Socio Economic Network

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Sunday, July 12, 2009

Barack Obama's Address to Ghanaian Parliament

The White House (Washington, DC)

11 July 2009

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Accra — The following are the remarks by the President of the United States to the Ghanaian Parliament at the Accra International Conference Center as delivered and released by the White House.

12:40 P.M. GMT

THE PRESIDENT: (Trumpet plays.) I like this. Thank you. Thank you. I think Congress needs one of those horns. (Laughter.) That sounds pretty good. Sounds like Louis Armstrong back there. (Laughter.)

Good afternoon, everybody. It is a great honor for me to be in Accra and to speak to the representatives of the people of Ghana. (Applause.) I am deeply grateful for the welcome that I've received, as are Michelle and Malia and Sasha Obama. Ghana's history is rich, the ties between our two countries are strong, and I am proud that this is my first visit to sub-Saharan Africa as President of the United States of America. (Applause.)

I want to thank Madam Speaker and all the members of the House of Representatives for hosting us today. I want to thank President Mills for his outstanding leadership. To the former Presidents -- Jerry Rawlings, former President Kufuor -- Vice President, Chief Justice -- thanks to all of you for your extraordinary hospitality and the wonderful institutions that you've built here in Ghana.
I'm speaking to you at the end of a long trip. I began in Russia for a summit between two great powers. I traveled to Italy for a meeting of the world's leading economies. And I've come here to Ghana for a simple reason: The 21st century will be shaped by what happens not just in Rome or Moscow or Washington, but by what happens in Accra, as well. (Applause.)

This is the simple truth of a time when the boundaries between people are overwhelmed by our connections. Your prosperity can expand America's prosperity. Your health and security can contribute to the world's health and security. And the strength of your democracy can help advance human rights for people everywhere.

So I do not see the countries and peoples of Africa as a world apart; I see Africa as a fundamental part of our interconnected world -- (applause) -- as partners with America on behalf of the future we want for all of our children. That partnership must be grounded in mutual responsibility and mutual respect. And that is what I want to speak with you about today.
We must start from the simple premise that Africa's future is up to Africans.

I say this knowing full well the tragic past that has sometimes haunted this part of the world. After all, I have the blood of Africa within me, and my family's -- (applause) -- my family's own story encompasses both the tragedies and triumphs of the larger African story.

Some of you know my grandfather was a cook for the British in Kenya, and though he was a respected elder in his village, his employers called him "boy" for much of his life. He was on the periphery of Kenya's liberation struggles, but he was still imprisoned briefly during repressive times. In his life, colonialism wasn't simply the creation of unnatural borders or unfair terms of trade -- it was something experienced personally, day after day, year after year.

My father grew up herding goats in a tiny village, an impossible distance away from the American universities where he would come to get an education. He came of age at a moment of extraordinary promise for Africa. The struggles of his own father's generation were giving birth to new nations, beginning right here in Ghana. (Applause.) Africans were educating and asserting themselves in new ways, and history was on the move.

But despite the progress that has been made -- and there has been considerable progress in many parts of Africa -- we also know that much of that promise has yet to be fulfilled. Countries like Kenya had a per capita economy larger than South Korea's when I was born. They have badly been outpaced. Disease and conflict have ravaged parts of the African continent.

In many places, the hope of my father's generation gave way to cynicism, even despair. Now, it's easy to point fingers and to pin the blame of these problems on others. Yes, a colonial map that made little sense helped to breed conflict. The West has often approached Africa as a patron or a source of resources rather than a partner. But the West is not responsible for the destruction of the Zimbabwean economy over the last decade, or wars in which children are enlisted as combatants. In my father's life, it was partly tribalism and patronage and nepotism in an independent Kenya that for a long stretch derailed his career, and we know that this kind of corruption is still a daily fact of life for far too many.

Now, we know that's also not the whole story. Here in Ghana, you show us a face of Africa that is too often overlooked by a world that sees only tragedy or a need for charity. The people of Ghana have worked hard to put democracy on a firmer footing, with repeated peaceful transfers of power even in the wake of closely contested elections. (Applause.) And by the way, can I say that for that the minority deserves as much credit as the majority. (Applause.) And with improved governance and an emerging civil society, Ghana's economy has shown impressive rates of growth. (Applause.)

This progress may lack the drama of 20th century liberation struggles, but make no mistake: It will ultimately be more significant. For just as it is important to emerge from the control of other nations, it is even more important to build one's own nation.

So I believe that this moment is just as promising for Ghana and for Africa as the moment when my father came of age and new nations were being born. This is a new moment of great promise. Only this time, we've learned that it will not be giants like Nkrumah and Kenyatta who will determine Africa's future. Instead, it will be you -- the men and women in Ghana's parliament -- (applause) -- the people you represent. It will be the young people brimming with talent and energy and hope who can claim the future that so many in previous generations never realized.

Now, to realize that promise, we must first recognize the fundamental truth that you have given life to in Ghana: Development depends on good governance. (Applause.) That is the ingredient which has been missing in far too many places, for far too long. That's the change that can unlock Africa's potential. And that is a responsibility that can only be met by Africans.

As for America and the West, our commitment must be measured by more than just the dollars we spend. I've pledged substantial increases in our foreign assistance, which is in Africa's interests and America's interests. But the true sign of success is not whether we are a source of perpetual aid that helps people scrape by -- it's whether we are partners in building the capacity for transformational change. (Applause.)

This mutual responsibility must be the foundation of our partnership. And today, I'll focus on four areas that are critical to the future of Africa and the entire developing world: democracy, opportunity, health, and the peaceful resolution of conflict.

First, we must support strong and sustainable democratic governments. (Applause.)
As I said in Cairo, each nation gives life to democracy in its own way, and in line with its own traditions. But history offers a clear verdict: Governments that respect the will of their own people, that govern by consent and not coercion, are more prosperous, they are more stable, and more successful than governments that do not.

This is about more than just holding elections. It's also about what happens between elections. (Applause.) Repression can take many forms, and too many nations, even those that have elections, are plagued by problems that condemn their people to poverty. No country is going to create wealth if its leaders exploit the economy to enrich themselves -- (applause) -- or if police -- if police can be bought off by drug traffickers. (Applause.) No business wants to invest in a place where the government skims 20 percent off the top -- (applause) -- or the head of the Port Authority is corrupt. No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery. (Applause.) That is not democracy, that is tyranny, even if occasionally you sprinkle an election in there. And now is the time for that style of governance to end. (Applause.)

In the 21st century, capable, reliable, and transparent institutions are the key to success -- strong parliaments; honest police forces; independent judges -- (applause); an independent press; a vibrant private sector; a civil society. (Applause.) Those are the things that give life to democracy, because that is what matters in people's everyday lives.

