The Fraudulence of Obama

by Peter Wehner

To understand the fundamental fraudulence of Barack Obama, consider just one issue: his relationship with lobbyists.

In arguably the most important speech of the campaign, the Jefferson-Jackson dinner in Iowa in 2007, Obama said, “[Lobbyists] have not funded my campaign, they will not work in my White House.…” Upon taking office, Obama made quite a show of announcing new ethics rules barring lobbyists from working in the administration on issues that fell under their lobbying bailiwick. Yet Obama immediately allowed waivers for lobbyists working on issues that fell under their lobbying bailiwick.

But that’s not all. During the 2008 campaign, Obama said this:

I intend to tell the corporate lobbyists that their days of setting the agenda in Washington are over, that they had not funded my campaigns, and from my first day as president, I will launch the most sweeping ethics reform in U.S. history. We will make government more open, more accountable and more responsive to the problems of the American people.

When speaking about the destructive power of lobbyists in a town hall meeting in Bristol, Virginia, Obama was emphatic: ““We are going to change how Washington works. They will not run our party. They will not run our White House. They will not drown out the views of the American people.” And in August, 2008, Obama said this: ““I suffer from the same original sin of all politicians, which is we’’ve got to raise money. But my argument has been and will continue to be that the disproportionate influence of lobbyists and special interest is a problem in Washington and in state capitals.”

Now let’s judge Obama’s words against his actions, with the help of a Washington Post story.

Here’s how the story begins:

Before 9 a.m., a group of lobbyists began showing up at the White House security gates with the chief executives of their companies, all of whom serve on President Obama’s jobs council, to be checked in for a roundtable with the president. At 1 p.m., a dozen representatives from the meat industry arrived for a briefing in the New Executive Office Building. At 3 p.m., a handful of lobbyists were lining up for a ceremony honoring the 2011 World Series champions, the St. Louis Cardinals. And at 4 p.m., a lobbyist for Goldman Sachs arrived in the Old Executive Office Building for a meeting with Alan B. Krueger, chairman of the Council of Economic Advisers.

It was an unremarkable January day, with a steady stream of lobbyists among the thousands of daily visitors to the White House and the surrounding executive office buildings, according to a Washington Post analysis of visitor logs released by the administration… The visitor logs for Jan. 17 – one of the most recent days available – show that the lobbying industry Obama has vowed to constrain is a regular presence at 1600 Pennsylvania Ave. The records also suggest that lobbyists with personal connections to the White House enjoy the easiest access.

Now hypocrisy is not an unknown quality in a politician. But what sets Obama apart from almost everyone else is the lengths Obama goes to in order to portray himself as morally superior to the rest of the political class even as he acts in ways that completely shatter his claims. He reminds me of the minister who cannot help from condemning the very sin to which he is beholden. And so as recently as last month Obama was saying, “A lot of folks see the amounts of money that are being spent and the special interests that dominate and the lobbyists that always have access, and they say to themselves, maybe I don’t count.”

What’s impossible to know is the degree to which Obama is alarmingly cynical or the degree to which he is alarmingly self-deluded. Whatever the case, he is a man whose words mean nothing. Nothing at all.

Peter Wehner

Source: http://www.commentarymagazine.com/2012/05/22/fraudulence-of-obama-and-lobbyists/

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Obama’s Bain Hypocrisy

by Alana Goodman

ABC News reports that one of Obama’s top bundlers, Bain Capital executive Jonathan Lavine, actually appears to have had much more of a connection to the Ampad plant-closing issue than Mitt Romney did:

The Obama campaign’s latest attack tells the story of workers at an Indiana office supply company who lost their jobs after a Bain-owned company named American Pad & Paper (Ampad) took over their company and drove it out of business.

Here’s what the Obama web video doesn’t mention: A top Obama donor and fundraiser had a much more direct tie to the controversy and actually served on the board of directors at Richardson, Texas-based Ampad, which makes office paper products….

