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From Volume 8, Issue 11 of EIR Online, Published Mar. 17, 2009

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Tony Blair Burns Washington
by Laurence Hecht

March 13—
U.S. President Barack Obama's presentation of DVD copies of {Psycho} and {ET} to visiting British Prime Minister Gordon Brown suggests, that the President has a rather clear understanding of the British Empire's threat to our United States at this time. President Obama is no Harry S Truman. The President's refusal to fly the British flag at the meeting, his cancellation of what the Prime Minister had hoped would be a proposed ceremonial press conference, and the return to the Washington British Embassy of a bust of the Winston Churchill beloved of Harry Truman, are clear evidence of the President's insight into the character of his British visitor's assignment.

In contrast to the President's dignified posture, the behavior of some Democratic Party leaders was disgusting: the way in which some Senate Democrats and others fawned upon former Prime Minister Tony Blair, whose lies had plunged the U.S.A. into a long wasting war in Southwest Asia....

In-Depth articles from EIR, Vol. 36, No. 11
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This Week's Cover


  • The British Empire's Fascism Stalks America
    The last time our nation faced economic collapse was during the Great Depression, when we were saved by Franklin Roosevelt, who took on the 'economic royalists,' and defeated fascism, both in the United States and abroad. FDR's New Deal not only revived the economy, but it reestablished control over the Wall Street financiers. FDR did not just take on Wall Street, however: He took on the British Empire.

World News

Yiddish Renaissance

U.S. Economic/Financial News

Madoff Money Laundered Through London and Caymans

March 13 (EIRNS)—Bernard Madoff pleaded guilty on March 12 to, among other crimes, "international money laundering, related to transfer of funds between [Madoff's] New York-based brokerage operation and [his] London trading desk," the Associated Press reports.

Madoff, whose $65 billion Ponzi scheme collapsed last December, is reported to have laundered vast sums through his British operations, reportedly with the cooperation of British banks.

Now, as he was sent to prison from a courtroom packed with enraged investors, Madoff is vowing to keep his mouth shut. His life is clearly in danger from more than one angle: On the one hand, the mob rage, as seen in the courtroom, which led the authorities to provide him with a bullet-proof vest for the appearance; and on the other, those financial powers for whom he was a front man in his international Ponzi scheme.

Lee Richards, a receiver for Madoff overseas companies, told a a Federal court in February that he had documented transfers of $194 million from Madoff Securities International—the London office—to Madoff's New York firm last November.

The Serious Fraud office of the U.K. national police is probing the London money laundering, among other Madoff crimes.

The office of New York State Attorney General Andrew Cuomo has subpoenaed records of Madoff cohort J. Ezra Merkin, in connection with the Madoff affair. Merkin steered billions of dollars through the Madoff money funnel from his own hedge funds, such as Ariel, based in the British offshore crime capital, Cayman Islands. Merkin bought Israel's Bank Leumi in 2006, and Merkin's family is closely associated with Madoff in the control of Israel Discount Bank.

California Budget Continues To Unravel

March 13 (EIRNS)—Less than a month after patting himself on the back for achieving what he called an historic budget compromise, Gov. Arnold Schwarzenegger was informed this morning that the deficit hole was not only not plugged, but continues to grow. The budget deal crafted by Arnie—which included massive spending cuts, which devastated the state's social safety net, forced major pay cuts and layoffs on state employees, introduced billions in new taxes, and saddled the state with billions in new borrowing—was supposed to cover a $40-plus billion shortfall. It came after months of haggling among legislators, and passed by the one vote in both the State Senate and Assembly.

Today, the state's budget analyst, Mac Taylor, announced that revenues continue to plunge, because the state's economy is on an accelerated downward collapse. Taylor's office produced a revenue forecast that shows that, at present, revenues have collapsed so far, that there is now an additional shortfall of $8 billion in the current fiscal year—i.e., that the $40 billion in cuts, new taxes, and borrowing is not enough. Taylor warned that even this could grow, while forecasting increased deficits for the budget in fiscal year 2010-11.

Taylor's report confirms Lyndon LaRouche's forecast, as he responded last month to Schwarzenegger's claim that he had succeeded in solving the crisis, by warning that California's economy would continue into free fall, and the would-be Mussolini's latest deal would not last for a month. LaRouche, once again, has been proven to be right. There are legitimate concerns that Schwarzenegger may now move for even more draconian cuts than those in his now-discredited budget compromise.

Senator Shelby: It's Time To Close the Big Banks

March 8 (EIRNS)—Sen. Richard Shelby (R-Ala.), ranking member of the Senate Banking Committee, told ABC-TV host George Stephanopoulos March 8 that the approach of Treasury Secretary Geithner and President Obama would not work. Instead, Shelby said, "I think they've got to close some big banks. They don't want to do it. We're going down the same road Japan was going down."

Asked if he wanted to nationalize the banks, Shelby emphasized, "I don't want to nationalize them. I think we need to close them ... close them down, get them out of business. If they're dead, they ought to be buried. We bury the small banks; we've got to bury some big ones and send a strong message to the market."

When Stephanopoulos brought up the auto companies, Shelby said, "Subsidization of anything for very long never works. The automobile business—those companies, Chrysler, Ford, and General Motors—they're in deep trouble. We know that. I've suggested they go into Chapter 11. That's where they belong. And they could reorganize."

Asked why he was one of the few Republicans who voted for the budget bill, Shelby said, "First of all ... these are a compilation of nine appropriations bills. A lot of people voted for a stimulus bill, a TARP. That's $1.5 trillion. Now they say, 'Oh, we'd better not vote for a $400 billion bill to fund the government.' I think we ought to fund the government and move on."

A Child's Weekly Allowance Could Buy a House in Detroit

March 9 (EIRNS)—Realcomp, a multiple listing service in suburban Detroit, reports that median prices of single-family homes and condominiums plunged more than 49% from February 2008 to last month. Median prices were down 23.3% in Livingston County to $172,000; down 44.6% in Macomb County to $115,000; down 46% in Oakland County to $144,000; down 32% in the St. Clair area to $97,000; down 43.9% in Wayne County to $28,500; and down 42.6% in Detroit to $5,737. That's not a typo.

Some 1,800 homes in metropolitan Detroit are now for sale at less than $10,000, which used to be valued at more than ten times that, according to the Associated Press, which also notes, "In extreme cases, homes are on sale for $1 or less, which has enticed investors to Detroit from as far away as the United Kingdom and Australia."

