Could the economic collapse lead to a new kind of warfare?

from Nukes & Spooks

Today, the House Armed Services Committee is holding a hearing entitled Security Challenges Arising from the Global Financial Crisis. I realize this sounds like a lot of jargon but I found the topic and Chairman Ike Skelton's opening statement fascinating. The hearing is basically trying to tackle how the world economic collapse could affect U.S. national security, but not in the way we have come to think of that threat in the past few years.

I have spent the last six years reporting on the national security threat from rogue elements, usually operating in unstable states. My pieces focus on insurgencies and asymmetric warfare. Indeed, when the U.S. military talks about preparing for the future, it talks about counterinsurgencies and the need to stop groups from rising and plotting attacks against the United States, not wars fought along proper battle lines. But the hearing raises the question: What threat could proper states now pose to the United States because of the economic crisis?

My editor, Roy, interestingly pointed out to me that tough economic times can lead to the rise of extreme nationalistic leaders. That kind of ideology can often lead to war on its own. After all, the argument goes, our country, economy and way of life is superior. Therefore the military will prevail. A weak economy can further fuel the march toward war. As Skelton is his opening statement: “Hyper inflation in Germany was a significant factor in the rise of Hitler. The economic decay of the Soviet Union led to regime change across Eastern Europe So we know that economic crises can have consequences for national security of the highest order.” Roy added that Slobodan Milosevic's rise to power in Yugoslavia, at a time Communism had run out of steam, and the economic prospects were sinking, was on a wave of extreme nationalism, which led almost directly to war.

Could Pakistan’s collapsing economy lead to a new government, one that whose interests strongly diverge from U.S. interests? Could the rapid drop in oil lead Hugo Chavez to start a war of some kind to jump start his economy, perhaps with a U.S. ally? Could Egypt’s economic strain lead to the rise of a government other than the U.S. friendly regime of Hosni Mubarak?

Could the United States or a key ally once again find itself fighting a traditional army because of this economic crisis?

I realize these issues seem years in the future. After all, new nationalist leaders usually don’t rise overnight. But this economic crisis could last long enough for that to happen. And that means, the U.S. military may have to start preparing for that kind of war now.

Pakistan proposes integration of Taliban into security forces

(Compiler's note: This reasoning defies any logic that I recognize.)

By Bill Roggio

A senior official in Pakistan's Northwest Frontier Province wants the Taliban to integrate into the security forces in the region where the governemnt ceded to the Taliban's demands to implement sharia, or Islamic Law, and end military operations. The official also described the Swat Taliban leader as "good human being."

Syed Muhammad Javed, the Malakand Division Commissioner, has proposed the Taliban provide recruits for the police and the paramilitary Levies force. The Malakand Division is made up of the districts of Malakand, Swat, Shangla, Buner, Dir, and Chitral.

"I have proposed the Taliban be adjusted in police or Levies force and have suggested this at several forums," Javed told Daily Times. He claimed the police force's "confidence is shaken" due to a Taliban campaign of assassination and intimidation.

The police have been hit so hard that the force has been rendered ineffective. The governemnt claimed 70 policemen, an estimated five percent of the force, have been killed since the fighting in Swat broke out in July 2007. More than 800 policemen, more than half of the force, have deserted their posts or taken extended leaves to avoid the Taliban attacks. Another 142 troops from the paramilitary Frontier Corps have been reported killed since August 2008.

During the fighting between the Swat Taliban and government forces, the Swat Taliban targeted police officers, tribal leaders, and politicians. Family members of government officials and tribal leaders were killed, and their homes were torched.

The military ceased operations in Swat in February 2009 after it failed to dislodge the Taliban. Sufi Mohammed, the father-in-law of Swat Taliban commander Mullah Fazlullah, brokered a peace agreement between the government and the Taliban. Under the agreement, the government has committed to implement sharia, end the military campaign, and release Taliban prisoners, while the Taliban agreed to end attacks. But the Taliban have violated the agreement several times when it kidnapped the district coordinating officer and his bodyguards, murdered two soldiers, and captured a Frontier Corps officer and several of his men.

Javed and the military have refused to respond to the Taliban infractions. Javeed even went out of his way to praise Mullah Fazlullah. He described Fazlullah as a "good human being," Daily Times reported.

Javed's proposal to integrate the Taliban into the security forces comes as the US Congress is debating a $20 billion aid package to Pakistan. Senators John Kerry and Richard Lugar have proposed giving Pakistan a one-time $5 billion grant plus a 10 year aid package worth $15 billion. Some of this money is slated to improve the security forces in Paksitan's Northwest Frontier Province and the Taliban-controlled tribal agencies.

But Pakistan's history of appropriately spending US aid money is appalling. More than $3.8 billion of an estimated $5 billion of military aid given to Pakistan up until December 2007 is unaccounted for, and it has been reported that millions of dollars in US aid has gone to pay reparations to the Taliban in Swat.

Chief justice publicly accepts WND's eligibility petition

(Compiler's note: This is a must read for sure. Get ready -- this is not going away until proved one way or the other. Also please read the embedded URLs in this article.)

By Drew Zahn

U.S. Chief Justice John Roberts

A California attorney lobbying the U.S. Supreme Court for a review of Barack Obama's qualifications to be president confronted the chief justice yesterday with legal briefs and a WND petition bearing names of over 325,000 people asking the court to rule on whether or not the sitting president fulfills the Constitution's "natural-born citizen" clause.

According to Orly Taitz, the attorney who confronted Chief Justice John Roberts at a lecture at the University of Idaho, the judge promised before the gathered crowd that he would, indeed, read and review the briefs and petition.

"I addressed him in front of 800 people in the audience," Taitz told WND, "including university officials, the president of the Idaho State Bar and the chief justice of the Supreme Court of Idaho, and in front of all them, [Roberts] promised to read my papers."

Roberts was lecturing on Abraham Lincoln to approximately 1,200 attendees of the annual Bellwood Memorial

Lecture Series at the Moscow, Idaho, university. Roberts has been chief justice of the Supreme Court since his nomination by President George W. Bush and subsequent confirmation in 2005.

Earlier in the week, Taitz confronted Supreme Court Justice Antonin Scalia, who told her the issue of Obama's eligibility, which has been raised before the Supreme Court at least four times but has yet to be given a single hearing, still lacked the votes of the required four justices in conference before it would be officially heard.

Taitz said, "I told Scalia that I was an attorney that filed Lightfoot v. Bowen that Chief Justice Roberts distributed for conference on Jan. 23 and now I represent nine state reps and 120 military officers, many of them high ranked, and I want to know if they will hear Quo Warranto and if they would hear it on original jurisdiction, if I bring Hawaii as an additional defendant to unseal the records and ascertain Obama's legitimacy for presidency."

The legal phrase Quo Warranto essentially means an explanation is being demanded for what authority Obama is using to act as president. An online constitutional resource says Quo Warranto "affords the only judicial remedy for violations of the Constitution by public officials and agents."

