When it comes to gambling, there has never been a shortage of opinion amongst the masses. Either people favor it or they feel strongly that it accompanies some of society's more depraved behaviors, along with attracting crime, and is a negative temptation for our youth.

Regardless of what side of the table you are on, most folks can agree that they would like less government regulation when it comes to indulging in their leisure activities of choice. But such becomes far less clear when the government jumps in.

As hard as we might try to understand the present United States federal laws on the books when it comes to gambling, and especially with the advent of constantly evolving computer technology, legislation has not kept pace.

Additionally, lawmakers are too often wont to ignore a problem, lest it detract from their popularity, and more importantly, when it might interfere with receiving campaign cash from certain lobbying industries.

So they drag their proverbial feet until an issue reaches a fever pitch and it simply must be addressed; even if it is not in a cohesive manner or in the best interests of their constituents.

Also, with respect to gambling, I have previously documented in several previously published 2010 articles that many state governments in the U.S. have already started to craft legislation in hopes of feeding their depleted coffers by further relaxing their laws to allow more access to gambling.

Everything from expanding brick and mortar gambling casinos to advancing racinos and adding slot machines at horse race tracks to allowing intrastate and interstate online gambling are seen collectively as a potential bonanza that will cure all ills for the empty tills lining their budgets. And it is estimated by the federal government that there could be as much as a $42 billion windfall over a 10-year stretch in taxable revenue.

It is quite interesting, but not by virtue of coincidence, that most of this seeming rush to pass such legislation by U.S. states comes at the same time that the U.S. Congress is plotting ways to overturn the only recently implemented the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), through a proposed law by Congressman Barney Frank (D-MA) that he originated in 2009.

It just won its initial approval in the U.S. House of Representatives through its Committee on Financial Services on July 27, 2010, on which Rep. Frank is the Chairman. Known as the House Resolution 2267 (H.R. 2267) Internet Gambling Regulation, Consumer Protection and Enforcement Act the House Financial Services Committee's approval is but the first phase of its passage, required by both houses of the U.S. Congress.

In short, the UIGEA was a nice way for the U.S. government to keep offshore online betting casinos at bay from the American consumer. It was initially enacted in October 2006, but was never implemented until June 1, 2010, after many long delays by the federal government's U.S. Department of the Treasury in compelling U.S. banking institutions to honor its rules.

However, the main problem, which will continue to haunt H.R. 2267 is the actual legal definition of "illegal online gambling," thus creating all kinds of loopholes and wiggle room, from the living room gambler to organized crime, to skirt the law.

And also of concern in the presently active UIGEA is that banks remain the only legally accountable parties subject to penalty and prosecution for furnishing offshore online gambling to U.S. residents, while the U.S. gambler placing the bet remains safe. And to date, banks and payment processors are still unclear as to which transactions are actually required to be blocked.

Due to the difficulty in deciphering a non-finite system for the processing of legal U.S. based online gaming transactions, consumers' credit cards and debit cards cannot only be blocked or frozen, but accounts are often cancelled.

Furthermore, a consumer, ignorant of the UIGEA could innocently go to a gambling site, not even knowing from where it emanates and later find that their credit line or checking account is in peril, simply by clicking on an illicit site.

So for now, that is the best that the U.S. government has served up, as concerns online gaming. But not shy to out-do itself, even if it compounds a dysfunctional process even more so, the federal government has plans to muck it up again through a poorly framed H.R. 2267 almost immediately setting it up to fail.

H.R. 2267 is overly broad and murky, yet will intrinsically involve the U.S. Department of the Treasury and the U.S. Internal Revenue Service (IRS), amongst other U.S. federal agencies, for starters.

It is merely a wish list without the necessary mechanisms in place to not only generate the hoped for tax revenue, but for enforcing the law itself. And it stands to open the floodgates for illicit online gaming, incongruous with what it should be designed to do.

It would leave online gambling sites left to police themselves, merely under the purview of the U.S. federal government.

And like most other large pieces of U.S. legislation that has been conveniently rushed through to final Congressional passage, H.R. 2267 is another boiler plate document of mandates to be fulfilled at a date certain after it is already signed into law.

But due to its ambiguity, which seemingly appears by design, H.R. 2267 calls for provisions and assorted amendments that cover a wide array of issues. And it is worth noting several of them here, in order to show how arduous it will be for its desired compliance.

Firstly, it authorizes the U.S. Secretary of the Treasury to create a licensing program for regulations and enforcement of the law, issuing licenses to online gambling entities, effective for a period of five years.

Thus, it prescribes the licensing requirements for such internet gambling entities and prohibits operation of an Internet gambling entity that knowingly accepts bets or wagers from persons within the U.S. without the necessary license issued from the U.S. Department of the Treasury.

The law would prohibit a person, deemed prohibited from gambling with an online gambling entity, from collecting any winnings. Such a system to screen a gambler's veracity must be created by each gambling entity, and to be overseen by the federal government. And such is pure folly at this juncture.

H.R. 2267 would require that an online gambling entity pay required taxes to the IRS. And most curiously of all, each gambling entity, itself, would need to implement safeguards against fraud, money laundering, and terrorist financing.

In addition, each online license would require that gambling sites have strong protections in place to prevent minors from gambling online, and to prevent inappropriate online advertising targeted to underage gamblers or specifically aimed at compulsive gamblers.

Not only must the gambling site maintain a list of compulsive gamblers, but must block them from site access. And it cannot allow access to its site for those individuals who are delinquent on child support payments. These are just some amongst many other illusory imperatives.

Enforcement of U.S. law for the prevention of and tracking of electronic transactions of funds sent to terrorist organizations abroad has been weak at best through the U.S. Department of the Treasury, nine years since September 11, 2001. And to essentially require online websites to take on such a task is laughable.

Other proposed mandates include that debit cards only be used for transactions, to the exclusion of credit cards. Offshore online gambling operations such as PokerStars.com, FullTiltPoker.com and UltimateBet.com, which allowed U.S. players to access their sites after the UIGEA went into effect, will be banned from acquiring a U.S. license, as well as other entities that intentionally violated this U.S. law.

Each state and Indian tribe may opt-out of the federal legislation during the first year after its enactment, requiring that their residents abide by respective local laws.

And sports betting, with the exception of U.S. based horse racing and para-mutuel betting, would be disallowed, much to the delight of the professional and college sports industries. U.S. state lotteries, should they eventually become accessible online, would also be exempt.

But perhaps falsely anticipated with this new law is the notion that gamblers will be allowed much freedom to do as they wish in the privacy of their own homes. However, given the bevy of requirements for oversight, nothing could be further from the truth. Deadbeat dads need not log on, as previously noted.

But more realistically, beginning with Internet Service Providers or ISPs, one would expect that they would have to be the gatekeeper for gathering initial information as to whether the gambler is even eligible to gamble, based upon their state of residence, if that state has opted out. And the banks would be the second line of defense, cutting off the gambler's funds if need be, should the online gambling site find that it is a documented compulsive gambler placing the bet.

And should a player gain access to a legitimate site, then the process begins as to whether they are of majority age, has been flagged as a delinquent parent, or has a criminal background. Without such due diligence, the individual gambling site is subject to losing its license.

Certainly none of these entities are law enforcement agencies, so for the federal government to expect legitimate oversight to be realized at these levels seems more than silly.

The purpose of this report was to give a glimpse into what lurks ahead for U.S. online gaming and is not intended to disparage the gambling consumer nor the gambling industry. Rather, the intent is to highlight some of the future changes in law which may not best serve the public or the industry.

And contrary to the online gaming industry's millions of lobbying dollars spent in Washington, D.C. in order to help initiate this latest planned legislation, it might be best for it to restrain its glee, at this time.

For one only needs to look at the present economic condition of Las Vegas, NV. It has now been proven, going back to the onset of the current recession in 2008, that the gambling industry is indeed no longer recession proof. Yes, in time Vegas and its hurting East Coast counterpart, Atlantic City, NJ, will both rise again.

However, with a 14.5% unemployment rate that Las Vegas presently owns, it is evidence for when entire economies are dependent upon the gambling industry for the creation of jobs and funding municipal programs, disaster can ensue. Therefore, for entire U.S. state and federal programs' very survival to be based upon discretionary income from gambling has lawmakers living in a fool's paradise.

Hopefully, in the coming weeks and months, prior to the entirety of the U.S. House of Representatives approving H.R. 2267 and before it is sent on to the U.S. Senate, that not only will cooler heads prevail, but that a better proposed outcome will exceed before everyone's chips are cashed in.

Cheers!

Copyright ©2010 Diane M. Grassi

Contact: dgrassi@cox.net

In 2006, this reporter shed light on the seemingly unfair labor practices taking place in the Central American country of Costa Rica, in a factory operated by the Rawlings Sporting Goods Co., Inc., and now a subsidiary of the multi-national corporation, Jarden Corp. As we embark upon the 2010 Major League Baseball (MLB) season, let us take another look back on this important issue regarding free trade and on that which has transpired since.

At that time, Rawlings was a subsidiary of K2, Inc., primarily a snowboard and in-line skate manufacturer. Then in 2007, Jarden absorbed all of K2's holdings and Rawlings became one of the many assets of Jarden's portfolio.

The Jarden Corp.'s holdings, prior to 2007, had primarily been in the consumer household goods industry, such as with Mr. Coffee®, Oster®, Holmes® and CrockPot®. It became pro-active in the purchase of outdoor clothing and camping equipment companies such as ExOfficio and Coleman and then with the purchase of K2, which owned Rawlings, Jarden became a force in the professional sporting goods industry as well.

But much like the way corporate takeovers can surface rapidly and on a global scale, with what appears as little hands-on management, corporations' goods are then subject to manufacture in far-off lands with little oversight, too. And unfortunately, this accomplished strategy, having culminated primarily over the past 25 years, has enjoyed the muscle and delight of the U.S. government and other state governing bodies of countries throughout the world. Unfortunately, global trade does little to improve the standard of living and human condition of the citizens living in such impoverished countries, where many global giants relocate.
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Since this last report, to wit, Costa Rica has become a member of the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA). Costa Rica, the oldest democracy in Central America, held a voters' referendum in 2007, giving its citizens a voice as to whether they would like to join DR-CAFTA.

The United States Congress rushed through DR-CAFTA in record time, over several months in 2005, but never expected a country such as Costa Rica to actually fight its demands or to obstruct its rush-through process; for all six other CAFTA countries – El Salvador, Honduras, Nicaragua, Guatemala, and the Dominican Republic – were all on board by 2007. As it were, approval for DR-CAFTA was barely passed by Costa Rican voters, and it was not until January 1, 2009 that Costa Rica formally became another Free Trade Zone in Central America.

Few working for or playing in MLB, or for that matter most people living in the U.S., are aware that Free Trade Zones are but a win for the U.S. government and multi-national corporations operating offshore, only. Such corporate entities are not required to pay taxes or tariffs, are allowed to import their supplies duty-free, and electricity and water usage are subsidized. Yet, they are not responsible or required to enforce labor and environmental policies, that would be required had they remained doing business in the U.S.

The following contains parts of the 2006 article, that encapsulates the story of Rawlings Sporting Goods, Inc. and its subsidiary, Rawlings de Costa Rica, S.A., and its manufacture of some 2.2 million baseballs each year made by hand. These laborers work for MLB's gain, its billionaire owners, and multi-millionaire players, who largely remain mum on this topic to date:

As America's National Pastime has continued to rake in record high revenues over the past several years – in the billions of dollars each season – MLB continues to remain deaf to its critics concerning the manufacture of its Official Baseball, apparel and other accessories, with regard to unfair labor practices in the Third World.

In 2004, a 60-page report produced by the National Labor Committee (NLC), an international labor rights organization, entitled, Foul Ball, initially exposed the poor working conditions of the Rawlings baseball factory in the remote city of Turrialba, Costa Rica.

MLB had a tepid response to such claims. Then, following the report, life-long consumer advocate, Ralph Nader, wrote a letter to both MLB Commissioner, Bud Selig, and then-Major League Baseball Players Association (MLBPA) Executive Director, Donald Fehr, to address Rawlings' labor practices. Selig referred Nader's letter to his legal department and Donald Fehr said he was unaware of such claims. Neither man ever followed up.

In 2005, the United States government entered into the DR-CAFTA, allowing for further tax breaks, duty-free tariffs and Free Trade Zone status for U.S. corporations doing business in Central America, without providing for any policing of unfair labor practices in such offshore locales. Although the Agreement contained language to that effect, there is no enforcement mechanism or political will to instill such.

And instead of it taking the lead in calling-out such a worldwide problem, MLB, through its silence, therefore remains complicit in such exploitation by multi-national corporations throughout the Third World, and especially those that are U.S.-based.
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The facts are quite stunning as to what goes into the manufacture of a Major League baseball and the sometimes physically debilitating toll workers take in order to produce some 2.2 million balls utilized each MLB season, in addition to the Minor Leagues and the NCAA College World Series, with which the Jarden Corp., on behalf of Rawlings, also exclusively contracts.

Rawlings has been operating its baseball factory out of Costa Rica since 1988, as it gradually transitioned its factories from the country of Haiti, during its period of government unrest in the late 1980's. Since 1990, Rawlings has produced all of MLB's baseballs in Costa Rica, with its non-professional baseballs manufactured in China.

Although Rawlings also contracts with the National Football League (NFL) and the National Basketball Association (NBA) in producing some of its balls and accessories, the baseball itself perhaps best symbolizes all-things-American and is therefore worthy of the attention it garners from critics of the Rawlings factory.

The approximate 600 workers at the baseball factory in Turrialba are either "sewers" who stitch the cowhide covers onto the baseball's sphere, or they are "assemblers" or "winders", responsible for assembling the core's parts, made of two kinds of rubber and cork, and the winding of the ball's four different grades of yarn. Those who stitch are required to complete 108 stitches into the cowhide leather of each ball by hand.

Each sewer must complete one ball every 15 minutes. They are required to reach a minimum quota of 156 balls per week, in a factory without air conditioning, in temperatures exceeding 100°, requiring permission to use bathrooms, and prohibits workers from speaking to each other on the factory floor. The hours that workers put in average 11 -12 per day and they must always reserve their Saturdays for the factory, in the event an "emergency order" comes through. If not available on Saturday, they are subject to termination.

The gross wages per worker average $1.50 per hour. Workers can earn up to an additional $8.00 per week if they reach the threshold of completing 180 baseballs in one week. Baseball factory workers earn more than the country's minimum wage but are subject the Costa Rican Labor Ministry for any increases in the minimum wage. Provided they reach the minimum weekly ball quota each week, workers are compensated an additional 25-30 cents per baseball by Rawlings. Should they not reach the minimum quota they again risk being terminated.

The physical impact endured by the sewers has left about one-third of them with carpal tunnel syndrome or repetitive stress injuries, including permanent disability, after just two or three years of stitching. And sadly, most MLB players have no knowledge that every baseball manufactured is done so solely by hand under such conditions. Should a worker miss any length of time greater than a couple of days of work, due to illness or injury, they can be easily replaced due to the desperate employment situation. And their healthcare, thereafter, is in doubt.
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Costa Rica, always reliant upon its agriculture to sustain its people and to provide jobs, was dependent upon coffee and sugar cane as its main exports. Yet, in the past several years, as prices for coffee in particular rose, a good part its coffee exports, including its sugar cane industry, lost out to Nicaragua, as even cheaper labor costs prevail there. Some labor experts directly blame the impact of DR-CAFTA on the erosion of the agricultural industry in Costa Rica; the opposite of DR-CAFTA's supposed intent.

Because of the loss of agricultural jobs, the baseball factory now largely sustains the city of Turrialba and its population of 30,000. Rawlings has its workers over a barrel, as they know jobs are scarce, with many more willing to endure such a tough and pressurized work environment.

The NLC as well as the International Labor Committee (ILO) have called upon Rawlings of Costa Rica, S.A. to modify some of its working conditions. Rawlings was asked to provide ergonomics training for workers in order to reduce repetitive stress injuries; to provide workers with a better wage and to increase the amount of incentives based upon levels of production. Yet, Rawlings U.S. deferred to Rawlings de Costa Rica, S.A. and the Costa Rican government.

And the NLC emphasizes the need to allow the workers the right to organize in order to regulate problematic issues, without fear of being fired or reprisal, such as forced overtime or forced layoffs after 3 months, before workers can earn any legal rights. Currently, the workers are well aware that any talk of labor unions will get them dismissed and fear that the factory will go the way of its agricultural industry and relocate to a country where labor is cheaper.

Unfortunately, as the result of doing business abroad, corporations are still subject to the labor laws of the respective country in which they do business. In the case of Costa Rica, there remains a lack of oversight, follow-up or initially filed documents by the Labor Ministry for worker complaints, throughout all industries.

With respect to collective bargaining, it is permissible by law, but is discouraged in the workplace, with employers encouraging workers to join "solidarity associations" instead. These groups are allowed to assemble but are prevented from collective bargaining and are partially financed by the employer.

Ralph Nader previously demanded that MLB and the MLBPA, "Adopt internationally recognized workers' rights standards and effective enforcement mechanisms, as a core condition governing all of its product sourcing and license agreements." Yet, much like the U.S. government's claim it cannot fully enforce its Free Trade Agreements, MLB can make the same claim when it comes to its licensees or subcontractors. Thus, passing the buck becomes an accepted practice and it is chalked it up to the price of doing business in the U.S. and abroad.

Ralph Nader, at the time, went on to say that, "We cannot tell you that it comes as a shock to us that MLB properties do not have any workers' rights guidelines in their licensing agreements. Nor are we surprised by the irony of the Players Associations' Strike Fund being supported by royalties from products which might be made by Third World workers stripped of their own rights. The irony is bitter."

MLB stands pat in that, "Our agreements routinely include provisions that require our partners to comply with applicable laws including those related to employment and workplace safety. At the same time, I am sure you understand that we are not in a position to actively regulate the practices of each and every separate company with which we do business." No, but they could start with the ball; its centerpiece.
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It is not too late for MLB and its superstars to take a stand on workers' rights, regardless of lax U.S. laws in the world of Free Trade and its Agreements' legal loopholes. And important to note – although it has only been 1 year since DR-CAFTA has been realized in Costa Rica – its exports to the U.S. fell 15%, imports from the U.S. to Costa Rica fell 30%, unemployment rose to 7.8% from 4.9% in 2008 and Foreign Direct Investment from other countries fell approximately 30%. Economists will conveniently blame the global recession on these bleak figures, but it represents many Costa Ricans' worst nightmares coming true.

The sweatshop culture in the U.S. ended with the enactment of labor laws and the rise of labor unions. However, one must ask that private industry as well as the U.S. government be held accountable. For not only are both culpable in the permanent export of U.S. jobs, but both stand by – eyes wide open – as workers in other countries, without many of the freedoms U.S. citizens enjoy, are blatantly exploited. For there is no "free trade," as someone ultimately pays.

Take a stand MLB! Perhaps now is the time for Rawlings to go.

Copyright ©2010 Diane M. Grassi
Contact: dgrassi@cox.net

It was on June 21, 1788 that the United States Constitution was officially adopted with its ratification. And it was at that time that its ratification was contingent upon suggested changes be made to the Constitution, thereafter.

Leading up to the Constitution becoming effective, there were numerous debates among the states, namely that the Constitution did not go far enough in protecting personal rights and liberties and would provide for a necessary buffer from infringement by the government on the fundamental rights of the people.

The document simply failed to specify what fundamental rights would be protected from abuse of power, by the federal government and especially in times of emergency.

And it was in the first session of Congress in 1789 in which 12 amendments were proposed of which 10 were ultimately ratified on December 15, 1791. These amendments became known as the Bill of Rights.

The people were rightfully concerned that the Constitution must remain true to its intent; to prevent the misuse of its powers and to protect those very fundamental rights it was charged to protect.

Not the least of such rights was Amendment 1, and its often referenced freedom-of-speech clause. Its main purpose is to provide protection or a deterrent against censorship by the government and its officials. And it is implicit that the First Amendment be invulnerable when a law or government action is at issue.

And it is crucial that the press remains the watchdog of the people, in order to help decipher fact from fiction and for it to report the facts.

If we fast-forward 250 years, we still have two Houses of Congress, more unaccountable than any time in our history, an Executive Branch, creating its own shadow government within the very walls of the White House, and a judicial branch which has evolved into an activist judiciary. And most unfortunately, we have a press corps, a/k/a the media, which no longer remains accountable to the people and at every turn fails to remain objective in its reportage.

It was Thomas Jefferson who noted in 1799 that, "Our citizens may be deceived for awhile, and have been deceived; but as long as the presses can be protected, we may trust to them for light."

But sadly on June 24, 2009, in perhaps the most egregious exercise in blurring the lines between fact and fiction. ABC News, one of the three largest news broadcasting networks in the U.S. and throughout the world, will broadcast its programming from the Blue Room in the East Wing of the White House.

But even more stunning and unprecedented in White House history, it broadcast a prime time special titled, Questions for the President: Prescription for America, an ABC News production. President Obama will answer questions, pre-selected, pre-scripted and censored, by ABC News and the White House.

The intent is to "inform" the people of Obama's new healthcare plan, which has not been seen nor discussed by the Congress, in an open forum, and remains a mystery as to its details, not publicly disclosed. No opposition questions or representation of any ideas other than those of Obama's, ABC's or the Democratic Party will be permitted.

So essentially, conservatives and Republican lawmakers felt justified referring to it as a paid infomercial, not a "news" program. Usurping the Congress and the will of the people is anathema to abuse of power.

The nationalization of U.S. healthcare, as important and personal a matter as it is to every American has now been hijacked, along with the public's airwaves. If Obama's intentions for the American people cannot withstand honest and unscripted dialog and discourse but rather necessitates an imposter shilling as a news network, then it will fail the American people.

But do remember if you decide to tune in on Wednesday, that, "The most effectual engines for pacifying a nation are the public papers…A despotic government always keeps a kind of standing army of news writers who, without any regard to truth or to what should be like truth, invent and put into the papers whatever might serve the ministers. This suffices with the mass of the people who have no means of distinguishing the false from the true paragraphs of a newspaper." – Thomas Jefferson (1816)

Copyright ©2009 Diane M. Grassi
Contact: dgrassi@cox.net

In this third chapter of this ongoing discussion and analysis of United States energy policy and its ramifications both realized directly and indirectly from the U.S. Energy Policy Act of 2005, (EPAct 2005) it would be irresponsible not to include U.S. nuclear energy policy in such analysis.

As such, the EPAct 2005 and its previously referenced and unprecedented mandates, in prior chapters of this report, play a role with the reformulation of the regulation of U.S. nuclear energy and its projected and rather overwhelming imminent comeback.

The nuclear energy industry has become a global proposition given the changing geographic demands of energy needs in newly industrialized nations such as India and China. And it would be foolish for the U.S. to assume that it operates in a vacuum and that its future energy needs and demands will not be impacted by such changes in a global economy; one in which the U.S. is now primarily at the receiving end of offshore manufactured goods, including more and more of America's food supply.

But the global economy has but given the U.S. government and in particular in this case, the U.S. Department of Energy, (DOE) an excuse to take the proverbial lid off of sound national security policy which has necessarily dictated U.S. energy policy for decades, until now, for the safety of the American people and the integrity of its critical infrastructure.

Although the first large scale civilian nuclear plant started providing electricity in 1957, it was basically between that time and the late 1970's when all of the current operating nuclear reactor facilities were constructed. And with an average lifespan up to 60 years for each, most of the currently operating 104 U.S. nuclear plants are either in or have applied for their 2nd 20-year licensing period extensions.

Since the last U.S. nuclear reactor was ordered in 1973, those handful that were completed, after 1978 and post-3 Mile Island, were ordered prior to 1973. To wit, in 1996, the last U.S. plant constructed, the Tennessee Valley Authority's Watts Bar 1 reactor in Tennessee, was the result of a revived dormant license from 1970. And there are plans to build the Watts Bar 2 from another previous license from dating back to1973.

Since U.S. nuclear energy policy has nearly come full circle today, it is important to take stock of its history. The Atomic Energy Commission, (AEC) was formed through the Atomic Energy Act of 1946, originally to specifically oversee the military's and civic atomic energy programs. And it was given the expanded responsibility, for the first time, to assume dual oversight and regulation of atomic energy both militarily as well as commercially through the Atomic Energy Act of 1954.

But it was through the Energy Reorganization Act of 1974, that created the Nuclear Regulatory Commission (NRC), the present U.S. nuclear regulatory agency, to assume the oversight authority from the AEC. It now regulates most U.S. commercial nuclear activities, including nuclear power reactors and the use of radioactive materials in industry, medicine, agriculture and scientific research as well as fuel cycle facilities and nuclear waste management.

The 1974 law was seen as an opportunity to put trust back into the oversight agency which took on the dual task of both promoting nuclear power while safeguarding the American people, initially in 1954. And it was after that point in time that the American people had already begun to lose trust in the agency's ability to do so. Apparently, the U.S. government thought that changing the acronym of the agency would calm the public's displeasures.

But it was during the late 1960's and early 1970's when the nuclear plant construction boom was in full gear and simultaneous reassurances from the federal government to keep safeguards in place fell on the deaf ears of energy consumers. Most importantly, the agency was designated to walk a fine line of both promoting commercially viable nuclear energy as well as handling all of the required licensing for new construction of nuclear power plants.

And in this global economy, at a time when the U.S. is seeing extraordinary growth in the foreign direct investment and acquisition in U.S. critical infrastructure, it appears reaped with conflict for the licensing agency to also be able to independently assess potential security risks both civilly and criminally.

Unfortunately, the notorious Browns Ferry Nuclear Plant fire in 1975 in Decatur, AL could have been avoided and was the result of human error rather than an unexpected meltdown. A mechanical technician foolishly was looking for reported air leaks within the reactor with a lighted candle which ultimately started the fire. But
Three Mile Island Unit 2 (TMI-2) nuclear power plant near Middletown, Pennsylvania, on March 28, 1979, was the most serious nuclear plant fiasco in U.S. history. The reactor sustained the melting of half its core, which was later found to be a combination of technical and human error and allowed for released radioactive gases into the atmosphere and putting its employees immediately at risk.

The 3 Mile failure was followed in 1986 by the misfortune of Unit 4 of the nuclear power station at Chernobyl, Ukraine in the former USSR. It emitted radioactive material, far more deadly an accident that 3 Mile Island, affecting 52,000 people in the vicinity, immediately killing 30 people and possibly impacting up to 5 million others. Nevertheless, it was 3 Mile Island that provided the final nail in the coffin for skittish investors in U.S. nuclear technology, although nuclear facilities throughout the U.S. still provide 20% of electrical power generation. It remains very low in greenhouse emissions and is considered a form of clean energy.

In spite of the NRC's own damage control to restore safety measures in nuclear plant facilities over the past 30 years, its ill-repute remains along with remnants of trepidation in reinvesting in nuclear energy. Therefore, the apparent overnight reverse course by the DOE in lining up investors to submit license construction applications for nuclear energy plants, with some 20 expected by mid-2009, has set off alarm bells of another sort.

And that brings us back to the EPAct of 2005 which provides for a vast assortment of givebacks, subsidies and federally subsidized loan guarantees including risk insurance packages to the brokers and investors who come a-callin', totaling billions of dollars worth of incentives. And once again, foreign owned holding companies, foreign government-owned entities and foreign-U.S. joint ventures, acquisitions and mergers will be the recipients of these U.S. taxpayer provided benefits.

The nuclear energy industry not only remains a hot-button issue because of its sullied past, but because of a heightened internal as well as public awareness of its ever-present national security risks it now poses in a post-9/11 world. In addition, there is the issue of the failing power grid infrastructure, which has not been improved in decades, and minimally maintained, along with a continued U.S. deregulation policy from which the American economy may never recover.

All of the aforementioned but creates for a perfect storm, all the while U.S. foreign policy dictates to other nations and regions on the ways in which they may engage or use nuclear material, whether for weaponry or for electrical power distribution.

The first step in trying to comprehend this multi-faceted and current energy policy, based upon both its history as well as current law, is to understand the revised NRC application process. Although the regulation revisions date back to 1989, the most recent and final rules were not certified and published in the Federal Register by the NRC until August 2007 (10 CFR Part 52).

The revisions have changed the entire regulatory review process and framework for the construction of new nuclear reactors and facilities. And over the next 18 months, such changes in the regulation process, with ink barely dry, will be tested in a paint-by-numbers fashion.

The EPAct 2005 while not intrinsic to the actual changes in NRC rule making, has played a consequential role in incentives for investors and ultimately the NRC's seeming rush to finalize regulation revisions over a matter of months, after many years they were held in virtual abeyance.

And now the one time 2-step licensing process created for its thoroughness and for compliance with the Environmental Protection Agency (EPA) as well as providing enough time to have the appropriate number of public hearings, has been whittled down to a 1-step process; one that appears less investigative in scope and more equivalent to drive-through governance.

In order to supposedly bring an improved regulatory model for U.S. nuclear energy construction, which the NRC believes to be more efficient, the COL, or combined license application, early site permits (ESP), and standard design certifications pushes the process along more quickly. However, also cut in the process will be preoperational hearings on plant construction qualification that would be limited and not required by the NRC, and minimizing public input.

The ESP procedure includes site safety issues and emergency plans apart from the plant design. The NRC's and nuclear industry's reasoning is that the new process will cut down on delays, cost overruns and reduce the application process down to 42 months. In that regard, there is some speculation that the next nuclear plant could break ground in the U.S. by the end of 2010 and perhaps be completed by 2015.

In the final part of this series, the actual players or investors in new U.S. nuclear plants construction will be addressed as well as who and from where from these entities hale. And the mechanisms mandated in the EPAct 2005 for lucrative financial rewards to these corporations will be discussed. Whether or not such investors will be even remotely close to ensuring the fiscal as well as environmental health of the American people is an important question which will be asked.

And finally, that which is most crucial in this entire changing energy landscape, that being the national security of the U.S, was etched into law in the Atomic Energy Act of 1954 in 42 U.S.C. Sec. 2011 (1954) as follows: "Aliens and entities owned, controlled or dominated by aliens or foreign governments may not engage in operations involving the utilization of energy. This restriction applies primarily to nuclear reactors and reprocessing plants extracting plutonium."

Yet, as will be analyzed in Part 4 of this series, we will see that through the use of joint ventures, foreign holding companies, license transfers and majority subsidiary investment mergers, rubber-stamped by virtually all branches of the U.S. government, historically held energy law no longer remains the watchdog it was once meant to be. Therefore, the best interests of the American people are now marginalized and the future national security interests of the U.S. may be forever compromised.

Copyright ©2008 Diane M. Grassi
Contact dgrassi@cox.net

In this third chapter of this ongoing discussion and analysis of United States energy policy and its ramifications both realized directly and indirectly from the U.S. Energy Policy Act of 2005, (EPAct 2005) it would be irresponsible not to include U.S. nuclear energy policy in such analysis.

As such, the EPAct 2005 and its previously referenced and unprecedented mandates, in prior chapters of this report, play a role with the reformulation of the regulation of U.S. nuclear energy and its projected and rather overwhelming imminent comeback.

The nuclear energy industry has become a global proposition given the changing geographic demands of energy needs in newly industrialized nations such as India and China. And it would be foolish for the U.S. to assume that it operates in a vacuum and that its future energy needs and demands will not be impacted by such changes in a global economy; one in which the U.S. is now primarily at the receiving end of offshore manufactured goods, including more and more of America's food supply.

But the global economy has but given the U.S. government and in particular in this case, the U.S. Department of Energy, (DOE) an excuse to take the proverbial lid off of sound national security policy which has necessarily dictated U.S. energy policy for decades, until now, for the safety of the American people and the integrity of its critical infrastructure.

Although the first large scale civilian nuclear plant started providing electricity in 1957, it was basically between that time and the late 1970's when all of the current operating nuclear reactor facilities were constructed. And with an average lifespan up to 60 years for each, most of the currently operating 104 U.S. nuclear plants are either in or have applied for their 2nd 20-year licensing period extensions.

Since the last U.S. nuclear reactor was ordered in 1973, those handful that were completed, after 1978 and post-3 Mile Island, were ordered prior to 1973. To wit, in 1996, the last U.S. plant constructed, the Tennessee Valley Authority's Watts Bar 1 reactor in Tennessee, was the result of a revived dormant license from 1970. And there are plans to build the Watts Bar 2 from another previous license from dating back to1973.

Since U.S. nuclear energy policy has nearly come full circle today, it is important to take stock of its history. The Atomic Energy Commission, (AEC) was formed through the Atomic Energy Act of 1946, originally to specifically oversee the military's and civic atomic energy programs. And it was given the expanded responsibility, for the first time, to assume dual oversight and regulation of atomic energy both militarily as well as commercially through the Atomic Energy Act of 1954.

But it was through the Energy Reorganization Act of 1974, that created the Nuclear Regulatory Commission (NRC), the present U.S. nuclear regulatory agency, to assume the oversight authority from the AEC. It now regulates most U.S. commercial nuclear activities, including nuclear power reactors and the use of radioactive materials in industry, medicine, agriculture and scientific research as well as fuel cycle facilities and nuclear waste management.

The 1974 law was seen as an opportunity to put trust back into the oversight agency which took on the dual task of both promoting nuclear power while safeguarding the American people, initially in 1954. And it was after that point in time that the American people had already begun to lose trust in the agency's ability to do so. Apparently, the U.S. government thought that changing the acronym of the agency would calm the public's displeasures.

But it was during the late 1960's and early 1970's when the nuclear plant construction boom was in full gear and simultaneous reassurances from the federal government to keep safeguards in place fell on the deaf ears of energy consumers. Most importantly, the agency was designated to walk a fine line of both promoting commercially viable nuclear energy as well as handling all of the required licensing for new construction of nuclear power plants.

And in this global economy, at a time when the U.S. is seeing extraordinary growth in the foreign direct investment and acquisition in U.S. critical infrastructure, it appears reaped with conflict for the licensing agency to also be able to independently assess potential security risks both civilly and criminally.

Unfortunately, the notorious Browns Ferry Nuclear Plant fire in 1975 in Decatur, AL could have been avoided and was the result of human error rather than an unexpected meltdown. A mechanical technician foolishly was looking for reported air leaks within the reactor with a lighted candle which ultimately started the fire. But
Three Mile Island Unit 2 (TMI-2) nuclear power plant near Middletown, Pennsylvania, on March 28, 1979, was the most serious nuclear plant fiasco in U.S. history. The reactor sustained the melting of half its core, which was later found to be a combination of technical and human error and allowed for released radioactive gases into the atmosphere and putting its employees immediately at risk.

