Archive | April 18th, 2010



Photography Compulsary Question
Give a creative caption for the above picture (20 marks)

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News Release, For Immediate Release, Sunday, April 11, 2010 
The new order: an Israeli demand that all residents of the West Bank including those who were born there and live in the Palestinian Authority obtain an Israeli issued permit
Center for the Defence of the Individual and nine other human rights organizations urgently appealed to the minister of defense this morning with a demand to delay the entry into force of two military orders which will turn all residents of the West Bank into criminals who may be imprisoned for up to seven years or deported from the area.
On Tuesday, April 13 2010, the Order regarding Prevention of Infiltration (Amendment No. 2) and the Order regarding Security Provisions (Amendment No. 112) are to enter into effect. The orders, signed by the previous GOC Central Command, Gadi Shamni but not revealed, are worded so broadly such as theoretically allowing the military to empty the West Bank of almost all its Palestinian inhabitants.
Despite the severe ramifications of the orders, the authorities did not publicize their existence among the Palestinian population as required, which raises grave concerns that they intended to pass them secretly without public debate or judicial review.
The orders substantively change the definition of “infiltrator” and in effect apply it to anyone who is present in the West Bank without an Israeli permit. The orders do not define what Israel considers a valid permit. The vast majority of people now living in the West Bank have never been required to hold any sort of permit to be present therein.
The military will be able to prosecute and deport any Palestinian defined as infiltrator in stark contradiction to the Geneva Convention. There is a possibility that some of the deportees will not be given an opportunity for a hearing before being removed from the West Bank as, according to the orders, the deportation may be executed within 72 hours whereas it is possible to delay bringing a person before the appeals committee for up to eight days from issuance of a deportation order.
In their letter to the minister of defense, the organizations stated that based on Israel’s current policy, the orders are expected to be initially used against Palestinian residents of the West Bank whom Israel wishes to transfer to the Gaza Strip, despite the fact that many of them were born in the West Bank or lawfully relocated thereto.
Israel is further expected to use the orders to deport foreign passport holding spouses of West Bankers abroad.
This category includes tens of thousands of individuals. However, the definition of “infiltrator” which exposes a person to a prison term of three to seven years could, in principle, be applied to any person the military commander wishes ill, including Israeli and international citizens who are present in the West Bank.
The organizations demanded the minister of defense delay the entry into effect of the orders pending a serious and comprehensive debate thereof and announced that they will fight the draconian legislation by any means.
The signatory organizations:
HaMoked: Center for the Defence of the Individual, The Association for Civil Rights in Israel, Bimkom, B’Tselem, Gisha, The Public Committee Against Torture in Israel, Yesh Din, Adalah, Rabbis for Human Rights, Physicians for Human Rights
This news release was written by HaMoked: Center for the Defence of the Individual



News Release, For Immediate Release, Monday, March 15, 2010
The organizations are petitioning against a new procedure which almost completely blocks the possibility of relocating from the Gaza Strip to the West Bank.
The procedure determines that parent-child and spousal relationships do not constitute “humanitarian” grounds justifying family unification in the West Bank.
 “Humanitarian” according to Israel: An orphaned child in the Gaza Strip would not be allowed to unite with his surviving parent in the West Bank if any relative in Gaza can care for him.
The procedure is another stage in Israel’s policy designed to deepen the separation between the West Bank and the Gaza Strip.
Monday, March 15, 2010HaMoked: Center for the Defence of the Individual, Gisha – Legal Center for Freedom of Movement, and 11 other Israeli and Palestinian human rights organizations petitioned the Supreme Court today against the military and the Minister of Defense, demanding the revocation of an illegal procedure which prevents Palestinians living in the Gaza Strip from relocating to the West Bank, even in clearly humanitarian cases.
The petition, written by Att. Ido Blum of HaMoked, states:
“With the stroke of a pen, the procedure severs the fabric of life between Gaza and the West Bank for residents of the Territories. It effectively cancels Palestinians’ right to family life, tearing apart families and separating spouses, parents and children, grandparents and grandchildren.
The procedure is, in effect, the last nail in the coffin of the connection between Gaza and the West Bank and their status as a single territorial unit (and in the future, perhaps, a single Palestinian state).”
In the new procedure, Israel empties the term “humanitarian” of any content by determining that family ties do not, in and of themselves, constitute sufficient humanitarian grounds for receiving a permit to relocate from Gaza to the West Bank.
Thus, for example, Israel forbids a child who lost his mother in Gaza from moving to live with his father who resides in the West Bank, if he has any relatives in Gaza, no matter what degree, who can care for him. According to the procedure, spouses’ requests to live together and children’s requests to live with their parents are to be rejected out of hand, without being reviewed. 
The petition asks: “Is it conceivable that a security–bureaucratic procedure will determine which parent a child will live with; who will care for the elderly matron of the family; who will care for an ailing brother?”
The petition further argues that the procedure is another component of a policy allowing one-way passage as the sole means through which Palestinians can fulfill their right to family life: permanent relocation from the West Bank to Gaza.
The Petition challenges the procedure which was submitted to the Supreme Court following a number of petitions filed by HaMoked and Gisha requesting family unification between Gaza and the West Bank. The procedure prevents thousands of families – some of which are represented by HaMoked and Gisha – from uniting in the West Bank.
Mrs. Fathiya Abu Jalaleh, a mother of five, lived in the West Bank for more than 10 years. In January 2008, she traveled with her four minor children to the Gaza Strip, while her husband Issam and their eldest son remained in Jenin due to the father’s position with National Security. In the two years since, Israel has continued to prevent the family from reuniting in the West Bank since Fathiya’s registered address is in Gaza.
Mrs. Wafaa Sufi was married in the Gaza Strip to Mr. Subhi Sufi from the West Bank, They lived for some time with their four young daughters in the Gaza Strip, but about three years ago, Mr. Sufi had to return to the West Bank for the purpose of work and securing a livelihood, among other things. The two have not seen each other since, nor have the girls seen their father.
Mrs. Sufi recently traveled to Jordan with the girls and sought to enter the West Bank via the Allenby Bridge. The Israeli military refused to let them in.
The organizations which filed the petition: HaMoked: Center for the Defence of the Individual, Gisha – Legal Center for Freedom of Movement,
The Association for Civil Rights in Israel, The Public Committee Against Torture in Israel, Al-Dameer Association for Human Rights, Yesh Din – Volunteers for Human Rights, Al Mezan Center for Human Rights, Jerusalem Legal Aid and Human Rights Center, Gaza Community Mental Health Programme, Palestinian Centre for Human Rights, Physicians for Human Rights – Israel, Rabbis for Human Rights.
To read the petition (in Hebrew), click here.
To view a presentation with information about the families, click here.
To read a position paper by HaMoked and Gisha analyzing the procedure, click here.
To read the original procedure, click here. 




