Guns for Khomeini and terrorist groups are supplied through the Israeli defense

ministry! So says Gen. (ret.) Avraham Bar Am, one of the top military men

arrested by U.S. Customs agents in Bermuda on April 22, on weapons-smuggling charges. Our report exposes this network, which is directed by Ariel Sharon­

its espionage and organized crime activities, and its deal with Soviet intelligence services.

MoSCOW'S Secret Weapon: 4

In this remarkable, thoroughly researched document, you will finally learn the truth about: • Billionaire Soviet agent Armand Hammer, and the complex of wealthy financial figures known as "the Trust" who are the power behind would-be dictator Sharon. • The role of Henry A. Kissinger in the notorious "Iandscam" real-estate swindle in the Israeli-occupied West Bank territories. • The history of the Luzzatto family of Venice, the Recanati, and the Syrian Jewish families of Aleppo, the Jewish fascists of the Irgun, and the noose of organized crime tightening around Israel today. 148pp. • The plot to set off a new Middle East general war, by blowing up the second Order your copy today! holiest site of Islam, Jerusalem's Dome of the Rock Mosque. The facts, exposing the plot Price: $250 and the plotters, some never before published anywhere, are the results of an investigation covering four continents, an investigation which risked the death of the investigators. From • The massive coverup of the Pollard case itself-the facts which Secretary of State George Shultz, and especially Undersecretary of State Elliot 'Abrams, are fanatically Service determined to bury. EIRNewsP.O. Box 17390 • The anatomy of a JDL terrorist, Mordechai Levi, and Levi's role as a joint-asset of Washington, D.C. the FBI and the Anti-Defamation League, as well as an asset of Sharon's cohort "Dirty 20041-0390 Rafi" Eytan. Founder and Contributing Editor: Lyndon H. LaRouche. Jr. Editor-in-chief: Criton Zoakos Editor: Nora Hamerman Managing Editors: Vin Berg and Susan Welsh From the Editor Contributing Editors: Uwe Parpart-Henke. Nancy Spannaus. Webster Tarpley. Christopher White.' Warren Hamerman. William Wertz. Gerald Rose. Mel Klenetsky. Antony Papen. Allen Salisbury Science and Technology: Carol White Special Services: Richard Freeman Advertising Director: Joseph Cohen Director of Press Services: Christina Huth n each of the policy issues which has moved into center stage in INTELLIGENCE DIRECTORS: the brawl going on in Washington, EIR has been consistently right, Africa: Douglas DeGroot. Mary Lalevee O Agriculture: Marcia Merry and our opponents have been consistently wrong. Asia: Linda de Hoyos Counterintelligence: Jeffrey Steinberg. Take the mushrooming scandal around the billions of dollars' Paul Goldstein worth of arms illegally shipped, with U. S. government complicity, Economics: David Goldman European Economics: William Engdahl. to the "moderate mullahs" in Iran, via the Ariel Sharon faction of the Laurent Murawiec Israeli Mossad, which then proceeded to forward the bucks to the Europe: Vivian Freyre Zoakos Ibero-America: Robyn Quijano. Dennis Small "Contra" guerrillas in Central America. Didn't we warn you about Law: Edward Spannaus all of this in last spring's Special Report, "Ariel Sharon and the Medicine: John Grauerholz. M.D. Middle East: Thierry Lalevee Israeli Mafia"? . Soviet Union and Eastern Europe: And didn't EIR publish a cover feature seven full months ago in Rachel Douglas. Konstantin George Special Projects: Mark Burdman the May 9 issue, entitled "Arms for Iranian terrorists: the U.S.-Israeli United States: Kathleen Klenetsky connection"? That feature included the following statement: "EIR INTERNATIONAL BUREAUS: has been accumulating evidence for several years indicating that one Bangkok: Pakdee and Sophie Tanapura Bogota: Javier Almario of the key features of the 1979 Camp David accords between Israel, Bonn: George Gregory. Rainer Apel Egypt, and the United States was a series of secret clauses giving Chicago: Paul Greenberg Copenhagen: Poul Rasmussen Israel carte blanche to sell U.S. military hardware to such clients as Houston: Harley Schlanger Khomeini and the Sandinistas-customers the United States ob­ Lima: Sara Madueiio Los Angeles: Theodore Andromidas viously did not wish to be directly linked to, despite the complicity Mexico City: Josefina Menendez Milan: Marco Fanini of the Carter administration in putting those renegade regimes in New Delhi: Susan Maitra power in the first place." Paris: Christine Bierre Rio de Janeiro: Silvia Palacios And didn't we-by the way-make it clear a long time ago that Rome: Leonarda Servadio. Stefania Sacchi there is no such thing as a "moderate mullah" in Iran, in numerous Stockholm: William Jones United Nations: Douglas DeGroot articles and, in great detail, in the 1984 Special Report, "How Mos­ Washington, D.C.: Nicholas F. Benton cow Plays the Muslim Card in the Middle East"? Wiesbaden: Philip Golub. Goran Haglund This week's cover Feature goes to the heart of the reason we have ElRIExecutive Intelligence Review (ISSN 0273...{j314) is been consistently right: the economic conceptions that enabled Lyn­ published weeldy (50 issues) except for the second .week ofJuly and first week of January by New Solidarity don LaRouche, in early 1982, to put forward what later became Imemationa/ Press Service 16J2 K St. N.W .• Suite 300. Washington, D.C. 20006 (202) 955-5930 President Reagan's SOl program. Note that EIR had an article in Distributed by Caucus Distributors. Inc. EIII'OpetIIf H..Jq_,.:Executive Intelligence Review early March 1982 by LaRouche, stating the principles of the SOl Nachrichtenagentur GmbH. Postfach 2308. DotzheimerslraSSC 166.0-6200 Wiesbaden, Federal Republic (see page 25). of Germany Tel: (06121) 8840. Executive Directors: Anno Hellenbroich, If you want to know what to do about Central America, now that Michael Liebig the "Contra option" is dead, tum to page 10. If you want to know the In IH�: BIR, Haderslevgade 26, 1671 Copenhagen (01) 31-09-08 basis for understanding the AIDS threat, tum to page 36. If you want In Mu:It:D: EIR. Francisco Dfas Covarrubias 54 A-3 Colonia San Rafael, Mexico OF. Tel: 705-1295. to grasp what must be done to insure the SOl is implemented, study }1IptIII.llbscripljon sales: O.T.O. Research Corporation, pages 24-35, and compare the article on page 64. If you want to save Takeuchi Bldg .• 1-34-12 Takatanobaba. Shinjuku-Ku. Tokyo 160. Tel: (03) 208-7821. the West, help our readership grow! Copyright Cl 1986 New Solidarity International Press Service. A1f rights reserved. Reproduction in whole or in part without permiasion strictly prohibited. Second-class postage paid at Washington D.C .• and at an additional mailing offices. 3 months-$I25, 6 th8-'-$225, I year-$396. Single iasue-$IO Academic library rate: $245 per year Postmaster: Sendmon all address changes to EIR. P.O. Box 17390, Washington. D.C. 20041-0390. (202) 955-5930 TIillContents

Book Reviews Science & Thchnology Economics

60 New CIA history puts 36 New computer study 4 Steel shutdown reveals intelligence policy under shows AIDS could wipe 15-25% industrial decline the microscope out U.S. Amid the press fanfare over LTV's Jeffrey Steinberg reviews John The first run of a new whopping $2.08 billion loss for Ranelagh's The Agency-The Rise epidemiological computer model, the third quarter, the most and Decline of the CIA From Wild the first ever designed to study a important point was buried: The Bill Donovan to William Casey. human slow-acting retrovirus. company's sales of steel fell by 24%, despite the continuing strike at USX.

Departments OperationJuarez 6 Ivan Boesky and the Mossad arms smuggling 18 Report from Rio 42 Educating the labor force connection Cruzado Plan, take two. of Ibero-America Background: The insider trading system and 'Dope, Inc.' For lbero-America as for all 52 From New Delhi modem economies, this task Currency Rates Jitters over AWACS. comprises two aspects: the 9 baseline level of literacy and general education of the majority U.S. policy and the 53 Northern Flank 10 of the work force, and the number economic time-bomb in Stockholm police chief under fire. and quality of training of Central America scientists, engineers, and Between 1978 and 1985, fully 54 Dateline Mexico technicians. 13% of the Gross Domestic John Gavin, one of the 'bad Product of the Central American guys'? nations was looted from the region. 55 Andean Report 'Betting on Peru' in the year 2000. 12 The facts: what the IMF robbed 72 Editorial Now, let's get the 'homintem' 16 Honduras on the brink of catastrophe

17 Poland: Selling the nation to pay the debt

19 Foreign Exchange Washington's crisis and the dollar.

20 Domestic Credit The threat of 1930s-style deflation.

21 Agriculture Farm trade surplus at 14-year low.

22 Business Briefs Volume 13 Number 48, December 5, 1986

Feature International National

46 The strategic issues behind 58 Reagan, Meese have begun 'Iran-gate' the counter-Watergate What America's friends abroad What shocked the Establishment, must know about the present crisis was that Meese walked to the in Washington, by editor-in-chief podium of the White House Criton Zoakos. conference room, pointed the finger at the core of illicit Israeli 48 Raisa Gorbachova intelligence activities in the United 'elected' to Soviet Culture States, and destroyed, on the spot, the cause of the Nicaraguan Lyndon H LaRouche, Jr. (left), Edward Teller (right), Fund presidium pictured during a visit to New York University in Contras. spring 1983, shortly after President Reagan's March As the de facto leader of the new 23 speech, Inset: LaRouche political supportersrallied Fund, she will be directing and Nunn surfaces as at the Capitol in Washington in April 1983, to dem­ shaping the Soviet Union's cultural 62 onstrate support for an economic boom based on the transformation. Trilateral's hand-picked SOl. man for President 50 The Philippines: whose By Lyndon H. laRouche, Jr. 24 The difference between victory? LaRouche's and Teller's The United States has adopted a 64 Funding cuts put the role in creating SDI policy known as "constructive President's SDI program disengagement," while the grave trouble The authorship of the Strategic in communist New People's Army Defense Initiative is primarily the Funding for directed-energy guerrillas are marching toward work of Dr. Edward Teller and weapons under the Strategic power in Manila. Lyndon H. LaRouche. The Defense Initiative will be 5% difference between the narrower lower in this fiscal year than last. scope of Dr. Teller's 51 Fired NATO general contributions, and LaRouche's warned of spetsnaz 67 Miami indictments hit own broader considerations, is key 'Medellin Cartel' to understanding why the Soviets 56 International Intelligence blame the latter most bitterly, rather than Dr. Teller, for this 68 EIR's Chaitkin seeks policy. Graham death records The latest in an ongoing investigation of the mysterious death of the late husband of the Washington Post owner.

69 Eye on Washington Bankers admit crisis, have no solutions.

70 National News �ITillEconomics

Steel shutdown reveals 15-25% industrial decline

by David Goldman

EIR warned in December 1985 that the U.S. physical econ­ Yet, steel imports fell during August to 1 .53 million tons, omy would begin a 15-25% annual rate of decline sometime about a quarter less than July's 2.1 million tons. Steel "de­ early in 1985, and declared in June 1986 that such a decline mand" has collapsed, because the principal steel users, name­ had begunin the primary manufacturing sector, e. g., metals, ly construction and automobile, are winding down drastical­ as ofMay . Events in the steel industry demonstrate the ac­ ly, especially in the commercial construction sector, a heavy curacy of this judgment. Although the financial press head­ user of basic steel products. lines Nov. 28 made much of LTV's announced $2.08 billion The continued fall in orders, the failure to reduce steel loss for the third quarter, one of the worst in U.S. corporate inventories, and the low import level all demonstrate that history , themore important news was buried . LTV's sales of American basic industry is operating at a lower level of the steel during the quarter fell by 24%, from $1.35 billion during depression ratchet than last spring. Measured by steel con­ the second quarter to only $1.02 billion during the third sumption, the level has fallen off by roughly 25%; it is im­ quarter-andthis despite the continuing strike at the nation's possible to calculate, on the basis of existing data, how far largeststeelmaker, USX. down primary production has fallen, but the underlying level As the USX strike moves towards its fifth month, steel of activity appears to have been declining at an annual rate inventories have not fallen, importshave not risen, and sales consistent with the 15-25% annual band projected by EIR. of other companies have, on the whole, stagnated. USX, the starting with the third quarterof 1986. former U.S. Steel, accounts for one-fifth of former U.S. What complications may ensue for the steel industry is primary steel capacity, and will probably close permanently evident in the huge LTV financial write-off, motivated large­ half the capacity it had leftbefore the lockout. ly by a $2.1 billion special charge for unfunded pension An uptick in orders for the other companies (among the liabilities. The object of the write-off is to force the bank­ major manufacturers, only Bethlehem reported some im­ ruptcy courts to, in tum, force the Pension BenefitGuarantee provement, while LTV showed a devastating decline) would Board to pick up the bill for LTV's unfunded pension plans. have occurred under normal circumstances. Imports also would have risen. In fact, the elimination of most USX pri­ 'Not optimistic' mary-steel capacity over four months merely forestalled a As in the story of the desperate vaudevillian who offered price collapse in the industry. Primary metals orders (to the to commit suicide on stage, thesteel industry will have trou­ extent the Commerce Department figurescan be relied upon) ble arranging an encore to LTV's performance. The broker­ fell by 3.9% in September, and by an additional I % during age house Oppenheimer and Co. had already warned Sept. October. Raw steel output, at about 8 million tons during 11, "Unfortunately, integrated steelmakers have experienced March 1986, and at 9 million tons in March 1985, averaged difficult volume, price cost and earnings conditions for the less than 6 million tons between August and October of this past fiveyears ....The likelihood of successful steel indus­ year. try reorganizations, whether achieved through bankruptcy,

4 Economics EIR December 5, 1986 employee-ownership or other changes in ownership, has been afterall , to a foreign subsidy in manufactures. diminished due to recent legislation and court rulings The modest decline in the month-to-month size of the strengthening the rights of labor unions during bankruptcy deficit,from $13.3 billion in August to $12.6 billion in Sep­ proceedings ....In addition, we expect the ability of com­ tember, occurred mainly in exchange with the developing panies to terminate their pension plans and transfer large sector. Oil imports by volume fell by 15% over the month, liabilities to the Pension BenefitGuarantee Corporation will reflecting the already-overflowing level of above-ground oil be greatly reduced by future legislation, as such practice stockpiles accumulated in the United States; this saved about would exhaust the PBGC' s assets and is viewed very adverse­ $300 million on the deficit. Another $200 million reflected ly by policymakers ....We are not optimistic about the declining imports from Mexico, and imports from develop­ prospects for steel industry reorganization." ing nations fe ll generally. Although the complete breakdown In fact, the $236 million of unfunded liabilities which the is not yet available, the pattern likely reflects lower con­ pension agency assumed in September, plus the additional sumption of raw materials by American industry, and higher $336 million LTV has already demanded it assume-both imports of finished goods. for steel division pensions-pretty much exhaust the agen­ cy's assets. Rather than allow the steel companies to dump Drop in capital goods enough pension liabilities onto the unfortunate PBGC to force That would help make sense of the largest-ever drop in Congressto put money in directly, legislators will more likely durable-goods orders-6%-posted during October. With­ take legislative precautions against this. The problem is that out defense capital goods, orders fell by "only" 2.7% in the steel industry really is going under. This suggests that its virtually every category. Non-defense capital goods fell by only alternative is to undertake massive workforce and ca­ 7.2%-not a surprise , since October was the first month in pacity reductions, and eliminate potential pension liabilities, which the elimination of the investment tax credit under the in advance. President's "reform" program was taken into account as a matter of law. The broad industrial decline However, the 43.1% drop in defense orders may reflect Steel's underlying strategy, supported by the Reagan more than a monthly blip. Defense Department procurement administration, involves layoffs and capacity reduction in spending appears to have peakedin fact, after a year in which advance of the underlying collapse of steel utilization by the the Pentagon ran largely off earlier-year spending authori­ rest of industry. The immediate objective is to prevent a price zations. The cuts in the defense budget which began in 1985 collapse in the industry , which seemed inevitable before the may have choked off a substantial portion of defense orders. USX lockout began last July. However, judging by data available, the collapse of steel output is proceeding only More layoffs in auto industry slightly in advance of the collapse of the sectors which utilize The auto industry's disappearing act continued through steel. Nov. 26, when General Motors announced a new set of Commercial construction is now running about 30% be­ layoffs, this time at its DetroitFiero plant. Six hundred hourly low previous-year levels, as the 25% national vacancy rate workers will be laid off, following the earlier announcement turns into a rout in most of the important urban markets. of 28,000 permanent layoffs at GM. Construction activity has virtually ceased in the oil-produc­ Overall, the industry has produced 6% fewer cars this ing states, where even ongoing projects have been abandoned year than last (through the third week in November). Count­ midway, and real-estate interests in the East Coast boom ing only the American producers, the fall would have been areas are more concerned with forestalling a collapse of ex­ 8.2%, since the Japanese producers all showed largeincreas­ isting building prices, than with bringing new ventures onto es. For General Motors alone, the decline was 16%. an already-saturated market. Although most public attention has centered on the floun­ More broadly, October's data for durable-goods orders dering of GM management, Ford and Volkswagen are re­ and for the manufactures trade deficit indicate how rapidly structuring their overseas operations in a fashion with poten­ this unraveling is, in fact, proceeding. Despite administration tial implications for domestic U.S. production. They will nonsense about a supposed improvement in the trade deficit, integrate their Argentine and Brazilian operations into a sin­ the deficitfor manufactured goods actually rose in October, gle new company, Autolatina, with capacity to build 900,000 to $11.1 billion, from $10.5 billion in September. This was cars per year. The merger will promote "permanent techno­ attributed to the increasing deficitwith Japan, which rose by logical advance, greater operating efficiency, and greater nearly a quarter, from $4.1 billion to $5.0 billion. Since the utilization of existing productive capacity," a joint press re­ dollar-yen rate deteriorated during September, a certain por­ lease said. Since an increasing portion of basic auto compo­ tion of the increased deficit may be attributed to currency nents, including motors, transmissions, and electrical sys­ changes, but the huge size of the increase testifies to the tems, are out-sourced to Ibero-America, the rationalization American economy's continued dependenceon what amounts, has implications for the world automobile market.

EIR December 5, 1986 Economics 5 Ivan Boesky and the Mossad s smuggling connection arm by Joseph Brewda

When Wall Streetcorporate raider Ivan Boesky was indicted Suisse and the Wall Street finn Merrill Lynch, moreover, for "insider trading," on Nov. 14, EIR's would-bejournal­ which managed the sanctioned Mossad-NSC armssmuggling istic competitors insisted that Boesky was an "outsider," to Iran. whose spectacular criminalscams in no way typifiedstandard Wall Street practices. Despite the fact that Boesky's opera­ tions were dependent on a $1 billion-plus credit line from the elite Drexel Burnham investment house, and had the active cooperation of such powerful establishment firms as Merrill Lynch and First Boston Corporation, Boesky was repeatedly termed a "maverick." The insider trading One year earlier, these same media parroted similarly absurd claims by the U.S. State Department and Israeli gov­ system and 'Dope, Inc.' ernmentthat U.S. Naval intelligence employee Jonathan Jay Pollard was only acting as a "rogue operative," when he was The Securities and Exchange Commission can now prove, caught red-handed delivering U.S. classified documents to if it wants to , that Dennis B. Levine, late of Drexel Burn­ the Israeli embassy in Washington last November. ham Lambert, was merely doing his job in passing insider In fact, Mossad spy Jonathan Pollard and Ivan Boesky information to Ivan Boesky and other arbitrageurs. have much morein common than being victims of the stan­ Whether he knew he was doing his job, or merely thought dard intelligence-agency and banking-house trick of portray­ that he was cheating the house, is irrelevant, and might be ing one's captured underling as an "unsanctioned rogue." It impossible to determine. However, U.S. Attorney Ru­ is this ignored, common feature of Pollard and Boesky cases, . dolph Giuliani is now investigating what has been obvious taken in the context of the breaking scandals surroundmg to market participantsall along, namely, that Drexel made U.S. National Security Council-Israeli Mossad arms smug­ a habit of leaking information about hostile takeovers to gling to Iran, which indicates the actual magnitude of Boes­ the "arbs," in order to build up a market avalanche to crush ky's arrest. the defending management. By all rights, Boesky could have been indicted a year ago "Investors" do not, in general, buy junk bonds to ob� November when Pollard was nailed as a spy. He could have tain the high interest rates. Buying junk bonds is the pen­ been nailed when Israeli Gen. Avraham Bar-Am was indicted alty that participants in a takeover syndicate cough up, in by the U.S. Justice Department last April with 16 British, order to participate in the syndicate. Michael Milkin of Israeli, German, U.S., and Greek nationals for conspiring to Drexel's Beverly Hills office-sometimes referred to as ship over $2 billion in arms to Iran. . the king of the junk-bond market-depends on the "arbs" Despite his depiction as a meregreedy scam artIst, Boes­ to sell his high-interest, high-risk paper. Of course, there ky was right in the middle of the "Israeli Mafia" Wall Street are a few bankrupt savings and loans who have nothing to financial apparatus. That network was exposed in a special lose, and will take the risk to obtain the high return.More report published by EIR last March, "Ariel Sharon and the often, the S&Ls or insurance companies who buy junk Israeli Mafia." That report, as well as subsequent EIR cov­ paper are captive cash sources for the syndicate. erage, proved that the Israeli Mafia-Mossad n�twork of for­ "Insider trading" is the premise of the entire business. mer Israeli Defense Minister Ariel Sharon, partIallyrevealed Milkin sits in his office with a short list of heavy hitters , by Boesky'sarrest, also controlledJonathan Pollard and Bar­ capable of picking up 1 to 5% of any deal he brings to Am. It is this banking apparatus, prominently including the networkmutually controlled by the Swiss banking giant Credit

6 Economics EIR December 5, 1986 Who is Ivan Boesky? instrumental to his subsequent career. Fisher, a one-time When Ivan Boesky was indicted on Nov. 14 for insider bagman for the Cleveland-Detroit-based Purple Gang, has trading, and agreed to pay $100 million in finesand cooperate been a key money launderer to Israel, and involved in the with federal authorities, little attention was paid to the actual dope trade for decades. Through the financingof his in-laws, basis for his rise to the status of a "daring" Wall Street scam Boesky parlayed a small New York investment firm, Ivan artist. Boesky, a son of a Detroit delicatessen owner, first Boesky and Company, from a fledgling scam in 1975 to the made his connections in the early 1960s, when he was em­ premier corporate raider outfit in 1986. ployed by the United States Information Agency (USIA) in As the Boesky case broke, anxious press accounts noted Teheran, Iran. It is believed, but not yet confirmed, that that Boesky' s credit lines extended from Wall Street's Drexel Boesky firstmade contact with Mossad arms smuggler Yacob Burnham, and that that financial house also has been the Nimrodi in Teheran in that period. Nimrodi, who was a main backer of the equally "daring" corporate raiders Meshulam weapons supplier for the Shah (just as he now is for Khom­ Riklis, Victor Posner, and Carl Linder. All of the members eini), was a central figure in General Bar-Am's arms smug­ of this ring are both Fisher-tied and frequent partners of gling ring (see EIR, Vol. 13, No. 19, May 9, 1986). Boesky in various corporate raids. The network includes: Boesky's marriage into the Silberstein family, a family • Meshulam Riklis, owner of Rapid American Corpo­ tied to the notorious mafia kingpin Max Fisher, was also ration and the funder of Gen. Ariel Sharon's political cam-

them. With this list, he can (or could) put together multi­ ties and Exchange Commission. But where does their billion-dollar financingfor hostile or other takeovers, fast­ ready cash materialize from? That is where Drexel's spe­ er than the largest banks could offer the same money in cial role leads the investigator to the $500 billion per the form of bank loans. annum flowof new dirty money into the markets. Drexel The people who buy Milkin's junk paper have huge is controlled by the Lambert family, the Belgian Roth­ amounts of ready cash to commit, and, as a pack, can act schild cousins; through their holding company, Pargesa, faster than the largest commercial banks. These people do in Switzerland, and Pargesa's ties to Banque Paribas, not intend to make money by holding high-interest paper; France's largest banque d' affaires, they play a prominent they make money on the stock market, the way Ivan Boes­ role in the Swiss-Italian insurance combine. The Lamberts ky did. Most of their names are well known; they are have a seat on the board of the Italian insurance giant, market operators, often with a loose organized-crime as­ Assicurazioni Generali of Trieste, possibly reflectingPar­ sociation, who elbowed their way into control of major ibas' substantial shareholding in the Generali. corporations. The top of Milkin's list reads: "This monster has devoured North American fi­ Lawrence Tisch (Loewe's Corporation , and now CBS); nance," Jeffrey Steinberg and this writer wrote in the Saul Steinberg (Reliance Insurance, and various British second edition of the bestselling textbook on narcotics merchant-bank connections); Kirk Kerkorian (MGM); Carl traffic,Dope, Inc. We noted that $50 billion entered the leahn (TWA); Victor Posner (Sharon Steel); Carl Lindner United States during 1985 in the form of "errors and omis­ (Great American Insurance); T. Boone Pickens (Mesa sions," i.e., untraceable capital transactions. Since the Petroleum); the Belzberg brothers (Vancouver); Meshu­ Treasury made reporting of foreign purchases of U.S. lam Riklis (Rapid-American); Marvin Davis (20th-Cen­ securities voluntary, following staff cuts, U. S. officials tury Fox); Charles and Herbert Allen (Allen and Co.); believe that most of the errors and omissions reflect unre­ Maxwell Rabb (currently U.S. Ambassador to Italy); Sir ported securities purchases from offshore funds, and that James Goldsmith (Generale Occidentale); Sir James Han­ the source of most of these funds is the $500 billion inter­ son (Hanson Trust); Kenneth Bialkin (Wilkie Farr Gal­ national narcotics traffic. lagher, and Warburg-Pincus); and various savings and Not merely the takeover syndicate, but the U.S. Trea­ loans, insurance companies, mutual funds, and other sury, now depends on America's $150 billion a year in money-dumps associated with them. foreign borrowings. Why should the Drexel syndicate These men all know each other, do deals together, function differently? It merely happens that, while Japa­ take participations of each others' companies, socialize nese institutions buy Treasury securities, the network which together, and (very possibly) will do time together. includes Ivan Boesky depends on access to the sources of Afterone of the pack has targeted a company, offshore dubious cash channeled by the likes of Drexel Burnham, funds covertly purchase stock, usually below the 5% mark, Merrill Lynch, and First Boston. after which shareholdings must be reported to the Securi- -David Goldman

EIR December 5, 1986 Economics 7 paigns. Riklis is at the center of arms smuggling to Iran . banks have been at the center of laundering funds for U.S. • Carl Lindner, the Christian fundamentalist former National Security Council-protected Israeli arms sales to Iran. owner of the "bankers' CIA" United Fruit Company, who In fact, Jonathan Jay Pollard .was first put in touch with his installed Max Fisher as chairman of that drug-and-weapons firstMossa d controller, Col. Avraham Sella, through a Wall smuggling firm. Street-based Israeli Bonds drive organizer. The financingfor • Victor Posner, now under U.S. federal indictment for General Bar-Am's $2 billion arms sales to Iran was partially fraud. Often termed the successor to Meyer Lansky, Posner conduited through a network of New York based yeshivas has been under formal U.S. government investigation for (religious schools). These same yeshivas, and insurance possible patronage by the Soviet KGB . companies, are also heavily iQvolved in laundering funds for • Saul Steinberg, whose Reliance Corporation, has been narcotics interests controlling Bronx Democratic boss Stan­ implicated in both the New York City municipal scandal, and ley Friedman, convicted in late November of racketeering. also involvement with the Brooklyn-based Soviet Jewish ma­ fia. The Fisher machine • Sam Belzberg, the Canadian-based real estate opera­ The most revealing Mossad post which Boesky has held, tive tied to the Bronfman family. however, is as financial director of the Republican National • Lawrence Tisch, who worked with Boesky to take over Committee's National Jewish Coalition. The NJC and its CBS. Sen. Jesse Helms (R-N.C.), who is funded by Fisher predessor organizations had been formed by Max Fisher­ and Boesky, provided the flimsy conservative cover for this the NJC's honorary chairman-largely to ensure that the operation, by arguing that this Mossad raid against CBS Reagan administration would never try to buck the Mossad somehow targeted the "Eastern Establishment." faction headed by Ariel Sharon. Some EIR readers may recall the curious role that Max New York Mossad money Fisher played at the 1980 Republican National Convention, When Jonathan Jay Pollard was caught red-handed steal­ when he insisted that former President Gerald Ford be named ing U.S. classified documents for Israel, investigations by as Ronald Reagan's running mate in the 1980 general elec­ EIR quickly confirmed that Pollard was "handled" by Israeli tion. Fisher, and his associate Henry Kissinger, also became spymaster, and former Sharoncampaign manager, RafiEytan, notorious for demanding that Ford become Reagan's "co­ and that the New York crowd including Riklis and Boesky, President," with jurisdiction over foreign policy. Although used the Eytan network to smuggle U. S. secret documents to Fisher lost out in that battle, the incoming administration was Iran, amoung other locations. forced to accept a number of Mossad-linked operatives in Boesky was identified by our sources at the time as a key posts, as part of a compromise with the Fisher faction of leading figure in the Israeli Mafia�Mossad's financial appa­ the Republican Party . Among the individuals which the ratus in New York , whose key fronts , include the various administration accepted in this deal was Michael Ledeen, firms associated with Riklis, Tisch, Belzberg, et aI., as well who went from being Alexander Haig's assistant during Haig's as the New York branch of the Israeli-based Bank Leumi. tenure as Secretary of State, to being a consultant to the This Mossad financial network also includes several key Zi­ National Security Council (NSC) on Iran . Ledeen was the onist and Jewish philanthropies, most notably the United key go-between for the Mossad-NSC arms sales to Iran, now Jewish Appeal (UJA) and the Jewish National Fund, who being exposed in the "Iran-gate" scandals. He was also, it is hide behind their charitable and politically sensitive status, believed, central to the diversion of Mossad-NSC funds and to run several unwholesome operations. arms to the Contras. Since emerging as a major Wall Street player, Boesky One of the key mechanisms used by the Fisher-Mossad has positioned himself in several of these Mossad-"banker's network in maintaining the capacity for installing such fig­ CIA" linked phil anthropies, including a two-year stint as ures as Ledeen in the Reagan administration , is the Boesky­ campaign chairman of the United Jewish Appeal-Jewish Fed­ funded NJC. The NJC is the architect of the so-called "new eration of New York fundraising drive. Boesky's patron, right Jewish voting block," which has been swung to vote Max Fisher, had earlier gained notoriety in Israel, when it Republican in exchange for administration support of Israel was discovered that a sizable chunk ofUJA cash was diverted on its terms. One example of NJC operations is the conver­ away from Israel, during the long period he chaired the or­ sion of Sen. Jesse Helms into a strong supporter of Israel's ganization. Boesky has also been a major fundraiser and Sharon , afterre ceiving massive funds from the NJC and from board member of the Simon Wiesenthal Center of Los An­ Boesky personally. geles, and Yeshiva University of Los Angeles. Both institu­ Vigorous pursuit of the Boesky case, combined with ex­ tions were founded by Boesky' s partners , the Belzberg broth­ posure of the true story of the Bar-Am, Pollard, and NSC ers. Every key scam artist associated with Drexel Burnham rings, could shape the outcome of the factional warfare now is on record as a lavish Wiesenthal Center contributer. raging in Washington, and whether the administration will It is also a matter of record that these same charities and break with the Mossad factions which have penetrated it.

