February 13, 2002
The Axis of No Access
By MAUREEN DOWD
ASHINGTON -- Back in the 60's, my brother would occasionally pretend to be a spy to impress girls.

It was pretty silly.

But nothing compared with the vice president pretending to be a Secret Agent Man.

Dick Cheney has taken his cloak-and-dagger routine to absurd extremes. "There's a man who leads a life of danger. . . . To everyone he meets he stays a stranger."

We are not allowed to know where Secret Agent Man sleeps. (Sometimes he'll entertain people at his residence, and then leave for his "secure, undisclosed location" at the same time his guests leave for unsecure, disclosed locations.) We are not allowed to know whom he talks to in the White House. We are not allowed to hear how he shapes our energy policy or our war plans. We may not even be allowed to cover his trip to the Middle East to prepare our allies for a campaign against Saddam.

Mr. Cheney does pop up for Sunday shows, fund-raisers and the occasional soiree. He played host at a book party at his house Monday night for his chief of staff, Scooter Libby, who has come out with a paperback of an old novel about — what else? — shadowy political intrigue. Vice, as the president called him on Tom Brokaw's White House tour, stood under a blue painting in his red tie and gray suit, talking in a low voice out of the side of his mouth, which adds to the conspiratorial aura.

Outside, guests saw an ominous sign that read "Threat Condition Bravo."

The vice president does give up some information. He has been happy to fill in reporters on how amazing the Bush team was on 9/11 and after. And the Bush administration authorized the release to Congress of thousands of e-mails by Clinton officials, including ones sent to Al Gore.

But he prefers to operate under deep cover. The Bushes' attitude toward disclosure is embodied in Mr. Cheney: We know best. Leave it to us. In their view, the American public has been cleared for very little information about the American government.

In a speech Monday to roofing contractors, 41 grumbled about the national press, "which I now confess I hate."

And 43 spirited his Texas gubernatorial records — which would include contacts with Enron — into his father's presidential library, where reporters will have to wait months, or years, to get at them.

Just as Mr. Cheney thinks he is entitled to cook up our energy policy behind closed doors with his oil and gas buddies and Republican donors, His office had been considering treating Air Force Two like a corporate jet. Just wave goodbye to the White House press corps at Andrews and fly off to 10 Middle East countries for clandestine talks.

Should we be countering the Axis of Evil with the Axis of No Access? Should our leaders leave a free press at home when they go to talk to regimes that do not countenance a free press?

Aren't we supposed to be influencing the Saudis and other Middle Eastern countries in the direction of honesty and transparency? Instead, the vice president emulates his Saudi friends — operating with high-handed secrecy, plotting with cronies to develop a petrostate, and restricting the press — just as he did during Desert Storm.

Cheney staffers came up with numerous explanations why it may be difficult to take the press — all of them silly. They're not the president: they don't have two planes. They don't have the resources. They don't have the staff. They're going to a very insecure region.

On CNN last night, the conservative Bob Novak admitted the idea was unprecedented, but explained the Cheney-think.

"You do remember the Spiro Agnew and the Dan Quayle trips were circuses," he said. "Dick Cheney is going on a 10-day trip to the Middle East and his staff is considering whether they really want to take any press along. No members of the media whatsoever, to avoid all these made-up stories. . . . They may say, `Hey, this is a business trip.' "

But that is precisely the problem. The American government is not a business. And the vice president's diplomacy in the Middle East is not a business trip.

Dick Cheney may truly be the most powerful vice president in the history of the universe. Everything he does is the public's business.



Copyright 2002 The New York Times Company | Privacy Information

Gunfire, Explosions Heard at U.S. Afghan Base
Wed Feb 13,11:47 AM ET

KANDAHAR, Afghanistan (Reuters) - Heavy gunfire and a number of explosions were heard at the U.S. military base in the southern Afghan city of Kandahar Wednesday, a witness said.

Photos

Reuters Photo


Reuters Television cameraman Taras Protsyuk said the shooting at Kandahar airport lasted around half an hour and was intense for a period of about five minutes.

"I've seen the tracers and there were some light explosions like hand grenades," he said. "Americans appeared to be firing at a point in the hills to the west side of the airbase."

Operations in Afghanistan (news - web sites) by the U.S. military and its allies to mop up remnants of the vanquished Taliban and the al Qaeda network of fugitive militant Osama bin Laden (news - web sites) are based at Kandahar airport.

"We have no comment at the moment about the present situation but one thing I can say is this is not an exercise," said Maj. Chris LeMay, senior press officer for the more than 400-strong Canadian army contingent at the base.

There are around 4,100 military personnel based at Kandahar airport, with the majority from the United States.

Protsyuk said the heaviest firing was on the airport's western perimeter around half a mile from the terminal building, but he was unsure whether the explosions occurred inside or outside the fence.

All lights at the base were turned off except those illuminating a high-security jail holding Taliban and al Qaeda prisoners, while two helicopters circled hills just outside the base, he said.

Last month, U.S. forces seized a cache of weapons under a building and in tunnels near the base a few days after up to 14 gunmen briefly fired toward U.S. positions with small arms.

No U.S. troops were hurt in the probing fire by the gunmen, who were armed with AK-47 assault rifles and used flares to illuminate U.S. Marine positions.

Kandahar was the last bastion of the Taliban, a movement that imposed a hard-line brand of Islam on Afghanistan until it was toppled by U.S. bombing and attacks by the opposition Northern Alliance late last year.

www.sfgate.com Return to regular view
You Don't Care About Enron
In Bush's America, it just doesn't pay to give a damn about flagrant political corruption
By Mark Morford, SF Gate Columnist
Wednesday, February 13, 2002
©2002 SF Gate

URL: http://www.sfgate.com/columnists/morford/




Of course you know they did it.

You know the whole pod of shivery Enron execs are all guilty as sin. You can see it in the folds of their chins, the beady black voids of their eyes, the way their horns twitch when they take the Fifth.

You can see it in the way Kenny Boy slumps in the chair looking like a deflated blow-up doll, mouth slightly agape, stunned and goosey, wondering how he let it all get away, as the congressmen tsk-tsk him and shake their heads and call him names.

There they all are, except for the one who committed suicide and gosh isn't that just the slightest bit telling, hiding and equivocating and lying at the Senate hearings like the Big Tobacco execs of yore, who stood up and raised their taloned fingers and swore before God that they really, really don't believe nicotine is in any way deadly except for the heart disease and the cancer and the rampant toxic death.

You know it's all true, mountains of incriminating shredded documentation and roughly $500 million hidden away in magic "fuzzy math" debt, hundreds of millions more shuffled off to non-existent "Star Wars" companies, gutted retirement accounts and ruined employees and Gucci suppositories in the executive washrooms and blatant gouging of California during the energy crisis. Just for starters.

Political back-scratching and toe-sucking and wallet-padding galore, the vast majority (but no, not all) of the scandal landing like a giant elephant-dropping on the Republican side of the aisle and do you hear that? That frantic shredding sound coming from Dick Cheney's office? That ain't Lynne's Gunslinger vibrator, people.

Indeed, this one goes all the way to the top. The Bush administration is so clearly embroiled in Enron's gleeful depravity it would be embarrassing and even downright comical to watch, say, Cheney's outward refusal to reveal all the political inbreeding and cigar-chompin' back-slapping that went on during the energy policy discussions, were it not so insulting and wrong.

Sure you probably feel some pity for all the disgruntled Enron employees whose financial futures are now ruined, the countless gullible stockholders sucked into the vortex and spit out like easy marks at a sidewalk shell-game, the American economy hobbled and wobbly and so clearly at the disposal of corrupt power-mongering CEOs it makes your soul wince.

Over 50 percent of Americans think the Enron debacle is very important to the country, more than double that of Whitewater, and yet it seems to be common knowledge that Ken Lay will get off with barely a scratch, he and his squad of flying monkeys will get nothing but a spanking and maybe a month in Michael Milken minimum-security prison, where the punishment consists of slightly restricted cellphone privileges and less dipping sauce for the kitten-kabobs and forced viewings of Lynne Cheney in a bikini (which actually is fairly brutal, come to think of it).

You know all this and yet you're not the slightest bit shocked anymore, maybe because you realize this is how corporate politics has always worked, this is the capitalist system's most hypocritical slap to any notion of fairness or justice you may harbor, people going to prison for years for selling small amounts of pot or for having underage gay sex but when multimillionaire Bush-buddy execs get busted with their entire bodies in the cookie jar, well, it's nothing a few high­priced lawyers can't quickly snuff out while helping to broker a six-figure book deal.

You may even sense how it's all connected, the war-that's-not-really-a-war and our rabid oil dependency and the 17 pro-Enron provisions in Cheney's Energy Policy and all those former Enron execs now cruising in high-level posts in the Bush administration. Unworkable multibillion-dollar missile defense plans and National Sanctity of Life Day and PretzelGate. See the thread? Of course you do.

Call it the New American Ennui, caused by one part disingenuous warmongering, one part fervent oil-grubbing, one part residual Clinton-era moral slimeballing, and one huge part Bush WASP mafia election-rigging and pro-corporate anti-everything-else reshuffling. Makes you all numb inside.

Of course Bush will not be impeached for his obvious puppeteering role. Of course Cheney is hunkering down in the bunker, shredding as fast as possible, denying everything. Of course there will be no sweeping reforms or serious restrictions placed on corporate funding of political candidates.

Nor will there be limits set on how many execs an undeserving president can appoint from one company, no limits on how much corporate backstabbing one country should endure. Remember the S&L scandal? The one that cost taxpayers billions and that we're still paying for and will be for years to come? That's OK. No one else does either.

There will be harsh words and furrowed brows and maybe a few laws passed. There will be wrists slapped and apologies made and big dopey shrugs from the Shrubster as he leverages his baffling and war-drunk positive approval rating to dodge the scandal like a slippery hog in a Texas pen.

