The Devil and William Webster

He'd been plowing that morning and he'd just broke the plowshare on a rock that he could have sworn hadn't been there yesterday.... There were two children down with the measles, his wife was ailing, and he had a whitlow on his thumb. It was about the last straw for Jabez Stone.

"I vow," he said, and he looked around him kind of desperate - "I vow it's enough to make a man want to sell his soul to the devil ! And I would, too, for two cents!"

Then he felt a kind of queerness come over him at having said what he'd said; though, naturally, being a New Hampshireman, he wouldn't take it back. But, all the same, when it got to be evening and, as far as he could see, no notice had been taken, he felt relieved in his mind, for he was a religious man. But notice is always taken, sooner or later, just like the Good Book says. And, sure enough, next day, about supper time, a soft-spoken, dark-dressed stranger drove up in a handsome buggy and asked for Jabez Stone.

Well, Jabez told his family it was a lawyer, come to see him about a legacy. But he knew who it was. . . .

- Steven Vincent Benét, "The Devil and Daniel Webster"

Sightings from The Catbird Seat

~ o ~

October 26, 2002

WEBSTER CHOSEN BY DIVIDED SEC

In a vote on party lines, former FBI and CIA head William Webster was named yesterday by a bitterly split Securities and Exchange Commission to head a new board of to oversee the scandal-plagued accounting industry.

The 3-2 vote for Webster at a public meeting came after rancorous discussion among the five SEC commissioners.

Commissioner Roel Campos, who along with Democrat Harvey Goldschmid had supported pension fund executive John Biggs for the job, said the selection of Webster feed the perception that the SEC has been influenced by the accounting industry.

SEC Chairman Harvey Pitt, clearly feeling under attack, made an emotional defense of his choice of Webster.

"I am beholding to no one," Pitt insisted. . . .

* * *

DEJÁ VU ... ALL OVER AGAIN?

April 30, 1998

Tax-collecting abuses

HONOLULU STAR-BULLETIN EDITORIAL

HORROR STORIES about unwarranted strong-arm tactics and other improprieties by the Internal Revenue Service have prompted a review of the agency's criminal investigation division. The review should not allow past abuses to go unpunished. It should include recommendations for disciplinary action, including criminal prosecution, for past misconduct by federal tax collectors and investigators as well as methods to restructure the agency to stop abuses.

Taxpayers have a right to be infuriated by Senate Finance Committee testimony that verified the most negative stereotypes of the IRS.

Senators were told about one IRS manager for undercover programs who was allowed to make good on his theft of more than 20 government-owned Mercedes-Benzes, BMWs and other vehicles with a $20,000 settlement and two years' probation.

An IRS manager accused of sexual harassment was made the agency's national director for equal employment opportunity and diversity until new allegations of sexual harassment arose; he still works for the IRS.

Taxpayers should be most irate about the menacing behavior of some IRS officials -- the agent who threatened to audit the returns of a state trooper who stopped him for drunk driving, an agent in Los Angeles who wrote a letter warning "you and your clients are next," or the agents who stormed a law-abiding Texas oil company shouting, "IRS! This business is under criminal investigation! Remove your hands from the keyboard and back away from the computers. And remember, we are armed!"

Yvonne DesJardins, chief of the agency's employee and labor relations section, testified that whistle blowers have had their careers destroyed and corrupt agents were promoted or allowed to retire while their offenses were covered up.

President Clinton has appointed former FBI and CIA Director William Webster to complete by the end of this year a review of the IRS' criminal investigation division's standards for enforcing laws, its relationship with senior managers, management practices and its effect on taxpayers' rights.

A thorough overhaul of the agency may be needed to end these abuses. . . .

* * *

April 15, 1999

IRS enforcement unit passes inspection

By Katy Saldarini, Government Executive Magazine

The IRS's Criminal Investigation Division (CID) received an almost squeaky clean bill of health from a judge assigned to review the unit's tax administration enforcement efforts.

