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The Progressive
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In a two-hour meeting, the country's liberal, leftist, and Islamist leaders discussed best governance for Egypt.
CAIRO--It’s 9:30 on a Tuesday night, and democracy is playing to a standing-room-only crowd at the Egyptian Bar Association.
On stage—actually a half-finished podium with cables hanging down like jungle vines and illuminated by a single fluorescent bulb—are three coordinates on Egypt’s political spectrum: leaders of the country’s liberal, leftist, and Islamist “streams,” as proto-political parties here are often called. Over the course of a two-hour discussion, each will market his particular brand of governance as the best match for a country still reeling from the peaceful revolt that in February ousted President Hosni Mubarak after 30 years of dictatorial rule.
As the proceedings begin, some 200 people have settled into their seats and more chairs are summoned to accommodate late arrivals. It is a diverse audience, with both sexes and age groups represented in roughly equal measure. Each panelist is given 15 minutes to make his pitch, beginning with the liberal. A well-known television personality, he wears a blue blazer and a white shirt opened at the collar. In deliberate fashion and without notes, he rails against the evils of monopoly and privatization. Public utilities should be controlled by the state, he says. Capital markets are founts of corruption, and as such, must be subject to strict regulation.
Next comes the Islamist, a functionary of the Muslim Brotherhood, Egypt’s most prominent fundamentalist group. Having once built vast empires on foundations of lightly regulated commerce—the World Bank, after all, once celebrated the 14th-century Muslim scholar Ibn Khaldun as an apostle of privatization—Islamists are generally free-market minded. This particular specimen, however, is not above trimming his message to suit a crowd where covered women and bearded men are a minority. After treating the audience to three Koranic injunctions—proof, he says, of the reconcilability of Islam and democratic values—he embraces a rigorous regulatory role for the state as the guarantor of social justice. In particular, he prescribes a minimum wage, antitrust legislation, revised subsidies for the poor, and a restoration of the wakf, or charitable trust, to rebuild Egypt’s dilapidated education system.
For the leftist, this is thin gruel indeed. Citing a recent survey by International Republican Institute, a think tank supported by the U.S. Republican Party, he notes that two thirds of the citizens who participated in the revolt against Mubarak did so in opposition to economic injustice in a country where 45 percent of the population lives below the poverty line and 20 percent of the population accounts for 60 percent of national income. (In America, by way of comparison, the top 20 percent of workers accounts for half the country’s wages.) The Egyptian media, he says, is idolatrous of the market-led reforms imposed by the old regime even as income disparity widened, living standards eroded, and the “digital divide” between the Web-empowered and the computer illiterate deepened. To level such iniquity, he says, the new government must redistribute wealth, establish progressive taxation, fortify worker rights, and kill energy subsidies for large corporations. (One wonders what the grand old IRI would have to say about that.)
Question time. A women approaches the microphone and charges the liberal as being a fraud and a poseur who sat out the revolution from the comfort of his perch as a senior fellow at the Carnegie Endowment for International Peace in Washington. (This charge is later contested by a man who actively resisted loyalists forces during the peak of the struggle.) A union organizer condemns the panel for neglecting Egypt’s estimated 25 percent unemployment rate and the fact that 20 percent of laborers work for a monthly wage of 200 Egyptian Pounds, or about $34, on temporary contracts that deny them basic rights and benefits. A young man demands more from the Islamist than Koranic scripture, condemns “neoliberal capitalism,” and proclaims himself a proud socialist and an admirer of Noam Chomsky. For that, he receives the heartiest applause of the night.
Did Egypt wage a successful revolution against a sclerotic dictatorship only to resurrect the command economics of the Nasser era? Not necessarily. After three decades of corrupt, authoritarian rule and the last half decade of free market reforms that failed to adequately raise living standards, it should come as no surprise that ordinary Egyptians would demand the right to strike, a minimum wage, affordable healthcare, and a heavier tax burden on the rich. While upcoming elections may turn out a parliament hostile to continued privatization, it is unlikely to re-nationalize the banks. What is most striking about Tuesday’s debate is its pugnaciousness, which may come in handy as the revolution matures and illiberal elements conspire to hijack it.
CAIRO – On a recent Sunday evening, at the Groppi tea room in downtown Cairo, the Muslim political activist Islam Lotfy encountered a fellow revolutionary — a proud leftist — and warmly shook his hand. The two men, both in their 20s, served in the vanguard of a nonviolent revolt that ended in February with the ousting of dictator Hosni Mubarak. It was a rebellion by, and in many ways for, Egypt’s youth, and its leaders are now struggling to define the terms of the nation’s “Second Republic.”
There was a time in Egypt when it was perfectly normal for a prominent Islamist and a left-wing secularist to meet publicly as comrades as well as rivals, particularly in the Groppi, a 100-year-old relic of Egypt’s pre-Nasserite, imperial age. Back then, liberals and conservatives, capitalists and communists, and Leninists and Trotskyites colluded and intrigued for political advantage under the authority of a progressive constitutional monarch. In his own way Lotfy, a member of the Muslim Brotherhood, Egypt’s oldest and most powerful Islamist group, is laboring to revive the trace elements of that era as the country’s first democratic elections loom in the unruly and uncertain aftermath of Mubarak’s departure.
Last week, a cabal of young Brotherhood insurgents, with Lotfy at the helm, announced they were launching the decidedly faith-neutral Egyptian Trend Party in defiance of the movement’s old guard. A few days ahead of the announcement, I interviewed Lotfy about his party and the future of the Ikhwan, as the Brotherhood is known in Arabic, and his conclusions are shared by a growing number of informed observers here: The Ikhwan, he believes, will not survive a democratic Egypt in its current form.
“The Muslim Brotherhood is a charitable organization with moderate teachings,” Lofty told me in between a cascade of political meetings. “It is credible and honest and it is of great value. But it must evolve with the times. It needs to reach out to the people, the entire population. That is our guarantee against dictatorship.”
The day before we met, Abdel Moneim Abou el-Fotouh, a senior Brotherhood member known for his liberal views, had been expelled from the group. He had antagonized the leadership by mounting an independent campaign for president, a position it had previously forbidden its members from contesting so as not to stoke fears of an Islamist onslaught. As the head of Egypt’s medical guild, Dr. El-Fotouh was highly regarded, and his sacking — the first such dismissal within the Muslim Brotherhood in nearly 60 years — scandalized Egypt’s political classes. It also fueled speculation that the Ikhwan was fracturing under its own weight.
“We expected they would take action against El-Fotouh,” Lotfy said. “But this was by far the worst thing they could have done. They’ll probably be calling us in next and I expect I’ll be getting the same treatment.”
By “us,” Lotfy means the 200 members of the Brotherhood’s youth cadre who have joined the Egypt Trend party, which has identified itself with such temporal causes as gender equality, affordable health care and a minimum wage. In doing so, they implicitly rebuked the Ikhwan’s own Freedom and Justice party, which because of its extensive social network is expected to win a majority of seats in parliament when national elections are held in the fall — assuming, of course, it can survive the convulsions that are rocking it from within. “There now appears to be a moderate wing within the Brotherhood and there’s no guarantee it would be the only one,” Samir Soliman, a professor of political science at the American University in Cairo, told me. “The divisions are clear for all to see.”
Generational tensions within the Brotherhood had been simmering for years leading up to January 25, when activists called for a convergence on central Cairo’s Tahrir Square to rally against the brutality and corruption of the Mubarak regime. While young Ikhwanists eagerly joined the movement, manning the barricades alongside secularists and Christians to prevent security forces from dispersing the crowds, their elders carefully avoided it. Only when it was clear Mubarak was on his way out did the leadership conclusively demand his departure.
Even then, say disaffected Ikhwan members, group patriarchs discounted their role in the rebellion and dismissed their requests for greater influence over policy making. In late May, when Freedom and Justice unveiled a platform that incorporated none of their demands for more transparency, greater interaction with secular Egypt and an emphasis on civil liberties, Lotfy and his confederates decided to defect. “We held out as long as we could,” he said, “But when it was clear they were ignoring our positions, we began planning a movement of our own.”
Lotfy describes his fellow dissidents as “Arab in identity, Islamic in culture and rooted in Africa.” It will be a diverse constituency, he vowed, in spirit with Egypt’s once variegated political terrain. “We’re Muslims, but we’re pragmatic,” he said. “If I think a Marxist has some good ideas, about how to fix something, for example, I’ll listen.”
With that, Lotfy excused himself to resume his next cycle of meetings, and with it his ecumenical leap of faith.
Americans will continue to fund the world’s largest armed force without knowing how much it really costs.
The U.S. military may have under its command the most highly resourced and disciplined armed force in history, but the same cannot be said of its accountants. Faced with the specter of severe spending cuts--at least by Defense Department standards--the Pentagon has vowed to identify savings by reforming its book-keeping system. The objective, according to an article in this week’s DefenseNews, is “to make DoD auditable by 2017.”
The overhaul is part of a kabuki dance the Defense Department regularly performs with politicians around its scandalously opaque ledgers. The same military machine that can zap a suspected terrorist with the tug of a joystick and deploy a carrier battle group anywhere in the world within days has no idea how much stuff it has or what it’s worth. There are no hard appraisals of how old its weaponry is, how many third-party contractors it employs, or how many buildings it owns or rents. If the Pentagon were a private corporation, it would be the largest as well as the most poorly run, at least from an auditor’s perspective; shareholders would demand an extraordinary general meeting and its board of directors would be voted out for abrogating its fiduciary trust.
The Pentagon was first obliged to submit an annual balance sheet in 1991 and it has received failing grades ever since. According to its own Inspector General, the military has from 1991 to 2009 lost track of an estimated $1 trillion in taxpayer funds. In 2002, its comptroller and chief financial officer found that eight of its nine financial statements were not reliable and issued a disclaimer of opinion on them. In 2008, all but two financial statements were so dodgy as to warrant the same. In October 2009, the Pentagon’s IG found serious inadequacies in its bookkeeping standards, including a financial management system that occludes “accurate, reliable and timely data.” In 2010, impelled by the worst economic crisis in eighty years, the Senate Finance Committee issued a report that slammed the Pentagon’s “total lack of fiscal accountability” for “leaving huge sums of the taxpayers’ money vulnerable to fraud and outright theft.”
In a recent status report to Congress, Pentagon Comptroller Robert Hale acknowledged that his agency’s books were riddled with holes but he assured lawmakers there was no cause for alarm. American tax dollars, he wrote, “are being managed responsibly."
I’m sure Mr. Hale believes that. I would too, if government bean-counters could accurately report how much money has been spent wooing warlords in Afghanistan or digging wells in Djibouti, to say nothing of cost-plus tenders to provide security for American bases abroad or the value of merchandise bound for their commissaries that ended up in black-market kiosks. Of course, when U.S. Army captains are reduced to paymasters in remote places, handing out saran-wrapped blocks of $100 bills for the purchasing of hearts and minds, a lot can slip between the cracks.
To be fair to the green-eyeshade brigade, it would be a lot easier to account for the military’s assets if it had a capital budget, a means by which planners can measure the value of future investments in plant, machinery, and research and development. Without such a resource, according to David Berteau, a senior adviser at the Center for Strategic and International Studies, budget planners cannot quantify inventories and depreciate replacement costs. And because federal funding is appropriated every year, there is little incentive to prioritize, which is something the Pentagon badly needs to do after a decade of steep budget increases.
“A balance sheet is worthless unless you know the value of your assets,” Berteau told me. “As it is, we’re all guessing what our requirements and needs are. At the core of this is a bigger question: what kind of budget do we need for the type of wars we’ll be fighting in the future?”
Unfortunately, the imperatives of prudent budgeting conflicts with the political demands on lawmakers. Having to allocate for long-term replacement costs crowds out funds available for the production of new weaponry, a lucrative source of jobs for constituents back home. Viewed from Capitol Hill, there is little to gain from a budget process that imposes discipline as well as clarity, which means Americans will continue to fund the world’s largest, most lethal armed force without knowing how much it really costs or what they’re getting from their investment.
Americans have become far too willing to be led into conflicts they haven’t troubled themselves to properly understand.
After 10 years of waiting, billions of dollars spent, and thousands of lives lost, there was something anticlimactic about Osama bin Laden’s violent demise.
He went down in a torrent of lead in a seedy fortified compound, more like the doomed bête noire in a Hollywood gangster film than the world’s terrorist mastermind. The operation, as one might expect, was hailed by U.S. officialdom as redemption for one of the nation’s darkest days as well as a reminder that the danger posed by Islamist militants resonates as much today as it did in the immediate aftermath of the attacks of Sept. 11, 2001.
Most predictably— and significantly, given how it relates to national security—there was no talk of what motivated bin Laden’s war on America in the first place. It is a public discussion that has yet to be held, and we neglect it at our peril. Otherwise, the war declared by President Obama’s predecessor may well become what it already looks like to much of the world: an endless, U.S.-led war on Islam.
The September 11 attacks, however obscene and inexcusable, were by bin Laden’s own account neither unprovoked nor inspired by some radical interpretation of the Muslim faith. Instead, they were a most extreme expression of widespread antipathy for America’s Middle East policies. Bin Laden laid out the basis for his animus against America as early as August 1996 when he lamented in a fatwa published by a London-based newspaper how “the people of Islam had suffered from aggression, iniquity, and injustice imposed on them by the Zionist-Crusaders alliance,” a reference to America’s close relations with Israel as well as pliant but oppressive Arab regimes. He condemned what he said were U.S.-abetted massacres done to Muslim communities from Palestine to Chechnya and the hundreds of thousands of Iraqi children who died from lack of food and medicine due to the “unjustifiable” U.S.-led sanctions on the country during the 1990s. The deployment throughout the Gulf states of U.S. forces, particularly in Saudi Arabia, he argued, is “the greatest of … aggressions incurred by the Muslims since the death of the prophet.” (The Pentagon tacitly acknowledged the provocative quality of its troop presence in the Saudi kingdom by dissolving it in 2003.) In the years that followed, bin Laden also excoriated Arab leaders—the very autocrats who now face popular uprisings against their rule—as corrupt apostates and traitors for bartering away control of their oil fields to western energy companies, as well as past and current U.S. embargoes on such Muslim countries as Iraq, Syria, Sudan, Afghanistan, Libya, Pakistan, Iran, and Indonesia.
By the time of the September 11 attacks, bin Laden’s opposition to U.S. policies—though not his embrace of violence as a means of resistance—was shared across a broad spectrum of humanity, both Muslim and non-Muslim, and secular as well as religious. Anyone whose job it was to anticipate the al Qaeda leader’s next move understood what drove him. No less an authority than Michael Scheurer, the CIA’s top Middle East specialist and who spent much of his career advocating for bin Laden’s liquidation, wrote in a 2004 book, “Bin Laden has been precise in telling America the reasons he is waging war on us. None of the reasons have anything to do with our freedom, liberty, and democracy, but have everything to do with U.S. policies and actions in the Muslim world.”
Scheurer, of course, was responding to a speech delivered to Congress by then President George Bush weeks after the September 11 attacks. In it, Bush declared that the country had been targeted, not as a combatant in the Middle East’s 60-year war, but by “enemies of freedom.” Al Qaeda leaders, he said, “hate … our freedom of religion, our freedom of speech, our freedom to vote and assemble and disagree with each other.”
