Category Archives: Energy Agenda

The Secret Back Channels to Putin

Posted on by

Add sanctions. Remove sanctions. Amend sanctions. Call the old-timers, try anything. Why? Putin is on the rocks financially but remains defiant. Why is the White House attempting to reset relations again? Could it be that Russia has more clandestine missions planned that includes the Baltic States or Europe?

(Reuters) – Russian President Vladimir Putin said in a televised New Year’s address on Wednesday that the “return home” of Ukraine’s Crimea peninsula to Moscow’s control would forever remain an important chapter in Russia’s history.

Putin is facing the biggest challenge of his 15-year rule as the Russian economy is sliding sharply into recession, hurt by Western sanctions over the Ukraine crisis and falling prices for oil, Russia’s chief export.

***

Inside Obama’s Secret Outreach to Russia

By

President Barack Obama’s administration has been working behind the scenes for months to forge a new working relationship with Russia, despite the fact that Russian President Vladimir Putin has shown little interest in repairing relations with Washington or halting his aggression in neighboring Ukraine.

This month, Obama’s National Security Council finished an extensive and comprehensive review of U.S policy toward Russia that included dozens of meetings and input from the State Department, Defense Department and several other agencies, according to three senior administration officials. At the end of the sometimes-contentious process, Obama made a decision to continue to look for ways to work with Russia on a host of bilateral and international issues while also offering Putin a way out of the stalemate over the crisis in Ukraine.

“I don’t think that anybody at this point is under the impression that a wholesale reset of our relationship is possible at this time, but we might as well test out what they are actually willing to do,” a senior administration official told me. “Our theory of this all along has been, let’s see what’s there. Regardless of the likelihood of success.”

Leading the charge has been Secretary of State John Kerry. This fall, Kerry even proposed going to Moscow and meeting with Putin directly. The negotiations over Kerry’s trip got to the point of scheduling, but ultimately were scuttled because there was little prospect of demonstrable progress.

In a separate attempt at outreach, the White House turned to an old friend of Putin’s for help. The White House called on former Secretary of State Henry Kissinger to discuss having him call Putin directly, according to two officials. It’s unclear whether Kissinger actually made the call. The White House and Kissinger both refused to comment for this column.

Kerry has been the point man on dealing with Russia because his close relationship with Russian Foreign Minister Sergei Lavrov represents the last remaining functional diplomatic channel between Washington and Moscow. They meet often, often without any staff members present, and talk on the phone regularly. Obama and Putin, on the other hand, are known to have an intense dislike for each other and very rarely speak.

In several conversations with Lavrov, Kerry has floated an offer to Russia that would pave the way for a partial release of some of the most onerous economic sanctions. Kerry’s conditions included Russia adhering to September’s Minsk agreement and ceasing direct military support for the Ukrainian separatists. The issue of Crimea would be set aside for the time being, and some of the initial sanctions that were put in place after Crimea’s annexation would be kept in place.

“We are willing to isolate the issues of Donetsk and Luhansk from the issue of Crimea,” another senior administration official told me, naming two regions in Eastern Ukraine under separatist control. “If there was a settlement on Donetsk and Luhansk, there could be a removal of some sanctions while maintaining sanctions with regard to Crimea. That represents a way forward for Putin.”

Meanwhile, Kerry has been proposing increased U.S.-Russian cooperation on a wide range of international issues. Earlier this month, he invited Lavrov to a last-minute diplomatic confab in Rome to discuss the the Israeli-Palestinian conflict.

After one meeting with Lavrov in Paris in October, Kerry announced that he had discussed potential U.S.-Russian cooperation on Afghanistan, Iran, North Korea, Syria and Yemen. But the apparent warming was overshadowed by Lavrov’s quick denial of Kerry’s claim that Russia had agreed to assist in the U.S.-led coalition against Islamic State in Iraq.

Kerry has seemed more enthusiastic about mending ties with Russia than Obama himself. After the president gave a blistering critique of Russian behavior in a major United Nations speech, saying that “Russian aggression in Europe recalls the days when large nations trampled small ones in pursuit of territorial ambition,” Kerry urged Lavrov to ignore his boss’s remarks, according to Lavrov. “Kerry said we have so many serious things to discuss that of course that was unfortunate, let’s not focus on that,” Lavrov told Russian reporters.

State Department officials insist that Kerry is clear-eyed about the challenges of trying to work with Russia, but that he believes there is no other responsible option than to see what can be accomplished.

“Secretary Kerry is not advocating internally or with Russia for a reset in the relationship, and in fact in meetings he has taken a strong and at times skeptical stance,” one senior State Department official told me. “As the nation’s chief diplomat he is simply always exploring ways to make relationships more productive.”