Lavine started working for Bain in 1993. He was one of three Bain executives who served on the board of directors of Ampad for several years, a post he held until 1999. Here’s a news release announcing his departure from the company in April 1999.

Lavine’s placement on the board of Ampad suggests he had a more direct role than Romney in the series of events surrounding the layoffs, labor disputes and eventual bankruptcy of the Marion, Ind., factory featured in the Obama campaign video.

Obama spokesman Ben LaBolt gave ABC an evasive response when asked about the contradiction:

“No one aside from Mitt Romney is running for president highlighting their tenure as a corporate buyout specialist as one of job creation,” LaBolt said. “The president has support from business leaders across industries who have seen him pull the economy back from the brink of another depression.”

True, Romney is the only candidate running as a turnaround artist and job-creator. But Obama is also the only candidate running on the claim that Bain Capital is a greedy company that bulldozed smaller businesses and destroyed lives. If that’s the centerpiece of his reelection strategy – and so far it sounds like it is – isn’t it noteworthy that he’s taking large donations from Bain leadership?

It’s not just donations, either. Lavine’s name appeared six times on the White House visitor logs since Obama took office, including a meeting with Rahm Emanuel in 2009. Lavine and two other Bain executives, Josh Bekenstein and Mark Nunnelly, were also invited to a White House event encouraging the private sector to invest in community-oriented non-profits in 2009. In a speech at the event, Obama called on the attending business leaders to “provide that critical seed capital to launch these ideas”:

So all of this represents a new kind of partnership between government and the non-profit sector. But I can tell you right now, that partnership isn’t complete, and it won’t be successful, without help from the private sector. And that’s why I’m glad that there are some deep pockets in the audience here — foundations, corporations, and individuals. You need to be part of this effort, as well. And that’s my challenge to the private sector today.

Note that Lavine, Bekenstein and Nunnelly were all top Bain executives during Romney’s tenure and remain so today. The fact that the White House invited them to an event to encourage them to invest in vital non-profits seems to contradict the White House’s current claim that Bain had a history of destroying companies it invested in.

Alana Goodman

Source: http://www.commentarymagazine.com/2012/05/22/obama-bain-hypocrisy/

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Shifting U.N. Language Threatens U.S. Free Speech

by Daniel E. Rogel

The body representing the world's Muslim nations, the Organization of the Islamic Cooperation (OIC), has shifted its strategy for limiting free speech about Islam before the United Nations Human Rights Council. A move away from language about limiting "defamation of religions" and toward preventing "religious hatred," has "easily duped" the West into adopting the OIC's agenda of limiting discussion about Islam, reports Ann Snyder for the Gatestone Institute.

The OIC pressed for "speech-restrictive" resolutions on religion in U.N. forums for more than a decade. Ratification of these U.N. resolutions would have internationalized anti-blasphemy laws found in Muslim-majority countries.

Western nations resisted such attempts, arguing that the laws criminalized free speech. The move could also result in international prosecution of Westerners for criticizing practices by some Islamists, just as similar laws have been used against Middle East Christians.

The OIC adjusted its strategy accordingly, but not its goal. It dropped calls to criminalize the "defamation of religions" and now relies on interpreting pre-existing language in the U.N.'s International Covenant on Civil and Political Rights [ICCPR], Article 20(2). The United States Senate ratified the ICCPR in 1992 but with an explicit reservation against the article, which would have made "any advocacy of national, racial, or religious hatred…prohibited by law."

The new U.N. Human Rights Council Resolution 16/18 "condemns any advocacy of religious hatred against individuals that constitutes incitement to discrimination, hostility or violence" using "print, audio-visual or electronic media or any other means." It "bears a striking resemblance" to new legal restrictions on "hate speech" in Europe that has been used to prosecute alleged offenders, writes Snyder, a senior fellow at the Middle East Forum's The Legal Project.