The 3 Mile failure was followed in 1986 by the misfortune of Unit 4 of the nuclear power station at Chernobyl, Ukraine in the former USSR. It emitted radioactive material, far more deadly an accident that 3 Mile Island, affecting 52,000 people in the vicinity, immediately killing 30 people and possibly impacting up to 5 million others. Nevertheless, it was 3 Mile Island that provided the final nail in the coffin for skittish investors in U.S. nuclear technology, although nuclear facilities throughout the U.S. still provide 20% of electrical power generation. It remains very low in greenhouse emissions and is considered a form of clean energy.

In spite of the NRC's own damage control to restore safety measures in nuclear plant facilities over the past 30 years, its ill-repute remains along with remnants of trepidation in reinvesting in nuclear energy. Therefore, the apparent overnight reverse course by the DOE in lining up investors to submit license construction applications for nuclear energy plants, with some 20 expected by mid-2009, has set off alarm bells of another sort.

And that brings us back to the EPAct of 2005 which provides for a vast assortment of givebacks, subsidies and federally subsidized loan guarantees including risk insurance packages to the brokers and investors who come a-callin', totaling billions of dollars worth of incentives. And once again, foreign owned holding companies, foreign government-owned entities and foreign-U.S. joint ventures, acquisitions and mergers will be the recipients of these U.S. taxpayer provided benefits.

The nuclear energy industry not only remains a hot-button issue because of its sullied past, but because of a heightened internal as well as public awareness of its ever-present national security risks it now poses in a post-9/11 world. In addition, there is the issue of the failing power grid infrastructure, which has not been improved in decades, and minimally maintained, along with a continued U.S. deregulation policy from which the American economy may never recover.

All of the aforementioned but creates for a perfect storm, all the while U.S. foreign policy dictates to other nations and regions on the ways in which they may engage or use nuclear material, whether for weaponry or for electrical power distribution.

The first step in trying to comprehend this multi-faceted and current energy policy, based upon both its history as well as current law, is to understand the revised NRC application process. Although the regulation revisions date back to 1989, the most recent and final rules were not certified and published in the Federal Register by the NRC until August 2007 (10 CFR Part 52).

The revisions have changed the entire regulatory review process and framework for the construction of new nuclear reactors and facilities. And over the next 18 months, such changes in the regulation process, with ink barely dry, will be tested in a paint-by-numbers fashion.

The EPAct 2005 while not intrinsic to the actual changes in NRC rule making, has played a consequential role in incentives for investors and ultimately the NRC's seeming rush to finalize regulation revisions over a matter of months, after many years they were held in virtual abeyance.

And now the one time 2-step licensing process created for its thoroughness and for compliance with the Environmental Protection Agency (EPA) as well as providing enough time to have the appropriate number of public hearings, has been whittled down to a 1-step process; one that appears less investigative in scope and more equivalent to drive-through governance.

In order to supposedly bring an improved regulatory model for U.S. nuclear energy construction, which the NRC believes to be more efficient, the COL, or combined license application, early site permits (ESP), and standard design certifications pushes the process along more quickly. However, also cut in the process will be preoperational hearings on plant construction qualification that would be limited and not required by the NRC, and minimizing public input.

The ESP procedure includes site safety issues and emergency plans apart from the plant design. The NRC's and nuclear industry's reasoning is that the new process will cut down on delays, cost overruns and reduce the application process down to 42 months. In that regard, there is some speculation that the next nuclear plant could break ground in the U.S. by the end of 2010 and perhaps be completed by 2015.

In the final part of this series, the actual players or investors in new U.S. nuclear plants construction will be addressed as well as who and from where from these entities hale. And the mechanisms mandated in the EPAct 2005 for lucrative financial rewards to these corporations will be discussed. Whether or not such investors will be even remotely close to ensuring the fiscal as well as environmental health of the American people is an important question which will be asked.

And finally, that which is most crucial in this entire changing energy landscape, that being the national security of the U.S, was etched into law in the Atomic Energy Act of 1954 in 42 U.S.C. Sec. 2011 (1954) as follows: "Aliens and entities owned, controlled or dominated by aliens or foreign governments may not engage in operations involving the utilization of energy. This restriction applies primarily to nuclear reactors and reprocessing plants extracting plutonium."

Yet, as will be analyzed in Part 4 of this series, we will see that through the use of joint ventures, foreign holding companies, license transfers and majority subsidiary investment mergers, rubber-stamped by virtually all branches of the U.S. government, historically held energy law no longer remains the watchdog it was once meant to be. Therefore, the best interests of the American people are now marginalized and the future national security interests of the U.S. may be forever compromised.

Copyright ©2008 Diane M. Grassi
Contact dgrassi@cox.net

"Energy independence from foreign sources." A mantra repeated over and over again by those responsible for establishing United States energy policy. But it remains a contradiction in terms as the topic is never broached candidly by lawmakers as to how much of the U.S. energy infrastructure and lines of transmission have been consumed by a constant stream of foreign direct investors and diversified holding companies.

Also unbeknownst to most consumers is that legislation which led to such deregulation of U.S. public utilities is hailed from Wall Street to Capitol Hill as the answer to resolving U.S. energy woes.
Now, foreign investors have been granted even greater leeway as now realized by such mandates of the Energy Policy Act of 2005 (EPAct 2005) which essentially eliminated the Public Utilities Holding Company Act (PUHCA) of 1935. Yet, EPAct 2005 has continually escaped public scrutiny and a lack of accountability in both houses of the U.S. Congress.

U.S. energy policy and the generation of power is a complex web of public policy, law, economics, infrastructure and ever-present globalization. So for purposes of this report, and in order to best comprehend current U.S. energy policy, it is helpful to take stock of the more recent evolution of such and to examine its many and varied elements which have changed post-2005.

EPAct 2005 amended Section 203 of the Federal Power Act (FPA) which mandated how future transactions in the energy industry will be handled by the U.S. federal government and will impact matters of states' sovereignty and ultimately regulating costs to consumers.

For over 70 years, federal laws have played a vital and critical role in the operation, production, distribution and protection of the U.S. electrical power grid. Federal laws in concert with state laws and regulations have necessarily dictated that the power grid be shielded from market manipulation and criminal behavior.
Yet, the 100 year old power grid is faced with increased power demands simultaneously with deregulation by mandate. And deregulation has led to less and less necessary preventative maintenance, upgrades in technology as well as necessary investment in research and development.

The basic structure of the North American transmission system is made up of over 140 control centers and approximately 3500 utility providers covering over 200,000 miles. Utility generating plants, transmission and sub-transmission systems, distribution systems and customer loads traveling over a two-part power grid; one in the east and one in the west. Texas has its own grid.

Compounding the vast network and intricacy of the grid is the interconnectivity and delivery of power that in many cases is incompatible with widely varying levels of equipment integrity, data systems and personnel training. It is the secondary system which supplies the distribution of electricity to consumers, where most of the power failures occur, and that which require time to repair. And the network of sub-stations feeding electricity to neighborhoods, via feeders which flow to transformers, is where most problems arise during local outages, further exacerbated by ill-maintained equipment.

U.S. deregulation of the utility industry began over two decades ago, and it was the 1992 Energy Policy Act which changed the way electricity was sold to local consumers for the first time. Energy companies were permitted to install their own plants and sought customers throughout the country, but not necessarily in the same geographic region. Energy brokers then entered into the picture and utilized the open market to buy and sell power. And thus came the onset of potential unreliability of energy delivery.

Purchasing power from plants hundreds of miles away from a respective region put unprecedented burdens upon the transmission system, raising the likelihood of power failures at the local level. Most importantly, the U.S. electrical grid was not originally designed to absorb the transmission of high voltage capacity across the continent, especially in absence of comparable and upgraded systems in place.

Although Enron became the poster-child for electrical power market manipulation, which came to light after the rolling blackouts of California in 2000 and 2001, U.S. public policy and lawmakers must be held responsible for even further erosion of federal regulations and mandates now realized in EPAct 2005.
Instead of increasing the odds that such market threats would not reappear, the U.S. government has but relaxed the law, its regulations and oversight even more, with the repeal of PUHCA 1935.

PUHCA 1935 became law after the height of the Great Depression and after the stock market crash of 1929 and was a cornerstone of President Franklin D. Roosevelt's New Deal industry legislation. It called for the prohibition of market manipulation, specifically to curtail then super-sized utility conglomerates, and to prevent monopolies from overtaking geographic regions. And just as importantly, PUHCA 1935 made it unfeasible for non-energy corporations to purchase a public utility.

The emergence and formation of the Securities Exchange Commission (SEC) in 1934, together with PUHCA 1935 became essential in safe-guarding the public trust and in protecting consumers and investors alike, as PUHCA 1935 delegated multi-state utility ownership regulation to the SEC.

With the official repeal of PUHCA 1935, in EPAct 2005, the SEC vacated its regulatory authority over multi-state utility ownership by holding companies and only retains the ability to protect investors, not utility consumers and will carry little weight over multinational holding companies. It is the Federal Energy Regulatory Commission (FERC) that will now hold individual utilities accountable through self-policing and self-reporting policies of any irregularities such as cross-subsidization.

EPAct 2005 now allows multi-state transactions and mergers of distribution facilities, utilities merging with non-utility corporations, and including foreign ownership over domestic utilities. Oil companies may now own electricity and natural gas utilities, paving the way, yet again, for the formation of cartels. Construction and infrastructure companies, from abroad, are eager to partake in being afforded acquisition of U.S. public utility operations as well.
No individual state or federal agency will have the jurisdictional efficacy to regulate the finances of U.S. public utility assets. Required oversight of parent holding companies such as investment banks, which speculate and invest in far riskier businesses with utility rate-payer revenues, is not established nor mandated in EPAct 2005.

The cost? The reliability standards of U.S. public utilities, which could have grave ramifications on U.S. national security, the U.S. economy and the well-being and safety of the American people; all with the blessings of the U.S. Department of Energy (DOE), the U.S. Congress and the global stock market.

EPAct 2005 does set forth specific mandates, unprecedented with respect to U.S. energy law, states' constitutional rights and sovereignty, as well as interstate commerce. Specifically, Section 1221 of EPAct 2005 updates Section 216 of the Federal Power Act (FPA) for a National Transmission Congestion Study which paved the way for the mandated National Interest Electric Transmission Corridors (NIETC). The Secretary of Energy may designate "any geographic area experiencing electric energy transmission capacity constraints or congestion that adversely affects consumers as a national interest electric transmission corridor."

The DOE then created as a direct result of the study two transmission corridors which consist of the Mid-Atlantic Area National Corridor and the Southwest Area National Corridor and finalized in October 2007.
Many state governors, state representatives, many federally elected members of the U.S. Congress, consumer advocacy organizations, and environmental and historic preservation organizations, oppose such corridors.

The enormity of the construct of the Mid-Atlantic Area National Corridor will impact states legislatively, constitutionally, economically, environmentally and historically. The Mid-Atlantic Area National Corridor states include the entireties of New Jersey, Delaware, and Washington, D.C., most of Maryland, most of New York; most of Pennsylvania, most of West Virginia, and major areas of Ohio, and major areas of Virginia.

In contrast, the Southwest Area National Corridor includes parts of California and parts of Arizona, albeit the most heavily populated areas of these states.

The NIETC lays the groundwork for supplemental transmission siting approval in the construction of High-Voltage Direct-Current (HVDC) Transmission lines, above ground, throughout all the NIETC designated states, whether or not that particular state in fact has an electricity congestion problem itself. Additionally, the entirety of the U.S. power grid, as it presently exists, uses High-Voltage Alternating-Current (HVAC) Transmission lines.

Only 2% of the 200,000 electrical transmission line miles throughout the U.S. are HVDC. According to the Government Accountability Office Report of February 1, 2008, (GAO-08-347R) with respect to HVDC, there will be "higher costs for short-distance lines due to the cost of equipment needed to convert DC into AC electricity used by residents and a lack of electricity benefits to consumers living along these lines –unless converter stations are installed at intermediate locations – because such lines are generally not connected to local electricity lines."

The rationale for designation corridors is not to facilitate or dictate how the states' regions, transmission providers or electric utilities should meet their own energy challenges, according to the DOE. But the truth is quite the opposite.

"The process is geared more toward expediting the approval and siting of transmission corridors than it is geared toward respecting states' rights about their residents' energy future and needs…and by a heavy-handed centralized one-size fits all approach..," according to Congressman Maurice Hinchey (D-NY). And it is precisely such sentiments that have been raised to the Secretary of Energy, Samuel Bodman, by both federal and state lawmakers on both sides of the aisle in all 10 states and Washington, D.C. that will be directly impacted by the NIETC.

This EPAct 2005 legislation enables eminent domain law over states by the federal government on a scale unlike the U.S. has ever seen and is historically unprecedented, and with respect to the federalization of U.S. power transmission.

As such, the law provides for the DOE to assign the FERC siting authority. In other words, the U.S. federal government shall dictate to individual states the transmission of their own energy and by extension, the loss of state price controls. For state Public Utility Commissions always represented consumers and oversaw pricing and maintenance standards.

The FERC is given authority "to issue permits for the construction or modification of transmission facilities in a National Interest Electric Transmission Corridor if FERC finds that: (1)(A) a state in which the facilities are to be constructed is without authority to approve the siting of the facilities or to consider the interstate benefits expected to be achieved by the project; (B) the applicant for a permit is a transmitting utility that does qualify for a permit federally but does not qualify for a permit under state law because it does not serve end-use customers; or (C) the state has siting authority but (i) it has withheld approval for the later of one year after the filing of an application; or (ii) conditioned approval in such a way that the proposed construction will not significantly reduce transmission congestion or is not economically feasible."

And, "If a permit holder cannot obtain the necessary rights-of-way for the project, the permit holder can acquire the rights-of-way through an eminent domain proceeding in the federal district court where the property is located….A right-of-way acquired in an eminent domain proceeding is a taking of private property for which the landowner must receive just compensation, which is the fair market value on the date of exercise of eminent domain."

However, any fluctuation or rise in real estate property values during the course of the proceeding and including any period of time due to litigation arising from such a proceeding to the time of completion of the project, if finally approved, would be locked in at the fair market value of the initial date of the proceeding, which could potentially take years to resolve.

Historically federal jurisdiction of the siting of transmission lines in states has been reserved solely for federal lands within respective states. Again, it is the state public utility commissions of each given state which have otherwise been the regulators of siting permits and applications.

Reasonably understood is the anger and angst that states' governors and states' legislators feel having recently learned of the fate of their states' own power resources and transmission, and in such an injudicious way. In his letter to the U.S. Secretary of Energy, Samuel Bodman, in November 2007 after the NIETC was finalized, Pennsylvania Governor Ed Rendell wrote, "These transmission lines will be on our land and depreciate our property values, but they may not offer any benefit to Pennsylvania consumers. This designation and action by the federal government is a blatant abuse of states' rights."

Already the first official challenge to state transmission siting authority given to the FERC or federal government, as prescribed by such EPAct 2005 mandate, has been filed for appeal. A Southern California Edison (SCE) application to the Arizona Corporation Commission, (ACC) the public utility commission of Arizona, was rejected in May 2007 by the ACC. SCE merely wanted to run a 230-mile transmission line from Arizona to California at a cost of $242 million to Arizona ratepayers.

And the benefit to Arizona? None, as it would specifically serve only Californians and their growing energy needs, not the residents of Arizona. The ACC described SCE's project as "a 230-mile extension cord" into Arizona's generation supply.

This likely is just the beginning of struggles ahead, exemplifying a dysfunctional remedy, to "fix" the U.S. power grid's growing national energy needs and the need for alternative power resources. EPAct 2005 will create an ultimate power grab for power both literally and figuratively, the sights of which the U.S. has never seen.
Now, the U.S. justice system, by use of its federal courts, will bear the brunt of such misguided energy policy, in which the American people had no role. Meanwhile, the infrastructure and power needs of Americans remain at risk from both corporate greed and political intimidation.

Copyright ©2008 Diane M. Grassi
Contact: dgrassi@cox.net

Part 1 of a Series

"Energy independence from foreign sources." A mantra repeated over and over again by Al Gore, by the Hollywood elite and by candidates running for the 2008 Presidential nomination. But rarely is it ever pointed out how this phrase is but an oxymoron with respect to United States energy policy, which becomes ever more vulnerable, not just as the result of its failing infrastructure, but from misguided public policy decisions.

And never is the topic broached publicly in how much of the U.S. energy infrastructure and lines of transmission have been consumed by a constant stream of foreign direct investors and diversified holding companies. Also unbeknownst to most consumers is that such activity was hailed from Wall Street to Capitol Hill as the answer to resolving U.S. energy woes.

And now those very foreign investors have been granted even greater leeway as now realized by such mandates of the Energy Policy Act of 2005 (EPAct) which essentially eliminated the Public Utilities Holding Company Act (PUHCA) of 1935.

And in 2007, barely after the ink dried from EPAct 2005, the Energy Independence and Security Act (EISA) of 2007 was passed by federal lawmakers and signed into law. EISA conveniently serves to obfuscate critical issues that continue to stress the U.S. electrical power grid, its energy generation and transmission capacity. Yet, EPAct 2005 has continually escaped public scrutiny and a lack of accountability in both houses of the U.S. Congress.

But U.S. energy policy and the generation of power is a complex web of public policy, law, economics, infrastructure and ever-present globalization. So for purposes of this report, and in order to best comprehend current U.S. energy policy, it will be helpful to take stock of the more recent evolution of such and to examine its many and varied elements which have changed again post-2005.

In addition to the repeal of PUHCA 1935, EPAct 2005 amended Section 203 of the Federal Power Act (FPA) which will have an unprecedented and profound impact of its own on how future transactions in the energy industry will be handled by the federal government, impact matters of states' sovereignty and regulating costs to consumers.
For over 70 years, federal laws have played a vital and critical role in the operation, production, distribution and protection of the U.S. electrical power grid. Federal laws in concert with state laws and regulations have necessarily dictated that the power grid be shielded from market manipulation and criminal behavior.

But as the nearly 100 year old power grid has aged, facing a growing population and higher load demands for power, the industry has simultaneously become more and more deregulated by mandate. And deregulation has led to less and less necessary preventative maintenance, upgrades in technology as well as necessary investment in research and development. And the poorly maintained grid in many of the areas of the country, predominantly the mid-Atlantic and northeast states, has but put even more stress upon its transmission lines.

The basic structure of the North American transmission system is made up of over 140 control centers and approximately 3500 utility providers covering over 200,000 miles. Utility generating plants, transmission and sub-transmission systems, distribution systems and customer loads travel over a two-part power grid; one in the east and one in the west. Texas has its own grid.

Compounding the vast network and intricacy of the grid is the interconnectivity and delivery of power that in many cases is incompatible with widely varying levels of equipment integrity, data systems and personnel training. It is the secondary system which supplies the distribution of electricity to consumers, where most of the power failures occur, and that which require time to repair. And the network of sub-stations feeding electricity to neighborhoods, via feeders which flow to transformers, is where supposed problems arise during local outages, further exacerbated by non-maintained equipment.

But although deregulation of the utility industry began over two decades ago, it was the 1992 Energy Policy Act which changed the way electricity was sold to local consumers for the first time. Energy companies were permitted to install their own plants and sought customers throughout the country, but not necessarily in the same geographic region. Energy brokers then entered into the picture and utilized the open market to buy and sell power. And thus began the potential unreliability of energy delivery.

Purchasing power from plants hundreds of miles away from a respective region put unprecedented burdens upon the transmission system, raising the likelihood of power failures at the local level. Most importantly, the electrical grid, as it was originally envisioned, was never designed to absorb the transmission of high voltage capacity across the continent, and especially in absence of comparable and upgraded systems in place.

Although Enron became the poster child for electrical power market manipulation, which came to light after the rolling blackouts of California in 2000 and 2001, U.S. public policy and lawmakers must be held responsible for even further erosion of federal regulations and mandates now realized in EPAct 2005.

The initial most striking change that EPAct 2005 provides is the repeal of PUHCA 1935, now amended as PUHCA 2005, and now administered by the Federal Energy Regulatory Commission (FERC). PUHCA 1935 became law after the height of the Great Depression and after the stock market crash of 1929 and was a cornerstone of President Franklin D. Roosevelt's New Deal industry legislation.

It called for the prohibition of market manipulation, specifically to prevent then super-sized utility conglomerates, to prevent mega-mergers and to prevent monopolies from overtaking geographic regions. And just as importantly, PUHCA 1935 made it unfeasible for non-energy corporations to purchase a public utility.

Such abuses led to severe problems in the electric and gas industry in the 1920's and in the 1930's when three utility holding companies owned one-half of the electric utilities in the entire U.S. Thus, the emergence and formation of the Securities Exchange Commission (SEC) in 1934, which preceded PUHCA1935, and together became essential in safe-guarding the public trust and in protecting consumers and investors alike, as PUHCA 1935 delegated multi-state utility ownership regulation to the SEC.

Fast-forward to February 8, 2006, six months to the day of the enactment of EPAct 2005, when the official repeal of PUHCA 1935 was realized. As a direct result, the SEC vacated its regulatory authority over multi-state utility ownership by holding companies and only retains the ability to protect investors, not utility consumers or to prevent mega-mergers from consolidating. And now the FERC will assume cursory merger authority over generating plants and holding companies.

The repeal of PUHCA 1935 will not only allow multi-state transactions but also mergers of distribution facilities, utilities merging with non-utility corporations, and including foreign ownership over domestic utilities. Furthermore, oil companies may now own electricity and natural gas utilities, paving the way, yet again, for the formation of cartels. In addition, construction and infrastructure companies, especially those from abroad, are eager to partake in being afforded carte blanche in the acquisition of U.S. public utility operations.

In the post-PUHCA 1935 era, no individual state or federal agency will have the jurisdictional teeth to effectively regulate the finances of U.S. public utility assets totaling more than one trillion U.S. dollars. Nor will there be required oversight of such holding or parent companies such as investment banks from speculating and investing in far riskier businesses, with utility rate-payer revenues. ‒ We have already seen evidence of such with the current sub-prime mortgage loan crisis.‒

At cost? The reliability standards of U.S. public utilities, which could have grave ramifications on U.S. national security, the U.S. economy and the well-being and safety of the American people; all with the blessings of the U.S. Department of Energy, the U.S. Congress and the global stock market.

To be continued in Part 2 of a Series.
Next Up: Energy Department Uses Power to Trump States' Rights

Copyright ©2008 Diane M. Grassi

Contact: dgrassi@cox.net

The announcement on May 21, 2007 that the largest public company in the Middle East, by market value, would be acquiring a division of the world's second-largest corporation, by market value, and based in the United States, could not have been any less publicized. But in the world of corporate governance, the largest transaction ever completed in the Persian Gulf, seemingly trumps all laws of reason.

However, there is little precedence established for a foreign owned totalitarian government controlled corporation acquiring a corporate entity in the U.S. Such brings us to the General Electric Co. and the sale of its GE Plastics, based in Pittsfield, MA. It has been one of its most successful divisions for over half a century. It includes numerous U.S.-based manufacturing plants and research and development offices, with additional locations spanning 20 countries. Employees total nearly 11,000 worldwide, with several thousand located in the U.S. New operational control, however, will be via offices in Saudi Arabia.

The Saudi Basic Industries Corporation, known in the Middle East as SABIC, is one of the world's 10 largest petrochemical manufacturers and is 70% owned by the Saudi Arabian government, controlled by the Royal Saudi Kingdom and 5 other states of the Gulf Cooperation Council, including private Middle Eastern investors.
It employs approximately 17,000, worldwide, and shortly expects to be the new owner of GE Plastics in the U.S.

After GE Plastics was put on the market in January 2007, it got bids from Apollo Management, Inc., a U.S.-based private equity firm as well as Bassell, a Netherlands-based Access Industries plastics maker. Both proposed bids of GE Plastics were upwards of $10 billion. But it was the Saudi Arabian's offer of $11.6 billion in cash and the promise of future energy ventures with its parent company, GE, which gave SABIC the upper hand in the acquisition of GE Plastics.

Wall Street portfolio managers will liken those opposed to this deal, still pending approval by the U.S. government through the Committee on Foreign Investments in the U.S. (CFIUS), as protectionist, nativist and alarmist. And the U.S. has seen propositions like this before recently, such as the Bush Administration's desire in 2005 to allow foreign ownership of U.S. airlines; the proposal by the People's Republic of China's state-owned CNOOC in the summer of 2005 to acquire UNOCAL of California, the ninth largest oil company in the U.S.; Dubai Ports World, of Dubai Holding, a United Arab Emirates (UAE) government-owned corporation, and its buyout of the United Kingdom corporation, Peninsular and Oriental Steam Navigation Co. (P&O), for its port operations of six major U.S. East Coast ports in early 2006.

All of the aforementioned never came to pass, after much Congressional and public opposition, although the Bush Administration promises to revisit foreign airline ownership. However, Dubai Holding, the same UAE controlled company yearning to takeover U.S. ports was successful just months later in 2006 in acquiring the U.S. operations of Doncasters Group Ltd., a UK company based in Connecticut, and a manufacturer of precision aircraft engine parts for U.S. military and commercial aircraft engine parts manufacturers, like its competitor, GE Aviation.

GE claims that the prohibitive cost of petroleum, especially over the past year, has necessitated its sale if its plastics division, as it requires petrol for the manufacture of plastics and its various composites and resins. And although GE made a fair profit in 2006, it fell short of its 10% projected goal.

Less important to GE Plastics, however, is that there has been nothing firmly documented by SABIC, other than through verbal overtures, that they will continue to maintain GE plants in the U.S. According to SABIC CEO, Mohamed Al Mady, "We have no other plans at this time." On the other hand he notes, "SABIC's intention is to grow globally." At least one of the U.S. plants is non-union, that being the one located in Selkirk, NY and over the long haul questions remain as to whether or not SABIC will move all operations to Saudi Arabia, closer in proximity to its oil fields, or to China where it currently has petrochemical operations.

Questions must also be asked when it comes to the rights and wages of American workers, who will take directives not just from a Chairman of the Board but from the Saudi Royal Kingdom, which presently restricts the rights of women in the workplace in Saudi Arabia. They are only allowed to work, and in limited industries, provided permission is granted by a male relative. And although technically Saudi Arabia must obey U.S. laws pertinent to ownership of a corporation located in the U.S., cultural differences steeped in a totalitarian regime practicing Shariah law may not properly translate to the American way of life.

Additionally, SABIC would have to adhere to the regulations of the Environmental Protection Agency (EPA), such as the 1980 Superfund Law, holding corporate toxic waste polluters accountable. Such requirement is non-existent in Saudi Arabia or China. GE Plastics was mandated to clean up the PCB's in the Housatonic River in Massachusetts and GE the Hudson River years ago, both fighting the federal government for years until a settlement was reached with the EPA and the U.S. Department of Justice in 2005. Ongoing completion and monitoring of said cleanup still remains in both bodies of water. But will SABIC fulfill GE Plastics' obligations?

Founded in 1930 as a division of GE, GE Plastics arose from the initial results of Thomas Edison's experiments with the use of plastic filaments in the electric light bulb as early as 1893, followed by the success of its Bakelite® synthetic plastic created in 1909. The plastics industry, however, primarily blossomed after former GE CEO, Jack Welch, assumed control of the plastics division in 1960 and with the birth of its world famous patent Lexan ® polycarbonate.

GE Plastics specializes in plastic polymers, plastic composites and insulating resin polycarbonates, among others, used in both government and commercial sectors in nearly every industry including building and construction, transportation, aviation, auto body manufacture, defense, law enforcement, healthcare, telecommunications and computer and semi-conductor technologies. And it is doing business in such lucrative and specialized areas which SABIC opines. While its consumer product contracts are extensive, they are but part of GE's vast plastics' business portfolio.

SABIC was established by Royal Decree in 1976 as instituted by King Khalid Bin Abdulaziz, and the present Saudi Kingdom or government claims it has a hands-off approach to the business operations it owns. SABIC was originally set up to operate the hydrocarbon and mineral-based industry in the Kingdom of Saudi Arabia. It has had an operation named SABIC Americas in Houston, TX, for many years, which employs 200 and where it houses the SABIC Technology Center. Details on its exact business operations in the U.S. presently, however, remain scant.

Although the polycarbonate and plastic resin composites industry has been gaining steam over the past 10 years, in light of continual rising oil costs in the U.S. and continued U.S. dependence upon oil, primarily in the Middle East, it has quickened the pace of growth over just the past two years. And with less U.S. oil refineries expected to come online in the near future, in order to mitigate high fuel costs, lighter weight components are desired for automobiles, and commercial, transport and military aircraft in their manufacture.

GE commercial and military aircraft engines have long utilized polycarbonate composites for fan blades and fan cases, since 1995 with the GE90 engine, and the soon to be released GENX engine for commercial wide-bodied jets. Composites are not only light in weight, but corrosion resistant, heat resistant and their longevity and reduced maintenance, as opposed to metal parts, are preferable. Semi-conductor technology as well as use in watercraft, such as submarines, are other examples of the use of plastic composites. The historical integration of composites used in both military and commercial aircraft engines however, originally stemmed from military aircraft engine use of polycarbonate components.

Nevertheless, financial market experts as well as political prognosticators have already decided that CFIUS will give the SABIC-GE Plastics deal its seal of approval with no national security issues at all to arise. Therefore, the deal is expected to close in the 3rd quarter of 2007. And while GE Plastics may not be a direct contractor or supplier to either government or commercial entities, it still could have national security implications.

And it does not completely dismiss the fact that the U.S. government will be dealing with the Saudi Royal Kingdom-state government as it assumes the laws and regulations of the U.S. Any contracts which GE Plastics previously had and which remain active, with either its parent company GE or directly with other corporations or government agencies, would supposedly transfer to SABIC. Such government agencies for which GE Plastics could have existing contracts with are the Department of Transportation (DOT), the Department of Defense (DOD), the Department of Homeland Security (DHS), the Federal Emergency Management Agency, (FEMA), the Federal Aviation Agency (FAA) and the National Aeronautics and Space Administration (NASA), to name but a few.

And based upon the lack of underlying history of this more than unusual corporate arrangement, a more thorough review might be warranted by CFIUS, which is an inter-agency committee chaired by the Secretary of Treasury. Rather than its routine 30-day investigative period, it could self-impose the more thorough 45-day review process. For as much as the U.S. government as well as the government's industrial complex wishes to favor the promotion of global trade above that of national security, in an age of political correctness, the fact is, the U.S. military is engaged in two simultaneous wars in the Middle East. And it would perhaps be better to use more deliberation and discretion rather than to rubber-stamp such an acquisition.

The Exon-Florio Amendment, which emerged in 1988, amended Section 721 of the Defense Protection Act of 1950, as part of the 1988 Omnibus Trade and Competitiveness Act of 1988. The statute authorized the President of the U.S. to block or suspend a merger, acquisition or takeover by a foreign entity if there is credible evidence that a "foreign interest exercising control might take action that threatens to impair the national security" in the event existing law does not provide "adequate and appropriate authority for the President to protect the national security in the matter before the President."

Equally deceptive in the process, whereby foreign governments or foreign owned corporations purchase a U.S. owned entity is that they then become indirect stakeholders in U.S. public policy as well. They not only access capital gains but gain political clout on Capitol Hill too. Such opportune objectives of a foreign nation do not just begin during the corporate bidding process, however, but requires a methodology of lobbying dealmakers otherwise known on Capitol Hill as the U.S. Congress. To wit, the Saudi Arabian government spends $20 million annually to lobbying organizations and law firms representing them in order to gain exclusive access to lawmakers in advancing such financial interests or specific foreign trade policy agendas.

For example, former Secretary of State, James Baker, a senior partner in the law firm, Baker Botts, LLC, of Houston, TX, is legal representative to Saudi Prince Sultan bin Abdul Aziz, one of several Saudi persons, entities, Islamic foundations and financial institutions named as defendants in a pending lawsuit brought by the 9/11 Families to Bankrupt Terrorism.

And lastly, but no less important, in the last frontier of U.S. fire sale economics, concerns the type of financial instruments which will be used for the SABIC-GE Plastics transaction promising GE $9 million in cash, after taxes. In mid-2006, SABIC set up an Islamic finance arm to oversee its domestic Islamic bond issues. Since the United Kingdom is home to two Islamic banks, sukuks, or asset-based Islamic bonds, are readily marketed to international investors. SABIC plans to finance $2.2 billion of the GE Plastics deal by issuing bonds. The finance group and underwriters for the SABIC-GE transaction are the combined CitiGroup, Inc., HSBC Holdings Plc, Amro Holding NV and GE Capital, a division of GE, GE Plastics' parent company. Bonds are expected to be sold in Europe and in the U.S.

Of note, is that in April 2006, Dow Jones and CitiGroup launched the first Islamic Bond Index, created specifically to assess global bonds' compliance with Shariah investment guidelines. Shariah law dictates that such money be used for only those purposes compatible with Islam. But there are potential difficulties with such transactions in that they are specifically Shariah law compliant instruments and may conflict with U.S. law.

Presently, it has not yet been decided by SABIC if in fact it will exclusively issue Islamic bonds for the purchase. But the complexities involved in the GE Plastics sale is anything but straight forward and for that very reason is deserved of more scrutiny, analysis and caution from not only CFIUS but from the U.S. Congress.

And U.S. Congressional representatives should be far less mindful about critics' scorn and far more concerned with their dutiful obligation to govern in the best interest of the American people and their responsibility to use foresight in order to best preserve America's future and its assets.

Copyright © 2007 Diane M. Grassi
Contact: dgrassi@cox.net

On March 23, 2005, U.S. President George W. Bush, former Canadian Prime Minister, Paul Martin and former Mexican President, Vicente Fox, authorized the Security and Prosperity Partnership (SPP), now under the auspices of the U.S. Department of Commerce. Most Americans have little to no knowledge of this seemingly innocuous sounding unofficial treaty and therefore believe there is little reason to be alarmed.

However, what could be misinterpreted as legislation which has been scrutinized, and has gone through the proper channels of government could not be farther from the truth, in that the U.S. Congress has had no direct disclosure of nor has taken part in its execution.

Legally, a treaty would require a two-thirds majority of the U.S. Senate to concur for its ratification as determined by the U.S. Constitution. Cleverly, however, since the SPP is not a treaty, the President was able to avoid such a required procedure by using the power of the Executive Branch. And in August 2006, President Bush additionally crafted a Signing Statement to passed legislation declaring it Constitutional for his administration to withhold information from or deny authority required from the U.S. Congress on the SPP and its negotiations.

