Goldman Sachs "May Have Violated Securities Laws"

According to Greg Gordon of McClatchy Newspapers (ht Huffington Post):

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws...

***

...To piece together Goldman's role in the subprime meltdown, McClatchy reviewed hundreds of documents, SEC filings, copies of secret investment circulars, lawsuits and interviewed numerous people familiar with the firm's activities.

McClatchy's inquiry found that Goldman Sachs:

*Bought and converted into high-yield bonds tens of thousands of mortgages from subprime lenders that became the subjects of FBI investigations into whether they'd misled borrowers or exaggerated applicants' incomes to justify making hefty loans.

*Used offshore tax havens to shuffle its mortgage-backed securities to institutions worldwide, including European and Asian banks, often in secret deals run through the Cayman Islands, a British territory in the Caribbean that companies use to bypass U.S. disclosure requirements.

*Has dispatched lawyers across the country to repossess homes from bankrupt or financially struggling individuals, many of whom lacked sufficient credit or income but got subprime mortgages anyway because Wall Street made it easy for them to qualify.

*Was buoyed last fall by key federal bailout decisions, at least two of which involved then-Treasury Secretary Henry Paulson, a former Goldman chief executive whose staff at Treasury included several other Goldman alumni.

The firm benefited when Paulson elected not to save rival Lehman Brothers from collapse, and when he organized a massive rescue of tottering global insurer American International Group while in constant telephone contact with Goldman chief Blankfein. With the Federal Reserve Board's blessing, AIG later used $12.9 billion in taxpayers' dollars to pay off every penny it owed Goldman.

Happy Halloween!

1976 Swine Flu Vaccine May Still Protect Against Current Pandemic

Someone I know saw a link to this September 2009 Scientific American article in a Reuters item, and wondered why it isn't getting more play--as action based on these findings could make available 43 million doses of needed H1Ni flu vaccine to those who really need it. Money quote:

One of the NEJM studies also showed that many older Americans as well as recipients of the 1976 swine flu vaccine may already be protected against the new virus. In that study, researchers from the U.S. Centers for Disease Control and Prevention (CDC) report that tests of serum taken from 1976 swine flu vaccine recipients showed a strong protective immune response against today's pandemic virus. The findings may help to explain why the virus sickens children and young adults more than older people, the authors wrote. The preexisting immunity may also prime 1976 vaccinees to respond vigorously to the new pandemic vaccine.

"It would certainly be something very interesting to look at," says Jackie Katz, senior author of the study. "That's why we did these studies originally, to help inform the public health response."

Adults appear protected

Since the new H1N1 virus emerged earlier this year, health officials have noted how it has disproportionately struck children and young adults and conspicuously spared older people worldwide. The disparity is most dramatic in the U.S.: 79 percent of laboratory-confirmed cases have been in people under 30 years old, whereas only two percent of cases have been in adults over 60. The U.S. median age of pandemic infections so far is 12, but somewhat higher in other countries. The median age of confirmed cases in Australia is 21, for example.

Since May, Katz, who is chief of the CDC National Influenza Division's Immunology and Pathogenesis Branch, has been testing stored serum samples to look for existing immunity to the new virus in the U.S. population. Her group's latest report shows that serum from adults born before 1930, including survivors of the 1918 pandemic, possesses antibodies that recognize and respond powerfully to the novel H1N1 virus.

With an antibody concentration of 40 or more considered protective (immunologists describe antibody responses in terms of serum dilution ratios, such as 1:40), the tests showed that 100 percent of subjects born between 1910 and 1929 mounted antibody levels of 80 or more. Only 34 percent of subjects born before 1950 mounted comparable levels, suggesting that exposure to the 1918 pandemic virus or its immediate descendents in the 1920s and 1930s conferred the strongest protection against the new flu.

The original swine flu

The CDC group also started over the summer to test 83 samples of serum drawn in 1976 from adults who received a single dose of the swine flu vaccine as well as a handful of samples from children who got the 1976 vaccine. The study found that the serum from 52 (63 percent) of the adult subjects produced antibody levels of 160 or more when exposed to the novel H1N1 virus. That number was nearly as many (59) of those whose serum demonstrated a strong response when exposed to the 1976 swine flu itself.