William H. Webster, former head of the CIA and the FBI, refuted allegations that CID's investigative practices were marred by corruption and misconduct in a report released this week.

IRS Commissioner Charles Rossotti commissioned Webster to conduct the independent review of the agency's criminal enforcement arm last year following Senate Finance Committee oversight hearings.

The Webster Commission, composed of federal law enforcement personnel with financial management expertise, reviewed CID's caseload, investigative methods, organizational structure and personnel policies and practices.

The commission found that CID agents do not systematically abuse their authority to seek search warrants, that the agents' undercover practices conform with those of other federal law enforcement agencies, and that they are properly trained to use their weapons. The commission also found no patterns of personnel misconduct within the ranks of CID agents. Senate Finance Committee members had expressed concern about these issues in oversight hearings held last April.

But the commission did identify problems in the agency's caseload and jurisdiction. CID agents handle cases unrelated to their primary mission of administering federal internal revenue laws. In particular, the agency devotes a lot of time and energy to drug investigations, which rarely result in tax compliance improvements. . . .

Rossotti said the commission's conclusions were consistent with his plans for IRS reform.

But Senate Finance Committee Chairman William Roth, R-Del., was less enthusiastic. "These findings confirm that this division has serious problems and is in need of restructuring to ensure that it properly returns to and carries out its intended mission," he said. . . .

* * *

From The Outlaw Bank: The Wild Ride Into the Secret Heart of BCCI, by Jonathan Beaty & S.C. Gwynne. . . .

The Kerry subcommittee's relations with the CIA were nearly as bad as they had been with Justice, and for the same reasons:

Both agencies had known for years about BCCI and were hard-pressed to explain why nothing had been done.

After Kerry badgered the agency for several months for a briefing on its relationship with BCCI, the CIA finally agreed to a meeting. The problem was that the person sent to speak with Kerry staff members Jonathan Winer and David McKean was a junior officer.

"The guy they sent to brief us was a joke," said Winer. "He didn't even know who Kamal Adham was. He didn't know anything about BCCI. He didn't even seem to know why we were there."

Winer said that after the meeting he and McKean had encountered another CIA briefer, who, noting their expressions, said, "You look like you guys just got screwed."

Winer's response: "No, you guys just screwed yourselves."

Meanwhile, Kerry continued to press CIA Director William Webster for CIA reports on BCCI.

Finally, on July 23 came the first break. Webster admitted in a letter to Kerry the existence of two documents, both of which he described as "extremely sensitive."

When Kerry reviewed them privately, he was astonished to find that one of them, dated 1986, reported that BCCI secretly owned First American.... He obtained permission to declassify it and showed it to Virgil Mattingly at the Fed, who, according to Kerry staffers, "expressed shock that the CIA, Treasury, State Department, and Office of the Comptroller of the Currency had possessed the information in 1986 and never provided it to the Federal Reserve."

The CIA itself finally went public when Acting Director Richard Kerr announced at the National Press Club on August 2, before an uncritical audience of high-school students who were not allowed to ask questions, that the CIA did have some normal operational accounts with BCCI.

Winer's comment that the CIA had "screwed" themselves was not far from the truth . . .

John Kerry is nothing if not persistent, and he was most dangerous to his adversaries on the BCCI case . . .

About the time George Bush nominated Robert Gates for director of the CIA. That nomination had been thrown into question in July when Alan Fliers, former head of the CIA's Latin American task force, had pleaded guilty to two counts of lying to Congress about when high-level officials at the CIA first learned about the illegal diversion of funds to the Nicaraguan rebel forces. This raised new questions about what Gates himself, who had been deputy director under William Casey, knew about the Iran-Contra affair.

With the nomination of Gates - whose confirmation the Republication administration passionately wanted - under fire, Kerry saw his opportunity. He told the CIA that unless he got cooperation, the Gates nomination would be put on hold permanently. . . .

Okay, replied the CIA, we'll give you another briefing, a better one. No, said Kerry. He would be satisfied with nothing less that the public testimony of Richard Kerr.

