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	Political negotiations, not war, should drive regime change by Louise Arbour International Crisis Group   26 June 2012   For Justice and Civilians, Don"t Rule Out Regime Change, by Louise Arbour, (Globe & Mail)   Civilian casualties in Syria shock our consciences, but there is also a frustrating acknowledgment that military intervention there might do more harm than good. The best option to protect Syrians is peace; ending the conflict should also end the massacres. But is the reverse true? Would an initiative aimed solely at protecting civilians resolve the conflict? Not necessarily.   Responsibility to protect – the emerging principle that states can intervene in other states to prevent mass atrocities, invoked in the case of Libya – suffers from the same uncomfortable relationship with peace that justice does. In both cases, the desired objective – protecting civilians or bringing criminals to justice – falls short of, or is often even at odds with, the objective of peace. Humanitarian or judicial objectives address only the manner in which the conflict unfolds, not its ultimate resolution.   In Libya, this dilemma was resolved by merging the three objectives. First, justice: The United Nations Security Council referred the matter to the International Criminal Court. Second, civilians: It authorized “all necessary measures” to protect them. Third, presumably hoping to achieve the first two objectives, the North Atlantic Treaty Organization undertook to bring an end to the conflict by effecting (or supporting, depending on your perspective) regime change.   But the manner in which this happened, with NATO widely thought to have overinterpreted its mandate, exposes weaknesses in the current approach. Under both international criminal justice and R2P, the interventionist role of the international community is predicated on the fact that the state in crisis, which has the primary responsibility for protecting its people and dispensing justice, is “unwilling or unable” to do so.   This language of inability or unwillingness is overly diplomatic. It obscures the reality that in many modern conflicts, including those in Libya and Syria, the state itself, or at least its officials, have embarked on a deliberate rampage against part of the population. This is a huge leap from “unwilling or unable.   If a state launches a massive criminal enterprise against its people, why should “all necessary measures” fall short of disabling those responsible, including by forcibly removing them from power? This is what was done against Moammar Gadhafi in Libya – in my view entirely predictably. (Disclaimers to the contrary were neither credible nor honest).   Interestingly, although the Security Council has approved “all necessary measures” to protect civilians, it has not done so to enforce its referral of cases to the ICC. Had that happened, and had states been prepared to act upon its authority and intervene militarily to arrest such indicted war criminals as Mr. Gadhafi and Sudanese President Omar al-Bashir, the link between the enforcement of justice and regime change would have been immediately apparent. Instead, by leaving arrest warrants idle for years, the international community not only condones impunity but eviscerates justice of much of its deterrent effect.   In the same way, should a military intervention to protect Syrian civilians refrain from toppling the regime? Assuming that military action came to be seen as a viable option – which I doubt, in light of its likely adverse consequences for Syria and the region – why should it not be designed to remove Bashar al-Assad’s regime? After all, how else could it credibly purport to protect Syria’s people from him?   The only reason not to tie regime change explicitly to the protection of civilians or justice is that doing so would make an already elusive Security Council consensus in support of intervention completely unattainable. The solution seems instead to be doing it by stealth or deceit, as in Libya. Or not at all, as with the unenforced ICC indictments   Which is fine, as far as it goes. Political negotiations, not war, should drive regime change (or, in its more palatable form, “transition”). But disassociating the other two pressing concerns – civilian protection and justice – from regime change, at least officially, leaves them hostage to a political process that has no teeth.   * Louise Arbour is president and CEO of the International Crisis Group.   Tunisia: Confronting Social and Economic Challenges   Welcome to this podcast from the International Crisis Group. I am Ben Dalton, Communications Officer in Washington, DC. Eighteen months after initiating the Arab Spring, Tunisia can still boast of an ongoing and successful transition. The former regime, which had symbolised corruption and social injustice, is gone, and democratic gains are palpable. Yet formidable social and economic challenges threaten to halt progress. I spoke with William Lawrence, Crisis Group’s North Africa Project Director, about how those challenges have manifested on the ground.   William, what would you say are the main challenges faced by Tunisia since the revolution over 18 months ago?   