Is America still the land of "liberty and justice for all"? Or, are we heading into a totalitarian police state, like Nazi Germany or Soviet Russia? Read this book, and learn the truth about what happened to justice in the United States.

U.S.A. vs. Lyndon LaRouche, et al.

"I SHOULD GET A CIGAR ... " bragged the judge after railroading through the frameup and conviction of presidential candidate Lyndon LaRouche.

Judge Albert V. Bryan was the judge who finally accomplished what a federal government "Get LaRouche" St rike Force had been attempting to do since 1983. That task force swung into motion using the resources of the FBI, CIA, IRS, and private agencies, at the instigation of Henry Kissinger, who bragged in the summer of 1984 that "we'll take care of LaRouche after the elections." The first federal case against LaRouche and his associates, held in Boston before Federal Judge Robert Keeton, backfired on the government. A mistrial was declared, and the jury said they would have acquitted everyone on allcharg es. But in Alexandria federal court, the "rocket docket" did the job. Judge Bryan hand-picked the jury in less than two hours, excluded all evidence of government harassment, and rushed the defense so rapidly that convictions­ were brought in on all counts in less than two months from the indictment. LaRouche was sent to jail for 15 years, on January 27, 1989, a political prisoner. The conviction and impris­ onment hav�' provoked protests of outrage from around the world. In this book, you'll see why.

623 pages, illustrated with index: $10 suggested contribution Order from: Human Rights Fund, P.O. Box 535, Leesburg, VA 22075 Bulk rates available on request. Founder and Contributing Editor: Lyndon H. LaRouche, Jr. Editor: Nora Hamerman From the Editor Managing Editors: John Sigerson and Susan Welsh Editoral Board: Warren Hamerman, Melvin Klenetsky, Antony Papert, Gerald Rose, Alan Salisbury, Edward Spannaus, Nancy Spannaus, Webster Tarpley, William Wertz, Carol White, Christopher White L yndon LaRouche finally got to take the witness stand in one of Science and Technology: Carol White the trials against himself and his associates, and tell the truth about Special Services: Richard Freeman Book Editor: Katherine Notley the political movement he has been working to build-making clear Advertising Director: Marsha Freeman the reasons why he has powerful enemies. Starting on page 32, our Circulation Manager: Joseph Jennings Feature reprints the court transcript of the direct examination in that INTELLIGENCE DIRECTORS: history-making testimony on Aug. 11 in New York. The entire Africa: Mary Lalevee Agriculture: Marcia Merry transcript-including the several hours of cross-examination not Linda de Hoyos Asia: published here, due to space constraints-is being rushed into print Counterintelligence: JejJrey Steinberg, Paul Goldstein by the Human Rights Fund. A week later, on Aug. 18, FBI agent Economics: Christopher White European Economics: William Engdahl, Richard Egan was compelled to testify and blew the lid off a whole Laurent Murawiec pattern of government misconduct in the LaRouche cases, by re­ Ibero-America: Robyn Quijano, Dennis Small Law: Edward Spannaus vealing before the full jury that he had deliberately destroyed finan­ Medicine: John Grauerholz, M.D. cial documents needed for the defense which were under his custody. Middle East: Thierry Lalevee Soviet Union and Eastern Europe: Other highlights of this issue: Rachel Douglas, Konstantin George • In Strategic Studies, EIR East bloc specialists Konstantin and Special Projects: Mark Burdman United States: Kathleen Klenetsky Luba George and Rachel Douglas have assembled the stunning evi­

INTERNATIONAL BUREAUS: dence on the reorganization of the Soviet military-and it's not as Bangkok: Pakdee and Sophie Tanapura our liberal media would have you believe, for "peace" purposes. In Bogota: Javier Almario Bonn: George Gregory, Rainer Apel fact, everything EIR projected in our authoritative report of 1985, Copenhagen: Poul Rasmussen Global Showdown, has been borne out. Houston: Harley Schlanger Lima: Sara Madueiio • On page 8, an object lesson on why Lyndon LaRouche's Mexico City: Hugo LOpez Ochoa, Josefina leadership in economic policy is literally a matter of life and death Menendez Milan: Marco Fanini for millions: the story of what has happened to Peru's economy. New Delhi: Susan Maitra • On page 60, the real nature of the "Get LaRouche" task force Paris: Christine Bierre Rio de Janeiro: Silvia Palacios was exposed with the recent arrest of terrorist Mordechai Levy, Rome: Leonardo Servadio, Stefania Sacchi whose danger to public safety and national security has been pro­ Stockholm: Michael Ericson Washington, D.C.: William Jones tected for years under the FBI's scheme to keep Levy available as an Wiesbaden: Goran Haglund informant and a potential assassination threat against the LaRouche ElRIExecutive Intelligence Review (ISSN 0273�314) is political movement. published weekly (50 issues) exceptfor the second week ofJuly and last week ofDecember by New Solidarity • On pages 48-53, we present some of the evidence why liquor International Press Service P.O. Box 65178, Washington, DC 20035 (202) 457-8840 magnate Edgar Bronfman, president of the World Jewish Congress, EIII"OpfIIUI Helllill_rs: Executive Intelligence Review Nachrichtenagentur GmbH. Postfach 2308. represents neither the interests of Jews nor Israel, and is using his Dotzhcimentrasse 166,0-6200 Wieshaden. Federal Republic of Gennany huge political clout for perfidious ends. Tel: (06121) 8840. Executive Direct"",: Anno Hellenbroich. Michael Liebig • In Science & Technology, we engage again in one of our In DeIlm4l"k: EIR. Rosenvaengets Aile 20. 2100 Copenhagen favorite sports, subjecting the hysterical claims of the anti-industry OE. Tel. (0I) 42-15-00 In Mexico: EIR. Francisco Dlaz Covanubias 54 A-3 lobby-in this case against high voltage transmission lines-to the Colonia San Rafael. Mexico OF. Tel: 705-1295. scrutiny of reason. /1IpIUI subscrlp/ion stiles: O.T.O. Research Corporation. Takeuchi Bldg .• 1-34-12 Takatanobaba. Shinjuku-Ku. Tokyo 160. Tel: (03) 208-7821.

Copyright © 1987 New Solidarity International Press Service. All rights reserved. Reproduction in whole or in part without pennission strictly prohibited. Second-class postage paid at Washington D.C .• and at an additional mailing offices. 3 months-$125. 6 months-$225. I year-$396. Single issue-$IO Postmaster: Send all address changes to BIR. P.O. Box 17390. Washington. D.C. 20041-0390. ITillContents

Departments StrategicStudies Economics

54 Report from Bonn 4 Financial house of cards is Gorbachov backs East Berlin nothing to sneeze at regime. The quarterly auction of Treasury debt may have marked the turning­ 55 Panama Report point on the way to the next collapse. u.s. maneuvers simulate invasion.

56 Andean Report 6 Currency Rates On political defeatism. Soviet officers arrive at Arlington National Cemetery for a wreath-Iaying ceremony. during a July 1988 grand 6 Brazil's 'day after' wiD be tour of the United States by Marshal Sergei Akhro­ a 10Dapalooza 57 Dateline Mexico meyev. Thefacade of gillsnost is beginning to crack. Buying a country with drug 8 Narco-dollars collapse money. 24 Soviets reorganize Peru's economy military, not to prepare 72 Editorial The U.S. refused to help President for 'peace' Alan Garcia when it could have Assad, no different than Hitler. Soviet war preparations have now made a difference. Now industrial become so blatant that only those production is down by 40%. and entirely blinded by their own African conditions prevail. foolish dream of a "New Yalta" Documentation: Statistics on the Science & Technology could fail to notice it. Konstantin collapse of production, George documents how Moscow unemployment, and inflation. 18 Are high-voltage power has forged a unified command which would assure them victory lines a threat? 13 Banking in a strike into Western Europe. There is no doubt that Bush thrift bill reeks of fascism. electromagnetic fields have an 27 Polish government is effect on all biological matter; but 14 Agriculture that is no excuse for the under Soviet gun World grain stocks down 30%. incompetent arguments and poorly designed studies the 28 'Afgantsi'-Moscow's environmentalists are using to Praetorian Guard 15 Energy Insider prevent long-distance transmission These hardened elite Slavic The remarkable influence of Big of electricity. An assessment by Oil. veterans of Afghanistan are being Jan West. groomed to maintain Russian supremacy over the Captive 16 Business Briefs Nations within the Soviet empire. Volume 16 Number 34, August 25, 1989

Feature International National

32 LaRouche gives testimony 42 Stop the holocaust in 60 Terrorist Mordechai Levy on patriots' movement Lebanon! is finally apprehended In a major victory over those who Helga Zepp-LaRouche issues an For seven years, prior to a recent wanted to keep politics out of the urgent plea for the Western powers shootout and his arrest in New biggest political witchhunt to stop Syrian dictator Hafez York City, this terrorist leader of prosecution in this century, on Assad from doing to Lebanon, the Jewish Defense Organization Aug . 11 Lyndon LaRouche took what the Nazi SS did to the Jews has been wittingly deployed by the the witness stand in order to force of the Warsaw ghetto. FBI to set up bombing murders the court record to reflect the Documentation: Responses from and intimidation against those actual policy reasons-economic around the world to genocide in whom the FBI has targeted as and moral-why he and his Lebanon. political enemies, such as Eastern associates are being persecuted. European anti-Communists and We present the official transcript 45 Beijing turns on Zbigniew Lyndon LaRouche. Will Levi's of LaRouche's direct testimony in controllers now be brought to Brzezinski a New York court. justice?

46 IMF readies 'Pol Pot' 36 FBI man trashed 64 Ritual abuse case shakes option for Sri Lanka documents Nebraska The incredible story Richard Egan Top Washington circles are 47 Bush moves against told the jury on Aug. 18. implicated. Argentine military

The u.S. ultimatum to President 65 Administration plans troop Carlos Menem: Either get rid of pull-out from Asia anti-Communist nationalists like Colonel Seineldfn, or else! 66 How Henry Clay's 48 The strategic dimension patriotic nationalists behind Europe's current dumped the appeasers 'religious wars' Historian Anton Chaitkin explains why Clay's "War Hawk" faction The Auschwitz controversy. in 1812 should be a model for saving the nation today. 50 The Bronfmans: a crime family turned respectable 70 National News Part I of a series.

58 International Intelligence �ITillEconomics

Financial house of cards is nothing to sneeze at

by Chris White

There's a story about Samurai-style executions in Japan. concluded, has decided to figpt for its very life. "When are you going to do it?" asks the brigand after the Were there not a growiqg military threat arising from razor-sharp samurai sword has flashed past his ears. "Just developments in the Middle!East and Eastern Europe , the don't sneeze," comes the reply from the executioner. The Japanese decision to stay out of the Treasury debt auction quarterly auction of Treasury debt, held in the second week would have already had a profound impact on the dollar. of August, may well tum out to have been just such an Even with these crises, Japan's decision is now becoming execution, marking an irreversible turning point, according compounded with the emergence of the first signs of this to top-level financial specialists in Europe, on the pathway fall's awaited payments crisis for the U.S. credit system. toward the next ratchet-step of financial and economic col­ Recent filingsof corporate quarterly reports with the Se­ lapse. curities Exchange Commission are bringing to light the im­ Contrary to their practice of the last years, Japanese pending collapse of Wall Street's leveraged buy-out/junk investors did not snap up the lion's share of the financing. bond financial empire. Since the so-called income streams Instead, only between 10% and 15% of the approximately claimed from such financings have helped to leverage the $30 billion of debt marketed or redeemed was placed with growth of hyperinflationarycredit in the banking system, the the Japanese, and that was concentrated in relatively short­ collapse of the so-called LBOs, like the Japanese withholding term 247-day notes, rather than the 10- or 30-year bonds of funds, foreshadow what can be expected to develop this which were also part of the package. The Wall Street invest­ fall. And it is not only the LBOs. The limited partnership, ment houses, which broker the sales for the u.S. govern­ publicly sold, to raise some of the finance for the takeovers ment, have been leftholding the debt for which buyers could funded through LBO junk paper are collapsing. And, now not be found. The collapse of bond prices, since the ill-fated that the savings and loan bailout bill is law, we have the auction, leaves those houses now facing losses in excess of beginnings of a flight out of government-backed mortgage $200 million, as a result of the hole which has suddenly securities. appeared in financingthe indebtedness of the United States. On the Japanese side, it can be assumed that the old men LBO mania who rule that country have finally had enough of the contin­ In recent years, leveraged buy-outs have become the rage ued and escalating pressure against their country and its gov­ of the merger-aquisition mania gripping Wall Street. Cor­ ernment, which has been proceeding in unrelenting fashion porate raiders like Carl leabn, with the aid of junk bond ever since Henry Kissinger's "second Lockheed Affair," the specialists like Drexel Burnham's Michael Milken, have Recruit Cosmos so-called political pay-off scandal, broke grabbed headlines, snatching up large companies willy-nilly last October on the eve of the U. S. elections. After the Re­ and reporting investment returns of 50-100% and even high­ cruitscandal , the debacle with the FSX project, the arrogance er. The deals have been financed through "junk bonds," in of the Super-30l retaliatory provisions of the Omnibus Trade which huge amounts of debt issues have been floated to buy Act of 1988, the Moonie-managed "Tail-gate" attacks on these companies-in most cases, far beyond the ability of U.S.-Japanese defense co-operation, and the disgrace of Prime these acquisitions to finance that debt. Ministers Takeshita and Uno-after all this, Japan, it can be The chickens are now coming home to roost. Several of

4 Economics EIR August 25 , 1989 these companies have announced that they are unable to meet last year in a leveraged buyout/junkbond deal by entertainer interest and principal payments on their high-yield junk bonds. Merv Griffin, Resortsis facing $ 130 million in debt payments These firms include SCI Television, Seaman Furniture, In­ this year, with a cash flow of only $60.2 million. Its losses tegrated Resources, and Zapata Corp.-the Texas company have increased in almost everyquarter for at least the last two founded by George Bush. years. According to a Moody's financialreport, the possibilities Resorts International attributes its bad fortune to "a de­ for large-scale junk bond defaults under conditions of a major clining market, higher operating costs, eroding market u. S. economic downturnare far greater than in the last severe shares," and just plain bad luck at its own gambling tables. recession in 1982. Whereas in 1982 the corporate sector had One brilliant "solution" being floatedto its bondholders, who some $23 billion of junk bond debt, today, says Moody's, have already been taken to the cleaners, is an offer to ex­ the current figure is at least $210 billion, most of it held by change some or all of its $930 million in junk bonds for equity companies acquired in leveraged buyouts. in the losing company. In each of the cases cited, the income available from the The Kohlberg, Kravis story company's current cash flow is not sufficient to maintain The financial press sounded the alarm during the third payments against interest and principal of debt coming due. week of August. The lead in the business section of the New The absurd example of Resorts suffering from lowered gam­ York Times was headlined "Cracks in House That Debt Built," bling income is merely the reflection of what is otherwise and featured the growing insolvency of companies taken over seen in the construction and automobile industry. Sales and through leveraged buyouts engineered by Wall Street's su­ orders are down, because people cannot afford to buy. People perstarbuyout specialist, the firmKohlberg , Kravis Roberts cannot affordto buy because of the continued refusal to create and Company. KKR has engineered some of the biggest LBO productive jobs or pay decent wages. Meanwhile, debt ser­ deals, including the huge RJR Nabisco takeover. Its founding vice obligations have grown past the point at which current partner, Henry Kravis, was finance chairman of George income, from current production of physical wealth, can Bush's New York State campaign committee last year. continue to be supported. With the impending insolvency of SCI Television and Two years after the 1987 crash, one is reminded that two Seaman Furniture, KKR investors are on the verge of absorb­ years after the stock market crash of 1929 came the banking ing big losses. Two other KKR takeover companies will collapse of 1931. The Herbert Hoovers of 60 years ago in­ likely follow suit, and other sensational deals are turning sisted that "the fundamentals are sound," that all that was sour. Deals involving Owens-Illinois and Beatrice Foods are needed was belt-tightening, budget-cutting, and austerity. said to be among them. The New York Times mooted that Overlooked, now as then, is the reality that gutting wealth­ these reversals could result in congressional legislation to production, while increasing outstanding paper obligations, curb junk bonds and LBOs, particularly to revoke interest leads to disaster. deductions for junk bond debt. By then, of course, it will be A Brookings Institution report issued during the third too late. The mickeys who were suckered will be cleaned week of August highlights an aspect of this. The report points out. The banks, and others who extended the credit to finance out an ominous similarity between events leading to the S&L the arrangements, will end up with the equity from the deals. debacle, and the currentsituation with commercial banks. To Middlemen like Kohlberg and Kravis will go the way of the indicate just some of the specifics: 18th-century architect of the South Sea Bubble, John Law. • Almost one-third of all bank assets are held by banks KKR'sunscrupulous machinations are also touched upon. with less than the 6% capital considered the minimum for a In recent years, KKR has put a decreasing proportion of its properly run bank. own funds as risk capital into the buyouts, while tremen­ • Approximately 48 banks with $43 billion in assets dously expanding the use of investors' money and taking out have capital ratios under 3%. The risk-adjusted capital ratios huge fees and service charges. In the past, KKR would em­ of three major banks-Bank of America, Chemical Bank, phasize "restructuring"the takeover companies and manage­ and Manufacturers Hanover-are below 2%. With its signif­ ment streamlining; now, with the debt mountain crushing icant portfolio of troubled domestic loans, Bank of America companies, they engage in unabashed asset-stripping to raise is realistically at or near market value insolvency," says sen­ the cash to frantically cover payments. This has resulted in ior Brookings economist Robert Litan. an increasing number of companies on the brink of insolven­ • Since accounting methods permit banks to overstate cy, with returns to investors tumbling down from the lofty the market value of their assets, the magnitude of bank insol­ levels of 60% or more to 20% and less. vency is much worse. The combined effect of the Japanese withholding of fund­ Resorts International ing, and the beginning collapse of the LBO house of cards, Resorts International, onetime superstar of the gambling are just two of the detonators ticking away on that upcoming casino business, is now verging on bankruptcy. Taken over disaster.

EIR August 25 , 1989 Economics 5 Currency Rates

The doUar in deutschemarks New York late afternoon fixing

1.00

1.90� .- .- Brazils 'day after' � ..- /- � - r-'" � V" 1.80 will be a loUapalooza

1.70 by Lorenzo Carrasco 1.60

6/28 715 711l 7119 7116 812 819 8116 Brazilian President Jose Sarney's administration decided on The dollar in yen June 30 to suspend interestpayments on the foreign debt to New York late afternoon fixing commercial bank creditors. The idea was to ensure that his successor would take officeon March 15, 1990, with about ISO $8 billion in foreign reserves, enough to let him renegotiate the debt from a position of strength. The government's strat­ 140 ""'"'"" " � I"""'" ""'-V-- egy also envisions increasing imports, especially those of 130 capital goods, even though this would reduce the hefty trade surplus.

120 Although the measures are correct, they alone will not solve the country's economic and financial problems. 'Fi­ 110 nance Minister Manson da N6brega is deluding himself if he 6/28 715 711l 7119 7126 812 8/9 8116 thinks he can hold inflation to around 30% monthly for the The British pound in doUars administration's remaining seven months. Current monetary New York late afternoon fixing policies, based on high interest rates, will turn into a hyper­ inflationary explosion like July's in Argentina. In Brazil,

1.90 however, the extreme social inequalities and the discredited state of all the country's institutions will make the conse­ 1.80 quences much worse.

1.70 InBation � In recent years, Brazil's chronic inflationhas been fed by 1.60 -- � ��- two sources. First, the National Treasury has issued growing � volumes of government debt in cruzados so that the central I.SO bank could buy over $ 10 billion a year in dollars earned by 6/28 715 711l 7119 7116 812 819 8116 the trade surplus. It sends those dollars abroad to service the The dollar in Swiss francs foreign debt and make other transfers. New York late anernoon ft,ing Second, refinancingthis critical mass of internaldebt has formed a speculative bubble which is inflating of its own 1.88 accord. This monetary bubble is not in any way backed by

1.70 the production of real goods and services. This cancer is the source of the Brazilian banks' absurd profit levels and the .A. 1.60 , I/" ""- � real driving force of Brazilian .inflation. �r By these means, the Treasury has totally lost controlover 1.50 the generation of credit and cl1rrency. The money it obtains by selling the notes and bills it issues is not channeled into 1.40 the real productive process. Its only use is as collateral for 812 8/9 8116 6128 7/5 7112 7/19 7/26 the overnight money market. The same happens with the issuance of currency, which rises and falls only in order to

6 Economics EIR August 25, 1989 give liquidity to government notes when their bearers want show that financing the debtis a very lucrative business for to cash them. the banking system and the risks are negligible." Thus, the sovereign function of regulation of credit and The government's current tactic of delaying payments on currency was, de facto, given away to the country's biggest the foreign debt will undoubtedly help "cool down" this vi­ private financial institutions, the "market forces" behind the cious cycle of speculation. But it will not stop it fromgrowing specUlative merry-go-round. unless other urgent measures are taken to straighten out the The problem has gotten bigger, because the government national financial system. has been keeping interest rates super-high all year, under the Although it is difficultfor President Samey's government monetarist axiom that that would help lower inflation. But, to attempt a systematic financial reform only seven months as could be expected, it was a colossal failure. From January from the end of his administration, certain steps are impera­ throughJuly , the National Treasury paid 15 billion new cru­ tive to make sure his successor will findthe country in gov­ zados (more than $8 billion) on interest on the internal debt. ernableconditi on. They include: That is 66.31% of all tax collections for the same period. The • Immediately reduce the interest rate to below the infla­ recessive effects of the high interest rates helped undermine tion rate. the tax base. • Place high taxes on windfall bank profits caused by the Merely for refinancing federal debt in bonds and bills way the public debt has been handled. during the firstseven months, the National Treasury sold 75 • Oblige the financial institutions which hold almost the billion new cruzados (NCz) worth of new debt. Of this, NCz entire internaldebt to freeze the due dates on it so as to enable 65 billion ($9 billion) was to roll over principal and NCz 9 the new government to renegotiate the foreign and internal billion (more than $5 billion) was to pay interest and NCz 1 debts on an equitable basis. billion was to cover state-guaranteed foreign debt. If this is not carried out immediately, on the "day after," During the same seven months, the Treasury deficit was as some are calling the period right after the new President's NCz 10. 1 billion, virtually identical to what it had paid in inauguration, the situation he will face will be so bad that he in�st on the government's internal debt. This means the would envy the flames of the inferno. infamous government deficit, the eternal source of bally-hoo in the Brazilian and foreign press, is merely financial. The situation worsened in July, because the real monthly The old monetary system is dead. Put it in the interest rate pegged by the Central Bank was 3.41 % over closet, and open the closet to horrify children inflation. This rate-compared with the 1.97% spread over on Halloween. The question is, how do we build inflation in June-means that, by this means alone, the real the new monetary system? cost of paying interest on the internal public debt was jacked up by 46.6% in a single month. This exponential process The Schiller Institute's could only end up with a horrible hyperinflation. DEVELOPMENT IS THE The biggest bank robbery NAME FOR PEACE

This defective financialand monetary administration pro­ Leaders from around the duced fat profits for the Brazilian private banks, which are, world gathered twice in as we already said, the ones that dominate the entire national 1988 to debate that ques­ monetary process. According to auditors from the Arthur C. tion; this book records the proceedings of the two his­ Andersen Company, the ten largest Brazilian banks piled up toric conferences. Includes 2.7 billion new cruzadosin profitsin the first halfof this year 'The Tasks of Establishing fromtheir governmentdebt portfolios. To have a correct idea an Equitable New World of how big that it, 2.7 billion new cruzados is practically Economic Order," by the what the governmentpaid in interest on that debt in July. first economist to forecast the Bretton Woods sys­ Just those same ten banking institutions hold in their tem's demise and lay out portfolios half the total value of the federal debt in bonds and the program for a new bills, which is currently calculated at 110 billion new cruza­ monetary system-Lyndon dos. The governmentsells all these instruments to the banks, H. laRouche, Jr. and pays high intereston them. The banks use 32 billion new 216 pages. cruzados of this paper as collateral for overnight deposits Make checks payable to: $10.00 made by the general public on which the banks pay interest Ben Franklin Booksellers, Inc. at low rates, generally less than the inflation rate. 27 S. King Street, Leesburg, VA 22075 Shipping: $ t.50 for first book, $.50 for each additional book. ArthurC. Andersen's auditors concluded, "The numbers

EIR August 25, 1989 Economics 7 Economic Survey

Narco-dollars collapse Peru's economy by Mark Sonnenblick

The Republic of Peru is being wiped off the face of the earth. on the narcotics traffickers. Agustin Mantilla, now Peru's Industrial production is more than 40% below last year's interiorminister, came to Washington in late 1985 to ask for levels, with many sectors operating at less than one-fifth of the means to airlift his anti-drug police to make their raids, installed capacity. Food production and consumption have rather than having them bU$hwhack through dense jungle. also fallen drastically, bringing conditions in much of Peru The State Departmenttold him that then-Treasury Secretary down to African levels of human misery . James Baker had vetoed any aid to Peru's war on drugs, on More and more of the country is falling into the hands the grounds that Garcia had to be punished for daring to of Soviet-backed narco-terrorists, who demonstrated their confrontthe international banks. power July 27 by dynamiting 21 electric pylons, knocking George Bush, then serving as head ofthe administration's out the entire nation's electrical grid. Hence, President Alan "war on drugs," must have instructed officials to "j ust say Garcia's State of the Union message the next day could not no" to Peru's pleas for help. It is now recognized, in the be broadcast. The terrorists' impending domination of the United States and in Peru, that the war on drugs in Peru has Andean Spine poses a decisive security challenge to every practically been lost. In this light, the Aug. 13 report by Los country in South America-and to the United States. Angeles police chief DarrylGates that President Bush favors "The Maoist Sendero Luminoso [the Shining Path terror­ a "friendlyinvasion" ofPeruj Colombia, and Bolivia by U.S. ists] is already an important force," Citibank President John troops, illustrates the cynicism with which the administration Reed noted in a May speech to the Business Council. "Mexi­ treats the drug scourge. co and Venezuela are moving along on economic restructur­ When Garcia began defeating the traffickers, Washing­ ing and could rapidly negotiate a reduction of their foreign ton launched economic warfare to make a horrible example debt burden, while Peru has been transformed into the Leba­ of Peru, so thatno other country would dare to challenge the non of Latin America. The country is disintegrating and the usury of the Wall Street banks. The most devastating effect government is incapable of functioning; it is a big tragedy." of this assault was to encourage oligarchic Peruvians to send What has Citibank done to stop the tragedy? "We have elimi­ all the dollars they could get out of the country . nated almost all credits to Peru ," Reed gloated. Garcia, undaunted, fulfilled his commitment to pay Per­ What has the United States government done to stop the u's "immense social debt." Production rose more than 8% tragedy? annually in 1986 and 1987. The average Peruvian's food When Alan Garcia became President on July 28, 1985 , intake rose from 220 pounds to 304 pounds per year. The he courageously launched a two-front battle. He limited ser­ governmentprovided cheap credit and parity prices to stimu­ vicing on Peru's unpayable foreign debt to 10% of export late food production, while. importing what could not be earnings, and he ran the most aggressive war on cocaine produced domestically. traffickers in world history. His Operation Condor blasted to Garcia's economic policies were inadequate to bring bits hundreds of cocaine labs and clandestine airports in the more than short-term alleviation. His Keynesian demand­ wilds of the Peruvian jungle. The traffickers fled into neigh­ pull bonanza invested nothing in solving infrastructure bot­ boring Brazil and Ecuador. tlenecks nor in replacing obsolete industrial equipment. Garcia's appeals for help were denied. The other Ibero­ When the oligarchy of drug money launderers went onto a American countries refused to join his struggle to force new full-scale offensive in August 1987, Garcia-and the econo­ terms on foreign debts needed to ensure their nations' surviv­ my-crumbled. al. The United States turneddown his urgent requests for the After an initial, correct, effort to go for the kill against equipment needed to preserve the gains of his military assault the money-launderers, he surrendered to them, and lost the

8 Economics EIR August 25, 1989 country to them and their terrorist allies. EIR signaled the politicalturning point in April 1988 , when the Garcia govern­ FIGURE 2 ment accepted the out-in-the-open functioning of the Lima Peru's industrial consumption of electricity, black market for dollars. Today, government-owned banks 1988-89 run ads in the newspapers inviting people to bring in their dollars to be bought at the black marketrate , with "no ques­ 30% tions asked." Even the state wants in on money-laundering. 20% Economy Minister Cesar Vasquez Bazan says the central bank is buying $1 billion a year offthe street. The currency 10% it is printing to do that, fuels the 7,000% hyperinflation. IfGarcia was induced to believethe myth that the cocaine 0% tradewas the key to Peru's economic survival, he was dead wrong. That myth is propounded in most "insider" articles -10% about Peru's drug economy. For example, economist Guido -20% Pennano wrote in Lima's La Republica on May 26, "Peru cannot, in the short term, do without the income from the -30% drug traffic. It is against our interest to erradicate narcotics traffic." -40%-I...,..--r_�--r--r---r-�-r--r--�--r-T""" The facts disprove this myth in pragmatic-as well as APR M J J A SON 0 JAN F M 88 89 moral-terms. As EIR warnedlast year, openingup the econ­ omy for the free flowof dollarswould increase capital drain The bar shows the percentage of increase or decrease from the fromthe countryand would help destroythe value to the local same month of the previous year. currency. The facts prove 16th-century English economist Thomas Gresham's dictum: "Badmoney drives out good." Industries show that Peru'sindustrial output rose dramatical­ Toward African levels ly during the period of Garcia's intense confrontation with Graphs prepared by the Peruvian National Society of the internationalbankers , but went into free-fallshortly after he effectively allowed the "free market" to determine foreign exchange and foreign trade. Figure 1 shows one of the world's most extreme boom and bust cycles: Industrythrived FIGURE 1 during 1986 and 1987, but collapsed in the middle of 1988, Peru's industrial production 1983-89 after the President turned toward "free market" economics. 1979= 100 Figure 2 also shows the dramatic turning point around July 1988, when industrial production turnedfrom growth to 160 collapse. If the absolute size of the decline on Figure 2 is 150 slightly less, it is because this graph includes fishmeal pro­ duction, which is up 48%; a certain amount of fixed electrical 140 use by industry; and some increase in "off-the-books" pro­ duction. 130 Did the legal banking system's opening its doors to laun­ 120 dering drug dollars increase its ability to provide credit to the economy? Figure 3 shows bank credit contracting in real 110 terms, to only about one-sixth of what it was a yearago . That is not the whole picture. "There is a huge informal 100 banking sector," a source close to the World Bank reports. 90 These illegal money-laundering operations pay higher inter­ est on deposits than the legal banks, and they charge higher 80 interest. The National Industries Society reports the going rate for working capital is 35-40% monthly. With an esti­ 70 mated inflationof 29% in June, that means real interest rates 6O-+----�----r_---r----�--�----�-- of 6-11% monthly, or 100-250% annually. No legitimate business can operate long at such rates. Peru'snascent indus­ 1983 84 85 86 87 88 89 trial capitalism has been strangled by the drug mafia. Source: The Peruvian Ministry of Industry, Commerce, Tourism and Integration The World Bank-linked source notes that the biggest of Index. This is an index of physical volume, excluding fishmeal, petroleum, and derivatives. these "informalbanks" is runby the oligarchicfo rmer owners

EIR August 25, 1989 Economics 9 of Banco de Credito, and is bigger than all but one of the

FIGURE 3 legal banks. He says, "The government has no alternative" Bank credit to the private sector but to tolerate such totally unregulated money-laundering in constant December 1980 intis houses. This is "the vibrant, Peruvian informal economy" which George Bush praised f()rits "heroism" last year. 450 The World Bank projects a 15-20% decline in Gross Domestic Product this year. The source close to the bank 400 laughed at Garcia's July 28 assertion that "the worst difficult­ ies have been overcome" and that "a growing reactivation of 350 the economy is under way." There is nothing Garcia can do to halt the collapse, the source stressed. "The country needs

300 a new team and that's it." The new team is to be headed by the front-runner in the April 8, 1990 presidential elections, MarioVargas Llosa, who "is willing to rejoin the internation­ 250 al financial community." The source indicated that Vargas Llosa's election would be rewarded by an end to its loan 200 embargo against Peru, even beforePeru cleared up its arrears with thebank. 150 Garciafa ils to propitiate bankers 100 In the middle of last year, Garcia foolishly decided to give priority to rebuilding his bridges to the international

50 ��--��--��--��--��--��--,bankers. The size of Peru 's dollar accounts abroad became the touchstone for economic policy. In those terms, he has M88 J J A SO N D J89 F M A M been quite successful, as shownby Figure 4. Peru was rough­ ly $300million overdrawnon its accounts at the International Monetary Fund and foreign banks until March of this year, when the balance sprung up, going into positive numbers in May. Garcianow says he win bequeath to his successor next FIGURE 4 year more than the $800 million gross reserves with which Net foreign reserves of Peru he entered office.

100 To build reserves, Garcia sharply cut imports and in­ creased exports. As shown in. Figure 5, the trade balance 50 turnedfrom negative to increasingly positive. That was done through classic International Monetary Fund austerity polic- o+-______��

-50

FIGURE 5 -100 Peru's rnonthly trade balance September 1988-Apri l 1989 -150 140 J -200 120 j 100 -250 80

-300 60

40 -350 20 -400 O��.... � ------N D J89 F M A M S 0 -� �----�--_r----�--�----�--�--� S88 o N D J89 F M A The net cash position of the Peruvian Central Reserve Bank in millions of dollars. A negative figure means Peru foreign Monthly exports minus imports in millions of dollars. current liabilities are greater than its assets.

10 Economics EIR August 25, 1989 FIGURE 6 FIGURE 7 Peru's retail sales, 1988-89 Inflation in Peru for the last 12 months 1980= 100 %

140 6000

130

120 5000

110

100 4000

90

80 3000

70

60 2000

50

40 1000

30

2O -r-T���r-���-r���r-T-'-�-r�� O �--��--�--��---r--��---r--�� J88 F M A M J J A SON DJ89 F M J88 J A SON 0 J89 F M A M The Ministry of Industry, Commerce, Tourism, and Integration's index of retail sales at the largest Lima stores, seasonally adjusted. ies, although the IMF still will not give Garcia the time of ing vast cocaine plantations. That idea is shared by New York day, despite illusions he has nurtured since the beginning of bankers and Soviet commissars. Their dream is coming true. 1989 thathe could propitiate his way back into the "financial The area planted in coca bushes in Peru has expanded from community. " 160,000 hectares in 1985 to more than 200,000 hectares. The trade surplus was achieved by attacking the popula­ Most of the new coca plantings are on lands which tion's living standards, as measured by a 61.6% drop in previously produced food . Farmers are being forced from retail sales (Figure 6). This was achieved through a series food into drugs by government austerity policies, since the of economic "shocks" starting in September and November governmenthas cut agricultural credit by 66% in real terms. 1988. Each shock included a massive devaluation, major Parity prices are now gone. Fertilizer usage is down 24.3% price increaseson government services, and the elimination since the shocks began in September. In the jungle area of of food subsidies. Such radical austerity is the standard mon­ San Martin, the cost of growing com or rice soared to triple etarist recipe for "fighting inflation." But, Figure 7 shows the price paid for it; farmers simply planted coca. how it was precisely such monetarism that sent Peru from Also, the narco-terrorists have forced hundreds of thou­ inflation into economic implosion and hyperinflation. Prices sands of peasants to abandon their fields and flee to the canbe expected to be 70 times higher on Dec. 31 than they cities. They are systematically exterminating agricultural wereJa n. 1. extension experts and anybody in rural areas who represents Anyone walking in the streets of Lima can see the anxiety or supports the republic. Early this year, the Shining Path written on the faces of workers whose wages remain frozen, guerrillas moved into Lima's Andean garden, the fertile while prices risein tandem with the black market dollar. Mantaro Valley, and ordered peasants not to plant any food for the cities. In the semi-tropical Chanchamayo Valley east Narco-economy ravages food supply of the Andes, fruit trees and rice fields have been abandoned A decade ago, EIR published an issue headlined "The and replanted in coca. The collapsing productive economy World Bank Pushes Drugs," in which various bankers were has made millions of Peruvians willing to survive as slaves quoted saying that Bolivia, Colombia, and Peru could pay to the drug traffickers and willing to tolerate the increasing theirdebts by following their "natural" vocations and becom- power of the narco-terrorist hordes.

