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A report published by researchers at the University of Toronto’s Joint Center for Bioethics is shaping global attitudes towards pandemic preparedness planning.
The Stand on Guard for Thee report, published in 2005, outlines an ethical framework for decision makers—hospital administrators, physicians, nurses, epidemiologists, public health workers—planning for a global influenza pandemic. ....
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| by Science Daily | |
| In 430 B.C., a new and deadly disease—its cause remains a mystery—swept into Athens. The walled Greek city-state was teeming with citizens, soldiers and refugees of the war then raging between Athens and Sparta. As streets filled with corpses, social order broke down. Over the next three years, the illness returned twice and Athens lost a third of its population. It lost the war too. The Plague of Athens marked the beginning of the end of the Golden Age of Greece. The Plague of Athens is one of 10 historically notable outbreaks described in an article in The Lancet Infectious Diseases by authors from the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health. The phenomenon of widespread, socially disruptive disease outbreaks has a long history prior to HIV/AIDS, severe acute respiratory syndrome (SARS), H5N1 avian influenza and other emerging diseases of the modern era, note the authors. "There appear to be common determinants of disease emergence that transcend time, place and human progress," says NIAID Director Anthony S. Fauci, M.D., one of the study authors. For example, international trade and troop movement during wartime played a role in both the emergence of the Plague of Athens as well as in the spread of influenza during the pandemic of 1918-19. Other factors underlying many instances of emergent diseases are poverty, lack of political will, and changes in climate, ecosystems and land use, the authors contend. "A better understanding of these determinants is essential for our preparedness for the next emerging or re-emerging disease that will inevitably confront us," says Dr. Fauci. "The art of predicting disease emergence is not well developed," says David Morens, M.D., another NIAID author. "We know, however, that the mixture of determinants is becoming ever more complex, and out of this increased complexity comes increased opportunity for diseases to reach epidemic proportions quickly." For example, more people travel more often over greater distances and in less time now than at any time in the past. One consequence of the increased mobility in the modern age can be seen in the 2003 outbreak of the novel illness SARS, which rapidly spread from Hong Kong to Toronto and elsewhere as infected passengers traveled by air. To better understand and predict disease emergence, Dr. Morens and his coauthors stress the need for research aimed at broadly understanding infectious diseases as well as specifically understanding how disease-causing microorganisms make the jump from animals to humans. In a narrow sense, epidemics are caused by particular microorganisms, and the study of infectious disease has historically been microbe-focused. For example, the Black Death (bubonic plague), which killed some 34 million Europeans in the middle of the 14th century, was caused by the bacterium Yersinia pestis. In a broader sense, however, epidemics are caused by complex and not fully predictable interactions between the disease-causing microbe, the human host and multiple environmental factors, the authors note. The Black Death, for instance, was borne westward along newly established land and sea trade routes from its probable origin, China, into multiple European countries. Similarly, patterns of human movement along trade routes, specifically truck routes throughout Africa, played a role in the spread of HIV throughout that continent. Greater consideration must be given, say the NIAID authors, to broader, interlinked factors such as climate, urbanization, increased international travel and the rise of drug-resistant microbes, and the ways in which these factors combine to spark new epidemics. Aside from commerce and travel, the NIAID authors point to several other factors that underlie many notable emerging diseases: poverty, the breakdown of public hygiene practices, and susceptibility of human populations to microbes against which they have no pre-existing immunity. This last factor played a key role in the smallpox epidemic that afflicted the Aztecs of 16th century Mexico. Smallpox had ravaged European communities for centuries, but until the Spanish arrived on the Yucatan coast in 1519, the disease was unknown in the New World. Historians believe that some 3.5 million people in central Mexico died in the first year of the epidemic. Epidemics also can spur advances in public health, note