Sign Up for
E-Newsletters!


Get Our Newsletter Manage Your Subscription
Bill Buzenberg interviews former Representative Lee H. Hamilton

The Center in the News . . .

A recent Council on Foreign Relations backgrounder titled U.S-Pakistan Military Cooperation cited the Center's Collateral Damage project, which found among its major findings that Pakistan was the largest recipient of U.S. military aid, receiving almost $5 billion since 9/11, with little in the form of federal oversight and accountability.

The House of Representatives recently amended the Federal Advisory Committee Act (FACA). Among the newly expanded public provisions, White House task forces will be prohibited from operating in secrecy, transcripts or recordings of committee meetings will be electronically available, and advisory committee appointments must be made without regard to political affiliation or activity. The Center's Shadow Government project investigated FACA loopholes and several conflict of interest cases more than a year ago.

The Wall Street Journal featured the Center's latest analysis of the lobby spending by the pharmaceutical industry, health product manufacturers, and their trade groups. The Center found that the pharmaceutical manufacturers and their trade groups spent a record $168 million on federal lobbying last year, a 32 percent increase from 2006.

A new report from the Government Accountability Office (GAO), requested by the House Foreign Affairs Committee, tasked the Defense Department with providing greater oversight in the way it handles Pakistan reimbursement claims for coalition support funds (CSF), a program created after 9/11 to reimburse key U.S. allies in the global war on terror. In May 2007, the Center's Collateral Damage project found that post-9/11 U.S. military aid to Pakistan, totaling more than $5 billion, was subject to virtually no congressional oversight.

Washington Post national politics reporter Shailagh Murray in the paper's daily campaign 2008 blog, 'The Trail,' cited a Center interview with James A. Johnson, who recently resigned from Senator Obama's vice presidential search committee. In the interview, Johnson had "kind words" to say about veteran senator, and potential VP contender, Christopher Dodd.

On Thursday, the Senate Intelligence Committee released its Phase II report on prewar Iraq intelligence. Committee Chairman John D. (Jay) Rockefeller said: "It is my belief that the Bush administration was fixated on Iraq, and used the 9/11 attacks by Al Qaeda as justification for overthrowing Saddam Hussein. To accomplish this, top administration officials made repeated statements that falsely linked Iraq and Al Qaeda as a single threat and insinuated that Iraq played a role in 9/11. Sadly, the Bush administration led the nation into war under false pretenses." To read more about the Bush administration's false statements about the national security threat posed by Saddam Hussein's Iraq, check out the Center's War Card project.

A Morning Call.com editorial cited a 2003 Center survey that ranked all 50 states' lobby disclosure laws. Until 2006, Pennsylvania had no lobbying law at all and was ranked 50th in the nation by the Center's survey. Currently, the legislature will consider a measure that would forbid gifts and entertainment from lobbyists to public officials.

Harry Shearer, actor, entertainer, musician, artist, and creator of the song 935 Lies - featured in his upcoming CD, Songs of the Bushmen - said in The Huffington Post, "Just in case Scott McClellan wasn't keeping count, the Center was: at least 935 falsehoods told by the president and his aides in the run-up to the [Iraq] war."

The Sunlight Foundation's SunSpots blog featured the "eye-popping reports" from the Center's Shadow Government project. The Center's Shadow Government project investigated a few federal advisory committees, part of a vast maze of committees, tasked with influencing federal government agencies on a variety of safety and policy issues, often done under secretive conditions with little public accountability.

Douglas Feith, President Bush's undersecretary of defense for policy from July 2001 to August 2005, was on The Daily Show with Jon Stewart May 12 and talked about the Iraq War. He said, "I think a lot of what the administration said was correct." The Center's Iraq War Card project, which documented 935 false statements made by Bush and six top administration officials in the two years following September 11, 2001, about the national security threat posed by Saddam Hussein's Iraq, would prove otherwise.

Watch the world premier video of Harry Shearer's video "935 Lies." Shearer, best known for his work on The Simpsons, This is Spinal Tap, Le Show, Saturday Night Live, For Your Consideration and A Mighty Wind, unveiled a video satire based on the Center's Iraq War Card project, which documented the 935 false statements orchestrated by top Bush Administration officials in the two years following September 11, 2001, about the national security threat posed by Saddam Hussein's Iraq.

The Sarasota Herald-Tribune's Kirsten Mitchell reported that Sen. Pete Domenici and 16 other Republican senators, who support the easing of offshore drilling restrictions on the Outer Continental Shelf for oil and gas, have received more than $3 million in campaign contributions from individuals and PACS affiliated with the oil and gas industry since Jan. 1, 2007.

The Washington Post's Matthew Mosk reported that Steven A. Betts, a top presidential campaign fundraiser for Sen. John McCain, was one of several Arizona developers who benefited from McCain-engineered land swaps.

TheStreet.com's John Stout cited the Center's Buying of the President 2008 chapter on Stealth Campaigns in "How Much Does It Cost to Buy a Presidency?" Political non-profit groups, such as MoveOn.org and the American Leadership Project, "will probably play an important role in this presidential election," he said.

ICIJ Member Works
Clarke company faces new smuggling claims

By Duncan Campbell and Kevin Maguire

LONDON, August 22, 2001 — This article and accompanying stories originally were published in the Aug. 22, 2001, issue of The Guardian newspaper in London and are reproduced here with permission.