Now, time and again, Ghanaians have chosen constitutional rule over autocracy, and shown a democratic spirit that allows the energy of your people to break through. (Applause.) We see that in leaders who accept defeat graciously -- the fact that President Mills' opponents were standing beside him last night to greet me when I came off the plane spoke volumes about Ghana -- (applause); victors who resist calls to wield power against the opposition in unfair ways. We see that spirit in courageous journalists like Anas Aremeyaw Anas, who risked his life to report the truth. We see it in police like Patience Quaye, who helped prosecute the first human trafficker in Ghana. (Applause.) We see it in the young people who are speaking up against patronage, and participating in the political process.

Across Africa, we've seen countless examples of people taking control of their destiny, and making change from the bottom up. We saw it in Kenya, where civil society and business came together to help stop post-election violence. We saw it in South Africa, where over three-quarters of the country voted in the recent election -- the fourth since the end of Apartheid. We saw it in Zimbabwe, where the Election Support Network braved brutal repression to stand up for the principle that a person's vote is their sacred right.

Now, make no mistake: History is on the side of these brave Africans, not with those who use coups or change constitutions to stay in power. (Applause.) Africa doesn't need strongmen, it needs strong institutions. (Applause.)

Now, America will not seek to impose any system of government on any other nation. The essential truth of democracy is that each nation determines its own destiny. But what America will do is increase assistance for responsible individuals and responsible institutions, with a focus on supporting good governance -- on parliaments, which check abuses of power and ensure that opposition voices are heard -- (applause); on the rule of law, which ensures the equal administration of justice; on civic participation, so that young people get involved; and on concrete solutions to corruption like forensic accounting and automating services -- (applause) -- strengthening hotlines, protecting whistle-blowers to advance transparency and accountability.

And we provide this support. I have directed my administration to give greater attention to corruption in our human rights reports. People everywhere should have the right to start a business or get an education without paying a bribe. (Applause.) We have a responsibility to support those who act responsibly and to isolate those who don't, and that is exactly what America will do.

Now, this leads directly to our second area of partnership: supporting development that provides opportunity for more people.

With better governance, I have no doubt that Africa holds the promise of a broader base of prosperity. Witness the extraordinary success of Africans in my country, America. They're doing very well. So they've got the talent, they've got the entrepreneurial spirit. The question is, how do we make sure that they're succeeding here in their home countries? The continent is rich in natural resources. And from cell phone entrepreneurs to small farmers, Africans have shown the capacity and commitment to create their own opportunities. But old habits must also be broken. Dependence on commodities -- or a single export -- has a tendency to concentrate wealth in the hands of the few, and leaves people too vulnerable to downturns.
So in Ghana, for instance, oil brings great opportunities, and you have been very responsible in preparing for new revenue. But as so many Ghanaians know, oil cannot simply become the new cocoa. From South Korea to Singapore, history shows that countries thrive when they invest in their people and in their infrastructure -- (applause); when they promote multiple export industries, develop a skilled workforce, and create space for small and medium-sized businesses that create jobs.

As Africans reach for this promise, America will be more responsible in extending our hand. By cutting costs that go to Western consultants and administration, we want to put more resources in the hands of those who need it, while training people to do more for themselves. (Applause.) That's why our $3.5 billion food security initiative is focused on new methods and technologies for farmers -- not simply sending American producers or goods to Africa. Aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it's no longer needed. I want to see Ghanaians not only self-sufficient in food, I want to see you exporting food to other countries and earning money. You can do that. (Applause.)

Now, America can also do more to promote trade and investment. Wealthy nations must open our doors to goods and services from Africa in a meaningful way. That will be a commitment of my administration. And where there is good governance, we can broaden prosperity through public-private partnerships that invest in better roads and electricity; capacity-building that trains people to grow a business; financial services that reach not just the cities but also the poor and rural areas. This is also in our own interests -- for if people are lifted out of poverty and wealth is created in Africa, guess what? New markets will open up for our own goods. So it's good for both.

One area that holds out both undeniable peril and extraordinary promise is energy. Africa gives off less greenhouse gas than any other part of the world, but it is the most threatened by climate change. A warming planet will spread disease, shrink water resources, and deplete crops, creating conditions that produce more famine and more conflict. All of us -- particularly the developed world -- have a responsibility to slow these trends -- through mitigation, and by changing the way that we use energy. But we can also work with Africans to turn this crisis into opportunity.

Together, we can partner on behalf of our planet and prosperity, and help countries increase access to power while skipping -- leapfrogging the dirtier phase of development. Think about it: Across Africa, there is bountiful wind and solar power; geothermal energy and biofuels. From the Rift Valley to the North African deserts; from the Western coasts to South Africa's crops -- Africa's boundless natural gifts can generate its own power, while exporting profitable, clean energy abroad.

These steps are about more than growth numbers on a balance sheet. They're about whether a young person with an education can get a job that supports a family; a farmer can transfer their goods to market; an entrepreneur with a good idea can start a business. It's about the dignity of work; it's about the opportunity that must exist for Africans in the 21st century.

Just as governance is vital to opportunity, it's also critical to the third area I want to talk about: strengthening public health.

In recent years, enormous progress has been made in parts of Africa. Far more people are living productively with HIV/AIDS, and getting the drugs they need. I just saw a wonderful clinic and hospital that is focused particularly on maternal health. But too many still die from diseases that shouldn't kill them. When children are being killed because of a mosquito bite, and mothers are dying in childbirth, then we know that more progress must be made.

Yet because of incentives -- often provided by donor nations -- many African doctors and nurses go overseas, or work for programs that focus on a single disease. And this creates gaps in primary care and basic prevention. Meanwhile, individual Africans also have to make responsible choices that prevent the spread of disease, while promoting public health in their communities and countries.

So across Africa, we see examples of people tackling these problems. In Nigeria, an Interfaith effort of Christians and Muslims has set an example of cooperation to confront malaria. Here in Ghana and across Africa, we see innovative ideas for filling gaps in care -- for instance, through E-Health initiatives that allow doctors in big cities to support those in small towns.

America will support these efforts through a comprehensive, global health strategy, because in the 21st century, we are called to act by our conscience but also by our common interest, because when a child dies of a preventable disease in Accra, that diminishes us everywhere. And when disease goes unchecked in any corner of the world, we know that it can spread across oceans and continents.