With the recent swell and frequency of free trade agreements being passed in the U.S. Congress in the past few years alone, seemingly rushed through without genuine debate or challenge, it would be easy for the public to assume that the SPP was authorized by Congress and thinking matters pertaining to it were in the best interest of the American people. And sadly, many U.S. free trade agreements do not directly better the workers of the countries involved, but are solely reserved for big business profiting from cheap labor, and foreign lobbyists and bureaucrats enriching themselves.

But the SPP is cleverly disguised as a boon for all three North American countries and its citizens, yet has lacked input or oversight from federal, state, or municipal legislators nationwide. The goals of the SPP agenda largely include a call for transparency and unprecedented cooperation with respect to all three governments' commerce and trade. The endeavor is to join forces in uniting as one competitive body in the global marketplace and to function as the North American Union (NAU), which at the same time whittles away at each country's sovereignty, its national security and its laws.

The facilitation of the SPP will stem from the use of the U.S. interstate highway system providing the roads for inter-continental and interstate commerce. For that to happen will require retro-fitting of existing interstates as well as building new roads, including gas and power lines, including light rail, from the interior of Mexico, through the central corridor of the U.S. and on into Canada.

Both the proposed NAU and NAFTA Superhighway are offshoots of the North American Free Trade Agreement, signed in 1993 by then President Bill Clinton. At the time it was sold to the American people and the Mexican government as a win-win for both peoples and would re-balance the flow of trade back to Mexico in order for Mexican workers to earn a living wage. But that never transpired and instead backfired, resulting in the onslaught of nearly 20 million illegal aliens since, illegally crossing the U.S. southern border, supposedly looking for decent paying jobs.

But to fully understand the evolution of the call for the need of a NAFTA Superhighway it is important to at least understand the recent history behind it. The introduction of free trade policy has morphed into a priority of the U.S. government today, even putting national security at risk in order to fulfill its agenda. It was the Reagan Administration's vision of free trade, a direct response to Japan's explosive growth and expansion in both the automobile and electronics industries in the U.S., which began to shift the balance of trade and the lopsided result we now have today with most of our trading partners.

And fifteen years since the passage of NAFTA has not only enabled the U.S. to globalize arguably beyond proportions in all areas of commerce, industry and trade, but it has helped to foster public-private partnerships, a benign term used to mask what are essentially foreign-direct investments. And foreign-direct investment has grown precipitously since 1988 when former President George H.W. Bush signed the Exon-Florio Amendment to the Defense Production Act of 1950.

It was also in 1988 when the President, through Exon-Florio, delegated his power to approve or disapprove such foreign acquisitions to the Chairman of the Committee on Foreign Investments in the U.S. (CFIUS), relieving the President of the responsibility in determining national security threats in foreign-direct acquisitions. Unfortunately, the definition of national security in a post-911 world remains too narrow to address protection of critical infrastructure, a scarce defense supply, or preservation of technological standards, among many other risks, unquestioned back in 1988.

The Exon-Florio Amendment authorizes the President to "suspend or prohibit foreign acquisitions, mergers, or takeovers of U.S. companies if a foreign controlling interest might take action that threatens national security." And the term "foreign control" remains ambiguous and decidedly so. The ramifications of the Exon-Florio Amendment reared its head when in February 2006 CFIUS, an arm of the U.S. Department of the Treasury, became widely recognized for its authorization of the Dubai Ports World to operate multiple East Coast port operations including the Port Authority of New York, and the ports of Baltimore and Miami.

The balancing act of national security and foreign-direct acquisitions has relegated national security concerns to that of an afterthought, as the Department of the Treasury's prime priority is expanding commerce in the global marketplace. Complaints about the secluded CFIUS process, however, predate the Dubai Ports World alarm bells of 2006. For it was in October 2005 when Senator Richard Shelby, (R) Alabama, called for hearings on the inclusion of Congressional oversight of CFIUS approvals. And it was prior to 2006 when Senator James Inhofe, (R) Oklahoma, lobbied for Congress to be able to reject CFIUS approvals.

As it stands, most every foreign acquisition sails through the approval process. Unless there is a 45-day investigation process after the required 30-day review by CFIUS, the President's approval is not required and thereby never reaches the Congress for any interaction or input. Between 1988 and 2005 only two foreign acquisitions were unapproved out of 1,555 reviews. Both were withdrawn and eligible for later re-instatement.

Many foreign entities seek out a "pre-screening" with CFIUS' member agencies, comprised of 12 departments of the U.S. government, if national security concerns are anticipated in order to mitigate the chances of non-approval and triggering the 45-day investigation.

The disparate interests of free trade and the protection of critical infrastructure, and in particular the U.S. highway system as well as public utilities, has given way to high-powered U.S. law firms and professional lobbyist organizations that lay the groundwork for foreign conglomerates to land foreign-acquisition contracts with cash-starved states amenable to foreign-direct investment.

Such is the case with the Trans-Texas Corridor (TTC), the brainchild of the Texas Department of Transportation (TxDOT) in concert with the SPP. It is a multi-billion dollar web of highway building, toll road maintenance, gas pipelines, public utilities and railroad contracts as complex and as multi-layered as the U.S. interstate highway system itself. A flurry of over 20 foreign acquisitions of interstate highway projects and toll road maintenance contracts have been approved since 2003 with many more nationwide working their way through state legislatures, such as that of the New Jersey Turnpike which Governor Jon Corzine believes is ripe for foreign funding.

But the TTC is the biggest and most massive highway building project of them all and for the first time will rely upon a foreign entity to not only maintain toll roads but to have a stake in building, controlling operations and tolls and expanding new roads and critical infrastructure. Additionally, eminent domain law will come into play in order to reconcile the taking of property and farmland for road expansion to accommodate pipelines and railroad tracks.

And much like the SPP planning, which took place behind closed doors, the TTC collaboration began in 2002 in Texas Governor Richard Perry's chambers, where state legislators and taxpayers were deliberately cut out of negotiations and the bidding process. Negotiations began with the Spanish engineering transportation construction firm, Cintra Concesiones de Infrastructures de Transporte, S.A., a subsidiary of the Grupo Ferrovial, which specializes in toll roads and car parks and considered a leading developer of private-sector infrastructure throughout Europe.

At the center of negotiations for multiple legs of the Superhighway Corridor throughout Texas, is none other than Rudolph Giuliani's law firm which landed the Comprehensive Development Agreement for a widening of Interstate-35, now referred to as the TTC-35, in addition to the Master Development Plans for State Highways 121 and 130 among other legs of the TTC. All negotiations for Cintra were and are presently handled by the law firm, Bracewell & Giuliani, LLP, of which Republican Presidential candidate, Rudolph Giuliani, has been a senior executive partner since March 2005. His law firm is the exclusive legal counsel for Cintra. Bracewell & Giuliani is comprised of 400 attorneys, based in Houston, TX with offices in New York City, Washington, D.C., London and Kazakhstan.

Cintra joined with San Antonio, TX-based Zachry Construction Corp. to help land the contracts, in which Zachry owns a 20% interest. The Cintra-Zachry proposal for TTC-35 includes a private investment of up to $6 billion in upfront payments for the complete construction, design and operation of a 316-mile toll road between Dallas and San Antonio, giving Cintra the right to set tolls and keep toll road profits for a period of 50 years, as it will for each road it has contracted.

The NAFTA Superhighway and its corridors will run from Southwestern Mexico through Laredo, Austin and Dallas, TX, into Kansas City, KA, serving as an inland customs port. The corridor will split in Kansas with one leg going to Winnipeg, Canada through Omaha, NE. The other leg goes to Toronto, Canada through Des Moines, IA, Chicago, IL and Detroit, MI.

As many as 10 lanes, one-mile wide will incorporate double rails and pipelines. The second corridor is planned from Brownsville to Houston, TX through Arkansas, Memphis, TN and into Norfolk, VA. While the principal use for these corridors is to speed Asian goods into the Central and Eastern U.S., it will require 145 acres of land per mile or 540,000 total acres of land. And in Texas, the state may utilize its own discretion in using eminent domain law in order to reach its goal.

Had gasoline tax revenues been properly allocated and solely reserved for highway projects over the years, neither Texas nor numerous other states would be as desperate for funds as they claim they now are, as many highway funds have been found to have been raided for other state projects and public funding.

The citizens of Texas only as recently as February 2007 began to attend state legislative hearings where many state lawmakers themselves were beginning to become familiar with the Cintra contracts. Several have called for a moratorium on at least the TTC-35 project, envisioned as a high-speed highway, until they can evaluate issues such as eminent domain, cost benefit analysis, environmental impact and homeland security ramifications.

Most interesting to the whole story is not only has Mr. Giuliani's involvement in the NAFTA Superhighway not ever having been publicly addressed, but how a foreign company is awarded the building of a mass highway system, versus maintaining it, for the first time in U.S. history, and negotiated by the law firm of the top Republican candidate running for President of the United States. And truly disturbing is how such will not only have national and homeland security and sovereignty implications but how it is deliberately being kept away from the Halls of Congress.

Giuliani fancies himself as an expert on homeland security issues and a law enforcer. And he has amassed quite the portfolio since 2002, earning $20 million in that year alone, by selling himself as such. He owns Giuliani Partners, Giuliani Safety & Security and Giuliani Capital Advisors. In March 2007 he sold Giuliani Capital Advisors, a former Ernst & Young finance company he purchased in 2002, to Macquerie Infrastructure Consortium. Not coincidentally, it is a partner of Cintra's in its shared operations of toll roads in both Indiana and Chicago, IL.

Bracewell & Giuliani represents some of the biggest multi-national oil, utility infrastructure and financial corporations both in the U.S. and abroad. With that have come the connections that Giuliani has been able to tap into for campaign donors, essential for his presidential bid, not only in Texas but nationwide, as he has become the consummate globalist. But more troubling than potential conflicts of interest as a public servant is his lack of compunction to secure U.S. borders and then planting himself squarely in the middle of one of the most controversial and historic highway system projects since the 1956 National Federal-Aid Highway Act.

Particularly unnerving, given Guiliani's personal experience on 9-11, is his defense of open borders at any cost while condoning the NAFTA Superhighway Corridor and by extension the North American Union, without the purview or consent of the U.S. Congress or the will of the American people.

We should have seen it coming when Giuliani enacted Special Order 40 in 1994, during his tenure as Mayor of New York City, in ordering law enforcement officers to no longer check the legal status of suspects caught violating the law. We should have seen it coming when Rudolph Giuliani single-handedly decided that illegal aliens were not lawbreakers and also quit upholding the law. And unfortunately we now do see it coming. But sadly, he may now actually be handed the opportunity to no longer defend and abide by the U.S. Constitution of the United States of America.

Copyright ©2007 Diane M. Grassi
Contact: dgrassi@cox.net

The tragic explosion of the Sago Mine in West Virginia on January 2, 2006, which took twelve lives and permanently disabled another, still begs for a rational explanation over 1 year later. The disaster captured the interest of the American public and fostered outrage on the part of lawmakers and bureaucrats alike, while coal mining operators ran for cover.

For not only did the International Coal Group, Inc., which owns and operates the Sago Mine, become the poster-child for unsafe mining practices, it became the source of questions which had not been publicly exposed for decades, while miners' lives remained in peril.

And questions linger as to why existing federal and state safety laws were overlooked by government agencies and regulations bypassed by the coal industry. Still, there was a knee-jerk reaction for more federal legislation rushed through the halls of Congress and various state houses where new laws were enacted in those mining states which lost miners in 2006.

The direct cause of the Sago Mine explosion has yet to be confirmed by the state of West Virginia, the federal Mine Safety and Health Administration (MSHA), the United Mine Workers Association (UMWA) and independent commissions with reports supposedly forthcoming. 2006 saw the largest percentage increase in U.S. coal mining deaths in 107 years, the industry's highest number since 1995, and more than double that of the 22 in 2005. Yet, explanations for such an increase are varied, depending upon which interested party provides them.

This writer wrote an extensive report one year ago regarding background on federal regulation of the mining industry, its lack of government enforcement, the industry's deregulation over the past several decades and the industry's accelerated recent growth which are all contributing factors to the decline in mining safety.

And although such may help give a historic context of the dysfunction, it offers no confidence whether or not coal mining is functionally in a better place 1 year after Sago. Heightened awareness of negligence, whether blind or intentional, is the first step to increased improvement, but there are many more required to assure miners and their families that their lives are in less danger and remain a priority.

Preliminary reports by the West Virginia Office of Miners' Health, Safety and Training (WVMHST), the International Coal Group, Inc., the MSHA and independent commissioned studies such as the Mine Safety Technology and Training Commission cite contributing factors to the loss of life in Sago Mine.

But without substantial scientific evidence, 3 bolts of lightning strikes remain the official cause for igniting methane gas causing the explosion. And such remains mere speculation and without foundation to mining experts and scientists alike. At issue, is how lightning could travel over two miles and 900 feet underground through twists and turns on its way to a closed-off section where the miners were located and cause the eventual explosion.

Additionally, the underground mine seals used for the walls were manufactured with materials unable to withstand the minimally mandated 20 pounds per square inch (psi). However, the sustained blast of Sago was 95 psi. Engineers are now experimenting with new composites able to handle over 95 psi. To date, there exists no credible material to handle such an explosion although the MSHA amended the requirement for mine seals to be 50 psi in 2006.

It was the loss of life at Sago Mine as well as the two subsequent West Virginia coal mining deaths but weeks after Sago on January 19, 2006 in a fire at Aracoma Mine, followed by the disaster at Darby Mine No. 1 in Harlan County, Kentucky which took 5 more lives on May 20, 2006, that resulted in the expedited federal Mine Improvement and New Emergency Response Act of 2006. President George W. Bush signed it into law on June 15, 2006. And just weeks after the Sago Mine explosion, West Virginia Governor Joe Manchin executed new mining laws on January 26, 2006 which followed his order for a special investigation by the state of West Virginia into causes of the Sago disaster.

By February 7, 2006 the WVMHST announced the provisions of its emergency regulations mandated by the legislature. They included providing emergency shelters within 1,000 feet of where miners are digging coal; inspection of air supplies daily and reporting results to the state; installation of caches of emergency air supplies equal to 30 minutes of walking time; wireless communication devices capable of reaching the surface through text, voice and by location.

Similarly, Kentucky passed legislation which became effective July 12, 2006 as it suffered a total loss of 16 miners in 2006. The law includes such changes as requiring mine managers to report a serious injury or fatality to state officials within 15 minutes, requires 2 air packs for each miner and provides for escape drills to be conducted every 90 days. Kentucky also now has the power to fine mine operators for violations and to increase from 2 to 3 the number of underground inspections annually.

Meanwhile, the U.S. Congress swiftly cobbled together its own revised mine safety regulations, the first since 1996, after its hearings on Capitol Hill in January 2006, following the Sago Mine explosion and the Aracoma Mine fire fatalities.

The federal law revisions include providing 2 hours of emergency air supplies per miner, plus caches of air packs with an additional 2 hours of air per miner. Previously, only 1 hour of air per miner was required. Mine operators must report a disaster within 15 minutes whereas previously there was no time limit. Two separate and protected communications systems are required. Previously only one was required. Wireless communication and miner tracking systems are required to be operational within three years of June 15, 2006.

Additionally, two experienced rescue teams must respond to mining accidents within 1 hour as opposed to the previous 2 hours and the development of training of emergency response and evacuation plans have been enacted. The MSHA has also added approximately two dozen more federal mining inspectors and mandates a change in its violation fee structure. Unfortunately, there remain less federal inspectors than the U.S. had in 1997.

The federal government is also now given the authority to request an injunction to shut down those mines which have refused to pay final violations. But the appeals process remains lengthy and during such process mines may remain open indefinitely, regardless of aggravated negligence. And the aggregate fines remain benign or seemingly small for an industry which set historic revenue records in just the first nine months of 2006.

"Dramatic changes in our mine safety laws will only protect our miners if MSHA is displaying real teeth in carrying out and enforcing our new requirements," this according to Senator Jay Rockefeller (D-WVA) on Capitol Hill with the MSHA in the first week of December 2006. He and Senator Robert Byrd (D-WVA), both predominantly responsible for the amended federal mining law of 2006, met with the MSHA and a bi-partisan committee in order to ensure industry compliance of the new law and to ask the agency if it has enough funding to implement the provisions of the new Mining Act and its safety measures.

As of January 2007, there are no new air packs available. Yet, mine operators believe they have satisfied the new regulation as the law only requires purchase orders, not receipt of air packs, as proof of compliance. Mine operators have been told that air packs are on back-order for 1 more year, although a German manufacturer has 6,500 units readily available. And the Self-Contained Self-Rescuers (SCSR) are the same type of devices used since 1977, when the first major underlying changes in mining safety laws were enacted.

But strengthening seals, improving breathing technology, building refuge chambers and creating communications and tracking technologies have thus far only been appropriated $10 million for the necessary research and engineering evaluations and thus remain to be implemented. And again, a new round of Congressional hearings on mining safety has been called for in 2007, this time by Congressman George Miller (D-CA), the new Chairman of the House Committee on Education and the Workforce.

Idly standing by waiting for the federal government to fund the necessary changes in the law or waiting for mine operators to police themselves in the meantime are both unrealistic and foolish premises. J. Davitt McAteer, former had of the MSHA (1994-2000) and now an expert advisor to West Virginia Governor Manchin, believes that, "Default steps or common sense while the industry waits for technology to be improved have not been taken." What caused the explosion and what caused the disaster, according to McAteer, are distinct.

The lack of explosion proof seals, defective air packs, lack of communication devices, delay in rescue response and non-existent tracking capabilities were preventative measure which could have been put in place long ago. And Cecil E. Roberts, President of the UMWA, has called upon the MSHA to regulate evacuations during the approach of electrical storms, as long as questions remain as to the exact cause of the Sago Mine explosion.

Sadly, on September 7, 2006, Sago Mine's operator, ICG, Inc., was again cited by the WVMHST for providing its miners with defective SCSR breathing apparatus. The devices had faulty heating indicators. 6 out of 50 had been exposed to temperatures over 130° F. Disturbingly, said violations only became public knowledge three months after they were served.

And already in this young 2007, two miners in West Virginia lost their lives on January 13, 2007 as the result of a roof collapse at the Brooks Run Mining Co.'s Cucumber, WVA mine. The Brooks Run mine had been cited by federal inspectors 65 times in 2006 with penalties totalling only $5,000.00. Although mine operators notified authorities immediately in compliance with the new mining law, little else has changed in 1 year's time. For as Cecil Roberts continues to preach, "When you put production ahead of safety, tragedies like this are all too often the result."

Copyright ©2007 Diane M. Grassi
Contact: dgrassi@cox.net

The ravages of war are hell and collateral damage that includes loss of life, permanent disability and war-related illness in both military and civilian populations is expected. But too often American soldiers have been stung by the treatment they have received with respect to their healthcare upon returning stateside.

Unanticipated by the United States Department of Defense (DOD), healthcare services provided returning soldiers from the War in Viet Nam and more recently the Gulf War were grossly under-funded, and the criticism that endured thereafter was a lesson thought to be learned for future U.S. military engagements. And in that effort, the U.S. military has been sure to launch continual public relations campaigns to project an image that active duty troops deployed to Operation Iraqi Freedom and Operation Enduring Freedom in Afghanistan receive the best healthcare that money can buy.

The Department of Defense's Deployment Health Clinical Center website reads, "Fostering a trusting partnership between military men and women, veterans, their families and their healthcare providers to ensure the highest quality care for those who make sacrifices in the world's most hazardous workplace." But when it comes to the mental healthcare status of troops during deployment and upon their return to the U.S., it is woefully lacking.

There is no longer a shortage of laws and regulations in place as existed during Viet Nam or during the Gulf War with respect to mandated healthcare screenings for returning soldiers. But a lack of political will by the Department of Veterans Affairs in concert with the DOD added to a lack of oversight by a lethargic U.S. Congress, has made life extremely difficult for soldiers with acute mental health problems or those hoping to avoid them by seeking help.

Multiple administrative dilemmas at play at once have impacted the quality of life for troops serving in Iraq and Afghanistan and upon their return. Immediately, due to a shortage of manpower, troops are now being re-deployed to battle as many as five times with less and less time to decompress between tours of duty. Were there not a need for so many bodies in the field, troops displaying emotional problems would be a liability and sent home for treatment.

Colonel Elspeth Ritchie, an expert in psychiatry for the Army's Surgeon General has insisted that the DOD still prioritizes the mental health of service members. But she admitted that, "Some practices, such as sending service members diagnosed with Post-Traumatic Stress Disorder (PTSD) back into combat had been driven in part by troop shortage." Absent of outwardly exhibiting symptoms of mental disorders such as PTSD, many troops fail to report their problems due to fear of retribution or are not aware there is a problem until they start acting out in other ways such as through drug or alcohol abuse.

Public Law 105-85, Section 762-767 enacted as part of the 1998 Defense Authorization Act was presented in 1997 in order to force the DOD to comply with both pre-deployment health assessment and post-deployment health assessment for returning soldiers as the result of healthcare problems them after the Gulf War. Through the filing of forms 2795 and 2796 respectively, their purpose is to trigger physical as well as mental health evaluations of troops. However, oversight of such examinations is spotty and the way in which the mental health assessment is recorded, if at all, is based upon the troop's own self-evaluation by way of answering 4 questions concerning PTSD symptoms.

The 1998 law requires evidence that face-to-face interviews are done upon demobilization, but the DOD has refused to turn over such documentation to the Congress, for the past four years, in order to verify that it has been adequately done. Therefore, all of the regulations in the world are of little use unless there is implementation of said regulations.

And leaving the care of returning soldiers up to themselves or their families is hardly the way system was set up to work. There are nearly 70 stories of soldiers who have committed suicide either in Iraq, Afghanistan or stateside since the inception of the War on Terror. There could be more since suicides are considered part of non-combat related casualties and such statistics remain sketchy. And in most of these cases, either the families of these soldiers had pleaded for help for their loved ones, fellow soldiers reported abnormal behaviors, or soldiers themselves confided in their superiors about their troubles. Unfortunately, too many never came forward at all, fearing stigmatization.

The military subscribes to the "watchful waiting" concept with respect to mental health problems. But when it concerns PTSD, symptoms often take 6 months to a year to manifest during which time a person may have already resorted to self-medication through illicit drugs or alcohol accompanied by violent or other self-destructive behaviors. Such presents more need for preventative assessments, not less.

For those troops who have requested face-to-face evaluations there are some areas of the country which have a waiting list up to a year and then there is often dispensing of anti-depressants, often by clinicians without any psychiatric training, without any accompanying counseling or therapy of follow-up. There is even a highly touted "telemental" therapy which troops can eventually utilize which is basically counseling by e-mail or instant messaging on the internet. It is hardly adequate for a person experiencing severe anxiety, night sweats, flashbacks, or bouts of paranoia.

A May 2006 Government Accountability Office (GAO) report found that four of five returning troops, potentially at risk for PTSD, were not referred for further mental health evaluation. Half of those eventually got help on their own but less than 10% were referred through the military. A September 2006 GAO report highlighted that the VA underestimated the cost of serving veterans upon return from Iraq and Afghanistan due to pre-war budget figures, yet still failed to report such problems to the Congress.

In December 2006 the GAO released an additional report which shows that the funds allocated to the VA for mental health have not been spent on mental health care accordingly. The report discloses that the VA has no system in place to track spending on mental healthcare and that funds may have gone to other resources instead. But such an indictment of the VA does not alleviate lawmakers of their oversight responsibilities, either.

Dr. Frances Murphy, Undersecretary for Health Policy Coordination at the VA said in March 2006 that there is a need for improvement for mental healthcare for an increasing number of veterans seeking help. She said, "VA clinics do not provide mental health or substance abuse care, or if they do, waiting lists render that care virtually inaccessible." "The VA needs more capacity so that vets can get treatment and don't have to wait," according to Paul Sullivan, a former senior analyst at the VA prior to April 2006 and now Director of Programs for Veterans for America, an advocacy organization.

Furthermore, while waiting to see a VA doctor, veterans with severe symptoms of PTSD are often denied disability benefits should they turn to illegal substances as a way to cope. They are then vulnerable to the categorization of "willful misconduct" since the military has a zero tolerance policy for drug abuse. And those who have received benefits are subject to losing them should they be found abusing drugs. Ironically, the VA is tolerant of alcohol abuse, just not illicit drugs. But even then, only if a medical doctor finds that the veteran also has been diagnosed with PTSD may they then continue to receive their disability benefits.

Veterans from the present and ongoing wars have been the best advocates for those presently active duty soldiers, reservists still on call and those now discharged. Such organizations and grassroot efforts have successfully lobbied lawmakers, attended and testified in hearings on Capitol Hill and in doing so have unearthed the inadequate access to mental healthcare for troops. And as typical of U.S. medical insurance plans, mental healthcare always takes a back seat to physical medicine. And it continues to remain the biggest hidden cost as the result of the War on Terror.

Yet through their plight for their brethren in uniform, former brothers in arms have proven that it is not always just a matter of throwing money at a situation to solve a crisis, as inadequate access to mental healthcare presents a crisis of its own. Certainly the invisible front line and a deceptive enemy have made for a war unlike any other that the U.S. military has previously fought.

Yet, much like prior wars fought by the U.S. armed forces, present and future veterans of the Wars in Iraq and Afghanistan will have not only fought for their health and survival on the battlefield but many must continue to fight to an ineffectual government for their continued survival. Certainly, it was to suppose to have been better by now, but sadly it is but another testament to benign neglect by those with the power to affect change.

Copyright ©2006 Diane M. Grassi
Contact: dgrassi@cox.net

For several years now, American healthcare consumers, including many from other western industrialized nations, have heard about elective surgeries being performed in lesser-developed nations and due to cost and denial of coverage by health insurance providers have opted to go there. However, surgeries in the past were truly elective and not medically necessary procedures that largely consisted of face-lifts, tummy tucks and gastric bypasses for cosmetic purposes.

But just in the past two years, American patients are being wooed to make decisions on serious medically necessary surgeries due to their fears of excessive healthcare costs. And the decision involves traveling abroad primarily to India and Thailand in order to receive such hospital care which they require.

For those self-insured, underinsured, or not insured at all, the desperation of receiving medical care without sacrificing homes or assets in the process is plausible, since costs of similar procedures in South Asia range from 75% - 80% less than in the United States. But now U.S. based corporations have entered the arena as well by encouraging employees to go to India and Thailand via cash incentives, free airfare and hotel stays with no co-pays due on the final bill.

Yet, just as with any large purchase consumers must look beyond the fancy advertisements and read the fine print with a Buyer Beware mentality. Americans have become quite adept at learning what to look for when dealing with car dealerships when purchasing an automobile and with computer retailers when purchasing a new computer. But it has taken many years to educate consumers as to their rights and protections under the law and what to do when something does go wrong.

The term "medical tourism" has been inaccurately applied to what is essentially the offshoring of patients of the U.S. healthcare system to foreign countries, in order to appeal to potential customers who are really medical patients. The term was invented by the media and it stuck and is now being used as a marketing tool. Deceptive in its concept, it is an implication that a patient can go sightseeing before or after a serious hospital procedure in that foreign country. But for those who are more scrupulous it remains difficult to get the necessary information needed to make a reasoned decision on whether to have surgery performed, let alone halfway around the world.

There are now organizations being touted as medical tourism agencies that have cropped up throughout the U.S. in order to facilitate such care overseas for individual patients as well as to serve as a clearinghouse for corporations wishing to outsource their employees' healthcare with them in tow. These groups include MedSolution, GlobalChoice Healthcare, IndUShealth, Planet Healthcare and Med Retreat, to name just a few.

And with more and more corporations adding select foreign hospitals as Preferred Providers to their employees' health insurance plans, medical tourism companies handle the paperwork and travel arrangements for their employees. Other countries of destination include Costa Rica, the Dominican Republic, the Philippines, Panama, Mexico, China, Malaysia, Singapore, Turkey and South Africa.

However, it is at this point that the patient needs to start their own due diligence. There is usually a requirement by most U.S. healthcare insurance providers for patients to get second opinions for most complicated surgeries in the U.S., but not so for offshore surgeries. And the list of surgeries which are being sent offshore are indeed medically necessary but confusingly being reported to the media as elective. But you can determine for yourself whether or not the following are elective procedures: cardiac bypass, cardiac stent implantation, cardiac angioplasty, knee replacement, hip replacement, mastectomy, hysterectomy, chemotherapy, eye surgery, vascular surgery, among others.

And as the medical tourism agency is only an intermediary between the client and the hospital as well as between hotels and airlines they do not provide any liability in the event that there is a medical complication or there is a mishap at the destination hospital. Furthermore, there are fees which could arise not documented by an employer nor agency which could require additional expenses upon the patient's arrival. And as a conduit between patient and hospital, the medical tourism business remains an unregulated industry in the U.S., without licensing requirements and with most managed by non-medical personnel.

Similarly, and unbeknownst to most U.S. patients is that the healthcare industry in India is highly unregulated. It was only in 2006 that regulations regarding the medical device industry, which includes surgical devices such as cardiac stents and orthopedic implants for use in hip and knee replacements, was mandated. Such call for regulation from the Drug Controller General of India (DCGI) only came about as the result of discovered defective drug eluting cardiac stents in 2004. And although hospitals have the option of applying for accreditation through the Joint International Commission established in 1999, a subsidiary of the Joint Commission on Accreditation of Healthcare Organizations, used for hospitals in the U.S., there is no such requirement to do so.

As of 2006 there are five hospitals in India which have JCI accreditation, renewable every three years. They include the three facilities of the Apollo Hospital group, the Shruff Eye Hospital and the Wockhardt Hospital. The Bumrungrad International in Bangkok is Thailand's sole JCI hospital. Singapore has over a dozen JCI hospitals however, and the Philippines has one. But the JCI accreditation only applies primarily to hospital management which although includes procedures to reduce risk of infection and disease and to ensure patient safety, it has no jurisdiction over the actual physicians performing surgical procedures.

The patient is provided limited information other than an introductory phone call to the intended physician and having medical records electronically sent to the doctor or hospital via the internet by the medical tourism agency. The patient has a choice of physicians, but unlike in the U.S. where there is easy access to a doctor's medical status by medical boards and organizations, other than knowing whether the doctor may have practiced medicine in the U.S., there is little information to come by. Without standardized protocols it is difficult for the patient to make a correct assessment.

When decisions on a patient's health is driven primarily by cost it can impair the decision making process. There is little argument that healthcare costs in the U.S. are bankrupting corporations and labor unions and deceleration of escalation is nary in sight. With the healthcare industry being 15% of the U.S. Gross Domestic Product and having risen in cost 75% for employers and 143% for employees since the year 2000, the system is broken. High malpractice insurance fees required by both employers and physicians, hospital deregulation and class action medical litigations have only exacerbated the problem.

Such high medical costs will only encourage limited access to healthcare for the middle class and ultimately result in less preventative care costing taxpayers more in the long run. The problem is not the medical care in the U.S., still considered the best in the world, but its delivery system. It is when Medicare and the health insurance providers became the decision makers and took that power away from the physicians that the system began to unravel. Added to that is the lack of restraint of costs by the pharmaceutical industry which charges U.S. patients more for its own medications than any other country in the world.

But as expensive as healthcare is in the U.S., there are legal and safety issues which are part of the American fabric which Americans very much take for granted yet expect but are not present in the undeveloped world. For example, there are few regulatory bodies such as the Centers for Disease Control, the Food and Drug Administration, the Federal Trade Commission, various medical boards, consumer protection laws, available legal experts and the court system. All serve as a net of safeguards offering remedies. But unlike a car purchase, medical care is a complicated undertaking in which there are no guarantees, yet there are areas of compliance which must be maintained.

Once the patient is in a foreign country there is little protection for redress and once that patient leaves the country should they need follow-up care such as therapy or if complications arise even during travel, they must seek medical care in the U.S. Secondarily, if the procedure is performed overseas, insurance providers or Medicare may not honor the additional required care in the U.S. Still, patients may decide to take the risks in addition to the inherent risks of any surgery, but should not be coerced into uninformed choices in order for their employer to save costs under the guise that they are helping to reduce the costs of U.S. healthcare in the long run.

In July 2006 the U.S. Senate Committee on Aging held a hearing called "The Globalization of Healthcare: Can Medical Tourism Reduce Healthcare Costs?" Its goal was to address the subject of medical tourism, its growth, safety of patients and possible regulation of the industry itself. Its Committee Chairman, Senator Gordon H. Smith, has asked that several federal agencies such as the Department of Health and Human Services, the Department of Commerce and the Department of State create an interagency task force necessary for lawmakers to reach informed decisions that healthcare consumers themselves cannot accurately make at this juncture regarding offshoring their medical care.

And among the labor unions, the United Steelworkers Union (USW) has publicly weighed in on this issue when it learned one of its union members, employed by Blue Ridge Paper Products, was going to be sent to India for gall bladder surgery simultaneously with shoulder surgery. Leo W. Gerard, USW International President, fired off a complaint dated September 11, 2006 to Congress by contacting the following committees: the House Committee on Education and the Workforce, the House Committee on Energy and Commerce, the House Committee on Ways and Means, the Senate Committee on Finance, and the Senate Committee on Health, Education, Labor and Pensions.

The goal is not necessarily to create more legislation but to establish guidelines. Perhaps Mr. Gerard puts it best when he states, "The right to safe, secure and dependable health care in one's own country should not be surrendered for any reason-certainly not to fatten the profit margins of corporate investors." He also contends to the Congress that "We remain steadfast in our commitment to rebuild a domestic healthcare system."
Let us hope that our government and healthcare providers can likewise make such a commitment by investing in the health and welfare of the American people.

Copyright ©2006 Diane M. Grassi
Contact: dgrassi@cox.net

This past July, former President Bill Clinton announced an initiative in conjunction with the William J. Clinton Foundation to fight childhood obesity. In that effort he has been negotiating for the past year or so with the three major beverage companies, namely Cadbury Schweppes PLC, the Coca-Cola Co. and PepsiCo. Inc., to decrease the sale of soda and sweetened beverages in public school vending machines.

Clinton hopes that with the help of the American Beverage Association to advocate the replacement of high calorie drinks with more water and juice drink choices available for sale in not only United States high schools but also in some middle schools. He hopes to expand the initiative to selected snacks manufacturers as well in order to encourage healthier eating amongst school-aged children. However, his enthusiasm for his new leaf on healthy eating since his double bypass surgery in 2004 falls far short of the mark in analyzing the underlying bevy of problems that contribute to childhood and adolescent obesity.

