be doubled or tripled. energy will be as fundamental on the Moon as the Sun's However, in the past, fusion scientists were not aware of any energy is for the Earth's biosphere, Ehricke said, for "con­ ready source of helium-3 that would make commercial de­ ditions for fusion plants are more favorable in the high vac­ velopment of this advanced fuel realistic. As Kulcinski put uum on the lunar surface than on Earth." Ehricke set the goal it, "The lack of a long-range supply of helium-3 has limited of using "clean" deuterium-helium-3 fuel to do the job. Now, serious consideration of this fuel cycle for the past 20 years."

24 Science & Technology EIR July 31, 1987 Even the most recent work on advanced fusion fuel cy­ cles, such as the soon-to-be-published book, Introduction to TABLE 1 Fusion Energy, has assumed that "obtaining the required Comparison of fusion fuel cycles helium-3 poses a serious problem, since it is not available in the quantity needed for a fusion economy based on the deu­ % energy released Fuel Reaction products terium-helium-3 reaction." Endeavoring to find a way to as charged particles open up the possibility of this superior advanced fusion fuel D-T Neutrons + helium-4 20 cycle, fusion scientsts proposedthat power plants producing D-D Neutrons + helium-3 66 fusion with the more elementary D-T or D-D reactions would Protons + helium-4 create tritium as a by-product, and that they would then D-H3 Protons + helium-4 93-100 collect the helium-3 that is produced as tritium decays. The deuterium-helium-3 fusion "satellite" plants could then pro­ The deuterium-helium-3 fu sion fu el is the most effi cient, duce the "clean" fusion. releasing nearly all of the energy produced as charged particles Accumulating helium-3 by waiting for tritium to decay is and permitting the direct conversion of the fu sion energy to a very slow route to the 21st century. The Wisconsin team's electricity. plan for mining helium-3 on the Moon will get us there much faster. According to the Wisconsin group, an aggressive space program that takes America back to the Moon just after the terns of 34%, at best, to potentially 100%, with no wasted turn of the century, and an aggressive fusion research effort energy. The high-temperature plasma, which is the product that demonstrates a deuterium-helium-3 reactor by about the from any individual plant, could be used both to produce same time, could open an era of unlimited energy on Earth electricity and to directly process materials. and in space for millennia to come. Various direct conversion designs and technologies are currently being considered for match-up with deuterium-he­ The helium advantage lium-3 fusion power plants, and for different reactor geom­ One basic requirement for all of human economic activity etries. One would involve the use of the synchrotron radiation is energy, and electricity is the universal form of energy produced in the fusion process. Energy in the form of micro­ available today. For 100 years, mankind has produced almost waves, for example, could be diverted and extracted from all of its electricty by burning coal, oil, gas, or uranium to the reactor for direct use in materials processing and the produce heat, which is used to boil water and run steam transport of energy to remote parts of the Moon, or for con­ turbines. One of the major advantages of using deuterium­ version to electrical power. Designs are also under consid­ helium-3 reactions to produce fusion energy is that most of eration for diverting a portion of the charged particles from the output is not heat, but charged particles, which can be the fusion reaction for either magnetohydrodynamic (MHD) converted directly to electricity in a variety of ways. conversion systems which have already been demonstrated, Compare this with other fu sion reactions. If fusion energy using low-temperature fossil fuel plasmas. is produced with deuterium and tritium, about 80% of the In studies carried out at the Lawrence Livermore National output will be in the form of high-energy neutrons. The only Laboratory, in situ fusion-MHD conversion designs are also efficient way to extract energy from these uncharged particles being investigated, where the magnetic field already used to is to slow them down through collisions with a material or contain the fusion reaction would do double duty, and be blanket that lines the reactor wall. When they slam into the used for the MHD conversion as well. The charged particles liner material, heat is produced. This means that a reaction and electromagnetic radiation produced by the fusion reac­ taking place at millions of degrees will have to have its energy tion could be used to ionize a separate working fluid, right degraded to less than 2,0000 in order to match the limit of inside the wall of the reactor. today's steam turbine technology. Electrostatic conversion involves diverting the protons A fu sion fuel cycle using D-D reactions improves the released by the fusion reaction and organizing them into quality of the fu sion energy, because about two-thirds of the beams. The positively charged proton beams from the deu­ total energy released is in the form of charged particles, with terium-helium-3 reaction are then matched to electrodes with the rest in neutrons. But with deuterium-helium-3, the neu­ similar voltages, where the protons are collected, producing trons are virtually eliminated (Table 1). high-voltage direct current. The opportunityto use charged particlesto directly con­ A second major advantage of the deuterium-helium-3 vert the fu sion output to electricity is a prerequisite for space fuel cycle is the simplification of the design of the fusion propulsion systems (which certainly will not carryalong steam reactor itself, because radioactive tritium fuel will be elimi­ turbines), and for power plants on the Moon, where there is nated and the high-energy neutrons will be much reduced. no water available to turnturbine s. The efficiencyof conver­ Although there is the possibility that side-reactions of D-D sion will be increased from today's utility steam turbine sys- could take place, producing unwanted neutrons, the helium-

ElK July 31, 1987 Science & Technology 25 In a concept developed at the University oj Wisconsin , a remotely operated mobile unit scoops up lunar soil, extracts the helium and stores it, and then ej ects the mined soil. Illustration by John Andrews .

3 to deuterium ratio can be increased in the fuel mixture, to however, that in the past 15 years, fusion scientists have perhaps nine parts helium to one part deuterium, in order to increased the plasma operating temperature by a factor of 40, lessen the D-D reactions. It is also possible that spin-polar­ so another factor of 5 "should not take an unreasonably long izing the fuel will suppress side D-D reactions. time." Tritium is not an abundant, naturally occurring isotope In order to contain the plasma fuel at this higher temper­ of hydrogen on Earth, because of its short half-life of 12.3 ature, the external magnetic fields must also be increased. years. Therefore , for D-T fusion, the tritium will have to be Instead of the 10-12 tesla magnetic fields that are now con­ bred from lithium in a blanket surrounding the reactor cavity. ceived as necessary for D-T tokamaks, Kulcinski notes that The deuterium-helium-3 reaction eliminates the need for this 16-tesla magnet systems will be needed. (A tesla is 2,000 breeding blanket, because it eliminates the need for tritium. gauss, with 0.5 gauss equal to the magnetic field of the Because there is no radioactive fuel or by-product from Earth.) Again, in terms of getting from here to there, this is deuterium-helium-3, special precautions for handling the fuel only a 30% increase from magnetic fields already achieved and waste are unnecessary . With lower neutron flux and in the Mirror Fusion Test Facility-B at the Lawrence Liver­ radiation effects, internal reactor components should last more National Laboratory, and the Japanese plan to build a longer, with increased plant lifetime. l6-tesla fusion magnet test facility, according to Kulcinski. The paucity of natural helium-3 on Earth is not the only It is also possible that polarizing the fusion fuel (aligning reason, however, that the emphasis in the fusion program has the spin of the fuel particles) could increase the reactivity of centered on using deuterium and tritium; the D-T fu sion the plasma, thereby lessening some of these constraints, in reaction is the easiest to obtain in terms of the temperatures addition to suppressing the unwanted D-D reactions. Increas­ required, the strength of the magnets, and so on. For exam­ ing the plasma reactivity by 50% could reduce the overall ple, producing fusion energy with deuterium-helium-3 re­ reactor size by two-thirds. The Fusion Technology Institute quires plasma fuel temperatures three to five times higher is investigating the potential advantages of spin polarization than those already achieved in current fusion tokamak exper­ this year. iments (about 100 million degrees). Kulcinski has noted, What kind of fusion reactor design will be best fitted for

26 Science & Technology EIR July 31, 1987 using deuterium-helium-3? There are advantages to the lin­ required for a demonstration reactor. In addition, there is a ear,or open fusion reactor designs, such as the tandem mir­ small amount of helium-3 that can be extracted as a by­ ror, whose open ends would allow the easy extraction of product of natural gas production. plasma particles for direct conversion. Initial experiments Researchers have estimated that this could provide, cu­ using electrostatic direct conversion on the Tandem Mirror mulatively, more than 200kg by the tum of the century. The Experiment at Lawrence Livermore National Laboratory have tritium decay from Canadian CANDU fission reactors, and demonstrated a 95% efficiency. This design would also be other small supplies, could bring the total to between 500- best suited for fusion propulsion, as an open end is needed to 600 kg (Table 2). This supply could power a small (l00-200 expel the particles out the back end of the rocket. MW) electric demonstration plant, for several decades, at a The donut-shaped tokamak design, which is driven by current cost of $700 per gram of helium-3. higher plasma currents, would lend itself to synchrotron ra­ diation conversion. The microwaves would be produced in Phase 2: helium from the Moon the cavity of the reactor, which would have highly polished Because the Moon has no atmosphere, the helium-3 bom­ walls to reflectth em. The microwaves could then be diverted barding it from the solar wind has collected there over billions to a nearby facility, where they could be converted to elec­ of years. Samples of lunar soil returned by the Apollo astro­ tricityor used in chemical processing or even food irradia­ nauts and analyses from the Soviet unmanned Luna probes tion. indicate that the lunar soil contains an estimated I million The modifications required for existing D-T experiments tons of helium-3. or devices that are on the drawing board in order for them to The Wisconsin group states, "The characteristic of the test the advanced deuterium-helium-3 fuel would be a "very lunar soil (regolith) that makes it an effective collector is its small perturbation" in the program according to Kulcinski­ extremely fine grain size," which is due to the pulverization in other words, barely noticeable. The team is now investi­ of the soil to a depth of between 5 and 15 meters, caused by gating how and when this unexplored fusion fuel cycle can the impact of meteorites. be tested. They are confident that when the next-step fusion It has also been determined that the lunar mare or dark Engineering Power Reactor machine is operating, perhaps plains, have a higher helium content than the soil in the by the year 2000, it will be possible to have deuterium­ highlands, because the solar wind particles appear to be con­ helium-3 fusion fuel ignited and burning in a demonstration centrated in ilmenite granules, which comprise up to 10% of reactor. the mare soils. If fusion scientists are now optimistic that there are no How much of the helium-3 on the Moon can be econom­ insurmountable physics problems to going directly to ad­ ically exploited is still under study, but the technologies for vanced fu sion fuels as soon as the engineering technology is extracting the helium are already under development in a ready, the only question is, where will they get the helium- variety of studies on lunar mining. Studies are ongoing, for 3? example, to develop methods for the extraction of plentiful oxygen from the lunar soil, which will be crucial for the lunar Phase 1: helium-3 on Earth base. Between now and the year 2000, when the manned space The Wisconsin team has designed a way that the recovery station will have small vehicles parked outside that can go of helium from the lunar surface soils will involve a simple back and forth to the Moon, where will the helium-3 come process. In the latest concept developed at Wisconsin for from forthe fusion reactor? The solar wind, which constantly spews high-energy particles and radiation from the Sun throughout the Solar System, has been found by spacecraft probes to contain about 20 parts per million particles of he­ TABLE 2 lium-3. However, these particles do not survive the Earth's Potential terrestrial sources of helium-3 atmosphere and are , therefore , not found deposited on the Source Cumulative to the year (kg) Earth's surface. Some helium-3 exists in the nuclear weapons 2000 program. Helium-3 is a natural decay product of radioactive U.S. weapons 300 tritium, which is used today principally for the production of CANDU fission reactors 10 thermonuclear weapons. Although the inventory of tritium Storage at natural gas wells 29 from weapons production is classified, it has been estimated Known reserves at gas wells 187 that there are currently about 300 kilograms (kg) of tritium Department of Energy 13 research supply in U.S. weapons. As 5.6% of this tritium decays each year, Total 500-600 there should be about 15 kg of helium-3 produced per year in this manner. If this helium-3 were collected, it could reason­

ably provide between 200-300 kg of helium-3 for fusion Before the turn of the century, a total of 500-600 kg of helium-3 experimentsby the year 2000, when such amounts would be could be made available fr om Earth-based sources.

EIR July 31, 1987 Science & Technology 27 mining the lunar helium, a remotely operated mobile unit surface, could provide all of the Earth's energy, at a little will collect and process the soil. more thantoday 's levels of consumption, for about100 years. The rover will pick up the top 30 centimeters of lunar At present, the world's population consumes approxi­ soil. The raw material will be scooped up at the front of the mately 10 terawats (l terawatt equals 1,000bill ion watts) of unit and will be heated by the Sun to 6000 Celsius. At that total energy per year. On an average, this is about 2 kilowatts temperature the helium is vaporized and extracted. The ex­ per capita for 5 billion people. Kulcinski's group assumes tracted helium-3 will be stored in a tank on the mobile unit, that the world's population will grow to about 8 billion early and the processed soil will be dropped back on the surface in the next century, and that there will be at least a modest about a meter from where it was scooped up. increase, to an average of 3 kilowatts per capita, during that If the processing is done during the two-week lunar day, time. Therefore, minimally, 24 terawatts per year will be the ambient temperature on the lunar surface will be nearly needed. 1300, and the remainder of the heat can be supplied by solar If the entire surface of the Moon were mined, and all the collectors, which are pointed toward the Sun. helium-3 recovered were used in Earth-based fusion power It has been estimated that to produce 1 kg of helium-3, plants, the helium fuel could produce enough energy to meet about 100,000tons of pristine soil will have to be processed. current world demand for 1 ,900years. It will not be practical, Once the helium is liberated, the helium-3 must be sepa­ however, to mine the entire surface of the Moon, because rated from the more abundant helium-4. Cryogenic distilla­ other scientific and industrial activities will be ongoing on tion is a technology that has been demonstrated to produce the lunar surface. It also will not be necessary to mine the 99.99% pure helium-3. When the helium is cooled to only entire Moon, because there are much larger reserves of heli­ 2.10 above absolute zero (2.10 Kelvin), the two isotopes of um-3 just a little farther away on other planets. helium can be separated using fine filters. If these distillers The lunar helium reserves will also be needed to fuel the are operated during the alternatetwo-week lunar night, when space propulsion systems that NASA must develop over the the ambient temperature on the surface is already down to next 20 years. John Santarius, one of the scientists at the 1200 K, less energy will be needed for cooling. University of Wisconsin, has estimated that a deuterium­ If the volume of the cargo bay of one Space Shuttle orbiter helium-3 fu sion-propelledrocket could obtain a specificim­ were filledwith helium-3 mined on the Moon andthe helium pulse up to 1 million seconds. This value, which measures were transported back to Earth, it could produce as much the efficiency of the fuel in the propulsion system, can be electricity in fusion power plants as the United States con­ compared to the 8oo-second value for today' s Space Shuttle­ sumed throughout 1985! This would require mining an area type chemical rocket systems. on the lunar surface that is approximately equivalent to the This fantastic rocket capability would have a tremendous size of Washington, D.C. impact on possibilities to explorethe Solar System. Although How much energy would be producedon Earth by using the rocket would have a low overall thrust (rate of accelera­ the helium on the Moon is, of course, a function of the rate tion), the constant acceleration rate would produce impres­ of growth of energy consumption and the percentage of the sive velocities over time, and open up regions that are today lunar surface that is mined. Mining 1 % of the entire lunar beyond our reach, such as the outer planets, for human ex-

FIGURE 1 Schematic of a fusion-propelled rocket

This early design for a fu sion propelled rocket uses the magnetic mirror configuration. The Wisconsin group estimates that a deuterium-helium-3 propelled rocket would reach a specific impulse of 1 million seconds. compared to the present BOO seconds achieved by chemical rocket systems like those by the Shuttle.

Source: John J. Reinmann, "Fusion Rocket Concepts," Technical Pa­ per, Sixth Symposium on Advanced Propulsion Concepts, Air Force Officeof Scientific Research, Niagara Falls. N.Y., May 4-6, 1971 (Wash­ Ington, D.C., NASA Technical Memorandum TM X-67826).

28 Science & Technology EIR July 31, 1987 tastic reserve of fuel is what awaits us on the other side of the

TABLE 3 one-century lunar helium bridge (Table 3). Potential extraterrestrial sources of helium-3 Today's spacecraft use ballistic trajectories to traverse the multibillion-mile distances to the great planets. Even with Source Potential supply (kg) the help of gravity assists from fly-bys near other planets, the

Moon 1.1 x 10· Sun, or the Moon, these are arduously long trips, whether Jupiter 7x1022 the spacecraftis manned or unmanned. The fusion propulsion Saturn 7 x 1022 that will be commonly available by the time we are looking Uranus and Neptune 1020 toward Jupiter and Saturn for our helium-3, will make these round trips no more arduous than today's supertanker jour­ neys from the Middle East or Alaska. The Moon can supply us with enough helium-3 to power the There is also helium below the frozen surfaces of Neptune Earth fo r J.900 years. but even more fa ntastic reserves of and Uranus, and possible resources of helium-3 on Mars, helium-3 can be fo und on Jupiter. Saturn. and beyond. Mercury, the asteroids, or the moons of various planets, which still remain to be investigated. ploration. Manned spacecraft today do not accelerate once It is inconceivable that if deuterium-helium-3 fu sion were they are in space but maintain ballistic trajectories, basically demonstrated to be feasible on Earth near the year 2000 and coasting, due to the weight penalty involved in carrying ad­ became widely commercially deployed in space and on Earth ditional fuel needed for constant acceleration; during the next century, that a system for extracting and A fusion-propelled rocket could directly expel the prod­ delivering helium-3 from the outer planets would not be ucts from the fusion reaction, rather than using the reactor to available soon after that. Fusion will provide the quality and produce electricity or simple heat. "Cold" hydrogen gas or abundance of energy to allow mankind to explore and colo­ other particles could be added to the exhaust flow to increase nize space. Space science and technology will be key to the mass and thrust. This would create the ability to "tune" making available the extraterrestrial resources that will bring the rocket, by changing the thrust ratio and specificimpu lse the age of fusion power to the Earth and to its offspring according to which parameters were desired during any par­ centers of human civilization on other planets. ticular mission. The helium on the Moon will not be an unlimited energy supply in itself, but it could function as a one-century bridge to the recoveryof virtually limitless helium-3 from the outer planets. It will open the next millennia, providing humanity with the first biologically benign, non-polluting, efficient, and economical energy in human history. The abundance of this quality of energy will actually create the possibility. and is itself prerequisite. for the colonization of space, and the necessary revolution of all economic activity on the Earth . Weekly EIR The Moon can open the fusion era. Audio Reports Phase 3: Jupiter and Saturn During the second half of the 20th century, mankind opened the space frontier by stepping on the Moon and send­ Cassettes ing his robots to planets farther away. In the next century, mankind must set up permanent scientific laboratories in • News Analysis Reports Earth orbit, an industrial and scientific base on the Moon, • Exclusive Interviews and colonize Mars. $250/Year Robotic spacecraftnot only will further explore the outer planets, but also can become fuel tankers, bringing to the Last chance at this price! space colonists and the Earth the helium-3 needed for contin­ Effective Aug. 7, $SOO/yeor ued growth and exploration. While the Moon has been capturing helium from the solar Make checks payable to: wind in the grains of its surface over eons, the giant gaseous EIR News Service, P. o. Box 17390 planets are actually composed mainly of hydrogen and heli­ Wa shington, D.C 2004 1 -0390 Attn: Press um. There are estimates that as much as 25% of the weight MasterCard and Visa Accepted. of Jupiter and Saturnis helium, which would make more than 1023 kg of helium-3 available in their atmospheres. This fan-

EIR July 31, 1987 Science & Technology 29 TImFeature

Has the Us.gi ven in to Moscow in the

war on drugs? by Robyn Quijano

Soviet-directed narco-terrorism has penetrated every nation of Ibero-America. This flank of the Russian Empire's subversion of the West demonstrates exactly how Soviet irregular warfare operates, and why the United States has been losing the irregular war to Moscow for the last 20 years. U.S. intepigence evaluations which deny the existence of narco-terrorism, deny the ongoing irregular war the Soviets are winning in the hemisphere. The "secret government" of the United States, in the person of such individuals as Undersecretary of State for Inter-American Affairs Elliott Abrams, has developed policies designed to open the door to Soviet subversion of the nations of the hemisphere. Now the Iran-Contra scandal has brought to light the dirtydealings of the secret governmentwi th the drug mafia,and its extensive arms-for-drugs deals. The result of these deals has been the poisoning of American youth, for the allegedly "patriot­ ic" aim of supplying illegal arms to the Nicaraguan Contras. The filthy story of the Contra-cocaine connection, exposed by this news service over a year ago, has yet to get top billing in the Irangate media extravaganza. The U. S. surrender to Moscow in the war on drugs, is an integral part of the administration's Contra policy. For the sake of supplying arms to a mercenary army of drug runners, the United States is handing a continent, whose nations are the natural allies of the United States, to the Soviets. The logistical infrastructure of terrorism and guerrilla warfare in Central and South America is the drug traffic. All the principal drug-traffickersengaged in the production and export of drugs from that region are Soviet-Bulgarian-Cuban as­ sets, including the Medellfn mafia and their financial wizard, fugitive Robert Vesco, who resides in Cuba under Fidel Castro's protection. It is the Medellfn mafia that contributed $10 million to the Contra war chest. Cartel chief Pablo Escobar, who has been profiled as an "anti-communist" drug-runner, operates out of Cuba, and often flies into Nicaragua aboard a Cuban Air Force plane. The word around Washington, is that there are "anti-communist" drug-traf­ fickers, who are a lesser evil with which to ally in fighting communism. This

30 Feature EIR July 31, 1987 Colombia 's Palace of Justice inflames, in November 1985,following the seizure of the ministry by commandos of the M-19 norco-terrorist gang . In the ensuing battle to oust the terrorists. nearly 100 people died, including 12 Supreme Court judges .

intelligence evaluation is so blind as to constitute outright mation comes from defector Jan Sejna, who was secretary of treason, designed to cover the U.S. surrender to Moscow in the Czechoslovak Defense Council at the time . In 1967, the the war on narco-terrorism. The reality is, that there is no Warsaw Pact secret police met in Moscow to design a 10- to such thing as an anti-communist drug-trafficker. IS-year "long-range plan" for a narcotics war against the West. The theme was "how to exploit and hasten the inherent Soviet irregular warfare corruption of Western Society." The drug trade has been part of Soviet irregular warfare But "the inherent" corruption of Western society was against Western civilization since the Korean War. Cuba's actually introduced by the section of Western intelligence role in gaining control over the narcotics industry in Ibero­ forces and the U. S. Eastern Establishment that created the America goes back to 1960, when Raul Castro visited Czech­ rock-drug counterculture , as part of the design for an "Age oslovakia, and agreed to the reorganization of the Cuban of Aquarius" to usher in the post-industrial society. This intelligence service, the DGI, to run narcotics into the United oligarchic Western faction also runs Westerneconomic pol­ States. icy. The coincidence between the International Monetary EIR published details of the Soviet connection in the book Fund's policy of imposing genocidal levels of austerity on NarcotraficoSA , in January 1985. There we documented the the Third World, and the marginalization and desperation of growing phenomenon of narco-terrorism, the Bulgarian con­ the population which makes recruitment into the Soviets' nection, and the use of gnosticism and satanic cults as the narco-terrorist army so efficient, is widely recognized. ideological base for this Nazi-communist alliance. Since then, more details have come to light, largely Reagan's Contra policy through the records of defectors who participated in Warsaw The Reagan administration's Contra policy is a perfect Pact planning of the destruction of the West through the drug example of a policy designed to destroy the natural allies of trade. the United States. The administration has categorically re­ According to America the Vulnerable, by Joseph Doug­ fused to support the Contadora nations (Mexico, Panama, lass, Jr. and Neil C. Livingston, Nikita Khrushchov sum­ Venezuela, and Colombia) and their policy of bringing peace moned the Warsaw Pact leadership to run the drug business to the region through economic development. The United for intelligence operations against the West in 1962. "It would States has likewise rejected: I) technical and financial sup­ destroy the U.S. education system and would cause a decline port for the national military forces in the region; 2) a total in the influence of religion. In certain cases it would be used commitment to wiping out drug traffic in the region with to create chaos," write Douglass and Livingston. The in for- high-tech mi litary aid to the sovereign nations of the region;

