New US strategy seeks to strengthen Pakistan

WASHINGTON: The Obama administration’s new strategy for Pakistan not only seeks a greater US engagement with the country but also tries to redefine its relations with neighbouring countries, a senior State Department official said on Monday while outlining salient features of the policy at a Washington think-tank.

Recent statements by other US officials also show that the new strategy envisages Pakistan as a Muslim democratic state but recognises the army as a key player in the country’s domestic affairs.

In these statements, the officials made no commitment to prop up the Zardari government and instead urged both opposition and government forces to promote a culture of political tolerance.

In a lecture at the Brookings Institution, Deputy Secretary of State James Steinberg explained how the United States would like India to help Pakistan deal with the problem of extremism.

In return, the US expected Pakistan to recognise that terrorism, and not India, was its real enemy, he said.

‘I think it will be important for India to make clear that as Pakistan takes steps to deal with extremists on its own territory that India will be supportive of that,’ Mr Steinberg said.

But he acknowledged that it would not be easy to reduce tensions between South Asia’s two nuclear-armed neighbours.

‘There is obviously a complex history between the two countries but we will encourage India to see that it has a big stake in the efforts that we will be advocating to work both with Afghanistan and Pakistan,’ he said.

The Obama administration is expected to unveil its new strategy on fighting extremists in Afghanistan and Pakistan later this week. Earlier Monday, US Special Envoy for Afghanistan and Pakistan Richard Holbrooke met America’s Nato allies to outline the new policy.

Ambassador Holbrooke, Senator John Kerry and other officials and lawmakers have indicated earlier that in the new strategy the Obama administration will seek to drastically increase US aid to Pakistan.

This means that the non-military assistance could rise to three times the current $450 million a year. Military aid, now running at $300 million a year, could also rise, although by a lesser amount.

Senator Kerry, supports giving an extra $1.5 billion a year in non-military aid to Pakistan over five years, amounting to a total of $7.5 billion. US officials say that this increase will be linked to a broad-based US programme focusing on the building up of infrastructure and on economic development to fight extremism.

American officials familiar with the new strategy say that Washington also wants to strengthen democratic institutions in Pakistan, pointing out the country has been ruled by the military for more than half of its 61 years of existence.

The officials noted that the US played a key role in defusing tensions between President Asif Ali Zardari and opposition leader Nawaz Sharif earlier this month.

US policymakers fear Pakistan’s political turmoil could destabilise the country, enabling militants to access nuclear weapons. They also fear that turmoil in Pakistan could worsen an already tense situation in Afghanistan.

The US administration, however, conveyed to the rulers in Islamabad that their commitment is to democracy and not to an individual. That’s why they disliked Mr Zardari’s efforts to debar the Sharif brothers from politics.

During the judicial crisis, the Americans maintained a regular contact with the Pakistan Army, encouraging it to play an effective role in defusing a potentially explosive situation.

Diplomatic observers in Washington have noted that the crisis forced the Americans to continue to see the army as the only stable institution in Pakistan.

They, however, made it clear that while the US appreciates the role the army played in the judicial crisis, an army takeover would not be welcome. The US, they argued, would welcome the army as a player as long as it is in support of democracy.


US lauds restoration of CJ

WASHINGTON: The United States is praising Pakistan’s plan to reinstate a fired Supreme Court chief justice whose supporters had threatened to march on the capital.

State Department spokesman Robert Wood told reporters Monday that the decision by Pakistan’s leaders had “brought Pakistan back from the brink.”

Wood says Secretary of State Hillary Rodham Clinton’s calls over the weekend to U.S.-allied President Asif Ali Zardari, who had refused to restore the independent-minded justice, and to opposition leader Nawaz Sharif were meant to signal a concern over the situation and a desire for a nonviolent outcome.

Wood was careful to note that there were no U.S. demands and “no threats at all” in Clinton’s calls.

source :

Obama calls AIG bonuses an ‘outrage’

WASHINGTON: US President Barack Obama Monday said multi-million-dollar bonuses planned for executives and traders at bailed-out insurance giant AIG were an “outrage” and vowed to pursue a clampdown.

“How do they justify this outrage to the taxpayers who are keeping the company afloat?” he said at the White House, pledging to “pursue every legal avenue to block these bonuses and make the American taxpayers whole.”

source :

Obama chooses Gary Locke for commerce secretary

WASHINGTON – Hoping the third time will be the charm, President Barack Obama named former Washington Gov. Gary Locke as his nominee for Commerce secretary Wednesday.