Despite the obvious similarities of language and implementation, Secretary of State Hillary Clinton "applauded" the compromise and described the efforts as beginning "to overcome the false divide that pits religious sensitivities against freedom of expression."

Daniel E. Rogel

Source: http://www.investigativeproject.org/3585/shifting-un-language-threatens-us-free-speech

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Yemeni Jewish Community Leader Murdered

by Daniel E. Rogel

A leader of the Yemeni Jewish community was stabbed to death in that nation's capital after a Muslim man accused him of witchcraft, the Jerusalem Post reports. The incident is the latest in a series of incidents around the Arab world which have threatened and uprooted the region's small remaining Jewish communities.

Yehya Zindani, the son of murderer leader Aharon Zindani, described the attacker as a "well-known person who says my father has ruined and bewitched him." The murderer, described by a Zindani family friend as a "member of al-Qaida," stabbed the Jewish leader 12 times before he was stopped by a group of local men.

Aharon Zindani had returned to Yemen after immigrating to Israel, rejoining the small Jewish community in the Yemeni capital Sana'a, which numbers around 80 people. Many of those living in the capital moved there from the Yemeni town of Raidah in December 2008, following threats from Islamist extremists and the murder of Jewish teacher Masha al-Nahari.

In the Arab world's largest remaining Jewish communities, in Morocco and Tunisia, the recent rise of Islamist politicians has awakened dormant anti-Semitism. Anti-Semitic chants at a Tunisian rally, welcoming Hamas' prime minister, prompted Tunisian Islamist politician Rachid Ghannouchi to apologize to the concerned local Jews. He, like many Islamists, claims that Zionism is the problem not Jewry, even if the distinction is often blurred.

While the hate hasn't scattered the lingering remnants, it has raised the sense of alarm.

Daniel E. Rogel

Source: http://www.investigativeproject.org/3588/yemeni-jewish-community-leader-murdered

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Europe's Wrongheaded Austerity Policies

by Peter Martino

The irony is that the austerity policies of the past years have been imposed at the behest of the unelected, leftist authorities in Brussels on center-right governments in the EU member states. The electorates are punishing their center-right governments by voting in center-left politicians who promise to end the austerity policies and "tax the rich" – a course that will make matters even worse.

Austerity -- what governments are currently experiencing in Europe – can be a bad thing. It is a well-known basic economic theory that when politicians try to slash the government budget by taxing citizens rather than by cutting government expenditure, they only harm the economy, which results in less tax income and worsens the situation. In the early 1970s, economist Arthur Laffer visualized it by drawing a curve on a napkin, indicating that from a certain point on, higher taxes result in less government income. When taxes are raised even further, the economy begins to contract.

A typical example can currently be seen in the Netherlands. The country's economy has not grown in the last three quarters. Pressured by the European Union, austerity policies were introduced in 2010. Last April, the government fell when the Freedom Party of Geert Wilders refused to back a new austerity package of €11.5 billion, of which only €4 billion was to come from cutting expenditures and €7.5 billion was expected to come from raising taxes. The new austerity round was nevertheless imposed by the EU, which insisted that the Netherlands trim its budget deficit to 3% of BBP in 2013. Geert Wilders was right to have refused to go along with the latest plans. Not only will the amount of €7.5 billion in new taxes in all likelihood not be reached, but the Dutch economy will be hampered even more.

Last January, Standard & Poor's warned the Netherlands that its credit rating could be lowered if its growth kept declining. S&P warned that the Dutch austerity policies risked "becoming self-defeating, as domestic demands fall in line with consumers' rising concerns about job security and disposable incomes, eroding national tax revenues."

Geert Wilders' party is expected to do well in next September's general elections. The electorate agrees with his rejection of the austerity package. Like Mr. Wilders, it blames the EU authorities in Brussels for imposing these policies on the Netherlands.

