Spy Trade by Grant Smith - GET THIS BOOK!

slightly cut off, sorry!

http://wtcdemolition.com/spytrade.pdf

FEC began to reluctantly investigate the charges, but found AlPAC unwilling to cooperate or release documents. Amid minimal press coverage, the FEC delivered a "final" investigatory report on Friday, December 22, 1990. It indicated that the PACs named in the complaint were no longer under investigation, but that some of the allegations against AlPAC itself were still being studied.

The complainants were not satisfied with the FEC response. There was no investigatory documentation in the FECs initial release or any findings or proposed enforcement actions against AlPAC There was also no indication of whether or not the investigation had been stymied by AIPACs outright refusal to comply with the FECs requests for internal financial records. Time passed, and subsequent findings by the FEC proved less than adequate to the complainants. The FEC then issued a written finding that AIPAC had made "in-kind donations" that "likely crossed the $1,000 threshold"-the highest amount an individual or organization could then donate to a candidate seeking office in a single election. AlPAC therefore functioned as a "political committee" from the FEC perspective. In spite of the violation, the FEC ruled that it would not require AIPAC to register as a political action committee or disclose its donors and recipients, because organizing these types of campaign contributions was not "the major purpose of AlPAC"

Unsatisfied and angered, the original seven complainants filed a lawsuit in the Washington, DC Federal District Court against FEC They then went on to file a third appeal alleging that the FEC acted in bad faith by dismissing the January 1989 complaint against AlPAC, and that this faulty interpretation of the rules was not cause for exempting AIPAC from disclosing all details of its donors, donations, and expenditures.

The battle raged into 1995. In March, the DC Circuit Court of Appeals found two to one against the complainants. They then sought a hearing before the entire appeals court, and on May 8, 1996 eight justices ruled for the complainants and against the FEC with two dissenting. The ruling identified a dangerous "slippery slope." Exempting a large and powerful organization like AIPAC from rules governing political activities on the grounds that they weren't the organization's "major purpose" would facilitate abuse, as other corporations began to conduct large-scale political activities and candidate efforts with none of the required FEC oversight and compliance measures.

In 1998, AIPAC appealed the Court of Appeals decision to the Supreme Court. On June 1998, the Supreme Court decided that, in spite of AIPAC challenges, the complainants did have "standing" to demand a resolution in court. However, the Supreme Court refused to rule on the substance of the issue.

The U.S. Supreme Court sent the case back down to the original U.s. District Court. The surviving complainants (one has since passed away) continue to insist that whether or not AIPAC is a membership organization, as it claims, or has other functions (which the FEC verified), it is also a political committee required to disclose detailed donor and expenditure information to the public. Yet by mid-2009, none of the core issues of the case had been resolved. Presiding Judge Richard J. Leon held a status hearing and ordered a "fast track" schedule of cross briefs that could allow the court to make a final ruling by 2010. Plaintiffs have filed a draft motion for Judge Leon that would force AIPAC to disclose donors, funds, and activities influencing U.S. political campaigns (see appendix).

But delaying the premier campaign finance case against the largest foreign interest lobby in the U.S. for two decades had already produced a clear victor. Stealth PACs and donation coordination maintained Israel's status as the top recipient of u.s. foreign aid and other taxpayer-funded aid. Israel has received $104 billion from Congress since 1948.

[TABLE]

This statistic does not represent the total cost of Israel to the United States. According to the late Dr. Thomas Stauffer, who wrote and taught about the economics of energy and the Middle East both at Harvard University and Georgetown University's School of Foreign Service, the real cost is higher. Stauffer's opportunity-cost-based calculations capture "an estimate of the total cost to the U.S. alone of instability and conflict in the region-which emanates from the core Israeli-Palestinian conflict." This analysis was first presented at an October 2002 conference sponsored by the U.s. Army College and the University of Maine. "Total identifiable costs come to almost $3 trillion...About 60 percent, well over half of those costs-about $1.7 trillion-arose from the U.S. defense of Israel, where most of that amount has been incurred since 1973." Yet again, even this figure excludes the vast and generally unexplored loss the U.S. has been slowly accruing since the 1940s due to economic espionage, including losses from a severely compromised trade deal, perpetrated by Israel and its U.S. lobby.

