April 19, 1977 Vol. IV No.16

EXECUTIVE INTELLIGENCE REVIEW

New Solidarity International Press Service five dollars [THIS PAGE IS INTENTIONALLY BLANK] April 19, 19n Vol. IV No.16 EXECUTIVE INTELLIGENCE REVIEW P.o. Box 1972 GPO New York, N.Y. 10001

TABLE OF CONTENTS

INTERNATIONAL MILITARY STRATEGY·

1 French Intervention Prepares U.S.-Soviet Show- 1 Soviets '20 Years Ahead Of U.S.' down In Africa 4 Carter Seeks Control Of Military Intelligence 3 - Anti-Mobutu Insurgency in Africa 4 OECD Against Carter Energy Plan 5 - BRD For Reworking Of Non-Proliferation Treaty COUNTERINTELLIGENCE 6 - European Press Rejects Carter's Plan 1 NSC Terror Wave Hits 3 CPUSA, FBI Espionage Network Exposed NATIONAL

1 Carter Energy Program To Save N.Y. Banks EUROPE 2 - Burns Demands IMF Dictatorship 4 - Excerpts From Carter's Energy Plan 1 France 5 Legislative Battle Against Carter Energy Plan 2 Italy 9 Opposition To Carter Voting Bill 3 West Germany 3 Special Report - Nazi Networks In Greece ECONOMICS

MIDDLE EAST 1 Foreign Exchange 2 Banking 1 Warhawk Peres Consolidates Victory 3 Business Outlook 2 How Rabin Was Dumped 4 Corporate Affairs 6 Tunisia Report 4 Special Report - GAO On N.Y.C. 6 Special Report - Probe Of New York Banks ASIA

ENERGY 1 Japan, USSR Fishing Talks Proceed

• 1 The State Of World Oil Supplies LATIN AMERICA 6 OPEC Develops Nuclear Power

1 Mexico SCIENCE AND TECHNOLOGY 2 Venezuela

1 The End Of Quarkery 8 Scientists For 'Apollo' Fusion Program LAW 9 Pravda On Fast Breeder Reactors 1 New South's 'New Southern Justice'

SOVIET SECTOR PRESS 1 Moscow Won't 'Play Ball' With Brzezinski 2 Czechs Endorse New Swedish CP 1 Phoenix Probe Publishers Paid Off

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© 1977 EIR News Service Inc. All Rights Reserved. Reproduction in whole or in part without permission strictly prohibited. EXECUTIVE INTELLIGENCE REVIEW

Editor-in-Chief Managing Editors Production Editor Nancy Spannaus Linda Frommer Deborah Asch Don Baier

U.S.A.-Konstantin George • Economics-David Goldman. Energy-William Engdahl Science&Technology-MorrisLevitt . Soviet Sector-Rachel Berthoff • Military StratelY-Paul Goldstein Europe-Vivian Freyre • Middle East-Bob Dreyfuss • Africa-Douglas DeGroot • Asia-Dan Sneider latin America-Robyn Quijano • law-Felice Gelman · Press-Fay Sober

IN THIS WEEK'S ISSUE-

The confessions of Arthur Burns... the U.S. The Carter team needs a crisis. A new Viet­ Federal Reserve chief telegraphed in a nam in Africa? That's what's being manu­ speech last week that the major purpose of the factured in Zaire... with the help of French Carter Administration's "energy con­ President Giscard d'Estaing. This week's servation" package... was to rescue the International Report carries Giscard's state­

"especially vulnerable" dollar monetary ment on French military intervention. . . sharp system from collapse. Lengthy excerpts from replies from Angola and the Soviets ... the who Burns' speech are reprinted in the National and why of the insurgency against Zaire's Report. .. and a full rundown on the massive Mobutu ... and the Trilateral Commission's industrial, labor and congressional opposition scenario for escalation to a thermonuclear the plan is already meeting in the USA. showdown between the USA and USSR.

* * * * * An Israeli preemptive strike in Lebanon? Moshe Dayan's hawks are in control in Tel Aviv ... threatening to detonate a fifth Arab­ The OECD countries... and most of the Israeli war. Our Middle East report has the civilized world... voted down the Carter news ... and an exclusive background feature plutonium ban at last week's international on the men now running Israel, and how they energy conference in Iran. See International masterminded the watergate coup· against Report for the details. Plus excerpts from the Prime Minister Rabin. European press commentary on U.S. energy policy ... and the text of a new statement by the * * *

West German government. . . indicating coor­ West German Attorney General assas­ dinated action under the Non-Proliferation sinated... Italian Socialist leader poisoned. . . Treaty is underway to stop nuclear sabotage. the biggest wave of international terror since the Kennedy era is shaping up. It's program­ med to go nuclear this spring... with "old * * * Kennedy hands" at the control levers ... see Counterintelligence.

* * * Moscow won't play ball with Zbigniew Brzezinski... and told the Carter Adminis­ The CIA's "oil shortage" report is a hoax ... tration last week to stop pretending the USSR and our Energy report documents it. An ex­ had not completely rejected the provocative clusive worldwide country-by-country run­ Vance-Brzezinski SALT proposals to halt down on oil reserves and prospects. .. showing Soviet technological development. For ex­ 2 trillion barrels of oil waiting to be consumed. cerpts from Pravda and other Soviet sour­ Plus a report on why and how the oil ces... and continued "hang tough" statements producing countries are committed to devel­ by Carter officials, see Soviet Sector. oping nuclear power. INTER­ NATIONAL

NATIONAL

ECONOMICS

ENERGY

SCIENCE TECHNOLOGY

In our weekly Economics report ... Japanese industrialists have forced Prime European currency bloc shaping against the Minister Fukuda off course from his plan for a SOVIET dollar ... Europe rejects the Carter-Burns IMF China-Japan axis against the Soviet Union. SECTOR bailout plan ... why Carter scrapped the tax That's the secret behind the resumption of rebate and why it won't save the U.S. Soviet Japanese fishing talks ... See Asia. economy... plans for anti-trust warfare MILITARY against U.S. corporations ... a new onslaught * * * STRATEGY against New York City... and legislative testimony documenting how the New York Progressive forces in Mexico are mounting banks precipitated the city's financial crisis. a public fight against the IMF and Carter COUNTER­ INTELLIGENCE * * * Administration plans to grab Mexican oil. U.S. Senator Javits and a State Department team are in the country to crush them ... A The perils of empiricist science... this EUROPE similar battle is shaping up in Venezuela ... see week's Science and Technology section ex­ Latin America. plores the physicists' pursuit of the quark ... shows why they're chasing a mirage. Plus the * * * text of a letter to Carter by top nuclear scien­ MIDDLE EAST tists calling for an "Apollo-style" program for A Nixon-era "dirty tricks" team is still fusion development... and a report from operating in North Carolina... under the Pravda on the stepped-up Soviet breeder protection of the same "New South" networks reactor program. which launched the career of Jimmy Carter.

* * * Their assignment. .. a pilot project to destroy the electoral process ... see Law. ASIA One of the USA's top military intelligence * * * analysts says the Soviets are 20 years ahead of the U.S. in vital areas of defense technology ... This month's Wisconsin mayoral election See Military Strategy for excerpts from Major was the testing ground for new methods of General Keegan's analysis . .. and a report on LATIN vote fraud to be legalized under the Carter Trilateral Commission efforts to replace AMERICA Administration's universal registration bill. America's competent military professionals Our National Report has the story... together with Rand Corp. war-gaming quacks. with a report on the state of national opposi­ LAW

* * * tion to the Carter package.

Giscard's Zaire operation has laid a giant * * * trap for the Gaullists ... are they walking into PRESS it? The Andreotti government in Italy con­ The Institute for Policy Studies is repor­ tinues maneuvers for t-ruble trade financing tedly making direct payments to media from the CMEA countries ... MBFR peace and outlets running its "Phoenix Probe" smear development initiative on tap in West Ger­ job on Sen. Barry Goldwater and the Team­ many ... see Europe. Plus a special report on sters union. See Press for further background the fascist networks Rockefeller is using to on the IPS pedigrees of the would-be destabilize Greece. watergaters. I French Intervention On Behalf Of Carter Prepares U.S.-Soviet Showdown In Africa

President Valery Giscard d'Estaing's April 10 an­ forward on the offensive in about a week. The Zaire nouncement of French military support for the rapidly government has already barred all foreign correspon­ crumbling regime of Zairean President Mobutu is an act dents from the southern Zaire regions as this offensive is on behalf of the Trilateral Commission - one which prepared. The French action caps a month-long Atlan­ could place Africa in the center of a. U.S.-Soviet ther­ ticist press compaign to bill the Shaba rebellion as an monuclear showdown. The announcement has prompted incident of Soviet and Cuban intervention. a storm of protest in France and around the world, and The immediate target of the French intervention - this outrage is expected to grow as it becomes clear that which bears an eerie resemblance to the beginning of the Giscard's aim is to recreate for the U.S. the NATO­ war in Vietnam - is the socialist government of Angola African coalition that unsuccessfully sought to crush the which won its independence after a long and bitter fight Angolan revolution during 1975. against U.S. and French forces and their allies in Zaire The military buildup in Zaire was revealed by Giscard and South Africa. The current military preperations when he announced his unilateral decision to order a strongly suggest to a plan to drive the insurgents into French military airlift to carry Moroccan troops and Angola and then attack Angola itself, making the supplies to Zaire, ostensibly to put down a rebellion in situation a point of Western confrontation with the Soviet Zaire's copper-rich southern province of Shaba. French Union. planes are also bringing in trucks and artillery, while The Angolan Politburo has recognized this potential French and Belgian officers are trying to put some back­ and issued a statement April 12 through Politburo bone into the collapsed Zaire army by bringing in mer­ Secretary Lucio Lara : "The concentration of im­ cenaries to provide the necessary secondary leadership perialists in Zaire is aimed at preparing an aggression to handle the more sophisticated heavy weapons. There against Angola and at preventing the development of the is also· a contingent of about 50 French pilots with a struggle for liberation in southern Africa. squadron of Mirage jets, operating from the Kolwezi The U.S.'s top ally in the area, South Africa, is giving airport. who are flying bombing missions against the flanking support to the Zaire-based drive on Angola. insurgents. as well as across the border into Zambia. Three villages in southern Angola were the scene of There are now over 100 French military men in Zaire, fighting between government troops and rebels according to Agence France Presse. and it is being associated with the UNITA countergang, which is known reported that the French-led Moroccan troops are to have South African links, according to the Washington reconnoitering and deploying for battle around the Star April 13. The fighting is reported along the border southern Zaire town of Kowlezi. preparing to move with Namibia. whiCh is under South African military occupation.

Declarations of An golan in­ Africa Divided volvement in Zaire "are psycho­ The French intervention has immediate implications for the stability of the rest of Africa. Africa has begun to ological preparations for the polarize between "conservative" and "radical" states - realization of a military ac tion a process that, unless baIted, will irrevocably split the continent and aid the Carter regime in forcing Western with' the aim of destroyin g the Europe to back the Zairean adventures of Giscard and Moroccan King Hassan II. Limited support for the An golan revolution and instal­ French role has already been expressed by Tunisia, ling in the Pop ular Republic of Senegal, Liberia, Ivory Coast, Gabon. and Kenya. Some of these nations have reportedly granted overflight and Angola a neocolonial re­ landing rights to French aircraft ferrying men and war material to Zaire. gime" - Angolan Foreign Af­ Right-wing Arab and African leaders, and certain fairs Minister Almeid to the states duped into cooperating with the Carter-NATO French Government April 12. forces, have pledged their active support for fomenting a crisis in Zaire, despite Angolan protests to the

INTERNATIONAL 1 Organization of African Unity (OAU). Besides Morocco. which has com m itted troops to Zaire. both Egypt and Former Green Beret Organizing Sudan are reportedly considering military assistance. President Numeiry of Sudan. whose foreign minister O e a i n spent last week U.S. Merc�nary p r t o closeted with Carter . aides in Washington. warned that "any danger to which Zaire is subjected will have direct effect on SUdan. its securIty. New Solidarity Intern�tional Press Service has and its national unity." The Egyptian press quickly learned that Robin Moore. the author of Th e Green picked up the refrain. with the daily AI Akhbar com­ Berets. and himself a former Green Beret in the menting that "everything which threatens Sudan U.S. Special Forces. is now in New York for a threatens Egypt also." meeting of the leaders of the U.S. mercenary Concurrent with Numeiry's statement (which was networks to recruit for large-scale interventions very similar to anti-communist ranting from Egypt's into Africa. Moore. who has a long history in President Anwar Sadat during his visit to Washington military intelligence and is now a colonel in the two weeks ago). Ethiopian radio reported April 12 that Rhodesian armed forces. reportedly told a con­ r agg essors armed by Sudan and supported by Sudanese fidante that Africa "is going to blow up." Col. artillery have invaded Ethiopia. Ethiopian President Moore and his fellow conspirators were involved in Mengistu responded with a call for a national recruiting mercenary forces for the war in Angola. mobilization to counter "an aggression supported by for which several American and British prisoners foreign forces." Thus the crisis in Zaire. and the were later executed by the Angolan government. diplomatic pressure and' blackmail aimed at weak African leaders. have already spread the danger of a regional explosion into the Horn of Africa. comprising with "dry runs" and other preparations being made two Sudan. Ethiopia. Somalia. and Kenya. weeks before the decision was anl).ounced - suggesting On April 13. Mirage jets from Zaire bombed villages i.n that the move was unilateral on the part of Giscard. The neighboring Zambia. triggering an official protest by the EEC foreign ministers are scheduled to meet on April 18 Zambian government to Zaire. and threatening an ex­ to discuss. among other matters. the crisis in Africa. tension of the danger of fratricidal wars throughout A statement from the Soviet news agency TASS made Africa. the EEC's choice extremely clear: either condemn the The bellwether state of Nigeria. which is so far of­ French-sponsored effort to ram Carter's foreign policy ficially uncommitted. will probably swing the balance. down the collective throat of Europe. or face the prospect Shouldthe Nigerians act quickly to denounce the French of a U.S.-Soviet confrontation. The conflict in Zaire is intervention as a U.S. plot to destroy Africa's potential to "strictly internal," said TASS, denying U.S. charges of lead the fight for the new world economic order. then the Soviet backing to the Zairean insurgents. "The leading entire OAU will most likely follow suit. as it did during circles of the Soviet Union deem it inadmissable for any the Angola war in 1975-76. But so far the Nigerians have external force to interfere in the internal struggle of only hedged: in fact. last month they helped set up Zaire." Angola by agreeing to a request from Carter to The crucial European country in this regard, West "mediate" between Zaire and Angola - a hoax that only Germany initially stalled on the question. The foreign served to give credibility to NATO charges that Angola ministry issued a: carefully worded statement, saying : and its Cuban allies are begind the Zaire "invasion." "We were informed and we fully understand the reasons However. Nigerian External Affairs Minister Col. for the intervention of the French, We will follow the Joseph Garba indicated a possible alignment with developments in Africa very carefully." However, in Angola when he met with the German Democratic what could be �n important harbinger of future West ' t ' Republic's Vice President Horst Sindermann. on April German polic . tha gove riTrnent sent a planeload of 14. Garba reaffirmed after his meeting that Nigeria medical suppliesy to the Zaire government on April 14. an valued socialist solidarity highly. and practiced this act important for its symbolic vallie. principle especially with African liberation movements.

France VS. The EEC The critical danger of the French adventure in Zaire is TASS: Foreign Intervention Giscard's preposterous claim that he is acting not only France alone. but "in defensp of the West." In a In Zaire 'Inadmissible' television speech April 12. Giscard boasted that the French-Moroccan action was "a signal of security and a Th e following official sta tement by the Soviet news signal of solidarity to Europe's friends in Africa." Under agency TASS wa� printed in all the Soviet dailies April tremendous pressure from the French left and other 13: European countries. Giscard defensively claimed that he had "informed in advance" France's Common Market For the last several weeks in Zaire, as is known, partners - but did not dare to claim European SUpport disturbances have been occurring: in the southern region the action. This controversy has been further fueled by of the country (the former province of Katanga) actions revelations that the airlift had been planned in advance. began against the authority of the central government. It

2 INTERNATIONAL seemed that the situation was perfectly clear - that this foreign forces in the internal struggle in Zaire. Each .

was a purely internal conflict which should not concern people itself - and only itself - can resolve its internal anybody at al\ outside the country. affairs. And let nobody nourish illusions that the people However right away hunters appeared, ready to in­ can be deprived of their inalienable right. terfere in these events. These hunters also exist in the West, in the Middle East, and the Far East. Several western countries, and also China, began shipping arms and military equipment to the central government of Zaire in no time flat. Morocco sent a contingent of its Giscard Claims French Intervention troops to Zaire. The racist regime of South Africa is also beginning to interfere in the events of this country. Was Made On eha Europ� Recruitment of mercenaries to be sent to Zaire is going on in several western countries. B lf Of from these facts, various As is evident at first glance Th e follo wing are excerpts of French President hands are now outstretched to Zaire, but al\ of them are Giscard's Apri112 sp eech. motivated by one desire - to tie up the people of Zaire with their own affairs. These are the hands of those who We wanted to give two signals... First, a signal of would like to create a new international problem, to security. I do not want the African states, friends of . create yet another hotspot of dangerous tension in the France. when they are within their rights and their world. Some people are obviously impatient to warm security is threatened. to feel abandoned. They will not their hands at a fire. onto which they themselves are be abandoned. As for the signal of solidarity. it is the fact tossing the flammable material. of showing the tight solidarity which exists between In an attempt to cover up their interference in the Europe and Africa. Europe cannot be disinterested from internal affairs of Zaire. the imperialist forces and their what is happening on the African continent... And we henchmen, for a start, put into eirculation the menda­ wanted on this occasion to give a signal of solidarity cious story that there has been an invas ion of Zaire by between Europe and Africa. Angolan troops and Cuban soldiers. This lie did not last First, a very important point: this is not an in­ long. Today nobody even tries to deny that there is not a surrection ... These are elements which came from the single Angolan, nor Cuban, among the rebels in the south outside and penetrated Zaireian territory... Infiltration of Zaire. And nevertheless the slanderous campaign took place in the south of the country, from a neighboring continues. trying to cast a shadow over Angola, Cuba. territory (i.e:. Angola - NSIPS) ... What is certain, ac­ and aJso the Soviet Union. which supposedly is behind the cording to observers on the spot, is that the elements events in Zaire. which infiltrated Zaire were elements recently trained. This is an old. worn-out device, Ike when the thief. to They were not the gendarmes from Katanga coming detract suspicion from himself, cries louder than every­ back to their country after twelve years with their old body else: "Catch the thief!" However in politics this weapons ....

device does not promise success to those who resort to it. France has acted for its own account. And very often, . The people of Africa know how to differentiate genuine in our national political debates. there is an (expressed) friends from foes especially from their enemies. desire for France to have an independent policy. Here is The Soviet Union decisively rejects as absurd any one ...I consider that the fact that the African problem falsifications about its participation in the events in was stressed in its importance by France in the name of Zaire . Leadership circles of the Soviet Union at the same Europe. and not by France outside of Europe, is in itself time consider inadmissible the interference of any a sign of an independent and responsible policy.

The Anti-Mobutu Insurgency In Zaire

The revolt initiated in southern Zaire by the Congo attempt to send reinforcements to Shaba by train, but National Liberation Front (FNLC) has spread rapidly to when it arrived half of the reinforcements had disap­ other areas of the country. leading to an accelerating peared. Frantically shuffling his staff. Mobutu has collapse of Mobutu's one-man patrimonial system. The removed Col. Eluki Monga Aundu from command in open acceptance of the insurgents by the population. and Shaba following the collapse of the Zaire army there, the spread of the anti-Mobutu revolt to other areas of the replacing him with Gen. Singa Boyenge. In addition. country have discredited initial attempts to portray the Mobutu has replaced his chief of staff Gen. Bumba with revolt as a mercenary-led secessionary movement that Major General Babia Zongbi. wanted to separate Shaba from the rest of Zaire. While the FNLC has set up an administrative structure in Shaba. leading Mobutu to charge that they were The FNLC has gained control of one-third of Shaba bribing the population with food and clothing. leaflets province without doing any fighting. The rebels have calling for Mobutu's overthrow also began appearing in been welcomed by the population. and entire units of the the capital. Kinshasa. and the region of Bas Zaire, 1,000 Zaire army have defected to their ranks. Mobutu did miles from Shaba.

INTERNATIONAL 3 What is the FNLC? regions of Zaire for political reasons, set up escape Zaire and the western press have attempted to give networks to get to the various countries surrounding credence to allegations of an invasion of Shaba province Zaire. Many went to Angola, then a Portuguese colony, by charging that it was being carried out by "Katangan where they were kept in camps by the Portuguese. Over gendarmes." The Katangan gendarmes were the the years they were joined by family members and military force of Katanga (later changed to Shaba) others escaping from all regions of Zaire. During the leader Moise Tshombe, who allied with European circles early periods of their stay in Angola, some of the exiles in the early 1960s for a federated Congo (name later joined with the Portuguese in fighting a Wall Street­ changed to Zaire) in an attempt to prevent a Wall Street backed tribal countergang, the predecessor to the in­ takeover of the Congo under the guise of the intervention famous FNLA of Mobutu's brother-in-law, Holden of a U.N. peacekeeping force. Roberto, then being deployed into Angola from Zaire. The Wall Street effort to "reshape the structure of The intention of these Zaire exiles has always been to power," as George Ball put it, in the Belgian Congo was return to Zaire. successful. Following the defeat of the Tshombe forces, People from these exile communities in Angola are the integration of the Katanga gendarmes into the Congo now being described as mercenaries who fought for Army was negotiated under OAU auspices. However Tshombe. On June 19, 1968 they founded the FNLC in they were not trusted by Mobutu, and they were kept in exile, which is committed to fighting regionalism and two camps, and many of them were executed. tribalism , as well as overthrowing the regime of Mobutu. Beginning in 1967 people from the former Katanga During the civil war in Angola, the exile Zaireans sup­ region, as well as many people being repressed in other ported the MPLA, which became the government.

DECO 'War Machine' Builds Against Carter Energy Plan

Cabinet-level officials in Tokyo have given the Carter banner in his fight against nuclear technology advances, Administration a ten-day deadline to change the terms of and if necessary, to completely rewrite a new treaty. negotiations with Japan for enriched uranium supplies On April 7, Armin Gruenewald, press secretary for and end the current deadlock in the talks, or face a West German Chancellor Schmidt, stated at a press possible break in negotiations. This announcement, conference, "numerous countries have made com­ which was reported by the Cuban press service Prensa prehensive technical, economic and financial ex­ Latina, comes in the wake of a recently concluded in­ penditures for the use of nuclear energy in accordance ternational conference on the problems of nuclear with Article IV of the Non-Proliferation Treaty ...Any energy transfers held in Persepolis, Iran, which wit­ national program for peaceful use of nuclear energy nessed nearly global opposition to the Carter energy must be based on the specific circumstances of the program. In the words of the French daily Le Figaro, the country involved ... This government accordingly favors Persepolis conference "was transformed into a veritable that as many countries as possible ...be included within war machine against the new policies of President the framework of international consultation in order to Carter." examine thoroughly aspects of an effective non­ The conference, attended by 500 delegates from proliferation policy, in conjunction with peaceful use of

throughout the advanced and developing sectors, nuclear energy .... " emerged as the unified expression of world refusal to Then, on April 12, London's Financial Tim es stated in accept the Carter proposals for continued embargo of the context of widespread coverage of the angry in­ export equipment or technology that would permit ternational reaction to Carter's energy policy that the uranium enrichment or reprocessing outside the United differences in nuclear energy development in countries States. The absolute ban on technological development around the world "ought to compel an international which Carter thereby intends to impose on Europe and approach to the energy question, which in its way is quite the Least Developed Countries (LDCs) has forced these as serious as the question of nuclear proliferation. It is countries to a point of final break with the current U.S. far from clear that President Carter's program has Administration. anything to do with such an approach." The Tim es Western Europe is now engaged in a process of predicted that Spain may step forward as the first developing a strategic realignment of its overall foreign country to openly defy Carter's appeal for a ban on policy as a reSUlt, according to press sources and political plutonium extraction, by issuing a large contract to a spokesmen. West Germany and Britain are taking the European firm to construct a nuclear energy cycle. lead in these deliberations. This past week, represen­ Similarly, the Shah of Iran, formerly a reliable ally of tatives of both countries issued statements calling for an U.S. Atlanticist interests, was forced to issue a strong international dialogue to re-evaluate the Nuclear Non­ statement at Persepolis endorsing fusion energy as "the Proliferation Treaty which Carter has raised as his energy of the future" and defending the right of the LDCs

4 INTERNATIONAL to nuclear technology. He also made a broad swipe at The Italian daily Corriere della Sera is already Carter's SALT provocations of the Soviet Union, while predicting that Carter may be delivered a major "sur­ debunking the bogus rationale being forwarded to justify prise" by Western Europe when the meeting of the a policy of destroying the present and future world London Group of nuclear energy-producing countries nuclear industry. Clearly referencing the Ad­ convenes in London on April 28. In an article which ministration's recent demand for a halt to technological echoes statements from West German officials a week progress in Moscow, the Shah said: "Only a earlier as well as the current threats from Tokyo, breakthrough in nuclear disarmament negotiations can Corriere warned that Carter's "nuclear blackmail" end nuclear proliferation," not the collapse of the would be aborted by the possible announcement in nuclear industry. London of a European agreement with Moscow for Soviet supplies of enriched uranium to maintain continental "Two Irreconcilable Philosophies" nuclear power production on line at present rates. Following on the heels of the Persepolis conference, the West German press has escalated its attacks against In the face of such massive and coordinated opposition, the Carter Administration, citing the gulf of "irrecon­ the Carter Administration is able to muster only cilable philosophies" existing between Bonn and hysterical hopes for a successful "bluff" to force the Washington. Over the past week,. the leading West Europeans - and particularly the powerful West Ger­ German newspapers such as the Sueddeutsche Zeitung, mans - to go along with Carter's policies! When con­ Die Welt. Ha ndelsbla tt and others have broadcast fronted with the evidence of Europe's firm opposition to Carter's "thorough isolation" from the rest of the world, Carter's "energy conservation," deindustr ialization including leading former U.s. allies. schemes. a high-level State Department source was only Most recently the press outcry against Carter has able to repeat: "Schmidt will back down when he meets begun to merge with exposes of the actual agencies in Carter face to face (at the May 6 London economic control of his Administration. The Sueddeutsche Zeitung summit}." In any case, he added, we will have the ad­ exposed the Rockefeller-created Trilateral Com­ vantage that the summit will begin before Congress has mission's control over Carter and its blatant disregard had a chance to voice its own opposition to Carter's for such "anachronisms" as national sovereignty. energy policy.

West German Government Calls For

Reworking Of Non-Proliferation Treaty

Following is an unofficial tra nslation of a statement by have signed, has provided the moral, political and legal German Federal Government spokesman Armin conditions for convincingly, successfully and effectively Gruenwald in Bonn on April 7, 1977: developing non-proliferation. Outstanding significance is attached to confidence in this treaty, in its durability and The peaceful use of nuclear power, for many nations, is in the credibility of its co-signers. The same applies to a necessary source of energy to ensure their social and strengthening the existing international control economic progress. Even now, numerous countries have measures with the goal of comprehensive oversight. made comprehensive technical, economic and financial This government, in the international discussion on the expenditures for the use of nuclear energy in accordance peaceful use of nuclear energy within the framework of with Article IV of the Non-Proliferation Treaty. the further development of an effective non-proliferation But misuse of parts of the fuel cycle can, nonetheless, policy, is guided by the following considerations : lead to nuclear-weapon capacity. The Federal Republic of Germany is in agreement with all countries conscious 1. Any national program for peaceful use of nuclear of their responsibilities and concerned with maintaining energy must be based on the specific circumstances of world peace with the goal of preventing and coun­ the country involved. This government represents the teracting such misuse with all available means. This view that national nuclear energy programs must be in policy has been followed consistently and emphatically accordance with the Non-Proliferation Treaty. The by the Federal Republic of Germany. As early as 1954, nuclear energy program developed by this government, the Federal Republic agreed to abstain from production and our non-proliferation policy, correspond to those of nuclear weapons. In 1969 this country signed the Non­ requirements. Proliferation Treaty. In the future, too, we shall un­ 2. This government accordingly favors the inclusion of dertake all efforts towards continuation of an effective as many countries as possible, particularly the non-proliferation policy. "threshold" countries, within the framework of in­ In the view of the German Federal Government, the ternational consultation in order thoroughly to examine Non-Proliferation Treaty, which more than 100 countries aspects of an effective non-proliferation policy, in con-

INTERNATIONAL 5 junction with peaceful use of nuclear energy, and in this procedure, the German Federal Government at­ order further to develop this non-proliferation policy. taches primary importance to the working out of com­ prehensive international control measures. 3. The goal of th is consultation should be to promote 4. A non-proliferation policy must, in order to be ef­ the further development of agreements that still more fective and successful, be supported by the agreement of effectively ensure non-proliferation - multinationally, the greatest possible number of members of the Com­ non-discriminatory and in a generally binding form . In munity of nations.

European Press Agrees: Carter1s Plutonium Po licy Will Isolate USA

Th e fo llowing is a grid of this week's European press plutonium for the development of atomic bombs ; now reaction to Ca rter 's plutonium ban and energy policy. they want to ban it. This fight is senseless ; fast breeders are very economical. The USA has no problems in sup­ West Germany plying its own energy needs.

Die Welt, April 13: International criticism of Carter is Frankfurter Allgem eine Zeitung, April 12: Carter's increasing .... Bonn sees thestatem ents of IAEA head Dr. scarcely hopeful theses are derived from a study made Eklund as being extremely important, since he is respon­ by the Ford Foundation. Their contempt for plutonium sible for all controls on nuclear proliferation. Peter and their tough recommendations could lead to a Hermes, State Secretary at the Foreign Ministry, has situation in which a group of energy-poor nations will act stated that Bonn is not willing to join Carter's policy. against the USA, which in turn would injure America's Hermes also stated that the rumor circulated in News­ cause rather than aid it. America has never put itself in week about a "secret deal" is utterly false. the shoes of those countries which almost entirely depend on foreign resources for their energy supplies. For these countries, their risk and dependency are becoming even more pressing. Japanese Prime Minister Fukuda was France speaking for all of them when he made clear to Carter that Japan will not give up plutonium. The time is ripe for a new concept, modeled on the old precept " Atoms for Ma tin de Paris, April 13: "To transpose this kind of argu­ Peace." ment to the rest of the world, is, to say the least, to have an egocentric and unrealistic approach to the energy Die Welt, April 12: Two variant philosophies are now con­ problem of the other countries concerned," according to fronting each other. The time for a decision (on nuclear one French official.. . Another remark which comes up shipments to Brazil - cd.) has been well chosen by the frequently in the comments of Europeans : "It is clear federal government of West Germany. It was well chosen that the Carter program puts off to the Greek Kalends because it comes just prior to Carter's April 20 speech. the development of fast-breeders consuming plutonium Following that date, such a step would have been more and the Americas are very far behind European techni­ difficult. The majority in Europe is of the opinion that cians in this area ... At the nuclear conference in Chiraz, Carter is increasingly isolating himself. Even if all of this Iran, several delegations from the developing countries speaks in favor of Bonn's decision, it is not without risk. manifested their bad humor towards the American It is naive to believe thatWashing ton will make accomo­ delegation. And some, who have the feeling that they dations. But such a confrontation can also be continued were mystified, are threatening to denounce the nuclear far behind the scenes. Carter would be ill-advised if he non-proliferation treaty, because they consider the were now to pull out a big stick. American initiative a violation of Article IV of the treaty, which states that the signers have the right "to under­ Siiddeutsche Zeitung, April 12: West German policy is a take research, produce and utilize nuclear energy house without foundation. For the moment, Carter may towards peaceful ends, with no discrimination." leave aside open threats, but there are still no illusions : he has made up his mind. Bonn and Washington have Le Figa ro, April 12: "The decisions made by President different foreign policies. This can seriously burden the Carter last Friday could have, in the weeks to come, foreign policy situation of the Federal Republic. Bonn's important consequences for world peace. The new fear is that the USA, Canada and theSoviets will continue strategy adopted to limit the threat of dissemination of to fight them ; the question is, are they strong enough? the atomic weapon could have the opposite effect... The Iranian meeting (on nuclear technology - ed.) ...was Frankfurter Rundschau, April 12: Carter wants to move transformed as of yesterday into a r eal war machine against plutonium. At first, the U.S. couldn't get enough against the new policy of President Carter. Among the

6 INTERNATIONAL 500 participants who came from all the horizons, there London Tim es, April 11 : Printed a letter by Conservative could be found in effect no experts who would support the Party spokesman on Energy, Tom King, addressed to the new American nuclear strategy ... Only the French camp Tim es and Prime Minister Callaghan calling for a full showed some discretion which surprised certain ob­ parliamentary debate as soon as Parliament returns on servers." April 18 to discuss the ramifications of the Carter nuclear statement. According to the London Tim es of April 11, Britain King's letter reflects the fact that "MPs of all parties are concerned about the implications of President Carter's statement for the British nuclear power industry and the London Sunday Tim es, April 10: In an Op Ed Ian Smart, development of fast breeder reactors, where the United Director of Studies, Royal Institute of International Kingdom has a decisive lead." Affairs, stresses the impossibility of implement­ ing a conservation program adequate enough to cut back all dependency on nuclear energy, and warns that The Financial Tim es, April 13: Has a strong editorial even if Europe adopted the Carter program in toto, by attacking Carter's unilateral action on nuclear policy, the year 2000 there would still be "a deficiency equi­ the editorial follows continuous coverage in the valent to the energy from another 240 nuclear reactors Financial Tim es on Europe's and the Third World's re­ which have not yet been ordered." Attacking any "free­ jection of the U.S. stand. The paper rejects Carter's market" conception of energy supply, Smart warns, tactics to limit fuel reprocessing, warning that "by impli­ "The world food market has always been balanced by cation, this would increase rather than reduce the price - but a price which has included famine and some- . chances of proliferation as other countries sought not times war. It will be no consolation to have the energy only their own access to enriched uranium, but also their market balanced by its own version of starvation. That is own reprocessing facilities." "The correct approach," simply a prescription for intolerable domestic and inter­ the editorial concludes, "is to intensify these inter­ national friction." Smart concludes by calling Carter's national discussions and bring in the customers as well � "policy gap" as critical as the "energy gap" itself, and as the suppliers. President Carter, however well inten­ warns that "the policy gap on energy, like the policy gap tioned, has jumped the gun by acting unilaterally. He ' on nuclear proliferation, has to be filled internationally, should not be surprised if, however unjustly, the U.S. is in concert, and now." also suspected of furthering commercial aims."