Where's the proof Barack Obama was born in the U.S. or that he fulfills the "natural-born American" clause in the Constitution? If you still want to see it, join more than 325,000 others and sign up now!

"Tell me what to do, what can I do?" Taitz reports asking Scalia. "Those soldiers [her plaintiffs] can be court-martialed for asking a legitimate question, who is the president, is he legitimate?"

She says Scalia responded, "Bring the case, I'll hear it, I don't know about others."

In Idaho, Taitz obtained the promise of one of the others, the chief justice, that he would read through the eligibility challenge, including the petition brought by WND readers.

As WND reported, Taitz is submitting a motion to the Supreme Court for re-hearing of Lightfoot v. Bowen, a case she is working on through her foundation Defend Our Freedoms, alleging some of her documentation may have been withheld from the justices by a court clerk.

Orly Taitz

She asserts docketing information about her case "was erased from the docket of the Supreme Court on January 21st, one day after the inauguration and two days before [the case was to be heard]."

At the lecture in Idaho, Taitz grabbed the attention of Justice Roberts by boldly addressing her allegation that a clerk had buried the case.

Taitz told WND that the forum rules required that those questioning Roberts announce their relationship to the University of Idaho and refrain from talking about cases currently before or likely to appear before the court.

"I said, 'Justice Roberts, my name is Orly Taitz. I'm an attorney from California, and I got up at 3 o'clock in the middle of the night, flew and drove thousands of miles just to ask you a question. So please give me some leeway,'" Taitz told WND. "My question is, do you know there is illegal activity going on in the Supreme Court of the United States?"

According to Taitz, the room was stunned silent as she continued, "I have presented my case to you, and you personally agreed to hear this case in conference. But your clerk refused to forward a supplemental brief to you. He has hidden this brief from you. He refused to put it on the docket. Additionally, my case was erased from the docket one day after the Inauguration, two days before my case was to be heard.

"Outraged citizens and members of the media and state representatives are calling the Supreme Court, demanding to have the case reentered on the docket," Taitz told Roberts.

Then she held up the WND petition and continued, "Moreover, here are the names of U.S. citizens who signed this petition and who sent individual letters to individual justices, including you, Justice Roberts, all of them demanding the same thing – that you hear my case in regards to Barack Hussein Obama's eligibility for presidency."

According to Taitz, Roberts approached the microphone and said, "I see you have papers. I promise you I will read all your papers, I will review them. Please give them to my Secret Service and I will review all of them."

Shortly thereafter, Taitz told WND, a Secret Service agent identified by his badge as Gilbert Shaw accepted two suitcases of documents and pledged to deliver them to Roberts....

Click here for additional information.

Why are there still questions about qualifications?

(Compiler's note: This is a must read subject that simply must be understood by the American citizens.)

Arguments of president's defenders never actually addressed eligibility

By Bob Unruh

In the last few months, dozens of U.S. courts have dismissed legal challenges to Barack Obama's constitutional eligibility to occupy the Oval Office, and even the U.S. Supreme Court has refused to hold a hearing on the evidence – but what have the courts actually cited as reasons for dismissing the concerns of millions of Americans?

Mootness, lack of jurisdiction, lack of responsibility, lack of standing, a series of "no comments" and even the fact the issue has been "twittered."

The one subject that has been avoided to date has been whether or not the president is, in fact, eligible.

So far, there have been two definitive statements on the issue that have been made public, including one from an Obama campaign spokeswoman talking about the challenges who told WND, "All I can tell you is that it is just pure garbage."

The other is from Chiyome Fukino, the director of the Hawaiian Department of Health, who issued a statement, "I as Director of Health for the State of Hawaii, along with the Registrar of Vital Statistics who has statutory authority to oversee and maintain these type of vital records, have personally seen and verified that the Hawaii State Department of Health

has Sen. Obama’s original birth certificate on record in accordance with state policies and procedures."

As with the court opinions, what is not said is significant. While the certificate on file is "in accordance with state policies and procedures," there's no affirmation that the document reflects a Hawaiian birth.

Nor is there any explanation for the image of the Hawaii state "certification of live birth" that has been posted by Obama on the Internet, purporting to document his Hawaiian birth, even though Hawaiian procedures at the time allowed that document to be issued to parents of children not born in the state.

For example, why would an individual with a verified birth certificate also have a "certification of live birth?"

The questions raised over Obama's eligibility are all very simple: The Constitution, Article 2, Section 1, states, "No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President."

But getting the issue discussed has been a huge obstacle, and what courts have done several times, including once in a California

case, is to schedule hearings on the issue on a date far beyond any reasonable expectation of having applicability, lawyers

have said. For example, a challenge to the Electoral College vote for Obama, raised early in November, still hasn't had a court hearing.

The ramifications

The impact of an ineligible president isn't complicated either. If ineligible, critics argue that the constitutional provision acknowledging that possibility, and assigning the vice president to fill in until the president is eligible, applies.

In Amendment 20, Section 3, the Constitution says Congress must fully qualify the candidate "elected" by the Electoral College Electors, and that "If the president-elect shall have failed to qualify, then the vice president elect shall act as president until a president shall have qualified."

"Here's the bottom line," writes WND columnist Janet Porter of Faith2Action. "Either the Constitution matters or it doesn't. And if we're willing to ignore the constitutional requirements for the highest office in the land, what else are we willing to forgo? That part about free speech? Freedom of the press? Freedom of religion? If we are willing to shred one part of the Constitution, brace yourself to lose the rest."

According to a lawsuit filed by Gary Kreep of the United States Justice Foundation on behalf of presidential candidate Ambassador Alan Keyes, an ineligible Obama would mean "then no act that he takes is, arguably, valid, the laws that he signs would not be valid, the protective orders that he signs would be null and void, and every act that he takes would be subject to legal challenge, both in Courts of the United States of America, and in International Courts."

The result? No legally binding stimulus bill, presidential appointments in doubt, federal budgets in limbo and the closure of Gitmo? Probably have to reopen it.

The birth location arguments

Obama reported in his autobiography that he was born in Honolulu, and the online "Certification of Live Birth" states that.

But when WND Senior Staff Reporter Dr. Jerome Corsi went there, he was told any Obama records were sealed, and although they would be released if the person made the request, Obama simply has refused to do that.

Corsi also was told records pertaining to Obama in Kenya likewise were sealed.

There also have been no confirmed hospital records uncovered that would document his birth, and an investigator even cast doubt on whether the Obama family lived at the address listed in the newspaper announcements.

A woman who reportedly "remembered" Obama's birth and was quoted widely in support of his Hawaiian birth later explained to WND she had been told of the birth of a baby boy by an acquaintance who was a doctor who noted the mother's unusual name of Stanley, but she had no knowledge of the details.

Citizenship from parents?

According to much legal research, at the time of Obama's birth he could be a natural born citizen by being born in the United States, by being born to two U.S. citizen parents (not possible because of his father), or, if only one parent was a U.S. citizen at the time of the birth, that parent must have resided in the United States for at least 10 years, at least five of which had to be after the age of 16.