You don't care about the Enron debacle because if you did, you'd just be disappointed again, hurt and betrayed as justice is thwarted and snuffed out like a candle, leaving you with the urge, yet again, to yank all your money out of the bank and take off for the woods with a case of Grey Goose and some really good kalamata olives and a Leatherman tool and a tent and Auden's collected poems and not come back for a year.


But that just wouldn't be very patriotic at all.


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Thoughts for the author? Email him.
Mark Morford's Notes & Errata column appears every Wednesday and Friday on SF Gate, just like a special magic bunny of love. He also writes the Morning Fix, a deeply skewed daily email column and newsletter. Subscribe at sfgate.com/newsletters/

©2002 SF Gate

As Pentagon Plays Defense, Flag-Waving Is Questioned


By Howard Kurtz
Washington Post Staff Writer
Tuesday, February 12, 2002; 8:36 AM


The following could be dangerous.

Is there such a thing as an excess of patriotism?

Or, more precisely, does there come a point when all the flag-waving and 9-11 ceremonies lose their meaning?

Time's Michael Elliott thinks so.

The temptation is to dismiss him as an America-bashing crank.

He insists he's not (although he admits to being an immigrant). Says admiringly that folks in Britain and France don't hang flags from their homes. He likes what the red-white-and-blue symbolizes: freedom and tolerance.

But, says Elliott, enough is enough.

(And he doesn't even mention Elton John's endless Philadelphia Freedom at the NBA All-Star Game!)

We suspect at least a few people, although probably a minority, might agree with him.

"Here's a confession: I winced during much of the Super Bowl show, larded with homages to the armed forces and heroes of September. Everyone sentient understands that in the aftermath of the terrorist attacks last year, an outpouring of patriotic zeal was natural, healthy and necessary.

"But nearly six months later, the flag seems to be even more visible. It wraps the administration's budget; it waves at us from the crawls of the 24-hour news networks; it's being hawked by street vendors in a hundred different pin designs. And if the initial TV coverage of the Olympics is a guide, Old Glory will be stenciled on every second snowdrift in Utah.

"Meanwhile, corporate America and Madison Avenue have found a new theme: Sept. 11 sells! Hence the ads that drip mawkishness like a melting candle (those Budweiser Clydesdales bowing before lower Manhattan) or, like the astonishingly crass Kenneth Cole glossy, somehow link the tragedy to soulful sex ('On September 12, fewer men spent the night on the couch. . . . ')

"The exploitation of patriotic sentiment for private gain is hardly new. But the attacks were a national tragedy, one that demands a quiet determination to remember those who died. Commercializing their sacrifices is a sure way of turning the ineffable into the merely ordinary – and making something ordinary is the first step to forgetting it."

Agree or not, Elliott's got an interesting point.

Pentagon Gets Defensive
Now, onto the war, with the Los Angeles Times reflecting the degree to which the Pentagon is on the defensive:

"Defense Secretary Donald H. Rumsfeld has asked for an investigation into allegations that a group of Afghans mistakenly taken prisoner by U.S. Special Forces troops last month was beaten and mistreated, but senior Pentagon officials said Monday that so far there was no evidence that such abuse took place.

"At a news conference at the Pentagon, officials also defended a CIA missile strike last week near Zhawar Kili in eastern Afghanistan amid reports that civilians there had been killed.

"The strike by a Hellfire missile from an unmanned Predator drone hit its intended target, the officials said. Those killed were 'not innocents,' said Rear Adm. John D. Stufflebeem, deputy director of operations for the Joint Chiefs of Staff.

"The reports are part of an increasing drumbeat of alleged misfires and mistakes by U.S. forces in Afghanistan. Pentagon officials say the situation in Afghanistan is becoming increasingly murky, with former Taliban and Al Qaeda fighters switching sides or seeking to blend into the general population."

The Washington Post examines the damage control: "At the top of the agenda when the White House public relations 'war room' convened for its morning meeting on Afghanistan yesterday were media reports that apparently innocent Afghan prisoners had been beaten by their U.S. military captors.

"Two responses were discussed: first, making sure that a full internal investigation of the beating report was conducted by the Pentagon; and second, reminding anyone who asked that a captured al Qaeda training manual had instructed those held prisoner to tell journalists that they had been beaten.

"The Afghan war, so easy to understand in its early, black and white days, when President Bush proclaimed that the world could be neatly divided into us and them, has lately taken on shades of gray.

"On top of a string of nagging reports of mistargeted bombs and dead civilians, two of the Pentagon's recent biggest triumphs – the killing of 21 terrorists and capture of 27 more in a commando raid north of Kandahar, and last weekend's firing of a Hellfire missile on a tall man who might have been Osama bin Laden – appear instead to have been tragedies. . . .

GOP Working to Scuttle Campaign Finance?
In the watch-what-they-do-not-what-they-say department, the New York Times has the White House being downright disingenuous:

"The White House is working through the Republican Party to scuttle campaign finance legislation before the House this week while protecting President Bush from any political fallout, advisers to Mr. Bush said today.

"With White House consent, the Republican National Committee is lobbying to defeat the Shays-Meehan bill, the campaign finance overhaul measure that would ban the large unlimited political donations known as soft money.

"An internal 'target list' compiled by the Republican Party identifies 33 Republicans who had previously voted for the bill when it was unlikely to become law. These members are seen as undecided about how to vote this time – and potentially available to back amendments that would ultimately weaken the legislation or kill it outright.

"'We need to ask them what they need for cover,' the internal document states, 'and try to support our amendments.' The party's effort came as the House Republican leadership mounted a similar drive to amend the bill."

But the Boston Globe says the reformers have the Big Mo:

"With newspaper ads proclaiming 'this time it counts' and corporate executives deriding what they termed political shakedowns under the current system, supporters of a bill to overhaul the nation's campaign finance laws girded yesterday for the start of a floor debate today, and opponents conceded they face an uphill fight.

"Senator John McCain, recuperating from surgery to remove a cancerous skin lesion, interrupted what was meant to be a week of convalescence to make an impassioned pitch for the House legislation, a version of which he pushed through the Senate last year.

"'Never try to predict, especially when you're talking about the future,' the Arizona Republican quipped, quoting Yogi Berra."

Sage advice – especially for journalists.

Poll Reflects Skepticism on Business Practices
The public is steamed about Enron – and believes its tactics aren't unusual, reports USA Today:

"Most Americans believe the management practices that brought down energy giant Enron are fairly common in business today, a new poll says. According to the USA TODAY/CNN/Gallup poll, half of adults say the practices of top Enron executives are the norm for at least some other large corporations. An additional one-fourth say they're the norm for most big companies.

"While the poll finds Americans don't find it unusual for Enron executives to have presented the public a false view of the firm's profitability, they aren't shrugging off the Enron saga. Fully 70% say they're following Enron developments at least somewhat closely, vs. 55% a month ago. . . .

"65% believe Enron executives did something illegal, unchanged from a poll taken two weeks ago.

"Almost two-thirds of Americans say the most important Enron-related issue is the loss by Enron's employees of jobs and retirement savings while top executives made off with millions. Far less important, the poll says, is Enron's buying of political influence or the near vaporization of a large corporation.

"82% believe Congress should investigate Enron's ties to members of the Bush administration. And 43% believe the administration is attempting to cover something up by its resistance to congressional demands for information."

Sounds like the public is En-gaged.

The Wall Street Journal digs up evidence that not all top Enron executives were as out to lunch as they claim:

"An internal Enron Corp. document indicates for the first time that former Chairman and Chief Executive Kenneth Lay had a direct role approving deals with at least one of the company's controversial executive-run partnerships.

"The document is a deal-approval sheet from June 2000 that appears to be signed by Mr. Lay, who is expected to appear before a Senate hearing Tuesday, for a transaction between Enron and the LJM2 Co-Investment LP. LJM2 was a partnership that was formed in 1999 by then Enron Chief Financial Officer Andrew Fastow, who also ran and partly owned the partnership."

Look for Lay to take the Fifth today.

But the Washington Times says the Enron saga is fizzling as a political scandal:

"The Senate's hearings into the collapse of Enron Corp. are causing such minimal political damage to the Bush administration that Democrats already are considering Plan B.

"'They're not partisan problems,' said Sen. Joseph I. Lieberman, Connecticut Democrat, as he advocated new laws yesterday to protect pensions. 'They're just employees whose hopes have been dashed.'

"Mr. Lieberman promised Senate hearings into the administration's role 'when we're ready,' but some Democrats acknowledge that the political aspect of the scandal has yet to gain traction. 'There's not too much sticking to the White House,' conceded a top Senate Democratic aide. 'When you have a president that's currently enjoying 80 percent approval ratings, you need to pick and choose your spots.'"

A Bouquet for Rubin
Forbes.com unloads on the New York Times's coverage of Robert Rubin's Enron connection. The Times story began: "Plenty of government officials retire to the private sector to make their fortunes. Plenty of business executives venture into politics seeking power and influence. Robert E. Rubin is doing both."

No applause from Forbes: "Just in time for Valentine's Day, The New York Times today delivered a remarkable front-page bouquet to Robert Rubin, in the form of an unusually generous assessment of the former Treasury secretary's attempted string-pulling on Enron's behalf.

"The Times has been a bulldog on the subject of Enron's unsuccessful attempts last fall to stave off collapse by seeking help from its friends in the Bush Administration. But Rubin's role had been oddly de-emphasized by the Paper of Record. Today, the Times finally turned the spotlight on Rubin--but the story amounted to a glowing profile of the former Clinton Administration official, wrapped around a gentle admonishment for his Enron involvement. And the Times seemed less concerned that Rubin had done anything wrong than that he had given aid and comfort to Republicans by making this a bipartisan scandal.

