Civic Initiative and American Politics

This week's newsletter focuses on the retirement of Justice Stevens, Immigration reform, and the recent Nuclear summit. Articles on Kyrgystan, and the upcoming elections in America also.








American Politics:

G.O.P. Weighs Political Price of Court Fight
By PETER BAKER and CARL HULSE

WASHINGTON — The retirement of Justice John Paul Stevens presents a test for Republicans as much as it does for President Obama as they weigh how much they want to wage a high-profile battle over ideological issues in the months before crucial midterm elections.
In the aftermath of the polarized health care debate, some Republican leaders said they were reluctant to give Democrats further ammunition to portray them as knee-jerk obstructionists. But they also want to harness the populist anger at Mr. Obama’s policies and are wary of alienating their base when they need it most.
As they balance these competing imperatives, Republicans said they planned to move deliberately at first and avoid declarations that could box them in. With Democrats’ poll numbers down, Republicans said they did not necessarily want a fight for the sake of a fight, and they left open the possibility that Mr. Obama might pick someone they could largely support.
“We need to do our due diligence, and we need to probably bend over backwards both in appearance and in reality to give the nominee a fair process,” said Senator John Cornyn of Texas, a member of the Judiciary Committee and chairman of the National Republican Senatorial Committee.
Likewise, some conservatives who led the fight against Justice Sonia Sotomayor’s confirmation last year said they should learn from mistakes made then, like making grand claims about raising vast sums of money only to find that Republican senators were not as committed to an all-out battle.
“We will all be laughed at — including laughed at by Republican senators — by raising the war cries too loud and too early, when in fact the senators will not deliver what we are promising,” said Manuel Miranda of the Third Branch Network, who organizes regular conference calls of like-minded conservatives about judicial nominations. Instead, he said, conservatives should take a more “modest” and “measured” approach at first.
Mr. Obama appears to be leaning toward choices intended to avoid provoking Republicans. Still, any Supreme Court vacancy energizes the most committed advocates on both sides, particularly over issues like abortion, guns and religion.
The Family Research Council, a leading conservative group, sent an alert to members on Friday and will ask supporters to begin contacting senators. “If he selects someone with a radical judicial philosophy, the fabric of our already divided country will be torn even more,” Tony Perkins, the group’s president, said in an interview.
Ilya Shapiro, a constitutional scholar at the libertarian Cato Institute, said the new health care law would play into the debate, especially given legal challenges to the program.
Even if Republicans cannot stop an Obama nominee, the fight could shape the fall campaign. “I think Republicans are going to try to take advantage of the Tea Partiers’ anger at what is a populist view of a government that is out of control,” Mr. Shapiro said. “They will try to make this a debate whoever the nominee is — not in the sense of trying to derail the nominee, but just to showcase the issues and to make the case that this is why you need to elect Republicans in the fall.”
Representative Mike Pence of Indiana, chairman of the House Republican Conference, pointed out that the Supreme Court could eventually “decide whether the federal government has the power to compel Americans to purchase health insurance,” and so, he said, “now is the time to have a thorough debate over the course and direction of the court.”
Republicans said they saw little prospect of a filibuster unless they could make the case that the nominee was far out of the mainstream. A filibuster would be hard to justify, they said, after Republicans assailed Democrats for blocking votes on President George W. Bush’s judicial nominees.
But they noted that Mr. Obama voted as a senator to filibuster Mr. Bush’s nomination of Samuel A. Alito Jr., so they could rationalize one if necessary. “In truly extraordinary cases, I reserve the prerogative to vote no on confirmation or even to vote to deny an up-or-down vote,” said Senator Lamar Alexander, Republican of Tennessee.
The court vacancy was barely raised on Saturday at the Southern Republican Leadership Conference in New Orleans, where hundreds of party activists met to strategize for the midterm election campaign. The relative silence on the issue underscored the sensitivity as Republicans decided how to respond to the nomination.
“No matter what new liberal the president appoints to take Justice Stevens’ place,” said Gov. Haley Barbour of Mississippi, “I like our chances in the United States Supreme Court that we have a Constitution that requires limited government.” By all accounts, the three front-runners are Solicitor General Elena Kagan and two appeals court judges, Diane P. Wood of Chicago and Merrick B. Garland of Washington. The main choices of liberals are not in the top tier.
Ms. Kagan, considered by some Democrats as the most likely candidate, could be hard for Republicans to block given her lack of a judicial paper trail and her support from conservatives who appreciated her opening the doors to them when she was the dean of Harvard Law School.
Judge Garland, who is well known and well regarded in Washington’s political and legal circles, is widely seen by Republicans and Democrats as the safest choice, most likely to draw overwhelming bipartisan support. Judge Wood, who is less known in Washington, would be the favorite of liberals among the top three and has written decisions on abortion and religion that would generate more fire from the right.
“This nomination, I don’t think they’ll have that hard of a time,” said John D. Podesta, president of the Center for American Progress and an adviser to the White House. “It’ll be hard to hold 41 Republicans against these candidates. They’re pretty solid.”
Senator Charles E. Schumer of New York, a Democratic leader who shepherded Justice Sotomayor through confirmation, said the focus should be finding a nominee who could influence Justice Anthony M. Kennedy, the swing vote on the closely divided nine-member court, rather than selecting a firebrand who writes powerful dissents.
“One of the most important qualities for the new justice is the ability to win over Justice Kennedy,” Mr. Schumer said. In other words, he added, “somebody who’s going to be one of the five and not one of the four.”
But Republicans could accomplish goals short of actually denying Mr. Obama his choice. A confirmation fight could take up valuable Senate time and complicate the rest of Mr. Obama’s legislative agenda. A top Republican lawmaker said it might give Republicans leverage to negotiate a compromise over regulation of financial markets, so Democrats could clear the decks to take up the nomination this summer.
A confirmation fight on social issues like same-sex marriage or judicial activism could also create political problems for Democrats running in conservative states, like Senators Blanche Lincoln of Arkansas and Michael Bennet of Colorado.
Some conservatives argued that they had already framed Mr. Obama’s choice. “One clear lesson from the Sotomayor process,” said M. Edward Whelan III, president of the Ethics and Public Policy Center, “is the political appeal of the traditional understanding of the judicial role, as Sotomayor tried to sound like a judicial conservative in her confirmation hearing.”