Italy London ...to express their dissent against the U.S.'s uni­ lateral position and the presumption that other nations would accept to depend on the USA government and in­ Carriere deUa Sera , April 9: "Europe does not share the dustry for their energy supplies." opinion of the U.S. government either on the risk or on the economic inconvenience of new technologies. as Sale 24 9re, April 14: "It is difficult for Europe to accept demonstrated by the opposition of France and West Ger­ Carter's dictate ... The internationalization of the energy many to efforts by the United States to suspend sales to fight (after Carter's decision) is not unpleasant to Bonn, Pakistan and Brazil." which before was facing the Brazil question alone ... Bonn will pick up the U.S. challenge ... Is Carter's hope that Carriere deUa Sera, April 13: "There is the possibility Europe will follow the U.S. an illusion? Regarding Ger­ that at the London Meeting of the Group of Seven the many, yes. Carter's decision was not a surprise for the Soviets will take sides with the Europeans and will offer Germans and, deep inside, they did not dislike it. Now them uranium supplies ... This will render Carter's pres­ Bonn will find broader support... France cannot re­ sures useless." nounce to the self-breeder reactors ...while rumors have it in Paris that the countries excluded from nuclear ' Unita, April ]3: "Carter's stance has already provoked energy - the Third World - could organize a pressure the first reactions in Europe which seem destined to act group to stand up for their nuclear rights�" as a catalyst for a much broader opposition to the White House's policy ... Renauncing this (nucle;lr - ed.) tech­ CORRECTION nology would mean to continue to depend on USA electro­ nuclear facilities and on American supplies of enriched TENG HEA DS ANTI-MA OIST FA CTION uranium." The fourth paragraph of last week's (EIR No. 15) article on China's leadership faction fight inad­ Un ita , April 14: "The debate on the nuclear plants has vertently reversed the identification of the factional been re-opened after Carter's speech ... Great Britain is leaders. Hua Kuo-feng heads the "continuity" first in line in the construction of nuclear stations ... Prime Minister Benn has expressed strong reservations faction, supported by Wu Teh and Wang Tang­ hsing, and Teng Hsiao-ping heads the anti-maoist regarding the revision of American strategy ... Op­ forces, supported by Yeh Chien-ying and Hsu position will come out unanimously by the end of the Shih-Yu. month when the (European) countries will meet in

INTERNATIONAL 7 NATIONAL

Carter Energy Program To Save New York Banks

In what the New York Tim es bills as his "first major 15 press conference reported that the CIA had just issued address on international matters since the Arab oil a new estimate of world oil reserves which indicates that embargo of 1973-74," Federal Reserve chairman Arthur reserves are much lower than he had imagined and that Burns told a New York gathering at Columbia University the situation is even worse than previously thought. April 13 that unless the U.S. population accepts Jimmy Lurid press reports predicting an outbreak of "nuclear Carter's "painful" energy program, the world monetary terrorism," or an Arab oil embargo have proliferated. system will shortly collapse. Nearly every major media outlet has become a conduit "The energy program being prepared by President for the Administration's statements about the necessity Carter unquestionably will entail sacrifices by many of for energy "conservation" and "sacrifice." our citizens," said Burns. "It is essential, however, that A draft of Carter's energy proposal, which will be of­ we at long last recognize that a decisive conservation ficially unveiled April 20, was reported in all the major effort must be a major part of our nation's economic press this week, lays out in detail what Carter has in policy." If this isn't done immediately, and if the store for the country on the energy question: a possible Trilateral administration fails to push through - over $2,500 tax on "gas guzzling cars," a five-cent a gallon tax the intense West European opposition - its scheme for increase on gasoline every year that gasoline con­ rescuing the New York banks via an International sumption doesn't decline by 2 percent; imposition of a 50 Monetary Fund (lMF) bailout, then, Burns warned, the percent tax on industrial users of natural gas to force world financial system will become "especially them to switch to coal; and raising the price of vulnerable" to collapse. domestically-produced oil by a full 100 percent, among With this blunt statement, Burns has dispelled all the other measures. propaganda regarding the threat of "nuclear The Administration is taking full advantage of the terrorism," scarce fuel resources, "potential'� oil em­ Congressional recess to prime its forces for an assault bargoes which the Carter Administration has proferred when Congress reconvenes April 18. On April 21, the day as justification for its energy program; instead, a after Carter presents his energy program to the public ranking federal official has openly admitted that the sale (in what one White House aide says will be a "sky-is­ purpose of the energy program is to prop up the tottering falling" speech), Schlesinger and other members of the Rockefeller banks. Administration will deploy to Capitol Hill en masse to regale Congress with "expert" testimony on behalf of the " Th e Moral Equivalent Of War" proposal, while conducting back-room armtwisting The resounding rejection of the twin pillars which sessions with recalcitrant Congressmen. support the Carterites' power - their energy program In an attempt to get Congressional support for his and their IMF bailout plan - both domestically and in energy proposals Carter has withdrawn the unpopular Western Europe, has created a situation in which the $50 tax rebate, restored funds to some of the cut water Carter forces know they must move outside Con­ projects, and hinted that nuclear projects will also be stitutional limits if they are to get off the ground their restored. The April 14 Wa shington Post reports that "no energy" scheme for keeping the banks afloat. White Carter may speed up the nuclear regulatory licensing House energy advisor James Schlesinger spelled this out procedure and restore funds to fusion research and on WNEW-TV's psywar special last night, "We Will development projects. A spokesman for the Rockefeller­ Freeze In The Dark," when he compared the Carterite linked Sierra Club said this week that the President's energy program to "Pearl Harbor" and demanded "the "pro-nuclear" turn around shouldn't be taken too moral equivalent of war" in order to carry it out. seriously. The Carter Administration and its Wall Street sup­ Congressional opposition could stall the package in­ porters cannot risk any delay in implementing the definitely. The fearful Carterites have therefore suc­ energy program, and are therefore now preparing to ceeded in setting up a House Select Commiteee on force it through by any means necessary, including Energy, chaired by Rep. Thomas Ashley (D-Ohio) , for deliberately provoking a constitutional crisis of the sole purpose of maneuvering the package around all uprecedented proportions. potential snags. In the last week, the Carter forces have subjected the If the package still moves too slowly, the Ad­ population to a psychological warfare campaign, the ministration has a few other tricks up its sleeve. A White likes of which haven't been seen since the notorious Creel House spokesman revealed last week that the Ad­ Committee of World War I. President Carter in his April ministration would rely on government regulatory

NATIONAL 1 agencies. such as the Nuclear Regulatory Agency (which Schlesinger - would be able to wield. (See below) has sabotaged the construction of the Seabrook. New On the very day that Flowers' attack appeared in print, Hampshire nuclear power plant) . as well as im­ Senator Ted Kennedy (D-Mass) moved to strengthen the poundment of funds and other extra-legislative measures Department's powers even further. Kennedy introduced if Congress proves obstructionist. an amendment to the bill authorizing the Department to create its own Office of Assistant Secretary for Com­ Gutting Congressional Power petition and Consumer Affairs to oversee "every aspect The same anti-constitutionalist approach is embodied of energy production, transportation, distribution, in Carter's proposal for a new Department of Energy to financing, retailing, and even use." In remarks ap­ be presided over by Schlesinger. In a blistering attack on pended to the amendment, Kennedy makes it clear that the proposal which appeared in the April 7 Congressional its purpose is to beef up the Department's capacity for Record, Rep. Walter Flowers (D-Ala) , the outspokenly waging war against industry, and specifically for pro-fusion energy chairman of the House Subcommittee breaking up the independent oil and natural gas com- , on Fossil Fuels and Nuclear Energy detailed the dic­ panies, which are to be absorbed into the Rockefeller tatorial powers which the Department - and maniac cartel.

Burns Demands IMF Dictatorship, Energy Sacrifices,

Federal Reserve Chairman Arthur Burns began the among nations - a condition arising importantly. al­ following sp eech, at the April 12 Annual Dinner of the Co­ though by no means exclusively, from OPEC's action in lumbia Un iversity Graduate School of Business, by tell­ raising the price of oil so abruptly and so steeply... ing his audience: "I plan to comment on the need for If OPEC surpluses on current account should continue order in international finance... now besieged... by strain on anything like the present scale, they would inevitably and turbulence. " Burns proceeded to a description of a be matched by deficits of identical magnitude on the part new IMF, made into a second NA TO for the financial of other nations. And if some countries outside OPEC sphere. given the same powers over the economic policy should also have sizable and persistent surpluses. as now conduct of the world 's nations that a police department appears to be the case. the aggregate deficit of the re­ enjoys over thelega l conduct of a municipality's citizens. maining countries will be still larger. Under such cir­ Th is IMF dictatorship. Burns reported, would consist of cumstances. many countries will be forced to borrow augmented powers to impose stringent austerity and heavily. and lending institutions may well be tempted to loan-allocation conditions on "borrowers " - all new extend credit more generously than is prudent. A maj or IMF credit monies th us made availa ble to reinfla te risk in all this is that it would render the international New York priva te banks ' receivable lag. credit structure especially vulnerable in the event that In Burns' emphasis, the IMF is no longer to be trea ted the world economy were again to experience recession as a world central bank with powers inseparable from on the scale of the one from which we are now emerg­ contractual financial opera tions. Burns demands the ing ... IMF be given power to dicta te national economic policy, The realization of these conditions requires diligent "exercise oversight" and so forth entirely unsolicited. pursuit of stabilization policies by countries that have whether a member nation has applied for a loan or not. been borrowing heavily in international markets... He thus combines the "limited sovereignty" Entebbe What we need is a more forthcoming attitude on the doctrine with the "Common Fund"-typ e baiJ-out system part of borrowing countries in regularly supplying infor­ demanded by Da vid Rockefeller last month. mation to lenders on the full range of economic and finan­ To ensure clarity, Burns recommended the follo wing' cial matters relevant to creditworthiness ... as policy guidelines for his new IMF : Even now. as lenders are becoming better informed - Forced devaluations (non-OPEC developing sector) and somewhat more cautious in extending for�ign credit. and revaluations (West Germany, Japan) to guarantee a tendency toward earlier recourse to the IMF appears to the via bility of U. S. dollar-denomination in present debt be emerging. It seems likely. therefore. that more coun­ overloads; tries that need to adjust their economic policies will - Forceable imposition of Carter-like "energy conser­ henceforth do so sooner and probably also more effect­ vation " plans to eliminate the national possibility of di­ ively. .. versionary productive in vestment as an alternative to Private banks - both in this country and else­ debt roll-over; where - played a very substantial role in "recycling" - Supplemental roll-over loans to debtor nations and , petrodollars between the OPEC group and other coun­ large contributions to the IMF by the OPEC na tions. tries. especially those whose external payments position Excerpts of Burns ' speech follo w. was weakened by the higher oil prices... But with many countries now heavily burdened with debt. bankers gene­ ... Quite obviously. the overriding problem confronting rally recognize that prudence demands moderation on us in world financial matters today is the massive and their part in providing additional financing for countries stubborn imbalance that prevails in payments relations in deficit. For that reason. they understandably wish to

2 NATIONA," see an increase in the relative volume of official finan­ There have been too many instances in which the govern­ cial support to countries that continue to have large bor­ ment of a country negotiating a stabilization program rowing needs. with the Fund's officials has attempted to circumvent the ... The interests of the international economy and of Fund by seeking instead a loan from another government private lenders thus converge and point to the need for a or by exerting outside political pressure on Fund officials much more active role by the International Monetary in an effort to make loan conditions as lenient as possible. Fund. If the rule of law in international monetary affairs is ulti­ The leverage of the Fund in speeding the process of ad­ mately to prevail, all countries - there can be no excep­ justment would clearly be enhanced if its capacity to tions - must fully respect the IMF's integrity ... lend were greater than it is now. One reason why coun­ As I noted earlier, the payments difficulties of coun­ tries often are unwilling to submit to conditions imposed tries outside the OPEC group reflect many factors be­ by the IMF is that the amount of credit available to them sides the way in which the burden of oil costs happens to through the Fund's regular channels - as determined have been distributed. It is important that adjustment by established quotas - is in many instances small re­ proceed along several paths in this vast part of the world. lative to their structural payments imbalance. That will First, countries whose external position has been be so even after the scheduled increase in IMF quotas be­ weakened by loose financial policies are going to have to comes effective. To remedy this deficiency, the Fund is practice some fiscal and monetary restraint, either of currently seeking resources of appreciable amount that their own volition or because they find it obligatory to do could be superimposed on the framework of the quota so in order to maintain access to international credit faci­ system. Negotiations are in progress with several coun­ lities, including those of the IMF. In individual instances, tries of the OPEC group as well as with the United States the adjustment process in such countries may at times and other industrial nations whose payments position is also entail allowing some depreciation of the foreign ex­ comparatively strong. Such a supplementary Fund faci­ change of their currencies. lity should induce more deficit countries to submit to Second, since the burden of adjustment cannot and Fund discipline. But in no case must it become a substi­ should not rest with deficit countries alone, those non­ tute for an adequate adjustment policy by borrowers or OPEC countries that are experiencing significant and serve as a bailout for private banks. If negotiations for persistent current-account surpluses must understand such a facility are completed soon, which appears pos­ that they too have adjustment obligations ... What I mean sible, high priority should be given to prompt ratification is simply that such countries should not actively resist by our Congress and the legislatures of other countries. tendencies toward appreciation in the value of their cur­ The ability of the Fund to act forcefully in speeding the rencies in foreign-exchange markets ... adjustment process will be strengthened in still another Third, practically all non-OPEC countries - the way once the five-year effort of amending the IMF's Arti­ deficit and surplus countries alike - must treat energy cles of Agreement is completed. At present the Fund nor­ conservation as a key element of their economic policy. mally immerses itself in urging appropriate policies on a This is something to which the United States in particular country only when that country applies for financial as­ must give the closest attention. We are by far the largest sistance. Under the revised Articles, the Fund could take single consumer of energy in the world, and we have so the initiative in determining whether individual coun­ far been notably laggard in addressing the energy prob­ tries are complying with formally prescribed obligations lem. This year imported oil will probably account for to foster orderly economic growth and price stability. over 40 percent of domestic consumption of petroleum, This authority, once available, will enable the IMF to up from 22 percent in 1970. Our passive approach to broaden progressively its oversight role even when a energy policy, besides endangering the Nation's future, country is not an applicant for a loan. has aggravated strains in the international financial sys­ As the number of countries brought within the reach of tem, because we are directly responsible for a large part the Fund's influence increases - either because of the of the OPEC surplus. And, of course, our huge appetite enticement of enlarged lending facilities or because an for oil has added to the leverage of those OPEC members IMF "certificate of good standing" becomes essential to that have been most reckless in urging a still higher price further borrowing from private lenders - the outlook of oil. The energy program being prepared by President for correction of balance-of-payments deficits would be Carter unquestionably will entail sacrifices by many of considerably improved. But that outcome will also de­ our citizens. It is essential, however, that we at long last pend on full appreciation by private lenders of the need to recognize that a decisive conservation effort must be a avoid actions that tend to undercut Fund efforts... major part of our Nation's economic policy. The suggestions I am exploring with you for improving If, in fact, we can build momentum into payments ad­ the adjustment process obviously will not work unless justment by the non-OPEC group of countries along these broadly shared agreement develops that international fi­ three paths - that is, internal discipline by countries in nancial affairs require a "rule of law" to guide us deficit, non-resistance to exchange-rate appreciation by through the troubled circumstances that now exist... And countries in surplus, and determined energy conserva­ if the IMF is to play a leadership role in pursuing this ob­ tion by all - the favorable consequences will be enor­ jective, it is not only private parties that must avoid mous. To the extent that energy conservation is effec­ weakening the IMF's efforts. Governments also - in­ tive, the present serious imbalance of the non-OPEC deed governments especially - must be prepared to group of nations vis-a-vis OPEC willbe reduced. Beyond forego their own quite frequent inclination to do things in­ that, there will no longer be such extremely large diffe­ consistent with the effective pursuit of Fund objectives. rences in the balance-of-payments status of the non-

NATIONAL 3 OPEC nations. Consequently, the risk of disruption of the the creditworthiness of individual countries is badly international financial system would be greatly re­ needed ... duced ... Fourth, commercial and investment bankers need to monitor their foreign lending with great care, and bank ... Particularly in the years immediately ahead it is vi­ examiners need to be alert to excessive concentration of tal that the members of OPEC recognize that their econo­ loans in individual countries. mic and political future cannot be divorced from that of Fifth, protectionist policies need to be shunned by all the rest of the world. Besides practicing forbearance countries. with regard to the price of oil, it would be very helpful if Sixth, countries with persistent.payments deficits need they made larger grants of assistance to the less deve­ to adopt effective domestic stabilization policies. loped countries and also expanded the volume of loans Seventh, non-OPEC countries experiencing large and and investments made directly abroad ... persistent payments surpluses also need to adjust their ... Let me conclude by sketching or restating the re­ economic policies and they can probably best do so by al­ sponsibilities, as I see them, of the major participants in lowing some appreciation of their exchange rates. the international financial system : Eighth, all countries, and especially the United States, First, in order to contribute to a more stable interna­ need to adopt stringent oil conservation policies and, tional system, the IMF must act with new assertiveness wherever possible, speed the development of new energy in monitoring the economic policies of its members ... sources. Second, national governments must encourage and Ninth, the members of OPEC must avoid a new round support the IMF, so that it can become an effective of oil-price increases. They also need to play an increas­ guardian of evolving law in the international monetary ingly constructive role in assisting the less developed sphere ... countries and in the evolution of the international Third, a better framework of knowledge for evaluating financial system ...

Excerpts From Draft Of Carter's Energy Program

Th e fo llowing excerpts are ta ken from the Apri/ 13 Wall would be imposed another five-cent increase. The Street Journal account of a draft of the Carter Ad­ maximum possible tax rise under the plan would be 50 ministration 's energy progra m which will be officially cents a gallon - a level that most economists think would un veiled April 20: be reached ifthe plan becomes law .... Gas-Guzzler Ta x: The plan proposes the imposition of The President is expected to announce next Wed­ taxes on inefficient cars and a-:companying rebates for nesday a surprisingly tough plan containing major legis­ efficient autos. These would be applied to auto lative requests along these lines : manufacturers but presumably would be reflected in * An initial increase of five cents a gallon in the current auto prices .... four-cents-a-gallon federal gasoline tax. The increase ... Initially, this tax would range up to $412 (on the few could amount to 50 cents within 10 years ... cars that get 10 miles a gallon or less), and the rebate * A new tax on auto manufacturers as a penalty for pro­ would range upto $322 (on cars that get 39 miles a gallon ducing cars using too much gas. This so-called "gas or more). By 1985, the maximum tax would be $2,500, guzzler" tax would start at $412 a car for the least ef­ and the maximum rebate would be $500. ficient autos. Eventually, the tax could go as high as No manufacturer could make money from these $2,500 a car. arrangements, however, because the rebate to each * A tax of several dollars a. barrel on domestically maker for its efficient cars couldn't exceed the taxes produced crude oil, resulting in an increase of about 10 collected from that company on its "gas guzzlers" .... percent in consumer prices of gasoline. Thus, consumers Crude Oil: A stifftax would be imposed in stages on would be hit twice - being forced to pay both a higher wellhead prices of domestically produced crude oil. In retail price and higher tax. addition, certain newly discovered oil, whose prices is * An increase in natural-gas prices through a rise in the controlled by the government, would be allowed, federal price-control ceiling on gas and a tax on the in­ beginning in 1979, to rise to stimulate more exploration dustrial use of gas. These measures would be aimed at and production .... encouraging industry to use coaL .. Na tural Gas: The existing federally controlled price Here, from that document (the Administration's draft ceiling of newly discovered gas, which is $1.44 per program -ed.), are the ingredients of the energy plan as thousand cubic feet, would be raised to $1. 75 a thousand it now stands: cubic feet. These are the prices producers charge to their Gasoline Ta xes: A tax increase of five cents a gallon pipeline customers .... would take effect automatically each year in which The proposal would also give the Secretary of the gasoline consumption rose by 1 percent or more from the Energy Department, which President Carter wants to level during a base period extending from last Oct. 1 to create, the authority to set higher price levels for gas next Sept. 30 ... that is especially hard to find or produce. Starting in 1981, every year consumption doesn't In addition, the plan calls for a tax penalty for in­ decline by 2 percent from the base period level, there dustrial users of natural gas (except fertilizer

4 NATIONAL manufacturers and certain agricultural users for whom use of oii would be taxed beginning in 1983, ' at $1.50 a it is essential) as a way to get them to switch to coal. barrel. These taxes would be in addition to the other Beginning in 1979, all industrial users of gas would be crude-oil taxes proposed .... taxed at a level keyed to the price of distillate oil. The tax The plan calls for continuing current strict pollution­ would start at about 85 cents per thousand cubic feet. control standards related to coal burning. Industry had That would result in an average gas price to industries hoped for a relaxation .... of $3.05 per thousand cubic feet, compared with an average $2.20 per thousand cubic feet without the tax. Electricity Rates: Two years after enactment of the The tax would change slightly each year depending on legislation, each state utility commission would have to the price of distillate oil. adopt policies to restructure electricity rates ....Utilities A similar tax on utilities that burn gas would be phased would have to give customers a cheaper rate for elec­ in slowly. Under the plan, it would be 1988 before this gas tricity used during low-demand periods of the day. tax rose to the point at which prices paid by utilities Separate rates would have to be offered by both gas and would equal the price of distillate oil. The later date for electric utilities for summer and winter energy use. utilities is because of long lead times they need to convert Insulation : The plan contains two devices aimed at to coal use. getting homeowners to add insulation and other energy­ Coal: To encourage more use of coal and less of oil and saving measures to their homes. A tax credit would be natural gas, the plan would prohibit newly constructed allowed for installation of insulation, as well as such utility plants and new factory boilers from burning oil or things as timed thermostats and storm windows .... gas. Existing plants that have coal-burning capability In addition, legislation would require all electric and would also be prohibited from burning oil or gas. By 1990, gas utilities to offer the public a home-energy con­ no utilities, including existing power plants, will be servation program ....Utilities declining to participate allowed to burn natural gas. would be penalized by restrictions on their rates. Besides the tax on industrial users of natural gas, the The plan also would require banks, savings and loans industrial use of oil would be taxed, beginning in 1979, at associations, credit unions and utilities to lend $1.20 per barrel and rising to $2.70 a barrel in 1985. Utility homeowners money for conservation improvements ....

IMost Bitter Legislative Battle In Decadesl Shapes Up Against Carter Energy Program

Jim my Carter will take his domestic. program to slash conservative Congressman. Th e Executive Intelligence U. S. energy consumption by ;10perce n t "to th e people " in Review has compiled the following summary overview a series of national television broadcasts beginning April report on the sta tus of th e population 's active opposition 20. Th e leading East Coast press such as th e New York to Ja mes Schlesinger's declara tion of the "moral Times and the Washington Post have proclaimed that equivalent to war" against the United States. "the people " will raJly around the "wartime" sacrifices Ca rter and his energy czar Ja mes Schlesinger intend to Labor: Strikes For Energy impose. Nevertheless, this week in a front page article, even Within the last ten days, key unions - the United the New York Times, which is sta unchly behind Mr. Steelworkers of America, building trades, and the In­ Carter, was fo rced to admit that "President Carter's ternational Brotherhood of Teamsters, the largest union energy progra m is likely to lead to one of the most bitter in the country - have transformed their mere opposition legisla tive ba ttles in decades. " Th e Times based its to Carter's energy program into active organizing for a prediction on interviews with influential mem bers of competent energy policy aimed at fostering worldwide Congress and kno wledgeable staff mem bers who fo rsee a economic growth. situation in which a U. S. President will be resoundingly The top levels of the national leadership of these unions rebuffed by a Congress controlled by his own party. are now in debate on whether to come out publicly in All knowledgea ble Capitol Hill sources agree on one support of the pro-nuclear energy program of the Fusion ' basic point: the degree to which Congress will figh t is 100 Energy Foundation (FEF) as well as whether to percent dependent upon pressures genera ted by con­ organize for the April 29 national conference in Pitt­ stituency forces, especially la bor and industry. sburgh on national energy policy sponsored by the FEF "Congress brought down a President (Nixon - ed. > for and the Three Rivers Coalition of industry. Over the past the wrong reasons. If Congress fe els it has th e bulk of the few days, at least a dozen trade-union locals - par­ population behind it, Congress can bring Jim my Carter ticularly the building trades throughout Michigan and down for the righ t reasons, " said one aide to a Southern the Bridgeport, Conn. Plumber and Pipefitters Union -

NATIONAL 5 have endorsed a resolution circulated by the U.S. Labor desolation." On the same day, Henning gave his com­ Party calling for a ctash nuclear energy development plete support to an AFL-CIO-sponsored demonstration, program centered around achieving working fusion which was led by the sawmill workers and the Team­ power by the 1990s. sters, against the Administration-backed proposal to The USW is currently split down the middle on whether expand the Redwood National Forest, which would ef­ to adopt the U.S. Labor Party's energy resolution. fectively wipe out the state's logging industry. The Eure­ ' Meanwhile, more and more district Executive Com- ka, Calif. demonstration drew 10,000 workers and was mittees have bucked intense arm twisting to endorse the followed the next day by a demonstration of 1,000 resolution. The Teamsters are sending national workers in San Francisco where the U.S. Labor Party representation to the Pittsburgh conference ; a top addressed the rally. California Teamster official is considering joining a labor-industry coalition for expanded industrial Ind ustry: Cautiously Looking production. The AFL-CIO - controlled at its national headquarters Towards A Labor Alliance by Carter stalwart and Trilateral Commission member Lane Kirkland - is fissuring on the state and local level. U.S. industry, particularly those companies tied to the On April 13, California State AFL-CIO Chairman Robert capital goods sector or the nuclear energy industry, has Henning denounced in no uncertain terms the Ad­ become increasingly vocal over the past week in its ministration's zero growth policies at a speech before the OllPosition to the Administration's energy program. Comstock Club in Sacramento : "We remind the Leading corporations involved in nuclear energy President and the Governor. we (the nation) need in­ production - Westinghouse, Union Carbide, Gulf Oil, dustrial growth. In this labor shares with business an etc ...... : have taken the lead in organizing broadbased unfaltering commitment. Either we have growth or face opposition. Union Carbide, which operated the Ten-

Tennessee Leg islature Backs The -Breeder

Th e Tennessee State legisla ture passed almost to this nation to bridge the gap between present unanimously a resolution calling on the federal energy resources and other promising but less government to continue funding on the Clinch River assured possibilities for the future ; and Breeder Reactor. Th e resolution, introduced by WHEREAS, This state's confidence in nuclear Sta te Rep. Keith Bissell, passed the House 75-2 and technology is based on the experience and the Senate 27-0 early la st week. Th e resolution has knowledge gained in Tennessee and throughout the already been signed by Gov. Ray Blan ton (D) and a nation by some 30 years of experience and many copy has been fo rward to President Carter, the important applications of the atom in science, Assistant Administra tor for Nuclear Energy within medicine, and industry; and ERDA and to Congress. WHEREAS, The Clinch River Breeder Reactor Plant Proj ect is a key step in demonstrating breeder technology - an achievement which would Filed for intro. 3-23-77 lead to safe, clean, reasonably priced, and en­ HOUSE JOINT RESOLUTION 84 vironmentally acceptable electrical energy for by centuries; and Bissell WHEREAS, The President of the United States A RESOLUTION to urge continuation of the has asked for comment from concerned citizens Clinch River Breeder Reactor Plant Project. about the Clinch River Project and the overall breeder development program; now, therefore, WHEREAS, The nation faces a growing energy BE IT RESOLVED BY THE HOUSE OF crisis as our fossil fuel resources decline and the REPRESENTATIVES OF THE NINETIETH needs of the people continue to grow ; and GENERALLY ASSEMBLY OF THE STATE OF WHEREAS, Sufficient energy is essential to TENNESSEE ; THE SENATE CONCURRING ; heat and cool our homes, power our industry, That the Tennessee General Assembly and the transport our goods, and provide resources for the Governor of the State of Tennessee do firmly jobs and services required for a good Quality of life ; support the Clinch River Breeder Reactor Plant and Project and urge the continuation of the project. WHEREAS, Wise, efficient, and environment� BE IT FURTHER RESOLVED , That a copy of ally acceptable use of coal, conservation, and nu­ this resolution be forwarded to President James clear power must be expanded considerably to Earl Carter and a copy to the Assistant Ad­ meet a major part of those needs ; and ministrator for Nuclear Energy, Energy Research WHEREAS, Nuclear power, and particularly and Development Administration, Washington, the breeder reactor. is clearly an important option D.C. 20545.

6 NATIONAL nessee-based Oak Ridge National Labs for the govern­ Reactor Plant project and calls nuclear power "an im­ ment, is a case in point. portant optionto this nation." In interviews this week, Union Carbide executives A similar resolution has been introduced in the South repeatedly denounced the Carter Administration, going Carolina state legislature. so far as to point the finger at the Trilateral Commission In total , the U.S. Labor Party Fusion Memorial has control over the Administration. While generally upset been introduced in seven states ; has been passed in one over Carter's complete energy package, Union Carbide state ; and is pending introduction in at least four other is particularly up in arms over the Administration's states. Similar resolutions introduced independently of determination to shut down the nuclear industry. Union the Labor Party have either passed or are expected to Carbide's nuclear program at Oak Ridge - especially its pass in at least two states. large fusion power program - stands to go down the drain if Carter's policies prevail. Congress: The Pressure Is On Oak Ridge is itself the center of a larger Tennessee­ centered scientific and industrial nexus which also in­ While only a few weeks ago knowledgeable Capitol Hill cludes the Tennessee Valley Authority (TV A), the home sources predicted that Congress would support the Admi­ of the Clinch River breeder reactor. This entire Southern nistration's energy program - however reluctantly - industrialized region spilling over into Alabama, the these same sources are now predicting that some 275-300, Carolinas, and Georgia is in a near-state of insurrection a clear majority, now strongly oppose it. over the Administration's deindustrializing policies. The Administration had hoped that the now-ended Building trades in the Knoxville, Tenn. area are now Easter recess would dissipate and disperse opposition in considering organizing a nationwide demonstration to Congress. However, Congressmen say they were so protest the President's April 20 energy message. "Carter deluged by industry and labor in their home offices that won't last a month after April 20," one Tennessee they are returning to Washington in an increasingly building trades leader warned. Likewise, highly skilled combative state. "Our constituents told the Senator in ra­ technicians and scientists at Oak Ridge Lab, the TV A, ther impolite terms that he had better defeat Carter's and the University of Tennessee (a large research and energy package," an aide to a prominent Southern development center) do not intend to take the Carter Senator stated. "If he doesn't take heed, he just won't get program lying down. A leading member of the nuclear reelected," she added. energy department at the University of Tennessee laughed at Carter's recent pretense of a "pro-nuclear The Line Up energy" stance, saying, "That's a lot of crap ... Carter is The opposition to the Carter energy programs falls into out to destroy the industrial base of this country and three basic categories: conservative Republicans nuclear energyis the first to go." largely from the South and Southwest; conservative In this environment, Union Carbide - like other cor­ Democrats almost entirely from the South ; and main­ porations - are looking towards labor and the scientific stream Democrats largely from the urbanized Mid­ community as allies. western and to a lesser degree Northeastern areas where active political machines still persist. Congressmen What A Labor-Industry Alliance Can Do representing leading scientific research and develop­ This labor-industry alliance took on specific form at a ment centers are generally assuming the leadership in significant meeting in Denver this past week. On April 14, this fight. industry, labor, and politicaJ leaders representing the California's conservative Rep. Don Clausen (R), who Democratic Party, the GOP, and the U.S. Labor Party is di rectly connected to the anti-Rockefeller Crocker met and established the Alliance for Science and In­ National Bank of San Francisco, itself tied to the Bank of dustry. State Senator Hillsmeier, a Republican America and other Southwestern conservative political legislator, promised the audience that theLabor Party's forces, is a case in point. Speaking before the earlier Fusion Memorial to Congress would be introduced into cited Eureka, Calif. AFL-CIO, Teamsters and building the Colorado legislature in the coming week. Colorado trades demonstration, Clausen stated: "This hearing would then be the ninth state in which the Fusion and this gathering has to send the message throughout Memorialhas been introduced. into the legislature. the country that we are going to fight to keep our jobs." The Fusion Memorial itself and similar pro-nuclear Conservative Southern congressmen have formed a power resol'ltions have become the focus for action by bipartisan coalition which is also demanding at least the similar labor-industry alliances in other states. preservation of jobs, linking this demand to a strong Following the April 9 near unanimous passage of the denunciation of Carter's energy plan. Senator Strom Fusion Memorial in Maryland, the Federal-State Thurmond (R-SC) bitterly attacked Carter's energy Relations Committee of the Pennsylvania House of program in a call to Senator John Glenn (D-Ohio) to open Representatives voted 13-4 on April 12 in favor of HR 54, a full hearings to restore breeder cuts. "Nuclear power is resolution calling for the reversal of federal budget cuts the most promising of all energy sources," wrote for the breeder reactor and other nuclear programs Thurmond, who is under particular pressure from the including fusion power. Gulf Oil Corporation owned Barnwell, S.C. plutonium Earlier that week, a Tennessee House Joint Resolution reprocessing plant. Senate Minority Leader Howard was passed - again almost unanimously - by both the Baker (R-Tenn) , who has made similar but not as strong State House and Senate. The resolution emphatically public statements, may now swing his support behind a urges the continuation of the Clinch River Breeder full restoration of both fission and fusion nuclear energy

NATIONAL 7 cuts, and voice his opposition to Carter's "plutonium ning to draw the lines on nuclear energy. Rep. Joseph ban." The entire Oak Ridge-T.V.A. area has placed Gaydos (D-Pa) charged in the Pittsburgh Press April ll heavy pressures on Baker, an aide disclosed. that outlawing the development of the breeder reactor to curb "nuclear proliferation" is "akin to outlawing Looking To ward An Alternative crowbars (in the U.S.) in the hopes of stopping all A significant number of conservative and mainstream burglaries." From the Chicago Congressional Congressional leaders have begun to map out a media delegation, Rep. Frank Annunzio (D-Ill) and other campaign to counter President Carter's April 20 energy Democrats tied to the Daley machine have repeatedly message. Sen. Baker's office expressed particular in­ stated their commitment to nuclear energy and the terest in a proposal to demand equal time to rebutt breeder reactor. Carter under the fairness doctrine now being put forward Congress' unwillingness to dutifully rubberstamp the by the U.S. Labor Party and the FEF. President's energy policy is so intense that both leaders The GOP plans to release its own energy program on or of the GOP and the Democratic Party are warning the near April 20. The policy statement, which insiders White House that there is no way the energy package will . describe as being somewhat of a "mixed compromise but come up for a vote before December 1977 - at the with a strong pro-nuclear position," will be used as a earliest. Without some kind of instigated crisis - like a counter proposal. nuclear terrorist "Pearl Harbor," as James Schlesinger A number of Republican and Democratic Southern eerily presaged in his remarks to the press this week - a congressmen are moving toward sponsoring joint press look at the correlation of forces leaves the conclusion conferences with the Fusion Energy Foundation soon that right now the Carter energy program doesn't stand a after Carter's April 20 statement. chance. Then, as one labor leader put it, "Once we get rid Eastern and Midwestern Democrats are also begin- of his energy program, Carter's next to go."

Rep. Flowers: Carter Energy Program

Guts R&D And Congress' Role

Rep. Don Fuqua (D-Fla ) entered a sta tement by Next I would like to address the issue of the his colleague, Rep. Wa lter Flowers (D-Ala ) into the authorization process itself. The Energy Reorganiz­ Congressional Record A.pril 6. Flowers made the ation Act requires annual authorization in Section statement, which called for an increased emphasis 305. Section 626 of H.R. 4263 eliminates entirely the on Research and Development in U.S. energy requirements for any further authorizations ...This policy, before the Subcommittee on Legisla tion and bill in its present form simply guts the jurisdiction Na tional Security of the Com mittee on Government of our entire committee for energy R and D and Operations, at hearings held on the Carter Admi­ reduces it to an oversight role. I find this unac­ nistra tion 's bill H. R. 4263, which would establish a ceptable. Furthermore, I should point out that the Department of Energy in the executive branch. Th e annual authorization requirement is the legislative fo llowing are excerpts from Flowers ' lengthy form of zero-based budgeting which has received remarks. support in the new Administration ... My next comment relates to another issue raised One of the basic concerns I have is that R and D by this bill which, if enacted, would greatly limit which is very important for our energy policy goals the ability of the Congress to perform its oversight doesn't appear to be given the strong and central role ... role it deserves, either in the bill or the ex­ The bill gives very broad powers in several planation ... sections... Included in those sections is an ad­ ditional 600 GS 18 level personnel. This comes to a The chart that accompanies the bill separates the round figure of $28.5 million a year. Additionally, R and D from the demonstration. This is not the the Secretary of the Department is exempted from best way to develop technologies for two principal the provisions of the Administrative Property Act, reasons. A successful R and D program includes and Civil Service requirements, is able to use Ar­ demonstration, and it should be organized and med Forces personnel, and indeed, pay his own managed that way. And as important as the R and volunteers ... for as many volunteers as he desires. I D itself is the national resource that R and D is and would urge the Committee to examine each of these should be ... sections carefully ...

8 NATIONAL I.

Nat'l Opposition To Carter Voting Bill

"President Carter is undermining the u.s. Consti­ ministration considers the FEC the agency central for tution by attempting to make on-site registration a implementation of its registration bill, under which the national policy. If this becomes law, we have disen­ . FEC would receive a broad extension of powers. franchised the U.S. population and in essence legalized vote fraud." These were the opening remarks in a state­ ment released by Wisconsin State Representative George Klicka (R-Wauwatozsa) on April 12, the latest of Wisconsin Election - Test a series of attacks against Carter's so-called electoral reform package which have intensified over the past For New Kind Fraud week. Of The vote fraud in the Madison, Wisconsin mayoral The April 5 mayoral election in Madison, Wisconsin, elections last week (see below) has brought the vote set up by the Carter Administration and trumpeted in the fraud perpetrated in the 1976 general election into the hational press as a demonstration of the validity of public eye. An American Press wire carried in the April Carter's on-site universal registration electoral reform 10 issue of the Boston Globe discussed Carter's electoral proposal. actually served as a trial run for the institution­ package in the context of fraud charged in his election alization of mass absentee balloting to facilitate vote and highlighted the Wisconsin vote. The article included fraud on a national scale. former Governor Knowles' televised statement charging The number of absentee ballots in this Madison elec­ widespread presidential election fraud, and efforts by tion increased by 1300 percent, while on-site registration. the U.S. Labor Party and the American Independent the vehicle used throughout Wisconsin to get out the vote Party to deny confirmation of Jimmy Carter by the Elec­ for Carter, dropped dramatically below the figure for the toral College. Other media attacks on the Carter package November 1976 presidential election. include a Los Angeles Times statement that the new Wisconsin's on-site registration came under public California state law passed "to minimize discrimina­ scrutiny as a result of fraud exposes in the press and a tion" will be certain to result in the retention of names of lawsuit to overturn the November election brought by the the dead on electoral rolls. muiti-party Committee for Fair Elections. As a result, The steady barrage of media, congressional, and four Federal Election Commission investigators were other public declarations of opposition to the Universal dispatched to Madison to observe on-site procedures Voter Registration Act proposed by the Carter Admin­ during the April 5 election, and under these circum- istration marks a shift in a previous blockage of action against Carter's vote fraud policy from both Republican and Democratic layers. Indicative of the sentiment against the unconstitutional bill was the passage last Wisc. State Rep. Charges week of a resolution condemning the bill in the Vermont State legislature. On Friday, April 7 the House passed the 'Legal ized Fraud' resolution by a 62-56 vote alerting the state's congression­ On April 12, 1977, Wisconsin Sta te Representative al delegation "to the complications for Vermont implicit George Klicka, a Republican from Wa uwa tozsa, in the national proposal." The complications enumerated issued the following statement from his office: included the requirement of only one form of identifica­ tion for registration Which, according to the resolution, "President Carter is undermining the U.S. would "greatly increase the potential for fraud and place Constitution by attempting to make on-site an additional burden upon local officials on Election registration a national policy. If this become law, Day." Same-day registration, also cited in the resolution, we have disenfranchised the U.S. population and. in would "prevent orderly transfer of voter's names from essence, legalized vote fraud. What this means is those checklists with which they were previously that the curtailing of political liberty will become associated," another obvious source of fraud. institutionalized in this country. Carter's cynical The widespread opposition to the bill has begun to use of Wisconsin as a shining example must be force concessions from the Carter Administration. In an exposed for the fraud it is. The Comm ittee for Fair attempt to quell congressional fears that the Administra­ Elections and I have been gathering evidence of tion's electoral package would be used to the disad­ irregularities .and fraudulent voting in the April. vantage of the Republican Party, the White House has 1977 Madison mayoral race. and while not announced the appointment of Republican aide to Sen. challenging the outcome we are challenging the Robert Griffin (R-Mich.), Judge Shaner to a top post in margin of victory - 20.000 out of 75,000 total votes the Federal Elections Commission. Shaner is currently cast. The information we are gathering will be engaged in planning a possible Republican alternative to included in a federal suit challenging the con­ the Administration package. This appointment to the stitutionality of on-site registration." FEC is significant in light of the fact that the Carter Ad-

NATIONAL 9 stances on-site registration fraud could not again be used major suit to challenge the constitutionality of Wiscon­ as the primary vehicle for throwing the election. sin's on-site universal registration laws. The subversion of the absentee ballot for purposes of " Fra ud "The Ea sy Wa y" fraud is also evident in Washington State where the AFL­ The Democratic incumbent in the Madison election, CIO political action committee, COPE, sponsored a Paul Soglin, ran an all-out campaign to entice students at major drive to influence its membership to vote "the the University of Wisconsin to request absentee ballots, a easy way" in a special congressional primary. COPE campaign that resulted in thousands of unverified ballots sent 52,000 letters to state AFL-CIO members each of swamping the polls. The Committee for Fair Elections which included two requests for absentee ballots. The (CFFE) found myriad irregularities on these ballots letter urged: "working people are tired, vote the easy including many that were not signed by the purported way, vote absentee ballot for Gary Grant." It should be voter, as required by law. In addition the Committee sent noted that Grant, the Democratic candidate endorsed by 3,500 letters of verification to newly registered and ab­ the AFL-CIO for the vacant congressional seat, was re­ sentee voters, of which a full 14 percent were returned to sponsible for the passage of Washington's new unre­ the Committee as undeliverable at the time of this stricted absentee ballow laws in the state senate. writing. In addition, there were numerous instances of As further encouragement for absentee balloting, the students who registered under multiple names and non­ King County Board of Election (Seattle area) and local existent addresses. school board solicited absentee ballots. Twelve percent CFFE member and Republican candidate for mayor, of the ballots in this election were cast by absentees. Anthony Amato has sought to impound the voting The potential for fraud by such absentee ballots is machines and absentee ballots and envelopes from the similar to the post-card registration used in several Madison election. Amato, who beat Soglin in the states to send Carter to the White House. In the first primary, lost the April 5 general election by a huge place, where fraud is intended, there is unlimited pos­ " margin. In the primary, Amato carried his own district sibility for the voting of nonexistent persons or multiple against Soglin by a three-to-one margin, yet in last Tues­ voting by a single person, especially where the usual day's election, Amato carried his district by a mere five voter turnout is low. Second, the absentee ballot lends votes. In seeking the impoundment, Amato stressed that itself to manipulation of the electorate. Limited interest the evidence of fraud must be investigated whether or groups and institutions can pressure for an early vote not it overturns the election. The evidence from that well before the electorate is adequately informed of the investigation will be made available to the CFFE for a issues of an election campaign.