News Release – For Immediate Release – Tuesday, February 9, 2010


·        Gisha and Physicians for Human Rights-Israel appealed to the High Court of Justice on behalf of Issam Hamdan against a District Court ruling blocking his exit from Gaza for emergency medical treatment.

·        The State refuses to allow him out of Gaza based on its claim that he may settle in the West Bank after treatment.

·        Mr. Hamdan requires immediate surgical intervention; suffers from severe pain and paralysis of his left side.

·        Israel will bear no cost for the treatment, to be performed in a Palestinian hospital in east Jerusalem, and admits that it makes no security claim against Mr. Hamdan.

·        Mr. Hamdan’s case is part of a new trend in which Israel blocks treatment for Gaza patients, even in the absence of a security claim.

Tuesday, February 9, 2010– Gisha – Legal Center for Freedom of Movement and Physicians For Human Rights-Israel filed an appeal today (February 9, 2010) in the Supreme Court on behalf of Issam Hamdan against a District Court ruling declining to intervene in a decision by the Israeli military to prevent him from exiting the Gaza Strip in order to receive emergency medical treatment.

Mr. Hamdan, a 40-year-old resident of Gaza, has been suffering for two years from severe back pain due to a protruding disk in the vertebra of his neck, which has caused the almost total paralysis of the left side of his body. Recently, the paralysis has begun to spread to his right side.Due to his deteriorating medical condition and the unavailability of appropriate treatment within the Gaza healthcare system, he was referred five months ago for emergency neurosurgery at a Palestinian hospital in east Jerusalem. The referral was supported by an Israeli specialist in orthopedic surgery from ShebaHospital in Tel Hashomer, who determined that without immediate surgical intervention, Mr. Hamdan is likely to sustain permanent damage.

For months, the Coordinator of Government Activities in the Territories (COGAT) claimed that its refusal to issue a permit was due to the availability of the necessary medical treatment within the Gaza Strip – even though Palestinian and Israeli doctors determined that the treatment was not available there.Indeed, after Gisha’s Adv. Tamar Feldman filed a petition on Mr. Hamdan’s behalf to the Beersheva District Court, COGAT admitted that the treatment is not available in Gaza but instead justified its refusal with a stated concern that Mr. Hamdan would decide to settle in the West Bank after receiving medical treatment.

Mr. Hamdan has children and family in both Gaza and the West Bank. He has committed to return to Gaza, where he lives with his parents and his oldest daughter, of whom he has sole custody, after completion of treatment.He is also willing to commit to refrain from entering the West Bank, where his wife and four of his children live.

Judge Rachel Barkai, who presided over the case in the District Court, conceded that, “There is no dispute that at this time the petitioner needs surgical intervention unavailable in a Gaza hospital.” However, despite this and the fact that the State did not provide any evidence in support of its claim, Judge Barkai denied the petition anyway, writing that:“In balancing the values on both sides of the scales – on one hand, the need for medical treatment, and on the other hand, the concern that he will take advantage of his entry permit in order to relocate, the respondents’ refusal to permit the petitioner’s entry to the territory of the State of Israel does not justify judicial intervention.”

Judge Barkai also ruled that Israel bears no duty to concern itself with the welfare and healthcare of residents of the Gaza Strip.That determination contradicts the judgments of the Israeli Supreme Court,which expressly stated that Israel bears humanitarian obligations towards the residents of the Gaza Strip stemming from the law of combat, the control that Israel exercises over Gaza’s crossings, and the Gaza Strip’s dependence on Israel resulting from the long years of Israeli occupation in Gaza. The position of Gisha and Physicians for Human Rights-Israel is that Israel also owes obligations to Gaza residents under the law of occupation.