Hispanics skeptical that Obama, Democrats will deliver immigration overhaul
By Sandhya Somashekhar

AURORA, COLO. -- Maria Garcia can rattle off a dozen things that are more important to her than politics. Her sky-high mortgage payments, for instance. The convenience store she owns, which isn't making money. And, at this moment, the chili peppers toasting in the store's kitchen.
"I don't have time to think about politics," she said, rubbing her eyes amid the caustic fumes. "Ten years ago, I was doing good. But right now, when you have all these problems, you feel lazy. You can't do anything. Sometimes, it's better that you have nothing because you just have to make money to eat and to pay rent."
Garcia was among the 61 percent of Hispanic voters in Colorado who turned out in 2008 to vote for Barack Obama. But her political disengagement now hints at the difficulty Democrats face in rallying their core constituencies ahead of the November midterm elections.
Among Hispanics, one concern often voiced is that Obama has not moved quickly on changing immigration law. He campaigned on the issue two years ago, but he and his party appear hesitant to take on such a contentious issue soon after the battle over health-care legislation.
Immigrant advocacy groups have ratcheted up the pressure on lawmakers, saying they risk losing the support of Hispanic voters if they do not establish a way for the 12 million people thought to be in the United States illegally to achieve legal status. They say there could be political consequences in swing states such as Colorado, where Hispanics made up 13 percent of the electorate in 2008.
A measure that would have created a pathway to citizenship for illegal immigrants contributed to the downfall of a 2007 bipartisan effort in Congress to remake the immigration system. But activists argue that disconnected voters such as Garcia might be motivated to go to the polls this year if lawmakers appeared poised to take up the issue again.
Indeed, Garcia perks up when the topic of immigration is raised, saying that from her own experience, she feels a strong kinship with those living and working here without papers.
A block from Garcia's store, East Colfax Avenue echoes other suburban streets where immigrant-owned businesses have flowered: lined with faded strip malls, enlivened by stores selling quinceañera dresses and SpongeBob SquarePants piñatas. There are hints of an underground economy as well: check-cashing stores, pawnshops and street-corner car dealerships that do not check credit.
"The Mexican people here need help," said Juan Luevanos, whose Mexican restaurant, Real de Minas, on this street is named for the Zacatecas mines where his family once worked. He thinks that giving illegal immigrants a path to legalized status would reduce crime and offer a measure of stability to a community in which many people carry fake IDs and cannot dream of buying a home.
An avowed Democrat, he shrugs when asked if he'll stick by his party this fall. He voted for Obama in 2008 but now says: "I'm fifty-fifty on him. He doesn't keep his promises."
The desire among Colorado's Hispanics for immigration-law changes is not limited to Democrats. Republican Diedra Garcia, president of DRG Construction in nearby Lakewood, said offering a path to legalization makes good conservative sense. "I believe [immigrants] are serving a clear economic need," Garcia said. "We need those resources, and without them I shudder to think what would happen to our economy."
That position puts her at odds with her party's most vocal strains, a divide that highlights the potentially toxic nature of the debate for many politicians.
Kelly Standley, a coordinator of one of Colorado's "tea party" groups, also lives in Aurora. The highly motivated tea party movement nationally is pushing candidates to take more-conservative stands on a variety of issues, including immigration, and opposes anything that resembles amnesty. Standley says the community has been overrun with illegal immigrants; as evidence, he points to what he sees in his job as a manager at a Family Dollar store.
"If they're paying by credit card, I ask for an ID. Then they hand me a Mexico ID, and I say, 'Oh no, no, no,' " Standley said. He is also bothered by some of his customers' desire to speak to him in Spanish. "I can speak it; I just don't like to," he said.
The economy is paramount for Maria Garcia. Once prosperous, she bought two homes and the commercial building where she recently opened Florence Mini Mart.
But the mortgages on the homes are now larger than the houses' value. In hopes of affording the monthly payments, she rented out the homes and moved into an office in the largely vacant commercial building. Her daughters moved in with their father, unwilling to live in the empty office, she said. Her savings are drained, and she is contemplating foreclosure.
Garcia said she thinks that new immigration laws would bring prosperity to the community by allowing many more people to buy homes and would reward those who have lived and worked in the shadows.
"Some people have been here a very long time, paying taxes," she said.
About Obama, she said: "Maybe he will do something, because he's getting a lot of pressure. But I don't know. I can't worry about it right now."


