Fed Governance – Accountable Independence, or a Spider’s Web?

On the heels of the worst financial crisis since the Great Depression, financial reform legislation passed last year directed the Congress’ General Accountability Office (GAO) to examine Fed emergency lending in the crisis, and also to review the Fed’s governance.  Last month, the GAO issued its first report.  This report documented how the Fed extended over $1 trillion of various forms of emergency lending, and politely identified room for improvement in management procedures administering this kind of aid in the future.  The second report, with broader implications for the future of our central bank, will likely be issued in October. 

To help set the stage for that second report, here’s a review of the basic framework for Federal Reserve governance, and a brief introduction to some of the topics relevant for that second report:

The Federal Reserve System, “the Fed,� has a lot of moving, interconnected parts.  The two basic components are the Federal Reserve Board of Governors, and the collection of 12 Federal Reserve Banks.  In turn, the Federal Open Market Committee (FOMC) melds those two parts to make the Fed’s main monetary policymaking body.

The Board of Governors is a government agency, an independent regulatory commission like the SEC.  The Board has 7 seats which are (normally) filled by Presidential appointment, subject to Senate confirmation.  (Two of those seats have been vacant for some time.)  The Board appointments are for 14 year terms, and they are ‘staggered’ (the individual terms do not coincide with one another).  The long, staggered terms are asserted to promote a valuable independence from nearsighted political influence.  By law, one of those seven members is appointed by the President to serve as Chairman.  Ben Bernanke was first appointed to that post in 2006 by George Bush, and he was reappointed to that role by President Obama in 2010. 

The Board of Governors is primarily a policymaking and oversight body, while the day-to-day operations, supervisory and examination roles, and economic reconnaissance are the main province of the 12 Reserve Banks around the country.  The banks are separately chartered government corporations.  The Federal Reserve Act stipulates that they are to be “conducted under the supervision and control of a board of directors.� But Reserve Bank operations are also subject to supervision and regulation from the Board of Governors and Congressional oversight lies behind the scenes as well, at least in theory.  In another melding of authority, Federal Reserve supervisory authority for private financial institutions is rooted in the Board of Governors, but much of that authority is delegated by the Board of Governors to the Reserve banks, with the Board retaining oversight authority after that delegation.

Each of the 12 Reserve Banks is led by a president, whose appointment by the Reserve Banks’ board of directors is subject to the approval of the Board of Governors in Washington.  Each of the 12 Reserve Banks is governed by their own board of directors, with the boards holding 9 members grouped in three classes.  The 3 Class A directors in each Reserve Bank board are elected by member banks in the district, and ‘represent’ those member banks.  The three Class B directors are also elected by member banks, but ‘represent’ the public, at least in theory.  The three Class C directors are appointed by the Federal Reserve Board of Governors, and they ‘represent’ the public as well.  Read more È

The Boiling Frogs Presents Gould-Fitzgerald

Elizabeth Gould and Paul Fitzgerald join us to talk about their recently released book, Crossing Zero: The AfPak War at the Turning Point of American Empire. They discuss the origins of the Taliban and the array of armed groups in AfPak that are lumped together as “Taliban� by US media and politicians. Gould-Fitzgerald talk about Pakistan’s double play, the struggle for oil and gas that is the basis for the conflict, pipeline politics, the confused or even lack of strategy in the senseless costly war, the current corruption ridden puppet regime in Afghanistan, Obama administration’s drone-mania, their 8-point plan for ending the US occupation, and more!

Paul Fitzgerald and Elizabeth Gould, a husband and wife team, began their experience in Afghanistan when they were the first American journalists to acquire permission to enter behind Soviet lines in 1981 for CBS News and produced a documentary, Afghanistan Between Three Worlds, for PBS. In 1983 they returned to Kabul with Harvard Negotiation project director Roger Fisher for ABC Nightline and contributed to the MacNeil/Lehrer News Hour. They continued to research, write and lecture about the long-term run-up that led to the US invasion of Afghanistan. They are featured in an award winning documentary by Samira Goetschel. Titled, Our own Private Bin Laden which traces the creation of the Osama bin Laden mythology in Afghanistan and how that mythology has been used to maintain the “war on terrorâ€� approach of the Bush administration. Their latest book Crossing Zero: The AFPAK War at the Turning Point of American Empire published by City Lights in March 2011 focuses on the nuances of the Obama administration’s evolving military and political strategy, those who have been chosen to implement it, and the long-term consequences for the U.S. and the region.

Here are our guests Elizabeth Gould & Paul Fitzgerald unplugged!

*For the history of democracy in Afghanistan, and a detailed recounting of the US support for the Mujahiddin during the 1980′s Soviet occupation, creating some of the “blowback� seen in the current US occupation, listen to Peter B Collins’ recent interview of the Gould-Fitzgerald duo here.

