Iraq Says Exxon Freezes Kurdistan Oil Deal

Senior Iraqi government officials said Friday that Exxon Mobil Corp. has told Iraq's central government that it has frozen an exploration contract with the nation's Kurdistan region, a deal Baghdad strongly opposes.

"We have received a letter from Exxon in which it stated it freezes its oil contract with Kurdistan," the government official said.

"Although we would prefer Exxon to cancel its deal with Kurdistan, freezing the contract is a step forward," another official from the Iraqi oil ministry said.

Exxon, based in Irving, Texas, wouldn't comment Friday. Last week, Exxon CEO Rex Tillerson said his company remains committed to working in both Kurdistan and southern Iraq.

The semiautonimous Kurdistan Regional Government in northern Iraq is embroiled in a long and often contentious dispute with Iraq's central government over the right to issue oil-exploration licenses in the region.

Baghdad has essentially asked the U.S. oil giant to choose between its deal with the KRG and its contract with the central government to develop the 370,000 barrels-a-day West Qurna Phase 1 field in southern Iraq. The impasse has also led Exxon to be barred from Iraq's fourth oil-and-gas licensing auction, scheduled for May.

The first Iraqi official said Exxon stated it has frozen its contract with the KRG until a new national oil-and-gas law is enacted. A new version of the law was introduced last year but it has been stalled in Parliament.

Exxon is already producing around 370,000 barrels a day of oil from the West Qurna field under a service contract with the Baghdad government. Many other large oil companies, including BP PLC, Royal Dutch Shell PLC, Eni SpA and Lukoil Holdings have similar contracts.

The KRG has signed nearly 50 oil and gas deals with international oil companies, mostly second-tier or wildcat explorers. The KRG hoped Exxon's presence would lead to other oil majors beginning operations in the region.

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Posted in: Exxon,Freezes,Kurdistan

Anglican Leader to Step Down

Rowan Williams, the Archbishop of Canterbury who has overseen a turbulent decade as spiritual leader of about 80 million followers of the Anglican faith, said he would step down at the end of the year and take up a new post as master of Magdalene College, Cambridge.

Known for possessing a scholarly and versatile mind, as well as a gift for the common touch, Dr. Williams leaves as the institution faces divisive debates over homosexuality and gender.

For the past decade, Dr. Williams has tried to blend progressive views with Anglican theology and thus adapt the church's doctrine to modern society. For example, the Church of England is nearing a final vote about allowing women to become bishops; Dr. Williams has tried to balance the demands of those who support the idea with those who don't.

In a statement on his web site, Dr. Williams, 61 years old, said it has been an "immense privilege to serve as Archbishop of Canterbury over the past decade, and moving on has not been an easy decision." He didn't explicitly say in his statement why he planned to resign.

In an interview with the British news agency Press Association, however, he nodded to the difficult choices on the horizon. The looming final vote on female bishops was one of the "watersheds" this year that persuaded him to consider moving on, Dr. Williams said in the interview.

"I think that it is a job of immense demands and I would hope that my successor has the constitution of an ox and the skin of a rhinoceros," Dr. Williams said.


Archbishop of Canterbury Rowan Williams

It hasn't been an easy decade. Dr. Williams has written in sympathetic terms about gay relationships and thus drawn disapproval from conservative members of the church. Meanwhile, the liberal wing has expressed frustration that the Archbishop's socially liberal stance hasn't engendered enough real change in the church.

"He's been attempting to hold both theological liberals and conservatives together, and that has meant that he's suppressed his own views," said Paul Handley, managing editor of Church Times, a leading Anglican weekly newspaper in the U.K. "As a result, he's been battered by both sides."

Dr. Williams is in the midst of a key battle right now. He has backed a deal, known as the Anglican Covenant, that would effectively prevent openly homosexual clergy from becoming bishops—a pact aimed at preventing the church from splitting.

The document was conceived in 2003 after Gene Robinson was elected the first openly gay Anglican bishop by the U.S. Episcopal Church. Conservative priests—especially those in Africa—protested, and Dr. Williams set up a commission to mend the rift.

Dr. Williams unveiled the covenant in 2010 and called for it to be endorsed or risk seeing the "piece-by-piece dissolution" of the Anglican church. Branches of the church around the world are mulling whether to adopt the covenant.

Anglicanism arose from the 16th-century rift between Henry VIII and the Catholic Church, and is the world's third-largest group of Christians after the Catholics and the Orthodox. The queen of England is Supreme Governor of the Church of England and formally appoints the Archbishop of Canterbury.

But unlike the Roman Catholic Church, the Anglican church is a loose federation and the Archbishop of Canterbury has few powers to enforce unity among its 38 autonomous provinces.

The Anglican churches in richer countries, including the Episcopal Church in the U.S., the Church of England and the Anglican Church of Canada, tend to be more liberal. Their counterparts in Africa and other parts of the developing world are bigger and are often more conservative.

Dr. Williams was confirmed as the 104th Archbishop of Canterbury in December 2002. He has written more than two dozen books on subjects ranging from history and poetry to economics, theology and the writing of Fyodor Dostoevsky. He is a fan of the TV show "The Simpsons."

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Posted in: Anglican,Leader

Osborne Finalizes U.K. Budget

 

U.K. Chancellor George Osborne may be bending under pressure to cut the 50% rate of tax imposed on high earners in next week's budget. Dow Jones's Ainsley Thomson assesses whether he can or should.

Preparations for the U.K. government's budget entered their closing stages Friday, with Chancellor of the Exchequer George Osborne seeking to stimulate the faltering economy while still adhering to his aggressive deficit reduction plan.

During a final round of meetings between Mr. Osborne, Prime Minister David Cameron and their Liberal Democrat colleagues, Deputy Prime Minister Nick Clegg and Chief Secretary to the Treasury Danny Alexander, negotiations are expected to center on finding a compromise between the Lib Dem goal of an income tax break for families and the Conservative Party's wish for a business-friendly budget and a potential cut to the top income-tax rate.

The negotiations are set against the backdrop of sluggish economic growth and come a day after Fitch Ratings became the second ratings agency in the past month to warn that the U.K. may lose its prized triple-A rating if it strays from its deficit reduction plan or if there is an escalation in the euro-zone crisis.

The ratings warning has strengthened Mr. Osborne's resolve to stay the course on the austerity plan and has all but ruled out any chance of an unfunded budget giveaway.

The news isn't all bad for Osborne. Four months ago, when he last updated Britain on the state of the country's finances, he was forced to admit that economic growth would be weaker and borrowing considerably higher than he had hoped.

Next Wednesday, he will have the altogether more pleasant task of saying the U.K. has borrowed less in the 2011/2012 financial year than expected. Economists expect public sector net borrowing for the financial year, which ends on April 5, to undershoot the £127 billion ($199.53 billion) target by between £5 billion and £10 billion. Economists also expect borrowing in the 2012/2013 financial year will be lower than the £120 billion target.

Mr. Osborne is faced with the dilemma of whether he uses this fiscal cushion to fund a stimulus measure, such as a temporary tax cut, or whether he puts it toward reducing the deficit. His rhetoric in recent weeks suggests he is leaning heavily toward the latter.

Philip Rush, economist at Nomura, said he expects the budget to be fiscally neutral, saying the days of "tax, spend, borrow and hope" are long over.

"Delivering a budget that appeases demands from the electorate for the government to 'do something' about the stagnant recovery is no easy feat," Mr. Rush said. "With the public finances still in very poor shape after two years of austerity, the chancellor has to conjure up this something out of virtually nothing."

The chancellor will also be mindful that alongside the budget, the independent Office for Budget Responsibility will state whether he has met his overriding fiscal goals of eliminating the structural deficit over a five-year rolling period and reducing the ratio of net debt to gross domestic product by 2015-16. Economists expect the OBR will judge that he remains on target—just—to meet the goals.