the authors. They point to the yellow fever epidemics of 1793-98, which began in the then-U.S. capital, Philadelphia. Though the entire federal government and most Philadelphians fled, those who remained formed an emergency government and mobilized such marginalized groups as African-Americans and immigrants to fight the outbreak. In 1798, Congress established the Marine Hospital System—forerunner of the modern U.S. Public Health Service—to provide, at public expense, medical care for sick and injured merchant seamen. Historians generally agree that a prime impetus for creating the Marine Hospital System was the yellow fever epidemics. Modern epidemiology began in reaction to another epidemic, says Dr. Morens. In the early 1830s, as cholera made its way along waterways from Asia towards Europe, French officials attempted to prepare their country in advance of an outbreak. Teams of scientists were sent to Poland and Russia to observe the outbreaks there. Throughout France, coastal health agencies and new quarantine stations were established; in Paris, a network of health inspection offices was created to coordinate inspection of wells, cesspools and latrines of both public and private buildings. Despite these efforts, cholera arrived in Paris on March 29, 1832, with explosive effect—within two weeks, there were 1,000 cases, 85 percent of them fatal. Daily newspapers published lists of cases allowing armchair epidemiologists to see trends in illness and deaths. "For the first time in history," write the NIAID authors, "a large-scale emerging epidemic was scientifically investigated in 'real time' using census data in a prospective population-based approach that featured analyses of morbidity and mortality stratified by age-group, sex, occupation, socioeconomic status and location." |
| by Anthony L. Kimery | |
| 'An effective overall and public health response depends largely on the availability of electricity' Buttressing what a variety of catastrophic emergency public health authorities have warned about for some time, a new report by the Center for Infectious Disease Research & Policy (CIDRAP) has sounded the alarm about the need for protecting the nation’s electric power grid in the event of a pandemic. The report, “Pandemic Influenza, Electricity, and the Coal Supply Chain,” explained that “during the next pandemic, the demand for critical products and services that we depend on for immediate health and safety will likely outstrip supply, prompting shortages that could exacerbate morbidity and mortality.” “One example of such a critical product is electricity,” the report emphasized,” pointing out that “coal … is the primary fuel for power generation in the United States. Usage varies by region; the Midwest, for example, generates approximately 75 percent of its electricity from coal, whereas the west coast generates about 5 percent from coal.” Yet “despite regional differences in coal usage, a pandemic is likely to break links in the coal supply chain, thus disrupting electrical generation. This has the potential to severely endanger the bulk electrical power system in most of the United States,” wrote the authors of the report, CIDRAP Director Dr. Michael T. Osterholm and Nicholas S. Kelley, research assistant with “CIDRAP Business Source” and a doctoral student in the Divison of Environmental Health Sciences at the University of Minnesota's School of Public Health. Osterholm and Kelley stated that “an effective overall and public health response depends largely on the availability of electricity. Preventing disruptions in the coal supply chain is paramount, and such an effort will certainly require a financial investment. But the consequence of failing to prepare may be catastrophic. We believe the nation must reduce the risk that a pandemic poses to the generation of electricity and the collateral damage to society that will occur without electricity.” The report urges the federal government to “assume primary responsibility for ensuring that coal miners and their supporting infrastructure personnel have priority access to antiviral drugs, pandemic vaccines, and other critical products and services (eg, critical pharmaceutical drugs and food)." Currently, coal miners and other essential electric power generation infrastructure personnel are not identified as a priority in either federal or state plans to support critical infrastructures during a pandemic. A paper in a recent edition of Biosecurity and Bioterrorism tends to support the CIDRAP report, noting “the critical relationship between intact societal infrastructure and health.” “Significant breakdowns in infrastructure could lead to devastating secondary public health effects and neglect of those most in need,” states the paper, “Ethics and Severe Pandemic Influenza: Maintaining Essential Functions Through a Fair and Considered Response.” A collapse