This site depends exclusively on readers’ support. Please help us continue by contributing directly and or purchasing Boiling Frogs showcased products.

A Caucus to Combat Terrorism, Domestic Violence, Divorce & Job Dissatisfaction via ‘Happiness Pill’

According to our inside sources a new Bipartisan Congressional Caucus for Prozac will be launched before the end of the 112^th Congress. The primary purpose of the Prozac Caucus will be to raise awareness and advocate for this ‘miracle drug’ aka ‘happiness pill,’ on the grounds of combating homegrown terrorism and domestic violence, lowering the national divorce rate, and increasing the level of general job satisfaction among the restless American workforce. “Increasing the level of general satisfaction and happiness, while decreasing the effects of violence and despair inducing factors such as anxiety and depression, are the major keys to achieving long term national security, family unity, and work force stability. With Prozac we believe we can achieve all that and more,� said a congressional aide who wished to remain anonymous. The caucus will have an interactive website with easy-to-print promotional materials and a password protected section for physicians titled ‘Patriotic Physicians for a Secure America.’

Let’s start with what is a congressional caucus, or at least what it is supposed to be, in theory that is. A congressional caucus is a coalition of House and Senate members who meet to discuss specific legislative priorities and policy issues. Caucuses ‘supposedly’ allow members to discuss issues to determine their positions and make sure their votes are informed. They can also give ‘advocates’ a chance for a group of legislators to champion their cause on the Hill. You may go ahead and change ‘advocates’ to ‘lobby and you’ll be even more on target.

When we look at the long list of these caucuses, a list that initially had only a few but seems to lately  have taken off rapidly, we see some caucuses that seem rather ‘ordinary and expected;’ for example,  Children’s Environmental Health Caucus or Congressional Dairy Farmers Caucus. We also see some ‘amusing’ ones, such as Congressional Bike Caucus, Congressional Soccer Caucus, and Congressional Boating Caucus.

You follow me so far? Okay, then there are more than a few caucuses that are ‘confusing:’ Democratic Israel Working Group, Congressional Israel Allies Caucus, Congressional Friends of Jordan Caucus, and other ones for Turkey, Jordan, etc.  Why do I say ‘confusing’? Well, in the above paragraph we outlined the caucus definition, which includes ‘giving advocates, aka lobbies, a chance to influence, aka lobby, their cause through the members of their caucus. In this case, the advocates, aka lobbies, are foreign, and this means ‘direct foreign influence,’ and that in turn would make the representatives in these caucuses who then influence and lobby the rest of the Congress ‘foreign agents.’ Think of it as two-tiered foreign lobbies: Read more È

“Speaking Fee� is the New Name for Political Donation Laundering-Rechanneling (PDLR)

Political donation laundering-rechanneling (PDLR) is a business in its own right, whether it is for pre-election donations or post-election maintenance contributions.  In most cases, PDLR requires savvy strategists and planners, quick-witted implementers, friends and enablers in high-places, and a high degree of creativity, almost to the point of being artistic. However, once in a while, an extraordinary situation may present itself, where neither imaginative planning nor creative strategy is necessary, and where limitless dollars can be channeled to Candidate A or Public Servant B or Representative C in plain sight. Really! In the PDLR world they call this the Miraculous Human Funnel. For the last ten years Former President Bill Clinton has been PDLR’s continuous miraculous funnel, and what a funnel he’s been, indeed!

Since leaving the White House in 2000, the Hillary-Bill Clinton duo have expanded their wealth by more than 100 fold to over $110 million dollars. In 2000 the Clintons left the White House with an $11 million dollar debt and annual income of $358,000. But within eight years, through ‘speaking fees,’ books, and a maze of ‘mysteriously smart investments,’ the couple’s net-worth exceeded one hundred million dollars. When asked, when pressed a little (only ‘a little’ thanks to the extreme kindness of US mainstream media when it comes to the Clintons), they attribute their ‘great fortune’ to the demand for Bill Clinton as the ‘Orator Extraordinaire.’

You see, there’s always been a certain degree of demand for former US presidents’ speeches, at least for those in the last three decades, but never anything like the bewildering demand for Bill Clinton; not even close; both in terms of the dollars per speech and the quantity of invitations. But then again, there has never been a former president in a very special situation like this; one with a wife as a senator (serving on the Committee on Armed Services among others) and later as Secretary of State. With a wife in such positions, no wonder the great demand, whether it is China or Kuwait or Columbia; whether it is Goldman Sachs or Citigroup or Sakura! Who said ‘Talk is Cheap’! The top players in the PDLR business circuit call him the ‘miracle funnel boy. Here is one example:

Many of Bill Clinton’s six-figure speeches have been made to companies whose employees and political action committees have been among Hillary Clinton’s top backers in her Senate campaigns. The New York investment giant Goldman Sachs paid him $650,000 for four speeches in recent years. Its employees and PAC have given her $270,000 since 2000 — putting it second on the list of her most generous political patrons.