One of the central themes of the budget is expected to be income redistributio—-essentially shifting the burden of the austerity measures to those 'with the broadest shoulders', namely the wealthy.

The Lib Dems, the junior partners in the coalition, have publicly pushed for an income tax break for low-paid workers, saying the pressure on family finances has reached breaking point. The party wants to see an acceleration of the coalition agreement to raise the threshold at which people start paying income tax to £10,000. Lib Dem leader Mr. Clegg has suggested this should be funded by raising taxes on high earners. The chancellor has previously said he is "listening very carefully" to the Lib Dems' proposals.

Mr. Osborne has also come under pressure to do something to help the so-called "squeezed middle"—families who have seen their incomes fall in real terms due to high inflation and muted wage growth. In particular he is being urged to change the controversial policy that will remove child benefits for around 1.2 million families with one adult earning more than £43,000 per year from 2013.

Speculation has been rife in recent days that the current top income-tax rate of 50% on earnings over £150,000 will be lowered. Following claims that the top tax rate was failing to raise significant revenue, Mr. Osborne ordered the tax department to carry out a review, which will be published alongside the budget.

But it is a politically difficult move for the Conservative Party, which has worked hard to change the perception that it is the party of the rich elite. Mr. Osborne will be acutely aware that he will face accusations of pandering to high earners if he removes or reduces the top tax rate without introducing a corresponding tax on wealth.

The Lib Dems have lobbied for the introduction of a 'mansion tax' on properties worth £1 million or more, and last week Mr. Clegg called for a "tycoon tax" that would require wealthy Britons to pay a minimum proportion of their total incomes as tax. Whether or not the two proposals find favor with the Conservative Party remains to be seen, but the two coalition partners could find common ground on clamping down on wealthy people who avoid paying tax.

Both parties want the budget to be as business friendly as possible to try and foster economic growth. There will be a raft of low-cost initiatives included in the budget, such as measures to cut red tape and to improve the competitiveness of the labor market.

Another business friendly initiative expected to be included in the budget is tax relief for British producers of "high-end" television shows like "Downton Abbey". The U.K. government is concerned that Britain is struggling to keep big-budget TV projects in the face of tax competition from abroad. It also sees the export of British entertainment as a way to promote the U.K. overseas.

The Treasury declined to comment on budget speculation.

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Posted in: Budget,Finalizes,Osborne

Documents Show Bin Laden's Obama Plot

Osama bin Laden tried to orchestrate a plot to kill President Barack Obama by ordering his terrorist network to target presidential aircraft, according to an administration official citing documents found in the al Qaeda leader's compound in Pakistan after his death last May.

U.S. officials said the threat wasn't serious. Al Qaeda didn't have the capability to shoot down aircraft, officials said.

"Bin Laden clearly had bold ambitions to kill as many innocent people as possible," another administration official said.

The official added that the U.S. believes al Qaeda's "capacity to pull off those types of complex attacks has been greatly diminished, and that bin Laden himself spent much of his time brooding and providing guidance that often fell on deaf ears."

News about the plot against Mr. Obama resurfaced Friday in a column by David Ignatius of the Washington Post, who reviewed the documents.

Intelligence analysts have spent the months since bin Laden was killed sifting through documents, letters, video and other materials retrieved from his compound in Abbottabad, Pakistan.

Some of the information is being declassified and is set to be released to the public in coming months.
"However, part of the picture that emerges from these documents is a portrait of a weakened and beleaguered core al Qaeda—an organization rife with internal disputes over its global strategy and operational priorities—and whose now-deceased leader was obsessively focused on the group's own image," the administration official said.

Bin laden also sought to launch attacks against aircraft transporting Gen. David Petraeus, the current Central Intelligence Agency director who at the time was the commander in charge of the Afghanistan war. And a letter found in the compound shows bin Laden considered changing al Qaeda's name in an apparent attempt to rehabilitate its public image.

Many of these details were previously known. Television reports last year mentioned the threat against Mr. Obama, and the plot to kill Gen. Petraeus emerged during recent confirmation hearings.

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Posted in: Documents,Laden's,Obama

Spain Eyes Canaries for Oil

The Spanish government approved Friday a permit to explore for oil offshore the Canary Islands in an area that could become by far the largest source of oil production in a country heavily dependent on crude imports.

Approval of the exploration license marks the latest move in Spain's shift away from a policy of subsidy-dependent renewable energy projects as it seeks ways to improve its trade balance and steady its budget. The Canary Islands local government, however, opposes the project amid concerns that it and potential future production could discourage tourists drawn to its white-sand beaches.

Conservative estimates by Madrid-based Repsol YPF SA, which would carry out the exploration, show that the concessions could eventually yield daily production of 100,000 barrels of oil equivalent, people familiar with the situation say. While relatively small in global terms, that would be significant for Spain, amounting to about 10% of its daily crude oil imports in 2011, according to government data.

Kristian Rix, a spokesman for Repsol, wouldn't confirm the figure but said it is a reasonable estimate based on the company's own calculations.

The new exploration "is a big deal," said Kash Burchett, a European oil analyst with energy consultant IHS Cera. Even though Spain's crude imports have declined in recent years as its economy has weakened, demands have increased for it to improve its trade gap and balance its budget.

"It isn't entirely surprising that the government is seeking to exploit whatever reserves they can" and generate potentially substantial tax revenue from them, Mr. Burchett said.

To be sure, Repsol's exploratory drilling may reveal amounts of oil below its estimates, and even if the projections prove to be accurate, Repsol says the license area—near the border where Morocco already allows oil exploration—wouldn't reach plateau production for a decade. The project would require investment of €9 billion over 20 years, Repsol Chairman Antonio Brufau has said.

And oil from the project may not all end up being used in Spain, as Repsol could decide to ship it elsewhere in pursuit of higher margins.

Approval for the project would come as other governments in the region—among the worst hit by the euro-zone crisis—step up efforts to identify natural resources for exploitation. Portugal's new government, scrambling for money, has started granting agreements to mine for iron ore and other materials, and last October granted rights to explore for oil off of its tourist-heavy southern coast.

The Canary Islands project faces local opposition. Tourists flock to beaches on the islands, which are about 100 kilometers (62 miles) off Morocco's west coast, providing the most important industry for a region that has some of Spain's highest unemployment rates.

"The Canary Islands' selling points are sun, landscapes, white-sand beaches and crystalline water," said Fernando Ríos Rull, a representative for the Canary Islands government on legal and industrial matters. "That is totally incompatible with exploration for oil."

He said the Canary government will appeal the exploration permit in the courts in hopes of annulling the decision.

Repsol says it has ample experience safely drilling offshore and before drilling any exploratory wells will conduct an environmental study requiring official authorization.

"This is our home turf, so we are especially interested in making this project a success," said spokesman Mr. Rix.

The new production could be a significant boost for Repsol, which holds 50% in the consortium that would operate in the area. In 2011, its daily oil production was 110,000 barrels, a decline of 24% from 2010 partly due to the production stoppage in Libya.

Spain first granted Repsol the right to explore for oil about 60 kilometers from the coast of the Canary Islands in early 2002, and seismic studies determined that oil likely lies in rock formations about 3,000 (9,900 feet) to 3,500 meters below the surface. But local governments objected, and the exploration program got tangled up in the courts, resulting in 2004 in the permit's suspension.

Repsol resubmitted a corrected application, but Spain's Socialist Party, which had recently come to power on a platform that included moving toward renewable-energy sources, never issued final approval. Instead, the government enacted strong incentives to encourage higher wind and solar power production. Spain is now among the countries that derive the greatest percentage of electricity consumption from renewable sources, more than 30% in 2011.

But a new government was elected in December. Within weeks new Energy Minister José Manuel Soria, a former top official in the Canary Islands regional government, suspended a subsidy program for new installations of renewable-energy projects, in part on concerns that it wasn't economically sustainable.

