10 Top Robber Barons

The financial crisis has unveiled a new set of public villains—corrupt corporate capitalists who leveraged their connections in government for their own personal profit. During the Clinton and Bush administrations, many of these schemers were worshiped as geniuses, heroes or icons of American progress. But today we know these opportunists for what they are: Deregulatory hacks hellbent on making a profit at any cost. Without further ado, here are the 10 most corrupt capitalists in the US economy.

1. Robert Rubin

Where to start with a man like Robert Rubin? A Goldman Sachs chairman who wormed his way into the Treasury Secretary post under President Bill Clinton, Rubin presided over one of the most radical deregulatory eras in the history of finance. Rubin's influence within the Democratic Party marked the final stage in the Democrats' transformation from the concerned citizens who fought Wall Street and won during the 1930s to a coalition of Republican-lite financial elites.

Rubin's most stunning deregulatory accomplishment in office was also his greatest act of corruption. Rubin helped repeal Glass-Steagall, the Depression-era law that banned economically essential banks from gambling with taxpayer money in the securities markets. In 1998, Citibank inked a merger with the Travelers Insurance group. The deal was illegal under Glass-Steagall, but with Rubin's help, the law was repealed in 1999, and the Citi-Travelers merger approved, creating too-big-to-fail behemoth Citigroup.

That same year, Rubin left the government to work for Citi, where he made $120 million as the company piled up risk after crazy risk. In 2008, the company collapsed spectacularly, necessitating a $45 billion direct government bailout, and hundreds of billions more in other government guarantees. Rubin is now attempting to rebuild his disgraced public image by warning about the dangers of government spending and Social Security. Bob, if you're worried about the deficit, the problem isn't old people trying to get by, it's corrupt bankers running amok.

2. Alan Greenspan

The officially apolitical, independent Federal Reserve chairman backed all of Rubin's favorite deregulatory plans, and helped crush an effort by Brooksley Born to regulate derivatives in 1998, after the hedge fund Long-Term Capital Management went bust. By the time Greenspan left office in 2006, the derivatives market had ballooned into a multi-trillion dollar casino, and Greenspan wanted his cut. He took a job with bond kings PIMCO and then with the hedge fund Paulson & Co.—yeah, that Paulson and Co., the one that colluded with Goldman Sachs to sabotage the company's own clients with unregulated derivatives.

Incidentally, this isn't the first time Greenspan has been a close associate of alleged fraudsters. Back in the 1980s, Greenspan went to bat for politically connected Savings & Loan titan Charles Keating, urging regulators to exempt his bank from a key rule. Keating later went to jail for fraud, after, among other things, putting out a hit on regulator William Black. ("Get Black – kill him dead.") Nice friends you've got, Alan.

3. Larry Summers

During the 1990s, Larry Summers was a top Treasury official tasked with overseeing the economic rehabilitation of Russia after the fall of the Soviet Union. This project, was, of course, a complete disaster that resulted in decades of horrific poverty. But that didn't stop top advisers to the program, notably Harvard economist Andrei Shleifer, from getting massively rich by investing his own money in Russian projects while advising both the Treasury and the Russian government. This is called "fraud," and a federal judge slapped both Shleifer and Harvard itself with hefty fines for their looting of the Russian economy. But somehow, after defrauding two governments while working for Summers, Shleifer managed to keep his job at Harvard, even after courts ruled against him.

That's because after the Clinton administration, Summers became president of Harvard, where he protected Shleifer. This wasn't the only crazy thing Summers did at Harvard—he also ran the school like a giant hedge fund, which went very well until markets crashed in 2008. By then, of course, Summers had left Harvard for a real hedge fund, D.E. Shaw, where he raked in $5.2 million working part-time. The next year, he joined the the Obama administration as the president's top economic adviser. Interestingly, the Wall Street reform bill currently circulating through Congress essentially leaves hedge funds untouched.

4. Phil and Wendy Gramm

Summers, Rubin and Greenspan weren't the only people who thought it was a good idea to let banks gamble in the derivatives casinos. In 2000, Republican Senator from Texas Phil Gramm pushed through the Commodity Futures Modernization Act, which not only banned federal regulation of these toxic poker chips, it also banned states from enforcing anti-gambling laws against derivatives trading. The bill was lobbied for heavily by energy/finance hybrid Enron, which would later implode under fraudulent derivatives trades. In 2000, when Phil Gramm pushed the bill through, his wife Wendy Gramm was serving on Enron's board of directors, where she made millions before the company went belly-up.