Even if Judge Leon rules that AIPAC is a kind of "super PAC" subject to campaign laws, it may not have any material impact. In 2009, the Supreme Court made a sudden (and unusual) move to re-hear a case over whether corporations have a protected free speech right to directly engage in campaign-related activities. The case could render moot the two-decade-old drive to regulate AIPAC by rescinding the 1972 Federal Election Campaign Act (FECA) restrictions on corporate activities in political campaigns. [of course we now know that this is exactly what happened--does anyone recall anyone bringing up this point about AIPAC when it happened? I don't... -gReT]

In retrospect, AIPAC continues to operate much like its parent organization, the AZC. It coordinates closely with the Israeli government to lobby on matters of critical importance, such as preferential trade matters. According to AlPACs bylaws, the remaining Zionist organizations that were once under the AZC's umbrella group are all incorporated into AIPACs executive committee through standing corporate invitations and preferential membership status. Over 50 established and newer organizations such as American Friends of Likud and Friends of the Israel Defense Forces are also now included (see appendix).

AIPACs bylaws are, at their core, denials of activities in which the Israel lobby routinely engaged, such as "[AIPACj shall receive neither funding nor direction from the State of Israel. ..AIPAC is not a political action committee ("PAC")...it does not solicit funds for or contribute funds to political candidates or to political parties." Though most of these assertions are easily debunked by history, AlPAC is uniquely isolated from regulation and oversight.

Conclusion

Operating on the principle that it is exempt from the Foreign Agent Registration Act and 1972 Federal Election Campaign Act has paid off handsomely for AIPAC. The assumption that U.S. laws should accommodate the lobby's activities, rather than the reverse, was most eloquently expressed by the Jewish Agency's Maurice Boukstein during his testimony before Senator J.W. Fulbright. Foreign agent registration was fine for disclosing the activities of Soviet-backed communists or German spokesmen for the Reich, he stated, but it did not, in his view, apply to Israel lobbying closely coordinated with Jerusalem. The AZC was explicit that Zionism was being existentially challenged by Kennedy administration policies. In the end, it was the Kennedy administration that was brought down, by a series of assassinations. This crisis allowed the AZC to regroup while a more favorable administration took power.

The Israel lobby's continuous challenges to governance, though largely invisible to the American public, have slowly eroded the rule of law in the United States. Stealth PAC coordination has delivered the U.S. Congress into the de facto control of a foreign interest, rendering two decades of legal recourse sought by concerned Americans moot. The Israel lobby's Successful challenges to the rule of law enabled massive and unprecedented wealth transfers from U.s. taxpayers to Israel and an unprecedented power grab in Washington. When any key component of the lobby (such as the AZC or the Jewish Agency American Section) was seriously challenged by law enforcement, it simply folded, evolved, and reemerged within new shell corporations with its values and intent fully intact.

Overthrows of 1979 and the Kenya Group

The Haganah relied heavily on Nicaragua's Anastasio Somoza Garcia beginning in 1939. Somoza transshipped arms from the United States to Jewish fighters in Palestine, and in 1948, even issued Nicaraguan passports for Haganah agents.(49) Somoza's early support for Israel came in exchange for kickbacks. His family dynasty's hold on power guaranteed future business dealings as the regime became an asset to Israel. Nicaragua's strategic location on the isthmus of Central America had also long captivated U.S. interests, much to the dismay of locals, for more than a century.

Tennessee native William Walker led a band of mercenaries to Nicaragua on a mission to secure U.S. business interests in 1855. The Franklin Pierce administration even recognized Walker's sovereignty when he declared himself president of Nicaragua in 1856, but he was quickly displaced by competing American interests. Walker double-crossed the powerful magnate Cornelius Vanderbilt, who financed and dispatched a rebel force to depose Walker. He fled on a U.S. Navy warship, but later made three more attempts to seize power. The last ended in failure when his Honduran-based invasion was thwarted by the British, and Walker was unceremoniously handed over to Honduran authorities for execution.

U.S. Marines landed in Nicaragua to protect U.S. property and business interests from social turbulence in 1894, 1896, 1898, and 1899. Nationalist Jose Santos Zelaya aggravated both the U.S. government and Wall Street investors which backed opposition candidates in 1909. When U.S. citizens laying mines in the San Juan River were executed by Zelaya's troops, it provided a convenient pretext for U.S. intervention and installation of more compliant government.