The NEJM report notes that a Japanese study recently reported finding protective antibody responses against the novel H1N1 virus in Japanese adults exposed to the 1918 pandemic virus, but not in subjects born after 1920. Serum from older Europeans tested by the CDC also showed lower response levels than the U.S. samples, possibly indicating a greater level of protection among Americans from the 1976 vaccine, which was given only in the U.S.

I got my shot in 1976, as did someone I know, so we won't be getting it again...freeing up at least two doses for some kids with asthma or those with weakened immune systems.

Given the current shortages of vaccine, I hope the Centers for Disease Control would try to spread the word about health benefits of the 1976 shot more vigorously.

PBS Documentary's Message: "Let Them Smoke Pot"

The other night, I came home from teaching to find someone I know watching a PBS documentary instead of the World Series. The Botany of Desire, a 1.2 million dollar program, featured our former next-door neighbor on West 110th Street in New York City, now millionaire and bestselling author, Michael Pollan. He was completely unrecognizable, now looking more like bullet-headed former Treasury Secretary Henry Paulson than the bearded, softy, Bennington graduate and protege of novelist John Gardner. As the program unfolded, it became pretty obvious that Pollan and his crew of not-so-merry Cannibis lobbyists, including New Age health guru Dr. Andrew Weil, were singing the praises of recreational hemp--their argument apparently growing (forgive the pun) out of mankind's desire for plants such as tulips and apples.

I figure, given the time it takes to produce a PBS documentary, the network brass must have green-lighted this infomercial for the multibillion-dollar marijuana industry sometime during the Bush administration. Let's call it a triumph of product placement by "Big Dope."

Eight years after 9/11, I finally was told by PBS, and my former neighbor, what the American establishment thinks we should do to cope with a world on fire with economic collapse, Islamic revolution, and terrorism.

PBS's answer:"Let them smoke pot."

Having lived through the ghastly 1970s when so many were stoned, and having benefitted from the Reagan administration's "Just Say No" turnaround, I'm glad most of America was watching the World Series the other night. I don't want to live through another Carter administration, thank you very much...

I'm rooting for the Yankees, myself.

Matthew Hoh's Resignation Letter from US State Department in Afghanistan

From the Washington Post.

A Piano-Playing Cat on YouTube... (ht Huffington Post)

Arianna Huffington: Time for Obama to Act on Economy

From today's Huffington Post:

Meanwhile, the fundamental structural problems that led to the collapse are still not being addressed. A sense of urgency and crisis was exploited when it was useful in persuading taxpayers of the need to bail out the banks. But now that the banks are no longer in crisis -- and it's just the rest of the country that is in trouble -- the sense of urgency has faded. Because nothing says lack of urgency like "convene a conference."

Elizabeth Warren sums it up ominously: "All the things we were talking about that were serious, serious problems for the financial institutions seem to me are still serious, serious problems."

And Neel Kashkari, the former overseer of the TARP program under Bush, knows a lack of change when he sees it. "I think that the way that a Democratic administration talks about certain issues is probably a little different than the way a Republican administration does, and that's appropriate," he said. "But the substance of the actions, I think, are very consistent, and that's been important."

Important for Wall Street. And tragic for the rest of us -- both in terms of what hasn't been accomplished, and in terms of how much more misery it will lead to down the road. Misery that is avoidable -- if only Barack Obama would stop acting like a pundit, egging on change from the sideline, and start acting like the president, dictating the game from the middle of the field.


Read more at: http://www.huffingtonpost.com/arianna-huffington/barack-obama-is-doing-my_b_334631.html

Captain January (1936)

Watched it the other night, rented from Netflix. Shirley Temple has 2 Daddys! Standardized testing mocked! Buddy Ebsen dances at the Codfish Ball with Shirley Temple! A great film...which no doubt led to making Shirley Temple Black a great diplomat!

From Wikipedia
The peak of Black's diplomatic career came when she was United States Ambassador to Czechoslovakia from 1989 to 1992, and witnessed the Velvet Revolution. She commented about her Ambassadorship, "That was the best job I ever had."

Five stars.

Hillary Clinton's Unprincipled Freudian Slip...

