In the words of Judge William B. Traxler, whose swing vote confirmed the court’s otherwise divided ruling, “the Constitution generally affords all persons detained by the government the right to be charged and tried in a criminal proceeding for suspected wrongdoing, and it prohibits the government from subjecting individuals arrested inside the United States to military detention unless they fall within certain narrow exceptions … The detention of enemy combatants during military hostilities, however, is such an exception. If properly designated an enemy combatant pursuant to legal authority of the President, such persons may be detained without charge or criminal proceedings for the duration of the relevant hostilities.”

As was pointed out by Judge Diana Gribbon Motz, who was steadfastly opposed to the majority verdict (and whose opinion was endorsed by Judges M. Blane Michael, Robert B. King and Roger L. Gregory), “the duration of the relevant hostilities” is a disturbingly open-ended prospect. After citing the 2007 State of the Union Address, in which the President claimed that ‘[t]he war on terror we fight today is a generational struggle that will continue long after you and I have turned our duties over to others,’” Judge Motz noted, “Unlike detention for the duration of a traditional armed conflict between nations, detention for the length of a ‘war on terror’ has no bounds.”

The Court of Appeals made its extraordinary ruling in relation to a habeas corpus claim in the case of Ali Saleh Kahlah al-Marri, whose story I reported at length here. To recap briefly, al-Marri, a Qatari national who had studied in Peoria, Illinois in 1991, returned to the United States in September 2001, with his US residency in order, to pursue post-graduate studies, bringing his family — his wife and five children — with him. Three months later he was arrested and charged with fraud and making false statements to the FBI, but in June 2003, a month before he was due to stand trial for these charges in a federal court, the prosecution dropped the charges and informed the court that he was to be held as an “enemy combatant” instead.

He was then moved to a naval brig in Charleston, South Carolina, where he has now been held for five years and one month in complete isolation in a blacked-out cell in an otherwise unoccupied cell block. For the first 14 months of this imprisonment, he was subjected to sleep deprivation and extreme temperature manipulation, frequently deprived of food and water, and interrogated repeatedly.

In August 2003, representatives of the International Red Cross were finally allowed to visit al-Marri, and two months later he was permitted to meet with a lawyer, when he finally had the opportunity to explain that his interrogators had “threatened to send [him] to Egypt or to Saudi Arabia where, they told him, he would be tortured and sodomized and where his wife would be raped in front of him.”

Based on advice given to Donald Rumsfeld by Defense Department lawyers regarding the use of isolation at Guantánamo, when the lawyers warned that it was “not known to have been generally used for interrogation purposes for longer than 30 days,” al-Marri has now been held in solitary confinement for 67 times longer than the amount of time recommended by the Pentagon’s own lawyers (this figure includes the six months that he spent in isolation in Peoria County Jail and the Metropolitan Correction Center in New York, before being transferred to Charleston).

It is, therefore, unsurprising that his lawyer, Jonathan Hafetz of the Brennan Center for Justice at the New York University School of Law, has explained that he is suffering from “severe damage to his mental and emotional well-being, including hypersensitivity to external stimuli, manic behavior, difficulty concentrating and thinking, obsessional thinking, difficulties with impulse control, difficulty sleeping, difficulty keeping track of time, and agitation.”

So what is Ali al-Marri supposed to have done to justify being held in solitary confinement for almost as long as the duration of the Second World War? The presidential order declaring him an “enemy combatant” stated simply that he was closely associated with al-Qaeda and presented “a continuing, present, and grave danger to the national security of the United States.” Elaborating, in subsequent statements, the government has claimed that he was part of an al-Qaeda sleeper cell, who had been instructed to carry out further terrorist attacks in the United States, targeting reservoirs, the New York Stock Exchange and military academies.

What’s particularly worrying about these charges is that, by the government’s own admission, the primary sources for its supposed evidence against al-Marri are confessions made by Khalid Sheikh Mohammed (KSM), the alleged architect of the 9/11 attacks, during the three months following his capture in March 2003, when, as even the CIA has admitted, he was subjected to waterboarding, a form of controlled drowning, which the torturers of the Spanish Inquisition at least had the honesty to call “tortura del aqua.”

As I discussed at length in an article last summer, KSM stated during his tribunal at Guantánamo in March 2007 that he had given false information about other people while being tortured, and, although he was not allowed to elaborate, I traced several possible victims of these false confessions, including Majid Khan, one of 13 supposedly “high-value” detainees transferred with KSM to Guantánamo from secret CIA prisons in September 2006, Saifullah Paracha, a Pakistani businessman and philanthropist held in Guantánamo, and his son Uzair, who was convicted in the United States on dubious charges in November 2005, and sentenced to 30 years in prison.

As I also stated last November, “It’s possible, therefore, that al-Marri is another victim of KSM’s tangled web of tortured confessions, but whether or not this is true, the correct venue for such discussions is in a court of law, and not in leaks and proclamations from an administration that appears to be intent on holding him without charge or trial for the rest of his life.”

When I wrote these words, it seemed possible that the Fourth Circuit judges would act to prevent al-Marri from having the dubious distinction of being the last “enemy combatant” on the US mainland, and would put pressure on the government to transfer him to a federal prison to face a trial in a US court, as happened with Jose Padilla, a US citizen and one of two other “enemy combatants” imprisoned without charge or trial — the other being Yaser Hamdi, a US-born Saudi, who was held in Guantánamo until it was ascertained that he held US citizenship. In Hamdi’s case, however, a brief stay at the Charleston brig was followed by a deal that allowed him to return to Saudi Arabia.

In June 2007, a panel of three Fourth Circuit judges dealt a blow to the administration’s claims by ruling that “the Constitution does not allow the President to order the military to seize civilians residing within the United States and then detain them indefinitely without criminal process, and this is so even if he calls them ‘enemy combatants.’” Last week’s decision followed a successful appeal by the government, but when the Fourth Circuit court met en banc to reconsider al-Marri’s case in October, it seemed possible that they would uphold the panel’s June verdict. When Judge Michael asked the government’s representative, Gregory J. Barre, “How long can you keep this man in custody?” and Garre replied that it could “go on for a long time,” depending on the duration of the “war” with al-Qaeda, Judge Michael stated, “It looks like a lifetime.”

I now realize, of course, that it was always highly improbable that the Fourth Circuit court — widely regarded as the most right-wing court in the country — would end Ali al-Marri’s legal limbo, although it was somewhat ironic that, in a separate ruling, the swing-voting Judge Traxler ruled in al-Marri’s favor when it came to a decision to grant him some as yet unspecified ability to challenge the basis of his definition as an “enemy combatant.”

This, at least, earned him the gratitude of Judge Motz, who stated that “the evidentiary proceedings envisaged by Judge Traxler will at least place the burden on the Government to make an initial showing that ‘the normal due process protections available to all within this country’ are impractical or unduly burdensome in al-Marri’s case and that the hearsay declaration that constitutes the Government’s only evidence against al-Marri is ‘the most reliable available evidence’ supporting the Government’s allegations.”

