wallraff-aufmacher-unzensiert

Bernd Pulch

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C O N F I D E N T I A L SECTION 01 OF 04 CARACAS 000692 

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HQSOUTHCOM ALSO FOR POLAD DEPARTMENT PASS TO AID/OTI (RPORTER) 

E.O. 12958: DECL: 06/04/2019 TAGS: PGOV PREL KDEM SOCI VESUBJECT: EXPLAINING VENEZUELAN ACQUIESCENCE 

CARACAS 00000692  001.2 OF 004 

Classified By: POLITICAL COUNSELOR FRANCISCO FERNANDEZ, REASONS 1.4 (B) AND (D) 

¶1. (C) Summary.  President Chavez's efforts to concentrate more power in his hands and undermine the democratic opposition have been met in Venezuela with more acceptance and resignation than outrage and resistance.  There are numerous, credible theories to explain Venezuelans' acquiescence to an increasingly authoritarian government ranging from Chavez's charismatic leadership and popular social programs to the fear, fatigue, and ineffectiveness that prevail among government opponents.  Moreover, the majority of Venezuelans, long reliant on their petro-state's largesse, appear to prioritize "social rights" and self-preservation over abstract civil liberties.  The enormous, corporatist Government of the Bolivarian Republic of Venezuela (GBRV) is for many citizens both an irreplaceable provider and exclusive source of information. Finally, Chavez has also effectively and systematically squelched any opposition to his rule either from within his ranks or from other political parties.  While Chavez's popularity may gradually erode as he radicalizes and the local economy worsens, the Venezuelan president still appears well positioned to keep accelerating his Bolivarian revolution at the expense of remaining democratic institutions.  End Summary. 

--------------------------- Increasing Authoritarianism --------------------------- 

¶2. (C) Since winning the February 15 referendum eliminating term limits, President Chavez has accelerated his Bolivarian revolution, further undermining political and economic freedoms in Venezuela.  In recent months the Chavez government has clamped down on leading opposition members while simultaneously using the National Assembly to close off any possible avenue for the opposition.  The GBRV pressed a corruption case against former Defense Minister Raul Baduel and Maracaibo Mayor and 2006 consensus opposition presidential candidate Manuel Rosales.  Baduel is awaiting trial in a military prison; Rosales fled to Peru.  The National Assembly passed laws that allowed the central government to take control over highways, ports, and airports previously controlled by state governments.  The Chavez government selectively applied the measure in states run by opposition governors. 

¶3. (C) In addition, the National Assembly created a new presidentially appointed position to run Caracas, removing virtually all responsibilities and funding from the recently elected opposition mayor of Caracas.  A law expanding this model to opposition-led states is reportedly in the works. The National Assembly is also actively considering a law that would give Chavez's PSUV party a significant advantage in the allocation of seats in legislative elections.  Moreover, the National Electoral Council intends to suspend any elections until work on the draft law is complete.  Chavez recently threatened to close Globovision, the only remaining opposition-oriented television network, and GBRV officials are pressing charges against Globovision's president.  The GBRV also nationalized over 50 oil service companies and has not yet offered swift and equitable compensation.  The GBRV has also intervened in the food industry, nationalizing a plant owned by U.S. agribusiness giant Cargill and occupying a second, as well as nationalizing land owned by FEMSA, the Mexican company that bottles and distributes Coca-Cola in Venezuela. 

¶4. (C) The opposition's response to these measures has been muted.  On May 1, the Caracas Metropolitan Police quickly dispersed a relatively small crowd of opposition marchers with tear gas.  There were far more Venezuelans stuck in beach traffic during that long weekend than took to the streets in defense of their liberties.  University students and faculty led an inconsequential march of several thousand to the Ministry of Education on May 20 primarily to protest higher education budget cuts.  Fewer than five thousand persons participated in a May 27 protest against the threatened shut down of Globovision.  Moreover, Chavez continues to enjoy considerable support in the polls, despite growing public dissatisfaction with key issues, such as crime and inflation.  Prominent pollster Alfredo Keller told us recently that Chavez is slipping in the polls, but still enjoys roughly 60% support; Luis Vicente Leon of Datanalisis put Chavez's popularity at over 54% as of April.  Edmond Saade of Datos also confirmed recently that Chavez enjoys majority support and far more support than any other public figure. 

------------------------- Hope and Purchasing Power ------------------------- 

¶5. (C) There are numerous reasons why Venezuelans are acquiescing to Chavez's anti-democratic measures.  The charismatic Venezuelan president conveys far more hope to voters than any of his competitors.  State media outlets constantly laud government initiatives, social programs, and "achievements of the revolution."  Chavez himself regularly launches building projects, opens government cooperatives, or announces expropriations on his weekly "Alo, Presidente" radio and television talk show.  While government critics rightly point out that many of the GBRV's projects are unsustainable, inefficient, or corrupt, local pollsters point out that Venezuela's poor report that they have more money in their pockets.  Large numbers of Venezuelans also avail themselves of GBRV social programs, most commonly shopping at subsidized Mercal or Pdval stores, or receiving medical care courtesy of the Barrio Adentro program.  "At least Chavez has given us something," is prevalent local sentiment among sectors of society long reliant on government largesse ("Papa estado"). 

---------------------------------- Class Resentment and Social Rights ---------------------------------- 

¶6. (C) Chavez has also reaped political gains by stoking class antagonisms in stratified Venezuela.  Railing against local "oligarchs," the Venezuelan president aims most of his economic "reforms" at large, and often foreign, enterprises. Although the vast majority of Venezuelan still support private property protections, there is little popular sympathy for big business in Venezuela, and as yet, little public recognition of the long-term economic effects of driving out foreign investment.  Moreover, Chavez's core supporters believe that they would lose anything gained over the last decade if Chavez were to fail.  Chavez has sought to reassure his base that he is not undermining their economic freedoms.  One week after seizing large tracts of farmland in his native state of Barinas, Chavez distributed property titles last week to urban squatters in a televised ceremony. Local pollsters note that in this context most Venezuelans prioritize "social rights" over civil liberties.  They tend to be more attracted to Chavez's promises of redistribution of wealth than alarmed by his concentration of power. 

-------------------- Frog in a Teflon Pot -------------------- 

¶7. (C) To explain Venezuelans' relative docility, many pundits also cite the analogy that a live frog placed in boiling water will try to escape, but if placed in water gradually heated up, it will die unsuspectingly.  The Venezuelan president reportedly leans heavily on polls and has carefully calibrated the pace of change so as not to get too far in front of public opinion.  Chavez has paused in the face of opposition to politically charged education overhaul, a Counterintelligence Law, and the proposed anti-NGO Law of International Cooperation.  He accepted a narrow electoral defeat in the December 2007 constitutional referendum, but later enacted many of the proposed reforms through a compliant legislature.  He also subsequently won acceptance for the elimination of term limits in the February 2009 referendum. 

¶8. (C) With full control over all other branches of government, Chavez usually succeeds in imposing his will through ostensibly "legal" means.  Constitutional experts' arguments to the contrary tend to get lost on most voters. For example, most Venezuelans are far more concerned about obtaining good government services than they are interested in a debate as to whether the central government or state and local governments should provide such services.  When Venezuelans do express dissatisfaction with the government, they tend to blame Chavez's ministers and other senior officials rather than Chavez himself.  This holds true despite the fact that Chavez selects all senior GBRV officials and generally rotates a small, closed circle of confidants to key positions. 

---------------- What Opposition? ---------------- 

¶9. (C) Some local pundits call the political opposition Chavez's best ally.  Ten years after Chavez was first elected, the democratic opposition is still talking about the need to articulate a politically attractive, democratic alternative.  Opposition parties regrettably are still mostly personalist vehicles with no discernible party platforms. Moreover, almost all opposition parties are relatively strong in specific regions and lack a genuine nationwide presence. With few exceptions, most opposition leaders have focused on criticizing Venezuela's Teflon president rather than engage in much-need grassroots organizing among Venezuela's poor. Chavez's United Socialist Party of Venezuela (PSUV) enjoys a virtual monopoly in Venezuela's countryside.  Moreover, opposition parties continue to squabble among themselves, and there is currently no single opposition leader who enjoys anything approaching the popularity of Chavez. 

¶10. (C) Opposition parties failed to unite in a few key gubernatorial and numerous mayoral races in November 2008, allowing Chavez's United Socialist Party of Venezuela (PSUV) to win races the PSUV otherwise would have lost.  Opposition parties have not yet agreed on a methodology to pick unified candidates for the 2010 parliamentary elections (they foolishly boycotted the 2005 elections).  At the same time, the central government is actively hampering opposition-led states and municipalities to prevent elected opposition leaders from building democratic alternatives to Chavismo. The student movement injected new life into the opposition Q 2007, but student politics are inherently transitory. Numerous student leaders have formally entered politics and visible student activism has declined.  Pro-Chavez dissidents, for their part, have not made much of a dent at the polls so far. 

------------ Fear Matters ------------ 

¶11. (C) Chavez has also spun what pollster Luis Vicente Leon calls a "web of fear."  Rather than engage in wholesale repression, the GBRV has made examples of prominent sector leaders that have had a chilling effect on the rest of civil society.  For example, the GBRV closed RCTV, launched investigations into electoral NGO Sumate, and recently sentenced three former Caracas police commissioners to 30-year prison terms for their alleged role in the short-lived 2002 coup.  Chavez regularly vilifies selected Catholic bishops and personally announced that Manuel Rosales would be jailed even before charges were brought against him.  Opposition activists receive pointed, threatening phone calls (one former ambassador was told, "We know you have only one kidney."). 

¶12. (C) The GBRV also allows pro-Chavez thugs, most notably the "La Piedrita" and "Alexis Vive" collectives, to engage in political violence with impunity.  In a society awash in conspiracy theories, Venezuelans are inclined to believe the GBRV is omnipotent.  Moreover, the GBRV has relied heavily on "litmus lists."  Whether you signed the presidential recall referendum drive ("Tascon List") or are among the five million voters who purportedly registered with Chavez's PSUV party can determine whether or not you have access to government services, loans, scholarships, or can even obtain a passport. 

--------------------- Been There, Done That --------------------- 

¶13. (C) Opposition leaders concede that only a small minority of Venezuelans are inclined to attend protest marches or political rallies.  They note that many Chavez opponents are discouraged by the fact that street protests have done little to change Chavez's decisions or undermine his popularity. Massive opposition rallies in 2002, the 2002-2003 general strike, and the presidential recall referendum drive did not succeed in forcing Chavez from power (except for three days during the April 2002 interregnum).  Rosales' 2006 presidential campaign mobilized large opposition rallies, but Rosales polled only 37% of the vote.  Student-led protests in 2007 did not dissuade the GBRV from shuttering RCTV, nor do they appear to be deterring the GBRV from going after Globovision.  Student leaders recently conceded to us that their street power is only "effervescent." 

------------------------ Accommodation and Plan B ------------------------ 

¶14. (C) In the absence of hope for change, many Venezuelans, including business and professional elites, have found ways to accommodate themselves to the Bolivarian revolution, or at a minimum, to avoid political risks.  Because the GBRV regulates and dominates the domestic economy so much, private sector leaders argue they have little choice but to find ways to "get along" in order to survive and prosper.  Opposition political parties report that contributions from the private sector have virtually dried up.  Moreover, large numbers of well educated and skilled Venezuelans have chosen flight over fight.  The Spanish, Italian, and Portuguese embassies have all experienced a boom in citizenship claims.  Millions of Venezuelans have claims to citizenship in EU countries due to massive European immigration in the 1950's.  These Venezuelans tend to be middle class, multilingual, and better-educated, making emigration a viable alternative to confronting Venezuela's political and economic problems. There is a six-month backlog for U.S. non-immigrant visa interview appointments.  Jewish community leaders report that their small community has been devastated by the emigration of the younger generation. 

------------------ The Media Monopoly ------------------ 

¶15. (C) Many Venezuelans appear to be unaware of Chavez's concentration of more power in his hands because the GBRV exerts a virtual monopoly over the news.  Chavez closed RCTV, the only free-to-air network critical of the GBRV in May 2007, and opposition-oriented cable news network Globovision is only free-to-air in Caracas and Valencia.  Six state television channels laud Chavez and cheerlead his Bolivarian revolution while the remaining free-to-air networks exercise considerable self-censorship.  The GBRV also controls a wide network of community radio stations and sustains a continued socialist ideology campaign via thousands of specially trained promoters.  Chavez has also presided over 1200 hours of obligatory TV and radio broadcasts ("cadenas").  Local polling firms all tell us that public opinion is decidedly against further centralization, but most Venezuelans profess to be unaware of Chavez's efforts to undermine elected opposition governors and mayors.  Pollsters also note a marked tendency for Chavez's strongest supporters to give unconditional support to their president. 

------- Comment ------- 

¶16. (C) Despite controlling all branches of government, centralizing economic activity in the government's hands, controlling the information fed to the majority of the population, and enjoying majority support, President Chavez may yet be confronted by new political challenges.  Public support for him is likely to erode if the ongoing radicalization of the Bolivarian revolution or an economic downturn begin to erode the purchasing power of his political base.  Venezuelans still prefer social democracy to Chavez's ill-defined "Socialism of the 21st Century" by a wide margin and are tired of political polarization, according to local polls. 

¶17. (C) Nevertheless, Chavez right now appears to be squarely in the driver's seat.  He has recouped personal popularity and survived tough economic times before, including during the 2002-2003 national strike.  Moreover, the Venezuelan president has carefully taken the necessary steps to eliminate any real political challenger, and the opposition has yet to present a concrete, attractive alternative to Chavismo.  He also fully controls the legislature and judiciary, and with parliamentary elections at least 18 months away, Chavez has plenty of time to develop the legal framework to try to stay in power for as long as he wishes. 

CAULFIELD

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C O N F I D E N T I A L SECTION 01 OF 03 KUALA LUMPUR 000805 

SIPDIS 

FOR EAP/MTS 

E.O. 12958: DECL: 09/12/2018 TAGS: PGOV KDEM MARR MYSUBJECT: PM ABDULLAH'S POSITION ERODED AFTER TUMULTUOUS WEEK 

REF: KUALA LUMPUR 787 

Classified By: Political Section Chief Mark D. Clark for reasons 1.4 (b  and d). 

SUMMARY ------- 

¶1. (C) Prime Minister Abdullah Badawi has seen his political position eroded during a tumultuous week of mounting challenges from within his United Malay National Organization (UMNO), his coalition partners, and the opposition.  While struggling to regain cohesion within his National Front (BN) coalition in the face of inter-racial tensions, UMNO leaders have raised new questions over Abdullah's 2010 transition to his deputy Najib Tun Razak, creating fresh doubts that Abdullah can gain his party's reelection in December. Opposition leader Anwar Ibrahim dispatched his lieutenants to Taiwan with the avowed aim to complete talks with BN members of Parliament who would crossover to bring down Abdullah's government.  At the same time, the Opposition alliance stated the September 16 deadline to topple the government could slip.  The chief of the armed forces clarified that the military would remain apolitical, but could be called out via proper legal channels to assist with internal security. Abdullah emerged from an UMNO meeting to state that the government could use the Internal Security Act (ISA), and its detention without trial provisions, to preserve internal security; on September 12 the government made good on this threat by detaining controversial blogger Raja Petra.  End Summary. 

RACIST COMMENTS PROMPT UMNO LEADERS MEETING ------------------------------------------- 

¶2. (SBU) To quell growing animosity and tension between UMNO and its ethnic Chinese partners in the National Front coalition resulting from caustic racist comments from Penang UMNO division leader Ahmad Ismail, PM Abdullah was forced to hold a meeting of the BN Supreme Council on September 9 and a gathering of the UMNO Supreme Council on September 10.  The BN leaders referred the matter to UMNO to take action against its own member.  After a three hour meeting, the UMNO Supreme Council decided to suspend Ahmad from the party for three years, stripping him of all of his official duties.  Despite this ruling, Ahmad remained defiant and suggested his Penang division quickly would create a new role for him.  Some of Abdullah's detractors in the party, like Selangor warlord Khir Toyo, came to Ahmad's defense.  The Malaysian Chinese Association (MCA) and the Chinese-dominated Gerakan party voiced their appreciation for UMNO's decision, but also called for a stop to further racially incendiary remarks. 

2010 TRANSITION UNRAVELING? --------------------------- 

¶3. (C) As Abdullah and UMNO attempted to douse heated racial tensions that damaged the BN coalition, this week also witnessed the fraying of UMNO's acquiescence to Abdullah's plan to hand over power to DPM Najib in 2010.  The most direct blow came from International Trade and Industry Minister Muhyiddin Yassin, an UMNO Vice President who is considered a potential candidate for Deputy Prime Minister should Abdullah step down.  Muhyiddin stated on September 10 that Abdullah should resign well before the June 2010 transition date.  Muhyiddin noted that the initial promise of this two-month old proposal, meant to assuage concerns about Abdullah's sagging popularity and party support, had now "sunk away".  Reacting during a televised press encounter, Abdullah was visibly angered by Muhyiddin's comment. Abdullah questioned why Muhyiddin would challenge the transition plan when the UMNO Supreme Council had already approved the transition and its timing.  On September 12, Deputy Prime Minister Najib Razak appeared to contradict Abdullah and shift his position away from Abdullah's deal, stating that delegates at the December UMNO party elections should approve the transition and its timetable.  Other important UMNO leaders have revived their calls to eliminate high quotas for the number of nominations needed to contest leadership positions in the party polls, a system which now heavily favors Abdullah. 