The causes of the Arab Spring in Tunisia, like the causes of the Arab Spring in most of the Arab Spring countries, were more economic than political. But the responses of the national governments and international community have been more political than economic. The economic situation in Tunisia has deteriorated significantly since the Arab Spring began. So there are a number of things that need to be addressed.   Certainly the unemployment of university graduates is a major issue and they played a major role in the Tunisian Arab Spring. There are regional inequalities, which need to be addressed, coast versus interior. And certainly the corruption levels in Tunisia have not gotten significantly better. Even though, with the departure of the Ben Ali and Trabelsi families, two families are no longer controlling most of Tunisian private sector, but others have stepped into those roles and we’re not sure how uncorrupt they are.   How would you say that these problems have manifested themselves actually on the street?   There are a lot of different types of manifestations. Certainly, the unemployed university graduates have been very active in street action, whether it was setting up a roadblock or attacking a local government building. Certainly, the labor unions have been very active. There has been clan violence in the mining area where different families fought each other over access to jobs. There have been thousands of labor action strikes. There is even competition among mafia-esque forces or criminal forces over control of local markets and smuggling routes. So there is a wide variety of social and economic contestation.   How is the government tackling these problems, or what has it done so far?   So far, it has deployed a lot of stopgap measures. It has created jobs for about 200,000 university graduates, which is a step in the right direction but doesn’t solve the problem. It’s created tens of thousands of public work jobs, for which people earn maybe 100 euros a month--another stopgap effort. They’ve also maintained subsidies on certain staples like semolina, pasta, and eggs, and milk, and sugar, oil and gas at about 50 percent of their cost. But none of these are the types of sustainable, durable solutions that will help Tunisia advance economically and deal with the fundamental causes of the Arab Spring.   So what steps can be taken to re-establish some degree of socio-economic stability?   Most Tunisians work in the informal sector, not in the formal sector. So the most important thing will be to move Tunisians from informal sector activities, which are not tax-paying and not formally engaged in the economy, to the formal economy where they will be paying taxes and contributing to the development of the Tunisian state and Tunisian society. So instead of viewing the informal sector as smuggling and contraband, it should be seen as the primary motor of economic growth for Tunisians.   So this means moving Tunisian informal sector workers gradually to the formal sector through supporting entrepreneurial development and the development of small and medium enterprises, including in the services. In addition, there needs to be implementation of new labor standards and support for the unions, who played a major role in the Arab Spring in Tunisia. There also needs to be continuing reform in the justice system and the corruption needs to be addressed. And certainly, there needs to be regional development projects in the more unfavored areas of Tunisia, and political and economic decentralisation.   * See also July audio interview with Sami Ben Gharbia, advocacy director at Global Voices and co-founder of the website Nawaa discussing freedom in Tunisia.   http://www.abc.net.au/news/2012-07-27/interview-sami-ben-gharbia/4160064   Visit Crisis Group for full listing of recent podcasts: http://www.crisisgroup.org/en/multimedia/podcasts.aspx Visit the related web page
	Something rotten at the heart of high finance by Satyajit Das, Naomi Wolf Guardian & agencies   July 2012   Something rotten at the heart of high finance, by Satyajit Das.   Barclays Bank"s admission that they "fixed" money markets rates and JP Morgan"s admission that so called hedges were "incorrect" are merely symptoms of a deeply compromised global financial system.   Significantly, even The Economist, sympathetic to capitalism and finance generally, resorted to the word "banksters". Something is rotten at the heart of global finance.   In his 1933 inauguration address, Franklin Delano Roosevelt attacked the "callow and selfish wrongdoing" in banking and business. Roosevelt told the crowd of over 100,000 that the "rulers of the exchange of mankind"s goods have failed" and that "unscrupulous money changers stand indicted in the court of public opinion".   Some 80 years later, the money changers have not "fled their high seats in the temple of our civilisation". "Ancient truths" have not been restored to that temple. Something corrupt and rotten continues to fester at the heart of high finance, economic life and, indirectly, modern society.   On April 14, 2012, former Goldman Sachs executive director Greg Smith recorded a very public and sensational exit interview in the opinion pages of the New York Times.   