Early Solution to Islamic State was Ignored

Posted on January 1, 2015January 1, 2015 by Denise Simon

Those people in Syria, those rebels that everyone thinks are all jihadis need to rethink the early days. The matter was ignored, dismissed and exploited. Now between Syria, Iraq, Libya, Jordan, Turkey and Lebanon, the enemy has won by doing their own exploitation.

The cost of life and treasure grows with no real end in sight as explained by the White House and the Pentagon.

Rebels: Obama administration ignored early plan to stop Islamic State

ISTANBUL — Two months before Mosul and other cities in northern Iraq fell to the Islamic State last June, representatives of a Syrian rebel group called on the new U.S. special envoy for Syria with an outline of a plan to stop the extremists.

The group urged the U.S. to shift its focus to eastern Syria, where the Islamic State had emerged from Raqqa and other towns under its control and begun military operations to capture Deir el Zour province.

If Islamic State fighters seized the region’s oil and gas resources, they’d gain enough power to destroy the U.S.-backed rebel forces across northern Syria and link the swath of territory they held in Syria to that under their control in Iraq’s restive Anbar province

“Ultimately,” they said in a written memo, using a common abbreviation for the Islamic State, “this will lead to an expansion of ISIS to reach neighboring countries as well . . . bringing it closer to establish the Islamic State in Iraq and Syria.”

But the presentation April 17 to special State Department envoy Daniel Rubinstein was stillborn. The plea for immediate financial support for moderate forces in the east, backing for a rebel offensive in Aleppo that would divert Islamic State forces, and relief and medical supplies in the east went unanswered.

“Two or three million dollars would have changed the whole thing,” said a rebel official who was at the meeting and spoke only on the condition of anonymity because he was discussing a diplomatic exchange. “But we never heard back from them.”

That’s been the pattern. Moderate rebels, despite their battlefield setbacks, have unique assets, such as ground-level intelligence about the locations and movements of the Islamic State, a grasp of local politics and the drive to expel foreign-led forces from their country. But they’ve failed to gain traction with the Obama administration for their plans to fight the terror groups, and recently they’ve had trouble even getting a hearing.

The Islamic State didn’t follow quite the path that Syrian rebel officials had predicted, conquering Mosul before Deir el Zour. But the rebels were right that the extremists’ takeover of eastern Syria would speed the demise of the moderates by radicalizing the battlefield, opening the border with Iraq to free movement of arms and manpower, and providing the Islamic State with income from the sale of oil and gas.

Syrian opposition leaders doubt that the U.S.-led intervention can defeat the extremists.

“You cannot defeat terrorism by airstrikes alone,” said Hadi al Bahra, the president of the Syrian Opposition Coalition. “There must be a strategy in place.”

It should entail “full coordination” between U.S.-led airstrikes and ground forces, military pressure on the Bashar Assad regime and a commitment to enable moderates to establish a governing system in Syria, Bahra said.

“They listen,” he said of U.S. officials. “But they do not respond.”

The State Department had no comment on the April meeting. “We do not discuss details of our diplomatic contacts and outreach,” said spokesman Michael Lavallee.

The administration also has tried to choke off complaints from rebel officials and commanders, threatening a total aid cutoff if they’re quoted in the news media, rebel officials said. For this reason McClatchy isn’t naming its rebel sources. (A State Department official told McClatchy: “We have not heard of such a warning.”)

The meeting with Rubinstein, an intelligence expert who took over from former Ambassador Robert Ford in March, was only one of numerous such efforts.

In early May, the then-president of the opposition coalition, Ahmad Jarba, made a presentation about fighting the Islamic State to Michael Lumpkin, the assistant secretary of defense for special operations and low-intensity conflict.

Jarba emphasized that the battle for eastern Syria was “important to Iraq as well” and called for “real alliance . . . to fight this common cancer,” according to notes of the meeting made available to McClatchy.

“We need a strategic partnership to fight terrorism,” he said at the meeting. “We need logistical support and weapons to help the Free Syrian Army fight the Islamic State on the Iraqi border as well.” The Free Syrian Army is an umbrella group of moderate forces fighting the Assad regime.

Lumpkin replied that Defense Secretary Chuck Hagel was supportive of their efforts against the Syrian regime and al Qaida, and predicted there would be many more meetings “as we work together to end this challenge to us both,” according to the visitors’ notes.

The Pentagon confirmed that the meeting took place May 8 and addressed the “threat of extremists groups” such as the Islamic State. It said Lumpkin had affirmed U.S. support for Jarba’s efforts to build the capacity of the moderate opposition.

But there was no further response, Syrian opposition officials said.

One attendee at the meeting expressed surprise that Lumpkin didn’t ask about rebel strategy.

The former chief of staff of the Free Syrian Army – a post stripped of most power because the U.S. disburses covert aid to individual rebel commanders rather than through a general staff – said he’d taken maps and a five-page outline of the first phase of a strategic plan with him, as well as a separate file for the battle against the Syrian regime. “But no one asked me for any of these,” Gen. Abdul-Ilah Albashir said.

Interviewed in late September, he told McClatchy the Americans had shown no interest and that he didn’t volunteer his plans: “They don’t even say hello to us. How can we share these things with them?”

On May 14, Jarba and other rebel officials spent a half-hour with President Barack Obama at the White House, but the Islamic State threat didn’t appear to be a priority. The White House said they reviewed the “risks posed by growing extremism in Syria and agreed on the need to counter terrorist groups on all sides of the conflict.”

Even after the fall of Mosul on June 10, the U.S. showed little interest in rebel plans. Nour Kholouf, a defected Syrian army general who served as Syrian Opposition Coalition defense minister until recently, said in early July that he’d developed plans to expel the Islamic State in stages from Syrian territory but he couldn’t get an appointment with American officials.

The most detailed strategy proposal of all was produced by one of the most effective of the rebel groups during the summer and given in August to U.S. and other intelligence officials in the Turkish border town of Reyhanli. But it has yet to be presented formally to the rest of the U.S. government.

The 30-page plan, which centers on the use of mobile strike forces, proposes to clear the Islamic State from Syria within 12 to 18 months, rebel officials said. It calls for air, ammunition, logistics and other support, including intelligence.

It would require communications equipment to replace the walkie-talkies now obtained from Best Buy or Radio Shack. And it requires stepped-up support in the rebels’ battle to defend their control over much of Aleppo, Syria’s biggest city, from which they’d draw much of their manpower.

“It lays out city by city the force movements and the different tactics: which cities to enter first, how to enter each city, how to overcome the IS resistance at checkpoints and from suicide bombers,” said one rebel official.

Rebel officials said they hadn’t been able to get an appointment with U.S. defense officials.

One obvious candidate would be U.S. Army Maj. Gen. Michael Nagata, who’s in charge of training and equipping a force of 5,000 Syrian rebels under a $500 million program.