The banking firm Citigroup, whose employees and PAC have been Hillary Clinton’s top source of campaign donations, with more than $320,000, paid her husband $250,000 for a speech in France in 2004. Last year, it committed $5.5 million for Clinton’s Global Initiative to help encourage entrepreneurship and financial education among the poor.

…

Now interestingly, two-thirds of Bill Clinton’s speaking money came from foreign sources. Somehow, outside the United States clients are willing to pay even more to hear him speak! As for the timing ofthis foreign demand intensification: Read more È

Pacified & Lulled, Still Waiting for the Pendulum to Swing

It was a rainy April day in 2004, and I was in the office of one of my professors at the university’s Public Policy Graduate Department. I was having one of those defeated and disillusioned moments that kept recurring during that time period. I think you would have found it justifiable: I had been slapped with two separate gag orders via two separate invocations of state secrets privilege, I had just witnessed the Congress being hit with another gag order in my case via retroactive classification issued by the Justice Department, we were at war in Iraq based on lies, the PATRIOT ACT was in full swing, secret kidnapping and detention operations by our paramilitary were taking place all over the world, congressional corruption and revolving door scandals were popping up one after another…So, you see, all this and being almost at the end of my masters program specializing in US public policy, where what we were taught didn’t match reality on the ground (US politics and government) whatsoever, gave me a certain degree of justification for feeling  the way I felt that day.

Sitting across from my professor I threw out the questions: Why can’t I see a single instance of practices indicative of our so-called system of checks and balances? Isn’t it more like three illusionary branches but actually one system serving the interests of a very few? Isn’t our nation headed towards a police state; fast and furiously? How do all these in-theory-only fanciful policy concepts apply to real-politics on the ground? …

My professor smiled and nodded. After letting me vent, he calmly replied:

“You are young. You have to look at what’s been happening and place it in historical context. If you look at the US political climate over the last century you’ll see this Pendulum Trend. Things get really bad for civil liberties and good governance for a few years, sometimes even for a decade or more, then, things swing back the other way, and you see Renaissance-Like changes towards the other direction. We go through a hawkish period with wars, and then, we get into a more pacifist mode. We get a conservative administration and lose some of our welfare gains, but a few years later we get a liberal government and put in place new welfare programs…Things don’t stay the same. It’s been only three years or so since 9/11. Very soon people will get over the initial shock and fear, and they’ll push out the current national security state of government…This is the cyclical nature of US politics…�

I looked up at him, and asked:

“So you are saying this Pendulum will swing the other way? All by itself? So we just sit tight and wait for this pendulum to swing the other way?�

He shook his head, and replied:

“It’s a bit more complicated than that, but yes, time takes care of some of that. Other actors outside the state will play their role…you know, various NGOs, etc. Changes in the economy will be another ingredient…of course, the media…the Bush administration will be replaced, and most likely, it will be replaced by the other party, bringing in a liberal oriented administration… So, yes, give it some time and you’ll see the Pendulum swing the other way…�

Tell you what: I have heard this ‘Pendulum Swing’ story-theory many many times since; especially from academians, tunnel-vision analysts, crusty politicians, and to a certain extent, from the general public – those with a bit higher education who consider themselves politically involved and savvy. The more I study history, the further I delve into our real governance record, the more I look at the last half century’s graph on fluctuation of the real ingredients (here at BFP we call these the real diseases, the macro causes)…well, the more I get pi..ed with this utterly nonsensical and false yet widely-held notion of ‘just wait for the ‘Pendulum Swing.’ Read more È

The Boiling Frogs Presents Corey Pein

Corey Pein recounts the creation of the recently launched groundbreaking site warisbusiness.com, a nonpartisan site covering military contracting, the global arms trade and the lobby, and how he began the project with two assumptions: The first- a lot of people are making money from war, while enjoying the comforts of anonymity (such people were once plainly called profiteers), and the second: Privatizing war inevitably prolongs it, creating what economists call a “perverse incentive.� Mr. Pein discusses the bought out generals and the militarization of the economy, and the latest on the ‘Rent-A-Generals’ exposé. He talks about scandals such as Mina Corp and the subsequent cover up, US Embassies as marketing arms of military corporations, the win-win outcome of elections for the Pentagon contractors and arms makers, Wikileaks, and more!

Corey Pein is an award-winning investigative reporter and long-form narrative journalist who writes about the military industrial complex, money, politics and violence from London, UK. Previously, he has lived in New Mexico, Oregon, Georgia and in Southeast Asia. His latest project is warisbusiness.com, a startup news site covering military contracting and the global arms trade. Mr. Pein has worked on staff at Columbia Journalism Review, Willamette Week, the Santa Fe Reporter and IHT ThaiDay, and contributed to Salon, Slate, The American Prospect, and CounterPunch, among others.