EIR August 25, 1989 Economics 11 Agriculture ministry figures indicate a 20% drop in do­ have fallen dramatically. Production of radios and televi­ mestic production. Food imports have been cut and food sions, leather shoes, metal products, fertilizer and pesticides, exports increased. Observers in Lima reportthat families are and of cars and other vehicles, is practically paralyzed. It is eating at least 40% less than last August. Meat has almost estimated that in May, these sectors used the following levels disappeared from middle-class tables. At a basic wage of of installed capacity: 7.0%; 9.7%, 1 1.0%, 12.7%, 13.5% $32 a month, workers can scarcely afford even rice and Unemployment: From August 1988 to March 1989, the potatoes. The per capita food intake is far below the 2, 500 central bank's industrial employment index fell 11.1%. The calorie average which EIR calculated in 198 5, and millions August 1988 index was already 8.7% below the January 1980 more have been thrown into concentration-camp nutrition level. levels. A study in March found 40-50% of children in the The crisis which affects the industrial sector has had re­ poor belt around Lima suffering chronic malnutrition. A few percussions on the quantity of labor power utilized; small years ago, 90 out of each 1, 000 children died in their first companies are the most affected. Employment indices from year. The death rate is probably over 120 now, worse than officialsour ces, as well as those calculated by the lEES based that recorded for Haiti. on a survey, come up with a sharp contraction in the level of This is the tragedy Citibank's John Reed enjoys, the manpower utilization in the sector. horrible example Kissinger's friends are making of a debtor Heavy unemployment is also being generated in the com­ country which once tried to change their usury system. mercial sector; 9.0% fewer people were employed in com­ merce in May than in the same month of the previous year. Temporary workers suffer�d the most. There were 19.5% fewer of them occupied in commerce in May than in April Documentation 1988. Sales: The reduction in production directly originated in the fall in sales. Contraction in demand-an effect of the 'We are almost current hyperinflation-has brought stocked inventories of factories and of stores to above normal levels. hittinghottom' Retail sales have been falling continuously. The vice­ minister of commerce indicated that in May of this year, The Economic and Social Studies Institute (lEES) of Peru's sales were 61.6% lower than in the same month of the previ­ National Society of Industries produced a study fo r the ous year [emphasis added]. monthly journal Industria Peruana, published in the July is­ The sector most affected was home appliances, whose sue. The cold figures and graphs show the stark reality of sales fell 82.5% in May; even more, these sales were86.3% economic collapse. Excerptsfo llow: less than those of 1980. The sales which are falling the least are those of home Production: National economic activity is submerged in furnishings and food . In May, they fell "only" 31.0% and deep recession. During this year's first quarter, the Gross 36.4% compared to the same month of 1988. Domestic Product fell 22%. Industrial activity contracted Food sales in the firstfive months of this year were 0.2% 41.3%. In both cases, this is in respect to the same period of greater than those of 1980, while the Peruvian population 1988. Industrial production refers to the physical volume has grown 26.0% in these nine years . Even worse is the case index of the Ministry of Industry, Commerce, Tourism, and of clothing sales, which were 55.2% below 1980 during the Integration, which excludes fishmeal and petroleum deri­ first five months of this year. This clearly depicts the reduc­ vates [emphasis added]. tion of the quality of life of the inhabitants of our country. May's industrial activity level was below that of any We are a badly fed and worse clothed country. month in 1983, a year of landslides in the center, floods in Parallel to the fall in total·sales, sales on credit, which the north, and drought in the south. On the contrary, so far aretraditionally low in our c(;mntry, have almost disappeared. in 1988, we have not had these natural catastrophes. In May, only 4.2% of total sales were on credit .... The tendency for the next months, reflectedin the moving Inflation: ... Annualized inflation (for the past 12 average, the arithmetic average of the last 12 months' pro­ months) went from 356% in August 1988 to 817% in Septem­ duction index, is for a continued downward fall. However, ber 1988, reaching 6, 126% in June of this year. Inflationhas although it is clear that production will decrease, the current averaged 41.6% monthly during the firstfive months of 1989, rate of fall cannot be maintained much longer. given a 29% estimate for June. That is carrying the country Current production levels are so low that we are almost toward an inflation of apprqximately 6,000% in 1989. This hitting bottom, "dangerously close." So close, that many hyperinflation has eroded workers' incomes, decapitalized companies could be reaching the point of no return, which companies, whether in indu$try, trade , or any other produc­ would be a generalized shutdown. tive activity, which is bringing a stagnation never before In many industrial sectors, capacity utilization levels known in our country.

12 Economics EIR August 25, 1989 Banking by John Hoefle

Bush thrift bill reeks of fascism penalty, restitution, or forfeiture in­ The enforcement section of this bill would make even the Soviet volved, up to $100,000. The bill requires public disclosure KGB turn green with envy. of enforcement actions, except where the regulatory agency decides such disclosure "would seriously threaten the safety or soundness of an insured T he new savings and loan "bailout" per day for a bank, thrift, or credit depository institution, such agency bill which passed the House and Sen­ union. Generally, the maximum may delay the publication of such or­ ate on Aug. 4 takes the nation a step amount of the civil penalty shall not der for a reasonable time." closer toward a police state , under the exceed $1 million, but in the case of A procedure is established in which guise of "fighting fraud." The Finan­ continuing violations, the amount may the deposit insurance at a particular cial Institutions Reform, Recovery, not exceed the lesser of $1 million per institution can be terminated on the and Enforcement Act of 1989 pro­ day or $5 million. In the case where a grounds of "unsafe or unsound" prac­ vides $225 million over the next three "person derives pecuniary gain from tices or conditions, or if the institution years to fund Department of Justice the violation, or if the violation results has violated any law, regulation, or­ operations against the S&Ls, plus an in pecuniary loss to a person other than der, written condition, or written additional $30 million for the federal the violator, the amount of the civil agreement with the regulators. The of­ courts. It mandates that the DoJ set up penalty may exceed the amounts de­ fending institution will be given a a regional fraud officein the Northern scribed . . . but may not exceed the minimum of 30 days notice of a ter­ District of Texas, and compels the amount of such gain or loss." mination hearing; if terminated, the ComptrollerGeneral to study whether The maximum criminal penalty institution will be given from six fraud offices need to be established in has been raised to a $1 million fineand months to two years , before the insur­ other parts of the country . 20 years in prison, per violation. ance is actually stopped. There is also The fact that the bill is in reality an The bill substantially exempts the a provision for temporary suspension instrument for political targeting, is Federal Reserve, the Resolution Trust of insurance. Temporary suspension apparent by the vagueness with which Corp., the Federal Housing Finance of insurance can occur afterthe notice it defines the "crimes" it establishes. Board, and the regional Federal Home of intent to terminate insurance has To be guilty, one need merely be an Loan Banks , from the Privacy Act of been given, ifthe bank has no tangible "institution-affiliated party" who 1978, giving them more powerto poke capital under the regulatory guide­ "causes or is likely to cause [!] more around in the financial affairs of bank lines. In such case, the FDIC "may than a minimal loss" to said institu­ customers, while providing stiff pen­ issue a temporary order suspending tion. Federal regulators also have the alties for any "institution-affiliated deposit insurance on all deposits re­ power to bar an individual from bank­ party" who informs the customer that ceived by the institution." ing for life. his records are being probed. The statute of limitations on finan­ The regulators now have the pow­ The bill is effective immediately cial institution offenses is set at 10 er to decide who can be appointed di­ upon signing, but some of the civil years. The new law will apply to of­ rectors or senior executives at any bank fines mayapply to previous conduct, fenses committed before the effective which 1) has been chartered less than if the one being penalized has not yet date of the law, if the statute of limi­ two years; 2) has undergone a change been officially notified, or if the act tations previously applicable had not of control within two years; or 3) is occurred after the last federal exami­ run out. not in compliance with the minimum nation of the institution. Finally, the bill makes "financial capital requirements, or is otherwise The bill includes protection for institution fraud" a violation of the no­ troubled. whistle-blowers who report alleged torious RICO Act, meaning that virc The maximum civil fine that may misdeeds by depository institutions or tually anyone indicted under this out­ be assessed by fe deral regulators has institution-affiliated parties, and sets rageous law is subject to immediate been raised to $1 million per day per up a reward for cases where the amount seizure of personal assets, and every­ violation for an individual, or the less­ involved exceeds $50,000. The re­ thing else in RICO's police-state bag er of $1 million or 1% of total assets ward is 25% of the amount of the fine, of tricks.

EIR August 25, 1989 Economics 13 AgricUlture by Robert L. Baker

World grain stocks down 30% pluses which have been driving down The USDA 's latest worldfood production fo recast buries the grain prices; with shortages beginning to appear, the prices are still going department's own myth of "overproduction." down. Consumers are waking up to the fact that foodprices are going up, part- After various grain accounting ex­ will fall again for the third year in a 1y because of short supplies, but most­ perts of the U.S. Department of Ag­ row. ly because of the unprecedented con­ riculture gathered for what is known U.S. wheat stocks are expected to solidation of the retail food industry. as the "lock-up," the latest USDA crop fall to 374 million bushels, the lowest Russia and Communist China are fac­ production report was releasedon Aug. point since 1973 and only 16% of an­ ing mass strikes and riots because of 10. According to the report, poorworld nual usage. Just three years ago, the shortages offood, at a time when their agricultural production will once again U.S. stock of wheat was 1,904 million largest supplier, the United States, is drive grain stocks to even more dan­ bushels. This is a forecast drop of 80% watching its supplies rapidly decline. gerously low levels. in three years. The food crisis in Africa, lbero-Amer­ The USDA's "World Agricultural Ending com stocks are expected ica, and Eastern Europe is also wors­ Supply and Demand Estimates" re­ to be 68% below 1986 ending stock ening. And Secretary of Agriculture ports that global production of grains levels at 1. 68 1 billion bushels. Com Clayton Yeutter and the other Bush is projected to be 25 million metric exports for 1989-90 were raised 50 administration food policymakers , tons lower than total world consump­ million bushels. know they are sitting on a bomb about tion for 1989-90. This is the fourth The United States is now the to explode, as the shortage becomes consecutive year that world produc­ world's largest importer of oats, and so apparent, that even they cannot ma­ tion of grain will not meet total needs. is projected to produce only 92% of nipulate and hide it. World grain ending stocks are pro­ total needs for 1990 . In the coming months, food and jected to decrease by 30% , going from Higher U.S. soybean production grain will become tools of battle in the 404 million metric tons (mmt) in 1987 is forecast, compared to last year's international political arena. The to a projected 280 mmt in 1990. drought conditions; however, U.S. charitable West German organization Ending stocks for 1990 are fore­ ending stocks will be one ofthe lowest World Hunger Aid announced in cast to be fewer than the 17% stocks­ in recent history. According to EIR 's Bonn, Aug. 16, that large-scale So­ to-use ratio recommended by the estimates, the U.S. could very well viet sugar and grain purchases are United Nations Foreign Agricultural run completely out of soybeans before driving prices higher and threatening Service (part of the Food and Agricul­ the new crop is harvested. the viability of Third World food aid ture Organization) as the minimum One major factor for tightened programs. neccesary to guarantee a strategically world supplies is the U.S.S.R., with Meanwhile, the European sugar secure food reserve. a 10 million ton reduction in projected market has been "swept clean" by So­ Major grain crops such as wheat, grain output for 1989-90, to 200 mil­ viet buying, and no sugar deliveries com, and other coarse grains are pro­ lion tons, and a 3 million ton increase are available for the organization'S jected to show draw-downs in world in forecast imports , to 36 million tons. Sudan refugee program until October reserve stocks from 1987 through 1990 Recently released Soviet grain area "at the earliest," the organization said. of 31%, 47% , and 40% , respectively. statistics were well below expecta­ The organization expressed fears WorId oilseed productionfor 1989- tion, and hot, dry, conditions have that grain and milk powder prices will 90 is projected at a 214.7 million tons, dramatically reduced potential yields also soonbe driven up by demand from up 7% from last year. of spring grains in the U.S.S.R. the U.S.S.R. and other Eastern Euro­ As for the United States, the fore­ This latest analysis has many pean countries. "World grain stocks cast 1989-90 U.S. feed grain produc­ around the world nervous. U.S. farm­ are now at minimum reserve levels, tion is 46% above the drought-re­ ers are getting more and more upset, and even if world production is in­ duced 1988-89 crop. However, due to as they are no longer fooled by the lie, creased [in 1989-90], higher demand increased export demand and domes­ promoted by the USDA and the inter­ is likely to lead to increased prices," it tic use, U.S. ending stocks of all grains national grain cartels, that it is sur- said.

14 Economics EIR August 25, 1989 Energy Insider by William Engdahl

The remarkable influence of Big Oil today, following two such "oil Thirtypercent of the U.S. fo reign trade deficit comesfrom oil shocks," the U.S. has again increased imports, to almost 50% of consump­ imports-why, then, is Washington silent? tion, is testament to the political pow­ er of Big Oil in the U.S. Establish­ ment. Something caught my eye while I claims to have been an independent Also, notice that deliberate ne­ was reviewing the grim statistics on oil producer. Obviously, we see only glect has ensured the collapse of in­ the collapse of the U.S. domestic oil the tip of a very oily iceberg. dependent domestic oil production. drilling industry.Familiar with the in­ U. S. government foreign policy EPA "clean air" regulations have dustryin its "boom" yearsof the 1970s, has had an incestuous relation to "Big sealed the doom of some 30,000 in­ I knew what it meant when reports of Oil" since well before the 1944 report dependent gasoline retailers across the Hughes drilling rigs in operation to the government's Petroleum country. Oil, as never before in U.S. showed lows of activity not seen since Administration for War by Texas oil history, is controlled by supranational the Great Depression. But what really geologist Everette DeGolyer. De­ companies which have little national struck me, is who is benefiting from Golyer, reporting on his technical concern. Now, with the hysteria fol­ this situation-and who is silent on it. mission to the Middle East, told lowing the Alaska Exxon Valdez oil This year, the United States will Washington, "The center of gravity of spill forcing the most promising do­ import a considerable amount of crude world oil production is shifting from mestic new oil exploration off limits oil, still the nation's largest source of the Gulf-Caribbean area to the Middle in Alaska, the prospect of even greater primary energy. According to the East-to the Persian Gulf area." import dependence is growing by the semi-annual forecast of the Indepen­ By 1950, Washington had made a hour. dent Petroleum Producers of Ameri­ secret deal with the oil multinationals Who will benefit in this situation? ca, the United States, the world's larg­ to allow them to avoid paying taxes on Could it bethe Russians, who are ma­ est consumer of oil, will increase net their huge earnings from Mideast oil nipulating Washington's stupidity in oil imports by a hefty 15% in 1989. In sales. Their manipulated "royalty" the Middle East to gain control over 1988 they increased by 8%, and daily payments to Arab oil states were al­ Iran as well as maintain influence in imports of crude oil and refinedprod­ lowed as a substitute for U.S. taxes. Iraq? Could it be British Petroleum ucts will now run an expected 8 mil­ Only during the 1956 Suez Crisis did and its sisterRoyal Dutch Shell, widely lion barrelsper day of the nation's dai­ details of this cozy arrangement even regarded as the world's shrewdest oil ly consumption of 17.5 million. Total leak into the pUblic. multis? They are investing billions in domestic production of oil and natural Texaco, Gulf, Mobil, SoCal the North Sea, and leading the return gas liquids will run about 9.4 million (Chevron), and Exxon became an un­ to Libya. Their light, low-sulfur crude bpd. This means some 46% of total officialarm of the State Department­ is the oil most in demand in the United U.S. petroleum consumption is now even sometimes the other way around. States, for environmental and effi­ fromimports . As recently as 1985, oil Wall Street lawyer John McCloy, ciency reasons. Or could it be Saudi imports were only 4.3 million bpd. chairman of Chase Manhattan, was Arabia, which, according to one esti­ Isn't it strange, when Washington arbiter of U.S. policy in the Middle mate, sits with 60 million barrels of is presumably preoccupied with the East during the Eisenhower years. It oil in "floating storage" in the Carib­ alarming $140 billion U.S. foreign all seemed to work. So long as energy bean, waiting to dump it on U.S. mar­ trade deficit, that no one touches the was cheap, no one paid much atten­ kets at any time? sacrosanct subject of oil imports? A tion. Clearly, there is a need to treat whopping 30% of U.S. trade deficit By 1973, when certain Anglo­ national energy production with tax now comes from oil imports. The U.S. American financialbigs meeting at the and other inducements to reduce the paid multinationals $38 billion in 1988 estate of Sweden's Marcus Wallen­ exposure to new "oil shocks." But be­ to import that oil. berg, decided to trigger their "oil yond this, the Bush administration has Concern is conspicuously absent shock" and raise world prices by yet to make good on its promise of in Washington, despite a President 400%, the United States had increased revitalizing nuclear energy, the most who prides himself on being a former its import dependence to a considera­ obvious candidate to reduce depen­ oilman, and a commerce secretary who ble 36% of total demand. The fact that dence on imported energy.

EIR August 25, 1989 Economics 15 Business Briefs

Soviet Economy Health tion inrtation, underscoring Fed chairman Alan Greenspan's recent report to Congress East Germans pay AIDS costs overwhelm of his ¢oncern that the greatest danger is recession, not inflation. for Soviet strikes public hospitals

East Germany is paying a high economic The cost of caring for AIDS patients is over­ price for the dubious honor of remainingthe whelming U.S. urbanpublic hospitals, which Mark�ts favorite pet of Moscow, according to sources have to treat a high percentage of AIDS vic­ I this news service talked to on Aug. 17. The tims, researchers from the National Public Computer trading Soviet Union is turning more and more to Health and Hospital Institute in Washing­ the East Germans to fill in for gaps left by ton, D.C. announced on Aug. 10. und�rscores instability the economic collapse in the Soviet and oth­ While the average cost for in-patient care of an AIDS victim is $68 1 a day, the average er East bloc economies. East Germans, one "The significance of the return of computer source reported , fear they'll have a shortage revenue the hospital receives for such care prograqttrading on Wall Street underscores of coal this winter, because their coal mines has been just $545 a day. Researcher Vir­ the ins�bility of the markets," City of Lon­ have to compensate for the reduced coal pro­ ginia Weslowski stated, "These hospitals are don banking sources told EIR on Aug. 15. duction in the Ukraine and Siberia caused losing large amounts of money. It's eating Pro$Tam trading is a sophisticated meth­ by the recent miners' strikes. into their bottom line. This will overwhelm od of computerized "arbitrage" between Increaseddemands for high-quality tex­ the hospitals and hurt the quality of carefor prices of. typically, the Chicago Major Mar­ tiles, micro-computers, and other urgently the other patients. " ket Index. Because margins for MMI futures required consumer and capital goods have are only 2.8%, it is possible for large Wall put immense pressure on the East German Street brokerages to shift huge volumes of economy. This has created a broad and stocks very quickly, exaggerating actual growing sentiment against the Communist market prices with virtually no risk of loss. regime and the Soviet Union among workers "If you want to manipulate the market in the factories, and many of the German 'The Recovery' short term, and touch off program buying refugees heading for the West these days are and semng, the easiest way to do it is with skilled young workers from such factories. Fe d study shows the Major Market Index," reports one New The ruling SED party itself is in deep trou­ U.s. output falling York trader. "At some time, this thing is ble, trying to balance out the unrest among going to explode in people's faces." workers and the need to meet Soviet require­ Wall Street voluntarily suspended the ments for supply. The Federal Reserve issued its "Beige" re­ controversial practice afterthe stock market There is even evidence of a broader trend port on Aug. 9, released every six weeks crash of October 1987, but traders report of covert low-intensity obstruction of the before the Federal Open Market Committee that it has increasingly come back into play, production process in East German facto­ meeting, which showed what the Financial with the. recent huge New York stock market ries. Workers whose factories are deprived Times of London termed the "most gloomy rise sinqethe early summer. of spareparts or industrial components which assessment of the U. S. economy for two are not delivered in time due to failures at years." some other place, often get reassigned to The report shows that the economy is other make-work, such as painting and ren­ indeed slowing down, with output falling in ovating production halls. Often, workers get some sectors , most notably in the northern International Trade reassigned to jobs outside their own plants. heavy manufacturing areas, and especially Doing this unpopular substitute work has in auto, steel, electronics, and machine tools. Colombia protests increasingly turned into a form demonstra­ Half of New England manufacturers report­ tion or protest: When the delayed supply of ed flat sales, as did a third of those in Phila­ unfair practices components and spare parts finally arrives, delphia. Sales were weak in home furnish­ no one is there to unload them or to work on ings, electronics, and appliances. Most Fed­ Banacol, Colombia's banana company, them. Workers stubbornly continue to do eral Reserve districts report that retailers are charged that United Brands, formerly the their substitute work, or are simply not reducing their orders for the remainder of United Fruit Company, was trying to drive available in time . the year, as inventories remained high or Banacol out of business and take over Col­ In response, the SED has been more fre­ increased. ombia's banana industry, at a recent meet­ quently summoning plant directors to party Even though mortgage rates are going ing of representatives of 25 producing and meetings to testify on "problems" and re­ down, housing construction is at best stag­ consuming nations. ceive ideological reminders on their "so­ nant, and down sharply in the Northeast. Uni1!ed Brands, said Banacol, was pay­ cialist duties. " The report summary does not even men- ing excessive prices for banana-growing

16 Economics EIR August 25 , 1989 Briefly

• admitted, lands; paying producers excessive prices for ricultural imports, as it has done on finished PRESIDENT BUSH "We're in a period of hard times," bananas, thus denying Banacol its product; goods. during an Aug. 15 press conference, and using its international muscle to sabo­ Venezuelan Senate Agriculture Com­ when asked whether reallocating re­ tage Banacol's efforts at independent mar­ mittee chairman Pedro Pablo Aguilar re­ sources for the war on drugs would keting in Europe. sponded Aug. 6, "It is hard to understand why [Venezuela] accepted, in its negotia­ mean hard times for the military or tions with the IMF, measures that are de­ other social programs. "We don't stroying our agricultural production capac­ have all the money that we would like to spend in several areas ." ity, unless we accept going back to being a BlackEconomy mining country obliged to buy from abroad • is resurfacing, the our food and the vegetable raw materials MALARIA World Health Organization warned required by our industry. It is understanda­ India biggest drug Aug. There are now more than ble that the IMF and the World Bank wanted II. million new cases each year. transshipment center to help the U.S. and Europe in their trade 100 Cases are up 30% in sub-Saharan Af­ policies of selling agricultural surpluses, but rica since last year, and have tripled there is no justification for our accepting. " There are now 68,518 heroin addicts in the in Central and South America in the city of Calcutta, India, the Minister of State past decade. for Welfare, Mrs. Rajendra Kumari Bajpai, told the Indian Parliament the week of Aug. • THE MEDELLIN, Colombia­ 1, the Hindustan Times reported. The Times Infra structure based Banco de Occidente pleaded said in its editorial that India is now the gUilty to laundering up to $400 mil­ biggest drug transshipment center of the Kra canal boosted at lion in cocaine money of the Medellin world, with 37% of world heroin routed Cartel in a U.S. court Aug. 14, and through its territory. Thai Defense College agreed to pay a $5 million fine. The In 1988, some 80% of that heroin came laundering was alleged to have taken through the Indo-Pakistani border, but the The proposed construction of a canal across place through the branch of the bank last six months have also seen an unprece­ Thailand's Isthmus of Kra is a project ca­ located in Panama City. dented increase from the Golden Triangle pable of creating a revolution in Thailand region of Southeast Asia. The Narcotic and enhancing its role in maritime transpor­ • NEW TIMES, a Soviet weekly, Times Control Bureau, the wrote, has only tation, Dr. Boonrod Binson, president of the endorsed euthanasia for the elderly 106 officials to deal with the drug menace, Administration Council of Chulalongkorn and for AIDS victims in two August with only 10 officials to oversee the 11 re­ University, said on Aug. 14. He was ad­ articles: "It is absurd to tell a lonely gions in the northeast and east, where the dressing the Kra Canal subcommittee of the woman of 88 or so, suffering, suffer­ new influxof heroin is coming from. government's Strategic Committee, at the ing from open fractures [she cannot Heroin addiction is also a scourge in National Defense College of Thailand Aug. die] . The doctors would be only too Times Bangladesh, the reported July 29. 14. The college is attempting to accelerate glad to terminate her suffering .... There are ilt least 100,000 addicts in the the canal project. But euthanasia is not provided for by northernregions-not including Dhaka and The Kra Canal concept has been vigor­ law." other cities. Crime is becoming a very seri­ ously promoted by Lyndon LaRouche, EIR , ous problem, with 80% of crimes now being and the Fusion Energy Foundation for many • CHINTER, is the name ofa new committed by addicts desperate for drugs. years, and bitterly opposed by monetarist Red Chinese state-owned company financial circles typified by Henry Kissin­ based in Brussels to encourage Eu­ ger, who personally intervened to block the ropean companies to set up factories project. in China. The deal includes a ready­ "I have stopped contemplating whether made factory, land, and a limitless Free Trade the project is financiallyprofitable or not for supply of cheap and disciplined la­ a long time, because for me , I am convinced bor-provided by convicts. Venezuela agriculture that it is. The Kra Canal is a very special submits to IMF diktat one. It has the power to generate further • WANG LABS announced on Aug wealth and therefore , considerations must 16. that it will default on nearly $1 go beyond normal cost-benefit analysis," Dr. billion in debt, while continuing dis­ The daily Diario de Caracas reported Aug. Binson said. cussions with its bankers for better 4 that the World Bank was conditioning the The rest of the meeting was spent dis­ terms. The day of the announcement, disbursement of the second part of a $353 cussing how to take studies further and what Wang's stock fell 8% in value, with million loan, approved June 13, on Vene­ organizing activities should take place in its bonds trading at only 50% of par. zuela reducing tariffs and restrictions on ag- order to push the project ahead.

ElK August 25, 1989 Economics 17 ITillScience & Technology

Are high-voltage power lines a threat?

Janet G. We st reviews the evidence on the latest target qfhysterta Jro m environmentalists, and concludes that the problems-ifthey exist­ can easily be solved.

Today, we are increasingly besieged by strident warningsof Rorida Environmental Regulatory Commission came after destruction of the Earth and its environment-air pollution, four years of study by various state commissions and chemical and other hazardous waste, the hoax of the "ozone followed a public hearing in Tampa on Jan. 18.1 The regula­ layer depletion," and others. tions became effective Feb. 17, and are applicable only to The greenies have insisted there are too many people, lines already under construction or in the planning stages. and that nuclear energy is dangerous, either because it causes It is the estimate of the Rorida Department of Environ­ cancer, or attracts terrorists. Now we are hearing similar mental Regulation that the new rules will "add $100 million warnings that high-voltage power transmission lines may to $5 billion to the cost of 500kilovolt (kV) lines over the next pose a mortal threat to humans. These lines have become the 30 years." In that time period,Rorida will have 330 miles of subject of numerous studies, some suggesting an association 500kV lines under construction,and another 4, 000 miles of between long-teonexposure to the electromagnetic fields(60 230 kV lines are being considered forconstruction. One line Hz) produced by the lines, and the incidence of cancer. But alone, a 500 kV line spanning the 146 miles from northern other studies have suggested that no such correlationexists. Palm Beach County to North Dade County, is estimated to At the present time, high voltage alternatingcurrent (AC) cost a total of about $1 million a mile. Construction will not lines arebecoming the backbone oflong distance power deliv­ even begin until opposition groups complete all appeals. ery systems in the United States: They arestable and reliable, Is there a real threat to human or animal life from these they use less space than lower voltage lines, and their loss of lines? The response of a spokeswoman for the state's largest power through heat is about 5% per 1,000 km. electric utility, Rorida Power and Light, makes clear that One should bear in mind that were it not for the actions of the real issue is not potentially adverse biological effects: the environmentalists whose persistent threats, legal actions, The rule is a reasonable compromise. . . . Obvi­ and outright terrorism have worked to halt construction of ously, it has some costs involved, but in light of all nuclear power or hydroelectric plants near population centers, the political pressure for the state to set some kind of it would not even be necessary to transport energy over great standard, [it] attempted to balance-with no scientific distances, because power plants would be already located near evidence of the need of a standard-the economic major cities. impact with the emotional concerns.2 The Florida case In the past year, Rorida became the first state in the Your toaster may be more dangerous nation to adopt emission standards for electromagnetic fields Numerous studies have investigated the biochemical generated by high-voltage electricity lines. This move by the changes that occur in a wide variety of species-both plant

18 Science & Technology EIR August 25, 1989 irrelevant. "Two forces are at work in these matters: emo­ tionalism, and innumeracy," he explains. Clustering itself is not unusual, but should be expected. "Clusters of illness occur because of statistical variation, and in fact they Lying with statistics occurred even before there was industrialized society," Payne states. In an article entitled "Lies and Statistics" in the March "Take the situation where two cases of leukemia are 1969 issue of Nuclear News magazine, author Jon Payne expected in a population in 10 years. If just one case presents the truth about how statistics about clusters of occurs, the public yawns and turns itsattention elsewhere; illness around nuclearpower plants have been manipulat­ if there are three cases, the nearest industrial facility is ed to fuel fears of radiation. blamed. In most instances, these are normal variations In the real world, he reports, studies exist that show a around the expected, but many people remain unaware "moderate excess above the expected in the number of of this. Consequently, this is fertile ground for planting leukemia cases" near a particular nuclear plant. However, claims that a nuclear plant is the source of the illness. there are other geographical locations in the vicinity of "In fact, you can guarantee variations from the expect­ other plants wherethere exists a "moderate deficiency"of ed by looking at smaller and smaller subsets of data," he such cases. points out. "In most of the instances we are talking about, ''The most reasonableconclusion should be that prob­ the radiation releases are so small they are lost in the noise ably the nuclear facilities were not the cause of either the of variation in Mother Nature's background radiation." excess or the deficiency." If you conclude, he explains, Mr. Payne's article is clear proof that rigorous scien­ that the findings ofone are accurate, then you also have tific study has clearly not been one of the methods used to explain the findings of the other case. "Unfortunately, by those posing as the protectors of humanity who have a reasonableconclusions arenot always drawn in such situa­ vested interest in stopping nuclear power, transmission tions," Payne observes.Most often, the clusters of disease line construction, or other industrial projects. are considered to be relevant, and the lack of clusters, -Marsha Freeman

and animal-when subjected to electromagnetic fieldsof the transmission lines which should be emphasized. The sortproduced by high-voltage transmission lines. Many ex­ firstof these differences concerns the sensitivity to the periments,however, have not been successfully repeated; current flowing inthe lines. Once a power transmission even when effects aredemonstrated-such as reduced honey line is raised to its operating voltage, the amplitudes production in apiaries-no one yet knows what health risks, of the electric fieldsproduced by the line are essentially if any; are posedto human beings. A study prepared for the independent of the currents flowing in the conductors Office of Technology Assessmene points out that electro­ comprising the line. On the other hand, the magnetic magnetic fieldeffects may existin common home appliances: fields produced by the line depend primarily on the High-voltage transmission lines may be the least of your currents flowingin the conductors, and not on the line worries,and you may instead eye that toaster or electric voltage. blanket with a bit more caution. (See Figures 1-3.) Thus a specification of line voltage alone is inade­ One ofthe firstin-depth studies ofthe effects ofextra- high quate to define the magnetic field levels that a particu­ voltage transmissionlines was conducted under the New York lar line is likely to produce. State Power Lines Project in 1987. The study was undertaken Another important difference concerns the direc­ to answer opposition to a line to facilitate importing cheap tions of the fields. The electric fields on the ground be­ hydroelectric power from Canada. The line would have neath an overhead power transmission line arenece ssar­ formed a ringtying all of the state's systems together, thereby ily very nearly vertical at all times, whereas the magnet­ allowing New York State to eliminate the use of oil for its ic fields on the ground are largely confined to planes power generation. (See Figures 4-7.) The New York State perpendicular to the lines (althOUgh there can be a small study was one of the firstto specify whether they were measur­ component parallel to the lines), where, due to the phase ing effects fromelectric or magnetic fields,and cautioned that differencesof the currentsflowing in the individual line conductors, the horizontal and vertical components There are important general differences between combine to give a total magnetic fieldvector that rotates the electric and magnetic fields produced by power at the power line frequency . . . in general the magnetic

EIR August 25, 1989 Science & Technology 19 FIGURE 1 FIGURE 2 Magnetic fields of representative Power frequency electric fields low-power electrical appliances near electrical appliances

Distance Magnetic field Electric field Appliance (cm) (I..lTesla) Appliance (VIm)

Welders 50 1,000 Electric blanket 250 Soldering gun Contact 1,000 Broiler 130 Arc furnace 200 300 Stereo 90 Wall clock 5 300 Refrigerator 60 Alarm clock #1 Contact 300 Toaster 40 Massager 5 200 Color television 30 Fluorescent light 5 200 Incandescent light bulb 2 Teakettle Contact 30 ' All measurements were made at a distance of 30 cm from the Heating pad Contact 17 device. Data from Miller (1974). Razor Contact 10 Alarm clock #2 2 10 Television 25 Source: Biologice/ Effectsof Transmission Une Fie/ds, by Edwin L. carstensen. Measurements were made with a meter manufactured by the Electric Field Measuring Company, West Stockbridge, Massachusetts. The diameter of the measuring coil was approximately 10 cm. With the exception of the electric razor, tumor cell surface antigens. The observation that nor­ all of the measured magnetic fields were nearly pure 60 Hz. The mal cells did not grow in soft agar is consistent with razor had a rich sp ectrum of higher frequencies. The welder the conclusion that exposure to the fields did not cause andfurnace data are from L6vsund (1984). cells to become cancerous. The observations with the cancer cells, however, suggested to the investigators the possibility that mag­ Source: Biological Effects of Transmission Une Fie/ds, by Edwin L. Carstensen. netic fields stimulate the rate of cancer cell growth. Even if this observation were confirmed, however, ex­ trapolation to the behavior of cancer cells in humans is not justified,because behavior of cells in softagar is not fluxdensity vector near the ground rotates in an ellipse predictive of their behaviorin the whole organism. . . . with highly variable characteristics. . . . [T]here is no basis to extrapolate between growth of cells which are already malignant and initiation or pro­ motion of cancer in the whole organism. With respect to biological, genetic, and cancerous changes, the authors concluded: In the end, the New York Public ServiceCommission was No effects were found on reproduction, growth or unable to come to a conclusion about whether biological haz­ development. Several studies showed no evidence of ardsdid exist, but the line was 'IIot built. The cheap electricity genetic or chromosomal damage that might lead to that this line would have provided, would have prevented the inherited effects or cause cancer. While most measure­ death fromexposure of elderly citizens who lacked adequate ments of behavior and brain function did not demon­ heat in winter or air conditioning in summer. The rise of such strate changes, some did show changes that were small deaths is especially marked in the larger cities of North but consistent. . . . Some of these appear to result America that are already experiencing brownouts and black­ from changes in body rhythms, and might interfere . outs for lack of adequate reserves of electrical power. with normal sleep patterns.... [S]tudies using soft agar cloning assays to assess Green 'science' the proliferative response of normal cells and human The study that is consideredthe landmark for the environ­ colon carcinoma cells to fields, reported that for the mentalists was done by Nancy Wertheimerand Ed Leeperin cancer cells, but not the normal cells, magnetic or 1979. This was an epidemiological study to determine the combined magnetic and electric fields caused in­ effects of long-term exposure to extremely small magnetic creased cell proliferation, increased numbers of sur­ fields in the home. They compared childhood mortality re­ face transferrin receptors, increased resistance to natu­ cords in the greater Denver, Colorado area, and correlatedthe ral-killer-cell activities and increased expression of incidence of cancer with proximity to the network of extra-

20 Science & Technology EIR August 25, 1989 FIGURE 3 FIGURE 4 Time spent in equivalent electric fields; Ground-level electric fields domestic vs. farms with 765 kV for a 765 kV transmission line transmission lines

2,000 -r--"7t"=",------, I I I , I , I , I , I I I , 1,500 I \ Domestic sources : \"(all non-farmwork I , related exposure) : , I , e! I , , I � I , 1,000 , I 0) I , O �---r---.---,---r_-__, E I , .. , I , , o 10 20 30 40 so , , I I f' Distance from centerline (m) I 'II I � ,� Flat configuration with a phase spacing of 14 m (45 ft .) soo , I I , , , I Source: Biological Effects of Transmission Une Fields, by Edwin Carstensen. , I L. �.