But Nagata has yet to meet a commander of the Free Syrian Army, according to a knowledgeable rebel official. White House spokesman Alistair Baskey said Nagata and his team were “free to meet with members of the moderate Syrian opposition as they deem fit in order to advance their train and equip program.”

Has any such meeting taken place? The U.S. Central Command task force that deals with the new program “is taking a deliberate and careful approach toward direct engagement with members of the Syrian opposition,” said Maj. Tiffany Bowens, a spokeswoman.

The Central Command turned down McClatchy’s request for an interview with Nagata.

Though Rubinstein is one U.S. official who’s always available to meet, rebel officials said they saw him as a dead end. Rubinstein, whom several rebel officials have nicknamed “the complaint box,” listens to all and never responds, they said. “I think they empty it into the trash at the end of every day,” said one rebel official.

In November, after the Nusra Front, the al Qaida affiliate in Syria, pushed rebel forces out of their bases in Idlib province, Rubinstein gave a cool reception to rebel officials, according to three who met with him.

“It was an absolutely horrifying meeting,” said one attendee.

“How did it happen?” this official quoted Rubinstein as asking. “The tone was not one of ‘This is an emergency,’ but more, ‘How did you guys get beat?’ ” the official added.

The official said an aide to the envoy then asked them: “So what’s your strategy now? Is everything lost?” When told that the forces needed to regroup and obtain more resources, “No, that’s not a smart strategy,” the aide was quoted as saying. “Your strategy is to look at what your resources are and plan accordingly.”

With even the most effective fighting groups saying they’re receiving one-tenth the ammunition they need to sustain their two-front battle, the message seemed to be that the rebels should prepare to abandon the fight.

In December, the U.S. government cut salaries for a large part of the rebel forces, McClatchy has reported. The U.S. government has refused to comment.

The State Department turned down McClatchy’s request for an interview with Rubinstein.

“Unfortunately, the current strategy being implemented results in the increase of terrorism,” said Bahra, the businessman who heads the Syrian Opposition Coalition. “Some battalions are not being supplied with anything: food, clothing, fuel, what they need for survival. You are pushing them to be the prey to any extreme terrorist organization that offers assistance.”

He added: “But no one is listening.”

A Top Challenge for the 114th: Immigration

Posted on January 1, 2015January 1, 2015 by Denise Simon

It has been proven that the federal government does not do anything well by choice, by politics or out of cunningness. Immigration is no different. Below is a two track condition that speaks to all of the reasons above. This matter is in our hands to sound alarms for an immediate solution.

If you don’t feel safe, if you worry about the lack of law enforcement response due to the recent siege on police and if you are fretful about compliance with the existing law, below will cause real panic.

96% of Illegal Immigrant Families With Deportation Orders ‘Can’t Be Found’

By: Natalie Johnson

Thousands of illegal immigrants who spilled into border states earlier this year have “disappeared” from government tracking, according to a recent investigation by a Houston TV station.

The wave of unaccompanied children and women illegally crossing into the United States between July and October was so large that Border Patrol had to release thousands on their own recognizance due to lack of detention space.

Now, many of those ordered to be deported “can’t be found,” says investigative reporter Robert Arnold.

The Obama administration has repeatedly reinforced these cases as a top priority, yet the Houston TV station found that only a sliver have been sent home.

After six months of requests, the Executive Office of Immigration Review told Houston’s KPRC that 96 percent of the more than 4,100 families released on recognizance and ordered deported did not show up to court, prompting the government to classify them “in absentia.”

A similar 92 percent of the more than 1,600 unaccompanied children to be deported did not show up.

The Executive Office of Immigration Review usually reports an 11 percent to 15 percent annual “in absentia” rate, far below this year’s jump. Among the thousands who were caught and detained by Border Patrol, the court process remains sluggish. A mere 22 percent of the more than 30,400 families and unaccompanied children caught have received a court decision.

This number could remain low for several months to years, as federal officials sift through the thousands of cases yet to be heard.

But hold on, it continues to get worse.

More than 600 Detained Immigrants Released From ICE Custody Due To Exec. Actions

By: Caroline May

Since the Obama administration altered the nation’s immigration enforcement policies in November with the president’s executive actions, Immigration and Customs Enforcement has released more than 600 detained immigrants from custody.

An ICE official explains to Breitbart News that, following Obama’s announcement, ICE instructed its field offices to ensure that the detention of those immigrants in custody remains in line with the updated enforcement priorities.

“That includes detainees who appear to qualify for Deferred Action for Childhood Arrivals (DACA) or Deferred Action for Parents of Americans and Legal Permanent Residents (DAPA), as well those individuals who, based on their case histories, no longer fall within DHS’ specified enforcement priorities,” the official said in a statement Breitbart News.

Those immigrants in custody who meet one or more of those apparent qualifications “are being released from ICE custody under an order of supervision pending a final determination in their cases.”

“Serious criminal offenders and other individuals who pose a significant threat to public safety remain a priority for ICE detention,” the official added.

Due to the new enforcement priorities, ICE has released 618 detained immigrants as of Dec. 27, the ICE official confirmed.

The Nov. 20 executive actions — in addition to providing legal status and work eligibility to millions of undocumented immigrants — further reworked the types of violations that would fall under the government’s enforcement priorities.

The highest priority for removal under the new guidelines are terrorists, gang members, convicted felons and people apprehended in the act of trying to illegally enter the U.S.

Undocumented immigrants who have not been convicted of a felony, three or more misdemeanors, or have not been issued a final order of removal after Jan.1, 2014 are not considered a priority.

The official added that ICE is also looking at the cases of immigrants who are scheduled for removal but are not detained.

Eric Holder: ‘They’re Too Big to Jail’

Posted on January 1, 2015January 1, 2015 by Denise Simon

Make the stockholders pay….it will fade away.

This is a long but important read/interview. There are key names and revealing nefarious deals. Don’t be fooled that this is not going on again today.

Matt Taibbi and “The $9 Billion Witness” Who Exposed How JPMorgan Chase Helped Wreck the Economy

In holiday special, we feature a Democracy Now! broadcast exclusive interview with Alayne Fleischmann, the whistleblower who helped the Justice Department force JPMorgan Chase to pay one of the largest fines in American history for its role in the financial crisis. She is featured in a Rolling Stone piece by recently returned Matt Taibbi, who also joins us. Fleischmann details how she witnessed “massive criminal securities fraud” in the bank’s mortgage operations. Taibbi’s investigation is headlined “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.”

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We’re talking about “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.”

JUAN GONZÁLEZ: Well, a year ago this month, the Justice Department announced the banking giant JPMorgan Chase would avoid criminal charges by agreeing to pay $13 billion to settle claims that it had routinely overstated the quality of mortgages it was selling to investors. When the toxic mortgage securities started turning bad, investors lost faith in the banking system, and a housing crisis turned into the 2008 financial crisis that led to millions of home foreclosures. New York Attorney General Eric Schneiderman unveiled the settlement last November.