“I’m sure it’s not lost on anyone that we’ve tried this a couple of times. But I’m a big believer in keeping at something until you get it right,” Obama said, standing with the fellow Democrat in the Indian Treaty Room at the Eisenhower Executive Office Building near the White House.

The president’s two top earlier choices for the post dropped out — one a Democrat facing questions about a donor and the other a Republican who had a change of heart about working for a president from the opposition party — well before the Senate had a chance to confirm them.

Obama praised Locke as a man who shares his vision for turning around the economy, and someone who knows the American dream. “He’s lived it and that’s why he shares my commitment to do whatever it takes to keep it alive in our time,” Obama said.

“I’m grateful he’s agreed to leave one Washington for another,” the president added.

In turn, Locke said: “The American people and I fully support you and have confidence in your bold strategy to turn our economy around.” He said he was committed to making the sprawling department an “active and integral partner” in advancing Obama’s agenda.

A Democrat, Locke was the nation’s first Chinese-American governor, serving two terms from 1997 to 2005.

If confirmed by the Senate, he would assume control of a large agency with a broad portfolio that includes overseeing the 2010 national head count, oceans policy and many aspects of international trade.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

WASHINGTON (AP) — Maybe the third time will be the charm. President Barack Obama can only hope.

He is set to name former Washington Gov. Gary Locke as his commerce secretary on Wednesday after his top two choices for the post fell through.

A Democrat, Locke was the nation’s first Chinese-American governor, serving two terms from 1997 to 2005.

If confirmed by the Senate, he would assume control of a large agency with a broad portfolio that includes overseeing the 2010 national head count, oceans policy and many aspects of international trade.

The president initially tapped New Mexico Gov. Bill Richardson, a fellow Democrat, for the Cabinet post. He withdrew in January, before Obama took office, after the disclosure that a grand jury is investigating allegations of wrongdoing in the awarding of contracts in his state.

A month later, Obama announced that Republican Sen. Judd Gregg of New Hampshire had accepted the job. But a week after that, Gregg stepped down, citing “irresolvable conflicts” with the policies of the Democratic president.

Even after Obama makes Locke’s selection official, his Cabinet still won’t be complete. He still does not have a health and human services secretary; former Senate Democratic leader Tom Daschle withdrew his nomination for that post amid a tax controversy. Among those under consideration to replace him is Kansas Gov. Kathleen Sebelius.

Locke, 59, works for the Seattle-based law firm Davis Wright Tremaine on issues involving China, energy and governmental relations.

He still must get through Senate confirmation hearings to assume the post, and there are a number of issues over which he may face questions.

Locke was briefly linked to the scandal over foreign contributions to President Bill Clinton‘s 1996 campaign. In July 1998, he gave a deposition to the House Committee on Government Reform and Oversight about his relationships with questioned Clinton donors. But the committee later said the deposition produced no evidence that Locke knowingly accepted illegal campaign donations.

Locke denied any wrongdoing, and he subsequently returned some checks tied to people implicated in the fundraising scandal, including $750 from John Huang. The former Commerce Department official was the Democratic Party‘s chief fundraiser for the Asian-American population in the 1996 elections, and he became one of the central figures in the national Democratic Party fundraising scandal.

In December 1997, Locke’s political committee was fined a maximum $2,500 by state regulators after it admitted breaking campaign finance laws during two out-of-state fundraisers in 1996.

And in March 1998, state investigators cleared Locke of wrongdoing following complaints that he unlawfully took $10,000 in campaign contributions from members of a Buddhist church.

source :

Freddie Mac investigates self over lobby campaign

WASHINGTON – Lawyers hired by mortgage finance giant Freddie Mac are quietly investigating the firm’s own $2 million lobbying campaign, The Associated Press has learned. The lobbying effort helped quash proposed new regulations on the company before the housing market collapsed.

It was not immediately clear how much Freddie Mac is spending to investigate its own conduct or whether it is spending any federal bailout money on the internal probe. The firm was placed under U.S. government control due to its massive investment losses.

One of Washington’s leading law firms, Covington & Burling LLP, has spent more than a month interviewing current and former Freddie Mac employees and executives, according to three people familiar with the matter. These people spoke on condition of anonymity because they fear reprisals if they were identified. The inquiry is led by former Justice Department prosecutor Stephen Anthony, who specializes in corporate internal investigations.