Friday, Spain's government spokeswoman Soraya Sáenz de Santamaría said that there would be no arguments for further delaying the exploration project as long as environmental guarantees are met.

While the amount of money oil production in the Canary Islands could generate is unclear, Repsol says it could create hundreds or thousands of jobs. However, Mr. Ríos Rull cautioned that the Canary Islands' largely less-qualified work force is unlikely to secure many new jobs from oil production in the region.

Repsol shares were down 0.8% at €19 ($25), valuing the company at €23.25 billion.

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Posted in: Canaries,Spain

Iran's Censors Tighten Grip

ran hasn't been shy about its bids to monitor, filter and block content on the Internet. Now it has taken the next leap, turning online censorship into an institution.

In the past week, the government has announced it has formed a high council dedicated to cleansing the country's Internet of sites that threaten morality and national security, launching what amounts to a centralized command structure for online censorship.

 

Iranian women in a Tehran Internet cafe last month. 

Cybercafes have been targeted by government.

The Supreme Council of Cyberspace, created by decree last week by Supreme Leader Ayatollah Ali Khamenei, includes heads of intelligence, militia, security and the powerful Iranian Revolutionary Guard Corps, as well as media chiefs. Charged with supervising all cyberactivity, it will have the power to enact laws, according to state media.

The body will have its own budget and offices, a member of the council said in an interview with state media on Wednesday.

In announcing the council, Iran unites Internet-control initiatives that have previously been floated in state media. Along with other moves in the past week, it shows that the Islamic Republic, after long viewing the Internet as a minor nuisance, has fully embraced the view that Iran's vibrant online activity is a destabilizing threat.

The Revolutionary Guards, or IRGC, said last week it has rolled out a secure internal network for high-level commanders, underscoring Tehran's concerns about outside threats to its government's online activities. Iran also announced in the past week that its "Cyber Army," as it styles its legion of government hackers and bloggers, has reached 120,000, a number impossible to corroborate but well above previous tallies.

In an annual report released Monday, the group Reporters Without Borders ranked Iran the No. 1 enemy of the Internet in 2012. It was ahead of 11 other countries—including Saudi Arabia, Bahrain, Syria, China and Belarus—that the group says restrict Internet access, filter content and imprison bloggers.

Cyber Challenges and Crackdowns June 12, 2009 Iran's President Ahmadinejad re-elected in polls marred by irregularities. June 15 Protests erupt across the country, largely organized and documented online. June 20 Web video of death of Neda Agha-Soltan, shot during protests, seen world-wide. June Parliament passes law on computer crimes, with punishments including death penalty. February 2010 Tracking activists by cellphones and emails, Iran's security forces conduct widespread arrests, successfully crushing protests. February 2011 Inspired by Arab Spring, Iranians take to the streets after a yearlong lull, calling for the end of the Islamic Republic's regime. January 2012 Iranian authorities call for mandatory user registration, cameras in Internet cafes. March Supreme Leader Ayatollah Ali Khamenei orders the creation of a Supreme Council on Cyberspace.

The Iranian council's mandate became clearer Wednesday when one of its members, conservative cleric Hamid Shahriari, said the council was the result of a year and a half of weekly meetings between security chiefs and Khamenei representatives. "We are worried about a portion of cyberspace that is used for exchanging information and conducting espionage," he said in an interview with the semiofficial Mehr news agency.

"We have identified and confronted 650 websites that have been set up to battle our regime—39 of them are by opposition groups and our enemies, and the rest promote Western culture and worshiping Satan, and stoke sectarian divides," he said. He didn't name the sites or clarify whether they had already been filtered. Mr. Shahriari said the council would also "focus and facilitate positive aspects of the Internet, like business and trade."

The Internet dominated a well-known Friday prayer sermon on March 9, which is televised from the campus of Tehran University. Ayatollah Ahmad Jannati, an 85-year-old cleric, called cyberspace a "very serious danger" and praised the new council, urging Iranians to comply with the government's laws and restrictions.

The IRGC's new network—named Basir, or "Perceptive"—is a domestically built, secure telecommunication channel that will allow its highest-level officers to communicate and command brigades in the case of an attack, the guard's newspaper, Sobhe Sadegh, reported last week.

"We are not in an imaginary state of threats and sanctions," Hossein Salami, the deputy commander in chief of the IRGC, said during the network's inauguration ceremony last week, according to Iranian media reports. "We must prepare."

Israel has in recent weeks drummed up support for a possible attack on what it alleges are sites linked to nuclear-weapon production, a pursuit Iran denies. Iran is also worried about cyberattacks on its nuclear facilities, such as the 2010 Stuxnet virus that appeared aimed at disabling Iranian centrifuge arrays.

The IRGC's closed network appears to be separate from a national Internet that Iran's telecommunications company has said it expects to complete within a year, which leaders have billed as void of Western culture and un-Islamic content.

The IRGC's public-relations department also announced last week that it had recruited and trained 120,000 cultural soldiers in the past three years to combat "a soft cyberwar" against Iran. Iranian officials had previously discussed the presence of these forces, but placed their number closer to 20,000.

These "cybersoldiers" monitor online activity of opposition sites and dissidents, bombarding websites with comments and producing blog content in support of the regime and hacking emails and computers, according to a computer programmer in Iran employed by the telecommunication ministry. They report to various state bodies, including intelligence, judiciary and the IRGC, which in turn have top officials sitting on the new council.

"These strong measures to confront the Internet recently prove two things: the Internet has been an extremely effective way of distributing information and the regime is frightened by it," said Ali Jamshidi, a Malaysia-based telecommunication expert with the opposition Green Movement, who monitors the so-called Cyber Army's attacks on opposition websites and dissident blogs.

The IRGC began expanding its multi-billion dollar empire—which stretches from construction to energy and agriculture—to telecommunications in 2009, when it purchased 50% shares of Iran's national telecommunication company, effectively allowing it direct supervision on surveillance and censorship.

The Internet, particularly social networking sites, and mobile phones helped Iranian activists to mobilize for anti-government protests after President Mahmoud Ahmadinejad's 2009 re-election prompted allegations of voting fraud.

While the Islamic Republic has successfully crushed protests in the streets with heavy crackdowns, activism and anti-government sentiment is thriving online on Iranian blogs, opposition websites and chat rooms.

Iranian cyber activists worry that the new tightening of rules will make their work even more difficult and expose their identities.

"We will fight back and continue posting our opinions but our resources are very limited compared to what the Revolutionary Guards can do," said a female student activist in Iran.

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Posted in: Censors,Iran's,Tighten

Mayor Aims to Crash Tokyo's Party

 

Toru Hashimoto, addressing a crowd in Osaka in November, is betting Japan is looking for a strong leader.

The outspoken mayor of Japan's third-largest city has made a name for himself by battling labor unions and bureaucrats, setting himself apart from the country's normally staid lawmakers. Now, Toru Hashimoto is talking about shaking up national politics with an ambitious plan to make his two-year-old local party the largest voting bloc in Parliament.

It is a brazen, far-fetched idea in a country that was ruled by one party for nearly half a century, and where new political organizations usually rise and fall without ever growing beyond a minor presence.

But Mr. Hashimoto, 42 years old, is betting that the Japanese public is sick of a political system that is headed by its sixth weak prime minister in six years, and is seeking a more powerful leader to take the reins.

"We go through our leaders like disposable supplies because there's no sense that we put them in power," Mr. Hashimoto said in a speech to supporters at a dinner here last month.