EIR July 31, 1987 Feature 31 3) infrastructural development and debt reliefto create viable such as Bill Colby, who helped so much to make such a economies. bloody mess of the Vietnam situation in the first place." Elliott Abrams, champion of the drug-running Contras, has officially rejected the policies that would stabilize the The 'narcontras' region. State Department policy since the Carter years con­ The United States has allied itself with known drug run­ tinues to be an assault on the Central and South American ners, involving itself in the guns-for-drugs trade, dealing military. For Adm. John Poindexter and Elliott Abrams, with "friendly" terrorists, and even buying arms for the Con­ military institutions, not narco-terrorism, threaten democra­ tras directly from the East bloc .. cy in the region. Abrams openly rejected a policy of devel­ The Nicaraguan Contras received $10 million from the opment for Nicaragua's neighbors, as an inefficient and far Medellin Cartel, a convicted ct)caine trafficker testified in too long-term tactic. In testimony to the Senate Foreign Re­ early July, in closed-door sessions before the U.S. Senate's lations Committee in February 1987, he attacked the idea of narcotics and terrorism subcommittee. Couriers for the $10 strengthening the military forces of the region, to enable them million were allegedly provided by Felix Rodriguez (a.k.a. to fightsubver sion: "Would we double the size of the military Max Gomez), a longtime operative of former CIA Director aid to say, Honduras and El Salvador? What is the impact on of Operations Theodore Shackley. Rodriguez is known to democracy in those countries of building and building and have been in contact with Shackley operative Donald Gregg­ building the military machines?" Vice President George Bush's main security adviser. Lyndon LaRouche, in a presidential campaign statement Convict Ramon Milian-Rodriguez told the senators that issued on July 18, underlined the insanity of Abrams's view: the purpose of the Medellfn Cartel's payoff to the Contras ". . . we must contain the Sandinista threat, chiefly by na­ was to bribe the CIA, and through it, the Drug Enforcement tion-building in nearby nations, but also by strengthening the Administration, to go easy on drug-runners. He said he acted military capabilities of those nations. If 'special forces' were on behalf of the cartel, which controls roughly 75% of co­ needed at some point, there is probably more developed talent caine entering the United States, and is run by the Ochoa for creating such forces in Hispanic America today than we family and Pablo Escobar. have inside the United States. In general, we must pose the Convicted drug-traffickerGeorge Morales told the Senate improvements in conditions oflife among Nicaragua's neigh­ Foreign Relations subcommittee chaired by Sen. John Kerry bors to the minds of the people of Nicaragua. (D-Mass.) on July IS that he had run guns and drugs for the "To this, we must add one particular lesson from Viet­ Contras' southern-front forces, which formerly operated un­ nam: Any person, U.S. or otherwise , caught trafficking in der Eden Pastora in Costa Rica. In return for guns supplied · drugs, must have reason to believe he is already as good as a from Florida, Morales's air freight service flew back mari­ dead man. juana and cocaine from Costa Rica and Colombia. "By destroying, again, and again, and again every drug Morales thought he was working for the CIA, which crop, every drug-processing laboratory, every attempted promised him assistance in quashing a previous drug-running shipment of chemicals to the drug-processors, every plane indictment. His operation overlapped that of CIA contract carrying drugs, every drug convoy, with terrible force, and employee John Hull in Costa Rica. While running drugs searching and sealing every transit-point for total inspection for the Contras, Morales also had a deal with Cuba, where where drugs pass, we must shut down the supply of drugs government officials assisted in drug money-laundering ac­ into the United States and Europe. Dry out the drug-traffick­ tivities. ing in that drastic way, and the logistical infrastructure of the As the Iran-Contra affair unravels, there is more and more Soviets' terrorist and guerrilla assets collapses in the largest evidence that the exchange of drugs for weapons was the part." official policy of the secret government. The "patriotic" forces It is precisely the LaRouche approach to the war on drugs, supplying the Contras, not only made deals with drug run­ the key to stopping Soviet subversion of the region, that the ners, but with the Soviets as well, as was revealed when Reagan administration has rejected. LaRouche wrote, "The Panama's Gen. Manuel Noriega captured the Pia Vesta , a only available solution to the Nicaragua problem is the so­ Danish ship, illegally carrying East bloc weapons for deliv­ called Contadora group, which the Reagan administration ery to the Contras. has tried to destroy, and a network of senior military officers As we document below, the narco-terrorists, from the old in the region, many of whom the Reagan administration is Nazi networks and the "anti-communist" Medellin Cartel, to also trying to topple from positions of influence. Running a the Shining Path terrorists, are under the control of the So­ bunch of drug-trafficking 'Rambos' on the borders of Nica­ viets. In the following dossier, we demonstrate the coinci­ ragua, is the best way one could think of to strengthen the dence in method and goals between what has recently been support for the Sandinista dictatorship among the people of exposed as the "secret government," under the self-styled that country; it is an idiot's attempt to replay every piece of label of "Project Democracy," and the Soviet deployment to U.S. stupidity from the war in Indochina-partly by people "bury" the West."

32 Feature EIR July 31, 1987 agents, in the firstimp lementation of Panama's new banking Panama Law 23. Representatives of the National Association of Banks in Panama cried: "This will end the Panamanian banking sys­ tem, because people will no longer believe in banking secre­ cy." Panama's authorities replied, "Anyone who has nothing to do with drug-traffickinghas nothing to fear." The opposition press attacked "Operation Pisces," as a move that "will devastate the Panamanian banking center." Narco-terrorists' Extra railed, "The U.S. Attorney has more power to inves­ tigate bank accounts in Panama than he has to investigate target: the Canal bank accounts in his own country." Its sister paper, La Pren­ sa , accused the Panamanian Defense Forces (PDF) and gov­ by Gretchen Small ernment of "serving U.S. interests" by cooperating in anti­ narcotics operations. On June 8, those same forces led the uprising against the In February , the annual maneuvers of U . S. and Panamanian Defense Forces and government. Until ordered to open by military forces, named "Operation LibertyTorch 87," were the government, the banks joined the general strike, and shut conducted on the tactical assumption that the primary threat their doors. The case is airtight: The leaders of the opposition to the. Panama Canal arose from a narco-terrorist uprising, movement in Panama are drug-traffickers, drug money-laun­ covering an attempt to occupy the Panama Canal. The sce­ derers, or advocates of narcotics legalization. nario of armed rebels backed by the drug-traffickers was • The riots were called to support allegations by retired chosen because, "It is our view that all guerrilla groups have Col. Roberto Diaz Herrera against PDF Commander, Gen. partialor total financing from the drug-traffic," Panamanian Manuel Noriega. Dfaz Herrera has long been identifiedas a army spokesman Maj . Edgardo Lopez explained. Cuban agent and a drug-runner. He ran the "Panama connec­ Yet, in June 1987, the U.S. State Department threw its tion" for the Reynaldo Rodrfguez LOpez gang in Peru, one of support behind an attempted uprising in Panama, led by a the largest cocaine pipelines in South America. In the same group of Soviet-linked narco-terrorists! Although the June interviews where he accused Noriega, Dfaz Herrera hailed uprising failed, State Department officials now insist that Fidel Castro as "an extraordinary friend of mine," and said Panama's governmentnegotiate a "peacefultransfer of pow­ he was acting on instructions of his guru, Satry Shri Sai Baba. er" to the narco-terrorist-led opposition. • Dfaz Herrera hoped to be the "Juan Ponce Enrile," for Thus, U. S. support for a Soviet -triggered crisis in Pana­ an opposition regime-the new defense minister in a govern­ ma has created the worst threat to the Panama Canal since ment headed by Panama's would-be Aquino, Arnulfo Arias. Nazi activist Arnulfo Arias became President in 1940, and "What I am saying is that Arnulfo Arias is the President of attempted to aid Axis sabotage of the Canal. Panama," Dfaz Herrera stated. On July 4, Arias announced The Soviet Union has already gained a foothold in the that the opposition still aims for power. "We don't want to South Atlantic, through concessions granted by the Alfonsfn shed blood, but if the military clique insists we will defend government in Argentina, from where they can strike at the ourselves ....Anything is allowed to topple this regime." Straits of Magellan-the only route around the hemisphere Anything? Arias was first overthrown as President in should anything happen to the Canal. 1941 with U.S. help, as an Axis agent who threatened hem­ Accidental? "You must also remember that the precision ispheric safety. U. S. intelligence reports on Arias's ties to of current weapons allows a single missile to destroy the narcotics traffickingand gambling rackets in Panama are still Panama Canal," Victor Volski, director of the Soviets' Latin available at the U.S. National Archives. American Institute, told the Argentine newspaper La Razon • Cesar Tribaldos was the spokesman during the strike on Nov. 21, 1986. for the Chambers of Commerce, which played the inside role The timing ofthe June uprising itself reveals the narcotics in creating the "Movement for Democratic and Free Elec­ mob's hands behind the insurgency. tions" in collaboration with the U.S. embassy's number-two On May 6, 1987, U. S. officialsannounced the conclusion man, John Maistos. "Civil resistance means not to obey, not of "Operation Pisces," which they called "the largest and to work, not to go to school, not to pay taxes," Tribaldos most successful undercover investigation in federal drug law­ urged. Newspapers identified Tribaldos as the ex-president enforcement history": 118 top narcotics runners were arrest­ of the Chambers of Commerce, but couriers for the Colom­ ed, while simultaneously, the Panamanian governmentfroze bian dope mob knew him in a different capacity. When Pan­ 54 accounts in 18 banks of the offshore center in Panama. ama's government shut down First Interamericas Bank in The accounts were then opened for examination by U . S. drug 1985, because it was owned by Colombian cocaine king

EIR July 31, 1987 Feature 33 Gilberto Rodriguez Orejuela, Orejuela's people identified Tribaldos as the man who laundered $40 million through the Banco Continental del Panama for them. • Banco Continental is headed by Roberto Motta, one of nine conspirators accused of "promoting public disorders of grave consequence for the nation" by Panama's Legisla­ tive Assembly. • Tribaldos was the alternate board member at Banco Continental for Roberto Eisenmann, the owner of the op­ position newspaper, La Prensa, so opposed to Panama's Symbiosis of drugs cooperation against drugs. Eisenmann has been a contact man for pro-opposition activities funded by the U.S. Nation­ and terror in Peru al Endowment for Democracy. Eisenmann had also been a top contact in Panama of the Fernandez marijuana syndi­ by Sara Madueno cate, until the chiefs ofthat Colombian-connected gang were indicted in Florida in December 1984, in the "Sunshine State Bank case." The Fernandez syndicate had bought shares in Peru is unfortunately one of the countries where Moscow's Eisenmann's Miami bank, Dadeland Bank, and used it for fairy-tale that there is no such thing as narco-terrorism has money-laundering. One of Dadeland's employees was Ei­ had the widest echo-so much so that the recent narco­ senmann's friend, Ivan Robles. Ivan was granted immunity terrorist atrocities in May and June in the jungle city of from prosecution, in a deal arranged by the ring's money­ Uchiza and a dozen nearby villages in the Departments of manager, Steven Samos (later identified as also a money­ Huanuco and San Martin, carried out by a combined forced launderer for the Nicaraguan Contras). of Shining Path terrorists and bands of drug traffickers , have • La Prensa contributing editor Winston Robles has been labeled mere Shining Path "opportunism. " also been seen recently with John Maisto, the opposition's As shown in Maps 1 and 2,. the strategy is nothing new. point-man at the U.S. embassy. Winston, too, was part of The recent years' growth of zones where drugs are cultivated the Fernandez ring. Robles y Robles, his law partnership and processed has proceeded in strict parallel, in time and with his brother Ivan, was hired by money-manager Samos space, with the burgeoning terrorism, deployed and expand­ for "legal" work with the drug ring. ed in lockstep with the great irregular army occupying the • Former President Nicolas Ardito Barletta, named by Andean region. the Legislative Assembly as one of the nine top conspirators When Peru's President Alan Garcia warned in Uruguay in the plot to overthrow the government, returned hurriedly last May 15 that the terrorism typified by Shining Path is not to Panama to give his support to Diaz Herrera. A former unique to Peru, but "is essentially an Andean phenomenon economics student of George Shultz, Barletta was one of the which will stretch over the Andes toward Bolivia, Colombia, bankers most angered by Panama's participation in "Opera­ Venezuela, and Ecuador," he Was not painting a futuristic tion Pisces." Barletta personally, back in the early I 970s, picture . This transnational nar�o-terrorist army is already ensured that the offshore banking center was, in his words, reality. and it deploys throughout the Andes without regard "more secret than Switzerland." Barletta also supported the to borders. 1986 call by the Inter-American Dialogue, for the "selective For example, last March 16, the Peruvian weekly Vision legalization" of narcotics to be considered as an option, even reported that the number-two man of the Ecuadorian terrorist if, as the Dialogue admits, this would likely lead to 60 million band "Alfaro Vive, Carajo," Edgard Antonio Frias, had been cocaine addicts in the United States. operating in Peru for two years. On May 6, the Washington • Fellow Inter-American Dialogue member, Panamani­ Times revealed that terrorists of the Peruvian Shining Path an Catholic Archbishop Marcos McGrath, also signed the and the Colombian M-19 are operating jointly and "are re­ call for the legalization option. McGrath has lent his support sponsible for numerous blackouts in the last two years." The to cultist Diaz Herrera, and the opposition generally. same day, the Caracas newspaper El Nacional reported on • Christian Democrat Secretary General Guillermo the arrest, in Caracas, of "foreign terrorists probably linked Cochez, is at the center of the opposition plot. Cochez, who to the M- 19 and Shining Path," and revealed that "Shining also protested Panama's cooperation in "Operation Pisces," Path and M -19 operate jointly in Venezuela." stated on May 22, 1986, "I tell you, we are preparing the soil Shortly before, on Feb. 25, Bolivian Interior Minister here for the same problems they have in El Salvador and FernandoBetherlemi reported on the arrest in Bolivia of five Nicaragua. People are losing their faith. What are they going Peruvian subversives of the group "Red Fatherland," and a to do? They are going into the mountains soon." Uruguayan, connected to the Basque terrorist group ETA,

34 Feature EIR July 31, 1987 accused of various terror attacks in Bolivia in 1986, accord­ • On Jan. 16, 1985, Shining Path, which alternates in ing to a UPI wire. It was said to be the second case of foreign urban terrorism with the Tupac Amaru Revolutionary Move­ subversives apprehended in Bolivia. ment (MRTA), announced plans to "tum Lima into a second Beirut, demolish its national productive apparatus, and par­ Shining Path narco-terrorists alyze its national industry ," according to statements by an As early as 1984, Shining Path was identified as narco­ arrested member of Shining Path , published in the Lima daily terrorist by the Italian news weekly Panorama . as reported El Nacional. in the book Dope. Inc . Holding its first and second fronts in • In October 1986, the Soviet Spanish-language review, the high plateaus of Ayacucho and the jungle town of Tingo America Latina. dedicated its issue to analyzing "the corre­ Maria, it had already extended its actions to other parts of lation of forces" in Peru, and concluded that it was time for Peru. Panorama exposed the links of the Nazi International the Peruvian Communist Party (PCP) to stop playing the to Shining Path when it stated that "according to Peruvian democracy game. The publication made it clear that Peru is police sources," Stefano Delle Chiaie (the Italian terrorist Moscow's principal strategic target in Ibero-America, and recently arrested in Venezuela for the 1980 Bologna train gave the signal to launch the "Third Phase" of total armed station massacre) "organized one of Shining Path's most insurrection. spectacular acts: the assault on Lima of May 28, 1983," to stop a program of substituting crops for coca, to the northeast Communists drop 'democratic' mask of Lima. Shortly before, on March 11, the "democratic" commu­ Panorama also reported on the cancellation of a joint nists abandoned all democratic pretexts. "Some 200 dissi­ Peruvian-U.S. coca eradication program in Tingo Marfa, dents of Jorge del Prado's PCP are said to have signed up in after Shining Path organized 2,000 peasants of the valley of the ranks of the MRTA," reported the weekly Vision . The Tingo Marfa, and attacked, on July 4, 1983, a complex of others, more cautious, merely launched into an overt cam­ the Agency for InternationalDevelo pment (AID) which co­ paign to promote an alliance with Shining Path, MRT A, and ordinated the program, murdering numerous policemen and "similar groups." technicians. On May 4, Shining Path foresaw "the start of a great • On May 1, 1987, the Wall Street Joumal revealed that subversive offensive, which would go up to July, and which in the coca zones, Shining Path "guerrillas now present them­ would complete the long wave of attacks begun last Decem­ selves as the defender of the coca growers. " In returnfor their ber." This offensive would "reach its climax in mid-June, protection, "the guerrillas demand that the farmers tum over with bold and far-reaching acts of sabotage and hair-raising one-fifth of their coca crop," which they sell to the interna­ assassinations of politicians" in reprisal for the government's tional traffickers-usually Colombians-in exchange for quelling of the prison uprisings on June 19, 1986. By then, arms, money, and local resources. The "coca zones" are Shining Path warned, "they were preparing ...the assassi­ mainly located in the jungle area of the Upper Huallaga nation of an importantpolitical leader , whose name, obvious­ Valley, which includes Ucayali and Tingo Marfa, as well as ly, was not given to us," said the Peruvian journalEquis X. a the departments of San Martfn and Madre de Dios, and the habitual Shining Path mouthpiece, which "anticipates," with jungle fringe departments of Ayacucho, Hmlnuco, Cuzco, amazing clairvoyance, the narco-terrorists' actions. Puno, Cajamarca, and Apurimac . Not long afterward, the PCP went public with its demands • On May 23, the Times of London Lima correspondent for an alliance with the terrorists: reportedthat "Shining Path guerrillas halt effortsto eradicate • On May 13, Jorge del Prado, the PCP secretary gen­ cocaine; they have exploited farmers' anger at official anti­ eral , revealed the conclusions of the regional congress of the drug efforts; coca eradication is a hopeless task." Established PCP in the Departmentof Junfn, saying that, concerningthe in the Upper Huallaga Valley, one of the main sources of MRTA, "it reached the opinion that it would be possible and cocaine, the guerrillas "engage in expensive arms deals with appropriate for United Left and other anti-imperialist forces the traffickers," the Times continues, asserting, incredibly, ...to initiate a dialogue" with that organization. that the guerrillas themselves are "not believed to be involved • May 18, Shining Path's seventh anniversary, was the in the drug business." date published as its "great assault on Lima." To hardly anyone's surprise, the celebration was timed in coordination Garcia targeted by Moscow with the May 15 police strike which Shining Path forces and Since 1985, the year of Alan Garda's inauguration, Peru the MRTA had provoked in limited sectors of the police, and has recorded 2,605 terrorist acts, between blind and targeted was to coincide with the general strike of the communist­ assassinations, power-line bombings, and massacres of army controlledGeneral Confederation of Workers of Peru (CGTP). units and police posts, etc., according to Interior Ministry The latter, which failed, was called for May 19 by "fortuitous statistics released on April 20, 1987. Continued on page 38

ElK July 31, 1987 Feature 35 R A Z L

Brasilia @ � ( J

MAP 1. Presence of drug trade in South America ARGENTINA Coca cultivation and cocaine processing

Zones cultivated with coca (1985)

- Zones cultivated with coca (1960)

J,. Zones where basic cocaine paste is produced

... Zones of cocaine refining

36 Feature EIR July 31, 1987 R A z L

Brasilia @ J/ /

Geographic confluence of drug trade and terrorism ARGENTINA

Zones of coca cultivation and cocaine processing (1 985)

.. Zones of coca cultivation and cocaine processing (1960-1 969)

• Current presence of narco-terrorism

¢ Zones where guerrilla movements appeared in the 1970s

ElK July 31, 1987 Feature 37 Continued fro m page 35 uses direct terrorist action. We admire and cultivate their coincidence," according to CGTP chairman and secretary spirit of sacrifice." general, Gustavo Espinosa. • From May 19 onward, PCP secretary general Jorge del Narco-terrorism in action Prado threatened that "the way things are going ...every­ While in Lima the handshakewas being clinched between thing points toward a civil war ...and we must be ready for the "democratic" communists, Shining Path, and the MRTA, anything." United Left Sen. Valentin Poacho, chimed in on the narco-terrorists staged their first major show of force: Peruvian television that the CGTP "has the capacity to blow • On June 2, three hundred narco-terrorists equipped up the country if we want." with modem weaponry (such as Soviet AK-47s) had their • Simultaneously, the secretary general of the CGTP, debut as Shining Path's "Popular Guerrilla Army," attacking Gustavo Espinosa, blurted out on the TV program "En Per­ the jungle fringe town of Uchiza, where they reduced the sona," that "the United Left will not wait until the 1990 police post to rubble, and then raised the hammer and sickle elections to attain power . . . [because I the present regime flagin town's main square. may end in an unexpected way, perhaps via a coup d'etat." Peru's entire popUlation watched "eyewitness" reportage This is why, as Espinosa himself made clear, the PCP has on TV's Channel 5 and read in the magazine Caretas how long maintained both "legal" (called "democratic") and "con­ narco-terrorist operations are run. As could be seen, the sei­ spiratorial" work. Now it is busy trying to bring the two zure of Uchiza and a dozen nearby towns-later retaken by together. the army-was a combined Shining Path-drug mafiaopera­ • On May 28 the PCP national congress concluded, with tion. The journalists who did the documentary were clearly an agreement to recognize Shining Path and MRTA as "po­ aided by Shining Path guerrillas and drug traffickers alike­ litical organizations," and called the Garda government some of the latter sporting unmistakable Colombian accents. "bourgeois, developmentalist, and in the process of turning The TV broadcast showed how walls all over Uchiza were fascist." Del Prado, Espinosa, et al . also announced that the painted with graffiti cheering on Shining Path leader "Chair­ PCP is open "to dialogue with the MRT A, if they take the man Gonzalo" and rejecting the government's anti-drug op­ first step." The MRTA fo lks, they explained, "are closer to erations, particularly "Operation Condor." the PCP because they are a mass movement." • On June 4, by executive order, a combined 500-man • On May 30, the president of United Left, Alfonso force of the army and police retook control of Uchiza and 12 Barrantes Lingan, was forced out because his open opposi­ other towns. tion to terrorism was getting in the way of Moscow's plans. • On June 14, the director of Brazil's Anti-Narcotics The PCP gave Barrantes his last stab in the back: After pro­ Office, Augusto Bellini, revealed that "Brazilian police agen­ voking a humiliating scene against him in the congress, they cies and the DEA [U.S. Drug Enforcement Administration] forced his resignation. In his farewell speech, Barrantes de­ have verified that Shining Path and the M-19 operate with nounced those who moved to get him out: "Terrorism, as internationalnarco-terrorist bands and are financed by them," John Paul II says, is never justified in a civil society;" this, the Peruvian daily El Comercio reported. he added, "is a sophisticated returnto barbarism and anarch­ On June 17, the French paper Le Monde reported that ism; it is always a manifestation of hate." "Peruvian terrorists of Shining Path and the drug traffickers • The pext day, May 31 , Barrantes' s erstwhile collabo­ identify themselves as defenders of the small coca produc­ rator, the Jesuit senator for United Left, Enrique Bernales, ers," and have sealed a "non-aggression pact." dropped his mask and proposed �'the articulation of all the With the drugs-terrorism symbiosis made public, Mos­ forces of the popular camp, with an organic mobilization cow started a desperate campaign to deny the existence of capability, that can convince those who are in other parts of narco-terrorism, and called its own troops into the fray. Thus the revolutionary camp, Shining Path, the MRTA." It is a on June 23, in the district ofQinua, a contingent of30 Shining question, he added, of "getting Shining Path and MRT A to Path members set fire to a truck loaded with coca from the drop their militarist strategies . . . to begin the process of National Coca Enterprise of Peru (the official entity which incorporation of both Shining Path and MRTA into the pop­ authorizes, buys, and trades in the legal coca crops for phar­ ular national project." maceutical purposes) to "prove" they have nothing to do with • On June 5, communist leader Jorge del Prado, now drugs. According to testimony from the driver and the other doubling as the president of United Left, called a press con­ occupants of the assaulted truck, before burningthe coca the ference to be more explicit in his appeal to close ranks with Shining Path guerrillas gave them an indoctrination lesson the Shining Path narco-terrorists: "We do not condemn the for 10 minutes saying that "nothing unifies" Shining Path armed struggle," he said. "We think that in a given case we with the drugtraffickers and that they were doing this action also can take up arms." As to Shining Path, del Prado said: to "prove it." "Death to the liars, we're not drug traffickers," "It is a political movement which has risen up in arms, which shouted the guerrillasas they burnedthe coca.