And that's why my administration has committed $63 billion to meet these challenges -- $63 billion. (Applause.) Building on the strong efforts of President Bush, we will carry forward the fight against HIV/AIDS. We will pursue the goal of ending deaths from malaria and tuberculosis, and we will work to eradicate polio. (Applause.) We will fight -- we will fight neglected tropical disease. And we won't confront illnesses in isolation -- we will invest in public health systems that promote wellness and focus on the health of mothers and children. (Applause.)

Now, as we partner on behalf of a healthier future, we must also stop the destruction that comes not from illness, but from human beings -- and so the final area that I will address is conflict. Let me be clear: Africa is not the crude caricature of a continent at perpetual war.

But if we are honest, for far too many Africans, conflict is a part of life, as constant as the sun. There are wars over land and wars over resources. And it is still far too easy for those without conscience to manipulate whole communities into fighting among faiths and tribes.

These conflicts are a millstone around Africa's neck. Now, we all have many identities -- of tribe and ethnicity; of religion and nationality. But defining oneself in opposition to someone who belongs to a different tribe, or who worships a different prophet, has no place in the 21st century. (Applause.) Africa's diversity should be a source of strength, not a cause for division. We are all God's children. We all share common aspirations -- to live in peace and security; to access education and opportunity; to love our families and our communities and our faith. That is our common humanity.

That is why we must stand up to inhumanity in our midst. It is never justified -- never justifiable to target innocents in the name of ideology. (Applause.) It is the death sentence of a society to force children to kill in wars. It is the ultimate mark of criminality and cowardice to condemn women to relentless and systemic rape. We must bear witness to the value of every child in Darfur and the dignity of every woman in the Congo. No faith or culture should condone the outrages against them. And all of us must strive for the peace and security necessary for progress.

Africans are standing up for this future. Here, too, in Ghana we are seeing you help point the way forward. Ghanaians should take pride in your contributions to peacekeeping from Congo to Liberia to Lebanon -- (applause) -- and your efforts to resist the scourge of the drug trade. (Applause.) We welcome the steps that are being taken by organizations like the African Union and ECOWAS to better resolve conflicts, to keep the peace, and support those in need. And we encourage the vision of a strong, regional security architecture that can bring effective, transnational forces to bear when needed.

America has a responsibility to work with you as a partner to advance this vision, not just with words, but with support that strengthens African capacity. When there's a genocide in Darfur or terrorists in Somalia, these are not simply African problems -- they are global security challenges, and they demand a global response.

And that's why we stand ready to partner through diplomacy and technical assistance and logistical support, and we will stand behind efforts to hold war criminals accountable. And let me be clear: Our Africa Command is focused not on establishing a foothold in the continent, but on confronting these common challenges to advance the security of America, Africa, and the world. (Applause.)

In Moscow, I spoke of the need for an international system where the universal rights of human beings are respected, and violations of those rights are opposed. And that must include a commitment to support those who resolve conflicts peacefully, to sanction and stop those who don't, and to help those who have suffered. But ultimately, it will be vibrant democracies like Botswana and Ghana which roll back the causes of conflict and advance the frontiers of peace and prosperity.

As I said earlier, Africa's future is up to Africans. The people of Africa are ready to claim that future. And in my country, African Americans -- including so many recent immigrants -- have thrived in every sector of society. We've done so despite a difficult past, and we've drawn strength from our African heritage. With strong institutions and a strong will, I know that Africans can live their dreams in Nairobi and Lagos, Kigali, Kinshasa, Harare, and right here in Accra. (Applause.)

You know, 52 years ago, the eyes of the world were on Ghana. And a young preacher named Martin Luther King traveled here, to Accra, to watch the Union Jack come down and the Ghanaian flag go up. This was before the march on Washington or the success of the civil rights movement in my country. Dr. King was asked how he felt while watching the birth of a nation. And he said: "It renews my conviction in the ultimate triumph of justice."

Now that triumph must be won once more, and it must be won by you. (Applause.) And I am particularly speaking to the young people all across Africa and right here in Ghana. In places like Ghana, young people make up over half of the population.

And here is what you must know: The world will be what you make of it. You have the power to hold your leaders accountable, and to build institutions that serve the people. You can serve in your communities, and harness your energy and education to create new wealth and build new connections to the world. You can conquer disease, and end conflicts, and make change from the bottom up. You can do that. Yes you can -- (applause) -- because in this moment, history is on the move.

But these things can only be done if all of you take responsibility for your future. And it won't be easy. It will take time and effort. There will be suffering and setbacks. But I can promise you this: America will be with you every step of the way -- as a partner, as a friend. (Applause.) Opportunity won't come from any other place, though. It must come from the decisions that all of you make, the things that you do, the hope that you hold in your heart.

Ghana, freedom is your inheritance. Now, it is your responsibility to build upon freedom's foundation. And if you do, we will look back years from now to places like Accra and say this was the time when the promise was realized; this was the moment when prosperity was forged, when pain was overcome, and a new era of progress began. This can be the time when we witness the triumph of justice once more. Yes we can. Thank you very much. God bless you. Thank you. (Applause.)

END - 1:10 P.M. GMT

Sunday, June 28, 2009

The Constituency for Africa Having Conversation with Ambassador Jonnie Carson

US Official Sheds Light on Possible Upcoming Obama Africa Policy

By James Butty
24 June 2009

The new U.S. Assistant Secretary of State for African Affairs said the Obama administration plans to invest substantial amounts of money over the coming years in agricultural development to promote food security in Africa.

Ambassador Johnnnie Carson spoke Monday in Washington to a constituency of Africa advocacy groups.

He outlined what is likely to be the Obama administration's Africa policies for the next four years.

Carson told the African American Unity Caucus that over the next four years the Obama administration will focus on four key issues as part of its Africa policy.

These, he said, include promoting and strengthening democratic institutions and the rule of law, preventing and resolving conflicts, encouraging sustained growth and working with African countries to address what he called the new and old global challenges.

Ambassador Carson praised Africa for the progress the continent has made over the last 15 years in strengthening democratic institutions. He referenced recent successful elections in Ghana, South Africa and Malawi.

But he said challenges still remain as evident by recent electoral problems in Zimbabwe and Kenya. He said Washington will do all it can to help strengthen democratic institutions.

"We constantly have to encourage those in civil society to be the voice and conscience of their countries, and we have to promote constitutional democratic governments, strong court systems, strong legislatures, regular elections, free media, and religious tolerance," he said.

Carson praised the African Union for the role it played in resolving the conflicts in Liberia, Sierra Leone and Angola.

He said challenges also remain as evident by the continued conflicts in Somalia, eastern Congo, and Sudan.

"We have to do as much as we possibly can to help resolve those conflicts," Carson said.

Carson said President Obama has taken a keen interest in resolving the conflict by his appointment of General Scott Gration as special envoy on Sudan.