Provocative Character 

Toru Hashimoto is Japan's most-followed politician on Twitter. A sampling of his tweets:
Feb. 6 2011: '[My party] will destroy Osaka city hall to protect Osaka's residents.' Nov. 4, 2011: 'Only a political showdown can change the system. Naïve, unworldly academics and commentators, you all need to study up on real politics.' Feb. 22, 2012: 'Rising for the national anthem is an internationally accepted practice.…If we don't have to rise for our national anthem, we're no longer a nation.'
 -- Source: WSJ research

He put it more boldly last year in a meeting with members of his nascent party, when he declared: "What Japanese politics needs most is a dictatorship." Such comments, combined with his proposals for giving leaders more power, have led his critics to call his platform "Hashism," merging his name with "fascism."　

Mr. Hashimoto's emerging platform is light on policy ideas, from economics to diplomacy and defense.

"Most of his policies are half-baked—he raises issues for the sake of raising them to get a reaction," said Yasunori Sone, a political-science professor at Keio University, "How he plans to turn those fireworks into concrete policies is unclear."

But the attorney-turned-celebrity television commentator is getting a more favorable reception from the Japanese public at large. An avid tweeter, he is now the most-followed Japanese politician on Twitter, as he mercilessly lashes out against critics and political rivals. He was named "the most suitable politician to lead Japan" in a mid-January national phone survey of 1,000 by the national daily Sankei and FNN television network. His 21.4% compared with Prime Minister Yoshihiko Noda's 3.6%.

In more recent polls, a majority of the voters consistently say they want his Osaka-based political party to enter national politics and take on the ruling Democratic Party of Japan, which generally garners less than 20% support.

The big test for Mr. Hashimoto's quest will come during the next round of parliamentary elections. While a vote isn't required before next year, many political observers are betting that Mr. Noda may exercise his power to call one—or be forced to do so—by the end of the summer, amid a legislative gridlock over his priority push to raise the sales tax in an attempt to curb Japan's outsize government debt.

In anticipation of such a contest, Mr. Hashimoto's party plans to open a "school" in Osaka this month to train candidates. It has already attracted thousands of applicants nationwide, including one DPJ lawmaker.

Mr. Hashimoto's party insists it can win 200 of the 480 seats in the lower house in the next election, which, while falling short of a majority, would give him the largest bloc in the legislature.

So far, Mr. Hashimoto says he doesn't harbor ambitions to run for parliament or prime minister, but would run his party from his current perch.

Mr. Hashimoto generally shuns newspaper interviews, denying repeated requests for this article. He prefers to limit his appearances to unfiltered TV, where he uses his oral skills to blast critics.

His emerging national platform focuses on scaling back government and giving leaders more freedom to enact their agendas. He wants to amend the constitution to allow for direct popular election of the prime minister, who is currently chosen by parliament, and to scrap the upper house, which has in recent years regularly blocked prime ministers' proposals from becoming law.

Mr. Hashimoto, like conservative Republicans who have taken control of some U.S. state governments, such as Wisconsin Gov. Scott Walker, has made a point of battling labor unions representing government employees. After winning a campaign on streamlining city hall, the agenda he submitted for the current session of the Osaka city assembly, which opened Feb. 28, includes a stricter performance-evaluation system for civil servants, and a sharp reduction in pay for government employees—including a 42% cut for himself.

A father of seven children, Mr. Hashimoto is also fighting the education establishment. He wants to transfer power from the board of education to parents by giving them more say in faculty evaluations. On Feb. 29, the city assembly passed his proposed ordinance mandating all Osaka public-school teachers stand for the national anthem during school events—a particularly provocative move for a union long infused by Japan's postwar pacifism. Local media reported that several teachers have been reprimanded for disobeying—a largely symbolic gesture.

Mr. Hashimoto began his career as a lawyer, developing a private practice that ranged from corporate to juvenile law. He developed a side career as a commentator on local TV talk shows, winning over audiences with his flair, his passion for issues—and his bright-orange bleached hair and tinted glasses. (Mr. Hashimoto now wears contacts and his hair is its natural black.) He rode his fame to jump into politics, winning nearly double the votes of his runner-up in the 2008 Osaka gubernatorial race to become Japan's youngest-ever governor at the time.

As governor, Mr. Hashimoto slashed government spending and balanced the Osaka prefectural budget, which had been operating at a deficit for a decade. Last year, Mr. Hashimoto quit his job as governor of Osaka prefecture to run for mayor of Osaka city, the beginning of a bid to consolidate the two governing units and enhance the clout of its leader. He won with 59% of the vote.

Since his November victory, Mr. Hashimoto has been in the national spotlight, most recently for searching through senior Osaka city officials' emails for evidence they were engaged in political-campaign activities during work hours. One high-ranking official has been caught having been involved in Mr. Hashimoto's opponent's campaign on the job, but no penalties or reprimands have been issued.

"I don't know what the Osaka municipal-reform plan is about, just that Mr. Hashimoto seems to be able to push for change," said Osaka taxi driver Michio Ogami. Takashi Ota, a 30-year-old who has been job-hopping between convenience stores, among other places, said he never voted until backing Mr. Hashimoto in the November election. "At least he seems one to do something," he said. "Anything."

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Posted in: Crash,Mayor,Party,Tokyo's

Mauritania Arrests Former Libyan Intelligence Chief

Mauritania said Saturday it arrested former Libyan intelligence chief Abdullah al-Senoussi, who was one of the most prominent figures from the ousted regime of Moammar Gadhafi and is wanted by the International Criminal Court.

Mr. Al-Senoussi helped direct efforts to quash the rebellion against Gadhafi's rule last year, and the ICC has indicted him along with Gadhafi's son Seif al-Islam on charges of crimes against humanity.

Mauritania's state information agency said in a statement that Mr. al-Senoussi was arrested at the airport in the capital Nouakchott upon arrival from the Moroccan city of Casablanca. It said he was carrying a fake Malian passport.

Libyan Foreign Ministry spokesman Saad al-Shilmani said the arrest was not confirmed.

As Gadhafi's regime crumbled in the second half of 2011, many of the dictator's inner circle reportedly fled from advancing rebels toward the Sahara, where the regime had long cultivated ties with desert groups both in Libya and in neighboring countries.

Gadhafi's son Seif al-Islam was arrested in November by fighters in Libya's remote southern desert. He has been held largely without access to the outside world ever since and Libyan authorities say they want to put him on trial at home, despite an arrest warrant issued by the ICC.

Some Libyan officials reported at the time that Mr. al-Senoussi had also been captured and was being held in the southern city of Sabha. But some later cast doubt on that assertion, and his whereabouts have not been known—a reflection of the confusion in post-Gadhafi Libya, where "revolutionary militias" hold local control in many towns and cities with little accountability to the Tripoli government.

Mr. Al-Senoussi, Gadhafi's brother-in-law, was also one of six Libyans convicted in absentia and sentenced to life in prison in France for the 1989 bombing of a French passenger over Niger that killed all 170 people on board. The French government has previously asked that he be handed over to France.

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Posted in: Arrests,chief,Former,Intelligence,Libyan,Mauritania

Founder of WikiLeaks to Run for Australian Senate

WikiLeaks founder Julian Assange plans to run for a seat in the Australian Senate in elections due next year despite being under virtual house arrest in England and facing criminal charges in Sweden, the group said Saturday.

 

Wikileaks founder Julian Assange at the Supreme Court in central London, on Feb. 1.

The 40-year-old Australian citizen is fighting extradition to Sweden, where he's wanted over sex crime allegations. Mr. Assange has taken his legal battle all the way to Britain's Supreme Court, which is expected to rule on his case soon.

"We have discovered that it is possible for Julian Assange to run for the Australian Senate while detained. Julian has decided to run," WikiLeaks announced on Twitter.

Mr. Assange has criticized Australian Prime Minister Julia Gillard's center-left government for not standing up for him against the potential threat of his extradition to the United States for prosecution over WikiLeaks' release of hundreds of thousands of classified U.S. documents.

Australian police have concluded that WikiLeaks and Mr. Assange have not broken any Australian laws by publishing the U.S. cables, although Ms. Gillard has condemned the action as "grossly irresponsible."