38 Feature EIR July 31, 1987 Drugs and terrorism in Colombia: how the two combined into one

On Nov. 6, 1985, an M-19 terrorist squad assaulted the army including Peru's MRTA, the Venezuelan Brigada Roja, Colombian Justice Palace in downtown Bogota, seized and and the Ecuadorian Alfaro Vive Carajo. systematically murdered 12 of the Supreme Court's 24 mag­ • In March 1984, ''Tranquilandia,'' the largest cocaine­ istrates, and burnedext radition petitions and documentation processing facility in the world to that date, was discovered on numerous drug traffickers, both fugitive and imprisoned. in the Colombian jungles ofCaqueta province. Evidence was In the ensuing battle for the Palace, the building was gutted, found that M- 19 guerrillas were serving as the security guards the nation's legal archives burned, and 100 people killed, for the "coca city." Within the month, several hundred M-19 including the 40 terrorists. narcoterrorists seized and bloodily occupied F1orencia, the Most Colombians branded the act a clear case of "narco­ state capital of Caqueta, in retaliation for the Tranquilandia terrorism." EIR published a dossier on the event, identifying bust. it as a "narco-terrorist" assault run jointly by the Gnostic • Nov. 2, 1986: Hermil Lozada, commander of the Church and the Soviets. Months later, evidence came to light FARC's seventh front near the border with Venezuela, told that the M-19 had been paid millions by drug traffickers to the daily EI Espectador. "We have no problems with people murder the magistrates, who were in the process of debating growing coca. It is not a vice or problem for the people, but a challenge to the U.S.-Colombia extradition treaty, and to for the government." In March 1987, Semana magazine car­ bum the extradition documents. ried an interview with the head of the FARC, Jacobo Arenas, Yet, not one of the U. S. news media covered the mafia­ who responds to charges that his guerrillas finance them­ terrorist link, and even as late as Feb . 13, 1986, U. S. FBI selves through the drug trade: "What we are telling the [coca] director-now CIA director-William Webster was public­ growers is: 'Comrades, we are not going to prohibit you from ly denying the drugs-terrorism link. In an interview to the sowing, because it is generalized, and besides, we are not the Los Angeles Times that day, Webster declared , "Words like government. Grow it. ' " narco-terrorism tend to exacerbate the realities as we know • Nov. 13, 1986: The National Liberation Army (ELN), them. I also do not believe that the hard evidence links the trained by Castro's Cuba, clashes violently with Venezuelan two ...." national guardsmen in Sierra de Perija, along the border with On June 30, the Colombian press reported on the result Colombia. Sierra de Perija is identified by Venezuela's na­ of a Catholic Church poll in that country, which determined tional guard commander in the state of Zulia as the largest that the guerrillas were active in 80% of the national territory, marijuana-producing center in the world. Sierra de Perija is and that their presence "is combined" with the drug traffickers also part of a contested oil-rich region between Colombia and in many of those areas. Venezuela known as the "diferendo," an historic source of friction between the two countries. Formation of the narco-terrorist army • November 1986: The ELN dramatically escalates its The competing Colombian guerrilla movements-the sabotage campaign against Colombia's oil industry, begun "socialist" M- 19, Maoist EPL, the Moscow-linked FARC, in early 1985. Financed by the Soviet-li nked Occidental Pe­ and Cuba-linked ELN-began to clearly emerge as a narco­ troleum Co. of Armand Hammer, and by the Mannesmann terroristarmy in 1985, when they joined with the "indigenist" Co. of West Germany, to the tune of millions of dollars in Quintin Lame Brigade under the umbrella National Guerrilla both kidnap ransoms and protection money ("war taxes"), Coordinator. Quintin Lame was founded and led by Nazi­ the ELN targeted Colombia's 1 ,500-kilometer pipeline, the Communist cocaine czar Carlos Lehder Rivas, who had pub­ Cano-Limon-Covenas line, for sabotage, simultaneously ag­ licly pledged to create a "half-million army" to "liberate" the gravating tensions between Colombia and Venezuela over continent. In 1986, the Americas Battalion surfaced, incor­ the "diferendo. " In December 1986 statements to the Colom­ porating the Colombian terrorists into a larger Andean-based bian Congress, Defense Minister Samudio declared that the

EIR July 31, 1987 Feature 39 pipeline had been blasted 21 times, eight helicopters of the the region of Caqueta where the army suffered its ambush, oil companies destroyed, and at least 26 oil company em­ the FARC totally controls production of coca ....The hy­ ployees kidnapped over the previous 18 months. pothesis, that they fear an operation similar to that in Putu­ • Nov. 25, 1986: The magazine Hoy par Hoy reports mayo [army raids on vast coca crops the previous week] , and that fugitive narco-banker Jaime Michelsen Uribe, first cou­ are therefore trying to divert attention with attacks like those sin to former Colombian President Alfonso Lopez Michel­ of Caqueta, is very probable." sen, had paid the ELN $3.5 million in ransom money to try • June 25, 1987: the Colombian Communist Party news­ to get his daughter Camila, kidnapped 14 months earlier, paper Voz fully defends both the F ARC assault on the military back. Another seven months, and possibly millions of dollars patrol in Caqueta and, it appears, the ELN assault on Vene­ later, Camila is still not home. It is revealed, however, that zuelan troops, by insisting that the FARC "cannot be led to Michelsen had deployed his cousin Alfonso Lopez and Sen­ slaughter like tame sheep," but must "defend itself and repel ator Mestre Sarmiento to personally plead with Fidel Castro, the monstrous siege that generals from Colombia and Vene­ acknowledged controller of the ELN, to intercede in the zuela, on orders of the U.S. mission, are running against the affair. Senator Mestre, currently one of fiveexecutive mem­ brother peoples of our two countries." The same issue of Voz bers of the ruling Liberal Party in Colombia, had earlier been announced a unity meeting between the communists and the denied the post of "designado" (vice president) because of ELN. his business relations to notorious drug-trafficker Gilberto Rodriguez Orejuela. War over the extradition treaty It was also revealed that Michelsen's intermediary with The U.S.-Colombian extradition treaty has been repeat­ the ELN is one Juan Jose Echeverria, also known as "Mr. edly identified by the drug-traffickers as the number-onethreat Johnny," a former security minister for an ex-president of to their bid for power. Through corruption, threats, and mur­ Costa Rica and an intimate of Castro and his "guest," Robert der, the mafia finally succeeded on June 25 in forcing the Vesco, and of Nicaragua's Daniel Ortega. Mr. Johnny had highest court in the country to overturn the treaty. They had mediated earlier ransoms of Mannesmann Co. employees the help of the guerrilla movements as a combination "big kidnapped in Colombia by the ELN. stick" and public relations voice for their anti-extradition • Jan. 19, 1987: A march of 23,000 peasants is orga­ efforts. nized by the Colombian Communist Party in Guaviare, to • Dec. 5, 1984: M-19 chieftainIvan Marino Ospina held protest militarization of the region as a violation of the gov­ a Mexico City press conference to announce M- I 9 support ernment-FARC truce. In fact, the military is there on anti­ for mafia threats to "kill one American for every Colombian drug operations. Colombia's agriculture minister char�ed extradited." Said Marino Ospina, "These threats should be that the march had been organized by the drug-traffickers to carried out throughout the world against the representatives force a military retreat, and even presidential peace adviser of rapacious imperialism . . . and will serve as the basis for Carlos Ossa Escobar-who had previously denied that nar­ negotiations if some day these traffickers, who are also Co­ co-terrorism existed-insisted, "If the guerrillas don't rap­ lombians ...use their money to build the nation." Several idly split from the narcos, they will be corrupted by it and weeks later, cocaine czar Lehder declared: "The M -19 is the lose. " only movement that has declared itself against extradition. • April 10, 1987: Following repeated terrorist attacks Ivan's call in Mexico is a call for the guerrilla movements to along the Colombian-Venezuelan border, Venezuelan De­ join in the [drug] bonanza." fense Minister Cardoso Grimaldi places troops in a state of • Nov. 10, 1985: Excerpt of press conference by then alertin three border states to prevent the transfer "of Colom­ Justice Minister Enrique ParejoGonzal ez: "The day the guer­ bian guerrillaaction to Venezuelan soil." rilla movement took the Palace of Justice, the four judges of • June 12, 1987: 100 heavily-armed ELN terrorists as­ the constitutional court were meeting to decide upon the sault a sleeping contingent of Venezuelan national guards­ request to declare the extradition treaty [unconstitution­ men in Sierra de Perija and slaughter nine of them. The al]. . . . One cannot have many illusions about the fate the guardsmen had been involved in eradicating coca and mari­ judges were to suffer." juana plants in the area. The Venezuelan press responds by • Dec. 12, 1986: The Colombian Supreme Court over­ publishing a stream of accusations against the Colombian turns the U.S.-Colombian extradition treaty as unconstitu­ governmentand armed forces for "harboring" narco-terror­ tional. It is reinstated-temporarily-by President Barco. ism. One newspaper published a map purportingto show that Hector Hurtado, executive member of the Colombian Com­ 30% of Venezuelan territory had been stolen by Colombia in munist Party, praises the Court's decision: "It is a matter of decades past. sovereignty; we can't let foreign courts decide our affairs." • June 16, 1987: 200 FARC terrorists in the Colombian The daily El Espectador editorially denounces the court de­ jungle province of Caqueta use land mines to blow up two cision as cowardice. armyconvoy trucks, killing 32 soldiers and officers. Presi­ • Dec. 17, 1986: El Espectador director Guillermo Cano dential counselor Ossa Escobar tells the press, "In Caguan, is killed by mob assassins on the streets of Bogota.

40 Feature EIR July 31, 1987 drug-traffickers, already has an unsavory reputation for kid­ napping exploits in his youth; DEA documents from the period show that his links to the drug trade go back at least to 1976. • Endowed with labor credentials as a UTC partner, Rodriguez buys heavily into the UTC's newly-formedWork­ ers Bank. The bank funds AIFLD-designed projects, and friend of would become part of a network of drug-money laundering AIFLD : banks throughout the region. • In 1984, UTC president Victor Acosta organizes a drug traffickers nationwide campaign against extradition of Colombian na­ tionals to the United States, a campaign which complements Narco-terrorism in Ibero-America got an early start through that being run through the above-ground publications of then­ the State Department-funded CIA creation known as the fugitive cocaine czar Carlos Lehder. American Institute for Free Labor Development (AIFLD). • In November 1984, Rodriguez is arrestedin Spain with As John Ranelagh describes in his book, The Agency: The one Jorge Luis Ochoa Vasquez, number-two man in t�e in­ Rise and Decline of the CIA , "[Agent] Cord Meyer had had famous "Medellin Cartel." Within months of his arrest, a the original idea for the institute in the late 1950s, and since delegation of Colombia's leading trade unionists-induding its inception over two hundred thousand Latin American the secretary general of the UTC-arrivesin Madrid to plead labor union officials have been trained at its center at Front his defense. Royal, Virginia. It has been one of the more successful CIA • In 1984, the UTC's Workers Bank is accused of being ventures, indirectly organizing a very sophisticated collabo­ one of four banks involved in launderingdrug money for one ration between government, business, and labor, carrying Heman Botero, a wealthy soccer team owner who earnsthe out a clear policy conceived as being in the externalinterests distinction of becoming the first Colombian drug-trafficker of the United States. Presumably it also had the additional extradited to the United States. He is currentlydoing 30 years advantage of providing the CIA with informants and agents in a U.S. jail. throughout the labor unions of South and Central America." • During his 1985 Miami trial, Botero's defense attorney What Ranelagh leaves out is that AIFLD is also "one of brings up one Mario Valderrama, the head of the UTC's the more successful" efforts of Soviet agents of influence Medellin affiliate, to argue Botero's innocence. within the U.S. intelligence community to establish an intel­ In March 1985, Panamanian authorities shut down First ligence/counterintelligence conduit into-and out of-Ibe­ Interamericas Bank, S.A., whose majority stockholders are ro-America. A Communist collaborator and World Federalist Rodriguez Orejuela and Jorge Luis Ochoa Vazquez. Man­ who worked throughout the 1950s and 1960s to create the aging the bank at the time is former UTC treasurer and Work­ networks which yielded Castro's Cuba, the Nicaraguan San­ ers Bank director Antonio Beltran. dinistas, and the Nazi-communist drug-traffickingapparatu s, • In 1986, the U.S. embassy and AIFLD jointly under­ Cord Meyer and his AIFLD "brainchild" are the narco-ter­ write a UTC convention, which names Valderramavice pres­ rorists' best friends. ident of the national federation. AIFLD's links to the narcotics trade, elaborated in more • In 1986, both Rodriguez and Ochoa are extradited than one EIR special report, are exemplified in Colombia, from Spain to Colombia, despite a previous U.S. extradition where its puppets in the labor movement are not only collab­ petition. Ochoa, accused in Colombia only of illegally im­ orators of leading drug traffickers, but highly public lobbyists porting wild bulls, is promptly released from jail and disap­ for their interests. This is most easily seen in the case of the pears. Rodriguez, wanted on drug-trafficking charges, re­ U.S.-Colombia extradition treaty, which both the "anti­ mains in jail through 1987. His trial is expected to yield a Communist" UTC and the Colombian Communist Party have verdict soon. ferociously denounced as a "violation of national sovereign­ • In 1987, aU. S. extradition petition against Rodriguez ty." Orejuela is rejected by Justice Minister Edmundo L6pez The figure of Gilberto Rodriguez Orejuela gives in a G6mez, who promptly resigns his post in protest against nutshell the essence of AIFLD and the broader network of administration pressures to change his decision. L6pez G6m­ which it is a part: ez tells the press that his "principled stance" was takenon the • In 1975, Colombian "banker" and "entrepreneur" advice of former President Alfonso L6pez Michelsen, whose Rodriguez Orejuela becomes a partner in a business venture 1974-78 administration helped sponsor the drug trade in Col­ undertaken by the Union of Colombian Workers (UTC) , then ombia. In 1984, L6pez met with the country's drug kingpins the largest trade union federation in Colombia and a showcase only days after their contracted murder of Justice Minister of AIFLD training and financing. Rodriguez Orejuela, who Lara Bonilla. He then mediated their offer to pay the national is to become a leading financier for the "Medellin Cartel" of debt with their drug profitsin exchange for an amnesty.

ElK July 31, 1987 Feature 41 u. s. Gulfdeplo yment a blow to New Yal ta deal

by Jeffrey Steinberg

On the very day that American flags were raised above the our initiative to obtain a cease-fire in the Iran-Iraq war and decks of two Kuwaiti oil tankers, thus activating a U.S. sanctions against parties that do not comply. Here we have a commitment to militarily secure free transit through the war­ limited and probably short-term parallel interest with the torn Persian Gulf, Defense Secretary Caspar Weinberger Kremlin, and we are acting on it. Success will require, how­ published a letter to the editors of the New York Times, ever, that the Russians and their allies stop sending arms to rebuking those who insist that the United States pursue a Iran, the intransigent party in this conflict." superpower New Yalta-type solution to the Middle East re­ Ending with a statement of American support for the gional crisis. sovereign rights of the nations of the Gulf, Secretary Wein­ Answering a July 19 Times op-ed by George Ball, Wein­ berger concluded, "Far from living in the 'idiom of the East­ berger wrote on July 22: " ...there is a deeper problem, and West struggle,' the United States recognizes that the future it involves Mr. Ball's understanding of Soviet intentions in ofthe Persian Gulflies in the hands ofthe Persian Gulf states, the Persian Gulf. Mr. Ball restates the shopworn criticism not in pronouncements from the most powerful nations. We that United States policy in the Persian Gulf is driven by 'the can and must secure our own interests and those of our friends bellicose idiom of the East-West struggle. ' Mr. Ball contends and allies. We can urge a cease-fire , negotiations and peace, that by not recognizing that Moscow and Washington 'share but we cannot, alone, or with the Soviet Union, determine a common objective in the Persian Gulf,' the Reagan admin­ the future of the Persian Gulf." istration is passing up the chance for a historic East-West This policy formulation, combined with the impressive agreement on that region's future . The popular academic U.S. and European commitment of naval force to challenge theory of the 1970s, which went by the name 'convergence,' the Khomeini regime's bullyboy tactics in the Gulf, repre­ is given full rein in Mr. Ball's thinking. He sees a United sents a potential first step toward a dramatic shift in U.S. States-Soviet deal on the Persian Gulf as the prelude to further strategic orientation, a shift that one well-placed American agreements on Afghanistan and the Arab-Israeli struggle. intelligence source described as "a reversal of seven to eight "Moreover, Mr. Ball argues that the Russians have been years of disastrous failures in American Middle East policy." reassuring about our benign intentions in the region and are Countervailing policy signals, such as those advanced by 'desperately' trying to 'extricate' themselves from the 'Af­ Trilateral Commission ideologue and Khomeini-backer ghan inbroglio.' Forgotten here is Russia's historic pursuit George Ball, have left some of America's allies with the of influence in this region, the massing of Soviet military unsettling impression that the Reagan administration, fresh power on the Iranian border, Soviet arming of the warring from the Iran-Contra scandal , still lacks a center of power factions in Ethiopia and Yemen, and Soviet attacks on Amer­ and is proceeding along a schizophrenic course, simultane­ ican policy that can hardly be interpreted as reassuring .... ously pursuing a Weinberger-centered policy of confronting "Mr. Ball also ignores that we are talking with the Rus­ the Khomeini regime and the Soviets in the Gulf, and a State sians and the entire United Nations Security Council about Department-centered policy orienting toward a New Yalta

42 International EIR July 31, 1987 deal, surrendering Gulf hegemony to Moscow. These fears, Moscow gets into the act while not unjustified, ignore the long-term implications of a Far from happy with U.S. actions in the Gulf, Soviet direct American military response to the increasingly Soviet­ leader Mikhail Gorbachov took two initiatives during the linked Iranian regime. week of July 20-26, both aimed at tilting President Reagan Several high-level U.S. sources have told EIR that one back in the direction of the maleable New Yalta partner he outcome of an aggressive U.S. execution of the declared met with at Reykjavik last October. First, Gorbachov sent a policy of securing the Gulf by military force, will be the letter to Reagan offering to adopt any forum for joint efforts establishment of permanent basing for the U. S. Central Com­ at solving the Gulf crisis, along the lines of the State Depart­ mand in the Persian Gulf, either in Saudi Arabia or in one of ment's "regional matters" discussions, so long as the United the other member states of the Gulf Cooperation Council. States refrains from going forward with the re-flagging pro­ Such a permanent land basing would go a long way toward gram. Pravda and the Soviet news agency TASS denounced returning the United States to a balanced Middle East policy, Washington for pushing the confrontation button in the Gulf. placing the moderate, anti-Soviet Arab states on a parallel The following day, Gorbachov gave an interview to an footing with Israel, and definingIsla mic fundamentalism and Indonesian newspaper offering a major "concession" in the Soviet aggression as the principal threats to the security and Intermediate-Range Nuclear Force (INF) talks in Geneva, by sovereignty of the states of the region. agreeing to the U.S. demand that the "zero-zero option" agreements include the Asian theater. Amidst a flurry of Iranian terrorist response Westernmedia praise for "peacemaker" Gorbachov, the Rea­ On July 24 , as the re-flagged Kuwaiti supertanker Bridge­ gan administration as of this writing has responded coolly, ton was proceeding under escort through a section of the Gulf awaiting the formal proposal at Geneva. White House that had been recently patrolled by Iranian Pasdaran (Revo­ spokesmen, including National Security Adviser Frank Car­ lutionary Guard) gun boats, it struck a mine, sustaining costly lucci, have warned about previous Soviet "breakthrough" damages. Within hours of the incident, President Reagan offers that were loaded with fine-print conditions unaccept­ convened a meeting of the National Security Planning Group able to Washington and the European allies. at the White House. Reportedly the administration deter­ In her visit to Washington a week before the Gorbachov mined to refrain from an immediate retaliatory action, in INF offer, British Prime Minister Margaret Thatcher had order to sow further factional strife within the Khomeini cautioned President Reagan against rushing into any zero­ regime. option agreement without firstcons idering carefully all of the The prevailing estimate in Washington and in other West­ implications for the security of Europe. Thatcher's "go slow" ern capitals, is that the Khomeini regime will resort to an warning coincided with similar urgings by Secretary Wein­ increase in international terrorism, a move that began with berger and other Cabinet officials. Weinberger is coordinat­ the hijacking of an Air Afrique flight by an Islamic terrorist ing his activities closely with both Thatcher and French Prime on July 24. The incident ended in Geneva, with one passenger Minister Jacque Chirac. Chirac, in tum, has established close killedbefore the terrorist was overpowered by crew members bilateral collaboration with West German Chancellor Helmut and police commandos. Kohl. Within hours of returning to London fromher Wash­ Signaling a fu ll-scale terrorist activation, 20,000 Le­ ington junket, Mrs. Thatcher announced that two Kuwaiti banese Shi'ite fanatics demonstrated in Baalbek on July 22. tankers would soon be flying British flags and would be Khomeini protege and Hezbollah leader Sheikh Mohammed accompanied by British Navy vessels. Yazbek told the rally, "France, U.S.A, and Great Britain are the enemy of God ....Terrorism is the only solution .... Pearl Harbor factor We are awaiting the Ja twa (religious edict) from Imam For the United States, the policy crisis goes deeper than Khomeinito fight'til victory or martyrdom." Breakingmonths the choice between the Weinberger military policy and the of public silence, Khomeini himself responded several days New Yalta "Great Powers" deal. The deeper crisis involves later, in a televised address to Shi'ite fanatics in Teheran, by the implication for America's collapsing industrial base of a repeating his 1982 declaration that "the word of God" com­ sustained commitment to project military power in the Gulf. mands Iran to crush the Iraqi regime of Saddam Hussein. To carry that mission forward and broaden it into a new The Teheran regime is virtually guaranteed to strike di­ overall foreign policy, requires a revival of industrial capac­ rectly at American or WesternEuropean ships in the Gulf in ities, impossible under the regime of "Reaganomics." Per­ the near future. Iran has announced major sea manuevers haps a decisive military response to the Khomeini challenge involving the Navy, Air Force, and Pasdaran in early August. will spark a "Pearl Harbor" reaction in the American pUblic. Between now and the end of the summer, the "moment of Under those conditions, perhaps President Reagan could be truth" will come, and at that point, the United States must convinced to abandon his "post-industrial" and "free enter­ respond with a "hot pursuit" military assault-devoid of prise" delusions, and crank up America's greatest military State Department "crisis managers." resource, its industrial mobilization capacity.