There is also a belief among many both inside the State Department and the White House that sanctions are working. The Russian economy is tanking, albeit due largely to collapsing oil prices and not targeted punishments. One senior administration official argued that absent the sanctions, Putin might have been even more aggressive in Ukraine. Moreover, this official said, the sanctions need time to work and might yet prove to have greater effect on Putin’s decision-making in the months ahead: “We’ll see how they feel as their economy continues to deteriorate and the Ukrainian economy refuses to collapse.”

If the Russians are getting ready to cave, they aren’t showing it. Putin remains defiant and Russian military assistance to the Ukrainian rebels continues. The Russian leadership has been rejecting Kerry’s overtures both in public and private. Diplomatic sources said that Lavrov has refused to even discuss Kerry’s conditions for partial easing of sanctions. And Putin has made a hobby of bashing the U.S. in public remarks.

To many of the administration’s critics, especially Republicans on Capitol Hill, pursuing engagement with Moscow is based on naivety and wishful thinking.

“It’s a strategy worthy in the finest tradition of Neville Chamberlain,” incoming Senate Armed Services Chairman John McCain told me. “I think the Russians are doing fine. Meanwhile, what price has Vladimir Putin paid? Very little.”

The legislative branch has also been active on Russia this year, but its efforts run counter to the administration’s policy and sometimes have the indirect effect of putting more roadblocks in front of the Obama-Kerry push to find a way forward.

On Dec. 18, Obama reluctantly signed a bill authorizing new Russia sanctions and military aid to Ukraine that was overwhelmingly passed by Congress. Afterward, the White House awkwardly said that the legislation did not signify any change in policy.

And this week, the State Department sanctioned four more Russian officials, but not over Ukraine. The officials were added to a list of human rights violators under the Sergei Magnitsky Act of 2012, named after the anti-corruption lawyer who died in a Russian prison. In response, the Russian foreign ministry issued a statement saying that the Magnitsky Act sanctions “place in question the prospects for bilateral cooperation in resolving the situation surrounding the Iranian nuclear program, the Syrian crisis, and other acute international issues.”

These latest punishments show that it may be impossible to de-link the problems in the bilateral relationship from the opportunities, as the Obama administration wants to do. They also show that there will always be chances for those in Washington and Moscow who want to stoke the tensions to do so, jeopardizing any progress.

Some experts believe that any plan to warm U.S.-Russian relations is unlikely to succeed because it doesn’t have the full support of either president.

“It’s very clear that between the Putin Kremlin and the Obama White House there is a very bad chemistry. Its not a question of simply distrust, it’s a question of intense dislike between the two leaders,” said Dimitri Simes, president of the Center for the National Interest.

Also, some experts feel, placing the diplomacy in the Kerry-Lavrov channel dooms its outcome, because the Russians know that Kerry himself has no power to make major decisions and Lavrov has to be careful not to be seen as cozying up to the U.S.

“The more Kerry creates a perception he has a special relationship with Lavrov, the more he puts Lavrov in a difficult position with officials in his own capital, starting with Putin,” said Simes. “It’s clear that when Kerry deals with Lavrov and hopes that because they have overlapping interests, that would allow cooperation where useful, that is not a model of relationship that Putin is prepared to accept.”

Obama has made it clear that in his last two years in office he is prepared to make big moves on foreign policy even if they face political or legislative opposition, such as normalizing relations with Cuba or pursuing a nuclear deal with Iran. But when it comes to Russia, he is unwilling to place his own credibility behind any outreach to his nemesis Putin.

The administration’s cautious engagement with Moscow is logical: Why not seek a balance in a complicated and important bilateral relationship? But by choosing a middle ground between conciliation and confrontation — not being generous enough to entice Russia’s cooperation yet not being tough enough to stop Putin’s aggression in Eastern Europe — Obama’s policy risks failing on both fronts.

 

Diplomatic Suicide, Iran Celebrates

Posted on by

WASHINGTON (AP) — While President Barack Obama hasn’t ruled out the possibility of reopening a U.S. Embassy in Iran, Republicans say the Senate will vote within weeks on a bill to impose more sanctions on Tehran over its nuclear program.

Obama was asked in an NPR interview broadcast on Monday whether he could envision opening an embassy there during his final two years in office.

“I never say never,” Obama said, adding that U.S. ties with Tehran must be restored in steps.

Washington and its partners are hoping to clinch a deal with Iran by July that would set long-term limits on Iran’s enrichment of uranium and other activity that could produce material for use in nuclear weapons. Iran says its program is solely for energy production and medical research purposes. It has agreed to some restrictions in exchange for billions of dollars in relief from U.S. economic sanctions.

