Probe in to C.I.A. torture

“President Obama banned torture but officials say terrorist interrogation techniques prevented attacks, Bob Orr reports. Analyst Dan Bartlett spoke on the possibility of a criminal prosecution.”

0:42 – A C.I.A. contractor beat a prisoner with a heavy flash light and that prisoner died in custody.

…Since when do we call murder a “harsh tactic”? and the point that some (i.e. Dick Cheney) try to push down our throats that these “harsh tactics” saved lives is just plain silly and really belongs only on the 24. It’s silly for two reasons; we are Americans and do not torture, well at least not until Bush II. As a global power in this unipolar world we set the standard for the rest of the world–and what type of standard is this anyways. Secondly, if one were tortured while under investigation it is only logical to satisfy the your interrogators by answering with whatever they wanted to hear as to end the torture process. Eventually everyone will break if they are tortured for an extended period of time (like Khalid Sheik Mohammad being waterboarded 183 times), by break I don’t mean they will necessarily give actual, true insight into their activities. Indeed, KSM later boasted that he wasted our time/resources by giving false information and therefor sending agents after empty events.

Where Is the Outrage?

By Robert Scheer

Are we Americans truly savages or merely tone-deaf in matters of morality, and therefore more guilty of terminal indifference than venality? It’s a question demanding an answer in response to the publication of the detailed 370-page report on U.S. complicity in torture, issued last week by the Justice Department’s inspector general.

Because the report was widely cited in the media and easily accessed as a pdf file on the Internet, it is fair to assume that those of our citizens who remain ignorant of the extent of their government’s commitment to torture as an official policy have made a choice not to be informed. A less appealing conclusion would be that they are aware of the heinous acts fully authorized by our president but conclude that such barbarism is not inconsistent with that American way of life that we celebrate.

But that troubling assessment of moral indifference is contradicted by the scores of law enforcement officers, mostly from the FBI, who were so appalled by what they observed as routine official practice in the treatment of prisoners by the United States in Afghanistan, Iraq and Guantanamo that they risked their careers to officially complain. A few brave souls from the FBI even compiled a “war crimes file,” suggesting the unthinkable—that we might come to be judged as guilty by the standard we have imposed on others. Superiors in the Justice Department soon put a stop to such FBI efforts to hold CIA agents and other U.S. officials accountable for the crimes they committed.

That this systematic torture was carried out not by a few conveniently described “bad apples” but rather represented official policy condoned at the highest level of government was captured in one of those rare media reports that remind us why the Founding Fathers signed off on the First Amendment.

“These were not random acts,” The New York Times editorialized. “It is clear from the inspector general’s report that this was organized behavior by both civilian and military interrogators following the specific orders of top officials. The report shows what happens when an American president, his secretary of defense, his Justice Department and other top officials corrupt American law to rationalize and authorize the abuse, humiliation and torture of prisoners.”

One of those top officials, who stands revealed in the inspector general’s report as approving the torture policy, is Condoleezza Rice, who in her capacity as White House national security adviser turned away the concerns of then-Attorney General John D. Ashcroft as to the severe interrogation measures being employed. Rice, as ABC-TV reported in April, chaired the top-level meetings in 2002 in the White House Situation Room that signed off on the CIA treatment of prisoners—“whether they would be slapped, pushed, deprived of sleep or subjected to simulated drowning, called water boarding. …” According to the report, the former academic provost of Stanford University came down on the side of simulated drowning.

As further proof that women are not necessarily more squeamish than men in condoning such practices, the report offers examples of sexual and religious denigration of the mostly Muslim prisoners by female interrogators carrying out an official policy of “invasion of space by a female.” In one recorded instance observed by startled FBI agents, a female interrogator was seen with a prisoner “bending his thumbs back and grabbing his genitals … to cause him pain.” One of the agents testified that this was not “a case of a rogue interrogator acting on her own.” He said he witnessed a “pep rally” meeting conducted by a top Defense Department official “in which the interrogators were encouraged to get as close to the torture statute line as possible.”

(Continue reading: Truthdig)

MI5 accused of colluding in torture of terrorist suspects

British agents alleged to have questioned men at Pakistani interrogation centre after they had been brutally mistreated

The London headquarters of MI5. Photograph: Frank Baron

Officers of the Security Service, MI5, are being accused of “outsourcing” the torture of British citizens to a notorious Pakistani intelligence agency in an attempt to obtain information about terrorist plots and to secure convictions against al-Qaida suspects.

A number of British terrorism suspects who have been arrested in Pakistan at the request of UK authorities say their interrogation by Security Service officers, shortly after brutal torture at the hands of agents of Pakistan’s Inter-Services Intelligence agency (ISI), has convinced them that MI5 colluded in the mistreatment.

Those men have given detailed accounts of their alleged ordeals at the hands of the ISI over the last four years. Some of them appear to have been taken to the same secret interrogation centre in Rawalpindi, where they say they were repeatedly tortured before being questioned by MI5.

Tayab Ali, a London-based lawyer for two of the men, said: “I am left with no doubt that, at the very worst, the British Security Service instigates the illegal detention and torture of British citizens, and at the very best turns a blind eye to torture.”

One man from Manchester says that in 2006 he was beaten, whipped, deprived of sleep and had three fingernails slowly extracted by ISI agents at the Rawalpindi centre before being interrogated by two MI5 officers. A number of his alleged associates were questioned in Manchester at the same time and two were subsequently charged. This man’s lawyers say his fingernails were missing when they were eventually allowed to see him, more than a year after he was first detained. They say they have pathology reports that prove the nails were forcibly removed.

