Saturday, November 29, 2008
By Amran Abocar
World Trade Organisation (WTO) chief Pascal Lamy said on Saturday he was increasingly inclined to call ministers to Geneva next month to pursue a global trade treaty that could mitigate the world's economic turmoil.
U.S. President George W. Bush and other leaders have been pushing for a breakthrough this year in the global free trade talks, known as the Doha round, as a way to bolster the troubled world economy.
Lamy said it would be risky to convene a ministerial meeting unless the WTO's 153 member governments are ready to make the compromises needed to finally clinch agreement in the delicate negotiations.
"Convening a meeting that will fail is a risk. Not convening a meeting, waiting for some time ... is also taking a risk," he told reporters on the sidelines of a United Nations aid summit.
"I have not yet made a determination but the answer should be reasonably clear by the end of next week," Lamy added.
The WTO's Doha round is named after the Qatari capital because trade officials launched the negotiations during a summit there in November 2001.
A Doha-round agreement would cut subsidies and tariffs on thousands of exported goods and cross-border services, prying open food, fuel, transportation and other markets and therefore encouraging global economic activity.
But previous efforts to wrap up the deal -- which requires full consensus among all the negotiating parties -- have gotten stuck on many countries' resistance to exposing their farmers and key industrial sectors to more competition.
A July ministerial meeting collapsed over the workings of a safeguard to shield poor-country farmers during times of crisis.
Lamy said the financial and economic turmoil that has rocked global markets in the past few months had cast the WTO talks in a new light, making it more likely countries would compromise.
"They want this done, not least because of the huge change in the macreconomic environment which has happened since July," he said, relaying what he called encouraging signs from world leaders in recent bilateral and other talks.
"I am more inclined to call a meeting now ... I am hesitating less now than a week ago," he said.
European Union Agriculture Commissioner Mariann Fischer Boel said on Friday there needed to be "a certain certainty" about the prospects of a deal before a ministerial meeting occurs.
But she said December may be the last chance for some time to nudge the long-sought accord to a conclusion. "If we don't get a positive deal in December, it would be very difficult to imagine ministers coming back in the first six months of 2009," she told reporters in Brussels
The Bush administration leaves the White House in January and U.S. President-elect Barack Obama has not yet signalled whether he would alter his country's negotiating stance in the WTO talks, casting a long shadow over the Doha round.
Lamy will meet with ambassadors at the WTO's headquarters on Sunday to gauge their sentiment and take the pulse of technical talks that have intensified in Geneva over the past two weeks.
Participants in those talks have said advances were made in some areas but countries remained at odds in others, raising questions about whether a deal is actually within reach. Any move to invite ministers to Geneva would need backing from the WTO's full membership before being official.
(Writing by Laura MacInnis; Editing by Michael Roddy)
By Robert Pear
Sunday, November 30, 2008
WASHINGTON: The Labor Department is racing to complete a new rule, strenuously opposed by President-elect Barack Obama, that would make it much harder for the government to regulate toxic substances and hazardous chemicals to which workers are exposed on the job.
The rule, which has strong support from business groups, says that in assessing the risk from a particular substance, U.S. government agencies should gather and analyze "industry-by-industry evidence" of employees' exposure to it during their working lives. The proposal would, in many cases, add a step to the lengthy process of developing standards to protect workers' health.
Public health officials and labor unions said the rule would delay needed protections for workers, resulting in additional deaths and illnesses.
With the economy tumbling and American troops fighting in Iraq and Afghanistan, President George W. Bush has promised to cooperate with Obama to make the transition "as smooth as possible." But that has not stopped his administration from trying, in its final days, to cement in place a diverse array of new regulations.
The Labor Department proposal is one of about 20 highly contentious rules the Bush administration is planning to issue in its final weeks. The rules deal with issues as diverse as abortion, auto safety and the environment. One rule would make it easier to build power plants near national parks and wilderness areas. Another would reduce the role of U.S. government wildlife scientists in deciding whether dams, highways and other projects pose a threat to endangered species.
Obama and his advisers have already signaled their wariness of last-minute efforts by the Bush administration to embed its policies into the Code of Federal Regulations, a collection of rules having the force of law. The advisers have also said that Obama plans to look at a number of executive orders issued by Bush.
A new president can unilaterally reverse executive orders issued by his predecessors, as Bush and President Bill Clinton did in selected cases. But it is much more difficult for a new president to revoke or alter final regulations put in place by a predecessor. A new administration must solicit public comment and supply "a reasoned analysis" for such changes, as if it were issuing a new rule, the Supreme Court has said.
As a senator and a presidential candidate, Obama sharply criticized the regulation of workplace hazards by the Bush administration.
In September, Obama and four other senators introduced a bill that would prohibit the Labor Department from issuing the rule it is now rushing to complete. He also signed a letter urging the department to scrap the proposal, saying it would "create serious obstacles to protecting workers from health hazards on the job."
Administration officials said such concerns were based on a misunderstanding of the proposal.
"This proposal does not affect the substance or methodology of risk assessments, and it does not weaken any health standard," said Leon Sequeira, the assistant secretary of labor for policy. The proposal, Sequeira said, would allow the department to "cast a wide net for the best available data before proposing a health standard."
The Labor Department regulates occupational health hazards posed by a wide variety of substances like asbestos, benzene, cotton dust, formaldehyde, lead, vinyl chloride and blood-borne pathogens, including the virus that causes AIDS.
The department is constantly considering whether to take steps to protect workers against hazardous substances. Currently, it is assessing substances like silica, beryllium and diacetyl, a chemical that adds the buttery flavor to some types of microwave popcorn.
The proposal applies to two agencies in the Labor Department, the Occupational Safety and Health Administration and the Mine Safety and Health Administration. Under the proposal, they would have to publish "advance notice of proposed rule-making," soliciting public comment on studies, scientific information and data to be used in drafting a new rule. In some cases, OSHA has done that, but it is not required to do so.
The Bush administration and business groups said the rule would codify "best practices," ensuring that health standards were based on the best available data and scientific information.
Randel Johnson, a vice president of the United States Chamber of Commerce, said his group "unequivocally supports" the proposal because it would give the public a better opportunity to comment on the science and data used by the government.
After a regulation is drafted and formally proposed, Johnson said, it is "all but impossible" to get OSHA to make significant changes.
"Risk assessment drives the entire process of regulation," he said, and "courts almost always defer" to the agency's assessments.
But critics say the additional step does nothing to protect workers.
"This rule is being pushed through by an administration that, for the last seven and a half years, has failed to set any new OSHA health rules to protect workers, except for one issued pursuant to a court order," said Margaret Seminario, director of occupational safety and health for the AFL-CIO
Now, Seminario said, "the administration is rushing to lock in place requirements that would make it more difficult for the next administration to protect workers."
She said the proposal could add two years to a rule-making process that often took eight years or more.
Representative George Miller, a California Democrat who is chairman of the House Committee on Education and Labor, said the proposal would "weaken future workplace safety regulations and slow their adoption."
The proposal says that risk assessments should include industry-by-industry data on exposure to workplace substances. Administration officials acknowledged that such data did not always exist.
In their letter, Obama and other lawmakers said the Labor Department, instead of tinkering with risk-assessment procedures, should issue standards to protect workers against known hazards like silica and beryllium. The government has been working on a silica standard since 1997 and has listed it as a priority since 2002.
The timing of the proposal appears to violate a memorandum issued in early May by Joshua B. Bolten, the White House chief of staff.
"Except in extraordinary circumstances," Bolten wrote, "regulations to be finalized in this administration should be proposed no later than June 1, 2008, and final regulations should be issued no later than Nov. 1, 2008."
The Labor Department has not cited any extraordinary circumstances for its proposal, which was published in the Federal Register on Aug. 29. Administration officials confirmed last week that the proposal was still on their regulatory agenda.
The Labor Department said the proposal affected "only internal agency procedures" for developing health standards. It cited one source of authority for the proposal: a general "housekeeping statute" that allows the head of a department to prescribe rules for the performance of its business.
The statute is derived from a law passed in 1789 to help George Washington get the government up and running.
The Labor Department rule is among many that U.S. government agencies are poised to issue before Bush turns over the White House to Obama.
One rule would allow coal companies to dump rock and dirt from mountaintop mining operations into nearby streams and valleys. Another, issued last week by the Health and Human Services Department, gives states sweeping authority to charge higher co-payments for doctor's visits, hospital care and prescription drugs provided to low-income people under Medicaid. The department is working on another rule to protect health care workers who refuse to perform abortions or other procedures on religious or moral grounds.
By Thomas Fuller
Saturday, November 29, 2008
BANGKOK: Antigovernment protesters occupying Bangkok's two commercial airports clashed at least twice with security forces on Saturday, raising tensions in the four-day standoff.
The Thai police said they would continue their efforts to negotiate with protesters and called the first clash a misunderstanding.
"We are ready to talk," Lieutenant General Chalong Somjai of the Thai police said in a news conference at a police station near Suvarnabhumi Airport, a giant complex that has served as a transportation and commercial hub for Southeast Asia. "We are trying to bring this to a peaceful conclusion."
The Thai airport authority said Suvarnabhumi would be closed until at least Monday evening, dashing hopes for a quick resolution of the national crisis.
Early in the day, protesters attacked a police checkpoint outside Suvarnabhumi Airport, disabling 10 police vehicles and forcing security forces to retreat. A similar confrontation occurred after dark on Saturday.
Self-appointed security guards in the besieged airport have blocked access roads with stacks of luggage trolleys, razor wire and a fire truck.
Police officials and military leaders appear reluctant to remove the protesters forcibly, both because of the physical challenge of confronting thousands of determined demonstrators and because the protesters appear to have powerful support among the Thai elite.
The prolonged shutdown of the airport, Thailand's main international gateway for passengers and air cargo, highlights the government's paralysis and the deep polarization within Thai society.
The Thai prime minister, Somchai Wongsawat, has remained in the northern city of Chiang Mai since Wednesday, possibly because he fears a military coup.
The protesters, who on Saturday repeated their refusal to negotiate with the police unless Somchai steps down, have also shut down Bangkok's domestic airport, and have occupied the prime minister's office in Bangkok for the past three months. An explosion on the grounds of the prime minister's office just after midnight on Sunday wounded 33 people, Thai television reported.
The protesters have ignored the prime minister's imposition of a state of emergency at the airports. Many demonstrators continued Saturday to stream into Suvarnabhumi Airport to join the sit-in, which is well organized and well provisioned with water, food, medical supplies and blankets.
The threat of violence remained high as government supporters, who have formed an auxiliary group known as the Red Shirts, scheduled a rally for Sunday. Clashes between supporters of the government and detractors have left at least two people dead and dozens injured since August, when protesters seized the prime minister's office.
Some protesters carried metal rods or golf clubs as they guarded the entrances to Suvarnabhumi Airport on Saturday. Sondhi Limthongkul, a protest leader who addressed his followers early in the day, also appeared to confirm that the group had firearms when he threatened to shoot at the police if fired upon.
"If they come, we will not open the door," he said. "If they shoot us, we will shoot back."
Television reports last week showed protesters firing handguns at government supporters in another part of Bangkok.
Tens of thousands of foreign visitors remain stranded in Thailand despite the government's efforts to ferry them to other countries from a military airport outside Bangkok. Dozens of aircraft are also stranded on the tarmacs at both Bangkok airports, Suvarnabhumi and Don Muang.
"I am most concerned about the aircraft, especially the foreign ones," said Sereerat Prasutanon, director of airport authority. He said the protesters should allow security guards into the airport so the guards could protect the aircraft.
By Clifford Krauss
Sunday, November 30, 2008
QUINCY, Florida: Bruce Thomas washed cars at his father's General Motors dealership here at age 12, changed oil in high school, and sold his first Pontiac during college.
His commitment to a famed American industry, part business and part romance, never waned. He took over his family's two dealerships, building a small fortune. In turn, he showered generosity on local churches, school athletic teams, charity golf tournaments and a group that helps women find jobs out of prison.
But suddenly, all of Thomas's success appears to be melting away.
Days go by without a sale. His debts are mounting. His friends offer him cash to get by. "I'm trying to survive as a car dealer," said Thomas, now 59, "and I don't know if I can."
Top executives of the Big Three automakers are preparing to return to Washington this week with business plans they hope will lead to a U.S. government bailout. But any government help will probably come too late for thousands of dealers like Thomas who sell American brands.
They have been struggling for years, as Detroit's fortunes waned, but what remains of their sales is evaporating along with consumer confidence and credit.
The National Automobile Dealers Association predicts that roughly 900 of the nation's 20,770 new-car dealers will go out of business this year, and automobile analysts say the number of failed dealerships could rise into the thousands next year.
Even if Ford, Chrysler and GM survive, many believe a comeuppance is inevitable among dealerships; indeed, for years the nation has had more dealers for domestic brands than warranted by the sales volume of the Detroit automakers.
The economic toll of a mass failure of dealerships around the country has already begun to harm the broader economy. In October alone, 20,000 employees of auto dealerships lost their jobs nationwide, more than half of those who were newly unemployed in the retail trade, according to the Labor Department.
The auto dealers association estimates that new-car dealers produce a $54 billion annual payroll for 1.1 million workers and nearly 20 percent of the retail sales and sales taxes in small and large communities alike.
The auto dealers are not just businesses, of course. Most of them are deeply rooted in their communities, and each is a slice of Americana their big flags flying, their radio advertisements compelling attention and their Little League sponsorships and other charity helping to improve the lives of local people.
In this small town outside Tallahassee, Thomas had 50 employees only two years ago when his two dealerships sold an average of 24 new vehicles a month. But now Thomas is lucky if he sells three new vehicles a week, and he has had to dismiss 10 of his remaining 40 employees in recent days.
Salesmen at Thomas's two dealerships one selling Chrysler-Dodge-Jeep cars and the other General Motors models are so idle, they spend their time doing Sudoku puzzles, reading sports magazines and calling and writing old clients. They repeatedly implore the mail carrier to buy a car on mornings when he is the only one to come in the door.
Calmly resolute, Thomas spends his days talking to lawyers and bankers, trying to keep his business alive. Thomas has lost a lot of money in an investment in a cousin's Georgia dealership, but many of his problems appear to be not of his making.
The last couple of years of rising gasoline prices took the steam out of the market for his Dodge Ram 2500 heavy pickup trucks and GMC Yukon sport utilities. In recent months, gasoline prices came down, but unemployment began rising here. The weak economy has hurt farmers, government workers and others. Quincy's middle class is hurting because of plummeting values for homes and stocks.
And now the credit market the lifeblood of any car dealership is frozen. Finance companies have tightened credit both for car buyers and for dealerships like Thomas's that stock their showrooms with vehicles bought on credit. The car companies are delaying some payments to dealers because of their own problems.
Thomas has gotten behind in payments to GMAC, GM's financing arm, so the company sent a representative to his dealerships two weeks ago to take control of the keys of new cars on his lots to guarantee that GMAC is paid when any vehicles are sold.
Thomas has stopped ordering new vehicles, and he is relentlessly cutting costs, including his own salary. He is slashing medical benefits and matching funds for the retirement accounts of his remaining employees. He has stopped giving free oil changes and tires to charities, stopped offering coffee to customers and even canceled janitorial services for the bathrooms.
Gathering workers for a pep talk in the service garage of his GM dealership the other day, Thomas said, "We are going to fight hard to keep everything going we can, but there are things that could go out of control." As the employees fidgeted, he added, "Let's try our best to sell a car today."
Salesmen are passing out their résumés to visitors, and they say they are not sure they will get paid from one week to the next.