8 Economics EIR December 5, 1986 Currency Rates EIR The dollar in deutschemarks Special Beport New York lale afternoon fixing

1.30

An Emergency 1.10 War Plan to Fight 1.10 ..., - 1.00 � /' �

AIDS 1.90 10/7 10/14 10/11 10/ll! 11/4 JllII JIIIS 11125

EIR's Biological Holocaust Task Force has prepared The dollar in yen the world's only science-intensive "Emergency War New York lale afternoon fixing Plan to Fight AIDS." The newest discoveries of opti­ cal biophysics and advanced laser technology can 190 improve diagnosis and lead to research break­ throughs-if governments move now. The War Plan begins with the President of the 180 United States, in his capacity as civilian leader and commander-in-chief, declaring a War on AIDS and 17. invoking National Emergency powers to avert disas­ ter. In parallel, heads of state of other nations of - 160 .- 111..""'- the Western alliance shall declare war on this ", scourge to mankind. ,../ 158 A ISO-page Special Report for governments, sci­ 1017 10/14 10/11 10Ill! 1114 JllII 11118 11115 entists, public health officials, and all citizens con­ cerned with a policy to fight AIDS. before a The dollar in Swiss francs pandemic wipes out millions. New York late afternoon fixing Contents I. The emergency war plan to fight AIDS and other 1.00 pandemics

II. The real story of AIDS in Belle Glade. Florida 1.90 III. AIDS in Africa: the unfolding of a biological holo­ caust 1.80

IV. The biology of AIDS 1.70 V. Flow cytometer and other laser technology poten· tial for combatting AIDS i-""'" 1"00.. 1.60 ...... VI. The relevance of optical biophysics for fighting 10/7 10114 10/21 10/28 JII-l JIllI 11/18 11125 AIDS: designing a Biological Strategic Defense Ini­ ./ tiative (BSDI) The British pound in dollars VII. How Kissinger and Pugwash destroyed America's New York lale afternoon fixing biodefense against AIDS and other deadly diseases

VIII. The Soviet command and control of WHO's AIDS I.SO Policy

IX. Why the Reagan administration has tolerated the -- 1.40 -- � � CDC cover-up of the AIDS pandemic

X. The necessary public health program to fight AIDS 1.30

$250.00. Order from: EIR News Service, P.O. Box 1.10 17390, Washington, D.C. 20041-0390. Order #85020 1.10 10/7 10/14 10/11 10/28 I Jl4 I Jill 11118 11/25

EIR December 5, 1986 Economics 9 EIR Regional Study u.s. policy and the economic time-bomb in Central America by Gretchen Small

Two events, one after the other, have struck down any re­ ragua-well-armed indeed by Moscow. Likewise, the U.S. maining facade that the Reagan administration has a strategy -military has been held back from providing the equipment to stabilize Central America. The first blow came on Nov. and logistical and intelligence support required to crush the 14, when U.S. State Departmentof ficialsreported that a $300 drug-traffic which supports every terrorist insurgency in the million special economic assistance package for U. S. allies region. in Central America had been cut from the budget. The aid And while the military balance worsens between Nica­ was promised last spring as proof that the United States has ragua and its neighbors, so have the insurgencies inside Cen­ a broader commitment to helping Central America defend tral America, growing in strength in proportion to the col­ itself from Moscow's Nicaraguan client-state, than simply lapse of their economies. Without an economic strategy, the supplying and commanding the rag-tag, drug-tainted Contra United States finds itself loc�ed into Moscow's box: either "army." directly intervene against Nicaragua, or discard Central Assured of extra economic aid, the Central American America to the mercies of the Sandinistas. With either of governmentsjo ined the United States in backing the "Contra" those two options, it is Moscow's global strategy of driving operation. The Contras got their $100mill ion, but U.S. allies the United States out of Europe, and into wars against the in Central America have been sacrificedto "budget cuts." southernhemisphere , which wins. Then, on Nov. 25 , came the revelation that profits from The lOOthCongr ess must restore the $300 million special the sale of U.S. military equipment to the Sandinistas' ter­ economic assistance fund for Central America. Then, inter­ rorist allies in Iran financed Contra weapons-buying, before national support for economic reconstruction must begin. the U.S. Congress had approved U.S. support for the Con­ Here, the advocates of Hong Kong-style "free-enterprise" tras. policies must be pushed aside , and more attention paid to More shocking scandals lie ahead, if congressional in­ proposals by U.S. military men responsible for the area, who, vestigators take up the unresolved Pia Vesta case, the Danish like Gen. John Galvin, have argued quietly for a solution to ship found to be carrying 200 tons of Soviet-made weapons the "debt problem," and aid to the necessary "nation-build­ when it was stopped in Panama in June 1986, en route to EI ing" projects around which military and civilian forces can Salvador. The Contras were the final destination of those unite. Soviet weapons, and U.S. National Security Council staffer Here we demonstrate how Central America has been Lt. -Col. Oliver North's name was associated with the deal, drained of resources, by Western usury and malfeasance. investigations in Panama and Peru subsequently determined. The first step to restoring economic health must be to rechan­ Soviet-made weapons, sold by the East German state nel those resources into internal improvements of Central tradingcompany to reputed CIA-arms dealer David Duncan, America's infrastructure and economies. Without freezing to arm the Contras? In its Aug. 29 issue, EIR published the debt payments, and renegotiating long-term, low-interest details of the Pia Vesta scandal, but the news met with si­ payments, no growth or development can occur. That step lence, a story "too incredible" to touch. Now, nothing can be alone can begin to tum the tide on the crisis, as President called"too incredible" in Washington. Alan Garcia has demonstrated in Peru. The collapse of the Contra option forces the U.S. govern­ ment back to the drawing board, to develop a viable strategy Debt freeze for EI Salvador to stop Moscow's advance in the Western Hemisphere. The The "Garcia option" is under discussion among the gov­ policy change is long-overdue. Supplies have been wasted erningci rcles in each of the four Central American countries on the Contras, while the armed forces of the rest of the Guatemala, EI Salvador, Honduras, and Costa Rica. In mid­ region have not received the aid and training needed, so that, October, Costa Rica initiated steps toward limiting its debt if required, they could confront the military threat of Nica- payments, when Treasury Minister Fernando Naranjo in-

10 Economics EIR December 5, 1986 formed international private banks that Costa Rica will pay until recently the country's second exportcrop ! Over 50% of no more than $5 million a month in interest on its foreign thepopulation is unemployed or subemployed (in such "j obs" debt, while negotiations continue on rescheduling its $1.5 as selling trinkets in the streets). billion debt. Only ifpayment of its debt is stretched out over The morale of the population is now at a turning point. 25 years, with 7 years grace, can Costa Rica accelerate growth Immediately afterthe quake, Communications Minister Julio rates to levels at which social disintegration can be avoided, Rey Prendes had identified this time as the beginning of the the treasury minister explained. most serious crisis. We have survived the first shock, Rey In the case of EI Salvador, rapid U.S. action is urgent. Prendes warned, "but in one, two, or three months, when Although no longer in the international news, governing in­ things do not improve, I don't know what could happen. stitutions in that nation stand more endangered now, than in Things could get very ugly." the immediate wake of the earthquake which destroyed one­ How quickly a debt moratorium is granted, and how third of San Salvador, the country's capital, on Oct. 10. The much Western nations commit to the country 's rebuilding, nation rallied behind the government right after the quake. may determine how long the government survives. The 1,300 people died, and an estimated 30,000 were injured. premise of the insurgent forces is that the West will provide Many of the injured are now recovered, but a quarter­ only token aid. A political spokesman for the Faribundo million people still live in the streets, their homes destroyed. Marti Liberation Front, Guillermo Ungo, stated bluntly on The quake and more than 1,000 aftershocks hit the poorest Oct. 16, "The government has no possibility of overcoming areas of the city the hardest, where homes were poorly con­ the crisis." Ungo was in Bonn, West Germany at the time, structed. Because 50 to 60% of San Salvador's schools were attending a conference of the Socialist International. The destroyed, schools are not scheduled to reopen until Febru­ General Command of the FMLF issued a "Message to the ary . Forty percent of the National University of San Salvador People," outlining their strategyfor recruitmentand victory. was destroyed; the buildings housing the Faculties of Eco­ "This onslaught by nature again highlights the subhuman nomics and Odontology collapsed entirely. conditions under which millions of Salvadorans live, " the Total damage has been estimated at between $1 and $2 message stated, promising that they will defend the interests billion. Many streets are still impassable, wrecked by flood­ of poor urban workers whom the government will abandon ing when water pipes broke throughout the city. While EI to live in the streets. Salvador's two cement factories have been able to keep up Will recent history repeatitself ? An earthquake devastat­ with the demands of reconstruction, the country has run out ed Nicaragua's capital, Managua, in 1972. The city was of wood, which the governmentis now importing from Hon­ never rebuilt, and today, it is the Sandinistas who ruleover duras, Costa Rica, and Guatemala. the monuments to Western economic failure . After the earthquake , President Jose Napoleon Duarte told the press that EI Salvador should ask for a postponement The narcotics threat on its foreign debt, calling it "a magnificent opportunity to While El Salvador's situation is desperate, a less men­ do it," because EI Salvador has "always been good paying tioned but equal danger faces the other countries of the re­ clients." The idea, however did not prosper, and EI Salva­ gion: takeover of the entire regional economy by the narcotics dor's central bank now argues that there is no need for any empire. As productive economies shrivel up, drained of re­ postponement. sources, the narcotics trade has moved in. Initial international help, both medical and financial, did Private-sector leaders in El Salvador reported to EIR in allow EI Salvador to get through the immediate crisis, and September that large landowners have turned to marijuana delegations of private businessmen are now seeking loans production, to make a fast buck; cotton and coffee no longer and investments in the United States, Europe, Taiwan, and are profitable. Costa Rican officials believe their nation has Japan. But nowhere near the $1 billion needed has been made become the third-largest drug-money laundering center in available. Central and South America, according to the Midyear Report EI Salvador must reconstruct, under conditions ofgeneral of the U.S. State Department's International Bureau of Nar­ warfare . War has steadily spread throughout the countrysince cotics. 1979, when Soviet-backed forces, "Iiberationists" run by the Cocaine Czar Juan Ramon Matta Ballesteros, a partner Society of Jesus and the CIA's American Institute for Free of the Sandinistas in the cocaine trade, has relocated his Labor Development (AIFLD), joined forces to trigger civil headquarters to Honduras. In April 1986, Honduran Eco­ war under the protection of "population war" fanatics in the nomics Minister Reginaldo Panting declared, "We welcome Carter administration. Now, the defense ministry absorbs the dollars that Mr. Matta Ballesteros has brought to invest 40% of the national budget. Agriculture has been destroyed in Honduras ....If we have an investor who brings dollars, by the combined effects of credit restrictions, collapse in then this will help us in our balance ofpaymen ts," according commodity prices, and disruptions of transport, field, and to El Tiempo of Bogota. Panting told EIR at the time that he labor by war. EI Salvador began importing cotton this year, was just "joking around" when he made those comments.

ElK December 5, 1986 Economics 11 Domestic Product of about $28 billion, almost $4 billion per year-or 13%-was looted from the Central American econ­ omies. This IMF "earthquake," this man-made disaster, is also The facts : what profoundly destabilizing the region and creating the condi­ tions for the spread of Soviet-inspired insurgencies. The IMF the robbed is, without doubt, the Soviet Union's best strategic ally in the IMF whole region. As Fidel Castro recently confidedto an Ibero­ American diplomat: "No, we have no need to export revolu­ by Dennis Small tion any longer; the IMF does it for us. " Why then, one rightly asks, does the Reagan administra­ The earthquake which struck EI Salvador on Oct. 10 left the tion fully back IMF policy in Central America, in all of Ibero­ nation's capital devastated, with the damage done to the America, and in the whole developing sector? Salvadoran economy estimated at over $1.5 billion-more This was the question most insistently asked of Schiller than one-third of the country's GNP. Institute representatives who traveled to the Central Ameri­ But no one has yet commented that the level of devasta­ can nations of Guatemala and Honduras in October to present tion produced by the Salvadoran earthquake, although hor­ these findings, and to publicize the recently issued Schiller rifying, is less than one halfof that wreaked on the war-tom Institute Spanish-language book, Ibero-American Integra­ economies and social fabric of Central America everyyear, tion: 100 Million New Jobs by the Year 20001 at meetings by the International Monetary Fund (IMF) and the region's with local businessmen, government officials, military lead­ international creditor banks. Concretely, new calculations ers, and others. made by a Schiller Institute research team show that between Perhaps the most shocking finding of the Ibero-American 1978 and 1985, out of a total average regional yearly Gross Integration book is the fact that the region's legitimate debt was calculated to be only $20.5 billion-about 5% of the total offi cial foreign debt of $370 billion. The remainder was

FIGURE 1 Honduras: legitimate and illegitimate

foreign debt FIGURE 2 1978-85 Guatemala: legitimate and illegitimate (billions of dollars) foreign debt 1978-85 5 (billions of dollars) 5 4

4 3 2.450 3 2.45 2

2

Interest on o illegitimate debt = .5

o -1

Ul - 1 -1.5 ::I e. ::I en -2

illegitimate debt -3 -4 illegitimate Debt - 3.75 -5 �------4 �______1978 1979 1980 1981 1982 1983 1984 1985 1978 1979 1980 1981 1982 1983 1984 1985

12 Economics EIR December 5, 1986 detennined to be the product of four factors , which piled up billions of dollars of illegitimate debt on the Ibero-American nations: I) Deteriorating terms of trade : From 1978 to 1985, the nations of Ibero-America lost billions of dollars because they had to pay more for the same physical volume of imports , and received less for their exports; 2) Usurious interest rates: International interest rates skyrocketed after 1977, which cost the debtors further billions in these interest overcharges; 3) Flight capital: Taking advantage of the lack of exchange controls, countless billions fled Ibero-Amer­ ica between 1978 and 1985; and 4) Interest on the illegitimate debt: Compound interest payments on the above three categories also accounted for a sizeable growth of the overall in­ debtedness.

Applied to Ibero-America as a whole, these four cate­ gories accounted for almost 95% of the official debt-leav­ ing only $20.5 billion as the legitimate remainder. Yet for most of the nations of Central America, the results are even more dramatic: The "legitimate debt" figure turns out to be

FIGURE 4 FIGURE 3 EI Salvador: legitimate and illegitimate Nicaragua: legitimate and illegitimate foreign debt 1978-85 foreign debt 1978-85 (billions of dollars) (billions of dollars) 5 5

4 15 4 Q) 15 a Q) a Terms of trade 3

3 loss = 1 ,4

2 2

Flight

capital= 3,5 o o

-1

"0 � -2 �'« a. � :; <>'/� en � -3 .,� -3 �c Illegitimate debt Illegitimate debt ��" -4 -4

- 5�______� _ 1978 1979 1980 1981 1982 1983 1984 1985 1978 1979 1980 1981 1982 1983 1984 1985

EIR December 5, 1986 Economics 13 negative, which is to say that those countries would not only today wouldn't have a foreign debt of $2.45 billion, but have had no foreign debt, but would have had net savings, would have savings in the bank of $1.5 billion. had they not been looted by these four mechanisms. Stated otherwise, Honduras had $4 billion looted out of Take the case of Honduras (Figure 1). As Schiller In­ its economy between 1978 and 1985 through these mech­ stitute representative Carlos Cota explained to a rapt audi­ anisms, out of a total cumulative GNP of $24 billion-that ence of businessmen in that country in October (see article, is to say, 17% of what the country produced was simply below), Honduras's entire official foreign debt of $2.45 stolen by the IMF and the international creditor banks. billion is accounted for by the dramatic decline in that coun­ The situation was not much better in neighboring Gua­ try's terms of trade over the last eight years. Stated other­ temala (see Figure 2). The most populous of the Central wise, if over this period Honduras had received stable unit American nations, and by far the largest economy, Gua­ prices for its exports and paid stable unit prices for its temala's total official debt in 1985 was $2.45 billion. It too imports, it would have saved $2.45 billion-enough to repay suffered a dramatic deterioration in its terms of trade , leading the entire foreign debt ! An additional $500 million was to net loss over the eight-year period under consideration sucked out of the country in service on the illegitimate debt. of $3.5 billion. And about $2 billion leftthe country through And another $1.0 billion in flight capital similarly left the capital flight in this period, according to conservative es­ country. timates by local bankers and businessmen. These factors, The fourth factor in the Schiller Institute study, usurious along with compound interest on the illegitimate debt, means interestrates paid over the 6.8% level of 1977, turns out to that-under an equitable international economic order­ have had minimal effect for Honduras (this pattern holds Guatemala would today have' $3.75 billion saved. for the other Central American nations as well, and is thus The situation in Nicaragua and El Salvador is even worse excluded from all the graphs). All in all, had it not been (see Figures 3 and 4). Besides suffering a terms of trade for these factors in generating an illegitimate debt, Honduras

FIGURE 6 Panama: legitimate and illegitimate FIGURE 5 foreign debt 1978-85 Costa Rica: legitimate and illegitimate (billions of dollars) 5.15 foreign debt 1978-85 5 (billions of dollars)

5 4

4

Interest on 3 illegitimate 2 debt =.95

2 1.5

o

o -1

-1 '" :::l e. :::l CJ) - 2

illegitimate debt illegitimate debt - 3 - 4

- 4 �------______- 5 �______1978 1979 1980 1981 1982 1983 1984 1985 1978 1979 1980 1981 1982 1983 1984 1985

14 Economics EIR December 5, 1986 drain like their neighbors , these two countries have had the Sandinistas, while a similar amount of capital fled the relatively enormous amounts of capital flight, since they are country during this same period. And in EI Salvador a total the countries most directly affected by civil war. Thus, of $6.8 billion of illegitimate debt was generated-the larg­ Nicaragua's foreign debt has grown by $3.35 billion under est amount of any country in the whole area. This corre­ sponded to a drain of nearly a quarter of each country's GNP over the 1978-85 period. The picture in Costa Rica and Panama (see Figures 5 and 6) is skewed by the fact that both countries are important FIGURE 7 centers of international financial activity, much of it re­ Central America: legitimate and illegitimate portedly related to the South American drug trade , and they foreign debt 1978-85 therefore show capital inflowsat least equivalent to outflows (billions of dollars) during the period under review. Thus, in our graphs we 22 have depicted no net flight capital for these two countries. The terms of trade decline, however, hurt them both badly. 20 If one adds up the figures for the six countries of the Central American isthmus (see Figure 7), there was a total official foreign debt in 1985 of $20.75 billion. A total of 18 $16.95 billion was lost due to the terms of trade effect; $4.61 billion was interest on the illegitimate debt; and $9 16 billion leftthe impoverished regionas flightcapital-adding up to a total illegitimate debt of $30.5 billion. Had Central America not been looted in this fashion, to the tune of 14 13% of its total GNP, it would today have almost $10 billion in deposits, rather than a large and growing foreign debt. 12 This $30.5 billion is an enormous bite out of theregional GNP, as Table I shows. In fact, fully 13% of total Central 10 American production over this eight-year period was looted out of this already impoverished and war-tom region-al­ most twice the average for all of lbero-America. 8

6 TABLE 1 GNP 4 Illegitimate debt and 1978-1985 (billions of dollars) 2 Total Total % GNP Country illegitimate debt GNP looted o Costa Rica 5.0 32.8 15% EI Salvador 6.8 32.8 21% - 2 Guatemala 6.2 79.7 8% Honduras 4.0 24.0 17% Nicaragua 4.9 22.4 22% Panama 3.6 35.2 10%

Total Central 30.5 226.9 13% America - 8 illegitimate debt Total 349.5 5,238.0 7% -10 lbero- America

1978 1979 1980 1981 1982 1983 1984 1985

EIR December 5, 1986 Economics 15 Honduras' basic import requirements for the year cost $900 million. "In sum," said Rosenthal, "we have a shortfall of $300 Honduras on the million for maintaining our imports. The internationalbanks are no longer lending, and our debts with the IMF are not brink of catastrophe subject to renegotiation; we must pay. As things now stand, someone will have to give us $300 million, because we can­ not get it from our trade." He revealed that IMF conditions by Carlos Cota Meza for any new loans included "devaluation of the lempira [the national currency], reduction of imports, and increased tax­ On Oct. 15, this writer was invited to address the First Hon­ es, none of which we can accept, because it would affect the duran Business Management Conference as a spokesman for lowest-income population, it would bankrupt national busi­ the Schiller Institute, which had recently published the book nesses, and we would lose the social peace we enjoy relative Ibero-American Integration: 100 Million New Jobs by the to our neighbors, whose state of affairs we well know." Year 2000. The conference represented, in microcosm, an That "state of affairs" is threatening to engulf the region. ongoing battle within Honduran leadership circles over how Indeed, the IMF proposal to devalue the lempira could only to save the country from the economic and social catastrophe benefitNica ragua, the Central American country which most spreading throughout the region. The battle lines were clearly imports Honduran products. drawn: The Schiller Institute urged breaking the stranglehold of the InternationalMonetary Fund over the Honduran econ­ Communism in 'Contra' guise? omy; arch-monetarist Luis Pazos demanded the dismantling Further, with the presence of thousands of Nicaraguan of any state-owned companies and insisted on continued ad­ Contras on Honduran territory and with the vast influx of herenceto IMF dictates. uncontrolled doll�s they bring with them, the economy of Honduras is a country of 5 million people. Of its 1.3 Honduras has seen an accelerated growth of inflation, along million economically active population, 900,000 are under­ with a serious scarcity of goods. The Reagan administration's employed or unemployed, according to Vice-President Jaime $100 million shot-in-the-arm to the Contras has created a Rosenthal-70% of the population! Its foreign debt of $1 black market in dollars in Honduras, functioning in much the billion in 1978 had grown to $2.4 billion by 1985. Its export way that the drug trade undermines any legitimate economy. income is shrinking, its economy destabilized by the Contra As one businessman told me, "With these dollars we are "invasion," and its government under intense pressure from seeing what happened to South Vietnam when the North the U.S. State Department to convert the nation into a U.S. began to introduce counterfeit dollars into their econo­ military base of operations. my ....Rea lly, we don't understand the U.S. policy toward My presentation to the country's 170 leading business us. They want to dismember Us economically. This is fighting and political figuresattending the conference focused on the against communism? It is dear that with such a policy, pre­ analysis presented in the Schiller Institute book, detailing the cisely the opposite will happen." implications of continued servicing of a largely illegitimate The U.S. State Department, with its IMF billy-dub, is foreign debt, and the solutions offered by a continent-wide not only aiding and abetting the communists in the region Common Market and debtors' front (see EIR's Operation with its contradictory policies in the economic and foreign Juarez series, pp. 42-45). The majority of those in attendance policy arena, but actively d�ploys against any alternatives had little trouble recognizing that continued adherence to being offered to the region. IMF "adjustment" policies meant social chaos, terrorism, a In the days prior to the Business Management Confer­ disintegration of government, and the advance of commu­ ence, when it was publicly announced that the Schiller Insti­ nism continentally. One high-level government official re­ tute would be sending a speaker, the U.S. embassy in Tegu­ marked to me afterwardthat he saw "no other alternative but cigalpa mounted a pressure campaign against the conference that of Alan Garcia"-referring to the President of Peru's sponsors to retract the invitation, a campaign which failed. insistence that domestic economic well-being has a higher However, much to the State Department's relief, the group priority than debt payment. did invite Mexican monetarist Pazos to speak. The speaker who followed me offered striking testimony When it came his tum to speak, Pazos demanded that no to the picture I had presented. He was Jaime Rosenthal, Vice­ one from the Schiller Institute be present, and then insisted President of Honduras. He observed that, given unreliable that Honduras' problem was not its foreign debt, but "corrup­ international prices for the coffee, banana, and meat that tion and the existence of state-controlled companies." It was Honduras exports, his country anticipated earnings of ap­ only later that Pazos discovered that his diatribe was viewed proximately $800 million this year. After servicing the for­ by many in the audience as an attack on the presentation of eign debt, net income was expected to be $570 million. Vice-President Rosenthal!

16 Economics ElK December 5, 1986 NEP, where the Soviet Union was opened for Westerncapi­ Poland tal , that Armand Hammer and others made their fortunesand established their networks, in joint ventures with Lenin's Russia. A series of recent articles published in the Polish press makes the Polish part of the NEP program more con­ Selling the nation crete: On Oct. 31, Henry Chadzynski wrote in the semi-official to pay the debt daily Zycie Warszawy: "Unless there is an acceleration in the growth of exports (and this is linked to an increase in produc­ tivity, a more efficient organization and a tighter work dis­ Part III by Tadeusz Rejtan: of a series cipline), not only will it be impossible to meet debt repayment obligations, but also to acquire the means to import supplies. Poland's huge foreign debt-over $3 1 billion-continues to This, in tum, is what production for the market, technological be one of the determining factors that shape the course of progress, and more generally, growth, depend on." internal political events as well as the country's relation to In clear text: export or die. Coming from the Polish gov­ the outside world. Recently, however, Poland's debt has ernment, that, as such, is not new. But, how to increase become an instrument in the hands of Gorbachov and his exports to repay the debt? Here we have something very new Polish allies: a means to impose a new version of Lenin's indeed. New Economic Policy (NEP) program, and its international A little earlier in October, the "Export -Import" economic correlative, a "New Yalta" world order. supplement of Polityka published an article by Stanislaw In itself, it is intriguing that General laruzelski's govern­ Gruzewski which said: "The possibility of increasing exports ment should choose to release a report on the state of the of those goods we now produce is insignificant. We need Polish foreign debt drafted by two authoritative economic new products that are in demand on the world market, and institutes. The findings of this report confirm the hopeless­ that our industry is presently unable to supply ... . without ness of the country's situation. Some facts will illustrate the op ening our industryon a large scale to fo reign capital, we point: will not solve this problem ." (emphasis added) Poland, with a per capita debt of $836, and a debt to export ratio of over 5: 1, belongs to the same category of Selling Poland-and Poles debtor countries as Argentina, Mexico, or Brazil. If one And the same Polityka , a weekly closely associated with considers only the debt to Western governments, less than the present ruling clique, added: "Our balance of payments half of total indebtedness, the compromise reached between can also be improved through so-called foreign currency the Polish government and the "Club of Paris" government transfers, among other things, by making it easier for our creditors cartel sets yearly debt service, 1986-89, at some $3 specialists to work abroad, by creating a favorable social and billion. This compares with a planned balance of trade sur­ economic climate for foreign corporations operating in Po­ plus of $1.5 billion, a goal which the authorities admit they land ....At the same time, we have to continue discussing cannot reach in 1986. And then there is the debt owed to with our Westerncreditors , not only to postpone repayment, commercial banks, which is constantly being rolled over to but also to increase the direct participation of our partners in avoid an open default. the solution of the Polish economy's developmental prob­ The above-mentioned report presents two scenarios, the lems." optimistic one not being worth mentioning, for it is but a So laruzelski is offering Western capital a cheap labor fairyland construction. According to the "more realistic" sce­ pool within Poland, and, Polish guest workers en masse: Not nario (3% yearly GNP growth, 4% exports growth), the debt satisfied with ruling a Soviet satrapy, he and his Party want will reach $40 billion in 1990, $55.7 billion in the year 2000 to tum Poland into a colonial plantation. Any Westerntrade­ and $65 billion in 2008. For the first eight months of 1986, unionist will recognize the meaning of "tighter work disci­ exports have decreased by 6% compared to last year, and pline" and a "more favorable social and financialclim ate." within the present parameters there is no hope for improve­ But there is more to this scheme. Beyond the economic ment. offer that is now being made, the strategic significance of Now, why are the rulers of the Polish province of the these openings should not be missed: Poland-or, to be more Soviet empire sending such a clear "we cannot pay" message precise, the prospect of billions of dollars of secured debt to Westernbanks and governments? repayments through "opening up Polish industry to foreign The answer is probably to be found in the praise for capital on a large scale" -is the bait the Russian Empire is Lenin's New Economic Policy recently published by Pravda . offering the West to get it deeply entangled in the nets of the As we shall see, Gorbachov's NEP theme has been endorsed New Yalta that both the Soviet and Western oligarchs are and elaborated in the Polish press. It was in the years of the negotiating.

EIR December 5, 1986 Economics 17 Report from Rio by Silvia Palacios

Cruzado Plan, take two growth, requires an investment of $5 The governmenthas reverted to IMF policies again, but some billion by 1989 to increase installed capacity. In October, Planning Min­ politicians prefe r Alan Garcia's approach . ister JoiioSa yad tried to obtain a $100 million credit for that sector and failed, despite Brazil having been a very punctual and obedient debtor. The banks refused it, demanding IMF ap­ proval before loaning anything. So, ess than a week afterthe electoral from the truth. In Brazil, an internal Sayad came home just like all the His­ Lvictory of the Brazilian Democratic black market has been created in which panic-American economic ministers, Movement Party (PMDB), the major­ animal protein foods like meat, chick­ with empty hands. ity party in the government alliance, en, eggs, milk, and other dairy prod­ However, the straw that broke the the Brazilian government used that ucts, which are difficultor impossible camel's back and triggered the dra­ political support to launch Phase II of to obtain at official prices, can be conian austerity was the spectre of an­ the so-called "Cruzado Plan." Phase bought at prices of up to 100% more . other 1982 debt crisis engendered by II is nothing other than a package of Nonetheless, the government de­ the eclipse of the trade surplus. The recessionary measures identical to cided to use the statistical trick of de­ surplus had been kept above $1 billion those prescribed by the International claring that inflationhas only been 10% a month. But, in September it fell to Monetary Fund (IMF). With it, the during the past nine months. At the $600 million and then in October to a governmenthopes to win the IMF seal same time, credit for industry is avail­ squalid $200 million. The $1 billion of approval for its upcoming renego­ able at interest rates of up to 100% and monthly surplus was the guarantee of tiation of Brazil's illegitimate foreign for personal consumption at 200%. punctual payment for the $13 billion debt. Half-hearted government efforts to in usurious intereston the foreign debt. The package includes: resuming punish financial speculators provoked On top of this, foreign reserves fell to minidevaluations of the cruzado cur­ many speculative "investors" to pull a bit over $5 billion, the minimum rency, which were suspended when out their deposits from the banks and tolerable. That flashed red alarms in the plan began on Feb. 28, 1986; in­ speculate in the real-estate market, Brasilia. creasing by 60% the prices of gasoline where fictitious values are climbing The austerity packet has gotten and alcohol fuel; increasing by 25% through the clouds, and in illegal dol­ broad sectors of the country quite up­ rates for electricity, telephones, and lars, which sell for 90% above the of­ set-not least the newly elected gov­ other public services; raising by 100% ficialexchange rate. ernors, who were voted into officeon the cost of drinks, cigarettes, and oth­ The false inflation statistics were the idea that there would be no changes er luxuries, in order to "punish con­ stripped naked with the announce­ in the Cruzado Plan. Three of them sumption." The government plans to ment of Phase II. Accordingly, the di­ ran to meet with President Jose Sarney use these tax increases to collect $11.4 rector of the national statistics service to propose to him that the foreign debt billion, most of which will cover the resigned. He protested that to hide the be dealt with the way Peruvian Presi­ public deficit, with a few crumbs to real inflation figures, the government dent Alan Garda has done. financeinternal inve stment. would base the in

18 Economics EIR December 5, 1986 Foreign Exchange by David Goldman

Washington's crisis and the dollar nomic wise men," heads of the major The rate of unraveling in the United States will make the dollar economic institutes, estimated fourth­ quarter economic performance much the principal victimJor the immediateJuture. lower than in previous forecasts. The sharp appreciation of the deutsche­ mark becauseof dollar policy is cited as a major factor affecting export or­ ders. The Munich IFO Institute re­ portstheir projection "shows an actual hile the dollar's fall Nov. 26 to When Assistant Treasury Secre­ stagnation in total demand of com­ Wless than DM 1.99 was widely attrib­ tary David C. Mulford, the White bined domestic and exports forindus­ uted to the worst-on-record durable Weld veteran who runs the interna­ try since the middle of 1985. " goods orders in October, there is no tional show at Treasury, warnedNov . Japan and, to a smaller extent, reason to attribute the erosion of the 12 of an "unsustainable economic sce­ West Germany, have enjoyed a rela­ U.S. currency's October gains to any nario," in which American deficits tive stability in a world trading envi­ particular economic news. cannot be financed forever, he re­ ronment, in which the only growth The Oct. 31 "economic coopera­ ferred to the inability of the Japanese since 1980 has come from the U.S. tion agreement" announced by U.S. and West Germans to bail the United trade deficit. The 40% appreciation of Treasury Secretary Baker and Japa­ States out forever. the mark and yen over the past 18 nese Finance Minister Miyazawa had The West Germans are beingasked months has hurt bothcountries badly. no discernible economic content. It to print money to bail out the dollar; The U.S. administration's continuing reflected a political decision by Ja­ the cosmetic version of this argument threat to force the dollar downward, if pan's government to give the White is to demand that they print money to its trading partners do not accept its House a reported 12 months to stabi­ stimulate their home economy. U.S. demands, represents a devastating po­ lize its economic position. officials regularly embarrass them­ litical weapon against West Germany Extreme skepticism on the part of selves when discussing the topic; in particular. The Kohl governmentis the Japanese, who were muscled into Mulford , in the Nov. 12 speech, said, facing elections early next year in the deal against their better judgment, "There seems to be a continuing mis­ which the economic decline will be a was matched by contempt on the part understanding about thenature of U . S. principal issue. of the West German monetary author­ expectations for Germany. We have However, the net effect of Trea­ ities, who seem more occupied with not been asking Germany to stimulate sury Department policy is to strength­ cobbling together an anti-dollar bloc growth through pump-priming and in­ en the hand of the monetary decou­ in Europe, than in supporting the fail­ creased government expenditures. piers at the Bundesbank, who look to­ ing U. S. currency. Rather, we have urged structural re­ ward a European monetary zone op­ As late as Nov. 25, the West Ger­ forms, including tax, labor, and finan­ posed to the United States; they are man Bundesbank denounced as "mere cial reforms, as well as reduced sub­ joined in this by former Chancellor speculation" reports circulating in sidies, that will provide longer term Helmut Schmidt, who is pressing Japanese newspapers, to the effect that incentives for growth." monetary decoupling in the context of the Germans would join a global deal In short, the United States is ap­ a projected "Grand Coalition" to fol­ with the United States after the elec­ plying political pressure against low next year's elections. tions. The content of the deal would friendly governments, demanding that Whatever these machinations im­ be that the foreign trading partners of they eliminate social programs, in ply, the currency markets are reflect­ the United States would continue to particular, on which those govern­ ing the chaos in the American econo­ buy dollars on the open market when ments' politicalstability is founded. my and in Washington. Under present no one else wanted them, printingtheir While the American recommen­ world circumstances, no economy is own currency to do so, and invest the dations are hypocriticalnonsense , the secure, and no currency represents a purchased dollars in U . S. Treasuryse­ problem is that the West German haven. However, the rate of unravel­ curities, financingboth the U.S. cur­ economy is, in fact, falling. In a report ing in the United States will make the rent-account externaldefic it, and the to the Bonn governmentNov . 25, re­ dollar the principal victim for the im­ Treasury's mammoth internalde ficit. garded as a "surprise," the "five eco- mediate future.

EIR December 5, 1986 Economics 19 Domestic Credit by David Goldman

The threat of 1930s-style deflation LTV Steel, one of the nation's top pro­ FederaL Reserve policy notwithstanding, the effort to avoid price ducers. Paine Webber, for example, pre­ fa lls now means more price fa lls in the fu ture . dicted on July 18, "The implication of the LTV bankruptcy is that flat-rolled steel prices, which have already fallen about $30 a ton in the 'spot' market since June due to the collapse of orders in the second quarter, will fall a fur­ ther $30 to $40 a ton. This would sharply boost the operating losses of all steel companies and raise further he USX strike, the Japan-U.S. ers, and the financial institutions who bankruptcy threats." Tsemiconductor agreement, the Cana­ lent to them were on the verge of a Among the major industrial com­ dian lumber tariff, and a variety of catastrophe that would have dwarfed modities, the electronics industrystood other seemingly disparate actions have the 1929-33 collapse. to suffer most from a price collapse. a common source: the threat of a de­ The longest-ever strike in the his­ The end of the computer boom, with flationary price collapse on the scale tory of the American steel industry has hard times for the "sunrise industries" of the 1930s. The Federal Reserve's produced no shortage of steel , and not of the early 1980s, reduced demand anxiety to avoid a 25-40% collapse in even an uptick in steel imports. On the for semiconductors; during Septem­ commercial real-estate values has been contrary , it appears that USX, which ber, semiconductor prices began to widely reported, as well as the finan­ locked out most of its workforce 117 collapse at an alarming 44% annual cial system's inability to sustain real­ days ago, forced the strike in order to rate . estate prices much longer. shut down sufficient steel capacity to One brokerage house warned in The problem with all of these mea­ avoid a price-collapse in the industry. September, "Japanese integrated-cir­ sures is that they further reduce the According to industry analysts, cuit prices are 21 % below a year ago real consumption level of raw and in­ some of USX's competitors, such as and keeping severe pressure on mar­ termediate materials, creating the number-two producer Bethlehem gins. . . . Inventories are 29 days conditions for even worse deflationary Steel, have seen a marginal increase supply as of June ....Prices are still pressures in the immediate future . In in orders. But most of the reported worsening, dropping at a 44% annual fact, the relative stability of prices be­ benefit to USX's competition has been rate during September. [We] recom­ tween July and October may have the result of price increases in most mend watching chip prices on a week­ ended with the fall of internationaloil steel categories. ly basis before purchasing any semi­ prices to below $15 per barrel, follow­ USX's lockout appears to have conductor stocks." ing Saudi Arabia's refusal to adopt ad­ been coordinated with the shrinkage At that point, the Reagan admin­ ditional production cuts Nov. 24. of European steelmaking capacity im­ istration stepped in with the suppos­ The prices of all raw and semi­ posed during the summer by the Eu­ edly "historic" trade-restriction deal finished materials, were in a tailspin ropean Commission, under the direc­ with Japan, to reduce Japan's semi­ by early summer, when physical pro­ tion of arch-cartelizer Viscount Dav­ conductor shipments to the U.S. mar­ duction began to fall at an annual rate ignon. The world steel industry stood ket. Domestic semiconductor prices of 15 to 20% in the United States. on the verge of a deflationary collapse stabilized, at least temporarily. The International MonetaryFund 's at the beginning of the summer, and Similarly, Canada's imposition of commodity price index in July stood responded with a brutal reduction in an export-tariff on lumber puts a floor

at only 69.3 (1980 = 1(0),against 77.4 capacity. under U.S. lumberprices . Temporar­ in March, a drop of 12% in four Some of the big Wall Street in­ ily high because of housing demand months-a 36% annualized rate. vestment houses warned in mid-July earlier this year, they stand to fall Meanwhile, the international oil that the steel price collapse then in drastically as housing starts keep fall­ pricehad fallen below $10 per barrel. motion could bring down the entire ing. The Canadians apparently decid­ The steel industry, oil drillers, farm- industry, following the bankruptcy of ed to take preventive action.