In other respects, however, the court only added to its reputation as a defender of the indefensible. Not content with endorsing the President’s dictatorial right to imprison “enemy combatants” without charge or trial on the US mainland, the judges responsible for the majority verdict ruled that the President did not even have to allege, as he did with Yaser Hamdi and Jose Padilla, that an “enemy combatant” had either been in Afghanistan or had ever raised arms against US forces.

The injustice of this was pointed out in the opinion of Judge Motz, who stated that, “unlike Hamdi and Padilla, al-Marri is not alleged to have been part of a Taliban unit, not alleged to have stood alongside the Taliban or the armed forces of any other enemy nation, not alleged to have been on the battlefield during the war in Afghanistan, not alleged to have even been in Afghanistan during the armed conflict, and not alleged to have engaged in combat with United States forces anywhere in the world.”

Judge Motz added, however, “With regret, we recognize that this view does not command a majority of the court. Our colleagues hold that the President can order the military to seize from his home and indefinitely detain anyone — including an American citizen — even though he has never affiliated with an enemy nation, fought alongside any nation’s armed forces, or borne arms against the United States anywhere in the world. We cannot agree that in a broad and general statute, Congress silently authorized a detention power that so vastly exceeds all traditional bounds. No existing law permits this extraordinary exercise of executive power.”

Disturbingly, as Judge Motz mentioned above, the court also indicated its presumption that its ruling applies not just to legal residents like Ali al-Marri, but to US citizens as well. Judge Traxler noted, “it is likely that the constitutional rights our court determines exist, or do not exist, for al-Marri will apply equally to our own citizens under like circumstances,” and Judge Motz explained that the lack of distinction between citizens and residents had become apparent at oral argument, when the government “finally acknowledged that an alien legally resident in the United States, like al-Marri, has the same Fifth Amendment due process rights as an American citizen. For this reason, the Government had to concede that if al-Marri can be detained as an enemy combatant, then the Government can also detain any American citizen on the same showing and through the same process.”

We have, to be honest, been here before. In September 2005, a three-member panel upheld, in Padilla’s case, the President’s power to hold US citizens indefinitely without charge or trial (PDF). This verdict was never tested, as the government took Padilla out of the brig and into the court system (where he was convicted in January) before the Supreme Court could rule on his case, but as Glenn Greenwald noted in an article in Salon, the upshot is that the 2005 Padilla verdict still stands. To that extent, all that has changed now is that the Fourth Circuit court has reinforced its former ruling en banc.

Al-Marri’s lawyers will doubtless appeal, and, if justice still counts for anything, his case will go all the way to the Supreme Court. However, it remains incomprehensible to me that the whole sorry saga has lasted for so long already. As Jonathan Hafetz and his colleagues explained last November when they presented their arguments to the Fourth Circuit judges (and as Judge Motz noted last week), the President “lacks the legal authority to designate and detain al-Marri as an ‘enemy combatant’ for two principal reasons”: firstly, because the Constitution “prohibits the military imprisonment of civilians arrested in the United States and outside an active battlefield,” and secondly, because, although a district court previously held that the President was authorized to detain al-Marri under the Authorization for Use of Military Force (the September 2001 law authorizing the President to use “all necessary and appropriate force” against those involved in any way with the 9/11 attacks), Congress explicitly prohibited “the indefinite detention without charge of suspected alien terrorists in the United States” in the Patriot Act, which followed five weeks later.

That seems pretty clear to me. In the “War on Terror,” however, as I learned during my research for The Guantánamo Files, all forms of logical thought — sometimes in the courts, most of the time in military custody, and as a permanent fixture in the war rooms where torture was endorsed — have been engulfed in a fog of fear and barbarism.

I leave the final words to Judge Motz, and her clear-eyed awareness of the injustice of the al-Marri verdict. “To sanction such presidential authority to order the military to seize and indefinitely detain civilians, even if the President call them ‘enemy combatants,’ would have disastrous consequences for the Constitution — and the country,” Judge Motz wrote. “For a court to uphold a claim to such extraordinary power would do more than render lifeless the Suspension Clause, the Due Process Clause, and the rights to criminal process in the Fourth, Fifth, Sixth and Eighth Amendments; it would effectively undermine all of the freedoms guaranteed by the Constitution. It is that power — were a court to recognize it — that could lead all our laws ‘to go unexecuted, and the government itself to go to pieces.’ We refuse to recognize a claim to power that would so alter the constitutional foundations of our Republic.”

Unless Ali al-Marri is allowed a meaningful review of his status as an “enemy combatant,” Judge Motz’s fears have already come true.

The files, made public Thursday by the American Civil Liberties Union of Maryland, depict a pattern of infiltration of the activists’ organizations in 2005 and 2006. The activists contend that the authorities were trying to determine whether they posed a security threat to the United States. But none of the 43 pages of summaries and computer logs - some with agents’ names and whole paragraphs blacked out - mention criminal or even potentially criminal acts, the legal standard for initiating such surveillance.

State police officials said they did not curtail the protesters’ freedoms.

The spying, detailed in logs of at least 288 hours of surveillance over a 14-month period, recalls similar infiltration by FBI agents of civil rights and anti-war groups decades ago, particularly under the administration of President Richard M. Nixon.

David Rocah, a staff attorney for the ACLU in Baltimore, said at a news conference Thursday that he found it “stupefying” that more than 30 years later, the government is still targeting people who do nothing more than express dissent.

“Everything noted in these logs is a lawful, First Amendment activity,” Rocah said. “For undercover police officers to spend hundreds of hours entering information about lawful political protest activities into a criminal database is an unconscionable waste of taxpayer dollars and does nothing to make us safer from actual terrorists or drug dealers.”

The ACLU obtained the documents from the state Attorney General’s Office through a Maryland Public Information Act lawsuit.

Col. Terrence B. Sheridan, superintendent of the Maryland State Police, said in a statement Thursday that the department “does not inappropriately curtail the expression or demonstration of the civil liberties of protesters or organizations acting lawfully.”

“No illegal actions by state police have ever been taken against any citizens or groups who have exercised their right to free speech and assembly in a lawful manner,” Sheridan said. “Only when information regarding criminal activity is alleged will police continue to investigate leads to ensure the public safety.”

Nothing in the documents indicates criminal activity or intent on the part of the protesters, ACLU officials said.

Nonetheless, the state police’s Homeland Security and Intelligence Division sent covert agents to infiltrate the Baltimore Pledge of Resistance, a peace group; the Baltimore Coalition Against the Death Penalty; and the Committee to Save Vernon Evans, a death row inmate.

Using a fake e-mail address and an alias, an undercover agent joined the e-mail list of the death penalty group, the documents say.

Agents also monitored the group’s organizational meetings, public forums and events in churches, as well as rallies on Lawyers Mall in Annapolis and in Baltimore outside the Maryland Correctional Adjustment Center, known as “SuperMax.”

Most of the spies’ reports were innocuous. After an Aug. 24, 2005, gathering of the Evans group, an undercover officer wrote in a log: “The meeting concluded with members talking about trying to get the man running for Baltimore County State’s Attorney to commit to his plans regarding the death penalty in the county.”