The same phenomenon can be seen all over Europe, with electorates in revolt against EU-imposed austerity everywhere. The rising unpopularity of governments that are trying to cut back their deficits has worried the IMF. Earlier this month, IMF Managing Director Christine Lagarde said that the IMF is aware that fiscal austerity holds back growth and that the effects are worse in an economic downturn. This is, however, only a half-truth. As no one, not even the state, can indefinitely continue to spend more money than he receives, cutting government expenditure – hence austerity – is badly needed. The problem is that the austerity policies are targeting not the institution which is living beyond its means -- namely the government -- but the taxpayers. As Europeans are already suffering tax levels that are almost twice as high as those in the U.S., it is only natural that the voters are in revolt.

The irony is that the austerity policies of the past years have been imposed at the behest of the unelected liberal, leftist authorities in Brussels on center-right governments in the EU member states. The electorates are punishing their center-right governments by voting in center-left politicians who promise to end the austerity policies and "tax the rich" -- a course that will make matters even worse.

The Dutch are lucky to have Geert Wilders; but the French, who lack an equivalent of Mr. Wilders, quite understandably voted President Nicolas Sarkozy out because they disagreed with his austerity policy. However, they voted the Socialist François Hollande in, who will undoubtedly only heighten the problem.

The same phenomenon can be witnessed in the United Kingdom. Two years ago, the Conservative David Cameron managed to oust Labour. Today, polls predict that if elections were to be held now, Labour would beat the Conservatives with a margin of 10%. David Cameron is fortunate that Labour leader Ed Miliband is unpopular or the margin might be even larger.

What did Cameron do wrong? He, too, made tax payers pay for austerity. One of the first things Mr. Cameron did was to raise Britain's top tax rate to 50%. The result was that the tax revenue from Britain's highest income group fell. Another thing Cameron did was to raise sales taxes. VAT – or Value Added Tax – rose from 17.5 to 20%, the highest level ever, as part of Cameron's effort to bring down the country's budget deficit.

The VAT rise, the government said, was a tough, but necessary step in getting Britain back on the road to economic recovery. The Dutch government has just announced it will raise the VAT from 19% to 21%, a measure which Mr. Wilders, who wants to lower it to 18%, vigorously opposes. Earlier, German Chancellor Angela Merkel, too, had raised the VAT in Germany from 16% to 19% as part of her efforts to fill holes in public spending; Mrs. Merkel is also expected to fare badly in next year's general elections.

Early this month, the British Conservatives suffered widespread losses in local elections as voters punished the party for austerity measures and a stalled economy. A poll among members of Cameron's own party revealed that they see the tax rises on ordinary families as one of the biggest barriers to Cameron's reelection. Ever so often, Mr. Cameron expresses his approval of taxing people even more. "Taxes must rise to reform elderly care," he said. "Green taxes must increase in order to protect the environment."

Austerity policies, which consist mainly of extra taxes, not only keep the European governments from finding long-term solutions to their overspending, while worsening the economic situation; they also make these government increasingly unpopular. Almost 40 years after Arthur Laffer drew his famous curve on a napkin, one wonders why European politicians, keep closing their eyes to an evident truth, and put in place incentives for growth. But then even their American colleagues often do not want to see this truth.

President Obama's efforts at the G8 meeting last Saturday to help Merkel and Hollande reach a consensus on how to proceed will not help. Merkel and Hollande do not need to reach a consensus on how to proceed; they need to reverse course.

Peter Martino

Source: http://www.gatestoneinstitute.org/3069/europe-austerity-policies

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Voting in Egypt as "Holy War"

by Raymond Ibrahim

If the non-Islamic candidates win, it will only be "by cheating," at which point "the Islamist organizations" will resort to "armed action" and such presidents will suffer the same fate as Anwar Sadat [assassination].

Despite the fact that some in the West portray Islam and democracy as being perfectly compatible, evidence continues to emerge that many countries in the Middle East, democracy and elections are various means to one end: the establishment of a decidedly undemocratic form of law—Islamic, or Sharia Law.