Here is our guest Corey Pein unplugged!

Note- Boiling Frogs selects warisbusiness.com as the best website of 2010!

This site depends exclusively on readers’ support. Please help us continue by contributing directly and or purchasing Boiling Frogs showcased products.

Obama’s Nominee for Azerbaijan Ambassadorship Misleads Congress on the Issues of Conflict of Interest & Questionable Ties

In response to questions at the hearing that he was too close to Azerbaijani Government officials with highly questionable ties, Matt Bryza remained evasive and provided half-answer responses while denying any special ties or conflicts of interest due to his controversial and scandalous Neocon wife, Zeyno Baran. After the hearing Bryza submitted even more evasive and incomplete answers to a series of questions submitted separately by Sen. Bob Menendez (D-NJ) and Sen. Barbara Boxer (D-CA). Particularly on one significant issue related to his questionable ties and conflict of interest related to his wife’s intimate relationship and position, Bryza may have actually perjured himself.

During his confirmation hearings Bryza tried very hard to assure Congress that there were no reasons whatsoever to worry about conflict of interest(s) based on his marriage to Zeyno Baran, and that she had given up all positions and involvements related to Azerbaijan. At the hearing, he said that his marriage would present no conflict of interest, and that a thorough State Department vetting of his finances found nothing untoward. He said Baran would not influence his positions as ambassador, and that any common positions they held were the result of kindred spirits.

In all this, Bryza conveniently forgot to report or even mention his wife’s official position as a member of the editorial board of an Azerbaijani government institution, the journal Azerbaijan Focus: Journal of International Affairs. And guess what, according to its website, Azerbaijan Focus “is a publication of the Center for Strategic Studies under the President of the Republic of Azerbaijan.�

Now, how could Bryza forget this mammoth conflict of interest, and do so despite being put under the direct spotlight with even more direct questions on this specific topic regarding his controversial bride?! Guess who happen to be Zeyno Baran’s colleagues at this position?

Ms. Baran serves on the editorial board along with several Azerbaijani government officials including Elmar Mammadyarov, Minister of Foreign Affairs of the Republic of Azerbaijan, the Chairman of the Editorial Board Ramiz Mehdiyev, Head of the Administration of the President of the Republic of Azerbaijan, and Hafiz Pashayev, Deputy Minister of Foreign Affairs of the Republic of Azerbaijan.

In July I wrote a rather long article on Bryza’s background, the issues surrounding his Neocon wife, and their scandalous and lavish wedding in Turkey. Considering Zeyno Baran’s position at this journal owned and operated by the Azerbaijani government, no wonder the two investigative Azerbaijani journalists who uncovered and reported Bryza Wedding’s Azerbaijani guests and financiers were beaten up, arrested, and jailed for their exposé!!!! The reporters brought the needed attention to Bryza’s certain special guests, who happened to be political figureheads from Azerbaijan, and the special gifts and financial contributions by them to Bryza’s bride and her nearly quarter million dollar wedding expenses.

But wait, there is more! In addition to serving on a board of an Azerbaijani government institution, there is this not so insignificant question on funding of Mrs. Bryza’s employer, the Center for Eurasian Policy at the Hudson Institute. Mr. Bryza has stated, many times, on the record, that his bride has been on leave without pay from the Hudson Institute since June 1, 2009. However, there are numerous instances where Ms.Baran has been listed as an active employee of the Hudson Institute since that date, including as recently as August 2010.

As for funding of Mrs. Bryza’s employer? Well, no one seems to know, and those who really want to know have been blocked from finding out. The infamous Hudson Institute is pretty well-known for its tight-lipped policies on the sources of its funding. To this date, despite inquiries, they have not responded to questions regarding funding from Azerbaijani businesses or foundations or corporations with an interest in Azerbaijan. However we know this much:

-In 2007, the Hudson Institution’s Center for Eurasian Policy, hosted a conference, titled “The Azerbaijan- Turkey- US Relationship and its Importance for Eurasia.â€�

-According to their own published “Event Summary and Conclusions,” this event was financed by a foreign entity, the “Azerbaijan-Turkey Business Association,” with direct financial interests in Turkey and Azerbaijan.

-The majority of speakers at this conference, held at the Mayflower Hotel in Washington, were officials from the Azerbaijani and Turkish governments.

Now how is that our Mr. Bryza fails to report and account for these crucial facts? Further, shouldn’t his official responses to the specific questions asked on these issues be considered perjury? Because being evasive and wishy-washy go only so far in explaining the absence of these facts. At some point, someone in Congress will hopefully look into the real meaning and implications of Bryza’s foolish attempts to dodge questions meant to determine his suitability for this job. Evasive? Or just plain perjury?