"When the news of Rubin's involvement first hit the morning newspapers on Jan. 12, The Washington Post headlined its story 'Rubin Asked Treasury About Aid to Enron,' and focused on Rubin's Nov. 8 call to senior Treasury Department official Peter Fisher. Rubin is chairman of the executive committee at Citigroup, which is a big Enron creditor. He asked Fisher to consider advising the bond-rating agencies against an immediate downgrade of Enron's debt. Fisher said that for him to intervene would not be a good idea, and Rubin backed down.

"The Times also reported the Rubin news on Jan. 12--but lower down in a story that led with Enron President Greg Whalley's own calls to Fisher. . . . Arguably, the big story on Jan. 12 was the involvement of Rubin, a prominent Democrat and a Wall Street icon. Yet the Times not only downplayed the news, it bent over backward to let Rubin off the hook, by emphasizing that he eventually agreed with Fisher that calls to the bond-rating agencies would be inappropriate."

Clintons Back in the News
For those Enron-weary souls yearning for the scandals of yore – say, the New York Post – there is hope this morning:

"The Clintons' White House gift scandal is set to reignite today as a congressional committee reveals new records showing dozens of presents that probers charge the couple concealed in their official disclosure report.

"A yearlong House investigation concludes the Clintons never revealed goodies like champagne, Ferragamo silk ties, hundreds of cigars, imported suits, Bulova and Citizen watches and Ming Dynasty jewelry given during their White House tenure.

"The report, the first and only formal review of the gift scandal that marked the end of the Clinton presidency and the start of Hillary Rodham Clinton's Senate career, includes hundreds of detailed records never before released. The investigation found:

"Bill and Hillary Clinton received scores of gifts that were never reported to the public because they were valued below $260 – the threshold level for listing gifts on federal disclosure forms.

"The Clintons may have deliberately undervalued 'many' gifts to avoid detection, and bagged many gifts in the month before Hillary Clinton became a senator, when such gift-taking is illegal."

Time for another special prosecutor?

Kinsley Resigns at Slate
The big news in cyberspace, meanwhile, is Michael Kinsley's resignation as editor of Slate. When the former New Republic editor and CNN commentator took the job six years ago, skeptics wondered why he'd want to move to Seattle to run a magazine that didn't exist on paper. Now that concern seems as dated as black and white TV. Kinsley's original conception, we recall, was to run long articles (the debut issue featured a 2,200-word essay by Nick Lemann) and post a new issue every week. That didn't last long. While Slate has its detractors, and has never made Bill Gates any money, the Microsoft magazine has certainly embedded itself in the Web culture. (Read about the Web's hostility to Kinsley and his venture back in 1996.)

Finally, the New Republic skewers the White House on abortion:

"When the Bush administration made fetuses eligible for a government health insurance program last week, provoking a predictable firestorm from abortion rights advocates, Health and Human Services Secretary Tommy G. Thompson tried to play dumb. 'What we are going to do is provide for low-income women to have prenatal care,' Thompson told the Los Angeles Times. 'How anybody can try and turn this into a pro-choice, pro-abortion argument, I don't understand.'

"But this time, at least, Thompson did not make a very convincing idiot. It's pretty obvious that the whole point of the insurance expansion was to start an argument about abortion--and to score some points with the political right. After all, if President Bush were simply interested in giving more low-income women prenatal care, he could have expanded the program's eligibility to pregnant women without ever mentioning the rights of a fetus.

"Come to think of it, if Bush were really serious about expanding prenatal coverage, he could have thrown a lot more money at the problem, too. Bush did neither. . . .

"The danger of opposing the Bush insurance expansion is that it will make abortion rights advocates seem like obstructionists who are insensitive to the needs of low-income women. This, in turn, could hurt their credibility when more important abortion controversies come along. On the other hand, letting this regulation stand seems unlikely to change the politics of abortion much. It would just make the anti-abortion crowd feel a little smug. And if that's the only cost of enacting decent public policy in this instance, it's one the rest of us can bear."


© 2002 The Washington Post Company

New York Review of Books
The Betrayal of Capitalism
By Felix G. Rohatyn
During my nearly four years as ambassador to France I frequently gave a speech I called "Popular Capitalism in America" to audiences throughout France. This is a subject of intense interest to the French and to most other Europeans, who envy us our high rates of growth and low unemployment but who often believe that the price we pay for these benefits is an inadequate social safety net, a tolerance for speculation, and unacceptable inequality in wealth and income. They also see the American system as one that inflicts high levels of poverty and unemployment on developing countries by the harsh stabilization measures required by the IMF and other Western-directed financial institutions. I made this speech to dispel some of these notions and to encourage reforms in European countries in matters such as taxes, investment, and employment. These, I argued, would, to our mutual benefit, align our systems more closely.

In doing so, I defended our economic model as one that could deliver more jobs, and more wealth, to a higher proportion of citizens than any other system so far invented. A major component of this system is its ability to include increasing numbers of working Americans in the ownership of US companies through IRAs, pension funds, broad-based stock options, and other vehicles for investment and savings.

I agreed with, and cited, Federal Reserve chairman Alan Greenspan's statement that "modern market forces must be coupled with advanced financial regulatory systems, a sophisticated legal architecture, and a culture supportive of the rule of law." After forty years on Wall Street I had no doubt that, despite occasional glitches, our economy met Greenspan's requirements.


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However, as I regularly traveled back to America between 1997 and 2001 there were developments in our financial system that deeply troubled me. The increase in speculative behavior in the stock markets was astonishing. In 1998, as a result of reckless speculation by its managers, the giant hedge fund Long Term Capital Management went bankrupt and, in doing so, threatened the financial system itself. The New York Federal Reserve organized a group of banks and investment houses to rescue the company at a cost of several billion dollars. The sharp rise in dot-com stocks came soon after, together with relentless publicity campaigns to push the markets higher and higher. TV ads of on-line brokers urged everybody to buy stocks and trade them day by day. So-called independent analysts made fantastic claims about their favorite stocks in hopes of generating investment-banking business for their firms. These claims were often supported by creative accounting concepts such as "pro forma earnings"—a management-created fiction intended to show strong results by excluding a variety of charges and losses and one that was implicitly approved by supposedly independent auditors. A large part of the stock market was becoming a branch of show business, and it was driving the economy instead of the other way around.

The financial regulators—whether in the Treasury Department, the Federal Reserve, the SEC, or other agencies—were either unwilling or unable to check this behavior. The then chairman of the SEC, Arthur Levitt, tried to adopt rules that would prevent the more obvious of the conflicts of interest that were widespread among auditors. He was blocked from doing so when the accounting industry lobbied members of Congress to oppose his initiative. The Federal Reserve could have raised the margin requirements for stocks listed on the NASDAQ, which would have sent a powerful signal to the rampant speculation on that market and somewhat limited the damage caused by it. The Federal Reserve chose not to do so.

When the inevitable happened and the bubble burst, $4 trillion of market value evaporated, much of it in high-tech stocks. Half of all American families own listed stocks, and as more and more middle-income Americans saw their savings disappear, and company after company went bankrupt and thousands were laid off, I began ask-ing myself whether I could make that speech again. Was our popular capitalism in fact providing both for the creation of wealth and for regulation that would protect the public and encourage high standards of corporate governance? Alan Greenspan's belief in the effectiveness of responsibly regulated market forces clearly was not being matched by reality.


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The events surrounding the bankruptcy of Enron go beyond the sordid situation of Enron itself and raise the larger question of the integrity of our financial markets. That integrity must be maintained to protect our own investors, to finance economic growth, and to maintain the flow of foreign investment. As of the end of 2001 about 15 percent of all shares listed on the New York Stock Exchange and the NASDAQ were foreign-owned. They had a value of approximately $2 trillion. We must keep in mind that we require about $1 billion per day of capital inflows to finance our trade deficit. A decrease in foreign investment would have seriously damaging effects on the securities markets, the stability of the dollar, and the economy generally. The last thing we should tolerate is a loss of confidence in our capital markets.

While it is too early to make definitive judgments, recent events suggest that our regulatory system is failing. Enron, one of America's Fortune 50 public companies, reporting over $100 billion in sales and almost $1 billion in earnings, melted into bankruptcy during a period of six months, with a loss of $90 billion in market value. As many did not realize, Enron was not only a supplier of energy but a major financier of dealings in energy, and eventually in other commodities as well. In carrying out its trading operations, the company organized more than a thousand financial partnerships and other entities, some involving Enron executives, whose losses were not fully disclosed to the public, and these losses ultimately caused huge write-downs in earnings and assets. Parts of the company's record in its dealings in the commodity futures called derivatives and in other risky financial operations appear to have been deliberately concealed and the company's overall financial position was misrepresented. Enron's management and auditors knew about these matters but did not make them public.

Nor in many cases, apparently, were they obliged to. The derivatives market had been deregulated in December 2000 by the Commodity Futures Modernization Act. Although Enron was in effect a financial institution, it had, for a considerable period, no legal obligation to submit some of its important financial operations to regulators for scrutiny; and no state or federal agency was responsible for regulating some of its most important transactions.[*] The company's accounting firm, for its part, has now admitted destroying documents. Most troubling of all, Enron's senior executives and board members sold over $1 billion of Enron stock while many of the company's 25,000 employees lost much of their savings, which, trusting the company's assurances, they had invested in Enron-managed 401(k) retirement plans.

In a single six-month period one of America's leading companies became the symbol of the defects in American capitalism claimed by its critics. And Enron's failure is only the latest in a series of events that have cast a shadow on the integrity of our markets and the efficacy of the regulators over the past few years. If we allow continued abuse of our securities markets, one of the basic functions of our system will be destroyed. As Congress examines the fate of Enron's stockholders, creditors, and employees, it should bear in mind the other abuses of the system that, over the last few years, have caused immense harm.