Took place Wednesday, October 21st in a speech sponsored by the US Institute of Peace dealing with nuclear weapons. The Secretary of State declared:

Pursuing these goals is not an act of starry-eyed idealism or blind allegiance to principle. It is about taking responsibility to prevent the use of the world’s most dangerous weapons, and holding others accountable as well. The policies that take us there must be up to the task: tough, smart, and driven by the core interests of the United States. As the President has acknowledged, we might not achieve the ambition of a world without nuclear weapons in our lifetime or successive lifetimes. But we believe that pursuing this vision will enhance our national security and international stability.

Secretary of State Hillary Clinton's declaration to USIP reveals that she doesn't understand the meaning of the word principle.

Did any of her speechwriters consult Merriam-Webster Online?

Main Entry: prin·ci·ple
Pronunciation: \ˈprin(t)-s(ə-)pəl, -sə-bəl\
Function: noun
Etymology: Middle English, from Middle French principe, principle, from Old French, from Latin principium beginning, from princip-, princeps initiator — more at prince
Date: 14th century
1 a : a comprehensive and fundamental law, doctrine, or assumption b (1) : a rule or code of conduct (2) : habitual devotion to right principles (a man of principle) c : the laws or facts of nature underlying the working of an artificial device
2 : a primary source : origin
3 a : an underlying faculty or endowment (such principles of human nature as greed and curiosity) b : an ingredient (as a chemical) that exhibits or imparts a characteristic quality
4 capitalized Christian Science : a divine principle : god
— in principle : with respect to fundamentals (prepared to accept the proposition in principle)

In other words, one simply cannot have a blind obedience to principle, logically one must recognize a fundamental law, doctrine, or assumption in order to follow it. By definition, principled behavior is self-conscious, aware, enlightened...never blind. One might have a blind allegiance to prejudices, myths, superstitions, shibboleths, taboos, and even the Democratic Party--but not to a principle. By definition, a principle is antithetical to blind allegiance.

So, in this statement the Secretary of State has revealed what she thinks about matters of principle...which is what makes it a Freudian slip.

Holbrooke's Kiss of Death to NGOs

Some diplomatic doubletalk at yesterday's State Department press conference, meaning (IMHO): "So long, it's been good to know you..."

QUESTION: This is Laura Rozen from Politico. I know your team has been meeting with USAID contractors and NGOs and others in the past week to try to communicate your ideas for assistance to Pakistan. Can you talk a little bit about what you all are trying to communicate?

AMBASSADOR HOLBROOKE: I’m not sure what you mean by the last week. I meet with NGOs every few days. We are the only office in this building with a full-time NGO person assigned to us who has joined us recently. He – we have a list of close to a thousand NGOs that we have now compiled and doing databasing on. NGOs are a hugely important part of this process. And the Secretary of State herself is deeply involved in outreach to the NGOs. She cares about the NGOs. I ran three NGOs myself until January 19th and have served on many boards. And so yesterday, we met with some of them. We support the NGOs.

At the same time, we’re trying to improve the operations of entities – NGOs and contract employees – who serve – who carry out part of American foreign policy in the region. And this is a very delicate balance, and some people have expressed concerns about this, but we have a very clear image of speeding up the flow of American taxpayer dollars to the people and the governments of the two countries. So if it’s a government contract, we want to speed it up.

Now, of the NGOs I met with yesterday, they all pointed out that only a certain percentage of their funds come from the U.S. Government, and that that percentage is going down. So we encourage them to work with us, and we’ll continue. And I don’t believe you’ll ever find in this building, in its past or currently, any office which spends more time with NGOs --

QUESTION: And --

AMBASSADOR HOLBROOKE: -- because it’s what we believe in. Hillary Clinton and I believe in it, and because they’re important.

Niger Election Crisis Rooted in Chinese Oil & French Uranium

From Radio France International

President Mamadou Tandja’s ruling National Movement for the Development of Society has won in Niger’s elections, according to partial results announced by the electoral commission on Friday. From results of 100 constituencies, Tandja’s party won 68.

The partial results were announced on state television by electoral commission head Moumouni Hamidou. 113 constituencies were being contested.

Opposition parties boycotted the poll and the country had been suspended from the Economic Community of West African States, following the announcement of the election.

Tandja, a 71-year-old retired colonel, called the elections to replace the parliament he dissolved in June after they refused his plans to extend his term past the 10-year limit.