ATTORNEY GENERAL ERIC SCHNEIDERMAN: Not only will Chase have to pay the largest settlement ever levied against a financial institution, but it has admitted in our statement of facts that its own employees, employees of Bear Stearns and employees of Washington Mutual made material misrepresentations to the investing public about a large number of residential mortgage-backed securities that they issued prior to the crash in 2008. This settlement is a major victory in the fight to hold accountable those who were responsible for that crash.

AMY GOODMAN: Soon after the JPMorgan Chase deal was reached, U.S. Attorney General Eric Holder discussed the bank’s misdeeds during an interview with NBC News’ Pete Williams.

ATTORNEY GENERAL ERIC HOLDER: It packaged loans that it knew did not pass its own stated due diligence test. We have a whistleblower who indicated that she expressed concerns about what the strength of these mortgage-backed securities were, and they put them out there to the market and said that they were perfectly fine, when in fact they were not.

PETE WILLIAMS: So, to be clear, you’re saying that JPMorgan’s conduct here contributed to the housing collapse?

ATTORNEY GENERAL ERIC HOLDER: Not only the conduct of JPMorgan, it was the conduct of other banks doing similar kinds of things that led directly to the collapse of our economy in 2008 and in 2009.

JUAN GONZÁLEZ: During that interview, Attorney General Eric Holder mentioned the role of an unnamed whistleblower from JPMorgan Chase who aided the Justice Department’s case against the bank. Well, until this week, that whistleblower, Alayne Fleischmann, a securities lawyer who worked for JPMorgan, had never spoken publicly about what she witnessed inside the bank. That changed yesterday when Rolling Stone magazine published a major new piece by Matt Taibbi headlined “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.”

AMY GOODMAN: In the article, Alayne Fleischmann criticizes not only JPMorgan’s banking practices, but how government regulators at the Holder Justice Department responded to the bank’s lawbreaking. Today, in her first televised interview, Alayne Fleischmann joins us here on Democracy Now!, along with Matt Taibbi, who has closely covered the financial crisis for years. His latest book, Divide: American Injustice in the Age of the Wealth Gap, has just come out in paperback.

And we welcome you both to Democracy Now! for the hour.

MATT TAIBBI: Thanks for having us on.

AMY GOODMAN: So, Alayne Fleischmann, start at the beginning. Why did you decide to come forward? And how did you end up at Chase?

ALAYNE FLEISCHMANN: Sure. For a long time, I was expecting it to come out. I’ve been talking to the government for two-and-a-half years now. And first it went through the SEC. Then it went through the Civil Division of the DOJ. And at some stage after watching all of these major banks have deals that actually the facts get wiped away, I started to feel that if I don’t come forward, there’s a real chance of that happening here, too.

In terms of JPMorgan Chase, I started there in March 2006 at sort of the height of the boom. When I started, everything seemed normal. I didn’t really realize some of the things that were happening in the background. And then things started to change in about May, a couple months after I had been there.

JUAN GONZÁLEZ: Well, what—when you went to work there, what specifically was your job? And if you could walk us through how you began to realize the huge problem that the bank was a part of?

ALAYNE FLEISCHMANN: Sure. I started as what they call a deal manager. Basically, we coordinate between all these different groups when we’re bringing in these loans, that are then going to be sold to investors. I first noticed that there was a problem when they brought in a new person to do our diligence, which is just the review of the loans themselves to make sure they’re of good quality. As soon as he came in, we suddenly—this wall sort of came down between myself and the group that was doing this review, and you couldn’t get information that you would normally get. On top of that, there was immediately a sort of a no-email policy. He wouldn’t send emails, and we weren’t allowed to send him emails. He would actually come out and yell at you if you sent him an email.

AMY GOODMAN: What was the reason?

ALAYNE FLEISCHMANN: It was never given, which was extremely worrisome, because normally the reason why you have a compliance and diligence department is to actually have written policies about what you’re doing, to be able to explain to people how you’re making your decisions. So it’s exactly the opposite of what you would normally expect.

JUAN GONZÁLEZ: And when you say to review the quality of the loans, if you could—

ALAYNE FLEISCHMANN: Sure, yes.

JUAN GONZÁLEZ: —for people who are not aware—you were, in essence, certifying that these individual loans could be packaged into a group of securities to then be sold to investors in a huge package, right? But you had to go through every individual loan? Was that—

ALAYNE FLEISCHMANN: Yeah, that’s pretty much what happens. It’s really that you’re taking the actual loan files, that was done between the lender and the borrower, and looking at them to make sure everything looks right. Does this person have enough money to pay off their loan? Do they have the sort of history where we think that they’re going to pay this loan? And if we find that they don’t, then we’re actually not supposed to purchase the loans, and certainly shouldn’t be selling them to other investors without at least telling them there’s something wrong with them.

AMY GOODMAN: And so, what was the smoking gun for you?

ALAYNE FLEISCHMANN: Everything about—what really started happening—in particular, it became apparent in October—was that sometimes we had deals coming in where even though I wasn’t even the person looking at the loans, you could tell from where I was that something was wrong with them. The GreenPoint deal, which is what Matt talks about in his article, even when the loans came in, they were very, very old, which usually you try to actually pull these loans and sell them within two to three months—these loans were going back to close to the beginning of the year. If you work in the industry, you know immediately what that means, is either they couldn’t sell them, because the buyers were telling them they weren’t any good, or, even worse, they’d been sold and then had missed a bunch of payments, so they had actually been sold back to the originator. Any of those loans you wouldn’t normally sell to investors as regular loans.

JUAN GONZÁLEZ: Now, Matt, you’ve referred in your article to these loans as basically selling old, beat-up used cars—

MATT TAIBBI: Right.

JUAN GONZÁLEZ: —as if they were new. Could you explain that?

MATT TAIBBI: Yeah, that’s exactly what Alayne is talking about. Essentially, what the bank was doing was they—you know, there are companies out there, these mortgage lenders, like a company that might be familiar to people is, like, Countrywide—in this case, it was an originator called GreenPoint—they would go out into neighborhoods, and during this boom period, they were giving mortgages to anybody and everybody with a pulse, essentially. They were especially low-income neighborhoods. They were offering these very advantageous loans to people, whether they could afford the houses or not. They were buying huge masses of these loans. And then they were—

JUAN GONZÁLEZ: They were called like “liar’s loans,” or stated income where no one even checked whether the person had the income to actually pay it off.

MATT TAIBBI: That’s exactly right. That’s exactly right. That was the verbiage, “liar’s loans.” The FBI warned that there was going to be an epidemic of these liar’s loans way back in 2004. The industry ignored these warnings. The government ignored these warnings. And there was this huge influx of these stated income loans, where people could just say that they made an enormous amount of money, and nobody would check.

So the bank buys all these loans, and then what they were doing is essentially throwing them into big pools, making hamburger out of them, and then selling that hamburger to pension funds, insurance companies, hedge funds, all kinds of investors. Typically ordinary people were the people on the other end buying this stuff. They were investing in these securities, and often they didn’t even know it.

