Fears of Post-9/11 Terrorism Spur Proposals for New Powers
The Washington Post reports:
The Defense Department has expanded its programs aimed at gathering and analyzing intelligence within the United States, creating new agencies, adding personnel and seeking additional legal authority for domestic security activities in the post-9/11 world.
The moves have taken place on several fronts. The White House is considering expanding the power of a little-known Pentagon agency called the Counterintelligence Field Activity, or CIFA, which was created three years ago. The proposal, made by a presidential commission, would transform CIFA from an office that coordinates Pentagon security efforts -- including protecting military facilities from attack -- to one that also has authority to investigate crimes within the United States such as treason, foreign or terrorist sabotage or even economic espionage.
The Pentagon has pushed legislation on Capitol Hill that would create an intelligence exception to the Privacy Act, allowing the FBI and others to share information gathered about U.S. citizens with the Pentagon, CIA and other intelligence agencies, as long as the data is deemed to be related to foreign intelligence. Backers say the measure is needed to strengthen investigations into terrorism or weapons of mass destruction.
The proposals, and other Pentagon steps aimed at improving its ability to analyze counterterrorism intelligence collected inside the United States, have drawn complaints from civil liberties advocates and a few members of Congress, who say the Defense Department's push into domestic collection is proceeding with little scrutiny by the Congress or the public.
"We are deputizing the military to spy on law-abiding Americans in America. This is a huge leap without even a [congressional] hearing," Sen. Ron Wyden (D-Ore.), a member of the Senate Select Committee on Intelligence, said in a recent interview.
Wyden has since persuaded lawmakers to change the legislation, attached to the fiscal 2006 intelligence authorization bill, to address some of his concerns, but he still believes hearings should be held. Among the changes was the elimination of a provision to let Defense Intelligence Agency officers hide the fact that they work for the government when they approach people who are possible sources of intelligence in the United States.
Modifications also were made in the provision allowing the FBI to share information with the Pentagon and CIA, requiring the approval of the director of national intelligence, John D. Negroponte, for that to occur, and requiring the Pentagon to make reports to Congress on the subject. Wyden said the legislation "now strikes a much fairer balance by protecting critical rights for our country's citizens and advancing intelligence operations to meet our security needs."
Kate Martin, director of the Center for National Security Studies, said the data-sharing amendment would still give the Pentagon much greater access to the FBI's massive collection of data, including information on citizens not connected to terrorism or espionage.
The measure, she said, "removes one of the few existing privacy protections against the creation of secret dossiers on Americans by government intelligence agencies." She said the Pentagon's "intelligence agencies are quietly expanding their domestic presence without any public debate."
Lt. Col. Chris Conway, a spokesman for the Pentagon, said that the most senior Defense Department intelligence officials are aware of the sensitivities related to their expanded domestic activities. At the same time, he said, the Pentagon has to have the intelligence necessary to protect its facilities and personnel at home and abroad.
"In the age of terrorism," Conway said, "the U.S. military and its facilities are targets, and we have to be prepared within our authorities to defend them before something happens."
Among the steps already taken by the Pentagon that enhanced its domestic capabilities was the establishment after 9/11 of Northern Command, or Northcom, in Colorado Springs, to provide military forces to help in reacting to terrorist threats in the continental United States. Today, Northcom's intelligence centers in Colorado and Texas fuse reports from CIFA, the FBI and other U.S. agencies, and are staffed by 290 intelligence analysts. That is more than the roughly 200 analysts working for the State Department's Bureau of Intelligence and Research, and far more than those at the Department of Homeland Security.
In addition, each of the military services has begun its own post-9/11 collection of domestic intelligence, primarily aimed at gathering data on potential terrorist threats to bases and other military facilities at home and abroad. For example, Eagle Eyes is a program set up by the Air Force Office of Special Investigations, which "enlists the eyes and ears of Air Force members and citizens in the war on terror," according to the program's Web site.
The Marine Corps has expanded its domestic intelligence operations and developed internal policies in 2004 to govern oversight of the "collection, retention and dissemination of information concerning U.S. persons," according to a Marine Corps order approved on April 30, 2004.