John Wanna, an Australian National University political scientist, said it was possible for Mr. Assange to run for a Senate seat if he remains on the Australian electoral roll despite having lived overseas for several years.

"If he gets on the roll, then he can stand as long as he's solvent and not in jail and not insane," Mr. Wanna said.

Being convicted of a crime punishable under Australian law by 12 months or more in prison can disqualify a person from running for the Australian Parliament for the duration of the sentence, even if it is suspended.

Constitutional lawyer George Williams of the University of New South Wales said that provision of the constitution has never been tested in the courts in the 111-year history of the Australian federation and probably would not apply to a criminal conviction in a foreign country such as Sweden.

"I'm not aware of an impediment to him standing, even if he was convicted," Mr. Williams said.

Any adult Australian citizen can run for the Australian Parliament, but few succeed without the backing of a major political party. Only one of Australia's 76 current senators does not represent a party.

Every Australian election attracts candidates who have little hope of winning and use their campaigns to seek publicity for various political or commercial causes.

Mr. Wanna said the odds are against Mr. Assange winning a seat, but that he could receive more than 4% of the votes in his nominated state because of his high profile. At that threshold, candidates can claim more than $2 per vote from the government to offset their campaign expenses. Mr. Assange's bill to the taxpayer could reach hundreds of thousands of dollars.

The next Senate election cannot be called before July 2013 and is due around August. Candidates cannot officially register until the election is called at least a month before the poll date.

Mr. Assange's mother, Christine Assange, a professional puppeteer from rural Queensland state, said Saturday she had yet to discuss her son's political bid with him.

She criticized what she called the government's willingness to put its defense treaty with the United States ahead of the rights of an Australian citizen.

"The No. 1 issue at the next election regardless of who you vote for is democracy in this country—whether or not we're just a state of the U.S. and whether or not our citizens are going to be just handed over as a sacrifice to the U.S. alliance," she said.

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Posted in: Assange,Australian,Senate

U.S. Warns North Korea Over Rocket Launch

The U.S. threatened not to restart planned food aid to North Korea after Pyongyang said Friday it plans to launch a rocket next month.

Pyongyang's announcement came just two weeks after it promised the U.S. it wouldn't test long-range missiles, a deal that had raised hopes for progress on North Korean disarmament. The country said Friday the rocket is a satellite-carrying vehicle, but adversaries widely believe it is a missile being tested in a disguised attempt to advance its military capability.

The U.S., South Korea and Japan called the announcement "highly provocative," saying it violated the North's promises to other countries, and urged Pyongyang not to proceed. U.S. State Department spokeswoman Victoria Nuland said in a briefing that such a launch "would call into question the credibility of all the commitments" from North Korea to the U.S.

"Frankly, if they were to go forward with this launch, it's very hard to imagine how we would be able to move forward" with food aid, she said.

North Korea's explanation that the rocket, will put a satellite into space is one it has used in two of its three previous tests of long-range missiles, each of which brought international condemnation and economic penalties. None of North Korea's previous rockets reached space, though the country claims to have two "experimental" satellites in orbit.

The announcement creates a new dilemma for the countries that have been seeking for years to restrain North Korea's development of advanced missiles and nuclear weapons. North Korea on Feb. 29 said it wouldn't test long-range missiles as part of an agreement with the U.S., but that pact said nothing about other types of rockets. The U.S. on the same day announced plans to deliver food aid to North Korea. While Pyongyang painted the arrangement as a quid pro quo deal, Washington said it doesn't link humanitarian aid to political matters.

While North Korea has a long track record of striking deals with international partners and then eventually breaking them, Friday's development stood out in part for the swiftness with which the North apparently turned its back on its recent agreement with the U.S.

"The North Korean announcement is disappointing particularly in consideration of the efforts by the U.S. and South Korea to improve the situation and try to find a way to resume the six-party talks," said Park Chan-bong, a policy adviser in South Korea's ruling New Frontier Party and former negotiator with the North.

The U.S. statement said it was consulting with North Korea's neighbors and other countries on "next steps."

Japan Foreign Minister Koichiro Gemba told lawmakers Friday: "I have directed our people to take measures with a sense of urgency, but in a calm manner, in coordination with countries concerned such as the United States and South Korea."

North Korea walked away from the so-called six-party talks in 2009 after it was penalized for its last rocket launch. The talks with China, Japan, Russia, South Korea and the U.S. are designed to persuade Pyongyang to halt its weapons development.

North Korea said it prepared a new satellite to go into orbit sometime between April 12 and April 16 as part of events planned to commemorate the 100th anniversary of the birth of Kim Il Sung on April 15.

Kim, who is revered as North Korea's "eternal president," was the dictator who ran the country from its founding in 1948 until his death in 1994. His son Kim Jong Il led North Korea until his death last year. The new leader is Kim Jong Eun, third son of Kim Jong Il and one of several grandsons of Kim Il Sung.

The timing of the announcement and launch also raises North Korea's profile ahead of a gathering of world leaders in Seoul on March 26 to discuss ways to prevent nuclear terrorism. The proliferation of nuclear weapons isn't on the agenda, but North Korea has accused South Korea of staging the summit in order to build up criticism of Pyongyang.

North Korea said the rocket carrying the purported satellite will be fired from a new, larger launch facility near a town called Cholsan in North Pyongan, the country's northwestern province. Analysts in the U.S. and elsewhere call the launch facility Tongchang, because it is close to a small village by that name. It is about 50 kilometers (31 miles) south of Sinuiju, the North Korean city at the country's busiest border crossing with China.

North Korea said the rocket would fly south, likely over open waters of the Yellow Sea and East China Sea.
"A safe flight orbit has been chosen so that carrier rocket debris to be generated during the flight would not have any impact on neighboring countries," Korea Central News Agency, the North's state-run news service, said Friday.

The country's most recent long-range missile launch happened in April 2009 from a base near Musudan-ri, on North Korea's northwest coast, and flew eastward over Japan before crashing in the Pacific Ocean about 1,270 kilometers east of Japan.

That rocket crashed 600 kilometers short of where North Korean authorities had projected its second stage to fall. Its third stage didn't fire.

Even so, North Korea at the time declared it had successfully put in a place a second earth-orbiting satellite. It made the same claim when it launched its first long-range missile in 1998, but it didn't discuss satellites or space when it fired a long-range missile in 2006.

Though North Korea's advances in missile and rocket technology have been slow, they have been steady. The missile fired in 2009 went considerably farther than those in 2006 and 1998.

The new facility near Tongchang is far more advanced, with a 100-foot-tall launch tower and a below-ground tunnel to direct rocket exhaust. In recent years, it extended a rail line to a point nearby the facility and it tested a large rocket engine at the facility in November 2010.

In an apparent attempt to head off potential criticism of the launch, the North's announcement said it will "strictly abide by relevant international regulations and usage concerning the launch of scientific and technological satellites for peaceful purposes and ensure maximum transparency."

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Posted in: Korea,Launch,North,Rocket,Warns

Syria Wants Guarantees to Cease-Fire

Syria's government is open to a cease-fire deal if its opponents lay down weapons first, it has told the special envoy tasked with resolving the country's crisis, a response that fell short of the diplomat's expectations but opens the door for further talks.

The written response to U.N.-Arab League Joint Special Envoy Kofi Annan, viewed by The Wall Street Journal, is seen as unlikely to satisfy opponents of Syrian President Bashar al-Assad and international parties who have called for him to step aside.

But it appears to indicate a greater degree of cooperation by Syria's government than in past diplomatic rounds that have failed during the year in which Syria's peaceful uprising has morphed into civil conflict. The response appears to shift the focus of negotiations by a team being sent by Mr. Annan to Damascus next week toward the opposition.