What Alayne was involved with was making sure that these loans were of good quality, so that pension funds, when they bought these securities, weren’t buying something that was going to blow up on them a year later. And what she found was that they were buying loans that were of very dubious quality, that were extremely risky, and that should not have been made into that hamburger.

AMY GOODMAN: Journalist Matt Taibbi and JPMorgan Chase whistleblower Alayne Fleischmann. We interviewed them in November”:http://www.democracynow.org/2014/11/7/matt_taibbi_and_bank_whistleblower_on, when Matt Taibbi’s article, “The $9 Billion Witness,” came out in Rolling Stone. Stay tuned for part two of our interview.

[break]

AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González. In November, Juan and I interviewed JPMorgan Chase whistleblower Alayne Fleischmann and reporter Matt Taibbi. His piece in Rolling Stone is headlined “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.” It was the first time Alayne Fleischmann appeared on television. Attorney General Eric Holder appeared on NBC News just after the JPMorgan Chase settlement was reached over a year ago, in November of 2013. He was questioned by NBC’s Pete Williams.

PETE WILLIAMS: What about those who say, “Well, the message here is, if you do wrong, you just pay for it and move along”?

ATTORNEY GENERAL ERIC HOLDER: This was not simply something that JPMorgan simply signed a check and smilingly said, “This is a good deal for us.” This inflicts pain on that institution.

PETE WILLIAMS: But is this, in essence, a sort of template? We can expect to see other settlements now?

ATTORNEY GENERAL ERIC HOLDER: I certainly think that the way in which this case has been settled is a template of what we can expect, both in terms of getting maximum amounts of money and then using that money so that we get it to people who suffer the greatest amount—that is, either investors or homeowners.

AMY GOODMAN: That’s Attorney General Eric Holder. Alayne Fleischmann, let’s take it back a step. When you started to alert your colleagues and your supervisors at JPMorgan Chase, what did they say?

ALAYNE FLEISCHMANN: Well, what happened was the transaction, at one point, just stopped. It turned out that 40 percent of the loans in this deal had problems with them. When we tried raising this issue with our superiors, what actually happened is they just started yelling at the diligence managers who were clearing the loans, sort of yelling, berating them, making them do reports over and over again. And it became clear that, although they wouldn’t say it, it was going to be like that until they would clear the loans. So what actually happened is these loans started being cleared, but basically just by sort of the brute force of what was going on there.

I raised it first with a managing director and an executive director, and couldn’t get any response. After that, I decided the best possibility would be to write a letter to another managing director that actually laid out everything I was seeing. I used the GreenPoint deal as an example, which is why the letter specifically says exactly who was doing what all over this deal. But it also lays out general problems in our diligence that the salespeople were being involved, which isn’t normal, and that there seemed to be a lot of pressure on diligence managers to clear loans that shouldn’t have been purchased or sold.

JUAN GONZÁLEZ: And the importance of putting it down in a—

ALAYNE FLEISCHMANN: Yeah.

JUAN GONZÁLEZ: —putting all the facts down in a letter, what that meant inside the company?

ALAYNE FLEISCHMANN: Yeah. Well, what it used to be is that the way that you could stop these things from happening was, if you write a memo that lays out what’s happening, the management won’t go forward, because they realize that if they do, there’s going to be this evidence of what happened.

JUAN GONZÁLEZ: There’s going to be a paper trail of the—mm-hmm.

ALAYNE FLEISCHMANN: Yeah. The big worry with these settlements and the way they’re being done—and I’m not the only whistleblower in these cases—is that you have these emails and these memos, but nothing happens. A fine gets paid, and then all of the facts and who did what gets washed away. So, as a whistleblower, you’re thinking, “I did all of this, and the DOJ has all of this, but for some reason they’re not going forward on it.”

AMY GOODMAN: So, what happened when you went outside the company? How did you go outside?

ALAYNE FLEISCHMANN: Well, one issue I had is that although I warned not to securitize the loans, there was no way—I was blocked off, especially after I had raised complaints, from being able to see any of the data or the diligence process, which right there shows that something was wrong. So, after I left JPMorgan, I actually had no idea, for a full four years, that the loans had been securitized. On one hand, I was worried they would, but I really thought no one would ever actually securitize those loans.

MATT TAIBBI: This is an important distinction—

ALAYNE FLEISCHMANN: Yeah.

MATT TAIBBI: —because Alayne had no idea that a crime had been committed until she had concrete knowledge that the loans had actually been resold to somebody else. They’re certainly allowed to buy as many bad loans and as many risky mortgages as they want. It’s not until they go to some investor and represent to them that these are, you know, AAA-rated securities or whatever, or highly rated securities, that they’re actually committing fraud. And so, she had no way of knowing that. Even after she was laid off from the company, she had no knowledge of what actually happened. So she couldn’t actually report the crime yet, because she only saw one half of the deal.

JUAN GONZÁLEZ: And you were laid off in—at the beginning of 2008, right?

ALAYNE FLEISCHMANN: Eight, yeah.

JUAN GONZÁLEZ: Yeah, actually before the crash. Already there was turmoil—

ALAYNE FLEISCHMANN: Yeah.

JUAN GONZÁLEZ: —in the home loan market, but there was not—the crash had not happened.

ALAYNE FLEISCHMANN: Right.

JUAN GONZÁLEZ: And so that the bank, when Jamie Dimon and other leaders later said that they had no realization that the market was tanking as fast as it could, at least your memos were certainly indicating to them that there were major problems in their portfolios.

MATT TAIBBI: Well, what’s funny is they actually said two completely opposite things. There was an article in Fortune magazine later in 2008 in which they report that Jamie Dimon, the CEO of the company, knew as early as October of 2006 that the industry was rife with underwriting problems, all the things that Alayne is talking about. The company was aware of this, and there are quotes in which the CEO is telling his subordinates, “We’ve got to get out of these investments, because this whole thing can go up in smoke.” And then, meanwhile, so Chase is selling its own investments in these kinds of mortgages, but they’re taking these same mortgages and selling them to investors and not telling them that they have these concerns. Later, when they testify in front of the Financial Crisis Inquiry Commission in 2010, Dimon said exactly the opposite. He said, essentially, “Well, we had no idea that these things were happening. We got caught up in the fact that housing prices were just going continually upward.”

AMY GOODMAN: So, talk about the settlement. What happened next?

MATT TAIBBI: Well, so, the settlement happened in—I guess, a year ago about this month. And what’s interesting about it is, Alayne, by that point, had already talked to civil investigators in the U.S. Attorney’s Office in Sacramento, and she talked to some very talented lawyers there who seemed very anxious to press this case. And they were about to release a very detailed civil complaint against Chase in September of last year, and just hours before that press conference, when they were going to announce that, reportedly, Jamie Dimon, again, the CEO of Chase, called up the assistant attorney general, asked to renegotiate, and they canceled the press conference, and they went back into negotiations. And a few months later, they had a settlement in which they paid a lot of money, but none of the facts came out in that.