of the nation’s power system could lead to “significant outbreaks of other infectious diseases,” such as drug-resistant Hospital Acquired Infections and multi-drug-resistant tuberculosis – emerging and re-emerging infectious diseases which are a growing problem today, as HSToday.us has reported. The CIDRAP report asserts that federal pandemic plans have failed to "conceptualize the magnitude of supply chain disruptions that will occur in a global just-in-time economy; address how to prevent pandemic-related electric power disruptions; and offer guidance on how to respond if electrical power is disrupted during a pandemic." "Current levels of pandemic planning are likely insufficient to sustain the coal supply chain during a pandemic; the link between the public health response and reliable access to coal-fueled electricity is neither understood nor addressed in current pandemic plans in the United States,” the report stated. Osterholm and Kelley wrote that the public health sector would have great difficulty functioning without a stable supply of electricity during a pandemic. Echoing other pandemic planners who’ve taken a big picture look at the inherent problems stemming from a pandemic, Osterholm and Kelley say pandemic planning has largely been relegated as a public health issue, avoiding meaningful conceptualization of broader pandemic-related supply chain disruptions in today's just-in-time supply chain economy. They further blame a lack of leadership in pandemic planning for the nation's critical infrastructure – especially electric power. |
A one-time vice presidential candidate who is considered an expert on the U.S. Constitution says it is up the electors from the 50 states to make certain President-elect Barack Obama is a natural-born U.S. citizen before they cast votes for him in the Electoral College Dec. 15.
"If they do their duty, they would make sure that if they cast a vote for Mr. Obama, that Mr. Obama is a natural-born citizen," Herb Titus, the Constitution Party's running mate to Howard Phillips in 1996, told WND today.
"I think it should be resolved. The duty is in the Electoral College. Every Obama elector that is committed to casting a vote on the 15th of December, they have a constitutional duty to make certain whether Mr. Obama is a natural-born citizen," he said.
If the electors fail their duty and Obama proves ultimately to fail the eligibility requirement of the U.S. Constitution, there would be only the laborious, contentious and cumbersome process of impeachment available to those who would wish to follow the Constitution, he suggested.
The issue of Obama's citizenship has been in the news for weeks as multiple legal claims have asserted the Democrat is not a natural-born U.S. citizen. There have been claims he was born in Kenya, that he's a British subject because of his father and that he lost his citizenship in Indonesia.
Two of the cases are pending before the U.S. Supreme Court and several others that have fallen by the wayside.
Also, thousands of people are jumping aboard a petition that demands documentation of Obama's eligibility to hold the highest office in the U.S., not just assurances from party officials.
Already, more than 75,000 petitioners have joined the effort coordinated by WND founder and editor Joseph Farah.
To participate, sign the petition here.
A report accompanying Farah's petition explains the many questions raised about Obama's eligibility, from an apparently fabricated "Certification of Live Birth" posted online to questions about what nation's passport he used to travel to Pakistan.
One case is scheduled for a conference among U.S. Supreme Court justices Dec. 5. Conferences are private meetings of the justices at which they review cases and decide which ones to accept for formal review. The Supreme Court's website listed the date for the case brought by Leo C. Donofrio against Nina Wells, the secretary of state in New Jersey, over not only Obama's name on the 2008 election ballot but those of two others, Sen. John McCain and Roger Calero.
The case, unsuccessful at the state level, was submitted to Justice David Souter, who rejected it. The case then was resubmitted to Justice Clarence Thomas for conference Dec. 5.
Titus holds a law degree cum laude from Harvard, is admitted to practice before the U.S. Supreme Court and a long list of federal court districts, and helped found a law school. He told WND the framers of the Constitution specifically wanted the electors, citizen voters from all the states, to determine the presidency to avoid chief executives who are indebted to political parties or court decisions.
In 1788, Titus noted, Alexander Hamilton wrote in the Federalist Papers on the issue of the presidential election that "nothing was more to be desired than that every practicable obstacle should be opposed to cabal, intrigue, and corruption."
