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To: Jim Willie CB who wrote (7179)9/23/2002 3:00:19 PM
From: stockman_scott  Respond to of 89467
 
Don't Ask, Don't Tell

The Bush administration is playing politics with the investigation of the 9-11 intelligence failures -- and standing in the way of a full accounting

By John Prados
The American Prospect
Web Exclusive: 9.23.02

Joint hearings on the intelligence failures that preceded September 11 took place in Washington last week, only to be conveniently upstaged by the Bush administration's demand for a resolution of congressional approval for a war against Iraq. As a result, the real significance of what did and did not happen in the post-September 11 investigation threatens to become lost in the cacophony of the Iraq debate. Adding to the frustrations of the Senate Select Committee on Intelligence and the House Permanent Select Committee on Intelligence, the Iraqi war issue is sure to pull members into their more political roles and cut into the time, already limited, available for their investigation of the most serious lapse of intelligence in recent memory. Though sidetracking or stalling the intelligence investigation has been an administration aim, and though Bush officials seem to have succeeded in the short run, late last week the White House suddenly abandoned its formerly staunch opposition to an inquiry by a commission independent of the intelligence committees. What happened here is an important indicator of both the real aims of the Bush administration and the strength of the political forces at work in this matter.

Impaneled in late 2001, the joint inquiry was charged with making a full investigation into "the response of the United States Government including that of the Intelligence Community to international terrorism." The original three choices had been for this inquiry to be undertaken either by standing committees of Congress, a special investigating committee or an independent commission. The Bush administration initially opposed all alternatives, calling them a distraction from the war on terrorism but eventually promising to cooperate with the joint inquiry. The intelligence committees began their investigation in February and initially anticipated public hearings beginning in April. That date later slipped to June and then to September. Part of the reason was disarray within the joint committee, but part was the mass of undigested data it was given -- authorities took credit for handing over some 200,000 documents. Staff director L. Britt Snider, a former CIA inspector general, was obliged to resign on April 26 when it emerged that he had been slow to inform superiors that another former CIA officer hired for the staff was under investigation for failing a polygraph test for his agency security clearance. Successor Eleanor Hill certainly needed time to get the investigators on track. But the difficulties with the 9-11 inquiry are by no means of the committee's making. The 23 staffers had conducted almost 200 interviews and collected 30,000 documents on their own by May.

For George W. Bush, the real danger in the investigation has always been that it might reveal that his administration's approach to terrorism had been lackadaisical prior to the attacks on New York and Washington. Arguably, this was the true reason for his initial opposition to an inquiry or independent commission. It was certainly the reason for the defensiveness of National Security Adviser Condoleeza Rice and others when it was revealed in mid-May that Bush actually had received a CIA briefing on Osama bin Laden's methods -- including his interest in using aircraft -- months ahead of the attacks.

Vice President Dick Cheney's harsh criticism of the committee in June, after news broke that the National Security Agency had intercepted messages indicating imminent action immediately prior to the attacks -- information the White House itself had mentioned (though in lesser detail) only days after the attacks -- had the political effect of undercutting the credibility of the inquiry. The FBI investigation of the leak, to which committee chairmen agreed, became an important roadblock to investigative progress as the committee's time was soaked up in responding to FBI inquisitors -- a practical setback that was made worse by the chilling effect of allowing the FBI, the agency the committee was investigating, to turn the tables and investigate the committee.

Meanwhile, the administration declined to offer data about the provision of terrorism intelligence to Bush, and in the declassification process that preceded last week's open hearings, refused to release material indicating presidential awareness (even where the substance of the documents was known or was being declassified). Moving into the hearings, the White House refused to permit open testimony by any intelligence agency chief or by the secretaries of state or defense. Instead, the public was treated to Deputy Defense Secretary Paul Wolfowitz using the intelligence inquiry as a platform for advocating a war with Iraq. Apart from a few mid-level intelligence analysts and FBI special agents (who testified on the specifics of individual terrorists slipping undetected into the United States), the administration has provided no commentary on the role of U.S. intelligence in informing the president on terrorism.

