Satan ism is a criminal conspiracy, but it is also a political movement which bridges the separation between extremists on the left and those on the right. This report is your defense against it.

Crime Wave oflbe Who is right? '90s

New York Archbishop Cardinal John O'Connor has denounced heavy metal rock as "a help to the devil" and said that "diabolically instigated violence is on the rise." (March 4, 1990)

But the Federal Bureau of Investigation's expert, Kenneth Lanning, claims: "Far more crime and child abuse has been committed in the name of God, Jesus and Mohammed than has ever been committed in the name of Satan." (June 1989)

Read the definitive study by EIR's inves­ tigative team, including: The Matamoros murders; Manson; the Atlanta child murders; the satanic roots of 'rock.' Plus, "The theory of the satanic personality," Order the "Satan ism" Report. by Lyndon H. LaRouche, Jr. Learn the Make check or money order payable to: $lOO extent of the satanist epidemic, who its EIR News Service postpaid high-Iev.el protectors are-and why some P.O. Box 17390 per copy officials want to cover it up. 154 pages. Washington, D.C. 20041-0390 Founder and Contributing Editor: Lyndon H. LaRouche, Jr. Editor: Nora Hamerman Managing Editors: John Sigerson, Susan Welsh From the Editor Assistant Managing Editor: Ronald Kokinda Editorial Board: Warren Hamerman, Melvin Klenetsky, Antony Papen, Gerald Rose, Edward Spannaus, Nancy Spannaus, Webster Tarpley, I take this opportunity to urge our readers who �e American elec­ Carol White, Christopher White Science and Technology: Carol White tors, to vote for Lyndon LaRouche for President in the Nov. 3 Special Services: Richard Freeman national elections. Those of you who read EIR regularly, and who Book Editor: Katherine Notley have been exposed to the painful spectacle of political "debate" in Advertising Director: Marsha Freeman Circulation Manager: Stanley Ezrol the course of the current campaign, must realize that a major showing

INTELLIGENCE DIRECTORS: of electoral support for LaRouche candidacy is the only hope for the Agriculture: Marcia Merry United States to pull itself out of its current morass. Asia: Linda de Hoyos Counterintelligence: Jeffrey Steinberg, Consider the fact that everything LaRouche warned against in Paul Goldstein his past presidential campaigns has come true. Economics: Christopher White European Economics: William Engdahl In 1976 he warned that the backers of Jimmy Carter would create lbero-America: Robyn Quijano, Dennis Small Law: Edward Spannaus the conditions for world war, due to their genocidal policies. We are Medicine: John GrauerhOlz, M.D. now in the foothills of World War III, in the Balkans, and courting Russia and Eastern Europe: Rachel Douglas, Konstantin George the danger of uncontrollable conflagrations in the former Soviet Special Projects: Mark Burdman Union, due to precisely those policies, which have continued under United States: Kathleen Klenetsky both Democratic and Republican Presidents. INTERNATIONAL BUREAUS: Bangkok: Pakdee Tanapura, Sophie Tanapura In 1979 he warned that Paul Volcker's high interest rates would Bogota: Jose Restrepo spin the world into a new Great Depression. In 1982 he cited the Bonn: George Gregory, Rainer Apel Copenhagen: Poul Rasmussen dangers of the "Ibero-America debt bomb," which if not solved Houston: Harley Schlanger constructively between the U.S. government and the governments Lima: Sara Madueiio Melbourne: Don Veitch of our Hispanic neighbors, would explode against the United States. Mexico City: Hugo L6pez Ochoa On Oct. 21, the LaRouche-Bevel campaign will have aired its Milan: Leonardo Servadio New Delhi: Susan Maitra latest half-hour nationwide television broadcast over the ABC net­ Paris: Christine Bierre work, addressing "The Crisis in Education." Once again, LaRouche Rio de Janeiro: Silvia Palacios Stockholm: Michael Ericson offers the positive solutions glaringly lacking in his opponents. Just Washington, D.C.: William Jones as LaRouche has been unflinching in naming the names of humani­ Wiesbaden: G6ran Haglund ty's enemies, he has been equally bold in mappirtg out programs to EIR (ISSN 0273-63/4) is published weekly (50 issues) inspire the United States with a national mission, which is not bomb­ except for the second week of July, and the last week of December by EIR News Service Inc., 3331/2 ing some poorer nation to smithereens, but rather colonizing the Pennsylvania Ave .. S.E., 2nd Floor, Washington, DC 20003. (202) 544-7010. For subscriptions: (703) 777- Moon and Mars, greening the deserts and building new cities, de­ 9451. fending and extending human life, and restoring the method of Bee­ European Headquarters: Executive Intelligence Review Nachrichtenagentur GmbH, Postfach 2308, thoven to musical composition, to name but a few. D-6200 Wiesbaden, Otto von Guericke Ring 3, D-62OO Wiesbaden-Nordenstadt, Federal Republic of Germany I am personally convinced that LaRouche was jailed, more than Tel: (6122) 2503. Executive Directors: Anno Hellenbmich, Miehael Liebig anything else, because he proposed such programs, which will free In Denmark: ElR, Post Box 2613, 2100 Copenhagen 0E, Tel. 35-43 60 40 human beings from the deathgrip of the oligarchy. In the presentjin In Mexico: EIR, Francisco Ofaz Covarrubias 54 A-3 de regime climate, jail doors could soon revolve. Colonia San Rafael, Mexico DF. Tel: 705-1295. Bush and others Japan subscription sa/es: O.T.O. Research Corporation, who railroaded LaRouche may soon be in the doclc. Your vote could Takeuchi Bldg., 1-34-12 Takatanobaba, Shinjuku-Ku, Tokyo 160. Tel: (03) 3208-782l. help free LaRouche, and more importantly, yourselves. Copyright © 1992 EIR News Service. All rights reserved. Reproduction in whole or in part without permission strictly prohibited. Second-class postage paid at Washington D.C., and at an additional mailing offices. Domestie subscriptions: 3 months-$125, 6 months-$225, I year-$396, Single issue-$10

Postmaster: Send all address changes to EIR, P.O. Box 17390, Washington, D.C. 20041-0390. •

TIillContents

Interviews Political Economy Economics

11 Sen. Luciano Barca 4 London decrees: U.S. must Senator Barca, a member of the get no new infrastructure Democratic Party of the Left(PDS) If you believe the Economist of in the Italian Senate, blasts the London, the United States does not monetarist assumptions behind the need roads, bridges, water projects, Maastricht setup. and modem transportation, because the "baby boom" is over, and we're �N"�;�::;:::;: ,. in the· post-industrial society. No �-�;: � Departments ...... �,/I ('biia. thanks, guys! Offshore banking and off-balance-sheet financing seem to have kept the financial system afloat for 8 EcoDomic depression is 6 Strategic Map awhile, but now, the worldwide casino is bankrupt. Greenpeace begins terrorism causing political shocks in against Japan. 18 Casino Mondiale: A Britain swindle runs the monetary 14 Report from Rio system 10 Currency Rates Free trade policy takes a hit. The so-called debt multiplier and other tricks have transformed the 11 Unregulated market leads 15 Report from Bonn U.S. Treasury into the house bank to chaos Opposition to IMF austerity grows. of the world currency and bond An interview with Sen. Luciano market casino, and the Federal Barca in Rome. 66 Andean Report Reserve into the employee who After Guzman, the "moderates." deals winning hands from a stacked 13 Banking deck to favored clients. But the CiticQrp's coverup is cracking. 67 Dateline Mexico rigged system has broken down. An PAN party splits. analysis by Chris White, Marcia 16 Business Briefs Merry, John Hoefle, Anthony 77 Letters to the Editor Wikrent, and Laurence Hecht. Baha'i "religion," conspiracies, and populism. 24 Non-money: How the deficit is created 80 Editorial The great debate that wasn't. 27 World trade declines as speculators rush in

28 LaRouche: 'There's no recovery, anyWbere' Photo credits: Cover, Aruba Tourist Bureau. Page 29, Carlos de 30 Crack-up of dollar era Hoyos. Page 34, NSIPS. Page 54, institutions, June-October CARE. Page 65, EIRNS. Page 76, Stuart Lewis. 1992

32 From worker to yuppie: What happened to America's labor force? Volume 19. Number 42. October 23. 1992

Feature International National

36 Argentine patriots meet to 48 Pope rejects pre­ 70 Bush apparatus unraveling 'rebuild the nation' Columbian 'anti-culture of over 'Iraqgate' coverup The Movement for National death' There's open warfare among the Identity and Ibero-American Documentation: From statements crooks at the Department of Justice, Integration, founded in Buenos by Pope John Paul II in the the FBI, and the CIA-the heart of Aires, stands in opposition to the Dominican Republic. the U.S. police-state apparatus. free market policies of President Menem and the international 51 Seoul-Beijing ties portend 72 Senate report exposes bankers . instability 'mother of all scandals'

38 The movement's founding 53 In Jordan, eyes are on the 74 CAN nervous as trial date principles show trial of popular set in kidnap plot Muslim leader Shubeilat 42 Who is Col. Seineldin, and 75 U.S. Supreme Court to why is he in jail? 56 Will the Communist Party allow execution of the take China down with it? innocent? 43 Seineldin: 'a job for men of courage' 58 Bosnia expires under the 78 National News British knife 44 Breide: What we mean by 'revolution' 60 Disinformation from the Stasi's psywar kitchen: the 45 Worldwide messages of KGB and HVA support pour in Part 2 of a series by Anno Hellenbroich.

63 Iraq's dying children: 'If this is the new world order, what is HellT Documentation: Excerpts from the report on Iraqi infant and child mortality since the war, by a Harvard team.

68 International Intelligence �TIillEconoIDics

London decrees: u.s. must get no new infrastructure

by Marcia Merry

The Oct. 10 issue of the Economist, a London weekly busi­ Federal Reserve. All these inl>titutions have a long heritage ness magazine, featured an article in its "American Survey" of opposition to infrastructure. During the era of colonial section, which all but orders leaders in Britain's former America, the City of London viewpoint was expressed in American colonies to give up any ideas they may have, that the prohibitions against any manufacturing and infrastructure economic infrastructure improvements should be put into building in the colonies. In the 1860s, during the attempted place in the United States. wrecking of the United Statd by the Confederacy, the City Within four days, the Washington Post--ever attuned to of London favored the Southern slave-plantation system and the mood in London-began a series of business page articles sailing ships over steam engines and mechanized farming. on "Debating Growth," with the identical message. The first During the Persian· Gulf war; the Economist cheered when article on Oct. 14 focused on the proposals of Democratic the U.S. fighter jets systematically bombed power plants, presidential candidate Bill Clinton, whom the Post had en­ water treatment facilities, and bridges along the rivers of dorsed just one week before . The article, "Building Bridges Iraq. That's what the Economist thinks of infrastructure. to Recovery; Critics Doubt Clinton's Big Public Spending The recent Economist piece, titled "Paved With Fuzzy Plan Will Work," featured a series of quotes from think-tank Intentions," argues along the same lines, and tries to con­ "experts," panning the idea of government-backed infra­ vince you that there has already been more than enough structure development. construction of roads, rails, and sewers in the United States Why is London so upset? Clearly not about the details of since the 1950s! Clinton's proposal, which proposes a measly $20 billion a The Economist offers two graphs on the topic , prepared year, when it will take 50 to 100 times that amount to make from Federal Reserve Bank of St. Louis and Congressional a dent in the depression. Rather, London is terrified that the Budget Office data, purporting to show that from 1950 to very idea that great infrastructural projects are beneficial to 1990 the "capital stock" per capita of U.S. water, roads, and the economy, would once again become popular, after the transport infrastructure has gone up, while federal capital Anglo-American establishment has labored for so long to spending in these areas has continued apace. In fact, the brainwash Americans about the alleged joys of "post-indus­ graphics are sleazy sleight-of-hand. The per capita "capital trial" life without adequate roads, canals, railways, bridges, stock" graph is hokum, because, depending on how you water supplies, hospitals, and electricity. figure valuation, you can place a very high dollar value on Infrastructure, in short, is what keeps a growing popula­ an antique outhouse; any ghetto slumlord knows chapter and tion alive. Without it, people die. verse of this crooked game. And the graphic on spending The Economist is well-known as the mouthpiece of the levels for water, roads, and public transport all show a de­ City of London-the nexus of special financial interests and cline-from which a reasonable person would infer that in­ royal privilege, which traces back over the centuries to in­ frastructure spending should be increased. clude such operations as the British East India Company, the So what does the Economist say? "John Tatum, at the Morgan bank group, and other entities including the U.S. Federal Reserve Bank of St. Louis, says that the baby boom

4 Economics EIR October 23, 1992 brought with it a demand for capital spending on roads and sorts, into the most notorious junkheap in Europe. The Brit­ education that no longer exists today . Per person, the stock ish people are being turned into Yahoos, as Jonathan Swift of public capital has risen quite sharply [citing the phoney described them in Gulliver's Travels. . . . charts]. . . . Besides, the greatest period of growth in public "The problemis now, that some peoplewho call themselves capital spending coincided with the building of the interstate experts, but who definitely are not, are attacking my proposal, highways, and, during the 1970s, with a surge in federally and the proposals of some others, for large-scale infrastructure ' mandated sewage-work. These two tasks are all but com­ projects. I want to emphasize to you that these people are plete, so slower spending is to be expected" (emphasis dangerously incompetent. Dangerous, because their incompe­ added). tence might influence government. We already have enough The Washington Post follows suit, displaying the identi­ incompetence in the incumbent Bush administration, and in­ cal graph on spending levels. Mentioning Clinton's infra­ competence in the Mussolini-style programs that won't work, structure proposal, the Post adds , "Critics, on the other hand, on top of everythingelse , of Perot and Clinton." including some economists who support Clinton, said such a huge increase in federal public works spending is not needed Infrastructure collapse because the neglect of the late 1970s and early 1980s had In reality, U.S. infrastructure is in a state of advanced already been reversed, with the condition of the nation's decay, and a massive mobilization of resources and employ­ highway system, airports and water and sewage treatment ment is required. Consider just water. plants improving rather than declining." • California: The seventh year of drought has begun­ The Post also asserts that providing jobs is no reason for to be expected in an area that is mostly desert-but the state the United States to launch infrastructure, because jobless­ is in a water supply crisis because new water infrastructure ness will diminish as a matter of course ! It states that DRIJ programs have been stalled or stopped for 25 years. These McGraw Hill analysts forecast "that the nation's unemploy­ needed projects include nuclear-powered desalination of Pa­ ment rate, which was 7.5% last month, will fall to 6% by cific Ocean waters, and the massive North American Water later 1994 , without any added stimulus." (As EIR readers and Power Alliance (Nawapa) for continental diversion of know, actual U.S. unemployment is at least 17.3%.) water from the Arctic Ocean. • U.S.-Mexico border zone. Cholera is now in the Rio LaRouche responds Grande River Valley, along most of the 2,000-mile border Now , anyone who follows the U. S. political situation region, because the free trade policies of the City of London, knows that when you talk about infrastructure nowadays, the Federal Reserve, and collaborators.have prohibited water you're talking about Lyndon LaRouche. LaRouche led off treatment infrastructure development, while hundreds of his presidential campaign this year with two half-hour nation­ thousands of new residents have poured in, desperate for wide television broadcasts in February and March on the work. crisis, and specified a workable infrastructure-based pro­ • Florida. Even before Hurricane Andrew hit this year, gram, beginning with nationalizing the Federal Reserve, de­ the state was facing a water supply crisis because of the lack claring a national economic emergency, and launching a of construction of infrastructure such as nuclear-powered package of programs with government credit (not debt). desalination, to make up for the salt-water intrusion into the Low-interest loans of 2% or less, for 10-20 years , would be peninsula's coastal waters and aquifers. put out to local and state governments, private contractors, In Britain itself, the state of infr&structure has reached suppliers, and others involved in the designated projects, such a state of neglect that during this autumn, dysentery has including high-technology research and development. Job become a national crisis in British schools because poverty creation would reach 6 to 8 million in a short time. and lack of sanitation are so severe. During the week of Oct. 10, the same time as the Econo­ Thus, London has good reason to worry that the need for mist' s tirade , details of the LaRouche program were released infrastructure might indeed politically catch on, even among in a 170-page book called The LaRouche-Bevel Program the benumbed American electorate. to Save the Nation; Reversing 30 Years of Post-industrial The Economist view of LaRouche's traditional American Suicide. approach is clearly stated. "True, a growing number of peo­ On Oct. 11, LaRouche made a radio statement ridiculing ple claim that higher government spending brings enormous the Economist. "Now these jerks are saying-and I use the gains in private-sector output. They blame the drop in the term advisedly-that infrastructure is not needed at this time. annual rate of growth of infrastructure spending since the Now, I invite them to look at the case of Mrs. Thatcher's early 1970s (and an outright drop in real terms since 1980) Great Britain. Mrs . Thatcher has probably been the greatest, for America's slower productivity grdwth over the period." most appalling disaster in United Kingdom history in the But the Economist demurs, "Some sober researchers dismiss 20th century. She has turned England, which once had a this view," going on to quote the unbalanced Mr. Tatum of remnant of an industrial base, and a literate population of the St. Louis Federal Reserve.

EIR October 23 , 1992 Economics 5 Strategic Map

Greenpeace begins terrorism against Japan

French naval police arrested five Greenpeace activists Oct. 12 protesting in Cherbourg against Tokyo's plans to return home Japanese plutonium reprocessed in France . The terror­ ists sailed their vessel Beluga into a high-security military area of the port, the French Navy said, and raised a banner reading "Stop Plutonium." When the boat anchored by a crane where the Japanese ship was expected to dock, the terrorists were taken into military custody. Japan' s fre ighter Akatsuki Maru was due in Cherbourg by Oct. 19 with a military escort to pick up the plutonium. Japan depends on nuclear power for almost 30% of its electricity. and plans 50% nuclear electrical capacity by 20 I 0, making it the world leader in nuclear power. Japan's brand-new breeder reactor program, starting this fall, needs the plutonium to function. In the past two months, Greenpeace has organized press conferences which have led a dozen countries to bar Japanese ships from their waters. Greenpeace sources told EJR last March, "There are ways to be obstreperous about this. The plutonium is to be shipped on the high seas around the world. The Japanese need the French Navy escorts and the U. S . Navy. The French could withdraw escort . The U.S. Navy could withdraw . If no one in Washington does something, Greenpeace may have to do something about it."-K. Wolfe

1. Cherbourg: Greenpeace said Oct. 7 it will physi­ cally fo llow the ship carrying plutonium from France . Spokesman Damon Moglen told a news conference, "Greenpeace will take all measures to track the plutonium freighter in order to forewarn the countries which lie along Hieng Ding said on Sept. �4 that Kuala Lumpur has told the path of this extremely dangerous shipment." Japan that international and lpcal laws bar the ship's passage through the Malacca Strait. i 2. Cape of Good Hope: South Africa said Sept. 24 it will ban ships carrying plutonium from sailing 4. Tokyo: Greenpeace Tokyo and the Citizens' Nucle­ within 200 miles of its coast. "We would not like to see these ; ar Information Center (CNIq brought delegates from dozens ships anywhere near our coast," said Theuns van Rensburg. of countries to an Oct. 4-6 qonference, on the likely routes spokesman for the Department of Environment Affairs. The of the vessel, to demand the shipments be halted. Yurika Communist-controlled African National Congress began the Ayukawa of CNIC told reporters, "The Japanese nuclear agitation against the shipments July 7. program is a threat to the w�ole world.:' The meeting drew 3. Straitof Malacca: Indonesia, Malaysia, and up a resolution demanding fhat France withhold an export Singapore have declared Japanese use of the Malacca Strait license for the nuclear fuel, �nd asked the U.S. to withdraw illegal . Indonesian Foreign Minister Ali Alatas said Sept. 17 its approval, as well as askini Japan's Science and Technolo­ his ministry had demanded an alternative route . A Singapore gy Agency to halt the shipm�nt. "The Japanese government Foreign Ministry statement Sept. 19 also demanded Japan doesn't seem willing to abandon the shipment," said Jinza­ change the route. Malaysian Environment Minister Law buro Takagi, director of the ,CNIC, who threatened: "It will

6 Economics EIR October 23, 1992 .. "· o'!4 �

II \) (}I

find it difficultto carry out the second shipment." 7. Cape Hom: The Foreign Ministry of Argentina proclaimed Oct. 10 that the ship "will not pass through waters 5. Pacific: Pacific island states at the Greenpeace under Argentine jurisdiction. This is a firm decision which Tokyo conference urged Japan to scrap the plans. Bernard is not subject to negotiation." Greenpeace coordinator Juan Dowiyogo, President of Nauru, said, "We ...call upon all Schroeder said in Buenos Aires Oct. 9 that the ship is "80- involved countries-Japan, the U.S., and France-to desist. 90% likely to pass through Argentine waters" around Cape Our large and powerful neighbors impose upon us unwanted Hom. He said the ship would carry enough plutonium to risks and burdens without our advice and consent." Lorenzo make 120 atomic bombs and could cause a tragedy of which De Leon Guerrero, governor of the Commonwealth of the "would make Chernobyl look like a minor mishap ." Northern Mariana Islands, said the containers being used were not sufficientto stand up to the pressures of deep Pacific 8. Washington: The Congress Oct. 9 passed an waters should they sink. One gram of plutonium can cause energy bill which mandates a White House study within 60 cancer in thousands of people, he said. days on the "safety risks" of Japan's plutonium shipments. 6. Panama Canal: The U.S.-puppet Endara gov­ The study must consider the safety of the casks containing ernment of Panama barred the use of the canal to Japan in the plutonium, the risks to U.S. states and the adequacy of August. states' emergency plans for an accident.

EIR October 23, 1992 Economics 7 Economic depression is causing political shocks in Britain by Mark Burdman

When was the last time a leading British establishment daily Republican Army (IRA). Th¢ bombing wave began during denounced the policy of an incumbent Conservative govern­ the week of Oct. 5, and incl¥ded the first IRA attack on a ment as "sadistic," or when the elite civil servants of the London pub since the 1970s. To some, it would seem that hallowed British Treasury were subjected to daily denuncia­ the atrocities have provided a:convenient diversion from the tion? Such developments have become typical, marking how Conservative Party's woes, exactly as the previous such explosive the economic crisis has become. bombing spree, last March-April, occurred in the lead-up to The British elites are now in a giant dilemma, admittedly a national election that the Conservatives appeared to be of their own making. The John Major government, through losing. the policies of the Chancellor of the Exchequer Norman La­ mont and his Treasury "mandarins" Sir Terence Bums and 'Hurricane Major' leaves no Eddie George, is carrying out the latest, and perhaps fatal , industry unscathed phase of Thatcherite demontage, forcing the closing of manu­ The question is not "if' but "when" Major will be out of facturing plants and slashing public funding for infrastructure power. As one British insider put the point negatively: "Ma­ projects. Commentaries in the London Times and Indepen­ jor won't be out before Chris$las." dent dailies have not been able to suppress the word "de­ Sept. 16 was "Black Wednesday," when the British pression." pound was taken out of the European Exchange Rate Mecha­ From the standpoint of the establishment, having an un­ nism (ERM) , and the Major government lost its raison popular Conservative governmentin power at a time of grow­ d' €Ire . In late November 1990, the listless former bank clerk ing popular resentment risks setting off unpredictable move­ had been brought in to replacle Margaret Thatcher as prime ments of social protest. In April, at the time of the Tory victory minister. Thatcher's anti-Eurt>pean rantings had become a that kept Major on as prime minister, the FinanciaL Times liability, undermining Londolll' s ability to manipulate Euro­ published a prescient editorial alluding to this problem, al­ pean financialand political ev¢nts. With Major and his appar­ most longing for a Labour Party victory, so that a leftist gov­ ently pro-European views, the City of London could initiate ernmentcould be in power that might better siphon off poten­ its favored insidious approach, what one source called "get tial ferment in hard times. Unfortunately, the elites don't have into the bank to rob the bank. �' But once Major opted out of anything in mind, except how best to implement fascism. the ERM, that classic British method of trickery and manipu- A senior City of London source, during an Oct. 14 discus­ lation was blown apart. . sion with EIR , asserted that the "controlling group in the gov­ Major's policy of "fighting inflation at all costs" is push­ erning elite" would be seeking to "bring about structural ing Britain over the edge. If last month as a whole became changes in the way policy is formulated .. ..This could lead known as "Black September," October is even worse, espe­ to a government of national unity, nominally under the Labour cially when it comes to employment. An estimated 8,000 Party's direction. Such a mechanism would enable this gov­ Britons are being laid off pel' week, and the British press erning elite to push through its agenda, to set up a corporate warns about 3.4 million bei�g jobless within a matter of state on the 1920s Mussolini model. They have now seen that months. Most ominous, the c¥ts are hitting high-technology the policies of the 1980s, the attempts to establish a post-in­ or infrastructure-related sect

8 Economics EIR October 23, 1992 neering, vehicle-building, and construction over the last public spending savagely, without taking any counterbalanc­ month , today's decision confirms that Hurricane Major is ing measures to stimulate growth. Nothing could be better leaving no industry unscathed ." Mike McGahey, former vice designed to tum recession into slump . Inflationmay fall from president of the National Miners' Union, declared, "The gov­ 3.5% to 2.5%, but for many companies the price level will ernment are the modem Luddites, destroying the fabric of be irrelevant: They will have ceased trading altogether. The our society, the basis of our industry, destroying whole com­ gain in competitiveness will be minimal; the cost to people's munities." lives and to the health of the economy will be immense. Mr. Lord Prior ofGeneral Electric Corp. , formerly a minister Major says it would be irresponsible to risk inflation. What in the Thatcher cabinet until he broke with her on economic could be more irresponsible than this new policy, which policy, told BBC-TV Oct. 13 that the British Treasury was risks permanent damage to the productive base of the British "very much discredited in the eyes of industry and a lot of economy?" people in politics ....The Treasury has very largely failed The paper expressed the wish that Lamont would soon British industry." follow the path of David Mellor, a Major crony and Minister Minister of Trade Michael Heseltine was unfazed. He of National Heritage, who was forced to resign on Sept. 24, told the press Oct. 13, "I must not allow my heart to rule my in the face of a number of damaging sCandals. head. " Pointing to imminent new cuts in shipbuilding and possibly other defense-related spheres, Heseltine blubbered: More bore than roar "A whole range of industries that helped to defend us in Other nasty commentaries greeted the performances of acutely difficult circumstances are now finding that the de­ both Lamont and Major at the Oct. 6-9 annual Conservative mand for their products has gone." Party conference in Brighton. Among the most trenchant was the Oct. 10 front-page 'Not just politically suicidal but sadistic' London Guardian piece by political oorrespondent Andrew The arch-establishment London Times, in its lead Oct. 13 Rawnsley. Under the headline, "More Bore than Roar in editorial, blasted the government's fixation onthe single goal Prime Minister's Darkest Hour," Rawhsley mocked Major's of "squeezing inflation." Because of this "obsession," the pa­ rhetorical efforts , during his Brighton speech the day before, per went on, "no other goal plays a part in economic policy: to echo the verbiage and mannerisms of Winston Churchill not recovery , not the reduction of unemployment, not the pro­ addressing the British people during World War II. This, he tection from bankruptcy of Britain's productive base .... stressed, was only an effort to use patriotism to divert atten­ When the economy is flat on itsback , the Chancellor is kicking tion from the reality of economic collapse in Britain now. it in the head. To maintain tight fiscal and monetary policy The Oct. 12 London Independent article by Britain's in the depths of recession is not just politically suicidal but Lord William Rees-Mogg ripped Major's speech under the sadistic." The Times demanded an economic recovery pro­ title, "Mr. Major Ignored the Real E¢onomic Crisis." "The gram based on revi ving "the most depressed areas of the econ­ European crisis is worse than the government is prepared to omy: housing and construction. For each unemployed builder admit. More alarmingly, it is far worse than the government taken back into work, the governmentwould save £8,000 in understands," Rees-Mogg wrote. He said that Major and [unemployment] benefits and lost taxes." others had spoken in Brighton "as thcmgh Europe were still Inhis current state of mind, and given the boys' boarding­ healthy. Unfortunately, that is not true." Rees-Mogg de­ school culture in which so many British figures have been manded that the Major regime "end the perverse process nurtured, it is not certain whether Lamont would take the of deflating during a depression," especially as "the world Times' charge of sadism as an insult or a compliment. One economy is in the worst state since the early '30s," with day earlier, before the House of Commons' Treasury and the Russian and eastern European economies "still in virtual Civil Service Committee, Lamont affirmed pompously, "I collapse," and the U.S. undergoing an economic crisis that don't believe in kick-starting the economy by some artificial will probably result in George Bush losing the next election. stimulus or device." "The United States will not be able to lift the rest of the world On Oct. 9, the same London Times had argued that La­ out of depression. " mont's policies were , of course, not only his own, but also "This is the reality," he continued. " ...We are living Major's, in an editorial headlined, "On the Way Out." It through an economic storm that is shaking the prosperity of accused the governmentof living in "a different world" than the whole earth .. ..How can one convince the prime minis­ most Britons suffering from the economic collapse, and lik­ ter that his world has changed? " ened the insistence of Major and Lamont on fightinginflation above all other priorities, to "slay[ing] a dragon that already The sham panacea of Thatcherism lies near-lifeless at [their] feet ." Other influentials have been stressing that axiomatic The paper went on: "The economy is mired in the deepest flaws prevailing over a decade, rather than policy mistakes depression for 60 years. Now the Chancellor intends to cut devised yesterday, are to blame for the present debacle. Writ-

EIR October 23 , 1992 Economics 9 ing in the London Observer Oct. 11, economics columnist William Keegan commented: "Seldom have I encountered such anger and frustration as has been apparent during the Currency Rates past 10 days, as a government that has lost all credibility struggles to get through the next 24 hours . . . . While Conser­ The dollar in deutschemarks vative cabinets past and present lay the blame at one another's New York late afternoon fixing door, the point to bear in mind is that they were all to blame. 1.60 ...The rot set in with the country's readiness to accept the sham panacea of Thatcherism way back in 1979, and it spread I.SO throughout the 1980s. It was madness to start the battle IV- I'- against inflation in 1979 by doubling it; it was madness to � 1.40 - .-. -- V argue that possession of North Sea oil meant that manufactur­ ing did not matter; and it was madness to obliterate up to a 1.30 quarter of the manufacturing base in the attempt to conquer inflation(an attempt, what is more, which proved abortive)." l.l0 Keegan charged that Thatcherism has nurtured a society 8f1.6 91'1. 9/9 9/141 9f1.3 9130 10107 10114 "in which people came to expect that the mere ownership The dollar in yen of a house would bring a rapid rise in its value, and that New York late afternoon fixing consumption could be effortlessly financed; in which shares that the taxpayer had already paid for (when the companies 140 were originally nationalized) were sold back at knock-down prices, suggesting that capital gains grew on trees, and in 130 which neither manufacturing nor future planning mattered, '-. - because that great god 'the market' would provide. And, 120 '- - after all, Britain's future lay in services ...." 110 Keegan wondered if the monetarist madness may have I gone beyond the point of no return: "My overseas contacts 100 looked on in bewilderment as they saw this country commit 91'1. 9/9 9/16 9f1.3 9130 10107 10114 one crazy economic or social action after another. What the pragmatic Japanese, Germans and French could never under­ The British pound in dollars stand was the lack of balance and any sense of proportion in New York late afternoon fixing Britain, as the country lurched from one chimerical solution 2.00 to another ....One thing I have noticed in recent weeks is - --- that the crisis of confidence in the government's handling 1.90 of the economy has coincided with another development: �I\. Suddenly, everybody has discovered the manufacturing 1.80 , base. I use the phrase loosely, because the issue of the manu­ facturing base is suddenly on everybody's lips; the problem 1.70 '" 7 "- V is that they don't know where to find it. And the concern is: How can British industry profit from devaluation, if there is 1.60 not enough industry to seize the opportunity?" 8f1.6 91'1. 9/9 9/14 9f1.3 9130 10/07 10114 Not one influential spokesman has bothered so far to The dollar in Swiss francs admit that every disaster that has resulted from Thatcherism New York late afternoon fixing was forecast by the American economist and statesman Lyn­ don H. LaRouche, Jr.-from the outset. This is not because 1.40 the British do not know LaRouche. The City of London's own media have steadfastly been at the forefront of 1.30 ,- : " LaRouche's slanderers, including conduiting the KGB-con­ V "" -- � 1.20 � � ,.. cocted lies against him which led to his frameup and jailing. The day some British figureconf esses that this alleged "polit­ 1.10 ical extremist" who is slandered for "calling the Queen of

England a drug pusher" has been right all along, and his 1.00 attackers have been wrong, will be the day when there will 8f1.6 91'1. 9/9 9/141 91'1.3 9/30 10107 10114 be hope for reversing Britain's ruin.

10 Economics EIR October 23, 1992 Here in Italy we are all sick of institutionalengineering (just Interview: Sen. Luciano Barca look at the electoral law). But I believe that one of the struc­ tural problems is the one that Germany ran into at the time of reunification. That is, the failure to correctly define the relationship between regulation and the market. People thought that it would suffice to remove the dike between East and West for Unregulated market the East, at a certain point, to attain prosperity. Instead, the result has been that 70% of the East's ifactories, which even at low productivity could have contilllued to produce for a leads to chaos certain period and also kept a certain slice of the population employed, was immediately swept away, put "out of the Luciano Barca represents the Party of the Democratic Left market," and shut down. (PDS) in the Italian Senate in Rome. Claudio Celani inter­ viewed him by telephone from Wiesbaden, Germany on Sept. EIR: You say, therefore , that these industries should have 25. The interview was translated fr om Italian. been kept in order to maintain the tradle with the other coun­ tries of the ex-communist bloc, and simultaneously start up EIR: Senator Barca, you have taken a courageous stance a process of modernization, investment. against the Maastricht Treaty. Aren't you afraid of being Barca: Exactly. The process should:have been regulated. accused of being anti-European? The market never operates in an absolute way: In every coun­ Barca: I think European unity is more harmed by keeping try there are regulations. Even the EMS , even Maastricht is mechanisms like the present European Monetary System and a complex of regulations. So, on thiS! point even American setting up mechanisms like the ones in the Maastricht accord, economists like Modigliani and Samuelson had seen the risks which have certainly failed. I think that when all is said and and the costs which east Germany would pay, especially done, it was a miracle that the EMS accords held up for 12 because it would lose all the relations, it had with the rest of years, and the time has come for revising these mechanisms the East, which in some way, as you said, was trade and too, if we don't want to run up against new, serious crises. therefore was useful. We talk about low productivity, low quality in the East: In respect to the demand in Russia, EIR: You refer to the monetarist policy which is behind Ukraine, and other countries, undoubtedly the level of East these accords? German products was still superior. Barca: I refer to the monetarist policy which is behind these accords and I would say, the natural, almost objective, conse­ EIR: Let's stay in the East'for a moment. Unfortunately, quence of the way these accords are set up. Instead of starting for about two years now they have been applying so-called out from the growth of political unity and from the common shock therapy to the East, totally opening up the economy to definitionof democratic rules, they started from the currency, the so-called market and watching what happens next. a monetary link, thinking that everything would follow. The Barca: I am very worried about the Russian situation. On rest-the convergence of economic policies and above all, this road , of letting the market "do its thing," things can only democratic powers of direction and control--did not follow, worsen. In the end what will be propelled into motion are and a new, very serious imbalance has been created. As I both reactionary and generically nostalgic forces, which wrote in Unita [the PDS newspaper], in Italy a lot of people would have accepted a reformist apprdach but will not accept really thought that either the monetary system, the EMS , or a neo-liberal approach. It is clear that the reforms had to be Maastricht should work as an outside "whip" for Italy's parti­ done and that there was a delay in dClling them, that at first es and government, which by themselves would not have mistakes were made, steps forward, steps back, yet in some made changes in the social status and so forth . way a system of rules kept not just Russia, but a great union Now, at a time when we have in one day movements of together. financecapital , currencies, and stocks of 1,000 trillion liras, It is clear that at this point, with everything broken up, it is clear that there is no possibility any more for this whip the price to pay will be dramatic, also because there were to stop anything. reciprocal trade ties and integrations� such that some states which today declare themselves sovereign have steel, while EIR: At this point, to maintain monetary stability, would it others do not. Truly, the process should have been con­ not be better on the European level to define and launch trolled. It gets back to the relations between regulation and investment policies to guarantee economic growth? market. Barca: There can be no doubt that we cannot deal with the question of the EMS and Maastricht merely institutionally. EIR: The situation in Europe, in the East, and in America

EIR October 23, 1992 Economics 11 offers a picture of economic depression. There are no more thing up would collapse. markets for expanded production, domestically or abroad. So a guided intervention is needed. Representative Formigoni EIR: Speaking of public debt, since in order to satisfy the [European Parliament deputy and leader in the Popular demands of Maastricht and the International Monetary Fund Movement wing of the Italian Christian Democracy] and (reducing the deficit 3-5%) we would need four times the others have exorted Europe to project itself eastward, super­ Amato measures [austerity decrees of the Giuliano Amato seding Maastricht, which was devised before the Wall fell. government; see EIR , Oct. 9, p. 8] and it would not even There are concrete projects for infrastructural development, suffice to sell all the state holdings, is not debt consolidation roads, high-speed railways, communications, everything the only alternative, perhaps protecting the small investors? needed for allowing industrial plants. This could absorb un­ Barca: This consolidation is flotpossi ble today, and anyone employment and also would create a consumer market and agitating for it only creates a flight out of the lira to the mark. work to pull along the rest of the economy. But the market ...In the medium term we could consolidate, by which I won't finance it; special interventions are needed. How can mean in three or four years. It could not be done by taking it be done? the poor and rich into account, because they are all held Barca: Keeping monetary management of currency and anonymously. The moment you introduce [bond] registra­ monetary liquidity separate from economic policy does not tion-since in Italy there is de¢p distrust of the tax apparatus, mean that the state should not make a policy of active inter­ and the stock market does not work at all, because the stocks vention, not only by setting up investments, etc., but also are registered and are part of your total income-there would setting up incentives, thus creating what can be called "de­ be panic. The Italian saver ha$ no faith in the state. We have mand blocs." I can even plan certain"demand blocs"; at the a finance minister who affirm!>, denies, contradicts himself, time I decide that all over eastern Germany there should be and reaffirmsevery 24 hours. , ..With a new tax every day, modem, well-equipped outpatient clinics with certain ma­ we have managed to created Ilbsolute uncertainty about the chines, technologies, and instruments, behold! I have created law. If it goes on this way, we 111 be back to mattress econom­ demand blocs in the economy. To create demand, I don't ics .. .. necessarily firsthave to build, other than improving the nec­ essary streets and rail links with the industries I will create. EIR: So we need an authorit�tive executive. I do not use the phrase "infrastructure first"-sure, if Barca: We must reestablish certainty in authority and cer­ there is no infrastructure you have to give it priority; let's not tainty in the law. This law c� even be used in the harshest, forget that the principal infrastructure is industry itself, and most severe way, but . . . I must not think that if I buy a that demand blocs can be created not only by making streets, house, the day after tomorrow a minister will wake up and but by making schools, carrying out education, training the slap a tax on the windows--+-which is a tax one minister professions, raising the level of quality. If we create in East actually proposed! Since, he said, Italy's tax assessments are Germany a demand for all this-schools, universities, outpa­ behind, and we don't have time to recalculate them, let's tient clinics etc .-we immediately give things a push and put a tax on windows ....So we have to proceed with a then factories and research centers would start springing up. governmentthat has credibilitf and would first commit itself to enacting measures by normal means, which does not mean EIR: You spoke of "dirty" big capital (recycling of drug­ that there cannot be any extra�rdinary measures .. .. and weapons-trafficking money) which, with the present fi­ nancial deregulation, is inserted into the legal economy. EIR: The knot of the debt, \\fhich is not payable by normal Would not a currency reform, sprung of course by surprise, routes, remains. One last que�tion. What difference do you force this capital to come under scrutiny? see, at the level of economic programs, between Clinton and Barca: If it were done as it was done in Germany in 1948, Bush? it seems to me that this would certainly allow this capital to Barca: I see very little differ�ce right now. The impression be checked. It would not be easy to do this on the European is that we are in a period of electoral promises in which more scale. Most of this dirty money is not in liras, but in marks attention is paid to the impact <>n the voter, with promises of and dollars. cutting taxes, than anything 'else. Then a lot will depend on the forces which will be organized around the two. The EIR: But it turns out that such money has been invested in impression is that Bush is strongly tied to the past of the Italian Treasury bonds, too. Republican Party and the polic�es of the Republican presiden­ Barca: In Italy everybody who has liquidity but no possibili­ tial period, and that there are. fewer possibilities with Bush ties to run operations through Swiss banks, invests in Trea­ to aim at a change in economic policy, because the financial sury bonds, which give greater security. power groups, the lobbies clo$e to Bush, are so many. That's For now, the anonymity of the bonds cannot be touched, the only sense in which I see a difference. At the programmat­ because the whole public debt portfolio which holds every- ic level, it is very hard to distiflguish a difference.

