Torture Memos: Inquiry Suggests No Prosecutions

The New York Times reports:

An internal Justice Department inquiry has concluded that Bush administration lawyers committed serious lapses of judgment in writing secret memorandums authorizing brutal interrogations but that they should not be prosecuted, according to government officials briefed on its findings.

The report by the Office of Professional Responsibility, an internal ethics unit within the Justice Department, is also likely to ask state bar associations to consider possible disciplinary action, which could include reprimands or even disbarment, for some of the lawyers involved in writing the legal opinions, the officials said.

The conclusions of the 220-page draft report are not final and have not yet been approved by Attorney General Eric H. Holder Jr. The officials said that it is possible that the final report might be subject to further revision but that they did not expect major alterations in its main findings or recommendations.

The findings, growing out of an inquiry that started in 2004, would represent a stinging rebuke of the lawyers and their legal arguments.

But they would stop short of the criminal referral sought by some human rights advocates, who have suggested that the lawyers could be prosecuted as part of a criminal conspiracy to violate the anti-torture statute. President Obama has said the Justice Department would have to decide whether the lawyers who authorized the interrogation methods should face charges, while pledging that interrogators would not be investigated or prosecuted for using techniques that the lawyers said were legal.

The draft report is described as very detailed, tracing e-mail messages between the Justice Department lawyers and officials at the White House and the Central Intelligence Agency. Among the questions it is expected to consider is whether the memos were an independent judgment of the limits of the federal anti-torture statute or were deliberately skewed to justify the use of techniques proposed by the C.I.A.

At issue is the question of whether the lawyers acted ethically and competently in writing a series of Justice Department legal opinions from 2002 to 2007.

The opinions permitted the Central Intelligence Agency to use a number of methods that human rights groups and legal experts have condemned as torture, including waterboarding, wall-slamming and shackling for hours in a standing position. The opinions allowed many of these practices to be used repeatedly and in combination.

The main targets of criticism are John Yoo, Jay S. Bybee and Steven G. Bradbury, who, as senior officials of the department’s Office of Legal Counsel, were principal authors of the opinions.

It was unclear whether all three would be the subject of bar association referrals. One person who saw the report said it did not recommend bar action against Mr. Bradbury.

Mr. Bradbury, and lawyers for Mr. Yoo, now a law professor at Berkeley, and for Mr. Bybee, now a federal appeals court judge in Nevada, all declined to comment Tuesday, saying Justice Department rules require confidentiality for ethics reviews.

The work of other lawyers in the counsel’s office was also questioned in the report, the officials said, but none are believed to be the subject of disciplinary recommendations. The report reaches no conclusions about the role of lawyers at the White House or the C.I.A. because the jurisdiction of the ethics unit does not extend beyond the Justice Department.

The draft report on the interrogation opinions was completed in December and provoked controversy inside the Bush administration Justice Department. But criticism of the legal work in the memos has intensified since last month when the Obama administration disclosed one previously secret opinion from 2002, drafted mainly by Mr. Yoo and signed by Mr. Bybee, and three from 2005, signed by Mr. Bradbury, which for the first time described the coercive interrogation methods in detail.

Michael B. Mukasey, attorney general when the draft report was first completed, was said by colleagues to have been critical of its quality and upset over its scathing conclusions. He wrote a 10-page rebuttal to its findings, and, in his farewell speech to employees, warned against second-guessing the legal work of the department’s lawyers.

Several legal scholars have remarked that in approving waterboarding, the near-drowning method Mr. Obama and his aides have described as torture, the Justice Department lawyers did not cite cases in which the United States government previously prosecuted American law enforcement officials and Japanese World War II interrogators for using the procedure.

In a letter on Monday, the Justice Department advised two Democratic senators on the Judiciary committee, Richard J. Durbin of Illinois and Sheldon Whitehouse of Rhode Island, that the former department lawyers who wrote the opinions had until May 4 to submit written appeals to the findings.

The letter, written by Ronald Weich, an assistant attorney general, also said the report had been given to the C.I.A. for review and declassification, and some officials said they expected a version to be made public, probably late this month.

Mr. Durbin and Mr. Whitehouse, who have criticized the Bush administration’s interrogation policies, have repeatedly demanded the release of the report. Mr. Whitehouse is scheduled to hold a hearing on May 13, to examine issues related to the report.

The professional responsibility office first began examining the actions of the lawyers nearly five years ago. Recently, Mr. Holder named Mary Patrice Brown, a senior federal prosecutor in Washington to head the office, moving its longtime chief, H. Marshall Jarrett, to another job within the Justice Department.

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The Quiet Coup

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

In The Atlantic Monthly, Simon Johnson writes:

One thing you learn rather quickly when working at the International Monetary Fund is that no one is ever very happy to see you. Typically, your “clients” come in only after private capital has abandoned them, after regional trading-bloc partners have been unable to throw a strong enough lifeline, after last-ditch attempts to borrow from powerful friends like China or the European Union have fallen through. You’re never at the top of anyone’s dance card.

The reason, of course, is that the IMF specializes in telling its clients what they don’t want to hear. I should know; I pressed painful changes on many foreign officials during my time there as chief economist in 2007 and 2008. And I felt the effects of IMF pressure, at least indirectly, when I worked with governments in Eastern Europe as they struggled after 1989, and with the private sector in Asia and Latin America during the crises of the late 1990s and early 2000s. Over that time, from every vantage point, I saw firsthand the steady flow of officials—from Ukraine, Russia, Thailand, Indonesia, South Korea, and elsewhere—trudging to the fund when circumstances were dire and all else had failed.

Every crisis is different, of course. Ukraine faced hyperinflation in 1994; Russia desperately needed help when its short-term-debt rollover scheme exploded in the summer of 1998; the Indonesian rupiah plunged in 1997, nearly leveling the corporate economy; that same year, South Korea’s 30-year economic miracle ground to a halt when foreign banks suddenly refused to extend new credit.

But I must tell you, to IMF officials, all of these crises looked depressingly similar. Each country, of course, needed a loan, but more than that, each needed to make big changes so that the loan could really work. Almost always, countries in crisis need to learn to live within their means after a period of excess—exports must be increased, and imports cut—and the goal is to do this without the most horrible of recessions. Naturally, the fund’s economists spend time figuring out the policies—budget, money supply, and the like—that make sense in this context. Yet the economic solution is seldom very hard to work out.

No, the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis.

Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise.

In Russia, for instance, the private sector is now in serious trouble because, over the past five years or so, it borrowed at least $490 billion from global banks and investors on the assumption that the country’s energy sector could support a permanent increase in consumption throughout the economy. As Russia’s oligarchs spent this capital, acquiring other companies and embarking on ambitious investment plans that generated jobs, their importance to the political elite increased. Growing political support meant better access to lucrative contracts, tax breaks, and subsidies. And foreign investors could not have been more pleased; all other things being equal, they prefer to lend money to people who have the implicit backing of their national governments, even if that backing gives off the faint whiff of corruption.

But inevitably, emerging-market oligarchs get carried away; they waste money and build massive business empires on a mountain of debt. Local banks, sometimes pressured by the government, become too willing to extend credit to the elite and to those who depend on them. Overborrowing always ends badly, whether for an individual, a company, or a country. Sooner or later, credit conditions become tighter and no one will lend you money on anything close to affordable terms.

The downward spiral that follows is remarkably steep. Enormous companies teeter on the brink of default, and the local banks that have lent to them collapse. Yesterday’s “public-private partnerships” are relabeled “crony capitalism.” With credit unavailable, economic paralysis ensues, and conditions just get worse and worse. The government is forced to draw down its foreign-currency reserves to pay for imports, service debt, and cover private losses. But these reserves will eventually run out. If the country cannot right itself before that happens, it will default on its sovereign debt and become an economic pariah. The government, in its race to stop the bleeding, will typically need to wipe out some of the national champions—now hemorrhaging cash—and usually restructure a banking system that’s gone badly out of balance. It will, in other words, need to squeeze at least some of its oligarchs.

Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique—the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large.

Eventually, as the oligarchs in Putin’s Russia now realize, some within the elite have to lose out before recovery can begin. It’s a game of musical chairs: there just aren’t enough currency reserves to take care of everyone, and the government cannot afford to take over private-sector debt completely.

So the IMF staff looks into the eyes of the minister of finance and decides whether the government is serious yet. The fund will give even a country like Russia a loan eventually, but first it wants to make sure Prime Minister Putin is ready, willing, and able to be tough on some of his friends. If he is not ready to throw former pals to the wolves, the fund can wait. And when he is ready, the fund is happy to make helpful suggestions—particularly with regard to wresting control of the banking system from the hands of the most incompetent and avaricious “entrepreneurs.”

Of course, Putin’s ex-friends will fight back. They’ll mobilize allies, work the system, and put pressure on other parts of the government to get additional subsidies. In extreme cases, they’ll even try subversion—including calling up their contacts in the American foreign-policy establishment, as the Ukrainians did with some success in the late 1990s.

Many IMF programs “go off track” (a euphemism) precisely because the government can’t stay tough on erstwhile cronies, and the consequences are massive inflation or other disasters. A program “goes back on track” once the government prevails or powerful oligarchs sort out among themselves who will govern—and thus win or lose—under the IMF-supported plan. The real fight in Thailand and Indonesia in 1997 was about which powerful families would lose their banks. In Thailand, it was handled relatively smoothly. In Indonesia, it led to the fall of President Suharto and economic chaos.

From long years of experience, the IMF staff knows its program will succeed—stabilizing the economy and enabling growth—only if at least some of the powerful oligarchs who did so much to create the underlying problems take a hit. This is the problem of all emerging markets.

Becoming a Banana Republic
In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.

But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.


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Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

The Wall Street–Washington Corridor
Of course, the U.S. is unique. And just as we have the world’s most advanced economy, military, and technology, we also have its most advanced oligarchy.

In a primitive political system, power is transmitted through violence, or the threat of violence: military coups, private militias, and so on. In a less primitive system more typical of emerging markets, power is transmitted via money: bribes, kickbacks, and offshore bank accounts. Although lobbying and campaign contributions certainly play major roles in the American political system, old-fashioned corruption—envelopes stuffed with $100 bills—is probably a sideshow today, Jack Abramoff notwithstanding.

Instead, the American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.

These personal connections were multiplied many times over at the lower levels of the past three presidential administrations, strengthening the ties between Washington and Wall Street. It has become something of a tradition for Goldman Sachs employees to go into public service after they leave the firm. The flow of Goldman alumni—including Jon Corzine, now the governor of New Jersey, along with Rubin and Paulson—not only placed people with Wall Street’s worldview in the halls of power; it also helped create an image of Goldman (inside the Beltway, at least) as an institution that was itself almost a form of public service.

Wall Street is a very seductive place, imbued with an air of power. Its executives truly believe that they control the levers that make the world go round. A civil servant from Washington invited into their conference rooms, even if just for a meeting, could be forgiven for falling under their sway. Throughout my time at the IMF, I was struck by the easy access of leading financiers to the highest U.S. government officials, and the interweaving of the two career tracks. I vividly remember a meeting in early 2008—attended by top policy makers from a handful of rich countries—at which the chair casually proclaimed, to the room’s general approval, that the best preparation for becoming a central-bank governor was to work first as an investment banker.

A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true. Alan Greenspan’s pronouncements in favor of unregulated financial markets are well known. Yet Greenspan was hardly alone. This is what Ben Bernanke, the man who succeeded him, said in 2006: “The management of market risk and credit risk has become increasingly sophisticated. … Banking organizations of all sizes have made substantial strides over the past two decades in their ability to measure and manage risks.”

Of course, this was mostly an illusion. Regulators, legislators, and academics almost all assumed that the managers of these banks knew what they were doing. In retrospect, they didn’t. AIG’s Financial Products division, for instance, made $2.5 billion in pretax profits in 2005, largely by selling underpriced insurance on complex, poorly understood securities. Often described as “picking up nickels in front of a steamroller,” this strategy is profitable in ordinary years, and catastrophic in bad ones. As of last fall, AIG had outstanding insurance on more than $400 billion in securities. To date, the U.S. government, in an effort to rescue the company, has committed about $180 billion in investments and loans to cover losses that AIG’s sophisticated risk modeling had said were virtually impossible.

Wall Street’s seductive power extended even (or especially) to finance and economics professors, historically confined to the cramped offices of universities and the pursuit of Nobel Prizes. As mathematical finance became more and more essential to practical finance, professors increasingly took positions as consultants or partners at financial institutions. Myron Scholes and Robert Merton, Nobel laureates both, were perhaps the most famous; they took board seats at the hedge fund Long-Term Capital Management in 1994, before the fund famously flamed out at the end of the decade. But many others beat similar paths. This migration gave the stamp of academic legitimacy (and the intimidating aura of intellectual rigor) to the burgeoning world of high finance.

As more and more of the rich made their money in finance, the cult of finance seeped into the culture at large. Works like Barbarians at the Gate, Wall Street, and Bonfire of the Vanities—all intended as cautionary tales—served only to increase Wall Street’s mystique. Michael Lewis noted in Portfolio last year that when he wrote Liar’s Poker, an insider’s account of the financial industry, in 1989, he had hoped the book might provoke outrage at Wall Street’s hubris and excess. Instead, he found himself “knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share. … They’d read my book as a how-to manual.” Even Wall Street’s criminals, like Michael Milken and Ivan Boesky, became larger than life. In a society that celebrates the idea of making money, it was easy to infer that the interests of the financial sector were the same as the interests of the country—and that the winners in the financial sector knew better what was good for America than did the career civil servants in Washington. Faith in free financial markets grew into conventional wisdom—trumpeted on the editorial pages of The Wall Street Journal and on the floor of Congress.

From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:

• insistence on free movement of capital across borders;

• the repeal of Depression-era regulations separating commercial and investment banking;

• a congressional ban on the regulation of credit-default swaps;

• major increases in the amount of leverage allowed to investment banks;

• a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;

• an international agreement to allow banks to measure their own riskiness;

• and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation.

The mood that accompanied these measures in Washington seemed to swing between nonchalance and outright celebration: finance unleashed, it was thought, would continue to propel the economy to greater heights.

America’s Oligarchs and the Financial Crisis
The oligarchy and the government policies that aided it did not alone cause the financial crisis that exploded last year. Many other factors contributed, including excessive borrowing by households and lax lending standards out on the fringes of the financial world. But major commercial and investment banks—and the hedge funds that ran alongside them—were the big beneficiaries of the twin housing and equity-market bubbles of this decade, their profits fed by an ever-increasing volume of transactions founded on a relatively small base of actual physical assets. Each time a loan was sold, packaged, securitized, and resold, banks took their transaction fees, and the hedge funds buying those securities reaped ever-larger fees as their holdings grew.

Because everyone was getting richer, and the health of the national economy depended so heavily on growth in real estate and finance, no one in Washington had any incentive to question what was going on. Instead, Fed Chairman Greenspan and President Bush insisted metronomically that the economy was fundamentally sound and that the tremendous growth in complex securities and credit-default swaps was evidence of a healthy economy where risk was distributed safely.

In the summer of 2007, signs of strain started appearing. The boom had produced so much debt that even a small economic stumble could cause major problems, and rising delinquencies in subprime mortgages proved the stumbling block. Ever since, the financial sector and the federal government have been behaving exactly the way one would expect them to, in light of past emerging-market crises.

By now, the princes of the financial world have of course been stripped naked as leaders and strategists—at least in the eyes of most Americans. But as the months have rolled by, financial elites have continued to assume that their position as the economy’s favored children is safe, despite the wreckage they have caused.

Stanley O’Neal, the CEO of Merrill Lynch, pushed his firm heavily into the mortgage-backed-securities market at its peak in 2005 and 2006; in October 2007, he acknowledged, “The bottom line is, we—I—got it wrong by being overexposed to subprime, and we suffered as a result of impaired liquidity in that market. No one is more disappointed than I am in that result.” O’Neal took home a $14 million bonus in 2006; in 2007, he walked away from Merrill with a severance package worth $162 million, although it is presumably worth much less today.

In October, John Thain, Merrill Lynch’s final CEO, reportedly lobbied his board of directors for a bonus of $30 million or more, eventually reducing his demand to $10million in December; he withdrew the request, under a firestorm of protest, only after it was leaked to The Wall Street Journal. Merrill Lynch as a whole was no better: it moved its bonus payments, $4 billion in total, forward to December, presumably to avoid the possibility that they would be reduced by Bank of America, which would own Merrill beginning on January 1. Wall Street paid out $18 billion in year-end bonuses last year to its New York City employees, after the government disbursed $243 billion in emergency assistance to the financial sector.

In a financial panic, the government must respond with both speed and overwhelming force. The root problem is uncertainty—in our case, uncertainty about whether the major banks have sufficient assets to cover their liabilities. Half measures combined with wishful thinking and a wait-and-see attitude cannot overcome this uncertainty. And the longer the response takes, the longer the uncertainty will stymie the flow of credit, sap consumer confidence, and cripple the economy—ultimately making the problem much harder to solve. Yet the principal characteristics of the government’s response to the financial crisis have been delay, lack of transparency, and an unwillingness to upset the financial sector.

The response so far is perhaps best described as “policy by deal”: when a major financial institution gets into trouble, the Treasury Department and the Federal Reserve engineer a bailout over the weekend and announce on Monday that everything is fine. In March 2008, Bear Stearns was sold to JP Morgan Chase in what looked to many like a gift to JP Morgan. (Jamie Dimon, JP Morgan’s CEO, sits on the board of directors of the Federal Reserve Bank of New York, which, along with the Treasury Department, brokered the deal.) In September, we saw the sale of Merrill Lynch to Bank of America, the first bailout of AIG, and the takeover and immediate sale of Washington Mutual to JP Morgan—all of which were brokered by the government. In October, nine large banks were recapitalized on the same day behind closed doors in Washington. This, in turn, was followed by additional bailouts for Citigroup, AIG, Bank of America, Citigroup (again), and AIG (again).

Some of these deals may have been reasonable responses to the immediate situation. But it was never clear (and still isn’t) what combination of interests was being served, and how. Treasury and the Fed did not act according to any publicly articulated principles, but just worked out a transaction and claimed it was the best that could be done under the circumstances. This was late-night, backroom dealing, pure and simple.

Throughout the crisis, the government has taken extreme care not to upset the interests of the financial institutions, or to question the basic outlines of the system that got us here. In September 2008, Henry Paulson asked Congress for $700 billion to buy toxic assets from banks, with no strings attached and no judicial review of his purchase decisions. Many observers suspected that the purpose was to overpay for those assets and thereby take the problem off the banks’ hands—indeed, that is the only way that buying toxic assets would have helped anything. Perhaps because there was no way to make such a blatant subsidy politically acceptable, that plan was shelved.

Instead, the money was used to recapitalize banks, buying shares in them on terms that were grossly favorable to the banks themselves. As the crisis has deepened and financial institutions have needed more help, the government has gotten more and more creative in figuring out ways to provide banks with subsidies that are too complex for the general public to understand. The first AIG bailout, which was on relatively good terms for the taxpayer, was supplemented by three further bailouts whose terms were more AIG-friendly. The second Citigroup bailout and the Bank of America bailout included complex asset guarantees that provided the banks with insurance at below-market rates. The third Citigroup bailout, in late February, converted government-owned preferred stock to common stock at a price significantly higher than the market price—a subsidy that probably even most Wall Street Journal readers would miss on first reading. And the convertible preferred shares that the Treasury will buy under the new Financial Stability Plan give the conversion option (and thus the upside) to the banks, not the government.