Republicans focus efforts on November, say 2012 can wait
By Dan Balz

The Southern Republican Leadership Conference has become known in recent years as an early testing ground for would-be presidential candidates, a place to make an impression on party activists and the media. But there is a far different message coming out of New Orleans this weekend: 2012 can wait.
A host of potential candidates trooped through the ballroom of the Hilton Hotel during the three-day gathering -- Sarah Palin being the most prominent, although not necessarily the best received -- but the gathering had none of the feel of four years ago in Memphis.
In 2006, buffeted by growing dissatisfaction with President George W. Bush and heading toward midterm elections in which they ultimately lost control of the House and Senate, Republicans were eager to jump ahead to 2008. Every major potential candidate made an appearance, and all the hallway conversations revolved around a nomination battle far off into the future.
This year, the roughly 3,000 activists from across the South have their eyes on 2010, as do the politicians who may seek the nomination in two years. With President Obama and the Democrats weakened, the energy and enthusiasm on display throughout the weekend reflect optimism among Republicans that, after drubbings in 2006 and 2008, a genuine turnaround may be on the horizon -- if they don't get distracted or divided.
Mississippi Gov. Haley Barbour, a young party staff member in his home state when the SRLC was born 40 years ago, delivered that message at a breakfast for Southern GOP chairmen and members of the Republican National Committee that was hosted by the Republican Governors Association.
Quoting Fred Smith, the founder and chairman of FedEx, Barbour told the group: "The main thing is to keep the main thing the main thing. The main thing is winning in 2010. . . . Then we'll worry about 2012."
Like many conference speakers this weekend, Barbour could have his eye on a presidential campaign in two years. But he asked the organizers of the presidential straw poll not to put his name on the ballot. "I'm trying to practice what I preach," he said. "I didn't think we ought to have a [straw poll] ballot."
Barbour understands how meaningless such early straw polls are -- the winner in 2006 was then-Sen. Bill Frist of Tennessee, who eventually decided not even to run for president. Barbour also understands how embarrassing it can be to perform badly, especially in your home region.
As a former national party chairman at the time of the GOP's 1994 victory, Barbour knows that the best thing he can do as a prospective candidate is to help Republicans maximize the party's gains in 2010. He is taking every opportunity to do so.
Barbour, the chairman of the GOP governors group, is moving deftly to fill the vacuum left by RNC Chairman Michael Steele, who is under fire and on the defensive after a series of gaffes and missteps by his committee.
The breakfast Barbour hosted Saturday was a not-so-subtle way to establish the governors group as central to the party's rebuilding hopes, and to make himself one of its leading voices in shaping both the message and strategy for 2010.
Republicans are determined to reverse the policies of the Obama administration. That makes winning control of the House or Senate the party's highest priority this year. But Barbour reminded the breakfast audience that not only did governors help rebuild the party in the 1990s but also that there is a greater chance of winning congressional races if there is a strong incumbent GOP governor or winning gubernatorial candidate on the ballot.
Barbour had another message when he spoke later on Saturday: Republicans could squander their opportunities if they do not remain united. He said the party should make room for tea party activists and keep them in the conservative movement.
"The Democrats' fondest hope is to see tea-party or other conservatives split off and have a third party and split the conservative [vote]," he said. He added: "Please leave here unified and stay that way through November and beyond."
The list of prospective 2012 candidates who appeared in New Orleans included, in addition to Barbour and Palin, former House speaker Newt Gingrich, Rep. Mike Pence of Indiana, Texas Gov. Rick Perry, former senator Rick Santorum (Pa.) and Rep. Ron Paul (Tex.), a presidential candidate in 2008.
Minnesota Gov. Tim Pawlenty, who stayed in the state to welcome home National Guard soldiers returning from Iraq, spoke by video. Former Massachusetts governor Mitt Romney and former Arkansas governor Mike Huckabee, two of the three finalists for the 2008 GOP nomination, skipped the New Orleans gathering.
Palin was clearly the biggest draw and got an enthusiastic response. Whether she will try to convert her celebrity status into being a candidate or choose to play kingmaker to another candidate in 2012 isn't clear yet. She should not be underestimated as a force within the party, but the weekend showed that she isn't the only Republican who can appeal both to tea party activists and GOP rank-and-file.
Perry, who has said he is not interested in running for president and faces a competitive reelection in Texas, spoke several hours after Palin and received a reception that was easily the equal of hers. His message, which blended Texas-centric pride and traditional Republican doctrine with a strong dose of tea-party-inspired rhetoric attacking Washington, seemed ready-made for conservative audiences in 2010.
Gingrich attacked Obama in the strongest terms possible and urged Republicans to become "the party of yes" if they are to regain the confidence of the American people. Asked about his plans for 2012, Gingrich said he would decide early next year, but he echoed Barbour by saying, "Let's all get out and campaign this year to win this year's election."
None of these possible presidential candidates -- those who came to New Orleans and those who didn't -- can know at this point what kind of shape Obama will be in when 2012 rolls around. Their prospects will be determined significantly by what happens in November.
But the absence of 2012 buzz in New Orleans underscores the singular focus for a party eager to return to power. There is also a recognition that any perceived failures in November could make 2012 even more difficult.
Clarke Reed, who served for years as the RNC member from Mississippi and who founded the Southern Republican Leadership Conference 40 years ago, said the meeting this weekend has restored the group to its original purpose. Four years ago, he said, the organization got infatuated with presidential politics and straw polls.
Now, he said, "It's back to the grass roots."
That's why 2012 can wait.