He said the Obama administration plans to focus on food security and agricultural development in Africa.

"The administration plans over a number of years to put a substantial amount of money into agricultural development to do two things. One is to lift people out of poverty and the other one is to help grow…agriculture," Carson said.

On what he called the new and old global challenges, Ambassador Carson said the Obama administration plans to work with African countries to address the issues of climate change and illicit drug trafficking

Carson said President Obama will elaborate on some of these topics when the president visits Ghana on July this year, the earliest visit to Africa by a sitting American president.

Thursday, March 26, 2009

US Arrests Anglo Leasing Suspect

US arrests Anglo Leasing suspect

By BENJAMIN MUINDIPosted Wednesday, March 25 2009 at 22:08
The United States has arrested a key suspect in the Anglo-Leasing scandal in which Kenya lost billons of taxpayers’ money through fraudulent transactions.
A 43-year-old American, Bradley Birkenfeld may be a key lead to the controversial dealings in which the Kenyan government paid some Sh56 billion in promissory notes to bogus companies. Mr Birkenfeld, a banker and a financial advisor, has been working for UBS bank and is indicted with crafting tax-evasion schemes.
The Neue Zurcher Zeitung, a leading Swiss newspaper, has revealed that Mr Birkenfeld is intimately connected with Anglo Leasing and the Deepak Kamani brothers, alleged architects of the scam.
He signed one of the 18 fraudulent Anglo Leasing contracts on behalf of Info Talent Limited and his private residence, 20 Cours de Rive in Geneva, was listed in a second credit contract as the offices of Midland Finance & Securities Limited.
“This is a man the Kenyan government should be dying to interview to get information on Anglo Leasing,” said Mars Group director Mwalimu Mati, who broke the news on Mr Birkenfeld.
Midlands Finance has since sued the government for repayments of the never-received credit and even succeeded in blocking the Kenya Anti Corruption Commission from using a report by Price WaterHouse Coopers to prove the fraud.
“Why it was signed by the permanent secretary on the authority of the then Finance minister David Mwiraria is the enduring mystery of Anglo Leasing, and Bradley Birkenfeld may have the answer,” said Mr Mati.
Bogus financier
In November 2003, another bogus financier, Info Talent obtained 58.688 million Euros in promissory notes from the Treasury. In 2004, the company mysteriously refunded Sh509 million after Anglo Leasing was exposed by Mr Maoka Maore in Parliament in April of the same year.
That Info Talent fraud was proved by the Parliamentary Accounts Committee investigation of 2006, headed by current minister for Finance Uhuru Kenyatta.
Mr Birkenfeld has pledged to enter a plea bargain where he will volunteer information in return for his release.
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TaxesBanker Charged With Helping Billionaire Dodge TaxesJanet Novack, 05.13.08, 6:02 PM ET

More Business In The Beltway Columns
Business In The Beltway";
A federal judge in Southern Florida today unsealed an indictment charging two foreign bankers, one a former private banker for UBS AG, with defrauding the U.S. by helping billionaire Orange County, Calf., real estate developer Igor M. Olenicoff evade U.S. taxes on $200 million hidden in Swiss and Liechtenstein bank accounts.
One of the those indicted, Bradley Birkenfeld, is a 43-year-old U.S. citizen who, the indictment says, worked from 2001 to 2006 in the private banking division of a Swiss bank, which "also owns and operates banks, investment banks and stock brokerage businesses throughout the United States." Federal election records show a Bradley Birkenfeld contributed to candidates during that period, listing his employer as UBS (nyse: UBS - news - people ) and his address as Geneva, Switzerland.
UBS disclosed recently that the U.S. Department of Justice was investigating whether it had helped wealthy Americans evade U.S. taxes on offshore accounts. In addition, earlier this month a senior UBS employee was briefly detained by U.S. authorities as a witness in that investigation.
In a statement today, UBS said it is "continuing to cooperate with this investigation" and that "in light of the pending investigation, it is not appropriate to comment on charges brought against a former UBS employee."
Separately, UBS is also being investigated by U.S. prosecutors for its past involvement in the U.S. tax shelter industry.
Birkenfeld was arraigned this morning in Fort Lauderdale and entered a plea of not guilty. He was released on a $100,000 secured bond, and a $2 million personal surety bond, surrendered his passport and is subject to electronic monitoring. The other defendant, Mario Staggl, 43, a Liechtenstein citizen and resident, remains at large, the government said.
In the indictment, brought by the U.S. Attorney for Southern Florida, Olenicoff, who Forbes estimates is worth $1.6 billion, is named as an "unindicted co-conspirator" and referred to as IO. Olenicoff settled with the government in December, by pleading guilty to one felony count of filing a false 2002 individual income tax return; paying $52 million in back taxes, interest and civil fraud penalties; and agreeing to bring all the money in his foreign accounts back to the U.S. On April 14, he was sentenced to two years probation. Olenicoff's use of offshore accounts, which was described in a story in Forbes in 2006 (see: " The Billionaire With The Empty Pockets"), dates back to the early 1990s.
Olenicoff's attorney, Edward M. Robbins Jr., declined comment, but the indictment left no doubt as to who the unnamed billionaire was, including among other things, details about the ownership of his 147-foot yacht.
The indictment notes that in 2001, Birkenfeld's employer entered into a Qualified Intermediary agreement with the U.S. That agreement required UBS to identify any customers who received U.S. source income that was reportable to the Internal Revenue Service and to report that income. As part of the process, UBS agreed to have customers fill out IRS form W-8BEN, which requires foreign beneficial owners of bank accounts to be identified---a departure from historical Swiss bank secrecy laws.
But Birkenfeld and Staggl, the indictment alleges, defrauded the IRS by falsifying Swiss bank documents and W-8BENs, and by setting up "nominee entities" to hide the true ownership of assets. Staggl, according to the indictment, was the owner of New Haven Trust Company Ltd., a Liechtenstein trustee of accounts used to hide Olenicoff's ownership of assets.
The indictment indicates Olenicoff wasn't Birkenfeld and Staggl's only wealthy client. According to the indictment, the men marketed to U.S. taxpayers the advantages of Swiss and Liechtenstein banks for attempting to evade U.S. income taxes, "claiming that Swiss and Liechtenstein bank secrecy was impenetrable.''
Wesley Snipes' Jailhouse Role
High-Tech Tax Help