MAHATHIR SEEKS RETURN TO UMNO ----------------------------- 

¶4. (SBU) Complicating matters further for Abdullah, former PM and former UMNO President Mahathir, who quit UMNO on May 19 after expressing disgust with Abdullah's leadership, is considering returning to the party.  A smiling UMNO Vice President Muhyiddin told reporters September 9 that Mahathir was persuaded by him, Tengku Razaleigh and several other veteran UMNO leaders at a private meeting at Mahathir's residence on September 6 to rejoin UMNO to help "fix the problems" afflicting the party.  Foreign Minister and senior UMNO official Rais Yatim later joined other party leaders in welcoming Mahathir's proposed return to the fold.  Mahathir reportedly is now backing his former nemesis, Tengku Razaleigh, to unseat Abdullah in the December UMNO party elections.  Commenting tersely on the possible return of Mahathir, whose harsh criticisms of the Prime Minister continue unabated, Abdullah stated September 11 that the UMNO Supreme Council will decide on the issue as "this is a party matter." 

THE OPPOSITION ATTEMPTS TO COUNTER TAIWAN PLOY... --------------------------------------------- ---- 

¶5. (SBU) Opposition leader Anwar Ibrahim meanwhile sought to keep the pressure on UMNO and BN by dispatching four senior officials from this Peoples Justice Party's (PKR) to Taiwan, supposedly to meet with BN MP's who may crossover to bring down Abdullah's government.  BN had hastily arranged a "study tour" to Taiwan for BN members of Parliament, September 8-17, in what is widely viewed as a ploy to thwart September 16 crossovers.  PKR said their officials would attempt to finalize the crossovers (the opposition requires 30 to claim the majority and topple Abdullah's government). 

OPPOSITION ADMITS SEPTEMBER 16 COULD SLIP ----------------------------------------- 

¶6.  (SBU) As PKR announced its officials were going to Taiwan to finalize crossovers, the opposition People's Alliance (Pakatan) also issued a statement suggesting that the September 16 deadline for toppling BN could slip.  The three-party alliance of PKR, the Democratic Action Party (DAP) and the Islamic Party of Malaysia (PAS), in a September 11 release, explained that the September 16 deadline may have to be postponed due to the Taiwan trip by the BN MPs. However, the coalition expressed confidence that a change of federal government "would happen soon."  Subsequently, BN officials announced that many of the MPs would be returning early from Taiwan, hinting that this should eliminate excuses for Anwar not meeting his September 16 deadline. 

ARMED FORCES TO STAY OUT OF POLITICS, BUT STILL ON CALL --------------------------------------------- ---------- 

¶7. (SBU) Malaysian Armed Forces Chief General Abdul Aziz Zainal stated at a press conference September 11 that the armed forces have been and will remain apolitical.  The General gave his assurance following questions and criticism from opposition and civil society quarters over his statement on September 9, urging the government to take stern action against anyone stoking racial sentiments in the country and thereby threatening national unity.  "The armed forces are highly professional and apolitical", Abdul Aziz clarified on September 11, and would only get involved in internal matters if requested through the legal process by the authorities or police.  He explained, "Our (the military's) secondary role is to support the police and government agencies in any form of operations where our presence is requested -- such as for internal security, humanitarian and disaster relief operations.8  General Abdul Aziz refused to comment when asked by reporters whether he would support a new government, adding "I do not know of any (impending) changes in government." 

ABDULLAH THREATENS USE OF THE INTERNAL SECURITY ACT --------------------------------------------- ------ 

¶8. (SBU) PM Abdullah stated September 10, following the UMNO Supreme Council meeting, that he did not rule out the possibility of invoking the Internal Security Act (ISA), which allows detention without trial for those who threaten national security.  He added that the Home Minister, who has the authority to approve ISA detentions, would "think twice or even three times" before deciding to take that step, but "if the minister thinks that it is an appropriate action to be taken, then he will take it." 

¶9. (SBU) The Prime Minister said that in the September 10 Cabinet meeting, his Ministers expressed concern and described race relations in the country as showing "not so good signs," and that a number of sensitive issues which were not openly discussed before were being raised. Although the government has managed to control the situation thus far, he added that "we cannot allow a fiery situation to prevail as it could jeopardize the peace and security of our country." Responding to a question on whether the government would curtail freedom of speech in the country, the PM explained that there was no such thing as absolute freedom anywhere in the world, noting "People cannot just say whatever they like, in the name of free speech, to the extend that it can offend and hurt others and jeopardize security." 

MAKING GOOD ON THE THREAT ------------------------- 

¶10.  (SBU) Abdullah's government made good on the threat by arresting controversial blogger Raja Petra Kamaruddin at his home on September 12, using the ISA.  Home Minister Syed Hamid confirmed to reporters that police had detained Raja Petra under the ISA provision for persons who pose threats to "security, peace and public order."  Raja Petra has repeatedly enraged the BN government by, among other things, blunting attacking senior political leaders, connecting DPM Najib to a murder scandal, and condemning the sodomy allegations against Anwar.  Raja Petra currently faces sedition and defamation charges.  Septel provides more details of the arrest and provides suggested press guidance. 

COMMENT ------- 

¶11.  (C) Abdullah has endured a rough week, one that has eroded his political strength.  The current tone of the direct and indirect challenges to his position are similar to those he faced in the first six weeks after the March 8 election debacle when his continuation in office was an open question.  Two factors are increasing the pressure on Abdullah at this point.  First, UMNO has become unnerved in the face of Anwar Ibrahim's threat to bring down the government this month, and the greater Anwar's menace, the more UMNO elites consider replacing Abdullah with a stronger figure.  Second, the UMNO divisional elections, which select delegates to the December party polls, begin on October 9 almost immediately following the Muslim holidays at the end of the Muslim fasting month.  Those leaders who wish to challenge Abdullah's reelection and his two-year transition to Najib must stake out their positions now and maneuver for support, or the opportunity quickly will be lost. 

KEITH

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E.O. 12958: DECL: 03/23/2011
TAGS: PGOV PHUM PREL LY BU
SUBJECT: BULGARIA LOOKS TO U.S. FOR "PUSH" ON LIBYA

REF: TRIPOLI 60

CLASSIFIED BY: AMBASSADOR JOHN BEYRLE, FOR REASONS 1.4 (B) AND (D).

¶1. (C) SUMMARY: IN A MARCH 23 MEETING WITH THE AMBASSADOR, FOREIGN MINISTER KALFIN EXPRESSED CONCERN THAT NEGOTIATIONS ON THE RELEASE OF BULGARIAN NURSES IN LIBYA WERE "GOING INTO SLEEP MODE" AND SUGGESTED THAT A HIGH-LEVEL PUSH FROM THE U.S. SIDE MIGHT BE THE BEST NEAR-TERM CHANCE OF GETTING TALKS BACK ON TRACK. END SUMMARY.

¶2. (C) KALFIN'S FRUSTRATION WAS BASED ON THE FACT THAT, DESPITE AGREEMENT FROM ALL SIDES ON A GENERAL FRAMEWORK FOR MOVING FORWARD, MOVEMENT TOWARD THE NURSES' EVENTUAL RELEASE IS STALLED DUE TO DELAYS IN THE SCHEDULING OF A NEW TRIAL AND LACK OF PROGRESS IN NEGOTIATIONS WITH THE VICTIMS' FAMILIES. KALFIN SAID HE UNDERSTANDS THAT THIS IS A "DIFFICULT TIME FOR QADHAFI" AND NOTED THAT RECENT EVENTS IN BENGHAZI HAVE SHOWN THAT THE LIBYAN LEADER "IS NOT MASTERING THE SITUATION." CITING THE LIBYAN COURT'S UPCOMING SUMMER RECESS, KALFIN EXPRESSED CONCERN THAT THE COURT'S FAILURE TO SET A DATE FOR THE NURSES' RETRIAL COULD CAUSE THE ENTIRE PROCESS TO STALL. ACCORDING TO A REPORT RECEIVED BY KALFIN ON MARCH 22, THE LIBYAN COURT IS CONSIDERING HOLDING THE NEW TRIAL IN BENGHAZI, RATHER THAN TRIPOLI AS REPORTED IN REFTEL. KALFIN FELT THAT A BENGHAZI TRIAL WOULD FURTHER COMPLICATE PROGRESS TOWARD A FAVORABLE RESOLUTION.

¶3. (C) WHEN ASKED BY THE AMBASSADOR WHETHER A NEW ROUND OF MULTILATERAL MEETINGS COULD HELP ADVANCE THE PROCESS, KALFIN WAS PESSIMISTIC, STATING THAT THERE WAS "NOTHING ELSE TO TALK ABOUT ON THE POLITICAL LEVEL." IN ORDER FOR MULTILATERAL MEETINGS TO SUCCEED, HE SAID, IT WOULD FIRST BE NECESSARY FOR THE LIBYAN SIDE TO PROPOSE A TRIAL DATE, A PLAN FOR THE FAMILIES, AND AN ULTIMATE DEADLINE FOR RETURN OF THE MEDICS.

¶4. (C) REFERRING TO RECENT TALKS WITH THE LIBYAN GOVERNMENT ON DEBT FORGIVENESS, KALFIN SAID THE GOB IS WILLING TO ACCEPT ANY LIBYAN PROPOSAL FOR REVALUATION OF THE DEBT -- "TO FIVE MILLION DOLLARS OR TO FIVE DOLLARS" -- AS LONG AS IT IS PART OF A FINAL SETTLEMENT. HOWEVER, THE BULGARIAN SIDE SEES LITTLE POINT IN NEGOTIATING A SEPARATE AGREEMENT WITH LIBYA ON DEBT REVALUATION WHILE THE FATE OF THE MEDICS REMAINS UNRESOLVED.

¶5. (C) KALFIN EMPHASIZED THE GOB'S ATTEMPTS TO EXERCISE PUBLIC RESTRAINT ON THE ISSUE IN ORDER TO ENCOURAGE A PRODUCTIVE ATMOSPHERE FOR NEGOTIATIONS. HE SPECIFICALLY MENTIONED THAT BULGARIA HAD STOPPED THE COUNCIL OF EUROPE FROM ISSUING A RESOLUTION ON THE ISSUE ON THREE SEPARATE OCCASIONS, BUT HE NOTED THAT SUCH A POSITION WAS NOT SUSTAINABLE INDEFINITELY. KALFIN ALSO GAVE A READOUT OF PRESIDENT PURVANOVS MARCH 1 PHONE CONVERSATION WITH QADHAFI, STATING THAT IT WAS BROADLY POSITIVE, IF NOT PARTICULARLY SUBSTANTIVE. ACCORDING TO KALFIN, QADHAFI WAS ENGAGED AND APPEARED WELL-INFORMED ON RECENT DEVELOPMENTS IN THE CASE, HOWEVER, "YOU NEVER KNOW WITH QADHAFI."

¶6. (C) COMMENT: IN KALFIN'S WORDS: "IF THERE IS ONE THING THAT INFLUENCES THE LIBYAN POLICY, IT IS THE U.S. POSITION." THE BULGARIANS CONTINUE TO SEE WASHINGTON AS THE MOST INFLUENTIAL INTERNATIONAL PARTY TO THE ONGOING TALKS WITH LIBYA, AND WANT US TO USE OUR INFLUENCE TO KEEP THINGS MOVING. WE BELIEVE THE PREREQUISITES FOR A MULTILATERAL MEETING OUTLINED BY KALFIN IN PARA. 3 ABOVE ARE A BIT STRICT (SURELY THERE CAN BE A MEETING IN ADVANCE OF SETTING A DEADLINE) BUT WOULD WELCOME VIEWS FROM USLO AND WASHINGTON ON NEXT STEPS. END COMMENT. 

BEYRLE

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E.O. 12958: N/A 
TAGS: PGOV PREL LY BU
SUBJECT: BULGARIA RECOVERS FROM NURSES' RETURN 
 
Ref: Sofia 924 
 
¶1. On August 2, the GOB approved forgiving USD 56.635 million of communist-era debt owed by Libya. This debt forgiveness was Bulgaria's contribution to the deal brokered by the EU for Libya to release five Bulgarian nurses and a Palestinian doctor. Whatever else may be murky in the deal, Bulgaria's debt forgiveness is both public and completed.
 
¶2. Since the nurses' July 24 return home, Bulgarian government and society have been working to reintegrate them into a country that has substantially changed over eight years. The Palestinian doctor, who announced he wishes to remain in Bulgaria, has also been warmly welcomed. After their return the nurses spent two weeks at the government's VIP residential compound outside Sofia. The GOB promised to find all the medics jobs, and a number of hospitals have offered positions. The GOB gave each medic 10,000 leva (USD 7,000), is covering their medical bills (two of the nurses needed unspecified surgery), and covered pension and medical insurance payments for the past eight years. Phone company MTEL is providing each with an apartment and cell phone, a local newspaper owner gave each another 10,000 leva, and a local construction company is renovating one nurse's rural house. Two nurses have been provided with hotel rooms in Bulgaria's premier ski resort as they readjust to life in Bulgaria. Sofia's mayor offered to pay for language classes and to help the Palestinian doctor settle in Sofia.
 
¶3. Although a few groups complained the nurses were getting more than ordinary citizens facing economic problems, the aftermath of the medics' return has seen surprisingly little rancor and recrimination. Bulgaria has, for the most part, moved on. When one nurse's son demanded 100,000 euros from the GOB as compensation for its failure to free the medics, the medics themselves announced they had no claim on the government. Most Bulgarian press, always eager to jump at a scandal, have stated the GOB did what it could. The only scandals have been minor blips in the press, caused by France's Avocats sans Frontieres (ASF). International press quoted ASF lawyer Stephane Zerbib as claiming the medics were being held prisoner in the presidential residence and would seek political asylum in France. Another ASF lawyer, Emmanuel Altit, reportedly arrived in Sofia shortly after the medics and tried to persuade them to sue the GOB. The medics deny any intent to seek asylum abroad or sue the GOB. The Palestinian doctor is apparently seeking to take Libya to court on torture charges, but this is unlikely to be a hot button issue here.
 
¶4. All in all, jubilation at the nurses' return has segued to near matter-of-fact normalcy. If the nurses speak out about their experience, that could change. For now, the mood is one of relief and recuperation.
 
KARAGIANNIS

VZCZCXRO0460
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHKL #0765/01 2410943
ZNY CCCCC ZZH
P 280943Z AUG 08
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC PRIORITY 1550
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 2489
RUEHKO/AMEMBASSY TOKYO 2564
RHHMUNA/USCINCPAC HONOLULU HI
RHEHNSC/NSC WASHDC
C O N F I D E N T I A L SECTION 01 OF 02 KUALA LUMPUR 000765 

SIPDIS 

DEPT FOR EAP/MTS 

E.O. 12958: DECL: 08/28/2018
TAGS: PGOV PHUM PINR KDEM MY
SUBJECT: ANWAR SWORN IN AT PARLIAMENT 

REF: A. KL 759 ANWAR WINS RESOUNDING VICTORY
     ¶B. KL 753 INDICATORS ALL POINT TO ANWAR VICTORY
     ¶C. KL 743 GOM PLAYING HARDBALL 

Classified By: ACTING POLITICAL SECTION CHIEF W. GARY GRAY, REASON 1.4
(B AND
 D). 

¶1. (C) Summary.  Anwar Ibrahim, still savoring his landslide
by-election victory, was sworn into Parliament on August 28
after being officially confirmed as leader of the Pakatan
Rakyat (PR) opposition alliance.  His first intervention was
to question the merits of  the DNA identification bill which
the ruling coalition planned to pass later that day.  Some
key Anwar aides seemed to be hedging on their leader,s
stated pledge to oust the Government by September 16 and
neutral observers were even more skeptical, but most agreed
that Anwar is now enjoying a surge of  momentum.   A suddenly
more assertive mainstream media is portraying  the BN as
mired in old thinking and old methods, in contrast to the
more cutting edge tactics effectively employed by the
opposition in Permatang Pauh.  End Summary. 

¶2.  (C) Parliament was the center of attention on August 28
as Anwar Ibrahim, followed by a large media entourage,
entered to be sworn in by Speaker Pandikar Amin Mulia at the
beginning of the session.  The Speaker also formally
announced that the PR parties had unanimously selected Anwar
as Opposition Leader in Parliament.  Star newspaper chief
editor Wong Chun Wai, (recalling a conversation with  PM
Abdullah a few days before) told Poloffs that PM Abdullah
himself had overruled underlings who wanted to delay Anwar,s
entry into Parliament and ordered that the newly-elected MP
be sworn in as soon as possible.  Anwar, again mobbed by
reporters upon re-emerging from the chamber, chided the BN
for spending "billions" in Permatang Pauh but failing to win
over voters with its negative race-based campaign.  Having
harshly criticized the media over the past several weeks,
Anwar told the assembled journalists that he knew "your
hearts were in the right place even though you have to write
what your bosses order."  In that regard, state-owned RTM
(Radio-Television Malaysia), which normally broadcasts the
first 30 minutes of every Parliament session, began its
coverage only after Anwar,s swearing in. 

¶3. (C) The mainstream media, with the notable exception of
Malay language publications, has exhibited uncharacteristic
boldness in the wake of the by-election, with a number of
articles sharply critical of the BN,s campaign in Permatang
Pauh and expressing grudging admiration for the opposition
alliance,s operation.  Star editor Wong told us he had
resisted pressure to downplay Anwar,s triumph and insisted
on reporting it in banner headlines.  Such  openings have
appeared in the past only to be slammed shut, and the GOM
sent a message on August 27 by ordering all 21 Internet
Service Providers (ISPs) in the country to  block access to
Rajah Petra,s controversial  Malaysia Today website
((www.Malaysia-Today.net).   The site remains accessible,
however, through an alternate link.  Raja Petra charged that
the GOM had breached its own commitment not to censor the
internet during the promotion of Malaysia,s own version of
Silicon Valley, the Multimedia Super Corridor. 