"You have to laugh to keep from crying these days," Lynn Mayo, the office manager at the GM dealership, said as she wiped away tears. "The whole mess is hard."
The downturn has been years in the making. Thomas's total sales, including repairs and used cars, fell to $26 million in 2007 from $32 million in 2005. This year he hopes sales will reach $20 million based largely on stronger business during the first half. During the last two months, sales and repairs hit a wall.
It is a big comedown for a business that began with Thomas's father, Howard, who came to Quincy after World War II to start a used-car business across the street from a Chevrolet dealer. Howard Thomas was so successful, the Chevrolet dealer bought him out and brought him into the new-car business as a manager.
In 1967 Howard Thomas bought half of the local Pontiac-GMC store, and 12 years later it became a Thomas family operation run by him and his son. The business expanded to two dealerships and became a major benefactor to the local Little League team, theater and other charities. More than 400 people attended Howard Thomas's funeral in February. The business has long been the biggest retail employer in the town after Wal-Mart, and has produced $1 million in sales taxes annually in recent years.
Local officials say they know Thomas is in trouble, and they fear the consequences of his going out of business. "It would be a huge tragedy for us," said Quincy's mayor, Andy Gay, whose first job after getting married was selling cars at a Thomas dealership.
Thomas's business is a microcosm for the whole industry. At least 70 percent of the dealerships that have closed so far this year sell American cars, and better than 60 percent of the remaining dealerships sell the troubled Detroit brands. "A lot of them will go out of business," predicted Rex Henderson, an auto analyst at Raymond James & Associates.
"We have never seen anything like this," said Denny Fitzpatrick, owner of a Chevrolet-Hummer dealership outside Oakland and chairman of the California New Car Dealers Association. Having already dismissed 56 of his 114 employees, Fitzpatrick added, "You lay awake at night trying to figure out how to keep these doors open."
Car dealers are not entirely blameless for their fate. Auto analysts say they did not push Detroit hard enough to build better-quality, more efficient cars. They note that the dealers lobbied hard in state capitals for laws to protect their franchises from the Detroit manufacturers who wanted to limit their numbers and determine their locations.
Thomas lays some blame on the unions that drove hard bargains with the automakers, some on a news media that "glorified" imports, and some on the Big Three for being "slow to react to the market and what the public wanted," especially when gas prices rose in recent years.
To compensate, Thomas said he had changed his inventory the last couple of years to include fewer trucks and sport utilities, adding more fuel-efficient vehicles like the Pontiac G6. He shifted his advertising away from newspapers to the Internet. He gradually reduced his business' charitable giving, once $30,000 a year, to $1,900 this year.
He has begun a radio campaign offering zero percent financing on all his 2008 Chrysler, Dodge and Jeep vehicles for 36 months, and savings of up to $12,000 on Yukon XLs.
But sales have not budged.
Speaking in an office decorated with antique golf clubs, autographed baseballs and a photograph of his grandfather posing beside a 1952 Buick Roadmaster, Thomas said he had no major regrets.
"As a kid I dreamed about cars," he said. "The business has changed and the cars have changed, and it's been fun to be part of that."
But he said he saw more trouble ahead.
"At this point, I see no light at the end of the tunnel," he said, closing his eyes for a moment to think. "I only see it getting worse. Any bailout to Detroit will take a while to get to Main Street."
Saturday, November 29, 2008
CAIRO: Egypt is willing to intervene militarily against piracy in the Gulf of Aden and off the Somali coast, alone or as part of an international force, a minister said in remarks published on Saturday.
"Egypt is prepared for military intervention if necessary, to protect shipping and tackle the pirates, who can be fought under international law," state newspaper al-Ahram quoted Moufid Shehab, minister of state for legal and parliamentary affairs, as saying.
Egypt is also ready to take part in an international force, he added.
The Somali-based pirates threaten to cut into Egypt's Suez Canal revenue by pushing ships into using the Cape of Good Hope route around Africa instead of using the canal to travel between Asia and Europe or America.
At least three major shipping companies have said in the past few days that their ships would avoid the canal, fearing pirates would capture their ships and hold them for ransom.
Many countries have sent warships to the Gulf of Aden to deter piracy but the area is vast and they cannot prevent every attack. Once the pirates take a ship and hold the crew hostage, any rescue attempt endangers the lives of the crew.
Shehab's remarks was the first official sign that Egypt is considering a military response. Egyptian President Hosni Mubarak has said that tackling piracy is the responsibility of the "international community."
Naval experts say the Egyptian navy has enough suitable ships to make an effective contribution to an anti-piracy operation.
(Writing by Jonathan Wright, editing by Tim Pearce)
Saturday, November 29, 2008
By Rania El Gamal and Alex Lawler
OPEC on Saturday deferred a decision on a new oil supply cut amid signs that Saudi Arabia and its Gulf allies are demanding tighter adherence to restraints put in place over the past two months.
Gulf producers want to see strict compliance with recent output curbs of 2 million barrels a day before considering further reductions when the Organisation of the Petroleum Exporting Countries meets in Algeria on December 17.
"Compliance I think is OK," said Kuwaiti Oil Minister Mohammad al-Olaim. "But the market conditions require us to be 100 percent compliant."
Delegates said that ministers discussed how much more they needed to cut in December. Most, including Gulf producers led by Saudi Arabia, saw a requirement to slice another 1 to 1.5 million bpd. But for that to happen, delegates said, Riyadh wants proof that all fellow members are meeting their part of existing curbs.
"We are very concerned about overproduction," said Qatari Oil Minister Abdullah al-Attiyah.
While OPEC's first priority is to put a floor under a $90-collapse in oil prices to $55, Saudi Arabia for the first time in years identified a "fair" price -- $75 a barrel.
That target will serve as a reference point for traders when world oil demand starts to emerge from the current recessionary slump.
But for now, the oil market is focussed on whether OPEC can prevent prices falling further by avoiding the sort of divisions that have undermined its response to falling prices during previous economic downturns.
"$75 a barrel doesn't look doable in the short term," said Raja Kiwan of consultancy PFC Energy. "Given the fractious nature of OPEC on quota compliance, they may have some problems."
Delegates identified Iran and Venezuela, perennial price hawks who have urged quicker cuts, as particular sources of concern on quota compliance. Venezuela denied the charge. Iran made no comment.
But consultants Petrologistics estimated last week that, based on shipping data, Iran's production would fall by 80,000 bpd this month, much less than the 199,000 bpd it is due to cut.
OPEC will want to keep any bickering under wraps.
Secretary General Abdullah El-Badri said compliance already was "100 percent" and OPEC President Chakib Khelil said in an official statement that members were "fulfilling their commitments."
Early industry estimates show Saudi Arabia and its Gulf neighbours making good their share of OPEC's 2 million bpd of cuts since September.
Petrologistics data estimated OPEC output falling by 1.22 million bpd in November, with nearly half of that reduction shouldered by Saudi -- Riyadh is only responsible for about a third of OPEC output.
OPEC may need to make larger cuts to balance the rapid decline in demand among Western economies that has caused inventories to swell. World oil demand is set to contract this year for the first time in 25 years.
"The bottom line is that they need to cut again and they need to cut substantially," said Gary Ross, CEO of consultancy PIRA Energy. "Demand is falling out from beneath them."
Naimi said he would like to see inventory cover among OECD industrialised nations down to 52 days from current levels of 55-56 days of forward demand, the top of the seasonal norm.
OPEC has a mixed record of dealing with downturns in the economy that curb energy demand.
In 2001 it successfully defended prices by removing 5 million bpd in four stages, 19 pct of its supply, laying the foundation for a 6-year boom in oil prices that culminated this summer in a record $147 a barrel.
But in 1997 in Jakarta, at the start of the Asian financial crisis, Saudi pushed through an OPEC increase after Venezuela openly flouted its cartel supply quota by a large margin.
Prices went into a tailspin and U.S. crude hit a low of $10.35 at the end of 1998.
(additional reporting Peg Mackey, Luke Pachymuthu and Will Rasmussen, writing by Richard Mably, editing by Jonathan Leff)
A day of reckoning as India toll tops 170
By Somini Sengupta and Keith Bradsher
Saturday, November 29, 2008
MUMBAI, India: Death hung over Mumbai on Saturday.
Bodies were extracted from the ruins of the Taj Mahal Palace & Tower hotel in the hours after the standoff with militants there ended on Saturday in a gunfight and fire. At the main city hospital morgue, relatives came, clutching one another in grief, to identify their dead. By midafternoon, the morgue was running out of body bags, and by evening the death toll had risen to at least 172. Funerals, among them ceremonies for two policemen and a lawyer, went on throughout the day.
As the reckoning began after the three-day siege here, troubling questions arose about the apparent failure of the Indian authorities to anticipate the attack or respond to it more swiftly.
And tensions were high, as well, between India and Pakistan, where officials insisted that their government had nothing to do with assisting the attackers and promised that they would act swiftly if any connection was found within their country.
Perhaps the most troubling question to emerge Saturday for the Indian authorities was how, if official estimates are accurate, just 10 gunmen could have caused so much carnage and repelled Indian police officers, paramilitary forces and soldiers for more than three days in three different buildings.
As the investigation continued, it was unclear whether the attackers had collaborators already in the city, or whether others in their group had escaped. All told, the gunmen struck 10 sites in bustling south Mumbai.
Amid the cleanup effort in this stricken city, the brutality of the gunmen became plain to see, as accounts from investigators and survivors portrayed a wide trail of destruction and indiscriminate killing wherever the terrorists went.
At a gas station near the Taj hotel, attackers opened fire on two waiting cars on Wednesday, critically injuring two occupants. When a married couple in their 70s went to their third-floor window to see what was happening, the terrorists blazed away with assault rifles, killing both and leaving shards of glass that still hung in the window on Saturday.
Down the road, when the gunmen seized Nariman House, the headquarters here of a Jewish religious organization, neighbors mistook the initial shots on Wednesday night for firecrackers to celebrate India's cricket victory over England.
But when drunken revelers in a nearby alley began throwing bottles and stones, two attackers stepped onto a balcony of Nariman House and opened fire on passers-by, killing a 22-year-old call center worker who was the sole support of his widowed mother; five others were injured. A teenage boy who stepped out onto his balcony and came within firing range was swiftly shot and killed, a witness said.
"We still don't know why they did this," said Rony Dass, a cable television installer who lives across the street from the gas station. He lost a lifelong friend, a tailor who was locking up his store for the night on Wednesday, only to be killed by a gunman.
At the Oberoi hotel, the second luxury hotel to be assaulted, the gunmen called guests on hotel phones; some of those who picked up were then attacked, their doors smashed open and the guests shot. At the Taj, terrorists broke in room by room and shot occupants at point blank range. Some were shot in the back.
"I think their intention was to kill as many people as possible and do as much physical damage as possible," said PRS Oberoi, the chairman of the Oberoi Group, which manages the adjacent Oberoi and Trident Hotels, both of which were attacked.
Evidence unfolded that the gunmen killed their victims early on in the siege and left the bodies, apparently fooling Indian security forces into thinking that they were still holding hostages. At the Sir J.J. Hospital morgue, an official in charge of the post-mortems, not authorized to speak to the press, said that of the 87 bodies he had examined, all but a handful had been killed Wednesday night and early Thursday. By Saturday night, 239 people had been reported injured.
Contrary to earlier reports, it appeared that Westerners were not the gunmen's main targets: they killed whoever they could. By Saturday evening, 18 of the dead were confirmed as foreigners; an additional 22 foreigners were injured, said Vilasrao Deshmukh, the chief minister of Maharashtra State, where Mumbai is located.
The State Department has said at least five Americans died in the attacks. Consular officials from Britain, the Netherlands and Israel went to morgues on Saturday to see if their missing citizens had turned up there.
There were reports on the first night of the attacks that gunmen had rounded up holders of American and British passports at the Oberoi and herded them upstairs. But Rattan Keswani, the president of Trident Hotels, said he had found no basis for such reports.
"Nothing seems to suggest that," he said, noting that a range of nationalities was represented among the 22 hotel guests who died, in addition to the 10 staff members, all Indian.
The city's police chief, Hasan Gafoor, said nine gunmen were killed, the last of whom fell out of the terrace of the Taj hotel on Saturday morning as the siege ended. His body was charred beyond recognition when it was taken to the hospital. A 10th suspected terrorist was arrested; the police say he is a 21-year-old Pakistani, Ajmal Amir Kasab.
A senior Mumbai police inspector, Nagappa Mali, said the suspect and one of his collaborators, who was slain by the police, had killed three top police officials, including the head of the antiterrorist squad, Hemant Karkare.
Karkare was cremated Saturday morning in a crowded and emotional farewell.
The bodies of four other suspected terrorists were at the morgue at the Sir J.J. Hospital in Mumbai. Officials there put their ages between 20 and 25. All four were men.
Around dawn on Saturday, gunfire began to rattle inside the Taj Mahal hotel, one of about a dozen sites that the militants attacked beginning Wednesday night. They never issued any manifestoes or made any demands, and it seemed clear from their stubborn resistance at the Taj that they intended to fight to the last.
It was not long before flames were roaring through a ground-floor ballroom and the first floor of the Taj, a majestic 105-year-old hotel in the heart of southern Mumbai.
But by midmorning, after commandos had finished working their way through the 565-room hotel, the head of the elite National Security Guards, J. K. Dutt, said the siege at the Taj was over. Three terrorists, he said, had been killed inside.
By afternoon, busloads of elite commandos, fresh from the siege of the hotel, sat outside the nearby Gateway of India and shook hands with elated spectators.
"There were so many people and we wanted to avoid any civilian casualties," one of the commandos told a private television station, CNN-IBN. He said they were firing from various parts of the hotel. By the end of the siege, he said, the gunmen had holed up in one room and barricaded the door with explosives.
The siege may have been over, but new tensions within the region were on the rise, particularly after India's foreign minister on Friday blamed "elements" within Pakistan for the attack.
In an attempt to defuse the situation on Saturday, the Pakistani president, Asif Ali Zardari, told an Indian television channel in a live telephone interview that he supported a thorough investigation "no matter where it may lead."
"My heard bleeds for India," Zardari said. "As president of Pakistan, if any evidence points to anyone in my country," Pakistan will take action, he said.
Zardari said he did not rule out the possibility of the top official of the Pakistani intelligence agency working with Indian officials on the case. But it was too early in the investigation for the top official to meet with his Indian counterpart to share information, Zardari said.
Soon after Zardari's interview on Indian television, the Pakistani foreign minister, Shah Mehmood Qureshi, said the Pakistani government was not involved in the attack.
"Our hands are clean," Qureshi told a news conference in Islamabad, Pakistan, after a lengthy cabinet meeting called to discuss the rising tensions between the two rival countries. "We have nothing to be ashamed of."
Qureshi also stressed that the Indian government had not blamed the Pakistani government for the attacks.
"They are suspecting, perhaps suspecting, groups or organizations that could have a presence here," he said. "We have said if they have evidence they should share it with us."
Saturday, November 29, 2008
Gregory Beitchman is the Consumer Editor, Asia and Emerging Markets, for Thomson Reuters. Based in Mumbai, he is a frequent visitor to the Trident-Oberoi Hotel, one of three sites besieged by Islamist gunmen who launched coordinated attacks on the city late on Wednesday. In the following story, he describes his impressions on returning to the hotel after the siege was lifted
By Gregory Beitchman
Standing outside the jammed office door of Mumbai's battered Trident-Oberoi Hotel, the thought hits us at about the same time: what if it's blocked by a booby trap?