Foreign Policy:


Agenda of Nuclear Talks Leaves Out a New Threat
By DAVID E. SANGER and WILLIAM J. BROAD

WASHINGTON — Three months ago, American intelligence officials examining satellite photographs of Pakistani nuclear facilities saw the first wisps of steam from the cooling towers of a new nuclear reactor. It was one of three plants being constructed to make fuel for a second generation of nuclear arms.
The message of those photos was clear: While Pakistan struggles to make sure its weapons and nuclear labs are not vulnerable to attack by Al Qaeda, the country is getting ready to greatly expand its production of weapons-grade fuel.
The Pakistanis insist that they have no choice. A nuclear deal that India signed with the United States during the Bush administration ended a long moratorium on providing India with the fuel and technology for desperately needed nuclear power plants.
Now, as critics of the arrangement point out, the agreement frees up older facilities that India can devote to making its own new generation of weapons, escalating one arms race even as President Obama and President Dmitri A. Medvedev of Russia sign accords to shrink arsenals built during the cold war.
Mr. Obama met with the leaders of India and Pakistan on Sunday, a day ahead of a two-day Washington gathering with 47 nations devoted to the question of how to keep nuclear materials out of the hands of terrorists. In remarks to reporters about the summit meeting, Mr. Obama called the possibility of a terrorist organization obtaining a nuclear weapon represented “the single biggest threat to U.S. security, both short-term, medium-term and long-term.”
The summit meeting is the largest gathering of world leaders called by an American president since Franklin D. Roosevelt organized the 1945 meeting in San Francisco that created the United Nations. (He died two weeks before the session opened.) But for all its symbolism and ceremony, this meeting has quite limited goals: seeking ways to better secure existing supplies of bomb-usable plutonium and highly enriched uranium. The problem that India and Pakistan represent, though, is deliberately not on the agenda.
“President Obama is focusing high-level attention on the threat that already exists out there, and that’s tremendously important,” said Sam Nunn, the former Democratic senator from Georgia who has devoted himself to safeguarding global stockpiles of weapons material — enough, by some estimates, to build more than 100,000 atom bombs. “But the fact is that new production adds greatly to the problem.”
Nowhere is that truer than Pakistan, where two Taliban insurgencies and Al Qaeda coexist with the world’s fastest-growing nuclear arsenal. According to a senior American official, Mr. Obama used his private meeting Sunday afternoon with Yousaf Raza Gilani, Pakistan’s newly empowered prime minister, to “express disappointment” that Pakistan is blocking the opening of negotiations on a treaty that would halt production of new nuclear material around the world.
Experts say accelerated production in Pakistan translates into much increased risk.
“The challenges are getting greater — the increasing extremism, the increasing instability, the increasing material,” said Rolf Mowatt-Larssen of the Kennedy School of Government at Harvard, who as a C.I.A. officer and then head of the Energy Department’s intelligence unit ran much of the effort to understand Al Qaeda’s nuclear ambitions.
“That’s going to complicate efforts to make sure nothing leaks,” he said. “The trends mean the Pakistani authorities have a greater challenge.”
Few subjects are more delicate in Washington. In an interview last Monday, Mr. Obama avoided a question about his progress in building on a five-year, $100 million Bush administration program to safeguard Pakistan’s arms and materials.
“I feel confident that Pakistan has secured its nuclear weapons,” Mr. Obama said. “I am concerned about nuclear security all around the world, not just in Pakistan but everywhere.” He added, “One of my biggest concerns has to do with the loose nuclear materials that are still floating out there.”
Taking up the Pakistan-India arms race at the summit meeting, administration officials say, would be “too politically divisive.”
“We’re focusing on protecting existing nuclear material, because we think that’s what everyone can agree on,” one senior administration official said in an interview on Friday. To press countries to cut off production of new weapons-grade material, he said, “would take us into questions of proliferation, nuclear-free zones and nuclear disarmament on which there is no agreement.”