¶4.  (C) While Anwar held court outside, in the chamber
opposition MPs voiced their objections to the DNA
identification bill, which Home Affairs Minister Syed Hamid
was pushing to pass by the end of the day.  Anwar himself
returned to make his first intervention, questioning the
Government,s motives for trying to rush through the bill,
widely seen as targeted at Anwar's own ongoing sodomy case
(Ref C).  Opposition MPs acknowledged to us that they had no
hope of delaying the legislation and expected it to pass, but
as noted (Ref A), the bill must pass through the upper house,
not scheduled to meet until December 1, before becoming law. 

¶5.  (C) Anwar,s Political Secretary Sim Tze Min and PKR
electoral chief Saifuddin Nasution  told Poloffs that the
opposition plan to achieve a majority in Parliament by
September 16 remains "on" but others, including PKR Vice
President Azmin Ali  were more cautious, noting "we,ll see."
 More detached observers remain highly skeptical of Anwar,s
ability to meet his self-proclaimed deadline, but do not
deny, given his present momentum, that the opposition leader
could eventually prevail.  Saiffudin maintained that  Anwar
is now clearly winning the electoral game, but what remains
is winning over the critical institutions, especially the
police and the military.  He claimed, however, that  compared
to ten years ago, Anwar and the opposition are in far better
shape in this regard to having, won over a number supporters
within the various key state institutions.  He acknowledged
that the Police Special Branch was especially critical in
this regard, expressing the hope that SB personnel, better
than anyone else, knew which way the political winds were
blowing and would want to emerge on the winning side or at
least hedge their bets. 

¶6.  (C) Our PKR interlocutors continued to exhibit  some
nervousness about PAS's reliability as a coalition partner.
While gratified with what they saw as a sterling PAS
performance in supporting Anwar in Permatang Pauh, they worry
that elements within PAS, especially its youth wing, will
continue to issue extreme  pronouncements that alienate other
coalition partners.  They also concede that any new balance
of power resulting from MPs crossing over to Anwar,s side
must include sufficient numbers of Malay/Muslims to avoid
alienating PAS.   In addition to the fragility of the PR, of
course the next serious obstacle for Anwar is his upcoming
sodomy trial.   GOM sources continue to suggest that  they
have what they see as some sort of convincing  evidence up
their sleeve.  This presumably would be revealed  upon the
beginning of the trial, the date of which will be determined
when the court reconvenes on September 10. 

KEITH

Washington, D.C., July 25, 2011 – Forty-five years after President Johnson signed the U.S. Freedom of Information Act into law in 1966, federal agency backlogs of FOIA requests are growing, with the oldest requests at eight agencies dating back over a decade and the single oldest request now 20 years old, according to the Knight Open Government Survey by the National Security Archive at George Washington University (www.nsarchive.org).

The Knight Survey of the oldest requests utilized the FOIA to examine the actual copies of the oldest requests from the 35 federal agencies and components that process more than 90 percent of all FOIAs.  It shows that the oldest requests in the U.S. government were submitted before the fall of the Soviet Union.  These unfulfilled requests – some are for documents that are themselves more than 50 years old – are victims of an endless referral process in which any agency that claims “equity” can censor their release.

The Freedom of Information Act requires agencies to process and respond to a request within 20 business days, with the possibility of a ten-day extension under “unusual circumstances.”  In his March 19, 2009 government-wide memo on FOIA, Attorney General Eric Holder declared that “long delays should not be viewed as an inevitable and insurmountable consequence of high demand.”  Despite this, the Knight Survey shows that some FOIAs remain marooned for decades.

The two previous Knight Open government surveys conducted during the Obama administration have also shown that, despite a clear message from the President, government agencies have been slow to improve their Freedom of Information processes.  The 2010 Knight Survey, “Sunshine and Shadows,” showed that only 13 of 90 agencies implemented concrete changes in response to President Obama and Attorney General Holder’s early memoranda calling for FOIA reforms.  The March 2011 Knight Survey, “Glass Half Full,” showed improvement but still revealed that just 49 of 90 agencies had followed specific tasks mandated by the White House to improve their FOIA performance.  As Eric Newton, senior adviser to the president at the John S. and James L. Knight Foundation, put it, “At this rate, the president’s first term in office will be over by the time federal agencies do what he asked them to do on his first day in office.”

In 2003, concerned with the tremendous age of its outstanding FOIAs, the National Security Archive created the “Ten Oldest FOIA Request” metric to illustrate the quantity of unfulfilled requests held by government agencies.  In 2006, the Department of Justice directed all agencies to include the date of their oldest pending request in their annual FOIA report.  The OPEN Government Act of 2007 codified the requirement that all agencies report their oldest open requests.  Now, under the Obama administration, the public can easily search the “Ten Oldest” statistic for all agencies at FOIA.gov.

But seeing just the dates of the oldest requests –not their subjects or who requested them– does not tell the whole story. To get a fuller illustration of the dire backlog, the National Security Archive requested copies of the actual ten oldest requests from the top 35 agencies or components.

Selected topics of the marooned FOIA requests include:

* A 1993 request to the National Archives for 1943 documents about the Sicilian Mafia and Sicilian Separatist movements.
* A 1995 request to the Air Force for documents relating to Pakistani surface to air missiles.
* A 1995 request to the Reagan Presidential Library for documents about “whether American POWs and MIAs were left in Southeast Asia.”
* A 1998 request to the George H.W. Bush Library for documents pertaining to the 21 December 1988 bombing of Pan Am flight 103.
* A 2000 request to the Kennedy Presidential Library for documents relating to “politics and the Internal Revenue Service.”
* A 2004 request to the Nixon Presidential Library for documents about the nuclear consultation between the United States and United Kingdom before the use of submarine-launched nuclear missiles.
* A 2004 request to the Federal Energy Regulatory Commission for documents about Enron’s energy sales to California.
* A 2005 “urgent request” to the Department of Transportation for whistleblower complaints to be used in an upcoming Occupational Safety and Health Administration hearing.
* A 2005 request to the Federal Aviation Administration for information about the tracking information of an airplane which crashed off the Massachusetts coast in December 2005.
* A 2006 request to the Consumer Protection Bureau for documents about the recalled “Polly Pocket Dolls.”
* A 2006 request to the Clinton Presidential Library for documents relating to the US role in the 1994 transfer of power in Haiti.
* A 2009 request to the Johnson Presidential Library for documents related to the 1965 Coup staged by Joseph Mobuto in the Congo.

None of the above requests should have taken years to fulfill; most were for easily identifiable materials that should have been relatively simple to locate.  Several relate to areas of U.S. foreign policy that might include sensitive materials, but the FOIA provides well-established ways to protect truly delicate information, so the extraordinary delays are unjustified.  Finally, several of these requests are for subjects like whistleblowers, consumer protection, and business – issues of obvious social interest, where the government’s duty to be answerable to its citizens would seem to be most apparent.

In addition to identifying the specific subjects of FOIA requests that the government has not responded to, the Knight Survey also serves as a FOIA competency test.  The requests we sent should have been easy to fulfill.  They went to the very FOIA offices that were responsible for inspecting the oldest requests and including them in their federally mandated Annual FOIA reports.  Troublingly, six months after the National Security Archive filed its requests, nine agencies – almost one-quarter of those polled – still have not responded.

Agencies which have not provided documents in response to our request:

* Army
* Central Intelligence Agency
* Department of Energy
* Department of Justice
* Department of State
* Department of Health and Human Services
* Drug Enforcement Administration
* Office of Personnel Management
* Transportation Security Administration

Because of this inexplicable failure to respond, the National Security Archive has taken the unusual step of filing “constructive denial” appeals – which interpret the agencies’ non-response as an effective denial and opens the door to future legal action.

Some agencies are not reporting accurate data to the Justice Department

Perhaps even more disquieting, the Knight Survey also shows frequent discrepancies between the oldest requests agencies have reported to the Department of Justice in the Annual FOIA report and the actual copies of requests provided to us.  Some agencies appear to have outstanding requests years older than what they reported to the Department of Justice.  In the most egregious case, the Defense Intelligence Agency responded to our FOIA request with a document four years older than what it reported to the Department of Justice.

At the heart of the problem – the “referral” process

Each agency examined by the Knight Survey has a backlog older than two years.  Most are substantially older.  Fourteen agencies –more than half– are losing ground on their backlog; their current oldest request is older than it was a year ago.

The key reason for these growing backlogs is the referral process.  Each of the oldest requests held by NARA –including the oldest request in the United States– has been referred to at least one other agency for release.  NARA stores the documents, but cannot declassify them.  It must refer them to any agency which claims partial ownership of, or “equity” in, the information in the records.  This daisy chain of referrals can often result in decades-long delay.  Re-review of the same document by multiple agencies is redundant, costly, and inefficient.  Every FOIA professional is well trained at protecting sensitive material regardless of which agency employs them.  Thus, these bureaucratic “declassification turf wars” do not further protect secrets; they merely impede the public’s access to information.

There is hope that the National Declassification Center, recently on its feet at NARA, will ameliorate this problem for documents housed at the Archives, but it will do nothing to fix the problem of equity and referrals for documents “possessed” by other federal agencies.

Forty five years ago, the birth of the Freedom of Information Act established the profoundly American commitment to open government and access to information.   Yet these decades-old FOIA requests show that US government agencies must do much more –including tackling the problem of equity and referrals– to make that commitment a reality.

45 FOIA News Stories in 2011

“New Prize in Cold War: Cuban Doctors,” The Wall Street Journal, January 15, 2011, Saturday, at A1.

Documents obtained through FOIA by The Wall Street Journal showed that the Cuban Medical Professional Parole immigration program allowed some Cuban doctors and health workers to enter the U.S. as refugees.

“Medicaid pays more, kids get less, audits show,” The Daily News Leader (Staunton, Virginia) January 23, 2011 Sunday, by David Ress/staff.

Documents obtained through a FOIA request identified $14.9 million of questionable payments in 70 insurance providers’ 2008 operations. The state attorney general’s office prosecuted three cases involving more than $4.6 million of fraud. Children were not properly assessed and treated by the qualified staff.

“A murder probe gone awry; Report rips handling of investigation into Riley Fox slaying Chicago Tribune January 25, 2011 Tuesday, at C 7, By Kristen Schorsch, Steve Schmadeke contributed reporting.

A report by a security firm, Andrews International, obtained through a FOIA request of Chicago Tribune showed that Will County Sheriff’s Police made mistakes in Riley Fox murder investigation including mismanagement and “highly questionable evidence. Detectives wrongly pinned Riley’s murder on her father, Kevin Fox. Riley’s parents, Kevin and Melissa Fox, eventually won $8 million in a lawsuit against the sheriff’s office.

“DPS ID system raises concerns” The Detroit News (Michigan) January 27, 2011 Thursday, at A8, by Jennifer Chambers.

The American Civil Liberties Union of Michigan filed a Freedom of Information Act request to the Detroit Public Schools regarding screening system in certain Detroit Public School. The new security system instantly scans driver’s licenses and state ID cards, then cross-checks the information with sex-offender registries in the United States and Canada. The DPS started using this program without parental or school board input.

“Nine judges in region get both salary, pension,” The Journal News (Westchester County, New York) January 30, 2011 Sunday at AWPR1, by Joseph Spector, Sean Lahmanand Jonathan Bandler.

Documents obtained by a FOIA request from the state Comptroller’s Office showed that nine New York judges received double compensation. They collected public pensions and salaries simultaneously. In response, state lawmakers suggested ways for eliminating these legislative loopholes.

“Report finds fraud in AmeriCorps,” Deseret Morning News (Salt Lake City) February 7, 2011 Monday, by Gregory Korte USA Today.

Documents obtained through a FOIA request showed that inspector general for the Corporation for National and Community Service had found several cases of fraud in AmeriCorps, the national service program. In some cases, the alleged fraud involved the misuse of more than $900,000.

“Baxter County sheriff’s deputy fired” The Baxter Bulletin (Mountain Home, Arkansas) February 8, 2011 Tuesday, by Josh Dooley.

According to documents obtained through FOIA, Baxter County sheriff’s deputy, Aaron Brown was fired after a series of incidents which resulted in disciplinary actions against him. Brown was placed on administrative leave a total of three times and was forced to take three weeks of remedial training.

“AP finds few states follow mental health gun law,” The Times of Trenton (New Jersey) February 18, 2011 Friday, at A07, by Greg Bluestein.

According to records obtained by the Associated Press through FOIA, fever that half of US states comply with a post-Virginia Tech shooting law that required them to share the names of mentally ill people with the national background-check system to prevent them from buying guns.

“Conclusions on Yucca lacking” Las Vegas Review-Journal (Nevada), February 18, 2011 Friday, at 8B, by Steve Tetreault.

Documents obtained through a FOIA request showed that The Nuclear Regulatory Commission scientists were evaluating whether tunnels carved in Yucca Mountain could safely hold radioactive particles from decaying nuclear fuel for up to a million years.

“Traffic-pix tix blitz –Stoplight cams nail more than 1M Drivers,” The New York Post February 27, 2011 Sunday, at 2, by Reuven Blau.

FOIA documents obtained by the New York Post showed that for the first time ever, New York City ticketed more than 1 million vehicles for running red lights and getting caught on camera. The city’s 150 secret cameras – 50 were installed in 2009 – nabbed an average of 2,741 drivers a day in 2010.

“FAA Moves to Limit Blockout System Hiding Private Jet Flights,” ProPublica, March 7, 2011, 12:12 p.m.

FOIA documents obtained by ProPublica, showed that The Federal Aviation administration was blocking private flights from real-time tracking data made available to the public. According to the ProPublica investigation, a number of individuals and companies requested the FAA not track their flights after receiving bad publicity. Among them was a televangelist facing a congressional inquiry, governors questioned about personal trips on state planes and Fortune 500 companies that had received government bailouts.

“24 at SEC dealt with over porn Documents show workers at seven regional offices, including Denver’s, were “counseled or disciplined,” The Denver Post, March 9, 2011, Wednesday, at A-01, by Andy Vuong.

According to documents obtained through a FOIA request, twenty-four U.S. Securities and Exchange Commission employees at seven offices, including Denver’s, were counseled or disciplined for accessing pornography sites on government computers.

“Overtime pay climbs. Top earners took in close to 8M in 2010,” Daily News (New York) March 12, 2011 Saturday, at 17, by Adam Lisberg.

Documents obtained by the Daily News through a FOIA request showed that the top 100 overtime earners in city government collectively raked in $7,961,400 in 2010, 6.8% more than in 2009. They were routinely working an extra two to four hours a day, every day – plus working full shifts on Saturdays or Sundays.

“Group warns EPA ready to increase radioactive release guidelines,” The Tennessean (Nashville, Tennessee) March 16, 2011 Wednesday, by, Anne Paine.

The EPA was preparing to increase the standards of permissible radioactive releases in drinking water, food and soil in March, 2011. Documents obtained through FOIA showed that those relaxed standards were opposed by public health professionals inside EPA.

“Wood Dale mayor ran up tab with city; for 2 years, leader repeatedly failed to pay for his health insurance coverage,” Chicago Tribune, March 20, 2011 Sunday, at C7, By Bill Ruthhart.

Records obtained through FOIA showed that from June 2008 until September 2010, Wood Dale Mayor Ken Johnson failed to pay for his health insurance, without informing the City Council. His debt grew as high as $9,283.

“Probe into ethics panel looks at director’s time sheets Newsday (New York) March 31, 2011 Thursday, at A06, by Sandra Peddie.

According to documents obtained through a FOIA request executive director of the Suffolk county Ethics Commission had not worked full time since 2005 and had an arbitration business.

“The Antisocial Network,” Popular Mechanics April 1, 2011, at 58 Vol. 188, by Caren Chesler.

According to documents obtained through FOIA by the Electronic Frontier Foundation, The Internal Revenue Service monitored social media. The Internal revenue Service’s 38-page training manual outlines “Internet tools and searches that will be useful in locating taxpayers and determining their online business activity.”

“TB in elephants called ‘a gray area’; animal-rights group says circus elephant is a danger,” The Baltimore Sun, April 7, 2011 Thursday, at 2A, by Laura Vozzella.

FOIA documents obtained by the People for the Ethical Treatment of Animals showed that  an elephant performing in Baltimore with the Ringling Bros. and Barnum & Bailey Circus  posed a health risk to the public because she has tested positive for tuberculosis.

“New trucking firm, same violations, Logbook problems uncovered during audit of JTL,” Milwaukee Journal Sentinel (Wisconsin) April 17, 2011 Sunday, at D1, by Rick Romell.

According to records obtained through a FOIA request, the trucking firm, Franklin’s JDC Logistics Inc. was fined for logbook violations totaled about $155,000 from 2004 into 2006.

“Hospitals’ overtime overboard; County’s nurses stretched thin, raising risk to patients,” Crain’s Chicago Business, April 18, 2011, at 1 Vol. 34.

FOIA documents obtained by Crain’s Chicago Business and the Better Government Association showed that nearly $40 million a year is routinely spent on overtime pay by Cook County hospitals and health clinics. 182 county health staffers worked more than 624 overtime hours in 2010.