EIR July 31, 1987 International 43 North Korea and State Department seek deal fo r Korean peninsula by Linda de Hoyos

The same day that Soviet Secretary General Mikhail Gorba­ demanding a "transfer of power" in South Korea, it appeared chov declared through the pages of the Indonesian newspaper that either the military would directly intervene and crush the Merdeka that the Soviet Union would be willing to pull back growing protests, or the U.S. -backed opposition and student its SS-20s from the Asian theater as well as from Europe, a movements would succeed in overturningthe Chun govern­ "peace offer" for the Korean peninSUla was issued from the ment. North Korean capital of Pyongyang. The regime of Kim II The Chun government, however, with Roh Tae-woo, the Sung proposed in an official broadcast that it join with both presidential nominee of the ruling Democratic Justice Party, South Korea and the United States in talks to reduce military found a third option. In an action that stunned the opposition forces on both sides of the Demilitarized Zone , bring about and the world, Roh Tae-woo and President Chun Doo Hwan the withdrawal of the 40,000 U.S. troops currently in South acceded to opposition demands for direct elections and re­ Korea, and achieve the reunification of the two Koreas. lease of political prisoners, bringing an end to the rioting that The North Korean proposal fits into a pattern with Gor­ had begun on June 10. bachov's offer, which was timed with the first anniversary of In Korean society, student protests have a far greater his famous Vladivostok speech, in which Gorbachov asserted moral and psychological impact than similar protests in Russia's role as an "Asian power." As with the North Korean Western countries. As one Korean expert explained it: "The proposal, the Russian offer is aimed at diplomatically forcing students consider themselves the voice of society. It is a role back the lines of the U.S. military presence in Asia-al­ which Korean students have had for centuries ....Korean though it is the Soviet military presence, not American, that society appears to authorize students to be a conscience for has increased dramatically in the region over the last decade. society which is, and ought to be, above and beyond the Gorbachov said the Soviets would not increase the number power of the society to reject. ...Never has there been a of Soviet aircraftin Asia if Washington agrees to do likewise; moment in Korean history over the last 600or 700 years . . . proposed that the Soviet and U.S. naval fleetsbe reduced and where anybody would consider repressing a student moral limit areas for nuclear-armed or powered navigation; and protest without very, very carefully considering the conse­ proposed to eliminate nuclear testing. The offer is designed quences .... [The students] consider themselves morally to convince Asian nations of Soviet sincerity in its drive for invulnerable. They may get busted but the more they're bust­ regional "nuclear-free zones." Along with the ASEAN na­ ed, the more they will be vindicated, because the very fact tions, the Korean peninsula is targeted to become "nuclear that they're busted proves that they are right, and the other free"-a euphemism for removal of U.S. military forces. people are ogres. So everything you do to them only confirms There is little doubt that Pyongyang and Moscow coor­ their self-image . The instinct to martyrdom is a very strong dinated their "peace bids." In the last two years, the Soviet part of it." Union and North Korea have grown closer than ever before , On Monday June 29, Roh Tae-woo, a former general and and Moscow has provided North Korea with nuclear energy close associate of President Chun, managed to avert the acute and military aid. For Pyongyang, however, the peace bid has danger to the country, by announcing that he would press the additional advantage of asserting the North's presence President Chun to agree to opposition demands for direct into the election campaign now building within South Korea elections. If the President did not accede, he stipulated, Roh itself. would step down as presidential nominee. According to news reports in the Wall Street Journal corroborated by U.S. in­ Roh Tae-woo takes the high ground telligence sources, Roh pressed his demand through the lead­ Only a month ago, the NorthKoreans were happily view­ ership of the Democratic Justice Party and then on to Chun. ing events in the South, as thousands of protestors , led by the On June 22, the DJP leaders hadcalled upon the government opposition Reunification Democratic Party, were threatening to compromise . The removal of Home Affairs Minister Gen; to bring down the governmentof President Chun Doo Hwan. Chang Se Dong, the leading proponent of a coup, from the Under conditions in which the U.S. State Department was cabinet, in the wake of the scandal over the police torture-

44 International EIR July 31, 1987 death of a student, gave Roh the leverage to press his demand. For Koreans, the turnabout "had the effect of a political nuclear bomb," reported the Japanese daily Mainichi. In South Korea's Confucian society, wherethe premium is placed on consensus and loyalty, Roh's direct challenge to Chun sent a shockwave through the country, and silenced the op­ position. After 48 hours, President Chun himself addressed the Alfons in , IMF push nation, giving his promise that, depending upon agreement on constitutional revision with the opposition, direct elec­ Argentina to brink tions will be held late this year, in time for Chun' s scheduled departure from the Blue House in February 1988. The Pres­ by CynthiaRush ident appealed to South Korean patriotism and pride. "Now, let all of us create another legend to bring our country into relief in world history, not simply as an economic example, The Argentine governmentof Raul Alfonsin is portraying the but as a political example. After giving up past practices of upcoming Sept. 6 elections for several key gubernatorialand misunderstanding, mistrust, and mutual hatred, we, as mem­ congressional posts as a test of the four-year-old regime's bers of the same nation and country and as fellow democratic success as a "democracy." In the midst ofextraordinary eco­ citizens, must expand trust and reconciliation." nomic crisis, which will deepen as a result of new accords The President further warnedthat "if any attempt were to with the International Monetary Fund, Alfonsin is telling bemade to cause social disorder by lawlessness and violence Argentines that if Radical Civic Union (UCR) candidates for any reason whatsoever, it will be regardedas an attempt aren't voted into officeover opposition Peronists, the country to destroy the liberal democratic system, and the people will will sink into chaos. not tolerate this." Acts of violence-bombings, murders, assassination The government has since made additional concessions. threats-have accompanied this election campaign, as also President Chun resigned from the leadership of the Demo­ occurred prior to the 1985 congressional elections, when cratic Justice Party, the cabinet was reorganized in order to citizens were told that a vote against the UCR was a vote give the appearance of assuring fair elections, and on July "against democracy." In recent weeks, bands of unidentified 22, the leading parliamentarians of both parties agreed tQ terrorists have bombed several UCR officesaround the coun­ waive a clause in the constitution which prohibited opposi­ try; the editor of the ultra-right-wing newspaper Alerta Na­ tion leader Kim Dae Jung from running for President. cional was murdered;and word of an assassination plot against The government has managed to seize the moral high Alfonsin by French terrorists was leaked to the press. ground, for the moment. In addition, it hopes that the tensions On June 29, news that the tomb of Gen. Juan Domingo between the two opposition leaders-Kim Dae Jung and Kim Peron had beendesecrated by an unknown commando shocked Young Sam-will be exacerbated and lead to a divided op­ the nation. Individuals entered the Per6n family tomb at position that can thus be defeated. Chacarita cemetery in Buenos Aires, stole the general's sword For the Korean military , the danger is the ascension to and cap, and severed the hands from the cadaver. Letters power of Kim Dae Jung, whom they suspect of being an received by Peronist leaders Vicente Saadi and Carlos Grosso agent of the North, and key generals have let it be known that warned that the hands would be "pulverized," unless the the military would not permit Kim to become President. perpetrators received the sum of $8 million to pay "a debt Certainly, Kim Dae Jung would be a willing negotiating owed us by Per6n." partner with the North for the expUlsion of the U. S. military The government promised an immediate investigation, presence in South Korea and a Soviet-Chinese-sponsored but promptly announced that "right-wing extremists," wish­ "reunification," and this is why his returnto South Korea and ing to destabilize the nation, had carried out the desecration. bid for power has been sponsored by the U.S. State Depart­ To date, the investigation appears to have gone nowhere; and ment and its Project Democracy fronts. A demand from Kim few have bought the "right-wing destabilization" explana­ Dae Jung for the immediate creation of a caretakerbipartisan tion. governmentwas heralded on the op ed page of the New York The word on the street, among angry Peronist activists Times. and trade unionists, is that "the governmentdid it." Political Only the day before Pyongyang issued its peace offer, observers speculate that the State Intelligence Service (SIDE), Assistant Secretary of State Gaston Sigur addressed the For­ a bastion of UCR political appointees which is advised by the eign Policy Association in New York and urged that Pyon­ Israeli Mossad, was likely involved, perhaps in connivance gyang cooperate "in lessening conflictand strengthening re­ with other governmentof ficials. They also fear that in com­ gional peace." bination with the devastating economic situation, and contin-

EIR July 31, 1987 International 45 ued military unrest, Argentina could explode in an unprece­ .- ...... •...... -. dented political crisis, after the Sept. 6 elections. � iS�k �ish � IMF: more blood In late June, the IMF announced its decision to grant : like a C1iplomatr: • Argentina $2.1 billion in "new money," of which $660 mil­ • • • lion has been disbursed thus far. In addition, Argentina's • • commercial bank creditors are about to finalize details on a , . • $1.95 billion loan package. the first disbursement of which • • • is expected to come through in August. • • The government boasts that these loans are a sign of • • • • creditor "confidence" in Alfonsfn 's democracy. That is hard What sort of peo�e neeo to leam a foreign handsome library binder. Order either. or • language 88 quickly and effectively as pos· save 10% by ordering both: • 1 g / o 12 caas.tte , (17 hr.), �:�;: i � 0 V me I: ".Ie. a to believe since Argentina failed to comply with virtually • � r�� ;�: ��: � .... a d 35 • ::assigned1: to� U.S. � �� �: • embassies abroad, where 0 l�: . �sa."es bl. to converse fluently in ::�:. .!t���: �1 • every IMF guideline established for the second quarter of ��: ��� � ( 12 hr.), manual and 614·p. text. $1 20. • � ��n • leT reSIdents add sales tax .) 1987, in the categories of fiscal deficit, inflation, monetary . •  h • ..=::_ �m�= � � TO ORDER BY PHONE. PLEASE CALL Foreign Service Institute's ProgrammatiC 243- 234 issuance, and trade balance. The country is headed for well • TOLL FREE NU MBER: 1 «M>- 1 . • ' rican - • o �Yr: :k �� • :' �� ;: � S r I a n i over 100% inflation this year, if current trends continue. The�:: U.S. ; Departmentr:J� of State has spent � �� • = u� � : �: , r :, n� �h : • ou a d d ll d e ing thi �r e � � r: � :: � : : : � · � ..O � O ��S ':;' IOP · CO a ' money order-or charge to your credit card Because this year's trade balance is estimated to be no ! . b . t e m t e ective way to earn • Y ug (Am Ex, VISA, MasterCard, Diners) by en- • I �;:"a���� r own convenience and at cl08ing card number. expiration date, and • i more than $800 million, rather than the hoped-for $2.7 billion O I The course conSIsts of a series of cas- Y �: Servic. 'Mtltut.', Spant.h • set in the national budget, the governmenthas been forced to �� � � �:,:��i � � ��� gr::!.� • : ,:: ; : : i: : ;u�;��� • 1i8tening :and: repeating. By the end of the :�..::�?;,: �='::�::� dip into its reserves to service its $50 billion in foreign debt. • the fastest. e.siest, most painless way to • ���� y;��: \earning and speaking en- learn Spanish, return it and we'll refund • I n e • Available reserves reportedly are no more than $686 mil­ "'Ie COUrH tuma yow canene pi.,., � ��� �� ���������� � • jcrc ! :: g S also • � � - ��� . �S ��i� �� � � i�� �r � lion-enough for only two months of imports. • ::':r "m:a :=�-: ::�� y : : : o : : vZ: • • your own pace-testing yourself, correcting • For political reasons, the IMF waived Argentina's non­ err o u e 8 ��� �� �� � ��� Audio-Forum • �! ��� ; a ; ; ': rse • comes ,In two: Y I urnes, eec h:: s h'Ippe d· '" . Suite P234 compliance with second-quarter guidelines, and granted new I O On-the-Green. .... • "" funds. Banks have a certain stake in promoting Alfonsfn 's , ..W'WK'CAIJIn· g��\O:�3.�:a7 , .. • success. But, the Fund says, the Argentine President had better produce results. The agreement calls for raising inter­ •• ...... •...... •� est rates above existing levels of 15% monthly; reducing the fiscal deficit by increasing taxes and rates on public utilities, Wh en a guy who runs guns to Kh omeini looks and implementing a new package of measures for "structural downright patriotic compared to Congress and reform ," which will meet creditor demands for privatizing the media-you knowAm erica needs •.• the state sector, and opening up the economy to asset grab­ bing. The Peronist party's municipal council in Buenos Aires issued a document characterizing the government's econom­ ic authorities "as designers not of a sovereign policy, but as the Fund's ambassadors in Argentina." The Peronist-run General Confederation of Labor (CGT) is considering mass protest actions against these austerity measures; and the Ar­ gentine Industrial Union is expected to rebel against higher interest rates. But on July 20, Finance Minister Juan V. Sourrouille went on national television to announce further "reforms." He reportedthat the Treasury would assume the foreign debt of state-sector companies, but would no longer provide them with any financial assistance for their functioning. They would THE have to generate revenues to finance their activities, or be SUBSCRIBE bought up by private concerns, probably leaving tens of thou­ NE WFEDERALIST o $25 for 50 issues sands of state-sector employees jobless in the process. He 0 $15 for 25 issues Name explained that state sector companies in the area of petro­ ______Make checks Street chemicals would be the first targets of privatization, and that payable to ______City national transportation and airline companies would be der­ THE NEW ______State egulated in order to foster "competition." FEDERALIST ______Box 889, P.O. Phone �( � Leesburg, VA ______46 International 22075 Allow about four weeks for delivery of first issue, Reportfro m Bonn by RainerApel

A long-overdue look at the Red Army "There is no efficient defense of Some people in Germany have rediscovered the aggressive Europe without close cooperation and character of the Soviets' militarypoli cy . partnership with the United States, and its strong presence in Europe. That is why all tendencies toward unilateral­ ism or even isolationism in the United n the late summer and autumn of military conflict. " States must be fought with the same I1984, contributors to this magazine Because of that, Womer said, he rigor as those dangerous theses of a talked to military experts here, some doesn't like Gorbachov's term "com­ Europeanized defense. " of them ranking officials of the De­ mon home of all Europeans," which Womer's statements caused some fense Ministry . In most of the encoun­ implies the absence of the Americans very alarmed headlines in the West ters , which were intended to gather from the European continent. A Eu­ German media, and also in Moscow and compare facts on Soviet military rope "from the Atlantic to the Urals," and the United States. power,the experts disagreed with this often talked about these days, is not Then, on July 16, Vice-Admiral magazine's analysis of the Ogarkov possible as long as Soviet armaments Dieter Wellershoff, the Inspector­ Plan and the Red Army's unchanged policy still aims at surprise attack General of the West German Armed strategy of an annihilating, war-win­ against and victory over Western Eu­ Forces, created new waves when he ning attack. rope, and firstof all, he warned, West presented the "1987 Strategic Com­ Said a ranking officialof the Min­ Germany. parison" report to the press. istry of Defense: "I can agree with ev­ Because of that unchanged Soviet As Wellershoff remarked, he and erything you've just presented here. military policy, a "zero-zero option" many military officers believe that But you are not allowed to tell the leading toward total denuclearization Gorbachov's glasnost and perestroika public. " Why not? "If you tell the pub­ of defense in Central Europe would serve only one purpose-"to make the lic, you create panic, and that is more not findsupport in the Bonn govern­ Soviet military machine much more dangerous than the facts." ment, "even ifthat view is not liked in efficient." This policy, Wellershoff The official added a threatening other Westernca pitals," said Womer. said, can be documented with new fig­ remark, "Everybody trying to create He was clearly referring to new at­ ures on Soviet armaments. Compara­ such panic among the population tacks from the U.S. State Department, ble NATO armaments in Europe are would meet the firm opposition and charging that his Defense Ministry was in brackets: more than 50,000 tanks resistance of this government." a "source of constant obstruction of a [17,800] , 43,000 pieces of artillery From the summer of 1984 until Geneva arms-control settlement." [14,000] , 14,000 aircraft [12,000] , July 1987, this pact of officially de­ Womer added some very straight­ 2,265 helicopters and gunships [680] , creed silencehas predominated among forward reminders to the disengagers and 4.0 million men [2.2 million]. most ranking military experts. Fortu­ at the State Departmentand in the U.S. Wellershoffsaid this study, the first . nately, a change is now visible. Congress: "No serious American pol­ of its kind since summer 1984(!), was On July 13, Defense Minister itician would deny that the alliance made public three months before the Manfred Womer caused quite a stir with Europe is a pillar of the American "officialNA TO study due in Septem­ when he addressed an international world power position. The United ber," because it was desirable to "pro­ seminar on defense policy. "In spite States can't secure the opposite North vide to the already ongoing arms-con­ of all recent Soviet arms-control di­ Atlantic coast on their own. More than trol debate some basic facts on in­ plomacy," he said, "the Soviet armed that, the political, economic, cultural, creasedcapabilities of the Warsaw Pact forces have rearmed and modernized and also strategic connections have for in-depth attacks on a very large at full pace." Womer said there was grown so tight that an amputation scale." Admiral Wellershoff warned "full continuity" in Soviet armaments would cause the most severe harm to the American administration: "In spite policy since "at least the early 1970s, the American organism as well .... of the zero option policy, a nuclear when detente began." And, he added: Between the United States and West­ capability that can reach into Soviet "As before, Soviet strategy aims at ern Europe, there exists a strategic territory" should be kept at NATO's offensive operationson the territory of symbiosis that can be disbanded only front-line in the Federal Republic of the Federal Republic from the start of with damages for both sides. Germany.

EIR July 31, 1987 International 47 Northern Flank. by Goran Haglund

AIDS time bomb ignites in Sweden surgery, unless the patient explicitly Though a patient was operated on ten times, the 200hos pital refuses-contrary to current rules workers involved weren't told she had AIDS. stipulating testing only upon the pa­ tient's explicit request."If society does not take its responsibility, at least we have to," he stated, and called for uni­ versal mandatory testing. "I am pre­ he government's "human rights" tient, Dr. Goran Jurell, said that had pared to be sued to find out where the policyT on AIDS was all but shattered he known the patient was AIDS-in­ line will be drawn." on July 6, as Swedish newspaper read­ fected, he wouldn't even have oper­ National media response varied ers had their morning coffeego down ated, as a person whose immunologi­ from "human rights" apologies to calls the wrong way, reading the gory de­ cal system is impaired cannot pull for stronger measures. The liberal tails of the lethal danger to which sur­ through such extensive surgery. Dagens Nyheter wrote on July 8 that geons and nurses had been exposed by "Maybe the patient died of AIDS. "testing must not be conducted so rou­ not being told that a patient was AIDS We don't know," Jurell said. "The tinely that the tested is deprived of the infected. worst thing is that the infection ward chance to decide for himself. A person A 60-year-old woman, undergo­ of the Danderyd Hospital, which de­ suspecting that he is AIDS infected, ing surgery for tumors, was AIDS­ tected the AIDS infection, didn't tell may have legitimate reasons fo r not infected several years ago. This was us. Especially as they knew very well wanting his suspicions confirmed." detected by one Stockholm hospital, that the operation would occur." To­ The next day, the conservative but the doctors' professional secrecy day, under the law "protecting" AIDS Svenska Dagbladet attacked Dagens prevented the information from reach­ patients, a doctor detecting an AIDS Ny heter, calling for mandatory test­ ing a second Stockholm hospital, infection can only appeal to the patient ing, and pointing out that AIDS is not where the patient was undergoing sur­ to voluntarily inform doctors at other of concern only to those already in­ gery. hospitals he or she might visit. fected. Dagens Ny heter counter-at­ The surgeons at the second hospi­ Jurell called for testing of every­ tacked, editorializing on July 11 that tal, Karolinska, learned about the one who is to undergo surgery, and for the conservative daily supports the AIDS infection only after the patient treating anybody who refuses as if he AIDS policy of LaRouche! After had died. When informed about the or she were AIDS infected, as well as complaining that Svenska Dagbladet patient's death, a relative revealed that for hospitals to exchange information called for universal mandatory test­ the patient had been AIDS-infected about who is infected. ing, the liberal daily charged, "It is an through a blood transfusion several The incident provoked a strong re­ argument supported in the U.S. al­ years ago. Since then, she had under­ vival of the AIDS debate. Inger Ohls­ most exclusively by Lyndon La­ gone surgery more than 10 times, and son, chairwoman of the Hospital Em­ Rouche." had been treated at both the intensive ployees' Trade Union, called for a Local press covered an anti-AIDS care and plastic surgery wards of the central register of AIDS infected peo­ campaign run by the Anti-Drug Coa­ Karolinska Hospital. ple, as it's impractical to test all pa­ lition on the Baltic island of Gotland, During the last two operations tients just before an operation. Prof. whose usual 50,000 inhabitants triple alone, and the subsequent care, over Hans Wigzell at the Karolinska Insti­ in the summer. Under the headline, 200 persons were involved, all of tutet, a government AIDS policy­ "The ADC Wants Mandatory Test­ whom now have to be tested. The pa­ maker, said it's a "pity" the patient ing," Gotlands Tidningar wrote, tient lost lots of blood during sur­ didn't say she was AIDS infected, but "Poor-Sweden could eradicate TB , but gery-oneoperation lasted 15 hours­ this is something we'll have to live Welfare-Sweden thinks it can't afford and this blood was not treated as con­ (or, die?) with. The only alternative, to stop AIDS." Gotlands Allehanda taminated. One nurse, taking a blood Wigzell claimed, is a totally regis­ quoted ADC chairman VIf Sandmark, sample from the patient, inadvertently tered society. charging that "the government lies to pricked herself with the needle. Oth­ Dr. Jan Wersall, chief of the ear, save money ....If we don't fightto ers had skin contact with the patient's nose, and throat ward at the Karolin­ put up the money, Sweden will adopt blood. ska Hospital, announced he is routine­ a new Nazi euthanasia policy already The surgeon in charge of the pa- ly testing everybody who will undergo on its way in other countries."

48 International EIR July 31, 1987 Rio Report by Silvia Palacios

Kremlin blesses Brazil's 'theolibbers' niversary, in 1988, ofthe introduction Brazil's theologians of 'liberation' trek to Moscow to pay of Christianity to old Russia, and the homage to the cult of the Third Rome. 70 years ofthe Bolshevik revolution." In a July I 0 interview published by the Novosti press agency, Leonar­ do Boff said that the finalob jective of his trip was to get to know the Russian n one of the most serious challenges was not accidental, therefore, that Orthodox Church, "previously con­ toIPope John Paul II's authority to date, Mexican theologian Miguel Concha sidered conservative and closed." He prominent Ibero-American leaders of contemptuously dismissed as "mod­ said that, after gettingto know the Or­ the so-called "theology of liberation" erate ," the Vatican debt document is­ thodox clergy, "a totally different have laid out the welcome mat to the sued this year by the Justitia et Pax reality" was revealed to him. imperial plans of Gorbachov and the commission, while attacking the sov­ In his challenge to Pope John Paul Russian Orthodox Church. As a result ereign solution adopted by the Alan II, Bofflied that there is religious free­ of the officialopening between the li b­ Garcia governmentof Peru. dom in Russia, and that "socialism and erationists and Moscow, terrorist Said Concha, "The Peruvian com­ religion are not incompatible." He then groups under Soviet sponsorship rades have informed us that Alan Gar­ insisted that he found in the Soviet across the continent are now assured cia lies and has paid more than 35% of Union "signs of the City of God," and open access to an important faction of his exports in interest payments on the that the Soviets were promoting "a the Ibero-American Catholic Church. debt." cause in which we are joined." On July 12, the Seventh Interna­ However, the pace of the meeting In truth, the sympathies of Boff tional Solidarity Encounter began in was set from Moscow. Leonardo Boff, and company with the Russian Ortho­ Rio de Janeiro, presided over by the who inaugurated the event, and Father dox Church-which maintains that Brazilian theologians Leonardo Boff Betto had just returned from a trip to Holy Mother Russia will be the "Third and Father Betto, Bishop Mauro Mo­ the Soviet Union, on invitation of the and Final Rome" -are not new, but relli, Mexico's former archbishop of Soviet Communist Party and the Or­ go at least as far back as Boff's sec­ Cuernavaca Sergio Mendez Arceo, thodox Church, during which they ef­ ond-to-last book, The Trinity, Society and Mexican theologian Miguel Con­ fectively formalized their sympathies and Liberation, currently being ex­ cha. Their slogans read: "Only the for the Russian war against Western amined by the Vatican's Congrega­ cowards yield, men die on their feet" Christian culture, sympathies fully tion for the Doctrine of the Faith. and "We revolutionaries will be like shared by Mendez Arceo and Miguel With respect to his concept of the Che." Nearly 300 leaders of the lib­ Concha. Trinity, Boff used an interview pub­ erationists' comunidades de base The trip of the Brazilian theologi­ lished by the Mexican daily La 10r­ gathered from Central America, Bra­ ans was organized by the Soviet Cul­ nada , in December of last year, to vi­ zil, Peru, Colombia, Mexico, and Ar­ ture Ministry, under Konstantin Kar­ olently attack the concept of the Fil­ gentina, together with U.S. and Eu­ chev, which according to Father Betto ioque. It was precisely the Chri stian ropean representatives, to discuss is the governmentagency in charge of concept of the Filioque with which the plans for the "Popular Church" over promoting an alliance between the lib­ Russian Orthodox Church disagreed, the next two years, following the eration theologists and the Russian and around which issue the latter split gnostic examples of Sandinism in Orthodox Church. with the Western Church following the Nicaragua, the Salvadoran guerrillas, On June 23, on the eve ofthat trip, Council of Florence in the 15th cen­ and the indigenous movement ofGua­ Father Betto-one of Fidel Castro's tury. temala. favorite mouthpieces-declared that Boff's gnostic interpretation of This well-planned movement-a Gorbachov "is interested in recover­ "God as mother" is, no doubt, warmly product of the "Marxist-Christian dia­ ing the spirituality of the Soviet Union, embraced by the modem-day zealots logue" -seeks to propagandize Fidel not in the religious sense as we under­ of Holy Mother Russia. An equally Castro's proposed solution to the con­ stand it in the West, but in the ethical gnostic interpretation has been offered tinent's foreign debt crisis, which en­ plane." He added, "The visit had two by the Sandinistas, who present Christ visions the downfall of the West. It goals: preparation of the 1 ,OOOth an- in the guise of a guerrilla fighter.