Mr. Obama said he expected “some very specific commitments” from world leaders.
“Our expectation is not that there’s just some vague, gauzy statement about us not wanting to see loose nuclear materials,” he said. “We anticipate a communiqué that spells out very clearly, here’s how we’re going to achieve locking down all the nuclear materials over the next four years, with very specific steps in order to assure that.”
Those efforts began at the end of the cold war, 20 years ago. Today officials are more sanguine about the former Soviet stockpiles and the focus is now wider. Last month, American experts removed weapons-grade material from earthquake-damaged Chile.
The summit meeting will aim to generate the political will so that other nations and Mr. Obama’s own administration can create a surge of financial and technical support that will bring his four-year plan to fruition.
“It’s doable but hard,” said Matthew Bunn, a nuclear expert at Harvard. “It’s not easy to overcome secrecy, complacency, sovereignty and bureaucracy.”
Mr. Obama plans to open the summit meeting with a discussion of the scope of the terrorist threat. The big challenge, Mr. Mowatt-Larssen said, is to get world leaders to understand “that it’s a low-probability, but not a no-probability, event that requires urgent action.”
For instance, in late 2007, four gunmen attacked a South African site that held enough highly enriched uranium for a dozen atomic bombs. The attackers breached a 10,000-volt security fence, knocked out detection systems and broke into the emergency control room before coming under assault. They escaped.
During the presidential campaign, Mr. Obama promised to “increase funding by $1 billion a year to ensure that within four years, the essential ingredients of nuclear weapons are removed from all the world’s most vulnerable sites and effective, lasting security measures are instituted for all remaining sites.”
In Mr. Obama’s first year, though, financing for better nuclear controls fell by $25 million, about 2 percent.
“The Obama administration got off to an unimpressive start,” Mr. Bunn wrote in his most recent update of “Securing the Bomb,” a survey to be published Monday by the Nuclear Threat Initiative, a nonprofit advocacy group that Mr. Nunn helped found in Washington. But he added that its proposed budget for the 2011 fiscal year calls for a 31 percent increase.
The next phase in Mr. Obama’s arms-control plan is to get countries to agree to a treaty that would end the production of new bomb fuel. Pakistan has led the opposition, and it is building two new reactors for making weapons-grade plutonium, and one plant for salvaging plutonium from old reactor fuel.
Last month, the Institute for Science and International Security, a private group in Washington, reported that the first reactor was emitting steam. That suggests, said Paul Brannan, a senior institute analyst, that the “reactor is at least at some state of initial operation.”
Asked about the production, Pakistan’s ambassador to the United States, Husain Haqqani, said, “Pakistan looks forward to working with the international community to find the balance between our national security and our contributions to international nonproliferation efforts.”
In private, Pakistani officials insist that the new plants are needed because India has the power to mount a lightning invasion with conventional forces.
India, too, is making new weapons-grade plutonium, in plants exempted under the agreement with the Bush administration from inspection by the International Atomic Energy Agency. (Neither Pakistan nor India has signed the Nuclear Nonproliferation Treaty.)
The Obama administration has endorsed the Bush-era agreement. Last month, the White House took the next step, approving an accord that allows India to build two new reprocessing plants. While that fuel is for civilian use, critics say it frees older plants to make weapons fuel.
“The Indian relationship is a very important one,” said Mr. Nunn, who influenced Mr. Obama’s decision to endorse a goal of ridding the world of nuclear weapons. But he said that during the Bush years, “I would have insisted that we negotiate to stop their production of weapons fuel. Sometimes in Washington, we have a hard time distinguishing between the important and the vital.”