“In light of the absence of any security claim whatsoever against approving the request, it is not clear to the appellant why the respondents refused his request and why the lower court rejected his petition, preventing him from receiving urgent and vital medical treatment,” Gisha’s Adv. Tamar Feldman wrote in the appeal. “The extended proceedings in the appellant’s case are prolonging his suffering and frustrating his chances of treating his serious ailment.”

Physicians for Human Rights–Israel is aware of two other cases of patients who, like Mr. Hamdan, have recently been refused permission by Israel to leave Gaza in order to receive medical treatment based on the claim that they may settle in the West Bank.This is a new phenomenon that reflects an escalation in Israeli policy toward residents of Gaza who require medical treatment.The policy violates the basic rights of patients to receive medical care, including in emergency cases, putting political considerations ahead of Israel’s duty to safeguard the health of residents of Gaza.

To view the appeal submitted to the Supreme Court (in Hebrew), click here.

To view the judgment of the Beersheva District Court’s ruling (in Hebrew), click here.

To view the petition submitted to the Beersheva District Court (in Hebrew), click here.










News Release – For Immediate Release -Tuesday, February 2, 2010

Thirteen Israeli human rights organizations sent an urgent letter (attached) to the president, the Knesset speaker and the prime minister, protesting the increasing and systematic campaign against human rights organizations in Israel: “A democracy must not silence critical voices; protecting human rights is vital.”


In their letter, the organizations cite former head of the Oz unit Tziki Sela and Interior Minister Eli Yishai, who accused organizations assisting refugees of “aiming to destroy Israel” and “undermining the Zionist enterprise;”

Deputy Prime Minister Moshe Yaalon, who said of human rights organizations “your enemies will come from within;” the summoning of human rights activists for investigation by the Israel Security Agency (the General Security Service) and warnings not to engage in “political activity;” an IDF announcement stating it was cutting off relations with the human rights organizations that operate in Gaza, including restricting humanitarian activity to save lives; and severe restrictions on the entrance of human rights activists into the West Bank, to provide nonviolent protection of Palestinians subject to violence by their neighbors.


Added to this are the events of the past days, which set new records in this dangerous trend in the form of the unbridled attack by “Im Tirtzu” on Professor Naomi Chazan, the Chairwoman of the New Israel Fund, and on human rights organizations in Israel.


Hagai El-Ad, Executive Director of the Association of Civil Rights in Israel: “Human rights organizations are the moral conscious of our society. Their activity is a critical element of a healthy democracy. A democratic country does not support the deliberate silencing of the critical voices that operate within it but deals honestly with what needs to be corrected.”

To read the Letter, click here.




Human rights community to Israeli Prime Minister: Time is running out. Establish independent inquiry into Operation Cast Lead

Adalah — The Legal Center for Arab Minority Rights in Israel | Association for Civil Rights in Israel | B’tselem – The Israeli Information Center for Human Rights in the Occupied Territories | Gisha – Legal Center for Freedom of Movement | Hamoked – Center for Defence of the Individual | Physicians for Human Rights – Israel | Public Committee Against Torture in Israel | Yesh Din – Volunteers for Human Rights
Press Release –for immediate publication – Tuesday, January 26, 2010

Human rights organizations in Israel reissued their call to the Government of Israel to establish, without delay, an independent and impartial investigation mechanism to thoroughly examine the allegations raised regarding violations of international law during Operation Cast Lead.

In a letter addressed to the Prime Minister and members of his cabinet, heads of the organizations today (Tuesday, 26.1.10) called on Israel to take advantage of the short time still remaining before the UN deliberates on the Goldstone report’s implementation.

The organizations specify in their letter why the military’s internal examination, which includes operational debriefings and approximately 30 Military Police investigations, does not satisfy Israel’s obligations to investigate. These examinations do not conform to the demands set by the Goldstone fact-finding mission, that Israel and Hamas each investigate suspected violations of international law during Cast Lead.

Therefore, they will not be accepted as an appropriate response to the Goldstone report. Furthermore, the organizations warn that Israel’s refusal to hold an independent investigation will expose military officers and members of the previous government to investigation and legal proceedings likely to take place outside Israel.

In light of the above, the organizations called on the Prime Minister to establish, without further delay, an impartial investigative body which will conduct an independent and effective investigation of incidents in which allegations have been raised that Israel violated the provisions of international law during Operation Cast Lead.

In order that the investigation will be seen as credible, the organizations believe that a foreign expert on international humanitarian law should be a part of this process. The investigation should examine Israel’s conduct during Operation Cast Lead, including an examination of accountability on the political and command level. Likewise, the investigative body should be charged with preparing the legal groundwork for future military conduct.

This morning the Israeli media reported that the PM is considering appointing a legal team to review the military’s investigations and debriefings. The organizations clarify that only an independent and transparent investigation will satisfy Israel’s international obligations.