# # # #

Update: Here is a recent analysis of possible outcomes on the Bryza vs. Azerbaijan Ambassadorship by Harut Sassounian, who had earlier written this piece on major issues surrounding Bryza’s Senate confirmation.

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The Long Intended Chaos

According to news reports, the Obama administration is once again reevaluating how to deal with Afghanistan’s Hamid Karzai out of fear that it may now be holding him to unrealistic standards of U.S. law enforcement. This comes after a summer of news that Karzai continues to find new ways of resisting Washington’s efforts to rein in rampant corruption in his government.  Now we hear from legendary Washington Post reporter Bob Woodward that the U.S. has intelligence showing Hamid Karzai is under medication for manic depression and that Obama’s national security team doubts that “his strategy in Afghanistanâ€� (whatever that may be at the moment) can work. The tug of war between Kabul and Washington has become so desperate, former CIA Near East, South Asia Chief Dr. Charles Cogan recently opined that the situation was fast approaching a “Diem Moment.â€� Cogan even suggested that while Diem’s removal had been “horribly botched,â€� “a removal of Mr. Karzai might turn out to be more straightforward.â€� Given the similarities to America’s quagmire in Vietnam, invoking Diem raises more than a few dark memories. Yet despite vast differences in the two wars another even more deeply unsettling similarity is emerging. Hamid Karzai is in a political fight for his life like South Vietnam’s Ngo Dinh Diem. But (strange as it might seem) his contradictory behavior and the chaos and corruption surrounding it may be no accident. In fact it could be exactly the consequence that his main neoconservative backer, former RAND director, U.S. Ambassador and Special Presidential Envoy to Afghanistan Zalmay Khalilzad, had long intended.

 

According to Thomas Ruttig, a United Nations official present at the mid-2002 Kabul Loya Jirga that installed Karzai, “Khalilzad was the driving force behind THE mistake committed in the post-Taleban period that basically and fundamentally undermined the – possible! – emergence of a stable Afghanistan by bringing in the warlords again and allowing them unrestricted access to the new institutions…  Re-empowered militarily and politically, the warlords expanded the realms of their power into the economy. With their [U.S. Special Forces] Alpha Team seed capital they took over that part of the economy that matters in Afghanistan, the poppy and heroin business. With the profits from this they expanded into what remains of the licit economy: import of luxury goods, cars, spare parts, fuel and cooking gas [and] real estate often by occupying government-owned land…�

 

When asked in the spring of 2010 whether Khalilzad should be invited back to assist the Obama administration, former Special Assistant to President Reagan, Reagan-Doctrine Architect and honorary Afghan “Freedom Fighter,� California Congressman Dana Rohrabacher told Huffpost interviewer Michael Hughes, “He [Khalilzad] oversaw the establishment of a government that was unable to function in Afghan society. And on top of that he browbeat people into accepting Karzai. He even browbeat the ex-King of Afghanistan Zahir Shah into accepting him. Khalilzad was not in the anti-Taliban camp in the 1990’s, so why the hell would we bring him in now? By forcing Karzai into office, Khalilzad snatched defeat out of the jaws of victory because the Taliban were beaten at that point.�

 

To both Ruttig and Rohrabacher, Khalilzad’s ultimate crime – like the U.S. manipulation of the Ngo Dinh Diem regime in Vietnam – was that his corruption of the Karzai regime had created so much internal chaos that no amount of outside effort could undo it. Yet the idea that chaos, as a form of extreme social engineering, may have actually been the plan cannot be ignored.

 

If anyone embodies the Cold War neoconservative philosophy that came to dominate American foreign and military policy from Jimmy Carter to George W. Bush, it is Zalmay Khalilzad. Khalilzad first came to the United States as a high school exchange student.

 

He received his bachelor’s and master’s degrees from American University in Beirut and his doctorate degree from the University of Chicago where he met and studied along with Paul Wolfowitz under the RAND nuclear warfare theorist, former Trotskyite and father of neoconservatism, Albert J. Wohlstetter.  It was Wohlstetter’s early 1970s series of articles in the Wall Street Journal and Strategic Review that prompted the politicized CIA analysis known as the Team B experiment. It was the Team B’s adherents both inside and outside the Carter administration who set the stage for undermining détente and luring the Soviets into the Afghan trap and holding them there while Afghanistan disintegrated. And it was the same Team B brain-trust of Wohlstetter acolytes including Khalilzad that went on to provide the philosophical template for the politicized intelligence process that led to the strategic military disasters of Iraq and Afghanistan. 

 

In her 1972 book about Vietnam, Fire in the Lake, author Frances FitzGerald wrote of the perverse illogic of another of Wohlstetter’s onetime RAND protégés, Herman Kahn.

