Aboard the Bush Plane [on the flight home to Texas]

At the Daily Beast, Mark McKinnon writes:

Exclusive for The Daily BeastIn a Daily Beast exclusive, a former Bush advisor files his account—and his photos—from aboard the former president’s flight back to Texas.

Knowing it would be impossible to get out of the city Tuesday morning, many of us arrived Monday night at the very funky Econo Lodge by Air Force Andrews Base. The Blair House it was not. But good to be humbled on the way out.

We jumped in a van in the morning and watched Obama’s inaugural address from the lobby at Andrews. The group of 100 or so watching, of which 100 percent were George Bush supporters, all offered their enthusiastic applause for the new commander in chief. Not to say there weren’t some critical reviews of the speech, complaints about taking unnecessary shots, and grousing about borrowed ideas, but there was an absence of malice one normally sees among the constituencies of the vanquished.

And then we all boarded the plane. Among the passengers,

longtime Bush family, friends, and staffers included the former president’s mother and father and daughters Jenna and Barbara, Karl Rove, Karen Hughes, Dan Bartlett, Josh Bolten, Joel Kaplan, Jared Weinstein, Mike Meece, Andy Card, Don and Susie Evans, Blake Gottesman, Clay and Ann Johnson, Ed Gillespie, Barry Jackson, Joe Hagin, Israel Hernandez, Jeanne Johnson Phillips, Margaret Spellings, Alberto Gonzales, Brad Freeman, Jim and Debbie Francis, and Roland and Lois Betts.



“Grateful.”

That’s the word expressed not just by former President Bush, but his staff, as well, on the last flight home aboard on what any other day of the last eight years would have been Air Force One, but today was Special Air Mission 28000.

I can only imagine the blogosphere lighting up with what will be some version of “good riddance.” But while I expected the president’s mood to be defiant, bitter, defensive, or vengeful toward his critics, he was anything but. As he toured the cabin of the airplane throughout the flight, visiting with old friends, family, and staffers, he was filled with equanimity, grace, and a generosity of spirit.

Bush has gotten to know Obama during this transition period and he has a pretty good gut for people. His gut tells him Obama has what it takes to be a successful leader.

And while I’m reluctant to quote the president directly from private conversations, I think I can fairly report that he feels a genuine warmth for President Obama. He admires his sense of family, his relaxed and easygoing nature, and his character. He has gotten to know him during this transition period and he has a pretty good gut for people. His gut tells him Obama has what it takes to be a successful leader. Not yet tested. Not yet proved he is willing to make difficult and unpopular decisions. But the potential is clearly there.

And it’s nice to see that while some partisans have yet to sheath their swords, Obama too has warmed to President Bush during this period of peaceful, diplomatic, and graceful transition. He now believes, as does anyone who knows President Bush, that he is a “good guy” and that “he made the best decisions that he could at times under some very difficult circumstances.”

I also know the Obama team has deeply appreciated the degree to which President Bush and his staff went out of their way to make for a smooth transition.



President Bush acknowledged that before Obama was even sworn in today, he knew his life had changed when his usual morning papers failed to be delivered at the White House.

About midflight, everyone gathered with President Bush in the conference room to view a moving and emotional 22-minute video produced by Scott Sforza and edited by Laura Crawford that included administration highlights and personal messages and thank-yous from staff and Cabinet members.

Mrs. Bush strolled the aisles thanking friends and staffers. The president’s father, with his walking stick, hobbled through, as well, with a familiar glint in his eye and smile at the corner of his lips. Wife Barbara padded around behind him, ever ready with a witty riposte to any and all. Karl Rove was in his usual seat in the conference room, challenging Joe Hagin and Blake Gottesman to a game of cards. And winning. Insisting they autograph the final score. And I was snapping pictures all along, inspiring Josh Bolten to declare me a “tourist.” Which I happily admitted I was and have been all along.