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In 1932, the congressional hearings conducted by Ferdinand Pecora of New York started a major process of reform of our financial system. As a result a regulatory structure was created which, until recently, has served us well, although such episodes as the savings-and-loan debacle required strong government action. Serious reforms again are needed, particularly to ensure that accounting firms will henceforth act honestly and responsibly. The securities laws require full disclosure; the accounting firms must ensure that their clients' profits, losses, and assets are disclosed accurately and coherently. The current self-regulation of the accounting industry should be closely scrutinized, and, if necessary, abolished and replaced by a new system of controls. At present, five accounting firms have a virtual monopoly on the audits of most of the US companies listed on the stock markets, a highly unusual level of concentration for any industry.

These firms had enough political power to prevent former SEC chairman Arthur Levitt from adopting rules that would prohibit the conflicts of interest inherent in the present system, in which accounting firms often audit the accounts of a company while also acting as its paid financial consultant. For the accounting industry to rely on a system of "peer review," by which the major accounting firms are responsible for reviewing one another's work, is evidently unsatisfactory. During the forty years or so that I have served on the boards of directors, and often on the audit committees, of a variety of companies, I do not recall a single instance when a negative peer review was brought to the attention of an audit committee. During this period, the technology of finance and the creation of innumerable derivatives and other new financial instruments (and the problems that resulted) certainly warranted a different approach. Just who should regulate the auditors is an important question for Congress to debate, but there is no question that a new system of regulation is necessary.

Harvey Pitt, the new chairman of the SEC, believes in creating a new agency that will establish more stringent accounting standards but would address neither of the two central issues: the need for a governmental review mechanism that is independent of leading accounting firms, and the need to eliminate the conflict of interest between auditing a firm's accounts and acting as its financial consultant. Arthur Levitt strongly dissents from Pitt's view, and considers the issue of independence to be fundamental. They are both right: accounting standards have to be dealt with more effectively but so do conflicts of interest. (Increased fees for basic audit services would help to offset the loss of income from consulting.) The SEC has considerable powers in these matters, and if more extensive powers are needed, Congress can provide them, as well as the budgets to enable the SEC staff to deal with them.

One possibility worth considering for any new regulatory system would be a requirement that companies periodically change their accounting firms, for example every five years. This would be expensive and somewhat cumbersome, but in addition to keeping auditors on their toes, since their work will be subject to scrutiny, it might also generate greater competition in the industry by encouraging new accounting firms to enter it. We should bear in mind that the crucial accounting functions for any companies must be carried out by its own internal auditing and will depend on the strength of its internal controls. (Internal auditors should be company employees with no recent affiliation with the company's outside auditors.) In a new system the continuity of these internal functions would be maintained while outside auditors would come and go.

Potential conflicts of interest, of course, are not limited to the work of auditors; there is a lot of blame to be shared. To cite only a few other examples, questions have also been raised about the objectivity of securities analysts who are pursuing investment banking business; about the way investment banks allocate underwritings of hot new issues among their clients; and about the activities of banks, following the repeal of the Glass-Stegall Act, in acting simultaneously as lenders, underwriters, financial advisors, and principal investors in some transactions.

American popular capitalism is a highly sophisticated system that needs sophisticated regulation—whether in finance or in other fields. The government itself does not seem to have acted illegally in the Enron case; it is the government's failure to anticipate and prevent what happened that is the problem. Unless we take the regulatory and legislative steps required to prevent a recurrence of these events, American market capitalism will run increasing risks and be seen as defective here and abroad. That could have deeply serious consequences not only for our domestic economy but for the world economy as well. Enron's failure was a failure of particular people and institutions but it was above all, part of a general failure to maintain the ethical standards that are, in my view, fundamental to the American economic system. Without respect for those standards, popular capitalism cannot survive.

Notes
[*]Information on these and other operations of Enron, on which I draw here, has been compiled by Randall Dodd and Jeff Madrick and will be the subject of a forthcoming article by Mr. Madrick in these pages.

SCOTT MCCONNELL: HAVE THE YANKS GONE MAD?

Do Americans realize a good part of the civilized world is beginning to think their government has gone mad? Do they care? Should they? Worries about Washington's essential sanity are being voiced in cabinet and editorial meetings from Dublin to Tokyo.

We use the sobriquet "isolationist" for those reluctant to involve their country in foreign wars, and the media usually conflates the term with ignorance and bigotry.

But what is the mot juste for those – influential journalist, indispensable sub-cabinet officer, foundation official – who have little knowledge of the history or culture of other nations, but uses his influence to spur the United States to wage war against as many of them as possible, with or without allies?

Thirty years ago, Randy Newman penned the song "Political Science" putting a satirical gloss on the American unilaterialist. "Boom goes London, and Boom Paree/ More room for you and more room for me/ They all hate us anyhow/ So let's drop the Big One now" (Lyrics recalled from memory; accuracy not guaranteed.)

Newman, one supposed, was sending up (but not without some affection) a familiar type: guy with a pick-up truck decorated in "Love it or Leave It" decals (or perhaps the rebel battle flag), gun rack in back, high school diploma maybe. Called to serve in Vietnam, he did his duty.

But today's unilateralists are a different breed. Educated at top Ivy League schools, they write speeches for the President, or have secured millions from media moguls to publish magazines read by key Congressional staffers. None of them, of course, went anywhere near Vietnam themselves, unless it was years after the fact, to write a book about how noble a cause it was.

Fiercely effective at Beltway faction fighting, they have apparently persuaded George W. Bush to adopt their concepts. America must wage war against an "axis of hate" (a phrase subsequently altered to read "axis of evil.") It must strike out at Iraq, Iran, and North Korea. (The list is a pared down version from the initial post 9/11 neoconservative target roster; that included Lebanon, Syria, and "parts of Egypt" as well.)

Countries which know the United States well, with traditions of democracy and freedom as vital as America's (indeed countries whose pamphleteers and philosophers helped shape the world view of our Founding Fathers) are pausing for a deep and fearful breath.

Last week the Financial Times, a middle of the road, establishment oriented, pro-business paper, takes a moment to editorialize about the new circumstance. On the eve of Ariel Sharon's visit the White House (the fourth meeting between Bush and Sharon, as European papers seldom fail to point out high in their stories) the FT ran a column discussing the "unease" springing up between Europe and the United States. Germany has led the protests, Brian Groom notes, but the discomfort is more widespread. Tony Blair has put enormous stake in his relationship with Washington. British diplomats scurried over the world after 9/11 making a eloquent public case for the war against Al Qaeda and the Taliban. But now, these same officials stress there is not "an iota" of evidence linking Saddam Hussein to Islamic terrorism. About Iraq, they favor weapons inspections and sanctions, not war. The author concludes that Blair should acknowledge he has no real influence on Bush. After the State of the Union address, British officials "are playing down what the country can achieve as a transatlantic bridge."

Nor does Germany have any influence. Nor France, where prime minister Jospin recently went public over what the French view as dangerously simplistic policies. Nor any country in Europe.

To whom does Bush listen? Apparently Ariel Sharon has his ear. The Washington Post reported before his arrival that he would stress that Iran posed the main strategic threat to Israel, more menacing even than Iraq. Bush's speechwriters seem to have gotten the word before the Israeli prime minister's visit.

Bush's adoption of the Sharonist world view has been surprisingly complete. The Financial Times noticed it, again using cautious and understated language: "Ariel Sharon. . . has seized upon the post September 11 mood in Washington. . . to convince the Bush administration of the merits of his policies. The US now sees Yassir Arafat...as the key obstacle to peace. The tendency is to view Palestinian attacks as terrorism and be more tolerant of Israel's military tactics, including the assassination of militants. The shift in US thinking was underlined in...Bush's speech last week, which identified the Jewish state's enemies as a large part of the threat to America."

The editorial concludes with plea for the Bush administration to take a "deeper look" at the situation. The chances of Bush doing that are not great.

"Unilaterialist" is the term Europeans now use to depict an America that goes its own way without consulting its allies. Right now, that means preparing a war against much of the Muslim world, even though the Muslim world has never done very much harm to America. (The obvious and important exception is Al Qaeda, which it clearly must be an American priority to destroy.)

It's not clear the term, so academic and bloodless, has the texture to bear the moral opprobrium that will one day be attached to it, when our children read about the men who – ignoring the counsel of every American ally of long standing – launched this country into a series of wars against Muslim countries. Future generations may read of how the unilateralist's largest target, Iran, was in the midst of an fascinating political battle between fundamentalist clerics (on the retreat) and democratizing forces (making astonishing progress). But the war threats would bring the democratization process to a screeching halt. In a war waged without allies and with little sympathy around the world, the United States will lack the intelligence and police cooperation essential to a campaign against terrorism.

Because in any war, the United States will kill far more of "the enemy" than it absorbs casualties itself, it will leave in its wake thousands of fatherless children and younger siblings, some of whom will naturally dream of vengeance. Bush's war policy promises to turn much of the Muslim world into defeated and occupied territory, our very own Gaza Strip writ large, seething with resentment and aching to even the score.

Can anyone doubt why the Europeans see this course as a more than a little bit mad, and are now talking to America in the cautious and soothing tones one uses in the presence of deranged man carrying a loaded weapon?

Scott McConnell

Antiwar.com

The Company Presidency
Enron and the Bush family have boosted each other up the ladder of success. But have their ties created a Teapot Dome?
By KEVIN PHILLIPS
Kevin Phillips' new book, "Wealth and Democracy: A Political History of the American Rich," will be published in May.

February 10 2002

WASHINGTON -- Enron's spectacular collapse has put scores of politicians on the defensive because of their pro-Enron voting records and their war chests full of Enron dollars. Even some Cabinet officials are squirming over their past relationships with the energy company. It's all an unsettling echo of Teapot Dome, the government-oil-reserve-loan scandal of the Harding presidency, which became a symbol of the financial and political abuses of the 1920s.

In 1921, the U.S. Interior Department rigged the leasing of California's Elk Hills and Wyoming's Teapot Dome naval oil reserves after Interior Secretary Albert B. Fall received "loans" from oilmen Edward L. Doheny and Harry Sinclair. The loans of cash and stock were in the $400,000 range, with a "gift" of $100,000 from Doheny.