On Thursday the European Union threatened to cut ties with Niger. They already froze development aid to the country, following the referendum in August, which gave him another three years in power.

“It won’t have any affect on Tandja or the politicians who are supporting him, because obviously he does not care,” Ousseina Alidou, an analyst from Rutgers University, told RFI.

Tandja claims that he needs to stay in power to ensure that projects such as a Chinese oil refinery and French uranium mine are finished.

Allan Sloan: Uncle Sam Takes From Prudent Savers, Gives to Wall Street Speculators

From today's Washington Post:

One day, the federal government won't be able to keep all these interest rates artificially low. The Chinese government, our major financier, is growing restless. The dollar's sharp decline relative to other currencies is an ominous sign. If this problem accelerates, it will put pressure on the Fed to let interest rates rise to protect the dollar from a collapse.

But until rates go up, Wall Street will be chowing down on essentially free money, while fixed-income people living off their investments will have to eat into their capital, take more risk or reduce their standard of living. A nice reward from their government for a lifetime of saving. Thanks for nothing, guys.

Human Rights Watch Founder Condemns Human Rights Watch

Organization founder Robert Bernstein finally objects to Human Right Watch's anti-Israel jihad, in today's New York Times.

Human Rights Watch has lost critical perspective on a conflict in which Israel has been repeatedly attacked by Hamas and Hezbollah, organizations that go after Israeli citizens and use their own people as human shields. These groups are supported by the government of Iran, which has openly declared its intention not just to destroy Israel but to murder Jews everywhere. This incitement to genocide is a violation of the Convention on the Prevention and Punishment of the Crime of Genocide.

Leaders of Human Rights Watch know that Hamas and Hezbollah chose to wage war from densely populated areas, deliberately transforming neighborhoods into battlefields. They know that more and better arms are flowing into both Gaza and Lebanon and are poised to strike again. And they know that this militancy continues to deprive Palestinians of any chance for the peaceful and productive life they deserve. Yet Israel, the repeated victim of aggression, faces the brunt of Human Rights Watch’s criticism.

Will Bernstein's op-ed make any difference? Or is it too little, too late?

NY Times Axing 100 Reporters

From the NY Observer (ht Eric Fettmann). Editor Bill Keller announced the layoffs by email:

I had planned to invite you to the newsroom and break this news in person today, but I've been hit by something that seems to be the flu. Though I strongly believe in delivering bad news in person, I don't want to add insult to injury by spreading infection.

Let me cut to the chase: We have been told to reduce the newsroom by 100 positions between now and the end of the year.

We hope to accomplish this by offering voluntary buyouts. On Thursday, the Company will be sending buyout offers to everyone in the newsroom. Getting a buyout package does NOT mean we want you to leave. It is simply easier to send the envelopes to everyone. If you think a buyout may be right for you, you have up to 45 days to decide whether you will accept it or not.

As before, if we do not reach 100 positions through buyouts, we will be forced to go to layoffs. I hope that won't happen, but it might.

Our colleagues in editorial and op-ed, and on the business side, also face another round of budget cuts.

In recent years, we've managed to avoid the disabling cutbacks that have hit other newsrooms. The Company has chosen to protect the journalism by cutting production and other business-side costs, and the newsroom itself has managed its resources frugally. These latest cuts will still leave us with the largest, strongest and most ambitious editorial staff of any newsroom in the country, if not the world.

I won't pretend that these staff cuts will not add to the burdens of journalists whose responsibilities have grown faster than their compensation. But we've been looking hard at ways to minimize the impact -- in part, by re-engineering some of our copy flow. I won't promise this will be easy or painless, but I believe we can weather these cuts without seriously compromising our commitment to coverage of the region, the country and the world. We will remain the single best news organization on earth.

I doubt that anyone is shocked by the fact of this, but it is happening sooner than anyone anticipated. When we took our 5 percent pay cuts, it was in the hope that this would fend off the need for more staff cuts this year. But I accept that if it's going to happen, it should be done quickly. We will get through this and move on.

In my absence, Bill Schmidt and John and Jill have volunteered to take your questions this afternoon. Feel free to bring additional questions to me as soon as I'm back, or check with Bill Schmidt or John or Jill privately, or save them for the next Throw Stuff at Bill session, which is in a couple of weeks.