N.J. Congressman Finds Uni versa l torate is one of the fundamental strengths of a democracy. I think I can say without hesitation that we Registration 'Un rea l' all support the principle underlying attempts to increase voter participation. Unfortunately, however, as respon­ On Monday, April 4, 1977, Representa tive Edwin B. sible legislators we also have an obligation to our consti­ Forsythe (D-N. J. ) questioned th e feasibility of Carter's tuents to provide laws which reflect the realities of the plans for "easier registra tion " before the u. s. Ho use of world in which we must function. Representa tives. His remarks, reported in the Congres­ The following letter, I think, highlights some of the un­ sional Record (E2007) , included the text of a letter realities of the Universal Registration Act... directed to him from the Burlington, N. J. Board of Elec­ tions, registering the board's opposition to th e Carter Ad­ (The fo llowing are excerpts from the March 24 letter, ministra tion 's Vo ter Registra tion Bill. Th e letter signed by Mrs. Dorothy P. Ma in, chairman and Pearl B. specifically stated that registration made easy in Bur­ Bush, secretary of the Burlington, New Jersey Board of lington, N.J. had led to documented vote fra ud in the 1976 Elections.) general election. Excerpts fr om Rep. Forsythe's Dear Congressman Forsythe: As members of a remarks and the Board of Elections letter fo llo w: County Board of Elections, we strongly oppose voter "Mr. Speaker, all of my colleagues here in the House registration at the polls. We look upon the right to vote as are aware of President Carter's March 22 election a privilege that should be extended to everyone who can reform proposal. Of that five-part package, perhaps the qualify; but, with that privilege should be borne the re­ most controversial "reform" proposal is the so-called sponsibility of establishing proof of those qualifica­ Universal Voter Registration Act. The purpose of this tions ....With registration by mail, one need not even proposal is to simplify registration and supposedly there­ leave his home to register to vote ... by enable millions of additional voters to participate in ...In Burlington County, we have uncovered some federal elections. fraud in registration by mail simply because it is made In the State of New Jersey we have postcard registra­ so easy, and because the forms get into the hands of ir­ tion and have been able to substantiate very little if any responsible people who use them ....We ...appealed to the connection between easier registration and increased prosecutor to obtain the names (of two fraudently participation in elections. Additionally, postcard regis­ registered minors who voted and were reported in the tration has itself created enough problems to make local press - ed.) for us, but he was uncocoperative since they election officials quite apprehensive of the sweeping were minors. As a result, they are still registered - changes proposed by President Carter.... fraudulently. We are sure that if we had cooperation and ...Mr. Speaker, an informed and participating elec- the means to investigate, we could find many more ...

1 0 NATIONAL ECONOMICS

Europe Organizing Cordon San itaire Aga inst Dollar

pean monetary system function somewhat as a whole, the mark acting as a bridge for currencies into and out of FOREIG N EXCHANGE the snake. It is therefore as a whole that the European currencies are moving up against the dollar. This implies that the Bundesbank does not need to buy dollars to avoid The U.S. dollar kept falling against all the major a too sudden up valuation detrimental to West German foreign currencies after the long Easter weekend. Mean­ foreign trade - because it is relatively . "stabilized" while the price of gold closed at $152.95 an ounce in Lon­ by the other weaker currencies. Those currencies are in don on April 13, to consolidate at above $152 an ounce on turn "bailed out" against the dollar. For example, Bri­ April 14, up from $148.70 an ounce on April 8. tain has been holding sterling at close to $1.72 for weeks The renewed weakness of the dollar against even Eu­ and amassing substantial reserves in the process. rope's weakest currencies, the British pound, French There is now widespread speculation in Europe that franc and Italian. lira, reflects "continued doubts about the abovementioned agreement will be soon formalized the ability of President Carter's Administration to bring by bringing the British pound, the Swiss franc and the U.S. inflation under control," according to London deal­ French franc into the snake - this of course implying a ers. Beyond that broadly shared opinion, it reflects a de­ relative revaluation of both the mark and the guilder, not liberate choice by European governments to organize a as a concession to the dollar, but on the contrary, as a "cordon sanitaire" against the dollar in support of their move against the U.S. currency. self-interest as a whole economic unit. The upvaluation of the yen was originally imposed by The New York financial press tries to rationalize the the Carter Administration to curtail Japanese exports run out of the dollar as in part a strategic move by the and throw Japan into current-account deficit. As a conse­ New York based banks to force an upward revaluation of quence, the Japanese steel industry already faces a deep the yen and the West German mark while sending under crisis : the competiveness of Japanese steel exports is so the "sick men of Europe," Italy, Great Britain and damaged that industrialists have to sell at dumping pri­ France. But the upvaluation of the mark has now nothing ces, losing ten percent per ton sold ! But as the dollar was to do with maneuvers organized in New York. As for the about to drop below 270 yen at the beginning of the week, yen, the Wall Street institutions are caught in a contra­ the Bank of Japan began intervening in the market to dictory situation where their acknowledged pur­ avoid the total collapse of Japanese small and medium pose - to send the yen up - is countered by their poli­ size exporters. Teichiro Morinaga, governor of the Bank tical pressures on the Japanese government, notably of Japan, warned that "the yen's recent rapid rise did not their threat of a trade war, which tends to send the yen seem to reflect the conditions in Japan and overseas," down. Moreover, the"sick"currencies are conspicuously stressing that "some speculative factor is at work." Fol­ failing to go under. lowing this declaration, the Bank of Japan intervened on The reality of the market is that the U.S. monetary au­ the market for the first time, buying around $80 million thorities have lost control of their formerly dependent on a total turnover of $278 million on April 12. Meanwhile, currencies. Federal Reserve Board Chairman Arthur to keep the Japanese in line, the U.S. Customs Court Burns' declaration urging "nations in large account sur­ issued a ruling the same day that could result in the im­ plus to let their currencies appreciate" to help out the position of new import duties on Japanese electronic pro­ dollar have nothing to do with the upvaluation of the ducts. The U.S. duties "would be designed to offset tax mark. There is, in fact, no "upvaluation of the mark," rebates on exports given by the Japanese government." but only a devalua tion of the dollar. A simple examina­ Such a tax procedure being in conformity with the rules tion of the European "snake" - an agreement between of the General Agreement on Tariffs and Trade, the U.S. Central Banks of West Germany, the Netherlands, Bel­ decision was perfectly illegal and provocative. As a threat, gium and the Scandinavian countries to keep their cur­ it nonetheless worked, ,fostering a dollar upswing in Tokyo rencies within 2.25 percent margin variations - shows on April 13 to 272.35 yen from 270.73 yen - while the dol­ that over the past few trading sessions, the Scandinavian lar continued to slump against all other major curren­ currencies and the Dutch guilder have been at or near cies. This situation induced a Japanese trader to com­ their ceilings in relation to the mark ! ment that "judo was after all made in Japan," referring What the Bundesbank is really doing is to maintain to the finally favorable consequence obtained for the Ja­ interest rates in Euro-marks and domestic deposits at a panese interest out of an otherwise adverse U.S. opera­ low level to foster capital flows out of the mark and into tion. the "weak" European currencies, thus making the Euro- The fall of the dollar was reflected on the commodity

ECONOMICS 1 market, according to a leading New York house, in the traditional inflation hedges such as copper. weakness of the soybeans market. Soya, cocoa. a nd The decision of President Carter to drop his planned coffee turned weak, since speculation in these commodi­ tax rebates, criticized as demagogical and inflationary, ties depended on excess dollar liquidity in the interna­ has temporarily slowed the fall of the dollar on April 14, tional markets. In a parallel move, the price of precious but his announced energy policies are bound to reacce­ metals went up as a hedge against the dollar, among lerate, both domestically and internationally, the lack of new rumors of Arab funds moving into gold. along with confidence in his Administration.

European Bankers See Ma ior Eurodo llar Market

Shakeout In Third Quarter

rates will move against the dollar." In London, a spokesman for a leading British merchant BAN KING bank, with credentials going back to the eighteenth century, attacked the IMF's austerity policies as the reason why the bail-out is getting short shrift. "Either Leading Swiss and British bankers expect a major the IMF employs new people, or they get less power - in shakeout on the Eurodollar markets by the third quarter any case, they're not able to play it as central banker," of 1977 resulting from the probable failure of Carter the spokesman said. "In the United Kingdom, the IMF Administration efforts to have the International team behaved like the most extreme type of Montagu Monetary Fund (lMF) take over a major portion of Third Norman bankers - cut, cut, cut - the cuts were all far World debts. According to estimates previously cir­ too severe, and with the funding of the sterling balances culated by the Swiss Banking Corporation, non-oil we've tied our hands for ten years ...1f the non-recovery producing Third World countries must meet $17 billion in goes on, or becomes negative, the commercial banks in principal repayments alone - not to mention interest - the U.S., who have the prime responsibility for their during 1977, the bulk of which falls due during the second overexposure, will be in trouble. European bankers have and third financial quarters. The Swiss and British been far more cautious ...Maj or write-offs will be bankers surveyed this week now believe that it will be possible, but even with Federal Reserve funding, it'll be impossible for private international banks to handle this too late - there will be withdrawals, a major collapse. volume of refinancing. The giant New York commercial The asset side has gone so far that nothing the IMF can banks, which have the heaviest exposure, may not do can salvage the situation." He then confirmed reports survive the third quarter crisis. that the Saudis are opposed to the $16 billion IMF special Any U.S. Federal Reserve attempt to rescue the New fund proposed by the Fund's managing director Wit­ York banks without European support is, moreover, teveen. likely to backfire against the U.S. dollar. As a high-level Other City of London spokesmen expressed a similar official of one of the three largest Swiss Banks remarked, lack of sympathy for the plight of New York's com­ a single-handed Federal Reserve intervention, which mercial banks. Said one merchant banker: "If the U.S. would turn on the printing presses for new dollars, would banks are going to collapse, I CQuid not care less. The only trigger a general crisis of "confidence" involving Fed will help them. Big effects on the dollar too, sure. So several times more funds than what the Fed is able to what?" mobilize. "How can people conceive of such a scenario Only N.M. Rothschild and Sons dissented from the conserving their financial holdings !" the Swiss bank general view that the New York banks are likely to be official declared. badly shattered. "There will be a major banking and One source close to the Swiss central bank reported liquidity crisis but not a breakdown crisis," protested the that the Saudis will not give a penny towards an ex­ Rothschilds' LDC debt expert De Carvalho. panded IMF, unless the U.S. government supplies an In West Germany, opposition to the IMF expansion is equivalent amount - and, in Riyadh, it is believed that nearly as strong as among British financial circles but is the U.S. Congress will effectively prevent this. Thus the complicated by fear of a break with the U.S. A Carter Administration will accomplish nothing at the representative of a West German business association April 28 IMF Interim Committee meeting or at the May expressed it best: "Not everyone wants to help the U.S. Economic Summit in London. The entire IMF bail-out banks that made so much profit on the LPC lending package will just fall flat. The following events will then operations," but the West Germans hope for some kind of unfold according to this source: "By the second or third "compromise" on the IMF issue to delay having to come quarter, there will be a big contraction in international to grips with the larger strategic question of a collapse of finance, moratoriums, call it what you will. The United New York financial power. Kingdom and France will push for more stimulation, but As word of the impending third quarter paytnents it won't help. Confidence will be shattered and exchange debacle spreads, the Wa ll Street Journal has been forced

2 ECONOMICS to publish a grudging acknowledgement of the banks' that won't happen, although some wouldn't be surprised difficulties. but denying the depth of the crisis. In an if a few governments ran into trouble." Nevertheless. the April 14 article entitled "Poorer Countries Face Test of Journal quotes Darryl Francis, a former president of the Their Ability to Repay Bank Loans." the Wa ll Street Federal Reserve Bank of St. Louis, to say: "Purely on a Journal stated : "The question arises whether numerous gut feeling. I'm a little nervous about this area. I won't be countries might fail to meet the payments. threatening shocked if it doesn't work out as beautifully as they (the the solvency of the banks that lent them the money. bankers) expect." Executives of the major banks say they are confident

Tax Rebate Dies - A Small Victory For Sa nity

newsletters warned that the rebates program would end up very quickly driving up short-term interest rates sky­ BUSINESS OUTLOOK high, thus crippling capital spending and leading directly to wage and price controls. The annual increase of the CPI at a clip of 10 percent for the average of the first three months of this year was more than enough con­ The Carter Administration has withdrawn its proposed vincing evidence for the business community that in­ $11.2 billion tax rebate package, following the Ad­ flationary storm pressures were underway. ministration's promotion of the rebates for over two The effects on the money markets of the rebates defeat months as the indispensable centerpiece of its economic was immediate. The Dow Jones industrial stock average program. The Administration's defeat, forced by a rose 9 points on the day, closing at 947, and intermediate coalition of Republicans and Democrats. throws a securities on the bond market rose a full point. Virtually roadblock before plans to pump up the U.S. credit supply. all intermediate interest rates, down to three month

From the outset the tax rebates program had less to do paper, fell a full quarter percent on the news - an with improving the performance of the domestic unusual drop for short-term paper - and funds began to economy than with emergency relief for the illiquidity of move out of short-term paper into higher interest rates in the New York banks. It was intended, first. to facilitate deposits. U.S. purchase of Third World commodities at tremen­ While the medium term effects of the rebate can­ dously inflated prices, upon which the Third World was to cellation will be salutory, by itself it only provides get sufficient earnings to pay back $17 billion on principal stability for the weak dollar in the very short (4-6 weeks) account of debt owed to Wall Street during the next few run. months. Second, it was supposed to create the funds To Wall Street's more euphoric analysts, the rebate necessary to finance the direct bail-out of the New York cancellation argued that the period of hyperinflation was banking majors. A massive hyperinflation would have suddenly behind; with interest rates falling, and no resulted. apparent major loan demand, it was said that the "entire The major congressional opposition to the rebates system is swimming in liquidity," in the words of an program was only in part due to the question of taxes per analyst at Aubrey Lanston. The need to create new se. Rather it was seized as a vehicle by which Congress credit would be eliminated. could attack other aspects of the Carter "No energy. no In fact the system only appears liquid because: 1) the growth" budget. particularly the Administration's an­ Treasury will not borrow.,as a result of the rebate defeat, nounced intentions to shutdown funding of 30 domestic the anticipated $11 billion for rebate payments, which water development proj ects. will allow the Treasury to repay about $2 billion in the Russell Long (D-La), chairman of the Senate Finance second quarter rather than borrow the $5-6 billion ex­ Committee. whose state of Louisiana was threatened pected. and 2) virtually no major corporate bond issues with 5 water proj ect close-downs, led the conservative are scheduled for marketing during the next six weeks. Democrats' anti-rebates fight. Long told the Congress last In addition, New York banks theoretically have more week that. "if we voted right this minute, (the rebates) funds available for lending, because New York bank would be defeated." and added that the Administration lending to corporations has sharply declined by $l.9 "is going to have to call in the top man if they are going to billion since the first of the year. (At the same time, there win this fight." is considerable lending, about $4.5 billion in the last 8 Barber B. Conable Jr. (R-NY). ranking Republican on weeks in the commercial paper market outside the the House Ways and Means Committee. called the banking system). Far from swimming in funds, the eight rebates proposal, "very close to throwing money out of major New York banks are in borrowed reserve position airplanes. " of $7.4 billion. Moreover, there are several mounting Federal Reserve Board member Henry Wallich had powerful forces countervailing the apparent lack of hinted strongly in a Journal of Commerce interview last borrowing. month that the effect of the rebates would be to gun the First, the Third World will be borrowing a large por­ money supply, and thus provide liquidity for the banking tion of the $17 billion required to amortize debt principal system. However. the preponderance of Wall Street bank payment at the end of the second quarter, beginning of

ECONOMICS 3 the third quarter from principally New York banks. admitted, the purchase of autos in March was based on Second, there will be a heavy Treasury financing of consumers hedging against expected increases in auto between $15 and $20 billion in the third quarter. prices. Confirming this is the pattern of long loan terms The moment that everyone stops being euphoric and taken out to pay for the autos - mostly four to five years starts borrowing - 4 to 6 weeks from now - the apparent - showing a tightness in the consumer purchaser's deluge of liquidity will turn into a terrific shortage. financial position. The traditional 36 month car loan now The real economy of the U.S. has not been fun­ accounts for only 23 percent of the loans made, according damentally improved. The decline in commerce and to a survey of the American Bankers Association. industry loans of the ten leading New York banks is down The auto boomlet may have come to a sharp halt. $1.9 billion since the first of this year, and what American new car production fell to a 7.5 million annual borrowing is going on is largely invested in very cautious rate for the Arpil 1-10 period, from the 10.2 million level industrial inventory build-up. in March, according to auto industry reports. The possible important exception to this is indicated by More ominous is the Carter energy plan. The price of the rapid growth in retail sales of 2.7 percent in February gasoline will shoot up to as high as $1.25 per gallon under .. and 2.4 percent in March. But this is largely premised on the program, and taxes on heavy models of cars may rise the phenomenal expansion of consumer credit, which to as much as $2,500 per car. Coupled with Carter's lept by $2.3 billion in February and a large amount in proposed cutback of foreign petroleum imports to the March to finance auto purchases. As most analysts U.S., this spells the death-knell for the auto industry.

Carter Prepares New Anti-Trust Attacks On Ind ustry

political coordination, and additional power to this new unit. According to the Journal the scheme includes: CO RPORATE AFFAIRS - Granting the Anti-Trust Division "rule making" authority to produce Lockheed-type hearings. According to reliable sources, the rules would include limits on the size of any corporate share of any industry, on the basis Donald Farmer, a senior staff member of the Anti­ of which court action enforcing divestiture orders would Trust Division of the Justice Department, has confirmed ensue . that Attorney General Griffin Bell has ordered a com­ - Creation of a court specifically to hear Anti-Trust prehensive reorganization and upgrading of the Ad­ cases. ministration's ability to use the threat of the anti-trust - Special procedures to expedite trial procedure. laws against corporations resisting Carter's energy - Amend the Sherman Anti-trust Act to ease the program. Farmer named "auto, steel, heavy electrical, burden of proof. and certain chemical giants" as likely targets. He added According to Farmer, this policy had been championed that the Justice staff is working overtime to draft the by former Senator Philip Hart, and will now be backed plan. by Senator Edward Kennedy, who presently chairs the According to the Wall Street Journal which leaked the Anti-Trust subcommittee of the Senate Judiciary plan in two articles on April 9 and 10, Attorney General Committee. The General Counsel of the subcommittee Bell is planning to consolidate the anti-trust authority of has indicated that Kennedy has been closely coordinating the Federal Trade Commission within the Anti-Trust his work with the head of Ralph Nader's "Congress Division of the Justice Department to provide greater Watch," Mark Green.

GAO Report Finds No Hope For NYC

Tim es, all the hoopla about bad bookkeeping and impe­ cunious borrowing is purposefully deemphasized. In­ SPECIAL REPORT stead, the study soberly admits that two more years of severe cutbacks, and extended austerity cannot possibly put the city on anything near a sound financial footing. A rapi�-fire release of studies, legislative actions and policy recommendations is preparing New York City and "The picture that emerges is that the City acting State for more drastic austerity measures than have alone is severely constrained. It has made many of already been implemented. In a study of New York City's the 'easier' cuts and is close to the point at which it economy, released two weeks ago by the General Ac­ cannot cut or even hold the line without help from counting Office (GAO) and endorsed by the Ne w York other levels of government. If the city cuts certain

4 ECONOMICS segments of its budget. there is real danger that the penditures mandated by State and Federal law. It is also quality of City life will deteriorate. stressed that the exponentially-increasing debt service payments to the New York banks are not one of those " ...Ac cordingly. if the City is to achieve a balanced uncontrollable areas to be attacked. budget in fiscal year 1978, it will probably require Offering numerous alternative scenarios for State and major administra tive actions and policy shifts at the Federal funding of these "uncontrollable areas" in the Federal and State levels .... 1977-85 will be an ex­ budget, the report is predominantly biased toward tremely difficult period for the City. ... (The fa ct is further cutbacks, programs for labor-intensive pro­ that) the fiscal and economic base of Ne w York City ductivity increases, and forced work schemes. For continues to deteriora te, and this deterioration is at example, a complementary study of the northeast's theroot of the City's problems. " economy by the Conference Board lists statistic after statistic on the northeast's decline from the nation's The report notes that even under the most optimistic leader in advanced technology and personal income. The conditions, a balanced budget in 1977 and 1978, and sur­ study's primary conclusion is that higher "productivity" pluses in 1979 and 1980, budget deficits of $150-600 million is needed ... for the same amount of pay. No mention is will occur in 1981, rising to $1.5-2 billion in 1985. This made of increasing capital expenditure and industrial optimistic prediction, of course, does not account for the development, or of the failure of New York City under increasing deterioration of the economic base described these measures. in the report : * Between 1960 and 1970, growth in private sector Sta te wide Implementation employment increased only 2 percent in New York City, The recently passed New York State budget is the prac­ while increasing 27 percent nationally. tical implementation of the GAO's proposed "alter­ * In the same ten-year period, employment in manu­ ations" in welfare and Medicaid. Large chunks are cut facturing declined by 19 percent in the city, as compared from already-designated social services like education, to 7 percent nationally. health and welfare. The Legislature, after last-minute * From 1970-1976, employment in New York City fell maneuverings by Rockefeller State Senator Warren by 468,000, including an average yearly decline of 48,000 Anderson, also passed the first forced work-slave labor in manufacturing. This contrasts sharply with states like scheme in the northeast. As of April 1 , welfare recipients Arizona, Florida and Colorado, where total employment in the Home Relief category will be required to work increased between 35-44 percent. three full days per week regardless of the amount of their The GAO study emphasizes that "nonetheless, many benefits. There are 12,000 CCC-type public works jobs more expenditure reductions will be necessary ...," already in New York State, largely through Federal despite the difficulty presented by largely "uncon­ CET A funds, and the Department of Social Services trollable" budget items like welfare and Medicaid, ex- plans to increase that to 32,000 this year. One legislative

NE Governors Rep: 'lifestyles Must Change'

Th e fo l/owing is an interview with a mem ber of the A: That's not enough. It must go up to $20 or so per advisory panel of the Conference of Northeast barrel to make these processes economically Governors (CONEG) made available to NSIPS. feasible. Look, the price of oil will go up regardless. If we have an investment policy in non-energy development areas and get unemployment down, Q: Do you see any link between the mandatory between inflation and the OPEC countries driving work programs recently enacted in New York State up oil prices, prices will rise to that level anyway. for people on welfare and the need for large energy Why not take the price hikes now in a way that will development projects? help later - I mean invest in energy development A: Ah, this is an issue close to my heart. Both the projects which will put people to work aqd not be energy and economic dilemmas are vitally inter­ inflationary. The problem, though, is that it is very twined. We need a program that can generate dif:ficult in a democracy for people to accept this. employment, is anti-inflationary, can give a lift to Nobody seems to want unpleasantness, but we will v the investment area of the economy, and provide ha e to have it at some point soon. for our energy needs. The problem is that in the short run, people must be prepared to change their Q: The cost of these energy development projects, ' life-styles radically and to accept sharply higher especially for coal gasification and liquefaction, prices for energy. Now energy is too cheap, the may be very, very high. A major factor could well price of oil and gas are too low. As long as you have be the high union-level wages of workers. Has cheap oil, coal gasification and liquefaction are CONEG discussed this problem, the possibility of priced out of the market. We won't get investment paying workers below the union wage scale? into this area until the price of oil goes up. A: We've not gone into this, although everyone agrees this is an area of concern. This of course Q: But oil prices have quadrupled or quintupled won't be easy to change, but ultimately these things since 1973. will have to happen.

ECONOMICS 5

.Ii . I' provision will allot a certain portion of the CETA jobs - Energy Development Corporation - a giant Big Mac hitherto designated for those on the unemployment rolls operation, with federally guaranteed bonds for finan­ - to welfare recipients, setting the unemployed "who cing. want to work" against the welfare people ' "who don't The so-called energy development projects will be want to work." instrumental in removing New York City's "unpro­ The day after the budget was passed, Victor Gotbaum, ductive" population - a call recently trumpeted in a head of the AFSCME District Council in New York City, Ne w York Tim es editorial and first pronounced by Roger protested that his union was "losing the CETA jobs to the Starr, a Tim es editor and former head of New York City's welfare bums," and announced that he would fight tooth­ Housing Development Administration. The other side of and-nail to get those jobs - which pay far below the the GAO program is the creation of an "Urban Recon­ union wage scale ! struction Bank," a proposal first floated at CONEG's But the CETA jobs are merely one small portion of the inaugural meeting at Saratoga Springs in November. forced work program. Under the rubric of "developing Last week, the Trilateral Commission's U.S. Treasury alternative energy resources," the New York banks are Secretary, W. Michael Blumenthal, revamped the planning to implement huge labor-intensive work pro­ proposal in consultation with editors and reporters of the jects. A member of the advisory panel to the Conference Ne w York Tim es. The proposal is nothing more than a of Northeast Governors (CONEG) proposed exactly that retread of the New Deal's Reconstruction Finance in an interview last week (see page 5). The CONEG ad­ Corporation, which guaranteed debt service to the visors, who met last week in Boston, will release their Rockefeller banks by guaranteeing loot from slave-labor policy proposals for coordinated energy development projects. schemes by this summer. The cornerstone is a Regional

State Probe Shows New York Banks, Not City, Bankrupt

Haddad 's Statement SPECIAL REPORT Mr. Chairman, it is the purpose of this report to outline the persuasive evidence my office has collected to date Testimony last week before a Ne w York State legisla­ supporting allegations that several New York banks qui­ tive subcommittee by William Ha ddad, director of the Of­ etly dumped two to 2.5 billion dollars in municipal hold­ fice of Legisla tive Oversight of the State Assembly, sub­ ings after privately learning of the city's pending default. stantially corrobora tes charges by the U. S. Labor Party This divestiture of municipal securities aggravated a that the bankrupt New York clearinghouse banks rigged growing crisis of confidence in the city's ability to repay the so-calledNew York City fiscal crisis, in part through its debts. For many institutional purchasers, this was the wholly illegal manipula tions of the credit markets, to coup de grace, the final shot in the head for a dying secu­ protect their illiquid international debt position. Th e re­ rities market. SUlt, Mr. Ha dda d charged, was a de fa cto seizure of poli­ With the market saturated to a standstill by these se­ tical power within the city by these banks and forcing of cret actions, the banks turned to the city and the state for the people of the City and State of Ne w York to cover help, which was forthcoming in the form of new institu­ banks' bad loan positions through service cutbacks and tions guaranteeing the repayment of new and "rolled other austerity measures enacted under theguise of im ­ over" investments by the banks. No such protection was posing fiscal responsibilityon the nation 's largest metro­ provided for those who, trusting the banks, and relying polis. on the integrity of the securities marketplace, purchased Ha ddad points out that the New York banks are no the securities being quietly dumped by the banks. longer cooperating with his in vestiga tion. He requested Some of our evidence comes from our review of and received subpoena powers from the committee to ob­ minutes of the confidential deliberations of two com­ tain relevant, secret bank records. mittees." A small, closed circle of twenty-five men - Th e information in the testimony excerpted below is of representatives of the city and the financial community the type tha t warrants an im mediate in vestigation, not - were not only members of these committees, but only by Ha dda d and the Ne w York Sta te legisla ture but served as the decision-makers for the banks and other by the relevant committees of the Congress. In all financial institutions concerned with the crisis ... likelihood such an investiga tion would lead to criminal indictments of th e officers of the Ne w York "The Comptroller's Debt Management Committee and the so-called clearinghouse banks. In a press conference last week, "Patterson Committee." an offshoot of the Debt Management Com­ which like his testimony was blacked out of the East mittee. and named for its chairman. Ellmore C. Patterson. Chairman of the Board of Morgan Guarantee Trust Co. Minutes of the Debt Coast press, Ha dda d sta ted that what "we ha ve here is Management Committee are available; discussions of the Patterson only the beginning of a very nasty picture. " Committee can be reconstructed from recollections and individual notes.

6 ECONOMICS It was this conflict between private obligation and pub­ idea. Thus. the stage was set for sale of almost a half a lic responsibility which created the banks' dilemma and billion dollars in te� thousand dollar notes to non-profes­ " hastened the collapse of the city's securities market. sional investors ... From the records we have seen. and from what we have From testimony we have reviewed. it is clear investors learned. it is clear that many banks decided to secretly turned to the banks as a matter of confidence and trust. sell their city securities as the only viable option for They were convinced that the banks would tell them the them. a statement which will be detailed later in this truth. the whole truth and nothing but the truth. In one report. The banks bailed out in three ways : classic situation. a doctor. who had recently sold her (1) They sold extraordinary amounts of municipal se­ cooperative apartment for $100.000 went to a bank rather curities from their own portfolios; we do not have infor­ than her broker to invest the money. And what hap­ mation about how they handled the portfolios of their pened? She was sold securities the bank was unloading trust accounts ; because of knowledge of the impending fiscal crisis. Yet (2) They did not replace matured out municipal se­ the bank never disclosed this fact to her ... curities. a reversal of their previous practices ; and There is a classic irony in all this. Recently the court de­ (3) They sold. for the first time. new and older city se­ creed the moratorium invalid instructing the city to re­ curities to non-institutional and non-professional inves­ pay a billion dollars to note holders. many of them small tors without disclosing the risk they foresaw. investors. The city turned to the banks for help. The The banks third step is the focus of my testimony to­ banks responded in their righteous self interest by mak­ day. Precisely. the banks sold New York City securities ing hard management demands to control the flow of city to small. individual investors and they did so without dis­ revenues. an action the mayor and union investors be­ closing their inside information as to the City's fiscal con­ lieved would strip the city of its sovereignty. Yet it is the dition. banks who benefit most from thisrepaym ent. Class ac­ In October. 1974 the underwriting banking syndicate. tions are pending against the banks by note and bond led by the Chase Manhattan Bank. could not market all of holders which. if successful. would have required the the issue's $475 million in bonds. causing substantial loss­ banks to repay these monies on the grounds of misrepre­ es of having the securities recorded at their market value sentation at the time of sale. The city's repayment. once as contrasted to their offering price. This signaled the again. takes the banks off the hook. collapse of the market. although the banks. of necessity. Earlier the banks had been taken off one hook by per­ continued to assist the city in raising capital. but at in­ mitting sales to non-professionals. Then came the mora­ creasing rates of interest ... torium and new institutions to guarantee that the banks In fact. from the records of the Chase Bank. it is clear would be repaid. that some banks had already begun to act on this and There is one consideration which cannot be overlooked. other related information. In the November 20. 1974 one with serious national and international consequen­ minutes of Chase's Dealers Planning Committee was the ces. Som.eof the banks were required to unload their port­ statement carrying out the earlier decision of their folios because their poor investments in REITS. tankers Portfolio Strategy Committee. We are. he revealed. and underdeveloped countries had placed them in a fi­ "continuing to sell New York City obligations at every nancially precarious position. Had they been forced to opportunity." The strategy decision called for sales even suffer the added book losses of default or moratorium. if a loss was sustained. some may have been pulled across the line of stable insti­ If the banks had decided to sell and there was no ready tutions. What would have happened then? Not only to the market with other institutions. where could they turn? nation. but to the world economy? In one sense. there­ The answer is found in the suggestion by the Comptroller fore. New Yorkers are paying the price of the banks' poor at the November 12 meeting of the Debt Management management policies. It ill behooves these institutions Committee to dramatically reduce the denomination of who have beep living in glass houses to throw the first city notes to $10.000. to enable smaller investors to take bricks at the city's management policies. advantage of the tax exemptions and high interest rates. Mr. Chairman. we still do not know the full story. The The members of the Committee agreed this was a good banks are closeting important records ...

ECONOMICS 7 ENERG Y 2 Tri llion Barre ls OfOi l Waiting To Be Consumed

Carter's soon to be announced energy program calls Saudi reserves continue to climb. annually, due to the dis­ for unprecdented cutbacks in petroleum consumption for covery of new fields and the continual upping of the size the United States, implicitly, across the globe. There are of already producing fields. (See Tables 1 and 2) two basic arguments widely used to justify the Carter­ It is widely acknowledged that even the highest Schlesinger energy plan. The first is that the world is current public estimates of Saudi reserves are a gross facing an imminent shortages of fossil fuels, which will underestimation. The former U.S. Ambassador to Saudi ' run out before alternative energy sources come on line. Arabia has gone on record estimating that there are at The second ,argument is that the U.S. is increasingly least 300 billion barrels under the ground awaiting ex­ "vulnerable" to 'foreign suppliers. The U.S. could be ploitation. As the map (1) shows, large portions of the slapped with another embargo from the Arab producing peninsula have yet to be explored, most notably the huge nations in a less dramatic action, the Organization of empty quarter which is known to possess oil. Prelim- Petroleum Exporting Countries (OPEC) will continue to inary drillings and small finds indicate that the crude raise the price of oil. from the Empty Quarter is of the highest quality. , The "u .S. vulnerability" agrument is obviously Similarly, areas north of Riyadh are believed to possess bogus.. The oil producers have made repeated gestures hugh quantities of oil. These reserves,were discussed by toward cooperation with the U.S. and the advanced a Japanese delegation to Riyadh in February. The countries to secure oil-for-technology deals for develop­ Japanese had hoped to open up the field in a technology- ment. They bave shown willingness to cooperate with the for-oil arrangement and Japanese sources put the poten- consuming nations at the North-South meeting in Paris to tial of this single area at about five mbd. establish a new world economic order. Saudi Oil Minister Following the December OPEC meeting Saudi Oil Sheikh Ahmed Zaki Yamani stated in January that the Minister Yam ani announced that his government intends price of oil could come down once a resulution to the to increase output to 14 mbd by the end of 1977. According world economic crisis was reached through the North­ to Donald Wells, a fo rmer Saudi economic consultant the South talks. Similarly, the Arab oil producers have been Saudis could be producing 20 mbd with very little effort, aggressive in attempting to organize for a Geneva con­ the target personally set by Yamani prior to the 1973 ference to settle the Mideast crisis and eliminate the Middle East war. The Saudis faceno major technological threat of a renewed war. Clearly it is the "vulnerability" limitations to achieving such a goal, and the ease of of the New York banks to new monetary arrangements acquiring the oil (at 10 cents a barrel, Saudi oil is the for expanded world production and trade, not U.S. cheapest to produce in the world) makes a step up in Saudi national secruity, which preoccupies the Carter Admin­ output crucial for global economic growth. At present, istration. the Saudis are making sizable investments in water in­ The question of actual shortage is disproved by the jection systems to keep the output strong in older fields. fact that the Middle East producers, as well as numerous The offshore Persian Gulf also offers highly favorable other areas are sitting on billions of barrels of unex­ prospects for increased oil production. Unlike the ploited oil. The existence of these vast reserves has been tumultuous North Sea, offshore drilling in this region can � purposefully withheld from the American public by take place in one of the most propitious climates in the , Rockefeller's oil companies. the CIA, and other agencies. world. According to the Offshore magazine, current off- The following is a region-by-region summary of world oil shore pumping in the Gulf contributes about 3.5 mbd, or potential: approximately 14 percent� to the total Mideast oil output of about 25 mbd. It is anticipated that this percentage will Th e Middle East double in the near future. The Gulf emirate Abu Dhabi If one is to assess the prospects ..lor future oil output figures to be the producer to make the greatest contri- the place to start is Saudi Arabia. The latest figure an­ bution to offshore oil expansion. A Zapata Oil Company nounced for Saudi reserves is approximat�ly 150 billion official in Abu Dhabi's sister emirate of Dubai recently barrels, though the Arabian American Oil Company confirmed in a interview with Offshore the large amount (ARAMCO) puts their estimate at about 177 billion. It is of oil still untapped under the Persain Gulf, and pre- based on these extremely conservative figures that AR­ dicted a dramatic upturn in drilling activity in coming AMCO estimates that Saudi Arabia could produce 12 years. million barrels a day (mbd) for a century, about three At present Abu Dhabi has increased the allowable ' . and one half mbd more than the Saudis have produced up maximum production from its offshore fields and has to the present. Despite Saudi Arabia's large output, commissioned the French state-owned firm CFP to

, ENERGY 1 Table 1-Crude Oil Remaining Reserves of Sa udi Arabia atYear End

In Billion U.S. Barrels

Year 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975

Total 78.00 80.40 136.00 136.70 138.70 138.26 137.07 136.83 141.04 144.58

being expanded and two new fields, Sirri C and D, are Table 2- Crude Oil Production expected to begin production this year. A very large off of Sa udi Arabia shore find was made in the straits of Hormuz a few months ago by the Brazilian state-owned company, Petrobras. With an anticipated capacity of 300,000 In u.s. Barrels barrels a day, the Hormuz field could significantly aug­ 1966 - 1975 ment Brazil's high-paced efforts toward energy self-suf­ ficiency (see ljelow). Iran's Marun field, the country's largest and most recently discovered, is currently pro: Percentage ducing 1.4 mbd thanks to stepped-up drilling activity. Marun's output is soon to climb by another 100,000 Year Total Change barrels a day, a rate which it is expected will be main­ -- tained for coming years. The Iranian government has 1966 949,659.835 already approved the installation of a number of gas injection systems into the already active wells, reflecting 1967 1,023,839,853 + 7.8 Saudi Arabia's similar move to extend the life and ef­ 1968 1,113,717,01l 8.8 ficiency of producing wells. + The size of Iran's total oil reserves is as yet undeter­ 1969 1,173,893, 164 + 5.4 mined. A well-informed source at the Hudson Institute (which specializes in energy) is insistent that Iran's 1970 1,386,658,836 18.1 + f I reserves are in the neighborhood o 200 to 300 billion 1971 1,740,632,763- + 25.5 barrels. This expert emphasized the gross underestima­ tion of both Saudi and Iranian reserves. Moreover, it has 2,201,96 1 ,695 26.5 1972 + recently come to light that Iran has gas reserves under 1973 2,772,605,428 + 25.9 the Persian Gulf in the Kangas fields which may well rival the world's largest known reserves now found in the 3,095,088,427 1974 + 11.6 Soviet Union. It is of course natural to assume that where

- there is gas there is oil. The Hudson Institute official 1975 2,582,535,244 16.6 added that the U.S. could rely solely on Persian Gulf oil • supplies if necessary. To date, he added, no one has done an adequate analysis of Iran's actual reserves situation. The same situation exists for Iraq which is known to have expand the Zakum field to produce 450,000 barrels a day equally large amounts of still unexplored crude. more than it is currently yielding. Abu Dhabi Marine Areas Ltd. will soon provide the lakum field with high Africa technology drilling capacity known as the ', 'supercom­ In North Africa, Libya is making a concerted effort to plex," one of which is already installed in the Umm Shaif step up production of its 70 percent nationalized field. petroleum industry. Last year Occidental opened a new Last week, the Abu Dhabi government formed a new field in the Sirtica Basin, where the Almas field was dis­ state owned company to oversee offshore activity, with covered and developed by Oxy under a far reaching the participation of British Petroleum, CFP, and a group ' production sharing agreement giving Libya 81 percent of of Japanese companies. In addition, United Arab all commercial oil output. Other foreign companies have Emirates Oil Minister Manah Oteiba pas stated that the agreed to explore onshore in Libya under comparable UAE could easily increase production by an additional terms that allow the government no less than 85 percent 300,000 barrels a day. commercial discoveries. According to the Libyan On the other side of the Persain Gulf, Iran has its own National Oil Corporation, exploration done last year by a share of both onshore and offshore activity aimed at group of French, Austrian, and German companies has expansion of output. The Ardeshir offshore fields are yielded a new field which is being described as Libya's

2 ENERGY ------Map 1 ------non-Rockefeller independent and state-owned oil com­ panies have moved into exploration in the Mideast and North Africa. Companies like Italy's ENI, the Brazilian 'U'K'Y Petrobras, Elf Erap of France, Spain's Hispanoil and OMV of Austria are becoming favored exploration partners for the producing nations. At least two dozen Japanese companies are partners in production and exploration in the Persian Gulf, while about 60 com­ panies including larger U.S.-based independents such as Anoco, Conoco and Philips are gaining steam within the area. The same holds true for the continent of Africa, wne"i'e IRAN vast regions are yet unexplored. Large territory with sed­ imentary basin - an indicator of possible oil deposits - covers about half of the continent. Discounting the North African producers, Gabon and Nigeria are Africa's only two members of OPEC. Yet, of the 51 countries or territories in Africa, 32 have issued petroleum ex­ ploration permits and Kenya, Tanzania, and Somalia hve SAUD' taken the lead in geological and geophysical exploration while the most drilling has taken place in Camerous, South Africa and Chad. It is thought that the landlocked state of Chad has sizeable amounts of reserves. In the case of the African states the viability of investment in expanded exploration must be weighted aginst the cost of both production and transportation. Nevertheless, the pattern of investment - in chiefly from Europeans and Mideast oil-producing states - in oil exploration and oil­ related industry such as refining capacity, indicates a certainty that there are worth wile amounts of ex­ Arabian S •• ploitable crude, which will aid in furthering African development.