Both Teapot and Enron involved energy policy, privatization and corruption. And like Teapot Dome's "Ohio gang" of ethically loose Harding cronies, oilmen and administration officials--energy deregulation during the first Bush administration, through the Clinton years and George W.'s time as governor of Texas on up till today has been warped and feasted upon by a Texas-led "Enron gang." In both scandals, some Democrats were involved, but the power centers of misbehavior were Republican. Yet, there has been nothing quite like the rise and fall of Enron in U.S. history, certainly no plausible comparison since the late-19th-century heyday of railroads and robber barons. The sums in Enron's collapse certainly overshadow those in Teapot, much as a space shuttle does a Model T Ford. More important, not in memory has a single major company grown so big in tandem with a presidential dynasty and a corrupted political system. Indeed, the Bush family has been a prominent and well-rewarded rung in Enron's climb to national political influence.

In retrospect, it's unclear whether the Bush dynasty built Enron or vice versa. In 1985, when Enron was formed, the Bushes were an important political family. George Bush, as vice president, headed the Reagan administration's task force on energy policy. But in terms of Texas oil money and stature, the Bushes were third echelon. When George W. ran for governor of Texas in 1994, Ann Richards, the Democratic incumbent, joked that of the oil companies he had started or been involved with, none had made a profit. Enron's rise, with the Bush family's help, in the 1990s rearranged the energy power structure in Texas and the nation, and put the Bush entourage in clover. The question now is whether what went up together will come down together.

As early as 1988, when his father was president-elect, George W. Bush lobbied the Argentine government on behalf of an Enron pipeline proposal. Bush, through his staff, has denied making a telephone call on Enron's behalf, but Rodolfo Terragno, the Argentine minister of public works and services at the time, insists he did. When newly elected President Carlos Menem made a sweetheart deal with Enron, freeing the corporation of certain Argentine tariffs and taxes when doing business in the country, lawmakers demanded an investigation, and a special prosecutor undertook the task. But since his Justice Department was already "investigating," Menem fired the prosecutor.

From 1988 to 1992, Bush the elder collected hefty political contributions from Enron. When president, it was his ambassador in Buenos Aires who had pushed for favorable tax treatment for Enron in Argentina. Bush asked Enron chief Kenneth L. Lay to co-chair a host committee for the July 1990 G-7 economic summit in Houston and appointed him to his Export Council in late 1990. A year earlier, Bush energy officials began work on the 1992 Energy Policy Act. Its provisions obliged utility companies to carry and transmit Enron-generated electricity, which contributed to the company's subsequent huge growth. In 1992, Lay was named co-chairman of the Bush reelection campaign and chairman of the host committee of the Republican National Convention in Houston.

In December 1992, Bush's Commodity Futures Trading Commission, chaired by Wendy L. Gramm, wife of Texas GOP Sen. Phil Gramm, created a legal exemption that allowed Enron to begin trading energy derivatives--another growth enhancer for the company. When Bush left the White House in 1993, Enron made Wendy Gramm a company director and signed a joint consulting and investing agreement with James A. Baker III, Bush's secretary of State, and Robert A. Mosbacher, his Commerce secretary. The two were to do Enron's global deal-making for natural-gas projects.

How much the Bush family and its close political entourage actually collected from Enron and its executives since the company was organized is a matter of definition--reportable political contributions, soft money for the Republican Party, finders' fees, joint investments, inauguration funding, presidential-library donations, speech money, capital gains, consulting fees, directors' fees or what? If you combine what the multiple Bush generations received with what loyalists Vice President Dick Cheney, Baker, Mosbacher, political advisor Karl Rove, economic advisor Lawrence B. Lindsey and U.S. Trade Representative Robert Zoellick got, you certainly have $6 million to $8 million, and depending on the success of the Baker-Mosbacher-Enron joint investments, perhaps $20 million to $30 million.

On top of which, 29 top Enron executives and board members (and its accounting firm, Andersen), the majority of whom were significant Bush contributors in 2000, are being sued by Enron shareholders to recover $1.1 billion made by the 29 in alleged insider trading of Enron stock.

But let us return to Texas in 1995. George W. Bush has been elected and inaugurated as governor. Enron chairman Lay and Joe B. Allen of Vinson & Elkins, Enron's Houston law firm, are his top fund-raisers. Lay also chairs the governor's Business Council, and press reports have Lay writing regularly to Bush, seeking favors, recommending appointments and asking the governor to receive visiting dignitaries from places where Enron hoped to do business.

Bush began pushing Enron-backed deregulation in his first year as governor. In 1997, he urged then-Pennsylvania GOP Gov. Tom Ridge to support an Enron-backed energy-deregulation plan for the state. Then in 1999, Bush succeeded in getting a kindred deregulatory blueprint enacted in Texas.

By 2000, Bush was running for president and, once again, Enron's checkbook was open. Lay and Enron would be Bush's biggest corporate contributor, with Vinson & Elkins not too far behind. This was the year when Lay also sent a memo to company employees urging them to contribute personally to Bush through the Enron Political Action Committee.

Enron's roster of advisors and lobbyists became a pay-station for senior Bush campaign strategists and advisors: Lindsey, former Christian Coalition honcho Ralph Reed and Zoellick.

When the 2000 presidential election ended up in the Florida courts, Enron helped fund the Bush campaign's expenses, a fitting gesture because the effort's captain was Baker, the old Enron deal-maker, with Enron advisor Zoellick--known also as Baker's "second brain"--back as first lieutenant. Then when the U.S. Supreme Court decided the election, Lay and his fellow power brokers popped the figurative champagne cork with a $300,000 contribution to the Bush-Cheney inaugural gala.

In Washington, the Enron gang--let's call them the "E team"--also included Sen. Gramm and Texas Reps. Dick Armey, the House majority leader, and Tom DeLay, House majority whip. All received large Enron contributions--Gramm collected $100,000 over 12 years, the second-largest draw in Congress--and their voting records were supportive of Enron causes. Gramm's decision last September to retire from the Senate may have stemmed from his worry that he might be politically vulnerable for being a leading supporter of 2000 legislation that facilitated Enron's entry into commodity derivatives markets and exempted the company from key financial reporting requirements, while his wife was an Enron director with sizable company holdings.

Enron boosters who landed government jobs are Patrick H. Wood III, the former Texas Public Utilities Commission chairman who now heads the Federal Energy Regulatory Commission (FERC), and Nora M. Brownell, a former pro-Enron public-utilities commissioner in deregulated Pennsylvania, who is also a FERC member. White House personnel chief Clay Johnson, a former energy lawyer in Houston; Army Secretary Thomas E. White, a former Enron senior executive; Commerce Department general counsel Ted Kassinger, a former Enron advisor and trade lawyer with Vinson & Elkins; Montana ex-Gov. Marc Racicot, the former Enron lobbyist recently named Republican National Committee chairman by Bush.

The drafting of a Bush federal energy policy fell into the vice president's lap. A previous Enron shareholder and a friend of Lay's, Cheney had run the Halliburton Co. One of its divisions built Houston's Enron Field, the new home of the Houston Astros baseball team. Cheney's chief of staff, Lewis Libby, was an Enron stockholder. Cheney, who refuses to say what he and Lay discussed in their private meetings, and the General Accounting Office, an investigating arm of Congress, is suing the vice president to obtain that information.

Enron's largess has even compromised law enforcement. U.S. Atty. Gen. John Ashcroft has recused himself from Enron-related matters because of large Enron political contributions he received while a Missouri senator. Deputy Atty. Gen. Lawrence Thompson, from the Enron-representing Atlanta law firm of King & Spalding, is also under pressure to follow his lead. The office of the U.S. attorney for the Southern District of Texas, which includes Houston, has had to recuse itself en masse.

In the months and years ahead, as the congressional and criminal investigations fill in the details of the Enron story, the collapse of Enron may, like Teapot Dome, come to symbolize an era of financial and political excess. If so, there is even some chance that it could do for the memory of Bush what those California and Wyoming oil leases did for the memory of Harding.
If you want other stories on this topic, search the Archives at latimes.com/archives. For information about reprinting this article, go to www.lats.com/rights.


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February 11, 2002
Released Afghans Tell of Beatings
By CARLOTTA GALL
RUZGAN, Afghanistan, Feb. 10 — Afghan prisoners captured by American forces in two night raids here last month said today that they were beaten and abused by American soldiers, despite their protests that they supported the leader of the interim government, Hamid Karzai.

The men were among 27 Afghans who were released on Thursday after 16 days' detention in the American base in Kandahar, about 150 miles southwest of Oruzgan. The Pentagon has acknowledged that the raids were conducted in error, apparently because of flawed intelligence, and that the prisoners were neither members of Al Qaeda nor Taliban fighters. Local officials put the death toll at 21; the Pentagon says at least 15 Afghans were killed.

The accounts of harsh treatment from four of the prisoners, the district police chief among them, offer the first insights into the detention from the Afghans' point of view.

Abdul Rauf, 60, the police chief in this small mountain town, said he was beaten, kicked until his ribs cracked and punched by American soldiers when they stormed the district headquarters in the night of Jan. 23-24 and took him and his men prisoner.

An American officer apologized to him when he was released, he said, asking forgiveness and saying their capture had been a mistake.

"I can never forgive them," Mr. Rauf said in an interview today as he lay on cushions at his home, still clearly suffering from his ordeal. "Why did they bomb us? Why did they do this?"

[In Washington, a Pentagon spokesman said the Defense Department would not comment on the complaints until the completion of an official investigation being conducted by the United States Central Command.]

United States Special Forces stormed two compounds in Oruzgan within minutes: the local school, where men from the government disarmament commission had made their base, and the district civilian and police headquarters, where 30 police guards were based and 6 men were in the jail. Both compounds had storerooms still full of weapons left behind or captured from the Taliban. The school was crowded with four- wheel-drive vehicles and a truck mounted with an antiaircraft gun.