Baltimore County was responsible for more capital punishment cases than any other Maryland jurisdiction at the time.

Another entry about the Evans group revealed that agents had spent 50 hours of “investigative time” shadowing its members in March, April and May 2005. The entry mentioned that a May 25, 2005, meeting of the group was attended by Max Obuszewski, a former Peace Corps member and longtime activist who moved to Baltimore in 1983, and Terry Fitzgerald, who heads the anti-death penalty coalition and established the Evans group.

Both attended Thursday’s news conference.

State police appeared to have been specifically tracking Obuszewski’s activities. His name, the documents show, was entered into the Washington/Baltimore High Intensity Drug Trafficking Area database, even though there was “not a scintilla of evidence” that he deserved to be listed, said Rocah, the ACLU attorney.

“Mr. Obuszewski has devoted his entire life to peace,” Rocah said. “If there is anyone in the world who is further from a terrorist, it is hard for me to imagine.”

Obuszewski agreed. “You cannot get more insulting than to call me a terrorist,” he said. Besides, he went on, the groups he belongs to hold open meetings and publicize their schedules. “Why would someone come to those meetings and pretend to be someone else? Why are government agencies targeting pacifists?”

One reason, he theorized, is that local police agencies need funds from the federal government, and surveillance of supposed “terrorists” might be a good way to keep getting the money. No matter the reason, the news that the Bush administration keeps about 1 million names on a terrorist watch-list is disheartening, Obuszewski said, since so many people cannot possibly warrant inclusion.

In February 2006, the national ACLU and its affiliates filed multiple federal Freedom of Information requests seeking records of Pentagon surveillance of anti-war groups around the country. Using information from a secret Pentagon database, NBC News reported that a unit of the Department of Defense had been accumulating intelligence about domestic organizations and their protest activities as part of a mission to track “potential terrorist threats.”

“It serves no security purpose to infiltrate peaceful groups,” said Michael German, a former FBI agent who specialized in counter-terrorism and who joined the ACLU two years ago as policy counsel in its Washington legislative office. “It completely misuses law enforcement resources.”

Since the Sept. 11, 2001, attacks, German said, the government has “actively encouraged” local police agencies to become intelligence gatherers and to compile information that does not necessarily have a connection to criminal activity.

Despite the fact that the Maryland infiltrators’ reports consistently said the activists acted lawfully, agents continued to recommend that the spying continue. Reports of the surveillance were sent to at least seven federal, state and local law enforcement agencies, including the National Security Agency, the police departments of Baltimore, Baltimore County, Annapolis and Anne Arundel County, and the state General Services police.

The documents released Thursday show the kind of information they were trading. Among other things, Obuszewski and fellow activists arranged a meeting with then-Rep. Benjamin L. Cardin in 2005 in which they asked him to support a timetable for withdrawal from Iraq.

Susan Goering, executive director of the ACLU of Maryland, said she feared that the documents released so far “may be only the tip of the proverbial iceberg.”

In a letter sent Thursday to Gov. Martin O’Malley, Goering wrote that the state police had “recorded extensive information about specific individuals and groups, including describing their political outlook, whether they were articulate, what political activities they are engaged in, and attended private planning meetings in a covert capacity.”

The only potentially unlawful activity mentioned anywhere in the documents, she said, were two instances of nonviolent civil disobedience. In one, activists refused to leave a guard station during a protest at the National Security Agency after bringing cookies and drinks for the guards, and in the other, they hatched a plan to place photographs of soldiers who died in Iraq on the fence surrounding the White House.

“Maryland residents should feel free to join a peaceful protest without fear that their names will wind up in police files,” Goering wrote. “They should feel free to engage in nonviolent dissent without fear of being branded as ‘terrorists’ or ’security threat groups’ in shared law-enforcement databases.”

The Federal Reserve and US Treasury want a blank check to prop up Fannie Mae and Freddie Mac, the two war-horses of the mortgage industry, that currently underwrite nearly 80 per cent of all new mortgages in the US. But by any objective standard both of these GSEs are already insolvent. Thus, the taxpayer is being asked to rescue a failed industry that has been used for private gain so that speculators will not have to suffer the losses. Even worse, Fannie and Freddie have written hundreds of billions of dollars worth of mortgages that have not yet defaulted, but will certainly default within the next two years. This is bound to batter the already faltering economy.

The bad paper held by Fannie and Freddie are mortgages that were made to unqualified applicants who are presently losing their homes in record numbers. Their loans were approved because there was no functioning regulatory body to oversee their issuance and because the mortgages were transformed into complex securities that were sold to credulous investors around the world. The ratings were fixed to meet the requirements of their employers, the investment banks, which marketed these exotic bonds to foreign banks, insurance companies and hedge funds. That puts Fannie and Freddie at the center of a system that needs radical surgery to eradicate the bad paper. If this doesn’t happen in a timely fashion, then foreign investors will stop purchasing US debt and the dollar will crash. By creating a backstop for Fannie and Freddie, the Fed is linking US sovereign debt with mortgages and derivatives that are already known to be fraudulent. This is a big mistake. According to Merrill Lynch, the US is already facing a long-term “financing crisis” as the weakening US economy and sluggish consumer spending could signal an end to the $700 billion in foreign investment that covers America’s current account deficit. By assuming the GSE’s enormous debts, the Bush administration is just speeding this process along and inviting disaster.

Treasury Secretary Henry Paulson has been intentionally oblique about the implications of the proposed bailout. On Tuesday, he delivered a statement in front of the massive stone columns of the Department of the Treasury, a towering monolith that arouses feelings of confidence in rock-solid institutions. He made it clear that Fannie Mae and Freddie Mac would have the “explicit” backing of the US government:

“First, as a liquidity backstop, the plan includes a temporary increase in the line of credit the GSEs have with Treasury. Treasury would determine the terms and conditions for accessing the line of credit and the amount to be drawn.

Second, to ensure the GSEs have access to sufficient capital to continue to serve their mission, the plan includes temporary authority for Treasury to purchase equity in either of the two GSEs if needed.

Third, to protect the financial system from systemic risk going forward, the plan strengthens the GSE regulatory reform legislation currently moving through Congress by giving the Federal Reserve a consultative role in the new GSE regulator’s process for setting capital requirements and other prudential standards.”

It was an impressive performance from a public relations point of view, but it didn’t fool anyone on Wall Street. What Wall Street wants is details not blather. Paulson gave no specifics about how much money the government would provide or what the nature of the new relationship would be; conservatorship, recievorship, nationalization? What is it?

The truth is that Paulson was deliberately vague because he and friend Bernanke would like to have it both ways; they’d like to provide a liquidity backstop and an endless line of credit for the two GSE’s without formally nationalizing them. That would avoid the further dilution of stock values while keeping the US government from taking another $5 trillion of mortgage debt onto their balance sheet. It is a delicate balancing act, but Paulson seems to think he carried it off. He’s wrong, though, and volatility in the stock market proves it. Investors are clearly skittish about the new arrangement. They want to know the facts about the government’s commitment. Paulson is discovering that deceiving investors is not as easy as duping the public about fictional WMD or Niger uranium. Sometimes even the dullest person can grasp the most complex matters when it comes to his own money.