“Special Report: Calhoun County teachers’ pay trails state average,” Battle Creek Enquirer (Michigan) April 18, 2011 Monday, by, Justin A. Hinkley.

According to documents obtained by The Battle Creek Enquirer, the average Calhoun County teacher and the average Calhoun County superintendent were paid below the state average in 2009-10 school year. The average Calhoun County teacher salary was $52,218 in the 2009-10, about 9 percent less than the $57,327 the National Education Association said was the state’s average salary.

“Opponents criticize Tomblin spending; Records show acting governor’s outlays for signage, travel, other items total $64,000,” Charleston Daily Mail (West Virginia) April 19, 2011, Tuesday, at P7A, by Rivarr, Daily Mail Capitol reporter.

According to documents provided by the governor’s office in response to a FOIA request, West Virginia has spent at least $64,000 paying stationery and signage costs as well as travel expenses for acting governor Earl Ray Tomblin, first lady Joanne Tomblin and their security detail.

“Pentagon clears general over profile in magazine,” The New York Times April 19, 2011 Tuesday, at A16, By Thom Shanker; Elisabeth Bumiller contributed reporting.

According to a document obtained by the New York Times through a FOIA request, an inquiry by the Defense Department inspector general into a Rolling Stone Magazine profile of General McChrystal has found no proof of wrongdoing by McChrystal, his military aides or his civilian advisers.

“City defends staff salaries; Citizen suggests cuts are in order,” Mukilteo Beacon (Washington) May 4, 2011, by Sara Bruestle.

Records obtained through a FOIA request showed that Mukilteo, city of about 20,000 had been spending $11 million on salaries and benefits. A majority of the city’s salaried employees and all of the management positions were at or above the maximum of their pay ranges. Six in management were getting paid above their defined ranges.

“Eight lawmakers signed a letter for Renco,” Sunlight Foundation, By Keenan Steiner, May 04 2011

According to documents obtained by the Sunlight Foundation through FOIA, eight members of Congress signed on to a letter asking the heads of the Treasury and State Departments to take measures to intervene on behalf of Renco Group in the middle of a controversial dispute with Peru. Renco Group is owned by billionaire mining magnate Ira Rennert, who has spent more than $300,000 lobbying Washington politicians.

“Lawyer’s career unravels in wake of broken pledges” Arkansas Democrat-Gazette (Little Rock) May 8, 2011 Sunday, at front section, by C.S Murphy.

FOIA documents obtained by Arkansas Democrat-Gazette showed that Former Little Rock attorney Elgin Clemons promised the Arts Center a $500,000 gift from a client, architectural company, Al Abbar. The Arts center faced a financial crisis in the spring of 2010 when the Alabbar donation didn’t materialize.

“Let’s quit fed program that ousts immigrants,” Daily News (New York) May 8, 2011 Sunday, at 34, by Albor Ruiz.

Records obtained through a FOIA request showed that nearly 79% of individuals deported nationally through the Secure Communities program from October 2008 through June 2010 had no criminal record or were arrested for minor offenses.

“Release the Iranian ‘hostages’; Obama’s sanctions against PJAK are unjustified gift to Tehran regime,” The Washington Times May 9, 2011 Monday, at B4, by Kenneth R. Timmerman.

A memorandum obtained by the lawyer of “Free Life Party of Iranian Kurdistan” (PJAK) in response to a FOIA request showed that the Treasury placed PJAK on its list of international terrorists only because the group was allegedly “controlled by the KGK” – another name for the Kurdistan Workers’ Party (PKK).

“Larcomb says evaluation was late, not signed,” The Marion Star (Marion, Ohio) May 10, 2011 Tuesday, by, Kurt Moore.

Documents obtained through a FOIA request showed that Pleasant Local Schools’ board evaluated its superintendent and put on indefinite paid leave. The documents indicated that the school board perceived the superintendent as “weak.”

“State’s raises for 17 follow frugality talk; Transit unit says duties changed” The Boston Globe May 13, 2011 Friday, at 1, By Noah Bierman.

FOIA documents obtained by the Boston Globe showed that two months after state Transportation Secretary Jeffrey B. Mullan said the economy was too weak to increase salaries for public sector executives he began handing out raises to 17 managers in his department.

“New Study Casts Light On SEC ‘Revolving Door’ Claims,” Dow Jones Business News, May 13, 2011 Friday, By Jessica Holzer.

According to FOIA documents obtained by Project on Government Oversight over the past five years, 219 former the Securities and Exchange Commission employees sought to represent clients on issues before the commission after leaving the agency. The former employees filed 789 notices with the agency on their intent to represent various clients.

“US State Department sued for pipeline lobbyist documents,” Reuters News, May 18, 2011 Wednesday, By Ayesha Rascoe.

A lawsuit was filed by green groups after the State Department denied a FOIA request. Green groups were requesting communications regarding a planned $7 billion TransCanada oil sands pipeline between Paul Elliott, who was national deputy director for Clinton’s 2008 presidential campaign, and the State Department. Groups were seeking the communications which could expose whether Elliott’s ties to Clinton had resulted in bias in the permitting process.

“Des Plaines police officer gets $125,000 in settlement,” Chicago Daily Herald May 18, 2011, Wednesday, C3 Edition, at 3, by Madhu Krishnamurthy

Documents obtained through FOIA showed that Des Plaines paid veteran police Sgt. Matthew Hicks $125,000 to leave the police force and drop all claims of wrongful discharge against the city.

“Oil spill in Greer creek more extensive than thought, DHEC reports,” The Greenville News (South Carolina) May 19, 2011 Thursday, by, Anna Lee Staff Writer.

Records obtained through a FOIA request showed that the spill into a tributary of Frohawk Creek was more extensive than cleanup officials had originally estimated. According to the state Department of Health and Environmental Control, 10,000 gallons spilled. The city engineer and an EPA coordinator first estimated that between 1,000 to 1,500 gallons had leaked.

“Police escorts not limited to dignitaries, records show,” Washington Post May 19, 2011 Thursday, at Metro, B06, by Eric Tucker.

Records obtained by the Associated Press through a FOIA request showed that Washington, D.C. police escorts mostly intended for top government officials and foreign dignitaries have been provided to celebrities, including Charlie Sheen.

“Nursing home abuse, neglect up 33 percent; Government report shows violence, sleeping on the job” Chicago Sun-Times May 21, 2011 Saturday, at 13, by Carla K. Johnson.

FOIA documents obtained by Associated Press showed that across Illinois in 2010, more than 130 cases of abuse and neglect were investigated and confirmed in group homes for adults, a 33 percent increase from 2006.

“What price, jobs? Illinois tax incentive packages growing larger,” Associated Press, May 21, 2011 Saturday, at 1 by David Mercer

Documents obtained through a FOIA request showed that Illinois’ government agreed in 2010 to give $272.7 million in tax breaks and other incentives to 67 companies that had received invitations from other states to move jobs elsewhere.

“Report: Securities and Exchange Commission broke procurement law,” Washington Post.com, May 27, 2011 Saturday, at A16

SEC Inspector General’s report released in response to a FOIA request by Reuters showed that the agency violated procurement law in 2008 when, without proper testing, it spent about $1 million buying computer equipment from Apple. The SEC violated federal regulations by awarding the contract without competitive bidding and by telling Apple its budget in order to tailor its offer precisely to the budgeted amount.

‘Statehouse beat; Resigned experts of panel have a lot to say,” Charleston Gazette (West Virginia) May 30, 2011, Monday, at P5A, by Phil Kabler.

FOIA documents obtained from the governor’s office showed that expert members of the West Virginia Sesquicentennial Commission found themselves exasperated that their efforts and vision for the anniversary were being undermined by the state officials on the panel.

“Sarah Palin’s e-mails show her going to bat for state-owned creamery,” Washington Post, June 11, 2011, by T.W. Farnam.

Emails of former Alaskan governor Sarah Palin obtained by FOIA show that she fought to use government funds to keep an Alaskan creamery open after it racked up $1.5 million in losses and was forced to close.  More than 13,000 emails were released.

“Student visa program: New rules, same problems,” Associated Press, June 20, 2011, by Holdbrook Mohr.

A FOIA request by the Associated Press shows that the Department of State did not begin tracking complaints about the exploitation of students in the United States on the J-1 visa program until 2010.  An AP investigation found abuse of hundreds of students with J-1 visas in more than a dozen states.

“A style guide for spooks,” Washington Post, June 23, 2011, by Lisa Rein.

Governmentattic.com used the FOIA to win the release of the National Security Agency’s style guide.  The266-page manual which listed the meaning of acronyms such as “lnu” (last name unknown), “nfi” (no further information), and “FROG” (Free Rocket Over Ground).

“FBI records show late Gov. Ned McWherter never entangled in corruption cases,” Associated Press, June 26, 2011, by Erik Schelzig.

The 217-page FBI file on the late Tennessee Governor Ned McWherter shows that “at no time was a subject, witness, or a target in the Rocky top investigation.”  Rocky top was an investigation into widespread abuse of gambling licenses in Tennessee which led to the arrest of several state politicians.  The report was released under FOIA.

“Report: Feds downplayed ICE case dismissals; Documents show agency had approval to dismiss some deportation cases,” Houston Chronicle June 27, 2011, by Susan Carroll.

A Freedom of Information Act request by the Houston chronicle shows that the Immigration and Customs Enforcement’s chief counsel in Houston prioritized deportations of illegal immigrants who were a danger to public safety or national security.

“FOIA docs expose DHS agency irradiating Americans cover-up,” Washington Examiner, 29 June 2011, by Deborah Dupre.

Documents obtained through FOIA by the Electronic Privacy Information Center (EPIC) show that Transportation Security Administration employees working enclose Proximity to radiation-firing devices may have higher risk of developing cancer strokes, and heart disease.

Washington, D.C., July 23rd, 2011 – The Al Qaeda leader Osama Bin Laden, killed in Pakistan by U.S. special operations forces, ranked as “one of the most significant financial sponsors of Islamic terrorist activities in the world” as early as 1996, according to declassified U.S. documents posted on the web today by the National Security Archive at George Washington University (www.nsarchive.org).

The Osama Bin Laden File includes the CIA’s 1996 biographic sketch [Transcription], the infamous President’s Daily Brief from 6 August 2001 warning “Bin Ladin Determined to Strike in US,” a State Department issue paper from 2005 reporting that “some Taliban leaders operate with relative impunity in some Pakistan cities,” the 400-page Sandia National Laboratories profile of Bin Laden focusing on the 1998 U.S. embassy bombings in Kenya and Tanzania, the 2006 State Department cable on the Taliban’s regrouping in Pakistan’s tribal areas making them “a sanctuary beyond the reach of either Government,” the demands made on Pakistan right after 9/11 by Deputy Secretary of State Richard Armitage, and the only known conversation between the U.S. government and the Taliban leader Mullah Omar.

*             *             *

One of the earlier publicly available documentary mentions of Bin Laden comes from a 1996 CIA bio sketch entitled “Usama Bin Laden: Islamic Extremist Financer” [Transcription]. It describes Bin Laden, “who joined the Afghan resistance movement in 1979,” as “one of the most significant financial sponsors of Islamic extremist activities in the world.” According to The New York Times, during the Soviet occupation of Afghanistan, the CIA actually helped Bin Laden – who supplied construction equipment from his family’s company in Saudi Arabia – to construct the Tora Bora complex as a base to fight the Soviets.  According to Bin Laden, “The [Mujahidin’s] weapons were supplied by the Americans, the money by the Saudis.”

Almost a decade later, Bin Laden would make good use of his earlier investment. A 1997 State Department cable reported that he had likely retreated into hiding at Tora Bora, stating “bin Ladin had lived in caves south of Jalalabad in Tora Bora and the Taliban had become suspicious.” In December 2001, US troops engaged in a fierce firefight at Tora Bora, hoping to smoke out the Al Qaeda leader. The Taliban and Al Qaeda fighters were overrun but Bin Laden was not among the killed or captured.

The earlier CIA bio indicates that after the 1989 victory over the Soviets, Bin Laden, while living in Saudi Arabia and Sudan, created “a network of al-Qaida recruitment centers and guesthouses in Egypt, Saudi Arabia, and Pakistan and has enlisted and sheltered thousands of Arab recruits.” The document also accused Bin Laden of “providing financial support” for the 1992 bombings against US servicemen in Somalia, “at least three terrorist training camps in Sudan” and one in Afghanistan, and the 1993 World Trade Center bombing.

In mid-1996, Bin Laden moved from Sudan to Afghanistan where he lived and operated under the umbrella of the Taliban. From there, he plotted the August 1998 bombings of two American embassies, in Kenya and Tanzania, which killed hundreds and wounded thousands more. In response, President Bill Clinton authorized the first U.S. official attempt to kill him. The problem was how to find him.  While CIA and U.S. military personnel tried to come up with actionable intelligence on his whereabouts, American diplomats in Afghanistan attempted to persuade Bin Laden’s Taliban hosts to give him up.  A State Department cable provided an unusual window into the bizarre negotiations, including recording the suggestion by a Taliban intermediary that the U.S. “arrange for bin Laden to be assassinated” because the Taliban could do nothing to prevent it.

In 1999, Sandia National Laboratories compiled a 400-page profile of Bin Laden – far more comprehensive than the CIA’s brief 1996 sketch, and no doubt reflecting his stratospheric rise in importance to the United States. The report found that the African embassy attacks did not take the U.S. by surprise, given its existing counterterrorism intelligence capabilities.  It added that the retaliatory cruise missile strikes orderd by Clinton – which unfortunately destroyed a Sudanese pharmaceutical plant and killed several suspected terrorists training in Afghanistan instead of their intended targets – “did little to help solve the problem posed by bin Laden and may ultimately prove to have done more harm than good.” The Sandia analysts concluded – chillingly – that the bombings showed “The ‘war’ on terrorism will never be ‘won.’”

On 25 January 2001 the National Security Council’s senior counterterroism adviser, Richard A. Clarke, sent a now-famous memo to incoming National Security Advisor Condoleezza Rice which warned, “al Qida is not some narrow, little terrorist issue that needs to be included in broader regional policy.” The memo referenced the Al Qaeda suicide attack on USS Cole in the Yemeni port of Aden, which killed 17 sailors and injured 39 others.  Clarke recommended that the United States “respond at a time, place, and manner of our own choosing,” pleading, “we urgently need … a Principals level review on the al Qida network [emphasis in original].”

Less than nine months later, nineteen Al Qaeda operative hijacked four planes and struck the World Trade Center and Pentagon.
Sandia National Laboratories, “Osama bin Laden: A Case Study,” December 6, 1999

Between 1996 and the summer of 2001, the United States pressed the Taliban more than 30 times to expel Bin Laden from Afghanistan, according to a July 2001 State Department Report. Two days after the 1998 Cruise missile attack on Bin Laden’s camp, Mullah Omar initiated a phone call to Washington – the U.S. government’s only known direct contact with the Taliban leader – claiming that he did not believe “bin Laden had engaged in or planned any terrorist acts while on Afghan soil,” and that “getting rid” of him “would not end the problems posed to the US by the Islamic world.”

The following month, the President’s Daily Brief included one of the most famous documents that would come out on the Al Qaeda leader – the 6 August 2001 memo entitled “Bin Ladin Determined to Strike in US.” The document was marked “For the President Only” – perhaps a sign of a missed opportunity for intelligence sharing – and stated that FBI information “indicate[d] patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks, including recent surveillance of federal buildings in New York.”  In testimony to the 9-11 Commission, Rice insisted that the PDB did not amount to a real warning.  “[It] said nothing about an attack on America,” she testified. “It talked about intentions, about somebody who hated America – well, we knew that.”

Once 9/11 happened, the administration’s attitude lurched about abruptly.  On 13 September 2001, two days after the attacks on New York and Washington, Deputy Secretary of State Richard Armitage handed Pakistani Intelligence (ISI) Chief Mahmoud a list of seven terse demands, including stopping al-Qaeda at the border, proving blanket landing rights to conduct operations, providing intelligence, and helping the US to “Destroy Usama bin Laden.”

But the stepped-up pressure failed to produce all the desired results, and Pakistan soon became protected territory for the Al Qaeda and the Taliban. Immediately after September 11, according to an unnamed Pakistani security official, “the tribes were overawed by US firepower.” But by the time this quote was made to a senior State Department in Islamabad (reported in an embassy cable on 13 November 2002), “that window had closed.” The Federally Administered Tribal Areas were once again “no go areas.”

Three years later, in late 2005, the situation had not changed.  Despite Pakistan’s formal denials that it was a safe haven for anti-American forces, a State Department Issue Paper for the Vice President confirmed that indeed “some Taliban leaders operate with relative impunity in some Pakistani cities, and may still enjoy support from the lower echelons of Pakistan’s ISI.”

It was because Bin Laden enjoyed this protection in “the sanctuary beyond the reach of [the Afghan or Pakistani governments]” that President Obama on May 1, 2011, ordered a team of Navy SEALs to secretly and unilaterally attack the Al Qaeda leader at his Abbottabad compound. The US government finally succeeded in killing the “terrorist who was responsible for the murder of thousands of innocent men, women, and children” – without the knowledge of its Afghan or Pakistani allies.

Washington, D.C., July 23, 2011 – In 2005, U.S. intelligence agencies monitoring Chinese research into high-power microwave (HPM) and electromagnetic pulse (EMP) radiation speculated that Beijing might be trying to develop a capability to incapacitate Taiwan electronically without triggering a U.S. nuclear retaliation, according to documents published in a major new National Security Archive collection.
Image of the Fukushima Nucelar Power Station from a 1974 Defense Intelligence Agency report (Document 7)

In recent years, China’s development of an assortment of conventional and nuclear weapons has regularly attracted the interest and concern of U.S. policy-makers, intelligence officials, and China watchers.  So has Beijing’s interest in less conventional means of conflict, including cyber-warfare – with Chinese hackers recently linked to or suspected in a number of incidents, notably breaking into highly sensitive U.S. government computer systems (see CBSNews.com, for example).

