From the archive, originally posted by: [ spectre ]



lèse-majesté, lese majesty:
is a French phrase (literally meaning “injured majesty”) that is
pronounced either lez MAZH-es-TAI or lez MAJ-es-tee and is spelled
usually with the grave and acute accents. Today it means “an offense
against a sovereign” or, more generally, any slight or insult that
wounds someone’s dignity. [See FOREIGN PHRASES.]

Kleptocracy (sometimes Cleptocracy) (root: Klepto+cracy = rule by
thieves) is a pejorative, informal term for a government so corrupt
that no pretense of honesty remains. In a kleptocracy the mechanisms
of government are devoted to taxing the public at large, or using
their control of government processes in order to amass substantial
personal fortunes for the rulers and their cronies (collectively,
kleptocrats), or to keep said rulers in power through redistribution


a synopsis of Chapter 14: From Egalitarianism to Kleptocracy
by Jared Diamond, speaking on levels of societal organization

“The band has 5 to 80 people, are usually related by blood, typically
nomadic, have 1 language and ethnicity, have egalitarian government
with informal leadership, no bureaucracy, no formal structures for
conflict resolution, no economic specialization (e.g., Bushmen,

The tribe has hundreds of people, often fixed settlements, consist of
kin-based clans, still 1 ethnicity and language, have egalitarian or
“big-man” government, informal and often difficult conflict resolution
problems (e.g., much of New Guinea, Amazonia).

Chiefdoms have thousands of people, have 1 or more villages possibly
with a paramount village, have class and residence relationships,
still 1 ethnicity, have centralized often hereditary rule, include
monopoly and centralized conflict resolution, justify kleptocracy and
a redistributive economy (requiring tribute), have intensive food
production, early division of labor, luxury goods, etc…. (e.g.,
Polynesia, sub-Saharan Africa, etc.)

States have over 50,000 people, have many villages and a capital, have
class and residence based relationships, 1 or more languages and
ethnicities, centralized government, many levels of bureaucracy,
monopolies of force and information, have formalized laws and judges,
may justify kleptocracy, have intensive food production, division of
labor, pay taxes, public architecture, etc.

Kleptocrats maintain power by disarming the populace and arming the
elite, making the masses happy by redistributing the tribute, keeping
order and curbing violence (compared to bands and tribes), promoting
religion and ideology that justifies kleptocracy (and that promotes
self-sacrifice on behalf of others), building public works, etc.

States are especially good at developing weapons of war, providing
troops, promoting religion (fanaticism) and patriotic fervor that
makes troops willing to fight suicidally.  States arise not just from
the natural tendency of man (as Aristotle suggested), but by social
contract, in response to needs for irrigation (“hydraulic theory”),
and regional population size.  The large populations require intensive
food production, which contributes (1) seasonal workers for other
purposes, (2) stored food surpluses which feed specialists and other
elite, (3) sedentary living.  Increased opportunities in states for
conflicts forces the development of laws.  The processes by which
states form virtually never include voluntary merger, but rather (1)
merger under threat of force (e.g., the Cherokee Indian federation),
or (2) merger by conquest (e.g., the Zulus)–when population density
is high, the defeated men are often killed and the women taken in

Jared Diamond
email : jdiamond [at] geog [dot] ucla [dot] edu


‘I am re-reading Guns, Germs, and Steel by Jared Diamond and just
finished his chapters on kleptocracy, which is, broadly, “A government
characterized by rampant greed and corruption” [from the Greek
kleptein, to steal].

Specifically, Diamond is describing the ruling class of a nation state
that transfers tribute from producers to an elite (p. 276-277, Norton
trade paperback, 2003). I was struck by Diamond’s “four solutions,”
the ones that rulers have used to gain popular support while still
maintaining power (and riches)…and how much his model could be applied
to the world’s current crop of humongously compensated CEOs.

I’m as capitalistic as any businessman. I work hard for my earnings
and don’t – mainly – begrudge others’ higher salaries. But there’s a
parallel between what Diamond’s ruling kleptocrats have done
historically and what a number of C-level executives do with their

So very briefly, I’m putting down Diamond’s four solutions, and a
corporate interpretation of each.

Disarm the populace and arm the elite. – Well, think about what the
corporations do to “disarm” their employees, like fostering dependence
on healthcare benefits; and their stockholders, like forbidding them
to ask pointed questions during shareholders’ meetings. Corporations
arm their elites with similar (but smaller) executive compensation
packages and privileges.

Make the masses happy by redistributing much of the tribute received.
– How about slightly better returns on share price, or bonuses for
workers, or giving substantially to charity? Hmmm? Aren’t these ways
of “sharing the wealth,” but not very much of it?

Use the monopoly of force to promote happiness. – In other words, the
company will fire your keister if you question its behavior. Isn’t
that what happened to several of the Enron whistle-blowers? Or, the
company will move offshore, depriving the community of much-needed
jobs (which keep employees and their families happy).

Construct an ideology or religion justifying kleptocracy. – This one’s
pretty easy if you presume that capitalism is the reason and the
justification. But since I am a capitalist myself – without the hefty
salary – I would rather offer the “ideology of corporate entitlement,”
which has been heavily displayed by Enron, HealthSouth, and a few
other companies: we’re the best, so we deserve to be able to treat you
like peasants.” This kind of attitude runs throughout a given
organization…every employee feels the same way, no matter how little
he or she is involved in corporate management.

None of this is new. Wasn’t it Al Capp who coined the phrase more than
50 years ago, “What’s good for General Motors is good for the USA?” Or
was this from the musical version?’

‘After defining kleptocracy, author Jared Diamond says that the issue
with a kleptocracy is always how to maintain it. After all, this
system of government involves a small but powerful elite exploiting a
large population. (Sadly, I am growing convinced that America
abandoned democracy for corporate kleptocracy some time ago.) Diamond
says there are four solutions to the problem of how a kleptocracy can
maintain itself. Of likely interest to you, here is #4:

“The remaining way for kleptocrats to gain public support is to
construct an ideology or religion justifying kleptocracy” (p. 277).

Religious impulses almost certainly predate civilization. However, it
appears that most kleptocracies, starting with small chiefdoms and
extending through modern national governments, have recognized the
utility of religion. Superstitious beliefs may have originated as
methods for explaining confusing natural phenomena, but it seems that
they may persist today largely because of their role in justifying
kleptocracy. Without state sponsorship through the ages, the type of
organized religion we have today would not have been possible.

Diamond does not explicitly apply this to modern politics (at least
not in what I have read so far), but I can’t resist doing so. When I
examine contemporary American politics, I see the Republican party
talking the loudest about their religiosity. Why? Because their
policies are the most kleptocratic (i.e., they favor the wealthy at
the expense of the poor). In fact, they have few qualms about
exploiting the poor and even blame them for being poor! The need to
publicly announce their religion has been less necessary for Democrats
because their policies provide a more significant benefit to the
masses. Remember I said that Diamond gives four solutions to the
problem of maintaining a kleptocracy? #2 involves the redistribution
of wealth through popular public programs, and this describes the

The points I’m making here are not new. They have been made repeatedly
throughout historical and political literature. And yet, they are not
brought up often enough in modern political discourse. While we
continue to criticize Republican efforts to merge church and state,
let us also expose why they need religion so much.’

‘Diamond sees social structure, a kleptocracy, as ultimately a factor
intrinsic to growing, settled, agricultural populations. He sees it as
inevitable. The best the oppressed can do, in Diamond’s opinion, is to
oust one group of kleptocrats for hopefully a more benevolent group of
kleptocrats; and the big questions of history were determined largely
by environmental, geographic and techological factors, not even
individual human agency. For Diamond, if you develop a settled,
agricultural society… you are inevitably headed towards an
exploitive state.

Obviously, this is a problematic view for anarchists.

I actually studied Marx’s ethnographic notebooks, and Engels. I read
Morgan. I focused in on the Iroquois, the primary example Marx, Engels
and Morgan use for a stateless communist society of
“barbarians” (though Morgan over emphasizes “the hunt” and thus makes
“savages” out of the Iroquois at the point in their history of their
lowest population in the 1800s).’

‘The obvious corollary of this theory is that most successful modern
societies are, in fact, kleptocracies. The key is to use the four
methods to gain popular support in order to redistribute as much
wealth to the ruling class as the populace will support. If the ruling
class takes too much, it will be overthrown by a new ruling class
(which’ll do ditto).

So, is the US a kleptocracy? Of course, it is! Is that bad? Well, it
depends on who you are in society, and whether the kleptocracy is
efficient and fair over the long term.’

Our President’s Statement on Kleptocracy

“For too long, the culture of corruption has undercut development and
good governance and bred criminality and mistrust around the world.
High-level corruption by senior government officials, or kleptocracy,
is a grave and corrosive abuse of power and represents the most
invidious type of public corruption. It threatens our national
interest and violates our values. It impedes our efforts to promote
freedom and democracy, end poverty, and combat international crime and
terrorism. Kleptocracy is an obstacle to democratic progress,
undermines faith in government institutions, and steals prosperity
from the people. Promoting transparent, accountable governance is a
critical component of our freedom agenda.

At this year’s G-8 meeting in St Petersburg, my colleagues joined me
in calling for strengthened international efforts to deny kleptocrats
access to our financial systems and safe haven in our countries;
stronger efforts to combat fraud, corruption, and misuse of public
resources; and increased capacity internationally to prevent
opportunities for high-level public corruption. Today, I am announcing
a new element in my Administration’s plan to fight kleptocracy, The
National Strategy to Internationalize Efforts against Kleptocracy,
which sets forth a framework to deter, prevent, and address high-
level, public corruption. It identifies critical tools to detect and
prosecute corrupt officials around the world, so that the promise of
economic assistance and growth reaches the people.

Our objective is to defeat high-level public corruption in all its
forms and to deny corrupt officials access to the international
financial system as a means of defrauding their people and hiding
their ill-gotten gains. Given the nature of our open, accessible
international financial system, our success in fighting kleptocracy
will depend upon the participation and accountability of our partner
nations, the international financial community, and regional and
multilateral development institutions. Together, we can confront
kleptocracy and help create the conditions necessary for people
everywhere to enjoy the full benefits of honest, just, and accountable

2007/09/05  /  The United States, World’s First Corporate Kleptocracy

“When Ronald Reagan said, “…government is not the solution to our
problem; government is the problem,” many people thought it would
usher in a new era of fiscal responsibility, but to the contrary,
taxes decreased, government spending increased, and the national debt
went through the roof. In fact, it took 6 of 8 years of the Clinton
administration to turn those deficits into surpluses, and then only by
virtue of the fact that the economy boomed in the 90s. But now, with
the Bush oligarchy coming to an end, we see what really became of the
Reagan’s legacy. The GOP has turned our nation into the world’s first
fully functional ‘Corporate Kleptocracy’, a government/corporate
partnership whose goal is acquire as much of the nation’s wealth as

In a traditional kleptocracy, the government directly extends the
power and wealth of the ruling class through taxes and the looting of
wealth in natural resources. The United States is no longer rich in
resources but is rich in the productivity of its workers. Our country
is also rich in geo-political influence and military might. And so we
find the Bush Administration, at almost every turn, advancing policies
that indirectly transfer wealth to the powerful by:

1) Removing regulations on, curtailing oversight of, or blocking
corrective action against predatory industries. Example: Enron and the
gaming of California’s electrical markets with FERC blocking
corrective action after the fact.