20 Economics EIR December 5, 1986 Agriculture by Marcia Merry

Farm trade surplus at 14-year low Mexican agricultural products and ex­ But the u.s. fo od imports andfo reign fo od investment are the portingonly $1.1 billion. In addition to raw and bulk food highest ever: the case of broccoli . commodities, processed food exports have dropped. U. S. processed food exports have fallen froma high of close to $13 billion in 1981, down to about $10.2 billion in 1985. At the same time, importsof processedfoods have he official statistics for the trade cessful farmers in North America, gone up to about $12.5 billion a year. yearT ended Sept. 30 released by the WesternEurope , Argentina, and Aus­ Imports exceeded exports beginning U. S. Agriculture Department. show tralia, and similar food-rich regions, in 1983. Between 1980 and 1982, pro­ that the U.S. farm trade surplus are being shut down and dispossessed. cessed food imports ran between $9.6 dropped to $5.4 billion , the lowest Take one example: During 1985, 22% and $10.3 billion, then shot up. level in 14 years . U.S. food exports ofthe frozen broccoli consumed in the During the same time period, total have dropped a full 40% in value since United States was imported, mostly foreign investment in U.S. food and 1981. from Brazil and Mexico, where fresh beverage manufacturing has nearly At the same time, foreign invest­ fruits, vegetables, and meat are need­ doubled. In the past four years, it has ment in U.S. food processing and im­ ed desperately to upgrade diets at gone up to around $11.2 billion. More ports of raw and processed foods into home . These nations also export beef foreign investment is going into food the United States have increased year­ to the United States. processing than any sector except ly. The United States has now become This illustrates that the U. S. food chemicals. For example, Mitsui & a food-dependent nation, in contrast import pattern is not based on a ration­ Co. , U.S.A.-the fourth-largest grain to the potentiality of the postwar U . S. al profileof tropical and semi-tropical exporter out of the U.S. -now wants farm sector which was to be the source products-coffee, tea, cocoa, spices, to acquire food-processing businesses of know-how, breeding stock, and tropical fru its, and other farm com­ serving the Americanmarket with es­ high-nutrition foods (animal prote­ modities needed for import into the tablished U.S. brands. The Com­ in-meat and milk) to transform food northern latitudes. The United States merce Department will hold 14 semi­ output and nutrition levels around the is importing what should be consumed nars this year to help encourage for­ globe. in the country of origin, and what could eign investment. In New York, a top Just the opposite has happened. be more easily grown at home. Broc­ dairy-producing and processing state, The United States is becoming as food coli is a classic example of how topsy­ with a big market for all types offood, dependent as the Roman Empire, dur­ turvy the trade patternsare . It is a cool foreign companies employ one in five ing its last miserable years of decay. weather, late harvest, cabbage-family of the state's food workers . This is no "accident" or "over­ crop, popular in the diet patterns of The patternis the same for the most sight" of policy makers. The food car­ northernEurope . common foods. In the past 10 years, tels-traders in grain and other key U.S. agriculture exports were there has been a fivefold increase in commodities-have influenced gov­ $26.3 billion in the year ending Sept. tomato product imports. ernment farm , trade and foreign poli­ 30, down 16% from the previous year Also, specialty fresh food imports cy to coordinate virtual slave-labor and down 40% from a 1981 record of have increased. Sales of Norwegian production in poor nati ons, and to bro­ $43 .8 billion. U.S. imports of agri­ fresh salmon have increased in the ker these products to distribution cultural products rose by 6% to $20.9 United States by 20% a year in the last channels in the United States and billion. For three months this year­ three years. Flying Foods Internation­ Western Europe, while cartel-related May, June, and July-farm imports al, Inc., in New York, brings in fresh banks are getting usurious debt pay­ actually surpassed exports for the first sole from Dover, U.K., turbot from ments from the foreign currency eamed time since 1959. the Netherlands, red snapper from in this trade flow . The United States posted a record South America, radicchio from Italy, The result is that poor nations are agricultural trade deficit with Mexico and off-season fruit, such as kiwis from further impoverished, and once-suc- in fiscal 1986, buying $2 billion in New Zealand.

EIR December 5, 1986 Economics 21 Business Briefs

InternationalTrade negotiated by the head of Barclays Bank in ral , given the social and economic condi­ the sale of their assets to the South African tions on the continent" of South America. Soviet 'new economic Oppenheimer interests, one consultant to the Radio Moscow said that investments South African Federal Reserve Bank said, from the advanced sector are at their lowest policy' to affect trade "With friends like these, who needs ene­ level in decades in South America and that mies." the advanced-sector nations have imposed Soviet leader Mikhail Gorbachov's "new "But a pullout this big must have some­ prohibitive tariffs on goods from South economic policy" will soon begin to have thing big behind it." It is expected that Bar­ American countries. effects on Soviet foreign trade policies. A clays will withdraw from the so-called debt The conference participants "denounced U.S.-Soviet trade conference held in mid­ standstill between South Africa and its short­ the United States for escalating the arms­ November in Moscow discussed forms of term debt creditors, signaling a possible es­ race," claiming that the money spent on ar­ joint ventures, including jointly owned pro­ calation of financial warfare . maments, would be better spent on devel­ duction facilities in the Soviet Union. South Africa's announced policy is to opment. Finally, Radio Moscow said, the According to a spokesman of the con­ answer serious economic warfare with a debt participants denounced U.S. actions in Nic­ ference, "The Soviets are also reorganizing moratorium. Debt discussion meetings had aragua. their foreign trade system by giving direct been scheduled for April 1987. export and import authority to some local enterprises and ministries. . . . The first The 'Recovery' phase, beginning in January 1987, will in­ Management volve the granting of direct trading authority to a group of 20 ministries and 67 enterpris- Japanese, German Just what the space es." growth rates down The European Economic Commission program doesn't need on Nov. 24 received a letter from Soviet The Japanese economic planning agency is Foreign Minister Eduard Shevardnadze, of­ An article in the Nov. 22 Sunday Washing­ revising downward its official economic fe ring exploratory talks between his govern­ ton Post Magazine reports that Mona Tycz, forecast for fiscal 1986, a governmentsource ment and the European Community, the ex­ a NASA engineer at the Goddard Space flight reported Nov. 12. istence of which the Soviet Union has never center in Greenbelt, Maryland, convinced The Japanese economy is unlikely to officiallyre cognized. her supervisors to hire Werner Erhard and reach its goal of 4% growth. It is more likely two associates from his firm Transforma­ that growth will be in the 3.5-3.8% range, tional Technologies Inc., to hold sessions the source said, according to the Japan South Africa with 47 managers of the center. Times. This was the first time that a top Forty-five thousand dollars later, Tycz government official admitted that the offi­ reports: "What surfaced is the need for a cial growth target might not be met . Kodak pullout whole new arena of mastery in manage­ Meanwhile, West German economic hurt economy ment, one that comes to grips with the phe­ growth estimates have also been lowered to nomena of the dance between an organiza­ below 2.5%. In a report to the government tion's cultural capacity and the unfolding of regarded as a "surprise," the "fiveeconomic Eastman Kodak is withdrawing under terms program accomplishment. It's not a prob­ wise men," heads of the major economic that one analyst called "the stiffest" of any lem that needs to be fixed. It's an opportu­ institutes, estimate the economy's fourth­ U . S. firm so far. Kodak, one of the longest­ nity ...that hasn't been available in the quarter performance will be much poorer established foreign firms in South Africa, past because it wasn't needed in the past. It than previously expected. announced on Nov. 19 that its assets in South speaks to where we are." Africa would be liquidated by next April 30, and that no Kodak unit in the world would be permitted to supply products to South Development Africa. Foreign Debt Azar Jammine, chief economist of the Gandhi organizes Johannesburg-based Econometrix market­ Soviets back ing and mar�et research firm, said that local Africa fund companies would find it virtually impossi­ debt symposium ble to replace Kodak's products and tech­ Indian Prime Minister Rajiv Gandhi set up nology. Radio Moscow reported favorably Nov. 21 an "AfricaFund" at the Harare, Zimbabwe This is an example of the "technological on the proceedings of an "international debt summit of the Non-Aligned Movement. The rundown the country is likely to experience symposium" in Argentina. The conference purpose, Rajiv said in recent statements, is as a result of disinvestment," Jammine said. called for "refraining from paying foreign to provide the front-line states, those Afri­ Meanwhile, in connection with the terms debt," and treating foreign debts as "immo- can nations bordering South Africa, with

22 Economics EIR December 5, 1986 Briefly

• 'THE SPANISH government infrastructure and communications, to free es of AIDS have been reported in Japan, the suspended certain sanitary standards their economies fromtotal dependence upon editorial states, but recently an infected Fil­ for meat imports," the Spanish daily South Africa. ipino woman working in a bar exposed at E1 Pais wrote on Nov. II. This means Gandhi has placed one of his top people least 50 men to AIDS. "Japan can no longer it will not be obligatory toindicate on on the Fund full-time, and Indian engineers stand aside from the campaign against the meat the date the animal was are already in the front-line states drawing AIDS," the editorial states. slaughtered. Spain is also permitting up feasibility studies for infrastructure proj­ fruit imports from Eastern countries, ects. which have been rejected by other EC The Africa Fund includes India, Peru, The Debt Bomb countries for fear of contamination Algeria, Nigeria, Congo, Zambia, Zim­ after the Chernobyl nuclear disaster. babwe, and Yugoslavia. Efforts by the Cu­ bans and North Koreans to join the Fund Mexican debt • PERU'S JUAN REBAZA was were blocked by Gandhi, since he wants the piling up promoted from general manager of Fund to organize funds for African devel­ Pesca Peru, the state-owned fishing opment from the United States and Western and seafood-processing company, to Mexico will have sent $100billion abroad Europe. chairman of the board, at the end of in interest payments during this decade, if it Pressreports from Harare said the Africa November. Rebaza was a founding pays its debts as contracted. That is much Fund's purpose is to establish a fund for member of the lbero-American Trade more than all the loans received between military armaments, etc. , for the front-line Union Commission of the Schiller In­ 1976 and 1986. states. But Gandhi says this is not the case. stitute. The fishing industry plays a The Mexican governmentplans $40 bil­ key role in President Alan Garcia's lion in new public debt in 1987, according economic recovery programfor Peru. to the plans that Finance Minister Gustavo Petricioli presented the Congress Nov. 19. Biological Holocaust • GOODYEAR TIRE & Rubber A planning ministry official told UPI, "It Co. announced on Nov. 21 that it has been decided to adopt a series of accords would close its Kelly-Springfield Tire AIDS hits which would permit obtaining enough re­ operations in Cumberland , Mary­ sources for the new plan. " thousands in Japan land. The shutdown will put up to Mexico is spending far more than budg­ 1 ,675 people out of work-about 5% eted for debt service. By the end of Septem­ There are 11,000AIDS virus-carriers in Ja­ of Cumberland's workforce. Cum­ ber , it had paid 7% more than the entire berland officials said the closing pan, according to Takashi Kitamura, Direc­ year's allocation for interest and 23% more would hit the local economy hard. tor of the Departmentof Enterovirusesat the than the total for amortization. National Institute of Health. Kitamura's "It's going tobe abad periodof time," statements were reported in the Japan Times said Mayor George Wycoff, Jr. "From Nov. 21. McDonalds to Sears-Roebuck, the Twenty-one full blown cases have oc­ Africa impact is going to be felt. " curred to date, with 13 dead. Kitamura said he expected the AIDS cases to reach I ,500 Buthelezi harsh • TEXAS has recently been hard in three years. hit by a new wave of layoffs. Penn­ The known cases include IO homosex­ against sanctions zoil, in Houston, has announced it uals and II hemophiliacs, but the reluctance will lay off 330 employees, after hav­ of Japanese homosexuals to admit that they Gatsha Buthelezi, chief minister of Kwa­ ing laid off600 earlier this year. Tex­ could beAIDS carriersis hamperingcontrol zulu/Natal met Nov. 24 with President Rea­ as Instruments is laying off over 200 efforts. gan and cabinet members, telling them di­ people at its Stafford semiconductor The Japanese Health and Welfare Min­ vestment and sanctions against South Africa plant, as part of a previously an­ istry has approved production of an AIDS could spark more violence. Speaking at the nounced layoff of 1,000 employees test drug. The drug, developed by Fuji Re­ National Press Club, Buthelezi said: worldwide. bio, Inc. , in cooperation with Yamaguchi "It would be a very grave mistake if the University, reduces the time needed to de­ United States opted out of the situation. . . . • ARGENTINA'S economy col­ tect AIDS from the 3 \1'2 hours needed by In the long term, sanctions and divestment lapsedin October. Most dramaticwas conventional methods to 2 hours. can only benefit those who believe that vio­ steel, down 18%. Electricity con­ "AIDS: The Growing Threat" was the lence is the answer in South Africa. More sumption in textiles was down 6.6%, lead editorial of the Japan Times on Nov. desperation will be created by escalating food products 2.4%, wood products 17. Although repeating the "sexual and poverty. " 2. 3%, chemicals 7. 2%, and basic shared needle" transmission line, the edito­ A White House spokesman said Rea­ metals 13%. Capital goods fell by gan's IO-minute meeting with Buthelezi was II% from the previous month. rial states that no country or people can iso­ ' late themselves from AIDS. "Only 21" cas- warm and cordial.

EIR December 5, 1986 ' Economics 23 TIillFeature

The difference between LaRouche and Teller's '5 role in creating SDI

by Lyndon H. LaRouche, Jr.

The fact that the Soviet government has successfully ordered a corruptDepartment of Justice to violate savagely the human rights of my friends and me , obliges me to summarize my authorship of what is known t04ay as the Strategic Defense Initiative (SDI). Notably, this Soviet demand was based on the Soviet perception of my authorship of SDI. The corrupt elements inside the Justice Department which authored the Leesburg raid of Oct. 6-7, 1986, are factional opponents of ' the SDI. The authorship of SDI as presented by the President, is chiefly the combined work of Dr. Edward Teller and myself. Dr. Teller and his friends deserve the credit for the most important work on the physics side , whereas I am responsible for designing the overall policy employing these "new physical principles." The difference between the narrower scope of Dr. Teller's contributions, and my own broader considerations, is essential for understanding how a deployed SDI will actually function strategically, and is also key to understanding why the Soviets blame me most bitterly, rather than Dr. Teller, for authorship of this policy. The version of SDI which President Ronald Reagan has repeatedly presented to the Soviet government, is an approach to strategic ballistic missile defense which I identifiedto the U.S. government during 1981 , and firstreported publicly at a Washington, D.C. conference during February 1982. My February 1982 proposal won the admiration of a person then associated with me, Dr. Steven Bardwell, who worked through a preliminary design for a "layered" strategic ballistic missile defense, during the spring of that year. During the middle of 1983, Dr. Bardwell broke with me and SDI, because of massive personal pressure upon him by Soviet agents; however, his June 1982 report remainsa contributionto the elaborationof an SDI. Later, during the autumn of 1982, Dr. Edward Teller took up the cudgels for SDI. He and his younger associate , Dr. Lowell Wood, are chieflyresponsible for promoting the physics side of the kind of design I have proposed. All the relevant indications are, that Dr. Teller's role was probably decisive in prompting the administration to adopt what has become known, sim:e March 23, 1983, as SDI.

24 Feature EIR December 5, 1986 t/�" .H,,"'f'kIh�ttoJ*,II4'1k'i",tWAt. �. Z:;� &�,w�� ;: t�= �tk��::; · .' ·,:, ·Pf * . �=:ic: .�v.;l�I!lltoM>.",:a: ,:u.;:::��� :� The t�h"olo.iClI (Ollndlt"'" or rompctenl u.s. miliUlry po�(y il tile "(rull development" of Inti· mi.i� partu;ll"-bum wupons In the Jpenrum from chanl(ll·powtrtd ••rl� lucri on IIr lO hi.her

Th� technological ro undation or competent U.S. military policy is the "crash development" or anti­ missile particle-beam weapons in the spectrum rrom chemical-power�d x-ray lasers on up to higher-energy­ density reiativistic beam devices based in space stations. Any strategic military policy which is not centered upon that commitment is sheer incompetence and thererore

rtwf(�k:t efl'fl: iIIW)' h.r4�·af� r� t'h."'" ...Al... t+l tk- "��o\"l.\... I� 'J1lc'..... lb. Iwllk-'l..M.. k-;l .1I;6d tnWlt$lk"�fn\�"' �III;IIffIk. l ...... <'<1 It) \}I� 14"":-3' It>��¢,ot tn�'IU!:I� � ne J1M)et �fi.t>4"fIi� fH ho"l1n..� t, ,� ..+ � ,.,,"" ,,,,M .). t.iJ>Wtt"jt,Ioi:Anl .rtiJc��.�, �� ..01�,'�)II, W 1'It'o. ,II ... >1,1.. ,.., '<�"'«>�'V' '''f'' Ibt'� ..,Ib. tb�·;�IW'l.J(1 1II 11l",.n:;"f'I( \\ 41r.ct� I,. �JI":Wf\-> �In...''f: t;�-II u�'" -:lit '''.llii.lt) -II�ffl"� ok,

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Lyndon LaRouche, speaking at Washington 's Dupont Plaza hotel on Feb . 1 7, 1982 , when he laid out the beam-weapons strategic doctrine. Inset: an article written at that time by LaRouche and published in the March 2, 1982 issue of EIR.

Since April 1983 , my authorship of SOl has been increas­ my contribution to the economics side of SOL For example, ingly obscured in the news media of WesternEurope and the Dc Wood has supported publicly the fact that, using "beam­ United States, although not, most notably, in the Soviet press_ weapon" and related advanced technologies, the U_S. could Since then, in the European and U.S_ public, the meaning of kill a dollar's worth of Soviet missile for about ten cents, a SOl is usually seen as a matter of debate between the propos­ support of the line of argument I presented during 1982. The als of Dc Teller and the "Rube Goldberg" scheme of Lt-­ U_S_ government has adopted officially my argument, that Gen_ (ret-) Daniel P. Graham. Usually, those who support the expansion of the U .S_ tax-revenue base caused by "spill­ my policy in their private discussions, identify themselves over" of SOl research and development would contribute far publicly as supporters of Teller. more to national revenues than SDl itself would cost- Dc The question posed is this. Since I agree with Drs _ Teller Teller has made statements to the same general effect- and Wood on their known SOl proposals, does it make much Despite these important areas of our mutual agreement practical difference if my earlier authorship of the proposal on the economics of SOl, Dc Teller rejects those principles is ignored in current discussions of the SOl? The answer to of economic science upon which I based these arguments_ that question, is a very definite, very loud "Yes_" Without He has so far rejected the most crucial feature of the design those aspects of my proposal which Dr. Teller and his friends of SOl as a new strategic doctrine _ By his failure to ally with strongly, and wrongly oppose, the SOl would not succeed as me openly for more than a brief period during 1984, Dc � strategic doctrine. Teller has done great damage to our common cause_ He is a These specific differences between Dc Teller and my­ lovable cunnudgeon, an appellation which I hope I too would self, are at the center of what the Soviets themselves accu­ deserve, but he has a spoiling character-flaw, a flaw which rately describe as their motives for continuing a dialogue with bears directly upon his wrong-headedness on the subject of Dc Teller, while ordering the U.S_ government to kill me. economics, and is the source of his embittered personal dif­ Therefore , while taking into account the very important areas ferences with me. in which Dc Teller and I agree fu lly, there can be no com­ Were he and I to collaborate directly, we would reach petent understanding of SOl as a strategic doctrine, without agreement on all the technical features of SOl weapons­ stressing the differences between us_ systems, about as rapidly as two cunnudgeons might ever The difference between Dc Teller and myself, is essen­ reach such agreement- We would probably come to agree­ tially a matter of economic science, a long-standing, some­ ment rather quickly on all the crucial features of design of times bitter controversy between Teller and me , dating from both a Mark I and Mark II SOl system. He would probably approximately a decade before March 23, 1983. attack me savagely, in his fashion, on some of my technical Drs. Teller and Wood agree fully with important parts of proposals, because that is his personal style. However, in

EIR December 5, 1986 Feature 25 what he would propose, he would probably be right enough conflictbetween two cultures. that I would agree to supporthis design specifications. In that To sum up my argument in that location: A state of war­ qualifiedsense , we would probably come to agreement on all fare comes into being when the differing cultures of either important matters of this sort. two states, or, at least, the existing governments of those So, at firstgla nce, the areas of controversy between Teller states, causes the two states to adopt irreconcilable, implicit and me might seem very narrow ones: his lingering personal foreign-policy objectives. In the extreme case, the one cul­ animosity against me from the 1970s (over the issue of the ture attempts to impose itself upon nations of a different economic "logic" of fu sion-energy development), and his culture. More generally, the conflict arises from culturally opposition to the principles of economic science. Admitted­ irreconcilable differences respecting relations among states ly, relative to the matters of designing a workable sm system generally. Whenever two states are implicitly committed to for deployment, we have no disagreement in principle. How­ such a conflict in either or both of national-domestic or for­ ever, my strategic doctrine goes much further and deeper eign-policy aims, a state of warfare comes into being. This than merely a deployable sm system. state of cultural warfare may or may not lead to regular So, putting to one side all the aspects of sm on which warfare. Dr. Teller's position and my own are essentially the same, Even in the case of regular warfare, it is cultural warfare, the area of difference between our sm policies is an extreme­ not military means as such, which decide the outcome. ly importantone . The difference involves life-or-death ques­ Culture operates in three relevant ways: tions for the existence of not only our nation, but Western civilization as a whole. 1) Most generally, and most fundamentally, cul­ It is important that this area of difference be brought to ture determines how the people and institutions of a public attention, in addition to being stressed to responsible nation think and act, including their capacity to sustain officials of the u.S. and our allies. This matter should be warfare in all forms in the most adverse circumstances. posed in the context of the question: "Why does the Soviet 2) Culture is expressed most efficiently in the guise government demand that the U.S. kill me, because of my of the dominant institutions of a nation's private and rolein authorship of sm, while the same Soviet government public life, including churches, institutions of gov­ treats another author of the same SDI, Dr. Teller, almost ernment, and the national economy. mildly?" That question helps to expose the importance of the 3) The capacity, in depth, for conducting all forms practical differences between Dr. Teller and myself. of warfare, including regular warfare , is an elaboration of both the general culture of the nation, and of the The popular versus the competent institutions expressing that culture. Economic strength definitionsof strategic doctrine and means of regular warfare , are prominently in­ cluded among these capacities in depth. The popular definition of strategy is a wrong one, by virtue of being much too narrow . The popular definition of My standpoint in strategic thinking, upon which my strategy, like the popular definition of warfare, is limited to design of the sm is based, is global cultural warfare between what is called "regular warfare .".Since World War II, and the Soviet empire and those cultural principles of Western especially since the late 1950s, the popular definition has civilization upon which our Declaration of Independence, been expanded to include what used to be called guerrilla our War of Independence, and our original Constitution were warfare, under the Madison-Avenue-l ike slogan-name of based. In my approach to strategic doctrine, the means for "low-intensity warfare." The more general, more fundamen­ winning a possible general form of regular warfare are but talforms of warfare are ignored. an extension of the means for winning the war without resort Insofar as SDI is definedas a weapon of regular warfare , to regular warfare. In my approach, I start from the design in the popular sense of "regular warfare ," there are either no for winning the peace, and develop a design of war-planning differencesbetween Dr. Teller and myself, or only secondary consistent with such winning of the peace. ones. It is when warfare is considered in its broader and more From my standpoint, the design of war-plans must satisfy fundamental aspects, that there appear those very important two requirements simultaneously. First, more obviously: We differences which cause the Soviet dictatorship to fear and must anticipate the possible eruption of regular warfare, and hate me more than any other living person. must design a military instrument and economy assuredly I have supplied the correct definition of warfare in a capable of surviving and winning such a war with the relative published paper I have written as a complement to Professor minimum of losses to our nation and its allies, in the most von der Heydte's modem classic, Modern Irregular Warfare rapid fashion, and by the minimum military exertion pos­ (Die Moderne Kleinkrieg). [Extensive excerpts are in EIR, sible. Second, the preparations for possibility of regular VoL 13, No. 39, Oct. 3, 1986, pp. 36-47-Ed.] Briefly, warfare must be consistent with winning the cultural war regular warfare is "the continuation of irregular warfare by by peaceful means, without resort to regular warfare. other means," the deployment of military force as an arm of It was the conjunction of these two requirements with

26 Feature EIR December 5, 1986 known technologies of warfare , which guided me to devise what has become known as the SOL I did not start from the mere use of "advanced physics principles" for strategic defense. I started from the design of a strategic doctrine, and then adopted the SOl as a key element of the war­ planning made necessary by that strategic doctrine. The model I emphasized for my approach to strategic doctrine was the combined work of France's Lazare Carnot and the Prussian reformers, Scharnhorst, Wilhelm von Hum­ boldt, and FreiheIT vom Stein. Scharnhorst's work adopts all of the crucial features of Carnot's revolution in warfare, as part of a Prussian doctrine richer, and more developed than Carnot's. However, from the standpoint of the SOl, the most crucial feature of modem military science is the measures taken by Carnot during the period 1793-95 he served as the "organizer of victory." To grasp the connection, it should be remembered, that Carnot assumed command of the military forces of France at a time, during 1793, when the defeat, occupation, and dismemberment of France seemed inevitable. During ap­ proximately two years, Carnot rebuilt and led the French military forces, effecting what became the greatest revo­ lution in military science since the 15th-century develop­ ments in Italy and Louis Xl's France. All of the later victories Lowell Wood of Livermore Laboratory, who with Dr. Teller is chiefly responsible fo r promoting the physics side of the kind of of Napoleon Bonaparte depended upon Napoleon's often SDI design LaRouche proposed. militarilyclumsy use of the greatest militaryin strument then in existence, the military instrument createdby Lazare Car­ By "economic science, rightly understood," we must not. (One should read the great von Schlieffen's Cannae: understand two things, chiefly. First, we must understand The Principle of the Flank, a work soon to appear in an an approach to economics, as economics, which adequately English translation, for the best professional military as­ reflects culture more generally. We must be able to speak sessment of Napoleon's relative mediocrity as a personality.) only the language of economic science, and yet be taking Compared with Frederick the Great, or Carnot, Napoleon into account, implicitly, the relevant, non-economic sorts as a military commander was relatively a slob, although, of key cultural factors. Second, we must define all aspects admittedly, vastly superior to such meat-wall tacticians as of regular warfare in the language of economic science. Wellington or Montgomery. On the second of these two points, mobility and fire­ The foundation upon which Carnot's revolution in arms power in military arms are interchangeable, as a matter of depended, was his design of France's war-economy, in­ principle, with physical productivity in economy. This was cluding such features as the massed deployment of relatively the essence of Carnot's approach to a revolution in warfare. highly mobile field-artillery and new dimensions of mobility Carnot, like his collaborator, and former teacher Gaspard and firepower, in using rapid mobile development to de­ Monge, was educated by the French teaching-order, the molish armies based on 18th-century "cabinet warfare" doc­ Oratorians, and thus imbued with the general economic trines. doctrine of the great 17th-century organizer of modem econ­ Movement and logistics of rapid movement, are the omy, Jean-Baptiste Colbert, and also deeply imbued with elements most characteristic of the orders Carnot issued the work of Gottfried Leibniz. The key to Carnotis expressed during the critical 1793-1 795 period. The late George Patton by the 1794 founding of Monge's Ecole Polytechnique under would have qualified as the model field commander in Car­ his sponsorship. The Ecole was a continuation of the work not's eyes, and MacArthur as the ideal type for a general of both Colbert and Leibniz. Like the science institution, of armies. Unlike many misguided U.S. professionals, Car­ established by Colbert, where Leibniz founded economic not, Scharnhorst, and von Schlieffen, express an approach science and developed the differential calculus, between to strategy opposite to that represented by the famous Sa­ 1672 and 1676, the Ecole was designed as a scientific in­ vigny's assessment of Napoleon's battles. Economic science stitution based on Leibniz's economic science and physics, is the key to deeper understanding of mobility and firepower. and committed to being a science-driver for the economy Thus, economic science, rightly understood, is the center­ of France. piece of strategic doctrine. From its founding in 1794, until it was virtually de-

EIR December 5, 1986 Feature 27 strQyed by LaPlace and Cauchy, beginning 1815, the Ecole doctrine centered upon the SOl, but it is the general setting was the world's center of fundamental scientific progress. in which my crucial principles are located. The German preeminence in science and industry, which At the close of 1982, I had occasion to present my design erupted around Alexander von Humboldt, Karl Gauss, and for the SOl to top military representatives of France. They Lejeune Dirichlet, during the 1827-66 period, occurred as wished to understand my design for strategic ballistic missile a direct continuation of the work of the Carnot-MongeEco le. defense both as a project in which France might cooperate All U. S. scientific progress in the 18th and early 19th cen­ with the United States, and as a European undertaking at­ turies came chiefly directly from France, and later chiefly tuned to the special war-planning needs of our European from Gauss's Germany. allies. Asked by them for my (1982 prices) price-tag on what is now called SOl, I informed them that I estimated a $200 billion price-tag for deployment of a first-generation multi-layered system of global strategic defense, and con­ Soviet scientists are app roximately tinued expenditures totaling to about $1 trillion (1982 U.S. dollars) by the end of this century. as good as U.S. scientists. andJar One French military official exclaimed: "Your policy is more numerous. Generally. we can technological attrition." not beat them in the science sector "Precisely," I replied. What the French general meant by "technological attri­ as such; we can beat them only on tion," was his recognition of the fact that what I was pro­ the production line. because qfthe posing was not one fixed system of strategic defense, but a cultural superiority oj our labor rather rapid succession of technologically more advanced such systems. fo rce to theirs. In my strategic doctrine, I have designed SOl in a way which pits the crucial cultural superiority of our Western civilization, directly against the greatest vulnerability in­ trinsic to Soviet culture. I have pitted our labor-force's dis­ Although the principles of design of machinery and position for high rates of technological progress, against the weapons were first elaborated by Leonardo da Vinci, and more "traditionalist" instincts of the Russian peasant-men­ although the principles of the industrial revolution in pow­ tality in Soviet industry. I have used both the experience of ered machinery were discovered by Leibniz, the modem the 1940-43 U.S. economic mobilization, plus the experi­ theory of technology of machine-design was developed di­ ence of "crash programs" such as Carnol's, the German rectly)y 9�rnqt, Monge, and their Ecole collaborators. The Peenemiinde project, the Manhattan Project, and the Apollo work of Gauss and his.collaborators , in creating the modem project, to bring a most advantageous, additional dimension theory of complex functions and electrodynamics, was a into play in our resistance to Soviet imperial aggression. revolutionary continuation of incompleted discoveries by It is this aspect of my design of SOl which frightens the the Ecole. Soviet command to the degree that they fear and hate me Physical productivity of labor, per-capita, expresses the more than any other living person. In our late-1982 and relative power of a society, a culture. This is expressed as subsequent meetings, my French military friends were pleas­ the ability of a society to sustain a large population at an antly amused by this obvious connection. Educated Euro­ improved standard of well-being in an average square kilo­ peans, especially from those patriotic families which have meter of land-area. This increase of potential population­ maintained devotion to the professions of military and state­ density is the economic measurement of man's increased craft over generations, have an immediate sense of history power over nature, and, if need be, over other nations. almost entirely wanting in literate Americans; from the same With certainimplicit qualifications, regular warfare means vantage-point, they understand the historical force of culture chiefly the effective application of economic superiority of in a way which almost no American can. On that account, thissort to means of warfare . More broadly, such economic Europeans have often told me that I am one of the few superiority is the essential correlative of a culture's power Americans they recognize as understanding the world from to win the peace. This does not mean that the nation with a cultured European's standpoint. Hence, my insight into the more powerful economy ne cessarily wins the war; to the role of technological attrition in strategic doctrine, in­ win war, a superior economy must make effective military furiated the Russians beyond measure, and amused the rel­ use of such potential. With that qualification, economic evant French. superiorityis essentially decisive in war, and also in winning I specified that we must develop approximately four the peace. successive strategic-defense systems over the 18 years, 1982- This was not the entire basis for my design of a strategic 2000. The first, Mark I, would be a workable defense of

28 Feature EIR December 5, 1986 the sort we could assuredly deploy for limited, but strate­ any military application of presently developed technolo­ gically significant global defense within five years' work on gies, the Soviet military sector has a growing margin of a "crash program." The second, Mark II, would be an im­ advantage over us. Generally, we can not beat them in the proved system deployed three to five years later, followed science sector as such, at least not presently; we can beat by an improved Mark III, and then a Mark IV. On condition them only on the production line, because of the cultural that we did this as a cooperative undertaking with Japan and superiority of our labor force to theirs. Our industries can with our European allies, this schedule was a feasible one: be geared up within a few years to the point our factories Had the V.S. committed itself to a "crash program" im­ can assimilate scientific innovations at a high rate. Soviet mediately following the President's March 23, 1983 an­ scientists might match ours, but the Russian factory worker nouncement, we would have a global strategic defense in can not match the American, the German, the French, the place by approximately 1988. Japanese, in ability to assimilate technological innovations The Mark IV strategic defense would eliminate all in­ rapidly. tercontinental and depressed trajectory Soviet missiles on It should be clear now, why I identify my strategic the basis solely of the fact of the launching of such missiles. doctrine as a peace-winning doctrine. The response would be fully automatic, and destruction of about 95% of such missiles assured. Soviet missiles would My quarrel with Teller be destroyed at launch, during boost, during mid-course The key question is: Exactly what was my own personal trajectories, at descent toward target, and, finally, warheads discovery in the design of SOl? It is in this area, that my eliminated in the near descent through modes of terminal quarrel with Dr. Teller's Lawrence Livermore has been a defense. By assigning each of the layers of defense to "kill" longstanding one. at least 50% of the missiles or deployed warheads targeted The general feasibility of strategic defense against ther­ by it, the desired kill-ratio of total missiles deployed would monuclear missiles was first identified by Soviet Marshal be achieved. V.D. Sokolovskii, in his 1962 Military Strategy. At a time The Mark I strategic defense would achieve more modest when the V.S. was concentrating on high-speed interceptor kill-ratios, but sufficient to prevent a Soviet "first strike" rockets (the 1962 system which Daniel O. Graham copied from achieving a war-winning effect. This would deter Mos­ into his "High Frontier" program), the Soviet military was cow from launching such an attack beforehand. Mark II and already concentrating research into lasers and other "new Mark III would be successive improvements. physical principles, " more powerful than interceptor rockets. Such technological attrition is indispensable to a strategic By 1969, when Henry A. Kissinger began pressing for an defense. Although the usual talk about Soviet countermea­ end to V.S. strategic-defense efforts, the Soviets had already sures against SOl, from SOl opponents, is nonsense, there begun development on systems of this sort, and had revealed are sophisticated countermeasures which could be developed this to the Pugwash Conference of which Kissinger was a within a few years after any new system of defense is de­ member. By the middle to late 1970s, scientific proof of ployed. Therefore, we must replace Mark I with Mark II principle had been established for a wide range of "beam before Moscow has developed deployable countermeasures weapons" suited for such missions as killing missiles and against Mark I, and deploy Mark III before Moscow could their thermonuclear warheads. deploy effective countermeasures against Mark II. In no sense, did I personally "discover" the feasibility of · Thus, although a good Mark I system, of the type my a "beam-weapons"-centered strategic ballistic missile de- collaborators and I presented during 1982, could have been fense. Ten years earlier, in the course of Henry A. Kissin­ deployed by 1988, at a cost of approximately $200 billion ger's treasonous role, in steering the U.S.A.-Soviet ABM (1982 dollars), the total cost by about A.D. 2000, would treaty through the Congress and under PresidentNixon 's pen, be in the order of $1 trillion (1982 dollars). the signators to that treaty had explicitly stipulated that re­ My strategic doctrine took SOl beyond pitting present search and development of anti-ballistic-missile systems based levels of V.S. capabilities against present levels of Soviet on "new physical principles," was exempted fromthe general capabilities. I shifted the equation, from fixed levels of restrictions of the treaty. technological capabilities, to pitting a high rate of U.S. All that I did, respecting the physics of strategic ballistic technological attrition against a slower rate achievable by missile defense, was to bring together proven physics prin­ Moscow. Moscow lies when it asserts that SOl is a "first ciples already worked out at places including Dr. Teller's strike" weapon; however, Moscow has insisted, since the Lawrence Livermore National Laboratory. I used the accu­ close of 1982, that it will resist V.S. deployment of SOl, mulated knowledge of such potential weapons, which I had because my design would ensure a growing margin of V.S. assembled, bit by bit, over a period of about 10 years prior technological superiority over Soviet assault-potential . to 1982. I put these proven principles on the table, so to Soviet scientists are approximately as good as U.S. sci­ speak, and fitted them together as one assembles the pieces entists, and far more numerous. Therefore , in the matter of of a jig-saw puzzle. This aspect ofmy design deserves a pat