An Egyptian cleric, Dr. Talat Zahran, proclaimed that it is "obligatory to cheat at elections, a beautiful thing" -- meaning that voting is a tool, an instrument, the only value of which is to empower Sharia.

Another cleric, Hazim Shuman, who has his own TV program, issued a fatwa that likened voting for Islamist candidates to a "jihad," or a holy war, adding that paradise awaits whoever is "martyred" during the electoral campaign.

Similarly, according to Al-Wafd, last Friday, May 18^th, Yusuf al-Qaradawi, one of if not the most authoritative clerics in the Islamic world, "called on all Egyptians to vote for one of the Islamist candidates." He specifically named the three Islamists, Muhammad Mursi (candidate of the Salafist party), Abd al-Mun'im Abu al-Futuh (candidate of the Muslim Brotherhood's political wing), and Muhammad al-Salim al-Awwa. Qaradawi described them as "best for Egypt" because they will "apply the Islamic Sharia and achieve justice." Further, during his Friday sermon, Qaradawi said that it is "mandatory for every Egyptian to go and vote for the presidential elections," calling it a form of "obligatory testimony" on behalf of Islam, and quoting Koran 2:283 as proof: "and do not conceal testimony, and whoever conceals it, his heart is surely sinful; and Allah knows what you do."

Sheikh Osama Qassim, however, a member of Egypt's notorious Islamic Jihad, which also seeks to install Sharia law, focused on the non-Islamist candidates—he specifically named Ahmed Shafiq and Amr Mussa—saying that if they win the presidential elections, it will only be "by cheating," at which point "the Islamist organizations" will resort to "armed action" [code for Jihad], adding that such presidents will suffer the same fate of Anwar Sadat [assassination], but that this time, the struggle will see "the Islamists achieve complete domination" in Egypt.

Raymond Ibrahim is a Shillman Fellow at the David Horowitz Freedom Center and an Associate Fellow at the Middle East Forum.

Source: http://www.gatestoneinstitute.org/3071/voting-in-egypt

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Obama’s Chicago Hate Group Connection

by Daniel Greenfield

Munir Muhammad is grandfatherly and soft-spoken. He is on a first-name basis with half the politicians in Chicago, and has sat across the table with power players ranging from several governors of his state to Barack Hussein Obama. Muhammad is also a leading figure in one of America’s oldest hate groups.

Born James Waller in Birmingham, Alabama, he drifted into the orbit of the Nation of Islam, changed his name, and moved up through the ranks in the organization. Today his Coalition for the Remembrance of The Most Honorable Elijah Muhammad is one of the fragmented organizations, squabbling over the vicious legacy of the Nation of Islam.

The Nation of Islam, one of the country’s oldest hate groups, has an ugly fratricidal history. Along with its violent attacks on those outside its circle of race and religion, fueled by a belief that white people are subhumans created by a black mad scientist, it has carried on an equally violent campaign against its own. The list of Nation of Islam dissidents murdered or assaulted by their own people stretches back nearly eighty years. Despite the call to racial solidarity, there is little unity even within the ranks of the Nation of Islam, whose management often resembles that of a gang, rather than a religious group.

The difference between the Nation of Islam and most hate groups is that NOI members and groups can receive government contracts and plum posts from the Democratic Party. Munir Muhammad, who has spent the last nine years sitting on the Illinois Human Rights Commission, with a nearly fifty thousand dollar salary, is proof of the problem. How does the business manager for a hate group get appointed by two Illinois governors to a human rights commission? It’s surprisingly easy. It’s just a matter of knowing the right people.

On the website for CROE-TV, the Coalition for the Remembrance of The Most Honorable Elijah, Muhammad’s broadcasting arm, which puts out several television shows featuring Munir Muhammad, such as Muhammad and Friends, former listed guests include Valerie Jarrett, Secretary of Education Arne Duncan and Barack Obama.