"We are keen to end violence and to take necessary military arrangements adapted to the situation on the ground," Syrian authorities wrote in the response to proposals made by Mr. Annan last weekend.

The government has asked the diplomat to first provide "guarantees" that armed attacks on the government would stop, and that neighboring countries halt arms trafficking into Syria.

The Syrian request that the opposition disarm first would fall short even of what Damascus's principal backer, Russia, has demanded—that both the government and the rebels lay down their arms and withdraw from cities and towns at the same time. The West and its Arab partners want Damascus to stop fighting first.

A Western diplomat said it wasn't clear whether Syria would agree to individual points in its document, including an offer to admit reporters, or whether Mr. Annan, and more crucially the opposition, would have to agree to the entire offer.

Damascus's response came as thousands of Syrians marched to mark one year since the first days of the uprising, and as the regional isolation of President Assad deepened.

Turkey's foreign ministry on Friday "strongly urged" its citizens in Syria to return home, as a Syrian military campaign near its southern border sent the largest wave yet of refugees across the border. More than 1,000 Syrians poured into Turkey over the past two days, according to Turkish officials, with nearly 16,000 in total now being hosted across seven camps in Turkey's southern Hatay province.

Turkey said its embassy in Damascus will stop providing services March 22, but the consulate in Aleppo would continue to function. Prime Minister Recep Tayyip Erdogan said he would consider withdrawing the ambassador in Damascus after nationals returned home.

Mr. Erdogan said Turkey was considering, among other ideas, a "buffer zone" along the border with Syria to protect refugees. He has previously said such a measure is under consideration but his comments appeared to be the clearest announcement yet that discussions are underway on the rapidly deteriorating humanitarian crisis along its border.

In its first response to an International Committee of the Red Cross proposal made last month for a brief daily cease-fire, Syria said in its communication Friday that it was open to the two-hour halt. It isn't clear whether this agreement is also contingent on the opposition initiating the ceasefire.

Syria's ambassador to the U.N., Bashar Jaafari, said these points would be discussed with a team Mr. Annan is sending to Damascus over the weekend.

Though Syria's communication is unprecedented compared to previous diplomatic initiatives, a deal to end the violence is still far off. Syria's opposition is unlikely to agree to stop what it has called acts of self defense, before the government halts the shelling of cities like Homs and Idlib or pulls back the army entirely.

Earlier Friday, Mr. Annan spoke to the U.N. Security Council via video from Geneva, calling Syria's response to his proposals so far "disappointing," according to a diplomat present at the briefing. He said he has no illusions about the challenge he faces, but would send a technical team to Damascus to continue talks with the Syrian authorities.

"As long as you believe that the discussions you are having are meaningful, you should continue," Mr. Annan later told a press conference in Geneva. "If you make the judgement that it is a waste of time, or one side is playing for time, you draw the consequences and take appropriate action."

Mr. Annan tailored his approach to Mr. Assad in two face-to-face meetings in Damascus last weekend by holding back on an Arab League demand that he step aside, trimming his demarche to three points: "stop the violence; accelerate humanitarian assistance and establish credibility and confidence for the political process when it is initiated," he said.

Even as Damascus on Friday said it was committed to cooperating with Mr. Annan "to find a political solution to the crisis," it also pledged to continue to pursue a military campaign against opponents it has described as terrorists. "The Syrian government is continuing to do its duty to protect its citizens, disarm terrorism and hold its perpetrators to account," the foreign ministry said in a statement.

Syria's isolation in the region, meanwhile, deepened.

Six Gulf Arab states on Thursday said they would shut down their embassies in Syria, making good on the Gulf Cooperation Council of nations' February pledge to close their missions. Italy also on Wednesday closed its embassy in Damascus.

In Syria, tens of thousands of protesters took the streets in demonstrations meant to commemorate the one-year anniversary of the uprising, which activists varyingly mark between March 15—when protesters first marched in Damascus—and March 18—when security forces first opened fire on a march in the southern city of Deraa.

But they faced gunfire in many cities and towns, and couldn't demonstrate at all in areas where the military pressed a brutal offensive, including the northern city of Idlib and parts of Deraa in the south. In two villages in Idlib province, security forces sealed off local mosques in an apparent attempt to prevent protests that traditionally emerge after noon-time prayer, an activist in the area said.

Tanks moved into the north-central city of al-Raqqa for the first time Friday, according to activists and a resident reached by telephone. At least nine people were killed in the new military offensive, the U.K.-based Syrian Observatory for Human Rights reported. The group, citing activist reports it wasn't yet able to confirm, said 17 people were killed across the country on Friday.

Mr. Annan's three-point plan on Syria came a day after U.N. Secretary-General Ban Ki-moon called the status quo in Syria "indefensible" and said well over 8,000 people have been killed in the uprising.

"The longer you talk, or delay, more and more people, hundreds and even thousands of people will be killed.

So there is no time to lose," Mr. Ban told a group of reporters. Such a pared-down resolution, demonstrating a degree of international unity on Syria, would send a message impacting Mr. Assad's "political psychology," Mr. Ban said.

Russia has signaled that it might agree to a simplified resolution. But Mr. Ban acknowledged that the sticking point was over which side would stop shooting first in a cease-fire.

"The responsibility lies with the regime to stop the violence first," a Western diplomat said. "They have a more disciplined army. They can make an instruction to stop the violence at 6 o'clock in the morning. The opposition is made up of different groups, yes there are some armed, yes there are some extremists, but basically they are people defending their neighborhoods."

"They are not going to stop defending themselves until the regime stops attacking them," the diplomat said.

Friday's demonstrations in Syria followed a campaign by government supporters the previous day who marched in public squares across the country. The "Global March for Syria" campaign, in which public employees were urged to join the marches, used the same name for a campaign of worldwide protests planned by Syria's opposition diaspora this weekend to mark the uprising's one-year anniversary.

Syrian state media said millions of people marched in Thursday's rallies "to reiterate their allegiance to the country despite the pressure they are facing." State television broadcast clips showing damage to infrastructure and industry across Syria committed by terrorist groups over the past year.

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Posted in: Cease-Fire,Guarantees,Syria,Wants

Convicted Nazi Guard Demjanjuk Dies

John Demjanjuk, a retired U.S. autoworker who was convicted of being a guard at the Nazis' Sobibor death camp despite steadfastly maintaining over three decades of legal battles that he had been mistaken for someone else, died Saturday, his son said. He was 91.

Mr. Demjanjuk, convicted in May of 28,060 counts of being an accessory to murder and sentenced to five years in prison, died a free man in a nursing home in the southern Bavarian town of Bad Feilnbach. He had been released pending his appeal.

John Demjanjuk Jr. said in a telephone interview from Ohio that his father died of natural causes. Mr. Demjanjuk had terminal bone marrow disease, chronic kidney disease and other ailments.

It was not yet known whether he would be brought back to the U.S. for burial.

Ukrainian-born Mr. Demjanjuk (dehm-YAHN'-yook) had steadfastly denied any involvement in the Nazi Holocaust since the first accusations were levied against him more than 30 years ago.

 

John Demjanjuk in Munich, Germany, in May 2011, after being sentenced. 

"My father fell asleep with the Lord as a victim and survivor of Soviet and German brutality since childhood," Mr. Demjanjuk Jr. said. "He loved life, family and humanity. History will show Germany used him as a scapegoat to blame helpless Ukrainian POWs for the deeds of Nazi Germans."

His conviction helped set new German legal precedent, being the first time someone was convicted solely on the basis of serving as a camp guard, with no evidence of being involved in a specific killing.

Presiding Judge Ralph Alt said the evidence showed Mr. Demjanjuk was a piece of the Nazis' "machinery of destruction."

"The court is convinced that the defendant...served as a guard at Sobibor" from March 27, 1943, until mid-September 1943, Alt said in his ruling.