EIR December 5, 1986 Feature 29 pungent wit, Teller told his biographers: " ...I still be­ lieve that a physicist should be a physicist and not a poli­ Dr. EdwardTe ller: tician, but I did become a politician, and I became one in self-defense. Now I know that self-defense, in some cas­ a brief biography es, justifies murder. Whether it ever justifiesbecoming a micro-politician , I don't know." Bornin Hungary in 1908, Edward Teller went to Germany Because ofhis H-bomb "child," Teller was reviled by when he was 18 to study mathematics, chemistry, and the liberal academic community as a warmonger who physics at Karlsruhe, Leipzig, and G6ttingen-and to wanted to drop bombs on civilians, while J. Robert Op­ escape the anti-Semitic regime of Miklos Horthy, which penheimer, his boss in the Manhattan Project, is touted as had ousted the equally repressive Hungarian Bolsheviks. the peacenik. In reality, it was Teller who counseled against In Germany he discussed the frontiers of physics with the dropping the atomic bomb on Hiroshima and Nagasaki, leading physicists of the time-Arnold Sommerfeld, while Oppenheimer advised bombing Japan without WernerHeisenberg , Erwin Schr6dinger, AlbertEinst ein, warning. Max Born,and Max Planck. Hitler's anti-Semitism inter­ Teller argued during and after the war for the devel­ ruptedthese studies, and after a year in Denmark working opment of the more powerful hydrogen bomb, because he with Niels Bohr, Teller came to the United States in 1935 wanted to push the technology as far and as fast as it would to assume a professorship in physics at George Washing­ go for scientificreaso ns. He also knew that this was ex­ ton University. He brought with him his new bride, Mici, actly what the Soviets were doing. Because he and his the younger sister of a close childhood friend. family had suffered directlyunder communist rule, Teller During the Manhattan Project, Teller was involved in maintained a more realistic view of the Soviet empire and the construction of the first atomic bomb and is known its arms control promises than his Pugwash colleagues. In familiarly as the "father of the H-bomb." After the war, 1953, Teller incurred the wrath of many fellow scientists he taught physics at the University of Chicago and then and friends by testifying at hearings on Oppenheimer's became assciated with the new Lawrence Livermore Lab­ security clearance that he thought Oppenheimer's postwar oratory, firstas a consultant and later as associate director opposition to H-bomb development had delayed the de­ until 1975. velopment of the thermonuclear bomb about four years. Teller's theoretical work has been wide-ranging, from Interestingly, these same scientists who ostracized Teller the structure of the nucleus, to fusion power, to peaceful at that time, 30 years later opposed Teller on the SDI. nuclear explosions, to reactor safety systems. It is in the When asked, at a talk on beam defense at the Center political arena, however, that Teller made his mark inter­ for Strategic and International Studies in January 1983, nationally as an advocate of a strong defense (as opposed why he made no mention of how a crash program to to arms control), an opponent of classification in science, develop beam technologies would force a revival of the and a proponent of atoms for peace to raise the living economy, Teller replied, "Economics is not my cup of standards in the developing sector. With his characteristic tea. "

on the back for excellent, persistent staffwork, but does not A.D. 2000. The net cost of this would be less than representmy original discovery in any strict sense of discov­ zero, because the increased tax-revenue of the federal ery. government, generated by SDI "spill-over," would be What I accomplished, as no one had accomplished this far more than $1 trillion spent. before me , was to prove the economic fe asibility of a high In this sense of SDI as "a commercial proposition," rate of technological attrition in deployment of SDI. My SDI is not an added expense, but is a sound invest­ proof of feasibility involved the following points: ment, which will pay the government back several times more than the total paid-out investment. I) Just as the Apollo Project had more than paid We can spend for such SDI all day long, and be for itself through technological spill-overs into the the richer, the more we spend. U.S. economy, so the SDI would pay for itself. 2) Provided the overwhelming majority of SDI For example: In my design, we would spend about weapons is based on advanced physics principles, rath­ $1 trillion (1982 dollars), in total, for successive de­ er than Daniel O. Graham's technologically obsolete, ployment of Mark I, Mark II, Mark III, and Mark IV and unworkable "kinetic-energy weapons," it will be global strategic defense by approximately the year far cheaper to kill a thermonuclear missile than to

30 Feature EIR December 5, 1986 produce and launch one. employed to achieve these results. That is where they err. One of the problems of kinetic-energy weapons, Although their contribution to SOl is enormously valuable, : is that it costs more to kill an average missile than for perhaps indispensable, they do not understand how SOl the adversary to produce an added missile. Therefore , works in the larger framework of strategy. for these economic reasons, the adversary can super­ This issue between Teller and me, on the one side, and saturate the defense with offensive systems and related between me and Lawrence Livermore generally, in the larger countermeasures. To attempt to make Daniel Gra­ context, goes back many years, in two successive phases. ham's "High Frontier" workable, on paper, we would The beginning of the controversy was the early 1970s, have to spend at least 3 to 10 times as much as the over the issue of the rate of federal expenditure for devel­ Soviet cost for the missile-fleets they are deploying. opment of controlled thermonuclear fusion as a primary In reality, the "High Frontier" system is a military power-source for mankind. Both Teller and we agreed, that farce: Since Graham's systems are based on low-or­ this technology must be developed, but we disagreed strong­ biting platforms, they can be easily destroyed by Mos­ ly on the rate at which the program should be funded. He cow a few seconds prior to Soviet missile-launch. defended the position of Nelson Rockefeller's Commission 3) The superior economy and effectiveness of de­ on Critical Choices, with which he was associated, sup­ fe nsive weapons-systems based on "new physical prin­ porting a relatively lower rate of expenditure; we insisted ciples�" such as lasers, is that the mobility and fire­ on the maximum rate of expenditure projected by the federal power of such weapons is several orders of magnitude energy agency. In the heat of this fight, we perhaps exag­ greater than that of both offensive and defensive ki­ gerated the heat of our factional arguments a bit, and he netic-energy weapons. more so. During the middle of the I 970s, I apologized Hence, Dr. Lowell Wood's estimate, that we can publicly, in writing, to Dr. Teller, for the excessive heat on kill a dollar's worth of Soviet missile with 10 cents our side of the earlier debate; however, he still refers to that of sl,lch defense, is a fair ball-park estimate. Admit­ controversy with personal bitterness against me. tedly, SOl systems seem much more costly than of­ Nonetheless, we came into much closer contact with fensive weapons, because they involve technologies Teller's Lawrence Livermore, during the last part of that much more advanced than those employed in con­ decade. This relationship was prompted by New Solidarity's structingand deploying missiles. Set up a simple ratio, publication, on its front page, of a conceptual design for a KIC, for which K represents the kill-ratie of the unit thermonuclear bomb ["Implications of the Rudakov Disclo­ system in the beam-versus-missile domain, and C the sure, The Soviet Union 'Is on the Verge of a Strategic Weap­ cost of the unit system. C for advanced physical sys­ ons Breakthrough," by Uwe Parpart, New Solidarity, Vol. tems is approximately an order of magnitude greater 7, No. 63, Oct. 15, 1976]. The issue was distributed at a than for kinetic-energy weapons, but the K of ad­ scientific conference where Lawrence Livermore was well vanced physics principles is several orders of mag­ represented; therewas turmoil in their ranks over this article. nitude greater than that for kinetic-energy weapons. What astonished Teller's friends was that we, with no 4) Provided that the tooling developed for pro­ access to classified materials, could generate a conceptually duction of such strategic defense systems, is also used valid design for such a weapon. All we had done, was to to prmJucecapital goods for use in the civilian sector, apply the Riemannian physics of isoentropic compression and that high rates of capital-intensive investment of to the problem defined. We had done this, not to reinvent technologically advanced capital goods is promoted the H-bomb, but to demonstrate to U.S. scientists, in this in physical production in the civilian sector, the growth way, the proper approach to solving certain key problems of per-capita output in the economy as a whole will of controlled thermonuclear fusion as a prime industrial exceed the estimated 3% per-annum rate for the early energy-source. The reaction of many scientists to that article 1960s period of post-Sputnik aerospace development. in New Solidarity, was "we have to take these people se­ As a result, the increase of federal tax-revenues caused riously in scientific matters." by such spill-over, will come not only to exceed the The result of this encounter, was a two-faceted debate total expenditure for SOl, but soar way above it. over choices of scientific method, between ourselves and many at Livermore, as well as other locations. These economic considerations are at the heart of my In the physical sciences, we advocated the geometrical new strategic doctrine. Without seeing the SOl as merely a method of Cusa, Leonardo, Kepler, Lei!>niz, Gauss, Rie­ necessary aspect of the implementation of that doctrine, the mann, et aI., in opposition to the deductive-axiomatic, al­ SDI could not be correctly, effectively understood. gebraic method of Descartes, Newton, Maxwell, Rayleigh, With many aspects of these points I have listed, I have et al. In this connection, we stressed repeatedly the impor­ no doubt but that Drs. Teller and Wood agree. It is a matter tance of work on advanced methods of mathematical anal­ of record, that they disagree strongly with the approach I ysis, derived from Gauss-Riemann elliptic theory, being

EIR December 5, 1986 Feature 31 accomplished in Leningrad and Moscow, and warned that eries in Treasury Secretary AI�xander Hamilton's" American we would fall behind the Soviets in numerous strategically System of political-economy .. " In Eastern Establishment jar­ crucial areas unless we opposed the fanatical, uncritical gon, I am "a neo-mercantilist." The central feature of Leib­ defense of Newton and Maxwell, and turned to the geo­ niz's discoveries in economic science, is his preliminary, metrical standpoint of Gauss, Riemann, et aI., instead. rigorous definitionof the concept "technology." It is in con­ The same issue of method was at the center of our nection with "technology," that my own original discovery disputes over economics. is located. Like many European and U.S. scientists today, our crit­ What I have done, is to reject the Clausius-Maxwell­ ics at Livermore were of the type which abandons all sem­ Helmholtz-Boltzmann, statistical doctrine of "entropy" and blance of scientific method the instant the magical name of "negentropy," and to define"negentropy" in a non-statistical, "economics" is invoked. In physical science, they are ra­ classical way. My point of starting-reference for this was my tional and rigorously so, even when they are sometimes rage against the bestiality and fraud of the "information the­ mistaken. Mention the word "economics," and they react ory" dogmas of Professors NorbertWiener and John v. Neu­ to that word as if by post-hypnotic suggestion, and are mann. I have adopted the discovery of the collaborators , transformed into fanatically irrationalist ideologues of Adam Pacioli and Leonardo, as adopted by Kepler, that all living Smith's persuasion. processes are distinguished from non-living by a single, ele­ In particular, vis-a-vis our work, they refused beyond mentary geometrical principle: harmonic orderings con­ reason to accept the fundamental fact, that economic pro­ gruent with the Golden Section of elementary constructive cesses are essentially physical-economic processes, rather ("synthetic") geometry. Kepler constructed and essentially than monetary processes, and also refused to consider the proved this principle, by deriving the entirety of his mathe­ fact that physical-economic processes are elementarily nOI}­ matical physics from this principle alone. Karl Gauss later linear. In fact, the most characteristic feature of physical­ proved the unique validity of Kepler's approach, relative to economic processes is an ordered succession of nonlinear Descartes and Newton, and based his own fundamental con­ phase-state changes. This ordered process is of the form tributions to mathematical physics upon that proof. This prin­ implicitly defined by Riemann's 1859 paper "On the Prop­ ciple, defined geometrically in a classical way, is my defini­ agation of Plane Air Waves of Finite Magnitude," the paper tion of "negentropy ." In other words, "negentropy" is a self­ on which the Soviets based their successful design of an H­ subsisting principle, not a Boltzmannian statistical variation bomb. That latter, is a matter in which Dr. Teller and his in an overall entropic process. collaborators ought to be well versed. They had but to apply The negentropy characteristic of the healthiest state of a Riemannian H-bomb theory to the case of physical-economic living process, is also the harmonic characteristic of a healthy processes, and their agreement with our general argument economy. This negentropic ordering of successive phase­ would be assured. changes in economic processes, as physical processes, is For that reason, Dr. Teller's circle rejected our strategic caused by mental activity of the same form as valid funda­ doctrine respecting use of SOl, although they independently mental scientificdisco veries in physics. concurred with some of our important economics conclu­ This class of mental activity is my definitionof "reason, " sions. They have so far refused to recognize that strategy as opposed to the definition of reason as "formal axiomatic­ is properly premised on cultural-economic processes. They deductive logic." This distinction is not peculiar to me, of refuse to view physical-economic processes as physical pro­ course; it is the traditional Platonic-Socratic definition of I cesses, in these terms of reference. reason, and also the definition of the form of the Log os, That is the essence of Teller's quarrel with us, insofar "Holy Spirit," in Christian theology. as their statements and other actions show their motives to Reason, so defined, is negentropic. This mental negen­ us. tropy , is the cause of negentropic harmonic orderings in the growth of healthy physical economies. We call this result, How the SDI is intended to work otherwise, technological progress in an energy-intensive, My conceptual historical reference for an SOl-centered capital-intensive mode. strategic doctrine, has been the 1793-1815 work of Carnot' s My fundamental discovery, was to recognize that the and Monge's science-driver institution, the Ecole Poly tech­ cause-effect relationship between reason and healthy eco­ nique. My fundamental discoveries in economic science have nomic growth, is an intrinsically measurable one. The form made it possible to express the principle of that Ecole's suc­ of reason associated explicitly with scientific discovery, is cess in mathematical-functional terms of measurement of subject to mathematical analysis, on condition that the proper cause-effectrelations within physical-economic processes. standpoint in constructive geometry of the complex domain Broadly, my economics doctrine is a continuation of the is employed. This is not possible within the confines of an work of the founder of economic science, Gottfried Leibniz, axiomatic-deductive form of mathematics, such as a formal and of the incorporation of key features of Leibniz's discov- algebra.

32 Feature EIR December 5, 1986 Most of the wild, metaphysical kookery generated in the work of Gauss, et al. , in identifying the inadequacy of Fourier name of explaining away the mysterious unknowns of phys­ Analysis, and supplying the needed correction forthat inad­ ics, are easily shown to be the result of attempting to interpret equacy, is not only key, but indispensable. the universe from the vantage-point of an axiomatic-deduc­ Over the decades since my 1952 discovery, my work in tive form of mathematical logic . The most crucial features of economics has been centered programmatically, on devel­ physics, as typified by the fundamental constants, are all of oping an "economy science-driver" tactic for reversing the a class which can not be accounted for by such a logic. Thus, devolutionary slide in progress in the U.S. economy since for the same reason that Descartes's mechanistic physics led the mid- 1950s. My institutional approach has been to devise him to mystify reality with his deus ex machina. everything some combination of private and governmentalsci ence-driv­ which can not be subsumed by formal logic, is argued, ip so er mission-assignments, through which the frontiers of sci­ entificdisc overy could be brought directly to bear, effecting the highest possible rates of technological progress in the economy generally. Like many Europ ean and U.S. My early- 1970s quarrel with Teller reflected this. For scientists today, our critics at reasons of the physics of thermonuclear fusion, that technol­ Livermore were qfthe type which ogy represents not only an abundant, urgently needed energy­ source; the physical characteristics of fusion, very high en­ abandons all semblance qf ergy-density cross sections, and relative coherence, are the scienttfic method the instant the indispensable source of orders of magnitude of increase of magical name qf 'economics ' is productive potential. It was therefore abominable to me, considering the extent and increase of vast misery on this invoked ....Fo r that reason, they planet, that a capable leading scientist, such as Dr. Teller, rejected our strategic doctrine should lend his voice to a lower level of commitment to fusion respecting use qfSDI, refusing to development than the federal energy agency had indicated as possible. I saw urgency for a "crash program" approach to view physical-economic processes the problem of development; Dr. Teller counterposed what as physical processes. was relatively a "business as usual" level of commitment. This determined my approach to the problems of strategic doctrine. My primary point of departure was cultural warfare: the use of "economy science-driver" methods, to lift the fa cto. to be therefore exhibition of some mystical principle Western world, including the developing sector, to the high­ leering from between the cracks of the logician's universe. est possible rates of economic growth. The approach to mil­ Gnosticism, or sophisticated Sufism, including astrology, itary capabilities must be subsumed by, consistent with, that cabbalistic numerology, and other satanic practices of witch­ same "economy science-driver" method. craft, is based entirely on this sort of formalist argument: As I have already indicated, those technologies which "You see, this is a mysterj, which logic can not explain!" yield the highest rates of per-capita (physical) productivity in Having once made this discovery, out ofmy commitment civilian production , are the only available technologies to to refuting Wiener and v. Neumann's "information theory" provide greater firepower, mobility, and depth, per-capita, atrocity, I was left with the need to discover a particular to military capabilities. The reverse is, of course, also the elaboration of geometrical physics appropriate to this task. case. By way of work on Georg Cantor's analysis of transfinite Vis-a-vis the Soviets, the crucial question was not the orderings, I was led to a correct appreciation of Riemann's relative current levels of technology and gross output of the work. Thus, Riemann's mathematics, added to my own orig­ two superpower economies. The crucial question was the inal discovery, provided the general form of a feasible solu­ highest rate of growth of physical productivity. So, rather tion, for the task of measuring the cause-effect relationship than basing strategic doctrine on some designated "off-the­ between mental generation of new technologies and their shelf' sort of technology, the task was to adopt the optimal nonlinear form of effects on the physical-economic process. pathway of rapid technological progress. In other words, to (Hence, "LaRouche-Riemann method," rather than "Rie­ emphasize only those forms of technological progress which mann-LaRouche method.") bring into practice most rapidly, the most advanced work on By situating the work ofthe Ecole, notably that of Fourier the frontiers of fundamental scientificresear ch. and Legendre, as begging the more advanced standpoint of As I have indicated in many published items, there are Gauss, Dirichlet, Weierstrass, and Riemann, it thus became precisely four lines of research and development today, which possible to reduce the effectiveness of the Ecole as an "econ­ are the sole principal pathways to the highest possible rates omy science-driver," to the required mathematical form . The of increase of physical productivity, and of the greatest rela-

EIR December 5, 1986 Feature 33 tive firepower, mobility, and depth per-capita of military Winning the bigger war capabilities. 1) Controlled plasmas of very high energy-den­ The seemingly paradoxical feature of my strategic doc­ sity crosssection , and relativecoher ence, as typifiedby con­ trine, is that, on the one side, it demands that our military trolled thermonuclear fu sion. 2) Directed coherent forms of policy (and budgets) be subsumed by a war-plan which en­ radiation, especially those of very high energy-density (self­ sures the survival and victory of the United States in case of focusing) cross-section on target. 3) Optical biophysics, the Soviet attack. This is a sharp departure from the military application of Riemannian physics to living processes' most doctrine put into place by �obert S. McNamara's "whiz characteristic features. 4) Auxiliary improvements jn com­ kids," which has reduced U. S. military policy to a "Potemkin puters and related control devices, needed to keep pace with village" variety. On the other side, the essential feature of the sensing by instruments, and to assist operators in con­ my strategic doctrine is, that it is a peace-winning doctrine trolling productive and other processes of ultra-high energy­ much more than a regular-warfare doctrine. Am I, therefore, density cross section. both a pacifistand a warmonger? The problem is, that Soviet war-plans and ongoing irreg­ ular warfare against us and our allies are motivated by a deep cultural commitment, both a commitment to early world­ domination by the Russian empire, and a commitment to MyJundamental discovery. was to eradicate every significant vestige of Western Judeo-Chris­ recognize that the cause-fjfect tian culture. No rational peace is possible between our two powers. Therefore, since the Russians are incapable of rea­ relationship between reason and son in this matter, durable war-avoidance can be secured by healthy economic growth. is an only one approach. They will be deterred from launching war against us and intrinsically measurable one. our allies, only if the precalculable penalty they would suffer is far greater than they are willing to tolerate: "deterrence." They will give up their present war-plans, only if the deter­ rence is an absolute one, their assured ruin and postwar sub­ Any approach to military capabilities which emphasized jugation by us, should they attack. Therefore war-avoidance technologies other than these four, would be sheer military absolutely demands that we develop and deploy an absolute incompetence. In warfare, any technology can always be war-winning potential, even without ever intending to use overwhelmedby an adversary's effective exploitations ofthe this potential, unless they should attack us or our allies. In potentialsof a more advanced class of technology. Choosing other words, absolute military containment of Soviet aggres­ any technology but the most advanced, is an obsession of sion for a more or less indefinite period ahead. accident-prone governments and commanders. There is no Hence, the use of classical war-planning approaches, to effective defense, but the most advanced defense. Since these devise and deploy an absolute war-winning potential, is an four technologies exist on the frontiers, as the most advanced indispensable precondition for durable war-avoidance. technologies for generations to come, no military policy but However, to tum military containment of Soviet aggres­ one based upon these could be competent defense. sion into durable peace, we must observea principle empha­ So, starting from the general principles of my strategic sized by Nicolo Machiavelli, in his commentaries on Livy. doctrine, my military-systems problem was reduced simply Always give a defeated adversary safea escape fromdestruc­ to outlining the immediately foreseeable, practicable appli­ tion. In other words, we must afford the Soviets the right to cations of these advanced lines of technological progress to live in peace and prosperitywithin their proper national bor­ the war-planning problem. The fact that these principles made ders. Better than that, we should offer certainmeasures which the strategic defense physically and economically orders of will help themto improvetheir prosperity. magnitude superiorto the offense, on principle, showed that By this combination of measures, we must induce the strategic defense must predominate in our war-planning. In Russians to prefer the normal national goals of a peaceable, history, there has been an alternationof the relative advan­ sovereign nation-state, to the present imperial motives. tage, from the defense to the offense, and back again. We Over the longer term, our objective must be to win them have come, as a matter of science, to the prospective end of to recognizingthat WesternJudeo-Christian culture is better the superiority of the missile-offense, and the entry into the for Russians thanth e present, Dostoevskian-Gorkyan cultur­ periodof preponderance of the defense. al matrix. This depends uponesta blishing the point, that our This strategic .doctrine cannot be understood as a strategic culture is forever a more powerful culture than their present doctrinein the strict, classical sense, except as my standpoint culture, and that they only injure themselves by failing to in economic science is applied. imitate ours. Since the rulingRus sians do not recognizerea-

34 Feature EIR December 5, 1986 son, but merely a mysticism-dripping sort of formalistic log­ ic, it is impossible to reach the Russian rulers solely by means Do You Have the of reasonable communication, or by any ruses of mere diplo­ macy. Irrationalists, such as those Russian rulers are, accept Latest no premises in international relations but the combination of sheer physical power combined with the political will to Ammunition deploy that power. It is therefore indispensable to define their cultural inferiority to them in these physical terms of refer­ To Fight for the ence, rather than the rational discourse which would be suf­ ficientin dealing with men and women of reason. SDI? Finally, the technical military side of the strategic equa­ tion is elementary. French 18th-century doctrine is famous for pioneering in Japan and the SDI: the application of projective geometry to analysis of the re­ An Inside Look lationship between positions and fields of fire. The line of development of such geometry, from Leonardo, through De­ Japan's full-scale partiCipation in the U.S. Stra­ sargues, through Monge, is the proper foundation for teach­ tegic Oefense Initiative could shorten the re­ ing and study of elementary projective geometry today, an search time for deployment by a full two years, and bring enormous economic and defense approach best referenced to Prof. Jacob Steiner's synthetic benefits to Japan. geometryfor secondary-school pupils. Mastery of this stand­ How this can happen is detailed in the just­ point of analysis of relative strengths of offense and defense published transcript of a two-day conference is indispensable groundwork, but not adequate to modem in Tokyo, "SOl: Military, Economic. and StrategiC technological forms of the problem. Implications,· sponsored by the Fusion Energy We must extend the classical French military applications Foundation and the Schiller Institute on April 22- of projective geometry into the realm of the Gauss-Riemann 23, with 180 members of Japan's scientific and complex domain. We must limit our approach to this complex political elite in attendance. domain to a purely constructive-geometrical one, avoiding The consensus at the end of the two days was interpretations grounded in formal algebra. Since a nonlin­ that Japan's participation in the SOl as an equal early evolving physical-economic process can be mapped partner is both necessary and urgent. As Prof. Makoto Momoi of the Yomiuri Research Center only in such a complex domain, the strategic question can put it, "Every day that Japan does not partici­ not be posed in any other terms of reference than this one. pate in the SOl is another day lost" in the battle However, the viewpoint is much the same as the 18th-century to counter the Soviet threat. one, except from a higher level of reference. In other words, instead of simply mapping the domain of Top U.S., European. and Japanese scientific. mil­ warfare in Euclidean terms of reference, we must locate the itary, and political representatives discussed: efficientaspect of offense versus defense in the "hyperspace" • the latest technologies of the SOl; of Gauss-Riemann physical space-time. For those who are • specifically what Japan can contribute; deeply conditioned to imagine the Euclidean space of Des­ • the pOlitical climate in Japan; cartes as the natural one, thinking in terms of physical space­ • the nature of the Soviet threat. time, rather than Euclidean space, takes some getting used to. However, once that viewpoint is mastered, all the essen­ Fully documented at the conference is how SOl tial topics are elementary ones. technologies will bring about a 100-fold leap in My own work in economic science, has already accom­ energy fluxdens ity, abruptly reversing the de­ cline in productivity in industry. plished a successful, if preliminary model for such analysis. Not only is this correct for offense-defense studies, as to form of analysis; because of the interdependency of physical econ­ Now, the full proceedings of the conference omy and military capabilities, it is the only correct choice. are available in a transcript. Order your copy With many of the subsidiary points I elaborate in this for $100.00 by writing the Fusion Energy Foun­ way, Dr. Teller might either agree, or tend to do so. It is the dation, P.O. Box17149, Washington, D.C. 20041- method itself which he has rejected. at least to all appearances 0149. Or call (703) 771-7000to place your order thus far. That is the key reason, my leading part as a partici­ by telephone. Visa/MasterCard accepted. pating intellectual author of the SDI must be kept in the foreground in U.S. policy-making today.

EIR December 5, 1986 Feature 35 �TIillScience & Technology

New computer study shows AIDS couldwip e out U.S.

Physicist Jonathan Te nnenbaum introduces thejirstru n oj a new ep idemiological computer model. thejirstever designed to study a human slow-acting retrovirus.

Last October, Lyndon LaRouche commissioned a new series of computer-aided studies of the AIDS pandemic now sweep­ FIGURE 1 ing the United States and much of the world. Results of a S-Curve first-generationcomputer model, just released by an EIR task ------+------+------+------+------+------+------+ Month" , force in Wiesbaden, West Germany, corroborate estimates I KEY of LaRouche and leading medical authorities, that AIDS is , pop stands for initial population, in 10 : thousands, RISK for high-risk group size "species-threatening." The first slow retrovirus epidemic ever 1+ (thousands), SICK for initial assumed sick I + known to strike humans, AIDS has the potential, unless I + (always 0 in our runs), DEAD for initial d 20 ::+ assumed ead (always 0). INFI-POP is stopped soon, to literally wipe out the human race. The new 1+++ initially infected slow-track, INFI-RISK is 1+++ initially infected fast-track. S is the modelshows how the rapid spread of infection by "fast track" I++++.f. 1++++++ coefficient of fast-track tranmission, L is routes among so-called risk groups, is now "igniting" a vast 30 1++++++++ the coefficient of slow-track transmission. 1++++++++++ AIDS epidemic in the general population. 1+++++++++++++ K Is maximum lerigth cf latency in months 1++++"'++++++++++ (a constant percentage rate of passage 1++++++++++++++++++ 40 1+++++++++++++++++++++ from "infected" to 'sick" is assumed). M is 1"'+++++++++++++++++++++ ++ the time from illness to death (in months). I '" ++ + ...... ++ + ... +++ ++ ...... ++ ...... Basic facts I ...++ ...... + ...... +++ ...... + ...... ++ +...... 1++++ ++ ...++ ...... + ...++ ...++ ...... ++ + ... + ... + + + The first-generation model does little more than "play 1++++++++++++++++++++++ +++++ +++++ 50 1++ + + +++ ++ + + + + + ++ ++ + + + +++ + + + + + + + ++ out" consequences of the most basic facts known about the 1+ + +++ + + + ++ + ++ ++ ++ + + + + + + + + +++ + + ++ + 1++ + + + + ++ + ++ + + + + +++ + + + + + + + + + + + + + + + + AIDS disease and its spread to date: 1+++ ++ ++ +++ + +++++ + + +++ + + + ++ + ++++ + + + 60 1++++++++++++ ++++ ++ ++++ ++++++++++++ 1) The AIDS-associated virus HIV is aretrovirus; it in­ 1++ + + + + + + +++ +++++ + + + + + ++ + +++ + + + + + + + + 1++ + +++ ...... + ...... + ...+ ...... + + ... + + + + + + + + tegrates its genetic material into infected cells in such a way, ' ++H++Fast track infected ++++++++ 70 i ::::::::::::::::::::::::::::::::!:: that infected persons remain virus carriers for life. 1++ + + ...... +++ + + ...... + ...... + + + + + + + ...... ++ +... + ++ ... + + 1+++++ + + + + ++ + +++ + ... + + ... + ...++ + ++ + + + + + ... + + 2) AIDS is a "slow virus" disease. Once installed in its 1++ + ++ +++ +++ ++... ++ + + + +++ + + +++ + ++ ... +++ + 1++ ++ + + + + +++++ + + + ++++++++ + + + + + ++ + ++ + 1+++++++++++++++++++++++++++"'++++++'" victim, the AIDS infection "smolders" for up to 10 years or 80 1++++ + ++ + ++ + ++++ + ++++ ++ + + + + + + + +++ +++ 1++ + ++++ +++ + ++ + ++++ ... + + + + + + ++++ +++ ++ + more, during which latency period the infected person can 1+++ + + +++ +++++++ + +++ +++ +++ + + ++++ + ++ + transmitthe disease to many other persons, without his or her 90 1+i:::::::::::::::::::::::::::::::::::+++ ++ +++ ++++++ + + + ++ + + + +++++ +++ ++ ++ showing any sign of illness. 1++++++ ++ + ++ +++ +++++++++++++ +++ +++ ++ 1++++ ++ + + ++++++ + + + + +++ + + ++++ +++ +++ ++ 3) A large percentage of AIDS-infected persons, proba­ 100i::: :::::::::::::::::::::::::::::::: bly near 100%, eventually come down with incurable clinical POP = 1,000 RISK = 400 SICK=O DEAD =O disease syndromes. Barring a major medical breakthrough, INFI-POP = 0 INFI-RISK = 1 S=.17 L=O R=O K= 100,000 M=100,OOO all of these are doomed to die within a few years of emergence R-stepslmonth 1. Every 2 months one line of acutesympt oms. Full width of scale= 800,000

36 Science & Technology EIR December 5, 1986 4) The spread of AIDS infection in most localities of the order," which accelerate thespread of AIDS in everydensely United States and Western Europehas beencharacterized so populated locality where the density of AIDS carriers sur­ far by two successive phases. Initially, infection spreads by passes a few percent. These include possible cumulative ef­ "fast routes" such as contaminated hypodermic needles and fects of multiple exposureto AIDS-related viruses, enhanced anal sexual activities, at rates correspondingto a doubling of role of long-range environmental vectors such as insects, "fast-track" infected populationevery seven to eight months. and, most importantly, autocatalytic interactions between Once a substantial reservoir of virus carriers is established by AIDS and other diseases such as tuberculosis. In fact, such "fast-track" routes, infection spreads by a variety of "slow­ factors are already playing a major role in such .advanced track"routes into general population. Conservative estimates epidemic areas as Belle Glade, Florida. A second-generation indicate that at present, "slow-track" infected persons already model, now in preparation, will correct for the omission of make up an average of at least 6- 10% of the total reservoir of these second-order nonlinearities, applying a mathematical viruscarriers in the United States. In France, newly released approach similar to that employed in the treatment of com­ studies of the WHO indicate that more than 18% of all in­ plex "autocatalytic reactions" in biochemistry. fected persons fall into the "slow-track" group. The EIR computer model runs described here were com­ 5) So far , no serious measures have been instituted to pleted in Wiesbaden, West Germany, under the author's limit either fast-track or slow-track transmission of AIDS . direction, with collaboration of Ralf Schauerhammer and While incorporating these facts, the first-generationcom­ Bernd Schulz. Mr. Schulz, an engineer with experience in puter model omits certain "nonlinear factors of the second computer modeling of chemical reaction dynamics, supplied

FIGURE 2 FIGURE 3 Simulation of fast virus epidemic AIDS spread in 'fast-track' mode o;{iii--- - . -- --- . - - . - -. - .- . --- , M 1 MO��------·------·-----�:------·------·------.------. 121. ------�!!... ___track I ' 5 1 + r+ ••••••••____ infected 1 ++++++++++++++ 1 + ' 1 ++++++++++++ 24 1+++ 1 ++++++ 1++++ . 1 ++++++ 10 �! 1 ++++++++ 1 36 J+++++++++++ 1 1++++++++++++++ 1 1+++++++++++++++++ 1 ++++++++++++++++++++ 15 � 1 48 i :::::::::::::::::::::::+++ 1 1++++ +++ ++ ... ++++ ++ ++++++ +++ ++ + 1 1 ++++++++-++++++++ Fast

20 � 60�::: ::::::::::::: track H+++++ 1 1++++++++++++++++ infected ".+++++ -to 1 I ...+ ...+++ ... ++++ +++ +++ ++++ ++++ ++ +++ 1 72 �::::::::::::::::::::::::::::::: 25 ; 1+ + + + +++ + + + + + + +++ ++ + + + + + ++ + + + + + + 1 1++++ + ++++++ +++ +++ +++ ++ +++ + ++++ + 1 1 84 i:::::::::::::::::::::::::::::: 1++ + + + + +++ +++ ++ + ++ + ++++ + + + + ... + + + 30 ; 1 ++++++++ +++ + ++ ++++++ ++++ + + +++ + 1 96 1 i::::::::::::::::::::::::::::: 1 1++++ ++++ + + + + +++ + + + + + + + ...... +++ ++ 1++ ... + + ... + + ... + +++... + ... + +++++ ... ++ +++ 35 ; 1 108 i:::::::::::::::::::::::::::: 1 1 ... + ... + ...... +++ ... + ... + + ... + + ... + ... + ++++ ... + 1 1"'++++ ++ ++++ + + ... + ++ + + + ++ +++++ 40 ; 1 20 i::::::::::::::::::::::::::: 1 1++"'+++...... +++...... ++ ...... ++++++++ ... 1 1+++ + ++ + + ++ ... + ...++ + + + +;+ + ++ + + 1 1 ++ ++ ... ++ ...++ ++ + ++ + ++ ... ++... + + + + 132 1++++++"' ++++++++++++++"'+++'" 45 ; 1++++"'+++"'+'" + ... ++++ ++++++++ 1 1 + + + + ++ + ++ + +++++ ++ + ... + + + ++ + 1 1++++++++++++++++ ++ +++++++ 1 1 44 1+++++++++++++++++++++++++ 1 + +++++ +++ + +++++++ + + ++ + ++ SO; 1++++++++++++++++++++++++ 1 1 156 �:::::::::::::::::::::::: 1 1 +++++++++++++++++++++++ 1+++++++++++++++++++++++ 55 ; 1+++++++++++++++++++++++ I 1 68 1 +++++++++++++++++++++++ 1 +++++++ ++++++ +++ ++++ + ++ 1 I 1 ++++++ ++++ +++ ++++++++ + 1++++++++++++++++++++++ 60 � 1 60 1 ++++++++++++++++++++++ POP = 240,000 RISK= 20,ooo SICK =O DEAD =0 pop = 5,000 RISK = 1666 SICK = 0 DEAD = 0 INFI-POP = 0 INFI-RISK = 100 INFI-POP = 0 INFI-RISK = 10 S=2 L=.OOOO5 R=O K=1.5 M=2 S= .14 L= .016 R=.OO8 K=300 M=24 R-stepsimonth 1. Every 1 month one line R-stepslrnonth 1. Every 3 months one line Full width of scale = 40,000 Full width of scale = 3,332