Perhaps Mr. Clinton's focus on his self-lauded vending machine deals will help illuminate the sad fiscal shape school districts are in across the country when forced to hinge their school budgets on the sales of soda and candy bars. For in fact over the term of the Clinton Administration vending machine sales and exclusive lucrative contracts with soda bottling companies increased exponentially. They became necessary according to school administrators and school boards nationwide as school budgets were tightened specifically during his tenure.

In an interview with Fox News' Greta Van Susteren in 2005, Bill Clinton stated that "You've got vending machines in all the schools that offer unhealthy foods and the local PTA gets a cut from the profits of the vending machine." Upon announcing his deal in July 2006 to get the beverage companies to dramatically decrease soda in vending machines and replace them with sports drinks, flavored waters and diet sodas in high schools by 2009, he still has not correctly stated the path of the realized revenues from vending machine sales in school districts. Either he is ignorant on the subject or chooses to be so.

Exclusive contracts with beverage and snack food manufacturers in the public schools exist under myriad sets of rules and regulations from each state to each respective school district. It is up to school boards, who volunteer school superintendents or principals to enter negotiations with corporate entities for vending machine contracts. They usually provide the biggest bang for their buck over any other kind of school fundraising efforts.

Such deals generally require a 5 to 10-year commitment from the school or school district where the beverage company or food manufacturer makes certain demands of the school in order to for them to receive a share of the sales revenue. Usually a school receives approximately 40% of profits provided they agree to signage on their athletic fields, advertising allowed on the machines and can guarantee a specific number of students within the school. Such deals can garner anywhere from $50,000.00 to $150,000.00 per year depending on the size of the school district.

But where Mr. Clinton is misleading is in his statement that the revenues go to the PTA or to extra-curricular activities which the PTA sponsors. For it is precisely exclusive contracts with beverage and snack food companies negotiated by the school districts or principals which must go into a general school fund and be used for a wide array of school expenses. With school budgets annually falling short not just for "extras" but for everyday school expenses, almost every school district is dependent upon vending machine sales in addition to school lunch a la carte food sales, snack bars and school stores which also sell food and snacks.

However, contrary to what most think, a school general fund pays for necessities such as school maintenance, computer wiring, classroom supplies, library books, supplemental reading programs, student assembly programs and even playground equipment. Art supplies, music classes and physical education considered "unnecessary" expenditures in most school board budgets are not part of all curriculums and very often are then dependent upon additional fundraisers by PTA's and student-run fundraisers.

The other issue of note which is not addressed by the food hawks or Bill Clinton, famous for his triangulating approach on issues during his two terms as president, is the lack of the facts regarding a multitude of problems which has called for cutting the fat and calories. Since there is presently only one state left in the U.S., that being Connecticut, which mandates daily physical education classes for elementary schoolchildren, it would appear that over the past 15 years as obesity has grown to 15% of school age children that there has been no focus on physical education, health and nutritional education and recess, by the federal government. And much of that time was on Clinton's watch.

It was not until the year 2000, during President Clinton's final year in office, that he rolled out a plan prepared by Health and Human Services Secretary Donna Shalala and Secretary of Education Richard Riley titled, "Promoting Health for Young People through Physical Activity and Sports." It provided 10 strategies to promote better health among young people with increased participation in physical activity and sports. It did not address physical education in the schools but rather extra-curricular and off-campus activities in conjunction with the U.S. Olympic Committee. Nor did either Shalala or Riley address the looming crisis of financing education through vending machine sales and fundraising while at the same time not requiring schools to provide physical education or daily recess for children, during their years serving under Clinton.

The latest excuse for the elimination of recess in elementary education has been pinned on the No Child Left Behind Act enacted in 2001, whereby principals and teachers claim that the standardized testing demands and its requirements have left little time for outdoor activities, thus less recess. Lawsuits and the fear of bullying, code for more lawsuits, is also at play.

Such begs the question again about real concern for the health of children who are cooped up all day and not given the chance to burn off excess energy and exercise while developing a good habit in doing so. One can only wonder about the habitual doling out of Ritalin, primarily to little boys, like the foreboding candy, by physicians upon the recommendation of school administrators. Perhaps if kids could run off their pent up energy they would be able to sit still longer in their seats without need of pharmaceuticals.

Addiction to sweets is one problem which does not address schools' addiction to vending machines and the sale of "competitive foods" which refers to food sold outside of the School Lunch Program but from vending machines or in a la carte lines in the school cafeteria or school store. These snack foods supposedly "compete" with the School Lunch Program foods as provided by the federal government. And as schools are trying to balance their budgets on the backs of granola bars or lower fat candy bars, each school loses nearly $4.00 per child should they choose to skip lunch, eat off campus, or bring their own. It is but one more irony not lost on school administrators either.

The amount of time now occupied by principals, now largely saddled with vending contract negotiations, fundraising organization duties and serving as in-house nutritional spokesmen is all time lost from concentrating on far more important decisions in educating our country's youth. And most administrators do not follow through on how much revenue is generated from sales, where and how much revenue is eventually spent on which programs, or how much the other fundraising groups' activities contribute to various programs. Yet to solely blame the principals for this required delegation is unfair. Rather, it would seem that school boards should be held more accountable by the public.

But given the disconnect between the federal government, the states, the localities and the various school districts where no mandates or regulations exist with respect to allocation of vending machine sales or fundraisers in schools, it will be difficult for a voluntary plan such as Mr. Clinton's to be successful. For at most school fundraisers most proceeds are still largely generated from the sale of foods with minimal nutritional value, known as FMNV's, where they are largely exempt from dietary restrictions.

Back in 1946 when the National School Lunch Program was established, its goal was to provide nutritionally balanced, low-cost or free lunches in participating schools for children of need. In 1975, the National School Breakfast Program was established, also based upon need, as a free or cost-reduced program for those wishing to participate. Neither program was set up in order for schools to subsidize school districts or to encourage bad eating habits. And neither program was concerned about child obesity as it did not exist at either time.

But physical education, class recess, health and nutritional education, engaged parents and common sense are seemingly a thing of the past. And literacy and scholastic excellence did not seem to suffer by taking class time for physical fitness. Clearly there is no easy fix, but sometime not so long ago the real priorities in public education coupled with the well-being of schoolchildren took a back seat to raising and misspending dollars by misguided bureaucrats. And if the nation is waiting upon beverage and food manufacturers in order to make decisions on behalf of our schoolchildren, as proposed, then we as a nation are in deep trouble.

Copyright ©2006 Diane M. Grassi
Contact: dgrassi@cox.net

"Prediction is very hard, especially when it's about the future."  Yogi Berra

Given the focus on the recent one-year anniversary of Hurricane Katrina by the media and government officials and its label as the most costly catastrophic disaster in United States history, there has been little focus on the nationwide impact the property and casualty insurance industry has started to impart on homeowners and businesses in a post-Katrina world.

There has been serious discussion about reforming U.S. insurance laws in the U.S. Congress since 2004, before four hurricanes battered the Florida coast and well before the Katrina and Rita storms hit the Gulf Coast in 2005. However, the insurance industry since Katrina is now not only fighting hundreds of individual and class action lawsuits in Mississippi and Louisiana in the wind v. water debate, but also advocating change in the event of future catastrophic events.

The McCarran-Ferguson Act, enacted in 1945, delegated sole enforcement of insurance regulations to the states, where it was believed better oversight would take place rather than federal government mechanisms. However, state regulators are not law enforcement agencies and do not have the benefit of the arm of the federal government in cases which are beyond their means. Now, many state insurance commissioners, members of the Congress as well as consumer advocacy agencies believe that the whittling away of consumer protections over the years and recent staggering premium hikes, with little public disclosure, builds a case for federal insurance legislation and industry reforms.

Since 1945 the insurance industry has enjoyed an antitrust exemption and the viability of that rule has been seriously discussed and revisited by the Congress. There have been state accusations of price fixing and price gouging along with collusion in the industry leaving consumers with little information about their homeowners and business property policies, with only the civil or criminal courts left for recourse. It is argued that the antitrust exemption only fuels such a scenario.

The proposed National Insurance Act of 2006 (S.B. 5209) introduced by the Senate Banking Committee on July 11, 2006, would allow insurers to be licensed under a federal umbrella license, to choose between federal or state regulation and to do business in any state without need of state licenses. The U.S. Department of the Treasury would then have jurisdiction to regulate such national insurers. Arguments against such an arrangement cite more endless bureaucracy and red tape with fears that individual states would not be equally treated.

Alternatively, the State Modernization and Regulatory Transparency (SMART) Act introduced in 2004 addresses market conduct, licensing and antifraud data exchanges but has failed numerous times to move through the legislative process. It would leave regulation up to the states but to comply with uniform standards without federal oversight. The attempt to "modernize" the regulatory framework of the insurance industry has become synonymous with deregulation and appears that resistance on both sides of the argument makes reform more and more insurmountable along with immense struggles to provide sufficient delivery of adequate insurance for property owners.

The repeal of the McCarran-Ferguson Act has also caught the attention of the Senate Judiciary Committee which held a hearing on the issue on June 27, 2006 for the first time since 1994, precipitated by numerous complaints of less and less public disclosure of information and devices used for premium calculations. Such has impeded consumers from making a proper decision when purchasing policies. Travis Plunkett of the Consumer Federation of America (CFA) testified that "Insurers want competition alone to determine rates, they say. How about a repeal of the McCarran-Ferguson Act to test their desire to compete under the same rules as normal American businesses?"

The CFA has also called for regulation to ensure consumers have availability of enough information in order to compare pricing of policies between insurers in order to make informed decisions. Unlike the way most consumer service products are purchased, insurance costs are based upon a non-finite uncertain condition to happen some time in the future. And consumers must rely solely upon the agent, especially when actuarial tables and insurance models are non-accessible. Thus, more scrutiny not less has been called for.

But deregulation has also brought about insurance products sold worldwide as investments and annuities and reinsurance companies which provide catastrophic coverage for domestic insurers primarily are located overseas. Therefore, in a global economy, federal oversight is far more necessary than in the past. Leaving global oversight up to state regulators is arguably negligent given the ramifications of lack of coverage during a catastrophe.

The insurance industry itself has been campaigning for some type of legislative reform to provide for a federal catastrophic fund which would subsidize insurers in cases of terrorism and natural catastrophes. The American taxpayer and consumer have gotten their fill of that, however, where the Federal Emergency Management Agency (FEMA) has been and continues to pay out damages to the Gulf Coast states and primarily the City of New Orleans for rebuilding costs, with FEMA's National Flood Insurance Program (NFIP) to homeowners and businesses and for FEMA housing costs for the displaced.

But an unexpected phenomenon followed the 2005 hurricane season and is primarily fueling the fires for insurance reform and that is the record high premium rate hikes on homeowners as well as commercial property policies. In addition, hundreds of thousands of policies are being dropped and non-renewed by the country's two largest insurance companies, namely State Farm Insurance Co. and Allstate Insurance Co., from the Gulf Coast all the way up to the tip of Maine.

Even more unexpected, however, were renewal denials for inland properties for policyholders in the Northeast including New York City, where property owners have never even previously filed a claim for property damage. With premiums on the Gulf Coast having at least doubled since 2005, thousands of dollars have been added to mortgage loans. In some cases, many homeowners policies were not renewed at all, preventing homeowners from obtaining mortgages or rebuilding at all.

With insurers' withdrawal from writing homeowners policies throughout regions of the U.S. and gutting those with less and less coverage for those in place, the industry believes it will be able to stay healthy. Astonishingly, in 2005 it made a record profit of $45 billion post-Katrina and after four storms in 2004 it realized a profit of $38 billion.

The models associated with risk management amongst insurers are also changing. The 100-year average of history for forecasting future hurricanes, for example, is presently being revised. And as those methods of calculations become murkier, homeowners can hardly feel safe or comfortable when purchasing new properties. There are also several states which only allow for the issuance of property insurance based solely upon a consumer's credit history and income which makes it far more difficult for the working class consumer to be able to purchase insurance.

Over the next year, 43% of the U.S. population which covers 18 states can expect their policies to either be dropped by their insurance carriers or have their premiums escalate between 20% and 100%. And for that reason alone it might be time to reel in an industry which not only is in business to make a profit, but also has a moral obligation to help protect communities nationwide and such becomes necessary in the face of absolute destruction.

Copyright ©2006 Diane M. Grassi
Contact: dgrassi@cox.net

For the past 70 years, federal laws have played a vital and necessary role in the operation, production, distribution and protection of the electrical power grid throughout the United States. Federal laws in concert with state regulations have ensured that the power grid not be subject to criminal behavior and market manipulation, for most of that time. However, over the past several years, the fragility of the power grid's infrastructure combined with mandated deregulation of the utilities industry has seen less necessary routine maintenance, upgrades in technology as well as necessary investment in research and development.

While it seems that most everyone believes that the power grid woes culminated with the rolling blackouts of 2000-2001 in California, the initial concerns with major outages go back to November 1965 when power went out from New York City, New York state, all of New England and parts of Pennsylvania. That outage however was not caused by insufficient capacity, but a surplus of capacity which the New York grid was unable to accept from the interconnected New England grid.

The excess supply during the '65 blackout was too much of a surge for most of the utilities whose power went out for over 30 million people. It was not a supply problem but insufficient line capacity. In 2003, 50 million customers were without power for almost the entire Northeast. Again, it was not lack of supply but a downed power generator near Cleveland, Ohio combined with a downed line from lack of tree trimming which failed to provide full capacity for the areas' needs; a domino effect of failures, human error and lack of compatibility of computer programs. In addition, some competing generating companies did not share data and there was a failure by the Ohio utility to be able to interpret computer data they did receive outside of its local geographic region.

In 1968, the North American Electric Reliability Council (NERC) was formed by the federal government in response to the 1965 blackout to serve as a watchdog group for monitoring operational compliance of the national electric grid. In 1972, the Electric Reliability Institute (EPRI) was formed to help in delivering high-value technological inroads through research and development. Yet, it has been recently and incorrectly reported that the NERC was just recently formed to comply with the 2005 Energy Policy Act.

The "energy crisis" in California has now been well-documented that there was not a shortage of power but a manipulation of the electricity market which was to blame. However, the federal government must bear some of that blame due to the exemption of federal statutes which holding companies such as Enron were able to overcome in its blind greed.

Once again, the heat wave of the summer of 2006 has resurrected the age-old question of power production in the U.S. But equally as revealing is the non-disclosure of the basis for the primary problems with the grid's operational capacity. While transmission lines were added since 1965 and nuclear reactors proliferated in the U.S. primarily in the 1970's as national growth ensued, little has been done to ensure the reliability of the local infrastructure of the power grid. Its accountability has been based upon a good faith measure. And most consumers have no idea that the divestiture of their utility companies nationwide contributed to their now captivity by several holding companies in many cases owning their once reliable power provider.

While the 2005 Energy Policy Act, has been rolled out as a cure-all to ensure compliance with reliability standards and a preventative to market manipulation, it is far from what it has been touted to be, with some of its provisions given a grace period of 18 months since its passage August 8, 2005. Yet, it is necessary to grasp a basic understanding of how the system provides power to your home in order appreciate the grid's remaining unaddressed flaws.

The basic structure consists of a control center which monitors the utility's generating plants, transmission and subtransmission systems, distribution systems and customer loads. With 140 control centers and 3,000 utilities combined over essentially two power grids one east and one west as Texas has its own it is an overwhelming task. The interconnectivity and delivery of power in many cases is incompatible with widely varying levels of equipment, data systems and personnel training.

It is the secondary system which supplies the distribution of electricity to consumers where most of the failures take place and require time to repair. The network of substations feeding electricity to neighborhoods via feeders which flow to transformers is often where supposed problems arise during local outages. And then there is the inadequacy of often aged equipment, such as in New York City, which has cables, feeders and circuit breakers anywhere from 30 -70 years old.

But the source of bottlenecks stem from a provider inflicted problem relative to the 1992 Energy Policy Act which changed the way in which electricity was sold to local consumers for the first time. Utility companies were allowed to install their own plants and sought customers anywhere in the country and not necessarily in the same geographic region that historically provided the grid with its reliability.

Energy brokers entered the picture and utilized the open market to buy and sell power. And thus the market's restructuring had a direct correlation between the industry buying electricity from plants hundreds of miles away putting unprecedented burdens upon the transmission system and raising the likelihood of blackouts. The grid, as it was established, was never designed to absorb the transmission of high voltage across the country without the comparable and upgraded systems in place.

Although Enron has become the poster child for manipulating the power market, the industry and the federal government must be held responsible for even further erosion of federal regulations and of the industry as now provided by the 2005 Energy Policy Act. It provides for Federal Energy Regulatory Commission (FERC) to appoint the NERC to now be certified as a regulatory agency as opposed to its former role as voluntary watchdog. However, the Security Exchange Commission (SEC) which always was responsible for signing-off on mergers and takeovers in the utility industry will now relegate its role to the FERC. So instead of more oversight, there in fact will be less for mergers of holding company acquisitions within the electricity delivery system.

The other landmark change in the 2005 Energy Policy Act is the abolition of the Public Utility Holding Company Act (PUHCA) of 1935. Specifically, it repeals restrictions on ownership of electric and gas utilities. Not only will the SEC no longer have a role in the power industry, but repeal of PUHCA will no longer limit the variety of businesses that may be owned by holding companies purchasing utilities. Formerly, holdings of a company were required to be specific to the operation of a utility. And further, requiring that a holding company's utility operations be primarily located in a single or contiguous state has also been repealed. Additionally, any foreign country or foreign government is open to buy U.S. utilities and no longer subject to SEC OR FERC review.

The reason for the restriction of PUHCA for a company to limit its holdings was paramount in ensuring the integrity of the power grid for the public good. The idea was preventative in disallowing a company owner from taking profits from the power company to be used for maintenance, staff, or upgrades and then invest them in another far more risky business, with less of a rate of return. The customers lose and there is no guarantee of service.

What has already become evident in the past several months since the 2005 Energy Policy Act was revised is the direct foreign investment of utilities. Many have been former bankrupt utilities such as Montana Power which Northwestern Power Co. now owns, providing service to Montana, Nebraska and South Dakota. It accepted a $2.2. billion bid in August 2006 by Australia's Babcock & Brown Infrastructure after rejecting several domestic public power companies' offers.

Similarly, Macquerie Infrastructure & Diversified Utility & Energy Trust of Australia plan to purchase Duquesne Light Holdings based in Pittsburgh, PA for $2.36 billion. National Grid, a London-based holding company received approval in July 2006 to purchase KeySpan Energy. This is National Grid's fifth U.S utility purchase. KeySpan provides service to New York state customers outside of New York City. National Grid will provide $7.3 billion for its purchase of KeySpan. It previously was approved to purchase four other utilities in the upstate NY area and Massachusetts. All buyouts supposedly will be reviewed by the Committee For Foreign Investments in the U.S. (CFIUS) and must be reviewed by state Public Service Commissions.

In light of the changes in the law, the volatility of the transmission lines and local upkeep of the local power infrastructures compounded by the distancing of consumer disclosure both figuratively and literally, will put more pressure upon the state Public Service Commissions to seek a larger and more vigilant role in pursuing utility accountability. While on paper it may appear that the NERC will have the ability to penalize companies who do not comply with standards, it will be overwhelmed given its history of voluntary oversight. And many in the industry believe that the FERC will be forced to cherry pick and manage oversight of fewer mergers and acquisitions than were done in the past.

And while consumers should always make an effort to conserve energy, the systemic problems of this aging electrical grid are far more about balance sheets and politics than about adjusting the thermostat. Get out the candles and make a wish.

Copyright ©2006 Diane M. Grassi
Contact: dgrassi@cox.net

Nearly an entire year since Hurricane Katrina devastated the U.S. Gulf Coast, leaving behind extensive damage to several states and the city of New Orleans, most would think that recovery is well underway. While Mississippi has faired far better than Louisiana, with less residents impacted, New Orleans remains troubled. Suffering flood damage in 80% of the area from the ravages of Hurricane Katrina, compounded weeks later by Hurricane Rita, New Orleans has far greater obstacles to overcome than most had ever expected.

New Orleans is not in a rebuilding mode, but rather in a reconstruction mode. It has not only been victim of hurricanes raging out of control but a government out of control, thus the creation of a perfect storm. With a city history steeped in political corruption, a high crime rate, a high poverty rate, in educational decline, the hurricanes of 2005 allowed Americans a peek behind New Orleans' proverbial curtain. And it exposed the open wounds of a city now with twice the task of rebuilding, as it was in a downturn well before its levees broke.

So far over $20 billion has been allocated by the federal government to assist in New Orleans and Gulf Coast restorations. Yet, such appropriations do not solve the most desperate problem New Orleans faces which is the restoration and reformation of its levee system. It remains crucial to New Orleans' future or its chance to even have one. And to that end, it will not only take the brawn of the Army Corps of Engineers but its candor as well, in spite of its less than forthcoming past.

A nine-volume report with some 6,113 pages, costing some $20 million, was prepared by the Army Corps of Engineers at the request of the Congress on the status of the Louisiana coast's levee system. It became preliminarily available to certain lawmakers on June 1, 2006 and was delivered on July 10, 2006 to the Congress. Surprisingly, its final draft is not due until December 2007. Its purpose was for the Army Corps of Engineers to come up with a plan in order to protect Louisiana's coast and infrastructure from a category 5 hurricane. Now, even the stated purpose of the report is in contention and has caused conflict.

Objections as to the content of the draft report have been raised by Louisiana Governor Kathleen Blanco as well as U.S. Senator Mary Landrieu (D) LA, setting the backdrop for heightened frustrations which will remain throughout this process of what appears to be a series of unending dilemmas. The Army Corps of Engineers did acknowledge, however, in its report that the levees it built had flaws in their design, construction and maintenance of the 350-mile levee system.

It was divulged that the levee system was never built to handle a hurricane even close to the strength of Hurricane Katrina's which was a category 3. According to the report, "The hurricane protection system in New Orleans and southeast Louisiana was a system in name only." The report's investigators found that the flood protection, consisting of a network of levees, floodwalls, pumps and gates were to provide the necessary protections and should have been far more resilient. Due to design flaws, breaches were suffered in the New Orleans' drainage canals which were never foreseen. Even though the waters did not rise above the height of the floodwalls, they still failed.

Given the voluminous size of the Army Corps of Engineers' report, it has been criticized as to its skeletal and scant recommendations for the coast's restoration. It does recommend that as much as 98% of the levee system impacting New Orleans will require a great deal of work in order to raise the height of the levees. The Army Corps of Engineers is presently still studying the requirements for increasing levee heights and to ensure stability for such changes. But it is also dependent upon the Federal Emergency Management Agency (FEMA) to provide the necessary information for doing so. Sadly, it is not expected the increase in the height of the levees will be finished until at least 2010.

And although the report identified key pitfalls of the current levee system, it does not go into depth about the necessity of the restoration of the coast's wetlands and marshes, badly eroded and largely ignored over the years as well. Their restoration remains critical in providing a further barrier in order to mitigate flooding into the city of New Orleans. The report revealed that the city was sinking a lot faster than anyone had expected, and as much as an inch per year in some areas. In spite of outcries from local officials and outside scientists and engineers, nothing over the decades had been done to address the wetlands or to maintain the levees.

And like most problems, one entity, and in this case the Army Corps of Engineers, cannot shoulder all of the blame given the inertia of state and local officials over the years. But the question is not how much money the federal government is going to throw at New Orleans but how to avoid even more misspending. For at stake is the reliability of the integrity of the levee system. And without such a plan there will not be a dependable levee system and New Orleans cannot be realistically rebuilt nor attract investors to help restore it.

The flood plain map has now been revised by FEMA and is now available for federal flood insurance purposes and for homeowners to decide whether they are now indeed in a flood plain. Many houses which were flooded were never even in the original flood plain maps. And many homeowners with houses damaged by wind are in litigation with insurance companies that have blamed flooding on such damage. This leaves most homeowners awaiting payment from the partial amounts insurance companies will pay with remaining mortgages on houses which are beyond repair, yet without the money to rebuild or relocate.

Astoundingly, the present water system in New Orleans is losing close to 85 million gallons of water each day due to its vast number of leaks. So far, 17,000 leaks have been repaired, however, many still remain. The city is pumping 135 million gallons of water through 80 miles of pipeline a day in order to utilize 50 million gallons. Therefore, water and energy are seriously being wasted at a cost of $200,000.00 per day. The estimated cost to complete the pipeline leaks is $1 billion. Presently, there are no state or federal appropriations for the city's pipeline.

Also pending in the Congress, which could have huge ramifications for the levee system's repair, is the Water Resources Development Act. It has been shelved in both the House of Representatives and the Senate since April 2005, well before Hurricane Katrina hit U.S. shores. The legislation provides for the authorization of funding for Army Corps of Engineers projects.

To date, the Army Corps of Engineers has a backlog of $58 billion in projects nationally, going back 10 years. And the legislation as originally drafted does not provide for a prioritization for its projects. Therefore, the McCain-Feingold amendment was introduced in the Senate this year precisely to provide for a priority schedule and time-frame for projects most in need. It would expedite restoring the levees of New Orleans. But the Congress must vote and approve the amendment which takes time. And it could jeopardize putting lofty pork barrel projects presently included in the bill on the back burner. Thus far, the amendment has not been widely embraced by the Senate.

While the tragedies of Hurricane Katrina gave Americans a bird's eye view into a system of failures on the local, state and federal levels, it more importantly showed that the system of communication between levels of government is broken. Promises have since been made and monies appropriated to correct such deficiencies but the same backroom deals and lack of transparency are ripe to be repeated.

Americans across the country and people across the world were stunned to see the abject poverty which existed in New Orleans. But even more dismaying a year later is the lack of progress in New Orleans with respect to basic and human services and improving its infrastructure. For New Orleans is no longer a city in decline, but now a city in decay. And ultimately America needs to decide now, before the next natural or manmade disaster, of whether it will allow such deterioration and ruin to ever persist again.

Copyright © 2006 Diane M. Grassi
Contact: dgrassi@cox.net

For the last quarter of 2006 United States Army bases stateside face a funding deficit of $530 million while troops active in Iraq and Afghanistan will not see the promised replacement levels of military equipment previously committed. Additionally, payroll for active-duty troops is short $1.4 billion while the Army Reserve and National Guard face a $500 million deficiency.

The Installation Management Agency is responsible for overseeing the funding for 117 Army posts in the U.S., Europe and Asia. Garrisons of the posts administer the services the post receives such as mail delivery, garbage removal and firefighting while contracting services for dining halls and grounds maintenance. In order for many services to be provided, both temporary and term personnel are sub-contracted by the garrisons. However, in early June 2006, Installation Commander, Col. Kenneth O. McCreedy, mandated major cuts in services on all Army bases at least until September 30, 2006, when the 2006 fiscal year ends.

The reduction in services includes a 100% civilian hiring freeze; the release of temporary and term employees as quickly as possible unless vital for the support of life, health, safety and the Global War On Terrorism; development of spending plans by commanders for Fiscal Year 2007 based upon such reduced services; cancelling or reducing contracts until October 1, 2006. Garrisons have also reduced vehicle usage by as much as 20%, and cut cell phone and paging services.

However, other costs simply cannot be deferred or eliminated such as electric bills. Fort Sam Houston of San Antonio, TX has not paid its monthly $1.4 million electric bill since March 2006, with many of its administrative buildings receiving disconnect notices. Fort Bragg in North Carolina has a moratorium on buying pens, paper and other office supplies and equipment. Fort Knox, Kentucky closed one of its eight dining halls. Other bases shut down swimming pool facilities, due to chlorine costs, used for training and exercise by troops and their families. Even pest control has been considered a non-essential expenditure at some posts.

President Bush signed the Emergency Supplemental Appropriations Act for Defense, the Global War on Terrorism and Hurricane Recovery 2006 on June 15, 2006, in the amount of $94.5 billion for such emergency spending. Although it provides the Department of Defense with $66 billion, most of it is allocated for military expenditures for the ongoing costs of the War in Iraq and Afghanistan.

Out of the defense funding in the supplemental act, $43.5 billion is for military operations, with $17.6 billion designated for replacing worn out equipment on the battlefield including night-vision equipment, vehicle armor, mortar and rocket jamming devices and other counter insurgency measures. Heavy trucks and Humvee replacements are to be factored in as well. $4.9 billion is for the training and equipping of Iraq and Afghanistan security forces, $1.6 billion is for strengthening the Iraq and Afghanistan economies, $66 million is for promoting democracy in Iran and $393 million is for peacekeeping efforts and humanitarian aid in South Sudan and Darfur.

Also included in the authorized supplemental spending is $19.8 billion in aid for the U.S. Gulf Coast rebuilding effort, $2.3 billion goes to anti-avian flu programs and $1.9 billion is for border security including sending 2,500 National Guard troops to the southern border by August 1, 2006. But what was not clear when $1.9 billion was allocated for border security was that $1.6 billion of it was taken from funds specifically reserved for military equipment replacement.

The Office of Management and Budget (OMB) requested the change upon such directive from the White House but without consulting the Army or the Marine Corps. In a last minute amendment sponsored by Senator Bill Frist (R) TN and Senator Judd Gregg (R) NH, $1.9 billion was transferred from the emergency war supplement to the Department of Homeland Security. However, not realized by most in Congress is that the $1.9 billion is to be reimbursed by the Pentagon's very own budget for the war. That very funding was earmarked for the replacing of trucks, jammers and radios on the battlefield as dictated not by the Pentagon but rather the OMB.

For the Marine Corps alone, yearly costs in Iraq are about $5 billion. But the Marines will get little help in the $11.7 billion in "reset" costs to restore all of the equipment which has become worn out or lost over the past four years. According to its records, in order to replenish its equipment to pre-9/11 levels even if all of the costs were provided in 2006, would take over two years to do so. The Marine Corps over the past three years, has seen its war reserves depleted, however, necessary in order to keep deployed troops fully equipped.

The Marine Corps has lost 3,500 pieces of ground equipment as well as 27 aircraft in Afghanistan and Iraq. In Iraq, trucks and Humvees age four to nine times faster than during peacetime. Roadside bombs, heat, and weight of the Humvee armor kits all contribute to vehicle aging. And lack of equipment has left little in reserve in order to properly train deploying troops on weapons, on types of radio devices to the very vehicles they will actually drive upon reaching the battlefield. That puts U.S. troops at far greater risk.

At present, the Marine Corps is in need of more than 3,000 trucks, 5,000 high-powered jammers, 3,500 radio sets and 1,000 armor kits. And that does not include the needs of the Army which has the largest number of troops deployed. But due to the large amount the Army spends on personnel, making up 24% of the entire Pentagon budget, it leaves less and less funding for weapons.

There are plenty of reasons for costs restraints, starting with the growing cost of fuel, lower exchange rates on the U.S. dollar, bonuses and incentives to attract new recruits and discourage officers from retiring. In addition, more healthcare costs have arisen for more and more disabled troops returning home and Veterans' escalating healthcare costs. Costs incurred due to the mandated and ongoing reorganization of the Army into a smaller, more flexible force with more frequent deployments adds to the shortfalls. And the proposed closing and reorganization of National Guard and Reserve bases is expected to cost billions of dollars with some of those costs realized starting in 2007.

The Congress in both houses has postured that fighting a war while simultaneously maintaining combat readiness throughout the armed forces through a series of supplemental emergency funding bills cannot go on much longer. For in fact such bills usually include other areas of government spending which have nothing to do with funding supposed emergencies. And side deals or amendments to legislation arising at the 11th hour when most of the Congress is not aware, is no way to treat troops when lives are on the line.

Mere belt tightening is not the answer in the middle of a crisis, such as a war, with other hot spots and threats to the U.S. across the globe. And the U.S. Congress is far from a good example of abiding by budget constraints. The time for addressing shortfalls is not after men are dying on the battlefield and suffering from equipment shortages, nor when it just happens to be politically expedient, but on a timeline which mitigates the loss of life by proper preparation for the long term. Perhaps if we had a more modular Congress these shortfalls would be far more uncommon. And perhaps emergency supplemental bills would be reserved for what they were intended: true emergencies only.

Copyright ©2006 Diane M. Grassi
Contact: dgrassi@cox.net

Since the United States became a party to the North American Free Trade Agreement (NAFTA) in 1994, U.S. construct of the Foreign Trade Agreement (FTA) has changed considerably. Such agreements now have a much more profound impact on state and local economies across the country.

Generally, treaties with foreign governments were a vehicle for regulating tariffs and quotas relative to the export and import of products, but within the parameters of U.S. law. However, since 1994, FTAs have expanded to include non-tariff barrier issues and regulated under the purview of international law.

Unbeknownst to most of the public regarding the Dubai Ports World agreement with the U.S., approved by the Committee for Foreign Investments in the U.S. (CFIUS) in February 2006, enabling the country of Dubai to take over port operations of six major U.S. east coast ports, was that the U.S. had been in negotiations for a FTA with the United Arab Emirates (UAE) since March 2005. While members of both houses of the U.S. Congress feigned shock that there was such a deal in the works, that FTA in particular provided the backdrop to allow such takeover of U.S. strategic assets, regardless of national security risks.

Since Dubai verbally agreed in March 2006 to sell its rights in the U.S. port operations to a U.S. entity, which to date does not exist in writing, the FTA with the UAE, of which Dubai is one of its seven emirates, has been put on hold. However, a similar deal with the country of Oman, also negotiated since March 2005, was approved by the U.S. Senate on June 28, 2006. The passage of the Oman FTA, still to be ratified by the entirety of the House of Representatives in July 2006, is considered to enable easier passage of several other U.S. FTAs pending, which include Peru, Thailand, Vietnam, as well as the UAE, among several others.

Unlike other federal legislation, however, the FTA is signed by the President prior to ratification, as President Bush did so on January 19, 2006 with the Oman FTA. Unlike most pending legislation, the Oman FTA is under the auspices of the Trade Promotion Authority (TPA). The 2002 Trade Promotion Act allowed for "fast track" status before the Congress which hands over its authority to the President to negotiate the terms of the agreement. The President then hands over to the Congress the finalized legislative package. However, the Congress is not given the right to amend any of the agreement's provisions but only to take a vote. Also, the Congress must vote upon its passage within 90 days subsequent to its formal submission from President Bush, which was on June 26, 2006.