(Continue reading: The Guardian)

Israel Might Have Many More Spies Here, Officials Say

The elderly New Jersey man arrested last week on charges of spying for Israel years ago was probably still working for the Jewish state’s espionage service in tandem with another, as yet unidentified spy, former American intelligence officials say.

Ben-Ami Kadish, now 84, was employed as a mechanical engineer at a U.S. Army weapons center in New Jersey when he allegedly supplied his Israeli handler with classified military documents, according to charges filed last week.

The handler was named only as “CC-1,” or co-conspirator 1, in the criminal complaint. But its description of him as the same man who was handling the notorious Israeli mole Jonathan Pollard all but identified him as Yosef Yagur, formerly the consul for scientific affairs at the Israeli consulate in New York.

Pollard, who gave Yagur thousands of highly classified documents while working as a navy intelligence analyst in the 1980s, is in the 21st year of a life sentence for espionage.

Kadish, who worked at the U.S. Army’s Picatinny Arsenal in Dover, N.J., from 1963 to 1990, could also spend the waning years of his life in jail if he is convicted.

A former senior CIA counterintelligence operative believes the case “will never go to trial, because of all the ugly stuff that would come out” about Israeli activities in the United States.

Indeed, Justice Department attorneys have fought to keep “ugly stuff” from emerging in the trial of two officials of the American Israel Public Affairs Committee, or AIPAC, charged with accepting classified documents from Pentagon official Larry Franklin.

But the federal judge in the case has indicated he might not go along with their strategy. Last month Judge Thomas Ellis III indefinitely postponed the trial of AIPAC officials Steven Rosen and Keith Weissman, which was scheduled to open next week.

(Continue reading: CQ Politics)

Israel Intends to ‘Clean Gaza Out’ After Bush Visit

There is a heightened sense in the security establishment that a broad-scale ground incursion inside the Gaza Strip is necessary this summer to deal a severe blow to Hamas’s infrastructure, sources in Jerusalem said Wednesday, following the death of three soldiers in a Gaza ambush.

According to the sources, the incursion – similar but more difficult than Operation Defensive Shield in the West Bank in 2002 – would not take place until about a month or a month-and-a-half after US President George W. Bush’s planned visit here in mid-May. By then, the last of the world’s leaders to have come here to celebrate the country’s 60th anniversary would have left. The timing would also place the operation in the middle of summer, considered an optimal time for this type of operation.

(Continue reading: Jerusalem Post)

DARPA Setting Up Brain Scanners

Imagine a world of streets lined with video cameras that alert authorities to any suspicious activity. A world where police officers can read the minds of potential criminals and arrest them before they commit any crimes. A world in which a suspect who lies under questioning gets nabbed immediately because his brain has given him away.

Though that may sound a lot like the plot of the 2002 movie “Minority Report,” starring Tom Cruise and based on a Philip K. Dick novel, I’m not talking about science fiction here; it turns out we’re not so far away from that world. But does it sound like a very safe place, or a very scary one?

It’s a question I think we should be asking as the federal government invests millions of dollars in emerging technology aimed at detecting and decoding brain activity. And though government funding focuses on military uses for these new gizmos, they can and do end up in the hands of civilian law enforcement and in commercial applications. As spending continues and neurotechnology advances, that imagined world is no longer the stuff of science fiction or futuristic movies, and we postpone at our peril confronting the ethical and legal dilemmas it poses for a society that values not just personal safety but civil liberty as well.

(Continue reading: Washington Post)

Is the Pentagon Funding Isomer Bombs Again

 

 

The Pentagon’s Defense Threat Reduction Agency is funding work looking at releasing energy from nuclear isomers, an area of research that was once supported by the Defense Advanced Research Projects Agency as part an investigation into a new class of explosives. Now, according to news reports, two research groups are getting funding from DTRA for work on nuclear isomers: Youngstown State University and the Naval Research Laboratory.

DARPA for several years sponsored research into “triggering” hafnium-178m2 — a program that was canceled after a slew of scientific objections were raised and Congress took away funding for it. That wasn’t exactly the end of military interest. As I’ve written before, DTRA in 2006 held a series of conferences focusing on nuclear isomers, cold fusion, and antimatter, with an eye at looking at whether the agency should fund any of these areas.  [For those who want all the nitty gritty details on the very weird life and death of DARPA's isomer bomb, you can read my book, or for a shorter overview, you can read David Hambling's New Scientist article along with myWashington Post Magazine article.]

Does that mean DTRA is funding an isomer bomb? Well, no, not really. Or maybe a little. It depends on how you look at it. One one hand, it’s no secret that one of the main interests of DTRA, a successor to the Defense Nuclear Agency, is in things that go “boom.” But Youngstown State University, which is getting $1 million of the DTRA funding, was part of a group that actually negated the results on which the original DARPA program was based (that’s usually the time when you start looking for a new sponsor). So, it’s much more likely that the DTRA program is a basic science program, which the agency hopes might one day in the future pan out into applications, be it as an energy source or, less likely, some sort of weapon.

As for the Naval Research Laboratory’s involvement in nuclear isomers, well, who knows, but I’m guessing it’s a very basic research effort. The lab investigates all sorts of things, including a semi-closeted cold fusion program. At the very least, It will gives them all something to chat about over drinks on a Friday.

/danger room

 

Secret US plan for military future in Iraq

Document outlines powers but sets no time limit on troop presence

by Seumas Milne

A confidential draft agreement covering the future of US forces in Iraq, passed to the Guardian, shows that provision is being made for an open-ended military presence in the country.