12 Economics EIR October 23, 1992 Banking by John Hoefle

Citicorp's coverup is cracking spending cuts. T�e bank eliminated Little by little, the news about the secret 1991 bailout of 9,000 jobs in 1991. The inability of America's biggest bank is coming into the public view. the bank to admit its losses was dem­ onstrated by the puny $133 million in losses the bank reported for the fourth quarter, giving it a claimed loss for the year of $457 million. To help bring the bank's balance sheet under control, former Dutch Fi­ T he saga of bankrupt Citicorp, the Reserve's discount window. On Aug. nance Minister H� Onno Ruding was United States' largest and perhaps 2, Standard & Poor's dropped its out­ brought in as vice: chairman of corpo­ most bankrupt bank, took another tum look for Citicorp from "stable" to rate banking. Ruding, as a former for the worse the first week of Octo­ "negative," citing the bank's deterio­ chairman of the Interim Committee of ber, with the sudden resignation of rating real estate loan portfolio and its the International l\r1onetaryFund , is an Citicorp President Richard Braddock, low level of reserves relative to its ad­ acknowledged expert in implement­ and yet another admission of in­ mitted non-performing assets. ing austerity mea�ures. Ruding' s ap­ creased federal control over the bank. Within days of these events, Citi­ pointment was alsp designed to attract Citicorp revealed, in a prospectus corp was hit with runs in Hong Kong foreign investors Who had been scared for a $650 million stock offering filed and Pakistan, throwing the bank into off by the bank's former regime. The with regulators Oct. 6, that the bank a severe liquidity crunch and forcing bank also brought in W. Neville Bow­ has agreed not to make any "signifi­ it to borrow heavily from the Fed. en, the former head of Hill Samuel cant" acquisitions or expansions of its Faced with escalating losses, fed­ Investment Management Group of consolidated assets, without the prior. eral regulators secretly seized control Britain, to head its investment man­ approval of either the Comptroller of of Citicorp, and began the hopeless agement arm, wlilich invests money the Currency or the Federal Reserve. task of trying to bail out the bankrupt for wealthy individual and institu­ That announcement follows an bank, outside the public view. tional clients. Aug. 14 after-hours admission by Cit­ One of the first acts of the new To deal with it!>multib illion-dollar icorp's embattled chairman, John regime was to force Citicorp to elimi­ capital shortage, Citicorp engaged in Reed, that a "Memorandum of Under­ nate the dividends it paid on its com­ a series of asset sales and stock issues. standing" had been signed with regu­ mon stock for the first time since Citibank sold PaI1of its 40% holding lators in February 1992. Reed 1813. The bank was also forced to add in the Saudi Amenican Bank Corp. for attempted to downplay the an­ nearly $900 million to its vastly un­ a reported $470 million, sold its credit nouncement by insisting that the derfunded loan loss reserves, mostly card processing unit for $175 million, memorandum was merely a formality, for loans to less developed countries, sold an Indianapolis office building and that Citicorp was well on the road giving it a loss for the third quarter of for $115 million,j and sold its Italian to recovery . 1991 of $885 million. But the amount banking subsidiary and Ambac, its Nothing could be further from the fell far short of addressing the bank's municipal bond insurer. truth , which is that Citicorp has failed overwhelming domestic loan prob­ But the sales :have not kept pace and is being kept alive only by the lems, especially in real estate, where with the losses, especially the evapo­ infusion of huge amounts of federal its $13 billion. portfolio included over ration of the valqe of Citicorp's real and other monies. $3 billion in admitted non-performing estate portfolio. : Citicorp has been The de facto federal takeover of loans, on top of $1.4 billion of fore­ devastated by a seiries of bankruptcies Citicorp occurred near the end of the closed properties held by the bank. among major real estate developers, third quarter of 1991. At the end of Faced with a depleted capital posi­ including Olympia & York, Rands­ July 1991, Rep. John Dingell (D­ tion and tens of billions of dollars of worth Trust, MOIUntleigh, and John Mich.) had told a congressional hear­ non-performing loans, the new Citi­ Portman. Approximately one-third of ing that Citicorp was "technically in­ corp regime set out to raise capital Citicorp's real estate loans are in Cali­ solvent" and "struggling to survive." through stock issues and asset sales, fornia and other West Coast states, Dingell warnedthat the bank had been and through implementing an internal where the real estate crisis is rapidly borrowing heavily from the Federal austerity program of further job and reaching blowout proportions.

EIR October 23, 1992 Economics 13 Report from Rio by Silvia Palacios

Free trade policy takes a hit The first hysterical reactions have al­ [tamar Franco's government appears to be reforging historic ready come from the liberal group links between the state sector and the Armed Forces. which speflks for the "universalist" faction of It amaraty (Brazil's Foreign Ministry), and which seeks Brazil's unconditional adherence to the so­ called Agenda for Peace (read, "new world order") of U.N. Secretary Gen­ eral Boutros Boutros-Ghali. To judge by the stated intentions patrimony. Nominated by former The "universalists" have their of his ministers and by the nervous minister Aureliano Chavez, an old­ mouthpiect in the daily 0 Estado de commentaries of representatives of guard nationalist, the new mines and Sao Paulol which, after Franco's in­ the local oligarchy, the arrival of lta­ energy minister, Paulino Cicero, ac­ auguration� began to publish editori­ mar Franco in the Brazilian presiden­ cepted his post with a simultaneous als blasting each and every one of his cy is dealing a hard blow to the Anglo­ criticism of the privatization program, nationalist tendencies; one such edito­ Americans, who until now have man­ and defense of the state oil monopoly rial demanded preservation of a for­ aged , with few obstacles, to perpetu­ Petrobras. eign policy based on the principle that ate their neo-liberal economic revolu­ On the results of the privatization "modernit)t also consists of replacing tion under the rubric of "free trade" program, Cicero declared, "it is nec­ the obsolete concept of sovereignty and "modernization" across Ibero­ essary to put an end to the numbers with one of interdependency of na­ America. game'," an explicit reference to the tions. " During his inaugural ceremony on fraud committed against the nation Regardiing Petrobras, 0 Estado on Oct. 5, President Franco gave a brief with the sale of the first major state Oct. 7 lamented that Brazil was run­ and succinct speech which showed lit­ company, Usiminas; the government ning the risk of the company "re­ tle tolerance for the U. S. State Depart­ put it up for sale at $1.7 billion, which turning to military control under Gen­ ment-controlled propaganda mer­ was more or less its true value, but in eral Geisel's orientation. Everything chants who usually dominate Ibero­ fact only received $450 million for it, suggests that in this change of govern­ America's government houses. the minister charged. ment, in which Mr. Aureliano Chavez Said Franco, "The Brazilian peo­ Perhaps the greatest fe ar of the in­ has much influence, there is a return ple are taking the state back into their ternational financial oligarchy is that to the time in which Petrobras will be hands, after a turbulent period the state companies, which under considered a company of the highest charged with uneasiness, indignation, Franco have been "reinstated," are strategic and national interest. A sa­ and constraints. . .. For decades, forming an alliance of historic inter­ cred monopoly." millions of our children have been ests with the Armed Forces. The mili­ The panic of this elite worsened, born deprived of all their rights, be­ tary has, under the new Army minis­ according to 0 Estado. when the ru­ ings for whom life is but a short inter­ ter, Zenildo Lucena, formed a mor began to spread throughout Bra­ val of sacrifice. I reject as criminal and homogeneous entity in explicit oppo­ silia that ' the Franco government cruel that notion of 'modernity' which sition to the Anglo-American policy would soom be reopening its embassy denies the dignity of bread, of educa­ of "technological apartheid" that has in Iraq. Such an act would signify a tion, of honest labor, of health. A been imposed on Brazil from outside. dramatic change for the Brazilian na­ country cannot have modernity re­ In this context, the announcement that tion, and a hard blow to the interna­ served for sectors of privilege, while the military 's aeronautic company tional Zionist lobby. It was with Bra­ the rest face hunger on a daily basis." Embraer is exempt from privatization, zil's sudden rupture with Iraq in 1990, The first kick in the teeth to the is exemplary of this conjunction of pa­ to align Brazil with George Bush's Anglo-American establishment has triotic interests. new order,! that then President Collor been the Franco government's reform Petrobras and other resource-rich initiated a strategic change in foreign of Brazil's program to privatize state strategic companies were the final tar­ policy away from independence, and companies-a program which, under gets ofthe free trade neo-liberals, who especially away from the construction the Coli or government, was synony­ sought to open those companies up to of solid links with the Arab world, for mous with surrender of the national international speculators for looting. which Iraq was the entry point.

14 Economics EIR October 23, 1992 Report from Bonn by Rainer Apel

Opposition to IMF austerity grows Saxony in 1989 in the machine tool With eastern Germany approaching Third World levels of sector, there were only 69, 100 (17%) poverty, when will Bonn walk out of the IMF ? left by May 1992. In the manufactur­ ing sector as a ",hole, of 1.2 million workers , there were only 250 ,000 left by May 1992, aM by January 1993, there will only be 200,000 (17.7% of the employed w(!)rk force in 1989) . The situation is even more dra­ On Oct. 12, Minister of Housing German housing associations would matic if monitored on the level of in­ Irmgard Schwatzer called for partial not be able to pay either the debt or dividual plants in crisis sectors, like debt relief for the east German hous­ the interest. Their income from rents firms that produ�e machines for the ing sector and a freeze on all pay­ is far too low to allow any repayment textile industries; The big textile-ma­ ments of old debt until the end of at all. Furthermore, essential invest­ chine maker in Chemnitz, Textima, 1996. This initiative, which put Mrs. ments in the rehabilitation of 7 million which formerly employed 21,000 Schwatzer into a fightwit h the mone­ old homes, plus the construction of people, now has only about 1,500. tarist-minded finance minister, new homes, will cost around DM 200 The firm "survives" by selling idle Theodor Waigel, is important in two billion ($140 billion) over the next 18 factory areas to department store ways: first, she is a member of the years . The high interest rates imposed chains and the like. liberal Free Democratic Party, which by the German central bank will drive It has been from Saxony that the has so far been a bastion of support the housing debt from DM 36 billion firstdirect attacks on the IMF and the for the free market policies of the In­ to DM 51 billion by early 1994. Bonn cabinet's lOyalty to the mone­ ternational Monetary Fund (IMF); The only way out of this crisis is tary fund have been launched. In a second, her move came after growing debt forgiveness, and access to new, speech in Dresden on Oct. 5, Dieter pressure from the five east German low-interest credit. Rudorf (Social Democrat), the second states to take the debt burden off their This is increasingly becoming the chief speaker of the Saxony state par­ shoulders. view of many east Germans. The mu­ liament, said that the effect of IMF The initiative by the five state nicipalities report average tax reve­ conditionalities has been to freeze housing ministers, in tum, came in nues at 20% or even less of what they sales worth DM 2 billion in farming response to increasing ferment actually need for day-to-day opera­ and other machines, which could against debt payments from the mu­ tions. The tax revenues are so have been sold 'to the industries of nicipal housing associations. alarmingly low, because fully 55% of the former Soviet republics and other Bonn ruled in October 1990 , the industrial output and employment eastern clients, qut are instead stand- I when the two Germanys were unified, of pre-unification east Germany has ing idle. that the old debt of the housing sector been "phased out." This has to do, Rudorf specified of East Germany, an estimated 36 bil­ The shocking 55% official figure in a discussion with this author, with lion deutschemarks, was to be carried is even contested by east German in­ the practice of ' IMF experts, who over. Bonn's meager concession, dustries as "far too rosy." Labor lead­ blackmail the Russian government then, was to declare a grace period on ers in the state of Saxony report the with the threat not to make loans for repayment until the end of 1993. East following figures: machinery imports, but only for im­ German housing associations were to While the official jobless rate in ports of lUXUry qonsumer goods like start paying the debt as of January the state is 30 .7%, one has to add brandy and cigarettes. 1994. those who travel to work in the west­ Rudorf called on the government This decision was justified by ern states and those who have taken in Bonn to pressurethe IMF to modify Waigel as being in compliance with early retirement. This adds up to a its policy. The situation has deterio­ the "world debt situation and discus­ total of 40%, which the labor leaders rated too far, however, to be im­ sion about it." Debt forgiveness consider positive, by comparison to proved by "modifications": Germany would, Waigel argued, "send out just the 50% or more jobless rate in the must walk out of the IMF entirely, the wrong signals." four other east German states. launch a new system of industrial It was clear even in 1990 that east Of the 397 ,000 jobs reported in credit, and write off the old debt.

EIR October 23, 1992 Economics 15 Business Briefs

Trade Renewed discussion of the nuclear option tries. Rising trade surpluses have permitted comes as the governmenthas just signed a con­ substantial increases in debt repayment by the EC, Poland sign pact tract with the U.S. oil firm Amoco, which South to the North, while private bank lending to deliver food to CIS allows the company to explore oil and gas in ...has continued to decline." Poland. Drilling will take place in central and By the late 1980s, Gordon said, this trans­ eastern Polandover 11,000 square kilometers. fer from South to North totaled $20-40 billion Polish Minister of Agriculture Gabriel Janow­ Amoco has completed geological explora­ a year. "The developing countries desperately ski and the EuropeanCommission in Brussels tion for the Polish governmentat its own ex­ need investment capital, but it's running the have signed an agreement to deliver food to pense, and in return it was given the right to other way," former Soviet republics. The food will be choose whereit will drill. Ifthe Americans find boughtwith westem money from Polish farm­ oil, they will get an exclusive concession to ers and delivered to the East. exploit the fields. In return, Poland holds the In the firstphase of the program, Poland firstoption to buy gas or oil from Amoco, but Technology will get ECU 125 million ($175 million) for at prices determined by the Americans. its agricultural products; in the second, Poland Since the governmentwants to close most Franc� refuses to will get ECU 625 million together with of Poland's coal mines, this policy means a Czechoslovakia, Hungary, and Bulgaria. high dependency on the goodwillof the United buck 'new world order' Janowski also announced measures to im­ States-if Poland does not push ahead with prove the protection of Polish farmers against nuclear power options. The French governmentof President Fran�ois low-priced food imports from abroad. The Mitterrand has made it clear to Indian Prime government in Warsaw accepted his proposal Minister Narashirna Rao that France will not to introduce customs duties on some imported buck the "new world order" policy of "techno­ agricultural goods "in respect to international Monetarism logical apartheid," to aid Indian spaceornucle­ agreements. " Unofficially,Janowski said that ar technology development, the Hindustan sugar would be one of these goods. He also Times reportedOct. 2. Rao, who was in France said the government will act to protect family Debate must begin on IMF for three New York City. signing tqe nuclear non-proliferation treaty The Polish energy development plan which in­ "A virtual world government hasemerged and miss* control technology regime," the cludes a nuclear power option is still valid, Jer­ over the last 15 years, headed by the parallel paperrepQrted in an editorial. zy Niewodniczanski, the head of the state nu­ internationaleconomic institutions-the IMF Simil�ly, the Russian decision to apply clear power agency, said in an interview in the and the World Bank. During the 1980s and full scope safeguards on supply on nuclear Oct. 5 Gazeta Wy borza . Construction of the early 1990s, their policies have devastated the equipment to foreign countrieswill impact In­ first nuclear power plant in Zamowiec (near lives and livelihoods of hundreds of millions dia. After the Canadians had left following the Gdansk) was abruptly halted a few years ago of people in the developing countries. And the Pokhran explosion in 1974, India had arranged as a result of protests, but at the same time a U . S. government has close to a controlling in­ with the Soviet Union to receive heavy water plan for nuclear power stations was approved. terest in those two institutions," he wrote. for the 235 megawatt Candu reactor at Rojas­ This plan is still there and can be drawn upon, "The policies have almost uniformly con­ than atom1c power station. The Soviets had he said. tributed to dramatic reductions in workers' real also offered India two 1,000megawatt VVER Niewodniczanski said he believes that the wages, sharp cuts in the standard of living of reactors at.Koodnakulamin Tamil Nadu. But social climate is now betterfor investment in the vast majority of households, and rising in­ during a recent tripto Russia by Indian Atomic new energy sources, and that if the country is come inequality. Energy O;>mmission Chairman Dr. P.K. Iy­ to have a nuclear power supply by the year "Even more strikingly, by the mid- 1980s, engar, RU$sia rejected requests to supply en­ 2004,which is the target date of the old govern­ these policies were beginning to result in a riched uranium for the Tarapur atomic power ment energy plan, constructionof at least one massive net flow of resources out of devel­ stations. He was told that since India is not a powerplant has to begin now . oping countries back to the advanced coun- signatory of the NPT, the old safeguard ar-

16 Economics EIR October 23, 1992 Brifdly

• JAPAN will ctIangeits aid policy toward China to prevent the aid being used in military-related projects, Tai­ wan news service CNA quoted Shan­ kei Shimbun on Oct. 2. Much of three Japanese loans ha$ gone into the con­ rangement that New Delhi had with Moscow is On top of this, the Russian health care sys­ structionof railways and harbors that no longer valid and morestringent safeguards tem is collapsing. Some 40% of hospitals and could be turned to military use. The will be required in order to continue with the 30% of outpatient clinics have no hot water; shift will not take place until fiscal old agreements . 18% and 15%, respectively, have no sewage year 1996 . system; and 12% and 7% have no water supply at all . • CHILD ABUSE is now four Water pollutionis the worst. All the main times that of 1910; the number of Russian rivers have between 10and 100times Health children living i� poverty has in­ the allowable viral and bacterial levels. Yev­ creased 33%, and teenage suicides geny Belyaev, a representative of the state Disease holocaust have doubled, sayiS Dr. Marc L. Mir­ committee for sanitation supervision, said that inghoff, director e>f the Fordham In­ "even by our loose standards, over 20% of sweeping Russia stitute for Innovation in Social Policy drinking water does not meet required stan­ in Tarrytown, New York, which dards in terms of its chemical composition" The natural increaseof the Russian population maintains "The ' Index of Social due to industrial dumping. is being wiped out by disease, the Oct. 8 Lon­ Health" in the U.$. The index began don Guardian reported, based on two reports at 75 in 1970, and fell to 42 in 1990, commissioned by PresidentBoris Yeltsin and the Oct. 5 New Ydrk Times reported. just releasedby Ecology Minister Viktor Dani­ lov-Danilyan. Ukrainianleaders reporta simi­ • RUSSIAN CENTRAL bank larsituation. head Viktor Gera,hchenko said Oct. Pollution is so bad, and health carehas col­ Exploration 5, "The International Monetary Fund lapsed so totally, that in 29 areas in Russia, is not an all-seeing God. Many of its deaths outnumberlive births. Toxic waste con­ Two U.S.-Russia space officials and top iworld experts are tarnination and air and water pollution are so ·agreements signed starting to realizfl our problems are severein vast areasof Russia, that almost one­ not as simple as t�e IMF leaders had sixth of the country is unfit for human habita­ imagined." The bJFistwas reported by ' tion. Up to 2.7 million peopleare still living in NASA Administrator DanielGoldin and Rus­ Reuters . the areaaffected by the massive radiation leak sian Space Agency head Yuri Koptev signed from the Chernobyl nuclear disaster, and two agreementsin Moscow on Oct. 6 for U.S.­ • MOST POLF,IS support the labor 400,000 still live in areas officially declared Russia cooperation in space exploration. One protest actions in 1fychy, at the FSM unfitfor human habitation. Some 1.3 million agreement is for U.S. participation in the Rus­ auto plant, acconfing to a survey by peoplehave been registeredat hospitals as suf­ sian "Mars '94" mission to Mars, and another the Polish Center fpr Analysis of Pub­ fering from diseasesrelated to radiation expo­ is for "Cooperation in Human Space Flight. " lic Opinion. Over 60% of the popula­ sure from Chernobyl. The Mars agreement provides for the flight tion which does not work in the facto­ Diphtheria is sweeping through Moscow of two U.S. scientific instruments, the Soil ry stated that the: strikers' demands and whooping cough through St. Petersburg. Magnetic Properties Experiment and the Soil were justified. Infant mortality is soaring. Complications oc­ Reactivity/Composition Experiment, on the cur in 40-47% of all Russian births, and, if Russian Mars '94 lander. The question of the • 'FISCAL OvERKILL' was the currenttrends continue, only 1 5-20% of all ba­ magnetic characteristics of Mars is key and term used by G¢orge Magnus, an bies will be born healthy by 2015. Official in; unanswered; only a faint magnetic field has economist at S.Gt Warburg in Lon­ fant mortality in 1991 is 17.9 per 1,000; by beendetected, which is an unexpectedfinding. don, to the Oct. 8 financial Times. to international standards, the report states, that As partof the second agreement, two Rus­ describe how Eur�pean governments rate would be three times higher. One-fourth sian astronautsare scheduled to begin training may be trying to i eliminate deficits . of all intestinal diseases in Russia occurin chil­ in late October at the Johnson Space Center to "If private-sector activity is going to dren, due to the filthyconditions in kindergar­ flyon the Space Shuttle. One of them will fly be depressed for !some time, this is tens, where respiratory and intestinal diseases on a Shuttle mission in November 1993 as a the wrong time toi cut back spending are rampant; 60% of Russian children are mission specialist. in private investment." thought to be showing signs of rickets or aller­ A NASA astronaut will also flyon a long­ gies, and 10% show symptoms of anemia. duration Mir space station mission of more • U.S. POVE�lTY is growing The Ministry of Health has calculated that than 90 days. This is scheduled for 1995 and among whites, too. Ofthe 4.2million i only 25% of all 16-year-olds are healthy, and will coincide with the dockingof a Space Shut­ Americans added to the ranks of the if international standards wereapplied to army tle orbiterat the Mir station, though the astro­ poor in 1989-91 , $1% were non-His­ recruitment,only 20% of young men would be naut will be flownto the Mir on a Russian Soy­ panic whites. considered fit for military service . uz spacecraft.

EIR October 23, 1992 Economics 17 �IIillPontical EconolllY

Casino Mondiale: A swindle runs the monetarysyst em

This report was prepared by Chris White, Marcia Merry, rowings, with reserves available at the beginning of the year, John Hoefle, Anthony Wikrent, and Laurence Hecht. indicates that if the Bank of England is not yet out of reserves, it will not be long before it is. The July 7 summit meeting in Munich, Germany of the heads The exhaustion, or near exhaustion, of central bank re­ of state, finance ministers, and central bankers of the Group serves reflectsthe final breakdownof the internationalsystem of Seven industrialized nations proved the utter bankruptcy of so-called floating exchange rates, which came into exis­ of the political leadership of the so-called developed world. tence in the aftermath of Richard Nixon's momentous Aug. The incompetents produced their verbal platitudes and reas­ 15, 1971 decision to take the dollar off the gold standard. suring noises. The result: The dollar went into free fall. That was the day that Nixon ended the post-World War II Similarly, the events culminating in the Sept. 16 collapse Bretton Woods system. The exhaustion of the central bank of the British pound, demonstrated for all to see that the so­ reserves also reflects the end of the 1980s' orgy of deregula­ called monetary authorities, the combined central banks of tion and speCUlation unleashed by the international co-think­ the developed world, are as impotent and incompetent as ers of Britain's Margaret thatcher when she became prime their political counterparts. That day it became transparently minister in 1978. Strange it is indeed that John Major's oppo­ clear that the central bankers, and the system they subserve, nents in Britain's Conservative Party are calling for a return has been destroyed, Frankenstein-style, by a monster of their to precisely those of her policies which produced the most own making. appalling of disasters in Britain since the Black Death of the During the September monetary turmoil, Germany's cen­ mid-1 4th century. tral bank spent $65 billion worth of its foreign exchange The breakdown of the central bankers' internationaloper­ reserves to defend the parities of currencies within the Euro­ ation is quite simply identified, on the surface at least. The pean Exchange Rate Mechanism. That was about one-third volume of internationaltran sactions carriedout every day on of the central bank's reserve position, as of the beginning of the world's foreign currency markets was, by early Septem­ 1992. The French central bank exhausted all but 10% of its ber, twice the available foreign exchange reserve funds of the reserves in the same effort. Central banks of Italy and Ireland world's major central banks. The monster that was created are out of reserves, with the Irish now forced to borrow from during the 1980s destroyed its nominal master. international markets to replenish what has been lost. Carlos Thus, the spectacle of officials from a variety of coun­ Solchaga, the Spanish finance minister, now talks of the need tries, like Britain's Chancellor of the Exchequer Norman for central banks to pool holdings of reserves. As for the Lamont, solemnly affirmi�g before the world, "the pound British, whose currency took, and is so far taking, the biggest will never be devalued," 01il1y to immediately do that which, hammering from recent events, they are desperately trying he said, would never happen. The failure of his double inter­ to cover up the exhaustion of their central bank's reserve est rate increase Sept. 16 says it all. The resources no longer funds. Comparison of reported disbursements and bor- exist to continue the charade.

18 Political Economy EIR October 23, 1992 FIGURE 1 FIGURE 2 Growth in global currency trading Central bank reserve index

(billions $ per day) (index 1987 = 1.00)

$1,000 1.40 900 1.30 SOO 1.20 700 1.10 600 1.00 500 Germany 400 0.90 \ 300 0.80 200 0.70 100 o 0.60 1986 1989 1992 1983 19S4 1985 1986 1987 1qsS 1989 1990 1991

Sources: Bank for Intemational Settlements, U.S. Treasury. Sources: International Monetary Fund, EIR. Relative changes In central bank reserves, index� to 1987. Lines show relative changes for each countrybut do not shaw relative sizes of reserves between countries. Each bank Index computed oh Its own currency. The breakdown also points to the reality that these current , political leaders and their companions in the central banks seem to have forgotten, assuming they ever knew, what mon­ ey is actually supposed to be. TABLE 1 Beyond the exhaustion of the reserve position of the cen­ Central bank reserves tral banks , the financial side of what broke down Sept. 16 (billions of national currency) includes the following elements. Like Humpty Dumpty, it Year Germany Japan U.K. U.S.A.· won't be put back together again. Currency trading: The volume of currency transactions 1983 OM 160.6 ¥26,385 £13.41 $191.7 in world markets is running at $1 trillion per day, according 1984 166.7 28,627 11.95 203.8 t6 Nicholas Brady, the bumbling secretary of the U. S. Trea­ 1985 172.2 29,705 12.72 224.0 sury. That cited daily volume was reached some time earlier this year. Brady's estimates are seconded by various Europe­ 1986 182.9 32,119 13.97 257.4 an agencies. It has been reported in German and Austrian 1987 199.7 34,920 14.22 269.1 newspapers, that of this daily $1 trillion throughput, more 221 .1 39,462 15.28 283.9 than $300 billion is handled in the City of London, nearly 1988 $200 billion in New York City, about $130 billion in Tokyo, 1989 234.6 37,652 15.18 289.1 and $57 billion in Frankfurt-am-Main, Germany. 1990 239.0 47,900 22.02 325.1 Leaving aside weekends and holidays, when money mar­ 1991 278.8 47,200 22.25 336.7 kets are shut, there are about 250 trading days in the year. Figure 1 shows the growth of the daily volume of curren­ • Average of last month in period. cy speculation since 1986. In these short six years, the vol­ Source: IMF, International Financial Statistics. ume has doubled, and nearly doubled again. In 1987, there was the "Black Monday" stock market meltdown in the Unit­ ed States and around the world. Note how this form of specu­ the world's bond markets in just 12 tradingdays , or 20 times lative activity has increased since that stock market collapse. every year (though it doesn't happen that way) .. The growth in the international volume of currency transac­ The annual throughput, under these two headings alone, tions can be compared with the growth of central bank re­ comes to around $325 trillion per yearL For comparison, that serves, shown in Figure 2, and with the magnitude of such is a factor of more than 50 times greater than either the U. S. reserves, by central bank, up to the end of 1991 (Table I). Gross National Product, or the approxilmatetotal dollar value Bond dealing: Next in volume, after the currency mar­ of all goods traded worldwide, in aqy one of the last few kets, come the international dealings in the bonded debt of years . It is about $60,000 worth of transactions for every one the U.S. government. In this case, it is estimated that about of the inhabitants of the globe-nearly three times the per $300 billion worth of transactions takes place, around the capita income of an American-when two-thirds of the world, each and every day. At that level of activity, the whole world's population is not assured of e!ven an adequate daily of the $4 trillion U. S. federal debt could be churnedthrough supply of food . Then there is the $25-30 trillion traded annu-

EIR October 23, 1992 Political Economy 19 ally in futures markets, the $6.5 trillion approximate volume of the futures market in U.S. Treasury Securities, and bring­ FIGURE 3 ing up the rear, the stock markets. U.S. dollars per foreigtlcu rrency' unit U . S. stock markets do $10-12 billion worth of business $3.00 each trading day, apparently. So, the global activity in cur­ +--...... - -- rency and U.S. government debt markets is more than 100 2.50 times greater than what goes on in the U.S. stock markets. Despite this, the Dow Jones post-industrial index is still taken 2.00 to be the best indicator of the state of health of the U.S. 1.50 financial system and economy. 1.00 Money: a political creation Is any of this actually money? Of course not. Just 10 0.50 \ years ago, hardly any of it existed. Twenty-five years ago it Deutschemark O �TTTTrrMrrM���TTTrMrrM-n��TTTr�� didn't exist at all, except for stock markets and holdings of 1950 1955 1960 1965 ,1970 1975 1980 1985 1990 government debt, then actually long-term instruments, held Source: International Monetary Fund •. over years, rather than hours and minutes. It seems that we have been through another transition, in the jargon of finan­ cial specialists, from dollars to petrodollars to offshore dol­ lars to narcodollars to non-money dollars and non-money United States in the form of .n overvalued exchange rate, a narcodollars. condition which has been allQwed to persist over the entirety What is a dollar worth? Some point to the fact that among of the postwar period. the United States' big foreign exchange eamers are the prod­ Such an economic function of money implies a relation­ ucts of the Coca-Cola company, and McDonald's Big Mac, ship between the cost of producing output, and its price, in often priced around the world at two to three times their U . S. both internal andexternal so-aalled markets. The costs would levels, to argue that the dollar is undervalued. Russians, include materials supplies and utilities, depreciation of plant Mexicans, and Brazilians similarly assert the dollar is way and equipment, wages of production and · administrative overvalued, and are also right. workers, plus a fair and reasonable profitto permit invest­ But, what if it isn't real money anymore, at least from ment in upgrading activities� A government could take the the standpoint of the rest of the world? What can actually be whole economy in the same !way: working backwards from done with a dollar? What does it buy, except more money, what is required to reproduce another generation, qualified or U.S. government debt, or mob-like political protection to work under foreseeable scientificand technological condi­ from one or another provocation and destabilization, often tions, and also, to produce another successor generation; as not organized by agencies of the U.S. government itself? from this, to the rate of investment, under conditions of What do such considerations about how much the currency technological progress, needed to create and maintain the is worth really mean? Maybe we have to start thinking again work places, and infrastructure needed to sustain the required about what real money would be, or used to be. healthy, forward momentum of the country'sdemographic Money, after all, is a political creation. You want money, profile, increased life expectancy, declining infant mortality, you can print it. However, it is also a political creation of a longer time spent in education, upgraded employment, and government. In the old days, a country's currency valuation so on. It is the kind of approaQh that farmers refer to as "parity in internationalmarkets used to reflectsomething of the reali­ pricing." Or, the kind of approach which used to govern ty of the productive power of the economy. That was in the electric utility and transportation administration, in the days days before Aug. 15, 1971, when foreign exchange transac­ before deregulation. tions were primarily for the purpose of balancing and settling trading accounts, actually paying for goods that were being Credit generation imported and exported. Out of such calculations would be produced an estimate This is shown in Figure 3, which plots the number of of the volume of credit necessary to accomplish the objec­ dollars and cents needed to buy a British pound sterling, a tives. Of that estimated volume of credit, some portion,relat­ German mark, or 100 Japanese yen, since 1955 . The relative ed to the combined estimate. necessary rate of growth, and stability , prior to Nixon's 1971 decision, can be compared the productivity-enhancing; 'hence labor�cost-reducing and with what looks like the steady decline of both the dollar and cheapening effects of the invtstment pathway chosen, would the pound since. Note the three-, almost fourfold collapse of be issued as money. Then, wbat used to be called "the sound­ the dollar against the mark and the yen since 1971. The ness of money," or "hard money, " would reflectthe adequacy valuation of the pound reflects a financial subsidy from the of a'nation 's commitment to create the conditions for the

20 Political Economy EIR October 23, 1992 FIGURE 4 FIGURE 5 Deposit banks' foreign liabilities Deposit banks' foreign liabilities in selected (trillions $) key years (trillions $) $11 10 $10 II Worldwide 9 9 British Commonwealth 8 8 � 7 7 6 6 5 4 5 3 4 2 3 1 2 0 1 1963 1968 1973 1978 1983 1988 0 1971 1978 1982 1987 1991 Source: International Monetary Fund. Source:International Monetary Fund. future existence of itself and its population, through increas­ ing the productivity of its labor force. the money employed belongs to whomever it is supposed to. In this century, we've done it that way in wartime, as "The market" can then tum around and sell the debt to the under Franklin Roosevelt. It also happens to be the intent of Federal Reserve, in exchange for money. And the Federal the Preamble and Article 1, Section 8 of the U. S. Constitu­ Reserve can use its holdings of debt to drain money out of tion. It was the effective method chosen to build the United the market. This is supposed to regulate the money supply, States, under the First and Second National Banks, and under and perhaps did in the days of real money. Bank and invest­ Lincoln's "greenback" policy, against contemporary advo­ ment house holdings of government debt become the basis cates of the kind of diseased approach which has now brought for a debt multiplier, spreading outwards from the banks and the world into disaster. Such is the tradition of the Confed­ the Federal Reserve. eracy. Ridiculous, to borrow what will in any case be one's In this approach, government is the source of credit, own-future tax revenues-to repay with what is one's issued into the banking system in the form of, in the case of own-present tax revenues-to have 20% of the transaction the United States, Treasury notes, at low interest rates. Such skimmed off the top in the form of debt service claimed by credit is directed to financingeconomic functions, for exam­ the middlemen in the transaction. Under the Constitution, it ple, capital investment in basic economic infrastructure, such is flatly illegal, because it is inimical to republican govern­ as transportation systems, power generation and grid con­ ment. The only function served is a transfer of public revenue struction, water management, treatment, and distribution, into pri vate hands in the name of "sound financingpracti ces. " and sewage systems. Credit issued for such productive pur­ The giveaway swindle is running at $200 billion per year in poses generates an economic multiplier effect through the debt service. economy as a whole in the form of rising employment, filling It has transformed the U.S. Treasury into the house bank order-books for subcontractors on projects and so on . of the world currency and bond market casino , and the Feder­ al Reserve into the employee who deals winning hands from The debt multiplier, and other swindles a stacked deck to favored clients. In the alternative verSlOn, now imploding, government The multiplier effect is aggravated by the existence of does not issue credit, but rather finances its activities through offshorefunds . Figure 4 shows the growth of deposit banks' issuance of debt, secured against future tax revenues. Ab­ foreign liabilities as an approximationof such offshore funds. surdly, the government borrows in anticipation of its own This captures the almost $400 billion socked away in the future revenue from some private party , secured against its Cayman Islands by the end of 1991, and the almost $300 own tax revenue in the form of interest and amortization. billion stashed in the Bahamas, along with equivalent funds The Treasury sells debt into "the market," to raise funds, in Hong Kong, Singapore, and other places. This was rightly supposedly to finance that part of the government's budget considered a threat to the entire world system back in 1971, which is not covered by tax revenues or other receipts. "The when it was estimated that there were' about $200 billion of market," in this case, is the investment houses and banks. such stateless funds in circulation; there were $10 trillion of Since 1985, it has been possible to buy federal debt with­ such deposits in existence at the end of 1991, a fiftyfold out p�oviding proofof origin of funds, or documentation that increase in 20 years (Figure 5).

EIR October 23, 1992 Political Economy 21 FIGURE 6 FIGURE 8 Growth In over the counter instruments U.S. dollars per foreign currency unit (trillions $ outstanding at year end) $2.2

$4.5 2.0 4.0 1.8 3.5 1.6 3.0 1.4 2.5 2.0 1.2 1.5 1.0 .Swlss lranc 1.0 0.8 I ......

