[CTRL] Lieberman and Secret Societies

[MICHAEL SPITZER]

[The below is from Dec. 1998 and came up in a websearch for
Joseph Lieberman's name.  He appears to be yet another shill, a
loyal member of the Council on Foreign Relations, et al.  --MS]


From:

http://www.biblebelievers.org.au/week008.htm

THE WEEK THAT JUST WAS
VOL. 1. NO. 8 (to December 20, 1998).

BB=Bilderberger
CFR=Council on Foreign Relations
M=Mason
RS=Rhodes Scholar
TC=Trilateralist

THE ADL GIVES GOVERNOR BUSH A CLEAN BILL ON RELIGIOUS BELIEFS

Governor Bush was accompanied in his recent trip to Israel (U.S.
News Dec. 14) by key Jewish Republicans, including Mel Sembler,
finance chairman of the Republican National Committee. Abraham
Foxman, the national director of the New York-based ADL, has now
given Bush (Austin American-Statesman Dec. 13) a clean bill of
health, saying he has proven his "commitment to tolerance,
diversity and the principles of religious freedom." In a
statement, after private conversations with Bush, Foxman said:
"The matter of his 1993 statement is now behind us." The ADL has
recently unveiled a new software program (New American Dec. 21)
to help parents filter bigotry out of their computers. The
"HateFilter" also steers the user to the ADL's own home page. On
November 17, the 1st Dictrict Court of Appeals, in San Francisco,
ordered the self-appointed monitor of hate groups to surrender
information it had illegally obtained on pro-Palestinian
activists, Jewish dissidents, and others believed by the ADL to
be "extremists." In the appeal, the plaintiffs stated that the
ADL "illegally obtained confidential records, such as driver's
licenses and Social Security numbers, from the state and used
them to get people blacklisted among the organization's
supporters."

Gregory Gallico III (S&B 1968), a Boston Plastic Surgeon, told
the Fort Worth Star Telegram last month (Austin
American-Statesman Dec. 18) about himself, Governor Bush (S&B
1968) and other Delta Kappa Epsilon brothers at Yale: "Drank a
ton in college. It was absolutely off the wall. It was appalling.
I cannot for the life of me figure out how we made it through."
Bush told GQ Magazine, while drinking a non-alcoholic beer: "I
had more than my fill of the real stuff. Ask the guys who used to
hang with me back then. It wasn't pretty." The Governor stopped
drinking 12 years ago. Governor Bush and Lt. Governor-elect Rick
Perry have chosen their inauguration theme (Austin American-
Statesman Dec. 19) for January 19, 1999: "Together We Can-Juntos
Podemos."

LIVINGSTON WILL NOT SERVE AS SPEAKER AND WILL SHORTLY LEAVE THE
HOUSE

Amid the impeachment debate, Bob Livingston (AP Dec. 19)
announced he would leave Congress next year and would not serve
as Speaker of the House. Candidates now included chief deputy
whip Dennis Hastert (R-Illinois), Christopher Cox (R-California),
Henry Hyde (R-Illinois) and Bill Archer (R-Texas).

GORE VISITING NEW HAMPSHIRE REGULARLY IN PREPARATION TO RUN

Vice-President Gore (CFR/M) has visited New Hampshire (Reuters
Dec. 15) about once every six weeks since March to keep his
front-runner position. He is combining political trips with
official business -- including announcing more than $3 million in
federal environmental and educational grants. Governor Bush has
not yet been to New Hampshire. Gore made his third trip to Israel
in the past four years (U.S. News Dec. 14) when he visited last
May to help celebrate the 50th anniversary of its founding.
Gore's top foreign policy guru is Leon Fuerth (The New Republic
Dec. 7). Richard Holbrooke (BB/CFR/TC) called Fuerth "one of
those powerful but rarely seen people who play major roles behind
the scene in Washington." He is one of the members of "the
Principals Committee" whose members include William Cohen,
Madeline Albright and Sandy Burger.

BONESMAN DEMOCRATIC PRESIDENTIAL HOPEFUL KERRY IS AT THE HEAD OF
HIS CLASS NOW

John Forbes Kerry (S&B 1966), while in the U.S. Senate. "has
consistently gone to bat for the NEA," according to Dana Milbank
(The New Republic Dec. 14). He earned a 100% tally in NEA's most
recent rating as well as in the American Federation of Teacher's
voting analysis. On schools he recently stated: "I'm for tough
love here folks. It's time to come in and kick some butts.
Democrats can't be viewed as somehow protecting these practices.
You can't do this in some loosey-goosey, half-assed way."

Kerry's Yale Bones Class of 1966 was: John R. Bockstoce (S&B
1966); George Clifford Brown (S&B 1966); Alan W. Cross (S&B 1966)
-- M.D. Director, Center for Health Promotion and Disease
Prevention at UNC-Chapel Hill; Michael Thomas Dalby (S&B 1966);
James Ernest Howard (S&B 1966); Forrest David Laidley (S&B 1966);
Richard Warren Pershing (S&B 1966) -- Born in New York City on
October 25, 1947. Grandson of General John J. Pershing. Died in
Vietnam on February 17, 1968. His father, F. Warren Pershing, is
or was the senior partner in Pershing & Co., stockbrokers. A
graduate of both Phillips Exter Academy and Yale, he had just
completed training at Ft. Benning, Georgia, before going to
Vietnam. He was engaged to Shirley Hildreth Gay, a member of the
editorial staff at Vogue Magazine; David McIver Rumsey (S&B
1966); Ronald Leonard Singer (S&B 1966); Frederick W. Smith (S&B
1966) -- Chairman of American Express. Met with President Clinton
(Washington Post August 21, 1997) for 45 minutes to discuss a
problem that was costing his company $100 million a year. Made a
$250,000 contribution to the DNC. Federal Express is (Reuters
Dec. 18) the world's largest air express package carrier. It has
reached a tenative new agreement with its 3,600 pilots; William
Burks Stanberry, Jr. (S&B 1966); David Hoadley Thorne (S&B 1966)
and Thomas Vargish (S&B 1966).

BANKER BOWLES BOWS OUT OF N.C. GOVERNOR'S RACE

Former Clinton administration chief of staff, Erskine Bowles, who
resigned in October, announced (AP Dec. 15) that he would not
make the transition to becoming a politician by running for the
governorship of North Carolina. The 53 -- year-old investment
banker, who has extensive business connections and personal
wealth, said he would continue to work in the private sector and
help nonprofit groups.

ATTACK ON IRAQ BRINGS OUT VIRTUALLY UNANIMOUS ELITES IN SUPPORT
OF MILITARY ACTION: IT'S THE RIGHT THING TO DO IS KEY PHRASE USED
TO BACK UN MASS DESTRUCTION WEAPONS-INSPECTION REGIME

James Chance recently wrote in the New York Review of Books:
"Although the Clinton administration certainly doesn't want to
admit it, 1999 will mark the eleventh year of the Bush
administration -- at least as far as foreign policy is
concerned."

William Sebastian Cohen (CFR/TC), Secretary of Defense, observed
(NBC News Dec. 16) a history of Iraqi lack of cooperation with
Richard Butler: "(F)aced with Iraq's outright refusal to obey its
international obligations, the United States acted to restrict
the threat that Iraq poses to its neighbors and international
order." Cohen (ABC Dec. 17) denied that the U.S. was tracking
Saddam Hussein. Cohen said Saddam had some 80 palaces (News Hour
Dec. 17) at last count.

A CNN poll (Reuters Dec. 17) showed that 74% of Americans
supported the air strikes with 13% opposed. An NBC poll (NBC De.
17) showed that 75% approved the military strike while 17%
disapproved. On the question of whether the air strikes were
connected to the pending impeachment vote, 59% disagreed while
27% agreed. But Republican Senate Majority Leader Trent Lott
stated (CNN Dec. 16): "It's the right thing to do at the wrong
time." Clinton said Thursday that air strikes (Reuters Dec. 17)
were "absolutely the right thing to do." Newt Gingrich (CFR)
strongly (AP Dec. 17) endorsed the military action as he formally
passed his gavel to Bob Livingston: "We must carry the burden of
leading the world."

While the Washington Times said (Reuters Dec. 17) that Clinton's
attack followed the pattern of the "Wag the Dog scenario," the
New York Times said the action "was fully justified." Support for
the President and U.S. troops also came from the Los Angeles
Times, The Washington Post, the Boston Globe, the Hartford
Courant, the Miami Herald and the Chicago Tribune.

Madeline Albright (CFR/TC) told Jim Lehrer (CFR) that (News Hour
Dec. 17): "I believe that the President did the right thing to
make the decision to have this military campaign at this time."
The decision was based upon the Butler report, she said. Butler
consulted with the permanent five of the Security Council.
Richard Butler (ABC Dec. 17) said that his report "danced to no
one's tune."

James A. Baker III (CFR) of the Baker Institute said (NBC News
Dec. 16) there was a need for speed and that Clinton probably was
forced to act: "We've diddled around . . . we probably had to
act, this is the right thing, I think, for the United States to
do . . . Nobody could be so craven as to risk the lives of our
military men and women to cover their political backsides . . . "
Baker, who served in senior positions under President Ford,
Reagan and Bush, is on the board of Directors of Rice University,
Princeton University, the Woodrow Wilson International Center for
Scholars in the Smithsonian and the Howard Hughes Institute. He
is senior partner in the law firm of Baker & Botts and senior
counselor to The Carlyle Group. The 1st Director of the James A.
Baker III Institute for Public Policy at Rice University is
Edward Peter Djerejian (CFR) who served as Clinton's Ambassador
to Israel.

Samuel R. Berger (CFR), U.S. National Security Adviser, explained
(CNN Dec. 16) that the UN Secretary-General had agreed upon five
criteria. Iraq has not cooperated. The inspection commission was
not able to function. Richard Butler, on Tuesday, reported that
due to Iraq's deception, the inspections were ineffectual. There
was no choice but to take military action. The object was to take
out missiles, weapons of mass destruction and prevent aggression
towards neighbors. With the inspections no longer being possible,
the U.S. had to make good on its threats of military force. 40
out of 42 U.S. embassies (CBS Dec. 17) were shut down in Africa.

Tom Brokaw (CFR) stated (NBC News Dec. 16): "It is a chaotic
situation. None of us can remember, at least in recent memory,
the confluence of these kinds of events in which you have a major
military action ordered by the president of the United States who
is on the eve of being put, in effect, of being put in the dock
of the House of Representatives and subjected to articles of
impeachment just 15 hours later." He also said (NBC News Dec. 17)
that even though the President was commander- in-chief, the
impeachment rolled on. On Friday Brokaw opened the most watched
news (NBC Dec. 18): "And questions about hypocrisy. The new House
Speaker admits cheating on his wife. Should he judge the
President?"

Former President Jimmy Carter (CFR/TC) stated (Reuters Dec. 17):
"American leaders played no role in the timing of Iraq's
violations, which cannot be related to political events in
Washington."

President Clinton (BB/CFR/RS/TC), in response to a question from
Wolf Blitzer, said (NBC De. 17): "And I don't believe any
reasonably astute person in Washington would believe that
Secretary Cohen and General Shelton and the whole rest of the
National Security team would participate in such an action."