The draft strategic framework agreement between the US and Iraqi governments, dated March 7 and marked “secret” and “sensitive”, is intended to replace the existing UN mandate and authorises the US to “conduct military operations in Iraq and to detain individuals when necessary for imperative reasons of security” without time limit.

The authorisation is described as “temporary” and the agreement says the US “does not desire permanent bases or a permanent military presence in Iraq”. But the absence of a time limit or restrictions on the US and other coalition forces – including the British – in the country means it is likely to be strongly opposed in Iraq and the US.

Iraqi critics point out that the agreement contains no limits on numbers of US forces, the weapons they are able to deploy, their legal status or powers over Iraqi citizens, going far beyond long-term US security agreements with other countries. The agreement is intended to govern the status of the US military and other members of the multinational force.

Following recent clashes between Iraqi troops and Moqtada al-Sadr’s Mahdi army in Basra, and threats by the Iraqi government to ban his supporters from regional elections in the autumn, anti-occupation Sadrists and Sunni parties are expected to mount strong opposition in parliament to the agreement, which the US wants to see finalised by the end of July. The UN mandate expires at the end of the year.

One well-placed Iraqi Sunni political source said yesterday: “The feeling in Baghdad is that this agreement is going to be rejected in its current form, particularly after the events of the last couple of weeks. The government is more or less happy with it as it is, but parliament is a different matter.”

It is also likely to prove controversial in Washington, where it has been criticised by Democratic presidential candidate Hillary Clinton, who has accused the administration of seeking to tie the hands of the next president by committing to Iraq’s protection by US forces.

The defence secretary, Robert Gates, argued in February that the planned agreement would be similar to dozens of “status of forces” pacts the US has around the world and would not commit it to defend Iraq. But Democratic Congress members, including Senator Edward Kennedy, a senior member of the armed services committee, have said it goes well beyond other such agreements and amounts to a treaty, which has to be ratified by the Senate under the constitution.

Administration officials have conceded that if the agreement were to include security guarantees to Iraq, it would have to go before Congress. But the leaked draft only states that it is “in the mutual interest of the United States and Iraq that Iraq maintain its sovereignty, territorial integrity and political independence and that external threats to Iraq be deterred. Accordingly, the US and Iraq are to consult immediately whenever the territorial integrity or political independence of Iraq is threatened.”

Significantly – given the tension between the US and Iran, and the latter’s close relations with the Iraqi administration’s Shia parties – the draft agreement specifies that the “US does not seek to use Iraq territory as a platform for offensive operations against other states”.

General David Petraeus, US commander in Iraq, is to face questioning from all three presidential candidates on Capitol Hill today when he reports to the Senate on his surge strategy, which increased US forces in Iraq by about 30,000 last year.

Both Clinton and Democratic rival Barack Obama are committed to beginning troop withdrawals from Iraq. Republican senator John McCain has pledged to maintain troop levels until the country is secure.

via/ The Guardian

Yoo Torture Memo Says Fourth Amendment Doesn’t Apply in War on Terror

 

John Yoo, the former Bush Administration lawyer who now teaches at UC Berkeley’s law school, authored the torture memo that cleared the way for the U.S. military to begin torturing suspected Al Qaeda members in Guantanamo and black site prisons, as well as Iraqis in Abu Ghraib. 

Perhaps less well known is that Yoo also wrote a legal opinion blessing the president’s targeting of American citizens for wiretapping, a memo that even members of Congress have not seen.

There have been clues before in the administration’s defense of its wiretapping program. For instance, the Justice Department said (.pdf) the Authorization to Use Military Force and the president’s war making powers in the Constitution.

But in the Yoo torture memo (.pdf) which was just released and declassified yesterday, Yoo himself seems to clue us in:

Citing cases that prevented companies from suing the U.S. government for losses they sustained overseas during wartime, You writes “These cases and the untenable consequences for the President’s conduct of a war that would result from the application of the Due Process Cluse demonstrate its inapplicability during wartime–whether to the conduct of interrogations or the detention of enemy aliens.”

Lest it not be clear enough that Yoo is arguing the President is King in wartime, thanks to the Constitution’s Article II powers, two footnotes surrounding the former sentence make it clear.

In footnote 10, Yoo writes “our Office recently concluded that the Fourth Amendment had no application todomestic military operations.”

Remember that Bush said the wiretapping program was part of his war on terrorism.

And there it is. In the war on terrorism, the bill of rights does not apply.

Footnote 11 adds to it: “We conclude that the restrictions outlined in the Fifth Amendment simply do not address actions the Executive takes in conducting a military campaign against the Nation’s enemies.”

Congress still hasn’t seen this memo, and yet they are prepared to hand over more wiretapping powers to this Administration.

And John Yoo teaches at UC-Berkeley.

Meanwhile not a single Congressional committee will let AT&T whistle blower Mark Klein testify.

via/ Threat Level

 

U.S. extends Blackwater’s Baghdad work for one year

Source: Reuters

WASHINGTON – U.S. private security firm Blackwater’s deal to protect American diplomats in Baghdad will be extended for a year while the FBI investigates a 2007 incident in which the company’s guards are accused of killing 17 Iraqis, the State Department said on Friday.

“I have requested and received approval to have task order six — which Blackwater has to provide personal protective services in Baghdad — renewed … for one year,” the head of diplomatic security, Gregory Starr, told reporters.

The September 2005 shooting incident in Baghdad enraged the Iraqi government and triggered an investigation by the U.S. Federal Bureau of Investigation into what happened and whether any crimes might have been committed.

A measure issued by the U.S.-led Coalition Provisional Authority in 2004 prevents foreign security contractors from being prosecuted in local courts. It is unclear whether they could be prosecuted under U.S. law.