Yet, due to the complex nature of such an agreement, the rush-to-ratification style lawmaking does little to clarify the voluminous rules and regulations for lawmakers. And passage of such legislation includes irrevocable provisions once the pact is signed. There are arguably three or more major areas of concern with the Oman FTA with the U.S.

At issue are the present labor laws in Oman, its continued boycott of products from Israel and the dispute resolution process which stands to override U.S. national, state and local laws. According to numerous national and international labor rights organizations as well as the AFL-CIO, Oman labor abuse practices are rampant. All workers are denied basic labor rights. They include the inability of workers to organize in order to impact fair wages and safe working conditions as well as humane treatment.

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Oman has failed to measure up to the International Trade Organization requirements for fair labor practices. Additionally, 80% of Oman's laborers are from the South Asian countries of Bangladesh, India and Pakistan, and have no legal rights to demand any changes in labor abuses, as they are foreign nationals. The only stipulation in the agreement is that Oman enforce its own labor laws. Yet, U.S. FTAs with Communist countries or those previously under Communist regimes have far more stringent language concerning labor rights abuses, upon which the U.S. insists. According to U.S. Trade Representative spokesman, Stephen Norton, "We have no reason to suspect that goods made with slave labor would be imported from Oman into the U.S."

Although Oman assured the U.S. during negotiations that it no longer abides by the Arab League Ban of refusing Israeli imported goods and would disengage from the boycott, such is not the case. Oman's Directorate of General Customs Mohammed Nasser recently told the Jerusalem Post that "even catalogs of commercial products that mention Israel would likely be seized by Omani authorities."

And the hot button issue which has not been publicly addressed by the Congress is the potential for U.S. law conflicts under the terms of the U.S.-Oman FTA. Deeply buried in Chapter 11 of the agreement along with Annex 2, establishes that commercial disputes be settled under the realm of International Tribunals. Therefore, commercial activity agreed upon which includes operations of seaports, stevedoring and loading and unloading of goods either by Oman or any foreign entity or country which buys any of Oman's service contracts or proprietary company interests, would override local, state or national U.S. laws. No distinction is made between commercial interests and those considered strategic national assets of the U.S., with no reference to national security considerations.

The objective of these trade deals, specifically in the Middle East is for the U.S. to garner support with allied nations in the interest of ending terrorism, as is the case with Oman, which is geographically closest to Yemen, Saudi Arabia and the UAE. But it could as easily be argued that the U.S is throwing the proverbial baby out with the bath water in approving such lax controls and oversight in such a vast agreement.

And it also can be argued that such agreements with the third world will put the final nail in the coffin for U.S. workers in the textile industry. They cannot compete with slave wages, nor should they. The U.S. has led the way for workers' rights and wages and in eliminating child labor. Yet, federal trade agreements without enforcement will only continue to erode away any progress realized for workers not only outside of the U.S. but on its very shores.

While much lower energy costs also remain attractive for U.S. multi-national corporations setting up shop in the third world, it does not excuse the U.S. from making demands in the interest of human decency over strategies to accumulate immediate profits. The waiving of 100% of the tariffs, in this case between goods and services flowing between the U.S. and Oman, does not alleviate such U.S. obligations as fairness and decency, which the U.S. has always represented.

While once the world's watchdog on human rights, the U.S. has given new meaning to "free" trade in 2006. And it comes at the cost of not only the American worker's quality of life but predominantly on the backs of those third world workers who remain without the right to take a stand. Worst of all, it is but another example of the flagrant failure of both houses of the Congress to realize the ramifications of its members' inactions and laziness. For if lawmakers were given a questionnaire on the provisions of this latest U.S.-Oman FTA, rest assured that as many as 90% of them probably would take the Fifth.

Copyright 2006 Diane M. Grassi
contact: dgrassI@cox.net

50 years ago President Dwight D. Eisenhower signed into law the 1956 National Federal-Aid Highway Act and since 1990 referred to as the Dwight D. Eisenhower System of Interstate and Defense Highways. He authorized the connectivity of 41, 000 miles of high quality highways across the United States. It would be financed by a combination of the Highway Trust Fund, federally imposed user fees on motor fuels and state user fees.

Eisenhower was prompted to persuade the nation's people to build the interstate highway system, as a matter of national security. Although not at war at the time, he believed it was imperative the interstate be designed for mass evacuation of cities in the event of a nuclear attack, in the era of the Cold War. The Act dictated that one out of every five miles must be straight, in order to use as airstrips in times of war or other catastrophic emergencies. And to that end, the success of national defense was dependent upon the navigability of large numbers of military personnel and their equipment during such a crisis. And even today, 75% of the interstate highway system represents the Strategic Highway Corridor Network (STAHNET) utilized by the U.S. military.

And while in 1956 there was the fear of nuclear threat from the then Soviet Union, today's national security, often referred to as homeland security, remains similarly threatened in an era where the threat of terrorism looms. Yet, at such time that it would appear imperative that U.S. strategic infrastructure such as the interstate highway system remain under American control, it is but one more public asset available for sale under the guise of Public-Private Partnerships. Unlike domestic privatization, however, states throughout the country are negotiating contracts solely with foreign corporations and conglomerates, primarily in Europe, Australia and Asia, in order to finance the maintenance, modernizing and extension of U.S. interstates.

As funding from federal gas taxes and state user fees have fallen behind the inflated costs associated with road construction and maintenance, more and more state governors and lawmakers no longer see the operation of roads solely as a public responsibility. However, the reason states initially took over handling roads at the beginning of the 19th century was because many roads, bridges and canals had previously fallen to bankruptcy in the hands of private owners.

According to the Secretary of the Department of Transportation, Norman Mineta, "We are like a poker game. We are inviting people to the table and saying, 'Bring money when you come.'" And Mineta believes, "A big part of the answer is to involve the private sector more fully – not just as a contractor or vendor, not merely as a financier, but as a partner in the funding, management and expansion of our transportation infrastructure." Yet when those partners are exclusively foreign entities, a whole new dimension is added to the management of the U.S. interstate highway system. It is unprecedented.

The deal which started a flurry of more than 18 proposed foreign financed interstate highway projects across the nation over the past year in amounts of over $25 billion was in Chicago, IL in December 2004. Chicago Mayor Richard Daley proposed an agreement to lease the Chicago Skyway for $1.83 billion dollars to Cintra-Macquarie Consortium, a Spanish-Australian conglomerate, doing business as State Mobility Partners in the U.S. The deal, finalized in January 2005, gave Cintra-Maquarie a 99-year lease for which it is responsible for the maintenance and structural quality of the 8-mile elevated structure.

In exchange for its upfront payment, Cintra-Macquarie will collect and keep all money from tolls from the Skyway and will be able to raise tolls as incorporated under the terms of the agreement. The company is modernizing toll collection with an electronic transponder system. Until the technology is fully operable, toll collectors have been newly but temporarily recruited. But instead of earning an average hourly wage of $20.00 as their predecessors did, they are paid a $10.00 to $12.00 hourly wage. And as contracted, the Skyway offers the buyer an asset without having to deal with improvements or debt.

Following the situation in Chicago, Indiana Governor and former Office of Management and Budget Director for President Bush in his first term, Mitch Daniels, explored a similar arrangement for Indiana's $2.8 billion shortfall in its transportation budget over the next ten years. Daniels was able to get his highly contested proposal through the state legislature as well as the courts where it was challenged by a citizen advocacy organization.

A bid was accepted by the state of Indiana in the amount of $3.8 billion and an agreement was arrived at with Cintra-Macquarie, the same operator of the Chicago Skyway. The lease agreement will provide for the operation and maintenance of the 157-mile Indiana Toll Road, a part of the interstate highway system, for a period of 75 years. The deal is expected to close on June 30, 2006. The Indiana Toll Road will also have an upgraded electronic toll system installed, eventually ending the need for toll workers.

Here are just a few of the many other projects either approved or proposed across the country. In Virginia, the rights to manage, operate and maintain the Pocahontas Parkway, an 8.8-mile toll road outside of Richmond, were bought for $611 million by the Transburban Group, also an Australian entity in its first foray into U.S. road management. A lawmaker in New Jersey has proposed selling a 49% interest in the New Jersey Turnpike and Garden State Parkway to a private investor.

In August 2005, the same Macquarie Infrastructure Group took over operations of the Dulles Greenway Toll Road which operates between suburban Virginia and Washington, D.C., for the amount of $533 million. And the anticipated widening and extension of the Trans-Texas Corridor which runs 316 miles and parallel to I-35 in Texas, is slated to be built by Cintra, the Spanish company, and Zachry Construction, out of San Antonio, TX, who plan to invest $7.2 billion.

But windfall upfront payments while attractive to states to reinvest in other transportation projects, have their limitations and pitfalls too. States will need to learn how to enforce and write explicit contracts. And the proceeds from the sale or lease of roads should be earmarked for specific projects. Non-compete clauses are often inserted in such contracts such as inducing lower speed limits on parallel free roads to drive traffic to the toll road. Others fear that operators will only maintain those parts of the route which remain profitable.

Other issues which are arising more often after the fact is the increasing worry that the public will have less and less input over the use of its public assets. Such is the case in Colorado and California where the enforcement of maintenance matters have already become problematic. Immediate increases in tolls and applied on a perennial basis, with higher tolls applied at rush hours have not sat well with commuters.

However, questions will continue to arise in a process still in its in infancy. Yet states must have the ability to learn from mistakes made in doing business in this brand new way. Will a private firm maintain the roadways as well as the U.S. government? Will a foreign corporation care about the needs of the American people? And will selling off public assets to pay debts now be regrettable down the road? One would think that Eisenhower would have thought so.

Copyright 2006 Diane M. Grassi
Contact: dgrassi@cox.net

On June 23, 2005 the United States Supreme Court handed down its controversial 5-4 decision on Kelo v. City of New London, CT., concerning the issue of eminent domain. The court's ruling not only impacted the City of New London, CT and seven property owners contesting the 2004 decision of the Supreme Court of Connecticut, it sent a chill across local communities and states throughout the U.S. And although the takings of private land belonging to homeowners and small businesses under the guise of eminent domain have been argued repeatedly and primarily over the past half century, the U.S. Supreme Court's 2005 decision came closest to heightening the blurring of legitimate use of such takings for public use.

Scott Bullock, a senior attorney at the Institute for Justice, a libertarian Washington D.C. based advocacy organization, tried the case before the U.S. Supreme Court in February 2005, representing seven families collectively owning 15 properties in the city of New London, CT, with a population of 25,000. In question was whether the 5th Amendment of the U.S. Constitution provides for the taking of privately owned homes strictly for economic development. The court, however, merely stated that it was leaving it up to the states, their legislatures and local municipalities to decide what constitutes eminent domain. But too, the states have the right to restrict eminent domain seizures.

Disconcerting was that the decision of the court went beyond prior precedent by virtually allowing the taking of well-maintained homes or small businesses by real estate developers and local governments seeking to create more tax-based revenue and the possibility of more jobs. The court therefore redefined the meaning of "public purpose" as well as "blight" which were previously used as barometers for targeting properties for urban revitalization.

Essentially, the ambiguity of the Supreme Court's decision has created the impression of a lower threshold in order to establish a taking. It has therefore led to 22 states to pass laws since June 2005 in order to clarify land takings. Yet some states' laws remain inexplicit concerning the term "blight" and it thus serves as a loophole. Very few laws are straightforward, such as in the state of Florida, which expressly states that "the preservation or enhancement of the tax base is not public use."

The high court concluded that blight was not necessary for condemnation in order to create economic development for public purpose, thus leaving such up to local governments and politicians and corporations. And as such, the court's decision has also led to an increase in takings activity since June 2005. Many proposed developments were put on hold until the high court's decision and more than 30 nationwide have since been reactivated and given the green light.

The Kelo case, named after Susette Kelo, one of the seven homeowners who held out to fight to keep her home, started in 1998. Pfizer, Inc., the world's largest research-pharmaceutical company bought some land in New London and built a corporate park in the Fort Trumbull neighborhood. Due to a decline in industrial jobs which supported the U.S. Navy which has since pared down its operations there, 50% of the tax base as well as its population have eroded over the years. So New London and Pfizer worked out a deal for Pfizer to expand its facilities.

In the name of economic development, New London chose to raze the land of 15 homes and small businesses in the Fort Trumbull neighborhood in order to build a 200-room waterfront hotel, convention center, 80 condominiums and some retail space to be utilized primarily by Pfizer, its researchers and employees. A Coast Guard Museum was also promised by New London. The prospect of 2,000 jobs, however, for a facility which relies on recruiting employees from all over the world has since dwindled and the museum will not generate any tax revenue.

And since the decision by the U.S. Supreme Court, the New London City Council moved in September 2005 to evict the remaining seven property owners giving them 90 days to do so. Along with the eviction notices they were billed for $600.00 a month for rent plus taxes retroactive to 2000.The reasoning was that since the city won its case, the homeowners were living on city property as the condemnation procedures began in 2000. Connecticut Governor, Jodi Rell interceded, asking the City Council for a moratorium on eviction proceedings granted by the New London Development Corp. appointed by the City Council to evict the property owners. The Governor had hoped during that time to allow the state legislature a chance to review the court case.

On June 5, 2006, however, the New London City Council got tired of waiting on the state and voted 5-2 to take over the remaining two properties belonging to Susette Kelo and Michael Cristafaro, along with their families. They had gotten five of the seven holdouts to settle. The city was on record as only offering the fair market value of their homes for the year 2000. However, real estate in 2006, especially waterfront property, has greatly appreciated since 2000. The city supposedly forgave the back-rent and taxes for the five other holdouts but did not appreciate the fair market value or their properties to that of 2006.

Since Ms. Kelo's property was never near the proposed development and since there was only one other house being contested, Governor Rell suggested that the Cristafaro home be moved to the same parcel of land proximate to Kelo's home. Then the deeds could be returned to them and the city would have right of first refusal should they decide to sell in the future. But the City Council not only refused the Governor's suggestion but reportedly resented her interference.

Attorney Scott Bullock said, "The residents still had a few possible responses to the city's vote and hope to appeal to the state to reconsider whether state money should be spent on the development at all. Kelo and Cristaforo will also challenge any back taxes, rent or fees. The evictions presently are set for the end of August 2006 at which time both parties will also consider civil disobedience to protect their homes.

In writing the dissenting opinion of the U.S. Supreme Court decision, Justice Sandra Day O'Connor stipulated that "Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result."

If Susette Kelo should not prevail, she will owe over $60,000.00 to the City of New London for back-rent alone. The registered nurse will have to leave New London homeless, without any equity in her home nor the funds she put out for its remodeling. Certainly, this could not have been what the court had in mind. Certainly, eminent domain abuse must be revisited as the result of this case's outcome. According to Susette Kelo, "This really isn't about me anymore. It's about every American across the country."

Copyright 2006 Diane M. Grassi
Contact: dgrassi@cox.net

On the 62nd anniversary of D-Day, June 6, 1944, when the United States Armed Forces as part of the Allied Forces including Britain and Canada, landed on the beaches of Normandy, France and helped free France and much of Europe from the strongholds of Nazi Germany, there is no better time than to remember the sacrifices of all U.S. military members and their families. And such sacrifice should serve as a reminder that it is the absolute obligation of the U.S. government and its people to not only honor their memories, but to assure them the security of their most vital information, either while still serving in the armed forces or as retired military.

However, all U.S. veterans discharged after 1975 learned just prior to Memorial Day 2006 that their most crucial personal information from the Department of Veterans Affairs had been stolen and still remains in the public domain. Since the revelation, announced by Secretary of Veteran's Affairs, R. James Nicholson, on May 22, 2006, that names, dates of birth, Social Security numbers, including phone numbers and addresses had been stolen on as many 26.5 million service members and some of their spouses, such information did not even include the total amount of information or number of other service members' information that has since been discovered.

It all started when on May 3, 2006 a 30-year career senior-level information technology specialist in the Office of Policy of Veteran's Affairs (VA) was in violation of security procedure. He took home a laptop computer, which belonged to the VA. He had been working on an annual study about veterans' demographics. It was also revealed that unbeknownst to his supervisors that he had been doing such for three years, including downloading unencrypted information from his home.

The laptop contained a hard drive with the information and he also took home computer disks and a flash memory stick. The employee reported the purported break-in of his Aspen Hill, MD home to the local Montgomery County police in addition to Michael H. McLendon, VA Deputy Assistant Secretary for Policy of the theft shortly after it occurred. Law enforcement considers the theft to be a random burglary, but its ramifications of the theft represent the largest personal identification breach which includes Social Security numbers, in U.S. history, in either the public or private sectors.

Also, the timeline of those in the chain of command at the VA has only added to increased criticism of the questionable and lax fundamental security at the VA, documented for at least five years. On May 5, 2006, Dennis M. Duffy, Acting Assistant Secretary for Policy Planning and Preparedness was told of the theft. On May 9, 2006 Duffy then informed VA Chief of Staff Thomas Bowman, and suggested that senior management notify veterans that security on their information had been compromised. But Bowman waited until May 10, 2006 to inform Deputy Secretary Gordon Mansfield, the VA's No.2 official. Neither Duffy nor Mansfield advised Secretary Nicholson until May 16, 2006.

VA Inspector General, George Opfer, testified on May 25, 2006 before the House of Representatives
Committee on Veteran's Affairs, the Senate Veteran's Affairs Committee as well as the Senate Committee on Homeland Security and Governmental Affairs, stating that "while attending a routine meeting at the VA's Central Office, heard another Information Security Officer that a VA employee's home had been burglarized and that VA electronic records may have been stolen." Obviously IG Opfer was spared the information as well.

IG Opfer put in motion a criminal investigation on May 12, 2006 within the VA and the employee was interviewed on May 15, 2006. The local police had been investigating the theft since May 3, 2006 but the Federal Bureau of Investigation (FBI) was not apprised until May 17, 2006, the day after Nicholson was advised. Nicholson then briefed U.S. Attorney General, Alberto Gonzales, the Chairman of the Federal Trade Commission, Deborah Platt Majoras, along with co-chairs of the President's Identity Theft Task Force. And lastly, the U.S. Congress was advised on May 22, 2006 when the public announcement was made.

Now the details of this timeline may seem like more information than one need know, however it is indicative of the dysfunction of information oversight and security controls including the chain of command which exists within the culture of the VA and its 235,000 employees. Since the initial speculation of missing information, it has been learned that additional identifications of numerous other veterans as well as active-duty personnel is also missing. The data includes personnel discharged prior to 1975 who put in claims to the VA for any number of services, disabled veterans discharged prior to 1975 who receive healthcare through the VA, over 6,700 records of World War II veterans who participated in chemical testing programs for mustard gas and biological weaponry, along with diagnostic codes pertaining to an unidentified number of disabled veterans.

The active-duty personnel information considered missing as of June 6, 2006 now includes more than 1 million National Guard and Army Reserve members, which includes at least 55,000 serving at least their second active-duty tours in Iraq and at least 30,000 active-duty Navy personnel who completed their first enlistment terms prior to 1991. But now it is confirmed that as many as 1.1 million active-duty troops from all of the armed forces are at risk of identity theft.

Since the theft findings, the data analyst has been fired with full benefits and severance pay, Deputy Assistant Secretary McLendon resigned from his post, and Acting Assistant Secretary Duffy, acting head of the Division for Policy Planning and Preparedness was put on administrative leave. Secretary Nicholson, serving as Secretary of the VA since 2005, has also hired Rick Romley as his new advisor for information security who will assist Nicholson with reforming the VA's policies and procedures on information security for a minimum period of three months. Romley is a former Maricopa County, AZ attorney, Vietnam Veteran and high profile former Republican National Party Chairman in the state of Arizona.

The long history of security flaws within the VA does not come as news to many within the Government Accountability Office (GAO), or within the VA's Office of the Inspector General. And for that reason, it makes it even more difficult for lawmakers to fathom. "The chronology that you gave us is absolutely baffling. It's just inconceivable that there were such long delays." Senator Susan Collins (R-Maine), Chairwoman of the Senate Homeland Security and Government al Affairs, stated such during IG Opfer's May 25th testimony before the committee.

Senator Collins' remarks are all the more remarkable given other occasions over the past year when she and her committee have reiterated such phraseology concerning other bureaucratic missteps which took place by the former Director of the Federal Emergency Management Agency (FEMA), Michael Brown, during his testimony on Hurricane Katrina recovery efforts and during hearings regarding the Committee of Foreign Investments in the U.S. (CFIUS) and its approval of the government of Dubai's purchase of several U.S. ports' operations without considering its full ramifications or advising members of Congress.

The VA was among eight agencies given a failing grade for computer security practices in 2005 by the GAO.
But since 2001 the VA Inspector General's Office has advised the VA that its information access controls are materially weak, creating substantial risk and serious vulnerabilities which remain uncorrected.

Such vulnerabilities are far simpler to correct than one might think as the failure to encrypt files sent electronically or placed on disks and the allowance of access to information by unauthorized personnel are among the VA's security violations. And although federal privacy security policies are based upon the Privacy Act of 1974 and the 2002 Federal Information Security Management Act, along with further legislation pending, it remains up to employees to adhere to policies and procedures, no matter how many more are put in place.

Due to the interconnectivity of massive federal agencies it becomes even more necessary for diligence in protecting data and computer systems. In fact, had not the employee who took the laptop reported the theft, there would have been no way for the VA to have known of the breach of information. Yet, given each agency's own policies in place concerning data protection the differences in practice are wide ranging. The Senate is looking to centralize such data protections not only within an agency but federally, as well as requiring notifications to those whose information has been breached. Such notification presently is only required by a handful of states and with respect to the financial industry or data credit brokers only.

It is however important to note other cases of security breaches within the VA over the past few years. In April 2006 military computers containing personnel records were found being sold at a bazaar outside a U.S. military base in Afghanistan. In September 2005, thieves stole personnel information on deployed soldiers from Fort Carson, CO. Records on more than 560,000 troops, veterans and dependents was stolen in December of 2002 from computers at a healthcare provider located in Arizona. All such data was in unencrypted databases. In addition, military personnel's physical papers and ID's have been stolen from military personnel outside of as well as within the VA.

The costs of setting up systems to notify military personnel, help military personnel access credit reports, and the potential help they will need in becoming whole again should identity theft become an issue and damage credit and loss of identity, is initially estimated to cost between $25 million and $100 million. And unfortunately, the funding will be coming out of the Veteran's Affairs budget, when over the next five years the 2007 pending legislation will call for over $8 billion less in allocations, needed to build hospitals and new clinics now. With nearly 20,000 wounded already from the War in Iraq, it is inconceivable to be cutting budgets at this time at the VA.

The severity of the VA breach is much clearer when compared with a stolen credit card number. Usually the victim need only cancel the credit card account. But with the loss of a birth date combined with a Social Security number the thief has access to not only one's assets but can continue to borrow funds, take out a mortgage and establish additional credit card accounts. Additionally, legal status for those not legally in the U.S. can be assumed by the theft of one's Social Security number.

Secretary Nicholson has since directed all VA employees to complete the annual VA Cyber Security Awareness Training Course and the General Employee Privacy Awareness Course by June 30, 2006. He has ordered all VA staff to annually sign an Employee Statement of Commitment and Understanding that will also describe non-compliance consequences and has directed that the VA immediately conduct an inventory and review of all current positions requiring access to sensitive VA data and require those who need access to sensitive information to perform their duties to undergo updated background investigations.

Sadly, these measures were meant to have been followed all along. And now, is of little consolation at this late date, for our present and fallen heroes.

Copyright ©2006 Diane M. Grassi
Contact: dgrassi@cox.net

"The attitude of this agency stinks…..This report should have come out a year ago had we gotten even minimal cooperation……." No, this was not a criticism of the Federal Emergency Management Agency (FEMA) concerning the impending hurricane season. But it is in fact a quote by Congressman James Sensenbrenner (R-WI) referring to another agency, the Federal Air Marshal Service (FAMS), which is also under the authority of the Department of Homeland Security (DHS). FAMS directly reports to the Transportation Security Agency (TSA) also under the DHS. It has not always been that way, however. But things changed after September 11, 2001.

The Federal Air Marshal Service began in 1968 under the auspices of the Federal Aviation Administration (FAA) and known as the Sky Marshal Program. Its job was to prevent hijackings. The program expanded in 1985 under President Ronald Reagan when the U.S. Congress enacted the International Security and Development Cooperation Act, providing the statutes carried out by the FAMS today. By 1987, there were 400 Federal Air Marshals. But by September 10, 2001 the FAMS had dwindled down to a mere 33.

Following the 9/11 attacks on the U.S., President George Bush called for an immediate expansion of the FAMS, and under the Homeland Security Act of 2002, FAMS was transferred from the FAA to the DHS under its division of Immigration and Customs Enforcement (ICE). In late 2005, Secretary of DHS, Michael Chertoff, yet again shifted FAMS to be under the direct authority of the TSA. Although classified information, it is estimated that the number of Federal Air Marshal personnel now totals somewhere between 3,000 and 5,000.

Now, a draft report based upon a two-year investigation of the FAMS, at the request of the Congressional House Judiciary Committee, will be publicly released on May 25, 2006 and discussed by the Judiciary Committee as to the report's proposed policy and management recommendations. House Judiciary Committee Chairman James Sensenbrenner (R-WI) has read the report and has been candid about his initial impressions of it.

Yet the report's acting title: "Plane Clothes: Lack of Anonymity at the Federal Air Marshal Service Compromises Aviation and National Security," while self-explanatory does not tell the entire story. Numerous administrative miscues in the FAMS program are exposed, along with the treatment of its air marshals, some of whom were retaliated against for cooperating with the Judiciary Committee investigation. Both are expected to be addressed by the Congress.

Most glaring in the report, according to Frederic J. Frommer of the Associated Press, who got an advanced copy of the draft report, are the changes in dress code mandated by the FAMS after arriving at the DHS. Air marshals immediately became more easily identifiable at airports and aboard aircraft. Required to wear khakis or dress slacks and sports jackets for the men and skirts or dresses for women with no jeans or athletic shoes allowed, became an immediate tip-off as most air travelers dress far more casually.

FAMS also requires marshals upon check-in for flights to identify themselves as air marshals in front of waiting passengers and requiring them to board the aircraft prior to passengers by not going through security as do other passengers. They are then accompanied by airline flight attendants to board the aircraft, as they are not allowed to be on board without a crewmember present according to the airlines.

Additionally, air marshals are required to sit in aisle seats, but only near the front of the aircraft. They must repeatedly stay in the same hotels within short distance of airports and provide their FAMS identification to hotel personnel in order to pay for their rooms as they are not issued separate ID's as promised the FAMS, strictly for such purposes. Ultimately, the air marshals' covers are able to be breached in numerous ways.

Further to the lack of anonymity of Federal Air Marshals being challenged, is the lack of whistleblower protection also documented in the report. The FAMS retaliated against Federal Air Marshal Frank Terreri for when he initially voiced his concern to a fellow air marshal via e-mail regarding a published article in People Magazine in 2004, which disclosed details of operations within the FAMS. Terreri was relegated to desk duty, put under investigation and gagged by the FAMS for a year.

Equally alarming according to the Federal Bureau of Investigation (FBI) after hearing from not only Terreri but hundreds of other air marshals is the double standard of leaking operational procedures by the FAMS to major news outlets such as FOX, CNN, NBC and ABC. All have aired various segments over the past two years detailing FAMS operational procedures, and thus indirectly acquainting terrorists with such data.

Terreri filed a lawsuit in April 2005 against the DHS, TSA and FAMS on constitutional grounds of the violation of free speech. The lawsuit was settled with the ACLU of Southern California on behalf of Terreri in April 2006. In the settlement the DHS, TSA and FAMS agreed to e-mail all personnel of changes they would make in clarifying the FAMS policy on what air marshals may say publicly on legitimate concerns for the protection of the FAMS and its personnel.

But that is not enough for Frank Terreri. He petitioned the Office of Special Counsel in April 2006 to investigate his remaining problems with the FAMS, which are reiterated in the House Judiciary report. Terreri alleges "gross mismanagement, abuse of authority, violations of law and substantial threat to air safety, created by repeated disclosures of operation tactics and FAMS policies that compromise the identity of individual air marshals."

Terreri is also an advocate for amending the Whistleblower Protection Act of 1989, last amended in 1994. S.494 and H.R.1317 are amendments which have remained in limbo for years in both the Senate and the House. S.494 would ensure protection for whistleblowers called upon by Congress to testify before oversight committees and H.R.1317 would allow whistleblowers the right to jury trials comparable to those in the private corporate sector. Both amendments otherwise share similar enforcements.

For example, during the course of the House investigation, a Federal Air Marshal special agent in charge of the FAMS Atlanta office, was pulled from his post when it was learned that he had cooperated with the House Judiciary investigation. And thus, the report includes criticism and states, "Disciplinary procedures…on their surface, can be characterized as unfair and even retaliatory." Congressman Sensenbrenner hopes that the FAMS "will at least be a little bit more compliant with the law and whistleblowers, rather than trying to shut them up."

With the formation of the DHS in 2002 which comprises 22 different agencies, the learning curve for crucial areas of law enforcement and emergency services still thrives. The question is whether such a brash and immediate turnover of agencies and personnel after 9/11 will continue to haunt a number of services such as the FAMS and FEMA. FEMA Director Michael Brown resigned on September 12, 2005, two weeks after Hurricane Katrina hit the Gulf Coast. On February 3, 2006 Thomas Quinn, Director of FAMS, did the same.

Leadership apparently is flailing at the DHS at a time when it can least be afforded. Layers of bureaucracy appear to impede policy and direction including clear and two-way communication within its ranks and within the FAMS and the oversight by the TSA. And since 9/11, the FAMS has both changed and absorbed another bureaucratic layer, within a behemoth framework known as the DHS.

But upon release of this latest Congressional report it will up to the American flying public to voice their concerns. After all, with air cargo holds remaining uninspected, TSA screeners recently failing tests for both weapons and bomb materials allowed through security points and hearing that identification of air marshals is continually at risk, should not sit well with flyers. As Sensenbrenner admits about the report, "I think the American public will be shocked."

As the United States Senate and President George Bush try to come to some understanding of what is needed to properly address the illegal entry of non-resident aliens to the United States, for the 12 to 20 million illegal aliens already residing in the U.S., the issue of existing false documentation has yet to be honestly addressed.
But proposed legislation in the Senate leading to a path of legal residency and ultimately citizenship for those illegal aliens presently residing in the U.S. would involve presentation of proof of identity and length of residency.

The problem will be whether or not the illegal or "undocumented" aliens will be willing to admit that their status in the U.S. is illegal, or will continue to maintain that the documentation they hold is valid, even if fraudulent and illegally obtained. In order to do so, there would have to be an amnesty program, but President Bush has insisted that his proposal for legal residency of illegal aliens is not an amnesty program which presents a problem.

Forms of identification, necessary to secure employment, are a valid Social Security card and either a valid Work Visa or Green Card, and in some cases an Individual Tax Identification Number (ITIN) in lieu of a Social Security number. However, employers rarely check as to whether the documents they are presented with are actually legal documents, partly because of their authentic appearance.

The sophistication of computer technology over the past several years, has led to the manufacture of official looking counterfeit immigration documents. Illegal residents no longer need depend on flea markets or corner stores which once only sold less valid-looking identification. Forged document mills have become big business in both the U.S. and Mexico, yielding billions of dollars each year. And for those people crossing the border through smugglers or chauffeured in by other means from Mexico, they are usually provided not only access to the U.S. by said smugglers but given fraudulent documentation and identities as well included in the price.

Presently, the fraudulent document business is what many experts in law enforcement are saying is akin to organized crime, due to its vast network of operations. Most well known is the Castorena Family Organization (CF0). According to the U.S. Immigration and Customs Enforcement (ICE) the Castorena's have dominated a big part of the printing and distribution business of forged documents since they arrived in the U.S. from Mexico in the late 1980's. And ICE has knowledge that the CFO now has operations in all 50 states.

Julie Myers, Director of ICE, has referred to document forgery in the U.S. as epidemic. And although Myers says that ICE is joining multi-agency task forces to crack down on forged document rings nationwide, it still leaves little resources left to weed out the existing individual holders of illegal documents being used to gain employment, gain access to state and federal entitlement programs as well as driver's licenses and voter registration cards.

As part of the average $2,000.00 smuggling fee given to those referred to as "coyotes" who transport or smuggle Mexicans illegally over the U.S. border, those illegally entering are either given a package of fraudulent documents or are given contact numbers for illicit vendors selling the various documents. They range in price from $100.00 - $500.00, depending upon the number of documents and the quality of their authenticity. But the most desirable documents are acquired from the Castorena network.

The forged document mills were an answer to the 1986 Immigration Reform and Control Act which required that potential employees present a Social Security card, driver's license, or voter registration card as proof of legal residency to their employer. But the 1986 law also mandates that there be civil penalties invoked for those employers of illegal aliens, and rarely has it ever been enforced.

Yet, contrary to the headlines and television broadcast videos shown, not all Mexicans coming into the U.S. walk through the hot desert heat and risk their health and safety to enter. The coyote business has also become more sophisticated and some have become one-stop-shop operations. For more money, of course, people are transported in cabs with the coyote dressed as a taxi driver and the passenger well dressed and carrying money. For example, the cab might be full of shopping bags of new clothing from San Diego stores when going through the border crossing to show law enforcement that the illegal alien is a wealthy Mexican merely visiting the U.S. The coyote assures the uneventful passage through the border by advising the passenger on how best to not tip off law enforcement. They then make their way through to Los Angeles whereupon the illegal alien is met by friends or relatives. They are now on their way to their new life.

Also, little spoken of in the mainstream media are Mexicans actually of well-to-do means and good educational or vocational backgrounds who choose to forego a professional career in Mexico. Many white-collar jobs in Mexico pay less than, for example, putting up sheetrock in the U.S. For the Mexican trade school graduate, appliance repair in Mexico could pay $100.00 a week. But in the U.S., a refrigerator repairman, for example, earns approximately $35.00 an hour. And for doctors and nurses from Mexico, many decide on blue-collar work upon arrival in the U.S., as they are without the proper medical certification in order to practice medicine. However, they do not seem to appear to have trouble in accessing forged U.S. documents.

But whether they are rich or poor, the issue of false identity remains an intrinsic problem of immigration and necessitates it being a part of any discussion concerning immigration reform. For it is the predominance of fraudulent documentation which is the gateway to life in the U.S. for illegal aliens, and for those who have already established lives in the U.S., albeit illegally. And while 13 states now issue driver's licenses to illegal aliens the ramifications of owning such a photo ID are extensive.