ElK July 31, 1987 International 49 • Dateline Mexico by Hugo LOpez Ochoa

A 'green' presidential campaign campaign is financed and coordinated Ecologists fa il to halt Mexico's nuclear project, but their from the offices of Camacho Solis, political godfathers are still in the running. Budget and Planning Minister Salinas de Gortari, and Minister of Agricul­ ture and Water Resources Eduardo Pesqueira. All of them are key figures in the Mexican branch of the Trilateral exico's greenies suffered a blow An editorial in the same edition Commission, the so-called Tepozthin JulyM 18, when their so-called "Victory panic-mongered that an explosion at Center. March" in the state of Veracruz, in­ Laguna Verde would kill 100,000 in During the month of July, for ex­ tended to halt the imminent inaugura­ the first year and injure another ample, Ecologfa editor Gabriel Quad­ tion of Mexico's first nuclear plant at 600,000, long-term cancer victims ri de la Torre-also an "adviser" to Laguna Verde, drew a mere 200 sup­ would number 40,000, and economic the rabid monetarist head of the Bank porters from across the country. De­ damage would cost more than $300 of Mexico Miguel Mancera Aguayo­ spite millions of pesos invested in a billion. Entire pages of photographs will be traveling to Washington "to publicity campaign to try to bamboo­ showing the greenie protests against get economic support from the non­ zle the population of Veracruz into Laguna Verde graced the rest of the government private agencies." The shutting the plant down, the greenie edition. The greenies themselves have costs of the trip will be picked up by march was a wash-out. insisted that once operative , Laguna Camacho Solis, Salinas de Gortari, and The "Victory March" was timed Verde would probably become a tar­ Eduardo Pesqueira, according to a to intersect a mUltimillion-peso pub­ get for terrorists. collaborator of Quadri. The Califor­ lic-relations campaign mounted by In­ And with it all, the march failed. nia-based Sierra Club is sponsoring terior Minister Bartlett and Urban De­ Camacho Solis's declarations were Quadri's stay in Washington. He will velopment and Ecology (SEDUE) taken off the air come the evening be meeting with World Bank officials. Minister Camacho Solis, both rabid news, and the social communications According to information received by ecologists. This was to have been the bureau of SEDUE blocked publica­ EIR , SEDUE allocates $700,000 a "final phase" in the plan to annihilate tion of the statement the next day, with year to "promote citizen participa­ the Mexican nuclear project. On the explanations that the minister's words tion," i.e.; for the green movement. afternoon of July 18, radio and tele­ had been "misintepreted." One of those most responsible for vision news shows were repeatedly Weeks before the march, thou­ the publicity campaign against La­ carrying a statement by Camacho So­ sands of leaflets had been issued by guna Verde is presidential hopeful lis, that "the reconversion of Laguna the National Committee in Defense of Manuel Bartlett, who in July of 1986, Verde into a gas-electric plant is not Nuclear Energy, made up of industri­ prevented the creation of an inter-sec­ being discarded." The electrical alists, professionals, and students from torial group within the Mexican gov­ workers' union, SUTERM, has 'insist­ throughout the country. Titled, "A nu­ ernment to run an educational cam­ ed that the cost to convert the virtually clear plant is not an atomic bomb, and paign on nuclear energy. A top Bar­ completed nuclear plant to a thermal Laguna Verde is not Chernobyl," the tlett staffer, Ignacio Morales Lechu­ one would be more than the cost of leaflets were even distributed to the ga, has been accused by the general constructing one from scratch. greenie protesters. secretary of SUTERM of financingthe This has nonetheless been the in­ And in the days just prior to the ecologists along with former Veracruz sistent demand of the greenies, who march, the national weekly newspa­ governorAgu stin Acosta Lagunes. allege that no matter how much tech­ perSolidaridad lnternacional, charged With the choice of the PRI presi­ nical security is provided, sooner or that the ecologists' campaign to link dential candidate just months away, later Laguna Verde would become an­ Laguna Verde to a "corrupt govern­ the warning of greeniecoordinator Jose other Chernobyl. The same day of the ment nucleocracy" was sheer hypoc­ Arias Chavez that activation of the re­ "Victory March," the leading Mexi­ risy. The newspaper observed that, actors "would mean political suicide can daily Excelsior carried afront-page according to the confessions of one of for the officials who decide on it" is article railing against the inauguration the editors of the greenie magazine clearly proving a factor in the presi­ of the plant. Ecologfa, the anti-Laguna Verde dential succession fight.

50 International EIR July 31, 1987 Andean Report by Carlos Mendez

A new front against Garcia Garcia adopt the "Colombian model" The narco-warfare against the President of Peru has moved onto of accepting dollars without asking the financial fr ont. their origin, through a so-called "sin­ ister window." One day later, La Re­ publica wrote that "sources linked to the government" revealed that the au­ thorities were considering the possi­ bility of creating "free zones" in the country, to attract foreign investment. The mouthpieces of the "free ex­ change" advocates insist that there will n July 14, the dollar was trading has complicated the stability of the inti be a large devaluation, with which ru­ onO the informal market of Ocona with respect to the dollar. ...Initial­ mor they are sowing distrust and in­ Street, in Lima, at 38 intis. The next ly, it was thought that Ocona repre­ citing the re-dollarization of the Pe­ day, it was up to 40.9 intis. On July sented one or two percent of our ex­ ruvian economy. On July 12, in a tel­ 17, the dollar was quoted at 45 intis, ports, but now we are talking about evised debate with Planning Minister representing an unprecedented rise of nearly a third," said Tantalean. Asked Tantalean, former central bank head 28.55% in three days. if the government was considering Manuel Moreyra Loredo argued that Although observers assert that the shutting down Ocona, Tantalean re­ the government had decreed a deval­ increase is due to an excessive demand plied, "this is under study. Ocona is uation that bordered on 45%, and due to paralysis of the domestic bank­ like the tip of the iceberg, which means added that it would not be unusual to ing system, the truth is rather that the there is something much larger." see the Ocona "freemarket" dollar rise rise in the dollar reflects a massive One week earlier, on July 6, in­ to 45 intis. flight capital operation currently un­ dependent economist Gonzalo Salazar Tantalean responded furiously that der way, in cahoots with the drug-traf­ Leon said that $4 billion in "coca-dol­ Moreyra was "a sower of suspicions, fickers, who provide the dollars. The lars" had entered Peru so far this year. who for some time . . . as been trying orchestrated flight capital joins the of­ Salazar reviewed the various kinds of to create mistrust among the business­ fensive of Soviet narco-terrorism and dollars-the officialdollar, the finan­ men, making predictions that don't the Peruvian agents of "Project De­ cial dollar, the free dollar. "Finally, come to pass." Finance Minister Gus­ mocracy ," against the nationalist Gar­ there is the coca-dollar, which is quot­ tavo Saberbein also responded to cia government. ing in Upper Huallaga at 20-23 intis, Moreyra, denying the devaluation and It is no accident that this offensive and in Pucalpa can even be gotten at observing that "the liberal economists of the narco-dollar emerged only days 17 intis. . . ." Clearly, those "coca­ don't like either planning or economic after President Garcia went on nation­ dollars" are going right out of Peru programming; they leave aU to the free al television to denounce the Ocona again, through Ocona Street. market, as the IMF recommends. But black market in dollars. On July 5, in Despite this, former prime minis­ we have known these policies. They a message to the nation on the new ter and finance minister Luis Alva are what we have been subjected to economic measures taken by his gov­ Castro unblushingly declared July 17 . . . in the worst crisis of the repub­ ernment following a dramatic cabinet that the rise of the dollar on the Ocona lie's history ." reshuffle, President Garcia said that black market "responds to mere spec­ Garcia has responded to the finan­ alongside the legal dollars, "there are ulation, and the transactions carried cial warfare with characteristic cultur­ other dollars that stem in large part out there have no greater signifi­ al optimism. Pledging that the coun­ from the profitsof the drug trade, and cance." try's economic growth will be prem­ are sold in exchange houses and even Since President Garcia denounced ised on reviving consumer demand, in street sales. " the Ocona market, the money laun­ thereby revving up production in fac­ On July 13, Garcia ally and Plan­ derers and their political godfathers tories currently working at half-capac­ ning Minister Javier Tantalean was have been very active. The daily La ity, Garcia insisted that "This concept more specific, charging that at least $1 Republica published an extensive re­ is important not only for Peru, but for billion in narco-dollars had entered the port on the Peruvian economy July 7, Latin America and the world of poor Peruvian economy, "and this is what which concluded with the proposal that nations ...."

ElK July 31, 1987 International 51 • International Intelligence

appropriately" on the list of 16 "war-crimi­ U.S. Eastern Establishment, like George Brazilian President nals" which President Andrei Gromyko Ball, who believe that Moscow is "desper­ seeks to dump his party handed over to German President Richard ately" trying to extricate itself from its Af­ von Weizsacker in Moscow on July 8. ghanistan "imbroglio." That was the subject Gromyko shocked the German delega­ of a June 19 commentary by Ball in the New Brazilian President Jose Sarney is striving tion at a diplomatic reception by handing York Times. Defense Secretary Caspar to clear the way for a new agreement with Weizsacker the list, as a precondition for Weinberger, in a letter to the editor of the foreign bankers by splitting the Brazilian further development of German-Soviet "de­ Times published on July 22, sharply criti­ Democratic Movement Party (PMDB). tente." West Germany's constitution for­ cized Ball's stand . "I am at a loss to under­ which elected him in 1984. Although Sar­ bids the extradition of its citizens abroad . stand Mr. Ball's sympathy for the Soviet ney's faction of the party was able to prevent Mrs . Koleznikova demanded that "all situation in Afghanistan," he wrote . "If the a frontal assault on Finance Minister Luiz war-criminals" be put on trial , and attacked Russians want to leave Afghanistan so 'des­ Carlos Bresser Pereira's monetarist policies the alleged lack of will in West Germany to perately, ' what is holding them up?" at the July 17-18 PMDB convention, the "use detailed documentation provided by the partyreiterated its commitment to increased Soviet Union" for about 40 cases in recent real wages, agrarian reform , limits on debt years . for equity conversion, and the protection of German socialist sees The U.S. Justice Department responded national sovereignty from International to a similar Soviet demand by handing over 'new' Red Army Monetary Fund (IMF) surveillance . Karl Linnas, a naturalized U.S. citizen, to Bankers are demanding a clear political face execution in the U.S.S.R. earlier this The defense policy spokesman of the West mandate for austerity before they renego­ year. Linnas had been tried in absentia in German Social Democratic Party has re­ tiate Brazil's $1 10 billion debt. Sarney can­ the Soviet Union, and his case was never turned from Moscow with the announce­ not provide that. But he made a gesture of even heard by the U.S. judicial system. The ment that there is a "new Red Army" only good faith by putting Fernao Bracher, the Justice Department simply took Moscow's interested in defense , not offense. central bank president fired by former fi­ word for it, that he was gUilty . Andreas von Buelow, after spending a nance minister Dilson Funaro for opposing week in Moscow, stated in Bonn July 22 his Feb . 20 debt moratorium, on his foreign that he is "definitely convinced that the So­ debt negotiating commission . viet military leadership has broken with the Samey is trying to form a new govern­ Is Moscow so anxious to offensive doctrine of Marshal Sokolovski ." ment, based on the opportunists who sup­ Von Buelow's "new Red Army" re­ ported the military government until it was get out of Afghanistan? hearses "defensive defense ," according to a clear the PMDB would defeat it, and on briefing he received from Gen . Nikolai various agents of influence of the U.S. se­ Soviet withdrawal of troops from Afghani­ Chervov. Von Buelow was also told that cret government networks known as "Proj­ stan can only begin when all "outside "Soviet troops no longer rehearse surprise ect Democracy." aggression" has haIted and firm guarantees attacks on West German target zones," but Despite Samey's capitulation to the supplied against future "aggression," said only "operations for defense on Warsaw Pact bankers , the traditional PMDB and Funaro Afghan leader Najibullah at a news confer­ territory . " are fighting to write the party's nationalist ence in Moscow July 21 , in an amazing dis­ program into Brazil's new constitution. play of chutzpah . Najibullah emphasized that the key to a solution lies in the Geneva talks Japan signs SDI under U.N. mediation between Afghanistan and Pakistan . accord with U. S. Soviets pressure Bonn: During the rest of his two-hour press conference, which followed lengthy talks U. S. Defense Secretary Caspar Weinberger Give us 'war criminals' with Mikhail Gorbachov, Najibullah elab­ and Japanese Ambassador to Washington orated on promises of a cosmetic "People 's Matsunaga signed an agreement on July 22, The Soviet Union is intensifying its pressure Democracy" style of "coalition govern­ allowingJapan to participate in the Strategic on the West German government to prose­ ment ." The opposition could receive "up to Defense Initiative. This makes Japan the fifth cute or extradite "war criminals still living eight" cabinet posts, plus the post of deputy nation to join the program, after Great Brit­ in freedom." According to a report by the prime minister and deputy chairman of the ain, West Germany , Italy, and Israel . Soviet news agency Novosti on July 23 , Su­ Revolutionary Council. U.S. administration officials said that preme Soviet Attorney Natalya Kolezniko­ Najibullah's statements might be ex­ the agreement will serve as a precedent for va declared that Bonn has "not yet acted pected to discourage those members of the future collaboration in military research be-

52 International EIR July 31, 1987 Briefly

• THE JOURNAL of the All-India Congress Committee (Congress Par­ ty-I), Congress Varnika. features a tween the two nations, and stressed that Ja­ entice the West European allies in the long two-page poem commemorating the pan has much to offer to developing a stra­ run , to seek neutrality as the way to sur­ death of Indira Gandhi, written by tegic defense, especially in the areas of ad­ vive-although their current governments long-term political associate of Lyn­ vanced sensor technologies, optics, and sig­ would deny that." don LaRouche, Kenneth Kronberg. nal processors. "American troops are the most visible The Russian newspaper Sovetskaya symbol of American engagement in Europe . COLOMBIAN GUERRILLAS Rossiya attacked the move forthwith, de­ They are an unmistaken signal that Soviet • held a "summit" meeting on July 19 scribing the Japanese decision to take part attempts to intimidate or coerce will not suc­ in Santander, Colombia, according in the SOl research as "Japan's political Hi­ ceed. The Soviets would draw false conclu­ to a broadcast by the clandestine roshima." sions from a withdrawal of U.S. troops . It guerrilla radio station monitored by would reduce the credibility of NATO's El Mundo in Caracas. Participants in­ strategy of deterrence. The pull-out of cluded the chiefs of the narco-terror­ 100,000 soldiers, for example, would have General proposes joint ist armies of Colombia, and others much bigger military consequences than the from Nicaragua and Cuba. Franco-German army unit figure as such would lead one to be­ lieve .... AN AIDS VICTIM was lynched A French-German "Army on the Rhine" has "The withdrawal of U.S. troops from • in Rio de Janeiro July 21, according beenproposed by Gen. (ret.) Etienne Copel, Europe would undermine the strength and to a report in the West German daily formerly in charge of nuclear target plan­ cohesion of NATO, reduce its capacity to Bild Zeitung. One hundred people ning at the staff of the French Air Force . deter and increasethe chance that once again, watched without intervening as he was In the July issue of the newsletter Active the United States would have to shed the shot to death by three men, who put Defense, Copel wrote that rather than a joint blood of its soldiers, to convince the aggres­ a sign on the body: "I do not spread combat brigade only, France and West Ger­ sors that our engagement for peaceand free­ AIDS anymore. I was one of the sex­ many should build a real army group, con­ dom in Europe is still unalterably strong ." sisting of the German Home Army , with up ual criminals, who made this area un­ to400,000 men , strong French troop contin­ safe." gents, and air units of both nations. German Split looms in aircraft could even be stationed on French • SWISS NAZI BANKER Fran­ territory , and the army group would operate India 's Congress Party c;ois Genoud was exposed by the under France's nuclear umbrella. weekly Evenement du Jeudi on July In related news, the Soviet daily Izvestia On July 18, Indian Prime Minister Rajiv 23 for his involvement in the Geneva­ on July 22 attacked plans for "a Bonn-Paris Gandhi expelled three top leaders of the based Iranian terrorist network. Gen­ military axis," charging that this was the Congress Party (I): former Minister of Inter­ oud, it says, "who was ...the right­ "seed-crystal for a European NATO ." Izves­ nal Security Arun Nehru (a cousin of Ra­ hand man of the Nazi dignitaries be­ tia warned France against "rejoining the jiv's); Arin Mohammad Khan, an anti-fun­ fore giving his experience to the Pal­ military integration of NATO" and thereby damentalist Muslim; and V.C. Shulka. The estinian networks, also helped the changing the military balance between charge was "anti-party activities." funding mechanism of the Khomei­ NATO and Warsaw Pact in Europe . In protest against the expUlsions, V.P. niac networks, by payment of com­ Singh, former defense and financemini ster, missions in the weapons' market." resigned from the party . Singh has a strong General Rogers warns political base in Uttar Pradesh, the power • THE PERU DAILY La Repub­ base for Delhi politics, signifying that a se­ lica called for legalization of drugs in of u. s. disengagement rious split in the Congress Party, isolating an editorial on July 13. Since the Rajiv Gandhi, may now occur. United States won't fight drug con­ Former NATO SupremeCommander Gen. Singh and other critics arereported to be sumption athome or give enough anti­ Bernard Rogers warned in a commentary in planning a series of rallies across India to drug aid abroad, "the sensible ap­ the German weekly Welt am Sonntag July press for Gandhi's resignation. Singh says proach is to eliminate prohibition" of 19, that a U.S. disengagement of military he has no immediate plans to start a new drugs, it argues. La Republica, which forces from Europe would "create a feeling party , although he has not ruled out a split is owned by a senator close to Inter­ of hopelessness that could lead to reliance within the Congress. At least 23 state-level national Monetary Fund circle, re­ on and concessions to the East. " legislators from the Congress Party are re­ cently attacked Lyndon LaRouche's "I do think . . ." he said, "that the loss ported to have extended their support to AIDS policy. of confidence in American support would Singh.

EIR July 31, 1987 International 53 �ITillNational

Wal sh launches next phase of Iran-Contra probe

by Paul Goldstein

By the time that the congressional cover-up hearings end in to begin impeachment proceedings, by refusing to testify that the second week of August, Independent Counsel Judge the President knew about the arms-sales scheme. In effect, Lawrence Walsh's investigation will become the center of Poindexter, representing the viewpoint of the traditional mil­ the political faction fight now unfolding within the elites in itary institutions, defended the presidency, but leftthe door the United States. open to the interpretation that the President could have known, Up until this point, the factional struggle among the var­ and approved, the illegal scheme. ious centers of power within the u.s. establishment has re­ This episode was fo llowed immediately by the announce­ sulted in some changes in the policy-making apparatus, i.e., ment that U.S. District Court Judge William Sessions would the Persian Gulf policy and keeping the "Israeli Lobby" at be the next director of the Federal Bureau of Investigation. arm's length. The naming of Sessions, a Texas federal judge originally However, these changes are described by some as a slow helped to become U.S. Attorney there by ex-Sen. John Tow­ "step by step" transfer of the center of power from the dom­ er, signals another tilt away from the liberal establishment's inant Eastern liberal establishment apparatus to the tradition­ grip on the Justice Department. Whether Sessions will clean al, constitutionally defined policy-making centers-without up the "secret government" apparatus deeply embedded in fundamentally challenging the content of policy now domi­ the FBI and DOl will ultimately be determined by the Walsh nating Reagan administration decisions on the economy and investigation. East -West relations. The signal that the shift away from the liberal establish­ DoJ must produce notebooks ment's complete dominance was occurring, was the failure The Walsh investigation is sending shock waves into the of the Congress to "Watergate and impeach" the President heart of the liberal establishment's secret government appa­ and thereby destroy the presidency as a constitutional power. ratus. The latest developments center around the Judge's An ironic, but telling counterpoint to Congress's intention to decision to subpoena all Department of Justice officials' destroy the President came with a relatively overlooked in­ memos and notebooks concerning their involvement in the cident duringthe testimony of former National Security Ad­ cover-up in the Iran-Contra Affair. Leading DOJ officials viser Admiral John Poindexter: Poindexter's attack on Pres­ and FBI agents are reportedly scrambling all over the place ident Reagan. to findout what the Walsh group is up to. At present he has Poindexter stated that he believed that the President would approximately 300 individuals as "targets" and according to have approved the diversion of funds to the Contras. This well-informed sources, about 30-50 of these are expected to statement, of course, stirred an immediate White House de­ be indicted. nunciation of this point made by Poindexter. However, Poin­ Moreover, these sources report that Judge Walsh is going dexter did not provide Congress the "smoking gun" needed after the infamous Hashemi file of DOJ officials, concerning

54 National EIR July 31, 1987 the case of Iranian arms merchant Cyrus Hashemi, who began tions. Casey's antics within the intelligence community pro­ the secret funneling of arms to Khomeini back under the duced deep resentment against real intelligence evaluations, Jimmy Carter regime. Hashemi was exposed by EIR in 1980 in favor of doctoring or prejudicing intelligence on behalf of along with his Carter administration cohorts. High level a policy. administration officialstried to use "national security" as a Yet, the President is still committed to repeating the same pretext for withholding information in a libel suit Hashemi errors as Bill Casey concerning the Contra operation. It is brought against this publication, a suit that was eventually another point of irony, that most of the revelations concerning dismissed. the Contra-drug connections are coming from the CIA itself. The Hashemi file is key to the cover-up being conducted Most of the leaks to Newsweek magazine on this subject, by Congress. At the core of the Hashemi case is the fact that according to informed sources, are coming from the Agency. the Carter administration's "arms-for-hostages" policy and However, the Shackley linked forces inside the intelli­ its support for the overthrow of the Shah was continued by gence community are fighting back to prevent the removal of the Reagan administration. If Walsh's investigation goes in their forces. The normal means of fighting back will be to this direction, then the very foundation of the "secret govern­ sabotage any new initiative coming out of CIA director Judge ment" is in jeopardy. Webster's office. By sabotaging these initiatives, the oppos­ One of the chief targets of Walsh's investigation is the ing faction hopes to gain some leverage over the decisions number-two man in the FBI, Oliver "Buck" Revell. Revell concerning who gets ousted. Demonstrating bureaucratic is not only in the middle in the Iran-Contra cover-up, but has muscle to prevent a policy from being implemented is as been instrumental in protecting the "secret government"ap­ important as carrying one out. paratus within the administration and the intelligence com­ According to U.S. intelligence sources, the critical ques­ munity. Walsh is seeking to connect the "private intelli­ tion being discussed within the "corridors of power" is the gence" operations in diverting funds to the Contras to the rescinding of Executive Order 12333 and reforming the no­ organized cocaine apparatus. Key figures in the Department tion of National Intelligence Mission from the standpoint of ofJustice, such as Criminal Justice chief William Weld, were presidential candidate Lyndon H. LaRouche's proposal, at the center of the cover-up. which was published as the Feature in the last two issues of EIR . This fight may not be resolved until the fall when the The Casey legacy presidential campaign gets into full swing, and it is expected Probably the most significant center of the factional strug­ that Vice President Bush's intelligence community connec­ gle among U.S. policy elites is the direction of the U.S. tions to the Contra affair will come out. This situation is not intelligence community. The mid-July leak that CIA Deputy only focused upon Bush's national security adviser, Donald Director of Operations, Claire George, and Counter-Terror­ Gregg, but those former and present CIA officialswho com­ ism Chief Duane (Dewey) Claridge, would be removed, prised themselves as the Bush braintrust which former direc­ caused tremendous trepidation among the operatives within tor Casey came to rely upon for his "special operations." the intelligence community tied to former Director of Central In this context, most ofthe CIA personnel who have been Intelligence William Casey. involved in the Contra and Iran policy fiasco were former According to U.S. intelligence sources, Casey tried to officialsoperating in Southeast Asia. The present CIA Chief run the intelligence community the way Allen Dulles, the of Station in Honduras was formerly a deputy to Shackley first director of the CIA, did, through "vest-pocket" opera­ associate Thomas Clines. Clines was chief of station at Site tions, privately funded. Professional operatives inside the 98 during the secret war in Laos. Site 98 was in Long Chan. community were shocked at the rank amateurism of the meth­ Clines is presently under investigation for his involvement od ofoperations under Casey. This was especially true con­ with the diversion of funds under Gen. Richard Secord and cerning the Secord-Hakim network whose real control was Albert Hakim which came to light in the congressional hear­ Theodore G. Shackley-the former Deputy Director of Op­ ings. erations. What could ultimately decide the outcome of the intelli­ Casey turnedto Shackley when the bureaucratic struggles gence community's factional warfare is the direction of Judge in the CIA became an impediment to the President's Contra Walsh's indictments. If Walsh carriesthrough on going after fixation. In fact, to cover the President's fixation on Central the inner core of the "secret government-Project Democracy" America, the NSC Project Democracy special operations apparatus, the whole house of cards could fall, and then, the capability went into motion against the Philippines, Haiti, Eastern liberal establishment's ability to contain the efforts Panama, South Korea, and Taiwan as a partial means for of the forces centered around Democratic presidential can­ covering for the President's obsessions. didate Lyndon LaRouche will fail. Then, pro-LaRoucheforces The Casey method of dealing with "covert operations" inside the intelligence community will be able to carry out broughtthe entire Israeli intelligence apparatus into the Con­ the most significant transformation of U.S. policy since the tra operation and related arms brokering intelligence opera- American Revolution.