But cyber-warfare is only one of a number of unconventional approaches to warfare that China has investigated.  A declassified 2005 report from the U.S. National Ground Intelligence Center describing Chinese experiments using HPM and EMP on animals concluded that the real objective was to determine the effects of that radiation on humans.  Analysts did not believe the experiments, which produced “high mortality rates” among the animal subjects, were aimed at developing “antipersonnel” weapons, but they did describe a hypothetical “Taiwan Scenario” in which a lower altitude EMP burst would damage electronics on the island without causing enough human casualties, “either Taiwan[ese] or U.S. military,” to trigger “a U.S. nuclear response.”

Other recently declassified materials describe similar military concerns. A U.S. defense intelligence document from 2001, for example, details Chinese plans for developing radiofrequency weapons (although it stops short of speculating on their possible purpose).  Still others reflect on issues of current interest, for example the risks of constructing nuclear power plants – like the Fukushima facility that exploded after the recent tsunami – at questionable sites in Japan.

These and 2,300 other records are part of a new National Security Archive publication, U.S. Intelligence and China: Collection, Analysis and Covert Action, the latest addition to the “Digital National Security Archive” series published through ProQuest Information and Learning.  A sampling of materials in this important new collection is posted below.

*             *             *             *

The scope of the U.S. Intelligence and China set covers both the People’s Republic and Taiwan, from 1945-2010.  As the materials demonstrate, even before the formation of the PRC in October 1949, the United States targeted China for intelligence collection, hoping to uncover secrets about everything from Communist military capabilities to domestic policies.  The resulting intelligence was not only critical in helping to shape U.S. policy toward the emerging world power, it was also used to guide sensitive covert action operations by the U.S. and Taiwan in the 1950s and 1960s aimed at weakening the Communist regime’s hold on the mainland.

Even the Nationalist regime on Taiwan – a U.S. ally and a collaborator against China – was a target of U.S. intelligence collection efforts.  Against both targets, the United States used a variety of methods, including human sources, signals intelligence, overhead imagery, and other lesser-known techniques.

For years, the results of most of these multifaceted collection efforts against both Mao’s China and Chiang Kai-Shek’s Nationalist forces were kept highly classified.  Now, thanks to the work of two widely recognized intelligence experts – Jeffrey Richelson and Matthew Aid –these important historical records are now available to the public, providing new insights into all aspects of the United States’ intelligence operations against its rival, the People’s Republic, and its ally, Taiwan.

The collection includes new materials from a full array of intelligence entities inside the U.S. government that shed light not only on U.S. intelligence activities but on substantive topics relating to the PRC and Taiwan as well:

1. Foreign policy
2. Military capabilities and intentions
3. Domestic/regime politics and internal conditions
4. Science, technology, and industry
5. Economic conditions

More specifically, the set includes:

1. Estimates and studies of the PRC’s foreign and defense policies, strategic power, scientific  and industrial capabilities, and domestic affairs
2. Biographical information on Chinese military and civilian leaders
3. Studies of the possibility of a PRC-Taiwan clash (whether over islands in the Taiwan Straits or Taiwan itself)
4. Materials discussing Taiwan’s production of conventional arms, and its occasional quest to develop nuclear weapons

Documents

The National Security Archive’s China Intelligence document set contains a wide variety of materials on diverse topics and originating from all corners of the U.S. intelligence community.  The following samples reflect some of this variety:

1)  “Disruption to Shipping in the China Trade Major Problem to Peiping,” in CIA, Office of Current Intelligence, Current Intelligence Review, August 19, 1954, Top Secret Froth, CREST Collection, Document No. CIA-RDP61S00527A000200010070-8, NA, CP. Pages: 2

Early in 1953, President Eisenhower lifted the blockade of Communist China which was subsequently reinitiated by the naval forces of Nationalist China. In the early days of the First Taiwan Straits Crisis the Central Intelligence Agency produced this report that highlighted the economic and political impact of the blockade on Communist China. The report claims increased economic strife and political isolation as a result of limited alternatives (floods washing-out north-south railroads), embarrassing set-backs (seizure of the Polish tanker Tuapse), and the curtailed ability of Eastern European allies to lend assistance.

2)  Memorandum, Smith to Director, Effect on the Chinese Nationalists of a US Refusal to Permit an Attack on the Chinese Mainland, June 21, 1962, Secret, CREST Collection, Document No. CIA-RDP79R00904A000800030018-4, NA, CP. Pages: 3

Following the Taiwan Straits crises of the 1950s, avoiding a war between the two Chinas by ensuring a stable status quo became a U.S. priority. Knowing the desire of Nationalist China to reclaim the mainland, the Central Intelligence Agency analyzed the likely response to U.S. attempts to secure the current stability.  This memorandum highlights probable responses which range from a chilling effect on U.S.-Taiwan relations, a unilateral Nationalist Chinese invasion of mainland China, and a turnover in the government in Taiwan.

3)  Airgram, CA-7647, Department of State to Hong Kong, Health and Behavior of Mao Tse-tung, February 3, 1964, Secret, RG-59, Subject-Numeric Files 1964-1966, POL 15-1 CHICOM, NA, CP. Pages: 1

The Department of State, in an effort to glean human intelligence about the Chinese leadership, forwarded this list of questions to be posed to visitors to China. Specifically, those who came in contact with Mao Tse-tung were to be asked about the specifics of their interactions and any “peculiar physical characteristics” displayed by Mao.

4)  Joint Atomic Intelligence Committee, Memorandum for the Record, Reporting of the Chinese Nuclear Test on 16 October 1964, October 16, 1964, Secret, CIA FOIA. Pages: 1

On October 16, 1964, the People’s Republic of China tested its first nuclear weapon at the Lop Nur site in western China. Communist China became the fifth nation to test a nuclear weapon. Though heavily redacted, this Joint Atomic Intelligence Committee memorandum reports the test and notes the preparation of a public statement for National Security Advisor McGeorge Bundy.

5)  CIA, Intelligence Information Cable, Presence of Chinese Communist Troops in North Vietnam in October 1965, February 18, 1967, classification markings not declassified, CIA FOIA. Pages: 5

Though Communist China was not a major combatant in the U.S. war in Vietnam, the PRC did send anti-aircraft and engineering units into North Vietnam in the 1960s to defend and repair transportation infrastructure. The U.S. intelligence community showed great interest in Chinese involvement and this detailed intelligence cable reveals the activities of Chinese anti-aircraft units stationed in North Vietnam. Strangely, the anti-aircraft units were furnished with small arms, but none of the heavy weapons required to deter airstrikes.

6)  Bureau of Intelligence and Research, Intelligence Note, Denney to Secretary, USSR/China: Soviet and Chinese Forces Clash on the Ussuri River, March 4, 1969, Secret, RG-59, Subject-Numeric Files 1967-1969, Box 1969, POL 32-1 Chicom-USSR, NA, CP. Pages: 6

The ideological Sino-Soviet divide widened in the 1960s and led to a number of border skirmishes, one of which is detailed in this Department of State Bureau of Intelligence and Research intelligence note. In addition to discussing the events that transpired on March 2, 1969, this document discusses some of the broader issues at play in the Sino-Soviet dispute at the time. Manchuria was already heavily militarized by China at the time and the Soviet Union had begun a large troop build-up years earlier. Chinese grievances at the terms of the border treaty and extensive propaganda campaigns against the Soviet Union are discussed alongside an analysis that neither side was interested in provoking a war. A map of the disputed area is also included which highlights the location of the skirmish.

7)  Defense Intelligence Agency, Directorate for Scientific and Technical Agency, Defense Intelligence Report, ST-CS-02-398-74, Nuclear Energy Programs: Japan and Taiwan, September 3, 1974, Secret, Pages: 47

Attempting to curb the spread of nuclear weapons and related technology, the U.S. conducted espionage on its allies in Japan and Taiwan. Though heavily redacted in parts, this document reveals an interesting discussion about the expulsion of the Taiwanese representative from the International Atomic Energy Agency. The report admits that the Taiwanese government could easily bar inspections at its nuclear sites, but allows IAEA teams continued access to facilities. Another interesting portion of the report discusses the potential problems with the siting of nuclear energy reactors in Japan (pages 22, 26-27). In fact, the Fukushima nuclear power complex is pictured in the section dealing with the related issues faced by the Japanese government at the time.

8)  Defense Intelligence Agency, Biographic Sketch, Deng Xiaoping, February 1979, NOFORN, DIA FOIA, Pages: 5

Intelligence on the Chinese leadership often helped guide and inform diplomatic interactions and even broader U.S. strategy towards Communist China. This biographic sketch of Vice Chairman Deng Xiaoping produced by the Defense Intelligence Agency shows the breadth of information collected. Included in the sketch are Deng’s politics, educational background, military service, family, and personality (“energetic,” “abrasive, arrogant”).

9)  Cable, 230716Z OCT 79, AIT TAIPEI to AIT WASHDC, Post-Normalization Taiwan, October 23, 1979, classification markings redacted, Department of State FOIA. Pages: 15

The normalization of relations between the U.S. and People’s Republic of China presented a new challenge to Taiwan and its relationship with the U.S. This cable from the American Institute in Taiwan highlights the impact of normalization on the political power structure in Taiwan. President Chiang Ching-kuo is the locus of the discussion – his governing style, political opposition, and relationship with key institutions: the security apparatus, the armed forces, the party, the technocratic bureaucracy, and the private business community.

10)  National Ground Intelligence Center, Assessment of Chinese Radiofrequency Weapon Capabilities, April 2001, Secret, Pages: 18

This report from the National Ground Intelligence Center is a more technical document as a great deal of time is spent discussing the technology behind radiofrequency weapons. The key determination of this report is that the Chinese have not deployed radiofrequency weapons; however, significant research and development is being conducted on high-power radiofrequency technology that could quickly evolve into a weapons system. In particular, the Chinese are reported to be working on radiofrequency technology designed to disable computer systems and disarm mines.  Additionally, the Chinese military has shown interest in radiofrequency weapons for use in anti-aircraft and anti-satellite operations.

11)  National Ground Intelligence Center, China: Medical Research on Bio-Effects of Electromagnetic Pulse and High-Power Microwave Radiation, August 17, 2005, Secret, Pages: 8

In January 2004, Chinese medical researchers presented research into the biological effects of high-intensity radiation at a public conference in Thailand. Their briefings, despite the basis on animal experiments, revealed great interest in the potential ramifications of human exposure to Electromagnetic Pulse and High-Power Microwave radiation. The report goes on to speculate as to what the implication of this research is on the trajectory and progress of Chinese efforts into developing radiation weapons. Included in the discussion are electromagnetic pulse weapons derived from nuclear and non-nuclear explosions and carbon/graphite-fiber bombs. The speculation largely revolves around the potential impact of such weapons systems in a “Taiwan Scenario” and potential deployment strategies that would minimize the risk of U.S. involvement or prevent nuclear retaliation if a conflict with the U.S. did arise.

12)  Report, Department of Defense, Office of the Secretary of Defense, Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China, 2010, Unclassified, Pages: 83

In 2000, as part of the National Defense Authorization Act, Congress required the Department of Defense to write an annual report assessing the military capabilities, doctrine, strategies and operational concepts of the People’s Republic of China. The 2010 edition of the report presented here discusses military modernization, the Taiwan situation, and bilateral contacts with the U.S. military. A brief section on page 16 details Chinese cyberwarfare developments including reports of computer systems (including U.S. government networks) being targeted by cyberattacks seeking to exfiltrate information of strategic or military value. The brevity and absence of detail could indicate a lack of concrete data: “unclear if these intrusions were conducted by […] the PRC government” – or a topic of heightened, thus closely guarded, concern for the Department of Defense: “developing capabilities for cyberwarfare is consistent with authoritative PLA [People’s Liberation Army] military writings.”

Ministry of Defence fails at redacting nuclear sub secrets

The UK’s Ministry of Defence is reported to have failed to correctly redact PDF files it released under the Freedom of Information Act. Redaction is the process of removing classified information from documents; on paper documents, this is done by using a black marker to cross out the text. The report in question, “SUCCESSOR SSBN – SAFETY REGULATORS ADVICE ON THE SELECTION OF THE PROPULSION POLANT IN SUPPORT OF THE FUTURE DETERRENT REVIEW NOTE” was published as a PDF file on the parliamentary site, the Daily Star revealed the MoD had originally “redacted” the document by changing the background colour of the text to black.

This meant that the document could be read by simply selecting the “redacted” areas and copy-and-pasting the still present text into a text editor. According to Cryptome, the text was also revealed by Google as it automatically scanned the document and converted it into HTML. In this case the document contained information about emergency procedures on UK nuclear submarines and the equivalent procedures on US submarines.

Graham Cluley of Sophos was quoted as asking “If this document is like this, who knows what else is?” The answer came on Sunday when a report in the Daily Telegraph revealed that other documents from the MoD, Department for Trade and Investment, Department of Health and the Department of Communities and Local Government suffered from incorrectly or insufficiently applied redaction. The MoD has started a review of currently published documents to fix the bad redactions. A guide on properly redacting PDF documents is available from Adobe.

see pdf here

DEP2011-0648

Das britischen Verteidigungsministerium hat versehentlich geheime Informationen über ihre nuklear angetriebene U-Bootflotte ins Netz gestellt, wie das Boulevardblatt Daily Star berichtet. Die Informationen befanden sich in einem PDF-Dokument, das die Behörde selbst auf ihrer Webseite veröffentlicht hat – allerdings in dem Glauben, die vertraulichen Passagen erfolgreich geschwärzt zu haben.

Peinlich: Denn statt die Textstellen aus dem Dokument zu entfernen, hat das Ministerium lediglich die Hintergrundfarbe an den betroffenen Stellen auf Schwarz geändert. Wer wissen wollte, welche Informationen nach Meinung der Behörde zu brisant für die Öffentlichkeit sind, musste die vermeintlich geschwärzten Passagen – laut Daily Star befinden sich ganze Seiten darunter – lediglich mit dem Cursor markieren und in die Zwischenablage kopieren.

An der Geheimhaltung der Informationen hat das Ministerium ein berechtigtes Interesse. So soll sich in dem Dokument eine detaillierte Expertenmeinung darüber befunden haben, welche Umstände eine Kernschmelze an Bord eines britischen Atom-U-Boots auslösen können. Auch Informationen über U-Boote der USA sollen in dem Dokument zu finden gewesen sein. Das Verteidigungsministerium hat sich bei dem Magazin für seine Entdeckung bedankt und das Dokument gegen eine korrekt geschwärzte Fassung ausgetauscht. Wie man Informationen zuverlässig schwärzt, verrät Adobe in seinem Blog.

C O N F I D E N T I A L SECTION 01 OF 02 DUBLIN 001196 
 
SIPDIS 
 
E.O. 12958: DECL: 10/27/2014 
TAGS: PINR PREL PTER
SUBJECT: ORGANIZED CRIME IN IRELAND (C-CN5-00417) 
 
REF: SECSTATE 146246 
 
Classified By: POL/ECON CHIEF MARY DALY, FOR REASONS 1.4 (B), (D) 
 
¶1. (C)  Summary.  It is unlikely that there is large scale 
involvement of non-nationals in organized crime activities in 
the Republic of Ireland.  According to the EU's 2004 
Organized Crime Report, Ireland is unique in that its 
organized criminal elements are comprised almost entirely of 
Irish nationals, most of whom are known to each other.  Any 
involvement they may have with foreign criminals is suspected 
of taking place outside of the country.  End summary. 
 
¶2. (C)  The following answers are keyed to reftel questions: 
 
¶A.  Are there organized crime groups present in the host 
country that originated in the following countries? 
 
Russia, Ukraine, Italy, The Balkans (Albania, Serbia, 
Bosnia), Japan, Greater China (China, Hong Kong, Macau, or 
Taiwan), or West Africa?  What is the extent or nature of 
their presence? 
 
--According to Criminal Assets Bureau Detective Inspector 
Denis O'Leary, if there is any organized criminal activity in 
Ireland of Ukrainian, Russian, Chinese, and Nigerian 
nationals, it would likely take place in terms of involvement 
in their respective ethnic migrant communities.  Irish 
nationals are the primary suspects in organized crime in 
Ireland.  According to the 2004 European Union Organized 
Crime Report (EUOCR), non-Irish involvement occurs mainly 
outside of Ireland, principally with contacts of Irish 
criminals living abroad. 
 
¶B.  What types of criminal activity are these groups engaged 
in?  What is the economic impact of the criminal activity? 
 
--There is little evidence that these groups operate in 
Ireland.  However, it is suspected that domestic groups may 
network with foreign organizations abroad to source narcotics 
for Ireland. 
 
--According to the EUOCR, domestic organized crime groups 
engage primarily in drug trafficking, and to a lesser extent, 
cigarettes.  The most common types of drugs smuggled into 
Ireland are cocaine, heroin, and cannabis.  The main suspects 
in the smuggling of cannabis and cocaine are Irish nationals 
residing in Spain. Likewise, Irish nationals residing in the 
UK are suspected of organizing the heroin trade into the 
Republic.  Ecstasy, another drug on the rise, is sourced 
mainly through Irish criminals residing in Holland. 
 