0.5 0.6 o 0.4 1986 1990 1991 +--r---,--r--r---;--,...---;--r----r--r-- 9/87 2188 8/88 2189 7189 1192 8192

Sources: Futures Industries Association, Intemational Swap Dealers Source: EIR. Association, Bank lor International Settlements. 1984, U.S. banks had $1.4 trillion in off-balance-sheet liabil­ ities; by 1985, that figure had risen to $1.8 billion. By Sep­ FIGURE 7 tember 1991, the 20 largest U. S. banks had $6. 1 trillion in Growth in exchange rate instruments off-balance-sheet liabilities, 9r 697% of their $899 billion in (trillions $ outstanding at year end) reported on-balance-sheet as$ets. Citibank alone had slightly more in off-balance-sheet liabilities in 1991 than the entire $3.5 banking system had in 1984. i 3.0 The transactions take the �orm of "hedges. " Movements, 2.5 or volatility, of one currenqy are compensated by trading

2.0 in the contrary direction in f another currency or group of currencies, or in futures marlrets. Interest rate swings in bond 1.5 markets offset movements in!currency markets. 1.0 Figure 8 shows the patternof increasingvolatility which 0.5 has been introduced into curtency markets as the daily vol­ ume of trading reached towlU'd $1 trillion, from its level of o 1986 1990 1991 1986-87. Note how over the succession of intervals indicated are Sources: Futures Industries Association, Intemational Swap Dealers in the time line, there increasingly wilder swings from Association, Bank lor InternationalSettlements. peak to trough. The standard 15-20% fluctuations, in almost any six-month period, are sufficient to wipe out the profits of any company that is engagedin trading goods, unless that These funds are not only not real money, since they are company joins in the speculative binge to "protect" itself. stateless; they are also more or less criminal, the proceeds of Hedges, between and among currencies, and between curren­ capital flight, tax evasion, and of drug and weapons dealings, cies and interest bearing ins1lruments, are supposed to tame and so on. Since the difficulties of First National Bank of and conquer such volatility. Boston in the winter of 1991 , offshore liabilities, in the form Through such means, it i5 claimed by some that 77% of of deposits in foreign operations of U.S. banks, have been the after-tax profits of the 10 largest U.S. banks were, in covered by the Federal Deposit Insurance Corp. (FDIC). 1991, the result of those barks' currency-trading activities. The internal multiplier and the offshore black funds com­ Federal Reserve-supervised Citibank will confirm this trend bined to become a kind of monetary sorcerer's apprentice in the next days, when it artnounces its third quarter 1992 during the 1980s. Foreign exchange and bond trading (Fig­ results. Currency trading gains in August and September are ures 6 and 7), in significant portions, are organized through expected to help rebuild Citibank's balance sheets. Figures so-called off-balance-sheet liabilities. These really did not 9 and 10 show the volume 0[ "off-balance-sheet liabilities" exist before the middle of the 1980s. Now, there are about of the 13 largest U.S. bankS, and their "off-balance-sheet" $4 trillion of such transactions held off the balance sheets of exposure compared to their plaid-in capital . U.S. banks. The explosive growth of these off-balance-sheet Investment in the stock market, as Nicholas Brady never liabilities is similar to that of foreign currency trading. In tires of saying, represents more of a commitment than most

22 Political Economy EIR October 23, 1992 FIGURE 9 FIGURE 11 Off-balance-sheet activities of the largest Equity capital at U.S. comm.rcial banks, U.S. banks reported versus adjusted fat 100% reserves (billions $) (billions $) $0 200 400 600 800 1,000 1,200 1,400 1,600 Citlbank NA $250 BankersTrust 200 Morgan 1S0 \ Reported Equity Chase Manhattan 100 Bank ofAmerica SO Security Pacific First NB Chicago 0 Continental -50 Bank of New 'ttlrk -100 IIIOff-balance-sheet Republic NB -1S0 • On-balance-sheet First Interstate Bank -200 First NB Boston -2S0 Mellon Bank F=- ----.----.----.----.--...... - -.---..------. 1087 1088 1091 $0 200 400 600 800 1,000 1,200 1,400 1,600 1Q89 10PO 1092

Source: Weiss Research. Sources: Federal Deposit Insurance Corp., EIR. I

real economic crisis ravaging the worlld, it's criminal. ' Wait a minute. Wasn't that supposed to be one of the FIGURE 10 Off-balance-sheet activities of the largest lessons of the 1929 stock market crash? Weren't margin calls U.S. banks against uncovered positions supposed to be one of the causes (percentof total assets) of the crash? Weren't trades on margins banned in the after­ 0% 400% 800% 1,200% 1,600% math? The leverage, you see, work� both ways. Yes, the $2,000 margin leverages $100,000, hut a swing of 2% and BankersTrust First NB Chicago more which wipes out the margin, and produces a call for Chase Manhattan cash settlement, can also bring down the 98% of the transac­ Morgan Guaranty Continental tion which is unsecured. Cltlbank NA Then look again at what happened on Sept. 16, and in Security Pacific Republic NB subsequent days. Behind the daily coJjlvulsionsof the curren­ Bank ofAmerica cy markets, what happens to the hedging positions of the First Interstate Bank Bank of New Yo rk currency traders when a currency is temoved from trading, First NB Boston as was the Italian lira, or when exc�ange controls are im­ Mellon Bank F::..,.--,---r--.-----r--,---r--.----. posed, as they have been in Spain anti Ireland, and interest­ 0% 400% 800% 1,2000'"" 1,600% free deposits have to be placed beforelcertain currency trades Source: Weiss Research. can be made , or when overnight int�rest rates go to 500%, and then down to 40%, as was done in Sweden? other types of investment. You have to use money. One The hedging positions get knocked out. And, as that dollar buys $1 worth of stock, whether the market is up or happens, the off-balance-sheet liabilities, which are the core down on that particular day , whether the money is yours or of the $1 trillion per day currency markets, come unglued, borrowed. and the currency trading earnings of the banks disappears. The currency and bond markets don't work that way. Figure 11 shows the equity capital position of the U.S. banks For a little over $2,000, the bond market player leverages adjusted to write off losses sustained in all areas of their $100,000 worth of U.S. governmentdebt . In that market, 2¢ activities, and what the FDIC claims to be their equity capital. buys one dollar's worth of action. So the $300 billion traded The difference between the two at thtl end of the first quarter every day is the dollar volume leveraged by a mere $6 billion of 1992 was $500 billion of unaccoulnted losses, from dead or so. In the currency markets, it is different again. There , real estate loans, etc . Even without the collapse ofthe interna­ margins can be as thin as 0.5-1 %. So, half a cent to a cent tional speculative pyramid, the whole u.S. banking system buys $1 worth of action, and the whole $1 trillion of daily is dead. Such a chain reaction collap$e is now under way. It transactions is backed by a mere $5 to 10 billion each day. is the proverbial Belshazzar's Feast f�r the $320 billion daily And thus, central banks are hemorrhaging away their re­ currency volume of the City of London, sure not to survive serves, by the tens of billions, to fend off flows leveraged by in its present form . And also, for tbe bankrupt core of the mere billions of dollars. Insane , isn't it? And considering the U.S. financial system.

EIR October 23, 1992 Political Economy 23 recent weeks. The U.S. crowd is demanding that Germany, and by extension Japan, lower interest rates such that the U.S. commercial banks can borrow in those countries on the same terms that they do from the Federal Reserve, and re­ lend to the U.S. Treasury on the same terms. They are de­ manding that "Casino Fed" take over the world. Non-money: How This is what is going on behind the biggest suckers' game of recent years, namely the �e that is played out around the thedefic it is created question of cutting the burgeqning U.S. deficit. Who actually believes the heart-wrenching!tales that arecirculated by Ross Perot, Warren Rudman, Paul Tsongas, and others, to the by Chris White effect that we are stealing our grandchildren's money, and that the only way to stop it is to cut the federal deficit? It The federal government's debt has been transformed into the is indeed being ripped out of the hides of grandchildren, "house bank" of the worldwide speculative casino. Twenty­ grandparents, and all. Cuts and tax increases will make it all six times, Alan Greenspan, chairman of the Federal Reserve, much worse. has lowered interest rates over the last two years. The liars Four trillion dollars, the i total debt of the U.S. govern­ have it that the sequence of reductions has been intended to ment, is a lot of money. Compared to the flows of funds in reverse the deepening recession. Greenspan isn't one of those currency markets and bond markets on an annualized basis, liars. He's different. He says that the reductions have been it is quite small. Are cuts anj:l tax increases the only way to designed to rebuild balance sheets after the debt-bloated solve the problem? Not on your life. The cuts that are being years of the 1980s. discussed-one year' s budg�" to be completely cut out of the He and his pals in the Bush administrat\Qn and banks next five-areinsane . have created conditions in which the Federal Reserve will lend (and it only lends to banks and similar outfits) at 3%, What the deficit is ma«le of while permitting the banks to tum around and re-lend "the The people who want to cut the federal deficitshould be same funds to the U.S. Treasury at rates up to 7% and over. put on the spot about the real �roblems. If they don't want to The 4% difference is being taken out of the hides of u.s. deal with those, they should be told to shut up. There are two taxpayers . This is the swindle by means of which Greenspan, problems to consider: one fin�cial , the other economic. Brady, and company, respectable financial managers all, As we have seen, the federal deficitis actually helping to stacked the deck for the biggest speculative boom in human keep the bankrupt U.S. banking system afloat, and has been history. transformed into the house bllnk of the biggest floating crap Figures 1 and 2 show the course of interest rates in the game in human history; this via the relationship among the United States in recent years , and among the United States, Treasury, the Federal Reserve, and the so-called "market." Germany, Japan, and Britain. The so-called spread between Are the people who proposq to cut the federal deficit also German and U.S. rates is what all the fu ss has been about in proposing to bring that crap �ame to an end? If they are not,

FIGURE 1 FIGURE 2 Federal Reserve discount rate World interest rates (percent) (percent)

7.5% 16% 7.0% 14% 6.5% 12% 6.0% 5.5% 10% �""'�r-

5.0% 8% 4.5% ------6% ---- - _ _ _ 4.0% " ______,' Japan / ' 3.5% 4% 3.0% +--r-.,....-...... ,r--r-,.-r-r--,--,-.,....-�r--r-,.--.--r--r--r-,.....3"- 10190 1/91 4/91 7/91 10191 1/92 4/92 7/92

Source: EIR. Sources: Federal Reserve. EIR.

24 Political Economy EIR October 23, 1992 FIGURE 3 FIGURE 4 Total government credit market debt of Federal budget surplus or d,ficit federal, state, and local governments (billions $ per year) (trillions $) $50 IIIState and local � U.S. govemment

5 1947 1957 1967 1977 1987 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 Source: Federal Reserve. Source: Federal Reserve.

then what they are actually proposing, in the name of deficit again under George Bush. The recotd ought to tell us that reduction, is to transfer revenues larger than $200 billion there is something wrong with the method of reducing the per year, the present annual interest on the federal debt, to deficit by cutting the budget. participants in the crap game, and to cut essential government The increase of the deficit ought to tell us that the prob­ services, such as health, education, and defense, to do it. lem is an ecohomic dne. Revenues are not sufficient to cover They are also proposing to increase the deficitby increasing government expenditures. How to increase revenues? The the numbers of those thrown onto welfare and unemployment same people who want to cut the deficitinsist , "Raise taxes." rolls, among other things. The idiocy is that cuts reduce Seems obvious doesn't it? It is equally absurd. The one revenues by increasing unemployment, for example, and, at approach that would work has been automatically ruled out the same time, also increase expenditures, by increasing the of order: that is, create new employment, thereby increasing numbers of those in need of relief. Therefore , cuts increase the number of taxpayers-and the tax revenues will increase the deficit. This increases, as a consequence, the amount without raising taxes. the federal government has to borrow . It also increases the Why is the governmentunwillin g to create employment? interest paid on the federal debt. This makes all the talk One reason is that the federal government's debt is by no about "stealing from grandchildren" either the most cynical , means the entirety of the problem. Figure 5 shows the manipulative kind of demagogy, or the stupidest kind of Federal Reserve's figures for total credit market debt out­ ignorance. standing. The numbers include debt of government at all Remember Little Red Riding Hood? "What big teeth levels, debt of financial and non-financial businesses and you've got, Grandma." These swindlers have already eaten farms, debt of households, mortgage and consumer debt. Grandma, donned her clothes, and plan now to devour her Total debt outstanding has increased sevenfold since Nixon children and grandchildren. took the dollar off the gold standard in 1971, against a three­ and-a-half times increase in the debt;of government. If total Why not increase employment? debt has increased twice as fast as governmentde bt, it ought The charts show the growth of federal , state, and local to tell us that there's more involved than the matter of government debt over the entire post-World War II period government debts and deficits (Figure 5). Then compare (Figure 3), and the growth of the budget deficit over the those rates of increase with the increase of the debt of the same period (Figure 4) . You will see that where the federal financial sector, over the same period. This sector's debt debt is concerned, the first doubling took about 25 years, has increased more than tenfold since 1971, faster than the from 1946 to 1971, the second 9 years, the third 5 years, increase of the whole debt by almost 50%. The bankruptcy and in the 7 years since 1985, we have almost added a of the banks has pulled down the economy, which has, in fourth , from $2 trillion to $4 trillion. The same pattern shows its tum, bankrupted the federal gO"Frnment. This will not with the deficit. It might be added that any time one of the be reversed by further gutting of gqvernment revenues. recent administrations has adopted a program to reduce the Gross National Product is suppo,ed to be an indicator of deficit, the deficithas doubled shortly thereafter. It happened how the economy is functioning. Actually, it isn't. It is the with Reagan after 1981; it happened after the Gramm-Rud­ net of all "sales" transactions in the economy. It includes man ultimate budget cutting sequestration law; it happened transactions which, in a proper cost-accounting system,

EIR October 23, 1992 J!»olitical Economy 25 FIGURE 5 RGURE 6 . Total credit market debt, financial sector credit Yearly growth of credit market debt versus market debt, and total gross national product yearly growth of GNP (trillions $) (billions $ per year) 15 �------. $1,200 1,000 Debt growth__

14 800 600 400

- Total credit market debt 200 o�.. --.. �����---- _ Total gross national product GNP growth 12 -200�rn��rn�Tr��rn�Trrn�rn�TrnM� • __ • Financial sector credit market debt Sources: Federal Reserve, EIR.

FIGURE 7 1 0 Growth of debt versus growth of GNP, by decade (trillions $) 320% �GNP # 300% • Debt # # 280% # 8 # 260% Debt ll$ % # # 240% of GN� - # # 220% # 200% 180% ...... 160% 6 5AAoL-.l..14 0% 1950-59 1960-69 1970-79 1980-89

Sources: Federal Reserve, EIR.

would end up on the liability side of the balance sheets, as well as including transactions which represent assets . The 4 liability side includes transactions which encompass debt service, which is loot taken out of the economy by usurious means, especially if debt service is re-invested into more debt, or speculation, and nCl>t put back to productive use through physical capital imptovements. Figure 5 shows the 2 growth of the so-called GNP over the postwar period, and of course since 1971. Here we have a sixfold increase since that time. Less than the growth of financial sector debt, less than the growth of the total debt, more than the growth of government debt. Since approximately 1978 we've been adding $200-300 billion of debt, up to a record of $600 billion in 1986, for o every $100 billion of growth in the measure known as Gross 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 National Product (Figures 6 and 7). The rate of increase in Source: Federal Reserve. the debt began to slow after 1986, and began to collapse

26 Political Economy EIR October 23, 1992 precipitously after 1990. The collapse is what Greenspan Tonnage decreases refers to as "rebuilding balance sheets." The collapse in But even that comparison is misleading, because the the rate of growth of debt coincides with the expansion of dollar volume of world trade masks a real decline in the speculative activity in currency and bond markets. world's trade of physical goods. According to the annual Greenspan, Brady, and the banks have attempted to offset report Maritime Transport, by the Organization for Econom­ the decline in debt, by moving an ever greater portion of so­ ic Cooperation and Development (DECD), the total annual called financialassets into short-term activity, increasing the tonnage carried in the world's seaborne trade fell from a velocity of throughput of speculative funds to offset the high of 3.714 billion metric tons in 1979-the year the decline in absolute volume. Three-quarters of the $4 trillion Tokyo Round of the General Agi-eement on Tariffs and federal debt will mature during the next fiveyears . To retire, Trade (GATT) was implemented-to 3.090 billion metric or roll over $600 billion per year, while running deficits in tons in 1983, and did not surpass the 1979 level until 1989, the range of $400 billion, is to usher in the era of trillion when 3.877 billion metric tons of fre ight were carried on the dollar deficits, all in the name of "bringing the deficit under world's ships. control." Indications from the maritime industry now are that the To do this is to safeguard the claims of debt against every tonnage carried is again shrinking. The formation, in the other area of economic and human activity. Employment is middle of September, of a capacity-limiting agreement by cut for "cost containment," or to meet interest payments. shipping companies on the Europe�Asia trade lanes, leaves Investment is reduced. Research and development expendi­ the intra-Asian shipping lanes as the only maritime trade tures are eliminated. Education budgets are axed. All to routes where ship owners and operators have not attempted maintain this sacred cow of debt. That's why sanity is elimi­ to cut back capacity to raise freight rates in the face of nated in the discussion of the federal deficitin favor of casino declining traffic. Twelve carriers . on the North Atlantic, financing and the claims of debt. To permit sanity to enter which have suffered up to $400 mihion in losses in the past in, in the form of job-creating, revenue-enhancing, changes year, agreed in August to reduce shipping capacity by 20%. in policy, is to destroy the present casino swindle, and the On every other trade route-North America-South America, cancer of debt from which it grew . North America-Asia, North America-Africa, Europe-Afri­ ca, Europe-Asia, etc .-ship owners and operators have been forced up against the wall by a de¢line in demand for their services. That means that there is not as much freight being carried as there was before. It may be argued that seabornetrade reflects only part of total world trade, since significant overland movements of Wo rld trade declines freight, such as occurs in North America and Europe, are not covered. However, freight movements in Asia are over­ as speculators rushin whelmingly by water, and intra-Asian trade has been the fastest-growing area of world trade. What is missed in over­ land freight movements in North America and Europe is by Anthony K. Wikrent probably almost entirely made up for by the relatively dispro­ portionate use of seaborne trade in Asia. Most people assume that foreign exchange trading is largely The real collapse in actual movements of physical goods generated by foreign trade-imports and exports of actual around the world is made even dearer by converting the goods and services. They're wrong. OECD's figures into tonnage carried per capita of world According to the most recent estimates, cited by U.S. population (see figure). By this measure, world seaborne Treasury Secretary Nicholas Brady at the annual meeting of trade collapsed absolutely throughout the 1980s, as GATT the International Monetary Fund (IMF) in late September, "liberalized" world trade, and the U.S. Federal Reserve currency trading around the world has reached the unbeliev­ under Paul Vo1cker implemented .a "controlled disintegra­ able sum of $1 trillion every day, or around $300 trillion a tion" of the world economy. In fact, the per capita volume year. of world trade has never recovered to the levels of the mid- By comparison, the dollar value of the world's total for­ 1970s, and in fact continues to stagnate at levels around 12% eign trade in goods and services in 1990 was, according below what it was before 1979. the the IMF's "Direction of Trade Statistics," $6.55 trillion. That's the sum of both imports and exports for every country Air cargo down in the world. In other words, the total amount of foreign A major reason airlines have sUffered huge losses in the exchange trading is now about 45 times larger than the value past two years , is that air cargo is declining also. Airlines of actual foreign trade. typically derive most of their profit from carrying cargo,

EIR October 23, 1992 Political Economy 27 World seaborne total trade volume (metric tons per capita of world population) 0.90 LaRouche: 'trhere's I 0.85 no recovery,! anywhere'

0.80 Independent presidential candidate Lyndon H. LaRouche made the fo llowing comments .in a campaign statement on 0.75 Aug. 5, 1992 , released at the National Press Club on the occasion of the announcemen� of the Rev. Jim Bevel as 0.70 LaRouche's vice-presidential running mate: It is an understatement to say that what is happening presently and what has been in �rocess since 1987-0ctober 0.65 1987, to put a specificdate to it+has been the worst econom­ ic depression worldwide in the 20th century. 0.60 l- +--,---.---.-----,r-,I ---.-,---,---.---.-1 ----,--r--r---r--,I People talk about recovery� There is no recovery. It is 1975 1980 1985 1990 occurring no place. What there bas been and is, is a resistance to this depression in westerncO$tinental Europe and in Japan Sources: GECD, Maritime Tra nsport 1989, 1990, 1991; U.S. Department of Commerce, StatisticalAbstract of the United States. and in a few other spots in Asia; such that these countries are collapsing at a much slower rll!le so far than have been the English-speaking countries whiCh have been leading the col­ lapse outside of the former Soviet empire .. .. since most of the costs of a flight are incurred in carrying There's no solution to thesd problems unless one speaks passengers. Air freight is used to move very high-value car­ of a high-tech industrial recoverybased on large-scale invest­ go. Apple Computer, Inc., for example, moves 20% of its ment in infrastructure. We're talking about $600 billion to inventory by air freight. But, from a record 10.275 billion $1 trillion a year, not of debt, but of credit issued through ton-miles in 1990, the amount of freight carried by U.S. the mechanisms of Section 8, Article I of the U.S. federal airlines in 1991 declined to 10.204 billion ton-miles-and Constitution, to state and federal authorities, and to vendors that's at the same time that U.S. airlines have expanded to those state and federal authorities, for large-scale water rapidly overseas. projects, for large-scale transnortation projects, for large­ scale energy projects, for improvements of our medical sys­ The capital goods sector tem and facilities, for improvements of our school facilities, This atrophy of world trade is all the more remarkable, and in addition to that, large-scale credit for vital sections of considering the enormous amounts of capital goods the de­ industry, to push ahead with ne\}'technologies and to diversi­ veloping-sector countries need to help them build the electri­ fy their industry, such as the auto and aerospace complex, in cal generating and transmission systems, water management order to save what the United St�tes is losing most essentially systems, sanitation systems, transport systems, and industri­ in the tool-making industry. al base they so desperately need . We no longer have the ability, or are rapidly losing the Examine, for example, U.S. exports of capital goods. last vestige of the ability, to produce new technology. We The United States exported nearly 30,000 farm tractors a will be importing technology if we can get it, if we can afford year in the 1970s, with 38,092 recorded in 1977. By 1983, it, from Europe and from Japaq, and even from some Third the number of farm tractors exported had fallen to 10,609; World countries, at the present tate. by 1987, it had fallen by half again, to 5,731. Meanwhile, exports of crawler construction tractors-bulldozers-fell From an Aug. 12 statement: from 6,902 in 1979, to 3,111 in 1982, to 1,913 in 1986. In We are now, this month, in a new downturnof an ongoing 1990, only 1,660 crawler tractors were exported from the worldwide economic depression, which has been in progress United States. since the October 1987 stock marketcrash . While the stock For most of the 1970s, the United States exported 500 prices on the New York Stock Exchange still tend to go up to 700 rail locomotives a year. In 1981, the u.S. exported or float at a fairly high level above the so-called 3200 Dow only 195 locomotives. After struggling back up to 504 loco­ Jones Index level, the fact is that U.S. financial instruments motives exported in 1986, the number collapsed again, to are worth less and less every !day-and because also the 106 in 1988. depression is spreading through; every part of the world.

28 Political Economy EIR October 23, 1992 Lyndon LaRouche and his wife Helga Zepp-LaRouche tour the Goddard Space Center in Maryland, in 198/ . "We are rapidly losing the ability to produce new technology . We will be importing technology , ifwe can get it, if we can affo rd it, from Europe andfrom Japan , and ' even fr om some Third World countries, at the present rate."

From a Sept. 17 statement "On the Breakup of the Currency who propose to increase taxes and cut budgets are dangerous Blocs" : lunatics whose proposals, if implemented, will drive us into On Sept. 16, 1992, sixty-one years after the opening of who knows what-a pit of despair. .. the Great Depression in 1931, nearly to the day, the British government once again plunged the world officially into a From an Oct. 7 campaign statement, "The Fed and Banks catastrophic global economic depresion. Simply said, what Swindle" : happened was, it became impossible to continue to defend Unlike George Bush, Clinton, and Perot, I intend to re­ the inflated value of the British pound even until the 20th of form the Federal Reserve System, to bring it back into con for­ September, when the Maastricht European monetary agree­ mi�y with Article [ of the Constitution. ments were scheduled to be voted up or down in France. What is happening today, for those who think the Federal Every effort, every resource available, or politically avail­ Reserve System is a model of competence, is the following. able, was used to try to pull these currencies of Europe into Major banks, many of which [ believe to be bankrupt, and their existing Exchange Rate Mechanism system. Resources to have been virtually bankrupt for a year or so, and other did not exist; it could not be done. It failed. We are now financial institutions which are either bankrupt or on the officially in a new world depression, as we were through verge of it, in point of fact, are borrowing large sums of the British floating of sterling in September 1931, sixty-one money from the Federal Reserve System on short term, at a years ago .. .. 3% interest rate. They are taking this money, turning around And so far, most of the governments of the world, and and loaning it to the fe deral government in the form of long most of the political parties, including the leading political bond U.S. debt, at 8% or higher. Thus, they are getting 5% forces in the United States, are still making the same kind of on Federal Reserve money, for which they did not pay, out silly mistakes which were made 61 years ago, which plunged of your government and out of your tax dollar and off the us into the depths of a depression then, and will assuredly do backs of your grandchildren, if things go on this way. so now, unless those policies are changed .... I propose to bring that swindle I just described to a What we must do is to put aside every lunatic who pro­ screeching halt. And I dare any of my competitors-Bush, poses that the solution for this situation is austerity. Those Clinton, or Perot-to say that they are willing to do the same.

EIR October 23, 1992 Political Economy 29 Crack-up of dollar era institutions, June-October 1992

Event What they said

June 2: Danes vote down Maastricht Treaty for fi­ nancially unified Europe. July 6-8: Group of Seven heads of state official communique June 1-30: Scandinavian crisis mounts: Finland agrees "to support the upturn without rekindling inflation .... rocked by capital flight. Taxpayers' money should be used more economically and more effectively.. .. Each of us faces somewhat different economic July Italian financial crisis: Government unable 6-31 : situations. . .. But we should all gain greatly from stronger, to place its treasury bills; huge capital flight; Italian sustainable, noninflationary growth." central bank has spent 27.5 trillion liras in 10 months trying to stanch flow; government imposes austerity July 23: Federal Reserve chairman Alan Greenspan called for policy. "rebuilding balance sheets" for U.S. banks, by using interest rate reductions in combination with lowered reserve requirements, . July 16: German Bundesbank increases interest to enable banks to borrow at low rates, take on government debt rates. at high returns, and gain the difference. July 20: World stock market values plunge-down July 23: U.S. Treasury Secretary Nicholas Brady declares "eco­ 7% in Italy and Sweden; down 4% in Japan; 3% in nomic recovery" is continuing. "While second quarter growth Germany and France; 2% in Britain. may slow slightly, it will be positive and consistent with a sus- July 20: Federal Reservechairman Alan Greenspan tained recovery .... Inflation is still under control and interest cuts U.S. interest rates for the 23rd time in two and a rates are down ....The economy will continue to improve this half years. year."

July 31 : U.S. unemployment crisis: 22.4 million un­ July 30 : Secretary Brady: "What makes me optimistic about the employed or underemployed. Business failures hit re­ rest of this year is a lifetime in business. You cannot have interest cord rate, numbering 50,582 in first six months. One rates at the lowest level in 20 years, inflation down, productivity million on welfare in New York City alone-one in up, production costs in this country very, very favorable with seven people. State budget crises hit; California is­ regard to the rest of the world, and not have economic activity. sues over $1 billion in scrip. Commerce Department . . . One of the most honest barometers is the stock market, figures say "growth rate" dropped to 1.4%. because people have to pay to vote."

Aug. 10: Dollar plunges in value. Federal Reserve intervenes five times, along with Bank of Canada.

Aug. 11: World stock market values plunge. Dollar again falls. London FTSE falls to 2,325-lowest since Persian Gulf war. Frankfurt exchange falls to lowest since February. Oslo hits a low. Milan hits a low. Japan Nikkei average falls below the critical 15,000 level to Aug. 14: Ross Perot calls for economic austerity. "Let's put the 14,822, lowest since 1986. pain in there. There's got to be shared pain because we have Aug. 13: Italy's credit rating downgraded by Moody's so overspent our capacity." Investor Service.

Aug. 15-31 : Scandinavian financial crisis: Sweden hit Aug. George Bush f�atures "economic program" in his presi­ by capital flight of 9.976 billion kroner ($2 billion) week 20: dential nomination acceptance speech at the GOP convention. of Aug. 20; Denmark's second largest insurance com­ pany, Hafnia, announces bankruptcy (Aug. 20;) Nor­ Aug. 27: British Chancellor of the Exchequer Norman Lamont way's largest insurance company, UniStorBrand, fails makes pre-dawn speech on steps of London's Treasury Build­ (Aug. 24;) Denmark's second largest bank, Unibank, ing, saying there should "not be a scintilla of doubt" that Britain discloses huge loss of 4 billion DKroner, and chairman will back the pound, so speculators had best not speculate resigns (Aug 20). against the British currency.

Aug. 18: Tokyo's Nikkei average falls another 620 Aug. 28: Financial officials of the European Monetary System points to 14,309. Japanese Finance Ministry an­ meet in London and announce defense of Exchange Rate Mech­ nounces a 10.7 trillion yen economic stimulus pack­ anism. age (Aug. 28). Aug. 31 : White House spokesman Marlin Fitzwater: "The United Aug. 24-25: Dollar in free fall. Hits record low of States is not seeking a decline in the dollar and does not believe 1.3990 to the deutschemark, below postwar low of that a lower dollar is necessary for its export competitiveness. 1.443. Repeated interventions by Federal Reserve ... German interest rates are at traditionally very high levels, and central ·banks. British pound and stock values while the United States has reduced its interest rates to the plunge worldwide. lowest levels in roughly 25 years."

30 Political Economy EIR October 23, 1992 Event

Sept. 1 : Dollar sinks to DM 1.3977 in Frankfurt.Stock Sept. 16-17: European Community Monetary Committee meets values fall worldwide. at midnight in Brussels; after six hours, releases communique: "Member states of the EC have taken note of" the U.K. suspen­ Sept. 1-17: Lira falls through floor of European Ex­ change Rate Mechanism (ERM). Government deval­ sion of the pound and the Italian abstention from intervening in ues the lira by 7% on Sept. 13, first ERM realignment foreign exchange markets. "They �II stress their unanimous since 1990. commitment to the European Monetary System as a key factor of economic stability and prosperity In Europe." Sept. 1-20: Riksbank of Sweden hikes overnight inter­ Sept. 17: Italian Prime Minister Giuliano Amato on new budget: est rate to 500% on Sept. 16. Norwegian Investa "The government's life depends on tl)isbudget. On it hangs the declares bankruptcy, causing shares of Den Norske recovery of credibility of our currencYwhich I expect in the next and Christiana Bank to plunge by 32%. few days."

Sept. 14: German Bundesbank lowers lombard Sept. 18: U.K. Chancellor of the Exlchequer Norman lamont: emergency funding rate by 0.25%, cuts discount rate "We want to be satisfied that German policy, which has produced by 0.50%. many of the tensions within the ERM, is actually going to have some changes and be able to operate within a more stable Sept. 16: Pound falls through ERM floor. Britain an­ environment. " nounces two-stage rise in interest rates from 10-15%; then suspends the pound from the ERM, and cuts Sept. 18: German Chancellor Helmut Kohl to lamont: "Such a interest rate to 12%. Cuts rate again by 1 % Sept. 22. remark is inappropriate for a minist�r."

Sept. 16: Italian lira and Spanish peseta fall through Sept. 18: U.S. Deputy Treasury Seqretary David Mulford: "We ERM floors. Lira suspended from ERM; peseta deval­ have for a long time taken the view t�at it would be desirable for ued by 5%. Germany to reduce rates." , Sept. 19: Group of Seven ministe and central bank heads Sept. 17: Fierce austerity budget slapped on Italy of � meet in Washington, D.C., and release communique: "The min­ 93 trillion liras ($75 billion) in budget cuts and tax isters and governors reaffirm the Cl:>mmitment made by their levies. heads of state and government at the Munich summit to Sept. 20: French voters approve Maastricht Treaty by strengthen world growth without rekil'ldling inflation. Since then, 51% to 49%, no real mandate. measures to reinforce economic rEtcovery have been taken, including interest rate reductions in Ii number of countries .... Sept. 20-30: Fierce budget cuts announced for Swe­ These measures will strengthen the, global economic recovery den (Sept. 20). Swedish Riksbank drops key lending and foster greater stability of exchange markets .... [We) will rate from 500% to 50% (Sept. 21 .) Capital flight out take appropriate additional actions .s needed to achieve sus­ of Sweden hits Skr 15.1 billion (about $3billi on) Sept. tained growth and greater currency istability." 25-30. Sept. 20: Swedish Social Democratic leader Ingvar Carlsson, Sept. 22-23: Run on French franc; other currencies in support of Prime Minister Carl aildt's austerity budget: "I fall. Huge central bank support expenditures during regret this. But Sweden is in the wor!!t economic crisis for many month of September: Bundesbank spends 92 billion decades." marks ($65 billion); Bank of England, $7.7 billion; I Sept. European finance ministe� meet in BrusselS on shat­ Bank of France, 80 billion francs; Bank of Canada, 28: tered ERM, defend it as "a key factor for economic stability and Can. $4.5 billion. prosperity in Europe." Sept. 29� Dollar hits record low of 119.25 yen.

Oct. 2: Spanish Finance Minister QirlosSolcha ga: "The ERM is almost absolutely broken. Interest rates are so high that they cannot last for long without creating real problems for economic Oct. 5: "Black Monday." World markets plunge. lon­ recovery." ! don FTSE index falls 4.1 %, or 103 points, lowest since Oct. 5: U.K. Prime Minister John Major: "These things happen 1987 crash, wiping out 20 billion pounds from British from time to time .... I don't thin� people should get unduly shares. Massive wipeout of values-3-4% drop in panicked about it." i Paris, Frankfurt, Tokyo, Spain, Zurich, Milan, Vienna, Stockholm. Oct. 15: U.S. President George Bush said that Helmut Kohl and John Major told him "there is sometHing going on worldwide, not only in the ugliness of politics, but in terms of the economy."

EIR October 23, 1992 political Economy 31 Fr om worker to yuppie: What happened to America's labor force? by Laurence Hecht

The effect of the long-term decline of the dollar system on under advice from Henry Kissinger and the London and Wall the U.S. economy is nowhere more evident than in the col­ Street interests allied with Kissinger's piggybank David lapse of the standards of living of working people, and the Rockefeller, an orgy of specul�tion, which came to be known growth of a large population of permanently or chronically in banking circles as "creative financing," was unleashed. unemployed. What Reaganomics meant �n practice was the elimination The collapse of real wages (that is, the real buying power of every regulative barrier ,against financial speculation of the weekly paycheck) has been scandalous. When mea­ which had been legislated in \he wake of the last Great De­ sured in terms of the buying power of the dollar in constant pression. Virtually every one of the "built-in stabilizers" 1957-59 dollars, we see a long-term decline in the gross which economics texts of the postwar period had taught weekly earnings of nonsupervisory workers, dating from would protect us against anotHer depression were eliminated about 1972, to below 1959 levels (Figure 1). From the pros­ or made dysfunctional. What followed was a wave of specu­ perous years of the 1960s and 1970s, when the weekly gross lation in real estate, in junk bondsand margin purchasing, in wage reached over $90 in 1957-59 values, the gross wage off-balance-sheet liabilities aod offshore boondoggles, and declined steadily. Its peak was $93.59 in 1972. From there in every conceivable form of financial instrument and sec­ it fell to $86.95 in 1975, recovered slightly in 1978 to $89.27, ondary and tertiary markets. and then began a steady descent to present levels. In 1991 The resulting financial bqom carried the Dow Jones to we went below the 1959 level of $77 . 62. new highs, and even created la new sociological class, the To pin the collapse on one party or another, as the elector­ "yuppie" ("yumpie," "guppie," or "grumpie"), the greedy, ate is presently being encouraged to do, is only an exercise upwardly mobile, middle-cla�s professional, whose desire in childishness. The problem has been the policy outlook of for a new BMW with quad sound, outweighed morality or post-industrial society adhered to by every administration, other trivial concerns such as the well-being of his fellow Democratic or Republican, since John F. Kennedy. man. But not all yuppies were 'young. Yuppie morality came Today's depression had its roots in Lyndon Johnson's to dominate political and economic decisionmaking at all Great Society progam, with its phaseout of the space pro­ levels. gram, the high-technology science driver of the 1960s indus­ While the yuppie, with his concernfor the environment, trial boom, on the pretext of helping the poor. It continued at least his own, became the "rbality"of the marketplace, the with the Phase I, II, and III austerity policies of the Nixon industrial worker was fast becoming an endangered species. administration, which lacked even pretext. It accelerated Over 1 million industrial jobs disappeared just in the course with the high-interest rate policy of Jimmy Carter's Federal of the 1970s, while the labor force grew by over 20 million. Reserve Chairman Paul A. Volcker, who defended the Coun­ cil on Foreign Relations' Project 1980s proposal for the "con­ Assault on the unions, science trolled disintegration" of American industry. Under Carter, The aggravated assault on the trade unions, symbolized the industrial economy collapsed, while the narcodollar re­ by Reagan's crushing of the, air traffic controllers union, placed the Eurodollar and petrodollar as the leading force in PATCO, in 1982, meant the e�d of any organized resistance world financial markets. to the deindustrialization and apsterity policies from the orga­ By 1982, what remained of American industry was in nized labor movement. Not that the Trilateral Commission's collapse and the entire financialsystem in a state of bankrupt­ Lane Kirkland, at the helm ofthe AFL-CIO, had made much cy. Though Reagan at that crucial juncture looked briefly at of an attempt to rally even his ,own union members in a fight the proposal for international financial reorganization and against the policy which was destroying their livelihoods as industrial recovery, put forward in Lyndon LaRouche's Op­ well as the rest of America's. \.Inion membership, which had eration Juarez proposal, saner heads did not prevail. Instead, fallen from 28.4% of the work force in 1965 to 21.9% in

32 Political Economy EIR October 23, 1992 1980, collapsed to 16.4% in 1989. The steady erosion of real wages went with it. Many people were thinking like yuppies, FIGURE 1 but few were living like them. What had gone wrong? Average weekly earnings of iproduction or The way had been paved for an open assault on scientific non-supervisory workers o� non-agricultural progress, industrial society, and modem industry itself, by payrolls the institution of the Environmental Protection Agency in (constant $) 1969 and the passage of the Clean Air Act of 1970. Rather $95 than promote the modernization of America's aging industri­ al base, which had always led to the introduction of cleaner 90 Gross2 and more efficient production methods, science-and its / 85 t• fruits, modem industrial technology-became the enemy. • 0 • ... . . 0. 80 . . The new laws put some industrial concerns into bankruptcy, ...... �...... and forced the channeling of investment capital and engi­ • 75 • 00 neering know-how into cleverer smokestacks and combus­ . . /0 . o ! ... • tion systems. 70 •• • 1 • • Spendable .. Meanwhile, through well-publicized scare scenarios, and • 65 .0 . an insidious infiltration of malthusian ideology into the o· school systems, the American people were organized into a 60 "green" mob . As the Jacobin leader had said on leading o=f:I I 1 1 I I I I I I I I I I I I I iii i I � I I I I r I , I r I I I r I I 1 France's great scientist Antoine Lavoisier to the guillotine 1951 1956 1961 1966 1971 1976 1981 1986 1991 under the Reign of Terror, "The revolution has no need for In 1958 dollars, for worker with three depend�nts (series ends 1980). science. " 1 ' 21n 1957-59 dollars, adjustedfor overtime. In 1972, Environmental Protection Agency Administra­ Sources: U.S. Department of Labor, Bureau of l.abor Statistics, computer tor William Ruckelshaus banned DDT, after seven months data; Economic Report of the PreSident, 1968, �able B-32, Ta ble B-45; Ibid. , ' of hearings had been unable to establish even one iota of 1992, Ta ble B-42. scientific evidence against the lifesaving pesticide. "DDT is not carcinogenic, mutagenic, or teratogenic to man [and] these uses of DDT do not have a deleterious effect on fish, the dwindling popUlation growth rate-which fell below birds, wildlife, or estuarine organisms," the EPA hearing breakeven in the 1980s--couldnot keep pace with the legis­ examiner concluded. But Ruckelshaus overruled the recom­ lated decline in car size. And no one could figureout how to mendation of his hearing examiner to not ban the chemical, squeeze a family of five into one of the new cars and still announcing unabashedly that his decision was made for "po­ keep the marriage intact on a long trip. So the family car or litical reasons." Thus began the pattern of administrative station wagon became a "passenger van." Since the prolifera­ decisions on environmental policy made on the basis of pub­ tion of this new type of vehicle had not been contemplated lic perception-itself carefully manipulated by the anti-sci­ by the legislators, it was exempt from certain of the perfor­ ence mob in foundations and media-not scientificeviden ce. mance-and safety-requirements earlier imposed. From asbestos to alar, the environmental hoaxes proliferated, each one targeting a particular branch of U.S. industry or Energy utilities in the cross-hairs agriculture. The assault on the utilities was more blunt. For the coal­ There followed the great oil hoax of 1973. The alleged burning plants there was the never-proven threat of "acid threat of shortage of fossil fuels became the watchword for rain," allegedly converting the lakes of the Adirondacks and the assault on the automobile and utility industries. The 1975 New England region into funeral homes for the fish and Energy Policy and Conservation Act attempted to rewrite aquatic life. Though the high acidity in many lakes was the laws of physics itself. Overturning decades of sound shown to be due to peat bog soil, beaver dams, and local transportation engineering which had measured vehicle per­ sources, the cure, which should be comprehensible to any formance in ton-miles per gallon, the energy misers man­ high school chemistry student, is application of lime or other dated a drastic improvement in average fleetperformance for alkaline agents. At a few dollars a sack, the method is effec­ each automaker, to be measured only in miles per gallon. tive and economical. Instead, expensivescrubbers and other To meet the legal requirement, Detroit downsized and pollution control devices became required equipment on turned out a vehicle which year by year became flimsier,less coal-burningplants and factories as well. Many steel produc­ durable, and more deadly to its occupants in a crash situation ers responded in Darwinian fashion: They went belly up. than comparable large cars. The proportion of large cars To the extent that coal burning! is unpleasant, environ­ declined. To meet the fleet average performance standards, mentally sound solutions were available. In the early 1970s, the manufacturers had to sell more smaller autos . But even the U.S.A. had a lead in two technologies that were relevant

ElK October 23 , 1992 Political Economy 33 mercial Demonstration Plant, delivering power to a utility system, was planned for 1989. Electric utilities could then start to order MHD power plants. Just as momentum was building, the Carter administraf on's firstsecretary of energy, James Schlesinger, in one of his first acts, removed Dr. Jack­ son as manager. Review followed review, and the program stalled out, never to be revived at a viable level of funding. Japan now leads the world in a bold approach to MHD appli­ cations, with development of an MHD-powered ship well under way. The nuclear industry was the next target. In 1979, a non­ life-threatening mishap at the Three Mile Island nuclear gen­ erating station south of Harrisburg , Pennsylvania, was turned into a World War III scare story by the obliging media. Headlines proclaiming the release of "radioactive gas clouds" proliferated. Local populations were evacuated. Analysis showed that exposure to the minute amounts of radioactive material released through the plant's smokestack would be significantly less than the dose from one chest X-ray, for a hypothetical person standing outside, 24 hours a day, in the restricted area immediately around the plant, for the entire duration of the incident. Diffusion through the air would make the exposure for a nearb� resident immeasurable. An independent blue-ribbon panel of physicists, nuclear engi­ neers, and safety experts which formed to investigate the In 1980, author Laurence Hecht (right) conducted a series of interviews with homeless men in New York City's Bowery district. mishap found a high likelihood of premeditated sabotage to "Even the average Bowery bum knew that Volcker's policies were be a probable cause. going to put everybody on Skid Row," he said. Very few Americans heard of these results. But the U.S. nuclear industry was dead. With it, the most immediately to the problem. Magnetohydrodynamics, or MHD, is a available source of clean, abundant, and cheap energy to means of extracting electricity from coal, among other power an industrial recovery was also killed. France, Japan, sources, at twice the efficiency of the old-fashioned method and other nations' where more rational policies prevailed took of boiling water to produce steam . The coal is fully combust­ the lead in nuclear power development away from the country ed at high temperature, and the electrical energy is extracted which had developed the peaceful application of atomic ener­ directly from the ionized gas. The technology was a spinoff gy out of a wartime crash project. of research on thermonuclear devices in the postwar period. In 1966 A vco Everett Research Laboratory and American Industrial worker, an endangered species Electric Power Services Corp. raised $13 million to begin Downsized, greenwashed, and, in many cases, impover­ construction of a 14 megawatt (MW) pilot plant. But the ished, America's formerly industrial work force swallowed Johnson administration Department of the Interior failed to the bitter pill of deindustrialization and sought jobs else­ come through with an additional $10 million, and the project where. collapsed. Some found work in the newly growing "service-produc­ After the 1973 oil embargo, government attention turned ing sector," as the Labor Department's oxymoron categorizes again to MHD. In 1974 , President Gerald Ford signed into that portion of the labor force which sane national accounting law a bill introduced by Sen. Mike Mansfieldof Montana to includes in the category of overhead costs. From 1961 to begin plans for an MHD Engineering Test Facility . A June 1989, the goods-producing portion of the non-farm work 1975 report of the federal Officeof Coal Research called for a force declined from 36.8% to 23.4% of the total civilian commercial demonstration in an Engineering Demonstration labor force. Over the same time period, the service sector Plant to be connected to a utility grid by 1985. Under the increased from 63.2% to 76.6%. The goods-producing sec­ leadership of Dr. William Jackson, the Energy Research and tor, as tallied by the U.S. Department of Labor, includes Development Agency (ERDA), planned a development facil­ jobs in manufacturing, mining, and construction. The service ity for testing key components, which was to be on line in sector includes: transportation and public utilities; wholesale Butte, Montana, by 1978. A 250 MW thermal Engineering trade; retail trade; finance, insurance, and real estate; servic­ Test Facility was planned for 1982, and a 1,000 MW Com- es; and government.