Laurence S. Eagleburger (CFR/TC), however, apparently broke rank,
and said (NBC News Dec. 16) that "it smells." Eagleburger is with
Baker, Donelson, Bearman & Caldwell P.C., D.C. and sits on the
board of directors of Phillips Petroleum Co.

Richard ("Dick") Andrew Gephardt (CFR) opposed holding a debate
on impeachment (ABC Dec. 17) in part based on what Saddam Hussein
would think.

Paul Gigot (BB) said there could be no debate while Americans are
in harm's way (PBS Dec. 16) while Mark Shields said that Saddam
Hussein had ran out his string. Senator Lott will be mute now.
Later, Lott said he had been briefed by the administration (NBC
De. 17) and stated: "I am going to take their word for it." John
Dean, former Nixon White House Counsel, now an investment banker
in Los Angeles, said that the assumption now is that the
President is wrong.

Rep. Porter Goss (R-Florida) , House Intelligence Committee
Chairman, said (CNN Dec. 16) that he had not been briefed:
"Bringing Saddam Hussein to justice and dismantling his regime is
what this is about." Goss (ABC News Dec. 17) will hold a hearing
next month. Goss, a 1960 honors graduate from Yale, had a 10-year
career as a Clandestine Services Officer with the CIA. He is a
native of Waterbury, Connecticut.

Richard Haass, of the Brookings Institute, said (NBC Dec. 18):
"There is no end game. The only thing that will end is American
bombing. But when the bombing ends, Saddam will still be there,
his army will still be there, his weapons of mass destruction
will still be there."

Joseph Lieberman (CFR) (D-Conn.) supported (PBS Dec. 16)
Clinton's actions "absolutely." It was made clear to Senators
three weeks ago that if Richard Butler was frustrated, the U.S.
would strike Iraq without delay or warning. He agreed that the
timing was "disconcertingly awkward." Senator Lott's statement
disappointed him. Radio Free Iraq is now in operation.

Peter Jennings (BB/CFR) noted (ABC Dec. 17) that Iraq was bigger
than California. He said that Clinton was not getting the
traditional support and was taken aback by the comments from
Senator Lott and Dick Armey. He said a "lot of serious people
here think there is a connection" (with impeachment).

John Forbes Kerry (S&B 1966) said that Clinton was doing the
right thing (K-Eye News Dec. 16).

Brent Scowcroft (BB/CFR/TC), the co-author with former President
George Bush (CFR/M/S&B1948/TC) of a new book, A World
Transformed, said (CNN Dec. 16) that there had not been an
adequate explanation of the Richard Butler report. He was asked
if Clinton had the same standing that George Bush had in the
prior Gulf War. His answer to Bernard Shaw was: "No." Up to now,
he said, there had only been "pin-pricks" on Iraq, made to
satisfy some domestic critics, rather than a serious policy of
containment. He was asked when the perennial crisis would be
ended and replied: "It will probably end with Saddam Hussein. And
perhaps not, until then." Scowcroft, a retired Air Force Lt.
General, was Vice-Chairman of Kissinger Associates, Inc.,
currently is the president of The Forum for International Policy
and chairman of the board of the CSIS/Pacific Forum. He is also a
director of QUALCOMM Incorporated. He was featured in the New
York Times (February 4, 1998) in a debate on NATO article, along
with Howard Baker, Jr. (CFR), Sam Nunn (BB) and Alton Frye (CFR).

Senator John Warner (PBS Dec. 16) said it was imperative to join
together "to enforce the rule of law." He said England was
"bravely participating" and that there was clear and convincing
proof in the Butler report to the UN. Timing was an issue but now
we must back our troops.

Mohammed Said Al-Sahaf, Iraq Foreign Minister, said (News Hour
Dec. 17) that rather than "Operation Desert Fox," the operation
should be called "Villians in the Arabian Desert."

Wednesday night (AP Dec. 17) Iraq, Russia and China called to an
immediate halt to the attacks. Iraq's UN envoy, Nizar Hamdoon,
said that the uproar over weapons of mass destruction was
"nothing more than a big lie" like the claim that Iraq was a
threat to its neighbors. He said that Richard Butler, the head of
UNSCOM, had cited only five incidents in 300 inspection
operations. In an almost unanimous resolution (Reuters Dec. 17),
the lower house of the Russian Parliament, said that the U.S. and
Britain were engaged in "international terrorism." Yeltsin said
the strikes "crudely violated" the UN charter and should be
halted immediately. Russia is furious (Reuters Dec. 18) that the
U.S. bypassed the UN Security Council which gave it no chance to
use its veto. Friday Russia's ambassador Yuli Vorontsov
(Washington) and Yuri Fokin (London) were withdraw for
consultations. Albright said that James Collins, the U.S.
Ambassador to Russia, would not be recalled. Iraq owes Russia and
France (NBC De. 17) some $15 billion.

The Vatican (Reuters Dec. 17) called the strikes "aggression."
The Pope told envoys that "the right of each person and peoples
to live in security . . . is more urgent than ever."

A billion Muslims begin the fasting month of Ramadan (AP Dec. 17)
this weekend during which they abstain from food, drink, smoking
and sex from dawn to dusk. The fast begins with the sighting of
the crescent moon.

WALL STREET REACTION TO BOMBING AND IMPEACHMENT

Oil prices initially serged with news of the attack (NBR Dec. 16)
with Crude Oil up $0.83 to $12.38. Douglas Bohi, oil analyst with
Charles River Associates, said that Iraq exports about 2 million
barrels a day. Crude oil than retreated (NBR Dec. 17) to $11.03 a
barrel (down $1.35). Jeffrey Applegate, Market Strategist with
Lehman Brothers, said the dollar will probably be boosted. He
found it hard to foresee a vote of two-thirds of the Senate for
impeachment. Charles Clough of Merrill Lynch said impeachment was
no big deal although foreign investor concerns might hurt the
dollar. Ronald Hill of Brown Brothers Harriman, said the impact
of the President on the economy was small. Joseph Battipaglio of
Gruntal & Co. said that Clinton's job rating was high. Thomas
Galvin of Donaldson, Lufkin and Jenerette, said that Gore would
most likely continue Clinton's economic policies. John Manley of
Salomon Smith Barney indicated impeachment might end rumors of
Robert Rubin (BB) resigning. Robert Doll, Chief Investment
Officer for the $100 billion Oppenheimer Funds, said (NBR Dec.
17) that as President Gore would continue the same economic
policies. He likes Compac and Gateway stocks. Alan Ackerman,
Executive Vice-President of Fahnestock & Co., was interviewed by
Paul Kangus (NBR Dec. 18). Ackerman stated: "(T)his country is
strong, the economy is strong, transition teams are in place and
the president is surrounded by very good people." His stock
picks: Home Depo and Pepsico.

Donald B. Marron (CFR), Chairman and CEO of Painewebber, said
(Moneyweek Dec. 11) that impeachment is a political rather than
business issue. He does think that impeachment in the House may
have an impact on the stock market. Marron is a Director of the
Charles A. Dana Foundation.

Louis Rukeyser (Wall Street Week In Review Dec. 18) said that the
Iraq attack had avoided oil fields and accused the press and
media of a "hummingbird attention span." A preoccupied Congress,
he said, might turn out to be a good thing. Gold is at a
two-month low. His main guest was Jessica Reif Cohen,
Entertainment Analyst with Merrill Lynch. She sees fewer films
being made and likes Time Warner and Fox stocks. Cable will be
the best net provider due to its continuous connectivity (no need
to dial) and super-high transmission speeds. Two networks (CBS
and NBC) are yet to be affiliated with a studio.

IMPEACHMENT THIS WEEK GATHERS GOBS OF ELITES

A PBS News Hour panel discussion on impeachment (Dec. 15) was led
by Jim Lehrer (CFR). The three panelists were Tom Oliphant, of
the Boston Globe, Norman Ornstein (CFR), of the American
Enterprise Institute and Thomas Edward Mann (CFR), Director of
the Governmental Studies program of the Brookings Institute.
Ornstein is an election analyst for CBS News, a columnist for
Roll Call and a senior advisor to the Times Mirror Center for the
People and the Press. He has appeared on Nightline, Today and
Face the Nation. According to the National Journal, he is an
"icon of the press" and a sage "called on to deliver the final
word." Ornstein and Mann are co-editors of the Brookings/American
Enterprise Institute publication: Intensive Care: How Congress
Shapes Health Policy (1995). They have also co-authored three
other books.

The top three editors of Time (4.1 million subscribers), Newsweek
(3.2 million subscribers) and U.S. News and World Report (2.2
million subscribers) were then interviewed, on their impeachment
coverage, by Terrence Smith, PBS Media Correspondent: Mark
Whitaker (CFR), of Newsweek, Walter Seff Isaacson (CFR), of Time
and Stephen Grant Smith (CFR) of U.S. News. Isaacson is a
graduate of Harvard and Oxford University. He co-authored The
Wise Men: Six Friends and The World They Made and Kissinger: A
Biography. Before becoming the Managing Editor of Time in January
1996, he was editor of New Media for Time Inc. (1993-1993)
(developed the website Pathfinder).

Panelists discussing impeachment on Washington Week In Review
(Dec. 18) included Thomas L. Friedman (BB/CFR/TC). Friedman saw
three tracks: impeachment, the Iraq bombing and the global
economy.

Robert Rubin (BB) has kept his distance (Moneyweek Dec. 11) and
has not lobbied to stop the impeachment process. Jessie Jackson
(CFR) held a prayer vigil (NBC News Dec. 14) for William J.
Clinton (BB/CFR/RS/TC) on Thursday against "mean spirited
leaders" who "want to ram a dagger through his heart." Robert
"Bob" Dole (33rd M) proposed (News Hour PBS Dec. 15) a compromise
for Clinton that would be a "blending of responsibility and
justice" that was published in the New York Times. Senator Joseph
I. Lieberman (CFR) (D-Conn.) stated (New Hour PBS Dec. 15) that
if the House votes out an impeachment article, the Senate rules
clearly required it to be taken up. A majority of the Senate will
then decide what happens next. He said the rules also allow a
motion to adjourn. A motion to dismiss would also be up to the
majority. Barbara Streisand (PBS Dec. 16) said that Clinton was
"acclaimed as a peacemaker around the world" as actor Jack
Nicholson joined in an anti-impeachment Los Angeles rally. Gore
seeks a resolution that is "quick and fair."

Margaret Warner did a PBS interview on impeachment (News Hour
Dec. 17) that included Rep. Lee Herbert Hamilton (CFR/TC)
(D-Indiana) and Rep. Jim Leach (CFR/TC) (R-Iowa). Hamilton
thought the impeachment debate could wait and that harsh
criticism would weaken the President. The criticism of the
President was unprecedented. Leach said that Congress had the
duty to go forward. He said the motivation of Clinton "should not
be questioned." Rep. Marty Meehan (D-Mass.) said we could afford
to wait and that going ahead with impeachment would send the
wrong message to Saddam and the troops. He spoke of a majority of
the U.S. Senate questioning the President. Rep. Bill McCollum
(R-Florida) was introduced by Warner as the representative who
said that Congress could dance and chew bubble gum at the same
time. McCollum said he was against delay and there was no end in
sight for the bombings.