And so Kerr, greatly against his will, was brought before Kerry's subcommittee in October 1991, where he admitted both that the CIA had known for years about BCCI and that it had maintained accounts there. . . .

* * *

From Edgar OnLine:

May 1, 2002

U.S. TECHNOLOGIES, INC. (USXX)

Security Ownership of Certain Beneficial Owners and Management

A partial listing . . . .

The Carlyle Group (14) - 857,671 (shares)

China Development (22) - 184,843

William H. Webster (23) - 893,448

George J. Mitchell - (25) - 784,893

Footnotes:

(14) The Carlyle Group holds these shares through CIPE Investment I, L.P. and its address is 57 Berkeley Square, London, W1X5DA, United Kingdom.

(22) China Development Industrial Bank Inc.'s address is 9 F 125 Nanking East Road, Section 5, Taipei 105, Taiwan.

(23) Judge Webster is a director of the Company.

(25) Senator Mitchell is a former director of the Company who resigned in April 2002. . . .

* * *

From Washington on $10 Million a Day: . . .

Lobbyists and Nuclear Visigoths.

Big money corporate lobbyists don't always win their battles, but when they are defeated it's rarely because Congress or the White House rises to defend the public interest. More likely the scheme being advanced was so loopy that even official Washington was too embarrassed to take up the cause.

That's the case with a multi-billion dollar plot put together by a cabal of beltway con men who hoped to dump tons of nuclear waste on a Pacific Island...

Money and politics make for strange bedfellows but the nuke deal was put together by what must surely rank as one of the most bizarre beltway coalitions of all time: a volatile Englishman who sometimes poses as a rock star, a retired CIA official, a self-described flower-child-turned investment banker, and a well-known friend of Bill.

The corporate vehicle for the plan is U.S. Fuel and Security Inc (USF&S), a Washington-based firm. The company's CEO is Daniel Murphy, a lobbyist who formerly served as deputy director of the CIA and chief of staff to George Bush when the latter was vice president. Murphy carried out a variety of murky activities while in government, once accompanying the notorious influence peddler Tongsun Park to meet with then President Manuel Noreiga of Panama...

Murphy's partners at USF&S include Alex Copson, who has pawned himself off to a variety of reporters and government officials as the former bass guitarist (and sometimes drummer) for the 60s rock group Iron Butterfly. . . . Then there's a Wall Street investment banker named Thomas Kirch, an aging hippie who, Copson says, "brings the peace, love and flowers" to the project.

The firm has recruited a number of heavy hitters to its cause. USF&S's counsel to retired Secretary of State James Baker.

Former FBI Director William Webster sits on the advisory board of International Fuel Containers, a corporate subsidiary that plans to build huge steel containers to store the nuclear waste.

Mark Grobmyer, a Little Rock lawyer and golfing partner of President Clinton's, has vigorously lobbied the White House on the company's behalf.

USF&S has also lined up international support. MinAtom, the Russian nuclear energy ministry, has indicated that it will sign on as a co-sponsor of the deal. The German firm GNB, Europe's largest producer of fuel storage casks, has given permission for USF&S to mass-produce its patented waste containers under license.

I met with Copson and Kirch in Georgetown, where USF&S rents a suite of offices. They outlined what everyone agrees to be a real problem: Commercial nuclear reactors produce huge amounts of spent fuel which contains plutonium, the material needed to produce nuclear weapons. An estimated 100,000 tons of spent fuel has piled up around the globe and no one has figured out a way to store it.

The U.S. nuclear industry is looking to a site at the Yucca Mountains in Nevada, but Congress has yet to approve that site. Meanwhile, spent fuel is piling up at nuclear plants around the country. Similar problems exist in Russia-- exacerbated by the fact that MinAtom is virtually bankrupt-- and in all countries that produce nuclear power. . . .

"Some people have billed us as anti-environmental, pro-nuclear, but it's really just the reverse," Copson says. . . .

Others take a less sanguine view of the USF&S scheme.