34 Political Economy EIR October 23, 1992 Another way of looking at it is to think of the work force forced into part-time work in September, according to the in the goods-producing industries, plus the fannpopulati on, Labor Department surveys. This tot�l never fell below 21 as those who produce the food, clothing, shelter, and other million in all of 1991. tangible wealth that keeps people alive and allows families How does the government fail to, count as unemployed to grow. Counting in the agricultural work force, the division over 6 million people who show up in surveys saying that between goods production and services comes to about 25% they "want a job now"? This is nothing new. It has been production to 75% services for 1989. So, discounting im­ going on since 1970, though the number has been steadily ports , only one-quarter of the population is producing the increasing. To qualify as unemployed, a respondent in the tangible goods which they and all the rest consume. Twenty sample group of 57,000 surveyed each month must mention years earlier, in 1968, it was about 35% production to 65% a specific efforthe or she made to find a job in the last four services. weeks. (Prompting by the survey takbr is explicitly forbid­ If we look at the manufacturing sector, the picture is den. And you do not get to speak fot yourself-the survey worse. In 1968, the manufacturing work force was about taker gets the information from whoever in your household 19.1 % of the total. By 1989 it had slipped to only 11.3%. happens to be home at the time.) The cause was rarely modernizationof the factories and intro­ That's the outright fraudulent part of the government's duction of new labor-saving technologies. In most cases, the statistics. Other factors mask the severity of the situation. factories just shut down. Over the two decades, 1.2 million The largest hidden factor in both the unemployment and wage manufacturing jobs disappeared, though the American popu­ statistics is the size of the labor force. As a percentage of the lation had grown by almost 50 million. The only portion of total working age population, the labor force is larger now the goods-producing work force which grew over the period than at any time in history. About two-thirds of the total was construction, which increased by 1.2 million workers. population is included in the total civilian labor force. The However, the greater portion of these workers were not build­ unemployment rate is calculated as a 'percentage of the total ing homes or factories, but office buildings and commercial civilian labor force, so if the total is larger, the percentage of space to house more service workers--orto build up the huge unemployed appears smaller. glut in unrented office space that we find in our large cities and suburban shopping centers today. 'Latchkey' families The huge size of the civilian labor force reflects a number Statistics and 'politics' of things. The decline in real wages over the past two decades But not everyone found a new job , or kept it. While has meant that very few families can support themselves this change in the nature of the American work force from adequately with only one person working. The number of producer to servicer was going on, a few economists and working wives has increased steadily since the 1950s, and statisticians in government offices were finding new ways to especially markedly in the past two decades. In part, this hide the decline from public view. It might seem as if it masks the decline in real wages since the 1972 highpoint, would be difficult to hide from a person the fact that he since the two incomes may add up to more than a family was doesn't have a job, or can't support his family properly. If making when only the husband was working. Or it may not. you think so, you obviously don't understand "politics." Though income may be higher, the need for both parents "Politics" works like this: A voter is hit by a car. Bleeding to work puts obvious strains on the family. A growing num­ and in pain from broken bones, the voter drags himself home ber of people have to work two jobs to make ends meet, if and into his favorite easy chair, where he is able, with great they can findthem . Some of the peopl� losing jobs are people pain and exertion, to reach the remote control tuner for the with second jobs. This can create a situation where statistics television set. After a few of his favorite late-afternoon show more jobs being lost, but not more unemployment. shows, it comes time for the news. Upon seeing the tragic Families are also breaking up at a rapid rate . Therefore, there report of his accident presented by his favorite anchor man, are mote single-person households than ever before. the voter concludes that it is time to call an ambulance. All these elements increase the size of the total civilian In September, the official unemployment figure reached labor force and mask the problem. More people are working, 9.5 million, which is a lot of people. But over 6 million more but at what? Are their jobs producing more wealth for the people were out of work, hoping to find a job. And the nation? The steadily declining buying power of their wages governmentknew it. The Bureau of Labor Statistics findsout does not suggest it, nor does the state of most of our cities this number four times a year from household surveys, and and towns, our roads and bridges, or our disappearing factor­ reports it in the monthly statistical report, Employment and ies and fanns. So, we have tolerated a wrongheaded policy Earnings. Another 6.3 million people had only part-time of de-industrialization for most of the past two decades. What jobs, because they couldn't find full-time ones, or because do we do now? The answer is surprisingly simple. There are their full-time positions were reduced to part-time. Altogeth­ only two ways to go after de-industrialization. Either you re­ er there were over 22 million people either out of work or industrialize, or you collapse.

EIR October 23 , 1992 Political Economy 35 ITillFeature

Argentine patriots meet to 'rebuild the nation'

by Cynthia R. Rush

In the midst of an extraordinary national and internationalcris is, over 2 ,000nation­ alists from Argentina and from several Ibero-American countries gathered in Bue­ nos Aires on Oct. 3 to found a new movement, the Movement for National Identity and Ibero-American Integration (Mineii). The principles of the Mineii, which ex­ plicitly condemn "usury and the manipulations of high internationalfinance which enslaves people," stand in stark contrast to the free market policies imposed on Argentina by President Carlos Menem at the behest of the internationalbankers . From the bankers' standpoint, the new movement poses a real danger. Its found­ ing was inspired by Col. Mohamed Alf Seineldfn, the nationalist Army officerjailed by Menem because he is a rallying point of opposition to Anglo-American policies in both the economic and military spheres. Seineldfn was named the "sole com­ mander" of the Mineii, and his fellow political prisoner, Capt. Gustavo Breide Obeid, the secretary general . Military and civilian patriots attended the meeting from almost all of Argenti­ na's provinces, as well as from Colombia, Ecuador, Venezuela, the Dominican Republic, Chile, and Peru. Moreover, the audience joyfully applauded the messag­ es of support sent to the event from 90 patriots representing25 countries, including independent presidential candidate Lyndon LaRouche from the United States, and his wife Helga Zepp-LaRouche, president of the Schiller Institute in Germany. As both Seineldfn and Breide emphasized in the messages sent to the event from the Magdalena prison where they are jailed, the Mineii is a political movement, not a party. Addressing the phenomenon visible throughout Ibero-America, in which populations have rejected corrupt"party-ocrac ies." both men proposed to rebuild the nation by recreating the "National Movement," as Seineldfn put it, "at a time of real and anguished crisis and confusion." The Movement for National Identity "must be for the nation, what the soul is to man," Seineldfn underscored. "Without it, the body, materialized as political action, cannot maintain itself or live." Al­ though this movement has been battered by treason and intrigue in recent years , he

36 Feature EIR October 23, 1992 A view of the hall in Buenos Aires where over 2,000 Argentine patriots gathered tofo und the Movementfo r National Identity and Ibero­ American Integration on Oct. 3.

said, "it is latent" and can be rebuilt. Mineii's opponents nervous . That task is premised on attack,ing what Pope John Paul When asked about the new movement, President Menem II has called "the structures of sin," the twin evils of economic immediately dismissed it as unimportant, claiming that it had liberalism and Marxist materialism, and seeking integration "no chance of success." Others were not as confident. "with the brother nations of Ibero-America and of the world." Mariano Grondona, a prominent Argentine journalist As Breide emphasized, "hedonist capitalism" as well as who is a close friend of former U . S. Secretary of State Henry Marxism are "the two modalities of the same subversion of Kissinger, interviewed Seineldfn shortly after the Mineii's the Natural Social Order and each disseminate anti-national founding to ask about the movement's nature and goals. doctrines." Seineldfn specificallyattacked the "fictitious re­ Seineldfn pointed to recent developments in Brazil and the gional and international integrations" being offered devel­ impeachment of President Fernando Collor de Mello, to give oping nations, as represented by the North American Free an idea of what the new nationalist movement might accom­ Trade Agreement (NAFfA) or the Southern Cone Common plish. "I think that what happened in Brazil, where in the Market (Mercosur)., The,se, he said, "don't respond to the demonstrations against corruption, people went out with their genuine interests of each nation, but only to the same old faces painted" like Argentine Army nationalists who are powerful interests which, through weakening states, intend called "painted faces"-this is a symbol of what a well­ to suppress them to their own advantage." oriented society can achieve ." A nervous Grondona, clearly In contrast to this outlook, Captain Breide told the audi­ fearful that the new movement has the potential to overturn ence, "We are proposing an exciting experience," one in Argentina's corrupt government and party apparatus, has­ which military and civilians can unite to "conceive of a na­ tened to explain that developments in Brazil had occurred tion." This is nothing less than a revolution, he explained, "within the system," and went on to insist that Seineldfn was not a violent one, but one which represents "the only alterna­ really a voice in the wilderness, "a last of the Mohicans tive not compromised by the corrupt system installed in the type," who is out of step with the rest of society. nation for so many years ." At least this is what the corrupt politicians of Argentina Displayed on the podium during the founding ceremony hope. However, the Anglo-Americans aren't taking any was a replica of the painting by Italian Renaissance master chances. In November, Kissinger will participate in a semi­ Raphael ofthe Archangel Michael, traditionally considered to nar praising Argentina's so-called economic miracle. He will be the leader of the celestial militias which combatted Satan . try to ensure that the situation is under control .

EIR October 23, 1992 Feature 37 shed some light. . . . 2. Argentina belongs to lIispano-American civilization and is rooted in the Greco-L�tin-Catholic world. Argentini­ The movement's dad has its roots in Greek p�ilosophy and in the laws and institutions of Rome which,;with the seal of Christianity, fo unding principles engendered H ispanidad. I We recognize ourselves as western, then. But to which West do we refer? Certainly' not to the current hedonistic, Thefollowing are excerptsfrom the Declaration of Principles materialist, decadent West, ",hich has lost the meaning of of the Movement fo r National Identity and Ibero-American man and the world. Integration (Mineii),founded Oct. 3, 1992 in Buenos Aires. Argentines are the inheritors of traditional western cul­ ture . That is why we know what we know . We know that Justification philosophy is the highest expression of human reason, and There is in Argentina a law which is almost inexorably not worthless chatter. And we know that material factors are fu lfilled: Each governmentleaves the country worse offthan not the beginning and end of liuman actions. Or at least, they it found it. should not be. In either "de facto" or "de jure" governments, and with And we know that we cali know, and know with exact­ either good or bad faith of the rulers, there is always a con­ ness. And we know that there are perennial values, and that stant: the application of mistaken ideologies which diminish there is an order in the world and that man can discover it. human nature. We also know, by virtue of being western, that there are Without a higher conception of man and of life, any things that are and things that are not. We know that truth and political, social, or economic creation is nothing more than errorexist, and we know the 4ifference between them. one of the many utopias which mistaken ideologies have We also know that good and evil exist, and that the two created throughout history . cannot be confused. As a result of a long series of disasters, Argentina today Moreover, we know that by using reason, we can develop is on the brink of extinction. science and technology to dominate nature, and we know that For it to be rescued, there are not several options to that power has moral limits. choose from. There is only one: Build the National Project As a natural defender of the highest values-Faith, the upon a correct understanding of the Argentine being. transcendent nature of man, spirit, the heroic sense of life­ In the face of socialist or liberal systems, conservativeor our nation today has something to say to humanity in crisis. racist proclamations; in the face of communist or anarchistic Without doubts or ambiguities, the Argentine response manifestos, which are all transplanted copies, we offer a to the modem world must be a spiritual one. synthesis of the National Doctrine. 3. The Argentine is not an American aborigine, or a Our National Dogma attempts to synthesize the work of Spaniard or European. The Criollo is a mestizo reality, a thousands of Argentines who have dedicated their lives to fusion of races in which the primitive lineage makes up his conceiving of the Fatherland. Thus they belong to no particu­ particular mode of being. lar group or sector, but rather to all Argentines. By virtue of being a new nation, the task of seeking distinctive characteristics is unavoidable. Although lacking I. Our country, our people definitive results, amidst sometimes incomprehensible and 1. Argentina is an amalgam of the Criollo and his land, changing controversies and hesitations, nonetheless, the Ar­ making up a nation which, with its own style, has a higher gentine essence exists. historical mission to fu lfill. It is clear that it is necessaryto know our genesis, because Contrary to what some ideologies maintain, our National we will be, at least in large part, the expression of what we Doctrine understands that the existence of nations is not the have inherited from our ancestors-both the good and the result of a pact among groups of inhabitants. It is not a bad. contract based on convenient relations among families or For sure, we do not propose a nostalgic-or utopian­ regions to protect certain values-property, status, well-be­ return to the past. We seek only to articulate our own model. ing-in cooperation with established authorities. Only in this way shall we arise from the prostration of which The nation conceived of as a voluntary creation, which we justifiablycomplain . can therefore be rescinded, to protect material values which We are Argentine and this includes the Indian, the His­ are more or less circumstantial, although important in them­ panic, the European, the CrioUo. This is the native Argentine selves, fails to recognize that the link between man and his and the universal inherited; it all contributes to a substantial nation goes beyond mere utility or comfort-"feeling Argentine originality. good"-to become a mystery upon which only poets may While recognizing ourselves to be sons of Spain, we

38 Feature EIR October 23, 1992 cannot be Spanish. We shall be Argentine, or shall be vocation of service in all members of the social body. nothing. Civic duties conscientiously carried out by the majority of the citizenry constitute a secure basel for the consolidation II. The individual, rights, and duties of a healthy community order. Our Natipnal Dogma demands 4. We conceive of man as person . Lord of himself and of each Argentine the complete fulfilhqent of his social obli­ of things, the subject is the bearer of an unsubstitutable load gations. Thus, those who have and can do more have the of transcendent values. As a "being who decides," he is free, moral obligation to act on behalf of thQse who have and can and therefore "responsible" for his conduct and his life. do less. To be aperson means "to be afreemoral being, " under­ The generous effort to protect, house, and feed the dis­ standing human freedom as a means, not an end. possessed and needy is a manifestation'of fraternal love, and We conceive of freedom as an instrument which allows will be well rewarded through the knowledge that one's duty the subject to inquire about the meaning of life, and as a to God, country, and those who live under the same skies, capability which permits, through the healthy exercise of has been fulfilled. the intellect, finding adequate responses which lead man to higher ends. III. Labor, trade unions The notion tlf the person is one of the exalted fruits of 7. We recognize labor as a universal means of service to western Christian thought, and upon that truth our entire the community and as the pillar of a just social order. vision of reality is built. Our National Doctrine, which in its own way reflectsthe At the center of our political, social, cultural and econom­ 2,OOO-year tradition of western peoples, understands labor ic affirmations, is the person, beginning and end of the Na­ not as something mechanical, but rather as an expression of tional Doctrine. the uniqueness of the person. In its individual aspect, itis a S. By his very nature, the person is endowed with inviola­ creative act and serves as a means of sustenance. In its social ble universal rights. Given that the exercise of those rights aspect, it produces goods and service" for the community; guarantees the individual's integral realization, they must be moreover, the natural coming together of workers in defense protected by the state against any assault from any totalitari­ of their common interests, leads to thel creation of the indis­ anism, whether it be tyrannical, collectivist, technocratic or pensable trade unions and professional associations. financial in nature. The trade union and professional organizations exist to Man must be assured sufficient goods, not only material integrally defend the job and the profession. The improve­ but also moral and spiritual, so that he can easily perform ment of the work place-the company-is also sought, guar­ any activity leading to his happiness. He thus possesses fun­ anteeing the perfection of the worker and ensuring that work­ damental and unrenounceable rights, among them the fol­ ing conditions are healthful. lowing: We cannot, of course, forget that lthe union's essential function is to obtain just remuneration, according to the Right to life, which must be respected from conception. needs of the worker's family. The jus, wage must not only Right to profess religion. cover food and clothing, it must cover health, education, Right to form a family and educate his children. and tourism, and access to personal housing. It must also Right to work. ensure a dignified retirement. And it ,must permit genuine Right to education. savings, which implies the possibilit)! of obtaining private Right to health. property. Right to property. Only if these conditions are defended, can the worker Right to associate toward useful ends. consider himself totally free. Right to the juridical protection of the State. For the National Doctrine, the trade union is a free orga­ nization of the people, never a dependency of the state, or a In sum, nothing and no one can take from the Criollo his political party , or of supranational organizations. right to live fully on his land, if he has previously worked to The trade union organization is a creation ofthe workers deserve this. in a branch of production, bornof the principle of profession­ 6. The Argentine, owner and servant of his nation, has al solidarity, and which is directed to defend the worker's an unavoidable commitment to express solidarity with his social, political, cultural, economic and vital interests, thus compatriots. To the community which protects him, he owes participating in the national common enterprise. steadfast duties of justice and charity which he will generous­ ly perform, even at the cost of effort and sacrifice. IV. Economic and social ordeJt A fraternal co-existence is only possible in a society 8. The economy, which is insepllrable from the social based on mutual respect. A truly human political life built question, has a clear objective: that man live well. Therefore, upon Christian principles demands a sense of justice and a economic activity cannot be understood as unconnected from

EIR October 23, 1992 Feature 39 morality. trol, arbitration, and assistance. The state's supplemental, We conceive of the Argentine economy as the result of integrating, and orienting force guarantees the people's total the cooperation of the protagonists of the economic-social fulfillment and the nation it$ splendor. reality, that is, the job, the company, and the profession, Our National State protectsthe physical, moral, and spiri­ which within the regulatory framework of the state, has as tual well-being of all Argentines and defends the nation's its aim materializing conditions for the development of the integration, by affirming its essential and permanent ends in social body. This shall be achieved through the establishment its historical mission. of harmonious, rather than conflict-laden relations between We reject the political----ideological-vision which con­ capital and labor. ceives of the subject as antagonistic to the state, to which In its diverse aspects, economic activity has as its goal to there are two "solutions": If the decision is "in favor" of the serve the person. Economic facts-efficiency, profit, inter­ subject, the state is neutral , idispensable, and man egotistical est, consumption, production-are not ends in themselves, and isolated-typical of individual liberalism-lacking re­ and will not prevail over the essential rights of men. The sponsibility. If the decision is "in favor" of the state, the economy will be subordinate to the well-being of the individ­ result is collectivist totalitarianism, made up of "robots" de­ ual and of the community, and not the inverse. prived of their essential freedom. Our bishops have stated: "An economic system which Our National Doctrine is opposed to the materialist inter­ does not seek justice, food , work, and freedom for all Argen­ nationalisms, whether they be collectivist or individualistic, tines is damaging, is mistaken, and goes against man." because any conception which counterposes man to the state, We therefore condemn usury and the manipulations of leads to a human model deptived of its essential components. high international finance which enslave peoples, because We conceive of man simply as living in harmony with we seek a society of free men. the "state," this being an active means for the integral ful­ We seek a responsible, private fr ee enterprise and aspire fillment of human society. to a policy of full employment, dignified wages, and just prices as the basis for the desired and necessary harmonious VII. Defense, culture, and education development of the different social groups. 11. The National Doctrilne aspires to full self-determina­ Because, in the end, only a just distribution of the fr uits tion and attempts to preserve the "vital interests of the na­ of labor among those who truly produce, will bring us to the tion." This is achieved with the necessary support from a kingdom of Social Justice. society educated and attuned to the great national goals and sufficient and harmonious development of national po­ V. Community life tential. 9. By virtue of his social dimension, man lives and devel­ By virtue of its existence, a nation possesses the hypothe­ ops in community entities of various types. The National sis of conflict. It therefore needs sufficient protection. Na­ Doctrine favors all types of association whose aims imply tional Defense is built on the basis of the armed forces, which the defense and promotion of human values. have specific, fundamental,iand irreplaceable functions. But In fact, man lives in relation with his fellow men. He it would be utopian to build a structure of protection made lives in society. Throughout his existence, he belongs to up only of military elements. A firm support from the com­ several social entities. Some are natural , others are volun­ munity is also required. tary . All lead to an improved social self-regulation. There­ Just as the country's geographical borders are defended, fore a density of healthy community organizations has a ben­ so must its cultural-educational borders be defended. Today, eficial effect, as they act to safeguard the social corpus in its more so than by arms, domination is achieved through cultur­ entirety. al penetration. Therefore , together with trade unions, neighborhood Only a strong people, with a superior idea-the National groups, cultural and sports entities, the National Doctrine Dogma--can defeat foreign ideologies, neutralizing and dis­ especially protects the family, as it is the source from which suading our aggressors, regardless of the method of domina­ we receive life, and where we learnto think. For our unpopu­ tion they use. lated Argentina, it is a priority to stimulate everything which 12. We defend the Argentine cultural singularity which, enhances the family's unity, stability, fe rtility, and pros­ in distinctive fashion, expresses the values belonging to all perity.. .. of humanity. National culture , as an authentic manifestation of the Criollo's commitme1lt to truth and goodness, is the VI. The state origin and pillar of Argentine independence. 10. The state is the higher communal organism necessary To fulfillhis human dignity, man must improve the world for government to work. In it resides the power and the he inhabits. Every material or spiritual action which tends to authority; it participates in diverse political, social, cultural humanize the world is culture. This is true for all men, and and economic matters , in the domain which is its own: con- of course, for Argentines. With our characteristic-we are

40 Feature EIR October 23, 1992 Above the stage at the MINElI fo unding conference is the coat­ of-arms . The left two­ thirds is occupied by a map extendingfrom the southern United States to the southern cone of South America, including the Caribbean islands, the Malvinas, and the Argentine part of Antarctica , marked with the evangelizing cross . On the right is afurled Argentine flag ; this part can be adapted by using the flagof any country which wishes to become part of the movement.

inveterate rebels-we assimilate universal values-we are one of two roads: You recognize and defend them, or you Catholically western-we generate our own cultural expres­ deny and reject them. So as not to be fertile ground for

sion. In other words, "the universal spoken in Argentine." mistaken ideological adventures, our education must inc. lude Our current cultural abyss is the result of our having as a priority true religion, philosophy and history. . imbued ourselves with materialist ideologies-individualis­ tic or collectivist-unduly separating us from that humanism VIII. Foreign policy which derives from the vision of traditional Christianity. 13. Our foreign policy is based on two notions. On the The modern world as a whole, and particularly Argenti­ one hand we affi rm as natural the existence of sovereign na, have gradually discarded the human being's superior nations, which make up universal society. On the other hand, values, exalting the sensual and material to the detriment of we maintain the principle of juridical equality of different the authentic development of the intellectual life. nation-states. The knowledge and experience of legitimate perfection We know that an international juridical order is neces­ have been removed from our officialeducat ion. A supposed­ sary. This should arise from the conciliation of each coun­ ly impartial education, a neutral school, was imposed on us. try's interests. It has reached a type of indifferentism, a harmful egalitarian­ The creation of international-not supranational--enti­ ism. Today, everything is equal. There are no truths or cer­ ties, should be done without interference or subordination. tainties. "Everything is equal, nothing is better ...no one The moral and material independence of nations must be fails, there is no ranking ...immoral ity has equaled us." guaranteed, along with the safeguarding of each particular Everything is mere opinion, of equal value. What future state's legitimate aspirations. awaits us if the principles which justify one's life have disap­ Today's world is crumbling by virtue of its having been peared?!! lfhuman existence is, above all, commitment, how built on bases which counter the human condition. In fact, it can we propose an impartial education? Such neutrality is has been built on a principle of disorder. unnatural and suicidal. Schools "should teach children love Upon the inevitable ruins of the modern world, we must of virtue and hate of evil." Manuel Belgrano said this, and build another, based on reciprocal cooperation and aid he was not neutral . among different states. Because, together with the undeni­ There is no room for relativism on crucial matters. When able rights, states have unavoidable obligations to other lif�, faith, or fatherland and truth are at stake, there is only states. Their fu lfillment tends to improve the conditions of

EIR October 23, 1992 Feature 41 life and defense of the spiritual values which are the patrimo­ Colophon ny of all men. Despite the growing revulsion and disbelief to which The international order which Argentina proposes to oth­ incessant frustrations have brought us, we Criollos love our er nations of the planet implies non-intervention in the inter­ country. We wish to live in dignity in a "free ," "great," and nal affairs of other nations; peaceful co-existence-but not "respected" nation. only co-existence-and the consensual solution of disputes. We Argentines have a higheI; commitment to that truth This order is not possible if the principle of sovereignty and which is our fatherland. We feel that Argentina is everything, juridical equality of nations is not accepted. . . . and we have a duty to her. We know that not to fight forour Our foreign policy affirmstotal sovereignty over the Mal­ nation's emancipation is a crime �gainst our brothers. vinas Islands, and those of the Antarctic and South Atlantic. That is why the instinctive love which the Criollo shows We propose moreover the rebuilding of what was the to his native land, which in anotllerera witnessed the cam­ Viceroyalty of Rio de la Plata, in a community of independent paigns of San Martin , shall be reborn, despite two centuries nations. The revival ofthis ingenious geopolitical conception of effort to suppress it, when we are called upon to join of the Spanish Crown will be done with the obvious agree­ ranks behind the greatest political enterprise ever: national ment of the correspondingstat es, on the basis of our common independence. roots and for the purpose of protecting our mutual interests. Action for a culturally authentic, politically sovereign, A balanced development of member countries will make up economically developed, and socially just nation is a sacred what we shall call the Great Fatherland. duty and collective task for all Argentines of good will.

warns that the thinking that Seineldin typifiesamong some Who is CoL Seineldin, factions of lbero-America's military is extremely danger­ ous-to the Anglo-Americans. The book complains that and why is he injail? especially in South America's Southern Cone, the armed forces conceive of their mission as defending the values For many years, Argentine Col. Mohamed Ali Seineldin of "the Christian West . . . honor, dignity, loyalty . . . has been an object of hatred for the Anglo-American polit­ [and] to guard and guarantee the development process." ical establishment and the Washington, D.C.-based appa­ The book names Colonel SeineJdin as a representative ratus which goes by the name of Project Democracy. The of this current, which it characterizes as "fundamentalist" hero of the 1982 Malvinas War, who earned the loyalty and "authoritarian." The same terms have been used to and devotion of his men because of his determination to describe Panama's Gen. Manuel Noriega, whom fight and defeat the British enemy, has been vilified by Seineldin has described as "an outstanding patriot and an the Anglo-Americans because he refuses to bend to their excellent Latin American soldier." During four years in agenda of dismantling Ibero-America's armed forces to Panama, and at Noriega's request, Seineldin founded the facilitate implementation of the International Monetary Military College, the Superior War College, and the Cen­ Fund's free trade economic policies. ter for High Military and Political Studies. As he told EIR Seineldin, a devout Catholic , is an uncompromising in an interview published in the Aug. 30, 1991 issue, defender of national sovereignty and of the Armed Forces he was especially proud of the fact that "I dedicated the as an institution which must "provide for the common greatest part of my time [in Panama] to resolving the defense and at the same time collaborate in national devel­ hypothesis of conflict involving drug trafficking and ter­ opment." He is imprisoned today because of his role in rorism." the Dec. 3, 1990 military uprising which protested the Spokesmen for the Anglo-American establishment anti-national policies of the Carlos Menem government. have repeatedly tried to portray Seineldin as a supporter of As he explained in his statement before the Buenos Aires the March 1976 military coup which ousted then President federal court on Aug. 7, 1991, "I base myself on the Isabel Martinez de Peron from power, and put Rockefeller thinking of General San Martin, from whom I have de­ intimate Jose Martinez de Hoz in charge of the Argentine rived inspiration in my military training. He said, "When economy. This is a lie. As he explained before the federal the Nation is in danger, everything is licit, except allowing court, in early 1976 he personally tried to "prevent the it to perish." rupture in the constitutional order, because we knew that The 1990 book The Military and Democracy: The we were heading straight for political containment and a Future of Civil-Military Relations in Latin America, a trap" whose purpose was to destroy the Armed Forces. manual for destroying Ibero-America's armed forces, -Cynthia Rush

42 Feature EIR October 23 , 1992 land, whose master is God, and we, its simple administra­ tors .... The Sign of the Cross does not,distinguish among creeds nor beliefs, but extends its arms magnanimously to all the inhabitants of our soil. . . . Second law: the consolidatiort and development of our Seineldin: 'ajob conscience as a Nation and of a sense of sovereignty, should be the takeoff point for the project to define, to make viable, . the recovery, development, and well-being of the Father­ for men of courage' land .... Third law: our nation should integrate with all the brother The following are excerpts of the message sent by Col. Mo­ nations of Ibero-America and of the world, as members of hamed AU Seineldin to the fo unding conference of the Move­ a neighborhood, that is, without losing one's own identity ment of National Identity and Ibero-American Integration and the sovereignty of one's home. (Mineii). That is how our forefathers conceived of the Greater Fatherland, naturally integrated by a common heritage of Dear brothers in Christ, comrades of the Fatherland, com­ culture, religion, history, and tradition. When this great panions in battle, and friends of my bosom: enterprise began to fail, patriots of the nature of Gen. Don This is Col. Mohamed Ali Seineldin speaking to you. Jose de San Martin and a group of soldiers and illustrious Today, Oct. 3, 1992, under the protection of Saint Teresa citizens launched their great emancipatory exploit, for the of the Child Jesus, a group of distinguished men and women purpose of preventing the disintegration of the continent. are meeting in this honorable assembly to declare themselves Unfortunately, the harmful Anglo-Saxon policies of the a part of this founding event of our Movement for National period, seconded by local personalities, managed to break Identity and Ibero-American Integration. up the San Martin project, fragmenting the continent into Seeking to revive the patriotic will in these moments of isolated republics and bringing them thusly into a situation genuine and anguishing crisis and confusion, we reaffirm of crisis and dependency. that: the national movement is the vital force of the Nation, Continuing with this great swindle, today they offer concretized in the testimony of honest individuals who, us fictitious regional and world integration, since the very through constant effort, uphold the Argenti�e flag. identity of each nation is no longer respected; they give us The Movement for National Identity must be for the integration based on simple commercial interchanges which Fatherland, what the soul is to man. Without it, the body , do not respond to the genuine interests of each nation but materialized as political action, cannot sustain itself or live; rather to the interests of the ever-powerful, who by weaken­ for it preserves the body from those deviations and appetites ing the states hope to subjugate them ... which corrupt it. . . . Compatriots, this challenge we face today, to rescue the 'If we fail, we will be dominated' vital force of the Nation and of the Fatherland, forces us to Ladies and gentlemen, we are only a few years away consider certain laws which I propose as principles, which from the year 2000, and the new face of the Revolution has must never fail to guide our actions: already implanted itself in the Argentine Republic, promoted First law: this rebirth of the national spirit should be by international financial imperialism: the new world order inspired by the Symbol of the Cross, upon which Man-God which, in utopian fashion, hopes to rule the next millen­ was crucified and which we could interpret thusly: nium .... • The vertical bar expresses the alliance of God with Comrades, the Patron Virgin, our forefathers, history, each one of us as individuals. and Argentine men and women of good will are watching us. • The horizontal bar represents the place occupied by In our hands lies the power to give life to this movement, our brothers. Looking at it from the front, the left part, which reflects the National Soul. in its fight to rescue the coinciding with the wound Christ received from the spear, Fatherland. If we fail, "the year 2000 will find usdominated . " embraces the brothers who suffer pain: the elderly, the in­ Know that the task we begin today is not easy, but as the firm, the orphans, the impoverished, the oppressed, and the father of our country said, "It is for men and women of marginalized. Thus there are material needs which we must courage that such enterprises welte made." make the center of gravity of our efforts. The right part Finally, I remind you all that, without God and the Father­ represents those who, while not suffering material needs, land, there is the void, there is nothing, there is the abyss, are often deprived of something worse than these physical there is darkness, there is death. wants: sp irituality.... Therefore, friends of my bosom, I call on you to accom­ • The crosspoint of the two bars represents the Father- pany me in this cry of hope: Long Live the Fatherland!

EIR October 23, 1992 Feature 43 The economic policies applied today in Argentina are based entirely on the spirit of profit and upon the meanness of those who implement them. The r�sult is that mis�ry is spreading beyond th�1imits 6f �u�an dignity, to assault the entire productive. system and, in consequence, the common good. . Breide: Whatwe .. �� ,., �. Our doctrine rejects libenilism becauSe, by 'inaking indi­ mean by 'revolution' vidual freedom the highest priqciple of social life, it turns society into a jungle and man into the victim of a pitiless capitalism, making him the easY1 captive ofthe ihternational The fo llowing are excerpts of the message sent by Capt. financialpowers . Gustavo Breide Obeid to the Oct. 3 fo unding conference Our doctrine rejects Marxism, because that ideology, by of the Movement for National Identity and Ibero-American deifying the state, transforms th¢ community into an anthill, I nte gration . and makes man defenseless> agai�st the agents of a deperson­ alized bureaucracy. . . . Dear Friends: Never before has it been less important to know To preserve the national identity, we must return to our how many are out there listening to these words; there could source, defending the values and principles that upheld the be hundreds or even thousands of compatriots . What is truly civilizing enterprise of Spain. This search for identity should important is this: Who are you and what feelings do you hold not and cannot remain in the hapds of the enlightened few, which spurred you to adopt the decision to do something for but is the task of all Argentines. � our tormented Fatherland? That is why I care nothing for numbers. A movement, not a party t . What I am sure of is that I am addressing Argentines of Thus, we have conceived · of a movement, and are not honor who are determined to say, "Enough !" to the miserable content to become one more political party . state of things which threatens to definitively bury the values The Movement for Nationalhientityand Ibero-American which make life worth living. Integration is not a political or�ization, but is a national You have gathered here for no other reason than to seek movement. It does not represent sectarian nor;partisaninter� a means of realizing the National Revolution so promised, so ests, but seeks to representonly JIlationalinterests .... debased, and so repeatedly betrayed. We speak of revolution Our movement aspires� to full self-determination, and without fear of the word, because what we propose is based seeks to preserve the · vitalI 'inteItsts of .the Nation. This is on profound change needed to reestablish the Natural Order. obtained with the necessarybac �ing ofan enlightened soci­ National Revolution, which should not be linked to use ety, fully informed of the great! national' objectives and of of force or violence. Revolution, in its truest meaning, con­ an appropriate and harmonious development of our national sists of producing the necessary structural changes to permit potential .... solutions to the serious moral , social , political, and economic Our concept of international policy is based on recogniz­ crisis facing our Republic. It is our duty to present ourselves ing the existence of "sovereign nations" as natural , and there­ as the only alternative that is not compromised by the corrupt fore we uphold the principle ofjuridical equalityfor all differ­ system which installed itself in the Nation years ago. ent national states and the right to self-determination of aU We seek National Revolution to rescue our identity, peoples. We promote an lber�America solidly integrated which has been perversely negotiated by corruption become behind common interests andidea ls. : •.. " , power. We are the real Argentina, a country which is invisi" In sum, we are proposing � exciting experience. To ble to the media and to those who think they rule; we are the unite-civilians and military-tQ jointly conceive of a Na­ hungry retiree; the provincial resident who sees the regional tion. The enterprise is so enormQus that it will be similar to economy swept away by the golden calf of "savage capital­ re-founding the country, for virtuallynothing remains of that ism"; the worker about to become cheap labor in a fifth­ with which we identifiedand whiich was our pride. rate enterprise; . . . finally [we are] the military officer who I have but one question: Aren't these ideas sufficient to watches indignantly as the armed institutions . . . are de­ justify a Revolution? I am not .speaking of a coup d'etat stroyed, and sovereignty marketed. or of a popular uprising. I am r�ferring to something more Argentine society, afflicted by an unending succession profound, to something ,more transcendent, to something of failures, has begun to doubt itself, its capacity, and to lose which irrepressibly beats in all ()f our hearts and which no its sense of solidarity. This Argentina, so weakened and in one canstop. . . . ., , J.. ',f" the depths of its degradation, impotently tolerates the cun­ . A final promise andrallying ¢ry: For God our Lord; For ning suggestions of those, in certain sectors , who propose our beloved Fatherland; For the future of our children; Not that foreign agents manipulate national power .. .. one -step backward!