2) Creating geo-political instability designed to enhance the profits
of particular industries. Example: The Iraq War with it’s direct and
indirect benefits for the defense and petroleum industries.

3) Actively supporting inefficient, but highly profitable, corporate
service delivery systems instead of more efficient government systems.
Examples: Private insurer health care and mandatory non-governmental
retirement financing

4) Supporting predatory laws that amount to non-tax “taxes” that favor
corporations over individuals. Examples: Bankruptcy reform, medical
savings accounts, privatized social-security

5) Massive politicization of the regulatory (EPA, OSHA), investigative
(DoJ, FBI, BATF, Customs), military, and judicial functions of
government, thereby ensuring compliance that supports the other four

Sort of makes you feel like Neo in The Matrix, doesn’t it? Not a
battery…a wealth creation machine for corporations. The proof in the
stats. Real income for the majority of Americans has not increased in
7 years while corporate profits have ballooned and are, for certain
industries, at historic highs. Productivity continues to climb while
wages fall, even during a period of low inflation.

One wonders how long such a system can last since most kleptocracies
fail, bloodily, when there is no more wealth to loot. The powerful
leave, and poor fight each other for what’s left.”






Kleptocracy and Divide-and-Rule: A Model of Personal Rule
‘Many developing countries have suffered under the personal rule of
‘kleptocrats’, who implement highly inefficient economic policies,
expropriate the wealth of their citizens, and use the proceeds for
their own glorification or consumption. The incidence of kleptocracy
is a serious impediment to development. Yet how do kleptocrats
survive? How can they apparently exploit the entire citizenship of
countries and not foment successful opposition? In this research we
argue that the success of kleptocrats rests on their ability to use a
particular type of political strategy, which we refer to as ‘divide-
and-rule’. Members of society need to cooperate in order to depose a
kleptocrat. A kleptocrat, however, may defuse such cooperation by
imposing punitive rates of taxation on any citizen who proposes such a
move, and redistributing the benefits to those who need to agree to
it. Thus kleptocrats can intensify the collective action problem by
threats that remain off the equilibrium path. In equilibrium, all are
exploited and no one challenges the kleptocrat because of the threat
of divide-and-rule. The divide-and-rule strategy is made possible by
the weakness of the institutions in these societies, and highlights
the different nature of politics between strongly- and weakly-
institutionalized polities. We show that foreign aid and rents from
natural resources typically help kleptocratic rulers by providing them
with greater resources to buy off opponents. Kleptocratic policies are
also more likely to arise when opposition groups are shortsighted and
when the average productivity in the economy is low. We also find that
greater inequality between producer groups may constrain kleptocratic
policies because more productive groups are more difficult to buy

Daron Acemoglu
email : daron [at] mit [dot] edu


“The answer is a kind of corruption of the political process. Or
better, a “corruption” of the political process. I don’t mean
corruption in the simple sense of bribery. I mean “corruption” in the
sense that the system is so queered by the influence of money that it
can’t even get an issue as simple and clear as term extension right.
Politicians are starved for the resources concentrated interests can
provide. In the US, listening to money is the only way to secure
reelection. And so an economy of influence bends public policy away
from sense, always to dollars.

The point of course is not new. Indeed, the fear of factions is as old
as the Republic. There are thousands who are doing amazing work to
make clear just how corrupt this system has become. There have been
scores of solutions proposed. This is not a field lacking in good
work, or in people who can do this work well.

But a third person — this time anonymous — made me realize that I
wanted to be one of these many trying to find a solution to this
“corruption.” This man, a Republican of prominence in Washington,
wrote me a reply to an email I had written to him about net
neutrality. As he wrote, “And don’t shill for the big guys protecting
market share through neutrality REGULATION either.”

“Shill.”  If you’ve been reading these pages recently, you’ll know my
allergy to that word. But this friend’s use of the term not to condemn
me, but rather as play, made me recognize just how general this
corruption is. Of course he would expect I was in the pay of those
whose interests I advanced. Why else would I advance them? Both he and
I were in a business in which such shilling was the norm. It was
totally reasonable to thus expect that money explained my desire to
argue with him about public policy.

I don’t want to be a part of that business. And more importantly, I
don’t want this kind of business to be a part of public policy making.
We’ve all been whining about the “corruption” of government forever.
We all should be whining about the corruption of professions too. But
rather than whining, I want to work on this problem that I’ve come to
believe is the most important problem in making government work.

And so as I said at the top (in my “bottom line”), I have decided to
shift my academic work, and soon, my activism, away from the issues
that have consumed me for the last 10 years, towards a new set of
issues: Namely, these. “Corruption” as I’ve defined it elsewhere will
be the focus of my work. For at least the next 10 years, it is the
problem I will try to help solve.

I do this with no illusions. I am 99.9% confident that the problem I
turn to will continue exist when this 10 year term is over. But the
certainty of failure is sometimes a reason to try. That’s true in this

Nor do I believe I have any magic bullet. Indeed, I am beginner. A
significant chunk of the next ten years will be spent reading and
studying the work of others. My hope is to build upon their work; I
don’t pretend to come with a revolution pre-baked.

Instead, what I come with is a desire to devote as much energy to
these issues of “corruption” as I’ve devoted to the issues of network
and IP sanity. This is a shift not to an easier project, but a
different project. It is a decision to give up my work in a place some
consider me an expert to begin work in a place where I am nothing more
than a beginner.”

Lawrence Lessig
email : lessig [at] lessig08 [dot] org / lessig [at] pobox [dot] com


“Following the good practice of others, and following suggestions of
inconsistency by others, I offer the following disclosure statement.

How I make money
I am a law professor. I am paid to teach and write in fields that
interest me. Never is my academic research directed by anyone other
than I. I am not required to teach any particular course; I am never
required or even asked by anyone with authority over me to write about
a particular subject or question. I am in this important sense a free

Business Attachments
I have no regular clients. I am on board of a number of non-
profits, including EFF, FSF, PLOS, Software Freedom Law Center,
FreePress, PublicKnowledge, MusicBrainz, and Creative Commons.

I serve on no commercial boards. I don’t take stock-options to
serve on boards or advisory boards.

The Non-Corruption (NC) Principle
It is a special privilege that I have a job that permits me to say
just what I believe, and not what I’m paid to say. That freedom used
to be the norm among professionals. It is less and less the norm
today. Lawyers at one time had a professional ethic that permitted
them to say what they believe. Now the concept of “business conflicts”
— meaning, a conflict with the commercial interests of actual or
potential clients — silences many from saying what they believe.
Doctors too are hired into jobs where they are not allowed to discuss
certain medical procedures (See, e.g., Rust v. Sullivan). Researchers
at “think tanks” learn who the funders are as a first step to deciding
what questions will be pursued. And finally, and most obviously, the
same is true of politicians: The constant need to raise money just to
keep their job drives them to develop a sixth sense about what sorts
of statements (whether true or not) will cost them fundraising

With perhaps one exception (politicians), no one forces
professionals into this compromise. (The exception is because I don’t
see how you survive in politics, as the system is, without this
compromise, unless you are insanely rich.) We choose the values we
live by ourselves. And as the freedom I have to say what I believe is
the most important part of my job to me, I have chosen a set of
principles that limit any link between money and the views I express.

I call these principles “non-corruption” principles because I
believe that behavior inconsistent with these principles, at least
among professionals, is a kind of corruption. Obviously, I don’t mean
“corruption” in the crudest sense. Everyone would agree that it is
wrong for a global warming scientist to say to Exxon, “if you pay me
$50,000, I’ll write an article criticizing global warming.” That is
not the sort of “corruption” I am talking about.

I mean instead “corruption” in a more subtle sense. We all
understand that subtle sense when we look at politicians. We don’t
recognize it enough when we think about lawyers, doctors, scientists,
and professors.

I want to increase this recognition, even at the risk of
indirectly calling some of my friends “corrupt.” Norms are uncertain
here. I hope they change. But until they change, we should not condemn
those with differing views. We should engage them. I intend this to be
the beginning of that engagement.

So, the NC principle:
The simple version is just this: I don’t shill for anyone.

The more precise version is this: I never promote as policy a
position that I have been paid to advise about, consult upon, or write
about. If payment is made to an institution that might reasonably be
said to benefit me indirectly, then I will either follow the same
rule, or disclose the payment.

The precise version need to be precisely specified, but much can
be understood from its motivation: “Corruption” in my view is the
subtle pressure to take views or positions because of the financial
reward they will bring you. “Subtle” in the sense that one’s often not
even aware of the influence. (This is true, I think, of most
politicians.) The rule is thus designed to avoid even that subtle

But isn’t disclosure always enough?
Some would say this principle is too strict. That a simpler rule
— indeed the rule that governs in most of these contexts — simply
requires disclosure.

I don’t agree with the disclosure principle. In my view, it is too
weak. The best evidence that it is too weak is the United States
Congress. All know, or can know, who gives what to whom. That hasn’t
chilled in the least the kind of corruption that I am targeting here.
More generally: if everyone plays this kind of corruption game, then
disclosure has no effect in stopping the corruption I am targeting.
Thus, in my view, it is not enough to say that “Exxon funded this
research.” In my view, Exxon should not be directly funding an
academic to do research benefiting Exxon in a policy dispute.

What the NC principle is not
The NC principle is about money. It is not about any other
influence. Thus, if you’re nice to me, no doubt, I’ll be nice to you.
If you’re respectful, I’ll be respectful back. If you flatter me, I
doubt I could resist flattering you in return. If you push causes I
believe in, I will likely push your work as well. These forms of
influence are not within the scope of the NC principle — not because
they are not sometimes troubling, but because none of them involve
money. I mean the NC principle only to be about removing the influence
of money from the work of a professional. I don’t think there’s any
need to adopt a rule to remove these other influences.”

‘Recent thoughts:
* kleptocracy – associated with state and the necessary
redistribution that comes with high specialization, population and
population density. Teaches one to devalue things that have value
(e.g. time, health, relationships etc.) and to value things that have
little real value (e.g. name brands, popularity, etc.) Derives power
from the fears and insecurities of the citizens. Stands in opposition
to more egalitarian societies of the past (recent and distant), in its
class divisions and allowance of slavery
* megaklept – a tool of the kleptocracy that takes your money/time
and gives you nothing in return (e.g. insurance companies,
* gigaklept – a tool of the kleptocracy that leaves you in worse
condition than before you interacted with it (e.g. the tobacco
* kleptocrat – an agent of the kleptocracy
* major kleptocrat – an agent of the kleptocracy that imposes
kleptocratism on others, often against their will (e.g. my uncle who,
without anyone’s permission, gave me a perm when I was three years
* minor kleptocrat – an unwitting agent of the kleptocracy. (e.g.
parents who let their children watch way too much TV)
* kleptovision – the TV. A very powerful tool of the kleptocracy.
* kleptonet – the internet, when used as a tool of the

Hypothesis – those that are slaves to the kleptocracy are often
unhappy and their joi de vivre would return if they began to emerge
from and limit their interaction with the kleptocracy.