Kenneth Clarke, currently embroiled in an increasingly acrimonious bid for the Tory leadership, today faces a major embarrassment through his boardroom connection with the cigarette manufacturer British American Tobacco.

New evidence from a whistleblower suggests that, during Mr Clarke's tenure as deputy chairman, the controversial firm has been using a Swiss subsidiary and bank account secretly to control a worldwide smuggling network.

The whistleblower is a former director of the firm's offshore agents in the Caribbean. He says: "BAT ran the whole show" and has handed over a sheaf of documents backing his claim.

But Mr Clarke maintains that he did not know what was going on. He has previously publicly defended BAT's integrity to MPs. But he now says he did not at the time in fact have "any detailed knowledge of the day to day activities" of BAT's Swiss operation.

Because of the high tobacco duties levied by most governments, there is a big market in smuggled cigarettes on which no taxes have been paid and which can be sold cheaply under the counter. Firms like BAT can make large profits and expand their sales if cigarettes that they manufacture and export duty free are purchased by smugglers.

BAT insiders estimate that up to a third of BAT's 1bn annual profits in recent years, have been the fruits of cigarette smuggling, not only in Latin America, but mainly in China, as well as Africa and Asia, and such markets as Vietnam, where Kenneth Clarke returned from a recent BAT trip seeking official entry to the Vietnamese market.

The new evidence has been obtained by the International Consortium of International Journalists (ICIJ), a US-based group of investigative journalists, linked to the non-profit Centre for Public Integrity in Washington, who have published a series of exposures accusing BAT of black marketeering.

Mr Clarke responded to those allegations last year with an ambiguous admission that BAT does not actually seek to prevent smuggling. He said the cigarette firm faces a dilemma because it wants to keep up with its rivals. He wrote in the Guardian: "We act, completely within the law, on the basis that our brands will be available... in the smuggled as well as the legitimate market."

But the latest material shows the company going much further. The documents may be a "smoking gun" because they suggest BAT not merely colluded with smugglers in the past, but is centrally organising the process and collecting hundreds of millions of pounds worth of black market proceeds. This raises the possibility of criminal proceedings against some BAT executives, while laying Mr Clarke open to charges not only of foolishly lending his name to a misbehaving company, but of misleading the Commons.

Mr Clarke, who became 100,000-a-year deputy chairman in 1998, assured parliament's all-party health committee in February 2000 that as a member of the BAT board audit committee he had investigated the allegations. He said: "I ... seek to ensure that the company follows the highest standards of probity".

The Guardian asked him last week whether he had in fact been aware of his Swiss subsidiary's activities. He replied: "As a non-executive director of the parent company, I do not... have any detailed knowledge of the day to day activities of the company."

When we put the information to him yesterday, while he was out campaigning, he said: "I know nothing of the detail of the allegations... At the present time I am in no position to investigate them myself." BAT would reply, he said.

The newly disclosed files show billions of cigarettes being shipped into Latin America in circuitous BAT transactions involving Swiss banks and Caribbean hideaways.

They were legally shipped, without any tobacco tax being paid on them, to BAT's agents in the tiny Dutch-speaking island of Aruba, a few miles off the coast of Venezuela. From there, the cases of cigarettes were transhipped to the mainland and smuggled by middlemen into Venezuela and neighbouring Colombia, to be sold cut-price in the streets.

For much of the 1990s the proceeds appear to have gone back to a BAT company in Woking, Surrey - BAT (UK and Export) Ltd - and payments were made in a branch of the Chase Manhattan Bank in the City of London.

But after the setting up in 1997 of the special Swiss subsidiary, the cash is recorded as returning to BAT via a dollar account at a Credit Suisse branch in Geneva. In 1998, smuggling money from Latin America alone was flowing to Switzerland at a rate of about $200m (120m) a year, according to the documents.

"BAT never stopped smuggling," says the whistleblower, Alex Solagnier, former finance director of Romar Freezone Trading in Aruba, in an interview due to be transmitted on tonight's Channel 4 news.

Solagnier, who lost his job at Romar at the end of 1999, maintains he had personal knowledge of contraband trafficking to Colombia and Venezuela. He says he worked with BAT staff who visited the mainland smuggling operations and controlled pricing.

The files suggest the company may have restructured its smuggling arrangements since 1995 to move them out of the reach of lawsuits. The accounts of new Swiss subsidiaries in Geneva and Zug are not made public. Swiss bank accounts also remain out of the jurisdiction of investigators from the Department of Trade and Industry (DTI), sent in by the UK government last October to probe smuggling allegations.

We asked BAT last week whether they had shown DTI investigators their Swiss records. They refused to answer but said they were cooperating fully. The Guardian is handing copies of the whistleblower's files to the DTI.

BAT said in a statement last night: "British American Tobacco does not smuggle and does not condone smuggling. Romar is duly licensed to conduct operations in the freezone of Aruba for a number of duty free products, including liquor and cigarettes. Sales to Romar for resale in the freezone are completely legal."

 

Read the documents:

The allegations against BAT
Document one
Document two
Document three
Document four
Document five
Document six
Document seven

NEXT
(1 of 4)

Email StoryEmail StoryPrint StoryPrint StorySend Us Your CommentsSend Us Your Comments