EIR December 5, 1986 Science & Technology 37 the initial equation scheme which was the point of departure they attain more than a small ttaction of the population. This for developing the first-generation model. is because infected persons r'pidly drop out of thel· poo of potential virus transmitters, either by recovery (eliminating The dynamics of a slow retrovirus epidemic the reproduction of virus in thdir bodies), or by death . Figure The first-generation model underlines very clearly the 2 illustrates the typical formo f a "fast virus" epidemic. dramatic difference between the AIDS epidemic and every AIDS works differently. Due to the very long latency other known epidemic in human history. period of the disease, the pool· of infectuous persons without In first approximation, the spread of virus infection in a symptoms ("asymptomatic carriers") accumulates much fast­ population initially follows the "S-curve" familiar in the study er than it is depleted by illness Imd death. Figure 3 shows the of reaction-rates in chemistry (see Figure 1). While the con­ propagation of AIDS infectiort in a hypothetical "fast-track" centration of infected persons is still small, transmission is group of 1.6 million persons. the number infected increases very efficient, since infected persons primarily come into in a classical "S-curve," growing from a few thousand in­ contact with noninfected ones. The rate of increase of infect­ fected to 90% saturation within only five years . This all ed persons , increases, up to the point where half the popula­ occurs before attritionby death has much effect. Only later, tion is infected. afternearly the entiregroup ha� been infected, does the figure From that point on, the process begins to "saturate," as of carriers slowly begin to drop. Exactly this type of curve is most contacts involve already infected persons. Fortunately, observed among pockets of "high-risk"persons in some U. S. however, most deadly epidemics are "damped out" before cities. Once the AIDS epidemic gets started in the general

FIGURE 5 FIGURE 4 Close-up of initial pha,es of U.S. AIDS Projected AIDS spread in U.S.A. . ----+------+------+------+------+------+------+------+ epidemic Month ----+ ------+ ------+ ------+ ------+ ------+ ------+ ------+ Month 18 �:::::::::::::::::::::::::::::::::::::::::::::: ::::::: : : ::::::: ::::::: : I I ...... : 12 �: 36 �:+ : ::::::::::::::::::::::: : ::::::::::::::: : :::::::::::: :::::: :::::: I + + ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1++ . 54 �- !!• :::::::: : :::::::::: : ::: :::: : : : : ::: : : : : :::: : : : : : : : : : : : : ::: : ::: : : 24

36 90 � . I ---- +++ •••••••••••••••••••••••••••••••••••••••••••••••••••••••• 48 108 � • ::::: :::+ :::: : : : : ::: : : : : : : :::::::::::::: : : ::::::: :::::: : : :::: ::: I ------+++ •••••••••••••••••••••••••••••••••••••••••••••••••••••• IX 126 I X 60 I X - ++ . 1 44 �:x :::::::::- !+ :::::::::::::::::::::::::::::::::::::::::::::::: IXX ------+++ ••••••••••••••••••••••••••••••••••••••••••••••• 72 162 ��= . ::::::::::::: !+ ' : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : + •• ���x ::::::::::::::_ !+ ::: ::::::::::::: ::::::: : ::Non.. • .•••.. . 84 180 I XXX ...... infected ...... IXXXX I XXXX 198 IXXXX + ...... + . 96 �:����x : -:::::::::::::::::::_ + : : : : : F8St° ° 0 • : : : : : : : : : : : : : : : : : : : : 216 I XXXXXX • ------++ ... k ...... - + . trac 108 . �==::::: . ::::::::::::::::::::: - ++ : infected : : : : : :: : : : : : :: : : : : :: : 234 IXXXXXXX • ------++ •••••••••••••••••••••••••••• I XXXXXXxx • ------..------++ ••••••••••••••••••••••••••• I XXXXIXXX • ------++ ••••••••••••••••••••••••• 120 252 I XXXXXXxxx • ------++ ••••••••••••••••••••••••• I XXXXXXxxx • ------++ •••••••••••••••••••••••• I XXXXXXxxxx •• ------++ •••••••••••••••••••••• 270 IXXXXXXXxxx ------Slow ------+++ ...... ------132 -::::::::::: k - - + ����::::::�:x .: trac + ••••••••••••••••••• 288 IXXXXXXXxxxxx •• ------. infected ------+ + •••••••••••••••••• + . : 1 44 306 ! x  �::::::::::::::::::::::::::::-: + I XXXXXYXYXXXxxxx •• --...------+ •••••••••••••••• I���Xxxxx�: Dead� X �XXX • ------...... 156 324 I XXXXXXxxxxxxxxxx:: ::: :: •• ------+ : :•••••••••••••• : : : : : : : : : : : : : : IXXXXHXXXXXXxxxxx •• ------+ •••••••••••••• IXXXXXXxxxxxxxxxxx • ------••••••••••••• 342 IXXXXXXXxxxxxxxxxxxx • ------+ •••••••••••• 168 IXXXXXXxxxxxxxxxxxxx •• ------+ •••••••••••• IXXXXXXZ:xxxxxxxxxxxxx • ------••••••••••• 360 I XXXXXXxxxxxxxxxxxxxxx ·· ------":' ------+ POP = 24O,OOO RISK= 20,OOO SICK=O DEAD =0 180 INFI-POP = 0 INFI-RISK = 100 POP = 24O,OOO RISK= 20,OOO S=.14 L=.016 R=.OO8 K=300 M=24 INFI-POP =O INFI-RISK =l00 . R-stepslmonth 1. Every 6 months one line S=.14 L=.016 R=.OO8 K=300 M:=24 Full width 01 scale = 240,000 R-stepslmonth 1. Every 3 months one line Today= month 28 (approx.) Full width of scale = 40,000

38 Science & Technology EIR December 5, 1986 population, the same "S-curve" dynamic sets in, only at a up of the initial phases of theepidemic , showing the extreme­ slower rate of growth. ly rapid spread in the "fast-track" group, reaching maximum saturation three years from now! At that point, virtually all How AIDS spreads from 'fast-track' groups of the "high-risk" group is infected. The second, superim­ into the general population posedcurve shows initial spread intothe "slow-track" groups, In the first-generation EIR model, the transmission pro­ which begins in earnestas soon as the infected "fast-track" cesses are grouped into two categories, fast- and slow-track, pool reaches 1 million, and accelerates rapidly thereafter. with the corresponding infection probability parameters de­ Five years from now, more peopleare infected in the general termined to fitavailable statistics on the actual epidemic in population than in the "high-risk" group. By the year 2014, various areas . These statistics imply the estimate, that the more than 80% ofthe U.S. population is either infected, sick, present total infection probability (per exposure) of combined or dead! Dismal as it may appear, this scenario errs on the "slow-track" routes, amounts to about one-tenth of the cor­ conservative side, omitting nonlinear factors of acceleration. responding probability for "fast-track" routes. Remember, Figure 6 illustrates the folly of proposals to curb the the present model doesnot take account of nonlinear increas­ epidemic by "safer sex." Here we have assumed that .the es in "slow-track" parameters as the epidemic progresses. spread of AIDS in the "fast-track"group is stopped complete­ Figure 4 presents the results of a model run for the United ly within the coming 12 months (a very optimistic assump­ States, assuming a "high-risk" population of about 20 million tion, given open admissions by "safer sex" proponents, that (U.S. Public Health Service estimate). Figure 5 is a close- their campaign has had little or no effect on AIDS spread in

FIGURE 6 FIGURE 7 U.S.A. 'safer sex,' after 36 months Proposition 64 after 36 months ----+------+------+------+------+------+------+------+ ----+------...------+------+------+------+------+------+

Month Month ...... •...... •...... 18 I •••••••••••••••••••••••••••••••••••••••••••••••••••••.•••.•.•••••••• 1 8 1+ ••••••••••••••••• ••••••••••••••••••••••••••••••••••••••••••••••••••• i . :::: :::: ::::::::: ::::: : : ::::: ::::: : :::: : : : : : ::: : :::: : : : ::: : ::: : : : ::: ••• 0 •••••••••0 ••••••••••• 0 ••0 ••• 0 ••0 •••••0 •••••0 ••••• ••••••••••••••• 1+ •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1+ 36 ...... 36 . .. . . � + ...... : : : : : ::: : : : : : : ::::: ::::: ::: : : : ::: : ::::: : : ::: :: ::: ::::: : : :::::::: : :: I ... • ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 54 I + •••••••••••••••••••••••••••••••••••.•••••••••••••••••••••••••••••• + . I + •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 54 � ::+ : : : : : : :::: : : : : ::: : : ::: ::::: : : : ::::: : :::: : : : : :::::: : : : ::: ::: : ::: I + •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1- ++++ •••••0 0 •••••••••••••••••••••••••0 • ••••••••• •••••••••••••••••••• 72 I- + ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 72 0.' 0 •••••••••• • •• i :: :: : :: : :: : : : :: : : ::: ::: : : ::: ::::: : : ::: ::: 1- + •••••••••••••••••••••••••••••••••••••••••••••••• : :::: . : ::.:: :::: : : : : : : : : : : : : : ...... 0 ••••••••••••••••••••••••••••••••••••••••••••••0 •••• . 1- +++ 90 : :: ::: : : ::::::: i=- : : : :: ::::::::::::::::::::::::::::::::::::::::::::: 90 � :::+ : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : . I ++++ ••• 0 ••00. 0 .. 0 •• 0 ...... 0 ••••••••0 ...... 0 •••••••••••• 108 i :-.. :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 1 08 i I -- + •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• I I -- + •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1 26 I - - + ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1 26 i ++ ••••••• • • 0 ••••••••••••••••0 ••0" 0 •••••••0 ••••••0 ••••••••••• 0 ••• I - + ...... 0 ...... 0 ••••••••••••••0 ••0 ••0 • ••0 •••••• 0 •••••• 1 44 IX - .. • ••••••••••••••••••••••••••• •••••••••••••••••• •••••••••••• ••• IX - +++ •• 0 •• 0 .. 0 • • • 0 ...... 0 0 ••••••••••••••••••••••••• IX - ++ ...... 0 ...... 0 ••••••••• 162 IX - ...... ; i� : :: ::: :::::::::: : :::::: Non- ::::::::: : : ::: :::::::: : : : : : : ::: :: 1 80 IX - ...... infected ··••• • •••·•··•···•·•·••······ ..•• IX - ++ 0" 0 ...... 0 • • 0 •••••••• ••••••••••0 •••••••••••••••••••••••• IX - ++ ...... 0 ••• 0 •••••0 •• 0 • •••••••••••••••••••••••0 ••••••0 ••••• 198 IXX - + ••••••••••••••••••••••••••••••• ••••••••••• ••••• •••••••••••••• IXX - ++ •• 0.0 0 0.00•••••• o.0 0".. 0 •••••••0 ••••••••••••• 0 •••0 ••0 ••••••••• IXX - ++ 0 •••••00 •••• 0 ..0 ...... 0 •••••••0 •••• •••••• ••••••••••••• 21 6 IXX - ++ ••••••••••••••••••••••••••••••••••••••••••••••• •••••••••••••• i== : : ::::;: Fast ::::::: ::::: :::: : :::: ::: : ::: ::::::::: ::: ::: : : :: 234 IXX - + • • •• track •••••••••••..•••••••.•••• • ••••.•••••••••••.•••• . ��� =- : : : ..:! r:'!�::::::::::::::::::::::::::::::::::::::::::::::: 252 252 IXXX -- + •• ••. ••••••••••••••. ••••••••••••. • ••••••••• •••••••••••••••••• IXXX - - ++ ...... 0 • • • 0 ...0 ••••••• IXXX 0 ••••00 ...... 0 0'" 0 •••••••••••••••••••••• 0 ••••••••••• 270 270 IXXX . IXXX - - + ...... 0 ••• o.0 ••••••• 0 •••••0 ••••••••••••••••••••••• IXXX -- + .. ...0 ...... 0 •••••••0 ...... • •••• 2 88 288 i��� :!::::::::::::::::: : : : : : : : : : : : : : : : :::::::::::::::::::: : : : : : : : : : : : : : : : : : ::::::::::::::::::: : : : : : : : : : : : : : : : : : IXXX -- track .••••• •.••••••••.•••••••••.•.•..••..• .••.•••.•••••. •• 306 - � == :�.� + 324 i������== :: : ::: : : : : : : : : : : ::::: : ::::::::::: : : : : : : :::: ::: : : ::: : : : : ::::::

342 1= == ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: IXXXX -- ...... 0 ...... 360 ��:::X -:- ::::::::::::::::::::::::::::::: : : : ::: : ::: :::: :::::: ::: ::: : POP = 240,000 RISK = 20.000 SICK = 0 DEAD = 0 INFI-POP = 0 INFI-RISK = 100 S=.14 L=.016 R=.OO8 K=300 M=24 R-steps/month 1. Every 6 months one line Full width of scale = 240,000

EIR December 5, 1986 Science & Technology 39 the so-called risk groups). Whether or not such measures Another source of excessively low estimates, in the na­ ever could have had an effect, it is too late now. The epidemic tionwide computer runs just discussed;· is the fact that Yfast< � has already been launched in thegeneral population, and the track" transmission is distributed unevenly in the United general epidemic curve remains essentially identical to Fig­ States, with concentrations in major cities such as New York ure 4. and San Francisco. In such areas the breakout of infection Quite different is the potential effect of public health into the general population is much faster than in less dense measures of mass testing and quarantine, as necessary, to areas. Figure 8 shows the devastating effect of AIDS in a radically reduce transmission in the general population. Fig­ hypothetical city of 5 million inhabitants, in which about ure 7 shows the projected effect of public health measures one-third of the population is assumed to be subject to "fast­ implemented within the next 12 months, on the assumption track" transmission. Within 15 years, the epidemic grows that these measures succeed in reducing the "slow-track" from a mere 10,000 infected, to infect or kill some 80% of parameter by a factor of 6. This would correspond to a situ­ the population. ation where the number of potentially infectious contacts between infected and noninfected persons is reduced by about Effects of multiple exposure 80%. One of the crucial factors omitted from the first-genera� In that case the epidemic is massively slowed, though not tion model described above , is the effect of repeated exposure completely stopped. to AIDS viruses and other viruses in areas of high infection-

FIGURE 8 FIGURE 9 AIDS in a city of 5 million AIDS epidemic on 'repeated or multiple ----+------+------+------+------+------+------+------+ Month exposure' hypothesis - I ••••••••••••.•••••••••••••.••••.•••••••••••••••••••.•••••••• '" ••••••• ----+------+------+------+------+------+------+ ------+ . Month ...... 12 � ::::::::::::::::::::::::::: : : :::::: : : : ::::::: ::::::::::::::::::::::: 1 •••••••••••••••••••••••, ••••••••••••••••••, ••••••••••••••••••, •••••••• 1 + •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1 + •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 18::::::::::::::::::::::::::::::::::: :::::::::::::::::::::::::::::::::::: I ••••••••••••• , .••••••••••• , .•, •.•••••••••••••••••••••••••••••••••••••• 24 ::+ .:::::::::::::::::::::::::::::::::�::::::::::::::::::: ::::::::::::: I . ••••..••••••...• , •.••••••..•...•••.••••••••••••••••, ••••••••••••.•••• . 24 � ::::::::: ::::::::::::::::::::: ::::: ::::::::::::::::::::::::::::::::::

36 I+ •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 36 �: . : :: : :::: : ::::: : : ::: ::: : : : : ::: : : ::::::::: ::: :::: :::::: :::::::::: : :::

481 I++ ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• ++ 48 : + .::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 60

72

84

. Fast ••• 96 ======-+ +� ::::: :::::::::::::: ::::::: :::::: rack · ..· ...... infected ...... 108

120

132

144 1 44 156 156 168 ...... 168 180 POP = 5,OOO RISK "" 1666 SICK =O DEAD =O 180 INFI-POP = 0 INFI-RISK = 10 POP = 240.000 RISK = 20.000 SICK= O DEAD =O S=.14 L=.016 R=.008 K=300 M=24 INFI-POP = 0 INFI-RISK = 100 R-steps/month 1. Every 3 months one line S=.14 L=.0000016 R=O K=76 M'=24 Full width of scale = 5,000 R-steps/month 1. Every 3 months one line Full width of scale =240,000

40 Science & Technology EIR December 5, 1986 especially when compounded with environmental cofactors While cumulative effects of expOsureto AIDS virusalone such as poverty, crowding, and insect infestation. Dr. Mark have not been sufficiently researched, there is considerable Whiteside of Miami, Florida, has compiled massive docu­ evidence that infection by certain viruses(particularly insect­ mentation of these effects in such areas as the famous Belle borne viruses) increases susceptibility to infection by AIDS, Glade. and vice versa. The probabilities of multiple exposure to In a preliminary study, the author and his collaborators different viruses, and of repeated exposure to a single virus, investigated the dynamics of "repeated and multiple exposure increase in a similar fashion as a function of density. Hence, tracks." This study involved modifying the model equations similar threshold effects will occur in both cases. according to the simplifiedassumpti on, that the AIDS infec­ Preliminary computer runs confirm this threshold phe­ tionprobability (perexposure) is significantly higher for those nomenon: When the density of infected persons is low, the persons exposed repeatedly within a given fixedtime period. "multiple exposure track" is damped out by the slow death It is easy to see, that repeated exposures are highly infre­ rate in the infectious pool. But, as soonas the infected density quent, as long as the density of infected persons remains low. exceeds a certain limit, the rate of infection explodes, out of But, for higher densities, the probability of multiple exposure control, at a nonlinearly accelerating rate (see Figure 9). increases rapidly, and the "repeated exposure track" may Unfortunately, this effect is destined to play a major role in become even faster than the "fast-track" transmission in the the great population centers of the United States, unless we so-called risk groups. stop the AIDS epidemic in time.

to deal with AIDS , directly accountable to Parliament; more money for clinics treating sexually transmitted dis­ U. K. , France seekjoint eases; upgraded British involvement in international re­ �arch efforts to combat AIDS and finda cure. action to stop AIDS At a Paris press conference Nov. 27, French Health Minister Michele Barzach announced on behalf of the At her meeting with French government leaders in Paris French government, a series of exceptional measures Nov. 21, British Prime Minister Margaret Thatcher won against the spread of AIDS . The daily Le Figaro headlined an agreement to put AIDS on the agenda at the summit of the next day: "Against AIDS , a planetary crusade." Inter­ European prime ministers in London on Dec . 5. viewed on national television, Mrs. Barzach ,stated: "AIDS Emerging from a meeting with French President Fran­ does not just concern 'risk groups.' Every day It baby is �ois Mitterrand, Mrs. Thatcher told the press that "we born infected with.AIDS. Fifteen persons a day are con­ would be discussing AIDS" at the Dec . 5 meeting, since taminated by the disease. It is no longer a disease of "you can't discuss drugs without AIDS ," and drugs is a marginal people. . . . This is why the governmentdecid­ top agenda item for that meeting . ed to declare AIDS 'a great national cause' like cancer or According to a Nov. 22 London Daily Express ac­ tuberculosis." , count, "Mrs. Thatcher convinced (Mitterrand] that AIDS She added at her press conference: "Frenchmen must is the greatest current threat to Western civilization," and understand that we have reached a turning point in the insisted that AIDS be made the number-one agenda item spread of the disease. Among the new declared cases in for the prime ministers' meeting, the last under Britain's the last quarter, 43% were heterosexuals." tenure as president of the 12-nation European Commu­ The French government made a series of important nity. decisions for the anti-AIDS campaign. A foundation will On Nov. 20, British cabinet ministers received a ter­ be created on the model proposed by Prof. Luc Montag­ rifying appraisal of the AIDS crisis in the United Kingdom nier of the Pasteur Institute in a recent interview to Le from experts , who told them that AIDS infection is dou­ Monde. The foundation, to be "operationat within two bling every 10 months in the United Kingdom. years," will bring together in one place treatment units On Nov. 21, the House of Commons held its first-ever and a research center. It will be financed by public and debate on AIDS. The British government announced it private funds. The government will help financedetection will raise spending on AIDS from only £5 million, to at and prevention programs, picking up the full costs of the least £20 million over the next year. British Secretary of Elisa and Western Blott tests. State for Social Services Norman Fowler said that the It is reported in France that PrimeMinister Chirac and increasedspending would beearmar ked for: creation within President Reagan recently exchangedletters on the subject the National Health Service of a Special Health Authority of scientificcooperation against AIDS.

ElK December 5, 1986 Science & Technology 41 TIillOperation Juarez

Educating the labor fo rce of Ibero-America

While it is true that Ibero-America has its share of natural resources, both biological and mineral, it is a delusion to see in these resources per se a source of wealth. In fact, misplaced Part 14 focus on natural resources is partly responsible for the very underdevelopment the continent now experiences, with pe­ Ibero-American integration ' troleum and mining relatively well developed, surrounded by a sea of industrialunderdevelopment. By contrast, Japan, By the year 2000, 100 million new jobs will be cre­ with virtually no natural resources of any kind, has become ated in lbero-America, in which workers will be the third-greatest economy in the world. Japan has done this trained to be skilled in the production of capital by concentrating on the development of labor power, by goods. By 20 15, the continent will be an economic superpower, whose production and productivitywill rapidly increasing its general education and skill level. equal the level attained by the industrialized coun- For Ibero-America as for all modem economies, this task This installment con­ comprises two aspects: the baseline level of literacy and tinues Chapter 5 of the general education of the majority of the work force, and the Schiller Institute's book number and quality of training of scientists, engineers, and Ibero-Amertcan Integra­ technicians. Contrary to Maoist and other "anti-elitist" the­ tion: 100 Million New ories, it is this last feature which is the most critical: It ulti­ Jobs by the Year 2000! mately determines the rate of technological advance of an published in September economy. 1986 in Spanish, and ap­ Several examples from the past half-century help to make pearing exclusively in English in EIR's seriali­ the point clearly. The United States recovered from the worst zation. An international depression in its history after 1939, to previously unimagined team of experts prepared levels of heavy capital goods production for war in four years, this study on the urgent measures needed to free only because there was a reserve of unemployed and under­ lbero-America of its economic dependency and employed skilled labor created over the previous 40 years of spark a true, worldwide economic recovery, elab­ development. Postwar Japan recovered the way it did after orating the outline of Lyndon LaRouche's 1982 World War II only because of pre-war levels of skilled and proposal, "Operation Juarez. " educated workers. Both South Korea and Taiwan instituted Numbering of figures and tables follows that of very rigorousprograms for universal education from the early the book. 1950s, without which their respective "economic miracles" could not have happened.

42 Operation Juarez EIR December 5, 1986 TABLE 5-3 TABLE 5-4 Number of high school and university Enrolled in natural science and engineering students in Ibero-America in the universities of various countries 1982-83 1983 (per million inhabitants) Population Number of In this Natural Sciences: Engineering group enrolled As % of Level of Age Students Graduates Students Graduates education Group (millions) (millions) their group Argentina 758 n.d. 2.340 n.d. High School: Brazil 528 63 1.228 179 10th-1 2th grades 15-17 26.7 10.2 38.0 Colombia 208 25 3.159 256 University: Chile 741 73 3.016 279 1 st-2nd years 18-19 16.7 2.9 17.5 Mexico 323 29 3.429 318 3rd-4th years 20-21 15.8 1.5 9.4 Peru 557 10 3.085 51 All four years 18-21 32.6 4.4 13.6 Venezuela 391 16 3.787 245 West Germany 1.693 121 3.549 321 Postgraduate 22-24 22.3 0.6 2.5 South Korea 1.170 153 6.943 1.426 United States n.a. 381 n.a. 433

Sources: UNESCO, ECLAan d our own estimates. Japan n.a. n.a. 3.367 782

n.a. = Data not available. In contrast, education in Ibero-America, despite genuine Source: UNESCO. progress in the last 30 years, especially at the primary and secondary levels, is far below what it must become by 2000 and 20 15 to realize the investment and growth program we have outlined. Official figuresas compiled by Unesco based At the college/university level the deficiencyis even more on country data show a picture in which school attendance acute. Only 13.6% of the 18-21 age bracket is in school in through the first six years is effectively universal in most Ibero-America, the majority of these only for one or two Ibero-American countries, and is supposedly nearly univer­ years; and post-graduate education involves only 2.5% of the sal through the first three years of secondary school. How­ 22-24 age bracket. Table 5-3 shows the estimated school­ ever, due to very high rates of repeating grade levels in most age 'popUlation, school attendence and percentage rate, for countries, the actual number of students completing three the 15-24 age brackets, for Ibero-America in 1982-83. years of secondary school is undoubtedly very much below Even more serious is the distribution of disciplines of 100%. The major problems in these grade levels are: Ibero-America's university students and the relative percent­ • excessively large classroom size in many countries; ages of those who complete a four-year course of study and • inadequate training of teachers; graduate. Table 5-4 shows relatively few students of the • antiquated teaching materials, especially for the ali-im­ natural sciences and of engineering in Ibero-America, com­ portant area of science education; and pared to South Korea and West Germany, measured in num­ • and the overall conditions of poverty in which the students bers of students graduating in this fieldper million population live, making classroom concentration, and at-home study, of the country, and number per million graduating. very difficult. As can be seen, Argentina and Brazil have the best record But it is at the higher levels that the more serious problems in Ibero-America in training natural scientists, but their levels appear. The Unesco figures suggest that in 1983, at most are still about half those of South Korea and West Germany, 38% of the children between the ages of 15 and 17, the age while the numbers of graduates in these fields is abysmal. for high school, actually attended school. Forty-nine percent And while most countries have many engineers in school, of 15-year-olds attended school, but only 28% of 17-year­ again, the number that graduates is very low. Peru's case olds , which means that at most 28% of the youth graduated deserves note for having by far the poorest ratioof students from high school. This is a terrible percentage, and means who graduate, in the two disciplines listed above and across that the vast majority of even the younger adult population the board. Of particular note is that Mexico is weak in the lack an adequate high school education-and the older adult natural sciences even compared with the rest of Ibero-Amer­ age brackets obviously contain yet far fewer high school ica. Mexico's Consejo Nacional de Ciencia y Tecnologia graduates. Such a basic high school education is the mini­ reported that in 1975, Mexico had a mere 210 students en­ mum needed to handle a skilled blue-collar job in a modem, rolled in masters' programs in physics and only 14 in docto­ industrial economy. rates; 149 and 6, respectively, in chemistry; 185 and 49,

EIR December 5, 1986 Operation Juarez 43 respectively, in biology; and 149 and 11, respectively, in Clearly,it will be impossible for lbero-America to achieve mathematics. While it may have improved somewhat in the the development goals elaborated earlier in this chapter, which last decade, it can be assumed that not only in Mexico, but entail attaining West European levels of overall development throughout the continent, the situation at the post-graduate by employing technologies at the upper range of sophistica­ level reflects the poor rate at which graduates of four-year tion, including many not yet fully developed, without closing programs are turnedout . the enormous research and development gap indicated in Most telling of all is the failing in the area of research and Figure 5-13. development. Figure 5-13 shows Ibero-America's relative To achieve these development goals necessitates a crash number of scientists in, and expenditures for, research and program of education at all levels. First, it entails upgrading development, compared to the rest of the world. The figures the quality of education at the primary and secondary levels, speak for themselves. and returning to a classical curriculum modeled on the fa­ mous Humboldt reform in 19th-century Germany. And it means ensuring that by the year 20 I 5, almost every child of the appropriate school age graduates at age 18 with 12 years

FIGURE 5- 13 of basic education. Second, it entails raising substantially the Scientists and engineers in research and percentage of youth going on to 2-4 years of higher educa­ development tion. Third, it requires ensuring that the preponderance of 1980 those going on to higher education specialize in education, Africa medicine, natural science, mathematics, engineering, and 0.4% agronomy, to the almost complete exclusion of relatively useless categories such as sociology, humanities, business administration, law, and so on, which today prevail in our universities. Ibero-America Tables 5-5 and 5-6 project estimates for needed atten­ 2.4% dance for age groups 15-24 for 2000 and 20 15. The projec­ tions assume that in 2015, 100% of enrolled students finish at least four years (up to age 16), and 90% graduate from Asia secondary school; that 40% also complete at least two years 18.5% of college or its equivalent (trade school, normal school, etc.); that 25% complete a full four years, with 15% com­ pleting five, and 10% completing seven or more years of 0.9% higher education. Targets for 2000 represent a partial attain­ Europe ment ofthese levels (75% graduation from secondary school, 22.3% 35% completing two years of college, 20% completing four

Total = 3,756,100

Expenditures in research and development 1980 Africa 0.3%

Oceania 32.1% 0.9%

Ibero-America Europe 1.8% 34.0%

Arab states A veterinary training program in Mexico City. one of the 0.5% scientific-technicalfields where [bero-America must vastly

Total = 207,801 million doliars increase the number of students in higher education .

44 Operation Juarez EIR December 5, 1986 TABLE 5·5 TABLE 5·6 Projection of number of high-school and Projection of number of high-school and university students in Ibero-America university students in Ibero-Amerlca Year 2000 Year 201 5

Population Population In this Number of In this Number of Level Age group enrolled As %of Level Age group enrolled As %of of education group (millions) (millions) their group of education group (millions) (millions) their group

High School: High School: 1 Oth·12th grades 15-17 37.9 30.7 81 .8 1 Oth·12th grades 15-17 52.9 50.3 95.1

University: University: 1 st·2nd years 18-19 23.5 8.8 37.5 1 st·2nd years 18-19 33.1 14.9 45.1 3rd·4th years 20-21 22.6 5.1 22.5 3rd·4th years 20-21 32.3 8.9 27.5 All four years 18-21 46.1 13.9 30.2 All four years 18-21 65.3 23.8 36.4

Postgraduate 22-24 31 .8 2.2 6.7 Postgraduate 22-24 45.5 5.3 11.7

years, and 5% going on for two or more additional years). total number of additional students who must be provided Attaining these targets, assuming sufficient emphasis on the education, compared to today's level (see Table 5-4, above), indicated quality of education and disciplines, will largely in 2000 and 20 15. close the trained manpower gap now experienced by the It should be obvious that supplying this number of stu­ continent. dents with quality educational facilities and instruction is Training this number of students will involve an enor­ going to be quite costly, and must be understood as an in­ mous investment, in new schools and universities, in teacher vestment in development no less essential than that for ener­ training, and in equipment, especially laboratory and related gy, infrastructure, or capital goods. Without it, the invest­ equipment for science and technical education. Including ment in physical capital cannot be effectively utilized; with­ figures for the additional students who will need school fa­ out it, the necessary ever-increasing levels of productivity cilities in the 6- 14 age bracket as well, Table 5-7 gives the will not take place, and the entire program will collapse.

TABLE 5·7 Increase in student population 1985-2015 (millions)

Level Increase Increase Increase of education Age group Enrolled In 1985 1985-2000 2000-2015 1985-2015 Total In 2015

Primary 6-1 1 60.1 23.2 32.2 55.4 115.5

High school: 7th·9th grades 12-14 27.5 10.6 14.7 25.4 52.9 1 Oth·12th grades 15-17 10.2 20.6 29.7 40.1 50.3 All six years 12-17 37.7 31 .2 44.4 65.5 103.2

University: 1 st·2nd years 18-19 2.9 5.9 6.1 12.0 14.9 3rd·4th years 20-21 1.5 3.6 3.8 7.4 8.8 All four years 18-21 4.4 9.5 9.9 19.4 23.8

Postgraduate 22-24 0.6 1.6 3.2 4.8 5.3

EIR December 5, 1986 Operation Juarez 45 �ilillInternational

The strategic issues behind 'Iran-gate'

by Criton Zoakos

Among America's friends around the world, there is under­ struction can only have salutary effects both for the United standable apprehension over the present, explosive situation States and the Alliance. in Washington. Especially among the NATO allies in West­ Whether President Reagan and his Attorney General are ernEurope (in the Federal Republic of Germany, Great Brit­ fully cognizant of the implication of what they began is not ain, and France) the fear has been expressed, that a protracted fully ascertainable now. It is not guaranteed, either, that political crisis in Washington, a paralysis which may last Reagan and Meese will win the fight which they began-nor some two or three years-until the next President is acquaint­ should it be leftto them alone to fight. ed with his job, as the Times of London puts it-might create a vacuum in the Alliance, which would play into the hands The 'new strategic consortium' of the growing Soviet policy of bullying, intimidation, and European allies will best appreciate the benefitsaccruing seduction in Europe. from an eventual destruction of the "Kissinger NSC struc­ They must take into account that the fightin Washington ture ," if they recall what had happened to Europe during the is something much greater than any "Watergate." It is not 1973-74 period, when Kissinger had declared "The Year of under the control of any one force or institution; its eventual Europe," in the aftermath of the October 1973 War in the outcome is not certain except to this extent: A major cleanup Middle East which Kissinger had then arranged, and the "oil is now in progress, a "catharsis" in the classical sense, whose price revolution" which brought David Rockefeller's Trila­ only usefulness would be to free the United States from the teral Commission to world prominence. pervasive influenceof the invisible "para-government"of the The policies begun then by Kissinger were identifiable liberal Establishment's families and their various gatherings by three components: a) SALT treaties favoring the Soviets, such as the Trilateral Commission. The implications for the b) a "special relation" between the U.S. and Israel, c) me­ world are great. thodical neglect of Western Europe. The ultimate intended EIR is perhaps best situated to supply the needed added outcome of those policies, was to be what George Shultz ingredient of insight, especially because the formal occasion almost succeeded in carrying out at Reykjavik-a decou­ around which the Washington scandal revolves and grows, pIing of Europe from the United States. Zbigniew Brzezin­ the shipment of American weapons to Iran, is a scandal ski's recent book, Game Plan, offers insightinto the strategic against which we have campaigned, both in print and in the objectives which have constituted the "secret agenda" of the courts, since 1979. cabal of certain U.S. policymakers associated with the Tri­ As reported elsewhere in this issue, the current phase of lateral Commission, a "secret agenda" which has been pro­ the President's and Attorney General Meese's inquiry has moted methodically from September 1969, when Kissinger begun to dismantle what in the international intelligence put Khomeini in power, to October 1986, when George Shultz community is known as the "Kissinger NSC structure." This almost succeeded in decoupling the Alliance at Reykjavik. is the rogue elephant of America which has roamed the world This "secret agenda" of certain powerful U.S. families for over 15 years, caused great strategic disasters and suffer­ associatedwith the Trilateral Commission and broader, more ing-an uncontrolled, supra-governmental entity whose de- informal gatherings of the "Establishment" loosely referred

46 International EIR December 5, 1986 to as the "bankers' CIA," has been merely reflected in such to a memorable White House press conference on Nov. 25. locations as Brzezinski's book or earlier, in Kissinger's pol­ The purpose of the press conference was to target for inves­ icy pronouncements. One central element of the "secret agen­ tigation Israeli and Israeli-connected intelligence activities da," has been the objective of supplanting the military alli­ both with respect to Iranian arms shipments, and with respect ance between Europe and the United States with a special to NSC-connected operations in Central America. It soon relationship between the United States and Israel, as Israel is became apparent that the entire "Israeli intelligence appara­ armed to become a significant intennediate nuclear power. tus" inside the National Security Council had become the Ariel Sharon and Moshe Arens are the architects of the Israeli target. Subsequently, when Meese outlined the mandate for side of this policy. Since the launching of this secret agenda the Justice Department investigators, it became further ap­ by the U. S. Establishment, Israel's nuclear arsenal has grown parent that the whole of what is called the "Kissinger NSC to some 400 nuclear warheads, mounted on 100 MIRVed structure," with its far-flung ramifications, is the broader intennediaterange missiles of some 1 ,200km range-while target. As a result, the initiative is no longer with the Trila­ at the same time, the relative military strength of Western teral candidacy of Sam Nunn, but with Reagan and Meese. Europe with respect to the Soviet Union has declined. The President Reagan and his friend Meese are effective po­ Soviet Union's consistent silence over Israel's nuclearization litical in-fighters. The reason they opened this whole "Kis­ is indicative of the larger strategic deals between Moscow singer NSC structure" can of wonns is, mostlik ely, because and the U.S. liberal Establishment. it was a good, fair target for a political counterattack. The The crisis in Washington dates from the near catastrophe operating motives were political survival rather than any at Reykjavik, and certain events surrounding it. The plan of profound, principled opposition to the disastrous policies the American Trilaterals had been to create, with the aid of represented by this trilateraloid "Kissinger NSC structure." George Shultz, both the perception and the fact that President How far are Reagan and Meese willing to take this matter? Reagan was succumbing to an inevitable decoupling of the It no longer depends on them. Both President Reagan and Alliance, by means of the so-called Zero Option for Inter­ his enemies are , as of now, locked into a course of events mediate Range Nuclear Weapons. After Reykjavik, Presi­ which is running beyond their control. One thing is for cer­ dent Reagan suffered a major electoral defeat, mainly be­ tain, that the "can of wonns" has been opened, that the cause the electorate rejected the administration's economic "Kissinger NSC structure," and its sister feature, Israeli Mos­ policies. Those policies were simply the Trilateral Commis­ sad capabilities in the United States, are being wiped out. It sion's same old policies of "post-industrial society," appro­ is more than likely, that the interests now hit by the Meese priately rephrased by White House Chief of Staff Donald T. investigation, may soon retaliate and make public further Regan to fitthe unfortunate economic philosophy preferences revelations which they would otherwise have preferred to of President Reagan. Both the President's own economic keep secret. philosophy and Don Regan's actual economic policies, cost This would only have the effect of provoking a sterner Reagan the 1986 elections. offensive by the President and Meese, precipitating further The present crisis around the subject of arms shipments revelations from the opposing side. The bottom line in the to Iran was launched, initially, by Trilateral Commission spiraling crisis is this: The Reagan administration can be members in the Democratic Party , who have already orga­ proven guilty on two counts: 1) Instead of investigating the nized to prepare Sen. Sam Nunn to be the 1988 presidential Carter administration's backing the Khomeini dictatorship'S candidate for the Trilateral Commission. The Iran arms ship­ coming to power, as Ronald Reagan had promised during his ment scandal, timed to explode just as Reagan was losing the 1980 campaign, the Reagan administration continued the mid-tenn election, had been designed, by its authors, to cover-up of the deals with Khomeini which had been set up drown President Reagan under the fumes of a growing scan­ by Carter, Brzezinski, Vance, and Muskie; 2) Instead of dal, a scandal to serve two purposes: transfonn Reagan into shutting down Carter's Israeli arms-trafficking to Iran, the an ineffectual "lame duck" President, and provide a forum to Reagan administration sanctioned the reactivation of this op­ promote the cause of Sam Nunn. eration. Here, then, is the logic propelling upcoming develop­ A classical tragedy ments: The Reagan presidency, to survive, must continue It is obvious that a two-year period of growing scandals "full disclosure" investigations. The Trilateral related net­ and investigations in Washington, with its main protagonists works and capabilities under assault from Reagan's "full beinga weakened and defensive President and an aggressive, disclosure" policy, must try to undo the President in order to prosecutorial Sam Nunn, would have given George Shultz survive. But they cannot "undo" Reagan, unless they prove every opportunity to abandon Western Europe's defense to that the illegality originates in Carter's policy towardIran . the mercy of the Soviet Union. Without such national catharsis, the political force, in the President Reagan, however, retaliated by fighting in an United States, which is pursuing the secret agenda of decou­ unexpected way, unleashing AttorneyGeneral Edwin Meese piing from Europe, could not be defeated.