Global Economic News

Brown Ridiculed on Defense of British Tax Havens

March 8 (EIRNS)—Even the London Guardian ridicules the hypocrisy of British Prime Minister Gordon Brown's address to the U.S. Congress last week: If Brown opposes banking secrecy, as he told the gullible U.S. Congress, then, says the Guardian, "We shouldn't forget that 11 of the world's 37 'suspect jurisdictions,' as defined by the proposed U.S. anti-tax-dodge law, are inextricably linked to Britain.

"If this Gordon Brown is so opposed on principle to tax evasion, those congressmen might have asked themselves, why did he not as chancellor [of the exchequer] demand transparency from Jersey, the Cayman Islands, Bermuda, and the rest? With Brown in the Treasury, Britain regularly lobbied the UN and EU against moves to bring financial services under great multilateral supervision," the Guardian adds.

There is an estimated $8.2 trillion British pounds of private wealth currently sitting in "tax havens," that would produce £180 billion in lost tax revenues—more than double last year's global aid budget. But, says the Guardian, cracking down on tax havens would serve "an even more profound purpose—to recast the debate on offshore taxation in moral terms. A better expression for tax havens is 'secrecy jurisdictions,' where along with the profits of legal activity, the spoils of fraud, terrorism, drug trafficking and plunder ... are hidden. That is the company global businesses keep when they operate offshore ... It should be a goal of G20 leaders meeting in April to begin negotiating a universal convention on transparency in accounting for profits—and paying tax on them—in the jurisdiction where they are earned."

United States News Digest

U.S.-Mexico Cooperation Pressed in Congress

March 13 (EIRNS)—Administration witnesses and Congressmen alike emphasized at yesterday's Homeland Security Border, Maritime and Global Terrorism Subcommittee hearing on violence on the U.S.-Mexican border, that the U.S. must provide Mexico what help it needs for the war against the drug cartels. And that means the Federal government must shut down the arms-trafficking and cash smuggling from inside the United States, upon which the drug cartels feed.

That tone was markedly different than any such discussions during the Bush era.

Five officials from the Department of Homeland Security with operational responsibility for the border, testified that Mexican official agencies "are hungry" for cooperation with their U.S. counterparts. The witnesses (including holdovers from the Bush Administration) sounded an optimistic note that with the new Homeland Security Secretary Janet Napolitano, there will finally be action.

While no one raised the central strategic issue that both nations face a new opium war run by the British Empire, near the end of the hearing, Rep. Mark Souder (R-Ind.), the ranking member of the subcommittee, went after legalization as folly, citing the London Economist's recent piece advocating that policy, which he warned will have a terrible impact on drug use. The Economist argued that legalization would reduce law enforcement needs, he said, but any country which has backed off from law enforcement has found itself in a much deeper problem.

Obama Repeatedly Invokes Image of Lincoln

Mar. 13 (EIRNS)—Three times this week, President Barack Obama invoked the image of Abraham Lincoln as a President who, despite facing an immediate existential crisis, was oriented towards America's long-term future.

* Yesterday, in a speech to the Business Roundtable, defending his economic policy, Obama said there are times in American history when "even basic financial security has escaped far too many of our citizens. And at these moments, government has stepped in not to supplant private enterprise, but to catalyze it.... That's why we laid down railroads and highways to spur commerce and industry, to stitch this nation together. That's why even in the midst of Civil War, Lincoln launched a transcontinental railway and land grant colleges and the National Academy of Sciences."

* On the same day, Obama delivered a speech at the National Defense University, on the occasion of the dedication of a new academic building, Lincoln Hall. "Today, it is my privilege to join you in dedicating this building to the memory of President Abraham Lincoln. We know, of course, that there are many monuments to Lincoln's memory across this country. His words are written into stately walls, and his image is printed on our currency. His story is taught in our schools, and his name is synonymous with freedom. You and I live in the Union that he saved, and we inherited the progress that he made possible. Yet, despite this far-reaching legacy, it is still—to quote the man himself—'altogether fitting and proper'—that we should set aside this ground and dedicate this hall in his memory, because Lincoln's Presidency was characterized by war, even as his ambition was a just and lasting peace."

* On March 10, Obama spoke to the U.S. Hispanic Chamber of Commerce, on the topic of education. At the outset he talked about the responsibility of seeing the nation through the current difficult times: "I know there are some who believe we can only handle one challenge at a time. And they forget that Lincoln helped lay down the transcontinental railroad and passed the Homestead Act and created the National Academy of Sciences in the midst of Civil War. Likewise, President Roosevelt didn't have the luxury of choosing between ending a depression and fighting a war; he had to do both. President Kennedy didn't have the luxury of choosing between civil rights and sending us to the Moon. And we don't have the luxury of choosing between getting our economy moving now and rebuilding it over the long term."

Pelosi Was Biggest Opponent of Chas Freeman

March 12 (EIRNS)—The Washington Post's lead editorial today names House Speaker Nancy Pelosi as the "most formidable critic" in preventing Chas Freeman from accepting his appointment to head the U.S. Defense Intelligence Council under Director of National Intelligence Adm. Dennis Blair. The British Empire-loving Post's editorial reports that Pelosi was "incensed by [Freeman's] position on dissent in China." Freeman's appointment would have brought a non-British viewpoint to the U.S. intelligence establishment. David Broder's column in the same issue of the Post laments the loss of Freeman's independent viewpoint, and declares, "All of this is now gone, because, as Speaker Nancy Pelosi told Blair, Freeman's views are 'beyond the pale.'"

In addition to being a dupe of the British, said Lyndon LaRouche, Pelosi is an even more boring public speaker than either Gordon Brown or Prince Charles. Pelosi has tremendous vanity, even though she has nothing to be vain about. She doesn't have the grounds for it," LaRouche said. "She is Vanity Unfair."

Freeman withdrew from his appointment on March 10, and issued a devastating attack on the pro-Israel lobby, for trying to make itself the sole arbiter of American policy in the Middle East, especially with regard to Iran. It is apparent that we Americans cannot any longer conduct a serious public discussion or exercise independent judgment about matters of great importance to our country as well as to our allies and friends, Freeman wrote.