This latest plan—which is likely to provide cheap loans to hedge funds and others so that they can buy distressed bank assets at relatively high prices—has been heavily influenced by the financial sector, and Treasury has made no secret of that. As Neel Kashkari, a senior Treasury official under both Henry Paulson and Tim Geithner (and a Goldman alum) told Congress in March, “We had received inbound unsolicited proposals from people in the private sector saying, ‘We have capital on the sidelines; we want to go after [distressed bank] assets.’” And the plan lets them do just that: “By marrying government capital—taxpayer capital—with private-sector capital and providing financing, you can enable those investors to then go after those assets at a price that makes sense for the investors and at a price that makes sense for the banks.” Kashkari didn’t mention anything about what makes sense for the third group involved: the taxpayers.

Even leaving aside fairness to taxpayers, the government’s velvet-glove approach with the banks is deeply troubling, for one simple reason: it is inadequate to change the behavior of a financial sector accustomed to doing business on its own terms, at a time when that behavior must change. As an unnamed senior bank official said to The New York Times last fall, “It doesn’t matter how much Hank Paulson gives us, no one is going to lend a nickel until the economy turns.” But there’s the rub: the economy can’t recover until the banks are healthy and willing to lend.

The Way Out
Looking just at the financial crisis (and leaving aside some problems of the larger economy), we face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support.

Big banks, it seems, have only gained political strength since the crisis began. And this is not surprising. With the financial system so fragile, the damage that a major bank failure could cause—Lehman was small relative to Citigroup or Bank of America—is much greater than it would be during ordinary times. The banks have been exploiting this fear as they wring favorable deals out of Washington. Bank of America obtained its second bailout package (in January) after warning the government that it might not be able to go through with the acquisition of Merrill Lynch, a prospect that Treasury did not want to consider.

The challenges the United States faces are familiar territory to the people at the IMF. If you hid the name of the country and just showed them the numbers, there is no doubt what old IMF hands would say: nationalize troubled banks and break them up as necessary.

In some ways, of course, the government has already taken control of the banking system. It has essentially guaranteed the liabilities of the biggest banks, and it is their only plausible source of capital today. Meanwhile, the Federal Reserve has taken on a major role in providing credit to the economy—the function that the private banking sector is supposed to be performing, but isn’t. Yet there are limits to what the Fed can do on its own; consumers and businesses are still dependent on banks that lack the balance sheets and the incentives to make the loans the economy needs, and the government has no real control over who runs the banks, or over what they do.

At the root of the banks’ problems are the large losses they have undoubtedly taken on their securities and loan portfolios. But they don’t want to recognize the full extent of their losses, because that would likely expose them as insolvent. So they talk down the problem, and ask for handouts that aren’t enough to make them healthy (again, they can’t reveal the size of the handouts that would be necessary for that), but are enough to keep them upright a little longer. This behavior is corrosive: unhealthy banks either don’t lend (hoarding money to shore up reserves) or they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all. In either case, the economy suffers further, and as it does, bank assets themselves continue to deteriorate—creating a highly destructive vicious cycle.

To break this cycle, the government must force the banks to acknowledge the scale of their problems. As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization. Instead, Treasury is trying to negotiate bailouts bank by bank, and behaving as if the banks hold all the cards—contorting the terms of each deal to minimize government ownership while forswearing government influence over bank strategy or operations. Under these conditions, cleaning up bank balance sheets is impossible.

Nationalization would not imply permanent state ownership. The IMF’s advice would be, essentially: scale up the standard Federal Deposit Insurance Corporation process. An FDIC “intervention” is basically a government-managed bankruptcy procedure for banks. It would allow the government to wipe out bank shareholders, replace failed management, clean up the balance sheets, and then sell the banks back to the private sector. The main advantage is immediate recognition of the problem so that it can be solved before it grows worse.

The government needs to inspect the balance sheets and identify the banks that cannot survive a severe recession. These banks should face a choice: write down your assets to their true value and raise private capital within 30 days, or be taken over by the government. The government would write down the toxic assets of banks taken into receivership—recognizing reality—and transfer those assets to a separate government entity, which would attempt to salvage whatever value is possible for the taxpayer (as the Resolution Trust Corporation did after the savings-and-loan debacle of the 1980s). The rump banks—cleansed and able to lend safely, and hence trusted again by other lenders and investors—could then be sold off.

Cleaning up the megabanks will be complex. And it will be expensive for the taxpayer; according to the latest IMF numbers, the cleanup of the banking system would probably cost close to $1.5trillion (or 10percent of our GDP) in the long term. But only decisive government action—exposing the full extent of the financial rot and restoring some set of banks to publicly verifiable health—can cure the financial sector as a whole.

This may seem like strong medicine. But in fact, while necessary, it is insufficient. The second problem the U.S. faces—the power of the oligarchy—is just as important as the immediate crisis of lending. And the advice from the IMF on this front would again be simple: break the oligarchy.

Oversize institutions disproportionately influence public policy; the major banks we have today draw much of their power from being too big to fail. Nationalization and re-privatization would not change that; while the replacement of the bank executives who got us into this crisis would be just and sensible, ultimately, the swapping-out of one set of powerful managers for another would change only the names of the oligarchs.

Ideally, big banks should be sold in medium-size pieces, divided regionally or by type of business. Where this proves impractical—since we’ll want to sell the banks quickly—they could be sold whole, but with the requirement of being broken up within a short time. Banks that remain in private hands should also be subject to size limitations.

This may seem like a crude and arbitrary step, but it is the best way to limit the power of individual institutions in a sector that is essential to the economy as a whole. Of course, some people will complain about the “efficiency costs” of a more fragmented banking system, and these costs are real. But so are the costs when a bank that is too big to fail—a financial weapon of mass self-destruction—explodes. Anything that is too big to fail is too big to exist.

To ensure systematic bank breakup, and to prevent the eventual reemergence of dangerous behemoths, we also need to overhaul our antitrust legislation. Laws put in place more than 100years ago to combat industrial monopolies were not designed to address the problem we now face. The problem in the financial sector today is not that a given firm might have enough market share to influence prices; it is that one firm or a small set of interconnected firms, by failing, can bring down the economy. The Obama administration’s fiscal stimulus evokes FDR, but what we need to imitate here is Teddy Roosevelt’s trust-busting.

Caps on executive compensation, while redolent of populism, might help restore the political balance of power and deter the emergence of a new oligarchy. Wall Street’s main attraction—to the people who work there and to the government officials who were only too happy to bask in its reflected glory—has been the astounding amount of money that could be made. Limiting that money would reduce the allure of the financial sector and make it more like any other industry.

Still, outright pay caps are clumsy, especially in the long run. And most money is now made in largely unregulated private hedge funds and private-equity firms, so lowering pay would be complicated. Regulation and taxation should be part of the solution. Over time, though, the largest part may involve more transparency and competition, which would bring financial-industry fees down. To those who say this would drive financial activities to other countries, we can now safely say: fine.

Two Paths
To paraphrase Joseph Schumpeter, the early-20th-century economist, everyone has elites; the important thing is to change them from time to time. If the U.S. were just another country, coming to the IMF with hat in hand, I might be fairly optimistic about its future. Most of the emerging-market crises that I’ve mentioned ended relatively quickly, and gave way, for the most part, to relatively strong recoveries. But this, alas, brings us to the limit of the analogy between the U.S. and emerging markets.

Emerging-market countries have only a precarious hold on wealth, and are weaklings globally. When they get into trouble, they quite literally run out of money—or at least out of foreign currency, without which they cannot survive. They must make difficult decisions; ultimately, aggressive action is baked into the cake. But the U.S., of course, is the world’s most powerful nation, rich beyond measure, and blessed with the exorbitant privilege of paying its foreign debts in its own currency, which it can print. As a result, it could very well stumble along for years—as Japan did during its lost decade—never summoning the courage to do what it needs to do, and never really recovering. A clean break with the past—involving the takeover and cleanup of major banks—hardly looks like a sure thing right now. Certainly no one at the IMF can force it.

In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

Boris Fyodorov, the late finance minister of Russia, struggled for much of the past 20 years against oligarchs, corruption, and abuse of authority in all its forms. He liked to say that confusion and chaos were very much in the interests of the powerful—letting them take things, legally and illegally, with impunity. When inflation is high, who can say what a piece of property is really worth? When the credit system is supported by byzantine government arrangements and backroom deals, how do you know that you aren’t being fleeced?

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy “stress scenario” that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

Simon Johnson, a professor at MIT’s Sloan School of Management, was the chief economist at the International Monetary Fund during 2007 and 2008. He blogs about the financial crisis at baselinescenario.com, along with James Kwak, who also contributed to this essay.

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Interview with Naomi Klein

The Wall Street Bailout Is the Greatest Heist in Monetary History

At wowowow.com, Joan Juliet Buck interviews Naomi Klein:

As all the pieces of all the world’s economy started crashing around our heads, I realized that the person I most wanted to ask about it all was Naomi Klein, whom I had met briefly last year when Laurie Anderson put together a protest evening at St. Anne’s. Naomi Klein’s books, No Logo and The Shock Doctrine, examined the roots of what is happening now. Here’s what she had to say about the present crisis. -JJB

JOAN JULIET BUCK: You must be having some very intense reactions to everything that’s happening right now.

NAOMI KLEIN: It’s an adventure reading the paper every morning.

JOAN: Where does that leave the end of history?

NAOMI: So many of the debates that we were told are over are reemerging. That’s the good part of what’s going on right now. There were so many attempts to arbitrarily claim that ideas about social justice, about economic justice, were finished, and there’s only one model. In The Shock Doctrine I quote Larry Summers, from back in 1991 when he was a honcho at the World Bank. He was talking about the World Bank policies that used to be called The Washington Consensus. And he said, “Spread the truth — the laws of economics are like the laws of engineering. One set of laws works everywhere.” It was all about deregulation, privatization, the market is always best, the market’s always supreme. And there was the feeling of certainty — that we had figured everything out. Summers even said a couple of years later that there are many basic economic ideas that are “passé” — no longer worthy of debate. One of the issues that he listed as over was the idea that government could invest in programs to stimulate the economy. And here he is … right!

JOAN: What does the present moment mean?

NAOMI: It’s created space; there’s new oxygen to propose alternatives. One of the things that I try to show in my book is that these debates were not won on their own merits. They were often won using violence, by actually eliminating the left, in countries in Latin America, and then declaring ideological victory.

JOAN: In The New Yorker, you’re quoted as saying, “This is a progressive moment. It’s ours to lose.” What did you mean?

NAOMI: Capitalism is on trial. And you have an organic, grassroots, sort of spontaneous revolt against the elite – which is actually what we’re hearing with this rage at CEOs, and bonuses and government collusion with the elites. Rage is an opportunity. The rage is there, and the country is seething, the world is seething with rage. The question is, where is it going to be directed? I feel there’s a moral responsibility for the Left and for progressives to provide an alternative in this moment that is moral, that is principled, that is just, that is hopeful, because if we don’t, then that anger is so easily directed at “those damn Mexican immigrants,” at “the first African American president.” So I feel a tremendous sense of urgency. It’s not just, “Hey, our time has come.” It’s, “We’d better get our act together because this anger is going somewhere.”

JOAN: Now, who would the leaders of this Left be?

NAOMI: That is a very complicated question in the United States right now. Pretty much everywhere else in the world, besides maybe North Korea, there’s a really healthy distrust of those in power. You know, people are in the streets in this moment, as well they should be – whether it’s in France or whether it’s in Britain or Iceland. They may have a left-leaning government, like the government of Gordon Brown. But that doesn’t mean they’re giving him a pass. In Britain the choice is very clear. The anger is either going to be directed at the banks or it’s going to be directed at immigrants. I’m not afraid of it being directed at the banks. I’m appalled at news that there’s a 17-year-old girl who is facing jail time for having a few beers and breaking a window at the RBS Bank during the G-20 protests, when not a single banker is going to jail for burning down the global economy. What kind of a system is that? I think we should rally to this young woman’s defense. What you see again and again in Europe is that, in this critical moment, there is an opposition that is organizing with this healthy distrust of power. In the U.S., Obama mania complicates this.

JOAN: You said, talking about the Obama video "Yes We Can," "Now, finally, a politician is making ads that are as good as Nike."

NAOMI: In the ‘90s I wrote a lot about branding and how corporations were tapping into the deeply human need to be part of something bigger than just consumerism. “We’re not just selling sneakers. We’re not just selling laptops. We’re selling transcendence and a connection and community.” That trend actually made me feel hopeful that, actually, we don’t just want things, and all of this expensive market research was telling Microsoft and Starbucks and Nike that what we actually want is to be part of something larger. Even though I thought the phenomenon was culturally insidious, I felt, in many ways, the same sense of responsibility. Like, hey, they’ve done our market research for us, but they’re actually not offering community and political engagement. They’re offering lattes and laptops and running shoes. So it’s actually up to progressive movements to provide the real deal. I do believe that the Yes We Can movement started pretty empty, and it was really tapping into just the deep shame of the Bush years and the desire for something different, and using these very creative marketing techniques where you’re able to project your own longings onto this blank slate.

JOAN: And can Obama provide the real deal?

NAOMI: What gave me hope was that when the economic crisis hit, Obama got serious and his analysis became more concrete. It’s really worth remembering that he started winning the election when Lehman collapsed and he started putting the ideology of Reaganism on trial. He started saying, “This economic crisis is the result of the policies of deregulation and trickle-down economics that have dominated this country.” But he said, “for the last eight years.” That was wrong. And that was part of the problem.

JOAN: Because it’s the last 30.

NAOMI: It’s the last 30 and, you know, that was a piece of intellectual dishonesty that I think has cost us dearly. That was a good electoral line because we all wanted to be able to blame it all on Republicans, because that was a much more sellable election slogan. “Everything was fine in the ‘90s when you had Clinton and we just need to get back to that.” And what that did was gloss over the absolutely central role that Robert Rubin and Larry Summers played in creating this crisis. And lo and behold, they’re back with their protégés in tow. There’s really a shared responsibility, and it’s an argument for more intellectual honesty, more principled stands and fewer strategic calculations. What worries me so much is that it’s fine for politicians to be strategic. But social movements should be principled. They shouldn’t always be thinking about what’s the right strategy, what’s the sellable message, what’s the talking point, because then you end up in a situation like this. Larry Summers is back. Larry Summers was given a pass during the entire election.

JOAN: Is it effective what Obama’s doing? What do you think of it?

NAOMI: If you mean the bank bailout, I think it’s a disaster, crony capitalism at the absolute worst. I think the timing of the release of Larry Summers’s financial records from last year is really interesting. He worked at a hedge fund one day a week and was paid $5.2 million. He was paid $135,000 for one speech to one of the bailed-out banks. And when he got the post he was presented as an egghead academic, as if he wasn’t coming from Wall Street. In fact he wasn’t just working for one bank; he was working for all of them. He collected $8 million in these fees in one year. The question people have been asking about the bank bailout is, “Why is this happening?” And I think part of the answer is that in the United States, there’s so much mythology around the purity of American intentions. There’s always this desire to blame incompetence as opposed to greed. But sometimes things are just what they look like.

NAOMI: Larry Summers and Tim Geithner came up with a plan to bail out the banks that is actually a disguised bailout for the hedge funds — where the government is not bailing out the hedge funds directly because they can’t sell that, but hedging the hedge funds to buy the toxic assets of the banks — instead of nationalizing the banks and breaking them up, which is what needs to happen. This is very different from what FDR had the guts to do. He used that progressive movement, he used the rage at the banks, to pass Glass-Steagall. And there’s no excuse for the fact that there’s been no serious re-regulation of the financial sector. The idea that you would somehow hand out trillions of dollars to the banks and then regulate them months later is crazy. You have the leverage when you’re handing out the money. “You say you want a bailout? Well here are the new rules.” And somehow we’re supposed to believe that the plan is to hand out trillions of dollars to the banks, and then later, once they’ve taken and spent the money, impose new rules. That’s the stupidest plan I’ve ever heard in my life. And I don’t believe these guys are dumb. I think they’re corrupt.

JOAN: Which guys?

NAOMI: Summers. Geithner. It may be legal corruption but I still consider it corrupt. Wall Street funded Obama’s campaign. They funded his Inauguration. They paid huge speaking and consulting fees to some of his closest advisers. What I am calling corruption is better understood as “crony capitalism.” It’s the systematic trading of favors between corporate and political elites to secure wealth and power. And the truth is, most of the time the trading of favors doesn’t even need to be explicit. It’s more that this corporate-political nexus creates an impenetrable culture in Washington, so the hedge-fund managers and bank CEOs are the ones who are in the ears of the Washington policy makers — they are their constituency, their community, the ones saying whether or not a given policy will work. And, of course, the problem is that the voices of regular people are left out.

JOAN: Why is my perception that Obama was funded by the tiny donations?

NAOMI: Because both are true. His campaign was historic in the number of small donations and the grassroots campaigning that brought him to office. But it was also historic in the levels of Wall Street financing. The grassroots movement that brought Obama to power needs to understand that the fight is on, that Wall Street is pushing Obama hard behind the scenes because they feel they have a claim to him. And the appointment of Summers and Geithner were all messages to Wall Street – “Don’t worry, things are not going to change too much.” And the market cheered. For the people who sent the $100 donations and volunteered their time for the Obama campaign, the only way to respond to this is to push hard from the other direction. Because the dynamic where Obama’s grassroots support just cheers him and defends anything he does, while the Wall Street heavy hitters and the defense companies take the gloves and lobby hard for their agenda does not work. The grassroots will lose that battle because they aren’t actually fighting. What they’re saying to Obama is, “You can take us for granted.”

NAOMI: I’m not saying Obama is corrupt. But I’m saying that, so far, what he has actually done is go to great lengths to reassure Wall Street and it’s very much a top-down recovery model, which is the opposite of what he campaigned on. He campaigned on the idea of a bottom-up recovery. Reinvesting in Main Street, reinvesting in manufacturing. That can happen, but only if we demand it, because in Washington the momentum for the status quo is so tremendous. That’s the problem with the bailout. His stimulus package has some very, very good things in it. The news is not all bad. But the problem is that the bank bailout is so bad that it practically cancels everything else out, in the sense that taxpayers have taken on so much risk, so much debt in the interest of bailing out the banks, that they’ve created a crisis down the road which will then be used to justify cutting social security, cutting health care and not making good on those promises. That’s the real concern.

JOAN: You really think that’s going to happen?

NAOMI: I really believe that this bailout is not a bailout for the economy. The best writing about this has been done by Joseph Stiglitz, Paul Krugman, Jeffrey Sachs. These are very, very respected economists. Two of them with Nobel prizes. What’s really shocking to me is that they’re in the position of criticizing from the sidelines, as opposed to being in the administration. This administration is trapped in the kind of thinking that created the crisis and I think it should be just gloves-off criticism on this, because it’s very, very serious. It’s very serious that Joseph Stiglitz has not been invited to play a pivotal role in the administration, that Paul Krugman is seen as too extreme. That’s why Summers matters, because Summers is the gatekeeper. Summers appears to be keeping people away from Obama. He’s defining the terms of the debate, and they are outrageously narrow. I think we should take Stiglitz and Krugman and Sachs at their word on the bailout: It’s worse than we thought. The debts that these banks hold are enough to swallow the country’s entire GDP and then some, if we keep throwing money into that black hole. It happened in Iceland. We just saw a national economy be wiped out by the debts accumulated by private banks.