After the incident, the State Department changed several elements of the contract, including tightening up rules of engagement, putting cameras on all convoys and having a diplomatic security officer ride along with the detail.

Starr said Blackwater was operating with the agreement of the Iraqi government and he did not know when the FBI’s investigation of the incident would be completed.

Asked whether the Blackwater Baghdad deal could be scrapped if the FBI investigation found wrongdoing, Starr said: “We can terminate contracts at the convenience of the government if we have to.”

“I am not going to prejudge what the FBI is going to find in their investigation. I think really, it is complex. I think that the U.S. government needs protective services,” he said.

“Essentially I think they do a very good job. The September 16th incident was a tragedy. It has to be investigated carefully,” he added.

“I am concerned (about the Iraqi response) and yet at the same time there have only been about three incidents, three escalation of force incidents, since September 16,” he said.

Israel, U.S. plan to release details on Syria attack

By Barak Ravid and Amos Harel
Source: Haaretz 

Israel and the United States are coordinating the release of details on the air force strike in Syria last September, which foreign reports claim targeted a nuclear installation Syria was constructing with North Korean assistance. American officials may reveal details of the strike later this month during congressional hearings. 

Even though the defense establishment in Israel is opposed to any publication of details of the attack, the Prime Minister’s Bureau and U.S. President George W. Bush’s administration are of the opinion that it is now possible to reveal details because there is little chance of a conflagration as a result of a Syrian decision to avenge the attack. 

Details of the attack are likely to be revealed by senior Bush administration officials during hearings before Congress. Advisers to Prime Minister Ehud Olmert, Yoram Turbowicz and Shalom Turjeman, discussed the issue last week in Washington with senior U.S. intelligence officials, and National Security Adviser Stephen Hadley. 

During the meetings, the two sides agreed on which details of the attack to make public and which details could have negative implications. According to foreign reports, Israel transfered to the U.S. detailed intelligence on the installation attacked, and the two sides agreed not to reveal any details without prior coordination. 

The view in Washington and in Jerusalem is that publishing details of the attack will bolster Israel’s deterrence and may even lead Syria to cool its close ties with Iran and North Korea. 

According to the American assessments, the revelations about the attack will also bolster its hand in negotiations with North Korea on dismantling its nuclear arms. 

However, the Israel defense establishment is strongly opposed to revealing any details of the attack in Syria and expressed concern that any airing of the details of the attack will result in lifting the strict censorship that was imposed in Israel on this incident. 

Senior figures in the defense establishment and the Israel Defense Forces said in recent day that Israel must convince the Americans to deliver the report to Congress “in closed session.” 

Intelligence analysts in Israel maintain that any further release of the details on the strike will contribute to the already tense situation between Syria and Israel, which has been exacerbated in part because of Hezbollah’s plans to avenge the assassination of the group’s terrorist mastermind, Imad Mughniyah. 

Any official release of the details of the attack and the nature of the installation may push Syria’s Bashar Assad into a corner and put pressure him to respond, say intelligence officials. 

The possibility of details being made public has also contributed to the mutual suspicions between the PMO and the Defense Minister’s Bureau. In political circles it is now commonly accepted that the release of details of the attack may help bolster the public image of Prime Minister Ehud Olmert. Some politicians have offered assessments that Olmert may decide to lift the curtain on details of the attack close to the 60th anniversary of Israel’s independence, in early May. 

Other political sources say that the American revelations on this matter will not result in a change in Israel’s censorship policy, and insist that Olmert will not discuss the subject of the attack during holiday interviews. 

The hearings at the House Intelligence Committee may be held in the coming weeks. Congressmen have included in the bill on the intelligence budget that American intelligence agencies will not be given large portions of their budget unless they reveal in full the details of the strike in Syria and the nuclear cooperation between Pyongyang and Damascus. 

This has led U.S. and Israeli officials to conclude that American officials will release details of the strike during the hearings. 

Talks between the U.S. and North Korea are schedule to resume tomorrow in Singapore. One of the American conditions for lifting the sanctions on Pyongyang is for it to expose its nuclear collaboration with other countries, which North Korea maintains does not exist. According to South Korean media sources, Pyongyang has agreed to provide the U.S. with information on its nuclear cooperation with Syria, on condition that Washington will not make this public. The same sources stated that the U.S. has given North Korea a list of engineers that are suspected of involvement in the construction of the installation that was targeted in Syria. 

Meanwhile, readiness levels are high at Northern Command and in security for Israeli missions abroad, as well as at airlines, as concerns remain that Hezbollah will try to avenge the assassination of its terrorist mastermind, Imad Mughniyah in February. 

The statement by Defense Minister Ehud Barak last week, that Israel would retaliate with a heavy hand against any attack, was made following deliberations with intelligence officials. There are concerns that an order to carry out a terrorist attack has already been issued – and Barak’s tough words were meant to signal Hezbollah and its patrons, Syria and Iran, that Israel will respond to any attack.

Clintons report $109.2 million since 2000

Income information revealed in newly released tax data

Jackpot: Billary scores $109 mil since leaving office; Update: $20.4 million in 2007

And so the long-awaited tax returns are duly dumped late on a Friday afternoon, when the media’s busy remembering MLK. Here’s the snapshot via Drudge but you’re better off with the summary at her campaign site, where the individual returns are posted. 31% went to the feds, 9.5% to charity (much of it, I assume, to BJ’s Global Initiative):

2000-2007 Returns
Feds Taxes Paid: $33.7 million
Charity: $10.2 million
Her Senate Salary: $1,051,606
His Presidential Pension: $1,217,250
Her Book Income: $10,457,083
His Book Income: $29,580,525
His Speech Income: $51,855,599

That leaves $20 million momentarily unaccounted for, although it’s not hard to guess what sorts of activities generated it. An ex-president has influence to peddle, and a-peddling it he is.