Israeli Holocaust scholar Yehuda Bauer, who researches at the Yad Vashem memorial, said Mr. Demjanjuk's story showed an important moral lesson.

"You don't let people, even if they were only junior staff, get away from responsibility," Bauer said.
Despite his conviction, his family never gave up its battle to have his U.S. citizenship reinstated so that he could live out his final days nearby them in the Cleveland area. One of their main arguments was that the defense had never seen a 1985 FBI document, uncovered in early 2011 by the AP, calling into question the authenticity of a Nazi ID card used against him.

Mr. Demjanjuk maintained that he was a victim of the Nazis himself—first wounded as a Soviet soldier fighting German forces, then captured and held as a prisoner of war under brutal conditions.

"I am again and again an innocent victim of the Germans," he told the panel of Munich state court judges during his 18-month trial, in a statement he signed and that was read aloud by his attorney Ulrich Busch.
He said after the war he was unable to return to his homeland, and that taking him away from his family in the U.S. to stand trial in Germany was a "continuation of the injustice" done to him.

"Germany is responsible for the fact that I have lost for good my whole reason to live, my family, my happiness, any future and hope," he said.

But representatives of victims, Jewish groups and others welcomed his trial as a legitimate quest for justice.
"A death is always tragic. But in this case it is important to say that it was right to put him on trial and sentence him," the president of Germany's Central Council of Jews, Dieter Graumann, told the AP.

"Justice does not know a statute of limitation, and age does not protect from punishment. This was never about revenge, but about justice," he added.

Mr. Demjanjuk's claims of mistaken identity, however, gained credence after he successfully defended himself against accusations initially brought in 1977 by the U.S. Justice Department that he was "Ivan the Terrible"—a notoriously brutal guard at the Treblinka extermination camp.

In connection with the allegation, he was extradited to Israel from the U.S. in 1986 to stand trial on charges of war crimes and crimes against humanity, convicted and sentenced to death. But the Israeli Supreme Court in 1993 overturned the verdict on appeal, saying that evidence showed another Ukrainian man was actually "Ivan the Terrible," and ordered him returned to the U.S.

The Israeli judges said, however, they still believed Mr. Demjanjuk had served the Nazis, probably at the Trawniki SS training camp and Sobibor. But they declined to order a new trial, saying there was a risk of violating the law prohibiting trying someone twice on the same evidence.

Mr. Demjanjuk returned to his suburban Cleveland home in 1993 and his U.S. citizenship, which had been revoked in 1981, was reinstated in 1998.

Mr. Demjanjuk remained under investigation in the U.S., where a judge revoked his citizenship again in 2002 based on Justice Department evidence suggesting he concealed his service at Sobibor. Appeals failed, and the nation's chief immigration judge ruled in 2005 that Mr. Demjanjuk could be deported to Germany, Poland or Ukraine.

Prosecutors in Germany filed charges in 2009, saying Mr. Demjanjuk's link to Sobibor and Trawniki was clear, with evidence showing that after he was captured by the Germans he volunteered to serve with the fanatical SS and trained as a camp guard.

Though there are no known witnesses who remember Mr. Demjanjuk from Sobibor, prosecutors referred to an SS identity card that they said features a photo of a young, round-faced Mr. Demjanjuk and that says he worked at the death camp. That and other evidence indicating Mr. Demjanjuk had served under the SS convinced the panel of judges in Munich, and led to his conviction.

He was ordered tried in Munich because he lived in the area briefly after the war.

Mr. Demjanjuk, who was removed by U.S. immigration agents from his home in suburban Cleveland and deported in May 2009, questioned the evidence in the German case, saying the identity card was possibly a Soviet postwar forgery.

He reiterated his contention that after he was captured in Crimea in 1942, he was held prisoner until joining the Vlasov Army—a force of anti-communist Soviet POWs and others formed to fight with the Germans against the Soviets in the final months of the war.

Mr. Demjanjuk was born April 3, 1920, in the village of Dubovi Makharintsi in central Ukraine, two years before the country became part of the Soviet Union. He grew up during a time when the country was racked by famines that killed millions, and a wave of purges instituted by Stalin to eliminate any possible opposition.
As a young man Mr. Demjanjuk worked as a tractor driver for the area's collective farm. After being called up for the Soviet Red Army, he was wounded in action but sent back to the front after he had recovered, only to be captured during the battle of Kerch Peninsula in May 1942.

After the war, Mr. Demjanjuk was sent to a displaced persons camp and worked briefly as a driver for the U.S. Army. In 1950, he sought U.S. citizenship, claiming to have been a farmer in Sobibor, Poland, during the war.

Mr. Demjanjuk later said he lied about his wartime activities to avoid being sent back to Ukraine, then a part of the Soviet Union. Just to have admitted being in the Vlasov Army would also have been enough to have him barred from emigration to the U.S. or many other countries.

He came to the U.S. on Feb. 9, 1952, and eventually settled in Seven Hills, a middle-class suburb of Cleveland.

He was a mechanic at Ford Motor Co.'s engine plant in the Cleveland suburb of Brook Park and with his wife, Vera, raised three children — son, John Jr., and daughters Irene and Lydia.

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Posted in: Convicted,Demjanjuk,guard

High-Profile Chinese Politician Bo Xilai Is Removed from Post

 

Bo Xilai, Communist Party secretary of Chongqing, leaves after the third plenary session of the National People's Congress annual session at the Great Hall of the People in Beijing on March 9, 2012. He was removed from his post two days later

Bo Xilai, the high-profile Chinese official who was once seen as a favorite for elevation to the top echelon of Chinese political power, has been removed from his office as Communist Party secretary of the southwestern megacity of Chongqing, the official Xinhua news agency announced. Bo’s axing comes one day after he was publicly criticized by Chinese Premier Wen Jiabao. Bo’s rise was derailed last month when a key deputy, former police chief and Chongqing vice mayor Wang Lijun, made a surprise visit to a U.S. consulate. Wang spent an evening at the consulate and was then detained by state security officers upon leaving. Wang has also been removed from his official post, Xinhua announced today.

At a press conference yesterday at the closing of the National People’s Congress (NPC), Wen called on Chongqing officials to “reflect and earnestly draw lessons from the Wang Lijun incident.”

Chinese politics are murky at the best of times, but Bo’s removal comes during a sensitive leadership-transition period, when there is a strong tendency toward even greater secrecy and much of the decision-making happens behind close doors. But the Wang Lijun incident has thrown some of that maneuvering into the open. This fall President Hu Jintao and Premier Wen will begin stepping down from their official posts, with Vice President Xi Jinping and Vice Premier Li Keqiang seen as the most likely candidates for their replacement. The makeup of the Politburo standing committee, the country’s highest-level decision-making body, will also be reconfigured, with seven of the nine members expected to be replaced. Bo was considered to be a favorite for one of those seats until Wang appeared on Feb. 7 at the U.S. consulate in Chengdu, a city about 200 miles (320 km) from Chongqing. During a press conference at the NPC last week Bo denied that he was under investigation or that he had offered to resign. Bo said he took responsibility for everything that happens in Chongqing but acknowledged he was surprised by Wang’s sudden appearance at the U.S. consulate.

In recent years Bo, 62, pushed an aggressive crackdown on corruption and organized crime in Chongqing. He also sought to revive Mao-era songs and similar “red culture.” Those campaigns, combined with a “Chongqing model” of economic development that emphasized a better distribution of wealth and improved public services, helped raise Bo’s stature both at home and abroad. But those efforts also had detractors who suggested that Bo’s antigang crackdown, which was led by Wang, ran roughshod over civil rights. And the red-culture campaign reminded some of the Cultural Revolution, when such songs were popular. In his criticism of the Chongqing officials yesterday, Wen made an oblique reference to the Cultural Revolution, citing a major Communist Party plenum held shortly after the end of that chaotic and bloody political campaign and saying that “our practice must be based on the experiences and lessons we have gained from history.”