India and La tin America o 200 Since the fourfold increase in the price of oil, a

Mil •• number of Third World nations have mounted a remark­ able effort to become oil producing states. Often under �. The Empty Quarter adverse environmental and political conditions countries such as India have built an oil industry up from the ground in the space of two years. Such an accomplish­ largest to date. Libya is looking to regain the past output ment on the part of an underdeveloped country belies the of the large Sarir field which before nationalization in worn-out slogans that building new oil-producing infra­ 1971 was producing over 400,000 b-d. It has since slumped structure to expand production takes too much time and to about 200,000 b-d, but the Qadaffi government en­ is too costly. Prior to 1974, India had been unable to visages output by 1980 from this field alone of 900,000 b-d. solicit concessions from advanced sector oil companies British Petroleum, from which the field was originally even though Soviet advisors had helped to establish the nationalized, may be invited back into Libya to help re­ presence of considerable reserves in India's Bombay vitalize it. High region in the Arabian sea. Unfortunately, the A major political prerequisite for expanded Sovidts did not have the offshore technology to aid the petroleum production necessary to service the world Indians in undertaking production. For India, like other economy is nationalization. Since 1974 in particular, developing countries who have been virtually bankrupted momentum among Mideast oil producers to take greater by the high cost of oil, the drive for near self sufficiency political control over the remaining private interests in by the early 1980s - which would mean an output of about their respective nations has gained. Saudi Arabia has 250,000 mbd - will enhance its prospects for further finalized the terms of complete takeover of the enormous industrial development. This was the national develop­ heretofore Rockefeller-dominated ARAMCO operations. ment plan put forward by former Prime Minister Ghandi Following a round of talks between Yamani and and while her successor's commitment to industrializa­ ARAMCO in Europe last month, the Saudis have agreed tion is highly questionable. the Desai government has to establish a state-run institute to oversee managing made it clear it will stick to the national oil development their soon-to-be acquired remaining 40% of ARAMCO plan. Last year the Bombay High offshore field began now held by Exxon, Mobil, Socal, and Texaco. An production with two operating platforms. The plan for agreement was reached last year between the govern­ the future includes 18 platforms. The Soviets also. have ment of Qatar and the consortium of oil companies which identified another field in the Arabian Ocean which is still held 40 percent interest in its output. Added to this, expected to draw about 80,000 b-d, the Basein structure

ENERG Y 3 · near the Bombay High. India's Oil and Natural Gas Com­ with the fields being shallow and close to ·shore, making mission expects to soon put Bassein on stream at 20,000 b­ for relatively easy extraction. Aside from domestic ef- d, to reach 60,000 b-d by the end of the year. Apart from . forts to upgrade oil output (which include contacts with the Bombay High, which the government has reserved Royal Dutch Shell, British Petroleum, and Elf Erap) for itself, a number of other promising sites in southern Petro bras has moved agressively abroad into joint India and off the eastern coastline have been awarded for ventures with the Mideast producing nations and these exploration to foreign companies - again with the have yielded sizeable finds. Petrobas's Iranian find has a prominent exception of the Rockefeller-dominated multi­ potential of up to 300,000 b-d and a find of approximately nationals. While India need not become an exporter of oil the same size as recently reported in Iraq. Joint explora­ in the near future, it takes some of the burden off the Gulf tion still continues in Algeria. producers which have been supplying its oil by beginning A similar potential for domestic oil production exists to meet its own needs. for neighboring Argentina. According to the April 4 issue

Brazil has also escalated efforts at domestic oil pro­ of the Oil and Gas Journal, the south Atlantic Ocean off .. · duction since the fourfold price increase. As also in the Argentina may well become a boom area for exploration case of India, Brazil is not expected to become a net in the near future. With the Malvinas basin, the Burd­ exporter of oil but is aiming to produce at least half of its wood Bank, the Falkland Plateau, and the San Jorge 1.2 mbd daily consumption, thus cutting down on its hugh basen established as areas of possible petroleum sedi­ oil import bill. To date Brazil is 80 percent import m�nts, Oil and Gas notes that two of these areas looks dependent. excellent, citing reports from London. (map 3) British Since 1974, serious efforts at exploration have been on­ Petroleum is slotted to play a major role in Argentina's going with promising results in the Northwest states of petroleum development. British Petroleum recently par­ Sergipe. and Algoas, five major fields discovered in the ticipated in a three-year contract to explore off Bahia Campos Basin off the state of Rio de Janeiro, and new Blanca for Argentian's state-owned oil company, YPF. finds off the mouth of the Amazon in the north. This year This is a positive signal that an understanding is being alone the state-owned company Petrobras plans to drill reached between the UK and Argentina following their 96 wildcates, 55 of which will be offshore. longstanding sovereignty dispute. Current offshore production comes almost entirely Mexico's recently publicized 60 billion barrels reser­ from the northeast section of the country (see map 2) ves, which puts that country on a par with Kuwait, makes Map 2-�---... it Latin America's probable near future exporter of oil. The English language daily of the United Arab Emirates Opcn illcas o this month, however, noted that even the 60 billion barrel • Oilficld3 estimate is low, claiming Mexico rather possesses 100 billion barrels of oil, the third largest reserves in the world ! Like Indonesia, Mexico faces the political question of whether its oil will be used for expanding the industrial base of its economy or to serve as collatoral on PARA rollover credits for the country's considerable foreign debt. The scope of its reserves makes expansion of Mexico's one mbd output a political concern of the Rockefeller interests. This is both because Rockefeller's New York banks hold the lion's share of Mexico's debt and because if any sizeable amount of the oil exported by Mexico's state-owned Petroleos Mexicanos (Pemex) , BRAZIL falls outside the hands of the multis Exxon's traditional control of oil markets could be upset. There has been high level contact between the Arab oil-producing nations and Mexico, which the London­ based Sunday Telegraph recently revealed may pay off in an Arab investment of $5 billion in the Mexican economy. This is no doubt designed to prevent the cooptation of Mexico's oil business by Rockefeller's multis which could then be used against OPEC's efforts to expand production. Furthermore, Pemex officials and the entire Mexican cabinet held lengthly consultations on coordination of oil prices with representatives of OPEC last summer during a visit of an OPEC delegation led by Kuwaiti Finance Minister Attiga. The features of Pemex's plan to invest upwards of $15 billion over the next five years in develop­ ing Mexico's oil industry in many ways resembles plans

. t'lil :M 101ft "no �.f,n '-" 11:. for oil industrial expansion in the Mideast . I ! I '---J SCALE : i i i--' Pemex aims to produce 2.2 mbd by 1982, half of which 7<�1) ""f) "lit) fUJI" ... " would be for export (see table 3). According to Ing Jorge

4 ENERGY �------Map 3 ------. 1977 there was a marginal increase in USSR oil exports to Europe. uth Atlantic : Sed imenta ry Basins So Increased Soviet production will be achieved from the intense exploitation of the enormous new Siberian fields the full reserves of which have not been revealed by the Soviets. The Soviets may also opt for improved recovery techniques in operational fields and possibly further exploration for offshore oil. One of the . most promising offshore possibilities is the Caspian Sea. But the Soviets are faced with the constraints of inade­ quate offshore technology to fully exploit the oil rich 'Caspian sea, an extension of the wealthy Baku fields. Despite efforts by the Baku Offshore Oil . Institute to .. develop semi-submersible rigging, such efforts are in­ sufficient to drill into the deep untapped Caspain floor. With a contribution from Western Europe in providing the necessary technology the Caspian could soon be a thriving producer. Such agreements with the West have in part been worked out. Late in 1976 the U.S.'s Armco Steel and a Finnish concern won a contract to provide the ,/ Anlardk (on ...... g Soviets with exploration rigs. British Petroleum, with the most advanced offshore techniques gained through the Diaz Serrano, the director general of Peme)" the biggest North Sea, signed a cooperation agreement with the outlays within the six year plan will be in the production Soviets in September 1976 after which it was revealed sector (8 percent for exploration and 46 percent for that the two parties were in the advanced stage of development) . Refining will get 15 percent, 17 percent negotiating contracts for production rigging. will go for petrochemical development, and distribution The Caspian area is ideal for investment to increase and transportation will be alloted 13 percent. Pemex offtake becau!le large amounts of refinery and pipeline plans to drill 3,476 new wells during the six year period, infrastructure is already in place. The Caspian venture with stepped up primary exploration of existing fields and offshore areas such as the gas rich Black Sea, the and the development of new offshore fields. To date Pe­ Sea of Azov, plus offshore drilling in the Pacific could . mex had surpassed its 1977 production target of 953,000 b­ easily surpass in scale that of the North Sea and greatly d. contribute to the Soviet Union's production increase target of 640 million tons (about 12.9 mbd) . The Comecon countries have already shown signs of pulling their Table Mexico: Oil Supply 3- Balkan neighbors such as Turkey into joint ventures to and Export Forecast process and market crude. Recently it was reported that the Soviets were considering supplying a Turkish

Thou •• nd harrl'ls'''.y refinery with crude oil from the Baku fields. As part of a 1977 197M 197'1 I'IRO 19RI 1982 just signed $1.2 billion dollar trade agreement between Crude produc."tion 951 J 246 1 'i:!2 17HI 202H 22\2 I ),mtcstic rl'(luin'I1lI'nt 111111 '1 111 Ch1 1111 1 III!>H I 117 Turkey and the USSR, the Soviets have offered to con­ Sllrplu!; fl lr l' XI'Ulr. IH .l lh IifJX 7711 1)(,0 I Ill'; I.t"fc pru('(.'sNt·" tor l' ''pnrt H :'1·' .�O7 IMI 211 struct a refinery in Turkey on the Black Sea, while (:rudc for "" 'port l'i_' 1111 1<;.1 '5f. l Ti l) HI)4 l{cfininl! l°:tJl:n'ity Rumania is funding expansion of a refinery north of -nnmin:11 ... H6:; J 035 I 2711 I lHII 1-170 I 1070 -tltili�ahll' ... 71J"i C,7'i I 21MI I �I HI I 1'10 I ��O Ankara. Indications are that the Soviets are aiming once again to extend their petroleum wealth outside the War­ saw Pact nations in efforts to relieve the threat of insuf­ ficient oil supplies at home as well as in Europe and pre­ Th e Soviet Union ferred Third World countries like India. The key to the The largest oil producer in the world, the Soviet success of this drive depends directly on the tech­ Union's production last year topped 500 million tons (or nological assistance of the West and thus directly in­ an approximate average of 10 mbd) . The Soviet Union volves the political question of detente. plans to increase production by 150 million tons by 1980. The International Energy Agency last month released The Soviet Oil Mini"ter Valentin Shashin, according to a report predicting that by 1980 the world will experience the Kuwaiti magazine Europe and Oil, envisions new a 14 mbd deficit of petroleum. Such an assassment is output capacity of a whopping 450,000 tons. Efforts to clearly based on completely erroneous zero-growth increase Soviet output are important in one crucial estimate of global production. Assuming that such a respect, which is that the Soviets intend to step up ex­ deficit figure is reliable, the Persian Gulf producing ports of oil outside the Comecon and to decrease states could themselves easily fill the demand single­ traditional East bloc dependency on Soviet crude. During handedly for more crude in the coming years. -Judy Wyer

ENERGY 5 OPEC Countries Develop Nuclear Power Sou rces .

Keynoting the major international Conference on U.S. government veto demands have just resulted in a Transfer of Nuclear Technology, held in Persepolis, Iran breakdown of talks with U.S.-based reactor industries for April 10-13, the Shah of Iran told the gathering of top construction of 10 nuclear reactors in Iran even though energy spokesmen from some 41 countries including the Iran is a full signatory to the Non-Proliferation treaty U.S. that "the developing countries also have a right to and has the required safeguards in full force. Investigat­ free access �o the most modern nuclear energy." The ing further technology sources, Iranian Atomic Energy Shah's remarks are an attack on the Carter policy for Organization head Etemad is scheduled to go to Moscow restricting international development of nuclear tech­ in June, to investigate further technology sources. nology through U.S. control of technology transfer and Iran is well aware that a major point of potential sabo­ fuel cycle facilities. Nuclear fission itself is not the final tage is reliance on U.S. supplies of enriched uranium • achievement, the Shah added. "Nuclear fusion which is a fuel, with its consequent "strings," and made a shrewd safer and more efficient form of energy is the energy of buy in 1975 of a substantial interest in two large French the future." uranium enrichment proj ects, Eurodif, now under The Persepolis conference, the first such conference on construction, and Coredif. Iran thus secured safe sup­ nuclear technology transfer held in a developing sector plies of enriched uranium fuel at a time when limited country, marks a major change in the attitude of virtual­ U.S. enrichment capacity is making many U.S. delivery ly every key member of the Organization of Petroleum contracts untenable. Iran also contracted with France to Exporting Countries (OPEC). The reason for oil coun­ build a major used-fuel reprocessing plant, defeating tries' investment of billions in nuclear energy resources U.S. attempts to stall the project on non-proliferation is their increasing conviction that they must use their grounds. This will give Iran full fuel cycle options for petroleum res ources to develop petrochemical in­ future development of fast-breeder and related technol­ ogy. At the just-concluded Persepolis conference a dustry. If there is no substantial commitment today for ' the development of advanced nuclear energy and techno­ resolution was unanimously passed condemning the logical infrastructure, the OPEC countries will face Carter Administration's decision to end development of exhaustion of their current energy resources, with the fast-breeder and plutonium reprocessing, which is nothing to replace them to fuel an actual program of essential for breeder fuel supply. industrial development. As one Aramco official com­ While Iran has by far the most extensive program for mented : "The Saudis resent using their oil simply as a nuclear development, nearly every OPEC country is in. fuel source ...They are very insistent on developing new the process of making a substantial commitment to alternative energy sources." nuclear power including Kuwait, Indonesia, Venezuela, and Libya. Kuwait has invited tenders to construct a Iranian Pla ns dual-purpose power reactor to produce 50 MWe and sub­ To date, the most ambitious plans for development of stantial desalination capacity. Further plans include peaceful nuclear energy resources exist in Iran which construction of a commercial 600 MWe plant by 1986. has the fourth largest program in the world in terms of Facing a skilled manpower problem, Kuwait has stipu­ planned nuclear capacity by 1990. The Iranian govern­ lated the establishment of a small training reactor to pro­ ment is not unaware of the potential for strategic black­ vide Kuwaiti personnel with basic experience and mail confirmed in recent months by U.S. "non-prolifera­ training. A firm decision on the commercial reactor is tion" embargos on crucial nuclear technology to export expected in a few months. The International Atomic markets. Recently Dr. Akbar Etemad, head of the Iran­ Energy Agency (lAEA) has been fully involved on all ian Atomic Energy Organization, warned that if the U.S. aspects of program, safety and siting. government tries to interfere with Iranian acquisition of At the present time, Venezuela has a small test reactor nuclear capacity, Iran would turn to the USSR for crucial used to produce radioisotopes for research, but plans are supplies. underway to upgrade this capacity to include all areas of Iranian actions since they began their nuclear pro­ nuclear power development. gram in 1975, have, in fact, confirmed a very deliberate Indonesia is also investigating the development of a political awareness of the potential of U.S. cutoff of cruc­ commercial reactor program. ial technology. As a result, contracts have been made With this OPEC commitment to nuclear power develop­ with West German and French reactor firms for the ment and the realization in the developing sector that initial reactors. Two pressurized water reactor units they cannot remain hostage to U.S. dictated terms of with 1200 MWe capacity are under construction at technology transfer, it is little wonder that the United Bushire on the Persian Gulf in a "turnkey" contract with States' policy is already backfiring and costing a loss of KWU of West Germany, the reactor manufacturer in­ billions of dollars in contracts to U.S. reactor industries volved in the West German-Brazil deal. This is the first in the process. The same day that Iran announced its time a reactor has been built on a remote desert site and break-off of talks with the U.S. because U.S. veto stipu­ the first reactor is scheduled to be operational in 1980. lations were prohibitive and amounted to substantial Two French Framatome reactor contracts are near Iranian surrender of sovereignty, Spain announced sus­ agreement and Italy is a probable contractor for future pensIOn of work on eight American-built reactors- in pro- plants. test of Carter's plutonium ban.

6 ENERGY AND SCIENCE TECHNOLOG Y The Argonne Experiments

And The End Of Quarkery

.. Experimental results obtained over the past year at precisely the alignment in space of the accelerated beam the Illinois Argonne Zero Gradient Synchrotron (ZGS). protons and those of the target protons. taken in the context of previous "anomalous" experi­ Protons. like all other subnuclear particles possess a ments elsewhere. have conclusively refuted the basic magnetic field. similar to that which would be created by assumptions of the quantum mechanical approach to a charged body spinning on its axis - the direction of the high energy physics. and of the fantastic "theory" of axis of the magnetic field is called the spin alignment of quarks which was the degenerate end-product of that the proton. In a normal accelerator. protons of all differ­ approach. At the same time. by demonstrating the ent spin alignments collide with the target. thus blurring existence of dynamic geometric structures at subnuclear out any geometrically determined interactions. Even if levels. these experiments point the way to a new the accelerated proton beam begins as a polarized beam. theoretical framework for high energy and elementary with the spins all aligned in one direction. either parallel particle physics. a framework premised on the same or anti-parallel to the overall magnetic field in the ac­ self-organizing processes which are fundamental in celerator. the rapidly changing magnetic fields in the plasmas. and. for that matter. in biological and social accelerator tend to flip or depolarize the protons long evolution. before they have achieved very high energy. The For the past 50 years physicists have attempted to use Argonne ZGS accelerator. which has weaker focusing quantum mechanics to explain subnuclear particles magnetic fields than any other accelerator of its size. (protons. electrons. etc.) and fields on the basis of two can. with certain modifications. accelerate the protons fundamental assumptions : 1) that all matter is com­ without depolarizing them. Thus. beginning in 1973. the posed of point particles. without structure or dimensions. Argonne Lab in Illinois became the first high energy ac­ and 2) that their interactions are controlled by potentials celerator to collide spin aligned protons with spin aligned - fixed laws governing the forces -they apply on each targets (liquid hydrogen) . It remains at present the only other. Any sort of geometrical structure on a scale accelerator capable of doing this. - ­ smaller than that of a proton (about 10 -13 cm) was Protons. accelerated to 12 billion electron volts energy excluded by the quantum mechanical "uncertainty (12 GeV or the equivalent of a temperature of 120 trillion principle." Just as the Ptolemaic astronomer piled epi­ degrees C). collide with hydrogen nuclei and are scat­ cycle onto epicycle to cover over the gap between their tered into detectors arranged in a given plane and at assumptions and observation. so. especially in the past 15 definite angles. Since both the beam and target. or years. most particle physicists have stuffed a mixture of "recoil" proton. are observed. the dynamics of the inter­ Buddhist metaphysics and pure humbug into the chasm action can be calculated. By moving the detectors. the w h i c h s epa rat es t h e U I tim ate P a r­ entire scattering pattern can be determined. ticles - Quarks - from anything resembling reality. The theoretical expectations for the spin aligned ex­ Galileo's telescopic observations of Jupiter's moons. flat­ periments were unexciting. Since spin is considered to be ly contradicting the Ptolemaic assumptions of an earth­ a very small magnetic effect, not really geometric. but centered universe. swept the field clear for Kepler's just another minor field. the theorists expected that at breakthroughs. Today. the unarguable observation of high energies. spin effects would become very small. or subnuclear geometric structure performs the same task even disappear entirely. The exact opposite occurred. in eliminating the old quantum structure. quarks and all. The experimenters at Argonne found that spin align­ ment effects were thousands of times stronger than The Argonne Proton Spin Experiments expected at high energies. and were especially strong at The Argonne experiments. like all experiments in high large recoil angles. that is in more "head on" collisions energy physics. consisted of accelerating subnuclear where the interactions of the particles were the particles (in this case protons) to high energies and strongest. Specifically. they found that there was much hurling them against similar targets. and observing the greater scattering when the spins of the two protons were results. The aim of all such experiments is to obtain some parallel than when opposed. notion of the nature of the particles by observing their Secondly. whel) the spins were parallel and the spin interactions. The unique advantage of the Argonne ex­ direction is uP. there was far more scattering to the left periments for the study of the internal geometry of - than to the right. This asymmetry. similar to the ability particles is that it allowed the experimenter to fix of optically active molecules to rotate the polarization of

SCIENCE AND TECHNOLOGY 1 light, was concentrated in certain high angles of recoil, Thirdly, the experimenters found that the apparent thus producing "jets" of protons in certain directions "shape" of the proton was very much non-spherical. (Fig. 1). When the proton spins were aligned along with thebe am,

------�---'-Figure 1-Proto n Cross Sections,------'--,....,...--

.------Figure 1 0 ------. ---- Figure 1b------

• '�f( II) • * �f(t i) " If(i l) -

�T I() 11.75 GeV c

1 I- . ' : -3.45 e' e' " f3z�2 ,/

I I I I 2 2 2 3 4 1 B shows scatterin9 of spinP.. (GeV/c) parallel, right scattered <. .u.I, left scattered

" --, " " .10 ,/ / , I " 'I ' . " " \ , " I ;' ,O-37 L-�������������� I 2 3 4 5 6 7 8 9 10 II It ".," \\ I ' ...... --",'" ,,, \ J I , " I I I �--L---"� '---'-',--"--J-----'-----'---: 1 2 J32p1 [G eV/c]2 2 2 3 4 Pol (GeV/c) 1A depicts the overall cross section scatter' rate versus the 1C is the curve of spin effects. There is an increase in spin perpendicular velocity. Note the two sharp breaks in the effect as the perpendicular velocity' approaches the second scattering curve. break.

2 SCIENCE AND TECHNOLOGY there was much more scattering (about twice as much) first break, even if these are considered only as local as when they were aligned at right angles to the beam. clumpings of smaller point particles. But of course, since These results in themselves were startling and only scattering is being measured and not geometric disturbing enough. The existence of very strong spin structure, these results can, and were, dismissed as effects at high energies and the fact that these effects "merely interesting." were strongest for the most violent and penetrating The Argonne spin experiments explode this little collisions immediately strongly imply that spin is not cover-up. Dr. Alan Krisch, one of the main Argonne some simple magnetic effect but is intrinsic to the geo­ experimenters (and not coincidentally, one of those in­ metric structure of the proton. If the proton as a whole volved in the earlier scattering cross-section experi­ poses an asymmetric (non-spherical) structure ments) discovered that the maximum spin effects occur associated with its spin, then this has further implica­ at precisely the same angles of scattering as the breaks tions for the famous parity experiments performed in the in the overall cross-section curve (Fig. 1). This is a late 1950s and never since adequately explained. critical experiment of the highest importance, since it .. These experiments showed that in the decay of certain demonstrates beyond a doubt that the geometrical radioactive elements, such as Cobalt, electrons were properties of the proton, its ability to asymmetrically emitted with their spins aligned in the direction of their deflect other particles is itself distinctly inhomogeneous motion, while positrons, the anti-matter equivalent of on a scale of at least an order of magnitude smaller than electrons, were emitted with spins aligned opposite to that forbidden by quantum mechanics. their motion. What was perplexing was that this This is the crucial point to the experiments and there­ asymmetry implied that in some way positrons and fore deserves elaboration. The combination of quantum electrons were mirror images of each other, but were not mechanics and relativity theory implies that for any mirror images of themselves - they possessed left- and particle of mass M, there is a distance, D= hi Mc, called right-handedness. That is, a sphere when reflected in a the Compton wavelength of the particle, where h is mirror will be identical to itself, but a right- or left­ Planck's constant and c is the speed of light. There can handed glove will not be, nor will a particle whose spin is be no concentrations of matter within the particle that aligned with its motion. are smaller than this wavelength, excepting the special The obvious implication was that this "parity viola­ case of point particles. Thus, the experimentally verified tion" was a symptom of a geometric asymmetry in the existence of structures within the proton at least five structure of the electron similar to that of isomerism in times smaller than the proton's Compton wavelength organic molecules. The Soviet physicist Lev Landau implies either than quantum mechanics does not hold in suggested this at the time, but he was generally ignored. the interior of protons, or that Planck's constant is at The Argonne results demonstrate that such geometric least five times smaller in that region, or that the speed asymmetry in fact exists at the most fundamental of light is about five times larger, or some combination of structural level of the proton, at least, and quite possibly all three ! the electron as well. By themselves, these experiments still leave open the However, while disturbing, this aspect of the results possibility that some strange combination of point does not flatly contradict the quantum assumptions, particles and potential fields, even if organized on a finer since we are here dealing with the geometry of the proton scale than that allowed by quantum theory, could as a whole and thus at scales (around. 10 -13 cm) which somehow account for the structure observed. However, are still "allowable." The critical aspect of the Argonne other recent experiments have ruled out this escape experiments lies in the fine structure of the spin effects. hatch. If any sort of point particle potential combination For about 10 years, it has been known that the proton is responsible for particle scattering in collisions, then it appears to possess some internal structure. If it were is only to be expected that at very high energies, as the totally homogeneous, the number of protons scattered beam particle spends less and less time in the other over other protons would decline exponentially '!Vith particles' potential field, that scattering cross sections increasing angle of scatter. Instead, there is a "break" in (the number of particles scattered a given amount) will the scattering curve (Fig. I) . As in the case of the famous decrease. In fact, even at very high energies, the Rutherford experiments with the nucleus of the atom, the scattering cross section is continuing to increase - and higher than expected scattering at high angles implies a this occurs not only for the presumably complex proton, "hard core" of scattering, smaller than the proton as a but for the electron as well, supposedly the particle best whole, in this case about three times smaller in cross understood quantum mechanically. Taken together, the section. The normal explanation for this phenomenon has recent results in high energy experiments totally under­ been that the proton, although not itself a point particle, cut the foundations of not only current theories of ele­ is composed of point particles called partons, or the mentary particles, but quantum mechanics in its present notorious quark (a nonsense word from James Joyce's form. Of course, the implications of these results are by existentialist novel Finnegans Wa ke) . no means generally recognized, not even by the experi­ The immediate problem with this explanation, even for menters themselves. However, it should come as no the proton scattering results, is that there is a second surprise that such results have been obtained ; the real break in the curve, implying a doubly compound wonder is that the present theories have lasted so long. structure. This problem cannot be avoided simply by postulating that the quarks have sub-quarks of their own, Th e Paradoxes of Quantum Mechanics and so on, because this would still imply some real ex­ Since its consolidation in the late 1920s, quantum tended substructure within the proton on the scale of the mechanics has been bedeviled . by epistemological

SCIENCE AND TECHNOLOGY 3 ,..--.....;...------figu re 2

The Elementa ry Particles , The known particles are plotted against their mass as ' m easured in units of pion mass (270 electron masses) and lifetime as measured · in factors of alpha. 1/137 (lifetime increases from right to left). The 1B particles exhibit some striking sil)1i1arities. Virtually all the particles are very near the integral lifetimes and many are near integral masses. Note the general similarity of the matter of the nine par­ ticles decaying (denoted by the arrows) into protons (p) and neutrons (n) and the nine particles decaying into electrons (e) and photons rt) . •

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4 SCIENCE AND TECHNOLOGY blunders which it inherited from Newtonian mechanics, dynamic phenomena hardly outlasting the time of the especially the notions of point particles and fixed inter­ collision itself, which were thus hundreds of times acting potentials. As demonstrated by Immanuel Kant in shorter lived than the fastest decaying "stable" particle. 1781, such point particles introduce inherent contra­ Unfortunately, the particle physicists decided to imbue dictions into any theory. For example, an infinitesimal these phenomena with greater dignity, and called them electron will have an infinite electric field and thus in­ particles too. They thereby increased the number of finite energy and mass. That the dominant formulations "elementary particles" to well over 200, a number which of quantum mechanics continued to insist on the grew with practically every new experiment. Newtonian point particles is all the more remarkable The early 1960s was the logical period for physicists to when it is considered that the most striking successes of step back and begin a fundamental reevaluation of their quantum mechanics are based on the recognition of a theories in light of the accumulated evidence. Unfor­ continuous or wave character to matter, the opposite of tunately, this did not occur. Instead, high energy physics the ultimately discrete point particle. was submerged in a wave of numerology and Buddhist But insist on it they did, and as a result, in a funda­ mysticism, as various groups attempted to induce from mental way, the resulting theory of quantum electro­ the mass of data regularities which would allow dynamics was inherently contradictory. Results con­ classification of the data into numerical groupings of sistent with observation in the realm of atomic physics various religious significances. With several hundred were only obtained by the use of various explicit and "particles," there was indeed quite a field for induction ! implicit approximation and "renormalization" Various symmetries and magic numbers - octets, techniques, all of which relied on the convenient fact that nonets, dectets, sextets, etc.: were rapidly found and the electromagnetic coupling constant, which is about given appropriate names - like Nobel laureate 1 /137, got much smaller very rapidly, leading to a rapid Gellmann's Eight Fold Way. After a while, the quest for convergence of approximations. In contrast, the doctrinal simplicity led to the theory that all of the 200 "strong" or nuclear interaction has a coupling constant particles and resonances were made up of a single considerably greater than 1 (about 13) and therefore Ultimate Particle - a Quark. similar series of terms in powers of the coupling constant Quarks, once invented, seemed to have the capability. do not converge at all. Thus from the start, quantum as mere mental constructs. to multiply faster than mechanics' internal contradictions prevented a rigorous rabbits. First of all. to account for all the different treatment of nuclear interactions. particles, it was immediately necessary to theorize more Nor was such a treatment seriously attempted. than one type of quark. which could combine together to Beginning in the late 1930s, and with increasing speed make up the particleS. Gellmann therefore created three after World War II, physicists fled from the problems of quarks. distinguished by an imaginary quality he called theory to the latter-day Holy Grail - the Search for the ,"up," "down" and "strange" - Quark flavor. After a Ultimate Particle. By the late 1930s, in addition to the good deal more theorizing. without particular reference electron and proton, three other subnuclear particles had to any experimental results. it was decided to add a been observed, the neutron and two so-called mesons, of fourth fla vor - " charm." mass intermediate between the electron and proton. This however was insufficient. since if several iden­ These particles were observed as a result of radioactive tical quarks came together in one bigger particle. a decay of the collisions of high energy cosmic ray par­ fundamental dogma of quantum theory would be violated ticles with nuclei. With the development after World War - the exclusion principle. which prohibits the cohabita­ II of increasingly powerful particle accelerators, more tion of identical particles. Thus to distinguish the and more "elementary particles" both heavier and similarly flavored quarks, a new property was invented lighter than the proton were observed. These particles - "quark color." Each flavor now had three colors - were detected by their tracks through cloud chambers red. green and blue. as well as colored anti-quarks - and photographic emulsions. All had very short cyan. magenta and yellow. (If the reader's credulity is lifespans, less than a millionth of a second, decaying into pow somewhat strained. he is referred to the January other short-lived particles and eventually into protons, 1977 issue of Scientific American. where the quark electrons, and energy. theory. in living color. is described by its own Each particle had a corresponding antiparticle, proponents.) identical except for charge. Particle-antiparticle pairs By this time the number of elementary and unobserved could be produced from sufficiently strong electro­ particles had climbed to 24. not counting a few which. magnetic fields, and the collision of particle and an­ like the electron. were not included in the first place. But tiparticle led to mutual annihilation. the quarkists were not through - they had to have a By the early 1960s, 16 such particles (and their ai. · force to hold the quarks together. and thus a particle to tiparticles) had been discovered and two more have been carry that force. Eight of these "gluons" were deemed discovered in the past 15 years (Fig. 2). However, this about right, bringing the total number of new particles to already complex picture was further complicated by the 32. considerably worse than when they started some 15 epistemological blunders of the investigators. As ac­ years previously. celerators grew more powerful, it became obvious that (Not only have particles multiplied•. but so have force there were certain particular energies at which the inter­ fields. At last count theoretical justifications had been action of two particles suddenly became stronger. These produced for at least three other forces besides the ob­ ' "resonances" could be interpreted as evidence of short­ served electromagnetic. gravitational. and nuclear lived excited states of the particles involved, transient forces.)