44 Feature EIR October 23, 1992 support each other. Our goal is a sovereign state, free from any dictates, as well as the creation of conditions under which the creative and productive capaciities of man may truly Worldwide messages flourish. From Dr. Tibor Kovats. director of the Hungarian Associa­ of supportpour in tion of Former Political Prisoners, director of New Europe. From a stay in Dusseldorf, I am sending my best wishes from the Schiller Institute. As Hungarian spokesman for the Europe, Russia, and Georgia "New Europe" group of parliamentarians, which unites par­ From Helga Zepp-LaRouche,f ounder of the Schiller Institute liamentarians from Hungary, Poland, and Germany in the and the Club of Life. Germany. fight for the realization of a European-wide program for eco­ The founding of your organization takes place at a mo­ nomic development, I wish your movement good work, and ment of apocalyptic crisis for human civilization. Never be­ send my best wishes of solidarity to all participants of the fore in history was the threat to the very existence of mankind conference. so fundamental, because never before were the problems so If anyone in Europe knows what "national identity" and interlinked and affecting humanity so globally-like AIDS, true democratic independence means, then it is we Hungari­ nuclear weapons, world hunger and the perspective of mass ans-afterour revolution in 1956 was beaten down. We wish migration of hundredsof millions of peoplefleeing disease, you all the best. war, and hunger. Theproblems of the world are such that there is no more From Guram Chakhvadze, executive committee member of a solution on a local or even continental basis. the National Democratic Partyof the Republic of Georgia. It has been my deepest conviction for a long time, that Warmest greetings to those attending the conference. we will only overcome this global crisis if we bring the From the former Soviet Republic of Georgia, we want to political and economic order into cohesion with the laws of let you know that after getting rid of the communists who creation, that we make natural law the guideline of socialand oppressed our nation for more than 70 years, we are now political activities. threatened by a new danger: the radical neo-liberal policies This means that the only alternative to global irregular known as shock therapy, which are promoted by the Interna­ warfare, the takeover of mafias. chaos and the death of entire tional Monetary Fund. Therefore, for the defense of our na­ continents is the immediate realization of a just new world tion, we need a broad coalition with like-minded forces economic order, wherethe development of all nations on this throughout the world such as you, who are fighting for the planet will be guaranteed. same principles of defense of national sovereignty and Chris­ The center of this effort must be an image of man where tian values and against Godless communism and equally each individual is respected as imago viva Dei and where his Godless liberalism. or her inalienable rights are derived from thatconception. There is hope, because it is on this basis that a coalition From Sen. Vincenzo Carrollo. Christian Democracy. Paler­ of many positive forces in the world have come into being, mo. ltaly . who are working together to covercome the structures of sin I wish to express my firm solidarity to the Movement which are the cause for the present catastrophe. for National Identity and Latin American Integration, which I pledge on behalf of the international Schiller Institute shows the will to free Latin America from the danger of an and this growing world coalition to support your efforts in economic and political subjugati()nto American power. The all possible ways. InternationalMonetary Fund is not respecting its institutional Today is a very joyful day-for Argentina! duty if it continues to act as a blackmail bank instead of being a source of help for needy countries. The Latin American From the Schiller Institute in Moscow. economic integration will be useful and necessary for the We are glad of the opportunity to address the participants common good of the people in your continent if it will be in a conference, which has the goal of uniting patriotic and harmonized with the economic power of the European con­ progressive forces for struggleagainst oppressionby interna­ tinent. tional financial organizations, the unjust world economic or­ der, and corrupt governmentofficial s. All of these problems From Helmut Eichinger, president of the Association of Ger­ are very close and understandable for us, and we are trying man Farmers (VDL-West). Aufhausen. Germany; co-signed to oppose them to the extent of our abilities. Without a doubt, by Oswald Heftrig. vice president of VDL-West. Hessen. movements with similar convictions should coordinate their I am very glad to have heard about the fact that you efforts, for the sake of common goals, and strive to mutually are founding a new movement in Argentina to defend the

EIR October 23 , 1992 Feature 45 interests of your country against the New World Order. As I From prisoner of war Gen. Manuel Noriega of Panama. understand, this means for your country to fight against From within the belly of th¢ Empire which insists on de­ drugs, terrorism, poverty and against the takeover by the stroying our nationalist, patriotiC , and sovereign roots, I send Anglo-American IMF forces. Our own organization, the my most fraternal greetings to/ this excellent conference of VDL-West has just been founded to defend the interests of patriots fighting for a just, fJe, healthy and pure lbero­ the family farmer against the free trade policy of GAIT, not America. only in our country, but worldwide, through parity prices for Times are difficult, but the divine and sacred providence agricultural products. I think it is decisive to have a force in of the Lord places you in these moments on the altar of the every nation that fightsfor the right for development of every Fatherland. : individual, and to establish on a worldwide basis a movement Our "Patria Grande" is, an� continues to be trampled on for a just world economic order, in which every individual by Empire without respect for human dignity, but our people can live in dignity. already have a consciousness of an Ibero-American identity Therefore , all the best for your initiative. and unity. 1 Empires such as those of BQbylon and Rome fell like the From Alan Clayton, Glasgow, Scotland. Berlin Wall. Only God is the ru�er of eternity. To Colonel Seineldin: Congratulations on forming your No armed invasion can kill an idea; no sentence can new movement, from the Scottish Liberation Movement. silence Panama's cry of liberation, to be a single territory, Many years ago, as a young merchant seaman, I was in under a single flag, without for�gn troops. Argentina several times and loved your country. The Malvi­ nas War angered and enraged me . I wrote many letters to From Lt. Col. Jesus Ortiz Contrrras, one ofthefive Bolivari­ Scottish newspapers, critical of British imperialism. My an commanders arrested as a nesult of the coup attempt in younger son, who was 10, used to wear an Argentinian foot­ Venezuela last February. Ten other jailed Bolivarian offi cers ball strip at school games to show his contempt for Mrs. also sent messages. Thatcher's war. I was proud of him. San Carlos Prison, Caracas,iSept. 30, 1992 Afterthe war the submarine HMS Conqueror which sunk To the men, women, elderly, and children united in the the Belgrano sailed l.!Pthe Clyde flyingthe Jolly Roger-the Movement for National Identity imd Ibero-AmericanIntegra­ skull-and-bones. I managed to arrange a meeting with the tion, meeting today in Buenos Aires, Argentina. captain in the town of Greenock to express my loathing for From our prison of dignity \\Ihichtoday imprisonsbodies him and his works. He was shocked and horrified as he had but frees minds, we wish to send you our message of faith, thought I was coming to congratulate him. optimism and solidarity. Today ,I circumstances lead us to the I know a former officer of the submarine. He is a broken embrace of a United America; �e project which occupies us man now who has a job sweeping bus shelters in the town of causes us to reflect on the commitment of integration rooted Kircaldy. Most nights he wakes with a nightmare: the in the people-the people who today suffer under a corrupt screams of the dying seamen on the Belgrano they heard on leadership, of leaders committed to international organiza­ the submarine's electronics. tions lacking conscience and ideas, which have brought us Do not doubt: one day both our countries will be free to the current circumstances posing a terrifying picture. But from the British curse. in us are found the voices which can awaken the silence and pose the integration of the people and not of the capitalist Political prisoners oligarchs who ignore the human t>eing. However shortit may From the statement of u.S. presidential candidate Lyndon be, this message brings to you Ute chorus of a people who LaRouche. LaRouche's fu ll English-language greeting ap­ refuse to be domesticated and today fightto build the present. peared in the weekly newspaper New Federalist (No . 38, Brothers: let us hold high our banners and seek to consoli­ Oct. 12). date the real independence left inCompleteby our forefathers; . . . The time has come to act, not merely because the yet in them can be found the open book of teachings, of opportunityto act is presenting itself, a window of opportuni­ sacrifice, of enthusiasm-let us seek their path and look ty as it might be called, but because if we fail to act, if we together toward the horizon of a different America. Let us lose this opportunity, we may lose humanity over a period unite our wills; we have everythipg to achieve this. From our of a couple of generations or even more to come ....And Venezuela, we play the maraca� cuatro and harp and say to so it begins again today, the great new movements which you: We are with you our Argentine brothers in the search will sweep a continent and continents, begin in the most for the potential Fatherland, for now and always. unlikely circumstances, but they begin at a point where some see clearly that this is a window of opportunity where we Ibero-America I must initiate action now, or risk the plunge of humanity as a From Marivilia Carrasco de Lopez, president of the lbero­ whole into a New Dark Age. American SolidarityMovem ent, Mexico.

46 Feature EIR October 23, 1992 I am infinitely grateful for the invitation to be with you From Carrion Junior, fe deral dep utY, Brazil. in this historic meeting, and profoundly regret not being At a time when a new neo-colonial pact is being restruc­ able to do so .. ..We affectionately remember your words, tured under the sponsorship of the great powers, which have Mohamed Ali Seineldfn, sent to the founding meeting of the United Nations and its armedbranch the SecurityCouncil the Ibero-American Solidarity Movement held in Tlaxcala, as their instrument, we offer solidarity to our comrades in Mexico ... the fight to guarantee our national sovereignty and the ever In the name of my colleagues of the Ibero-American greater importance of our Latin American integration. Solidarity Movement and for myself, I enthusiastically salute the founding of the Movement for National Identity and lbe­ From Mario Carrea Bascunan. rector. Bernardo O'Higgins ro-American Integration. University. Santiago. Chile. Oct. 3. We pray to God and the Holy Virgin for the success of . . . I am pleased to send you thymost cordial greetings your historic meeting. The Malvinas are Argentine, the Canal with the desire that we may be able to join efforts in the is Panamanian! One united force from the Rio Grande to common task of preserving our res�tive nations, the princi­ Patagonia! Long live our common Fatherland! Long live ples and superior and permanent \lalues ofour tradition, in Mexico! Long live Argentina! terms of the ideas of God, Country, and Family, which make up our Hispanic cultural heritage, thanks to which we belong From J. Jesus Gonzalez Gortazar. president of the National to western Christian civilization. Confederation of Rural Landowners. Guadalajara. Mexico. We cordially greet the delegates to this congress apd we Asia and Australia support you because your success will accelerate the desired From P.P. Gurung. member of the political commission of creation of our greater Fatherland. the Congress Partyof /ridia. The vast distance between the southern Asia region and From Josmell Muiioz Cordova. fo rmer Peruvian senator. Latin America has kept us physically separated. However, I . . . This movement arises precisely when the absence of find that countries of that subcontinentare engaged in a battle nationalist identity is being taken advantage of by the profit­ which is similar to ours. The economic injustice brought making institutions like the International Monetary Fund to upon us, first through colonialism �d later, through imposi­ impose economic policies contrary to the rights of human be­ tion of an unjust monetary system ,by a coterie of nations, is ings, whom they seek to submit to the exploitation of man by as evident here as it is over there. . . The unjust monetary man. or of man by the state. It is my hope that this movement system, imposed through the diktats of the IMF and the may become a foundation of hope for a battle that must be World Bank, has further weakened each country's leader­ waged with great faith for social justice of our peoples. ship .. .. I fully believe that the integration of Latin America will From the Permanent Forum of Rural Producers of the State not only bring prosperity in your subcontinent but also will of Sonora. signed by Jaime Miranda Pelaez. Mario Galle­ pave the way to others for similar successes. There is no gos. Adalberto Rosas. Jose Mend(vil. Ramon Morales and question in my mind that you wilJ find . obstacles placed on Alberto Vizcarra. your way, but I am also confident that you will push aside . . . The announcement of the constitution of this move­ these obstacles to usher in an economic system which will ment is an act that brings hope for all the peoples of lbero­ be just and moral. America who exist between life and death caused by the So, my friends, though I am ,not there physically with economic conditions of looting imposed by the International you, I will remain there in spirit. Your success is our success Monetary Fund. and we will pray to the Almighty fpr it. We. as agricultural producers in the most productive ag­ ricultural valley of Mexico, are waging a battle to prevent From Craig /sherwood. c010under andsecretary of the Citi­ economic liberalism from destroying our enterprises and with zens Electoral Councils. Australia,. them the capacity of our country to achieve food self-suffi­ . . . We congratulate your ef(orts in forming your new ciency. Your movement, like ours, faces a common enemy: institution, and look forward to working with your people in the usury of the IMF; and it has a common program: integra­ the time ahead. tion and unity of our peoples. Our country is very similar tq Argentina, and we share many of the same industries which are being systematically From Brig. Hugo de Oliveira Piva. Brazil. destroyed by IMF conditionalities and austerity. In order to I send my congratulations and my support for your efforts defeat the evil New World Econo!Dic Order of Destruction, to revive the feelings of national identity and Latin American we must join together and share �e resources found in the integration at a time when forces foreign to our society attempt God-given abilities of all our pe�ples, in order to lift and to weaken our will and make our progress more difficult. improve the quality of life for all of humanity .

EIR October 23, 1992 Feature 47 �ITillInternational

Pope rejects pre-Columbian 'anti-culture of death'

by Carlos We sley

Defying an all-out offensive against his participation, Pope and what he referred to as "pseudo-spiritual movements." John Paul II presided over celebrations of the quincentennial While in many cases their spread is due to inadequate atten­ of Christopher Columbus's arrival in the New World and of tion on the part of those in charge of the Catholic Church, the evangelization of the Americas, held in the Dominican "one cannot underestimate a certain strategy whose aim is to Republic on Oct. 11-14. There the pope met with the Ibero­ undermine the links that bind the countries of Latin America, American Catholic bishops, and called upon the continent's and thus to undermine the strength that comes from unity," Roman Catholics to rally against what he called the "anti­ he said. In a what was believed to be adig aimed at the United culture of death"-the pagan, malthusian rabble which is States, he added that "significant economic resources are condemning Columbus and those who followed for having allotted to underwrite proselytizing campaigns that attempt replaced indigenous cannibalism and ritual human sacrifice to break this Catholic unity." with the principle of man in the living image of God. The pope called on the leaders of Ibero-America to move Fake indigenism rapidly toward the economic integration of the hemisphere, The same could be said about the aims of the marches, taking advantage of those factors they already have in com­ violent demonstrations, and even terrorist activities in the mon: religion, geography, language, and history. Dominican Republic and elsewhere in Ibero-America before , During a mass for hundreds of thousands of the faithful during, and after the Oct. 12 celebrations of Columbus's before the Columbus Lighthouse monument in Santo Domin­ landing. For weeks prior to the pope's arrival, the Dominican go on Oct. 11, John Paul said that "although the Church does branch of a group calling itself Five Hundred Years ofIndige­ not purport to offer technical solutions," it "supports the nous, Black, and Popular Resistance, marched to protest creation of an economic program at the continental level so against the alleged "ethnocide" and "genocide" committed that Latin America, overcoming isolationism, can present against the indigeneous populations by the Spaniards five itself as a strong player in the internationaland world scene. " centuries ago. Among the signs carried by the protesters was The next day, during the opening of the Fourth Confer­ "Long live the people's war! Free Comrade Gonzalo!"-a ence of the Latin American Conference of Bishops (CEL­ reference to Abimael Guzman, the jailed leader ofthe Peruvi­ AM) , which will be meeting for the next few weeks in the an narco-terrorist gangSh ining Path, responsible for the mur­ Dominican Republic, the pope said, "That one factor that can der of 26,000peop le, most of them PeruvianIndia ns. contribute noticeably to overcoming the pressing problems One of the marches ended in a confrontation with police affecting this continent, is the integration of Latin America." and the death of one of the protesters, which focused a good Among "the great many factors in favor of integration," he deal of attention on the protests. But the protests were in any said in another speech, "first and foremost is the Catholic case getting an inordinate amount of attention from the U.S . religion, which is professed by the majority of Latin Ameri­ establishment media, particularly the New York Times and cans. It is a component that by its very nature is on a different the Washington Post, supposedly upset that the celebrations and deeper plane than mere socio-political unity." were too costly for a poor country. One issue was the $70 The pope decried the tremendous proliferation of sects million the New York Times claims was spent to build the

48 International EIR October 23, 1992 Columbus Lighthouse (which also houses the admiral's re­ of indigenous people as communist Cuba, China (which still mains). But the Dominican government said it only cost squats on Tibet), and "Yugoslavia" (i.e .• Serbia) , which is about $12 million-about what was spent for the four-course pursuing its own indigenous way ofiife by the "ethnic cleans­ dinners champagne and caviar at the mid-September annual ing" of the Bosnian population, while those overseeing the meeting of the InternationalMonetary Fund (IMF) in Wash­ new world order mumble mealy-mouthed platitudes. ington D.C. ' Terrorist gets Nobel Peace Prize u.s. newsmen caught inciting riot The awarding of the Nobel Peace Prize to terrorist Rigob­ On Oct. 12 Dominican police arrested three reporters erta MenchU, envoy to the U.N. 's various indigenist bodies from the U.S. Spanish-language network Univision. They during the 1980s for the URNG, i the umbrella group for were charged with paying slum youth to stage violent riots Guatemala's four guerrilla organ�ations, should make it against the pope. A Dominican congresswoman leveled a clear that these "indigenist'� opera10ns are intended to pro­ similar charge against a correspondent for Ted Turner's Ca­ mote the disintegration of the natiOns of Ibero-America­ ble News Network and Telemundo, the other U.S. Spanish­ and other nations-making them easier targets for looting language network. and depopulation on behalf of the I¥F, the World Bank, and Across the continent, similar coalitions of ecology kooks, other institutions of the new world order. New Agers, Marxist Theology of Liberation ideologues, indi­ If the stated aims of these "indigenists" were achieved­ genists, avowed communists, and others who openly support that is, if the "indigenous" people r.vere forced to remain in Peru's Shining Path and the Cuban regime, also mobilized a state of perpetual backwardness: as "natives," instead of against the quincentennial celebrations. Most of the demon­ being allowed to develop as human beings-that would con­ strators argued explicitly against westernJudeo-Christian cul­ demn millions in Ibero-America to death. Nothing shows the ture, and for a returnto primitive, pagan. "indigenous" prac­ genocidal intent more clearly th� the case of the Yano­ tices, as is argued by the death-cultists of Shining Path. mamis, a Stone Age people who livflin Brazil and Venezuela. Counter-celebrants in Mexico re-created "ancient rituals To preserve the purity of the YanoQ:tamis, autonomous terri­ at the pyramids of Teotihuacan," reported UPI, although it tories are being established and isol�ted from the mainstream was not reported if this included the tearing out and eating culture, even though the average YaoomaIIli life expectancy of human hearts-a common practice among the Aztecs and is 35 years, while that of Venezuel�ns o,verall is 70 years. In others before the Spaniards helped the indigenous populations other words, if they weren't isola(ed, their life expectancy to achieve their liberation from their indigenous oppressors. could double. The marches, as well as the outright terrorist actions­ John Paul II rejected the silly n�tionl> of those who blame such as the protests led by Colombia's M -19 and Communist Columbus for 'the currerit plight of:millions of Ibero�Ameri­ FARC, which imposed fines of 10,000 pesos and issued cans, including its "indigenous" ppople, instead of the flea death treaths against those peasants and Indians who refused market economic policies of IMF: and other institutions of to participate, or the bombing of public buildings and statues the new world order. Columbus w�s "a great admiral" who in Bolivia by Shining Path's clone, the Tupac Katari-were "planted the cross of Christ" in tqe New World, the pope all spawned under the umbrella of a single coordinated opera­ said. He also rejected the propone�ts of population control: tion working out of the United Nations: the Working Group "It is not a matter of reducing at all �osts the number of guests on Indigenous Peoples. To fund these divisive operations in at the banquet of life; what is needt1dis to increase the means Thero-America, a $40 million kitty is being established out and to distribute with more justic� the riches so that all can of the Inter-American Development Bank. equitably participate in the goods !pf the creation," 'the pope Hence there is nothing "indigenous" about these opera­ said at the Columbus Day meeting �f CELAM. tions. They were created by the same people in the United "Life, from its conception in thematernal womb until its States and Europe who sponsored the bloodthirsty Khmer natural end, must be defended, decisively and bravely," he Rouge of Pol Pot in Cambodia, and its equally genocidalist said. "It is necessary , then, to creat� in the Americas a culture "indigenist" gang in Peru, the psychotic Shining Path. of life that counteractS the anti-clllture of death, which­ The United Nations is drafting a "Universal Declaration through abortion, euthanasia, war, guerrillas, kidnaping, ter­ of Rights of Indigenous Peoples," to be issued in 1993, which rorism, and! other forms of violence and exploitation-in­ has been proclaimed the International Year for Indigenous tends to prevail in some nations." i People. The declaration will recognize the right of "self­ His last comment was a clear reference fo the death­ determination" for indigenous people, "the right to pursue dealing URNG of Nobel laureate MenchU and like groups, their own way of life," according to the Greek chairman of particularly Shining Path. This wa$ made even more explicit the U.N. group, Erica-Irene A. Daes. Without realizing the when the pope said, "In this spectrpm ofthreats against life, irony, the Oct. 15 New York Times reported that the others drugtraffi cking occupies a place iq �liefirst ran ks, which the repr�sented on the five-nation U.N. Working Group on In­ appropriate authorities Should coupter with all the available digenous Peoples are Nigeria and such paragons of the rights legal means at their disposal. " ! , '

EIR October 23, 1992 International 49 from which derive tremendous social consequences. The sit­ Documentation uation becomes even more hurtfulwith the grave problem of growing unemployment, which idoes not permit bread to be taken to the home, and denies access to other fundamental goods. Feeling deeply the gravity �f this situation, I have not 'Christ is the measure ceased to press in favor of a more active, just, and urgent of all culture, work' international solidarity. This is a duty of justice that falls upon all humanity, but especially upon the rich countries that cannot evade their responsibilities toward the developing During his visit to the Dominican Republic to commemorate countries. This solidarity is a demand ofthe common univer- . Christopher Columbus' s voyage to America, Pope John Paul sal good which ought to be respected by all the members of II addressed many of the most pressing social and religious the human family. . . . problems besetting [bero-America in particular. The fo llow­ Solutions must be sought at, a world level, instituting a ing excerpts are from his homily during the mass at the true economy of communion and participation of goods, both Columbus Lighthouse on Oct 11. andfrom his speech to the in the international order, as well as the national. For this opening session of the Fourth General Conference of the purpose, one factor that can contribute noticably to overcom­ Latin American Conference of Bishops (CELAM) on Oct. 12. ing the pressing problems that affect this continent today, is The text was translated by EIRfrom the Spanish. the integration of Latin America: It is the grave responsibility of the rulers to favor this already initiated process of integra­ Mass at the Columbus Lighthouse tion of peoples which the same geography, the Christian On the harmony of interests: faith, language and culture have definitively united in the The commemoration of the FifthCentennial of the begin­ path of history . ning of the evangelization of the New World is a great day Closely connected to the ptoblems noted, there is the for the Church .. .. grave phenomenon of the children who live permanently in To workers and entrepreneurs-fromyour respective re­ the streets of the great cities of Latin America, undermined sponsibilities to society-I can no less than exhort you to a by hunger and disease, without any protection, subject to so real and efficient solidarity. Your challenge in the current many dangers, not excluding drugs and prostitution. Here circumstances is to have as your common aim to help Latin is another issue that should quicken your pastoral concern, American man to meet his unpostponable needs: to fight recalling the words of Jesus, "Let the children come to me" against poverty and hunger, unemployment, and ignorance; (Mat 19:4). to transform the potential resources of nature with intelli­ gence, industriousness, and constancy; to increase produc­ On the new evangelization: tion and promote development; to humanize labor relations, The new evangelizaton does not consist of a "new evan­ always placing the human person, his dignity and rights, gel," which would always stem from us ourselves, fromour above selfishness and special interests. Looking over the culture, from our assessment of the needs of man. That would current panorama of Latin America and, more so, the per­ not be an "evangel," but a mere human invention and there spectives for the future, it is necessary to set the basis for an would be no salvation in it. It doesnot consist either in cutting economy of solidarity. One must feel the poverty of the other from the Gospel all that seems hard to assimilate by today's as it if were one's own and become convinced that the poor mentalities. Culture is not the measure of the Gospel, but cannot wait. Jesus Christ is the measure of all culture and all human work. For their part, the powers that be must face up to the unjust No, the new evangelization doe$ not rise from the desire "to differences that offend the humancondition of men, who are please men" or to "seek their favor" (Gal 1:10), but of the brothers and sons of the same Father and partake of the gifts responsibility toward the gift God has given us in Christ that the Creator has placed in the hands of everyone ... in whom we access the truth about God and man, and the possibility of true life. Address to Latin American Bishops On the foreign debt and the economic crisis: On population control, aborti()n, and euthanasia: Despite the advances in some fields, poverty persists and It is a fallacious and unacceptable solution which advo­ even increases. The problems are aggravated by the loss of cates the reduction of population growth without regard for purchasing power of money because of inflation, sometimes the morality of the means employed to achieve it. It is not a uncontrolled, and the deterioration of the terms of exchange, matter of reducing at all costs the number of guests at the with the consequent diminution in the prices of some raw banquet of life; what is needed is to increase the means and materials and the unbearable weight of the internationaldebt , to distribute with more justice ' the riches, so that all can

50 International EIR October 23, 1992 equitably participate in the goods of the creation. . . . Life, from its conception in the maternal womb until its natural end, must be defended, decisively and bravely. It is necessary , then, to create in the Americas a culture of life that counteracts the anti-culture of death, which-through abortion, euthanasia, war, guerrillas, kidnaping, terrorism, and other forms of violence and exploitation-intends to Seoul-Beijing ties prevail in some nations. In this spectrum of threats against life, drug traffickingoccupies a place in the firstranks , which portend instability the appropriate authorities should counter with all the licit available means at their disposal. by Lydia Cherry On liberation theology: . . . We cannot forget that recent history has shown that South Korea opened official diplomiltic relations with the when, under cover of certain ideologies, the truth regarding People's Republic of China (P.R.C.) on Aug. 24, an action God and the truth regarding man are denied, it is impossible which will redraw the political configuration of Asia. This to construct a society with a human face. With the collapse of was followed by a high-profiletrip to �eijing by South Kore­ the regimes of so-called "real socialism" in easternEurope , it an President Noh Tae Woo over Sept . .27-30. During the trip, is to be expected that also in this continent the appropriate cooperation was begun or intensified.n numerous economic conclusions are reached regarding the ephemeral values of fields. The two countries concluded a trade agreement, and such ideologies. The crisis of Marxist collectivism is not agreements to guarantee investment, �n science and technol­ one rooted solely in economics, as I have highlighted in ogy, and on establishing a joint cOptmittee on economy, Centesimus Annus, because the truth concerningman is inti­ trade, and technology. A banking liink was also finalized, mately and necessarily linked to the truth concerning following earlier talks in Washington, D.C. between the God .... chairmen of the South Korean and Chinese central banks. There exists no authentic human advancement, no true The delegation from the South Kor� side to Beijing was liberation, nor preferential option for the poor, if one does large, including officialsof several dqzen multi-national Ko­ not start from the very foundation of the dignity of the person rean businesses. and the environment in which he must develop, according to Equally important, China, conducting an undisputed mil­ the project of the Creator. itary buildup and flexing its military muscle to assert its territorialclaims , reportedlyheld discUssions with South Ko­ On the proliferation of sects: rea on military cooperation. The Sou$ Korean daily Hanguk Following the example of the Good Shepherd, you must Ilbo reported on Sept. 29 that discu$sions in such areas as graze the flockentrusted to you and defend it from the rapa­ exchanges between fieldgrade officetswere held. cious wolves. A cause of division and discord in your ecclesi­ astical communities-as you well know-are the sects and China, the last gateway the "pseudo-spiritual" movements referred to by the Puebla South Korean polls reported widetranging supportfor the document, whose expansion and aggressivity it is urgent to visit, which was viewed as President! Noh putting into place confront. the finalplank of his "Northern policy!' forthe eventual reuni­ As many of you have pointed out, the advances of the ficationof Korea, prior to his retirem

campaigns. But, it can also happen that the faithful cannot the United Nations. I have now opeqed. the door to Beijing, findin their pastors the strong sense of God that they should the last gateway. " communicate in their lives ..... With the collapse of the Soviet iUnion, China is being On the other hand, one cannot underestimate a certain placed in the role to broker Korean r¢unification. In marked strategy with the aim of undermining the links that bind the contrast to the earlier North Korean ¢action to South Korea countries of Latin America, and thus undermine the strength establishing close links with the Soviet Union in the Gorba­ that comes from unity. Toward that objective, significant chov era, North Korea has been totally silent about Noh's economic resources are allotted to underwrite proselytizing trip to Beijing. campaigns that attempt to break this Catholic unity. China offers South Korea new markets and natural re-

EIR October 23, 1992 International 51 sources, and there is strong support in Seoul for greater eco­ Balance of power games nomic links. "China is the sixth largest oil producer in the Why is it that well-placed Korea experts in the West­ world and is rich in coal, antimony, tungsten, and vanadi­ many of whom were not that fond of President Noh's "North­ um," noted South Korea's Energy and Resources Ministry e� policy': earlier, nor that ha�py wi�h a close South Korean on Aug. 29. "As it wants technology and capital , bilateral alliance With the former So�et Umon-are quite pleased cooperation would prove lucrative for both countries." The with this latest diplomatic hoo�up? Henry Kissinger touched firstconcrete commercial benefit for South Korea appears to on the subject in a Sept. 23 address on the Asia Pacificregion be in steel, and it is expected to be at the expense of Japan. to the Washington, D.C.-based Freedom Forum. Pohang lron & Steel Co. , South Korea's largest steelmaker Concluding that Korea "will become much stronger" in and the third largest in the world, has signed a $100 million the coming period, as will Russia, Kissinger insisted that the joint venture to produce tin-plate in Shanghai. United States "must prevent hegemony in Asia" at all costs. As the new broker for Korean reunification, China's al­ Kissinger made clear that he was referring to Japan: "Japan ready quite heftyrole in the region will be enhanced. But the has survived 2,000 years; it has a special culture," it cannot reason China had little hesitancy in moving toward Seoul is be "part of any global structu�e," it doesn't have the ability also connected to the country's internal problems. A British "to think in terms of a world coimmunity." Japan has a "heavy area specialist, who predicted the breakup of China in the nationalist component . . . th�ne cessity for consensus is a longer term, told a reporter: 'The central government in problem." The United State�, he continued, must have a Beijing has been becoming increasingly weaker. The state close relationship with Japan, �ut "we must also accept [that] budget has been shrinking in relative terms as the economy it is a very different kind of soCiety." has been growing; people in the poorer provinces no longer On China, Kissinger said, t"Because of the weight China look to Beijing to help them to catch up with Guangdong" carries, our foreign policy would be difficult" were there a and other provinces on the southeast coast of China, where break in relations. there has been heavy investment from Hong Kong and Taiwan. Don't encourage Japan Beijing's strategy over the last two years, according to The British area specialist spoke in a like manner. He this source-though he admits that "Beijing very definitely first noted that the view in �ritain has been that Japan in has mixed views" on the subject-has been to encourage the general should be encouraged ;to play a more prominent role poorer regions to look outside China for additional sources of in world affairs. However, he qualifiedth is: "This has always revenue, investment, and so on. "The northeasternprovinces seemed to me a slightly short-sighted view ....This might obviously look toward Korea," and relations between Seoul lead Japan then to adopt positions which were differentfrom and Beijing will encourage South Korea to attempt to develop those of Britain or the United States, or the West-for in­ this destitute region, he said. stance as they are over Russi�." This same "difference," he Might not this strategy also tend to bolster separatist tend­ continued, might occur with r�spect to Japan's policy toward encies in China? Might not this northeastern province area China. tum out to be an economic sinkhole for South Korea, in light The analyst then embarked into a discussion of how Brit­ of the financialresources that Seoul has sunk into the former ish strategists were operating' from a "more Machiavellian Soviet Union over the last two years, and the need to bolster view." The view is that "if you encourage the Japanese to the North Korean economy that achieved a -5.2% growth play a more prominent role of some kind in the region, they rate last year? the source was asked. "Very possibly; it cer­ would then be forced to confront . . . some of the unfinished tainly could tum out that way," he responded. business of the Second World War," i.e., the hostility against Another benefit for China in the new arrangement in­ Japan in the region. So, he continued, what the British were volves edging out Japan. Although little has been said public­ actually doing by encouraging Japan to play a larger role was ly, it is known that Japanese leaders responded to the warm­ to "force the Japanese to spend a lot more time in coming to ing of relations between South Korea and China with a sense terms with that. And if they wre busy doing that, they might of disquiet. Remarks from the Korean side fillout the picture. not have much time to deal with other parts of the world. The South Korean daily Choson Ilbo on Aug. 28 interviewed If you cause trouble in somebody's backyard, they tend to No Chae-won, who handled much of the diplomatic work concentrate on it first." with the P .R.C. He was asked, "Because ofthe establishment This analyst is convinced that the overall situation is of diplomatic relations between the R.O.K. [Republic of "highly unstable," despite a Kissingerian balance-of-power Korea] and China, are there now options that a structure will policy. "The warming of relatjons between Korea and China be formed to restrain Japan?" The Korean leader responded: may be directed partly agairtst Japan, but in that kind of "It is true that we are worried about Japan ...[but] I do not triangular relationship, I think there is a lot of basic instabili­ think it is a situation yet in which it is necessary for the ty. The players could move sides fairly quickly ....We are R.O.K. and China to unite to deal with this matter." talking about temporary and shiftingallianc es."

52 International EIR October 23, 1992 In Jordan, eyes are on the show trial of popular Muslim leader ShulJeilat I by Muriel Mirak-Weissbach

In the month of October, Jordanians have been preoccupied after Shubeilat had beendetained withPut bail. In that period with two events of great moment: the safe return of His of time, he had had virtually no priv.te discussion with his Majesty King Hussein from the U.S.A., where he had suc­ lawyer, Ibrahim Bakr, despite the fact that the seven counts cessfully undergone surgery to remove a kidney and precan­ against him included conspiracy to org.ize anarmed insurrec­ cerous tissue, and the trial of Islamic parliamentarian Laith tion against the state, a charge g!carryin thedeath penalty. Shubeilat, accused of crimes ranging from slander (against There was and is no evidence against Shubeilat. There­ the Parliament and king) to possession of weapons and con­ fore , the State Security Prosecution Jf the military tribunal spiracy to overthrow the state by force. had to weave together various separate threads, and present King Hussein, with his 40 years' rule , is the longest the resulting fabric as a conspiracy. For instance, the authori­ reigning monarch; Shubeilat, whose father served as a trustee ties first arrested Ahmad Ramzi Al Ayoubi, 45 , and Abdul to the king until he came of age, is a maverick Muslim who Hamid Sadeq Dkedik, 44, on Aug. 17i two shopowners who, has succeeded in attracting the highest number of votes in after lengthy interrogation, admitted to weapons possession. parliamentary elections, including from Christian voters. As Jordanian press sources reported off the record that the two the last session of Parliament was drawing to a close in Au­ had been beaten. Their confession, which turnedinto a guilty gust, and Shubeilat's committee to investigate corruption plea, included the assertion that Yacoub Qarrash, an Islamic was naming the names of past ministers allegedly involved parliamentarian, had provided the weapons, in his capacity in kickbacks, many political analysts whispered their opinion of leader of the Shabab Al Nafeer Al Islamigroup , a hitherto that the energetic Islamic politician might be in line for the unheard-of organization. Qarrash was;then arrestedand ques­ prime minister's position himself. tioned on Aug. 27. Arab press sources reported, again off Shubeilat had all the qualifications for the post, and his the record, that Qarrash was a Mossadagent , tooled for use policy outlook would have reflected thatof the majority of in framingup others. Through Qarrasb, who knew Shubeilat, the population. By the same token, he was shaping up as the latter was implicated and promptly arrested on Aug. 31. enemy number one of the Anglo-American establishment. The indictment states that the group had been set up to He not only spoke out against Operation Desert Storm, but overthrow the Jordanian state and install a Khomeini-style Is­ assailed the anti-Iraq embargo. Although his rejection of lamic dictatorship. Since therewas no �idence of the existence usury derived from deep religious conviction, his denuncia­ of the group, outside of the two confesl'ions, and no indication tion of the InternationalMonetary Fund's policies was shared that Shubeilat was associated with it, if it did exist, the rusewas among secular layers in Jordan and the Third World. He developed that he was the "secret" leaderof the group. had gone on record opposing the U.S.-led Mideast "peace The presentation of the prosecution's case was punctu­ conference" because it would ignore Palestinian rights. All ated by so many crude blunders, it w�s embarrassing for the admirable positions, one might say from a regional stand­ small group of onlookers, which incJiuded two international point. All good reasons for the United States to want him out observers. First, as Ayoubi and Dk�dik pleaded guilty to of the way. charges of weapons possession and aS$ociation with an illegal group, they stated their political aim was to fightin the Pales­ The making of a trial tinian Intifada, in the Occupied Tertitories, not in Jordan. Jordan prides itself on its relatively liberal political life. Shubeilat and Qarrash pleaded not guilty to the charges Since 1989, the highly politicized Jordanian intelligentsia against them. has been looking forward to the full introduction of democra­ Witness after witness for the pro�cution walked into the cy, as political parties were to be allowed. Now, whether small courtroom and, after a loud order from a military man or not parties will be formally introduced into the electoral for all present to rise, swore to tell the truth, on a copy of system has become irrelevant in the wake of the Shubeilat the Koran. Each was asked to look Pehind him at the four case, which has made a mockery of the democratic process. defendants in the dock, and identify nis relation, if any, with The trial,which was begun on Sept. 29, openedfour weeks each of them. Then, witnesses were fprcedto keep their gaze

EIR October 23, 1992 International 53 Refugees fr om the Gulf war lined up in Jordan to receive water, days after the outbreak of hostilities in January19 91 . Shubeilat spoke out courageously against DesertStorm and the anti-Iraq embargo. riveted on the State Security Prosecutor, Maj . Muhammed right after the discovery, had readily confessed that the for­ Hijazi, who sat, his eyes shifting constandy- behind tinted eign diplomatic missions were targets of the group. Just days eye-glasses, directly across from the witness stand, or on later, when the prosecution found itself in difficulties, anoth­ presiding judge Lt. Col . Yousef Faouri, who leaned with an er such surprising discovery was announced; this time, the air of bemused boredom on one elbow, toying with a ball­ story went that Ayoubi's father-in-law , present at the trial, point pen in the other hand, while two other military judges left the courtroom in mid-session to go home and search his flanking him watched expressionless. Major Hijazi would residence again. Lo and behold, he found weapons hidden pose the questions, reading from a script, and Colonel Faouri on the roof, immediately called the prosecutor, etc . would repeat the answers of the witnesses, phrase by phrase, The most curious development regarding the arms for the benefit of the court stenographer, who wrote every­ emerged during 'the testimony of Mohammed Abboud, a thing down in longhand. weapons expert working in the Oenerai intelligence Depart­ Most witnesses spoke in barely audible tones, as if scared ment (OID). After holding up pipes and illustrating how the stiff. simplest explosives can be homemade, he made the startling The gist of the first days' testimonies was that a group statement that what he had in the courtroom were only "sam­ existed in Jordan, under the leadership of Qarrash, involved ples," because "most of the [seized] explosives were de­ in the Intifada, with backing by Palestinian groups. None of stroyed since they posed a grave danger." The thought that the witnesses named Shubeilat as in any way associated with popped into the mind of one international observer was: the group! "Maybe that explains why 'ne",, ' evidence has to be furnished Then, when the prosecution tried to implicate Shubeilat daily!" in transport of weapons allegedly made in his car, witnesses testifiedthat a) Shubeilat lent his car out readily to friends in Dramatic retraction need; b) the trunk of his car, with a broken lock, could be The highpoint of the carefully planned, but rather clumsi­ opened without use of a key; and c) the parliamentarian could ly performed, drama came on the third day of the prosecu­ not see what was going on in his garage from the windows tion's case. Taking the stand was Mohammed Moghrabi, one in his office. Conclusion: Weapons could have been planted of two brothers who had provided ample testimony during in his car unbeknownst to him. the investigation alleging that, not only Qarrash, but also As if to illustrate the ability to plant weapons, Major Shubeilat were leaders of a group called the "Islamic Libera­ Hijazi made the surprise announcement at the conclusion of tion Front." Since Moghrabi appeared very exhausted and the opening session, that-lo and behold-a new cache of quite reticent in the courtroom, Prosecutor Hijazi took his weapons had been found just two days earlier, in the home of written deposition and proceeded to read it aloud to the court. Ayoubi . Not only weapons, but photographs of the French, Moghrabi, it appeared, was in prison for having spied for American, and British embassies had been found. Major Israel. After the text had been read, Colonel Faouri asked Hijazi explained proudly that Ayoubi, interrogated again the perfunctory question, whether these statements were his.