Jet Fuel Sales to U.S. Base Are an Issue in Kyrgyzstan
By ANDREW E. KRAMER

BISHKEK, Kyrgyzstan — Back in 2005, the last time angry crowds toppled the government of Kyrgyzstan, the United States found itself in an awkward position: among the rallying cries was an allegation that the ruling family had benefited handsomely from Pentagon contracts. Now, substantially the same thing appears to be happening again.
Senior leaders in the interim government that took power last week are accusing the United States of allowing family members of the ousted president, Kurmanbek Bakiyev, to enrich themselves with contracts supplying jet fuel to Manas Air Base outside Bishkek, the Kyrgyz capital.
Companies controlled by the president’s 32-year-old son, Maksim, who became a loathed figure during the uprising, skimmed as much as $8 million a month from fuel sales to the base, according to senior leaders in the new government, relying on a monopoly and favorable taxes.
That such accusations became a factor in last week’s uprising speaks to the entrenched cronyism of former Soviet states, where power often blends seamlessly with wealth.
For the United States the base is integral to the logistics of supplying fuel, troops and equipment to Afghanistan. The uprising on Wednesday, in which more than 80 people died, has created some uncertainty about those logistics.
While establishing offices and mulling what to do with the president, who is in the south of the country, officials have already begun releasing details of an elaborate payment system for up to a quarter million gallons of jet fuel used at the base each day.
They accuse the United States of having used that system to curry favor with the ousted president in order to hold onto the air base, the only remaining Amerian military refueling site in Central Asia after Uzbekistan closed a base in a dispute with the United States over human rights.
“Whatever the Pentagon’s policy of buying warlords in Afghanistan, the state of Kyrgyzstan demands more respect,” Edil Baisalov, chief of staff of the interim leader, Roza Otunbayeva, said in an interview. “The government of Kyrgyzstan will not be bought and sold. We are above that.”
Officials with the military agency that buys fuel, the Defense Energy Supply Corporation, have said no United States laws would be violated if contracts were awarded to companies owned by relatives of a foreign heads of state.
In an interview with The New York Times on Sunday, Mr. Bakiyev denied that his family profited from the deals. “Money that comes in for services at the Manas airport does not go into the pocket of the president,” he said. “It goes into an account that everyone can check. Everything goes through the bank.”
The contracts to supply the base have been coveted, and delicate.
In the haste of the buildup for the war in Afghanistan after the Sept. 11, 2001, attacks, companies controlled by Aidar Akayev, son of Askar Akayev, who was then the president, had wound up with lucrative contracts to sell fuel to Manas, according to Kyrgyz officials. A lawyer for Mr. Akayev’s son has also said the contracts were not illegal.
Nonetheless, when President Akayev was deposed in 2005, the prosecutor’s office under the new leader, Mr. Bakiyev, opened a criminal investigation, asked for F.B.I. cooperation and hired an independent corporate investigations company to untangle the arrangement.
According to a report prepared by that investigator, who asked not to be identified, as he was not authorized to disclose the report, the primary source of aviation grade kerosene used at the base is an oil refinery in the Siberian city of Omsk, owned by the oil division of Gazprom, the Russian energy giant.
Red Star, a company with offices in London and Bishkek, contracted with Defense Energy Supply to buy the fuel and move it across several Central Asian countries to Manas. Chuck Squires, a former American Army lieutenant colonel, was hired to handle the contract.
The outside investigator met with Mr. Bakiyev to present the initial findings, and characterized his responses as: “Thank you very much for your job. Your services are no longer needed.” The investigator said he suspected the new president was in fact taking over the same business model.
“They changed the names of the companies but the scheme remained the same,” he said.
Some of Red Star’s business had been assumed by another company, the Mina Corporation Limited, he said.
Turusbek Koyenaliyev, an aide to the new acting minister for economic affairs, said one company supplying the base today was Manas Aerofuels. He said it was controlled by Maksim Bakiyev, the son of the president.
Manas Aerofuels and the Mina Corporation share office space in the Hyatt Regency hotel in Bishkek. A man who opened Mina’s door said the company sold jet fuel to Manas but declined to answer other questions. On a list of companies in the business center provided by Hyatt, the contact for Mina is a “Mr. Squires.”
In interviews, the acting prime minister, the president’s chief of staff, a former foreign minister and a former acting president asserted that the younger Mr. Bakiyev was the owner of the fuel-supply companies. They were unable to provide documentation, citing the chaotic state of the government.
Omurbek Tekebayev, the former acting president, said in an interview that the trading companies made money selling cheap Russian jet fuel at world prices to the American base.
Until April 1, when the Russian government abruptly imposed a steep tariff on refined products for Kyrgyzstan, these exports were tariff-free under a customs agreement. Within Kyrgyzstan, sales to the base were exempt from the usual 20 percent sales tax, Mr. Tekebayev said.
The Bakiyev family, Mr. Tekebayev said, assumed control of part of the business immediately after the 2005 uprising.
Alikbek Jekshenkulov, who was serving as Mr. Bakiyev’s foreign minister at the time, said the ruling family consolidated its control of the trade in 2006, after Mr. Bakiyev issued the first of several public threats to expel the base. The threat, he said, was used to compel the transfer of the remaining fuel contracts to the Bakiyev-family-controlled firms.
Mr. Jekshenkulov, in an interview, said he met with Mr. Bakiyev to object and explain that others, too, would like the business. “I said, ‘There is a war between the clans to sell gas to the base. There ought to be an open tender, so people will believe it is honest, and you can be clean as a politician,’” Mr. Jekshenkulov said. “As always, he just nodded his head and said, ‘That’s all.’ ”
“Nothing changed,” Mr. Jekshenkulov said. “They changed the names.”
Partly as a result of this confrontation, however, Mr. Jekshenkulov said he was dismissed as foreign minister in February 2007, and later joined the opposition, which was repressed under Mr. Bakiyev. Last year, he was imprisoned in solitary confinement from March until August.