But in North Carolina, for example, the state does not require any identification other than a utility bill or other proof of address in order to complete its Spanish-language voter registration form. North Carolina presently has no system to know if an illegal alien registers to vote. Upon applying for a driver's license, most states comply with the 1993 Motor Voter Act which allows citizens to register to vote at the same time they apply for a driver's license or state issued ID. All that is required is a Social Security card or ITIN to receive a driver's license. And all anyone need do is to say that they are a citizen in order to register to vote.

Although there are many documented reports of non-citizens voting there is no enforcement of the 1996 Illegal Immigration Reform and Immigrant Responsibility Act which makes it a federal crime for non-citizens to vote in any federal or state election, unless authorized by the state. Advocates for legalizing illegal aliens would like the government and the public to believe that those illegally living in the U.S. have no interest in voting. In fact that may be true. But a voter registration card is an immensely valuable tool as it is a document which may be accepted by employers as validation of identification when combined with a Social Security card for employment.

But non-citizens on the voter registration rolls legally nullifies and skews the process of redrawing Congressional and state electoral districts after each U.S. Census is taken. Voter registrations are supposed to be representative of legal U.S. citizens who legally vote. Lawmakers benefit from the illegal representation of unlawful residents and those who illegally register to vote as they are counted as valid constituents.

Additionally, jury pools for jury duty are compiled from a municipality's voter registration records. If illegal non-citizens are chosen for jury duty, they can have a profound impact on the determination of legal decisions. Verdicts by juries in which non-citizens have served on could very well be overturned should it be found out that a non-citizen participated in the jury process in its rendering a verdict.

These are but a few indications of the wide ranging and deep-rooted consequences of what the false document industry has bred. There sadly are many, many more. But ownership of false documents by illegal aliens now begs another question. In order to receive benefit of the path to citizenship which both the Senate and the Bush administration have proposed, will not illegal aliens then need to admit that they have been using fraudulent documents in order to become employed, receive state and federal benefits, receive an education, drive and register to vote? For if they really want to come out of the shadows as their advocates continue to claim, then illegal aliens will have to abide by the law and reveal their true identities. However, that proposition may ultimately prove too foreign for them to bear.

The United States Senate Committee on Commerce, Science and Transportation and its Aviation Sub-Committee held a hearing on May 9, 2006 similar to that of the February 8, 2006 hearing before the U.S. House of Representatives Aviation Sub-Committee. Both were in regard to the proposed Open Skies Agreement between the European Union and the U.S. This latest hearing comes on the heels of newly proposed language from the U.S. Department of Transportation (DOT) concerning the foreign ownership of and investment in U.S. airlines.

What remains at issue is how much "actual control" a foreign airline could presume to have over a U.S. airline as part of the Open Skies Agreement, which the Bush administration had hoped to be ready for finalization by the end of 2006. But that now seems to be unrealistic. There will meetings held in Europe in June 2006 and John Byerly, a senior State Department official, and the head negotiator in the Open Skies talks, will be presenting the recent proposed changes in Brussels the week of May 8th. On May 11, 2006 the Senate in fact will include when voting on its budget bill, whether or not to delay on making a decision on the Open Skies Agreement, until further review.

In question, in both the House and the Senate, has been expressed concern that allowing deregulation of airline traffic internationally must be a decision that the Congress alone decides and that the DOT does not have the unilateral power to revise transportation law which would include parts of the Civil Aeronautics Act of 1938, followed by the Federal Aviation Act of 1958, which created the Federal Aviation Administration, and later on the Airline Deregulation Act of 1978. After the 9/11 attacks of 2001, the Aviation and Transportation Act of 2001 was enacted, creating the Transportation Security Administration, now under the Department of Homeland Security.

As per the 1938 law, U.S. citizens must own or control at least 75% of the voting interest of U.S. airlines. In 1991, DOT proposed increasing foreign ownership interest to 49%, but it was not adopted by the Congress. In 2003, however, the Congress modified the phrase, "which is under the actual control of U.S. Citizens" in the Federal Aviation Act under 49 USC 40102(a)(15) to now read: "a corporation or association organized under the laws of the U.S. or a State, the District of Columbia or a territory or possession of the U.S., of which the president and at least two-thirds of the Board of Directors and other managing officers are citizens of the U.S., which is under the actual control of citizens of the U.S., and in which at least 75% percent of the voting interest is owned or controlled by persons that are citizens of the U.S."

There appears to be plenty of legal precedent already on the books regarding airline ownership and the oversight requirements of the U.S. Congress. But the latest revision in the DOT's proposal by Secretary of Transportation, Norman Mineta, is an attempt to appease the EU and some lawmakers which looks like more redundancy. Regardless, the EU is not budging on its insistence that the U.S. must increase the percentage of foreign ownership of U.S. airlines, and threatening that without such will kill the deal.

Initially, trade negotiations with the EU to loosen up regulations in ownership of U.S. airlines was seen as a tradeoff by the DOT in order for the U.S. to gain greater access to landing at London's Heathrow Airport, for example, and to increase commerce between the 25 EU countries and the U.S. But long before the now infamous 2006 Dubai Ports World deal, lawmakers in both parties felt that this proposition transcended 'free trade' or globalization due to its direct impact on U.S. labor and national security. And the Committee on Foreign Investments in the U.S. (CFIUS) technically did have the law behind it in issuing its approval of the Dubai deal.

But Secretary Mineta, in a statement in November 2005, said that the rule change would be an "historic opportunity to increase travel, reduce fares, expand commerce and bring two continents closer together than ever before. It provides new opportunities for U.S. and European airlines, healthier competition for a growing travel market and greater connection between cities and towns of all sizes on both sides of the Atlantic."

The supplemental proposal announced on May 3, 2006 makes clear that U.S. citizens as members of a U.S. airline's Board of Directors or as the voting shareholders "must retain the authority to revoke decision-making authority that international investors may acquire." For example, board members might decide to revoke international investors' decision-making authority over scheduling and fleet composition if they felt that those decisions were not in their airlines' best interests.

And the revised proposal would supposedly give the U.S. full control over policies such as safety, security and national defense commitments, in the event of a national emergency. However, instead of the U.S. and the FAA dictating jurisdiction over key strategic U.S. assets, that being U.S. airlines, it would appear that such oversight by the Department of Defense and the Department of Homeland Security would be relegated to that of a Chairman of the Board.

According to Jeffery Smisek, President of Continental Airlines, Inc., who has been outspoken and against the Open Skies Agreement as now proposed, stated in the February 8th hearing that "the right to control U.S. airlines would be given away for rights of little to no value for U.S. combination airlines and the customers they serve. London's Heathrow, Europe's largest and most significant airport for U.S.-Europe travel, is closed to entry and would remain effectively closed to additional U.S. airlines, even if the multilateral Open Skies Agreement were signed. This is because absent the provision of competitive, economically viable slots and facilities at Heathrow for U.S. airlines, the greatest single impediment to free and fair U.S.-Europe competition will remain in place." And the Government Accountability Office in its recent report agrees that airport capacity limitations at Heaththrow would not be corrected by such a deregulation agreement.

Should the new rule be adopted, with exception of few areas, all airline operations, including prices, scheduling markets, fleet structure, marketing and alliances have the option of being controlled by foreign investors. Additionally, U.S. labor law protections would be endangered and employees could be replaced by foreign employees. Aviation safety could be jeopardized as foreign-controlled management need only meet minimum FAA standards and on a voluntary basis, falling far short of the programs and practices presently in place in the U.S.

Surprisingly, the Department of Defense as well as the State Department have both agreed with the DOT. But for several Congressmen, it does not pass muster and especially as it concerns the Civilian Reserve Air Fleet (CRAF) which is used to transport U.S. troops and officials in times of national emergencies when there are not enough military aircraft to move personnel.

And although the agreement would provide for the U.S. retaining oversight of the CRAF, if the economic control of a U.S. carrier is controlled by an offshore airline, the foreign airlines' business strategy or country's allegiance could be in direct conflict with the national security needs of the U.S. According to Congressman Peter DeFazio (D-OR), "During the Gulf War a European Union member didn't supply us with a type of carrier we needed when we ran out because they didn't support the war." Given the present anti-American sentiment worldwide, it leaves the U.S. vulnerable.

Captain Duane Woerth, President of the Airlines Pilots Association, Intl., appearing in the February 8th hearing pointed out that "When two or more U.S. carriers are commonly controlled, employees of all of them are subject to the Railway Labor Act and therefore have the same collective bargaining rights and opportunities. This allows the employees on all the affiliated carriers to try to equalize their wages and working conditions. When one of the affiliated carriers is foreign and therefore not subject to the same labor law, employees of all the affiliates are placed at a severe disadvantage, facing the prospect of being bid against each other without effective recourse against the foreign entity allocating work."

The EU, however, has not concerned itself which such issues. The Council of EU Member States, comprised of 25 European countries, has stated that "improvements in the field of ownership and control of U.S. airlines would be an essential element for the deal to be completed." This would require amending the law stating that the U.S. must maintain 75% ownership of its airlines. Other criteria they have demanded is the right to fly between every city in the EU and every city in the U.S. Presently the U.S. and the EU may take off from one destination and land at one destination only. The EU insists in operating without restriction on the number of flights, the aircraft used, or the routes chosen, including unlimited rights to fly beyond the EU and the U.S. to points in third countries. They would have the agreed upon control to set fares freely in accordance with market demand and to enter into co-operative agreements with other airlines, including leasing.

But still very much unanswered by the U.S. government are legitimate questions of concern and the mechanisms which will ensure the continued safety and security of the U.S. and Americans. How will decisions be made pertaining to deal with Department of Defense issues? How will the U.S. retain a position in order to control decisions and activities relating to aviation security, now controlled by the TSA? What controls and policies will be maintained to ensure carrier policies, safety inspections and maintenance?
And how many more jobs must be lost and concessions be made by airline personnel in the interest of free trade?

It would seem that instead of thorough disclosure before the Congress, policy makers rather than elected officials and the respective agencies presently presiding over U.S. airline carriers, have not been invited to the party. Instead, the words protectionism and sovereignty are echoed and stigmatized, in order to intimidate the Congress, the U.S. airlines, labor and American citizens.

And as much as it is repeated that the "world has changed since 9/11," proceeding more cautiously, given the obvious security and energy issues at stake, would make sense. Instead, mere appointees of the U.S. government are given unlimited power to wheel and deal with those in ivory towers. And once again the best interests of the American people are but a blip on the radar screen.

The silence on Capitol Hill has been deafening. On April 28, 2006 the White House announced the approval by President George Bush regarding the Committee on Foreign Investments in the United States (CFIUS) of its recommendation that Dubai International Capital LLC (DIC), a subsidiary of Dubai Holding and a Dubai government owned conglomerate, to assume the U.S. operations of Doncasters Group Ltd.

Just seven weeks prior, there was political posturing, grandstanding and outrage expressed by both political parties in the U.S. Congress when it was revealed, through the U.S. media, that Dubai Ports World, also of Dubai Holding, would takeover the United Kingdom company, Pinisular and Oriental Steam Navigation Co. (P&O), and its port operations of six major East Coast ports. It too had been approved by CFIUS. But now, the American public has heard nary a discouraging word, following this latest transaction.

On December 14, 2005, DIC purchased Doncasters, a privately held United Kingdom-based company, for US$1.24 billion. Doncasters is a leader in international engineering, manufacturing precision components and assemblies for the aerospace industry and military aircraft, components for industrial gas turbine engines used in military tanks, in addition to automotive turbochargers and medical orthopaedic devices. Also, DIC manufactures precision parts for defense contractors such as Boeing, Honeywell, Pratt & Whitney and General Electric.

Presently, Doncasters operates 9 industrial plants located in the U.S., which includes manufacture of turbine fan parts for the U.S. Abrams Battle Tank, and sensitive components for the new F-35 Joint Strike Fighter jet. The plants are based in Connecticut which has two factories and two in Alabama, with one each in Georgia, Massachusetts, California, Oregon, and South Carolina.

Connecticut and Georgia, however, are locations where manufacture of most of the sensitive technologies takes place. Georgia is home to Ross Catherall U.S. Holdings Inc., owned by Doncasters, which now must divest its interest to DIC. Ross Catherall supplies turbine engine blades for the U.S. Department of Defense and the military's tanks. In Connecticut, New England Airfoil Products and Doncasters Precision Castings, manufacture precision alloy parts for both aircraft and tank engine parts.

But the national security implications of a foreign entity operating key factories that are Department of Defense suppliers might well have demanded the same call for scrutiny from the Congress as the P&O deal. According to Senator Charles Schumer, (D-NY), who launched the immediate outcry for the lack of disclosure from both the Bush administration and CFIUS on the ports deal, stated on April 28th that "There are two differences between this deal and the Dubai ports deal. First, this went through the process in a careful, thoughtful way, and second, this is a product not a service and the opportunity to infiltrate and sabotage is both more difficult and more detectable."

Schumer's statement, however, is so transparent that it is now clear to those who were skeptical about the theatrics on Capitol Hill over the ports deal, were more right than they were wrong. For example, the only difference between the CFIUS investigation over the ports and Doncasters deals is that the port deal went through a 30-day investigation, rather than both a 30-day and 45-day review as in the Doncasters deal. The contents of the CFIUS review for the ports deal was revealed but to a handful of Congressional leaders and only subsequent to its recommendation to approve it, due to the outcry to the White House, which was so politically overwhelming.

To date, we do know that the President did distribute some of the classified information on the Doncasters deal to House Speaker, Dennis Hastert, and other undisclosed lawmakers on April 28th. Chairman of the House Homeland Security Committee, Peter King (R-NY), also joining Schumer in his relentless criticism over the ports deal, has been brief in his latest statements regarding the Doncasters deal. "This investigation was a significant improvement over what happened before." But the CFIUS review, presided over by the Secretary of the Treasury, remains a secret process by law, accounting to no party or entity, during its review process. And CFIUS need only enjoin appointed underling representatives of 12 government agencies, including the Department of Defense and the Department of Homeland Security.

Representative John Barrow (D-GA) who represents the Congressional district, in which Ross Catherall is located, has a different point of view than his colleagues in New York, however. "We'll never know if continuing down this path of selling of our national defense industries will end up hurting us in the long run. We all have to draw the line when it comes to selling our national defense establishment. We don't want to outsource our military industrial complex one piece at a time."

Barrow was not satisfied with denial of access as to the status of the CFIUS review or any details forthcoming since the deal has been approved by the President and remains unconvinced that American companies could not make the tank components necessary for the tank engines. He recently visited the Doncasters' facility in Rincon, Georgia, joined by Rep. Ike Skelton (D-MO), ranking member of the House Armed Services Committee. "Doncasters was more forthcoming than our government," Barrow commented, with respect to the proposed deal.

Barrow and various other members of the Congress have proposed numerous pieces of legislation, since the ports deal, to provide more transparency between CFIUS and the Congress. This, they believe, would enable more Congressional input as well as oversight on key transactions involving U.S. national security assets and interests. But when and if such legislation will ever be realized remains in question. And the Congress as a governing body does not have a good track record for oversight generally of any legislation it passes, nor does the Congress project commitment in doing so.

The Bush Administration did add some conditions to the agreement with DIC, however. One included that there would be assurances made that there would be no interruption of the supply stream of product, necessary for military operations, especially in a time of war. In addition, all manufacturing is to remain in the U.S. The need for those two agreement amendments alone implies the dangerous precedent being set with foreign entities having control of strategic U.S. assets. The absence of such language in the agreement would have left the flow of supply and the source of manufacture up to Dubai. Yet, the mechanisms in place in the agreement to police such requirements have not been publicly disclosed nor does the public know if the Congress will eventually get access to the agreement's requirements.

Many U.S. economists project that as long as the U.S. is saddled with an over $800 billion trade deficit as well as being dependent on foreign oil from the Middle East, that more and more U.S. assets, whether strategic or otherwise remain at risk of being sold. While at the moment we do not have any alternatives for direct sources of petroleum, we do have control over which U.S. assets are sold off, keeping in mind the best interests of the American people and the U.S. economy.

But sadly, it appears that the ruckus from Congress over the ports deal not only inflamed the emotions of the American people, with respect to national security being put at risk, but was but a pretense in the name of political expedience. And such equivocation and lack of fortitude from U.S. lawmakers will continue to remain the biggest liability to U.S. national security and for the foreseeable future.

It was in his 2003 State of the Union Address that President George W. Bush expressed his administration's objective to "strengthen global treaties banning the production and shipment of missile technologies." It was thereafter, between 2003 and 2004, in which the Committee on Foreign Investments in the United States (CFIUS) allowed the last manufacturer in the U.S. that provided a key element instrumental in cruise missile guidance, to be relocated to the Peoples' Republic of China.

During this week's U.S. visit of China President, Hu Jintao, and his meetings with President Bush and his advisors, it would be apropos to revisit a strategic corporate deal which occurred over a period of several years. With its finality in 2004, the U.S. now remains totally dependent upon China for key rare earth metals and their production necessary in the manufacture of the most crucial of U.S. military warfare.

The CFIUS decision in January 2006, regarding the approval of the Dubai Ports World Company, to take over port operations of the six largest East Coast ports in the U.S., not only raised many U.S. Congressional eyebrows but set off a strew of newly proposed legislation, to include more transparency between CFIUS and the U.S. Congress. But CFIUS has long had a precedent of approving such business transactions, and the ports deal was only the latest of such. As the deal approval became known to the public via AP reporter, Ted Bridis, in February 2006, apparently even he was more in the loop than the lawmakers on Capitol Hill. However, there have been close to 2,000 other deals approved by CFIUS since its inception in 1988, many of which should have involved and concerned the U.S. Congress much sooner.

It is the lack of accountability of the secret CFIUS committee, presided over by the Secretary of the Treasury, which has only of late concerned the U.S. Congress, and with its machinations just recently disclosed to the public. And it was the Dubai Ports deal which exposed the seemingly arbitrary fashion, and unanswerability to any other branch of government which was disturbing. For the decisions CFIUS makes ultimately becomes the responsibility of the U.S. federal government, while possibly compromising its best interests, including U.S. national security.

As it is, the Department of Defense has problems procuring necessary equipment and manufacture of parts from foreign entities, where national security must be weighed over acquisition of parts from offshore. Yet at the same time, the U.S. government has pushed the concept of global trade, often in direct conflict with the protection and national security of the U.S.

Producing powdered neodymium-iron-boron permanent magnets is critical to enabling control of aircraft and more specifically cruise missiles guidance systems as well as the Joint Direct Attack Munition or JDAM bomb, used prominently in the 2003 bombing of Baghdad, which preceded arrival of U.S. ground troops there. Magnequench UG, although still headquartered in Indianapolis, IN, is the sole provider of specialized magnets for military aircraft systems. But it closed down its manufacturing arm permanently in 2004 and finished relocating operations to China at that time, with its operations now solely controlled by Chinese companies with direct ties to the Chinese government.

Magnequench magnets are produced from a unique patented process of sintering specialty metals. They are used by various electronics and aviation companies, but Magnequench's primary client is the Pentagon, leaving the U.S. in a rather precarious position with China. Enjoying 85% ownership of the world's market of rare earth metals, required for its magnet production, Magnequench's factories are now located in Batou, China. It is there that the world's only operating rare earth mine exists. Thus, China now owns a monopoly on the manufacture of missile magnets which the U.S. military is dependent upon for its most sophisticated technology and weaponry.

Magnequench's relocation culminated following several years of what started out as a General Motors subsidiary company in 1986. General Motors was responsible for the development of the manufacture of a permanent magnet material in the early 1980's and began its production in 1987. In 1995, Magnequench's majority interest was purchased from General Motors by the Sextant Group, which was comprised of two Chinese companies, San Huan New Material and the China National Non-Ferrous Metals Import and Export Corporation. It is reported that few in the industry or in the federal government knew which companies formed Sextant at that time.

Three years later, after commitment from Magnequench CEO, Archibald Cox, Jr., that its two Indiana-based plants would not be shuttered, its assembly line for magnets in Anderson, IN was shipped to China. In 2000, GA Powders, a subsidiary of Magnequench, originally a Department of Energy project, was relocated from Idaho Falls, ID to Tianjin, China. And in 2004 Magnequench's other Indiana plant in Valparaiso, IN, responsible for production of elements of the JDAM bomb was shut down and shipped to China. Although there was an "agreement with GM" from Cox that the plant would remain in Anderson, IN according to Clyde South, a negotiator for the United Auto Workers Local 662, Magnequench proceeded to eliminate all of its domestic manufacturing jobs anyway.

Under the 1988 Exxon-Florio Amendment to the Defense Production Act, President Bush could have ordered San Huan New Materials to divest its holdings in Magnequench, as it manufactured a strategic asset. The President was pressed to do so by Congressman Even Bayh and Congressman Pete Visclosky, both of Indiana in 2003, but the President chose not to intercede. In 1990, however, President George H.W. Bush ordered China's government-owned National Aerospace and Export Company to divest its interest in Mamco Manufacturing of Seattle, WA. At that time it was feared that China would use Mamco to acquire its jet fighter technology.

In addition to this particular example of guidance missile manufacture, the acquisition of titanium is also becoming a problem for the military in procuring spare parts and for its manufacture of its aviation vehicles. The Pentagon continues to have conflicts with the Congress on waiving the Berry Amendment. Enacted in 1941 and updated in 1972, it requires that specialty metals, including rare earth metals, titanium and super alloys, be manufactured in the U.S. for its weapons systems, unless otherwise unattainable. But as more and more American companies relocate offshore, the lines drawn become less and less clear.

And while not appropriate to put the blame of the offshoring of strategic assets on any particular President or branch of government at this time, it is appropriate, however, to see how various factions of the three branches of government, along with the loosening of corporate and industry regulations over the years, have cumulatively jeopardized the interests of the U.S. It is important that lawmakers therefore not become hawkish over the observance of our laws only when it becomes convenient to win political capital, but to how best serve the interests of the U.S. For the ramifications of business as usual when it comes to strategic assets could do irreparable future harm to America's most vital asset, that being the American people.

In the midst of numerous proposals before the Senate regarding legislation concerning the legalization of illegal aliens has arisen a little known provision of the recently signed 2005 Deficit Reduction Act. On February 8, 2006, President George Bush executed a bill into law which now requires recipients of Medicaid benefits to provide either an original birth certificate or passport in order to apply for or to continue to receive their health care benefits, commencing July 1, 2006.

The Medicaid program, available to American citizens who fall into a specified low income bracket, provides health care to adults and children, as well as the elderly and those in nursing homes. While much hand wringing and spin continues in the U.S. Congress regarding how to best deal with the status of illegal aliens, which directly impacts costs of U.S. government entitlement programs, this new requirement has yet to be discussed. As the result of the newly passed Massachusetts universal health care plan, which will include the Medicaid program, the new provision was just publicly revealed.

However, the present requirements for Medicaid require no such documents, relying only upon a signature of the applicant to certify whether or not they are an American citizen. And as a result of the unaccountability for Medicaid fraud abuse over the past several decades, the U.S. government may be penalizing the vast majority of law abiding citizens, according to numerous patient advocates. But the issue is more about the continuing lack of enforcement of U.S. immigration law rather than an attempt to cut down on Medicaid fraud.

According to Families USA, a consumer advocacy organization, the disabled, the mentally ill, the homeless, the elderly and the chronically ill will unfairly suffer as the result of this new proviso, as they would have difficulty accessing copies of birth certificates, and would be far less likely to own a U.S. passport. Therefore, they will be unfairly denied necessary health care beginning as early as July 1st. Meanwhile, hospital emergency rooms may still not turn away any person of any status nor may they ask the legal status of any patient, according to the Emergency Medical Treatment and Labor Act of 1985.

While patient advocates may be correct regarding the most vulnerable being put at risk, on balance it would seem that without addressing social services' access requirements across the board, with respect to illegal aliens, it does seem quite unfair to put this burden only upon Medicaid recipients at this late date in 2006. Furthermore, there are no set mechanisms yet in place nor systems between federal and state governments for enforcement of the law. Such a sweeping change should require administrative oversight by the Center for Medicaid and Medicare and require necessary outreach to patients for this purpose well ahead of such changes.

But perhaps for those desperately trying to get copies of their birth certificates at this time, there could be some breathing room as another debate brews relative to the validity of the law itself, based upon the U.S. Constitution. When President Bush signed S. 1932 on February 8th, according to House Speaker of the U.S. House of Representatives, Dennis Hastert, the President actually signed a different version of the bill than the House of Representatives actually passed.

Representative Henry Waxman (D-CA) on March 30, 2006 stated, "I have learned that the Speaker of the House advised the White House of the differences between the House-passed bill and the bill presented to the President before the President signed the legislation." Representative Waxman is now calling for a Resolution of Inquiry which requests all documents relative to the 2005 Deficit Reduction Act which the President signed on February 8th. So far the White House has failed to respond.

Whether or not Representative Waxman truly cares about the Constitution or is doing that which is politically expedient for himself, is of concern. Firstly, the discrepancy in the Senate Bill signed was different in substance from the House Bill. It impacts some $2 billion in spending for "durable medical equipment" such as wheelchairs and oxygen for those in the Medicare program, which provides health care to the elderly and the disabled. At issue, is the length of leases for durable medical equipment which was 36 months in the House version and 13 months in the Senate version.

During transmission of the final bill to the President, the Senate Clerk made a change to the legislation. It no longer contained the Senate amendment which provided for 36 months for oxygen equipment. The Senate Clerk upon learning of the mistake advised House Republican leaders in January 2006, well before the date of February 8, 2006, the date the President signed the bill. The error failed to be corrected. But according to Article I, Section 7 of the U.S. Constitution, both the House and the Senate must include the same substance and version of a bill which is required for presentation for signature by the President.

So the entirety of the law has been put in jeopardy and could eventually wind up in the Supreme Court, as there exists precedent. In the case of Field v. Clark, 143 US 649 (1892) the Court wrote that the burden would be to prove that the House Speaker and President were deliberate and purposely signing the wrong bill. That in fact is what Waxman contends, when on March 15, 2006 he wrote a letter to then White House Chief of Staff, Andrew Card, "seeking information on the President's knowledge of the bill's constitutional infirmity."

While Waxman's inquiry provides interesting fare for a Constitutional Law class, the scope of the 2005 Deficit Reduction Act is perhaps getting lost. The new Medicaid documents requirement being served up as a tightening of immigration law enforcement is almost laughable. And those patients in wheel chairs and those patients requiring oxygen will most likely not be notified of a cap on their benefits until after that period of 13 months expires. Previous to the 2005 law, wheelchairs and oxygen and durable medical equipment were provided patients indefinitely.

If indeed the President made an error, it should be addressed if anything, to give clarity to the Medicaid and Medicare patients it impacts. And furthermore, should Representative Waxman pursue the legality of the new law, that he would take the approach that it was a procedural oversight which should be either amended appropriately or pursued in the present session of Congress. But it will require the cooperation of both the Congress and the Executive branch of government, keeping in mind the most vulnerable of U.S. citizens. For there must be some measures of government which transcend politics.

The date of April 15th is a date not necessarily fondly referred to by a good many Americans, because it is representative of more anxiety than delight. Nor does the Internal Revenue Service (IRS) elicit terms of endearment even for those who might enjoy an income tax refund upon filing their tax returns each year. But it is specifically the preparation of tax filing which has become ever more complex over the years which continues to lead many filers to third party tax preparers, such as accounting firms and tax preparation services. In order to adequately abide by requirements in the convoluted IRS Code, trust has been extended to tax professionals by many taxpayers in order to avoid the risk of mistakes being made.

Also of concern to taxpayers is not only that their income tax preparation be filed correctly and lawfully, but that the handling of filers' most sacred and valuable information is protected from theft, misuse, or abuse. Therefore, the latest proposed changes to the IRS Code as published in the Federal Register on December 8, 2005, has rallied consumer protection advocates and members of the United States Congress to take issue with such change to Section 7216-3 of the IRS Code. But the recommended changes only came to light to not only the public but to members of Congress, just three weeks before a public hearing on these new rules at the offices of the IRS, which took place on April 4, 2006.

Unfortunately, the period allowed for submitting public comments for the hearing was closed on March 8, 2006 at the same time that the proposed changes were discovered by consumer advocacy organizations and not lawmakers. Disconcerting is the way in which the proposed changes have been drafted and the arguably surreptitious way in which such changes were made as part of an overhaul of the Code, not amended since 1974. Supposedly, the redraft is an effort to modernize the Code with rules relevant to electronic business transmissions and the advent of technology since the 1970's.

The new language will require all taxpayers using a third party tax preparation service to specifically sign documentation which provides for the selling of tax information data to outside marketers, database brokers or financial institutions. Further, signed documentation would be required in order to allow such U.S. tax preparer to offshore such tax work, such as specifically to India. But the interpretation of the actual language in the new proposed Code, including the risks in taxpayers unknowingly signing such papers unaware of their implications, is what has raised doubts. Of concern, is whether the taxpayer will be appropriately warned about what it is they are actually signing, when overwhelmed by a bevy of papers to execute.

According to IRS Commissioner, Mark Everson, the proposed changes actually improve the safeguards of taxpayer information and are "not significant." But upon closer examination, they increase the chances of identity theft and fraud not only throughout the U.S. but across the globe in India, where prevention of security breaches rely largely on an honor code rather than dictated by law. Thus, a U.S. tax return, far greater and detailed than any other personal financial document, becomes ripe for the picking.

Although the basis for the IRS proposed code changes is the use of electronic transmissions and new software technologies in the tax filing system, selling information and offshoring tax preparation do not have a direct bearing upon the mechanics of tax filing. The IRS also argues that the 1974 Code, or our present tax law, already provides for tax preparers to profit off of a tax client's information by selling it. But that information specifically refers to an "affiliated" company of the tax preparer only. With the new changes, tax preparers would be permitted to sell tax information to any third party, affiliated or not.

However, there is a "warning" printed on the consent form for third party permission which clearly states: "Once your tax return information is disclosed to a third party per your consent, we have no control over what that third party does with your tax return information. If the third party uses or discloses your tax return information for purposes other than the purpose for which you authorized the disclosure, under federal tax law, we are not responsible for that subsequent use or disclosure, and federal tax law may not protect you from that disclosure."

Thus, any third party may sell such information to any other third party business without disclosure to the taxpayer nor any accountability on the part of the tax preparer or the IRS, once initial consent is given. The term length of said consent would supposedly be limited to one year. But without accountability mechanisms in place, unenforcement of the term will remain.

How the IRS can argue that such new rule changes would allow for better privacy controls is dubious at best. With respect to privacy controls in India, there is even less scrutiny, as the arm of U.S. law does not extend to any tax preparation in India nor any offshore locality. Steven Ladd, CEO of Copanion, Inc., and a Certified Public Accountant for over 25 years, testified at the IRS Public Hearing on April 4th. He stated, "Security flaws in offshore tax preparation encourage cyber terrorism by those who would victimize every family in our country." Ladd, who operates an accounting firm in New Hampshire, went to Bangalore, India in pursuit of offshoring his own tax preparation business, in order to save on overall costs.

After spending over 60 hours with several large and small firms there, Ladd was "Shocked at the lack of adequate security present at all of them." He said, "Offshore tax preparers (including data entry workers, accountants, supervisors, IT staff, consultants and owners can see the taxpayer's name, address, Social Security number, date of birth, phone number, wages, mutual fund broker, bank and bank accounts with their routing numbers. It is the ultimate pot of gold for an identity thief. 1040's are like an exposed wallet just waiting to be lifted by a career pickpocket." And Ladd specifically proposes adding a warning related to tax preparation outsourced outside of the U.S.

Bankrate.com, a consumer magazine, researched data brokers Choice Point and DocuSearch and the worth of various pieces of data contained in a U.S. tax return: education history $12.00; credit history $9.00; worker's compensation record $18.00; bankruptcy information $26.50; military record $35.00; Social Security number $8.00; date of birth $2.00; address $.50; phone number $.25. And how much other information will potentially be sold from a 1040 form has not been addressed. Not only does a taxpayer enjoy no compensation for the information, advocacy organizations have further warnings. Non-trained tax preparers, unfamiliar with the new rules, or those who gain commission or remuneration for having clients sign off on allowing third party use and offshoring of their information, may potentially exploit the taxpayer.

A letter in March 2006 to IRS Commissioner Everson from 47 state attorneys general stated, "There is simply too much at risk for American taxpayers, particularly with respect to the ongoing scourge of identity theft, to increase the likelihood that their most personal information will be stolen or misused." Senator Barack Obama (D-IL), as well Senator Charles Schumer (D-NY) and other members of Congress, plan on introducing legislation which would ban the sale of tax return information to third party companies, should the new rules be approved. But the law is thus far silent on the offshoring of tax preparation in the future for those filers who prepare their returns themselves.

What does remain clear, however, are the uncertainties with controlling information once taxpayers give consent to either allow their information to be sold to data brokers, marketers or financial institutions or any third party on the open market, without limitation, and/or be offshored. More importantly in the long term, is whether the public trust in the sanctity of the U.S. income tax system will suffer and be irrevocably lost.

Since 2003, the U.S. Department of Homeland Security (DHS) has provided funding for states and urban areas across the country, under its Homeland Security Grant Program, in an effort to improve emergency preparedness, at the local level, in the event of a terrorist attack. Such funding has been available through two types of programs known as the State Homeland Security Grant Program (SHSGP) and the Urban Area Security Initiative (UASI). Both types of funds have consisted of myriad formulas and application requirements which have caused disputes between members of the United States Congress as well as between state governors regarding the amount of allocations doled out, both in the past and presently.

In 2006, when it was thought that the program could not get any more confusing and unfair to certain states and urban areas, the DHS has topped itself yet again. Many lawmakers have been left dumbfounded, since they have so little information and criteria available in the decisions that the DHS has made for Fiscal Year 2006, which began October 1, 2005. In addition, the decisions for FY 2006 will have a direct impact on any forthcoming funding beyond FY 2007, for those urban areas which have been deleted from the eligible list for 2006.

If the aforementioned has left you confused, you are not alone. It is important to note that the two distinctly separate funding programs, although Homeland Security Grant Programs, are more apt now to become supplements to each other, as the amount of funding has been cut for not only 2006 distributions but projected to be further reduced in 2007 as well. The UASI grants for 2006 allot $765 million to 35 urban or metropolitan areas, comprised of various counties, cities and towns in their immediate vicinities. In 2005 there included 50 urban areas and thus the initial outcries this year.