US Arrests Anglo Leasing Suspect

Sunday, March 15, 2009

Kofi Annan named President of the OMCT Foundation

Kofi Annan named President of the Foundation...
Kofi Annan named President of the Foundation supporting the World Organization against Torture (OMCT)
Geneva, October 10, 2007: On October 4, 2007, Kofi Annan, former Secretary General of the United Nations, became the new President of the Foundation supporting the World Organization against Torture (OMCT). Kofi Annan has always demonstrated a strong commitment to human rights and has stated his total opposition to torture. In accepting to become the new President of the Foundation supporting OMCT, he expressed his wish to be actively involved in initiatives defending human rights.
Since its creation in 1986, OMCT has been engaged in fighting against torture, summary executions and all other cruel, inhuman or degrading treatment, through actions geared to prevention, information, denunciation and rehabilitation. To give a voice to victims, OMCT works with the SOS-Torture network, the largest international coalition of non-governmental organizations active in the protection of human rights, with 282 affiliated members in 92 countries. Thanks to this unique network, OMCT maintains permanent contact with the field and is immediately informed of any human rights violations. It then makes public the facts and denounces the perpetrators via its urgent interventions, disseminated to a large audience worldwide.
Each and every case is indeed unique and of crucial importance. As Kofi Annan emphasizes, “we must not forget that it always starts with mistreatment of one person, torture of one person, lack of respect of the rights of one individual”. These individual violations open the door to the escalation of abuses, which may lead to the unthinkable such as genocides and other large scale human rights violations.
Unfortunately this is even more relevant today, since we are facing what Kofi Annan calls “the erosion of respect for human rights and the norms that we all treasure”. He explains that, “An increasing number of governments tend to believe that there is a tradeoff between effective action against terrorism and security on the one hand, and human rights and individual civil liberties on the other. But no such tradeoff can be allowed”. Kofi Annan underlines the importance of “the power of people who are becoming increasingly aware of their rights, and this is one of the biggest weapons we have. Transparency, openness and debate about rights, and the social shifts brought about by technology and open communication are very powerful tools – and leaders are being forced to be responsive to them.”
It is in order to promote this movement, to contribute to the growth of public awareness and to encourage OMCT’s work in the fight against torture and other human rights abuses that Kofi Annan has accepted to become President of the Foundation supporting OMCT. He emphasizes that he wishes his role to be an active one. In particular, he will engage in raising the profile of OMCT and in fundraising to increase the Foundation’s capital with a view to enhancing OMCT’s capacity to protect and promote human rights around the world.

For additional information, please contact:Isabelle Vila, Tel: +4122 809 52 40, Email: iv@omct.orgVisit our website at http://www.omct.org/

OMCT International Secretariat
PO Box 218, rue du Vieux-BillardCH-1211
Geneva 8Switzerland
Phone: + 41 22 809 4939Fax: + 41 22 809 4929
omct@omct.org

http://www.omct.org/index.php?menuId=87&lang=eng&PHPSESSID=b824d6cd90736c9ae9de30b3c78f0712

Friday, March 13, 2009

JIENJOY - WITH AFRICAN LUO BENGA BEAT

Africa: AfDB to Increase Lending to U.S.$11 Billion

Africa: AfDB to Increase Lending to U.S. $11 Billion
Constance Ikokwu
13 March 2009

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Washington, DC — As discussions continue on ways to tackle the impact of the global financial crisis in Africa, the African Development Bank (AFDB) has decided to increase its annual lending to $11 billion to help countries in dire need.

President of the AFDB, Mr. Donald Kaberuka, made the Bank's position known at the two-day conference organised by the government of Tanzania and the International Monetary Fund (IMF) in Dar es Salaam.
Kaberuka told the conference participants titled: 'Changes: Creating Successful Partnerships for Africa's Growth' that the bank had also unveiled an Emergency Liquidity Facility of $1.5 billion, a Trade Finance Initiative of $1 billion, and a Framework for Accelerated Resource Transfer of African Development Fund (ADF) Resources to help member states.
"The bank currently has enough risk capital to deliver on its normal lending programme consistent with its medium term strategy," said Kaberuka.
"We currently estimate that this lending program will consume about 90 percent of its risk capital by 2012. However, the new demand created by the crisis to which the bank is responding implies that the bank's risk capital will need to be boosted by the end of 2011," he added.
Kaberuka observed that it is important that development institutions have enough resources to support member countries in a critical period such as this.
The conference addressed key policy questions, with the common goal of forging renewed African partnerships for growth in Africa in the 21st century. Key questions that were addressed include:
What do Africa's successes tell us about the main bottlenecks and risks to sustained growth and poverty reduction? How best can countries tap into the potential of the private sector and the financial sector to advance these goals?
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How can countries reduce the risks posed by exogenous shocks and a turbulent global economy and avoid the "resource curse"?
How does the model for financing development need to adapt? What should be the direction of Africa 's already evolving partnerships, including with the IMF?
The conference was hosted by the IMF Managing Director, Dominique Strauss-Kahn, and opened by the Tanzanian President, Jakaya Kikwete. Delegates to the conference included former United Nations Secretary General, Kofi Annan.

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Bail-Out fund set up to aid African Banks

‘Bail-out’ fund set up to aid African banks

By Barney Jopson in Dar es Salaam
Published: March 12 2009 02:21 Last updated: March 12 2009 02:21
African commercial lenders and central banks will be able to access an emergency $1.5bn “bail-out” facility set up by the African Development Bank in a drastic move to prevent trade and investment from seizing up, the AfDB’s chief has said.
Donald Kaberuka, president of the AfDB, said the trade finance facility was a “radical departure” for the bank – whose mandate is to provide development finance – but one made necessary by the grave impact of the credit crunch on Africa.

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“Liquidity is drying up faster than we thought as Europe deleverages. This will be a revolving facility to keep trade and investment moving,” Mr Kaberuka told the Financial Times. “The central banks will have liquidity to sell to commercial banks and commercial banks will have liquidity to sell to each other.”
Before the global crisis intensified last year most credit in the African financial system originated from European banks such as Barclays and Standard Chartered. The new AfDB facility should feed through to African companies struggling to finance imports or complete investment projects, Mr Kaberuka said. It was set up with funds from the AfDB’s own capital base.
Mr Kaberuka was speaking at a conference of policymakers organised by the International Monetary Fund in Tanzania that has highlighted how the crisis is hitting the poorest continent. The IMF has forecast that growth in sub-Saharan Africa will halve from the average of the past decade, to just over 3 per cent.

Copyright The Financial Times Limited 2009

Thursday, March 12, 2009

Luo Cultural and African Music

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End Violence Against Women

Change in socialisation process to end violence

oday marks a very important day for women all over the world. It is the International Women’s Day — a day that is marked worldwide by women across all continents to look back to a tradition that represents a struggle for equality, justice, peace and development.