Fannie and Freddie have been insolvent for ages, but it hasn’t stopped lawmakers from pushing the envelope and loading more debt on their balance sheets. Here’s how Barron’s summed it up more than six months ago:

“Fannie’s balance sheet is larded with soft assets and understated liabilities that would leave the company ill-equipped to weather a serious financial crisis. And spiraling mortgage defaults and falling home prices could bring a tsunami of credit losses over the next two years that will severely test Fannie’s solvency.

But, if the truth be known, a considerable portion of Fannie’s losses also came from speculative forays into higher-yielding but riskier mortgage products like subprime, Alt-A (a category between subprime and prime in credit quality) and dicey mortgages requiring monthly payments of interest only or less. For example, Fannie’s $314 billion of Alt-A — often called liar loans because borrowers provide little documentation — accounted for 31.4% of the company’s credit losses while making up just 11.9% of its $2.5 trillion single-family-home credit book. Fannie was clearly looking for love — and market share — in some of the wrong places.”

Rampant speculation, risky investments, and Enron-type accounting; hardly the stuff of solid portfolios. That’s why the two mortgage giants are stumbling headlong towards oblivion despite the Treasury’s panicky relief operation. By last Friday Fannie’s stock had fallen 47 per cent while Freddie was down 50 per cent. The public may still be in the dark about what is going on, but investors have a pretty good grip on the situation; they can see the great birds are already circling overhead and its just a matter of time before they descend on their prey. Paulson’s attempts to muddy the water have amounted to nothing. The fact remains that the two biggest mortgage-lenders in the world are busted and last week’s stock sell-off was tantamount to a run on the country’s largest bank. Paulson’s statement was really nothing more than a eulogy for the mortgage industry; a few heartfelt words over the rigid corpse of a close friend.

When the housing market started to tumble and Wall Street’s “securitization” model froze-up, Fannie had to take the lion’s share of the mortgages to keep the real estate market hobbling along. In a two year period, between the housing peak in 2005 and 2007, Fannie went from roughly 40 per cent of the market to about 80 per cent. The Congress even enlarged the size of the mortgages they could underwrite from $417,000 to over $700,000. The prospect of bankruptcy never diminished congress’s generosity.

Fannie and Freddie currently own or underwrite roughly half of the nation’s $12 trillion mortgage market. Basically, every home mortgage lender depends on them for financing. Their shares are owned by individual investors and banks around the world. Foreign investors have always believed that the GSE bonds were as risk-free as US government Treasuries. Now they are beginning to wonder. (Foreign central banks, led by China and Russia, hold at least $925 billion in U.S. agency debt, including bonds sold by Freddie and Fannie, according to official U.S. statistics)

Whatever happens to Fannie, the loss of investor confidence will send long term interest higher as investors demand bigger returns for the risk they’re taking on GSE bonds. That’ll put a straitjacket on home sales which are already flagging from soaring inventory and falling prices. Higher rates could bring the whole housing market to a standstill.

The Fed’s cheap credit policy under Greenspan created an artificial demand for housing which ballooned into the biggest equity bubble in history. Low interest rates are a subsidy which naturally lead to speculation and asset-inflation. At a certain point, however, the endless debt-pyramiding reaches its apex and the whole mechanism switches into reverse. Now the economy has entered deleveraging-hell where everything is primal blackness and the gnashing of teeth, the flip-side of speculative rapture.

By some estimates, Freddie Mac has a negative net-worth of $17 billion. It’s basically insolvent, although Paulson would like to see the charade go on a while longer. Investors purchased another $3 billion of the two GSEs last Monday, but the appetite for failing bonds is diminishing? What’s certain is that the collapse of Fannie and Freddie would be a watershed event and a mortal blow to the US financial system. $5 trillion in shaky mortgage-debt can’t be easily swept under the rug and ignored. Interest rates on everything would quickly rise; credit would become scarcer, economic growth would shrivel, unemployment would soar, and the dollar will plummet. As the two mortgage giants continue to get whipsawed by higher priced capital and waning investment, US government debt will likely to lose its much-vaunted triple A credit rating. On Friday, credit default swaps on government debt doubled, a sign that investors are losing confidence that the US will be able to manage its twin deficits or pay off its debts. It’s the end of the road for Washington’s free lunch throng and for a paper dollar that isn’t backed by much of anything except music videos, fast food and smart-bombs.

PAULSON’S POWER GRAB

What Paulson is really wants is for congress to allow the Fed to regulate the financial system without congressional oversight. Paulson’s so-called blueprint for financial regulation is a blatant power-grab meant to expand the authority of the banking oligarchy giving them unlimited power over the markets. Journalist Barry Grey sums it up like this in his article on “US Bailout of Mortgage Giants: The politics of plutocracy”:

“The plan outlined by Treasury Secretary Henry Paulson would give him virtually unlimited and unilateral authority to pump tens of billions of dollars of public funds into the mortgage finance companies. At the same time, the Federal Reserve Board announced that it would allow the companies to directly borrow Fed funds… The Democrats…now march in lockstep with the minority party to rush through laws demanded by Wall Street… The buying of legislators and their votes by corporate interests is carried out openly and shamelessly. Members of Frank’s House Financial Services Committee received over $18 million from financial services, insurance and real estate firms this year. Frank himself raised over $1.2 million, almost half of which came from finance and related industries…Senator Dodd’s top contributor in the 2003-2008 election cycle was Citigroup, followed by SAC Capital Partners. He raised $4.25 million from securities and investment firms.
Senator Schumer’s top contributor was likewise Citigroup. He raised $1.4 million from securities and investment firms, his most lucrative corporate sector.”

The smell of political corruption is overpowering, and yet, the plan is moving forward regardless. Even if Paulson’s plan worked in the short term, the damage would be enormous. It would place the country’s regulatory powers and purse-strings in the hands of the same amoral banksters who created this mess to begin with. It is the fast-track to corporate feudalism on a nationwide scale.

PITFALLS FOR THE GSEs

The biggest problem facing Fannie and Freddie is that wary investors will not roll over the debt of the two companies which will precipitate a collapse. This is where it pays to have people who can be trusted in positions of power. Henry Paulson is the worst thing that ever happened to the US Treasury. Paulson is to finance capitalism what Rumsfeld is to military strategy. To say that Paulson is lacking in credibility is an understatement. Nothing he says can be taken at face-value. When Paulson says “the worst is behind us” or the “subprime crisis is contained” or the Bush administration “supports a strong dollar policy”; most people know it is a fabrication. Besides, Paulson is completely out of his depth in the present crisis. His appearances on TV, with the beads of sweat glistening on his forehead, and his foolish repetition of the same stale mantra is eroding confidence in the financial system and sending waves of panic rippling through Wall Street. Enough is enough. He needs to go.