William Kristol (CFR) said (ABC News Dec. 17) that impeachment
must go on despite the bombing. The Bob Livingston marital
indiscretions were scooped by Roll Call writer Jim Vande Hei who
told Lou Dobbs (Moneyline Dec. 17) that Hustler Magazine and
several other new organizations had been looking into the new
Speaker's past sex life. Frank Sesno (CFR) and John A. King, Jr.
(CFR) reported on the Livingston story for CNN (Moneyline Dec.
17). Lou Dobbs said the same thing had been done with Henry Hyde
(CFR). Sesno broke into Dobb's coverage with a quote that showed
that Livingston was still planning to go full-speed ahead with
impeachment. The House voted by 415 to 5 in favor of the troops.
Those accused of infidelity in the House so far: Livingston,
Hyde, Burton and Chenoweth. Larry Flynt (NBC News Dec. 18) has
been running an ad offering up to $1 million which asks: "Have
you had an adulterous sexual encounter with a current member of
the United States Congress or a high ranking government
official?" He said: "Believe me, there's more people than that to
come yet. There's about a dozen of them that are going to bite
the dust on this issue." Rep. Maxine Water (D-California) stated
(NBC News Dec. 18): "The hypocrisy that is demonstrated by my
friends on the other side of the aisle is absolutely stunning."
Kenneth M. Duberstein (CFR), former Ronald Reagan chief-of-staff,
described the Washington scene (NBC News Dec. 18): "Washington
really is not the streets of Beirut anymore. It's really
reminiscent of Vietnam after a napalm bomb attack. It's scorched
earth."

Henry Hyde stated (NBC Dec. 18): "No man or woman, no matter how
gifted a manipulator of opinion, or winner of votes, can be above
the law." One of the two Republicans against impeachment was
Peter King (R-New York). Rep. John Conyers, Jr. (D-Mich.) said:
"Now I'm personally outraged that we would decapitate the
commander-in-chief at the time that we are at war abroad."
Charles B. Rangel (CFR/TC) (D-New York said (NBC News Dec. 18):
"This procedure is not on the level." He asked: "What has the
President done to cause so much hatred, so much animosity?"

NEW REPUBLIC ECHOES FEMA'S STERN MESSAGE AND SAYS U.S. POLICY
SHOULD CANCEL ALL OFFICIAL DEBTS OWED BY HONDURAS AND NICARAGUA

An editorial in the New Republic (Dec. 7) agreed with FEMA head,
James Lee Witt, and stated: "No longer will the federal
government underwrite people's stubborn refusal to bend to the
will of Mother Nature." The outraged editorial also said that IMF
chief Michel Camdessus issued no call for debt forgiveness but
said in essence that Honduras and Nicaragua would eventually have
to pay them.

WORLD BANK AND IMF COLLIDE BUT VERY POLITELY

The latest World Bank 186-page annual report, without naming
names, hinted that the IMF and U.S. Treasury may have paid more
attention to interest rates than unemployment. The dispute
between the World Bank and the IMF (U.S. News Dec. 14) goes back
to the crisis in Asia in the summer of 1997, according to Gary
Clyde Hufbauer (CFR), Senior Fellow at the Institute for
International Economics in Washington. Merrell Tuck said the
difference between the World Bank and the IMF was like a physical
therapist and a battlefield surgeon. Haubauer has stated that the
anti-dumping laws are being used selectively (Investor's Business
Daily Dec. 14). He also said that if states can set their own
trade policies it could wreak havoc with the world trade system.

FOR POORER BUT NOT RICHER COUNTRIES DEBT RELIEF IS NEEDED

Zambia's Archbishop Medardo Mazombwe stated (National Catholic
Reporter Nov. 13) : "We are slaves of debt. My country spends
more money on debt than schools, health, water and sewer
combined." He participated in the October 22-23 meeting on the
ethical dimensions of international debt held at Seton Hall
University. The meeting "was the culmination of nearly two years
of work, sparked by a request from Pope John Paul II to the U.S.
bishops to convene such a meeting." James Wolfensohn (BB/CFR),
President of the World Bank, said that developing countries
should lobby the lenders of wealthy countries who have
dramatically cut foreign aid in recent years. Two years ago an
initiative was launched by the IMF. World Bank and major creditor
nations. It is called the "Heavily Indebted Poor Countries
Initiative." No existing organization appears to exist to lobby
for relief of taxpayers in "Rich" Countries. Wolfensohn said that
the heavily indebted poor countries owe $215 billion out of the
overall total global debt that is now at $2 trillion. Poor
country relief advocates say they will only need a small tax hike
in the developed nations to make one billion people free from
international bankers.

MORE FOREST LAND BOUGHT BY ENVIRONMENTALISTS

The 900,000-member Nature Conservancy has purchased almost 1% of
the state of Maine (286 square miles or 185,000 acres ) from a
paper company (AP Dec. 15) for $35.1 million and promises to keep
the unbroken forest open for recreation. The buy comes as nearly
15% of the state's land has been sold off in the last three
months to mostly timber and paper companies.

UN-COVERED ECO-TERRORISM CRIMES ON THE RISE

During this decade the number of incidents of eco-terrorism has
risen greatly. Barry Clausen, of North American Research, claims
there have been 1,500 eco-attacks in the past decade. For the
past two or three years (New American Dec. 7) the number has been
about 300 each year, compared to only six in 1986.

OLYMPIC COMMITTEE SCANDAL FOCUSES ON SALT LAKE

Three years ago Utah won the right (NBC News Dec. 14) to host the
Winter Olympics in 2002. This was the result of a secret vote of
the International Olympic Committee. Mark Hodler, a member of the
IOC, alleged that payments of up to $5 million were made to bring
this about. Salt Lake 2002 spend $393,871 on 13 individuals, 6 of
whom were direct relatives of IOC members. Frank Joklik, of the
Salt Lake Organizing Committee, apologized for the scandal which
has (ABC News Dec. 13) shaken the committee to its
"over-privileged core." The DOJ (AP Dec. 17) may investigate
allegations of bribery. The investigation (AP Dec. 19) has now
been turned over to a 5-member independent ethics panel whose
report is due on February 11.

MERGERS ON THE MOVE INCLUDE BRITISH AND GERMAN BUYS

The British London-based publisher, Emap PLC, is paying $1.2
billion in cash for The Petersen Companies, Inc which publishes
Motor Trend, Teen, Sport and other speciality magazines (AP Dec.
15). The deal will bring its total to nearly 360 magazine titles
with revenues of $1.5 billion. In a second U.S. UK purchase this
week, National Grid is paying $3.2 billion for the New England
Electric System (Moneyline Dec. 14). The world's biggest book
publisher will soon be German-owned. The pending Bertelsmann/
Random House deal is expected to cost $1.2 billion (Newsweek Dec.
7).

Mattel is paying almost $4 billion (NBR Dec. 14) for The Learning
Company. Hughes Electronics, a subsidiary of GM, is buying U.S.
Satellite Broadcasting for $1.3 billion in cash and stock.

DaimlerChrysler may get a stake (AP Dec. 17) in Japan's
debt-laden Nissan Motor Co.

MASSIVE CANADIAN BANKING MERGER BLOCKED BY FORMER CORPORATE
EXECUTIVE-TURNED FINANCE MINISTER

Canada's Finance Minister, Paul Martin, a former corporation
executive, Monday (AP Dec. 14) rejected a merger of two banks
that together would have controlled 70% ($623 billion) of the
banking assets in the country. The proposed marriages would have
wed Royal Bank of Canada (#1) with the Bank of Montreal (#3) and
Canadian Imperial Bank of Commerce (#2) with Toronto-Dominion
Bank (#5). Martin is the front-runner to replace Jean Chretien as
prime minister.

ROYAL DUTCH SHELL TO SHELL OUT FOR CHEVRON?

Royal Dutch Shell (AP Dec. 14) is selling off 40% of its chemical
business and announced its fourth-quarter earnings would be off
by $4.5 billion. It expects $2.5 billion in cost savings by the
year 2001. The world's largest oil company has a $11 billion
global spending program. The revenues of the Hague-based Royal
Dutch Shell company (Houston Business Journal Dec. 11-17) in 1997
were $128 billion with $160 billion in market capitalization. It
has 105,000 employees (9,300 in Houston). Chevron had revenues of
$45.8 billion with $56 billion in market capitalization. The San
Francisco-based oil company employs 39,000 (2,770 in Houston).
Royal Dutch is the parent of Houston-based Shell Oil Company. The
chairman of its managing directors it Mark Moody Stuart. Jack
Little is the CEO of Shell Oil Co. If Royal Dutch and Chevron
combine it will control a 30% market share in the U.S. downstream
market. If the Exxon merger with Mobil goes through it will take
the place of Royal Dutch as the largest oil company in the world.
Chevron (Moneyline Dec. 14) will cut $500 million in costs.

CNN MONEYLINE'S MYRON KANDEL HITS AT CORPORATE JOB CUTS

Myron Kandel, in a rare outrage at business, said that both
Citigroup and Chevron buried the news of layoffs. In the
Citigroup press release, the job cuts were mentioned in the
next-to-last paragraph. Chevron never mentioned any numbers.
Kandel said that three or four years ago stocks rose when
corporations announced job cuts. When Citigroup spend 900 words
before mentioning that 10,000 people would lose their jobs,
Kandel asked: "What does that say about priorities?" The (New
Hour PBS Dec. 15) Citigroup cuts will impact 6% of its global
workforce.

Citigroup will take a $1 billion charge and layoff 8,000
employees to save $1 billion (Moneyline Dec. 14). RJR Nabisco,
the second largest U.S. cigarette maker, is cutting 15% of its
workforce after the $0.45 a pack increase. RJR International
(Moneyline Dec. 14) will lay off 2,900 workers in Russia. When
Citibank and Travelers got married last April, the message was
growth, not job-cutting. Sandy Weill stated on April 6 (Moneyline
Dec. 14): "I think there will be more addititives over time,
rather than contraction." Citigroup said it was short-term pain
for long-term gain.

Ted C. Fishman wrote that Citigroup, for the first time in more
than sixty years (Harpers Dec.), "will combine a banking division
protected by the (taxpayer-backed) FDIC with a major securities
firm, vulnerable to huge losses." He further noted that: "It also
creates an institution so large and powerful that its failure
would destabilize the world financial system. In effect this
means that not only are depositors guaranteed; the entire
institution is." The Citicorp-Travelers bill passed by one vote
last session but was stalled in the Senate. James A. McDermott
(CFR), President of Keefe, Bruyotto & Woods, is recommending
Citigroup stock (NBR Dec. 15) which will pan out over time. He
likes BankOne in Columbus, Ohio, First Union in Charlotte, N.C.,
Mellon Bank in Pittsburg, Northfork Bank Corp in the New York
area, Chase and Citigroup.