The extent of damage to the civilian population during the operation was unprecedented. The allegations raised regarding the military’s conduct are serious and grave. The Israeli public has the right to an explanation of the actions taken in its name in the Gaza Strip. This is an essential issue at the heart of Israeli society.
To read the full letter, click here.


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Kairos statement on the new Israeli military order.doc


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The divestment debate taking place at Berkeley is creating waves. It is not only helping to build diverse and powerful coalitions on campus, but it is also sparking conversations in places that have, at least to this point, been allergic to BDS.

Jerry Haber has an important post over at his blog The Magnes Zionist appealing to liberal Zionists as to why they should give guarded support to the BDS movement. He lists 13 reasons, they are:

1. You already support two of the three central aims of the movement, which are

1. Ending Israel’s occupation and colonization of all Arab lands and dismantling the Wall;

2. Recognizing the fundamental rights of the Arab-Palestinian citizens of Israel to full equality;

Where you may disagree is over:

3. Respecting, protecting and promoting the rights of Palestinian refugees to return to their homes and properties as stipulated in UN resolution 194.

But note that the phrase “as stipulated in UN resolution 194” weakens the statement since even Israel never rejected 194. And even if you don’t recognize the right of return, you recognize the importance to the Palestinians of claiming that right. And haven’t you have signed petitions with which you are not in complete agreement because you beiieve in the broader goal? There are many people who agree with you here who support the tactics of BDS.

2. You don’t have to sign on to all of BDS.

You don’t like academic boycotts? Good, neither do I. You are nervous about calling for sanctions? Don’t. But what about partial divestment from companies profiting from the Occupation as a symbolic and non-violent act of protest? What about boycotting settler’s wine and other products? How can you be opposed to the Occupation and support the Occupiers.

3. You want to support non-violent Palestinian protest.

BDS is first and foremost a Palestinian action. “If only,” you have said countless times, “there were a Palestinian Gandhi or Nelson Mandella.” Well, the tactics of BDS are the tactics of Gandhi and Mandella. Even if you are apprehensive about the aims of some of the movement, don’t you understand how important it is to support non-violent protest?

4. There is no slippery slope here.

If you support BDS today, you say to yourself, what will happen when it really gets up steam – perhaps you will be hurting Israel? Yet the chances of that happening are nill, and you know it. Who has the power?

5. BDS is becoming effective as a tactic.

In the beginning it wasn’t, and this is what kept me off the BDS wagon for a long time. And I am still not entirely on it. But successes recently have been impressive, both in their own right, and as a morale booster for the Palestinians.

6. If you oppose them you stand with AIPAC and the ZOA

Sure, you may not like the rhetoric of some Palestinians and their allies. But you also don’t like some of the rhetoric of the Jewish rightwingers. So who do you stand with on this one? The human rights folks — or AIPAC and the Zionist Organization of America? Do you really want to hear the neocons crowing over their victory as they simultaneously demonize your ilk?

7. BDS actually strengthens the hand of the pro-peace camp in Israel.

Israel is very sensitive to its public image. Whenever it is criticized, there are elements in Israeli society that point to Israel’s loss of standing and argue that only a just and peaceful solution will stop the decline. This also answers the objection that it is unfair to single out Israel. And the people who makes this argument are always singling out Israel for preferential treatment.

8. BDS does not materially hurt the average Israelis

I find it odd that many liberal Zionists who call for sanctions against Iran – a regime that is not engaged in the systematic deprivation of human rights to the extent that Israel is engaged – think that a cultural boycott or a divestment from certain American companies will hurt the average Israeli. The effect of the protest is symbolic; the message is what is important.

9. Other tactics have failed repeatedly.

If you genuinely believe in a two-state solution, wouldn’t it be good idea to see if BDS helps end the Occupation? Or are you one of those liberal Zionists who want a two-state solution In theory, but is pretty ineffectual about ending the Occupation.

10. Palestinians should have a little naches (pleasure) after all their suffering and BDS provides them with that.

They don’t have an army. They are not allowed by the world armed resistance. Where else, besides some world organizations, can they score victories?

11. You are appalled at the lies and disinformation of the anti-BDS movement.

The BDS movement does not seek to destroy the state of Israel. BDS is not even anti-Zionist. Stop listening to the Big Lies.

12. Many Jewish and Israeli human rights activists support it.

They are doing your job for you in Israel. They allow you to be hopeful about the state. Shouldn’t you be listening to therm here?

13. You are sick up to here with the news coming out daily from Israel.

Isn’t it about time you gave back a little? There are consequences for their misdeeds.

If you are unconvinced by the reasons above, but uneasy about circling the wagons with the likes of AIPAC, ZOA, Aish ha-Torah, etc. then you have another option: oppose BDS, but don’t be strident about it. Don’t rain on the Palestinian parade.

Sit on the fence and wait, if you must. But don’t fall on the side of AIPAC and ZOA.

Related posts:

  1. Is equality a ‘nightmare’ for liberal Zionists?
  2. For liberal American Zionists, Lieberman is ‘the limit’!
  3. Progressive Zionists and AIPAC Have Same Litmus Test for Candidates: Support Israel!