"They have not made the appointment of the president to depend on any pre-existing bodies of men, who might be tampered with beforehand to prostitute their votes; but they have referred it in the first instance to an immediate act of the people of America, to be exerted in the choice of persons for the temporary and sole purpose of making the appointment," Hamilton wrote. "And they have excluded from eligibility to this trust, all those who from situation might be suspected of too great devotion to the president in office. No senator, representative, or other person holding a place of trust or profit under the United States, can be of the numbers of the electors.
"Talents for low intrigue, and the little arts of popularity, may alone suffice to elevate a man to the first honors in a single state; but it will require other talents, and a different kind of merit, to establish him in the esteem and confidence of the whole Union, or of so considerable a portion of it as would be necessary to make him a successful candidate for the distinguished office of President of the United States," Hamilton wrote in support of the concept of the Electoral College.
If the electors fail, Titus said, "I think it moots the point."
"I don't think there is anything in the Constitution [that would allow a challenge based on a candidate's constitutional qualifications.]
"It would politically undermine Obama's re-election … and there may be an impeachment if someone concluded he deliberately misled the people, and knew he was not a natural-born citizen," he said.
Titus said the evidence clearly shows there are questions about Obama's birth that should be resolved. But he said he doesn't believe the courts will do anything, nor should they.
"If it's revealed it's only going to be [revealed because of] investigative journalism or by Obama himself," he said.
"It's only the Electoral College that has the duty and authority to determine is a person is qualified to be president," Titus said.
"We should act accordingly, get the names of all the electors, including McCain's electors, and urge them to do their duty," he said.
He said, however, the bottom line is that there are some people who would rather ignore the Constitution than dispense with a candidate who may be unqualified.
"Politically, [being ineligible] would be a very serious problem for [Obama,]" he said. "But there also would be people who would only shrug."
"It's up to the people. Essentially the Constitution is a covenant of the people with their government. If the people don't insist on their government officials abiding by the covenant, I don't know what you can do," he said.
Titus said the basis of a natural-born requirement traces back to the Old Testament, where Moses prophesied about the people of Israel getting a king.
"The whole notion of a natural-born citizen is designed for the purpose of making sure that the chief executive would not have politically divided loyalties," he said.
Supreme Court would decide?
Meanwhile, a veteran law enforcement officer and director of criminal justice courses says he believes the 2008 election results ultimately could come down to a decision by the U.S. Supreme Court, which issued a ruling eight years ago that helped put George W. Bush in the White House.
The assessment comes from James H. Hafeman, a veteran of decades in law enforcement who supervised an armed security force, taught criminal justice and directed criminal justice programs in Michigan. He submitted a commentary to WND, outlining his evidence.
Hafeman said his argument is based mostly on the U.S. Constitution, which outlines the requirements for eligibility for president, including that the candidate be a "natural-born" citizen.
While replacing a president is outlined in the Constitution, he warned the replacement of a president-elect who is found to be ineligible isn't simple.
"While many have speculated that an official declaration of Obama’s ineligibility may lead to the appointment of Joe Biden as president, the speculation is inaccurate. Since it was up to the respective political party to properly vet their candidate before a primary election, they may not qualify to be rewarded for their lack of integrity. Additionally there is no separate balloting for president and vice-president; they share the same slot. Obama's ineligibility would effectively void the entire Obama-Biden ticket," he said.
Therefore, he said, other provisions likely would come into play.
"We already know that if two candidates have an equal number of Electoral College votes, the members of the House of Representatives will collectively choose the president. Many citizens have been led to believe that it is the responsibility of the House is to decide the winner by majority vote, but that is incorrect. Members of the House of Representatives from each state would meet in a state-caucus type of meeting and vote with all congressional members from their respective state. The majority of the state's delegation would only have only one vote. Out of the 50 votes allotted among the House of Representative members, 25 plus a minimum of one vote would be required to elect the president," he wrote.