Then…..

Iran Is Getting Away With Murder

Achieving a nuclear deal with Tehran is hugely important. But stopping Iran from slaughtering innocent Syrians is a worthy goal.

In an interview in late 2006, I asked then-Senator Barack Obama to talk about the challenges to rational deterrence theory posed by the behavior of rogue states. “Whatever you want to say about the Soviets,” Obama answered, “they were essentially conservative. The North Korean regime and the Iranians are driven more by ideology and fantasy.”

Earlier this year, I asked Obama the following question: “What is more dangerous: Sunni extremism or Shia extremism?”

His answer was revealing, suggestive of an important change in the way he has come to view the Iranian regime. He started by saying, as would be expected, “I’m not big on extremism generally.” And then he argued—in part by omission—that he finds the principal proponent of Shiite extremism, the regime in Tehran, more rational, and more malleable, than the main promoters of Sunni radicalism.

“I don’t think you’ll get me to choose on those two issues,” he said. “What I’ll say is that if you look at Iranian behavior, they are strategic, and they’re not impulsive. They have a worldview, and they see their interests, and they respond to costs and benefits. And that isn’t to say that they aren’t a theocracy that embraces all kinds of ideas that I find abhorrent, but they’re not North Korea. They are a large, powerful country that sees itself as an important player on the world stage, and I do not think has a suicide wish, and can respond to incentives. And that’s the reason why they came to the table on sanctions.”

Since becoming president, Obama has made the argument that Iran could be induced, cajoled, and pressured into compromise, a view that has been proven provisionally, partially, correct: Sanctions, plus Obama’s repeated (and, to my mind, at least, credible) threat of military action, convinced Iran to temporarily halt many aspects of its nuclear program in exchange for limited sanctions relief. But Obama and his international partners have been less successful at bringing Iran to permanent denuclearization.

A long-term, verifiable arrangement that keeps Iran perpetually a year or more from nuclear breakout is surpassingly important for the national security of the United States (as Obama noted in this interview); for the health and safety of America’s friends in the Middle East; and for the cause of nuclear nonproliferation in the world’s most volatile and dangerous region. Over the past year, the two sides of international nuclear negotiations have apparently moved somewhat closer to each other, and when the second round of talks came to an end without achieving a deal, both sides agreed that yet another negotiation extension was in order. As Iran and its interlocutors move into what stands to be the fateful year for these negotiations, a credible deal does not look to be achievable; so far, at least, the Iranians seem unwilling to make the truly creative concessions necessary to meet the West’s minimum requirements.

Especially if a deal is ultimately proven to be unachievable, another question will arise: Is the price the U.S. has paid to reach this elusive deal too high? An admirable aspect of Obama’s foreign-policy making is his ability to coolly focus on core issues to the exclusion of what he considers to be extraneous matters. This is also, however, a non-admirable aspect of his policymaking, in particular when the subject at hand is Iran’s role in supporting the killer Assad regime in Syria.

Obama seems to believe that a nuclear deal is, in a way, like Casaubon‘s key to all mythologies: Many good things, he believes, could flow from a nuclear compromise. In an interview last week with NPR’s Steve Inskeep, the president suggested that a nuclear agreement would help Iran become “a very successful regional power that was also abiding by international norms and international rules.” This, he said, “would be good for everybody. That would be good for the United States, that would be good for the region, and most of all, it would be good for the Iranian people.”

This is a wonderful notion, the idea that the end of Iran’s isolation could lead it to moderate its more extreme impulses. But there isn’t much in the way of proof to suggest that Iran’s rulers are looking to join an international order whose norms are defined by the United States and its allies. In fact, there is proof of something quite opposite: Iran seems as interested as ever in becoming a regional hegemon, on its own terms. And its supreme leader, and his closest confidants, have made it clear, over and over again, that he is not interested in normalizing relations with the United States.

Across the greater Middle East, Iran’s efforts to extend its influence have been blunt and brutal: It supports Shiite insurrections in Yemen and Bahrain; it attempts to manipulate Lebanese politics through its Beirut-based proxy, Hezbollah; it intervenes in Gaza and against the already-fading hope for a two-state solution to the Israeli-Arab crisis; and certainly its unceasing threats to eradicate a fellow member-state of the United Nations, Israel, suggest that Iran’s supreme leader, Ayatollah Ali Khamenei, has a vision for Iran that differs from Obama’s.