Opinion Pieces:


Sorry: No bump for Obamacare
Examiner Editorial

Last September, just as public opinion was beginning to turn against Obamacare in a serious way, Bill Clinton made a bold prediction. "The minute health care reform passed," he said in a policy forum in New York City, "President Obama's approval ratings would go up 10 points." Clinton's prediction reflected the wishful assumption of many wishful liberal-leaning pundits and think tank analysts, as well as the strategy of Obama's political advisers. They viewed the rising public clamor against Obamacare as a temporary aberration, not as a lasting problem that could potentially undo his presidency. When Obamacare passed, they confidently reasoned, the public would suddenly appreciate its virtues and acquiesce to federal control over nearly every aspect of health care.
This notion consoled them in the following months as Republicans shockingly captured the governorships of New Jersey and Virginia, then the Senate seat held for more than four decades by Ted Kennedy in deepest blue Massachusetts. But despite these unmistakable electoral manifestations of deepening voter displeasure, Obama and congressional Democrats soldiered on, often resorting to desperation tactics, until they finally secured a victory that put Obamacare on the books as the law of the land.
But -- surprise! -- there has been no bump for Obama, nor for Democrats in Congress, nor for Obamacare. In fact, Obama's public approval rating now registers consistently below 50 percent and seems headed steadily downward, with polls conducted for CBS, Fox News, and Quinnipiac putting him in the mid-to-low 40s. Republicans lead in nearly every poll of the generic congressional ballot, prompting liberal Democrat number-cruncher Nate Silver to write that if the election were held today, Republicans would likely take control of the House of Representatives by a comfortable margin. Democratic retirement announcements keep coming even at this late date, mostly in districts where Republicans can compete.
Meanwhile, polls continue to show a strong majority opposing Obamacare and favoring its repeal. The latest Fox News poll puts the opposition at 55 percent, with 39 percent in favor. This reading comes despite Obama's backward-looking campaign tour in recent weeks to build public support for Obamacare, something he and his party were unable to do during the year prior to its enactment. The Democrats assumed they had to pass a health care reform bill, any bill, regardless of the depth or intensity of opposition. Failure, they reasoned, would harm them at the polls. As it turned out, their success may kill them in November.