William Ball, a political science professor at Northern Michigan University, has said, "The results of the Electoral College are sent to the president of the Senate, but if there is no winner, then the House of Representatives, not the whole Congress, decides who will be president. But, in this process the State of Vermont or Wyoming with their one vote each would have as much power as California or New York."
Hafeman said the Constitution demands the same process for a situation in which a seated president becomes ineligible, but Obama won't be inaugurated until Jan. 20.
"This may be the first known case where a presidential candidate intentionally attempted to side step the specific requirements of the Constitution in order to run for the office of president," Hafeman said. "The 12th Amendment is quite clear. If the president is found ineligible, the vice-president shall become the president. However, the key is the 'president,' not the president-elect. In other words, if Mr. Obama is found ineligible to hold the office prior to his January 20, 2009, inauguration, the 12th Amendment would not necessarily be the guiding instrument for the Supreme Court.
"The Justices would be free to make their own determination regarding the specifics of the general election," Hafeman wrote.
So, Hafeman concluded, the high court may have to make some decisions.
If the worse fears about Obama's birthplace prove true, Hafeman said, the court will have to decide the consequences for providing inaccurate assurances of eligibility.
"Second, what process will be used to designate someone who will assume the office?" he wrote.
"Since all the secretaries of state will be forced to nullify the Obama-Biden ticket, the Electoral College votes would go to the next highest contender. The principle would award McCain-Palin with the total possible Electoral College votes – all 538 electors," he suggested.
"In the national-interest scenario, the question that might be asked by the Democrats may focus on the question as to whether or not they could hold an emergency national convention in order for the party to re-nominate a president and/or another vice-president candidate. If the Supreme Court declares the entire election invalid, then that may be a possibility, but it is highly unlikely since every other presidential team on the ticket were legitimate," he wrote.
"The Supreme Court may decide a new election is in order and would have to waive the two-term limitations of George W. Bush so that he can remain in office until the conclusion of the election. The continuation of his term is a viable course of action, but it may not be an action favored by the Supreme Court. Instead, the justices may simply view the anomaly as a political race with an illegitimate and disqualified opponent, which would result in a win for the McCain-Palin ticket."
On WND's new forum page, the level of frustration was rising. Dozens contributed their thoughts immediately after the forum was posted:
"What makes Obama non-respon[sive] to the simplest of requests?" asked one reader. "Does he think that it is politically incorrect to ask for authentication of the myriad of facts about himself … Is he testing the grounds to see how far he can play with this charade?"
Other comments included:
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By Mike Pechar
A new palm-size acoustic device designed by the British company Qinetiq calculates the exact position of rifle fire and an electronic voice alerts the soldier on bearing and range.
Called EARS for Early Attack Reaction System, the device allows the soldier to jump to safety and return fire. Welcome news, I think.
The device, which costs around £2,500, works by isolating the crack of the sniper rifle thanks to four microphones, a GPS system and a powerful microprocessor.The full range and accuracy of the gunshot localization system are understandably kept secret. Expect the device to be on the battlefield starting in January.It takes less than a tenth of a second and provides the results in audio and visual formats. It can even send a grid reference via radio to supporting artillery and aircraft.
The system, which weighs less than 6oz, is so sensitive it can tell the difference between outgoing friendly fire and incoming enemy fire and can distinguish a sniper even in a gun battle.
It also works when the soldier is travelling at up to 50 mph on a vehicle.
The device has already been road tested in Iraq and Afghanistan to claims of great success.
Nov. 24 (Bloomberg) -- The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.
“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
Too Big to Fail
Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.
The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14.
William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said.
‘Credit Risk’
The government committed $29 billion to help engineer the takeover in March of Bear Stearns Cos. by New York-based JPMorgan Chase & Co. and $122.8 billion in addition to TARP allocations to bail out New York-based American International Group Inc., once the world’s largest insurer.
Citigroup received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.