Freddie Mac board chairman John Koskinen confirmed for the AP that an inquiry is under way but declined to comment further. Anthony did not return phone calls and e-mails seeking comment. Corinne Russell, spokeswoman for the federal office that regulates Freddie Mac, declined to comment.

The internal investigation is happening even as the Obama administration provides $200 billion more in government assistance to Freddie Mac and its larger sister company, Fannie Mae. The two government-sponsored enterprises are the largest providers of home mortgages in America. Freddie Mac’s activities fall under oversight of the new Federal Housing Finance Agency, which describes itself as “a world-class, empowered regulator with all of the authorities necessary to oversee vital components of our country’s secondary mortgage markets.”

The inquiry inside Freddie Mac follows stories by the AP about the company secretly hiring Republican consulting firm DCI Group of Washington to stop a proposal in the Senate in 2005 sponsored by Sen. Chuck Hagel, R-Neb. The legislation would have forced Freddie Mac and Fannie Mae to sell hundreds of billions of dollars worth of assets from their portfolios of mortgages and mortgage-backed securities. At the time, the portfolios were highly lucrative but their value plunged when the housing market collapsed.

The DCI Group did not file lobbying reports describing the work it was performing. At the time, Freddie Mac executives who knew about the initiative referred to it among themselves as “the stealth lobbying campaign,” according to people familiar with the matter. DCI Group spokesman Geoffrey M. Basye says the firm practiced the highest ethical standards and coordinated with Freddie Mac’s lawyers to ensure uncompromising compliance with all applicable federal and state laws and regulations.

The people familiar with the internal inquiry told the AP that Anthony has interviewed current and former Freddie Mac employees about three issues raised by the AP stories:

_An accounting of the work done for the $2 million in payments to the DCI Group. It targeted 17 Republican senators in 13 states working to defeat Hagel’s regulatory legislation by convincing prominent constituents and financial contributors the bill would hurt the housing boom. The measure was never brought to a vote and died.

_An accounting of six-figure payments to 52 outside lobbying firms and political consultants in 2006, including details about what work, if any, the consultants performed for the money paid to their firms. The consultants included former House Speaker Newt Gingrich and ex-Sen. Alfonse D’Amato. The payments to the 52 consultants amounted to $11.7 million. D’Amato’s firm, which was paid $240,000, declined to comment. Gingrich’s firm was paid $300,000 for strategic advice on a number of issues.

_An accounting of personal use by Freddie Mac executives of company-paid tickets and a company-leased skybox at the Verizon Center. Freddie Mac executive Hollis McLoughlin, who oversaw the $2 million campaign by DCI, was photographed by the AP in Freddie Mac’s leased skybox four months ago at the season home opener of the Washington Capitals hockey team.

Covington & Burling has represented Freddie Mac in other controversies, including its defense against charges it made illegal campaign contributions. Freddie Mac settled the matter by paying a record $3.8 million fine imposed by the Federal Election Commission in 2006. Separately, Covington & Burling represented Freddie Mac in roughly 20 lawsuits alleging the company fraudulently inflated the price of its stock from 1999-2002. All have been settled.

source :

Forecasters: Economy worse in ’09, better in ’10

WASHINGTON – Brace yourself: The recession is projected to worsen this year. The country stands to lose a sizable chunk of economic activity in 2009 as consumers at home and abroad retrench in the face of persistent economic troubles. And the U.S. unemployment rate — now at 7.6 percent, the highest in more than 16 years — is expected hit a peak of 9 percent this year.

That gloomy outlook came from leading forecasters in the latest survey by the National Association for Business Economics to be released Monday. The new estimates are roughly in line with other recent projections, including those released last week by the Federal Reserve.

“The steady drumbeat of weak economic and financial market data have made business economists decidedly more pessimistic on the economic outlook for the next several quarters,” said NABE president Chris Varvares, head of Macroeconomic Advisers.

All told, Varvares and his fellow forecasters now expect the economy to shrink by 1.9 percent this year, a much deeper contraction than the 0.2 percent dip projected in the fall.

If the new forecast is correct, it would mark the first time since 1991 the economy actually contracted over a full year and would be the worst showing since 1982, when the country had suffered through a severe recession.

Vanishing jobs, shrinking nest eggs, rising foreclosures and tanking home values have forced American consumers to cut back, which in turn has caused businesses to lay off workers and slash costs in other ways, feeding a vicious downward cycle for the economy.