Israeli Spying in U.S. Bigger Than Ever

March 11 (EIRNS)—The story of Israeli spying inside the United States, which EIR broke in late 2001, is back, and it's bigger than ever, due to the suppression of any investigation of these espionage operations under the Bush-Cheney Administration. It now turns out that Israeli firms and intelligence agencies were among the biggest beneficiaries of the Bush-Cheney illegal domestic wiretap scheme known as the Terrorist Surveillance Program (TSP). EIR has long contended that the TSP was much bigger than has so far been revealed; the new revelations help to fill out this picture.

The latest disclosures, plus elaboration of the Israeli spy operations which EIR has reported since the late 1990s, are largely contained in two sources: the third book of investigator James Bamford's trilogy on the National Security Agency (NSA), published last October, The Shadow Factory, and an upcoming book on Israeli spying by Christopher Ketcham.

The most significant new information centers on the Israeli role in post-9/11 domestic spying. Israeli-founded firms provide the interface between U.S. telecom traffic and the NSA: Narus in the case of AT&T, and Verint (formerly Comverse) for Verizon; they provide the "splitters" which route a copy of all telecommunications traffic to the NSA and presumably, also to Israel. Bamford says that Narus and Verint maintain close ties to the Mossad, Shin Bet, and the Israeli Defense Forces' Unit 8200 (Israel's equivalent to the NSA), and he notes: "Virtually the entire US telecommunications system is bugged by companies with possible ties to Israel's eavesdropping agency." Bamford describes a third Israeli firm, NICE Systems, as "a major eavesdropper in the US," which showed up in investigations of the Israeli "art students" spy network in 2000-01.

Also still in the game is Amdocs, profiled by EIR in 2001, which provides telephone billing records for at least 90% of the phone calls dialed in the United States. Using data-mining techniques, profilers can discover patterns of telephone usage, which is often more important than listening to the calls themselves. As EIR had earlier reported, Amdocs and other Israeli firms were also implicated in electronic penetration and surveillance of the Clinton White House.

Ibero-American News Digest

Forbes Magazine Glamorizes Sinaloa Cartel Head

March 12 (EIRNS)—Forbes magazine's new list of "The World's Richest People" includes the head of Mexico's Sinaloa drug cartel, Joaquín "El Chapo" Guzmán Loera, as its No. 701, with a net worth of $1 billion.

Guzmán escaped from a Mexican prison in a laundry cart in 2001, days before he was to be extradited to the U.S.

While the U.S. Justice Department announced a successful strike against the Sinaloa cartel, including the arrest of 48 people a few weeks ago, Steven Forbes's magazine responds by glorifying its chief, and listing his occupation as "shipping."

Mexican President Felipe Calderón blasted Forbes' cynical glorification of the drug trade which is killing Mexicans: "I deeply regret that what appears to be a campaign against Mexico is escalating, such that public opinion, and even magazines, are not only attacking and lying about the Mexican situation, but are even exalting criminals, something which, here in Mexico, we consider an apology for crime. But this will not frighten us, or change in the slightest, our firm determination to strengthen the rule of law in Mexico."

Bolivian President: 'Let Them Eat Coca Leaves'

March 11 (EIRNS)—Speaking at the Vienna meeting of the United Nations Commission on Narcotic Drugs (UNCND), Bolivian President Evo Morales explained that he was there on behalf of the "ancient" Andean coca growers and chewers, to protest coca's inclusion on the UN's list of illegal narcotics. Prior to arriving in Vienna, Morales had said he was greatly indebted to the coca leaf, as it had helped him reach the Presidency.

To put it more accurately, it was Morales' ties to coca producers, both in Bolivia and the rest of the Andean region, that won him the support of the Nazi-trained drug kingpin George Soros, which in turn allowed him to win the Presidency. Morales defended Soros's drug legalization scheme long before he became President of Bolivia.

Morales held up a coca leaf, chewed it, and then argued that "just because I'm acullico ["chewing coca"], it doesn't mean I'm drug-dependent. If this were the case, [UNODC head Antonio María] Costa, presiding here, should take me to jail."

Morales said that he expected the Obama Administration would help him to get the UN to exclude coca from the list of illegal narcotics. He concluded by admitting that he had chewed coca for at least ten years, and at the age of 50, "I'm perfectly fine."

LYM to Fernández: 'Be Historic! Go With LaRouche'

March 7 (EIRNS)—"Forget the British—Go with LaRouche" at the upcoming G20 summit in London, was the message that two members of the Argentine LaRouche Youth Movement (LYM) told President Cristina Fernández de Kirchner at a March 6 gathering at the Presidential Palace, for the celebration of International Women's Day.

"Be historic, Cristina. At the G20 forget the British. Gordon Brown is a fascist, and Keynes was too. Listen to LaRouche! We told you, it's LaRouche!" The LYM members were referring to the fact that British Minister of State in the Foreign Office Lord Malloch-Brown, London's point man for the G20 summit, is aggressively courting Argentina to support the agenda of "reforming" the IMF, rather than putting the global monetary system through bankruptcy reorganization, as LaRouche demands.

The President said nothing, then shook hands with the LYM member, and left.

Argentine Agro Producers Threaten President

March 13 (EIRNS)—Argentine farmers are protesting again against President Cristina Fernández de Kirchner, demanding that she rescind all protectionist measures put in place to defend the internal market, such as export taxes. Leaders of the four largest producer organizations—the Rural Society, Agrarian Federation, Coninagro, and Rural Confederations—argue, as they did during their four-month strike in 2008, that the President is hurting the agricultural sector with onerous taxes, and doesn't understand farmers' needs.

In reality, it's the global financial meltdown, combined with the worst drought in 50 years, that have caused the agricultural sector's problems, resulting in sharp declines in this year's production of wheat, corn, rice, and soybeans, among other crops. Fernández de Kirchner has already removed some export taxes, even though this will affect the government's revenue. The decline in speculation-driven commodity prices has made a big dent in farm revenue, as well.

Despite the fact that the producers do not represent a homogenous political grouping, there has been talk for some time of forming a "party of the countryside," looking toward legislative elections now scheduled for June. Taking advantage of the fact that some prominent members of the government's Victory Front congressional bloc have broken with the President, the opposition seeks to deprive Fernández of her legislative majority.

Some have even more ambitious goals. An opinion piece circulated by the "Segunda Republica" group on March 12 argued that Fernández isn't qualified to serve as head of state, but lamented that Argentina's Presidential system is an impediment to easily removing her from office. The author called for the Presidential system to therefore be replaced with a British-style parliamentary system, in which "the Congress is the supreme power," and a President could be removed without causing an "institutional breakdown."