“No question there is some credit risk there,” Poole said.
Congressman Darrell Issa, a California Republican on the Oversight and Government Reform Committee, said risk is lurking in the programs that Poole thinks are safe.
“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?” Issa said. “There’s no transparency to it so who’s to say they’re right?”
The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world’s companies and brought down three of the biggest Wall Street firms.
Markets Down
The Dow Jones Industrial Average through Friday is down 38 percent since the beginning of the year and 43 percent from its peak on Oct. 9, 2007. The S&P 500 fell 45 percent from the beginning of the year through Friday and 49 percent from its peak on Oct. 9, 2007. The Nikkei 225 Index has fallen 46 percent from the beginning of the year through Friday and 57 percent from its most recent peak of 18,261.98 on July 9, 2007. Goldman Sachs Group Inc. is down 78 percent, to $53.31, on Friday from its peak of $247.92 on Oct. 31, 2007, and 75 percent this year.
Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.
Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.
‘They Got Snookered’
The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.
“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”
President Franklin D. Roosevelt’s New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government’s current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office, now called the Government Accountability Office.
‘Worst Crisis’
The 1979 U.S. government bailout of Chrysler consisted of bond guarantees, adjusted for inflation, of $4.2 billion, according to a Heritage Foundation report.
The commitment of public money is appropriate to the peril, said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. and a former economist at the New York Fed. U.S. financial firms have taken writedowns and losses of $666.1 billion since the beginning of 2007, according to Bloomberg data.
“This is the worst capital markets crisis in modern history,” Harris said. “So you have the biggest intervention in modern history.”
Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral.
Collateral is an asset pledged to a lender in the event a loan payment isn’t made.
‘That’s Counterproductive’
“Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,” Bernanke said Nov. 18 to the House Financial Services Committee. “We think that’s counterproductive.”
The Fed should account for the collateral it takes in exchange for loans to banks, said Paul Kasriel, chief economist at Chicago-based Northern Trust Corp. and a former research economist at the Federal Reserve Bank of Chicago.
“There is a lack of transparency here and, given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency,” Kasriel said.
Bernanke’s Fed is responsible for $4.74 trillion of pledges, or 61 percent of the total commitment of $7.76 trillion, based on data compiled by Bloomberg concerning U.S. bailout steps started a year ago.
“Too often the public is focused on the wrong piece of that number, the $700 billion that Congress approved,” said J.D. Foster, a former staff member of the Council of Economic Advisers who is now a senior fellow at the Heritage Foundation in Washington. “The other areas are quite a bit larger.”
Fed Rescue Efforts
The Fed’s rescue attempts began last December with the creation of the Term Auction Facility to allow lending to dealers for collateral. After Bear Stearns’s collapse in March, the central bank started making direct loans to securities firms at the same discount rate it charges commercial banks, which take customer deposits.
In the three years before the crisis, such average weekly borrowing by banks was $48 million, according to the central bank. Last week it was $91.5 billion.
The failure of a second securities firm, Lehman Brothers Holdings Inc., in September, led to the creation of the Commercial Paper Funding Facility and the Money Market Investor Funding Facility, or MMIFF. The two programs, which have pledged $2.3 trillion, are designed to restore calm in the money markets, which deal in certificates of deposit, commercial paper and Treasury bills.
Lehman Failure
“Money markets seized up after Lehman failed,” said Neal Soss, chief economist at Credit Suisse Group in New York and a former aide to Fed chief Paul Volcker. “Lehman failing made a lot of subsequent actions necessary.”
The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC’s $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market, according to Raghu Sundurum and Viral Acharya of New York University and the London Business School.
Congress and the Treasury have ponied up $892 billion in TARP and other funding, or 11.5 percent.
The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $300 billion of mortgages, or about 4 percent of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.
Federal Guarantees
Most of the federal guarantees reduce interest rates on loans to banks and securities firms, which would create a subsidy of at least $6.6 billion annually for the financial industry, according to data compiled by Bloomberg comparing rates charged by the Fed against market interest currently paid by banks.