As commodity production increased under U.S. and European foreign investments, the U.S. took over Nicaragua's customs collection and the national railroad, and even hand-picked functionaries of the government in order to guarantee prompt loan payments. Local resentment soon grew into armed opposition. Rebellion was put down by Marines in 1912. Major Smedley Butler reflected frankly in a letter to his wife that the victorious government troops and U.S.-supported rulers won "a victory gained by us for them at the cost of good American lives, all because Brown Brothers, bankers, have Some money invested in this heathenish country."(50)

Butler helped install another U.S.-favored ruler, the only candidate permitted to run in the election, under orders from the Taft administration. The Marines stayed in Nicaragua almost constantly until 1933. Their very presence became self-justifying, since it provoked many uprisings, which then had to be suppressed. Continued social unrest also provided a pretext to create a more effective local military. But the newly chartered Guardia Nacional was unable to face down the greatest threat to the cozy system of c1ientelism yet to emerge: Augusto Sandino.

Augusto Sandino, the son of a well-to-do peasant farmer, returned to Nicaragua in 1926 after a stint working abroad for U.S. corporations. He was determined to forever eject the U.S. presence, but his tiny military forays were outclassed by U.S. Marine air attacks, and he was forced to adopt hit-and-run guerrilla tactics. Sandino's successes against the Guardia Nacional and U.s. Marines prompted a U.S. withdrawal in 1933. Sandino became a martyr to his movement when he agreed to lay down arms and come to terms. He was assassinated by Guardia Nacional members under the command of U.S.appointed commander Anastasio Somoza Garcia.
The U.S.-trained Guardia Nacional repressed dissent and social movements as the Somoza regime's family, foreign investors, and sundry supporters locked down national production. The Somozas personally amassed one of the world's largest family fortunes, estimated at nearly $1 billion. (51) Somoza ruled Nicaragua with an iron fist and absolute authority until 1979. But Sandino's movement lived on through the foundation of the National Liberation Front in the 1960s. They enjoyed little success or popular support until the Somoza regime sowed the seeds of its own destruction by attempting to profit from a devastating natural disaster.

In 1972, a catastrophic earthquake leveled the capital city of Managua. It left 5,000 dead and a quarter-million homeless. The ruling Somoza family members misappropriated foreign and humanitarian aid and little of it ever reached victims of the quake. As popular backlash grew, the Guardia Nacional attempted to maintain control over both the city and the press coverage. It bombed sections of Nicaraguan cities and murdered ABC correspondent Bill Stewart in front of his own cameraman. After that, the Carter administration dropped support for Somoza and his Guardia Nacional, though Israel continued to ship arms to Somoza through nocturnal El Al flights and other means after the Carter ban. Israel provided $250 million or 98 percent of total supplies during the regime's final months. (52) But it wasn't enough. When the Sandinista National Liberation Front took over in 1979, Somoza escaped abroad and Israel lost an important arms export market.

Guardia Nacional officers and the rank and file regrouped in Central American border countries as well as South Florida, soliciting support for retaking Nicaragua. They did not have long to wait. Ronald Reagan entered the presidency in January of 1981 committed to a Cold War strategy designed to challenge and roll back the Soviet Union. The "Reagan Doctrine" required supporting anti-Communist insurgents wherever they might be. Reagan saw the Sandinista acquisition of Russian arms, flows of Sandinista arms and ideology into El Salvador, and warming Soviet ties as unacceptable developments. Six weeks after his inauguration, Reagan approved covert action through a presidential finding -- initially giving the Contras $19 million. By November 1981, CIA Director William Casey was laying down definitive plans for arming and retraining exiles capable of facing the ideologically motivated Sandinistas. Israel became a constant shadow of U.S. military efforts in Nicaragua and other key Latin American countries, even as it lost other lucrative markets for its military equipment and services.

As they had in Nicaragua, foreign interventions also played a motivating role in the 1979 Islamic Revolution in Iran. In the 1950s, American and British intelligence agencies became concerned when Dr. Mohammad Mossadegh was named Prime Minister of Iran. Mossadegh was committed to reestablishing democracy and nationalizing the Iranian petroleum industry, effectively removing it from British control. Although the U.S. had no direct stake in Iranian oil, Cold War calculations drove it into action. Fearing Soviet-backed intrigues toward Iran, the U.S. supported British removal of Mossadegh in a secret intervention code named "Operation Ajax."(53)

Subsequent coup attempts resulted in the installation of the U.S.-backed Iranian monarch Shah Mohammed Reza Pahlavi. The U.S. saw economic and military aid to Iran as means of securing a loyal anti-Communist friend that would not challenge Western oil interest in the region while acting as a buffer between the Persian Gulf and the U.S.S.R. But the repressive and brutal tactics of the SAVAK -- the Shah's internal security force, which the CIA helped create in 1957 -- generated popular opposition and outrage similar to Somoza's Guardia Nacional. Savak's unit responsible for torture was trained by Israel in the dark arts of repression. (54) Yaakov Nimrodi, a longtime intelligence and military operative and arms merchant, was posted to Tehran in 1955 for 13 years. According to Nimrodi, "When one day we shall be permitted to talk about all that we have done in Iran, you will be horrified ...It is beyond your imagination."(55)