There was a lot of talk of old days and old times. About how eight years had flown by. About how children had grown. There was no high-fiving or celebration. And no weeping or whining. Just a quiet and friendly exchange of hugs between longtime colleagues and friends who had traveled a lot of miles together and weathered a lot storms.

And in the end, we all were simply grateful for the incredible ride.

As vice chairman of Public Strategies and president of Maverick Media, Mark McKinnon has helped meet strategic challenges for candidates, causes, and individuals, including George W. Bush, John McCain, Governor Ann Richards, Charlie Wilson, Lance Armstrong, and Bono. McKinnon is co-chair of Arts & Labs, a collaboration between technology and creative communities that have embraced today’s rich internet environment to deliver innovative and creative digital products to consumers.

DoJ: "Oversight Board Failed To Report Intelligence Violations"

For 5 1/2 years, not one violation was passed along to the Attorney General.



The Houston Chronicle reports:

An independent oversight board created to identify intelligence abuses after the CIA scandals of the 1970s did not send any reports to the attorney general of legal violations during the first 5 1/2 years of the Bush administration's counterterrorism effort, the Justice Department has told Congress.

Although the FBI told the board of a few hundred legal or rules violations by its own agents after the Sept. 11, 2001, attacks, the board did not identify which of them were indeed legal violations. This spring, it forwarded reports of violations in 2006, officials said.

The President's Intelligence Oversight Board — the principal civilian watchdog of the intelligence community — is obligated under a 26-year-old executive order to tell the attorney general and the president about any intelligence activities it believes "may be unlawful." The board was vacant for the first two years of the Bush administration.

The FBI sent copies of its violation reports directly to Attorney General Alberto R. Gonzales. But the board's mandate was to provide independent oversight, so the absence of such communications has prompted critics to question whether the board was doing its job.

"It's now apparent that the IOB was not actively employed in the early part of the administration. And it was a crucial period when its counsel would seem to have been needed the most," said Anthony Harrington, who served as the board's chairman for most of the Clinton administration.

"The White House counsel's office and the attorney general should have known and been concerned if they did not detect an active and effective IOB," Harrington said. Senate Judiciary Committee chairman Patrick J. Leahy, D-Vt., added: "It is deeply disturbing that this administration seems to spend so much of its energy and resources trying to find ways to ignore any check and balance on its authority and avoid accountability to Congress and the American public."

White House spokeswoman Dana Perino said Friday that "the president expects every single person working in counterterrorism and intelligence strictly to follow the law — and if there are instances where that has not occurred, either intentionally or non-intentionally, he expects it promptly to be corrected." She said the White House was relying on the presidentially appointed director of national intelligence to monitor problems.

Through five previous administrations, members of the board — all civilians not employed by the government — have been privy to some of America's most secret intelligence operations and have served as a private watchdog against unpublicized abuses. The subjects of their investigations and the resulting reports are nearly all classified.

The Bush administration first appointed board members in 2003. Since then, the CIA and the National Security Agency have been caught up in controversy over interrogation tactics at secret prisons, the transfer of prisoners to countries that use torture, and domestic wiretapping not reviewed by federal courts.

Until recently, the board had not told the attorney general about any wrongdoing. "The Attorney General has no record of receiving reports from the IOB regarding intelligence activities alleged to be potentially unlawful or contrary to Executive Order or Presidential directive," the Justice Department told the House Judiciary Committee in a May 9 letter.

White House officials said the board began forwarding reports of problems shortly thereafter. White House officials declined to discuss the board's interactions with President Bush, and said its members could not be interviewed for this report.

President Gerald R. Ford created the board in the mid-1970s after the Church Committee identified numerous abuses by U.S. intelligence agencies. President Ronald Reagan made the board permanent with an executive order in 1981 and gave it the mission to identify legal violations.

Harrington said that under President Clinton, the board sent reports of legal violations by intelligence agencies promptly to the attorney general. Officials said it concluded that the administration showed poor judgment in supporting Iranian arms shipments to Bosnia, and it complained about the CIA's policy of employing known torturers or killers as informants in Latin America.