SOROS SAYS INTERNATIONAL REGULATION AND INSURANCE NEEDED

At one point in 1994, more than half of the flow into U.S. mutual
funds (Newsweek Dec. 7) went into emerging market funds.
According to CFR Director, George Soros (BB/CFR), the collapse in
Russia and Indonesia was "unintended," but "Malaysia shut itself
off from international capital markets deliberately." Soros says
the choice is international regulation of global markets or
leaving each state to protect itself. He proposed an
International Credit Insurance Corporation in the Financial Times
(Dec. 31, 1997). Soros suggests imposing margin requirements and
hair-cuts (capital requirements) on derivative and swap
transactions and other off-balance sheet items to solve the hedge
fund problem. He favors subordinating the sovereignty of states
to international law and institutions "insofar as there are
collective interests that transcend state boundaries . . . "

Malaysia Prime Minister Mahathir Mohamad (AP Dec. 19) is carrying
out a long-term plan, called Vision 2020, to join the ranks of
rich and industrialized nations by the year 2020.

LUGAR CALLS FOR MORE HEDGE FUND INFORMATION FOR REGULATORS

In the late 1960s about $2 billion was invested (NY Review of
Books Dec. 17) in hedge funds. Today the figure is around $300
billion. There is a $17 trillion global pool of money (Time Dec.
14) belonging to "high-net-worth individuals" that generates more
than $150 billion a year in banking revenue. Senator Richard
Lugar (RS) wants (NBR Dec. 16) hedge funds and financial managers
to provide more information to regulators. He also wants more
prudent oversight by lenders although hedge funds may move
off-shore. More hearings will be held by Lugar next spring.

THE EURO: BACKGROUND ON THE NEW CURRENCY FOR EUROPE

The European Union (Business Unusual CNN Dec. 12) has one-fifth
of the production of the world's goods and services and more
customers than the United States. On January 1, 2002 Euro notes
and coins become the legal currency of Europe. The European
Central Bank will control monetary policy. Twelve and
eleven-year-old children are being shown films showing why one
currency is better than eleven. The early name for the Euro was
"ECU" but the Germans thought it sounded too French. A later name
was "Euro-Mark" but the French thought that sounded too German.

11 countries (AP Dec. 19) will use the euro (Austria, Belgium,
Finland, France, Germany, Ireland, Italy, Luxemborg, the
Netherlands, Portugal and Spain) while Britain, Denmark, Greece
(non-qualifying) and Sweden retain sovereign currencies. The euro
will be worth between $1.10 and $1.20 initially. Stock will trade
in euros. The new currency bloc has 290 million inhabitants.

The euro (Christian Science Monitor Dec. 12) "opens a large
opportunity to replace cash." Armand Linkens, the managing
director of Proton World in Brussels, was quoted: "If we are
ready," the euro could be a gigantic "kick for electronic
purses." Proton is a leading manufacturer of electronic-cash
cards. The UK (Tony Blair) , Germany (Gerhard Schroder) , France
(Lionel Jospin) and Italy (Massimo D'Alema) (Financial Times Dec.
12-13) are led by politicians who belong to the left. Captain
Euro (Wall Street Journal Dec. 14) is being used to teach
European children about the new money.

The President of the European Central Bank, Wim Duisenberg, told
Die Zeit in an interview (AP Dec. 15) that further cuts in
interest rates may follow the debut of the euro on January 1,
1999. Uri Daduch, chief economist for the World Bank, stated
(Business Week Dec. 21) that only prime borrowers "are getting
any money" and "only at spreads that are two or three times
higher than they were." The spreads between Treasuries and
high-risk bonds now are almost at the same level as at the
heighth of the recent liquidity scare. 5-year Treasuries from
three months ago are trading at 10 basis points higher than the
most recent issues.

The European Central Bank has its independence enshrined in the
Maastricht Treaty which says the bank must not "take or seek
instructions" from national governments (The European Nov.
30-Dec. 6). This is in contrast to both the German and U.S.
central banks that are both creatures of statutes that can be
amended. Wim Duisenberg, a socialist politician in the 1970s, is
president of the ECB for now but will be replaced midway through
his term by the governor of the Bank of France, Jean-Calude
Trichner. France and German account for well over half of the GDP
in Euroland. The ECB does its operations behind closed doors and
its minutes will remain unpublished for years. On his trip to
South Korea, Clinton hinted at a new world economic order aimed
at growth.

Germany will take over the rotating EU presidency (DW TV Dec. 15)
in March. Gerhard Schroder is more nationalist than the preceding
German Chancellor and wants to radically reduce Germany's EU
contributions. His position is opposed by Spain which says that
if Germany pays less, the needier countries will receive less.
Joschka Fischer, Germany's Foreign Minister, said: "We know we
are net contributors and will remain net contributors. That is a
consequence of our country's strength." About 17 million (just
under 10%) of Europeans are now unemployed. Schroder, a cigar
smoker, said: "(E)urope must concentrate whatever resources it
has on the issue of employment." Germany (NBR Dec. 18) is cutting
social security contributions (taxes) and increasing taxes on
heating oil and gasoline.

Poland (DW TV Dec. 15), in line now for EU membership soon, has
set up a low-tax foreign investment zone at the same time that
some 145,000 coal jobs and 40,000 steel are being phased out or
privatized. GM is one of the largest beneficiaries and has
created some 3,000 jobs.

Irvin Raskin Levine (CFR), Dean of International Studies at Lynn
University, said that the euro will mostly be good news for
American businesses (NBR Dec. 15). It will reduce the number of
currencies and therefore reduce company costs. Some U.S. banks
will have to pay for the expense of new software, however. He
ended his tribute to the euro by saying that tourists will be
deprived of exotic bills and coins: "A more homogenized world, is
that what we really want?"

VENEZUELA IN THE NEWS THIS WEEK: NEW PRESIDENT SPEAKS OUT

Venezuela is facing a $5 billion budget shortfall next year
(Business Week Dec. 21). Its currency may be overvalued by as
much as 40%. Hugo Chavez, its new past coup- attempting
president, is talking about halting privatization, hiking wages,
cracking down on corruption and providing agricultural subsidies.
About 80% of the people in Venezuela (Christian Science Monitor
Dec. 9) are considered poor. Chavez said that: "The Constitution
was written to include the privileges of the political parties
and to make the system as impervious to change as possible . . .
" He quoted Simon Bolivar: "I am but a blade of grass blowing in
a great hurricane of revolution. I am this, nothing more. I am a
grain of sand. I am a drop of water in a running river."

BRAZIL IN THE NEWS THIS WEEK: CAPITAL FLIGHT DESPITE 30% INTEREST

The rebuff of Cardoso's proposal to increase the social security
taxes of some state workers in Brazil (Business Week Dec. 21)
"has left a very bad taste in everybody's mouth," according to
Walter Stoeppelwerth, director of Latin America research for
Robert Fleming Securities in Sao Paulo. Capital continues to flow
out of Brazil (Business Week Dec. 21) despite real interest rates
as high as 30%. A key part of the Brazilian recovery plan
(Moneyline Dec. 14) is a tax on international transactions. For
the year-to-date, the Brazilian stock market is down 35%, Mexico
down 26% and Argentina and Venezuela down 40% (Moneyline Dec.
14). In the past 12 months foreign direct investment in Brazil
(Business Week Dec. 21) was $24 billion and is predicted to total
$17 billion in 1999. Unemployment, now 8%, may increase to 12% in
1999.

MAI AGREEMENT SAID TO BE ON THE ROCKS

The Multilateral Agreement on Investment (MAI) has collapsed
(Spotlight Newsletter #6). The Organization for Economic
Cooperation and Development (OECD) said on December 4 that
negotiations "are no longer taking place." International business
leaders, however, have pledged to keep pushing for some
investment agreement. Williard Workman, International VP for the
U.S. Chamber of Commerce stated: "There's still a need out there
to have agreed-upon rules governing investment overseas."

GENERAL ECONOMIC NEWS AND NUMBERS

Housing starts (NBR Dec. 16) were down 2.7% last month. The M-2
money supply (NBR Dec. 17) was up $19 billion through December 7.
The October trade deficit was $14.2 billion (News Hour Dec. 17),
down 1.2%. A big rise in farm exports caused the small drop in
the deficit. New jobless benefit claims tumbled by 31,000. Gold
(Feb.) was at $292.90 (-$3.60) (NBR Dec. 17). Commodity prices
are still down (NBR Dec. 17).

MARKET SUFFERING FROM EARNINGS JITTERS

Stocks fell from 9374.27 on November 23 to 8695.60 on Dec. 14
(NBR Dec. 14). This was an 8% decline of the DJIA (700 points)
blamed on "earnings jitters." The DJIA serged 2,000 points in
seven weeks. On Friday the DJIA ended up 81.87 points for the
week (NBC News Dec. 18) at 8903.63. Louise Yamada, Technical
Analyst with Salomon Smith Barney, said it was a consolidation,
not a bear market. Liz Ann Sonders, Managing Director of Avatar
Associates, who manages $3 billion, said the market was suffering
from "whiplash." Avatar has 78% in stock and 22% in cash (NBR
Dec. 14). Sonders said the Fed will wait until later to cut
interest rates further. She likes Microsoft, Lucent Technologies,
Intel, First Star and Painewebber stocks.

TOP-PERFORMING MUTUAL FUNDS

Top Mutual Funds Year-to-Date include (Moneyweek Dec. 11):
Fidelity Magellan (+22.9%), Vanguard Index (+21.7%), Fidelity
Growth & Income (+20.9%), Invest. Co. America (+17.3%) and
Washington Mutual (+15.1%).

INTERNET BUSINESS FAR EXCEEDING PREVIOUS ESTIMATES

James Cash, Professor of Business Administration at Harvard, said
(NBR Dec. 17) that in July of 1997 the Forrester Group predicted
$327 million in internet business trade by 2002. The estimate has
since been raised to $43 billion in 1998 and $1.3 trillion for
2003.

BULLISH STOCK PICKS

It's time to buy, according to Tom Galvin, of Donaldson, Lufkin
and Jenerette (Moneyline Dec. 14): "(W)henever the nattering
nabobs of negativity become pervasive, its always time to lock
and load on stocks, not a time to run for the exits." In another
interview (NBR Dec. 14) he said that most people don't want
President Clinton "taken out." He was also a preliminary guest on
Wall Street Week Dec. 11. Fritz Reynolds, President of Reynolds
Mutual Funds was the featured guest. He is averaging 40% returns.
His picks for core holdings: Microsoft, Intel, Cisco Systems,
Dell, Compac, Lucent Technology, AOL and Yahoo (to some degree).

GENERAL ELECTRIC LOOKING TO DOUBLE-DIGIT GROWTH IN 1999

John "Jack" Welch (CFR) predicts double-digit growth in 1999
(Moneyline Dec. 14) for General Electric. He said 70% of G.E.
businesses were booked through 2000. Welch sees bargains in Asian
financial companies and says G.E. will spend even more than the
$18 billion it spent in Europe in Asia. The front-runners
(Business Week Dec. 21) to replace Welch, when he retires, are
David Calhoun, David Cote, Jeffrey Immelt and James McNerney, Jr.
GE Capital contributed $300 million to General Electric in 1986.
Now its contribution to the GE corporate coffers is $4 billion
annually.