The problem is, Obama's mother was only 18 when she gave birth, so his only apparent route to "natural born" citizenship status would have been to be born in Hawaii.

But there are other questions, too. Even if Obama was born in the state, would he have inherited citizenship from his Kenyan father or his American mother, a juvenile?

If he was born overseas as some critics contend, is there any way he would have acquired U.S. citizenship at birth? After all, statements from members of his extended family in Kenya, including some from his paternal grandmother, seem to indicate his birth location was in Kenya, not Hawaii.

The Indonesian question

At the time Obama moved to Indonesia as a child, only citizens of that country were allowed to attend school there. He was registered there as Barry Soetoro, his citizenship was listed as Indonesian and his religion as Islam. Porter reports there was no dual citizenship with Indonesia at the time.

The obvious question is what happened to Obama-Soetoro's citizenship during that time, did he retain an American citizenship, or not?

"If he was adopted by his Indonesian stepfather, he would have forfeited any U.S. citizenship he may have had, just as when a child is adopted in America, he or she becomes an American," Porter wrote.

Pakistan

Also, Porter reports it is likely that Obama traveled to Pakistan in 1981 on a passport other than a U.S. document, raising the question of the status of his citizenship at that point. Could one obtain another nation's passport while being an American citizen?

The 'Certification of Live Birth'

The Obama campaign posted the COLB image online, reportedly to dispel rumors that his middle name was Mohammad. But several bloggers who analyzed the image said it appeared to have been modified from the official state version, raising questions at to its authenticity.

Staff members at FactCheck claim to have examined the original "birth certificate," and found it to be genuine. But that doesn't include an explanation for the "Certification of Live Birth," a different document, nor an explanation for whether they really were looking at the "birth certificate," which the state of Hawaii maintains hasn't been released.

FactCheck.org also is part of the Annenberg Public Policy Center and linked to the Annenberg organization with whom Obama worked.

One of the lawsuits challenging Obama notes that when Republican Sen. John McCain's eligibility was questioned because of his birth to two U.S. citizens while his father was on active military duty in the Panama Canal Zone, he produced the documentation of his birth for examination.

Congress even held hearings and adopted a resolution referencing and resolving the questions. However, with Obama, there has been no documentation released and no hearings.

The biggest question

Mario Apuzzo, the attorney handling one of the cases challenging Obama's eligibility, told WND the biggest question is why Obama hasn't simply ordered a copy of the original birth certificate to be made available and dispel all the rumors.

Kreep noted that in Obama's book, he wrote of finding his birth certificate in a book, so he wouldn't even have to authorize the state to release it; just provide the original for inspection.

Several of the lawyers involved in the cases said they believe the information eventually will come out, because interest is growing. Kreep said he googled his own name with Obama's, and came up with 944,000 references. Linking Obama's to Keyes' name came up with nine million..

Until then, the challenges will continue.

"When Obama starts signing executive orders and legislation," said Kreep, "I'll be filing lawsuits unless and until he proves he's an American citizen."

Several state lawmakers also are working on new requirements for candidates to provide documentation before they would be on the ballots.

California lawyer Orly Taitz, whose work is on her Defend Our Freedoms Foundation website, said there are just too many unanswered questions.

:"The Certification of Live Birth does not name a hospital, name a doctor, have any signatures or a seal of the Hawaiian Health Department on the front of the document. This document is usually given to parties that don't have a proper hospital birth certificate and it is given based on a statement of one relative only. Even the state of Hawaii doesn't give full credit to these documents," she said.

Among the claims being raised in the various lawsuits: That Congress didn't properly determine whether Obama is qualified, that active and retired members of the military have a need to know his qualifications to be commander-in-chief, that state officials failed to properly qualify Obama as a candidate (California previously had removed ineligible candidates from the ballot), and his college records should be released to reveal whether he attended school as a U.S. citizen.

Russia weighs Cuba, Venezuela bases: report

Russia could use bases for its strategic bombers on the doorstep of the United States in Cuba and Venezuela to underpin long-distance patrols in the region, a senior air force officer said Saturday.

"This is possible in Cuba," General Anatoly Zhikharev, chief of the Russian air force's strategic aviation staff, told the Interfax-AVN military news agency.

The comments were the latest signal that Moscow intends to project its military capability in far-flung corners of the globe despite a tight defence budget and hardware that experts consider in many respects outdated. ....

All-Female Marine Team Conducts First Mission in Southern Afghanistan

By Marine Corps Lance Cpl. Monty Burton
Special to American Forces Press Service

FARAH PROVINCE, Afghanistan, March 10, 2009 – Marines of the 3rd Battalion, 8th Marine Regiment -- the ground combat element of Special Purpose Marine Air Ground Task Force Afghanistan -- now have a special group of people to help them complete their mission in Afghanistan.

Marine Corps 2nd Lt. Johanna Shaffer shares a cookie and a smile with an Afghan child while under the watchful security of Marines assigned to 3rd Battalion, 8th Marine Regiment, during her all-female team's first mission in Farah province, Feb. 9, 2009. U.S. Marine Corps photo by Lance Cpl. Monty Burton (Click photo for screen-resolution image);high-resolution image available.

The task force’s all-female Marine team is interacting with the Afghan female population in southern Afghanistan -- a task considered culturally unacceptable for the male Marines operating there.

A similar program has been used in combat operations in Iraq, but this is the first time Marine forces in Afghanistan have employed the concept, officials said.

Marine Corps Capt. Mike Hoffman, commanding officer of 3/8’s Company I, said the all-female team is an important asset for his Marines.

“[The team] provides us access to half of the population that we normally do not have access to,” Hoffman said. “They did extremely well interacting with the female villagers.”

Marine Corps 2nd Lt. Johanna Shaffer, the team leader, said their first mission, a cordon-and-search operation in support of Operation Pathfinder, was very successful.

“We were accepted by both the men and women villagers and were able to obtain valuable information about the way they lived and what they thought about the Marine Corps operating in the area,” Shaffer said.

During the mission, the female Marines donned brightly colored head and neck scarves as a sign of cultural respect to the Afghan women.

“The scarves showed the Afghan women that we were women too, and we respect their culture,” Shaffer said. “They automatically felt more comfortable with us. They showed us their homes, and even though they didn’t have much, they were still very generous to us. They accepted us as sisters, and we’re glad that we were here to help them.”

Although Afghan women tend to be more reserved than Afghan men, they still have a large influence on their children, Shaffer said, so engaging with them is important.

“If the women know we are here to help them, they will likely pass that on to their children,” she said. “If the children have a positive perspective of alliance forces, they will be less likely to join insurgent groups or participate in insurgent activities.”

Hoffman said the female Marines also were accepted by the village men.

“They were not opposed by the villagers,” Hoffman said. “They had no problem allowing [the team] the chance to interact with their women.”

The concept employed by her team varies greatly from the program in Iraq because of differences in Afghan culture, Shaffer said.