The order recognizes that in the post-9/11 era, the Marine Corps Intelligence Activity will be "increasingly required to perform domestic missions," and as a result, "there will be increased instances whereby Marine intelligence activities may come across information regarding U.S. persons." Among domestic targets listed are people in the United States who it "is reasonably believed threaten the physical security of Defense Department employees, installations, operations or official visitors."
Perhaps the prime illustration of the Pentagon's intelligence growth is CIFA, which remains one of its least publicized intelligence agencies. Neither the size of its staff, said to be more than 1,000, nor its budget is public, said Conway, the Pentagon spokesman. The CIFA brochure says the agency's mission is to "transform" the way counterintelligence is done "fully utilizing 21st century tools and resources."
One CIFA activity, threat assessments, involves using "leading edge information technologies and data harvesting," according to a February 2004 Pentagon budget document. This involves "exploiting commercial data" with the help of outside contractors including White Oak Technologies Inc. of Silver Spring, and MZM Inc., a Washington-based research organization, according to the Pentagon document.
For CIFA, counterintelligence involves not just collecting data but also "conducting activities to protect DoD and the nation against espionage, other intelligence activities, sabotage, assassinations, and terrorist activities," its brochure states.
CIFA's abilities would increase considerably under the proposal being reviewed by the White House, which was made by a presidential commission on intelligence chaired by retired appellate court judge Laurence H. Silberman and former senator Charles S. Robb (D-Va.). The commission urged that CIFA be given authority to carry out domestic criminal investigations and clandestine operations against potential threats inside the United States.
The Silberman-Robb panel found that because the separate military services concentrated on investigations within their areas, "no entity views non-service-specific and department-wide investigations as its primary responsibility." A 2003 Defense Department directive kept CIFA from engaging in law enforcement activities such as "the investigation, apprehension, or detention of individuals suspected or convicted of criminal offenses against the laws of the United States."
The commission's proposal would change that, giving CIFA "new counterespionage and law enforcement authorities," covering treason, espionage, foreign or terrorist sabotage, and even economic espionage. That step, the panel said, could be taken by presidential order and Pentagon directive without congressional approval.
White House spokeswoman Dana Perino said the CIFA expansion "is being studied at the DoD [Defense Department] level," adding that intelligence director Negroponte would have a say in the matter. A Pentagon spokesman said, "The [CIFA] matter is before the Hill committees."
Sen. John W. Warner (R-Va.), chairman of the Senate Armed Services Committee, said in a recent interview that CIFA has performed well in the past and today has no domestic intelligence collection activities. He was not aware of moves to enhance its authority.
The Senate Select Committee on Intelligence has not had formal hearings on CIFA or other domestic intelligence programs, but its staff has been briefed on some of the steps the Pentagon has already taken. "If a member asks the chairman" -- Sen. Pat Roberts (R-Kan.) -- for hearings, "I am sure he would respond," said Bill Duhnke, the panel's staff director.
Sunday, November 27, 2005
Fears of Post-9/11 Terrorism Spur Proposals for New Powers
Friday, November 25, 2005
Jim Rogers, investment legend, talks to MoneyWeek about investing in commodities, the price of oil, the new Federal Reserve chairman - and the value of orange juice as a safe haven investment
Money Week Interviews Jim Rogers, "Investment Legend":
Harry Stourton: Let’s start with oil. You’ve been bullish on the price for some time, but now it has fallen from its peaks, what do you think will happen next?
Jim Rogers: Oil has fallen from $70 a barrel to $55. And I think it will go lower – it’s normal to have a correction in any kind of market. But this is a short-term thing. My view is that the next surprise is going to be how high the price of oil stays and how high it goes ultimately. There have been no big oil discoveries in the last 35 years and all the major oil fields are in decline. The UK has been one of the world’s great exporters for 25 years, but it is going to be importing oil within the decade. Malaysia will be importing oil within the decade; Indonesia is now importing oil and has been thrown out of Opec as a result. Mexican production is in decline; the oil fields in Alaska are in decline. Unless somebody finds a lot of accessible oil and finds it soon the price of oil is going to go much, much higher.
HS: What about Saudi? Doesn’t it have the capacity to increase production?