--According to O'Leary and Gerardine Rowley of Ruhama (an NGO 
involved in the rehabilitation of prostitutes and victims of 
trafficking) there is anecdotal evidence that the 
above-mentioned foreign groups operate in Ireland.  These 
groups are suspected of having low-scale involvement in human 
trafficking, but there has yet to be a successful linkage to 
these groups in such cases. 
 
¶C.  What front companies do the groups use?  What 
relationship, if any, is there between the criminal groups 
listed above and crime groups indigenous to the host country? 
Are there indications that the groups listed above cooperate 
with each other or other international criminals? 
 
The EU Organized Crime Report suggests that Ireland is unique 
among European countries, in that organized crime elements in 
Ireland are Irish, know each other and cooperate in efforts, 
therefore creating a monopoly. 
 
¶D.  Are there indications of links or connections between 
these groups and terrorist organizations in the host country? 
 
There are no indications that these groups play a prominent 
role in Ireland.  The IRA, the Continuity IRA (CIRA), and the 
Real IRA (RIRA) are terrorist groups.  However, the IRA 
announced July 28, 2005 that it would lay down its arms.  On 
September 26, the Independent International Commission on 
Decommissioning confirmed the IRA had put its arsenal of 
weapons, explosives and ammunition beyond use.  Each of these 
groups is suspected of being heavily involved in organized 
crime.  Any connection to the above-mentioned foreign groups 
is tenuous and would suggest associations outside of Ireland. 
 
 
¶E.  Is there evidence of corrupt relationships between these 
groups and host country businessmen or government officials? 
What is the nature of these relationships? If possible, 
please provide examples of these crime groups coercing 
business or government officials. 
 
There is no evidence of corrupt relationships between the 
foreign organized crime groups mentioned in para A and Irish 
businessmen or officials. 
KENNY

VZCZCXRO3307
RR RUEHIK
DE RUEHDL #0060/01 0201354
ZNR UUUUU ZZH
R 201354Z JAN 06
FM AMEMBASSY DUBLIN
TO RUEHC/SECSTATE WASHDC 6379
INFO RUCNMEM/EU MEMBER STATES
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUCPCIM/CIMS NTDB WASHDC
UNCLAS SECTION 01 OF 14 DUBLIN 000060 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/IFD/OIA 
 
E.O. 12958: N/A 
TAGS: EINV EFIN USTR ECON KTDB OPIC EI
SUBJECT: INVESTMENT CLIMATE STATEMENT 2006 - IRELAND 
 
REF: 05 STATE 202943 
 
DUBLIN 00000060  001.2 OF 014 
 
 
The following is keyed to reftel. 
 
A1. OPENNESS TO FOREIGN INVESTMENT 
---------------------------------- 
 
IRISH GOVERNMENT'S ATTITUDE TOWARDS FOREIGN INVESTMENT 
 
¶1.   Over the past twenty years, the Irish Government has 
actively promoted foreign direct investment (FDI), a strategy 
that has underpinned unprecedented economic growth during 
this "Celtic Tiger" period.  FDI flows into Ireland increased 
from an annual average of USD 140 million in the mid-1980s to 
USD 2.7 billion per year in the second half of the 1990s, 
yielding a total FDI stock of USD 213 billion by 2004. 
Traditionally, the principal goal of investment promotion has 
been employment creation, especially in technology-intensive 
and high-skill industries.  In recent years, the Irish 
Government has also supported efforts by foreign-invested 
companies to sustain their international competitiveness 
through R&D enhancements and the marketing/sales of 
higher-value goods and services. 
 
¶2.  The Irish Government's actions have had considerable 
success in attracting U.S. foreign investment.  According to 
the U.S. Department of Commerce, U.S. investment flow into 
Ireland in 2004 was USD 10.4 billion, roughly one-tenth the 
U.S. total for the EU.  Ireland received USD 3.4 billion in 
U.S. manufacturing investment flow in 2004 and was the third 
most attractive market in the world for this category of U.S. 
investment behind the United Kingdom (USD 13.2 billion) and 
Canada (USD 5.5 billion).  The stock of U.S. investment in 
Ireland in 2004 was valued at USD 73 billion, roughly five 
times the amount of U.S. investment stock in China (USD 15.4 
billion).  There are roughly 620 U.S. firms in Ireland, 
directly employing over 90,000 workers and supporting work 
for approximately 250,000, an eighth of the total labor 
force.  U.S. firms operate primarily in the following 
sectors: chemicals; bio-pharmaceuticals and healthcare; 
computer hardware and software; electronics; and, financial 
services.  In 2005, Ireland also emerged as a magnet for U.S. 
internet/digital media investment, with industry leaders 
Yahoo, Google, and Amazon making Dublin the hub of their 
respective European operations. 
 
¶3.  The American Chamber of Commerce reports that U.S. 
companies are attracted to Ireland as an export platform to 
the EU.  In 2004, Irish-based U.S. firms exported roughly USD 
55 billion worth of goods and services, mostly destined for 
the EU market.  Other reasons for Ireland's attractiveness as 
an FDI destination include: a 12.5 percent rate of corporate 
tax; the quality and flexibility of the English-speaking work 
force; cooperative labor relations; political stability; 
pro-business government policies; a transparent judicial 
system; and, the pulling power of existing companies 
operating successfully in Ireland (a "bandwagon" effect). 
Factors that negatively affect Ireland's ability to attract 
investment include: increasing costs of skilled and unskilled 
labor (especially when compared to low-cost countries such as 
China and India), inadequate infrastructure (particularly in 
the transportation, internet/broadband, and energy sectors), 
and absolute price levels that are ranked the highest in 
Europe. 
 
¶4.  Four state organizations promote inward investment into 
Ireland by foreign companies: 
 
-   The Industrial Development Authority of Ireland (IDA 
Ireland) has overall responsibility for promoting and 
facilitating foreign direct investment in all areas of the 
country, except the Shannon Free Zone.  IDA Ireland is also 
responsible for attracting foreign companies to   Dublin's 
International Financial Services Center (IFSC).  IDA Ireland 
maintains offices in New York, Boston, Chicago, San Jose, and 
Atlanta, as well as in Europe and Asia; 
 
-   Enterprise Ireland promotes joint ventures and strategic 
alliances between indigenous and foreign companies; 
 
-   Shannon Free Airport Development Co. (SFADCO) handles 
investment in the Shannon Free Zone and is generally 
responsible for economic development in the Shannon region. 
The Irish Government is in the process of folding SFADCO's 
functions into IDA Ireland, which will require legislative 
action; 
 
-   Udaras na Gaeltachta has responsibility for economic 
 
DUBLIN 00000060  002.2 OF 014 
 
 
development in those areas of Ireland where Irish (Gaelic) is 
the predominant language, and works with IDA Ireland to 
promote overseas investment in these regions. 
 
¶5.  Major Laws/Rules/Taxation Policy 
 
Ireland's judicial system is transparent and upholds the 
sanctity of contracts as well as laws affecting foreign 
investment.  These laws include: 
 
-  The Industrial Development Act of 1993, which outlines the 
functions of IDA Ireland; 
 
-  The Mergers, Takeovers and Monopolies Control Act of 1978, 
which sets out rules governing mergers and takeovers by 
foreign and domestic companies; 
 
- The Competition (Amendment) Act of 1996, which amends and 
extends the Competition Act of 1991 and the Mergers and 
Takeovers (Control) Acts of 1978 and 1987, and sets out the 
rules governing competitive behavior; 
 
-  The Companies Act of 1963, which contains the basic 
requirements for incorporation in Ireland (amended in 1990); 
and, 
 
-  The 2004 Finance Act, which introduced tax incentives to 
encourage firms to set up headquarters in Ireland and to 
conduct R&D. 
 
In addition, there are numerous laws and regulations 
pertaining to employment, social security, environmental 
protection and taxation, with many of these determined at the 
EU level. 
 
¶6.  One of Ireland's most attractive features as an FDI 
destination is the low corporate tax rate.  Since January 1, 
2003, the corporate tax rate for both foreign and domestic 
firms has been 12.5 percent.  Existing foreign firms will 
retain their entitlement to the "old" 10 percent rate until 
2010 in the case of manufacturing and certain internationally 
traded services.  Ireland's corporate tax rate is among the 
lowest in the EU, and the Irish Government continues to 
oppose proposals to harmonize taxes at a single EU rate.  In 
2004, U.S. firms in Ireland paid euro 2.7 billion in tax to 
the Irish Government. 
 
¶7.  All firms incorporated in Ireland are treated on an equal 
basis.  With only a few exceptions, there are no constraints 
preventing foreign individuals or entities from ownership or 
participation in private firms/corporations.  The most 
significant of these exceptions is that, as with other EU 
countries, Irish airlines must be at least 50 percent-owned 
by EU residents in order to have full access to the single 
European aviation market.  There are also requirements 
related to the purchase of agricultural lands (see below). 
 
¶8.  While Ireland does not have a formal privatization 
program, there is likely to be at least partial privatization 
of some state-owned companies over the coming years.  In 
2005, for example, the Government announced its intention to 
privatize Aer Lingus, the state-owned national airline. 
There are no barriers to participation by foreign 
institutions in the sale of Irish state-owned companies. 
Residents of Ireland, however, may be given priority in share 
allocations to retail investors, as was the case with the 
state-owned telecommunications company, Eircom, privatized in 
¶1998. 
 
¶9.  Citizens of countries other than Ireland and other EU 
member states can acquire land for private residential 
purposes and for industrial purposes.  Under Section 45 of 
the Land Act, 1965, all non-EU nationals must obtain the 
written consent of the Land Commission before acquiring an 
interest in agricultural land, though there are many stud 
farms and racing facilities in Ireland that are owned by 
foreign nationals.  There are no restrictions on the 
acquisition of urban land. 
 
¶10.  There is no formal screening process for foreign 
investment in Ireland, though investors looking to receive 
Government grants or assistance through one of the four state 
agencies responsible for promoting foreign investment in 
Ireland are often required to meet certain employment and 
investment criteria (see section "D" below).  These screening 
mechanisms are transparent and do not impede investment, 
limit competition, or protect domestic interests.  Potential 
investors are also required to examine the environmental 
 
DUBLIN 00000060  003.2 OF 014 
 
 
impact of the proposed project and to meet with Irish 
Environmental Protection Agency (EPA) officials. 
 
 
A.2. Conversion and Transfer Policies 
------------------------------------- 
 
¶11.  Ireland enjoys full current and capital account 
liberalization.   There are no restrictions or reported 
significant delays in the conversion or repatriation of 
investment capital, earnings, interest, or royalties, nor are 
there any plans to change remittance policies.  Likewise, 
there are no limitations on the import of capital into 
Ireland.  Foreign exchange is easily obtainable at market 
rates.  In 2004, the Irish Financial Services Regulatory 
Authority (IFSRA) reported that the Allied Irish Bank (AIB) 
had knowingly overcharged on foreign exchange transactions 
for several years.  AIB repaid the overcharged amount and 
conducted an internal disciplinary process.  The euro is 
Ireland's national currency. 
 
 
A.3. Expropriation and Compensation 
----------------------------------- 
 
¶12.  Private property is normally expropriated only for 
public purposes in a non-discriminatory manner and in 
accordance with established principles of international law. 
State condemnations of private property are carried out in 
accordance with recognized principles of due process.  Where 
there are disputes between owners of private property subject 
to a government taking, the Irish courts provide a system of 
judicial review and appeal. 
 
¶13.  In 2005, the only reported case of expropriatory action 
involving the property/facilities of U.S. investors was that 
of the Lusitania, the ship that was sunk off Ireland's 
southern coast in 1915 by a German submarine and which is 
owned by a U.S. citizen.  The U.S. owner has attempted for 
ten years to secure his right of access to the vessel and in 
2001 brought action against the Government in the Irish 
courts after his applications for a license to dive to the 
vessel were denied.  In 2005, a High Court ruling in the case 
noted that "the State simply cannot directly or indirectly 
expropriate this property from (the owner), or totally, or 
even substantially deny him access to or the use of his 
property or any part or parts of his property, even under 
color of merely regulating that access or use for the purpose 
of safeguarding a national asset, without paying appropriate 
compensation."  The Irish Government has appealed the ruling, 
as the two sides continue to discuss a possible license for 
an exploratory dive. 
 
A.4. Dispute Settlement 
----------------------- 
 
¶14.  Ireland has no specific domestic laws governing 
investment disputes with foreign firms.  There is, however, a 
legal arbitration framework available to parties that opt to 
arbitrate a dispute, including investment disputes, rather 
than litigate the case.  Currently, there are no disputes 
involving investments by U.S. firms either in arbitration or 
litigation.  In recent years, however, U.S. business 
representatives have occasionally called into question the 
transparency of government tenders, some of which have been 
won by U.S. companies.  Some U.S. firms claim that lengthy 
budgetary decisions delay procurements and that unsuccessful 
bidders often have difficulty receiving information on the 
rationale behind the tender outcome.   Successful bidders 
have experienced delays in finalizing contracts, commencing 
work on major projects, obtaining accurate project data, and 
receiving compensation for work completed, including through 
conciliation and arbitration processes.  Successful bidders 
have also subsequently found that the original tenders do not 
accurately describe conditions on the ground. 
 
¶15.  The Irish legal system is based on common law, 
legislation and the constitution.  The Companies Act 1963 
(amended 1990) is the most important body of law dealing with 
commercial and bankruptcy law and is applied consistently by 
the courts.  Irish bankruptcy laws give creditors a strong 
degree of protection.  The Department of Enterprise, Trade 
and Employment is the state agency with primary 
responsibility for drafting and enforcing company law.  The 
judiciary is independent, and litigants are entitled to trial 
by jury in commercial disputes.  Ireland is a member of the 
International Center for the Settlement of Investment 
Disputes, and the Irish Government has been willing to agree 
 
DUBLIN 00000060  004.2 OF 014 
 
 
to binding international arbitration of investment disputes 
between foreign investors and the state.  Ireland is also a 
party to the New York Convention of 1958 on the Recognition 
and Enforcement of Foreign Arbitral Awards.  There is no 
specific domestic body for handling investment disputes. 
 
 
A.5. Performance Requirements/Incentives 
---------------------------------------- 
 
¶16.  The Irish Government does not maintain any measures that 
it has notified the WTO to be inconsistent with Trade-Related 
Investment Measures (TRIMs) requirements.  Moreover, there 
have been no allegations that the Government maintains 
measures that violate the WTO's TRIMs text. 
 
¶17.  Three Irish organizations, SFADCO, IDA Ireland, and 
Udaras, have regulatory authority for administering grant aid 
to investors for capital equipment, land, buildings, 
training, R&D, etc.  Business enterprises in Ireland, 
including overseas companies, which seek grant aid from these 
organizations must submit investment proposals.  Typically, 
these proposals include information on fixed assets 
(capital), labor, and technology/R&D components and establish 
targets using criteria such as sales, profitability, exports, 
and employment.  This information is treated in confidence by 
the organizations, and each investment proposal is subject to 
an economic appraisal prior to approval for support.  In 
2004, IDA Ireland paid out euro 66 million in grants to 
foreign firms. 
 
¶18.  Performance requirements are generally based on 
employment creation targets established between the state 
investment agencies and foreign investors.  Grant aid is paid 
out only after externally audited performance targets have 
been attained.  Generally, parent companies must guarantee 
repayment of the government grant if the company closes 
before an agreed period of time elapses, normally ten years 
after the grant has been paid.  Grant agreements generally 
have a term of five years after the date on which the last 
grant is paid.  There are no requirements that foreign 
investors purchase from local sources or allow nationals to 
own shares. 
 
¶19.   As a result of "Agenda 2000" EU budgetary reforms, 
since 2000 Ireland has been treated as two regions for the 
purpose of EU structural funding and maximum "regional aid." 
Under the new rules, maximum grant aid assistance (40 percent 
of capital investment) is only available to companies 
locating in the 13 "Objective 1" border, midland and western 
(BMW) counties of Ireland, where infrastructure is less 
developed.  Companies locating in the remaining 15 counties 
in the more prosperous south and east are entitled to 
restricted grant aid up to a maximum of 17.5 percent to 20 
percent of their capital investment, depending on location. 
For the period 2004-2006, the following ceilings apply: 
 
Transition Regions            Percent of Capital Investment 
 
-- Southeast                             20 
 
-- Mid-West                              20 
 
-- Southwest                             20 
 
-- Mid-East                              18 
 
-- Dublin                                17.5 
 
Objective 1 Region 
 
-- Border, Midlands, West                40 
 
The current Regional Aid Guidelines (RAGs) will cease to 
operate at the end of 2006, and the EU Commission is now 
developing new RAGs for the period 2007-2013.  It is expected 
that these new rates will be lower than the current rates. 
 
¶20.  While investors are free, subject to planning 
considerations, to choose the location of their investment, 
IDA Ireland has since the late 1990s differentiated grant aid 
levels in favor of regions outside Dublin.  This linkage is 
consistent with the National Spatial Strategy, which was 
adopted in 2001 with the aim of spreading investment more 
evenly around the country.  One of the strategy's stated 
goals was to direct 50 percent of all new jobs related to 
greenfield investment to the border, midlands, and western 
(BMW) counties of Ireland, where the economy is less 
 
DUBLIN 00000060  005.2 OF 014 
 
 
developed.  In 1999, roughly 25 percent of jobs related to 
greenfield investment were located in the BMW region; by 
2004, this figure had grown to 41 percent.  In 2005, 46 of 71 
new investment projects negotiated by the IDA were slated for 
areas outside Dublin.  To encourage client firms to locate 
outside Dublin, IDA Ireland has developed "magnets of 
attraction," including: a Cross Border Business Park linking 
Letterkenny and Derry, a regional Data Center in Limerick, 
and the National Microelectronics Research Center in Cork. 
 