Simon Hartley, a Briton working in the construction industry, and I have come back to retrieve our belongings from the Trident, a home-away-from-home for us both, after elite troops ended a harrowing siege by Islamist militants.
A concierge has escorted us up to the 12th floor. The door to Simon's office looks as if it has been forced. The concierge and a guest services manager assure us the floor has been cleared, but we're not convinced. We want them to check again.
"I think it's a good idea," Simon agrees.
The guest manager calls downstairs. "Room 1208 has been opened and checked, please confirm," he asks. "National Security Guard officers have inspected every room," comes the reply.
"There were no terrorists on the 12th floor," offers the concierge. Satisfied, we stand back as locksmiths arrive.
Simon has been working and living in the Trident-Oberoi hotel for about six months.
"I had gone out with a friend and was coming back when I heard what happened. I was lucky ... a lot of people and staff I know have lost their lives," he says.
Well-armed gunmen struck at the heart of India's financial centre late on Wednesday, laying siege to the Trident-Oberoi, the historic Taj Mahal Palace Hotel and a Jewish centre.
The death toll stood at 195 after Indian commandos killed the last of the gunmen holed up inside the Taj on Saturday.
BROKEN GLASS, BULLET HOLES
Soon after the last shots were fired at the Taj, I was sitting back in the lobby of the Trident-Oberoi after receiving a call from the hotel to come and get our belongings.
About 12 hours earlier, hundreds of people had been trapped inside but now immaculately dressed staff are cleaning up broken glass. Bullet holes pepper the walls and the sea-facing windows have been blown out.
I passed through the same lobby on Wednesday on the way for a haircut, just two hours before the attacks began.
Uniformed staff stand at the checkout counter. Some guests pull out credit cards to pay room bills.
In the lobby, heavily armed police with National Security Guard badges speak with hotel officials in hushed voices.
The concierge takes Simon and me to the elevators. Surprisingly, they work. A thick bloodstain greets us in the 12th floor elevator lobby.
"One guest was shot and then came to the 12th floor. One of our staff then brought him out through the staff entrance," the concierge says.
Once the doors are open we find papers strewn around a room next door, but Simon's room is untouched. Wednesday's newspaper lies neatly on a table.
Simon gathers up documents and a printer.
"Wow. Everything looks intact and I have to get back to work," Simon says. "This won't be good for general confidence but things weren't too good for the economy here anyway."
Simon packs up his things and calls an assistant. They still have to get ready for a presentation, he says.
Back in the lobby, a guest relations manager wearing a sari guides us towards the main entrance. Soldiers in helmets stand on a balcony scanning the area.
Shattered glass has been swept up, broken windows and doors replaced by large white boards. Off to the side is a lonely looking metal detector. I ask the guest relations manager if new security measures will be put in place.
"Rest assured they will," she answers.
(Editing by Paul Tait and John Chalmers)
By Somini Sengupta
Saturday, November 29, 2008
MUMBAI: At midmorning on Friday, as Indian troops continued to comb through the devastated Oberoi Hotel, an unexpected guest appeared on the sidewalk: Narendra Modi, a Hindu nationalist from the opposition Bharatiya Janata Party and arguably India's most incendiary politician.
Speaking before a row of television cameras, he said the central government had failed to tackle a growing terrorism threat, and he found fault with a speech by India's prime minister a day earlier. "The country expected a lot from Prime Minister Manmohan Singh," he said, "but his address to the nation was disappointing."
The appearance of Modi - who has been barred from entering the United States for violations of religious freedom - signaled how the siege of Mumbai had instantly turned into political flint for coming national elections. After a string of attacks across Indian cities earlier this year, the Bharatiya Janata Party, or BJP, pledged to make national security its main campaign issue. The latest audacious attacks on the country's commercial capital, and their timing, gave it an additional lift.
Five state elections are under way, with the city-state of Delhi going to the polls on Saturday. National balloting is expected to be held next spring.
It was only four years ago that the Bharatiya Janata Party, then leading a coalition government, was routed in national elections, partly because of at least two high-profile terrorist episodes during its tenure: a suicide attack on the Indian Parliament building in 2001 and the hijacking of an Indian Airlines plane to Kandahar, Afghanistan, in 1999.
Singh and his Congress Party hoped to ride a booming economy and rising prosperity to victory next year despite a steady series of bombings and other violence in recent months. And that had seemed a sensible course: Studies of previous national elections have shown economic issues to be the most important concern for the average voter, said Yogendra Yadav, a political analyst with the Center for the Study of Developing Societies in Delhi.
But Yadav said he doubted that pattern would stand up after this latest assault. In an intensely competitive political landscape, small margins can make a big difference, which is why he argued that the terrorist threat would inevitably figure more centrally in the next national polls.
Singh's administration would have to be seen as doing "something fast, something visible," he said, to shrug off the perception that it is weak on national security. The Congress Party "has to be seen to be doing something which directly addresses the widely shared popular perception that the country is being attacked from outside, that it is under aggression," Yadav said.
On Friday, front-page advertisements appeared in several newspapers in Delhi showing blood splattered against a black background and the slogan "Brutal Terror Strikes At Will" in bold capital letters. The ads signed off with a simple message: "Fight Terror. Vote BJP."
There were also advertisements that were cast as an appeal from Atal Bihari Vajpayee, a prime minister in the last BJP-led coalition government. They cited the loss of lives in Mumbai and concluded, "We must elect a government that can fight terror tooth and nail."
Nor did the party's president, Lal Krishna Advani, lose any time in pointing fingers at the coalition government of Singh, accusing it of a "nonserious approach" that allowed suspected terrorists to land on the shores of Mumbai this week.
Kapil Sibal, a veteran of the Congress Party, swiftly hit back, accusing Modi of placing his party's interests above those of the nation and calling the BJP advertisements "a matter of national shame." In a telephone interview on Friday night, Sibal would not say whether recent terrorist attacks - including this week's, the most spectacular and the scariest - would have any bearing on his party's election prospects. He called it "not relevant."
That now may be wishful thinking. Terrorism may be grievously relevant to the fortunes of the ruling party, under whose watch Indian cities have suffered a string of attacks - six in as many months, killing roughly 375 in all. After each one, the prime minister has issued a sobering statement calling for calm. After each one, the BJP has pounced on the government as being soft on terrorism.
Singh's government had lately hit back at the Bharatiya Janata Party with evidence that its supporters, belonging to a range of radical Hindu organizations, had also been implicated in terrorist attacks. Indeed, in a bizarre twist, the head of the police anti-terrorism unit, Hemant Karkare, killed in the Mumbai strikes, had been in the midst of a high-profile investigation of a suspected Hindu terrorist cell. Karkare's inquiry had netted nine suspects in connection with a bombing in September of a Muslim-majority area in Malegaon, a small town not far from Mumbai.
Several BJP leaders, including Modi, had criticized the crackdown as a political vendetta. On Friday Modi, the chief minister of neighboring Gujarat state, announced financial rewards for the families of police officers killed this week in the anti-terror operations, including Karkare.
On Friday, Advani went so far as to say that intelligence agencies had been "diverted to nail so-called Hindu terror," allowing the gunmen who struck Mumbai to "plot away undetected."
The political fencing hides more fundamental problems: a feeble, often corrupt criminal justice system, in which suspects, whether of terrorism or common crimes, are regularly killed in skirmishes with law enforcement authorities rather than tried in courts of law. Faith and democracy also complicate the Indian battle against terrorism, as political parties compete for the loyalty of Hindu and Muslim voters.
The BJP has pressed for the resurrection of a tougher anti-terrorism law that was in place during its administration. That measure allowed for longer periods of preventive detention and enabled confessions extracted by the police to be used in court. Its critics said it was an unfair and ineffective tool used too often to round up innocent people, largely Muslims, and it was repealed in 2004 by Singh's administration.
In a nationally televised address on Thursday, the day after the siege on Mumbai began, Singh clearly sought to convey that his government was in charge and capable of acting swiftly. He promised to "strengthen the hands of our police and intelligence authorities," restrict financing to suspect organizations, check the "entry of suspects into the country" and get tough on Pakistan, which the Indian government has accused of providing sanctuary to militants who attack on Indian soil. It was not clear how he would do any of these things, nor whether his words would persuade voters to trust his party with another five-year term.
Friday's newspapers scolded politicians as failing to act together in the interests of national security. "It is time we stop our political parties from using terror - Hindu or Muslim - to fuel their popularity when they are fueling a fire that can consume India," read a front-page editorial in The Hindustan Times.
The Indian Express, in its front-page editorial, suggested that "if a tragedy like this cannot make both sides - in fact the entire political class - make amends, we have no right to call ourselves a great nation, democracy, civilization."
Yadav's 2005 public opinion poll on sources of insecurity in India found that terrorism ranked far lower than common crimes and communal riots. Moreover, his studies showed that terrorism resonated far more with urban voters than rural ones.
That is another reason the siege of Mumbai could give Singh cause for concern. Political redistricting this year has made the urban voter far more important nationally than ever before.
By Keith Bradsher
Saturday, November 29, 2008
MUMBAI: As Prasan Dhanur prepared his 13-foot boat on Wednesday evening for a hard night of fishing, he saw something strange.
A black inflatable lifeboat equipped with a brand new Yamaha outboard motor threaded its way among the small, wooden fishing boats at anchor and pulled up to the slum's concrete pier.
Ten men, all apparently in their early 20s, jumped out. They stripped off orange windbreakers to reveal T-shirts and blue jeans. Then they began hoisting large, heavy backpacks out of the boat and onto their shoulders, each taking care to claim the pack assigned to him.
Dhanur flipped his boat light toward the men, and Kashinath Patil, a 72-year-old harbor official on duty nearby, asked the men what they were doing.
"I said: 'Where are you going? What's in your bags?"' Patil recalled. "They said: 'We don't want any attention. Don't bother us."'
Thus began a crucial phase of one of the deadliest terrorist assaults in Indian history, one that seemed from the start to be coordinated meticulously to cause maximum fear and chaos.
The details are still fragmentary; Indian officials are saying little publicly. But from interviews with witnesses and survivors, it seems clear that the men on the boat were joining a larger terrorist force, which included some attackers who, unconfirmed local news reports say, had embedded themselves in Mumbai days before the attacks. Their synchronized assaults suggested a high level of training and preparation.
Dhanur and Patil said in interviews that they did not see the guns hidden in the backpacks, and did not call the police as they watched the 10 men walk into town on Wednesday, leaving their boat and windbreakers at the dock. Not long afterward, fanning out across South Mumbai, as other attackers spread out after landing in other boats, the men began unleashing deadly assaults everywhere they went.
At the Chhatrapati Shivaji Terminus, the train station that appears to have been the first location hit, a fusillade of bullets left the floor of the main hall quickly littered with bodies and pools of blood. At the Leopold Café, a chic restaurant popular with Westerners and wealthy Indians and famous for sidewalk dining, a cluster of gunmen mowed down diners.
At the opulent Taj Mahal and Oberoi hotels, the assailants poured heavy fire into restaurant-goers on the ground floors, then moved upstairs to round up guests as hostages. And at a range of other locations, from a movie theater to a hospital to a police station, the attackers opened fire remorselessly on anyone in their path, frequently throwing grenades as well.
With proximity to Pakistan and visibility as the hub of India's financial sector, Mumbai has suffered many terrorist attacks over the years. But the killings this week, played out so publicly and prolonged over so many days, have shaken many as never before.
"In 51 years, I have never seen this kind of thing," said Dev Gohil, a tailor and lifelong Mumbai resident. "We're scared for ourselves and for our families."
One reason for the nervousness is it seems likely not nearly all the terrorists were caught or killed - and so far the whereabouts of the rest are a mystery. At least eight were confirmed dead on Friday, although more might be found as soldiers and the police comb through the two hotels. Security officials declared that they had taken control of the Taj on Saturday morning, killing three militants.
Estimates of the number of attackers have ranged from 20 to 40, with the number depending to a considerable extent on the number of boats involved. As security forces seek to reconstruct how the gunmen managed to inflict so much carnage so quickly, they have been turning their attention to how so many assailants managed to reach the heart of Mumbai undetected and with such a large collection of guns, ammunition and explosives.
Fishermen here said that the police removed and impounded the boat that came ashore here at the Fishermen's Colony pier where Dhanur lives. Various local news media have reported the impoundment of at least one - and as many as four - other boats at other nearby locations on the coast of South Mumbai, one of the city's oldest neighborhoods.
The Times of India newspaper reported on Friday that the Coast Guard had found an Indian fishing trawler, the Kuber, that disappeared on Nov. 14. The Kuber may have been used as a so-called mother ship to transport inflatable rafts within range of South Mumbai, much as pirate mother ships from Somalia, across the Arabian Sea from Mumbai, have used smaller boats to hijack tankers and other vessels in recent weeks.
The Kuber's 30-year-old captain was found dead on the boat, and his four crew members were missing, The Times of India said.
Not all of the terrorists may have entered Mumbai on the night of the attack. Local news media, citing anonymous law enforcement officials, are reporting that one captured terrorist has said during interrogation that some of his group had stayed in hotels for four days before the attacks to prepare for them and even to store ammunition in the rooms.
When the terrorists landed in front of Dhanur's boat, they were just three blocks straight down a narrow lane from Nariman House, a five-story building housing a Jewish center run by a young rabbi, Gavriel Holtzberg, and his wife, Rivka, who had moved from New York.
But the attack does not appear to have started there. According to India's Home Affairs Ministry, the first shots were fired at the train station, and soon after that at the Leopold Café.
Popular with tourists, the café is about eight blocks from the dock where Dhanur was surprised by the arrival of the inflatable raft. It is just a block behind a top target for the terrorists: the luxurious Taj hotel, Mumbai's most famous place for maharajahs and wealthy businesspeople to stay.
A large red sign over the two double-width entrances to the Leopold Café still boasts that the restaurant has been in business "since 1871." But the steel shutters of the Leopold Café were pulled down over the entrances on Friday afternoon, sealing the site of a deadly assault.
The attackers stood at the entrances and raked the diners with heavy fire from assault rifles. The power of the rounds is still visible from three shots that missed the diners. They struck the thick concrete columns on either side of an entrance and penetrated more than an inch deep, leaving red stains.
Through a gap at the top of the shutters, the darkened restaurant could still be seen. Half-eaten meals still sat on tables, and napkins lay on tables and chairs, as though the diners had disappeared suddenly into thin air.
Few signs of the fallen remained visible on Friday afternoon, and no official tally of casualties from this attack has been released.
After the train station and the Leopold Café, at least some of the terrorists attacked and occupied three buildings from which the police would find it very difficult to dislodge them: the two hotels and Nariman House.
At the hotels, the attackers managed to hide in a maze of rooms, especially at the Taj, and so avoided easy capture. The smaller Oberoi proved more difficult for the assailants, and they were defeated there first, with the police leading out dozens of hostages at midday on Friday.
Nariman House took a full day on Friday for the army to capture, as the attackers holed themselves up in the middle floors of the building, where they could not easily be reached from the ground or from above. Only on Friday evening were the assailants finally overwhelmed.
The most complex building, the Taj Hotel, with its many passageways, took the longest to clear. The National Security Guard announced Saturday morning that it believed the last three gunmen had been killed, and declared the siege over.
Saturday, November 29, 2008
Phil Smith has been the Reuters Editor for South Asia since 2005. Previously he worked for Reuters in Sydney, Singapore and London. Phil was out on the streets of Mumbai with a reporter's notebook throughout the militant attacks on India's financial capital. In the following story, he describes his vigil outside the Taj Mahal Palace Hotel.