EIR December 5, 1986 International 47 Raisa Gorbachova 'elected' to Soviet Culture Fund presidium by Luba George

At a Moscow press conference Nov. 13, the 79-year-old firstGreat Russian epic. " Russian chauvinist, Dmitri Likhachov, announced that he The creation of the Soviet Culture Fund has provided the had been elected chairman of the newly created Soviet Cul­ influential Raisa Gorbachova with her first official fu nction. ture Fund. Likhachov revealed the power behind the throne As the de facto leader of the Soviet Culture Fund, she will be by declaring that elected to the lO-person presidium was doing openly what she has previously been doing behind the Raisa Gorbachova, wife and stringpuller behind Soviet lead­ scenes: directing and shaping the Soviet Union's cultural er Mikhail Gorbachov. Others named to the executive board transformation. Raisa, reportedly the daughter of Maksim included writers Yuri Bondarev and Boris Oleinik, and Val­ Titorenko, an official in Lenin's New Economic Policy (the entin Falin, the former ambassador to West Germany, now NEP promoted small-scale private enterprise), has been per­ chief of the Novosti news agency, sonally involved in easing the screws on Soviet artists. Likhachov speaks for the unofficial "Russian Party" which The long-censored director Elem Klimov has been re­ is said to consist of many leading political and military fig­ cently elected to head the U.S.S.R. 's Filmmakers' Union; ures, including Gorbachov, Marshal Nikolai Ogarkov, and Boris Pasternak's novel Doctor Zhivago may be published; writer Vladimir Solukhin. He is also an officerof the Society the publication of works by poetess and contemporary of for the Preservation of Russian Monuments (Rossiya Soci­ Maxim Gorky Anna Akhml¢ova will soon be under way. ety). Earlier this year, in the theoretical journalKommunist, Even more stunning, was the appearance in print earlier this he demanded that the entirety of northern Russia be declared year, of poems by Akhmatova' s husband, Nikolai Gumilyov. a historical monument and spared any development, includ­ Never before published in the Soviet Union, Gumilyov was ing river diversion projects. Many of Likhachov's articles executed in 1921 for his part in the so-called Taganets plot of feature Russia's Byzantine origins. Already in 1946, he wrote a group of Russian monarchists. (The Taganets circle also on how Russia had inherited its historical mission and impe­ happens to have been penetrated and partially run by the rial franchise-as the "Third Rome"-from Byzantium. shadowy Soviet intelligence group that would become known A 1981 (No. 24) edition of a samizdat (Russian under­ as the Trust.) The Soviet weekly Ogonyok, which printed ground material) miscellany, titled Pamyat (Memory), de­ Gumilyov's poems this past summer, also carried a lengthy scribed how this "Russian party" came into existence after biographical sketch of the poet by a member of the Writers' the 1917 October Revolution. In 1923, a study circle of Union, which explained his "counterrevolutionary" actions Leningrad intellectuals calling themselves the "Cosmic as the result of a quite understandable and practically admi­ Academy of Sciences" met regularly to read scholarly pa­ rable Russian officer's loyalty. pers , some of which dealt with Russia's religious and histor­ The founding Membership List of the Fund reads like a ical past. In 1928, nearly all the members of the circle were Who's Who of the KGB-GRU "cultural" world: filmmakers arrested, charged with "counter-revolutionary" activity. like Elem Klimov, musicians like A.M. Balanchivadze (the Among those arrestedby the OGPU (KGB) was future Aca­ brother of Stravinsky'S collaborator and choreographer, demician D. S. Likhachov, accused of "nostalgia for the pre­ George Balanchine), architects, members of the Soviet Peace revolutionary past." Today the same Likhachov is the emin­ Council, the Rodina (Motherland) Society, and Likhachov' s ence grise of the Soviet Culture Fund and a recognized spe­ pet project-the Society for the Preservation of Historical cialist on "Ancient Russia." It was on his personal initiative, and Cultural Monuments. It includes "stars" like spy novelist that Unesco declared 1986 the year to commemorate the and reput.ed GRU official, Julian Semyonov, Kirghiz writer 800th anniversary of the Kievan Rus epic, "The Lay of the Chinghiz Aitmatov, the leading Soviet "NEP specialist" Ser­ Host of Igor." Likhachov has reinterpreted the piece as "the gei Zalygin, editor of SovetskLlya Kultura Andrei Belyayev,

48 International EIR December 5, 1986 .' .... «.. ..j . the head of the Moscow Patriarchate's Publishing House, Archbishop Pitirim, and many more . ElR S/!f!Ct91 �eport

'Countermeasure' to Americanism Likhachov declared in an article he wrote for the Soviet cultural weekly Sovetskaya Kultura (Sept. 20): "The creation of the Soviet Culture Fund is of great political significance, an act which has no comparison in any other country in the How Moscow Plays the world. Take a highly developed country like America, for in example. Here they are drilling into the heads of the popula­ Muslim Card the tion such propagandistic slogans as: 'U.S.A.-the nation of East nations' ....' Under the rubric of protecting the heritage of Middl In thepast e ear, have ou. . . all the world's nations, the United States is carrying out its y y propaganda of American hegemony ...of nationalistic ar­ Suspected that the news media are not presenting rogance ...in all cultural spheres. American hegemony in an accurate picture of Soviet gains and capabilities the sphere of culture is a big myth ....As a counter-measure in the Middle East? to Americandemogo gy, the founding document of the Soviet Wondered how far the Khomeini brand of funda­ Culture Fund stipulates that citizens [e.g., Westernmembers mentalism will spread? of the "Trust"] of any country can participate in its work . . . Asked yourself why the United States seems to be to help contribute in the realization of its tasks." making one blunder after another in the Middle In his address to the founding conference, former Min­ East? ister of Culture P. N. Demichev declared that Soviet culture Ifso, you need EIR 's Special Report, "How Moscow must set the "new cultural standards" in the world today. Plays the Muslim Card in the Middle East." "Often in the West it is written about the apocalypses and catastrophic degradation of man , about the loss of fundamen­ This ground-breaking report covers: tal esthetic forms and norms of civilized behavior ....To­ • History and Mideast policy of the Pugwash day as never before , active spiritual standards have to be set Conferences, whose organization by Bertrand which can counter today' s imperialism." Russell in 1957 involved high-level Soviet par­ A leading Soviet agent of influence since the time of ticipation from the beginning. Pugwash Confer­ Lenin, Armand Hammer, was this past summer directly in- ences predicted petroleum crises and foresaw . volved with Raisa Gorbachova and Soviet Culture Minister tactical nuclear warfare in the Middle East. Vassili Zakharov , in preparations to found the Fund, which promises to promote the "cultural and spiritual richness" of • The Soviet Islam establishment, including Russia, and to establish and upgrade "cultural ties abroad ." Shiite-born Politburo member Geidar Aliyev, the Zakharov, the Central Committee's "agitprop" specialist, Soviet Orientology and Ethnography think tanks, took over Demichev's job as culture minister Aug. 16 this and the four Muslim Boards of the U.S.S.R. year. • Moscow's cooptation of British intelligence At the Fund's inauguration ceremony , Likhachov paid networks (including those of the "Muslim tribute to the "great friend of the U.S.S.R.," Armand Ham­ Brotherhood"-most prominent member, Aya­ mer, and underlined that the Fund and its work will live on tollah Khomeini) and parts of Hitler's Middle "private contributions and donations." The October issue of East networks, expanded after the war. Soviet Film reported on a new Soviet movie called Face to

Face. directed by Anatoli Bobrabsky, which is a fictional • The U.S.S.R.'s diplomatic and political gains previous of the Culture Fund's quest to reclaim art works for in the region since 1979. Soviet penetration the Motherland. In the film,a Soviet journalistand a Russian of Iran as a case study of Moscow's Muslim card. emigre named "Prince Rostopchin" team up at Sotheby's to The August 1983 founding of the Teheran-based purchase for the U.S.S.R. a painting by the Russian artist terrorist "Islamintern," which showed its hand Vrubel. And the Nov. 24 issue of the weekly New Times. in the Oct. 23 Beirut bombings. illustrated by a big photo of Armand Hammer presenting his "gifts" to the Culture Fund at Moscow's central exhibition '250.00. Order from EIR Research, P.O. Box 17726, hall, proudly announced that "contributions to the Soviet Washington, D.C. 20041-0726 Culture Fund have begun to flow in. More and more dona­ tions are entered on U.S.S.R. State Bank account No.700 specially opened for the purpose ."

EIR December 5, 1986 International 49 and counter-assassinations ..Enrile 's sacking was prompted by reports of troop maneuvers in and around Manila in prep­ aration for a military coup against the Aquino government. However, General Ileto and others have indicated that the coup rumors lacked substance-but they did give Aquino the pretext for removing Enrile. The Philippines : Armed Forces Chief of Staff Fidel Ramos reportedly convinced Enrile to cease and desist. The military then "put whose victory? a gun to Aquino's head," as one well-placed source in Manila put it, and forced her to appoint in his place General Ileto, a counterinsurgency expert who is believed able to rally the by Linda de Hoyos military behind him. While the Enrile-Ileto exchange appears to have boosted the military's presence in the government, The public coordinating body of the Iran-Contra caper is the the overall effect has been to weaken the line-up of national "208 Committee," the officialcovert operationscoordinating forces that would draw the lines against the NPA and could agency of the U. S. government comprised of officers of the muster the political leverage to force an economic policy CIA, State Department, and Defense Department. EIR read­ independent of the International Monetary Fund and the su­ ers will recall that the 208 Committee, whose members in­ pranational looters of the country's resources. clude Deputy CIA Director RobertGates and Assistant Sec­ retary ofState Michael Armacost, ran the successful cam­ The U.S. role paign to bring down the governmentof Philippines President Given the actual results, it is not surprising to find that Ferdinand Marcos in February of this year. In the last week indeed, Filipinos were not the only players in the month's of November, it was the committee's operations around Iran maneuverings. On Nov. 18, according to knowledgable that dominated the news, but sources indicate, the 208 Com­ sources, the State Department's Philip Habib-known now mittee and its operatives were also instrumental in the dra­ in Manila as the "gravedigger" for his role as special envoy matic events that unfolded in Manila beginning Nov. 23. in bringing down Marcos in February-arrived secretly in Those events were hailed as a triple victory for Philip­ the Philippines, via Clark Air Base. pines President Corazon Aquino, but further down the line The United States had already made public its desire to they may well appear as a defeat for the Philippines. In quick "quash Enrile"-who is regarded in Washington within 208 succession, beginning Nov . 23, Aquino fired her defense Committee circles as "too independent." In early November, minister Juan Ponce Enrile, and appointed the highly respect­ as Enrile began to openly attack the Aquino government, the ed Gen. Rafael Ileto in his place. The remainder of the cabinet State Departmentbegan issuing statements of 100% backing handed in its resignations in order to give Aquino the ability for Aquino, and presidential spokesman Larry Speakes in­ "to make a freshstart ," as she put it. dicated that Enrile had been informed through private chan­ Three days later, the communist insurgent New People's nels to "cool it." In his last public statement two weeks ago, Army (NPA) agreed to a 6O-dayceasefire , scheduled to begin Enrile attacked U. S. interference into Philippines political on Dec . to-j ust in time to permit all the varied forces on affairs. the leftto mobilize behind passage of the draft Constitution, Other Americans have arrived arrived on the scene as the scheduled for a national referendum in January. stage managers for the crisis. In Manila, Gen. John Singlaub, Lastly, Aquino announced Nov. 28 thatshe had accepted a leader of the World Anti-Communist League who has been the resignation of Natural Resources Minister Ernesto Ma­ caught holding the bags on the illegal Iranian arms deal, along ceda and Public Works and Highways Minister Rogaciano with Ray Cline of the Center for Strategic and International Mercado, members of the coterie surrounding her regarded Studies, were seen meeting with Philippines leaders. by the military as overly sympathetic to the NPA. The 208 Committee policy toward the Philippines is These agreementsappeared to end the crisis that had been dubbed "constructive diseng�gement"-a phrase that con­ precipitatedby Enrile's increasingly bold challenges to Aqui­ jures up images of Vietnam. In the Philippines right now, no over her policy of appeasement-at-all-costs to the NPA. state Manila sources, a situation of dual power already exists. The greatest cost, Enrile and the military pointed out, was The NPA controls a full 20% of the countryside, levying the lives of soldiers of the Philippines Armed Forces, who taxesand carrying out an administration. Now, this NPA has have been deployed without adequate equipment in a sitting come into Manila to preparefor its finalcampaign for power. duck stance toward the insurgents. A full 7,500armed NPA cadre came into the capital city for Tensions between the military under Enrile and the pro­ the funeral Nov. 21 of slain trade union leader Rolando Olal­ NPA human-rights-mafia in control of Malacanang Palace ia. These armed cadre are now deployed throughout the des­ brokeout into the streetsNov . 16, in a round of assassinations perately impoverished barrios of the city.

50 Iriternational EIR December 5, 1986 • as chief of staff, the security of the headquarters was his responsibility, and he had begun reviewing security measures at once. A search of NATO's security files yielded no infor­ mation on Soviet spetsnaz. He began an independent inquiry , and found that infiltration of Westernmili tary objectives via tunnels is coordinated under the 16th directorate of the KGB. Fired general Further probing revealed that the Soviets and other Warsaw Pact military forces have many specialized sabotage units NATO coming under the generic term "spetsnaz." warned of spetsnaz Military intelligence experts have identified a pre-war "first echelon" of spetsnaz, consisting of some 350 groups On Oct. 28, in a brief press release, the Netherlands' Ministry with 8-12 men each, and specialized in some 10 distinct of Defense announced the dismissal of Lt . -Gen. Gerard Ber­ mission-assignment categories. Among these were special · khof of the Dutch Army as chief of staff of Allied Forces tunneling units. Central Europe (AFCENT), stating that "his way offunction­ There are 2.5 million former coal miners of Polish back­ ing" apparently made him incompatible with his commander, ground in the coal mining region in the Netherlands and West General L. Chalupa of the West German Bundeswehr. The Germany. Infiltration of this community by Polish intelli­ move, unprecedented since the 1984 dismissal of former gence and spetsnaz units is well known to Dutch intelligence. NATO deputy commander General Kiesling for suspicion of There is also a very active Polish consulate not far from being a homosexual (a charge of which he was later exoner­ Brunsum, which has a sister city relationship with a city in ated), has led to speculation as to the real motives for General Poland, with many exchange programs. Organized crime Berkhofs dismissal. networks of East Europeans are also known to manage sev­ On Nov. 8, General Berkhof charged that his dismissal eral brothels in the region, frequented by NATO personnel. was because of his fear that the AFCENT Headquarters, in General Berkhof charges that when he began to identify the the city of Brunsum, near the West German border in the possibility of East European spetsnaz units, his commander, Netherlands, was vulnerable to Soviet spetsnaz attack. In an as well as other senior officers, moved for his dismissal. interview in three leading Dutch weeklies, General Berkhof Although the official statement by NATO and SHAPE remarked that he had been in the midst of an investigation of (Supreme HeadquartersAllied Powers Europe) was a simple Soviet plans to sabotage the headquarters through infiltrating "no comment," a Dutch Defense Ministry spokesman admit­ spetsnaz troops into abandoned coal mining tunnels that criss­ ted that the security issue was involved. They claim that they cross underneaththe base, no more than 10 meters below the had told General Berkhof to refrain from public comments. surface. An inspection by the Netherlands Ministry of Mines of the The tunnels, he charged, are accessible from outside the mine entrances only two weeks before his removal revealed base, and only a thin brick wall would block intruders from that they had been recently forced open, a task requiring at reaching right into the center of the NATO facility. AFCENT least 10 hours of work and the penetrationof a concrete wall, headquarters is the command and control center for NATO's and tunneling through 5-6 meters of sand and another con­ Central Front, encompassing all American, British, Dutch, crete wall which serves to plug the entry shaft. Although the Belgian, and German troops on the crucial West German thin break wall that blocks entry into the tunnels underneath front. the headquarters itself was not penetrated, the discovered penetration, no more than three weeks old, was the third such Berkhof backed SDI break-in since the mine was shut in 1975. Although the interview was published throughout the The general's charges on spetsnaz capabilities against Dutch press very little has appeared elsewhere , prompting NATO have been reinforced by a report recently drawn up rumors throughout NATO and West European defense circles by the German. Defense Ministry, reportingthat the Soviets as to the real cause for his ouster. The fact that General have 4,000 spetsnaz troops prepared to conduct sabotage Berkhof is a leading advocate of the Strategic Defense Initia­ operations throughout West Germany. These units, in the tive in Western Europe, a position that made him unpopular event of a Warsaw Pact attack on NATO's Central Front, in certain high political circles in The Hague as well as other would coordinate with so-called Operational Maneuver European capitals. In his interview, the general reass.erted Groups which would target key NATO command and control that maintaining NATO as an effective deterrent depends on centers such as AFCENT in Brunsum. The fact that sabotage SOl development. operations are being conducted now, is reflectedin reports of A review of the general's charges as well as EIR's inde­ attempts to penetrate the secret bunkers containing emergen­ pendent investigation reveals a story which is of utmost con­ cy war materiel along the East German border over the last cern for NATO security and readiness. Berkhof stated that, several months.

EIR December 5, 1986 International 51 New Delhi by Susan Maitra From

AWACS Jitters over from Afghanistan . U.S. Defense Secretary Weinberger's promise to Pakistan Not at all incidental to India's op­ position to the U.S .-Pakistani arms re­ creates new problems in the area. lationship are the economic implica­ tions. For India to match the qualita­ tively more sophisticated military in­ aspar Weinberger's trip to India Afghan aircraft were violating its air put into Pakistan puts a serious addi­ in mid-October had been held up here space. " C tional pressure on India's tight budg­ as a firm indication that the United But for India, this does not miti­ et. Since the Soviet invasion of Af­ States was at last willing to understand gate the perceived danger. Pakistan ghanistan in 1979, Pakistan has re­ India's threat perceptions. But the joy ha:; invaded India three times since ceived more than $1.5 billion in U.S. was short-lived. Two days after his 1947, each time across India's west­ arms, including 40 M- 16 figher­ departure , the American Defense Sec­ em borders , and each time using U.S.­ bombers . The new U. S. arms package retary announced in Isl amabad that supplied arms. for the next six years, earlier estimated Pakistan requires air defense and he Indian defense officials point out at $ 1.7 billion, may actually rise to as would "get this defense capability in that the highly mountainous terrain on much as $3 billion of a total assistance the hands of Pakistan as quickly as the Afghanistan border casts exten­ program of $4.02 billion. possible. " sive "radar shadows," but with The AWACS controversy once Weinberger's statement and sub­ " AWACS, the Pakistan Air Force will again finds the United States in the sequent moves in Washington to make be handed the capability to destroy role of the devil. Given the alliance good on his promise have set off an squadrons of the Indian Air Force in a between Pakistan and China, Indians unusually angry response in India. K. sneak attack. The 1982 Israeli inva­ are convinced that the United States is Nawar Singh, minister of state for ex­ sion of Lebanon is cited in this con­ deliberately pressuring India. It is ternal affairs, told the Indian parlia­ nection. Backed by the AWACS widely believed here that the AWACS ment that if the United States makes (Hawkeyes), the Israelis destroyed 80 is part of a larger U.S. plan to involve AWACS available to Pakistan , Indo­ Syrian planes while losing only one Of Pakistan in the central defense com­ U.S. relations will receive a major set­ their own. mand in the Persian Gulf. back. When U.S. Air Force Secretary As the defense experts here point Two related revelations have in­ Robert Aldridge came to Delhi to do out, AWACS' awesome capability for creased the jitters in New Delhi. First, business as a follow-up to Weinber­ radar scan of air-space below, around, the Washington Post quoted secret ger, the same message was bluntly and above it, up to distances of nearly U . S. intelligence documents that Pak­ conveyed. 700km , will lay bare to the Pakistanis istan has already successfully ob­ An Indian defense delegation a large number of air and naval bases tained the triggering device and is now headed by Minister of State for De­ located within hundreds of kilometers only "two screwdriver turns" away fense Arun Singh returned from Mos­ inside India. And, if the AWACS is from having a nuclear bomb-right cow in early November to announce . allowed to cruise close to the border, afterPresident Reagan gave an official that the Kremlin was prepared to sat­ as one report put it, it will "rip the veil" clean bill of health to Pakistan on the isfy India's technological requirement of operational secrecy off three-fourths bomb-building question-and right in answering a Pakistani AWACS ca­ of the Indian Air Force's main opera­ afterthe defense secretary's departure pability. The MiG-31 is an obvious tional command-westernand south­ from Delhi. option-this latest model interceptor western. Second, the U.S. State Depart­ flies at 60 ,000-80,000 km per hour, Since the AWACS acts also as a ment has confirmed that the United has a radar with a 100 km range , and "force multiplier," it tends to raise the States has been clandestinely operat­ has missiles that can befired at unseen military ante in the region qualitative­ ing the highly sophisticated P-3 Orion targets 70 km away. ly-while everyone knows that, F- 16 biplanes from Pakistan under a secret The excuse for the AWACS offer, and AWACS notwithstanding, the agreement between the countries­ of course, is the Soviet occupation of Pakistanis will have to head for the sea shades of the famous U -2 incident that Afghanistan. Pakistan has been com­ or call in the Americans should the led to America's unceremonious de­ plaining for some time that Soviet and Soviets make a concerted drive south parture from Pakistan in 1959.

52 International EIR December 5, 1986 N orthem Flank by William Jones

Stockholm police chief under fire tion over not having cracked the case. Swedish parliamentarians have started to demand answers from EIR documented in the Cited Special Rep ort that the police investigation Hans Holmer on the Palme murder investigation . . under Holmer, a political appointee of the Social Democratic government, was, at certain points, being used for harassment against the European La­ he heat is starting to build up Bohman, still a member of the Swed­ bor Party, the political organization in aroundT the no-results investigation of ish parliament and holding a post on Sweden associated with U.S. presi­ the murder of Prime Minister Olof the National Police Board , in an inter­ dential candidate Lyndon LaRouche. Palme conducted for six months by an view on Nov. 13 in the Swedish eve­ Moscow has targeted LaRouche for investigative team led by Stockholm ning paperExpr essen, complained that elimination, as the intellectual a4thor Police Chief Hans Holmer. The con­ even he was totally in the dark about of the sm. Leaks from the Holmer tradictory stories being leaked by the the workings of the Holmer investi­ group were being fed into the Soviet­ police to the mass media, the now­ gation. Expressing his amazement that sponsored lying charges that the Eu­ famous Holmer double-talk at his ever the police had allowed a known crim­ ropean Labor Party was behind the moreinfrequent press conferences, and inal to escape from internment, when Palme murder. the blithe assurances, repeated regu­ the criminal said that he would, if re­ The direct collaboration of the larly for months, that the police were leased, help the police findthe murder Holmer group with media figures on the track of the killer, have created weapon thatkilled Palme, Bohman laid pushing this Soviet line raises the growing skepticism among the gen­ responsibility for this blunder at. the question as to whether or not there are eral public and political leaders in doorstep of Mr. Holmer. more sinister reasons than mere in­ Sweden. Voices are being raised de­ Bohman also expressed bewilder­ competence for the absolute fiasco of manding a full report from Holmer on ment over the divergent and contra­ the Holmer inquiry . what he actually has accomplished. dictory stories which had been given Several months ago, a special ju­ The turning point for Holmer came by the police at regular intervals about dicial commission was established to in October when EIR circulated to top their findings. Bohman commented determine what the police had dOIi.e to political and security personnel in that it seems as if "the police have a solve the murder, including possible Sweden and abroad, the English-lan­ need to leak out a lot of ambiguous blunders made by the police. The guage Sp ecial Report, "A Classical statements in order to soothe their comrnissionwas set up at a time when KGB Disinformation Operation." The consciences. Or to humor the press." demands were being made that Hol­ report exhaustively documents the Karin Ahrland, the head ofthe Ju­ mer step down from the investigation. motives and means of possible KGB diciary Subcommittee of the Swedish Holmer did not resign, and the new involvement in the Palme murder of Parliament, voiced surprise that Hol­ commission under Per-Olof Nilsson last Feb. 28. One month after EIR's mer had given a long interview to does not seem to have shed any light report came out, Holmer broke his self­ Newsweek, although he had refused to on anything. imposed silence by attacking the give any interviews to the Swedish Setting up a parliamentary com­ "happy amateurs" who were trying to press during recent weeks. Ahrland mission to investigate the whole spec­ get involved in police work, "where added that Holmer was becoming "hy­ trumof events surroundingthe murder only professionals count." Holmer persensitive" to criticism, and that he of Olof Palme is the next logical step­ criticized those "bureaucrats and seemed "a tired and disappointed per­ which will probably not be long in thirikers" who were commenting on son who is lashing out at an enemy coming. Such a commission1 how­ how the investigation should be han­ which he doesn't have." Another Lib­ ever, will only be successfulif it takes dled. eral Party member on the Judiciary up the question presented in the EIR Holmer's irritation at the "happy Subcommittee, Hans Petersson, de­ Sp ecial Report, and mooted in Parlia­ amateurs" caused quite a stir among manded that Holmer inform the public ment Some weeks ago by Moderate politicians in Sweden concerned with concerningthe investigation. Nic Gronwall: What was the role of gettingto the bottom ofthe Palme case. Holmer's reactions are undoubt­ the Soviet KGB in the Palme assassi­ Former Moderate Party leader Gosta edly motivated by more than frustra- nation?

ElK December 5, 1986 International 5- Dateline Mexico by Josefina Menendez

John Gavin, one of the 'bad guys'? turned the case over to the president Did the American ambassador to Mexico protect drug of the Sonora superior court, Valder­ rain Otero, who also happened to have traffickers, or just violate Mexico 's sovereignty? been a high-level official in the Bie­ brich governorship! Valderrafn used his power, in tum, to replace Judge Cuevas Macias, who had not yielded to the pressures to free Ford. However, the new judge was equally resistant to twisting the law in ecent revelations appearing in the Ford was the niece of former President favor of the woman, and he too was RMexican press have given us a closer Gerald Ford, and her parents, impor­ replaced. Finally, the right judge was glimpse of the dark sideof former U.S. tant businessmen from southern Cali­ found. One Sergio Hernandez wasted Ambassador to Mexico John Gavin, fornia, are the owners of the San Die­ no time in findingthe charges against currently an executive of the Atlantic go Padres baseball team. Ford's par­ Ford "insubstantial," and ordered her Richfield company in Los Angeles, ents apparently contacted Ambassa­ release. She was immediately trans­ California. dor Gavin, the U.S. consul in Her­ ferred to the Mexico-U . S. border and EIR has documented in previous mosillo (capital of Sonora), and the set free on U.S. territory. Ford has not issues how Gavin dragged the United governor of Baja California Norte, to to this day returnedto Mexico, despite States into one of its worst diplomatic solicit intervention on their daughter's judicial appeal entered against Her­ fiascos by trying to resurrect the Na­ behalf. nandez's decision. tional Action Party (PAN) as a politi­ Gavin managed to get a new de­ The incident stirred all of Sonora, cal weapon against the Mexican polit­ fe nse lawyer for Ford, in the personof and exposed former Ambassador ical system. We also noted at the time Sonora lawyer Rogelio Rend6n, a Gavin not only for unacceptable vio­ that the leaders of the PAN in the state partner and political ally of former lation of Mexico's national sovereign­ of Sonora-where Gavin's mother Sonora governor Carlos Armando ty, but for hisominous association with lives'--were associated with or fi­ Biebrich. Biebrich, closely associated corrupt, treasonous, even criminal nanced by bosses of the drug trade in with the current interior minister, elements within Mexico. the Mexican northwest. It is notewor­ Manuel Bartlett Diaz, and with his In fact, Biebrich is known as a thy that Gavin never once made ref­ deputy minister, Fernando Elias partner of thejailed former police chief erence to these drug-trafficking bar­ Calles, was forced to resign his gub­ of Mexico City, Arturo "EI Negro" ons, but on the contrary, pointed to ernatorialpost in November19 76, the Durazo Moreno, and of Francisco Sa­ various government officials as in­ result of widespread protest over the hagun Baca, currently a fugitive from volved with drugs-taking great care, assassination of several farmers in the justice for having been a conduit for of course, never to mention officials area. the drug trade . A brother of Biebrich, with whom he was associated, despite Rend6n's fame does not stem from Jose, was publicly accused of smug­ clear indications of their corruption. his law practice, but rather from his gling drugs while Biebrich was gov­ A small piece of Gavin's dirty "talent" in winning political and judi­ ernorof Sonora. laundry was aired by journalistCarlos cial favors by organizing parties with B iebrich' s power derives from the Moncada in three consecutive editions top call girls and plenty of quality protection he receives from Interior of the Sonora-based daily Diario del "snow. " Minister Bartlett, who is praised and Yaqui, Nov. 3-5. Moncada revealsthat According to Moncada, there ex­ promoted in Washington and on Wall then-Ambassador Gavin personally ists a tapedtelephone conversation in Streetas the next President of Mexico. intervened with the Sonora judiciary which Rend6n happensto mention to Journalist Carlos Moncada had to clear U.S. citizen Mary Katheryn the judge hearing the Ford case, Luis barely finished his article on "Dirty Ford of chargesof murderingher hus­ Cuevas Macias, that the governorof Gavin" when his columns were ab­ band, Cruz Davison, in 1985. Ford Baja California Norte, Leyva Mor­ ruptly interrupted, and he was trans­ was being held in a jail in the border tera, spoke with Sonora governorRo­ ferred outside the country to prevent city of Nogales at the time. dolfo Felix Valdez to express his anyfurther exposes on the thornysub­ As it turned out, Mary Katheryn "concern"over the case. Felix Valdez ject.

54 International EIR December 5, 1986 Andean Report by Val erie Rush

'Betting on Peru' in the year 2000 of Peru. The "Belaunde" ofthat period Alan Garcia calls on Peru's capitalists to throw in their lot with (Fernando Belaunde was Garcia's predecessor) had responded to the in­ his "historic project. " vasion by grabbing the national trea­ sury and abandoning the country to an enemy occupying force. Garcia's city-building plan ac­ ith a genuine economic recov­ ward spiral of the Peruvian economy companies his now famous rapid­ Wery in progress to show for his refusal and reinitiating growth. By raising transit project for Lima, and large­ to buckle under to the International wages, holding down prices on basic scale irrigation and electrification Monetary Fund, Peruvian President products, halting the unending series works for the neglected regions of the Garcia is now fully embarked on the of devaluations and putting a 10% country. next phase of his "historic project" for ceiling on percentage of export in­ Garcia also told the CADE busi­ iQe year 2000. The clean electoral come dedicated to debt repayment, he nessmen that plentiful, low-interest sweep that Garcia won in the Nov. 9 restored stability and gave an initial credit and generous tax incentives municipal elections gave him the stimulus to consumer demand that got would be made available to those mandate to do just that. production going again. But, as he has committed to investing productively . Garcia explained his objective in repeatedly warned, a more fundamen­ in the economy. The central bank has an address to Peru's Annual Confer­ tal restructuring of the Peruvian econ­ already announced that $200 million ence of Business Executives (CADE) omy based on industrialization and would be freed up for industries run Nov. 19. The speech was interrupted modernization of agriculture is the down by decadesof disinvestment, and 10 times by applause. "I see the result critical next step. agreements for $100 million worth of of these elections as a message, as a Thus, he informed the business­ new investment in agro-industry, tex­ claim by traditional forces that are men that bold new investments in in­ tiles, and other industrial sectors are seeking unity: the poor, the middle dustry and in city-building projects in the making. class, the industrial bourgeoisie .... were now on the agenda. One day lat­ In his one-and-a-half-hour ad­ All of these forces can be integrated er, he put his words into action, ad­ dress, Garcia gave the CADE assem­ under one project ....We will build dressing the population of the small . bly an economics lesson which our capital, we will produce, we will northern city of Piura on his plan to knocked into a cocked hat all the or­ make wealth accessible to all, we will tum a dozen small cities like theirs thodox bankers' recipes for "econom­ grow." into intermediate industrial centers. He ic growth" International Monetary President Garcia repeatedly em­ pledged that these long-neglected areas Fund-style. He challenged those the­ phasized the need to think about the would receivethe water, electrical, and orists who insist that "any deficit is future: "The only way to get to the other infrastructurerequired for that. bad," explaining, "Clearly a deficit is year 2000," he said, "is by uniting During his Piura visit, Garcia bad when it goes to pay the foreign wills." elaborated his program to the year debt. . . . But the deficit should be The 700 Peruvian capitalists at­ 2000, a program which defines a na­ welcomed when there is capacity to tending the CADE meeting were re­ tionalist posture toward the foreign create work or when it serves to in­ minded of Garcia's appeal last July for debt as priority numero uno. City­ crease demand." . productive investment of their capital . building, a competent educational He warned those with less than pa­ At the time, the President had told the system, and drawing population away triotic thoughts, "I will not shock the nation's industrialists that "you are not from the over-crowded and poverty­ countryone of these mornings bysay­ speculators. An industrialist is some­ stricken city of Lima, were also key ing that I have devalued our currency one who takes risks for himself· and aspectsof his project for the year2000. 30%. I trust in Peru, I trust in you. I for Peru." Now, Garcia was able to The President suggested that the pro­ trust you will not go runningto Ocona tell the businessmen, "Thank you for gram could take the name of Marshal Street [money-changing center] or to betting with me ....Let 's enjoy the Avelino Caceres, the Peruvian hero the bank to buy dollars. Why? Not lUXUry of being rebels." during the 1879 War of the Pacific only because I trust you, but because Garcia's first year in office was who personally organized a militia to I am warning you, you'll lose if you dedicated to reversing the rapid down- drive the invading Chilean army out do!"