AMY GOODMAN: Just like if you were in trouble, you could make that call.

MATT TAIBBI: Yeah, I could call up—yeah, I could call up the mayor or the president and have a court case go away. I mean, that’s exactly what happened in this case, is they basically put in a phone call to the very top of the criminal justice system.

JUAN GONZÁLEZ: And what happened to your contacts with the Justice Department, if you could talk about that, that process? How detailed did they want to get into the information that you had?

ALAYNE FLEISCHMANN: Well, my first contact, it was actually after four years. I was working in Calgary, and I got a call from the SEC.

AMY GOODMAN: Because you come from Canada.

ALAYNE FLEISCHMANN: Yeah. He introduced himself as an investigator from the Enforcement Division. And as I sort of paused for a minute, jokingly, he then said, “You weren’t expecting to hear from me, were you?” And after that, they set up my first interview with the SEC, which was very short. It was only maybe an hour, hour and a half. They were only interested in one deal. And even though I kept bringing up GreenPoint and they had the letter that I had written, they weren’t actually interested in that. And the SEC settlement was based on that other deal.

And then, it wasn’t until later, about December 2012, that I first met with the DOJ investigators. And it was very clear that this was going to be very different. As soon as they walked in, you could tell they knew these securities up and down, and they were really anxious to go forward with it and felt very comfortable going forward with the case. So, in that meeting, it was a very detailed meeting, sort of hours of going through how the process works and what happened. And then I had an actual deposition in about May of 2013, where they nailed down a lot more of that.

And you could see at that stage—first, I got to find out for the first time ever how many of these loans had actually gone into—had been sold to investors in sort of one pool, and it was hundreds of millions of dollars’ worth of them, with nothing actually disclosed about the problems with the loan. And then, second, I got to really see what their case was, and they clearly realized they had an incredible case there.

AMY GOODMAN: Testifying before the Senate Judiciary Committee in 2013, Attorney General Eric Holder suggested some banks are “too big to jail.”

ATTORNEY GENERAL ERIC HOLDER: I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large. Again, I’m not talking about HSBC; this is just a more general comment. I think it has an inhibiting influence—impact on our ability to bring resolutions that I think would be more appropriate.

AMY GOODMAN: Matt Taibbi, respond to what Attorney General Eric Holder has testified.

MATT TAIBBI: Well, again, I mean, it’s a crazy thing when the leading law enforcement official in the nation comes out and says, “Well, some companies are just so big that we can’t prosecute them no matter what they do.” In that case, he was speaking—he was testifying in the wake of a settlement the government had entered into with HSBC, which is the biggest bank in Europe and the biggest bank in Great Britain, which had admitted to laundering over $800 million for a pair of Central and South American drug cartels. And if you can’t send someone to jail for laundering $800 million of drug money, you know, because the company is too big, clearly something is very seriously wrong. But yet, this became sort of the unofficial official policy of the Justice Department. And this greatly affected the way they dealt with companies like JPMorgan Chase, like Citigroup, like Bank of America. They tried to find a way to effect some kind of resolution that didn’t involve criminal charges, didn’t involve penalties to individuals, and also didn’t put the facts of any of what they had actually done out into the public.

JUAN GONZÁLEZ: And in that vein, this is—you know, it’s the old Monopoly board game all over again, get out of jail free. Instead of paying $200 to get out of jail, you pay $2 billion to get out of jail. But the amounts of money that these governments are getting as a result of this—I mean, I just checked with the New York state comptroller. New York state alone, this year, is getting out of its bank settlements with Wall Street a windfall of $5 billion. That’s just New York state. Other states are getting their share, and of course the federal government is getting huge infusions. And so, they suddenly have all this cash. And then they also had this other stuff that you’ve talked about, which is consumer relief—

MATT TAIBBI: Right.

JUAN GONZÁLEZ: —apportions. So, the governments actually get cash settlements, but then they supposedly negotiate additional money for the citizens, a consumer relief. Could you talk about that?

MATT TAIBBI: Well, OK, there’s a couple of things here. First of all, these settlements, they always come up with a big number, but the number is always actually—when you actually look at the accounting, it turns out to be smaller than they announce. In the case of the Chase settlement, the number they announced was $13 billion. But there’s a couple of really important factors here. One is that $7 billion of that—it’s $7 billion, right?—was tax-deductible, which means that all of us, American citizens, anybody who pays taxes, actually picked up the check for about $2.4 billion worth of the settlement. So we paid part of that settlement, which is crazy. I mean, the ordinary person, if we get a speeding ticket, we can’t deduct that when we go to pay our taxes. But these people cratered the world economy, and they get to write a tax deduction for it.

Four billion dollars of the settlement was what they call consumer relief. And what this really boils down to, I mean, there’s some loan forgiveness, where they’re allowing people to pay less principal towards their home loans, but mostly it comes down to letting people have a little extra time to pay off their payments. And it’s not always the bank that is actually doing that; it’s often the investors in those loans who are actually giving the relief. So, it’s not really the bank paying $4 billion. It’s just a number.

AMY GOODMAN: I want to turn to President Obama speaking in September, when Attorney General Eric Holder announced that he would resign.

PRESIDENT BARACK OBAMA: He’s helped safeguard our markets from manipulation and consumers from financial fraud. Since 2009, the Justice Department has brought more than 60 cases against financial institutions and won some of the largest settlements in history for practices related to the financial crisis, recovering $85 billion, much of it returned to ordinary Americans who were badly hurt.

AMY GOODMAN: Matt Taibbi, your response?

MATT TAIBBI: Well, I mean, the first thing I would say is, OK, they brought a bunch of settlements and they collected a bunch of money, but there isn’t a single individual, in this entire tableau, who is actually individually paying any kind of penalty for any of these misdeeds. All of that money came out of the pockets of shareholders. No executives had to pay a fine. No executives had to do a single day in jail. There were not even charges filed against any individuals. And—

AMY GOODMAN: What was the actual crime you feel Jamie Dimon committed that you feel he should be in jail for?

MATT TAIBBI: Well, I can’t stand here and tell you that Jamie Dimon committed a crime. But certainly there are people in these companies, and in cases like Alayne’s case, who would be targets of criminal fraud prosecutions, and probably at a lower level than Jamie Dimon. I think it would be hard to prove, although who knows? Because they didn’t try. In a normal drug case, what you would do is you would take everybody who was guilty, and you would try to roll them up the chain and see how far you could go. And that’s exactly what they did not do in this case. They didn’t aggressively go after everybody. They didn’t follow every lead. Instead, they just sort of went into a back room, decided on a number and made the whole thing go away. And yes, that is a kind of justice, it’s a kind of resolution, but I think it’s insufficient.

JUAN GONZÁLEZ: In fact, as you note in your article, after the settlement agreement with JPMorgan Chase, the stock of the company went up dramatically, the stock price of the company went up dramatically, and Jamie Dimon ended up getting a huge raise from his board of directors.