THIRD PART OF TIME SERIES HITS TAX BREAKS WITH VERY FEW REAL
RESULTING JOBS

Louisiana, according to Time Magazine (Nov. 23), canceled $213
million in property taxes owed by Exxon Corp., $140 million in
taxes for Shell Oil Co., $103 million in taxes for International
Paper Company and $96 million in taxes for Dow Chemical Co. A
Louisiana official said companies practice a form of "extortion"
by demanding tax breaks yet give very little back in return. The
average number of new jobs for each $1 million in abatements is
one or two. Time called the Fanjul family of Florida, which owns
one of the nation's largest producers (Flo-Sun Inc.) of raw
sugar, the "First Family of Corporate Welfare." U.S. sugar sells
for more than double the price the rest of the world pays.
Alfonso Fanjul served as co-chairman of Bill Clinton's 1992
Florida campaign. His brother Pepe was national vice-chairman of
finance for Bob Dole's 1996 presidential campaign

TOP HARVARD MONEY MANAGEMENT EXECUTIVES EARN MILLIONS

The top six executives of the Harvard Management Co. (AP Dec. 17)
made combined salaries of more than $45 million last year. The
Harvard-owned company has over $16 billion in nine different
asset classes. Annual growth for the three years ending on June
30 was 24.1%. The part managed by Jonathan Jacobson earned 42.7%
a year. The DJIA averaged 25% over the same three years. The
Harvard million-earners included David Mittelman ($9.8 million),
Philip Gross ($9.7 million), Robert Atchinson ($7.9 million),
Maurice Samuels ($6 million and Jack Meyer, Harvard Management
President ($1.8 million).

DIPLOMAT/INVESTMENT BANKER HOLBROOKE RETURNS TO SERBIA

U.S. Envoy Richard Holbrooke (BB/CFR/TC) was back in Serbia (AP
Dec. 15). The mission (CNN Dec. 14) in Belgrade Tuesday was to
insist that Yugoslavia comply with the UN Resolutions on Kosovo.
The UN also wants three war crimes suspects to be turned over.
Holbrooke said that the latest bloodshed "will not in any way
deter the international community from carrying out its
obligations" to work for peace in the troubled province. He met
with William N. Walker (CFR), head of the Kosovo Verification
Mission. Walker leads the Organization for Security and
Cooperation in Europe team. Holbrooke, on October 12th, brokered
the agreement to end fighting in Kosovo. Its terms were strongly
criticized as "too vague" by Zbigniew Brzezinski (BB/CFR/TC) on
CNN's Crossfire. Holbrooke called for restraint (CNN Dec. 14) on
both sides and said he had just got off the phone with Secretary
of State Albright (CFR/TC).

TURNER COLD WAR SERIES PROVIDED ELITE FOOTAGE LAST WEEK

The CNN Cold War program, "Vietnam 1954-1968," featured (CNN Dec.
11) General Andrew Jackson Goodpaster (BB/CFR), an aide to
Eisenhower, Robert S. McNamara (BB/CFR/TC), Roger Hilsman,
Assistant Secretary, U.S. State Department and Clark Clifford,
Secretary of Defense.

General Andrew Jackson Goodpaster (BB/CFR) served as chairman of
the George C. Marshall Foundation and was Chairman of the
Atlantic Council of the United States.

Roger Hilsman (CFR) spoke on "After the Cold War: The Need for
Intelligence" at the Brookings Institution on April 24, 1998. He
was unable to think of one covert operation that had been
successful. He has authored System Complexity in Political and
Social Life (1996) and will soon publish The Cuban Missile
Crisis: The Struggle Over Policy.

Clark Clifford, once described as "the silver-haired Brahmin of
the nation's political establishment," died at 91 on October 10,
1998. In his last years he faced charges of fraud, conspiracy and
taking bribes in the collapse of the Bank of Credit and Commerce
International. Earlier in 1998, Clifford and Robert A. Altman,
his law partner, made a $5 million settlement with the Federal
Reserve Board. Altman was acquitted in 1993 in New York state
court of charges of bank fraud; indictments against Clifford were
set aside because of his poor health.

ELITES IN GEORGE'S 50 POWER LIST

The just-issued George Power 50 list included: Samuel "Sandy" R.
Berger (CFR) (+2), Bill Clinton (BB/CFR/RS/TC) (+3), William
Cohen (CFR/TC) (+1), Richard Gephardt (CFR) (+3), Newt Gingrich
(CFR) (+3), Al Gore (CFR/M) (+2), Alan Greenspan (CFR/TC) (+3),
Henry Hyde (CFR) (+1), Jessie Jackson (CFR) (+1), Joeseph I.
Lieberman (CFR)(+1), Robert Rubin (BB) (+3), Madeline Albright
(CFR/TC)(-1), Daniel Farrell Burton, Jr. (CFR) (-3), Vernon
Jordan (BB/CFR/TC) (+2), James David Wolfensohn (BB/CFR) (+2),
William Kristol (BB) (+1) and R. Emett Tyrell, Jr. (CFR) (-1).
The plus or minus power ratings (thumbs up or down) were assigned
by the magazine.

CFR FLAGSHIP MAGAZINE CARRIES PRO-INTERNATIONAL CRIMINAL COURT
ARTICLE

Ruth N. Glushien Wedgewood (CFR), a Yale Law Professor and Senior
Fellow at the CFR, lamented (New American Dec. 7) the failure of
the Clinton administration to sign the ICC statute in Rome in
July. The article in the November-December issue of the CFR's
Foreign Affairs, claimed that an opportunity to shape the court
in America's image was lost. Theodor Meron (CFR) stated in the
Washington Post (Oct. 13) that non-parties to the proposed treaty
would have more obligations than party states. The latter are
able to opt out of provisions dealing with war crimes and crimes
that will be added to the court's jurisdiction in the future.
Non-parties may not.

RULING AGAINST IMMUNITY TO BE REVIEWED BY LAW LORDS

On Thursday the highest court of Britain (Reuters Dec. 17)
overturned its ruling that Augusto Pinochet was not immune from
prosecution. Lord Browne-Wilkinson, who presided over the appeal,
said that Lord Hoffman was disqualified from sitting in the case.
A fresh panel of judges will rehear the case in January.

YELTSIN UPDATE: WILL CONTINUE REFORMS

Boris Yeltsin (Reuters Dec. 15) said Tuesday that reforms will
continue as he prepared to meet with visiting Swiss President
Flavio Cotti and Belarus President Alexander Lukashenko. Later on
Tuesday he was shown meeting with FSB head Vladimir Putin who is
investigating the multiple-shooting of parliamentary deputy
Galina Starovoitova. KGB (now FSB) investigator Viktor Cherkessov
has been assigned by authorities in Saint Petersburg to
investigate the case. Sergei Slexeyer, a spokesman for
Starovoitova's Democratic Russia Party, stated (New American Dec.
21): "If Cherkesov's been brought into the case, you can consider
it buried."

RUSSIAN PARLIAMENT GIVES O.K. TO PRINT A BILLION RUBLES

On Wednesday, with inflation running at about 70%, the Russian
parliament (AP Dec. 16) unanimously approved a bill to allow the
printing of $1.2 billion in rubles for the last quarter of 1998.
Exporters will be required to repatriate 75% of their
hard-currency earnings (up from the former 50%) to shore up
foreign currency reserves. Finance Minister Mikhail Zadornov said
that a deal had been reached with lenders to reissue $10 billion
dollars in bonds with maturities of four to five years. Deutche
Bank and Credit Suisse-First Boston denied that such terms had
been reached. The Russian value-added tax is 20%; the profits tax
is 35%. A bill was passed (AP Dec. 18), on first reading, to cut
the value-added tax to 15% in March and 10% in 2000. The profit
tax was cut to 30%. The sales tax on alcohol and gasoline was
increased. The inflation rate is 73.4% (up from 5%) with a ruble
trading at 20.75 a dollar (compared to 6 to the dollar in
August). Unpaid wages (AP Dec. 17) to state workers total $4.1
billion (up from $3.9 billion When Primakov took office in
September). $650 million in rubles was printed in October and
November. In Russia, where the average teacher is paid less than
$25 a month, the total owed to the teachers is $720 million. On
December 11, Russia's gold and currency reserves were $12
billion.

FOREIGN-OWNED BANKING SERVICES MAY BE OFFERED TO ENTICE RUSSIANS
TO UNLOAD THEIR HIDDEN HARD CURRENCY

Moscow may take out loans with private western banks (Business
Week Dec. 21) collateralized by the government's gold. In the
August banking crash, the average Russian lost about $2 billion
(Christian Science Monitor Dec. 9). Estimates of between $40-$60
billion in so-called hard currency is reportedly held by the
"oft-deceived population" in mattresses, floorboards or buried in
kitchen gardens. The Russian economy may (Business Week Dec. 21)
contract by 5% to 7% next year. Russia has asked the London
Economic Club to accept $360 million worth of principal payments,
due on December 2, in long-term bonds, rather than cash. The
grace period before technical default will end on December 23.

Prime Minister Primakov is lately talking about removing the
restrictions that presently bar foreign-owned banks from
providing deposits and loans to private individuals. Vevgeny
Vittenber, an expert with Moscow-based Intelbridge, was quoted:
"As things stand no one is going to trust a Russian bank, or the
government for that matter, for the next three generations." In
early 1991 high-denomination banks notes were eliminated as an
"anti-black market" measure. In 1992 hyperinflation wiped out
most Russian bank savings. Sam Houston of Texas wrote to Andrew
Jackson on January 31, 1843: "To you, General, I find myself
indebted for many principles which I have never abandoned through
life. One is a holy love of country and a willingness to make
every sacrifice to its honor and safety. Next a sacred regard for
its constitution and laws, with an eternal hostility and
opposition to banks."

NEWSWEEK PRINTS EXCLUSIVE RUSSIAN INTERVIEWS WITH MOSCOW MAYOR
LUZHKOV AND GENERAL LEBED

Moscow Mayor Yuri Luzhkov (Newsweek Dec. 14) is "not left or
right." He says the supposedly leftist government "is adopting a
rightest tax code." Russia is not yet selling land. On the
largely missing IMF aid to Russia, he stated: "I don't think it
all went through dirty hands back to western banks." Aleksandr
Lebed, who has increased the collection of taxes in Krasnoyarsk
threefold, said: "The majority of Russians are convinced that
since the U.S. failed to win the cold war, it conducted an
economic diversion and robbed our country." He also stated that
84% of all the country's banking assets are in Moscow "and the
rest of the country suffers from a lack of blood supply."