Peter Bergen, an expert on bin Laden and Jihadism, has vigorously disputed this. In his 2006 book, The Osama bin Laden I Know, he writes how the al Qaeda leader “has been pretty consistent about why he’s attacking the United States. It’s because of America’s foreign policies. ... It’s about what America has been doing in his backyard, as he sees it.” By grossly distorting bin Laden’s motives, however, Bush earned for himself a popular mandate to wage a global war against terrorism as if it were a symmetrical adversary in itself and not a tactic waged by the weaker side in an asymmetric struggle. The unintended consequences of such a ham-fisted approach—the calamitous invasion and occupation of Iraq, a national security state of unknown scope and depth, the moral tragedy of Guantanamo—are with us still.
Threat inflation, to say nothing of fabrication, was certainly not unique to the Bush White House. For more than six decades, American presidents have committed the nation to war against one grossly inflated or imagined threat after another, largely to meet imperatives of domestic politics rather than to protect core U.S. interests. The War on Terror, meanwhile, was the byproduct of George Bush’s profound contempt for the realities of the Middle East and America’s role in it, a hostility he extended to regional experts in his own government who may have counseled him away from disaster. [See a slide show of six potential terrorist targets.]
Parochialism and ignorance are not the stuff of conspiracy, however, and Americans have become far too willing to be led into conflicts they haven’t troubled themselves to properly understand. We should, by now, expect our elected officials to liberally lie, dissemble, and deceive. It is the citizen’s duty to be curious about the world he inhabits, to understand it for its own sake, and to dissent when politicians and pundits manipulate it for theirs. When powerful nations refuse to honestly account for the things they do, it degrades the public capacity for self-examination and correction. The people become complicit in a corrosive culture of denial.
If, as Lord Acton put it, absolute power corrupts absolutely, hegemonic power deludes lethally.
Has Wall Street changed? Will legislators in Washington impose modesty and restraint on an industry notorious for possessing neither? Can they banish greed from a system that just more than a year ago brought the global financial system to the brink of collapse?
Certainly the nation’s top investment banks, at least those that remain, have shifted down to suit the risk-aversion trend. No longer are traders loading up on synthetic derivatives and cluttering their balance sheets with unknowable levels of debt. With the help of record-low interest rates, investment-grade corporations are deleveraging by raising cash to pay off bank loans. Just in time for the holidays, corporate heads are engaging in their own secular acts of contrition. Over the past three weeks, Goldman Sachs and General Electric have expressed regret for feeding a speculative pyre that became an inferno.
There is a sense among the more thoughtful of Wall Street princelings that it is better to work with Congress than to oppose it openly. On any given day, the Acela Express, the elite rail service that links Washington and New York, is filled with corporate executives eager to make their case against the kind of reform some liberal legislators are demanding. But beyond that there is an implied culture of invulnerability on Wall Street, a knowing sense that populist politicians, like military generals busily planning for the last war, are looking backward while financiers incubate The Next Big Thing that will reshape the world.
Washington is reactive, say corporate execs. It responds to a financial crisis with a new set of purpose-built regulations, despite the fact that asset bubbles are as distinct from one another as snowflakes. In contrast, the Street – which has, by the way, migrated from its original home in Manhattan’s gritty downtown section to glamorous midtown, alongside the top-flight boutiques and cafes of Rockefeller Centre – is innovative, bold and visionary. Like the scientists who split the atom, traders are not about to give up on their more exotic confections just because they are capable of great destruction. After all, junk bonds were once rogue products and became respectable in time.
Besides, say the finance lords, market meltdowns are incidental to the Street’s capacity for community enrichment. A generation ago, the interest rate on a US$100 million (Dh367.2m) bond issue to build, say, a municipal water and sewage system was a whopping 3.5 per cent. Today, thanks to financial innovations such as interest rates swaps, which allow issuers to lock in spreads at a fixed rate, the interest on such a transaction would be a mere $500,000 or so. And now Congress, in its primitivism, would introduce “reforms” that would deprive local government of such efficiency.
Or take year-end bonuses, which last year averaged $13.8m among the top 100 executives in the US. Excessive? Not so much, the Street reminds us, when you consider that the chief executive of a top investment bank routinely works 18 hours a day, every day, to keep his institution afloat in an age where huge trades, conducted in micro-seconds, can turn entire markets upside down. The average longevity of a Morgan Stanley partner, it turns out, is only four years and 10 months. With an attrition rate like that, why should a managing director strategise for the long term when his knees are likely to give out in just a few years? Why not grasp for the big carrot on a short stick and squeeze what you can out of every trade and underwriting deal?
And the controversy over ratings agencies? Certainly – begins a rare Street mea culpa, followed by a world-weary appeal to reason – there are conflicts of interest when firms like Moody’s Investors Service and Standard & Poor’s are remunerated by the very companies they are appraising. But by all accounts, the process is transparent. Prospective investors have only to search the internet to learn the agencies’ methodology. Besides, what is the alternative? Congressional oversight, as has been suggested in Washington? Intervention by the very deliberative body that is incapable of funding itself without generous assistance from the People’s Republic of China? Are politicians prepared to assign investment grades to companies and then take responsibility when those decisions prove to be ill-advised, even disastrous?
What distinguishes Wall Street from Washington is not virtue, an attribute sorely lacking in both power centres, but candour. In the 1980s, investment bankers referred to themselves as the Masters of the Universe. In fact, they are more like the mythological gods of ancient Greece, all-powerful and yet blemished by the human characteristics of avarice and arrogance. Like Zeus and Aphrodite, the Goldmans and GEs seduce mortals, and they occasionally pay a price for their conceit. Just as the Greeks saw in the gods they created their own qualities, both inspirational and loathsome, the deities of Wall Street represent an ideal we embrace in prosperity only to demonise in penury.
However fashionable it is to bash the lords of finance, they know that when the cycle finally turns, they will once again be celebrated as heroes. They also understand that this is one claim their counterparts in Washington, gridlocked as they are by petty parochialism and stratospheric indebtedness, can never make.
No expenditure is as misunderstood as the “burden” of foreign aid.
In the mythology of our federal budget wars, no expenditure is as misunderstood as the “burden” of foreign aid. Not only does America’s foreign assistance budget represent a small slice of public outlays--less than 1 percent, compared with the two-thirds or so that is consumed by the Pentagon and entitlements--the nation is among the most miserly of donor countries. A mere 0.19 percent of gross national income is earmarked for humanitarian assistance, compared with the global average of 0.30 percent.
It is not the amount of money that Washington sends abroad that should make taxpayers seethe, but to whom it is distributed. The second largest recipient of U.S. aid is Afghanistan, with an annual dollop of $2.5 billion. At the current rate of exchange, that buys Washington marginal influence over an Afghan head of state whose administrative writ is confined to the municipal boundaries of Kabul, and even that was rolled over two years ago in a patently stolen election. The United States showers nearly $1.5 billion a year on Pakistan, despite a coarsening of relations between it and Islamabad that gets worse by the day. The rate of abuse by recipient countries of U.S. aid, particularly in Afghanistan but also in Iraq, rises inversely to the number of aid workers available to monitor them.
This is nothing, however, compared to the real foreign aid scandal: Washington’s annual outlays to Israel and Egypt as part of the 1978 Camp David peace accords, which accounts for one third of the total aid budget.
Every year for the last three decades, Congress cuts checks to Tel Aviv and Cairo in the amount of about $3 billion and $1.5 billion, respectively. (The exact sums vary from year to year.) The dividends from that investment are displayed vividly in Egypt, which is in political and economic disarray. Its military, which receives more than a billion dollars a year in U.S. aid--promoted by the Pentagon as a way to instill American “values” among Egyptian officers--is hugely corrupt and repressive, as revealed by the army’s increasingly violent response to popular demonstrations in Cairo. The country’s former dictator is being held amid allegations of crimes against humanity and its secular political parties are struggling to establish themselves after generations of U.S.-bankrolled autocracy.
Israel, meanwhile, is the world’s richest welfare state, a highly sophisticated economy on America’s dole. Years ago, when I covered Israel along with the rest of the Middle East for the Wall Street Journal, it was the only country on the beat worth the attention of investors back home. I wrote about Internet entrepreneurs in Nahariya, world-beating aerospace giants in Tel Aviv, and medical technology start-ups in Jerusalem. (My favorite enterprise was launched by a retired air force pilot and a former spy who used principles of artificial intelligence to develop robotic vacuum cleaners. They were test-driven on a putting green-sized stretch of astroturf and I had to step over them to get to the company’s main office in Haifa.)
Last year, Israel joined the Organization of Economic Co-operation and Development, a club for rich nations, and in so doing became the only member in the group that receives humanitarian assistance. Having evolved into a high-tech powerhouse, the country enjoys a per-capita income of $30,000, more than four times the global average. As one of the world’s leading arms exporters--it has been a critical source of weaponry for the Chinese military--Israel is more than capable of providing its own qualitative military edge over its neighbors. Should Israeli arms producers build weapons that might compete directly with their American counterparts--as they did with the Lavi fighter jet in the 1980s, until the U.S. defense lobby had it killed--so be it. After all, what could be more consistent with American values than the free market?
Washington should scrap its Camp David-era commitments to both Israel and Egypt and aggressively reform its other aid programs. It should restore the United States Agency for International Development as the nation’s lead foreign aid provider, which means returning its budget to levels before right-wing Sen.Jesse Helms plundered it in the late 1990s. USAID should be reinstated as an independent agency and its director should be made a cabinet-level appointment. Most importantly, USAID deserves a staff that is large and qualified enough to adequately monitor its aid programs.
Otherwise, Washington should dispense with the pretense of being a “donor” country and owe up to what it is: the generous patron to allies, many of them unsavory, for the sake of often dubious policy ends.
The Muslim Brotherhood, the Cairo-based Islamist group that consumes the minds of American neoconservatives but rates hardly a second thought in Egypt, is in many ways like an ancient papyrus roll displayed in an airtight case lest it crumble when exposed to the elements.
The oxygen and light now leavening Egyptian politics is apparently doing just that. On Monday, the Financial Times reported that the Muslim Brotherhood’s youth branch was appealing to group elders for “an affiliated political party based on the values of the Muslim Brotherhood but not strictly religious.” Forming such a group, one youth leader told the FT, “would prove that we are peaceful, want to work in an institutional framework and are seeking to reform society in all its aspects.”
The fragmentation of Egypt’s largest and most influential Islamist movement should surprise no one who has spent time listening to its members. Far from being a monolith, the Muslim Brotherhood, or Ikhwan, as it is known in Arabic, is well scored by demographic and ideological fault lines. Its diversified ranks—young and old, blue-collar and bourgeoisie, worldly and parochial—shared above all else a hatred of the despot who tormented it. Assuming Egypt will reap the bounty of its democratic revolution—and there are indications that the military authority that now controls the nation may obstruct such a harvest—the elimination of Hosni Mubarak could mean the end of the Ikhwan as we know it.
Well before Mohammed Akef, who in spring 2009 became the first of the Ikhwan’s Supreme Guides to step down from office rather than seek another term, the group was showing signs of strain. (Unlike most political institutions in the Arab world, the Brotherhood holds regular ballots, and 80 percent of its leadership body is directly elected.) Pragmatists like Akef had urged Ikhwan members to participate in provincial and national campaigns, and in a 2005 contest they emerged with an impressive 20 percent share of seats in Parliament. In response, Mubarak cracked down bloodily on the group, vindicating the Ikhwan’s conservative Salafi movement, which was appealing for a withdrawal to the mosque.
The election in January 2010 of Akef’s successor, a relative unknown conservative named Mohammed Badie, was regarded as a victory for Akef’s detractors and a setback for the Brotherhood’s youth wing, which the outgoing Supreme Guide had promoted. A year before Badie’s election, a young Ikhwan member named Mohammed Adel told me that his co-generationalists were seizing the initiative, collaborating with secular opposition groups in defiance of the old guard. “You have a lot of young people who want to be in the leadership, but none of them are in the senior ranks,” he said. “We want to take things to the street.”
So they did. It was the participation of the Brotherhood’s young cadres that lent critical mass to the demonstrations that toppled Mubarak. Conspicuously absent in the confrontation was the Ikhwan’s conservative wing, now a static player in a profoundly ecumenical movement radiating across the Arab world.
Ahmed Salah is a young dissident and secularist who has spent years in Egypt’s political opposition. (In the revolution’s formative hours in Tahrir Square, he was arrested by security agents, beaten and released back into the crowd, only to take a rubber bullet it the head three days later.) On Thursday, he told me by phone that the Muslim Brotherhood had been a marginal player in the upheaval except for its young leaders, who were exploiting a leadership vacuum for the sake of aggrandizing power. The real menace to the revolution, he said, was the military council that has installed itself as a provisional government. Rather than convening talks with a wide array of opposition leaders, Salah told me, it is soft-stalling secularists’ demand for constitutional reform while “negotiating” with an inchoate opposition that includes members of the Ikhwan’s youth branch. (The Financial Times seemed to corroborate Salah’s account, reporting in its Wednesday edition that some thirty human rights groups have criticized the military for excluding secular groups from the constitutional reform panel, which they said was dominated “either by Islamists or legal experts who had helped draw up laws that restricted democracy under Hosni Mubarak.”)
The implication is that Brotherhood upstarts will barter away the soul of the revolution in return for a slice of power in the new regime, in which the generals preserve de facto, if not de jure, control of the country. Such a deal would be similar to the one their fathers kept with Mubarak—accommodation for the sake of autonomy, suggesting what may be a cross-generational fear of having to compete with secularists in a free marketplace of ideas.
“This is a crucial and worrisome time for the movement,” Salah said.
Ambition, guile and low cunning are intrinsic to all political insurgencies. If the peaceful revolt that saw off one dictatorship in Egypt is to be subverted by a new one, the Muslim Brotherhood, with a new generation at the helm, will adapt and survive. If, however, the Egyptian people prevail and the generals are turfed out to the barracks, that same cadre of young Ikhwan leaders will joust for power as one political constituency among many. Either way, Egypt’s most powerful Islamist group has vacated its display case.
Late last summer, Mikey Weinstein broke up a fight between Crystal and Ginger, the guard dogs trained to protect him and his family from a violent reckoning with Christian zealots. For the 55-year-old civil rights activist committed to ridding the US military of religious intolerance, it was a refreshingly secular and evenly matched bout. Weinstein is, after all, famously combative, both pugnacious and profane, with the bearing and sensibility of a mastiff. In the end he prevailed and peace was restored, though at the price of some bad scratches on his arms and a hole in his right hand where a well-aimed canine had struck home.
Only wags and heretics would suggest that such a stigmata-like wound places Weinstein in the company of another Jewish prophet who spoke truth to the legions of an imperial power. At the very least, however, his journey from corporate lawyer to patriarch of a tribe of persecuted minorities is worthy of an Old Testament morality play. For the past half-decade, the Air Force Academy alum has labored to reverse the currents of Pentecostalism that course through the US military in general and the Air Force in particular.
It is an asymmetrical struggle, an endless round of Whac-a-Mole with a network of fundamentalist groups that would otherwise level the wall separating church and state with the help of supine, if not complicit, Pentagon top brass. In the battle over the meaning and implications of the First Amendment, Weinstein has staked himself at the fault line between the free-exercise clause and the establishment clause, which simultaneously preclude Congress from legislating a state religion and guarantee freedom of worship.
“The free-exercise clause does not trump the establishment clause,” Weinstein says from the living room of his home, a tastefully designed adobe ranch house in Albuquerque. “Our Bill of Rights was specifically created not for the convenience of the majority but to protect the minority from the tyranny of the majority. From that perspective it is absolutely imperative.”