If the administration was serious about changing direction they would dump Paulson and reinstate Paul Volcker. Whatever one thinks about Volcker, his presence would calm the markets and send a message that the adults were back in charge. But that won’t happen. The Bush team still thinks they can finesse their way through the thicket of investor skepticism. That means that catastrophe is inevitable as more and more investors pick up their bets and head for the exits.

TIME IS RUNNING OUT

Whatever the administration decides to do; time is short and they have one chance to get it right. The Treasury needs to find a way to ring-fence the garbage bonds and pray that the investing public won’t dump their holdings in a panic run on the market. Either way, it’s a gamble and there’s no guarantee of success. The Wall Street Journal outlined the doomsday scenario if Paulson’s plan fails:

“Falling house prices and nonpaying homeowners cause the value of the trillions of dollars in outstanding debt held by these government-sponsored enterprises (Fannie and Freddie) to plunge. Many banks have balance sheets stuffed full of this paper. They face huge losses, which some can’t survive. They and other investors, such as foreign central banks, then dump the GSE paper.

Fannie and Freddie would end up unable to lend, or at least to take up anything like their current 80% share of the U.S. mortgage market, further punishing the reeling housing market. This would add another twist to the spiral of falling prices, credit losses and failing lenders.

What should they do? First, devise a plan — and fast. There is no time to dither.” (Wall Street Journal)

If foreign banks and investors ditch their GSE debt; it will send shockwaves through the global economy. But if the Treasury provides unlimited funding for a sinking operation, it’s likely to trigger a sell-off of the dollar. It’s a lose-lose situation. For now, bond holders are sitting-tight even though the stock is tanking, but for how long? They’ve already been taken to the cleaners on hundreds of billions of dollars of mortgage-backed garbage; now there are rumors that the US government won’t back agency debt. What kind of shabby shell-game is the US playing anyway?

New York Times:

“If people lose faith in Fannie and Freddie, then the whole system freezes up, and nobody can buy a house, and the entire housing market can crash,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Va. “There’s a fine line between having faith and losing it, and sometimes it’s unclear when it has disappeared. But when investors cross that line, bad things happen very quickly.”

And it affects more than the housing market, too. The bond and equities markets are handcuffed to real estate and they’re already listing from the slowdown in investment. The Fed thought they could keep the whole mess from going sideways by opening up “auction facilities” where the banks could get low interest capital in exchange for their mortgage-backed junk. But the banks have curtailed their lending and there’s bigger trouble ahead. Bridgewater Associates issued a warning last week that losses to the banking system would exceed $1.6 trillion, four times original estimates and enough to crash the entire banking system. So far, banks have only written down $450 billion, which means that they are only 25 per cent of the way through the current credit storm. Defaults are liable to skyrocket as hundreds of undercapitalized banks turn to a grossly underfunded FDIC ($52 billion in reserves) to cover the losses of their depositors. The prospect of a humongous taxpayer bailout seems nearly unavoidable.

What’s most disturbing is that nothing has been done to restore the markets to a functional model. The Fed’s strategy is still to try to keep the relatively new “structured finance” model (with all it’s bizarre-named debt instruments and derivatives) in place even though it failed its first stress-test and has demonstrated that it cannot withstand even moderate downward movement in the market. The current model is kaput; there needs to be a Plan B or the Fed is just wasting its time.

Fannie’s demise comes at a particularly difficult time for the banking system. According to a report by Paul Kasriel, Chief Economist at Northern Trust:

“The sharpest 13-week contraction in bank credit” since data were first available in 1973. Banks simply don’t have the capital on hand to avail “themselves of the cheap credit the Fed is offering to fund them at.”….This is what it means to be in a “credit crunch.” Banks have suffered hundreds of billions in losses, forcing them to pull credit out of the economy. Every time you read an article about banks cutting credit lines, exiting lending businesses, or eliminating mortgage products it represents more bank credit drying up.” (Option Armageddon, “Understanding Bernanke”)

Bank credit is drying up because the capital is being destroyed (from foreclosures and downgraded assets) faster than anytime in history. We are just now feeling the first stiff breezes from a Force-5 deflationary hurricane set to touch down in 2009. Fannie and Freddie are teetering towards insolvency while the country is entering the most vicious downward cycle since the Great Depression. Higher interest rates, negative home equity, mounting credit card debt, auto loan debt, commercial real estate debt and tightening lending standards will only curtail consumer spending more putting greater pressure on the dollar.

The Fed will have to be selective; not everything can be saved. Significant parts of the financial system will be reduced to ashes. It would be wiser to clear the brush away from as many of the solvent institutions as possible and prepare for the worst. Otherwise, the whole system is at risk of contagion. Hundreds of local and regional banks are expected to go under. (the average small bank has 67% of its assets in real estate) It can’t be avoided. They are holding too much bad paper and no way to make up for the losses. They’re following the same path as the 250 mortgage lenders that vaporised in the subprime meltdown. They couldn’t be saved either.

The bigger investment banks are in trouble too. That’s why the SEC has finally decided to act as a regulator and go after short-sellers:

“The Securities and Exchange Commission announced an emergency action aimed at reducing short-selling aimed at Wall Street brokerage firms, Fannie Mae and Freddie Mac, and will immediately begin considering new rules to extend new requirements to the rest of the market.”

The SEC never took an interest in naked shorting of stocks (or commodities speculators) while its fat-cat friends in the big brokerage houses were raking in billions. Now that many of these same institutions, including Fannie Mae and Freddie Mac, are in the crosshairs, SEC chief Christopher Cox is rushing to their rescue. It is utter duplicity, but it illustrates an important point; the system is cannibalizing itself just like Karl Marx predicted over 100 years ago. Unchecked greed is inevitably self-destructive.

A growing number of market analysts are beginning to notice the storm clouds forming on the horizon. The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months. The Bank of international Settlements (BIS) made a similarly ominous warning that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s. The bank suggests that government officials and market analysts have not fully grasped the financial turmoil that could result from the mortgage crisis and its effects of the global economic system. The body points out that the Great Depression was not anticipated because people ignored the implicit danger of “complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system.”

Ron Paul (R-Texas) is one of the few members of congress who has shown that he has a grasp of the impending economic disaster now facing the country if corrective action is not taken swiftly. In a speech he gave last week on the floor of the House, he said:

“There are reasons to believe this coming crisis is different and bigger than the world has ever experienced…The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical-care costs; the collapse of the housing bubble; the bursting of the NASDAQ bubble; stock markets plunging; unemployment rising;, massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we’ll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression? ”

The troubles at Fannie and Freddie are symptomatic of more deeply rooted problems related to abusive lending and the unsustainable expansion of credit. We’ve now reached our debt limit and the bills must be repaid or written off. The Bush administration is hoping to reflate the bubble by (stealthily) recapitalizing the GSEs, but it won’t be easy. As one blogger put it, we have reached “peak credit” and have nowhere to go except down.