Not included in the calculation of pledged funds is an FDIC proposal to prevent foreclosures by guaranteeing modifications on $444 billion in mortgages at an expected cost of $24.4 billion to be paid from the TARP, according to FDIC spokesman David Barr. The Treasury Department hasn’t approved the program.
Bernanke and Paulson, former chief executive officer of Goldman Sachs, have also promised as much as $200 billion to shore up nationalized mortgage finance companies Fannie Mae and Freddie Mac, a pledge that hasn’t been allocated to any agency. The FDIC arranged for $139 billion in loan guarantees for General Electric Co.’s finance unit.
Automakers Struggle
The tally doesn’t include money to General Motors Corp., Ford Motor Co. and Chrysler LLC. Obama has said he favors financial assistance to keep them from collapse.
Paulson told the House Financial Services Committee Nov. 18 that the $250 billion already allocated to banks through the TARP is an investment, not an expenditure.
“I think it would be extraordinarily unusual if the government did not get that money back and more,” Paulson said.
In his Nov. 18 testimony, Bernanke told the House Financial Services Committee that the central bank wouldn’t lose money.
“We take collateral, we haircut it, it is a short-term loan, it is very safe, we have never lost a penny in these various lending programs,” he said.
A haircut refers to the practice of lending less money than the collateral’s current market value.
Requiring the Fed to disclose loan recipients might set off panic, said David Tobin, principal of New York-based loan-sale consultants and investment bank Mission Capital Advisors LLC.
‘Mark to Market’
“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”
“Mark to market” means adjusting the value of an asset, such as a mortgage-backed security, to reflect current prices.
Some of the bailout assistance could come from tax breaks in the future. The Treasury Department changed the tax code on Sept. 30 to allow banks to expand the deductions on the losses banks they were buying, according to Robert Willens, a former Lehman Brothers tax and accounting analyst who teaches at Columbia University Business School in New York.
Wells Fargo & Co., which is buying Charlotte, North Carolina-based Wachovia Corp., will be able to deduct $22 billion, Willens said. Adding in other banks, the code change will cost $29 billion, he said.
“The rule is now popularly known among tax lawyers as the ‘Wells Fargo Notice,’” Willens said.
The regulation was changed to make it easier for healthy banks to buy troubled ones, said Treasury Department spokesman Andrew DeSouza.
House Financial Services Committee Chairman Barney Frank said he was angry that banks used the money for acquisitions.
“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the second half of the TARP money.
After more than 15 years of investigation and two trials, the Holy Land Foundation and five of its former organizers were found guilty of illegally funneling more than $12 million to the Palestinian terrorist group Hamas.
The verdicts by a Dallas federal jury are a significant victory for the Justice Department, which streamlined its case after a mistrial last year and worked hard to carefully educate jurors on the complex evidence presented in the massive case.
Guilty verdicts were read on 108 separate charges.
The verdicts are a major triumph for the outgoing administration of President George W. Bush, whose efforts at fighting terrorism financing have been troubled. Two other similar high-profile prosecutions targeting supporters of Palestinian militants have ended in acquittals, deadlocked juries or convictions on lesser charges.
"Today's verdicts are important milestones in America's efforts against financiers of terrorism," Patrick Rowan, assistant attorney general for national security, said in a prepared statement.
"This prosecution demonstrates our resolve to ensure that humanitarian relief efforts are not used as a mechanism to disguise and enable support for terrorist groups."
Peter Margulies, a Roger Williams University law professor who studies terrorism financing cases, said, "The government showed in a streamlined case that where special assistance to the families of terrorists is concerned, cash is the moral equivalent of a car bomb."
The jury also said Holy Land should forfeit $12.4 million because of several money-laundering convictions in the case. Prosecutors said the government probably will end up with about $5 million in Holy Land money frozen by federal authorities in 2001.