COMMUNIST MEMBER OF PARLIAMENT CLAIMS THAT YELTSIN'S INNER CIRCLE
IS JEWISH

Viktor Ilyukhin, the Russian Communist head of parliament's
security affairs committee, Tuesday accused Yeltsin and Jews in
his office of waging "genocide" against the Russian people (AP
Dec. 15). Ilyukhin told a panel considering impeachment: "The
large-scale genocide wouldn't have been possible if Yeltsin's
inner circle had consisted of the main ethnic groups, and not
exclusively of one group, the Jews." This outburst came after
last month's move to bring back the statue of Felix Dzerzhinsky,
former head of the Soviet secret police, that was toppled in
1991. After the session on Tuesday, Ilyukhin told journalists:
"Representatives of one ethnic group have been dominant in the
president's inner circle and the government during the past seven
years. I have already named this ethnic group." In October,
Albert Makashove, another Communist lawmaker, made an anti-Jewish
ethnic slur which went uncensored.

On Wednesday (AP Dec. 16th) Boris Berezovsky, a Jewish business
tycoon, called for a ban on the Communist Party and said that, if
needed, force should be used to prevent Russian law-makers from
making anti-Semitic remarks. James P. Rubin (CFR) stated for the
U.S. State Department: "We join with Russian leaders in
condemning these outrageous anti-Semitic statements." The issue,
said Rubin, had been raised when Vice-President Gore (CFR/M) and
Madeleine Albright (CFR/TC) recently met with Russian officials.
Ilyukhin responded on Wednesday: "What kind of democracy is it
when a Russian man can't speak the truth?" Yeltsin, briefly, in
the early 1990s did ban the Communist Party before it returned as
the largest faction in Russia's lower house.

VATICAN OFFICIAL CRITICIZES JEWS FOR INJURIES TO CHURCH

Jesuit Fr. Kurt-Peter Gumpel (National Catholic Reporter Dec. 11)
said in an interview with the Vienna-based Der Standard, which
appeared November 23, that: "It is a historical fact that many of
the Bolsheviks who persecuted the Catholic church as well as the
orthodox church in Russia were Jews. That is the simple truth."
He further stated: "If you've read the Talmud, as I have, you
know that it says the most hateful things about Jesus and Our
Lady, suggesting that she was a public woman, an adulteress."
Gerhard Bodendorfer, the head of the coordinating body for
Christian-Jewish cooperation in Austria, said: "I am amazed that
an official collaborator in a highly responsible Vatican position
could hold these old, obviously undistilled prejudices that are
still hawked today." Gumpel, who is Jewish, said the Communist
Manifesto had Jewish origins and that 80% of the original (1917)
Soviet regime was Jewish.

PRIME MINISTER NETANYAHU WANTS PALESTINIANS TO TEACH THEIR
CHILDREN THAT ISRAEL IS HERE TO STAY

Benjamin Netanyahu accused the Palestinians of not honoring their
promises (Fox News Dec. 13): "The Palestinians, especially in the
last month, have basically reneged on all the promises they gave
us . . . " He detailed what is expected of them: "(W)e have all
these outstanding things they are supposed to do: collect illegal
weapons, reduce the size of their armed forces and especially
stop the fomenting of violence." The close relationship to the
U.S. was described: "The United States and Israel are kindred
spirits. We're sister democracies and we have so much in common
in our values and approach to society and life. And obviously the
United States is our great ally."

Netanyahu gave his vision of the future, which includes
education: "We want to see the Palestinian leadership do
something that they haven't done really since this conflict
between us and the Palestinians erupted in the 1920s. For the
first time after nearly eighty years of conflict, I want them to
unmistakeably stand up and stop the campaign against Israel. Not
only be tearing up that covenant, which I hope they will do
tommorrow, but by backing it up with a forceful action against
those who would destroy Israel, the terrorist organization, the
terrorist infrastructure, to collect those illegal weapons, and
to tell their kids, in their educational system, in their
schools, Israel is here to stay. We'll make peace with Israel,
not because it is strong, not because it will fight to defend
itself, but because it is right. Because in the small space
between the Jordan River and the sea, this tiny land, there are
two peoples who will have to learn to live side-by-side. And when
I see that happen, then I will know that we have peace . . . I
said to the President today, you know when there's real peace
here? When Israelis can walk into Gaza. Right now it's virtually
a death sentence. No Israeli is doing it for fear of their lives.
But Palestinians walk freely on the streets of Israel . . . I
would like to see a change of heart brought about by a change in
conduct of the Palestinian leadership that teaches their people
that peace is not ephermeral, it is not a tactical thing, that
you sign in order to get things from Israel so you can attack
Israel at a later date. Peace is peace and it's here to stay.
That's what I want to see and that's what I dream about. That's
what I am working for."

In a three-way "trilateral" summit (Reuters Dec. 15), President
Clinton was unable to convince Netanyahu to withdraw on schedule
from more of the West Bank. He said: "I have achieved what I came
here to achieve." The Israeli Prime Minister stated (CNN Dec.
14): "I think the Americans are wise enough to understand that no
amount of pressure can force Israel to relinquish its capital,
Jerusalem, that no amount of pressure will force us to release
terrorist murderers . . . " Netanyahu's office published a
"breach list" of 12 violations or unfulfilled commitments which
included not declaring an independent state unilaterally,
accepting Israel's criteria for the release of prisoners,
confiscation of illegal weapons, cutting the size of the
Palestinian police force, clamping down on anti-Israel incitement
and curbing of violence. Tuesday a joint steering committee met
in Jerusalem to consider several issues -- including weapon
confiscations. Clinton was sharply rebuked (AP Dec. 15) by
Netanyahu for his comments about the plight of children of jailed
Palestinians. Of the 1,700 Palestinians jailed by the Israelis,
250 were released last month -- mostly common thieves according
to some. Clinton did succeed in getting the assembled
Palestinians to raise their hands (rather than vote) in favor of
eliminating anti-Israeli clauses in the PLO covenant. The crowd
cheered (Reuters Dec. 14) when he said that peace had to involve
"legitimate rights for Palestinians" but went mute when he called
for "real security for Israel." After the show of hands, Clinton
stated (News Hour PBS Dec. 14): "I thank you for your rejection,
fully, finally and forever, of the passages in the Palestinian
charter calling for the destruction of Israel." Israeli Political
Commentator Be'ev Chafets said that in return for a dead
covenant, Arafat got (CNN Dec. 14) "a virtual American
declaration of support for Palestinian sovereignty. It would say
that's one of the best deals since the Indians sold Manhattan."

Andrew Young (CFR/TC) once lost his job as UN Ambassador after
meeting with PLO representatives in New York. In 1993, when
Yitzhak Rabin (33rd M) shook Arafat's hand, at the White House
meeting to seal the Oslo accords, it (Austin American- Statesman
Dec. 13) became acceptable for American to meet openly with the
PLO. Efraim Inbar, an Israeli political scientist, said it was
the Israelis who gave Arafat his "kosher certificate."

Yitzak Rabin once said that the Palestinians could crush
terrorist groups much easier than Israel because they had no
supreme court and no human-rights watchdogs. Some 150 supporters
of Arafat's political opposition (Financial Times Oct 21) have
been rounded up after tips from the Israelis. The Palestinian
police have locked up dozens of suspects, often from their homes,
to face midnight trials, without being allowed to see a lawyer.
When asked about the Palestinian effort to collect Arab guns (New
York Times Dec. 12), Albright stated: "Well. that process has
begun, and it needs to continue. And I'm not going to
characterize our level of contentment at the moment."

Clinton and Arafat, with wives in tow, toured Bethlehem together
where the president hung an ornament on a Christmas tree (Reuters
Dec. 15). Hanan Ashrawi, a PNC Member, said (CNN Dec. 14): "It
was a mission impossible from the beginning because Netanyahu and
the Israeli government had no intention of compliance." Leslie
Susser, another Israeli Political Analyst, said (CNN Dec. 14):
"All situations for Mr. Netanyehu are adversarial and there is
only one winner."

Martin Woollacott (World Press Review January 1999) wrote on
November 1: "The essence of the Israeli position has been to
demand security guarantees so tight that they cannot be
fulfilled. However hard he tries . . . Arafat cannot give Israel
total security against every suicide bomber and every extremist
group." He added: "As violations almost inevitably occur, they
will provide Netanyahu with opportunities to denounce the
Palestinians and suspend any territorial transfers or to take an
even harder line in the negotiations over the final status of the
Palestinian entity." Woollacott predicted: "The state that might
emerge at the end of a process dominated by Netanyahu and Sharon
would indeed be a woeful thing."

President Clinton first visited Israel in the 1980s (U.S. News
Dec. 14) with the Rev. W.O. Vaught. The latter told Clinton: "If
you abandon Israel, God will never forgive you." It was Clinton's
4th Middle East trip as president and served to strengthen his
bonds with the Jewish voters back home. Although Jews are 3% of
the total U.S. population, they accounted for 12% of the vote
last month in New York, 9% in Illinois and 4% in California. A
senior White House official was quoted: "Any serious presidential
candidate has to have a policy towards Israel and a relationship
with key actors" there.

On PBS, in a story entitled "Where Is Wye?" the guests
interviewed by Phil Ponce were Robert Barry Satloff (CFR),
Executive Director of the Washington Institute for Near East
Policy and Rashid Khalidi, Professor of Middle East History and
Director of the Center for International Studies, University of
Chicago. Satloff had just returned from a visit to Israel, Garza
and the West Bank. He met with a senior member of Hamas that was
not in jail and was disappointed to learn that not one Hamas
organization had been shut down and that no complaints were being
made about Arafat. No crackdowns are yet being made on the
terrorist infrastructure. Kahlidi said that the Hamas
organization provides help to kindergartens, schools, nurseries
and so forth. Hamas does many important social things that the
Israelis are trying to shut-down. He said that Israel had
"superior power" at the Wye conference. Despite the agreement
that there be no changes in the status quo, Israeli has roared
ahead with expansion of settlements, confiscating land and
building bypass roads. While Israel is complaining about
Palestinian statements, the Palestinians are protesting, in vain,
against Israeli actions that have, in the past six to seven
years, caused massive changes on the ground. While Clinton's
visit gave the Palestinians an "emotional boost" that will last a
few days, they ultimately face disappointment on the things that
really matter in the long run.

Frank Sesno (CFR) filled-in for Wolf Blitzer (CNN Dec. 15) while
Blitzer was on his way back from covering Clinton in Israel. His
guests included Richard "Dick" Andrew Gephardt (CFR). Blitzer
said that Clinton was the only outsider who could keep the peace
process going and that Clinton would be available all day when he
got back to the White House if House members wanted to talk with
him about impeachment.

When the Wye accords were being negotiated (Edward Said World
Press Review January 1999), the U.S. press "reported the
proceedings with a flagrant disregard of the facts. No one
bothered to point out . . . that no Jewish settlements are to be
given up, or that land supposedly being given to Palestinian
leader Yasser Arafat's corrupt Palestinian Authority was broken
down into bits and pieces, all of it subject to Israel's choice
of date and location . . . the Palestinian areas are for the most
part non-contiguous and all no free passage between them. Of
course, Jerusalem remains off-limits to residents of Gaza and the
West Bank." The relationship was described: "The Israelis will
continue to be the masters, the Palestinians the abject slaves."

Thousands of Palestinians changed their pro-U.S. tune (AP Dec.
17th) and chanted "Death to Clinton."