Since he established his watchdog group, Military Religious Freedom Foundation (MRFF), in 2005, Weinstein has built a client base of more than 20,000 mostly Catholic and Protestant—as well as Jewish, Muslim, Wiccan, atheist, and gay and lesbian—members of the military. For them, Weinstein and MRFF are the only recourse for servicemen and -women who have been either punished for their faith or subjected to fundamentalist proselytizing in violation of military guidelines.
Consider, for example, the ferocity with which Weinstein and his undermanned crew of mostly volunteer staff reacted to the Air Force Academy’s recent invitation to Marine Lt. Clebe McClary, a controversial evangelical Christian, to speak at a prayer luncheon. In a January 22 letter to the academy, MRFF argued that McClary’s “intense, unreasoned and psychotic demonstration of unilateral and distorted Christian doctrine” would define the luncheon as “a revival meeting with the purpose of proselytizing and achieving Christian supremacy.” Weinstein then worked the media, landing notices about MRFF’s complaints in the Washington Post, The Raw Story and DailyKos. He urged groups such as the ACLU and Veterans for Common Sense to pile on and, on January 31, after the academy refused to budge, he filed a formal complaint in federal court demanding that the academy cancel its luncheon “on the grounds that it is a blatant violation of the plaintiffs’ Constitutional rights as guaranteed by the First Amendment.” (As The Nation went to press, a federal district court was set to hear MRFF’s request.)
A similar MRFF onslaught in October compelled its superintendent to release the classified results of a survey that revealed only partial success in its efforts to enhance religious tolerance. It was an important, albeit tactical, concession in what the Pentagon clearly regards as a war of attrition. One of Weinstein’s most recent cases concerns a Christian group at the Colorado Springs–based Air Force Academy that allegedly promotes fealty to God over temporal authority, disempowers women and encourages its members to intermarry. The academy leadership, Weinstein insists, has all but ignored the group and has stonewalled his demands for an investigation.
“They let Mikey throw blows, and they hope one day he’ll get tired and go away, but someone’s gotta be out there,” says Joe Wilson, the former US ambassador and an MRFF board director who famously confronted the national security establishment himself during the Iraq War. “There’s a need to take it to them, knock them back on their heels. Otherwise you lose.”
Asked for comment, a Pentagon spokesman said the Defense Department “places a high value on the rights of military members to observe the tenets of their respective religions and does not endorse any one religion or religious organization.” Under its equal opportunity policy, the spokesman said, of 1.4 million active-duty members of the US military, only fifteen filed formal complaints related to religious harassment and proselytizing in 2009.
The Christianizing of the armed forces, Weinstein believes, has implications for national security as well as for civil rights. In addition to ingrained anti-Semitism, his work reveals a simmering Islamophobia in the ranks that, when flushed to the surface by media exposure, has been leveraged by jihadi groups overseas for propaganda purposes.
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Leading the Pentecostalist charge is a constellation of different groups, none more prominent than Military Ministry, an affiliate of Campus Crusade for Christ, a global outreach network with an estimated annual budget of nearly $500 billion, raised largely from individual donors and congregations, according to the Evangelical Council for Financial Accountability. Military Ministry maintains branch offices at the nation’s main Army bases, as well as overseas initiatives like Bible-study programs globally. The group’s mission statement, according to its website, is “To Win, Build, and Send in the power of the Holy Spirit and to establish movements of spiritual multiplication in the worldwide military community.” In a 2005 newsletter, Military Ministry’s executive director, retired Army Maj. Gen. Bob Dees, said the group “must pursue our…means for transforming the nation—through the military. And the military may be the most influential way to affect that spiritual superstructure.”
Military Ministry is particularly well represented at basic training installations like Fort Jackson in South Carolina, the Army’s largest boot camp. According to MRFF researcher Chris Rodda, the group instructs recruits through Bible-study programs that “when you join the military, you’ve joined the ministry,” and it ardently associates conquest on the battlefield with religious conversion. In a 2007 report, MRFF provides links to photos of Fort Jackson troops posing with rifles in one hand and Bibles—some with camouflage covers—in the other. A Bible-study outline distributed by Military Ministry cites Scripture to sanction killing in combat by “God’s servant, an angel of wrath,” to “punish those who do evil.”
Other groups affiliated with Military Ministry include Valor, which targets future officers on ROTC campuses and labors to “help them become disciple makers around the world at their future duty assignments.” There is also Military Gateways, which concentrates on training agencies like the Defense Language Institute, and through its own array of subdivisions like Sailors for Christ, institutions like the Great Lakes Recruit Training Command and Naval Service Training Command.
Another prominent group, The Navigators, commands “thousands of courageous men and women passionately following Christ, representing Him in advancing the Gospel through relationships where they live, work, train for war, and deploy.” It has a permanent staff presence at military academies and its directors, like their counterparts at Military Ministry, frequently refer publicly to US servicemen and -women as “Government-Paid Missionaries for Christ.” (Pastor Ted Haggard, whose New Life Church was located a few miles from the Air Force Academy, was a familiar figure on campus until 2006, when it was revealed that he had had relations with a male escort and used illegal drugs.) The Navigators was founded in 1933 by Dawson Trotman, a mentor of Doug Coe, himself a prominent if low-key spiritual counselor to political elites in Washington. Coe is closely associated with C Street, an evangelical enclave for politicians and power brokers.
The revivalist subculture within the armed forces is as overt as Washington is loath to confront it. In late September Weinstein sent a letter to Defense Secretary Robert Gates on behalf of more than 100 Air Force Academy cadets who said they were obliged to falsely assume fundamentalist identities—leaving Bibles and Christian literature and music CDs on their bunks, for example—lest they be singled out for harassment by their commanding officers. Weinstein’s letter, like his previous appeals to the defense secretary, was ignored. Congress is equally reluctant to take on the issue, and even Democratic lawmakers have distanced themselves from MRFF. Board director Wilson said he tried to persuade senior aides to Carl Levin, chair of the Senate Armed Services Committee, to open hearings on some of the outrages Weinstein has unearthed, but to no avail. “What Mikey needs is a political ally, someone to champion his fight on the Hill,” said Wilson from his office in Santa Fe. “But the Christian right is very powerful, and no one wants to wage that war." (A source from the Senate Armed Services Committee says there is no recollection among committee members of such a discussion with Wilson, adding that the committee serves in an oversight role when it comes to reports of discrimination and proselytizing in the military. “The way we work is, we ensure the Department of Defense is investigating these allegations as they come up,” the source says.)
Weinstein was born and raised in Albuquerque, the son of a Naval Academy graduate who ultimately became a lieutenant colonel in the Air Force. After graduating from the Air Force Academy in 1977, he became a judge advocate general and, after leaving the military in 1989, worked as a Washington-based corporate lawyer and counselor to the Reagan White House. Throughout the 1980s and ’90s, he and his wife, Bonnie, lived a comfortably affluent life in the northern Virginia suburbs, attending their two sons’ sporting events in the afternoons and mingling with other A-listers on the Washington social circuit at night.
That changed abruptly in summer 2004, when Weinstein visited his son Curtis on the eve of his second year at the academy. Over lunch, a clearly agitated Curtis described several occasions when cadets and officers had subjected him to anti-Jewish verbal abuse. His account chilled Weinstein, who as a cadet had twice been beaten unconscious in anti-Semitic attacks. Weinstein filed a complaint; the Air Force responded by launching an investigation that exposed a predatory, top-down evangelicalism at the academy.
Since then, the Weinsteins have burned through their savings and retirement funds and leveraged credit card debt to sustain MRFF as a lonely sanctuary for besieged secularists. (MRFF often provides spending money for clients who are no longer in the military and are struggling to get by.) Each day, the group is peppered with appeals for help. During an interview with The Nation, Weinstein paused to take a dozen calls and text messages from clients in places from Fort Hood in Texas to Afghanistan’s Helmand province, where automatic rifle fire could be heard in the background.
The MRFF e-mail log is packed with detailed accounts of senior officers subverting with impunity regulations against evangelizing. In one, an Army staff sergeant tells how he and his comrades were forced to endure a Baptist minister’s graphic sermon about a girl who was roasted alive in a car crash along with her soul because she had not been baptized, then encouraged to embrace Christ with the help of religious counselors waiting just outside the door. In another case, during an official briefing an officer at a missile air base was treated to a Christian prayer for divine “guidance and direction” when deciding when to launch the weapons under his responsibility.
A First Amendment vigilante, Weinstein is also on intimate terms with its abusers. His hate mail—mostly anonymous and unprintable grace notes from the bosom of white Christian America—casts him as everything from a troublemaking Jew to the Antichrist. (Among Weinstein’s many critics is his daughter-in-law’s father, who in a June 24 letter in the Colorado Springs Gazette derided him as a Christian-hating publicity hound. In response, Amanda Lee Weinstein, who graduated from the Air Force Academy in 2004, wrote a lengthy defense of her father-in-law in Veterans Today, as “the one that I call Dad.”)
Death threats against Weinstein and his family are routine. Vandals have shot through the windows of the Weinstein family home and painted swastikas and crucifixes on its walls, smeared his door with feces and destroyed his mezuza, the parchment roll of Hebrew verse traditionally hung on the door frame of Jewish homes. He retains a detail of security and explosives experts, and he has positioned firearms—from a twelve-gauge shotgun to semiautomatic handguns—throughout the house. (Amber, Weinstein’s 23-year-old daughter, sleeps with a .357 revolver by her bed.) The guard dogs have been trained to fend off intruders for at least eight seconds, which security consultants estimate is the minimum amount of time the Weinsteins would need to get to their guns.
Firearms, however, are not Weinstein’s offensive weapon of choice. Armed with a hundred years of case law, he is most formidable in court. In 2004 MRFF was alerted by service members that chaplains embedded in combat units were handing out vernacular-language Bibles in Iraq and Afghanistan in violation of a Pentagon General Order that prohibits proselytizing of any kind. After MRFF took up the case, the Pentagon responded by confiscating and destroying isolated caches of Bibles, although according to MRFF such evangelizing continues in both countries.
In January 2010 Weinstein exposed a private contractor who was supplying rifle scopes to the Defense Department imprinted with coded references to Christ-related biblical verses. After ABC News did a report on the “Jesus rifles,” as Weinstein called them, the Defense Department ordered that the scopes be sanitized of any subliminal content.
In April, in response to MRFF demands, the Pentagon withdrew an invitation to the Rev. Franklin Graham, known for his Islamophobic remarks, to speak at a National Day of Prayer Task Force service. In August Weinstein revealed that troops from Virginia’s Fort Eustis were confined to their barracks and assigned cleanup duty after they refused to obey their commanders’ orders to attend the performance of a Christian rock group. That same month MRFF publicized the mass baptism of twenty-nine marines at California’s Camp Pendleton before their deployment to Afghanistan. News accounts of the ceremony, part of a battalion commander–inspired operation called “Sword of the Spirit,” were republished by Ansar Al-Mujahideen, a leading jihadi website.
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The number of Muslim service members seeking Weinstein’s help has grown geometrically since the 9/11 terrorist attacks, and the cruel odyssey of Zachari Klawonn is a particularly ripe narrative for the jihadi mill. The Fort Hood–based Army specialist, a model soldier with no reprimands on his record and some of the highest physical-fitness ratings in his unit, has alleged that he was subjected to regular abuse because of his Muslim faith. According to the half-Moroccan Klawonn, who enlisted two years ago at 18, his dream of being an Army careerist was challenged by a culture of Islamophobia from the day he put on his uniform. “With 9/11, Islamophobia in the military was born,” Klawonn said in an interview. “You can see it in the libraries, the Christian concerts. They look at me like I’m an outlaw.”
While marching in basic training, says Klawonn, troops would mockingly chant “hajji,” a term of respect in the Muslim world for those who make the annual hajj, or pilgrimage to Mecca. During a prisoner interrogation training exercise Klawonn was instructed by his drill sergeant to play the role of a suspected terrorist—not just for his own unit but for others throughout the day, depriving him of his own training interval. His requests to fast and pray were angrily denied, and his Koran was anonymously seized from his locker and torn to pieces.
The harassment continued at Fort Hood, where he was assigned in November 2008, and intensified a year later after Maj. Nidal Hasan went on a shooting spree at a base medical clinic, killing thirteen people and wounding thirty. After a threatening note appeared on his barracks door, Klawonn was advised by Fort Hood authorities to find quarters outside the base because his safety could not be guaranteed, but he was denied the standard stipend for off-post housing.
On April 27 Klawonn turned to Weinstein, who immediately retained a Dallas-based attorney to represent his newclient. Within days, Klawonn was ordered to appear before the second-highest commander at Fort Hood, who demanded to know why he was generating such negative publicity. “Clearly they were feeling the heat,” he says.
With MRFF gathering evidence and interviewing prospective witnesses in anticipation of a lawsuit, things have improved for Klawonn. He has started receiving his housing allowance, and a Muslim prayer room and imam have been made available on base. As the details of his treatment have slowly emerged in the media, the hostility toward him has subsided. Many of the 3,540 active-duty Muslims serving in the military—the actual figure is probably higher, as a considerable number of them are thought to be “closeted”—have expressed their support for Klawonn’s cause. His ambition to make officer grade has survived his ordeal, and he is even considering a career in politics. “We’re going to fix what’s going on at Fort Hood,” he says. “The only thing to do is to be productive and progressive and tackle the problem head on. You lead by example.”
Asked if harassment and discrimination against Muslim soldiers like the kind Klawonn received could have contributed to Hasan’s murderous rampage, Klawonn acknowledges the possibility that it was provoked. Nothing justifies murder, he says, but “the reality is that there was Islamophobia at Fort Hood. Could it have pushed an individual to a breaking point? Absolutely.”
Should Klawonn’s case come to trial, a key witness on his behalf will likely be another victim of religious discrimination at Fort Hood. Zachary Arenz, an Army specialist who turned to MRFF in June, was subjected to sustained abuse not because he is a Muslim but because he is a Jew.
From 2007, when he first reported for duty at Fort Hood, to his departure from the service in June, Arenz was singled out by both flag and noncommissioned officers for his faith. His request for kosher meals in the field was denied, and he was ordered by his platoon sergeant to find a fatigue-colored yarmulke so as “to restrict its visibility.” In his cot after a day of field-training exercises, Arenz was reading Hebrew Scripture; his platoon sergeant loudly demanded to know why the Jews killed Jesus. On another occasion, Arenz returned to his barracks to find a swastika scrawled on the parchment from his mezuzah. At one point, his battalion commander told him that “all Jews make bad soldiers” and that Judaism was “incompatible with military service.” He was even ordered to give his mother’s telephone number to Fort Hood authorities so they could confirm that he was, in fact, Jewish. Eventually Arenz was found guilty in a court-martial of what he says were trumped-up charges of having a cellphone in the field and not being at an appointed place of duty.
During his struggle with the Army bureaucracy, Arenz, a native of Huntsville, Alabama, petitioned his senators and Congressman for assistance, with no success. “I just want my day in court,” he says. “I want to face my tormentors and I want them relieved.”
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In addition to his running skirmishes with religious discrimination, Weinstein can now add alleged predation to his casebook. In October he agreed to represent Jean Baas, who charged that directors of a nonprofit organization called Cadets for Christ prey on Air Force Academy cadets and manipulate them into marrying one another, a common cult practice known as “shepherding.” Baas based her accusations on her experience with her daughter, Lauren, who, she claims, was brainwashed into participating in CFC’s rituals, culminating in her September engagement to a fellow group member.
“They still dictate every move she makes,” Baas said by telephone from her Gulfport, Mississippi, home, where Lauren grew up. “It’s sickening to watch while the Air Force does nothing.”