Economist Michael Hudson summed it up like this:

“The reality is that Fannie, Freddie and the FHA gave a patina of confidence to irresponsible lending and outright fraud. This confidence game led them to guarantee some $5.3 trillion of mortgages, and to keep $1.6 trillion more on their own books to back the bonds they issued to institutional investors.” It was a scam of Biblical proportions and now it is all starting to unravel. Bush’s “ownership society” was a cheap parlor trick engineered by the Fed’s low interest rates to trigger massive speculation and shift wealth from one class to another. Now, the housing bubble has crashed and the excruciating reality of insolvency is beginning to sink in.

Michael Hudson, again:

“All one hears is a barrage of claims that the government must preserve the financial fictions of Fanny Mae and Freddie Mac in order to ’save the market.’ The usual hypocrisy is being brought to bear claiming that all this is necessary to ’save the middle class,’ even as what is being saved are its debts, not its assets…The “way of life” that is being saved is not that of home ownership, but debt peonage to support the concentration of wealth at the top of the economic pyramid.
Mortgages are the major debts of most American families. In this role, real estate debt has become the basis for the commercial banking system, and hence the basis for the wealthiest 10 percent of the population who hold the bottom 90 percent in debt. That is what Fannie Mae, Freddie Mac and “the market” are all about.” (Michael Hudson; “Why the Bail Out of Fannie Mae and Freddie Mac is Bad Economic Policy”, counterpunch.org)

The housing boom never had anything to do with Bush’s Utopian-sounding “ownership society”. It was always just a swindle to enrich the banking establishment and divert middle class wealth to ruling class elites.

Bohemian Grove has been arguing amongst themselves for the last few years about a plan to cut down and harvest some of the trees in their forest, ostensibly to prevent forest fires. Member John Hooper resigned in 2004 because of the plan (even though he owns his own forest, which also harvests trees.) Hooper asked Vanity Fair’s Shoumatoff (they are former Harvard classmates) to write about the tree-cutting for Vanity Fair, according to the San Francisco Chronicle.

The connection between Hooper and Shoumatoff pissed off the pro-harvesting club members. They sent a letter to VF editor-in-chief Graydon Carter, but Shoumatoff didn’t quit the story. In fact, he told the club’s PR flacks to talk and quit hiding information. (Spy magazine infiltrated Bohemian Grove in 1989, when Carter was editor there.) An excerpt from that article, written by Philip Weiss:

“At this point some hamadryads (tree spirits) and another priest or two appeared at the base of the main owl shrine, a 40-foot-tall, moss-covered statue of stone and steel at the south end of the lake, and sang songs about Care. They told of how a man’s heart is divided between “reality” and “fantasy,” how it is necessary to escape to another world of fellowship among men. Vaguely homosexual undertones suffused this spectacle, as they do much of ritualized life in the Grove. The main priest wore a pink-and-green satin costume, while a hamadryad appeared before a redwood in a gold spangled bodysuit dripping with rhinestones. They spoke of “fairy unguents” that would free men to pursue warm fellowship, and I was reminded of something Herman Wouk wrote about the Grove: ‘Men can decently love each other; they always have, bur women never quite understand.’”

Anyway, Shoumatoff was captured in the woods by a plumber moonlighting as a security guard on the night of July 13th. Update! We hear that he got into the club briefly before being thrown out, contrary to the SF Chroncle reports that he was caught while sneaking in.

http://gawker.com/5025813/vanity-fair-editor-arrested-for-infiltrating-elite-private-club

First, my injury. Because of a silly fear that I might blow up a plane with explosives tucked into my running shoes, I, along with everyone else in the security checkpoint line at O’Hare, including two-month-old babies wearing little booties, had to doff my footwear. Clad in just socks, I tried to maneuver my way around a metal counter that held those plastic trays carrying my laptop, my shoes, my belt and change and keys, and my carry-on bag, and in the process my unprotected big toe hit a sharp piece of metal protruding from the table.

The metal sliced right under my toenail, making a painful and bloody cut into the soft tissue under the nail. Cursing and bleeding, I made my way through the metal detector, and collected my goods.

Now, inside my bag, unbeknownst to the Transportation Security Administration inspectors, was a bottle of mouthwash. It was larger than the approved 2-oz size, and it was not in an approved sealed plastic bag. But TSA inspectors looking into their video screens at the X-Ray machine didn’t see it, because I made sure that it was vertical as it passed through. All they saw was a little circle of plastic. Likewise, on an earlier flight, I had made my way aboard with a Swiss Army knife. By standing it in my carry-on bag so that it would be vertical for the X-Ray, I was able to slip it through and onto the plane.

Now clearly I’m not a terrorist (though for a time, thanks to my anti-Bush, anti-war journalism, and an expose about the TSA’s “no-fly” list abuses, I was on the watch list, and would get a circled “S” written on my boarding passes that ensured that I would be pulled aside to have my carry-on luggage hand searched). But if I were a terrorist, I sure wouldn’t try to commandeer a plane with a jackknife. I’d want something bigger. But that would be simple. One could easily carry on a 10-inch blade the same way. If one were nervous about doing that, it could be a ceramic or better, a Plexiglas blade—plenty dangerous, but invisible to X-rays and metal detectors.

For that matter, if I were into suicide bombing and wanted to manufacture a liquid explosive, why on earth would I try to do it by smuggling on two large jars of ingredients, when I could just put them in plastic baggies and carry them aboard in my pockets? Unless you happen to be singled out for special handling, nobody at the security checkpoints pats you down. They just have you walk through the metal detectors while TSA inspectors are busy patting down randomly selected elderly nuns and racially profiled people, like unfortunate Sikh men wearing turbans.

Any dedicated terrorist hijacker could figure out numerous ways to get explosives and weapons onto a plane past these security arrangements.

And that’s not even counting having the weapons smuggled into an airport gate area along with all the goods that are offered for sale there, where they could be picked up after a hijacker had already cleared security. There is no way that all the newspapers, magazines, clothing, trinkets, bottles of booze and personal hygiene products, etc., are screened adequately as they are brought in each day to fill the concession stands for the day’s business. First of all, one would have to open and check every bottle and box offered for sale.

If you were genuinely worried about protecting against hijackers, you would have those inspections at the entrance to each plane, not at the entrance to the terminal, and you wouldn’t have all that commerce inside the security zone. Ah! But what a roar of outrage we’d hear from the business community if that lucrative business venue were eliminated!

Which brings me to the real question: Why do we have all this pointless and easily breached security, not to mention a list that contains an astonishing one million names of suspected “terrorists”?

Clearly, the security program is not about protecting the flying public, or the nation’s tall buildings. That could be done much more cheaply by putting air marshals on all flights, the way they do at El Al, the Israeli airline that has never had a successful hijacking.

No, this is all about heightening the fear level of the American people, to routinize us to living in a police state.

The truth is, nobody is really interested in trying to hijack planes anymore. First of all, the “crash into buildings” tactic is dead. Pilots are now flying armed in armored cockpits that cannot be easily entered, and would not accede to a terrorist’s demands any longer, knowing what happened last time. And passengers would not sit passively in a cabin takeover attempt, either. As a result, we don’t have to worry about such things any longer.