In a recent interview with The New York Times, joint committee co-chairman Sen. Bob Graham (D-Fla.) remarked, "We were told that there would be cooperation in this investigation, and I question that. I think that most of the information that our staff has been able to get that is real meaningful has had to be extracted piece by piece." Similarly, the Senate Intelligence Committee's vice-chairman, Alabama Republican Richard Shelby, asked on NBC television, "Are we getting the cooperation we need?" Shelby then answered his own question: "Absolutely not," he said.

On Sept. 18, the first day of the joint committee's open hearings, Hill presented the investigative staff's report on intelligence before 9-11. Buried in the report is the statement that a review of information reported to top U.S. officials in the so-called Senior Executive Intelligence Briefs shows that terrorism information appeared quite frequently. The briefs show that coverage of bin Laden specifically rose during the spring and summer of 2001, peaking in June when Islamic extremists were referenced in 18 of 298 such articles. This type of report is a lesser version of the government's top intelligence product, the president's daily briefs. Though the joint committee investigators reported nothing about the intelligence given to Bush, the clear inference to be drawn here is that the record is much more extensive than previously understood.

The record of what Bush knew goes directly to the issue of accountability for 9-11. The president's most substantive action in the months before the attacks -- taken on May 8, 2001 -- was to announce creation of an office for preparedness within the Federal Emergency Management Administration (an agency whose budget was to be cut under then-existent administration budget proposals). A policy review of covert action against bin Laden had been completed by April but stalled within the National Security Council (NSC), and was not turned into a plan until after a White House policy directive signed in August 2001 (by Rice, not Bush himself). The president was directly responsible for the operation of the NSC and its staff, which delayed moving the covert action program up for council discussion from June until September despite all the intelligence -- and quite apart from the failures to apprehend the terrorists positioning themselves for the events of 9-11.

Both Cheney and Rice have declared that the president's daily briefs cannot see the light of day because declassification would reveal intelligence sources and methods. Cheney also maintains that such documents have not been released in the past and seems concerned that a poor precedent would be set now. Both arguments are specious. The documents are products of analysis, not operational reports, and statements regarding sources can be easily deleted in the declassification process. As for the act of declassification, a number of briefs, as well as the predecessors of these documents, which were called president's intelligence checklists, have long been on the public record. These arguments are really about shielding Bush from the revelation of information that would raise questions of performance and accountability. The zeal with which the effort to protect Bush has continued in turn raises the specter of the arrogance of power.

Which brings us full circle to the question of an independent commission of inquiry into 9-11. The House of Representatives has already passed legislation to create such a commission, and similar legislation is being championed in the Senate by Joe Lieberman (D-Conn.) and Majority Leader Tom Daschle (D-S.D.). As recently as September 18, however, White House press secretary Ari Fleischer declared that the president would wait for the completion of the committee investigation. Then, said Fleischer, "We'll take a look at talking to Congress about whether or not there is anything additional that goes to the broader areas if necessary." But very quickly both Sens. Graham and Shelby were on record as arguing that an independent commission is necessary -- and they were soon joined by both other legislators and representatives of the families of victims of September 11. Late last week, the White House abandoned its long opposition to a commission, crediting the families for Bush's change of heart. The more likely explanation is twofold: that the White House does not want to be on the losing end of a legislative fight and that it now believes the congressional investigation cannot be kept under control.

It is instructive that Nicolas E. Calio, White House legislative counsel, writing on Sept. 20 to offer the president's "strong support" for a commission, saw its function as an examination of border security, aviation, visas and state and local security issues. Fleischer's comment was that a commission inquiry "could involve some level of intelligence but not the deep boring-in that the intelligence committees did." Translated, this means that Bush will support an inquiry loaded down with so many issues it will hardly be able to get into intelligence or the president's accountability. It should be added the White House would be grateful for an inquiry that has no subpoena powers as well.

The arrogance of power is growing. What did not happen in the hearings of the joint intelligence committees was a proper examination of the executive's -- and in particular the president's -- role in failing to come to grips with the forces that triggered the attacks of September 11. And what has happened since 9-11 has been an orchestrated effort to avoid answering such questions at all.

