From Volume 6, Issue 48 of EIR Online, Published Nov. 27, 2007

United States News Digest

U.S. Sends Ballistic Missile Defense Proposal to Russia

Nov. 22 (EIRNS)—The U.S. has submitted a formal proposal to Russia for cooperation on ballistic missile defense, the Associated Press reports today. This follows Foreign Minister Sergei Lavrov's public complaint that no written proposal from the U.S. side had been received, weeks after the 2+2 meeting of foreign and defense ministers from both sides tried to reach an agreement on how, and whether, a missile defense system in Europe should be deployed. On Nov. 20, President Vladimir Putin publicly complained about the lack of a U.S. response.

On the table, has been the proposal made by Putin personally to President Bush at Kennebunkport last June, for Russian-American cooperation on missile defense, as a move toward a strategic partnership. The proposal was hailed by SDI author Lyndon LaRouche as a potentially major breakthrough.

AP reports that the U.S. offer includes: integrating U.S., Russian, and NATO missile defense systems to expand protection of both Russia and the West (which has been stressed by NATO members), allowing Russian experts to make regular inspections of the U.S. missile-interceptor site in Poland, which, U.S. officials emphasized, is contingent on approval from Poland (which is by no means assured); and, delaying the activation of the U.S. missile interceptors until it is clear that Iran can reach Europe with ballistic missiles (which evaluation, the Russians have insisted upon).

AP reports that Russian officials have reacted positively to the proposal of delaying activation of the interceptors. But Russian negotiators insist that the offer include a binding treaty that would detail specific terms for activation, said a Russian official, and the United States would likely object to such a demand.

Schwarzenegger Announces 'Freeze' on Some Interest Hikes

Nov. 21 (EIRNS)—In a move that surprised some observers, George Shultz's Golem, California Gov. Arnold Schwarzenegger, announced Nov. 20 that he has reached a voluntary agreement with four leading mortgage lenders to freeze adjustable interest rates for high-risk borrowers. Schwarzenegger identified GMAC Mortgage, Countrywide Financial, Litton Loan Servicing, and HomeEq Servicing as participants in the agreement, which he claimed would cover 25% of homeowners threatened with foreclosure. However, this agreement would exclude any homeowner who has already missed a payment. There have already been 52,560 home foreclosures in California from January through September of this year, according to DataQuick.

The Sacramento Bee reports that Schwarzenegger's deal is modelled on a proposal made by FDIC chairman Sheila Blair that asks lenders to freeze rates of those with "teaser" loans set to increase monthly costs. While some advocates for homeowners are praising this action, Lyndon LaRouche has emphasized that any effort to stop foreclosures which does not address the reverse-leveraged chain-reaction collapse of the banking system, already underway, is doomed to fail. LaRouche's Homeowners and Bank Protection Act (HBPA) was drafted to put up a firewall, to protect state and federally chartered banks from such a collapse.

One economist contacted by EIR was quite skeptical of the Schwarzenegger plan, pointing out that many banks and lending agencies have already pledged the increased income expected from higher interest rates, to cover their own increased borrowing. A freeze, he said, which doesn't take this into account, could lead to a chain-reaction collapse of mortgage-backed securities, which would have "a dramatic effect on the nation's investors, especially pension funds," which were sold these and related financial packages.

Schwarzenegger's proposal appears to be a time-buying gimmick at best, but one crafted to enhance his appeal as a "man of the people."

Rudy Giuliani's Dope Lobby

Nov. 21 (EIRNS)—Purdue Frederick Co. (also known as Purdue Pharma) pleaded guilty on May 10, 2007, to Federal charges of misrepresenting the addictive nature of its narcotic, Oxycontin. Abuse of the drug has led to many deaths, and many crimes by desperate addicts. The company and three of its top executives were ordered to pay a total of $634,515,475 in fines. Evidence presented at the trial showed that the company's own internal research reports warned about the "abuse potential," but the firm attempted to play down or cover up the problem.

In May 2002, when the Drug Enforcement Administration (DEA) and the Food and Drug Administration began probing overdose deaths attributed to Oxycontin, Purdue hired Giuliani Partners, the private lobbying firm of former New York Mayor Rudy Giuliani, to run interference on the matter. At that time, Giuliani publicly praised the firm, saying "Purdue has demonstrated its commitment to fighting this problem" of Oxycontin abuse.

Giuliani met numerous times with DEA officials, including administrator Asa Hutchinson, raised thousands of dollars for a new DEA Museum, and posed for photographs with Hutchinson and others at the museum's ribbon-cutting ceremony. According to the 2006 book Grand Illusion: The Untold Story of Rudy Giuliani and 9/11, by Wayne Barrett and Dan Collins, Giuliani also got himself appointed to a DEA panel which decided whether to allow only physicians specializing in pain control to prescribe Oxycontin; the panel decided in favor of Giuliani's client, not to restrict the drug.

Giuliani's partner, former New York Police Commissioner Bernard Kerik, also met with Hutchinson while lobbying for Oxycontin. Kerik was assigned to security for Oxycontin manufacturing, as Federal investigators found Purdue was not following record-keeping laws designed to prevent leakage of the drug to dope traffickers. Kerik left Giuliani Partners in 2005 when he came under criminal investigation, and was indicted Nov. 8, 2007 on Federal charges of tax fraud, obstruction of justice, and lying to government officials checking his background.

In addition to lobbying for Purdue Pharma, Giuliani also became the firm's chief attorney and spokesman: He was hired by Purdue's Bush-connected Texas law firm, Bracewell and Patterson, which changed its name to Bracewell and Giuliani. Giuliani led Purdue's negotiations with Federal prosecutors, resulting in a plea bargain and fines.

McClellan: Cheney and Bush Made Me Lie

Nov. 20 (EIRNS)—In a forthcoming book, What Happened, former White House press secretary Scott McClellan admits that he "unknowingly passed on false information" to the press after being given false information by President Bush, Vice President Cheney, and other top White House officials.

After it was reported, in late September 2003, that the CIA had referred the matter of the leak of Valerie Plame Wilson's CIA identity to the Justice Department, McClellan repeatedly declared to reporters that no one in the White House, and in particular neither Karl Rove nor Scooter Libby, had been involved in the Plame leak. Further, McClellan pledged that if anyone had been involved in the leak, the President would fire them. Of course, it later turned out that the entire campaign to smear Plame's husband, former Amb. Joe Wilson, a critic of the Administration's Iraq War policy, had been orchestrated out of Cheney's office.

Now, in What Happened, to be published in April 2008, McClellan writes:

"The most powerful leader in the world had called upon me to speak on his behalf and help restore credibility he lost amid the failure to find weapons of mass destruction in Iraq. So I stood at the White House briefing room podium in front of the glare of the klieg lights for the better part of two weeks and publicly exonerated two of the senior-most aides in the White House: Karl Rove and Scooter Libby.

"There was one problem. It was not true.

"I had unknowingly passed along false information. And five of the highest ranking officials in the administration were involved in my doing so: Rove, Libby, the Vice President, the President's chief of staff, and the President himself."

This excerpt from McClellan's book has just been posted on the publisher's website, and given wide coverage in the news media.

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