JR: In 1979, the last time Aramco (the Saudi state oil company) had its reserves independently audited, there were 245 billion barrels in reserve. We then didn’t hear from Saudi Arabia for a decade and in 1988 it announced it had 260 billion barrels of oil. Now, Saudi Arabia announces every time that it has 260 billion barrels of oil. It’s the goddamndest thing you ever saw – they’ve produced 63 million barrels of oil in the last 17 years, but their reserves never go up, never go down! Yet all the other fields in the world are in decline. I’m not a geologist, but I know something’s wrong.
HS: So oil companies should really be spending more on exploration?
JR: Yes. Exploring is expensive and they haven’t been doing enough of it because their budgets put the oil price at $28. Well, maybe oil is going to go to $28, but if it goes to $28, buy all that you can cause it ain’t gonna stay there very long! They should be raising their forecasts and hence the amount they spend on finding new oil. Instead, they’ve been spending money buying up other oil companies to increase their reserves, but that does not increase the world’s reserves. It’s great for the CEOs, but it doesn’t do much for the supply of oil in the world.
HS: Do you invest in oil exploration firms?
JR: Not really. Studies show that you make more money investing in commodities themselves than in the shares of companies that produce them. I own Woodside Petroleum, and in the commodities sector as a whole BHP and Rio Tinto, but I’ve owned these for a long time. I wouldn’t buy them now.
HS: What about refining companies?
JR: I don’t own any, but some of the refining firms are making a fortune. There have been no new refineries built in the US for 30 years.
HS: So do you think there is opportunity in the new energy technology sector?
JR: Oh yeah, it’s going to happen – no question, it’s going to happen. But someday, a long way away. Wind power is not all it’s cracked up to be – it’s not that easy. You’ve got to have the right wind and, even in the best places, wind is only effective, say, 40% of the time. Solar energy is not competitive at present prices – it only will be if oil goes to $150 a barrel. New energy firms will end up making money; that certainly will happen as the price of oil continues to go higher and as the availability of hydrocarbons declines. And that may be what brings the oil bull market to an end someday – perhaps in 2018, 2022, whenever this commodities bull market is going to end. Yeah, there’s certainly going to be effective alternative-energy sources, but you won’t be able to get them working competitively in the next decade, no matter how hard you try.
HS: Let’s move on to the metals. Copper is making all-time highs.
JR: Again, nobody is opening any major new copper mines. Phelps Dodge, which I think is the second-largest copper company in the world, says it is just going to continue to develop and maybe enlarge its present mines. Most copper companies have made that same decision; most base metals companies have made that decision. Like oil firms, the big mining concerns are just buying other mining companies to grow instead of spending money on new mines.
HS: So prices will keep going up. You’ve come out often as being bearish on the dollar. It has rallied a lot this year. What are your views on its prospects now?
JR: In 2003 and 2004, everyone was selling the US dollar. It was on the front page of The New York Times for about three days in December 2004. That kind of coverage is always a sure sign that whatever the subject is, it’s about to go the other way. That rally is continuing partly because US has given the multinational corporations these gigantic tax breaks to bring money back into the US this year, so that is what they are doing. I don’t know how much further the rally has to go, but I have a feeling that something may happen to cause the final spike. It could be that Bush is going to pull out of Iraq sooner than expected, or it could be bird flu decimating Europe, but not America. But whatever it is that causes the final spike, I urge you to sell. I am still extremely bearish on the US dollar fundamentally in the long term. I have not sold any dollars for a while, but I plan to sell a lot more when, and if, the final spike comes.
HS: In favour of which currencies?
JR: Maybe the Canadian dollar, the Singapore dollar, the New Zealand dollar. The yen has been very weak recently. I’m not thinking about it right now because the US dollar rally hasn’t finished yet.
HS: We are about to see a regime change at the federal reserve. Ben Bernanke will be taking over from Alan Greenspan. What does that mean for markets?
