Jul 3 2009

Greg Grandin on Honduras coup, Nomi Prins on Madoff verdict


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This week on CounterSpin: Coverage of the Honduran coup ousting president Manuel Zelaya has often included the claim that the coup was prompted by Zelaya’s move to change the constitution, so that he could stay in power. The fact that this central claim is untrue shows how confusing that coverage can be. We’ll talk to New York University Latin American history professor Greg Grandin about the real reasons certain sectors of Honduran society wanted Zelaya out of the picture.

Also on the show: The sentence of 150 years for convicted Wall Street financier Bernard Madoff is gratifying on many levels, certainly. But no one disagrees that Madoff was emblematic of larger problems; does putting him under the jail do anything to address those? We’ll talk with Nomi Prins, author of Other People’s Money: The Corporate Mugging of America, and the forthcoming It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street.


Democracy Derailed in Honduras, by Greg Grandin (Nation, 6/30/09)

Other People’s Money: The Corporate Mugging of America, by Nomi Prins

It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street, by Nomi Prins


That’s coming up but first, as usual, we’ll take a look back at the week’s press.

Mark Weisbrot of the Center for Economic and Policy Research published one of the more informative pieces to date on the Iranian election, appearing on June 26 on WashingtonPost.com. Weisbrot took the remarkable step of actually examining the Iranian vote-counting procedures, and concluded that in Iran, “large-scale fraud is extremely difficult, if not impossible, without creating an extensive trail of evidence.” Since votes in Iran are supposed to be counted at individual polling places in the presence of 14 to 18 witnesses, Weisbrot pointed out that, “if this election was stolen, there must be tens of thousands of witnesses – or perhaps hundreds of thousands – to the theft. Yet there are no media accounts of interviews with such witnesses.” But Weisbrot would no doubt acknowledge that the absence of such interviews is not definitive proof that fraud did not occur, because his column is as much about the failure of the U.S. media system as it is about the Iranian political system. Weisbrot said he made his investigation, “After searching through thousands of news articles without finding any substantive information on the electoral process.” He then contacted a professor at the University of Tehran along with a veteran Iranian poll worker, and got from them a basic outline of how the electoral system works – in other words, he conducted interviews that any U.S. journalist could have done without leaving the United States.

Now, the Iranian election has been a major foreign-policy story for U.S. corporate media, and coverage has centered on the question of electoral fraud. So why didn’t any of the many reporters covering the story find out what Weisbrot did? One of the primary functions of a free press is protection of democratic rights; we count on the media, in other words, to blow the whistle when governments try to do things like steal elections. The fact that they don’t seem to know the first thing about detecting such thefts is troubling, to say the least.

Salon‘s Glenn Greenwald took a hard look at a recent Washington Post piece by Dafna Linzer and Peter Finn. The report was about the White House possibly developing an executive order that would reassert presidential authority to incarcerate terrorism suspects indefinitely. Greenwald notes the purpose of such trial balloon articles, which like this one, often rely on anonymous officials, to announce that policies are being considered before they’re actually written so that none of the key details are known. This one’s worse than typical, though, for the unskeptical way it passes along administration claims and the irresponsible way it characterizes potential opposition. The article stated, “Civil liberties groups have encouraged the administration, that if a prolonged detention system were to be sought, to do it through executive order.” Well, the article wasn’t at all clear as to which civil liberties group would possibly consider pressuring the White House for an executive order establishing power of indefinite detention. As Greenwald reminded readers: “It’s certainly not the ACLU or Center for Constitutional Rights, both of them have issued statements vehemently condemning the proposal.”

—We mentioned last week how in reporting on the latest release of Nixon tapes, CBS News covered for the reverend Billy Graham over remarks he’d made about how Jews belonging to the “Synagogue of Satan,” were putting out pornography. The CBS report pulled punches in describing Nixon’s anti-Semitic and racist remarks as “coarse,” but it went further for the still-living religious icon, carefully excising his remarks from the report altogether.