JOAN: Just start with the Icelandic protests. Why are there no protests in the streets in America?

NAOMI: This comes back to the problems of hero worship. It’s hard to protest your hero. But it’s more than that. It’s also that the virulence of the Right in the United States is so frightening and the problem is that it is the merger of the extreme far right and large corporations, in the form of media conglomerates. So Glenn Beck on Fox or Lou Dobbs on CNN have these unbelievable megaphones to attack Obama, and to spread fear, which makes reasonable people feel that their main political role is to defend the Obama administration against this very frightening right-wing onslaught. It’s understandable but it’s also hard to do that while being in the streets protesting that administration’s bailout – which is what’s happening in Britain, which is what’s happening in France, what’s happening in Italy. I think the problem in the U.S. is that many people who were part of the campaign to get Obama into power now see their role as being kind of an unofficial arm of the administration, with some groups even taking talking points from the White House. It’s a recipe for political failure, because what actually makes space for Obama to do more of what we want him to do is to make him look less radical, by being more radical ourselves.

JOAN: A very good point.

NAOMI: And that’s actually doing him a favor. That’s how political victories were won in the ‘30s and ‘40s, and it’s really the only route. Another obstacle we face are these wild theories about what Obama’s actually planning to do. During the campaign people forgave a lot that they disagreed with by saying, “Well, you know, he has to say that in order to get elected." Or, "When he gets the power he’s going to change his position," which I think is really problematic for progressives, because what you’re actually doing is hoping he’s lying. And we actually want politicians to tell the truth so that we can hold them to their promises on the campaign trail.

JOAN: And now?

NAOMI: Now you have this new level of theorizing where people think maybe Obama’s strategy is to try the free-market bailout model. You know, bailing out the banks, letting them stay private, doing this hedge-fund bailout, so that he can show that it failed, so that he can then do what he really wants to do.

JOAN: Machiavelli.

NAOMI: Yeah, except for one problem: There’s not going to be any money left for the second stage of this supposedly ingenious plan. The bottom line is that we need to get out of trying to imagine what Obama might be thinking and all of his strategizing, and just stand on principle and make principled demands. I do have enough faith in Obama to believe that if he is faced with a mobilized population making clear, principled, radical demands, he will broker a pretty good compromise. But he’s not going to do it while he is just being cheered by his supporters.

JOAN: Given that many people consider that this moment is exposing the fundamental flaws of capitalism, is it a moment for a radical rethinking of capitalism, of economics, of the markets? For a whole new model?

NAOMI: I do think that. I do. That’s both the fear and the promise of this moment. Here’s something else that I thought was really exciting about the protest in London during the G-20 Summit: Most of those activists came out of the environmental movement. They were making connections between the financial crisis and the ecological crisis, the logic of “there’s no tomorrow,” and short-term thinking that underlies both the financial crisis and the climate crisis, and the perpetual-motion machine of economic growth above all else.

It is a real crisis that we’re facing and it goes well beyond the financial markets. The frightening part of this political moment has been watching how the crisis in the financial sector has just swept all of these other issues aside. Do we ever hear about the food crisis? Do we think it’s solved? Do we ever hear about the AIDS pandemic or are we talking about climate change anymore? It can go either way. This crisis can swallow us up in every way. The financial crisis can be the only thing we talk about. It can drink up all of our collective resources. On the other hand it does provide this opportunity because the failures of the economic logic are so clear. When you start making those connections and talking about solutions that are multitasking solutions that address the financial crisis, AND the climate crisis AND the health-care crisis, then people start getting really inspired. So much of what has paralyzed progressive movements over the past 20, 30 years has been this idea of a shrug from government. We can’t do anything collectively. Yeah, sure, that’s a big problem, but we have to leave things to the market, and government isn’t very good at doing anything. That notion of collective impotence has also shattered, along with so many of the other myths.

We’re seeing such incredible government effort that’s being marshaled in order to save the financial system. There’s a sense of possibility about anything right now. Why can’t we have universal health care? Why can’t we have an incredible mass-transit system across the country? You never know what this generation’s going to do with that, because they are not afflicted with what my generation was afflicted with, which was just total indoctrination and Reaganism and this idea that we can’t do anything collectively. That’s also what’s hopeful about what Obama unleashed in his campaign. People felt the tremendous sense of common purpose. And also they got a victory.

JOAN: They did.

NAOMI: When people start winning things, it can go either way. People can just get disillusioned and go, “Well I thought Obama was going to fix everything, and he didn’t. And now I’m never going to do anything ever again. I’m now officially cynical at, you know, 23.” Or, it can be, “Wait a minute. We’ve made history electing this guy who everyone said couldn’t get elected and let’s go make some more history.”

JOAN: Now, a little question about the whole idea of progressive movements that, of course, come out of our parents’ generation and are fueled by Communist ideals — and Communism in our lifetime was revealed to be an unworkable model. So you’re saying the only basis for progressive movements is justice itself?

NAOMI: Well, justice, democracy and also any major new progressive movement is going to have ecology at its very center, which necessarily questions the fundamentals of capitalism, which is based on endless growth. Young people understand that much better than we do, just in their bones — a sense of a feeling of real ecological limits. That, to me, was what was so insidious about the role that Sarah Palin played in the campaign — at this moment, when we’re suddenly, collectively getting in touch with the reality that the resources of the planet are not limitless, that we have a deep challenge to the American dream, to the frontier myth, which is the myth of abundance and wide-open spaces. And just when we’re starting to come to grips with the reality that we have to live within our means, along comes Sarah Palin who says, “Come up to Alaska. It’s the final frontier. We’ve got enough oil and gas and resources to fuel your way of life forever and ever. Drill, baby, drill.” I think it was such an extraordinary moment, the Republican convention of, “No, we don’t have to think about tomorrow.”

JOAN: Right.

NAOMI: That aspect of the role that Sarah Palin played in revising the myth of the frontier hasn’t really been examined enough. What I try to show in the Shock Doctrine is that capitalism and its various spokespeople have always tried to create a false duality between free markets and free people on the one hand, and Communism and enslaved people on the other, as if those are the only two choices available to us. We see that even in the way that the Glenn Becks and the Sean Hannitys and the Bill O’Reillys are immediately casting Obama as a Communist for extremely moderate Keynesian policies. It serves them to pretend there is nothing between extremist market fundamentalism and Communism, to erase everything in the middle.

In tracking the history of this very dangerous right-wing ideology, what was so striking to me was that it was always more dangerous to these right-wing ideologues to have democratic socialism or Scandinavian-style social democracy, rather than iron-rule, Soviet-style totalitarianism. That’s an easy enemy. That’s fun. The Cold War was fun. What is much more challenging for the Right is when people start experimenting with combinations of democracy, socialism and markets. For instance, in Poland, the first Eastern-bloc country to have elections, the party that came to power was Solidarity. And Solidarity’s vision for an alternative was not Reaganism. It was the idea that the factories could be turned into workers’ co-ops. This was Upton Sinclair’s idea in 1934 when he ran for governor of California — all of these abandoned farmlands and factories that are closing should be given to workers to run democratically. And in the rare places where they have been tried — these are the so-called “third ways” — they usually turn out to be some of the best places in the world to live, like the Scandinavian countries, or parts of Northern Italy where you have a large portion of the economy run by co-ops.

JOAN: When I read The Shock Doctrine I got so angry. Has that feeling of frustration that you communicate, of frustration and horror, has that abated a bit for you, or is it worse?

NAOMI: It hasn’t abated. What enrages me more than anything is impunity. I am in a state of rage about the impunity of the elites at the moment. I’m very disturbed by this idea that we just have to keep looking forward, we can’t look backward. That is a declaration in favor of legal impunity for the elites, whether we’re talking about torture, whether we’re talking about the financial crimes that created this crisis, whether we’re talking about what happened under TARP and the first $700 billion. Elizabeth Warren has done such a fantastic job and has raised some very, very deep legal issues about what happened with that money, and there seems to be no desire to prosecute. This brings us back to that 17-year-old girl who broke a window. You can’t have a society where the elites enjoy this flagrant impunity and expect people to respect the rule of law.

That’s why I dwell on Summers. I think that somebody who played a key role in pushing shock therapy economic policy on Russia in the ‘90s, when 72 million people were thrown into poverty, should not be declared a genius. I’ve really been struck recently by the fact that this is such a boys’ club that we’re talking about. Men get sort of deified and their intelligence inflated beyond all reason and evidence — the “maestro” Alan Greenspan and the “oracle” Larry Summers, as he was recently declared in The New Republic — really projecting onto these guys otherworldly intelligence, otherworldly powers. And I’m calling this the “brain bubble” because I actually think it’s more dangerous than the real-estate bubble, and I think it’s more dangerous than the subprime mortgage crisis.

JOAN: It infantilizes the watcher.

NAOMI: It infantilizes all of us because these men are just too smart for us, so that we just have to trust them, no matter how spectacularly and repeatedly wrong they have been. I’ve also been struck by how spectacularly right a few key women have been in this process, and, interestingly, women never get the “brain bubble” treatment.

JOAN: OK, who?

NAOMI: Brooksley Born [chairwoman of the Commodity Futures Trading Commission], who, during the Clinton administration, blew the whistle on the unregulated derivative industry and wanted to regulate it like any other banking sector. For her prescience she was bullied by Rubin and Greenspan and Summers, who’s actually the enforcer of the three. He was the one who called her. They argued that just by talking about the need to regulate derivatives, she was going to create market panic. So not only wouldn’t they consider it, they wouldn’t even let her talk about it. She saw this whole crisis coming. You often hear this: “Well, no one saw this coming.” And that is such a reflection on who these men believe is someone. But there are so many people who saw this coming, and they’re considered nobodies. The only way you get to be a somebody is if you agree with them. Brooksley Born saw it coming. Elizabeth Warren has been an incredible watchdog. Sheila Bair, chair of the FDIC, also had a much more principled and ethical vision of what the bailout should be, in arguing that they should be offering direct aid to homeowners, as opposed to this top-down bailout. I feel like this gender split is not coincidental. There’s a need for more of a feminist analysis in understanding how we got here.

JOAN: As a child you rejected feminism, which your mother supported. What was it about feminism that you initially found so distasteful?

NAOMI: I think it was a combination of just basic boring teenage rebellion and, really, these basic, aesthetic objections.

JOAN: Hairy legs?

NAOMI: Yes. And it’s not that my mom was hardcore in that way, but I didn’t like being policed in any way. I rejected feminism as something that I felt was getting in my way of, you know, wanting to wear what I wanted to wear and do what I wanted to do. I really didn’t like the idea that it would be assumed that I would agree with my parents. It was a combination of just wanting to wear tight jeans and also just not wanting to be bossed around. I was a bit of a brat about it.

But when I was in first-year university at University of Toronto, there was a terrible crime against women that is really not known about outside of Canada. It was a massacre at the University of Montreal, the city where I was born and in which I grew up. A gunman went into an engineering school. At that time there were big debates about why there aren’t more women in engineering and in the hard sciences. And there were people arguing that it’s because women lack the certain intrinsic ability. As an aside, that’s what Larry Summers suggested when he was president of Harvard, which got him in so much trouble. There were other people who were arguing that it was the culture of the schools themselves, and that there needed to be more of an effort to bring women into the sciences. And affirmative action was being practiced at the engineering schools. The vitriol around this was so strong that this gunman, Mark Lepine, got it into his head that he had not gotten into this school because of feminists. He went to an engineering classroom at the University of Montreal and separated the men from the women. He turned to the women and said, “You’re all a bunch of fucking feminists,” and gunned them down. Fourteen women were killed. So it was a crime against women, a crime against feminism.

JOAN: You did a lot of feminist activism starting then, right?

NAOMI: Yes, right away. Because I had grown up with it, it was a bit like, “Oh, I know how to do this,” even though I had always rejected it. The connection between the way that this was being reported on in the media and the way this twisted man incorporated it in his mind was so clear that a whole generation of feminists was created in that moment. The media kept saying, “He’s just a madman. It’s not a crime against women. It’s not about politics.” And this is so familiar. It happens every time, right? We wanted to talk about the fact that we felt it was bigger than just one man, that we were all feeling vulnerable. So we put up some signs around campus saying that we were going to have a meeting to talk about the Montreal massacre. And 900 people showed up. I was asked to chair the meeting. I’d never done any public speaking or done anything like that before. And from then on I was just in this role of leadership. But I always was a writer. I was always writing for the campus newspaper, more than I was leading rallies. I’ve never been comfortable in that role.

JOAN: Is there anything good about globalization?

NAOMI: Yes. There are many good things about internationalism. I consider myself an internationalist, not a nationalist. Globalization is such a slippery term and that’s why I almost never use it. I always say the so-called anti-globalization movement. And in my first book, No Logo, I talk about how we were seeing a rise in anti-corporate activism, and anti-corporate globalization activism. I never just say anti-globalization, because what was exciting about the movement that I was writing about and that I was a part of, that came to world attention in Seattle, is precisely that it was global; that these new technologies, like the Internet, were allowing us to create connections that were absolutely unprecedented between producers and consumers on other sides of the world. What we opposed was the globalization of a specific ideology. It was about an ideology that Larry Summers talks about – privatization, deregulation.

JOAN: What do you think of the branding of social justice and causes like the Red Campaign, which has become a brand? It leaves me completely cold. Do you think it’s effective? Do you think it’s a good redirection of branding and consumerism? Or do you think it’s like a false idea wrapped around a good idea?

NAOMI: Every time I talk about this I get into trouble. What’s interesting about Red is it really hasn’t taken off. There was so much hype about it. And so much marketing. What was so scandalous was comparing the advertising budgets to the actual dollars that went into the Global Fund. Considering the paid and free advertising that this campaign got, I think it’s quite amazing how unsuccessful it was. And I think because a lot of people had that feeling that there was something wrong about the idea of shopping your way out a humanitarian crisis. The message of Red was: You don’t have to change anything about your lifestyle; in fact, we need to just buy more. Like, you’ve got a cell phone, but you don’t have a red cell phone! It was such a hyper-consumerist model, it didn’t resonate with the target market, which was young people, who actually do understand that this idea of limitless consumption is at the core of the problem of global inequality, not the solution.

NAOMI: And my other discomfort with not just Red, but the Make Poverty History branding, is that I really feel that it is — and was — a very real step backward from what was happening before September 11 in the global justice movement, not the anti-globalization movement, but the global justice movement that you saw not just in the protest in North America but in Porto Alegre, Brazil, with the huge World Social Forum, and the Africa Social Forum, and also the Durban World Conference against racism, the UN Conference that happened just before September 11, which was a tremendous forum for African nations and for people of African descent around the world, including in the U.S., to talk about the legacies of colonialism and slavery, to talk about real reparations, and what Africa actually deserves in terms of economic justice, not charity. And what was so exciting about these events is that Africans were actually speaking on their own behalf on the world stage and coming up with some pretty radical demands that actually challenged who owes who. They were talking about how much has been looted from that continent in terms of people and natural resources, and turning the tables on this idea of "we just want your aid, we just want your charity." And when I think back to that time, and then I look to the Gleneagles G-8 Summit and Bob Geldof and Bono talking about saving Africa, it makes my stomach churn. So that’s why I get myself into trouble when I talk about this.

JOAN: Are you too left?

NAOMI: I think we’ve established that, surely! I think the question is too left for what? I mean, I’m not running for office.

JOAN: Shoshana Zuboff wrote about Wall Street’s economic crimes against humanity in BusinessWeek. Do you think these are crimes against humanity?

NAOMI: "Crimes against humanity" has a very specific legal connotation, and I think that some Wall Street firms have been complicit in specific crimes against humanity. But whether the financial crisis is itself a crime against humanity, according to the UN definition, I think we should really be careful with those terms — because they need to have meaning. But I do believe that the Wall Street bailout is the greatest heist in monetary history.

JOAN: Who profits from the heist? From the Wall Street bailout?

NAOMI: This is an unprecedented transfer of public wealth into private hands. And it has been done on completely false pretenses. We were told that when they announced the first $700 billion it was to get the banks to start lending again. And then the banks said, “Oh, actually we’re just going to keep it because it makes us comfortable.” It’s theft. And it’s not mysterious who profits from it.

Who profits from it is exactly who seems to be profiting from it. Who will pay for it are the most vulnerable people in the world. And that’s why, maybe, I wouldn’t call it a crime against humanity. I think it is, honestly, a class war. I think we are seeing a class war, before our eyes, of the wealthiest segment of the population saving themselves and having the most vulnerable, poorest people pay the price – because that’s what it really means to bankrupt the government to save the banks. It means you’re not going to have money for food stamps. You’re already hearing these tragic stories of scholarship programs being cut. I mean, the most vulnerable people are paying for the banks to save themselves from a crisis that they created, and that is so deeply immoral. People should be angry about it, and the anger should be directed where it belongs.

JOAN: One more question, Naomi. You suggested in The Nation a boycott of Israel to end the increasingly bloody occupation. Can you expand on that? You must have caused a shit storm by saying that.

NAOMI: I was actually much more surprised by the amount of support I got for that. Every time you write about Israel you get angry letters. But what surprised me was the number of supportive letters I got, including from Jewish Israelis. I think it was about people’s sense of rage and feelings of helplessness during the Israeli attack on Gaza, a sense that the old ways of putting pressure behind the scenes, lobbying and hoping for the best, and signing a petition weren’t working. I got so many letters from Israelis who had always opposed the idea of sanctions against the Israeli government saying, “Progressives in Israel are beside themselves, and the country is moving hard right on its own.” You have overt racism against Arabs becoming acceptable in public discourse in Israel.

And progressives are ready to try some new tactics because they’re losing this battle. Right now the Israeli government has a sense that no matter what they do in the occupied territories, they’re still going to receive financial support from the West, they’re still going to be able to increase trade with the West. And they’ve had one of the fastest-growing economies of the past decade. A boycott does put pressure on the business community in Israel and on the broader population to put pressure on their own government. That’s what happened in South Africa. Apartheid ended when South African businesses finally had had enough of the boycott, and they turned to de Klerk and said, “This isn’t working for us. We need to negotiate.” And it wasn’t because they opposed Apartheid on principle. It was because it was no longer profitable.

JOAN: I’m reading William Gibson’s Pattern Recognition. Have you read William Gibson? I think that this book is so profoundly influenced by No Logo.

NAOMI: But not enough people have read Pattern Recognition, so they don’t know what we’re talking about. The incredible main character in Pattern Recognition is allergic to logos.

JOAN: Particularly Mickey Mouse and the Michelin Man.

NAOMI: William Gibson didn’t read No Logo that I know of. He just saw the title in the bookstore and that’s where he came up with the idea of a main character who had an allergy to brands. I interviewed him at a literary festival when the book first came out and we talked about this.

JOAN: And he’s the person who brought your thinking into literature, into fiction, in an extraordinary way. And it shows me that the arts can be influenced by political thinking, new political thinking.

NAOMI: Everyone should read Pattern Recognition. It’s brilliant There’s another book that I think did a great job of looking at branding and I don’t think enough people have read it. It’s called Jennifer Government.

JOAN: Jennifer Government?

NAOMI: Yes. By Max Barry. He’s a young Australian writer and it’s a sort of sci-fi thriller set in the near future, where everyone has to take the last names of the corporation they work for. John Nike, things like that, unless you work for the government, in which case your last name is “Government.” So that main character is Jennifer Government. It’s really great. Apparently it was optioned by George Clooney’s company, so I’m hoping it will be made into a film.