Goal – to eliminate all interaction with gigaklepts and minimize
interaction with megaklepts in an effort free oneself from the global
kleptocracy and decrease its wide-ranging power.

Challenge – to find ways to minimize the power of the kleptocracy in
one’s life.

Root out the kleptocrats at

Definitions (and some words) by Althea Grant and Karama Neal. Inspired
by Guns, Germs and Steel by Jared Diamond.’
email : karama [at] alum [dot] emory [dot] edu





Secret Report: Corruption is “Norm” Within Iraqi Government
BY David Corn  /  08/30/2007

As Congress prepares to receive reports on Iraq from General David
Petraeus and U.S. Ambassador Ryan Crocker and readies for a debate on
George W. Bush’s latest funding request of $50 billion for the Iraq
war, the performance of the government of Prime Minister Nouri al-
Maliki has become a central and contentious issue. But according to
the working draft of a secret document prepared by the U.S. embassy in
Baghdad, the Maliki government has failed in one significant area:
corruption. Maliki’s government is “not capable of even rudimentary
enforcement of anticorruption laws,” the report says, and, perhaps
worse, the report notes that Maliki’s office has impeded
investigations of fraud and crime within the government.

The draft–over 70 pages long–was obtained by The Nation, and it
reviews the work (or attempted work) of the Commission on Public
Integrity (CPI), an independent Iraqi institution, and other
anticorruption agencies within the Iraqi government. Labeled
“SENSITIVE BUT UNCLASSIFIED/Not for distribution to personnel outside
of the US Embassy in Baghdad,” the study details a situation in which
there is little, if any, prosecution of government theft and sleaze.
Moreover, it concludes that corruption is “the norm in many

The report depicts the Iraqi government as riddled with corruption and
criminals–and beyond the reach of anticorruption investigators. It
also maintains that the extensive corruption within the Iraqi
government has strategic consequences by decreasing public support for
the U.S.-backed government and by providing a source of funding for
Iraqi insurgents and militias.

The report, which was drafted by a team of U.S. embassy officials,
surveys the various Iraqi ministries. “The Ministry of Interior is
seen by Iraqis as untouchable by the anticorruption enforcement
infrastructure of Iraq,” it says. “Corruption investigations in
Ministry of Defense are judged to be ineffectual.” The study reports
that the Ministry of Trade is “widely recognized as a troubled
ministry” and that of 196 corruption complaints involving this
ministry merely eight have made it to court, with only one person

The Ministry of Health, according to the report, “is a sore point;
corruption is actually affecting its ability to deliver services and
threatens the support of the government.” Investigations involving the
Ministry of Oil have been manipulated, the study says, and the “CPI
and the [Inspector General of the ministry] are completely ill-
equipped to handle oil theft cases.” There is no accurate accounting
of oil production and transportation within the ministry, the report
explains, because organized crime groups are stealing oil “for the
benefit of militias/insurgents, corrupt public officials and foreign

The list goes on: “Anticorruption cases concerning the Ministry of
Education have been particularly ineffective….[T]he Ministry of Water
Resources…is effectively out of the anticorruption fight with little
to no apparent effort in trying to combat fraud….[T]he Ministry of
Labor & Social Affairs is hostile to the prosecution of corruption
cases. Militia support from [Shia leader Moqtada al-Sadr] has
effectively made corruption in the Ministry of Transportation
wholesale according to investigators and immune from prosecution.”
Several ministries, according to the study, are “so controlled by
criminal gangs or militias” that it is impossible for corruption
investigators “to operate within [them] absent a tactical [security]
force protecting the investigator.”

The Ministry of the Interior, which has been a stronghold of Shia
militias, stands out in the report. The study’s authors say that
“groups within MOI function similarly to a Racketeer Influenced and
Corrupt Organization (RICO) in the classic sense. MOI is a ‘legal
enterprise’ which has been co-opted by organized criminals who act
through the ‘legal enterprise’ to commit crimes such as kidnapping,
extortion, bribery, etc.” This is like saying the mob is running the
police department. The report notes, “currently 426 investigations are
hung up awaiting responses for documents belonging to MOI which
routinely are ignored.” It cites an episode during which a CPI officer
discovered two eyewitnesses to the October 2006 murder of Amer al-
Hashima, the brother of the vice president, but the CPI investigator
would not identify the eyewitnesses to the Minister of the Interior
out of fear he and they would be assassinated. (It seemed that the
killers were linked to the Interior Ministry.) The report adds, “CPI
investigators assigned to MOI investigations have unanimously
expressed their fear of being assassinated should they aggressively
pursue their duties at MOI. Thus when the head of MOI intelligence
recently personally visited the Commissioner of CPI…to end
investigations of [an] MOI contract, there was a clear sense of
concern within the agency.”

Over at the Defense Ministry, the report notes, there has been a
“shocking lack of concern” about the apparent theft of $850 million
from the Iraqi military’s procurement budget. “In some cases,” the
report says, “American advisors working for US [Department of Defense]
have interceded to remove [Iraqi] suspects from investigations or
custody.” Of 455 corruption investigations at the Defense Ministry,
only 15 have reached the trial stage. A mere four investigators are
assigned to investigating corruption in the department. And at the
Ministry of Trade, “criminal gangs” divide the spoils, with one
handling grain theft, another stealing transportation assets.

Part of the problem, according to the report, is Maliki’s office: “The
Prime Minister’s Office has demonstrated an open hostility” to
independent corruption investigations. His government has withheld
resources from the CPI, the report says, and “there have been a number
of identified cases where government and political pressure has been
applied to change the outcome of investigations and prosecutions in
favor of members of the Shia Alliance”–which includes Maliki’s Dawa

The report’s authors note that the man Maliki appointed as his
anticorruption adviser–Adel Muhsien Abdulla al-Quza’alee–has said
that independent agencies, like the CPI, should be under the control
of Maliki. According to the report, “Adel has in the presence of
American advisors pressed the Commissioner of CPI to withdraw cases
referred to court.” These cases involved defendants who were members
of the Shia Alliance. (Adel has also, according to the report,
“steadfastly refused to submit his financial disclosure form.”) And
Maliki’s office, the report says, has tried to “force out the entire
leadership of CPI to replace them with political appointees”–which
would be tantamount to a death sentence for the CPI officials. They
now live in the Green Zone. Were they to lose their CPI jobs, they
would have to move out of the protected zone and would be at the mercy
of the insurgents, militias, and crime gangs “who are [the] subjects
of their investigations.”

Maliki has also protected corrupt officials by reinstating a law that
prevents the prosecution of a government official without the
permission of the minister of the relevant agency. According to a memo
drafted in March by the U.S. embassy’s anticorruption working group–a
memo first disclosed by The Washington Post–between September 2006
and February 2007, ministers used this law to block the prosecutions
of 48 corruption cases involving a total of $35 million. Many other
cases at this time were in the process of being stalled in the same
manner. The stonewalled probes included one case in which Oil Ministry
employees rigged bids for $2.5 million in equipment and another in
which ministry personnel stole 33 trucks of petroleum.

And in another memo obtained by The Nation–marked “Secret and
Confidential”–Maliki’s office earlier this year ordered the
Commission on Public Integrity not to forward any case to the courts
involving the president of Iraq, the prime minister of Iraq, or any
current or past ministers without first obtaining Maliki’s consent.
According to the U.S. embassy report on the anticorruption efforts,
the government’s hostility to the CPI has gone so far that for a time
the CPI link on the official Iraqi government web site directed
visitors to a pornographic site.

In assessing the Commission on Public Integrity, the embassy report
notes that the CPI lacks sufficient staff and funding to be effective.
The watchdog outfit has only 120 investigators to cover 34 ministries
and agencies. And these investigators, the report notes, “are closer
to clerks processing paperwork rather than investigators solving
crimes.” The CPI, according to the report, “is currently more of a
passive rather than a true investigatory agency. Though legally
empowered to conduct investigations, the combined security situation
and the violent character of the criminal elements within the
ministries make investigation of corruption too hazardous.”

CPI staffers have been “accosted by armed gangs within ministry
headquarters and denied access to officials and records.” They and
their families are routinely threatened. Some sleep in their office in
the Green Zone. In December 2006, a sniper positioned on top of an
Iraqi government building in the Green Zone fired three shots at CPI
headquarters. Twelve CPI personnel have been murdered in the line of
duty. The CPI, according to the report, “has resorted to arming people
hired for janitorial and maintenance duty.”

Radhi al-Radhi, a former judge who was tortured and imprisoned during
Saddam Hussein’s regime and who heads the CPI, has been forced to live
in a safe house with one of his chief investigators, according to an
associate of Radhi who asked not to be identified. Radhi has worked
with Stuart Bowen Jr., the Special Inspector General for Iraq
Reconstruction, who investigates fraud and waste involving U.S.
officials and contractors. His targets have included former Defense
Minister Hazem Shalaan and former Electricity Minister Aiham
Alsammarae. And Radhi himself has become a target of accusations. A
year ago, Maliki’s office sent a letter to Radhi suggesting that the
CPI could not account for hundreds of thousands of dollars in expenses
and that Radhi might be corrupt. But, according to the US embassy
report, a subsequent audit of the CPI was “glowing.” In July, the
Iraqi parliament considered a motion of no confidence in Radhi-a move
widely interpreted as retaliation for his pursuit of corrupt
officials. But the legislators put off a vote on the resolution. In
late August, Radhi came to the United States. He is considering
remaining here, according to an associate.

Corruption, the report says, is “one of the major hurdles the Iraqi
government must overcome if it is to survive as a stable and
independent entity.” Without a vigorous anticorruption effort, the
report’s authors assert, the current Iraqi government “is likely to
loose [sic] the support of its people.” And, they write, continuing
corruption “will likely fund the violent groups that our troops are
likely to face.” Yet, according to the report, the U.S. embassy is
providing “uncertain” resources for anticorruption programs. “It’s a
farce,” says a U.S. embassy employee. “There is a budget of zero
[within the embassy] to fight corruption. No one ever asked for this
report to be written. And it was shit-canned. Who the hell would want
to release it? It should infuriate the families of the soldiers and
those who are fighting in Iraq supposedly to give Maliki’s government
a chance.”

Beating back corruption is not one of the 18 congressionally mandated
benchmarks for Iraq and the Maliki government. But this hard-hitting
report–you can practically see the authors pulling out their hair–
makes a powerful though implicit case that it ought to be. The study
is a damning indictment: widespread corruption within the Iraqi
government undermines and discredits the U.S. mission in Iraq. And the
Bush administration is doing little to stop it.

For Iraq’s Oil Contracts, a Question of Motive
BY Peter S. Goodman  /  June 29, 2008

From the first days that American-led forces took control of Iraq, the
conquering army took pains to broadcast that it was there to liberate
the country, not occupy it, and certainly not to cart off its riches.
Nowhere were such words more carefully dispensed than on the subject
of Iraq’s oil.

As they surveyed facilities in the weeks after Saddam Hussein’s
government fell, American officials said they were merely advising
Iraqis on how to increase production to finance the democratic nation
being erected across desert sands that, conveniently, held the third-
largest oil reserves on earth.