By Phil Smith
The gunbattle at Mumbai's famous Taj Mahal Palace Hotel was finally over after three bloody days, but the dull thud of explosions still vibrated up through the shoes of those standing nearby.
India's crack NSG "Black Cat" commandos went from room to room to secure the battle-scarred old building, mopping up after brazen, coordinated attacks that killed at least 155 people at three sites in the heart of India's financial hub.
The bodycount rose as one last gunfight in the Taj marked the end of the drama, during which scores of foreigners hid terrified in their rooms and many more were taken hostage.
Live television images were jolted by explosions, either from stun grenades or controlled detonations used to destroy ordnance found by the Black Cats as they prowled through the hotel.
The gunbattle ended just after dawn on Saturday.
In the early hours I made my way around to the back of the Taj, where a crack Sikh regiment was stationed.
Stray bullets fizzed as they passed overhead in light rain.
By that stage the story had become a little surreal as tiredness and fear set in, like watching a televised news report with me in it unfold before my own eyes.
After 30 years in journalism I knew it was my job to be there but it was still hard to put aside fears for my own safety.
I couldn't help but be struck by the futility of ducking each time I heard a bullet pass overhead, knowing full well that the bullet was long gone by the time I heard it.
BULLETS, GRENADES AND RATS
It was very quiet and very dark at the back of the Taj. Rats scurried around our ankles as we chatted to the soldiers, who were stretching tired, cramped legs and easing stiff backs.
The language barrier meant it was hard to communicate but it was clear the Sikhs had been on duty for many hours. Unlike them, at least I had been able to enjoy some nap breaks since the drama began to unfold late on Wednesday.
Through the quiet at the back of the building I could hear a lot of gunfire from the front. It seemed to range widely along the length of the corridors at the front rather than from the area around the pool at the back of the complex.
The Taj is U-shaped, with the pool spanning the open end. I could see clearly palm trees in the gardens surrounding the cool waters I had swum in occasionally when visiting friends had found enough money to stay at the swanky hotel.
At the front of the Taj, bleary-eyed journalists who had earlier mobbed National Security Guards chief J.K. Dutt when he announced the end of the siege were pushed back roughly behind a rope that had marked an unofficial boundary for them.
But that was still only 100 meters from the lobby and the smashed and blackened windows of the hotel.
Hundreds of media workers dived for cover as stray bullets whistled above them during the final stages of a firefight.
Live pieces-to-camera, or PTCs as they are know in the trade, were delivered by local journalists lying prone, adding to the drama of the scene.
On Friday at least two journalists were wounded by grenade debris which hit the 100-metre long phalanx of cameras and journalists working behind their rope border.
It was hard not to think that prying reporters and cameras would have been kept back much further from the action if a hotel siege such as this had happened somewhere like Britain, rather than this teeming, chaotic, unforgettable city.
A few reporters, including me, wore flak jackets. They were often derided amid an air of bravado, until bullets and debris began flying and blood-stained journalists were carted off to hospital.
Even wearing the jacket I still felt genuine fear as bullets whizzed overhead, knowing it was useless if I was hit in the head.
"When I was doing my stand-upper (piece to camera) I felt like a bullet might hit the back of my neck at any moment," one Western reporter told me.
"I stopped then, it just wasn't worth it."
(Editing by Paul Tait and John Chalmers)
Saturday, November 29, 2008
By Rina Chandran
Indian accusations of a Pakistani link to the attacks on Mumbai that killed nearly 200 people threaten to damage attempts to improve ties between the rivals.
Indian officials have said most, perhaps all, of the 10 attackers who held Mumbai hostage with frenzied attacks using assault rifles and grenades came from Pakistan, a Muslim nation carved out of Hindu-majority India in 1947.
An official in Islamabad said the next one to two days would be crucial for relations between the nuclear-armed neighbours. Pakistan has condemned the assaults and denied any involvement by state agencies.
After a final battle between militants and security forces inside the Taj Mahal, Mumbai's best-known hotel, a crowd of protesters outside pumped their fists and shouted "Our soldiers came and Pakistan ran away."
A senior Pakistani security official said Islamabad would divert troops to its border with India and away from fighting militants on the Afghan frontier if the tension spilt over.
"If something happens on that front, the war on terror won't be our priority," the official told reporters at a briefing.
"We'll take out everything from the western border. We won't leave anything there."
Elite Black Cat commandos killed the last of the gunmen on Saturday after three days of room-to-room battling inside the Taj Mahal, one of several landmarks struck in co-ordinated attacks on Wednesday night.
Hundreds of people, many of them Westerners, were trapped or taken hostage as the gunmen hurled grenades and fired indiscriminately. At least 22 of those killed were foreigners, including businessmen and tourists.
Nine gunmen and 20 police and soldiers were also killed.
A tenth militant caught alive told interrogators they wanted to be remembered for an Indian version of the September 11, 2001, attacks on the United States, Times Now TV said, quoting an unidentified Defence Ministry official.
Indian Prime Minister Manmohan Singh has said "elements" in Pakistan may have been responsible for the attacks.
"The Congress calls upon Pakistan to honour its commitment and prevent the use of its territory for commission of acts of terrorism against India," his ruling Congress party coalition said after an all-party meeting late on Saturday.
India and Pakistan have fought three wars since independence and went to the brink of a fourth after a December 2001 attack on India's parliament that India also linked to Pakistan.
They embarked on a peace process in 2004 that has ground on for the past four years.
"These are sensitive moments," Pakistan Foreign Minister Shah Mehmood Qureshi told a news conference. "The situation is serious, let us not fool ourselves ... when the people in India feel this is 9/11 for India."
A high ranking security officer in Pakistan said tension with India was escalating rapidly. "They'll have clarity of thought and we'll have clarity of the situation in next 24-48 hours," he said.
India's internal politics are integral to the fallout from the attacks too. Singh is facing an election by May and renewed accusations from India's main opposition, the Hindu nationalist Bharatiya Janata Party, that Congress is weak on security.
"Brutal terror strikes at will. Weak government. Unwilling and incapable. Fight terror -- Vote BJP," said one election ad, written over a blood-red stain on a black background.
India said evidence was mounting to suggest the men who attacked Mumbai came by sea from Karachi, Pakistan's main port.
"Investigation carried out so far has revealed the hand of Pakistan-based groups in the Mumbai attack," Sriprakash Jaiswal, India's minister of state for home affairs, told Reuters.
Pakistani President Asif Ali Zardari, battling Islamic radicals in his own nation, told CNN-IBN television he would cooperate with the investigations.
"If any evidence comes of any individual or group in any part of my country, I shall take the swiftest of action in the light of evidence and in front of the world," he said.
India's Home Ministry said the official toll was 183 killed. Earlier, Mumbai disaster authorities said at least 195 people had been killed and 295 wounded.
The attacks struck at the heart of Mumbai, the engine of an economic boom that has made India a favourite emerging market.
The city of 18 million is also home to the "Bollywood" film industry, the epitome of glamour in a country blighted by poverty.
(Reporting by New Delhi, Mumbai and Islamabad bureaux; Writing by Raju Gopalakrishnan and Bryson Hull; Editing by Alison Williams)
Saturday, November 29, 2008
KARACHI: India must tour Pakistan in January despite this week's bloodshed in Mumbai, senior batsman Mohammad Yousuf said on Saturday.
Yousuf and nine other Pakistanis who were playing in the rebel Indian Cricket League have returned home after their matches were cancelled in the wake of the Mumbai attacks in which nearly 200 people died.
"Cricket is a big thing and a binding force for the people of Pakistan and India. The Indian team must play in Pakistan or it will only encourage the terrorist elements," Yousuf told reporters at Karachi airport.
"It is also important to continue cricket activities," added the veteran of 79 tests. "What happened in Mumbai was horrifying but authorities must not allow terrorists to derail cricket activities."
On Friday, Pakistan Cricket Board chairman Ejaz Butt said he was uncertain over India's 2009 visit.
England have cut short their one-day series in India and captain Kevin Pietersen said there was doubt whether they would return to play two tests before Christmas.
Former Pakistan captain Moin Khan expressed fears the Mumbai attacks could mar relations between India and his country.
"Cricket has always played its role in normalising relations between the two countries and I feel it is now all the more necessary for India to tour Pakistan and vice versa," Khan said.
(Editing by Tony Jimenez)
Saturday, November 29, 2008
KABUL: A former Taliban spokesman was shot dead in his home late on Friday evening by unknown gunmen in the southeastern province of Nangarhar, a provincial official said on Saturday.
Mohammad Hanif, who became a Taliban spokesman in October 2005 and was recently released from prison, was killed along with three members of his family when gunmen broke into his home in Chaparhar district, about 400 km (215 miles) southwest of Kandahar.
"Dr. Hanif and two of his cousins and one niece were killed when the unidentified armed men stormed his residence on Friday late evening," Ahmadzia Abdulzai, spokesman for the provincial governor said, adding it was too early to say who had killed Hanif and his relatives.
Afghan news agency Pajhwok News quoted Taliban spokesman Zabihullah Mujahid denying any Taliban involvement in the shootings.
Hanif said in a press conference four days before his death that certain elements in Pakistan were targeting him and he had obtained a gun licence for personal protection.
(Reporting by Hamid Shalizi; Editing by Valerie Lee)
Saturday, November 29, 2008
ISLAMABAD: A suspected U.S. drone aircraft fired a missile at a house in the militancy-plagued Pakistani region of North Waziristan on the Afghan border on Saturday, killing two people, security agency officials said.
U.S. forces in Afghanistan have carried out at least 27 air strikes by unmanned aircraft on militant targets in northwest Pakistan this year, according to a Reuters tally, more than half of them since the beginning of September.
"A missile was fired at a house owned by one Taj Mohammad, and we have reports of two men killed," said an intelligence agency official.
Another security agent and a Taliban militant confirmed the strike and the death toll at the house in the village of Chashma, 2 km (1 mile) north of the region's main town of Miranshah.
There was no immediate information about the identity of those killed.
Security has deteriorated sharply in both Pakistan and Afghanistan recently, seven years after U.S. soldiers and their Afghan allies drove the Taliban from power in Afghanistan in the weeks following the September 11 attacks on the United States.
Apparently frustrated by Pakistan's inability to tackle the militants, and alarmed by the deteriorating security situation in Afghanistan, the United States has ramped up attacks with missile-firing pilotless drones on militants in Pakistan.
Pakistan has complained to the United States over the strikes, saying they undermine its efforts to combat militants, but Washington has shrugged off the protests.
(Editing by Robert Birsel and John Chalmers)
Saturday, November 29, 2008
By Jon Hemming
The U.S. general commanding NATO forces in Afghanistan has ordered a merger of the office that releases news with "Psy Ops," which deals with propaganda, a move that goes against the alliance's policy, three officials said.
The move has worried Washington's European NATO allies -- Germany has already threatened to pull out of media operations in Afghanistan -- and the officials said it could undermine the credibility of information released to the public.
Seven years into the war against the Taliban, insurgent influence is spreading closer to the capital and Afghans are becoming increasingly disenchanted at the presence of some 65,000 foreign troops and the government of President Hamid Karzai.
Taliban militants, through their website, telephone text messages and frequent calls to reporters, are also gaining ground in the information war, analysts say.
U.S. General David McKiernan, the commander of 50,000 troops from more than 40 nations in NATO's International Security Assistance Force (ISAF), ordered the combination of the Public Affairs Office (PAO), Information Operations and Psy Ops (Psychological Operations) from December 1, said a NATO official with detailed knowledge of the move.
"This will totally undermine the credibility of the information released to the press and the public," said the official, who declined to be named.
ISAF spokesman Brigadier General Richard Blanchette said McKiernan had issued a staff order to implement a command restructure from December 1 which was being reviewed by NATO headquarters in Brussels, but he declined to go into details of the reorganisation.
"This is very much an internal matter," he said. "This is up with higher headquarters right now and we're waiting to get the basic approval. Once we have the approval we will be going into implementation."
But another ISAF official confirmed that the amalgamation of public affairs with Information Operations and Psy Ops was part of the planned command restructure. This official, who also declined to be named, said the merger had caused considerable concern at higher levels within NATO which had challenged the order by the U.S. general.
NATO policy recognises there is an inherent clash of interests between its public affairs offices, whose job it is to issue press releases and answer media questions, and that of Information Operations and Psy Ops.
Information Operations advises on information designed to affect the will of the enemy, while Psy Ops includes so-called "black operations," or outright deception.
While Public Affairs and Information Operations, PA and Info Ops in military jargon, "are separate, but related functions," according to the official NATO policy document on public affairs, "PA is not an Info Ops discipline."
The new combined ISAF department will come under the command of an American one-star general reporting directly to McKiernan, an arrangement that is also against NATO policy, the NATO official said.
"While coordination is essential, the lines of authority will remain separate, the PA reporting directly to the commander. This is to maintain credibility of PA and to avoid creating a media or public perception that PA activities are coordinated by, or are directed by, Info Ops," the NATO policy document says.
"PA will have no role in planning or executing Info Ops, Psy Ops, or deception activities," it states.
The United States has 35,000 of the 65,000 foreign troops in Afghanistan, operating both under ISAF and a separate U.S.-led coalition operation, but both come under McKiernan's command.
Washington is already scheduled to send another 3,000 troops to arrive in the country in January and is now considering sending 20,000 more troops in the next 12 to 18 months, further tipping the numerical balance among ISAF forces.
"What we are seeing is a gradual increase of American influence in all areas of the war," the NATO official said. "Seeking to gain total control of the information flow from the campaign is just part of that."
(Editing by John Chalmers)
The Associated Press
Saturday, November 29, 2008
JOS, Nigeria: Mobs burned homes, churches and mosques Saturday in a second day of riots, as the death toll rose to more than 300 in the worst sectarian violence in Africa's most populous nation in years.
Sheikh Khalid Abubakar, the imam at the city's main mosque, said more than 300 dead bodies were brought there on Saturday alone and 183 could be seen laying near the building waiting to be interred.
Those killed in the Christian community would not likely be taken to the city mosque, raising the possibility that the total death toll could be much higher. The city morgue wasn't immediately accessible Saturday.
Police spokesman Bala Kassim said there were "many dead," but couldn't cite a firm number.
The hostilities mark the worst clashes in the restive West African nation since 2004, when as many as 700 people died in Plateau State during Christian-Muslim clashes.
Jos, the capital of Plateau State, has a long history of community violence that has made it difficult to organize voting. Rioting in September 2001 killed more than 1,000 people.
The city is situated in Nigeria's "middle belt," where members of hundreds of ethnic groups commingle in a band of fertile and hotly contested land separating the Muslim north from the predominantly Christian south.
Authorities imposed an around-the-clock curfew in the hardest-hit areas of the central Nigerian city, where traditionally pastoralist Hausa Muslims live in tense, close quarters with Christians from other ethnic groups.
The fighting began as clashes between supporters of the region's two main political parties following the first local election in the town of Jos in more than a decade. But the violence expanded along ethnic and religious fault lines, with Hausas and members of Christian ethnic groups doing battle.
Angry mobs gathered Thursday in Jos after electoral workers failed to publicly post results in ballot collation centers, prompting many onlookers to assume the vote was the latest in a long line of fraudulent Nigerian elections.
Riots flared Friday morning and at least 15 people were killed. Local ethnic and religious leaders made radio appeals for calm on Saturday, and streets were mostly empty by early afternoon. Troops were given orders to shoot rioters on sight.
The violence is the worst since the May 2007 inauguration of President Umaru Yar'Adua, who came to power in a vote that international observers dismissed as not credible.
Few Nigerian elections have been deemed free and fair since independence from Britain in 1960, and military takeovers have periodically interrupted civilian rule.