But nothing underscores the Iranian regime’s imperialistic, hegemonic nature more than its support for the Assad regime in Damascus. Without Iran’s assistance, Assad would have fallen a long time ago. The death toll in Syria is more than 200,000; half of Syria’s population has been displaced. These dark achievements of the Assad regime would not have been possible without Iran. Thousands of Hezbollah and Iranian Revolutionary Guard Corps troops and advisers, plus Iranian weaponry, have made all the difference for Assad. As a recent study by the Middle East Institute states:

It is no longer accurate to describe the war in Syria as a conflict between Syrian rebels on the one hand and Bashar al-Assad’s regime forces “supported” by the Iranian Revolutionary Guards (IRG), Hezbollah, and Iraqi militias on the other. Most major battles in Syria—along the frontlines of regime-held areas—are now being directed and fought by the IRG and Hezbollah, along with other non-Syrian Shi‘i militias, with Assad forces in a supportive or secondary role. …

One result of this heavy Iranian involvement in the war in Syria has been a change in the nature of the relationship between the Syrian and the Iranian regimes. From historically being mutually beneficial allies, the Iranian regime is now effectively the dominant force in regime-held areas of Syria, and can thus be legally considered an “occupying force,” with the responsibilities that accompany such a role.

There was no commensurate effort made by opponents of Assad to help those Syrians who were trying to overthrow him. President Obama called on Assad to go, but kept the U.S. on the sidelines through the first years of the Syrian civil war, for reasons he has explained in many places, including here.

Today, the U.S. and its allies are fighting in the Syrian theater, but they are fighting Assad’s putative enemies, the Sunni extremists of ISIS, not Assad and his Iranian allies. And yet ISIS is a derivative problem of a larger crisis: Without Assad—which is to say, without Iran—there would be no ISIS “caliphate” in Syria in the first place. The midwives of ISIS are Assad, Hezbollah chief Hassan Nasrallah, and Ayatollah Khamenei. 

If Assad had been overthrown early in the civil war, a more moderate, multi-confessional Syrian government could have plausibly emerged to take its place. The early rebels, who frightened the Assad regime to its core, were not seeking to build a cross-border caliphate on a foundation of medieval cruelty; they were simply seeking to remove Assad’s boot from their necks. As the Assad regime, with Iran’s invaluable help, recovered from the first blows of the rebellion, many Sunni Syrians, seeking help everywhere but finding it mainly among radicals, became radicalized themselves. This was an explicable, if not justifiable, reaction to the mortal threat posed by what they saw as a massed Shiite threat.

Earlier this year, in a conversation about the Obama administration’s Middle East strategy, Senator John McCain brought me up short when he criticized the president for launching attacks on a symptom of the Syrian civil war, ISIS, rather than its root cause. He told me that the U.S. should be battling the Assad regime at the same time it attacks Sunni terrorists. I asked him the following question: “Wouldn’t the generals say to you, ‘You want me to fight ISIS, and you want me to fight the guys who are fighting ISIS, at the same time? Why would we bomb guys who are bombing ISIS? That would turn this into a crazy standoff.’”

McCain answered: “Our ultimate job is not only to defeat ISIS but to give the Syrian people the opportunity to prevail as well. … If we do this right, if we do the right kind of training and equipping of the Free Syrian Army, plus air strikes, plus taking out Bashar Assad’s air assets, we could reverse the battlefield equation.”

There is even less reason to believe today that the Free Syrian Army, such as it is, is capable of fighting the Assad regime (and ISIS) effectively. So at this late stage, McCain’s policy prescriptions may be unrealistic. But his diagnosis of the core problem seems tragically accurate.

“I don’t think ISIS would exist if Bashar al-Assad had been removed two or three years ago,” McCain told me when we revisited the question earlier this month. “He was on his way out until the Iranians brought in 5,000 Hezbollah fighters, and the Iranian Revolutionary Guard Corps came in, to train Assad’s troops and provide them with weapons, including the barrel bombs, which are horrible weapons of war.”

McCain argues that the Obama administration has avoided confronting Assad in part for fear that doing so would alienate Assad’s patrons in Tehran, the same men who are in charge of the nuclear file. “The whole theory hinges on a major breakthrough in the nuclear talks, that once they get their deal, Iran will stop funding Hamas, stop supporting Hezbollah, stop destabilizing Yemen, that they’ll join us in fighting extremism. So they have to get a nuclear deal at all costs, and not do anything in Syria. This is just so farfetched it’s delusional.”

I wouldn’t go so far as to call proponents of this theory delusional, but let’s say that they are not approaching the issue of leverage in an effective way. Gary Samore, a former Obama administration official who was in charge of the National Security Council’s Iran nuclear file, told me this month that he would use Iran’s deep exposure in Syria to U.S. advantage.