Many critics of the invasion derided that characterization. In Arab
countries and among some people in America, there was suspicion that
the war was a naked grab for oil that would open Iraq to multinational
energy giants. President Bush had roots in the Texas oil industry.
Vice President Cheney had overseen Halliburton, the oil services
company. Whatever else happened, such critics said, energy players
with links to the White House would surely wind up with a nice piece
of the spoils.

Behind those competing conceptions was a fundamental reality that
forms the wallpaper for American engagement in the Middle East: oil,
and its critical importance to the American economy, has for decades
been a paramount interest of the United States in the region. Almost
everything the United States has tried to do there — propping up
autocrats or seeking democracy, fighting terrorism or withstanding
Soviet influence, or, in this case, toppling the dictator Saddam
Hussein — could affect the availability of oil for American markets
and therefore entailed some calculation about it.

Today, the question hanging over Iraq is whether its natural endowment
will be used to help create a sustainable new state, or will instead
be managed in ways that reward the cronies and allies of the country
whose army toppled Mr. Hussein. Or perhaps both at the same time.

That basic question was yanked back to the fore recently when word
emerged from Baghdad, in a report in The New York Times, that the
Iraqi oil ministry was close to awarding contracts to service its oil
fields to some of the largest Western oil companies. While relatively
small, these contracts could serve as a foot in the door for much more
lucrative licenses to explore widely for Iraqi oil.

Some 40 companies from around the world had jockeyed for the
contracts, but they were being awarded without competitive bids, the
report said. Those about to land the deals — Exxon Mobil, Shell, BP
and Total — had held oil rights in Iraq before Mr. Hussein
nationalized the fields and kicked them out more than three decades
ago. They all came from countries that had either been stalwart allies
of the Bush administration or — in the case of France, which is home
to Total — had lately increased their support for the American-led
campaign to isolate Iran.

Just as striking were the companies that failed to capture a foothold:
the Russian oil giant Lukoil, which had signed a deal to exploit a
huge field in southern Iraq while Mr. Hussein was still in power, only
to see it revoked just before he fell, and Chinese firms with their
own claims. Before the 2003 invasion, the Russian and Chinese
governments had lent muscle on the United Nations Security Council
toward fending off American-led sanctions aimed at the Hussein

Iraqi officials said the no-bid deals reflected nothing more than
pragmatic stewardship. Iraq needs to get more oil out of the ground to
finance reconstruction, they said, and the oil giants getting the
contracts have the skill to make that happen.

But those most suspicious of the Bush administration’s motives fixed
on the contracts as validation. They accused the administration of
pulling strings and shelving concerns about preserving Iraqi
sovereignty, in favor of expedient deal-making in a time of exploding
oil prices. “There does seem to be pressure from American officials
brought on the Iraqi oil ministry to favor friendly countries and
punish unfriendly countries,” said Michael T. Klare, a political
scientist at Hampshire College and author of the recent book “Rising
Powers, Shrinking Planet: The New Geopolitics of Energy” (Henry Holt).
“That’s the way it has to look to an outsider.”

In the days after word of the deals leaked out, three senators,
including Charles E. Schumer, the New York Democrat, demanded that the
Bush administration somehow cancel the contracts, arguing that they
would damage American credibility.

The White House disowned any role and said the senators were being
hypocritical. Here they were, in effect, accusing the administration
of orchestrating the deals, while calling for orchestration to make
them disappear. “Iraq is a sovereign country,” the White House
spokeswoman, Dana Perino, told reporters. “It can make decisions based
on how it feels that it wants to move forward.”

Sovereignty has been a subject wrapped in thorns ever since American-
led forces drove Mr. Hussein from his palace. Arguments over who
really makes decisions in Iraq, and for whose benefit, cut to the
heart of the very point of the war.

This tension has often hamstrung American efforts, making it difficult
for those on the ground to act decisively. When looting swept across
the country after Mr. Hussein’s government fell, American and British
forces traced their failure to crack down against civilians in part to
a reluctance to be seen as strong-armed occupiers. But their inaction
instead aroused the disgust of many Iraqis when the looters dismantled
much of the nation. Oil has been a more delicate area. Any future
Iraqi government would clearly need hefty oil revenues, and that
requires significant modernization.

In the early days after the Americans took over in May 2003, I drove
with a team from the United States Army Corps of Engineers in Kirkuk
to meet with the head of the North Oil Company, one of two state-owned
giants. The Americans were keen that North Oil hire a private security
firm to guard local installations.

On the way over, the American commanding officer reminded his men that
they were there as advisers, and should treat the Iraqi executive with
deference. But within minutes the Americans were haranguing the
company chief for moving too slowly. Later, the Americans vented about
how much easier things would be if they were simply running the show.
“I like to think of us as really nice conquerors,” one of the
Americans said.

The Pentagon dispatched Phillip J. Carroll, a former head of Shell’s
operations in the United States, to advise the Iraqi oil ministry.
Among critics of the war, it was assumed that Mr. Carroll was there to
make sure that Mr. Hussein’s allies would be walled out of the future
Iraqi oil business while the United States and its friends got the
choice opportunities.

Mr. Carroll dismissed such talk when I spoke with him shortly after he
arrived in Baghdad, but he signaled that the shelf life of any
contract dating back to Saddam might be brief. “There will have to be
an evaluation by the ministry of those contracts and a determination
of whether they were made in the best interests of the Iraqi people,”
Mr. Carroll said.

Five years later, the Iraqi oil ministry is about to hand out secretly
negotiated contracts to a few companies that Saddam Hussein removed,
while excluding firms from the countries that had better relations
with the dictator.

In an interview last week, Mr. Carroll said he assumed critics would
assert unsavory motives, but he said that missed the point. “These
companies are long familiar with Iraq and have wonderful technology
and loads of money,” he said. “The Iraqis could develop their own
skills by learning from the international oil companies.” But energy
experts argue that Iraq is one of the easier places on earth to summon
oil from the ground, making the pedigree of the companies less

No oil law has yet been agreed upon concerning how the oil royalties
will be shared among Iraq’s factions. So, as the Bush administration
enters its final months, much about the future of Iraq’s oil remains a
mystery — expect for which companies will get the first shot at the
rewarding business of extracting more of it.





Mugabe Victory in Zimbabwe Elections a ‘Joke’
BY Louis Weston & Peta Thornycroft  /  June 30, 2008

HARARE, Zimbabwe — President Mugabe was last night sworn in to a sixth
term as president of Zimbabwe, extending his 28 years in power after
officials proclaimed he had been re-elected by a landslide.
Maintaining the fiction that the vote was a contested poll, the
Zimbabwe Election Commission said that Mr. Mugabe received 2,150,269
votes — or more than 85% — against 233,000 for Morgan Tsvangirai, the
leader of the opposition Movement for Democratic Change who won the
first round in March.

Between the two polls Mr. Mugabe’s Zanu-PF movement launched a
campaign of violence against the opposition in which at least 86
people were killed, and Mr. Tsvangirai pulled out of the election.
“This is an unbelievable joke and act of desperation on the part of
the regime,” the MDC’s spokesman, Nelson Chamisa, said. “It qualifies
for the Guinness Book of Records as joke of the year. Mugabe will
never win an election except when he’s contesting against himself.”

Prayers at the inauguration were led by an Anglican ally who broke
away from the church, Nolbert Kunonga. “We thank you Lord for this
unique and miraculous day,” he said. “You have not failed our leader.”
Mr. Mugabe waved a Bible as he recited “so help me God,” to cheers
from his supporters.

Mr. Tsvangirai was invited to the event but declined. “The
inauguration is meaningless,” he said. “The world has said so,
Zimbabwe has said so. So it’s an exercise in self-delusion.”
Ambassadors in Harare were conspicuous by their absence from the

Although Mr. Mugabe offered to hold talks with the opposition the
absence of the word “negotiations” was noticeable and analysts said he
intends to remain in office as long as possible. “It is my hope that
sooner rather than later, we shall as diverse political parties hold
consultations towards such serious dialogue as will minimize our
difference and enhance the area of unity and co-operation,” Mr. Mugabe

Election observers from the Southern African Development Community
said that the poll failed to reflect the will of the people. Almost
400,000 Zimbabweans defied the threat of violent retribution by Mr.
Mugabe’s thugs to vote against him or spoil their ballot papers,
official results released on yesterday show.

According to the Zimbabwe Election Commission’s figures, the turnout
of 42% was almost exactly the same as the first round. But many
polling stations were virtually deserted throughout election day.
Papers were spoiled. With 21,127 votes in Bulawayo, Zimbabwe’s second
largest city and an opposition stronghold, Mr. Mugabe lost to the
combined total of 13,291 votes for Mr. Tsvangirai and 9,166 spoiled

Only a few independent observers were accredited for the election. And
the Zimbabwe Election Support Network — which mounted the most
comprehensive monitoring exercise in the first round — pulled out in
protest. Consequently, no unbiased verification of the figures is
possible and the true tallies may never be known.

For weeks, Zanu-PF militias have terrorized Zimbabweans, warning them
they will launch Operation Red Finger, which will target anyone whose
digit is not marked with ink to show that they cast a vote. They will
also target anyone who checks show to have backed Mr Tsvangirai.

Militias force some to vote for Zimbabwe’s Mugabe
BY Cris Chinaka  /  June 27, 2008

HARARE — Many Zimbabweans boycotted their one-candidate election on
Friday but witnesses and monitors said government militias forced
people to vote for 84-year-old President Robert Mugabe in some areas.
The vote, held despite a storm of condemnation from inside and outside
Africa, was denounced as a sham by Western powers and opposition
leader Morgan Tsvangirai.

Tsvangirai, who won the first round on March 29, pulled out of the
poll a week ago and took refuge in the Dutch embassy because of state-
backed violence he said had killed almost 90 of his supporters. He
told a news conference millions of people were staying away from the
polls despite intimidation. “What is happening today is not an
election. It is an exercise in mass intimidation with people all over
the country being forced to vote,” Tsvangirai said.

A witness in Chitungwiza town, south of Harare, told Reuters voters
were forced to hand the serial number of their ballot paper and their
identity details to an official from Mugabe’s ZANU-PF party so he
could see how they voted. The Zimbabwe Crisis Coalition rights group
said village heads had “assisted” teachers to vote in some rural areas
after forcing them to declare they were illiterate.

Turnout was low in urban areas where Tsvangirai’s Movement for
Democratic Change (MDC) is traditionally strong. But it was not clear
how many voters went to the polls in rural districts that are
difficult for independent journalists to visit. State television
denounced foreign media reports of low turnout. It showed long queues
in rural and semi-rural constituencies and said voters ignored appeals
to abstain.

The Zimbabwe Election Support Network, a monitoring group, said its
observers reported that traditional leaders forced people to vote in
most rural areas. It said the poll would not reflect the will of the
people. ZESN also reported militias and traditional leaders were
noting the names of voters and asking for the serial numbers of their
ballot papers as they left polling stations. ZESN said before the vote
it could not deploy properly because of intimidation of its monitors.
Tsvangirai had urged people to abstain but said they should vote if
they were in danger.