There are also lesser lights like former Chicago mayor and brother of the former Chief of Staff, Richard M Daley and Senator Dick Durbin, alongside Louis Farrakhan; powerful men and women who have in their time come to sit down and chat with Muhammad Munir, opposite the red and white crescent flag of the Nation of Islam leaning against the wall in the corner of the studio.

When Cook County Sheriff Michael Sheahan wanted to get rid of one of his critics, he just swapped him out with Munir Muhammad, who became Vice-Chairman of the Board of Corrections, not to mention also serving on the Cook County Sheriff’s Committee on Religious Tolerance and the Chicago Police Department’s Multicultural Forum.

Illinois politicians didn’t just give Munir Muhammad lucrative policy gigs, they donated thousands of dollars directly to his organization. An organization whose reason for existence is promoting the ideas of a bigot, whose views, aside from skin color, have little to distinguish them from those of Aryan Identity groups.

Governor Blagojevich had doled out some 50,000 dollars in state money to Munir’s hate group and even proclaimed February 12, 2006 to be “Coalition for the Remembrance of Elijah Muhammad Day” and encouraged citizens of the state to recognize the organization for its “ongoing commitment to ensuring the legacy of this influential African-American leader”—an influential leader who had described white people as devils and “born murderers”.

Similar proclamations from the governor’s office in 2004 and 2005 described the Coalition as “an important voice in both the African-American community and the general public”

But Blagojevich, despite his national reputation for corruption, was not unique in pandering to Munir Muhammad. After Blagojevich was gone, Governor Pat Quinn renominated Munir Muhammad to the Illinois Human Rights Commission. The result was a brief debate and a close vote with the Illinois Senate splitting mostly down party lines. Twenty senators voted to reappoint Munir Muhammad and thirty voted against—with only seven Democrats crossing party lines to vote against him. Were Barack Obama still in the Illinois State Senate, it’s quite apparent how he would have voted.

The Illinois State Senate transcript for Munir Muhammad’s original appointment shows that it was carried without a single opposing vote. Obama appeared to be present at the session, which means that he voted to confirm Munir Muhammad.

In 2001, 75,000 dollars was allotted to the Coalition for the purchase of television cameras for its production studios, courtesy of Illinois State Senator Donne E. Trotter. When Gilad Atzmon, a figure so repulsive that even Anti-Israel groups have deemed him too Anti-Semitic to be associated with, appeared on Munir Muhammad’s show, the cameras filming the whole thing may well have been the ones paid for by taxpayer dollars. At the time Barack Obama was a member of the Illinois State Senate and his funding requests appear next to those of Trotter.

It would be nice to think that Munir Muhammad’s success was an individual blind spot in the system, but it wasn’t. Claudette Marie Muhammad, Chief of Protocol in the Nation of Islam, had been appointed to the Illinois Anti-Discrimination Panel. And there was Willie Barrow, the Chairwoman of the Commission on Discrimination and Hate Crimes, an enthusiastic admirer of Farrakhan and one of Obama’s Faith Endorsers. A woman whom Michelle Obama described as “our friend”.

Munir Muhammad has lost his position and his fifty thousand dollar salary, but there is little doubt that Illinois politicians will continue trooping down to the studio to chat with the bigot while sitting opposite his red flag. Corruption is the way things are done in Chicago and that includes turning a blind eye to black racist groups who may believe that white people are the devil, but can be counted on to deliver the votes from Elijah Muhammad’s mothership.

Chicago’s dirt is no longer just the property of that city; it belongs to all of us. And Munir Muhammad also belongs to all of us. The men and women he sat across from are no longer just big wheels in state politics—they run the country. And the Chicago Way has become the American Way.