This is 34th year since the United Nations in 1975 found it necessary to pay homage to women and give the world a chance to look at how women were faring. Today we can look back and see the fruits of this struggle. We can see women sitting on thrones as queens and presidents. We can see women attending school, qualifying as doctors and engineers. We can see women giving orders as CEOs and flying big jumbo jets and jet fighters across the skies as pilots. We can see women carrying voter’s card and Identity cards as well as passports.

With these successes there are still many gaps that remain to be filled. One area remains with a big gaping hole that has taken too long to fill as many still trip and fall into it. This is the area of violence. Violence against women goes on in the inside of our homes to the outside at places of work. It takes all forms and shapes.

That is why this year the world wants an end to violence against women. The theme is "Men and women working together to end violence against women".

Women alone cannot end the violence and neither can the men alone. We must all together — men and women — join hands and bring to an end this act that often leaves its victim dead, if not maimed.

Violence against women is an obstacle to the achievement of the objectives of equality, development and peace.

Fundamental freedoms

Violence against women both violates and impairs the enjoyment by women of their human rights and fundamental freedoms. That by subjecting a woman to whatever form of violence you are in effect affecting her status as a mother, wife or sister.

A prominent saying among my people goes something like: "There are no spare parts shops for body parts". What this in effect means is that when one part of your body is damaged there will be no replacement for it as there is no shop where you can go and order a replacement Men have been known to beat their partners for the flimsiest reason. To these men, there is no difference between their female partners and children. Yet the women are supposed to be equal partners in the relationship.

We need to change our socialisation process by bringing up our sons to appreciate their sisters and mothers. By doing this, they will grow up respecting the women in their lives and these include the women they will marry.

Our daughters must also be brought up to appreciate themselves as women and that they are equal partners in any relationship. By working together as men and women we can then bring to an end violence against women.

Read on as we look at why violence must end, achievements and challenges that women face and why the world must be a levelled platform for both sexes to achieve equality peace and development.

Case Review.....
By Kwamboka Oyaro
His immaculate suit, matching shirt and tie do not give away his pastime. It is no secret that he beats his wife, who often goes to work with a black eye or limps, depending on the kind of beating she received the previous night. He is a rich, powerful man who believes battering his wife enhances his control of the household. Doesn’t he feel anything bad about beating an adult?
After a long silence, he says: "I feel nothing. I’m just doing what I saw my father do and it is what my grandfather did... Women have to be beaten, otherwise they grow horns."
Such a habit, from an educated and prominent man in the 21st Century when media and human rights activists have brought the barbarity of violence against women to the fore, is not understandable.
Will his three sons also beat their wives? "Of course they will. It is the only way to ensure they are at the helm of their family," he says, somehow irritated that I have asked him a question with an obvious answer.
With such men resolutely determined to pass down a primitive culture through generations, can women escape this web of suffering?
Regional co-ordinator of Men for Gender Now, Ken Otina, has walked down the violence path. He beat his girlfriends at the slightest provocation. "If you didn’t beat her up, you became the odd one out. My peers and I believed it was our duty to ‘teach’ our girlfriends a lesson once in a while," says Otina, 34, who is now actively taking the anti-violence message to men.
Before he stopped battering women nearly 10 years ago, Otina didn’t see anything wrong with his actions.
"Generally, we grow up knowing that the person inflicting the pain (usually the father) is the powerful one in the family. We carry the knowledge that to show your power, you must batter your girlfriend or wife and make everyone cry. That is power. That earns you respect." This attitude is embedded in other cultures. Otina and his colleagues treated women like trash.
"To us, women weren’t valuable. In fact, when my then girlfriend conceived, I told her that unless she got a son, she had no business looking for me after giving birth."
The girlfriend got a daughter. Somehow, Otina visited the child, and the visit was his turning point.
"I looked at the newborn. She was so soft and innocent.
I asked myself: "If I, the child’s father, rejects her, how will the world receive her?" I named my daughter after my only sister and married my girlfriend. We now have another daughter and a son."
In his campaign against violence, Otina has discovered many perpetrators do not know that what they do is wrong. No one told them that hitting a woman is wrong and since violence against women is inculcated from childhood, explains Otina, boys learn that that is the way of life.
This attitude, just like an inheritance, informs their future lives and the decisions they make regarding women.
Mary Kamau, a guidance and counselling teacher, says most children who violate others do so because they witnessed it at home.
"Children copy what adults do. Normally, they admire their fathers and what he does is always held in awe — even beating up their mother," explains Mrs Kamau.
Domestic violence studies show that children raised in abusive homes learn that violence can be used to resolve conflicts and problems. And boys who witness their mothers being battered are more likely to batter their female partners later in life than those raised in homes without violence.
But there is hope, assures Otina. "When I talk to men about the side effects of violence, they stop their arguments for wife battering and listen. Many are shocked at the effects. Once they start listening, we are on the right path to stumping out girlfriend and wife battering."
Apart from sharing his knowledge about the ignominy of violence against women, Otina is motivated by his daughters.
"The happiness of my daughter depends on changed men, men who honour and respect women," he says.
If all men thought this way, the cycle of violence would be broken sooner than later.
—Kwamboka Oyaro is Editor, Sunday Magazine

Wednesday, March 11, 2009

Obama Signing Executive Order for White House Council on Women and Girls

President Barack Obama signs an Executive Order creating the White House Council on Women and Girls, Wednesday, March 11, 2009, in the East Room of the White House in Washington. From left are House Speaker Nancy Pelosi of Calif., Sen. Barbara Boxer, D-Calif. and White House Public Liasion Tina Tchehttp://msnbc.msn.com/id/29640309/displaymode/1176/rstry/29640901/from/ET/

Obama's position to Domestic Violence

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Question: What is Barack Obama's position on domestic violence?
Answer: Barack Obama was the chief sponsor of the Victims' Economic Security and Safety Act (VESSA), designed to help domestic violence victims keep their jobs. The bill enables an employee who is a victim of domestic or sexual violence, or who has a family member who is a victim of domestic or sexual violence, to take time off from work to seek medical attention or obtain health or legal services. VESSA was signed into law in August 2003.

Obama co-sponsored and helped reauthorize the Violence Against Women Act (VAWA) which provides funding and support to communities, nonprofit organizations, and police to combat domestic violence, Teen Pregnancy[/link]sexual assault, and stalking. The bill establishes a sexual assault services program and provides education grants to prevent domestic violence. VAWA was signed into law in January 2006.

How did Women's History Month begin in the US?

Answer: The first organization within the US to successfully promote the idea of a "Women's History Week" was the Education Task Force of the Sonoma County, California Commission on the Status of Women. In 1978, the group selected the week of March 8 for Women's History Week in order to coincide with International Women's Day which is celebrated on March 8th.