A new study was conducted by David A. Savitz, correct­ 2 8 32 125 500 2,000 8,000 ing for the flaws in the Wertheimer and Leeper study. Savitz, an epidemiologist currently with the University of North Equivalent electric field, Vim Carolina, commented that although he and many other scien­ tists express concern about the possibility of a cancer threat Source:Biological Effects of Transmission Une Fields, by Edwin L. Carstensen; Electric Power Research Institute. from electromagnetic fields, there exists no persuasive evi­ dence that extremely low-frequency radiation causes cancer. Several epidemiological studies over the last few years have suggested an association between an increased risk of high voltage lines. Their study concluded that there was a cancer and industrial and domestic exposure to electromag­ statistically significant increase in childhood cancer in the netic fields, especially at low frequency. A researcher who Denver area, compared with a control group. A large fraction has done extensive work in these areas remarked in his (37%) of the homes were near so-called "high-current con­ study's findings: figuration" power lines, than were found for the controls. "Controversy still exists as to whether these epidemio­ However, the study was not conducted blind-that is, logical relationships to cancer could be attributed to the weak the subjects knew whether they were part of the experimental electromagnetic fields, or exposure to other agents, such as group or of the control group; it assumed that the magnetic solvents, fluxes ...[or] synthetic waxes ...as are known fields in the home were dominated by nearby power lines, to occur in electrical occupations, or as yet undefined fac­ as opposed to other sources, such as by domestic consump­ tors." He continues that the current evidence indicates that tion of electric power or other invisible sources of fields; it "unlike ionizing radiation, low energy electromagnetic fields assumed that the magnetic fields could beestimated by visual do not damage DNA and hence do not cause mutations or inspection of neighboring power line wiring configuration. serve as initiators of the cancer process. . . . [I]ntermittent Additionally, the magnetic fields were not measured at exposure to electromagnetic fields on a regular basis may the homes of the subjects, but instead were measured directly serve as a tumor-promoting stimulus. However, this sugges­ below several of the lines. The role of the use of everyday tion awaits experimental confirmation in an established ani­ ,, household appliances was not accounted for, which could mal model . 4 affect or interfere with the fields generated from the extra­ In addition to epidemiological studies, laboratory studies high voltage lines. Finally, Wertheimer and Leeper took no have been conducted as well, and the bulk of them show no account of the fact that there is a higher rate of certain kinds effect that could be attributed to exposure to fields with the of cancer in the Denver area, because of its extremely high power and frequency of the transmission lines. elevation, which other studies have been able to show. These studies apparently do show some biological effects

EIR August 25, 1989 Science & Technology 21 FIGURE 5 FIGURE 6 Fields of a typical 765 kV transmission line The magnetic fields of a 230 kV, double circuit transmission line (a) 'Contour map' presentation of the distribution of fields within the right of way 10 100 ------

5

80 g 2 C3) § .... .l!l 60 c: C3) 5 (J E 2 ,g 40 C3) (J c: 0.1 ttl -+--,---r----,---r--�__,r_--r-,____,r_- 'iii 2 5 i:5 20 10 100 1,000

Distance to centerline (m)

O +------�--._--�----�r_--_.��r C�' Height approximately 12 m, currents 220 and 90 Afo r the two 60 70 80 90 40 45 50 circuits

Line height (tt) Source: Biological Effects of Transmission Une Fields, by Edwin L. Carstensen. C denotes the position of the center conductor and 0<1> the location of the outer conductor.

of mice, which were placed in an unperturbed 60 Hz electric (b) Cumulative distribution of the fields field of 100 kV/m; a variety of tests were then made in behavior, hematology, neurochemistry, reproduction, bone o 100 200 300 400 500 growth, endocrinology, and other areas. The results were Distance from mid-span (tt) overwhelmingly negative. With respect to the effects of magnetic fields, another

ttl 100 laboratory study found: gj � 80 Since there is no magnetic equivalent of free VI 60 charge and since concentration of magnetic dipoles in "0 living things is extremely small, it is not surprising Qi 40 ;0:: that there are few examples Of clearly established bio­ w 20 logical effects of magnetic fields . . . the permeability '0 �0 0 of biological material are very similar to air. Thus, ; 0 2 4 6 8 10 12 introduction of a biological subject into a magnetic

Electric field (kV/m) field has a negligible effect on the field. . . . [T]here are no clearly established long-term health effects as­

Source: Biological Effects of Transmission Une Fields, by Edwin L. Carstensen. sociated with exposure to electric or magnetic fields comparable in magnitude to those associated with transmission lines. Hence, there are no biologically relevant exposure parameters for extremely low-fre­ of extremely low-frequency and electromagnetic fields. The quency fieldsthat include the factor of time in the way effects of these fields are used, for instance, in diagnostic it is possible for ionizing ratliation.5 medicine and to promote healing in broken bones. One of the most extensive such studies was conducted Despite the interest of the scientific community in con­ by Dr. Richard Phillips, of Battelle Pacific Northwest Labo­ ducting serious research into ,the effects of these fields, ratory in Richland, Washington, and Professor Rudolf Hauf Congress has approved a measly $3 million for research for of the Forschungsstelle fUr Elektropathologie in Freiburg, the Department of Energy, for fiscal year 1989. Even most West Germany. The experiment involved four generations of the Environmental Protection Agency's projects dealing

22 Science & Technology EIR August 25, 1989 new home wiring configurations that minimize the electro­ FIGURE 7 magnetic fields. Confirmed biological effects of power The real danger continues to lie with environmentalist­ frequency electric fields generated hysteria that drowns out the voice of scientific 1,000 findingsthat certify the safety of high-voltage lines. Witness the destruction of the nuclear industry, against which envi­ ronmentalists launched their assault, not despite the fact that nuclear is clean and safe, but because it is, in order to 500 Killing of cultured cells (d'Ambrosio, Gann) create a hoax that energy resources are"scarce." The nuclear

Killing of fruit flies (Solov'ev, Watson) industry refused to take up this political fight, to mobilize support behind a crash program to develop this cheap source of energy in the way U.S. citizens were moved to support the space program. 200 As in the case of nuclear energy, the environmentalists' "solution" to any perceived problem-chemical, nuclear, or

Aversion of rats for field (Hilmer) otherwise-is simple: Shut it down or don't let it be built. 100 Transient increase in activity, mice (Rosenberg) It is a simplistic approach that appeals to those who fantasize Increased activity, rats (Hjeresen, Kuhne) Increased activity, rats and mice (Rosenberg, Hjeresen, Kuhne, about a "co-existence" or "guardianship" with nature. The Eheret) Aversion of rats for field (Hjeresen) underlying assumption is extremely insidious: Man is not Rogers) 50 even co-equal with nature, he is her slave. It is an outlook that believes that the order of the universe is such that man I must obey what nature demands, regardless of the cost to J human life. Such a hateful philosophy is contrary to one of 0 God's first commandments: "Be fruitful, and multiply, and � 20 replenish the earth and subdue it: and have dominion over iii Corona damage to leaf tips (McKee, Bankoske, Hodges, the fish of the sea and over the fowl of the air, and over every living thing that moveth upon the earth." Lower honey production and brood growth, increased mortality, From the standpoint of reason, we can say that there is 10 bees (Greenberg) TranSient ground shocks, swine (Phillips) currently no proof of actual permanent harmfrom extra-high Behavior changes, bees (Altman, Wamke) voltage or ultra-high-voltage transmission lines. We can, Irrltabili�, bees (Husing) Percejllion of hair movement, human (Deno, Cabanes) however, demonstrate scientifically that hundreds of mil­ TranSient grounding shocks (General experience) 5 Increased hive temperature, bees (Greenberg, Yes'kov) lions of people are dying, and will die, especially in the Hair movement, rats (Kaune) Third World, for a lack of cheap, abundant energy which Increased activity, hive temperature, bees (Warnke, Husing, Wellenstein, Yes'kov) can be carried through the high-voltage transmission lines Lower productivity, bees (Greenberg, Rogers, Lee) the greens would deny us.

2 Implanted cardiac pacemaker effects (Bridges, Jenkins, Butrous, References Bisping, Moss) I. Florida Electromagnetic Field Science Advisory Commission, 1984. In the Florida case, the rule for 500 kV lines has three provisions: a limit of 10 kV 1m maximum electrical field within the right of way; a limit Shock perception, umbrella, vehicles, human (Deno, Tagaki) of 2 kV/m maximum electric field at the edge of the right of way; and no more than 200 milligauss (mG) maximum magnetic field at the edge of the right of way. The vertical scale on the chart gives the unperturbed electric For double-circuit 500 kV lines, the same standards are applied for field in air befo re the subject enters the region . electric field strengths as for single lines, but the limit on magnetic fields is a maximum 250 mG at the edge of the right of way. For 230 kV and lower voltages , the maximum electric field within the right of way is 8 kVI Source: BiologicalEffects Transmission of Une Fields, by Edwin L. Carstensen. m, the maximum on the edge of the right of way is 2 kV/m, and the maximum magnetic field limit at the edge of the right of way is 150 mG. 2. Electric Utility Week, Jan. 30, 1989. 3. William K. Stevens, "Scientists Debate Health Hazards of Electro­ with extremely low-frequency radiation were shut down in magnetic Fields," New York Times, July 11, 1989. The report was prepared 1986, due to budget cuts. Many scientists express the hope by Indira Nair and M. Granger Morgan, physicists, Carnegie-Mellon Uni­ versity's Department of Engineering and Public Policy, and H. Keith Florig, of that increased research will give a definite answer, one a research fellow in the department. way or the other, within the next fiveyears. Until that answer 4. C. 8yus, K. Kartun, S. Pieper, and W.R. Adey, "Microwaves act is provided, the best approach seems to be to limiting the at cell membranes alone or in synergy with cancer-promoting phorbl esters to enhance ornithine decarboxylase activity." public's exposure to electromagnetic fields, such as routing 5. Edwin L. Carstensen, Ph .D., Biological Effe cts of Transmission new transmission lines to avoid populated areas, and design Line Fields.

EIR August 25, 1989 Science & Technology 23 �TIillStrategic Studies

Soviets reorganize military, not to prepare for 'peace'

by Konstantin George

As was widely reported in the U.S. media during the first question. The other troops-motorized infantry, artillery, week of August, some members of the House Armed Servic­ anti-tank, and anti-aircraft-who had belonged to the with­ es Committee began .to question the legitimacy of Soviet drawn and dissolved tank divisions, have not been with­ "unilateral withdrawals" from Eastern Europe, after their drawn at all, but have been reassigned within the Soviet tour of Soviet military units in East Germany. The congress­ Groups of Forces in Eastern Europe, beefing up their regi­ men had come belatedly to the conclusion that Moscow's ments to de facto brigades. withdrawal numbers did not add up, since the equipment and Through this reorganization, the basic unit in the Groups personnel that remained, aftertanks and their crews departed, of Forces has become a briga(le, both in numerical strength were being reassigned to units still in place on East German and in the ensuing qualitative combined arms increase, ef­ soil. fected by the additional artillery, anti-tank, and anti-aircraft Their suspicion was confirmed beforehand in: 1) a units. TASS interview July 21, given by General of the Army The emergence of the enhanced combined arms brigade Boris Snetkov, commander-in-chief of the Western Group as the basic unit of the Soviet Army is one component of a of Forces, as the Soviet forces in East Germany are now vast reorganization of the Armed Forces under way this called, which reported the total number of troops and year. The brigade restructuring at the lower rungs has been equipment that would be withdrawn, and 2) a statement to TASS July 31 by Gen. Col. Bronislav Omelichev, first deputy chief of the Soviet General Staff and head of its planning nerve center, the Operations Main Directorate. TABLE 1 Omelichev listed total Soviet withdrawals by Aug. 15 for Soviet 'unilateral withdrawals' Eastern Europe as a whole, and for Mongolia, where, as part of the political pact with the Red Chinese, a real East Eastern Germany Europe Mongolia withdrawal is taking place. We present these data in Table 1, which shows the Troops 11,000 21 ,000 7,325 enormous discrepancy in the ratio of troops to tanks and Tanks 2,100 3,100 404 vehicles withdrawn, between East Germany and Eastern Artillery systems 150 383 307 Europe on the one hand, and Mongolia on the other. As Vehicles 2,000 ca. 3,000 ca. 400 these figures prove, what is leaving East Germany and East­ Approx. troop to tank 2.5:1 3:1 9:1 ern Europe are not integral Soviet units, but equipment, and vehicle ratio and those troops most directly linked to the equipment in

24 Strategic Studies EIR August 25, 1989 accompanied by a revolution at the top of the command and U.S.S.R. military districts and Groups of Forces in Eastern control structure. Some 1989 highlights: Europe. The Groups of Forces are on their way toward • The early April appointment of Gen. Col. Yuri Yas­ merger into a single Western Group of Forces, and the hin, 59, a Doctor of Technical Sciences and 30-year veteran military districts are being either abolished, merged, or rele­ of the Strategic Forces as a deputy defense minister without gated to mere training functions. formal portfolio. The only precedent for such an extraordi­ nary development was the 1974-77 tenure of Marshal Niko­ Cutting the fat lai Ogarkov as deputy defense minister without portfolio. The Soviet Union is experiencing in 1989-90 the most Ogarkov went on to become the father of the currently sweeping reduction of high-ranking officers since the whole­ operational Soviet war plan. Yashin's new functions are sale cuts imposed by Nikita Khrushchov on the armed forces to oversee the implementation of the Soviet military 's top in 1960, and since Stalin slaughtered the officercorps in 1937. priority program of perfecting, within the next three years, What is occurring now, however, is no purge in the traditional a modem wartime command, control, and communications Soviet sense, where a mass action was conducted against the system, and to direct the introduction of new post-nuclear military. The current purge has been drafted and is being im­ technologies for the Soviet military. plemented by the military ,for the military . It is a crucial com­ • The quiet April revolution in the Soviet Air Force com­ ponent of a thorough reorganization program, worked out un­ mand. Well before retirement age, the Air Forcefirst deputy der the direction of the General Staff leadership, and based on commander-in-chief, Gen. Col. of Aviation B.F. Korolkov, detailed plans drafted by the General Staff. and Air Force chief of the Main Staff, Gen. Col. of Aviation The reason for this elimination of high-ranking officers? V. Yeo Pankin, were removed, and replaced by, respectively, It is a necessity, if the Soviet military, in accordance with its Gen. Lt. of Aviation Yevgeni I. Shaposhnikov and Gen. Lt. war plan, is to achieve full war readiness within two years. The of Aviation P.I. Belonozhko, who had formerly served under mass early retirement of older and, above all, less-qualified Pankin as first deputy chief of the Air Force's Main Staff. officers, is fully consistent with the following program: This latter pair now de facto commands the Soviet Air Force, The Soviet Union, under the coverofits military "unilater­ leaving the Air Force's commander-in-chief, the 66-year-old al cuts" program, is in the midst of transforming its military Marshal of Aviation A.N. Yefimov, a titular figure. The command structure from a peacetime territorial table of orga­ changes in the Air Force are more sweeping than those that nization, based on cumbersome, top-heavy militarydistri cts, occurred in the Air Defense Forces in the aftermath of the into a much "leaner and meaner" wartime command and con­ May 1987 penetration of Soviet air space-and landing in Red trol structure, streamlined around an upgraded General Staff, Square-by a West German teenager flying a Cessna plane. operating through the wartime Theater Commands-West, • The January appointment of 43-year-old Gen. Lt. Southwest, South, and Far East. This reorganization, sched­ Vladislav Achalov, as commander of the Soviet Airborne uled to be completed in the next 1 8-24 months, is coupled with Forces. Achalov epitomizes the phenomenon of striking pro­ accelerated efforts to achieve a breakout in developing and motions granted to young officers who have excelled in Af­ deploying a firstgeneration of radio frequencyand related new ghanistan and in their post-Afghanistan assignments. More post-nuclear technology weapons of mass destruction. thanthat, it exemplifiesa side to the promotion of Afghanistan This deadly combination of reorganization into wartime veterans not generally cited in the West: dramatic promotions formations and striving for a military-technological break­ for those who excelled in leading stafffunctions during the out, is occurringin the midst of a systemic crisis in the Soviet warand in post-Afghanistan assignments. As chief of staff of Empire, as manifested in the strikes and ethnic explosions of the LeningradMil itary Districtduring 1988, when that district the past year. That turmoil will increasingly tempt the Soviet pioneered airborne/sp etsnaz commando offensive exercises leadership to exercise military options as the "solution." in accordance with the new Soviet offensive doctrine, Acha­ The old inefficient, indeed absurd, command structure lov played the key role in planning these exercises. His new hung like an albatross on the Soviet Army, impeding the post provides the most stunning confirmation that this new achievement of a war-ready command and control system. doctrineis moving into an advanced operational stage. Inside the Soviet Union, the Army had been organized on • Beginning in January, the creation of a new wartime the basis of 16 military districts, each containing its own command structure, centered on the General Staff and the redundant complement of dozens of officers of general rank Theater Commands. Starting last autumn, the old interim and many more colonels. A similar top-heavy, unwieldy leaderships of the Theater Commands were replaced by a structure governed the four Soviet Groups of Forces, sta­ new generation of commanders, between 55 and 61 years of tioned in East Germany, Czechoslovakia, Poland, and Hun­ age. They now have total control over all forces-land, sea, gary . A leading British specialist on the Soviet military once air, and air defense-based in the military districts and told EIR that "once war breaks out, the whole structure of Groups of Forces under their jurisdiction. Groups of Forces and military districts goes out the window; Until this year, the Theater Commands had existed as a once war starts, it all disappears." Moscow is not waiting transitional institution, alongside a peacetime structure of for war to start, but, under a policy of fully preparing now

EIR August 25, 1989 Strategic Studies 25 Russian minority. Soviet Justice Minister Venyamin Ya­ kovlev and Pravdaeditorials called the Interfront strikes The gathering storm "justified," and labeled the Estonian law, which is not yet formally enacted, "again�t the Constitution" and a "violation of international la..y" on "human rights" for Hungarian Communist Party leader Rezso Nyers warned minorities. in an Aug. 14 interview with Austrian television, that Transcaucasus: Bloody armed clashes between Ar­ because of "the considerable insecurity" the East bloc and menians and Azeris in the prcrdominantly Armenian-in­ Soviet internal crisis has caused in the Soviet leadership, habited region of Karabakh were admitted by TASS on "a major political tum in the Soviet Union" is probable. Aug. 15, which disclosed that "the loss of life and the Baltic: August is the anniversary month of the infa­ casualties among the population are steadily growing," mous 1939 Hitler-Stalin Pact which led to Russia's annex­ and reported attempts in Kara�akh to set up "alternative ation of the Baltic republics in 1940. Expecting unrest, governments. " Moscow is exploiting the large Russian populations who In Muslim Azerbaijan,on Aug. 13 over 100,000 Az­ were settled there after the war for provocations which eris,led by their Popular Front,demonstrated for econom­ can be used to bring the "liberalization" gambit there to a ic and political autonomy. A one-day general strike for quick end. In Estonia, Russians and other Slavs comprise Aug. 15 in Baku,called by the Popular Front, was suc­ 40% of the population,and in neighboring Latvia they are cessful,and a demonstrationthat evening in Baku turned the majority. Since last year's rise of Baltic nationalism out over 150,000 people. On Sept. 1, a general strike and the formation of Estonian, Latvian, and Lithuanian begins in Azerbaijan, which,i among other things, will Popular Fronts, the ethnic Russians of these republics shut down the vital oil prod�ing, refining,and petro­ were organized, with military and KGB support, into the chemical industries. mass Russian-chauvinist group, Interfront. Moldavia: The "autonomy" movement has scheduled On Aug. 9, Interfront began a political strike in Esto­ a demonstration, with an eJl.pected turnout of about nia, which has shut down over 40 industrial plants and 500,000, for Aug. 27 in thecapital of Kishinyov. Counter­ much of the region's rail freight traffic,to protest a new demonstrations by the republic's large Russian minority Estonian electoral law, labeled "discriminatory" by the are also planned.

for future military operations, the peacetime structure is the Afghanistan veteran Gen. Lt. Ivan Fuzhenko,who in tum already going out the window. is directly subordinatedto the SouthernTheater Command in There was some logic to this structure before the 1987- Baku. 89 overhaul of the Soviet Union's Interior Troops into an Other military districts,including the Siberian MD and elite force to handle internal unrest (see article, page 28). the Volga MD,exist now only on paper,having been merged The reorganization of the Interior Troops removed the last into the Transbaikal and Ural Military Districts, respec­ barrier to scrapping the military district structure. tively. The scope of the Soviet military's own purge to rid itself The end of June announcement by the Soviet Defense of excess baggage was revealed by Defense Minister Dmitri Ministry that the Group of Soviet Forces in Germany had Yazov, in a July 22 speech before political section chiefs of been renamed the Western Group of Forces, marked the Soviet divisions. Yazov disclosed that over the past two formal initiation of a process, whereby in the next 12-18 years, "many generals" and other officers had been retired, months, three Soviet Groups of Forces-the Western,the and "almost 1,400 posts of general and 11,000 posts of Central (in Czechoslovakia),and the Northern (in Poland)­ colonel have been abolished." What he did not say, was that will be merged into one, the Western Group of Forces. this was only the beginning. Many more such posts will This means the pre-war creation of a functional wartime disappear, as the ongoing elimination and consolidation of command and control system for military operations against military districts and Groups of Forces takes effect. Western Europe. With this reorganization,all Soviet forces One military district has already been officially dis­ in Central and Eastern Europe,opposite NATO's Central solved. On June 2, TASS quoted Gen. Lt. Yuri V. Petrov, Front, will be under one unifiedcommand, which in tum is a newly appointed deputy chief of the General Staff, that, directly subordinated to the Western Theater Command. effective June 1, the Central Asian Military Districthad been These are not the type of command and control reorganiza­ merged into the Turkestan MD. In one stroke, all Soviet tions conducted by an empire looking ahead to "peace" and troops in Central Asia were placed under one commander, "detente." Quite the contrary.•

26 Strategic Studies EIR August 25 , 1989 should matters move out of their control. Soviet forces, ring­ ing Poland from every side, will be on maneuvers in the three-week period between Sept. 15 and Oct. 7. On July 22, TASS reported that the official size of each maneuver had been scaled down, to 13,000 or fewer troops. This reduction Polish government has conveniently eliminated the need to allow mandatory Western observers at the maneuvers, under the Stockholm is under Soviet gun "Confidence-Building Measures" agreement. The exercises encompass: About 13,000 Soviet troops of the Western Group of by Konstantin George • Forces, based in East Germany, instead of the original plan for 25,000 troops, between Sept. 15 and Oct. 7. Amid the hoopla around the imminent formation of a non­ • 13,000 Soviet troops of the Central Group of Forces, , communist government in Poland, reported in the Western based in Czechoslovakia, instead of the original plan of 16,500 press as a "victory for freedom," some salient facts are being troops, in the late September-early October. ignored. • Two sets of September maneuvers in the Baltic Mili­ First is that the Solidarnoscmovement 's decision to lead tary District, one of airborne troops, and one of combined that government, was by no means a free choice, but the army and airborne troops, each of 1,500 troops, instead of result of an ultimatum byPoland 's President Woj ciech J aruz­ the original plan of 3,500 troops. These maneuvers will fea­ elski, backed by the Soviets with the implicit threat of a ture units of the 76th Guards Airborne Division, based at bloodbath. Kaunas, Lithuania, and will be held very close to the Polish Second is that the new Solidarnoscgovernment is intend­ border. ed by those who forced its creation despite the great reluct­ All these maneuvers are exclusively by Soviet forces, ance of Lech Walesa and other Solidarnoscleaders , to "take with no involvement by Warsaw Pact allies. Not reported by the rap" for new, bitter economic austerity measures which TASS, is the fact that annual Soviet maneuvers are held in will worsen Poland's alreadycatastrophic collapse. late September and early October in the Belorussian and On Friday, Aug. 12, Soviet Foreign Ministry spokesman Carpathian Military Districts, also bordering Poland. Vadim Perfilyev announced thatthe Soviet Union is "deeply concerned"about "attempts to exploit the process of forming Economy worsens a government" with the aim of "destabilizing the situation" The underlying economic woes, above all the food supply in Poland and harming Poland's "alliance obligations to the breakdown, have become so severe that even with Solidar­ Warsaw Treaty Organization." Soviet ambassador to Poland nosc joining the governmentto take the political heat off the Vladimir Brovikov spent the day armtwisting the leaders of Communists, no guarantees exist that Poland won't go out of Poland's Peasant Party and Democratic Party, the two parties control by autumn. Meat disappeared from the state-con­ with which Solidarnoscwere discussing forming a governing trolled shops soon after Aug. 1. As confirmed by Radio coalition without the Communists. Warsaw on Aug. 14, by the weekend of Aug. 12-13, meat Polish Prime Minister-designate Czeslaw Kiszczak then had also vanished for the first time from the free market in resigned, paving the way for Solidarnoscto lead the govern­ one northeastern region, Olystzyn. Radio Warsaw also re­ ment, which it had so far refused to do. On Aug. IS, with ported that in Lodz, a city of 850,000, rice, buckwheat kasha Soviet backing, President Jaruzelski had a statement read (Poland's main cereal staple), sugar, and flour could not be warningthat unless talks began to form "an all-party govern­ found in stores. ment," Poland faced "dangerous instability." Reports are circulating that elderly food shoppers have It was not Jaruzelski's warning alone, but the tacit threat died on food queues, and that queuers have stepped over their of a Soviet military move, that forced Solidarnosc leader dead bodies, because they are fearful of otherwise losing their Lech Walesa's hand. In an interview with Radio Warsaw, places on line, the Financial Times reported from Warsaw Aug. IS, speaking like a man with a gun to his head, he said, Aug. 17. By official figures, inflation is at an annual 236% "We are not removing the [Communist] party from power. rate, and will hit 315% by December. Thosemost important ministries, and here I'm speaking about But the Western bankers who backed U.S. President the physical continuity [of the state], those should stay in the George Bush's refusal to undertake a fundamental interna­ hands of the party . Because we don't want to take power. We tional economic reform, and his consequent rejection of Lech only want to achieve a great reform which the party cannot Walesa's pleas for a $10 billion development program for achieve. We will not disrupt the European order, and not Poland, agree with Moscow: for the sake of social control, create threats for those allied to the Warsaw Pact." Poland must continue to sufferand starve, but under a "free" The Soviets intend to have an invasion capability in place government.

EIR August 25 , 1989 Strategic Studies 27 'Mgantsi'-Moscow's Praetorian Guard

Elite troops trained in Afghanistan will carry out the com,ing crackdown in the Soviet Union. Luba George reports.

"[In the near future] the Afg antsi will take up leading posi­ Troops, and for "special programs of action" to handle inter­ tions in the economy, party, and ideological apparatus. . . . ethnic conflicts and "organized ¢rime. " These forces will consolidate themselves based on the ideas Gorbachov's ugly shift was already noticeable in 1988. of suffering, combat experience, and on the ideas of stoicism. It has not made the impact on the Western public that China The government should take advantage of these forces and did, because of the Soviet media coverup of the scope of put them to use in a postive way. . . . For God forbid should massacresand brutalities committed, and the Westernmedia a new crisis break out! The leadership will then be in dire having simply retailed Moscow's vastly understated version need of people who are experienced and ready to sacrifice of events. themselves. I don't think that the pacifist-leaning youth­ The first massacre, committed by the Afgantsi of the the rockers, breakers , punkers [Russian=Panki]-will be MVD special units, on the orders of the Soviet leadership, those to sacrifice themselves for the sake of the salvation of including Gorbachov, occurred during July 1988 at Svartnots the Fatherland. These are not the forces who would be pre­ Airport outside of the Armenian capital Yerevan. The death pared for it. It's the Afgantsi who would be prepared to make toll there, as the Afghan veterans of the MVD and the Army sacrifices should the time come requiringbloody sweat to be paratroop unit sent in fired into thecrowd of Armenian dem­ spilled. And that's why they should be given the right place in onstrators, was much higher than the official toll of two society. "-Aleksandr Prokhanov, LeningradskayaRossiya, persons killed. Throughout the summer and autumn of 1988, May 6, 1988. MVD special units broke up many demonstrations in Ukrai­ Since these words, uttered right after the first wave of nian cities, brutally beating maay hundreds of people, with national and inter-ethnic unrest had broken out, blood has many of the victims requiring hospitalization. The same pat­ indeed been spilled on the territory of the Soviet empire. All tern of violently breaking up protest demonstrations has been talk of glasnost and "democratization" aside, Soviet dictator often observed in Moscow itself, from October of last year Mikhail Gorbachov' s April ordering of the massacre of Geor­ through the spring. gian civilian demonstrators was a massacre carried out by the The mood of revolt and protest in the Captive Nations Afgantsi who comprise the Interior Troops' special units. throughout the empire is not stoppable. It is a function of This, together with the repeated brutal handling of Ukrainian the horrors experienced by the population, forced to live in demonstrators since last summer by these same units, shows countries whose economies are near the point of physical thefa scist, Russian nationalist, "blood and soil" policy shift, breakdown. To counter this, Moscow will employ its "Prae­ echoing the brutality the world witnessed in Beijing's Tia­ torian Guard" to save the collapsing empire. nanmen Square. The coming policy shift was underscored on Aug. 4--in Perestroika in the MVD the wake of the empire's first mass strike wave-in Gorba­ According to an article in the Estonian Komsomol news­ chov's speech concluding the Supreme Soviet session, where paper Noorte Haal on Jan. 14, 1989, written by Toomas he dropped his mask, to call for a vast internal crackdown. Sildam, a correspondent in Kabul since 1979, more than 1 Gorbachov announced a "drastic upgrading of legislation" million Soviet soldiers passed through the Afghan experi­ to combat national unrest and "organized crime," and the ence, leaving 50,000 dead and. 150,000 injured. Sildam's forthcoming expansion of the Interior Ministry's (MVD) statistical data refuted the official figures given by General dreaded special units of Interior Troops, to deal with cases of the Army A.D. Lizichev, chief of the Main Political Ad­ of "violent unrest." ministration, who said that over one-half million Soviet sol­ This had already been demanded by the MVD at a June diers were involved; 13,310 were killed in action; 35,478 27 Moscow press conference by MVD Deputy Minister Yuri wounded, and 311 missing in action. Zhurkin. Zhurkin called for beefing up the MVD's Interior This phenomenon, the "Club" of over 1 million young,

28 Strategic Studies EIR August 25 , 1989 angrycombat-hardened Af gantsi, has transformed the Soviet The Moscow News (No. 31) reported that a group of Union, first and foremost in the institutions which, in the Afgantsi-Soviet veterans of the Afghan war-have present times of systemic crisis, become the empire's most presented a proposal to the Central Committee to form important institutions-the military and the organs of inter­ a "volunteer division" to resume the fight. The veterans nal security. It is outside the scope of this article to treat said that "this division will compensate qualitatively in detail the "revolution" this has engendered in the Soviet for the reduction of our troops and, not in violation of Military High Command. Suffice it to say that the Afg antsi the Geneva accords, it will help stabilize the situation now comprise the driving group in the Army's leadership, in Afghanistan as well as the entire region of Central and fill nearlyall command positions for forces, from district Asia." Furthermore , they stressed the belief that "the and groups of forces level down to unit commanders. This situation of Islam and its propagation carried out by has occurredwith a vengeance during 1987-89--one crucial the Afghan opposition, and the situation developing in component of the real, alarming, perestroika, or restructur­ Uzbekistan ...is creating a chain reaction, which in ing, that has occurred in the Army. the near future threatens to spill over into the We shall focus, however, on a perestroika, namely in U.S.S.R." the ranks of the MVD's Interior Troops (vnytrenniy voisk), The report added, however, that an unofficialreply which has gone unnoticed, or has been deliberately ignored, from the U.S . S . R. Ministry of Defense had dismissed by theWestern media. the idea and mentioned among other things that Kabul During 1987-89, a quiet revolution has occurred in the had not asked for resumed Soviet intervention. Soviet Union's 340, 000 Interior Troops. They have been The core of this Afgantsi offer is not Afghanistan placed under the Ministryof Defense, and, since 1987, com­ as such, but having placed on the policy agenda the manded by Army Gen. Col. Yuri Shatalin, making them a idea of a Russian military volunteer force, acting in de facto extension of the Army. Personnel-wise, the Interior any one of a number of potential combat theaters, Troops are superior to the average Army unit. The Interior against an Islamic, or Turkic "threat" to the U.S.S.R. Troops now consist of hundreds of thousands of carefully This would be a cover for pursuing expansion, much selectedAf gantsi, tough, combat-hardened veterans. As part the same way it was done under the Pan-Slavic Doc­ of the 1987-89 reorganization, starting last year, the MVD trine, with Czarist Russian military "volunteers" who "special units" were created, drawn from the cream of the served in the Balkans during the 19th century. Afghan Warveteran crop: former members of elite airborne, air assault, and spetsnaz commando units. The racial compo­ sition of theInterior Troops has become almost 100% Slavic, are directly modeled on the dreaded Soviet-trained Polish mostly Russian. These are the forces who have been, and ZOMO elite anti-riot units, which brutally enforced the Jaru­ will be ever more often, in Prokhanov's words, "put to posi­ zelski martial law regime there, after December 1981. tive use." They are , to the 500-year-old vision of Moscow On July 5 the Soviet news agency TASS issued a report as capital of the Third and Final Roman Empire which domi­ on the training and duties of a "riot squad" of the Moscow nates leading circles in the Soviet Union today, what the police, called the Otryadmoskovsky osobogo naznacheniya Praetorian Guard was to the first Roman Empire-the select (OMON), created in October 1988. According to the report, bodyguardof the emperor. OMON has been in action more than 600 times since its Gorbachov's concluding speech to the Supreme Soviet creation and has detained some 2,000 people. Each member not only heralded a huge expansion of the Praetorian Guard, of the special unit, continued TASS, receives about 1,000 but was an admission after the fact that such an expansion is hours of training. Preference in the selection of personnel for alreadyunder way. the unit was given to former Soviet Army airborneparatroop­ Since spring, more and more efforts have been made to ers (i.e. Afgants;) and the average age of members of the unit recruitmen with Afghanistan combat experience into MVD' s is 33. It was used in October 1988 for the firsttime to break special units. Afgantsi now form the core of anti-riot special up a demonstration of the Democratic Union in Moscow. assault teamsof the Moscow, Leningrad, Novosibirsk, Kiev, In addition, many of the "anti-riot" courses at the MVD Minsk, and Riga police departments, to name only some. Academy and in other educational institutions under the Min­ The call for more Afgantsi volunteers was made by U.S.S.R. istry are being taught by Afghan war veterans, usually former Interior Minister Vadim Bakatin himself, when he appealed members of airborne or commando units. to Afghan veterans to join or work more closely with the The growing need for these special forces to be used in Soviet law enforcement agencies: "It is vitally important that controlling crowds and demonstrators more effectively was your enormous authorityand untapped potential be used . . . elaborated by the MVD head of Latvia S. S. R. , Bruno Stein­ against the insolence of bandits , racketeers, and other scoun­ briks, who said: "Such a special force, had it been created in drels"(Komsomolskaya Pravda , April 29, 1989). Riga earlier, might have been available for deployment dur­ These special assault teams for each major urban center ing the disturbances in Sumgait." To the people of Latvia,