JOAN: What are the three things that you see that are the real solid rays of hope now?

NAOMI: I talked about some of them. One of the most interesting meetings I had in recent months was with the workers from the Republic Windows & Doors factory in Chicago, who occupied their factory in December. They were so smart. They had been fired without notice. And it turned out that this had happened because Bank of America had cut off credit to the factory — Bank of America who’d gotten all these bailout funds. They were so smart, the workers and their union, UE, because they went after Bank of America instead of just the owners of the factory. And they turned it into a story about the bailout. All great struggles have to involve storytelling. I thought that was a fantastic example. I’ve been hearing about a lot more cases of these kinds of workplace occupations.

JOAN: Like in Argentina.

NAOMI: This is what I made a documentary about a few years back with my husband. Factories were being closed down in the midst of the economic crisis. There were 200 of them where the workers turned them into democratically run co-ops. This is starting to happen in the economic crisis around the world. I’ve got a little file going of this and one thing that would give me a lot of hope is if we really started talking about this alternative in terms of the newspaper industry.

JOAN: I was just thinking that, and magazines.

NAOMI: We are facing a crisis in journalism and we’ve been talking about impunity, and I’ll tell that when you’ve already got a culture of impunity, the very worst thing that could happen is to lose all of the newspapers. But, you know, this crisis is twofold. The crisis that the industry is facing is a crisis of their corporate control, because many of these newspapers are profitable, they’re just not profitable enough for their owners. Having spent a lot of time in factories that are trying to turn themselves into co-ops and other workplaces, I can tell you that there are some workplaces that are harder to turn into co-ops than others. But having worked at newspapers and worked at magazines, it’s actually a pretty straightforward industry to run, and journalists are pretty good at running it. And once you take out the need to have huge profits, or really profits at all, and when the goal becomes the creation and protection of jobs, but also the providing of a much-needed service, a service that is crucial to democracy, then it actually becomes economically viable. You don’t have to pay the huge bonuses. This is an example of something where you can solve two problems at once because not only could you save newspapers, but I think you’d have better newspapers if newspapers were run by journalists again.

JOAN: But what about the fact that the advertising then vanishes because of the market?

NAOMI: This is why it’s become less profitable. But a lot of the newspapers could still run if their goal wasn’t to make a profit, but the goal was to put out a good newspaper and provide jobs. Because you know what? That’s enough.

JOAN: But there has to be money to run the thing and to pay everyone.

NAOMI: I don’t believe that the model has completely failed. There is still some ad revenue. People are still willing to buy newspapers, they’re just not willing to buy them in the same numbers and buy the number of ads that satisfy shareholders. Another ray of hope is looking forward to the Copenhagen summit on climate change. This is the next big climate summit to come up with what they call the post-Kyoto consensus. And at this point, I think there’s a lot of rightful cynicism about the Kyoto protocol because the whole question of "How are we going to respond to climate change?" was entirely infected by market fundamentalism. Bringing it back full circle to where we started, the ideas that have dominated for the past 30 years have utterly shaped the environmental debate during the Kyoto era. So the idea was to always find “market-based solutions” to climate change, which meant that we couldn’t really legislate, and everything had to be creating market incentives for the private sector to solve the problem for us. And I think that’s a much harder sell today in the context of people rightfully losing faith in the ability of the market to solve our most pressing problems. So I think you’re going to see a lot of very different, non-market-based solutions being proposed ahead of the Copenhagen Summit, which is in December 2009.

JOAN: What’s an example of a non-market solution?

NAOMI: A non-market solution is this idea that I’ve become really interested in. It’s been kicking around academic circles for a while but for the first time it’s being applied, which is the idea of “ecological debt” or “climate debt.” I’ll give you a concrete example. Where this issue is most alive is in Ecuador right now. Ecuador is an enormously resource-rich country, as we know. They have very large oil reserves. But they also have a very, very active environmental movement and a very, very strong indigenous movement, particularly — though not exclusively — in the Amazon. This is one of the most biodiverse parts of the world, quite pristine wilderness. But there’s a lot of oil under the ground, and there’s a huge push to take the oil out of the area I’m talking about, which is called the Yasuni National Park. And there’s a battle that’s been going on, which is really about the limits of growth-based economics. It’s not just about the Right, because in Ecuador there’s a left-wing president, part of what they call the Pink Tide in Latin America. His name is Rafael Correa and he calls himself a socialist. He was originally in favor of extracting the oil and reinvesting the profits in health care and education. He doesn’t want the profits to just fly out of the country, as they have so often in the past. He was going to negotiate a really good deal with the oil company, unlike his predecessors. That was his vision. What’s interesting is that he has come up against tremendous resistance from indigenous groups and from environmentalists in Ecuador saying, “That’s not good enough.” Their slogan is "Leave It in the Ground." They don’t want the oil being extracted. But then you have this problem: Ecuador needs money for health care and education and has been held back by regressive economic policies.

So what’s the solution? They’ve come up with this idea of ecological debt, which basically argues that the rich world, the industrialized world that has created the problem of climate change, knowing full well the science that has been in for a long time, owes an ecological debt to developing countries like Ecuador. What they’re saying is they’re owed an ecological debt because they are living through climate changes, and this is an Andean nation that is already dealing with water scarcity and many of the issues associated with global warming. And so they are proposing to the world, and Rafael Correa has signed on to this idea in theory, that there should be some sort of global fund where we in the rich world are paying them to leave it in the ground and reduce their emissions, particularly because this is a world heritage site and we all need the Amazon. Developing countries shouldn’t have to choose between having money for health care and education and reducing emissions. So it’s a completely different logic. Once again, as with reparations for slavery and colonialism, it turns the world on its head and asks this fundamental question of “who owes who?” — who’s the real debtor and who’s the real creditor?

I think these are the ideas that are going to take off in the next 20 years. And I’ll tell you something. I’ve been thinking about this idea and it definitely ties in with who I’m talking to, because I wrote it down: Who Owes Who. The acronym is W.O.W. It’s a pretty great name for a movement challenging the underlying causes of global inequality. The WOW project, that’s what we need.

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What Is US Attorney Mary Beth Buchanan Still Doing in Obama's Justice Department? Using Cell Phones To Track People

At BuzzFlash, Christine Bowman writes:

BuzzFlash and a few other progressive news sites have noted that the Obama Administration is not in the least free yet of the legacy of the US attorney firing scandal of 2007 known as Prosecutorgate. Sure, Attorney General Alberto Gonzales was forced to exit in disgrace. Bradley Schlozman, Monica Goodling and Kyle Sampson also gained notoriety due to Congressional hearings. But the legacy of a deeply politicized Department of Justice (DOJ) remains. More independent-minded former US attorneys David Iglesias and Carol Lam
, who failed to target Democrats for prosecution, are out. Prosecutors like Mary Beth Buchanan and Leura Canary, who have energetically targeted Democratic office holders, are in and still causing trouble.

US Attorney Mary Beth Buchanan, still heading up the Western District of Pennsylvania office, certainly personifies the problem if any one attorney does. In December 2008, having served since September 2001, Buchanan declared herself unwilling to give up her office -- Alice Martin of Birmingham, AL also refuses to bow out -- in defiance of the long-standing tradition that US Attorneys tender their resignations at the start of every new administration.

Yet Scott Horton writing at The Daily Beast notes:

In the key period of 2004-05, while groundwork was laid for what later became the U.S. attorney's scandal, Buchanan served as director of the Executive Office for U.S. Attorneys, the key position at Justice that oversaw all the 94 U.S. attorneys. A later internal Justice Department probe, in which Buchanan figures prominently, highlights the role played by that office in Karl Rove’s plan to sack U.S. attorneys.

What is Buchanan's agenda as a prosecutor? From the get-go in 2001, she pursued obscenity cases and chased down marijuana dealers -- and high-profile drug paraphernalia vendor Tommy Chong, as BuzzFlash reported -- very publicly and aggressively advancing a right-wing "values" agenda. She "took the directives from Washington to heart," as Charlie Deitch, writing for the Pittsburgh City Paper, put it.

The Pittsburgh Post-Gazette further describes Buchanan as a person of "hard-driving ambition," and quotes Thomas J. Farrell, a former assistant federal prosecutor, as saying, "whether you like her or not, she probably will end up being one of the most influential U.S. attorneys we've had."

Reagan and G. H. W. Bush Attorney General and former PA Governor Dick Thornburgh saw problems with Buchanan's partisan approach when he was on the defense team of one of her Democratic targets, Allegheny County Coroner Dr. Cyril H. Wecht. In addition to Wecht, Buchanan has tenaciously pursued a Democratic Pittsburgh mayor, a Democratic sheriff, and a Democratic county judge, but not Republicans -- not even former Senator Rick Santorum, whose several ethics issues helped him lose his reelection bid. (Santorum had enthusiastically supported Buchanan's nomination and confirmation as a US attorney.)

Buchanan's current passion is apparently to chip away at privacy protections that are guaranteed by the Fourth Amendment. She's all for warrantless wiretapping, but also for using cell-site location information (CSLI) -- in other words, accessing cell phone company records to pinpoint any cell-phone user's past or present whereabouts. Talk Left reports that Buchanan wants that power not only in national security or terrorism-related cases, but for just any old criminal prosecution like a narcotics case.

At issue in the Pennsylvania case is "historical" cell phone location records. Buchanan argues it's no different than pen registers and trap and traces because it doesn't intercept the voice. Scholars and many other judges have disagreed, saying when you use the cell phone to determine location, it's like a tracking device. The law requires probable cause for tracking devices....

It should be a no-brainer that when the Government seeks information about your location from your cell phone they need a warrant based on probable cause, not some boiler-plate statement to the judge that the information is relevant to an ongoing investigation.

The lower court's opinion in the Pennsylvania case is here (pdf). The Obama Justice Department briefs, filed by Buchanan, are here (pdf) and here (pdf). The second was filed just last week.

The Electronic Frontier Foundation, American Civil Liberties Union, and Center for Democracy and Technology have argued that a showing of probable cause is needed before a cell phone service provider could be compelled to disclose geographic data about a subscriber, according to arstechnica.com.

Meanwhile, prominent and powerful Western PA US Representative John Murtha, a Democrat, is finding himself, or at least his friends, the target of investigations, as David D. Kirkpatrick reported in The New York Times April 25. Not only have prosecutors "raided the offices of the PMA Group — a lobbying firm founded by a former Murtha associate" [but] ... "Reports of the PMA investigation coincided with the news that federal agents had also raided Kuchera Industries, a Johnstown, Pa., company built on Mr. Murtha’s patronage whose owners held a fund-raiser for him on their private game ranch." Murtha is the top Democrat on the House Defense Appropriations Committee which oversees huge earmarks for military spending.

A writer at Firedoglake speculated in February that Buchanan intends to hang on beyond her welcome as US attorney in order to get Rep. Murtha:

But I think she's got much bigger Democratic fish she wants to stick around to fry: Jack Murtha. The NYT follows up on what ABC reported earlier: that investigators conducted two raids on entities associated with Murtha. ...

Note the timing: Murtha wins his closest election in years in November. And then the Feds raid a lobbying firm closely connected to him. In December, Buchanan refuses to step down. And in January the FBI raids Kuchera--a company that has no clear ties to PMA, but is closely associated with Murtha.

Mind you, Murtha has long been acknowledged to be one of the most corrupt Democrats in Congress. I'm sure there's at least something that Buchanan used to justify this investigation.

But just as Murtha has long been acknowledged to be one of the most corrupt Dems, Buchanan has been acknowledged to be one of the most corrupt US Attorneys. Which means, given Buchanan's obstinate refusal to leave, this one may blow up into a full-fledged political witch hunt.

As yet there seems to be no news to contradict the "Get Murtha" theory. Of course, Rep. Murtha became a magnet for right-wing hate when he called for bringing American troops home from the Iraq War in 2005. That seems as likely an underlying reason for a sudden attack as earmarks or campaign contributions.

Will Eric Holder's Justice Department bring Buchanan's anti-Democratic, anti-progressive era to an end? The Pittsburgh Tribune-Review reported on several possible replacements for her back in March. How about picking one and moving on? Justice still has lots of repairs to its integrity to undertake.

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Transcript & Video of State of the Union with John King - April 26, 2009

John King intervews Valerie Jarrett, Lindsey Graham, Dianne Feinstein and Joe Lieberman

Transcript of State of the Union with John King:

JOHN KING, HOST: I'm John King, and this is our STATE OF THE UNION report for this Sunday, April 26th. Today, a special look at President Obama's first 100 days in the White House, including unique behind- the-scenes accounts and images.

One of the president's closest aides and friends, senior adviser Valerie Jarrett, joins us for an exclusive look at both the policy and the personal challenges.

The release of top secret memos on CIA interrogations is fueling one of the most sensitive debates of Barack Obama's presidency. Three key senators, Lindsey Graham, Dianne Feinstein, and Joe Lieberman, on whether making the documents public undermines national security and what happens next.

Plus, strides and missteps. Two of the best political strategists assess the first 100 days, appearing together only on STATE OF THE UNION, James Carville and Mary Matalin on the first chapter of a historic presidency.

That's all ahead in this hour of STATE OF THE UNION.

A live picture there of the White House on day 97, day 97 of the Obama presidency. I asked the president about our first guest, and he'll tell you he doesn't like to make any major decisions without consulting her. A woman who has earned several nicknames like "first friend" and "the other side of Obama's brain." So who better to talk about it as we approach that important benchmark, the 100 days of the Obama presidency, than Valerie Jarrett. Valerie Jarrett, thanks for joining us on STATE OF THE UNION.

JARRETT: Thank you, John. And good morning and congratulations on your 100th day as well.

KING: Thank you. Yours is a bit more important than ours, but thank you very much. I want to start -- I want to get to some of your personal reflections on history. But I want to start with the news dominating the headlines this morning. This is The San Diego Union- Tribune. "Swine flu outbreak gets more worrisome."

The San Antonio Express-News, "In Texas flu fears shut down a high school." The administration has been aware of this since late last week, had a number of meetings and will have a briefing later today. What do we expect from the White House? Will it include, say, travel restrictions on going to Mexico? JARRETT: Well, I don't want to prejudge what the officials are going to say later today. But let's just put it this way, the president is taking this very seriously. He has assembled his teams from the Centers for Disease Control and Homeland Security. He has been briefed regularly. And he has asked them to speak to the American people and give the appropriate counsel later today.

So I'll let the experts speak to that.

KING: An interesting circumstance in that he and a number of senior officials had just been to Mexico. I understand he has been tested and he's in the clear?

JARRETT: He's fine. He is just fine. Thank you for asking, though.

KING: Let's move on to this momentous decision he has made in the past week, which was to release the CIA documents, the internal legal documents about the CIA interrogations. And I want to get your sense. You have watched him make hard decisions.

And I'm told by senior officials that this one weighs right up there with the decision to send more troops into Afghanistan as the toughest he has had to make in his first 100 days in office, in part, because only 44 men have been president of the United States, and in making this decision, he did something no president before him has done, put out former top secret memos on the previous administration so soon after taking office. Why?

JARRETT: Well, look, first of all, we are a nation of laws and the law requires us to release the documents unless there's some national security interest that would make it more important to keep them secret.

But the fact of the matter is there is nothing in the documents that the American people hadn't already seen all over the news. The techniques that were being used by the prior administration were well- known. When the president came in office, he said, we're not going to use those techniques anymore. That's not who we are as a country. In fact, Denny Blair, his intelligence adviser, has said in fact using those techniques makes us less safe. So the president said, let's release them and then let's move forward.

KING: In the context of let's move forward, there is a question about should there be a truth commission, should there be investigations, should there be prosecutions? And there is a big policy debate, but there's also a political debate that some say has been intensified by what they see as mixed messages from the White House.

If you turn over your right shoulder, I want to you take through some of the timeline. When the president released the memos on April 16th, he said, this is a time for reflection, not retribution. Three days later, his chief of staff, Rahm Emanuel, echoed the president, saying, the president believes those who devised the policy should not be prosecuted. But then on April 23rd, just a few days after the chief of staff was out, the president seemed to give a different message. Let's listen.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: With respect to those who formulated those legal decisions, I would say that that is going to be more of a decision for the attorney general within the parameters of various laws, and I don't want to prejudge that.

(END VIDEO CLIP)

KING: Why did the president change his mind? He seems open now to possible prosecution.

JARRETT: No. Let me be clear where the president stands on this. What he has said is that anyone who followed the advice of the Justice Department and did any kind of acts that were within the confines of that advice, he doesn't think we should prosecute.

The rest of it, he leaves up to the U.S. Attorney General. That is who is supposed to make decisions about prosecution. So I think the president has been very clear and what he said is, we need to be a nation of laws, we need to be consistent, and he leaves it to the attorney general to figure out who should be prosecuted for what.

KING: Who should be prosecuted for what. If it's not those who acted on the advice they were given, who were told it was legal, what are we talking about here? Are we talking about the attorney general in the previous administration, the CIA director, Secretary Rumsfeld?

JARRETT: You and I aren't talking about anything. We are going to leave that all up to the attorney general. As you know, the Senate Intelligence Committee is having hearings as well. That is the appropriate place I think for any further investigation. And then the rest we leave to the attorney general. KING: You have a fascinating job because you have the trust of the president and you have become his conduit to many of the CEOs around America right now. He is dealing with the auto bailout. He is dealing with the financial institutions and the banks. He is in negotiations now over credit card reforms.

And you are the person who is often in touch with these CEOs, getting their advice and telling the administration things, seeking their input. One of the questions on the table is these stress test for all of the banks.

JARRETT: Yes.

KING: And without naming names, are there banks out there that are in deep trouble, and, if so, will the president and the White House, as in the case of General Motors, say, you know what, you're in trouble, you're not doing this as fast or as aggressively we thought you should do, if you want more money from us, the CEO has to go? JARRETT: Let's not leap forward. Let's look at where we are. The stress test results are just now being shared with the banks. We're going to have an announcement, I believe it's May 4th, coming from the Treasury Department and the Federal Reserve.

They've been going through an in-depth analysis of those top largest 19 banks over the course of the last several months. Let's see where we are and let's not prejudge the outcome. I think what the president's direction has been very clearly is we want to help the economy.

In order to have a healthy economy, we need to have strong banks. They need to be well-capitalized. They need to be able to lend dollars and help support our economy. And so at the end of the stress test, we want to make sure that those are -- that the banks are in a position to do that.

And so whether management changes occur, whether banks are asked to raise more capital, all of that is going to come forth in the coming week.

KING: You helped the president in the campaign. You were one of his a big fundraisers, one of his top advisers. One of the messages he gave to the American people in the campaign is, elect me and I will change the way that crazy town of Washington works, I'm not afraid to deal with Republicans, I will be bipartisan, will change the partisan, nasty tone in Washington.

I want you to listen something he said just after the election.

(BEGIN VIDEO CLIP)

OBAMA: I know we will succeed, once again, if we put aside partisanship and politics and work together. That's exactly what I intend to do as president of the United States.

(END VIDEO CLIP) KING: And, yet, in the first 100 days, only three Republican votes on the stimulus plan, no Republican votes on the Obama budget, and now the White House has pressured Democrats in Congress to use their power in the rules so, that if necessary, you can pass health care reform with 51 votes, a majority, not 60 votes.

Has the president decided that because of the mood in this town and because of the unwillingness of this town and both sides to perhaps change, that it is more important to get things done, like health care reform, like climate change, like education policy, than to make friends with the Republicans right off the bat?