The ease with which security could be breached, and the fact that it hasn’t happened now for seven years, is evidence enough that nobody is even trying to do it.

So let’s do away with all this time-consuming, costly, and politically motivated nonsense before I injure my other big toe.

DAVE LINDORFF is a Philadelphia-based investigative journalist and columnist. His latest book is “The Case for Impeachment” (St. Martin’s Press, 2006 and now available in paperback).  His work is available at www.thiscantbehappening.net

The US will not prosecute Bush

By John McQuaid, guardian.co.uk 

The evidence is mounting that top US officials - including President George Bush, vice-president Dick Cheney and former defence secretary Donald Rumsfeld - committed war crimes by authorising the use of “enhanced interrogation techniques” - ie torture. The war crimes drumbeat has accelerated with the recent release of two books: New Yorker writer Jane Mayer’s The Dark Side and Philippe Sands’s Torture Team, which document the executive decision-making that led the US to set aside not just the Geneva Conventions, but a tradition of respect for the human rights of enemy prisoners that dates to back to George Washington’s prohibition on harming POWs.

Current and former Bush officials are now scrambling to avoid the opprobrium - not to mention the risk of prison time - that would result from criminal prosecution. This week, Capitol Hill was treated to the spectacle of Sands and Douglas Feith, a former Rumsfeld protege who was an architect of the Iraq invasion, testifying side by side before a House subcommittee. In an earlier interview with Sands, Feith claimed to be “really a player” in the engineering of legal workarounds to the Geneva Conventions at Guantánamo. Before the committee, Feith declared his unerring support for Geneva.

The stream of commentary on this topic is waxing as we near the end of the Bush presidency. New York Times columnist Nicholas Kristof went his fellow pundits one better, suggesting that what the US needs is a South Africa-style Truth and Reconciliation Commission to sort through not just the legal transgressions of the past eight years, but the political manipulations as well.

Hang on a moment. There is no way that Bush, Cheney, Rumsfeld or the second- and third-tier enablers of torture - the Feiths and John Yoos - will be prosecuted for war crimes in the United States.

The obstacle to prosecutions is the absence of a national consensus on the specific issue of torture, or, more generally, the Bush administration’s actions on terror. Certainly there is a consensus that the Bush administration has been a disaster and that the Iraq war was a mistake. But this doesn’t apply to specific terrorism policies, on which the White House still has more or less a political blank check to do as it pleases. (Whether a majority of the public supports those policies is debatable, but Republicans still back Bush, and Democrats are still cowed by the risk of appearing soft on the issue.) See Kevin Drum on why this is not Watergate: a well of political support remains for Bush’s terror policies, “enhanced interrogation” among them.

The matter of criminal culpability lies several steps further on. Even if they concede that torture is a war crime and buy the practical arguments against it - that it generates false information, endangers US soldiers should they be taken prisoner and is disastrous for America’s image and diplomatic efforts - many Americans would still resist prosecuting officials whose motive was averting terror attacks.

This also goes deeper than politics. I hate to sound cynical, but Americans don’t have much interest in accountability, truth or reconciliation. Our national motto is “move on”. The buzzword of the decade is Stephen Colbert’s “truthiness”. Trials or commissions on war crimes would force a reckoning that many Americans don’t think is necessary and/or would simply rather not have.

However, those still hoping to see Bush and his associates in the dock might see promise in another feature of American culture: its disposability. What seems set in stone today, an immutable law of politics, almost certainly won’t be tomorrow. What once seemed an issue of high principle to many conservatives - embracing torture and defending Bush & Co - may quickly become passé once Bush leaves office and other issues come to dominate. The ideal condition for a successful prosecution is not a rising tide of outrage at Bush that would stoke the divisions in US society, but indifference.

Still, the most likely scenario for a torture prosecution is something like what happened to ex-Chilean dictator Augusto Pinochet. His own country wouldn’t touch him, but an industrious Spanish prosecutor - aided by the work of human rights activists and backed by international opinion - indicted him for torture and war crimes and nearly snared him. If Bush, Cheney or Rumsfeld faced a similar indictment from abroad, Americans would be outraged - but not really. The US government would try to head it off, but wouldn’t be able to do much. No one would actually go on trial, but the indictees would see their travel options humiliatingly curtailed and go to their graves knowing the phrase “charged with war crimes” will be next to their names in the history books.

The documents show the activities occurred from at least March 2005 to May 2006 and that officers used false names, which the documents referred to as “covert identities” - to open e-mail accounts to receive messages from the groups.

Also included in the 46 pages of documents, obtained by the Maryland chapter of the American Civil Liberties Union through a Freedom of Information Act lawsuit, is an account of an activist’s name being entered into a federally funded database designed to share information among state, local and federal law-enforcement agencies on terrorist and drug trafficking suspects.

ACLU attorney David Rocah said state police violated federal laws prohibiting departments that receive federal funds from maintaining databases with information about political activities and affiliations.

The activist was identified as Max Obuszewski. His “primary crime” was entered into the database as “terrorism - anti govern(ment).” His “secondary crime” was listed as “terrorism - anti-war protestors.” The database is known as the Washington-Baltimore High Intensity Drug Trafficking Area, or HIDTA.

“This is not supposed to happen in America,” said Mr. Rocah. “In a free society, which relies on the engagement of citizens in debate and protest and political activity to maintain that freedom … you should be able to attend a meeting about an issue you care about without having to worry that government spies are entering your name into a database used to track alleged terrorists and drug traffickers.”

Mr. Rocah called the surveillance “Kafka-esque insanity.”

State police Chief Col. Terrence B. Sheridan said the agency “does not inappropriately curtail the expression or demonstration of the civil liberties of protesters or organizations acting lawfully.”

The surveillance of Mr. Obuszewski, of Pledge of Resistance-Baltimore, and another person came to light during his trial for trespassing and disorderly conduct in a 2004 protest outside the National Security Agency’s headquarters in Fort Meade, Md.

Documents released by the prosecution revealed that the protesters had been under surveillance by an entity called the Baltimore Intelligence Unit.

The Maryland ACLU sued last month, claiming the state police refused to release public documents about the surveillance of peace activists.

The documents, which include intelligence reports and printouts from the database, show that several undercover officers from the state police’s Homeland Security and Intelligence Division attended meetings of three groups: Mr. Obuszewski’s group; the Coalition to End the Death Penalty; and the Committee to Save Vernon Evans, a convicted murderer who was slated for execution.

The documents show at least 288 hours of surveillance over the 14-month period. The undercover officers attended at least 20 organizing meetings at community halls and churches and a dozen rallies against the death penalty, including several at the state’s SuperMax jail in Baltimore.

Included in the documents are references to a proposed sit-in at the offices of Baltimore County State’s Attorney SandraA. O’Connor. However, they show no trooper reports of violence or threats of violence. Organizers repeatedly stressed the importance of peaceful and orderly demonstrations, the documents show.

“There were about 75-80 protestors at the rally and none participated in any type of civil disobedience or illegal acts,” said one report of a demonstration against the death penalty at the SuperMax jail. “Protesters were even careful to move out of the way for Division of Correction employees who were going into the parking lot for work.”