SCIENCE AND TECHNOLOGY 5 One serious problem remained. The quarks (charmed, blithely ignored on the microscopic scale. Electrons, if colored, and flavored). have stubbornly refused to put in they were point particles, would of course have gravita­ an appearance. Despite looking high and low for them tional singularities. To ignore these singularities because with multibillion dollar accelerators, not one of these they are quite small is to imitate the famous young lady mythical beasties has yet been found. Unlike the Loch who was just a little bit pregnant.) Ness ,monster, they have not even been glimpsed. Such an embarrassing lack of connection between theory and The Redirection ofHigh Energy Physics observation gives free play to the imagination, but also The first step in redirecting subnuclear physics out of leads to nasty questions about the worthwhileness of the its present cui de sac is to throw overboard the funda­ endeavor. mental assumptions which got it there in the first place The quarkists have an explanation: "the law of quark - both point particles and unchanging fields. In place of confinement," which conveniently dictates that quarks these axioms, subnuclear or high energy physics must can only exist inside other particles and thus can never adopt those assumptions which are coherent with the • be observed. This intriguing idea has led one devotee to directions already demonstrated in plasma physics, and, ask rather plaintively, "If a particle cannot be isolated or in an epistemological sense, in ecology and economics. observed even in theory, how will we ever know that it The fundamental characteristic of the universe is exists?" evolution - this is obvious at the level of the biosphere or We have thus arrived today at the Putrescence of the human society but must be coherently true of the Elementary Particle . It is high time that physicists use physical universe as a whole. Thus it must be the case the new results to sweep up the debris of quarkery. It is that the laws of the universe themselves evolve. In no coincidence that many of the most prominent particle plasmas it is demonstrably the case that the evolution of physicists today reflect the same existentialism in their a physical system is mediated through certain definite "life styles" as in their Buddhist physics. Einstein's self-organizing geometric structures, such as the vor­ violin and Mozart have been replaced by Feynman's tices common in energy-dense plasmas. Subnuclear bongos and rock music. One Nobel laureate recently physics, which is simply the extreme high energy ex­ made headlines by testifying in California against an tension of plasma physics, must be characterized by ordinance prohibiting sex shows and nude bars, stating ' similar pheonomena. that after the long grueling hours of quark theory, he Th e working assumption which must replace the himself often frequented such scenes. current axioma tic system is that subnucJear particles But it should not be thought that merely junking point are self-organizing geometric structures comparable particles for pure continuums will be all that is with plasma vortices. Such structures media te through necessary. The problem is more fundamental. It lies in their concentra tion (capture) of energy the development the notion offixed fieid la ws, valid at all tim es and in all of new field-interactions, which in turn lead to new levels situations. Any such simple continua lead directly back of self-orga nized structure. to the conundrums of point particles. Take, for example, The postulate that subnuclear particles bear a the current confusion about Black Holes. General resemblance to self-organizing entities in plasma Relativity predicts that any sufficiently massive body physics is not at all speculative. It is indisputable that will collapse under its own gravitational force without such particles do in fact concentrate immensely the field limit down to an absolute point - a point singularity, energy in coming into being in pair production - the field having infinite gravitational fields. Any object near such in fact organizes itself into the particle. The Argonne a singularity would get sucked in and disappear "over experiments prove beyond a doubt that we are indeed the edge of the universe." dealing with geometric structures, and thus, taken Until recently, it had been thought that such singulari­ together with the phenomenon of pair formation, self ties would be demurely covered up thus preventing organizing structures. In addition, the characteristic physicists from every observing, and thus having to asymmetries of the Argonne experiments and the much worry about one. Since light itself could not escape from earlier parity experiments are exactly what one would the region around the singularity, a Black Hole of finite expect from specifically vortical structures. extent would be formed, within which nothing could be Nor is it speculative to postulate fields which change observed. The singularity would be out of sight, and their laws with time and space. As we have seen, non­ presumably out of mind. Unfortunately physicists have constant values of c and h are in fact necessary to ac­ been unable to separate the dilemmas at the opposite count for known experimental results, and without such ends of the magnitude scale, and at a recent Astro­ changes "in the small," there is no way of avoiding the physics conference in Boston, quark met the Black Hole production of point singularities. Since geometric vortex­ with disastrous effects. Calculations were revealed like structures can have greatly different interactions at showing that pair formation would lead to energy and short and long range, such changes of interaction law are mass slowly leaking out of the Black Hole, eventually coherent with their existence. destroying it and leaving behind the "Naked Singu­ Such a working assumption enables us to begin to larity." Morality and physics both trembled at the answer the question of why such a variety of short-lived ' thought ! particles - the 18 "stable" particles - should exist in the Thus the study of pure fields ends up in the same mess first place. That is, what role do they play in mediating as the study of elementary particles. (Interestingly the capture of energy? For example, in an extremely enough, the existence of gravitational singularities high energy plasma of electrons or electrons and which is found so shocking on an astronomical scale is positrons, direct energy capture through positron

6 SCIENCE AND TECHNOLOGY electron pair produC,tion is extremely slow. However, using colliding beam techniques. Second, the study of the energy capture is mediated far more rapidly through the dynamic evolution of particles by attempting to find production of the short-lived particles which in turn changes in interaction behavior with increasing "age" of decay into the stable, captured energy forms - the individual particles or particle beams. Third, the proton and electron. development of techniques for examinging possible It is striking that, as was first pointed out last year by collective modes of interaction at high energies through the physicist MacGregor, the lifetimes of the particles increasing the densities of both accelerated particle are nearly evenly spaced from each other by factors of beams, and of thermonuclear plasmas to extremely high alpha - the electromagnetic coupling constant, 1 137. values. If very different forces, electromagnetic, strong, weak, It is ironical, but not surprising, that ERDA's current are supposedly at work in these decay times, as is budgetary plans call for the closing of the unique generally supposed, such a regularity of lifetimes must Argonne accelerator at the end of this year. Such an be considered a remarkable coincidence. However, if it action would be the equivalent to destroying Galileo's is assumed that the particles are related to each other as first telescope. The requirement is quite the opposite - various "compoundings" of vortex-like structures, then to subsume the investigation of self-organizing the regular relation of their energy throughput rates, and phenomena in the high energy realm within the broader thus their lifetimes, is completely expected. context of the theoretical plasma physics program we A Program for High Energy Physics have already proposed as the core of a fusion power The adoption of the proposed working hypothesis development plan, and to give it the full financial support immediately implies a theoretical and experimental required. ' program for the development of high energy physics. The benefits of such a research program will Theoretically, the examination of the interaction of inevitably be very great. For the fusion program itself, compounded vortical-type geometries requires a con­ there will be a vast increase in the sort of useful cross­ siderable extension of current mathematical techniques. fertilization of research on high energy and thermo­ One method of attacking this problem is using three nuclear plasma phenomena which has characterized the dimensional hydrodynamic computer simulation of Soviet electron beam work. But beyond this, the under­ collision of vortices, multiple vortice geometry, and so standing of the nature of the subnuclear realm will be, forth. The second is the development of techniques to over the long run, essential to man's conquest of the deal with hyperspaces in which the rate of energy cap­ universe, to the development of interstellar flight. Above ture is the primary metric, defining the evolution of the all, it will give coherence to a new scientific view of the system as a geodesic in such a space (a line of maximum universe, in which the same self-developing creative rate of energy capture.) tendency which characterizes human thought itself will Experimentally, a number of lines of investigation are be empirically demonstrated to be an immanent quality immediately suggested. First, the repetition of the of matter at its most primitive level. Argonne experiments with spin aligned electrons and And, of course, the quarks can be quietly returned to positrons, and their extension to higher energy regimes their original home in some bottle of old Irish whisky. - Eric Lerner

SCIENCE AND TECHNOLOGY 7 Top U.S. Scientists Asked Carter For 'Apollo'

Fusion Progra m In February

T,he fo llowing letter from two leading fusion researchers to President Carter, da ted Feb. 16, shows tha t the President was well inform ed about the potentia l benefits of fusion energy de velopment prior to the fusion program budget cuts he instituted. John M. Da wson and Burton D. Fried are both professors of physics at the Center for Plasma Physics and Fusion Engineering at the University of Ca lifornia , Los Angeles. Besides calling for a crash fusion program in their letter, they note many of the most significant developments in fusion up to this point.

Dear President Carter: fusion is generally considered to be the most promising solution to the energy problem in the long term due to its We wish to applaud your firmly stated intention to essential advantages : the virtually unlimited supply of establish a national energy policy. a step which is dis­ fuel. the freedom from problems of diversion of nuclear astrously overdue. and also your plans to emphasize not material. the greatly reduced generation of radioactive only conservation and near term energy options but also waste products (or even their elimination. through the research on solar energy and other renewable energy use of advanced fuel reactions which produce no neu­ sources. These latter programs, being essentially long trons). The major disadvantage of fusion simply arises term in character. tend to get very short shrift compared from the severe technical difficulties which must still be with efforts to find short term solutions to our incredibly overcome in the basic physics. the sophisticated engi­ urgent present problems - but in twenty years the near neering and the high technology required for an econ­ term problems will be even worse than at present if we omic reactor - but history shows this is just the kind of have failed to press for the long range solutions in the in­ challenge to which our society can respond so terim. This letter is motivated by our profound concerns magnificently. given proper leadership. The past 20 regarding the long term aspects of the U.S. energy pro­ years have seen a steady progress in fusion. with the gram. critical parameters - plasma density. plasma tempera­ With your background in nuclear energy. you un­ ture and energy confinement time - all increasing. doubtedly know that. aside from solar power. controlled notwithstanding budget levels which have been unrealist-

Recent Significant Advances In Fusion

1. The achievement. in tokamaks. of kilovolt ible, and that it may be possible to burn advanced plasma temperatures and confinement times ap­ fuels in such reactors. i.e.. fuels which produce proaching those required in a thermonuclear reac­ very few neutrons and. hence. much less radio­ tor and. in particular, the achievement of con­ activity than even DT reactors. ditions close to those required to get useful energy 7. The development. by the Lawrence Liver­ out of a driven reactor (wet wood burner). more Lahoratory, of direct energy converters 2. New inventions by the University of Wis­ which m ay he employed on some thermonuclear consin fusion reactor group for achieving long life devices, and the invention. by a group at the Uni­ of the first wall of a reactor. versity of Washington, of high efficiency heat en­ 3. Recent ideas developed at MIT for very high gines that could be used with thermonuclear reac­ density tokamak reactors. tors. 4. Experiments at the Lawrence Livermore Laboratory, which demonstrate the generation of a R. New studies by Westinghouse and Math thermonuclear plasma using neutral beam injec­ Sciences Northwest. which indicate that a Fusion­ tion into mirror machines. Fission system. using fusion systems presently on 5. Studies at Los Alamos which indicate that the drawing boards, could make very efficient material end plugging of straight systems may be breeders of fission fuel. probably in ways that avoid more effective than anticipated. many of the dangers associated with conventional 6. Recent results, obtained by groups at the breeders, and which are more compatible with �.l University of Wisconsin, UCLA and at TRW, show­ present electric utility company programs than the ing that reactors of the multipole type may be feas- conventionai breeder program. ::l ------J :1 SCIENCE AND TECHNOLOGY ically low in view of the enormous difficulty of the prob­ gram. such as the tokamak. are based directly on re­ lems and the incalculable benefits which would accrue search carried out in the USSR during the 1960s. when the from their solution. Just in the last few years. there have Soviet program was much larger than ours. This pro­ been a number of advances which we regard as particu­ gram has been a model of collaborative international larly significant. principally as a consequence of recent undertakings. and it seems certain that a declaration of increases in funding: some of these are listed on the en­ fusion as a U.S. national goal. with appropriate support closed sheet. levels. would stimulate enhanced efforts in the USSR. To those scientists. like ourselves. who have devoted Europe and Japan. our professional efforts to this challenging problem for You have adopted goals for your administration which the past 20 years or more. it is clear that. notwithstand­ are literally breathtaking - controlling the federal ing its great promise. fusion power is unlikely to become bureaucracy. controlling the arms race. diminishing a real option for this country if present levels of support world tensions. We wish you the best of luck in these " are continued. If adequate resources were available. we undertakings and we hope that. to your achievements in are certain that fusion could succeed; the difficulty in these areas. you will add the great distinction of being securing such support may arise simply because. like the man who launches the fusion program on a course any long term project. fusion will not come to fruition which will lead to success in this century. until most present politicians have left the scene. You alone. are in the position of being able to make a national commitment to this goal. somewhat analogous to �incerely yours. President Kennedy's stirring declaration that we would land a man on .the moon. Solving the fusion problem is. John M. Dawson frankly. much more difficult than the Apollo project. but Professor of Physics and the benefits to our country. and to all of humanity. are Director. Center for Plasma Physics and incalculably greater. As you may know. there has been a Fusion Engineering modest worldwide effort on fusion during the past 20 years. characterized by very close cooperation. on a Burton D. Fried totally unclassified basis. between many countries. the Professor Physics. principal efforts being in the USA and the USSR ; in fact. Center for Plasma Physics and man� of the ideas being pursued in the present U.S. pro- Fusion Engineering

Fast Breeder Reactors - If They're So Dangerous,

Why Are The Soviets Building Them?

Th e Soviet Com munist Party paper Pravda published efficiency of the use of uranium in them rises ac­ an article Ma rch 27 entitled "Fast Breeder Reactors : It 's cordingly. Tim e for Serial Production, " by o. Kazachkovskii, Dir­ (Research on fast breeder reactors) began in our ector of the Ph ysics-Energy Institute in Obninsk. Th e country as early as 1949, under the scientific direction of fo llowing are excerpts from the article: A.I. Leipunskii. Approximately by the beginning of the 60s the necessary research had been done which made it Atomic electricity stations are now being successfully possible to go ahead with the construction of the first elec­ developed in many countries. The majority of them, with tricity reactors. Now considerable experience has been thermal-neutron reactors. recommend themselves as accumulated and valuable data has been gained through reliable, safe. economic sources of energy on an indus­ experimental-industrial use. Thus in Dmitrovgrad, in the trial scale. However they by no means utilize the atomic Ul'yanovsk region. the BOR-60 fast breeder reactor has fuel in the best way - only 1-2 percent of the uranium is been successfully functioning for eight years now. Since burned up. Reactors of a totally new type - with a chain 1973. the biggest fast breeder reactor in the world, the reaction of fast neutrons - are free from this deficiency. BN-350, has been operating in Shevchenko, on the Here practically all the uranium can be used. including Mangyshlak Peninsula. It generates heat both for the that which is presently wasted. generation of electricity and for desalination of water. In What happens is that in fast breeder reactors uranium Beloyarsk in the Urals construction is being completed is transformed into plutonium. which burns almost com­ on an even larger fast breeder power reactor, with an pletely. Thus two processes are going on in opposite electric capacity of 600 Megawatts. directions - the combustion of the fuel and the The results achieved have confirmed the correctness generation (expanded reproduction) of new supplies of of conceptions underlying the projections for fast it. Furthermore. the fast breeder reactors significantly breeder reactors, and demonstrated the high degree of surpass thermal reactors in thermal parameters and, as reliability of such systems. Essentially the only problem a consequence. in the coefficient of useful activity. The requiring solution for large-scale use has turned out to be

SCIENCE AND TECHNOLOGY 9 the steam generator. There are not the sJighest doubts growing energy demands of the country for a long time. about the possibility of overcoming the difficulties that The economic advisability of this is evident, as is , fur­ have arisen here. Ways of substantially raising the thermore. the real need to begin broad construction of reliability and efficiency of this apparatus through large-block atomic electricity stations with fast breeder engineering improvements and the use of new construc­ reactors. in the soonest possible time. It is precisely for tion materials are evident. True enough - this entails this reason that the decisions of the XXV Congress of the the necessity for developing the experimental basis for CPSU (Communist Party of the Soviet Union - ed.) operating and large-scale tesiing of future atomic elec­ envisage speeding up this work .... tricity stations .... The scientists of the countries of the socialist com­ As stated above, fast breeder reactors produce more munity are showing great interest in this program. This new fuel than they burn. The surplus thereby achieved - is why it makes sense, especially for the best coordin­ after the appropriate chemical processing - can (and ation of efforts, to provide for the organization of a base must) be used for fueling newly introduced fast breeder for testing equipment, with the participation of special­

reactors. The rate of growth of the fuel is an extremely ists of interested CMEA (Council for Mutual Economic .. important indicator in this regard, since it determines Assistance. or Comecon - ed) member countries on a co­ the possible in�rease in the park of fast breeder elec­ operative basis. tricity reactors. This rate is not unlimited. An important as a whole. the volume of work in the area of fast conclusion derives from this : we must not delay the breader reactors is extremely great. and its realization broad construction of fast breeder reactors from the of course exceeds the bounds of the present five year beginning. Otherwise it will simply not be possible to plan. It is precisely in the 10th five year plan, however, develop their capacitity to the necessary level in a short that the decisive steps must be taken and firm founda­ time. tions laid for broad development of industrial fast Fast breeder reactors make it possible to meet the breeder reactors.

10 SCIENCE AND TECHNOLOGY SOVIET SECTOR

Moscow Refuses To IPlay Ba llI With Brzezinski

An extraordinary two-page editorial in the Soviet flatly ·announced last week that he did not believe Communist Party paper Pra vda yesterday announced Gromyko really meant what he said ! However, Warnke the Soviet Government's wholesale rejection of u.s. blustered on national television April 10, the U.S. is efforts to pretend that the Carter Administration's operating on a "short timetable," and if no breakthrough strategic arms (SALT) proposals are still on the nego­ on SALT is reached by the time Vance and Gromyko con­ tiating table. "Some quarters are pretending in vain fer again in May, the U.S. will have to go ahead with new that the Soviet side has not given a final answer and that weapons programs. · it allegedly needs time to study the new American pro­ The Soviet news agency TASS promptly denounced posals because of their 'drastic character,' '' said Warnke for "threats" and "attempted blackmail." The Pra vda . On the contrary, the editorial declared, the U.S., it said, will have to "assume all responsibility for Carter package "not only lacks any constructive element the consequences of such actions." I but in general cannot be the subject of serious discussion. Nor is it intended for such discusssion." (A full analysis The Real Debate of the Pravda statement will appear in next week 's EIR.) The Warnke-Brzezinski bluff is an even more stupid The Wa shington Post today, calling this a "full-blown miscalculation than their original expectation that the public assault" on the Carter administration's nuclear Soviets would agree to bargain with Vance in March. The arms control offers, reported that it has already "jarred official U.S. attempts to transfer the Moscow-Washing­ ton debates to 'discreet' private negotiations." Incred­ USLP Pins Arbatov At MIT ibly, however, administration officials and advisers quoted by the Wa shington Post attempted to minimize When Georgii Arbatov, head of the Soviet USA the impact of the Pra vda statement. It's only a "news­ and Canada Institute, told a Massachusetts In­ paper editorial," said one. "Pra vda is discussing our stitute of Technology audience April 11 that science proposals in a way, despite the Soviet contention that and technology increase the danger of nuclear war, they do not warrant discussion," said another. the Trilateral Commission backers sponsoring his However Soviet diplomats have shown to all but the lecture rushed to defend him from questions by U.S. mentally unhinged that the editorial is Soviet policy, and Labor Party members. Moderator Karl Kaysen ­ it is final. In a meeting yesterday with national security a participant in the recently issued Ford Foun­ adviser Zbigniew Brzezinski, Soviet ambassador Anatoly dation nuclear energy study advocating dein­ F. Dobrynin unceremoniously refused to enter into what dustrialization and cuts in energy use - banned Brzezinski euphemistically referred to as "the bar­ what he called "political polemics" in the question gaining process." "That they don't find our proposals period and prevented Labor Party speakers from congenial has already been made clear," Brzezinski told taking the floor. reporters, "and they have not departed from that Labor Party spokesman Graham Lowry, position. " however, collared Arbatov after the speech. "As Soviet Foreign Minister Andrei Gromyko rejected the you know, " Lowry said, C'the greatest danger today Carter Administration's proposals, advanced by Secre­ is the threat of thermonuclear war. And this danger tary of State Vance in Moscow last month, as "a dubious, is seriously increased by misperceptions among the not to say cheap" trick to place the Soviet Union at a Soviet leadership of the true state of affairs in the strategic disadvantage to the U.S. The proposals would United States. You are a key part of an intellegence have the USSR cutting its strategic weapons arsenal by operation aimed against the Soviet leadership. At half while U.S. stockpiles remained virtually untouched, one time we thought you were just an incompetent. and halting its vital military research and development Now we know you are an incompetent Rockefeller programs, which some observers say are "20 years agent." Lowry detailed Arbatov's extensive ahead of the U.S." consultations with David Rockefeller and Zbigniew Despite the Soviets' unequivocal response, Brzezinski Brzezinski. - targeting the previously compromise-prone Brezhnev The MIT lecture series, entitled "World Change faction in .the Soviet leadership - still hopes to provoke and World Security," has featured other leading at least "comment" on the U.S. proposals, thereby Atlanticists like McGeorge Bundy and Robert resuming bargaining on the terms set by the Carter MacNamara. Administration. Chief U.S. arms negotiator Paul Warnke SOVIET SECTOR 1 Politburo decision to override waverings from Brezhnev enemies of peace would like to place their stakes on." and reject Vance's package out of hand was not lightly The precisp- opposite was trumpeted by Arbatov to a taken and will not be reversed. That issue settled. the Massachusetts ln stitute of Technology audience April 11. faction fight continues on a new footing: what political Arbatov said what he could never say in public in the course to take in the wake of the SALT fiasco. Soviet Union: "the hazards of too rapid scientific On the one hand, Carter is provoking the Soviets development" have brought the world close to the danger toward a military hard line. indicating war preparations of thermonuclear war. and a growing conviction in the USSR that a nuclear con­ Speaking on the "question of a new economic order," flict is likely. On the other. the Soviet faction favoring a Arbatov made no mention of the real basis for such an political solution to the Carter problem is doing the leg­ order - a break with the dollar - instead he called for work for a decisive move into transfer-ruble financing of "new international agencies" to "deal with resource world trade in the coming months. Deputy Foreign Trade problems." This category includes the "Common Fund" Minister Komarov is in Italy, reportedly to discuss this proposal for bailing out the New York banks. This re­ matter with the Andreotti government. source cartel plan was put forward by the Brookings Intersecting this debate is Rockefeller's inside man in Institution, a Rockefeller think tank that Arbatov has Moscow, Georgii Arbatov, the director of the USA and praised in recent press articles. Canada Institute, who is exerting every effort to dis­ Arbatov retailed the line that has become the hallmark orient the Soviet leadership as to the real situation in the of his long-standing efforts to confuse Soviet leaders on United States. and thereby blunt Moscow's political the true state of affairs in the U.S.: "vested interests," effectiveness. "the military industrial complex," have created a huge Since the collapse of Vance's trip and what the Soviet war machine, and it is their thirst for profits that is creat­ party daily Pra vda called Carter's "alarming obstin­ ing the w�r danger. The interests to which Arbatov refer­ acy" in sticking to his rejected package, the Soviet press red 'are primarily those conservative U.S. industrialists has lambasted Administration tactics in increasingly who are a leading source of opposition to the Rockefeller- harsh language. A leading commentator of the govern­ Carter push for war. ment's newsdaily Izvestia declared that Soviet-Ameri­ can relations are at "a critical crossroads" and could Arbatov is actively engaged in spreading this nonsense deteriorate further with consequences for "the entire throughout the Soviet press. A member of Arbatov's USA international situation." The Soviet military daily Red and Canada Institute, writing a guest feature in Red Star Star, repeating a formulation of Defense Minister April 10, lied that the U.S. Joint Chiefs of Staff were Ustinov's, vowed that the Soviet economy, science, and "pleased" with the Carter proposals. Actually, as the technology are now at a level that they can create "in the Washington Post has reported, the Joint Chiefs opposed shortest period of time. any type of weapon that the the Administration's strategy as too provocative.

Czechs Endorse New Swedish Com munist Formation

April 13 (NSIPS) - On March 5 the leadership of the March in Swederi, are defense of the vital interests of the powerful Norskensflamman faction of the Swedish Com­ Swedish working class, the struggle for peace, demo­ munist Party, the VPK, announced that it was form ing a cracy and social progress, and the struggle against im­ new party. the Arbetarpartiet Kommunist (APK, Com­ perialism. This was stated in the document of the confe­ .. munist Workers ' Party) . At issue in the break is the rence of this party. which took place March 26 and 27. VPK's NA TO-inspired anti-Sovietism and "zero growth .. The documents also, stressed, that the party will consis­ and anti-nuclear-energy policies, which the APK's preli­ tently adhere to the principles of Marxism-Leninism and minary progra m counters with the demand for rapid de­ proletarian internationalism. velopme1Jt of fission and fusion power. On April ' 8, the The formation of this party was the result of the Czechoslovak daily Rude Pravo became the first Eastern aggravation of differences within Sweden's Left Party­ European Com munist Party paper to endorse the APK. communist (VPK, the Swedish Communist Party - ed.). Rude Pra vo 's article signals tha t some Eastern Eur­ According to the Swedish press, the leadership of that opean leaders intend to make the APK's principled de­ party took action against certain communists and ex­ fection from theagent- ridden Swedish Communist Party cluded them from the party. These were people who an international issue, and use it as leverage against criticized the policy of the leadership, because it other anti-Soviet "Eurocommunists " still plaguing the departed from the basic ideological principles of the Western communist parties. party. Their views diverged from the leadership's on the Th e Rude Pra vo article read in full: principles of proletarian internationalism and the Stockholm, April 7 (CTK) - The main tasks of the evaluation of the significance of real socialism for inter­ new Swedish Arbetarpartiet Kommunist. founded in national developments.

2 SOVIET SECTOR MILITARYSTRA TEG Y

Air Force General On ABAt1 Sov iet Technology '20 Years Ahead Of U.S.'

In an impassioned speech to a group of Washington the road to national suicide, and, on the other, profession­ newsmen delivered under the auspices of the American als like Keegan who commonsensically understood that Security Council, Major General George J. Keegan, Jr. the Soviets were indeed pulling ahead and, therefore, (U.S. Air Force Ret.) gave an honest professional assess­ confrontation meant the end of the U : S. The latter are ment of thepresent strategic situation: "The Soviets on a now seeking forums outside the CPD. war-winning philosophy ... are 20 years ahead of the Uni­ ted States in its development of a technology (e.g., fusion CPO Monetarists Blow Cover and laser - ed.) which they believe will soon neutralize The collapse of the SALT talks and the announcement the ballistic missile weapon... They are now testing this of the Carter Administration's de-energization program technology ..." has forced the monetarist debt collectors who have been "The intelligence community was consistently wrong masquerading as patriots in the CPD and Team B to blow in its estimate of the development of broad-based Soviet their cover. On April 3 the CPD Executive Commit­ science ...," Keegan continued. "When people talk about tee - whose members include Chase Manhattan Corpo­ technological superiority in this country, they are talking ration director David Packard, Goldman Sachs partner about potential and futures that have not yet been bought Henry H. Fowler, Warburg banking family lawyer Rita and paid for, distributed and manufactured and deployed E. Hauser, former Rockefeller Foundation president

to our forces . . . I object to the failure to observe the nor­ Dean Rusk; Trilateral Commissioner and AFL-CIO Sec­ mal checks and balances, of letting the public know, let­ retary Treasurer Lane Kirkland, Social Democrats-USA ting the leaders know, letting the press know, and letting official Eugene V. Rostow, ex-officio Schlesinger, and the full range of uncertainties be in the open - lest we others besides, Nitze, Pipes and Zumwalt -issued state­ make the kind of mistakes that have gotten us into every ments and an ll-page report revealing their commitment war this country has ever been in." to a policy of technological disarmament and worldwide General Keegan's remarks, which were reprinted in deindustrialization, preferably with Soviet cooperation, the defense industry-linked Aviation Week magazine on and their determination to continue on a nuclear confron­ March 28, contrast utterly with the viewpoint publicized tationist collision course. last week by spokesmen for the Committee on the Pre­ The Executive Committee's psychotic pronoun­ sent Danger (CPD) - a Trilateral Commission front or­ cements are in direct contradiction with the pu blicly ganized by the Rockefeller bankers for the purpose of stated pro-growth positions of many of its members containing and manipulating pro-development military including ,scientist Edward Teller and building trades professionals, industrialists, and labor leaders. CPD official Martin J. Ward, as well as industrialists and spokesmen, including banker-turned -arms negotiator military men associated with the American Security Paul Nitze, monetarist professor Richard Pipes, Carter Council who have been within the CPD's orbit. energy czar James Schlesinger (a CPD founder, though In presenting the report at a Washington news con­ not an official member) and Rockefeller Admiral Elmo ference, "cheap trick" artist Paul Nitze telegraphed the Zumwalt, all denied the existeficeof a u.S. strategic dis­ fact that the CPD executive was involved in the for­ advantage vis-a-vis the Soviet Union, while defending the mulation of Trilateraloid Zbigniew Brzezinski's and Carter Administration's "technological disarmament" Cyrus Vance's insane "technological disarmament" SALT package, and enthusiastically boosting the Carter­ SALT proposal to the Soviets. Nitze lied that the Soviet Ford Foundation deindustrialization program that man­ Union rejected the Carter Administration's arms dates the sabotage of the development of .fusion techno­ limitation proposal in Moscow last week "because it is an logy as well as a ban on plutonium use. equitable deal, and that's what they don't want." The In fact, Keegan's statement confirms that the CPD cir­ Carter proposal, amongst other things, demanded a ban cle is cracking apart over just this issue. Nitze and on the development of advanced technologies and an Pipes - as well as Keegan - had been members of agreement to sabotage nuclear energy development for "Team B," a group of "outsiders" brought in by the CIA Europe and the Third World under the cover of "nuclear last year to make an allegedly indep endent analysis of non-proliferation. " America's strategic situation. Team B's subsequent warnings have been the basis for the CPD's propaganda Black Propaganda for the need fora massive U.S. arms push and confronta­ To manipulate industrialists, trade unionists, and mili­ tion with the Warsaw Pact. tary leaders into support for this "disarmament,"­ Keegan's report demonstrates that both Team B and covered end . to technology, the CPD Executive report the CPD were hybrids from the start, containing on one "warns" about a "grand strategy" by a Soviet "expan­ side Wall Street stalwarts ready to send the country on sionist empire" to "reduce any potential opponent's abi-

MILITARY STRATEGY 1 lity to resist." The black propaganda report specifically Director Stansfield Turner eChoed this nonsense line in assails "the multiplying and tightening of links connect­ an interview with the New York Times on April 6. Tur­ ing Western Europe to the Soviet Union and its dependen­ ner, after comparing the industrial-based USSR to 19th cies," "the strengthening of the Soviet economy through century Czarist Russia, observed that "he does not be­ a process of intensive modernization ... achieved in part lieve that the Russians have yet attained nuclear by heavy borrowing of capital and technology in the ad- weapons parity with the United States ..." but "sees a o vanced 'capitalist' countries," and alleged Soviet "un­ gradual erosion in the military balance between the Uni­ dercutting of the economic links connecting the 'capital­ ted States and the Soviet Union," and "does not believe ist' world, and especially the United States, from the that the United States is required to institute a military countries of the Third World." (technological - ed.) program to meet the Soviet chal­ lenge, but should devote resources and attention to prob­ The CPO in its Executive report also denies the exist­ lems raised by Soviet m�litary (economic and technologi­ ence of a Soviet strategic military advantage -in telling cal - ed.) expansion." contradiction with their claims of last year when the or­ There are, however, strong indications that military ganiza tion was first founded - sneakily asserting that Clausewitzians, committed to the defense of the U.S. "the experts disagree as to whether the Soviet Union is national interests, are not going to accept a Trilateral already ahead of the United States in military strength commission "military analysis" which demands the end either overall or in particular theaters." This Rockefel­ to industrial progress. General Keegan closed his recent ler cover-up is designed to justify and prepare a possible speech with a blast against the technological disarma­ "first-strik e-from weakness" attack - a fact tipped off ment and deindustrialization policies being pursued by by the CPO's hysterical statement that "should the Sov­ the otherwise unnamed Trilateral Commission-Carter iets eventually succeed in isolating the United States Administration. Sighting this country's "creative genius, from its allies in the Third World, the United States great wealth, and its unmatched industrial know-how," would be less likely, in a major crisis, to lash out with Keegan rips into the philosophy underlying such policies strategic nuclear weapons, in a desperate attempt to es­ as "an odious and foreign doctrine, ignorant of the tradi­ cape subjugation." tions under which this country was built, and how its for­ Council on Foreign Relations Admiral and CIA ests were cleared, and its industry set up."

Gen. Keegan: U.S. Underestimates Soviet Technology

Th e fo llowing are remarks made by Major General to the national leadership on whether' the Soviets were George J. Keegan, Jr. to a group of newsmen recently, pursuing superiority, whether they could afford to do so, under the auspices of the American Security Council, and or whether they could in fact pursue such superiority. subsequently prin ted in Aviation Week magazine. Now as to the unfortunate question of who is No. 1 and General Keegan 's assessments of Soviet military who is not, and the unfortunate use of the loose language strength are perhaps the most accura te which ha ve been associated with superiority, I think the United States is publicly issued from theU. S. in telligence comm unity. superior in only one major area, and that is in its ability Maj. General Keegan retired as assistant chief of to respond quickly and efficiently to a nuclear initiative staff of U. S. Air Force intelligence on January 1, 1977, by the Soviet Union. And that's where it stops. after a 34-year career in the military. He is currently What the Soviets have evolved today, in my judgment, executive vice-presiden t of the United States Stra tegic is a set of forces structured to a totally different strategic Institute in Wa shington, D. C. philosophy than our own. All U.S. strategic forces, in con­ trast, have been premised on a view that nuclear war was so horrible that it could not be contemplated in any Today I speak as a private citizen expressing my own rational environment and, therefore, for 20 years or so personal views regarding the Soviet threat and the our philosophy has been that we must deter. evolving world power balance. It is very difficult for a Nuclear war must be avoided at all costs. I have no member of the military establishment to serve that quarrel with that strategy except that I am unaware in 20 establishment for better than 30 years, to work in har­ years of a serious-minded scholarly, in-depth attempt to ness with it to weigh what has transpired on his watch determine what it requires to deter. and, upon retirement, render public judgment about the All you have to read is Soviet Marshall V.D. Sokolov­ adequacy of the Establishment's perceptions of our most sky's book MilitaryStrategy, now in its third edition. It's serious national security problems. all there. But when the first edition appeared, high of­ It has been my unbroken experience that the (intel­ ficials of this government - and I know because I was ligence) community has been wrong about assessing there - went to considerable extremes to try to obscure Soviet intentions - granted that that is a very elaborate, the thrust of that book and the thrust of its impact on complex and Byzantine art. The (intelligence) com­ thinking people for fear that it might hurt the evolving munity has consistently been wrong about its judgments American strategy - as conceived under Mr. Mc-

2 MILITARY STHATEGY Namara and others in the Kennedy Administration. And I find that there was a very distinctive change in I'm not going to make any more comments or answer Sovi�t strategy which occurred prior to 1970 in the NATO­ any questions on that allegation, because I don't want to Warsaw Pact area. get into a "names-contest." Rather than bore you with the details, I'll just simply But I was there and it happened. And it goes on to this express my judgment : I think that a Soviet war planner day ....Now what do I believe about relative Soviet fight­ today, in the Warsaw Pact, given the forces, the ing capabilties? In my considered judgment, the Soviet capabilities, the combined arms doctrines ...would have Union today has a capability to initiate, wage, survive every reason for believing that he could take Europe by and emerge from a global conflict with a far greater force of arms, with a minimum of fighting, in 24-36 hours, effectiveness than the United States and its allies. That is with or without the use of nuclear weapons. That's the not to say that if we retaliated in a timely fashion to a posture that they have been placing themselves in. But Soviet initiative, which I don't anticipate, certainly not we have a mind set. We have a diplomacy. We have had a now, there is no question that the Soviet cities would be policy and our estimates have tended to lag along in the burned to the ground. When you here the phrase "they same mental context ... would cease functioning as a viable society," I think that ...1 object to the failure to observe the normal checks is an unstudied recalling of the language of the Mc­ and balances, of letting the public know, letting the Namara era. It is not based on an in-depth examination leaders know, letting the press know and letting the full of the extraordinary changes which have taken place in r�nge of uncertanties be in the open - lest we make the the Soviet Union during the past decade. kind of mistakes that have gotten us into every war this .. . All I can say is that there is no way that you can con­ country has ever been in ... ceivably come to grips with the Soviet Union and under­ Finally, you're aware of something through some stand what is transpiring unless you do it from the Soviet newspaper accounts of the last few weeks that I'm really point of view, and it was to break that unfortunate habit not at liberty to expand upon. But let me lay it out for that Air Force intelligence moved to obtain the original you. The Soviet Union, irrespective of what any scientist Soviet writings, to translate and make them available to in this country tells you, .. .is 20 years ahead of the United the American public. States in its development of a technology which they ...When you estimate today you estimate against a believe will soon neutralize the ballistic missile weapon country that has reached our own industrial stature, that as a threat to the Soviet Union. It is my firm belief that has now reached our level of scientific competence, but they are now testing this technology. For five years the that is thought backward in turning out the quality of intelligence community has said : "No, Keegan, you're hardware. wrong. Our scientists say it isn't possible." Our scientists Now what are the facts? Very simply, the Soviets never really tried. Our scientist haven't done the basic upon there determination that a nation could be made research. It was left to my little organization to under­ survivable undertook the greatest war survival-civil take the most advanced basic research, or sponsor it, . defense program in history. Bear in mind this is a since the development of the A-bomb, to prove to these country that lost half of its cities in World War II, lost people in our community that what the Soviets have been between 20 million and 40 million people killed or woun­ writing about for 15 years they are in fact able to do and ded, and whose leaders destroyed some 20 million to 42 are doing. And I submit that the Soviets, on the basis of million of their own people in a succession of purges. what I have examined, have every expectation that well These are a very tough people. before 1980, if they don't blow themselves up - and they The United States today lacks the firepower, lacks the may - will perceive that they have technically and scien­ accuracy and lacks the yields to overcome the enormous tifically solved the problem of the ballistic missile threat. advantage in terms of neutralizing our retaliatory punch My last word before you throw me out of here is I'd which the Soviets have engineered for themselves at like to caution that we do have great strengths in this great cost. country and that we're not on the edge of the abyss. But Now, on force levels, what concerns me most in the because of the failure in our perceptions, I think that a tactical area has been the continued assertion that we global conflict is now in gestation. Sometime in the future can defend NATO. I won't go into and belabor the psy­ such a conflict is more likely than not to occur. I think the chological points there. I think I have devoted as much Soviets believe that principally because of what they are time as any individual in the government of the United doing. Now we don't have to stand this country on its States to the study of Soviet literature, in the study of head to avert another mindless and needless holocaust. their exercises and in the monitoring of the development We are dedicated to preventing that, but we are not doing and improvement of their Warsaw Pact forces. what we should.