54 International EIR October 23, 1992 Mogbrabi shocked the court by answering, no, that it had all Libya. Qarrash wants to go, as "deputy secretary general"­ been lies. When asked to explain, he said that the testimony of what, is not said. Or: Qarrash speaks to someone named he had given (which implicated Shubeilat) was deliberately Khaled and says, "Laith is working in Jordan-me and Laith, false. Again, he was asked why. "I lied because of a promise but Laith is essential"-to what, is not said. And: "Laith has that my sentence would be reduced from 15 years to 10 information" and "All information 1s with Laith." Another years." He neglected to name the person or persons who tape has a voice of Shubeilat swearing against the Parliament, made the promise, and did not explain why he had decided afterhe had leftthe body in protest over a political matter. to reveal this in court. He was whisked away, and is to be This tape was to substantiate charges of slander against the prosecuted for lying. (The next day, bright and early in court, Parliament. In another bugged phode conversation, Shubei­ however, Major Hijazi announced that Moghrabi had yet lat is heard objecting to statement$ made by Mr. Chalabi against changed his mind, in prison, and had upheld his (former banker, now Iraqi opposition figure); Shubeilat's original deposition!) position is in defense of Iraq and Jordan. This tape was The prosecution had overruled objections by Shubeilat's supposed to substantiate charges tqat Shubeilat had under­ defense lawyer Bakr,that the witness, being imprisoned for mined relations between the two co�ntries. a capital offense, might not be the most credible. Now, what­ The most revealing statements, on the tapes are those ever credibility the prosecution's witnesses had, was being taken from public speeches attributed to Shubeilat. Talking ripped to shreds by the witnesses themselves. on May 12, 1992 to the University of Jordan Alumni Club, The overall conduct of the prosecution was under attack. he is quoted as criticizing "the new world order and the Arab The day after the Mossad agent's dramatic retraction, the regimes which endorse it." He attacks the West, especially prosecution introduced 13 audio cassettes containing re­ the United States, for "exploiting the resources" of the Third cordings of wiretapped telephone calls, plus two public World. "Our leaders will not be partof the new world order, speeches by Shubeilat. The defense argued eloquently if there was pressure from the people," he is heard saying. against the introduction of the tapes, on the grounds a) that "Our leaders monitor all those wh oppose the new world the bugging had been done on orders of the GID, not the order." Furthermore, he says, "Everybody who remains si­ prosecutor; and b) that wiretapping was a violation of consti­ lent over this new world order is a partner in the crime." tutional rights. Another lawyer on Shubeilat's defense team, The possibilitiesare two: Eitherthe statements are not those Zuhair Abu Ragheb, produced extensive material from Jor­ of the defendant or, if they are, they constitute no crime. danian and international law to uphold his contention. He The final piece of material evidence presented by the also noted, "Jordan does not have experts who are capable somewhat shaky prosecution was � photo album. This was of analyzing voices," indicating the fragility of any testimony to prove the charge against Shubeilat that he slandered His regarding the tapes. To justify the use of material illegally Majesty the King. The photo is of a destroyed house, with a taped, Major Hijaz used the sophistic argument that since well-known quote of the king, regarding "building the na­ there was no law on the books which explicitly rejected the tion." It is signed by "Sami Al Ajrab," but the court's hand­ use of wiretaps, it was legal. He went further, citing as prece­ writing expert testifiedit was in Shubeilat' s script. The expert dent an article in the legislation of Syria (hardly a model of said he had not tried to find the person, since the handwriting democracy) permitting both telephone bugging and intercep­ elsewhere in the album was all Shubeilat's. The expert made tion. As for the fact that intelligence agencies rather than the one further, very revealing statement. He said, "If I like a court had ordered the taps, Major Hijaz said a "specialized poem, I would write it down and writethe name of the poet." prosecutor" had been involved. Earlier, the court had said In other words, if the handwriting were the defendant's, it that the GID officerconcerned was simultaneously a prosecu­ was a quote made by a person from theJordan Valley, whose tor of the State Security Court. name is penned underneath. The person, according to earlier statements by Shubeilat, was a citizen from the Jordan Valley Inaudible, static-filled tapes who was thus lodging a protest. One would have thought that the material on the tapes Again, regarding the evidence, lit either does not belong were crucial, with damaging content for Shubeilat. When, to the defendant or, if it does, constitutes no crime. however, the controversial evidence was finallyplayed to the The prosecution takes up its case on Oct. 18, after which court days later, what was revealed was ludicrous. Technical­ the defense may have a chance to present witnesses and ly, the tapes were so badly disturbed by static at times as to evidence. Shortly thereafter, the case will be wrapped up. be inaudible. Defense objections that they could have been Convictions are expected for all, especially Shubeilat, the doctored, cut or spliced were brushed aside with the explana­ main target of the operation. What :will happen thereafter is tion, were it so, then the expert Khaled Maqdadi, a sound an open question, one which is occupying the minds of the technician from Radio Jordan, would have said so. politically excitable Jordanian elite. Will His Majesty the The tapes included "proof' such as the following: Qar­ King intervene, to declare a pardoIlj? If so, the magnanimity rash and Shubeilat discuss which would attend a meeting in of the reigning monarch would againbe celebrated.

EIR October 23, 1992 International 55 Will the Communist Party take China down with it? by MaryM. Burdman

I The world's biggest secret society, the Chinese Communist Prime Minister Li Peng is too well known as the enforcer Party , is holding its 14th Party Congress the week of Oct. 12 of the Tiananmen Square massacre to survive long without in Beijing. There is one issue dominating the proceedings, Deng's patronage. Deng has no: successor. which is how the party, led by the "Gang of Ancients," Meanwhile, the Gang of A�cients is aging fast. Only six the octogenarian survivors of the 1949 Maoist revolution, is remain: Deng, Chen Yun, Yang Shangkun, 86, Bo Yibo, going to keep its stranglehold control over the 1.2 billion 85, Peng Zhen, 90, and Wang :Zhen, 85. Already this year people of China. the relative youngster Li Xiannain died at 83, along with The "reform" faction led by 88-year-old Deng Xiaoping the last of the revolutionary marshals, Nie Rongzhen; Deng thinks this can only be done by allowing a small percentage Yingchao, the widow of Chinfs long-term Premier Zhou access to more food and consumer goods; the "hardline" Enlai; and one of the biggest liars of the Communist Party faetionof 87-year-old Chen Yun fears that Deng's loosening regime, 81-year-old re-writer of history Hu Qiaomu. of state control will bring the whole edificedown . For histori­ The comment of one observer, the New York Times's cal reasons, with implications far broader than the dictatorial Nicholas Kristoff, on the Congress was that "it looked like a ambitions of either, Chen Yun is probably right. nursing home behind the podiu�; but that is traditional for a The power struggle between these two factions broke out Chinese Party Congress." The youngest delegate, an Olym­ into the open in January of this year, when Deng Xiaoping, pic swimming gold-medal win�er, wrote energetically dur­ officially retired from all party and government positions, ing Jiang Zemin's two-hour sPeech, but most of the dele­ suddenly emerged to make a trip south to the "Special Eco­ gates, far older, were not able tbmatch his level of activity, nomic Zone" of Shenzhen, next to Hong Kong, and later Kristoff noted. visited the Zhuhai SEZ near Macao and Shanghai. Deng's They sat there reading the 'speech-which they had all method of intervening in China's national politics was not already read-along with Jiang! when it came near to a point unique; Mao Zedong launched the lO-year holocaust of the where they must applaud, their brows all furrowed together Cultural Revolution by going to his radical power base in with the effort to get the timing right, but all seemed to Shanghai to outflank his party opponents in Beijing. succeed in applauding on cue. : The Ancients suffered a setback: Three Congress dele­ Can Dengism survive Deng? gates were so old, they died after being elected, so that in­ Although Deng's "reform and opening up" forces appear stead of having 1,992 official delegates to match the year, to have taken over for the moment, it is well to remember the Congress has, curiously enough, 1,989-a number not the last Party Congress in 1987. At that time, then-Party likely to please Deng Xiaoping: To prevent further such un­ Secretary Zhao Ziyang, Deng's protege, spoke of opening fortunate events, three ambulances and a firetruck are parked up and political reform; two years later, Deng ordered troops outside the hall, fully equipped with oxygen tanks and cardi­ to slaughter China's students protesting the corruption of the ac defibrillators in case of heart attacks. brutal party aristocracy in Tiananmen Square. While "Deng­ ism" may prevail for the moment, the real issue is if Dengism China on the brink can survive Deng. Where does this leave China? On the edge of the abyss, Although the old revolutionaries have not hesitated to wrote journalist Zhang Weiguo of Shanghai, now under shower privilege and position on their families, officialpoliti­ house arrest there, in an article published in the Paris daily cal heirs tend to meet bad ends. CurrentParty SecretaryJiang Liberation Oct. 13. Political reform is essential now if China Zemin, who replaced the ousted Zhao in 1989, has already is not to lose perhaps its last chabce to avoid total social chaos been denounced by Deng as an inadequate leader; Deng's and breakdown, Zhang wrote. While the former U.S.S.R. earlier heir apparent, Hu Yaobang, was ousted in disgrace has lost its central governmentand been dismembered, those before his death in 1989. who visit the Community of Independent States agree that

56 International EIR October 23, 1992 civil society remains intact there, because the changes in the storage, transport, and distribution capabilities. Even the U.S.S.R. did not destroy the social order. This happened Dengists are getting worried that the economy is "overheat­ because of the raising of the civil consciousness of the popu­ ing"-which means choking on its inefficiency and lack of lation, and the ongoing strengthening of social institutions infrastructure and raw materials. and the (relative) freedom of the press. Would this be true of While China's industrial output value is rising in the China? range of 20%, what this really amounts to is tons of shoddy, No, say those few who dare to speak in private about the unsaleable junk piling up in warehouses. future. In China, the collapse of the governmentand division Yet, Jiang Zeminproclaimed at the Party Congress Oct. of the nation would plunge the nation into chaos; society 12: "Practice in China has proved that where market forces would collapse at the same time as the state. In Zhang's view, have been given full play there the economy has been vigor­ this is because, since 1949, the successive campaigns against ous and has developed in a sound way. We must continue to China's intellectuals have snapped the chain of traditional intensify the market forces." But while Jiang called for a culture, and 10 years of Cultural Revolution systematically "socialist marketeconomy ," his statements on politicalcon­ perverted moral values. Chinese society rests entirely under trol made clearwhy he emphasized the "socialist. " the Communist Party and the traditional Chinese family; all The party must reign supreme. '�It would be absolutely independent social institutions are lacking. wrong and harmful for anyone to doubt, weaken or negate Those who are informed think that Mao Zedong held the party's positionin power andits l�ading role," Jiang said. the entire nation hostage in order to impose his personal "Without political and social stabili�, any attempt to carry dictatorship. His words, "Without the Communist Party, out reform . . . and to promote economic development would there would be no new China," means actually, "without be out of the question ....We must adhere to the Four the direction of the Communist Party, the body of Chinese Cardinal Principles [of Chinese conununism] and resolutely society will disappear. " It is thus that the population is inhib­ eliminate all factors that might lead to unrest or turmoil. " ited from their search for political reform, and gives the CP In September, the CP Politburodistributed its "Document the "legitimacy" of it� power. Number Seven" to provincial and military leaders. The plan If events similar to those in the Soviet Union in 1991 demands much-heightened security in China's cities, to pre­ were to unexpectedly happen in China tomorrow, according vent any demonstrations or even any �atheringsby university to Zhang, the country would lack the civil and religious students, and to ensure that disconteqt among workers is held resources and social institutions to deal with them. Today, in check. one can say that the CIS nations, if they can survive the throes It is an irony, that Document Seven demands that the of conversion to a market economy, see the light at the end authorities focus on the Special E(:onomic Zones, which of the tunnel. Not so China. Deng so proudly patronizes, as place� where thereis a "chaot­ The CP refuses to accelerate political reform for basic ic security situation," which must be attended to this year liberties and creation of social institutions, which could pro­ and next. vide the nation's intellectual elite with a podium fromwhich to reestablish the national direction and moral values; it once Security problems again is risking that a golden opportunity will have been lost. There have been many reports from China in the past The opportunities for political reform are becoming more months of industrial workers striking� occupyingtheir factor­ and more rare, and briefer and briefer. History will not give ies, assaulting and even killing th,ir bosses, and staging China another 5,000 years. There is no time to wait, Zhang violent protests as "reforms" of the run-down state heavy concluded. industries threaten them with unemployment and home­ lessness. In China, housing, health fare, and adequate food 'Free market' chaos all depend on having a workplace; kiqking redundant workers It is to this life-and-death crisis, that Deng Xiaoping pro­ out of their jobs means they lose all. poses Thatcherite "free market" lunacy as a solution, the Document Seven states that Chirij.must "prevent security same lunacy that is now destroying Great Britain. Although problems from turning into political events." Security must China's free marketeers, fearful of social unrest in a nation be strengthened in factories, mines, and oil fields, the docu­ of 1.2 billion people, are extremely cautious-there has been ment states, and riot squads, fast-response units, and new no overnight imposition of "shock therapy" as was done in command centers for security forc�s must be set up in all Poland, in Deng's China--continuation of the current "re­ large and medium-sized cities. "The legal authorities must forms" will spell disaster. strongly supportenterprises as they deepentheir reforms and Deng's free market means, in short, opening up coastal change the structure of their mana$ement ....[We must] "concessions" to build cheap-labor, cheap-export light indus­ be alertto the appearance offactors that could lead to instabil­ tries, in a nation whose infrastructure is so primitive that it ity and prevent people with ulteriormotives from stirringup wastes a full 30% of its annual grain crop due to lack of workers to riot," the document said.

EIR October 23, 1992 International 57 Bosnia expires under the British knife

What motivates a policy to let Bosniansbe killed en masse. and to engulf Germany. Austria. and Italy with rfifug ees? Katharine Kanter reports.

A year or two back, Lyndon LaRouche remarked that the with no enforcement clause: England and France claimed difference between a common criminal and a satanist, is that that were the resolution enforced, the Serbians would retali­ the criminal will steal or kill because he wants money. The ate upon British and French convoys-i.e., although the satanist will commit a crime because he actually gets pleasure Republic of Bosnia could be saved by an air blockade, this from doing evil. That is exactly how the British ruling classes is not worth the life of one British soldier. have dealt toward Bosnia. Throughout the "peace" farces at London and Geneva, When Bosanski Brod fell in early October, the London Bosnian President Alija Izetbegovic pleaded in vain for the Guardian's diplomatic correspondent Hella Pick spoke with right to buy weapons, whereas, as Prof. Dr. Ulrich Fastenrath "senior sources" close to Cyrus Vance and Lord Owen, at of Cologne University wrote 0111 Aug. 11 in the Frankfurter the so-called peace talks in Geneva. It was understandable, Allgemeine Zeitung, to deny Bosnia the right to defend her­ these aides said, that "the Serbs would want to secure a self is a grave breach of international law. When it was corridor to Krajina before winter sets in. If it makes the Serbs proposed in the U.N., again by Muslim states, that the arms fe el more secure, possession of Bosanski Brod might act as embargo against Bosnia be lifted so she could defend herself, a spur toward political settlement." Vance and Owen, they the British and their American friends blocked it, to the de­ said, did not express "any special concern" when the city gree , that the Croatian government has been forced, after fell. Owen's qualification forthe job, according to the Daily the Americans leaked to the pressthat they had "tipped off Telegraph, is that at 21, he toured "Yugoslavia" in a Land Tudjman," to impound aircraft landing in Zagreb with weap­ Rover named "The Bugger," an insider's term of contempt ons to be transshipped to Bosnia. for the Bosnians which relates to their Bogomil past. But what about the blockade against Serbia? Well, ac­ Now, what actually happened when Bosanski Brod fell? cording to a Guardian front-page storyOct . 8, an erase button It, like Slavonski Brod across the river Sava, lay under piti­ on a Whitehall computer is activated every 28 days to delete less bombardment from the Serbian Air Force and heavy all information on those Brits who break the sanctions against artillery for several months, although the world's press, and Serbia! Customs and Excise dfficials told the paper: "We also the Croatian government for some reason, said nothing don't keep the information on sanctions breaking because of this. Ninety percent of the population fledbefore the rout, our principal client, the Central Statistical Office, intends to into Croatia over the Sava. During the last hours of Bosanski keep Yugoslavia as a single country until next year. Figures Brod, there was hand-to-hand fightingin the desolate, bomb­ will be available from next year when the office will have ed-out streets. Hundreds of Bosnian and Croatian men and a new computer system to record permanently individual youths fell defending the city within those few hours . As republics." The Labour Party's trade spokesman, Robin disaster loomed, old people and women emerged in rags Cook, was told by the Department of Trade that British im­ from the cellars, half-starved after months of siege, and ran ports from Serbia jumped from £9.7 million in June to £ 10. 89 alongside fleeing soldiers over the bridge into Croatia, car­ million in July, fully two months after "sanctions" were im­ rying nothing but a kerchief with a few belongings, a birdcage posed. By August, British exports to Serbia of what is, in or a small dog. Then the Serbians blew the bridge up. Thou­ fact, logisticS for the war effQrt, i.e., telecommunications sands more were trapped on the Bosnian side of the Sava. equipment and gasoline, had risen sharply. What will happen to them only God knows. On Sept. 12, the Guardian reported on its front page that in the last year alone, thousands of Serbian businesses have The farcical 'no-fly zone' moved to the "former" British protectorate Cyprus: "Serbian When it was proposed in September in the United Na­ government, business, and private funds have flooded to the tions, by the Muslim nations, that a no-flyzone be imposed offshore banking haven," in the order of several hundred to protect Bosnia from Serbian air raids, after much Anglo­ million dollars. "Exploiting the island's financial secrecy, French obstruction a resolution was passed to that effect, but trade from Cyprus to the countries bordering Serbia is now

58 International EIR October 23, 1992 worth about $10 million a week." One European banker told Fact is, that in the last 12 months, Germany has taken the press that every time his bank tried to stop a transaction 400,000,perhaps 500,000, refugees from Bosnia and Croa­ they suspected would involve breaking sanctions against Ser­ tia; the two tiny nations Austria and Switzerland have taken bia, within 48 hours the Serbian client would demand the between 70,000 and 100,000 each. �fficial figures for"Yu­ relevant amount be sent to a Cypriot bank. In August, Foreign goslavians" in Great Britain are 1,300, but British journalists Secretary Douglas Hurd said Cyprus should be "watched," who investigated believe even that figure is a fraud: About but London has given no recommendations to the Cypriot half are probably Serbians in the United Kingdom for busi­ Central Bank since that speech. ness or tourism. The British government, the only one not to The head of Serbia's biggest offshore operation in Cy­ sign the Open Borders clause of the J993 European customs prus, Beogradska Banka, is Borka Yucic, 66, described by agreement, has been invoking the D�blin Agreement on Im­ a prominent London banker as a "dear little soul." A perfervid migration to send back Bosnian and Croatian refugees to Communist, she is said to be thick as thieves with Serbian Germany and Austria. Under that pact, a European state can dictator Slobodan Milosevic. Before moving to Cyprus in lawfully return refugees to the first country they arrived at 1988 to take over Beogradska, she was head of the bank's and demand they seek asylum there. The clause was plainly London office, and then became chairman of the London­ written for and by the British, as theirs is the only major based Anglo-Yugoslav bank. In 1988, Beogradska' s balance European country on an island. sheet showed a mere $ 126 million in assets. It now shows The British are proceeding accordingto plan, and part of $634 million. the plan is for Germany, Austria, and Italy to collapse under In May of this year, the Croatians and Bosnians signed a the burden of "ethnically purged" Bosnians, Albanians, and defense pact. Forthwith, England and France made it known Croatians. It is estimated that at least 5 million people will to the Croatians, that unless Croatia withdrew her regular have fledinto westernEurope by early next spring, if the war troops and tanks from Bosnia, sanctions would be slapped proceeds into Kosovo and Macedonia as Fitzroy Maclean down on her. The Croatians pulled out. By July, Carrington would,have it: '," was openly saying that peace would not come to Bosnia Is there any chance, at least, that !Wemay judge the Serbi­ unless the republic were "de facto partitioned . . . there must an leadership for war crimes? The Bosnian Ministry of De­ be a stalemate, such as if the Serbs thought they had seized fense, from its embattled HQ in Sarajevo, has set up an enough land, or exhaustion when one side, probably the Institute to Investigate War Crimes, led by Gen. Mahir Zisko Muslims, can no longer fight. We are not at the stage of and is demanding trials on the Nuremberg model against exhaustion yet" (Carringtonto the Telegraph, July 24, 1992). Serbia. When this was raised Oct. 6 in the U.N. Security By September, northern Bosnia was lost. Council, England, and France quashed it, on the grounds that "communication has to be kept Up with the Bosnian Serb 'If you want a Bosnian,.go to Yugoslavia' leadership. '�, The British governmen�has just refused to make Those few in England who oppose the policy have been public its official reportto the V. N. cpnSe rbian war crimes as shut up. The best-known is Lady Miloska Nott, wife of the the Foreign Office feels "this would only.precipitate further former defense minister. A Slovenian by birth, she, in Au­ atrocities" by irritating Serbia. gust, had given the leading dailies a series of interviews Although the French government has shown itself keen attacking British policy; it was then intimated to her that to polish the British boot, the chief instigator of this war funds would "become unavailable" for her Balkans charity designed to engulf all of Central Europe is England. In recent unless she stop the polemic. This news service learned from months, the Daily Telegraph has taken to publishing com­ prominent British-bornCroatian s, that the editors of the lead­ mentaries on the Balkans by one An1k>nyRoberts , the biogra­ ing papers will no longer print their letters protesting British pher of Lord Halifax. "Britain owes :nothing to Yugoslavia," policy; the Balkans war has become a "page 9 story ." Foreign he writes. "No matter how hideou$ the massacres, neither Office sources quoted in the Guardian gave as the reason for Croatia nor Serbia are 'Worth the healthy bones of a single the blackout, that the Serbianshad "reacted very angrily" to British Grenadier .. ..It is hard to $ee after the self-destruc­ British press reports from Bosnian eyewitnesses of what was tion of the Yugoslavian tourist industry what possible inter­ done to them in the Serbian camps. Dixit the Guardian: "This est, other than academic, Britons could have in what goes on led the Foreign Officeto conclude that it would be unwise to there." publish details of further atrocities." Or, as the Telegraph's editorialist begged the question This past August, a well-known woman journalist, Lynne on Aug. 4, 1991: "A civil war in YUgoslavia may be bad for Reid Banks, called the Foreign Office and the Home Office part of Europe, but would it be bad for our part?" and asked whether she could put Bosnian refugees up in her The writing is on the wall for continental Europe. If we country home. "We are not encouraging refugees to come still refuse, in the name of "'consensus politics," to recognize here," said one high official . "If you want a Bosnian , you'll the specific quality of evil in the British elite, and crush it, have to go to Yugoslavia [sic], and get one yourself." we will go the way of Bosnia and be destroyed.

EIR October 23, 1992 International 59 Disinfonnation from the Stasi's psywar kitchen: the KGB and HVA

Part 2, by Anno Hellenbroich

In his explosive interview with the Swedish journalJournali· Union jointly build a defensive shield against nuclear mis· sten at the end of August, Dr. Herbert Brehmer, a specialist siles, what became known as the Strategic Defense Initia­ in disinformation who used to work for the communist East tive-'--was given due commentary in the East bloc press. This German intelligence service, the Stasi, says: "Three days led to increasingly crude smelU'$ and slanders� all the way to after the assassination of [Swedish Prime Minister] Olof Pal· Moscow's outright demand in 1986, that the U.S. prosecu­ me [on Feb. 28, 1986] , Department X [of the HVA, the torial authorities take up the "LaRouche case." Stasi's Main Reconnaissance Administration], received or· Hence it is not surprising that ·such disinformation cam­ ders to intervene into the investigations being conducted by paigns were being cranked up by the HVA. · the Swedish police. The department was to determine, from Brehmer's statements affor� us a rare inside look at the the standpoint of marxist social analysis, who the murderer way desinjormatsia operates. For even now, three years fol­ or murderers of Palme could have been." Without leaving lowing the collapse of the East German communist regime, his desk, Lieutenant Colonel Brehmer had proceeded to draft and one year after the upheavals in the former Soviet Union, the thesis "that only right-wing extremists could possibly documents and statements relating to cooperation between have committed the murder," and then launched the lie in the the HVA and the KGB , especially in the field of disinforma· internationalpr ess, that Lyndon LaRouche and his European tion, are still very difficult to come by. One reason for this, co-thinker party, the European Labor Party (EAP)-which is that the HVA was "permitted" to dissolve itself, so that in the meantime had been labeled "right·wing extremists"b y today only a small quantity of dfjx:umentary material is avail­ the media-were responsible for the murder. able; even the HVA's electronic data banks were destroyed Brehmer went even further: "There were various advan· with the consent of the authorities who dissolved it. More­ tages to taking particular aim at the EAP." First, in order to over, one repeatedly finds thatwhen the question of collabo­ steer attention away from certain "innocent left-wing ration with the KGB comes up. in the course of discussions groups." "But beyond this, the media and the police would with individual HVA officers , the discussion partner usually

mutually influence each other to more closely scrutinize the falls silent. EAP and other right-wing extremist groups. And it would But in fact the Stasi, officially known as the Ministry for also be possible to tie the West German security police, the State Security or MfS , was practically an identical twin of Verfassungsschutz, into the murder plot. The head of the the KGB . In the immediate postwar years, the Soviet military Verfassungsschutz happened to be a close relative of one of administration vigorously backed the formation of the Stasi. the EAP's West German leaders." Brehmer is referring to The MfS security apparatus, which came into existence in Heribert Hellenbroich, who until 1985 was president of the 1950, was closely intermeshe4 with the KGB 's outposts. Bundesamt fur Verfassungsschutz (BfV), and who for six Everywhere, on the most diverse levels, one could findKGB weeks was president of the West German foreign intelligence liaison officers who automatically received on their desks all service, the Bundesnachrichtendienst (BND), before the the materials gathered by Stasi operatives. governmentof Chancellor Helmut Kohl sent him into retire­ It has been said that at least 80% of the information which ment because a highly placed BND colleague of his, Tiedge, the Warsaw Pact procured in West Germany was the result had defected to the communist German Democratic Republic of the HVA's espionage work. In early 1990, competent (G.D.R.). observers estimated that the �ter proportionof the HV A's 4,000-5,000 agents had found new employment with the KGB versus LaRouche KGB , following transfer negC)tiations conducted through This assignment to spread disinformation about the EAP, HV A chief Markus Wolf. Othersspoke of 400-500spies who was entirely in keeping with the policies of the HVA's "big were still undercover in Germany, and who had offered their brother," the Soviet KGB . Already at the end of the 1970s, services to the KGB . the Moscow center had seen to it that LaRouche's policies­ The fact is that, in addition to those "reconnaissance especially his proposal that the United States and the Soviet specialists" who were still active in early 1990, many more

60 International EIR October 23, 1992 of the 1,000 ex-G.D.R. citizens who are still active in other countries, and who were only allowed to travel abroad after the most intense scrutiny-by the MfS , must now look around for new employment. Some of them have offered theirtalents to western intelligence services. A few have gone into early " retirement or are ,currently unemployed. (It ,may be of no small importance for understanding the KGB's role in the period of the collapse of communism, that in 1988 it appoint­ ed a new chief for the KGB's operations in the G.D.R. to replace Shumilov: Gen. Lt. Gennadi Titov, who as a general major in 1984 was reported by the world press to be the controlling officerof the exposed Norwegian KGB spy Arne Treholt.) "

Foreign exchange operations A large portion of this information has been covered up again. It concernsan operation which the German public had previously known alm0st nothing about: the international network of firms built up as a top-secret mission by HV A "Special Operations Officer" (OibE) Alexander SchaIck­ ' Golodkowski, the G .D.R. 5 top procurer of foreign ex­ change. SchaIck.Golodkowski jumped over to the West just Swedish Prime Minister Oloj Palme and hiswif e participate in a in the nick of time, iIL order to tell the BND and the CIA a May Dpy ra�/y in 1983 . Three years later, Palme was assassinated, and the KGB and Stasi blamed it on Lyndon few things about the collapsed G.D.R. But the inability, and LaRouche and his associates . also the unwillingness which has qeen shown to put SchaIck­ Golodkowski on trial, shows that he is still holding a trump card: Because of their own personal involvement, western Army's military intelligence service. We have very little hard politicians have been apparently unable or unwilling to put information on this, even now. KGB liaison officers were befere the public;.the' truth about western collaboration with working at the MfS headquarters on Normannenstrasse and the East Genrlancommunist party' (SED) leadership. To that in its 15 state administrative offices. Much collaboration re­ extent, the title of a recently published book, The Schalck­ sulted from the official agreements made in the 1970s be­ Golodkowski Empire Lives �, is all too true. A few things, tween .Moscow and its "fraternal socialist countries." for example, have become known about the East German A high point was reached in 1979, when Moscow set up firm IMES , such as its arms shipments to Iran as part of its SOUD central computer, which the HV A continuously the Iran-Contra affair, in wl1ichU.S. Vice President George fed with personal data. Aside from the G.D.R. and the Bush participated." U.S.S.R., six other "fraternal socialist countries" were The West's dealings with the SchaIck-Golodkowski em­ hooked into the system: Bulgaria, Hungary , Cuba, Mongo­ pire is a symbol of its dealings with the entirety of the HVA's lia, Poland, and Czechoslovakia. Romania's Securitate was espionage activities, The virtually complete destruction of not considered reliable enough, and was excluded. The 1980 all documentation of the' HVA's activities was apparently Moscow Olympic games were used as a convenient pretext one of the secret conditions agreed upon in the "four-plus­ for establishing this data base: It would aid in "averting the two" talks on Geiman reunification, because it was felt that danger of terrorist attacks." In the course of its last 1 0 years, an intact account of the activities of the MfS ' s secret service the MfS fed personal data into this computer on 15 categories would reveal too much of the postwar political architecture. of people, such as collaborators and agents of opponent intel­ ligence services (ca. 17,600) , collaborators with centers of Moscow's best espionage jobs ideological diversion (ca. 3,000) , hostile correspondents (ca. On top of this comes the fact that in addition to the HVA's 3,750), terrorists, hostile diplomats, hostile activists, and direct ties, the former G.D.R. exhibited the greatest depen­ undesirables (ca. 20,600) . By the time of the revolution in dence abroad on the KGB and the GRU (Soviet military 1989, approximately 75,000 of such personal profiles had intelligence). In Berlin-Karlshorst, one KGB branch office been fed into this computer (which is still available to the employed an average of l ,000 people, most of them engaged KGB today) and have been neither destroyed nor revealed to in western reconnaissance. In Potsdam-Cecilienhof, there the Bonn government. was a KGB counterintelligence unit with about 100 staff. This has great significance, because the indictment hand­ Some 100 KGB agents also worked directly with the Red ed down by the federal prosecutor's officeon Sept. 25 against

EIR October 23, 1992 Internationa� 61 Markus Wolf accuses him of having committed treason and movement. Pankin, along with his close friend anderstwhile bribery, over the many years he functioned as head of the head of the Soviet news agency TASS, Sergei Losev, consti­ HVA, during which time his close collaboration with the tuted the central coordination point for disinformation against KGB played a special role. We must assume that the over­ the West. Typical of this was a book authored jointly by whelming majority of the personal data input by the MfS into Losev and Vitaly Petrusenko in 1975 entitled A Dangerous the Moscow computer relate to people who are currently Game: CIA and the Mass Media. Six pages of this book residing in Germany. are devoted to LaRouche and the philosophical organization founded by him, the National Caucus of Labor Committees The model: KGB 'desinformatsia' (NCLC). Citing the German newspaper Die Tat-a regular Department X was created in 1966 at the behest of Mar­ pipeline for Stasi dis information-the NCLC was presented kus Wolf on the Moscow model, and in the following years, as anti-communist and CIA-controlled. The Soviet disinfor­ under the resourceful Colonel Wagenbreth with his 60 mation specialists went so far as to claim that former CIA agents, it caused much evil mayhem in West Germany. Un­ director William Colby and his assistant Ray Cline had "ad­ der KGB chief Aleksandr Shelepin, the "Desinformatsia" mitted" that they had financed the NCLC's newspaper New section had been reorganized into Department D. Defectors Solidarityto the tune of $90,000, and that 80% of its editorial report that after Stalin's death, many had wanted to develop staff were CIA or FBI agents. From then on, this counterfeit a new "information strategy" toward the West. This in fact report was rehashed over and over, especially in news media occurred, under the close supervision of the Information with "left-leaning"reader ships. Committee of the Communist Party Central Committee, the GRU, and the two main KGB departments for "active mea­ HV A propaganda against the SDI sures" (Reconnaissance and Counterintelligence). Some of the documents found during the breakup of the Colonel (later General) Agayants was appointed head MfS graphically reflectthe ultimate objectives of the Stasi's of the new "Disinformation" Department. His deputy was political reconnaissance, especially regarding what the Sovi­ Colonel Grigorenko, a specialist in domestic counterespio­ et Union was demanding of it. For example, a commentary nage and in operations inside emigre organizations. Another on the February 1979 guidelines on the scope of the HVA's important specialist for Germany, Austria, and NATO was operational work reads in part: ,"in order to prevent any sur­ Col. Vasily Sitnikov. An important arm of the Central Com­ prises, smash opposing bases in the G.D.R., gain knowledge mittee's political direction was the InternationalDepartm ent, about enemy centers and carry out countermeasures, support led at the time by Boris Ponomaryov. the policies of the SED . . . to let greater support arrive from One year after Yuri Andropov' s accession to power in the U.S.S.R." 1968, Department D was transformed into Department A. In Workbooks of trainees in Department XV (Espionage) the early 1970s, its status as a "department" was upgraded show the following goal orientation: In 1982, the trainees to that of a "service." At the same time, Department V, were informed that there existed "a heightened war danger" responsible for "wetworks"-murder, kidnaping, and sabo­ and that therefore top priority ishould be given to the fight tage-was reorganized and made into an adjunct of the "ille­ against disarmament treaties. The socialist camp was being gal" arm of the KGB , the Main Administration S. Depart­ endangered "by the use of laser beam weapons." ment A (Disinformation) and Department V (Murder) were now brought together under the First Main Administration Target: EAP of the KGB . Thus, no one should be amazed to findthat a 1986 direc­ One prominent player in the dis information campaign tive on the HVA's upcoming priorities shows the European against LaRouche and the EAP, as was reported in an October Labor Party near the top of the list, along with the Greens 1986 EIR Special Report on the Palme assassination, was and the Council for an Undivided Germany. This task was Boris Pankin, the Soviet ambassador to Sweden. From 1973- assigned to Department II of the HVA, Responsible for Polit­ 82 Pankin was director of the Soviet "copyright agency" ical Parties, Organizations, and Churches in the Federal Re­ VAAP. His deputy was the above-mentioned Colonel Sitni­ public of Germany, under the leadership of Col. Dr. Kurt kov. This post was a convenient location from which one Gailat. could spread falsified information into the West via legal Those who worked with the EAP and its leaders such front organizations, without any fear of disruption. It was no as Mrs. Helga Zepp-LaRouche were not only victims of a coincidence that during the stormy phase of the past few worldwide disinformation campaign around the Palme assas­ years , Pankin was appointed ambassador to Prague, an im­ sination; they were also victims of the espionage which portant foreign outpost in the current efforts to reshape the Wolf's spooks from Department II were carrying out on Mos­ former Soviet empire. cow's behalf. Insiders report that down to the present day, Pankin har­ bors great animosity toward LaRouche and his political Next: Schalck-Golodkowski and his empire today .