Among the men killed in the school, survivors said today, were two of Mr. Karzai's top commanders, while in the district headquarters, two guards were killed. Defense Secretary Donald H. Rumsfeld admitted last week that American forces may have killed local allies in the raid.

Despite the Afghan government's continued support for United States operations to hunt down fighters from the Taliban and Al Qaeda, local officials here said it was time for them to end the bombing and commando raids to prevent further mistakes and loss of life.

"There is no need for more raids," said Azizullah Agha, the new head of the government disarmament commission here, who lost nine members of his own family in a bombing in November. "If for example we have information that the Taliban leader Mullah Omar is somewhere, I can go there myself to negotiate or send guards," he said.

"I do not know why they are making so many mistakes," said Mr. Agha, who is 58. He had accepted previous mistakes because they had been close to Taliban positions, he said. "But this latest one was a very big mistake," he continued. "There were no Al Qaeda or Taliban. There was just a commission that is working for the government, collecting weapons."

The governor of Oruzgan Province, Jan Muhammad, also expressed anger in an interview in the provincial capital, Tirin Kot. He said he had 30 soldiers from Special Forces working with him and living in his headquarters while 100 miles away other Americans were killing his commanders.

Chief Rauf said he was asleep with his guards in the district office when shouts and gunfire woke him at 3 a.m. He recognized American voices outside and went out, calling out in Pashto to the troops.

"I was shouting `Dost! Dost!' — `We are friends!' — but they were not listening," he said. "And I was telling my men that they are friends, and American soldiers came and started to beat me.

"I was down on my knees, bent over, and they kicked me in the chest. I heard my ribs crack. Then I was lying on my side and they kicked me in the back, in the kidneys, and I fainted."

He came round to find his hands tied and one of his men dead on the ground.

His men surrendered without a fight, Mr. Rauf said.

Two of his men interviewed today, Allah Noor, 40, and Ziauddin, 50, looked like the village farmers they were until they joined the police as guards after the Taliban were ousted. A third guard, Aktar Muhammad, was still in his teens.

All four said that American soldiers beat and punched them in the district headquarters before their hands and feet were bound and they were loaded on helicopters and flown to the base in Kandahar. There they were made to lie face down on a hangar floor and for the rest of the night were subjected to violent blows and kicking, they said.

"They were walking on our backs, kicking us," Mr. Rauf said. As he muttered a prayer, a soldier hit him on the back of the head, smashing his nose against the ground. His nose still bears the marks of a cut. Mr. Ziauddin, who uses only one name, was also kicked in the head, he said, and he showed a tooth loosened as his head hit the floor.

Mr. Muhammad said he was picked up and thrown on the ground three times by soldiers, until on the third time he fainted from a blow to the head.

"I was so afraid I did not expect to remain alive and see my family again," he said. In the morning he was put with the other prisoners in a large cage, with wooden bars and a canvas roof.

Two days later he was pulled out and put in solitary confinement in a metal shipping container for eight days and underwent an interrogation he described as aggressive. Two American soldiers guarded the open door and ordered him to sit on the floor and keep his eyes down.

Most of the men said the interrogation was courteous, however, and after the first day the beating stopped, possibly because they all told their interrogators they were supporters of Mr. Karzai.

At the end of the 16 days they were told they would be released and given new clothes, wool hats and boots. An American officer put his hands together in a gesture of apology as a translator told them it had been mistake.

"I am not angry with the Americans because that was a mistake," Mr. Noor said. "Someone gave them the wrong information."

Abdul Kuduz Irfani, the newly appointed district chief, said, "The prisoners are just glad to be alive."

But relatives of the dead men are angry and are demanding to know who fed the Americans the wrong information. "We are having a lot of trouble convincing them it was a mistake," he said.

No one will name any suspects, but officials here insist that despite local rivalries, no person from Oruzgan would have had the ear of the American forces to request such a raid.

"A simple apology will not solve this," Mr. Irfani said. "The Americans know who informed them, and that man is an enemy of this government and of this country. He should be handed over to this administration and executed."



Copyright 2002 The New York Times Company | Privacy Information

Armed to the teeth
Is Bush's awesome increase in military spending a reasonable response to the afermath of September 11, or is he creating a force almost too powerful for its own good? Peter Beaumont and Ed Vulliamy report

Is America too powerful for its own good?

You can have your say online here.

Observer Worldview

Peter Beaumont and Ed Vulliamy
Sunday February 10, 2002
The Observer

There is a United States special forces dog-handler who meets journalists, diplomats and aid workers off the UN flight to Kabul. His job is to search luggage and ensure the security of US troops in Afghanistan. He is short, gingery and aggressive. His skills at persuasion are limited to shouting at the milling crowd: 'Stand back! Stand back! My dog will bite!'

Last week that phrase had become the defining motto and operating credo for the military and foreign policy of the Bush administration. Already President George W. Bush has put Iran, Iraq and North Korea on notice as terrorist-sponsoring nations at the centre of an international 'axis of evil', despite the CIA's recent evidence that none of them was in the business of threatening the United States at present.

Last Monday, to back that explicit threat, he announced an increase in US military spending of 15 per cent, the biggest in 20 years, more than double the military spending in all of the European Union. The rise will be $36 billion (£26.5bn) this year, $48 billion next year and $120 billion over the next five years, rising to a staggering two trillion over the next five years.

Even this is not enough for General Richard Myers, chairman of the US Joint Chiefs of Staff, and Defence Secretary Donald Rumsfeld. They want the US defence budget to increase at an even faster rate.

What all this means is clear. Troubled by the 11 September attacks and buoyed by the ease of the war against Afghanistan, Bush's message to the 'evil doers' of the world is that he has a dog; that it is very big, getting bigger, and certainly it will bite.

The puzzle about the latest rise in defence spending is that America at the beginning of the 21st century is already not so much a superpower as a behemoth on the world stage. Economically dominant, it enjoys military and cultural power unrivalled since the days of the Roman emperors, as the American author Robert D. Kaplan reminds us in his new book, Warrior Politics.

Typically, it has been left to the French, traditionally suspicious of US global hegemony, to find the best words to describe it. Gigantisme militaire they call it, in a phrase that describes both the scale of America's ambitions and also a pathological condition: an organism grown so large it is sick.

The question the rest of the world is asking itself is: Who is the enemy America is arming itself so against? And why?

'Ostensibly,' says one European diplomat, 'this is about security. But quite how a massive increase in defence spending is supposed to prevent another terrorist attack remains unclear. Instead this seems to be about repairing the bruised American psyche after 11 September. America's powerlessness in the face of this attack requires big gestures and reassurances, even if they are counter-productive and meaningless.'

Indeed, some analysts say, if it is security that America seeks it is better sought in dialogue with potentially threatening states, rather than in reinforcing the idea already held by many anti-US groups that it is an evil empire bent on world domination.

Cynics have identified more overtly self-serving strands in the Republican obsession with America's defence. The 'war' rhetoric, as some US liberal commentators have pointed out, serves a purely domestic Republican agenda in the post-11 September mood of national paranoia: to win Bush a second presidential term and, in the shorter term, regain Congress.

The reality - even before the latest proposed increases in military spending - is that America could beat the rest of the world at war with one hand tied behind its back. The requirement that US armed forces be able to fight two fully fledged wars with two separate adversaries simultaneously may recently have been dropped, but only because it would be hard pushed to find two such equal foes to fight.

A single US nuclear-powered carrier group - which forms around the USS Enterprise, for example, with a flight deck almost a mile in length and a superstructure 20 storeys high - concentrates more military power in one naval group than most states can manage with all their armed forces. America has seven of these battle groups.

It is not just the scale and power of these weapons systems. The reach of US arms, too, is awesome. When the USS Kitty Hawk was sent with its accompanying warships from Yokohama to the Gulf for the war against Afghanistan, it covered 6,000 miles in just 12 days to be transformed into a vast floating forward attack station for thousands of US special forces.

Its B-52 bombers can fly and refuel across the world armed with cruise missiles that can be fired hundreds of miles away from hostile skies, the missiles themselves directed to their targets by satellites in orbit.

And America's supremacy in bombs, planes, satellites, tanks and real-time intelligence have made the prospect of US casualties remote, except in the event of cock-up or disaster. And, significantly, as the world's only economic hyper-power, it can afford this level of militarisation.

But against all this even the manufacturers of America's arms - like the aviation giant Lockheed-Martin - have been struggling for a decade or so to define the threat its top-shelf jets will be battling in the skies, being forced in one memorable presentation to show the European Eurofighter as a potential adversary.

So why the need for more and better military power? Even military analysts are baffled. 'The rise in US military spending,' says Dan Plesch, senior research fellow at the Royal United Services Institute, 'ought to be compared to the decision in the First World War to order up more cavalry when the first wave had been mown down by machine-guns.

'The US has no competitor in high-tech military equipment. And what it is spending its money on is mostly irrelevant against the knives used to carry out 11 September. The bombing of Afghanistan has created the illusion of victory.'

Professor Paul Kennedy at Yale University calculates that the US now spends more each year than the next nine largest national defence budgets combined. Indeed America is responsible for about 40 per cent of the world's military spending.

The new defence expenditure will be paid for by a freshly dug deficit and cuts to every other federal spending programme - including social security, Medicare and urban renewal - apart from tax breaks loaded heavily in favour of the upper-income brackets. Amid all this, military might has emerged as the central tenet of America's new power, the defining feature of the Bush administration.

Already it is causing alarm, even among America's closest allies in Nato, where Lord Robertson, the usually unflappable secretary-general, has been moved to warn some members that unless the declining European defence expenditure is reversed then Europe - and the Europeans in Nato - are in danger of becoming military pygmies.