The 2006 eligible urban areas list has left off some major urban regions which were included in 2005 and since the program's inception in 2003, leaving lawmakers and law enforcement with lots of questions. Among the big question marks are San Diego, CA, Las Vegas, NV and Phoenix, AZ, prompting federal, state and local officials to demand answers from the DHS.

The Homeland Security Appropriations Act, originated in 2002, established the SHSGP, which in the past allocated one-half of its funds to be equally divided between all 50 U.S. states including U.S. territories and possessions, with the remaining funds distributed to states based upon population. The system in place in 2006, however, guarantees a minimum amount to each state, but requires each to apply and qualify the need for additional risk-driven funding. Thus, it is incumbent upon each state to essentially prove its case to the DHS for additional allocations. For FY 2006, each state is guaranteed a baseline minimum distribution of $7.13 million in the SHSGP, reserved to concentrate on law enforcement training and preparedness. And since UASI grants are now pared down from 50 to 35, state grants loom even more important, as each year since 2004 the amount of funding for both programs has de-escalated.

In its effort to temper the criticism of pork-barrel rewards for certain states and urban areas least expected to be hit by a terrorist attack, the DHS has reframed its criteria in order for states and urban areas to either qualify for additional funding or in the case of the UASI, for any funding at all. With respect to San Diego, for example, which was eliminated from eligibility for 2006 UASI grants, when questions were asked by state and local lawmakers and officials, it became clear that the formula will not be disclosed because it is classified information, according the Secretary of Homeland Security, Michael Chertoff. In its zeal to remove all doubt that it is not being unfair in its analysis and that politics has not played a part in its decisions, the DHS states that the formula used for risk assessment was derived scientifically by computer calibrations and algorithms, yet so confusing that the DHS cannot even begin to explain them.

It is primarily the confusing new rules, which remain unexplained by the DHS, which has upset officials from both federal and state levels of government all over the country, with quite vocal protests coming from California and Nevada. Governor Arnold Schwarzenegger, and Senator Diane Feinstein of California along with Governor Kenny Guinn and Senator Harry Reid of Nevada have all been outspoken on the issue and have demanded more answers.

San Diego's federal contingent of representatives, which includes Congressman Duncan Hunter, Congressman Darrell Issa, Congresswoman Susan Davis and Congressman Bob Filner, met in February with Homeland Security officials. But frustration was clearly expressed by Representative Filner. Most objectionable was the perceived disregard by the DHS that the county of 3 million residents, sits on an international border, is an international port, houses the largest marine base in the U.S. along with being a major naval base. As well as being a choice tourist destination, it would seem that these factors would be qualifiers for UASI funding for San Diego.

Filner recalls, "San Diego's military bases and ships could be sitting ducks for a terrorist and aren't factored into Chertoff's "disciplined" analysis. I asked whether anyone has the [same] concentration of nuclear things that are a perfect target for terrorists," he said. "Does any other city have three nuclear carriers in their harbor, a dozen or more nuclear submarines and a nuclear power plant? They said, "We don't have those figures, but all of those military assets are "invisible to us," in the DHS' risk calculations," according to Filner.

Rep. Susan Davis' account was similar to Filner's. "The DHS have certain principles they use when evaluating communities, such as transportation systems and populations, but that they haven't really figured in [defense] facilities. What was so darned frustrating was that we expected them to come in with a rationale, but they basically said the [defense] facilities don't quite factor into their assessment. It did seem very strange to us," Davis said.

California Governor, Arnold Schwarzenegger, believes that military installations are not necessarily immune from terrorist attack. And the Mayor of San Diego, Jerry Sanders, points out the vulnerability of the U.S.- Mexican border, especially with recent discovery of sophisticated underground tunnels, in which drugs, contraband and potential terrorists can be funneled into the U.S.

Nevada officials were allowed access to a classified meeting with Secretary Chertoff on March 9, 2006, including Congressman Jim Gibbons, Congressman Jon Porter, along with two top police administrators one of whom was the Las Vegas Metro Police Homeland Security Deputy Chief, Mike McClary. "When their calculations were done, there were areas where there was no data available," according to McClary. "It's a mystery how 10's of millions of hotel guests were left out of the equation," he said. According to Frank Siracusa, Nevada Emergency Management Director, "Different officials at Homeland Security often give contradictory recommendations or simply refuse to answer the questions."

On any given weekend throughout the year, there are upwards of 300,000 hotel occupants on the Las Vegas Strip, many of whom are part of the more than 44 million tourists that arrived at Las Vegas McCarran International Airport in 2005, and growing each year. Why such data was not part of the equation in the assessment for Las Vegas could not be explained by the DHS, but it did offer to provide Las Vegas with another review. Whether or not the security of Hoover Dam was also overlooked in the DHS analysis remains a mystery as well. Las Vegas officials were not given a time frame in which they would get any future official communication from the DHS.

The UASI program is now focused primarily on enhancing the capabilities of local government to prevent, protect against, respond to and recover from any number of catastrophic events. But planning for law enforcement training programs and equipment purchases for localities such as San Diego and Las Vegas will now have to rely solely on "Sustainment" risk funds or "Tier 2" eligible funding, versus "High risk" or "Tier 1" funding.

This means that localities may receive the balance of funding only for those projects which remain incomplete from 2005. Should the DHS find that its oversight of not including tourists in its eligibility analysis of Las Vegas was not an error, thus finding it only eligible for Tier 2 funding in 2006, Las Vegas will have to reapply from scratch in 2007. And if any urban area has two consecutive years of either denied funding or Tier 2 funding, it then remains permanently ineligible for any future UASI funding. Meanwhile, urban areas newly added to the eligible list for UASI funding in 2006 include Orlando and Ft. Lauderdale, FL and Columbus, OH.

And finally, given all of their formulas and 37 capabilities requirements of "investment justification" in order for states and urban areas to be considered for funding from the DHS, it has yet to come up with such a measure of accountability, once funding has been dispersed, in order to realize the effectiveness of its funding. For without follow-up analysis, the DHS, the Congress, and state and local governments and law enforcement will have no clear indicators as to whether their law enforcement programs and preparedness purchases has been money well spent through the funding programs.

And without transparency between the federal and state levels of government, requiring necessary input from local government, the DHS will remain hamstrung in its own red tape, thus weakening the original intent of its grant programs. In order to expedite emergency response preparedness to those areas most likely at risk in the event of catastrophe, without such commitment to accountability the DHS spending programs will serve to create a false sense of security, and ultimately put the U.S. at far greater risk.

Effective on July 1, 2006, it will be more difficult for U.S. students to both become eligible for and borrow federally subsidized student loans, due to legislation signed by President Bush in February 2006. Known as the Budget-Deficit Reduction Bill, it wipes out $12 billion from the federal student loan program. The interest rates will climb to a fixed rate of 6.8 % for a student applying for a federal loan, referred to as the Stafford Loan program, with a capped rate of 8.5% for parents applying on behalf of their child, known as PLUS loans, also subject to additional variable rates. Many parents are considering home equity loans as an alternative, which provide far lower borrowing interest rates.

But with college tuition rates rising each year sometimes more than double the rate of inflation, it is becoming more and more impossible for the middle class to afford a college education. With the federal loan limit for years now remaining at $20,000.00 per school year, it requires many to apply for private bank loans in addition to the federal loan. Many students take as many as seven years to complete an undergraduate degree as they must work full-time at low-paying jobs, in order to afford tuition and living expenses, thus delaying their ascendance into the permanent work force.

According to the Department of Education, as many as 400,000 U.S. students each year forego a higher education entirely, dissuaded by tuition costs and fear of the inability to repay college loans. In the last several years, due to declining interest rates, students were able to consolidate their student loans in order to lower the rates on previous accruing loans. With the new legislation, the fixed rate will preclude them from doing so in the future, regardless of a decline again in interest rates.

The higher education dilemma in the U.S. is rather complex and multi-faceted, however, and universities have already begun to look to other resources in order to fill their coffers by going abroad. That brings us to the present immigration bill making its way through the U.S. Senate which is a far more liberal version than the U.S. House of Representatives' bill which passed at the end of 2005. Buried in the text of the Senate bill is a restructuring of the student visa process, which was largely slowed down after September 11, 2001 and eventually put under the auspices of the Department of Homeland Security by 2003.

In April 2005, President Bush met with King Abdullah Bin Abdul Aziz of Saudi Arabia at his Crawford, TX ranch. At such time, they made an agreement to encourage more Saudi students to receive their undergraduate educations in the U.S. Presently, there are approximately 5,000 Saudi Arabian students studying in U.S. colleges and universities and 15,000 applications in the pipeline, although confirming the exact figures is one momentous task, if not impossible to find.

The deal which King Abdullah proposed to President Bush was to allow 5,000 students per year the opportunity to study in the U.S., with all tuition costs footed by the Saudi Arabian government. The scholarship program, which was not publicly announced by either the White house or the Saudi Embassy, was an attempt for the Saudi government to fast-track the student visa program to which the administration has now agreed.

Of importance, and publicly disclosed and lauded by Maura Harty, the State Department's Assistant Secretary for Consular Affairs, when attending the U.S. University Presidents Summit on International Education, - a two-day forum to promote international education and hosted by Secretary of State Condoleezza Rice in January 2006 - is that the system to expedite the student visa application process has been a top priority since 9/11. She remarked that 500 new consular positions have been added since 9/11; negotiations extended reciprocity agreements reducing the number of times a student must renew or reapply for a visa; directing all U.S. embassies and consulates to put student and exchange visitors at the head of the line when scheduling visa interviews.

Also of note, is that during the 2004-2005 school year, there were 565,039 foreign students enrolled in institutions of higher learning in the U.S., meaning, there now are that many fewer slots for American students when applying to college. But Harty adds, "We do not want to lose a single foreign student and we don't want them to miss the beginning of school, so the State Department has made processing of student and exchange visitor visas a priority at every post."

And alarmingly so in a post-9/11 world, Harty states that "Some 97.5% visa applications are processed within two days, and that the screening process for the 2.5% visa applicants subject to special screening requirements for security reasons has been streamlined, typically taking one week to two weeks." If true, Americans can only dream that other government services flowed so quickly and efficiently for them. In contrast, U.S. students applying for federal loans must wait months to find out the status of their applications and whether or not they will be able to afford the school year's tuition.

But at the heart of the proposed expansion of the student visa program is another issue embedded in the Senate's immigration bill which would raise considerably the amount of H1-B visas allowed, which are allotted to foreign workers to work in U.S. industry on a supposed temporary basis. Beginning in Fiscal Year 2006, the amount of such visas were limited to 65,000 but an additional 20,000 were eventually added, at the 11th hour, for foreigners who graduated from U.S. graduate and Ph.D. programs. In the new bill, measures call for doubling the number of skilled worker temporary visas to 115,000 per year with an option of raising the cap 20% more each subsequent year.

And in a new visa category known as the F-4 visa, students pursuing advanced degrees in science, technology, engineering, or mathematics would be granted permanent U.S. residence if they find a job in their field. They would only be required to pay a fee of $1,000.00. The rallying cries from such notables as Microsoft Chairman, Bill Gates, and Sun Microsystems CEO, Scott McNealy, have made it clear that they desperately need the government to increase the number of H1-B visas. But telling, as Microsoft's Manager for Federal Affairs, Marland Buckner, states, "It's in the best interests of Microsoft and we believe in the best interest of national competitiveness from an innovation standpoint, to bring as many smart people to the U.S. as possible." Bill Gates wants no restrictions at all on H1-B visas.

But according to Ron Hira, Vice President of IEEE-USA, an organization representing 225,000 electrical and computer engineers, says, "Many U.S. companies don't even bother to recruit Americans because they can find foreigners willing to work longer hours for less pay." But with business and science leaders focusing almost exclusively on loosening laws in order to acquire foreign talent, they are seemingly turning their backs on educating Americans first, necessary to maintain a thriving, innovative economy for Americans.

Much like all other sectors of our government as well as commercial industry, both lawmakers and CEO's myopically concentrate on the bottom line, while the U.S. educational system is being systematically abandoned and essentially dismantled. By not providing future livelihoods for future generations of Americans all in the name of globalism, the U.S. may find itself incurably behind, not only in terms of innovation but in terms of a basic standard of living. How can we expect our students to compete with such an agenda if they are no longer the top priority?

On March 5, 2006, CBS television news magazine, 60 Minutes, featured a report titled, "Hospitals: Is the Price Right?" The piece concentrated on the soaring costs of hospital care, specifically for uninsured Americans and the exponentially higher charges they are billed, which can be up to four times more than the same services directly billed to health insurance companies. The information was valid and fairly detailed regarding such costs, largely based upon information provided by patient advocate and community activist, K.B. Forbes, known for his Spanish language radio talk show out of Los Angeles, CA and also known as former press secretary for Conservative, Pat Buchanan. Forbes is the Executive Director of the Council for United Latinos, his small organization in East Los Angeles, where he has been taking on major hospitals across the United States regarding their unfair billing practices since 2000.

But 60 Minutes' coverage of the topic seems all the more remarkable, as it was presented as being a recent phenomenon. These crises amongst middle class families are not news and have been present for years. It is an issue, however, which continues to get worse and worse as U.S. healthcare costs have continued to rise approximately 15% each year since the late 1990's. In addition, is the lack of uniformity between insurance providers and types of coverage offered, which remains a constant problem. More importantly, the lack of a comprehensive presentation by 60 Minutes on the contributing factors for how these families and thousands of others like them are made vulnerable by the present healthcare systems in place, was not accomplished by CBS, but remains important to understand.

Without devoting more time and explanation, 60 Minutes did those under-educated on the topic a disservice. No employed adult, retiree, or disabled American is immune from recognizing the impact of spiraling and out of control costs for hospital care, outpatient care and pharmaceutical expenses. Even if an employer is still picking up most of the charges, more and more employers are requiring employees to pay higher deductibles and larger co-pays. According to the Kaiser Family Foundation and the Health Research Educational Trust, premiums for employed individuals in 2005 averaged $10,880.00 annually for family coverage or $907.00 per month and $4,024.00 or $335.00 per month for individual coverage.

However, why costs are so high is a composite of several factors. However, many CEO's and policy makers at the state and federal levels continue to remain silent in constructively addressing such. Massive layoffs in both the manufacturing and white-collar work forces in lieu of cheaper and benefit-free labor offshore, powerful lobbyists in both the healthcare and pharmaceutical industries having their way with the U.S. Congress, and the non-stop flow of illegal aliens through U.S. borders and ports of entry, collectively have eroded a once healthy healthcare system.

The U.S. is the only industrialized nation in the world which has based the majority of its healthcare coverage on employer provided plans. The U.S. middle class, as it grew in the post-war 1940's, was able to rely at that time and until the end of the 20th century, on healthcare costs being absorbed by its employers. It was a way for industry to retain good workers while making a commitment to preventative healthcare, thus ensuring a healthier workforce. However, in what seems a relatively short time, the destabilization of healthcare affordability has seen the most damage manifested within the last five years.

Missing from the 60 Minutes presentation, for example, is that the referenced 5,000 hospitals across the U.S. have had to bear the brunt of 50% of unpaid costs for emergency room medical care. While some illegal aliens are on Medicaid, those who are indigent are entitled to free care under the Emergency Medical Treatment and Active Labor Act (EMTALA) of 1985. Hospitals are thus obligated to treat the uninsured without an obligation of reimbursement from the state or the federal government. Estimates of free emergency care to illegal aliens is between 25% and 40% of said indigent care. And while federal legislation was signed into law in May of 2005 allowing states to apply for grants for some federal reimbursement, it does not begin to approach, for example, the $500 million the state of California alone spent on non-reimbursed costs in 2005. It is only eligible for a maximum of a total $70 million reimbursement.

But EMTALA was perceived as a safety net for the indigent and infirm, long before the U.S. had an open border policy and long before hospitals would ever conceive of offsetting their shortfalls upon the backs of working and middle class Americans who have fallen on bad times, through no fault of their own. 60 Minutes also failed to expand upon why middle class Americans can find themselves near bankruptcy. Yes, the piece was about the fact that a working man was asked to pay a $250,000.00 bill for the same services which would total only $50,000.00 had it been billed through an insurance provider. But that is only part of the story.

There are major corporations laying off workers and giving them the choice of either severance pay or healthcare benefits, but not both. There are more and more corporations which employ a combination of independent contractors, temporary hires and outsourced personnel in order to avoid providing healthcare benefits. There are those laid off individuals who lose their medical insurance once they are laid off and because they have pre-existing conditions, defined as anything from a broken arm to diabetes depending on the insurer, can no longer get insurance. There are spouses of laid off personnel who have insurance but are not accepted into their spouses plan for the same reason. And there are those individuals with medical insurance who can have deductibles as high as $2,000 with coverage for only 50-80% of the total bill.

Even without the hospital costs quadrupled, paying off thousands of dollars of a large balance due can be insurmountable, even for a family with an average income of $50,000.00. The little publicized fact is that families declaring bankruptcy as the result of medical debt, at some point were insured. But it only takes an unexpected illness or catastrophic accident to set back those working families, sending them into financial crisis. As illness results in loss of income or disability, thus leading to loss of coverage, the bills can spiral out of control from there. And in the event of a job loss, at non-profit hospitals which do offer "charity care," it is rarely offered to patients with assets such as a home. The hospitals merely turn over the bills to collection agencies which can and do put liens on patients' property.

Yes, we have been hearing since Bill Clinton ran for president the first time around that 45 million Americans do not have health insurance. But given the quickening of the global economy, an average of 3 million illegal aliens crossing the border each year, and medical care costs escalating by double digits annually, accompanied by less and less accommodating insurance plans, it would be hard to believe that that figure has remained stagnant since 1992. It suggests that 45 million is the total without a tally of illegal aliens receiving free medical care. That way, it does not require an acknowledgement by the federal government that the illegal population is a contributing factor to the problem.

While the federal government welcomes a global economy, lawmakers still do not welcome the chore of dealing with a fractured healthcare system which in the not too distant future threatens to provide only for the poorest and those in the top income brackets. But preventative health may soon become a thing of the past for the middle class, forcing many between the middle class and working class to fall through the cracks. The lesson here is that there needs to be an honest discussion not only about healthcare costs, but accessibility to healthcare for those who are willing to maintain their health. For without it, there will be no tax base in which to keep America's hospitals and healthcare providers afloat. And in order to have an honest discussion both the media and government must acknowledge how subsidies are being spent and finally admit that there are too many deserving Americans who are being left behind.

As the story unfolds, it is perhaps important to gain some perspective on the underlying facts and historical context of the United Arab Emirates based Dubai Ports World (DPW) since its takeover of London based Peninsular and Oriental Steam Navigation Co. (P&O), before political allegiances and commercial interests totally obscure the main issues at hand. In addition, the capacity of the United States Coast Guard to employ national security processes at U.S. ports of entry has come under much scrutiny, not only since said proposed deal was unveiled to the American people, but as far back as September 11, 2001.

The DPW Company was formed as recently as September 28, 2005. As the result of a merger between Dubai Ports Authority and Dubai Ports International (DPI), two Dubai state-owned facilities, it believed it had a legitimate shot at overtaking P&0. In January 2005, DPI acquired CSX World Terminals. Of note is that U.S. Secretary of Treasury, John Snow, was the CEO of CSX Terminals until January 31, 2003 and was sworn in on February 3, 2003. Secretary Snow has said he has since divested all interest in CSX worth some $72 million, although he continues to receive deferred compensation from CSX reportedly between $5 million to $25 million according to Senator Christopher Dodd (D-CT).

The Committee on Foreign Investments in the U.S. (CFIUS), headed by Secretary Snow, approved the United Arab Emirates taking over port operations of six major U.S. ports in addition to 29 terminal operations on January 16, 2006, having completed an assessment report on December 5, 2005. Among the ports to be included in the deal are Corpus Christi, TX and Beaumont, TX which receive heavy U.S. military equipment shipments including helicopters. U.S. troops also sail on U.S. ships from these two ports. The deal was finalized by DPW's shareholders on February 13, 2006 after $6.5 billion of the $6.85 billion purchase price was successfully financed by Barclay's Capital, the investment arm of Barclay's Bank and Deutsche Bank AG.

CFIUS supposedly went through a 30-day investigatory process in approving the deal, and now acknowledged by Secretary Snow that actually underlings of twelve different U.S. agencies including the Department of Homeland Security and the Department of Defense were responsible for vetting the deal, thereby ruling out national security concerns. However, although we have been given assurances by Secretary of Homeland Security, Michael Chertoff, that the U.S. Coast Guard was involved in the vetting process it is now clearer that they were only peripherally involved in the final assessment.

According to White House spokesman, Scott McClellan, "The intelligence community did assessments to make sure that there was no national security threat." But intelligence officials now claim that the Community Acquisition Risk Centre known as CARC, overseen by the Office of Intelligence chief, John Negroponte, whose agency was just formed in October 2005, had been asked to begin work on the DPW acquisition as late as November 2005. But CARC's first director, William Dawson, was only appointed in January 2006. CARC has little to do with counterterrorism activities but is mandated to assess security risks posed by companies doing business with the intelligence community. Thus, all agencies apparently were told that the security issues were vetted and complete when it was CARC which made the security vulnerability assessment.

Prior to CARC's investigation and vetting of the DPW deal, the U.S. Coast Guard filed an assessment report in December 2005 with CFIUS on port security concerning the DPW deal, which came to light on February 27, 2006 before the Senate Homeland Security and Governmental Affairs Committee, chaired by Senator Susan Collins (R-ME). Senator Collins remarked, "This report suggests there were significant and troubling intelligence gaps." She was referring to the language included in the report that stated that questions were raised by the Coast Guard that foreign influence, employees and operations made it impossible to assess the threat level by a state-owned Dubai company's purchase of a firm to manage terminal operations of six U.S. seaports. However, according to testimony by Treasury Secretary Snow in the same hearing, the U.S. Coast Guard report was given to CFIUS after December 5, 2005 when the CFIUS assessment process had already been completed. Therefore, the U.S. Coast Guard's report was not part of CFIUS' final determination.

The mixed messages continue and will become unwieldy as time passes, particularly as politics entwines itself into the process. And there is no shortage of discrepancies as concerns the operations of the U.S. Coast Guard with respect to security operations. And testimony of Admiral Thomas H. Gilmour, Assistant Coast Guard Commandant for Marine Safety, Security and Environmental Protection, tried to rebuff any of Senator Collins' doubts, stating that she was taking that part of the report out of context and that the report, "concludes that DP World's acquisition of P&O, in and of itself, does not pose a significant threat to U.S. assets in ports."

The U.S. Coast Guard continues to struggle to ensure security of U.S. ports due to a lack of necessary funding and aged equipment, nonetheless. Although Homeland Security Secretary, Michael Chertoff, has tried to assure the American people that his agency would still see that the U.S. Coast Guard and U.S. Customs and Border Protection oversee port security, they have only been able to do a marginal job, in spite of mandates since September 11, 2001. The U.S. largely remains vulnerable from inadequate security at points of origin, where manifests are the sole system used for checks and balances of cargo containers.

And there has been disingenuousness concerning the hierarchy of how the various agencies work in concert at U.S. ports. After 9/11, both the U.S. Congress and the White House enacted myriad regulations and legislation to provide better port security, namely the 2002 Maritime Transportation Safety Act, to standardize individual vessel and port security plans and gave the U.S. Coast Guard more duties. But most of the mandates either remain under-funded, yet to be realized, or both. More obvious and perhaps more simple to implement funding for is a plan to standardize security badges to maritime workers, now only required to show a state driver's license as identification. A new security badge program is finally slated to begin in April 2006. The Coast Guards' fleet is in need of replacement as most of its vessels are more than 50 years old.

But far more complicated is oversight of foreign-based containers and manifests. And the security of both foreign and domestic ports falls under the auspices of a conglomerate of agencies which includes U.S. Customs and Border Protection, the U.S. Coast Guard, terminal and vessel operators, state and local port authorities, as well as state and local law enforcement.

The regulatory requirements which went into effect in 2003 with the Maritime Transportation Safety Act requires port or terminal operators be responsible for security for its own facilities or the area within the port where cargo is loaded, unloaded or transferred, according the Department of Homeland Security. In addition, port operators are to conduct their own assessments of its assets with the federal government or U.S. Customs and Border Protection providing an overall role. Port operators and owners must mitigate their own security vulnerabilities, not the U.S. Coast Guard or U.S. Customs and Border Protection. The U.S. Coast Guard approves those security plans and is only responsible for overseeing that specific security plans are maintained.

For further clarity, as ships initially dock at U.S. ports, the U.S. Coast Guard has jurisdiction of said ships. After the ship docks, U.S. Customs and Border Protection oversee unloading operations. Thereafter, the ship's cargo becomes the responsibility of the port operator.

According to Stephen Flynn, a former U.S. Coast Guard commander and now a Senior Fellow at the Council on Foreign Relations, "When Customs says it screens 100% of the cargo, that simply means it scrutinizes the paper work of cargo manifests and of ships headed for the U.S., looking for things that might raise a red flag."
Presently, approximately only 5% of those containers, which raise red flags, are singled out for assessment such as whether a seal is broken, or a container comes from an unfamiliar company or shipper. Use of large gamma x-ray machines can then be used which can expose changes in the density of its contents. Rarely is a container searched by hand, due to the time consumption, which could take up to five hours.

"They're making their best guess about what they think is a high risk material ….but they assume that the other 95% has come from trusted shippers, known shippers, name brand companies that are not involved with
terrorism," says Flynn. And although the White House keeps insisting otherwise, protection for most of all port facilities are the responsibility of the port operators and left up to gate guards and night watchman, for example, when incomplete inspections are left for the next day, while ships sit at their respective docks, uninspected, if at all.

Unregulated directly by the federal government, port operators administer the contents of the cargo once it is unloaded and its manifests are checked. And manifests, processed by U.S. Customs and Border Protection still remain on an honor system from ports abroad. But ports consist of far more than a dock, and can include warehouses, factories, refineries, bridges and various types of infrastructure. The port operator is responsible for lighting, fencing, locks and background checks of its employees as well as its entire various infrastructure.

Once U.S. Customs and Border Protection receives the manifests in the U.S., should agents see a red-flag they then contact the operator of the port of origin and are reliant upon that country's security agent to do some kind of inspection or investigation. At best, it is a flawed system without the manpower or funding for more technology to better inspect containers arriving on U.S. shores.

But without mitigating obvious risks in ports of origin in parts of the world where terrorists are known to have access to harm Americans, appears fool hardy. It would seem then, regardless of what transpires as the result of congressional hearings and a more thorough investigation now granted for the DPW deal, that the U.S. government and its elected representatives must become more familiar with available resources and systems in place at U.S. port operations, in need of direct funding. For whatever arrives on U.S. docks will ultimately travel on myriad trains, trucks and aircraft throughout communities of America. In a post 9/11 world, we can no longer afford to unnecessarily take risks with strategic U.S. assets when we know we can do a far better job.

The United States Department of Transportation (DOT) on February 8, 2005, presented its decision before the U.S. House of Representatives House Aviation Sub-Committee, to change a rule which would clear the way for foreign corporations to own and control U.S. airlines. But members of the House Aviation Sub-Committee were all in agreement that the DOT may lack the legal authority to unilaterally make such a change. Yet it does not begin to reveal all of the implications of such a historic shift in policy in bypassing the U.S. Congress in order to do so.

Trade negotiations with the European Union to loosen up regulations in ownership of U.S. airlines is seen as a tradeoff by the DOT in order for the U.S. to gain greater access to landing at London's Heathrow Airport, where presently only American Airlines and United Airlines have limited service there. Known as the Open Skies Agreement, lawmakers in both parties believe that this proposition transcends 'free trade' or globalization as it becomes an issue which directly impacts labor and national security.

Currently, U.S. law requires that U.S. airlines must be under the "actual control" of U.S. citizens in order to be licensed for operation. And for corporations, 75% of the voting interest must be held by U.S. citizens and 66% of its board of directors and officers must also be U.S. citizens. But Secretary of Transportation, Norman Mineta, in a statement in November 2005 said that the rule change would be an "historic opportunity to increase travel, reduce fares, expand commerce and bring two continents closer together than ever before. It provides new opportunities for U.S. and European airlines, healthier competition for a growing travel market and greater connection between cities and towns of all sizes on both sides of the Atlantic."

But the President of the Air Line Pilots Association, Intl. has a much different opinion. Captain Duane Woerth testified before the House Aviation Sub-Committee claiming, "Changes of this magnitude should be undertaken not be an administering agency but by the legislative branch. Pilots spend their entire careers accumulating the seniority required to gain access to international flying opportunities. In an era when the career expectations of pilots and other airline workers already have been repeatedly frustrated by airline bankruptcies, furloughs, wage concessions, pension plan terminations, and the like, it would be a crowning blow for the U.S. government now to adopt a policy that would tend to eliminate international flying by U.S. carriers."

Should the new rule be adopted, with exception of few areas, all airline operations, including prices, scheduling markets, fleet structure, marketing and alliances have the option of being controlled by foreign investors. Additionally, U.S. labor law protections could be compromised and employees forced into losing out by being replaced by foreign employees. Aviation safety could be jeopardized as foreign-controlled management need meet only minimum FAA standards, far short of the present programs and practices U.S. airlines presently accord.

Surprisingly, the Department of Defense as well as the State Department have agreed with the DOT on this issue. But for several Congressmen, it does not pass muster and especially as concerns the Civilian Reserve Air Fleet (CRAF) which is used to transport U.S. troops including in times of war. The Open Skies Agreement would have to be redrafted to accommodate such. According to Rep. Peter DeFazio (D-OR), "During the Gulf War a European Union member didn't supply us with a type of carrier we needed when we ran out because they didn't support the war."

Should the Congress fail to create legislation to block the proposed rule it would take effect, even though most U.S. airlines with the exception of cargo carriers, FEDEX and UPS as well as United Airlines, having recently reemerged from bankruptcy, are opposed to it. John Byerly, Deputy Assistant Secretary of State has maintained that in order for the EU to approve the Open Skies Agreement it is conditional on easing foreign ownership rules. But according to the Government Accountability Office, airport capacity limitations such as at Heaththrow would not be corrected by a deregulated agreement.

Rep. James Oberstar (D-MN), ranking Democrat on the House Transportation and Infrastructure Sub-Committee, in order to counter the proposed rule change introduced legislation that would require the rule be put on hold for one year, allowing the Congress to review its ramifications on national defense and homeland security, which are primary issues which must initially be addressed.

And while possible ownership of U.S. airlines may be permitted within a year, control of operations and security of six U.S. ports will be given to the United Arab Emirates and based in Dubai. The London-based Peninsular and Oriental Steam Navigation Co. was purchased on February 13, 2006 by Dubai Ports World. The deal is expected to be finalized on March 2, 2006. Peninsular and Oriental Steam Co. is the world's fourth largest ports company and the sale affects the commercial U.S. ports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The Committee on Foreign Investment in the U.S. (CFIUS) is a secretive government panel comprised of designees from the Department of Treasury, the Department of Defense, the Department of Justice, the Department of Commerce, the Department of State and the Department of Homeland Security. In January 2006, the Bush administration appointed a former Director of Operations for Europe and Latin America for Dubai Ports World as the new Maritime Administrator within the Department of Transportation, raising more than a few eyebrows.

But most puzzling to lawmakers is how Dubai, which provided most of the financing for the 19 hijackers on 9/11/2001, will now be overseeing the very port where nearly 3,000 lives were claimed that day. And Dubai was the base for much of the terrorist planning and operations for the attacks in New York and Washington, according to the FBI.

Since the Bush administration considers Dubai and the UAE a vital ally in the war against terrorism, it approves of the sale. However, it raises vital questions of U.S. national security and homeland security policies at ports where presently less than 5% of all cargo is inspected. And having an Islamist nation in charge of U.S. ports arguably makes little sense in allowing it to dictate port operations, given that U.S. ports remain top terrorist targets.

With the Department of Homeland Security still struggling to implement systems and operations to secure U.S. ports, allowing Dubai to run the ports could be a gateway for contraband, weapons of mass destruction and arsenals, as well as hiring practices without proper scrutiny, including the quality of security which would have to conform to U.S. law. Steve Coleman, Port Authority of New York/New Jersey spokesman stated, "We need to take a real close look at security before we approve such a company."

James Lewis, a former State and Commerce Department contractor, sums it up by saying, "It's in Dubai's interest to make sure this runs well." And unfortunately, it will take an act of Congress to prevent the finality of the sale in what will become the world's second largest port operator. Hopefully, cooler heads in the Congress will prevail in the best interests of the U.S. in order to supercede those of foreign interests, all in the name of globalization. For the greatest asset to the U.S. is the American people, who not only deserve the protection of their government but one which vows to do its best to prevent terrorism on its shores ever again. Anything less is just unacceptable.

The United States Department of Transportation (DOT) on February 8, 2005, presented its decision before the U.S. House of Representatives House Aviation Sub-Committee, to change a rule which would clear the way for foreign corporations to own and control U.S. airlines. But members of the House Aviation Sub-Committee were all in agreement that the DOT may lack the legal authority to unilaterally make such a change. Yet it does not begin to reveal all of the implications of such a historic shift in policy in bypassing the U.S. Congress in order to do so.

Trade negotiations with the European Union to loosen up regulations in ownership of U.S. airlines is seen as a tradeoff by the DOT in order for the U.S. to gain greater access to landing at London's Heathrow Airport, where presently only American Airlines and United Airlines have limited service there. Known as the Open Skies Agreement, lawmakers in both parties believe that this proposition transcends 'free trade' or globalization as it becomes an issue which directly impacts labor and national security.

Currently, U.S. law requires that U.S. airlines must be under the "actual control" of U.S. citizens in order to be licensed for operation. And for corporations, 75% of the voting interest must be held by U.S. citizens and 66% of its board of directors and officers must also be U.S. citizens. But Secretary of Transportation, Norman Mineta, in a statement in November 2005 said that the rule change would be an "historic opportunity to increase travel, reduce fares, expand commerce and bring two continents closer together than ever before. It provides new opportunities for U.S. and European airlines, healthier competition for a growing travel market and greater connection between cities and towns of all sizes on both sides of the Atlantic."

But the President of the Air Line Pilots Association, Intl. has a much different opinion. Captain Duane Woerth testified before the House Aviation Sub-Committee claiming, "Changes of this magnitude should be undertaken not be an administering agency but by the legislative branch. Pilots spend their entire careers accumulating the seniority required to gain access to international flying opportunities. In an era when the career expectations of pilots and other airline workers already have been repeatedly frustrated by airline bankruptcies, furloughs, wage concessions, pension plan terminations, and the like, it would be a crowning blow for the U.S. government now to adopt a policy that would tend to eliminate international flying by U.S. carriers."