When Phil Gramm left the Senate, he took a job peddling political influence at Swiss banking giant UBS as vice chairman. Since Gramm's arrival, UBS has been embroiled in just about every scandal you can think of, from securities fraud to tax fraud to diamond smuggling. Interestingly, both UBS shareholders and their executives have gotten off rather lightly for these acts. The only person jailed thus far has been the tax fraud whistleblower. Looks like Phil's earning his keep.

5. Jamie Dimon

J.P. Morgan Chase CEO Jamie Dimon has done a lot of scummy things as head of one of the world's most powerful banks, but his most grotesque act of corruption actually took place at the Federal Reserve. At each of the Fed's 12 regional offices, the board of directors is staffed by officials from the region's top banks. So while it's certainly galling that the CEO of J.P. Morgan would be on the board of the New York Fed, one of J.P. Morgan's regulators, it's not all that uncommon.

But it is quite uncommon for a banker to be negotiating a bailout package for his bank with the New York Fed, while simultaneously serving on the New York Fed board. That's what happened in March 2008, when J.P. Morgan agreed to buy up Bear Stearns, on the condition that the Fed kick in $29 billion to cushion the company from any losses. Dimon-- CEO of J.P. Morgan and board member of the New York Fed-- was negotiating with Timothy Geithner, who was president of the New York Fed-- about how much money the New York Fed was going to give J.P. Morgan. On Wall Street, that's called being a savvy businessman. Everywhere else, it's called a conflict of interest.

6. Stephen Friedman

The New York Fed is just full of corruption. Consider the case of Stephen Friedman (expertly presented by Greg Kaufmann for the Nation). As the financial crisis exploded in the fall of 2008, Friedman was serving both as chairman of the New York Fed and on the board of directors at Goldman Sachs. The Fed stepped in to prevent AIG from collapsing in September 2008, and by November, the New York Fed had decided to pay all of AIG's counterparties 100 cents on the dollar for AIG's bets—even though these companies would have taken dramatic losses in bankruptcy. The public wouldn't learn which banks received this money until March 2009, but Friedman bought 52,600 shares of Goldman stock in December 2008 and January 2009, more than doubling his holdings.

As it turns out, Goldman was the top beneficiary of the AIG bailout, to the tune of $12.9 billion. Friedman made millions on the Goldman stock purchase, and is yet to disclose what he knew about where the AIG money was going, or when he knew it. Either way, it's pretty bad—if he knew Goldman benefited from the bailout, then he belongs in jail. If he didn't know, then what exactly was he doing as chairman of the New York Fed, or on Goldman's board?

7. Robert Steel

Like better-known corruptocrats Robert Rubin and Henry Paulson, Steel joined the Treasury after spending several years as a top executive with Goldman Sachs. Steel joined the Treasury in 2006 as Under Secretary for Domestic Finance, and proceeded to do, well, nothing much until financial markets went into free-fall in 2008. When Wachovia ousted CEO Ken Thompson, the company named Steel as its new CEO. Steel promptly bought one million Wachovia shares to demonstrate his commitment to the firm, but by September, Wachovia was in dire straits. The FDIC wanted to put the company through receivership—shutting it down and wiping out its shareholders.

But Steel's buddies at Treasury and the Fed intervened, and instead of closing Wachovia, they arranged a merger with Wells Fargo at $7 a share—saving Steel himself $7 million. He now serves on Wells Fargo's board of directors.

8. Henry Paulson

His time at Goldman Sachs made Henry Paulson one of the richest men in the world. Under Paulson's leadership, Goldman transformed from a private company ruled by client relationships into a public company operating as a giant global casino. As Treasury Secretary during the height of the financial crisis, Paulson personally approved a direct $10 billion capital injection into his former firm.

But even before that bailout, Paulson had been playing fast and loose with ethics rules. In June 2008, Paulson held a secret meeting in Moscow with Goldman's board of directors, where they discussed economic prognostications, market conditions and Treasury rescue plans. Not okay, Hank.

9. Warren Buffett

Warren Buffett used to be a reasonable guy, blasting the rich for waging "class warfare" against the rest of us and deriding derivatives as "financial weapons of mass destruction." These days, he's just another financier crony, lobbying Congress against Wall Street reform, and demanding a light touch on—get this—derivatives! Buffet even went so far as to buy the support of Sen. Ben Nelson, D-Nebraska, for a filibuster on reform. Buffett has also been an outspoken defender of Goldman Sachs against the recent SEC fraud allegations, allegations that stem from fancy products called "synthetic collateralized debt obligations"—the financial weapons of mass destruction Buffett once criticized.