Area schools eagerly adopted the idea of Women's History Week, and within a few years the Sonoma County town of Santa Rosa became the epicenter of the celebration with an annual parade and programs observing the event.

1n 1979 at the Women's History Institutes at Sarah Lawrence College - a gathering of national leaders of organizations for women and girls - Sonoma County's Women's History Week idea was embraced by participants. They agreed to introduce the annual celebration to groups and school districts in their respective regions and support an effort to obtain national recognition of the weeklong observance.

In 1981, the first Joint Congressional Resolution declaring a National Women's History Week was co-sponsored by Sen. Orrin Hatch (R-UT) and Rep. Barbara Mikulski (D-MD).

A group founded by five women in Santa Rosa in 1980 - the National Women's History Project (NWHP) - led a coalition to urge that the nationally-recognized celebration be expanded, and that the entire month of March be designated as Women's History Month.

In 1987, the NWHP petitioned Congress and the National Women's History Month Resolution was approved with bipartisan support in the House and Senate.

Source:
"History of National Women's History Month." National Women's History Project nwhp.org, retrieved 28 February 2009.

For a more detailed account of the history of Women's History Month, see the About.com Women's History article "Women's History Month" by Jone Johnson Lewis.

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Thursday, March 5, 2009

Poor Countries Need U.S.$25 Billion Up-Front - IMF

Africa: Poor Countries Need U.S.$25 Billion Up Front - IMF
Mariam Isa
4 March 2009

Johannesburg — POOR countries urgently needed at least $25bn in low-cost finance this year to help their economies ride out the global financial crisis, the International Monetary Fund (IMF) said yesterday.
IMF MD Dominique Strauss-Kahn warned that there was a real risk the world economy would contract this year. He said this would be reflected in the IMF's updated growth forecasts next month.
News and data had worsened since the IMF predicted the global economy would grow 0,5%, he told reporters in a video conference link between Washington and Johannesburg.
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This meant "the probability of our next global forecast being lower than that is very high".
The risk of a forecast below zero was a serious risk, he said.
If the global downturn worsened, the number of the most vulnerable economies could almost double from 20 now, while their funding needs could rise to $140bn, the Washington-based lender said.
Most of those countries were in sub-Saharan Africa, expected to grow just more than 3% this year, compared with 4% for low-income countries overall, the IMF said in a report.
"I believe we have to scale up the support we supply to Africa. We are urging donor countries not to reduce aid flows," Strauss-Kahn said. This was necessary despite the fact that advanced economies were grappling with what is set to be the worst global financial crisis for 80 years.
The report said, "At a time when the advanced economies are spending hundreds of billions of dollars on fiscal stimulus and financial sector restructuring, we must find room to help low-income countries."
Strauss-Kahn said there were also plans to help Zimbabwe.
Finance Minister Trevor Manuel had contacted him on how to "resume normal relations" with Zimbabwe, and they would discuss this further at an IMF conference in Tanzania next week. "No decisions have been made," he said.
Antoinette Sayeh, head of the IMF's Africa department, said the IMF was preparing to send a mission to Zimbabwe.
"The international community will have a significant challenge with Zimbabwe's arrears. They will have to be cleared before we can engage with Zimbabwe," she said.
"We have a mission going to Zimbabwe to discuss with the authorities their policy ambitions and reform agenda, to assess whether the international community can support in a way which is significant," Sayeh said. IMF officials said Zimbabwe's arrears with the IMF stood at about $130m, but the country would also have to clear much larger amounts owed to the World Bank and the African Development Bank.
It has been about two years since the institution last sent a mission to the country.
Southern African Development Community ministers decided last week to push for donor aid for Zimbabwe but deferred a decision on a rescue package to a regional summit.
The international community is sceptical about whether the unity government of President Robert Mugabe's Zanu (PF) and Prime Minister Morgan Tsvangirai's Movement for Democratic Change will last.
Sayeh said the IMF was also looking at its growth forecasts for SA, which the government predicts will reach 1,2% this year. But analysts are increasingly revising their growth forecasts for SA below 1%, with some now predicting the country faces recession. "SA has done reasonably well on the financial sector, and it's not very dependent on international funding ... but as the domestic economy slows, concerns over the quality of bank assets rise," Sayeh said.
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Angola: Education of Women Boosts Economic Development
Poor countries were being hit by falling demand for their exports, the commodities prices slump and drying up of investment and aid.
The IMF report said lower growth would have serious implications for poverty and political stability so social safety net programmes should be ramped up. The $25bn needed by the most vulnerable countries amounted to 80% of yearly aid to all low-income countries in recent years, it said.

Saturday, February 28, 2009

Kansas Governor Kathleen Sebelius For HHS Secretary

Obama taps Sebelius for HHS secretary

By CHARLES BABINGTON,
Associated Press Writer Charles Babington,
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AP – In this Feb. 9, 2009 file photo, Kansas Gov. Kathleen Sebelius greets visitors to her office in Topeka, …
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WASHINGTON – Kansas Gov. Kathleen Sebelius is President Barack Obama's choice for secretary of health and human services, a White House source said Saturday.
The source, who was not authorized to speak on the record, said Obama will formally announce the nomination on Monday.
Sebelius, 60, was an early Obama supporter. She picked his presidential campaign over that of Hillary Rodham Clinton, now the secretary of state. Sebelius worked tirelessly for Obama's bid and was a top surrogate to women's groups.
Obama's first choice for HHS, former Senate Majority Leader Tom Daschle, withdrew after disclosing he had failed to pay $140,000 in taxes and interest.
Sebelius drew praise for the consumer watchdog role she played as Kansas insurance commissioner for eight years before she became governor.
Her name had been floated for several Cabinet posts. She said in December that she had removed herself from consideration from a Cabinet job, citing Kansas' budget problems that needed her attention.
Sebelius is in the middle of her second term as governor and is legally barred from seeking a third term next year. Many Democrats had hoped she would finish her term and run for the U.S. Senate seat that Republican Sam Brownback is giving up in 2010.
Kansas has not elected a Democrat to the Senate since 1932, and Sebelius was seen as the best chance for breaking that string. She comes from a strong political family. Her father, John Gilligan, was the governor of Ohio in the early 1970s.
Abortion foes strongly oppose Sebelius because she once had a reception attended by a late-term abortion provider who now faces criminal charges. Democrats say there was never any doubt that Obama would appoint an HHS secretary who supports abortion rights.
Sebelius will be subject to confirmation by the Democratic-controlled Senate.