“The cultural background here is completely different than that of Iraq,” Shaffer said. “Women here are more timid than in Iraq. There is less of a chance that an Afghan women would try to harm us, because they understand that we are here to help them.

“We also do not know much about the daily life of Afghan women,” she continued. “This provides us not only the opportunity to learn about the women, but also to build and maintain faith and trust of the Afghan women.”

(Marine Corps Lance Cpl. Monty Burton serves with Special Purpose Marine Air Ground Task Force Afghanistan.)

Obama abandons term 'enemy combatant'

By NEDRA PICKLER

WASHINGTON (AP) - The Obama administration is abandoning one of President George W. Bush's key phrases in the war on terrorism: enemy combatant

In court filings Friday, the Justice Department said it will no longer use the term to justify holding prisoners at Guantanamo Bay.

Obama still asserts the military's authority to hold prisoners at Guantanamo Bay. But he says that authority comes from Congress and the international laws of war, not from the president's own wartime power.

Bush had argued that the president as commander in chief could unilaterally hold prisoners without charge.

The Justice Department says prisoners can only be detained if their support for al-Qaida or the Taliban was "substantial."

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP)—The Obama administration is trying to protect top Bush administration military officials from lawsuits brought by prisoners who say they were tortured while being held at Guantanamo Bay.

The Justice Department argued in a filing Thursday with the U.S. Circuit Court of Appeals for the District of Columbia that holding military officials liable for their treatment of prisoners could cause them to make future decisions based on fear of litigation rather than appropriate military policy.

The Obama administration was expected to take another stand affecting Guantanamo detainees' lawsuits Friday. A federal judge overseeing lawsuits of detainees challenging their detention has given the Justice Department until the close of business to give its definition of whom the United States may hold as an "enemy combatant."

Obama has pledged to close the Guantanamo Bay detention facility within a year, and Justice Department lawyers are already trying to find courtrooms or foreign countries to place the 240 people still held there.

The new administration is seeking to craft new rules for when and how a terror suspect can be seized, and what interrogation methods may be used in trying to extract information from them. But while it works on those rules, the Obama administration appears to be sticking with Bush administration legal definitions in pending litigation.

Last month in another court filing, the Justice Department sided with the Bush White House by arguing that detainees at Bagram Airfield in Afghanistan have no constitutional rights.

"The president has ordered a comprehensive review of both the government's overall policy for detainees and the status of detainees held at Guantanamo," Justice Department spokesman Matthew Miller said. "The Guantanamo detention facility will be closed by January 22, 2010, but in the meantime, we will continue to litigate cases involving detainees."

The suit before the appeals court was brought by four British citizens—Shafiq Rasul, Asif Iqbal, Rhuhel Ahmed and Jamal Al-Harith—who were sent back to Great Britain in 2004. The defendants in the case include former Secretary of Defense Donald Rumsfeld and retired Gen. Richard Myers, former chairman of the Joint Chiefs of Staff.

Eric Lewis, attorney for the four, said Friday that military officials should be subject to liability when they order torture.

"The upshot of the Justice Department's position is that there is no right of detainees not to be tortured and that officials who order torture should be protected," Lewis said.

The men say they were beaten, shackled in painful stress positions and threatened by dogs during their time at the U.S. naval base in Cuba. They also say they were harassed while practicing their religion, including forced shaving of their beards, banning or interrupting their prayers, denying them copies of the Koran and prayer mats and throwing a copy of the Koran in a toilet.

They contend in their lawsuit that the treatment violated the Religious Freedom Restoration Act, which provides that the "government shall not substantially burden a person's exercise of religion."

The appeals court ruled against them early last year, saying because the men were foreigners held outside the United States, they do not fall within the definition of a "person" protected by the act.

But later in the year, the Supreme Court ruled that Guantanamo detainees have some rights under the Constitution. So the Supreme Court instructed the appeals court to reconsider the lawsuit in light of their decision.

Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance.

WASHINGTON (CNN) -- Veterans Affairs Secretary Eric Shinseki confirmed Tuesday that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance. ....

U.S. Arranging to Send Prisoners to Saudi Arabia

By JAY SOLOMON

WASHINGTON -- Some of the roughly 100 Yemenis held at Guantanamo Bay would go to Saudi Arabia under a plan being discussed by U.S. and Saudi officials, said people briefed on the talks.

Yemenis make up the largest national grouping among the roughly 250 inmates still at the U.S. prison in Guantanamo. U.S. officials believe addressing their fate is urgent if President Barack Obama is to make good on his commitment to close the prison by January 2010.

U.S. officials say about 15 of the Yemenis have been cleared for transfer to Yemen, and another 15 are likely to face some kind of U.S. trial.

The remainder pose a quandary: The U.S. no longer wants to hold them, but it fears that Yemen's government lacks the means to rehabilitate the men, many of whom officials say pose a threat to the U.S. And American officials question whether Yemen has sufficient law-enforcement muscle to keep tabs on returnees.

Ali Abdullah Saleh

U.S. and Arab officials said Saudi authorities have developed a program for Islamist extremists that is largely viewed as a success by U.S. and European counterterrorism officials. The program includes vocational training, family reunification and religious tutoring.

Yemen's government has indicated it will contest any American efforts to transfer Yemeni nationals to Saudi Arabia. The detainee question is a political issue for Yemeni President Ali Abdullah Saleh. Yemeni officials says they're developing their own rehabilitation program that includes religious and vocational training, but would require U.S. financial assistance.

"We refused the offer to release the Yemenis to Saudi Arabia for rehabilitation, and we told them we would establish our own center for rehabilitating them and helping to rid the country of extremism and violence," Mr. Saleh told a conference of Yemeni police commanders in late January, according to Yemen's state media.

A State Department spokesman declined to specifically address the Yemeni issue but said the U.S. "has been in contact with dozens of countries about resettling those detainees at Guantanamo Bay eligible for transfer or release." Saudi officials didn't reply to requests seeking comment.

An Arab official briefed on the discussions said the U.S. is examining whether it can in the near term transfer to Saudi custody around 20 Yemenis with direct family connections to Saudi Arabia.

Yemen and Saudi Arabia share a border and some of the same tribal families. Al Qaeda chief Osama bin Laden is a Saudi national, but his family's ancestral home is in Yemen.

"It seems like the Saudis are willing to rehabilitate them," said the Arab official, noting Riyadh is concerned about the threat posed to Saudi Arabia by Yemen's security situation.

U.S. officials say Saudi Arabia's rehabilitation program isn't fail-safe. Last month, two Saudi nationals who were released from Guantanamo and passed through the program appeared in a video as senior members of al Qaeda's Yemen operations.

U.S. counterterrorism officials worry that Yemen is becoming a bigger base of operations for al Qaeda. In September, a six-member suicide squad attacked the U.S. Embassy in the Yemeni capital of San'a, killing 13 people.