Perino said that during the first two years of the Bush administration, a career intelligence officer at the White House collected and reviewed reports in which the FBI and other intelligence agencies self-disclosed violations of civil liberties and privacy safeguards.

The board's three or four members — it has alternated over the years — are usually drawn from the larger President's Foreign Intelligence Advisory Board, which advises the commander in chief on U.S. intelligence policy and performance. The oversight board has been a mix of intelligence experts, such as George H.W. Bush's choice of former Air Force Gen. Lew Allen, and civilians from other walks of life, such as Bill Clinton's choice of Philadelphia investment banker Harold Pote.

The board now in place is led by former Bush economic adviser Stephen Friedman. It includes Don Evans, friend of the president and a former commerce secretary, former Adm. David Jeremiah and lawyer Arthur B. Culvahouse.

Perino said the board's "original unique mission and primary oversight role has been supplemented" in recent years by new layers of government. The administration now relies on the director of national intelligence — a job created in 2005 — to watch for abuses, along with presidentially appointed inspector generals. As a result, Bush is considering changes to Reagan's executive order, she said.

Clinton-era deputy national security adviser James B. Steinberg said, however, that "you have to have a civilian proxy who on one hand can be trusted with these secrets and can still call the operator on the carpet when they go astray. If you neuter these internal mechanisms, then you are basically saying there is no one watching the henhouse."

On Friday, the FBI and the Justice Department announced several reforms meant to strengthen internal oversight, including the creation of a legal "compliance office" inside the bureau and a review office inside the department that will regularly examine all violations.

Separately, Gonzales wrote the top Republican on the Senate Judiciary Committee, Sen. Arlen Specter of Pennsylvania, to defend his 2005 testimony that there had been no verified civil liberties abuses during the first three years of the efforts against terrorism. The Post reported last week that the FBI had sent Gonzales a half-dozen reports of violations of civil liberties and privacy safeguards before his testimony.

Gonzales wrote Friday that he did not consider the conduct in those reports to be abuses because the violations involved mistakes, not deliberate misconduct. "My testimony was completely truthful, and I stand by that testimony," he wrote.

Leahy scoffed at Gonzales' explanation. "The American people deserve an attorney general who will fully and accurately inform the Senate and the public about violations of civil liberties. Instead, they have one who misleads Congress and then hides behind dictionary definitions," he said.

In The Company of Friends

Bush may be besieged by charges of cronyism, but they don’t seem to have affected his picks for a panel assessing intelligence matters.

MSNBC reports:

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.

Flat tax system imposed on Iraq

U.S. Administrator Orders 15% Rate

The Washington Post reports:

“The highest individual and corporate income tax rates for 2004 and subsequent years shall not exceed 15 percent,” Bremer wrote in Coalition Provisional Authority Order Number 37, “Tax Strategy for 2003,” issued last month.

The flat tax, long a dream of economic conservatives, is finally getting its day — not in the United States, but in Iraq. It took L. Paul Bremer, the U.S. administrator in Baghdad, no more than a stroke of the pen Sept. 15 to accomplish what eluded the likes of publisher Steve Forbes, former representative Jack Kemp (R-N.Y.), former senator Phil Gramm (R-Tex.) and former representative Richard K. Armey (R-Tex.) over the course of a decade and two presidential campaigns.

Voila, Iraq has a flat tax, and the 15 percent rate is even lower than Forbes (17 percent) and Gramm (16 percent) favored for the United States. And, unless a future Iraqi government rescinds it, the flat tax will remain long after the Americans have left.

“It’s extremely good news,” said Grover Norquist, head of Americans for Tax Reform and a Bush administration ally. Bremer’s vaguely worded edict leaves open the possibility that Iraqis could face different levels of taxation below 15 percent, but “they told me it’s a flat rate and it appears as though it’s a flat rate,” Norquist said. The tax fighter added: “It might be a hint to the rest of us.”