Reports on Graham’s anti-Semitism are nothing new. In a 1994 book, former Nixon aide John Haldeman reported that Graham and Nixon agreed that Jews controlled the media and that Graham had talked of “satanic Jews.” At the time Graham denied everything and the media let it go because there was no conclusive proof.

Then a release of Nixon tapes in 2002 revealed Graham telling Nixon, among other things, that if the Jewish “stranglehold” on the media was not broken “the country’s going down the drain.” And now, with the recent revelations confirming Haldeman’s claim about Graham and satanic Jews, one might think it was news that the religious icon’s once-denied anti-Semitism had been even more deeply seated than previously known. But not only have Graham’s “Synagogue of Satan” remarks been edited out of the CBS News, they don’t appear in any major U.S. outlet, print or broadcast, according to the Nexis database.

Would this be the case if, say, tapes emerged revealing the Reverend Jesse Jackson engaged in even more deeply seated anti-Semitism than his 1984 “Hymietown” remarks. More likely, and rightfully, such revelations would be considered news.

But then it’s probably foolish to expect that Billy Graham, the consummate establishment insider, and the man about whom Time magazine’s Jon Meacham once said, “He is what God looks like – white hair, blue eyes,” would be held to the same standard.

Looking into the disastrous May 4 airstrike in Farah province, Afghanistan, investigative reporter Gareth Porter found that the official military investigation of that incident made public recently by the Central Command was actually “carefully edited” to cover up contradictions between the U.S. command’s initial claims and what they were finally forced to admit.

In a piece for online newsletter Dissident Voice, Porter notes that the cleaned-up military report continued to reassert that only about 26 civilians had been killed in the airstrike, though well-documented reports by the government and by the Afghanistan Independent Human Rights Commission put the number between 97 and 147 people; and it continued to misleadingly inflate the number of Taliban killed. The fact that civilian deaths were much higher, and Taliban casualties much lower, than initially claimed of course should raise questions about the military’s whole “human shields argument”; but no such questions were raised in the press coverage which, true to form, focused on the U.S.’s official numbers and the absence of blame on the part of the U.S. military. As the AP had it, the United States had “accidentally killed an estimated 26 Afghan civilians last month when a warplane did not strictly adhere to rules for bombing.” None of the outlets reporting the highly edited version of the investigation, notes Porter, “pointed out that it had confirmed, in effect, the version of the event that had been put forward by residents of the bombed villages.” Of course that will make it easier to deny the accounts of the residents of the next bombed villages…right up until those accounts are confirmed.

—Video of young Iranian protester Neda Agha-Soltan bleeding to death quickly became a symbol of Iranian government brutality. CNN‘s American Morning recently featured a discussion of whether the video would bring about major change, given that, as CNN reporter Carol Costello put it, “the media is quite controlled in Iran.”

Costello compared the video to historical photographs that have become famous for exposing grave injustice. But she did not mention the photographs of prisoners being tortured by their U.S. military captors under the Bush Administration – photographs that the Obama White House is currently seeking to suppress.

Veteran White House correspondent Helen Thomas did however. It was at a press conference when Obama was asked by a CNN journalist about his response to the Neda video. Obama called the video “heartbreaking” and spoke about the importance of freedom of expression.

Thomas interrupted Obama’s answer, asking him why he didn’t then release the torture photos.

Obama responded dismissively. But Thomas was drawing an apt comparison. Like the Iranian government’s repression, U.S. government torture is made more feasible by the suppression of graphic evidence. And with the American public now shielded from images of torture, it’s noteworthy that a recent poll found that roughly half of respondents approved of torturing terrorism suspects.


CounterSpin: The military coup ousting left-leaning Honduran president Manuel Zelaya looks a lot like some earlier coups in the region, but some things have changed. For instance an almost united international front, including the U.S., is condemning the coup and demanding reinstatement of the democratically-elected Zelaya. Sadly, one thing that has changed little is that U.S. journalists are still frequently taking the false propaganda of the anti-Democratic forces running the coup at face value.