Chilean Workers Demand State-Run Pension System

March 11 (EIRNS)—Chile's CUT labor federation has organized a series of marches, beginning today, and extending over the next several weeks, to protest huge losses in private pension funds, and demand a state-run system. The planned protests will culminate in a nationwide general strike on April 16.

With backing from George P. Shultz, godfather of the George W. Bush government, the fascist Pinochet dictatorship imposed the private pension system on Chileans in 1981. At Shultz's urging, G.W. Bush tried, but failed, to ram that same system down the throats of Americans in 2005.

Chile's $110 billion private pension fund has declined by at least a third in the past year, as a result of huge losses incurred by failed investment in exotic overseas financial instruments. The collapse of insurance giant AIG, along with ING, Metlife, and Principal Financials, constitutes another lethal blow to the private system, as these companies insured tens of thousands of Chile's private pensions. Pension expert Manuel Riesco warns that the private AFP system effectively no longer exists.

Western European News Digest

British Site Hits Malloch-Brown with EIR Charge

March 14 (EIRNS)—The British newspaper UK Column, a 50,000-circulation bi-monthly paper with updates on its website, published an attack on Lord Mark Malloch-Brown by John Morton, linking to EIR's documentation of Malloch-Brown's role as Prime Minister Gordon Brown's hit man to demand an agreement for world bankers' dictatorship at the G20 meeting in London April 2. Another link is provided to the entire 50-page section of the Feb. 22 EIR on Dope, Inc. Titled "Dirty Brown Laundry," the article provoked a heated exchange on the website over the role of Lyndon LaRouche, the Bilderberg Society, and drugs, with some libertarian types crawling out of the woodwork, only to be crushed by Morton as conscious or unconscious agents of the continuing British Opium Wars.

IMF and ECB Impose Fascist Wage Slashing

PARIS, March 8 (EIRNS)—"State Employees: Europe Breaks Taboo on Wages," a front-page article in Le Monde today, reports on how the International Monetary Fund is demanding wage cuts. While some Swedish trade unions have negotiated up to 20% wage reductions on a voluntary basis, in the tradition of Vichy France's Pierre Laval, several governments of Europe—notably Latvia, Hungary, Romania, and Ireland—increasingly under IMF dictatorship, are slashing the wages of state sector workers by up to 15%.

Obama Threatened on British 'Special Relationship'

March 9 (EIRNS)—"The special relationship is a joke, and it isn't funny; Barack Obama should be careful how he treats the British—one day he'll need us," begins a piece by Daily Telegraph columnist Iain Martin. The Americans know that the "special relationship" has become a joke, Martin continues, adding that "we know it and I suspect that they know we know it. Hillary Clinton could not disguise a knowing smirk when she used the words."

For all of Prime Minister Gordon Brown's talk of the need for a global solution to the economic crisis, there is no shared American and British mission, says the pro-Tory Martin. The big issue is the economy. "The first few months of Obama's Presidency are turning into a car crash.... Consequently, his primary concerns are national, rather than international, his time too scarce for Brown's grand visions of global new deals and reformed regulatory structures. And anyway, when he does need to look abroad for economic partners, why would it be to Britain?" Martin suggests that Obama will regard China as more important than London. And beyond that, Brown won't be around that much longer.

French Judge Calls for Investigating Dope, Inc.

PARIS, March 14 (EIRNS)—Philippe Courroye, a French judge and prosecutor of the Nanterre Court, said drug trafficking should be fought by attacking its financial circuits. Since 2000, Courroye has been the prosecutor of "Angolagate," a trial that went after mafia figures such as Charles Pasqua, Jean-Charles Marchiani, and Jean-Christophe Mitterrand for arms sales in Africa.

On March 5, in a TV documentary film on France5 network, Courroye said, "What is interesting is to follow the money circuit, without forgetting that in [French] law there exists the offense of 'non-justification' of financial resources, which allow bringing charges against someone on the basis of a discrepancy between his declared income and his level of lifestyle, if he's in regular contact with people involved in drug trade. There also exists the 'money laundering' aspect, which of course is very important.... Attacking the cash flow is also a way to reach traffickers from an angle they don't expect."

U.K. Scientist: Charles Promotes 'Quackery'

March 10 (EIRNS)—A top British scientist charged today that Prince Charles—currently giving Chicken Little speeches across South America, warning of planetary catastrophe if the human race insists on growing and developing—is promoting "outright quackery." Charles and his advisors appear to be deliberately ignoring science, preferring "to rely on 'make-believe' and superstition, ... financially exploiting the gullible at this time of financial hardship" with "implausible, unproven, and dangerous" arguments, Prof. Edzard Ernst stated.

Ernst, the Peninsula Medical School's professor of complementary medicine, was referring to the Prince's his organic food and plant business, Duchy Originals, which sells a pricey artichoke and dandelion tincture as an aid "to the body's natural elimination processes." (For more on Charles' trip to South America, see this week's EIR, "Charles, Malloch-Brown Out To Hijack G20 Summit for Global Warming Genocide.")

Obama-Sarkozy To Meet at 'Obama Beach'?

PARIS, March 9 (EIRNS)—Advance security teams have arrived in France to prepare a meeting between French President Nicolas Sarkozy and U.S. President Barack Obama. The meeting could take place on April 3, the day before the NATO summit in Strasbourg, France and the neighboring city of Kehl, Germany.

Sarkozy and Obama could hold their first meeting at the Normandy D-Day beaches, and visit a nearby U.S. cemetery, whose land France donated to the United States after the war. The French Foreign Ministry has already nicknamed the meeting "Obama Beach," a pun on Omaha Beach, where American troops landed on June 6, 1944, to free Europe from fascism.

Russia and the CIS News Digest

U.S., Russia Exchange High-Level Delegations

March 15 (EIRNS)—Beyond the March 6 talks between U.S. Secretary of State Hillary Clinton and Russian Foreign Minister Sergei Lavrov in Geneva, a meeting which Lyndon LaRouche termed "highly successful, for its purpose," political and economic delegations from the United States and Russia visited each other's capitals the following week. Former U.S. Senators Gary Hart (D-Colo.) and Chuck Hagel (R-Neb.) were received by President Dmitri Medvedev in Moscow, while Vice President Joe Biden met with a group of Russian business figures, headed by the president of the Russian Union of Industrialists and Entrepreneurs (RUIE), Alexander Shokhin.