Tomorrow the American Friends Service Committee in Chicago will hold a mock Congressional Hearing on US foreign policy in Israel/Palestine to look at the question – “Does US Policy on Israel/Palestine uphold our values?” The event will take place 1:30 – 5:30 p.m. Central Daylight Time (GMT -5) at the University of Chicago, but anyone can watch online at the website

Event organizer Jennifer Bing-Canar explained, “We hope this Hearing will bring the question of values into the discussion about US policy. The American people voted for “hope and change”, and we see neither when it comes to US policy towards Israel and Palestine. It’s critical that people around the world see that ordinary Americans — as well as our elected officials — care about the lives of people who are affected daily by US policies in the Middle East.”

There are already over 30 viewing events planned around the country to watch the live webcast including in Boston, New York, Detroit, Philadelphia and Washington, D.C., to Indiana and Idaho, to Walla, Walla, Wash., and San Francisco. You can email to see if there is a viewing planned near you.

The event, moderated by journalist Helena Cobban, will bring together witnesses from Israel/Palestine and the United States who will testify to the impact of U.S. foreign policy on property rights, freedom of movement, and military aid.

Witnesses include:

* Cindy Corrie, whose daughter Rachel was killed by an Israeli bulldozer while she tried to stop the demolition of a Palestinian family’s home;

* Amer Shurrab, a Palestinian peace activist from Gaza who will speak of his family’s devastation during Israel’s 2009 war in Gaza;

* Jeff Halper, coordinator of the Israeli Committee Against House Demolitions;

* Jad Isaac, an environmental expert and director of the Applied Research Institute, Jerusalem.

A Listener Panel of Chicago-area religious leaders and academics will question the witnesses. Panelists include:

* John Mearsheimer, professor of political science at the University of Chicago;

* Cantor Michael Davis, member of the Jewish Fast for Gaza;

* Ghada Talhami, professor emerita of politics at Lake Forest College;

* Cotton Fite, associate priest at St. Luke’s Episcopal Church, Evanston;

* Barbara Ransby, associate professor of gender and women’s studies, African American studies, and history at the University of Illinois at Chicago;

* Zaher Sahloul, M.D., chairman of the Council of Islamic Organizations of Greater Chicago.

Related posts:

  1. Barghouti to Obama: Uphold your values – End Israeli apartheid
  2. Chicago City Council, Leading the Nation Re Iran
  3. Ehud Olmert struggles to give Univ. of Chicago lecture amid protests


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April 17, 2010 posted by Michael Leon

Goldman Sachs

Update: ABC News: President Clinton: [Former Goldman Execs’] Rubin and Summers Gave Me Wrong Advice on Derivatives, and I Was Wrong To Take It.

Make no mistake.; these are high-stakes political wars. And the Obama administration is more than capable of launching hell on its enemies should certain big-moneyed interests choose this course.

By Greg Gordon | McClatchy Newspapers
WASHINGTON — Goldman Sachs, whose tactics exiting the collapsing subprime mortgage market have been under government scrutiny for months, now faces federal fraud charges that it duped investors into losing $1 billion on a rigged offshore deal pegged to dicey home loans.

The suit, brought Friday by the Securities and Exchange Commission, accuses Goldman and one of its vice presidents, 31-year-old Fabrice Tourre, of allowing a Wall Street hedge fund to secretly select many of the securities in the deal.

The hedge fund, Paulson & Co., then bet that those subprime mortgage securities would fail. When they did, Paulson made a $1 billion profit and investors lost more than $1 billion, nearly all their money, the complaint charges.

In an e-mail to a friend in January 2007, the complaint says, Tourre remarked that, “The whole building is about to collapse anytime now” — an apparent allusion to a plunge in the housing market that would depress the value of the mortgage securities.

The case suggests that a reinvigorated SEC, after a long lull, is pressing to hold Wall Street accountable for its role in the worst financial crisis since the Great Depression. People familiar with the SEC investigation of Goldman said it could expand, and a special Senate investigations panel is preparing to hold a hearing that will put Goldman under yet another magnifying glass.

Elizabeth Nowicki, a former SEC attorney who’s a visiting law professor at Boston University, called the SEC’s fraud suit “a political case as much as it is a case that they needed to bring to stop this sort of favoritism.”

“The SEC wanted to convey the message that no, they’re not sitting back on their heels,” she said. “This is going after Goldman Sachs. You can’t really go after anybody bigger than that . . . . The SEC has the stomach to follow this out, absolutely, and they’ve got a bigger incentive now that they are clearly perceived as shamed and disempowered.”

It’s still unclear whether Goldman also could face legal exposure for failing to disclose to investors in 2006 and 2007 that it had secretly bet that the housing market would collapse when it sold off more than $40 billion in securities backed by subprime mortgages. McClatchy Newspapers described those dealings in a series of articles in November and December 2009, including Goldman’s role in betting on a housing downtown in at least a dozen offshore deals that it marketed.

The company, in a terse statement, denounced the charges as “completely unfounded in law and fact,” and vowed to “vigorously contest them and defend the firm and its reputation.”

Underscoring Goldman’s stature as the world’s most prestigious investment bank, the enforcement action triggered a 126-point drop in the Dow Jones index on Wall Street. Shares of Goldman led the way, plummeting nearly 13 percent.