The letter criticised "toxic and destructive" practices and cultures within Goldman Sachs, one of the world"s largest and most important and influential investment banks.   The criticism focused on practices that exploited clients and put the interests of the bank first. It alleged a culture that was focused on getting clients to invest in securities or products that Goldman was interested in getting rid of.   The letter highlighted the use of complexity to confuse clients and the focus on highly profitable and (sometimes) unsophisticated clients who did not fully understand the risks of the transactions that they were being encouraged to enter into.   The most-noteworthy farewell speech since the film Jerry Maguire has been parsed as an expose of the alleged practices of his former employer. It is more subtle, highlighting a deeply flawed financial system as well as the poisonous and brutal culture of modern financial institutions.   * Satyajit Das is author of Traders, Guns & Money.   July 2012   Global Financial Fraud and Its Gatekeepers, by Naomi Wolf. (Guardian News)   Last fall, I argued that the violent reaction to Occupy and other protests around the world had to do with the elites fear of the rank and file exposing massive fraud if they ever managed get their hands on the books. At that time, I had no evidence of this motivation beyond the fact that financial system reform and increased transparency were at the top of many protesters list of demands.   But this week presents a sick-making trove of new data that abundantly fills in this hypothesis and confirms this picture. The notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers, but this weeks headlines make such a conclusion, sadly, inevitable.   The New York Times business section on 12 July shows multiple exposes of systemic fraud throughout banks: banks colluding with other banks in manipulation of interest rates, regulators aware of systemic fraud, and key government officials (at least one banker who became the most key government official) aware of it and colluding as well. Fraud in banks has been understood conventionally and, I would say, messaged as a glitch. As in London Mayor Boris Johnson"s full-throated defense of Barclay"s leadership last week, bank fraud is portrayed as a case, when it surfaces, of a few "bad apples" gone astray.   In the New York Times business section, we read that the HSBC banking group is being fined up to $1bn, for not preventing money-laundering (a highly profitable activity not to prevent) between 2004 and 2010 – a six years long "oops". In another article that day, Republican Senator Charles Grassley says of the financial group Peregrine capital: "This is a company that is on top of things." The article goes onto explain that at Peregrine Financial, "regulators discovered about $215m in customer money was missing." Its founder now faces criminal charges. Later, the article mentions that this revelation comes a few months after MF Global "lost" more than $1bn in clients money.   What is weird is how these reports so consistently describe the activity that led to all this vanishing cash as simple bumbling: "regulators missed the red flag for years." They note that a Peregrine client alerted the firm"s primary regulator in 2004 and another raised issues with the regulator five years later – yet "signs of trouble seemingly missed for years", muses the Times headline.   A page later, "Wells Fargo will Settle Mortgage Bias Charges" as that bank agrees to pay $175m in fines resulting from its having – again, very lucratively – charged African-American and Hispanic mortgagees costlier rates on their subprime mortgages than their counterparts who were white and had the same credit scores. Remember, this was a time when "Wall Street firms developed a huge demand for subprime loans that they purchased and bundled into securities for investors, creating financial incentives for lenders to make such loans."   So, Wells Fargo was profiting from overcharging minority clients and profiting from products based on the higher-than-average bad loan rate expected. The piece discreetly ends mentioning that a Bank of America lawsuit of $335m and a Sun Trust mortgage settlement of $21m for having engaged is similar kinds of discrimination.   Are all these examples of oversight failure and banking fraud just big ol mistakes? Are the regulators simply distracted?   The top headline of the day"s news sums up why it is not that simple: "Geithner Tried to Curb Bank"s Rate Rigging in 2008". The story reports that when Timothy Geithner, at the time he ran the Federal Reserve Bank of New York, learned of "problems" with how interest rates were fixed in London, the financial center at the heart of the Libor Barclays scandal. He let "top British authorities" know of the issues and wrote an email to his counterparts suggesting reforms. Were his actions ethical, or prudent? A possible interpretation of Geithner"s action is that he was "covering his ass", without serious expectation of effecting reform of what he knew to be systemic abuse.   