The current recession, which started in December 2007, is posing a major challenge to Washington policymakers, including President Barack Obama and Fed Chairman Ben Bernanke. That’s because its root causes — a housing collapse, credit crunch and financial turmoil — are the worst since the 1930s and don’t lend themselves to easy or quick fixes.

“As the news on the economy has darkened, so too, have the forecasts,” said Ken Mayland, president of ClearView Economics. “We are suffering a period of maximum stress on the economy.”

The economy is expected to remain feeble this year — even with new efforts by the administration and Congress to provide relief.

Just over the past few weeks, a $787 billion recovery package of increased government spending and tax cuts was signed into law, the president unveiled a $75 billion plan to stem home foreclosures and Treasury Secretary Timothy Geithner said as much as $2 trillion could be plowed into the financial system to jump-start lending.

In terms of lost economic activity in 2009, the biggest hit will come in the first six months, forecasters said.

NABE forecasters now expect the economy to slide backward at a staggering pace of 5 percent in the current January-March quarter. That’s a sharp downgrade from the 1.3 percent annualized drop projected in the old survey.

“Further pronounced weakness in housing and deteriorating labor markets underscore the risks for 2009,” Varvares said.

Many economists believe that the current quarter will be the worst of the recession in terms of the bite to gross domestic product, which is the value of all goods and services produced within the U.S. and is the broadest barometer of the country’s economic health.

The second quarter of this year also will be a lot weaker, with the forecasters now calling for the economy to contract at a 1.7 percent pace, compared with the prior projection of 0.5 percent growth.

In the second half of this year, the economy should expand, but still less than what economists thought just a few months ago. NABE forecasters believe home sales and housing construction should hit bottom by the middle of the year, which would help stabilize the economy. Home prices, however, are expected to keep falling, according to other experts.

NABE forecasters predicted that when all is said and done the recession will have caused GDP to decline 2.8 percent. That would be “slightly less than the 3.1 percent during the early ’70s,” according to the survey of 47 forecasters taken between Jan. 29 and Feb. 12.

Even in the best-case scenario, with the recession ending sometime in the second half of this year, employment conditions will be tough.

Some of the forecasters said the nation’s unemployment rate could rise as high as 9 percent for all of 2009 and hit 10 percent next year. In 2008, the jobless rate averaged 5.8 percent, the highest since 2003. The survey’s median forecast — or middle point — called for the unemployment rate to rise to 8.4 percent this year and 8.8 percent next year.

Companies touching every part of the economy have announced thousands of layoffs already this year and more cuts came last week. Goodyear Tire & Rubber Co., said it will cut nearly 5,000 jobs, or almost 7 percent of its work force, this year, following the elimination of about 4,000 jobs in the second half of last year. General Motors Corp. and Chrysler, which are asking the government for billions more in aid to remain viable, announced plans to cut 50,000 more jobs, 47,000 of which would be at GM.

The Fed said the unemployment rate could stay elevated into 2011. Some analysts think the jobless rate won’t drift down to a more normal range of around 5 percent until 2013 — at the earliest.

Companies won’t ramp up hiring until they feel confident that any recovery has staying power. That’s why employment is usually the last piece of the economy to reap the benefits of a recovery.

“A meaningful recovery is not expected to take hold until next year,” said Varvares.

NABE predicts GDP will rebound in 2010, averaging 2.4 percent over the course of the year. The Fed, too, is forecasting that the economy will grow again in 2010_ and will pick up momentum in 2011.

Even so, the Fed is still guarded about any turnaround.

Given all the negative forces weighing on consumers and businesses, the economic recovery “would be unusually gradual and prolonged,” the Fed said.

source :

8-year mystery of Chandra Levy’s slaying may end

WASHINGTON – A Salvadoran immigrant convicted of attacking two women in the park where Chandra Levy‘s remains were found was expected to be arrested in the next few days in the former intern’s slaying, a person close to the investigation said.

An arrest would cap a revived investigation into the 2001 killing that had gone cold for years after destroying the career of former U.S. Rep. Gary Condit of California.

Investigators in 2002 questioned Ingmar Guandique, now 27, in the slaying after he was convicted of attacking two women joggers in Washington’s Rock Creek Park. They didn’t charge him, but statements he made to people while in prison helped lead investigators back to him, said the person, who was not authorized to discuss the case publicly and spoke on condition of anonymity Saturday.

A law enforcement official who has spoken to investigators said the break came in part from DNA evidence that was either retested or collected, and it was connected to Guandique. The official spoke on the condition of anonymity because the Levy investigation is ongoing.