JR: Disaster. Bernanke will probably ensure the demise of the Federal Reserve. It won’t be completely his fault – Greenspan has laid the foundations – but the problem is that Bernanke doesn’t understand currency markets. He is the guy who said we control the printing presses and we will run them as fast as we have to. He’s the guy who says it doesn’t matter if the US has its biggest trade deficit ever. I’m not the only person who’s getting worried about it. The Iranians are going to start trading oil in non-US dollars next year and there are other people starting to try to figure out what in the hell to do about this situation. Bernanke does not understand that – on the contrary, he thinks there isn’t a problem. You know we’ve had two Central Banks in the US before, they both failed and this one looks like it’s going to fail too.
HS: The long-term issues with the dollar aside, how do you see things panning out for the US economy next year?
JR: The economy has been, and is, slowing and will continue to slow for a variety of reasons. We will probably have a recession next year, but whether it’s short and sweet or the beginning of the end, I don’t know.
HS: That won’t be good for commodity prices will it?
JR: Maybe, maybe not. In the 1970s we had some horrible recessions, hard times all over the world. The UK, despite being one of the five largest economies in the world at that time, went bankrupt. The IMF had to come in and bail it out. But we still had a very good bull market in commodities. That doesn’t mean the same thing will happen this time round, but on the other hand, agriculture commodities are priced so far below their all-time highs it’s hard to see them falling, and the Chinese are not going to suddenly stop eating if America has a recession. They are also not going to stop wanting and needing electricity, many hundreds of millions of Chinese don’t have electricity yet and they are going to get electricity whether the US is in recession or not.
HS: Are you concerned about the global real-estate bubble?
JR: I am certainly worried about the UK, Spain, Netherlands, Australia and some parts of the US. I am short home builders in the US, for example, but in the US there are many states where real estate has done virtually nothing. You can go to Akron, Ohio and they don’t know there’s a real-estate boom going on. On the East Coast and in Florida and California, yes, there has been a bubble, but it is slowing pretty quickly. It looks as if it may have peaked in July and prices are now going down in much of the US. But look back to Iowa or Oklahoma and it looks different. Prices haven’t moved yet, but they will. All those farmers and miners are all going to be making a lot of money in the next 15 years and so prices will go up. In parts of Canada, real estate will continue to rise. And probably the Middle East too. There’s a huge boom there, but in places like that where the next decade will be a prosperous one, real estate will do fine.
HS: You say prices are falling in many parts of the US. How serious a problem is that?
JR: It’s going to be one of the causes of next year’s recession. I know of a building in New York on Fifth Avenue across from the Metropolitan Museum where there are only 12 flats in the building and four of them are for sale and they are not moving. The price war hasn’t started in the building yet, but it will. Inventories are building up in many places and the sellers are starting to realise that it isn’t so easy to sell as it was. At the same time, buyers are thinking, “Hey, we don’t have to rush anymore.” So it’s started.
HS: What’s your current view on global stockmarkets?
JR: Europe has been doing better than the US, partly because a lot of people are afraid to put their money in the US and also because the ECB’s monetary policy is even looser than the Federal Reserve’s. But I suspect that if the US has problems next year, Europe will have problems too. Maybe not as bad as the US, but problems nonetheless. And if the oil price keeps moving down, say to $45 or $48 (this isn’t a prediction), then there’ll be less money coming out of the oil-producing states to shift into markets. Overall, I would rather own Japanese shares than US ones right now. And I would rather own European shares than US shares, too. Still, I’m not urging you to buy Japanese shares. I own Japanese shares and I am not selling a single one, but at the same time, I wouldn’t buy a single one right now.
HS: So you think Middle Eastern money has been supporting European markets?
JR: Some of it is going to Europe, which is another reason those markets have done better than those in the US. These days, if your name is Mohammed, even if you are a fourth-generation American who has never been to the Middle East and doesn’t know who the prophet was, you can very well suddenly find yourself having your assets being confiscated and being questioned by the police for no real reason at all. This keeps happening and so they are afraid to put their money in the US. It’s less likely to happen in Europe, it’s less likely to happen in Japan and so a lot of this money is going into Europe and Japan and Asia.
HS: And into Middle Eastern stockmarkets?