We often -- and rightly -- voice our gratitude that we work for a company and a family that prize quality journalism above all. I hope you know that the company and the family, and I, feel an equal debt of gratitude to all of you whose sacrifice and loyalty have kept us strong.

Like you, I yearn for the day when we can do our jobs without looking over our shoulders for economic thunderstorms.

Bill

Chinese Film Week in Tel Aviv

While the West fixates on demonizing Israel in Switzerland through British-French acquiescence in the notorious Goldstone Report (not since the Dreyfus Affair have we heard of such an obvious calumny), this Tel Aviv film festival (reminiscent of "ping-pong diplomacy") shows China is meanwhile improving ties with the Jewish State:

TEL AVIV, Oct. 18 (Xinhua) -- Chinese Film Week opened in the Israeli port city of Tel Aviv on Sunday night with a film named "The Park" serving as the opening film.

Addressing the opening ceremony, Chinese Ambassador to Israel Zhao Jun said the Chinese film week is part of one of the biggest cultural events in Israel, noting that the culture event entitled "Experience China in Israel" is aimed to let more Israelis to know more about China.

Zhao introduced the history of China's film industry since its first motion film called "Conquering the Dream Mountain" in 1905, saying that "During the past century, Chinese film industry has developed into a complete industry."

"The cultural exchanges in the arena of film between China and Israel are increasing in the recent years," he said, adding that an Israeli film week with seven films were held in Beijing and Shanghai respectively in 2007 and last year a Chinese film week with 10 feature films were held in Israel.

"By seeing these seven films during the festival, you will have a better idea of the life and mentality of the ordinary Chinese people, and also the technical skills and conducting abilities of the Chinese film industry at present," he said.

The opening film "Park," which was produced in 2007, tells the story of an old-fashioned father and a modern daughter who can't stop hurting each other though they love each other deeply.

Other films include "A Battle of Wits," "You and Me," "A World Without thieves" and "The Silent Holy Stones."

Jointly held by the State Council Information Office of China and Israeli Foreign Ministry, the "Experience China in Israel" event is dedicated to the 60th anniversary of the founding of the People's Republic of China and the 17th anniversary of the establishment of diplomatic relations between China and Israel.

Happy Diwali!

From Wikipedia::

Diwali or Dīpāvali[1] (Sanskrit: दीपावलि: a row of lamps[2]) is a significant festival in Hinduism, Buddhism, Sikhism, and Jainism, and an official holiday in India.[3] Adherents of these religions celebrate Diwali as the Festival of Lights. They light diyas—cotton string wicks inserted in small clay pots filled with oil—to signify victory of good over the evil within an individual.

China v West in Guinea Violence?

From AFP:

BEIJING — China on Friday denied involvement with a large mining and oil deal in Guinea following accusations it amounted to supporting the west African country's military junta.

Guinea's Mining Minister Mahmoud Thiam told AFP Thursday the country's junta-backed government had signed the seven-billion-dollar (4.5-billion-euro) deal with the China International Fund (CIF) and Sonangol, an Angolan partner.

China International Fund is a China-linked investment company registered in Hong Kong.

"The China International Fund is an international company registered in Hong Kong and its investment in Guinea is purely its own endeavour," foreign ministry spokesman Ma Zhaoxu said in a statement on the ministry's website.

"The activities of this company have nothing to do with the Chinese government. China's government has no knowledge of the specifics of this venture."

The deal comes as Guinea's military rulers face increasing criticism after troops opened fire on anti-junta protesters on September 28, killing at least 150 people, according to rights groups.

About 1,200 people were injured and many women were raped by soldiers, rights groups said.

The military government, which says 56 people died, has denied responsibility.

China has expanded trade ties with Africa, where it seeks to tap into the continent's mineral and energy resources to feed its economic growth.

Hollywood by the Syr Darya

According to Ferghana.Ru, the film industry in Uzbekistan has revived after its post-Soviet collapse:

According to the 2008 statistics of UzbekKino, the state agency overseeing the Uzbek film industry, there are close to fifty private film studios in the country. In 2008 they produced 48 films, compared with 30 in 2006, 20 in 2005, and a dozen produced between 1991 and 2000.