EIR August 25, 1989 Strategic Studies 29 these units-dubbed the "Black Berets" or "Black Hun­ their "ideological strength" and feelings of "self-sacrifice" dreds"-are a dreaded riot squad, intimidating and beating for the Motherland will have to be called on in times of anti-regimedemons trators. crises. More information on the patternof recruiting former Af­ For his services to the military, Prokhanov was decorated gantsi airborne troops into the MVD's special units was pro­ last year by Defense Minister Dmitri Yazov in person. To­ vided by Gen. Maj. Ivan Gladush, head of the Ukraine MVD, gether with Pamyat-sympathizer Yuri Bondarev of the Rus­ who said that the militia units in that republic are recruited sian Writers' Union, he sits on theeditorial board of the mili­ mainly from among young manual workers and former air­ tary's "literary" journalSovetsky Voin . borne troops (Takova militseiskaya zhizn Pravda Ukrainy, What is Pamyat' s relationship to the Afgantsi? Pamyat and April 2, 1989). In May the Opvisnyk (Reporter) , an informa­ like-minded extreme Russian chauvinist organizations have tion bulletin published by the Ukrainian Helsinki Union, been on a recruiting rampage, enlisting the best and the bright­ informed its readers that "A special assignment [spetsnaz] est of Russia's "Rambos." Pamyat's leader, Dimitri Vasiliy­ militia unit was organized in Kiev, numbering over 300, ev, often boasts of his super musclemen Afgantsi bodyguards. assigned to disperse unsanctioned meetings, demonstrations The relationship between Soviet neo-Nazis and veterans and rallies. The unit's commander is Lt . Col Anatoly M. of the war in Afghanistan deserves special attention. Artyom Kulyk. . . . It is a highly mobile unit and can be transported Borovik relative of KGB boss Vladmir Kryuchkov in his pop­ anywhere." ular and controversial TV program " V zgl yad" ( oftenfoc using The beefing up of these special units continues. At his on Russia's Pamyat and neo-Nazigroups) was one ofthe first confirmationhearing before the Supreme Soviet, the Minister to point out the "Afgantsi factor" among the young fa shiki of Internal Affairs, Vadim Bakatin, revealed new figures on (Russian word for neo-fascists, neo-Nazis). According to Le­ the size of the MVD forces (TASS, July 10), saying that ningradskaya Pravda of March 18, 1989, of the more than his ministry had responsibility for 700,000 "policemen" and 6,000Afghan veterans living in Leningrad, several dozens­ 36,000 troops (averaging one policeman for every 588 peo­ if not hundreds-are said to have been attracted to the Nazi pie). Two days later, Bakatin in a Pravda interview said that ideology even before going to Afghanistan. When the Lenin­ the ministry had been having "difficulties" in dealing with a grad police shut down a neo-Nazi training center (kachalka), rising crime rate and an increase in ethnic disturbances. The the youths, it was discovered later, found refuge in a nearby MVD, he said, was in need of more troops for rapid deploy­ Afghan veterans' club. "The Afghan veterans have a lot in ment to areas of ethnic tension and that some 18,000 troops common with us," said one young Russian Nazi to a corre­ available were "poorly equipped." spondent of Nedelya, the weekly supplement of Izvestia. Bakatin was vastly understating the size of the MVD's As in the case of aggressive acts committed by the anti­ Interior Troops. According the London-based International Semitic Pamyat organization, the KGB and police forces Institute for Strategic Studies estimates, the MVD has a staff consistently look the other way when these "youngsters" of 340,000, including 30 divisions of internal security troops beat up old Jewish men and women, commit rape, deface equipped with tanks and other armored vehicles (IISS, the public property , and desecrate Jewish cemeteries. MilitaryBalance 1988-89, London, 1988, p. 44). Samizdat (unofficial) sources say these neo-Nazi youths, as they grow older, move on to join the more acceptable Pamyat, neo-Nazis, and Prokhanov "informal" groups, e.g. the Pamyat (Memory) society or its What the Soviet military says about Afghanistan and the associates, Otechestvo (Fatherland), and Spaseniye (Sal­ fate of the Afgantsi returning from Afghanistan can be read vation). in the articles and works of the ex-derevneshchik ("village writer") Aleksandr Prokhanov (see above quotes). When the The case of Aleksandr Rutskoi Soviets invaded Afghanistan in December 1979, Prokhanov The growing symbiosis between military and extreme became a war correspondent,working closely with the Gener­ Russian chauvinist "informal" groups was strikingly evident al Staff. His articles always soughtto instill super-militaristic, when the Otechestvo, previously Sverdlovsk-based, was of­ almost cult-like feelings of self-sacrificefor the Motherland. ficiallyregistered with the authorities in Moscow in April of In early 1988 in line with the coming Soviet overt with­ this year. (On Pamyat' s military connections see EIR ' s Glob­ drawal from Afghanistan, Prokhanov's tune changed. He al Showdown Update, September 1988.) started blaming the Afghan misadventure on Soviet "diplo­ Reporting on Otechestvo's founding conference in Mos­ mats ," "pacifists," and "liberals" as well as "specialists on cow Literaturnaya Rossiya of June 23, 1989, wrote: "The Islam." With the Soviet troop pullout, Prokhanov has now newly-founded society decidedly condemns the scornfulatti­ taken up the campaign to secure popular support for the tude of the mass media towards the question of military patri­ Afgantsi, insisting that the "soldier-internationalists" who otic education of the young generation." It "considers inad­ have returned from Afghanistan should be socially and eco­ missible the discrediting of the Soviet Army and the disregard nomically reintegrated into society, because, as he stresses, for the services of the veterans of the Great Patriotic War and

30 Strategic Studies EIR August 25, 1989 the present situation of Soviet soldiers and officers and the Orthodox Church . Dissident Orthodox priest Gleb Yakunin, soldier-internationalists [Afgantsi] bravely and unselfishly in Ruskaya Mysl May 19, 1989, denounced Rutskoi' s candi­ fulfilling their military and civilian duty." Speakers one by dacy saying that his victory would mean "the path towards a one denounced "Western colonization of Russia," saying, military dictatorship." "True patriotism is when men would rather starve for three Furthermore, the Afgantsi are not confinedto the leading yearsthan have Russia [(Rossiya)] handed over to foreigners. figures of such groups. They are well represented in the new They called for "an ecological and demographic renaissance parliament, the Congress of People's Deputies. One of these of the Russian people." Participants at the founding confer­ deputies is Gen. Col. Igor Rodionov, who as commander of ence included Gen. B.P. Ivanov, a Hero of the Soviet Union the Transcaucasus Military District was co-responsible for and spokesman for the veterans of the Soviet Armed Forces. the April 9 massacre of women and children in Georgia. Otechestvo's assistant chairman is Aleksandr Rutskoi, Rodionov delivered one impassioned speech during the an Afghan warveteran and Hero of the Soviet Union. A little May session of the People's Deputies. The speech, which more than six months ago, on Jan. 8, 1989, Rutskoi's picture was televised across the U. S . S.R. , marked the state's grant­ appearedon the front page of the Soviet Defense Ministry's ing of a mass audience for undiluted Russian chauvinism. daily, Krasnaya Zvezda. The caption to Rutskoi's picture, Rodionov denounced the April Georgian demonstrations as accompanying the article, lavishly praised Rutskoi, a pilot, "anti-Russian ." His speech received a standing ovation from for his "400 combat missions" and bravery in the Afghan the assembled, mostly Russian, deputies. Similar, televised, war. He was twice wounded in combat, captured by the standing ovations were to occur in later sessions as Afghan Mghan resistance forces, and eventually handed over to the veterans stood up to denounce Andrei Sakharov for having S()viet representativesin Islamabad, Pakistan. A partymem­ "insulted" and "slandered" the Soviet Army's conduct in ber, Rutskoi is currently studying at the Voroshilov Military Afghanistan. Academy of the U.S.S.R. Armed Forces' General Staff. The Afgantsi have moved to center stage in the Soviet This past spring Rutskoi ran for the Congress of People's arena. The Afgantsi combination of the MVD elite troops, Deputies in Moscow's Kontsevsky electoral district. Al­ their Armycounterparts , and the increasing Afgantsi acquisi­ though he didn't win, Rutskoi's notorious campaign-at­ tion of top military command posts, has created not only a tacking"russophob es," the Democratic Union, and the coop­ Praetorian Guard, but the institutional framework for a coup eratives as "legalized speculation"-attracted much attention option, should the systemic crisis get out of control. Whether in the U.S.S.R. and abroad. Rutskoi's candidacy, reported or not matters go that far, what is certain is that the Praetorian the unofficial newsletter Ezhednennaya glasnost, was sup­ Guard will be decisive in shaping the brutal Soviet policy ported by the Soviet army, by Pamyat, and by the Russian shifts to come.

General Achalov continued, "As long as there are no guarantees of the irreversibility of the present positive processes in the world, Soviet people demand that we consolidate the country's defenses. Proceeding from this The Soviet view of assumption, we are upgrading airborne troops." He al­ lowed that the so-called "new thinking" was making head­ 'defensive' doctrine way in the world, but added, "However, by all appear­ ances, it will be a long time before we can run our bayonets In an Aug. 2 interview with the Communist Party daily into the ground. Our partners in disarmament talks contin­ Pravda, Gen. Lt. Vladislav Alekseyevich Achalov, 43, ue to modernize their weapons ....Representatives of Commanderof Airborneps Troo since January of this year, U.S. ruling circles again make statements about the pos­ was asked how airborne troops which "probably preach a sibility of winning a nuclear war. Along with actively defensive doctrine least of all" and, which "are mobile pursuing a peaceful foreign policy . . . we servicemen and are always primed for the order, 'Advance!' " reflect should think about the country's defenses and the combat the"new defensive military doctrine" of the Soviet Union preparedness of those who protect it. This is our principal and the Warsaw Pact. General Achalov replied, "Yes, the mission." airborne troops are mobile and, as you said, are always The Soviet news agency TASS put out a dispatch primed for the order, 'advance.' But why should defense summarizing Achalov's remarks, but three hours later bepassive ? No, it should be active." instructed its subscribers to kill the item.

EIR August 25, 1989 Strategic Studies 31 TIillFeature

LaRouche gives testimony on patriots' movement

At 12:30 p.m. on Aug. 11, 1989, leading economist andformer U.S. presidential candidate Lyndon LaRouche took the witness stand in New York State court, in order to lay bare the exclusively political nature Ofthe trial against fo ur of his associates. EIR presents the offi cial verbatim court transcript of Mr. LaRouche's direct testimony, in which he presents the content of the policies fo r which he and his co-thinkers are being persecuted by his political enemies and the intergovern­ mental "Get LaRouche" taskforce acting on their behalf. Although most readers of EIR are fa miliar enough with Mr. LaRouche's presidential campaigns and the policies he has proposed, it should be pointed out that this was the first time thatsuch matters have been brought before the jury in this trial. The veryfa ct that LaRouche testified, represents a victoryover all those who were intent on "keeping politics out of it. " The Alexandria, Virginia trial of Mr. LaRouche, which led to his unjust conviction in January, was conducted in such a hasty "railroad" fa shion, that it was impossiblefor Mr. LaRouche to testify there. Since this is an offi cial court transcript, we renroduce it here precisely as it appears, even though it contains many obvious tYpographic and orthographic errors. Wherever those errors alter the meaning of the text, we have inserted corrections in brackets.

THE COURT [New York Supreme Court Justice Stephen G. Crane]: Who is going to be the next caller of the witness? MR. [Jeffrey] HOFFMAN [attorney for defendant Robert Primack]: I am, your Honor. THE COURT: Who do you wish to call? MR. HOFFMAN: Lyndon Larouche. THE COURT: You have to go get him. (Short pause in the proceedings.) (The trial continued as follows:) (Lyndon Larouche produced in the courtroom and seated on the witness stand.)

32 Feature EIR August 25, 1989 Lyndon and Helga LaRouche (third andfourthfrom the left) pose with Thai military and political leaders, during an October 1983 visit to Bangkok. On the witness stand in New York Cityon Aug. 11, 1989, LaRouche told the jury that he traveled to many fo reign countries in an effo rt to reform the world monetarysyst em, which is perpetrating "grave injustice" against the developing nations.

THE COURT: Mr. Larouche, I understand that you were necessary , your Honor. previously represented by Mr. Morganroth [attorney for de­ MR. [Lawrence] HOCHHEISER [attorney for defendant fendant Marielle Kronberg] in other proceedings elsewhere Lynne Speed]: Could I just have a word with Mr. Anderson? and that at one point, Mr. Morganroth was a witness, in (Noting the presence of Odin Anderson, attorneyfor Lyn­ which he gave some testimony that may have resulted in a don Larouche, seated in the audience.) waiver of the attorney-client privilege that existed between MR. HOCHHEISER: Just I was reminded that I also repre­ you at that time. Is that your understanding, sir? sented Mr. Larouche, and my office represented Mr. Lar­ THE WITNESS [Lyndon LaRouche]: I do know that he ouche previously, in a matter which is rather vague, to my represented interests on my behalf implicitly, and I do know recollection right now. that in the recent proceedings in Federal Court, that he was a THE COURT: Is there to be a waiver on that matter as well? witness pertaining to tax reliance matters. MR. HOCHHEISER: You might as well ask him. THE COURT: Are you willing to waive the attorney-client THE WITNESS: If it's in the common interest, I have no privilege with respect to those matters that are the subject of desire to cling to any attorney-clientprivilege in this matter. this testimony? MR. ANDERSON: It was a very peripheral matter, not THE WITNESS: Yes. directly involving Mr. Larouche, although indirectly of in­ THE COURT: That confirms? terest to him. I'm aware of it. THE WITNESS: Yes, exactly. I was also one of the counsel in the case. THE COURT: Would you want to consult with your attor­ Mr. Hochheiser, in fact,-one of the New York judges ney on that matter? barred me from the courtroom because I wasn't a New York THE WITNESS: If your Honor and the other attorneys do attorney. not feel I need to , I probably do not need to. So, I think that-I recommend that Mr. Larouche exer­ THE COURT: It's not for me to say. cise a waiver, if any is necessary , under the circumstances. THE WITNESS: I mean. THE COURT: Thank you, Mr. Anderson. THE COURT: If you're interested. Secondly, I understand that, in this matter, the possibility MR. [Odin] ANDERSON [LaRouche's attorney]: It's not of an appeal , I don't remember if we discussed this, Mr.

EIR August 25 , 1989 Feature 33 Anderson, but I think you've had consultation with your attorney from NBC] office, and he was unavailable last eve­ attorney, Odin Anderson, Esquire, about your FifthAmend­ ning. ment privilege. I-I would ask him to continue to make those efforts, THE WITNESS: Yes. and obtain for me the remainder of the Damon material. THE COURT: And it's my obligation, of course, to make THE COURT: Will you consent to our engaging in direct sure that you are aware of it. examination, and, at such cross by the other counsel, before THE WITNESS: Yes. you're required to do so, until you get that material? THE COURT: And if there's any questions asked, either in Ms. CARDI: Yes, absolutely. the direct examination or cross-examination, whether it be THE COURT: Thank you. Anything else? cross-examination by the prosecutor in this case or by co­ Is there anything you wish to have me ask the witness defense counsel, that might intend to incriminate you, you before I bring in the jury? do have the right to assert the privilege against self-incrimi­ (No response.) nation. THE COURT: Hearing no response, I'll ask the jury to I prefer that it be done outside the jury, outside the pres­ enter the courtroom. ence of the jury, if it's to be done. MR. HOFFMAN: No. My understanding was that it's not going to be done. (Jury present.) I discussed this with Mr. Anderson Monday, was it, Mr. COURT CLERK: Case on trial continued, People of the Anderson? State of New York against Marielle Kronberg, Lynne Speed, MR. ANDERSON: Correct. Robert Primack, George Canning. THE COURT: And I mentioned potential for reversal in All partiespresent, including the sworn jury , all properly your case and a new trial, in which event, anything you say seated. here , that might be relevant in a new trial, could be used THE COURT: All right. Good morning, Jurors. against you by the prosecutor in Virginia. I'm glad we're all together and feeling a little better THE WITNESS: Unless there was something extravagant, anyway, I hear. your Honor, I would prefer to take the risk. Saturday this week, we have insuperable obstacles. THE COURT: But I just want you to know that you have I will keep my options open for Saturday next week, and that Constitutional Right, and it's a hallowed one. ask you that you let us know, as you did this morning, wheth­ THE WITNESS: Yes, your Honor. er you have any insuperable obstacles for Saturday the 19th THE COURT: And I also want you to know, if you wish, of August. at any time, to consult with Mr. Anderson during your testi­ MR. HOCHHEISER: So, what am I supposed to do? mony, you feel quite at liberty to do so, he's here, I can have THE COURT: Tomorrow is probably going to rain. him seated right next to you, if you would like. All right, call your next witness, Mr. Hoffman. THE WITNESS: I would rather not burden the jury with MR. HOFFMAN: Thank you, your Honor. that. MR. ANDERSON: I prefer also to sit in the back. BY MR. HOFFMAN: THE COURT: But he is available if you need him. Q: State your name, please? MR. ANDERSON: I'll be here at all times. COURT CLERK: I have to swear the witness. THE COURT: Any time you want, or for the purpose of THE COURT: I've got to swear him. asserting privilege, simply tum to me and ask for a brief MR. HOFFMAN: Good. recess, and I'll be glad to. COURT OFFICER: Put your left hand on the Bible, raise THE WITNESS: Thank you, your Honor. your right hand. THE COURT: Thank you very much. COURT CLERK: Do you solemnly swear the testimony Is there anything else preliminarily that- you're about to give in the case of the People of the State of Ms. [Dawn] CARDI [New York Assistant Attorney Gen­ New York against Lynne Speed, Marielle Kronberg, Robert eral]: Yes. Primack and George Canning shall be the truth, the whole I want the record to reflect that we have not received the truth, and nothing but the truth, so help you God? direct testimony of Mr. Larouche in the NBC trial case, I and THE WITNESS: I do. that is, of course, Damon material. 2 COURT CLERK: Please be seated. We have also not received certain interrogatories that, it Give your full name to the Court, spelling your name, appears, and we've also not received an affidavit, which he please. refers to, in, I believe, the NBC depositions, in regard to THE WITNESS: My name is Lyndon Hermyle Larouche, certain expenses. Jr. , first name, L-y-n-d-o-n, middle name, H-e-r-my-I-e, I understand that counsel has made efforts. LaRouche, L-a, R-o-u-c-h-e and that's Junior. Mr. Anderson called Mr. Cavalla's [Thomas Kavaler, THE COURT: You may inquire.

34 Feature EIR August 25 , 1989 DIRECT EXAMINATION various university sites and other sites. BY MR. HOFFMAN: Over the period from 1966 through 1973, the last one I Q: Mr. LaRouche, please keep your voice up, so we can gave was at Columbia University in 1973, the spring. hear you. And I also did increasing amounts of writing. If I hear you back here, then everybody can hear you. I, probably, as a result of that, have become one of the Can you tell me where you were born, sir? most publicized writers of the past 20 years. A: I was bornin Rochester, New Hampshire. Q: Well, let me ask you this. Q: And what is your highest level of education. Did there come a point in time when these activities of A: Several years of college. yours, the writing and the lecturing, culminated in something Q: And what-after college, what were your areas of occurring in 1976? work experience? A: Yes. I became-I ran for President of the United A: I was an economist, and worked, gainful employment States on the Independent ticket. was chieflythat from 1947 until I terminated employment in Q: And between 1976 and 1984, did you continue the 1972 as a management consultant. kind of activities you just described? Q: You're married, I take it? A: It was, it was the same general type of activities. A: Yes, lam. There were changes in circumstances, and thus, in the Q: Can you tell me when you terminated employment, activities as such, but the general commitment, the general to the best of your memory? direction of my own activity was the same. A: It attenuated. It was self-employment as a manage­ Q: In 1984, did something occur? Tell us what that was? ment consultant over theperiod 1963 to 1972. A: Well, in 1984, a numberof things occurredthat was­ In 1972, it simply withered away, other activities pre­ Q: I'm sorry. I skipped 1980. vented my continuing that. A: 1979, 1980, for 1980, I joined the Democratic Party, Q: From 1972 on, can you tell us, not what you did each and became a candidate for the presidential nomination of day, but as an overview, what you were doing? the Democratic Party in 1980, beginning with the New A: I became, I had become involved at that time in deal­ Hampshire primary that year. ing with a phenomenonwe callThe New Left,which I thought, Q: And after that time period, between 1980 and '84, in some features, was the most dangerous threat to the United were you, once again, doing similar work that you had de­ States internally that I could conceive of, and therefore, I scribed earlier? have, because of my animosity to the U.S. policy in the war A: My activities had expanded qualitatively. on Viet Nam,- Perhaps I should say that I had entered into a sort of bi­ Q: You've got to speakup a little bit. partisan relationship with some circles in the Reagan admin­ A: Animosity towardsthe policy of the war in Viet Nam, istration, not necessarily because they were Reagan admin­ not war as such, thought it was a bad war, it was a wrong istration, but they we'"e U.S. Government, on matters which war. I, as a private citizen, felt I had an obligation to assist our Therefore, I was sympathetic to the opposition of the war, government in, and matters which I assisted, felt were of a to the anti-war movement, and many people in it. bi-partisan, as opposed to a partisan nature. I was completely hostile to The New Left philosophy of Q: And did there come a time in 1984 where you were SDS3 1eadership, for example, others of that sort. again involved in a presidential race? Therefore, I felt it was my responsibility, being opposed A: Yes, I contended again in 1984, after some hesita­ to that war, to contend, to represent myself as one of the tion, I contended for the Democratic nomination again, be­ opposite poles, one of the opposite alternatives to the SDS ginning with the Pennsylvania primary that year. leadership. Q: And did that occur again in 1988? As a resultof that, I attracted to my classes, I gave classes A: Yes. criticalof Marxism as a way of doing this. Q: Now, did you-are you familiar with a company I attracted a great number of people, some of whom called Campaigner Publications, Inc.? became associatedwith me, and continued to be associated A: Yes, I'm familiar with it, yes. afterwe had done our bit in dissolving SDS. Q: And are you familiar with a company called New And so, in 1972, we had become a significant, if small, Benjamin Franklin House? force, and it was felt that I had a moral obligation to continue A: I'm, with it, yes, in the general sense. to serve and assist these people who desired to continue their Q: From approximately 1978 through 1986, did you­ associationwith me. describe to us what relationship you had, in terms of publi­ Q: From 1972 on, did you do any writing, lecturing, cations, et cetera, or being published, on behalf of those, or things of that? involved with those entities? A: Yes. I lectured formally in one semester courses at A: I had only one significant relationship with New Ben-

EIR August 25, 1989 Feature 35 jamin Franklin House, that it was a book publishing firm, and a number of titles, which I had written, were published by New Benjamin Franklin House, particularly during that period, a dozen or more titles. As a result of this, some friend of mine thought I ought to have an income, and they approached New Benjamin Franklin House with the idea that New Benjamin Franklin House would pay me some royalties or equivalent compen­ sation, as an author, for books that had been published and sold by New Benjamin Franklin, and an agreement, propos­ FBI man trashed al, was made to that effect, which I accepted. However, New Benjamin Franklin House was unable to documents meet that requirement. The point is, an agreement was made that, which I agreed The Aug. 18 court session at the New York "Get La­ to , that they would pay me royalties. Rouche" trial was enlivened when FBI Special Agent They found themselves unable to do so because of their Richard J. Egan of Boston appeared as a witness, subpoe­ financial situation and, therefore, they didn't. naed by defense attorneyMayer Morganroth, and ordered And I said, fine, you can't pay it, don't, I don't ask you to testify by a federal judge, Egan was called to testify to for it. his destruction, on May 9, 1989, of financial documents Q: Did you have any similar­ belonging to Campaigner �nd CDI-two of the three Ms. CAROl: Can we have a date? LaRouche-related companies named in the New York in­ THE COURT: A date, please? dictment. The defense asserts that the documents de­ A: Well, the date of which this transaction occurred would stroyedincl uded many, perhaps thousands, of loan repay­ be approximately November of 1979. ment checks issued by regional offices of those compa­ Somewhere approximately February, March of 1980, and nies. after, it became apparent to me they would never be able to Charged in this case are George Canning, Marielle issue a check, and therefore, I simply said, forget it. Kronberg, Robert Primack, �nd Lynne Speed, on trial for Q: Did you have a similar relationship, I'm not talking one count each of conspiracy and one of scheme to de­ about in terms of the economics, but in terms of work you fraud. The prosecution chums the four took loans for did for CPI, Campaigner Publications, Inc.? LaRouche-related companies with no intention to repay A: Campaigner Publications, I had a much more active them. In fact, as the defense argues, circumstances be- relationship. I am informed by legal counsel, who researched this matter thoroughly, that I was, for a number of years, a non­ paid employee of Campaigner Employees. affiliated with me, in opposition to the National SDS, New it was largely a publishing enterprise, which maintained Left Leadership, got into a fight with the SDA [SDS] Lead­ international news services, had editorial and publication ership over the issue of labor. control over a number of periodicals, literary items and over The left wing of SDS was �nti-Iabor at that time. some other literary items which were published and circulat­ The-our friends in SDA I[SDS], and a number of them ed, pamphlets, that I was a resource. were pro-labor. Q: Speak up a little louder. Therefore , a fight broke out at Columbia University, in A: I was a resource for Campaigner Publications. which the pro-labor faction of SDS, called itself the Colum­ I wrote for them, I gave them technical advice on matters bia SDA [SDS] Labor Committee. The-this spread around of intelligence, international intelligence, strategic intelli­ the country, where various other campuses and other groups gence, economic matters and so forth . formed SDS Labor Committees, echoing the same fight. Q: Do you-can you tell us what the NCLC was during At the beginning of 1969, a meeting of various such the years between 1976 and 1986? groups was held in Philadelphia, with the idea, should we A: Largely it was a­ continue the existence of this relationship. Q: I'm sorry, 1978. We had come into a fraternal relationship after the dis­ A: It had undergone a change. solution of SDS, which we de.ermined should occur. Q: First of all, can you tell us what it was? We decided that we should continue our relationship, as A: It was formed because of our opposition-let me a kind of Federal OrganizatioQ, Association, afterthe disso­ scratch that and take it back, keept the answer simple. lution of SDS, which occurred soon after that. At Columbia University, a group of people who were That became known as the National Caucus of Labor

36 Feature EIR August 25 , 1989 yond the control of the LaRouche movement, including a tence in which Anderson asserted that Slade Dabney, an vast campaign of governmentharassment, made it impos­ attorney representing the bankruptcy trustees for Cam­ sible to repay all those loans. paigner and CD!, had agreed to take possession of the And now, what Egan has destroyed is hard evidence documents on behalf of the defendants. (The federal gov­ of largenumbers of loan repayments to lenders ! ernment forced Campaigner and CD! into involuntary Not only that. As became clear to the jury while Egan bankruptcy in April 1987.) was on the stand, he destroyed those documents about 20 Egan testified that he heard the sentence up through hours afteran on-record, in-court stipulation, made in his the words "Slade Dabney," but didn't know who or what presence by Assistant U.S. Attorney John Markham be­ (or where) that was, became confused, and could not fore federal Judge Robert Keeton in Boston, that Egan recall the rest of the sentence-namely, that Dabney was would preserve these and other documents related to as­ the authorized recipient of documents from Campaigner pectsof the LaRouche movement-documents which the and CD!. And apparently, Anderson's representation to government possessed-in order to return them to repre­ Judge Keeton that Egan might destroy the documents made sentatives of the LaRouche-related companies in ques­ so little impression on Egan that he didn't pay attention to tion. Moreover,the destruction occurred a month after the what he was supposed to do with the documents! startof the New York trial, and after the defense team in Next morning, Egan says, he arrived at the Boston New York had requestedthe documents for the trial. Federal Courthouse, and informed AUSA Markham (in a According to Egan, even though he had attended the way Egan called "plainly ambiguous") that representa­ May 8 hearingbefore Judge Keeton as part of his job (Egan tives of Independent Democrats for LaRouche, The La­ wasresponsible for the disposition of the documents, which Rouche Campaign, and the National Democratic Policy the government had retained for four years for use in the Committee had arrived for records of those organizations, Boston "LaRouche" case, which was eventually dis­ and "I'm going upstairs to get rid of them." He said he missed), he didn't hear, or couldn't recall, or was out of wasn't sure how Markham interpreted that, couldn't recall the room during anystatement concerningpreservation of Markham's response, was not sure if he himself had said the documents. (or meant) he was going to "get rid of' the documents, or Egan remembered defense attorney Odin Anderson the representatives. making some remarks at that hearing to the effect that Sometime in the next two hours, after "protecting" "Agent Egan has a very fertile imagination, and might those documents from "unauthorized pickup," Egan tes­ play some games . . . something might go in the furnace"; tified thathe put the boxes of Campaigner and CD! records but he somehow lost his hearinghalfway through the sen- into the trash bin.

Committees. bership conference, from the ranks of the National Commit­ That was the history of the thing. tee people, who are indicated to be spokesman, public The Caucus did have some kind of membership function spokesman for the National Committee, on matters of policy from about that time into say '76, '77. and so forth, a group is called, created, called The National The NCLC ceased to be, I'm not sure of the date because Executive Committee, which is generally people who meet I was out of the country, but it ceased to be a formal mem­ together more frequently than the National Committee mem­ bershiporganization at that time, ceased to have any dues, bers meet. any economic attachment. Of that National Executive Committee, I have been re­ It became an informal association of light [like-] thinking peated[ly] elected, nominated, elected Chairman. philosophical people, and so, it continued. I-all right. Any­ Q: Now, during the years 1970- 1978 through 1986, thing- can you tell us approximately how much time you spent in Q: Now, during the, and you were, and I guess still are , this country? a member of the NCLC, is that correct? A: During that period, approximately half of each cal­ A: The NCLC, the onlyformal organizationin the NCLC, endar year, on the average. apart from peoplebeing members, who consider each other It might vary from year to year. members, that's that sort of thing, no formal membership, Q: And the time that you were out of this country, can that sort, mutual consent. you tell us what you were doing? But there is formed a National Committee. A: I was traveling primarily in Europe, South and Cen­ National Committee people are people who are selected tral america, Asia, various countries in areas, which would for this position at conventions, or conferences of the mem- include in European countries in Belgium, Denmark,touch-

EIR August 25 , 1989 Feature 37 ing there, Sweden, United kingdom, France, Spain, Italy, policy makers, the urgency to support these third world coun­ and then frequently into India over a number of times, Thai­ tries on this kind of reform proposal. And also to indicate land, Tai Pei [Taipei, capital of the Republic of China], that the things that were happening in the third world repre­ Japan, Mexico, so forth . sented the greatest problem. Q: In these travels, with you, can you tell us what it was Ms. CAROl: Objection. you were doing? Again not in detail, but just- THE COURT: Are you objecting? A: The principal activity for which I am best known Ms. CAROl: I think I'm going to object. Can we get back internationally, over the entire period, is a campaign for to the topic? reform of the international monetary system. It was my per­ THE COURT: I sustain the objection. suasion and advocacy that the internationalmonetary system, Mr. Hoffman would you tailor your question to get less particularly as it existed since August 15, 1971, was doomed narrative and less background, and let's get to the heart of to an ultimate collapse, a serious financial collapse unless the matter. during some intervening periods a fundamental change was MR. HOFFMAN: Sure. made. THE COURT: Because we've been here four months al- I was also concernedwith the fact that the existing form ready. of the international monetary system represents a kind of MR. HOFFMAN: Was it that long? grave injustice, a cruel injustice to what we called developing Q: Did there come a time ill 19- nations a virtually neo colonial rape of developing nations. Yeah, did there come a time in 1984 or thereabout when An increase in the death rape [rate] of populations of devel­ anything was brought to our at1!ention concerning the partic­ oping nations which most Americans, if they knew the con­ ular entities that we earlier diseussed, Campaigner Publica­ nection, would abhor. And therefore, I was concernedwith tions or knew [New] Benjamin Franklin House or Caucus the reform because it was wrong, economically, it was con­ Distributors Inc.? trary to the interests of the nations, the world to to continue A: For a combination of reasons they were suddenly in this financial spiral. plunged into unexpected financial difficulties, which I con­ I was also concerned because the results of the present sidered an assaultive situation. ' policiesof it, I mean of an associated institution are immoral Ms. CAROl: Objection to the term unexpected financial to the point of being Hitler like genocide in some countries difficulties. in terms of the death rate caused by these economic policies. MR. HOFFMAN: There is his observation. Q: And so you traveled, I take it to these various coun­ Ms. CAROl: I object to this is characterization, he can tries including Third World countries to express and gain testify to the financial difficulties if he knows of them as support for these changes? result of personal knowledge. : A: More than that, I entered into collaboration with a THE COURT: Overruled. number of governments, or representives of a number of This word unexpected is a subjective word that the wit­ governments, during the period 1975 and so forth , as a matter ness himself did not expect. And that's how it's taken. If it's of fact, my presidency in 1966 [1976], candidacy for presi­ to be the subject of cross-examination, you can take it from dency was premised on that. There was negotiations during there, Ms. Cardi. 1974, '75 and '76 preceding a planned conference of what is Unexpected financialdiffictdties? called the non alliance [Non-Aligned] nations group which THE WITNESS: Yes. was convened in August of 1976 in Sri Lanca [Sri Lanka] . THE COURT: All three corporations? That's the nation of India. South of India. Sometimes called THE WITNESS: All of them. Other entities were effected Sa Lang (phoentic) [Ceylon], but, known properly as Sri [affected] , but they were caught in the hailstorm of things Lanca. that hit a number of entities. At this conference the non Alliance [Non-Aligned] na­ Q: Tell us what occurred, What you saw, what you knew, tions I believe were about eighty odd nations adopted a pro­ what you did. posal, as part of their proposal which was consistent with A: Well, it started in a manner which had nothing to do what I had been advocating in economic reform. This was with these firms. These- partly the result of the work of numbers of people, private Ms. CAROl: Could we have the entity, so it's clear? individuals and governments, who had campaigned for that MR. HOFFMAN: Caucus Distributors, Campaigner Inc., . kind of proposal of reform . It was a reform which was in­ and New Benjamin Franklin HClmse. tended to be submitted to the United Nations for United Ms. CAROl: Thank you. Nations consideration and support from that body, which is A: I was running the presidential campaign, there were a member of the United Nations. And my candidacy in 1976, difficultiesbeca use, when F.B;!. men went to a bank, made my primary purpose, two fold purpose, the primary is to bring certain representations, caused the bank to shut down the to the attention of as many Americans as possible, including campaign accounts, unfortunately a press account was re-