According to her mother, Lauren was a strong-willed and devout Catholic who attended Mass regularly at Colorado Springs during her first year at the Air Force Academy. In August 2008 she was recruited by a friend and CFC member to participate in the group’s functions, which included weekend spiritual retreats, Wednesday night Bible study on the academy grounds and dinners at the home of group directors Donald and Anna Warrick. Soon, according to Baas, Lauren was disparaging her family members as irredeemable papists. During visits home for holidays and semester breaks, she was sullen and aloof, retreating deep into the fold of Scripture. By March 2009 she had forsaken her dream of becoming an Air Force pilot for the divinely inspired role of wife and mother. That Labor Day weekend, Lauren e-mailed her parents of her intention to marry a fellow CFC member, whom she knew only through Bible study meetings. (Lauren had already formally announced her engagement during a CFC gathering at the Warricks’ home.) In late June Lauren and her fiancé spent several days with her parents in Gulfport, poring over packages of materials provided by the Warricks that enumerated the spousal responsibilities of the “shepherd” and his “sheep.”
Reached by e-mail, Donald Warrick described Cadets for Christ as “a Bible-study group for interested cadets,” many of whom have received early promotions to flag rank. About a third of its members worship with the Warricks, he wrote, while the rest attend services elsewhere, and “all of them are free to come and go from our study as they choose.” The CFC board is aware of the allegations made by Jean Bass and Weinstein’s representation of her, according to Warrick, “and while their reality about what takes place and is taught in Cadets for Christ is far different from our own they are of course free to say what they want, and we wish them well.”
The Baases and their daughter, now stationed at Vandenberg Air Force Base, are completely estranged. “I’m not surprised this kind of evangelicalism exists,” says Baas. “But I am surprised at where it takes place. This is no accident. Someone is allowing these people to operate there.”
A current MRFF client corroborates Baas’s account of Cadets for Christ and indications of at least passive academy support for the group. In an e-mail made available to The Nation on the understanding that its author will remain anonymous, the client says her daughter was recruited by the Warricks, whom she describes as “dangerous and destructive individuals.” Just as disturbing, she writes, “is how these folks are at the academy, recruiting some of the brightest and the best, to carry out their mission…right under the unsuspecting or maybe the knowing, leaders of the academy. Then when it is pointed out to them, it is denied. Is that denial out of ignorance or is it to protect? This is why I say that this issue may be much bigger and broader than what appears.”
Asked for comment, Air Force Academy spokesmanLt. Col. John Bryan said the allegations relating to Cadets for Christ are not substantiated. Bryan also stated that “the academy remains committed to protecting an individual’s right to practice any religion they choose, or no religion, provided their practices do not violate policy or law or impede mission accomplishment.”
When Baas petitioned the academy for help, she was told by a chaplain to write a letter to the superintendent but to betray “no feelings, so as not to sound like a crying mother.” In the fall, she came across MRFF during an Internet search and, frustrated with what she regarded as academy inertia, contacted Weinstein. With signature alacrity, he fired off e-mails to senior Air Force officers in Washington—including a former Air Force chief of staff—and the media, landing an exposé in Truthout, the online general news site. He publicly expressed outrage that academy officials would allow a private religious group to proselytize at a government institution, a charge he said was corroborated by statements from dozens of cadets. “We are now in a state of war with the academy,” he told the weekly Colorado Springs Independent in September.
He was back in the ring, canines bared.
In The Pearl, the 1947 novella by the American novelist John Steinbeck, an impoverished Mexican diver named Kino scoops up an enormous pearl from the bed of a gulf tributary. The raw gem’s unlocked wealth promises to deliver Kino and his family from penury but it also provokes the villagers to scheme for its possession. Like a cancer in its host, Steinbeck writes, the pearl “stirred up something infinitely black and evil….The poison sacs of the town began to manufacture venom, and the town swelled and puffed with the pressure of it." The story ends with Kino, fearing the pearl will destroy him and his family, returning it to the Gulf’s shimmering folds.
Sadly, the same cannot be done with our hydrocarbon economy. As Peter Maass concedes in his latest book, a first-person account of oil-induced ecocide, geology cannot be reversed. Crude World: The Violent Twilight of Oil, is a forensic tour through the devastation wrought by an energy source that is in some ways as deadly as it is empowering. Like Kino’s blighted pearl, oil subverts the primitive societies where it is so often discovered – the author frequently cites Norway for its exceptional rule-of-law buffer against the oil curse – leaving armed conflict, kleptocracy, and environmental havoc in its wake. In a concise 225 pages, Maass illustrates how oil-rich dictators, usually with the indulgence of Western governments, sack pastoral idylls and plunder delicate ecosystems. Oil, he writes, “not only offers itself as a treasure to be stolen; it can become a political amulet that protects the thieves from abandonment or punishment.”
Though there are no shortage of books about the petroleum industry – the publication of Daniel Yergin’s The Prize in 1991 sired an entire genre – Maass weaves a tale that is distinguished by its scope, wit and verve. Like a gas flare from an oil rig, he illuminates a hydrocarbon landscape that stretches from the killing fields of Equatorial Guinea and Iraq to the environmental disaster zones of the Niger Delta and the Oriente region of Ecuador. The cycle of exploitation in the non-Norway oil world is, by his account, depressingly familiar: a petroleum field is discovered under a far-flung nation; the world’s energy lords converge around the local strongman who has filled a post-colonial void; free of the industrial laws and ethics laws that prevail in their own countries, the oil companies cut a deal with the regime. Drilling rights are exchanged for slush funds, reserves are siphoned away, virgin lands and waters are violated and the people, particularly those caught in the middle, are crushed.
That, in a nutshell, is what has happened to oil-endowed Equatorial Guinea, the tiny West African nation run by Teodoro Obiang, a dictator who has allegedly cannibalized opponents, obliged a U.S. ambassador to flee the country by threatening his life, and managed to parlay a $60,000 salary into a fortune worth $700 million. Obiang, Maass writes, bartered away to oil giants ExxonMobil, Marathon Oil Corp. and Hess Corp. a majority of the profits from his country’s energy reserves in exchange for regular cash deposits with Riggs Bank in Washington, D.C. After the size of the payments was revealed in a U.S. Senate report, lawmakers launched a hearing and summoned top officials from Riggs and the oil companies to testify. One of them, Andrew Swiger of Exxon, told legislators that the kickbacks to Obiang were all part of their commercial obligations to “make Equatorial Guinea a better place.”
Amazingly, the theft of Equatorial Guinea’s natural resources continues. (Just last week, The New York Times ran a front-page story on the numerous homes, automobiles, speedboats and private jet maintained and enjoyed in America by Obiang’s son.) “The more that was taken from its people,” Maass writes, “the better [was Obiang’s] relations with Washington. It did not matter that [he] had threatened to kill the American ambassador….One of oil’s darkly magical properties is that it erases inconvenient memories.”
In this relentless account of villainy and scandalous neglect – the chapters are given one-word titles, such as “Plunder,” “Rot,” and “Contamination,” in fitting tribute to the Catholic Church’s Cardinal Sins – Maass apportions blame judiciously. He is tough on industry leaders like Exxon and British Petroleum, which rival Wall Street’s Goldman Sachs and AIG as icons of corporate avarice, but he is equally hard on the state-owned oil companies that surged to power when populist leaders nationalized their energy sectors. Petroecuador of Ecuador, for example, is singled out for doing as much to despoil the environment as its foreign predecessors. While the author salutes Saudi Aramco, the world-class steward of Riyadh’s oil wealth, he details how the Saudi royal family’s impious excesses during the 1970s oil boom invigorated radical Islam. Maass does a superb job explaining how seemingly decent oil executives can persuade themselves and others around them that conniving with dictators and razing whole stretches of the planet is somehow good for the commonweal. He profiles oilman James Giffen, the ex-bagman to Kazak dictator Nursultan Nazarbayev, who proudly tells the author that he was the inspiration for a particularly unscrupulous character in the movie Syriana.
Charming rogues, man-eating heads of state, Nigerian tribal kings waging low-intensity wars against oil-mad, aggrandizing regimes. Maass lays it all out with the crisp pace of a graphic novel. He remarks how, from one steamy boom town after another, he meets characters worthy of a Graham Greene novel. But Crude World reads more like Heart of Darkness, Joseph Conrad’s morality play about the latent savagery in all humans. As his journey takes him deep into some of the world’s most unsavory places – the defiled Oriente, the Niger Delta’s toxic Oru Sangama, Washington’s lobbyist-infested K Street – he places us on intimate terms with the evil that men do purveying the hydrocarbon economy. It an association made all the more unnerving by our patronage of it.
Say you are the head of a large central bank. With a Keynesian flourish, you rescue the global economy from a second Great Depression, however belatedly you saw it coming, by pushing interest rates down to zero and keeping them there. You work closely with your colleagues overseas to sustain a fragile recovery on two continents. You purchase more than US$1 trillion (Dh3.67tn) in unwanted financial assets to keep the economy from tanking again. You ensure enough liquidity in the overnight credit markets for companies to make their payrolls and other commitments and, oh yes, you are named Time magazine's Man of the Year.
Yet still there are people out there who want to run Ben Bernanke out of his corner office.From the political right, the Federal Reserve chairman is being attacked for buying short-term economic stability with a sea of debt at the expense of long-term inflation and a possible crippling of the dollar. From the left, he is harangued for coddling Wall Street while not doing enough to promote job growth.
There is no end in sight for the former Princeton University economist. With his reappointment all but certain to be approved by Congress and with the fortunes of Wall Street and Main Street shamefully divergent, America's soft-spoken central banker can now look forward to another four years of being used as a populist pinata.This column, too, has been tough on Mr Bernanke. After all, it was not until August 2007, despite cascading housing sales, rising foreclosure rates and the growing radioactivity of the bundled-asset market, that he recognised the global credit crunch for what it was.
Together with the US Treasury secretary Timothy Geithner he perplexed and outraged Wall Street by bailing out the egregiously mismanaged American International Group and the investment bank Bear Stearns while allowing the relatively stable Lehman Brothers to fail. Global credit markets swooned as a result.Having arrested the economy's tailspin through a blur of expansionist monetary policy, Mr Bernanke then lined up behind a White House proposal to broaden the new powers he had acquired in his emergency role as lender of last resort.
In particular, the plan would have allowed the Fed to pre-emptively act against what it defined as unacceptable risk by, among other things, forcing highly geared banks to increase their capital reserves or unwind debt altogether. Such authority, it was argued, would force lenders into managing their balance sheets more conservatively and prompt some of the larger banks to shrink themselves. Wall Street bucked back. Why, bankers and investors argued, should Washington meddle with a sound and simple Fed charter, to conduct monetary policy, supervise and regulate the nation's banks and settle international payments, that had been ably carried out since it was established in 1913? What matters one or two major economic meltdowns every century or so?
Then, just when Wall Street was getting used to the idea of a super-regulator, Congress managed to pull off the impossible by making the Fed look like the lesser of two evils. Last week, the House of Representatives passed a bill that would submit Fed functions, including its decisions on interest rates, emergency lending, dealings with other central banks and major market interventions, to routine public audits.
Mr Bernanke and his allies say this would compromise the bank's independence and politicise its policy decisions. A Senate version would strip the Fed of its supervisory and regulatory roles which, bank experts opine, would greatly erode its ability to successfully manage an economic crisis.Such is the way of Washington. Following the September 11 attacks, rather than simply shake up the national security agencies that defeated Nazi Germany and Imperial Japan in a mere four years, it created a massive new bureaucracy called the Department of Homeland Security, which to this day no one really understands or seems to care about.
Similarly, in response to the inevitable bursting of an extended asset bubble, legislators are seeking to emasculate one of the world's most respected and independent central banks and appropriate its authority. The campaign is led in part by a Texas politician named Ron Paul, a failed presidential candidate who wants to re-establish the gold standard, do away with paper money and abolish the US national pension fund. The title of his bestselling book says it all: End the Fed.
The Second World War metaphor is illustrative in another way. As with the war, which enveloped Washington when it was half asleep and deep in denial, the global credit collapse caught the world's most powerful banker scandalously unaware. But like his wartime predecessors, Mr Bernanke pivoted on a dime and pulled off an admirable bit of triage. As Time put it, Mr Bernanke ensured that this year was "a period of weak recovery rather than catastrophic depression".
That is as good a reason as any for being named Man of the Year and it certainly makes for a strong case against Congress manhandling the Fed. Why fix something that, if slow to function, does not appear to be broken?
Has Wall Street changed? Will legislators in Washington impose modesty and restraint on an industry notorious for possessing neither? Can they banish greed from a system that just more than a year ago brought the global financial system to the brink of collapse?Certainly the nation's top investment banks, at least those that remain, have shifted down to suit the risk-aversion trend. No longer are traders loading up on synthetic derivatives and cluttering their balance sheets with unknowable levels of debt.
With the help of record-low interest rates, investment-grade corporations are deleveraging by raising cash to pay off bank loans.Just in time for the holidays, corporate heads are engaging in their own secular acts of contrition. Over the past three weeks, Goldman Sachs and General Electric have expressed regret for feeding a speculative pyre that became an inferno.There is a sense among the more thoughtful of Wall Street princelings that it is better to work with Congress than to oppose it openly. On any given day, the Acela Express, the elite rail service that links Washington and New York, is filled with corporate executives eager to make their case against the kind of reform some liberal legislators are demanding.
But beyond that there is an implied culture of invulnerability on Wall Street, a knowing sense that populist politicians, like military generals busily planning for the last war, are looking backward while financiers incubate The Next Big Thing that will reshape the world.Washington is reactive, say corporate execs. It responds to a financial crisis with a new set of purpose-built regulations, despite the fact that asset bubbles are as distinct from one another as snowflakes.
In contrast, the Street - which has, by the way, migrated from its original home in Manhattan's gritty downtown section to glamorous midtown, alongside the top-flight boutiques and cafes of Rockefeller Centre - is innovative, bold and visionary.Like the scientists who split the atom, traders are not about to give up on their more exotic confections just because they are capable of great destruction. After all, junk bonds were once rogue products and became respectable in time.
Besides, say the finance lords, market meltdowns are incidental to the Street's capacity for community enrichment. A generation ago, the interest rate on a US$100 million (Dh367.2m) bond issue to build, say, a municipal water and sewage system was a whopping 3.5 per cent.Today, thanks to financial innovations such as interest rates swaps, which allow issuers to lock in spreads at a fixed rate, the interest on such a transaction would be a mere $500,000 or so. And now Congress, in its primitivism, would introduce "reforms" that would deprive local government of such efficiency.
Or take year-end bonuses, which last year averaged $13.8m among the top 100 executives in the US. Excessive? Not so much, the Street reminds us, when you consider that the chief executive of a top investment bank routinely works 18 hours a day, every day, to keep his institution afloat in an age where huge trades, conducted in micro-seconds, can turn entire markets upside down.The average longevity of a Morgan Stanley partner, it turns out, is only four years and 10 months. With an attrition rate like that, why should a managing director strategise for the long term when his knees are likely to give out in just a few years? Why not grasp for the big carrot on a short stick and squeeze what you can out of every trade and underwriting deal?
And the controversy over ratings agencies? Certainly - begins a rare Street mea culpa, followed by a world-weary appeal to reason - there are conflicts of interest when firms like Moody's Investors Service and Standard & Poor's are remunerated by the very companies they are appraising. But by all accounts, the process is transparent. Prospective investors have only to search the internet to learn the agencies' methodology. Besides, what is the alternative? Congressional oversight, as has been suggested in Washington? Intervention by the very deliberative body that is incapable of funding itself without generous assistance from the People's Republic of China?