JR: Yes a lot of it has been going locally, in the Kuwait market, all the markets, andSaudi Arabia. Prices are going through the roof. Stockmarkets in the Middle East are in a wild bubble – there are local chemical companies in Saudi Arabia that are worth more than BP. This, as I say, is partly because many Middle Easterners are afraid to put their money in the US and some are even afraid to put it in Europe, and so all that money is staying home and going into stocks and property. As I said, some of the stocks are unbelievably overpriced. But, as in most bubbles, just because they’re unbelievably overpriced doesn’t mean they can’t get even more unbelievably overpriced, that’s what usually happens.
HS: You say you wouldn’t buy any Japanese stocks at all at the moment. Why is that?
JR: The Japanese market has doubled in two years. That doesn’t mean it can’t double in the next two years – it fell 85% more or less from its peak, so has come from a very low base, and even having doubled is still far, far below its all-time high. But the pace of its rise has started accelerating and anything that has doubled in two years and is starting to accelerate... well, it is not my ideal place to jump in.
HS: But you’re comfortable with the fundamentals in Japan?
JR: More comfortable than I am with those in the US and many other places. The Japanese have huge business interests in China and that makes it one of the best ways to play China. They also moved a lot of their manufacturing to southeast Asia to cut costs, so the profits of the Japanese companies are continuing to do well. Maybe the workers in Japan don’t like the fact that the factories are now in Indonesia or Vietnam, or somewhere, but as far as the Japanese companies are concerned, this kind of move enhances their profitability. They are also not as dependent on the US as they used to be. Thirty years ago, I think something like 45% of their trade was in the US, but that’s shifted. Now around 45% of Japan’s trade is with Asia. So there has been a dramatic change in the last 30 years.
HS: Are there other stockmarkets around the world that you think are interesting?
JR: Natural resource economies look good. Canada would be better than the US if you were going to invest in North America. Brazil will do a lot better in the next 15 years than it has in the past quarter of a century. Even Argentina will do better. Peru, Chile – these are natural resource-based economies that are reasonably well managed. I’m not suggesting that Argentina is well managed, I’m just saying that it is better managed than places such as The Congo, for instance, and it’s better managed than it has been in the past.
HS: Have you invested in Latin America yourself?
JR: I do have some investments in Latin America. It’s going to be a whole lot better than it has been in the past because they are natural-resource-based economies and that’s where the money is. So if you have the time and energy to look abroad, it’s likely you’ll do better with most South American markets than elsewhere. They are going to do a whole lot better in the next 15 years than in the past 15.
HS: I know you’re particularly keen on soft commodities, but they are not moving much yet are they?
JR: If I could only buy one sector in November of 2005 – be it metals, energy or agriculture – it would be agriculture. Sugar has done extremely well, but it is still 80% below its all-time high. Coffee has done pretty well, but it’s still 70%-75% below its all-time high.These commodities still have enormous potential.
HS: So what are your favourite commodities right now?
JR: If I tell you my favourite commodities, you’d better sell them. I am just not good at timing. But if you looked at, say, coffee, or cotton, or soya beans, or maize, you might find some opportunities.
HS: What about China itself? We know it’s driving the price rises in a lot of these commodity markets, but what about investing in China?
JR: When I say I’m bullish on China, which I am, I’m talking about being bullish on it as a nation, as an economy, but not necessarily as a market. I’m still not buying Chinese shares. I had thought there would be a correction in China and that, as a result, there would be better opportunities to buy Chinese shares, but it hasn’t happened. I own Chinese shares, but I bought them in 1999.
HS: Are you still concerned there may be a correction or crash of any kind coming in China?
JR: I expect a correction in real estate – I would have thought it would have happened by now, but it hasn’t. Or not dramatically anyway. They tell me it is happening slowly though. As it goes on, I would expect a lot of speculators in real estate to get wiped out – maybe in the next few weeks or months. I thought they would have been wiped out already. But this kind of thing will make no difference to the wider growth story. If you’re in agriculture, or if you’re in coal mining, electricity – you are having one of the greatest booms of your life and it’s going to last for another 15 years. You know, in some parts of the Chinese economy they won’t have a clue that a bunch of real-estate speculators got wiped out in Shanghai or someplace.
If real-estate speculation collapses and a lot of people get wiped out, it will have some ripple effects, but the guy out there building electricity plants won’t even know what’s happening because he’s too busy and he’s making too much money. It’s the same for the farmers – agriculture in China is just booming. Many parts of the Chinese economy are going to continue to grow over many years to come, regardless.