The groundswell to overthrow the Shah started with 1977 strikes and marches by Shiite followers of Ayatollah Khomeini. When President Jimmy Carter grudgingly allowed the fleeing Shah into the U.S. for medical treatment in October of 1979, it triggered waves of immense anger across Iran's revolutionary movement. The Iranian revolutionary government, cognizant of covert U.S. support for the overthrow of Mossadegh, demanded that the U.S. extradite the Shah to stand trial in Tehran. The U.S. refused.

The resultant storming of the U.S. Embassy in Tehran, during which Iranian took U.S. diplomats and military and intelligence personnel hostage, [came to] symbolize the impotence of the Carter administration. Futile attempts at negotiating their release, along with an abortive military rescue attempt, plagued [the President] until left office. The dilemma of American hostages was a motivating factor in Reagan's later covert dealings with Iran. The 1979 Soviet invasion of Afghanistan and Iraq's invasion of Iran in 1980 presented strategic challenges to U.S. policymakers: should they undermine the regime in Tehran or attempt a diplomatic opening as a buttress against Soviet expansion? Israel was eager to provide input and recover its market.

In addition to the tumult in Nicaragua and Iran, 1979 was also a year of economic chaos for Israel. President Jimmy Carter's intensive hands-on efforts led to the March 26 peace treaty between Egypt and Israel. The termination of war led to the withdrawal of Israeli troops from the Sinai Peninsula, and the peace treaty mandated the two parties enter into negotiations toward trade and other mutually beneficial economic relations.
Boosting the economy was a prime concern to the Israeli government. Between 1948 and 1972, the Israeli gross national product (GNP) had increased 10 percent annually, but it slowed to 2 percent following sharp increases in military spending and soaring energy imports. Israel's imports constantly outpaced exports, creating chronic current account deficits, and its trade deficit, around 20 percent of GNP in the 1960s, ballooned to 35 percent in 1973.(56)
Israeli military spending reached the incredible ratio of 25 percent of GNP between 1970 and 1982. The lion's share of import spending was concentrated in military merchandise (17 percent of GNP), though a quarter of the cost was paid by U.s. foreign aid. Returning Sinai's oil fields to Egypt created $12 billion in losses to the Israeli economy between 1973 and 1982. Government outlays for social welfare programs in the 1970s for housing, education, and support to the urban poor came at the worst possible time for the economy -- after it had already begun to stagnate.

The Islamic Revolution presented a deep threat to Israeli economic interests -- in particular, access to a friendly supplier of petroleum -- which had been guaranteed under the Shah's police state. Israeli exports to Iran had boomed from $33 million in 1973 to $225 million in 1978-7 percent of Israel's total. Leading Israeli corporations had profitable business dealings with the Iranian government in supply and construction contracts. Close relations, formalized in 1958 through a trilateral liaison established by the Israeli Mossad, in cooperation with the Turkish National Security Service (TNSS) and Iran's National Organization for Intelligence and Security (SAVAK), enabled ongoing intelligence exchanges and semiannual meetings by the chiefs of service. (57) Israel even signed a contract to build nuclear-capable missiles -- Project Flower --for the Shah. In 1977, Israeli Defense Minister Shimon Peres signed a secret agreement for advanced development of an Israeli missile design that had been underway since the 1950s. This "turn-key" package included a special airport, a missile assembly plant, and a long-range test site in exchange for $1 billion in Iranian oil deliveries. Israel attempted to interest Iran in Israel's U.S.-funded Lavi (viii) jet fighter project,(58) but the Iranian Revolution swept away all such aspirations while devastating the Israel economy. Yaakov Nimrodi claimed he personally lost $6 million to the revolution.(59) The September 1980 Iraqi invasion of Iran provided an opening to restore Israel's economic role and influence in Iran through arms sales.(60)

Lebanon, as refuge to more than 100,000 Palestinian refugees expelled from their lands and homes with the creation of Israel in 1948, presented another challenge. The Palestine Liberation Organization (PLO) grew in power as refugees concentrated in Southern Lebanon expanded to 300,000 by 1975. Ongoing border raids and violence between the PLO and Israel began in 1968. In 1978, Israel invaded Lebanon up the Litani River and pushed the PLO forces north. The creation of the UN peacekeeping force [UNIFIL] (United Nations Interim Force in Lebanon) led to a partial Israeli withdrawal.

