Gangsta Rule

Keeping a Piece of the Action

Beneath the struggles that define today's global hot spots lies the age old struggle for riches. In Russia as well as in East Timor, that means oil. In poverty-ridden Kosovo, the Serbs have attempted to maintain control of metal mining. In most cases, the ruling forces are not nationalists or ethnic factions but robber barons, themselves often surrogates for U.S. interests.

In East Timor, scenes of fighting and burning buildings gave way on Monday to images of smiling Indonesian officers greeting grinning Australian commanders in Dili after the first UN "peacekeepers" landed. Here, the family of former Indonesian president Suharto, whose U.S.-trained and -armed elite forces wreaked havoc among the population, have long-term interests in oil. The Suhartos also control timber, sugar cane, marble deposits, and coffee, as well as oil tankers. Indonesian generals beholden to the Suharto family run companies that export sandalwood and oil.

The governor of East Timor, who also is tightly tied to the Suhartos, controls alchohol, textiles, and even drinking water. General Wiranto, the military leader, has a hand in telecommunications and timber through philanthropic organizations that own stock, along with the Suhartos, in both industries. Of course, the major players are the U.S.-domiciled oil giants Chevron and Mobil and Dutch-based Shell. Energy-starved Australia is anxious to jump into the fray.

U.S. diplomacy as regards Russia these days— where "explosive situation" is practically an understatement— seems to amount to the growing burden of propping up Boris Yeltsin, who couldn't exist without U.S. support. According to Yuri Skuratov, the prosecutor whom Yeltsin has been trying to shake, oil-export revenues were diverted to pay for millions of dollars in questionable renovations for Kremlin buildings while the government was so impoverished that it couldn't pay out pensions and wages. Skuratov, who has been suspended, told the Toronto Globe & Mail that the oil-export revenue was diverted to pay invoices from Mabetex, the shadowy Swiss company that is at the center of the Yeltsin family corruption scandal.

Swiss and Russian prosecutors are investigating whether Mabetex paid $10 million in bribes to Yeltsin family members and cronies for contracts to renovate the Kremlin buildings. Yeltsin's youngest daughter, 38-year-old Tatyana Dyachenko, has become known for her flamboyant ways, spending as much as $20,000 a day at Pierre Cardin and Cartier during a recent trip to Paris.

Certainly, one of the best examples of a fat-cat ruler draining a nation's wealth is Serbia's Slobodan Milosevic. Over the last decade, that country has been virtually taken over by Milosevic's relatives and their mafias, to such an extent that business can only be done by paying off top ministers or the Milosevic children. The Milosevics control televison, cigarette processing and sales, casinos, and nightclubs, with the profits salted away in a string of bank accounts that run through Cyprus to China and elsewhere. The family and their retainers also have allegedly profited from smuggling drugs, automobiles, arms, and cigarettes.

But the fight against unhampered free trade goes on. Not far from East Timor, Malaysia has infuriated international corporations by attempting to place controls on capital. And the World Bank, heretofore home to the worst of the free-marketing crowd, is endorsing the Malaysian position.


License To Spy
Secret Service Sought Drivers' Photos

Operating through a contractual relationship with a private corporation, the U.S. Secret Service was laying the groundwork until quite recently for a photo database of ordinary citizens collected from state motor vehicles departments. Utilizing the Freedom of Information Act, the Electronic Privacy Information Center (EPIC) discovered that the agency was planning to use the photos, culled by Image Data, for its own activities.

Image Data reportedly got more than $1 million in seed money from the Secret Service for a trial run of its TrueID project in 1997. Marketed as a method of combating check and credit-card identity fraud, TrueID involved the purchase and scanning of photos from participating DMVs. Three states— Florida, Colorado, and South Carolina— participated in the trial run with the Secret Service. But after news disclosures prompted a public outcry, Colorado and Florida halted the transfer of images, and South Carolina filed suit asking for the return of millions of images already in the company's possession.