Joining us now is Greg Grandin. He is a professor of Latin American history at New York University. His latest piece, “Democracy Derailed in Honduras,” is available online at the Nation.com. His latest book is Fordlandia: The Rise and Fall of Henry Ford’s Forgotten Jungle City.

Well, welcome to CounterSpin Greg Grandin!

Greg Grandin: Thanks for having me.

CS: One thing we’ve seen time and again, is U.S. media repeating the Zelaya opposition propaganda. For instance, on June 29, former Bush State Department official Roger Noriega stated without challenge on ABC News that Zelaya was trying to “change the Honduran constitution so that he could stay in power.” Worse, on the same day CBS morning news anchor Michelle Gielan said “Zelaya was seeking constitutional changes allowing him to stay in office beyond his four-year term.” Greg Grandin, what’s wrong with that claim to begin with?

GG: Well, it’s just a lie, and this is just something that’s been repeated over and over again in all forms of journalism, high and low. The fact is that Zelaya was putting forth a non-binding referendum that had nothing to do with term limits. It had to do with asking Honduran citizens if in November of this year, whether they wanted to vote on convening a Constitutional Assembly to revise the Constitution. He himself wouldn’t be president. Presumably the terms of those revisions would be debated by an elected assembly, representatives of an elected assembly. Ending term limits, or presumably having presidents allowed to serve two terms would presumably be one of the issues to be debated. It wouldn’t affect the fact that Zelaya himself wouldn’t be running for reelection in the next go-round. So it’s completely false the way it’s been portrayed.

CS: Yes, the vote to have a new constituent assembly to rewrite the constitution would happen on the same day that they would choose Zelaya’s replacement. Well, do you think the term limits canard is just something to try to paint Zelaya with the well-worn brush that’s been used by the U.S. media to demonize President Hugo Chávez of Venezuela, and tell us what it’s obscuring—what is really behind the dissatisfaction with Zelaya in some sectors of Honduran society?

GG: Well, yes, undoubtedly, they’re clearly just trying to portray Zelaya as [laughs] Hugo Chávez’s “Mini-Me”. They use a lot of the same terms: that he’s alienated sectors of society, that he’s unpopular, that it’s a power grab. And it basically obscures the fact that Zelaya, over the last couple of years, has adopted a rather progressive agenda, and that agenda is quite at odds with the platform that he ran on as president. Zelaya comes from a wealthy family, he’s a rancher. He’s a member of an establishment political party, a center-right political party, the Liberal Party. He ran on a center-right platform, and sometimes what happens in Latin America is that the burdens and the realities of trying to govern a country as desperately poor as Honduras – 60 percent of the population live in poverty, 50 percent in extreme, extreme poverty – tends to reinforce a liberal slant that it moves people to the left in some ways. In particular, Zelaya had to confront the reality that the Central American Free Trade Agreement has been a dismal failure. It hasn’t delivered on its promised development. It has actually deepened inequality. Honduras now competes with its impoverished neighbors, Nicaragua, El Salvador, Guatemala for foreign investment, which means they have to drive wages down even lower. It’s increased its trade deficit with the United States. So all of these factors have led Zelaya to look about for other allies, to diversify Honduras’, try to diversify Honduras’ politics and economics. And also to democratize its politics a little bit. Honduras’s political establishment is notoriously exclusive and elitist and restricted and part of the attempt to convene a Constitutional Assembly is an effort to open it up a little bit and democratize society.

CS: Well, as you’ve written, this coup fits a pattern that we’ve seen in other coups in the region, where elites in-league with U.S. interests overthrow democratically elected leaders – but in this case, something has changed – there is a unified front opposing the golpistas, and this even, at least as far as the rhetoric is concerned includes the U.S. What would make you believe that the Obama administration’s actions were living up to it pro-democracy rhetoric?