38 Feature EIR August 25 , 1989 leased which caused a tornado of people demanding their Q: Just- money back from the bank accounts because [of] the remarks A: I renewed certain suggestions I had made earlier on made by the news accounts. This, since many of the people business matters, and suggested that this experience demon­ who were contributing to my campaign were also involved strated the urgency of reconsidering adoption of a proposal I as financial supporters of the efforts of these companies[,] had made to them earlier. other entities which were associated with my name. They Q: Can you tell us what, in essence the business propos­ suffered as of, because of this. When, in addition to other als were? bank accounts which were non campaign bank accounts, but Ms. [Rebecca] MULLANE [New York Assistant Attorney bank accounts of some of these entities. At Chemical Bank General]: Time frame, please. here in New York, and Chase Manhattan here in New York. Q: In 1984, again, just generally so we can understand. When these bank accounts were also disrupted as result of A: What I had done then and repeated was, I believe they pressure by the F.B.I., this caused a chaotic situation in terms were required to upgrade their management accounting situ­ of the financial accounts of some of these entities. And since ation. A [-the] state of financial accounting system, im­ they did business with each other in significant amounts, prove their financial accounts. but I was emphasizing the bought things from each other, services, printing facilities, management. That I thought they had inadequate fingertip this effected [affected] all of them so suddenly, they were control over the way things were coming down the pipeline. caught in a period of two months approximately, in my esti­ And thought that they would have an improved method of mate, of discontinuity an disruption of orderly financial deal­ management accounts, making more use of computerized ings. And also in getting back to their supporters, and ex­ accounting procedures. That they could have a better indi­ plaining to them what had happened and trying to get things cation of, firstof all, of possible problems coming down the back to normal keel. pipe. They might not see on a day-to-day basis, and also they Q: At that point in time did you do anything as it in­ might find easier and better ways to remedy situations when volved that situation? they had realized them. A: Well, not directly in respect to the matters of these For instance, I thought they did not have a way of pre­ firms, but in respect to the National Caucus of Labor Com­ cisely determining their actual cost, cost, one activity against mittes, since the firms involved people who were associated another, and thought improved cost controls, improved cost with us, and since these firms actually used the, participated reduction methods, and so forth would enable them to deal in spreading the good words of the National Caucus of Labor with this kind of problem in a much better way. Committes, so to speak, through the country, we were natu­ Q: In 1985 were you again in or about 1985, consulted rally concernedwith their well-being, they're friends of ours, concerning the ongoing financial situation of these compa­ membersare or ours, half of their business is done in a sense, nies? with us, in terms of our activities. A: Yes. I, Ifelt- Ms. CAROl: Your Honor would you direct the witness to Q: Tell us what you did at that point in time. answer the question. A: I felt at that point that their loans, loan levels were THE COURT: Would you repeat the question, Mr. Hoff­ much too high for them. They were not necessarily in excess man. of loan ranges I'd seen in corporations at that time- Q: Can you tell us what if anything you did concerning Ms. CAROl: I object to what he's seen. this situation that we was brought to you attention. Q: What you told them. A: I express[ed] this as a matter of concern, within the A: I thought it was­ body of the National Executive Committe of the National THE COURT: Sustained. Caucus of Labor Committe. A: I thought it would not be prudent for them to risk Q: Did you make any proposal to or suggestions to try maintaining this kind of growth with this kind of loan level. and remedy the situation? So, I recommended they put a ceiling on the percentage, on A: I made, I asked for and received a certain amount of the volume of loans they would take in each case and proceed information about the situation from the firms. On the basis to roll down the level off [of] loans, retiring loan balances, of reviewing this information, I emphasized that there were getting them down to a much lower level and hopefully elim­ certain remediesI thought they ought to make in the way they inating them all together. did business in order not to be caught by this sort of thing. Q: As part ofthat discussion in telling them your thoughts Not to about unprepared for this sort of thing. The way on these things, did you tell them to cut out loans altogether? obviously they had been unprepared for this kind of thing A: No. when it hit them. Ms. CAROl: Objection. Q: And what was the suggestion that you personally THE COURT: Sustained. made? Q: Can you tell us what if anything else you told them A: I had made some suggestions back- concerning what you just described, the roll down of loans

EIR August 25, 1989 Feature 39 and what that means. A: The prior, prior to- A: It's had to watch the loan, not-The total loan bal­ Ms. CAROl: I don't understand the question, your Honor. ance is what you had to watch. Not the individual loan. Of THE COURT: Do you understand the question, Mr. La- course you had to pay the individual loan when it comes due, Rouche? but in the process of rolling this thing down, you've got to THE WITNESS: I would have maybe, I would say I'd break reduce. For example, if you have a loan balance, total loan it down. balance which you could retire on the basis of current levels THE COURT: He'll have to break it down for you. of income over 24 months, you have a lot of loans which say, THE WITNESS: Thank you. are eight months maturity or twelve months maturity, you THE COURT: Sustained. obviously can not wait 28, 24 months to pay a loan that is Q: Did you have any discussions with the people who due in eight. Therefore, you may have to take an additional were obtaining loans on behalf of these entities? loan to replace the eight month loan, but you must do it in THE COURT: Do you want to call them fund raisers or such a way that you are always taking in fewer loans than persons? you had before. In other words, you have a smaller loan MR. HOFFMAN: Fund raisers. balance than you had the month before. And bring the level Q: As to the nature of their work? of total loan balance down until you can start to wipe the A: Well, not directly. Some indirect things said and also thing out entirely. particular!y in terms of the 1984 campaign. Where of course Q: Now, at the time that you made these suggestions, we campaigned- can you tell us what ifanything you observed in terms oftheir Q: We have to stay away fromthe campaign. implementation and any effectsfrom outside or how that was A: I'm saying it was the same population of persons effected? involved. A: I was not too much on top of these things, there were Q: All right. What did you tell them, if anything, should a couple of times that I dissipated, partly, my own sugges­ be the type ofloan they were getting, vis-a-vis to try to narrow tion. For example there was some memoranda which were it in more as vis-a-vis commercial loan, political loan, per­ called to my attention. I thought the memoranda was incom­ sonal loan, et cetera? petent but I thought that none the less- A: Well, I didn't express this until the end of '84 and Ms. CAROl: Excuse me I didn't hear what he said. during '85. During that time I did say some things on a THE COURT: Incompetent. number of occasions. First of all, I said an organization which THE WITNESS: Incompetent. is political, which all these essentially were, is that you're A: Incompetently constructed, but I thought the impor­ building support, you're building political support in effect tance in them, though not accurate, none the less was such on a political movement. And therefore, what your financial you couldn't ignorane [ignore] it. And you had to, rather than dealings have to be subordinated morally to the fact of what, just simply throw them in the waste basket because of their the kind of political movement you're trying to build, despite inaccuracies, to recognize there was something, maybe not you're doing it through a commercial medium. That a sale of what the memorandum represented, but something, and you a publication is therefore a very good kind of income, if should look into it, findout what the truth is. dollars being equal. Because, you're now providing a ser­ Q: Now, in terms of these loans that you were referring vice, in contrast to the person who has paid for it. They are to , had you any participation in discussions with any of the walking away with something which is a value to them. Their people who were getting loans from, on behalf officer [of] contribution, that's a nice thing, but apart from the fact that C.P.1. or C.D.I., New Benjamin Franklin House, and if so, you're trying to honor the contribution by doing the kind of tell us what that was in terms of if you had any discussions in thing you think the contributor expects you to do. The con­ terms of the nature of lenders, et cetera? tributor has nothing in hand in terms of service as they do A: Well, in terms of C.D.!., some people associated with a publication report. with C.D.1. had been involved as volunteers in my presiden­ That a loan is politically bad, because you are , whenever tial campaign in 1984. And some facilities of C.D.1. were you get into lending, when you borrow from a friends, and used, it's a, it was a public relations. And they were used to virtually all the people who we were doing business with assist the campaign on a commercial basis- were friends, supporters, they're virtually members. The best Ms. CAROl: Would you ask him to answer the question. way to have a family quarrel is to have borrowing from one MR. HOFFMAN: Let me rephrase the question. member of a family to anoth�r. And therefore, keep away MS. MULLANE: Thank you. from it. Friends should not borrow from each other, member, Q: In terms of the nature of the kind of people one would family members should not borrow from each other. Gener­ be asking for loans from, did you have discussions about that ally keep away from it. kind of persons and what your suggestions were as to who Q: Did there come a point in time in 1984 and '85, when that kind of person should be- you observed that there was a problem with the loans?

40 Feature EIR August 25, 1989 A: It particularly-There was a minor problem with the people concerning the taking of loans from the public with loans. It was a matter of these were political loans, it was a an intent not to repay? matter of how you handle them. For example- Ms. CAROl: Objection. Q: When you say these were political loans, can you tell THE COURT: Sustained. us what those words mean? Q: Can you tell us whether or not you ever participated A: That people, as I looked at the list of lenders and, and in conversations where you said or were told or heard with actually supporters, at the same time, looked at these lists, your own ears from any of these people that there was any they were essentially the same. So, people were giving intention to take loans from members of the public and not to amounts of money which they would not have given normally repay them? as loans, or presented as loans or gifts. With this level of Ms. CAROl: Objection. income. There were exceptions to that. But, on the average, THE COURT: Sustained. people were giving, shall we say, generously, whether they Ms. CAROl: Assumes a fact not in evidence, conversa­ were lending, they were lending generously in many cases, tions. not all cases, but in many cases. People will not make those THE COURT: Sustained. kinds of contributions and loans unless they are highly com­ Q: Did you ever agree or conspire with any of the defen­ mitted. These are not ordinary loans, these are loans in this dants in this case or anyone else in the, any one else in this case, loans given out of a high degree of political support, a fund raising, in the, as supporters for the National Caucus of sense that is very important in a sense to sacrificepersonally Labor Committes or for the various entities I mentioned be­ to support an effort which they think is very important. fore , C.D.I., c.P.I., New Benjamin Franklin House, to take Q: Now, I think we've come up to around 1985, '86 any money from members of the public as unsecured loans area. In, in 1988, were you convicted of a crime. with an intention not to repay. A: Yes. Ms. CAROl: Objection. Q: And were you convicted of a number of counts of THE COURT: Sustained. mail fraud and conspiracy to commit mail fraud? MR. HOFFMAN: May I have a moment, your Honor? A: Twelve counts of that and conspiracy is a 13th count. THE COURT: Yes. Q: And I take its those matters are being appealed? MR. HOFFMAN: I have no further questions. A: Yes. THE COURT: I think this is a timely break for lunch. Q: Now, would it be accurate to say that over all this Jurors, please do not discuss anything about this is case time period the various campaigns you've been in that you've among yourselves or with anyone else. describedto us, presidential and political, that you have been Keep an open mind on every issue connected with the in fact in an ongoing day to day fight with various elements case. of the government? Don't read, watch or listen if it's reported in the media. A: Factions which intersect government. They're no And promptly report to the Court any incident involving longer elements of the government, therefore. an attempt by any person improperly to influence any mem­ Q: By the way, during the years between 1978 and 1986 bers of the jury . Please, I urge you, I direct you to be back and for your edification, those are the years this case is about, promptly at 2:15. that's why I keep mentioning it. Can you tell us whether or (The jurors leave the courtroom.) not you ever had any conversations with Bob Primack di­ MR. HOFFMAN: While we wait, can I speak a moment rectlythat you remember during that time? with the witness, your Honor? A: Probablydirectly , none, I was awareof him, of course, THE COURT: I don't see why not. more or less constantly, but we didn't have the opportunity Ms. CAROl: Only to discuss arrangements. for direct conversation. Q: And was your opportunity for direct conversation Notes with people as a general rule during that time period, can you I. LaRouche v. NBC. the October 1984 civil suit brought by LaRouche just describe why you didn't have an opportunity? in Alexandria, Virginia, after the network aired a program accusing La­ A: Well- Rouche, among other things, of plotting the assassination of PresidentJim­ my Carter. Ms. CAROl: It sound leading, Judge. 2. People of the State of New York vs. Damon set a precedent in that THE COURT: Sustained. state which entitles the prosecution to see any testimony which defense Q: Can you tell us- witnesses have given in previous trials in any jurisdiction. 3. Students for a �emocratic Society was created in the early 1960s by MR. HOFFMAN: Withdrawn. the League for Industnal Democracy, as a means of steering the student Q: Did you have, can you tell us whether or not you ever ferment around the Vietnam War into the neo-malthusian, New Age agenda had any conversations with either Bob Primack, Lynne Speed which had been defined earlier by Bertrand Russell and the Pugwash circles. By 1971, SOS had effectively ceased to exist, having been split between the or Marielle Kronberg or George Canning or any of the other Labor Committees on the one side, and the Weathermen terrorist and drug people who you knew as supporters or fund raisers or sales- counterculture elements on the other.

EIR August 25 , 1989 Feature 41 Stop the holocaust in Lebanon!

by Helga Zepp-LaRouche

The fo llowing call was issued on Aug. 15 by Helga Zepp­ But even Western Europe could stop the holocaust, if it LaRouche, chairman of the Patriots fo r Germany party in wanted to. It would have to pose the ultimatum suggested by the Federal Republic of Germany. Aoun. Or, do the Europeans ttust so little in the "Common European House" that Gorbachov is hawking, that they fear ' For the genocide of Christians in Lebanon being played out Moscow might respond with a war against Western Europe, before the eyes of world opinion, there exists only one ade­ in defense of its satellite Syria? quate comparison: What the Syrian troops of Hafez Assad are perpetrating is exactly the same as the Nazi SS storming Time has run out of the Warsaw Ghetto; and the Christians who are putting up Taking quick action is a question oflife or death, because resistance, are comparable to the Jews threatened with gen­ if the bombardments of Christians in Beirut continue two ocide. days more , the situation will become catastrophic; they have The fact that no Western governmenthas put a halt to this no place where they may seek refuge. There is also the im­ holocaust, is the greatest declaration of moral bankruptcy of mediate danger that the Syrians will move to air strikes, this so-called free West, which, at least until recently, pre­ because the Lebanese resistance of Aoun' s ground forces is tended to found its identity on the values of Christian civili­ as yet unbroken. But the Christians will not be able to with­ zation. But now a holocaust in the Nazi tradition is being stand this assault, because relief aid deliveries of Christian carried out and reported in careful detail by the media; but organizations have not reached Lebanon for weeks. the politicians, with very few exceptions, do not even findit The ongoing Syrian militaty onslaught against East Bei­ necessary to allow their vacations to be disturbed, in a situa­ rut and the Lebanese national !brces, Christians and Muslim, tion in which it is very obviously the aim of the Syrians to led by General Aoun, is the logical outcome of the last 13 eliminate the Christians from the Mideast and to take over years ofSyrian military occupation of some 70% of Lebanese the region for fanatical Islamic fundamentalism. territory. Since Syrian forces : entered Beirut in 1976, they When Lebanese Prime Minister Gen. Michel Aoun ex­ have never concealed the fact that their ultimate aim was to presses his longing for an American President like Dwight establish a "Greater Syria" of which Lebanon was to become Eisenhower, a President who would give the Syrians a 24- the first annexed province. The present battle aims at anni­ hour ultimatum to withdraw its forces, then we can only hilating physically the last bastion of Lebanese resistance to support him wholeheartedly. What a glaring light is cast on the Syrian occupying forces, even if-as Druze leader Walid the United States, when Aoun demands an American policy Jumblatt put it-"Beirut has to be leveled to the ground, like correspondingto the dignity of the American people, instead Stalingrad. " of unworthy, impotent appeals to Syria-,-a regime which This is the latest in a series of massacres that the regime only understands the language of power. The generous prom­ of Hafez Assad has perpetrated in Lebanon and in the region. ises that President Bush made to the Pope regarding Lebanon, Everyone remembers the massacres of Palestinians in Tel al during his Rome trip, were apparently worthless. Zaatar in 1976 directly sponsored by the Syrian army, and

42 International EIR August 25 , 1989 subsequent sieges and massacres of Palestinian camps not persuade Assad." throughout Lebanon in recent years. Everyone remembers Why such support for a bloody dictator? Can it be that the tens of thousands of Syrian citizens massacred in the city Hafez Assad has the power to blackmail a succession of of Homs in the early 1980s. The massacres of Lebanese American administrations? In the present situation, is the Christians, the last phase of which is unfolding in the ongoing Syrian regime using its inside knowledge of the last ten years battle, will not be forgotten. of secret negotiations between Washington and Teheran, In addition, the following must be kept in mind: starting in the summer of 1980, to bring Washington over to 1) It is under the direct sponsorship of the Syrian regime, its side? And yet, there are no indications that Washington is in agreement with the ayatollahs in Iran, that Lebanon has being coerced. Supporting Hafez Assad meets the policy became the hotbed of Islamic fundamentalism in recentyears. goals of those, in the East as well as in the West, who want The establishment of such groups as the Islamic Jihad, re­ to keep the Mideast situation hot permanently, never allow­ sponsiblefor the deaths of hundreds of American and French ing peace. soldiers, and the creationof the Lebanese Hezbollah, respon­ sible for the kidnaping of all hostages-European, Ameri­ What must be done can, Israeli, and Arab-were only made possible because of Right now, the stakes are very high. The destruction of their cooperation with Syrian intelligence. East Beirut and of the Lebanese national resistance forces, if 2) It is under the direct sponsorhip of the Syrian regime, allowed to occur, would represent a victory for the forces of especially Syrian Vice President Rifaat Assad, that the Le­ darkness who brought the ayatollahs to power in Iran. A banese Bekaa Valley has, in less than a decade, become a Syrian victory in Lebanon would mean a new Middle East major opium-producing area and internationalcenter for nar­ war in the short term, with all parties deploying all available co-terrorism. weapons, and long-term consequences both for the region 3) It is under the direct sponsorship of the Syrian regime and internationally. and of its intelligence services, led by General Ali Duba and Hence, several urgents steps must be taken: Gen. Mohammed al Khouli, that hundreds of innocent vic­ 1) The Lebanese national resistance forces, Christian tims have died over the last decade during blind terror ac­ and Muslim alike, should receive full diplomatic, political, tions, be they perpetrated under the flag of the Abu Nidal economic, and military support to repel the Syrian onslaught. organization, or more recently, in the case of the December 2) Diplomatic, political, and economic boycott mea­ 1988 Pan Am 103 explosion in Lockerbie, Great Britain, sures against the Syrian regime, including the boycott of under the flagof Syrian intelligence captain, Ahmed Jebril. Damascus airport, should be immediately considered and Yet, the Syrian regime has enjoyed the benevolence of implemented, unless it halts its offensive. international powers, especially the Soviet Union and the 3) The European Community in particular, together with United States. While the Soviet Union and Syria have been the Vatican and the Arab League, should immediately pave associated in a common defense pact for close to a decade, the way for an interim political agreement in Lebanon, and: there is officially no such treaty between Washington and a) establish a timetable for the withdrawal of all foreign Damascus. However, American policy toward Syria,-ever forces fromLebanon; since Henry Kissinger was national security adviser, and then b) create the necessary means for the rapid dismantling secretary of state, has remained unchanged to the present of all military training camps in Lebanon, especially the day. It has been U.S. policy under Nixon and Ford, Jimmy Bekaa Valley, belonging to Islamic fundamentalist or Pal­ Carter, R,eagan, and now the Bush administration, to give estinian terrorist organizations; tacit supportto all of Hafez Assad's initiatives. c) extend the necessary financial and economic support to rebuild the National Lebanese Army to reassert its role and Kissinger backs the Syrian dictator control over Lebanese territory, even if this may include On March 20, the U.S. State Department's Lawrence dispatching multinational peacekeeping military units to Le­ Eagleburger warnedthat, "If the Syrian troops were to with­ banon; and, draw from Lebanon, the situation would worsen." Such was d) establish an economic program for the systematic de­ his response to Michel Aoun's call for a "war of national struction of all hashish and opium fields, and provide neces­ liberation. " sary financial compensation to local farmers to restart Le­ In April 1989 at the Paris conference of the Trilateral banese agriCUlture. Commission, Henry Kissinger, the man known in the coun­ Today, on the Feast of the Assumption of the Virgin, the try as the author of the plan for the "dismemberment of Pope dedicated his speech exclusively to the unspeakable Lebanon," boasted: "God may punish me, but I rather suffering of the Lebanese people. I call upon all Christians like Hafez Assad. He has a cold analysis of the national not to stand idly by and watch this holocaust, but to support interest and views Syria's interests as making sure that no the Pope in his efforts, and to force all politicians who call one becomes dominant in Lebanon. Moral indignation will themselves Christian to save the Christians in Lebanon.

EIR August 25, 1989 International 43 The Bishops urge the government in Bonn to "exert all Documentation possible influence and compel Syria to stop the horrifying bombardment." "Political efforts like those launched most recently by the governmentof France , but also on a European Community level, have to be intensified." The Times of London: The Syrian occupation of Leba­ non "matches anything I have readabout the Nazi occupation of France or the Soviet occupation of Afghanistan ....We have a duty to support General Aoun against the Syrians," wrote commentator Roger Scruton in the Aug. 18 issue. Wo rld responses to Scruton, who has just returnedfrom Lebanon, claims that the West has been victimized by "disinformation" about Leba­ non, especially by the mythology that Syrian forces are in genocide in Lebanon Lebanon as a "peacekeeping force." In fact, "Syria does not recognize Lebanon as a sovereign state," but rather is irrev­ Pope John Paul II: "Do not assume the behavior of Cain, ersibly committed to creating a "Greater Syria" that would who made himself responsible for the death of his brother," ultimately include not only Lebanon but also Palestine and said the Pope, speaking to pilgrims and tourists at his summer Cyprus. residence of Castel Gandolfo on Aug. 14. "Nobody should doubt the ferocity of the Syrian occu­ "In the name of God, I appeal to Syrian authorities, ask­ pation. Anyone remotely suspected of opposing the Syrians ing them to cease the bombings, which aim to destroy the is imprisoned, tortured, and usually killed. . . . Families of capital of Lebanon and the entire country. " dissidents are taken hostage andkilled at the slightest sign of The world is witnessing "a process, I would say, of gen­ rebellion." All of this is done under "Syrian secret police ocide, which involves the responsibility of international so­ protection." Meanwhile, "the drug trade, run by Syria, dom­ ciety. It is a process which is bringing about the destruction inates every other sector. " of Lebanon. In reality, we arefaced with a threat to the entire White House spokesman Marlin Fitzwater: On Aug. order of international life. It is a threat of a moral nature, so 14, Fitzwater cynically suggested that U.S. opportunities in much more so because it is a weaker state which is feeling the Middle East "may even be better now," as a result of the the violence and indifference of the stronger." crisis. situation. Asked by EIR's Nicholas Benton whether The Pope stressed that those who hurt the weak will be whether all the attention that is now focused on the hostages judged guilty by God and history . has "skewed or colored" U.S. policy goals toward the region Lebanese Prime Minister Gen. Michel Aoun: ''There as whole, Fitzwater replied that it had not, but "If anything, will be no ceasefire unless it is linked to a timetable for a it may be better now . . . because of new opportunities for Syrian pullout from Lebanon," said Aoun on Aug. 14. "We better relations with Iran that have arisen, and the amount of are coming to the point of the withdrawal of the last Syrian communications we've had with countriesin the Middle East." soldier from Lebanon. On international advice, we will not The New York Times: An Aug. 16 editorial denounced hand over Lebanon to anyone. We are not fond of war and General Aoun, under the headline, "Suicidally Stubborn in it's not our hobby. We are fighting for freedom, sovereignty Beirut." "The new carnagehas been unleashed by the delib­ and peace." erate, suicidally stubborn strategy of one man, Gen. Michel Aoun called on the United States to take action, and Aoun, the Maronite Catholic annyleader ," the editors wrote. declared that "it is time to give the American people back "He deliberately provoked a ruthless enemy, Syria, to mur­ their dignity." He called for the U.S. administration to be­ derous violence in the hope of compelling the West to come have like President Eisenhower did during the Suez Crisis of to his rescue. Westernleaders would serve the interests of all 1956, when he gave a 24-hour ultimatum to France and Lebanese by making clear that they will not be drawn in." Britain, and a 24-hour ultimatum to Israel to leave Egyptian The editorial stated that Syria should not be asked to territory. Aoun also warnedthat there should be "fewer dec­ withdraw "outside the context of an overall Middle East larations of support and more concrete moves. " settlement-at the moment a remote prospect. It is equally German Catholic Bishops' Conference: The bishops unrealistic to expect the West to champion the Maronite cause issued a statement on Aug. 15 supporting the ongoing inten­ at the very moment it is seeking Syrian help on the hostage sive French diplomatic efforts to finda solution to the crisis. issue." The West can do no more than a diplomatic initiative, The statement attacks the "aim of certain groups to expel the as France has done, which will produce no immediate result: Christians from Lebanon," and calls on all politically respon­ "If General Aoun's Maronite followers persist in believing sible figures to "resist vigorously the attempt to . . . even his promises of miraculous rescue, all they will achieve is to extinguish a whole ethnic group." turn the unimaginably worse ibto the utterly catastrophic."

44 International EIR August 25 , 1989 was endorsed by President John Kennedy. And although not mentioned by name, Jimmy Carter himself comes under attack for stating that "since changes have taken place in Communism, 'the West can speed up such changes.' He expressed the belief that 'peaceful evolu­ tion' is a method for 'winning victory without battle' and that Beijing turns on people of several generations must spend their time on it. " "Peaceful evolution" measures to defeat socialism, ac­ Zbigniew Brzezinski cording to the review, include taking freedom and human rights as a pretext for interfering in other countries' internal affairs; and "carrying out ideological infiltration through the by Linda de Hoyos Voice of America and others . "

Aside from Henry Kissinger, the next most notorious pro­ Entrapping Zhao Ziyang moter of the U.S. "China card" policy has been Zbigniew Aside from serving as stem warnings to the West not to Brzezinski, who as Jimmy Carter's national security adviser take advantage of Beijing's internal weakness, the Li Peng­ was instrumental in preparing the way for the full normali­ Yang Shangkun-Deng Xiaoping clique is looking to tar its zation of relations between the People's Republic of China factional enemies with the "peaceful evolution" brush. The and the United States. In motivating this policy, Brzezinski primary target is ousted general secretary of the Communist consistently stressedthe "strategicadvantages" to the United Party Zhao Ziyang. If Zhao Ziyang can be proven to have States of such a relationship, according to New York Times been in cahoots with foreigners carrying out a "peaceful reports at the time. evolution" strategy of penetration and war against the P.R.C., Since early 1979, when relations were finally achieved, then Zhao can be brought to trial for treason and other such Brzezinski, operating out of the Washington, D.C. Center crimes. for Strategicand InternationalStudi es, traveled frequently to A July 22 article in Guangming Daily attacked Zhao for Beijing, consorting with its foreign policy think tankers and his alleged statement at the January 1987 Central Secretariat pushing his formulasfor a "multi-polar" world and a condo­ meeting that " 'no one can clearly define what the socialist minium of interests among Washington, Deng Xiaoping's road is.' In recent years, his think tank and elitists have Beijing, and Gorbachov's Moscow. written many articles to attack the socialist system of public Now, in the post-Tiananmen world, Brzezinski's labors ownership and preach the system of private ownership, there­ appear to have been in vain. Despite his advocacy of a stra­ by creating a violent trend." tegic relationwith Beijing, Brzezinski has become the prime On Aug. 8, this scheme went into action when the Public targetof Beijing's revivalof xenophobic repression. Security Ministry arrested and interrogated Chinese repre­ The attack comes in the context of Beijing's strident sentatives of the Fund for the Reform and Opening of China, ideological defense of "socialism. " In an article appearing in a private organization funded by Hungarian-American phi­ the Beijing lie/angjun Bao, called "He Who Laughs Last, lanthropist George Soros. Beijing charged that the Fund was Laughs Best," commentator Wei Guoyan attacks Brzezinski a CIA operation. The Fund did its "opening up" work in by name for his new book Gigantic Failure-The Rise and conjunction with the Chinese Institute for Economic and Fallof Communism in the 20th Century. Wei describes the Structural Reform, a think tank associated with Zhao. "China card" policy as an attempt to penetrate communism: ''They [Washington] have forcefully carried out a policy of No to the 'U.S. card' 'peaceful evolution' and 'taking away the firewood from However, the attacks on Brzezinski also signal Beijing's under the cauldron' toward the socialist countries. They sup­ determination that the United States is not a reliable ally on portand encourage all kinds of anti-socialist activities in the any count, politically or economically. The same article that socialist countries and have launched an offensive against singled out Brzezinski's latest work for attack ended with a them, which is 'greaterthan containment and cold war.' " diatribe against U.S. weakness. The United States continues Other articles have attacked Western "convergence the­ to act as an imperialist power, says Wei Guoyan, noting that ory"by name, andoutlined a history of the strategyof "peace­ "even on the small matters like the medium-range missiles fulevolution ." One such article was published in the People' s and FSX fighters, the U. S. still has the finalsa y." Daily Aug. 5, entitled "Confessions [sic] of Western Coun­ But, warns Wei, "although it is still prosperous in eco­ tries on Implementing the Strategy of Peaceful Evolution." nomic affairs, it has been turned from the world's biggest Thearticle reviews a compendium ofstatements by Western­ creditor nation into the biggest debtor nation. It looks pow­ ers on "peaceful evolution." The article notes that the peace­ erful in appearance, but weak in reality. All these are indis­ ful evolution strategy began with John Foster Dulles, and putable/acts" [emphasis added] .

EIR August 25, 1989 International 45 ileged schoolchildren. The poverty alleviation program called for making available about $75 each to poor families.

Coup threat from the JVP Compliance with the IMF's subsidy-cutting plans would most likely produce an outbreak of food riots all over the island. President Premadasa has privately expressed such fears already. But more than that, the Sri Lankan President is afraid that cutting subsidies, which will hurt the poor the IMF readies 'Pol Pot most, will provide the Janatha Vimukthi Peramuna (JVP)­ the Maoist organization which recruitsfollowers using vitri­ option' fo r Sri Lanka olic anti-India rhetoric, rabid Sinhala chauvinism, and a Pol Pot-like ideology-the dreaded momentum to push the island by Susan Maitra toward a new holocaust. In recent months, the JVP has grown in leaps and bounds. Mass killings by the Sinhala terroristsand a pall of terrorthat Those Buddhist monks who ptotested against the JVP's cam­ has settled in over the island lately, indicate that Sri Lanka's paign of mindlesskilling, are now being eliminated. During the President Ranasinghe Premadasa is getting more and more lasttwo years, theNP has killedmore than2, 000people, a large isolated. The economic crisis, which is becoming more seri­ number of whom belong to the ruling United National Party. ous every day, is now causing food shortages. In the midst Recently, the chief news editor of Sri Lanka's state-ownedtele­ of rampant coup rumors in the streets of the capital city vision station was assassinated{or his "biased" reporting. of Colombo, it has been announced that the International The threat of a coup in Colombo is a real one. The JVP Monetary Fund (IMF), which is withholding an $87 million has already made deep inroads into the Sri Lankan Army. loan until Sri Lanka kowtows fully to its demands, will send PresidentPrema dasa, in one of his recent speeches, said that a delegation to Colombo on Aug. 20. "an atmosphere of sorrow, fear, and terror has overtaken the As the crisis deepens, the stormtroopers of the JVP party country." The IMF pressure in the midst of this crisis could are waiting in the wings, modeling their "program" on the result in the overthrow of the government. genocide of Cambodia's former dictator Pol Pot, who mur­ Sri Lanka fell into the IMF lap in the late 1970s, when dered one-third of his own population. former PresidentJunius J ayewardeneopened up the country's The IMF, which has a strong grip over the Sri Lankan economy, allowing liberal importation which pushed many economy, had unsuccessful discussions in Colombo in late local industrialists into bankruptcy. Subsidies to state enter­ July, and is hoping for better this round. The Fund has rea­ prises were cut drastically. A large free-trade zone was set up sons to be optimistic: Sri Lanka, devastated by the six-year­ in 1978, as a replica of the Shannon free-trade zone in Ireland. old ethnic insurrection, is short of food, and the authorities Tax holidays, along with other fiscal incentives, were imple­ are trying desperately to import it. But suppliers consider the mented to encourage foreign investment, and offshorebanks government's l80-day letter of credit a worthless sheet of where Sri Lankan nationals cCI>uldhide their ill-gotten wealth paper. The suppliers are demanding that offshore foreign were established. Some on the island and elsewhere hoped banks independently guarantee that payment will be made. that Sri Lanka would become the Switzerland of Asia. The money to import food would have been available to The decade that followed included all-out ethnic riots Sri Lanka if the IMF had released the $87 million drawing and the devastation of the economy. Being a commodity­ on its Structural Adjustment Facility, which would have also exporting nation, of tea in particular, Sri Lanka went into unlocked $60 million already committed by the World Bank the red when international tta prices fell sharply in 1985, to ease Sri Lanka's balance of payments situation. But, in and trade imbalances began to grow. The 1986 drought, return for $87 million, the IMF has asked the Sri Lankan ethnic riots, and a free-market policy pushed the Sri Lankan governmentto make some "structuralchanges" in the econo­ economy into the abyss, and at the end of 1987, the nation my. The changes, the IMF says, are necessary to contain Sri had accrued a $3. 1 billion debt. The country's $300 million Lanka's budget deficit within 12% of the Gross Domestic foreign reserves could pay for no more than two months of Product and to slow down monetary expansion. imports. More than 26% of Sri Lanka's foreign exchange In particular, the IMF is demanding removal of subsidies earnings go to pay the foreign debt. on wheat and flour. According to some reports, such a cut With the balance of payments deficit exceeding$600 mil­ will jack the price of a loaf of bread up by 40%. Already lion in 1988, both the IMF and the World Bank, which were the Sri Lankan President has agreed to abandon the poverty pushing further trade liberalization, moved in to assure Sri alleviation program-the center of his presidential election Lanka that the Structural Adjustment Facility would be avail­ campaign-and the program for midday meals for underpriv- able-provided certain austerity conditions were met.

46 International EIR August 25, 1989 Menem's decision, announced by Defense Minister Italo Lu­ der in a July 30 radio interview, to dismiss all charges of insubordination against Seineldfn and his colleagues and re­ Bush moves against store them to their army commands. Also opposing Seineldfn are the Bunge and Borngrain Argentine military cartel and former Bunge executive Nestor Rapanelli, now finance minister. They are insisting to Menem that the pres­ ence of "fundamentalists" in the army (a slur on Seineldfn's by Peter Rush Christian faith) would destroy Argentina's credibility abroad, and that there would consequently be no support for Menem' s Six weeks aftertaking office, Argentine President Saul Car­ economic program. Without that, they say, the program­ los Menem faces a political brawl over how to resolve the and the government-will founder. nation's five-year-old military crisis-at a moment when But as of this writing, Menem has not made public his leftist insurgents are taking advantage of severe economic decision on Seineldfn. When Menem' s defeated Peronist par­ troublesto threaten social chaos. ty rival for the presidency and leader of the so-called "Renew­ The military crisis deepened with the resignation on Aug. al" faction of Peronism, Buenos Aires Gov. Antonio Cafiero, 16 of Humberto Romero, the number-two man in the Defense visited Menem around Aug. 15, reportedly to pressure him Ministry, and persistent reports that President Menem has to dump Seineldfn, Menem angrily threw Cafieroout of his decided to retire around 30 nationalist officers, including office. In the army itself, one colonel and three majors who Col. Mohamed Ali Seineldfn, for whom Romero was consid­ had backed Seineldfn ally Lt. Col. Aldo Rico in earlier mili­ ered a spokesman. tary actions, were ordered reinstated, the Financial Times of Seineldfn is backed by the majority of officersand enlist­ London reported Aug. 18. ed ranks, ever since he led a military action last December that won pay increases for the army , and promises of eventual Left subversive danger grows amnesty for about 20 officersnow in jail or under indictment Inflationhas fallen from 197% in July to 30% in August, for crimes allegedly committed during an anti-subversive but Argentina's economic depression continues to worsen. campaign in the late 1970s. Seineldfn, a strong anti-Com­ Labor groups report that unemployment is at 21% and rising, munist, has been a hero in Argentina since the 1982 Malvinas wages are still well below even minimal subsistence levels War, and internationally admired by anti-Bolshevik resis­ for millions of people, and hunger and malnutrition are se­ tance fighters ever since his courageous December action. vere. The government has begun a number of programs to But he is hated by a liberal clique of generals, and by social provide food, and in some case medicines, to the poorest democratic and some Peronist politicians in the country­ people, but the governmenttreasury is empty, and the mea­ not to mention the Bush administration, which has brazenly sures so far are not nearly adequate. A social explosion is demanded that Seineldfn be cashiered. only a matter of time, and leftist subversive groups that intend The State Department, acting on behalf of President Bush, to exploit that explosion are proliferating. sent Menem a message saying that Seineldfn would have to Intelligence-linked sources in Buenos Aires have report­ be eliminated from the army if Argentina was to receive ed to EIR that the subversives have set up an impressive political support from the United States. Seineldfn' s presence infrastructure of cells and propaganda dissemination. Some in the army would destabilize democracy and lead to insta­ of these groups are linked to foreign terrorists, like Peru's bility which would impede good U.S.-Argentine relations, unspeakably savage Shining Path. These groups are putting U.S. Ambassador Terrence Todman informed Menem. Me­ into place the basis for provoking and leading the most des­ nem was warned that if Seineldfn stayed in the army, he perate Argentines in lootings and uprisings, such as occurred would become the "Noriega of Argentina," and that Menem in the city of Rosario in late May. This time, it will be far himself would "become a puppet like [Panamanian Presi­ worse. dent] Manuel Solis Palma." The two largest groups, All for the Fatherland Movement This crude message is rather dramatic confirmation that (MTP) and People's Revolutionary Army (ERP), staged a U.S. efforts to overthrow Panamanian Defense Forces com­ simulated "mass insurrection" in the town of Morena at the mander Gen. Manuel Noriega, are just a warmup for elimi­ end of July. Four hundred slum dwellers joined with about nating all of South America's nationalist military leaders; 1,100 leftists in a looting spree. The insurgents organized apparently they disrupt the power-sharing deals being made themselves into "combat units," and used sophisticated with Gorbachov's Soviet Union. equipment. Representatives of leftist groups held a series of The fear that the U.S. would treat Argentina like Pana­ regional meetings in July to practice urban guerrilla tactics. ma-which has been hit hard by economic sanctions and If the Argentine military faces this crisis disarmed and de­ military threats-may account for the apparent reversal of moralized, Moscow can thank George Bush.