Hart and Hagel are co-chairmen of the Commission on United States Policy toward Russia, formed last year. Medvedev told them, "Recently, our relations have been seriously degraded. The signals, which I have received from President Obama, sound positive to me."

The RUIE delegation to Washington was the first of its type in several years. With Shokhin were executives Zakhar Smushkin of Ilim Pulp and Paper, Victor Vekselberg of the Renova holding company, MDM Bank board member Oleg Vyugin, and Russian Railways CEO Vladimir Yakunin. Kommersant business daily of March 14 reported that they met with National Security Council officials and economic aides to President Obama. Biden expressed support for removal of the 1974 Jackson-Vanik restrictions on trade (which concerned Jewish emigration from the Soviet Union), while the RUIE and the U.S. Chamber of Commerce issued a joint statement on upgrading bilateral interaction on economic matters. At a press conference, Shokhin advocated re-establishing a standing commission on U.S.-Russian economic relations.

Kommersant highlighted public remarks by Shokhin, Yakunin, and former Clinton Administration National Security Council director for Russia Toby Gati on the importance of Russian-American dialogue during the global financial and economic crisis. The paper reported, "Yakunin told Kommersant that the Russian delegation had the impression that the formation of the U.S. Administration is not complete, and that it would be premature to count on hearing any final positions from it." He added that there is uncertainty in the United States, as elsewhere, about the ultimate depth of the crisis and how to emerge from it. "But," he said, "they understand the impossibility for any one economy to find a way out of the crisis by itself, and that it would be wrong to concentrate solely on disarmament issues in relations with Russia."

Gati said, according to Kommersant, "It would be very useful for a discussion of economic issues, as well, to develop between Russia and the USA, because so far the main discussions have been on Afghanistan and strategic armaments, but that falls short of being a basis for full-fledged relations."

Ivanov: Russia Is World's Biggest Heroin Consumer

March 11 (EIRNS)—Russia has become the biggest consumer of heroin in the world, Russian Federal Drug Control Service director Victor Ivanov told the press in Moscow on the eve of the Vienna UN Conference on the world drug trade, which he was to address. "In recent years, Russia has not just become massively hooked on Afghan opiates, it has also become the world's absolute leader in the opiate trade and the number one heroin consumer," Ivanov was quoted by the Daily Telegraph. "Drug trafficking has become a key negative factor for demography and a blow to our nation's gene pool ... [and] a challenge to Russia's civilization." Russia has up to 2.5 million drug addicts out of a population of some 140 million, most of the addicts between 18 and 39 years of age.

Ivanov said that the situation is a crisis of national security, and compared it to the mass opium addiction in China in the 19th Century, after British traders forced the drug on the country, the Independent reported today. He said that seizures of heroin in Russia have risen 70%—although, at best, only 20% of drugs trafficked across the long, porous border with Kazakstan are intercepted. The seizure rate is barely 10%, he said.

Ivanov demanded that the drug crop be destroyed by spraying poppy fields and offering farmers incentives to grow other crops. "Ninety percent of those who are addicted to drugs in Russia use Afghan drugs," Ivanov said. "It's a simple equation—if there are no poppies, there is no drug traffic. Thank goodness politicians in the West are beginning to admit the whole war on terror was ill-judged. We've heard Barack Obama and David Miliband come out and say that it was a mistake. The level of Afghan drugs production now is 44 times higher than it was in 2001."

Chatham House Figure Guns for Economic Warfare

March 15 (EIRNS)—James Sherr, who heads the Russia and Eurasia program at the Royal Institute of International Affairs (Chatham House), has issued his latest scenario for a showdown with Russia over energy policy. In his early-2008 "Russia & the West: A Re-assessment," Sherr had berated Western leaders for having underestimated the Russian leadership's assumption that it should have "equal say" with other nations on security issues, and called for exploiting Russian vulnerabilities in the energy sector, to cut Russia down to size.

Sherr's new article appeared in the February 2009 issue of The World Today, under the headline "Final Warning: Europe, Russia, Ukraine and Energy." He emphasized that Ukraine is not financially capable of implementing the terms agreed upon in settlement of its latest gas price dispute with Russia. Second, he argues that Gazprom went into its confrontation with Ukraine, demanding higher prices, from a position of weakness: Gazprom is stuck for revenue because of falling prices, and needs cash for basic operations. The manipulator Sherr wrote that "Russia and Ukraine are incapable of managing this relationship," so the European Union should start intervening. Sherr wants the EU to finance Ukraine's gas purchases, in exchange for establishment of a joint EU-Ukraine commission to essentially take over its dysfunctional energy system.

Gorbachov Joins British Financial Warfare

March 15 (EIRNS)—Erstwhile Soviet President Mikhail Gorbachov, whose career has long featured a special relationship with London, is playing a dubious role in relation to the sensitive issue of Russia's corporate foreign debt. While the Russian Finance Ministry and Central Bank paid down the sovereign state debt over recent years, their policy of supporting the ruble and suppressing inflation by means of high interest rates, pushed Russian corporations to borrow abroad, especially on the London market. This corporate foreign debt now totals over $500 billion, with an estimated $130 billion falling due this year.

The largest holders of this debt are reportedly the Royal Bank of Scotland, HSBC, and Deutsche Bank. The companies involved include flagships of Russian industry, from the state-owned Rosneft oil to Oleg Deripaska's Basic Element, the major owner of Russian Aluminum (Rusal) and Norilsk Nickel. Many of the loans are collateralized with shares in the companies. Last Fall, the Russian government allocated $50 billion, disbursed through the state-owned VEB Bank, to meet the most urgent foreign loan payments. Thus, Rusal received $4.5 billion—which went immediately to pay off a debt to the Royal Bank of Scotland.

Gorbachov's proposal includes two options: 1) hand the collateral to the London lenders, or 2) have the Russian state take over the obligations. In December 2008, Gorbachov, together with several right-wing figures of prominence during the 1990s looting of Russia by London and related international financial interests, launched an anti-crisis initiative, which they billed as "not political." On Jan. 23, the Gorbachov group issued a 19-point action plan on the financial crisis, starting with two points concerning the foreign debt. First, they proposed "a transfer to creditors, including foreign creditors, of ownership stakes in debtor companies [which] will ensure the flow of capital into the country...." In other words, Gorbachov's group is pushing for Russia's core energy and metals companies to be handed to international oligarchs like the Royal Bank of Scotland, as against Russia's home-grown "oligarchs" like Deripaska. As an alternative, the Gorbachov team suggested converting the loans to Russian sovereign debt, "through a system of auctions at which foreign creditors might replace corporate debts with Russian Federation Eurobonds."