Daniel Greenfield

Source: http://frontpagemag.com/2012/05/22/obamas-chicago-hate-group-connection/

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The Face of Islam: Kuffars Beware!

by David Horowitz

Yesterday at FrontPage, Shillman Journalism Fellow Bruce Bawer had an excellent piece on an undercover investigation exposing the disturbing ideology preached in Swedish mosques. As Bawer points out, in 2007, Britain’s Channel 4 aired an even more shocking exposé on mosques in the United Kingdom. The program, which is presented below, shows British Muslims promoting violence, rejection of Western law, inferiority of women, hatred of gays and British society and the acceptability of marrying female children.

To watch a clip on the undercover investigation, click here.

David Horowitz

Source: http://frontpagemag.com/2012/05/22/the-face-of-islam-kuffars-beware-1-2/

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Reuters Exclusive: U.S. Lets China Bypass Wall Street for Treasury Orders

by Emily Flitter

China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.

The change was not announced publicly or in any message to primary dealers.

"Direct bidding is open to a wide range of investors, but as a matter of general policy we do not comment on individual bidders," said Matt Anderson, a Treasury Department spokesman.

While there is been no prohibition on foreign government entities bidding directly, the Treasury's accommodation of China is unique.

The Treasury's sales of U.S. debt to China have become part of a politically charged public debate about China's role as the largest exporter to the United States and also the country's largest creditor.

The privilege may help China obtain U.S. debt for a better price by keeping Wall Street's knowledge of its orders to a minimum.

Primary dealers are not allowed to charge customers money to bid on their behalf at Treasury auctions, so China isn't saving money by cutting out commission fees.

Instead, China is preserving the value of specific information about its bidding habits. By bidding directly, China prevents Wall Street banks from trying to exploit its huge presence in a given auction by driving up the price.

It is one of several courtesies provided to a buyer in a class by itself in terms of purchasing power. Although the Japanese, for example, own about $1.1 trillion of Treasuries, their purchasing has been less centralized. Buying by Japan is scattered among institutions, including pension funds, large Japanese banks and the Bank of Japan, without a single entity dominating.

Granting China a direct bidding link is not the first time Treasury has gone to great lengths to keep its largest client happy.

In 2009, when Treasury officials found China was using special deals with primary dealers to conceal its U.S. debt purchases, the Treasury changed a rule to outlaw those deals, Reuters reported last June. But at the same time it relaxed a reporting requirement to make the Chinese more comfortable with the amended rule.

Another feature of the U.S.-China business relationship is discretion: The Treasury tried to keep its motivation for the 2009 rule change under wraps, Reuters reported.

Documents dealing with China's new status as a direct bidder again demonstrate the Treasury's desire for secrecy -- in terms of Wall Street and its new direct bidding customer.

To safeguard against hackers, Treasury officials upgraded the system that allows China to access the bidding process.

Then they discussed ways to deflect questions from Wall Street traders that would arise once the auction results began revealing the undeniable presence of a foreign direct bidder.

"Most hold the view that foreign accounts only submit 'indirect bids' through primary dealers. This will likely cause significant chatter on the street and many questions will likely come our way," wrote one government official in an email viewed by Reuters.

In the email, the official suggested providing basic, general answers to questions about who can bid in Treasury actions.

"For questions more extensive or probing in nature, I think it prudent to direct them to the or Treasury public relations area," the official wrote.

The granting to China of direct bidder status may be controversial because some government officials are concerned that China has gained too much leverage over the United States through its large Treasury holdings.

For example, economist Brad Setser, who is a member of the National Economic Council and has also served on the National Security Council, has argued China's large Treasury holdings pose a national security threat.

Writing for the Council on Foreign Relations in 2009, Setser posited that China's massive U.S. debt holdings gave it power over U.S. policy via the threat of a swift, large sale of U.S. debt that could send the market into turmoil and drive up interest rates.

But Treasury officials have long maintained that U.S. debt sales to China are kept separate from politics in a business relationship that benefits both countries. The Chinese use Treasuries to house the dollars they receive from selling goods to the United States, while the U.S. government is happy to see such strong demand for its debt because it keeps interest rates low.