Should the new rule be adopted, with exception of few areas, all airline operations, including prices, scheduling markets, fleet structure, marketing and alliances have the option of being controlled by foreign investors. Additionally, U.S. labor law protections could be compromised and employees forced into losing out by being replaced by foreign employees. Aviation safety could be jeopardized as foreign-controlled management need meet only minimum FAA standards, far short of the present programs and practices U.S. airlines presently accord.

Surprisingly, the Department of Defense as well as the State Department have agreed with the DOT on this issue. But for several Congressmen, it does not pass muster and especially as concerns the Civilian Reserve Air Fleet (CRAF) which is used to transport U.S. troops including in times of war. The Open Skies Agreement would have to be redrafted to accommodate such. According to Rep. Peter DeFazio (D-OR), "During the Gulf War a European Union member didn't supply us with a type of carrier we needed when we ran out because they didn't support the war."

Should the Congress fail to create legislation to block the proposed rule it would take effect, even though most U.S. airlines with the exception of cargo carriers, FEDEX and UPS as well as United Airlines, having recently reemerged from bankruptcy, are opposed to it. John Byerly, Deputy Assistant Secretary of State has maintained that in order for the EU to approve the Open Skies Agreement it is conditional on easing foreign ownership rules. But according to the Government Accountability Office, airport capacity limitations such as at Heaththrow would not be corrected by a deregulated agreement.

Rep. James Oberstar (D-MN), ranking Democrat on the House Transportation and Infrastructure Sub-Committee, in order to counter the proposed rule change introduced legislation that would require the rule be put on hold for one year, allowing the Congress to review its ramifications on national defense and homeland security, which are primary issues which must initially be addressed.

And while possible ownership of U.S. airlines may be permitted within a year, control of operations and security of six U.S. ports will be given to the United Arab Emirates and based in Dubai. The London-based Peninsular and Oriental Steam Navigation Co. was purchased on February 13, 2006 by Dubai Ports World. The deal is expected to be finalized on March 2, 2006. Peninsular and Oriental Steam Co. is the world's fourth largest ports company and the sale affects the commercial U.S. ports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The Committee on Foreign Investment in the U.S. (CFIUS) is a secretive government panel comprised of designees from the Department of Treasury, the Department of Defense, the Department of Justice, the Department of Commerce, the Department of State and the Department of Homeland Security. In January 2006, the Bush administration appointed a former Director of Operations for Europe and Latin America for Dubai Ports World as the new Maritime Administrator within the Department of Transportation, raising more than a few eyebrows.

But most puzzling to lawmakers is how Dubai, which provided most of the financing for the 19 hijackers on 9/11/2001, will now be overseeing the very port where nearly 3,000 lives were claimed that day. And Dubai was the base for much of the terrorist planning and operations for the attacks in New York and Washington, according to the FBI.

Since the Bush administration considers Dubai and the UAE a vital ally in the war against terrorism, it approves of the sale. However, it raises vital questions of U.S. national security and homeland security policies at ports where presently less than 5% of all cargo is inspected. And having an Islamist nation in charge of U.S. ports arguably makes little in allowing it to dictate port operations, given that U.S. ports remain top terrorist targets.

With the Department of Homeland Security still struggling to implement systems and operations to secure U.S. ports, allowing Dubai to run the ports could be a gateway for contraband, weapons of mass destruction and arsenals, as well as hiring practices without proper scrutiny, including the quality of security which would have to conform to U.S. law. Steve Coleman, Port Authority of New York/New Jersey spokesman stated, "We need to take a real close look at security before we approve such a company."

James Lewis, a former State and Commerce Department contractor, sums it up by saying, "It's in Dubai's interest to make sure this runs well." And unfortunately, it will take an act of Congress to prevent the finality of the sale in what will become the world's second largest port operator. Hopefully, cooler heads in the Congress will prevail in the best interests of the U.S. in order to supercede those of foreign interests, all in the name of globalization. For the greatest asset to the U.S. is the American people, who not only deserve the protection of their government but one which vows to do its best to prevent terrorism on its shores ever again. Anything less is just unacceptable.

The United States of America has historically enjoyed self-sufficiency in times of both war and peace but in order to better assess its present place in the world as concerns its military and economic strength, it is important to reflect on its foundation. There is daily talk from Wall Street to Capitol Hill with respect to spread sheets and global policy, but it perhaps falls short when it comes down to addressing the average U.S. wage earner, and how both will ultimately affect jobs and the country's national security and defense.

It is important to note, that as our forefathers were fighting for independence from England during the Revolutionary War, seldom do we hear about the underlying and overwhelming task they endured in order to supply an army without an industrial base. In order for success, the Colonies depended upon France and the Netherlands for everything from blankets and clothing to gunpowder, muskets, munitions, and food. Benjamin Franklin bartered a deal with France to ship across the Atlantic Ocean by way of the Netherlands' St. Eustatius Island, in order for George Washington and his troops to have the means to defend themselves.

In light of the French Revolution at the turn of the 18th century, when the Netherlands were seized by Napoleon and President John Adams came close to war with France, a primary U.S. ally just years earlier, self –sufficiency was the order of the day. In 1791, Alexander Hamilton, the first U.S. Secretary of the Treasury, was asked by President George Washington and the U.S. Congress to officially document U.S. policy on industrial and military self-sufficiency. It read, "Not only have the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitation, clothing and defense. The possession of these is necessary to the perfection of the body politic: to the safety as well as to the welfare of the society."

The Industrial Revolution of the 19th century secured the U.S.policy of self-sufficiency, transforming it into a global power. Due to the strength of its industrialization the U.S. was able to defeat its enemies in World War I. With the advent of the automobile, which Henry Ford learned to mass-produce, weaponry and machinery produced for World War II benefited from the automobile factory. Production of Sherman tanks, Army jeeps, airplanes and PT boats evolved from such civilian U.S. factories. And in the 1950's the industrial base was modernized for the Korean War effort.

The industrial base and manufacturing for the U.S. military were necessarily intertwined. But following the end of the Cold War there has been a deliberate decomposition of U.S. industry, unprecedented in American history. There are a number of factors which have contributed to U.S. dependence on foreign trade, primarily with India and China, which has not only led to millions of U.S. manufacturing and engineering jobs permanently lost, but paints a grim picture for the long term stability of the U.S. military supply line.

The dependence on foreign oil and the subsequent OPEC oil embargo in the 1970's, the U.S. policy of deregulation of corporations of the 1980's, the passage of the North American Free Trade Agreement (NAFTA) in 1994, and the World Trade Organization (WTO) in 2001 allowing China to become a member, collectively accelerated U.S. dependence on cheap labor offshore. Thus, dependency and reliance on suppliers from all over the world for military equipment and machinery components and parts, required for their manufacture, leaves the U.S. vulnerable.

The Defense Department runs a program called the Diminishing Manufacturing Sources and Materials Shortage (DMSMS) at the Tank Automotive and Armaments Command (TACOM). Its purpose is to identify shortages of parts, processes and materials necessary to procure for military buyers. A problem for military acquisitions has been procuring weapon system metal castings as a direct result of plant closings. The majority of castings now come from China and other third-world countries. Along with the foreign dependence on metal castings manufacture its research and development also followed the foundry industry offshore.

DMSMS program managers are aware that there are problems in finding sub-parts and components. Not only have replacement parts started to rapidly diminish, but the chemicals needed in their manufacture have as well. Without specific chemicals certain processes cannot be done. For example, there is only one company left in the U.S. that produces a roller cutter for armored plate or heavy steel which was an indirect consequence of supplying armor kits for U.S. Humvees in the War in Iraq. When the Pentagon learned there was an immediate need at the end of 2004, it called for expediency in their manufacture. Sadly, it took almost a year due to the limited facilities producing such.

Another issue arose when a foreign corporation purchased the only U.S. company which produced a chemical used for a common binder which secures windows and aluminum panels in aircraft. The company eventually folded when it could not meet Occupational Safety and Health Administration (OSHA) and Environmental Protection Agency (EPA) standards. Now the U.S. must depend on the company's offshore subsidiaries.

Similarly, the bearing industry which produces ball-bearings, roller-bearings and anti-friction bearings is an endangered U.S. industry, key to the production of military gear and plays a part in homeland security. They are components necessary to produce electric motors for conveyor belts such as in factories, steel mills, in airports, in mining, and with the equipment used to manufacture automobiles. And bearings are critical to the mechanical components of major weapons systems. Losing bearings manufacturing to foreign shores directly impacts the capabilities of weapons manufacturing should there be a change in the geopolitical landscape and a cut-off from U.S. suppliers, whether through war, terrorism, or Mother Nature.

With the military build-up of China over the past decade by benefit of applying commercial technologies to military weaponry and its having become the largest offshore manufacturing base for U.S. corporations, the U.S. continues a delicate balancing act with a Communist nation as its biggest trade partner. With a U.S. trade deficit with China reaching over $200 billion in 2005, multi-national corporations, once U.S. companies operating in the U.S., are now just based in the U.S.

And with a demand by China for foreign direct investment as its incentive to buy U.S. products, companies like Boeing are acquiescing by not only building major portions of airplanes in China, but also creating Research and Development opportunities for Chinese engineers, in order to show its commitment. Intel and Microsoft have also followed suit with major investment in directly hiring engineers in China.

Endless conflicts of interest abound when it comes to foreign dependence in order for the U.S. to maintain its infrastructure, electrical grid, military weaponry and supplies, air travel and homeland security, to name a few. When smaller U.S. specialty industries vital to the industrial base become extinct on our shores, they now appear huge in a world where alliances are tenuous at best. A global economy at the expense of U.S. sovereignty, security and standard of living is something that the Colonists would not have stood for. They would have found another way. Maybe America still has time to do the same.

Division and disagreement over funding and methods of appropriations, for recovery in the communities along the U.S. Gulf Coast, is knee deep in bureaucratic paper shuffling and politics the expanse of Hurricane Katrina herself. The challenge of disentangling the mistakes made before, during and after the storm has started by way of Congressional hearings, such as the one being held by the U.S. Senate's Homeland Security and Governmental Affairs Committee. Thus far, more and more layers of dysfunction in the bowels of multiple bureaucracies are being revealed.

Unfortunately, for residents of Louisiana, Mississippi, Alabama, Texas and Florida who were victims of not only Hurricane Katrina but subsequent storms, Hurricane Rita and Hurricane Wilma, during the 2005 hurricane season, as well intentioned as lawmakers may be, politics has become an integral part of getting future help for hundreds of thousands still trying to rebuild their lives.

Senator Joseph Lieberman (D-CT), ranking member of the Senate Homeland Security and Governmental Affairs Committee, perhaps summed it up best when referring to missteps made by the federal government prior to Katrina's coming ashore, stating, "An outrage on top of an outrage." But his phraseology could apply to almost everything government and how it is choking on its own red tape. Hopefully, the hearings and the investigations will not derail the efforts of the responsible agencies on all levels of government, playing a game of catch-up, in expediting the housing and rebuilding needs of the displaced.

While the federal government approved $67 billion dollars for emergency relief and long-term recovery in the Gulf Coast region over five months ago, the time frame in which it is to be disbursed and the breakdown for individual states has been met with both angst and approval depending upon the state. The necessary housing for homeowners as well as renters who no longer have inhabitable dwellings, has been a nightmare for Louisiana with thousands of people still living in hotels, motels and even retired merchant marine ships, with less than 2,000 living in trailers, as originally promised.

According to the Federal Emergency Management Agency (FEMA), there is a need for 85,000 trailers just in Louisiana in order to accommodate residents who have temporarily been living in hotels. But there remain discrepancies about how many evacuees actually are residing in over 6,000 hotels in several different states. FEMA admittedly does not know which Katrina victims are occupying over 25,000 subsidized hotel rooms or whether they have sought or have been denied FEMA aid. Due to the American Red Cross initially handling the hotel program, coordinating both housing and aid programs have become unwieldy.

About 20,000 trailers are held in staging areas collectively in Louisiana, Texas, Alabama and Mississippi, However, due to non-repaired infrastructure, there are utilities which remain down and necessary for trailers to be inhabited. With 6,000 trailers allocated for New Orleans parishes, 3,000 have now been delivered, but only 1,950 currently are hooked up. In contrast, Mississippi has over 30,000 trailers distributed and functioning and well ahead of Louisiana in terms of infrastructure repair and the removal of debris, also lagging well behind that of Mississippi. In fairness, the amount of people displaced in New Orleans and Louisiana vastly outnumber the amount of victims of Mississippi.

But politics has been a benefactor for Mississippi as well, evidenced by the rewards they have reaped and in the smoothness in which they have been carried out through the efforts of Governor Haley Barbour and Senator Trent Lott (R-MS). For instance, in Mississippi, 33,378 occupied and hooked up trailers are meeting the housing needs of approximately 89% of the displaced. Unfortunately, there have been 34,000 maintenance requests, according to U.S. Representative Gene Taylor (D-MS), for trailers which were to have cost $19,000.00 each and have now escalated to nearly $75,000.00 since FEMA acquired them. Pro-rated over an 18-month period, FEMA will be paying $3,200.00 monthly per trailer, arriving at that figure.

Yet, this endless bad dream for so many shows no sign of ending for 90,000 displaced families of New Orleans, as the housing assistance allowance for those lucky enough to be in apartments outside of southern Louisiana as well as those in hotels, is set to end shortly. The housing aid will only be extended beyond February 7, 2006, for those getting the run around for five months, on a case-by-case basis, with the 2006 hurricane season but four months away.

But the most difficult pill to swallow for many has been what many federal, state and local officials from Louisiana say is a gross miscalculation of its share of the $67 billion approved by the U.S. Congress in 2005. Out of the $67 billion, $11.5 billion has been approved for hurricane relief through the Community Development Block Grants (CDBG) program from which Louisiana will receive $6.2 billion. Mississippi will receive $5.3 billion and Florida will receive $83 million, with Alabama and Texas to receive $74 million each. The maximum allowed any one state under the relief law passed by Congress at the end of 2005 is 54% of the allocated amount which Louisiana was given.

That now leaves Louisiana with $6.2 billion which it must specifically pass on to the 20,000 homes destroyed outside of federally insured flood zones, essentially giving up on 185,000 home owners with destroyed homes, many of whom have been denied their insurance claims by either their provider or the federal flood insurance program, or those who did not have adequate insurance. Louisiana will now be required to find alternative funding for the state and its parishes for debris removal, barely begun, infrastructure repair, law enforcement, re-opening hospitals and schools, in addition to helping businesses rebuild.

Andy Kopplin, Executive Director of the Louisiana Recovery Authority, called it an "inadequate distribution." "No one believes that Louisiana had only 54% of the damages," he said. The department of Housing and Urban Development (HUD) oversees the CDBG program. U.S. Representative Bobby Jindal (R-LA) said, "I certainly think we will need more. The key to getting more is spending the money well." However, how the money is spent must be approved by HUD. And the U.S. Stafford Act mandates how federal dollars will be spent for any additional appropriations to be made.

The announcement in late January 2006 of the $11.5 billion being approved for the disbursement of funds will follow a payment schedule, the bulk of which is not expected to come through until 2008, according to lawmakers. Prior to the announcement, U.S. Representative Richard Baker (R-LA) submitted a redevelopment plan to the White House which was outright rejected. It had the bi-partisan approval of federal and state lawmakers which calls for creating a federal supported Louisiana Recovery Corporation. It requires purchase of large tracts of storm-damaged homes in Louisiana, borrowing up to $30 billion in U.S. Treasury bonds. The corporation would absorb the costs of home repair and resell the homes to either developers or to their original owners.

Baker believes those homeowners who lived in flood plains should be accorded an out, as it was the federal government's responsibility to maintain the levees, through the Army Corps of Engineers, which breached and thus flooded New Orleans. Under the present funding, the most damaged areas of New Orleans would be unavailable for homeowners' relief. And given that the federal flood insurance program is near bankruptcy, the Baker proposal would offer quick buyouts to homeowners in rebuilding efforts. But in another Catch-22 scenario, rebuilding must meet the approval of new advisory flood maps which FEMA officials said will not be available until mid-March 2006. Therefore, commitments to invest in rebuilding are on shaky ground without as of yet fully repaired levees, and not knowing whether they will be additionally funded in order to sustain more than a Category 3 hurricane.

With so many agencies, at this point primarily federal, without their own proverbial maps on how to proceed in un-chartered waters, it necessitates new ways of doing business in order to meet the imminent needs from the Gulf Coast disaster. Creative and critical thinking, something in short supply in bureaucratic management, is essential. Mechanisms to encourage better communications and oversight between the federal and state levels must be implemented in order to be prepared for future disasters, whether they be Acts of God or acts of terror. Only then will those people in the Delta who have sacrificed and suffered so much feel redeemed. And only then will lawmakers, and the agencies they are responsible to hold accountable, recover from the breached trust of the American people.

West Virginia was the second largest producer of coal in the United States in 2005, producing 160 million tons or 13% of total production, while Wyoming was number one, producing 380 million tons, approximately 35% of the nation's total coal production. However, the coal produced by West Virginia is more in demand than that which is produced in western states as it is considered a cleaner burning coal.

With demand for alternative energy sources in the U.S. at an all time high, the price of coal doubled over the past two years, as natural gas and oil prices have sky rocketed with supplies diminishing, especially in the wake of Hurricane Katrina in the Gulf of Mexico in August of 2005. The Gulf produces nearly 40% of the nation's natural gas and refines nearly 30% of the nation's oil and is still hampered by the storm's devastation. In 2006, coal is expected to provide over 50% of the energy necessary for U.S. electric utilities and speculators expect the future of the coal industry to extend its growth over the next decade, returning to its rate of production prior to the 1970's.

The tragedies of the 2005 hurricane season along the Gulf Coast as well as the subsequent flooding of New Orleans, LA served to expose flawed emergency services systems on all levels of government in addition to failed levee maintenance. Victims who endured Hurricane Katrina and Hurricane Rita as well as several other storms in Louisiana, Mississippi, parts of Texas as well as Florida, have been promised that government and its respective agencies would be examined and mistakes made would be corrected. Yet it remains to be seen if proper funding oversight will be followed through or if indeed lessons will be learned.

Similarly, the mining explosion of Sago Mine in Tallmansville, WVA, in which 12 miners lost their lives on January 2, 2006, with one surviving miner who still remains in a coma as of a week later, will be steeped in paperwork and months of several independent investigations, including federal and state hearings. While it would appear that running a mining operation is fairly straight forward, the fact that the work in this underground mine is done 25 stories below the surface of the earth, makes it ripe for facts to be less than forthcoming. But maybe the legacy of the tragedy of Sago will unveil the real cost of the purchase of mining operations in the 21st century, by investors with little or no interest in the history of mining or its real inherent risks.

The evolution of mining technology as well as the work of the United Mine Workers Association (UMWA) has led the way for miners' safety rights vastly improving the lives of miners throughout the U.S. The UMWA was largely responsible for the advent of the Federal Coal Mine Health and Safety Act of 1969, known as the Coal Act, which established health and safety standards for miners both in underground and above-ground mines. The Bureau of Mines was given the power to levy fines and criminal penalties on mines in violation of the law. In addition, free chest x-rays were available for underground miners as well as a compensation fund.

The Coal Act was amended in 1977 in what is now known as the Federal Mine Safety and Health Act, or the Mine Act, which is the prevailing legislation today. The Mine Act helped strengthened the Coal Act with better enforcement of its statutes and combined federal safety and health regulations for all mines, coal and non-coal, under the same piece of legislation. In addition, a new agency within the Department of Labor, known as the Mine Safety and Health Administration (MSHA) was established with a director appointed by the president of the U.S.

The UMWA was founded in Columbus, OH in 1890 with the merger of the Knights of Labor Trade Assembly No. 135 and the National Progressive Union of Miners and Mine Laborers. Its initial constitution "barred discrimination based on race, religion, or national origin." It was a leader in fighting racism and ethnic discrimination before the turn of the 20th century. Also included in their early fights, the UMWA fought for the 8-hour day in 1898, followed by collective bargaining rights in 1933, health and retirement benefits in 1946 and the eventual health and safety protections resulting in the federal legislation in 1969.

And perhaps most important to the UMWA's accomplishments was its plowing the way for the National Industrial Recovery Act, which granted workers the right to form unions and bargain collectively with their employers. And after the success of organizing the nation's coal miners, the UMWA extended its work to the steel and auto industries in order to help those workers organize.

While fatalities in the mines have fallen significantly over the past century and working conditions improved, by the 1980's many of the smaller mines went out of business, with more nuclear power plants coming online and with the oil crisis of the 1970's supposedly over. Coal became less of a necessity. Many mines which remained opened decided to hire only non-union personnel. With fewer jobs available in rural communities, workers became willing to forego union benefits and guaranteed pension plans. They sacrificed the transparency with management regarding safety concerns which the union provided them and without fear of retribution.

Today, according to Cecil E. Roberts, President of the UMWA, only 32-35% of all mines are union shops. With the majority of today's miners comprised of an aging workforce in their late 40's and 50's facing retirement, cash bonuses and higher salaries are luring the next generation, now in their 20's. In the past 20 years as mines shut down and union-busting was rampant, workers were headed to other cities for more lucrative manufacturing jobs. But with steel mills on the decline, textile mills losing out to overseas manufacturing and impending layoffs of automakers, the coalmines are becoming the last bastion for those living in communities where the average annual salary is $25,000. Non-union miners can look forward to earning twice that amount.

However, the recent history of the Sago Mine as well as others its size is not unlike that which has become of other major industries in the 21st century, with individual companies and its workers left victim to bankruptcy or corporate takeover. The Sago Mine, which had 145 employees prior to January 2nd, was operated by Anker West Virginia Mining Co. until November 2005. The International Coal Group Inc. (ICG), purchased it in April 2005, and completed its purchase in November 2005 at which point it took over Sago's operation.

Famed New York investment financier and billionaire, Wilbur Ross, formed ICG in May 2004, now listed on the NY Stock Exchange, buying up coalmines belonging to Horizon Natural Resources. One of those holdings was the Sago Mine. Ross' purchase of Sago followed his foray into the steel industry, founding the International Steel Group Inc. and buying Bethlehem Steel Corp., Acme Steel Co. and Weirton Steel Co., all in bankruptcy at the time. However, the deals depended on the United Steelworkers Union agreeing to contract concessions and billions of dollars in unfunded pension benefits which were ultimately dumped on the federal pension benefits program by Ross and now paid by the U.S. taxpayers.

Unlike the steel business, however, coal mining is dependent upon safety measures necessary to execute every 24-hours, requiring constant follow-up. It can mean the difference between life and death. The learning curve has changed with investors who did not originate from the mining industry and running mining operations, some of which have been closed for years, housing a host of unsafe conditions much less present in a maintained mine. In addition, many unskilled miners are coming into the workforce in non-union environments and lax federal government oversight, in which many citations and fines in very small amounts are doled out, rarely if ever shutting down a mine for unsafe working conditions.

Much has been publicized about the number of citations Sago Mine received in 2005. MSHA levied 208 citations, orders and/or safeguards. Half of the citations were for "significant violations" which generally commanded fines between $60.00 and $440.00. The fines totaled approximately $25,000. However, in the 11-week review ending December 22, 2005 and three times in a period of five days, MSHA cited the mine for 46 alleged violations with 18 deemed "unwarrantable failures" and with three still pending. According to Ben Hatfield, President of ICG, all violations were corrected; however, the MSHA has yet to publicly release any documents nor will comment on the three pending violations.

Serious violations which Sago was cited for included failing to enforce an adequate ventilation plan, key to preventing the buildup of methane gases which occur naturally underground, failing to conduct safety inspections before each 8-hour shift, 11 roof collapses over the course of the past year and dangerous buildup of flammable coal dust.

While ICG has skirted answering questions thus far, Ben Hatfield did lay blame on the inherited problems from the Anker group. But also important to the upcoming investigations will be if there were continued failure of safety inspections and prior to entering the mine over the New Year's weekend, at which time the mine was shut for two days. Closed mines can be deadly especially during winter, when methane accumulates faster due to cold temperatures and changes in barometric pressure.

In addition, Sago did not keep a rescue team on site, like a good many operations due. And speculation of the delay in getting a team together was further hampered by federal and state workers who would normally be available, were not since January 2nd was an observed Monday holiday following New Year's Day. Since Sago chose to open knowing that it was a state and federal holiday it may have put its crews at unnecessary risk, as it took 11 hours for a rescue team to be assembled. That will also be examined by the several investigations already having been announced.

The MSHA will conduct its own investigation, and West Virginia Governor, Joe Manchin, III, has hired former Director of MSHA under President Clinton, J. Javitt McAteer, to be special advisor to the investigation for the state of West Virginia. The White House will lodge another investigation with requests by Senators and House Representatives calling for hearings on Sago as well as on mine safety.

Similar to the discovered cuts in the funding of levee maintenance after Hurricane Katrina hit New Orleans, funding for MSHA for 2006 was cut $5 million from 2005. The agency also has seen a decrease of 170 staffers since 2001. Also, 17 proposed standards to further protect miners' safety and health were denied by MSHA. The entire budget for MSHA for 2006 is $280 million. It is expected that its appropriations will be reviewed.

Senator Robert Byrd (D-WVA) has announced that the first Congressional hearing on the Sago Mine will be held on January 19, 2005, which will include federal and state mine safety officials, labor and business representatives as well as academic experts in mine safety testifying. Senator Ted Kennedy (D-MA) as well as Senator Jay Rockefeller (D-WVA) have also called for a series of Senate hearings on the broader issues impacting mine safety. Representative George Miller (D-CA) and ranking member of the House Education and Workforce Committee has requested all documents relevant to the Sago mine disaster from Labor Secretary, Elaine Chao. Rep. Miller expects to hold hearings after the Senate hearings. No reports for any of the investigations, however, are expected before July 2006.

The Government Accountability Office in 2003 found that over the past decade, inspectors had often failed to ensure that violations were corrected by deadlines. In addition, there has been criticism that political appointees running MSHA are primarily former mining executives from the private sector, and there exists a fundamental conflict of interest in issuing citations and such diminutive fines. Further, the Congress has not held one hearing in either the Senate or House on mining safety issues since 2001.

On September 23, 2001, 13 coal miners died at the Jim Walter Resources (JWR) Blue Creek No. 5 mine in Brookwood, Alabama. In June 2003, the Federal Mine Safety and Health Administration fined Walter Industries more than $400,000 for eight safety violations that "directly contributed" to the 2001 accident. The company subsequently appealed the fine. In November of 2005, an administrative law judge on behalf of MSHA threw out six of the eight safety violations and slashed the fines to $3,000. Let us hope that history does not repeat itself and that we learn from this crisis. Here is but one more opportunity to do right by our miners. They deserve at least that much.

General Motors Corp. announced in late November 2005 that it will close 9 of its United States auto manufacturing plants as well as three assembly-related plants which includes one location in Canada. Ford Motor Co. followed suit in early December 2005 announcing it is considering the shutdown of up to 8 of its U.S. manufacturing plants, including engine and assembly operations, with one in Mexico. Americans are well familiar with the downsizing, outsourcing and offshoring of the U.S. manufacturing base which has seen 2/3 of its jobs lost in the past 20 years, having been traded in for third world cheap labor. And while white-collar workers have hardly been immune from offshoring practices infiltrating boardrooms, indication this week is that the tide has changed.

Both the Intel Corp., the world's largest computer chip manufacturer, as well as J.P. Morgan Chase & Co., one of the world's largest financial institutions and 2nd largest in the U.S., are investing in creating new jobs in India over the next few years rather than in the U.S. Different in prior offshoring scenarios, however, is that back-office jobs such as investment banking, software engineering and research and development, previously occupied by American workers, will now originate from India as well.

J.P. Morgan plans to locate 1/3 of its investment banking and support staff in Bangalore, India by the end of 2007. It will double the amount of its employees by hiring 4,500 graduates over the next two years. 3,000 of the new hires will work in investment banking with 1,500 providing support in its retail and commercial banking operations. There are presently 4,500 employees in front-office staff positions in Mumbai, India.

With only 200 on staff in India just two years ago, in order to achieve their latest goal, J.P. Morgan will hire between 300-400 graduates a month in order to have 9,000 total positions in front and back-office positions by 2008, which includes complex derivatives settlements and structured finance transactions. The remaining approximately 4,000 – 4,500 employees J.P. Morgan employs will be divided between Bournemouth, England and New York, NY, although the ratio between both countries was not disclosed.

Similarly, Intel will invest $1.1 billion in India over the next 5 years, with $800 million dedicated specifically for research and development operations and other projects including chip design, also in Bangalore, according to Chairman Craig Barrett. Although Intel will also explore expanding its manufacturing prospects in India, its present investment will largely be for more complex high-value work as opposed to just technical support and call-center jobs, which most IT firms offshore today.

Other firms following this latest trend are Cisco Systems, the world's largest maker of internet equipment, which announced in October 2005 that it would invest $1.1 billion in India, tripling its work force to more than 4,000 from 1,400 in the next three years. It too will have research and development located in Bangalore. And it is likely that more of the banking industry will soon follow J.P. Morgan's lead such as Goldman Sachs & Co. which may double its staff to 1,500 in Bangalore.

Microsoft Chairman Bill Gates is expected to invest $400 million in Hyderabad, India where he plans to hire several hundred workers. Gates has been outspoken, with his statement in April 2005, citing that there were not enough U.S. college students majoring in computer science, and thus wants to expand the H1B Visa program, allowing more foreign workers to come to the U.S. But critics believe that Gates and other industry executives are not being honest in their assessments, to wit, the banking industry's India strategy which is hiring finance graduates and not computer science graduates in expanse of their industry.

In fact, consultants such as Stefan Spohr of AT Kearney estimate that investment banks could raise their staff levels in India to as much as 20% in the next few years. Since salaries in India are 70-80% lower than in the U.S., with total costs about 40% lower than in the U.S., the trend of offshoring will no longer exist. Rather, jobs will now originate from India and totally bypass the U.S.

Disputing the fact that there are not enough quality candidates, for example, in the computing engineering field, is the change in the way in which U.S. engineers are hired. Candidates are not only competing with their peers but also with the fear that they will be replaced by either imported foreign workers or offshore workers, even after they are hired.

Companies are directly contributing to the supposed engineering shortage themselves by requiring that an applicant meet every item on a detailed list of qualifications. Transfer of like-skills is a long lost concept. With approximately 200 responses for every job listing, companies have the luxury to hold out until they get the perfect candidate, as job cuts in technology positions are up 20% in the past year, according to Challenger, Challenger, Gray & Christmas. The unemployment rate for computer programmers and engineers is higher than the national average which does not reflect those who remain unemployed in Silicon Valley as they no longer register for unemployment benefits, nor those who were forced to move on to other careers.

According to Veronique Weill, head of operations at J.P. Morgan's investment banking division, "The quality of the people we hire is extraordinary and their level of loyalty to the company unbeatable," when referring to the hiring of employees in India. Funny, but that's what used to be said about American workers. Perhaps the American worker's biggest error was requiring a decent wage for quality work done. And others would argue that maybe it was their expecting U.S. companies would prefer them over foreign labor. Tragically, greed, under the guise of a global economy was the error, committed not by U.S. workers but by U.S. CEO's, and condoned by the U.S. government.

In August 1981, 11,500 air traffic controllers who belonged to the Professional Air Traffic Controllers Organization, known as PATCO, were permanently fired by President Ronald Reagan, two days after their strike began, due to their violation of federal law. The president felt that the union did not seriously consider the 'no-strike' provision of their contract and had no other choice, in order to avoid a disastrous disruption in United States airspace. PATCO workers were then replaced with non-unionized employees. Further to the firing, President Reagan through an Executive Order in 1982, prevented any of the fired air traffic controllers from being rehired in the future by the Federal Aviation Agency (FAA), which oversees U.S. air traffic control. Over the next 3-4 year period new controllers were hired and trained in order to replace those fired, provided with supplementation by the U.S. military, in order to keep planes in the air. In 1993, also by Executive Order, President Bill Clinton rescinded Reagan's Order, allowing previously fired PATCO workers to be hired again by the FAA, which presently includes several hundred of the previously dismissed. Now, nearly 25 years later, the newly named air traffic controllers union, National Air Traffic Controllers Association (NATCA), is in prolonged contract negotiations once again with the FAA, which began July 13, 2005. The present contract, which expired in 2003 was extended until September 30, 2005, with salaries frozen and benefits continued until new terms were met. As of September 30, 2005, the contract has expired but continues under an "evergreen clause," allowing for the original contract to remain in effect as long as talks continue. Similarly to the negotiations which led to the 1981 strike are the issues of increased salaries and reduced working hours. But more differences than similarities exist in the present talks. Since the last agreement was negotiated in 1998, NATCA members are working longer hours and have more security responsibilities in the wake of September 11, 2001. In addition, after the initial tailing off of air travel at the end of 2001 and the beginning of 2002, there are now more flights in the air at any one time in the history of aviation travel, but with fewer controllers watching over more airplanes in the U.S., which has the world's busiest airspace. However, in the last two years, the FAA has lost 1,000 controllers. But at the crux of the problem is that many of the controllers today are those who were hired in the early 1980's and are set for retirement either immediately or in the near future. There is a federal mandate which requires all controllers to retire at age 56 whether or not there are employees to replace them. The FAA admits that 2,580 controllers are set to retire between 2005 and 2007 while only hiring an additional 13 in 2004. Additionally, there are not enough replacements in waiting in order to fill the quota. Instead of the originally promised 1,248 hires for Fiscal Year 2006, the FAA will now only hire 595 and phase in the remaining 654, by replacing one retiree at a time. With 9,000 of its 14,500 current number of air traffic controllers having been hired in the early 1980's, the FAA has dragged its heels on implementing a replenishment system known about for years. In a Government Accountability Office report issued in June 2002, it stated that "The FAA has not done enough to plan for the impending staffing crisis and needs to do so as soon as possible. It has not developed such a comprehensive workforce strategy to address all of the challenges it faces in responding to its impending need for thousands of new air traffic controllers, thus increasing the risk that the FAA will not have enough qualified controllers when necessary to meet air traffic demands." Sadly, the FAA took two more years to acknowledge their shortcomings regarding staffing needs, publishing a similar report of their own in 2004, but has recently promised to add 12,50