[Senate ethics] disclosures do not require Sen. Clinton to fully report her husband’s income, which obscures the picture of how much the former president has made in his business dealings with longtime friends and fundraisers.

For example, an examination of the records reveals her husband is a partner in an investment fund, Yucaipa Global Partnership, registered in the Cayman Islands, and was paid “guaranteed payments to partner.” Sen. Clinton’s forms do not list the exact amount of her husband’s payments, only that they totaled more than $1,000 over four years.

“No average person has interest and funds in the Cayman Islands. This is all the above-average, non-tax-paying, super rich,” said Jack Blum, an attorney and leading expert on offshore tax havens.

Jay Carson, a spokesperson for Sen. Clinton’s presidential campaign, said the Yucaipa global fund was organized in the Cayman Islands to attract foreign investors. “Each investor or partner in the fund pays the taxes they owe in their home country. For U.S. citizens like Bill Clinton, that means he pays U.S. taxes on his income from this fund, which he does,” said Carson.

The Journal reported that he stands to make $20 million from “advising” Ron Burkle but Hillary’s spokesman disputes that, too.

Most of the scrutiny will be on the effective tax rate they’re paying but at first blush I’m struck by how little of their considerable fortune they’ve been willing to inject into her campaign given the shortfall vis-a-vis Obama. That $5 million loan got a lot of attention but it’s peanuts compared to what Romney (who, admittedly, is worth much more than they are) put into his campaign. If electing her president is their shared, all-consuming ambition, why so stingy? They’ll have a money machine on the lecture circuit for the rest of their lives no matter what happens. Go for broke.

Update: Comments from the Headlines item have been imported.

Update: No return yet for 2007, but here’s a snapshot from the PDF posted at the campaign site:

That’s 20% of his speech income for the past eight seven years, all amassed during 12 months in which he’s been busy with the campaign. Having her run for president is good for business, I guess. Either that or the “fees” he’s paid are actually a backdoor way for major donors to make massive contributions to her campaign by paying him for “services.” But far be it from me to accuse the Clintons of a practice so shady.

Update: Cindy McCain may herself be worth $100 million, but her prenup with Maverick evidently keeps most of that in her name.

Update: Obama’s been donating more to charity as a percentage of his income over time — from one percent in 2004 to 4.7 percent in 2005 to 6.1 percent in 2006 — but he still lags behind Billary.

//hot air//

The Federal Reserve is a Private Financial Institution

Text of court ruling and analysis

Court Rules Federal Reserve is Privately Owned

Case Reveals Fed’s Status as a Private Institution

 

---

Below are excerpts from a court case proving the Federal Reserve system’s status. As you will see, the court ruled that the Federal Reserve Banks are “independent, privately owned and locally controlled corporations”, and there is not sufficient “federal government control over ‘detailed physical performance’ and ‘day to day operation’” of the Federal Reserve Bank for it to be considered a federal agency:

 

Lewis v. United States, 680 F.2d 1239 (1982)

John L. Lewis, Plaintiff/Appellant,v.United States of America, Defendant/Appellee.

No. 80-5905United States Court of Appeals, Ninth Circuit.Submitted March 2, 1982.Decided April 19, 1982.As Amended June 24, 1982.

Plaintiff, who was injured by vehicle owned and operated by a federal reserve bank, brought action alleging jurisdiction under the Federal Tort Claims Act. The United States District Court for the Central District of California, David W. Williams, J., dismissed holding that federal reserve bank was not a federal agency within meaning of Act and that the court therefore lacked subject-matter jurisdiction. Appeal was taken. The Court of Appeals, Poole, Circuit Judge, held that federal reserve banks are not federal instrumentalities for purposes of the Act, but are independent, privately owned and locally controlled corporations.

Affirmed.

1. United States

There are no sharp criteria for determining whether an entity is a federal agency within meaning of the Federal Tort Claims Act, but critical factor is existence of federal government control over “detailed physical performance” and “day to day operation” of an entity. . . .

2. United States

Federal reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations in light of fact that direct supervision and control of each bank is exercised by board of directors, federal reserve banks, though heavily regulated, are locally controlled by their member banks, banks are listed neither as “wholly owned” government corporations nor as “mixed ownership” corporations; federal reserve banks receive no appropriated funds from Congress and the banks are empowered to sue and be sued in their own names. . . .

3. United States

Under the Federal Tort Claims Act, federal liability is narrowly based on traditional agency principles and does not necessarily lie when a tortfeasor simply works for an entity, like the Reserve Bank, which performs important activities for the government. . . .

4. Taxation

The Reserve Banks are deemed to be federal instrumentalities for purposes of immunity from state taxation.

5. States Taxation

Tests for determining whether an entity is federal instrumentality for purposes of protection from state or local action or taxation, is very broad: whether entity performs important governmental function.

 

————–

Lafayette L. Blair, Compton, Cal., for plaintiff/appellant.

James R. Sullivan, Asst. U.S. Atty., Los Angeles, Cal., argued, for defendant/appellee; Andrea Sheridan Ordin, U.S. Atty., Los Angeles, Cal., on brief.

Appeal from the United States District Court for the Central District of California.