JARRETT: Look, what the president has said throughout, he said in the campaign, he said it in his address the night of his election, and the way he has behaved since he took office is one of reaching out to both sides.

He includes everybody in the dialogue. He has reached out more aggressively, I think, to the Republican Party than I've ever imagined a president could possibly do. So I think the burden is on him to reach out his hand and that is what he has done. And that is what he is going to continue to do throughout this administration.

He has not changed tactics whatsoever. That is who he is as a person.

KING: Let's close -- sorry, go ahead.

JARRETT: But let me -- on the issue of health care, health care is extraordinarily important. I think there is bipartisan support for pushing health care forward. It's good for our country. It's good for our economy. And the president is determined to get it done this year.

KING: Let's close with a bit of history. I want to ask you to get up and walk over here with me as we walk over to the wall. This is a diagram of the West Wing of the White House. And you see the Oval Office here, the president's study, some of the cabinet rooms and the Roosevelt rooms, some of these offices, this is the second floor here, I believe this is Valerie Jarrett's office up here, they are highlighted for a reason.

I was a reporter at the White House for almost nine years. I walked those halls every day and never did you see this, an African- American first lady, an African-American senior adviser, an African- American deputy chief of staff, an African-American woman as the domestic policy adviser, as the deputy legal counsel, as the White House social secretary.

Barack Obama has made history. What is it like to work in a White House like this, African-American women in such positions of power?

JARRETT: Well, it's terrific. You are seeing very strong, I hope smart, intelligent African-American women. But I think have to round it out and look at the whole diversity of team. And I think what has been so extraordinary about President Obama is he appreciates diversity and he thinks it will make him think harder.

We push him to make sure that he has had a wide range of ideas as he makes decisions. And so as you fill out the rest of the team, it's extraordinary as well. But these are some pretty terrific women.

KING: And I want you to look over here at this picture. This has never been released before. We're going to have Pete Souza in here at the end of the program today to talk about looking at history through the lens of his camera.

This is a picture of the president and the first lady dancing. I believe that is the East Room of the White House right there. Take us inside and what is it like from a personal standpoint to see your two close friends in this position now? Can you believe it yet?

JARRETT: I still pinch myself every day. It's a terrific picture. It was the night of the Governors Ball, our first state dinner. And I think the president left right before they broke out into a conga line. And I think all of the folks who were there said they never had a conga line in the White House before. So it makes me happy. I'm so just extraordinarily proud of both of them. And I know that they wake up every day and they think about the American people.

And there so many people out there who are suffering and they need our help here in government. And it's his job to make sure that he delivers on the promises he made to the American people.

KING: Valerie Jarrett, here to mark the 100 days. A lot of challenges will be dealt in the second 100 days. We'll have you right back here to assess them at the end of that.

JARRETT: Look forward to it. I look forward to it.

KING: Thank you so much.

JARRETT: Thank you for having me.

KING: Thank you so much.

KING: Now we just heard Team Obama's position on the release of the so-called torture memos. What happens next? We ask three key senators about calls for investigations and prosecutions just ahead.

(BEGIN VIDEO CLIP)

OBAMA: If can you think about what Washington, D.C. was like 50 years ago or 60 years ago. And the notion that I now will be standing there and sworn in as the 44th president, I think, is something that hopefully our children take for granted, but our grandparents, I think, are still stunned by it and it's a remarkable moment.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KING: Do you believe the president of the United States has made Americans less safe?

FORMER VICE PRESIDENT DICK CHENEY: I do. And now he is making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack.

(END VIDEO CLIP)

KING: Vice President Dick Cheney there on this program just about a month ago. President Obama's election mandate was to fix a struggling U.S. economy but as he starts his 97th day in office today national security challenges are front and center. A debate whether releasing Bush administration terror policies was a blunder and over whether some of the Bush officials should be prosecuted and fresh violence in both Iraq and Pakistan will test the new administration's military and diplomatic strategies. Joining us to talk about this and assess the president's first 100 days, Democratic Senator Dianne Feinstein of California, the chairwoman of the Select Committee on Intelligence, Senator Joe Lieberman of Connecticut, the independent, former Democrat and from South Carolina, Republican Senator Lindsey Graham.

Chairwoman, I want to start with you. On the vice president's point, you heard the vice president say there he thinks the new administration is making the American people less safe. He also says that there are other memos not released into the public that prove his point that these controversial interrogation tactics used in limited circumstances actually produced intelligence that saved U.S. lives, including preventing an attack in your home State of California, the City of Los Angeles. Is he right?

FEINSTEIN: Well, I've received those memos. I asked him for them and he sent them to me. They are classified memos so I won't go into them. That's the reason why I believe the Intelligence Committee is the oversight agency for 16 intelligence agencies, including the CIA. It is our responsibility to do oversight. We have access to the classified information. And we have set upon a course, a bipartisan course with a program scope, approved by the committee, to review the conditions of detention and the techniques of interrogation of each of the high value detainees. We estimate that will take six to eight months. My hope is that the public debate quells, that we have an opportunity to do our work. The committee will consider it and then we will release, most likely, findings and recommendations.

KING: Findings and recommendations. I want to get to the other senators but to the vice president's point he believes the documents would show that the tactics worked, saved lives.

FEINSTEIN: It's very hard to tell on the face, because you have to go into who learned what at the time. Now I can go into one, at least one specific case, and it's very uncertain. So we need to find these things out and we need to do it in a way that's calm and deliberative and professional, because I think all of this, on the front burner, before the public, does harm our intelligence gathering, it does harm America's position in the world. And President Obama has worked so hard now to open a new page, to go to so many countries, to say that America is now on a different course. Let us do our work and let us do it the way it should be done.

KING: Senator Graham, you and Senator Lieberman opposed relieving these documents even though you were critics of the interrogation tactics, you thought it would undermine the mission of the united states and the CIA and now that some are out does the former vice president have a point? If some are out, should all be out?

GRAHAM: Well, here is my concern, is that, one, I think it was a mistake to release the techniques that we're talking about and inform our enemy as to what may come their way. I like what Senator Feinstein said, to go through it. And there's no doubt in my mind you may have gotten some useful information out of these techniques but the other side of the story is very real. The more than America embraces these techniques like waterboarding that comes from the Inquisition, the harder to get allies to go with us into the Mid East to fight the insurgents. You inflame the opposition. Our energy uses these images against us.

To say these techniques have brought about no good or no information is wrong, but also to say that it's been a net positive is wrong. There's a way to get good information in an aggressive manner to protect this nation without having to go into the Inquisition era. I believe you can do both. KING: And what about going forward, Senator Lieberman? The president, in relieving these memos, you didn't like that he did, but the president's message let's look forward, not look back but then the president said I'll leave this up to my attorney general who should be prosecuted. Let's listen to Mr. Holder.

(BEGIN VIDEO CLIP)

ATTORNEY GENERAL ERIC HOLDER: I will not permit the criminalization of policy differences. However, it is my responsibility, as the attorney general, to enforce the law. It is my duty to enforce the law. If I see evidence of wrongdoing, I will pursue it to the full extent of the law.

(END VIDEO CLIP)

KING: Are you comfortable with that? Do you think this should be pursued and if you rule out the interrogators saying they were told, they were following orders and acting on legal advice what they were doing was right, what are we talking about here? Are we talking about the CIA director, are we talking about the attorney general in the previous administration, Secretary Rumsfeld, somebody in the White House?

LIEBERMAN: Yeah, no, it is not clear who we are talking about. And I think it is a mistake. I go back to what the president said at the beginning, it is time to look forward. These are top secret documents. These were lawyers, you could disagree with them but in my opinion they were trying to do what they thought would protect our country.

And here is the most important point. This whole debate is moot. President Obama has prohibited these tactics from being used in interrogation, so what do we gain -- well, what do we gain, first, by releasing the memos, but, secondly, what do we gain from indicting lawyers for their opinions, if that is a possibility here, or holding a so-called Truth Commission that the reality is, it will poison the water here in Washington. It will achieve nothing.

LIEBERMAN: It will make it harder for the president to do some of the big things he wants to do for the country -- not just get the economy going, but get some Republican support for health care reform, energy independence and education reform.

So let the Intelligence Committee do its work. That should be the end of it. KING: And one of the questions in the political debate, as you well know, there are people out there saying, wait a minute. You have all these politicians -- and largely Democrats, now -- saying, you know, investigate; truth commission; investigate; we had no idea.

A timeline released by your committee, Senator Feinstein, says -- and this is backed up the former chairman of the House Intelligence Committee -- and then-CIA Director Porter Goss -- Pete Hoekstra -- you know, select members of Congress were briefed -- were briefed, way back at the beginning, including now-Speaker Nancy Pelosi.

And the timeline by your committee says that they were briefed on the use of waterboarding on three detainees, Abu Zubaydah, Abdul Rahim al-Nashiri, and Khalid Shaikh Mohammed.

The now-Speaker Pelosi says, no way; she was told there were legal -- there were -- legal opinions were written but not that the tactics had been used. Is she telling the truth?

FEINSTEIN: Well, I can't comment on that. I wasn't there. Just four people were briefed. The full committee, including myself, were briefed in September of '06. Now, that's four years later or so. So there is a big gap.

I am really strongly opposed to just certain members being briefed on something this seriously. It seems to me the whole committee should be briefed at a given time. We've been very good at retaining security, and I think it's a real disadvantage to the system just to have a few people briefed.

Because it really is a notification; there is no real discussion. When you deal with the whole committee, everybody fires back questions; there's a discussion; there's a dialogue. And I think a point of view emerges.

KING: Well, if -- to Senator Feinstein's point, Senator Graham, if the committee, the Intelligence Committee is going to look into this, and you all think that's the more responsible, measured way to do it, should the committee also look into whether Porter Goss or Nancy Pelosi is telling the truth about what came up at those briefings?

GRAHAM: Well, I'll leave that up to the committee. But the point is, if a member of Congress was read into this program, does it matter?

Yes, I think it matters. It's clear to me that the people who were devising these interrogation techniques were not trying to commit a crime against an individual person. They were trying to create tools for our intelligence community to get information to prevent what we all thought was going to be an imminent attack.

The Geneva Convention did not apply, until 2005, to the war on terror. So I can't conceive of a statute that you could prosecute anyone under because their endeavor was not to commit a crime but to look at the law and come up with aggressive interrogation techniques to get information from an enemy that we all thought was coming after us again.

So, however, if you think what they did was a crime, and you read someone into it, they're part of the crime.

So I think it's ridiculous to say the lawyers were trying to break the law. They were trying to interpret the law to protect the nation. And any member of Congress that was read into the program, I don't think they have any culpability either, because what we were trying to do is defend the nation, not conspire to hurt somebody individually, but techniques to protect us all.

KING: I want to move on to other big challenges facing the country right now.

But, before we do that and before we take a quick break, early in the Bush administration, the criticism in Congress was they never pick up the phone; they never consult us; you know, we've got some pretty smart people up here; we can help you.

I'm told that this decision was anguished; the president came in inclined to release them, changed his mind a couple times during the debate and then came back in the end and decided to release them.

At any point in that process -- I'll start with you, Senator Lieberman -- anybody from the White House pick up the phone and say, "What do you think?"

LIEBERMAN: They did not. And I can tell you, listening to what Lindsey said about looking at these decisions that were made early in the Bush administration, remembering that it was immediately after 9/11/01 there was worry about another attack imminently -- I'm proud to be the chairman of the Senate Homeland Security Committee. Our enemies are out there planning and plotting to attack us every day.

So, as we think about what we want to release, how much information we want to make public, what kind of mud fight we want to get into about something that happened seven years ago, we better remember that and focus on our security today, not back-biting and vendettas from a time passed.

KING: Quickly to you, you're the chairwoman of the committee. You're investigating these matters, anyway. Do they pick up the phone and call you?

FEINSTEIN: No. They did not.

KING: Is that a mistake?

FEINSTEIN: Well, if they had, I probably would have said, as I said, let us do our work first. Since the first two cases have already been done, let us do the rest of it before anything is released, so that at least the Intelligence Committee can see everything in context and make some decisions.

KING: All right. Much more with our Senate guests in just a moment. We ask them to lay out the stakes in the tough choices facing the United States in three major hot spots, Iraq, Pakistan and Afghanistan. "State of the Union" will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KING: On a scale of 1 to 10, sir, how confident are you, 10 being fully confident, that you will meet that deadline, that all U.S. troops will be gone at the end of 2011?

GENERAL RAY ODIERNO (USA), COMMANDER, MULTI-NATIONAL FORCE-IRAQ: As you ask me today, I believe it's a 10 that we will be gone by 2011.

(END VIDEO CLIP)

KING: We're back with our three senators, Democrat Dianne Feinstein, Independent Joe Lieberman and Republican Lindsey Graham.

That was General Odierno on this program, Easter Sunday morning. Since then, as you're all aware, there has been an uptick, as the military would call it, in violence across Iraq, Mosul, Baqubah, including in Baghdad.

And on the front page of the New York Times today, "Iraq Resists Pleas by U.S. to Placate Hussein's Party."

Essentially, Nouri al-Maliki, the prime minister, has not, at least if you believe U.S. officials, reached out to former Baath Party members and said, it's time to move on; it's time to reconcile.

Senator Lieberman, to you first, are you worried at all about the combination of those things, more violence and the slower pace of political reconciliation will knock the U.S. timetable off track?

LIEBERMAN: Sure, I am. I'm concerned about it. And incidentally, it's part of why I'm so grateful that President Obama did not yield to the calls for a precipitous rapid withdrawal of our troops from Iraq. He's got us on a timeline. It's based on conditions on the ground. And what's happening now shows that all that we've sacrificed so much and worked so hard to gain is not quite set. So we need to be careful here.

LIEBERMAN: But I think Prime Minister Maliki has really done a pretty good job at reconciling a lot of the divisions in Iraqi politics. The Sunnis are much more involved than they used to be. I know that there's some problems with former leaders what was basically Saddam Hussein's party. We ought to encourage Prime Minister Maliki to try to bring them in as well so they all could be united at what seems to be remnants of al Qaeda in Iraq that are carrying out these brutal bombings against Shia, this an attempt by al Qaeda to try to stimulate sectarian conflict again in Iraq and neither Prime Minister Maliki or the American forces or the Iraqi forces can let that happen.

KING: And if that challenge were not great enough for the military to deal with and the president to deal with, Senator Graham, you also have this expansion of the Taliban influence inside Pakistan. And ... GRAHAM: Right.

KING: ... Admiral Mullen was just there, the is due back for a White House meeting on Monday, administration officials say they have some big decisions to make based on what Admiral Mullen tells them. There are now more U.S. troops heading into Afghanistan and the question to you is if Pakistan is in such trouble and you have the Taliban on the move inside Pakistan, is it time for the president to slow down the deployment of U.S. troops in Afghanistan? Will they be at risk on the other side of the border or will we need perhaps more troops because of the uncertainty in Pakistan?

GRAHAM: I would counsel the president to do what General Petraeus and others in the region tell him about troops. There is a provision in the supplemental that is coming up in about a month that provides economic aid to Pakistan and $400 million to help them create a counterinsurgency program. I've been talking with administration officials, Republican Party leaders, to see if we can break some of that money out and pass it as a standalone provision soon to show the Pakistani people and government that we're with you, to give them some money to accelerate their counterinsurgency program and give them some money to provide economic aid to their people, the people do not want the Taliban to run Pakistan, but the economy in Pakistan is on its knees and we've got to get the Pakistani Army focused on the insurgency, as well as the government.

The threat the Pakistan is not an invasion by India. It's insurgents, the Taliban and others destabilizing the country and I think we need to be all in in helping Pakistan As to Iraq in 2011, I hope we will have a strong contingent of Americans there training their Air Force, their Navy. It is in our long-term best interest to have an enduring relationship with the people of Iraq, militarily and otherwise.

KING: Admiral Mullen says Pakistan could be at a tipping point. You see the intelligence. Is the Taliban, Senator Feinstein, a threat to the government, the central government of Pakistan?

FEINSTEIN: Oh, in my opinion, yes. I also think that these bombings, the size of the bombings in Iraq are a real danger signal. And I think that Mr. Maliki has to step up to the plate on this. And it's going to be very interesting in the next few weeks to see how he handles this. If these bombings continue and there is an escalation of violence, I think it jeopardizes everything the united states is trying to do.

With respect to the Taliban and particularly in both Afghanistan, as well as Pakistan, I think the takeover of the Swat Valley, the movement up north is a very serious thing. The fact that, despite the fact that we provide money for the Pakistani military, they have done nothing to stop this Taliban advance, I think, causes me great concern that Pakistan may be in very deep trouble. And I would think that -- and most of us, I think, do agree that Pakistan is sort of Ground Zero for terror today and that this thing has to get sorted out and sorted out quickly or you could lose the government of Pakistan and Pakistan is a in nuclear power and that concerns me deeply. KING: A grave issue there. I want to close on a lighter note.

And that is, as we approach the 100 day note we are in a political environment where people are making assessments.

I want to take you, Senator Lieberman back to something you said when you were campaigning for John McCain at the Republican National Convention. Let's listen.

(BEGIN VIDEO CLIP)

LIEBERMAN: Senator Barack Obama is a gifted and eloquent young man who I think can do great things for our country in the years ahead, but, my friends, eloquence is no substitute for a record. Not in these tough times for America.

(END VIDEO CLIP)

KING: We've been discussing a number of tough issues and there are many more, senator, has he proven you wrong, Barack Obama, in his first 100 days.

LIEBERMAN: First, John, let me thank you for running that tape.

KING: Tape is a dangerous thing.

LIEBERMAN: I have no regrets about supporting John McCain and really what I said then, I meant. Barack Obama is extremely gifted. Coming in at a very difficult time. I was thinking particularly about Iraq and Afghanistan, the war on terror. And McCain, of course, great experience, bipartisan record. Once the election was over, I said I would do everything to support Barack Obama as president. He is our president. I have, but I'll say this. I've been impressed by what he has done. He is a young man but he is extremely gifted. He has acted with strength, I think, and purpose in Iraq and Afghanistan, rebuilt some of our relations around the world and acted very boldly here at home on the economy where we needed him to particularly with the stimulus package.

But it's early but I would say he is off to a very good start. Maybe the most important thing he's done overall is that he has restored the confidence of the American people in the American presidency and he has raised their hopes about the future of our country. That is critically important.

KING: We're out of time. I want to give Senators Graham and Feinstein one sentence each. Senator Graham, to you the question is what does the Republican Party need to do in the second 100 days?

GRAHAM: To stand up for fiscal responsibility, work with the president and to make sure that we end Iraq right, win in Afghanistan and stabilize Pakistan, be a partner where we can and loyal opposition where we need to.

KING: There is a question as to whether you want to be the next governor of California. FEINSTEIN: Well, let me answer the prior question. No. You said in a sentence so give me an opportunity.

KING: All right.

FEINSTEIN: I think the Republican Party should stop being the party of no. This is a president well elected by a large number of people. He has had a very strong first 100 days. He has traveled to countries abroad, he has turned the page, he has opened a new day, he has taken strong executive actions, he has put together programs. He has delved into the economy. And I would hope that the second 100 days would find more Republican cooperation.

KING: When do we get the answer to that other question?

FEINSTEIN: Oh, you'll see.

KING: We'll see. Great. We're out of time. Senators Feinstein and Lieberman and Graham, thanks so much for coming.