A spokesman for the Chinese embassy in Washington did not respond to calls and emails seeking comment.

The United States has, however, displayed increasing anxiety about China as a cybersecurity threat. The change Treasury officials made to their direct bidding system before allowing access to China was to limit access to the system to a specially designed private network connection controlled by the Treasury.

China is among the most sensitive topics for bankers and government officials who court the country as a financial client because of its size and importance, and none would agree to comment on the record for this story.

A former debt management official at the Treasury who did not want to be identified said that as China's experience in the U.S. Treasury market has deepened over time, Chinese officials may have felt more comfortable taking the reins in the management of their holdings.

Their request to bid directly, in his view, came from a confidence that their money managers could buy U.S. debt more efficiently on their own than through Wall Street banks, which can often drive up the price of Treasuries at an auction if they know how much large clients are willing to pay. Such a practice that is not specifically illegal, though most traders would deem it unethical.

Evidence of China's growing sophistication as a money manager in the U.S. markets is clear in its expansion of operations in New York. Its money management arm, the State Administration for Foreign Exchange (commonly called SAFE), has an office in Midtown Manhattan and a seasoned chief investment officer -- former Pacific Investment Management Co derivatives head Changhong Zhu -- in Beijing.

A woman who answered the phone at SAFE's New York office said no one in the office was authorized to talk to the media.

(Editing by Martin Howell and Steve Orlofsky)

Emily Flitter

Source: http://www.reuters.com/article/2012/05/21/us-usa-treasuries-china-idUSBRE84K11720120521

Copyright - Original materials copyright (c) by the authors.

In memory of David G. Littman

by Raphael Israeli

Remembering David G. Littman, historian, activist, and a great friend.

Photo by: Courtesy

David Littman, historian, writer, financier, public figure and relentless activist at the Jewish People, sadly passed away on May 20, 2012 in his home town of Gland on Lake Geneva.

David was born in London on July 4, 1933. For several years he was main representative at the UN for the World Union for Progressive Judaism (WUPJ). Since 1997, David was affilliated with the Association of World Citizens (AWC) and the Association for World Education (AWE).

While forging a career in his family's business, David chose to continue his postgraduate studies in London's Institute of Archaeology. Among other sites, he excavated Hazor in the Galilee region of Israel under Professor Yigal Yadin in the summer of 1958.

In September 1959, David married Gisèle Orebi, a Cairo-born, French-speaking fellow student who was known by her nom de plume, Bat Ye’or. As a stateless refugee, David's wife had been forced to flee Egypt in 1957. Soon after the birth of their first child, David volunteered for a delicate humanitarian mission in Morocco. Accompanied by his wife as secretary and their baby daughter Diana, David stayed in Morocco from March 15 until July 24 1961. David managed the Casablanca office of the Geneva-based international NGO for children called OSE, and used his office to smuggle out hundreds of Jewish children to Israel. The initiative, known as Operation Mural, earned David the “Hero of Silence” award, bestowed upon him by a grateful State of Israel in 2009. The venture became the subject of the film "Operation Mural Casablanca 1961" which premiered at the San Francisco Film Festival in 2007.

But perhaps David's greatest claim to fame is his partnership with his wife's ground-breaking research on dhimmitude, Eurabia and the rising Caliphate of fundamentalist Islam that seeks to conquer the West through Jihad. Indefatigably supporting Orebi's work, David was her constant companion in all of her lecture tours, relentlessly defending her against her many detractors.

These are the words I penned in a dedication of one of my books to this remarkable couple:

To Gisele and David Littman,

"What a couple!" it was said of them.

In wonder of the golden half-century of their marriage,
And in recognition of decades of their unflinching friendship,

"Let me not to the marriage of true minds admit impediments."

(William Shakespeare, Sonnet 116.)

Raphael Israeli


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