"The motivation for this plan is not world peace but dollars," said Patrick McGarey, an aide to Sen. Daniel Akaka of Hawaii, a leading opponent of USF&S.

"If they are successful many people are going to get rich very fast." McGarey pointed out that USF&S plans to charge $1 million per ton in storage fees, which could generate billions of dollars for the company annually.

Greenpeace opposes cross-border movement of nuclear waste and believe countries that produce it should take responsibility for storing it. "There is still no proven technology that stores radioactive waste without eventually contaminating the environment," the group says. . . .

Bullshit in the Pacific-- and Washington.

USF&S had an easy time lining up money and influence peddlers to back its plan. Finding a dump site proved more difficult. . . .

Copson explained to me that the Pacific was chosen because it lies between Russia and the U.S., and because it is littered with "useless dots of real estate." As he sees it, sacrificing a "tiny piece of bullshit in the Pacific" is a small price to pay in order to avoid the doomsday scenario of nuclear annihilation. . . .

USF&S first approached the Marshall Islands, a former U.S. protectorate which entered into a "Compact of Free Association" with the U.S. upon becoming independent in 1986.

The Defense Dept used the Marshalls to conduct 23 nuclear tests during the early days of the Cold War. The biggest was in 1954, when the U.S. detonated the 15-megaton "Bravo Shot"-- 1,000 times more powerful than the bomb dropped on Hiroshima-- on the Bikini atoll, a blast that exposed hundreds of Marshallese to radioactive fallout.

The feasibility study states that the Marshalls would make an "appropriate storage and disposal site" since some of the islands have already been rendered uninhabitable due to "varying levels of residual radioactivity" . . .

Another likely attraction (though one not mentioned in the study) was that Murphy's son, Tom, is deputy chief of mission at the U.S. embassy in the Marshalls capital of Majuro.

A feudal system prevails in the Marshalls, which is ruled by King Amata Kabua. On 10/14/94, the king received a fax from Murphy that laid out a preliminary proposal for a "global nuclear non-proliferation initiative."

In exchange for "exclusive use of one suitable atoll" for nuclear storage, the plotters pledged to provide the king with $10 million up front and $50 million annually for three years as the project was implemented. After operations began, the Marshalls would receive further millions through a profit sharing arrangement.

Annual revenues for the King Kabua's government total about $70 million, and the large sums of money offered up by USF&S appear to have whetted the monarch's interest. However, fierce local resistance arose when word of the plan leaked to the public and the king decided to turn the deal down.

Copson took the rejection badly. "They're all scam artists, banging the tin cup in front of the white man," he later said of the Marshallese to a reporter from Outside magazine.

"They'd open a whorehouse and sell their daughters and grandmothers for a dollar. They've never lived so good since that bomb, the fat lazy fu*ks."

Another possibility explored by USF&S was Midway Island, located 1,100 miles from Honolulu and site of a U.S. Navy base that the Pentagon had targeted for closing. Murphy wrote a letter to Navy Secretary John Dalton asking for a long-term lease on the island. He promised that his company's plans to store vast quantities of nuclear waste there "would not disturb wildlife in the Midway habitat." To the dismay of USF&S, the Navy selected a competing bid from the U.S. Fish and Wildlife Service, which will run Midway as a nature preserve.

The next port of call was Palmyra, a tiny atoll about 1,000 miles south of Hawaii which is owned by the Fullard-Leo family of Honolulu but administered by the Dept of the Interior. USF&S drew up plans that showed that all the world's spent fuel could fit in the atoll's 5,400-acre lagoon which would be filled with cement to prevent leakage. . . .

Once again, strong opposition to the plan arose when word leaked out about Murphy & Co's true intentions. The South Pacific Forum, an association of Pacific island governments that includes Australia and New Zealand, issued a statement that condemned the planned use of Palmyra as a "dumping ground for nuclear waste."