Before Poole and Boochever, Circuit Judges, and Soloman, District Judge. (The Honorable Gus J. Solomon, Senior District Judge for the District of Oregon, sitting by designation)

Poole, Circuit Judge:

On July 27, 1979, appellant John Lewis was injured by a vehicle owned and operated by the Los Angeles branch of the Federal Reserve Bank of San Francisco. Lewis brought this action in district court alleging jurisdiction under the Federal Tort Clains Act (the Act), 28 U.S.C. Sect. 1346(b). The United States moved to dismiss for lack of subject matter jurisdiction. The district court dismissed, holding that the Federal Reserve Bank is not a federal agency within the meaning of the Act and that the court therefore lacked subject matter jurisdiction. We affirm.

In enacting the Federal Tort Claims Act, Congress provided a limited waiver of the sovereign immunity of the United States for certain torts of federal employees. . . . Specifically, the Act creates liability for injuries “caused by the negligent or wrongful act or omission” of an employee of any federal agency acting within the scope of his office or employment. . . . “Federal agency” is defined as:

the executive departments, the military departments, independent      establishments of the United States, and corporations acting      primarily as instrumentalities of the United States, but does not include any contractors with the United States.         include any contractors with the United States. 

28 U.S.C. Sect. 2671. The liability of the United States for the negligence of a Federal Reserve Bank employee depends, therefore, on whether the Bank is a federal agency under Sect. 2671.

[1,2] There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act, but the critical factor is the existence of federal government control over the “detailed physical performance” and “day to day operation” of that entity. . . . Other factors courts have considered include whether the entity is an independent corporation . . ., whether the government is involved in the entity’s finances. . . ., and whether the mission of the entity furthers the policy of the United States, . . . Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purpose of the FTCA, but are independent, privately owned and locally controlled corporations.

Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bank’s nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. Sect. 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. Sect. 341, and appoint officers to implement and supervise daily Bank activities. These activites include collecting and clearing checks, making advances to private and commercial entities, holding reserves for member banks, discounting the notes of member banks, and buying and selling securities on the open market. See 12 U.S.C. Sub-Sect. 341-361.

Each Bank is statutorily empowered to conduct these activites without day to day direction from the federal government. Thus, for example, the interest rates on advances to member banks, individuals, partnerships, and corporations are set by each Reserve Bank and their decisions regarding the purchase and sale of securities are likewise independently made.

It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks:

 

     It is proposed that the Government shall retain sufficient power over the reserve banks to enable it to exercise a direct authority when necessary to do so, but that it shall in no way attempt to carry on through its own mechanism the routine operations and banking which require detailed knowledge of local and individual credit and which determine the funds of the community in any given instance.  In other words, the reserve-bank plan retains to the Government power over the exercise of the broader banking functions, while it leaves to individuals and privately owned institutions the actual direction of routine.

H.R. Report No. 69 Cong. 1st Sess. 18-19 (1913).

The fact that the Federal Reserve Board regulates the Reserve Banks does not make them federal agencies under the Act. In United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976), the Supreme Court held that a community action agency was not a federal agency or instrumentality for purposes of the Act, even though the agency was organized under federal regulations and heavily funded by the federal government. Because the agency’s day to day operation was not supervised by the federal government, but by local officials, the Court refused to extend federal tort liability for the negligence of the agency’s employees. Similarly, the Federal Reserve Banks, though heavily regulated, are locally controlled by their member banks. Unlike typical federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by worker’s compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees travelling on Bank business are not subject to federal travel regulations and do not receive government employee discounts on lodging and services.

The Banks are listed neither as “wholly owned” government corporations under 31 U.S.C. Sect. 846 nor as “mixed ownership” corporations under 31 U.S.C. Sect. 856, a factor considered is Pearl v. United States, 230 F.2d 243 (10th Cir. 1956), which held that the Civil Air Patrol is not a federal agency under the Act. Closely resembling the status of the Federal Reserve Bank, the Civil Air Patrol is a non-profit, federally chartered corporation organized to serve the public welfare. But because Congress’ control over the Civil Air Patrol is limited and the corporation is not designated as a wholly owned or mixed ownership government corporation under 31 U.S.C. Sub-Sect. 846 and 856, the court concluded that the corporation is a non-governmental, independent entity, not covered under the Act.

Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds from Congress. . . .

Finally, the Banks are empowered to sue and be sued in their own name. 12 U.S.C. Sect. 341. They carry their own liability insurance and typically process and handle their own claims. In the past, the Banks have defended against tort claims directly, through private counsel, not government attorneys . . ., and they have never been required to settle tort claims under the administrative procedure of 28 U.S.C. Sect. 2672. The waiver of sovereign immunity contained in the Act would therefore appear to be inapposite to the Banks who have not historically claimed or received general immunity from judicial process.

[3] The Reserve Banks have properly been held to be federal instrumentalities for some purposes. In United States v. Hollingshead, 672 F.2d 751 (9th Cir. 1982), this court held that a Federal Reserve Bank employee who was responsible for recommending expenditure of federal funds was a “public official” under the Federal Bribery Statute. That statute broadly defines public official to include any person acting “for or on behalf of the Government.” . . . The test for determining status as a public official turns on whether there is “substantial federal involvement” in the defendant’s activities. United States v. Hollingshead, 672 F.2d at 754. In contrast, under the FTCA, federal liability is narrowly based on traditional agency principles and does not necessarily lie when the tortfeasor simply works for an entity, like the Reserve Banks, which perform important activities for the government.

[4, 5] The Reserve Banks are deemed to be federal instrumentalities for purposes of immunity from state taxation. . . . The test for determining whether an entity is a federal instrumentality for purposes of protection from state or local action or taxation, however, is very broad: whether the entity performs an important governmental function. . . . The Reserve Banks, which further the nation’s fiscal policy, clearly perform an important governmental function.