According to EPIC, the Secret Service received regular reports on the trial run and monitored it with a view toward using the photos on a national scale in surveillance against illegal immigration, terrorism, as well as in other law-enforcement activities. Although the files obtained by EPIC show that the Secret Service decided which states would be part of the pilot project and directed the timing of the effort, Image Data downplayed the agency's involvement. A presentation to the government by the company marked confidential stressed that pilot projects would "ensure the viability of deploying such service throughout the United States." EPIC said it also discovered that monthly reports were sent to a special agent in the Secret Service's Financial Crimes Division.

In a February 1999 report, Image Data CEO Robert Houvener ridiculed the idea that legitimate privacy issues were at stake. Houvener— who says he has been a victim of "identity fraud"— says the national photo file is planned to be targeted at "identity criminals" who he estimates cost U.S. businesses billions of dollars a year.

EPIC director Marc Rotenberg characterized the proposal for a national photo database as a threat to basic U.S. privacy safeguards. "This is not a database that people can easily opt out of," he said, noting, "You have to give up your photograph when you get a driver's license."


Fighting Frankenstein
The Monster From Monsanto

Although most Americans seem to accept genetically modified foods without question, Europeans have been battling importation of the technology from Monsanto and other firms. They are beginning to see signs of success: Seven large grocery chains in six European countries made a commitment to go "GM free," and are lining up suppliers to provide non- genetically engineered corn, potatoes, soybeans, and wheat. In India, farmers are burning fields suspected of harboring genetically modified seeds, and India's Supreme Court has upheld a ban against their testing. The sheer size of the European market may force American farmers to reconsider planting genetically modified seeds.

In two stinging reports, Deutsch Bank, Europe's largest financial institution, has come down sharply against genetically engineered foods, urging investors to get rid of stocks in companies like Monsanto, and warning farmers of losses if they continue to use genetically engineered seeds and other products.

In one report sent to several thousand large institutional investors worldwide, including British pension funds, Deutsch Bank says that "growing negative sentiment" is creating problems for the leading companies, including Monsanto and Novartis. "We note that Monsanto has spent more than $1.5m to persuade English consumers of the rectitude of their position, but alas, to no avail," states the report. "Monsanto is little match for Prince Charles, an anti-GMO [genetically modified organism] advocate, when it comes to sensitivity for the English people's desires." Since the report was circulated to investors, shares in the companies that are named have fallen against a rising trend in stock markets recently and the takeover frenzy for seed companies has stopped. In the last six months, Monsanto's stock has fallen 11 percent, and Delta & Pine, a seed company that Monsanto is in the process of taking over, which owns the "terminator" gene (which prevents crops from reproducing), has lost 18 percent of its value.

Deutsche Bank's first report in May, titled "GMOs Are Dead," stated: "We predict that GMOs, once perceived as a bull case for this sector, will now be perceived as a pariah. The message is a scary one— increasingly, GMOs are, in our opinion, becoming a liability to farmers," adding that GMO grains would have to be sold at a discount. "Farmers who planted [Monsanto's] Roundup Ready soya could end up regretting it."

The report concluded that widespread concerns about genetically modified food in Europe are real. "European consumers have recently been through the mad cow crisis, the French AIDS-tainted blood crisis, the Dutch pig plague crisis, the Belgium chicken dioxin crisis, the Belgian Coca-Cola crisis, etc. Therefore, hearing from unsophisticated Americans that their fears are unfounded may not be the best way of proceeding."


For Christ's Sake

A public elementary school in Belridge, California, has canceled a plan to use "pro-Christian" textbooks, which instruct that God helped Columbus discover America and state that while American Indians "attained a degree of civilization," they "had no knowledge of the true God. . . ." The texts, published by Beka Books, dismiss Mormons, Jehovah's Witnesses, and Christian Scientists as cult members. As for Jews, students are asked to place the proper punctuation at the end of this sentence: "The Hebrew people often grumbled and complained"

Additional reporting: Kate Cortesi and Ginger Adams Otis

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