GG: Well, I think the Obama administration is walking a fine line. It probably wants to hold on to some leverage over Zelaya and probably condition its support for his return to him tamping down some of his populist rhetoric and policies. On the other hand, it can’t seem to be too out of sync with the rest of Latin America. Latin America has spoken with a fairly strong unanimous voice through the Organization of American States that Zelaya has to be returned and restored to his office within three days or Honduras will be expelled from the Organization of American States. All countries in Latin American have been fairly clear on this matter. So Obama and the Obama White House is going to great pains to look like it’s working with the international community on this issue. On the other hand, it seems like the State Department itself is hedging a little bit. Obama and Hillary Clinton, the Secretary of State, have called it a coup in press conferences, but apparently there’s some legal definition when something is called a coup and the State Department has not officially called this a coup. To call it a coup would mean that U.S. foreign aid and military assistance would be cut off, so they haven’t gone that far, and they haven’t withdrawn its diplomatic recognition of Honduras yet.

CS: And finally, and we only have a little bit of time left – if the White House wanted the coup to be over and to have Zelaya reinstated, how much influence would they have on that if they truly wanted it to happen?

GG: It’s hard to imagine Honduras being able to take an independent stand. Basically its economy is wholly dependent on the United States, both remittance, foreign aid, and trade. The Honduran military is effectively a subsidiary of the U.S. military. It’s very much dependent on military aid, so I imagine that ultimately if the United States really wants Zelaya to be restored, Zelaya will be restored.

CS: We’ve been speaking with Greg Grandin, professor of Latin American History at New York University. His article, “Democracy Derailed in Honduras,” can be read online at the Nation.com; his latest book, recently published by Macmillan, is Fordlandia: The Rise and Fall of Henry Ford’s Forgotten Jungle City.

Thanks again for joining us today on CounterSpin, Greg Grandin.

GG: Thanks so much for having me.


CounterSpin: Convicted of bilking hundreds of investors of billions of dollars, Wall Street financier and former NASDAQ chairman Bernard Madoff received the maximum sentence of 150 years in prison. Too, U.S. District Judge Denny Chin called Madoff’s crimes “evil” and underscored that “this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll.” But for many of those outside the world of credit swap defaults and whatnot, questions remain about how much of Madoff’s actions were criminal manipulations of the “system” and how much were just…the system? Does putting Madoff in jail prevent similar future actions? And how have media done showing how Madoff’s case fits in the bigger picture? Nomi Prins worked for years on Wall Street and is author of Other People’s Money: The Corporate Mugging of America and the forthcoming It Takes a Pillage: Behind the Bailouts, Bonuses and Backroom Deals from Washington to Wall Street. She joins us now by phone. Welcome back to CounterSpin, Nomi Prins!

Nomi Prins: Thank you, Janine.

CS: Well, how significant is this verdict, and did it surprise you at all?

NP: It doesn’t and particularly when the judge discussed how there’s an element of symbolism in this verdict, it isn’t surprising. There was a lot of media attention. There was certainly a lot of the victims who were in the court who also had the benefit of their stories being extolled by the media as well in terms of what problems that have occurred because of Madoff’s actions, and so the sentence is pretty much expected. I mean whether it was 150 years, I mean, it could have been 1500 years, really, for the terms of the idea, the symbolism of having Madoff pay for his frauds in an exorbitant manner.

CS: Well, do you think it’s supposed to have a deterrent effect and if so will it?

NP: I don’t really think it will have a deterrent effect any more than the 25-year sentences for Bernie Ebbers had for the fraudulent company that was WorldCom and Ken Lay and other people that have gotten sentences. Certainly this is the biggest sentence, certainly it is the most symbolic and extensive sentence but I don’t think this deters anything. The idea of what Madoff, some of which was illegal, some of which was not – a lot of which was fraudulent – sits in the context of a bigger system where the operators and the people that both create the system and trade within the system and operate funds within the system don’t actually think they’re ever going to get caught for anything they do. So the idea that if someone does and if they get 150 years, which for all practical purposes could have been 1500 years, it doesn’t really deter anybody from anything because the people that are operating on that negative side of legal, or on the line of quasi-legal, never expect to be caught.