 
¶21.   There are no restrictions, de jure or de facto, on 
participation by foreign firms in government-financed and/or 
subsidized R&D programs on a national basis.  In fact, the 
government encourages multinational companies to undertake 
more R&D in Ireland.  Science Foundation Ireland (SFI), the 
state science agency, is responsible for administering a euro 
365 million R&D fund under the 2000-2006 National Development 
Plan.  The fund targets leading researchers in Ireland and 
overseas to promote within Ireland the development of 
biotechnology and information/communications technology, as 
well as complementary worker skills.  Under the 2004 Finance 
Act, moreover, a credit of 20 percent of the incremental 
expenditure on revenue items, royalties, plant, and machinery 
related to R&D can be offset against a company's corporation 
tax liability in the year in which it is incurred.  The 2006 
Irish Government budget also allocates euro 300 million to a 
new Strategic Innovation Fund, that will encompass R&D links 
between industry and academia.  In 2005, Microsoft, Lucent, 
Xilinx, Bristol-Meyers Squibb, Pfizer, and Genzyme, among 
other firms, launched investments in R&D projects and 
facilities. 
 
¶22.   Visa, residence, and work permit procedures for foreign 
investors are non-discriminatory and, for U.S. investors, 
generally liberal.  There are no restrictions on the numbers 
and duration of employment of foreign managers brought in to 
supervise foreign investment projects, though their work 
permits must be renewed yearly.  There are no discriminatory 
export policies or import policies affecting foreign 
investors. 
 
A.6. Right to Private Ownership and Establishment 
--------------------------------------------- ---- 
 
¶23.  The most common form of business organization in Ireland 
is the incorporated company, limited by shares, registered 
under the Companies Act, 1963, or previous legislation. 
Irish law does not prevent foreign corporations from carrying 
on business in Ireland.  Any company incorporated abroad that 
establishes a branch must, however, file certain papers with 
the Registrar of Companies.  A foreign corporation with a 
branch in Ireland will have the same standing in Irish law 
for purposes of contracts, etc., as a company incorporated in 
Ireland.  Private businesses are not at a competitive 
disadvantage to public enterprises with respect to access to 
markets, credit, and other business operations. 
 
¶24.  Before 1999, Irish company law differed from 
international norms by allowing, for tax purposes, the 
registration of companies in Ireland that were not actually 
resident in Ireland (so-called Irish Registered Non-Resident 
companies (IRNRs)).  In response to concern that a large 
number of the estimated 40,000 IRNRs were engaged in fraud, 
tax evasion, money laundering, and other illegal activities, 
the 1999 Finance Act equated registration in Ireland with tax 
residence and liability for all companies except in limited 
circumstances.  Exceptions include cases where the Irish 
company, or a related parent company, is carrying on trade in 
Ireland, and the company is ultimately controlled either by 
residents of an EU member state or by residents of a country 
with which Ireland has a tax treaty (including the United 
States).  Nonetheless, all Irish-based companies, including 
U.S. firms, claiming non-residence in Ireland because of tax 
treaty provisions must identify the beneficial owners of the 
company. 
 
¶25.   Similarly, the "Companies (Amendment) (No. 2) Act 1999" 
requires that every application for company registration in 
Ireland show the manner in which the proposed company will 
carry out activities in Ireland.  Section 43 of the 
legislation stipulates that a company must either have a 
director resident in the State or provide a bond of euro 
25,400 in the event that the company commits an offense under 
the Companies Act or tax legislation.  Section 44 states that 
these requirements may be waived when the Company obtains a 
certificate from the Companies Office stating that the 
company has a real and continuous link with one or more 
 
DUBLIN 00000060  006.2 OF 014 
 
 
economic activities in Ireland.  Like the 1999 Finance Act, 
the Companies Act is designed to prevent the use of IRNRs for 
exclusively foreign activities without any connection to 
Ireland. 
 
 
A.7. Protection of Property Rights 
---------------------------------- 
 
(I) Real Property 
 
¶26.   Secured interests in property, both chattel and real 
estate, are recognized and enforced.  The Department of 
Justice administers a reliable system of recording such 
security interests through the Land Registry and Registry of 
Deeds.  An efficient, non-discriminatory legal system is 
accessible to foreign investors to protect and facilitate 
acquisition and disposition of all property rights. 
 
(II) Intellectual Property Rights 
 
¶27.   Ireland is a member of the World Intellectual Property 
Organization and a party to the International Convention for 
the Protection of Intellectual Property.  In July 2000, Irish 
President McAleese signed legislation bringing Irish 
intellectual property rights (IPR) law into compliance with 
Ireland's obligations under the WTO Trade-Related 
Intellectual Property Treaty (TRIPs).  The legislation came 
into force on January 1, 2001, and gives Ireland one of the 
most comprehensive legal frameworks for IPR protection in 
Europe. 
 
¶28.  This legislation addressed several TRIPs inconsistencies 
in previous Irish IPR law that had concerned foreign 
investors, including the absence of a rental right for sound 
recordings, the lack of an "anti-bootlegging" provision, and 
low criminal penalties that failed to deter piracy.  The new 
legislation includes provisions for stronger penalties on 
both the civil and criminal sides. 
 
¶29.  As part of this comprehensive copyright legislation, 
changes were also made to revise the non-TRIPs conforming 
sections of Irish patent law.  Specifically, the new IPR 
legislation addresses two concerns of many foreign investors 
in the previous legislation: 
 
- the compulsory licensing provisions of the previous 1992 
Patent Law were inconsistent with the "working" requirement 
prohibition of TRIPs Articles 27.1 and the general compulsory 
licensing provisions of Article 31; and, 
 
- applications processed after December 20, 1991, did not 
conform to the non-discrimination requirement of TRIPs 
Article 27.1. 
 
¶30.  DVD and CD piracy, however, continues to be a problem. 
In 2004, the Irish police seized 130,000 pirated DVDs, valued 
at approximately euro 3 million, and 42,150 pirated CDs, 
valued at roughly euro 756,000.  In a June 2005 raid, police 
in County Meath confiscated 8,000 pirated DVDs and machinery 
that could produce 600 DVDs an hour.  Industry 
representatives note that pirated DVDs make up at least 60 
percent of the DVD rental market and that light penalties 
given to counterfeiters in DVD piracy court cases hamper 
police enforcement efforts.  Moreover, industry sources 
estimate that up to 38 percent of PC software used in Ireland 
is pirated.  The Business Software Alliance in Ireland 
estimates that reducing this rate by ten percentage points 
would help the USD 2.6 billion domestic IT industry to grow 
to USD 4 billion by 2009. 
 
 
A.8. Transparency of the Regulatory System 
------------------------------------------ 
 
¶31.  The Irish Government generally employs a transparent and 
effective policy framework that fosters competition between 
private businesses in a non-discriminatory fashion.  While 
ongoing Irish judicial "Tribunals" are investigating possible 
links between indigenous Irish companies' political donations 
in the late 1980s and favorable government decisions, U.S. 
businesses can, in general, expect to receive national 
treatment in their dealings with the Government.  There is no 
report of any U.S. firm or investor having being required or 
forced to make payments during that period. 
 
¶32.  In recent years, independent bodies have taken over 
regulatory powers from Cabinet Departments in key economic 
 
DUBLIN 00000060  007.2 OF 014 
 
 
sectors.  The Commission for Communications Regulation and 
the Commission for Energy Regulation are responsible for 
regulating the communications and energy sectors, 
respectively.  Both are independent bodies with institutional 
links to the Department of Communications, the Marine and 
Natural Resources.  The Commission for Aviation Regulation is 
an independent body that regulates the aviation sector.  It 
is institutionally linked to the Department of Transport, 
which has direct regulatory powers over other segments of the 
transportation sector. 
 
¶33.  The Competition (Amendment) Act 1996 amends and extends 
the Competition Act 1991, strengthens the enforcement power 
of the Competition Authority, introduces criminal liability, 
increases corporate liability, and outlines available 
defenses.  Most tax, labor, environment, health and safety, 
and other laws are compatible with European Union 
regulations, and they do not adversely affect investment. 
Proposed laws and regulations are published in draft form for 
public comment, including by foreign firms and their 
representative associations.  Bureaucratic procedures are 
transparent and reasonably efficient, in line with a general 
pro-business climate espoused by the Government. 
 
A.9. Efficient Capital Markets and Portfolio Investment 
--------------------------------------------- ---------- 
 
¶34.  Capital markets and portfolio investments operate 
freely, and there is no discrimination between Irish and 
foreign firms.  In some instances, development authorities 
and banks are able to facilitate loan packages to foreign 
firms with favorable credit terms.  Credit is allocated on 
market terms, although the Irish Competition Authority found 
in 2004 that the banking sector's lack of competition limited 
the amount of credit available to small and medium-sized 
firms.  Irish legal, regulatory, and accounting systems are 
transparent and consistent with international norms and 
provide a secure environment for portfolio investment.  The 
Capital Gains Tax rate is 20 percent.  The Irish banking 
system is sound.  The estimated total assets of all licensed 
credit institutions as of December 2005 stood at euro 911.4 
billion, with the Bank of Ireland and Allied Irish Banks 
holding a combined 25 percent of total assets.  According to 
the Central Bank, non-performing loans comprised 0.76 percent 
of total assets.  U.S. banks operating in Ireland include 
Citibank and Chase Manhattan. 
 
¶35.  As of January 2006, total market capitalization in the 
Irish Stock Exchange (ISEQ) was euro 95.1 billion, roughly 59 
percent of projected 2005 nominal GDP (euro 159.9 billion). 
In terms of market weight, the stocks of four companies are 
predominant: Allied Irish Bank, Bank of Ireland, CRH (a 
construction industry supplier), and Elan (a pharmaceuticals 
firm).  The Irish stock market has recovered steadily since 
plummeting in 2002 following the global economic slowdown and 
well-publicized management problems at several major Irish 
companies.  In 2005, the ISEQ Overall Index saw 20 percent 
growth and reached an all-time high by year's end, one of the 
strongest performances in the developed world.  Economists 
attribute ISEQ's robust showing to Ireland's broad-based 
economic growth, the likely under-valuing of Irish stocks 
earlier in the decade, and improved prospects for the 
European economy.  In 2005, ISEQ opened up a secondary 
market, the Irish Enterprise Exchange (IEX), which caters to 
smaller firms with a minimum market cap of euro 5 million. 
 
¶36.  In May 2003, the Central Bank of Ireland was reorganized 
into the Central Bank and Financial Services Authority of 
Ireland (CBFSAI), in accord with the Central Bank and 
Financial Services Authority of Ireland Act 2003.  Under the 
legislation, the Governor of the CBFSAI has responsibility 
for the overall stability of the Irish financial system.  The 
legislation also established the Irish Financial Services 
Regulatory Authority (IFSRA), which is an autonomous but 
constituent part of CBFSAI that regulates financial services 
institutions in Ireland and, from 2006, the Irish Stock 
Exchange.  IFSRA took over this responsibility from a mix of 
government bodies, including: the Central Bank, the 
Department of Trade, Enterprise, and Employment (DETE), the 
Office of Director of Consumer Affairs, and Registrar of 
Friendly Societies.  The legislation also enhanced the 
regulatory powers given to IFSRA, particularly in consumer 
protection. 
 
¶37.  With the advent of Economic and Monetary Union (EMU), 
the Central Bank is now a member of the European System of 
Central Banks (ESCB) whose primary objective is to maintain 
price stability in the euro area.  Ireland no longer operates 
 
DUBLIN 00000060  008.2 OF 014 
 
 
an independent monetary policy.  Rather, ESCB formulates and 
implements monetary policy for the euro area, and the Central 
Bank implements that policy at the national level.  The 
Governor of the Central Bank is one of 18 members of the 
Governing Council for the ECB and has an equal say in the 
formulation of monetary and interest rate policy.  The other 
main tasks of the Central Bank include: issuing euro currency 
in Ireland; acting as manager of the official external 
reserves of gold and foreign currency; conducting research 
and analysis on economic and financial matters; overseeing 
the domestic payment and settlement systems; and, managing 
investment assets on behalf of the State. 
 
¶38.  The Irish Takeover Panel Act 1997 governs company 
takeovers.  Under the Act, the "Takeover Panel" issues 
guidelines, or "Takeover Rules," which aim to regulate 
commercial behaviour in the context of mergers and takeovers. 
 According to minority squeeze-out provisions in the 
legislation, a bidder who holds 80 percent of the shares of 
the target company can compel the remaining minority 
shareholders to sell their shares.  There are no reports that 
the legislation has been used to prevent foreign takeovers 
specifically, and, in fact, there have been several 
high-profile foreign takeovers of Irish companies in the 
banking and telecommunications sectors in recent years.  The 
EU Directive on Takeovers provides a framework of common 
principles for cross-border takeover bids, creates a level 
playing field for shareholders, and establishes disclosure 
obligations throughout the EU.  The Directive is to be 
implemented in Ireland in 2006, though many of its principles 
have already been enacted in the Irish Takeover Panel Act 
¶1997. 
 
 
¶A. 10. Political Violence 
------------------------- 
 
(I) Impact of Northern Ireland Instability 
 
¶39.   In the past, political instability and violence in 
Northern Ireland were thought to affect the Republic of 
Ireland.  In reality, however, there has been little 
spillover of violence or instability, especially since the 
late 1970s and particularly after the cease-fires of 1994. 
The growth of business investment and confidence in Northern 
 Ireland since the cessation of widespread violence has 
benefited the Republic of Ireland, with cross-border trade 
reaching nearly euro 2.5 billion in 2004.  No violence 
related to the situation in Northern Ireland has been 
specifically directed at U.S. citizens or firms located in 
the South. 
 
¶40.  The 1998 ratification of the Good Friday Agreement by 
large majorities in both Ireland and Northern Ireland has 
further diminished the potential for violence.  Since then, 
however, groups opposed to the peace process have continued 
to commit acts of criminality and terror in Northern Ireland 
and on mainland Britain.  There have been no serious 
incidents in the Republic of Ireland.  In mid-2005, the Irish 
Republican Army announced that it would no longer pursue its 
objectives through violent means.  Independent observers 
subsequently confirmed the decommissioning of IRA weapons. 
Efforts in pursuit of a final peace agreement, including 
restoration of cross-community participation in local 
government, were set to continue into 2006. 
 
(II) Other Acts of Political Violence 
 
¶41.  In 1997 and 1998, an Irish environmental group 
vandalized two separate Irish crop trial sites, involving 
agricultural biotechnology crops.  The trials were conducted 
by the U.S. firm, Monsanto.  Irish police investigated both 
incidents and criminal charges were filed in both cases. 
There have been no further incidents involving subsequent GMO 
plant trials in Ireland. 
 
¶42.  There have been no other recent incidents involving 
politically motivated damage to foreign investment projects 
and/or installations in the Republic of Ireland.  In 2003, 
several Irish citizens opposed to the Iraq War damaged U.S. 
military assets at Shannon Airport.  In 2004, one of these 
citizens was convicted in an Irish court and given a 
suspended sentence.  The trial of the other citizens involved 
in these acts is pending for 2006.  In late 2005, a group of 
opposition and independent Irish parliamentarians said 
publicly that they would not oppose further attacks on U.S. 
military aircraft transiting Ireland. 
 
 
DUBLIN 00000060  009.2 OF 014 
 
 
¶A. 11. a. Corruption 
-------------------- 
 
¶43.   Corruption is not a serious problem for foreign 
investors in Ireland.  The principal Irish legislation 
relating to anti-bribery and corruption includes the Public 
Bodies Corrupt Practices Act 1889, the Prevention of 
Corruption Act 1906, the Prevention of Corruption Act 1916, 
and the Prevention of Corruption (Amendment) Act 2001.  This 
body of law makes it illegal for Irish public servants to 
accept bribes.  The Ethics in Public Office Act 1995 provides 
for the written annual disclosure of interests of people 
holding public office or employment. 
 
¶44.    Ireland signed the UN Convention on Corruption in 
December 2003, and ratification is pending a review of the 
legal measures required for implementation.  In January 2000, 
the GOI introduced to Parliament the "Prevention of 
Corruption  (Amendment) Act, 2001," to ratify and implement 
the OECD Convention on Bribery.  The legislation, which 
enabled Ireland to ratify a number of conventions dealing 
with corruption drawn up by the European Union, the Council 
of Europe, and the OECD, came fully into force as law in 
November 2002.  Ireland formally ratified the OECD Convention 
in September 2003.  Ireland is also a member of the OECD 
Working Group on Bribery and the Group of States Against 
Corruption (GRECO).  Under the Prevention of Corruption Act, 
the bribery of foreign officials is a criminal offense. 
Bribery of foreign officials may also invalidate a contract 
that a party is seeking to enforce in Ireland. 
 
¶45.  A number of ongoing judicial "Tribunals" are seeking to 
establish whether political donations by certain Irish 
companies in the late 1980s and early 1990s can be linked to 
favorable government decisions, mostly at the local level, in 
zoning and tax matters.  There is also media and public 
concern that business interests may have compromised Irish 
politics in the late 1980s and early 1990s.  Despite these 
reports of payments to political parties and figures in the 
1980s and early 1990s, there remains no indication that 
foreign businesses or investors have had to make such 
payments or been approached to make such payments to conduct 
business during the period in question or in years since. 
 