Belarusian Parliament's Paper Calls for New Relations with U.S.

March 13 (EIRNS)—The Belarusian daily Narodnya Gazeta, an official publication of the parliament, today published a pair of articles calling for the early re-establishment of normal diplomatic relations with the United States. The two countries' ambassadors were recalled last year, after an escalation of sanctions from the Bush Administration, and Belarusian charges of interference in internal affairs. The first of the two articles was authored by Yuri Tsarik, an analyst from the staff of President Alexander Lukashenka, while a U.S. view was provided by EIR senior editor Jeffrey Steinberg.

Tsarik proposes that Belarus initiate a new agenda for its relations with the United States, explicitly counterposing its potential content to the interest in Belarus shown by George Soros's circles in recent months. He writes that the U.S.A. must be brought into Eurasian infrastructure construction, and that a solution to the world financial crisis is impossible without the United States. The article quickly drew attention in Belarus, and was the subject of an article issued by the Charter 97 opposition group, titled "Authorities Worried about George Soros's Interest in Belarus."

Steinberg, documenting how a neocon clique in the Bush Administration led to the breakdown of U.S.-Belarusian relations, locates their potential renewal in the context of Lyndon LaRouche's call for a four-power initiative by the United States, Russia, China, and India, for a radical change in economic policy worldwide.

Southwest Asia News Digest

AEI's Bolton Says Obama Is 'Bad for Israel'

March 15 (EIRNS)—As EIR documents in this issue ("Amity Shlaes' Not-So-New American Fascism"), the American Enterprise Institute (AEI) got its start as a Hitler/Mussolini-supporting institution, running fascist operations against President Franklin D. Roosevelt. Today, this network is at the center of the attack on President Obama and Secretary of State Hillary Clinton, to destroy their policy shift in Southwest Asia to support a Palestinian state, and to reject the clash of civilizations. This is what blocked Ambassador Chas Freeman's appointment to head the National Intelligence Council.

John Bolton, the AEI wacko who could not attain Senate confirmation as UN ambassador during the Bush Administration, declared in the New York Post that Obama is "bad news for Israel." Why? According to the Israeli ultra-right Arutz Sheva media network, because of the administration's thinking that "Arab-Israeli peace is the key to Mideast stability." Bolton says that Obama and his advisors have "adopted the theory that the overwhelming bulk of other Middle Eastern grievances, wholly or partly, stem from Israel's founding and continued existence." Bolton's evidence for this is the appointment of George C. Mitchell as Mideast envoy, and Clinton's statements supporting a two-state solution that has to be put in place "sooner rather than later."

Arutz Sheva—which has been repeatedly banned in Israel because of its incitement to violence against Palestinians, and has operated as an outlaw offshore radio station—has a statement attacking Clinton for her "pressure on Israel." It quotes Morton Klein, the head of Zionists of America (Jabotinskyite fascists); Mort Zuckerman, owner of US News and World Report and the New York Daily News; New York City Council member Dov Hikind, former member of the Jewish Defense League terrorist group; and the Unity Coalition for Israel, run by the Christian Zionists and settler terrorists, which is launching a letter-writing campaign against Clinton.

These Israeli fascists (who supported former Prime Minister Yitzhak Rabin's assassin, Yigal Amir) warn that "the United States continues to drop hints that it will accept nothing less than a Palestinian state aside Israel west of the Jordan River," calling this a "dangerous option."

They were especially incensed about an interview of Clinton on a Palestinian TV program for "teens," in which she said, when asked what she would do if her daughter had been born under an occupation, "Well, I would do what so many parents here in the West Bank and in Gaza do. I would love her. I would get the best education I could for her. I would never give up on the dream of a Palestinian state."

LaRouche on Tariq Aziz Prosecution: 'Enough Is Enough!'

March 12 (EIRNS)—Lyndon LaRouche declared, "Enough is enough!" in response to the March 11 sentencing of former Iraqi Foreign Minister Tariq Aziz to 15 years in prison for "crimes against humanity."

LaRouche stated: "Tariq Aziz played a very good role in Iraq. He played a role as a servant of his government. He didn't do anything I know of that was beyond serving his government. Are we going to hang people because they served the Bush Administration? It would be inappropriate to have a trial to hang Bush, who probably committed greater crimes than Tariq Aziz did. What does this mean for both Bush Presidents? Let's get out of the Bushes. The prosecution of Tariq Aziz sounds like a Bush-League operation."

The prosecution argued that Aziz was guilty, solely because he sat on the Revolutionary Council.

Syrian, Egyptian, Saudi Leaders Meet

March 11 (EIRNS)—Syrian President Bashar al-Assad and Egyptian President Hosni Mubarak are being hosted today by King Abdullah of Saudi Arabia, in the latest effort to re-establish unity within the Arab camp following the Gaza War. This summit is preparing for an Arab League summit in Doha on March 30. Syrian sources report that the Obama Administration will be waiting for important signals to come from that summit.

Obama Will Make State Visit to Turkey

March 9 (EIRNS)—U.S. President Barack Obama will be making an official visit to Turkey in April, as was announced while Secretary of State Hillary Clinton was in Ankara. It will be the first bilateral state visit by President Obama, as opposed to visits in the context of international summits, including the G20 in London, the NATO summits in Germany and France, and the EU meeting in the Czech Republic.

According to senior Obama Administration sources quoted by the Washington Post, the visit will demonstrate the importance of bilateral relations between Turkey and the United States. "This visit is not about healing some EU-NATO rift. This is about underscoring our deep alliance with Turkey, that it is an important part of Europe and that it is an important voice in the Muslim world."

Although a date has not been set, Zaman reports that it is hoped that Obama will attend the meeting of the United Nations-sponsored Alliance of Civilizations on April 6-7.

Although Obama said recently that he would visit a Muslim country within the first 100 days of his administration, Clinton said that Turkey is not that country. Nor is U.S. using the Islamophobic phrase "moderate Islamic country," coined by the Bush Administration, and which the Turkish government rejects, since Turkey is a secular state.