EIR July 31, 1987 National 55 Anti-AIDS ballot initiative gets under way in California

by Marla Minnicino

Brian Lantz and Khushro Ghandhi, proponents of Proposi­ cable diseases and conditions in the state, such as German tion 64,the 1986 CaliforniaState ballot measure demanding measles, typhUS, tuberculosis, syphilis, plague, etc. Once basic public health measures against AIDS that was defeated AIDS, and the condition of being an HTLV-IlI or other at the polls last November, announced July 14 that petitioning AIDS-causing viral carrier. are placed on this list, all the for a new AIDS ballot initiative-differing only slightly from existing public health statutes and codes which presently the original-has begun in California. apply to every other communicable disease, will apply to Only eight months after Prop. 64,which became widely AIDS and its carrier forme s), as well. known as the "LaRouche AIDS initiative," was defeated, In a recent interview, Lantz and Ghandhi emphasized Lantz and Ghandhi say the AIDS crisis has reached a point that, despite sensational characterizations and interpretations that citizens will demand basic public health measures to of the initiative by opponents and the media. the bill merely combat the disease . applies existing , proven , traditional public health measures The 1986 initiative attracted international attention, in­ to AIDS. The necessary laws and codes are already on the cluding opposition from the World Health Organization and books, laws and codes which have been applied "day-in and U.S. Surgeon General C. Everett Koop. In recent interviews, day-out for years." These procedures are applied "every day, proponents Ghandhi and Lantz charged that Proposition 64 throughout the state , and most other states, to at least 58 had been defeated by a "campaign of lies." "We've been different communicable diseases." This bill, say its propo­ proven right. Our opponents have been proven dead wrong," nents, "returns our state to a traditional public health policy they said. "If we wait much longer, there are not going to be respecting AIDS." many people left" to fightthe war against AIDS. Mr. Ghandhi is a Los Angeles County Democratic Party The new initiative, filed in Sacramento May 28, received Central Committee member. Mr. Lantz, of Livermore. was authorization from the California Attorney General on July a candidate for the Democratic nomination for U.S. Senate 10. A committee, Prevent AIDS Now In California (PAN­ in the 1986 primary elections. IC), has been formed to organize support for the new ballot If the new initiative is passed. the most prominent pro­ initiative effort, and volunteers have already begun to collect visions of the existing health law which would now apply to the necessary signatures. Approximately 409,000 valid sig­ AIDS are: I) All cases of the disease must be reported ; 2) No natures are required to qualify the initiative for the 1988 one infected with the virus may be present in a public or ballot. private school, whether as teacher, student or employee; 3) The wording of the new AIDS initiative is almost exactly No one with the virus may be involved in commercial food that of Proposition 64, except for a minor wording change handling; 4) It is a serious misdemeanor to knowingly spread which extends the definition of an "AIDS virus carrier," to the disease. 5) The Department of Health Services has the persons infected with any viral agent which causes AIDS, power and obligation. to test as much as may be necessary to besides the well-known HTL V -Ill (HIV-I) virus. This is nec­ halt the spread of the disease; 6) The Department of Health essary , say its proponents, since recent medical work has Services has the power and obligation to apply measures of identifiedforms of the AIDS virus differing from HTL V -1lI, quarantine, as they deem necessary to halt the spread of the and the rapid rate of mutations of these viruses render highly disease. probable the genesis of still more variations of the AIDS In a press release, Lantz and Ghandhi point out that all virus. these measures are already applied to every communicable The AIDS Initiative Statute defines AIDSas "infectious disease by law. Their effectiveness is "proven by decades of and communicable," and the condition of being a carrier of experience. Their constitutionality is beyond question. The the HTL V -1lI (HIV) virus or any other viral agent which may highest state and federal courts have, on numerous occasions, cause AIDS, legally, as "infectious and communicable." It upheld the constitutionality of all of the above measures, on places the disease on the list of reportable diseases and con­ the ground that the state has both the right and the duty, to ditions maintained by the Department of Health Services. defend and promote the general welfare , and that measures This list already contains virtually all dangerous communi- of public health are essential to that end. The entire question

56 National EIR July 31, 1987 of contagious disease, if we are sane, is a matter of public examine what is being done at all levels of government to health, and public health law, not of civil rights law." combat the spread of the disease, combined with a flurryof PANIC spokesmen also note that AIDS is not a "gay" state legislative effortsto stem the AIDS epidemic, indicate disease. They point out that the vast majority of the victims that the political tide may have turned in favor of measures of AIDS are in none of the so-called high risk groups; they like the new initiative. are poor people of both sexes in Africa and the Caribbean. This is precisely what is worrying opponents of the mea­ Futhermore, the virus shows every sign of being a classic sure, who are already voicing their hysteria. A July 19 article tropical disease syndrome, spread most rapidly through the in the Los Angeles Herald Examiner, entitled "AIDS initia­ tropical "insect belt." It is a retrovirus with totally new and tive might get back on ballot," worried that "things have unknowncharacteristic s, for which thereexists no cure, which changed" since Prop. 64 was defeated. Recent political de­ mutates at enormousrapidity , and which, according to many velopments at the state and national level have "fueled panic studies, may be 100% fatal forthose infected. Heterosexual and fear about the fatal epidemic and may allow measures transmission has been proven, as has insect vectoring. AIDS like Prop. 64 to flourish, AIDS and gay activists say." The is doubling every 8 to 12 months in the United States, and article quotes David Mixner, campaign consultant for last spreading with increasing rapidity outside the "high risk" year's "No on 64 campaign," saying: "This time around, I groups. think it's a much more difficult race if it makes the ballot. Proposition 64 lost, according to Lantz and Ghandhi, People are much more afraid and they're looking for political because of a "well-financed campaign of deliberate lies con­ leadership. " cerningthe medical facts of AIDS, as well as the content of A July 15 lead editorial in the Los Angeles Times hinted the initiative itself." at the major reason for opposition to the AIDS initiative from However, since last November, a number of develop­ policy-making circles: the economic cost factor. The edito­ ments, including the Reagan administration's emphasis on rial declares the new initiative "mischievous," particularly, "routine" AIDS antibody testing, and the President's ap­ "as the crisis in public finance has placed extreme constraints pointment of a special commission on AIDS, charged to on public-health programs, including those addressingAIDS ."

all other facets of the appointment of the panel and its visit, with the President, to the National Institutes of Health President's AIDS panel: by, among other things, arranging to have Lilly seated beside Cardinal O'Connor at a photo session of the Com­ a lost opportunity mission. Commission chairman William E. Mayberry, head of the Mayo Clinic of New York, said the Commis­ On July 23, President Reagan announced his 13-man sion's firstreport will be in the hands of the President in Commission on AIDS and visited the National Institutes 90 days, and its finalreport is due in one year. on Health for a briefing on progress in AIDS research. The Commission is charged to: The Commission appears to have been selected as a cross­ 1) review current efforts at AIDS education; section of almost every possible viewpoint in regard to 2) examine what is being done at all levels of govern­ what has already become the most emotional issue of the ment and outside of governmentto combat the spread of 1988 presidential campaign. As such, it represents a lost AIDS; opportunity to follow up the President's commitment to 3) examine the impact of the needs of AIDS patients large-scale AIDS testing, stated in June, with a crash in years to come on health care in the United States; national program of preventive public-health measures 4) review the history of dealing with communicable and research. disease epidemics in the United States; For the record, the Commission includes: the self­ 5) evaluate current research relating to the prevention avowed homosexual Dr. Frank Lilly, a geneticist at the and treatment of AIDS; Albert Einstein Medical Center in New York; Roman 6) identify areas for future research; Catholic Archbishop of New York John Cardinal O'Con­ 7) examine policies for development and release of nor; Illinois State Rep. Penny Pullen, co-sponsor of a drugs and vaccines to combat AIDS; legislative package mandating strong public health mea­ 8) assess the extent to which AIDS has spread both sures on AIDS; and Adm. James D. Watkins, recently among specificrisk groups and the population as a whole. retired Chief of Naval Operations and former head of the 9) study the legal and ethical issues relating to AIDS; PacificFleet . 10) review the role of the United States in the inter­ The media sought to make the "gay" issue overshadow national battle against AIDS.

ElK July 31, 1987 National 57 Crimes of Environmentalism

How U. S. laws were changed to be pro-mosquito-and against humans by Mrujorie Mazel Hecht

In the past few years, u. S. public health has been forced out nomic and technical considerations ...." of the picture by concernfor the protection of wildlife, and After almost 20 years of elaborating these "unquantified one of the chief beneficiaries is the mosquito. Mosquito pop­ environmental amenities," especially during the green years ulations in the United States are thriving, and their future of the Carter administration, the government regulatory looks even better, with disease-bearing foreign species arriv­ agencies have brought the pest control programs to a crisis ing by such means as used tires sent here for retreading from point. The consequences are hair-raising in terms of public tropical countries. health as well as agriculture. Mosquitoes are not just a nuisance. They carry and trans­ For example, a land developer filling in a swampy area mit deadly diseases: St. Louis encephalitis, dengue, malaria, on his property at the request of the mosquito control agency yellow fever-all of which are responsible for millions of was slapped with a cease and desist order by the state Fish deaths annually worldwide. Most alarming is the news from and Game agency and then with criminal charges because he a research team at the University of Florida that mosquitoes was disturbing wetlands and the state of California has a carry the lethal AIDS virus. The researchers are now trying legislative mandate to "preserve and increase wetlands." In to determine whether the mosquitoes can actually transmit other words, let the mosquitoes breed, but don't upset the the virusthat they carry . natural ecological balance. Effective mosquito control as practiced in the United Also in California, in order to protect the habitat of the States for decades, consists primarily of draining the swamps longhorn elderberry beetle, an endangered species, farmers and standing water where the insects breed, and secondarily cannot take action to prevent the banks of the Sacramento of using chemical and biological control measures. Since the River from encroaching on their orchards and farms. (This late 1960s, however, laws and requlations aimed at protect­ practice, called rip-rapping, places large rocks on the river ing wildlife and endangered species and preserving wetlands banks to stop the erosion.) So what if valuable agricultural have superseded the traditional pest control measures with land is lost and we produce less food-man must protect this criteria that are no longer based on the promotion of public , endangered beetle at all cost. health and safety. And soon, the Environmental Protection Agency will In 1969, the emphasis of U.S. national policy switched begin its Endangered Species Labeling Project, which will from protecting humans to protecting flora and fauna. The prohibit the use of pesticides in and around the habitats of National Environmental Policy Act of 1969 declared that it endangered species. Unbelievably enough, this means that if was now national policy "to encourage a productive and a mosquito control agency plans to apply a mosquito larvi­ enjoyable harmony between man and his environment. " This cide, according to the EPA draft regulations, "they will be might sound a little bit like support for motherhood, but the legally required to call an Endangered Species Specialist in environmentalist interpretation of such harmony favored the the Fish and Wildlife Service" to find out if they have per­ wildlife at the expense of man. mission to proceed. According to Section 102 of the act, "all agencies of the Federal Government shall . . . insure that presently unquan­ No more mosquito control tifiedenvironmental amenities and values may be given ap­ "This whole series of regulationsputs us out of business , " propriate consideration in decision-making along with eco- said Dr. Bill Hazeltine, an entomologist who is the Manager/

58 National EIR July 31, 1987 Environmentalist of the Butte County Mosquito Abatement District in northernCalif ornia."There is a denial of the basic principle of good mosquito control: prevent the breeding places of mosquitoes by good water management. " "Once you eliminate the breeding places, you don't have to worry about controlling them afterwards," he said. "There More aresome places where drainage should not take place, and in those places, you would use other measures, biological and Dangerous Th an chemical. But now our arsenal has been destroyed. When you take away water management and then you restrict the chemicals that can be used, all that's left is the biological Nuclear Wa r controls. By itself, biological control will give us levels of mosquitoes that very often are not tolerable." Dr. Hazeltine scored the regulations for the Army Corps of Engineers, which is responsible for issuing permits for the filling or draining of water and wetlands, as well as some of thepro visions of the Clean Water Act. "All of these regula­ tions are looking at preserving the health of the wetlands and wildlife, not the people. . . . Somebody has to speak up for the people," he said. If IMF poli­ cies continue, Disease vectors the deadly Mosquito-borne diseases are not restricted to the devel­ tse-tse fly oping sector. In 1984, Dr. Hazeltine said, local mosquitoes may be ruling the world by the 1990s! (those produced in the urban area of Los Angeles) were That's what EIR 's Special Report, "Eco­ responsible for 25 cases of St. Louis encephalitis in Long nomic Breakdown and the Threat of Global Beach, Californuia. And a few years earlier, there was a Pandemics," shows. similar epidemic in Dallas and Houston. At the time, he said, An exclusive presentation of the causal rela­ militaryaircraft were used to spray the whole area to control tion between economic policymaking and the the disease-bearing mosquito. Today, the concept of "chem­ outbreak of new deadly diseases. ical trespassing" would "deny us the capacity to respondto a large-scaleepidemic in the same way." • Features the world's only handbook for the Malaria is another mosquito-bornedisease that could be­ general policymaker, on how pandemics are being generated and where they will come a problem. Dr. Hazeltine pointed out that California's next break out; mosquito abatement program began back in 1911-12 to stop a malaria epidemic in the flood area of the Sacramento delta • Over 70 pages, including charts, maps, and that within three years had wiped out half of the native pop­ graphs demonstrating the U.S. wlnerabil­ ulation. ity to biological warfare;

One of the most serious dangers, Dr. Hazeltine said, is • Prepared by the EIR scientific task force the mosquito aedes albopictus, which carries dengue. This which 11 years ago forecast the precise lo­ mosquito is coming into the United States in used tires­ cation and time of the currently erupting millions of them-sent here from China, Formosa, and Ja­ epidemics in Africa. pan for recapping. The tires, mostly truck tires, hold water on the inside where the pests breed, and right now there is no program to fumigate them. As a result, the dengue-carrying Price: $100 mosquito has spread through Texas and Louisiana, into Flor­ ida and Georgia, and up the Mississippi River as far as Ohio Order from: and Indiana. EIR News Service "This mosquito poses a severe risk," Dr. Hazeltine said. P.O. Box 17390 "It is aggressiveand a colonizer, and the only way to control Washington, D.C. 20041-0390 it is to keep it out. Cuba had a dengue epidemic in 1985 that hospitalized 160,000 persons, with 185 deaths. . ..In China, it is the largest cause of infant deaths. "

ElK July 31, 1987 National 59 Book Review

Confessions of a Soviet Tru st agent by Scott Thompson

retary of State Alexander Haig, vigorously defending me and concluding, 'The Prime Minister asked me to tell you that Hammer there is no truth to these allegations, and that we consider Dr. by Armand Hammer with Neil Lyndon Hammer a good and trusted friend. . . .' G.P. Putnam's Sons New York "I have always believed," Hammer writes, "that by 543 pages, clothbound, $14.95. speaking and acting as he did, Menachem Begin changed Ronald Reagan's mind about me. My appointment as Chair­ In the latest best-selling biography of Armand Hammer, the man of the President's Cancer Panel-which required a full story is told of how this Soviet Trust agent was cleared for investigation of my record and FBI clearance-followed soon work with President Reagan by the same networks that intro­ after. " duced Soviet false flagagent Jonathan Pollard into the V.S. This confession by Hammer clears up the mystery posed intelligence community. The clearance procedure was ar­ by Hammer biographer Joseph Finder, who writes that ac­ ranged by Israeli leader Menachem Begin through Secretary cording to reliable sources, at the start of the Reagan admin­ of State Alexander Haig. Haig was later fired from his post istration, a memorandum circulated in the National Security when secret arrangements were discovered that he had made Council to the effect that Armand Hammer was a Soviet with the Israelis, behind the back of the Reagan Cabinet, for agent. EJR conducted and published, in 1985, the results of the 1982 Israeli invasion of Lebanon. a search of the very early records of the State Department The story goes that when Menachem Begin met with headed by Alexander Haig, that ironically showed that Ar­ President Reagan, Begin suggested "that he really ought to mand Hammer was known by State Department investigators make more use of you [Hammer] , because you understand to be closely associated with Soviet intelligence networks on the Russians so well." President Reagan's gut response was: whose behalf he performed valuable services. So, the mys­ "But I am told that Armand Hammer is a Communist." "I tery is finally cleared up as to how Armand Hammer gained was appalled," Begin later told Hammer, adding that he then entry into the Reagan administration, despite being a known told President Reagan: "Armand Hammer is not a Commu­ Soviet fixer. nist. He's a purecapital ist, through and through. Everybody knows that." The cover-up continues "Well," President Reagan said, "Armand Hammer's father Otherwise, this, the third or fourth biography of Armand was a Communist. Hammer, continues the patternof cover-up which character­ "Yes, he was," Begin said, "but that doesn't mean Ar­ ized each of the earlier biographies that date back to 1932. mand is a Communist. I'm afraid your supporters have been Some of the elements of cover-up reflect close reading of seriously misinformed, Mr. President, and I urge you to EJR 's exposes of Armand Hammer. Perhaps the most glaring check him out more thoroughly. I know you'll find that Ar­ omission is the fact that Armand Hammer's father was more mand is a completely loyal American ...." than a follower of Daniel De Leon and the Socialist Labor Hammer's story continues: "Shortly thereafterthe Israeli Party-he was a co-founder of the Communist Party V.S .A. Ambassador in Washington, Ephraim Evron, wrote to Sec- with Jay Lovestone, Bertram Wolfe, and others. Even Ar-

60 National ElK July 31, 1987 mand Hammer cannot gloss over the fact that his early meet­ contact on arms-control agreements between the United States ing with Lenin, where he took up the firstconcession during and the Soviet Union. Hammer proposes to Chernenko that . the New Economic Policy in the 1920s, was arranged by his the Soviets redraft their "no-first-use" proposal to cover both father's friends such as Ludwig Martens and Boris Reinstein. nuclear and conventional weapons, as the foot in the door for State Departmentdocuments printed in EIR report that Ham­ starting up annual summit meetings. mer served as a courier for Martens (a.k.a. "Peter the Paint­ • Jan. 29, 1985-At the European Conference on Se­ er"), who briefly became head of the "Soviet Embassy" in curity and Cooperation, the Soviet Union adopts Hammer's the United States afterhe was chased out of England by Sir "no-first-use" gambit, but Chernenko dies of illness before Winston Churchill. Failure to tell the true story of his father's he and President Reagan can attempt to meet. rolein ArmandHammer 's original entry into Bolshevik Rus­ • June 11, 1985-Hammer meets with Mikhail Gorba­ sia-an entry in which his father could not have had a direct chov. Hammer is told that Gorbachov is communicating with hand because he was serving a jail sentence on manslaughter President Reagan for a summit. Gorbachov is certain that a charges arising froman abortion he performed-is the most condition for that summit will be for the United States to glaringomission in the latest Hammer biography. abandon the Strategic Defense Initiative. Hammer suggests Several clear examples of damage control that may have both sides develop and deploy the system together. beeninfluenced byEIR include: • June 15, 1985-Armand Hammer writes a commen­ 1) Hammer's dismissal of the charge that he made his taryfor the New York Times which says that the time is "right firstfortu ne, witha drugcompany set up by his father, through and ripe" for resolving the "long impasse" between the Soviet "bootlegging"activity . Hammer counters this by saying that Union and the United States. President Reagan has been he may have skirted the intent of the law, but stayed within "turnedby events into a cooperative spirit. . . . He can have it. Hammer omits any mention of the "bootlegging" back­ only one ambition-the noblest kind-to go down in history groundof Louis Rosenstiel, to whom he ultimately sold his as a peacemaker. " large whiskey-producing interest. • June 23, 1985-Hammer meets with Dobrynin, then 2) Hammer's dismissal of the charge EIR found and re­ with President Reagan. He briefs the President on his discus­ printedfrom secret State Department documents, that his first sion of a summit with Mikhail Gorbachov, and he responds wife, Olga Vadina, was an agent of the OGPU intelligence to critics of this policy among Reagan's advisers who are service. Hammer goes to some length to argue that she was present. entirelytoo flighty tobe trusted by the OGPU on any serious • July 5, 1985-Viktor Afanasyev, editor-in-chief of mission. Pravda, tells a group of American editors visiting Moscow 3) Hammer's dismissal of the charge that he was aided in that Hammer "had played a significant role" in bringing about his Libyan concessions by the Soviet Union's intervention the agreement to hold a summit meeting on Nov. 19-21 in with Muammar Qaddafi. Hammer agrees that the Soviets Geneva. may have been interested in his negotiations with Qaddafi • Aug. 15, 1985-Israeli Prime Minister Shimon Peres (the start of the OPEC price rises), but says the charge of announces: "We approached the Kremlin on the 40th anni­ Soviet aid is a pure fabrication of the CIA. versary of their victory over the Nazis through the American What Armand Hammer not merely confesses, but actual­ Jew, Armand Hammer, who was a friendof Vladimir Lenin." ly brags about, is his role as a back-channel in negotiations The talks dealt with the possibility ofre newing Soviet-Israeli that have resultedin two summits between President Reagan diplomatic ties. and Mikhail Gorbachov, with a third summit pending. Dur­ • Sept. 22, 1985-The New York Times prints a com­ ing the course of his attempts to keep these summits from mentary from Armand Hammer calling for joint development beingblocked, Hammer even admits his role in runningcover and deployment of the Strategic Defense Initiative. Hammer for 25 Soviet espionage agents at the United Nations, whose is told that the President considered, but rejectedthis propos­ case he suggested be "decoupled" from the Daniloff/Zakhar­ al, as did Gorbachov at the Geneva summit. ov spy swap in order to smooth the course for the second • November 1985-An Armand Hammer-funded U.S.­ Reagan-Gorbachov, "Reykjavik," summit. Soviet Writers' Conference attended by senior KGB officials meets in Vilna, Lithuania to attempt to abort the SDI. Hammer's summitry • Nov. 21, 1985-President Reagan and Gorbachov sign The following chronology of Armand Hammer's activi­ a new U.S . -Soviet cultural exchange accord which the So­ ties leading up to two summits is compiled largely from viets intend to help upgrade the KGB's penetration of the Hammer's biography; it will figureshortly in the forthcoming U.S. Information Agency (USIA), headed by Armand Ham­ publication of EIR ' s report "Global Showdown II:" mer's friend Charles Z. Wick. • Dec.4, 1984-Meeting with Konstantin Chernenko • Dec. 7, 1985-Hammer fliesto Moscow for the first arranged through Hammer's friend, Anatolii Dobrynin. This meeting of the U.S.-U.S.S.R. Trade and Economic Council meeting occurred at a time when there had been minimal since the Russian invasion of Afghanistan. He concludes a

EIR July 31, 1987 National 61 "Saba's book describes howhighly placed American government officials have confused their loyalties; the storyis a frlgh18nlng one. Even mora frightening cultural agreement with the Soviet Union. The next month, is the failure of the American government to deter· mina what damage has been done to tha United Charles Wick travels to Moscow to work out the details of S18tes through this misguided action. Tha book is an instructive lesson in how the American government the U. S.-So viet cultural accord with the same Cultural Min­ can be manipulated; it shOuld be studied carefully. ister Pyotr Demichev. Later, a USIA official says of Ham­ It mighl even provoke American govemment officials to 18ke actions to correct these abuses." mer's role in the matter, "He really opened doors for us." Ja_ E, Aklna • April 28, 1986-Armand Hammer arranges to send F_ U.S. Ambuudor to S.udl Arula Dr. Robert Gale and others to treat the disaster patients at "Michael Saba presents a chilling account of the depth to which Israel has penetrated the centers of Chernobyl. U.S. power where sensitive information is held-and • May 15, 1986-Hammer meets a second time with vital decisions are made."