Uzbek TV soap operas modeled after Latin American and Korean ones are also becoming popular across Uzbekistan. In November 2008, Uzbek filmmakers instituted an annual ceremony to award best films and actors. The current trend marks a stark contrast to the early 1990s, a period when the Uzbek film industry was on the verge of collapse as lavish Soviet state subsidies abruptly ended.

Most Uzbek films rely on low budgets and heart wrenching plots to attract viewers. The 2005 box-office hit, "An American Groom," fits this genre. A young Uzbek-American visits his grandfather’s village in a remote part of Uzbekistan only to fall in love with an Uzbek girl from a conservative family. The girl rejects his charms and refuses to marry him. The American wins her over only after he masters nuances of Uzbek traditions and his affluent grandfather generously gifts one million dollars to her family.

“Super Kelinchak,” (Super Daughter-in-Law), a 2008 box office hit, tells the story of a posh city woman who falls for and marries a man from a family where conservative values run strong and wives are subordinated to their in-laws. In the course of the ensuing power struggle with her feisty mother-in-law, the city woman learns how to wear traditional clothes, milk cows and respect family traditions.

Sobirjon Rahimov, an assistant film producer based in Tashkent, told Ferghana.ru that film directors often pay out-of-pocket to produce such movies. “It costs about 30 to 50 thousand [US] dollars to make [a film], but the return can be three time bigger.” According to Rahimov, it takes less then three months to complete a film in Uzbekistan.

Daniel Pipes on the Council on American-Islamic Relations

Daniel Pipes writes about the release of a potentially explosive new expose. An excerpt:

The Council on American-Islamic Relations has, since its founding in 1994, served as the Islamist movement in North America's most high-profile, belligerent, manipulative, and aggressive agency. From its headquarters in Washington, D.C., CAIR also sets the agenda and tone for the entire Wahhabi lobby.

A substantial body of criticism about CAIR exists, some of by me, but until now, the group's smash-mouths and extremists have managed to survive all revelations about its record. The publication today of Muslim Mafia: Inside the Secret Underwold that's Conspiring to Islamize America may, however, change the equation.

Written by P. David Gaubatz and Paul Sperry, the investigation is based largely on the undercover work of Gaubatz's son Chris who spent six months as an intern at CAIR's D.C. headquarters in 2008. In that capacity, he acquired 12,000 pages of documentation and took 300 hours of video.

Chris Gaubatz's information reveals much that the secretive CAIR wants hidden, including its strategy, finances, membership, and internal disputes, thereby exposing its shady and possibly illegal methods. As the book contains too much new information to summarize in small compass, I shall focus here on one dimension – the organization's inner workings, where the data shows that CAIR's claims amount to crude deceptions.

CAIR Executive Director Nihad Awad and undercover intern Chris Gaubatz at CAIR's national headquarters in 2008.

Claim 1: According to Ibrahim Hooper, the organization's communications director, "CAIR has some 50,000 members." Fact: An internal memo prepared in June 2007 for a staff meeting reports that the organization had precisely 5,133 members, about one-tenth Hooper's exaggerated number.

Claim 2: CAIR is a "grass-roots organization" that depends financially on its members. Fact: According to an internal 2002 board meeting report, the organization received $33,000 in dues and $1,071,000 in donations. In other words, under 3 percent of its income derives from membership dues.

Claim 3: CAIR receives "no support from any overseas group or government." Fact: Gaubatz and Sperry report that 60 percent of CAIR's income derives from two dozen donors, most of whom live outside the United States. Specifically: $978,000 from the ruler of Dubai in 2002 in exchange for controlling interest in its headquarters property on New Jersey Avenue, a $500,000 gift from Saudi prince al-Waleed bin Talal and $112,000 in 2007 from Saudi prince Abdullah bin Mosa'ad, at least $300,000 from the Saudi-based Organization of the Islamic Conference, $250,000 from the Islamic Development Bank, and at least $17,000 from the American office of the Saudi-based International Islamic Relief Organization.