HS: What about India?
JR: As a nation, China still has a much better future than India. I own a few shares in India Hotels because of the tourism, but I’ve owned these for a long, long time. No, I wouldn’t buy any Indian shares right now.
HS: And Russia?
JR: It’s a disaster spiralling down into a catastrophe. It’s run up, because of oil and commodities, just as Saudi Arabia’s run up, but I’m as pessimistic about the future of Russia as I am about the future of Saudi Arabia. Russia continues to disintegrate. All the ex-Soviet Union states continue to disintegrate. Ukraine may be the next to split into two or three pieces – they are all going to split up.
HS: Now that they have joined the EU, do you invest in eastern European countries?
JR: No. They don’t have much to sell to the rest of the world.
HS: You have said that you are thinking of moving to China. Do you mean it?
JR: We spent several weeks this summer in Shanghai and Singapore just seeing how we felt. I think it is more likely we would move to Singapore, at least at first, because Singapore is easier to move to than Shanghai. We have more or less decided to move to Singapore, it’s just a question of winding down in the US and gearing up in Singapore. Asia is extremely exciting. It’s like moving to London in 1805, or New York in 1905. The future is Asia.
HS: Thanks for talking to us.
Jim Rogers on gold: orange juice is better
HS: You’ve never been a great gold bug have you?
JR: No. I own some gold, but I think you will make more money in other commodities – like sugar – than in gold.
HS: But there is an increasing supply deficit isn’t there?
JR: Not as much as in some other commodities. One of the reasons that I’m not as bullish on gold as I am on other things is that the amount of gold being mined kept going up, even during the bear market. Seventy-five per cent of the money spent looking for metals is spent looking for gold. Nobody is out there looking for zinc, nobody wants to find nickel or tin – they’re all out there looking for gold. And don’t forget the mutual funds and the central banks have gigantic amounts of gold that they want to sell – I don’t know if they’re right or wrong to want to do so – it doesn’t matter what I think. But they do want to sell, so supply and demand is not nearly as good for gold as it is for other things.
HS: But if the dollar declines sharply, won’t demand for gold as a safe haven rise?
JR: Sure, but then again, all commodities are safe havens right now. Orange juice is a better safe haven, coffee is a better safe haven. If the world looks like it is about to come to an end, people will grab for gold and it will sky rocket, but they will also grab for wheat and maize and a lot of other stuff if the world is about to come to an end, because we desperately need to eat. Certainly, the Chinese are getting more prosperous and want more gold, but they also want more sugar right now – they want more everything. I own gold. I’m not bearish, I just don’t think you are going to make as much money there as in other things.
HS: What about silver?
JR: I own some silver too, but again, it isn’t a favourite. Due to technology, the demand from photography is changing quickly and there are still inventories of silver around the world – nothing like as much as there is of gold, but there are a lot more inventories of silver around the world than there are zinc or lead, and that will continue to be the case.
Tuesday, November 22, 2005
The Nation reports:
The mid-November revelation in the Washington Post that as early as February 2001 senior executives of at least four of the country's biggest oil companies met with aides to Vice President Cheney has reopened the debate over Big Oil's influence on the Bush Administration's energy policy. The immediate controversy concerns whether executives of ExxonMobil, Conoco, Shell and BP America misled the Senate Energy and Commerce committees when they denied knowledge of the meetings in testimony on November 9. The leaked documents confirm that these meetings in fact took place, but because Republican chair Ted Stevens declined to oblige the executives to testify under oath--which committee Democrats strongly protested at the time--they cannot be charged with perjury. (They could, however, be charged with making false or fraudulent statements to Congress.)
The executives' evasive answers have renewed questions about the functioning of the secretive White House Energy Task Force, especially its unwillingness to draft policies that transcend the interests of Big Oil. The focus on industry profits and prevarication, although it's important, misses a much more important reason for the Bush Administration's desperate attempts to keep documents related to the task force secret. In a word: Iraq.
Wednesday, November 2, 2005
Bush may be besieged by charges of cronyism, but they don’t seem to have affected his picks for a panel assessing intelligence matters.