See, it just so happens that both Buffet's reputation and his bottom line are tied to an investment he made in Goldman Sachs in 2008, when he put $10 billion of his money into the bank. Buffett has acknowledged that he only made the deal because he believed Goldman would be bailed out by the U.S. government. Which, in fact, turned out to be the case, multiple times. When the government rescued AIG, the $12.9 billion it funneled to Goldman was to cover derivatives bets Goldman had placed with the mega-insurer. Buffett was right about derivatives—they are WMD so far as the real economy is concerned. But they've enabled Warren Buffett to get even richer with taxpayer help, and now he's fighting to make sure we don't shut down his own casino.

10.  Goldman Sachs
No company exemplifies the revolving door between Wall Street and Washington more than Goldman Sachs. The four people on this list are some of the worst offenders, but Goldman's D.C. army has includes many other top officials in this administration and the last.

White House: 
 Joshua Bolton, chief of staff for George W. Bush, was a Goldman man

Regulators:
Current New York Fed President William Dudley is a Goldman man

Current Commodity Futures Trading Commission Chairman Gary Gensler has been a responsible regulator under Obama, but he was a deregulatory hawk during the Clinton years, and worked at Goldman for nearly two decades before that.

A top aide to Timothy Geithner, Gene Sperling, is a Goldman man

Current Treasury Undersecretary Robert Hormats is a Goldman man

Current Treasury Chief of Staff Mark Patterson is a former Goldman lobbyist

Former SEC Chairman Arthur Levitt is now a Goldman adviser

Neel Kashkari, Henry Paulson's deputy on TARP, was a Goldman man

COO of the SEC Enforcement Division Adam Storch is a Goldman man

Congress:
Former Sen. John Corzine, D-N.J., was Goldman's CEO before Henry Paulson

Rep. Jim Himes, D-Conn., was a Goldman Vice President before he ran for Congress

Former House Minority Leader Dick Gephardt, D-Mo., now lobbies for Goldman

And the list goes on.

Zach Carter/AlterNet

The Grim Picture Of Obama's Middle East

By Noam Chomsky

A CNN headline, reporting Obama's plans for his June 4 Cairo address, reads 'Obama looks to reach the soul of the Muslim world.' Perhaps that captures his intent, but more significant is the content hidden in the rhetorical stance, or more accurately, omitted.

Keeping just to Israel-Palestine -- there was nothing substantive about anything else -- Obama called on Arabs and Israelis not to 'point fingers' at each other or to 'see this conflict only from one side or the other.'

There is, however, a third side, that of the United States, which has played a decisive role in sustaining the current conflict. Obama gave no indication that its role should change or even be considered.

Those familiar with the history will rationally conclude, then, that Obama will continue in the path of unilateral US rejectionism.

Obama once again praised the Arab Peace Initiative, saying only that Arabs should see it as 'an important beginning, but not the end of their responsibilities.' How should the Obama administration see it?

Obama and his advisers are surely aware that the Initiative reiterates the long-standing international consensus calling for a two-state settlement on the international (pre-June '67) border, perhaps with 'minor and mutual modifications,' to borrow US government usage before it departed sharply from world opinion in the 1970s, vetoing a Security Council resolution backed by the Arab 'confrontation states' (Egypt, Iran, Syria), and tacitly by the PLO, with the same essential content as the Arab Peace Initiative except that the latter goes beyond by calling on Arab states to normalize relations with Israel in the context of this political settlement.

Obama has called on the Arab states to proceed with normalization, studiously ignoring, however, the crucial political settlement that is its precondition. The Initiative cannot be a 'beginning' if the US continues to refuse to accept its core principles, even to acknowledge them.

In the background is the Obama administration's goal, enunciated most clearly by Senator John Kerry, chair of the Senate Foreign Relations Committee, to forge an alliance of Israel and the 'moderate' Arab states against Iran. The term 'moderate' has nothing to do with the character of the state, but rather signals its willingness to conform to US demands.

What is Israel to do in return for Arab steps to normalize relations? The strongest position so far enunciated by the Obama administration is that Israel should conform to Phase I of the 2003 Road Map, which states: 'Israel freezes all settlement activity (including natural growth of settlements).' All sides claim to accept the Road Map, overlooking the fact that Israel instantly added 14 reservations that render it inoperable.

Overlooked in the debate over settlements is that even if Israel were to accept Phase I of the Road Map, that would leave in place the entire settlement project that has already been developed, with decisive US support, to ensure that Israel will take over the valuable land within the illegal 'separation wall' (including the primary water supplies of the region) as well as the Jordan Valley, thus imprisoning what is left, which is being broken up into cantons by settlement/infrastructure salients extending far to the East.