“Confronting Iran forcefully in Syria and Iraq increases chances for a nuclear deal because Iran will only meet our nuclear demands if it feels weak and vulnerable,” Samore wrote in an email. “Conversely, Iran’s sense that it is winning in Syria and that it is indispensable in Iraq decreases chances for a nuclear because the Supreme Leader won’t make nuclear concessions if he feels strong and ascendant.”

Is it likely that Obama will move toward a policy of containing Iran in Syria, and away from his more accommodationist stance? Arab states that count Iran as an enemy and the U.S. as a friend have asked him repeatedly over the past two years to treat Iran as a root cause of the Syrian catastrophe. But Obama appears focused solely on achieving a nuclear deal with Iran, in part because he seems to believe that Iran is ready to play the part of rational and constructive actor, rather than extremist would-be hegemon. I hope he’s right, and I hope he achieves a strong nuclear deal, but I worry that he is empowering an Iranian government that isn’t about to change in any constructive way. In the meantime, the Iranian regime continues to get away, quite literally, with murder.

Then there is the economic outlook for the Middle East and Iran and the tribal sects.

Likewise in Iraq, which like Iran has a Shiite majority, Tehran’s consolidated influence since the U.S. troop withdrawal in 2011 has contributed to sectarian polarization and left the government dependent on Iranian-backed militias to fight the Sunni extremist group Islamic State.

With Iran’s economy crippled by the double whammy of international sanctions and falling oil prices, Syria and Iraq will become even more of a burden in 2015.

In the end, Mr. Khamenei’s two big projects could merge into one during 2015 or diverge. A nuclear deal with world powers could open the door to further cooperation with the U.S. in Iraq and Syria. But failure to strike such a deal could spark new tensions on all fronts between Iran and the international community.

Guantanamo Construction Contract for Education?

Posted on by

Just before Christmas of 2014, Barack Obama made a stunning public announcement regarding normalizing relations with Cuba. It appears that those relations have been underway for some time and the activities are head-shaking.

Just recently a construction contract was awarded for Gitmo. If Obama is releasing detainees and transferring them to destinations unknown, then what is being constructed? If he is going to escalate releases then what needs to be repaired or upgraded and for what? When Russia, Cuba, Iran, Nicaragua are colluding for military build ups and surveillance on the West, can we trust White House decisions on the future of Gitmo? Read on and make your own determination.

Islands Mechanical Contractor, Inc.,* Middleburg, Florida, is being awarded $7,727,970 for firm-fixed-price task order 0015 under a previously awarded multiple award construction contract (N69450-12-D-1274) for refurbishment of the Taurman Avenue Electrical Substation at Naval Station Guantanamo Bay. The work to be performed provides for the design and construction of new outdoor substation infrastructure to recapitalize the existing outdoor substation which has deteriorated and needs to be replaced. The project includes construction of site improvements, new metal support structure with concrete foundations and concrete equipment pads, security fencing surrounding gravel interior space, grounding system, medium voltage busing systems, vacuum circuit breakers, liquid filled transformers, enclosed metal-clad switchgear, manual isolation and bypass switches, lightning and surge protection, and modular enclosure to house solid-state, programmable monitoring, relaying and controlling system equipment. Work will be performed in Guantanamo Bay, Cuba, and is expected to be completed by August 2016. Fiscal 2015 Navy working capital funds in the amount of $7,727,970 are being obligated on this award and will not expire at the end of the current fiscal year. Two proposals were received for this task order. The Naval Facilities Engineering Command, Southeast, Jacksonville, Florida, is the contracting activity.

GUANTANAMO NAVY BASE, Cuba. — The base with the most expensive prison on earth is getting one of the world’s priciest schools — a $65 million building with classroom space for, at most, 275 kindergarten through high school students.

Do the math: That’s nearly a quarter-million-dollars per school child. In Miami-Dade County a new school costs perhaps $30,000 per student.

Congress recently allocated the funds for the new W.T. Sampson School to put the children of American sailors stationed here under one roof. It will meet Americans with Disabilities Act standards, have a proper public address system, computer and science labs, art and music rooms, a playground, cafeteria and gym — just like any new school anywhere in America.

But the investment also illustrates the Pentagon’s intent to keep this base open even if President Barack Obama manages to move out the last 132 war-on-terror captives, and close the prison run by 2,000 or more temporary troops and contractors.

GUANTANAMO NAVY BASE, Cuba. — The base with the most expensive prison on earth is getting one of the world’s priciest schools — a $65 million building with classroom space for, at most, 275 kindergarten through high school students.