Monday's verdicts capped the government's second attempt to convict the men and the now-defunct Richardson-based Holy Land Foundation itself. It took the jury eight days of deliberations to reach its decisions – less than half the time it took jurors to end up with an almost complete mistrial last year.
"It's a sad day," said Mohammed Wafa Yaish, Holy Land's former accountant and a defense witness. "It looks like helping the needy Palestinians is a crime these days."
Defense attorneys declined to comment but are already discussing plans for appeals.
Prosecutor Jim Jacks called his nearly decade-long involvement in the case, gratifying.
"My kids were in junior high when we started this case. They're out of college now," he said. "We had a strong case last year. This year, we refined the case. ... We had the benefit of being able to talk to the jurors after that first trial."
Opening statements at the Earle Cabell Federal Building in downtown Dallas began Sept. 22. Prosecutors used more than 500 pieces of evidence to prove five former charity organizers used Holy Land, once the largest Muslim charity in the U.S., to funnel almost $60 million to the militant group.
Hamas was designated a terrorist organization by the U.S. in 1995, and the trial centered on the $12 million the government said Holy Land and supporters funneled to the group after that date. Prosecutors say Holy Land was formed about the same time as Hamas in the late 1980s and early on was designated as its chief financier in America.
The conspiracy, prosecutors alleged, was overseen by the Muslim Brotherhood, the Egypt-based Islamist group that authorities say is the parent organization of Hamas.
Douglas Farah, a former Washington Post foreign correspondent who is now an author and terrorism expert, said the "trial provides an invaluable forum for publicly showing the true agenda of the international Muslim Brotherhood and its organizations in the United States – the abolition of the United States government as we know it and support for a designated terrorist organization."
Defense attorneys argued that the foundation was a legitimate charity that helped distressed Palestinians under Israeli occupation. They accused the government of bending to Israeli pressure and of relying on evidence predating the 1995 designation.
"The community sentiment ... was that this was a political trial trying to achieve a government policy," said Mohamed Elibiary, president of the Freedom and Justice Foundation, a Muslim group based in Plano.
"Most sense that this isn't over," he said, adding that many in the Muslim community are still offended by the government's list of more than 300 unindicted co-conspirators, which includes Muslim leaders and groups in the U.S.
"That list implicates most of the Muslim community in a wider conspiracy," he said.
The FBI's investigation of Holy Land began in 1993 and the charity was shut down by the government in December 2001. The first trial ended in a hung jury in October 2007.
Terrorism experts say Monday's verdicts demonstrate that complicated terrorism financing cases can be successfully prosecuted in American criminal courts. The verdicts also lend credibility to the Treasury Department's oft-criticized program of designating terrorist entities and freezing assets. The verdict "sends a crystal-clear message that the United States will neither allow itself to serve as a cash cow for terrorist groups nor allow the charitable sector to be abused by groups financing terrorism under the cover of charity," said Matt Levitt, a Hamas expert and former high-ranking government intelligence official who testified in both trials. But critics of the government noted that it took untold millions of taxpayer dollars, 15 years of investigation and two long trials to get guilty verdicts. "Retrials tend to favor the prosecution," said Tom Melsheimer, a former federal prosecutor in Dallas now in private practice. "The government can figure out what worked and what didn't and streamline their presentation of the evidence. The defense, on the other hand, has already shown their cards. "To spend millions of dollars in time and expenses to prosecute people who were of no real threat to anyone, under the banner of a terrorism case, is a waste of precious federal resources," he said. Mark Briskman, regional director of the North Texas office of the Anti-Defamation League in Dallas, said funding terrorism in any form is a big threat to national security. "By funneling millions of dollars to Hamas, this organization and its leaders believed that it could help those who resort to violence to support their cause," he said. "All Americans should thank the Justice Department for their aggressive and tenacious pursuit of this group and its leaders."
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