EIR December 5, 1986 International 55 International Intelligence

a 25,OOO-run poster with photographs of Norway commander Gorbachov and Stalin, entitled, "No to the Lubbers, Ryzhkov Empire of Evil." A copy of the poster was attacks decoupling displayed at the Washington forum. fail to reach accord MUlier outlined how party leaders in Press spokesman for Norwegian Command­ West Germany, not only in the Green Party Dutch Prime Minister Lubbers, visiting er-in-Chief Gen. Fredrik Bull-Hansen, and the Social Democrats, but also the Moscow, failed to come to a formal accord Colonel Gj eseth, has stated that the pro­ Christian Democratic Union, arealready ac­ on disarmament issues with his Soviet coun­ posed withdrawal of American troops from commodating themselves to the decoupling terpart, Nikolai Ryzhkov. despite the fact the Central European theater would mean of the alliance by peddling the prospect of a that Lubbers is a staunch opponent of the that in an emergency situation, the threat to "reunified, neutral Germany" if the United American Strategic Defense Initiative. NATO 'S Northern Flank would be signifi­ States withdraws its military support from In his Nov. 20 speech for the visiting cantly greater than it is today. the country. Lubbers, Ryzhkov warned the Europeans According to Norwegian NATO ar­ "With 350 million of the world's most against associating themselves with the SOl: rangements, there are no foreign troops sta­ educated, skilled people and with the com­ "If the U.S.A., racing for military su­ tioned on Norwegian soil during peacetime. bined greatest industrial capacity in the premacy, chooses the SOl program, then The defense of NATO's Northern Flank is world, Western Europe pales a region like Europe cannot imagine what irreversible therefore totally dependent on the ability to Iran in significance, yet the attention in the consequencesthis will lead to!" He said there rapidly transfer NATO forces from other United States is fixated on events in Iran was no reason for West Europeans to feel parts of Europe or the United States. If there while decouplers at the U. S. State Depart­ "defenseless" without American nuclear were an increased demand for such forces ment and in Congress, as exemplified by weapons. They only had to stop viewing elsewhere in Europe, which such a reduc­ Sen. Sam Nunn (D-Ga. ) are preparing to sell Soviet proposals for "substantial, balanced tion of U.S. troop presence would imply, Europe out to the Soviets," she said. "This reductions of armaments and conventional this would mean a greater problem in allot­ we are dedicated to preventing from hap­ armed forces" as "diplomatic traps and rus­ ting the necessary forces to the Northern pening." es." theater. The Dutch prime minister, in his reply, Therefore Norway, stressed Colonel endorsed the "zero option"for medium-range Gj eseth, is very keen on maintaining the Russianspu blish missiles in Europe, but objected to the So­ viet linkage between the "zero option" and present level of American. forces in Central 'Star Wa rs ' book Europe. agreements on SDI. As a result, there was Colonel Gjeseth also stressed that any no formal agreement on disarmament is­ A new book called Space Weapons: The discussions concerning a reunificationof the sues. Security Dilemma. edited by Academicians two Germanys, and a corresponding shift in Yeo P. Velikhov, R.Z. Sagdeev, and A. A. the position of West Germany vis-a-vis Kokoshin, was advertised in Pravda on Nov. NATO, would be viewed in Norway as a Parpartaddr esses 22. The book does not claim that the Stra­ cause of great concern. tegic Defense Initiative is impossible, but Japanese space meeting rather concentrates on "proving" that a com­ Patriotsf or Germany prehensive anti-missile system with space­ Uwe Henke v. Parpart, Fusion Energy based elements will never be purely defen­ Foundation director of research and a Con­ go to Wa shington sive. tributing Editor of EJR . spoke at the opening Laser. particle beam, kinetic, and elec­ ceremonies at the Tokai Space Research Patriots for Germany candidate Renate tromagnetic pulse (EMP) weapons can be Center in Kumamoto, Kyushu, Japan on MUller addressed a forum attended by 16 used for a first strike against objects on earth. Nov. 21. policy-makers in Washington, D.C. Nov. the authors say. They repeat the "warning" The research center has the capability to 25, outlining the importance of the West that SOl will step up the arms race of iCBMs monitor all satellites that fly over Japan German elections in two months for the fu- . and "dummy missiles." within a 3,OOO-mile radius, and other re­ ture of the Western Alliance. MUller said The book also claims SOl is a violation mote sensing capabilities. The initial pur­ that the Patriots for Germany, who will be of the 1972 ABM Treaty; the Soviet Union, pose of the center is to put together a global running in every district in West Germany's in retaliation, might stop observing the SALT environmental picture from Landsat satel­ Jan. 25 national elections, are making the II treaty and Article 12 of the ABM treaty, lites andJapan' s own MOD- l satellite, which fight against decoupling of the alliance the which forbids maskirovka (satellite jam­ will be launched in January. key theme in their campaign. ming). making verificationof treaty observ­ Parpart addressed the necessity for just The PfG will kick off its campaign with ance impossible. such a global overview, given the cata-

56 International EIR December 5, 1986 Briefly

• AUSTRIA will probably soon have a grand coalition governmentof its largest parties. In general elec­ tions held Nov. 25, the Austrian So­ cialist Party emerged with 43. 36% of the vote. According to unnamed So­ strophic results to the global climate of the nevertheless be applied in a broad range of cialist sources, the party will proba­ deforestation of the Amazon and the Suma­ cases. The subcommittee characterized bly form the next government in co­ tra-Borneorain forests. AIDS as "one of the greatest medical and alition with the conservative People's The ceremonies were attended by high­ health threats in modem times." Party, which won 41.6%. Just such a ranking representatives of the ASEAN grand coalition government ruled countries and South Korea, as well as NASA Austria for over a dozen years after representatives and the Ministers of Educa­ World War II. tion, Science and Technology , and Space East German hails from Japan. Eureka project • MEXICAN NAZIS, stone­ throwing members of the National Action Party (PAN), rioted against The director of an East German intelligence Three Jamaican police police in Ciudad Juarez on Nov. 20, think tank has told the European Parliament in the most serious political violence killedby dope runners in Strausbourg that the French-sponsored in Mexico in recent years. The inci­ Eureka project in directed energy devices dent began when 3,000 banner-wav­ Jamaican dope traffickers raided a police should assume the form of a cooperative ing PANistas clashed with school- . station and killed three policemen on Nov. East-West project. children involved in a Revolution Day 19. "This is an open declaration of war on In an unusual address to the European Parade. When the march reached the police," National Security Minister Er­ Parliament, Dr. Max Schmidt, director of downtown, the police confronted rol Anderson said. the East German Institute for International PAN rioters and were hit by stones, A group of men with high-powered ritles Politics and Economics, proposed the EC replying with tear gas. Twenty-four sneaked into a police station early Nov. 19, view the Eureka program as "a significant policemen were injured, three seri­ hurled firebombs. and began shooting at of­ possibility for technological give-and-take ously. ficers, killing three . A fourth policeman es­ between East and West." caped. On Nov. 13, the same day Schmidt ad­ • VOLKER RUEHE, arms con­ The police suspect that this unprece­ dressed the Parliament, representatives of trol spokesman for West Germany's dentedly bold action by the dope traffickers the East German government met in Brus­ ruling Christian Democrats (CDU), may be linked to a recent police crackdown sels with EC officialsto discuss closer ties. has called off his Nov. 23 visit to on the traffic. During the course of the Moscow. His official reason was that crackdown, more than 12,000 pounds of the Soviets had left him uncertain marijuana were seized. Soviet economist about whom he would meet while there, but he is also acting under pres­ visits Argentina sure from Chancellor Helmut Kohl. Norway movesfor AIDS The invitation had been extended by testing, quarantine Soviet economist Victor Volsky visited Ar­ the Soviets immediately after the gentina on Nov. 21, in his capacity as chief Reykjavik summit. The Norwegian parliament has moved to of the Latin American Institute of the Soviet AIDS tests mandatory during all medical Academy of Sciences. He pleased the Ar­ • 6% OF MEXICAN BLOOD examinations. On Nov. 25, the Subcommit­ gentines by assuring them that the Soviets plasma is contaminated with AIDS, tee on Social Affairs presented a proposal to would not seek permission from Britain to a top Mexican health ministryofficia l the Minister of Social Affairs, Tove Strand fish in the waters Argentina claims around declared Nov. 26. Samples of blood Gerhardsen, for mandatory AIDS tests for the Malvinas. stored by private distributors and all people receiving medical check-ups at Volsky said the Soviet interest in Argen­ hospitals were tested. Meanwhile, the hospitals or other medical institutions, and tine waters is not just fish,but "the detection president of the National Chamberof all people in prison. The Minister of Social of mineral , oil, gas, and ferromanganese Private Hospitals and Clinics, Jesus Affairs is considering obligatory testing for deposits," as well as the harvesting of krill. Gomez Medina, said in a press con­ military personnel and pregnant women. "We could collaborate scientifically and help ference the same day that the Mexi­ The subcommittee expressed fulf sup­ Argentina dominate its natural resources." can governmentis lying on the num­ port for theminister 's proposal forquaran­ The United States and Britain, he ber of known AIDS cases, which tining people with the HIV virus or with charged, would "do everything possible" to stands at more than 1,500, not the AIDS. Although the proposal was formulat­ control the straits of Magellan, the best nat­ fe wer than 400 claimed by the gov­ ed to deal with cases of prostitutes who re­ ural passage between the Atlantic and the ernment. fuse to discontinue their activities, it can Pacific.

EIR December 5, 1986 International 57 �TIillNational

Reagan, M eese have begun the counter-Wa tergate

by Criton Zoakos

During his historic press conference, Nov. 25, AttorneyGen­ so far. What shocked the Establishment, was the fact that eral Edwin Meese, and President Reagan, on whose behalf Meese walked to the podium of the White House conference Meese spoke, launched a campaign which, within a few room and did what most people till then considered "unthink­ hours, appeared to be the exact reverse of Watergate. It will able" for Reagan and his fri ends to do: He pointed the finger succeed, so long as the President and Meese insist on their at the core of illicit Israeli intelligence activities in the United present, uncompromising policy of "full disclosure." States, and destroyed, on the spot, the cause of the Nicara­ Contrary to Watergate , the inquiry is launched by the guan Contras. President and his Attorney General, not against them, as the Following that press conference, the Attorney General case had been with Richard Nixon. issued further instructions setting the direction of the Justice Contrary to Watergate, when National Security Adviser Department's investigations. The key element of Meese's Henry Kissinger and White House Chief of Staff Al Haig instructions is the order that "every dollar will be traced," stayed in their posts throughout the crisis, until they black­ from the Iranian arms transactions. As a result, the investi­ mailed their chief into resigning, now, John Poindexter is out gation is now directed against a maze of semi-formal groups and Chief of Staff Donald Regan has been stripped of all and institutions in government known to the bureaucracy as power andfu nction-his remaining in office(as of this writ­ the "Kissinger NSC structures." Two large groupings are ing) only serving to cause him personal ridicule. now the immediate target of the investigation. First, the ex­ Contrary to Watergate, President Reagan and Meese, tensive Nicaraguan Contra support apparatus, involving such each day that passes, are keeping Congress and the press off persons and General Singlaub, General Secord, Andy Mess­ balance, as they direct their inquiry into the wrongdoings of ing, and others in the so-called National Defense Council persons and cliques which have, hitherto, enjoyed the pro­ Foundation. Second, the network shipping weapons to Iran, tection and sympathy of the liberals in both Congress and the not just recently, but years before Reagan had signed any press. authorization. The following joke, circulating in the corridors, charac­ Among the persons targeted by the Meese investigation, terized the situation: "Q: Did you hear, John Conyers is are Undersecretaries Armacost, Armitage, Elliott Abrams, organizing impeachment proceedings? A: Against President CIA Deputy Director Claire George, NSC staffers Howard Reagan? Q: No. Against Ayatollah Khomeini, for supplying Teicher, Geoffrey Kemp et al., and a special category of the Contras-hefigur es, the liberals put Khomeini in power, influence-peddlers such as Michael Ledeen. These persons theliberals can take him down." share in common something. Some of them are members of a group called 'The 208 Committee." Others belong or have Dismantling Kissinger's 'NSC structures' belonged to special inter-agency or supra-agency units, es­ Contrary to popular perceptions, neither the resignation tablished at various times on an ad hoc basis for pursuit of of Admiral Poindexter, nor the dismissal of Lt.-Col. Oliver specific, delimited policies, under NSC authorization. This North,are theimportant elements of the Meese investigation, maze of special units and ad hoc committees which had

58 National EIR December 5, 1986 pervaded Washington since the early 1970s, was created by The Senate Intelligence Committee, in announcing its Henry Kissinger and is known as the "Kissinger NSC struc­ intention to continue its hearings into the CIA's role in this ture ." Under this arrangement, and through an entity once matter, essentially strengthens the weight of the Meese in­ called by Kissinger the Special Coordinating Committee, a vestigation. great number of illegal operations have been conducted over Finally, Meese and President Reagan are bound to con­ recent years. Under the "Kissinger NSC structure," any of­ tinue keeping both Congress and the liberal press off balance ficer seconded to these "special units" from, say, the Penta­ by means of the appointment of the Special Review Board to gon, CIA, State Department, Treasury, etc., was no longer examine the "methods and procedures" of the National Se­ answerable to his or her original agency. Any oversight or curity Council. Its three members, John Tower, Edmund jurisdiction over their actions was made impossible, and all Muskie, and Brent Scowcroft, have beenappointed to come sorts of rogueoperations were made possible. up with a proposal to revamp the NSC by destroying its The arms shipments to Iran and the illicit Contra funding "operational" features, and restoring its policy advisory func­ were but two examples. The notorious Terpil and Wilson tion. The appointments were inspired by sublime irony. Libya affair (involving General Secord of Nicaraguan Contra Scowcroft, Henry Kissinger's creature and the first toreceive fame), is another; projects such as the toppling of the Shah from Kissinger's hand the safekeeping of the "NSC struc­ of Iran, and of President Marcos of the Philippines are similar ture," has been invited to slaughter his own child; Muskie, examples; the financingof the terror networks of Ahmed Ben the Carter Secretary of State who signed the secret agree­ Bella and Fran�ois Genoud, the assassination of ex-U.S. ments of January 1981 with Iran, on which arms sales to Iran Ambassador to Greece Henry Tasca, and the assassination of are based, has been invited to investigate the wrongdoings of CIA station chief in Athens Richard Welsh, are other such his own policy. John Tower is on the board for the purpose examples of the activities of this Kissingerian NSC structure. of keeping the other two honest. With Meese's investigation as it stands now, the so-called For fear of what Reagan might do otherwise, the liberal "structure, " to carry out such nasty operations is being wiped friends of Muskie in Congress, and the Trilateral Commis­ out. If the going gets rough down the road, and someone gets sion friends of Scowcroft, do not yet wish to trade a Special the clever idea of trying to stop this clean-up, even more Prosecutor whom they do not know, for a Special Review interesting things may happen-such as, for example, ac­ Board that they do know. tual, full-scale, public investigations into these past, nasty As a result, Meese's Department of Justice investigation, jobs of the "Kissingerian NSC structure." maintains the initiative, for the time being. If the Attorney It has been well known among senior Western intelli­ General perseveres in his present, winning, "full disclosure" gence officialsthat the emergence of this "Kissingerian NSC policy, he will inevitably order the investigation of some of structure," from 1970-7 1, had been associated with the dra­ his subordinates within the Justice Department, for a certain matic increase of the Israeli Mossad's influence over the wrongdoing during the time before he had moved to the United States NSC's personnel selection. What foreign cap­ department. Specifically, during 1983, Assistant Director of itals are concluding now is that, as a result of Meese's coun­ the Criminal Investigative Division Oliver B. Revell signed teroffensive, the Israelis are rapidly losing gains which they a classified declaration which argued at the U.S. District had accumulated in Washington over a 15-year period. Court of the Northern District of Georgia, that the activities of one Cyrus Hashemi, a prominent Iranian arms merchant, What comes next shipping weapons to Iran, be kept secret by asserting "state There is a mad scramble in Washington to take the initia­ secrets privilege." For the Attorney General's information,

tive of the investigation away from Reagan and Meese. John the case is Hashemi v. Campaigner Publications et al .• filed Conyers and his House Judiciary Subcommittee have for­ at the U.S. District Court for the Northern District of Georgia mally requested the establishment of an independent Special as Civil Action No. 80-1555A. Meese's predecessor, Wil­ Prosecutor, to investigate the following members of the liam French Smith, apparently was given a similar text to administration: Meese himself, Vice President George Bush, sign, providing "state secret" protection to Hashemi's arms CIA chief William Casey, White House Chief of Staff Don­ shipment to Iran-but did not sign. ald Regan, Defense Secretary Caspar Weinberger, and As­ At the present time, the Reagan-Meese "fulldiscl osure" sistant Secretary of State Elliott Abrams. At this stage, the policy cannot be defeated, because Reagan cannot be proven Conyers effort will not go veryfar. It has generally been seen guilty of any wrongdoing, unless the policies of Jimmy Carter as a very biased effort to: a) cover up for one of the real and Edmund Muskie toward Iran, in the 1979-81 period, are culprits, Secretary of State George Shultz, whom Conyers proven wrong or treasonous. For John Conyers to find Pres­ does not name, and b) to direct fire against Weinberger, who ident Reagan guilty , Conyers and the whole liberal and Tri­ is the one official who is shown on the record as rejecting the lateral cabal in Congress (and this includes Claiborne Pell), proposals for arms shipments to Iran. must first go to jail.

EIR December 5, 1986 National 59 Book Review

New CIA historyputs intelligence policy under the microscope by Jeffrey Steinberg

Kissinger asserted the dominance of the National Security The Agency-The Rise and Decline of the Council and its expanded staff over the Director of Central Intelligence and the CIA in all intelligence matters. This CIA From Wild Bill Donovan to William Casey administrative coup d'etat introduced a strong and at times John Ranelagh devastating element of White House politics and prejudices Simon & Schuster, New York, 1986 into the intelligence process, and often led to the CIA being 847 pages, illustrated, $22.95. excluded from any input into Kissinger-Nixon policy initia­ tives. With the creation of the Kissinger-Haig "plumbers unit," the precedent was set for later NSC involvement in covertoperations that were formerly handled by more trained The firstless on in trade craftthat any spook-apprentice learns and experienced CIA personnel, closer to intelligence anal­ is that the key to any good cover story is that it be based on a ysis and more distant from the Oval Office. solid, provable foundation of facts. It is precisely in this The Carter and more recently exposed Reagan NSC dab­ regard that John Ranelagh's (pronounced RAN-a-Iee) quasi­ bling in covert operations, particularly in the cases of Iran official history of the Central Intelligence Agency is a well and Nicaragua, are the unfortunate offspring of this Nixon­ written and well documented cover story. The book's merits Kissinger administrative shift. As Ranelagh reports: do not lie in its frank "insider's" documentation of the strug­ gles to create a postwar central intelligence and clandestine Very early in the Nixon administration it became operations service. In fairnessto the author, any attempt at a clear that the President wanted Henry Kissinger to run comprehensive history of the CIA's first 40 years would intelligence for him and that the NSC staff in the White require thousands of pages and would necessarily resemble House, under Kissinger, would control the intelligence an encyclopedia, rather than a very readable 8oo-page nar­ community. This was the beginning of a shiftof power rative. away from the CIA to a new center: the growing NSC Where Ranelagh 's objectives come through, is in the final staff. It was both a personal shift of power by the several hundred pages of the book, where he draws out sev­ President in his own interests and an institutitonal shift eral important policy insights that are central to the ongoing as well. From this point ...the agency began to lose efforts to rebuild aU. S. intelligence capability, following influenceto the NSC staff under the President's special the disasters of the mid-1970s Church Committee and the assistant for national security affairs, who in tum has Schlesinger-Turnerpur ges. paralleled and at times challenged the director of Cen­ First, as Ranelagh recounts, before there was Church­ tral Intelligence as the President's chief intelligence Turner, there was Kissinger. From the day that he entered officer. The technique Kissinger employed was never the Nixon administrationas national security adviser, Henry to say directly what he or the President wanted but

60 National EIR December 5, 1986 instead to ask for analysis generally, taking out of it described the working practice: "Dominated by the what was of particular interest to him. . . . This was Committee chairmen, members would ask few ques­ matched by procedural and administrative changes that tions which dealt with internalagency matters or with enhanced the position of the White House-and Kis­ specific operations. The most sensitive discussions singer-in intelligence matters . were reserved for one-on-one sessions between Dulles and individual Committee chairmen." In December 1968, during the transition period before Nixon's inauguration, Kissinger informed then-DeI Richard Helms that he was no longer to participate in the full meetings Congressional oversight of the National Security Council. Previously, the DCI had By the mid-1970s, the Watergate affair and the Seymour given the intelligence overview briefing leading off every Hersh New York Times "exposes" dramatically altered the NSC meeting and had been an active participant in that policycl imate in Washington, leading to the 1974 passage of body, which maintained responsibility for intelligence and the Hughes-Ryan Amendment mandating congressional ap­ covert operations requirements for the President. While proval for all CIA covert operations. Ranelagh characterizes Helms, with the assistance of Defense Secretary Melvin the shift and the new problems bornof the greater oversight: Laird, managed to reverse this Kissinger dictate, it never­ Secret operations were not prohibited. Congress theless was the beginning of the CIA's great slide into near . simply wanted to know about them. This was almost ruin. a contradiction in terms: if Congress knew about op­ While Ranelagh never quite comes out openlyto propose erations, they were very unlikely to stay secret. Con­ downgrading the NSC as a necessary step toward rebuilding gress was, in fact, taking up a spurious position. In an independent, professional, and non-politically colored partthis was in reaction to the Nixon-Kissinger tech­ American intelligence service, responsible for providing the nique of "back channeling," and not informing the President with comprehensive intelligence on which to base officials and negotiators about the details of poli­ policy, the author certainly leads the horse to water, and, cy. . . . It was also, paradoxically, a reaction against in so doing, draws out the most important lesson of the the idea of secrecy and of a secret agency outside of book. Congressional oversight-something that Congress The second issue of intelligence policy that Ranelagh itself had been anxious to create during the previous addresses is the question of congressional oversight and the 27 years but now decided should be brought under far need to strike a balance between congressional authority and stricter control. congressional responsibility to protect U. S. national secu­ rity-even when a particular policy or operation may be a While avoiding any formal proposal for dealing with a subject of heated partisan controversy. Here, again, the leaking Congress intent on maintaining oversight, author author uses the method of narrative history and interviews Ranelagh's detailing of the twists and turns of CIA dealings with the leading players to draw the reader to certainimplied with Congress is a useful guide for developing a policy conclusions that he never explicitly states. balance, placing Congress under greater responsibility for Ranelagh describes the cooperative relationship that the protecting national security in line with its stronger legis­ CIA maintained with Congress during the agency's first 30 lative oversight mandate. years of existence: It is in these and related areas where Ranelagh' s work is a useful contribution to the intelligence literature, partic­ For the first 30 years of its existence the agency's ularly at a time when intelligence, covert operations, the relationship with Congress was very informal indeed. role of the NSC, and the power struggle between the Oval In essence, the DCI and his close colleagues dealt Office and Capitol Hill are center stage in the Washington personally and informally with the chairmen of the political drama. important and relevent House and Senate committees A British television journalist and former speechwriter (Foreign Affairs, Appropriations, Armed Services), for Margaret Thatcher, Ranelagh was, according to his pre­ and other senators and congressmen who were "friends" face, guided through his effort by a group of leading former or who had significant political influence in areas im­ CIA officialsfrom the firstgeneration of postwar community portant to the agency in Washington. This worked executives-the self-described "Knights Templar." Rane­ because the agency was trusted, its directors were lagh's four principal guides were John Bross, Walter Pfor­ respected, and it was seen as America's principal de­ zheimer, R. Jack Smith, and Lawrence Houston. fense against the subterranean machinations of world As one of these contributors informed this reviewer in communism. . .. Senator Leverett Saltonstall of a recent discussion, the book posed a unique, and perhaps Massachusetts, a former member of the Senate Armed final, opportunity for a number of dominant personalities Services and Appropriations Committees, succinctly from the earliest days of CIA's emergence out of the wartime

EIR December 5, 1986 National 61 OSS to recount theirpersonal experiences and lessons drawn. Perhaps for that reason the book carries forward some of the very flaws and omissions that have marred the CIA through its first 40 years.

What about the bankers' CIA? While criticizing some of the agency's dirtiest laundry­ like the 1950s Technical Services Staff overboard experi­ N surfaces mentation with psychedelic drugs-and tackling ex-DCI unn as William Colby for his overzealous public display of the agen­ cy's "skeletons" (a public performance that prompted former hand-picked CIA Counterintelligence chief James Jesus Angleton to view man ·· Colby as a possible candidate as America's Kim Philby), the by Lyn don H. LaRouche, Jr. author at no point addresses the CIA's historical marriage to the Wall Street and Old Boston banking establishment. The existence of this "bankers' CIA" as a dominating policy During the late November developments around "Iran-gate," grouping within the agency is perhaps the most sacred cow Georgia's Democratic Senator Sam Nunn has been surfaced that Ranelagh chose to leave out of his narrative. Internal publicly as the hand-picked 1988 U. S. Democratic presiden­ details of past covertoperati ons, and overabundance of names tial candidate of the Kissinger-Brzezinski Trilateral Com­ of former and current ranking agency personalities are clearly mission. Under his recent and present defense policies, Nunn unnecessary elements in a comprehensivehistory of the agen­ would become a far worse U. S. President than the Buchanan cy that at the same time "keeps the secrets." However, to who organized the vast, fratricidal war of 1861-65. Were omit the special relationship between the Establishment Nunn elected President, his continuation of the present, trea­ bankers and the top echelons of the agency is to wnceal one sonous policies of Henry A. Kissinger and the Trilateral of the most devastating flaws of the CIA, one that must be Commission would ensure Soviet world-conquest during the corrected if an effective rebuilding process is to proceed at interval 1989-93. the necessary pace. Notably, Nunn has been consistently demanding savage In avoiding the "bankers' CIA" factor, Ranelagh resorted reductions in U.S. troop-strength in Western Europe. This to his most entertaining use of the cover story method. The pullback of U.S. forces is being pushed by every Trilateral author painted an unquestionably accurate picture of the Commission member on both sides of the Atlantic. The ac­ dominant role of the Ivy League law schools and the Eastern tions on defense demanded by Nunn would have exactly the Establishment old families in shaping the early generations same effect on West Germany that Neville Chamberlain's of CIA personnel and policies. (A useful further insight into 1938 deal with Hitler had for President Eduard Benes's this wedding of the CIA to the Establishment might be ob­ Czechoslovakia. tained by cross-referencing Ranelagh' s book with David Hal­ If West Germany begins to pull out of NATO, as Trila­ berstam's The Best and the Brightest.) teral Commission figures in that country propose will occur One former ranking member of the intelligence commu­ after the January 1987 elections in that nation, all Western nity, commenting on this particular flaw in the Ranelagh Europe becomes strategically indefensible, and the United study, told this reviewer, "Let us be perfectly frank. The States is automatically reduced to a third-rate power. bankers have dominated large sections of the CIA from the We can not prove, presently, whether Nunn is fully con­ beginning. Through positions like the Inspector General, the scious of this fact or not. Possibly, he is merely willing to do Wall Street banks have had such a dominating hand in the anything, to say anything, to secure the full backing of the CIA that it has been impossible to distinguish the interests of Trilateral Commission for his presidential candidacy. Kissin­ Chase Manhattan from those of the United States. What's ger, certainly, is fully conscious that what he is pushing is worse, this has bred a pragmatism that has badly impaired outright treason, and Nunn is backing Kissinger's policies the ability of the agency to draw any long-term evaluations." fully. To the extent that the Ranelagh book was, as this reviewer The argument, that Nunn is essentially a strong backer of suspects, part of the CIA's rebuilding program-a sort of a U.S. defense-capabilities, is a complete fraud. Nunn does recruiting brochure casting out the image of the "new CIA"­ pretend to support some elements in "conventional build­ it leaves a lot to be desired. This is probably less the flawof up"; but he demands that these improvements come out of the author than the flawof some of the folks who highlighted the heart of strategic defense. He also supports, consistently, the author's path. They, in their genuine desire to rebuild the levels of deep cuts in defense spending which would immo­ agency in their original image, have perhaps once again failed bilize the "conventional" capabilities he pretends to be to take a more profound and historical view of what America strengthening at the expense of strategic defense. once was and must once again be. Nunn's defense posture is not "confused." It is a consist-

62 National EIR December 5, 1986 Carter administration's Iran policy, the Republicans have all ofthe dossiers needed to destroy Carter, wheneverthey might choose to release those dossiers . Since the President's error, in his part in the State Department's weapons-for-hostages trade, was to buy into the continuing Khomeini channels of the Carter mafia, the mere fact that Iran is the issue being used against President Reagan, means that Carter's potential 1tilateral's candidacy is ruined by such a thematic issue. The key to Nunn's candidacy dates from 1983. In 1983, a Japan zipper manufacturing firmhosted Carter in Japan, as fo r President part of the launching of a new, Georgia-based, Trilateral Commission think tank, around the two leading U.S. genius­ es, Jimmy Carter and former President Gerald Ford. (Al­ though, no evidence has been submitted to date, that Carter has qualifiedfor a zipper-operator's license.) ent sort of public-relations stunt. Nunn is a typically amoral , Under the sponsorship of the Georgia Coca-Cola mafia, Georgia-machine politician. At bottom, his policies are the Carter's Emory University-based, Trilateral "think tank" has secret or semi-secret policies of those fixers, around the old been surfaced recently as a "parallel White House," already Bulloch, Root, and Cox families, who control the Georgia heavily involved in running a "parallel State Department." Democratic machine today. His election-campaign platform This center is strongly supported by Houston's Madame is propaganda cover-up for the same policies as those of the Dominique (Schlumberger) de Menil, a professed Sufi mys­ people who have bought his soul, like many politicians today. tic and a major supporter of Middle East terrorist causes. The His voting-record and public utterances are what his cam­ center is conducting a quasi-official U.S. foreign policy of paign's public-relations experts tell him to do and say, like its own in Central and South America, in Western Europe, so many political campaigns today. and in the Middle East. That "think-tank" is able to operate Nunn's big political problem, is that no one could win in this way, through protection of Trilateral-controlled mem­ the Democratic nomination for President if the general public bers of the U.S. Congress and fanatically anti-Reagan ele­ knew that the candidate was committed to policies which ments inside George Shultz's State Department. This "think would tum the world over to Soviet imperial domination: tank," which relies heavily on Henry A. Kissinger's advice, Nunn's actual defense policies. So, as a political candidate, as Senator Nunn himself claims to do , is the future Nunn he must cover up the fact that he is a backer of the Trilateral administration. Commission's deal with Moscow on U.S. defense. He does Sam Nunn's personal qualifications for the presidential that, by pretending to be a hard-line supporter of rebuilding nomination were exhibited on Sunday's national midday tele­ of U.S. "conventional forces." So, Nunn's campaign com­ vision sets on Nov . 23. He exudes the meanness of a man mittees say, "How dare you accuse Nunn of tearing down guarding his illegal still against federal revenue agents. He

defense, when he is a leading booster of • conventional build­ radiates the threat to do mean things to anyone who chal­ up here at home'?" lenges the veracity of his bald-faced lies-like the realJimmy The highway for promoting Nunn's presidential ambi­ Carter behind the rhesus-monkey-like grin Carter put on for tions, is a side-show performance by former President Jimmy the television cameras. Nunn has exhibited the kind of mean­ Carter. ness of a man who would do almost anything against anyone Carter's taking the lead against President Reaganin "Iran­ who gets in the way of his doing exactly what his masters gate," does not mean that the Trilateral Commission is con­ have ordered him to do: The law of the land be damned. You sidering electing CarterPresident in 1988; it means that they saw the face of such a man, the future head of the Senate are threatening to do so. It is simply a political maneuver, ArmedServices Committee, on Sunday's TV screen. part ofthe Trilateral'S campaign to give Nunn the 1988 Dem­ Those of you old enough to remember, will recall the ocratic nomination. slogan used to sell the fine old Packard automobile! If you The rallying of the hard-core Carter machine of 1976-80 wish to learn what is a Senator Sam Nunn, now off and around the former President, is a way of consolidating that running as Carter's candidate for the 1988 Democratic pres­ machine to deliver it to Nunn's support. idential election, "ask the man who owns one." The differ­ Since the Carter machine has used "Iran-gate" as the ence is, no self-respecting citizen would wish to have the leading element of its effort to destroy President Reagan, the neighbors see a President Nunn parked in his driveway. situation is created under which Carter himself could never The United States used to be the most powerful nation on run for Presidentaga in. Although the Reagan administration earth. One by one, the defenses of the U.S. were destroyed made a deal, back during the 1980 campaign, not to carry by the circles around Henry Kissinger. Let it not be said: through Ronald Reagan's campaign-threat to investigate the "And then there were Nunn."