Do the math: That’s nearly a quarter-million-dollars per school child. In Miami-Dade County a new school costs perhaps $30,000 per student.

Congress recently allocated the funds for the new W.T. Sampson School to put the children of American sailors stationed here under one roof. It will meet Americans with Disabilities Act standards, have a proper public address system, computer and science labs, art and music rooms, a playground, cafeteria and gym — just like any new school anywhere in America.

But the investment also illustrates the Pentagon’s intent to keep this base open even if President Barack Obama manages to move out the last 132 war-on-terror captives, and close the prison run by 2,000 or more temporary troops and contractors.

And it offers a lesson on the cost of doing business out here on Cuba’s southeastern tip where under the U.S. trade embargo all business is conducted independent of the local economy.

Base not prison

Guantánamo Bay may be best known for its war-on-terror prison separated from the rest of the island by a Cuban minefield. But this 45-square-mile U.S. Navy base, leased from Cuba for $4,085 a year that Havana won’t accept, functions like a small town of 6,000 residents.

Sailors and civilians on long-term contracts run the airport, seaport, public works division and a small community hospital. They bring their families and belongings, get suburban-style homes, scuba dive in the Caribbean — and send their children to two U.S. government schools that are nearer to the base McDonald’s and bowling alley than the Detention Center Zone.

This year, there are 243 students — 164 at the elementary school and the rest at a separate building for middle and high school students whose mascot is a pirate.

In Florida, it typically costs $20,000 to $30,000 per student to build a school, according to Jaime Torrens, chief facilities officer for Miami-Dade County Public Schools. But South Florida has a “competitive environment where labor is readily available, materials are readily available.”

Guantánamo’s costs are so much higher “because all materials must be barged to the island, and the construction contractor’s crews must live on site for the duration of construction,” said Cindy Gibson, spokeswoman for the unit that runs the Department of Defense schools.

She estimated building costs are “70 percent higher than the average construction costs experienced in the United States.”

The money for the new Sampson School is tucked inside the massive, $585 billion national defense spending act that, among other things, funds the war on the Islamic State and requires that new construction projects at Guantánamo have an “enduring military value” independent of the detention operations.

It also funds the renovation or new construction of six other Defense Department schools in Belgium, Japan and North Carolina. The next most expensive is another K-12 school being built on the outskirts of Brussels for another American enclave — the children of Americans assigned to the U.S. Army or NATO at a cost of $173,441 per pupil.

Consider this: Miami High School, with an enrollment of 2,906, spent $55 million to renovate and expand its 1928 Mediterranean Revival building, working out to $18,926 per student.

The Sampson School is being built for a maximum 275-member student body ($237,054 per pupil) at one location, something smaller but similar to the exclusive 1,200-student Miami Country Day School, whose head of school John Davies’ first reaction to the price-tag was “Wow, $65 million?”

For $65 million, he said, “we could probably do our entire new master plan for the campus, a center for the arts, parking garage, new gym, new cafeteria and pretty substantial classroom building.”

But Davies studied the building proposal and found “a pretty adequate but not over-the-top construction program.” He searched the specifications and justification and “it doesn’t strike me as one of those $600 toilets or $1,000 hammer kinds of things that we get every once and a while from the GAO” — the General Accounting Office that sometimes uncovers embarrassing examples of profligate U.S. government spending.

“Obviously we’re thinking we’ll be in Guantánamo for a long time,” he said.

Number crunch

To be sure, there’s no exact science for evaluating costs at the U.S.-controlled corner of Cuba. Any cost-benefit analysis is mired in political debate and difference of opinion.

Last year, for example, some Democrats in Congress got a Pentagon comptroller report on what it costs to run Guantánamo’s sprawling detention center operations, including to maintain its 2,000-plus staff and court system for seven of the last 132 detainees. It put the cost at $2.7 million per prisoner a year.

More prisoners have been released since then, meaning the Congressional crunch is more like $3.1 million per captive a year. And that price is probably higher. Some costs are classified.

In February, however, Marine Gen. John Kelly disputed that soup-to-nuts approach at a Congressional hearing. His Southern Command headquarters, with oversight of the prison, figured it cost “about $750,000” for each prisoner, he said.

Then again, he’s been seeking $69 million to replace a secret prison at Guantánamo that now holds 15 former CIA captives. It works out to $4.6 million per prisoner in construction costs, giving new meaning to the term “high-value detainees.”

Replace not renovate

The school project looks cheap by comparison. As presented to Congress, it consolidates two inefficient schools that were built in the 1970s and ’80s and have deteriorated across the decades.