It is not a prospect likely to worry the military hawks in the Bush administration, who favour unilateralism over alliance. Indeed the Nato alliance, built to counter the rival superpower conflict of the Cold War, is already almost redundant, some diplomats claim.

'Will the Americans ever fight a war through Nato again?' asks Carl Bildt, former Swedish Prime Minister. 'It's doubtful. The United States reserves the right to itself to wage war, and dumps on others the messy, expensive business of nation-building and peace keeping'. And the Afghan war has not only put the US in sole command of the world, but fundamentally reshaped the architecture of international alliances. Central Asia is splattered with new American fortresses; the Pacific and Indian oceans are patrolled by aircraft carriers and accompanying fleets of awesome size.

As a consequence, a new matrix of alliances exists of states beholden to the US in exchange for a blank cheque as regards their own internal human rights abuses - China, Pakistan, India and Russia and the former Soviet states. And even among them are flashpoints in Kashmir, Chechnya and Tibet.

The writer and academic David Rieff, recently returned from central Asia, said at a seminar in New York on Thursday night: 'Even for someone who's not against the use of American power, it's hard to believe that the people running the country can limit their ambitions for an empire at its high water mark.

'They're not doing the intelligent thing, which would be to forge multilateral institutions that are favourable to us. What's the point of attacking Saddam, which will only entrench the root causes of the problems we're facing? Or Iran just when they're ready to deal?'

Crucially, the new culture of US military hegemony is not a continuation of the might the US enjoyed under Bill Clinton or any other administration. It is new, and in military terms it began the day that the man at the apex of this awesome edifice took office, Defence Secretary Donald Rumsfeld. With him, Rumsfeld brought a tight group of political appointees who did not inherit the Pentagon in order to pursue business as usual.

One of them, a deputy under-secretary, describes the group to The Observer as 'a coherent team of firm believers in unilateral, American military power'.

And the aim of this power?

'The war on terrorism,' says Professor Paul Rogers, of Bradford University's Department of Peace Studies, 'is simply a euphemism for extending US control in the world, whether it is by projecting force through its carriers or building new military bases in central Asia.'


Guardian Unlimited © Guardian Newspapers Limited 2002

Is America too powerful for its own good?
Just how powerful is the United States? The Observer asked the leading foreign policy experts on both sides of the Atlantic to assess what the unparalleled power of Bush's America means for the world. You can have your say online here.

Focus: Armed to the teeth

Observer Worldview

Sunder Katwala
Sunday February 10, 2002
The Observer

"The United States is more powerful compared to other countries than any entity since Rome, and it is unlikely to be overtaken by other nations in the first half of this century. But this fact diverts attention from the effects of the information revolution and globalization which are making non-state actors (witness Al-Qaeda) more important and weak distant places (witness Afghanistan) more difficult to ignore. That is why I have titled by new book The Paradox of American Power: Why the World's Only Superpower Can't Go It Alone. Being Number One is not going to be what it used to be. American preponderance is a long way from omnipotence, and it will be important for Americans to realize that they must cooperate with others to get the outcomes they want".
- Joseph Nye, Dean of the Kennedy School of Government, Harvard University.

"The United States still has the fastest gun in the West, but the days of the Lone Ranger are over. Though it is the reigning global hyperpower, tempted after 9/11 more than ever to impose itself - Pax Americana style - on a reluctant world by military and economic means, this is no longer possible. For terrorism is itself a perverse expression of interdependence and the new limits on sovereignty, a tribute to the same extra-national networking forces that drive market globalization. Unless the U.S. begins to operate multilaterally in partnership with others; unless it develops civic, political and democratic strategies to complement its military tactics; and unless it finds ways to globalize democracy and public goods as successfully as it has globalized markets and private profits, it is likely to discover that its strengths will be leveraged by the weak against its interests (as happened on 9/11). In a world of interdependence, the new realism insists that terrorism is less likely to be defeated by plutocracy than by democracy, while the most powerful and prosperous nations will flourish only if the weakest and poorest are allowed to flourish along side of them".
-Benjamin R. Barber, author of Jihad vs. McWorld, is Kekst Professor of Civil Society at the University of Maryland and currently the Daimler-Benz Fellow at the American Academy of Berlin.

"The USA is already unchallengeable in terms of military power. A further increase in its defence budget hardly seems necessary, when there's room to redistribute resources from old-fashioned heavy divisions into special forces and new technology. There's a danger that such overwhelming emphasis on military power will lead US policymakers to forget that persuasion is more effective than coercion. The US can go to war on its own; but to maintain a peaceful world order it needs friends and allies. The current unilateralist mood in Washington is a tragic retreat from the enlightened self-interest which led previous US Administrations to build multilateral institutions to underpin an open international order".
- William Wallace, Professor of International Studies, London School of Economics and Liberal Democrat peer.

"If by power, is meant military might - the two are very separate concepts - then what follows from the fact of US military predominance depends entirely on how it will be deployed. There are great opportunities here, and great dangers. The deployment of military might, if done so with wisdom and on the basis of a long term political (non-military) view of the world, can greatly enhance the power, image and implications of the whole Western democratic system for those parts of the world that do not at the moment benefit from what that system has to offer. This is clearly what has to be done.

On the other hand, the use of military power merely to penalize and destroy without putting anything back in its place, will ultimately weaken US power in the world and lead to its retreat in the decades to come. The US will in these circumstances go the way all great empires have before it in history."
- Kanan Makiya, Iraqi expatriate and writer, is author of Republic of Fear: The politics of modern Iraq.

"America's power is unrivalled. It has no military, economic, or political competitors. As the biggest billiard ball on the table, it can force all others to move in its direction. In world politics, power rules and absolute power rules absolutely. This is the Bush world view, and it has a lot going for it. America can achieve much of what it wants because of its sheer dominance in world affairs. Power is unimportant only to those who do not have it.

But there are costs in using power arrogantly. It breeds resentment. It gives others reasons to coalesce in a balance against America. And it provides the weak incentives to expose America's vulnerabilities, which, for all its power, are still aplenty. Power is best used wisely, in ways that does the greatest good for the most. That is what America did in the 1940s, and what it must do now when its power is essentially unchallenged".
- Ivo Daalder, Senior Fellow, The Brookings Institution

"If one country must be so dominant militarily, then it is probably better that it is the United States rather than another country. However, history suggests that such dominance leads to abuse and it is encumbent on the rest of the world to find ways of restraining the United States through international law, countervailing power and dialogue.

The European Union, which has achieved parity with the United States in trade and investment, has a major responsibility in this endeavour. Plans for a European Security and Defence Policy (ESDP) therefore need to be accelerated and EU governments need to commit adequate resource to it".
-Victor Bulmer-Thomas, Director of the Royal Institute of International Affairs

"The implications of a unipolar world are bad for everyone concerned. If America stands aloof from global problems, it is accused of isolationism. If it intervenes, it is accused of imperialism. Either way, it becomes a target of resentment and violence. For the rest it means frustration and impotence.

Complaining won't do any good. The rest of us have to raise our game and provide America with partners they can't ignore. For Britain, that means building a more united Europe with a more coherent foreign policy and a strong single currency. It's either that or another American century."
- David Clark, former special adviser to Robin Cook at the Foreign Office.

"The USA is militarily dominant in a way that no other power can challenge. The USA is the world's largest economy, but the EU 15 runs it close. Military dominance needs legitimacy in today's world. The USA needs allies and also the fig leaf of the UN. The USA is no longer quite as powerful economically as it was in 1945, the rest of the industrial world has become richer. The US is now a major capital importer and the dollar depends on the international financial markets. So America is only half boss".
-Paul Hirst, Professor of Social Theory at Birkbeck College, University of London and co-author of Globalisation in Question.

If for the US the 1970s was a decade of decline, the 1990s turned out to be the years of renewal. It began with the fall of the USSR, continued with Japan's economic implosion and Europe's dithering in the Balkans, and was finally confirmed by Washington's response to September 11th and the Bush militarily build-up.

What are the implications for us? That Europe either puts up - and accepts the American challenge - or shuts up and continues to play the role of complaining, yet compliant, junior partner to the hegemon across the Atlantic.
-Professor Michael Cox, Associate Research Fellow, Royal Institute of International Affairs

The rise in US military spending ought to be compared to the decision in the First World War to order up more cavalry when the first wave had been mown down by machine guns. The US has no competitor in high tech military equipment but this is mostly irrelevant against the knives used to carry out the September 11th attacks. The bombing of Afghanistan has created the illusion of victory, there may yet be a long drawn out guerilla war in central asia with the next opium crop the focus. Joint Strike Fighters and new artillery guns are at best irrelevant and are political and financial diversion from the necessary multilateral give and take needed to really isolate the terrorists.
-Dan Plesch, Royal United Services Institute.


Guardian Unlimited © Guardian Newspapers Limited 2002

UK tells White House to rein in the hawks
Terrorism crisis - Observer special
The Bush files - Observer special

Kamal Ahmed, political editor
Sunday February 10, 2002
The Observer

Britain revealed its increasing irritation with America over the war against terrorism yesterday when senior Government sources said that hawkish elements in the White House were using 'unnecessarily belligerent' language.

Referring to President Bush's comment that Iraq, Iran and North Korea formed an 'axis of evil', Whitehall officials said that it was becoming increasingly difficult to back fully the US stance.

Peter Hain, the Europe Minister, strengthened the sense of growing tension when he said yesterday that Britain would not be America's 'patsy'.

While insisting that the Government was still a 'steadfast ally' of Washington, he said that Britain was independent when it came to foreign affairs.

His comments come the day after Chris Patten, the European Commissioner for international relations, who is known to be close to Tony Blair, attacked Washington for its 'absolutist and simplistic' approach.

'There is more to be said for trying to engage and to draw these societies into the international communities than to cut them off,' he said in an interview with The Guardian.