CS: You said in an earlier interview that there’s a kind of I am awesome attitude with once you get in this certain world that makes you feel you’re almost above the law above, almost the laws of nature. Well, even if not everyone’s a Madoff, and you’ve sort of said this, but there had to be other people, and institutions, and policies in play here for something like this to happen and to keep happening for decades. I mean, even the verdict-day New York Times had a story right alongside about another guy who had been moving money from place to place to cover up losses in a similar sort of, although much smaller-scale, scheme without being detected. I guess this is what you just said, but I mean, did this ruling even try to touch on any of those broader issues?

NP: The ruling didn’t and neither really is the way in which these things are being covered. I mean there are these joint stories about other people who’ve been discovered to have been committing similar frauds, maybe smaller, but the same idea of moving money from book to book and using any kind of inflow to pay for any kind of an outflow – and I think that it certainly doesn’t address that and neither really does anything that’s being discussed in terms of any real regulation of the industry really addresses that. In fact, the government has spent over $13 trillion in bailouts and subsidies to the banking industry and a lot of which, some of those banks have paid the government for certain TARP funds, has been money that they’ve gotten from other pockets of the government. So this idea of a Ponzi scheme from going from one pocket to another in some instance is fraud and in some instance is something that our federal government to a certain extent operates under on a regular basis but it’s just considered legal.

CS: Well that brings me to the final question, which was just going to be what you think are the, even this late in the game, the still-missing stories, still-missing angles in this broader reporting – not just Bernie Madoff, but the broader reporting on the financial crisis? It sounds like at least one thing that hasn’t been explored is just how little the legal and policy responses do to actually get to the source of the problem.

NP: Well, right, how little they do, and how generally the mode of operation tends to be to allow a lot of not just people like Madoff who run funds but entire industries, entire banks within the financial sector to operate in a way in which a lot of the transaction that they do and continue to do are not particularly transparent. Even some of the ideas for reregulation or a form of the industry that the administration has just put out in their White Paper a couple weeks ago talk about bringing certain derivatives on exchange into regulatory eyes and looking at certain means for capitalizing banks better, but the reality is this leaves so much space for creating securities and concocting certain derivative instruments that are outside of the eyes of any kind of regulatory system and will continue to be outside of those eyes. And it’s mostly the things that are outside that are the most profitable and the most complex, that’s the nature of Wall Street, that’s the nature of profitability on Wall Street and this Madoff situation doesn’t change any of that.

CS: Well, finally, clearly it’s a broad public interest story, but I wonder if you find is the business press – which is perhaps better versed in these things – are they doing a better job than what you might call the general interest press?

NP: I think the business press does get ahold of certain numbers but I also think they don’t make the comparatives enough. For example, I would have said, with this Madoff case, he took these many billions of dollars, he got this many sentenced, but let’s move on to a bigger extraction from unwilling and uninvesting public citizens in terms of the bailouts and the subsidies for financial industry that is very very flawed – and let’s take a look at a $13 trillion amount while we’re focusing on, what could be $13 billion to by some accounts could be as much as $65 billion under the Madoff situation, the federal government decided it was 13 so far and that could grow but the point is that’s in billions. We’re talking about trillions and trillions being produced and printed and lavished on a system by the government and I think if you start to really dig into those numbers, and I have and certain journalists have, there’s a lot of places between the various books of the government, between the Fed between the Treasury Department, where numbers magically go back and forth between books. They disappear, they reappear, they change, and I think true good journalism should really look at some of those things, because those gaps are reflective of the gaps that we often have in the banking system in terms of these derivatives and other products that create the most profit for the banks and also create the most risk for the general economy.

CS: We’ve been speaking with Nomi Prins. She’s a fellow at Demos and author of Other People’s Money: The Corporate Mugging of America and also the forthcoming It Takes a Pillage: Behind the Bailouts, Bonuses and Backroom Deals from Washington to Wall Street.

Thank you very much for joining us this week on CounterSpin, Nomi Prins.

NP: Thank you.