After the 1979 peace treaty with Egypt, Israel's Likud government committed to a more aggressive policy against the PLO in Lebanon. On July 10, 1981, violence erupted between South Lebanon and Northern Israel. Israeli Air Force attacks on PLO buildings and more powerful tanks and artillery were partially neutralized by the PLO's dispersed munitions stockpiles and small mobile guerilla units. The renewal of costly conflict and spiraling military outlays meant securing ever higher levels of American aid and support for the economy. Palestinian weapons captured by Israel soon found their way to Central America via Israel as it maneuvered to broker sales of its own stockpiles of U.S.-provided weapons to Iran.

This segment of the Iran-Contra scandal at one time threatened to bring down the entire Reagan administration. President Reagan was as viscerally committed to ensuring that American hostages held in Beirut would not define his presidency as he was to supporting the Contras as a means for rolling back the spread of Soviet expansionism. President Reagan's national security staff engineered covert privately financed support for the Contras by tapping contributions from international donors such as Saudi Arabia and the arms cache captured by Israel.
Historian Sean Wilentz places ultimate responsibility for the scandal firmly on the back of President Reagan. "They stemmed directly from the administration's pursuit of the so-called Reagan Doctrine in Central America and the Middle East and thus went to the heart of what the president had proclaimed as the central mission of his second term -- to challenge the Soviet Union's military expansion on all fronts. Reagan's determination to sustain that mission led him to proceed covertly and in flagrant violation of the expressed will of Congress. Exceeding the secret operations of earlier administrations, a cabal of well-placed officials inside the White House, with the help of the president, perverted the constitutional rule of law. Their exploits were hair-brained and counterproductive as well as illegal. Once exposed, they led to a serious constitutional confrontation." (61)

But the mechanics of the fumbling U.S. approach to the Iranians, sold on the dubious prospect of freeing American hostages held in Lebanon without condemning other Americans to kidnapping, was solidified in "for profit" Israeli arms deals. Three separate covert actions became one as proceeds from sales to Iran were diverted to fund the Contras in Nicaragua in violation of Boland amendments, even as Israel sought favor on Capitol Hill for enhanced access to the U.S. market. Israel's Iran-Contra role suffered serious blows due to sheer incompetence and the Reagan administration's discovery of Israeli spy Jonathan Pollard in November of 1985. The Iran-Contra and Pollard scandals effectively overshadowed a third and equally embarrassing affair --Israeli economic espionage coordinated with AIPAC against U.S. industry interests.

The central role of Israeli economic and military objectives in Iran-Contra and Jonathan Pollard is not well documented; Israel refused to cooperate with U.S. investigators looking into the Iran-Contra bank accounts and information held by actors such as Yaakov Nimrodi and David Kimche stayed safely offshore and out of reach of official inquiries. The Israeli government's refusal to cooperate with FBI investigations into Israel's penetration of top U.S. trade secrets has never been reported, since the FBI didn't declassify the relevant files until July of 2009.

Two figures deeply involved in the Sonneborn network -- and convicted of violating U.S. arms exports laws -- in hindsight were exceedingly poor candidates for engineering U.S.-Iran policy. Adolph "Al" Schwimmer, the legendary U.s. Army Corps flight engineer whose "Service Airways" funneled purchased, reconditioned, and stolen U.S. arms to Haganah forces fighting in Palestine, clearly had the experience, but not the right motivations.(62) Schwimmer's lifelong friend Herman "Hank" Greenspun, who stole the 35 tons of surplus machine guns from under the watch of U.S. Marines in Hawaii, also knew the arms business. While Schwimmer left the U.S. for Tel Aviv, Greenspun -- formerly a publicist for mobster Benjamin "Bugsy" Siegel's Flamingo Casino -- became publisher of the Las Vegas Sun newspaper.

Many historical accounts of selling U.S. arms to Iran began with Israeli proposals involving Saudi arms dealer Adnan Khashoggi in the mid-1980s; however, an "end of career" interview with Al Schwimmer by the Jewish Daily Forward in 2001 confirms that plans leading to Iran-Contra were already well underway in the late 1970s. This is when Al Greenspun introduced Adnan[...]

(viii) After becoming a billion-dollar exposure for proprietary technology leaks, the Lavi was canceled on August 30,1987. In many ways the Lavi resembled a previous "big dream" -- the aborted attempt to purchase the USS Attu aircraft carrier in Israel's 1948 war -- except that American taxpayers, rather than the Sonneborn network bore the financial loss.