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Up next, Mary Matalin and James Carville have both counseled presidents in crisis. Their take on the challenges and the 100 day mark, something you will see only right here on STATE OF THE UNION. Stay with us.

(COMMERCIAL BREAK)

KING: We've added a sharp and occasionally spicy political team to our "State of the Union" report. The only place you'll see these tested strategists together on TV is right here.

And joining us now from New Orleans, our newest CNN political contributor, Republican Mary Matalin, alongside our longtime contributor Democrat James Carville.

I want to get, from both of you -- good morning from Jackson Square. It looks beautiful there, this morning -- a little breezy.

I want to get, from both of you, your 100-day headline, your assessment. But first, I want to share with you the assessment of somebody we got to know in the last campaign; that is the Alaska governor, Sarah Palin.

She says this of the first 100 days, the former vice presidential nominee, "For now, Obama's back-peddle on the bipartisanship promise just makes him look insincere. At some point, Obama will need Republicans on his side. He'd be smart to spend his second 100 days making up for the serious snubs of his first."

James Carville, does Sarah Palin have a point?

CARVILLE: Well, you know, I'd rather go with Senator Lieberman's point, who supported Senator McCain, and I completely agree with him -- without going through a recital of all the accomplishments, the signature accomplishment of this president is we have a restoration of confidence in this country. People are feeling better about the country. And that's a magnificent achievement.

And I thought that Senator Lieberman did a very good job of bringing that out. And I would prefer to go with his definition of the first 100 days than Governor Palin's.

KING: And what does Mary Matalin think, at this point?

If you look at the numbers, Mary, this president does have -- about two-thirds of the American people approve of his job. Even a higher number like him as a person and like the imagery of this presidency.

What do you think? MATALIN: Yes, he's maintained his personal popularity, but -- which is on par with his predecessors, but what he's lost, after starting out with record-setting approval ratings which included a goodly amount of Republicans, a lot of independents, he has lost that support, because what he is not is what he was perceived to be in the campaign, a centrist.

He's spent more than all of his predecessors since the beginning of this country. He's expanded government, the greatest in two generations. So he's not a centrist. He's also not post-partisan.

It's not just that he demonizes his opponents, which is old politics. He'd knee-cap his own guys. He's got Valerie Jarrett, who's the liaison -- your former guest is the liaison to MoveOn.org, who is running ads against moderate Democrats. He's not a centrist. He's not post-partisan. But he is -- elections have consequences. We lost, fair and square, and let's -- that's what this debate is about. I hope Republicans can rise to the challenge and oppose him and stop some of this expansion.

KING: Well, I want to talk about some terror policy in a minute. But since you raised that point, Mary, that you lost and you hope Republicans rise to the challenge, I want you to listen to something that your friend and your former colleague in the Bush White House, Steve Schmidt, said the other day about the decline of the Republican Party. Let's listen.

(BEGIN VIDEO CLIP)

STEVE SCHMIDT, REPUBLICAN STRATEGIST: It is near-extinct, in many ways, in the Northeast. It is extinct, in many ways, on the West Coast. And it is endangered in the Mountain West, increasingly endangered in the Southwest, particularly with Hispanic demographics. And if you look at the state of the party, it is a shrinking entity.

(END VIDEO CLIP)

KING: Mary, Steve Schmidt says the leadership vacuum has him thinking you're in the "Lord of the Flies" phase of the Republican Party.

What's the road back?

MATALIN: You know, one of the advantages of age -- I didn't think I'd ever brag about this, but I'm much older than Steve and I've been through this before. And we will come back.

The Republican Party brand is irrefutably ruined, but that's because they lost their connection to conviction conservatism, common- sense conservatism. We've been here before and we've come back, not only strong but to ascend to the majority.

And there are many -- and there's a good nucleus of smart fiscal conservatives, strong defense, back to basics, personal liberty Republicans who will restore the brand and reassociate it with conservatism as we know it: Eric Cantor, Paul Ryan. You know who they are.

So the advantage of being aged is that you've been through it a couple, two or three times.

(LAUGHTER)

KING: James, I want to ask you, on this...

MATALIN: You went down, honey. You've been down.

CARVILLE: Yes, if age confers any wisdom, then you're looking at -- our combined age would make us very wise.

(LAUGHTER)

But, look, I think Steve is a very bright guy. He came down to my class at Tulane, and of course, as you know, Speaker Gingrich did, too.

But I think there's a lot of people who are trying to get under the hood of the Republican Party because, as Ross Perot said, it really needs some fixing. And there's a lot of different voices, here, and we're going to have to see what emerges.

But while all of that is going on, it's indisputable this president's enjoying a 69 percent approval rating. He's getting things done, left and right. He's got any number of things to deal with. And I think he's off to one heck of a start here. And it's understandable because the Republicans are all -- have a cacophony (ph) because they're not doing very well right now.

It's not...

KING: Mary...

MATALIN: It's not a -- it's not a cacophony (ph).

You know, John, can I just add to that?

We keep looking -- and all the pundits like to look at his top number, which is high, but as I said earlier, comparable to his predecessors. The danger spots for this president -- I'm just looking at all the polls, and they're 100 percent consistent on this. It's an 80 percent issue that people of all stripes, across the aisle, are concerned about the rapid and expansive growth of government that this president has ushered in.

That's not an old idea; it's not a stale idea; it's not Republican obstructionism. People just do not like how fast and how far this president has gone. That's an 80 percent issue.

So he's at -- he may be at 60 percent, but concerns over the things that he's done so far -- and that doesn't even include his foreign policy problems, you know -- he's got some undercurrents of issues, here, in this first 100 days. KING: Let me -- let me close on a lighter note, and that is, to James, you are a friend of now-Secretary of State Clinton. You were trying to help her retire her campaign debt when she was Senator Clinton...

(LAUGHTER)

... running against now-President Obama. And the Clinton campaign organization, trying to reduce its debt, has put out a letter offering people who contribute three potential prizes.

One is a day with former President Clinton in New York City. One is tickets to the "American Idol" season finale. And the third is, spend a weekend in Washington, D.C. with James Carville and Paul Begala.

(LAUGHTER)

Mary, you've got the checkbook there?

(LAUGHTER)

MATALIN: Oh, well, as you can see, I'd rather be here at Jazz Fest and the Zurich Classic and the Bubba Gump Run. And good luck in Washington with your crazy, loony lefties.

(LAUGHTER)

CARVILLE: I don't know.

MATALIN: That's a prize. What's the second prize, James?

CARVILLE: I always insist, the last two words, with Secretary of State Clinton and any conversation we have -- and they have always been, "Yes, ma'am."

(LAUGHTER)

So, whatever she wants, I'm delighted to do.

KING: James Carville and Mary Matalin, we are -- we are thrilled to have you back with us, together. We will see you again on "State of the Union" in the near future. Enjoy what looks like a beautiful morning, there in New Orleans.

(CROSSTALK)

KING: Take care, guys.





KING: During President Obama's time in office, we've traveled to 17 different states to hear your concerns and opinions. A unique perspective on the first 100 days from people we've been lucky to meet all across the country, next.

(COMMERCIAL BREAK)

KING: We launched STATE OF THE UNION the weekend of the Obama inauguration, promising to chronicle the big issues here in Washington and also to come see how the debates affect you. Our first of 17 states in these 100 days was Ohio, where on a factory floor, we asked the man about to make history to assess the many challenges and the moment.

(BEGIN VIDEO CLIP)

KING: You took your family to the Lincoln Memorial.

OBAMA: Now, this is a good story. I love the Lincoln Memorial at night. We go and look at the Lincoln Second Inaugural, Sasha looks up and she says that's a long speech. Do you have to give one of those? I said, actually, that one's pretty short. Mine may even be longer. At which point, the Malia turns to me and says, first African American president. Better be good.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time, but know this, America, they will be met.

(END VIDEO CLIP)

KING: A hundred days, of course, is far too soon to judge whether this new president will get his way and whether his way will work. But in our travels to 17 states in those 100 days, from Vermont and New York in the Northeast to Nevada and Arizona out in the Southwest, a fascinating look through your eyes of the many challenges, the uncertainty, and right here early on in Peoria, Illinois, of the pain.

(BEGIN VIDEO CLIP)

(UNKNOWN): I don't want to be on unemployment. I have never been on unemployment before.

KING (voice-over): For John and Mary Beth Fagan (ph), a double whammy. Both worked at Caterpillar, both out of work effective Friday. Three children, two cars and a mortgage.

(UNKNOWN): If things really got that bad, I would probably volunteer to go back overseas, and that's pretty bad to say.

KING: You would volunteer to go to Iraq or Afghanistan?

(UNKNOWN): For my family, I would, yes.

(END VIDEO CLIP) KING: One swift achievement in the first 100 days was passage of a $787 billion economic stimulus. The president signed it into law less than one month into his administration.

(BEGIN VIDEO CLIP)

OBAMA: We have begun the essential work of keeping the American dream alive.

(END VIDEO CLIP)

KING: Just a few weeks later, a $75 billion administration plan to help millions of homeowners make their mortgage payments.

Another bold and controversial White House move, forcing the CEO of General Motors to step down as a condition for more government bailout money.

(BEGIN VIDEO CLIP)

OBAMA: This restructuring, as painful as it will be in the short-term, will mark not an end, but a new beginning for a great American industry, an auto industry that is once more out-competing the world.

(END VIDEO CLIP)

KING: Speaking of the auto industry, we have visited a handful of states with auto plants over the past hundred days, including Ohio, Michigan, Indiana, and down here in Springhill, Tennessee, many union autoworkers told us they believe the president is overreaching.

(BEGIN VIDEO CLIP)

(UNKNOWN): Yeah, we need help, but to say that the president tells a company's CEO that he has to leave, I just don't believe that should happen.

KING: Make no mistake, Brenda Carter says she loves President Obama, but her concerns, a proof of the risks Mr. Obama faces as he takes an aggressive role in the restructuring of GM and Chrysler. The Lansing Grand River assembly line. Modern, clean and efficient. These Cadillacs among GM's best-selling models. And yet, this plant is down from two shifts to one. New cars just aren't selling.

(UNKNOWN): It's scary times right now for a lot of people.

KING: To listen, to look around is to hear and see a way of life fading. Generous Motors was the nickname when Brad Fredline was growing up. Both grandfathers retired from GM. His father, too. (UNKNOWN): You graduated on a Friday and by Monday you were working at the factory, you knew you had a rock solid job for 30 years, you buy a little place up north and you retire. Those days are gone, I'm afraid.

(END VIDEO CLIP) (COMMERCIAL BREAK)

KING: I'm John King and this is what's coming up this next hour of our STATE OF THE UNION report for this Sunday, April 26th, 2009.

Did the United States use torture to get information from suspected terrorists? The story is being covered by virtually every media outlet, but is it being done right? Howie Kurtz will grill a panel of top Washington journalists.

A pair of new movies with journalists as the stars. No problem. Just play ourselves, right? Wrong. Ahead, the real life newspaper man who helped turn Russell Crowe and Robert Downey Jr. into convincing reporters.

And as we continue CNN's special coverage of Barack Obama's first 100 days, we'll get real-world perspective from three former White House staffers who know just how tough things can get inside the Oval Office. That's all ahead this hour on STATE OF THE UNION.

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Ex-CIA Official: Agency Brass Lied To Congress About Interrogations

"A CIA employee of two decades, McCarthy became convinced that 'CIA people had lied' in that briefing, as one of her friends said later, not only because the agency had conducted abusive interrogations but also because its policies authorized treatment that she considered cruel, inhumane or degrading," the Washington Post reported in May 2006.

At The Public Record, Jason Leopold writes:

Last week, former CIA Director Michael Hayden and former Attorney General Michael Mukasey sharply criticized President Obama’s decision to release four “torture” memos writing in an op-ed published in the Wall Street Journal that the “disclosure of the techniques is likely to be met by faux outrage, and is perfectly packaged for media consumption.”

Buried in their column was the claim that the methods the CIA used against “high-value” detainees, such as waterboarding, beatings, and stress positions, “were disclosed repeatedly in more than 30 congressional briefings and hearings beginning in 2002, and open to all members of the Intelligence Committees of both Houses of Congress beginning in September 2006.”


“Any protestation of ignorance of those details, particularly by members of those committees, is pretense,” the former Bush officials wrote.

Several prominent Republicans, including Rep. John Boehner, (R- Ohio), and Rep. Pete Hoekstra (R-MI), the ranking Republican on the House Permanent Select Committee on Intelligence, have echoed Hayden’s claims, in an attempt to show Democrats were complicit because they did not protest when they were briefed about the “enhanced interrogation” program and the techniques CIA interrogators intended to use.

“It was not necessary to release details of the enhanced interrogation techniques, because members of Congress from both parties have been fully aware of them since the program began in 2002,” Hoekstra wrote in an op-ed also published in the Wall Street Journal Thursday. “We believed it was something that had to be done in the aftermath of the 9/11 terrorist attacks to keep our nation safe. After many long and contentious debates, Congress repeatedly approved and funded this program on a bipartisan basis in both Republican and Democratic Congresses.”

On Thursday, House Speaker Nancy Pelosi, who had been the ranking minority member of the House Intelligence Committee, vehemently denied that she was told the CIA planned on waterboarding detainees or intended to use other brutal techniques to try and extract information from “war on terror” prisoners.

"My colleague [Porter Goss], the chairman of the committee, has said 'if they say that it's legal you have to know they are going to use them,'" Pelosi said Thursday. "Well, his experience is that he was a member of the CIA, later went on to head the CIA and maybe his experience is that if they tell you one thing they may mean something else. My experience is that they did not tell us they were using that. Flat out. And any -- any contention to the contrary is simply not true.

“They told us they had opinions from the [Justice Department’s] Office of Legal Counsel that they could, but not that they were' using enhanced techniques, 'and that if and when they were used, they would brief Congress at that time. As a member of Intelligence, I thought I was being briefed. I realized that was not true when I became ranking member.”

Questions about what the Democrats knew about the CIA’s torture program were raised two years ago when it was revealed that the CIA had destroyed 92 interrogation videotapes in November 2005 and that the agency had informed Democratic lawmakers about its plans.

Following that disclosure, Rep. Harman’s office released a February 2003 letter she wrote to the CIA advising the agency against destroying the videotapes. The CIA declassified Harman's letter at the congresswoman's request.

“You discussed the fact that there is videotape of [high-level al-Qaeda operative] Abu Zubaydah following his capture that will be destroyed after the Inspector General finishes his inquiry,” Harman wrote. “I would urge the Agency to reconsider that plan. Even if the videotape does not constitute an official record that must be preserved under the law, the videotape would be the best proof that the written record is accurate, if such record is called into question in the future. The fact of destruction would reflect badly on the Agency.”

Harman's letter did not raise concerns or express disapproval about the CIA's use of so-called "enhanced interrogation techniques." Instead, her letter advised the agency against destroying the videotapes were made out of concern the footage CIA agents captured "would be the best proof that the written record is accurate, if such record is called into question in the future.”

Still, claims that Democrats were fully briefed on the Bush administration’s torture program have been leveled as recently as last December by Vice President Dick Cheney and in books by former Bush officials such as John Yoo, the former Deputy Assistant Attorney General at the OLC who helped draft one of the four memos released last week.

But the veracity of those assertions have been called into question by former CIA official Mary O. McCarthy, who said senior agency officials lied to members of Congress during an intelligence briefing in 2005 when they said the agency did not violate treaties that bar, cruel, inhumane, or degrading treatment of detainees during interrogations, according to a May 14, 2006, front-page story in The Washington Post.

"A CIA employee of two decades, McCarthy became convinced that 'CIA people had lied' in that briefing, as one of her friends said later, not only because the agency had conducted abusive interrogations but also because its policies authorized treatment that she considered cruel, inhumane or degrading," the Washington Post reported.

"In addition to CIA misrepresentations at the session last summer, McCarthy told the friends, a senior agency official failed to provide a full account of the CIA's detainee-treatment policy at a closed hearing of the House intelligence committee in February 2005, under questioning by Rep. Jane Harman (California), the senior Democrat," The Washington Post reported.

"McCarthy also told others she was offended that the CIA's general counsel had worked to secure a secret Justice Department opinion in 2004 authorizing the agency's creation of "ghost detainees" - prisoners removed from Iraq for secret interrogations without notice to the International Committee of the Red Cross - because the Geneva Conventions prohibit such practices."

In 2004, McCarthy was tapped by the CIA's Inspector General John Helgerson to assist him with internal investigations about the agency’s interrogation methods. The report Helgerson prepared remains classified, but the ACLU filed a Freedom of Information Act lawsuit to have it released publicly.

"McCarthy was not an ideologue, her friends say, but at some point fell into a camp of CIA officers who felt that the Bush administration's venture into Iraq had dangerously diverted US counterterrorism policy. After seeing - in e-mails, cable traffic, interview transcripts and field reports - some of the secret fruits of the Iraq intervention, McCarthy became disenchanted, three of her friends say," the Post reported.

In May 2005, just a few months after the CIA briefed Congress on interrogation methods, Sen. Jay Rockefeller, ranking Democrat on the Senate Intelligence Committee, requested “to see over a hundred documents referred to in [Helgerson’s] report on detention inside the black prison sites," New Yorker reporter Jane Mayer wrote in her book, The Dark Side. "Among the items Rockefeller specifically sought was a legal analysis of the CIA's interrogation videotapes.

"Rockefeller wanted to know if the intelligence agency's top lawyer believed that the waterboarding of [alleged al-Qaeda operative Abu] Zubaydah and [alleged 9/11 mastermind] Khalid Sheikh Mohammed, as captured on the secret videotapes, was entirely legal. The CIA refused to provide the requested documents to Rockefeller.

"But the Democratic senator's mention of the videotapes undoubtedly sent a shiver through the Agency, as did a second request he made for these documents to [former CIA Director Porter] Goss in September 2005."

The May 2005 request from Rockefeller took place during the same month that Steven Bradbury, the former head of the OLC, wrote three legal opinions reinstating the torture techniques his predecessor, Jack Goldsmith, had withdrawn.

Bradbury’s memos, released last Thursday, include several footnotes to Helgerson’s report one of which states that the CIA used waterboarding “with far greater frequency than initially indicated” and used “large volumes of water” as opposed to the smaller amount the CIA said it intended to use. In fact, Bradbury's memos, while authorizing brutal techniques, also disputes the conclusions of Helgerson's still classified report that the interrogation techniques violated the Convention Against Torture.

According to a November 9, 2005 story in the New York Times published the same month 92 interrogation videotapes were destroyed, Helgerson’s report “raised concern about whether the use of the techniques could expose agency officers to legal liability.”

"They said the report expressed skepticism about the Bush administration view that any ban on cruel, inhumane and degrading treatment under the treaty does not apply to CIA interrogations because they take place overseas on people who are not citizens of the United States," the Times reported. "The officials who described the report said it discussed particular techniques used by the CIA against particular prisoners, including about three dozen terror suspects being held by the agency in secret locations around the world.”

Mayer reported that Helgerson’s report “known as a 'special review,' was tens of thousands of pages long and as thick as two Manhattan phone books. It contained information, according to one source, that was simply 'sickening.'"

“The behavior it described, another knowledgeable source said, raised concerns not just about the detainees but also about the Americans who had inflicted the abuse, one of whom seemed to have become frighteningly dehumanized. The source said, ‘You couldn't read the documents without wondering, 'Why didn't someone say, "Stop!'""