MILITARY STRATEGY 3 Carte'r Seeking Control OfMi litary Intell igence

Like a trapped rat conditioned to tap a 'Watergating The Trilateral Watergating campaign continued its lever' in order to survive, the Trilateral Commission focus on General George Brown, an outspoken opponent Carter Administration is gnawing away at the nation's of the Carter Administration's nuclear confront.ationist intelligence agencies and Armed Forces. This past week, policies and the Schlesinger assault on nuclear energy Carter forces launched a trial balloon call for a "Special and R and D. The Wa shington Post. April 9 carried a Prosecutor ;" a new public slander attack on Chairman letter by Joseph Churba demanding Browns' immediate of the Joint Chiefs of Staff, General George Brown, a de­ resignation. Churba is the same personality who 'leaked' mand for the "halving" of the number of U.S. Generals Brown's 1975 Duke University alleged remarks about the and Admirals ; and the coincident placing of Trilateral influence of Jewish bankers and lobbyists on U.S. foreign agents in selected critical posts including National Intel­ policy. The new call for Brown's resignation by the one­ ligence Estimates, the Law Enforcement Assistance Ad­ time Israeli army officer, who was recently fired from ministration (LEAA) , and the Strategic Air Command his U.S. Air Force intelligence job caps a month of (SAC). hysterical Trilateral slanders against Brown. With their low comedy Watergating rerun campaign. Hamstrung by the military wall of resistance building Carter hopes to clean out the unexpectedly strong resis­ against its policies. the increasingly isolated Trilateral tance in the military and intelligence community to the Administration is targeting the entire U.S. brass. Jimmy Administrations' world deindustrialization program and Carter's mentor - the Morgan-Rothschild linked Ad­ its nuclear confrontationist tactics. miral Hyman Rickover. testified before Samuel Nunns' (D-Ga.) Senate Armed Services Subcommittee last week that 50 percent of U.S. Generals and Admirals should be Scattergun Assault eliminated for reasons of budget-cutting. The Carter Administration placed its call for the establishment of a "Special Prosecutors Office" to Trila teral Penetra tion Agents "investigate past assassinations" in the mouth of Rocke­ Simultaneously the Administration moved to place feller agent Richard Sprague. the discredited and canned reliable agents at key command posts within the military House Assassinations Committee investigator. Sprague and intelligence establishment. For the crucial National resurfaced on the national scene April 12 with fanfare Intelligence Estimates post. for example. Carter named provided by the Eastern Establishment media after Trilateral Commission member Robert Bowie. Bowie's vacationing in Mexico for over a week licking his service for the Rockefellers goes back over 25 years wounds . . Sprague's call signifies that the Carter Ad­ when he served as special advisor to Chase Manhattan ministration's effort to get Congress to do the dirty work banker John J. McCloy when the latter was U.S. High against the Trilateral Commission's enemies under the COfDmissioner for Germany. Since then Bowie has cover of "assassinations investigation" has not gone se�ed as a Director of Policy Planning at the State De­ over and a "Special Prosecutor" must now do the job. partment and run the Center for International Affairs at Such a post if established would serve Carter as a center Harvard University for his Rockefeller sponsor. to throw a dragnet of intimidation over pro-development To help coordinate monetarist terror assaults and pre­ intelligence community. military. and industrialist oppo­ pare domestic police state blueprints. Carter named nents. James Hamilton to head the Justice Department's LEAA The Carter team has no intention. of course. of con­ division. Hamilton from the Kennedy-linked law firm of ducting a serious investigation into the assassination of Hamilton, Feldman and Bress. is experienced in domes­ President John F. Kennedy. As most high level U.S. poli­ tic terror and police-state work having previously served tical circles are aware. Kennedy was killed when a in the Kennedy Justice Department during the heyday of sim ulated assassination attempt against him that he him­ "civil rights" race riots. and Watergating operations self was involved in planning was retargeted by elements against the Teamsters and independent industrially­ within his own Administration into an actual hit. The sim­ based capitalists. ulated assassination scenario was designed to follow a Also this week the Trilateral Administration chose Air planned U.S. assassination of Cuban Premier Fidel Force Lieutenant General Richard H. Ellis to head the Castro and would have covered for this crime by charg­ Strategic Air Command. Ellis was groomed for his as­ ing Cuba and the Soviet Union with a 'retaliatory' assas­ signment at such Rockefeller outposts as the Dickinson sination attempt - setting up a planned thermonuclear School of Law which is not known for its prowess in mili­ war showdown. tary strategic matters.

4 MILITARY STRATEGY COUNTERINTELLIGENCE Biggest NSC Terror Wave Since Kennedy Era

Reports this week from European capitals and well-in­ ialist Party (PSI) parliamentarian Giacomo Mancini. formed sources here in the U.S. indicate that the U.S. Na­ This rash of incidents, gridded below, have noticably tional Security Council (NSC), working particularly received "bare minimum" to absolutely no coverage in through the FBI, has been responsible for coordinating the United States from the major wire services, AP and the recent wave of terrorist incidents and assassinations UPI, and from the prestigious East Coast news outlets, throughout Europe. These bloody incidents, so-called the Wa shington Post and the Ne w York Tim es. "wetworks," have been aimed at individuals represent­ However, these same outlets and others have almost ing agencies and countries who had positioned them­ prominently displayed coverage of terrorist scenarios in selves to clamp down on NSC-directed terrorism and for preparation for the next bout of orchestrated terrorism opposing the Carter Administration's "energy de-indus­ here in the U.S. At present, all indications are that the trialization" policy. April 30 nuclear terrorism "Pearl Harbor" scenario, run The terrorist violence and assassinations throughout under the cover of anti-nuclear "environmentalist" chiefly the European continent has reached a level not gangs, coordinated by the FBI and the Institute for witnessed since the early 1960s when the Kennedy Ad· Policy Studies, (see EIR No. 15) continues to be an NSC ministration carried out its special operations against "live option" for coercing the American population into opponents of U.S. policy. Then, Kennedy's National Secu­ accepting the Carter Administration's energy program. rity Advisor McGeorge Bundy established a special The command structure for this international opera- group to carry out assassinations, mercenary opera­ tion has its center at the NSC level. The NSC Special I tions, and destabilizations against nations. The reader Coordinating Committee is responsible for "coordina- I will recall the attempted assassinations of French Presi­ tion, development, and implementation" of policy dent Charles de Gaulle and Cuban Premier Fidel Castro, "options" decided by the NSC Policy Review Committee and the murders of such leaders as Patrice Lumumba, regarding "crises, covert operations, and cross-cutting Gree,ce's Lambrakis, and Italy's Mattei. In Europe, the issues." Those "options" are then carried out by the FBI MacMillan government in Britain was brought down by and four other intelligence units, in conj unction with ' .. the Profumo scandals, while the Adenauer government Interpol. in West Germany was removed from power in a similar This command structure directly parallels Rand Cor­ setup series of events. poration "surrogate warfare" specialist Brian Jenkins' In response to the most recent terror wave, opposition plan, printed in the March 27 Washington Post, which intelligence agencies in Europe and in the U.S. have calls for NSC control over a "command organization" locked horns with the NSC and its "wetwork" units in which has full interface with special military units to be what now appears to be aU-out inter-agency warfare. used in "Entebbe-style" operations. That command, Most notably, the Swedish SAEPO police circumvented according to Jenkins, would have the capability to super­ NSC-Interpol regulations and arrested 14 terrorists who cede local law enforcement and individual federal were preparing to kidnap a number of former and current agencies. parliamentary leaders in that country. In the U.S., the in­ The other units in the NSC-FBI command structure are ternecine battle has taken the form of agencies opposed the following: to FBI activity launching a counter-terror campaign *,*The Treasury Department's Federal Law En­ which has resulted in the assasinations of some 20 Bu­ forcement Training Center (FLETC) in Glynn County, reau informants within organized crime networks and Ga. Hundreds of new FBI agents have been trained at trade-union circles. FLETC under the directorship of Arthur Brandstetter. The FBI's role in this current flood of bloodletting is Brandstetter in the 1960s coordinated the training of the central to the NSC's operational capabilities, say sour­ South Vietnamese equivalent to the FBI. ces. The Bureau's international operations have been **The Critical Intelligence Section (CIS) within the augmented with FBI operatives now situated inside U.S. CIA. The little-known CIS unit has the additional function embassies, an arrangement described by informed of coordinating NSC takeover operations against other sources as "highly irregular." Through principally this sections of the CIA. network, in tandem with Interpol, the FBI "wetwork" **The State Department's Cabinet Committee for units have been directly responsible for such events over Combatting Terrorism. That Committee is currentiY di­ the past few weeks as the assassination in London of the rected by Ambassador Douglas Heck who last week former premier of North Yemen, the Bonn slaying of issued a provocative statement "predicting" specific ter­ West German Attorney General Siegfried Buback, and rorist incidents in the Middle East. Rand Corporation's the attempted poisoning in southern Italy of Italian Soc- Brian Jenkins is a paid consultant to the Committee.

COUNTERINTELLIGENCE 1 **The Justic,e Department's Interdepartmental Com­ within the Justice Department as the individual who pre­ mittee on Internal Security (lCIS). housed in Justice's vents "leaks." or in the words of one Justice operative. Criminal Division. ICIS deals with "national security "he keeps the lid on" live operations. This 'apparatus. matters. including nuclear terrorism." according to one which includes the recently brought in Interpol unit from Justice Department official. Robert Keusch. assistant the Treasury Department. has been nicknamed "Justice deputy attorney general in charge of ICIS. is known , Intelligence. "

A Chronology Of Terror

•

Th e fo llowing is a chronological grid of terrorist in­ April 9 - New York Tim es columnist C.L. Sulz­ cidents and pre-packaged press coverage on terrorism berger predicted a worldwide offensive by the "General over the w la st two eeks : Revolutionary Command, Armenia" in revenge against ..

Ma rch 30 - Charles Nicoletti. an FBI informant the Turkish government. Sulzberger proclaimed that the working for another executed FBI ' informant Sam terrorist unit would hit several installations including Giancana. was assassinated. those of the Turkish airline, Turk Hava Yollair.

Ma rch 31 - According to the Christian Science The Wa shington Star reported with a banner Monitor, 11 cars belonging to U.S. military and Defense headline that a new study just released by the Department officials stationed in Athens, Greece were congressional Nuclear Proliferation and Safeguard recently firebombed. The incidents occured shortly Panel claims that nuclear terrorism is inevitable and before Turkish and Cypriot negotiators resumed peace that a small terrorist group with minimal technical talks in Vienna on March 3l. proficiency could put together a two kiloton atomic bomb April 1 - Swedish SAEPO police, operating that could "demolish lower New York." The Panel is behind the back of Interpol, broke up a terrorist kid­ chaired by Trilateral Commission member Thomas napping and assassination plot scheduled to take place in Hughes. current President of the Carnegie Endowment that country. Fourteen terrorists from several European for Peace. Another member of the Panel, Theodore and Latin countries, including two West German Baader­ Taylor, is a former atomic weapons designer who helped Meinhof members, were rounded-up. develop the concept of nuclear terrorism while working April 5 - Christian Science Monitor reported that for the Ford Foundation in 1972. the Fresno Bee had resumed running advertisements for The New World Liberation Front (NWLF) planted a mercenary recruitment, i.e., "high risk" work, in Africa. powerful dynamite bomb inside the San Francisco Social

April 6 - Rand Corporation "terrorist response" Security building. The bomb did not detonate and, ac­ expert Brian Jenkins said in an interview that it might be cording to West Coast police officials, contained enough necessary to have a nuclear "Pearl Harbor" terrorist gelatin to destroy the building entirely. incident as a pretext for implementing his plan for a April 10 - The former premier of North Yemen, National Security Council "command organization" to along with his wife and another diplomat, were deal with terrorism. assassinated by an unidentified "Middle Eastern Guido De Martino, the son of Francesco De Martino looking" man. The weapon used was a special .45 calibre (head of the Italian Socialist Party and leading supporter gun equipped with a silencer. British intelligence, ac­ of the Andreotti government) and himself a PSI regional cording to informed sources, see the assassination as a leader, was kidnapped in front of his home. direct threat from the Carter Administration.

April 7 - Reliable sources reported rumors started Several lower Manhattan shopping centers were the by Israeli Interpol are circulating in intelligence net­ targets of FALN-planted incendiary devices. works that international terrorist "Carlos" possesses a April 11 - A Wa shington Post column by NSC­ nuclear capability. leaker Jack Anderson, "U.S. Bracing for More West German Attorney General Siegfried Buback Terrorism," provided a cover story for the various NSC was assassinated along with two others by three units described above by identifying them as separate terrorists on motorcycles. Buback was the 1975-76 "special anti-terrorist units." His article identified a prosecutor of Baader-Meinhof terrorists and had Customs Service "Terrorist Data Base" which pur­ recently announced his intention to expose the coor­ portedly put out "classified bulletins" on potential dination of international terrorism used to put pressure terrorist activities. Among those noted were the FALN, on West Germany and other European nations. Credit for the right-wing anti-Cuban National Liberation Front of the assassination was claimed by the U1rike Meinhof Cuba. the Weatherunderground, the Japanese Red Ar­ Action Committee. my, and the Canadian FLO.

April 8 - The New York Tim es reported that a April 12 - Informed sources reported that two Iraqi recent General Accounting Office report charged that officials in Paris were mysteriously killed. These same the Nuclear Re gulatory Commission has been lax in ,sources reported that two suspicious "suicides" of enforcing strict security measures at nuclear facilities Washington. D.C.-based U.S. intelligence operatives and that these facilities could not withstand an attack by were totally blacked out of the press. a small, armed group. April 13 - Italian Socialist Party parliamentarian

2 COUNTERINTELLIGENCE Giacomo Mancini is poisoned, though not fatally. for several hours, threatening to shoot the occupants.

April 14 - WINS radio reported that a FIAT French press reported that a series of bombings representative in Paris was kidnapped today by the have taken place in that country over the last two weeks. "Committee to Defend Italian Workers." The unit is The bombing targets included the World Library, the demanding that Italian authorities provide food hand­ French-USSR Friendship Association, and the Soviet outs for all unemployed Italian workers. Embassy. The Action Front for the Liberation of Baltic Radio stations reported that two persons of Polish Countries took credit for the bombings. origin occupied the West German embassy in Tel Aviv

Wa ll StreefsCPUSA And FBI Espionage Network Uncovered

The Communist Party of the United States (CPUSA) is ally, happens to be the Daily World correspondent in a top Wall Street intelligence operation functioning as a Moscow, is just one of the many Wall Street and FBI leading conduit for disinformation and slander into the agents in the CPUSA providing such services. Soviet Union and East Bloc countries. It has served The cast of operatives basically divides into two similarly as a nexus for arranging Wall Street special generation. The oldsters, besides Morris, include Victor operation into Western Europe and its Communist Perlo, John Abt, Herbert Aptheker, and Gus Hall, all of Parties. whom have operated as dis information specialists, in Through an apparatus built nearly 40 years ago by varying degrees. The second generation of agents in­ President Franklin Roosevelt, FBI Director J. Edgar cludes Angela Davis, Amadeo Richardson, Mike Hoover, British Intelligence agent Sir William Stephen­ Zagarell, Ron Tyson, and several as yet unnamed son, and later Nelson Rockefeller, this espionage net­ members of the CPUSA's Security Section. The party's work has given lower Manhattan a unique capability - Security Section functions directly under the control of premised upon maintaining a set of false characteri­ the FBI, a special relationship created during the 1930s zations of political forces within the United States. The between Hoover and Roosevelt. CPUSA's job is to ensure that the legions of Wall Street This apparatus is presently involved in many of the are viewed by the Soviet leadership as the "liberal" same assassination and dirty tricks deployments which peace-loving pro-detente types - as opposed to the promote terrorist operations in Europe and the United "right-wing" conservatives who want an arms buildup States. Ron Tyson, along with the CPUSA security ap­ and war. Portrayed in the pages of the Daily World and paratus has personally conducted many of these opera­ through special "courtesy" conduits created during the tions. 1930s, this fairy-tale has provided de facto Rockefeller It is the intersection of this apparatus with the ac­ agent Georgii Arbatov with the means for twisting Soviet tivities of the ICLC that provides the unique basis for ex­ policies against the USSR's actual national interest in a posing this treasonous group of agents, and ending once way unparalleled since the heyday of Bukharin's control and for all one of the most well-protecting networks ever over Soviet policy. to exist. The CPUSA was allowed to exist following its political The character of the network is revealed by the cir­ decimation during the McCarthy period only to act the cumstances surrounding LaRouche's inability to travel part of a "pro-Soviet" organization and participate in in the East Bloc. According to sources within the U.S. domestic counterinsurgency operations to control in­ intelligence community, the State Department, along formation going to the East Bloc about political affairs with the FBI apparatus in the CPUSA, has maintained within the United States. The major conduits of mis­ special "white" and "black" lists of individuals deemed information to the Soviets are Arbatov's USA-Canada acceptable and unacceptable for travel within the East Institute and Herbert Aptheker's American Institute for Bloc. When one of the leading members of the Labor Marxist Studies. Committees goes abroad, a special dispatch is sent out For the past six or seven years, the CPUSA's primary by the State Department to all American embassies, focus of activity has been the International Caucus of from which the activities of the member are carefully Labor Committees and its chairman Lyndon LaRouche. monitored. Concomitantly, the special apparatus, within To prevent the Labor Committee tendency from achiev­ the CPUSA known as Anniversary Tours - a travel ing significant influence with the East Bloc has been a agency which was used as a conduit back in the 1930s top priority for the Wall Street networks involved; even (World Tourist Inc.) - run by Jessica Smith Abt and her the assassination of LaRouche has been actively pursued husband John Abt, who doubles as the CPUSA's General as a means to that end. Counsel - also sends out a special dispatch. The CPUSA's disinformation campaign against the In some instances where these measures are not NCLC began publicly back in October 1 971, when Daily sufficient, "reporters" of the Daily World are sent to Wo rld correspondent George Morris attacked the Labor various Western and Eastern European countries to Committees as police agents. Morris, who, not accident- insure that the proper slander is reintroduced into var-

COUNTERINTELLIGENCE 3 ious channels. (Amadeo Richardson has been utilized in OSS, many of the same agents moved into newly created this capacity.) Usually the slander has surfaced either in positions. Following the war, the State Department and Western European communist party newspapers ; at the United Nations became the centers of Wall Street's times within the East Bloc press itself. What makes the anti-Soviet intelligence operations. slanders operate is that the Arbatov-Brezhnev faction Positions shifted constantly for the "Wall Street within the Soviet leadership implicitly - in the case of Communists." John Abt's initial job from 1933-35, was Arbatov explicitly - supports these slanderous alle­ under Henry Wallace in the Agriculture Department in gations. the Agriculture Adjustment Administration, where he On the broader strategic questions, the CPUSA is still a served as chief litigation counsel. Abt's job was used for necessary instrument of the National Security Council. special deployments into the Soviet Union, focusing on With the Carter Administration trying desperately to the extreme difficulties of Soviet agricultural pro­ maintain a pro-detente facade, the most recent issues of duction. Abt later moved into the Works Progress Ad­ the Daily World have been filled with articles and politi­ ministration and became "special assistant" to the U.S. cal cartoons depicting the present leadership of the Attorney General in 1937-38. Abt then became general . Pentagon, especially Gen. George Brown, and various counsel to one of Roosevelt's top labor enforcers, Sidney conservative politicians as responsible for attempting to Hillman. .. reverse the "winds of detente." Nothing could be further During this entire period, Abt was also a leader in the from the truth and Morgan banking and Brookings In­ CPUSA's underground organization, a section of the stitution agent of the 1930s Victor Perlo knows exactly party responsible for espionage activity. The cover given what he is doing when such articles are written. Perlo to Abt was provided directly through White HO,\1seaide to served on the War Production Board during World War II FDR Lauchlin Currie. Abt's "cell"-work was part of " and has been a National Security Council agent in place what later became known as the Perlo group. Included in since 1954 when he officially joined a shattered CPUSA. this network was Don Wheeler of OSS ; Harry Magdoff, Perlo is presently the head of the CPUSA's economic who later became one of the leading Maoist proponents commission. through the Monthly Review crowd along with Paul It is the purpose of this article to destroy once and for Sweezy; and Harold Glasser. Glasser, now one of the all the Wall Street disinformation center in New York leading liberal lights, spent a year at Brookings Insti­ City, the CPUSA. tution in 1931, then traveled through the Agriculture Department and later was appointed by Nelson Rocke­ Background To "The Arrangement" feller to a wartime mission in Ecuador. Wheeler's Immediately preceding World War II, President brother George, after working with the Allied Military Franklin D. Roosevelt made the decision to create an Government, became a penetration agent into the East official intelligence organization which would be bloc in 1948 and surfaced as an official in the Dubcek responsible for running covert operations. With the government in 1968. Since his ouster from Czechoslovak­ direct help of British Secret Intelligence Service agent ia, Wheeler practices Eurocom�unism at the World William Stephenson, Roosevelt succeeded in getting the Fellowship Institute in New Hampshire. project off the ground by July 1941 under the direction of The most famous member of the Perlo group was Col. William Donovan as Coordinator of Information ; Alger Hiss. Hiss, who was to spend two years in jail for Donovan subsequently became head of OSS. Before the his activities, was actually a top flight Fabian operative project could be carried out, Roosevelt needed the who functioned at some of the highest levels of Wall support and cooperation of the FBI and its chief sleuth J. Street's operations. Hiss served in the State Department Edgar Hoover. By special arrangement in 1938 the FBI throughout most of his career until 1948 when the Dies was given total jurisdiction over all Western Hemisphere congressional Committee with Republican and conserva­ intelligence operations, including Latin America, while tive forces used the hearings into "communist spy" the ONI and Army Intelligence were given the Pacific activity to purge the State Department of New Deal an d Europe respectively. It was during this same period Fabians. But the hysterical climate generated by all that the security apparatus of the CPUSA was taken over factions concerned enabled the Cold War policies of the by the FBI. Previously, Wall Street had operated in the Marshall Plan to be implemented and permitted Rocke­ CPUSA through Morgan and Rockefeller agent Corliss feller to consolidate his political control. Hiss left his car­ Lamont and others from the board rooms of lower Man­ eer as Secretary General of the International Secretariat hattan, but had not maintained a centralized and system­ of the newly formed United Nations to accept a post at atic operation. This Wall Street apparatus was the the Carnegie Endowment where John Foster Dulles was location of many of the alleged Soviet espionage opera­ chairman of the Board. tions within the "New Deal" administration. Running in tandem with the so-called Perlo group was Practically all the agents involved in the House Un­ the Silvermaster cell and a group of CIAA agents operat­ American Activities Committee exposes, from Victor ing directly under the State Department Coordinator of Perlo to Alger Hiss, functioned as part of this well-pro­ Inter-American Affairs, Nelson Rockefeller. Nathan tected apparatus. From 1933-40, most of those involved - Gregory Silvermaster along with Harry Dexter White, John Abt, Victor Perlo" Harry Magdoff, Lee Pressman, Treasury Secretary for Monetary Affairs, formed the the Wheeler brothers, George and Don - served as mem­ core of a group that was protected from any interference bers of New Deal economic agencies or within the Labor by such notables as Secretary of War Patterson, Felix Department. Starting in 1940 and up to 1944, in the State Frankfurter, and Lauchlin Currie. The CIAA group in­ Department Bureau of Economic Warfare and later in cluded Duncan Lee, assistant General Counsel of OSS,

4 COUNTERINTELLIGENCE formerly of Donovan 's law firm ; Maurice Halperin, top Wall Street to ut ilize key penetration operations already OSS-State Department expert on Latin America ; OSS's existing within Western and Eastern European Com­ Carl Marzani, later to be publisher of the Na tional Guard­ munist parties. Part of these networks were tapped for ian. a maoist rag ; and five top CIAA employees, Willard the chaos operation aimed at assassinating Lyndon Park. Robert Miller, Joseph Gregg, Jack Fahy, LaRouche and for the Konstantin George drugging and and Bernard Redmont. Park's brother-in-law Richard kidnapping in 1973. These same networks, built up along Branstem, alias Bruce Minton, was an ed itor of the with the anti-war movement, acted as the slander vehicle CPUSA's Ne w Ma sses. MiIler's wife Jenny Levy was on against the small cadre group of the Labor Committees the New York staff of the Moscow Daily News. It was in Europe during the early 1970s. through this network and other similar operations that Not only is IPS the main vehicle for sympathetic Nelson Rockefeller in coordination with the FBI was able ideology creations, terrorism and "wetwork" to run the assassination of Leon Trotsky under a G PU operations, but co-director Richard Barnet (a member of cover. The evidence being gathered is overwhelming in the Council on Foreign Relations) has been meeting for pointing in that direction. several years with USA-Canada Institute head Georgii The use of alleged "Soviet" espionage networks, Arbatov. Barnet is one of the leading propagandists for besides the Trotsky assassination, became strategically the Carter-Trilateral SALT II negotiating position. important following World War II for the Rockefellers Amadeo Richardson began his agent career in West and their Fabian networks. At one point during the war, Germany. Otherwise known as the pumpkin seed con­ Hoover uncovered a special deal being worked up by OSS nection, Richardson organized the artificial Angela and the NKVD (Soviet military intelligence) whereby Davis defense comm ittees and a slander operation both sides mutually agreed to set up secret missions in against the European Labor Committee in 1973. Through Moscow and Washington D.C. Because this particular the West German CP (DKP) , Richardson and the head of arrangement went beyond the initial agreement between the Marxist Institute in Frankfurt, Steigerwald, con­ Hoover and Roosevelt, and encroached upon Hoover's sistently counterorganized against the ELC. carefully guarded territory, Hoover had the plan killed. In the U.S., Daily World assistant editor and now However, due to Nelson Rockefeller's position as political bureau member Mike Zagerell launched the Coordinator of Inter-American Affairs, he was able to domestic slander machine against the USLP. Un­ surmount the Hoover obstacle and arrange through his confirmed evidence suggests that Zagerell is probably private intelligence network along with certain FBI one of the key FBI special agents operating within the old agents-in-place the basis for running these special network of operatives in the CPUSA. Without a doubt operations. With a major portion of the CPUSA being Zagarell is an outright agent. The only question is directly controlled by the FBI following the war, whether he operates within the special apparatus of the Rockefeller had no difficulty arranging phase II FBI. Tyson, on the other hand. is a self-proclaimed utilization of the CPU SA. "supporter" of the brainwashed police murderer group. the Black Liberation Army. The Institute and Herbert Marc use With practically one out of seven members of the These existing networks of agents and operatives could CPUSA under direct FBI control in 1960, the next take-off not function without the same help that was afforded the point for conducting monetarist espionage activity came "cells" in the Roosevelt Administration. From the State with the creation of the Institute for Policy Studies. Along Department and FBI to the top levels of Wall Street, this with the pre-war Fabian School and OSS-CIA operative network has enabled this treasonous CPUSA operation to Herbert Marcuse, IPS embarked on creating a new exist. It is a fitting irony that even with the fradulent synthetic ideology, black nationalism which would be election of Jimmy Carter, Victor Perlo still finds himself used to spread the CPUSA and Socialist Workers Party. operating withing the CPUSA, in stead of some com­ Angela Davis be came its leading advocate under Mar­ fortable position within Rockefeller's Trilateral Ad­ cuse's personal direction. The Davis operation enabled ministration.

COUNTERINTELLIGENCE 5 EUROPE

Za ire Intervention Also Aimed At Gaullists

ment at the UN that the U.S. could not insure Mobutu's . security; 3) France was "actively participating in the FRANCE construction of Europe," acting as the spearhead of an "independent European policy." Attempts to smear his anti-Carter European colleagues took up the greatest part of the President's French President Giscard d'Estaing's sudden inter­ vention into the internal affairs of Zaire this week was speech. Giscard's masquerade as a Gaullist fooled RPR (Gaul­ decided upon in Washington, D.C., and many people in list Party) Organizational Secretary Guena, RPR France are saying so. But the most anti-Washington poli­ Parliamentary leader Labbe and several others into stat­ tical force in France, the Gaullist "Barons," have not ing that the RPR was backing the President's action in said so, and it is their political demise that is the leading Zaire ! As a Washington, D.C. thinktanker cynically com­ domestic objective of Giscard's action in Africa. If the mented to a journalist, "Isn't it puzzling that of all people Gaullists support - or even merely tolerate - Giscard's the Gaullists would support it? ... They haven't learned ugly games, t e Carter Administration will have suc­ il the lessons of Vietnam." cessfully combined its campaign to create "hot spots" in There is no doubt that the "rotten wing" of the RPR the Third World with a total destabilization of the French represented by such figures as Jacques Foccart, an political situation. expert organizer of coups d'etat on the African continen Specifically, the Carter Administration has created a t and African specialist Journiac, linked to both Foccar potential Waterloo for the anti-Carter Gaullists. Cyrus and new Paris mayor, RPR President Jacques Chirac Vance hopes that, faced with the 'fait accompli' of Zair­ � with his Rothschild entourage, are cooperating with Gis­ ian entanglement, the Gaullist leaders will react on the card to better force the hand of pro-development circles basis their conservative nationalist profiles would indi­ in the Gaullist movement. It goes w�thout saying that if cate, blindly accepting Giscard's tale about "inde­ traditional Gaullist leaders such as Michel Debre go on pendent" French action to safeguard national interests abstaining (though reportedly personally "displeased. ") in Africa. If so, the Barons would be entrapping them­ from the needed condemnation of Giscar 's Africa inter­ selves in an "imperialist" posture. cutting themselves d vention, their movement will lose all political cred­ off from their popular supporters - who would flee at the · ibility as an alternative to the miserable Socialist-Com­ spectacle of leading proteges of Charles DeGaulle be­ munist "Union of the Left." At least the left has not hesi­ coming abject stooges for Atlanticism. France would tated to attack Giscard and call for an immediate Parlia­ quickly be engulfed in the chaos of "right-left" con­ mentary debate. frontation manipulated by the otherwise weak Giscard Giscard's claims notwithstanding, it was obvious to and the u.s. State Department. left spokesmen, including independent left Gaullists that This plan went into effect on Monday, April 11. An the Zairian intervention was act ually planned d ring official statement issued from the Elysee palace an­ talks between U.S. Secretary of State Cyrus Vance� and nounced that, following a decision by President Giscard Giscard about two weeks ago ; in fact, the 'African sit­ d'Estaing. French military cargo planes were engaged in uation' had been officially reported as the main topic of an airlift of Moroccan troops into Zaire. The public. the those talks. Parliament, and apparently even the government of Admiral Antoine Sanguinetti, whom Giscard removed Prime Minister Barre and the French Ambassador to from active military duty in 1973 because of his Gaullist Washington, had been kept in complete ignorance of the attack against Paris subservience to Washington, told planning and execution of the operation. It was an­ NSI S: ' Again coi cidence. After Vance's trip to nounced that the President would explain his decision in � � PariS, Glscard d Estamg launches an operation into a nationally televised address the following day. � : Zaire. This intervention goes beyond the Constitutional As Vance's New York Tim es and other U.S.-press powers of the President of the Republic. France acts on trumpeted over the alleged 'cowardice' of the U.S. and asserts the 'courageous' example set by France, Giscard went behalf of the U.S. at a time when West Germany its independence for the first time in a long time. France on TV to proclaim a number of untruths, each designed to is selling herself cheap to the U. S ... " encourage the hesitant support the Gaullist Barons such The Socialist Party and Communist leaders in Par­ as Couve de Murville initially gave to the intervention. liament also have put the government on trial. The com­ For the edification of Gaullist fantasies. Giscard stated munist-led CGT union federation plans a nationwide that : 1) France made a unilateral decision to send mili­ mobilization of workers against the French interference tary planes in response to a request from friendly in Africa and the danger it poses to world peace. Morocco ; 2) The U.S. was not consulted on the matter Left vs. Right (Giscard even went so far as to highlight his "disagree­ " ment" with U.S. Ambassador Andrew Young's state- The Gaullist movements' attitude towards Giscard's

EUROPE 1 gunboat diplomacy - the support of some, the silence of Organization terrorist involved in anti-Gaullist sub­ others - poisons the national political climate and threa­ version 15 years ago. tens to drag the country into a chaotic and diversionary It is now rumored in Paris that Giscard might soon left-right confrontation, accompanied by mounting choose to invoke Article 16 of the Constitution, which em­ Interpol terrorism, analogous to what is occurring in powers the executive to rule by decree in case of grave Italy. Giscard's team is preparing for precisely thiskind threats to national security. Because of Giscard's unpop­ of scenario, constituting itself as a "crisis management ularity, such a move would cause an uproar, and class staff (involving the military, and French SDEC Intel­ war - type chaos in France's extremely tense social ligence) according to the right wing paper L 'Aurore. The situation, now marked by a multiplicity of on-going Belgian press reports that French officers sent to Zaire metal industries against depression levels of austerity are led by Colonel Franceschini, a former Secret Army and unemployment.

Moscow-Rome Continue Ta lks; Will Italy Solve Debt Problem With The Tra nsfer Rouble?

game." For the first time, L 'Unita raised the question of the transfer ruble as the way to come out of the "IMF 's ITALY monetary games" into a monetary system oriented to­ ward development and peace.

Negotiations between Italy and the Soviet Union for a Financial Reorganization transfer ruble agreement to finance East-West trade, to­ The fact that the Italian government is considering un­ gether with the inevitable economic implications of such dertaking major financial reorganization was hinted an arrangement, are the main topic of heated political again today by L 'Unita and by Italian Treasury Minister debate at the highest levels of Italian government and po­ Gaetano Stammati. PCI Central Committee member litical circles. Cardia, a known supporter of the new world economic or­ Negotiations for the transfer ruble were further ad­ der and a party foreign affairs specialist, revealed gov­ vanced this week with an invitation to Italy extended to a ernment plans to submit a bill to Parliament that will re­ Polish banking delegation by the Banca Commerciale organize the Foreign Trade Ministry so as to create a Italiana - the largest Italian bank outside the central new institution for coordinating all foreign economic ac­ bank itself - and the unscheduled visit to Italy by tivity. Under the direct control of both the government Soviet Deputy Foreign Trade Minister Komarov. This and Parliament, the new institution will act as a medi­ will be followed with a visit to Moscow by Italian Foreign ator for trade with Third World and Soviet bloc countries. Trade Minister Ossola later this month. At the same �ime it will provide a global, coherent ap­ The Polish delegation has been meeting with Italian proach to Italy's trade with these sectors, an operation banking circles who ar� involved in easing the way· for now fragmented into myriad agencies� the tranSfer ruble, such as the large Bank of Sicily. Treasury Minister Stammati's proposal to establish a Komarov's current discussions with Italian offi­ "lira pesante" (heavy lira), put forward yesterday cials - a group that prominently includes Premier would be a key aspect for reorganizing Italy's economy. Giulio Andreotti - is to work out the preliminary ar­ A "heavy lira" by decree would change the pegging of rangements for the transfer ruble, according to well-in­ the lira to the dollar by issuing new currency and giving formed sources. Should the necessary arrangements be it the value that Italian authorities consider the most ap­ worked out, the transfer ruble will be put into an opera­ propriate. Although by itself - depending on the value tional phase by the agreed midsummer target schedule. given to the currency - this could be hyperinflationary, Amid universal recognition by the Italian press that the indications are that the Italians are aiming at clean­ the lriternational Monetary Fund has not one penny to ing out their books for the transfer ruble and that they b grant even the miserable $530 million loan it has pro­ probably will declare a de facto debt moratorium y up­ mised to Italy, the Italian Communist Party paper, valuing the lira. As Stammati emphasized, the problem L 'Unita , has been conducting a campaign on behalf of the is not a technical one, but one of political will. Interest­ transfer ruble and for the reorganization of the foreign ingly enough, the Italian daily La Stampa compared the trade ministry. measure with one taken by General de Gaulle in 1958. At L'Unita featured an article April 11 attacking the the time de Gaulle established a "heavy franc" in order IMF's system of refinancing by imposing levies on allied to stabilize France's economic development and put the countries - "allies unwilling any longer to play that country's destroyed economy on its feet again.

2 EUROPE West German Organizing For MBFR Settlement Reemerges

accord, including East-West economic cooperation and energy co-development. WEST GERMANY Wa rsa w Pa ct No Threa t In his Die Welt article. Pawelcyk directly attacked "those who obj ect" to an MBFR conclusion on the Leading West German political figures are again pretended grounds that Soviet military superiority is organizing publicly for a Western European disar­ endangering the West ; the MBFR concept of "equal" mament accord with the Soviet Union under auspices of troop reductions by both sides would leave conventional the Vienna Mutual and Balanced Force Reduction talks Soviet war-fighting capacities intact. the argument runs. (MBFR) - independent of the United States. Pawelcyk exposes the objection: "Talk of 'Warsaw On April 13, Juergen Pawelcyk , a prominent Social Pact superiority' is aimed at creating a psychosis of fear. Democratic member of the Federal Parliamentary to manipulate government policy into spending more Defense Committee, ·wrote an article for the con­ funds for weapons, funds which will be taken out of servative daily Die Welt declaring that "an initial MBFR essential areas of social life." He emphasizes: "There is result is poss ible ... we are at a political crossroads." no threat at present to the West from the Warsaw Pact." Similarly the April 9 Fra nkfurter Allgemeine Zeitung Pawelcyk 's argument is directed primarily at West said in a commentary that Social Democratic German Foreign Minister Genscher, whose recent public Parli�mentary fraction leader Herbert Wehner - the statements have asserted that West Germany has no most outspoken supporter of an MBFR agreement - is intention of negotiating an MBFR settlement without energetically organizing within the Social Democracy U.S. acquiescence. Genscher. a firm ally of the Carter for this policy, and expects to force a confrontation on Administration in Bonn, also insists that "equal" troop this issue within the Federal cabinet. reductions would never be tolerated by the United States. This open discussion of the need for European disar­ The Fra nkfurter Allgemeine Zeitung commentary mament agreement has reappeared in West Germany indicates that Herbert Wehner is on a confrontation after approximately a month of silence on the question. course with Genscher. Wehner's strategy is to generate By no accident, it reappears at the very same time that enthusiastic backing for independent MBFR negotiations West Germany, Britain, and numerous other countries within the SPD party machine. arguing that this will be a have been forced to face up to the hideous reality of the major political victory for the governemnt. "Wehner's Carter Administration's zero-growth energy program, recommendations could interest the SPD delegates," the Carter's plutonium ban and other forthcoming horrors Allgemeine notes, "who are looking for a release from a which constitute a dire immediate threat to the series of government failures" on social policy problems. European economy. This European consensus on the Should Wehner convince the SPD that "the path to a energy issue is now the main force driving them to solution to domestic problems leads to Vienna," then this Vienna. Thus, while Washington attempts to bluff and will generate a crisis in Genscher's Free Democratic lure the Soviet Union into a SALT agreement on the basis Party. which is in a federal coalition with the SPD. "For of an inequitable "numbers game" confined to weapons Genscher, the danger would emerge ...of having to push a systems. West Germany is leading the Europeans in policy which he considers false. . or face the con- putting out feelers to Moscow on a broad and basic peace sequences" - resign.