EIR August 25 , 1989 International 47 The strategic dimension behind Europe's current 'religious wars' by Muriel Mirak

At the highpoint of the summer vacation in Europe, marked established for the move-Feb. 22 of this year-was post­ in Catholic countries by the feast of the Assumption of the poned for fivemont hs. On July 14, when the Carmelites still Virgin on Aug. 15, what looked like a religious controversy had not moved out, Rabbi Avraham Weiss of New York took on an uncanny form and rapidly escalating proportions. climbed a fence to enter the convent grounds, protesting that An American Jewish rabbi leads a group of followers to the nuns' presence was a desecration of the memory of the penetrate the silent confines of a Carmelite convent located Jews killed there. Rabbi Weis�'s group, the Coalition of at the site of the Auschwitz concentration camp. A group of Concern, continued the protest against the alleged "occupa­ Polish construction workers, who happen to be on the scene, tion" for days. Rabbi Weiss was accompanied by Glenn do the obvious, and repel the invaders by force. The archbish­ Richter, an activist in the Student Struggle for Soviet Jewry op launches fieryattacks against "certain Jewish circles" for and a close friend of Mordechai Levy, an American terrorist their lack of respect for the nuns; spokesmen, self-styled as (see article, page 60). well as official, for the world Jewish community, respond On July 19, Israel voiced its concern regarding how the with anger and dark insinuations. Pope John Paul II makes protesters were being treated. By July 23, an estimated 100 references to the "infidelity of Hebrews" in the Old Testa­ Jews from Western Europe were reportedly demonstrating, ment, and in response, accusations of anti-Semitism are and Israel's Holocaust Remembrance Authority issued a hurled at him. protest. One would have thought that new wars of religion had On the Polish side, the episcopate's Commission for broken out in Europe. Dialogue with Judaism responded to the protests on July 20, Although a number of important theological and philo­ with a statement that "any violation of law cannot contribute sophical issues worthy of deep consideration (like the concept to the solution of the conflict." Then, on Aug. 10, Cardinal of martyrdom and the function of prayer, as viewed by the Marcharski issued a statement announcing that the center Judaic and Christian traditions) are embedded in the affair, would be impossible to realize, due to the "violent campaign the very unusual form of the mid-summer escalation, viewed of accusations and defamation, and offensive aggression" within the broader context, would indicate rather that the fun­ launched by "some Western Jewish circles," in an evident damental religious conflict were of an eminently political reference to Rabbi Weiss. nature. At this point, the press campllign began, fueling the flames First, the facts. of controversy. Milan's dail y Corriere della Sera asserted that Since August 1984, a group of 14 Polish nuns has estab­ the Pope was behind Cardinal Marcharski's statement, when lished a Carmelite convent along the walls enclosing the in fact, as the newspaper of the Italian bishops conference, Auschwitz concentration camp. They are revered by the Avvenire, specified, "the cardinal's declaration cannot beat­ Poles, who view their presence there as bearing constant tributed to the Holy See." Cardinal Decourtray of Lyons, witness, through prayer, for the victims of Nazism. Opposi­ France, who had led the deleg/litionto Geneva for the accord tion to their presence came from parts of the Jewish commu­ in 1987, entered the debate calling for comprehension and nity who urged that the site remain a museum-camp, a the maintenance of the Jewish-Christian dialogue at all costs. reminder of the Shoah, the Holocaust against the Jews. Emphasizing the "need for mutual respect, in order not to In 1987, an agreement was reached in Geneva between harm the memory of Auschwitz," he called for the original delegations of Jews and of Catholics, that within two years, agreement on building the ecul1jlenicalcenter to be respected. the convent would be transferred 600meters away, where an Immediately, spokesmen for the Jewish delegation that had ecumenical center would be constructed, for "information, been present in Geneva, officiallyendorsed his stand, calling education, meetings, and prayer." Signators to the agree­ for "reciprocal respect for the victims of Auschwitz, both Jew­ ment included Cardinal Franciszek Marcharski, successor to ish and non-Jewish." (In July , Cardinal Decourtray had apolo­ Karol Wojtyla in Krakow, and Cardinal Decourtray, presi­ gized for the delays in constructing the center, pointing to dent of the French Bishops Conference. real obstacles, of an administrative as well as psychological Due to delays in readying the new center, the deadline nature, rendering the transfer of the convent difficult.)

48 International EIR August 25 , 1989 From the United States, Rabbi David Rosen, a Jerusa­ But there is more . This Pope, as Elon Steinberg and others lem-based representative of the Anti-Defamation League, will readily acknowledge, is challenging the condominium took issue with the Pope's references to the "infidelityof the arrangement between Moscow and Washington where it hur­ Hebrews." Prof. Yirmiyahu Yovel of Jerusalem charged the ts: in the heart of the East bloc. For it is also this Pope who has Pope with having launched a "political attack" against the overseen and encouraged the most ambitious, and successful Jews. He further warnedof the "danger of racism," insinuat­ drive to restore the rights of Catholics behind the Iron Cur­ ing that Poles and Catholics were racists who had endorsed tain-not only in Czechoslovakia, where he has nominated the Holocaust. four archbishops, and Hungary, where restrictions on believ­ ers are to be relaxed, but above all in Poland, the nation whose The broader context role within the captive nations is absolutely key. While it is easy to see how an issue so emotionally As if by coincidence, on the very day that Rabbi Weiss chargedcould unleash a violent debate, it is difficultto grasp and his followers were staging a sit-in at the Carmelite how John Paul II, the Pope who has developed the dialogue convent, Poland and the Vatican officially announced the withJudaism to unprecedentedheights , could be so accused. restoration of diplomatic relations. This step had been pre­ Was it not, after all, this pontiff who, entering the Rome pared carefully over years; in 1987 during his trip to Poland, synagogue, officially exculpated the Jews from charges of John Paul II had stressed to the Polish bishops that such a "deicide," and redefined the political nature of the persecu­ step could occur only when it were credible to the Polish tion of Christat the hands of the Romans? Is not he also the nation, whose rights the Church has defended in its history. Pope who paid homage to the victims of Nazi oppression, by The Pope emphasized that diplomatic relations would help canonizing Father Kolbe and beatifying Edith Stein, both lend real sovereignty to Poland, by helping establish sover­ Auschwitz victims? eign rights for its people. When, in May 1989, the state In the Italian press, precisely these acts have been cited, granted legal status to the Church in Poland, it became clear to allege that "the Jews fear" that the Vatican wants to "Chris­ that the Pope's demands for such steps were being heeded tianize the Holocaust" and thus "let the Shoah, with the pass­ by the government, which was fully aware of the political ing of time, lose meaning" (Corriere della Sera, Aug. 11). weight represented by the Polish Catholic Church. With the Such appearsto bethe view ofRabbi Weiss, who is quoted as diplomatic ties reestablished, the Polish Church has consoli­ having said, while charging the Carmelite monastery, "You dated institutional ties with the universal Church, thus gain­ don't pray for Jewish martyrs, they weren't Christians." Such ing certain internationalguarantees for its freedom of activity is indeed the view of the Edgar Bronfman wing of the World which it did not enjoy before . Jewish Congress, whose spokesman Elon Steinberg charged Such developments are to be welcomed by all those who thePope with 'tryingto "de-Judaize the Holocaust." treasure freedom of religion and share the hopes of not only But that is not the whole story. the people of Poland, but also those of Czechoslovakia, The enemies of John Paul II who are members of the Hungary, the Ukraine, other captive nations. Yet, as the Jewish community are identifiedwith EdgarBronfman' s fac­ protagonists of the carefully constructed Ostpolitik of the tion, Henry Kissinger, Rabbi Weiss, and others. Their oppo­ Vatican are well aware, such developments are fraught with sition to the Pope certainly is grounded philosophically on dangers, for they implicitly challenge the status quo now their rejection of his "New Covenant" doctrine, which they reigning within the East bloc and between "new Yalta" have attacked as "prejudicial" and "anti-Semitic." But their circles in Washington and Moscow. As a Ukrainian expert animosity also has a distinctly political aspect, relating di­ of religious and ethnic problems in the Soviet Union recently rectly to greatstrategic conce rns. John Paul's enemies dislike stated in an interview with the Italian newspaper Nuova him for his policies in the Mideast and, above all, vis-a-vis Solidarieta, "The Russians fear the Ukrainian Catholics for theEast bloc. three reasons: 1) they fear a mass conversion to Catholicism In the turbulent Middle East, the Pope has pledged his of the people in that region; 2) they fear a Ukrainian Catholic undying supportfor the national resistance forces of Lebanon Church because it expresses the desires and aspirations of around the Christian community, and against all those proj­ citizens for national independence; 3) they are afraid because ects, promoted by the likes of Kissinger and Bronfman, a Catholic Ukraine would be closer to the West." aimed at dismembering the nation of Lebanon. There are in What is true for the Ukraine, is also true for Poland. And Israel, as well, certain groupings allied to Bronfman who it is this policy, being implemented through the pontificate are engaged in diplomatic efforts with the Soviets, aimed at of John Paul II, which constitutes a threat to the "New Yalta" obtaining the release of hundreds of thousands of Soviet agreements sealed by Gorbachov and Bush-and supported Jews, in exchange for Israel's acquiescence to a newly drawn by a clearly definedfaction within the Jewish community­ Middle East map. This, the Vatican seems concerned to pre­ according to which the birth of sovereignty for the nations vent; thus, the Pope is standing up to the Soviets' global behind the Iron Curtain would only disturb the existing agreement with the United States. spheres of influence.

EIR August 25, 1989 International 49 The Bronfmans: Part I

A crime family turned respectable

Carol White recounts the criminal history and political-intelligence links qf the fa mily qfthe man some call Armand Hammer's political heir.

Recent years have seen Edgar Bronfman, of the Bronfman documented. The major public assets of the Bronfmans are liquor dynasty, propelled into a position of greater and greater still located in the liquor business which they dominate under political power as part of the "invisible government" which 61 whiskey labels, such as Calvert, Seagram's, Chivas, and has never been elected, and yet decides the key questions of popular brands of gin, vodka, rum, and over 250 different foreign and economic policy for the West. The rise to power wines and champagnes. of the Bronfman familyhas been paralleled by the decline of One way that drug and other hot money is typically laun­ the United States. From overtly criminal beginnings, they dered is through real estate speculation, gambling casinos, have engineered for themselves an accepted position among and sports events. The Bronfmans have major speculative the elite. Their power reflects the criminalization of Ameri­ real estate holdings throughout the United States, in stad­ can justice, which has substituted police-state abuses against iums, shopping centers, and other developments. They own honest republican tendencies, for the prosecution of crime. Cadillac Fairview and Trizec, both major holding compa­ The Bronfmans represent a less well-known facet of the nies, and they own the fifth-largest U.S. oil independent, phenomenon associated with Henry Kissinger and Armand Texas Pacific Oil Company, which has holdings in Dubai, Hammer. While the Anglo-American elite is run by families Thailand, Spain, Kenya, the Philippines, the North Sea, and who cherish their pedigrees, it is quick to assimilate useful Mexico. The Bronfmans are the largest private landowners agents such as Kissinger, Hammer, and Bronfman-men in Canada and have the largest Canadian interest in British whose zeal to line their own pockets is only thinly masked American Oil Company and major holdings in Bell Tele­ by their political facade . Such Soviet agents of influence are phone of Canada. working to draw the United States into accepting a new "Yal­ They are part of the British Eagle Star insurance con­ ta" agreement with the Soviets which would transform the glomerate, which functions with Kissinger Associates in in­ world into a malthusian, police-state nightmare. ternational operations to controloffshore banking, either di­ There is a section of the Anglo-American elite which rectly or through the agency of the many banks with which agrees to this because they wish to repeat the Hitler experi­ they are associated, such as the Bank of Nova Scotia and the ment in the West-with the new twist, of first destroying Bank of Montreal-and through their connections by mar­ nations as such, and introducing universal fascism instead of riage to the financialempires of the powerful Rothschild and national versions. To carry these policies out, these traitors Gunzberg families. need to assimilate criminal elements into their ranks . They are also an important factor in the entertainment world. They own stock in Curtis Publishing Company and Who are the Bronfmans? Paramount Pictures and Metro-Goldwyn-Mayer. The aggregate assets held by the various branches of the Because they are a Jewish family, they have cynically Bronfman family were estimated to be $7 billion in 1978, by bought their way into control of NorthAmerican Zionism by Peter C. Newman in his book King of the Castle. Today, their generous contributions to Israel. This has given them a with their stock in the DuPont Corporation, the Bronfmans significant measure of political clout as a lobbying force in are ready to· reap windfall profits from the environmental the United States, Israel, and Canada, which they have de­ hoax that chlorofluorocarbons must be banned in order to ployed to support economic measures to their own benefit, protect the ozone layer. DuPont has cornered the patents on not least a liberalpolicy toward drug enforcement. Politically the only replacement refrigerants in sight. they have thrown their weight behind "Red billionaire" Ar­ The family got its economic start during Prohibition when mand Hammer, and the pro-Sovietlobby . they were given the franchise on BI"i:tish liquor entering the The Bronfman family emigrated to westernCanada from United States through Canada. They were also involved in the Russian empire in the late 1880s. At firstthey farmed and drug trafficking, but this aspect of their operation is less easily worked in construction, but as the children grew up they

50 International EIR August 25, 1989 moved into the hotel-prostitution business, afterthe construc­ tion of the Canadian NorthernRailway line. With Prohibition in the United States, they were able to connect with U.S. criminal networks. One device they used was to establish a pharmaceutical wholesale house, the Can­ ada Pure Drug Company at Yorkton, as a cover for the sale of liquor and narcotics-in the guise of tonics. They received the patronage of the Hudson's Bay Company and they were given the contract to sell Dewar's whiskey. Edgar Bronfman. Their practice was to buy British brands and then dilute liquor magnate and these, selling them to a U.S. market under similar sounding Soviet agent of names. They ultimately entered an arrangement with the influence Distillers Company of Edinburgh and London-an 1877 amalgam of British distilleries which controlled over half of engage in narcotics trafficking as a means of off-budget fi­ the world's Scotch market-giving the Distillers a 50% share nancing for their enterprises as well as for the purpose of of their bootlegging business in return for the steady flowof recruiting criminal elements, willing to carry out dangerous British supplies. In 1922 a Bronfman brother-in-Iawm, Paul intelligence missions. Matoff, was executed gangland-style by the Chicago mob. When Minda Bronfman married the Baron Alain de Although frequently threatened with prosecution, the family Gunzberg in 1953, the family became a part of the most escaped jail due to the tacit complicity of the Canadian gov­ aristocratic circles of Jewish families. The Odessa Gunzburg ernmentin the illicit but profitable trade across the border. family had been bankers to the Tsar, although their family When Prohibition ended, the Bronfmans wished to enter title was granted by the Hapsburgs of the Austrian empire. the U.S. market as legitimate distributors, but the Distillers Alain de Gunzberg is managing director of the Banque Louis­ gave their franchise to Joseph Kennedy instead. Nonetheless Dreyfus, France's third-largest merchant bank, and is closely the Bronfmans prospered, due to support from the Lansky­ tied to the Rothschilds in the Club Mediterranee. The Gunz­ Rothstein mob in the United States, and they were able to burgs have opened European liquor and wine markets to the establish their own brands of liquor. Bronfmans. And more important, they have consolidated a Not coincidentally, other political influentials, namely pro-Soviet political faction within world Jewry. Armand Hammer and the Kennedy family, also got their start through illegal trafficking in drugs and liquor. According to The British major John H. Davis, in his book The Kennedys. Joseph Kennedy For a small-time immigrant family to achieve the promi­ was described by several major underworld figures as one of nence of the Bronfmans, they must have been acting as front­ the most ruthless competitors in the bootlegging business men for other forces. The obvious hypothesis is that they throughout the 1920s and early 1930s. Armand Hammer and were set up in business by the Hudson's Bay Company, his father also entered the liquor business during Prohibition, which has historically been connected into the opium trade. forming the Allied Drug and Chemical Company, which like As the family prospered, they were given a limited franchise the Bronfman operation, supplied narcotics as well as liquor by the Distillers Corporation, only to be cut down to size to customers . when Prohibition ended. Historically, the opium trade was run through the British The Bronfmans were sufficiently well-connected, how­ East India Company, and was central to imperial policy. This ever, to maintain and extend their position despite the British. tradition continued when U. S. Prohibition became the pre­ Thus they carved out a certain independent role. They were text for the criminalization of society in the United States, helped along by the law firm of Phillips, Bloomfield, Vine­ Canada, and Great Britain. Not only was cafe society the berg, and Goodman, which organized financing for the ex­ meeting ground for criminals, the Hollywood crowd, and pansion of Seagrams into the United States. The firm was degenerate socialites-what became the jet set-but it gave founded by Maj. Louis Bloomfield, a lawyer for the Bronf­ the occasion for integrating the mob into Hollywood on a mans until the late 1960s and an adviser to them from the grand scale. 1930s, until his death in the mid- 1980s. It is well known that sections of the mafia were used by Bloomfield was the successor to Sir William Stephenson the U.S. intelligence services during World War II. The links as head of the British Special Operations Executive (SOE) in between organized crime, misadventures in Cuba in the Ken­ North America. He has also been implicated in the assassi­ nedy era, and the plot to assassinate the President are too nation of President Kennedy. He was recruited into the (SOE) well-worked over to bear repeating here . They should be in 1938, the year that British intelligence was allowed to set bornein mind in connection with the more recent Iran-Contra up shop in the United States. Under this agreement, Bloom­ scandal , which has revealed that U.S. intelligence services field was given an officer's rank in the U.S. Army and sec-

EIR August 25 , 1989 International 51 onded to the wartime intelligence service, the OSS. He also head of V.S. Army R&D; Richard Bissell, the former direc­ worked with J. Edgar Hoover on counterespionage. tor of operations for the CIA; and various other retired V.S. After the war, Bloomfieldreturned to Montreal to resume army officers. his relationship with the Bronfmans; however, he continued During the pre- 1979 period, Space Research sold to Iran his intelligence activities, and in 1958 formed a private intel­ howitzers capable of firing shortrange tactical nuclear war­ ligence operation known as Permindex (Permanent Industrial heads. When the Iranian revdlution began, the Bronfmans Expositions), which was incorporated in Switzerland and sold their shares in Space Researchto Saad Gabr. housed in Montreal . Permindex is rumored to have operated as a high-level Murder, Inc . and this is substantiated by the Israel, a pawn in the Bronfman game action of French President Charles de Gaulle, who exposed Peter Bronfman has recently bought a share of the Jeru­ their role as a conduit for secret funds into the SecretArmy salem Post, along with Henry Kissinger and former NATO Organization (OAS), which was implicated in the 1962 at­ secretary general Peter Carrington, through the Hollinger tempt on his life. As a result of this, Major Bloomfield's Corporation. But it is Edgar, as head of the World Jewish name was removed from the letterhead of his law firm in Congress, who wields the most clout in Israel. 1968 , although he was in an active role as a consultant to the The Bronfmans have huge political leverage in Israel, Bronfmans. because they have the flow ofJewish philanthropy. Newman Documentation exists that the Bronfmans themselves have describes how this works . In 1978, the family on average been directly involved with intelligence operations. A firm would contribute about $2 million annually to the state of called Space Research was formed in 1968 as a partnership Israel through the various Jewish charities. In 1962 they between the Allan Bronfman wing of the family-now rep­ contributed an additional $1 million directly for construction resented by Allan's sons Edward and Peter, and A.D. Little, of a new wing for the Israeli Museum in Jerusalem. In Canada Inc . That firm was ostensibly formed to build howitzers ca­ alone, Sam Bronfman would typically pledge 10% of what­ pable of firingwarheads into space. It operated, however, as ever fundraising goal he was setting for the Jewish commu­ a cover for the smuggling of arms under the sanction of V . S. nity as a whole. and British intelligence. Prominent members of Space Re­ The role being played today by Edgar Bronfman parallels search's board included Lt . Gen. Arthur Trudeau, the former that recountedby author Ben Hecht in his tragic book Perfidy, �M IDDLE EAST­ CONSOLTING . INSIDER ARB0 RIST Available to Assist in Weekly Confidential Newsletter

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52 International EIR August 25 , 1989 the storyof how the eastern European Jews were betrayed by tensibly "liberal" opponents of the kind of fundamentalist Jewish traitors during World War II. The majority of Jews politics presented by Sharon, nonetheless they are secretly were heldhostage to what was perceived as higher questions involved in economic deals on the West Bank which are only of policy by certain factions of world Jewry who were willing made possible because of the fundamentalist movement to cover up the true extent of Nazi atrocities. Bronfman has Sharon has encouraged. attempted to achieve a bargain with the Soviets which would While liberal Western Jewry is opposed to such extremist only allow emigration by Soviet Jews directly to the state of factions in Israel, the role of Edgar and his brother Charles Israel, preventing them from seeking asylum in the United Bronfman, has been duplicitous. They were willing to col­ States or Western Europe, which many would otherwise laborate with the crazies in order to tum Israel into a major choose. center for organized crime, including gun and dope running A feature of this deal has been Israeli intelligence com­ and money laundering. Max Fisher and Meyer Lansky (both plicity in passing on U.S. secrets to the Soviets. This was collaborators of the Bronfman family during their earlier revealed in the famous Jonathan Pollard spy case and is openly criminal days) were key in these plans. probably also the reality behind the current Felix Bloch es­ Indeed, the mutual interest in this nefarious scheme was pionage affair. Edgar Bronfman is a member of the U.S.! shown in the spring of 1982, when a meeting was held at the U.S.S.R. Trade and Economic Council, which is not only a ranch of Ariel Sharon, at which Kissinger and the Bronfman pro-Sovietlobby, but a conduit for passing technology to the lawyer, Maj. Louis Bloomfield, were present to hammer out Soviets. policy issues which included the Israeli invasion of the Le­ The now aged Armand Hammer, upon whom Edgar banon. A later meeting, on Nov. 15, 1982, included Lord models himself, has been the most important single agent Harlech, Prince Johannes von Thurn und Taxis, former Sec­ representing Soviet interests in the West. Although born in retary of State Alexander Haig, Lord Carrington and other the United States, he was the child of socialist Russian im­ notables. Plans for massive investment in the West Bank migrants, and fromthe time of the Bolshevik Revolution on, were discussed, but were postponed due to opposition from he worked as a part of the Soviet foreign-intelligence capa­ Israel's Begin government. bility known as "The Trust." The Trust was an interface Israel's future could well be sacrificed to these greedy between the Soviets and those in the West who were willing schemes. The present bloodbath in the Lebanon is a harbinger togive them financial andother assistance. While the Bronf­ of the destruction which will befall the whole region, unless mans are also Russian emigres, their Soviet interests would the present insanity is curbed. Religious fundamentalism is seem to be a subsumed feature of their efforts to place them­ only the detonator; peace in the Middle East depends upon selves in a position of economic and political power, and they economic solutions for the area. Shimon Peres's call for a maintain close ties with British intelligence. Marshall Plan for the Middle East, which has been ignored, is the only path to peace. It would require assistance from the Landscam and fundamentalism United States to create the kind of economic infrastructure The idea behind the modem-day Trust-sin ce the 1950s, which could transform the Middle East, and allow Israel with when the Soviets got the bomb and could attempt to dictate a its advanced technology, to play a key role in developing the partnership with the West-was the kind of New Yalta con­ region. dominium arrangement which is now increasingly dictating The Bronfmans, Henry Kissinger, and Lord Harlech world politics. (Kissinger's collaborator in the West Bank land-grab) think To create such a political shift, massive cultural engi­ otherwise. They were willing to cynically betray the national neering was necessary. One way was to spark small local aspirations of Israel, and hand over the Lebanon to the Soviet warswhich could be contained, and which would provide the client state, Syria. They chose to play a geopolitical game in pretext for renegotiating national boundaries, creating the service of The Trust with obvious implications, as well, for conditions for supranational agencies to seize control of re­ the supply and price of oil in a declining world economy. gional blocs. To further this end, the Soviets and their West­ While stabbing Israel in the back, Edgar Bronfman has ern allies in The Trust have fomented fundamentalist move­ cynically waved the bloody shirt of the Holocaust to justify ments, with terrorism, including the seizure of hostages, as abuses against German and Eastern European naturalized a by-product. Americans who were accused of having Nazi pasts. KGB In Israel, extremists sponsored by Ariel Sharon have been files were used by the Justice Department Office of Special in the forefront of the settlement of the occupied West Bank Investigations, without corroboration and in some instances by Jews. At the same time, Muslim fundamentalism is being in contradiction to other evidence, and these citizens have sponsored by the Soviets and by left-wingers and the social been summarily deported-in the case of Karl Linnas, to his democracy. Intelligence services on both sides of the Iron death on arrival in the Soviet Union. Bronfman's World Curtain have played a large part in spawning these fanatical Jewish Congress officially supports the OSI's actions in de­ movements. While the Bronfmans, as representatives of the nying these naturalized Americans their constitutional right European and North American Jewish communities, are os- to a fair hearing for their alleged war crimes in a court of law.

EIR August 25, 1989 International 53 Report from Bonn by Rainer Apel

Gorbachov backs East Berlin regime These remarks did not draw much Moscow has given explicit approval to East Germany's attention in Bonn, but the message was not lost on many East Germans, who crackdown on those trying to emigrate . drew the conclusion that legal emigra­ tion to the West and "illegal" escape will only be possible until Oct. 7 -the date of the 40th anniversary celebra­ Recent developments in Red China, On Aug. II, Kohl, clinging to his tions of East Germany as a (Moscow­ the Soviet Union, Poland, and Hun­ illusion that joint crisis management controlled) state. After Oct. 7, they gary were but a distant peal of thunder with the East German regime is still surmised, the borders would be closed for most West Germans. But now, with possible, sent a personal message to and the SED regime would crush its refugees flooding into West Germany SED party leader Erich Honecker. Re­ own opposition, possibly by the same by the thousands, the crisis of the ceiving no officialrespon se, Kohl sent methods used by the regime in Red Communist system which many, in a second message on Aug. 15. Ho­ China. their "Gorbymania," had forgotten, is necker's response was: There is no Then, on Aug. 13, Gorbachov, right on their doorstep. need for a change. through a spokesman, dropped his lib­ The dramatic occupation and siege One line of wishful thinking in eral mask, and stated support for the by desperate East Germans of West Bonn has it that the SED regime is SED. Speaking on the occasion of the Germany's diplomatic missions in East somehow going out of control, and 28th anniversary of the erection of the Berlin and Budapest, Hungary, and that since the Kremlin has no way of Berlin Wall, the deputy speaker of the the setting up of soup lines and tent intervening, the SED is operating Soviet foreign ministry , Vadim Perfi­ camps by the Hungarian Red Cross for "against Gorbachov. " lyev, declared full solidarity with the the refugees outside the closed West But that illusion was shattered by SED regime and the Berlin Wall. Per­ German embassy in Budapest, caught news that the SED regime's hard line filyev-who had threatened Poland the government in Bonn in a state of was worked out in close contact with only two days before-said that the deep stupor. the Soviets, at a special emergency "building of the wall only reaffirmed In the midst of the traditional sum­ session of the so-called "SED security the status quo as that which existed mer recess, with its illusion that the troika." This innermost body consists then." He expressed "confidence that world's problems have faded away, of Erich Mielke, the minister of state the government of the G.D.R. [East the government's lack of a sound pol­ security (the infamous Stasi); Joachim Germany] will continue its policy of icy for relations between the "two Herrmann, party Politburo member in creating a socialist society on German Germanies" became more and more charge of state security matters; and territory. " obvious, as the massive influx of ref­ Erich Honecker himself. Honecker, Two days later, the East German ugees and emigrants from East Ger­ who for the past four weeks has been foreign ministry summoned the head many required a rapid official re­ in a hospital for emergency gall blad­ of the West German mission in East sponse from Bonn. A public opinion der treatment, may have delegated his Berlin, Franz Bertele, and accused his poll by the Wickert Institute indicated functionon the "troika"to Egon Krenz, governmentof "severe violation of in­ that 87% of all West Germans wanted one of the chosen candidates for the ternational law," by having the West Chancellor Helmut Kohl to cancel his party leadership succession (expected German embassy in Budapest provide vacation right away and personally in the early 1990s), and himself an old passports to G.D.R. citizens. take care of the crisis. hand in state security matters. Meanwhile, the East German re­ But the chancellor, his cabinet, and Herrmann and Krenz were among gime was telegraphing the coming most parliament members decided to the SED party leaders who were most crackdown in media commentaries, remain inactive, with one exception: outspoken in support of the Red such as the one on Aug. 15 in the par­ Christian Democrat Eduard Lintner Chinese regime in the days following ty-controlled ADN news agency: called for economic and credit sanc­ the cruel massacre on Tiananmen "Stability at this highly sensitive bor­ tions against East Germany's ruling Square this past June. Both Herrmann der between imperialism and social­ communist party, the Socialist Unity and Krenz hailed the "crushing of the ism is essential also for the success of Party (SED). His call received a hos­ counter-revolutionary upsurge" by the the reform process in the Soviet tile officialrespon se. Beijing regime. Union."

54 International EIR August 25, 1989 Panama Report by Carlos We sley

U.S. maneuvers simulate invasion any other country, has paid and con­ President Bush talks of "fr iendly invasions," but the tinues to pay a high cost in the war against drug trafficking." Even as he provocations against Panama are not exactly friendly . spoke, the drug traffickers assassinat­ ed yet another Colombian judge and a policeman. In fact, the United States is the The u. S. forces in Panama staged sacre of 250 Marines in Lebanon. world's number-one producer of mar­ "command-wide" exercises on Aug. The attacks against Panamanian ijuana. 17, involving the Army, Navy, and sovereignty were carried out under the Panamanian sources noted that the Air Force, with a massive arrayof mil­ cover of administration's so-called war U. S. drug indictment against Noriega itaryhardware . The troops secured the on drugs. At a news conference Aug. was fabricated long after the U.S. 10 military bases the United States 15, President Bush maintained that he government determined to get rid of maintains in Panama, and rumbled had "an obligation" to kidnap General him in a shameless bid to keep the trough Panama City in armored per­ Noriega. "We have an indictment out Panama Canal and the American mil­ sonnel carriers and tanks during the against General Noriega for drug traf­ itary bases in Panama past the year exercises, described by the Pentagon ficking," said Bush. "I am not saying 2000, when they must revert to Pana­ as the largest conducted by the U.S. what I would do or wouldn't do, but ma according to the 1977 Carter-Tor­ Southern Command since the Bush there was a case where a man named rijos Canal Treaties. administration stepped up its war of Y ounis was apprehended and brought In fact, they said, the Bush admin­ nerves last July against the Panama­ to justice," he said, refering to the 1987 istration's war against Panama has nian government and Gen. Manuel capture of Lebanese airliner hijacker served to protect drug money- laun­ Noriega. Fawaz Younis by U.S. authorities. dering, drug trafficking, and "to pro­ The exercises were the latest in a Bush also announced that the U . S. mote the growth of a narco-oligarchy series of provocations by the Bush military will carry out "friendly inva­ in Latin America." The Bush admin­ administration in the last few weeks, sions" of other nations to fight drugs. istration came to the defense of the which have heightened concern in This confirmed repeated warnings Panamanian Broadcasting Company lbero-America that the United States made by the Panamanian government (RPC) afterthe governmentattempted is on the brink of becoming mired in a that the American attacks against it to crack down against it on Aug. 16 new Vietnam-style war in Panama that were a test case to be applied to all the for failing to pay $5 million in taxes. could involve other nations on the nations of the hemisphere. RPC is owned by the Eleta brothers, continent. On Aug. 11, a shooting war As to how "friendly" the invasion Carlos and Fernando,Panama 's weal­ almost broke out between Southcom would be, Los Angeles Police Chief thiest family. In April of this year, and the Panamanian Defense Forces, Darryl Gates, who helped the Bush Carlos Eleta, who at the time was after Panamanian traffic police de­ administration develop the plans, said working with the U.S. governmentto tained several private vehicles carry­ that the Ibero-Americans are doing "a bring down Noriega, was arrested in ing heavily armed American soldiers lousy job" fightingdrugs . "They need Macon, Georgia for conspiring to bring in civilian clothing. help ...but once again, the bottom 600 kilos a month of cocaine, valued Several Ibero-American sources line has to be that they do something at $300million, into the UnitedStat es. fearthe Bush administration may see about it, and if they don't, we will." Panamanian President Manuel the possibility of an easy military vic­ But few in Ibero-America were Solis Palma noted, in an article pub­ tory in Panama as a cheap way of res­ buying the administration's cynical lished by the Mexican daily Unoma­ toring the U.S. image as a great pow­ ploy of destroying national sovereign­ suno on July 28, that while the United er, after its appeasement of the hos­ ty in the name of a war on drugs. "The States has tried to shut down Panama's tage-takers in the Middle East. The Green Berets should invade Los An­ banking center, arguing that it laun­ Reagan-Bush administration's 1983 geles and New York and other Amer­ ders drug money, "the more than $20 invasion of the tiny Caribbean island ican cities where drugs are sold on billion that leftPanama in the last two of Grenada, say these sources, also street comers and openly consumed," years ended up in banks in Miami, followed the U.S. do-nothing re­ said Colombian Foreign Minister Ju­ where they changed the laws to take sponse to the terrorist bombing-mas- lio Londono. "Colombia, more than deposits without too many questions."