Claim 4: CAIR is an independent, domestic human rights group "similar to a Muslim NAACP." Fact: In a desperate search for funding, CAIR has offered its services to forward the commercial interests of foreign firms. This came to light in the aftermath of Dubai Ports World's failed effort to purchase six U.S. harbors in 2006 due to security fears. In response, CAIR's chairman traveled to Dubai and suggested to businessmen there: "Do not think about your contributions [to CAIR] as donations. Think about it from the perspective of rate of return. The investment of $50 million will give you billions of dollars in return for fifty years."

Combining these four facts reveals a CAIR quite unlike its public image. Almost bereft of members and dues, it sustains itself by selling its services to the Saudi and U.A.E. governments by doing their ideological and financial bidding...

Afghan Ambassador Backs Gen. McChrystal

Transcript from The Newshour with Jim Lehrer. Ambassador Said Jawad spoke with Margaret Warner:

MARGARET WARNER: Do you disagree with the assessment that General McChrystal did, for instance, about the whole security situation, that it was serious and that it was deteriorating?

AMBASSADOR SAID JAWAD: Overall, in the country, yes, it is. In the south, we are facing serious security challenges. That's why we welcome General McChrystal's assessments, and think that additional troops are needed in order to provide space and time for the Afghan security forces to be trained and equipped.

Additional troops are needed. The U.S. engagement should be long-term in Afghanistan, does not mean necessarily military engagement.

MARGARET WARNER: All right, let's get into that more, because, of course, this takes place as the president and his administration are doing this intensive review of strategy and troops. So, what would Afghanistan like to see come out of this reassessment?

AMBASSADOR SAID JAWAD: A clear commitment to success in Afghanistan. Additional troops are needed. The U.S. engagement should be long-term in Afghanistan, does not mean necessarily military engagement.

We would like to see more investment being made and build the capacity of the Afghan security forces, Afghan police force, and the government to take more responsibility on this fight.

MARGARET WARNER: And how many more troops?

AMBASSADOR SAID JAWAD: It depends on how intense the pressure on Afghanistan is.

Today's bombing shows that -- that, really, it's a -- terrorism is a regional issue. And unless we get the cooperation of all the parties involved in the neighborhood, we will need stronger presence of the United States. We will need 30,000 to 40,000 additional troops on the short term.

MARGARET WARNER: And you said for an expended period, you want to see a commitment. What are we talking about here?

AMBASSADOR SAID JAWAD: A commitment to build the Afghan security forces to a strength of 250,000, helping the Afghan government to extend its capability to provide service and protection to the Afghan citizen, and for the -- Afghanistan to serve as a partner in a volatile region of the world, where there are nuclear ambitions or there are a lot of threats from extremism, to have an Afghanistan that will serve for the cause of stability.

MARGARET WARNER: Now, if the U.S. were to do this, I mean, you know the strength of the Afghan security forces now. You know all of the problems. What do you think we're talking about in terms of years, in terms of at an extended -- at a -- at a beefed-up troop strength, say 100,000 troops?

AMBASSADOR SAID JAWAD: It really depends how much we invest up front. It is truly an investment in building the capacity.

If we continue to do a duct tape approach and under-resource the mission and does not provide the investment necessary, then you will be there for long haul. But if better investment has been made to build the capacity up front, then that pressure will be relieved on you.

There is no shortage of courage or manpower in Afghanistan. There's shortage of skills on the part of our army and police force. And that skill could be created if there is more intense investment.

I think we should not allow a sense of -- of retreat or defeat to emerge from our mission in Afghanistan.

MARGARET WARNER: Now, you know -- as you know, there's another set of voices inside the administration -- reported -- reportedly, Vice President Biden is among them -- saying really that the U.S. ought to rethink the whole focus here, not try to focus on building up a strong Afghan central government, which they say Afghanistan's never had, stop trying to fight Taliban insurgents all over the country, and focus instead on al Qaeda and its immediate allies, targeting those kinds of terrorists, if they're in Afghanistan or if they try to return. Now, what do you think of that notion? Does that make sense to you?

AMBASSADOR SAID JAWAD: First, it will send a message of defeat of the United States in undertaking in Afghanistan.

And this message will further embolden the terrorists and extremists, not only Afghanistan, but also in the region. Targeting al Qaeda targets through drones and -- and cruise missile has been done in Afghanistan. After the bombing of the U.S. embassies in Africa, similar actions were taken.