Wednesday, February 25, 2009

President Obama Address to Congress

My address to Congress

Wednesday, February 25, 2009 4:14 PM

From: "President Barack Obama" View contact details
To: "Judy Miriga" jbatec@yahoo.com

Judy --

Last night, I addressed a joint session of Congress for the first time.To confront the serious economic challenges our nation faces, I called for a new era of responsibility and cooperation. We need to look beyond short term political calculations and make vital investments in health care, energy, and education that will make America stronger and more prosperous well into the future.Watch a few highlights from my address and share it with your friends now:
A little more than a month into my administration, we've already taken bold steps to address our urgent economic problems.Through the Recovery Act, the Stability Plan, and the Housing Plan, we're taking the immediate necessary measures to halt our economic downturn and provide much-needed assistance to working people and their families.But to set our country on a new course of stability and prosperity, we must reject the old ways of doing business in Washington. We can no longer tolerate fiscal deficits and runaway spending while deferring the consequences to future generations.That's why I pledged last night to cut our deficit in half by the end of my term. Achieving that goal will require making sacrifices and hard decisions, as well as an honest budgeting process that is straight with taxpayers about where their dollars are going.Watch some key moments from my address now:http://my.barackobama.com/page/m2/55c13e28/504654ae/3e32ba7d/11884c7a/846658389/VEsF/Central to this plan will be a renewed commitment to honesty and transparency in government. Restoring our country's economic health will only happen when ordinary citizens are given the opportunity to hold their representatives fully accountable for the decisions they make.

I look forward to continuing to work with you as we bring about the change you made possible.

Thank you,

President Barack Obama

Paid for by Organizing for America, a project of the Democratic National Committee -- 430 South Capitol Street SE, Washington, D.C. 20003. This communication is not authorized by any candidate or candidate's committee.
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Obama Delivers Hopeful Yet Realistic State of the Union Address

Obama Delivers Hopeful Yet Realistic
State of the Union
Kaitlynn Riely
Posted: Feb 24th 2009 10:40PM
Filed under: Politics, News, The Economy, Notre Dame

The hope is not gone, people.
If you thought a collapsing economy, rampant unemployment, a huge deficit and two wars was going to get Obama down after a little more than a month in office, you were wrong. In his State of the Union Tuesday night, delivered before a joint session of Congress, President Obama was just as hopeful as he was before he became the chief executive, though he was bluntly realistic about the challenges. Obama said he recognized that the economy was the one issue that Americans were thinking about now above all others. The challenges the country faces are severe, but he had faith that America would emerge successfully. "We will rebuild, we will recover, and the United States of America will emerge stronger than before," he said. The way to do this: jumpstart job creation and pass a budget that invests in energy, health care and education. And there has to be accountability. Obama said Vice President Joe Biden would be in charge of oversight, to make sure money from the American Recovery and Reinvestment Act (the stimulus plan) is spent responsibly. "Nobody messes with Joe," Obama said. Speaker of the House Nancy Pelosi loved that line. She quickly jumped up to give Biden a standing ovation. Another key part of the recovery plan is ensuring the flow of credit, Obama said. At this point, President Obama became Professor Obama, explaining who needs credit, why they need it and how to free up credit.He's not going to let Wall Street bankers use taxpayer dollars to pad their paychecks any longer, Obama said, resuming his role as Commander-in-Chief and bringing out the tough talk:"Those days are over." Obama made it clear who his constituents were"It's not about helping banks. It's about helping people." He repeated the line twice, over applause. Obama said his plan for America's recovery is directly tied to his budget proposal, which focuses on energy, healthcare and education, three areas Obama believes are vital. He wants to see clean energy, more efficient cars and trucks and higher standards for the automobile industry. He then turned into America's personal trainer:"This is America. We don't do what's easy. We do what's necessary to move this nation forward." He called for healthcare reform. CBS's cameras zoomed in on Hillary Clinton's standing O. I heard echoes of Josiah Bartlett when he called for a cure for cancer "in our time." It's not exactly John F. Kennedy's challenge to land a man on the moon by the end of the decade, but at least it's being discussed. (Since I am now a Twitter user, I can report that Lance Armstrong was very happy about the cancer line.)The most interesting parts of Obama's speech, I thought, were about education. A good education has become a "prerequisite to opportunity," he said. He asked all Americans to commit to one year or more of college or career training. By 2020, he wants America to have the highest proportion of college graduates. The line that made me most proud? "I can stand here tonight and say without exception or equivocation that the United States does not torture," Obama said. Obama had Republicans and Democrats alike on their feet applauding at many points in the speech. He even got them laughing. Can we figure out some way to bottle up his optimism and pour it into the stock market?

Tuesday, February 24, 2009

U.S. Must Decide What Role To Play With Banks

U.S. Must Decide What Role To Play With Banks
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All Things Considered,

February 24, 2009 ·

Talks between the Treasury Department and Citigroup about changes that would boost the government's stake in the troubled bank to up to 40 percent have many people wondering if banks are on a path to being nationalized.
Testifying before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke tried to assure lawmakers the government's plan is not to take over banks; Sen. Bob Corker (R-TN) sounded less than convinced.
"That to me is nationalization," he said after listening to Bernanke. "I'd like for you to give me a term to use as I leave here as to what we would call that."
"A public-private partnership," Bernanke replied. "It's not nationalization because the banks would not be wholly owned or probably not even majority owned by the government."
What Type Of Shareholder?
Greg Ip, the U.S. economics editor of the Economist, says the type of nationalization being discussed in the U.S. is when the government buys common shares in a bank until it controls at least 50 percent.
"That's kind of the question that's being discussed now because in order to keep the banks from failing, the government may find itself forced to purchase substantial amounts of common equity in these banks," Ip tells NPR's Michele Norris.
It is unclear what the government will do if it acquires a 50 percent plus 1 stake in the banks. When Henry Paulson was Treasury secretary, he said the government would be a passive shareholder.
"Now the question is: Should the government remain a passive shareholder or should it actively vote those shares and therefore take a much more hands-on approach to deciding what the banks will do," Ip says.
Active Involvement
Ip says though the government is trying to stick to its stated philosophy of keeping the banks in private hands, it must soon decide what type of role it will play. He says there is a good case to be made that once it owns more than 50 percent of a bank's common shares, the government should decide on the composition of the bank's board of directors, its management team, and to whom it lends and by how much.
He says the government and Congress are urging the banks to lend more to businesses and homeowners. Banks, however, are reluctant.
"If the government were the shareholder of the banks and forced to confront the pluses and minuses of those types of decisions, they'd have to, in some sense, behave like the mutual funds and active investors of the world behave, which is deciding whether or not those decisions are wise in the long run for the health of the bank," Ip says.