More than 10,000 Nigerians have died in sectarian violence since civilian leaders took over from a former military junta in 1999. Political strife over local issues is common in Nigeria, where government offices control massive budgets stemming from the country's oil industry.
By Joe Nocera
Saturday, November 29, 2008
When you live and work in New York, it is easy to succumb to the fallacy that the financial crisis is all about us. It's about giant, New York-based institutions failing or coming close to failing. It's about high-stakes weekends in the offices of the New York Federal Reserve. It's about credit-default swaps and mortgage-backed securities and the wild swings of the New York stock exchange. It's about Jamie Dimon and Richard Fuld.
But of course it's not just about us. It is not even primarily about Washington, where so much of the response to the crisis -$700 billion bailouts! Front-page congressional hearings! Economic summit meetings! - has taken place.
No, it is about everybody, in every part of the country: Neighborhoods awash in foreclosures and For Sale signs. Layoffs at the worst possible time. Small companies struggling to stay alive. Credit card companies raising rates unconscionably. People with perfectly fine credit scores finding it all but impossible to get loans.
The credit crisis is rippling up and down the economy in ways that may not create obvious headlines but that affect the way people do their business and live their lives. People, for instance, who sell and drive trucks.
"Even in good times, the trucking community works on razor-thin, single-digit margins," said G. David Gerrard, who runs a Chicago-area business that is the largest truck dealership in the United States. "If somebody bumps your lending costs by three basis points" - that is three hundredths of a percent - "it is a big deal. There is no price elasticity."
He continued: "We have a customer here in Chicago, a 50-year-old company, that just shut down. It had all of its eggs in one basket - 80 percent of its revenues came from an auto parts company that just liquidated. I have another customer with 280 drivers to 290 drivers that had its first layoffs in 40 years. They laid off 20 drivers. One truck deal blew up when we discovered the guy was four months late on his mortgage payments. I have guys who buy 25 trucks a year from us who aren't buying anything this year. We sold 38 percent fewer units in 2008 than we did in 2007."
I had gone to Chicago to learn about the effects of the credit crisis on a large, industrial, somewhat under-the-radar company called Navistar, the sole independent manufacturer of trucks and buses in the United States. Founded at the turn of the last century as a maker of agricultural equipment, it was known as International Harvester until the mid-1980s (truckers still call it "International"). The company has survived two World Wars, the Great Depression, a near-death experience in the early 1990s, and, most recently, an accounting problem severe enough to cause it to be delisted for almost a year and a half from the New York Stock Exchange.
Because it is conservatively managed - no fancy financial engineering, no excessive debt, no risky loans to customers - Navistar is going to survive this crisis as well. But that doesn't mean it isn't feeling any pain, or that it doesn't see the effects of the crisis all around it. On the contrary, companies like Navistar see the effects of the financial crisis far more clearly than most policymakers do. Because trucks haul 70 percent to 80 percent of everything we buy, truck drivers and trucking companies feel even the slightest economic downturn. They're on the front lines of the crisis.
Gerrard, a garrulous, animated, 50-year-old executive who looks like a retired middle linebacker, runs a huge Navistar dealership that generates around $200 million in annual sales. Outside, in the company's lot, stood rows of trucks of all sorts, from basic city delivery trucks to spacious truck cabs priced at more than $100,000. Gerrard took over the dealership several years ago, when Navistar concluded it needed to bring in new management, and he's been whipping the place into shape ever since. He employs 400 people in and around the Chicago area.
Thanks to cost controls and other measures Gerrard put in place, the dealership still expects to make a profit this year, despite the drastic drop in sales and revenue. He is managing his receivables very tightly, he told me - even going to the homes of customers who are in arrears on their payments. Since the financial crisis began, he hasn't had to lay anyone off. But he is consolidating two shifts into one, and getting rid of a lot of overtime pay. His employees aren't complaining, though, not in this environment. They still have jobs.
Like most companies in America right now, a crucial issue for Gerrard is credit - in his case, credit for his customers. Navistar has a captive finance company, Navistar Financial, which is the trucking equivalent of GMAC. But its cost of capital has risen sharply, thanks to the crisis. That means Gerrard's costs have risen as well, because Navistar Financial supplies much of his financing needs.
Perhaps more important, it means that it costs his customers more when they need loans to buy a truck. What's more, other lenders, like GE Capital, have ceased making truck loans in the Chicago area. When I suggested to Gerrard that this must be good for Navistar's business, he shook his head vigorously. It is impossible for Navistar Financial to make 100 percent of the truck loans, so the withdrawal of other lenders means that trucking companies will not be able to get loans to buy vehicles.
"We have situations where customers need or want trucks but they can't get financing," he said. "They are really, really struggling."
The next morning I drove out to Warrenville, in the Chicago suburbs, to visit Navistar's headquarters. The company's chief executive, Dan C. Ustian, had just returned from Washington, where he had attended a big executive conference conducted by The Wall Street Journal. He had originally been put on a panel to tackle energy and environment - a natural spot for a truck executive - but he had asked to be moved to the finance panel instead.
As I quickly discovered, the state of lending in the financial crisis is his most pressing concern, far more than, say, the new emissions requirements on diesel engines that are mandated for 2010. No sooner had he shaken my hand than he launched into a passionate speech about the failure of the banking industry to do what it was supposed to be doing to help get us out of this crisis.
"It appears that money is being loaned by the government to the banks at a very attractive rate, and that money is not getting down to consumers or businesses," he said. "We have had 2,500 bankruptcies in our industry in a nine-month period. You can't believe how many of those trucking companies have been in business a long time, and they're profitable, but they can't get working capital. And when they can get it, they have to pay an arm and a leg. Some of the midsized customers we do business with are paying 14 and 15 percent for money, with a lot of onerous covenants. So that is what is happening to our customers."
Like Gerrard at the dealership, Ustian was fairly sanguine about Navistar's own prospects. The company, he explained, had happily negotiated a five-year financing in January 2007, at very favorable rates, which was helping keep its own capital costs low even as everyone else's were soaring. But that didn't mean there wasn't going to be pain.
When I asked him about layoffs, he sighed.
"Yeah, for sure, they're coming," he said. He also explained that in a normal economy, this should be a time when truck sales increase. The truck business is highly cyclical, and the industry was just coming out of a low point in the cycle. What's more, there is usually a big uptick in sales in the year before new emissions standards take effect, because the new engines required to meet the standards push up the cost of a truck by thousands of dollars.
But that wasn't happening this time. "We were gaining in market share and overall sales" earlier in the year, Ustian said. But then came the traumatic events of September - Fannie and Freddie, Lehman Brothers, American International Group, the bailout bill and all the rest of it - and "it just stalled," he said. "You could see it starting to get better, and then it just collapsed."
Something else happened to Navistar in September. Its stock price went into free fall. After working through its accounting issues, the company was relisted on the New York Stock Exchange in July, with its stock in the 60s. (It had traded over the counter during the delisting.) But in a two-month span between mid-September and mid-November, it dropped from $62 a share to $15.
Ustian found this bewildering - and more than a little frustrating. On the one hand, other trucking companies were suffering similar declines, and truck sales were certainly down. On the other hand, his company's fundamentals hadn't really changed all that much between September and November.
So what was going on? When Navistar was delisted in February 2007, large institutional investors like pension funds had to get rid of the stock. The shares were picked up by hedge funds, which at the peak owned well over half of Navistar's stock.
Though no one at Navistar can prove it, they strongly suspect that the stock has been hammered because hedge funds, badly hurt during this phase of the financial crisis, have been forced to sell some of their more liquid positions to return money to exiting shareholders. I suspect this theory is correct, and it would be yet another way that fallout from the financial crisis has spread from New York to the rest of the country.
"My opinion is that it is going to get worse before it gets better," Ustian said, as I prepared to leave. He wasn't talking about Navistar anymore, but about the American economy. "Unemployment is going to get worse. We have to free up money so that people have confidence again to spend. It's psychological. We have to get some confidence back."
Saturday, November 29, 2008
DOHA: Iranian President Mahmoud Ahmadinejad blamed the West for the global financial crisis on Saturday, saying other countries were being dragged in to help resolve Western problems.
"Leaders of the Western bloc ... are trying to extend their own crisis to the rest of the globe to portray it as global," Ahmadinejad told a U.N. aid conference in the Qatar's capital Doha.
"They dispatch different delegations to other countries and hold regional meetings and conferences in order to force other governments to get involved in this crisis to cover a part of their loss."
The credit crunch has frozen lending markets, forced trillions in government bailouts and sent a raft of nations into recession with many others hovering on the cusp of a severe economic downturn. The crisis has taken a heavy toll on poorer nations through trade and an inability to access credit markets.
According to World Bank estimates, 40 million people will be dragged into poverty in 2009 as a result of the global financial crisis and related economic meltdown.
The Iranian president, who often rails against the West, said the capitalist era had come to an end and said the world should adopt a new system based on "religious, spiritual and non-usury" principles.
"The capitalist bloc imposes its standards unilaterally on others," he said. "While it prices its goods by itself, it determines the prices for the commodities of other nations to secure its own interests by using deceptive economic ploys.
"The situation of the oil market and the commodities market come into play.
Iran faces U.N. and Western sanctions over its disputed atomic ambitions. The country does not recognise Israel and its hardline president has often predicted the imminent demise of the Jewish state.
Ahmadinejad reiterated his views on the Jewish state on Saturday, and condemned Israel's blockade of the Gaza Strip, which is controlled by the Palestinian militant Islamic group Hamas.
The U.N. aid meeting runs until December 2 and is unrelated to the World Trade Organization's Doha round.
Officials hope the conference will harden up general commitments by donors in Monterrey, Mexico, in 2002. The meeting was to have marked a big step towards goals of reducing extreme poverty but has been overshadowed by the global financial crisis.
Saturday, November 29, 2008
By Nicole Maestri
The U.S. holiday shopping season got off to a slow start as consumers, squeezed by the economic crisis, bought carefully and said they would wait for better deals closer to Christmas.
Early results from the Black Friday weekend, which kicks off holiday sales one day after U.S. Thanksgiving, bolstered forecasts by some analysts that total holiday sales could contract for the first time since that data started being collected in the early 1990s.
ShopperTrak, which measures customer traffic, said on Saturday that Black Friday sales rose 3 percent to $10.6 billion (6.9 billion pounds). That was slower than an 8.3 percent rise in 2007.
"The initial response by many people may be positive," said Telsey Advisory Group analyst Joseph Feldman of the increase.
But, Feldman said, excluding inflation the sales figures are roughly flat year over year. His firm still expects overall holiday sales will be flat to slightly down.
Shoppers interviewed on Saturday said they were disappointed by the deals this weekend and bet stores would offer even steeper discounts in the weeks to come -- a worrisome sign for retailers struggling with weak profits.
"I'm not happy with the prices," said Rose Fernandez, shopping at a Macy's in Jersey City, New Jersey. "If it's worth the money, I would pick it up... If I can wait, I wait and watch. I can wait even till the day after Christmas."
ShopperTrak noted that stores would have a shorter holiday season, with 27 days between Thanksgiving and Christmas, compared with 32 days in 2007.
"(That) may catch some procrastinating consumers off guard, leading to lower sales levels," said Bill Martin, co-founder of ShopperTrak.
PENDING LAYOFFS PUT PURCHASES ON HOLD
Retailers are facing what could be the weakest sales season in nearly two decades as shoppers contend with falling home values, reduced access to credit and a weak job market.
The three-day Thanksgiving weekend can account for 10 percent of overall holiday sales and has taken on added importance this year as the country seeks a way out of its worst economic crisis since the Great Depression.
Heidi Hickman, a marketing manager, was browsing at a J.C. Penney in Jersey City on Saturday, but gifts were not on her mind.
"I got a notice there are going to be layoffs in my department," she said. "It's making me stop right now and not do anything until I find out."
If sales for November and December decline, it would mark the first contraction since the National Retail Federation began tracking holiday sales in 1992.
"I have very little confidence that the sales number will be up year-over-year," for the season, said Stacey Widlitz, retail analyst with Pali Capital.
In a highly competitive battle to attract shoppers, some retailers, including Kmart, opened on Thanksgiving day, while others began sales on Friday right after midnight.
In Chicago, Gap Inc's Old Navy chain opened at 7 a.m. (1 p.m. British time) on Saturday but an employee said there was little to do until 9 a.m. (3 p.m. British time), when shoppers finally began to arrive.
A nearby Sears had cut prices on holiday decorations by 60 percent, while clothing retailer Charlotte Russe tried to entice shoppers with a deal to buy one item and get another item for 50 percent off.
Penney said Black Friday shopping was strong as consumers sought deals on practical gifts, like sweaters. But it did not release sales figures for the weekend, saying the economic environment was too volatile.
Amazon.com Inc said Apple's iPod touch, which has a touch-sensitive screen, was its top-selling electronics item on Black Friday morning, while the Wii Fit, for Nintendo Co Ltd's Wii video game console, was its most popular video game.
SHOPPERS EXPECT PRICES WILL FALL
As shoppers sought low prices online, eBay's Web payments service PayPal saw 34 percent more transactions on Black Friday than in 2007 and showed a 26 percent increase in online payment volume.
In Los Angeles, Jenipher Park, 36, and Keri Yang, 34, bought boots at Nordstrom on Saturday, but both were expecting bigger discounts.
They said they will delay more purchases to get better deals closer to Christmas, and this year the two moms are planning to only get gifts for their children.
Many shoppers echoed those sentiments, saying they would find other ways to celebrate with adult relatives and friends. Some were already turned off to the very idea of shopping.
"I'm not into shopping this year like I was the year before," said Rolando Ramos, 29, on a visit to Chevy Chase, Maryland. "It's very depressing. Go to the malls, just looking around, it's deserted."
Widlitz said she expected discount behemoth Wal-Mart to win shoppers this holiday because of its low prices.
At a Wal-Mart store in Columbia, Maryland, on Friday, the parking lot was full at 7:30 a.m. and customers stood in line 10 shopping carts deep to make purchases.
(Reporting by Nicole Maestri; Additional reporting by Jessica Wohl, Ben Klayman, Lisa Baertlein and Aarthi Sivaraman; Editing by Vicki Allen)
Saturday, November 29, 2008
By Cris Chinaka
The Zimbabwean capital, Harare, is offering free graves for victims of a cholera outbreak sweeping the southern African state, which a United Nations agency says is only the tip of a health crisis.
Nearly 400 people have died from the disease, preventable and treatable under normal conditions, which has infected more than 9,400 in the country and spread to some of its neighbours.
Harare City Council has decided to waive fees for burying victims of the water-borne disease as residents are already under pressure from an economic crisis, including shortages of food and banknotes, the state Herald newspaper said on Saturday.
"Council has since resolved to offer free graves to those who have died of cholera since most people are finding it hard to get cash to pay for the graves," it quoted the town clerk as saying.
A grave in Harare costs an average of $30, a teacher's monthly salary at the current exchange rate.
The World Health Organisation (WHO) said on Friday a lack of clean drinking water and adequate toilets were the main triggers for Zimbabwe's epidemic of cholera, a diarrhoeal disease that is especially fatal for children.
WHO spokeswoman Fadela Chaib said there are very few places where people infected with cholera in Zimbabwe can seek medical care, and the clinics that are open have far too few health workers to contain the outbreak.
International aid groups are building latrines, distributing medicine and hygiene kits, delivering truckloads of water, and repairing blocked sewers across Zimbabwe to combat the cholera outbreak, which has moved into South Africa and Botswana.