Unmentioned as well is that Israel is taking over Greater Jerusalem, the site of its major current development programs, displacing many Arabs, so that what remains to Palestinians will be separated from the center of their cultural, economic, and sociopolitical life.

Also unmentioned is that all of this is in violation of international law, as conceded by the government of Israel after the 1967 conquest, and reaffirmed by Security Council resolutions and the International Court of Justice. Also unmentioned are Israel's successful operations since 1991 to separate the West Bank from Gaza, since turned into a prison where survival is barely possible, further undermining the hopes for a viable Palestinian state.

It is worth remembering that there has been one break in US-Israeli rejectionism. President Clinton recognized that the terms he had offered at the failed 2000 Camp David meetings were not acceptable to any Palestinians, and in December, proposed his 'parameters,' vague but more forthcoming.

He then announced that both sides had accepted the parameters, though both had reservations. Israeli and Palestinian negotiators met in Taba, Egypt to iron out the differences, and made considerable progress.

A full resolution could have been reached in a few more days, they announced in their final joint press conference.

But Israel called off the negotiations prematurely, and they have not been formally resumed. The single exception indicates that if an American president is willing to tolerate a meaningful diplomatic settlement, it can very likely be reached.

It is also worth remembering that the Bush I administration went a bit beyond words in objecting to illegal Israeli settlement projects, namely, by withholding US economic support for them.

In contrast, Obama administration officials stated that such measures are 'not under discussion' and that any pressures on Israel to conform to the Road Map will be 'largely symbolic,' so the New York Times reported (Helene Cooper, June 1).

There is more to say, but it does not relieve the grim picture that Obama has been painting, with a few extra touches in his widely-heralded address to the Muslim World in Cairo on June 4.




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True Colours Of The Nuclear Deal

(Okay, you don't agree with me. So here's Dr PK Iyengar, Former Chairman of the Atomic Energy Commission - midwife (nay one of the fathers of our indegenous nuclear programme) and known opponent of Manmohan Singh's sell-out to the US making the same point. And if you think India has made a breakthrough deal with France - bypassing the US - you've got another thing coming. But more of that tomorrow)

 

The US House of Representatives has passed a bill (H. R. 7081) that approves the 123 Agreement, but which is contradictory to the assurance given by the Prime Minister to the nation. An identical version is before the US Senate for voting. Even as late as 26 September 2008, the Prime Minster was seeking an agreement that would ‘satisfy India’. This has not come to pass, and it will be interesting to see how the Indian government and the Indian media will ‘spin’ this into a victory for India. The Indian side is supposed to have been unhappy with the language. The fact is that one is not worried about the language, but the content and compulsions of the Bill.

Why is the House bill not satisfactory? Even the title of the Bill, ‘United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act’, makes it clear that they seek to press their non-proliferation agenda. The Bill makes a number of things explicitly clear, and reveals the true colours of the nuclear deal.

(1) The 123 Agreement is subject to the provisions of the Hyde Act and the Atomic Energy Act, and does not supersede them.

This is said, in so many words, twice in the Bill. Section 101 (page 3, lines 16-21) says that: “The Agreement shall be subject to the provisions of the Atomic Energy Act of 1954, the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, and any other applicable United States law.” Section 102 (page 6, lines 8-12) reiterates that: “Nothing in the Agreement shall be construed to supersede the legal requirements of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 or the Atomic Energy Act of 1954.”

Therefore there is now no question of differences in the ‘interpretation’ of the 123 Agreement. Irrespective of what we think we are bound by, the Americans have made it abundantly clear that they are bound by the Hyde Act and the Atomic Energy Act, and the 123 Agreement does not supersede either of them. If we conduct a test it is now abundantly clear that, as per the provisions of the Hyde Act and the Atomic Energy Act, it is the end of the nuclear deal.

(2) In the event of a disruption of fuel supply from the US, the Americans will not help arrange for fuel from another country.

Article 5(b-iv) of the 123 Agreement says that in the event of fuel disruption the US will help India get fuel from ‘friendly supplier countries’. But it seems that the Congress is having none of this. Section 102 (page 5, lines 4-12) of the Bill explicitly states that in the event of fuel disruption, not only will the US not help arrange for fuel from other countries, but it will also “seek to prevent the transfer to India of nuclear equipment, materials, or technology from other participating governments in the Nuclear Suppliers Group (NSG) or from any other source.” Since this sentence is not in the 123 Agreement, the Indian government will probably claim that we are not bound by it. However, the simple reality is that if there is a disruption of fuel from America, for whatever reason, the Americans will work hard to ensure that we do not get it from any other source.