NO HISTORY OF PAYING TAXES IN IRAQ

Bremer’s new economic policy for Iraq will slash Saddam Hussein’s top tax rate for individuals and businesses from 45 to 15 percent. Of course, since Hussein’s government, like others in the Middle East, almost never enforced tax collection, there is no real history of paying taxes in the country.

During the more than three decades of Baath Party rule, Hussein ran a centrally controlled economy with most large businesses owned or operated by the state. The government also managed the import of most goods.

John B. Taylor, undersecretary of the Treasury for international affairs, said the Iraq flat tax was discussed before the war as preliminary planning was done with the help of some Iraqi exiles.

After major combat ended, the discussions continued with Iraqis in Baghdad, with emphasis on tax policies adopted by other countries making the transition from controlled economies. “One was Russia and subsequently Ukraine, where we heard good things after flat taxes were adopted,” Taylor said.

On Sept. 22, Bremer told the Senate Appropriations Committee: “Iraq’s new tax system is admirably straightforward. The highest marginal tax rate on personal and corporate income is 15 percent.”

Iraq’s new finance minister, Kamil Mubdir Gailani, is considered a follower of Ahmed Chalabi, the Western-oriented banker who has closely adhered to the Bush administration’s economic policies, according to one expert on the Iraqi economy. Gailani presented the new Iraq finance program, including the flat tax, at a recent international meeting.

“A piece of social engineering is being done on Iraq, but it has almost no support from other members of the U.S.-appointed Iraqi Governing Council,” said a Middle East expert who heard Gailani’s presentation.

Proponents of the flat tax have long favored this kind of tax system for Iraq. Without much of a framework to start with, Iraq “need not worry about all the political and transition problems that have made adoption of fundamental tax reform here so difficult,” Bruce Bartlett, an economist in the Reagan and first Bush administrations, wrote this spring. “It is gratifying, therefore, that leaders of the new Iraq are said to be looking at a flat rate tax system for their country.”

RUSSIA SEEN AS A MODEL FOR IRAQ

Bartlett, once an aide to Kemp and now with the National Center for Policy Analysis, said the model for Iraq should be Russia, which in 2001 set a 13 percent flat tax on individual income. The Bush administration, still disturbed by much higher tax rates here, has said it admires Russia’s flat tax. Russia “understands the importance of getting the tax structure right in your economy,” Commerce Secretary Donald L. Evans told the conservative Heritage Foundation last year.

President Bush, in Russia last year to see President Vladimir Putin, said: “The good news is that the flat tax in Russia is a good, fair tax — much more fair, by the way, than many Western countries, I might add.”

“At the previous 40 percent to 50 percent, Russian people were evading,” said one economist familiar with the area. “Now at a lower rate they are paying because the penalties are so heavy.”

Conservatives have similarly celebrated Bremer’s move in Iraq. “Such low rates will put Iraq on a par with Hong Kong and flat-tax-land Russia,” editorialist Amity Shlaes wrote in the Financial Times. “They contrast favorably with the onerous regimes of some neighbors.”

American flat-tax advocates have made little headway at home, in part because Democrats say it would disproportionately hurt lower-income Americans and because expensive tax breaks such as the deductions for mortgage interest and charitable donations are beloved in both parties. But in places such as Russia, the Baltic states and Iraq, there was no well-established tax code defended by an army of lobbyists. “Somehow, it’s easier when you start from scratch,” Norquist said.

The 15 percent rate does not take effect until January. In the meantime, Bremer has abolished all taxes except for real estate, car sales, gasoline and the pleasantly named “excellent and first class hotel and restaurant tax.” Even while leaving these Hussein-era levies in place, Bremer exempted his coalition authority, the armed forces, their contractors and humanitarian organizations. Exempting occupation personnel leaves only the Iraqis to pay taxes, as well as journalists, businesspeople and other foreigners.

Looking back at the failed attempt by presidential candidate Forbes to rally U.S. public support behind the flat tax, Gene Sperling, a senior Clinton economic adviser who is with the Council on Foreign Relations, said wryly, “If Steve Forbes does a bus tour [of Iraq] to promote it, I hope they have adequate security."