Mayer wrote that Vice President Dick Cheney stopped Helgerson from fully completing his investigation. That proves, Mayer contends, that as early as 2004 "the Vice President's office was fully aware that there were allegations of serious wrongdoing in The [interrogation] Program."

"Helgerson was summoned repeatedly to meet privately with Vice President Cheney" before his investigation was "stopped in its tracks." Mayer said that Cheney's interaction with Helgerson was "highly unusual."

As a result, McCarthy "worried that neither Helgerson nor the [CIA’s] Congressional overseers would fully examine what happened or why," according to the Post report.

McCarthy told a friend, according to the Post’s account: "She had the impression that this stuff has been pretty well buried. In McCarthy's view and that of many colleagues, friends say, torture was not only wrong but also misguided, because it rarely produced useful results."

In April 2006, 10 days before she was due to retire, McCarthy was fired from the CIA for allegedly leaking classified information to the media, a CIA spokeswoman told reporters at the time.

In October 2007, Hayden ordered an investigation into Helgerson’s office, focusing on internal complaints that the inspector general was on “a crusade against those who have participated in controversial detention programs.”

The CIA said McCarthy had spoken with numerous journalists, including The Washington Post's Dana Priest, who in November 2005 exposed the CIA's secret prison sites, where in 2002 the CIA videotaped its agents interrogating a so-called high-level detainee, Abu Zubaydah.

Following news reports of her dismissal from the CIA, McCarthy, through her attorney Ty Cobb, vehemently denied leaking classified information to the media. McCarthy, who is now in private practice as an attorney, did not return calls for comment.

The CIA said she failed a polygraph test after the agency launched an internal investigation in late 2005. The agency said the investigation was an attempt to find out who provided The Washington Post and The New York Times with information about its covert activities, including domestic surveillance, and it promptly fired her.

After Hayden ordered launched an investigation into Helgerson’s work, the Washington Post reported, citing unnamed sources, that in 2002 Pelosi, Sen. Bob Graham, D-FL, and Rep. Jane Harman, D-CA, and a handful of Republican lawmakers, were “given a virtual tour of the CIA’s overseas detention sites and the harsh techniques interrogators had devised to try to make the prisoners talk.”

“Among the techniques described [to the lawmakers], said two officials present, was water-boarding, a practice that years later would be condemned as torture by Democrats and some Republicans on Capitol Hill,” the Post reported. “But on that day, no objections were raised. Instead, at least two lawmakers in the room asked the CIA to push harder, two US officials said.”

The Post story also made identical claims that Hayden and Mukasey leveled in their Wall Street Journal column last week: that Pelosi and other Democratic leaders were privately briefed at least 30 times. Those briefings, according to the Post, “included descriptions of [water-boarding] and other harsh interrogations methods.”

But Graham disputed claims that he and other members of Congress were briefed about the interrogation program.

“Speaking for myself as chairman of the Senate Intelligence Committee from mid-2001 to the end of 2002, I was not briefed on these interrogation techniques,” Graham told National Public Radio Thursday . “[I] am frankly very frustrated that there are these allegations made that everybody knew about it. I think the policy of the Bush administration was to try to bring as many people into the net when they were going to engage in some questionable activity in order to give them cover. In this case, I was not in the net.”

A declassified narrative released Wednesday by the Senate Select Committee on Intelligence says about the politics of the Bush administration’s torture program says Intelligence Committee chairs in both Houses were briefed about the interrogation program in 2002 and 2003. What they were told, however, remains a mystery.

In an interview with Newsweek last month, Sen. Dianne Feinstein, who now chairs the Senate Intelligence Committee and has launched a “review” and “study” of the CIA’s interrogation methods, said, “"I now know we were not fully and completely briefed on the CIA program.”

Feinstein was reacting to a secret report by the International Committee of the Red Cross that was leaked, which described, in shocking detail, the techniques used to interrogate 14 “high-value” detainees.

Interestingly, the magazine quoted an unnamed “U.S. Official” who disputed the charge, and claimed, in language nearly identical to what Hayden wrote in the Wall Street Journal and what was leaked to the Washington Post, “that members of Congress received more than 30 briefings over the life of the CIA program and that Congressional intel panels had seen the Red Cross report.”

Whether that unnamed official was Hayden is unknown. A representative for the former CIA chief did not return calls for comment.

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Todd Palin Is The Man For Now...

...according to Esquire magazine:



His eighteen-year-old daughter is about to go into labor; his future son-in-law's mother was just busted for dealing OxyContin; his snowmachine still isn't ready for the two-thousand-mile Iron Dog race; little Trig needs to be changed; Willow needs to be picked up from school; his wife won't be home for hours; and now, for some reason, Wasilla PD is banging on the door. But fear not. He can handle this.

Two cops. They don't ring, they knock. Todd is sitting on his couch, facing the big double-paned windows that look out on his backyard and Lake Lucille. His plane, a 1958 Piper Cub, is out there on the shore, in the snow. It's mid-December, and the lake is cold enough, the ice thick enough, to put skis on the plane now, something he's been meaning to do. There are lots of things he's been meaning to do. He's been meaning to install a security gate at the turn-in to his driveway. During the campaign, the Secret Service had a little checkpoint there. They had a boat out on the lake, too, with a couple agents in it. Good guys, all of them. He kind of misses having them around. He figures that would be a great job, if you were young and single and didn't have a family. Todd liked one of the agents so much — the guy they called Surf because he was from California — that he took him out snowmachining. But those guys have all been gone for months now, and Todd still hasn't gotten around to putting up a security gate. Anyone can just walk up to the front door and knock, not ring.

The cops are a man and a woman. He's big, she's small. They're standing out on the welcome mat, near a weathered American flag and the huge bleached vertebra of an arctic whale. They're in uniform, and Todd's sort of in uniform, too. He's wearing what he pretty much always wears: Carhartt jeans and a Tesoro Iron Dog T-shirt. This particular T-shirt is from the 2005 race. He's competed in the two-thousand-mile race so often that he could wear a different Iron Dog T-shirt every day for two weeks without doing laundry. Not that he doesn't do laundry. Four girls live in this house. He does a lot of laundry. There's a big pile of it on the kitchen table right now, needs folding. There are dishes in the sink, too, that need to be washed, and a whole bunch of toys and clothes lying around that need to be picked up. He lets the cops in and they stand in the foyer next to more than a dozen pairs of shoes, only one of them Todd's.

"Good morning," Todd says.

"Good morning," the guy cop, Sergeant Kelly Swihart, says. "Got a minute? The deputy chief asked me to stop by. Have you heard that Piper was involved at the church when all this stuff happened between Molly and Mike?"

Todd doesn't have any idea what Sergeant Swihart is talking about. He knows whom he's talking about, of course. Molly and Mike. Molly McCann and Mike Wooten. Todd's sister-in-law and her ex-husband. And Piper. Piper Palin. Todd's daughter. Seven years old. He named her after that fifty-year-old plane of his. And of course Todd also knows that plenty of stuff has happened between Molly and Mike, not to mention all the stuff that's happened between Mike and the rest of the family. Todd still talks about all that stuff so often that his wife sometimes tells him to just "drop it," as though bad memories and bad blood were things you could just bury in a garage somewhere. But Todd has no idea what particular stuff Sergeant Swihart is talking about today. Or how Piper was involved. So he shakes his head.

"What's the latest on that? I didn't hear."

"Well, we're in the middle of the investigation," Sergeant Swihart says. "We got information that Molly was in the van, and she was with her in the vehicle. So we're just trying to confirm she was or wasn't in the van."

"Piper?" Todd asks, meaning was it Piper that the cops are trying to confirm was in the van?

"Piper," Sergeant Swihart says. "Make sure all our bases are covered. It was the night they had the play at the church."

"Okay," Todd says. "What investigation is going on? Something with Wooten?"

"Yeah, Wooten reported that he was talking to his kids in Molly's van, and Molly shut the door on him and caused him injuries."

"Oh really," Todd says.

"So we're just trying to follow up and make sure we get a complete understanding of what's going on."

"What day was that again?" Todd asks.

"I don't remember what day it was. Craig Robinson's the case officer, but he's in some meetings and the deputy chief asked me to stop by." Todd's been living in Wasilla, a forty-mile drive north of Anchorage, since before there was such a thing as the Wasilla Police Department, and he knows some of the cops who work there pretty well, but he doesn't think he's met these two before.

"Piper is with Molly a lot," Todd says. Todd's got five kids, and those five kids have got sixteen first cousins, and since the whole extended family lives in the same area, the parents all take advantage of one another, swapping duties, filling in, shuttling children to and from school or basketball practice or plays at church or whatever. He tries to think where he might have been on the night of the play at the church, whichever night that was. He's not sure. And he's still not sure exactly what these cops want, either.

"You want to talk with Piper? Or you just want to confirm that she was in the van?"

"If she was in the van, we'd like to talk with her if possible," Sergeant Swihart says, then pulls out his cell phone. "Lemme call the chief real quick and see if I can get what date that was."

"Is she in school?" the lady cop asks.

"What?" Todd says.

"She in school?"

Todd nods, and then his own phone starts ringing. It's a new BlackBerry, but one with an old-fashioned ringtone that sounds as though it's coming from a wired phone. He pulls the phone from its holster, looks at it. It's his wife.

"Hello," he says. "I'm a little busy right now. I'll call you back. Yeah. Yeah. Bye."

He and Sergeant Swihart hang up at almost the same time.

"It was the tenth, Wednesday night," Sergeant Swihart says. "And so if she was there, we want to just make sure we cover all the bases."

"Well," Todd says. "I'll find out if she was there. And then how do I get ahold of you?"

"Lemme give you my card with my cell phone and all that."

Todd takes it.

"All right. Well, thanks, you guys, for checking in. I'll find out and call you back. Be safe. Keeping busy?"

"It's getting there," Sergeant Swihart says. "That time of year."

The door snaps shut behind them. Todd walks over to the kitchen table and puts Sergeant Swihart's card down beside the pile of unfolded laundry. He walks back to the couch, stepping around a baby quilt and a play set and a molded polyurethane infant chair called a Bumbo.

The house is an open-concept design, with no walls between the kitchen and the living room and the foyer. There's a fake Christmas tree in the corner, and a caribou head hangs above a huge entertainment console that contains a big-screen TV and a bunch of framed family photos. Like most of the photos in this house, they're formal portraits, posed. Todd sits back down on the couch. When he'd taken the clothes out of the dryer earlier, he'd found that he'd left a screwdriver in the pocket of one of his other pairs of Carhartts, and he'd removed it and put it in the pocket of the Carhartts he's currently wearing. He feels that screwdriver against his leg now, fishes it out, and spends a little while slowly rolling it between his hands, looking toward his windows with their view of the lake and his plane without its skis.

"Trigby! Crazy boy!"

A girl's voice. His oldest daughter, Bristol. Age eighteen. Todd puts the screwdriver down on a coffee table in front of the couch, looks over his shoulder, and smiles at Bristol as she comes down the stairs from the second floor. She's wearing jeans and a baggy sweatshirt. Baggy or not, you can still see her belly underneath. Official due date is a week away, but everyone knows due dates are just educated guesses. She's got her baby brother with her, eight-month-old Trig, and he's a case in point: showed up almost a month premature. He's dressed just like his big sister: jeans and a sweatshirt. Most days, she and Todd are his main caregivers.

Bristol hands Trig over to Todd, who balances his son on his knees and juts his chin forward and makes snorting noises at him. Trig grunts happily back, reaches out and grabs ahold of his dad's lower lip. Todd pulls his head slowly away till his lip snaps back into place, then looks over at Bristol again, who's searching for shoes in the heap by the front door. She's getting ready to drive into town.

"Where's that car seat?" Todd asks. "In the Jetta?"

"No, the car seat's in Mom's."

"Just the base," Todd corrects her. "Are you taking the Jetta or the truck?"

"The truck. Do you want us to get Willow?"

"I'm gonna get Willow," Todd says. "But just call me."

Bristol leaves and Todd turns back to his son. "Doo. Doo. Doo doo! Hi!"

Back when Surf and the rest of the guys from the Secret Service were around, they had a code name they used for Todd. They called him Driller. They called him that because he works on the oil and natural-gas fields of Alaska's North Slope. He's worked there since he was in his twenties, and though he's been on leave for the last few months, he'll be starting back there again soon. Todd didn't mind his code name, but he knew it was a little misleading. He's not a driller. What he is is something called a production operator. He monitors the machinery at the plant and makes sure the complicated network of pumps and turbines and separator vessels does what it's supposed to, keeping the oil flowing. One of the things he likes about his job on the slope is the schedule: He usually works one week on, one week off. So when he's home, he's really home, and that's a good thing, because it's complicated here, too.

His BlackBerry rings again. It's his sister-in-law Molly. He props the phone between his ear and shoulder and continues to bop Trig up and down on his knees as he fills her in on the visit from the cops. He doesn't have her on speakerphone, but she has a voice that carries.

"I don't know why they want to talk to the girls or whatever," she says, sounding exasperated. "Why are they digging, digging?"

Todd shrugs into the phone.

"I'll catch up with you later," he says. "You got Piper?"

"Yeah."

"Okay."

His BlackBerry goes back into its holster, and he turns his attention back to Trig.

They’ve torn the sled half apart, but it still looks like a beast. More than any other vehicle, snowmachines have faces. The high forehead of the windshield slopes down toward two deep-set, gleaming headlights, and the nose flares forward from there, toward the snout, where sharp vents are cut into the shell a nostril-space apart. One of the brands that sponsors Todd and his Iron Dog racing partner, Scott Davis, is called Arctic Cat, and the company aims for a certain feline look in its sled design, but what it achieves is a little different. The sled's front end looks a lot like the face of one of the creatures from Where the Wild Things Are.

Todd at work on his snowmachine. "I did a couple of years of college, but I was one to learn with my hands, hanging out in my grandpa's shop while he was building wood boats years ago," says Todd. "That's a lot of my heritage. Just watching him, his hands."

Todd and Scott are lying underneath, reratcheting some bolts onto its frame. Todd has spent a good chunk of his forty-four years lying underneath snowmachines. The first one he ever rode was a Montgomery Ward Sno-Jet that his dad bought. He figures he was seven years old. The first he ever owned was a 1974 Polaris 250 Colt, $750, brand-new. He talks about that sled with more affection than he talks about his first car, which makes sense, because where he grew up, in Dillingham, a fishing community just off the lip of the Bering Strait, sleds are cars. You can only get to Dillingham by boat or plane, and in the wintertime, which lasts a long time, snowmachines are pretty much the only way to get around.

"They'll be tough," Scott says about one of their top competitors this year. "They're a little more measured than we are."

"You don't try to win the race the first day," Todd says. "It's gotta be like a college football season. There are so many variables. Mother nature was kind last year."

"She has a tendency to be a bitch."

"Mother nature has won this race every year," Todd says.

"That's true."

"Always wins."

Scott's got a can of Loctite in one hand, and he sprays the stuff over the bolts they just tightened. "Those things ain't coming off," he says. "If we got those things coming off, we got a problem."

The two scramble out from underneath the sled, wipe their hands on rags. They're in a big garage, Scott's, in a little town called Soldotna, a couple hundred miles southwest of Wasilla. Todd woke up at 4:00 this morning, drove three and a half hours to get here. In a few hours, he'll get back into his Jetta, grab some food to go from Taco Bell, and drive back to Wasilla. It's Saturday, and his wife's got Trig. She took him and the rest of the kids to a basketball tournament that Willow, their middle daughter, is competing in. Todd would have liked to go to the game as well, but he knows this is important, too. Everybody's gotta have that one thing that they're really into, that belongs to them, that they really like to do. And one of the deals in his marriage is that they've gotta support each other in whatever it is that the other really likes to do. So Todd steps up, does the extra work around the house, puts out the fires that need putting out so Sarah can pursue her political career. And then she, and the rest of the family, understand that this time of year, Todd's gonna duck out of town when he can and spend a day with Scott, working on their sleds.

The sleds are coming along: They've fitted them with additional gas tanks, sawed off pounds of extraneous metal and plastic, swapped in new Öhlins shocks, and made hundreds of other tiny tweaks and adjustments. The Öhlins cost about $2,500 a set, but they're worth it. You do this long enough and you learn where to scrimp and where to splurge. You learn all sorts of things. A long time ago they learned that plastering their faces with duct tape was one way to help ward off frostbite. Then they learned, on a particularly cold day, that sometimes duct tape isn't enough, that at the end of the day, when you pull it off, you might find a lot of dead, frozen flesh sticking to its backside. So they use foam-backed medical tape now, which works better. Little things like that. Little things like those bolts Scott just Loctited on.

"Something that big can take you out of the race," Todd says, putting his fingers together a bolt's-length apart from each other. "That big!" He shakes his head. "A little hole in your piston. A little hole in your gas tank. And so that equates to a size. A number. And life is about a number, you know? The numbers in your bank account. The number that your doctor gave you. The alphabet and numbers, period."

All sorts of numbers have shaped the contours of Todd's life. You could start with the number 97, which is the number of electoral votes that stood between his being here right now and his being in Washington, D. C., married to the vice-president. There's the number 5, which is the number of kids he's got. Or the number 0.13, which is the percentage chance that a particular American kid, like Trig, will be born with Down syndrome. There's the number of days since his eldest son, Track, last called from where he's stationed in Iraq, and the number 314, which is the number of U. S. soldiers killed in Iraq last year. There's the number 40, which is the number of dollars you can buy a barrel of oil for these days, and the number 74, which is the number of dollars his wife projected the price per barrel would be in her latest state budget. The newspapers and TV stations are all currently hammering her about the discrepancy between those two numbers. There's the number 2.70, which was the highest dollar price per pound of salmon when Todd was growing up in Dillingham, a fishing community, and the number .50, which was the price per pound in the wake of the Exxon Valdez spill. The diminution altered Todd's birthplace forever, making seasonal commercial fishing a less viable career path and rechanneling the career aspirations of kids like Todd. "All I ever wanted to do growing up was be a commercial fisherman," he says. "Fish in the summer and play in the winter."

One hundred eighteen is the number of horsepower that the engines in Todd's and Scott's racing sleds can output. There are plenty of other, more powerful, faster sleds out there. There are sleds that people juice up and turbocharge so they output 350 horsepower, and you can buy videos with titles like Sled Porn that show those sleds cruising almost vertically up steep mountain peaks, a spectacle like a Warren Miller film run in reverse. Todd's seen some of those movies, but it's not anything he'd ever like to do himself.

"I like going from point A to point B," he says. "And those guys like going straight up. You've got to choose what you'd like to do."

Todd digs around in his fridge, looking for something to eat. He'd asked the kids to pick up bread yesterday, but it looks like they forgot. You can divide up duties, delegate, set up whatever system you want, but sometimes things still don't get done. And unless you want an ulcer, you come to terms with that. He grabs a brick of cheddar cheese and a disk of sliced bologna from the fridge, a box of Ritz crackers and a can of Campbell's tomato soup from a cabinet, and a can opener and a spoon and a knife from a drawer. He makes cheese-and-bologna cracker sandwiches, which are almost as good as cheese-and-bologna bread sandwiches, and eats them standing up, while he heats the soup on the stove. He likes to cook, knows a great recipe for salmon stew, but it's hard to find the time. His favorite food is something called akutaq. Eskimo ice cream. You take lard and sugar and beat it till it's creamy, then throw in a bunch of salmonberries. His grandmother taught him how to make it. She still sometimes calls him the Akutaq Kid. He never learned how to speak Yupik, her native language. He wishes he would've, but that's the way it is sometimes.