Zimbabwe state media reported on Saturday that a residents association in a town near Harare had taken the state-run water authority to court for failing to provide clean water.
President Robert Mugabe's government says the health system and the economy are collapsing because of sanctions imposed by Western powers it says are trying to oust him for seizing white-owned farms for redistribution to blacks.
His critics say Mugabe, 84 and in power since independence from Britain in 1980, has ruined one of Africa's most promising economies through reckless policies and gross mismanagement.
The economy is in virtual meltdown, with unemployment over 90 percent, inflation officially at 230 million percent, and people scrounging daily for food and cash.
On Saturday, the Herald said six soldiers had been arrested in the last week for assaulting bank staff and commuters after failing to get cash at a bank.
Analysts hope a power-sharing deal being negotiated between Mugabe and the opposition MDC after disputed elections early this year may help turn around the economy.
A meeting in Kenya of the African Union's "panel of the wise" advisory forum said on Saturday Zimbabwe's humanitarian situation was deteriorating and urged the AU to help speed the establishment of a national unity government in Harare.
"The panel expressed deep concern at the prevailing humanitarian and socio-economic situation in Zimbabwe and the ever escalating suffering of the civilian population," it said in a statement at the end of a two-day conference.
It called on the AU and the Southern African Development Community, a regional grouping, "to instil a new sense of urgency in their efforts to overcome the current obstacles in the implementation of the power-sharing agreement and to take all actions required to this end."
(Additional reporting by David Clarke in Nairobi; editing by Mark Trevelyan and Gugulakhe Lourie)
Saturday, November 29, 2008
NEW YORK: A man working for discount retailer Wal-Mart was killed on Friday in a stampede by frenzied shoppers who broke down doors and surged into a Long Island, New York store, a police spokesman said.
The 34-year-old man was at the entrance of the Valley Stream Wal-Mart store just after it opened at 5 a.m. and was knocked to the ground, the police report said.
The exact cause of death was still to be determined by a medical examiner.
Four shoppers, including a 28-year-old pregnant woman, were also taken to local hospitals for injuries sustained in the incident, police said.
Wal-Mart said it was saddened by the death of the man, who was working for a temporary employment agency serving the retailer, and by the injuries suffered by shoppers.
"The safety and security of our customers and associates is our top priority," the world's largest retailer said in a statement. It said the incident was still under investigation and referred any other inquiries to local police.
New York's largest grocery workers union on Friday urged federal, state and local authorities to investigate what it called "Wal-Mart's failure to provide a safe workplace."
"This incident was avoidable," said Bruce Both, president of United Food and Commercial Workers Union Local 1500. "Where were the safety barriers? Where was security? ... This is not just tragic; it rises to a level of blatant irresponsibility by Wal-Mart."
Wal-Mart said it had added additional internal security, third party security, more store associates and had worked closely with local police.
"We also erected barricades. Despite all of our precautions, this unfortunate event occurred," Hank Mullany, a Wal-Mart senior vice president, said in a statement.
The Friday after America's Thanksgiving holiday is known as Black Friday and is traditionally the busiest retail day of the year, kicking off the Christmas shopping season.
U.S. stores across the country opened early to offer discounts to consumers hit by a contracting economy. Hundreds of shoppers waited in line before dawn at some locations to secure deals on holiday gifts.
(Additional reporting by Andrea Shalal-Esa in Washington)
(Reporting by Michele Gershberg; Editing by Daniel Trotta and Anthony Boadle)
Saturday, November 29, 2008
LONDON: Business Secretary Peter Mandelson accused banks on Saturday of overreacting to a liquidity crisis and said they had now become too conservative with their lending policies.
He said banks risked further damage to their balance sheets and profits by not providing cash to small businesses. There was a "disjunction" between what he was hearing from firms around the country and bankers in London.
"The banks have experienced a sharp liquidity crisis. They have lent too much at too cheap a price for too long. But they are now overreacting to that, in my opinion, in too conservative and restrictive a way," he told the Guardian newspaper.
"They are in danger of substituting one set of problems for another, and in the process doing themselves further damage by underlending and not strengthening their balance sheets and profits in the longer term. They are close to cutting off their noses to spite their faces."
Mandelson, a surprise recall to Prime Minister Gordon Brown's government this year, said he did not know how long the recession would last, appearing to contradict official government forecasts last week that the economy would move out of recession in the second half of 2009.
"No one can foretell how short or long, how painful or painless, the recession is going to be.
"The recession will determine our borrowing our taxing and spending. All I know is that the deeper we get into the recession, the higher the costs of climbing out will be," he said.
His comments come as the latest ICM opinion poll showed Brown had slipped further behind the Conservatives, with the gap widening to 15 points, suggesting voters have doubts about the government's tax-cutting and borrowing plans to ease the pain of the economic downturn.
The poll placed the Conservatives on 45 percent, a jump of three percentage points, compared to just 30 percent for Labour.
The government announced plans on Monday for a 20 billion pound stimulus package to support the flagging economy that include a temporary cut in Value Added Tax to 15 percent and a new 45 percent tax band for higher earners.
Mandelson also said he was looking at a draft plan to identify sectors of businesses that may need government help if the recession deepens.
He said he believed industry wanted more activism from the government. This week major retail chains Woolworths group and furniture chain MFI went into administration as retail sales plunged in November at their fastest pace since records began 25 years ago.
"They don't want us to pick winners, but they do want a route map," he said.
However, he told a conference of the centre-left Progress think tank that the government would not embark on "futile" bailouts.
"The one thing we are not going to do is to embark on a rather futile journey to bail out every company in trouble, to prop up companies that aren't viable or frankly to extend the life of companies or businesses that are not any more competitive," the Press Association reported.
"That is not the job of government.
"What we do need to do is to look at how companies and sectors of industry which are, and will continue to make a very, very important contribution to our manufacturing and industrial wealth producing future, to see what the appropriate role of government would be in helping them through the current recession so that they can take advantage of the upturn on the other side."
"We are at the beginning of a preliminary conversation about that; I do not have a blueprint or a list of companies or sectors that we are suddenly going to intervene in."
(Reporting by Frank Prenesti; editing by Michael Roddy)
Saturday, November 29, 2008
By Hereward Holland
Congolese Tutsi rebel leader General Laurent Nkunda threatened war on Saturday unless Congo's government entered a new round of talks with him.
Nkunda, whose forces have routed government troops and gained swathes of territory in North Kivu province in the east of Democratic Republic of Congo since launching a new offensive in August, has repeatedly demanded negotiations.
Nkunda said he had been told by the U.N. special envoy, former Nigerian President Olusegun Obasanjo, that Kinshasa had accepted the principle of talks.
"If there is no negotiation, let us say then there is war," Nkunda told reporters after meeting Obasanjo in the rebel commander's native village, Jomba.
"I know that (the government) has no capacity to fight, so they have only one choice: negotiations," he said.
"We asked for a response as to where, when, and with whom we are going to do these talks. For us, we propose Nairobi and for the mediator we proposed chief Obasanjo."
Video footage of the meeting provided by the U.N. peacekeeping mission in Congo, MONUC, showed Obasanjo criticising Nkunda for recent hostilities, including Thursday's capture of the town of Ishasha, on the border with Uganda.
"What has happened in the last 14 days has not made me happy," Obasanjo said, rising to his feet to address Nkunda, who remained seated at a low table.
"I tried to build a relationship of trust, but I don't receive the same from you."
Obasanjo said Nkunda should have informed him he was planning fresh offensives.
"You are making me a laughing stock," he said.
Nkunda, who wore a white robe with matching shoes and scarf, wrung his hands said the cease-fire he had declared applied only to fighting against the Congolese army, not against what he described as "foreign negative forces."
That cease-fire has brought nearly two weeks of relative calm. But his men have continued attacking Congolese and Rwandan militia allies of the government.
Obasanjo was in Congo on his second mission in two weeks to try to end fighting in North Kivu that has displaced some 250,000 civilians and at one point brought Nkunda's troops to within 10 km (6 miles) of the provincial capital, Goma.
The envoy, who met President Joseph Kabila in the mineral-rich African country on Friday, has pressed for talks.
Government ministers this week rebuffed the possibility of direct negotiations with Nkunda, calling for him to return to a earlier peace pact signed in January.
Emerging from his one-hour meeting with the rebel leader, Obasanjo avoided questions.
"We have advanced the course of peace," he said.
MONUC said clashes between Nkunda's National Congress for the Defence of the People (CNDP) and armed groups erupted for a second day near Masisi town on Saturday.
The roots of the North Kivu conflict stem from Rwanda's 1994 genocide, when extremist Hutu militias killed some 800,000 Tutsis and moderate Hutus before fleeing into Congo.
That led to two wars and a humanitarian crisis that killed more than 5 million people, mostly from hunger and disease.
Nkunda accuses Kabila of arming Rwandan Hutu rebels, including some perpetrators of the 1994 genocide, to fight alongside the weak and chaotic Congolese army.
Around 1 million civilians have been displaced by clashes between the CNDP, the army, local Mai Mai militias, and Rwandan rebels since Nkunda relaunched his insurgency in late 2006.
The U.N. Security Council agreed this month to send 3,000 troops to boost Congo's beleaguered mission, the world's largest peacekeeping force with around 17,000 soldiers and police.
(Additional reporting by Yves Boussen in Jomba and Joe Bavier in Kinshasa; Editing by Daniel Magnowski and Angus MacSwan)
Saturday, November 29, 2008
BAGHDAD: The Iraqi army unearthed 30 decomposed bodies in a series of shallow graves in northern Iraq's volatile Diyala province, the army said on Saturday.
The bodies were found over three days in the predominantly Shi'ite village of Albu-Toma, north of Baghdad, where Sunni Islamist al Qaeda militants once ruled and carried out frequent mass sectarian killings against Shi'ites.
"We know this area contains many graves. We may find more bodies in the future," an army officer on the scene, who declined to be named because he was not authorised to speak, told Reuters.
Iraqi security forces regularly uncover mass graves, most of them left over from a 2006/7 sectarian conflict that brought Iraq to the brink of all-out civil war. Police found 23 bodies in a mass grave near the northern city of Samarra on Wednesday. (Reporting by Khalid al-Ansary; Writing by Tim Cocks; Editing by Michael Roddy)
By David Barstow
Sunday, November 30, 2008
In the spring of 2007 a tiny military contractor with a slender track record went shopping for a precious Beltway commodity.
The company, Defense Solutions, sought the services of a retired general with national stature, someone who could open doors at the highest levels of government and help it win a huge prize: the right to supply Iraq with thousands of armored vehicles.
Access like this does not come cheap, but it was an opportunity potentially worth billions in sales, and Defense Solutions soon found its man. The company signed Barry McCaffrey, a retired four-star army general and military analyst for NBC News, to a consulting contract starting June 15, 2007.
Four days later the general swung into action. He sent a personal note and 15-page briefing packet to David Petraeus, the commanding general in Iraq, strongly recommending Defense Solutions and its offer to supply Iraq with 5,000 armored vehicles from Eastern Europe. "No other proposal is quicker, less costly, or more certain to succeed," he said.
Thus, within days of hiring McCaffrey, the Defense Solutions sales pitch was in the hands of the American commander with the greatest influence over Iraq's expanding military.
"That's what I pay him for," Timothy Ringgold, chief executive of Defense Solutions, said in an interview.
McCaffrey did not mention his new contract with Defense Solutions in his letter to Petraeus. Nor did he disclose it when he went on CNBC that same week and praised the commander Defense Solutions was now counting on for help "He's got the heart of a lion" or when he told Congress the next month that it should immediately supply Iraq with large numbers of armored vehicles and other equipment.
He had made similar arguments before he was hired by Defense Solutions, but this time he went further. In his testimony to Congress, McCaffrey criticized a Pentagon plan to supply Iraq with several hundred armored vehicles made in the United States by a competitor of Defense Solutions. He called the plan "not in the right ballpark" and urged Congress to instead equip Iraq with 5,000 armored vehicles.
"We've got Iraqi army battalions driving around in Toyota trucks," he said, echoing an argument made to Petraeus in the Defense Solutions briefing packet.
Through seven years of war an exclusive club has quietly flourished at the intersection of network news and wartime commerce. Its members, mostly retired generals, have had a foot in both camps as influential network military analysts and defense industry rainmakers. It is a deeply opaque world, a place of privileged access to senior government officials, where war commentary can fit hand in glove with undisclosed commercial interests and network executives are sometimes oblivious to possible conflicts of interest.
Few illustrate the submerged complexities of this world better than Barry McCaffrey.
McCaffrey, 66, has long been a force in Washington's power elite. A consummate networker, he cultivated politicians and journalists of all stripes as drug czar in the Clinton cabinet, and his ties run deep to a new generation of generals, some of whom he taught at West Point or commanded in the Persian Gulf war, when he rose to fame leading the "left hook" assault on Iraqi forces.
But it was 9/11 that thrust McCaffrey to the forefront of the national security debate. In the years since he has made nearly 1,000 appearances on NBC and its cable sisters, delivering crisp sound bites in a blunt, hyperbolic style. He commands up to $25,000 for speeches, his commentary regularly turns up in The Wall Street Journal, and he has been quoted or cited in thousands of news articles, including dozens in The New York Times.
His influence is such that President George W. Bush and congressional leaders from both parties have invited him for war consultations. His access is such that, despite a contentious relationship with former Defense Secretary Donald Rumsfeld, the Pentagon has arranged numerous trips to Iraq, Afghanistan and other hotspots solely for his benefit.
At the same time, McCaffrey has immersed himself in businesses that have grown with the fight against terrorism.
The consulting company he started after leaving the government in 2001, BR McCaffrey Associates, promises to "build linkages" between government officials and contractors like Defense Solutions for up to $10,000 a month. He has also earned at least $500,000 from his work for Veritas Capital, a private equity firm in New York that has grown into a military industry powerhouse by buying contractors whose profits soared from the wars in Afghanistan and Iraq. In addition, he is the chairman of HNTB Federal Services, an engineering and construction management company that often competes for national security contracts.
Many retired officers hold a perch in the world of military contracting, but McCaffrey is among a select few who also command platforms in the news media and as government advisers on military matters. These overlapping roles offer them an array of opportunities to advance policy goals as well as business objectives. But with their business ties left undisclosed, it can be difficult for policy makers and the public to fully understand their interests.
On NBC and in other public forums, McCaffrey has consistently advocated wartime policies and spending priorities that are in line with his corporate interests. But those interests are not described to NBC's viewers. He is held out as a dispassionate expert, not someone who helps companies win contracts related to the wars he discusses on television.
The president of NBC News, Steve Capus, said in an interview that McCaffrey was a man of honor and achievement who would never let business obligations color his analysis for NBC. He described McCaffrey as an "independent voice" who had courageously challenged Rumsfeld, adding, "There's no open microphone that begins with the Pentagon and ends with him going out over our airwaves."
McCaffrey is not required to abide by NBC's formal conflict-of-interest rules, Capus said, because he is a consultant, not a news employee. Nor is he required to disclose his business interests periodically. But Capus said that the network had conversations with its military analysts about the need to avoid even the appearance of a conflict, and that McCaffrey had been "incredibly forthcoming" about his ties to military contractors.
McCaffrey declined to be interviewed but released a brief statement.
"My public media commentary on the war labeled me as an early and serious critic of Rumsfeld's arrogance and mismanagement of operations in Iraq and Afghanistan," the statement said. "The New York Times noted my strong on-air criticism as an NBC commentator. My op-ed objections to the execution of the war were published in The Wall Street Journal, The Washington Post, The LA Times, USA Today and other media. Hardly the stuff of someone shilling a war for the administration or privately pushing his business interests with the Pentagon. Thirty-seven years of public service. Four combat tours. Wounded three times. The country knows me as a nonpartisan and objective national security expert with solid integrity."