Are politicians prepared to assign investment grades to companies and then take responsibility when those decisions prove to be ill-advised, even disastrous?What distinguishes Wall Street from Washington is not virtue, an attribute sorely lacking in both power centres, but candour. In the 1980s, investment bankers referred to themselves as the Masters of the Universe. In fact, they are more like the mythological gods of ancient Greece, all-powerful and yet blemished by the human characteristics of avarice and arrogance.
Like Zeus and Aphrodite, the Goldmans and GEs seduce mortals, and they occasionally pay a price for their conceit. Just as the Greeks saw in the gods they created their own qualities, both inspirational and loathsome, the deities of Wall Street represent an ideal we embrace in prosperity only to demonise in penury.However fashionable it is to bash the lords of finance, they know that when the cycle finally turns, they will once again be celebrated as heroes.
They also understand that this is one claim their counterparts in Washington, gridlocked as they are by petty parochialism and stratospheric indebtedness, can never make.
Imagine you want to buy a car. You consult the available industry reviews and consumer reports and you base your choice on which make and model garners the highest ratings. Within months of buying your vehicle the wheels fall off. Only then do you learn the manufacturer that produced your clunker paid a stiff fee for those favourable reviews that played such a crucial role in your decision.Outraged? It gets worse. The same thing may have happened to your retirement plan.
A sordid little morality play is being acted out on Wall Street and in Washington, and the fact that it is getting so little attention suggests just how diabolical America's financial system has become.Among the many institutions repudiated by the financial crisis are Moody's Investor Services, Standard & Poor's, and Fitch, the Big Three credit ratings agencies that appraise the quality of securities coming to market.
It is this cartel that assigned their highest "Triple A" ratings to the kind of bundled assets that helped bring about the crash. They were valued in the hundreds of billions of dollars and most have been downgraded and are now worthless.What of it, one might counter. Anyone can make a US$100 billion (Dh367.33bn) mistake now and then, confuse investors and devastate global securities markets.Should we criminalise incompetence, just as Wall Street and Washington have privatised profit and socialised cost? Not if the neglect was unwitting. But like so many other sorry tales from the crypt of Wall Street credibility, it turns out the negligence was malign.
Unknown to many of the lay investors who relied on the ratings cartel for impartial guidance as they piled their savings into increasingly exotic instruments, the agencies were getting paid by the very issuers of the securities they were branding.In congressional testimony last month, former Moody's representatives acknowledged gross misconduct in an industry they said was lousy with conflicts of interest.
Scott McCleskey, the former head of compliance at Moody's, told legislators he alerted his superiors to widespread negligence and received a gag order for his trouble.He was also excluded from meetings between Moody's legal department and senior officials of the Securities and Exchange Commission (SEC).Eric Kolchinsky, an analyst and another former Moody's official, testified that he believed his colleagues issued credit ratings they new were inaccurate in blatant violation of securities laws. Not surprisingly, Moody's executives denied the charges.
This is not the first time legislators have called for action to be taken against the ratings cartel.Similar demands were heard seven years ago after the collapse of the energy giant Enron and the subsequent downgrading of energy traders. Then as now, politicians condemned the rating agencies "issuer pays" business model.Nothing was done, and if initial signs from this most recent display of congressional outrage is anything to go by, the Big Three may continue to rest easy.
Little in the way of concrete proposals has followed last month's hearings save for a few modest regulatory changes and recommendations of a larger regulatory role for the SEC, which was to the financial crisis what the Federal Emergency Management Agency was to Hurricane Katrina.Credit rating agencies are hugely important to the financial world. Their alphabet soup of appellations modulate a company's ability to raise or borrow money and the pricing of securities for purchase by banks, mutual funds and government pensions.
In some cases, bank regulators allowed lenders to hold lower levels of capital against "Triple A" assets. And yet, during the financial boom, the financial system was allowed to turn itself into a "Triple A machine", according to the Financial Times.The Big Three agencies - they dominate the ratings industry, which is also populated by a school of smaller, private firms - say their renderings are vital to the creation of a "level playing field" for investors both small and large. In fact, their history suggests they have done more to spoil pitches than straighten them.
As the economist Adam Posen and author David Smick have pointed out, the cartel issued fatuously high ratings ahead of the Latin debt crisis in the 1980s, the US savings and loan crisis of the 1980s and 1990s, the Mexican crisis of 1994-1995, the Asian financial crisis of 1997-1998, and the dot-com bubble of 1998-2001.The fact that the Big Three members have survived such a lamentable record suggests they, like so many of their clients, are too big to fail. This is good reason to dissolve them altogether.
The most serious economic decline since the Great Depression was caused in no small part by Wall Street's romance with high-yield, illiquid instruments that were unfathomable to many of the investors, professional as well as amateur, who invested in them.If the financial crisis has proved anything, it is that the credit-rating agency that can compete with the discipline of "buyer beware" restraint does not exist.
As Sanjeev Handa, the head of the public fixed-income giant TIAA-CREF, told the Financial Times last week: "Never buy anything you don't understand, whether it has a rating or not."
Exactly 21 years ago yesterday, the Dow Jones Industrial Average lost 22 per cent of its value in the biggest single-day stock market sell-off in US history. Black Monday, as it was quickly dubbed, ended a five-year bull run that was fuelled largely by leveraged buyouts, heavily margined public listings and exotic derivatives that defied the comprehension of most investors.Black Monday was a milestone in America's twilight as a global power, or so argued the British academic Paul Kennedy in his book The Rise and Fall of Great Powers, which was published just in time for the crash.
The US, Kennedy wrote, was falling prey to "imperial overstretch" and would soon be replaced by Japan as the world's pre-eminent democratic leader. Economists praised Japan's emphasis on savings and export-led growth, particularly as the US asphyxiated itself on debt. Zaibatsu, the country's massive industrial conglomerates, and the trade barriers that insulated them, were considered the way of the future. Vertical integration and mercantilism were hot, outsourcing and open markets were passé.
Ten years later, emerging markets were in crisis, having built their economies around the by-then repudiated Japanese model. It took a series of emergency bailout packages administered by the International Monetary Fund (IMF) - conditioned, of course, on the recipients' embrace of neoliberalism as proselytised by the Clinton administration - to save the day. Free-market capitalism was back.Another decade, another wrenching role reversal. Having righted its books under Mr Clinton - owing in part to the collapse of the Soviet Union, which neither Kennedy nor the CIA anticipated - as well as some old-fashioned fiscal restraint, the US went on another borrowing bender. The reckoning that is now upon us has once again revealed "democratic" capitalism as a viral agent of financial ruin. President George W Bush's "ownership society", the notion that the cornerstone to civilisation is a home mortgage - preferably a fixed-rate one - is in tatters.
The question is: what will take its place? Until now, the failure of one economic model always made way for something else. It was the scandalous consumption of the Gilded Age, for example, that transformed Marxism from an abstract theory into a worldwide movement. Only the speculative excess that led to the Great Depression could have turned a wanton speculator like Joseph Kennedy, the father of former president John F Kennedy, into a New Deal regulator as head of the newly established Securities and Exchange Commission.
What is so conspicuous about the exhaustion of laissez-faire economics - this time, at least - is the lack of a viable alternative. A wholesale repeal of the Reagan-Thatcher revolution is unlikely. European leaders last week seemed genuinely reluctant to re-nationalise their economies after nearly three decades of privatisation and deregulation, however mixed the results. Japan remains a couch potato, having failed to make the transition from top-heavy, highly regulated industrialised economy to a more nimble service-based one.
The abrupt drop in oil prices has shown how vulnerable massively subsidised petro-economies like Russia and Venezuela are to fickle commodities markets. The IMF, which was so prolific during the currency crises of the past decade, has been largely absent amid the current one, in which its most powerful shareholders are complicit.That leaves China. Given its sustained growth and rising income levels against unprecedented demand for jobs, capital and energy, China should rank as one of the best-managed economies in the past quarter century. Its foreign exchange reserves have swollen to nearly US$2 trillion (Dh7.3 trillion) at a time when the rest of the world, the US first and foremost, is starved of liquidity. Despite complaints from its trading partners, Beijing has methodically and deliberately opened much of its domestic market to foreign goods and services while lifting foreign exchange controls to encourage investment outflow.
China is also authoritarian, corrupt, polluted and opportunistic, having partnered with odious regimes in exchange for access to petroleum and natural gas reserves. The Chinese Communist Party, like any political machine, is little more than a dispenser of patronage. It can persuade and coerce, but it cannot inspire. Having vaulted from destitution to prosperity in such a short period of time, the Chinese seem to have bypassed the euphoria that often accompanies economic modernity for a dreary, collective cynicism.
As an example of fiscal prudence and restraint, the Chinese growth model has merit, but it comes at too high a cost. Democratic capitalism may have been consigned to yet another stint in history's dustbin, but there is a reason why it keeps popping up for a fresh turn. The system that can more efficiently indulge our best and worst instincts - innovation, ambition, greed, recklessness - has yet to be invented. One way or another, the free market, with its duelling capacities to build and destroy, will reappear for another wild ride.
Research support for this article was provided by the Puffin Foundation Investigative Fund at The Nation Institute.
News travels fast across the red desert bush of remote Djibouti. Even as US military reservists erect a field hospital around a cluster of tents and blockhouses near a desolate watering hole, dozens of tribespeople are waiting for treatment in orderly rows. They arrive with maladies of every sort: bad teeth, diarrhea, fevers, colds, arthritis. At the triage center, an elderly tribesman has had a thorn removed from his foot, a wound that had been infected for months. At the dental surgery station, Navy Lt. Bill Anderson, an orthodontist from Northfield, New Jersey, will over the next few hours extract a dozen rotting or impacted teeth using instruments that sparkle in the late-morning sun.
The reservists are attached to a Djibouti-based task force of some 1,800 soldiers, marines, sailors and Air Force personnel. Embedded with them is an aid specialist from the Agency for International Development, which provides guidance for the operation. She is reticent and refers questions to the agency's country leader, Stephanie Funk. The next day, Funk acknowledges that USAID's solitary representation on the triage mission is symptomatic of a new age in US foreign policy--one in which America, in peacetime as much as in war, is personified abroad more by soldiers than by civilians. "If we had the numbers and the money to do fieldwork, we would, but our budgets have been declining for years," Funk said in her office on the US Embassy compound in Djibouti City. "The Pentagon has got both numbers and money. For every fifty of them, there's only one of me."
Quietly, gradually--and inevitably, given the weight of its colossal budget and imperial writ--the Pentagon has all but eclipsed the State Department at the center of US foreign policy-making. The process began with the dawn of America's post-World War II global empire and deepened in the mid-1980s, with the expansion of worldwide combatant commands. It matured during the Clinton years, with the military's migration into humanitarian aid and disaster relief work, and accelerated rapidly with George W. Bush's declaration of endless conflict in the "global war on terror" and a near-doubling of military spending.
In addition to new weapons and war fighters, the Pentagon's budget now underwrites a cluster of special funds from which it can train and equip foreign armies--often in the service of repressive regimes--as well as engage in aid development projects in pursuit of its own tactical ends. Although these programs must be conducted with State Department approval and are subject to Congressional review, legislative oversight and interagency coordination is spotty at best. The Pentagon, meanwhile, is pushing for full discretionary control over these funds--a move that would render meaningless the 1961 Foreign Assistance Act, which concentrated responsibility for civilian and military aid programs within the State Department.
Defense Secretary Robert Gates has lamented the resource gap between civilian and military agencies, most pointedly in a July 2008 speech, when he warned of the "creeping militarization" of foreign policy. He has wryly pointed out how, given the Defense Department's $664 billion budget compared with the State Department's $52 billion annual outlay, Washington employs more military band members than it does foreign service officers. No one at the Pentagon, however, is calling for the restoration of State Department primacy over foreign affairs and a proper budget to finance it. Rather, Defense officials speak of a civilian-military "partnership" in which, some fear, an underfunded State Department would be reduced to a mere subcontractor for Pentagon initiatives.
Secretary of State Hillary Clinton has suggested she will re-establish the State Department as the fountainhead of foreign policy. But she has said little about the Pentagon's expanded funding authority, and her embrace of what she calls "the three Ds" of her mission--defense, diplomacy and development--implies DoD's preoccupations are in concert with her own. Nor has she suggested she might allow greater autonomy for USAID, where officials grumble about how their work is as routinely politicized by the State Department as it is by the Pentagon. Indeed, Clinton has yet to name a new permanent director.
Though Clinton has presided over a marked increase in USAID's budget, diplomats and politicians say an overhaul is way overdue. "Without a more robust aid agency," Richard Lugar, the ranking minority member on the Senate Foreign Relations Committee, wrote in the August 9 Washington Post, "President Obama's pledge to double foreign assistance would be like adding a third story to a house that had a crumbling foundation." Lugar, along with Senator John Kerry, is promoting a bill that would give USAID the lead role in coordinating foreign assistance.
The Pentagon, meanwhile, is flexing its own policy-making muscle. As Bush's wars grew in scope, so too did the military's aid budget and its focus on nonlethal activities--what DoD once referred to as "military operations other than war." Now known by the conveniently vague and expansive handle of "stability operations," and funded by a war chest passed into law three years ago, these missions are often deeply at odds with the goals of diplomats and civilian aid workers. Perversely, the Pentagon is militarizing foreign policy even as it "civilianizes" the character of its activities abroad.
Civilians figure at least as heavily as generals and admirals in the pantheon of American militarism. It was George W. Bush and Donald Rumsfeld--with the collusion of Condoleezza Rice--who expanded and entrenched the Pentagon's franchise over foreign policy. Rumsfeld's contempt for civilian authority was demonstrated most clearly, and with devastating results, in the run-up to the war in Iraq. Aside from bulldozing the constitutional prerogatives of Secretary of State Colin Powell, he vigorously, if stealthily, subverted the nation's civilian leaders abroad. Before the US invasion, for example, he dispatched a three-man team to gather intelligence in several Middle Eastern states without informing the ambassadors of their activities, according to a source with intimate knowledge of the episode. The secret deployment has been widely interpreted as a direct violation of the executive Letter of Instruction to Chiefs of Mission, first signed by President Kennedy, which gave the US ambassador in his host country "full responsibility for the direction, coordination, and supervision of all Department of Defense personnel on official duty."
Rumsfeld also blocked NGOs from any substantial role in postwar Iraq, soft-stalling their efforts to obtain licenses to enter pre-invasion Iraq and stonewalling their requests for information on procedures once Saddam Hussein's regime had been destroyed. "The plans were classified," Sandra Mitchell, then a vice president for the International Rescue Committee (IRC), said in an interview at the time. "We would get answers like, 'We're working on it. Don't worry. We'll be handling this.'"
The results were calamitous, and since then the Defense Department has aggressively sought the support and expertise of civilian aid groups--so much so that InterAction, a coalition of American NGOs, was compelled to issue a code of conduct to its members to lessen the chances for blowback, which often comes from working with the military. "To the extent that we become identified with the US military, we become compromised," says George Rupp, president and CEO of the IRC. "We're trying to keep it from changing the way we do business, but things may be changing whether we like it or not."
Despite the Foreign Assistance Act's stipulation of State Department authority, the Pentagon accounts for nearly a quarter of America's budget for overseas direct assistance--up from near zero a decade ago--while USAID's share has declined to 40 percent from 65 percent during the same period. Moreover, as the Pentagon's funding capacity has expanded, so has its foray into humanitarian aid and social development. Directive 3000.5, a November 2005 Pentagon mission statement, defines stability operations as "a core U.S. military mission" to be conducted "across the spectrum from peace to conflict, to establish or maintain order in States and regions." It tasks US forces to develop, among other things, "a viable market economy, rule of law, democratic institutions, and a robust civil society," including "various types of security forces, correctional facilities, and judicial systems."