When the soup is ready, he pours it into a bowl and walks around to the other side of the kitchen island, pulls a chair up to the black-tile tabletop, and eats. He just got back from a short forty-mile training ride out at Big Lake, where the Iron Dog course begins. He hears the front door open and then the sound of parkas being sloughed off. Bristol comes around the corner into the living room, holding Trig. His middle daughter, Willow, follows behind, her eyes down, one thumb tapping on her cell phone. She's fourteen. Once, when they were out somewhere together, Willow asked Todd to stop texting on his own phone, not because she wanted his undivided attention but because she was embarrassed by how slow and clumsy he was at it.

Bristol had a doctor's appointment this morning and Todd hasn't seen her since.

"How you doing?" he asks her, nodding at her belly.

She smiles.

"One centimeter dilated!" she says.

Willow, still looking at her phone, walks up behind her dad's chair and tousles his hair.

"Hi, Dad," she says. "My friend Cassidy's coming over."

Todd puts his soupspoon down and stretches his arms out toward Bristol. She gives him Trig, who's still sleeping. Todd takes him to his chest, and Trig rouses enough to nuzzle his cheek into Todd's shoulder.

"What'd they say? At the hospital?" Todd says to Bristol.

She shrugs.

"We'll see," she says. "Grandma says tonight!"

Todd shakes his head, smiles.

"Not today," he says. "I'm busy."

Willow closes her cell phone.

"Cassidy's on her way, Dad," she says. "Okay? Okay, Dad?"

Todd cranes his neck up and back, looks over his Trigless shoulder at Willow.

"I'm going to town," he says.

"Um, why?"

"Some meetings," he says.

"You're taking Trig," Bristol says to Willow.

"What? No!"

Bristol smirks. "Willow friggin' never watches him," she says.

"You're watching the baby," Todd says to Willow, his tone a statement of fact. Willow sucks her teeth, takes a dish towel, and tries to snap it at her dad's back. The towel just flops. Then she tousles his hair again, stops, squints down at it.

"He's so gray!" she says. "Oh, my Lord!"

"All of this is from you," he says. He strokes his beard. "Can't wait till it's all white and I have a white goatee. I'm gonna start smoking a pipe! Okay? Since I'll be a grandpa."

"You'll be a grandpa by tonight!" Willow says.

"Tomorrow night," Todd says. " 'Cause tomorrow I gotta go work on sleds in Soldotna."

Trig wakes up. He pushes off of his dad's chest, stares at him, groggy.

"Hi, bunny bear," Todd says. "Hi son, son. Oh, you're so tough!" He sits him on his lap, takes hold of one of his hands and pats it against his opposite palm, then does the same with the other hand. He starts singing Pat-a-Cake, and then his phone rings. He picks up.

"Hi, where you at? Really? No, he just woke up. Hold on a second."

He holds the BlackBerry up against one of Trig's ears, and Trig's eyes open a little wider. He gurgles softly, looks up at his dad. Todd takes the phone back.

"He was listening to you! I didn't figure you were getting home till late tonight. All right. Okay. I was gonna head down to Soldotna tomorrow. But I think everybody's schedule is kind of resting on Bristol's schedule. Okay. Gotta go."

He hangs up.

"She'll be home in an hour," he announces to the girls. And then, to Trig: "Hey, hey, hey, hey, you talked to your mama. You talked to your mama!"

He clears his soup bowl from the table, puts it in the sink, starts rinsing it out, along with the pot he heated the soup in.

"Gotta clean up before the boss comes home," he says.

The boss’s dad’s house is easy to spot because of the ziggurat of tangled moose and caribou antlers that rises up just to the side of the driveway. If you walk in through the garage-side door, you'll spot a yellowing old Far Side cartoon tacked to the wall just inside. It shows a bunch of cavemen outside a cave with a pile of bones near the entrance. The caption reads: "Of course, prehistoric neighborhoods always had that one family whose front yard was strewn with old mammoth remains." Todd comes through this door early most mornings and adds a few more boxes of mail to the pile already stacked up here, next to the skull of an extinct bison that perches atop one of Chuck Heath's old snowmachines. The mail is all addressed to Chuck's daughter, Todd's wife — sometimes the address box is just her name followed by "Alaska." There's a lot to go through, and everybody in the family has to pitch in.

A short stairway leads from the garage into the house, where a long hallway flanked by bedrooms and bathrooms funnels toward the kitchen. Chuck and a friend are sitting at the table. "I went to the hygienist yesterday," Chuck says. "Her husband caught several marten up Buffalo Mine Road. And Fred Deiser was here yesterday, and he's got seventeen over there this year!" The mink-sized, silky brown pelts go for about a hundred dollars a pop.

"Already? See, he's in a good spot!" says Chuck's friend, Adrian Lane. Four decades ago, Adrian was a student of Chuck's, the first year Chuck taught middle school. The years since have collapsed the relative age difference between them, and they've become friends. Adrian tells Chuck that he himself has caught fourteen marten so far this winter.

"You got that many?" Chuck says, leaning back in his chair, an eyebrow cocked. He's wearing a T-shirt and sweatpants. He's seventy years old, lean and strong, though one of his knees has been acting up lately, giving him the hint of a limp. Adrian's bigger than Chuck, with a wide, pleasant face and eyes that are a little crossed.

"Yeah, but I've missed so many, it's unbelievable," Adrian says. "Stupid wolverine." They talk a little about bait. Some people put moose meat in a jar, let it fester for a few months. Others buy jars of prepackaged jelly made from the ground-up scent glands of skunks. You've gotta be careful the jar doesn't break in your pack. Adrian's been using chunks of beaver flesh for his traps, and that works well, though the downside is it sometimes brings in stupid wolverines. "He was raiding every pot I had!" he says.

A few feet above Adrian, hanging from a wall, is another wolverine, one that Chuck killed years ago and stuffed. It's got one of those vicious snarls that taxidermists always put on wolverines. Chuck's house is full of taxidermy. From his kitchen table he can see the opposite wall of his living room, and mounted on that wall, in no particular order, are a mountain lion, a marten, a pheasant, and a manhole-sized Alaskan king crab. Those are just the complete animals. The wall also bears the heads of an elk, a bighorn sheep, and a mountain goat, as well as the stretched-out pelt of a timber wolf.

Chuck asks Adrian how much snow has fallen in the area where he's been setting his traps.

"Oh, there's plenty of snow up there," Adrian says. "The only people who've been in there are the mushers and the snowmobilers."

The mention of snowmobilers turns the conversation from trapping to Chuck's son-in-law Todd and some of the situations Todd's been in on his sleds. Skipping like a rock across an unexpected patch of open water in — 40 degrees. Or getting lost in a snowstorm hundreds of miles from anywhere. Or flipping over and landing with his arm literally inside the spinning gears of his sled's tread, where an inch's movement one way or another would have ripped it right off at the shoulder. And of course there's that thing that happened last year. Chuck gets up and plucks a photo album from a bookshelf, flips through it till he finds what he's looking for. It's a close-up of two pale legs, both horribly mottled with blood and bruises. It could be a crime-scene photo, something a forensics investigator might mull over for clues. The legs are Todd's. The injuries are some of the ones he got last year, when an old snow-covered oil drum near an abandoned Air Force base along a remote stretch of the Yukon River bucked him off his snowmachine and sent him flying seventy feet. The landing broke his left arm and banged up the rest of him. At the time of the accident, Todd had been nearing the end of the Iron Dog. He ended up being towed across the finish line by his partner, Scott. The broken arm made the headlines, but Chuck thinks this picture tells more of the story. Riding with a broken arm is one thing. You can ride with a broken arm. But riding with legs like that, where every jolt of the snowmachine is a punch to a bruise, would be something else. He figures nobody really understands how much pain Todd was in. And he figures Todd would never talk about it himself.

"There's no BS there," Chuck says. "He won't exaggerate or tell you tall tales. Gotta kind of pry to get things out of him."

"Oh, yeah," Adrian says. "He's typical. The natives are usually quiet."

"Yeah," Chuck says. "He's half-native, and very quiet."

Chuck's youngest daughter, Molly, comes in without knocking. She's got two of Chuck's grandkids in tow. It's been a couple days since Mike Wooten filed his complaint.

"Hey, Molly," Chuck says. "Give me your key. I want to see what your door does!"

Chuck and Adrian each put on a pair of the bulbous white rubber military surplus shoes that all Alaskans call "bunny boots." Chuck opens the driver's-side door of Molly's Honda Odyssey, climbs in, and turns the key in the ignition. The radio comes on: "Frosty the Snowman." Chuck presses a button and the sliding door on the passenger side opens wide, revealing the gaping maw that allegedly chomped shut on Mike Wooten's arm a few days ago. Adrian sticks his hand inside the van and Chuck presses the button again, and the door slides smoothly shut until it hits Adrian's forearm. Adrian screams, but he's joking. The door's kid-proofed and recoils automatically. Adrian and Chuck spend another couple of minutes taking turns shutting the door on each other as the weak midafternoon subarctic sun fades to twilight.

Todd, Piper, Sarah, and Trig on Super Bowl Sunday. In response to the rumor that Trig was actually Bristol's baby, Sarah's father, Chuck Heath, says, "How can you prove that? Goddammit! I was there when he popped out!"

The closest Todd ever came to dying was right before he got married. It was 1988. The summer fishing season had wrapped up, but he hadn't caught many fish. The price per pound of salmon that year was $2.35, and when prices were that high, you stretched the season as long as you could, even into August, when the weather got bad. He didn't have any other work lined up, so that's what he did, he stretched it. He told Sarah the day to expect him back, and told her that when he returned, they'd go to the courthouse and get married, an act as legal and final as a fancy wedding, but quicker and cheaper. Then he loaded up his skiff and sailed out of town, eight hours away, to a remote spot near Togiak, where he thought he might have better luck. He fished for weeks, in near constant rain, as wet as a fish himself. On the morning of the day he'd promised to be back, he headed home, but the sea roughened and the rain fell harder, and he had to take shelter in a little cove. He anchored the skiff and got to shore and found an empty cabin there, where he dried off and had a bite to eat and a little nap. When he awoke, it was low tide and the skiff was high and dry. He had to wait a few hours before it was floating again, and by that time it was eleven o'clock at night, and though the summer days in Alaska are long, they're not that long. Looking back, he knows he should have stayed in that cabin for another eight hours. But he was twenty-four years old and in a hurry. He steered the skiff out of the cove and back into open water. By the time he began rounding Cape Constantine, the wind and rain had become a boiling howl. He strained to hear the water crashing along the invisible land to port, trying to thread the narrow channel between the shore and the shoals. He didn't actually see the first rogue wave before it broadsided his boat, or the second one that came a minute later, but he knew what they were by the way the deck groaned and twisted under his feet. He'd experienced these sorts of waves before, though never at night, never in darkness. He had a name for them: Hawaii Five-O waves. And as he wrestled with the wheel, trying to steer the bow away from the shore, into the storm, he said to himself that this might be it, that his boat might go down, and he with it.

But his boat stayed afloat, and he did, too, and a few hours later he saw the lights of Dillingham in the distance. Sarah griped about his late arrival, but she wasn't angry enough to put off their plans. They married at the courthouse two days later, moved into an apartment with one of her sisters in Anchorage. That winter he got a job cleaning snow off sidewalks, and she became a customer-service rep for the local utility company. Eventually he scored an apprenticeship with British Petroleum, and eventually she decided she'd like to try running for a seat on the Wasilla City Council.

He survived, she was waiting for him, and now they live here, in a big house that is, this evening, swollen with life.

After finishing up the dishes, Todd starts unboxing a new baby seat for his eight-month-old son, a seat that his pregnant daughter picked up at Target this afternoon. Molly's here now, too, along with a family friend named Barb, and they've brought with them a whole bunch of kids, some of them Molly's, some of them Barb's, one of them Piper. A few of the kids just had gymnastics class, and they start tumbling around the living room. The baby seat has got one of those designs where there are two arms that extend forward on the top of the table and two arms that extend forward on the underside, and the child's own weight helps lever it into place.

"Where's Sarah at?" Barb asks. "She in Anchorage, working?"

"She's coming home," Todd says. "And I'm going in. Twenty years, that's how it works."

"You guys been married that long?" Barb says. She looks at the baby seat. "So little Trig's gonna be sitting in that?" There's a framed photograph of Trig on a windowsill behind Barb, lying in a cradle, dressed up like a Christmas elf.

"It's not a snowmachine, but it'll work," Todd says.

"You see these in restaurants," Barb says. "But you don't see too many anymore. Isn't that slick."

Todd taps the logo. "Eddie Bauer," he says. "Bristol don't mess around!"

Sarah arrives a few minutes later, through the kitchen's side door, from the garage. She's wearing tight blue jeans, a lime-green button-down sweater, and cloggy brown leather shoes. Her hair's in its upswept mode. She says hi and then asks Todd why the Christmas lights aren't up yet. He says something about the cost of electricity and she says that the new LED ones don't use much juice at all. Then she remembers something.

"Oh, guess who came to my office today, Todd. You'll appreciate this. The Orange County Choppers guys! They're making a bike for Alaska's fiftieth anniversary. Paul Sr., he was there in the office. It was cool."

"You mean the guy with the big gray mustache?" Molly asks.

"Yeah," Sarah says.

"I could've taken them snowmachining," Todd says, disappointed. The Orange County Choppers guys had spent some time with them on the campaign trail, in Pennsylvania. Motorheads like Todd, they'd gotten along.

"Next time," Sarah says to Todd. "They're so patriotic!"

Bristol comes into the kitchen with Levi Johnston, her fiancé. He's a good-looking kid, very Abercrombie & Fitch. He says hi all around but doesn't say much more. When he's over here, it's usually just him and Todd and Trig in a house full of women, and the women dominate the conversation. He nods at Todd and Todd nods back.

"Levi got his wedding ring stuck on his thumb," Molly says.

"Levi!" Sarah says. "That's par for the course. That means you're stuck. That's symbolic or something." She pulls a roast out of the refrigerator and calls Levi over and starts showing him how to marinate it. "Now, Levi, look, I'm gonna put this stuff in here..."

Todd ducks out of the kitchen and heads back to the bedroom to change. He's subbing for Sarah at a corporate function tonight in Anchorage. Sarah had been scheduled to attend the function but pulled out because she thought she was going to have to go to a different event in Hooper Bay this evening. Then her flight to Hooper Bay got canceled at the last minute, which is why she's here at home tonight.

The kids start showing off what they learned at gymnastics class.

"Mom, Mom, Mom!" Piper says. "Want to see what I can do?"

"Yes, honey," Sarah says.

Piper does a quick cartwheel, pivots, and smiles back expectantly at her mom.

"That's awesome, Piper!" Sarah says. "Don't sprain your ankle!"

Then McKinley, one of Piper's cousins, does a one-handed back roundoff.

"Oh, my gosh, you're a good little gymnast!" says Sarah. "Piper, do that! Just try that!"

Piper tries, unsuccessfully.

Sarah shakes her head. "You're like your mother," she says. "Not quite the gymnast. But you can run!"

A school assignment Piper brought home a few days ago is taped to one of the kitchen cabinets behind Sarah, next to the fridge. It has the header, "My Mom Is Special," and below that there's a series of printed partial sentences, with Piper's handwritten completions of them: "My mom can do many things. I think she's best at... WERKING." "My mom is as pretty as a... PLANT." "My mom is smart! She even knows... EVERYTHING."

Sarah turns and looks back over her shoulder at Levi, who's peering uncertainly into the oven. "Is it cooking, Levi?" she asks. Then she cocks her head in another direction, toward a nearby bathroom. "Your son wants you to wipe him, Molly," she says. "He's yelling at you."

Todd comes back in a few minutes later dressed in a suit and tie.

"See you," he says. "I'm gonna go."

"Have fun, Todd," Sarah says. "Tell them I said hi. And if they ask you to get up to speak, say — " She zips her lips and shakes her head.

He gives her a look.

"I tried to get Sarah here," he says. "Her flight to Hooper Bay got canceled."

Sarah's eyes widen behind her glasses.

"Don't tell them that!" she says.

Todd walks out smiling.

Todd's Arctic Cat can easily break 100 miles per hour. To prepare for the Iron Dog, he and Scott cut down extraneous weight, tweak the shocks, and add gas tanks. Sarah snowmachines as well — and fast, according to Todd.

A month later, a Tuesday morning, he wakes up at 4:00 again and drives the two hundred or so miles to Scott's garage in Soldotna. The race starts in ten days, and the sleds are almost ready to go. A few more training rides, a few more tweaks, and they'll be set. Scott ordered two big "Team Davis-Palin" decals a couple of days ago, for $300, and one of the things he and Todd are doing today is sticking the decals onto their race trailer. Scott holds one of the decals up to the side of the trailer, and Todd stands back and starts telling him to move one side or the other up or down a little so it's level. A flat-screen TV hangs over a workbench next to Todd, and Todd gets distracted when his wife suddenly appears on the screen. It's a newscast on the local NBC affiliate, and a reporter's interviewing her in front of her office.

Normally Todd uses Google alerts to monitor the media's coverage of his wife. He gets an e-mail sent to his BlackBerry whenever a news story containing the words "Sarah Palin" appears. During the campaign he'd disabled this function, since there were too many stories to keep up with. Now, though, the flow has ebbed, become manageable, and his in-box only floods with alerts every now and then. Three weeks ago, for example, he received a bunch of links carrying the news that state troopers had arrested Levi's mom for allegedly selling OxyContin. All Todd could say at the time was that he hoped there was a bright side: Living in the public eye can sometimes be better than rehab at forcing you to get your life together. There was another spurt of stories a week later, carrying the news that Bristol had given birth to a healthy baby boy, Tripp. And two months after that, Todd's BlackBerry will declare, in a chorus of news briefs, that Bristol and Levi have broken up.

But some important events never made the news at all. Sarah taking Piper to the police station to be interviewed on Christmas Eve, for example, and Wooten's minivan assault complaint being thrown out. And nobody reported how Track made it home from Iraq on a surprise holiday leave that Todd had managed to keep secret from everybody else in the family, and the family managed to keep secret from everybody else.

After a minute or so, the screen cuts away from Todd's wife to a shot of the reporter, standing alone, saying something about what Todd's wife just said.

"That guy's a real jerk," Todd says. He's sometimes tempted to phone editors or producers if a story about his wife rubs him the wrong way. But he knows that would be counterproductive. It's just like, you're a player, and the referee makes a call you don't like, and you bitch: The headline's already there, and accosting the ref only makes you look worse.

Todd's toolbox

He turns away from the TV and gets back to helping Scott level their names on the side of the trailer. In a little over a week, they'll head out on their two-thousand-mile trek through the Alaskan tundra, and a week after that, alerts will inundate Todd's BlackBerry with the news that he and Scott only managed to finish sixth this year. But right now they're still preparing, tightening bolts, going over the numbers. They've been Iron Dog partners for seven years now, which means they've raced fourteen thousand miles together, and probably logged another sixteen thousand tandem miles during training runs. They've been doing this long enough that their partnership has firmed up, with their respective roles established. Out on the trail, Scott leads, setting the pace. Todd hangs back, keeps an eye on the GPS, tries to make sure they're always moving from point A to point B without straying too far off course. For a lot of the race, Todd will ride half-blinded by the icy cloud that Scott's sled kicks up behind it. A lot of riders hate that, being stuck in somebody's wake like that. But that's one of the things about Todd. He doesn't mind riding in the snow dust.

Palin family's shoes

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