Rockefeller's Nazi Networks In Greece

NATO ; to grant overflight privileges to U.S. military air­ craft operating in the Mediterranean region and the Mid­ SPECIAL REPORT dle East; and to accept a "final" U.S. solution of the Cy­ prus dispute, partitioning the island and installing NATO bases there. Karamanlis has resisted on all of these points, and has Since the advent of the Carter Administration, fascist­ sought European, Arab and to a lesser extent East bloc terrorist gangs inside Greece·have been increasingly ac­ support to strengthen his negotiating position. He has tivated in etforts to bring down the Karamanlis govern­ been aided by successful efforts to relax tensions be­ ment. Karamanlis is being openly pressured by the U.S. tween Greece and Turkey, tensions which have always State Department to fully reintegrate Greece into been manipulated by the U.S. to shape Greek and Turk-

EUROPE 3 ish policy and to overthrow governments when deemed ruary that the Nazis were being used to overthrow the expedient. Karamanlis government. Another major factor was the Cyrus Vance. who was exposed in 1969 as the se offi­ support Karamanlis has received from Britain's Prime cer who handled NATO's "Operation Promethe�us" coup Minister Callaghan (and probably Italy's Andreotti gov­ in Greece for the colonels has therefore put into motion ernment as well) which allowed him to begin a partial the extensive, well-organized Nazi underground. crackdown against the Nazi groups in February. Although Greece's fascist groups, despite their interna­ However the potential for destabilizations still exists tional connections and funding, do not have the power to until the Nazi networks in Greece are completely dis­ overthrow Karamanlis with a putsch on their own, they mantled. are the key element in a "left-right" destabilization sce­ nario for Greece. Nazis Mobilized Personally involved in running this scenario for the On Jan. 17 former Junta Minister Totomis appeared on Carter Administration are former U.S. Vice-President a Greek language program on New York television three Nelson Rockefeller and West Germany's neo-Nazi chair­ days before Carter inauguration. praising the Junta and man of the Christian Social Union, Franz Josef Strauss. , attacking Karamanlis, calling him "the Greek Keren­ Since the end of the Second World War, the fascists sky" and denouncing his "socialist economic policies." have been intermeshed with Greek military security, po­ Totomis also attacked MP Tsouderou, and charged Ru­ lice security, the Royal Household, and pro-Rockefeller mania with infiltrating Greece under the pretext of pro­ political circles. A commitment by Karamanlis to dis­ specting for oil. Latest reports from Greece point to the mantle this network would immediately put him into con­ fact that the allied forces of Royalists like Theotokis, Sta­ frontation witb the powerful pro-American political-mili­ fenopoulos Garoufallias ex-army officers, and members tary infrastructure upon which U.S. domination rests. of the Strauss-connected Christian Democratic Party Predicting that Karamanlis would not so move, Vance XRIKE are touring the country campaigning for the re­ and company are banking on the hope that his inaction lease of the Junta operatives still in jail, and spreading will unleash a wave of left-wing protests and mobiliza­ fierce anti-Communist propaganda. This open provoca­ tions similar to the pre-coup period of 1965-67. tion has to be attributed to the legislation adopted by the To this end, Rockefeller's private intelligence agencies government designed to frustrate the Royalist plans for a have been heavily investing in the creation of a synthetic full return to the political life through the fo rmation of a "left" that could play this provocateur role. All such Royalist party. Sources say that this campaign is finan­ countergangs were created in exile after the 1967 coup cially and otherwise supported by London and Bonn. primarily through Institute for Policy Studies (IPS) net­ Plans for the current activation of Die Spinne interna� works operating in Western Europe. The Maoist-anar­ tional terrorist networks were laid at a January 30, 1977 chist movement EKKE originated in West Berlin as an meeting in Paris. That meeting brought together such offshoot of Baader-Meinhof countercultural groups. men as Marcello Sada of the Chase Manhattan-domina­ Eleftherotypia. the daily newspaper which speaks for the ted Monterrey financial group in Mexico, actively in­ ' "new left," is an IPS front group with links to the volved in the deployment of the 23rd of September and Baader-Meinhof group. the Eurocommunists and the other fascist gangs ; CIA station chief McKay from Mi­ CIA-Willy Brandt faction of the European Social Demo­ ami, Florida. one of the main command and logistics cen­ cracy. One of their journalists. G. Votsis. who advocates ters for anti-Castro Cuban terrorism ; CIA station chief terrorism and backs such actions by the Baader-Mein­ ,Johnson from Baden-Baden, West Germany, a major hof. was exposed during the days of the Junta as an intel­ training center for Die S.pinne terrorists dating back to ligence operative with connections to the Royal House­ the CIA's creation of the "Gehlen Organization" for Cold hold. Eleftherotypia is also closely connected with a War paramilitary operations in Eastern Europe ; and Greek version of "Counterspy" ( an IPS disinformation Phil Ford, CIA station chief from Paris. Immediately service) called "Anti" which is also under the control of after the meeting a wave of terrorism was unleashed IPS. The other side of the synthetic left is the Eurocom­ against Rockefeller opponents in Spain, Italy, Greece munist KKE (interior) . which is controlled by the CIA's and France coordinated jointly by Interpol, the coun­ Carril\o-Amendola axis within the European Communist tries' respective Interior Ministers, and Wall Street parties. linked CIA factions. The Rockefeller-controlled "left." however. has failed Two of the Rockefellers' top Die Spmne controllers, to gain any mass base or credibility. Its most striking de­ William F. Buckley and Lt. Gen. Vernon Walters, tra­ feat came last month when the coalition slate of "new­ veled to Spain where they could secretly meet with the leftist" candidates in the student elections was over­ participants at the Paris meeting and provide final whelmingly defeated by the Greek Communist Party. marching orders. Vernon Walters, the former Deputy Such results have prevented them from rallying students CIA Director under Richard Helms and now in charge of and others to protest the government's failure to fully Mediterranean CIA operations, is one of a handful of prosecute fascist terrorists. Recently "Anti" and quasi-military intelligence operatives who have made "Eleftherotypia" have conduited a steady stream of ex­ their careers as Rockefeller agents. It was Walters who pose material supplied by U.S. agencies on right-wing coordinated the destabilization of Chile, where old Nazi terrorist groups. charging the government with being the networks were mobilized for the "Truckers' Strike," etc. terrorists' "protector." to pull down Allende's government. William Buckley and This ploy has failed in part because both Papandreou his family, who have made a small fortune as camp fol­ and the KKE have informed the Greek public since Feb- lowers of Standard Oil operations, are deeply involved in

4 EUROPE Rockefeller's Die Spinne operations, particularly in Ibe­ leaders as Elio Massagrante and the Rockefeller-allied ria, where F.Reid Buckley resides, and in Latin Ameri­ head of Italy's Interior Ministry, Francesco Cossiga. ca, where William Buckley worked under E. Howard Despite this expose and the forced redeployment of NOE Hunt to set up CIA operations shortly after the agency's headquarters to Spain and Greece, Ordine Nuovo creation, redeploying tens of thousands of Nazi war cri­ elements are still active in Italy, where they attempted minals, the basis for current Die Spinne terrorism. the assassination of Italian Prime Minister Andreotti on Others involved particularly in the Greek side of Die the heels of the Paris meeting of Die Spinne contr_ollers. _ Spinne operations are American Ambassador Kubisch, Since then, both the Italian government and the Suarez wttohas previously served in such Nazi "safe havens" as government in Spain have launched a major crackdown Brazil and Bolivia ; the head of the U.S. Military Mission, on the NOE network. With the strong support of Italian William Berg; and Phil Scott (a.k.a. "Steve" and pro-development forces, Spanish police arrested 18 "Jackal"), who under Embassy cover serves as coordi­ fascist terrorists last month and four Italian "in­ nator of the "Palladin" group which combines both Die structors" responsible for a wave of bombings and Spinne and Institute for Policy Studies "right and left" kidnappings. Included in this group was Ordine Nuovo terrorist organizations. leader Elio Massagrante, who coordinated activities in It was shortly after a visit by Buckley and Walters Spain, Italy and Greece. announced in Rizospastis some months ago that the Pal­ The Movement of August 4, now active in Greece, is - ladin and New Order networks were first activated. In also affiliated with the NOE. The group was officially mid-December, the Junta's notorious torturer, Mr. Mal­ founded by sociology student Kostas Plevris in 1960. lios, former head of the Athens General Police Security Plevris was given his first recruits and funds through the Division and liaison to the National Military Police Interpol-controlled Police Security department. The (ESA), was assassinated. During Mallios' funeral the manner in which August 4th, like the NOE, was used was neo-Nazi groups "August 4th Movement" and New Order modeled on the early 1930s experiences of Interpol. went on a rampage, assaulting members of the KKE, During that time Interpol was put under Nazi control, bombing KKE bookstores and cars. Once journalists and established control over the political-security de­ stripped the cover off the previously unheard of group partments of European police forces. Throuith those which claimed credit for the assassination, the "Novem­ departments it organized extra-legal terror units for ber 17th -Movement," it was found that Kaletzis, the mur­ assassinations, riots and so forth. The creation of August derous head of New Order, was actually responsible. 4 in 1960 was the cutting edge of a destabilization catn­ Ample evidence also pointed to the involvement of paign being carried out at the time by the Greek Palace Scott's Palladin group in the Mallios affair. Palladin was and the U.S. Originally it was used in conjunction with earlier the subj ect of a combined KGB-CIA investigation the security police as a terror weapon against the into the murder of Mideast Regional CIA chief, Richard Communists and Papandreou in the 1961 elections ; Welch. Following the Mallios operation, Palladin was however by 1964 August 4th gangs became the vehicle for also linked to the assassination of Gaullist Deputy the forced resignation of Karamanlis, who was fiercely De Broglie in France, where a branch of the organization resisting the U.S. on the question of Cyprus, and was also is tied into both the IPS-linked Liberation newspaper displaying Gaullist sympathies. August 4th gangsters group and remnants of the Secret Army Organization were deployed by the Royal Household through the super­ (OAS)' vision of the security police to assasinate G. Lambrakis (an MP of the United Democratic Left) and In ternational Connections after the deed was done Karamanlis was publicly ac­ New Order in Greece is part of the Nouvel Ordre cused and linked to the murderers, thus forcing his exit European (NOE) Nazi International which was founded from Greece. in 1958 to create a second-generation Die Spinne terrorist It was later revealed that only two months before the capability. The founders of NOE were members of the Lambrakis assassination, two top personalities of Black Malmo International, a post-World War II Anglo­ International terrorism arrived in Athens. The first was American intelligence operation that combined such CIA agent "Sherman Miller" who functioned as a con­ agents - as Sir Oswald Mosley, Otto Skorzeny, etc. troller of numerous fascist organizations in the Branches of the NOE were established in Greece, Spain, Mediterranean area. He was accompanied by SS major Italy, and France. In Italy the NOE, known as Ordine Ziegfried Zogelman, better known as the "Butcher of Nuovo, worked closely with Atlanticist factions of the Prague," who worked under Skorzeny for Die Spinne. Movimiento Sociale Italiano ; in France it was inter­ Miller was also in Greece in 1960-61 helping to put meshed with the Secret Army Organization, the para­ together the wave of terror that made the elections of 1961 military fascist organization created by the CIA and go down in Greek history as "the elections of fraud and Vichyite military layers to counter De Gaulle. violence." Zogelman and Miller also helped found the In 1974, the NOE shifted its principal operations from fascist, police-controlled student movement EKOF, the Italy to both Spain and Greece. It had been driven out of same year that Ordine Nuovo was created in Italy out of Italy following an aborted military coup, organized by the same networks. Italian intelligence (the SID), which was to have in­ The most prominent patron and controller of the Greek cluded the assassination of Italian President Leone, the Die Spinne apparatus is Franz Josef Strauss. During the Prime Minister, members of the Cabinet and anti­ Junta years Strauss travelled to Greece several times to Atlanticist military leaders. Italian newspapers fully give the colonels international support. Strauss was a . documented the connections between such Ordine Nuovo close collaborator of Makarezos (one of the main

EUROPE 5 characters behind the coup), and made his newspaper announced to the press "Karamanlis's days are few !" the Ba varian Post the Junta's mouthpiece in Europe. Then. on New Year's Eve, Totomis went to Germany for After the downfall of the Junta in 1974, Strauss was sent a meeting with Strauss where funding conduits were set into Greece to prevent Karamanlis from purging the up and an agreement reached for training Greek fascists military-police apparatus of its Die Spinne infra­ in paramilitary acts at the Hans-Seidel Institute. \ structure. While Karamanlis was under intense pressure Evlambios toured U.S. cities the same week calling for from the left to carry out this purge, and was in the the overthrow of Karamanlis. On Jan. 17 Totomis ap­ process of trying Junta chief Papadopoulos, Strauss peared on New York TV. Immediately after his meeting came to Athens and delivered a personal warning to with Strauss, Totomis paid a short visit to Teheran, Karamanlis. where he received financial backing (supposedly from In March 1976, at the point where the groundwork was the Shah of Iran, who is reported to be a staunch ally of being laid for terrorist activation, Strauss arrived in the Greek Royal Household, though it cannot be excluded Greece and formed a new fascist party called the "Greek that Totomis simply received laundered CIA funds with­ Christian Democratic Party" (XRIKE), whose leader­ out any commitment from the Shah.) ship is made up of notorious Nazi collaborators and Junta At present XRIKE is working hand in glove with henchmen such as Matheou, Gouras, and Manolopoulos. Royalist agents such as Garoufalias. and ex-Junta of­ This new group was created to provide a political cover ficers and police officials around a campaign for th� ' for the terrorism which was to follow. Strauss arranged overthrow of Karamanlis, and the release of imprisoned that another meeting be held in Nurem burg for the purpose Junta leaders. This campaign which is merely the of making XRiKE's political presence felt in the political window dressing "legal" cover for the terrorist rampage arena, and to fqrmally announce an alliance with other is funded through Strauss and the Royal Household. Black International parties operating in the Karamanlis has responded by declaring illegal the Mediterranean zone. Duringthe conference in Nuremburg creation of any political formation which advocates the where Greeks, Spaniards, Portuguese, and Italian neo­ return of the Monarchy. fascists participated, it was decided that the recruitment of membership should come from the Royalists, from karamanlis ' Counterattack disaffected members of Karamanlis's party who Besides the crackdowns and the attempt . to flush out believed that "Karamanlis had turned to the Center," the agents in the security police apparatus, the and from members of the police-security "invisible Karamanlis government has approved legislation which government." Fotis Gouras, who was appointed to head declares that may attempt by the royalIsts to form a up XRIKE, is a member of Strauss's CSU party and was party is "illegal and unconstitutional." a university student for many years in West Germany. This week the Greek Foreign Ministry simulianeously announced a Karamanlis tour in five European countries Rockefeller Support for Karamanlis ' Overthrow at the end of April, including a meeting in Britain with Latest reports reveal the Carter Administration's role Prime Minister Callaghan. This meeting is specifically in this affair. On Jan. 20, the Greek CP newspaper designed to get the Europeans more involved in the Rizospastis reported that on Christmas eve a meeting settlement of the Cyprus conflict and thus keep Clifford's between the ex-Junta Interior Minister Totomis and "mediating" assignments from Carter out of the negotia­ Nelson Rockefeller in Virginia took place. Also present at tions. that meeting was ex-Junta Minister Evlambios. High­ In addition Karamanlis has been the main promoter level consultations and meetings between other ex-Junta and advocate of a unified Balkan peninsula and has been officials and Washington State Department figures were pushing for the reconvening of the Second Balkan Confer­ also publicized in the Greek press as being part of a plan ence to secure peace and cooperation among the coun­ to topple the Karamanlis government. After Totomis' tries of the peninsula including Turkey. meeting with Nelson Rockefeller. the former minister -Chrissa Axios

6 EUROPE MIDDLE EA ST Warhawk Peres Consolidates Victory Over Humiliated Rabin

Defense Minister Shimon Peres is quickly con­ the Israeli armed forces for a strike against Lebanon and solidating power in Israel after the bloodless coup d'etat the Arabs generally, has been humiliated since his resig­ April 7 that forced the resignation of moderate Prime nation. Minister Yitzhak Rabin. According to sources in Because Rabin is heading an interim government in Jerusalem, Rabin - who had been putting up a preparation for elections, he cannot legally resign. rearguard battle against Peres until yesterday - now Initially, Rabin had sought a "leave of absence" until plans to take a "vacation" next week and will designate May 17, but the Attorney General ruled agahlst such a Peres to handle state affairs in the pre-election interim move, and Rabin decided to stay on as caretaker prime period until May 17. The Rabin decision, following his minister until May 17. The Jerusalein Post reported resignation as the Labour Party's candidate for the April 13 that perhaps Rabin had begun to regret his elections, gives Peres nearly complete control over decision to resign, and was seeking to build a base in the decision-making by Israel. party from which to challenge Peres at a later date. The Peres coup, which was backed by nearly the entire But the pro-Peres-Dayan press geared up for attacks Israeli right, especially the military clique headed by on Rabin. The "liberal" daily Haaretz, a Dayan mouth­ former Defense Minister Moshe Dayan, dramatically piece, called it "a strange and repelling sight" for a heightens the danger of a lightening Israeli strike into prime minister accused of a crime to remain in power, southern Lebanon, creating an instant Arab-Israeli and the extremist Yediot Aharonot editorialized that the crisis. According to the Christian Science Monitor, Peres "law is absurd" in forbidding Rabin to resign. According said yesterday that he can "foresee the introduction of to the New York Daily News, Peres was "irritated" that missiles with nuclear warheads into the Middle East." Rabin accepted the decision to stay in office, and was A survey of Middle East observers in Washington said to feel that Rabin "could, if he wished, overcome the elicited a near-unanimous consensus that, possibly legal difficulties" and get out. within days or weeks, Israel will launch a preemptive On Sunday, April 10, Peres had been nominated to invasion of Lebanon to counter a Palestinian buildup and succeed Rabin as the Labour Party's candidate for to defend the fascist militia of Lebanese extremist prime minister, and the Peres forces were anxious to Camille Chamoun. In the first official policy statement take power even before the election. since the Peres takeover, Foreign Minister Yigal Allon Thus, in a total capitulation to pressure, Rabin said said bluntly April 12 that Israel "would not permit the yesterday that he was removing himself from active I massacre of Christians" in Lebanon, and would if service to the country. necessary come to the aid of the besieged Chamoun Making the Peres victory total was the April 11 forces. The Allon statement, said the Wa shington Post, decision by Mapam, the leftist coalition partner of the "went beyond previous statements" by Israeli leaders in Mapai in the Alignment, to support the decis.on to "defining Israel's responsibility for its allies in southern nominate Peres. Previously, Mapam had threatened to Lebanon." withdraw from the Alignment if Peres were nominated, Observers agree. An official at the State Department but collapsed after a meeting between Peres and the predicted an Israeli move into Lebanon in the near Mapam leadership, voting instead to stay inside the future, and a former member of the Israeli Parliament Alignment. A leader of Mapam's left wing said bitterly (Knesset) said that, according to his information, the after the vote for warhawk Peres, "We have lost our self­ Israeli military was planning to attack Lebanon between respect." now and the May 17 election, in part to bolster the image of the faltering Labour Party among the war-fevered "No Room For Hawks " electorate. The Arabs have so far been restrained in their reaction Joseph Churba, the former director of intelligence for to the stunning Peres coup, which has nevertheless upset the U.S. Air Force Middle East division, gloated in an the entire strategy of the Arabs in seeking a peaceful interview that the Peres takeover "restored the military settlement of the conflict with Israel. Rabin, until the deterrent" in the Middle East and would serve to keep coup, had tacitly accepted the Arab offers and was the Arabs in line, Churba praised Peres as "a far more working behind the scenes with such leaders as Egypt's hawkish man" who would not tolerate a change in the President Anwar Sadat. status quo in southern Lebanon. Although Sadat, terrified to admit to his military commanders that Peres' coup is a disaster for the Arabs, Rabin Humilia ted has said that there is no real difference between Rabin Rabin, who had been publicly resisting calls within and Peres, Egypt's Ambassador to the U.S. Ashraf

MIDDLE EAST 1 Ghorbal was more honest. "There is no room for hawks precedent for the coming IMF showdown with Egypt , in the Middle East," Ghorbal told a Chicago audience early next month in Paris. this week, commenting on the Peres victory. In addition. Egypt has proposed the formation of an Other Arabs have warned openly of the possibility of Arab-Comecon Bank to promote Arab-Soviet trade, war, especially Syria, whose press now daily predicts the according to the French daily Les Echos. An official of outbreak of a new conflict in the region. the Moscow Narodny Bank indicated that Egypt would For the Arabs the key Question is whether oil-rich be on line for trade in transfer rubles in the immediate states like Saudi Arabia can combine with Egypt and future, depending on other factors - obviously a change Syria to forge an Arab initiative that can destroy the in Egypt's current anti-communist stance under Sadat. A source of the Israeli danger: the New York banks. One possible opening in that direction was the statement by sign of that emerged this week with the report that Saudi Abdel Moneim Kaissouny, Egypt's economics czar, that Arabia and Kuwait have granted a seven-year debt Cairo wished to invite greater Soviet involvement in moratorium to Egypt, which may set an unstoppable Egyptian development.

" How Rabin Was Dumped : The Rea l Crime In Israe li Politics

Yitzhak Rabin was not shunted aside as the ruling Israeli crisis - necessary for the new world economic Israeli Labour Party's candidate for the May 17 elections order, and anathema to Brzezinski, the Rockefellers, and because of a petty act of financial corruption. His the Trilateral Commission. decision last week to resign as the Israeli Labour Party's The Watergate operation to rid Israeli politics of candidate made him the latest Israeli victim in a months­ moderate leaders and wreck the Labour Party machine long conspiracy to destroy the constituency-based involved a number of scandals produced and packaged machine of the Labour Party and to bring to power a by Brzezinski and his colleagues and unleashed against military, pro-war coalition. The conspiracy, totally top Labour Party leaders. In addition, manipulated, blacked out of the U.S. press, is run jointly by Zbigniew anarchic labor strikes were used to try to drive a wedge Brzezinski and the National Security Council here and by between the historical alliance of Israel's Labour Party the militarist faction in Israel around former Defense and the national labor confederation, Histadrut. Minister Moshe Dayan. The Watergate-style series of To carry out the destabilizations, the Trilateral destabilzations went into high gear just as Jimmy Carter Commission sent its leaders to visit the Holy Land. was elected to the U.S. presidency. In Rabin's case, the Nelson and David Rockefeller, Brzezinski, and a host of setup involved a leak to the Israeli press about a family members of the warmongering Committee on the bank account in the U.S., a "leak" that turned what is a Present Danger have been to Israel in the past six "normal" hidden bank account for a high-ranking Israeli months. During the same period, Dayan, Defense politician into a scandal that toppled the government. Minister Shimon Peres, and other fanatic Israeli mili­ Rabin, the leading Israeli pro-peace moderate, has tarists have held meetings in the U.S. with President refused to expose the operation against him, and now the Carter, Brzezinski, and U.S. energy czar James R. conspirators are proceeding uni mpeded with their war Schlesinger. scenario. With Rabin out of the way and the Labour A series of top-level leaks were systematically fed so­ Party forced into disarray, an Israeli ruling coalition of called investigative journalists from the newspapers rightist ex-generals and intelligence chiefs will organize Ha 'aretz, Ma 'ariv, and Hoa lam Hazeh, while the chief the Israeli population around a program of undiluted organizational link between Dayan, the National nationalism and bellicose isolationism. According to Security Council, and the U.S. Jewish Lobby - the plan, this type of government can wield a "nuclear op­ American-Israel Public Affairs Committee (AIPAC) - tion" and pre-emptive war against the neighboring Arab has run a covert, but systematic campaign to undermine states and .thus set up a test thermonuclear brinkman­ the credibility of Rabin and old-line Labour Party ship crisis with the Soviet Union. leaders and to bolster the images of former generals Ariel Sharon and Yigal Yadin, the fascist Israeli candi­ Rabin's Vulnerability dates for the premiership. Rabin, closely connected to anti-Carter conservatives in the United States, is regarded as a moderate on The NSC - Dayan Pa rtnership foreign policy issues by leading Western European Less than two weeks after the election that put Carter leaders, and is at the center of a circle of dovish Zionist in the White House, Moshe Dayan trumpeted his joy at machine politicians in Israel. He has also been an open the anticipated happy relationship between his circle of opponent of Israeli pre-emptive strike preparations. In warhawks and the Trilateral Commission. From Paris, all, Rabin possessed all the necessary Qualifications to Dayan beamed to repor,ters, "The victory of Carter is a rally Israel's population behind a pro-peace platform. If great satisfaction for us ...Carter is ready to resist the he had remained in power, Rabin clearly had the Soviets and the Arab blackmail. That can only make us potential to encourage a process of peace for the Arab- happy." The warhawk told France's Quotidien de Paris,

2 MIDDLE EAST "I am extremely happy about the election of Carter. We This transformation could not take place, Davis con­ must not give back the West Bank nor the Gaza region. tinued, "as long as the labor unions support Labour." We must be prepared to face the tragedy of the use of Davis then reported hopefully that a series of anarchic nuclear capacity." wildcat strikes had begun to undermine this relationship While Dayan outlined the new strategic overview for and to work to the advantage of Yadin. "One has to his nest of Israeli conspirators, Generals Sharon and wonder in this situation how the Labour Party can defend Yadin, Defense Minister Peres and others simul­ itself; it's factionalized; there is great dissatisfaction taneously began to splinter Israel's traditional party with Rabin. I am writing an article that will lay out the theoretical basis for the necessary transformation in system and to create an environment of chaos that would block the capability of the Rabin government to act on a Israel," Davis concluded. Brzezinski himself did the most important prepar­ peace platform. In mid- November, Sharon split from ations for removing the Israeli old guard. Although he is the right-wing Likud Party and formed his own party, a known not to travel extensively, the then-director of the move that was heralded by Dayan. Sharon, a cotton Trilateral Commission made two visits to Israel prior to farmer by profession, bellowed that Israel needed a November. Brzezinski was followed by another top "government of technocrats" - words cribbed from the national security advisor to Carter, Harvard University . published works of Brzezinski. Professor Samuel Huntington, the author of a Trilateral "We must be prepa red to face Commission paper on the "ungovernability of demo­ cracies." the tragedy of the use of nuclear During this period, the U.S. side sent out orders for capacity. ' , Israel to play the nuclear fortress role propounded by Dayan in Paris. While in Israel Brzezinski stayed twice at the house of Menachem Begin, the ultra-rightist head Days later, Yadin announced the formation of a of the Likud Party. Reportedly Brzezinski told the for­ "Democratic Movement for Change," an archetypal mer anti-British terrorist (Begin masterminded the counterinsurgent civic reform with which he intended to bombing of the King David Hotel) "not to take the Arabs organize what he termed Israel's "discontented" seriously" and that Israel must be the bulwark for population into a mass proto-fascist movement around Quality-of-Iife issues. The first splitoffs from the Labour stopping Arab radicalism and Soviet influence. Party to join Yadin's movement were a circle of hawks J ames Schlesinger issued the "breakaway ally" close to Peres who welcomed signs that Yadin was challenge to Israel from Washington in November. Israel as presently constituted, he said, is "unable to dare to becoming more hawkish in his foreign policy ideas. In early December a source in London close to Dayan disobey the political directives coming from Washing­ welcomed the birth of what he called a "Dayan-Yadin ton." Alliance" and reported that Dayan was out to "topple Rabin." Rabin Countera ttacks Also in mid-November, the Independent Liberal Party, The handwriting was on the wall for Rabin. The most a minor party coalition partner of the Labour Party immediate danger was a burgeoning kickback scandal whose leaders had met with Brzezinski just days before, involving a close Rabin associate, Asher Yadlin, head of announced that they were pulling out from the govern­ the powerful Sick Fund of the Uistadrut Labor con­ ment. federation. Yadlin was being most vigorously pursued by At the same time, Defense Minister Peres announced a Hoalam Ha zeh "investigative reporter" Yigal Laviv. trip to the U.S. which one staffer from the AIPAC said while Ha 'aretz and Ma 'ariv were openly expecting the frankly was to "meet all the Carter people" and "pull scandal to spread throughout the center Labour Party the plug on Rabin." leadership. Attorney General Aharon Barak swore that AIPAC, whose connections to the Trilateral Carter all offenders like Yadlin would be prosecuted. team were very tight - a top AIPAC staffer had left the On December 21. Rabin counter-attacked. Pre­ group to become Carter's Western regional campaign empting a Knesset (Israeli Parliament) no-confidence director in October - made no bones about its role in motion against him, Rabin resigned, collapsing the organizing Brzezinski's operation against the Rabin-led government and forcing early elections. The entire Labour Party. "Rabin's leadership breeds disunity," one spectrum of Trilateral · associates in Israel. Sharon. staffer proclaimed: "Yadin and Sharon are the Carters Peres, and others, were reportedly "stunned" by Rabin's of Israel. Sharon is a dynamite guy ! Carter is very close move. Reports began to circulate widely that Rabin was to him, the Carter-Sharon parallels are very similar, going to use the momentum to build a solid electoral base they are both agri-businessmen." Recent Sharon trips to by opening up a major peace offensive. the U.S., he noted, were "financed by the Carter cam­ Corresponding to Arab diplomatic overtures, a pro­ paign." peace move was manifest in Israel in December. One AI PAC staffer Leonard Davis on December 13 made poll showed nearly 50 percent support for negotiations known in an interview all the essentials of the gameplan. with the Palestine Liberation Organization, an unprece­ "The Labour Party has its tentacles everywhere, even in dentedly high figure. One of Israel's most outspoken the army, everywhere. This is a major problem. Israel doves, Yossi Sarid, called in the Knesset for negotiations needs a change in the whole ideology of the country, from without prior conditions with the PLO. Two other top pro­ socialism to capitalism, to a country with business peace leaders, former Labour Party Secretary General managers and technocrats replacing bureaucrats." Arye Eliav and Housing Minister Avraham Ofer.

MIDDLE EAST 3 travelled to Europe to sound out peace possibilities. each the crucial Feb. 17 Labour Party nominating conven­ reporting to Rabin that Israel would receive backup if it tion offers a striking pattern of Washington's launched a peace offensive. destabilization of Rabin and the Labour Party center: -Jan. 5: The Wa shington Post comments that Peres, Agents ' 'Come Back with a Vengeance " ....Ra bin's expected challenger for the premiership, is On Brzezinski's prompting, the conspirators in Israel the "most likely beneficiary" of the scandal revelations. regrouped. Amidst growing conspiratorial rumblings -Jan. 7: The U.S. State Department informs a caller against Rabin - including a well-publicized Peres-Begin that Peres is "on the move" and that Rabin is to be the series of meetings in which the subject was an exchange victim of a building "Watergate" atmosphere, especially of notes on their respective meetings with Brzezinski - a as the Yadlin trial is to begin the night before the Labour familiar tactic was decided upon : open-ended Watergate Party convention. scandals. The first target was Ofer. -Jan. 8: Peres officially announces his determination to "oust" Rabin. -Jan. 9: Sunday Tim es of London comments that Ofer's What is Ha' aretz Newspaper suicide may be the "final blow to the Labour Party doves." A knowledgea ble form er Isra eli Parliament -Jan. 11: AIPAC asserts that Peres is "coming on member had the fo llowing assessment of the role of strong ; the Labour Party is witnessing a crisis among the Isra eli newspaper in the dumping of Ha'aretz the last staunch Labourites." Isra eliPremier Yitzhak Rabin: -Jan. 12: Ne w York Tim es claims the Labour Party is "rapidly losing huge blocs of voters - intellectuals, Ha 'aretz "Of course, likes Dayan. That teachers, public servants, and the young" and that newspaper is a mouthpiece of Peres and Dayan. It Yadin's "Democratic Movement" is on the rise. is no accident that this is the newspaper that -Jan. 29 : France's Baron Edmond de Rothschild watergated Rabin. It works through the suddenly threatens to "come out with revelations which newspaper's staff, which is hugely pro-Dayan. The would shatter a number of institutions and party founda­ publisher of the paper, Schocken, is the son of the tions." Ha 'aretz editorially hopes that Rothschild will man who 15 years ago took in six of eight Dayanists "put into execution his threat of revealing the facts that into the paper, and they have remained loyal to will place in difficulty numerous Israeli organizations." Dayan ever since." During the period of Jimmy Carter's inauguration, a number of other events acted to box in the Israeli prime minister. For the first time in weeks, the southern For weeks, Hoalam Hazeh 's Laviv had been pursuing Lebanon crisis began to worsen, and Israeli military both Ofer and his son with revelations about Ofer's circles threatened that a "preventive war" against the alleged corrupt misuse of funds earmarked for construc­ Arabs was possible. tion proj ects, but the issue had lain relatively dormant. Labour Party moderates around former Foreign On Jan. 3, however, Ma 'ariv published a front-page Minister Abba Eban made Byzantine deals with Peres in story on the Ofer affair, and Israel's leading "leak" a joint electoral strategy to up-end Rabin. columnist, Matti Golan of Ha 'aretz, issued a vitriolic In early February, Dayan met Brzezinski in the U.S. personal attack against Ofer, later dubbed Ofer's "last stra w." On Jan. 3, Ofer was found dead, allegedly from The Final Phase suicide. Without doubt, he was cognizant that his case Nonetheless, at the convention, Rabin won the was being used to wreck the Labour Party. nomination. Dayan's new threat to bolt from the Labour Many informed Israelis smelled a rat. A former close Party if a moderate foreign policy platform was adopted associate of Ofer, Knesset member Amnon Linn, com­ was ignored, as the convention voted to make significant mented that Ofer's attackers and opponents had cer­ offers of territorial concessions on the Israeli-occupied tainly been involved in similar petty crimes. Other West Bank. sources recalled that Ofer had been the main organizer It took the conspirators less than a month to regroup. in the mid-1960's within the Labour Party against the By mid-March, Ha 'aretz's leading military correspon­ breakaway Dayan-Peres "Rafi" clique and insisted that dent, Ze'ev Schiff, was publicizing Israel's "moral duty" the Dayanists wanted Ofer out of the picture. An in­ to launch a pre-emptive war if there were "signs" of formed Washington source noted that "the hawks have Arab war preparations. Ma 'ariv headlined ostensible come back with a vengeance." Arab war moves and pressed for an intervention into Ha 'aretz and Ma 'ariv would not let matters rest with southern Lebanon. Sharon insisted that the Arabs were Ofer's death. Both papers chattered about the preparing a total regional war in the summer and many "Watergate atmosphere" envoloping the Labour Party. "little wars" until then. Peres announced that new Arab Ma 'ariv editor Rosenfeld intoned that journalists capabilities gave "the .en emy" a "six-hour" mobilization "must remain the watchdogs of the community." time for war. Ha 'aretz editorialized that "we feel that the facts that led In mid-March, the groundwork was laid for the final to his suicide must be clarified." On Jan. 9, Attorney Watergate operation. Ha 'aretz Washington correspon­ General Barak ordered that the investigation of Labour dent Dan Margalit, a former Hoalam Ha zeh scan­ Party members continue. dalmonger and now Israel's leading NSC conduit, The following sequence of events in the month prior to revealed that Rabin's wife had held an illegal U.S. bank

4 MIDDLE EAST account. illegal affair. The incriminating information was ob­ By the end of March, Dayan issued what the Jerusalem tained by Margalit, who received top-level leaks from the Post denounced as an "ultimatu m": he would resign Israeli embassy and the U.S. National Security Council. from the Labour Party if the convention decision on West Margalit then posed as an intimate of Rabin's depositing Bank concessions was not superseded by a promise that money in the account to "prove" that Rabin had main­ Israel would hold a national referendum before any such tained the account ! concessions were made. Rabin defended the original Barak quickly arrived on the scene to squash a decision as the product of a democratic convention judgment by the Israeli Treasury that would have made process, but drew the rope around his neck by agreeing Rabin's doings a minor infraction. Barak insisted that "in principle" to Dayan's demand. the Rabin misdemeanor be pursued in the courts. Then in a special midnight broadcast April 7, Rabin resigned as " The season of the generals is prime minister. For the future, a former Israeli Knesset member now awaiting Israel." commented that "the season of the generals is now a waiting Israel." A U.S.-based Dayanist controller, retired Air Forc� Rabin ordered a stop to the pre-emptive war chants in Intelligence chief Joseph Churba, declared that "to the the press and ordered restraint vis-a-vis southern extent Rabin is out of the picture, Israel wil benefit. His Lebanon. Military correspondents close to Rabin and the being replaced will restore the military deterrent against center Labour Party ridiculed the strategic assessments the Arabs. Israel will now be able to go it alone and stand of the "war hysteria" crowd, and insisted that Israel tough." must explore avenues to a diplomatic solution to the Numerous sources now predict that a right-wing "no­ Arab-Israeli crisis. As late as April ; the Jerusalem Post concession coalition will emerge out of the splintering castigated Sharon and others for basing their "pre­ and chaos of the May 17 elections. Brzezinski's coup is emptive strike" recommendations on "partial facts" nearly consolidated. and "information in a vacuum" and attacked the "arm­ The Dayanists have not finished yet. In the past days, chair generals" who were clamoring for a drive into Rabin has been trying to hold on to power until May 17, southern Lebanon. with broad popular support. In an editorial earUer in the But this rearguard battle left the field open for the week, Ha 'aretz ordered that Rabin .should "keep his conspirators to move in for the kill. Fittingly enough, it distance from the public stage." Within a week Rabin was Ma 'ariv that finally pulled the rug out from under will be retired to a vacation and Shimon Peres will hold Rabin. On April 7, the paper's lead story headlined that the reins of power in Israel. Rabin too had held a U.S. bank account and that the -Mark Burdman premier had tried to cover up his involvement in the

Who Controls Israel

General Ariel Sharon units in the Sinai in the early 1950s ... Chief of Staff during 1956 Suez war ... Formed, with Ben-Gurion and Peres, the Chief of right-wing party Shalom Zion ... Close associate breakaway "Rafi" clique out of the Labour party in of Dayan in Israel's early post-independence period, 1965 ... As a visitor to Vietnam in the mid-1960s, lavishly ' was instrumental in setting up the "Brigade 101" coun- praised the U.S. as "the greatest country in the ter-terror units in the Sinai in the 1950s ... Called the hero world" for its conduct in Vietnam ...Led coup d'etat of the Yom Kippur war, led Israeli units into the Sinai, against moderate Israeli Premier Levi Eshkol on eve of and launched public dispute with Dayan over conduct of 1967 Arab'Israeli war and was appointed Defense Minis­ t the war. Quickly became spokesman for a host of extre­ ter by Eshko . .. After war, was leading government mist groups, including U.S.-based Jewish Defense hardliner on keeping Israel's hold over the West Bank, League ... Formed the Likud Party in the 1970s out of a declaring that "coexistence of Jews and Arabs is only melange of disparate right-wing groups, then left Likud possible under the protection of the Israeli government after Carter's ascendancy in U.S. in order to push an Is­ and army" ... In October, 1973, responsible for arranging raeli "government of technocrats" ...Met Carter more Israeli "intelligence lapses" that provided Egypt with to­ than once in U.S. during election campaign, while setting ken military victory and ensuing Rockefeller-manipula­ up his own "contact network" in the U.S. ted oil hoax... Prime advocate of Israeli adoption of a' 'nuclear option." Moshe Dayan Shimon Peres Trained by British security forces during World War II in counter-terror operations, received personal attention Current Israeli Defense Minister and Labour Party can­ from an intelligence operative nicknamed "Killer" ... didate for Prime Minister ... Ben-Gut-ion's "other" pro­ Leading protege of first Israeli Premier David Ben-Gur­ tege, Dayan's closest allY in Israel, Peres joined with ion, an advocate of tough retaliation policies against Dayan and Ben-Gurion to form mid-1960s Rafi split-off neighboring Arab states ... Helped set up counter-terror from Labour Party ... Throughout 1950s, was top opera-

MIDDLE EAST 5 tive in Europe for Israel among right-wing, Rockefeller­ dence" ... The archaeologist who discovere,d the Masada controlled "Die Spinne" intelligence circles, building in­ findings, thereby resurrecting the tale of national sui­ timate relations with French rightists around Jacques cide at the hands of the invading Romans. Uses archaeo­ Soustelle and with West German neo-Nazis around logy to "prove" that Jews have always been a separate Franz-Josef Strauss. Through these connections, helped and apart nation, giving religious-ideological underpin­ to obtain Israel's atomic weapon capability at Dimona. ning for Zionist mythos. Works with American Schools of Was also Israel's leading arms procurer from European Oriental Research, an archaeological center originally right-wing circles ... Described recently by a leading Is­ established by John D. Rockefeller, now with extensive raeli expert as "the most pliable pigeon-servant of the State Department connections. One leading U.S. ar­ U.S. ever . He's a Big Zero, an opportunist, with plati­ chaeologist, listening to Yadin speak, judged that Yadin tudes that appeal to the semi-literate." "is not a man of peace" ... Yadin spent several months re­ cently in the U.S., then returned to Israel to set up General Yigal Yadin "Democratic Movement for Change" ... Described by a Chief pf Democratic Movement of Change... Israel's close relation teaching at a U.s. university as "close to Chief of Staff during the 1948-49 "War of Indepen- the U.S. National Security Council."