EIR December 5, 1986 National 63 Funding cuts put the President's SDI program in grave trouble by Robert Gallagher and Carol White

Funding for Directed Energy Weapons under the Strategic placing heavier relative weight upon the "kinetic energy Defense Initiative will be 5% lower in this fiscal year (1987) weapons" side of the program than was the plan for their than in the past fiscal year. As mandated by Congress, the targeted appropriation. Funding for "kinetic energy weap­ Strategic Defense Initiative Organization (SOIO) has made ons"-ground-based antimissile missiles and Danny Gra­ cuts totaling $1.6 billion or 33% of the President's original ham's space-based cans of buckshot-will jump 23%, while budget request. The hardest hit program area has been laser funding for lasers and particle beams will decline 5%. and particle-beam defense weapons research. Funds avail­ Overall, discounting inflation, the SOl budget undergoes able for research and development of directed energy weap­ this year a real growth of only 13% from about $2.8 billion ons will be about $803 million, half of the SOIO's original to $3.2 billion, a far cry from the 71 % real growth to $4.8 request of $1.6 billion for this area, and about $40 million billion requested by the President, but much better than the less than the amount spent on lasers and particle beams last defense budget overall, which decreased in real terms. year. The President's program for the Strategic Defensive Ini­ Thus while the President held his own on the SOl at the tiative has always been intended to rely upon frontier tech­ Reykjavik summit, Congress is accomplishing the same pur­ nologies. The shift in allocation of the SOl budget raises the pose as Soviet leader Gorbachov , in whittling away the funds most alarming question about whether the program is to be­ needed to make the SOl a reality. On June 9, 1986, Gen. come a mere shadow of what the President envisioned in his James Abrahamson advised Congress that proposed cuts will , March 23, 1983 call to "make nuclear missiles impotent and this time around , have a "devastating" effect on the SOl obsolete." program. In a Defense Daily interview, Abrahamson noted that he did not have the options to make cuts this time, as he Soviets speed ahead did in the past two years. Work would have to be stopped in While Soviet propagandists continue to pretend that Rus­ every one of the five major areas of SDI development, he sia has no SDI and that the United States intends to use a said, emphasizing that he would "have to take chunks" out defense as a shield from behind which to launch a first strike, of priority areas. reality is the opposite. As Jane's latest Weapons Systems In order to make an early 1990s' decision on whether to Book verifies, and EIR has documented extensively, the So­ proceed to development, SOl must be funded at the requested viets are moving ahead rapidly with every aspect of an ABM level of $4.8 billion, and anything less will result in program system, including particle beams and X-ray lasers. Indeed, delays and stretch out the determination of the feasibility of in their weekly report of the week of Nov. 12, lane's esti­ the system, he said. Three years in a row with reductions of mated that within six months the Soviets will have completed 25% or more in the programmed budget will prevent him construction of a continent-wide ABM phased-array radar from keeping the program phased and on schedule for the defense based on mobile anti-missile missiles and radars early 1990s point of decision. In order to meet the exigencies dispersed around their country, in clear violation of the ABM of the congressionally mandated austerity budget, the SOlO treaty. Clearly their programm is not being scaled back due has in fact transformed the investment profileof the program, to budgetary considerations.

64 National EIR December 5, 1986 On March 25 of this year, General Abrahamson warned advantages "are not immediately obvious," is that their re­ a Senate Armed Services subcommittee that the Soviets might search and development costs more. It doesn't matter that be as much as fiveyears ahead of the United States in research Danny Graham's smart rocks will never do the job: They're on x-ray lasers. He disclosed that Soviet publications first cheaper! Thus, the AIAA heard Smith say that kinetic energy carried articles about x-ray lasers in 1974, and that the Soviets weapons "are winning by a neck" over various laser pro­ conducted an x-ray laser technology test in 1982 "that we grams. will not be able to do until 1987." The Pentagon issued a warningto Congress on May 27 If we accept the warningsof both SOIa Director Abra­ that was ignored. At that time, their spokesman, Robert B. hamson and Secretary of Defense Caspar Weinberger last Sims, said that it would be "a serious mistake" for Congress spring, the new U.S. budget constraints on the program, to follow the advice of the 46 Senators who are demanding a imposed in large measure by out-and-out opponents of the big cut in the President's SOl missile defense program. Sims SOl, appear to put it in danger of being mortally wounded. said that the cuts Congress made in SOl last year "have According to them, cuts in the budget request by as much as narrowed the range of technologies that we can explore. 25% would be disastrous. The request was, in fact, cut by Further cuts would seriously compound the problems and set 33%. back the prospects for an informed decision in the early Some concernedscientists in the program have speculat­ 199Os" on whether the research justified moving into full­ ed that the SOIa has been driven to short-change important scale development. experiments in favor of more showy short-term technologies As a result of cuts carried out a year ago, the SDIO already which would have a greater public-relations value and create narrowed the program to development of directed-energy a climate in which Congress would be impelled to increase prototype weapons to the free electron laser. Now, even this their funding. program is threatened. The areas to receive the biggest boosts in funding (see On April 30 of this year, General Abrahamson issued a table )-besides the $140 million increase for kinetic energy statement reporting that recent tests with free-electron lasers weapons funding-are computer technology ("systems con­ have led military scientists to conclude that bouncing ground­ cepts and battle management"), receiving a $235 million based laser beams off mirrors in space can be a practical increase, and target surveillance, acquisition, tracking, and defense . On June 23, the Defense Department announced kill assessment (SATKA), receiving an additional $405 mil­ plans to begin construction of the Los Alamos model free lion. Certainly the downgrading of spending for DEW must electron laser, a $400 million ground-based laser, to be built be welcome to the Danny Graham crowd, who have been at the White Sands test site. But under the new fiscal '87 using the need for early deployment of the system to push for budget, the White Sands Missile Test Range program, to their own Rube Goldberg variant of the SOl. build this free electron laser to test atmospheric propagation of laser beams, has been cut from $350 million for this year Cheaper, but a loser to $158 million, according to SOl sources. The implications While Graham's High Frontier is so impracticable as to of this is a delay of at least two years in the initial operation be a sure-loser if it is ever deployed, it has the attractive of this FEL, which was scheduled for prototype demonstra­ selling point of being apparently cheaper. Thus arguments tion in the early 199Os. based upon cost-effectiveness rather than mission-effective­ ness incorrectly claim energy weapons have insufficient "cost­ effectiveness." That's like saying that a watch without its inner workings is cost-effective even though it does not tell the time. The only logic which might justify such an approach DOD portion of SOl budget is the fool's hope that the Soviets can be made to swallow a (millions of dollars) deployment of High Frontier which would then become a SOl area FY86 FY87 FY87 Change bargaining chip in a Kissinger-scenario to bargain away the Request Actual 86-87 SOl, and with it the Atlantic Alliance. Surveillance, Acquisition, SOIa Deputy Director Gordon Smith told a meeting of Tracking, Kill Assessment 857 1,262 960 12% the American Institute of Aeronautics and Astronautics Nov. Directed Energy Weapons 844 1,615 803 -5% 18 that the advantages of a ground-based laser system over Kinetic Energy Weapons 596 991 740 23% space-based kinetic energy weapons along Graham's High Systems Concept, Battle Frontier design, "are not immediately obvious," according Management 227 462 384 69% to Aviation Week and Space Technology magazine, Nov. 24, Survivability, Lethality, and even though a laser weapon's speed of target interception is other research 222 454 320 44% the speed of light, 20,000 times faster than that imagined for Total 2,759 4,803 3,207 16% the fastest kinetic energy weapon. The reason why the laser's

ElK December 5, 1986 National 65 ImTIillSpecial Reports THE SCIENCE THE SOVIET UNION OF STATECRAFT WlII Moscow Become the Third Rome? How the KGB Strategic Studies by Lyndon H. LaRouche, Jr. Controls the Peace Movement. Includes transcript of the infamous spring 1983 meeting in Minneapolis at which KGB officials gave the marching orders to Walter Mondale's "peace Operation Juarez. LaRouche's fa mous analysis of the Ibero­ movement": Destroy the Strategic Defense Initiative! Order American "debt bomb"-a program for continental integra­ #8301 1. $250. tion. Order #82010*. $100. How Moscow Plays the Muslim Card In the Middle East. A Conceptual Outline of Modern Economic Science. Or­ Some in the Carter administration-and since-hoped to use der #82016. $50. Islamic fundamentalism to make the Soviet Empire crumble. What fools! Order #84003. Religion, Science, and Statecraft : New Directions in $250. Indo-European Philology. Order #83001 . $100. Global Showdown: The Russian Imperial War Plan for 1988. The most comprehensive documentation of the Soviet Saudi Arabia in the Year 2023. The thematic task of the strategic threat available. A 368-page document with maps. Arab world in the next four decades: conquering the desert . tables, graphs, and index. Order #85006. $250. Order #83008 . $100. The Implications of Beam-Weapon Technology for the Military Doctrine of Argentina. Order #83015. Was $250. Reduced price: $100. INTERNATIONAL The Design of a Leibnizian Academy for Morocco. Order #83016. Was $250. Reduced price: $100. TERRORISM Mathematical Physics From the Starting Point of Both Ancient and Modern Economic Science. Order #83017. Was $250. Reduced price: $100. The Jerusalem Temple Mount: A Trigger for Fundamen­ talist Holy Wars. Order #83009. $250. The Development of the Indian and Pacific Ocean Bas­ ins. Order #83022. $100. Narco-terrorism in lhero-America. The dossier that sent the Colombian drug-runners and their high-level protectors through the roof. Order #84001 . $250. The Terrorist Threat to the 1984 Los Angeles Olympics. MILITARY AND An analysis of the U.S. terrorist underground-the informa­ tion the FBI has repeatedly suppressed. Order #84005. Was ECONOMIC SCIENCE $250. Reduced price: $100. Soviet Unconventional Warfare in Ibero-America: The Case of Guatemala. Order #85016. $150. Beam weapons: The Science to Prevent Nuclear War. European Terrorism: The Soviets' Pre-war Deployment. The year before President Reagan's historic March 23, 1983 The dual control of terrorism: Europe's oligarchical fa milies speech announcing the Strategic Defense Initiative, this and the Russian intelligence services. The case of Germany's ground-breaking report detailed the feasibility-and neces­ Green Party, with profiles of the top fa milies of the interna­ sity-for beam defense. Order #82007 . $250. tional oligarchy. Order #85001. $150. Economic Breakdown and the Threat of Global Pandem­ ics. Order #85005 . $100. * Germany's Green Party and Terrorism. Issued Novem­ ber 1986. Order #86009. $250_ An Emergency War Plan to Fight AIDS and Other Pan· demlcs. Issued February 1986. Order #85020. $250.

THE WESTERN THE MIDDLE EAST OLIGARCHY AND AFRICA

The Trilateral Conspiracy Against the U.S. Constitution: Anglo-Soviet Designs on the Arabian Peninsula. Order Fact or Fiction? Foreword by Lyndon LaRouche. Order #83002 . Was $250. Reduced price: $100. #85019. $250. The Military , Economic, and Political Implications of Is­ Moscow's Secret Weapon: Ariel Sharon and the Israeli rael's Lavle Jet Project. Order #83010. Was $500. Reduced Mafia April 1986. Order #86001. $250. price: $250.

* The Libertarian Conspiracy to Destroy America's * Moscow's Terrorist Satrapy: The Case Study of Qad­ Schools. Order #86004 . $250. daft's Libya. Order #86002 . $100. * White Paper on the Panama Crisis: Who's Out to De· stabilize the u.s. Ally, and Why. Order #86006. $100.

* A Classical KGB Disinformation Campaign: Who Killed Olof Palme? Issued November 1986. Order #86010. $100.

* First two digits of the order number refer to year of publication. * NEW!

Order from:

EIR News Service P.O. Box 17390, Washington, D.C. 2004 1-0390. Please include order number. Postage and handling included in price. Seal had providedfe deral authorities with evidence crit­ ical to the 1984 indictment and later extradition effort against Jorge Ochoa-Vasquez. Seal's assassination in Baton Rouge, Louisiana dashed that extradition effort. Among the overt acts listed in the indictment is a series of meetings in Miami, Florida and Medellfn, Colombia in­ volving Jorge Ochoa-Vasquez and an American communi­ cations specialist named James W. Cooper. In December 1980, Cooper established a long-range navigational com­ munications system between Acandi, Colombia and the con­ Miami indictments hit tinental United States to track the long-distance drug flights and assist the pilots in averting DEA radar tracking and in­ 'Medellin Cartel' tercept systems. by Jeffrey Steinberg ConfirmsEIR reports Cooper's role in the Medellin Cartel confirms reports first On Nov. 18, 1986, a federal grand jury in Miami, Florida, published by EIR as early as 1975, that out-of-the-way air­ unsealed a 39-count indictment originally handed down on ports throughout central and easternPe nnsylvania were at the Aug. 25, 1986 against nine of the world's leading cocaine center of the internationaldrugs-for-guns trade. traffickers, named as the directors of the "Medellin Cartel." According to an article by Lindsey Gruson in the Nov. The nine indictees are: Colombians Jorge Ochoa-Vasquez, 20, 1986 edition of the New York Times. Cooper was sent to Fabio Ochoa-Vasquez, Juan David Ochoa-Vasquez, Pablo Medellin by Frederick Luytjes, the owner of Air America, Escobar Gaviria, Carlos Lehder, and Rafael Cardona-Sala­ Inc., a private airline and custom air service company head­ zar; Mexican Gonzalo Rodrfguez-Gacha; former Nicaragua quartered at the Scranton-Wilkes Barre International airport Vice Minister of the Interior in the Sandinista government, in Avoca, Pennsylvania. Federico Vaughn; and a "John Doe" a.k.a. "Joto." According to separate federal indictments handed down The indictment charges that between May 1981 and April in the central district of Pennsylvania in August of this year, 1985, the Medellin Cartel manufactured and imported into Cooper's navigational communications system was inter­ the United States over 47 tons of cocaine, established an linked with a facility at Luytjes's secluded home in Deer elaborate cocaine-processing network in South America and Lake, Pennsylvania. A leading member of the Medellin Car­ Central America (including Nicaragua), created an extensive tel, Rigoberto Correa-Arroyave, in early 1985 relocated to transportation system constituting a virtual private air force the United States where he oversaw the Air America flights capable of averting U.S. government drug interdiction sys­ between Colombia and Pennsylvania. Those flights, accord­ tems, and controlled wholesale warehouse facilities in the ing to the Pennsylvania indictments, accounted for an esti­ Caribbean and continental United States that distributed co­ mated 7.5 tons of cocaine entering the United States market caine to street trafficking organizations from coast to coast. over a several-year period in the mid-1980s. The indictment, which includes RICO (continuing crim­ Federal authorities now acknowledge that the 200 small inal enterprise) counts, additionally charges Medellin Cartel commercial airportsdotting the easternand central Pennsyl­ members with the murders of two men, at least one of whom vania landscape have emerged since the 1981 creation of the was a key government witness against the cartel. Rafael southern Florida drug interdiction task force under Vice­ Cardona-Salazar is accused of the Dec . 25, 1978 murder in PresidentGeorge Bush as favorite landing spots and hidea­ Dade County, Florida, of Antonio Aries Vargas. ways for big-time cocaine traffickers. Cartel kingpins Fabio Ochoa-Vasquez, Pablo Escobar Federal authorities also admit that the unsealing of the Gaviria, and Cardona-Salazar are all charged with the Feb. Florida indictments is intended to in part increase the pressure 19, 1986 murder of Adler Berriman Seal. Seal , a former on the recently inaugurated Barco government of Colombia Green Beret and expert pilot, had been involved in the Car­ to proceed ahead with extradition of cocaine kingpins. tel's initial opening up of laboratories, warehouses and air­ These latest indictments furthermore provide a more de­ strips in Nicaraguain cooperationwith Interior Minister To­ tailed map of the multi-hundred-billion-dollar dope-for-arms mas Borges' chief deputy, Federico Vaughn. According to apparatus which operates in the length and breadth of the the indictment, this "Sandinista Connection" had been estab­ Western Hemisphere. Taken in the context of previous in­ lished in May 1984-within weeks of the April 30 assassi­ dictments of Luytjes, Harold Rosenthal, and others, the nation of Colombia's Justice Minister Rodrigo Lara Bonilla ground is now laid for a full-scale assault on the top levels of at the hands of the Medellin Cartel, and an American collab­ the international drugcartel -including the bankers who still orator, Harold Rosenthal. remain untouched.

EIR December 5, 1986 National 67 There are substantial grounds for the suspicion that Mr. Graham died from other causes than have been announced by his widow, who received great material benefitand polit­ ical power from the death of her husband. He had separated from Mrs. Graham, and had been in a personal and political battle with her for at least two years at the time of his death. This was not merely a personal problem, but involved differ­ ences on the gravest issues of national concern. Philip Graham tried very hard to stop Mrs. Graham from being his "next of kin," including hiring a lawyer to institute divorce proceedings. This lawyer, later hired permanently by Mrs . Graham, admits destroying the will Mr. Graham EIR's Chaitkin seeks drew up leaving his estate to his intended new wife. If Philip Graham was killed, to his estranged wife's ben­ Graham death records efit, then Mrs . Graham's lack of consent should not be al­ lowed to block serious research into the official records of The fo llowing is the petition filed by investigative reporter Mr. Graham's death, on the grounds that she is the next of Anton Chaitkin on Nov. 14, with Judge Robert W. Duling's kin. The death certificate and medical examiner's report will Circuit Court of the Cityof Richmond, Virginia. provide vital clues, for example, into whether there was officialcorruption in the handling of Mr. Graham's death. In re records of deceased Philip Leslie Graham As far as public information is concerned, there is no "official story" of Philip Graham's death. The medical ex­ This is a petitionunder 32. 1-271 C of the Virginia Code, for aminer in the case refused comment and moved away from an order allowing copying of death records. A hearing is his longtime home and place of employment when petition­ scheduled before you for Courtroom 304, on Thursday, De­ er's investigation was publicized. The Sheriffs Department cember 4, 1986 at 1l:30 A.M. of Fauquier County maintains they have "lost" all records of Petitioner requests from the court an order compelling the investigation they did at the time of the death. the State Registrar of Vital Records to release to thepetitioner On May 20, 1986, petitioner Anton Chaitkin requested certified copies of all records in the Registrar's possession the Virginia Department of Health , Division of Vital Records concerningthe death of Philip Leslie Graham, deceased Au­ to furnishhim with copies of the death records of Philip Leslie gust 3, 1963 in Fauquier County, Virginia; and compelling Graham. Instead of supplying the records, or giving any other the State Chief Medical Examiner to release to the petitioner alternative, that office returnedto Chaitkin a consent form to all the information in his possession concerning this death. be signed by the next of kin of the deceased. On June 1, 1986, Petitioner Anton Chaitkin is a reporter for New Solidarity Chaitkin delivered the form with a request to Mrs. Katharine twice-weekly newspaper and Executive Intelligence Review Graham to sign the form . Mrs. Graham declined to returnthe weekly magazine, both publications distributed internation­ form or to cooperate in any fashion, and the petitioner filed ally. Chaitkin is co-author of a series of articles on the last for relief under the cited Virginia code. years and deathof Philip Leslie Graham; four articles have A hearing was scheduled for Sept. 22 before the Hon. so farbeen published . Willard I. Walker (since deceased). Three days before this It was as a result of Mr. Graham's death that his widow scheduled hearing the petitioner received notificationthat the Katharine Graham came to own the Washington Post news­ Virginia Attorney General's office had intervened in this case paper and Newsweek magazine. Stories printed in the Wash­ to prevent disclosure. In order to prepare a reply to their ington Post, and released to other news media by the Wash­ arguments, the petitioner asked for and received a postpone­ ington Post, have been the only publicly available account of ment of the hearing. the cause and manner of Mr. Graham's death, purportedly a Less than three weeks later, on Oct. 6, 1986, the Attorney suicide. General and over one hundred state troopers and many federal Important changes in our country's political system oc­ agents entered the petitioner's editorial offices, and removed curredbecause of the death of Philip Graham. The Washing­ a mass of documents. A suit has been filed to recover those ton Post has great influencein global affairs, and its present documents. Following a delay caused by this disruption of owner, Mrs. Graham, has intervenedin American public life business functions, the petitioner has reinstated this case. perhaps more than any other publisher. The public has a Attached hereto is a copy of a registered letter, by which substantial interest in knowing how she came to have that Mrs. Katharine Graham was informed about the scheduled position. hearing.

68 National EIR December 5, 1986 Eye on Washington by Nicholas F. Benton

economic and historical profile, Okla­ T. Boone Pickens: Bankers admit crisis, homa and Louisiana could be decisive 'What? me worry?' for the 1988 presidential campaign­ have no solutions because these are two states where the Corporate raider T. Boone Pickens of L. William Seidman, chairman of the seeds of popular revolt are sown deep­ Mesa Petroleum told this reporter that the size of corporate debt in the na­ Federal Insurance Deposit Corpora­ est, and economic conditions have tional economy was "no problem" in tion (FDIC), the agency that is sup­ brought bothto the breakingpoint . posedto insure our bank deposits, has The national agenda for politics is his mind. Nor, he said, was the idea that the entire last four years of a "bull pulled back from his recent San Fran­ always contested between the Eastern market" on Wall Street has been based cisco speech which sent the nation Establishment, on the one side, and on debt (so-called "j unk bonds") as its rocking with the most explicit state­ the most activist currents in the pro­ asset base. ment yet of impending financial apoc­ ducing sectors on the other, with var­ Pickens, speaking at a conference alypse by a high government official. iations depending on how well the is­ of economic libertarians (putting it Seidman's warnings about the conse­ sues are articulated and represented. politely) calling itself Citizens for a quences of the accumulated corpo­ The urban populations rarely lead, but Sound Economy, said that "all we need rate, consumer, and government debt stand back and choose sides, with the is to dump all the old corporate board­ created international shock waves. significant exception of the 1960s'civil members overboard and bring on the But, while a spokesman for the rights movement. California developed as an anti­ aggressive 35-to-45-year-old man­ American Bankers Association told this reporter that he "shared the con­ Eastern Establishment power base aft­ agers to run things." er World War II because of the influ­ The conference, with panels cerns" expressed by Seidman in San Francisco, Seidman himself toned ence of the war production industries, chaired by Drexel Burnhamrepre sen­ tatives, who are under the cloud of the down his message considerably when especially aerospace, catalyzed by the he keynoted the opening of a confer­ leadership of Sen. William Knowland growing "insider trading" scandal, was ence on banking here Nov. 20. (known as General MacArthur's sen­ funded by David H. Koch of Kansas According to an Oklahoma source ator). It put Nixon and Reagan in the City, who bankrolls the Libertarian White House, but now it is too "pros­ attending the conference, the FDIC is Party . perous" and laid back. It will not drive At the American Bankers Associ­ playing the major role in forcing the the anti-Establishment pulse in 1988. ation Economic Advisory Committee smaller, energy, and agricultural-re­ Nor will Texas, which has a lot of meeting the same day, spokesman lated banks in the depression-wracked populist sentiment, but whose politi­ William E. Gibson said that the Amer­ Midwest to accept takeovers by the cal institutions are all run by junior ican banking system is not threatened major East Coast megabanks. "It is the partners of international finance cen­ by the unraveling of "junk bonds," so FDIC which is the real enforcer in tered in Houston. The smokestack much as the dangers of the overall debt­ driving these independent banks into states will play their part, to the extent equity imbalance cited by Seidman in the hands of the Eastern giants," he their citizens are freed from the failed San Francisco. said. Democratic Party and trade union Gibson barely kept a straight face He reported, however, that one or leadership they've relied on too long. in insisting that these debt problems two Oklahoma banks may be about Atlanta is like Houston. Florida ex­ could be managed in an orderly way. ready to call the FDIC's hand in an pects to cash in on the "new realities" Consumer debt, he said, would be effort to stop this trend. The results of the "post-industrial society." handled by the positive effects on tax could prove interesting. Revolt will come from the eco­ reform. Then he turned right around nomically-stricken states with a polit­ and said that "no one can predict what Oklahoma, Louisiana ical penchantfor revolt. If the Demo­ effect the new tax code will have. " He crats hold their convention in New Or­ also could not predict that there would keys to 1988? leans, there's a good chance the mor­ be fewer bank failures in 1987 than in On a related subject, an insightful ob­ ibund leadership will get more than it this year, when we've already set a server has noted that for reasons of bargained for. post-depression record.

EIR December 5, 1986 National 69 National News

kill operation. These guys don't want me in the Strategic Defense Initiative were drawn prison. They want me dead ....There was up. no basis for that amount of armed force . . . . Burlatskii recently completed a tour of Teller: Russians have Lo�k at t�� thing from a military stand­ Great Britain, where he met with several pomt. ... Soviet studies departments at universities 'monopoly' on defense • The 1986 election: "In terms of 1988, and pushed the idea of a "reform trend" in The Russians are far ahead of the United the election was tremendous, a tremendous Soviet culture. mediated through the new States in civil defense, physicist and Nobel success. We have secured a baseline of one­ Soviet Culture Fund of Raisa Gorbachova. Prize winner Edward Teller said in a speech third of the vote in the Democratic Par­ Nov. 24 in California. ty . . . . The economic crisis will increase "Today , the Soviets have a monopoly it. The thing that's been holding people back on defense and they 'intend to keep it. We on me is I've insisted we have not had an have done practically nothing about civil economic recovery. " New Orleans bishop • AIDS and California Proposition 64: defense." Teller said the problem with the blasts Dominican Strategic Defense Initiative (SOl) is that "For 20 years, the U.S. has been on a coun­ U.S. -deployed defensive space weapons are tercultural kick ....Anything that's con­ Archbishop Philip Hannan of New Orleans vulnerable. He noted that the Soviets have sidered immmoral or illegal before is now has publicly blasted Archbishop Rembert worked for the past 10 years perfecting laser popular ...and now disaster looms .... Weakland of Milwaukee, the former head weapons and now have a laser capable of Prop 64 has made AIDS an international of the Dominican order, for attacking the shooting 1,000 miles without its beam issue of prime focus. " Vatican's crackdown on American heretics spreading more than 5 feet . • On any attempt to put him in prison: Fr. Charles Curran and Archbishop Hun­ Bernard Blake , the editor of Jane's "In prison, I'm a political martyr, a living thausen of Seattle. Weapon Systems. wrote in the review's 1986- political martyr, which creates a new di­ Hannan took Weakland to task for 87 edition, released in late November, mension of problem for them. You want to "wildly exaggerating" when he compared "Anyone who thinks that the Soviet Union see a rally? You have people around the the Vatican's actions against Curran and is lacking a comparable SOl system should world supporting me . You put me in prison. Hunthausen to the horrors of the Inquisition. think again." Quoting U.S. defense sources, you'll see that. That could be a major prob­ In an editorial for his diocesan newspaper, Blake reported that Moscow has an exten­ lem for the U.S. government." reprinted in the Nov. 20 issue of the national sive laser program employing 10,000 sci­ • On the outcome of charges brought conservative Catholic newspaper The Wan­ entists and engineers as well as other ad­ against him and his associates: "I'm looking derer. Hannan wrote that the "scourge of vanced weapons-research projects. for a good, honest, gutsy judge who believes abortion, drug addiction, pervasive sexual He added that the Soviets have the only in the law." immorality, racism, and the weakening of ASAT system, "whereby an offensive de­ family life are of prime concern in my opin­ vice enters the same orbit as the satellite and ion." destroys it by exploding a conventional war­ head ."

KGB journalist DNe ducks demand visits United States A top commentator for the Soviets' Litera­ by Jesse Jackson Washington Times tumaya Gazeta. Fyodor Burlatskii, is now The Democratic National Committee ducked on a three-week tour of the American East a demand by Jesse Jackson that it intervene interviews LaRouche Coast. Burlatskii arrived in the United States in the Chicago battle between Mayor Harold The Nov. 24 Washington Times features a on Nov. 20, and will stay through Dec. 10. Washington and Cook County Democratic three-quarter-page interview with Lyndon Burlatskii was a close associate of the chairman Ed Vrdolyak. The request was LaRouche under the heading " 'Great panty late Yuri Andropov in the Soviet KGB back supposedly made to "prevent a campaign of raid' no joke to LaRouche ." The Moonie during the 1960s.Literaturnaya Gazeta is racism, mud-slinging, and divisiveness" in paper's editor-in-chief is Arnaud de Borch­ considered a KGB outlet. the Feb. 24 mayoral primary. grave. One of Burlatskii's more famous past DNC chairman Paul Kirk did, however, In the interview, LaRouche gave his trips to the United States, involved his par­ pledge to discuss the Vrdolyak challenge views on a variety of issues: ticipation in the 1983 Minneapolis "nuclear with Washington and speak out against "any • On the raid on his associates in Lees­ freeze" meeting at which Walter Mondale's overtone of racism at any level of the party , " burg, Virginia, Oct. 6: "I'm the target of a election platform stands on disarmament and according to the Nov. 23 Washington Post.

70 National EIR December 5, 1986 Briefly

• CIA DEPUTY DIRECTOR Robert Gates said in a speech in Cal­ ifornia on Nov. 25 that the Soviet Jackson dominated the DNC meeting at vestigation of the Californiaorganized-crime Union has spent $150 billion on its the Washington Hilton Hotel, claimed the mafia. Many of these files were on Van de own version of the SDI during the Post, and staked out other areas for future Kamp's ties to these circles, especially his past 10 years . The U.S.S.R. has the challenges to the party's rules-including friend, Sidney Korshak. Both of these sei­ ability to construct individual ABM proportional representation of primary vot­ zures wereprotested by legal counsel as being sites in a matter of months, rather ers, a challenge which he carried all the way in clear violation of the search warrant. A than years, he said, and the new de­ to the floorof the 1984 convention. hearing is set for later in December to deter­ vices they have developed could vi­ mine the final fate of the seized materials. olate the 1972 ABM Treaty. The legal basis for the raid was alleged irregularities in the gathering of the petitions • THE STATE DEPARTMENT to place Proposition 64 on the ballot. A sim­ is being sued for libelby British AIDS California judge ilar raid was conducted Oct. 6 against of­ expert Dr. John Seale, for circulating fices of associates of Lyndon LaRouche in the evaluation that Seale is "imbal­ curbs PANIC raiders Leesburg, Virginia, by 400 armed law-en­ anced or rather crazy" and "a prophet A Californiajudge has placed curbs on ov­ forcement agents. of doom who has been getting worse erzealous officials of the state Justice De­ year after year," the Daily Mail of partmentwho raidedthe Los Angeles offices London reportedNov . 27. of supporters of Proposition 64, the ballot referendum that would have treated AIDS • EDUCATION SECRETARY with traditional public-health measures. The California doctor William J. Bennett told a meeting of initiative was defeated in the Nov. 4 elec­ the Fairfax, Virginia, Chamber of tion. Following the Nov. 20 raid, a judge withheld AIDS view Commerce Nov. 21 that third graders has ordered illegally seized material to be Only two days after the Nov. 4 election, the should not receive "safe-sex" educa­ placed under seal in his custody. same California medical "authorities" who tion about AIDS. He was replying to On Nov. 21, the attorney for PANIC bitterly denounced Proposition 64 , started a question on whether he agreed with (Prevent AIDS Now Initiative Committee), to demand action to make AIDS a reportable Surgeon-General C. Everett Koop Bob Levy, presented motions before Judge disease-as Proposition 64 would have about AIDS education of third grad­ Schwab, who had originally authorized the done. According to the Los Angeles Daily ers. search warrant, demanding a return of ille­ News of Nov. 7, Dr. Jack E. McCleary, the gally seized property. Once the First head of the Los Angeles County Medical • DOMINIQUE DE MENIL'S Amendment violations involved in seizing Association, called for doing away with a Rothko Chapel is giving its annual membership lists and journalists' fileswere state "confidentiality" law that prevents prize to the sanctuary movement for laid before Schwab, he ordered that these doctors from telling anyone that a patient Central Americanrefugees and to the materials be placed under seal of his person­ has AIDS-even the patient's spouse or "Red Bishop" of Ecuador, Leonidas al custody. other doctors ! Proano, amongothers . Theprizes will California Attorney-General John Van After he and his associates have contrib­ be awarded Dec. 10 in Houston. de Kamp's officewas apparently caught un­ uted to oefeating a public health measure prepared, and had no one available to op­ that would have made AIDS reportable and • U.S. EDUCATION fails to pre­ pose the motions. Judge Schwab also or­ begun to save lives, McCleary stated that pare Americans to compete in the in­ dered that any illegally seized material from "the danger to a third party outweighs a pa­ ternationalmarketplace, according to the Livermore officesbe placed into his cus­ tient's right to privacy when the danger is a Southern Governors' report re­ tody. lethal." leased Nov. 21. "We know neither During the ra id, Van de Kamp's agents McCleary admitted that he had withheld theglo be nor the cultures of the peo­ revealed that they were not merely investi­ his statement until after Californians went ple who inhabit it," says the report, gating "petition irregularities"-the osten­ to the polls to vote on Proposition 64, be­ titled Cornerstone on Competition . sible purpose of the operation. They indis­ cause "talking about this during the cam­ The report recommends greater em­ criminately confiscatedproperty belonging paign might have helped the LaRouche phasis on geography and foreignlan­ to the National Democratic Policy Commit­ Amendment get passed." Now, however, guages in the schools, suggests that tee (NDPC) and Executive Intelligence Re­ Dr. McCleary claims that "it's something states set up world trade centers to view, whose West Coast offices are housed that has to be said," and that many doctors provide education and marketing as­ in the same building. In the case of the agree with him. sistance, and says that foreign ex­ NDPC, its membership lists were illegally An average of one person a day dies of change programs should be expanded seized. EIR's office had journalists' inves­ AIDS in Los Angeles County, and two new for Americans. tigative filesconfiscated, of an ongoing in- cases are reported each day, officialsreport.

EIR December 5, 1986 National 71 Editorial

Now, let's get the 'homintem'

Around Thanksgiving, the State Department an­ Department, into a nest of British limp-wristed "polit­ nounced that all u.s. foreign service personnel will be ical science" types at Harvard University under Brit­ tested for AIDS . ain's William Yandell Elliot. These types were very Our first thought was , is this the end of the u. s. much a part of Soviet intelligence operations into North foreign service? Has someone at the Pentagon, or America. Being promoted into their midst also guar­ somewhere like that, finally caught on? anteed one some kind of foreign service careeror policy It is reported in one Asian nation that every known influence at the State Department. case of Acquired Immune Deficiency Syndrome (AIDS) This particular jeep driver cum political-science has been tracedback to the u.s. embassy. major was Henry A. Kissinger. In Britain, the demand has frequently been raised Kissinger's "homintern" code name , say our thatfore igners entering the countrybe tested for AIDS­ sources, was "Bor." At the end of the 1950s, the inves­ perhaps with an emphasis on U. S. diplomats. tigation of "Bor" dating from the postwar Occupation It is said that Gen. Douglas MacArthur once said, was suppressed by the circles around EasternEstablish­ that the great failing of President Eisenhower was not ment "president"McGeorge Bundy . to have cleaned the homosexuals out of the U.S. State "Bor" is precisely what Henry Kissinger thereafter Department. did, inside the U.S. government, to the pinnacles of Now, MacArthuralso stated that in his experience , power. The U.S. State Department today is totally the typical State Department policy-shaper was a cross dominated by circles associated with, or proteges of, between a communist and a British imperialist. Ob­ Henry A. Kissinger. viously, he meant those homosexuals. Now , Kissinger and his boyfriends, of course , are And, as history would have it, in the postwar peri­ the ones wholly responsible for the policy of overthrow-

od, that is precisely right. I ing the Shah and building up "Islamic fundamentalism" During the 1950s, U.S. intelligence services were in the Middle East as "a bulwark against commu­ engaged, according to EIR's sources, in an intense in­ nism" -the policy that has of late been blown out of vestigation of an apparatus originating not latt:;r than the water by the "Iran arms-deal" affair. the period of the Gennan Occupation, an apparatus Thus, while the congressional investigations pro­ taken over by the Soviet KGB . The central figures in ceed, while the "independent commission" exploresthe this apparatus all had one thing in common that sub­ matter, while Attorney-General Meese conducts his own jected them to KGB blackmail. They were homosexu­ ponderous investigation, with many a Kissinger asso­ als. ciate and protege, especially those among the old Carter The appellation chosen for this network, it is said, administration circles, sure to come under the axe , the was "the homintern." announcement that every foreign service man will be One of thecentral figuresin this network, according tested for AIDS prompts us to ask: to these sources , was a fOf!Der Pfc . jeep driver from Has someone at the Pentagon, or somewhere like Oberammergau who was promoted by a certain Swiss that, finally caught on to what has been wrong with aristocrat with a lifetime of service "at the U.S. State U. S. foreign policy in the postwar period?

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