Any mission conducted "from peace to conflict...in States and regions" is by definition everlasting and all-encompassing, and Directive 3000.5 chills the foreign aid and diplomatic community. The document concedes that humanitarian and development work is often best performed by civilian experts, and it encourages their input. But it also makes clear that "US military forces shall be prepared to perform all tasks necessary to establish or maintain order when civilians cannot do so."
The Pentagon says it needs its own aid budget because assistance programs run by the State Department are overly bureaucratic. It argues that aid developed and administered directly by the Defense Department, such as the Pentagon's recent appeal for $400 million in emergency funding to train and equip the Pakistani army, will be more responsive and yield faster results. Critics respond that such a narrow focus on military concerns will crowd out other foreign policy priorities like the promotion of human rights, education and healthcare. "If DoD is concerned that civilian-led processes are too slow, then let's talk about how we fix those processes," says Gregory Elias Adams of Oxfam America. "Let's have a conversation about how the interagency process is broken and needs to be fixed. If civilian agencies do not have capacity to contribute to the mission, it will be military imperatives that carry the day."
In the January/February issue of Foreign Affairs, former ambassador J. Anthony Holmes noted how in June 2008 the State Department had only 10 percent more diplomats and support staff than it had a quarter-century ago, when there were twenty-four fewer countries in the world and US interests were concentrated in Europe and Northeast Asia. Unlike the military, which bases a fifth of its 1.6 million active-duty servicepeople overseas, the diplomatic corps posts nearly three-quarters of its people abroad. As a result, Holmes argues, the State Department lacks "surge capacity," the ability to train and retrain personnel or rotate them to hot spots without having to leave their posts empty in the interim.
Absent a far more aggressive restructuring of civilian aid and diplomatic agencies, their dependence on the military will only intensify. In April the White House backed away from a pledge to staff hundreds of posts in Afghanistan with civilians for lack of funding and said it would instead turn to the Pentagon. Meanwhile, efforts to set up an expeditionary corps of some 2,500 civilians under State Department leadership have snagged on interagency snits, Congressional lethargy and funding constraints.
The Obama administration has acknowledged the problem. In its budget for 2010, it calls for 1,300 new foreign service officers, and it is planning a near doubling of the State Department's foreign aid budget from 2008 levels--a step in the right direction, say aid workers and diplomats, but not nearly enough to meet the department's commitments. "I have never seen a better opportunity to rebalance the tool kit," says Gordon Adams, a Clinton administration national security expert and now a professor at the American University's School of International Service. "But there remains a serious discontinuity between the structure of Defense and the structure at State. One of the many questions [Secretary of State] Clinton will have to answer is how to deal with the military on a regional basis overseas."
It is overseas, after all, where US foreign policy is implemented, and it is there that the State Department's authority is so plainly obscured by the Pentagon's shadow. As part of a broader effort to reform the Defense Department's chain of command, the world was divided into operational zones in 1986. The centrality of these regional commands and the men who lead them--the best-known is Gen. David Petraeus, head of Central Command, or Centcom, which is responsible for US security efforts from the Persian Gulf to Central Asia--has increased as the Pentagon endows them with ever larger missions and budgets. In particular, the combatant commander has the authority to fund military cooperation agreements with governments in his area of responsibility, a mandate that was once concentrated within the Office of the Secretary of Defense. That prerogative alone gives the commanders enormous prestige with host governments at a time when their civilian counterparts, from ambassadors on down, have been pauperized by spending cuts that date back to Senator Jesse Helms's war on foreign aid in the 1990s.
In general, ambassadors and combatant commanders find common ground on many issues. But tensions, particularly in time of war, are inevitable. In 2003 then-Centcom commander Gen. John Abizaid wanted to build a $99 million counterterrorism facility in Jordan at the request of Jordanian King Abdullah II. The project was opposed as a needless extravagance by Edward Gnehm, US Ambassador to Jordan at the time. So Abizaid went around Gnehm by funding the training facility from his own budget, according to a source with intimate knowledge of the matter. (An e-mailed request to Abizaid's office for comment was not returned.) The New York Times reported on March 8, 2006, that for about two years the Pentagon had been dispatching Military Liaison Elements--special operations teams tasked with gathering intelligence on suspected terrorists and ways to destroy them--to various countries without the US ambassadors' knowledge. In Niger two years ago, the US chief of mission cut back the number of entry visas for US military personnel because of the country's political fragility and because the embassy lacked the resources to accommodate them, according to a report by the Government Accountability Office.
If Command Strategy 2016 is anything to go by, however, the Pentagon has no intention of waiting around. Issued in March 2007, it describes Southern Command, or Southcom, which has responsibility for Latin America and the Caribbean, as a Joint Interagency Security Command that would "provide enabling capabilities to focus and integrate interagency-wide efforts to address the full range of regional capabilities." As Adm. James Stavridis, then-leader of Southcom, elaborated at the time, "We want to be like a big Velcro cube that these other agencies can hook to so we can collectively do what needs to be done in this region."
Needless to say, many of those "other agencies" are reluctant to go along for the ride, particularly given the US military's checkered history in Latin America, where the Pentagon first began working independently with foreign governments. In 1988 lawmakers passed a bill ordering the military to arrest the flow of narcotics into the United States from Mexico, intensifying the failed "war on drugs" and lending thrust to the Pentagon's neo-imperialist lunge into Latin America. "Southern Command should not be the coordinating agency, because then they become the face of US assistance in foreign regions," says George Withers, a senior fellow at the Washington Office on Latin America. "The agency that coordinates controls the agenda."
When he was chair of the Foreign Relations Committee, Senator Lugar dispatched aides around the world to quantify the effects of DoD's expanded presence overseas and its growing dominance of US security policy. The result was two reports--committee "prints," in Capitol Hill parlance--that provide an alarming account of how much of foreign policy has been ingested by the military. "As a result of inadequate funding for civilian programs," concludes the first of the two prints, released in December 2006, "US defense agencies are increasingly being granted authority and funding to fill perceived gaps. Such bleeding of civilian responsibilities overseas from civilian to military agencies risks weakening the Secretary of State's primacy in setting the agenda for US relations."
The report disparages the 12-to-1 spending ratio between the Pentagon and the State Department, which it says "risks the further encroachment of the military, by default, into areas where civilian leadership is more appropriate because it does not create resistance overseas and is more experienced." Left unchecked, it warns, the increase in the number of military personnel and Pentagon activities abroad could lead to "blurred lines of authority between the State Department and the Defense Department [and] interagency turf wars that undermine the effectiveness of the overall US effort against terrorism."
The report contains many examples of the need for civilian authority "to temper Defense Department enthusiasm." It cites an unnamed African country--"unstable, desperately poor, and run by a repressive government"--that appealed to the US military for help in fighting an insurgency. The Pentagon agreed and soon afterward hailed the nation as a "model country for security assistance." Civilian embassy officials, however, expressed concern at the proliferation of US military personnel there. "It would be a major setback," the print notes, "if the United States were to be implicated in support of operations shoring up the repressive regime, regardless of the stated intent of such training."
The wellspring for such operations is Section 1206 of the 2006 National Defense Authorization Act, which allocated the Pentagon $200 million to spend on lethal and nonlethal equipment, supplies and training to foreign militaries. Section 1206 remains a limited authority, though last year legislators extended its budgeting cycle to three years, added maritime security to its list of activities and topped up its allocation to $350 million. A key condition Congress laid down for 1206 approval--that the Pentagon submit its programs list to the State Department for "concurrence" or "dual-key" approval--remains. Despite this, 1206 funds have been invested in countries with highly autocratic governments.
The US government has a long history of bankrolling dictators in pursuit of strategic ends. But there is a difference between declaring such support as official policy--as is the case with Egypt, for example--and the Pentagon's dole, which Congress allots with only a perfunctory understanding of how the money will be spent. In August 2008 Senator Russell Feingold responded to the Pentagon's request for additional 1206 funding with a report that $6 million from the program had been given to the government of Chad, which according to the State Department is "engaging in extra-judicial killing, arbitrary detention and torture." Other recipients of 1206 funding are Algeria, Cameroon, Equatorial Guinea, Gabon and Tunisia, all of which have abysmal human rights records.
Conspicuously absent from the debate over Section 1206 was Condoleezza Rice. At the time, Senator Patrick Leahy wrote Rice several letters imploring her not to cede unprecedented power to the Pentagon. According to Paul Clayman, an attorney who has worked for the State Department as well as the Senate Foreign Relations Committee, and others who were closely involved in the debate, the staff on Lugar's committee were staggered by Rice's passivity.
In April 2008 Rice and Gates testified jointly before the House Armed Services Committee. In addition to their mutual desire for augmentation of the Pentagon's Section 1206 channel, Rice also endorsed a new Pentagon-controlled allocation under Section 1207 of the defense bill that could fund State Department projects contingent on the defense secretary's approval. At one point, Rice was asked by Congressman Vic Snyder whether she still believed ambassadors should be the most senior representatives of US missions overseas. Naturally, Rice answered in the affirmative. What was striking was the fact that the question had to be asked in the first place.
Congress is now pushing back--sort of. In its version of the Pentagon's most recent supplemental budget, lawmakers stipulated that authority over the Pakistan counterinsurgency fund should reside with the State Department at the end of fiscal 2010. The House version of the bill called for State to assume immediate control of the fund, but the Senate prevailed in delaying the transfer, noting the department's "lack of capacity."
On the other hand, the House also appears to be leaning toward DoD in the 1206 debate. In a June report on the National Defense Authorization Act for fiscal year 2010, the House Armed Services Committee soft-pedaled its earlier position that 1206 programs should be transferred to State. Instead, it committed itself to the existing "dual key" framework and averred that "whatever the final, permanent form these authorities take, the Secretary of Defense must play a primary role in generating requirements." The report also asserts that "the Department of State still lacks the capacity to execute these authorities."
The Pentagon shows little inclination to relinquish its authority. An internal DoD memo issued last November characterized civilian agencies as too weak to help in counterinsurgency operations and declared that the Pentagon should be ready to lead such missions absent a "whole-of-government" approach. The document, leaked in January, warned that it would take civilian agencies at least a decade to develop the capacity to work effectively alongside the military. In February an unnamed "senior Pentagon official" told Inside the Pentagon, a weekly newsletter, that the military needed "a great deal of budgetary flexibility" in order to "proactively get ahead of problems before they become disasters." In May, Michael Vickers, soon to become assistant secretary of defense for special operations, told Congress it should increase spending "several fold" for funding under Section 1208, a budget mandate exclusive to the Pentagon in support of "foreign forces, irregular forces, [and] groups or individuals" engaged in combating terrorism. The oversight mechanism for 1208 programs is considerably less rigorous than those associated with 1206.
Civilian Washington, in other words, has reaped its own whirlwind. It was not a military cabal but a civilian cadre--Clinton in the 1990s, followed by Bush and his neoconservative courtiers--who expanded the reach and lethality of the military, despite the collapse of the Soviet Union. As the executioner of foreign policy, so much of which is now imposed from the business end of a Predator drone, why shouldn't the Pentagon serve also as its judge and jury? The answer, of course, is that America is a republic, a nation not of men but of laws, and the laws say foreign policy must be charted by civilians. Complacent politicians have neglected this trust, however, and the military now defines US interests abroad as much as it defends them. That is the bill for a leviathan. It is the wages of empire.
During the nadir of the Iraq war, Blackwater, the North Carolina-based security company, and its guns-for-hire symbolised everything that was so detestable about the conflict, so much so that it became in the minds of its critics the root cause of the violence rather than a consequence of it. In much the same way, investment banks such as Goldman Sachs have become targets for those who see corporate greed as the source of last year's financial crisis rather than Washington's failure to properly regulate it.
Certainly Goldman, that blue-chip finishing school for aspiring regulators, and its friendly Wall Street rivals are easy to loathe these days. Nearly a year after they were rescued by the US$700 billion (Dh2.57 trillion) lifeboat fund organised by the then-US Treasury secretary, Henry Paulson, it has been reported that Goldman was allowed to recover $13bn in credit defaults swaps written by the failed insurance giant AIG. (Mr Paulson is a former Goldman chief executive.) Bank directors, as if deaf to the silence of vacant factory lines and abandoned foreclosed homes, are back to rewarding themselves with multimillion-dollar bonuses and glamorous corporate retreats.
Over the past few weeks, the press has lobbed one mortar round after another about investment banking in general and about Goldman in particular. Rolling Stone last month described Goldman as a "great vampire squid wrapped around the face of humanity". The cover of New York magazine led with the headline: "Is Goldman Sachs evil?" Politicians have lined up in Congress to blame Goldman for exploiting the crisis, if not starting it altogether.
High finance has long occupied the American imagination. From the Depression-era screwball comedy My Man Godfrey to the 1987 morality play Wall Street, which introduced the iconic greenmailer Gordon Gekko, Americans have been simultaneously intrigued and appalled by pin-striped predators. Beginning in the 1980s, when Reagan-era deregulation allowed investment bankers to raise their own funds to finance huge deals, they were the high priests of finance - the "Masters of the Universe", as the writer Tom Wolfe put it. They were the fuel behind the dotcom bubble and they were the sausage factories that packaged home loans into exotic, thinly traded and ultimately worthless securities that, last autumn, brought the global financial system to within a whisper of a meltdown.
Now, the banks are back. This week, the top dozen firms reported combined revenue of $136bn in the first half of the year. And for the second time in 12 months, they owe the federal government for their deliverance. Having been deprived of their proprietary pools of investment capital under the terms of the Paulson bailout, they have found a liquid market buying debt from the US Treasury and selling it to the Federal Reserve in its bid to stabilise financial markets at a time of record low interest rates.
The timing could not be better for the banks, given how the merger and acquisition trade, among the most lucrative in finance, has yet to revive itself. The number of the Fed's primary dealers has declined in number, down to 18 from 31 a decade ago, which means they can charge higher fees. What is more, because the Fed, for the sake of transparency, gives advance notice of the kind and quantity of the securities it needs to buy, dealers load up on them ahead of the scheduled purchase date and then hold out for top prices.
Thanks to the Fed, the normally dull fixed-income market has become a growth industry for Wall Street. Last week, the Financial Times reported that Goldman alone earned $6.8bn in fees from debt trading and related activity in the second quarter because of "historically wide margins and a fragmented credit environment". Having plucked the banks from the abyss with public funds, Washington is now showering them with thick commissions and a steady revenue stream. "The government is a huge buyer and seller and Wall Street has all the pricing power," an unnamed investment manager told the FT. "You can make big money trading with the government."
The banks, led by Goldman, are unapologetic. Why should they not be? It is not their fault they were allowed to tear through the world's credit markets, under-regulated, for a generation until the Big One finally lowered the boom. That responsibility lies with freely elected members of the US Congress, who happily complied with Wall Street's demands for the razing of laws that prevented bank holding companies from owning investment houses.
When the US's popular invasion of Iraq in 2003 span out of control, Washington turned to security companies such as Blackwater for help. Now it relies on banks such as Goldman and its rivals in New York, London, and Tokyo to ease it out of a crisis inseminated by the deregulation craze of the past 30 years. To misquote William Shakespeare, the fault lies not in the mercenaries nor in the money-lenders, but in ourselves.