Hawaii's congressional delegation soon entered the fray, with all six members signing a letter to President Clinton in June of 1996 urging him to oppose the project. "We question the wisdom of sitting such a facility on an isolated atoll that is prone to erosion and extreme weather conditions," reads the letter. "Shipments of spent fuel and reprocessed nuclear materials by sea require extraordinary security measures. Even if careful precautions were observed, the safety of such cargo could not be guaranteed."

The death knell for the Palmyra plan came in August, when the White House sent Senator Akaka a letter promising that the Administration would "strongly oppose" the USF&S proposal. . . .

Copson was as bitter about this setback as he was about the unraveling of the Marshalls plan.

During our conversation he called Senator Akaka an "ignorant lightweight." McGarey, the senator's aide, would "realize the error of his ways when terrorists set off a bomb in Tel Aviv."

Undeterred by this latest setback, USF&S is focusing its efforts on obtaining the use of Wake Island, site of a bloody World War II battle and now largely uninhabited.

Wake is a major stopover for migratory birds and, like Midway, a wildlife refuge. . . .

* * *

March, 1991

Divided debate on a foregone conclusion.

From Bulletins, Vol. 47, No. 2

A number of ironies underlay the congressional debate on the Persian Gulf crisis leading up to the January 12 Senate and House votes for war.

The War of 1812, which 40 percent of the Senate and 38 percent of the House opposed, was the last time that Congress had been markedly divided about going to war. This time the division set a new record: 42 percent of the House and 47 percent of the Senate said no to the president's policy. The House supported the use of force against Iraq by a vote of 250-183 and the Senate, by a slim 52-47.

Many of the nation's military and political leaders resolved after the Vietnam War never to go to war without a united country behind the policy. Although the lessons of Vietnam were repeated theme of the debate, they were quickly shunted aside when the planes flew on January 16.

A Bush defeat may have proved embarrassing but probably would not have grounded the bombers. And any - congressional action with the force of law would have required not only a majority of both houses in the fiat instance, but also a two thirds majority to overcome a presidential veto.

For months the Bush administration and the nation's editorial writers flayed Congress for ducking the issue of war. In reality, the administration hoped to evade formal debate, uncertain of the outcome and fearing that dialogue would reveal national disunity.

Congressional leaders were also ambivalent. Majority Leader George Mitchell of Maine pledged a vote before the January 15 deadline but feared, correctly, that the vote would back the president' s policy. House Speaker Tom Foley of Washington also opposed the use of force and was unenthusiastic about a vote.

But the insistence of liberals such as California's Congressman Ron Dellums and Iowa's Sen. Tom Harkin helped force Congress to face the issue. Mitchell abandoned his usual cool demeanor and engaged in heated argument with Harkin on the Senate floor and in a private cloakroom over when to commence the debate.

Only after Congress scheduled a vote, and less than a week before it was held, did the administration decide to request formal authorization to use force against Saddam Hussein after January 15.

Another incongruity was that the antiwar faction was much stronger in the Senate than in the House. In the past, the House has voted to kill the B-2 stealth bomber, slash the Strategic Defense Initiative, and turn back chemical weapons production. The House has been much more sympathetic to efforts to end nuclear testing and block antisatellite weapons. The Senate, by contrast, has buried one successful House arms control initiative after another.

But Mitchell stitched together a formidable coalition favoring continued reliance on sanctions and diplomatic efforts and marching behind the banner of Armed Services Committee Chairman Sam Nunn of Georgia. At his December hearings, Nunn marshalled a number of respected former military and government leaders who counselled patience. He presented strong, well-reasoned arguments against immediate use of force.

In a further twist, however, some observers felt that Nunn was leading a battle he preferred to lose: that he feared weakening the U.S. position and the institution of the presidency.

Heads of two other key Senate committees were lined up on the side of sanctions: Intelligence's David Boren of Oklahoma and Foreign Relations head Claiborne Pell of Rhode Island. Senior moderates such as Lloyd Bentsen of Texas, Daniel Inouye of Hawaii, and the Senate's president pro tem, Robert Byrd of West Virginia, united with the Mitchell team. Michigan's Carl Levin was instrumental in drafting the language in the Democratic alternative and encouraged some of the most ardent supporters of Israel to get behind continued sanctions.