(3) There will be no transfer of enrichment technology, and even permission for reprocessing imported fuel may be denied.

This is the most disturbing clause in the Bill. Sec. 204 of the Bill (page 14, lines 11-19) says explicitly that before the 123 Agreement enters into force (according to Article 16), the President has to certify that the US will work with NSG countries to “agree to further restrict the transfers of equipment and technology related to the enrichment of uranium and reprocessing of spent fuel”. So, one of the major advantages we were expecting from the NSG waiver and the 123 Agreement will not be forthcoming. But this Bill goes even further. Section 201 makes it very clear that any future proposal for reprocessing needs explicit approval from the US Congress, and the Congress retains the right to refuse (page 13, lines 1-4). This is a new twist, and extremely dangerous, because it leaves us completely at the mercy of the Congress. The same section also says that the US will pursue efforts with other countries to ensure that reprocessing of fuel from those countries will also be governed by ‘similar arrangements and procedures’.

This seems to suggest that the US would even like the existing arrangements with Russia for the Kudankulam reactors to be modified along the proposed lines. The same would also apply to any other supplier. It is surprising that in spite of our being a ‘strategic partner’, the US wants to restrain our fuel-cycle developments. This shows, again, that India is not being treated as an equal, in spite of the fact that for decades India has developed reprocessing and enrichment technology on its own, and produced plutonium for fast-breeder reactors as well as enriched uranium for the submarine reactor.

 These explicit statements in the House Bill only reaffirm what many of us have been saying for a long time. The 123 Agreement does not supersede, and is constrained by, the Hyde Act and the Atomic Energy Act. The House Bill has added new constraints. The entire Indo-US nuclear deal, which must now be taken to comprise of the Congress Bill, the 123 Agreement and the Hyde Act, is in contradiction to the July 2005 Joint Statement, because it doesn’t give India the status of an advanced nuclear state enjoying the same obligations and benefits as others. The nuclear deal does not allow cooperation in enrichment or reprocessing technology. The nuclear deal does not guarantee fuel supplies or a fuel reserve. In the event of a breach of the 123 Agreement, the US will not work with its allies to find alternate solutions – on the contrary it will pressure them to act against Indian interests. ‘Full cooperation’ in civil nuclear power is meaningless without assurances of fuel supply and technological cooperation in the fuel cycle.

 The House Bill also makes it clear that the US continues to impose on us the existing non-proliferation regime, and is not ready to recognize India as a nation with advanced nuclear technology. President Bush may have made many promises, but he will not be around to fulfill them. The reality is that the nuclear deal will not bring us as equals to the nuclear table. It will only serve to tighten the non-proliferation regime around us, make us dependent on the nuclear cartel for fuel, and completely cripple our strategic programme.

If the government’s intention is to import nuclear reactors and fuel, a simple bilateral agreement, which guarantees application of safeguards to the reactors, the fuel, and the end products of reprocessing the fuel, would have been sufficient and meaningful. There is already a precedent for this. In the nuclear deal with Russia, the irradiated fuel from the Kudankulam reactors can be reprocessed in India, provided this is done under IAEA safeguards. The plutonium that is produced in these reactors, when separated, will also attract IAEA safeguards. This is perfectly understandable, and India has accepted this. Why this should not be applicable in a more friendly agreement with the US, is incomprehensible.

 In 1974, when India was less developed and had a bleaker future, Indira Gandhi  was able to stand firm in supporting a strategic programme, in spite of ominous warnings of the retribution that would follow. It is ironic that in 2008, when India is in a much stronger position, economically and geopolitically, her own party is ready to betray her legacy and put on nuclear shackles, for a few dollars more.

Dr PK Iyengar

30 September 2008

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3-2-1-0: Indo-US Nuclear Deal Enters Home Stretch

By Roger Alexander

After a lot of drama and suspense, Congressman Howard Berman, a strong opponent of certain provisions of the Indo-Us Nuclear Deal, introduced a bill in the House of Representatives that is almost identical to the one that was overwhelmingly adopted by the Senate Committee on Foreign Relations.

However, his bill is said to have an extra paragraph that would require that the Senate and the House versions would have to be reconciled in a committee with the involvement of the administration as well, reports rediff.com.

 

Berman was also persuaded to drop killer amendments, including one on Iran that could have sabotaged the legislation following which he introduced the bill. He probably did so as the Hyde Act contains 17 references to Iran and directs India to have a foreign policy “congruent” to that of the US. That was why India voted twice against Iran in the IAEA.