Performance of an important governmental function, however, is but a single factor and not determinative in tort claims actions. . . . State taxation has traditionally been viewed as a greater obstacle to an entity’s ability to perform federal functions than exposure to judicial process; therefore tax immunity is liberally applied. . . . Federal tort liability, however, is based on traditional agency principles and thus depends upon the principal’s ability to control the actions of his agent, and not simply upon whether the entity performs an important governmental function. . . .

Brinks Inc. v. Board of Governors of the Federal Reserve System, 466 F.Supp. 116 (D.D.C.1979), held that a Federal Reserve Bank is a federal instrumentality for purposes of the Service Contract Act, 41 U.S.C. Sect. 351. Citing Federal Reserve Bank of Boston and Federal Reserve Bank of Minneapolis, the court applied the “important governmental function” test and concluded that the term “Federal Government” in the Service Contract Act must be “liberally construed to effectuate the Act’s humanitarian purpose of providing minimum wage and fringe benefit protection to individuals performing contracts with the federal government.” Id. 288 Mich. at 120, 284 N.W.2d 667.

Such a liberal construction of the term “federal agency” for purposes of the Act is unwarranted. Unlike in Brinks, plaintiffs are not without a forum in which to seek a remedy, for they may bring an appropriate state tort claim directly against the Bank; and if successful, their prospects of recovery are bright since the institutions are both highly solvent and amply insured.

For these reasons we hold that the Reserve Banks are not federal agencies for purposes of the Federal Tort Claims Act and we affirm the judgement of the district court.

AFFIRMED.

 

---

It is clear from this that in some circumstances, the Federal Reserve Bank can be considered a government “instrumentality”, but cannot be considered a “federal agency”, because the term carries with it the assumption that the federal government has direct oversight over what the Fed does. Of course it does not, because most people who know about this subject know that the Fed is “politically independent.”

The only area where one might disagree with the judge’s decision is where he states that the Fed furthers the federal government’s fiscal policy, and therefore performs an important governmental function. While we would like to think that the federal government and the Fed work cooperatively with each other, and they may on occasion, the Fed is by no means required to do so. One example is where Rep. Wright Patman, Chairman of the House Banking Committee, said in the Congressional Record back in the ’60s, that depending on the temperament of the Fed’s Chairman, sometimes the Fed worked with the government’s fiscal policy, and other times either went in the complete opposite direction, or threatens to do so in order to influence policy.

The common claim that the Fed is accountable to the government, because it is required to report to Congress on its activities annually, is incorrect. The reports to Congress mean little unless what the Chairman reports can be verified by complete records. From its founding to this day, the Fed has never undergone a complete independent audit. Congress time after time has requested that the Fed voluntarily submit to a complete audit, and every time, it refuses.

Those in the know about the Fed, realize that it does keep certain records secret. The soon-to-be-former Chairman of the House Banking Committee, Henry Gonzales, has spoken on record repeatedly about how the Fed at one point says it does not have certain requested records, and then it is found through investigation that it in fact does have those records, or at least used to. It would appear that the Fed Chairman can say anything he wants to to Congress, and they’ll have to accept what he says, because verification of what he says is not always possible.

//centre for research on globalization//

 

Patriot Act haunts Google service

Google Inc. is a year into its ground-shifting strategy to change the way people communicate and work.

But the initiative to reinvent the way that people use software is running headlong into another new phenomenon of the information technology age: the unprecedented powers of security officials in the United States to conduct surveillance on communications.

Eighteen months ago, Lakehead University in Thunder Bay, Ont., had an outdated computer system that was crashing daily and in desperate need of an overhaul. A new installation would have cost more than $1-million and taken months to implement. Google’s service, however, took just 30 days to set up, didn’t cost the university a penny and gave nearly 8,000 students and faculty leading-edge software, said Michael Pawlowski, Lakehead’s vice-president of administration and finance.

U.S.-based Google spotlighted the university as one of the first to adopt its software model of the future, and today Mr. Pawlowski boasts the move was the right thing for Lakehead, saving it hundreds of thousands of dollars in annual operating costs. But he notes one trade-off: The faculty was told not to transmit any private data over the system, including student marks.

The U.S. Patriot Act, passed in the weeks after the September, 2001, terrorist attacks in the United States, gives authorities the means to secretly view personal data held by U.S. organizations. It is at odds with Canada’s privacy laws, which require organizations to protect private information and inform individuals when their data has been shared.

At Lakehead, the deal with Google sparked a backlash. “The [university] did this on the cheap. By getting this free from Google, they gave away our rights,” said Tom Puk, past president of Lakehead’s faculty association, which filed a grievance against Lakehead administration that’s still in arbitration.

Professors say the Google deal broke terms of their collective agreement that guarantees members the right to private communications. Mr. Puk says teachers want an in-house system that doesn’t let third parties see their e-mails.

Some other organizations are banning Google’s innovative tools outright to avoid the prospect of U.S. spooks combing through their data. Security experts say many firms are only just starting to realize the risks they assume by embracing Web-based collaborative tools hosted by a U.S. company, a problem even more acute in Canada where federal privacy rules are at odds with U.S. security measures.

“You have to decide which law you are going to break,” said Darren Meister, associate professor of information systems at the Richard Ivey School of Business, who specializes in how technology enhances organizational effectiveness. “If I were a business manager, I would want to be very careful about what kind of data I made accessible to U.S. law enforcement.”

Using their new powers under the Patriot Act, U.S. intelligence officials can scan documents, pick out certain words and create profiles of the authors – a frightening challenge to academic freedom, Mr. Puk said.