Clinton said (New Hour PBS Dec. 15): "We believe in keeping to
these (Wye) schedules as much as possible."

FULL TEXT OF THE WYE RIVER ACCORD

I. FURTHER REDEPLOYMENTS

A. Phase One and Two Further Redeployments

1. Pursuant to the Interim Agreement and subsequent agreements,
the Israeli side's implementation of the first and second F.R.D.
will consist of the transfer to the Palestinian side of 13% from
Area C as follows:

1% to Area (A) 12% to Area (B)

The Palestinian side has informed that it will allocate an
area/areas amounting to 3% from the above Area (B) to be
designated as Green Areas and/or Nature Reserves. The Palestinian
side has further informed that they will act according to the
established scientific standards, and that therefore there will
be no changes in the status of these areas, without prejudice to
the rights of the existing inhabitants in these areas including
Bedouins; while these standards do not allow new construction in
these areas, existing roads and buildings may be maintained.

The Israeli side will retain in these Green Areas/Nature Reserves
the overriding security responsibility for the purpose of
protecting Israelis and confronting the threat of terrorism.
Activities and movements of the Palestinian Police forces may be
carried out after coordination and confirmation; the Israeli side
will respond to such requests expeditiously.

2. As part of the foregoing implementation of the first and
second F.R.D., 14.2% from Area (B) will become Area (A).

B. Third Phase of Further Redeployments

With regard to the terms of the Interim Agreement and of
Secretary Christopher's letters to the two sides of January 17,
1997 relating to the further redeployment process, there will be
a committee to address this question. The United States will be
briefed regularly.

II. SECURITY

In the provisions on security arrangements of the Interim
Agreement, the Palestinian side agreed to take all measures
necessary in order to prevent acts of terrorism, crime and
hostilities directed against the Israeli side, against
individuals falling under the Israeli side's authority and
against their property, just as the Israeli side agreed to take
all measures necessary in order to prevent acts of terrorism,
crime and hostilities directed against the Palestinian side,
against individuals falling under the Palestinian side's
authority and against their property. The two sides also agreed
to take legal measures against offenders within their
jurisdiction and to prevent incitement against each other by any
organizations, groups or individuals within their jurisdiction.

Both sides recognize that it is in their vital interests to
combat terrorism and fight violence in accordance with Annex I of
the Interim Agreement and the Note for the Record. They also
recognize that the struggle against terror and violence must be
comprehensive in that it deals with terrorists, the terror
support structure, and the environment conducive to the support
of terror. It must be continuous and constant over a long-term,
in that there can be no pauses in the work against terrorists and
their structure. It must be cooperative in that no effort can be
fully effective without Israeli-Palestinian cooperation and the
continuous exchange of information, concepts, and actions.

Pursuant to the prior agreements, the Palestinian side's
implementation of its responsibilities for security, security
cooperation, and other issues will be as detailed below during
the time periods specified in the attached time line:

A. Security Actions

1. Outlawing and Combating Terrorist Organizations

(a) The Palestinian side will make known its policy of zero
tolerance for terror and violence against both sides.

(b) A work plan developed by the Palestinian side will be shared
with the U.S. and thereafter implementation will begin
immediately to ensure the systematic and effective combat of
terrorist organizations and their infrastructure.

(c) In addition to the bilateral Israeli-Palestinian security
cooperation, a U.S.-Palestinian committee will meet biweekly to
review the steps being taken to eliminate terrorists calls and
the support structure that plans, finances, supplies and abets
terror. In these meetings, the Palestinian side will inform the
U.S. fully of the actions it has taken to outlaw all
organizations (or wings of organizations, as appropriate) of a
military, terrorist or violent character and their support
structure and to prevent them from operating in area under its
jurisdiction.

(d) The Palestinian side will apprehend the specific individuals
suspected of perpetrating acts of violence and terror for the
purpose of further investigation, and prosecution and punishment
of all persons involved in acts of violence and terror.

(e) A U.S.-Palestinian committee will meet to review and evaluate
information pertinent to the decisions on prosecution, punishment
or other legal measures which affect the status of individuals
suspected of abetting or perpetrating acts of violence and
terror.

2. Prohibiting Illegal Weapons

(a) The Palestinian side will ensure an effective legal framework
is in place to criminalize, in conformity with the prior
agreements, any importation, manufacturing or unlicensed sale,
acquisition or possession of firearms, ammunition or weapons in
areas under Palestinian jurisdiction.

(b) In addition, the Palestinian side will establish and
vigorously and continuously implement a systematic program for
the collection and appropriate handling of all such illegal items
it accordance with the prior agreements. The U.S. has agreed to
assist in carrying out this program.

(c) A U.S.-Palestinian-Israeli committee will be established to
assist and enhance cooperation in preventing the smuggling or
other unauthorized introduction of weapons or explosive materials
into areas under Palestinian jurisdiction.

3. Prevention Incitement

(a) Drawing on relevant international practice and pursuant to
Article XXII (1) of the Interim Agreement and the Note for the
Record, the Palestinian side will issue a decree prohibiting all
forms of incitement to violence or terror, and establishing
mechanisms for acting systematically against all expressions or
threats of violence or terror. This decree will be comparable to
the existing Israeli legislation which deals with the same
subject.

(b) A U.S.-Palestinian-Israeli committee will meet on a regular
basis to monitor cases of possible incitement to violence or
terror and to make recommendations and reports on how to prevent
such incitement. The Israeli, Palestinian and U.S. sides will
each appoint a media, specialist, a law enforcement
representative, an educational specialist and a current or former
elected official to the committee.

B. Security Cooperation

The two sides agree that their security cooperation will be based
on a spirit of partnership and will include, among other things,
the following steps:

1. Bilateral Cooperation

There will be full bilateral security cooperation between the two
sides which will be continuous, intensive and comprehensive.

2. Forensic Cooperation

There will be an exchange of forensic expertise, training, and
other assistance.

3. Trilateral Committee

In addition to the bilateral Israeli-Palestinian security
cooperation, a high-ranking U.S.-Palestinian-Israeli committee
will meet as required and not less than biweekly to assess
current threats, deal with any impediments to effective security
cooperation and coordination and address the steps being taken to
combat terror and terrorist organizations. The committee will
also serve as a forum to address the issue of external support
for terror. In these meetings, the Palestinian side will fully
inform the members of the committee of the results of its
investigations concerning terrorist suspects already in custody
and the participants will exchange additional relevant
information. The committee will report regularly to the leaders
of the two sides on the status of cooperation, the results of the
meetings and its recommendations.

C. Other Issues

(a) The Palestinian side will provide a list of its policemen to
the Israeli side in conformity with the prior agreements.

(b) Should the Palestinian side request technical assistance, the
U.S. has indicated its willingness to help meet those needs in
cooperation with other donors.

(c) The Monitoring and Steering Committee will, as part of its
functions, monitor the implementation of this provision and brief
the U.S.

2. PLO Charter

The Executive Committee of the Palestine Liberation Organization
and the Palestinian Central Council will reaffirm the letter of
22 January 1998 from PLO Chairman Yasir Arafat to President
Clinton concerning the nullification of the Palestinian National
Charter provisions that are inconsistent with the letters
exchanged between the PLO and the Government of Israel on 9-10
September 1993. PLO Chairman Arafat, the Speaker of the Palestine
National Council, and the Speaker of the Palestinian Council will
invite the members of the PNC, as well as the members of the
Central Council, the Council, and the Palestinian Heads of
Ministries to a meeting to be addressed by President Clinton to
reaffirm their support for the peace process and the
aforementioned decisions of the Executive Committee and the
Central Council.

3. Legal Assistance in Criminal Matters

Among other forms of legal assistance in criminal matters, the
requests for arrest and transfer of suspects and defendants
pursuant to Article II (7) of Annex IV of the Interim Agreement
will be submitted (or resubmitted) through the mechanism of the
Joint Israeli-Palestinian Legal Committee and will be responded
to in conformity with Article II (7) (f) of Annex IV of the
Interim Agreement within the 12 week period. Requests submitted
after the eighth week will be responded to in conformity with
Article II (7) (f) within four weeks of their submission. The
United States has been requested by the sides to report on a
regular basis on the stops being taken to respond to the above
requests.

4. Human Rights and the Rule of Law

Pursuant to Article XI (1) of Annex I of the Interim Agreement,
and without derogating from the above, the Palestinian Police
will exercise powers and responsibilities to implement this
Memorandum with due regard to internationally accepted norms of
human rights and the rule of law, and will be guided by the need
to protect the public, respect human dignity, and avoid
harassment.

III. INTERIM COMMITTEES AND ECONOMIC ISSUES

1. The Israeli and Palestinian sides reaffirm their commitment to
enhancing their relationship and agree on the need actively to
promote economic development in the West Bank and Gaza. In this
regard, the parties agree to continue or to reactivate all
standing committees established by the Interim Agreement,
including the Monitoring and Steering Committee, the Joint
Economic Committee (JEC), the Civil Affairs Committee (CAC), the
Legal Committee, and the Standing Cooperation Committee.

2. The Israeli and Palestinian sides have agreed on arrangements
which will permit the timely opening of the Gaza Industrial
Estate. They also have concluded a "Protocol Regarding the
Establishment and Operation of the International Airport in the
Gaza Strip During the Interim Period."

3. Both sides will renew negotiations on Safe Passage
immediately. As regards the southern route, the sides will make
best efforts to conclude the agreement within a week of the entry
into force of this Memorandum. Operation of the southern route
will start as soon as possible thereafter. As regards the
northern route, negotiations will continue with the goal of
reaching agreement as soon as possible. Implementation will take
place expeditiously thereafter.

4. The Israeli and Palestinian sides acknowledge the great
importance of the Port of Gaza for the development of the
Palestinian economy, and the expansion of Palestinian trade. They
commit themselves to proceeding without delay to conclude an
agreement to allow the construction and operation of the port in
accordance with the prior agreements. The Israeli-Palestinian
Committee will reactivate its work immediately with a goal of
concluding the protocol within 60 days, which will allow
commencement of the construction of the port.

5. The two sides recognize that unresolved legal issues adversely
affect the relationship between the two peoples. They therefore
will accelerate efforts through the Legal Committee to address
outstanding legal issues and to implement solutions to these
issues in the shortest possible period. The Palestinian side will
provide to the Israeli side copies of all of its laws in effect.

6. The Israeli and Palestinian sides also will launch a strategic
economic dialogue to enhance their economic relationship. They
will establish within the framework of the JEC an Ad Hoc
Committee for this purpose. The committee will review the
following four issues: (1) Israeli purchase taxes; (2)
cooperation in combating vehicle theft; (3) dealing with unpaid
Palestinian debts; and (4) the impact of Israeli standards as
barriers to trade and the expansion of the A1 and A2 lists. The
committee will submit an interim report within three weeks of the
entry into force of this Memorandum, and within six weeks will
submit its conclusions and recommendations to be implemented.

7. The two sides agree on the importance of continued
international donor assistance to facilitate implementation by
both sides of agreements reached. They also recognize the need
for enhanced donor support for economic development in the West
Bank and Gaza. They agree to jointly approach the donor community
to organize a Ministerial Conference before the end of 1998 to
seek pledges for enhanced levels of assistance.