Controversy continues to rage over spying failures and the mishandling of intelligence in the run-up to the invasion of Iraq. Last week it was the indictments in the CIA leak case. This week, it was the extraordinary secret session of the Senate, when Democrats pushed for a new round of inquiries into the misuse of intelligence on Saddam’s regime. So it’s all the more remarkable to see how the White House has just filled a committee overseeing intelligence issues.
President Bush last week appointed nine campaign contributors, including three longtime fund-raisers, to his Foreign Intelligence Advisory Board, a 16-member panel of individuals from the private sector who advise the president on the quality and effectiveness of U.S. intelligence efforts. After watching the fate of Michael Brown as head of FEMA and Harriet Miers as Supreme Court nominee, you might think the president would be wary about the appearance of cronyism—especially with a critical national-security issue such as intelligence. Instead, Bush reappointed William DeWitt, an Ohio businessman who has raised more than $300,000 for the president’s campaigns, for a third two-year term on the panel. Originally appointed in 2001, just a few weeks after the 9/11 attacks, DeWitt, who was also a top fund-raiser for Bush’s 2004 Inaugural committee, was a partner with Bush in the Texas Rangers baseball team.
Other appointees included former Commerce secretary Don Evans, a longtime Bush friend; Texas oilman Ray Hunt; Netscape founder Jim Barksdale, and former congressman and 9/11 Commission vice chairman Lee Hamilton. Like DeWitt, Evans and Hunt have also been longtime Bush fund-raisers, raising more than $100,000 apiece for the president’s campaigns. Barksdale and five other appointees—incoming chairman Stephen Friedman, former Reagan adviser Arthur Culvahouse, retired admiral David Jeremiah, Martin Faga and John L. Morrison—were contributors to the president’s 2004 re-election effort. Friedman also served a year on the intelligence board under President Bill Clinton, who appointed chairmen with very different profiles from Bush's Pioneers: former chairman of the Joint Chiefs of Staff Adm. William Crowe, former Defense secretary Les Aspin, former House speaker Tom Foley and former GOP senator Warren Rudman. (Clinton did also appoint two donors who gave $100,000 apiece to the Democratic National Committee: New York investment banker Stan Shuman and Texas real estate magnate Richard Bloch.)
According to the White House, the intelligence advisory board offers the president “objective, expert advice” on the conduct of foreign intelligence, as well as any deficiencies in its collection, analysis and reporting. Created during the Eisenhower administration, the board has played a role in determining the structure of the intelligence community. Indeed, its members have been considered important presidential advisers, receiving the highest level security clearance and issuing classified reports and advice to the president.
Yet, as with many federal panels, membership on the board has also been doled out to top campaign contributors and supporters of the president—a move the White House defends since panelists are not required to have significant intelligence experience.
Friedman, a former top economic adviser to Bush during his first term, replaced Jim Langdon, a Washington lobbyist and Bush Pioneer who had been board chairman since February. Langdon himself replaced Brent Scowcroft, a close adviser to Bush’s father who was not reappointed to the panel after he publicly criticized Bush’s decision to go to war in Iraq.
Last summer, Langdon became embroiled in ethical questions after The Washington Post reported that he had helped Akin Gump, the law firm where he works as an energy lobbyist, secure a contract with a Chinese firm seeking to buy Unocal, the California energy company. It’s unclear if Langdon resigned or was simply replaced. A board spokeswoman declined comment, and calls to Langdon’s office were not returned. Last week, Bush named 12 members to the panel, leaving four slots on the committee unfilled. Carol Blair, an administrative officer at the board, tells NEWSWEEK that the positions may remain empty. “The size and scope of the board is really up to the president,” she said. “We don’t know what will happen.”
UPDATE - Editor's Note: In this article, we referred to Jim Langdon as an energy lobbyist who had been chairman of the president's Foreign Intelligence Advisory Board. Prior to publication we tried to contact Langdon without success about his departure from the board. Langdon says he in fact works as an energy lawyer who specializes in business transactions and does not lobby governments. He also says he resigned from the board of his own accord, and was not replaced. He says he resigned after public criticism of his role as a lawyer for CNOOC, a Chinese company seeking to buy Unocal, the California energy company.