MATT TAIBBI: Yeah, yeah, in the first weeks after the settlement was announced, the market capitalization of JPMorgan Chase went up 6 percent, which translated into about $12 billion worth of value. So that’s most of your settlement right there. Actually, it’s more than almost—more than the entire settlement, if you look at it as a $9 billion settlement. And yes, Jamie Dimon, just a few weeks after being dinged for the largest regulatory fine in the history of capitalism, got a 74 percent raise by the board of—by the Chase board.

AMY GOODMAN: Well, earlier this year, Democratic Senator Elizabeth Warren criticized the size of Jamie Dimon’s salary.

SEN. ELIZABETH WARREN: In 2013 alone, JPMorgan spent nearly $17 billion to settle claims with the federal government, claims relating to its sale of fraudulent mortgage-backed securities, its illegal foreclosure practices like robo-signing, its manipulation of energy markets in California and the Midwest, and its handling of the disastrous London Whale trade. And at the end of the year, JPMorgan gave its CEO, Jamie Dimon, a 75 percent raise, bringing his total compensation to $20 million. Now, you might think that presiding over activities that resulted in $17 billion in payouts for illegal conduct would hurt your case for a fat pay bump, but according to The New York Times, members of the JPMorgan board of directors thought that Jamie Dimon earned the raise, in part—and I’m quoting here—”by acting as chief negotiator as JPMorgan worked out a string of banner government settlements.”

AMY GOODMAN: That was Senator Elizabeth Warren. I’d like Alayne Fleischmann, the whistleblower within JPMorgan Chase, to respond. I mean, do you think part of what you exposed to the government earned Jamie Dimon this increase of 75 percent?

ALAYNE FLEISCHMANN: And I suppose it—the question is whether you’re concerned about making money or whether there’s criminal activity going on at the bank. There’s actually an excellent website called JPMadoff.com with some lawyers who were involved in the Madoff case, where they’ve been tracking, actually, all of JPMorgan’s fines for fraud and illegal activity. And they’re actually at $29 billion now in the last four years alone. So, the question that needs to be asked is: How is it that you can be a CEO, over $29 billion worth of fines, and get a raise? It also clearly shows that there’s no deterrent to all of these fines. It’s just happening over and over again. And if there aren’t any individuals held accountable, there’s no reason for any of them to actually stop doing these very serious crimes.

JUAN GONZÁLEZ: Well, and not only that, if all of those fines are continually occurring—

ALAYNE FLEISCHMANN: Yeah.

JUAN GONZÁLEZ: —where are the crimes that are the basis of being fined?

ALAYNE FLEISCHMANN: Well, yeah, and so that’s one of the really important points, too, is there’s very little difference between civil securities fraud and criminal securities fraud, or even how you can do this as a wire fraud case. Once you have that strong of a civil fraud case, the only real difference is that you need a little more intent level—they had to have really intentionally been doing the fraud—and you have to prove it to a higher standard. You know, you have to show beyond a reasonable doubt that this is what they were doing. But when you look at these cases, these are some of the easiest white-collar crime cases that you’re ever going to see.

And one of the things that I think has been sold to the public is, well, these are really complex and difficult, or we don’t really know who did what. First, in my case, and what I’ve seen in these other cases, there are all sorts of documents that show exactly who was making the decisions and who knew what. The idea that they’re too complex, you know, these securities themselves that are sold to investors are complex, but the fact that the investors were lied to about the quality of the loans, that’s actually really easy. And the fact that obviously if you have people who can’t afford their loans, there’s going to be no money coming out of these loans, is also something that’s not a difficult thing to understand.

AMY GOODMAN: Alayne Fleischmann, why didn’t you go to the press back then? And what made you decide to do it now?

ALAYNE FLEISCHMANN: Yeah, I, for a long time, believed that this come out, that the government would do their investigation and come forward with it. It’s actually taken a really long time for me, because for me it’s a little bit of an incredible thing to believe. But after watching all of these cases over and over again, at some stage I’m in the position where if I keep silent and the statute of limitation runs, or they do one of these agreements where they whitewash everything, then it’s too late, which is what’s happened over and over again so far. So, I’m trying to change the pattern and come out first, so that they have to either follow these properly, the way they would for any other criminal defendant, or explain why they’re not doing it.

JUAN GONZÁLEZ: And, Matt Taibbi, the reality that all—despite all the claims of the Obama administration that they’ve pursued all these civil cases, that they never really went after the people who practically wrecked the world economy, and how that relates into this election result that we just had, where obviously Americans across the board, from Democrats to Republicans to Independents, are still furious about their economic situation and the failure of holding these people accountable?

MATT TAIBBI: Yeah, I think it’s hard not to make a connection between the total lack of enthusiasm that we saw for the Democratic Party this past week and, for instance, their behavior in pushing investigations of the financial services community. And we saw it with the Occupy protests. I talk to people on Wall Street all the time. I mean, all my sources come from Wall Street. And they all say the same thing, that Barack Obama had an incredible opportunity in late 2008, just after he took office. With his communication skills, he could have gone to the American people and explained to them exactly what happened and said, “This is why the economy is bad. This is why you’re losing your job. There was massive criminal activity. It’s not just an accident.” And then he could have gone and put a few people in jail and really put some teeth behind those words. Instead, they swept it all under the rug. And people, even if they don’t completely understand what happened, they sense that nothing was done. And I think it’s important to understand that.

AMY GOODMAN: I presume, Alayne Fleischmann, that you had a confidentiality agreement when you left JPMorgan Chase. Are you violating that? What made you decide to take the risk?

ALAYNE FLEISCHMANN: Yeah, and there are different arguments about whether I am or am not violating it, because of the criminal nature of what I’m bringing forward. For me, at some stage, it’s just sometimes you’re involved in something that’s bigger than you personally. Even right now, there are still all sorts of suits out there by private investors, retirement funds, pension plans, trying to get their money back. And they don’t—in a lot of cases, they don’t know that I have information. So I actually now have, in my email, contacts coming in, asking for help from me, so that they can get this money that was really stolen from their investors, these retirees, back to those people. So, for me, that’s more important than anything that’s going to happen to me.

AMY GOODMAN: Are you concerned about repercussions?

ALAYNE FLEISCHMANN: At some stage, I think I decided that this was more important. And at the end of the day, I’ll be OK. You know, I’ll figure something out, and I’ll get through this. But I think we’re at a stage where unless a lot of people start coming forward and say, “We care about this. We now know what’s happening, and we want someone to do something about it,” that this is all just going to pass into history.

AMY GOODMAN: The government contacted you again this summer?

ALAYNE FLEISCHMANN: Yeah, in August they contacted me.

AMY GOODMAN: That call that they made.

ALAYNE FLEISCHMANN: Yeah.

AMY GOODMAN: And do you feel this can reopen, this information, these cases?

ALAYNE FLEISCHMANN: I did meet with them, and I was happy to see that it was an enthusiastic group. The concern I have is that what we’ve seen is that even when they’re really strong cases—you look at the JPMorgan-Madoff case, HSBC—they still, no matter how strong it is, they just get hushed away. So, yeah.