(The Hyde Act requires an annual Presidential certification that India is in compliance with American law. And this so-called prescriptive clause is going to be a millstone around country’s neck for a long time to come.) 

As this blog reported yesterday (September 24) - ‘US Senate Committee Shafts India On Nuclear Deal’ - Berman provided considerable input into the Senate Committee’s legislation with his staffers and that Senate panel staffers worked in concert to craft a bill that could possibly be cloned in the House of Representatives for floor action. That has happened.

According to the rediff.com report, Berman's bill, though in all respects similar to the Senate Committee's Bill, contains an additional proviso that in the event of a nuclear test by India, which leads to the automatic termination of the deal, the presidential waiver of this termination could be limited. 

Under the Senate Committee's bill, as does many pieces of legislation dealing with such 123 Agreements and arms sales bills with America's allies, automatic termination of these agreements can be waived by the President on national security grounds and can be overridden by Congress only with a two-thirds majority.

Berman's Bill puts slightly more teeth into Congress with the presidential waiver having the authority for being overridden by the Congress with a simple majority and not two-thirds majority.

Now it is only a matter of time and procedure that the US Congress puts is imprimatur on the Indo-US 123 Agreement. It was being speculated that Congress might fail to endorse the 123 Agreement as House Committee on Foreign Relations chairman Howard L Berman, an alleged critic of the deal (even though he supported the passage of the Henry J Hyde Act) was refusing to play ball. But unlike in India, even the so-called maverick American politicians put the US' supreme national interest above personal preferences.

The Senate panel bill - the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act - though approved 19-2, forcefully stresses that “…nothing in the Agreement shall be construed to supersede the legal requirements of the Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 or the Atomic Energy Act of 1954.”

It also introduces a new element impinging on India's right to uninterrupted fuel supplies guaranteed by the 123 Agreement. In the approval legislation sent to the full Senate, the Committee makes it clear that “...it is the policy of the US to seek to prevent the transfer to India of nuclear equipment, materials, or technology from other participating governments in NSG or from any other source.”

This contingency would arise in the event nuclear transfers to India are suspended or terminated in the event of a test in pursuance of provisions of the US enabling law, the Hyde Act, the Atomic Energy Act or any other US law, it says.

Manmohan Singh and his minions have consistently trotted out the specious argument that India is only bound by the 123 Agreement and papered over the supposedly "extraneous provisions" in the Hyde Act, the US legislation that grants the US administration an exemption from the Atomic Energy Act to carry out nuclear trade with India, a non-signatory to the Nuclear Non-Proliferation Treaty (NPT).

Another provision in the SCFR's recommendation sets limits on the nuclear fuel provided to India as part of promised fuel reserve saying "any nuclear power reactor fuel reserve provided to the government of India in safeguarded civilian nuclear facilities should be commensurate with reasonable reactor operating requirements.”

This is a far cry from Manmohan Singh’s assurance to Parliament on a number of occasions that India had obtained fuel supply guarantees for the lifetime of the reactors that would be purchased from the US and that India would have the right to build up a strategic reserve.

As usual, the Indian government’s spinmeisters are trotting out arguments that have already been discredited. "I am not going to comment on internal process in the US. We have the right to test and they have the right to react," Foreign Secretary Shivshankar Menon told reporters in New York. The usual bluster – India has the right to test while others have the right to react – was once again the retort to pointed questions from the media.

Still, the US Congress is all set to pass the Indo-US 123 Agreement along with the attendant riders (maybe some more may be added by Representatives and Senators). But Manmohan Singh is all set to sign away India’s sovereign rights and shackle us permanently to the Hyde Act and its pernicious conditions, including India’s foreign policy being “congruent” to that of the US. He has indicated as much in the past few days.

ends

US Senate Committee Shafts India On Nuclear Deal

By Roger Alexander

Critics of the Indo-US Nuclear Deal in India – including eminent scientists who nurtured India’s nuclear programme during its infancy along with the entire opposition in Parliament - have consistently pointed that the deal is rooted in the Henry J Hyde Act and comes with many strings attached.

However, the government’s spinmeisters and their surrogates in the corporate media have continually claimed that the Hyde Act with its “prescriptive” clauses is only an “enabling legislation” that India can safely ignore for it is bound only by the 123 Agreement which is a legally binding international treaty.