EIR August 25, 1989 International 55 Andean Report by Javier Almario and Carlos Mendez

On political defeatism drug-linked FARC guerrillas-to be The Colombian military is warning that the country's politicians elected to Congress. The referendum would also seek don't want to win the war against subversion. approval for a so-called "right to peace," which would tum the Barco government's permanent "peace dia­ logue" with the guerrillas into a "na­ , T here is a serious risk that, be­ broader manifestations, and we can tional mandate" binding upon future cause of the psychological effect of see how they are played out in the governments as well. the guerrillas on the clergy, politics, political, economic, social, and labor As if!this weren't sufficientcause the unions, and other sectors of na­ arenas. Therefore, the Army and po­ for despair, the Council of State has tional life, the state is assuming a po­ lice, taking unified and forthright ac­ just established a new interpretation of litical defeat" by terrorism, warned the tion against these organizations, are the law according to which every time Defense Ministry in its "Memoran­ not going to win the war. The war the Armed Forces' use of arms results dum to the National Congress (1988- must be won through action, by apply­ in a death, that action would be con­ 1989)," written by former Defense ing the capacities of the state on all sidered a priori an "undue use" of Minister Gen. Manuel Jaime Guerrero fronts. " force. In effect, the Army is now Paz. However, President Virgilio Bar­ obliged to seek the Council of State's The report, published Aug. 1 by co is not listening to his own military's permissi0n to use its weapons each the Bogota daily El Siglo, also charges warnings: He is listening to the siren time it encounters terrorists in battle. that some members of the Armed songs of the narco-terrorist groups The only problem is that by the time Forces are abstaining fromcombat "out controlled by Moscow and Havana. the Council of State determines that of fear of followup action by the judi­ On Aug. 3, in a national broadcast, weapons; may be used, Colombian ciary which, at times, due to failure to Barco announced that his government soldiers will already be dead. understand the nature of military op­ is committed to holding a referendum That the narco-terrorists' pro­ erations, allows itself to become en­ as the guerrillas demanded, so that, fessed willingness for dialogue with tangled in subversion's snares and without need fo r congressional de­ the government is, as the military strategies. " bate, their reform proposals could be memorandum states, "a strategy for Gen. Jesus Armando Arias Ca­ approved. The referendum would be opening up new political space and brales, the new Army commander, as­ whether to create a "National Elector­ creatingthe conditions for generalized serted that one cannot enter combat al Jurisdiction" for arnnestiedguerril­ armed warfare," readily evident. On with a defeatist attitude, such as the las and those who are in dialogue with July 17, government delegates and government's negotiating with narco­ the government, so that these "for­ leaders of the narco-terrorist M-19 terrorists instead of winning the war mer" terrorists can be elected to Con­ signed a document celebrating the against them. "If we are filled with gress, despite having few votes. In ef­ "success!' of the first stage of the M- pessimism, if we take the path of de­ fect, the referendum would create a 19's alleged reintegration into civilian feat, we are not going to achieve any­ non-geographical election district to life. Almost immediately, M-19 lead­ thing. There are organizations which service Colombia's pro-terrorist er Carlos Pizarro Le6n G6mez sent a have declared war on the country. Not "constituency. " letter to President Barco, conditioning on the government. And under those Such a decision would not only the just-signed agreement upon mod­ conditions, our purpose, as in sports, constitute an open reward for narco­ ification of Article 87 of the Consti­ is to win ....It would be foolhardy terrorism, but would thoroughly dis­ tution, to permit the national referen­ to enter a war without the intention of credit the electoral institution and dum so that "the people" can vote up winning," said Arias Cabrales. trample the electoral will of the citi­ the terrorists' proposed reforms. The general warnedthat the coun­ zenry, which has already been terror­ Pizarro was explicit in his letter: try is not merely facing a problem of ized by means of death threats and "Until now we have taken the [peace] "a group of lawless individuals, re­ executions from the narco-terrorists process to heart, but the M-19 always sorting to brutality, to ambush, and to into allowing the candidates of the Pa­ reserves the right to define what it is criminality. Subversion has much triotic Union-the electoral arm of the going to do . . . ."

56 International EIR August 25 , 1989 Dateline Mexico by Carlos Valdez

Buying a country with drug money ment price. The Salinas governmentis cordially inviting the flightca pitalists, The problem is that by granting amnesty to the flight capitalists, the "come home, all isforgiven." government is also opening the door wide to drug money laundering. After all, what drug trafficker could resist an opportunity to bring his dirty dol­ On August 8, Assistant Attorney forces, the official government ga­ lars into Mexico disguised as "return­ General Luis Octavio Porte Petit zette published a decree granting a ing capital"? warned that Mexico would not be a pardon to all "flight capitalists"-the The provisions for facilitating the "financial paradise" for laundering of same ones who, headed by Manuel laundering of drug dollars were cele­ drug money. He announced that any Espinoza Yglesias, tookmore than $50 brated by the infamous Manuel Espi­ foreign capital that would be invested billion out of the country during the noza Yglesias, at the conclusion of a in Mexico must first be investigated, 1976-82 administration of Jose L6pez private dinner given Aug. 9 by Presi­ and if discovered to be linked to such Portillo; and who, during the Miguel dent Salinas for 54 businessmen, part illicit activities as the drug trade, it de la Madrid regime (1982-88), again of the famous "300 Legorreta nota­ would be confiscated. looted the country through the stock bles" who dictated the Economic Sol­ The officialalso declared that "un­ exchanges. These pin-striped plun­ idarity Pact at the end of Miguel de la fortunately, the problem of drug derers have not only been pardoned, Madrid's term. Espinoza Yglesias told addiction among Mexican youth has but they have also been given a re­ journalists there that "the capital left already overwhelmed us," and there­ ward, as the decree establishes that all out of fe ar, but now that they are con­ fore"legislative reforms must be pro­ capital which "crossed the border be­ fident, they are going to return." Then posed and institutions created to pre­ tween 1985 and the present will not he added, without even being asked, vent the problem from growing." Porte pay a single cent" in taxes. The capital that "investigation of money launder­ Petit acknowledged that the activities that fled the country before the end of ing is difficultto achieve, for it is not of the drug trade can infiltrate public 1984 will pay a 5% profit tax, while an easy matter to deal with." institutions, something which has al­ capital "invested" abroad in 1985 will It is widely known that Espinoza readyoccurred in other countries, and pay a 3.7% tax. All the flightcapital­ Yglesias amassed his immense for­ admittedthat there have been cases of ists have to do to "earn" their reward tune through illicit activities at the ser­ money launderingin Mexico. is declare to the banks or exchange vice of gangster William Jenkins, and Porte Petit's statements, if imple­ houses that they took out "theirwealth" under the protection of the A vila Ca­ mented as policy, could pose a serious as a hedge. macho brothers. threatto the next phase of the econom­ Although the official figure for El Universal journalist Juan Bus­ ic strategyof PresidentCarlos Salinas Mexican flight capital is $50 billion, tillo wrote Aug. 13, "Today the gov­ de Gortari, which is premised almost Assistant Finance Secretary Gil Diaz ernment is smoothing the way . . . for entirelyon promoting massive private revealed Aug. 3 that an investigation those who helped aggravate the crisis investment, both "national" and for­ conducted with the aid of the Bank for by running in panic to place their mon­ eign, and especially upon the returnof International Settlements (BIS) of ey in foreign banks." At one time, billions in flightcapital from previous Basel, Switzerland has determined the wrote Bustillo, "they were considered years. It is no accident, therefore, that existence of $12 billion in Mexican traitors fleeinga sinking ship." In con­ the Attorney General's office rushed capital banked abroad. In fact, it is clusion, Bustillo notes, "Perhaps now to deny Porte Petit's statements in a public knowledge that the real figure one can understand why Attorney curt official communique stating that for flight capital surpasses $100 bil­ General Enrique Alvarez del Castillo no investigations of capital flows lion. One must therefore conclude that immediately contradicted his Assis­ would be conducted. the intention of releasing the BIS­ tant Attorney General Luis Octavio What happened? Why such haste? Mexico "findings" is to advertise the Porte Petit, who said that all money As partof the dealfo rmalizedAug . Salinas government's intention of coming from abroad would be inves­ 2 between the government and the selling off the country's assets for a tigated and, if discovered to be illegal, chieftains of Mexico's oligarchic mere $12 billion-a bargain-base- it would be seized."

EIR August 25, 1989 International 57 International Intelligence

Cambodia should include a clause opposing deswehr, West Germany's army, could be Interpoldemand s the return of the genocidal regime and pre­ reducedby 10%, eventually 20%. The new­ venting its influence in the political, eco­ ly commissioned study indicates he decided fu nds fo r war on drugs nomic, cultural and social life of the coun­ for the 20% cut, which would cut Bunde­ try. Not only should the military organiza­ swehr's troop strength from its current "It is the start of any strategy, of war strate­ tion of the Pol Potists be dismantled, but 495,000 level to only 400,000 men. It was gy, to match resources with resources. If the even the political organization of Khmer furthermore decided not to increase the other side has 'X' billions of dollars, then Rouge should be consideredillegal and must length ofimilitary service for draftees from our side should have the same," commented be dissolved. " the currerit 15 months, to 18 months by 1992 Interpol Secretary General Raymond Ken­ He demanded that the Khmer Rouge's to make upfor the effects of zero population dall in an interview with the Aug. 12 issue arms and ammunition be confiscated, that growth. of Middle East Insider on how to wage the the people responsible for the genocide be The opposition Social Democrats pre­ war on drugs. brought to trial and punished, and that an sented their scenarios for defense cuts as Kendall made his comments while re­ end should be put to their control of civilian part of thf;:ir "Progress 90" platform for the flectingon the last Vienna internationalcon­ refugee camps. December 1990 national elections. ference, which reported that monies from In response, the Khmer Rouge has at­ In one scenario, assuming a one-third the drug trade were at least $500billion . tempted to enmire the conference in a war cut in troop strength over the next eight to Kendall underlined that on the issue of of semantics over its genocidal policies, by ten years' for budget austerity reasons, the drugmoney-launder ing, ''Thereis still a long demanding that all references to "genocide" new Bundeswehr of 360,000-370,000 men way to go .... The banking community be struck from all conference texts, and by will no longer be equipped with heavy ar­ still needs to be educated .... With the insisting that Vietnamese civilians in Cam­ mor, and most of the manpower will be banks, there is no problem if you talk about bodia be viewed as "colonizers." "Around professionals and semi-professional cadre, fraud, counterfeit currencies, etc. When you these two themes, they have launched an the rest filledup by reservists. start getting into the way they open ac­ absurd and indecent semantic battle," Sok Under the second scenario, in the con­ counts, it becomes a more tricky issue." An, Cambodian Vice Minister for Foreign text of Eist-West troop cuts in Europe, the Regarding narco-terrorism, Kendall an­ Affairs,said in a telephone interview. ''They Bundeswehr could be reduced to 50% of its nounced that Interpol is just now opening an are blocking the work of the commissions. " current strength. intelligence and monitoring unit to watch Cambodian Prime Minister Hun Sen and The Social Democrats' third scenario is the drug trafficking which is coming out of the resistance, headed by Prince Norodom that of Adm. Elmar Schmiihling, the head the Syrian-controlled Bekaa Valley in Le­ Sihanouk, remain deadlocked on all major of the Bundeswehr Operational Research banon, and the new drug routes which have points. Their clash centers on whether the Center, who proposed an army of largely been created, such as the direct Brazil-Syr­ real enemy comes from the ranks of Sihan­ professionals, with a total strength of only ian cocaine connection. Brazil is also an ouk resistance-namely the Chinese-backed 200,000 . important outpost for the Spanish ETA ter­ Khmer Rouge-or from Hun Sen's backer, rorists, and he expects that the Irish Repub­ the Vietnamese. Sihanouk maintains that the lican Army will soon establish a similar Khmer Rouge are less dangerous as allies presence. than as enemies. Ramstein mayor rejects attack on American base

Cambodians take hard line We st Germans The Mayor of Ramstein, West Germany, Julius Divivier, a conservative Christian against Khmer Rouge study 20% troop cut Democrat, banned a tribunal set up by left­ ists, Greens, and Communist groups from The delegation from the Cambodian capital West German Defense Minister Gerhard the municipality, on grounds that "we don't Phnom Penh to the international conference Stoltenberg commissioned a study for a 20% want tribunals of a fascistoid character here on the Cambodian conflict in Paris has called cut in the troop strength of the national army, at which, Greenies and Commies usurp the for total eradication of the Khmer Rouge to be completed by 1995, according to Aug. role of prosecutors against the U.S. troops." from every aspect of Cambodian life, ac­ 13 press accounts. The annual Ramstein Air Base air show, cording to Aug. 14 press accounts. The de­ The study will be overseen by Adm. traditionally the biggest of all in West Ger­ mand apparently surprised all the other par­ Dieter Wellershoff, the inspector-general of many, usually draws an audience of be­ ticipants at the conference . the armed forces. Stoltenberg recently said tween 300,000 and 500,000 people. As the The head of the delegation, Nor Nam that in the context of East-West talks on anniversary of the Aug. 28, 1988 air inci­ Hong, said, "The future Constitution of conventional troop cuts in Europe, the Bun- dent at Ramstein Air Base that killed 70

58 International EIR August 25 , 1989 Briefly

• BEUING'S massacre was good for trade, said Jerome Cohen, a part­ ner in the firm of Paul, Weiss, Rif­ kind, Wharton and Garrison, the le­ civilians and three Italian pilots nears , a national government to "protect minori­ gal firmthat represents Henry A. Kis­ heated controversy has emerged over the ties," and insists on "strengthening federal singer, in a Journalo/ Commerce in­ future of air shows, the air base, and U.S. control over defense, foreign affairs, and terview Aug. 12. forces. internal security." A "pro"-rally of several thousand Ger­ While it recognizes the right of owner­ • AN AL FATAH congress in mans, organized by the Young Christian ship of land and resources by the republics, Tunis endorsed PLO chairman Yas­ Democrats together with pro-Air Base it insists that "the union of the U.S.S.R. ser Arafat's recent peace moves, in­ groups, was scheduled for Aug. 19. must strengthen its right to definethe use 0/ cluding his statements recognizing Divivier said that although he saw a point these resources, taking into account general Israel's right to exist, on Aug. II. In in discussing the scope of U.S. Air Force inter-republican interests and the interests of response, a spokesman for Israeli presence,he objected to diatribes against the the defense and security of the country." Prime Minister Yitzhak Shamir said "American allies which have been in a close the statement was "meaningless" and and friendly relationship with the popula­ mere "damage control ." tion here for several decades." Tri bes are pawns On Aug. 18, NATO yielded to the low­ • MUJAHEDDIN Fisabillillah, a level flight hysteriaby pledging that in next in Afghan talks secretive fundamentalist group, has month's seven-nation flying exercise over threatened to assassinate the Pope on West Germany, it will keep low-level and The United States and the Soviet Union are his October Indonesia tour, authori­ night flying to a minimum. The exercise, both playing to the utmost the tribal-ethnic ties reported Aug. II. Letters sent to termed "Cold Fire 89," will also be con­ card in Afghanistan to find a settlement of Indonesian and Church authorities ducted in such a way as to keep noise levels the civil war which has ravaged the country promised a "bloodbath" if the sched­ at a minimum. since the Soviet Union withdrew its occu­ uled October visit occurs. pation forces early this year. According to the Aug. 12 London lruJependent, it has been • NATO'S Autumn Reforger ma­ Kremlin moves to tighten made known now that members of the Is­ neuvers have been canceled this year lamic radical leader Hekmatyar held a series for environmental reasons, according centralized control of negotiations in Kabul in July with mem­ to NATO sources quoted by Reuter bers of the hardliner Khalq faction of the Aug. 11. The annual "Return of ThePolitburo of the Soviet Communist Par­ government. However, as the paper points Forces to Germany" (ReForGer) ma­ tyissued a document on "nationalities poli­ out, 80% or more of the Khalqis are from neuver was canceled in 1988 for the cy" on Aug. 17, which represents a tight­ the Ghilzai Pathan tribe, to which Hekma­ firsttime ever, for budgetary reasons. eningof Moscow's central control overmost tyar and his group belongs. important sectors of Soviet life, even if it is Negotiations involved talks about a po­ • SOVIET FOREIGN Minister portrayed, bothin the U.S.S.R. and in much tential Khalq-sponsored military coup Eduard Shevardnadze and Secretary of the Western press, as a concession to against Afghanistan 's Soviet-sponsored of State James Baker will meet in regional"autonomy ." Prime MinisterNa jibullah. At the same time, Wyoming Sept. 19-20. The meeting Thedocument is the officialplatform for Najibullah, who is of the Parsham faction of place was ostensibly chosen because the long-postponed Central Committee the government, held talks with the group it is the home state of Defense Sec­ plenum on the nationalities problem. of Gaylani, of the Hezbi Islami. Both pri­ retary Richard Cheney. Even in terms of Soviet constitutional marily belong to the Durrani Pathan tribe. law itself, thedocument is a regressionfrom Yet, a common denominator between both • HENRY KISSINGER, Eliza­ formally recognized rights of the republics. is their desire to keep the Tajiks and Hazaras beth Taylor, three Rockefellers, Article 72 of the Soviet Constitution recog­ out of any coalition in Kabul. Donald Trump, Baron Heinrich von nizes the right of the 15 republics to secede The Soviets have an obvious interest in Thyssen-Bornemisza, Rupert Mur­ from the U.S.S.R. But the Politburo docu­ preventing any Tajiks from reaching a po­ doch, Gianni Agnelli, leading Re­ ment never even mentions Article 72. It ac­ sition of power in Kabul , as their influence publican Party luminaries, Mark cuses "nationalist elements" of exploiting could spill over into Soviet Tajikistan. The Thatcher, and Katharine Graham were economicand socialdifficulties to heighten Hekmatyar-Khalq negotiations are impor­ among the 900-1,000 guests who were tensions. Republics may have the right to tant, because Hekmatyar has been the recip­ in Tangier, Moroccoon Aug. 19, for make autonomous laws, but these can be ient of up to 80% of U . S. military aid to the the 70th birthday celebration of Mal­ abolished, if found to be detrimental to the anti-Soviet resistance Mujahideen groups, colm Forbes. The event reportedly union. even though now it is said that Washington cost at least $3 million. The document upholds the right of the has become lukewarm toward him.

EIR August 25, 1989 International 59 �ITillNational

Te rrorist Mordechai Levy is -finally apprehended

by EIRs Counterintelligence Editors

On Aug. 10, Mordechai Levy, the leader of a small gang covering up the illegal operations and activities of Mordechai called the Jewish Defense Organization, was apprehended Levy." Hamerman specifically identified FBI Deputy Direc­ by members of the New York Police Department, after he tor Oliver "Buck" Revell as the man at the center of FBI had mounted to the roof of his 6 Bleecker Street apartment control over Levy, along with former Boston U.S. Attorney building in Greenwich Village and wounded an innocent William Weld and FBI Special Agent Richard Egan. Ham­ passerby in wild sniper fire . erman said that, had the federal authorities heeded the re­ The arrest of the 29-year-old terrorist for attempted mur­ peated requests of Lyndon LaRouche and his associates to der brings into the open a sordid story about the Federal investigate Levy's terrorist actions then at the very least, an Bureau of Investigation, which every American should know. innocent bystander would not have been shot on Bleecker For the past seven years, operating as an approved agent of Street on Aug. 10. the FBI, Mordechai Levy has been able to participate in Hamerman reported that associates ofLyndon LaRouche bombing murders , intimidation threats, and incitement to had previously approached a number of government author­ murder, and has assisted the FBI in the railroading of impris­ ities to request action on Levy as a terrorist threat, but that in oned statesman Lyndon H. LaRouche. Levy has been acting every single case, they refusedto act. Those authorities and with special impunity from justice, which was granted him agencies included: the AttorneyGeneral of the United States, by the FBI as part of a new domestic terrorism, reminiscent the House and Senate JudiCiary Committees, the FBI, the in every way of the Bureau's infamous Cointelpro program New York U.S. Attorney, the Secret Service, New York which resulted in the 1960s in race wars, and ultimately the District Attorney Robert Morgenthau, and New York Police assassination of civil rights leader Martin Luther King. Department Detective John Finnegan. Hamerman said that To expose the corruption of the Bureau's "Get La­ one of the principal reasons why Levy has been protected, is Rouche" task force, which employed Levy for his various that he has been an "FBI sting informant who was partof the terrorist missions, on Aug. 16 in New York City Warren J. stable used by the 'Get LaRouche' task force to illegally Hamerman, chairman of the National Democratic Policy railroad LaRouche," starting with Henry Kissinger's 1982 Committee, and Paul Goldstein, Counterintelligence Editor demand to his friend, FBI Director William Webster. "Had of EIR , held a press conference at Federal Plaza, rightoutside this governmental and private federal-state-local task force of New York FBI headquarters. Hamerman announced that acted according to normal rules of law and justice, rather than the NDPC-the national political action committee of the by using assassins and sting-informants like Levy," Hamer­ LaRouche wing of the Democratic Party-is calling for "a man said, "then Lyndon LaRouche would not be sitting in full-scale investigation of the FBI role in controlling and then federal prison today," and several individuals whom the Bu-

60 National EIR August 25 , 1989 reau apparently gave Levy immunity to participate in mur­ in an article entitled "Oy Vey, Make My Day," Friedman dering, would be alive. Hamerman called for "rooting out partially corroborated charges made by EIR sources in the the FBI corruption in the Levy case." Israeli peace movement, that Levy's arrest may have come Over the years, EIR 's counterintelligence staff has gath­ as a result of an international effort to expose his terrorist ered an exhaustive dossier on Mordechai Levy (see below). networks, since it came at the same time as a crackdown in At the pressconfer ence, EIR ' s Paul Goldstein presented parts Israel against Jewish Defense League founder Rabbi Meir of that dossier, focusing on his terrorist activities-from the Kahane, who was recently arrested in Israel for creating the murder of Tscherim Soobzokov and Alex Odeh, to assassi­ equivalent of a "secret government" in the occupied territo­ nation threatsagainst Goldstein himself, LaRouche, and oth­ ries, with weapons caches and the equivalent of "death squads" er LaRouche associates. to kill Israeli leaders genuinely seeking peace with their Pal­ Goldstein also detailed the nature of Levy's curious re­ estinian neighbors. lationship to an organization founded by Lyndon LaRouche. Yet another international dimension to Levy's recent ac­ That relationship began in 1978-79, when, in response to a tivities was provided by Rabbi Avraham Weiss and Glenn book by associates of LaRouche entitled Dope, Inc., the Richter, both of whom are friends of Mordechai Levy and Anti-Defamation League of B'nai B'rith decided to defend have continued to praise him even after his arrest. Rabbi certain minor figures cited in that book-such as mobster Weiss's Coalition of Concern-founded to protest President Meyer Lansky, who was later kicked out of Israel as an Ronald Reagan's May 1985 trip to the Bitburg military cem­ undesirable criminal element-by charging that LaRouche etery in West Germany-has recently been involved in the and his associates were "anti-Semites." Levy, who at the attacks on the Carmelite convent at the Auschwitz concentra­ time was linked to ADL left-wing Socialist International tion camp in Poland (see article, page 48). "dirty tricks" specialist Irwin Suall, began to deliver a series of threats against LaRouche and his associates, culminating The Levy dossier in an armedattempt to break into an apartment recently va­ On Aug. 10, following a two and a half-hour siege, New cated by LaRouche, presumably in order to assassinate him. York City Police Department SWAT Squad and Hostage Following that incident, Goldstein reported, he and other Negotiation Team officers arrested self-proclaimed Jewish members of LaRouche's security staff temporarily convinced militant Mordechai Levy, on charges of attempted murder, Levy that Levy had been entirely misled by Suall's ADL­ firstdegree assault, and reckless endangerment. The founder inspired "anti-Semitic" slanders; Levyrelented on his attacks of the tiny Jewish Defense Organization and a former mem­ somewhat, and agreed to provide information to Goldstein ber of the Jewish Defense League (JDL), Levy had opened and others about those who werepromulgating this libel. But fire with a Ruger Mini-14 assault rifle from the roof of his in 1983-84, Levy was threatened by his controllers in the apartment at 6 Bleecker Street in the Greenwich Village FBI, and he again turned wildly against LaRouche. It was section of Manhattan, after two members of the JDL attempt­ following these FBI threats against Levy, that he went on a ed to serve him with a subpoena to appear in court in Los domestic terrorist rampage operating with an apparent "li­ Angeles. The subpoena concerneda libel case brought by the cense to .kill." JDL against Levy for a June 2, 1989 appearance on Los Goldstein, as a former defendant in the first federal trial Angeles radio station KFI, during which the JDL claimed against LaRouche in Boston in the first half of 1988, also Levy made slanderous allegations against the West Coast detailed how Levy had been prepared by FBI agent Richard JDL leader Irv Rubin. When, on Aug. 10, JDL leader Irv Egan as a key witness in that case. In early 1989, Levy Rubin and Steve Rombom arrived at Levy's apartment to bragged that it had been his testimony that helped railroad serve him with papers, Levy ran to the roof and opened fire, LaRouchein the second federal trial in Alexandria, Virginia, hitting a bystander in the leg. which had been started up after the Boston case collapsed on According to initial press accounts of the siege, in which May 4, 1988, because of government misconduct. police units had an armed personnel carrier on the scene, it At the New York pressconfere nce, Goldstein called upon was a "friend" of Levy's from the Federal Bureau of Inves­ "honest elements in the FBI" to step forward an participate tigation who finally convinced Levy to surrender to the po­ in uncovering the sordid role of the Bureau's leadership in lice. Subsequent accounts denied that theFBI played any role runningLevy . in the resolution of the standoff, naming Det. Sgt. Wally He also reported that Lyndon LaRouche, speaking from Zeins and Lt. Hugh McGowan of the New York Police De­ federal prison in Rochester, Minnesota, had had the follow­ partment as the two individuals who talked Levy down. But ing to say about the affair: ''The wrong Ollie was tried and New York FBI spokesman Joseph Valiquette, whom Levy convictedfirst . It should have been Ollie 'Buck' Revell." had earlier named as a Bureau contact, has confirmedthat an Following the press conference, additional information FBI unit was on the scene. about the circumstances of Levy's arrestwas offered by Rob­ The issue of the FBI's purported involvement in the Aug. ertI. Friedmanof the Village Voice. Writing in Aug. 22 issue 10 events is significant because of Levy's longstanding status

Em August 25, 1989 National 61 as an informant and agent provocateur employed and pro­ the most dangerous terrorist groups operating in the United tected by the Bureau. In a March 1986 Executive Intelligence States during the previous year. Webster concluded his re­ Review Sp ecial Report titled "Moscow's Secret Weapon: marks by warning that individuals falling within the "target Ariel Sharon and the Israeli Mafia," FBI Special Agents zone" of the Jewish underground should expect further at­ Joseph Valiquette and Paul Locke, both of the New York tacks. In virtually every instance of Jewish underground Field Office, are identified as two of Levy's Bureau control­ bombings, Mordechai Levy was at or near the scene of the lers. attacks just days prior to the explosions. Let us follow the For the past seven years, Levy was an asset of the FBI's train of events: "Get LaRouche" task force, a special Department ofJu stice­ • On Aug. 13, 1985, Mordechai Levy made a series of led interagency strike force constituted in August 1982 fol­ death threat phone calls to the New Jersey offices of Caucus lowing correspondence between former Secretary of State Distributors, Inc.-at the time, the distributors of Executive Henry A. Kissinger and FBI Director William Webster, in Intelligence Review in the Northeast United States. As in which Kissinger, in effect, demanded that the FBI jail La­ earlier such threats by Levy, responsible law enforcement Rouche and shut down all of his political operations. officialsref used to investigate. Because of the priority placed on the "Get LaRouche" • On Aug. 15, 1985, Tscherim Soobzokov, a leader of operation, the FBI and Justice Department protected Levy the Circassian (Russian Caucasian) Muslim community in for at least a five-year period, during which time he was the United States and an activist in Middle East peace efforts, implicated in a string of criminal actions, including jury was blown up by a booby trap bomb which had been placed tampering and a number of 1985 murders . During that same on the front porch of his home in Paterson, New Jersey, as period, while operating under what has been described as an he rushed to respond to a nei$hbor's alert that his car was on FBI "license to kill," Levy appeared before numerous state fire. Soobzokov had earlier been the victim of an unsuccess­ and federal grand juries constituted as part of the "Get La­ ful attempt by the U.S. Justice Department's Office ofSpe­ Rouche" effort, delivering perjured testimony. On March 4, cial Investigations (OSI) to frame him up, while he was 1984, Levy appeared on NBC-TV's "First Camera" broad­ serving the cause of a negotiated peace in the Middle East, cast which was devoted to slandering LaRouche, and falsely as a "Nazi war criminal." Soobzokov died on Sept. 7 from represented himself as a "former member" of an organization injuries sustained in the bombing. Just days before the explo­ associated with the then-Democratic Party presidential can­ sion, Mordechai Levy had beenin Soobzokov's home town, didate. Levy's phony remarks on that broadcastwere aimed publicly attacking SoobzokoV at a local synagogue with the at providinga public pretext for an already ongoing escalated OSl's discredited label of "Nazi war criminal." Days after FBI "probe" into LaRouche and his associates. the bombing, Levy held a press conference in Paterson "ap­ In October 1984, when LaRouche's civil libel suit against plauding" the attack, while denying direct responsibility for NBC and the Anti-Defamation League of B'nai B'rith for the bomb. One week prior to the Soobzokov murder, Levy that broadcast came to trial in U.S. District Court in Alex­ had phoned a death threat to Soobzokov's attorney Michael andria, Virginia, Levy attempted to tamper with the jury at Dennis Esq., in which Levi vowed to kill Soobzokov. the behest of the Anti-Defamation League of B'nai B'rith, • On Aug. 16, 1985, a Boston police officer was seri­ according to affidavits submitted in the case. According to ously injured while attempting to defuse a pipe bomb placed Levy's own account of the incident, officials of the Los at the door of the Massachusetts headquarters of the Arab Angeles office of the ADL provided Levy with names, ad­ American Anti-Discrimination Committee (AADC). An dresses, and telephone numbers of jurors in the trial , and anonymous caller had claimedresponsibility for the bomb in instructed him to place threatening phone calls in LaRouche's the name of the JDL. name to the jurors. FBI Special Agent Richard Wade of the • On Sept. 7, 1985, Elmars Sprogis, a Brentwood, Long Alexandria Field Officewas ordered by federal Judge James Island man was awakened to shouts from a young man on his Cacheris to investigate the Levy jury-tampering evidence, front porch that his car was on fire. When Sprogis opened his but the investigation was quashed. door, a powerful bomb exploded, seriously wounding the In January 1986, a security officerfor Lyndon LaRouche young passerby Robert Siegfield. met with the Special Agent in Charge of the Alexandria FBI • On Oct. 11, 1985, Alex Odeh, the director of the office along with Special Agent Wade. The security officer California AADC offices, was killed when a bomb went off ' was told that the FBI's files contained no records of any at the Santa Ana, California offices of the group. Odeh had LaRouche complaints against Levy. That meeting had come been named in threats made by the JDL, the JDO, and Levy about as a response to a string of murders that occurred during personally. The Odeh murder occurred in the midst of the the second half of 1985, in which members of a terrorist Achille Lauro, hijacking in which Palestinian terrorists took "Jewish underground" were implicated. In a December 1985 over a ship and killed one of the passengers. speech at the National Press Club in Washington, D.C., FBI • On Nov. 29, 1985, the Washington, D.C. headquar­ Director Webster had identified the Jewish underground as ters of the AADC was bombed, causing tens of thousands of

62 National EIR August 25, 1989 dollars in damage. On Oct. 9, 1986, following their arrest during the 400- In the midst of this explosion of targeted terroristattacks , person paramilitary raid on the headquarters of several La­ on Nov. 14, Levy gave a press conference in Washington, Rouche-linked companies, two LaRouche associates, Mich­ D.C. where he released a hit list of "enemies of the Jews" ele and Jeffrey Steinberg, went before an Alexandria federal who wereto be targeted for attack. Levy told the press that magistrate to seek bail. On the strength of perjured testimony "to not kill" such "enemies of the Jewish people" would be by Boston FBI Special Agent Richard Egan, both Steinbergs "immoral." High on the typed list distributed by Levy were were held without bail for 100 days. In that testimony, Egan Lyndon LaRouche, diplomats of Arab countries, and the cited Mordechai Levy as a "reliable informant" and one of AADC. the FBI's sources of information against LaRouche. In addition to a stringof petty assault and illegal weapons In late 1985, after the murder of Tscherim Soobzokov, Jeffrey Steinberg, acting in his capacity of Counterintellig­ ence Editor of EIR , filed a formal request to U.S. Attorney General Edwin Meese to appoint an independent counsel to probe the murder. The reason cited in the application, filed Lyndon LaRouche had the by the Arlington, Virginia law firm ofFensterwald and Al­ fo lloWingto say about the Fe deral corn, was that a chief suspect in the bombing of Soobzokov, Bureau qfbwesti gation 's Mordechai Levy, was a protected intelligence asset of the FBI, and that the FBI had a conflict of interest in the case. sponsorship qfLevy s terrorism: Affidavits by Michele Steinberg had been appended to the "The wrong Ollie was tried and application. Also cited was Levy's suspected authorship of convictedfirst. It should have been the shooting of a .45 caliber bullet through the window of the home of a LaRouche associate, while his teenage son was at Ollie 'B uck' Revell. " home. And, there was a listing of 23 other incidents of har­ assment and intimidation directed by Levy at LaRouche and his associates, including Levy's own admission that in 1979 he had gone to an apartment recently vacated by Lyndon charges that have been pressed against Levy, the JDO leader LaRouche armed with the intent to kill him. The Attorney has alsobeen suspected in a number of car bombings directed General refused to appoint the independent counsel. at Soviet bloc andArab diplomatic vehicles in New York and In August 1986, afterLevy had been used as an informant LosAngel es. In everyone of these prior instances, Levy has seeking to entrap and frame LaRouche and his associates, the avoided conviction and jail time. Jerusalem Post reported that Levy told a press conference in Levyalso remains aprime suspectin a series of incidents Israel that "assassination may be the only answer" for "anti­ around Yeshiva University in New York City in the mid- Semites" like LaRouche. Levy also appeared on the Mort 1980s. in which Jewish students were shot, followed by Downey television broadcast in 1988, when LaRouche was retaliatory attacks against Hispanics and alleged neo-Nazis. a guest, to issue new threats against LaRouche. During that show, over Downey's degenerate ravings, LaRouche pointed A 'bird dog' for hit squads out the seriousness of such threats, given Levy's ties to Soob­ Professional security experts familiar with the Levy pro­ zokov's murder. file believe that his role in most of these recent instances of To this day, the Soobzokov case remains unsolved. Re­ Jewish underground terrorismhas been that of a "bird dog" peated warningsby EIR investigators to the FBI and his links who both identifies the targetfor hit squads and then draws to Jewish underground terrorism were ignored-right up to the attention of law enforcement agencies elsewhere while Aug. 10 when Levy mounted the roof of his Bleecker Street theactual prof essional, often Israeli-based bombers, escape. apartment building. The FBI and Department of Justice's This placesLevy in the category of witting accomplice before harboring of a known terrorist only appears to have come to and afterthe fact in some of the most dramatic acts of political an end as the result of Levy's own "flight forward." Accord­ terrorismcarri ed out in the United States in the 1980s. ing to eyewitness accounts of the Bleecker Streetsiege , Levy Despite this criminal track record-well known to the was in an agitated, paranoid state, convinced that his rivals FBI and clearlyreflected in Judge Webster's December 1985 in the Jewish underground, Irv Rubin and Steven Rombom, National PressClub warning-AssistantU.S. AttorneyJohn were out to kill him. Rombom had been convicted in the early Markham, in filinga motion in limine in the 1988 Alexandria, 1980s of transporting explosives interstate. Perhaps Levy Virginia federal prosecution of Lyndon LaRouche and six assumed that Rubin and Rombom now had been issued the c

EIR August 25, 1989 National 63 King and had witnessed the Satanic ritual murder of a boy who was planning to complain of abuse. Astonished legisla­ tors had to consider the possibility that tens of millions of dollars deposited in good faith by religious orders, among others, to help the minority community, had actually been Ritual abuse case used to fund orgies and Satanic rituals involving minors and high public officials. shakes Nebraska King, who was vice presidentfor financeof the National Black Republican Council, was known to play host to the by Patricia Salisbury cream of the Republican Party both in Nebraska and in Wash­ ington, D.C. He maintained a $5,000 a month residence in Washington, and had hosted a $100,000gala at the Republi­ The President of the Nebraska Committee for the Prevention can National Convention attended by 1,000 top Republican of Child Abuse has sent a letter to the entire Nebraska U.S. Party members. Locally, a number of prominent figures, congressional delegation, asking that the reporting proce­ including Harold Andersen of the Omaha World Herald, dures for monitoring children in foster homes in the state be sat on the advisory board of Franklin Credit, the plundered investigated. institution. Andersen, who chaired a fundraising drive for a This formal request comes aftermonths of investigation building expansion of Franklin, stated that he was not aware of charges of child abuse, possible ritual murder, and Satanic that the additions to the building included a bedroom in the activity involving at least one high-level figurein the Nebras­ basement. ka and national Republican Party, the flamboyantfundraiser While King was indicted on embezzlement charges, none Larry King. The charges have been the subject of investiga­ of the law enforcement agencies involved in the matter saw tion by a special committee of the state legislature, which fit to conduct a thorough investigation of the allegations of has also heard testimony indicating that various police and child abuse and Satanism. Both the FBI and the Nebraska social service agencies, including the Federal Bureau of In­ state Attorney General indicated that they did not find the vestigation, the Omaha Police Department, the state Attor­ child witnesses credible. However, the police officer who ney General's office, are involved in a coverup. did the initial investigation into the murder charges dis­ Indeed, the scandal erupting in Nebraska is apparently agreed, and informed the state legislature that he had found considered so potentially explosive, that none other than for­ the girl a credible witness, but that the investigation was mer CIA director William Colby was proposed as special stymied because of what he perceived to be an association counsel to a state legislative investigation. But Colby was between King and Omaha Police Chief Wadman. The state rejected for the post, when members of the legislative com­ legislature investigation halted when the Omaha World H er­ mittee learnedthat he could hardly be an impartial investiga­ aid leaked confidential information in an editorial and under­ tor, since he is connected through CIA networks to Max mined the credibility of State Rep. Ernie Chambers, a Demo­ Hugel, an associate of Larry King in Washington, D.C. This crat, who had initiated the child abuse investigation. was one of the firsthints that the case would reach far beyond No one can predict where or whom the investigation Nebraska. There were to be many others. will touch if it resumes at the behest of the u.S. Congress. Rumors have circulated in Omaha that King was part of the Child sex abuse and murder apparatrunning money to the Contras. King had family ties The issue is such a hot potato, because its central figure and made frequent trips to Jamaica, which is believed to be Larry King is known to be very well connected in both Ne­ the location of bank accounts which have been a major braska and national power structures. King promotes his im­ sources of illicit Contra funding. Sources indicate that King age as a poor black who has made good as a member of carried briefcases full of moneyon these and other trips. the Republican jet set. The scandal eruped when King was indicted for having allegedly embezzled $38 million froma Is Henry Kissinger involved? small credit union set up to serve Omaha's black community. Strangely, as ferment around the King case reached a State legislators investigating the affair were approached peak in late July, former Secretary of State Henry Kissinger by members of the state's Foster Care Review Board who made a trip to Nebraska whose the ostensible purpose was to told them that a dossier linking King to child abuse had been attend a July 27 meeting of the board of directors of Union ignored by state and federal law enforcement officials. The Pacific Railroad. During his trip Kissinger had lunch with dossier contained charges by minors in foster homes thatthey the above-mentioned Harold Andersen. Does Kissinger have had been forced to go to parties sponsored by King and to something at stake in this matter? The answer may only be perform sexual acts. Most damning was thestatement of one known if the Congress finds the will to renew the investi­ 15-year-old girl that she that had been sexually abused by gation.