Turnout was much lower in many areas than in parliamentary and
presidential elections in March, when people queued from the early
hours. Tsvangirai won that poll but fell short of the majority needed
for outright victory. The G8 group of rich nations lambasted Zimbabwe
for going ahead with the run-off and the United States said the U.N.
Security Council may consider fresh sanctions next week. Tsvangirai
said pro-Mugabe militias had threatened to kill anybody abstaining or
voting for the opposition. Voters had their little finger dyed with
purple ink. “There is no doubt turnout will be very low,” said Marwick
Khumalo, head of monitors from the Pan African Parliament. Another
African election monitor, who asked not be to named, said turnout was
low except in some ZANU-PF strongholds.

Mugabe voted with his wife at Highfield Township, on the outskirts of
Harare. Asked how he felt, he told journalists: “Very fit, optimistic,
upbeat,” before being driven away. The African Union is optimistic it
can solve the Zimbabwe crisis. “I am convinced we will sort it out and
that our credibility will be maintained,” AU Commission chairman Jean
Ping said during a foreign ministers meeting in Sharm el Sheikh,
Egypt, ahead of an AU summit next week.

Tsvangirai said he understood South African President Thabo Mbeki
planned to recognise Mugabe’s re-election. But he said it would be a
“dream” to expect his MDC to join a national unity government with
Mugabe’s ZANU-PF. Mbeki, the designated regional mediator in Zimbabwe,
has been widely criticised for a soft approach towards Mugabe despite
an economic crisis that has flooded South Africa and other countries
with millions of refugees.

Nobel peace laureate Desmond Tutu, often seen as South Africa’s moral
conscience, said Mbeki must join other African leaders in declaring
Mugabe illegitimate if he claimed victory. Calling Zimbabwe’s crisis a
“sad tragedy,” Archbishop Tutu said Mbeki should admit his diplomatic
approach had failed. “Everybody would support him if he now turned the
screws on his colleague Mr Mugabe. I know he would be doing it
reluctantly,” Tutu told Reuters television.

In the affluent Greendale suburb of Harare in the morning there were
scores of people queuing for bread at a shopping centre but only 10 at
a polling station nearby. “I need to get food first and then maybe I
can go and vote … I heard there could be trouble for those who
don’t,” said Tito Kudya, an unemployed man. Mugabe has presided over
an economic collapse accompanied by hyperinflation, 80% unemployment,
food and fuel shortages. A loaf of bread costs 6-billion Zimbabwe
dollars, or 150 times more than at the time of the first round of

A middle-aged man waiting for a bus said it was dangerous to talk
about politics. “Your tongue can cost you your teeth,” he told
Reuters, adding that he would vote. Analysts said Mugabe was pressing
ahead with the election to try to cement his grip on power and
strengthen his hand if he was forced to negotiate with Tsvangirai. A
security committee of the Southern African Development Community
(SADC) called earlier this week for the vote to be postponed, saying
Mugabe’s re-election could lack legitimacy.

But Mugabe, who thrives on defiance, remained unmoved and said he
would attend an AU summit to confront his opponents. Mugabe says he is
willing to sit down with the MDC but will not bow to outside pressure.
U.S. Secretary of State Condoleezza Rice said in Japan that Washington
would raise the issue of further sanctions at the U.N. Security
Council. The European Commission described the run-off as “a sham.”

Zimbabwe’s Tipping Point?
By Roger Bate  /  June 27, 2008

“As I write, a few Zimbabweans are at the polls, some brought
forcibly, to vote in a meaningless election with only one candidate,
dictator Robert Mugabe. Mugabe’s party, ZANU PF, is vainly keeping up
the pretence that democracy exists in Zimbabwe — a fiction that not
even neighboring states are still willing to believe. The normally
vacillating UN has condemned Mugabe’s attempts to rig another election
now that Zimbabwe’s trading partners, Russia and China, have been
persuaded to add their voices; the Mugabe regime probably only has
weeks left.

On Wednesday, three members of the Southern African Development
Community (SADC), Swaziland, Angola, and Tanzania, urged Zimbabwe to
postpone today’s election, acknowledging that conditions in the
country would not permit it to be free and fair. Even the previously
silent South African ruling party, the African National Congress,
issued a statement noting that given “the ugly incidents and scenes
that have been visited on the people of Zimbabwe . . . a run-off
presidential election offers no solution to Zimbabwe’s crisis.” While
he did not mention Mugabe by name, former South African president
Nelson Mandela, speaking at a private dinner in London, cited the
“tragic failure of leadership” in Zimbabwe.

Mugabe’s downfall is long overdue, but he may also take down South
Africa’s president in the process. Thabo Mbeki’s inability to put any
pressure on Mugabe over the past eight years of election rigging and
violence has left his reputation in tatters. Dubbed Thabo “What
Crisis?” Mbeki, he seems to have lost any hope of the international-
diplomacy role he desired upon retiring as South African president
next April.

The fallout for those doing business with the regime is already
starting, too. Angry protestors are today gathering in Munich outside
the headquarters of Giesecke and Devrient, the company which is
printing the money used to prop up Mugabe’s regime. G&D printed
trillions of Zimbabwean dollars in February and March (432,000 sheets
of banknotes were sent to the government-controlled Reserve Bank of
Zimbabwe each week, equivalent to nearly Z$173 trillion (U.S. $32

Cato Institute analyst Stephen Hanke says that the Zimbabwean
government was “financing most of its spending” through money printed
and lent by the RBZ. As inflation deepened and tax revenues dried up,
the government demanded that RBZ print more and more money. G&D
enabled this to happen. This money was used to bribe the army prior to
the March election. The German Minister for Development, Heidemarie
Wieczorek-Zeul, told German radio this morning that she was demanding
that the company stop doing business with the Mugabe regime.

In Britain, pressure is building on Barclays Bank, which has affiliate
offices in Zimbabwe, to shut down operations there. According to a UK
treasury official, the bank has received hundreds of complaints and is
losing numerous valuable bank accounts. Furthermore, Anglo American —
the South African–British mining firm — which has new platinum
investments in Zimbabwe, was told by the British Government that it
was being monitored for any breach of existing sanctions. Like many
businesses, Anglo American argues (with little justification) that its
involvement benefits the Zimbabwean people. It may employ local
people, but all the revenue goes to the treasury — which provides hard
currency for the regime.

Most importantly, the Zimbabwean opposition Movement for Democratic
Change (MDC) has warned EU firms that licenses permitting foreign
companies to operate would be “revisited” when Mugabe is finally
overthrown. Roy Bennett, the MDC Treasurer, who spent many months in
jail for pushing a ZANU PF politician in 2006, says that all
“companies need to be careful because their rights will be
scrutinized.” He also warned that a future MDC government would not
repay recent loans to the Mugabe regime — a veiled threat to the
Chinese, North Koreans, and Malaysians who have financed weaponry and
military training for Mugabe’s army.

Universal Tobacco of Richmond, Virginia, also operates subsidiaries in
Zimbabwe. Like many businesses, they have faced difficult decisions
about remaining in the country, citing the employment of hundreds of
local people (in a country with 80 percent unemployment) as a key
reason not to leave. Unlike Anglo American, they employ many locals
and more of their activities reach the poor. When I interviewed
company officials some time ago about their tobacco processing
operations in Zimbabwe, the company defended its role — but said that
they were closely monitoring the situation. If the company wants to
operate in Zimbabwe, they’d better talk with opposition leaders soon —
waiting till Mugabe goes will be too late. The opposition wants
companies like Anglo American, Barclays, and Universal Tobacco to pull
out now — to remove the few solvent parts of a collapsing economy,
driving Mugabe to sue for a political resolution — and if the
companies don’t, they will be punished by a future MDC Government.

The saying, “It’s always darkest before the dawn” is applicable to
today’s Zimbabwe. For the millions suffering the privations of
Mugabe’s kleptocracy, it is as gloomy as it could be — but their
prospects could brighten in only a matter of weeks. It is up to
regional leaders and business leaders to ensure that is the case.”

[Roger Bate is a resident fellow at the American Enterprise

The African Union has an historic chance at its summit in Egypt to
unite against Robert Mugabe and chart a brighter future for his
country  /  June 28, 2008

Before Robert Mugabe voted yesterday, his enforcers had guaranteed him
a victory of sorts by murdering at least 90 people in his name. They
burned a six year-old boy alive in his home, along with his pregnant
mother. Another woman was found horribly dismembered in her kitchen.
Her crime: to have been married to an opposition councillor. Ten
thousand people have been injured. Two hundred thousand have been

The repugnant image of Zimbabwe’s dictator casting a ballot in his one-
candidate re-election insults the memory of his victims. It compounds
the suffering of their families and challenges the whole of Africa to
condemn him out of hand at last, to isolate him and to end his
country’s nightmare by hastening his departure from power.

Africa’s better leaders have a chance to shed their inhibitions and
start this process almost at once. Mr Mugabe has vowed to attend the
Africa Union summit at Sharm-el-Sheikh in Egypt on Monday, there to
confront anyone brave enough to denounce him and “see if those fingers
would be cleaner than mine”. His point is well taken. Too many AU
member states are still pernicious kleptocracies with little to boast
of by way of democracy. From the Republic of Congo to the summit’s
host country, led by the repressive Hosni Mubarak, misrule is the

But there are exceptions that keep hope alive. Ghana, Botswana,
Namibia and South Africa enjoy rankings comparable with some of the
EU’s newer members in a global survey of democratic institutions.
Botswana and South Africa beat Slovakia and Greece in international
corruption rankings. In Africa as elsewhere, there is a clear,
positive correlation between strong democratic credentials and strong
economic growth rates, and the countries that lead these tables are
leading a growing chorus of denunciation of the terror that Mr Mugabe
is inflicting on his people.

Without waiting for the lead offered by Nelson Mandela in London this
week, President Levy Mwanawasa of Zambia said that for Zimbabwe’s
neighbours to stay silent on its suffering would embarrass them and
the entire continent. Botswana has given warning that it may not
recognise the result of an election from which Morgan Tsvangirai was
forced to withdraw for fear of further butchery of his supporters. The
ANC has declared itself “deeply dismayed” by the violence (even if
South Africa’s President Thabo Mbeki has yet to see reality), and
Tanzania’s President has called the AU’s silence so far on Zimbabwe

These statements come late. Mr Mugabe’s wilful destruction of his
country started eight years ago. But Africa is finally taking a stand
and deserves recognition for it.

The AU must now heed Tanzania’s warning and go much farther, by
refusing to recognise either yesterday’s blood-soaked parody of an
election or the regime that will claim a spurious mandate for more
power as a result of it. For the bleak truth is that Zimbabwe’s plight
eclipses every green shoot of good governance elsewhere in Africa. In
the land of the six billion-dollar loaf, rampaging paramilitaries and
remorseless Zanu (PF) “re-education” teams have turned the fertile
heartland of southern Africa into a vortex of misery that is
destabilising the entire region.

The AU’s duty in the next 48 hours is clear. Zimbabwe’s neighbours in
the South African Development Community (SADC) have an even more vital
role. They must unite to isolate Mr Mugabe and his inner circle. With
their help, the world can tighten sanctions, targeting the few dozen
men with the blood of so many on their hands. Without it, the shame
that Mr Mugabe has heaped on his country will only spread.