For instance, a Lakehead researcher with a Middle Eastern name, researching anthrax or nuclear energy, might find himself denied entry to the United States without ever knowing why. “You would have no idea what they are up to with your information until, perhaps, it is too late,” Mr. Puk said. “We don’t want to be subject to laws of the Patriot Act.”

Google’s free Web tools are advertising-based and they automatically extract information from personal content to build a profile for advertisers. Lakehead professors also object to this feature, although Mr. Puk says Google has refrained from attaching ads until the grievance is settled.

The privacy issue goes far beyond academia. In Toronto, at SickKids Foundation, which has the largest endowment of any Canadian hospital, employees have been keen to use Google tools. But the foundation’s IT department blocked access for two reasons.

“Wherever possible, we keep our donor and patient records in Canada, as trying to enforce privacy laws in other jurisdictions is complex and expensive,” said Chris Woodill, director of IT and new media at SickKids Foundation. Second, free hosted software offers limited support and no formal legal contract, limiting an organization’s ability to demand additional privacy or security measures, he said.

Google says it has a strong track record in regard to protecting customers’ data. The firm cites a court case it fought in 2006 against attempts by the U.S. Justice Department to subpoena customer search records. “We will continue to be strong advocates on behalf of protecting our users’ data,” said Peter Fleischer, Google’s global privacy counsel.

But the Mountain View, Calif.-based company will not discuss how often government agencies demand access to its customers’ information or whether content on its new Web-based collaborative tools has been the subject of any reviews under the Patriot Act.

Montreal security strategist Jeffrey Posluns says Google’s software suite may suit some small businesses because cost savings are significant. But he warns that the deciding factor should be the sensitivity of the organization’s information.

//globe and mail//

Third Marine Is Cleared of Haditha Charges, Given Immunity

The Marine Corps yesterday dismissed all charges against one of the Marines accused of killing women and children in the Iraqi town of Haditha in late 2005, the third time a Marine linked to the slayings has been exonerated after one of the most notorious episodes of the war.

Lance Cpl. Stephen B. Tatum, who has admitted shooting civilians inside their homes as part of a pursuit of insurgents, was cleared and granted immunity to testify in further hearings related to the investigation. The move leaves only Staff Sgt. Frank D. Wuterich to face charges in connection with the shootings on Nov. 19, 2005. As many as two dozen civilians were killed that day after a roadside bomb hit the Marines’ convoy and killed a member of their unit.

Tatum’s trial was slated to begin yesterday at Camp Pendleton in California, but Marine Corps officials announced that his charges were dismissed “in order to continue to pursue the truth-seeking process into the Haditha incident.” Tatum’s lawyers said the decision was made as they were preparing for the case to go to trial.

Tatum had been charged with involuntary manslaughter, reckless endangerment and aggravated assault. He was one of four Marines charged in the killings after investigators found that they entered homes and killed unarmed women and small children, some of whom were in their pajamas and lying on a bed.

Although the Marines were at first accused of going on a rampage, the case has evolved into a far more complex examination of the Corps’ rules of engagement and the general conduct of wartime operations in hostile residential areas.

Officials close to the Haditha case said they think prosecutors dismissed the charges in order to pursue Wuterich aggressively at trial. The cases against three of the Marines accused of shooting civilians have fallen apart, and Wuterich remains the only one left for prosecutors to target for accountability. Wuterich led the Marine squad and allegedly told his troops, as they approached a group of civilian homes that day, to shoot first and ask questions later.

Jack Zimmermann, a civilian lawyer who represents Tatum, said yesterday that his client will testify if called as a witness but emphasized that no deal was struck in exchange for his testimony. Tatum’s statements to investigators place Wuterich in the homes and indicate that Wuterich was shooting at civilians, and that Tatum followed suit. Wuterich’s lawyers have disputed that account.

“Lance Corporal Tatum wants to make it clear that he’s not a witness against Wuterich, that he’s going to say what he saw,” Zimmermann said. “He responded to an attack the way he was trained to do. He was following his training. We wish this dismissal had occurred months earlier, but this is the right result.”

Lt. Col. Paul J. Ware, an investigating officer in the case, recommended last year that Tatum not face any charges after finding that he shot people in the houses because Wuterich was doing so. Ware said that although the deaths were regrettable, it is only in hindsight that Tatum’s actions can be judged inappropriate.

“LCpl Tatum shot and killed people in houses 1 and 2, but the reason he did so was because of his training and the circumstances he was placed in, not to exact revenge and commit murder,” Ware wrote in August. Lt. Gen. James T. Mattis went against the recommendation and sent the case to trial.

Marine officials declined to comment on the dismissal ordered by Lt. Gen. Samuel T. Helland, who took over command of I Marine Expeditionary Forces after Mattis was promoted.

So far, three Marines with Kilo Company, 3rd Battalion, 1st Marines have been cleared, including Tatum, and Wuterich is the only one left to face charges directly relating to the shootings. Two Marine officers are facing charges related to the aftermath of the incident, allegedly either interfering with the investigation or failing to properly investigate the slayings.

Wuterich’s trial was slated to begin March 4 but has been delayed. No new date has been set.

Mark Zaid, a civilian lawyer who represents Wuterich, said that he looks forward to hearing Tatum’s testimony and that he hopes it will clarify some events.

“The dismissal of Tatum’s charges is yet another indication that there was a rush to judgment concerning the events of that day,” Zaid said. “I don’t know if we’re ever going to see or truly know exactly what happened, but I can say that there’s an argument to be made that the prosecution of these young Marines has caused more damage to our country’s reputation than the event itself.”

//washington post//