Lionel Jospin, the French Prime Minister, also warned the US not to give in to 'the strong temptation of unilateralism'.

Addressing a Fabian conference on world affairs, Hain highlighted the growing thaw in relations with both Iran and North Korea, despite the recent spat over the new British ambassador to Tehran.

The Iranian authorities have refused to accept the new ambassador, David Reddaway, accusing him of being 'a Jew' and in MI6. In a tit-for-tat move, Britain downgraded the Iranian ambassador to London to the status of chargé d'affaires.

'There are still elements in the US who want to act unilaterally rather than multilaterally, in isolation from, rather than in co-operation with, other nations,' Hain said. 'The question is how can we build on the international unity following September 11 to create a new world order shaped by our values of democracy, human rights, environmental protection, equality and justice."

Or, he asked, 'will it be shaped by a quite different agenda, driven by hawks on Capitol Hill, let off the hook by rejectionists and cynics worldwide?'

Privately, the Government is going much further in its criticism of US tactics and attempting to promote Colin Powell, the Secretary of State, who is seen as a restraining influence on Bush and Donald Rumsfeld, the Defence Secretary.

However, a source close to the Prime Minister said: 'We cannot engage in the type of megaphone diplomacy that Chris Patten has deployed. We have far more influence remaining inside the tent [with America] than outside it.'

Asked whether the 'axis of evil' comment had been a useful addition to the debate on terrorism, the official said: 'Let's put it this way, it is not phrase we would have used.'


Guardian Unlimited © Guardian Newspapers Limited 2002

CNN.com
Iran's Khatami backs anti-U.S. protest
Points to 'unfounded assertions' by U.S. leaders


TEHRAN, Iran (CNN) --Nearly two weeks after President Bush lumped Iran into an "axis of evil," the Middle Eastern country's reformist president Saturday urged Iranians to turn out in force for an upcoming anti-U.S. demonstration.

Speaking on Iranian television, President Mohammad Khatami said "the recent, unfounded assertions, which are insulting to the Iranian people," precipitated his call for all Iranians to participate in Monday's protest in Tehran.

A large turnout, the president said, would show Iranian unity in defending the country's honor and independence.

The demonstration falls on the 23rd anniversary of Iran's Islamic revolution, when Shiite Muslim fundamentalists overthrew a U.S.-backed regime led by Shah Mohammad Reza Pahlavi.

In November 1979, militants supported by Ayatollah Ruhollah Khomeini, the revolution's spiritual and supreme leader, took 50 Americans in the U.S. Embassy hostage.

Washington and Tehran have not had diplomatic relations since, even after the hostages were released 444 days later.

Khomeini's successor Ayatollah Ali Khameini and his religious and military allies have kept up the tough, anti-American line.

But Khatami, many members of the nation's reform-minded parliament and many young Iranians have advocated a more pro-Western stance, with some even pushing for renewed ties with the United States.

Khatami has tried to reverse conservative policies -- such as bans on dating and Western-style parties -- create new jobs and give young people and women freedoms they have long lacked in Iran. In most cases, however, his efforts have been derailed by powerful hard-liners, led by Khameini, who have arrested scores of journalists and protesters in recent years and erased many reforms in conservative courts.

Bush's speech January 29 reignited tensions between the two long-time rivals -- and, unlike many other issues, drew similar responses from Khatami and Khameini.

In his State of the Union address, the president singled out Iran -- along with North Korea and Iraq -- for seeking out weapons of mass destruction and supporting terrorists.

Several nations, including U.S. allies France and the United Arab Emirates, criticized Bush's remarks.

Iranian officials quickly and sharply condemned the comments, calling Bush "arrogant" and "ungrateful" of Iran's help forming a post-Taliban government in Afghanistan -- even though they never backed America's military campaign in the region.

Iran also disputed claims by U.S. Defense Secretary Donald Rumsfeld that it was harboring Taliban and al Qaeda fighters who had fled from neighboring Afghanistan.

Earlier Saturday, the deputy commander of Iran's Revolutionary Guard warned on Iranian television that his forces would destroy oil fields outside Iraq if the United States threatens Iran.

Sardar Zolghadr said Iranian troops would target oil fields in the Persian Gulf, which produce much of the oil used by the United States, because his nation would not limit its defensive actions to within Iranian borders.

Khameini said Thursday that Iran would not initiate attacks on the United States, but warned any attack on Iran would spark a "resolute" response that "will make the aggressors regret their action."

-- CNN's Kasra Naji contributed to this report.

A Risky Message to Iran
By ABBAS AMANAT
EW HAVEN — Iran's recent promotion from a rogue state to a member of the "axis of evil" appears to be a belated rhetorical response to Ayatollah Ruhollah Khomeini's portrayal of the United States as the Great Satan. Demonizing Iran may play well with the American audience, but it has already caused discomfort among America's European allies. Actual military action against Iran would be disastrous. But after the United States' success in Afghanistan, there may well be willingness in certain quarters within the Bush administration to entertain that idea, given its statements that Iran supports terrorism and wants to develop weapons of mass destruction.

Making an enemy of Iran — much less attacking it, even surgically — would have the effect of rallying the Iranian public behind the conservative clerics of the Islamic regime led by Ayatollah Ali Khamenei. The losers would be the voices of moderation and political reform among Iranians deeply frustrated with the domination of the hard-line clergy. Mohammad Khatami's lethargic presidency, which has been battered by these hard-liners, can hardly fulfill promises for civil liberties, the rule of law, democracy and political accountability.

But for the electorate that returned him to office with an overwhelming majority last year, Mr. Khatami is still the only option. An aggressive posture by America would give the regime's hard-liners new ability to embarrass Mr. Khatami, repudiate reforms and block further chances to normalize relations with the United States. Having made the rhetoric of "death to America" the centerpiece of the revolution, they cannot afford to abandon that cause now. There can be no underestimating the fear among the hardliners that the ultimate objective of the United States is to dislodge the clergy in power.

Indeed, certain adventurous elements within the regime might even welcome a limited military engagement with a superpower as a way of brightening their sagging fortunes. Memories of the Iraq-Iran war as an effective means of suppressing the regime's domestic opposition are still alive. Although the top clerical figures in the Iranian government will resist the temptation of engaging a superpower, knowing well the risks involved, Washington's threatening words give them an immediate reason to intensify their anti-American diatribe, which indirectly is aimed at Mr. Khatami as well.

Yet despite the internal power struggle, it is important to recognize that Iran is one of the more stable regimes of the Middle East. Destabilizing Iran would have a direct and immediate impact not only on the security of the Persian Gulf and the flow of Middle East oil (Iran has strategic command over the Strait of Hormuz), but on the international efforts to bring stability to Afghanistan. If militarily threatened, Iran is likely to engage in a range of actions to counter the United States and its regional allies.

For instance, it is not implausible for Iran to respond by entering into an implicit alliance with its foe, Iraq, another member of the "axis of evil." The normally unthinkable option of coming to terms with Saddam Hussein may be possible if the regime in Iran were to face a threat to its survival. Both nations may see a benefit to accommodating each other's security needs; neither would welcome an increased American presence on their border or in the region. Furthermore, as an intermediary power between Iraq and Saudia Arabia, with which it has developed closer ties, Iran is positioned to gain a greater strategic advantage in the Persian Gulf than it had in past decades.

Placing Iran on the enemies list may also encourage it to reassert its claims over the offshore Caspian oilfields that are in dispute with the Republic of Azerbaijan. Only last year, Iran reacted with a threat of military action when British Petroleum began its offshore oil exploration. This would be a serious setback for American oil interests and investment in that region. Increased tension between Iran and the United States would also allow Russia to regain its place in Iranian power politics as a counterbalance to Western powers.

Heightened tension also gives the hard-liners within the Iranian Revolutionary Guards, and their intelligence affiliates, a pretext to back the Lebanese Hezbollah in a new round of attacks against Israel. Under greater American pressure, those elements in Iran may seek to gain Palestinian sympathizers by providing support to Hezbollah and indirect aid to Islamic Jihad. Iran's alleged involvement in shipping arms to the Palestinians aboard the Karine A, though denied by the Iranians, could become the start of a new trend.

This kind of result would isolate the United States across a vast and crucial region stretching from the eastern Mediterranean to Central Asia. In terms of true security, the United States gains little by threatening Iran. And it stands to lose much: support in the Middle East for its actions in Afghanistan after the Sept. 11 attacks and credit as a responsible guarantor of the global order. In the Muslim world, action against Iran would add weight to the belief that the United States is primarily interested in advancing an Israeli agenda at the expense of regional stability. The United States and its allies should recognize Iran's longstanding role in Afghanistan through its support of the Northern Alliance and its sheltering of more than two million Afghan refugees.

The charge that Iran is producing weapons of mass destruction has never been substantiated. If Iran is developing a nuclear program, or chemical and biological weapons, a surgical military strike is unlikely to eliminate such projects entirely. The persistence of such threats in neighboring Iraq is a case in point. But unilateral military action by the United States, if successful, might well be used as license for other nations to take retaliatory actions against their real or perceived enemies. This potential effect is reason enough to oppose the use of force against Iran.

Iran's transition into a less autocratic regime has been slow, but it is coming. As a leader of the international community, the United States can support reformist change without appeasing the Islamic republic. It must remain critical of Iran's conduct on human rights and treatment of its voices of dissent. It should keep pressure on the hard-liners while being careful not to undermine the efforts of the weakened Khatami government to allow more social freedoms.


And it must not lose sight of the complexity of Iranian society, which has its own sense of cultural continuity and yet desires to break out of the isolation imposed after the revolution. The dynamics of a shift into a democratic society should be encouraged, not disrupted at the very moment when reform is supported by most Iranians. The success or failure of Iran's transformation will have important implications for the peaceful resolution of the Muslim world's acute political and religious predicament.


Abbas Amanat is a professor of history at Yale and the author of the forthcoming "In Search of Modern Iran."