Copyright © 2002 by The American Prospect, Inc

prospect.org



To: Jim Willie CB who wrote (7179)9/23/2002 3:11:32 PM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
Bear market longest in 60 years; no end yet in sight

By Nick Olivari

NEW YORK, Sept 23 (Reuters) - The current bear market in
stocks is already the longest in 60 years, and with few
investors willing to step up and buy, the likelihood is it will
go a little longer, market analysts say,
Worse news for some investors, the Standard & Poor's 500
index <.GSPC> is flirting with its most recent low, which makes
it perilously close to making this the deepest bear market
since 1938.
"It's not fundamentals causing this, but an overdose of
uncertainty with" the Iraq situation, said Anthony Chan, chief
economist at Banc One Advisors which oversees $150 billion in
assets.
With the Bush White House reviewing military options
against Iraq, investors are on tenterhooks as to the timing of
any action against the regime of Saddam Hussein. Any war could
be costly and derail the U.S. economic recovery as oil prices
rise and resources are diverted towards defeating Iraq.
Though Chan hopes the index won't retest the lows and go
into potential freefall, in the current climate he doesn't rule
out the possibility of another 5 percent to 10 percent drop in
the index, which would push it well past the depth of the
1973-1974 bear market.
The index last traded at 829.16, down some 45.7 percent
from its March 2000 high of 1527.46, and within points of its
most recent low on July 23.
Then it closed 47.77 percent from its all-time record
close. During the 1973-1974 bear market the index lost 48.2
percent before recovering ground, according to data from Banc
One Investments Advisors.
If it breaks that barrier, it will be the biggest bear
market drop since the 54.34 percent decline in the bear market
of 1937-1938.
And if it closes below that July 23 low of 826.95 in
September, another two months will be added to the length of
the current downturn. Through to July, it stood at 28 months,
the longest since the bear market of November 1938 to April
1942 which lasted 44 months, according to Banc One data.

MORE DECLINES BEFORE IMPROVEMENT
Most investors do say that things are going to get worse
before they get better.
Irrespective of any U.S. campaign against Iraq, concerns
about both the quantity and quality of earnings are another
drag on the market.
Low stock prices "are a reflection of how negative people
have become," said Lester Rich, a portfolio manager with
StoneRidge Investment Partners LLC. Base in Malvern, Pa, $600
million in assets.
"Corporate governance issues are still hanging over the
market, and its difficult not to pick up a newspaper and read
an Enron story" a year after the problems first became
apparent.
The energy company filed the largest bankruptcy filing to
date in December, having failed as its stock plummeted amid
investor unease over its opaque accounting and murky
"off-balance sheet" transactions.
It was the first of string of companies to announce
accounting problems, prompting investors to question the
accuracy of results and a backlash which finally saw company
executives attest to their corporate results.
And though S&P 500 companies are expected to post profit
growth of 8.4 percent in the third quarter, that's down from an
expectation of 16.6 percent at the beginning of the quarter,
according to Thomson First Call.
More troubling to some investors is that the number of
warnings to positive pre-announcements is rising, reversing the
trend of the last three periods.
With 882 pre-announcements, the ratio of negative to
positive is 2.2. That compares with a ratio of 1.2 in the
second quarter, 1.6 in the first and 1.8 in the fourth quarter
of 2001.

OPTIMISM?
Though the index could easily plunge into new territory on
more bad news, at least one investor sees a market rally in the
months ahead.
"The chances are we take out the lows but we may get a
rally in the fourth quarter," said Marian Kessler, portfolio
manager with Rutherford Investment Management LLC which
oversees $25 million from Portland, Oregon. "There is no way of
prophesizing but we may have a tough time in the first half of
October and then get an oversold rally."
Also remaining optimistic despite the doom and gloom
pervading the majority of shareholders, Chan said investors
should be looking at the low prices on stocks as opportunities
to buy given the long-term outlook for the economy and company
profits are improving. Though he admitted that "investors are
getting tired of the 'opportunity story'."
But with little good news coming through, and more risk
than reward on the horizon, investors are merely hoping that
the bottom is close, if it's not already in.
((Nick Olivari, Wall Street Desk, 646-223-6151))
REUTERS

S.RT -GSPC US.R STX.R FCAST.R