Local prosecutors have convened a grand jury in the District of Columbia, and an arrest warrant is expected within the next few days, the officials said. Levy’s father, Robert Levy, said Washington, D.C., Police Chief Cathy Lanier called his home late Friday and said the same thing.

Chandra Levy was 24 and had just completed an internship with the U.S. Bureau of Prisons when she disappeared in May 2001 after leaving her Washington, D.C., apartment. The Modesto, Calif., woman was wearing jogging clothes when she vanished, and a man walking his dog found her skull and bones in the park a year later.

Authorities questioned Condit, her congressman, in the disappearance, but he was never a suspect in her death. Condit, a popular Democrat for a dozen years in his district, was reportedly having an affair with Levy, and the negative publicity from the case was cited as the main reason for his overwhelming primary loss in 2002.

Guandique was sentenced to 10 years in federal prison for attacking two women in the park. The federal Bureau of Prisons lists an inmate in California with the same sentence and age, but with the spelling Guandigue instead of Guandique. A message seeking comment was not returned.

One of his victims in the park attacks, Halle Shilling, told The Washington Post that new prosecutors and detectives apologized to her because prior investigators had never interviewed her in the Levy case.

“They said they were so sorry it took so long to talk to me,” Shilling said. “They really want to get to the bottom of this, and they are not going to sleep well until they get a conviction.”

Robert Levy said he and his wife, Susan, were not told who would be arrested, “but we all know who it is.” He would not elaborate but said they would favor a life sentence for the killer.

“If someone is executed, they really don’t suffer too much,” he said from his home in Modesto.

Abbe Lowell, an attorney for Condit, said the revelations clear the former congressman.

Condit did not return several messages left by The Associated Press but said in a statement to WJLA-TV in Washington that he is glad the Levy family is finally getting answers.

“I had always hoped to have the opportunity to tell my side of this story, but too many were not prepared to listen. Now I plan to do so, but I will have no further comments on this story at this time,” he said in the statement, posted on the station’s Web site.

After Condit lost, he sued several media outlets that had connected him to Levy’s disappearance and death. He reached an undisclosed settlement with three tabloid newspapers.

Lanier, the D.C. police chief, said Saturday that she could not comment out of respect for the Levy family and the investigators and prosecutors who have worked on the case.


Associated Press writers Matt Apuzzo in Washington and Samantha Young in Modesto, Calif., contributed to this report.

source :

War tours strain US military readiness

WASHINGTON: Strained by repeated war tours, persistent terrorist threats and instability around the globe, there is a significant risk the U.S. military may not be able to respond quickly and fully to new crises, a classified Pentagon assessment has concluded.

This is the third year that the risk level has been set at “significant” _ despite improved security conditions in Iraq and plans to cut U.S. troop levels there. Senior military officials spoke about the report on condition of anonymity because it is a classified document.

The risk assessment, drawn up by Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, paints a broad picture of the security threats and hot spots around the world and the U.S. military’s ability to deal with them. Mullen has delivered it to Defense Secretary Robert Gates. The assessment is prepared every year and routinely delivered to Congress with the budget. Because the threat is rated as significant, Gates will send an accompanying report to Congress outlining what the military is doing to address the risks. That report has not yet been finished.

source :

US seeks unconditional release of abducted UN official

WASHINGTON: The United Sates has urged the abductors to release official of UN refugee agency in Pakistan.

At a news briefing, State Department Deputy Spokesman Gordon Duguid said expressed sympathies with the family of John Solecki and said we are constantly in touch with international agencies. He, however, expressed concern over security of abducted UN official.

John Solecki, who heads the UNHCR office in Balochistan, was kidnapped on February 2 by gunmen who killed his driver. The Balochistan Liberation United Front has claimed responsibility for the abduction.

source :

US Navy seizes 9 suspected pirates in Gulf of Aden

WASHINGTON: The U.S. Navy apprehended this week a total of 16 suspected pirates in the Gulf of Aden, while a maritime watchdog warned on Friday that the pirate attacks off Somalia have risen sharply as weather improved and brigands looked to replenish their haul after releasing ships hijacked for ransom.

The Navy said it responded Thursday to a distress signal from the Indian-flagged vessel Premdivya which said it was fired upon by men in a skiff who were trying to board their vessel.

The nine may be handed to Kenyan authorities for prosecution, Pentagon spokesman Bryan Whitman said. The United States agreed last month to hand pirate suspects to the east African nation.

source :