Is California too big to fail? With taxpayers on the hook for the bailout of spectacular failures such as the insurance giant AIG and car maker General Motors, why shouldn't Washington save the Golden State? Politicians from California's state capital in Sacramento have already been to Washington, hat in hand. In June, a delegation of them persuaded top federal officials, starting with Timothy Geithner, the US Treasury secretary, to consider a rescue plan should the state go belly up.
Well, this California native would thank the feds to keep their dole to themselves. In a country that insists on co-mingling "values" with policy, it is time to restore accountability and restraint as the core of democratic capitalism. California, the late, great frontier of libertarian virtue, is an appropriate place for it.The stakes could not be higher. California's GDP, at US$1.7 trillion (Dh6.24tn), not only accounts for 12 per cent of the US national output, it ranks as the eighth-largest worldwide. Yet for all its vast resources - the state leads the nation, if not the world, in agriculture, defence contracting, computer software, media and tourism - California has accumulated a $24 billion deficit that its gridlocked legislature has failed to reconcile.
Last week, Arnold Schwarzenegger, the governor, announced the state would be forced to issue IOUs to cover outstanding debts that could swell to $4.8bn by August if politicians cannot reach a budget agreement by then. California, which has the worst credit rating of any state in the country and has already accumulated nearly $60bn worth of municipal bonds, refuses to cover revenue gaps by taking on more debt. Such restraint is encouraging, but it comes late in the process and means little without significant spending cuts. Martin Weiss, an analyst at Weiss Research - best known for having forecast the demise of Bear Stearns and Lehman Brothers last year - said last month the prospect of a default was "unavoidable".
This is not the first time Sacramento has found itself on the brink of insolvency, however. The economy was hit hard by the collapse of the dot-com bubble and the defence sector's post-Cold War contraction, only to revive itself. Any state that can coexist with frequent onslaughts of fires, mudslides, earthquakes and religious cults can survive its current financial reckoning, assuming politicians are willing to roll up their sleeves and reform one of the most dysfunctional political regimes in the free world.
California, to paraphrase Rick Blaine in Casablanca, is just like the rest of America, only more so. It is gluttonous; in the past five years alone, its budget has expanded by nearly 50 per cent, to $145bn. Its politics are more partisan, owing to a district representation system that entrenches incumbents and dissuades them from working with ideological rivals. Republicans and Democrats, as a result, habitually vote in opposition to one another on tax and spending bills. To make matters worse, California requires a two-thirds majority to pass its annual budget, one of only three US states to do so.
Another burden on Sacramento is its chaotic "ballot box budgeting" system, which allows voters to support single interest programmes, from stem cell research to health and education issues, without identifying how they will be funded. The most notorious of these measures - Proposition 17, which became law in 1978 - gutted the state's revenue base by slashing property taxes, a move some analysts blame for much of the state's chronic funding gaps.
Unlike its bush fires and floods, California's legislative process is a man-made disaster that can be corrected given the proper incentive - namely, the fear that Washington will refuse to come to its rescue. To do otherwise would hasten the final chapter of a state that once embodied that antique American quality of rugged individualism. Beginning in the 19th century, California became an El Dorado of the human spirit, a destination for innovators unafraid to fail. It lured moguls, thinkers, scoundrels and adventurers from everywhere. Levi Strauss created a clothing empire out of the state's legendary gold rush of 1849. William Randolph Hearst, the publisher, migrated from New York to San Francisco, where for a generation he dangled the fortunes of politicians, industrialists and warlords over the bonfire of his ambition. Amadeo Giannini, an Italian immigrant, built what would become the Bank of America by accepting handshakes as security against loans he wrote for victims of the 1906 San Francisco earthquake.
Like all visionaries, men such as Strauss, Hearst and Giannini wanted the government out of their affairs when business was good - and they accepted their fate when things went south. So where do young entrepreneurs go today if they are willing to work without a net? Certainly not the US, where it appears no act of commercial malpractice is so severe it cannot be preserved with a drip feed of public funds. Hong Kong? Zagreb? The overweening dole has left us with few markets where it is OK to fail.
Ghosts inhabit Damascus' Old City like players on a stage. You can see them peering through the ramparts of the citadel and tending to the faithful at the Omayyad Mosque. In the narrow passageways of the main souk, they clamor among the spice markets and connive between the caravansary and Byzantine colonnade.
You can see them. There is the Ottoman Governor As'ad Pasha al-Azem, receiving visitors and hearing petitions in the salamlik of his palace, a Mamlukian treasure. Across the way is a merchant from Andalusia offering textiles from Pisa for a set of Persian ceramics. At the Burmistan al Nur, or "house of patients," a group of surgeons are gathered under a kumquat tree for a lecture on the latest techniques of scapulimancy - a method of divination - from Toledo, Spain. And here among litter of citrus fruit, chatting among shop owners and munching on Arab pastry, is the cunning and charismatic Mu'awiya - the caliph himself - so secure in his authority he is attended by only a single bodyguard.
But the real power center in Old Damascus - indeed, in the whole empire - is a few hundred yards away, off Al-Amin Street in the old Jewish Quarter. That would be Beit Farhi, the grand palace of Raphael Farhi, the successful banker and chief financial adviser to the Ottoman sultanate. It was Raphael and his older brother, Haim, who collected the taxes that financed the granaries, foundries and academies of Greater Syria, and it was the subterranean vaults of his palace that held the gold that backed the imperial coin. Until his family's tragic dissolution in the mid-19th century, Raphael Farhi - known as "El Muallim," or the teacher - was not simply the leader of Syria's famously prominent and prosperous Jewish community; He was one of the most powerful men in the Ottoman world. Hakam Roukbti knows this better than anyone. As the architect who has assigned himself the epic task of restoring Beit Farhi to its former glory, he has been working with a full complement of ghosts - Raphael, his brothers and their extended families, the palace guests and servants - peering over his shoulder. "The Farhis controlled all the finances in Greater Syria," says Roukbti. "He was paying the pashas' salaries. He appointed governors. This house was the most important of all the houses in Damascus."
Roukbti, a Syrian who left for Spain in 1966 to study Islamic art, and his wife, Shirley Dijksma, have devoted themselves to the faithful renovation of the massive and labyrinthian Beit Farhi -- from the Hebrew language inscriptions carved in the reception hall to the orange trees in the courtyards. Their goal is to complete the work this summer and launch it as a luxury boutique hotel not long after that.
It is all part of a wider renaissance in one of the longest-inhabited cities in the world. While an economic boom is transforming greater Damascus into a modern metropolis with five-star hotels and shopping malls, the old city is keeping true to itself. Villas and caravansary are being carefully restored and converted into restaurants, cafés, inns, and art salons. Even the usually absent municipal government is getting into the act; the citadel has been completely renovated and strips of the souk's narrow streets have been appointed with gas lamps.
At the epicenter of this reawakening is Beit Farhi, all 25,000 square feet of it. The rooms are nearly finished, complete with spot lighting and central heating, and soon the reception hall will be sealed under a glass canopy that will protect guests from the city's pollution and insects. (It was one concession Roukbti made to modernity.) The cellar bar, which will stretch along the entire north side of the palace, is poised to become a favored watering hole of Damascus' well-fixed expatriates. It was dug out at a price, however; according to Dijksma, an interior designer who promotes local Syrian artists, the same laborer was bitten three times by scorpions.
But while Beit Farhi may soon be hosting international film stars and celebrity politicians in its pricey chambers, it is far more than a commercial enterprise. The Muslim Roukbti and the Christian, Dutch-born Dijksma are on a mission that is as much ecumenical as aesthetic. The Syrian Jewish population has a history, as lush and complex as Beit Farhi's marble-inlaid floors, that begins on one end of the Mediterranean and ends on the other. For centuries, it was a vital part of the mosaic of varied religions and ethnicities that made Damascus the world's first city of commerce and culture.
For decades, the Jewish quarter has been a mute stepchild to the perennially chaotic main souk. Emptied after the creation of Israel and the wars that followed, its apartments and stalls have been padlocked by families now living elsewhere. Today, the remains of Syria's Jewish community consist of about three dozen aged men and women in Damascus and even fewer in the northern city of Aleppo. Albert Cameo, a leader of Syria's residual Jews, recalls with delight the day Roukbti introduced himself as the man who was going to save Beit Farhi. "I assumed he was crazy," Cameo says above the din of workers sanding stone walls in preparation for painting. "But then I thought, ‘What does it matter if he can pull it off?' And now, look at this miracle." Cameo, who like many Sephardic Jews - including the Farhis - has roots in Moorish Spain, grew up in a house just a few blocks away. He remembers his parents telling him stories about the Farhis and the great palace and how its library was open to any Jew who wanted to read from its many volumes. Cameo's recollections and those of his contemporaries have helped Roukbti in his restoration.
There are also written accounts from 19th-century visitors like Lady Hester Stanhope, the famous traveler and Orientalist, who described the palace's five inner courtyards, opulent gilded walls and gold-studded coffee cups. John Wilson, a noted biblical scholar of his day, wrote of the palace as "a little like a village ... [with] sixty or seventy souls. The roof and walls of the rooms around the court are gorgeous to a high degree." Wilson wrote of the Farhi's grand hospitality and he detailed the palace libraries, both the public one and Raphael's private book collection, in admiring detail. For the purposes of restoration, however, these accounts lacked depth. Roukbti and Dijksma had only one visual source that depicted Beit Farhi at its apex: an 1873 rendering of the palace's main courtyard by the classicist painter Sir Frederick Leighton. Titled Gathering Citrons, it portrays a woman in lavish robes looking on as an attendant drops fruit plucked from an orange tree into the outstretched hem of a young girl's skirt. The stone columns are painted in alternating stripes of apricot and blue and the arches are enameled with intricate ceramic designs.
It is a charming tableau - and a far cry from Beit Farhi's condition when Roukbti bought it in 2004. (A successful Paris-based architect, Roukbti financed the purchase with the help of several partners.) Like so much of the largely evacuated Jewish quarter, the palace was a nesting place for squatters. More than a dozen families, mostly Palestinian refugees, were living in each of its many rooms and it took Roukbti six months to buy them out under Syrian law. The main reception hall, which the Farhis used as their personal synagogue, had been ransacked and burned by looters decades earlier. Even the fountain had been dug up and carried away. It took another six months to clear the debris and crumbled stone from years of neglect and plundering before the real work could begin. Whenever possible, Roukbti and Dijksma drew from indigenous sources to complete their work. The stones were quarried locally, though some of the marble was imported from Turkey and Italy. The pigmentation powder used in recreating Beit Farhi's iconic ochers and azures was obtained from nearby shops. They recruited dozens of young artisans to repair or recreate from scratch the elaborately carved wood ceilings, marble floors and delicate frescoes. "It was difficult to find them," says Roukbti, who has an artist's easy manner and a thick head of grizzled black hair. "And even then, I had to be on top of them all the time. But now they are highly skilled. This has been like a finishing school."
The work site has the quality and feel of an archaeological dig. The foundation of Beit Farhi begins with a layer of roughly hewn stones cut during the Aramaic period beneath far more precise masonry typical of Roman construction. The area was occupied by modest dwellings of black stone before the Farhis arrived in 1670 from the Ottoman capital of Constantinople, where they lived for two centuries after King Ferdinand expelled the Jews from Spain in 1492. "They came with money," says Roukbti. "And they came with powerful connections with Ottoman authorities."
It was the dawn of a powerful Syrian dynasty that lasted some 200 years. During Napoleon Bonaparte's advance on Palestine in 1799, Haim Farhi is credited by Jewish historians for having rallied the Jews of Acre in a successful resistance. An ambitious pasha had him killed in 1824, however, and a reprisal attack led by Raphael ended in failure with the loss of his brother, Solomon.
Despite Haim's death, the Farhis would enjoy unrivaled wealth and power over the next two decades with Raphael as treasurer and vizier to the sultanate. But his fortunes were undone in 1840 by the family's association with the suspected murder of a Franciscan monk. Several of Damascus' most prominent Jews were arrested in the matter, including a Farhi family member, and it took intercessions from high-ranking diplomats and officials - all the way up to Mohammed Ali, the rogue Ottoman ruler of Egypt and the Levant - to clear them of wrongdoing. The affair was a mortal disgrace for the Farhis, however, and they scattered themselves about the capitals of the world.
At the very least, Roukbti hopes the rebirth of Beit Farhi will redeem Syria's Jewish heritage - if not the Farhis themselves. Already, according to Cameo, two groups of Jews from abroad have visited the site and he is eager to host more. "This house has suffered so much," he says. "Its return is very important, not just for Syria's Jews but for all Syrians."
Cairo is burning--in installments. It is a distinctively Egyptian joke, resonant as it is with politics, history and resignation. Last year, several of the city's landmark buildings burned under mysterious circumstances. In August, the top floor of the Parliament's Shura Council went up in flames as firemen, apparently short of adequate water supplies, looked on. A month later, the National Theatre was gutted. In November, thugs attacked the offices of the opposition El Ghad party with blowtorches while party members huddled inside and riot police stood by.
Cairo's immolation, the quip suggests, is a parody of the January 1952 blaze that consumed much of the city's commercial district and sparked a revolution. It is a tribute to the past and a morsel of wry humor from a people laid low by President Hosni Mubarak and his sclerotic, oppressive regime. As the country prepares for national elections in 2011, which Mubarak may or may not contest, the suspicious combustions have yet to kindle a popular uprising. But dissatisfaction with his rule and the prospect of a dynastic succession in a country that long ago overthrew a monarchy could make for a messy transfer of power in the Arab world's political epicenter.
The 80-year-old Mubarak has long depended on Egyptians' passivity--not to mention the implicit green light from Washington to persecute and incarcerate with impunity and the billions of dollars in annual subsidies guaranteed by the 1979 Egypt-Israel peace treaty. But the former air force chief, who came to power after Anwar Sadat's assassination in 1981, is stretching the limits of his nation's good humor. His estrangement from the citizenry widened with his declaration of war on Hamas during Israel's winter assault on Gaza, and his circle of advisers, like a noose, has drawn tighter.
Mubarak has not announced if he intends to stand for another six-year term in elections scheduled for 2011. He may abdicate to an army general or the head of state security, or transfer power to his son, Gamal. One of the only public references Mubarak has made to the prospect of transition was in 2007, when he assured his former military colleagues that he would die in office.
Political observers are about evenly divided over whether a military man or Gamal will succeed Mubarak. Ibrahim Issa, the outspoken editor in chief of the daily newspaper Al Dustour, leans toward the brass. "There will be a struggle between the generals, the businessmen and the bureaucrats," he says. "The businessmen are hated, and the bureaucracy can't bear the idea of chaos, so the army will win. And why shouldn't they? They rule the country anyway."
Issa is a portly man with black horn-rimmed glasses, a droopy black moustache and kinetic eyebrows. His office walls are covered with life-size portraits of fellow revolutionaries Che Guevara and Hezbollah leader Hassan Nasrallah, and he is possessed of an authentically rapier Egyptian wit.
"Hosni Mubarak would never give up power," he told me. "He'll rule until he drops dead, and then Gamal Mubarak will be Egypt's Prince Charles." What about Washington? "The Americans bought Mubarak twenty-eight years ago because they believed he could maintain peace," said Issa. "But this was the tragedy of the Shah of Iran, when Washington supported him over Mossadegh. The Americans always trade despots for stability, and they get 'extremists' instead."
For Israel and the United States, that means the Muslim Brotherhood, the Cairo-based global Islamist movement. Ikhwan in Arabic, it is by far the best organized and most popular political group in Egypt. Though banned by law--its members campaign and serve as independents--it controls the largest opposition bloc in Parliament. The Brotherhood poses the greatest potential threat to Mubarak's rule, yet it is also his guarantor of survival.