TINtHonorable Paul Findley Gorbachov, who lists three items that could form the basis Formar U;S. Congre.. man for a summit: I) a nuclear test ban; 2) ratification of SALT

"Michael Saba's THE ARMAGEDDON NETWORK II; and, 3) a 50% reduction in nuclear armaments immediate­ is a gripping work, as much the chronicle of an in· dividual's effortto halt a dangerous trend, as it is a Iy. Hammer urged Gorbachov to arrangea meeting between history of public deceit, hypocrisy, and cynicism. It his friend Secretary of State George Shultz and Soviet For­ is an important milestone in contemporary writing about America's role-misinformed, unjust. eign Minister Eduard Shevardnadze, leading to a meeting destructive-in Middle East affairs. between Reagan and himself. Dr. Edward Said Columbia Unlvarelty • May 23, 1986-Hammer meets with Secretary of State

"Mike Saba has written a controversial, thought· George Shultz to relay the discussion of the summit condi­ provoking book sure to challengetha traditional U.S.' tions, as well as the possibility for its rescheduling "if the Israeli relationship. The conclusions Saba has reached should be debated at the highest levels of initiative comes from America." National Security Adviser government. Adm. John Poindexter turnsdown Shultz's request that Ham­ TINt Honorabla Jama. Abourezk Formar U.S. Sanalor mer meet with President Reagan.

Send $9.95 plus $1 .50 shipping and handling per book to • May 1986-Mary Jane Wick, wife of USIA chief AMANA BOOKS Charles Wick, is given $500,000 by Armand Hammer to Dept. E, 58 Elliot Street, Brattleboro, Vermont 05301 restore Washington, D.C. 's Ford Theater. • June 14, I 986-Based upon a meeting with President Reagan a week earlier, Armand Hammer meets in London with Soviet Ambassador Leonid Zamyatin to discuss res­ cheduling the talks between Shultz and Shevardnadze, which FED UP WITH Moscow had indefinitely postponed. • Sept. 3, I 986-Hammer is in Moscow where he meets WASHINGTON with N.l. Ryzkov, chairman of the Council of Ministers of the U.S.S.R., to discuss expanding U.S.-U.S.S.R. trade, joint ventures, and other matters. V.L. Mokevich, the Min­ POLITICIAN S? ister of InternalTrade , is present at the meeting. • Sept. 5, 1 986-Hammer contacts Deputy Secretary of State John Whitehead to offer his services in the Nicholas Then DaniioffiGennadiZakharov affair, which threatens to derail the upcoming Reykjavik summit. He proposes that they go to Moscow together and get U.S. News and World Report Throw The power of journalistDaniloff released in a spy swap on reduced charges. The Book B ason: mHH e , \lutlll\ It Whitehead rejects the idea of their going together, but ap­ '" .",\0 01 .,•• • I"� :1 ·'1 ,1 " , 1�" 11 11 1,,· Ir proves Hammer's personal diplomacy. At(but rea Themd It first) • Sept. 21, 1986-Hammer meets President Reagan at a reception, and is informed that everything is on hold for a summit "until this Daniloff affair is solved." Reagan also THE POWER gives Hammer a green light for personal diplomacy in the matter. OF REASON: 1988 • Sept. 22, 1986-Hammer meets with Soviet Ambas­ An Autobiography by Lyndon H, laRouche, Jr. sador Dubinin and Foreign Minister Shevardnadze. Hammer proposes that the question of 25 Soviet KGB and GRU agents Published by Executive Intelligence Review Order from Ben Franklin Booksellers. 27 South King St .. leesburg. VA be decoupled from the Daniioff/Zakharov affair "by asking

22075. $10 plus shipping ($1.50 for first copy. . 50 for each addillonal copy). Bulk rates available. Shultz to postpone his Oct. 1 deadline for their departure." The same day Hammer meets with Shimon Peres in New

62 National EIR July 31, 1987 York immediately prior to Peres's meeting with Shevard­ nadze and enlists Peres's approval for a swap. • Sept. 23, 1986-Hammer fliesto Moscow, where he meets with Dobrynin, who asks him to write a letter for Books Received Gorbachov on these proposals that wins Gorbachov's ap­ proval. The Ties that Bind, by Jeffrey T. Richelson and Des­ • Sept. 27, 1986-The U.S. State Department admits mond Ball. Allen & Unwin Publishing, 1985. 402 that Hammer had flownto Moscow a few days previously as pages. an official State Departmentchannel to secure the release of Daniloff. The Killing Winds: The Menace of Biological War· • Sept. 30, 1986-Secretary of State George Shultz an­ fare, by Jeanne McDermott. Arbor House Publishers. nounces that Daniloff is on a plane out of Moscow, having Murrow; His Life and Times, by A.M. Sperber. Ban­ been released without trial, while Zakharov would be re­ tam Books, 795 pages. $12.95 paperback. leased shortly thereafter when he adopted the plea of nolo Making Public Policy: A Hopeful View of American contendere suggested by Hammer's attorney, Louis Nizer. Government, by Steven Kellman. Basic Books, New Oct. 13, 1986-Armand Hammer secures the release • York. of Russian geneticist David Goldfarb with permission from Anatolii Dobrynin. Goldfarb flies to New York on Hammer's Was Einstein Right, by Clifford Will. Basic Books, private plane. New York. • Oct. 15, 1986-Armand Hammer provides funds to The Khrushchev Objective, by Christopher Creigh­ the Soviet Cultural Foundation, which he helped Raisa Gor­ ton and Noel Hynd. Doubleday & Co. , New York, 333 bachova found earlier that summer. Raisa Gorbachova's pages. $17.95 clothbound. father, the 95-year-old Maxim Titorenko, was a leading pro­ The Ultimate Evil: An Investigation of America's ponent of Lenin's New Economic Policy. At its inauguration, Most Dangerous Satanic Cult, by Maury Terry. Dou­ Soviet Academician and Great Russian chauvinist Dimitrii bleday/Dolphin. Likhachev dedicates a part of his keynote address to Dr. Armand Hammer as "an old friend of the Soviet Union" who Making News, by Martin Mayer. Doubleday, 1987. had a "contributing role" in setting up the fund. $18.95 clothbound. • Oct. 24, 1986-Hammer leads the way to Soviet joint Secrecy and Power: The Life of J. Edgar Hoover, ventures. In a speech before the American Committee on by Richard Gid Powers. Free Press, New York. East -West Accord, Yuri D. Shcherbin, president of Amtorg, Who's Who in Space: The First 25 Years, by Mi­ announced that 15 American companies have come to the chael Cassutt. G.K. Hall, Boston. Soviets to propose joint ventures and that Hammer's Occi­ dental Petroleum heads the list. Hammer wants to build joint Up 'til Now, by Eugene McCarthy. Harcourt Brace, ventures in chemicals and plastics in the U.S.S.R. , Jovanovich, Inc., San Diego, Calif. • Dec. 6, 1986-Hammer meets with Shevardnadze to An Unquiet Life in the 20th Century, by Sidney discuss the post-Reykjavik situation. Shevardnadze com­ Hook. Harper & Row, New York, New York. plains that there are those in the West who are consistently Mission to Tehran, by General Robert E. Huyser. trying to undermine the breakthrough represented by the Harper& Row, New York, New York. Reykjavik summit, while once again relaying conditions to furtherthe process that include U.S. elimination of the Stra­ The Forging of the Union 1781.1789, by Richard B. tegic Defense Initiative. Morris. Harper & Row, New York, New York. • Feb. 14-16, 1987-Hammer attends Gorbachov's The Genius of the People, by Charles L. Mee, Jr. "International Forum for a Non-Nuclear World and for the Harper& Row, New York, New York. Survival of Mankind" in the Soviet Union. While in Moscow, The Inside Story: The Riseand Fall of Bagwan Shree Hammer donates a painting and $100,000 to Raisa Gorba­ Rajneeshee, by Kate Strelley. Harper & Row, New chova's Soviet Cultural Foundation after meeting with the York, New York, 381 pages. $17.95 hardcover. Soviet leader's wife. It is this chronology of activities, which places Hammer Ben Gurion: The Burning Ground 1886·1948, by as virtual head of the Trust group seeking regular appease­ Shabtal Teveth. Houghton Mifflin, Co., Boston, Mass., ment summits between the United States and U.S.S.R., which 967 pages. $35 hardcover. makes so important his confession in the same autobiography The Red Eagles, by David Downing. MacMillan Pub­ of how his name was cleared of being a Soviet agent so that lishing Co. , New York, New York. he would have access to President Ronald Reagan.

EIR July 31, 1987 National 63 There's a Renaissance Beginning Under the Dome ... In Leesburg, \b.

The beautiful bookstore and domed recital hall of Ben Franklin Booksellers, Inc. in Leesburg (25 miles west of Washington, D.C.) is fast emerging as the center of a cultural and scientific revolution in America. The book collection is hand­ picked to bring you hard-to-find classics at reasonable prices. The children's books section is widely acclaimed. The bookstore hosts regular musical events, poetry recitations, and other cultural activities. Offers classical literature , science, Renaissance art prints, antiquarian books . Special and mail order.

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o FRIEDRICH SCHILLER-A collection of plays and prose writings (including Don Carlos; Aesthetic Letters). $9.95

o GEORGE WASHINGTON-The Life of George Washington, by Washington Irving. $19.95

o HENRY CAREY-The Harmony of Interests. $22.50

o LYNDON LAROUCHE-A collection of writings (includes So, You Wish to Learn All About Economics; There Are No Limits to Growth; and LaRouche, Will This Man Become President?). Three volumes fo r $19.85

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'Foreigners' threaten auto? et tractors in the Washington, D.C. Media emphasis about "foreign competition" is a hoax, timed to area. The famous Caterpillar Co. of coincide with autoworkers' contract talks. Peoria, Ilinois has begun this shift. Allis-Chalmers firstwent out of vehi­ cle manufacturing altogether and sold out. Then, the new company declared he July Commerce Department nomic Recovery." bankruptcy in June. Tindustrial inventories report showed Automakers had reduced their When the slump in auto sales that business inventories soaredin May output during the first six months of worsened this spring, automakers also to the largest in three years-much of the year by 7.8%, from 4,466,934 resumed low-interest loan terms, which were unsold automobiles. In­ units in 1986, down to 4,118,400 in money givebacks and other financial ventories of unsold cars on dealers' 1987. Nissan and Honda both idled inducements to consumers. However, lots are running 10% higher this year some of their U.S. plant capacity in this has not changed the trend of de­ than last. June. For the entire second quarter this clining sales. This again proves the fraud of the year, GM conducted a sweeping pro­ Some industry-watchers predict "Recovery." Hardly anyone can af­ gram of plant idlings, in an attempt to there will be an auto strike in Septem­ ford to routinely buy a family car. The pull down its inventories. GM has car­ ber. Some say it will beat GM-which annual level of car sales has remained ried about a 75-day supply of cars, would "benefit" from a lockout in the in the same range for the last 10 years, when the industry regards a 62-day same way the USX Steel Division did running between 8 and 10 million to supply as optimal . during the record six-month lockout 11 million units. During this time, sales The layoffs in auto have ripple ef­ that began last summer. USX inven­ of imported cars have doubled, but fects throughout the economy. Every tories were drawn down. Other indus­ now sales of imports have likewise assembly line job generates-or los­ try observers say that anger runs high slumped. Annual car sales this year es-two jobs outside the factory, ac­ against the Ford management-which will be lucky to go over 10 million. cording to the Motor Vehicle Associ­ has shown some profits, so "there­ However, according to the media ation. fore ," there may be a strike. hype, the only problem affecting the The National Machine Tool As­ Neither management nor union car industry is the issue of foreign im­ sociation reports that as, of the first leaders have chosen to blame the gen­ ports . This propaganda is timed with half of 1987, new orders for U. S. ma­ eral collapse of agriculture and indus­ the start of contract talks July 27, that chine tools were down by 8.8% from try on the impact of the "Recovery" begin between the United Autowork­ last year-mostly due to the sharp fall policies. The media give big play to ers union and GM and Ford. Their this year in auto sector orders . any and all talk of the foreign car threat. three-year contract expires Sept. 14. In an effort to mobilize some cash From Peter J. Pestillo, Ford's vice­ The Chrysler workers' contract ex­ flow, automakers have turnedto "spe­ president for employee and external . pires in 1988. cialty" vehicles for segments of the affairs: "If there is one overwhelming Typical ofthe national media cov­ U.S. households with money still to compelling dynamic in these talks, it erage is the Washington Post feature spend. The lightweight truck market is the internationalization of the U.S. July 19: "For both the companies and has broken all previous sales records. auto industry. " the union, however, the driving force Ford had an unprecedented month this Even the simple facts of the inter­ at the bargaining table will be an in­ summer, where its truck sales out­ national auto industry shows how the visible third party: foreign competi­ paced its car sales for the firsttime in decline is worldwide. In June, 4,000 tion. " history. Ford and VW workers were pro­ The reality is that even some of the Similarly, the farm-vehicle man­ grammed to be suspended in Brazil. foreign automakers-many in corpo­ ufacturing sector has promoted small GM told its Brazilian employees that rate subsidiary relations with domes­ tractors and riding mowers for the few, it would give them a general vacation tic manufacturers-also have slowed select "hot-house" suburbs where from July 1-10, because of the 7,500 down or halted car production for pe­ people can still afford semi-recrea­ unsold cars in its stockpiles. GM has riods of time, to try to "adjust" to the tional vehicles. John Deere is heavily also announced that it is delaying plans disastrous effects of the "Reagan Eco- advertising its lawnmowers and midg- to assemble cars in Egypt.

ElK July 31, 1987 National 65 Eye on Washington by Nicholas F. Benton

Thus, all of the administration dependent Bankers Association of claims that there was "no difference" America (lBAA), President Reagan's between VoIcker and Greenspan, were veto of the bank bill could trigger the Volcker: Greenspan's exposed as a fraud. very inflationary take-off that he fears All this just corroborates EIR's the most. deregulation is disastrous analysis last May-that VoIcker re­ This is because, Verdier said, the In perhaps his final appearance before fused to accept a third term in the spir­ bill includes a despemtely needed $8.5 the House Banking Committee July it, as it were , of a rat abandoning a billion recapitalization of the Federal 23, outgoing Federal Reserve chair­ sinking ship. In his place, Reagan got Savings and Loan Insurance Corpo­ man Paul V oIcker said the nation faces someone of his own mind. ration (FSLlC). Even through Pres­ a "critical juncture" because of the The prognosis is for near-term ca­ dient Reagan said he wants more than "uncommon combination" of inter­ tastrophe. Despite VoIcker's own that for the FSLlC, his veto will delay national and domestic debt crises. meat-ax approach to the economy on the designation of any funding to the He said that if the situation is han­ behalf of financier interests, particu­ agency for months, and this could, he dled properly, no one single factor, larly the looting of the Third World, said, have the effect of beginning to even a significant increase in the oil he was able to forestall a global finan­ bum up the economy very rapidly. price, will necessarily trigger an ex­ cial collapse largely on the strength of The total deregulation of banking plosion of inflation. On the other hand, the soothing effect of his personality will lead to a similar result very fast. he warned, if the impression is created among nervous central bankers of the Once there are no federal constraints that the Fed is not in command of the industrial powers. on interstate banking (which keeping situation, then even the slightest trem­ In contrast to the calm and com­ the "non-bank bank" loophole open or could trigger such an explosion. manding VoIcker, Greenspan has the sets the stage for) , then the huge mon­ VoIcker was emphatic that the na­ personality of a didactic rodent, driv­ ey-center' megabanks, with massive tion's banking system needed reform, en by cult-like ideological fixation on access to liquidity (including from and urged passage of the "Competi­ "theories of the totally free market," highly questionable sources, as the tive Equality Banking Act of 1987," which he mistakes for economics. That Treasury Department documented in which, among other things, closes the he is not likely to inspire confidence alleging billions in drug money-laun­ "non-bank bank" loophole and pro­ in the international banking commu­ dering through many of the biggest vides a secondary market for agricul­ nity is an gross understatement. banks of the country) will drive most tural loans. When asked by this reporter to of the nation's 14,500 smaller banks Meanwhile VoIcker's replace­ comment on VoIcker's opposition to out of business. ment, Alan Greenspan, was testifying President Reagan's intent to veto the While this will lead to a lot of "ab­ on the north side of Capitol Hill in the bank bill, White House spokesman sorptions" of smaller banks by larger firstday of his confirmation hearings Marlin Fitzwater said, "We simply ones-resulting in perhapsonly a half­ before the Senate Banking Commit­ disagree with the chairman on the der­ dozen megabanks controlling all the tee. While committee chairman Sen. egulation portions. We think it's credit of the country-it will also lead William Proxmire (D-Wisc.) was em­ counterproductive to the President's to thousands of failures, bursting the barrassing Greenspan by reading doc­ views." The remark is symptomatic: demands on the Federal Deposit In­ umentation proving his economic He did not say "counterproductive to surance Corporation (FDIC) at the forecasts have been some of the worst the economy," but "to the President's seams. The bailouts required will be in the last decade, Greenspan took the views"-the ideological fixation on hyperinflationary . opposite position from VoIcker orithe deregulation. Finally, when the dust settles, our congressional banking bill. half-dozen remaining megabanks will Greenspan said he favored the not be that solid, themselves. On the administration position of wanting to contrary, as Paul VoIcker said, both leave the "non-bank bank" loophole Veto would trigger internationaland domestic debt crises open in the name of deregulation and will loom larger than ever. And the supported President Reagan's stated inflationary take-off collapse of even just one giant under intent to veto the "Competitive Equal­ According to Stephen Verdier, the such conditions will bring down the ity Banking Act. " senior legislative counsel for the In- roof.

66 National EIR July 31, 1987 Elephants &: Donkeys by Kathleen Klenetsky

Hart campaign manager firstin the nation. " Dukakis 's claim was disputed by Philip Roeder, communications Stephen Levy, chairman of the Mas­ scores Iowa 'blackmail' director for the Iowa Democratic Par­ sachusetts High Technology Council. The former national campaign man­ ty, denied Dixon's charges-al­ Noting that the defense industry makes ager of GaryHart 's ill-fated presiden­ though he did admit that presidential up a large component of the state tial bid, shookup the Democratic Par­ candidates Bruce Babbitt, Joseph Bi­ economy, Levy told the Boston Globe ty apparatus recently, when he ac­ den, and Richard Gephardt distributed that "the absence of SOl would cer­ cused the Iowa Democratic Party of liberal amounts of money to Iowa pol­ tainly hurt." He predicted that cut­ being composed of greedy and corrupt iticians last year, especially those who backs in SDI contracts would cause politicians, who regularly extort mon­ exertsignificant influence on the state's layoffs-a view which Dukakis also ey from the party's presidential can­ caucuses. disputes. didates. Chris Hamel, Babbitt's Iowa cam­ Bill Dixon leveled these accusa­ paign coordinator, told the Globe that tions in a speech to the National As­ Babbitt and his supporters had donat­ Southern Dems not sociation of Secretaries of State July ed about $60,000 in money, services, 14, in which he charged that "greedy" and staff contributions to Iowans last charmed by 'Dwarfs' Iowa politicians have consistently re­ year, including a $10,000 contribu­ Southern Democrats are singularly sorted to "blackmail and threats" to tion to Lowell Junkins's unsuccessful unimpressed by the currentcrop of of­ procure campaign donations from the 1986 gubernatorialcampa ign. ficially sanctioned Democratic party candidates. Those contributions paid off in presidential candidates, and unless the Dixon denounced Iowa political spades, Hamel said. Junkins "says nice party comes up with a better candi­ leaders "who trade their support for things about my campaign, and nice date, they will once again vote Repub­ campaign contributions." Iowa, he things about Gephardt," who also lican in 1988. said, "is the home of sophisticated, contributed to Junkins. "He does trash That's the conclusion of a study greedy political leaders who threaten Gary Hart. Is that worth $10,000 to conducted by the Roosevelt Center for national political candidates with reg­ me? Yes ....We are looking for any American Policy Studies, based on in­ ularity and with crudeness in a quest advantage over the others to person­ terviews with "hard-core Democrats, for political money. . . . They have alizerelationships in any way we can." "swing" Democrats, and Republi­ been corruptedby big money." cans. "Swing Democrats [are] strong­ Dixon specifically accused the ly-though not irreversibly inclined state party leaders of threatening to Dukakis's anti-SDI to back the Republican nominee," undercut those presidential candidates wrote report co-authors Mark J. Rov­ who refused to donate hefty sums of stance stirs rancor ner and William A. Galston. money to state Democratic cam- Massachusetts Gov. Michael Dukak­ The findings present a real prob­ . paigns. He said that several Iowa pol­ is's vehement opposition to the Stra­ lem for the Democrats, who must win iticians had flatly refused to consider tegic Defense Initiative is causing big in the South to take the White endorsingHart, unless he came up with some consternationback home, where House. Democratic voter apathy about a donation to their own electoral op­ defense contracts in general, and SOl the "Seven Dwarfs"isn 't limited to the erations. ones in particular, have become main­ South. Syndicated columnist David "We know money corrupts, and stays of the economy. Broder reported recently that he and a Iowa has been first in the nation for Dukakis openly acknowledged, at colleague undertook an informal sur­ too long, and political money is cor­ a meeting of the Association of State vey of Cleveland blue-collar workers rupting a small portion of the leader­ Democratic chairs July 17, that his shortly afterthe Democratic debate in ship there," Dixon later said in an in­ commitment to terminating the SDI early July. Most of those interviewed terview with the Boston Globe. "I'm could cost Massachusetts a whopping saw the candidates as "simply a blur. " not alone in saying that. It's just other 251 defense contracts. But he also in­ "The Democrats are almost certain to campaign managers still have candi­ sisted that the loss of SDI contracts pay a price for offeringa skeptical na­ dates in the race. Iowa has gone too would not harm his home state's econ­ tion a stranger as President," Broder far. It's time for someone else to be omy. warned.