IV. PERMANENT STATUS NEGOTIATIONS

The two sides will immediately resume permanent status
negotiations on an accelerated basis and will make a determined
effort to achieve the mutual goal of reaching an agreement by May
4, 1999. The negotiations will be continuous and without
interruption. The United States has expressed its willingness to
facilitate these negotiations.

V. UNILATERAL ACTIONS

Recognizing the necessity to create a positive environment for
the negotiations, neither side shall initiate or take any step
that will change the status of the West Bank and the Gaza Strip
in accordance with the Interim Agreement.

ATTACHMENT: Time Line

This Memorandum will enter into force ten days from the date of
signature.

Done at Washington, DC this 23rd day of October 1998.

For the Government of the State of Israel

For the PLO

Witnessed by: The United States of America

TIME LINE

Note: Parenthetical references below are to paragraphs in "The
Wye River Memorandum" to which this time line is an integral
attachment. Topics not included in the time line follow the
schedule provided for in the text of the memorandum.

1. Upon Entry into Force of the Memorandum:

-- Third further redeployment committee starts (I (B))

-- Palestinian security work plan shared with the U.S. (II
(A)(1)(b))

-- Full bilateral security cooperation (II (B)(1))

-- Trilateral security cooperation committee starts (II (B)(3))

-- Interim committees resume and continue; Ad Hoc Economic
Committee starts (III)

-- Accelerated permanent status negotiations start (IV)

2. Entry into Force - Week 2:

-- Security work plan implementation begins (II (A)(1)(b)); (II
(A)(1)(c)) committee starts

-- Illegal weapons framework in place (II (A)(2)(a)); Palestinian
implementation report (II (A)(2)(b);

-- Anti-incitement committee starts (II (A)(3)(b)); decree issued
(II (A)(3)(a))

-- PLO Executive Committee reaffirms Charter letter (II (C)(2))

-- Stage 1 of F.R.D. implementation: 2% C to B, 7.1% B to A.
Israeli officials acquaint their Palestinian counterparts as
required with areas; F.R.D. carried out; report on F.R.D.
implementation (I(A))

3. Week 2-6:

-- Palestinian Central Council reaffirms Charter letter (weeks
two to four) (II (C)(2))

-- PNC and other PLO organizations reaffirm Charter letter (weeks
four to six) (II (C)(2))

-- Establishment of weapons collection program (II (A)(2)(b)) and
collection stage (II (A)(2)(c)); committee starts and reports an
activities

-- Anti-incitement committee report (II (A)(3)(b))

-- Ad Hoc Economic Committee: interim report at week three; final
report at week six (III)

-- Policemen list (II (C)(1)(a)), Monitoring and Steering
Committee review starts (II (C)(1)(c))

-- Stage 2 of F.R.D. implementation: 5% C to B. Israeli officials
acquaint their Palestinian counterparts as required with areas;
F.R.D. carried out; report on F.R.D. implementation (I (A))

4. Week 6-12:

-- Weapons collection stage (II (A)(2)(b)); (II (A)(2)(c))
committee report on its activities.

-- Anti-Incitement committees report (II (A)(3)(b))

-- Monitoring and Steering Committee briefs U.S. on policemen
list (II (C)(1)(c))

-- Stage 3 of F.R.D. implementation: 5% C to B, 1% C to A, 7.1% B
to A -- Israeli officials acquaint Palestinian counterparts as
required with areas; F.R.D. carried out; report on F.R.D.
implementation (I (A))

5. After Week 12:

Activities described in the Memorandum continue as appropriate
and if necessary, including;

-- Trilateral security cooperation committee (II (B)(3))

-- (II (A)(1)(c)) committee

-- (II (A)(1)(e)) committee

-- Anti-incitement committee (II (A)(3)(b))

-- Third Phase F.R.D. Committee (I (B))

-- Interim Committees (III)

-- Accelerated permanent status negotiations (IV)

CHINA NEWS THIS WEEK: TRADE BALANCE WITH U.S., TOUGH TAX
COLLECTORS AND NO OPPOSITION PARTY

David L. Aaron (CFR), Undersecretary of Commerce, told a
think-tank in Washington on Monday about the U.S. and China: "It
may well be that trade is the most disturbing factor in the
relationship." China has a projected $60 billion edge in its
trading with the U.S. (AP Dec. 15). China is enforcing stiff
penalties (Reuters Dec. 15) for tax evasion that include the
death penalty. Vice Premier Li Lanqing was quoted Tuesday by a
German financial newspaper that tax officials "should have an
iron face, an iron heart and an iron hand." In China collected
taxes amount to almost 11% of its GNP. Robert Murdock, who fell
from grace in 1993 after saying satellite TV and modern
communications posed an "unambiguous threat to totalitarian
regimes everywhere," is now back in good graces with the Chinese
(Financial Times Dec. 12-13). The CEO and Chairman of News
Corporation had a one-hour meeting with President Zemin with
resulting front-page smiling coverage in the China Daily
newspaper. Murdock's HarperCollins publishing group, earlier this
year, dropped its plans to publish a book by Chris Patten, the
last UK governor of Hong Kong. China put two opposition leaders
on trial Thursday (Austin American-Statesman Dec. 18) on charges
of subversion that could bring life sentences. Wang Youcai and
Qin Yongmin were not allowed lawyers for their quick, closed
two-and-a-half hour trials. More than thirty individuals have
been detained or questioned in an 18-day crackdown. China's
President Ziang Zemin said Friday (Austin American-Statesman Dec.
19) that those who challenge the Communist Party's political
monopoly will be quashed: "The western mode of political systems
must never be copied." Xu Wenli will stand trial on Monday.

JAPAN: ABOUT TO BE FORECLOSED ON BY INTERNATIONAL BANKERS?

Japan's corporate bankruptcies fell 4.6% in November (AP Dec. 14)
as compared to a year earlier. The first drop in 18 months came
as a quarter business survey showed business confidence at a
record low. Arthur Alexander, President of the Japan Economic
Institute, said that the combination of reduced consumption and
weak investment was causing a stalling economy. Banking
regulators (Moneyline Dec. 14) seized The Nippon Credit Bank Ltd.
which has been insolvent since March with $30 billion in bad
loans. Richard Jerram, Chief Economist with ING Barings, Japan,
saw this as a positive development (Moneyline Dec. 14). Several
Japanese banks (AP Dec. 18) may sue the Minister of Finance for
hiding the size of bad loans at Nippon Credit Bank Ltd. They are
among the 34 finance companies that loaned Nippon $1.8 billion
last year in a ministry-orchestrated rescue. Nippon will be
nationalized which will give the finance companies little chance
to recover their loans. High tariffs on rice will begin in April
(AP Dec. 17). Thomas S. Foley (BB/CFR/TC), former Speaker of the
U.S. House and now U.S. Ambassador to Japan, said the tariff
could "cripple" exports of U.S. rice. The Japanese responded that
the tariff conforms to W.T.O. regulations. Japan now imports 6.4%
of its annual rice consumption.

ALSO IN THE NEWS

On PBS William Frank Buckley, Jr. (BB/CFR/S&B 1950) debated
impeachment (News Hour PBS Dec. 14). James A. Baker III (CFR) was
interviewed on Moneyline Dec. 15.

Gorby follower Ted Turner (M) made a speech to the Society of
Environmental Journalists in Atlanta in which (New American Dec.
7) he distinguished between "a well-organized bunch of smart
people or (the) disorganized dumb . . . " He said the
Judeo-Christian religion was "not . . environmentally friendly .
. . "

When the social security fund of about $99 billion is excluded
(New American Dec. 21) the overall budget deficit is around $28
billion.

Senator William V. Roth, Jr. (CFR/TC), President of the American
Assembly, has issued a report, NATO In the 20th Century, urging
the alliance to update its strategic concept by expanding its
area of operations and claiming the authority to act without
specific authority from the UN.

The David and Lucille Packard Foundation, the third largest
tax-exempt foundation in the U.S., with assets of $9 billion,
announced in November (New American Dec. 21) a grant of $333
million for international population control and "reproductive
health" programs.

Israel now has (AP Dec. 17) an operational Arrow anti-missile
radar system named "Green Pine" that is capable of tracking a
ballistic missile in flight, and an Israeli satellite called
Amos.

Clinton will make another try (Austin American-Statesman Dec. 13)
for some $20 billion for child care. Bruce Reed, Clinton's
domestic policy adviser, said: "We're not going to just drop the
subject."

At least eight members of the New Labor government in England
(New American Dec. 21) are homosexuals. The Sun, Britain's most
popular newspaper, has editorialized that Britain is being run by
a "cabal" of homosexuals.

Ehud Barak, Israeli opposition Labor leader, accused Netanyahu on
Thursday (Reuters Dec. 17) of caving in to right-wing extremists.
Barak is Israel's most decorated soldier and was once Netanyahu's
army commander.

Goldman Sachs, despite an 81% decline in quarterly earnings
(Moneyline Dec. 14), still plans to go public.

Mexico is providing debt relief (Austin American-Statesman Dec.
18) to include a discount of up to 60% for fisheries and farmers.

On Friday the Protestant Loyalist Volunteer Force (LVF) began
(Reuters Dec. 18) turning in its weapons over to an international
commission (AP Dec. 18) for grinding. The IRA has said it has no
intention of disarming immediately.

Boston is now requiring city police officers to use gun locks
(Austin American-Statesman Dec. 16).

QUOTES

"So valuable is that edge that to play the market we cede our
trust to connivers, our legal rights to a system that denies us
those rights, and our moral authority to those who with a wink
and a nudge invite us to join their scam. If we get burned, well,
hell, it was our own fault for reaching." -- Ted C. Fishman
(Harpers Dec. 1998)

"If Jesus Christ had taken a poll, he would never have preached
the gospel" -- Henry Hyde (CFR), ABC News Dec. 13

"When a society is perishing, the true advice to give those who
would restore it is to recall it to the principles from which it
sprang." -- Pope Leo XIII, Encyclical on Labor, Paul Harvey,
AUTUMN OF LIBERTY 13 (1954).

"People will not look forward to posterity who never look
backwards to their ancestors." -- Edmund Burke [William P. Hoar,
ARCHITECTS OF CONSPIRACY x (1984)]

"The handsomest pictures in the history of individuals are the
pictures of those who have stood out independent of government,--
individuals who made such replies as that historic reply of two
recalcitrant subjects to whom the king said, "Do you know that I
can hang you?' 'Aye,' they replied, 'and we can die cursing you.'
We should crave the spirit that will not be subdued: only under
the government of unsubduable individual spirits can shall we
return to the great days of Jefferson." -- Woodrow Wilson (April
16, 1906)


http://www.biblebelievers.org.au/

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                      *Mike Spitzer*     <[EMAIL PROTECTED]>
                         ~~~~~~~~          <[EMAIL PROTECTED]>

   The Best Way To Destroy Enemies Is To Change Them To Friends
       Shalom, A Salaam Aleikum, and to all, A Good Day.
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