In earlier e-mail messages, McCaffrey played down his involvement in lobbying for contracts, suggesting he mainly gave companies "strategic counsel." His business responsibilities, he wrote, simply do not conflict with his duty to provide objective analysis on NBC. "Never has been a problem," he wrote. "Period."
McCaffrey did in fact emerge as a tough critic of Rumsfeld, describing him as reckless and incompetent. His central criticism that Rumsfeld fought the Iraq war "on the cheap" reflected his long-stated views on waging war. But it also dovetailed with his business interests. And his clashes with Rumsfeld were but one facet of a more complex and symbiotic relationship with the Bush administration and the military's uniformed leaders, records and interviews show.
With a few exceptions McCaffrey has consistently supported Bush's major national security policies, especially the war in Iraq. He advocated invasion, urged building up the military to sustain the occupation and warned that premature withdrawal would invite catastrophe.
In an article earlier this year, The New York Times identified McCaffrey as one of some 75 military analysts who were the focus of a Pentagon public relations campaign that is now being examined by the Pentagon's inspector general, the Government Accountability Office and the Federal Communications Commission. The campaign, begun in 2002 but suspended after the article's publication, sought to transform the analysts into "surrogates" and "message force multipliers" for the Bush administration, records show. The analysts, many with military industry ties, were wooed in private briefings, showered with talking points and escorted on tours of Iraq and Guantánamo Bay, Cuba.
The Pentagon inspector general is investigating whether special access gave any of these analysts an improper edge in the competition for contracts.
McCaffrey offers a case study of the benefits that can flow from favored access: an inside track to sensitive information about strategy and tactics; insight into the priorities of ground commanders; a private channel to officials who oversaw war spending, as the Defense Solutions example shows. In that case the company has yet to win the contract it hired McCaffrey to champion.
More broadly, though, his example reveals the myriad and often undisclosed connections between the business of war and the business of covering it.
A Move to Television
McCaffrey made his debut as a military analyst in the weeks after 9/11. NBC anchors typically introduced him by describing his medals or his exploits in the Gulf war. Or they noted he was a West Point professor, or the youngest four-star general in the history of the army.
They did not mention his work for military contractors, including a lucrative new role with Veritas Capital.
Veritas was a relatively small player in 2001, looking to grow through acquisitions and Pentagon contracts. Competing for contracts is a complex and subtle sport, governed by highly bureaucratic bidding rules and the old-fashioned arts of access and influence.
Veritas would compete on both fronts.
Just days before the terrorist attacks on Sept. 6, 2001 Veritas had announced the formation of an "advisory council" of well-connected retired generals and admirals, including McCaffrey. "They can really pick up the phone and call someone," Robert McKeon, the president of Veritas, would later tell The Times.
Access was also part of what drew NBC to McCaffrey. Capus said McCaffrey "opens doors with generals and others who we would not otherwise be able to talk to."
Veritas gave its advisers board seats on its military companies, along with profit sharing and equity stakes that were all the more attractive because Veritas intended to turn quick profits through initial public offerings. On Sept. 6, this might have been considered a gamble. Revenue growth a key to successful IPO's required sustained increases in military spending. But after Sept. 11, the only question was just how big those increases would be.
From his first months on the air, McCaffrey called for huge, sustained increases in military spending for a global campaign against terrorism. He also advocated spending for high-tech weapons, including some like precision-guided munitions and unmanned aerial vehicles that were important to the Veritas portfolio. He called the C-17 cargo plane also a source of Veritas contracts a "national treasure."
In a statement, Veritas said it had gained no "discernible benefit" from McCaffrey's television appearances and called his TV work "completely independent" from his role with Veritas.
In their corporate filings, Veritas military companies told investors they were well positioned to benefit from a widening global struggle against terrorism. The approaching conflict with Iraq, though, would create new areas of tension between McCaffrey's fiduciary obligations to Veritas and his duties to NBC.
McCaffrey harbored significant doubts about the invasion plan. An informal participant in the war planning, he was troubled by Rumsfeld's resistance to an invasion force of several hundred thousand, he acknowledged months and years later in interviews. Rumsfeld's team, he said, was bent on making an "ideological" point that wars could be fought "on the cheap." There were not enough tanks, artillery or troops, he would say, and the result was a "grossly anemic" force that unnecessarily put troops at risk.
That is not what McCaffrey said when asked on NBC outlets to assess the risks of war. As planning for a possible invasion received intense news coverage in 2002, he repeatedly assured viewers that the war would be brief, the occupation lengthy but benign.
"These people are going to come apart in 21 days or less," he told Brian Williams on MSNBC.
In the fall of 2002 McCaffrey joined the Committee for the Liberation of Iraq, a group formed with White House encouragement to fan support for regime change. He also participated in private Pentagon briefings in which network military analysts were armed with talking points that made the case for war, records show.
In early 2003 Forrest Sawyer asked McCaffrey on CNBC what could go wrong after an invasion. Anticipating this very question, the Pentagon had invited McCaffrey and other analysts to a special briefing. Years later McCaffrey would say he knew that the post-invasion planning was a disaster. "They were warned very categorically and directly by many of us prior to that war," he said.
Given a chance by Sawyer to raise an alarm, the general reiterated Pentagon talking points about the "astonishing amount" of postwar planning.
And when Tom Brokaw asked him, days before the invasion, "What are your concerns if we were to go to war by the end of this week?" he replied, "Well, I don't think I have any real serious ones."
Only when the invasion met unexpected resistance did McCaffrey give a glimpse of his misgivings. "We've placed ourselves in a risky proposition, 400 miles into Iraq with no flank or rear area security," he told Katie Couric on "Today."
Rumsfeld struck back. He abruptly cut off McCaffrey's access to the Pentagon's special briefings and conference calls.
McCaffrey was stunned. "I've never heard his voice like that," recalled one close associate who asked not to be identified. He added, "They showed him what life was like on the outside."
Robert Weiner, a longtime publicist for McCaffrey, said the general came to see that if he continued his criticism, he risked being shut out not only by Rumsfeld but also by his network of friends and contacts among the uniformed leadership.
"There is a time when you have to punt," said Weiner, emphasizing that he spoke as McCaffrey's friend, not as his spokesman.
Within days McCaffrey began to backpedal, professing his "great respect" for Rumsfeld to Tim Russert. "Is this man O.K.?" the Fox News anchor Brit Hume asked, taking note of the about-face.
For months to come, as an insurgency took root, McCaffrey defended the Bush administration. "I am 100 percent behind what the administration, what the president of the United States, is doing in Iraq," he told Williams that June.
A Corporate Troubleshooter
Rumsfeld's swift reaction underscored the administration's appreciation of McCaffrey's influence. His comments were catalogued and circulated at the White House and Pentagon.
Other network analysts were monitored, too, but not the way McCaffrey was. He was different. He was one of the few retired four-star generals on television, and his well-known friendships with men like Petraeus and General John Abizaid gave him added currency.
As the wars in Iraq and Afghanistan dragged on, McCaffrey increasingly gave public expression to the private frustrations of generals pressing their civilian bosses for more troops, weapons and reconstruction money. The army, he repeatedly warned, could break under the strain.
These were politically charged topics, and so the administration worked to influence his commentary, using carrots and sticks alike. In 2005, for example, Rumsfeld took umbrage at remarks McCaffrey made to The Washington Times about the impact of unchecked poppy production in Afghanistan. Rumsfeld wrote to General Peter Pace, then the chairman of the Joint Chiefs of Staff, demanding to know where McCaffrey "got his information," records show. No less than an assistant secretary of defense was dispatched to speak with McCaffrey, who said he had been misquoted.
In a letter to The Times, McCaffrey's lawyer, Thomas Clare, said the general's recurring criticisms had cost him "business opportunities with defense contractors." NBC executives said they, too, fielded high-level complaints, and McCaffrey was not invited back to the Pentagon's analyst briefings.
On the other hand, when Pentagon officials noticed that McCaffrey was scheduled to appear on programs like "Meet the Press," they asked generals close to him to suggest themes, records show. The Pentagon also began paying for McCaffrey to travel to Iraq and Afghanistan. Other military analysts were invited on trips, but only in groups. McCaffrey went by himself under the sponsorship of Central Command's generals.
The stated purpose was for McCaffrey to provide an outside assessment in his role as a part-time professor at West Point. But his trips were also an important public relations tool, meticulously planned to arm him with anecdotes of progress. Records show that Central Command's generals expected him to "publicly support their efforts" upon his return home and solicited his advice on how to "reverse the perception" in Washington of a lost war.
After each trip McCaffrey embarked on a news media campaign, writing opinion articles, granting interviews, publishing "after action" reports on his firm's Web site. Each time he extolled Central Command's generals and called for a renewed national commitment of money and support.
At the same time, McCaffrey used his access to further business interests, as he did during the summer of 2005, when Americans were turning against the Iraq war in droves.
Veritas had been on a shopping spree, buying military contractors deeply enmeshed in the war. Its biggest acquisition was of DynCorp International, best known for training foreign security forces for the United States government. By 2005 operations in Iraq and Afghanistan accounted for 37 percent of DynCorp's revenues.
The crumbling public support, though, posed a threat to Veritas's prize acquisition. The changing political climate and unrelenting violence, DynCorp warned investors, could force a withdrawal from Iraq.
What is more, some of DynCorp's Iraq contracts were in trouble, plagued by cost overruns, inept work by subcontractors and ineffective training programs. So when DynCorp executives learned that McCaffrey was planning to travel to Iraq that June, they asked him to sound out American commanders and reassure them of DynCorp's determination to make things right.
"It is useful both ways," Gregory Lagana, a DynCorp spokesman, said in an interview. "If there were problems, and there were, then we could get an independent judgment and fix them."
Lagana said McCaffrey had been a troubleshooter for DynCorp on other trips. "He'll say: 'I'm going over. Is there anyone you want me to see?' " Lagana said. "And then he'd go in and say, 'I'm on the board. What can you tell me?' "
The Pentagon had its own agenda. For eight days, McCaffrey was given red-carpet treatment. Iraqi commandos even staged a live-fire demonstration for him. But McCaffrey also was given access to officials whose decisions were important to his business interests, including DynCorp, which was planning an IPO He met with Petraeus, who was then in charge of training Iraqi security forces and responsible for supervising DynCorp's 500 police trainers. He also met with officials responsible for billions of dollars' worth of contracts in Iraq.
McCaffrey would not discuss these sessions, and Petraeus said in an e-mail message to The Times that he had no reason to discuss DynCorp with McCaffrey because he would have gone directly to DynCorp's executives in Iraq.
Back home, McCaffrey undertook a one-man news media blitz in which he contradicted the dire assessments of many journalists in Iraq. He bore witness to progress on all fronts, but most of all he vouched for Iraq's security forces. A year earlier, before joining DynCorp's board, he had described these forces as "badly equipped, badly trained, politically unreliable." Just months before, Gary Luck, a retired four-star army general sent to assess progress in Iraq, had reported to Bush that security training was going poorly. Yet McCaffrey now emphasized his "surprising" conclusion that the training was succeeding.
After Bush gave a speech praising Iraq's new security forces, Brian Williams asked McCaffrey for an independent assessment. "The Iraqi security forces are real," McCaffrey replied, without noting the concerns about DynCorp.
His financial stake in the policy debates over Iraq was not mentioned. He did not disclose that he owned special stock that allowed him to share in DynCorp's profits, up 87 percent that year largely because of the Iraq war.
"I took as objective a look at it as I could," he told David Gregory, the NBC correspondent.
A Contract in Iraq
In his written statements to The Times, McCaffrey said his role with Veritas was "governance, not marketing," and Veritas insisted that he never "solicited new or existing government contracts."
McCaffrey did, however, play an indirect role in helping Veritas win one of its largest contracts, to supply more than 8,000 translators to the war in Iraq. The contract had been held by L-3 Communications, but when McCaffrey got wind that the army was considering seeking new bidders, he called his friend James Marks, a major general in the army who was approaching retirement and was versed in the uses of translators, having served as intelligence chief for land forces during the Iraq invasion.
As Marks recalls it, McCaffrey asked him to lead an effort to win the contract for Veritas.
Marks, who became a CNN military analyst after his retirement in 2004, would be named president of a new DynCorp subsidiary, Global Linguist Solutions, created in July 2006 to bid for the translation contract. In August 2006 Veritas designated McCaffrey as chairman of Global Linguist. According to a 2007 corporate filing, McCaffrey was promised $10,000 a month plus expenses once Global Linguist secured the contract. He would also be eligible to share in profits, which could potentially be significant: the contract was worth $4.6 billion over five years, but only if the United States did not pull out of Iraq first.
In the fall of 2006, that was hardly a sure thing. With casualties rising, the nation's discontent had been laid bare by the November elections. Then, in December, the Iraq Study Group recommended withdrawing all combat brigades by early 2008.
That month, in a flurry of appearances for NBC, McCaffrey repeatedly ridiculed this recommendation, warning that it would turn Iraq into "Pol Pot's Cambodia."
The United States, he said, should keep at least 100,000 troops in Iraq for many years. He disputed depictions of an isolated and deluded White House. After meeting with the president and vice president on Dec. 11 in the Oval Office, he went on television and described them as "very sober-minded."
McCaffrey was hardly alone in criticizing the Iraq Study Group, and in his e-mail messages to The Times he said his objections reflected his judgment that it was folly to leave American trainers behind with no combat force protection. But in none of those appearances did NBC disclose McCaffrey's ties to Global Linguist.
NBC executives asserted that the general's relationships with military contractors are indirectly disclosed through NBC's Web site, where McCaffrey's biography now features a link to his consulting firm's Web site. That site, they said, lists McCaffrey's clients.
While the general's Web site lists his board memberships, it does not name his clients, nor does it mention Veritas Capital, by one measure the second-largest military contractor in Iraq and Afghanistan, after KBR. In any event, Capus, the NBC News president, said he was unaware of McCaffrey's connection to the translation contract. Capus declined to comment on whether this information should have been disclosed.
CNN officials said they, too, were unaware of Marks's role in the contract. When they learned of it in 2007, they said, they were so concerned about what they considered an obvious conflict of interest that they severed ties with him. ( Marks, who also spoke out against the withdrawal plan on CNN, said business considerations did not influence his comments.)
On Dec. 18, 2006, the Pentagon stunned Wall Street by awarding the translation contract to Global Linguist. DynCorp's stock jumped 15 percent.
Hiring a General
After touring Iraq in March 2007 and meeting with American officials responsible for equipping Iraq's military, McCaffrey published a trip report recommending that the United States equip Iraq with 5,000 armored vehicles.
This kind of access had strong appeal to Ringgold, Defense Solutions' chief, who had a plan to rebuild Iraq's decimated fleets of armored vehicles by culling "leftovers" from depots across Eastern Europe. "I was looking for an advocate," Ringgold recalled.
McCaffrey soon arrived for an audition at the Defense Solutions headquarters outside Philadelphia. "Frankly," Ringgold recalled, "I had to get over the sticker shock of what he was going to cost me."
McCaffrey liked his basic concept but told him to think bigger, Ringgold said. Instead of minimally refurbished equipment, he urged Ringgold to sell "Americanized" armored vehicles upgraded with thermal sights and other expensive extras. And why not also team up with DynCorp and others to supply the maintenance, logistics and training to keep them running?