Now that the US Senate Foreign Relations Committee has approved and forwarded a bill titled ‘The United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act' to the Senate floor for ratification, it has become abundantly clear that the pro-deal spinmeisters in India have their task cut out to prove that only the provisions of the 123 Agreement – and not the Hyde Act and other tough US laws - will determine Indo-US nuclear commerce and that everything else in the US’ “internal political process” are extraneous and not binding on India.

First and foremost, contrary to the spin being dealt out by Prime Minister Manmohan Singh and his minions in the Cabinet, the bureaucracy and the corporate media, the 123 Agreement’s conformity with the Hyde Act is iterated in the bill titled the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act states in sub-section (d) titled ‘Rule of Construction’: “(N)othing in the Agreement shall be construed to supersede the legal requirements of the Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 or the Atomic Energy Act of 1954.”

Indeed, the bill clearly states that when signed into law by President Bush, the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act has to be in strict conformity with the Hyde Act. Besides, in the event India tests an explosive devise, the US would not simply “discourage” other Nuclear Supplier Group (NSG) members to deny India nuclear equipment, materials and technology to India but work to “prevent” such transfers, reports Aziz Haniffa for rediff.com.

(Do link to Aziz Haniffa on rediff.com for his excellent Washington coverage of the Nuclear Deal – no Indian media outlet has been as comprehensive. This blog is greatly beholden to him and rediff.com for the coverage on this topic.)

If this is not good enough to make you sit up and look, senior Congressional sources told Haniffa that Congressman Howard Berman, chairman of the House Foreign Affairs Committee, also provided considerable input into the Senate Committee’s legislation with his staffers and that Senate panel staffers working in concert crafted a bill that could possibly be cloned in the House of representatives for floor action. (Berman is not obliged to call for hearings from the Bush Administration and can directly recommend to the House a bill that mirrors the Senate’s document.)

It will be recalled that Bremen, even though he reluctantly supported the passage of the Hyde Act, now wants append additional conditionalities – especially on fuel supply, weapons testing, and export of reprocessing technologies – to India.  

Now these are some of the many issues that the UPA’s spinmeisters have to grapple with to explain why the Deal is not a sell-out:

In Section 101, titled Approval of Agreement, and sub-section (b) with regard to Applicability of Atomic Energy Act of 1954, Hyde Act, and other provisions of Law, the legislation approved by the Committee says, “The Agreement shall be subject to the provisions of the Atomic Energy Act of 1954, the Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, and any other applicable United States law.”

In Section 102 of the bill titled, Declarations of Policy; Certification Requirement; Rule of Construction, and the sub-section which dealt with Declarations of Policy Relating to Meaning and Legal Effect of Agreement, the legislation clearly lays out: “Congress declares that it is the understanding of the United States that the provisions of the United States-India Agreement for Cooperation on Peaceful Uses of Nuclear Energy have the meanings conveyed in the authoritative representations provided by the President and his representatives to the Congress and its committees prior to September 20, 2008, regarding the meaning and legal effect of the Agreement.”

Indeed, the bill clarifies that the commitments regarding fuel supplies are political and not legally binding. It will be recalled that senior Bush Administration officials, led by Undersecretary of State for Political Affairs William Burns, under intense questioning by the Acting Chair of the panel Senator Chris Dodd and others whether the 123 Agreement commitment regarding fuel supplies were only political commitments and not legally binding in the event that India tested, testified before the Committee on September 18 acknowledged that they were the former.

That is not all. Subsection (b) of Section 102, titled Declarations of Policy Relating to Transfer of Nuclear Equipment, Materials, and Technology to India says: “Pursuant to section 103(a)(6) of the Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, in the event that nuclear transfers to India are suspended or terminated pursuant to title I of such Act, the Atomic Energy Act of 1954, or any other United States law, it is the policy of the United States to seek to prevent the transfer to India of nuclear equipment, materials, or technology from other participating governments in the Nuclear Suppliers Group or from any other source.” (Emphasis added)

Note, the word “prevent” has replaced the earlier “discourage,” adding on a more punitive component in the case of India testing a nuclear devise.

The conditionalities do not end here. Sub-section (2) also eliminates India being the beneficiary of any additional material, when it states: “(P)ursuant to section 103(b)(10) of the Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, any nuclear power reactor fuel reserve provided to the Government of India in safeguarded civilian nuclear facilities should be commensurate with reasonable reactor operating requirements.”

The Americans are convinced that Manmohan Singh - blinded as he is by the legacy spiel to "unshackle" India from a "nuclear aparthied regime" and his specious "lasting legacy bit - will play along and sign on the dotted line. Congressman Gary Ackerman, (D, New York), who chairs the House Foreign Affairs Subcommittee on South Asia, while acknowledging that the were some changes from the original 123 Agreement and the Hyde Act, told Haniffa that all of this was nothing serious but just “a political issue.” 