U.S. officials complain about Yemen's lax detention facilities. Twenty-three Yemeni men, some suspected of involvement in the 2000 bombing of the USS Cole, escaped from prison in 2006, according to U.S. officials. Another suspect, Jamal al-Badawi, also escaped but was put back into custody last fall under U.S. pressure.

Two Yemenis, Ramzi Binalshibh and Wali bin Attash, face prosecution by the U.S. for alleged roles in the Sept. 11, 2001, terrorist attacks.

Secretary of State Hillary Clinton told reporters this month she is gauging European interest in resettling Guantanamo detainees. "I think we have been quite encouraged at the positive, receptive responses we've been getting," she said.

U.S. Jet Shoots Down Iranian Drone Over Iraq (Updated)

By Noah Shachtman

An American fighter jet shot down an Iranian drone as it was flying over Iraq, U.S. military sources in Baghdad tell Danger Room.

Details of the previously-unreported shoot-down, which occurred last month, are still sketchy. But we do know that American commanders have long accused Tehran of supplying weapons and training to all sorts of Iraqi militant groups. Shi'ite militias fired Iranian rockets at U.S. troops in Iraq, according to the American military; Sunni militias allegedly used Iranian armor-piercing bombs to reduce U.S. vehicles to ribbons.

In early 2008, however, the torrent of Iranian weapons into Iraq slowed to a trickle, the U.S. said. And now, the new Obama administration is looking for ways to reach out to the Tehran regime -- dangling invitations to international conferences, and offering promises of renewed relations.

Which means the drone incident comes at a particularly sensitive time.

Iran has built an array of unmanned aerial vehicles, or UAVs. The pneumatically launched Ababil ("Swallow") has a wingspan of more than 10 feet, and cruises at 160 knots, according to Globalsecurity.org. The Mohajer or Misrad ("Migrant") drone is a bit smaller, and slower-flying.

Iran has supplied Hezbollah, the Lebanese terror group, with both models. Misrad drones flew reconnaissance missions in both November 2004 and April 2005. Then, in 2006, during Hezbollah's war with Israel, the group operated both Misrads and Ababils over Israel's skies. At least one was shot down by Israeli fighter jets.

Since then, Tehran claims to have radically upgraded its unmanned fleet. In 2007, Iran said it built a drone with a range of 420 miles. In February, Iran's deputy defense minister claimed its latest UAV could now fly as far as 600 miles -- a huge improvement over crude drones like the Misrad, if true. Iran often exaggerates what its weapons can do. But, if this drone really can stay in the air for for that long, the Washington Times notes, "it could soar over every U.S. military installation, diplomatic mission or country of interest in the Middle East." Including those in Iraq.

UPDATE: So I finally got a hold of a spokesman for Multi-National Corps - Iraq. His response: "I believe MNF-I [Multi-National Forces - Iraq -- Corps' bosses, basically] is taking the lead on this incident." So then I reached out to MNF-I. A spokesman there wouldn't confirm the shoot-down. Nor would he deny it. "We've got nothing for you, Noah," the spokesman said.

Obama reverses opposition to Mexican trucks

By Jerome R. Corsi

One day after signing the $410 billion omnibus funding bill into law, along with provisions ending the Department of Transportation's Mexican truck demonstration project, the Obama administration has announced intentions to restart the program as soon as possible.

Debbie Mesloh, a spokeswoman for the Office of the U.S. Trade Representative, told the Associated Press Obama has asked the office to work with Congress, the DOT, the State Department and Mexican officials to come up with legislation to create "a new trucking

project that will meet the legitimate concerns" of Congress and the U.S. under the North American Free Trade Agreement, or NAFTA.

The Obama administration's determination to see Mexican long-haul rigs roll throughout the U.S. is a setback for labor unions, including the Teamsters, who supported Obama in the 2008 presidential election, in part on his promise to renegotiate NAFTA to preserve U.S. jobs.

The sharp policy reversal will also be a blow to many Democrats in Congress, including Sen. Byron Dorgan, D-N.D., and Rep. Peter DeFazio, D-Ore., who fought hard for the past two years to stop the project out of concerns that Mexican trucks do not conform with U.S. safety regulations.

After Tuesday's vote in the Senate to pass the funding bill with language ending the truck project, the Mexican government put immediate pressure on the Obama administration to reinstate approval for Mexican trucks to operate throughout the U.S.

"Mexico

still believes that the United States' noncompliance on this issue, more than 14 years overdue, is a violation of the North American Free Trade Agreement," Mexican Embassy spokesman Ricardo Alday told the AP.

Alday insisted Mexico is willing to work with Congress and the U.S. "in finding a solution that honors its international obligation."

The Mexican truck issue became rancorous over the past two years as Bush administration Secretary of Transportation Mary Peters fought off repeated efforts by Congress to confine Mexican trucks to a narrow 20-mile-wide commercial area north of the southern border.

WND reported that after the truck project began, an examination of the Federal Motor Carrier Safety Administration database

revealed hundreds of safety violations by Mexican long-haul rigs on U.S. roads.

The contention of opponents has been that Mexican trucks and truck drivers do not reliably meet U.S. standards.

As WND reported, in a contentious Senate hearing last March, Dorgan got Peters to admit that Mexican drivers were being designated at the border as "proficient in English" even though they could explain U.S. traffic signs only in Spanish.

In the tense hearing, Dorgan accused Peters of being "arrogant" and in reckless disregard of a congressional vote to stop the truck project by taking funds away.

As WND reported, opposition in the House was led by DeFazio, who in September 2007 accused the Bush administration of having a "stealth plan" to allow Mexican long-haul rigs on U.S. roads.

"This administration [of President George W. Bush] is hell-bent on opening our borders," DeFazio then said, "but has failed to require that Mexican drivers and trucks meet the same safety and security standards as U.S. drivers and trucks."

Previously, Peters had argued the wording of the Dorgan amendment did not prohibit the Transportation Department from stopping a Mexican truck project already under way, even if the measure prohibited DOT from starting any new project.

Despite strong congressional opposition, the Department of Transportation under President Bush had announced it planned in its final months to extend the truck project for another two years – an attempt to force the incoming Obama administration to comply.

Obama backtracking on NAFTA promises?

The administration's determination to open the U.S. to Mexican trucks raises questions about whether Obama intends to fulfill campaign promises to renegotiate NAFTA to get provisions more favorable to American workers and jobs.

During the presidential campaign, top Obama economic adviser Austan Goolsbee, an economics professor at the University of Chicago business school, stirred controversy after reporters learned he traveled to Canada to reassure Canadians that Obama's harsh words about NAFTA were just campaign rhetoric.

In the Ohio and Pennsylvania Democratic Party primaries, Obama pledged to renegotiate NAFTA as part of his appeal to workers in the states that have lost manufacturing jobs under the free trade agreements negotiated by Presidents Clinton and George W. Bush.

Now, Goolsbee has joined the Obama administration, having taken a leave of absence from the University of Chicago after Obama appointed him chief economist and staff director of the newly created Presidential Economic Recovery Advisory Board, chaired by former Federal Reserve Chairman Paul Volker.