After the market closed, Goldman issued a second statement, saying that it lost $90 million on the transaction and that all of the involved parties were “sophisticated” investors that were well aware of the risks.

Goldman said the largest investor, ACA Capital Management, selected the securities “after a series discussions, including with Paulson & Co.” Goldman called the exchange “entirely typical.”

Sylvain Raynes, a New York expert in structured securities of the type described in the SEC charges, said the stakes are huge for Goldman.

“To lose its reputation,” he said, “Goldman does not need to be found guilty many times. They only need one instance.”

Besides naming the company as a defendant, the civil complaint accuses Tourre of concealing Paulson’s role from investors in a synthetic securities deal known as ABACUS, 2007-AC1 — one in which investors didn’t actually buy any securities.

Instead, they effectively bet that a specified bundle of home loans to marginally qualified borrowers would perform well, while Paulson took “short” positions, meaning it bet that those bonds would founder.

Paulson profited grandly from the nation’s economic collapse, taking in a total of $3.7 billion from its bets. The SEC complaint says the firm paid Goldman $15 million to assemble the deal, which Tourre was principally responsible for structuring.

The marketing materials for the investment, known as a collateralized debt obligation, told investors that ACA Management LLC, an independent third party, selected the mortgage-backed securities. The Paulson firm wasn’t mentioned.

“The product was new and complex, but the deception and conflicts are old and simple,” SEC enforcement chief Robert Khuzami said in a statement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”

The deal, one of about two dozen similar bundles in the ABACUS series, closed on April 26, 2007. Within six months, 83 percent of the mortgage-backed securities in the bundle had been downgraded and 27 percent were placed on negative watch by Wall Street ratings agencies, the complaint says.

By the following Jan. 29, it says, 99 percent of the portfolio had been downgraded, costing investors more than $1 billion.

Khuzami said that the Paulson firm, which isn’t affiliated with former Treasury Secretary Henry Paulson, wasn’t charged because it didn’t mislead investors.

However, the complaint charges that Goldman and Tourre “knew that it would be difficult, if not impossible,” to find investors for a synthetic CDO if they disclosed that a short player, such as Paulson, had a significant role in selecting the securities. Thus, they sought a third party for that role and approached ACA, calling it “important that we can use ACA’s branding” in an internal e-mail.

The complaint quoted Tourre, then 28, as saying in a Jan. 27, 2007 e-mail to a friend that was written in French and English: “More and more leverage in the system, The whole building is about to collapse anytime now . . . . Only potential survivor, the fabulous Fab(rice Tourre) . . . standing in the middle of all of these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities (sic)!!!”

A Feb. 11, 2007 e-mail to Tourre from the unidentified head of Goldman’s structured product correlation trading desk said, “the cdo biz is dead we don’t have a lot of time left,” according to the complaint.

Paulson said in a statement that, while it bought credit protection from Goldman via the ABACUS deals, “We were not involved in the marketing of any ABACUS products.”

It said that ACA “had sole authority over the selection” of all securities in the deal, noting that two Wall Street ratings agencies — Moody’s Investors Service and Standard & Poor’s — gave them Triple A grades, the highest investment rating.

Both Moody’s and S&P have suffered tremendous damage to their reputations as a result of issuing favorable ratings to pools of U.S. mortgages that turned out to be junk.

The SEC said the only other investor in the ABACUS deal, IKB, a commercial bank in Dusseldorf, Germany, lost nearly all of the $150 million it invested. Goldman said the largest investor, ACA Capital Management, put up $951 million. ACA lost nearly all the money.

Friday’s charges were the first to be filed by the SEC’s Structured and New Products Unit, formed to pursue abuses in highly sophisticated deals.

Many of these deals are sliced according to risk, with investors who take the greatest risk receiving the highest yield. In deals that were partially or entirely synthetic, Goldman or some of its clients would profit if the securities soured.

Gary Kopff, an expert in mortgage securities who’s studied Goldman’s role in betting against investors in deals it marketed though the Cayman Islands, said that, “They manifest, in my opinion, the same misconduct that the SEC asserts occurred in the ABACUS deal.”

Goldman created a structured product correlation trading desk in late 2004 or early 2005. A memo describing the ABACUS 2007-AC1 transaction to the company’s Mortgage Capital Committee on March 12, 2007, said that the “ability to structure and execute complicated transactions to meet multiple clients’ needs and objectives is key for our franchise,” the SEC complaint says.

Executing the deal “and others like it helps position Goldman to compete more aggressively in the growing market for synthetics written on structured products,” the e-mail said.

According to the complaint, Paulson came to believe that the underlying securities in the ABACUS 2007-AC1 deal “would become worthless.”

In late 2006 and early 2007, it charges, Paulson identified more than 100 mortgage bonds that it expected to collapse, favoring those backed by loans to borrowers with low credit scores, adjustable rate mortgages and located in overheated real estate markets such as Arizona, California, Florida and Nevada.

In early January, Tourre forwarded a list of 123 mortgage-backed bonds under the heading “Paulson Portfolio,” leading to negotiations among Paulson, Goldman and ACA over the final portfolio, which included a sizable number of those selected by Paulson.