62 International EIR October 23, 1992 Iraq's dying children: 'If this is thenew world order, \\That is Hell?' by Lydia Cherry

At a press conference in Rome on Oct. 3, former U.S. Attor­ ney General Ramsey Clark and Muriel Mirak-Weissbach of FIGURE 1 the Committee to Save the Children in Iraq accused the Bush Mortality in children under 5, before and after administration of war crimes and the killing of hundreds the embargo of thousands of innocent children. The well-attended press (number of deaths during given month) conference was convened to publicize a two-day "war 1,200 crimes" tribunal that followed in Naples, Italy. Clark made July 1989 the case that the Bush administration and Henry Kissinger 1,100 II had initially set up the conditions which led to the Gulf war, 1,000 • July 1992 and had then consciously pursued an embargo policy, still in 900 effect, to kill more innocents. Mirak-Weissbach warned of 800 the danger of a Thirty Years' War in the Middle East-an 700 eventuality which the war against Iraq and new operations 600 against the Kingdom of Jordan are designed to unleash. 500 A third speaker was Mr. Cornu of the U.N. 's Food and Agriculture Organization; he detailed the present crisis in 400 Iraq from the standpoint of the food supply situation and 300 health care. 200 The tribunal followed an investigatory visit to Baghdad 100 in September by six Italian parliamentarians, led by Roberto o Formigoni, a Christian Democrat. Eighty-eight members of Malnutrition Diarrhea Pneumonia the Italian Parliament have signed a resolution against the · Iraq embargo. Formigoni has announced that the issue of the Source: Iraqi Foreign Ministry. embargo would be placed before the Italian Parliament later in October. The tribunal opens during the same week that the Anglo­ Also from the Iraqi Foreign Ministry comes the news that American-controlled U.N. Security Council apparently de­ "within the past two years of unjust sanctions, many diseases, cided that not enough Iraqis had been killed, and made the such as kala azar, toxoplasmosis, brucellosis, and hemor­ decision to impound most of the country's oil-related assets. rhagic fever, which are common diseases in animals, have Iraqi leaders said the action would prevent them from buying infected a large number of the population in Iraq and have any food supplies. escalated in numbers of cases due to lack of immunizations and severe shortages in vaccines. These diseases have created The view from Iraq an epidemic and are of grave concern." "Life, or rather daily dwelling, is getting harder and hard­ As Figure 1 shows, mortality figures contrasting July er; we are in terrible need for blood administration sets with 1992 with July 1989 indicate an 808% jump in deaths from filters, sterile, and solution sets, sterile-in any quantity pos­ malnutrition among those under five years of age. Deaths sible, but urgently�" Hisham Tabaqchali, Iraq's ambassador from diarrhea increased 515%, with 142 deaths in 1989 con­ to Malaysia told EIR on Oct. 12. "About 1 million children trasted with 873 deaths last July. Pneumonia statistics reveal now are severely affected by malnutrition, according to a a 337% jump in mortality. report I have just received," the ambassador continued. The older generation in Iraq is not faring much better. "It "Now out of every 1,000 live births, 128.8 die [in the first is the lack of medicine, the ability to perform operations, year] ; if the embargo is not lifted, it is expected that this but also the state of anxiety, the state of horror, and such figure will rise to 200 by the end of this year." helplessness," Hisham Tabaqchali surmises. Deaths from

EIR October 23, 1992 International 63 - ty and mortality is difficult to assess, and the number of FIGURE 2 civilian casualties caused indirectly is likely to be underesti­ Mortality in adults over 50, before and after mated ....During the Gulf war, it was suggested that by the embargo using high-precision weapons with strategic targets, the Al­ (number of deaths during given month) lied forces were producing only limited damage to the civil­ ian population. The results of our study contradict this 600 589 claim." • July 1989 The study was given 15 lines of type in a wire service 500 report, and wasn't deemed newsworthy by major U.S. press . • July 1992 "But, then, it's old news ...the parades have ended; the 400 yellow ribbons have been taken down," noted syndicated columnist Mike Royko. Baseball and football stadiums have seating capacities of about 46,900, he notes. "So we might 300 try pict�ring one of these stadiums with every seat occupied by a chIld fiveye ars old or younger. ...Now , imagine that 200 somebody pulls a switch and sends a jolt of electricity into the seats and every one of those 46,900 noisy kids dies." 100 "Forty-six thousand nine hundred kids-give or take a few tots," he concludes. "So what color ribbon do we wear for that triumph?" o Hypertension Diabetes Malignant neoplasm Hisham Tabaqchali concludes that there is almost no gov­ ernment in the world trying to i tervene to keep this ancient Source: Iraqi Foreign Ministry. country from being razed to the ground. One exception is Sudan, "not a rich country; the Sudanese are having serious problems of their own, but they are trying." U.S. State De­ hypertension jumped 207%, contrasting July 1989 with July partment spokesman Richard Boucher on Oct. 7 blasted the 1992, among those over 50 years of age; diabetes deaths Sudanese for exporting beef to Iraq. "We think the govern­ jumped 337%; and deaths from malignant neoplasms jumped ment of Sudan should reconsider its transaction in light of 239% (see Figure 2). the needs of its own people," he said. Iraqi health officialsackn owledged in early October that "But it is the western countries and the continued actions because of the sanctions and the destruction of the country's of the United States whose behavior is unfathomable," Ta­ main syringe-producing plants, they are re-using syringes baqchaJi insists. "The U.S. participated in the [U.N.] Sum­ and steel needles, even though this may expose patients to mit of the Children two years ago; they adopted the resolution disease and infections. "In view of the chronic shortages in to protect, to take care of, to help children all over the world. disposable syringes, we have turnedto the traditional method What are the Americans doing? It was supposed to be credi­ of disinfecting by boiling water," Iraq's Health Ministry Un­ ble. What kind of a new world order are we seeing? If these dersecretary Dr. Shawqi Murqus told newsmen. He noted are the signs for this order-Iraq, Bosnia-what is Hell?" that Iraq had a modem syringe-manufacturing plant, 60 miles south of Baghdad, but it was destroyed by bombing from the anti-Iraq "coalition." "Iraq needs 30-40 million syringes a year. What we have received in the past two years is a drop in Documentation the ocean," Dr. Murqus said. He called what was happening a "health war." On Sept. 24 , the New England Journal of Medicine pub­ lished a study conducted by Dr. Alberto Ascherio of the Harvard School of Public Health and other independent re­ Harvard team documents searchers from the United States, Jordan, United Kingdom, devastation of Gulf war and New Guinea, paid for by the United Nations Children's Fund. The most ambitious such study conducted thus far, its conclusion was: In the first seven months of 1991, about The most extensive study thus fa r on the effe ct of the Gulf 46,900 more children died than would have been expected war on infant and child mortalityin Iraq, was conducted by to die on the basis of earlier statistics. In classic understate­ Dr. Alberto Ascherio of the Harvard School of Public Health ment, the doctors concluded: "War is never good for health. and paid fo r by the United Nations Children's Fund. The But the full effect of war and economic sanctions on morbidi- fo llowing report on the study is excerpted fr om the New

64 International EIR October 23, 1992 England Journal of Medicine, Sept. 24, 1992 , Vol. 32 7, No . 13, pages 93 1-936.

Little objective information is available about the effect of the economic sanctions, war, and civilian uprisings on the health of civilians ....All previous estimates of the effect of the war on health have been based on studies of selected population groups that may not represent the entire country. We reporthere the results of a survey of mortality conducted in a nationwide sample of households between Aug. 25 and Sept. 5, 1991. The survey was made independently of the Iraqi governmentby a team of internationalresearchers . . . . When the period afterthe onset of the war was compared with that before 1991, the relative mortality was 1.8 for neonates in the first month of life, 4. 1 for infants 1 to less than 12 months of age, and 3.8 for children 12 to less than Medics bring a wounded Iraqi child to Germany fo r treatment, 60 months of age. When these figures are extrapolated to through the initiative of the Committee to Save the Children in Iraq. As the Harvard research team reports, the casualties of the the entire population of Iraq , a similar increase in mortality war extend 'far beyond those caused directly by warfare." would have resulted in approximately 46,900 excess deaths among children under five years of age during the firsteight months of 1991. bargo) and the subsequent increase in mortality . The destruc­ The probabilities of dying in the firstyear of life or in the tion of the supply of electric power at the beginning of the first five years were 32.5 and 43.2 per 1,000 live births, war, with the subsequent disruption of the electricity-depen­ respectively, before January 1, 1991. In a cohort of children dent water and sewage systems, was probably responsible who were hypothetically at risk from birth to the age of five for the reported epidemics of gastrointestinal and other infec­ years , given the mortality rates prevailing after the onset of tions. These epidemics were worsened by the reduced acces­ the war, the probabilities of dying in the first year of life or sibility of health services and decreased ability to threat se­ the first fiveyears would have been 92.7 and 128.5 per 1 ,000, verely ill children. Increased malnutrition, partly related to respectively. the rising prices of food, may also have contributed to the An increased risk of death in 1991 as compared with the increased risk of death among infants and children. The effect previous years was seen for each region and each level of of the war has been greater among groups that had higher maternal education, except for children under one month of base-line mortality rates, suggesting that poverty and lower age in the central region. Regional differences in mortality educational level increased children's vulnerability to the that were present before the war were maintained or exacer­ crisis .... bated by the conflict. . . . The hypothesis that the excess mortality caused by the Information on the cause of death was available for 583 war was due to infectious diseases and to the decreased quali­ children (75.9%) . The age-adjusted mortality rate from diar­ ty and availability of medical care , food, and water is consis­ rhea rose from 2. 1 per 1,000 person-years before the onset tent both with the increase in the proportional mortality from of the war to 11.9 per 1 ,000 person�years after the onset of diarrhea and with the shift in the age pattern of mortality, the war. The age-adjusted mortality rate from injuries rose characterized by a lower proportional contribution of neona­ from 0.55 per 1,000 person-years before the war to 2.25 per tal deaths to mortality among persons under the age of five 1 ,000 person-years after the onset of the war. Before the war, years after the onset of the war. This pattern resembles that 20 .7% of deaths were due to diarrhea and 8.8% to injuries; observed in the less-developed countries, where diarrhea and after the onset of the war, the comparable proportions Iw.ere respiratory infections account for most deaths in infancy and 38 .0% and 7.2%. childhood. In this survey conducted in a representative sample of War is never good for health, but the full effect of war and Iraqi households, we found that infant and child mortality economic sanctions on morbidity and mortality is difficultto increased more than threefold in the period from January assess, and the number of civilian casualties caused indirectly through August 1991, as compared with the average rates is likely to be underestimated ....During the Gulf war, it during the previous six years . This increase corresponds to was suggested that by using high-precision weapons with an excess of about 46,900 deaths among Iraqi children under strategic targets, the Allied forces were producing only limit­ fiveyears of age .... ed damage to the civilian population. The results of our study Our data demonstrate the link between the events that contradict this claim and confirm that the casualties waof r occurred in 1991 (war, civilian uprising, and economic em- extend far beyond those caused directly by warfare.

EIR October 23, 1992 International 65 AndeanReport by Carlos Mendez

After Guzman, the 'moderates' acts of terrorism .. ..We 've had cas­ State Department agent and Senderologist David Scott Palmer es . . . of children killed because they says the government can negotiate with the "new" Shining Path. were sent into mined areas to detect mines, or children used as bombs." Bambaren warned that under no cir­ cumstances must the governmentgive in to the "diabolical" plan to kidnap children tc;>be exchanged for Guzman. This evidence of genocide not­ On the same day that Peruvian au­ 47 people in Huayllao, in the province withstanding, Palmer repeated the so­ thorities announced the life sentence of La Mar. The target was the town's ciological argument peddled by the of Shining Path's Abimael Guzman, self-defense militia, but they indis­ State Department and others that SL the U. S. "Senderologist" David Scott criminately assassinated men, wom­ recruits only because Peru is so poor, Palmer said in Lima that Guzman's en, and children, in many instances and dominated by a "white oligar­ capture "could lead to the emergence beheading and hacking them to death chy , " neglecting to mention that those of a more moderate Shining Path, with axes. SL continues to commit the who resist recruitment are terrorized which works more broadly among the very atrocities for which Guzman and or assassinated. population without resorting solely to his cohorts were sentenced to life im­ His lme is the same as that of the terror. " In other words, Palmer is pro­ prisonment: various indigenous groups that are or­ posing that President Alberto Fuji­ • conscious and premeditated use ganizing terrorist activities against the mori make the same type of deal with of children from 7 to 10 years of age quincentenary of the discovery of Peru's narco-terrorists as Colombian as "child-bombs"; America. Shining Path, he says, is "the President Cesar Gaviria has cut in his • assassination of Peruvian and most recent manifestation of a historic country-an arrangement approved foreign priests, nuns, and ministers, tendency" of indigenous resistance to by the U.S. State Department. for the "crime" of preaching Christian the Spaniards. In his 1972 doctoralthe­ Palmer, a former State Depart­ values; sis at Comell University, Palmer wrote ment employee, even went so far as • physical elimination, by the that the "lIispanic tradition" of lbero­ to suggest that Julio Cesar Mezzich, cruelest methods, of thousands of de­ America is "authoritarian, traditional, whom he knew when he lived in Peru fenseless peasants for refusing to join elitist, patrimonial, Catholic, stratified, in the late 1960s, might be the person them, and systematic destruction of hierarchical and corporativist." One of to head up the new Shining Path (SL) their few worldly goods; Palmer's thesis advisers was State De­ "moderate" tendency. • holding of "people's trials" to partment fixture Luigi Einaudi, cur­ Invited to Lima to address the physically eliminate their political en­ rentlyU. S. ambassador to theOrganiza­ Sixth National Private Enterprise emies; tion of American States. Congress of the business association • methodical and cold-blooded Palmer's solutions to Peruvian Confiep, Palmer took the opportunity use of explosive devices, such as car poverty, as he explained in his address to deliver the State Department's bombs, in indiscriminate acts of ter­ to Confiep, are the labor-intensive threat to the Fujimori government: rorism in urban areas; "micro-enterprises" which, he said, The country must returnto "democra­ • use of so-called annihilation are the onJy type of economic entities cy"; otherwise, he warned, there squads against businessmen and pub­ the "World Bank, and other interna­ might be a "revival of subversion." lic officials. tional organizations" will support. But subversion is already "re­ On Oct. 9, La Republica reported Except for a few loans recently dis­ vived." On the same day that Palmer charges by Archbishop Luis Bambar­ bursed by the Inter-American Devel­ made his remarks, SL killed four en of Chimbote, that over 200,000 Pe­ opment Bank and World Bank (only members of the Air Force, and one ruvian children had been abused and to guaranteethat Peru continues to pay civilian and two policemen in Lima. It killed by SL. Speaking in Geneva, its debt), the United States continues set off several bombs at the University Switzerland at a meeting of the U.N. to veto all economic and military as­ Park and another at the Camino Real Convention on the Child, the arch­ sistance to this besieged country, un­ shopping center, killing eight people. bishop reported that SL had set up der the charge that Fuj imori has not Moreover, on Oct. 12, it massacred youth committees "using children for yet restored "democracy."

66 International EIR October 23, 1992 Dateline Mexico by Carlos Mendez

PAN party splits reserve the right to' withhold from in­ The dissidents opposed the "infiltration" o/ their partyby ternationalbidding Japercentage of the purchase of goverjnment goods and Project Democracy and neo-liberalism. services, etc . Do ypu know what this means? That 50% Of government pur­ chases, or of Pemex or the Federal Electricity Commission, have to be In early October, some of the most Project Democracy. This is the "secret made from U. S. companies afortiori. influential leaders of the National Ac­ government" apparatus in which Oli­ It does not matter ifMexican compa­ tion Party (PAN) of Mexico resigned ver North, among others , participated, nies could have supplied the goods or because, under its present leadership, and which represents the interests of services more cheaply, half of all pur­ "the PAN is no longer the party of Wall Street. chases have to be made from the humanist leadership that used to de­ This infiltration could also explain Americans." fend human rights against the abuses why PAN ideologue Carlos Castillo Conchello add�d that "the fact that of authority, that used to strive for a Peraza, a collaborator of Alvarez, was quotas for the export of textiles 'that just distribution of wealth, that used one of 18 Mexicans who met on April fulfillthe rules of origin specifications' to oppose with bravery and spirit its 21 , 1991 with the president of the is presented as 'one more step,' is a freedom and independence from the genocidal Club of Rome , Ricardo further affront. With textiles, the so­ regime, and that used to move peo­ Diez Hochleitner, to found a Mexican called 'from the thfead on' rule is ap­ ple's wills with ideas, inspiration, chapter. Notwithstanding the fact that plied. Everything must be purchased principles, and its own programs, in­ the explicit objective of the Club of from one of the three countries party to spired by its own doctines. Today, the Rome is birth control and population the treaty, and therefore we must stop PAN is pro-Salinas, pro-liberal, and reduction, which conflict totally with buying thread fromChina and Taiwan, pragmatic. " the principles of the PAN, the present Germany or France, and must buy it Among those who left are those leadership of the party has not disap­ only from the UnitdlStat es. Trade will such as Pablo Emilio Madero (twice proved of the affiliation of Castillo now not be free, bl;'lt Americanized." party president and twice candidate for Peraza with this organization. Worse Schmal says tqat the government President of Mexico), Jose Gonzalez still, Castillo Peraza is a strong con­ seeks "an anchor, the force and immu­ Torres, Jose Angel Conchello (PAN tender to succeed Alvarez as PAN tability of an economic policy line in­ leader in the Federal District), Ber­ president. spired by the doctrine of free trade, by nardo Batiz, and Jesus Gonzalez Alvarez and the dissidents are also the individualist capitalist liberalism Schmal (leader of the Doctrinal and split over the North American Free that inspires it, despite the fact that the Democratic Forum, the group inside Trade Agreement (NAFTA) . Jose government now seeks to camouflage the PAN to which the dissidents all be­ Angel Conchello has strongly criti­ itself with social liberalism. " longed) . cized NAFTA and recently published The exit of the Doctrinal and Dem­ Discontent with party president a book against the treaty entitled M exi­ ocratic Forum, �bservers believe, Luis H. Alvarez has been growing for co Can Say No.ls NAFTA aDead-End could be the start of a mass exodus of some time, because of the alliance he Street? in which he says: "Why should PAN rank and file. For example, in the established with Mexican President we facilitate the advent of an era in state of Puebla, where elections for Carlos Salinas de Gortari . An exam­ which Washington will be the gen­ governor will take place shortly, the ple, dissidents say, is that the majority darme of the universe?" By saying no Salinist PAN members expelled a of the PAN deputies have voted in fa­ to NAFTA, "we will be saying yes to large group of PAIN leaders because vor of Salinas's bills presented to the something more precious: the dream they opposed Alvarez. Congress. that we have of realizing our destiny The dissidents see three options: The leaders who left the PAN together with the rest of the countries constitute themsel�es as a forum for maintain that the party has fallen into of Latin America." analysis and criticism; found another pragmatism, liberalism, and "Salin­ In the Aug. 20 El Universal, Con­ political party , which according to ism" due, above all, to "infiltration" of chello said that the Mexican govern­ some would be ba�ed on social-Chris­ the PAN by an organization belonging ment asserts, as if this were a great vic­ tian thought; or , become a civic to the U.S. establishment known as tory , that under NAFTA "Mexico will movement.

ElK October 23, 1992 International 67 InternationalIntel ligence

the confrontational mood of the authorities We st seedls to support them. There is a new Israeli Army chief in Belgrade . fixation op Moscow by the We st recently, fo resees war danger With the mood becoming increasingly similar to 'the earlier Gorbymania, he said. angry and impatient among younger Alba­ nians, Kosovo Albanian leader Ibrahim Ru­ "As long as the peace negotiations continue gova told the Oct. 5 London Independent Hong Kong fu ture bleak . . . I think the chance of a Syrian-initiated that "a war in Kosovo depends on the out­ war is very slim," Israeli Army chief Lt. as Chinese rule nears come of the power struggle in Belgrade, and Gen. Ehud Barak told Israeli television in whether [Serbian President Slobodan] Milo­ early October at the end of Yom Kippur, on Reactions to the proposals of Hong Hong sevic uses Kosovo as his last card." Rugova the 19th anniversary of the 1973 Arab-Israeli Gov. Chris Patten on Oct. 7, which outlined called on the international community to war. However, "a deadlock in the negotia­ an agend, for the next five years for the warn Serbia "not to open up another front." tions with the Arabs could serve us as a British cqlony before it comes under the strategic warning for the possibility of a. . . control o� the People's Republic of China violent confrontation." In six rounds of ne­ (P.R.C.),;epitomize the bleak future Hong gotiations in the last year, no agreement has Supportfo r Great Russia Kong fac�s as Chinese rule is scheduled to been reached. begin in 1�97. Meanwhile, Israeli soldiers shot and by U. S. worries Europ e Patten! proposed governmental restruc­ wounded at least 90 Palestinians in the occu­ turing in�lving such things as having the pied Gaza Strip on Oct. 7, during marches Romanian government circles are alarmed 230 seats of the Hong Kong district and ur­ in support of a hunger strike by prisoners, by the U.S. support for Russian imperialist ban countils elected democratically (one­ Reuters quoted medical sources as saying. policies at the expense of the non-Russian third nowlare appointed), and that these 230 Soldiers fired live ammunition, plastic bul­ nations of the Community of Independent persons fejrman electoral college which will lets, and tear gas to disperse several thou­ States (CIS) and eastern Europe, Viktor elect 10 members to the legislature in 1995 . sand demonstrators outside the Red Cross Meier, the Balkans correspondent of the Chinese 1leaders called the proposal "ex­ headquarters in Rafah refugee camp, wit­ Frankfurter Allgemeine Zeitung, reported tremely irresponsible." The official New nesses said. The clashes were the fiercest in Oct. 6. China NeWS Agency issued a statement de­ the Gaza Strip in fivemont hs . Nearly 3,000 Romanians are deeply shocked and con­ nouncing ! the proposals because, it said, people demonstrated in Gaza City, and cerned that the Great Russian strategy of they werelput forth without prior agreement smaller marches took place in the We st Bank reconstructing the Soviet empire even has by Chinal Britain has also recently been towns of Nablus and Jenin. The protests the support ofthe We st, "especially from the pushing Clhina on the issue of more demo­ were to back an ll-day-old hunger strike side of the Americans." cratically elected seats in 1995 , to which the by thousands of Arab prisoners demanding The concessions from the We st repre­ P. R.C. is reported to have answered with an better treatment and conditions. sent, Meier pointed out, the reaffirmationof emphatic t'No." the Hitler-Stalin Pact, at the expense of the Piratetstyle attacks by Chinese security Romanians, who will never get back the forces ani adding to the unease. In recent Kosovo threatened Bessarabian territory once taken by Stalin months, tbere have been at least fiveattack s, and recognized by the We st in the Yalta and analysts say many southernChinese of­ with bloody war agreements . ficialsare �llready floutingBr itish rule, Reu­ Meier's findingsare corroborated by the ters reported Sept. 27. In the most recent "This could easily develop into war, it could Oct. 6 Frankfurter Rundschau, which re­ attack oni Sept. 25, a Hong Kong police be even bloodier and more tragic than the ported on concern in Latvia that it will be launch was held up at gunpoint until British war in Bosnia," warned Adem Demaqi, the reincorporated into a new Great Russian em­ Royal NaVy ships rushed to the scene and father figure of Kosovo Albanian national­ pire. Janis Dinevics, the Latvian negotiator the Chinese ship withdrew. ism, on Oct. 4, amid signs of a dramatic in the talks with Moscow on Russian troop "If Cbinese gunboats can plunder Hong deterioration of the situation in Kosovo. withdrawal, said he was shocked by the rude Kong ves$els when Britain is still nominally Recently, there has been a spate of behavior of the Russian negotiator, Sergei in charge, what will they do after 1997 when shootouts between Albanians and Serbian Sotov, who declared that all talk about the there is ne:> British government to protest?" police. In the firston Oct. I, several Serbian Hitler-Stalin Pact was nonsense and that it asked NOIlman Miners, a politics lecturer at policemen were reportedly killed. At the is a historic fact that Latvia joined the Hong Koitg University. "The choices are same time, a trial has begun in the western U.S.S.R. voluntarily. pretty stark The only way to stop it is if the Kosovo city ofPecof 19 Kosovo Albanians, Mavriks Vulfsons, foreign policy advis­ British N�vy fires a few shots. If they're charged with illegal possession of weapons. er to the Latvian government, said that the acting as pirates then they should be treated More than 1,000 Serbian troops were flown most scandalous thing about the Russian in­ according to the international rules against into the capital , Pristina, Oct. 3-4, reflecting tentions toward the Baltic states is that the piracy." ,

68 International EIR October 23, 1992 • IRAN has nuclear warheads from former U . S. S. R. arsenals, the Moscow Times reported recently. Two war­ heads of 40 kilotons each reportedly can be mounted on Scud missiles. been given to Iraq in 1926 by the young Pakistan breakup republic of Tu rkey. Although he was at­ • PAKISTAN Prime Minister Na­ tacked for such statements at the time , now closer to reality waz Sharif left Islamabad for a five­ almost everyone in Tu rkey accepts the idea. day visit to China on Oct. 6, Reuters Tu rkish Prime Minister Suleyman De­ The Pakistan Army has decided to quit reported . The 40-man delegation in­ mirel is quoted as saying that the best solu­ Sindh province, where it had been deployed cluded Finance Minister Sartaj Aziz. tion would be that "Iraq make peace with to keep order against the warring Mohajir "Our emphasis . . . will be to break the world." While reiterating his support for Qaum Movement and Pakistan People's new ground for furthering economic the territorial integrity of Iraq , he said that Party. cooperation between the two coun­ peace in the region is impossible as long as MQM chief Altaf Hussain, who is based tries, besides discussing internation­ Saddam Hussein is in power, and that "an in London, has told the Pakistan govern­ al , regional and bilateral issues," initiative from a federal state in the north of ment that unless the Army leaves the prov­ Sharif said. Iraq to seek a federation with Tu rkey" might ince immediately, Sindh is fast approaching be a solution since, after all, "Mosul was a situation similar to Bangladesh in 1971- • KAZAKHSTAN President Nur­ once an Ottoman province." i.e., liberation from the Pakistan govern­ sultan Nazarbayev called for the for­ Le Monde pointed out that 1.5 million ment in Islamabad. mation of an Asian security pact, in Tu rkomans live in the region of Kirkuk and The major city of Sindh, Karachi, is the a speech to the U. N. General Assem­ look toward Tu rkey for security. It quoted premier dope depot in Pakistan, which has bly on Oct. 7. M. Muzaffer Arslan, chief of the Iraqi Tu r­ been targeted to be financiallyupgraded un­ koman party, who claims that the Iraqis have der an independent Sindh. • THAILAN ·S Parliament unani­ imprisoned 2,500 Tu rkomans. Arslan de­ tl mously overturned the amnesty grant­ clared, "Turkey has a conservative policy, ed to generals who ordered soldiers to she will only offer humanitarian help, but I open fire on demonstrators last May. Is Tu rkey moving to hope that she can guarantee our security." annex parts of Iraq? • INDIA AND PAKISTAN agreed on Oct. 7 to a meeting of de­ An official declaration of the Tu rkish gov­ Masons have vast fe nse secretaries in New Delhi on ernment on Oct. 8, as reported in the Oct. 10 Nov. 2-4 to discuss pulling back Paris daily Le Monde, is fueling speculation influence in France troops from the disputed Siachen gla­ that Tu rkey is preparing to annex the Mosul cier in Kashmir, Reuters quoted an and Kirkuk provinces of Iraq. The vast influence of Freemasonry over Indian High Commission source as The statement read, "We are against all French politics was exposed in a feature on saying. They also agreed that experts moves that will open the way to the disinte­ France's TF- I television. The broadcast would meet on Nov. 5-6 in New Del­ gration of Iraq ," but also declared that "Tur­ documented that 100out of the 577 French hi for talks over II disputed creek. key is the principal guarantor of the security deputies, and 30 of the 200French senators, of the people of northern Iraq, including the are Freemasons. At least 11 members of • WASHINGTON will cut back Kurds, the Turkomans, Arabs, and As­ Prime Minister Pierre Beregovoy's cabinet troops in Korea ,in the next 10 years syrians." are "under orders of the Grand Master." to no more than , 3,OOO-man brigade, According to Le Monde, the statement These include Defense Minister Pierre Joxe according to a policy paper released must be seen in the context of current mili­ and Foreign Minister Roland Dumas, the by the South KoreanForeign Ministry. tary cooperation between Iraqi Kurds and Italian daily Corriere della Sera reported on The report, cited by Reuters on Oct. 9, the Tu rkish military in joint operations Oct. 8. said the U.S. will maintain its troop against the Tu rkish Kurdish Wo rkers Party The French television program also indi­ levels in Japan '�to prevent Japan be­ (PKK) insurgents who have bases in the cated that there is massive free masonic ma­ coming a major rpilitary power." Kurdish region of Iraq . The Tu rkish military nipulation of the French left and right, and is giving the Iraqi Kurds air support and the of key social issues in France, including • WILLY BRANDT. the former Tu rkish chief of staffsaid that Tu rkish troops abortion and genetic engineering. mayor of West iBerlin, chairman of would reinforce the Iraqi Kurds if necessary. Also documented, is the power the Free­ the Social Democratic Party , and The internaldebate inside Turkey is also masons had over former President Valery chancellor of West Germany from reportedly moving toward a general agree­ Giscard d'Estaing, who had wanted to have 1969 to 1974, died Oct. 8 of intestinal ment on the annexation of Iraq's oil-rich a freemasonic ceremony in his presidential cancer at the ag� of 78. Brandt's last provinces. President Tu rgut Ozal, from the office, but was instead prevailed upon to significant politiCal intervention was beginning of the Gulf war, expressed great hold the ceremony at the lodge head­ his opposition tolthe war against Iraq . interest in the Iraqi provinces, which had quarters .

EIR October 23, 1992 International 69 �TIillNational

Bush apparatus unraveling over 'Iraqgate' coverup

by Edward Spannaus

In one what prominent columnist called a "total collapse" court in the BNL case. The case involved allegedly illegal and the "fi n de regime" for the Bush presidency, the adminis­ loans to Iraq made by BNL' s Atlanta, Georgia branch; the tration fell into open warfare among the Department of Jus­ underlying political issue is the Bush administration's provi­ tice (DOJ), the FBI, and the CIA over the Oct. 10-12 Colum­ sion of agriculture credits and other aid to Iraq before Bush bus Day weekend. suddenly discovered in 1990 that Saddam Hussein was the The first stage saw the outbreak of feuding and finger­ "new Hitler." pointing between the CIA and the DOJ over the "Iraqgate" In the BNL case, government prosecutors had taken the coverup, with the FBI called in to investigate. On Monday position that BNL branch manager Christopher Drogoul had night, news media were reporting that FBI Director William conducted the alleged loan scheme entirely on his own. How­ Sessions was under investigation. By mid-week, it was being ever, Drogoul' s sentencing he�ing unexpectedly turned into widely reported that the DOl's investigation of Sessions had a prolonged exposure of higher-level complicity by BNL expanded from an in-house "ethics" inquiry into a full-scale officials, as well as by both the Bush administration and the criminal investigation. The internecine warfare erupted in the Italian government. The sentencing hearing was becoming heart of Bush administration-the police-state apparatus which such an embarrassment to the Bush administration that the has been carefullyput into place in recent years, and which has DOJ succeeded in shutting it down on Oct. 1. targeted numerous adversaries and potential adversaries of the Acting on information that had emerged in the sentencing Bush regime. This is the true base of Bush's power. hearing, the Senate Intelligence Committee held hearings on Oct. 8-9 on the administration's withholding of information The BNL coverup from local prosecutors in Atlanta. CIA officialstestified that The disclosure of the DOJ investigation of Sessions was it was at the urging of the DOJ that they deliberately withheld widely interpreted as an escalation of the open conflict be­ the information, which included CIA source reports which tween the the FBI and the DOJ over the conduct ofthe investi­ the CIA had obtained in 1989, the existence of which contra­ gation of the Bush administration's coverup in the case of the dicted CIA assertions that the agency only had public-source Banta Nazionale del Lavoro (BNL), part of the "Iraqgate" information such as newspaper accounts about the BNL case. scandal. Senate Intelligence Committee chairman David One focus of inquiry is a CIA letter sent by DOJ head­ Boren (D-Okla.) immediately linked the leaks about Sessions quarters to the Atlanta prosecutors in September, which said to the BNL dispute, and warnedthat it "raises serious ques­ that the CIA had no independent sources of information in tions about the pressure that can be brought to bear against late 1989 about the alleged bookfraud scheme. In fact, both an independent FBI investigation" of the Justice Department the CIA and the DOJ had information from CIA sources in and the CIA. Rome months earlier than December 1989. The dispute between the FBI and the DOJ came on top Among the DOJ officialsca lled to testify was Fraud Sec­ of an already-raging battle between the CIA and the DOJ tion chief Lawrence Urgenson. Reports identifiedUrgenson over who was responsible for misleading prosecutors and the as directing the CIA not to change their account of events in

70 National EIR October 23, 1992 a Sept. 17 letter to Atlanta prosecutors. Robert S. Mueller III, tration officials were involved. Gonz.lez's letter to Barr on the assistant attorney general in charge of the DOJ Criminal Oct. 13 said, "The evidence is that hith levels of the Justice Division and Urgenson' s boss, has been identifiedby the DOJ Department were in regular contact with the Italian govern­ as the official who discouraged the CIA from issuing a state­ ment concerning the BNLcase ," and that these same officials ment on Sept. 18, which would have given a more accurate "were aware of the Italian government's desire for some picture about what the CIA knew about BNL and when they 'kind of damage control.' " knew it. DOJ spokesman Paul McNulty said on Oct. 10 that On Oct. 14, Boren called for the appointment of a special Mueller had "rejected this draft statement as being inadequate prosecutor-something he had resisted doing up to that and unacceptable" in a discussion with a CIA official. point. Washington Post columnist Jim Hoagland described (Mueller, incidentally, is a protege of former Boston U.S. Boren's "surprise" move as "a clear indication of how rapidly Attorney William Weld, and played an important role in the things are moving." Boren's move was apparently triggered failed prosecution of Lyndon LaRouche and various associ­ by the disclosures that FBI Director Sessions was under crim­ ates in that city. Mueller was head of the criminal division of inal investigation by the DOJ. "That just seems too coinci­ the U. S. Attorney's officein Boston, and was the immediate dental," Boren told Hoagland. supervisor in Boston of John Markham, the lead prosecutor in In his statement, Boren pointed to the opinion issued by the LaRouche trials in both Boston and Alexandria, Virginia. Judge Marvin Shoob in Atlanta stating that decisions were Mueller later replaced Weld's successor, Edward Dennis, as made "at the top levels of the U.S. governmentand within the head ofthe Criminal Division at DOJ headquarters. The Fraud intelligence community to shape this ¢ase." Boren reviewed Section of the Criminal Division was the section with direct the CIA's withholding of information ,and the DOJ's "strong responsibility for the LaRouche case. DOJ attorney Mark advice" to the CIA to forward a "misl�ading public letter" to Rasch was deployed from the Fraud Section as Markham's local prosecutors in Atlanta. Boren sqtted: "I do not believe co-prosecutor in both the Boston and Alexandria cases.) investigations by CIA, Justice, or by FBI ...are sufficient." Aftertwo days of hearings , Borenapparently urged Attorney General William Barr to open an FBI investigation of the cov­ The Sessions investigation erup. This led to sparringover who was in charge of the investiga­ The investigation of Sessions for a�leged ethics violations tion. Boren said that Sessions had told him that "Justice will not was firstreported by ABC News on Oct. 12. Later that night, participatein the inquiry andthe FBI will not shareinformation" Sessions confirmed the fact of the investigation. ABC report­ until the inquiry is complete. But DOJ spokesman Paul McNulty ed that sources close to Sessions sai� that the investigation said that the OOJ is in charge. "The Public Integrity Section of was aimed at forcing him out as FBI director for resisting the Justice Department is in charge-working with the FBI." "Bush administration efforts to politicize the FBI." Boren's account of the investigation "is entirely inconsistent Various matters are apparently at issue in the Sessions with what I know," he said. "ethics" probe, including tax evasion and misuse of govern­ It may not bemere coincidence that the DOJ Public Integrity ment facilities, including planes and t(:llephones, for personal Section was also identifiedin press reportsas the unit conducting use. Another charge is that Sessions'� wife improperly used the criminal investigation of FBI Director Sessions. FBI identification to gain access to sequre FBI facilities, and that she attempted to steer a $100,000 governmentcontract Calls for a special prosecutor for security at their home to a family friend, the husband The controversy over the administration's BNL coverup of Sessions's executive assistant Sarah Mumford. It is also escalated on Oct. 13, when both Sen. Howard Metzenbaum alleged that Mumford used FBI credentials to avoid a traffic (D-Ohio) and Rep. Henry Gonzalez (D-Tex.) called for the ticket in Texas. appointment of an independent counsel to take over the inves­ There are apparently two DOJ probes against Sessions: tigation. Metzenbaum said that this is the only way to ensure the ethics investigation being condu�ted by the Office of "that the Executive branch is not covering up major miscon­ Professional Responsibility, and a mpre serious inquiry by duct in its handling of the affair." On Oct. 14, Boren also the DOJ Criminal Division's Public lntegrity Section. The called for a special prosecutor, saying that "a truly indepen­ DOJ officially will neither confirm nor deny either probe. dent investigation" is needed. The actions against Sessions may ,also reflectdis sension Gonzalez, who initiated the exposure ofthe coverup, also within the FBI. Senior FBI officials a,e reportedly unhappy called for the resignation of Attorney General Barr because with Sessions, saying that he is aloof from day-to-day opera­ of "repeated, clear failures and obstruction" by the DOJ in tions and that he fails to stand up for �ureau interests. Ses­ the BNL case. Gonzalez charged that the White House and sions's advocacy of affirmative action �as won him supportof the National Security Council were stonewalling Congress liberal Democrats in Congress, but bas angered many FBI on its requests for documents and witnesses. agents. Sessions's wife has told the aythor of a forthcoming Barr had earlier rejected calls for a special prosecutor on book on the FBI, Ronald Kessler, that �he believed senior FBI the grounds that the DOJ didn't believe that senior adminis- officialswho oppose her husband had Wiretapped their home.