Comment: intervention in Zimbabwe is the only solution
The idea that Mugabe will cave in to sanctions or diplomatic pressure is absurd
David Aaronovitch  /  June 24, 2008

Maybe this time,” sang Lord Malloch-Brown on the Today programme
yesterday. “Something’s bound to begin. It’s got to happen, happen
sometime. Maybe this time I’ll win.”

Well, all right, I am – like postmodernist scholars – decoding the
metatext. What the Minister of State for Africa, Asia and the UN
actually said was that the mood around the world had so turned against
Robert Mugabe and his various cronies that their combined diplomatic
effort would bring him down.

Till now, Lord Malloch-Brown allowed, there had only been a “fairly
limited set of measures” taken against the Zimbabwean President. This
was changing. The Australians were kicking out the kids of Zanu (PF)
officials being educated in Oz. The EU would be freezing bank
accounts. The African Union and the Southern African Development
Community would not be recognising Mr Mugabe’s imminent second-round
election theft thus delegitimising him, and the UN would “force in”
election observers to monitor that second-round (from which Morgan
Tsvangirai had already withdrawn) or – in a manner unspecified –
“force some change of government”. These were “powerful steps – as
long as you accept that there are pressures short of military action”.

Perhaps, I thought, his lordship simply knows something we don’t about
back-channels and internal divisions in Mugabe’s apparat. Because,
unless you regard the recent burnings, rapes, beatings, murders,
threats, arrests, starvings and raids as some kind of exotic preamble
to negotiation, then what seems clear is that the Zanu (PF) military-
security group has no intention of allowing any transfer of power to
an elected opposition, no matter what a whingeing world says about it.

Or am I missing a clue, cleverly hidden in the present repression? If
so, it seems that Morgan Tsvangirai of the Movement for Democratic
Change missed it too when he took refuge in the Dutch Embassy in
Harare on Sunday night. Recalling Bosnia, one can only hope that the
Dutch keep their embassies safer than they did their UN safe havens.

This obduracy on the part of the Zimbabwean junta is not so
incomprehensible. The regime represents that astonishing phenomenon,
the ideo-kleptocracy, which believes that its enrichment and
corruption is a historically necessary reversal of colonialism. “The
people of Zimbabwe,” one senior Zanu (PF) minister said yesterday,
“have declared war against any force that would recolonise Zimbabwe”;
and that would take away his money, power, foreign assets, yachts and
mistresses and – at best – slap him in chokey for the rest of his

What might embolden him is the record. He might reflect that, over
nearly 30 years, he and his comrades have repeated the same essential
pattern of behaviour, each time taking Zimbabwe’s people on another
downwards journey, and have got away with it over and over and over
again. For most of my adult life we have witnessed the incremental and
inevitable destruction of a nation, almost in slow motion. After
initially ignoring the repression and violence, we have for two
decades applied the same strategies of pressure, minor sanction,
condemnation, talks, aid and buck-passing, only to enjoy the same
flickering hopes, to bemoan their subsequent betrayal and to start

Right from the beginning it was all there, in Mugabe’s 1980 revelation
that he believed in a one-party state. It was evident in his 1982-83
suppression of the Ndebele-based opposition of Joshua Nkomo using the
notorious 5th Brigade trained by North Koreans; in the 20,000
resulting deaths and the use of starvation as a political weapon; in
the intimidation of the opposition by Zanu (PF) “youth brigades”
during the 1985 elections; in the 1987 absorption of Nkomo’s Zapu and
Mugabe’s extolling of “one single, monolithic and gigantic political
party”. But we didn’t take too much notice, because there were no
whites involved.

And then the farm grab started, ostensibly redistributing white land
to the poor, and in fact giving it to the ideo-kleptocrats, in whose
hands it became barren. It was all there, this time for the whites:
the roving groups of thugs, the murders and the round-ups. The same
with the stolen election of 2000. The same with the stolen election of
2002. The same with the stolen election of 2004. Each time there were
hopes that maybe the ageing Mugabe would mellow, or that his party
would bring down the curtain and begin to compromise and each time it
all got worse. We chucked him out of the Commonwealth, he macheted a
few more opponents, we refused to shake his hand, he killed another
opposition election worker.

We believed – understandably – in the crucial role of South Africa.
South Africa, led by Thabo Mbeki, in turn believed in quiet diplomacy,
in secret talks, in dignified exits that might be delayed by
incautious condemnations, in governments of national unity between the
raped Opposition and their rapers. Several times President Mbeki, who
dislikes Mugabe intensely, would manage to get the Zimbabwean leader
into talks about this or that aspect of an imaginary future – land
settlement, development, whatever – only to have Mugabe renege the
instant the two men were back in their own capitals.

And what do we imagine now? That Zambia’s crossness, Angola’s
criticism (only a few weeks after that country passed on Chinese
weapons to the armed forces of Zimbabwe) and Botswana’s rather valiant
anger will persuade the Harare murderers that the game is up,
especially now we are investigating freezing their European assets?
Again, one asks, do the diplomats know something we don’t, and that
the historical record fails to suggest? Is there some Zimbabwean
Admiral Dönitz or Juan Carlos, waiting to arrange the transition? Why
aren’t we just as likely to get Mugabe’s Heydrich, Emerson Mnangagwa,
the Joint Operations Command strongman?

“Military intervention,” said one BBC person yesterday, expressing the
views of the consensus, “is not a realistic option.” It might be
better if it was. How many South African or British soldiers would it
take to unseat the junta and disperse the Zanu (PF) “veterans”, who
are now veterans only of whipping and gouging defenceless people, or
raping women without the slightest chance of resistance?

Instead, the suffering people of Zimbabwe (life expectancy, 37) get
what the Foreign Secretary called yesterday “the worst rigged election
in African history”.


A Bad Man In Africa
BY Matthew Sweet  /  Mar 16, 2002

North of the Zambezi, they have long known about the suppression of
free speech, about the bloody redistribution of land along racial
lines, about politicians happy to employ armed – and sometimes
uniformed – mobs to kill their opponents. They are practices imported
to this region, along with the railways, by the British.

Unlike the African press, the Western media rarely invoke the name of
Cecil John Rhodes: nearly a century after his death – on 26 March 1902
– his name is more associated with Oxford Scholarships than with
murder. It’s easier to focus on the region’s more recent, less Anglo
white supremacists: Ian Smith, for instance, who – despite his
Scottish background – seems cut from the same stuff as those Afrikaner
politicians who nurtured and maintained apartheid farther south.

But it was Rhodes who originated the racist “land grabs” to which
Zimbabwe’s current miseries can ultimately be traced. It was Rhodes,
too, who in 1887 told the House of Assembly in Cape Town that “the
native is to be treated as a child and denied the franchise. We must
adopt a system of despotism in our relations with the barbarians of
South Africa”. In less oratorical moments, he put it even more
bluntly: “I prefer land to niggers.”

For much of the century since his death, Rhodes has been revered as a
national hero. Today, however, he is closer to a national
embarrassment, about whom the less said the better. Yet there are
plenty of memorials to him to be found. In Bishop’s Stortford, his
Hertfordshire birthplace, St Michael’s Church displays a plaque. The
town has a Rhodes arts centre, a Rhodes junior theatre group, and a
small Rhodes Museum – currently closed – which houses a collection of
African art objects. In Oxford, his statue adorns Oriel College, while
Rhodes House, in which the Rhodes Trust is based, is packed with
memorabilia. Even Kensington Gardens boasts a statue – of a naked man
on horseback – based on the central feature of his memorial in Cape

But his presence is more strongly felt – and resented – in the
territories that once bore his name. Delegates at the Pan Africanist
Congress in January argued that “the problems which were being blamed
on [President Robert] Mugabe were created by British colonialism,
whose agent Cecil Rhodes used armed force to acquire land for
settlers”. He is the reason why, during the campaign for the
presidential election in Zimbabwe, Mugabe’s Zanu-PF described its
enemies – white or black – as “colonialists”; why, when Zimbabwe
gained full independence in 1980, Rhodes’s name was wiped from the
world’s maps.

The prosecution case is strong. Rhodes connived his way to wealth in a
lawless frontier culture, then used that fortune to fund a private
invasion of East Africa. He bought newspapers in order to shape and
control public opinion. He brokered secret deals, issued bribes and
used gangs of mercenaries to butcher his opponents, seizing close to a
million square miles of territory from its inhabitants. Although he
did this in the name of the British Empire, he was regarded with some
suspicion in his home country, and when it suited him to work against
Britain’s imperial interests – by slipping pounds 10,000 to Parnell’s
Irish nationalists, for example – he did so without scruple.

Rhodes was born in the summer of 1853, the fifth son of a parson who
prided himself on never having preached a sermon longer than 10
minutes. A sickly, asthmatic teenager, he was sent to the improving
climate of his brother’s cotton plantation in Natal. The pair soon
became involved in the rush to exploit South Africa’s diamond and gold
deposits – and unlike many prospectors and speculators who wandered,
dazed and luckless, around the continent, their claim proved fruitful.

When Rhodes began his studies at Oriel College, he returned to South
Africa each vacation to attend to his mining interests – which, by his
mid-thirties, had made him, in today’s terms, a billionaire. By 1891,
he had amalgamated the De Beers mines under his control, giving him
dominion over 90 per cent of the world’s diamond output. He had also
secured two other important positions; Prime Minister of the British
Cape Colony, and president of the British South Africa Company, an
organisation that was formed – in the manner of the old East India
companies – to pursue expansionist adventures for which sponsoring
governments did not have the stomach or the cash. The result of his
endeavours produced new British annexations: Nyasaland (now Malawi),
Northern Rhodesia (now Zambia) and Southern Rhodesia (now Zimbabwe).

Rhodes imprinted his personality on the region with monarchical
energy: dams, railway engines, towns and anti-dandruff tonics were all
named after him. But his expansionist zeal was not always matched at
home in Britain. “Our burden is too great,” Gladstone once grumbled.
“We have too much, Mr Rhodes, to do. Apart from increasing our
obligations in every part of the world, what advantage do you see to
the English race in the acquisition of new territory?” Rhodes replied:
“Great Britain is a very small island. Great Britain’s position
depends on her trade, and if we do not open up the dependencies of the
world which are at present devoted to barbarism, we shall shut out the
world’s trade. It must be brought home to you that your trade is the
world, and your life is the world, not England. That is why you must
deal with these questions of expansion and retention of the world.”

At around the same time, Henry John Heinz was outlining a comparable
manifesto: “Our field,” he pronounced, “is the world.” By 1900, his 57
varieties were available in every continent. Global capitalism and
imperial expansion developed in collaboration; shared aims,
aspirations, patterns of influence. Today, most of the world’s
political empires have been dissolved and discredited, but the routes
along which capital moves remain the same. After Rhodes came Nestle,
Coca-Cola, BP, McDonald’s, Microsoft.