The separate structures need new ventilation and air-conditioning systems, electrical upgrades of alarms and emergency systems, an updated elementary school kitchen, new bathrooms and insulation and retrofitting to meet new standards, according to a report to Congress by Chuck King, the facilities engineer for the Department of Defense Education Activity, who is based in Peachtree City, Georgia.

Instead, he proposed and Congress agreed to build the new 112,000-square-foot school on the site of today’s smaller, single-story 1983-vintage elementary school on Sherman Avenue — along the road to Camp X-Ray, the original war-on-terror prison, and the frontier with Cuba.

Students will go to school in trailers and other available space while their current building is demolished and replaced by the new one. Once the high school students move in, workers will demolish their 1975 building behind the base pub, O’Kelly’s, not far from the scrubby nine-hole golf course.

Thrice evacuated

The Sampson school system, established in 1931, is named for a 19th Century U.S. Navy rear admiral who was responsible for the blockade of Cuba in the Spanish American war. It has a storied history of closings that no occasional hurricane or snow day can match.

Sampson students were sent home — evacuated back to the United States — during World War II and for three months in 1962 during the Cuban Missile Crisis. The schools also closed in the mid-’90s when families were sent away as the base coped with a huge influx of tens of thousands of Cuban and Haitian migrants, housed in tent cities, that taxed this isolated outpost’s water desalination and other resources.

The new school’s plan includes state-of-the-art technology in physics, chemistry and video-broadcast labs, a music suite, LED lighting and a wireless network. It will also have space for 50 faculty and administration members, two or more floors and a stucco finish, according to the proposal to Congress.

It’s not possible to ask the kids what they think about it because Department of Defense policy shields school children from speaking with reporters on base. Besides, today’s students are mostly the children of military families that move every few years, meaning they’ll likely be gone by the time the new $65 million school opens.

It’s projected to be finished in April 2018. By then, Obama’s successor will be in office, the Pentagon will have completed a $31 million underwater fiber-optic cable between the base and South Florida and, unless Congress lifts the U.S. embargo on trade with Cuba, the blockade will be in its 57th year.

Miami Herald staff writer Christina Veiga contributed to this report.

The State of Palestine, Yes, No Maybe

Posted on by

Update: As of 5:00 PM, EST

UN REJECTS PALESTINIAN RESOLUTION TO DEMAND ISRAEL WITHDRAW FROM WEST BANK, EAST JERUSALEM

A revised text in the resolution for Palestinian statehood has been presented to the United Nations. There are some interesting demands such that some global leaders are not in support including the United States and Britain. Sadly through all the years of debate over statehood, very few look at history and borders. The debate is a false one when it is understood where “Palestine” was/is.

The draft resolution by the Palestinians calling for an Israeli withdrawal from the West Bank and East Jerusalem within three years and revised to include language declaring East Jerusalem as the future capital of a Palestinian state was presented to the UN Security Council late Monday.
The draft resolution affirms the urgent need to achieve “a just, lasting and comprehensive peaceful solution” to the decades-old Palestinian-Israeli conflict within 12 months and sets a December 31, 2017 deadline for Israel’s occupation to end.

State Department Spokeswoman Jen Psaki, when asked today if the United States would support a proposed United Nations resolution that would set terms of a peace deal between Israel and the Palestinians, said that “it is not something that we would support.”

The Times of Israel reports:

Washington has seen the text of a draft resolution circulating in the UN Security Council and “it is not something that we would support,” State Department spokeswoman Jen Psaki told reporters.

“We wouldn’t support any action that would prejudge the outcome of the negotiations and that would set a specific deadline for the withdrawal of forces,” Psaki said.

Psaki’s answer indicates that the United States would veto the resolution if it came before the Security Council.

Psaki’s comments came shortly after Senators Chuck Schumer (D – N.Y.) and Lindsey Graham (R – S.C.) called on the administration “to make clear that the United States will veto any United Nations resolution … to bypass direct negotiations and impose peace terms on Israel through the United Nations Security Council and other international bodies,” earlier today.

(Reuters) – Britain joined the United States on Tuesday, declaring that it cannot support a new Palestinian draft proposal calling for peace with Israel within a year and an end of the Israeli occupation of Palestinian territories by late 2017.

Jordan on Tuesday circulated to the U.N. Security Council a draft resolution prepared by the Palestinians, who said they want it put to a vote before Thursday. Washington said it could not support the draft because it was not constructive and failed to address Israel’s security needs.

British U.N. Ambassador Mark Lyall Grant was asked by reporters whether his delegation could support the Palestinian draft.

“Well no,” he said. “There’s some difficulties with the text, particularly language on time scales, new language on refugees. So I think we would have some difficulties.”