EIR October 23, 1992 National 71 'Mindboggling network of international crime' The Kerry report focuses on BCCI, a bank set up some two decades ago by a Pakistani named Agha Hasan Abedi, and used over the years by � number of governments and Senate report exposes intelligence services to finan�e their activities. On July 5, 1991, bank regulators in a d�zen countries moved to shut 'mother of allscandals ' down BCCI's operations, on the basis of audits that showed over $11 billion in bank assets! were missing (the amount was later found to be substantiallY larger), and that depositors by Mark Burdman were being robbed blind. Soob after, stories appeared in the international press accusing the bank of drug-money laun­ A huge amount of publicity has come out about such scandals dering, financing terrorism, �nd funding shady intelligence as the Iran-Contra affair, and, more recently, the devious activities. I pre-Gulf war Bush administration transactions with Iraq Both before July 1991 �d after, various investigators through the Atlanta branch of an Italian public bank, Banca had pointed to BCCI's links to British and Israeli financial Nazionale del Lavoro (BNL) , or "Iraqgate." These have institutions, but such trails w�re covered up by Bush's U.S. tended to appear as discrete affairs, each with its own cast Department of Justice, the $ank of England, and related of evil characters. Now, the U.S. Senate subcommittee on agencies. Some elements of this coverup have been pointed Narcotics and InternationalTerrorism headed by Sen. John to by the Kerry subcommittect, which criticized the Bank of Kerry (D-Mass.), which has been probing still another seedy England and British governIttent's negligence in cracking affair, the doings of the collapsed Bank of Credit and Com­ down on the obvious misdoings, and questioned the nature merce International (BCCI), has come up with convincing of the CIA's involvement with the bank. indications that all of these scandals are part of one and the In most accounts, BCCI hilSbeen called an "Arab" bank. same scandal. New York District Attorneyl Robert Morgenthau, a well­ The Kerry investigative team's findings, if read correctly, known Israeli agent-of-influeince, has played a key role in show how the Anglo-Americans and their friends in Israel shaping this misperception . .aCCIwas in fact a playground have systematically used underhanded intelligence opera­ for western intelligence agencies and Israeli interests. Sena­ tions and tainted monetary transactions as their characteristic tor Kerry's report contains much evidence of this in its de­ (rather than exceptional) means to carry out policies, to the tails, but its emphasis is on tHe more dramatic aspects of the extent that the policy and the means to reach it have become case. Kerry states that his su1!>committee's work has uncov­ interchangeable. During the past several years, many indi­ ered a "mindboggling network of internationalcrime ," while viduals on several continents have been murdered in order to the written report talks of a! "panoply of financial crimes protect the architects and coordinators, the so-called citizens limited only by the imagination of its officers and custom­ above suspicion, who have used intelligence agencies, ers." Documented crimes inv6lving the bank include, in the banks, arms merchants, drug traffickers, and terrorist organi­ words of the authors: "support of terrorism, arms trafficking zations in this way. The victims range from prime ministers, and the sale of nuclear technoibgies, management of prostitu­ like Sweden's Olof Palme, to scores of intelligence officers tion, the commission and fac�litation of income tax evasion, in many countries. smuggling and illegal immigration and the illicit purchases A case especially worth mentioning is that of the Italian of banks and real estate." Mqreover, the report identifies20 magistrate Giovanni Falcone, murdered on May 23, 1992 in areas for further investigation, including the bank's involve­ Palermo, Sicily. Falcone had been one of the world's experts ment with secret U.S. arms Sales to Iran in the 1980s (Iran­ gate), and its possible role in'the pre-Gulf war arms buildup on that complex of activities and individuals which bring . together the big organized crime families, shady political in Iraq (Iraqgate). deals, intelligence services' operations, money laundering, Concretely, the report's i�vestigators have substantiated drug trafficking, terrorism and political-masonic arrange­ the close links between BCtI, the Atlanta branch of the ments. While looking into yet another scandal, the mess of BNL, and the flow of Iran-Contra funds. This is highly sig­ corruption in Milan, Falcone had reportedly been honing in nificant. It was through BNU-Atlanta that sensitive transac­ on the "Swiss connection" to what Italians call "Milangate." tions were made between U.�. and Iraqi government agen­ One day after his death, Judge Carlo Palermo, another top cies, in the period right beford the holy war on Iraq conducted investigative magistrate, stated, "Uncovering what is going by the same Bush administra�ion that had been wheeling 'IlJld on in the Swiss banks would bring down the whole system. dealing with it. What has emerged in hearings in Atlanta, It is not by chance that Falcone was killed at the moment the beyond the transactions therrj.selves, is evidence of massive Milan inquiry moved to Switzerland." U.S. government misconduot-ranging from falsifying in-

72 National EIR October 23, 1992 formation to obstruction of justice-to suppress the truth . Hartmann is also the vice chairman of an entity known The government had originally hoped to scapegoat BNL­ as Bank of New York-Inter Maritime Bank, in Geneva, a Atlanta branch manager Christopher Drogoul, absurdly post he was appointed to by the Swiss-based operative Bruce claiming that he had been solely responsible for the illicit Rappaport. Rappaport is a story unto himself, with impecca­ actions, and had arranged with Drogoul that the case against ble ties into the Swiss, American, and Israeli elites, and vast him would be dropped as part of a "plea bargain." But this operations in shipping, banking, trade, and other activities, deal has fallen apart; Drogoul's defense lawyer and the judge many of them not exactly "kosher." Rappaport, say numer­ (who since removed himself from the case) both raised the ous sources, controlled the accounts which received $10 mil­ issue of U.S. misconduct. Drogoul's lawyer insists that it lion in Iran-Contra funds for the Col. Oliver North-Gen. was U.S. and Italian agencies or influentialpersonalities who Richard Secord "Enterprise" operation, funds arranged by had concocted the scheme of financial transactions with the former U.S. Assistant Secretary of State Elliott Abrams to Iraqis. Even with U. S. governmentobstruct ion, it has always be provided by the Sultan of Brunei. been impossible to cover up the international dimensions of One section of the Kerry report reads: "Bruce Rappaport, the scandal: Leading BNL figures in Rome have been fin­ an Israeli-born Swiss businessman who was investigated in gered, and one senior Italian defense official killedhimself, 1987 by Independent Counsel Robert McKay for certain ac­ as the story began to surface. Here, too, a reopened "Falcone tivities he engaged in on behalf of fonner CIA director [Wil­ dossier" might shed some light on this operation. liam] Casey, had several connections to important partici­ pants in the BCCI affair. For example, he placed one of , The case of Switzerland's Alfred Hartmann BCCI's key 'rent-a-faces, Alfred Hartmann, who headed According to the Kerry report, BCCI and BNL-Atlanta BCCI's secretly held Swiss affiliate ...on the board of his are closely linked, engaging in what the authors call "inter­ Inter Maritime Bank of Geneva and New York." locking activities" and both involved in "criminality." Sub­ Closing the circle, Hartmann is on the board ofthe Banca committee investigators claim that transactions between del Gottardo, based in Lugano. A,::cording to reliable BCCI and BNL-Atlanta "amounted to billions of dollars a sources, Banca del Gottardo was at the center of Judge Fal­ year," with BCCI regularly moving funds from its overseas cone's investigations into the "Swiss connection" into Italy's branches into BNL-Atlanta. The report further asserts that "Milangate" scandal. "BNL also maintained half a dozen or more accounts at BCCI's offices in Miami." Where matters get truly intriguing is in the report's identi­ GEORGE BUSH fication of a key individual who was with both banks, the Swiss banker Alfred Hartmann. Hartmann, says the report, THE UNAUTHORIZED BIOGRAPHY If you thought Dukakis's "was on the board of directors of both banks, [and was] the mental health was an head of BCCI's secretly controlled Swiss affiliate, Banque issue, read George Bush: de Commerce et Placements." The Unauthorized This is only the tip ofthe iceberg. Hartmann would appear Biography: to embody the overlap of financial-intelligence operations The truth about George and important banking operations. Indeed, he has been the Bush-in print for the president of the Swiss branch of BNL-Lavoro Bank AG­ first time: "Bush's health, and has been not only the head of BCCI' s Swiss subsidiary , and most especially his but reportedly also the chairman of the BCCI Holdings, SA, mental health, must be the Luxembourg-based holding company of the BCCI bank­ considered a decisive ing octopus. Hartmann sits on the board of no less than five issue for his presidency­ Rothschild family banks, and maintains his central office, however long that lasts." down to this day, at the Rothschild Bank in Zurich. He is on $20 plus $3 shipping the board of the Banque Privee Edmond de Rothschild, SA, and handling Visa and MasterCard in Geneva; Rothschild Holding AG in Zurich; Rothschild accepted . Virginia reSidents please Concordia AG in Zurich; and Rothschilds Continuation add 4.5% sales tax. Holdings AG in Zug. This, of course, places Hartmann right Ben Franklin in the middle of some of the most sensitive banking opera­ Booksellers tions worldwide. Recently, there was a big shake up of senior 107 South King Street personnel at Rothschild Bank in Zurich; it is not known, Leesburg, VA 22075 at this point, if this is in any way related to Hartmann's PH (703) 777-3661 453-4108 implication in the BCCI-BNL spiderweb. (800)

EIR October 23, 1992 National 73 on Oct. 14, the Sheriffs Department announced that it is involving Virginia State Police to determine if Moore was illegally given confidential computer information. FBI agents searched Moore's house for several hours on Sept. 30, the day of his arrest, but did "not confirm or deny" that CAN nervous as trial any teletype documents (fronll the state and federal crime information computer) were found.

date set in kidnap plot New charges added John Markham, the former co-prosecutor of Lyndon Appearing before Federal Judge James Cacheris in Alexan­ LaRouche in Boston and Alexandria, and currently in private dria, Virginia on Oct. 13, the conspirators who allegedly practice, made a formal entrance to represent E. Newbold plotted to violently kidnap Lewis du Pont Smith and his Smith at the Oct. 13 arraignmtmt. The Radnor, Pennsylvania wife Andrea Diano Smith and "deprogram' them from their socialite is the father of kidnap target Lewis Smith, an heir political association with Lyndon LaRouche, all pleaded "not to the du Pont chemical fortUne through his mother, nee gUilty" and asked for a jury trial. Margaret du Pont. Newbold Smith in 1985 moved to have his The government presented a superseding indictment, son declared incompetent, in otder to take away his control of naming as a fifth conspirator Anthony Russo, a former New his trust fund, after Lewis contributed generously to a pro­ York City police officer. He joins self-styled "cult depro­ LaRouche publication. While, a corrupt Pennsylvania court grammer" Galen Kelly of New Jersey; former Loudoun went along with that maneuver, apparently Newbold was not County, Virginia Sheriffs Lt. Donald L. Moore; Robert content. According to a Washington Post story on Oct. 14, "Biker Bob" Point, a New Jersey lawyer; and the alleged his lawyer will try to convince the jury that his plans to use paymaster, E. Newbold Smith. ex-Green Berets and motorcycle gangs to kidnap Lewis were ) Meanwhile, the heat is on the Cult Awareness Network motivated by "love." Judge Cacheris has set a trial date for (CAN), which steers the national campaign of lies smearing Dec. 14 and a pre-trial motion day for Nov. 20. the LaRouche movement as a "cult." In an AP interview . The superseding indictment presents further facts which widely published on Oct. 11, a jittery CAN executive director date the start of the conspiracy back to September 1991. All Cynthia Kisser admitted that Newbold Smith was a "mem­ five co-conspirators are charged with the federal felony of ber" of CAN. She claimed that Moore, Kelly, and Biker Bob attempted kidnaping. Smith and Moore face a second felony were not members of CAN but were "merely associated" count, soliciting for kidnaping. According to the Philadel­ with the organization through discussions on cult issues. phia Inquirer, the superseding indictment states that Moore In the weeks since the du Pont Smith kidnap arrests, 19 had illegally entered Lewis Smith's home last month for new lawsuits were filed against CAN by members of the surveillance. A woman was paid to join the target's health Church of Scientology, bringing to a total of 30 the number club in order to spy on him there, as well. of such lawsuits in multiple jurisdictions. Kisser, who said In the county where Newbold Smith resides, Delaware CAN is the target of a "harassment" effort, protested, "We CountyDail y Times columnist Gil Spencer published an edi­ are not a criminal group. We don't engage in kidnaping. " torial column on Oct. 9, printill1gin full a written statement by Yet in seven separate lawsuits filed in Glendale, Califor­ Lewis Smith defending his right to his own political beliefs. nia, seven Scientologists, who had joined the Cult Awareness Spencer adds: "This is the United States of America and in Network, charge that CAN, "despite its purported goals . . . this country no one, not well�meaning parents, not benevo­ is actually engaged in unlawful and evil conduct, in 'mind lent friends, no one is legally permitted without due process control,' and [has] hired persons with criminal backgrounds of law to physically abduct, drug and attempt to 'deprogram' to kidnap, sexually abuse, mentally abuse, intimidate and another person. As for the daqger 'cults' pose in this society, coerce persons by depriving them of food and water and I am very skeptical . Here, according to cult expert Dave forcing them to take drugs against their will, all under the Clark of Swarthmore , is how to know if you're in a cult: guise of educating them about their religious . . . freedoms." Your group requires absolute loyalty; it might alter your diet The Glendale lawsuits name as defendants, besides local (no proteins, lots of carbohydrates), and deprive you of sleep CAN officials, Kisser and three other national officers of to make you easier to hypnotiZe. It will isolate you from the CAN: Rachel Andres, Corey Slavin, and Herbert Slavin. community at large; make you emotionally dependent; give In Loudoun County, Virginia, the Sheriffs Department you no privacy from the group for intellectual reflection; has formally expanded an internal investigation of its em­ operate on severe peer pressure; encourage chanting; and ployees to findout if any of them illegally passed information teach you not to question the authority of the leader. Now, to to ex-cop Don Moore after he was fired last February . Ac­ me this sounds like the studio audience of the Oprah Winfrey cording to a front-page article in the Loudoun Times-Mirror Show."

74 National EIR October 23, 1992 for which he was convicted and sentenced to death ....In Part I, Petitioner details how the circumstances and atmo­ sphere of his pre-trial and trial proceedings presented the u. s. Supreme Court opportunity for a wrongful conviction and sentence of death. Part II describes the inconclusive evidence of guilt presented to allow execution by the prosecution at trial. In Part III, Petitioner sets out the post-trial evidence that supports his claim of inn�cence . It . of the innocent? discloses that police involvement in the �rug trade III the RIO Grande Valley along the Mexican border led to the death by AnitaGallagher of two police officers. Police knew but kept silent about Petitioner's innocence rather than reveal the unseemly and incriminating police-shared responsibility for these offenses. On Oct. 7, the U. S. Supreme Court heard one hour of oral Furthermore , the actual killer's son v.ritnessed the killings, argument in the monumental case of Leonel Herrera v. Col­ and has sworn that his father Raul Herrera, not Leonel Herre­ lins (State of Texas), which posed the question to the Court: ra, committed them. A former judge and now practicing "Does it violate .the Eighth and Fourteenth Amendments to attorney in the Valley has stated under oath that his former execute a person who has been convicted of murder but who client, Raul Herrera (Leonel's brothcir) , confessed to him is innocent?" that he, not the Petitioner, committed the crimes. This new Even worse than its very consideration of such a proposi­ information is in all detail consistent with the story contained tion, the U.S. Supreme Court is expected to rule by July 1993 in the trial transcript with respect to hov.rthe offenseoccurred , that it would be legal to execute someone proven innocent consistent but for one fact-it was Raul, not Petitioner, who aftertrial , provided that his trial was conducted according to was at the scene. the legal procedures obtaining in his state. It is widely be­ lieved that the Court previewed its ultimate decision last Petition fo r Writ of Certiorari to the U.S. Court of Appeals February, when Justices Harry Blackmun, John Paul Ste­ fo r the Fifth Circuit, by Mark E. Olivej Esq.: vens, Sandra Day O'Connor, and David Souter provided the The Court of Appeals accepted as a matter of fact that minimum four votes needed for the Court to take the case. [Herrera] is indeed innocent of the crimes for which he is However, they could not muster the fifthvote needed to stay scheduled to be executed, and so no evidentiary hearing was Herrera's execution while the case was heard-a fifth vote necessary to prove his innocence. The Court accepted as a that would be needed to win. Fortunately, the Texas Court matter of fact that Petitioner could prove his innocence. The of Criminal Appeals then stayed Herrera's execution Court of Appeals then held that executing a person whom throughout the Supreme Court's proceedings. . everyone, including the Courts, knows to be innocent did not Leonel Herrera's attorneys tried to present proof of hIS run afoul of the Constitution. innocence which emerged long afterTexas 's legal time limit The rule of law scribed by the lower court in order to for introducing new evidence had expired. Under Tex�s law , vacate the stay of execution is one which, as far as petitioner this period extends only 30 days after a de�endant �s se�­ can tell, has never been embraced by any federal court under tenced. Thus, procedure, and running executIOns on time, IS current death penalty statutes. According to the lower court, placed above the discovering of truth in the state's law. Texas has no procedure available in post-conviction proceed­ At the oral argument on Oct. 7, Justice Anthony Kennedy ings to prevent the execution of a person convicted in state asked Herrera's attorneys: "Suppose a videotape shows that court but who proves to everyone that he or she is innocent, a man convicted of murder by a jury is really innocent. W QuId and habeas corpus [post-conviction appeal] provides no it violate the Constitution to allow the man to be executed?" mechanism for protecting that person. This is wrong. Texas Assistant Attorney General Margaret P. Griffey If states are perfectly free under the Eighth and Four­ promptly answered, "No Your Honor. It would not b: a . teenth Amendments to execute persons who can prove be­ violation of the Constitution, under those CIrcumstances. yond a reasonable doubt their innocence, then this Court The Eighth Amendment prohibits "crueland unusual pun­ should take the responsibility of saying so and then ex­ ishment." The Fourteenth Amendment states that a person shall plaining how it is that the death penalty is reliable, reserved not be"deprived of life . . . without due process of law." for the most deserving, and does not strike like lightning, in conjunction with such a �le. Documentation The importance of vindicating claims of actual innocence has special force in the death penalty context. As Justice Petitioner's brief to the U.S. Supreme Court, Talbot [Thurgood] Marshall emphasized in Ford v. Wainwright . . . D'Alemberte and Mark Olive, Esqs.: "[i]n capital proceedings generally, this Court has demanded Leonel Herrera, the Petitioner, is innocent of the charge that factfinding procedures aspire to a heightened standard

EIR October 23, 1992 National 75 "Life is a right, revenge is not. No death penalty," reads the banner at a demonstration in Washington, D.C. on Oct. 7, the day on which the U.S. Supreme Court heard the case of Leonel Herrera, a man scheduled to be executedfor a crime that even the Court of Appeals admits he did not commit. After a rally at the Supreme Court, demonstrators assembled at the statue of Alfred Pike, the Confederate general and Freemason who was a fo under of the K u Klux Klan; they demanded that the statue be torn down, and dressed it in hood and robes, pending that happy day . The rally was led by the Rev. James Bevel (secondfrom the speaker's right), running­ mate of independent presidential candidate Lyndon H. LaRouche. At the microphone is historian Anton Chaitkin, who unearthed the true story of Pike's role.

of reliability ....This especial concern is a natural conse­ on his claim of newly discovered evidence. In our view, due quence of the knowledge that execution is the most irremedia­ process does not entitle a prisoner to a judicial remedy for ble and unfathomable of penalties; that death is different." newly discovered evidence. Even if it did, however, a State With respect to this claim in Petitioner's case, the consti­ can fixa reasonable time limit for such motions. tutional violation is that his execution, as an innocent person, Rather, [Herrera's] claim is that even if the verdict would violate the Eighth and Fourteenth Amendments. If it was not infected by constitutional error, or indeed, any would violate the Constitution to execute someone who was legal error at all, that verdict is factually inaccurate, as 12 years old at the time of the offense, or someone who was new evidence reveals. Federal courts lack supervisory insane at the time of an execution, then, a fo rtiori it would power over state courts and cannot vacate a state conviction violate the Constitution to execute an innocent person. absent a constitutional violation ....[T]he review contem­ [emphasis in original] plated by [the] Jackson [case] is not to determine whether the trier of fact has made the correct decision; it only "Friend of the Court" Brief of u.s. Solicitor General Ken­ forbids the trier of fact from making an irrational decision neth P. Starr, in support of Texas: [emphasis in original]. [Herrera] claims that the Cruel and Unusual Punishments Clause bars his execution because he has a colorable claim Petitioner's Brief to the U.S. Supreme Court, by Talbot of actual innocence. But that Clause only limits the penalty D'Alemberte and Mark Olive, Esqs .: imposed on a convicted defendant. ...Beca use Petitioner's The Court of Appeals did not quarrel with Leonel Herre­ claim goes to his conviction rather than his sentence, the ra's evidence that he did not commit the murder for which Eighth Amendment is inapplicable. he was convicted and sentenced to death. The panel held that [Herrera] challenges his sentel)ce on the ground that he "Herrera's assertion of 'actual innocence' presents no ... is innocent of the crime, not on the ground that a specific claim for relief." Petitioner contends that the promises made constitutional provision was violated at his trial. The only by the Eighth and Fourteenth Amendments should not be so constitutional provision that could be relevant to such a claim empty. Nothing is more barbaric ...than gratuitously to is the Due Process Clause; the issue therefore ultimately execute an innocent person. This Court should not counte­ reduces to whether that Clause guarantees Petitioner relief nance such an affront to human dignity.

76 National EIR October 23, 1992 Letters tothe Editor

race to somewhere around 1 billion people. years ago many more of us ordinary people Fairness to Baha'i Evidence of that is amply available in the could read! public domain, i.e., from Naess's own writ­ The review by Mr. Johnson follows the I was surprised by the gross inaccuracies ings. Similarly, the "anti-anthropomorphic" classic pattern of the hatchet-job. Character contained in the article by Mark Burdman ideas of the cited Robert White are put for­ defamation succeedted by a hysterical de­ concerning the Baha'i faith [EIR , Aug. 28, ward by the Baha'is themselves as represen­ nunciation of the text, "out of context 1992 , "Pagan Baha'i Cult Plays Leading tative of their world view . quotes, fallacies of composition, sheer Role in U.N.'s Human Rights Meeting"] . A Baha'i activity, as advertised by them­ falsehoods, bespeak a pathological disre­ reading of the article indicates Burdman to selves, has been in the service of an outlook, gard for truth." Mr. Johnson seems to be be very unfamiliar with the Baha'i faith or a worldview, expressed by the abhorrent ne­ imitating the most �Iatant experts who do that he was intentionally making an effort ologism "sustainable development." As EIR the reviews for the i{ew York Times and the to knowingly discredit Baha'i. Considering has frequently documented, the concept of Washington Post .... Lyndon LaRouche's dilemma, it would ap­ "sustainable development" is the polar op­ I have in my li\?rary a dozen volumes pear that your writers should be careful to posite to the political economy of Mr. by well-qualifiedhistorians and journalists, represent or present others with the fairness LaRouche, and the promotion of that idea which collectively and individually validate and justice which Lyndon espouses. has caused many of the mal thus ian horrors the assertions made by Stormer with the People who have kept up with world to which our human race is today subjected. mass of information available from 1976 to religious trends know that Baha'i is recog­ If other Baha'i activity and advocacy pro­ 1987 through declas�ification and the Free­ nized worldwide as a religion-not a cult­ motes more positive values, that should be dom of Information Act-the period most and that it is the fastest growing religion in made known. But in view of the overwhelm­ of these books were written. Stormer's doc­ the world. If Burdman has an opinion other ing evidence of their leading role in the Rio umentation covers tbn and a half pages of than this (in fairness) it should be stated, by event, I hold that a retraction is riot in order. fine print in the back of the book. Where is you the editor, that his opinion flies in the yours, Mr. Johnson? face of what is widely accepted all over the Les B6sley world. Homestead, Florida In the firstplace , Burdman misses the Conspiracy theories core tenets of the Baha'i faith and focuses The editor replies: Mr. Johnson did not on peripheral activity and attempts to equate Leif Johnson's review of John A. Stormer's question John Stormer's fa cts . He ques­ George Bush's "one world" with the Baha'i updated version of his original None Dare tioned his interpretarion of those facts, not­ "one world." Actually there is no connec­ Call It Treason, 20 years later, was well ing the strange fact that Stormer expressed tion or any intention of there being a con­ written, but is essentially, a first-class hatch­ great admiration for George Bush and Oli­ nection. et job [EIR of June 26, 1992] . I was ver North , who stand out for their roles in It is not my purpose here to lecture on shocked, and forced to consider it, and ask: abetting the subversion of Central America the tenets of the Baha'i faith . I would rather Why? and South America .by drug-running, pro­ suggest that Burdman ought to have studied The original work written in 1963 and communist terrorist$. Johnson pointed out Baha'i in some depth before writing the arti­ published in 1964 with II additional print­ (among other things) that Stormer never cle .. .. ings in the same year totaling 1,400,000 even mentions the role of the drug trade as Ray Minert units. Seven years later in 1971 Gary Allen the most effective destroyer of our nation ! Springfield, Oregon wrote and published in 1972 None Dare Call How is it that millions of well-meaning It Conspiracy, which in three printings sold Americans have been taken in by such a The author replies: Mr. Minert fails to re­ 1,800,000 units. These books, written in swindle? The problem is populism . Writers spond to the main point of my article. What plain everyday langauge, were discussed on like Stormer appeal to the justified rage of the article documents, in significant part campuses and [in] the many places where many Americans against the corruption they from Baha'i literature, is that the faith mas­ the people discuss and attempt to evaluate see all around them ·in government and so­ sively and enthusiastically worked for the such information. Gary Allen's book had cial life. But when it comes to the deeper success of the June 1992 Rio Earth Summit. two advantages; he followed Stormer, and issues, of how one is to govern, in coherency My article presents a tiny fraction of evi­ he did not use religious morality to point with the Christian notion of man in the living dence available to demonstrate that point. It [out] his arguments .... image of God, they fuil-oras Leif Johnson is my view, and certainly Mr. LaRouche's I believe that my own experience has pointed out-they tum out to share the same view as well, that the Rio Summit was an been duplicated by a great number of people degraded, bestialized image of man as the abhorrent event, promoting values that are who were alerted to the dangerous direction Marxists they otherwise attack. antithetical to humanity. Rather than ques­ our esteemed leaders were, and are , contin­ Populism's historicalrecord is frighten­ tion my understanding of the Baha'is, I uing to take our country . Messers. Stormer ing. Consider the difference in outcome be­ would hope Mr. Minert would question the and Allen spurred me to continue my inves­ tween the French and American Revolu­ Baha'i leadership as to its activities in this tigation to determine in greater depth the tions. France's uprising was captured by respect. Worse, as my article documents­ causes for the obvious deterioration of west­ populist demagogue$, and culminated in the from Baha'i literature itself-the faith pro­ ern civilization. Thus, once I discovered tyranny of the mob, followed by the tyranny moted the vi�ws of a man , Arne Naess, who him, I became an advocate of the philosophy of Napoleon, a tyranny which then spread openly supports the reduction of the human and policies of Mr. LaRouche . Twenty out all over Europe.

EIR October 23, 1992 National 77 National News

Mr. Babookhanian had numerous meetings Klux Klan hood. The group gasped, and with organizations, newspapers, and com­ then bur�t into laughter. munities of the diaspora. Independent presidential candidate Lyn­ Washington Post: vote "Mr. Babookhanian had a meeting with don LaRouche came in second behind Bill U.S. presidential candidate Lyndon Clinton during the presidential endorsement 'no' on death penalty LaRouche . After discussing numerous screenin$. The presidential candidates were The Oct. 9 Washington Post editorially questions with Mr. LaRouche, Mr. Babook­ scored om a point system that included elect­ urged Washingtonians to defeat the death hanian concluded that among all the candi­ ability, record, position on the issues, can­ penalty initiative forced by Congress onto dates's programs, Mr. LaRouche's program dor, honesty, and willingness to work with the District of Columbia's Nov. 3 ballot. is the most favoable for the solution of prob­ the ANSC. LaRouche, a political prisoner, "The real impetus behind any such new law lems of the Armenian people and Armenia." won in all categories except "electability. " is retribution, which is a powerful motive, A message from the Schiller Institute but an unworthy one ," the Post declared . "It in Moscow urged American voters: "At a puts the state in the position of sanctioning moment when we are painfully deciding a killing as a penalty for a killing and author­ questions of our own life . . . it seems to us izing the very conduct on the part of society that Mr. LaRouche, as a man who under­ that is judged reprehensible on the part of an stands the problems of Russia and eastern Pottinger used 'graymail' individual. Europe, and knows currentworld problems, would be able to enunciate new approaches CIA documents show "There are penalties short of execution , and solve the most pressing problems if he for dealing with murderers, and a civilized Newly released CIA documents show that were President. " community can protect itself and reinforce George l3ush's friend J. Stanley Pottinger the rule of law without resort to killing of­ successfUlly "graymailed" the CIA and fenders . The initiative should be defeated State Department in 1982 to block his own not only because of the process by which it appearance before a federal grand jury in­ was placed on the ballot, but because the vestigati�g New York-based Iranian banker penalty it authorizes is wrong. " Reverend Boone garners Cyrus Hashemi. As EIR ' s Special Reporton the "October Surprise" detailed, Pottinger support in Alabama was both Hashemi's lawyer, and his partner Lyndon LaRouche associate the Rev. Rich­ .andco-consp irator in illegal arms shipments ard C. Boone, who is running for Congress to Iran, and in effortsto delay the release of Real democrats in Alabama's 2nd C.D., was officially en­ the American hostages there. dorsed by the Alabama New South Coalition EIR 's Special Report cites Department endorse LaRouche at its Oct. 3 endorsement convention in Mo­ of Justice documents showing that a high While Bush, Clinton, and Perot roll in luke­ bile. The ANSC is one of two black Demo­ OOJ ofqcial ordered a grand jury to be post­ warm endorsements in the U. S., leading cratic organizations in the state, with over poned "because of national security consid­ members of democracy movements in for­ 2,000 members . The endorsement came as erations" on Jan. 26, 1982. The newly re­ mer communist countries are calling for a surprise to many, who expected George leased CIA documents now provide the Americans to take a good, long look at Lyn­ Wallace, Jr. to win the vote easily. The background. don LaRouche. younger Wallace, like his father, has be­ A CIA memorandum dated Feb. 3, On Oct. 7, the Polish rural trade union come a close collaborator of various black 1982, says that onJan . 26 the CIA Near East Samoobrona's president, Andrzej Lepper, political machines, in a reversal of his previ­ Division was told by the State Department issued a statement describing the crisis that ous flamboyant segregationism. that Ha$hemi was about to be indicted; a Poland faces this winter as the worst in its The other major upset was the endorse­ Near East Division official immediately history . The International Monetary Fund ment of Gwen Patton for U . S. Senate, even briefed theCIA 's Officeof General Counsel "is as bad as Russian Army tanks," he wrote, though she was not on the ballot, over in­ on the "[deleted] sensitivities that surround and the U . S. "is promoting exactly the IMF cumbent Richard Shelby, the senator who this case." The CIA deputy General Counsel strategy of looting our economy in the same forced a death penalty referendum onto the quickly called the State Department, who way it happened with Africa or Latin Nov. 3 ballot in Washington, D.C. and who told him that Pottinger, a former assistant America .. ..I cannot speak for the Ameri­ had attempted to buy ANSC's endorsement attorneygener al, had called State to inform can nation, but I also think that Mr. with a $50,000 contribution. The issue of them that he would be appearing before a LaRouche is the right President for this great capital punishment played a decisive role at federal grand jury the next day. The CIA nation." the convention. During the senatorial memo continued: "The Department of State The Media Service Center of the Arme­ screening committee meeting, Boone told and, of ; course, NE Division immediately nian Constitutional Party released a state­ the Shelby representative, "If you're going drew the correct inference that the purpose ment on Oct. 7, on the return of the party's to support the death penalty, you have to of Pottinger's call was to let the government vice president Hike Babookhanian from an put on the uniform," at which point Boone know that he, Pottinger, had some useful official visit to the U.S. "During his visit, demonstrated by putting on a makeshift Ku gray ma;il material ."

78 National EIR October 23, 1992 Brilfly

• MIKE BILLINGTON'S 77- year sentence for political organizing Reichman: "I'm scared. Here we are in 1992 with Lyndon LaRouche was featured with cure rates lower than countries like Ma­ during rush hour on Sept. 25 on Ven­ lawi and Nicaragua. We can't keep track of ezuela's Radio Rumbos which reach­ 'Suicides' stalk our patients, and all evidence suggests more es the entire nation. One Caracas par­ and more of them have TB that is resistant black Miss. inmates ish dedicated the Oct. 3 mass to to our best drugs. We have turned a disease Billington and the U.S. fight against Civil rights activists in Mississippi are that was completely preventable and curable the death penalty. charging that young black men are being into one that is neither. We should be systematically slaughtered in the state. The ashamed." • THE STATE DEPT . announced charges were made most recently in the case on Oct. 9 that Acting Secretary of of Andre Lamond Jones who allegedly com­ State Lawrence Eagleburger and Sec­ mitted suicide in the Simpson County Jail retary of Defense Richard Cheney on Aug 22. Jones, 18, the stepson of local had held a previously unannounced Nation of Islam Minister Charles X Quinn meeting with Vietnamese Foreign and son of Jackson NAACP President Es­ Hentoffbla sts Calif. Minister Kam. They discussed nor­ ther Jones-Quinn, was found hanging by euthanasia referendum malizing relations and the POW­ frayed shoe laces in the bathroom of the jail. Writing in the Oct. 3 Washington Post, syn­ MIA issue. At a press conference announcing that an dicated columnist Nat Hentoffrevealed that independent autopsy had indicated that the official wording of California's "death • JONATHAN POLLARD was Jones was murdered, the family's attorney with dignity" initiative, as written by the denied an appeal to withdraw his also charged that investigators have uncov­ state's attorney general , flatly declares: guilty plea by the Supreme Court on ered some 20 mysterious deaths of young "This measure would result in some un­ Oct. 13. Pollard, a Navy intelligence black men in the state since 1990 . "The same known savings due to decreased utilization analyst, had pleaded guilty to steal­ people, the same pathologists, the same sys­ of the state Medi-Cal program and other pro­ ing secrets for Israel, and is servinga tem has ruled it suicide every time. Obvi­ grams , including country programs." This life sentence for espionage. ously something is very wrong here ," said amounts to an "invitation" by the state to attorney Chokwe Lumumba. kill off the terminally ill, Hentoff charged. • ALBERT PIKE'S statue should Family and supporters of Andre Jones "Savings will also result, of course, for not be maintained by taxpayer funds, have formed the Mississippi Coalition for overburdened families of the chronically a spokesman for Democratic presi­ Justice, which is planning a rally and march ill," since so many feel they are an over­ dential candidate Bill Clinton said in on Oct. 29 to demand that a special prosecu­ whelming financial burden. "If California response to a question from the tor be appointed to conduct an independent becomes the first place in the world to li­ LaRouche-Bevel campaign, which is investigation. cense its physicians to provide aid in dying fighting to have the statue of the Ku and thereby relieve this guilt, the state will Klux Klan founder removed in indeed have created a stunningly steep Washington. The /ipokesman at Clin­ slope." ton's Little Rock, Arkansas head­ Hentoff pointed out that under Hol­ quarters did not supportremoving the u.S. cure rates for land's legalized system of euthanasia, offensive memorial , however. which is frequently cited by ethicists as a TB below Third World model for "voluntary euthanasia," over • SINEAD O'CONNOR the bald The Oct. II New York Times carried the first 1,000 victims have been involuntarily Irish rock singer who labeled Pope in a series of fivearticles on its front page on killed. "Their physicians were so consumed John Paul II "the enemy" and tore up the epidemic of drug-resistant tuberculosis: with compassion that they decided not to his picture on NBC comedy program "The United States has stumbled into its first disturb the patients by asking their opinion "Saturday Night Live," was charac­ preventable epidemic, a wave of tuberculo­ on the matter," despite the law. "The slope terized as "clearly a very troubled sis with strains so virulent they threaten to has become more slippery in the Nether­ young woman," by a representative return pockets of American society to a time lands," he added, now that the Dutch Pediat­ of the New York Archdiocese in when antibiotics were unknown. The resur­ ric Association's panel on neonatal ethics comments to EIR . gence has been swift, forceful and for many has asked the government to permit euthana­ of America's largest cities, it has come after sia for infants whose " 'quality of life' is • ARKANSAS' educational sys­ two decades of searing budget cuts in pub­ low." tem was recently rated in its national lic-health programs. Without those cuts, ex­ "The American Civil Liberties Union of standing by the University of Arkan­ perts say, the disease could have been all but Southern and Northern California is sup­ sas: 47th in per capita state and local eradicated and new, deadly strains would porting the euthanasia initiative," Hentoff spending; 49th in teacher pay; 43rd never have been able to flourish." wrote . "I wonder how members of that in spending for higher education; 5th The Times quoted the president of the ACLU feel about also legalizing the dis­ in adult illiteracy. American Lung Association, Dr. Lee B. patching of handicapped infants. "

EIR October 23, 1992 National 79 Editorial

The great debate that wasn't

Despite all the hoopla about the first presidential debate campaign and those of previous presidential cam­ of this U.S. election campaign, most voters admitted paigns, have an absolute point of comparison. that, while they gave the "victory" to Ross Perot, noth­ It is well to remember tllat the debt structure which ing they had heard led them to change their vote. In now afflictsthe U. S. federal governmentbega n to take other words , the so-called great debate was a great off in 1978-79 when Federal Reserve Chairman Paul yawn. V oIcker, appointed by Presi(Ient Carterof the Trilateral The major issue to be addressed, the economic cri­ Commission, instituted the, double-digit interest rates sis, was the subject of a certain amount of rhetoric , but which led to the current debt crisis. These policies were so far no candidate except Lyndon H. LaRouche has continued in the Reagan and Bush administrations, and pointed to a solution which can take the United States the errors of VoIcker's high interest rate policy were out of the drastically worsening depression, which is compounded by changes in the tax law to favor specula­ tearing apart the U. S. economy and throwing more and tion over investment, and f4nawayderegulation of ma­

more Americans out of work . jor sectors of the economy .• Both Perot and Clinton talk about the need for infra­ The Federal Reserve System has been the agency structure development, but the sums which they would for the introduction of a bankers' dictatorship in the deploy to this are paltry-in the tens of billions-where United States, which is only slightly less devastating trillions of dollars are needed in order to create some­ than the associated International Monetary Fund dicta­ thing on the order of 6-8 million new jobs. Further­ torship which has destroyed the economies of eastern more , they accept the belt-tightening premises of the Europe and the former Soviet Union. It is on a par with International Monetary Fund. This is particularly true the Bank of England, whidh has played a similar role of Perot, who sees austerity as the path to recovery . in completely destroying the economy of Great Britain. The truth is that the United States can only deal This is the legacy of Lady Margaret Thatcher. with the huge government budget deficitby expanding It is really no rhetoric�l device to say that it was the role of the government; however, this can only be Lyndon LaRouche who won the presidential campaign financed by nationalizing the Federal Reserve System, debate, because he is the only candidate who has been and using the new National Bank as the source for willing so far to tell the truth about the problem, and to expanded credit. More debt financing is not the answer, offer real solutions. For th�s , he is a political prisoner as Alexander Hamilton understood 200 years ago. in a Minnesota federal prison. Unless the American When each was asked what he would do about the people wake up to this truth and vote for LaRouche, Federal Reserve bank, were he elected President, none whatever the immediate o�tcome of the election, then of the three great debaters was willing to deal with the they will have shown them�elves not qualifiedto be the question. LaRouche, on the other hand, has vowed to voting citizens of a republi�. take immediate measures to federalize the Fed, should Just as the governme1l1t of Margaret Thatcher's he be elected. handpicked successor, John Major, is about to collapse LaRouche announced that he did not plan to watch in Britain, so, too, a CI.nton presidency has little the debate , because it had been signaled in advance that chance of surviving four more years of crisis. A vote no serious issues would be addressed seriously. Those for LaRouche is not a futile gesture, even though in Americans who did not follow his course , but sat before this election, he stands little chance of winning. It is their television sets on Oct. 4, could not think other­ a rallying call to the American people to oppose the wise, in retrospect. Many Americans who have destruction of the United States by four more years of watched the LaRouche presidential broadcasts this misgovernment.

80 . National EIR October 23, 1992 S E ·E LAROUCHE ON CAB L E TV

ALASKA • WESTMINSTER- • ROCHESTER- • CHESAPEAKE­ • ANCHORAGE-Anchorage Carroll Community TV Ch. 55 Greater Rochester Ch. 12 ACC Ch. 40 Community TV Ch. 46 The LaRouche Connection The LaRouche Connection The LaRouche Connection The LaRouche Connection Tuesdays-3 p.m. Thursdays-7 p.m. Thursdays-8 p.m . . , Wednesdays-9 p.m. Thursdays-9 p.m. Greater Rochester Ch. 19 • CHESTE RFIELD COU NTY­ CALIFORNIA MICHIGAN The LaRouche Connection Storer Ch. 6 • MODESTO-Public Access • TAYlOR­ Sundays-1 1 a.m. The Schiller Institute Show Bulletin Board Ch. 5 Maclean-Hunter Ch. 3 Mondays-7 p.m. Tuesdays-9 a.m. • • The LaRouche Connection The LaRouche Connection STATE N ISLAND-Staten FAIR FAX COUNTY­ Thurs., Nov. 3-6:30 p.m. Tuesdays-7 :30 p.m. Island Community TV Ch. 24 Media General Ch. 10 Who Owns Your Congressman? Wednesdays-6 :30 p.m. • MOUNTAIN VIEW­ MINNESOTA Sun., Oct. 25-12:30 p.m. Fridays-2 p.m. MVCTV Ch. 30 • MINNEAPOLIS-Paragon Ch. 32 Lincoln 's Enemies Must Still Sundays-6 p.m. Tuesdays-4 p.m. ElR WorldNews • Be Defeated • lEESBURG­ SACRAMENTO- Wednesdays-6:30 p.m. Mon., Oct. 26-8:30 p.m. MultiVision Ch. 6 Access Sacramento Ch. 18 Sundays-9 p.m. Tues., Oct. 27-4:30 p.m. The LaRouche Connection The LaRouche Connection • ST. PAUL-Cable Access Ch. 35 Mondays-7 p.m. Wed., Oct. 28-10 p.m. ElRWorld News TEXAS • • RICHMOND & HENRICO Wed., Nov. 11-1 0 p.m. Mondays-12 noon HOUSTON- COUNTY- DISTRICT OF COLUMBIA Thursdays-5:30 p.m. Public Access Channel The LaRouche Connection Continental Cable Ch. 31 • WASHINGTON-DCTV Ch. 34 NEW YORK Mondays-5 p.m. The Schiller Institute Show The LaRouche Connection .• BUFFAlO-BCAM Ch. 32 LaRouche Speaks Thursdays-6:30 p.m. - Sundays-1 2 noon The LaRouche Connection Tues., Oct. 27-12:30 a.m. WASHINGTON ILLINOIS Tuesdays-6 p.m. Fri., Oct. 30-7:30 a.m. .SEATIlE- • CH ICAGO- • DANSVlllE­ Sun., Nov. 1-1 a.m. Seattle Public Access Ch. 29 Chicago Cable Access Ch. 21 Cooney Cable Ch. 6 Mon., Nov. 2- 1:30 p.m. The LaRouche Connection Who Owns Your Congressman? The LaRouche Connection Tues., Nov. 3-3 :00 p.m. Sundays-1 p.m. Tues., Oct. 27-9 :30 p.m. Wednesdays-afternoon Wed., Nov. 4-5 p.m. • SPOKANE- MARYLAND Fridays-afternoon VIRGINIA Cox Cable Ch. 20 • MONTGOMERY COUNTY- .MANHATIAN­ . • ARLINGTON-ACT Ch. 33 George Bush: The MCTV Ch. 49 Manhattan Neighborhood The LaRouche Connection Unauthorized Biography The LaRouche Connection Network Ch. 17M Sundays-1 p.m. Sun., Oct. 31-5:30 p.m. Thursdays-2 :30 p.m. The LaRouche Connection Mondays-6:30 p.m. aturdays-10:30 p.m. Fridays-6 a.m. $ Wednesdays-1 2 noon

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