In 1896, Rhodes’s name was linked with the Jameson Raid – a disastrous
(and illegal) attempt to annex Transvaal territory held by the Boers,
and a principal cause of the South African War of 1899- 1902. His
reputation in Britain accrued a lasting tarnish. A defence of his
character, published in 1897 and co-authored by the pseudonymous
“Imperialist”, offers an insight into the charges against him:
“Bribery and corruption”, “neglect of duty”, “harshness to the
natives” and the allegation that “that Mr Rhodes is utterly
unscrupulous”. His lifelong companion Dr Leander Starr Jameson – a
future premier of the Cape Colony and the leader of the ill-fated raid
– added a postscript insisting that some of Rhodes’s best blacks were
friends: “His favourite Sunday pastime was to go into the De Beers
native compound, where he had built them a fine swimming bath, and
throw in shillings for the natives to dive for. He knew enough of
their languages to talk to them freely, and they looked up to him –
indeed, fairly worshipped the great white man.”

Did anyone buy this stuff? After Rhodes’s fatal heart attack on 26
March 1902, the death notices were ambivalent. News editors across the
world cleared their pages for obituaries and reports of public grief
in South Africa, but few wholehearted endorsements of his career
emanated from London. “He has done more than any single contemporary
to place before the imagination of his countrymen a clear conception
of the Imperial destinies of our race,” conceded The Times, “[but] we
wish we could forget the other matters associated with his name.”
Empire-builders such as Rhodes, the paper said, attracted as much
opprobrium as praise: “On the one hand they are enthusiastically
admired, on the other they are stones of stumbling, they provoke a
degree of repugnance, sometimes of hatred, in exact proportion to the
size of their achievements.” Jameson and “Imperialist”, it seems, had
not succeeded in rehabilitating their mentor.

But the story of Rhodes’s posthumous reputation is just as complex and
contentious as that of his life and career. And curiously, his
sexuality was one of the main battlegrounds. In 1911, Rhodes’s former
private secretary Philip Jourdan wrote a biography of his late
employer in order to counter “the most unjust libels with reference to
his private life [which] were being disseminated throughout the length
and breadth of the country”. Despite the aggressive romantic
attentions of a Polish adventuress and forger named Princess Catherine
Radziwill, Rhodes was indifferent to women and gained a reputation for
misogyny. His most intense relationships were with men – his private
secretary Neville Pickering, who died in his arms; Jameson, whom he
met at the diamond mines in Kimberley where, the doctor recalled, “we
shared a quiet little bachelor establishment”; and Johnny Grimmer, of
whom Jourdan (defeating the purpose of his memoir) said: “He liked
Johnny to be near him… The two had many little quarrels. On one
occasion for a couple of days they hardly exchanged a word. They were
not unlike two schoolboys.”

Rhodes’s excuse for remaining single was the one used today by members
of boy bands: “I know everybody asks why I do not marry. I cannot get
married. I have too much work on my hands.” Instead, he accumulated a
shifting entourage of young men, known as “Rhodes’s lambs”. It’s
probable that these relationships were more homosocial than
homosexual, but that didn’t stop the gossips or biographical
theoreticians. In 1946, Stuart Collete suggested Rhodes was “one of
those who, passing beyond the ordinary heterosexuality of the common
man, that the French call l’homme moyen sensual, was beyond
bisexuality, beyond homosexuality and was literally asexual – beyond
sex. It appears to have had no literal meaning to him except as a
human weakness that he understood he could exploit in others”. The
same biographer wove these comments into an analysis of Rhodes’s
appeal to another set of posthumous acolytes: the Nazis.

As the 20th century moved on, Rhodes’s memory became increasingly
attractive to extreme (and eventually moderate) right-wing opinion.
Oswald Spengler’s The Decline of the West (1918) hailed him as “the
first precursor of a Western type of Caesar – in our Germanic world,
the spirits of Alaric and Theodoric will come again – there is a first
hint of them in Cecil Rhodes”.

It’s easy to see why Spengler, and later Hitler, were fans. Asked by
Jameson how long he would endure in memory, Rhodes replied: “I give
myself four thousand years.” To the journalist WT Stead he said: “I
would annex the planets, if I could. I often think of that.” When, in
1877, he first made his will, he urged his executors to use his
fortune to establish a secret society that would aim to redden every
area of the planet. He envisioned a world in which British settlers
would occupy Africa, the Middle East, South America, the Pacific and
Malay islands, China and Japan, before restoring America to colonial
rule and founding an imperial world government. “He was deeply
impressed,” Jameson recalled, “with a belief in the ultimate destiny
of the Anglo-Saxon race. He dwelt repeatedly on the fact that their
great want was new territory fit for the overflow population to settle
in permanently, and thus provide markets for the wares of the old
country – the workshop of the world.” It was a dream of mercantile
Lebensraum for the English: an empire of entrepreneurs, occupying
African territories in order to fill them with Sheffield cutlery, Tate
& Lyle’s Golden Syrup and Uncle Joe’s Mint Balls.

But it was Rhodes’s Alma Mater that did most to brighten his prestige.
In 1899, Oxford University, an institution with a long and continuing
history of accepting money from morally dubious millionaires, agreed
to administer a more cuddly and less clandestine version of the
“Imperial Carbonari” of the 1877 will: the Rhodes Scholars. In 1903,
the first names were selected. A group of men fitted for “manly
outdoor sports”, who would display “qualities of manhood, truth,
courage, devotion to duty, sympathy for the protection of the weak,
kindliness, unselfishness and fellowship” – men such as Bill Clinton,
the CIA director Stansfield Turner, the first Secretary General of the
Commonwealth Sir Arnold Smith, and the Nato Supreme Commander Bernard

By 1936, ML Andrews was praising Rhodes’s “vision of world peace, to
be brought about by the domination of the English-speaking nations”.
In the same year the Gaumont-British film company produced the
hagiographic movie, Rhodes of Africa. Two years later, the little
Rhodes Museum was founded in Bishop’s Stortford. When it reopens next
year, children will, for a fiver, be able to sign up as one of
“Rhodes’s Little Rhinos”.

A 1956 children’s book, Peter Gibbs’s The True Book About Cecil Rhodes
– one of a series that also profiled Marie Curie, Captain Scott and
Joan of Arc – is the best example of how, in the mid-20th century,
Rhodes was reclaimed as a national hero. More unalloyed in its
enthusiasm for Rhodes than any comparable 19th-century text, it makes
for queasy reading. Especially, perhaps, if you were voting in
Zimbabwe last weekend. Southern Rhodesia, it reports, is now “tamed
and civilised and cultivated, and many thousands of white people have
settled there, and made it their home. Today there are beautiful
modern towns; homes, gardens, parks, towering blocks of offices and
flats; factories, railways and airports. It is a new and thriving
country of the British Commonwealth, where but recently only savages
and wild animals dwelt. And it started from the dreams of one young
Englishman – Cecil Rhodes”.

When natural resources are a curse
BY John Kay  /  Financial Times  /  12 November 2003

It is in human, rather than natural resources, that the origins of
material prosperity are to be found. John describes why natural
resources may be a burden rather than a blessing for some developing

Saudi Arabia has more natural resource wealth per head than any large
nation in the world. But it is a troubled country, whose potential
instability is held in check by an increasingly fragile autocracy. It
is as much a target for terrorism as the US, and more vulnerable.

For centuries, natural resources were believed to be the bedrock of
national prosperity. Expeditions were launched and wars fought to
obtain silver, gold and diamonds, to find Lebensraum and to secure oil

Yet prosperity today is not based on natural resources. The World Bank
has prepared estimates of the value of such endowments – oil and other
minerals, forests, agricultural land – for most big economies. Only a
few rich countries such as New Zealand and Canada have resources in or
on the ground whose value exceeds a year’s industrial production.
European countries such as Germany and Belgium generate income every
two or three months greater than the entire value of their resource

Jeffrey Sachs, the economist, has found that among poor countries
ownership of resources depresses growth rather than stimulates it.*
Abundant resources are a problem, not a benefit. Resource discoveries
attract gamblers, crooks and opportunists, from Francisco Pizarro and
Robert Clive to Cecil Rhodes, and it is not by such people that great
businesses and disinterested governments are built.

Joseph Conrad’s Heart of Darkness was the result of his discovery of
the horror unleashed in the Congo by the plundering of its assets. The
curse of Mr Kurtz lingered in the Congo even after the Belgians pulled
out. The country was immersed in a civil war that ended only when one
of the nastiest kleptocracies in recent history seized power. When
Joseph Mobutu’s regime collapsed, the country’s infrastructure was in
ruins, its mines were idle and the money that commercial lenders and
the World Bank had disgracefully continued to provide for 20 years had
been dissipated through foreign bank accounts.

The once-poor countries that have grown explosively in post-colonial
decades – such as South Korea, Taiwan, Hong Kong and Singapore – are
exceptionally poor in natural resources, as is Japan.

Those countries where stable if undemocratic political structures have
maintained control of resources, as in Saudi Arabia, have been better
off. But they have still enjoyed little economic growth. In an economy
distorted by oil wealth it is impossible for the basic manufacturing
industries that represent the first stages of economic development to
come into being. Wages and exchange, boosted by resource exports, are
too high. In the most prosperous oil states, even jobs in service
industries are filled by immigrants.

Imperialism was largely motivated by the search for resources.
Colonialism ended, and territorial expansions petered out, because the
cost of these adventures exceeded their benefits. It is no accident
that one of the world’s richest countries – Switzerland – is also one
of its most inward-looking. Few resources. No empire, no wars, just
ever-increasing wealth.

The distribution of natural resources remains a source of
international instability, but for different reasons. Resources have
been discovered in countries that have neither the political nor the
economic institutions to handle them. Lucky are those countries – such
as Canada, Australia and New Zealand – where the discovery of
resources coincided with the import of cultures and political systems
to cope with them. Lucky is Botswana, almost the only poor country in
which good government and diamond mines have brought prosperity to
many. But the luckiest of all are those countries such as Norway and
Iceland that made large resource discoveries when they already enjoyed
developed economic and political institutions. It is in human, rather
than natural, resources that the origins of material prosperity are to
be found.

* J. Sachs and A. Warner, Natural Resource Abundance and Economic

The Curse of Riches  /  BY Geoffrey Wheatcroft  /  Nov 3, 2007
on DIAMONDS, GOLD AND WAR by Martin Meredith Simon & Schuster, pp.
569, ISBN 9780743286183

“When the second half of the 19th century began, South Africa was
barely even a geographical expression, as Metternich had
contemptuously called Italy. It certainly wasn’t a country, but merely
an ill-defined area which included two Boer republics, the Transvaal
and the Orange Free State, two British colonies, the Cape and Natal,
and a number of African principalities. The British had acquired the
Cape from the Dutch during the Napoleonic wars not quite in a fit of
absence of mind, but with little enthusiasm, and although the Cape of
Good Hope itself was of great strategic importance, commanding the
passage to India and the Far East, James Stephen of the Colonial
Office unpresciently called the lands of the interior ‘the most
sterile and worthless in the whole Empire’.

Everything was changed by geology, or by its accidental interaction
with human history. Just as it’s a random fact of life, but full of
significance for all of us, that Shiites, although only a one-in-five
minority among Muslims as a whole, happen to sit on top of most of the
world’s oil, so a capricious Providence decided to place most of the
world’s diamonds and gold beneath the bush and desert south of the
Tropic of Capricorn.