Tunisia On Cen.ter Stage In The Ma hgreb

and technical accords with his hosts. An article in L 'A ction, the French-language Tunisian daily, praised TU NISIA relations between the two countries on the eve of Nouira's trip. Mention was made of the Kasseb dam, and the National School for Engineers which Soviet capital Tunisia, long an Atlanticist satrapy and a source of and technical assistance helped to construct. The bilat­ problems for its progressive neighbors in north Africa in eral nature of the "Soviet-Arab" and "Euro-Arab" state­ consequence, has recently emerged at the center of a ments does not becloud the surfacing Euro-Arab-Soviet flurry of Euro-Arab-Soviet diplomatic activity which car. demand for peace and development in the region. change the political geometry of the Mediterranean ba­ sin. Under pressure from its Mahgreb neighbors on one side and the Soviet and Italian governments on the other, Intra-Mahgreb Relations Tunisia is breaking with its "sore thumb" profile, and Interfacing this diplomacy are Algerian-Libyan efforts has begun to settle petty disputes with Algeria and Libya to "box in" their recalcitrant neighbor. The bogus issue and undertake major trade and defense agreements with of "water rights" has tended to destabilize intra-Mah­ the USSR and Italy. greb cooperation. Sonatrach, Algeria's state-owned hydrocarbon sector and ENI, its Italian counterpart, had So viet-Italian Offensive signed an agreement for a gas pipeline to be built across On March 21 , the arrival in Tunisia of Vito Lattanzio, the Mediterranean waters into Sicily in order to supply Italian defense minister, coincided with the visit of Ad­ both Italy and other European countries with natural miral Sergei Gorshkov, Soviet deputy defense minister gas, but the business arrangement has been at a and commander-in-chief of the Soviet Navy. In separate stalemate because of Tunisia's refusal to allow the pipe­ communiques, the Italian and Soviet governments, line to cross its waters. Recent reports say that a solution called for a swift Middle East peace and expanded econo­ has been reached between Algeria and Tunisia. mic ties. Upon his departure from Tunisia, Lattanzio The Libyan-Tunisian dispute has a bitter history. The said, "The Mediterranean is not a barrier between the difficulty centers around the oil drilling rights in the Gulf two countries but a link, a port of peace and a bridge be­ of Gabes region, which demands a mutual agreement on tween Italy and the Arab countries." the delimitation of the continental plateau. The Libyans, The Gorshkov visit addressed primarily the impor­ in calling for an immediate solution to this troublesome tance of strengthening economic relations between Tu­ affair, appear ready to negotiate a settlement. nisia and the USSR and paved the way for Prime Minis­ These quarrels are soluble within the broader context ter Hedi Nouira's trip to the Soviet Union. Nouira's one of expanded economic relations between the Mahgreb week stay in the USSR has swung Tunisian-Soviet rela· and its pro-development European allies. The Italians tions into high gear. A joint communique, issued April 12, are anxious to settle both disputes because their state­ stressed the necessity for reconvening a Geneva Peace owned enterprise ENI is involved in both cases. No doubt Conference, and proclaimed that the Middle East crisis Tunisia has felt strong pressure to terminate its intransi­ remains " the gravest threat to world peace." Nouira was gence. The primary condition for a viable Euro-Soviet also successful in signing economic, political, scientific peace offensive is peace "within" the Mahgreb.

6 MIDDLE EAST ASIA Fukuda Foiled: Japan/USSR Proceed On Fish i ng T I ks a

Japan and the Soviet Union have resumed talks on an personal letter to Soviet General Secretary Brezhnev interim provisional fishing agreement. Negotiations stressing Japan's desire to cooperate in the economic between the two nations had almost completely broken development of Siberia. Fukuda, Yomiuri notes, down April I when the Soviet Union ordered all Japanese displayed only hostility to the Soviet while his govern­ fishing boats out of its new 200-mile zone bordering north ment made busy overtures to Peking. Japan. According to Yomiuri columnist Minoru Hirano, "the The breakthrough in the talks came after Japanese first step taken by the Fukuda cabinet upon its formation Prime Minister Takeo Fukuda, under severe pressure was to inform the Soviet Union of a postponement of the from Japan's businessmen, backtracked on his bid to Japan-Soviet ministerial conference to be held in push for an anti-Soviet "peace treaty" with Peking, the Moscow with Foreign Minister Hatoyama present. The real reason for the initial collapse of the talks. Fukuda's official reason was that Hatoyma had to attend the Diet inability to disrupt Japan's growing economic ties with session but a remark by (Chief Cabinet Secretary) the Soviet Union has wounded his meagre political Sonoda 'in consideration of Japan-China relations', credibility in Japan. strongly provoked Moscow. In effect Sonoda's positive The Japanese government, reports the April 12 Daily ' attitude toward Peking was much in evidence in January Yomiuri, will send a special envoy to Washington "to and February." Hirano concludes: "The blunders this appease the Carter Administration's anger" over the time compared with the display of superb diplomatic resumption of the Japanese-Soviet talks. Evidently the skill four years ago makes us keenly feel.. .how difficult it U.S. government believes that Japan committed "a is to conduct equidistance diplomacy toward Peking and breach of international faith" by not following the Moscow ...and what foresight Japan should have in precedents set in the earlier U.S.-Soviet fishing carrying out such diplomacy." negotiations. The Peking Angle U.S. pressure on Fukuda has led to a certain stalling of The talks between Sonoda and Kosygin made it clear the talks now going on between Japan's Agriculture and that Fukuda's desire to enter an anti-Soviet alliance with Forestry Minister Zenko Suzuki and Soviet Fisheries Peking and Washington by signing a peace treaty with Minister Alexandr Ishkov. Although late last week Peking which will include an anti-Soviet "anti­ Japan's newspapers were predicting that the hegemony" clause was at the center of the fishing negotiations would qe concluded, the talks have been dispute. The talks became most heated when Sonoda delayed by the Soviet Union's stalling on the presentation referred to the "responsibilities" of a military super­ ' of specific fishing quotas for the Japanese. power like the Soviet Union, a remark which Kosygin Ji T e Soviets' delay is a pressure tactic on Japan not to took as an attack on Moscow's "hegemonic policies." back down in the face of Washington pressure and raise The conversation then exploded with debate centering on the long-standing issue of the ownership of four islands in "Japan-U.S. relations and the China problem." the north of Japan. Fukuda was hoping to use this issue to wreck the talks. Last week Fukuda's special envoy to Why Fukuda Fa iled Moscow, chief cabinet secretary Sunao Sonada and But the prospect of Japan being tt-apped in an alliance I Soviet Premier Alexei Kosygin reached a compromise with Peking and Washington against the Soviet Union agreement on the islands which serves as the basis for the was a totoally unsellable package to Japan's , resumption of the Suzuki-Ishkov talks. Japan decided to businessmen. (See Asian Economic Survey) . For one recognize the 200-mile Soviet limit around the four thing, the incident occured at the same time that Japan islands in return for fishing rights, thereby bypassing and the Soviet Union are in the final stages of talks in the ownership issue until a later date. Moscow around major oil exploration and development proj ects in the Yakutsk region of Siberia. "Perfec t Diplomatic Blunder" The commitment by Japan's big businessmen to The backfiring of Fukuda's disruption tactic has develop both the Soviet Union and China was emphasised delighted his opponents inside both the ruling Liberal by Toshio Doko, head of the big business federation Democratic Party and the press. A columnist for the Keidanren, who has just returned from Peking. Doko anti-Fukuda Daily Yomiuri lambasted Fukuda's moves denied that China had succeeded in putting the brake on as a "series of fiascos" which culminated in a "perfect Soviet-J apanese development. Interviewed in the daily diplomatic blunder." The Yomiuri contrasts the ap­ Ma inichi April 5 Doko "emphasised that Sino-Japanese proach of former Prime Minister Tanaka in his talks and Russo-Japanese relations are two different things. 'I with the Soviets four years ago, noting that before thing Chairman Hua Kuo-feng (of China) understands Tanaka entered fishery negotiations he first sent a this because he gave us a hearty welcome,''' ASIA 1 Javits In Mexic� To Beat Down Resista nce To IMF Shock Treatment

While Carter's representatives try to strongarm the MEXICO Mexican government into accepting this program, a high level Mexican delegation headed by Finance Minister Moctezuma Cid and the director of the national oil com­ pany (Pemex) Diaz Serrano, scurried up to New York on A raging battle has broken out in Mexico over the at­ April 11 for a round of meetings with top Wall Street tempts by the IMF and Wall Street to force Mexico representatives. through Chilean "shock treatment" economic policies. The Moctezuma Cid visit is specifically designed to Nationalist forces within Mexico have for the first time deny the reports, following the Labra attacks on the IMF, openly denounced the agreement signed early this year that Mexico is reviewing its agreement with the IMF. In between the government of President Jose Lopez Portillo a speech before the Council of the Americas April 12 and the International Monetary Fund. On April 6 Moctezuma assured the banks that Mexico will stick to Congressman Armando Labra opened fire on the IMF in the IMF's debt ceiling of 3 billion in loans this year, and an interview prominently reported in the Mexican press promised to cut imports further. Moctezuma and Diaz in which he attacked the "extremely damaging" Serrano went on to reiterate that Mexico has no intention economic austerity policies proposed by the Fund. Labra of joining OPEC but at the same time insisted that while specifically attacked the IMF for "attempting to impose Lopez Portillo's strategy centers around reducing in­ a policy to restrict the growth of the national economy" flation it also is based on insuring a "satisfactory and called on the government of Lopez Portillo to reject growth" of the economy. policies which would dismantle Mexico's large state David Ibarra, the head of the national financing sector and drastically cutback consumption by formally agency (Nafinsa) followed through with an explicit "renegotiating" the agreement with the IMF. denial that Mexico was thinking of repudiating the IMF's Labra's statements. which have effectively rallied pro­ conditions. In a show of good will Ibarra announced that development forces within Mexico into open battle Mexico will follow up the recent issue of lucrative "petro­ against Wall Street policies. have had major reper­ bonds." directly backed by and pegged to the inter­ cussions both in Mexico and in the U.S. Two days after national price of oil, with special "silverbonds." Labra's remarks. U.S. Senator Jacob Javits arrived in The centrist position of the L6pez Portillo government Mexico to head up a top-level delegation whose mission is on the latest IMF demands for a total zero growth, to insure that Mexico does not buck the IMF. The U.S. "shock treatment" economy, was presented on April 11 delegation which includes Senator Lloyd Bentsen and by Planning Minister Tello Macias. While reiterating the Carter's Undersecretaries of State and Treasury government's commitment to austerity policies includ­ Richard Cooper and Anthony Solomon, will participate in ing a low wage increase, Tello warned that "stagnation a series of "quadripartite meetings" involving U.S. and of the national economy cannot be considered as a viable Mexican government and business representatives. option for the country ...due to the political and social While the meetings have been officially billed as a "step problems that would imply." Aware of the social up­ towards easing investments by U.S. companies in heaval that further austerity would bring, the L6pez Por­ Mexico." the Carter Administration's great interest in tillo government is resisting Wall Street demands for Mexico's oil has not remained concealed. On his way to total "shock treatment." At the same time, however it is Mexico City Javits went out of his way to visit one of trying to entice the bankrupt New York banks into pro­ Mexico's new rich oil-field regions in Tabasco. A spokes­ viding some credits to roll over Mexico's large foreign man for Senator Bentsen - an outspoken proponent of debt. I U.S. control over Mexican oil - indicated that the main The sum total of credits received by Mexico this year, purpose of the meeting would be "how the U.S. can use however. bodes ill for this tactic. During the first quarter the natural resources that Mexico offers." of this year, Mexico has only received $800 million, in The details of the IMF program for Mexico are mean­ :sharp contrast with the more than $1 billion received in while being circulated in U.S. financial circles in a docu­ the same time span last year, and there are no in­ ment written by Redvers Opie. a founding member of dications that the banks will come through with much Business International and an economic analyst in Mex­ more despite Moctezuma Cid and Diaz Serrano's public ico, which calls for, in the words of a New York financial relations job. expert, "putting Mexico through the grinder." Opie makes clear that Wall Street. is now demanding straight Popular Mobiliza tion Against IMF Chilean shock treatment administered by the IMF under Meanwhile, within Mexico the progressive forces link­ a "two year recession" and a total credit shutoff. ed to former president Luis Echeverria are moving to

LATIN AMERICA 1 mobilize popular support for and institutionalize the evaluate federal projects - the first time. since Lopez resistance to the IMF's policies first voiced by Labra last Portillo took office that the progressive congressmen wiII week. On April 11 th e head of the School of Economists, adopt a high public profile. Becerril Straffon strongly backed up Labra's attacks on At the same time other congressmen are arranging a the IMF and stressed that the "government must mob­ separate ordinary session of congress solely for over­ ilize the popular masses around a historical project of sight of public spending. As an unprecedented step the development." Becerril's call is being put into motion by measure wiII institutionalize the popular input into what pro-development elements within the Congress. Con­ has traditionally functioned as a rubber stamp congress gressman Heladio Ramirez on the same day announced - at the same time that it places the issue of IMF that the congress will begin tours throughout the country demands for slashing public spending in a forum for open to listen directly to the demands of the population and to debate.

IMF,lnd ustrial ists, Vie For Venezuela/s Petrodollars

economic package, and demanded that the Finance Ministry be given tight control of the country's purse­ VENEZU ELA strings. Current expenditures in the 1978 budget must be 10 percent under those of 1977, (in actuality representing a minimum cut of 20 percent after inflation) , "priorities" for expenditures must be established and government The Wall Street financial weekly, Money Ma nager, projects "reevaluated" and revised accordingly, Hur­ described Venezuela in its April ll issue as an "unfolding tado has said. Any programs for which there is not a economic horror story ... spending itself into debt faster "critical mass of human and financial resources" must than its oil earnings soar." The article gives no facts or be eliminated, and available resources "concentrated" figures to substantiate its assertion of a coming in only those projects already begun. economic crisis in Venezuela, but predicts a massive Pro-growth industrialists supporting Perez wiII not be capital flight in the near future. pleased with Hurtado's austerity budget. Jose Ignacio Money Manager's picture of Venezuelan inflation and Casal, ex-Development Minister and a spokesman for growing insolvency due to the government's spending, industrialists, told the Caracas daily Na cional that the the most dire of a series of similar similar articles that EI difference between this administration and previous have appeared recently in the international financial ones is "like the difference between heaven and earth" press, is, in fact, false. Venezuela has one of the lowest for industrialization. He pointed out that in the past two inflation rates in the world, around 8 percent in 1976, and years the rate of industrial growth has doubled, and a still has more than $8.5 billion in petrodollar reserves. "take-off phase" of industrialization has been reached to But Money Manager's warnings match a fierce in­ move beyond mere import substitution and assembly ternal debate over economic policy within Venezuela. manufacture to medium and heavy industry. Demanding The premise of the development policy of President from the government only more credits for industry, Carlos Andres Perez is to use the enormous increase in Casal stressed that there was a real "climate of confi­ oil income - now primarily resting in New York banks ­ dence" for investment in the country. to industrialize Venezuela. A five-year, $20 billion invest­ An economist for the powerful Mendoza national ment program has been designed to carry out that policy. capital group, Carlos Acedo Mendoza, explicitly Perez, backed by a growing faction of Venezuelan in­ demanded pulling the petrodollars out of New York. In dustrialists, has stressed that the way to reduce inflation an op-ed in one of the major dailies in early March, is to expand both production and the productive base of Acedo Mendoza wrote that holding reserves abroad is the Venezuelan economy. The strategy of the opposing "bad business." If the enormous reserves are a monetarist faction, headed by Finance Minister Hector dangerous source of inflation, then the reserves should Hurtado, is to halt inflation by bringing production to a be reduced, through the "increase in importation of halt. capital goods, technology and imputs which permit the At the heart of the debate lie the petrodollar reserves. expansion of local projects." Spokesmen for the Perez faction have called for Vene­ zuela to pull its money out of New York for domestic production. Venezuela last week promised Italian "Never Has A Government Done Foreign Trade Minister Ossola an increase of deposits in So Much In Such A Short Time Italian banks, already tripled since last November. Although the promised increase is modest, the signi­ For So Many People" ficance of the pull-out is political. On the other hand, Hurtado told the press last week Gum ersindo Rodriguez, ex-Planning Minister and that Venezuela is "favorable" to funding the proposed present Congressman, defended the government's $15 biIlion bailout fund for the International Monetary economic policy against its critics in a rousing speech Fund (lMF). before Congress last month. Rodriguez was speaking for Hurtado last week proposed a counter domestic the ruling Accion Democratica party in a debate called

2 LATIN AMERICA by the opposition Copei p.lrty to compare the results of ...It has been said in this debate that despite the the Perez .ldministra tion Cllld prior �o vernments. Th e nationalization of oil and iron, we are now more depen­ fo J/o win� is nH'rdy

LATIN AMERICA 3 -- _LAW

The New Sou th/s 'New Southern Justice'

Foes of the Jimmy Carter Administration are watch­ vote totals were challenged as fraud-tinted in both state ing closely the progress of an appeal of a major and federal courts. election case, Hooks v Eure, now pending before the u.s. In sum, Hooks v Eure offers a capsule look at the Fourth Circuit Court in Richmond, Virginia. wormy side of Carter's "New South" which is rarely In the case, leaders of the u.s. Labor Party are seeking publicized in the national media, and could result in a a major damages award from the North Carolina Secre­ scandal causing major damage to the Administration. tary of State, local election officials in Charlotte, and The "Red Hornets" story begins in the late 1960s, when members of a drug-counterculture collective, the "Red the Institute for Policy Studies, the organizational hub of Hornets Mayday Tribe," for violation of the USLP's the Wall Street-funded "new left" radical movement of federally-guaranteed election rights in the 1975 Charlotte the 1960s, shipped a number of its organizers to the South. mayoral election. Members of the drug collective To ensure that their operatives - whose assignment was . registered as USLP voters, and, with the collusion of to promote the use of drugs and develop a "radical" Mecklenburg County Board of Elections (some of them counterculture activist movement - were not run out of close to the Red Hornets), succeeded in placing their town, IPS put together a layer of liberal professionals to leader, self-proclaimed homosexual Mark Englander, provide protection and funds for their nascent move­ on the November ballot as the "u.S. Labor Candidate for ment. These IPS networks established safehouses for the mayor." As Englander's subsequent campaign - in hippies to protect them from the police and vigilante which he used every opportunity to cast ridicule on the groups in their germinal period. Labor Party - made clear, the "Hornets" registrations Atlanta was transformed into the mecca of the as "Labor Party" members violated state election law, Southern counterculture, with that city's "Great which holds that party registrations must be in good Speckled Bird" collective the focal point for the southern faith. Yet, rather than enforce state law and void the counterculture. The collective's paper, Th e Grea t potheads' registrations, both county and state election Speckled Bird, touting the virtues of drugs, violent pro­ officials, egged on by the local press, allowed the farcical test and the counterculture, was peddled by hippies Englander campaign to continue through the general throughout the South. election, where Englander secured only a handful of From Atlanta, members of this IPS swamp were votes. farmed out to promising spots in other parts of the South. The implications of the case reach far beyond the 1975 A primary target for this deployment was the triangle of Charlotte mayoral race. The Red Hornets are not a universities in North Carolina : Duke, the University of spontaneously-generated congealment of local hippies North Carolina and North Carolina State. In the late 1960s, and potheads ; they were organized with help and these campuses were hotbeds of student activism guidance by the Washington, D.C.-based Institute for which provided a perfect medium to further the ac­ Policy Studies. tivities of the Great Speckled Bird, et a1. This was the lar­ The Hornets have a history of involvement in profes­ val stage of the Red Hornet operation which originated sional election "dirty tricks." Before their 1975 "USLP" out of a short-lived IPS creation called the Southern caper, they were involved in "Watergate"-type Student Organizing Committee (SSOC). operations against then-president Richard Nixon in the The Red Hornets have their genesis in a splinter from 1972 presidential campaign. the SSOC that formed around future Hornet leaders The Hornet scandal potentially could involve leading Marvin and Kathy Sparrow. Kathy Sparrow, the former luminaries in and around the Carter Administration, Kathy Taft - an adopted daughter of Ohio's Taft clan including, notably, Carter's embattled drug czar­ which sent another scion, Dr. Robert Taft, to his death by designate, Dr. Peter Bourne, a fo rmer board member of heroin overdose at New York's Lincoln Hospital Detox IPS's southern affiliate, the Institute for Southern Center where he was involved in the brainwashing of Studies, and the "Warner Communications" network of drug-addict recruits to IPS's terrorist Black Liberation rock-star and drug-smuggling-linked Carter fundraisers. Army - traveled south to Duke University in 1968 and Also involved is a federal judge who, in addition to began pouring her family's money into a variety of I systematically protecting the Hornets from efforts of radical organizing escapades. During the same year she local law enforcement officials, has recently handed met and married Marvin Sparrow, a native North Caro- down a highly controversial decision strongly supporting linan. Their honeymoon itinerary included such tourist the President's attacks on nuclear energy. The case attractions as the riotous 1968 Democratic Convention in opens a new front on the vote fraud scandal which the Chicago. President's backers have only with difficulty contained Soon thereafter, Kathy moved herself, her husband in such northern and midwestern states as New York, and her money to Charlotte. Her "strategy" for building Wisconsin, Ohio and Pennsylvania where Carter's 1976 IPS's counterculture movement was "Hippies can be

LAW 1 organized. We will organize hippies." Within months tion. the Institute for Policy Studies tightened their Kathy provided local hippies with the financial lubri­ control over such groupings as the Red Hornets for more cation necessary to open two "communes." the local effective political deployment. In the early 1970s. IPS set "Women's Crisis Center." a coffeehouse appropriately up the Institute for Southern Studies in Atlanta to be the called "Mothers," a house for gays,'an organized farm­ centralized command point for pulling together the ing commune, the Open House Methadone Center, the variety of ragtag counterculture groups. Dr. Peter "Plain Dealer" newspaper and a "nightspot" called Bourne. an intimate of Jimmy Carter and top drug of­ Phantasmagoria. The christening of Phantasmagoria, in ficial in Carter's Georgia administration. was placed on October 1969, was a big step forward for the political the ISS board of directors. where he remains to this day. activity of Marvin and Kathy Sparrow. There were two The Hornets were hooked up to the national organizing rooms at Phantasmagoria excluded from public access. of the "Mayday Committee." a band of rioters brought One was for major drug deals, with the Sparrows together by IPS's CounterSpy organization. The Mayday receiving 10 percent of the take, and the other room was Committee led nationwide riots and violent demonstra­ used for Friday night orgies where local high schoolers tions in 1971. centered in Washington. D.C., with the were initiated into the experiences of the "revo­ Charlotte Red Hornets being eager participants in the lutionary," drug-counterculture life-style. festivities. Top CounterSpy operatives Winslow Peck and The Sparrow's organizing received important official Tim Butz were the field coordinators for the Mayday protection, without which their followers would have long Committee, while continuing their close association with ago been dispersed by law enforcement officials. Federal Dr. Bourne through the Vietnam Veterans Against the district court Judge James B. McMillan played an War. The financial backing for Mayday came from one of especially interesting and important role. Prior to his the top drug conduits in the nation, the Eli Lilly En­ appointment to the federal bench, McMillan was a dowment Fund. conservative Democrat active in local party politics. In Butz and Peck presided over the August 1971 "Ga­ the late 1960s, in the course of touring a black school in thering of the Tribes" in Atlanta. The two laid out the connection with a desegregation case he was con­ political tasks that had been assigned to the Mayday sidering, McMillan underwent a "Damascus Road" Committee. focusing on the destabilization of the Nixon conversion. He stated later that he "realized" he had Administration. In October 1971 the Red Hornets were been misguided on racial questions all his life and. in sent to disrupt the Billy Graham Day celebration where repentance. mandated a pioneer busing program for the President Nixon was the featured speaker. It is evident Charlotte schools (Swann v Mecklenburg) . From that from the Watergate transcripts that the Nixon staff was point forward. the former moderate Dixiecrat became a sold a bill of goods over the potential for reaping political committed supporter of the "New South" ideology. as capital from this Hornet-planned disruption. According typified by his recent decision to declare unconstitutional to the transcripts. Nixon's White House Chief of Staff. the Price-Anderson Act which fosters the development of H.R. Haldeman. sent a memo to Ronald Walker con­ nuclear energy. cerning the scheduled disruption. The memo stated: "100 In the case of the Sparrows and their recruits. known to 200 anti-Nixon demonstrators expected. They will be as the Red Hornets by the early 1970s. McMillan has violent. They will have extremely obscene signs ... it will emerged as a consistent defender of their "rights" vis-a­ not only be directed toward the President but also toward vis local law enforcement efforts to close down their Evangelist Billy Graham." Next to the reference to notorious drug trafficking. Charlotte police. when asked obscene signs. Haldeman had written the comment the reason for their failure to close down the Hornets' "good" and next to the reference to Billy Graham. drug traffic. respond with one word. "McMillan." Haldeman had written "great." Every time the police took action against the Hornets' But while Haldeman and other Nixon staffers thought criminal activities. they encountered vehement they could make political capital by being the target of resistance from the Hornets' " straight" supporters in Hornet obscenities. they were being set up for Water­ the community. When the Charlotte police conducted a gating by the IPS-CounterSpy networks, who would later drug raid on the Red Hornet "hippy house" in 1970. they use examples like the Billy Graham Day fiasco to claim were severely chastised by Judge McMillan for "vulgar that a paranoid Nixon was out to squelch all political entry practices." The Charlotte press used the incident opposition. Hornet lawyer George Daly cited the Billy to drum up massive anti-police sentiment. This press Graham Day affair to compare Nixon to Hitler: "The campaign paved the way for a takeover of the Charlotte whole affair. the tone of the memos, the crowd control. Police Department by the Wall Street-dominated federal the manipulation of public opinion, the sealing off of the police agency. the Law Enforcement Assistance Ad­ Coliseum, was startlingly like the Nuremberg party ministration (LEAA). rallies of 1934." During the same year. the Sparrows were arrested and Because the police and Secret Service had taken action convicted of "contributing to the delinquency of a to prevent the disruption and protect the President from minor. " After being sentenced to 18 months in jail. a possible threat to his safety (a well-warranted pre­ Marvin vowed that there would be large protests "until caution where the IPS drug-terrorist networks are in­ there are no more arrests for acid and grass." But volved). the Hornets sued them for violation of civil Marvin didn't need his protests. Local ACLU attorney rights. The case was brought by George Daly before George Daly took the case before Judge McMillan. who Judge McMillan. giving this pro-Hornet duo another dutifully let the Sparrows off scot-free. opportunity to let the police and the rest of the Charlotte Pleased with the early success of their Southern opera- area know that the Hornets are protected property.

2 LAW Although McMillan did not give the Hornets the 1964 case Clark v Meyland held that the intent of this monetary damages they were seeking, he used his court­ good faith clause was to protect political parties from room as a forum to lash out at the police a nd Secret Ser­ raids conducted by opponents of the parties. Obviously vice for their "wholesale assault on civil rights and li­ the Hornet move is precisely the sort of thing that Court berties of numerous citizens." had in mind. Yet when the Labor Party petitioned to have The Hornets' 1975 operation against the Charlotte the Hornets removed from the rolls on the grounds of the mayoral campaign of U.S. Labor Party candidate Stan "good faith" clause. they were met with cavalier disre­ Ezrol was their next major deployment in major election gard by the Hornet-riddled Mecklenburg County Board dirty tricks. of Elections. The Board's decision to give official Although the Hornets locally pretended that they were blessing to the Hornet usurpation was backed up by two engaged in a spontaneous, local effort to inject some successive court rulings, by local Judge Frank Snepp lively "fun and games" into the election - and although and federal judge McMillan. this pretense was accepted and warmly endorsed by For two months Mark Englander was billed as the Judge McMillan in his decision against the Labor Party mayoral candidate of the U.S. Labor Party. He used the in Hooks v Eure at the federal district court level - there attendant media coverage to promote his crude fascist now is published proof that the operation was a program for turning Charlotte into a countercultural zoo nationally coordinated, IPS-run dirty tricks operation (with Englander as the zookeeper). He insulted au­ against the USLP. That proof appeared in mid-1976 in the diences wherever he went and told them that he didn't form of a scurrilous CounterSpy attack on the USLP want their vote because mayoral politics was a farce. He titled "Brownshirts of the 1970s." The pamphlet, which appeared on TV commercials wearing a Groucho Marx includes virtually every slander against the USLP cir­ nose and glasses to promote his "ideas" for running the culated by IPS networks over the past six years, con­ city. cludes with a battieplan for disrupting the Labor Party's With the Englander campaign sanctioned by local election efforts. And one of the premier tactics advocated courts and officals. the USLP turned to federal court for is the Charlotte Red Hornet disruption of the 1975 relief under Title 42, §§1983and 1985, subsection 3 of the mayoral campaign. United States Code. The case, Hooks v Eure, was Besides the role of Judge McMillan. the Hornets' 1975 assigned to Judge McMillan. mayoral caper would not have been possible without the On November 9. 1976 McMillan handed down his de­ fact that leading Hornets had infiltrated the Mecklen­ cision. The decision was a deliberate obfuscation of the burg County (Charlotte) Board of Elections - a circum­ essential facts of the matter. McMillan stated that "the stance which should prove instructive for investigators court is unable to see that their conduct (the Hornets') of the 1976 Carter vote fraud throughout the country. The amounts to anything more than a robust, though some­ Executive Secretary of the Board of Elections is a for­ times clownish, assertion of political rights." He then mer Florida SDS member named Bill Culp. an proceeded to laud the Red Hornets as exemplars of the acknowledged Hornet enthusiast. Culp's chief mechanic American political tradition: "The conspiracy was to at the Board. who is in charge of "fixing" the voting ma­ take over a political establishment and elect their own chines. is Kent Crawford. a veteran Red Hornet. Culp has people. This is a ritual which is not unique in American employed various Hornet members for work in local experience and does not lack in respectability as to which elections. including even mayoral candidate Mark view various Reagans, Goldwaters, McGoverns, Ken­ Englander. And Culp is known to be a personal ac­ nedys, Roosevelts, Carters and Jeffersons could attest." quaintance of Hornet leader and bankroller Kathy The judge performed this distortion of the American tra­ Sparrow (a Hornet collective which houses Kathy dition to obscure a critical point in which the North Caro­ Sparrow and Mark Englander is across the street from lina "good faith" clause is quite clear. Every one of the Culp's house). persons mentioned in the judge's opinion was previously Just before the 1975 Charlotte mayoral filing deadline. affiliated with the political party whose nomination for Englander filed for mayor against Ezro!. The Red office they secured. None ever stated, as Englander did, Hornets. with their Board of Election supporters. packed that their candidacy was aimed at destroying the party the registration rolls with local potheads and succeeded in question. in winning a mandate primary election for Englander. The seriousness with which McMillan himself views The local press, led by the Charlotte Observer and the electoral process was indicated in his decision where WSOC-TV - the latter the Charlotte affiliate of Cox he stated that ' 'It is not out of order to observe that a little Broadcasting. the largest contributor to Jimmy Carter's nonsense now and then is relished by the best of men, and 1970 Georgia gubernatorial campaign - played the it would not hurt if we could maintain in political matters situation as a "factional dispute within the Labor Par­ a little more sense of humor and not condemn too ty." These same press outlets ignored documentation seriously those who laugh a little over serious matters." proving that the Red Hornets had never been associated McMillan's decision showed evident disregard for both with the U.S. Labor Party and in fact were witting tools state and federal law in the case, and amounted in fact to of the Labor Party's political opponents. an ill-concealed coverup of a major "dirty tricks" North Carolina state Law clearly addresses the rele­ scandal which could touch on important Carter Adminis­ vant questions of the legality of the Hornets' registration tration figures. The decision on appeal by the Richmond as Labor Party members. In order to change parties. as circuit will be viewed as an important test of the willing­ Englander and his cohorts did. a voter must swear to an ness of the federal judiciary to uphold the Constitution in oath that the registration change is being made "in good tests of Carter Administration policy. faith." The North Carolina State Supreme Court. in the - S. Roberts and P. Amest

LAW 3 1111111111111 11 1111111 PRESS

·IPS Pays Kickbacks To Phoenix Pr be Publishers o

The Executive In telligence Review has been informed Who Is Robert Greene? that the Institute for Policy Studies, the "mother" politi­ A few things should be said about the pedigree of IRE cal intelligence agency responsible for direction and Arizonal team leader Robert Green of Long Island's funding of the Fund for Investigative Journalism (FIJ) Newsday. Greene "defended" his work to Editor and and Investigative Reporters and Editors (IRE) groups in Publisher in an interview March 26 by admitting that the their attacks on Sen. Barry Goldwater and southwest con­ team uncovered "nothing criminal per se" against Gold­ servative politicians, is itself making direct payments to water, "but we found that (Sen. Goldwater) publicly newspaper publishers who run the "Arizona Story." associated with organized crime figures ...and this con­ Reports indicate the payments have been made to doned their presence in the state." Greene was promptly various small papers and so-called underground press, attacked by the widow of murdered investigative from a California bank account in the name of IPS. reporter Don Bolles, whose death while investigating As the Arizona series broadened out recently to include Arizona crime in 1976 became the "cause" around which the International Brotherhood of Teamsters in its smear IPS networks built the Arizona probe. Rosalie Bolles campaign linking prominent figures to organized crime, charged Greene with "using" her husband's name to a United Press International survey showed that more "give credibility to (the team's) work," and flatly than one-third of the newspapers originally contracting challenged Greene to let the story "stand on its own for the series had cancelled out during its first week. The merits to the test of responsible journalism." lower level networks of this particular IPS operation. The IRE's Arizona story is basically a rehash of particularly the IRE, are a shambles. . Green's earlier attempts at a hatchet job on Sen. Gold-

Augusta Paper Hits FIJ

Th e fo llowing editorial appeared in Georgia 's reporting more subjective, to appeal to one's Augusta Chronicle-Herald, Friday, April 1. Th e 'natural feelings' and 'psychological needs'." In paper circula tes to about 75, 000 of Augusta, fact, the FIJ has gotten several big journalism Georgia 's 100, 000 population, and is part of the schools - most notably Ohio State and North­ southern-based Morris newspaper chain. eastern - to include "precision" training programs for its students. One signal for this interpretative reporting OBJECTIVITY SUFFERS scheme was given by Seymour Hersh, when he reportedly told friends last year that "conservative It was former Vice President Spiro Agnew who, editors and publishers are the biggest enemy facing in recent years, drew attention to the practice of too investigative journalism today." To fight these = many journalists subtly salting "objective" news "conservatives," Hersh says a shift is needed away with their own opinions. from "straight news" to the setup of "alternative Mr. Agnew, in several speeches a few years ago, investigative press." Furthermore, the FIJ points especially urged professionally edited newspapers to at least one major chain that has already in­ of this Nation - regardless of their shade of opinion tegrated the use of "precision journalism" for - to confine editorial comments to the editorial "long-range investigative stories" on topics like page, while assigning straight news to its rightful Third World commodity cartelization, police crime and separate place in news columns. and corruption, and the forecasting of terrorism. Along comes the so-called Fund for Investigative So, the question - as it was in Agnew's era and as Journalism, however, with the type of reporting it is now - remains : Have the media tossed out that the former Vice President - and no doubt objectivity and used the news to propagandize for millions of America{1s- should find objectionable. liberalism? According to writer Fay Sober, the FIJ - backed We have not seen any attempt by some of the big by such luminaries as journalists Jack Anderson newspapers such as the Wa shington Post to I and Seymour Hersh - is promoting something demonstrate that Agnew isn't at least still basically called "precision journalism." The idea behind this correct. And the activities of groups like the FIJ "new trend," says Sober, is to make "objective don't remove any doubts, either.

PRESS 1 water. when he helped compile a widely discredited "ex­ IRE At Its End pos,e " series on Goldwater during the Senator's 1964 In the past two weeks. Greene took over as IRE's "in­ presidential bid. terim president" after the expulsion of agent Ron Koziol, Green's anti-crime-and-corruption career encom­ who headed the IRE and participated in the Arizona pro­ passes a broader range of McCarthy-era witchhunt and ject until he was publicly exposed by the Chicago Daily watergate activity - including service on the u.S. News as an FBI operative in the press. In his capacity as Senate Select Committee on Improper Activities in the acting IRE chief, Greene indicated that the IRE "team" Labor-Management Field (the McClellan Committee), strategy might now be scrapped. "Basic morality (sic) is at the personal request of Robert F. Kennedy, in 1957. the real way to prevent another (Bolles) murder ...a task Greene's role on the McClellan committee was to target force like this one should rarely be used." said Green. Teamsters in New York City for "corruption" charges. In reality. IPS is abandoning its IRE creation, and the Greene testified as an "expert witness on organized group is not likely to get a second chance at exercising its crime" before a number of government witchhunting version of basic morality. Most of its legitimate funders committees as well. before launching his career at Ne ws­ in the press and media have cut off funding since publi­ day with a Pulitzer Prize-winning "expose" of the Long cation of the series began. Even IPS payola is apparently Island Republican Party machine. His Long Island GOP finding few recipients willing to stake their journalistic watergating resulted in indictments and resignations of careers on the Arizona smears. IPS and its chief Marcus several party officials. Raskin, however. are still at large.

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