But it put al Qaeda and Taliban even more closer together. There is close correlation, and there's close relation between Taliban and al Qaeda, as evidenced from the bombing of today. Why would actually -- if it's a Taliban action, why would not they target our ministry of interior, which is just across the street, and target an international target that shows the international connections of the Taliban and al Qaeda and how closely they work with each other?

I think we should not allow a sense of -- of retreat or defeat to emerge from our mission in Afghanistan.

MARGARET WARNER: Now, as you well know, also underlying this reassessment is a concern here that the Karzai government really isn't legitimate. It isn't seen as legitimate by its own people, that it's -- it's widely seen as corrupt, and that the election was considered to be riddled with fraud.

What is your response to that? How serious of an Achilles' heel is this for the case you're trying to make?

AMBASSADOR SAID JAWAD: Well, first, the issue of the legitimacy of the Afghan government should be determined by Afghan people, not by a foreign capital or a foreign individual.

A lot of preparation went into the election process in Afghanistan. It was not a perfect election and a perfect condition. There were irregularities. There were potential frauds. But there's also processes in place to look after that.

And, if the majority of the Afghans elect their president, that president is a lot more legitimate than having the president being appointed by a foreign individual or a foreign capital.

Millions of people went out to vote. On the day of the election, rockets were coming in. People were killed. People were -- fingers were cut to go out and participate in the election process.

MARGARET WARNER: But nobody's talking about having a foreign capital appoint the president of Afghanistan, but they -- you said if a president is legitimately elected by the people. But that's the big if, isn't it?

AMBASSADOR SAID JAWAD: Millions of people went out to vote. On the day of the election, rockets were coming in. People were killed. People were -- fingers were cut to go out and participate in the election process.

So, considering all these challenges -- and more than 6,000 observers, both Afghan and international, participated in this process -- considering all these constraints, in the history of Afghanistan, and comparing to the elections in the region, in other countries, this is the best that could happen in Afghanistan.

If we could improve the -- the security situation, we would have had better outcome of -- sure, that's the target that you are working for.

MARGARET WARNER: So, when do you expect this recount process to be concluded?

AMBASSADOR SAID JAWAD: Early next week, hopefully.

MARGARET WARNER: And if the conclusion is that President Karzai falls below 50 percent, is he prepared to go through a completely new election?

AMBASSADOR SAID JAWAD: This is a requirement by the Afghan constitution. The president is completely ready to comply with what the Afghan laws and constitution require, of course.

MARGARET WARNER: And, on the other hand, if the recount certifies that he did get over 50 percent, then the question here is, what is President Karzai prepared to say and do in a concrete sense to address these concerns about widespread corruption in the government?

AMBASSADOR SAID JAWAD: We have heard clearly the message of our friends, both in the U.S. Congress and the U.S. administration and Europe.

President Karzai is planning on having two clear compact if he is elected, one compact with the Afghan people indicating what he's going to do in the next five years, and a second compact with the international community, especially the United States, indicating the mutual expectations that exist between the Afghan government and the international partner, especially United States.

MARGARET WARNER: So, what would you say to members of Congress, particularly a lot of Democrats, who are reflecting the concerns of their constituents?

I will just quote one, Jane Harman...

AMBASSADOR SAID JAWAD: Right.

MARGARET WARNER: ... who's consider add hawk in the Democratic Party.

And she said, "How can we ask our troops to risk their lives in Afghanistan while Mr. Karzai cavorts with warlords and drug smugglers?"

Now, what do you say to that kind of deep suspicion of this government and -- and concern that -- that their constituents don't want to waste or spend young American lives on that kind of government?

AMBASSADOR SAID JAWAD: Young American lives are -- are served in Afghanistan for a very noble cause, of making Afghanistan, the United States a safer place.

I think members of Congress, friends of Afghanistan should work harder to shape the public opinion. It's a hard sacrifice when your son and daughter is fighting in Afghanistan. We're very grateful for that. We appreciate this very much.

But now to -- to add to this fuel, and not to support the government of Afghanistan, or find excuses, that is not helpful, neither for the mission of the United States in Afghanistan, nor helpful for those soldiers who are fighting so bravely to make Afghanistan, the United States, and the world a safer place for all of us.

We have to work more actively to strengthen our partnership and shape the public opinion.