Clinton told CNNTurk.com, "We support the regional and global leadership role Turkey plays in major issues." She discussed Turkey's potential role in helping to mediate Israeli-Palestinian and Israel-Syrian peace talks. The forthcoming Obama visit, she said, is a "reflection of the value we place on our friendship with Turkey."

Turkey had been making efforts throughout the region to mediate conflicts, not only the Arab-Israeli conflict, but also those involving Georgia-Russia and Azerbaijan-Armenia.

Turkey Can Play Role in Opening U.S./Iran Channel

March 10 (EIRNS)—Turkish Foreign Minister Ali Babacan and President Abdullah Gul will be in Iran March 14-15, amid reports that Turkey could help create channels between the United States and Iran.

U.S. Secretary of State Hillary Clinton's comments that the U.S. would ask Turkey to help push forward President Barack Obama's desire to engage Iran, followed earlier efforts by Iran to seek Turkey's assistance in talks with the United States. Turkey has direct access to Iranian President Mahmoud Ahmadinejad and also to spiritual leader Ayatollah Ali Khamenei, both of whom Gul will be meeting when he is in Tehran for a summit of the Economic Cooperation Organization. Babacan will meet with Iranian Foreign Minister Manoucher Mottaki.

Although the Turkish leaders will not be delivering any letters from Obama or Clinton, they will encourage Iran to seize the opportunity to settle the nuclear issue through direct engagement with Washington. Babacan also said they would brief Clinton during the NATO summit on April 3-4, and meet with Obama when he visits Turkey later that month. Babacan added that Turkey is ready to serve as an official mediator, if asked by Iran and the U.S.

Asia News Digest

U.S.-China Collaboration in Afghanistan

March 11 (EIRNS)—Although the tiff between the United States and China in the South China Sea has caught the headlines of all major media, there is an area of consequence where these two nations are cooperating that remains virtually unreported.

In Afghanistan's Wardak province, in the mountains south of Kabul, the U.S. Army is providing the security that will enable China to develop one of the world's largest unexploited deposits of copper needed for its growing manufacturing sector. U.S. troops set up bases in February along a dirt track that a Chinese firm is paving, as part of a $3 billion project to gain access to the copper reserves. Some troops made camp outside a compound built for the Chinese road crews. American forces also have expanded their presence in neighboring Logar province, where the Aynak deposit is.

The site was discovered by an Afghan-Soviet team in 1974. However, in the face of armed resistance during the 1979-89 Soviet occupation of Afghanistan, the Soviets were never able to develop the site.

Washington claims the U.S. deployment was not intended to protect the Chinese investment, the largest in Afghanistan's history, but to strangle Taliban infiltration into Kabul. But if the mission provides the security that a project to revive Afghanistan's economy needs, the synergy will be welcome, Washington says.

Pakistan, Iran Join in Drug Crackdown, British Troops Spared

March 11 (EIRNS)—Officials at the Vienna-based UN Office on Drugs and Crime (UNODC) told AP that Iran, Afghanistan, and Pakistan carried out their first joint counter-narcotics operation on March 8, pooling intelligence to arrest suspects and seize drugs, in an unprecedented show of cooperation. "We are waiting anxiously for the results in terms of arrests and seizures," said UNODC chief Antonio Maria Costa, hailing the operation for sending "a very important political message" to drug traffickers.

According to Kaveh L Afrasiabi, writing for the Asia Times, U.S. Secretary of State Hillary Clinton has urged Iran to attend a "big tent" conference on Afghanistan on March 31. With characteristic candor, she has cited Tehran's problems with the Afghan drugs smuggled into Iran, as one of several reasons why the Iranians should participate in the UN-sponsored event. Iran has announced it will accept the invitation.

Tehran's government estimates that 2,500 tons of opium enter the country from Afghanistan each year, 700 tons of which is destined for consumption in Iran, and that on average the Iranian police seize 500 tons every year.

Singapore Is Caught in UBS Crisis

March 12 (EIRNS)—Singapore, under the direction of its "Minister Mentor" Lee Kuan Yew, has placed itself in the line of fire of the Obama Administration's campaign to break the "secret bank accounts" policies in Switzerland which have helped thousands of people criminally avoid paying taxes. Singapore's Government Investment Corporation (GIC), which, like everything in Singapore, takes its lead from former Prime Minister Lee (known in London as the "best bloody Englishman east of the Suez"), sank well over $10 billion into the leading Swiss oligarchical institution, UBS, with the intention of becoming the "Gnomes of Asia," where newly rich Chinese and others could hide their money safely from prying government eyes.

Now, not only is Singapore losing money as UBS is going down with all the other banks, but Singapore is also on the hot seat. As Asia Sentinel (a British intelligence outfit) wrote on March 9: "The relationship with this high-powered Swiss instrument of tax-avoidance and money-laundering goes deeper. UBS is the most important foreign player in Singapore's mostly successful promotion of itself as the wealth management center of Asia." To show the moneyed class that it could be trusted with their money and their secrets, the GIC, in 2007, "became the privileged occupant of one of the top ten colonial era buildings in all of Singapore—Command House, the former residence of British military commanders," including Adm. Lord Louis Mountbatten, who ran the British re-occupation of the Asian colonies after the death of Franklin Roosevelt.

Now, the U.S. has forced UBS to pay fines after being caught advising Americans on how to cheat on their taxes, and the bank is fighting to prevent the United States from opening up 52,000 secret accounts. The Sentinel notes: "If UBS eventually loses in U.S. courts, it will either have to break its promised secrecy on a massive scale, or have its whole U.S. operations shut down."

Drugs Flooding Xinjiang

March 11 (EIRNS)—Regional authorities in Xinjiang region in western China cannot cope with the fast-rising drug trafficking from the bordering "Golden Crescent" areas of Afghanistan, Pakistan, and Iran, regional Gov. Nur Bekri said at a press conference during the National People's Congress session in Beijing yesterday. "We have asked [Beijing] for the deployment of more security forces along the border. The current number is simply not enough," Bekri said. He added that local police dealt with 1,563 drug-related cases last year, and at least 50% of the drugs came from the Golden Crescent, while in the capital city of Urumqi, 70% of the drugs come from this area.