EIR July 31, 1987 National 67 Congressional Closeup by Ronald Kokinda

enate passes also leery of the political mobiliza­ of financial institutions being forced tradeS war bill tions that are made to attempt to get out of business. Perhaps, if the GAO The Senate completed over three companies to stay in a community . had issued its report in 1980 rather weeks of work on the trade bill, pass­ An attempt was made by Senator than 1987, consumers and the banking ing it by a vote of 71-27 on July 2l. A Gramm to eliminate the section of the industry would be on much sounder House-Senate conference to resolve bill which would create a new inter­ footing." differences between the two versions national debt management agency, but Annunzio showed a report newly is expectedto beginin September. The was defeated 50-49 on July 15. Gramm prepared by the General Accounting bill faces the threat of a White House objected that the type of agency and Office, which has now confirmedthat veto. its cost was not clarified by the bill. consumers were hurtby deregulation. The Senate bill contains a variant A provision sponsored by Sens. Don Lower-income consumers were of the highly protectionist Gephardt Nickles (R-Okla.) and Steve Symms more affected, Annunzio said. "The provision contained in the House bill. (R-Idaho) was incorporated to halt all report suggests that for the most part The provision mandates import re­ lending to develop products defined what the banks gave with one hand strictions and retaliation if other na­ as being in surplus. This perhaps was under deregulation, they took away tions fail to reduce their trade surplus the most clear-cut acceptance of ac­ with the other hand and both legs. with the United States. The Senate ap­ commodation to current depression Thus, the consumer instead of gaining proach instead attempts to force open conditions. from banking deregulation, actually markets for U. S. goods. lost ground.... The Senate grants protection to any "My vote against the legislation in American industry injured by imports 1980 was the right vote. I am happy to even when traded fairly. nnunzio attacks see that others, even seven years later, The Senate had firstrestricted the bankingA deregulation are starting to realize that financial President's discretion to deny import Rep. Frank Annunzio (D-Ill.), a sen­ deregulation was an idea whose time restraints sought by domestic indus­ ior Democrat on the House Banking had not come." tries to cases of national security, or Committee, on July 15 strongly at­ where a company would suffer from tacked the Depository Institutions increased costs. Two days later on Deregulation and Monetary Control July 9, two amendments were adopted Act, which Congress passed in 1980, task fo rce told: by voice vote, sponsored by Sens. Bill and which some hope will be followed AIDSGoP politically protected Bradley (D-N.J.) and Phil Gramm (R­ up with further massive deregulation Rep. William Dannemeyer (R-Calif.) Tex.) allowing the President wider of the banking system in the near fu­ outlined testimony on the House floor latitude to deny relief if the costs af­ ture. For example, Alan Greenspan, July 15, which had been presented to fected the poor, or added the impact the chairman-designate for the Feder­ the Congressional Republican Lead­ of possible retaliation against Amer­ al Reserve and an ally of the House of ershipTask Force on June 3, that made ican farmers . Morgan banking interests, testified in hair-raising allegations on how AIDS The Senate version also includes favor of further deregulation during has been treated as a politically pro­ a provision sponsored by Howard his confirmation hearings before the tected disease. Metzenbaum (D-Ohio) and Ted Ken­ Senate Banking Committee on July 21. Dannemeyer warned of the ex­ nedy (D-Mass.) requiring companies Annunzio outlined how he had treme economic and demographic with 100 or more employees to give fought against deregulation in 1980 consequences of the AIDS epidemic. 60 days notice of their intention to and had argued that "the legislation AIDS is spreading "at a speedthat jeo­ close a plant. Passed by a vote of 60- was anti-consumer and would end up pardizes our very survival and threat­ 40 on July 9, business and the admin­ costing consumers millions of dollars ens our economic stability," he said. istration are strongly opposed on the a year in unnecessary expenses. "We could lose one-quarter of the grounds that it would place them at a "I also predicted that the legisla­ world's population before we gain competitive disadvantage. Business is tion would be responsible for hundreds control of this epidemic, even if we

68 National EIR July 31, 1987 act swiftly right now." He added that spread of AIDS. These laws forbid that he represented the party in power society is "in grave danger from the contact tracing, forbid a physician to which favors the commonwealth sta­ experts who have consistently mis­ tell another physician caring for the tus, Fuster said that statehood advo­ read this epidemic." same patient that that patient is infect­ cates are not more than 30% of the Dr. Theresa Crenshaw testified ed, forbid telling a spouse that their vote. "The great majority of the peo­ before the task force on the various husband or wife is infected, and forbid ple of Puerto Rico in 1984 voted sub­ ways AIDS has been politically pro­ doing a screening test for AIDS with­ stantially in favor of parties and can­ tected. "The most interesting and un­ out the witting consent of the individ­ didates whose platforms expressly fortunatepolitics at the CDC [Centers ual. This is the only blood test in the pledged to leave political status mat­ for Disease Control] have been the history of medicine that cannot be per­ ters aside, so as to focus only on ur­ politics of labeling, the artificial and formed by law." gent socio-economic problems. The misleading distinction between AIDS, This pressure has "preventedphy­ bill disrupts political discussion in the ARC, and confirmed asymptomatic sicians from doing the blood test when island by forcing the public to focus infection," she said. This has created they feel it is indicated, has prevented on a matter that is not of their urgent a "false sense of security" because health professionals from communi­ interest or concern." "cases are discussed in terms of thou­ cating with each other, and has forbid­ Fuster posed the questions to be sands rather than millions." She also den physicians to protect the lives of answered. "Is Congress ready and ea­ noted that the self-consoling defini­ sexual partners of those infected with ger to grant statehood to an organized tion of "high-risk group" has been the virus." community of Spanish-speaking peo­ continually expanded to encompass ple who would have the right to elect virtuallythe entire population. two Senators and seven Members of Crenshaw also charged that busi­ the House? Is Congress ready to bear ness concerns have played a role in the cost of well over $1 billion in ad­ allowing the spread of AIDS. "The big Legislation tailored ditional federal aid money to the is­ business of blood banking caused de­ for presidential ambitions land which statehood for Puerto Rico layed screening of blood for almost a Fighting for delegates to the 1988 GOP would represent, according to a recent year beyond the proven value of test­ convention, and kissing the feet of the Government Accounting Office re­ ing and continues to claim greater American-Israeli Public Affairs Com­ port? safety of transfusions than is warrant­ mittee (AIPAC), seem to have been "Is Congress ready to deal with ed." motivating factors behind some leg­ expected and perhaps fierce opposi­ She charged that alternatives such islation introduced into Congress. tion not only of significantleftist groups . as blood substitutes or suctioning and . Competing for GOP delegates for in the island and the mainland who filtering a person's own blood during the presidential nomination in Puerto favor independence for Puerto Rico, an operation were not made known to Rico, Sen. Robert Dole (R-Kansas) but also of Latin nations that don't peopleas options. on May 12 introduced a bill for Puerto supportstatehood for the island?" Crenshaw noted various interest Rican statehood, S. 1182. Not to be Placating the Israeli lobby, AI­ groups trying to protect themselves. outdone, another presidential aspirant PAC, seems to be another pastime of "Africa would hate to have it known enlisted Rep. Robert Lagomarsino (R­ presidential aspirants. Senators Dole that AIDS was spread by mosqui­ Calif.) to introduce H.R. 2849 man­ and Paul Simon (D-Ill.) cosponsored toes," she said. "It would ruin their dating a yes or no referendum on state­ S. 1203 on May 14 to shut down two tourist trade. Gays would not want it hood. Rep. Ron Dellums (D-Cal.) also informationoffices of the PLO located known that AIDS is spread by casual joined the fray with a bill to grant in the United States. Dole claimed that contact, for fear that they would be Puerto Rico independence. such action was necessary to protect ostracized. " Rep. Jaime Fuster (D), the Puerto the American people against terror­ "Laws have been passed, initiated Rican delegate to the House of Rep­ ism, yet no one remotely claimed that by Art Agnos in California,that have resentatives, strongly attacked such either of these offices were linked to swept the country and ensure the politicking July 15. Acknowledging aiding or abetting any act of terrorism.

ElK July 31, 1987 National 69 National News

The decision was a victory for Hart and his supporters , who had argued that the two campaign committees were separate organ­ NASA scientists izations. The money was seized April 15 by Cover-up continues on fe deral marshals, after suit was filed by a promote Mars mission creditor. Executive Order 12333 Three hundred scientists gathered in Boul­ Hart withdrew from the presidential race White House spokesman Marlin Fitzwater der, Colorado on July 23-26 for the third on May 8. reacted as though he had seen a ghost, when annual "Case for Mars" conference , to dis­ EIR's White House correspondent Nicholas cuss the scientificrequirements for a manned F. Benton asked him at the July 20 press Mars mission, and the need for a national briefing what he could say about the nature political mandate for the effort . or contents of Executive Order 12333. Fitz­ Conference chairman Tom Paine , who water sputtered that he would say nothing headed up the President's National Com­ Nofziger indictment on matters dealing with covert operations. mission on Space , declared in his opening As EIR has reported in recent issues, the address that the main reason that man should puts Meese on notice order, signed by the President on Dec . 4, go to Mars is "the prospect of the limitless Former White House adviser Lyn Nofziger, 1981, gave the green light for actions by the growth potential of mankind ...opening a close associate of President Reagan, was "secret government" that are now being ex­ an unlimited frontier that will eliminate mal­ indicted on six counts of violating federal posed in congressional hearings, as well as thusian limits to human aspirations." ethics law on July 14. He was charged with for "dirty tricks" against political opponents NASA administrator James Fletcher en­ lobbying the administration on behalf of of that faction of the intelligence community thusiastically endorsed the report of the Na­ Wedtech Corp., Fairchild Industries, and a known as "the bankers' CIA." tional Commission on Space, issued one year maritime union. In related news, Michael Ratner, the le­ ago , which called for a manned Mars mis­ The indictment stems from an investi­ gal director for the Center for Constitutional sion. gation by Special Prosecutor James McKay , Rights, raised the issue of EO 12333 in a "People could very easily be en route to who is also investigating U.S. Attorney letter to the editor published in the New York Mars in the second decade of the next cen­ General Edwin Meese, in connection with Times on July 19. Ratner says its "surpris­ tury," Fletcher stated. Because so much the Wedtech case . Wedtech, which had paid ing" that none of the members of the needs to be done before that can happen, Nofziger lavish fees, had allegedly secured congressional Irangate committees brought "We must begin now to define such a mis­ no-bid defense contracts with the govern­ EO 12333 to the attention of the witnesses, sion, and to define thetechnologies that will ment through the intervention of Meese. given that it identifies the National Security be required for its success." Other spokes­ Nofziger responded to the charges in a Council as the "highest executive branch men from the space agency stressed the fact written statement which charged that pros­ entity" providing direction and guidance on that the new Office of Exploration that Dr. ecutor McKay "and his large staff of law­ all intelligence and counterintelligence ac­ Fletcher has established, will be evaluating yers , FBI agents, and IRS investigators have tivities. these long-term planning goals for the U. S. systematically ruined my good name , my In view ofthis, he writes, "it is disingen­ space program. business, and my finances.... This action uous to argue that the NSC is not, in the comes at the expense of justice and fair language of the Boland Amendment, an play. . . . I am innocent of any deliberate 'agency or entity of the United States in­ violation of the law, and if the independent volved in intelligence activities .' " counsel wants my scalp, he will have to get Hart wins ruling it the old-fashioned way." According to informed sources, the on campaign funds Nofziger indictment and the threat to indict A federal judge has ruledthat nearly $30,000 Meese are intended to prepare the way for in contributions seized at a Hollywood fun­ removing Meese as attorney general . Meese Rangel: 'no evidence' draiser for Gary Hart cannot be used to pay is already in trouble as a result of Indepen­ off his 1984 campaign debts, AP reported dent Counsel Lawrence Walsh's investiga­ against Contra leaders on July 21. District Judge James M. Ideman tion of the Justice Department's role in cov­ Three research institutes-the Christic In­ in Los Angeles said the funds must be re­ ering up the Iran-Contra scandal . Nofziger stitute, the National Security Archives, and turned to Hart's 1988 campaign committee, was on a lavish retainer from Carl "Spitz" the International Center for Development, and that it would be unjust to use the money Channell, who recently pleaded guilty to tax presented six hours of testimony to the House raised by one group to pay off the debts of evasion in connection with laundering NSC Select Committee on Narcotics on July 21, another. funds to the Contras. concerning links between the Contras and

70 National EIR July 31, 1987 Briefly

• PRESIDENT REAGAN called former NASA administrator James drug trafficking. But committee chairman During the years Greenspan was so Beggs on July 22, to apologize for his Charles Rangel (0-N . Y .) announced that wrong , EIR's Quarterly Economic Report indictment by the Justice Department "none of the witnesses gave any evidence had an unmatched record of forecasting ac­ two years ago, saying that the recent­ that would show the Contra leadership was curacy on the real U.S. economy . ly dropped suitshould never havebeen involved in drug smuggling. " brought. The House Crime Subcommittee is now taking over the case, and will receive the • SEN. DANIEL MOYNIHAN reams of testimony obtained by Rangel's will introduce a sweeping welfare re­ panel since it began its inquiry in June 1986. vision bill to force parents of depen­ The information will also be forwarded to Superior Court rules dent children into low-wage jobs, or the Judiciary Committee, which will con­ face loss of their welfarebenefits . The sider whetheror not to hold further hearings. against du Pont Smith bill would require mothers of chil­ The key question the crime panel will The Pennsylvania Superior Court in Phila­ dren three years or older to take work­ face, according to a report in the Washing­ delphia has affirmed a lower court decision, fare jobs. ton Post, is whether U.S. government offi­ ruling political activist Lewis du Pont Smith ELLIOTT ABRAMS cials deliberately ignored drug dealing by "mentally incompetent" to manage his es­ • was forced individuals who supplied the Contras . "There tate. The ruling, issued on July 21, confers to testify under oath on July 21 before were flights going down with goods and on the associate of Democratic presidential the House Banking, Finance, and Ur­ guns, and there were flights coming back candidate Lyndon LaRouche, the status of a ban Affairs Subcommittee, where he with drugs ," said Rep. James Trafficante virtual political prisoner in his own country . was called upon to discuss loans to (D-Ohio) . "I don't know how it could occur The lower court had ruled to strip away the Chilean government. Rep. Bruce without someone in this country knowing Smith's right to vote , to marry, and to man­ Morrison (D-Conn.) cited Abrams's what's going on." age his financial affairs , because of the op­ lies to Congress in the Iran-Contra position of his family to his political views. affair, adding that without an oath, Smith is an heir to the du Pont family for­ "we have no legal assurance that he tune. feels compelled to respond accurate­ The appellate court entirely avoided the ly, truthfully, and fully ." constitutional questions in the case, by • SEN. ALBERT GORE, during Greenspan grilled on claiming that such questions can only be considered in Pennsylvania upon notice to his first presidential campaign swing past economic blunders the attorney general . through New Hampshire, met with Don't ask Alan Greenspan, the new Federal Smith said that he planned to appeal the environmentalists and pledged to re­ Reserve chairman, if you want to find out new ruling "as soon as possible." His ave­ open investigations into the accident what's going on with the U.S. economy . nue of appeal would be the Pennsylvania at the ThreeMile Island nuclearplant. That's the message Senate Banking Com­ Supreme Court. mittee chief William Proxmire delivered The decision, he said, "makes a mock­ • ABRAHAM FOXMAN was during his questioning of Greenspan July ery of the U. S. Constitution. It's the kind of named national director of the drug 22 . court that is found all over the U.S.S.R. , mob's Anti-Defamation League of Proxmire: "When you were chairman where political dissidents are routinely con­ B'nai B'rith on July 20, succeeding of the Council of Economic Advisers during victed and sent off to Gulags," under the Nathan Perlmutter, who died the week the Ford administration, the Council had a guise of being "mentally incompetent." before . Foxman, who was born in dismal [forecasting] ...record . I have here He warned, "The United States is turn­ Poland in 1940, had been associate a study . . . which you headed; you were ing into George Orwell's 1984." national director. He joined the ADL wrong by the biggest margin of any in the Smith added that he has received infor­ in 1965 . 11 years '76 through '86 ....Then we come mation indicating that it was Edgar Bronf­ to the Treasury bill rate . . . there you broke man, who has recently taken over the Du­ • OLIVER NORTH'S "second all records for the entire period in er­ Pont Company, who "prompted my family channel" to the Iranian mullahs is still rors . . . . Then we come to your forecast on to take the actions against me starting in operating, accordingto highly placed inflation ...there, again, you broke all rec- November 1985, and who promptedthe more sources in theIranian op position. This ords .... Your estimates on unemploy- recent actions by my alcoholic father to nul­ channel is being used to continue ment ... were way off in those areas ." lify my marriage ." contact with elements of the Khom­ Greenspan: " ...I will explain to you, He said that his father and Bronfman eini regime centered around Speaker as best I can, the imminent sense of failure share an "obsessive" hatred of the political of ParliamentRafsan jani. of my mission ....I fe el sorry for me." views of Lyndon LaRouche.

EIR July 31, 1987 National 71 Editorial

Pentagon ignoring Soviet scientific lead?

According to the Soviet newspaper Izvestiaof July 18, lieve in dozen-year to quarter-century cycles between the most recent Soviet Politburo meeting made a com­ scientific ideas and weapons applications. In other mitment to strengthen the material-technological basis words, they ignore the fact that the Russians are in the for research in high-energy physics. The Politburo de­ midst of a crash war drive. cided to step up the work in all of their scientificcenters In the United States, we used to uphold the devel­ and experimental installations, and the expansion and opment of scientific discovery as the bedrock of our construction of pilot experimental programs in high­ national security . Then the desperate banking institu­ energy and particlephy sics programs. tions undercut science and forced the nation into the Several months ago one of our nation's senior ex­ disastrous path of a "post-industrial society." perts in Soviet assault radio-frequency weapon capa­ Only an individual imitating the posture of an os­ bilities told us: "To understand the way in which the trich could fail to see the Russian commitment to sci­ Russians intend to use Radio-frequency (RF) assault entific-military programs. The Russians are going full weapons, you can't think simply in terms of micro­ throttle in high-energy physics and directed-energy waves and radio frequencies; that's not the way the programs. The Russians are going full throttle in fusion Soviet war machine works , and they are in a fu ll-scale energy and plasma physics programs . They are moving war buildup. They're organized the way we used to do full throttle in their rocketry physics and space pro­ things here . They are backing science across the board . gram, while we can't lift a missile four feet off the Then when they need a weapons application, they can launch pad. During 1986, 91 of the 103 successful pull it off the shelf. It's under the high-energy physics rocket launches worldwide were Russian. They are av­ and directed-energy programs that they develop the eraging nearly two launches per week in snow, sleet, hardware-oversized gyrotrons, special phased array rain, or hail, and 75% of their payloads are military . radars in which the antennae are designed either to The Russian space station MIR is serving as a success­ receive or broadcast powerful signals, and so forth­ ful platform for laser, physics, and military tests. for military deployment of RF strategic assault weap­ The Soviets are fully backing research into the bio­ ons. These are advanced electromagnetic weapons logical effects of electromagnetic systems, as well as which are based upon 'new physical principles.' Any the basic principles of optical biophysics. America's signal fromthe Russians that they are pouring resources senior scientists in all of these basic areas of research into high- and directed-energy physics programs at this are having their funding slashed and fighting to keep time, would have to be understood as a full-scale com­ their projects alive. mitment to radio-frequency weapon deployment." Recently the head of Moscow 's VernadskyInstitute Such a full-scale commitment is precisely what the toured the United States. He told his American coun­ Soviet Politburo made a decision to do. terparts at a scientific conference here: "For our part in Nonetheless, dangerous illusions permeate the top Russia, we have no problems with money and budg­ echelons of U .S. military officialsre sponsible for eval­ ets . " uating Soviet weapons capabilities. They have foolish­ That is the summary of the military-strategic equa­ ly lockedinto the fantasy that electromagnetic weapons tion. Every U.S. program of strategic military-scientif­ will not be developed in this century. The Pentagon old ic importance has massive problems with money and boys suffer from the delusion that World War III will budgets . Every area of development necessary for "look like" World War II, only with more moderngadg­ countering the Russian radio-frequency, biophysics, ets . While acknowledging that electromagnetic weap­ and electromagnetic breakout is being chopped to rib­ ons are "theoretically possible," they mystically be- bons on our side.

72 National EIR July 31, 1987 Now with 'Iran-gate,' you can't afford to wait for the best intelligence EIR can prpvide--��ediately. The economy is teetering at . the brink, and even the larg­ est American banks are shaking at their fo undations. We alert you to the key developments to watch closely, and transmit 10-20 concise and to-the-point bulletins Alert twice a week, including periodic reviews of debt, terror­ ism, and drugs. The "Alert" now puts special emphasis on economic developments. It reaches you by First Class mail twice a week (or more often, when the situation is hot). For Europe and the Middle East, the Confidential Alert Alert Bulletin appears once a week in the fo rm of a one-page telex message.

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Foreign Rates Phone ( Central America. West Indies. Venezuela I Address ______and Colombia: 1 ':Ir. $450, 6 mo. $245, 1 3 mo. $135 1 City ------South America: 1 yr. $470 , 6 mo. $255, 1 State ______Zip ___ _ 3 mo. $140. I I Make checks payable to EIR News Service Inc .. Europe. Middle East. Africa: 1 yr. DM 1400, P.O. Box 17390. Washington. D.C. 2004 1- 6 mo. DM 750, 3 mo. DM 420. Payable in '1 0390. In Europe : EIR Nachrichtenagentur deutschemarks or other European currencies. 1 GmbH. Postfach 2308. Ootzheimerstrasse 166. I 62 Wiesbaden. Federal Republic of Germany. Asia and Oceania: 1 yr. $550, 6 mo. $300, 1 telephone (06121) 8840. ------3 mo. $150. 1 ______- - Insects and AIDS This month , th e federal Office of Technology Assessment finally held a seminar of 16 top experts to weigh the evidence of insect transmission of AIDS . Almost tw o years ago EIR was out front-and alone-facing the wrath of the medical establishment, the budget-cutters , and the radical homosexual lobby when we first argued that AIDS could be transmitted by mosquitoes . • In our 1985 Year-in-Review issue, we re ported th at it was ' like ly that "the mosquito carries contaminated blood like a flying syringe fro m one victim to another," especially in the Tropics . • July 18, 1986: EIR excerpted a speech by Dr. Mark Whiteside of the Institute for Tropical Medicine in which he said: "We noticed th at symptoms of AID S resembled the symptoms of many viruses, including insect- or mosquito-borne viruses ." • Aug. 23, 1986: Dr. Jean-Claude Chermann of the Pasteur Institute in Pari s ' told th e International Congress on Cancer in Bu­ dapest that his re searc h te am had found the AIDS virus in four different types of African insects . EIR was the only publication to give th is extraQrdinary finding more th an passing notice.

Irangate cover-up EIR said it first. On page 118 of our Special Report on "Project Democracy : th e 'parallel government' behind the Iran-Contra af­ fair," re leased last spring , EIR warned: "Is there a re as.on to fear that Inouye and Hamilton 's committees might attempt to. de stro y Walsh's investigation , or otherw i'se cover up for the implications of the scandals? A re sounding, yes. " We pinpointed committee counsel Arthur Liman and his links to Irangate culprits as a key pro blem.

Contras and cocaine Last February, EIR exposed the fact th at the "Nicaraguan freedom fighters" were Soviet-linked drug-traffickers as much as the San­ dinistas , in a cover story titled "Who's behind th e Contra cocaine connection?" Five months later, on July 15, George Morales tes­ tified before the� Senate Foreign Relations Committee' s subcom­ mittee on terrorism an d narcotics, that he ran drugs and laundered money for the CIA and the Contras .

EIR: Knowledge is leadership.