How this changed the whole course of South African — and to no small
extent world — history is the enthralling story told by Martin
Meredith in Diamonds, Gold and War.

First came the rush to Griqualand, where immensely rich diamond pipes
were found in 1871. Diggers flooded in and created a vast patchwork of
little claims. After feuding and rebellion, a few men, led by Cecil
Rhodes, Alfred Beit and Barney Barnato, gradually established control
of the mines, while the British ruthlessly acquired what had been a
disputed territory. The diamond town was now named Kimberley, for the
Colonial Secretary of the time (which is why American girls are still
called, at third hand, after the Norfolk village whence the Wodehouse
family took their title).

If the diamonds had lain in a debatable land, the immense gold field
discovered in 1886 did not. ‘The ridge of white water’ —
Witwatersrand — belonged to the Transvaal, or South African Republic,
a statelet of sorts created by Dutch-speaking Boers escaping
northwards from British rule. Incomers came in large numbers to the
Rand and its new boom town called Johannesburg, which was soon
producing an immense output of gold, and which was soon also in a
state of unarmed revolt against the Transvaal.

But there was a fascinating difference between these two mining
business, of which Meredith could have made more. In both cases a
cartel was established, but with diametrically opposite purposes.
Although Kimberley fuelled the great new fashion for engagement rings,
the demand for diamonds was essentially artificial, and with such a
limitless and easily mined supply the price fluctuated wildly, often
plunging downwards. And so the answer for the mine owners was monopoly
in the strict sense of a sellers’ market, controlling production and
thus keeping up the price.

By contrast, from the early 18th century until the Great War the price
of gold was fixed by the gold standard. The Rand was incomparably the
greatest gold field ever found in terms of quantity, but its quality
was very poor, so that in order to make the field payable, as mining
managers say, costs had to be controlled by means of monopsony, a
buyers’ market for the crucial commodity of labour, whose price could
be kept down. It is not too much to say that from these financial and
geological facts the whole history of modern South Africa flows.

Throughout the 1890s the Randlords, the mine owners, chafed under the
regime of Paul Kruger. In 1895 Rhodes promoted the disgraceful Jameson
Raid with the help of the brutally unprincipled Joseph Chamberlain,
now Colonial Secretary.

Far from learning restraint from the failure of the Raid, Chamberlain
sent out as High Commissioner Alfred Milner, a different brand of
villain, who colluded with Rhodes to bring about the Boer war in 1899.

Meredith gives one of the best accounts I have read of how this was
done, a scoundrelly business which has few parallels in British
history, apart from the way we were taken into the Suez escapade and
the present Iraq war, and which no Englishman can read to this day
without a sense of shame.

Militarily disastrous to begin with, morally calamitous at the end,
the Boer war earned this country deep hatred throughout the world. But
the way in which the British dealt with South Africa after the war was
almost worse in terms of its longer effects.

The wretched Milner tried to encourage large British immigration,
supposing that a balance of three to two British to Boer among the
white population would provide safety but that ‘if there are three
Dutch to two of British, we shall have perpetual difficulty’ (he was
right about that), while his oppressive and insulting treatment of
those Dutch inflamed feeling, and may even have stimulated the growth
of Afrikaans as a literary language.

In his eagerness to restore the mines to profitability, Milner
fatefully allowed the introduction of dirt-cheap Chinese indentured
labourers, with awful consequences both human and political. ‘Chinese
slavery’ destroyed any British claim to moral superiority, although
the haughty Milner could do no more than respond petulantly about
‘perpetual faultfinding, this steady drip, drip of deprecation, only
diversified by occasional outbursts of hysterical abuse’. Then the
black majority were deprived of almost all such rights as they had
enjoyed before, a job thoroughly done by the time Meredith’s book ends
with the creation of the Union of South Africa in 1910. What was
called apartheid after 1948 was different in degree rather than kind
from the previous system.

Much of this story, and plenty of the anecdotes, will be familiar to
those of us who have read or indeed written books on the subject, but
Martin Meredith has made good use not only of recent scholarly work
but also of contemporary sources, some of which were unknown to me.
The illustrations are also excellent, though why on earth is there no
list of them after the contents page? He offers no striking new
interpretation, but tells the story lucidly so that the reader can
draw his own moral. It was the Boer war that inspired Kipling’s phrase
‘no end of a lesson’, but those words might be used of the whole story
of South Africa since that day nearly 140 years ago when a few shiny
pebbles were picked up besides a dry watercourse in Griqualand.”

Diamonds – A Blessing or Curse?
By Michael Russell  /  May 30, 2007

“Diamonds should be known as the ‘misery stone’ because of the over-
importance we have placed on them since the Great Hole of Kimberly was
formed in the nineteenth century. Throughout history, diamonds have
always attracted attention and with the discovery of every large new
stone a ‘story’ or tale spread around that gem and so the legends

During the Colonial times, Cecil Rhodes and Charles Rudd founded “De
Beers”, a company created to mine and market diamonds; and no other
business has enjoyed so much protection from the crown and successive
governments since then. This created a diamond monopoly for that
business and at one stage it accounted for over 80% of the world’s
supply and trade in diamonds.

No other company or business has enjoyed such protectionism as De
Beers and its right to trade in raw or uncut diamond gem stones in
both South Africa and on the world markets. It was only by the late
nineteen eighties that its iron-like grip on the market started to
loosen. However, as the past shows they will not be laying down their
so-called ‘divine right’ to trade in diamonds very easily.

In South Africa today it is still a criminal offence for anyone to
trade the raw uncut stones without going though De Beers. There is an
entire police department known as the Diamond and Gold Squad whose
sole purpose is to uncover and prosecute people who want to, or are
trying to, do this. Would this situation exist in the United States or
any country that values the individual’s right to pursue their chosen
path to business success? Of course it would not be tolerated!

Because of the grip this company wanted to have on the entire market
the diamond has become one of the most overpriced commodities around.
Its artificially high price has attracted some of the most notorious
and greedy minded people in the world and it has been used to fund
wars all over the African continent.

At one time or another “blood diamonds” (which is what the illegally
mined stones became known as) have funded dictators, coups and rebels
alike in central and West Africa over the last 20 years. Great
publicity was made about these diamonds and the world was encouraged
not to support or buy them at all. However, how do you stop people
trading in things one can pick up like a bit of dirt and then turn
around and get thousands of dollars for it?

One can’t!  De Beers – or the Central Selling Organization (CSO is the
marketing arm of the company) – has been behind some very successful
sales and marketing campaigns over the last 5 decades, starting with
the well known marketing slogan “a diamond is forever!”

Now with the advent of laboratory made artificial gemstones where you
can now purchase a “diamond” made in the lab at 5% of the cost of the
real stone and not be able to tell the difference, there are some
people predicting the end of the diamond as we know it. We don’t
believe this will happen if this De Beers has its way and keeps alive
just a few of the tales that have accompanied this precious stone in
becoming the most talked about stone in history!”


Fact Sheet: National Strategy to Internationalize Efforts Against

Today, The President Unveiled His National Strategy To
Internationalize Efforts Against Kleptocracy, Pledging To Confront
High-Level, Large-Scale Corruption By Public Officials And Target The
Proceeds Of Their Corrupt Acts. This Strategy Is A New Component Of
His Plan To Fight Corruption Around The World. Public corruption
erodes democracy, rule of law, and economic well-being by undermining
public financial management and accountability, discouraging foreign
investment, and stifling economic growth and sustainable development.

* Kleptocracy Is A Threat To The Governments And Citizens Of Both
Developing And Developed Countries. Corruption by senior officials in
executive, judicial, legislative, or other official positions in
government can destabilize whole societies and destroy the aspirations
of their people for a better way of life.

The President’s National Strategy To Internationalize Efforts Against

This New National Strategy Builds On The President’s Commitment Made
With The G-8 Leaders At Their Recent Summit In St. Petersburg. At the
G-8 summit, President Bush committed to promote legal frameworks and a
global financial system that will reduce the opportunities for
kleptocracies to develop and to deny safe haven to corrupt officials,
those who corrupt them, and the proceeds of corrupt activity.

* The Strategy Has As Its Foundation In The President’s
Proclamation, Made In January 2004, To Generally Deny Entry Into The
United States Of Persons Engaged In Or Benefiting From Corruption.

* The Strategy Advances Many Of The Objectives In The National
Security Strategy By Mobilizing The International Community To
Confront Large-Scale Corruption By High-Level Foreign Public Officials
And Target The Fruits Of Their Ill-Gotten Gains.

* The Strategy Reaffirms The President’s Commitment To Ensure That
Integrity And Transparency Triumph Over Corruption And Lawlessness
Around The World, Expand The Circle Of Prosperity, And Extend
America’s Transformational Democratic Values To All Free And Open

Specifically, The Strategy Promotes Our Objectives By Committing To:

* Launch A Coalition Of International Financial Centers Committed
To Denying Access And Financial Safe Haven To Kleptocrats. The United
States Government will enhance its work with international financial
partners, in the public and private sectors, to pinpoint best
practices for identifying, tracing, freezing, and recovering assets
illicitly acquired through kleptocracy. The U.S. will also work
bilaterally and multilaterally to immobilize kleptocratic foreign
public officials using financial and economic sanctions against them
and their network of cronies.

* Vigorously Prosecute Foreign Corruption Offenses and Seize
Illicitly Acquired Assets. In its continuing efforts against bribery
of foreign officials, the United States Government will expand its
capacity to investigate and prosecute criminal violations associated
with high-level foreign official corruption and related money
laundering, as well as to seize the proceeds of such crimes.

* Deny Physical Safe Haven. We will work closely with
international partners to identify kleptocrats and those who corrupt
them, and deny such persons entry and safe haven.

* Strengthen Multilateral Action Against Bribery. The United
States will work with international partners to more vigorously
investigate and prosecute those who pay or promise to pay bribes to
public officials; to strengthen multilateral and national disciplines
to stop bribery of foreign public officials; and to halt bribery of
foreign political parties, party officials, and candidates for office.

* Facilitate And Reinforce Responsible Repatriation And Use. We
will also work with our partners to develop and promote mechanisms
that capture and dispose of recovered assets for the benefit of the
citizens of countries victimized by high-level public corruption.

* Target And Internationalize Enhanced Capacity. The United States
will target technical assistance and focus international attention on
building capacity to detect, prosecute, and recover the proceeds of
high-level public corruption, while helping build strong systems to
promote responsible, accountable, and honest governance.

The President’s Announcement Builds On Established U.S. Leadership In
The International Fight Against Corruption. The U.S. actively supports
development and implementation of effective anticorruption measures in
various international bodies and conventions. In addition to the G-8,
we have promoted strong anticorruption action in the:

* UN Convention Against Corruption
* OECD Anti-Bribery Convention and the OECD Working Group on
* Financial Action Task Force (FATF)
* Council of Europe Group of States Against Corruption (GRECO)
* OAS Mechanism for Implementing the Inter-American Convention
Against Corruption
* Asia Pacific Economic Cooperation Forum’s Anticorruption and
Transparency (ACT) Initiative
* Broader Middle East and North Africa (BMENA) “Governance for
Development in Arab States” (GfD) Initiative.