¶46.  In late 2004, the Government launched an inquiry into 
allegations that a Cabinet Minister approved for his former 
Department a no-bid public relations contract worth euro 
300,000 for a political associate.  The inquiry exonerated 
the Minister in 2005.  In late 2005, a junior Cabinet 
Minister resigned following press reports that a construction 
firm had worked on his house for free and that he had offered 
improper financial incentives to his office staff. 
 
¶47.  The Irish police investigate allegations of corruption. 
If sufficient evidence of criminal activity is found, the 
Director of Public Prosecutions prepares a file for 
prosecution.   A small number of public officials have been 
convicted of corruption and/or bribery in the past, although 
it is not a common occurrence. 
 
b. Bilateral Investment Agreements 
---------------------------------- 
 
¶48.    Ireland's only bilateral investment protection 
agreement is with the Czech Republic.  In addition, Ireland 
has bilateral tax treaties with the following countries: 
Australia, Austria, Belgium, Bulgaria, Canada, China, 
Croatia, Cyprus, the Czech Republic, Denmark, Estonia, 
Finland, France, Germany, Hungary, India, Italy, Israel, 
Japan, Korea (Rep. of), Latvia, Lithuania, Luxembourg, 
Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, 
Poland, Portugal, Romania, Russia, Slovak Republic, Slovenia, 
South Africa, Spain, Sweden, Switzerland, UK, the United 
States, and Zambia.  Treaties with Greece and Iceland were 
signed in November and December 2003, respectively, and 
became effective for the 2005 tax period.  A treaty replacing 
the existing treaty with Canada was signed in October 2003. 
Parliamentary procedures to bring the treaty into force were 
completed by Ireland in December 2004 and by Canada in April 
2005, and the treaty will become effective for the 2006 tax 
period.  A new agreement with Chile was signed in June 2005. 
The agreement will likely enter into force in 2006, subject 
to completion of the necessary parliamentary procedures by 
Ireland and Chile.  A protocol amending Ireland's agreement 
with Portugal was signed in November 2005 and will also 
likely enter into force in 2006, pending parliamentary 
procedures in both countries.  New treaties with Argentina, 
Egypt, Kuwait, Malta, Morocco, Singapore, Tunisia, Turkey and 
 
DUBLIN 00000060  010.2 OF 014 
 
 
Ukraine are being negotiated.  Existing treaties with Cyprus, 
France and Italy are in the process of re-negotiation.  These 
agreements serve to promote trade and investment between 
Ireland and the partner countries that would otherwise be 
discouraged by the possibility of double taxation. 
 
c.  OPIC and Other Investment Insurance Programs 
--------------------------------------------- --- 
 
¶49.   Since 1986 the U.S. Overseas Private Investment 
Corporation (OPIC) has been authorized to operate in Ireland 
as part of the U.S. effort to support the process of peace 
and reconciliation in Northern Ireland.   There is some 
potential in Ireland for OPIC's credit guarantee programs. 
No other countries have an investment insurance program in 
Ireland.  Ireland is a member of the Multilateral Investment 
Guarantee Agency (MIGA). 
 
¶50.   The estimated annual U.S. dollar value of local 
currency likely to be used by the U.S. Embassy in Ireland 
during 2006 is approximately USD 12.4 million.  The Embassy 
purchases local currency through centralized bulk purchasing 
arrangements at a competitive market rate.  Prospects for 
eurozone economic growth and for the U.S. trade and budget 
deficit positions will likely determine USD and euro currency 
movements through 2006. 
 
d. Labor 
-------- 
 
¶51.  In 2005, employment levels in Ireland reached historical 
highs, the result of continued strong economic growth.  As of 
the third quarter of 2005, the number of people employed was 
1.9 million, an increase of roughly 96,000, or 5.0 percent, 
compared to the third quarter of 2004.  Since 1994, 
employment growth has averaged roughly 4.0 percent, with 
lower rates recorded in 2002 and 2003 following the post 9-11 
global economic slowdown.  Comparing the third quarters of 
2004 and 2005, the largest increase in employment was in the 
vibrant (housing) construction sector, which added 30,400 
jobs.  There was also a gain of 20,200 jobs in business and 
financial services during the year.  Employment in production 
industries, including manufacturing, fell by 11,000, however, 
continuing a trend from 2004. 
 
¶52.  In contrast to 15.6 percent unemployment in 1993, 
Ireland registered 4.2 percent unemployment in the second 
quarter of 2005.  This was the lowest unemployment rate among 
EU Member States and slightly less than half the eurozone 
average.  The number of unemployed people in the third 
quarter of 205 was 96,700, representing an increase of 2,800 
compared to the third quarter of 2004.  Local economists 
believe that the Irish economy is as close to full employment 
as possible, with employers reporting difficulties in 
recruiting workers.  Whereas Ireland's primary policy goal 
was once job creation, the focus of government strategy has 
shifted to upgrading skills and increasing the number of 
workers in technology-intensive, high-value sectors. 
 
¶53.  Irish labor force regulation is less restrictive 
compared with most continental EU countries.  The Irish 
workforce is characterized by a high degree of flexibility, 
mobility, and education.  There is a relative gender balance 
in the workforce, with 1.2 million males and 882,000 females 
currently employed.  This gender balance reflects a change in 
social mores that has facilitated a surge in female 
employment since the mid-1980s 
 
¶54.  With the tightening of the labor market, wages remain on 
an upward growth curve.  As of the third quarter of 2005, 
average annual earnings per worker were euro 35,506, a 3.5 
percent increase over the third quarter of 2004.  Between 
1998 and 2003, compensation per employee increased by 37.1 
percent, compared with 8.7 percent in Germany over the same 
period.  The minimum wage was euro 5.20 when it was first 
introduced in 2000 and rose to euro 7.65 in 2005.  Employees 
earning the minimum wage will not have to pay personal income 
tax in 2006. 
 
¶55.  Unprecedented immigration levels, particularly from 
Eastern Europe, have added a new dynamic to the Irish labor 
market.  Of the 96,000 new workers added to the labor force 
between the third quarters of 2004 and 2005, roughly 40,000 
were immigrants, working mostly in the construction and 
lower-end services sectors.  According to some sources, the 
number of people taking up residence in Ireland since the 
accession of new EU Member States in 2004 may be as high as 
100,000.  Irish labor unions have expressed concern over 
 
DUBLIN 00000060  011.2 OF 014 
 
 
immigration trends and the possibility of displacement of 
Irish workers.  In late 2005, a labor dispute over plans by a 
ferry company to replace Irish workers with Eastern European 
migrants at lower wages prompted large-scale, peaceful 
demonstrations nationwide in support of protective mechanisms 
for both Irish and migrant laborers.  Economists point out, 
however, that yearly job creation in Ireland is currently 
sufficient to accommodate both Irish workers and immigrants. 
Economists also hold that that Ireland will require 50,000 
immigrants a year over the short term to sustain high rates 
of economic growth. 
 
¶56.   The Irish system of industrial relations is a voluntary 
one.  Pay levels and conditions of employment are generally 
agreed through collective bargaining between employers and 
employees.  Since 1987, collective bargaining has taken place 
under the framework of a series of national economic 
programs, negotiated by representatives of employers, trade 
unions, farmers, and the government.  This consensual "Social 
Partnership" approach has been accompanied by a marked 
improvement in the industrial relations climate since the 
mid-1980s.  Working days lost as a result of industrial 
disputes amounted to 37,482 in 2003 and 20,784 in 2004 (a 
fraction of the total days lost through industrial action in 
the 1980s and early 1990s). 
 
¶57.   The latest national economic program, "Sustaining 
Progress", was agreed under the Social Partnership framework 
in February 2003 and approved by Ireland's major unions in 
August 2004.  The 18-month agreement exchanges a 7 percent 
wage increase for industrial relations stability.  While the 
package will cost the GOI - Ireland's largest employer - an 
estimated euro 2.5 billion, private industries unable to pay 
the full 7 percent due to competitive pressures will be 
permitted to pay lesser increases or none at all.  As part of 
the package, the GOI committed to provide an increased supply 
of "affordable housing" and to amend legislation and 
statutory codes to strengthen the procedures by which unions 
can represent their members' interests.  In addition, the GOI 
enhanced statutory redundancy terms to provide released 
employees with two weeks' compensation for each year of 
service.  Negotiations on a successor program to "Sustaining 
Progress" were set to begin in early 2006. 
 
¶58.  Trade union demands for mandatory trade union 
recognition in the workplace are strongly resisted by 
employers.  While the Irish constitution guarantees the right 
of citizens to form associations and unions, Irish law also 
affirms the right of employers not to recognize unions and to 
deal with employees on an individual basis.  Currently, 
roughly 33 percent of workers in the private sector are 
unionized, compared to 95 percent in the public sector. 
Among foreign-owned firms, roughly 80 percent of workers do 
not belong to unions.  Employers also strongly oppose trade 
union demands for greater "partnership" between employees and 
employers at the enterprise level, including worker 
participation in managerial decisions through German-style 
"work councils."  Some progress has been made, however, with 
regard to increased profit-sharing. 
 
e.  Foreign Trade Zones/Free Ports 
---------------------------------- 
 
¶59.   The Shannon duty-free Processing Zone (SDFPZ) was 
established by legislation in 1957.  Under the legislation, 
eligible companies operating in the Shannon Free Zone are 
entitled to the following benefits: goods imported from 
non-EU countries for storage, handling or processing are duty 
free; no duty on goods exported from Shannon to non-EU 
countries; no time limit on disposal of goods held duty-free; 
minimum customs documentation and formalities; no Value Added 
Tax (VAT) on imported goods, including capital equipment; 
choice of having import duty on non-EU product calculated on 
its landing value or selling-out  price.  Qualifying criteria 
for eligible companies include employment creation and 
export-orientation.  Foreign-owned firms in the Shannon Free 
Zone have the same investment opportunities as indigenous 
Irish companies.  As of 2005, there were 110 internationally 
traded manufacturing and service companies established in the 
Shannon Free Zone, employing roughly 7,500 workers and 
generating about euro 2.5 billion in exports annually.  U.S. 
companies, which make up 57 percent of the firms operating 
out of Shannon, include GE Capital, Bristol Myers Squibb, 
DHL, UPS, Pfizer, Intel, Symantec, and Cabletron.  The 
Shannon Free Zone is technically an asset of SFADCO, although 
the Government is currently reviewing a proposal to place the 
zone under the authority of Shannon Airport as a means of 
airport funding. 
 
DUBLIN 00000060  012.2 OF 014 
 
 
 
¶60.  Duty free exemptions are available also to companies 
operating in Ireland's major deep-water port at Ringaskiddy 
in County Cork, although these have been used infrequently in 
recent years. 
 
f.  Foreign Direct Investment Statistics 
---------------------------------------- 
 
¶61.  According to Ireland's Central Statistical Office (CSO), 
the stock of FDI in Ireland for end-year 2004 stood at euro 
171.8 billion, or 117 percent of nominal 2004 GDP and a 2.7 
percent drop from 2003.  Ireland received FDI flows worth 
euro 8.98 billion in 2004, or 6 percent of nominal 2004 GDP 
and a 55 percent decline from 2003.  (Note: Different FDI 
calculation methods likely explain discrepancies with U.S. 
Department of Commerce statistics, which show U.S. FDI flows 
alone to Ireland as USD 10.4 billion in 2004, roughly the 
same amount as total FDI flows according to Irish statistics. 
 Further discrepancies are noted in the tables below.) 
 
¶62.   In 2004, the 1,022 companies supported by IDA Ireland, 
including 478 U.S. firms, spent euro 15.5 billion in the 
Irish economy from their annual sales of euro 75 billion 
(exports of euro 71 billion) and paid over euro 2.5 billion 
in corporate tax.  During 2005, IDA negotiated 71 new 
business projects with new and existing clients, which 
involved a total investment commitment of over euro 745 
million over the coming years.  IDA also supported 50 R&D 
investment projects involving a total investment by business 
in excess of euro 260 million, an 85 percent increase in 
value over 2004. 
 
¶63.  According to the American Chamber of Commerce, U.S. 
firms announced 34 investment projects in 2005, creating 
3,400 new jobs.  Of these projects, roughly a third were new 
investments, such as by Yahoo and Amazon, and two-thirds were 
expansion programs, such as by established companies Intel, 
Dell, Bisys, PFPC, and International Fund Service.  Roughly 
90 percent of FDI projects that came to Ireland in 2005 were 
of U.S. origin.  New investments were evenly split between 
the east coast, inclusive of Dublin, and the remainder of the 
country, with the largest regional clusters in Cork, Galway, 
and the Southeast.  The U.S. Department of Commerce estimates 
that U.S. companies' average return on investment (ROI) in 
Ireland is 24 percent. 
 
 
Table 7.1: Stock of U.S. Investment in Ireland 
(Millions of dollars; historical cost basis) 
 
                          2002      2003        2004 
 
All Industries            46,617    55,463      73,153 
 
Manufacturing             13,427    15,002      21,290 
 
  Food                    157       193         241 
 
  Chemicals               6,207     6,089       10,019 
 
  Metal                   22        33          51 
 
  Industrial machinery    23        24          26 
 
  Computers/Electronic    3,241     3,992       5,571 
 
  Transportation Equipment unavailable  unavailable   285 
 
Wholesale trade            2,680     2,998      4,598 
 
Information                10,362    14,048     17,029 
 
Finance/Insurance          7,520     8,681      11,101 
 
Depositary Institutions    145       445        unavailable 
 
Prof. Services             1,459     1,655      1,968 
 
Source:  U.S. Department of Commerce, Survey of Current 
Business 
 
 
Table 7.2: Investment Flows into Ireland by Country Origin, 
2004 
(in euro millions) 
 
Total                   8,987 
 
DUBLIN 00000060  013.2 OF 014 
 
 
 
UK                      -2,373 
 
Belgium/Luxembourg      5,581 
 
France                  846 
 
Germany                 921 
 
Italy                   271 
 
Netherlands             5,710 
 
Canada                  -271 
 
United States           3,996 
 
Japan                   1,392 
 
Source: Ireland Central Statistical Office (CSO) website 
 
(Note: According to the U.S. Department of Commerce, U.S. 
investment flow into Ireland in 2004 was USD 10.4 billion. 
Also, investment by U.S. companies in Ireland is often 
effected through intermediary subsidiaries located outside 
the United States.  According to the CSO, a sizeable 
proportion of the Dutch investment cited above originated in 
the United States.) 
 
 
Table 7.3: Investment Stock in Ireland by Country Origin, 2004 
(in euro millions) 
 
Total                   171,766 
 
UK                      24,706 
 
Belgium/Luxembourg      27,071 
 
France                  3,224 
 
Germany                 2,484 
 
Italy                   4,854 
 
Netherlands             56,069 
 
Canada                  5,987 
 
United States           25,825 
 
Source: Ireland Central Statistical Office (CSO) website 
 
(Note: According to the U.S. Department of Commerce, the 
stock of U.S. investment in Ireland in 2004 was USD 73.2 
billion.) 
 
 
Table 7.4: Total Employment by Sector in IDA-Supported 
Companies 
 
 
                                 2002       2003      2004 
 
Information/Communications 
Technologies                     43,499     41,362    41,887 
 
 
Pharmaceuticals/Healthcare       19,016     19,326    19,985 
 
 
Engineering                      16,536     15,372    13,989 
 
Miscellaneous Industry           10,047     9,282     8,243 
 
International and Financial 
Services                         43,281     43,407    44,842 
 
 
Total                            132,379    128,749   128,946 
 
Source: IDA Ireland Annual Report, 2004 
 
 
 
Table 7.5: Origins of IDA-Supported Companies, End-2004 
 
 
 
DUBLIN 00000060  014.2 OF 014 
 
 
Country          Number of Firms          Employment 
 
United States          478                90,236 
 
United Kingdom         116                6,824 
 
Germany                140                11,158 
 
Rest of Europe         209                16,163 
 
Asia/Pacific           46                 3,002 
 
Rest of World          33                 1,563 
 
Total                  1,022              128,946 
 
Source: IDA Ireland Annual Report, 2004 
 
 
 
Table 7.6: Major U.S. Investments in Ireland 
 
 
Company                                        Location 
 
Apple Computers                                    Cork 
 
AIG Europe                                       Dublin 
 
Bausch & Lomb                                 Waterford 
 
Berlitz                                          Dublin 
 
Bisys                                         Waterford 
 
Boston Scientific                 Galway, Cork, Wexford 
 
HP-Compaq Computers                      Galway, Dublin 
 
Citibank                                         Dublin 
 
Dell Computers                         Limerick, Dublin 
 
Eastman Kodak                            Limerick, Cork 
 
Fidelity                                         Dublin 
 
Gartner Group                                   Limerick 
 
Hertz                                             Dublin 
 
Hewlett-Packard                         Leixlip, Kildare 
 
IBM Ireland                                       Dublin 
 
Intel Ireland                            Dublin, Leixlip 
 
Johnson & Johnson                                 Dublin 
 
Millipore Ireland BV                                Cork 
 
Motorola                                            Cork 
 
Netscape Communications                           Dublin 
 
Novartis                                            Cork 
 
PFPC                                      Navan, Wexford 
 
Prudential Insurance of America              Letterkenny 
 
3Com                                              Dublin 
 
United Airlines                                   Dublin 
 
US Robotics                                       Dublin 
 
Woodchester Investments                           Dublin 
 
Wyeth Biopharma                                   Dublin 
 
Source: IDA Ireland Annual Report, 2004
KENNY