Still, information about the protesters and their activities was sent to seven agencies, including the National Security Agency and an unnamed military intelligence official.

“Americans have the right to peaceably assemble with others of a like mind and speak out about what they believe in,” Mr. Rocah said. “For state agencies to spend hundreds of hours entering information about lawful and peaceful political activities into a criminal database is beyond unconscionable. It is a waste of taxpayer dollars, which does nothing to make us safer from actual terrorists or drug dealers.”

http://washtimes.com/news/2008/jul/18/maryland-troopers-spied-on-activist-groups/

The 4th US Circuit Court of Appeals in Richmond, Virginia, took up the case of Ali Al-Marri, the only “war on terror” suspect arrested on US soil, and reversed a June 2007 decision by a lower court denying Bush the power to keep the suspect jailed indefinitely and ordering his release.

By a 5-4 decision, the Richmond court, reputedly one of the most conservative in the country, said: “if the government’s allegations about Al-Marri are true, Congress has empowered the president to detain him as an enemy combatant.”

At the same time, the court also decided by a 5-4 vote that “al-Marri has not been afforded sufficient process to challenge his designation as an enemy combatant.”

The US Supreme Court ruled last month that war on terror detainees held at the US naval base in Guantanamo Bay, Cuba, under habeas corpus, have a right to challenge their detention in a civilian court.

The high court concluded that the Guantanamo naval base can be treated as US territory where rights enshrined in the US Constitution must be respected.

The US Justice Department welcomed the Richmond court’s decision upholding Bush’s power to jail terrorist suspects indefinitely.

“We are pleased with the court’s en banc decision today … that authority is backed by the support of Congress and is a vital tool in protecting the nation against further terrorist attacks,” it said in a statement.

Al-Marri, a Qatari citizen imprisoned for five in a military jail in South Carolina, was arrested on suspicion of credit card fraud three months after he arrived in the United States on a student visa with his wife and children on September 10, 2001.

In 2003, Bush declared him an “enemy combabant” and charged him with receiving training in Afghanistan after volunteering as an Al-Qaeda martyr in 2001.

http://afp.google.com/article/ALeqM5iitg1tjFf87Gqbm0EPJrSyqCOjNQ

The Democratic-controlled House of Representatives approved the provision in adopting a broad measure to authorize funding of U.S. intelligence for the 2009 fiscal year. A related bill awaits action in the Senate.

Passage of the multibillion dollar bill came on a voice vote, indicating broad assent, despite the White House veto threat issued earlier in the day.

In addition to the contractor ban, the White House said it also objected to provisions to force the president to give Congress more sensitive national security information, and to establish an inspector general with authority over all federal intelligence agencies.

Other measures in the bill would increase funding for intelligence agents and to monitor developments in Asia, Africa and Latin America.

The bill contains many provisions “that conflict with the conduct of intelligence activities,” the White House budget office said in a notification to Congress. “If (the bill) were presented to the president, the president’s senior advisors would recommend that he veto the bill.”

CIA Director Michael Hayden has acknowledged that outside contractors were used to conduct some interrogations in the agency’s detention program for suspected terrorists, which has been widely condemned for harsh techniques that critics say amount to torture.

Hayden told Congress in February he believed contractors helped conduct “waterboarding,” the fiercely condemned simulated drowning technique that he acknowledged using on three al Qaeda suspects. 

Critics say the use of outside contractors could allow the CIA to dodge accountability for abuses, but the agency has said contractors are subject to the same laws as agency staffers.

“Our bill will take detention-related activities out of the hands of private contractors and put the responsibility back where it belongs, in the hands of authorized government personnel,” U.S. Rep. Jan Schakowsky, an Illinois Democrat, said shortly before the House Intelligence Committee passed the authorization measure in May.

WHITE HOUSE OBJECTS

But the White House said prohibiting contract interrogators could deprive the program of necessary questioning skills and expertise.

“Such a provision would unduly limit the United States’ ability to obtain intelligence needed to protect Americans from attack,” it said.

The House adopted a Republican-sponsored amendment aimed at preventing federal agencies from barring official use of terms such as “jihadist” or “Islamo-fascism” in discussing counterterrorism efforts.

Some government officials have warned that the use of such terms alienates moderate Muslims, but supporters of the amendment argued that they simply reflect words used by militant Islamist groups.

Lawmakers also approved a provision requiring the government to give prompt updates of any new intelligence on Iran’s nuclear program, reflecting dissatisfaction with a National Intelligence Estimate last year that reported Iran had suspended design work on a nuclear device. 

The Senate Intelligence Committee passed in May its version of the overall bill, which contains a similar ban on CIA interrogation contractors. It also would ban CIA harsh interrogations and require that the Red Cross be granted access to all detainees.

The measure awaits action by the full Senate. Differences between the House and Senate versions would have be resolved before any final measure is passed.

Major funding provisions of the intelligence bill are classified. Last year the the administration bowed to a law ordering disclosure of the annual intelligence budget and said it had spent $43.5 billion in fiscal 2007.

http://in.reuters.com/article/worldNews/idINIndia-34549020080716?pageNumber=3&virtualBrandChannel=0

The newspaper obtained use-of-force reports for 115 Taser-related incidents between Oct. 15, 2000, and March of this year through a freedom of information request.

That time period begins just a few months after the Taser was introduced in the city as part of a pilot project.

Although most incidents occurred in houses or apartments, at least three people were hit with a Taser in hospitals and four others in police cellblocks, the reports said.

In one incident, Ottawa police officers arrived at an apartment one night about five years ago to find a suicidal male with four steak knives embedded in his stomach.

He did not follow their commands, so officers drew a gun, but used a Taser instead, and took him into custody within about 20 minutes.

The reports are regulated by the Ministry of Community Safety and Correctional Services and are to be filled out and reviewed by the police service.

In another recorded incident, a man armed with a Taser was found in a public bathroom and was struck with a Taser by police after allegedly being unco-operative.

Several cases involved people who were allegedly actively resisting arrest or threatening and assaulting police officers or other people at a scene.

In 2000, a male threatened to shoot a paramedic crew that arrived at an apartment. Last year, a “very aggressive, very large six-foot-four, 250 pound male” was “not interested in verbal communications” and threatened three officers at the scene with “I’m going to punch your f—ing lights out.”

Sixty-five males and 13 females were involved in Taser incidents. The person’s sex was not indicated in 37 reports.

The high-profile deaths of several people in Canada who had been shocked by Taser have made the use of the device highly controversial. Some say the stun-guns should be banned pending further investigation into their safety, while others argue they save lives.

Much of the debate was prompted by the death of Polish immigrant Robert Dziekanski, who died in October after RCMP officers used a Taser on him at Vancouver International Airport.

Last month, the RCMP’s watchdog agency issued a report probing the force’s use of Tasers, and recommended that no officer with less than five years experience be allowed to use the device.

The RCMP public complaints commission also recommended the force instruct its members to immediately seek medical attention for the target of a Taser and make changes to its reporting form in order to include more information.