MATT TAIBBI: And this is an important distinction, too, is that it’s often not the line investigators who are the problem. The people who actually work these cases, the career prosecutors who are doing this digging, oftentimes they’re very talented and aggressive lawyers who really know what they’re doing. The problem is, the political wing of the Justice Department can take those cases and do whatever they want with them. And we saw, in Alayne’s case and in many other cases, that they take these excellent investigations, and then they just turn them into these slap-on-the-wrist settlements. And that’s what she’s worried about, I think.

JUAN GONZÁLEZ: I just wanted to close by asking you about how you would judge the tenure of Eric Holder in—now, obviously, that he’s going to be leaving—in terms of his particular role in going after these banks, and just this whole idea of bankers being able to call directly to the Justice Department to negotiate their deals and stop prosecutions at the lower levels.

MATT TAIBBI: Well, you know, it’s funny. For years now, I’ve been covering a lot of this stuff. And I’ve spoken to a lot of people in law enforcement. And there are really two types of people that I talk to who are prosecutors. One is the kind of old-school law enforcement type that want to get the bad guy at all costs, and they’re really career civil servants who just want to do their jobs and want to see justice happen. And then there’s this new kind of person who’s appearing in government now, who comes out of the corporate defense sector. These are people who grew up as corporate lawyers defending companies like Chase and Bank of America. And that’s who Eric Holder is, very pointedly. He spent a long time at a company called Covington & Burling. And this type of lawyer, this type of law enforcement official, is much more interested in coming up with a settlement that everybody feels good about when they walk out of the room, as opposed to the old-school kind of justice where the bad guy gets his or her comeuppance in the end. And I think his tenure was very representative of a big sea change in the way we do white-collar crime in this country.

AMY GOODMAN: That was Rolling Stone reporter Matt Taibbi and JPMorgan Chase whistleblower Alayne Fleischmann. She’s featured in Matt Taibbi’s article, “The $9 Billion Witness.” They appeared on Democracy Now! in November. It was Alayne Fleischmann’s first-ever television interview. When we come back, we speak with Matt Taibbi about his book, The Divide: American Injustice in the Age of the Wealth Gap. This is Democracy Now! We’ll be back in a minute.

$125 Billion Bomb to Drop

Posted on December 31, 2014December 31, 2014 by Denise Simon

Earlier this year, student loans and debts were being extended. For 2015 and beyond, the program success looks grim.

WASHINGTON — President Obama signed an executive order on Monday intended to lessen the college loan burden on nearly five million younger Americans by capping repayments at 10 percent of the borrowers’ monthly income. If you want to know the scale of student debt across the globe in countries like Sweden then you should go to https://studieskuld.se

Joined by indebted graduates in the East Room of the White House, Mr. Obama said the spiraling cost of higher education had put “too big a debt load on too many people.”

“These rising costs have left middle-class families feeling trapped,” he said. “You’ve got middle-class families who can’t build up enough savings, don’t qualify for support, feel like nobody’s looking out for them.”

Mr. Obama drew on his own financial history in promoting the measure. He told the audience that he and his wife, Michelle, paid off their law school loans just 10 years ago, after they had already begun saving for their daughters’ college educations.

The Hidden Student-Debt Bomb

Under the radar, maneuvers to avoid paying off loans are surging. ‘Forbearance’ has hit the $125 billion mark.

By Jason Delisle

It is time to re-evaluate how we measure the performance of student-loan programs—particularly whether borrowers are or are not meeting their obligations. The traditional measures of nonrepayment—delinquencies and defaults—might be fine for most types of loans, but not for outstanding student loans, nearly all of which are held or backed by the federal government. Lawmakers have provided students with options that let them punt on repayment without triggering delinquency or default. Lately, students have been availing themselves of those options at rising levels.

The forbearance benefit, for example, lets borrowers postpone payments for up to three years. By law, loan-servicing companies have a lot of discretion to grant forbearances, and getting one usually takes only a phone call on the part of the borrower. Some borrowers might have to complete a simple form and meet a payment-to-income test. But overall it is the easiest and fastest way for a borrower to suspend student-loan payments.

Forbearance can also cure the delinquency status on a loan, at least on paper. A borrower who misses a few payments, and is likely to miss more, will be informed by his loan-servicing company that he can obtain a forbearance right away. Payments cease and the loan is put in good standing. When the loan finally comes due, however, the monthly payment will be higher than the payment the borrower originally found too difficult to pay, thanks to accruing interest.

Forbearances are thus a double-edged sword. They help borrowers keep their loans in good standing, but they also mean borrowers aren’t making progress on paying down their debts—just the opposite. Enrollments in forbearances are really a negative indicator in the federal loan program, much like delinquency and default.

That is why the latest figures from the Education Department that show steady increases in forbearances are so alarming. Loan balances in forbearance were about 12.5% of those in repayment in 2006. In 2013, they were 13.3%. Today they are 16%, or $125 billion of the $778 billion in repayment.

If student-loan defaults exhibited that kind of growth it would make national headlines. Forbearance growth goes unmentioned, yet it looks a lot like a default given that the borrower isn’t making payments.

Another option is income-based repayment plans, which allow borrowers to suspend or reduce payments on their loans and will also cure a severely delinquent loan. The mechanics of these plans are a little complicated, but for borrowers with incomes below 150% of poverty, payments are zero. Borrowers who earn more than that make payments between 1% and 15% of their incomes. After 10, 20 or 25 years, depending on the program, the government forgives any outstanding balances and taxpayers eat the loss.

For many borrowers, income-based repayment works like long-term forbearance, or better if their debt is forgiven. Borrowers might have their payments suspended, or lowered to the point that they will never fully repay the loan before the outstanding balance is forgiven. In some cases the payments may not even cover the interest that accrues each month. The Obama administration estimated in 2012 that the average amount forgiven in income-based repayment plans will be $41,000 per borrower.

The Obama administration greatly expanded benefits under income-based repayment plans in recent years and has launched efforts to promote them. Enrollments are growing rapidly and now stand at an all-time high. Some 24% of Federal Direct Loan Program balances ($115 billion) that have come due are enrolled in the two most generous plans, Income-Based Repayment and Pay As You Earn. That is up from 14% a little more than a year ago. The number of borrowers using the plans has doubled over that time, to 2.2 million.

Despite more borrowers taking advantage of benefits to suspend and lower their payments, the share of borrowers in default is still trending upward. It now stands at 19.8% of borrowers whose loans have come due—some 7.1 million borrowers with $103 billion in outstanding balances. That’s the highest share since the Education Department began making the statistic available in 2013, and given other trends, it probably is a record high.

These trends are troubling because the U.S. economy has been improving for some time. Yet fewer and fewer borrowers are repaying their federal student loans. For those who do make payments, more of them are paying too little to retire the debt they took on.