The suggestions vastly increased the proposal's scale and price tag, but the general seemed to have a read on the complex interplay between the Iraqi government and the American military leadership, Ringgold recalled. For a retainer and an undisclosed equity stake, McCaffrey signed on weeks later, then promptly wrote to Petraeus.
His letter, drafted with help from Defense Solutions, explained that in the three months since his trip to Iraq, he had found just one feasible way to equip Iraq with enough armored vehicles to permit a "phased redeployment" of American combat forces the proposal by Defense Solutions. He urged Petraeus to act quickly but did not disclose that he had just been hired by Defense Solutions.
In his e-mail message to The Times, Petraeus said he received "innumerable" letters from "would be" contractors. In this case, he wrote, he simply sent McCaffrey's material "without any endorsement" to James Dubik, the general then responsible for training Iraq's security forces.
General Dubik, now retired, said in an interview that he, too, received a letter and information packet, and as a result briefed Iraq's defense minister. "Quite frankly," he said, "I thought it was a good idea."
Dubik emphasized that although he used Defense Solutions briefing materials, he first "sanitized" them of any mention of the company. He said he presented the idea as his own, intending to ask Defense Solutions to bid if the Iraqis liked the concept. But the defense minister reacted coolly, he said, arguing that Iraq deserved advanced American-made vehicles.
McCaffrey also sent letters to top lawmakers and approached contacts inside the Defense Department bureaucracy that oversees foreign military sales. His influence was immediately apparent. For example, McCaffrey reached out to Major General Timothy F. Ghormley, chief of staff at Central Command, who promptly invited Ringgold to a meeting in Tampa, Florida Ringgold recalled General Ghormley's first words: "Why aren't we doing this already?"
Nevertheless, by late 2007, Defense Solutions still had no deal. McCaffrey, Ringgold recalled, said the company needed to get to Baghdad and meet directly with Iraqi leaders and important Americans.
On Oct. 26, 2007, McCaffrey wrote an e-mail message to Petraeus proposing to return to Iraq. He said his "principal interest would be to document progress in standing up Iraqi security forces," and he proposed traveling soon, before the presidential primaries, so he could "speak objectively before politics goes to roar level."
In early December McCaffrey arrived in Baghdad, where he met with Generals Petraeus and Dubik, among others.
Petraeus said he did not recall them discussing Defense Solutions. Dubik recalled giving McCaffrey a detailed briefing on the effort to equip Iraq's army, including the plans for armored vehicles. He said it was a measure of McCaffrey's integrity that he did not raise Defense Solutions. "He's not going to cross the line," Dubik said.
Ringgold said McCaffrey "made it perfectly clear" that he would not discuss their proposal with the two generals and even sent instructions that he was not to be contacted in Iraq "to avoid even the perception of conflict of interest."
But Defense Solutions used information McCaffrey gleaned from his meetings to refine its proposal. Ringgold followed McCaffrey to Baghdad in February 2008 and then made plans to return in the spring to meet with Generals Dubik and Petraeus. "General McCaffrey insisted that I see you," Ringgold wrote to Petraeus in a March 20 e-mail message.
Petraeus forwarded Ringgold's message to Dubik, who warned Ringgold that while he was happy to meet, Iraq's defense minister was still hesitant. "They've gone back and forth on the refurbished stuff," Dubik wrote.
Defense Solutions turned to the White House. On May 9, Ringgold and Tom Korologos, a Republican lobbyist, met with a military aide to Vice President Dick Cheney and two National Security Council officials.
The next day, in an e-mail memorandum to his staff, Ringgold discussed other ways to press Iraqi and American officials, including generating news media coverage to suggest that Iraq's "failure to ready its army" was prolonging the occupation. McCaffrey had been making a similar argument for months on NBC and elsewhere. "The end of the game is that the Iraqis got to maintain internal order," he told Ann Curry, the NBC journalist.
Ringgold said he had never asked the general to take positions supporting Defense Solutions in his news media appearances. On the other hand, he added, "I hope he was thinking of us."
Weiner, the general's longtime publicist, said McCaffrey worked with clients "to get your mission achieved in the media." McCaffrey, he said, often speaks out with the twin goals of shaping policy and generating favorable coverage for clients with worthy products or ideas.
"His motive is pure," Weiner said. "It is national interest."
Despite Defense Solutions' efforts, Iraq recently placed orders for billions of dollars' worth of American-made armored vehicles. But the company is not giving up, and it continues to rely on the advice of McCaffrey, who returned to Iraq on Oct. 31 for another visit sponsored by the Pentagon.
Mecca pilgrims blocked from leaving Gaza
Saturday, November 29, 2008
By Nidal al-Mughrabi
Palestinian pilgrims bound for Mecca were prevented from leaving the Gaza Strip via Egypt Saturday as the enclave's Hamas Islamist rulers and the rival leadership in the West Bank traded blame for the hold-up.
The pilgrims, hoping to reach Saudi Arabia next week for the annual haj pilgrimage, told Reuters that Hamas police set up checkpoints 300 metres (yards) from the Rafah border post with Egypt and turned them away. Hamas security also barred journalists from the border area of the town of Rafah.
Hamas officials blamed Egypt, saying it had not opened the border as agreed. The Egyptian Foreign Ministry and witnesses in Rafah said Egypt opened the crossing point for the pilgrims on Saturday but none came.
The root of the problem appeared to lie in disputes between the two main Palestinian factions, Hamas and Fatah, which each controls one of the two Palestinian territories, and also involves Saudi Arabia's policy on issuing visas to Palestinians.
At Rafah, a 60-year-old pilgrim who gave his name as Abu Abdullah said: "I am not with Fatah and not with Hamas. I wanted to worship God and to go on the haj before I die.
"Sadly, the schism has now spilt into our religion."
Every Muslim who has the means should complete the haj at least once in his or her lifetime.
Saudi Arabia says it has granted visas only to Palestinians who registered for the haj through the Palestinian Authority, controlled by President Mahmoud Abbas's secular Fatah faction in the West Bank. Some 3,000 people in Gaza have done so.
A further 3,000 Gazans have tried to arrange visas through Hamas, which seized control of the enclave last year. Hamas is appealing to Saudi Arabia to relent and give them visas. Some Hamas leaders have said that unless it does so, they will prevent anyone leaving Gaza for the pilgrimage to Mecca.
At the Hamas-run Interior Ministry in Gaza, spokesman Ehad al-Ghsain denied halting pilgrims. "We are not sending people back. The Egyptians are keeping the crossing closed," he said.
An Egyptian official insisted the crossing was open to pilgrims and would remain so until Monday. Egypt has mostly kept Rafah closed since Hamas routed Fatah in Gaza last year.
Jamal Bawatma, minister of religious affairs for the Palestinian Authority, speaking by telephone from Mecca, accused Hamas of a "crime" against the pilgrimage. "Saudi Arabia only recognizes the Palestinian Authority which represents all Palestinians in Gaza and the West Bank," he said.
Both Saudi Arabia and Egypt have worked to promote an accord between the Palestinians to end a schism that has hamstrung Abbas's efforts to secure a peace settlement with Israel.
Mohammed Eid said he and other pilgrims who registered with the Hamas-run Ministry of Religious Affairs in Gaza had not been granted visas by Saudi Arabia. "We urge the Saudi king to give us visas, so that all pilgrims in Gaza can go on haj," Eid said.
"Why should my neighbour be allowed to leave and I stay here? I am not against my neighbour but this is political discrimination manifesting itself in religious matters."
(Additional reporting by Cairo newsroom; Writing by Joseph Nasr, Editing by Alastair Macdonald)
Saturday, November 29, 2008
HEBRON, West Bank: Jewish settlers and Palestinians hurled stones at each other in the West Bank city of Hebron on Saturday before Israeli soldiers separated the two sides, the army and Palestinian witnesses said.
Two Palestinians and two settlers were injured in the clashes, they said. One of the Palestinians is a researcher with the Israeli human rights group B'Tselem.
An Israeli army spokeswoman said the clashes erupted near a building whose ownership is disputed. Jewish settlers have been defying a November 16 ruling by Israel's High Court that they must leave what they dubbed the "House of Peace" or face eviction.
About 150 settlers, some armed, moved into the building, on the boundary line of Palestinian neighbourhoods, in March 2007, saying they had bought it from its Palestinian owner. The man denies having sold the building.
The Israeli Defence Ministry said it was negotiating with the settlers to leave the building voluntarily within a 30-day period allowed under Israeli law.
Hebron, in the Israeli-occupied West Bank, has been a flashpoint of Israeli-Palestinian violence. Some 650 settlers live in fortified enclaves guarded by Israeli troops in the heart of the city of 180,000 Palestinians.
(Reporting by Mustafa Abu Ghaniya; Writing by Joseph Nasr, editing by Tim Pearce)
The Associated Press
Saturday, November 29, 2008
TWICKENHAM, England: New Zealand beat an improved but still undisciplined England side 32-6 on Saturday to complete its third grand slam of the home unions and first without conceding a try.
The All Blacks patiently withstood early pressure from a side that initially appeared to have learned its lessons from last week's record 42-6 loss to South Africa, before taking advantage of needless penalties and scoring two tries in the last 22 minutes by Mils Muliaina. Ma'a Nonu then charged from inside his own half to wrap up the win.
"If someone said we'd win 13 out of 15 test matches this year, I'd have grabbed it," New Zealand coach Graham Henry said. "You don't go into a season saying you want to win this, this and this. You want to build a rugby side."
Both Muliaina's tries were in the same right-hand corner, with the second set up by an audacious piece of skill by Dan Carter. The No. 10 shaped as though he was set to spin the ball out wide but instead chipped it almost flat across the line without breaking stride straight into the hands of his fullback, who dived over to score.
Carter missed the conversion and it was mostly his unusually inaccurate kicking that had left England within three points of the All Blacks until indiscipline started to take a toll three minutes before halftime. Lee Mears and James Haskell were the first of four England players sent to the sin bin and referee Alain Rolland threatened to do the same to more of them for a string of offsides and handling of the ball on the ground.
Toby Flood, playing at flyhalf following Danny Cipriani's poor showings in losses to Australia and South Africa, became the third player to get a yellow card at the start of the second half. Tom Rees followed him late on, meaning that England effectively played almost half the match a man short, but it was the full 15-man side that New Zealand got its tries against.
The first came from a flowing move sparked by Jimmy Cowon's smart reverse pass and the second from Carter's quick wits. Nonu then rounded off a slick counter for a New Zealand side that has also beaten Scotland, Ireland and Wales in the past month.
But England, which has now missed out on fourth place in the rankings and a top seeding at the 2011 World Cup, showed enough of an improvement to suggest that if it can remedy its disastrous discipline and produce more quick ball it could again trouble the best sides.
"People say at least you turned up and played, but that's an absolute minimum for us," England manager Martin Johnson said. "It only takes little things at the wrong time and it makes a big difference."
If Nick Easter had spotted Jamie Noon on his shoulder instead of going for the line himself at the start of the second half, England would probably have been within two points of New Zealand with 38 minutes to play. Instead he was brought down five meters (yards) out and the All Blacks took full advantage.
"Today epitomized what we did all year," Henry said. "We hung in and in the last 20 minutes pulled away."
Although the defeat could have been heavier if Carter had scored more than six kicks from his 11 attempts, Johnson can take comfort from the fact that the All Blacks never threatened England's line until Muliaina touched down in the corner in the 58th minute.
"We made a very good attacking team look average," Johnson said. "As a group we need to improve our second-half performance."
With their team a 12-1 underdog to win odds unheard of in recent times for England at Twickenham and fearing a loss as ugly as the record 64-22 decision in Dunedin 10 years ago, England's fans met the All Blacks' traditional pre-match haka with a defiantly sung rendition of "Swing Low, Sweet Chariot."
Both teams made early mistakes, New Zealand conceding an early penalty for using hands in a ruck but Flood then missed touch with his kick and Delon Armitage sliced a clearance to put the home side under early pressure.
Rather than crumbling, England responded by driving the All Blacks back from the lineout and forcing its way upfield aided by a huge hit on Rodney So'oialo by Phil Vickery. England strung together eight phases of possession, with Easter and Vickery powering through tackles until, typically, the move broke down when Riki Flutey was penalized for not releasing.
That marked the start of England conceding the sort of penalties that blighted its recent performances. Mears was carded for coming in around the side, Danny Care was whistled for diving over a ruck, Haskell went off for tackling So'oialo without the ball, and Paul Sackey was penalized for holding onto the ball on the floor.
"If I have to put another four in the bin, I'll put four in the bin," Rolland warned England captain Steve Borthwick as Carter made it 12-3 halftime.
And Henry acknowledged that his players benefited from Rolland's tough stance.
"He was very strict and unless you have that playing in the Premiership or Super 14 consistently, it's difficult," Henry said. "If there's a consistently high standard like that, you're going to get a better game of rugby.
"I think it's possible in the long term. I just hope everybody learns from it."
The Associated Press
Saturday, November 29, 2008
CARDIFF, Wales: Wales held off a frenzied assault in the second half to beat Australia 21-18 Saturday and finally claim a win over the Southern Hemisphere powerhouse.
Although Australia enjoyed 63 percent of possession in the second half and was virtually encamped in the Welsh 22 for much of the final quarter, the Six Nations champions hung on at the Millennium Stadium to record their 10th win in 101 years of playing the Wallabies.
It was Australia's first loss in Europe this month, having beaten Italy, England and France. Wales threatened both South Africa and New Zealand earlier in November, before ultimately losing.
Wales, which failed to cross the line against the Springboks and All Blacks, scored two tries through winger Shane Williams and fullback Lee Byrne, while Stephen Jones kicked two penalties, a drop goal and a conversion.
Australia scored two tries through Mark Chisholm and Digby Ioane. Matt Giteau kicked a penalty, a drop goal and a conversion.
"I'm so proud," said New Zealand-born Wales coach Warren Gatland. "Somebody had to fly the flag for the Northern Hemisphere. ... It didn't really matter how we got the result, we just really needed that win. It gives us a real boost as we look ahead to next year's Six Nations."
In the second minute of the match, Australia lost captain Stirling Mortlock when the inside center crashed into his Welsh opposite, Jamie Roberts, and had to be helped off the field.
Roberts, however, recovered from the clash and two minutes later split the Australian defense through the middle before shuffling the ball out to Williams for the opening try.
"Considering Stirling is such an influential skipper who has played every minute of this tour, I think the boys responded well," said Phil Waugh, who took over as Australia captain. "We had a couple of chances to win this game but we failed to convert pressure into points."
For the first 14 minutes the Wallabies had barely mounted a challenge when Wales failed to secure the ball having won the line-out. Chisholm pounced on the loose ball and sprinted 60 meters for the tourists' opening try.
Giteau gave Australia a 10-5 lead with a calmly taken drop goal but a short time later Wallabies hooker Stephen Moore was sin-binned for 10 minutes for killing the ball. Jones scored the resulting penalty and, with Australia a man down, Byrne burst through to retake the lead.
Wales should have extended its 15-10 lead but flanker Martyn Williams fumbled the ball with the tryline within reach just before halftime.
After the break, Giteau narrowed the gap to 15-13 while Jones twice missed relatively easy penalties for the home side, though he atoned for those misses somewhat by scoring a quick drop goal to restore the margin to six points.
"It wasn't a great spectacle," said Australia coach Robbie Deans. "But I'm sure there's thousands of Welshman who disagree with me."
In the final 20 minutes, the Wallabies hammered the Welsh defense. In a rare break-out from their half, Wales was awarded a penalty that Jones converted.
From the restart, Australia surged upfield and Ioane finally found a way through in the 80th minute but Wales managed to hang on to its slim lead for the rest of the game.
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