Kevin G. Hall and Marisa Taylor contributed.





It’s South Africa all over again

Who says the increasingly vocal campaign to highlight Israel’s “normalisation” efforts isn’t gathering steam?

When well-organized hecklers disrupted a recent London performance by the Jerusalem Quartet, the protest resonated far beyond Wigmore Hall, the city’s famous and much loved lunchtime place of pilgrimage for music lovers seeking a break from the hubbub of central London.

Not only did the disturbance cause the BBC to pull the plug on its nationwide live broadcast of the lunchtime recital; it sparked a new round of increasingly heated debates about the legitimacy of political demonstrations targeting Israel’s “cultural ambassadors” abroad, by protesters seeking to publicize alleged war crimes and human rights violations by the Jewish state.

Since the March 29 Wigmore protest, moreover, a landmark legal ruling elsewhere in the United Kingdom — arising from a previous demonstration against the quartet two years ago — is likely to further embolden those behind such actions.

In an April 8 ruling, a court in Edinburgh, Scotland, cleared five pro-Palestinian activists of racism, dismissing charges that they were guilty of racially aggravated conduct against members of the quartet.

The case dates to an August 2008 concert at the Edinburgh International Festival that hecklers disrupted repeatedly in protest against Israel’s blockade of Gaza, occupation of the West Bank and the musicians’ alleged links to the Israeli military.

State prosecutors had claimed that using this venue to protest against Israel and Israelis showed “malice and ill will” toward the quartet because of the musicians’ membership in a racial group, rendering the protest racist.

But after hearing a full transcript of the incident from a BBC recording of the concert, the presiding legal official (known as a “Sheriff” in this branch of Scottish law) ruled that the charges were disproportionate and failed to meet the test of racial abuse. He ruled the prosecution was a clear breach of the right to protest.

That it was the Jerusalem Quartet’s luck to be the target of high-profile protests in both cases is no small irony: The group’s name and its members’ past national service as musicians in the Israel Defense Forces notwithstanding, only one of the four lives in Israel today. And two are members and section leaders of the West-Eastern Divan — the youth orchestra co-founded by Edward Said, the late anti-Zionist, Palestinian-American scholar and activist, and by Daniel Barenboim, the Argentine-Jewish pianist and conductor.

The orchestra, based in Spain, is composed of musicians from Israel and of Arabs from across the Middle East, along with others from the region, and is conceived, in Barenboim’s words, “as a project against ignorance [where] people get to know the other, to understand what the other thinks and feels, without necessarily agreeing with it… a platform where the two sides can disagree and not resort to knives.”

“I don’t really know how to respond to these people or the misinformation they have been spreading,” said Kyril Zlotnikov, the quartet’s cellist, of the protesters. The musician, who was born in Minsk, Belarus, and is now based in Portugal, added: “I am an ambassador for my country in the same way that any musician from Britain, for example, is an ambassador for their country. Britain is like other countries in the world that have done some terrible things, but also some amazing good things.”

But a statement that the group released right after the Wigmore incident appeared to be less than accurate. “We are Israeli citizens, but have no connection with or patronage by the Government,” the statement said. In fact, publicity for the group lists Israel’s Foreign Ministry as a sponsor or co-sponsor of numerous appearances by the quartet, including on a European tour from 2005 to 2006 and a tour of the United States from 2007 to 2008. The group’s 2009 Australian tour was supported, in part, by an $8,000 Israeli Foreign Ministry grant, according to The Age, an Australian daily.

In that same statement, the two members who play with the West-Eastern Divan added, “It is destructive of our attempts to foster Israel-Arab relations for us to be the subject of demonstrations of the kind we suffered the other day.”

“So what?” say supporters of the protest in the U.K., increasingly a European center for pro-Palestinian activism. Those involved in other manifestations of the same movement scored bigger publicity coups by securing arrest warrants from lower courts ahead of visits by Israeli military and political figures.

The Jerusalem Quartet should be boycotted, they say, for reasons such as their role as cultural ambassadors for Israel, the fact that their tours have been sponsored by the Israeli government and because they have enjoyed an official status in the military as distinguished IDF musicians.

“Their whole career has intertwined with the Israeli army and support for Zionist institutions. That is why they were targeted,” said Tony Greenstein, who was one of the Wigmore Hall protesters.

Threats to shut down Haaretz and silence any questions

An important by Jonathan Cook in The National that reveals the depressing state of intellectual debate in Israel. If you aren’t for the state, get out of the country, so the thinking goes. Dissent is frowned upon, to put it mildly:

An Arab member of the Israeli parliament is demanding that a newspaper be allowed to publish an investigative report that was suppressed days before Israel attacked Gaza in winter 2008.

The investigation by Uri Blau, who has been in hiding since December to avoid arrest, concerned Israeli preparations for the impending assault on Gaza, known as Operation Cast Lead.

In a highly unusual move, according to reports in the Israeli media, the army ordered the Haaretz newspaper to destroy all copies of an edition that included Mr Blau’s investigation after it had already gone to press and been passed by the military censor. The article was never republished.