“Just before his departure for a two-week tour of Vietnam in 1967, the defense analyst, Herman Kahn, listened to an American businessman give a detailed account of the economic situation in South Vietnam. At the end of the talk – an argument for reducing the war – Kahn said, ‘I see what you mean. We have corrupted the cities. Now, perhaps we can corrupt the countryside as well.’ It was not a joke. Kahn was thinking in terms of a counterinsurgency program: the United States would win the war by making all Vietnamese economically dependent upon it. In 1967 his program was already becoming a reality, for the corruption reached even to the lowest levels of Vietnamese society.â€� Read more È

The Boiling Frogs Presents Glenn Walp

Glenn Walp discusses his recently published book, Implosion at Los Alamos: How Crime, Corruption, and Cover-Ups Jeopardize America’s Nuclear Weapons Secrets , and describes major lapses in security at the Los Alamos National Laboratory in New Mexico, where scientists developed the world’s first atomic bomb back in 1945. Through well-documented facts and first hand experiences, Mr. Walp provides us with an alarming exposé on America’s vulnerability to those who may now be in possession of our most sensitive nuclear weapons secrets.  He talks about several high profile security lapses and the corruption, thievery and cover-ups he uncovered during his investigations at Los Alamos Lab, the bungled investigation of the Wen Ho Lee case, his experience as a whistleblower, his motivation to write this book, and more.

 

Glenn Walp worked as the Office Leader of the Office of Security Inquiries at the Los Alamos National Laboratory, where he denuded major crimes, mismanagement, corruption, and cover-up, as well as crucial security and safety breeches. His exposures helped result in 3 Congressional Hearings, the firings/reassignments of 19 lab officials, and that the contract to manage Los Alamos be put up for bid for the first time since the beginning of the Manhattan Project. Walp is a 35-year veteran law enforcement officer, working 29 years with the Pennsylvania State Police, retiring as Commissioner, and a member of the Governor’s Cabinet, and being the Chief of Police for 2 entities in Arizona. He has a BA in criminology, MA in criminal psychology and a PhD in criminal justice, and is a graduate of the FBI National Academy and Executive Institute. He is the author of recently published Implosion at Los Alamos.

Here is our guest Glenn Walp unplugged!

This site depends exclusively on readers’ support. Please help us continue by contributing directly and or purchasing Boiling Frogs showcased products.

Maksim Bakiyev: A Groomed Puppet Who Never Came to Be King

Kyrgyzstan’s Wanted Fugitive: Maksim Bakiyev. The story is more or less the same – the one that has been repeating itself for many decades.  The one based on a script written by the very same conductors who wrote the ones before, and who will probably be writing the ones to come (yes, they’re blessed with longevity; a curse for the rest of us). The location – always a resource rich country or one strategically crucial to resource rich countries. A viable candidate (sometimes candidates) chosen based on the exact same set of criteria – such as degree of corruptibility, and degree of atrocity or criminal tendencies. The grooming and training locations also are the same: the United States of America or the proxy brother, The United Kingdom. The supporting actors are a combination of old timers, think World Bank or IMF, and newer ones with even fancier names, such as XYZ Democratization and Development Fund, posing as well-intentioned NGOs. Okay, enough with the details, since we are very familiar with this repeating script and its consistent execution – collectively known and referred to as United States Foreign Policy.

The Bakiyev ‘Groom & Plant’ script, like almost all its predecessors, contains the same good ole classical elements: strategically important Central Asian nation, vital US fuel supply artery to keep the war machines humming and destroying in Afghanistan, major artery for transportation of heroin, puppet NATO partnership & the same-o-same-o big bad Russians to compete with, dozens of US NGO’s planted to serve you-know-who’s interests (here is a hint: not the people of Kyrgyzstan nor the American people), a staged and orchestrated revolution by our State Department – named after a innocently beautiful flower – to overthrow the guy who was closer to China & Russia, planting a new corrupt despot clan all carrying the same last name-Bakiyev. Then taking the son, the prince, Maksim Bakiyev, under ‘the mighty’ wings and starting his grooming and training here in the United States, helping the new groomed prince set up companies to corrupt & embezzle, and actually having our CIA operator(s) and politicians partner up with him in these enterprises – allocating  US financial experts, politicians,  and operators to execute a massive embezzlement scheme by the ‘groomed & planted’ prince, later to become a wanted fugitive ‘groomed but no longer planted’ prince with at least $70 million to be rescued and brought under protection…

Basically, with the Bakiyev story we have another all too familiar foreign policy and practices abroad scenario repeating itself. Before I get into that way too familiar story I want to revisit a couple of old ‘groom & plant’ examples I have covered here at Boiling Frogs post, starting with a ‘groomed & planted, and later protected’ Former Prime Minister of Turkey, Ms. Tansu Ciller as a perfect example of a Middle Eastern leader who was selected, declared ‘viable,’ supported, promoted, installed, and protected by our foreign policy script writers:

1. Ms. Ciller completed her advanced degrees in the United States – M.S. from the University of New Hampshire and PhD from the University of Connecticut. During this extended period while she resided in the US we had ample time and opportunity to train and mold her for the leadership position in Turkey.