"While traffickers are trying to make Xinjiang a transit point, consumption within the region is increasing as well," Bekri said. HIV infection, at almost 25,000 cases, is now at the highest rate in all China. Overall, the security situation in Xinjiang is "more severe" than in earlier years, he said.

Minister: Chinese Agriculture Faces Enormous Problems

March 12 (EIRNS)—The agricultural population of China, some 800 million people, is facing an "unusually complicated and severe" economic situation due to the world crisis, Vice Minister of Agriculture Wei Chao'an said at a press conference in Beijing.

Farmers' incomes, which are barely at subsistence level as a national average, are being further squeezed by falling agricultural prices, starting last September, Wei said. "The employment outlook for migrant workers cannot be optimistic for the future, which will exacerbate the difficulty more than ever to keep rural income growing." He said that in some regions, unemployment for migrant workers is running as high as 25-33%.

Some 4.78 million more rural workers got jobs in factories or other urban workplaces in 2008, Wei said. This was an increase, but the growth was 2.5% slower than in 2007, and the slowest growth in new jobs for migrants since 2000.

The international market right now has an "excessive supply," due to good harvests last year, Wei said, but falling consumption of biofuels. While prices for agricultural products are falling, the huge rural population is also losing alternative employment, as the labor-intensive small and medium-sized enterprises in the coastal regions go under. Agriculture Ministry surveys are showing that some 10% of migrant workers have returned to their home towns after losing their jobs—which would be some 20 million people. Wei warned that the situation will get even more serious in May or June.

The growth of agricultural exports has also slowed down, he said, both in volume and value for some products.

Wei said that government policy is also committed to keeping China 95% self-sufficient in grain production. Currently, China "can surely secure the country's food security and maintain grain prices at the home market, as our state-owned grain depots have much bigger stockpiles than last year, with the total amount much higher than the international level of grain reserve."

Africa News Digest

ICC Seeks To Add Genocide Charge Against Sudan's President

March 14 (EIRNS)—Luis Moreno-Ocampo, prosecutor of the International Criminal Court (ICC) which is the creation of George Soros and Britain's Mark Malloch Brown, is not happy that his primary assignment of getting Sudanese President Omar al-Bashir indicted for genocide, was not included by the three-judge ICC panel in their call for the arrest of Sudan al-Bashir. Moreno-Ocampo has requested permission to appeal the judges' decision, claiming that they had set the bar too high, so that the charge could not be included in the warrant for Bashir's arrest.

Moreno-Ocampo has been acting not like a prosecutor, but an activist, broadcasting unsubstantiated propaganda that echoes the activists who want to bring down the nation of Sudan, saying that Bashir masterminded a campaign to eliminate African tribes in Darfur.

Sudan Catholic Church Hits ICC Attack on Bashir

March 12 (EIRNS)—Bishop Rudolf Deng Majak of Wau, president of the Sudan Catholic Bishops Conference, said that to arrest President Omar al-Bashir, as is demanded by the International Criminal Court (ICC), will not bring peace to Sudan, but only create more tension. He said that Sudan needs genuine reconciliation among its people. Deng released the statement yesterday, in which he called the international community to task: "What we need is more sincerity from the leaders and the rebels and a more serious dedication from the international community to save the Sudan."

The Auxiliary Bishop of Khartoum, Bishop Daniel Adwok Kur, said it was crucial to see that now was not the time to consider a change of leader, since it could derail the fragile peace process between the government and the South of Sudan. "Removing him could throw obstacles in the path to peace—including in the south of the country."

The peace agreement with the South was worked out by President Bashir after a factional brawl against those in the leadership of his party who opposed a settlement to the 40-year civil war, which claimed more than 2 million lives.

The bishops' comments and statements were reported by several Catholic news and mission organizations.

Neocons Gloat: ICC Will Destroy Sudan

March 11 (EIRNS)—The arrest warrant issued by the ICC against President Bashir is applauded as a "strategic move with profound geopolitical implications," by the Foundation for the Defense of Democracies, a neoconservative think tank.

In a statement published March 6, the Foundation gloats that the arrest warrant "accelerates the ongoing disintegration of the Sudanese state." The statement argues: "There is now almost no reasonable expectation that [this year's scheduled] general elections ... will actually take place," and "South Sudan [may] go its own way, taking with it some 90% of Sudan's proven oil reserves. Hence, when the election in July fails to take place, most South Sudanese are likely to draw their own conclusions and the regional government may well proceed to a unilateral declaration of independence.... Whether the secession takes place peacefully or a new north-south conflict erupts, the practical result will be the same: the rulers in Khartoum will be deprived of [these oil] revenues...."

In 2004, the Foundation for the Defense of Democracies hosted the inauguration of a new Committee on the Present Danger, reviving the Cold War-era CPD to try to drive the Bush-Cheney preventive war doctrine toward permanent war.

J. Peter Pham, the neoconservative author of the Foundation's March 6 statement (entitled "ICC Arrest Warrant for Sudan's Bashir Has Both Humanitarian and Strategic Consequences"), is vice president of the Association for the Study of the Middle East and Africa, whose chairman is British imperial strategist Bernard Lewis; Anglo-American Pinochetista George P. Shultz is on the board.

Arabic Media Coverage of LaRouche on Sudan Crisis

March 9 (EIRNS)—Coverage of Lyndon LaRouche's views on the fight between Sudan and the ICC continues in the Arabic media, especially in Sudan-related websites.

The coverage is concentrated on two issues: 1) LaRouche's statement that the Obama Administration and Secretary of State Hillary Clinton should not tolerate the ICC/British operation; and 2) George Soros's involvement in the creation and financing of the ICC.

In spite of President Bashir's focussing in his speeches on the British Empire as the source of evil in Africa, there is little understanding in the media of the present British involvement. One such example is the spin put on the story in the Saudi daily Asharq al-Awsat, the largest Saudi-financed international Arabic newspaper. Columnist Zayn al-Abidin al-Rikabi, who had written positively about LaRouche in previous years, cites LaRouche on the "Nazi-trained billionaire Soros" as one of the most important hands behind the ICC operation. However, al-Rikabi put the issue not in the framework of what LaRouche has defined as the British Empire, but in the "Zionist" context, claiming that Israeli officials have said that the Darfur question is strategically important for Israel.

Apart from the spin, this article shows the enormous presence LaRouche has had in recent days in the discussion. Asharq al-Awsat had boycotted LaRouche for many months.

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