Mr Blau has gone underground in London after the Shin Bet, Israel’s secret police, demanded he return to Israel to hand back hundreds of classified documents they claim are in his possession and to reveal his sources.

Haneen Zoubi, an MP who previously headed an Israeli media-monitoring organisation, said it was “outrageous” that the suppressed report was still secret so long after the Gaza attack. She is to table a parliamentary question to Ehud Barak, the defence minister, today demanding to know why the army suppressed the article and what is preventing its publication now. Mr Barak must respond within 21 days.

She said publication of the article was important both because Israel had been widely criticised for killing many hundreds of civilians in its three-week assault on Gaza, and because subsequent reports suggested that Israeli commanders sought legal advice months before the operation to manipulate the accepted definitions of international law to make it easier to target civilians.

“There must be at least a strong suspicion that Mr Blau’s article contains vital information, based on military documentation, warning of Israeli army intentions to commit war crimes,” she said in an interview.

“If so, then there is a public duty on Haaretz to publish the article. If not, then there is no reason for the minister to prevent publication after all this time.”

Ms Zoubi’s call yesterday followed mounting public criticism of Haaretz for supporting Mr Blau by advising him to stay in hiding and continuing to pay his salary. In chat forums and talkback columns, the reporter has been widely denounced as a traitor. Several MPs have called for Haaretz to be closed down or boycotted.

A Haaretz spokeswoman refused to comment, but a journalist there said a “fortress mentality” had developed at the newspaper. “We’ve all been told not to talk to anyone about the case,” he said. “There’s absolute paranoia that the paper is going to be made to suffer because of the Blau case.”

Amal Jamal, a professor at Tel Aviv University who teaches a media course to professional journalists, said he was concerned with the timing of the Shin Bet’s campaign against Mr Blau. He observed that they began interviewing the reporter about his sources and documents last summer as publication neared of the Goldstone report, commissioned by the United Nations and which embarrassed Israel by alleging it had perpetrated war crimes in Gaza.

“The goal in this case appears to be not only to intimidate journalists but also to delegitimise certain kinds of investigations concerning security issues, given the new climate of sensitivity in Israel following the Goldstone report.”

He added that Mr Blau, who had quickly acquired a reputation as Israel’s best investigative reporter, was “probably finished” as a journalist in Israel.

Shraga Elam, an award-winning Israeli reporter, said Mr Blau’s suppressed article might also have revealed the aims of a widely mentioned but unspecified “third phase” of the Gaza attack, following the initial air strikes and a limited ground invasion, that was not implemented.

On Monday, an MP with the centrist Kadima Party, Yulia Shamal-Berkovich, called for Haaretz to be closed down, backing a similar demand from fellow MP Michael Ben-Ari, of the right-wing National Union.

She accused Haaretz management of having “chosen to hide” over the case and blamed it for advising Mr Blau to remain abroad. She said the newspaper “must make sure the materials that are in his possession are returned. If Haaretz fails to do so, its newspaper licence should be revoked without delay.”

Another Kadima MP, Yisrael Hasson, a former deputy head of the Shin Bet, this week urged Haaretz readers to boycott the newspaper until Mr Blau was fired.

A petition calling on the Shin Bet to end its threat to charge Mr Blau with espionage has attracted the signatures of several prominent journalists in Israel.

“We believe the Blau case is unique and are concerned this unique case will create a dangerous precedent,” their letter states. “Until now, prosecution authorities have not sought to try reporters for the offence of holding classified information, an offence most of us are guilty of in one way or another.”

Media coverage of the case in Israel has been largely hostile to Mr Blau. Yuval Elbashan, a lawyer, wrote in Haaretz this week that most of his fellow military reporters and analysts had in the past few days abandoned their colleague and proven “their loyalty to the [security] system as the lowliest of its servants”.

One, Yossi Yehoshua, a military correspondent with the country’s largest-circulation newspaper, Yedioth Aharonoth, is due to testify next month against Anat Kamm, a former soldier revealed as one of Mr Blau’s sources and who is accused of espionage.

He published several additional reports for Haaretz in 2008 and 2009 that severely embarrassed senior military commanders by showing they had issued orders that intentionally violated court rulings, including to execute Palestinians who could be safely apprehended.

Whatever you do, make sure you keep on saying that Israel is a democracy

Throughout the current Anat Kamm case in Israel – where predictably Jerusalem Post columnist Caroline Glick calls the paper behind the story, Haaretz, a friend of Israel’s enemies and “supporting treason” – Zionists in the West still cling onto the same old myths. Take the New York Forward:

There is a larger issue here: the efficacy of targeted assassinations, and whether the benefit of this practice outweighs the possibility it would, instead, spur on more acts of violence and revenge. This is the kind of issue that Israel, the only true democracy in the Middle East, ought to debate fully and freely. Holding government accountable is the media’s primary responsibility, and in the end can strengthen the bond between citizens and their leaders, a bond that now seems ever more dangerously frayed.

It’s like a mantra. Israel is the region’s only democracy. For Jews. Despite years of human rights reports that finds systemic discrimination against Arabs and others in Israel proper (let along the occupation), it’s still beyond many Jews in the West to acknowledge that Israel isn’t a democracy, it’s an ethnocentric ghetto.


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