Obama also appointed Goolsbee to the Council of Economic Advisors, or CEA, which is charged with assisting in the development of White House economic policy.

In his first trip to a foreign nation, Obama traveled to Canada, where he used a press conference with Canadian Prime Minister Stephen Harper to backtrack on his promise to renegotiate NAFTA.

The London Guardian reported Obama's comments in Canada "muddied his position" on NAFTA.

Obama responded to a question at the joint press conference with Harper saying, "Now is a time where we have to be very careful about any signs of protectionism."

Translated, this meant that any renegotiation of NAFTA by the Obama administration might involve fine-tuning some of the side agreements, not renegotiating NAFTA itself in any fundamental way.

Then there was the issue of the "Buy American" provision inserted into the administration's $787 billion economic stimulus plan.

Canada was concerned that the provision could hurt Canadian steel exports to the U.S., and the EU complained the provision was antithetical to the spirit of the Transatlantic Economic Council, which President Bush signed with the EU last April.

The Obama administration did not object when language was added to the economic stimulus bill to specify that the "Buy American" provision would be interpreted as buying American products if it was consistent with U.S. international trade obligations. That meant any free trade agreement would override the obligation.

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Previous stories:

Congress halts Mexican trucks in U.S.

Bush team extends Mexican truck test

Mexican truck drivers take English exam in Spanish

Senator thrashes Bush's Mexican truck hat dance

Heads to roll? Mexican trucks in U.S. sparks firing call

Mexican trucks defy Congress, still roll

Congress cuts funding for Mexican trucks

Mexican trucks roll on despite opposition

Bush officials team with Mexico to defend trucks

Satellite tracking mandated for Mexican trucks

Senate votes to kill Mexican truck demo

Senator moves to block Mexican trucks

NAFTA Superhighway plans advance south

1st Mexican truck rolls across border under cover of darkness

Mexican trucks approved for long-haul trips in U.S.

Mexican rigs hitting U.S. pavement today

Snow not buying Hoffa's 'disaster' description

Hoffa: Mexican trucks are disaster for U.S.

San Antonio developing NAFTA inland port

Jailed border agents case tied to Mexican trucks

Mexican rigs ready to roll

114 congressmen: Why is DOT ignoring law?

White House presses Senate to allow Mexican trucks

Truckers demand feds come clean on Mexican rigs

Mexico announces date for trucks to roll in U.S.

Feds stonewall on Mexican trucks

Now U.S. trucks to cruise Mexico

Teamsters sue to halt Mexican truckers

Truckers with criminal record could access U.S.

Mexican trucks to enter U.S. in 15 seconds

Angry truckers to encircle D.C. with 'blockade'

Mexican truck stampede to hit U.S.!

Congressman moves to block Mexican trucks

Roadblocks for Mexican trucks in U.S.

It's official: Mexican trucks coming

Mexican truckers to hit U.S. roadways next year

NAFTA superhighway to mean Mexican drivers, say Teamsters

More evidence Mexican trucks coming to U.S.

Docs reveal plan for Mexican trucks in U.S.

Freddie to seek another $30.8 billion

byAlan Zibel

Freddie Mac, facing mounting damage from the U.S. housing crisis, said Wednesday it will ask the government for nearly $31 billion in additional aid after posting a gargantuan loss of more than $50 billion last year.

The report comes just weeks after Fannie Mae said it would need more than $15 billion in government assistance after losing almost $60 billion last year.

The two companies, which were seized by the government last fall, are critical to the health of the U.S. real estate market. Together, Fannie and Freddie own or guarantee more than half of all U.S. home loans.

The Treasury Department has pledged up to $400 billion in aid for the duo. But as losses mount, many analysts see the companies remaining under government control, perhaps indefinitely. Until officials know the final bill for the housing crisis, it will be tough to figure out whether they can be spun off as private companies, said debt analyst Jim Vogel of FTN Financial in Memphis, Tenn.

"No one's going to be confident yet to either plan or look forward until they see another two quarters," he said.

Meanwhile, Freddie Mac's chief executive, David Moffett, is stepping down this week after six months on the job.

"We absorbed heavy financial losses," Mr. Moffett said. "But we also provided vital liquidity to the strapped housing market."

John Koskinen, a member of Freddie's board of directors, will temporarily replace Mr. Moffett as the top executive, the company said Wednesday. Mr. Koskinen is a corporate-restructuring specialist who spent two years directing planning for the "Year 2000" computer conversion.

The interim CEO has his work cut out for him.

Freddie's request for $30.8 billion in federal aid comes on top of $13.8 billion the McLean-based company received last year. Freddie Mac was forced to go back, hat-in-hand, because its net worth - the value of its assets minus the value of its liabilities - fell below zero.

The recent loss was driven by $13.2 billion in hedged trades, $7.2 billion in credit losses from the declining housing market conditions and $7.5 billion in write-downs of the value of its mortgage-backed securities. The company also took a charge of $8.3 billion for now-worthless tax credits. bailout

The faltering economy, driven down by the collapse of the housing bubble, is causing the housing crisis to spread. Nearly 12 percent of all Americans with a mortgage - a record 5.4 million homeowners - were at least one month late or in foreclosure at the end of last year, according to the Mortgage Bankers Association.

Fannie and Freddie are both being called upon to advance President Obama's agenda of helping up to 9 million borrowers avoid foreclosure through refinanced mortgages or loans that are modified to lower monthly payments.

Freddie Mac said that 1.7 percent of the single-family loans it owns or guarantees were delinquent at the end of the December, up from 1.2 percent in September and 0.65 percent a year earlier. The number of foreclosed properties owned by the company grew to more than 29,000, about double their level at the end of 2007.

Police Union Accuses Ayers in Deadly 1970 San Francisco Bombing

from FoxNews

A San Francisco police union has accused former domestic terrorist William Ayers, co-founder of the Weather Underground, and his wife in a 1970 bombing that killed one sergeant, the San Francisco Chronicle reports.

The union, in a letter to a conservative organization lobbying for arrests in the case, accused Ayers and wife Bernardine Dohrn of bombing a city police station.

On Feb. 16, 1970, a bomb placed on a window ledge of Park Station killed Sgt. Brian McDonnell and injured eight other officers, the Chronicle reported.

The union said it had not been in contact with investigators nor did it have new evidence, but it cited Larry Grathwohl, who works with the conservative organization America's Survival of Maryland and claims that he infiltrated Weather Underground as an FBI informant and heard Ayers confess, the Chronicle reported.

"There are irrefutable and compelling reasons to believe that Bill Ayers and his wife Bernardine Dohrn ... are largely responsible for the bombing of Park Police Station," the Feb. 24 letter reads, according to the Chronicle.

Ayers denies any involvement in the bombing and told the Chronicle in January that his accuser, Grathwohl, was a "paid dishonest person."

Ayers was once again thrust into the spotlight during last year's presidential campaign, when President Obama's ties to the radical were questioned.