2. Ms. Ciller was granted citizenship in the United States. In order to keep this fact from tarnishing her image during her candidacy campaign in Turkey and afterwards, we designated her US citizenship status ‘Classified and Top Secret’ on the grounds of Sensitive Diplomatic Relations. To this date, despite all attempts, Turkish authorities have been unable to have these files opened.

3. Ms. Ciller and her husband Ozer Ciller were closely involved with certain CIA operations prior to and after her return to Turkey, and their intimate relationship continued throughout her tenure as Prime Minister of the Republic of Turkey. In fact, the CIA’s Roger Tamraz (see BCCI) was their partner in two front companies: ‘Emperyal’, which acquired and operated six (6) Casinos in Turkmenistan, and, ‘Lapis,’ involved with the oil pipeline project.

4. Ms. Ciller and her husband, before being considered ‘viable’ by us, already had an established shady financial past, including involvement in an embezzlement scandal connected to the collapse of ‘Istanbul Bankasi’, one of Turkey’s largest private banks. This along with involvements fortified Ms. Ciller’s qualification criteria when compared to competing applicants.

5. Ms. Ciller understood and participated in Turkey’s important strategic and operational role in the supply and transportation of heroin. She skillfully and very aggressively combined and furthered the marriage between the state military-police-intelligence and the underground heroin industry. Her notoriety even reached the German Courts, where she was accused of supporting and protecting the drug mafia – active not only in Turkey but elsewhere, including Europe and Central Asia.

6. Ms. Ciller played a direct role in scandals involving corruption, embezzlement, and state sponsored terrorism and narcotics operations. The best known scandal, one of her masterpieces, is known as ‘Susurluk’. Ciller and her husband – who is known for his mafia links and dealings, were directly implicated in Susurluk. The high profile kept by Ms. And Mr. Ciller during these scandals and their handling of them afterwards significantly bolstered their ‘value’ and ‘viability’ for us.

7. Ms. Ciller’s ‘known’ wealth is confirmed to be over $50 million, all of which was gained after she became a ‘’viable’ candidate supported directly by the US. A large portion of her investments and accounts are in the United States.

And here is our second example with the almost exact same script, a ‘groomed & planted, and many times rescued’ puppet(s) in Pakistan. I am making that ‘puppet’ plural since the same script happens to extend to the spouse who currently rules, kinda! And here is the list for the Former Prime Minister of Pakistan, Ms. Benazir Bhutto:

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1. Ms. Bhutto obtained her bachelor degree in the United States – BA from Radcliffe College at Harvard University. Later she attended Oxford University in the UK where she pursued International Law and Diplomacy. She spent a total of eight years in the US and UK – 1969-1977. Again, this time spent ‘abroad’ was ideal for the satisfactory grooming of Ms. Bhutto for ‘installment.’

2. Ms. Bhutto was granted British Citizenship and maintained her dual citizenship throughout her career as a candidate and later as the Prime Minister of Pakistan. Her husband, the current President of Pakistan, also received British citizenship and has maintained his dual citizenship to date. The perceived conflict of interest back in her home country did not prove to be an obstacle for ‘us’ or the Bhuttos, thanks to our PR and global image projection activities.

3. Ms. Bhutto and her husband maintained intimate relationships with the underground economy and high level players of the heroin pipeline. Ms. Bhutto was a close ally, protector, and intimate friend of convicted Pakistani Drug Baron and Former Parliamentarian, Ayub Afridi, who like Bhutto, was given protection and safe haven in Dubai, one of our closest allies. These relationships and direct connections, some of which were directly inherited from her father, significantly bolstered Ms. Bhutto’s value for us and our British counterparts.

4. Ms. Bhutto and her husband proved to be desirably ambitious and admirably skilled in using their power, position, and connections, together with our protection, to misuse their proceeds of corruption and embezzlements to accumulate great wealth. Today her husband, who inherited this wealth, is the fifth richest man in Pakistan with a net worth of nearly $2 billion. As confirmation of their successful accumulation of wealth, in the 90s Ms. Bhutto and her husband purchased a 20-bedroom mansion in Surrey, England. They were known for their proficiency in receiving ‘kickbacks.’ Just the kickbacks they received from Swiss Cargo Inspection Companies alone were worth $12 million, which they stashed wisely in offshore companies in Swiss bank accounts.