 

Global Financial Outlook 2015~Grim

Posted on by

What is the financial outlook for 2015? Not good as the monetary experts have created a study group in the United States to examine conditions, causes and solutions.

The Federal Reserve deliberately keeps quiet about how it measures lenders’ performance during downturns, to prevent banks from finding loopholes in the process that would allow them to take more risk, senior regulators have said publicly. It has given banks a little more information recently, but many executives still gripe about the tests.

“You put something in and one year it’s okay and the next year they say ‘no,’ and you’re scratching your head,” said one bank executive. The executive, like others that spoke to Reuters, spoke about the stress tests on the condition of anonymity.

A few years ago, banks might have hesitated to share information with rivals about how they measure risk and how they communicate with the Federal Reserve. Their willingness to talk to competitors about these issues underscores just how exasperated they are with the process. Meanwhile, banks in Europe are failing stress tests as Italy suffered the worst count: nine of the country’s 21 banks examined failed the test. Italy is Europe’s fourth-largest economy.

Greece and Cyprus, southern European countries that required international bailouts, were next. In each country, three of four banks examined did not pass muster.

Five of the Italian banks and one Greek bank have since covered their shortfalls.

Only one of the 25 major banks in Germany, Europe’s strongest economy, failed the test, but it has since raised sufficient capital.

Greece is the indicator for Europe as Greece has undergone the most strenuous financial retooling program in the last few years and yet it is not enough. Banks are all interconnected given the quiet bailouts globally through the International Monetary Fund and associated global banks. So what about Greece?

Greece’s threat to the European economic recovery

It is difficult to exaggerate the importance of the Greek government’s failure today to secure sufficient votes in parliament to choose a new president for the country. Since such a failure not only forces Greece to hold snap elections by the end of January, which could see the coming to power of a radical left-wing government. It also raises the real possibility that Greece will be forced to exit the Euro in 2015 that would be a major blow to the prospects of a meaningful European economic recovery.

On the basis of current electoral polls, the Syriza Party, headed by Alexis Tsipras, should win the parliamentary elections now scheduled for January 25. Judging by Syriza’s consistent electoral promises, if elected one must expect that Syriza will roll back the austerity policies imposed on Greece by the IMF, the ECB, and the European Union (the so-called “troika”). Syriza must also be expected to reverse many of Greece’s recent structural reforms in the labor market and in the area of privatization policy. In addition, it will more than likely insist on substantial official debt relief from the ECB, the IMF, and its European partners.

The prospect of a Syriza government taking office is already sending shudders through the Greek financial markets and is undermining confidence in the still very depressed Greek economy. One must expect that the election of Syriza will put Greece on a collision course with both the troika and the German government. Since it is difficult to see how the troika and  the German government can accede to Greece’s request for either debt relief or for additional budgetary financing at a time that Greece’s economic policy would be going in a direction clearly unacceptable to its European partners. For its part, it is difficult to see how Syriza can quickly make a policy U-turn from a position that it has been consistently espousing these past few years.

To be sure, a month in Greek politics is a long time and Syriza is by no means assured of electoral victory. However, it would seem that even in the best case scenario of a New Democracy win, it would fall well short of the votes needed for forming a majority government. With a deeply divided PASOK Party highly likely to be decimated in the elections, New Democracy will have difficulty in forming a stable coalition government. It is also likely that in the election campaign, New Democracy will emphasize that if re-elected it too will take a tough line with the troika, from which line it will be difficult to withdraw after the elections.

Greece’s already battered economy can ill-afford a prolonged period of political uncertainty, and much less a radical government, especially without the backstop of a troika financial support program. For not only does Greece have substantial official debt amortization payments to make in 2015 — it is also vulnerable to a run on its bank deposits. This would especially appear to be the case in light of the recent Cypriot experience, where Cyprus’s official international lenders insisted on a large write-down of bank deposits in return for their financial support to the country. Without a troika program in place, Greek banks would not be in the position to access the European Central Bank’s rediscount window in the event of a bank run that would almost certainly lead to the further collapse of the Greek economy.

European optimists argue that, unlike in 2010, any spillovers now from a Greek crisis to the rest of the Eurozone would be limited. However, in so doing they overlook Europe’s very poor economic and political fundamentals, which make the Eurozone all too susceptible to renewed contagion from the Greek crisis intensifying. After all, Europe is on the cusp of yet another economic recession and of a prolonged period of Japanese-style price deflation. Meanwhile, its economic periphery remains highly indebted and throughout Europe support for its political elite is crumbling at a time that parties on the extreme-left and the extreme-right of the political spectrum appear to be on the march.