And what, in fact, happened? Barclays kept reporting false rates, seeking to boost its profit. Last month, the bank agreed to pay $450m to US and UK authorities for manipulating the Libor and other key benchmarks, upon which great swaths of the economy depended. This manipulation is alleged in numerous lawsuits to have defrauded thousands of bank clients. So Geithner"s "warnings came too late, and his efforts did not stop the illegal activity".   It is very hard, looking at the elaborate edifices of fraud that are emerging across the financial system, to ignore the possibility that this kind of silence – "the willingness to not rock the boat" – is simply rewarded by promotion to ever higher positions, ever greater authority. If you learn that rate-rigging and regulatory failures are systemic, but stay quiet, well, perhaps you have shown that you are genuinely reliable and deserve membership of the club.   The mainstream media need to drop their narratives of "Gosh, another oversight". The financial sector"s corruption must be recognized as systemic.   Meanwhile, Britain is sleepwalking in a march toward total email surveillance, even as the US brings forward new proposals to punish whistleblowers by extending the Espionage Act. In an electronic world, evidence of these crimes lasts forever – if people get their hands on the books. In the Libor case, notably, a major crime has not been greeted by much demand at the top for criminal prosecutions. That asymmetry is one of the insurance policies of power. Another is to crack down on citizens protest.   July 2012   Criminal probe widens in Libor’s wake, by Karen Maley.   As criminal probes into the Libor rate-rigging scandal multiply, bankers are becoming increasingly worried that they might finally be held to account for their role in the global financial crisis.   Their fears were fuelled by a weekend report in The New York Times that the US Justice Department is preparing to launch criminal action against several big global banks and their employees. According to the report, the Justice Department has identified potential criminal wrongdoing by major banks and individuals at the centre of the Libor rate-rigging scandal. Its criminal division is now building cases against several financial institutions and their employees, including traders at UK bank Barclays.   Charges against at least one bank are likely to be filed later this year, unnamed government officials told the newspaper.   Earlier this month the UK Serious Fraud Office said that it also would be opening a criminal probe into the attempted rigging of Libor—the London Interbank Offered Rate. Libor, which is used as a benchmark for an estimated US$360 trillion of consumer and business loans and other financial securities, is based on estimates submitted by a group of banks on their borrowing costs. During the financial crisis, Libor was widely seen as a thermometer, with a high reading indicating that the banks were gripped by fever. Banks were desperate to report lower rates because they wanted to appear in better health than they were.   Senior UK politicians, including the Chancellor of the Exchequer and opposition Labour leader Ed Miliband, have demanded a criminal probe after Britain’s second largest bank, Barclays, admitted rigging Libor and its euro equivalent, Euribor. The bank paid a fine of £290 million (US$450 million) and both the bank’s chief executive, Bob Diamond, and its chairman, Marcus Agius, fell on their swords.   The prospect of criminal action will rattle bankers who have already resigned themselves to paying tens of billions of dollars to settle civil lawsuits from regulators, and unhappy investors such as pension funds, which suffered losses as a result of the Libor manipulation.   Morgan Stanley analysts have calculated that the 12 global banks publically linked to the Libor scandal will ultimately pay up to $22 billion in fines and damages to investors. But the figure could be even higher, as the $22 billion does not include potential penalties imposed by the European Union as a result of its own investigation into whether banks colluded in setting the British Libor rate, the European Euribor rate and the Tokyo Tibor rate.   Last week, European Competition Commissioner Joaquin Almunia warned that these “investigations are at the top of our priorities because this type of collusion seriously threatens competition throughout the entire world and particularly on our continent”.   But for bankers the prospect of criminal proceedings—which could see them serving jail terms if they are found guilty—is far more worrying. Bankers are aware that there is immense public anger that they were not held to account for their role in the global financial crisis.   Bankers aren’t the only ones under attack. In London and Washington, politicians are also having a close look at why regulators turned a blind eye as the banks set about manipulating Libor.   * This most recent revelation follows the sub-prime debacle that undermined much of the global financial system. Indeed, many current employees of the Credit Ratings agencies downgrading countries have professional banking backgrounds, as do those designing the "required" austerity programs reducing public sector services impacting many poor and working people. Visit the related web page
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