5. Ms. Bhutto’s Bill of Mental Health was not of much interest. However, she was permitted to transfer credits from her husband, Mr. Ali Asif Zardari. His is a far more interesting mental health record, made all the more interesting since she pledged to place him in an official position of power. He and his ‘mental health’ conditions proved to be extremely useful in ‘necessary’ operations involving murder, drug smuggling, corruption, and embezzlement, thus our making an exception for Ms. Bhutto was justified in this particular case.

6. Ms. Bhutto exhibited great skills in ‘Multiple Image Projection’. With our direct backing and promotion she quickly sold her image as a needed progressive, democratic, and pro humanitarian leader for Pakistan. Just as quickly, at home in Pakistan, she was able to establishherself as equal to if not better than her dictatorial predecessors by sanctioning and carrying out extrajudicial killings, torture, persecution of religious minorities, and arbitrary detention. She also determinedly took extraordinary measures to muzzle the independent media. These skills were also applied to her utilization and exploitation of feministic support. At the same time she was portraying herself as a progressive and feminist example for ‘that’ part of the world, she was making deals and establishing close ties with the Taliban regime in Afghanistan, notorious for their abuse of women…

Maksim Bakiyev: A Brief & MSM-Preferred Case Background

Let’s start with the commonly known, easily retrievable Wikipedia and mainstream media based background on Maksim Bakiyev and related recent news.

Who is Maksim Bakiyev? He is the 33 year old, fugitive, Kyrgyz businessman, the younger son of Kyrgyzstan’s former president Kurmanbek Bakiyev. Maksim currently lives in the United Kingdom – where he’s been granted residency and provided with protection (including for his embezzled millions). He studied legal law in Kyrgyzstan. According to his Wikipedia bio:

He received additional education on legal issues in Britain and the US. As a student, Maksim worked in a consultation firm, specializing in investment into emerging markets in Central Asia and the Middle East. Maksim was widely believed to be the richest man in Kyrgyzstan.

Hmmmmmm. What are the major information points missing here? What the heck did he really study in the US and Britain? Which universities? Was it Langley Campus? Where did he reside? McLean, Virginia? What was the name of this mysterious consulting firm specializing in investment into emerging markets in Central Asia & the Middle East? Was it one of James Baker’s firms? Or was it Henry Kissinger’s? Or, was it Carlyle? And, how did he become the richest man in Kyrgyzstan, from having nothing, in less than 5 years?

After skipping over all these important ‘missing links,’ we are fast forwarded to the latest presented by the media and here at Wikipedia:

Maksim was in charge of delivering fuel to the Manas International Airport, which also hosts a US airbase,^[2] through Mina Corp. Maksim was appointed the head of Central Agency for Development in October of 2009. Since the 2010 overthrow he has been charged with embezzlement and abuse of power by the interim government. It is suspected that transferred about $35 million of a $300 million loan from Russia into his private bank accounts.^[3] Prosecutors also allege that companies he owned almost $80 million in taxes on aviation fuel.

And finally, his latest and current status has been summed up below:

When the 2010 uprising took place, Bakiyev was headed to the US for a series of meetings in Washington.^[5] However, he never showed up, and it is believed he spent his time in Latvia. In May Interpol posted Maxim Bakiyev as wanted on its website.

On June 13, 2010 Maksim was arrested in the UK when he landed at Farnborough Airport in Hampshire in a privately hired jet.^[6] He is seeking asylum there, but the interim Kyrgyz government is demanding his extradition. A senior Kyrgyz official warned that the interim government would consider shutting down the Manas US airbase if Britain refuses to hand him over. ^[7] However, this was later denounced by president of Kyrgyzstan, Otunbaeva.

On June 18, 2010, it was reported that Bakiyev was granted temporary asylum in the UK, but this was later refuted by the UK Border Agency. ^[8] He does however have permission to stay pending consideration of request for asylum.

As you can see above, I highlighted another important missing link – a major point that has been so far glossed-over: This fugitive was initially headed to the US for a series of meetings in Washington. And these meetings were set up during and after the scandals involving him coming into the surface. Okay, at The State Department, CIA, and of course the not-so-visible agenda-setters at their companies, think tanks, and front NGOs? Then what happened? I guess  it was decided that he was too hot of a potato in too hot of an environment, so our State Department put a request to their counterparts in Britain to kindly ‘receive and harbor’ their ‘groomed & planted’ Kyrgyz prince…and they did.

So the above information is the sketch, the general story line on the ‘Bakiyev Story.’ Then, there are some additional juicy details and tidbits provided by a few, although still highly sanitized and consciously refrained from posing ‘the real’ questions. Let’s take a look at these and pose logical questions as we go.

Maksim Bakiyev & ‘Foreign’ Facilitated Embezzlement Schemes

So how did Maksim Bakiyev’s meager personal business grow into a major empire encompassing banking, oil, and telecommunication industries? We don’t have the complete answer to this question; not yet. Not with so much information still buried and ‘protected,’ and with only little sketchy details here and there. Read more È