Who’s Not Sorry Now?

“I’m sorry that the financial crisis has had such a devastating impact on our country. I’m sorry for the millions of people, average Americans, who have lost their homes. And I’m sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us.”
— Charles O. Prince III, former chairman and chief executive officer, Citigroup, April 8, 2010
“We all bear responsibility for not recognizing this, and I deeply regret that.”
— Robert E. Rubin, former Treasury secretary and former director, Citigroup, April 8, 2010
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The latest public hearings of the Financial Crisis Inquiry Commission, held last week, made headlines for eliciting more apologies from financiers who presided over the market collapse.
You may recall a similar flurry last year, when Lloyd Blankfein, the chairman and chief executive of Goldman Sachs, was widely credited for having apologized for his firm’s role in the financial crisis.
We did not buy it then; Mr. Blankfein never said what he was sorry for or to whom he was apologizing. And we are not buying it now.
Mr. Prince says he “could not” foresee the impending collapse, when he could have and should have seen it coming. Certainly, others did. Mr. Rubin has said that under his employment agreement, he was not responsible for the bank’s operations. But he was a towering figure at Citi, a source of its credibility and prestige. That implies responsibility, no matter what his contract said. Add all that to the “I wasn’t the only one” context of both men’s comments, and their regret translates as, “We feel bad about an accident we were powerless to prevent.”
Except that the financial crisis was not an accident and they were not powerless. The crisis was the result of irresponsibility and misjudgments by many people, including Mr. Prince and Mr. Rubin. Citi, under their leadership, epitomized the financial recklessness that ruined the economy.
More important, the “apologies” are distractions. The purpose of the inquiry is not catharsis. It is to determine the causes of the crisis and present the truth. A successful inquiry would compel the government to take appropriate corrective action.
The commission has managed to unearth some compelling testimony. (Last week’s hearings produced detailed evidence of how the mortgage-investment pipeline came to be stuffed with toxic loans.) But the inquiry can strangely lack vigor. It has not issued any subpoenas for documents — satisfied so far with voluntary submissions — and does not administer oaths to witnesses it interviews in private. Lying to a federal investigator is illegal under oath or not, but experience shows that taking an oath is a powerful incentive to tell the whole truth.
The commission is supposed to finish its work by Dec. 15. In the meantime, Congress’s efforts at financial reform appear to be weakened daily by politicians who are more concerned with campaign donations than regulating the financial system. This week, for instance, a Senate committee is expected to propose new regulations for derivatives that are more loophole than rule.
Sorry, indeed.


Pretend pensions

HERE'S MORE evidence that state governments are not leveling with their citizens about the costs of pensions for public employees: A new Stanford University study commissioned by California Gov. Arnold Schwarzenegger (R) has found that that the state's pension funds are understating their likely unfunded liabilities by almost half a trillion dollars.
California's three largest funds, with a combined $442.1 billion in assets as of mid-2008, calculate their projected liabilities based on rates of return of between 7.5 percent and 8 percent. These assumptions yield a relatively modest $55.4 billion gap, easily covered by adjusting annual contributions. But this rosy scenario begins to look implausible when you consider that it requires fund managers to beat the 5.3 percent annual rate of return that U.S. stocks rang up in the 20th century. The Stanford researchers used a far more conservative and -- given both distant and recent history -- realistic rate of 4.14 percent, roughly what the funds would earn if invested in risk-free U.S. Treasury securities. The result was an estimated unfunded liability 10 times bigger than the official figure.
To be sure, there is absolutely nothing illegal or improper about the way California's pension funds do the math now. The vast majority of states and local governments calculate their liabilities similarly. It is, in fact, perfectly permissible to do so under guidelines set by the Governmental Accounting Standards Board (GASB), the official body that sets norms in this area. But that's just the problem: Everybody does it. According to research by Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern University, doing the same calculation for the rest of the states that Stanford did for California yields an estimated $3.92 trillion nationwide shortfall for the period 2008-2023.
It's no mystery why states got into this fix. Politicians want to court public employee unions with generous promises without having to ask taxpayers for more money. Pretending that investment income will solve the equation helps them avoid hard choices -- though it gives fund managers a strong perverse incentive to take excessive risks in hopes of meeting unrealistic targets. The GASB has been considering a change in its standards to bring them closer into line with requirements in the private sector. The California study provides another strong argument in favor of reform.