He went on to argue: “The issue of testing is there - that the deal is off if there’s testing. So, then you can have a challenge from the Left politically in India, saying that India gave in to this or that or the other thing. But that’s a political question because India says it’s not going to test anyway…So, if it’s not going to test, it’s only a psychological barrier…My view is get the darn thing done and we’ll worry about the politics there, the politics here later. That’s what politicking is - who gets blamed, who gets the credit…Let's get it done. That the main issue - keep the eye on the ball. That’s the prize.”

So there you have it. Either India has to accept the ‘United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act’ in the manner in which the Foreign Relations Committee it has presented to the full Senate, and will most probably be akin to the House of Representatives’ resolution given Berman’s “assistance” to the Foreign Relations Committee.

Indeed, one senior Administration source told Haniffa, if India rejects the Senate Committee bill, “It wouldn't be just looking a gift horse in the mouth - particularly when timing is of the essence - it will be kicking it in the mouth.” Meaning, India can leave it or lump it.

Going by his statements during his current visit to the US, Prime Minister Manmohan Singh seems to have already made up his mind to lump it. But will his government and party be able to weather the political tsunami - that will certainly castigate him for doing a Mir Jaffar (a sell-out) – that will follow in the wake of his reckless action if he does indeed and go ahead and sign the 123 Agreement without taking Parliament into confidence, as he solemnly promised in the Lok Sabha (whiile tabling his reply to the trust mothion moved by him) on June 23?

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More Secrets Of Manmohan Sellout To US Revealed

By Roger Alexander

The entire Indo-US Nuclear Deal has been shrouded in secrecy. A number of these have already been unravelled with the Presidential Determination submitted to the US Congress making public the US interpretation of the 123 Agreement. 

A series of reports have appeared suggesting that the assurances made by the prime minister to Parliament and the country on the India-US nuclear deal have been violated. Worse, there are reports that suggest that crucial information was concealed regarding details of the deal.

It appears that there is much more about this deal that the UPA government is hiding from Parliament. Large purchases from US based nuclear power companies have already been committed in a clandestine manner.

Indeed, the UPA Government seems to have already decided to place orders with the American nuclear power companies for supplying a large number of nuclear reactors without any debate in the country regarding the cost of such imported reactors, or the safety of their designs.

So now we know why the monsoon session of Parliament has been shifted to the beginning of winter despite the fact that Prime Minister Manmohan Singh had given and assurance that he would come back to Parliament after getting the clearance from the IAEA and the Nuclear Suppliers Group.

Parliament has been convened only on October 17, well after the nuclear deal will be sealed in Washington.

Despite making noises that India do nuclear commerce with France and Russia if the US Congress failed to pass the 123 agreement by September 25, it is clear the government wants to favour US companies.

In fact, the Indian government has already provided the US with a “strong letter of intent” to buy from US firms reactors with at least 10,000 MW worth of power generation capacity and committed two sites to US firms. 

These disclosures were made by under secretary of state for political affairs William Burns to the Senate Foreign Relations Committee during the special hearing on the 123 agreement on Friday.

“The administration has taken a number of steps to ensure the US nuclear industry will not suffer any competitive disadvantages during the 123 Agreement review process,” he revealed. 

Each 1000/1,100 MW reactor from US companies like Westinghouse or GE, by latest estimates, will cost at least $7 billion each. This translates to approximately Rs 28 crore per MW, which is 7 to 8 times the capital cost of coal fired thermal power plants of equivalent capacity.

The 10,000 MW figure stated by Burns implies India putting in around Rs. 280,000 crore of Indian money to bail out the US nuclear industry that has failed to secure any domestic order for the last 30 years.

More importantly, India also has committed to adhere to the Convention on Supplementary Compensation for Nuclear Damage. “Adherence to this international liability regime by the Indian government is an important step in ensuring US nuclear firms are competing on a level-playing field with other international competitors,” explained Burns. 

The US government, unlike other countries, does not provide liability coverage for nuclear companies which expose US firms to unlimited liability in US courts. With India signing the convention, US firms would be protected as the convention provides supplementary international funds to pay victims and keeps liability in the country where the accident takes place. 

This means that in the case of any Bhopal type disaster, the Indian Government will take over all liabilities from the suppliers and the operators. The suppliers of nuclear reactors have demanded a no-liability regime for supplying equipment, which the UPA Government seems to have accepted without any public debate.

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