64 National EIR August 25, 1989 outlining three scenarios for the complete withdrawal of U . S. combat forces from Korea by 1995. Option One would bring back all military units headquarters staff, command, control, and communications capabilities, and intelligence units. Op­ tion Two would keep all American air assets intact, but re­ move the 2nd Infantry Division from theDemilit arized Zone, rebasing them in central Korea. Option Three would keep the Congress moves to air bases intact, but remove all American ground units to other areas in the Pacific. withdraw from Asia Gen. Louis C. Menetery, commander of U.S. forces in South Korea, told the Aug. 13 New York Times that he sees an end to the need for U.S. troops in Koreain the mid- 1990s. by Leo F. Scanlon Menetery cited "trends" in Korea which would make this possible, including completion of Korean modernization Congressional budget moves to kill funding for construction plans, continued economic growth in the Republic of Korea, at key Asian air bases, are confirming the worst fears of and restraint of North Korea by the Soviets and China. Me­ analysts who are predictinga ratchet reduction of American netery told the Times. "If those trends continue, there should military presence in the Pa cific. Both houses of Congress be stability on the peninsula without the United States being have killed a $ 13 million request for construction at Clark partof the equation in the mid- 1990s." Air Force Base in the Philippines, and a site, rumored to be Kunsan AFB , in South Korea-thereby ending Air Force Philippines on the block also plans to station F- 15 E strike aircraft at both bases. The decision to cut the F- 15 E wing from Clark AFB will The strategy behind the budget decision did not originate send a signal which will be read loud and clear by the anti­ with Congressalone . Although Sen. Sam Nunn (D-Ga.) and American activists which dominate the Aquino government. Rep. Patricia Schroeder (D-Colo.) remain firm advocates of The decision to withdraw naval forces fromSubic Bay, which a collapse of U.S. military presence in those areas where has been masquerading as a budget matterfor several years, Kissinger-type "regional agreements"are being reached with has fueled the hopes among pro-Soviet networks for a com­ the Communist powers, the major patron of the policy is plete retreat by the U.S. fleet. The reorganization of the Air National Security Adviser Gen. Brent Scowcroft-the man Force tactical deployment, coupledwith an impending short­ fromKissinger Associates. age of naval tactical fighters, will likely lead to a situation The present cuts are outlined in a report prepared by where U.S. tactical fighter forces are de facto out of the Scowcroft and former top Navy official (now a Kissinger Eastern Pacific basin. Associate) R. James Woolsey, containing recommendations The fighter wing which is scheduled to be removed from to implement the administration's plans for 0% growth in the two bases was originally based in Europe. Congressional defense spending. The so-called "American Agenda" report cuts in the U. S.contribution to the restationing costs for an proposes to reduce the Navy to a continental defense force F- 15 E wing, forced to move from Spain to Italy, have threat­ with minimal expeditionary capabilities. Long-range, flexi­ ened to bring that unit stateside, further reducingthe nuclear ble aircraftcarrier battle groups would be replaced by smaller umbrella in Europe. From the standpoint of normal strategic ships, and remaining carrier groupswould operate closer to considerations, the Navy would be expected to replace the base at significant"savin gs," but at the cost of being unable tactical strike wing with an aircraft carrier stationed in the to respond rapidly in a crisis region. "The increasing diffi­ area. The Bush budget has cut the Navy to 14 carrier groups, culty of maintaining bases overseas for land-based tactical putting an enormous strain on any plans to operate at high aircraft suggests the importance of keeping naval tactical air tempo in the Pacific. The current budgetwill produce a "tre­ in the force structure, even if it is not deployed forward," is mendous shortfall" in all-weather attack aircraft by the mid- the language the report uses to describe these cuts. 1990s, say Navy officials, and the advanced replacements for the current generation strike fighters are likely to be de­ Strategic umbrella being folded in Korea layed until early in the next century. The F- 15 E wing which will be removed from Korea is. A senior naval source told EIR that the situation is reflect­ particularly significant, as it is a nuclear-capable wing, charged ed in the bizarre logic of U . S. naval arms control and regional with crucial strike missions against the Asian mainland. The matters agreements being reached with the Soviets-"we're loss of this deterrentin the face of the unrest in China and the only offering proposals we intend to impose on ourselves." abiding insanity of the North Korean regime is only one of The strategist warned that the real effect will be to secure a several follies being planned in the Pentagon. According to major goal of Soviet postwar strategists-the end of U.S. Defense Daily, the Joint Chiefs of Staff has prepared a memo naval presence in the Indian Ocean area.

ElK August 25 , 1989 National 65 The Political Earthquake of the 12th Congress

How Henry Clay's patriotic nationalists dumped the appeasers by Anton Chaitkin

Lyndon LaRouche has announced an extraordinary cam­ for five years as personal secretary to judge George Wythe, paign for the U.S. Congress from Virginia's 10th District, the Greek, Latin, and Hebrew scholar who wrote the rules to be carriedout if necessary from the federal detention center for the U.S. Constitutional Convention. Clay emigrated to where he is being held a political prisoner. Kentucky, Virginia's frontier land, as a practicing lawyer. The political precedent LaRouche has identified for his He maintained the contacts he had made with George effort, is the 1811 debut of Kentuckian Henry Clay in the Wythe's students and friends-who now were the leadership House of Representatives. Clay, aged 34, led a political revo­ of the republican movement in Kentucky, Virginia, and lution that ended the appeasement of the nation's aggressive Pennsylvania. Young Clay was personal attorney in Ken­ enemy, and beganthe industrialization to tum America from tucky for the Virginia statesman and former Revolutionary backwardness to world power status. colonel, James Monroe. Unrelieved national humiliation had lit a fire of rage in Kentucky's legislature appointed Clay to the U. S. Senate the population. The government offered no defense against in December 1806, to serve out the last fraction of an unex­ the hijacking of U.S. ships; against the kidnaping of thou­ pired term. (Until the 20th century, the Senate was appointed sands of sailors and their forced induction into the enemy by the state legislatures, while the House has always been navy; against the murder of men, women, and children by popularly elected.) Senator Clay moved and passed a resolu­ Indian terrorists, who were armed and instigated by British tion in February 1807, directing the Treasury Secretary to pre­ garrisons acrossthe Canadian border. pare a construction plan for a national network of canals and Patriots today can clearly read, the parallels between that highways, a backbone for industrial and military strength. crisis of national existence and the developing crisis of 1989. Though Gallatin did nothing with thereport he was forced to A weak President, James Madison, was convinced that publish, the question had been ably put before the public; its a tight budget, and an anti-defense Congress, dictated inac­ implementation was left for Clay and his allies, when thepow­ tion in the face of grave danger. The constrictingbudget was er would be in their hands. thebrainchild of Treasury Secretary AlbertGallat in, a Swiss Clay was again appointed to the Senate in 1809, to serve banker. And the Congress was dominated by an alliance of the last two years of a term. As the outrageousBritish attacks radical, anti-American aristocrats from Boston and Virginia. increased, Clay rebuked and picked fights with the British Henry Clay and his patriotic allies knew that by overturning agents in U.S. politics. Massachusetts Senator James Lloyd the treasonous faction-which was in fact a tiny, unpopular tried to block a proposed preference for American manufac­ minority-they could force a change in national policy. tures in the procurement of naval supplies-little America should simply leave the dirty business of manufacturing to Prelude to the revolt mighty Britain. This argument for weakness has a melan­ Henry Clay had perhaps been primed, since his early choly resonance in the present, Harvard-prescribed "post­ childhood, for the responsibility of moving the nation to industrial era." A paraphrase of Henry Clay's rejoinder has save itself. At age four, in his native Virginia during the been recorded: Revolution, he and his mother watched invading British sol­ "The fallacious course of reasoning urged by many diers thrust swords through his father's fresh grave, seeking against domestic manufactures, namely, the distress and hidden family treasures. In his young manhood he worked servitude produced by those of England," he said "would

66 National EIR August 25, 1989 equally indicate the propriety of abandoning agriculture it­ pursuits would give a country resources which others could self. Were we to cast our eyes upon the miserable peasantry not deprive her of. . . . [The] increase of manufactureswould of Poland, and revert to the days of feudal vassalage, we tend to keep at home the precious metals . . . the most useful might thus draw numerousarguments against the pursuits of representative of wealth and labor. the husbandman. In short, takethe black side of the picture, " ... [S]hould our disputes with foreign nations end and every human occupation will be found pregnant with in war ...when old states are daily overturned, and new fatal objections." kingdoms are as often erected; we cannot calculate upon American troop movements, in southern territory whose preserving peace for a moment-would not a congressional possession was disputed with Spain, brought the warning act for the permanent support of the mechanics and manufac­ that Britain would be displeased. Clay answered, "Sir, is the turers of the country much encourage those citizens who are time never to arrive, when we may manage our own affairs, disposed to devote their capital to those pursuits, and as much without the fear of insulting his Britannic majesty? Is the assist our governmentin the vigorous prosecution of war?" rodof British powerto be for ever suspended over our heads? The first session of the 12th Congress was delayed from

. . . We are . . . warned of the indignation of England. . . . March until November of 1811, a full year afterthe congres­ The whole navy of the haughty mistress of the seas is made sional elections had taken place in the various states. While to thunder in our ears ....We are ...menaced with the negotiations with the British dragged on interminably, the chastisement which English pride will not fail to inflict. nationalists' political machine was being assembled for deci­ Whether we assertour rights by sea, or attempt their mainte­ sive action. Clay's friend and client, James Monroe, was nance by land, this phantom incessantly pursues us. Already appointed Secretary of State in April 1811. has it hadtoo much influence on the councils of the nation." Just as the 12th Congress convened in November, Brit­ ish-supplied Indians launched a major attack on U.S. troops Clay and the 'candidates movement' under Gen. William Henry Harrisonin the Indiana Territory. Clay decided early in 1810, after strategy consultations This particular Congress, however, was not one to be intimi­ with "friends to the East," to declare his candidacy for the dated. U.S. House of Representatives for the 12th Congress, which Fifty-nine newly elected members took their seats on would convene in 1811. He continued to focus on the need Nov. 4; only 82 had been reelected from the 1 1th Congress. for U.S. industrial development, as the essential program of In previous sessions, the House had knuckled under to the a popularmovement that could both elect him, and accom­ assumed authority of the pro-appeasement leaders, Federalist plish his nationalist aims. A "Memorial of the Mechanics Bostonian Josiah Quincy and Republican Virginian John and Manufacturers of Lexington, Kentucky, to Congress," Randolph. But the 12th Congress, largely "amateurs" in na­ published on Christmas day, 1810 in the Kentucky Gazette, tional politics, had not come to Washington to take orders was almost certainly written for the petitioning workers and frombluebloo ds. A sample of the new membership will dem­ businessmen by their newly elected congressman. They ask onstrate the character of the candidates movement which was the Congress, which had already done a great deal to promote to crack the old order of things. the business of merchants and importers, to now support The Massachusetts House delegation included three new new industrial constructionwith tariffs and other legislation. members known as War Democrats: Leonard White, a town Their plea could be that of a Third World country today, or clerk, who served only one term-in the 12th Congress; of the U.S.A., whose industry is collapsing: William Widgery, a shipbuilder who had been a lieutenant ''Themanufacturer works up our raw materials, and con­ on a privateer in the Revolution-one term only; Peleg Tall­ sUmes our provisions. What he earns, is kept at home, and man, a Maine merchant who had lost an arm in a naval is almost immediately circulated again by various channels engagement and had been imprisoned in Britain until the end through society. The merchant is by no means so useful a of the Revolution-oneterm only. character-part of his gains are sent abroad, and paid away The New Hampshire delegation from the 11th Congress to foreigners. The mechanic and manufacturer, likewise con­ was entirely replaced by five new members, four of them tribute to make the country really independent by furnishing War Democrats, all for one term only: Obed Hall, innkeeper; those supplies, which we should otherwise be dependentfor, Samuel Dinsmoor, attorney; Josiah Bartlett, Jr. , country on foreign nations .... physician, son of a doctor, revolutionary leader and Signer ''The nation which produces but a small part of what she of the Declaration of Independence; John A. Harper, post­ can consume, or grows but few articles, we have already master, local politician, militiaman. seen, must always be a dependent one ....Let her pursuit The New York delegation included ten new members and be exclusively agriculture; and the depression of markets only seven holdovers. Among the new members were Pierre (which has been the case with reswct to our provisions, Van Cortlandt, Jr. , who had studied law under Alexander tobacco and cotton) will penalize the industry and enterprise Hamilton-War Democrat, one term; Samuel L. Mitchill, of the nation. Whereas the multiplication and diversity of professor ofchemistry and agriculture, who would supervise

ElK August 25, 1989 National 67 manufacturer and progressive agriculturalist who served as a general on the Northern frontier during the 12th Congress; William Lowndes, a real spark of Clay's "War Hawks," considered one of the most brilliant young political leaders of his era, a pro-technology nationalist. Two of Tennessee's delegation of three were new in the 12th Congress: Felix Grundy, a populist transplanted Ken­ tucky lawyer and War Hawk; and John Sevier, 66-year-old former Revolutionary commander, Indian fighter, governor of the shortlived state of Franklin, first governorof Tennes­ see, War Hawk, 12th and 13th Congresses. Kentucky's six-man House delegation was solidily be­ hind Clay, including three who were to be army officers during the term.

How appeasement was canceled The 12th Congress convened Nov. 4, 1811. Henry Clay, who had never been in the House of Representatives, was immediately elected Speaker of the House, by a vote of 75- 44. He proceeded to appoint his War Hawk allies as members and chairmen of the various committees. On Nov. 29, 1811, the new chairman of the Committee on Foreign Relations, Peter B. Porter (War Dem.-N.Y.), recommended "that the United States be immediately put into an armor and attitude Statesman Henry Clay . Guests at his home in Lexington, Kentucky demanded by the crisis, and corresponding with the national included the Marquis de Lafay ette, Virginians James Monroe and William HenryHarris on, Abraham Lincoln, and Lincoln's wife spirit and expectations." Porter's resolutions to increase U. S. Mary Todd, a close fa mily fr iend of the Clays. military forces, to repair and refit navy vessels, and to allow merchant vessels to arm themselves, were adopted Dec. 19. In debates on this and related bills, the opposition was construction of a steam warship in 1812-he had moved led by John Randolph of Roanoke , the former terror of the with Clay and the nationalists from the Senate to the House; House. Randolph, the sadistic, opium-eating owner of a mass William Paulding, Jr. , lawyer, War Democrat, served as of slaves, was accustomed to swagger into the Capitol in his brigadier general of militia during his one term; Thomas B. long boots, brandishing a whip. He met his match in Henry Cooke, Catskill town banker and justice of the peace , War Clay , who reined him in. Later when they fought a duel, Democrat, one term. Clay put a bullet through Randolph's coat and quieted him Pennsylvania had seven new members: Roger Davis, down considerably. small town physician, War Democrat, elected to the 12th and A new day had dawned in Washington. Congressman 13th Congresses; John M. Hyneman, court clerk, two terms, Josiah Quincy, part of the Massachusetts Essex Junto that during which he served as a general of militia; Abner Lacock, schemed for New England to leave the American Union, local Beaver County politician, War Democrat, later super­ called Clay's patriots "toad eaters"--commoners who had vised construction of the canal system in westernPennsylva­ usurped the places of their betters in the government. Henry nia; Joseph Lefever, 51-year-old farmer from Paradise, Pa. , Clay, moving ruthlessly to political victory, said he was not War Democrat, one term; William Piper, War Democrat, disturbed "by the how lings of the whole Britishpack let loose commanded a regiment during the 12th Congress; Jonathan from the Essex kennel. " Roberts, Norristown politician, a leader of Clay's movement On Dec. 31, 1811, Speaker Clay left the chair to speak from 1811 until the 1840s; William Rodman, Revolutionary on a bill to increase the U.S. army by 25 ,000 troops. Clay War veteran, local politician, War Democrat, one term. warned against the balance of power strategy, the playing South Carolina was Clay's secret weapon, the Southern of a "British card" against the French, while the two rival flankthat he turnedagainst the British party in Virginia. John European powers were fightinga protracted war: C. Calhoun was a new member in the 12th Congress, who "But England, it see ms, is fighting the battles of man­ worked loyally with the patriots for a decade thereafter, until kind, and we are asked, shall we weaken her magnanimous Tory secessionism took over the Palmetto State in the I 820s; efforts? ... [Say that] the French Emperor is aiming at Elias Earle and David R. Williams, War Democrats, both universal empire; can Great Britain challenge our sympa­ returned to Congress after earlier terms-Earle was one of thies, when, instead of putting forth her arms to protect the the firstiron masters in the South, Williams was a hat and shoe world, she has converted the war into a means of self-aggran-

68 National EIR August 25 , 1989 dizement; when, under the pretense of defending them, she my would suffer vicious distortions without simultaneous has destroyed the commerce and trampled on the rights of mobilization of credit and production, he determined to go every nation. . . . Are we called upon to bow to the mandates ahead, nevertheless. of royal insolence, as a preparation to contend against Gallic Madison submitted the question of war to the Congress usurpation?Who ever learnedin the school of base submis­ in a secret memorandum on June 1. John C. Calhoun pre­ sion, the lessons of noble freedom, and courage, and inde­ sented a resolution supporting war. On June 12, by a 19-13 pendence? vote in the Senate, 79-49 in the House, Congress declared " . . . [Great Britain] sees in our numberless ships America's Second War of Independence-the "War of ... she perceives in our 120,000 gallant tars, the seeds 1812." of a naval force, which in 30 years, will rival hers on It was entirely a defensive war, wherein the lightly armed her own element. . . . and ill-prepared republic held its own against the greatest "Unless the object [of the bill] is obtained by peaceful power in the world. We defeated their navy on the Great means, I hope that war will be waged before the close of the Lakes, cut off their Canadian-route terrorism, stopped an session." invasion of New York, and smashed them utterly in New At length a delegation headed by Speaker Clay went to Orleans. meet with President James Madison. They told Madison that When it was over, the old political parties were finished. further negotiations with Britain were futile, that Congress The new nationalist movement supervised an astonishing was insistent upon action. The President responded that an technology development program, which gave America important segment of the population, particularly in Massa­ muscle enough to survive a Civil War. chusetts, felt strongly that war must be avoided. Clay told From his prison cell, Lyndon LaRouche now calls for the President, that if he did not proceed to war with Britain, an end to the appeasement of the Communist and terrorist that they would nominate and elect a different President in enemies of our republic. He asks for a crash program of space the 1812 elections. This was very convincing logic. and military science, and an agro-industrial mobilization of President Madison began issuing pro-war messages; the production. Democratic caucus renominated Madison. For insurance, the Henry Clay did it. Perhaps Americans can remember War Hawks in New York brought about the nomination of how. pro-war nationalist DeWitt Clinton for U.S. President, on the Federalist ticket! On March 9, 1812, Madison sent to Congress the letters of British spy John Henry, whom Canadian GovernorGener­ al James Craig had sent into Boston to foment secession. Three years before, the spy had written to his employer "that a declaration of war is not to be expected; but, contrary to all reasonable calculation, should the Congress possess the sp irit and independence enough to place their popularity in jeopardy by so strong a measure, the Legislature of Massa­ chusetts will declare itself permanent. " But this extraordinary Congress had defied "reasonable calculation." The issue was indeed decided-all except the question of the budget. Clay asked the administration for a tax package to support a rapid arming of the country. Trea­ sury Secretary Gallatin used his only remaining means of sabotage-he reported back a system of taxes, all of which had beenpreviously imposed and were known to be the most Treason offensive and unpopular taxes available. Clay determined to go ahead with Gallatin's ploy whatever the political result, In America so as to avoid national bankruptcy. South Carolina Represen­ from Aaron Burr tative Langdon Cheves, Clay's chairman of the Ways and to Averell Harriman Means Committee, prepared bills for the new taxes. Now Gallatin, through his personal lieutenant, Pennsyl­ 610 pages; published by New Benjamin Franklin House, vania Congressman John Smilie, took back his bluff, and New York. Order from: Ben Franklin Booksellers, Inc., 27 South King St. , Leesburg, VA 22075. $11.95 plus opposedthe taxes: "In the same session as we vote for war, shipping ($1. 50 for first book, .50 for each additional people won't support both war and taxes." book). Bulk rates available. Withoutadministration backing, no financingcould real­ istically be obtained. Though Clay knew the national econo-

EIR August 25 , 1989 National 69 National News

the West are increasingly at risk from the Equally important, its harsh forfeiture pen­ activities of a small band of radical environ­ alties and lengthy prison sentences are, in mental terrorists. From the 'spiking' of trees, most cases, disproportionately severe and Appeal to Pope to to the cutting of ski liftcabl es, to the issuing cruelly coercive ....The law is so loosely of death threats, these environmental rack­ worded that any two instances of illegal con­ attack euthanasia eteers are placing fellow Americans in grave duct within a I O-year period-even if rela­ Some 100 leading pro-life Catholics called physical danger. " tively trivial-can, if they involve use of on Pope John Paul II and Cardinal Joseph "We are studying these episodes with an the mail or telephone, be prosecuted as a Ratzinger to come out with a major state­ eye to bringing a lawsuit against this band 'pattern of racketeering activity.' " ment condemning euthanasia practices in the of environmental zealots," Pendley said. The Times also attacks RICO's provi­ hospitals. The appeal was published in a "But, we need more facts to establish parti­ sion which allows the governmentto freeze fu ll-page advertisement in the Catholic pe­ cipants, patterns, and to determine the ex­ the assets of the accused before trial. It con­ riodical the Wanderer early in August. istence of a conspiracy on the part of those cludes, "The way to deal with stock manip­ The signers of the ad are asking for a who would kill fathers in the name of Moth­ ulators is to prosecute them for violating the papal statement publicly condemning "the er Earth. We ask those who have such infor­ securities regulations; the way to deal with starvation and dehydration of the gravely ill mation to call us. hoodlums is prosecute them for committing and disabled," a policy in many U.S. hos­ "The people ofthe West cannot and will crimes, not talking about them." pitals, and which is especially widespread not be held hostage to environmental terror­ at Catholic hospitals in the United States. ists . . . while our Constitution guarantees "Regrettably, even some Catholics have ar­ that there is room in America for expression gued that the teachings of the Popes and the of every view, there is no room in America Catholic Church allow the starvation and for those who ...seek to deprive their fel­ dehydration of persons who cannot feed low Americans of their property , their lib­ Kissinger under fire themselves. Such arguments must be refut­ erty, and even their lives." for China policy ed by the Papacy and the Catholic Church. The true teaching of the Popes and the The Aug, 14 issue of the Los Angeles Times Church, that all persons must be provided published several angry letters to the editor with basic care-food, water, proper room responding to a syndicated column by Henry temperature , and bed rest-must be restated Kissinger, published July 29, in which he publicly and dramatically. We respectfully Los Angeles Times: praised Red Chinese leader Deng Xiaoping. The letters included: urge that you state the true position of the Rescind RICO statute! Church in this matter. " • Zhenguyan Fu , of the University of In an editorial on Aug. 16, the Los Angeles California at Irvine, wrote, "It is perhaps Times called for the Congress to repeal the not surprising that a few voices calling for notorious Racketeer Influencedand Corrupt sympathy for the perpetrators of the human Organizations Act (RICO), which is one of carnage would appear in the American me­ the principal means by which police-state dia. What is surprising, however, is that rule is being instituted in the United States. such attempts at whitewash should come Hotline announced for Entitled "It's Time to Rescind RICO," from people who consider themselves ex­ the editorial states: "From the moment of its perts on Chinese affairs. " environmental terrorism passage, civil libertarians and legal scholars • Martin Colman, of the Washington, A telephone hotline for reporting acts of en­ have warned that the ...so-called RICO D.C.-based American Foundation for Re­ vironmental terrorism has been established statute is an open invitation to prosecutorial sistance International, wrote, "Perhaps Kis­ by the Mountain States Legal Foundation in abuse." The widening application of RICO singer has been in the company of totalitar­ Denver, Colorado. The opening of the hot­ "makes it imperative that Congress erase ian dictators so long that he has forgotten line, which may be reached by dialing 1- this law from the books ." the basic principles of democratic society." 303-TESTIFY, follows the foundation's es­ The editors state that RICO has failed to • Eugene J. Carroll, Jr. , of the Center tablishment on July I of a national clearing­ meet the goals for which it was created, and for Defense Information, wrote, "Kissin­ house for information regarding the activi­ instead is being used as a "convenience of ger's spiriteddefense of Deng Xiaoping and ties of environmental terrorists. the state." condemnation of Congress for enacting Speaking before a gathering of public "Any law whose language can be con­ sanctions against China raises serious ques­ land users in Safford, Arizona, William Per­ strued, as RICO's has, to cover the conduct tions concerning his motives and priori­ ry Pendley, president and chief legal officer of Mafialoan sharks, Wall Street financiers, ties ....It is not known whether he repre­ of the foundation, stated, "Men and women Chicago commodity traders , and Los An­ sents clients with a financialinterest in U . S. who work on and enjoy the public lands of geles slumlords is vague and overly broad. policy toward China."

70 National EIR August 25, 1989 Briefly

• GEORGE BUSH signed a par­ don Aug. 14 for Soviet agent Armand humanitarian policy, with which we should Hammer, who had pleaded guilty to all be in sympathy. making illegal contributions totaling "I would hope that someone comes up $45,000 to Richard Nixon's 1972 Rhode Island gives tax with an appropriate memorial to Mickey, presidential campaign. He had been something which is dedicated to the purpose sentenced to a year probation and a break to witches for which he gave his life and which is a $3 ,000 fine. The Rhode Island State Division of Taxation memorial to the fact that he did sacrifice his has ruled that witchcraft is a legitimate reli­ life, as a servant of morality in the pursuit • A SOVIET MISSILE flew over gion, and its covens are entitled to the same of that cause. " Hawaiian air space Aug. 11,the State tax breaks as those of established religions, Department acknowledged. The So­ the U.S. Army newspaper Stars andStripes viets ignored U . S. statements of con­ reported Aug. 10. cern and requests that Soviet test plans Under the title, "Witches Resting Easy be modified. For a Spell," the paper quotes Joyce Siegr­ ist, "high priestess" of the Rosegate Coven, Soviets hold political • THE ABDUCTION of two young children from a Harlem play­ "Withthis ruling, we witches will definitely prisoners, Rep. says be able to come out of the closet and take ground is part of a conspiracy to sell our place in society." Congressman Chris Smith (R-N.J.) report­ children, New York Police believe. Under the ruling made by tax adminis­ ed back Aug. 15 from his trip to Perm 35, a The police made the announcement trator R. Gary Clark, the coven, known as Soviet camp for political prisoners in the after 19-month-old Shane Walder Our Lady of the Roses Wiccan Church, will Ural mountains, which he took in his capac­ disappeared on Aug. 10. no longer have to pay state sales tax for ity as a member of the Helsinki Commis­ supplies. sion, together with Rep. Frank Wolf (R­ • RICHARD THORNBURGH, Va.). The visit was arranged through the U.S. Attorney General, appointed office of the Soviet Procurator General. William Lucas to be his "personal Smith confirmed that in spite of Gorba­ representative" to law enforcement chov's claims, the Soviets do have political and civil rights groups on Aug. 12, prisoners, Perm 35 being one of a reported fo llowing the Senate Judiciary Com­ LaRouche honors 200 such camps in the U . S . S. R. Most of the mittee's rejection of Lucas's nomi­ prisoners at this camp were charged with nation to be the head of the depart­ Congressman Leland violations of Article 64 ("Treason Against ment's civil rights division. Lyndon LaRouche, candidate for Congress the Motherland") or Article 70 ("Anti-So­ in the 10th District of Virgina, released a viet Agitation and Propaganda") of the So­ • NELLIE HESTER, wife of slain statement Aug. 14 calling for a memorial viet legal code. Many of them had in fact New York City tenant activist Bruce for the late Rep. Mickey Leland (D-Tex.). simply tried to escape fromthe Soviet Union. Bailey, accused the press of a smear Leland, chairman of the House Select Com­ Smith visited the isolation cells used as campaign depicting her husband as a mittee on Hunger, had been missing during punishment for infraction of rules or for har­ sinister, corrupt individual, and an a reliefmission to Ethiopia. His plane was assment, where prisoners are subject to the informant for Lyndon LaRouche, as discovered on the morning of Aug. 13 to extremely cold conditions of the Siberian a means of covering up for his mur­ have crashed; Leland and 15 others were on climate. Prisoners had told him that many der. "There has been zero coverage their way to a refugeecamp. had fallen ill and died while in the isolation on the connection of the real estate "I knew Mickey, briefly. I'd met with cell. industry as possible suspects in his him for about an hour in his officein Wash­ Smith believes that increased pressure brutal death," she said. ington, D.C. in 1981," LaRouche said. "In on the Soviets by the Helsinki Commission a quite relevantmeet ing, we discussed pre­ will convince the Soviets to shut down their • THE VOYAGER 2 spacecraft cisely this matter of famine and related con­ political concentration camps. The Perm 35 will encounter the planet Neptune on ditions in Black Africa, and, despite our camp had 200prisoners previously, but now Aug. 24, when it will pass within disagreements on many other questions, this there were only 35 people there . 3,000 miles of Neptune's north pole. seemed to be a consistent theme of agree­ When asked by EIR ifhe didn'tthink the Launched 12 years ago, it will return ment over the years. Soviets had many more such camps, possi­ what are expected to be spectacular "I think that we should say that Mickey, bly with worse conditions, and that the Perm pictures of a planet never beforeseen while servingas a congressman, died in the 35 visit was window-dressing for the benefit close up. Voyager has already dis­ line of duty, in the interests of the United of the Western observers , Smith comment­ covered four unknown moons of States, and in the interests of the honor of ed, "They might very well have. I have no Neptune. the United States, on his way to further a way of determining that."

EIR August 25, 1989 National 71 Editorial

Assad, no dtfferent than Hitler

Fascist and Communist regimes are best characterized following Kissinger's policy toward Lebanon which by their brutal disregard for human life. How different has allowed the Syrians a free hand in this once flour­ is Syria's aggression toward Lebanon from Hitler's ishing nation, which has been devastated since 1974- treatment of Czechoslovakia? Hitler's policy was to 75. Of the 1.6 million people who formerly lived in exterminate the Jews; Hafez Assad has targeted Le­ Beirut, now only several hundred thousand still do . banese Christians. In both cases these are pretexts for a Kissinger is wedded to Syria as an American ally, foreign policy of brute aggression-in the words of the despite the fact that every �ntel1igence source-as this Pope , of genocide . magazine has documented-knows full well that Assad Indeed, thirty percent of the troops in Lebanese is a Soviet puppet. Nonetheless, Washington is now Prime Minister Michel Aoun 's ostensibly Christian army putting maximum pressure on Lebanon's duly elected are actually Muslims , who are willing to die to resist prime minister, Michel Aoun, to resign-thereby im­ the Syrian aggressor. plicitly justifying Syria's plans to assimilate the Leba­ Besides the Pope , more and more people are raising non into a "Greater Syria." their voices to protest this outrage . Yet governments, While internationalattention has been focused upon and the United Nations, remain strangely silent. The Iran in the case of the hostages , or on the demented eminent French jurist Jean Marc Varaut has supported character of its fundamentalist government, in fact it is the Pope , and he is appealing for international support Hafez Assad who has been the coordinator of interna­ for his call for a new Nuremberg Tribunal which will tional narco-terrorism out of the Middle East for the bring Syrian dictator Hafez Assad before the same bar Soviet KGB . The KGB footprints are clear in Bulgari­ of justice which tried Nazi criminals in the past. a's documented involvement in the dope trade of the In a similar attack on the failure of any government Middle East, as well as terrorism in general . to act in defense of the sovereign people of Lebanon, It is the case that the Iranians are partly responsible Lothar Ruehl , a former deputy defense minister of Ger­ for the hostages, but the controller in the situation, the many , and a leading member of the Christian Demo­ man who is calling the tune is Hafez Assad, and he is cratic Union, has said that until the United States, working according to Henry Kissinger's game plan for France, and Great Britain name Syria as responsible for how to exert maximum control in the area by creating genocide in Lebanon , any call for a cease-fire there is maximum chaos. Many people believe that Henry Kis­ no better than empty rhetoric. singer is also a Soviet agent of influence-but whether While President Bush has given support to the United we label him and his policies as Communist-oriented Nations call for a cease-fire, so far this appears to be or fascist, it is all the same: genocide . mere lip-service, or worse , a negotiating posture . It is While in the Middle East, U.S. policy is one of rumored that the United States might be willing to trade appeasement toward sworn enemies, in Central Amer­ Lebanon for the release of one or more American hos­ ica just the reverse is the case. Here the United States tages. Such cynicism, if true, is little better than the is threatening to use armed force against the nation of aggression which it claims to oppose . Panama. The administration believes that it can act with One reason for the continued paralysis of American impunity to bully the nations of Latin America. foreign policy before repeated insult to international Unless Kissinger is rapidly removed from any pol­ law , is the evil influence of Henry Kissinger, who as­ icy influence, what is nOw a present tendency of the pires to again assume his former position as foreign United States in the direction of becoming a fascist policy Tsar. By not stopping Syria, the United States is police state will become dismal reality .

72 National EIR August 25 , 1989 JJThere is a limit to the tyrant's power."

-Friedrich Schiller, Wilhelm Tell.

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