This all makes sense, however, when you realize that the student-loan program has been designed to achieve two political goals: Loans should be available to any student, at any school, pursuing any credential; and student debt is bad and burdensome, so it should be easy for borrowers not to repay.

Based on these goals, the program is performing quite well for students and the institutions whose coffers swell under such loose lending standards. Loan issuance has grown rapidly in recent years while repayment rates have declined steadily. From the perspective of the taxpayers who must ultimately finance these liabilities, however, the federal student-loan program is performing badly and steadily getting worse. There are many reputable companies which can help you get out of student loan default. So if you need help, contact a company like Loan Forgiveness.

Obama is Selective on Human Rights Violators

Posted on December 31, 2014December 31, 2014 by Denise Simon

If Barack Obama was really true to his words, why not take on North Korea. The DPRK has operated gulags for 50 years where atrocities are beyond description and on par with Daesh (Islamic State).

‘Starvation food rations, forced labor, routine beatings, systematic torture and executions put the North Korean camps in the ranks of history’s worst prisons for political offenders. Originally modeled on the Soviet gulag, the North Korean camps have developed distinctive features of their own for which no terminology has yet been devised. Particularly horrifying is the incarceration of entire families, including children and grandparents, in order to isolate them from society and punish them because of their relationship to family members accused of political crimes. Rooting out “class enemies for three generations” was specifically ordered by Kim Il-sung, which at times has led to comparisons with Nazi death camps. An equally horrifying practice distinctive to North Korea is forced abortion regularly carried out and in the most brutal manner on women prisoners who illegally crossed the border into China, became pregnant by Chinese men and were forcibly repatriated to North Korea. In cases where the pregnancy is too advanced, guards beat the infants to death or bury them alive after they are born. Still another point of departure in North Korea is that all the residents of the kwan-li-so are denied any correspondence, visits or life saving parcels from family and friends. They are totally incommunicado.’

• Ahn Myong-chol, a former guard, reported that all three of the kwan-li-so at which he worked had isolated detention facilities in which many prisoners died from mistreatment, and that at Kwan-li-so No. 22 there were so many deaths by beatings from guards that the guards were told to be less violent.

• Former Prisoner # 37 was beaten at the Onsong An-jeon-bu police facility during his six month interrogation prior to being tried and sentenced to Chongo-ri kyo-hwa-so for smuggling food back and forth from China.

• Seo Jin was beaten so badly with wooden staves at the Onsong Bo-wi-bu interrogation center, and again at the Musan Bo-wi-bu interrogation center, that she could hardly walk. After transfer to the Musan An-jeon-bu detention facility, she was beaten by younger women guards when she objected to her third vaginal examination. And she was kicked on the legs and beaten on the back by guards at the Oro Kyo-yang-so penitentiary No. 55 when she did not keep up the required pace in her prison labor.

• Former Prisoner # 31 was whipped with a belt by male guards at the Onsong Bo-wi-bu interrogation facility, and severely beaten on her legs and back when, because of severe malnutrition, she was unable to maintain the pace of her prison labor.

• Bang Mi-sun was severely beaten on her legs with a wooden stave because she could not keep up with the work pace at the Musan An-jeon-burun ro-dong-dan-ryeon-dae mobile labor brigade owing to injuries she suffered while trafficked in China prior to her repatriation. Infection from this beating left her partially crippled. At the Musan An-jeon-bu pre-trial detention ku-ryu-jang, she and other prisoners were required to sit motionless for days, with fellow detainees forced to beat other detainees who moved.

For more testimony, documents and photos click here for the report.

Ed Schroeder’s Military Intelligence Report: North Korean Defector Details ‘Human Experiments’

by ****

Im Cheon-yong says that witnessing mentally and physically handicapped children being used in chemical weapons tests carried out by the North Korean military was the last straw.

An officer in North Korea’s special forces, Im had reservations about the nation in which he was living, and the regime that he served to the best of his abilities, but the “special training” he was required to undergo at a military academy in North Pyongan Province for the regime’s elite troops helped to convince him that he needed to defect.

“If you want to graduate from this academy, you need to learn how to confuse the enemy without revealing your own forces, how to carry out assassinations, how to use chemical weapons and so on,” he said.

‘The regime does this because it insists to their people that North Korea is heaven on Earth,’ says Shigemura

“And then we have what they call ‘field learning’. For the biological and chemical warfare tests, we needed ‘objects’,” he added. “At first, they used the chemical agents on mice and showed us how they died. Then we watched the instructors carrying out the tests on humans to show us how a person dies. I saw it with my own eyes,” Im claimed.

He said he got repulsed by what he had witnessed and managed to get over the border into China and arrived in South Korea in the mid 1990s. Now 50 years old, Im is a prominent advocate of the regime change in Pyongyang and president of both the Soldiers’ Alliance for Free North Korea and The Fellowship Foundation for Freedom.

Abuse of citizens

Some North Korea experts say that Im’s experiences tally with other defectors’ tales of abuse of citizens of the world’s most isolated state. Some of that testimony was shared with the United Nations’ Commission of Inquiry before it issued its damning report on the state of human rights in the North in February.

“There are too many of these stories now for them not to be true,” Toshimitsu Shigemura, a professor at Tokyo’s Waseda University, and an authority on North Korean affairs, told DW. “There were reports in the past but it was difficult to confirm them, but the testimony that is emerging now is consistent and from numerous sources,” he added.

“Anyone who goes to Pyongyang will notice that there are no disabled people about at all,” he said. “We now know that they are being taken away as children and incarcerated in special camps. The regime does this because it insists to their people that North Korea is heaven on Earth, and there can be no disabled people in paradise,” he said.

But Kim Myong-chol, executive director of The Centre for North Korea-US Peace, dismisses Im’s claims.

“It is the same nonsense,” he told DW. “This guy – and plenty of others like him – are just looking to make money by attracting the attention of South Korea and the US. That is why they make these lies up. People like him know nothing about the real North Korea and all they care about is making money from their lies.”

Experiments on humans

‘The authorities buy disabled children from their parents for a few kilograms of rice,’ claims Im

According to Im, experiments on humans date back to the late 1960s and one of the first facilities used for chemical and biological weapons tests on humans was constructed on the military controlled island of Mayang-do, just off the east coast port of Sinpo, which is also North Korea’s most important submarine base. A second facility was subsequently constructed on an island off the west coast of the peninsula, while a third is in operation alongside a political prison camp outside the city of Hyanghari, the defector claims.

“They use anthrax bacterium as well as 40 different types of chemical weapons that the regime has developed itself,” Im said. “Through these experiments, they know the effects of the weapons and the amounts to be used.”

To give the regime’s actions legitimacy, children born with mental or physical disabilities are not taken away by force – although, in reality, few citizens of North Korea have the right to resist the authorities’ will, says Im.

“They want to do it ‘legally’ and they don’t want to lose the support of the people, so they buy disabled children from their parents for a few kilograms of rice,” he said. “The officials say they will take care of the children.”