Ayers is now an education professor at the University of Illinois at Chicago. Dohrn is a law professor at Northwestern University.

China stocks up on bargain oil

by Chris O'Brien

BEIJING| -- China is forging ahead with an overseas spending splurge, snapping up resources especially oil at bargain prices and strengthening its long-term prospects for growth before Western economies can bounce back.

A series of high-profile energy deals and mining bids in the past month marked an end to the nervousness that appeared to impinge on Communist Party leaders at the outset of the global financial crisis. Attention has turned from hoarding foreign exchange reserves worth close to $2 trillion to locking up future supplies. Oil has emerged at the top of China's shopping list.

In February, China secured oil supply deals totaling $41 billion with Russia, Brazil and Venezuela.

Among the most lucrative: an agreement reached with Russia, in which China will lend $25 billion to Russian oil giant Rosneft and oil pipeline company Transneft. In return, according to Russian news reports, China will receive 300,000 barrels of crude a day for the next 20 years at a rate of about $20 a barrel less than half the current price of $45.

While touring Latin America, Vice President Xi Jinping signed a deal to lend $10 billion to Brazil's state-owned oil company Petrobras. China will receive up to 160,000 barrels a day, again over a 20-year period.

A subsequent announcement from China's National Energy Administration further clarified Beijing's intentions. China is considering setting up a fund for China's three state-owned energy giants PetroChina, Sinopec and the China National Offshore Oil Corp. (CNOOC) to purchase oil and gas companies overseas. The firms will benefit from low-interest loans and direct capital injections, the announcement said.

The oil deals complement efforts to buy into the Australian mining industry. China's biggest aluminum producer, Chinalco, has submitted a bid of $19.5 billion to buy an 18 percent stake in beleaguered mining company Rio Tinto. Chinese firm Minmetals has offered $1.7 billion for Oz Minerals.

China also is seeking diversification of its foreign exchange reserves, now heavily in dollars. The head of China's energy bureau, Zhang Guobao, said earlier this week that China should accumulate more gold and uranium as well as other strategic commodities.

The spending spree extends to fast cars. Last month, a delegation of 90 Chinese companies, headed by Commerce Minister Chen Deming, toured Europe. Purchases included 37,000 BMWs from Germany and 13,000 Jaguars from Britain.

The purchases were a shrewd diplomatic move, pleasing European manufacturers, making a small dent in China's huge trade surpluses and undercutting the U.S. "buy American" drive, a policy that Chinese officials have been quick to criticize.

Song Hang, a researcher at the Chinese Academy of Social Sciences, summed up the strategy in the China Daily newspaper on the eve of the European tour, saying, "Chen can take a positive message to the world: China, as a major trading power, has no interest in adopting protectionism."

Parliamentary sessions in Beijing have spurred lively debates about how best to deploy China's mountain of cash. Commentaries in state media have called for the country to push forward with overseas acquisitions.

China "should take advantage of the current weak commodity prices in global markets by boosting certain strategic resource imports and converting some capital reserves into resources reserves," said an editorial in Outlook magazine, owned by the official news agency, Xinhua.

Much less coverage has been devoted to possible political stumbling blocks if China wields its purchasing power too assertively.

China faces opposition from those who feel Chinese companies, propped up by state cash, have an unfair advantage.

Rumbles can be heard in Australian parliamentary circles in light of the recent mining bids. Critics in Australia fear China is being granted too firm a grip on the country's resource markets, enabling Beijing to influence the prices of commodities.

Similar concerns derailed a bid by CNOOC to buy Californian oil firm Unocal for $18.5 billion in 2005. The Chinese company withdrew the bid after Congress vehemently opposed the proposed deal. Unocal was sold to Chevron, which had submitted a lower bid.

Global intelligence firm Stratfor warns of a backlash as other economies stabilize.

"China's rush to buy up resources, allies and markets faces charges of imperialism on an epic scale, bottom-feeding and taking advantage of the downtrodden," Stratfor said in a report.

U.S. companies have received minimal interest from China. The Unocal affair sticks in the government's memory, nestled just behind recent investments in Morgan Stanley and the Blackstone Group in which China lost billions of dollars.

A major factor, said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, is that China's acquisitions have been focused on resources that tend to be found outside the U.S.

But if China starts looking at U.S. firms, such as the struggling car industry, it might avoid another Unocal moment. Western economies are in such a weak position that they may not be so selective.

"If there were some opportunities in the U.S., there might be less congressional opposition than with Unocal," Mr. Lardy said. "The focus is on the domestic recovery and there is a greater recognition in the Congress that as long as we save little, we depend on capital inflows."

Workers' Health Benefits Eyed for Taxation

(Compiler's note: Here they go again .... finding new ways to redistribute your money.)

By Lori Montgomery

With President Obama's plan to tax the rich to pay for health care facing deep skepticism on Capitol Hill, key lawmakers are pressing a different way to raise money: taxing the health benefits workers receive from their employers.

Since companies began offering group health insurance on a large scale during World War II, the value of that benefit has never been counted as income, reducing workers' taxable earnings by an average of $9,000 a year for family coverage.

In recent weeks, however, Sen. Max Baucus (D-Mont.), chairman of the tax-writing Finance Committee, has repeatedly advocated changing tax laws to include employer benefits, arguing that it makes sense to fund the health-care changes by sucking cash out of the existing system. Meanwhile, 13 other senators -- from both sides of the aisle -- have signed on to a plan for universal coverage that includes a tax on employer-provided benefits.

"I think it's extremely important from a credibility standpoint to show the American people that you're making savings in the enormous sums now being spent on health care before you go out and ask them for billions of dollars more," said Sen. Ron Wyden (D-Ore.), one of the sponsors of that proposal. "And I don't think I'm the only senator who feels that way."

So far, administration officials have been careful not to endorse the idea, which Obama blasted as a major tax increase last year after Sen. John McCain (R-Ariz.) made it the centerpiece of his presidential campaign's health plan. But the president hasn't slammed the door on it, either.

This week, White House budget director Peter Orszag said taxing employer benefits was among several ideas that "most firmly should remain on the table." White House economic adviser Jason Furman called for an end to the so-called "employer exclusion" before he joined the administration. Meanwhile, some congressional Democrats say the White House has signaled that Obama would accept a tax on employer benefits as long as he didn't have to propose it himself.

"Everybody's got to share together in the solution. And this might be one component to sharing," Baucus said in an interview. But "it's early," he said. All the tax proposals will be analyzed before his committee tackles the funding question in May.

The debate on how to pay for Obama's plan to expand coverage to some of the 46 million Americans who lack health insurance is nearly as hot as the debate on the details of remaking the health system itself. By raising taxes and cutting spending on federal health programs, Obama has proposed creating a $634 billion reserve fund that would serve as a "down payment" on changes expected to cost well over $1 trillion over the next decade.

Some of Obama's ideas to generate that revenue have been well received, but others have run into serious opposition. For example, Obama wants to raise $8 billion by making wealthy seniors pay more for Medicare prescription-drug coverage, an idea lawmakers roundly rejected two years ago.