On the other hand, House leaders of the Armed Services, Foreign Affairs, and Intelligence committees all backed the president. A number of Israel' s staunchest allies, including Stephen Solarz of New York City, were also behind the war policy.

A critical point of contention was how effectively sanctions were crippling Iraq's economy and whether they would ultimately force the invader out of Kuwait.

In December, CIA director William Webster acknowledged that sanctions had obstructed 90 percent of Iraqs imports and 97 percent of its exports. The most effective peacetime embargo in history had blocked the sale of oil, Iraq's primary source of foreign exchange.

But in January, Webster turned policy advocate and placed a new slant on those facts.

In a January 10 letter, Webster argued that while sanctions were damaging Iraq's economy, the military impact was much less evident. And there was no indication, he said, that sanctions would persuade Saddam Hussein to bring his troops home.

Webster's letter to Capitol Hill had all the earmarks of a political put-up job.

Bureaucracies normally take weeks or months to churn out a policy paper, but the CIA director had responded within 24 hours to a letter from Congressman Les Aspin, Wisconsin Democrat, asking for his updated views on the effectiveness of sanctions. The letter was rushed to the Senate floor by Virginia's John Warner, an ardent Republican backer of the president, to counter arguments that sanctions were working.

South Carolina's Sen. Fritz Hollings cried:

"The cardinal rule of intelligence is do not enunciate policy; just give facts. When he testified earlier [Webster] gave the facts. Yesterday, in his letter to Congressman Aspin, he gave the policy, politicizing our intelligence.

"And he ought to be ashamed of it."

* * *

November 13, 2002

Ex-FBI Director Resigns from Accounting Board

By Marcy Gordon, Associated Press

WASHINGTON - Former FBI Director William Webster resigned yesterday as chairman of a special accounting oversight board, saying he wanted to avert "new distractions" as the congressionally created agency seeks to rebuild public confidence after a series of business scandals.

The move capped weeks of speculation regarding Webster's future in a debacle that already has brought the resignations of Bush appointee Harvey Pitt, chairman of the Securities and Exchange Commission, and the SEC's head accountant. . . .

Webster, who also once headed the CIA, announced his resignation in a letter to Pitt, who remains in office pending the naming of a replacement. Pitt quit earlier after a flap over his apparent failure to inform fellow SEC commissioners that Webster had headed the audit committee of a company being investigated for fraud.

President Bush last week voiced confidence in Webster's integrity, although Bush also said he wanted to see the outcome of an investigation of the circumstances surrounding Webster's selection. . . .

Pitt is facing investigations into whether he concealed from other SEC members Webster's role for a company that is under investigation. . . .

Creation of the oversight board was mandated by Congress last summer in legislation responding to the wave of accounting scandals at Enron, WorldCom and other big companies. The five-member board, to be independent of the accounting industry, will have subpoena authority and disciplinary powers. It is financed by fees from publicly traded companies.

The SEC inspector general and Congress' auditing arm, the General Accounting Office, are investigating the circumstances surrounding Webster's appointment, and the Senate Banking Committee plans hearings.

Pitt announced yesterday that the SEC commissioners had unanimously chosen Jackson Day, the agency's chief accountant, as acting chief accountant until a permanent replacement is named. . . .

Latest information from the horse's mouth: http://www.sec.gov

# # #

The SEC connection >>> Spotting the SEC

The BCCI connection >>> The Strange Saga of BCCI

The CIA and FBI connections >>> The Secret Nests

The PACIFIC ISLANDS connection >>> Broken Trust

The MILITARY-INDUSTRIAL connection >>> Nests in the Pentagon

The CARLYLE GROUP connection >>> Birds that Drink from Cesspools

The GEORGE MITCHELL connection >>> The American Red Double-Cross

The NUKEING OF BIRDS AND NATIVES connection >>> The Nuclear Nests

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