In 2005, in response to President George Bush's campaign for a democratic Middle East, Egyptians were allowed a shaft of political daylight when free elections were held. It was not secular parties that posted the biggest gains in the December polling but, rather, the Ikhwan, which won a quarter of the seats in Parliament. Its triumph was followed two months later by Hamas's election victory in Palestine. With that, Bush's romance with representative government in the Arab world ended.
Emboldened, Mubarak administered a pasting of the Ikhwan in fidelity with a tradition of anti-Brotherhood crackdowns that date back to the days of King Farouk. Since then, hundreds of Ikhwan members have been arrested and, it is widely presumed, tortured.
Mubarak cannot afford to neutralize the Ikhwan entirely, however. Islamism is the trump card he plays whenever foreigners call for a democratic Egypt and complain about the country's appalling human rights record. His message is clear: free and fair elections would install a fanatical Islamist government that would shred the country's peace treaty with Israel and, in league with Syria and Iran, open a third front against the Jewish state.
For Mubarak, Ikhwan-baiting is as lucrative as it is cynical. While dissident members have broken off to form radical cells--including Al Qaeda--there is no credible evidence linking the group to terrorist activity over the last half century. "I am convinced they are democratic and nonviolent, and I criticize those who have doubts," says Diaa Rashwan, a terrorist expert at the Al Ahram Center for Political and Strategic Studies.
In addition, estimates of the Ikhwan's electoral prospects have been revised downward since the 2005 ballot and the government's draconian response. (Ikhwan leaders didn't help themselves by issuing an edict last year that would restrict women and Christians from running for president.) Even the group's senior members say it would be self-destructive to mount a presidential bid in isolation of other parties should Mubarak ever loosen his monopoly on power.
"We want a coalition," says Abdel Monem Abou El-Fotouh, an Ikhwan leader and head of Egypt's medical union. "If there was a free and fair election, we might get 70 percent of the vote. But as democracy goes on and Egypt gets an independent judiciary, freedom of expression, freedom for women and so forth, that ratio would not be sustainable or desirable. In a free society, we need independent groups to become participants in power."
The US Congress is having none of this, of course. Last fall a prominent Egyptian dissident met with politicians and policy-makers in Washington and appealed to them to support a democratic Egypt. He spent a week in New York and Washington, and he was struck by the American obsession with, and ignorance of, the Ikhwan.
"It was all they wanted to talk about," said the dissident, who asked that I not quote him. "Many of them were sure that this was a terrorist organization that would start a war with Israel were it not for Hosni Mubarak. They would not accept that the Ikhwan is a moderate organization and that we should work with them."
The man who would be pharaoh, 45-year-old Gamal Mubarak, has been at the vortex of Egyptian politics since 2002, when his father placed him at the head of the Policy Committee of the ruling National Democratic Party (NDP). Over the next two years, Gamal refreshed a political establishment of hacks and hangers-on, with free-market enthusiasts lavishly praised by the World Bank. The Egyptian economy is one of the strongest performers among developing nations, yet the dividends have yet to reach the country's evaporating middle class. The gap between the top and bottom wage earners, meanwhile, has expanded ominously.
But Gamal Mubarak, who worked as an investment banker in London before returning to Cairo in 2000, is burdened not so much by high-level graft or income disparity--both drearily common in Egypt--as by a lack of depth. "He's lived all his life in the royal court and at the republican palace," says Osama Harb, a political commentator and former Gamal ally. "He has no meetings with working people, no sense of real life. Yet he believes he has a right to succeed his father."
In 2005, President Mubarak amended Article 76 of the Egyptian constitution to allow multiple candidates to vie for the presidency, a move that many analysts interpreted as a prelude to a bid by Gamal amid a field of strong contenders from the NDP-controlled People's Assembly. In this way, say critics, the Mubaraks could have their dynastic succession packaged as a democratic process.
Such a maneuver would still require sanction from the military, however. It is important to remember that in Egypt, perhaps more than anywhere else in the Arab world, politics is very much an ad hoc affair. In Morocco, Saudi Arabia and Jordan, new leaders are bred through the monarchy. In Syria, it's done through the Alawis. Egypt has no system for renewal; it has a host of competing constituencies (Arabs, Africans, Islamists, Copts, secularists, the lower coastal dwellers and the upper inlanders) but no institution to emulsify them. Gamal is a political orphan who lacks the influence and authenticity that could sustain a dynastic transfer of authority. So it will likely be the military, not Gamal Mubarak, that fills the void.
In 2007, with Gamal entrenched as the NDP's power center, the president felt obliged to sit down with army leaders and reassure them that he would remain in power indefinitely. For good measure, the meeting was reported in the state-owned Al Ahram newspaper. Without an understanding between President Mubarak and the military regarding the transition, analysts warn, Gamal could be dangerously exposed should his father die before naming a successor. Some suggest an interim junta might be formed. Or Gamal may become a titular prime minister with a military cabal calling the shots and Omar Suleiman, the head of state security, as chamberlain.
It is pleasant to believe the sheer weight of Egypt's cultural and political centrality will, like ballast in the hull of a ship, right the country through an uncertain transition. But Egyptians, a people of irrepressible good humor, are these days known for somber refrains.
"We need a genuine constitution," Harb, the political commentator, told me. "We need a multiparty political system, a free press, a free society. We need real NGOs that are not intimidated by the government, and we need to abolish the security state. Only then can Egypt be reborn." Otherwise, said Harb, "there will be general chaos. The army will be in the streets."
Al-Sijjil
The Karni crossing is Gaza’s main artery for trade, with the capacity to process more than a thousand truck crossings a day. Following the outbreak of the second Intifada, however, Israel imposed a tight inspection regime on its side of the Karni terminal that reduced throughput to a trickle. As part of a 2005 U.S.-brokered initiative to improve economic conditions in the West Bank and Gaza, Israel agreed to ease its control over Palestinian roads and border crossings in exchange for American-funded improvements of Palestinian inspection systems and security forces. Between the signing of the accord and Hamas’ seizure of Gaza in November 2007, hard-liners in Israel and their allies in Washington managed to thwart the deal. How they did it, recounted here, offers a glimpse of the obstacles President Barack Obama might face should he seriously negotiate on behalf of a Palestinian state with a viable economy as its foundation.
Part I: Israel sabotages U.S. peace efforts
Ephraim Sneh, a leader of Israel’s pro-peace movement and a former aid to Yitzhak Rabin, is used to the political wilderness. Not long after Rabin’s killing in 1996, he pushed Israel and the US government to buttress the Oslo process by investing in the Palestinian economy. He presented then-US ambassador to Israel Martin Indyk and other senior US policymakers with a list of seven projects that would give ordinary Palestinians a stake in a peaceful future. They included a new airport at the Kallandia refugee camp, sea ports at Gaza, desalination plans – and a modern cargo terminal at Karni.
“If you change the economic reality you can change the political reality,” Sneh told the Americans. “By improving the Palestinian economy, you can fight terrorism.”
No one listened to him. Nearly a decade later, with Israeli roadblocks in the West Bank and the incarceration of Gaza bleeding the Palestinian economy white, Sneh was vindicated. The former commando and brigadier general was given responsibility for Israel’s commitments under the Access and Mobility Agreement, which was signed in November 2005 in response to heavy pressure from then-Secretary of State Condoleezza Rice. At the heart of the agreement was a vision Sneh, a fluent Arabic speaker and a former occupation governor of the West Bank, had nurtured for many years: the development of Karni and other Palestinian border crossings into efficient and secure entrepôts for trade.
The agreement set ambitious goals for itself, particularly as it related to Karni. The Palestinians on their side would be given tens of millions of dollars to train border guards, build new roads, and install security and payroll systems, while the Israelis would be provided with $12 million worth of state-of-the-art scanning and surveillance equipment. By late January 2006, according to the agreement, truck crossings would reach 1,200 a day, a third of which would be carrying goods made by Palestinians for sale abroad, a crucial source of foreign exchange for the impoverished Gaza strip.
The project was quickly snagged, however, on a dispute between Israel and the US Agency for International Development over the scanning equipment. Due to the tight deadlines imposed by the agreement – the scanners needed to be in place by December 31, 2005 – it was decided USAID would first lease the surveillance systems and purchase new ones later on. The leases were signed on December 8 and a few weeks later the scanners were flown from Europe to Tel Aviv on a Russian Antonov 225, the world’s largest cargo jet, at a cost of $500,000. Such an elaborate charter was necessary, according to a December 2006 USAID report, given the size of the equipment and the urgency of the situation.
Once the scanners were delivered, a herd of Israeli bureaucracies – from the Ministry of Defense to the Israeli Airport Authority – submitted to USAID a list of demands for adjustments and alterations that would cost the US government an estimated $6 million to address. The list, according to an official with Chemonics, USAID’s contracting agent on the project, ranged from the substantive – for example, Israel wanted the capacity to scan three trucks at once, which required extensive retrofits and new software – to the trivial, such as a request that the nickel doorknobs in the scanners’ control rooms be replaced with brass ones.
It took six months to address Israel’s conditions even after they had been narrowed down by USAID. A careful reading of the USAID report suggests Israel was trying to sabotage the mobility agreement by delaying integration of the scanners. “The majority of retrofitting tasks required extensive technical modification and in several instances, delayed or interrupted equipment deployment and operations at several sites,” the report states. “These initiatives, while justifiable in the context of [the defense ministry’s] concerns, have been perceived by the suppliers as excessive and redundant for leased equipment.”
In January 2006, USAID began negotiating for the purchase of the replacement scanners. Five companies expressed an interest in the project, but nearly all of them complained of a battery of new restrictions imposed by Israel. The Israeli side, they said, was demanding technology that would have to be developed from scratch even as it desired a system already in production and with a performance record of two years. It also insisted on having a majority of seats on a committee to evaluate the scanners as opposed to the customary single-seat, third-party representation, and it wanted the evaluation process to take 90 days instead of the usual three weeks. These and other conditions would have delayed deployment of the new scanners by at least two months, according to USAID.
When the frustrated bidding companies threatened to walk out of the negotiations, USAID unilaterally signed a contract with AS&E, a US-Chinese joint venture. Outraged, a senior Israeli defense official filed a formal protest to the US embassy complaining that USAID’s pre-emptive action jeopardized Israeli security. USAID was then instructed to write a letter to the defense ministry reaffirming the centrality of its security concerns, but the contract was honored.
The dispute over the scanners had been resolved, though Israel’s demands for retrofits would delay their full deployment for several months. As a result, cargo traffic at Karni would be kept to a paltry few hundred truck crossings a day. But after Hamas’ victory in parliamentary elections in January 2006, it no longer mattered. Well before the first vote was cast, Israel’s allies in Washington were mobilizing for the internment of Palestine.
Part II: The Consequences of Incarceration
Washington responded to Hamas’s election triumph with a financial embargo on the Palestinian Authority. The Access and Mobility Agreement was all but frozen, particularly as it related to the Karni crossing, Gaza’s main artery for trade. On average, only some 20 trucks crossed into and out of Gaza in 2006, about 5 percent of the volume targeted by the mobility accords. A year after the US sanctions took root, the World Bank had declared Karni’s operations as “unacceptable.” The Gazan economy continued to deteriorate and by mid-2007 the United Nations was warning of a humanitarian crisis.
Though few observers on the US side were expecting Hamas’s landslide win, the American Israel Political Affairs Committee was taking no chances. Well before the vote, the Washington-based lobbying group was circulating memos to lawmakers encouraging them to reject any Palestinian government in which Hamas had a role. (AIPAC keeps a meticulous record of how American lawmakers vote on Israel-related legislation. It regularly asks a friendly Senator or House member to demand a roll-call vote so it can “score” members for their voter loyalty, then publishes the results in AIPAC Insider, the group’s quarterly periodical.) On its website, AIPAC took credit for mid-wiving House Resolution 575, signed on November 18, 2005, which declares that “Hamas and other terrorist organizations should not participate in elections held by the Palestinian Authority.”
Within days of Hamas’s victory, and with AIPAC assiduously working the process, two draft resolutions were introduced from the House of Representatives and one from the Senate. Language from the bills was synthesized into a small provision and inserted into an emergency funding bill for the Iraq war, which was signed into law on June 15, 2006. The provision forbids “appropriations for foreign operations, export financing, and related programs … for assistance to the Palestinian Authority.” Unusually, the legislation denied the president a waiver authority.
With the stroke of a pen in Washington, all US-funded projects in Palestine were cut off. They included programs to make the Palestinian judiciary more transparent, to train and educate its police force, and to professionalize the Palestinian election commission. In a June 23 memo, USAID instructed its contractors in the West Bank and Gaza to “ensure no funds are expended which could be considered as assistance to the Palestinian Authority.” European donors largely followed suit.
For Keith Dayton, the legislation was a surprise attack on his efforts to upgrade the Karni crossing. Only a month or so before the Palestinian elections, the US Army lieutenant general and former Pentagon policy planner had been appointed by the State Department as its security coordinator on the project. Suddenly, he and his team of experts were prohibited from dealing directly with any member of the Palestinian government other than President Mahmoud Abbas. To compensate, a detail of Canadian military officers and engineers were brought in to act as proxies for the Americans.
Lacking the US funds he requested to strengthen security and to bolster economic activity on the Palestinian side of the crossing, Dayton was reduced to cobbling together non-US aid on a piecemeal basis. He and his team persuaded a Dutch NGO to help finance a flower farm, for example, and dollops of aid were cajoled from Turkey and Sweden. They managed to raise C$1.2 million from the Canadian government to buy security cameras, and a British aid agency agreed to train border guards and build a new mess hall.
For four weeks in January, Gaza erupted into an urban killing ground as gunmen from Fatah and Hamas, following months of tensions, engaged in running street battles. To avert a civil war, King Abdullah of Saudi Arabia invited leaders from the two sides to Mecca, where they hammered out a truce that became the foundation for a Hamas-led unity government. To shore up Abbas, and to preempt a wider conflict, the Bush administration in January 2007 announced it would provide the president’s office with some $86 million in aid, $16 million of which was to be invested in Karni. But when the aid package was submitted to Capitol Hill for approval, Congress blocked it. Nita Lowey, a legislator who chairs the State and Foreign Operations subcommittee of the House Appropriations Committee, said she placed a hold on the package out of fear that some of the money could find its way into the coffers of Hamas.
The freeze perplexed many observers in Washington. After all, they argued, the aid was to be distributed not in cash but in kind, as items and services like computers and training procured by the Dayton team. Capitol Hill sources say Lowey made her decision after meeting with Daniel Ayalon, Israel’s then- ambassador to Washington, “who makes no distinction between Hamas and Fatah,” according to a legislative aid who requested anonymity.
In mid-March, a few weeks after Lowey’s decision, Ephraim Sneh, who was managing Israel’s side of the AMA, traveled to Washington for the annual leadership conference of AIPAC. There, he admonished the group’s members for not supporting the Karni redevelopment as a cornerstone of the mobility agreement. He called on the offices of Lowey and the late Tom Lantos, the California representative who was a co-sponsor of the anti-Hamas bills, and emphasized the importance of Karni. He and an aid from the defense ministry also met with members and staff of the foreign relations and foreign appropriations committees. At every stop, Sneh delivered the same message: what’s good for the Gazan economy is good for the state of Israel.
Eventually, some funds were released for Dayton’s operations. But by then it was too late. In June, Hamas overran US-backed Fatah forces in a brief but bloody civil war. Soon after that, radical groups unleashed their rocket attacks on southern Israel.