And lawmakers in both parties have panned his proposal to raise nearly half the money by limiting the value of itemized deductions for families who earn more than $250,000 a year. Those deductions can include mortgage interest, gifts to charity and state and local taxes; detractors say a tax increase could hurt charities, further depress the housing market and unfairly target residents of high-tax states.

Taxing employer-provided health benefits has not proven politically popular, either. The Democratic Congress summarily dismissed the idea two years ago when President George W. Bush included it in his budget request. Many senior House Democrats continue to oppose the idea, arguing that it could be catastrophic at a time when companies are scaling back coverage for their workers and dropping it completely for retirees.

"I would caution against doing anything that would undermine existing coverage for the individuals who receive their health coverage from their employer," Rep. Pete Stark (D-Calif.), who chairs an important health subcommittee, said yesterday.

Many economists and tax analysts have long argued for changing current tax law on health coverage, which disproportionately benefits wealthier workers. The law encourages people to enroll in the most comprehensive health plans on offer, the so-called Cadillac plans that provide vast coverage, mask the true cost of health care and contribute to skyrocketing costs.

Many lobbyists and others involved in the health-care debate say they see few other places to go for the kind of money that will be needed to meet Obama's demand for ambitious change. In their view, the question is not whether employer benefits will be taxed but how much of the benefit will be spared.

Waters Helped Bank Whose Stock She Once Owned

By SUSAN SCHMIDT

WASHINGTON -- When Rep. Barney Frank was looking to aid a Boston-based lender last fall, the Massachusetts Democrat urged Maxine Waters, a colleague on the House Financial Services Committee, to "stay out of it," he says.

The reason: Ms. Waters, a longtime congresswoman from California, had close ties to the minority-owned institution, OneUnited Bank.

Ms. Waters and her husband have both held financial stakes in the bank. Until recently, her husband was a director. At the same time, Ms. Waters has publicly boosted OneUnited's executives and criticized its government regulators during congressional hearings. Last fall, she helped secure the bank a meeting with Treasury officials.

Getty Images

Rep. Maxine Waters, center, with Earvin "Magic" Johnson, left, and Ms. Waters's husband, Sidney Williams, at the 2009 BET Honors Reception in Washington, D.C.

Her involvement isn't new. Ms. Waters has detailed her financial ties in a series of federal disclosure forms and has been vocal in public in support of the bank. Those ties, however, have received little public attention. Nor is it well known how the influential lawmaker has over the years acted to support the bank and its executives.

Such potential conflicts of interest are more serious as the banking system's crisis has led the government to take an increasingly active role in overseeing financial institutions, including OneUnited. The financial-services committee on which Ms. Waters sits oversees banking issues, and the lawmaker is a potential future chairman.

Representatives of the bank and Ms. Waters didn't return calls seeking comment. Ms. Waters's congressional staff didn't respond to written questions about her and her husband's relationship with the bank.

Sheila Krumholz, executive director of the Center for Responsive Politics, a watchdog group, says Ms. Waters should have recused herself from any matters involving the bank. If her support helped OneUnited, "it was a disservice to her constituents," Ms. Krumholz says.

Ms. Waters, who represents inner-city Los Angeles, hasn't made a secret of her family's financial interest in OneUnited. Referring to her family's investment, she said in 2007 during a congressional hearing that for African-Americans, "the test of your commitment to economic expansion and development and support for business is whether or not you put your money where your mouth is."

OneUnited's executives have donated $12,500 to Ms. Waters's election campaigns.

Through a series of acquisitions, OneUnited grew to become what it says is the largest African-American-owned bank in the country. It once counted the late Motown Records boss Jheryl Busby as a vice chairman.

Ms. Waters and her husband, Sidney Williams, were investors in two African-American owned California banks that merged with other lenders in 2002 to form OneUnited. Congressional financial-disclosure forms show Ms. Waters acquired OneUnited stock worth between $250,000 and $500,000 in March 2004, as did Mr. Williams. Mr. Williams joined the board of OneUnited that year.

Each sold shares in September 2004 -- including Ms. Waters's entire stake -- but Mr. Williams continued to hold varying amount of the company's stock. In the lawmaker's most recent financial-disclosure form, dated May 2008 and covering the prior year, Ms. Waters reported that her husband held between $250,000 and $500,000 worth of the bank's stock.

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Mr. Williams also received interest payments from a separate holding at the bank, also worth between $250,000 and $500,000. The 2008 form doesn't specify what that is. Mr. Williams stepped down from the bank's board last spring. It couldn't be learned whether he still owns stock in the bank. Mr. Williams didn't return calls seeking comment.

At a hearing on minority lending in 2007, Ms. Waters criticized regulators for not doing enough to help minority banks stave off mergers with non-minority institutions. The lawmaker said she had contacted the Federal Deposit Insurance Corp. in 2002 over such concerns and "I was told that there was nothing that could be done."

In her 2007 remarks, Ms. Waters alluded to two banks, Independence Bank of Washington, D.C., and "another bank that was about to be acquired by a major white bank out of Illinois."

Ms. Waters didn't mention that OneUnited had been an unsuccessful suitor of Independence, which had been taken over several years earlier. The second bank, which she didn't name, appears to have been Family Savings Bank of Los Angeles. In 2002, that bank backed out of a merger agreement with FBOP Bank of Oak Brook, Ill., and shortly afterward was acquired by OneUnited.

News reports at the time credited the intervention of Ms. Waters and others for Family Savings's change of heart.

At the hearing, Ms. Waters praised OneUnited's senior counsel, Robert P. Cooper, as "typical of the young, brilliant minds that have been amassed at OneUnited Bank."

OneUnited's minority-lending record is mixed. The bank received "outstanding" Community Reinvestment Act ratings for lending in Los Angeles. It has weak ratings in Massachusetts and failed to meet minimum standards in Florida.

In January, Ms. Waters acknowledged she made a call to the Treasury on OneUnited's behalf. The bank's capital, which was heavily invested in shares of Fannie Mae and Freddie Mac, was all but wiped out with the federal takeover of the two mortgage giants, and the bank was seeking help from regulators.

OneUnited eventually secured bailout funds under the government's $700 billion Troubled Asset Relief Program, which was set up later that month.

In a brief interview in January, Ms. Waters said she was unaware the bank received $12 million of TARP money, which arrived in December. OneUnited was "just a small" bank, she said.

A provision designed to aid OneUnited was written into the federal bailout legislation by Mr. Frank, who is chairman of the financial-services panel. Mr. Frank has said he inserted the provision to help the only African-American owned bank in his home state. He said in an interview that Ms. Waters's interest "had zero impact on the outcome because I would have done it anyway."

In October, regulators demanded that OneUnited raise fresh capital and name an independent board. The bank was ordered to stop paying for a Porsche used by one of its executives and its chairman's $6.4 million beachfront home in Pacific Palisades, Calif., a luxury enclave between Malibu and Santa Monica.