The state press announcement said that Bo would be replaced in Chongqing by Zhang Dejiang, the former party secretary of the prosperous coastal province of Guangdong and a graduate of Kim Il Sung University in North Korea. Cheng Li, an expert on Chinese politics at the Brookings Institution, says that like Bo, Zhang is also a “princeling,” the child of a former party official. More significantly both Bo and Zhang are protégés of former Chinese President Jiang Zemin. Thus replacing Bo with Zhang retains a balance of party factions, Li says. “Based on what happened, we do know a deal has been made,” Li says. “The person who replaced Bo is also from the same faction.” Political analysts had previously speculated that Bo would be given an honorary position, possible at a political body such as the NPC. The Xinhua announcement gave no indication of Bo’s next position, but it is safe to say that he is not moving up.

Li, of Brookings, says he expects that the Communist Party will eventually announce an investigation and possibly charges against Bo. There is a chance that Bo could be removed from his position on the 25-member Politburo as well, Li says, something that hasn’t happened since former Shanghai Mayor Chen Liangyu was removed from office in 2006 and jailed for corruption. But Bo’s downfall is happening more suddenly, and under a more intense public spotlight. On Thursday after his removal was announced Bo Xilai become a top 10 trending term on Sina Weibo, a Chinese Twitter-like service. “China has changed a lot in these six years and that gives a tremendous burden for the national leadership to tell people what really happening,” Li says. “If they give an interpretation that does not satisfy the public, there could be strong reactions and it will only embarrass the top leadership.”

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Posted in: Chinese,High-Profile,Politician,Removed,Xilai

Asia Stocks Mostly Down Amid Profit-Taking

Asian stock markets were mostly lower Friday as traders took profits following strong gains and awaited the release of more economic data from the U.S.

Benchmark oil remained above $105 per barrel while the dollar rose against the yen and the euro.

Japan's Nikkei 225 index was slightly higher at 10,127.83 after morning profit-taking sent the benchmark into negative territory. The Nikkei has clocked a week of gains largely due to the yen's retreat from record highs against the dollar.

Hong Kong's Hang Seng fell 0.3 percent to 21,293.75 and South Korea's Kospi dropped 0.2 percent to 2,040.48. Australia's S&P/ASX 200 was slightly down at 4,276.20. Benchmarks in Taiwan, Singapore and New Zealand fell. Mainland Chinese shares were mixed. Thailand and the Philippines rose.

Hong Kong stocks sagged a day after the Bank of Communications, China's fifth-largest lender, announced it will issue shares to meet requirements for capital adequacy by China's banking regulator.

The prospect of other banks possibly following suit made investors anxious, according to Francis Lun, managing director at Lyncean Holdings Ltd. in Hong Kong.

"It is rumored that several other banks will follow," Lun said. Such actions mean "you will dilute existing shareholders: More shareholders, so you will get less in return."

Agricultural Bank of China lost 0.5 percent and Bank of China Ltd. fell 0.6 percent. Industrial & Commercial Bank of China, the world's biggest bank by market value, shed 0.2 percent.

Investors also were pausing to evaluate the latest economic news out of the U.S. showing fewer claims for unemployment and an improvement in manufacturing.

The U.S. government said applications for unemployment benefits fell last week to 351,000 — matching a four-year low. That's a sign that the job market is improving.

In addition, manufacturing activity in New York rose to a 21-month high and in Philadelphia to a nearly one-year high, the Federal Reserve said Thursday. Meanwhile, industrial production figures for February are due to be released later Friday.

"It takes time for investors to further gauge the US economic prospect before markets get excited again. Trading in Asia is likely to be in ranges today without much direction," analysts at Credit Agricole CIB in Hong Kong said in an email.

Construction and property-related shares continued to slump following a pledge by Chinese Premier Wen Jiabao to maintain curbs on property to cool surging housing prices despite complaints they might worsen an economic slowdown.

China Resources Cement Holdings Ltd. fell 0.7 percent. China Overseas Land & Investment Ltd. lost 1.6 percent.

Companies that supply parts to Apple Inc. posted solid gains, Kyodo News agency said. Foster Electric gained 3 percent while Taiyo Yuden added 2.2 percent. Apple's latest iPad went on sale in Asia on Friday.

Benchmark oil for April delivery was up 42 cents to $105.53 in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents to settle at $105.11 per barrel in New York on Thursday.

The euro fell to $1.3085 from $1.3097 late Thursday in New York. The dollar rose to 83.53 from 83.38 yen. The greenback rose to as high as 84.175 yen overnight Thursday, its highest point against the yen since April 13.

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Posted in: Mostly,Profit-Taking,Stocks

Why Sri Lanka Remains Defiant Against New Allegations of War Crimes

 

Sri Lankan Muslim children attend a protest against the U.N in Colombo

“They didn’t believe that anyone in the international community was willing to stop them, and they were right.” That is the lucid explanation offered by John Holmes, the British diplomat and former chief of the U.N.’s humanitarian operations, as to why, in 2009, the Sri Lankan government was willing to risk international condemnation and accusations of war crimes in its all-out final push to end its 26-year-long war against the Tamil Tigers. Holmes was interviewed by Britain’s Channel 4 for a documentary that aired yesterday called Sri Lanka’s Killing Fields: War Crimes Unpunished. It is a follow-up to a film aired last June by Channel 4, and this one, too, is full of images of graphic violence and suffering, including what appears to be the body of a 12-year-old boy, the son of former Tamil Tiger leader Prabhakaran, shot five times in the chest at close range. International-law experts interviewed in the documentary called it “a crime and a war crime.”

That allegation is one of four case studies presented in detail; the others include allegations that the Sri Lankan government knowingly shelled a U.N. field hospital, denied adequate food and medicine to civilians in a so-called no-fire zone and fired heavy weapons into an area full of civilians, whom it then claimed to have “rescued” in a humanitarian operation. The Sri Lankan government has categorically denied all the allegations in the latest Channel 4 report: “Channel 4 chooses to focus its attention on a number of highly spurious and uncorroborated allegations and seeks — entirely falsely — to implicate members of the Sri Lankan government and senior military figures.” The government also criticizes Channel 4 for airing the documentary during the current session of the U.N. Human Rights Council (UNHRC): “The timing of this programme is nothing more than a cynical and concerted attempt to assist in gathering support for a resolution calling for action on Sri Lanka, tabled at the ongoing 19th Session of the Human Rights Council.”

The timing is certainly not coincidental. The UNHRC resolution is only the latest effort to call the Sri Lankan government to account for its conduct during the final phase of the war. The Channel 4 documentary presents some of the most shocking allegations of atrocities, but they are by no means the first. During the last few months of the war, there were numerous reports of civilian casualties and forced detention of civilians. But unlike the conflict in Syria, there were no independent observers in the war zone in the war against the Tamil Tigers — the Sri Lankan government refused to allow journalists or international aid agencies to document what was happening — so the calls for accountability began only after the fighting had ended. In October 2009, U.S. officials interviewed Defense Secretary Gotabaya Rajapaksa, the President’s brother, who is a U.S. citizen, and former army chief Sarath Fonseka, who is a green-card holder. In 2010, the U.S. State Department’s point man on war crimes, Stephen Rapp, looked into the issue. Last year, the U.S. spent most of its diplomatic energy pushing the Sri Lankan government to launch a credible investigation of its own, through its Lessons Learnt and Reconciliation Commission (LLRC).

The LLRC was a disappointment. While it did acknowledge, for the first time, that there were significant civilian casualties, “the report, nonetheless, does not fully address all the allegations of serious human-rights violations that occurred in the final phase of the conflict,” State Department spokeswoman Victoria Nuland said shortly after it was released in December 2011. The State Department then called on the government of Sri Lanka to show that it was serious about accountability. The new resolution before the UNHRC is a sign that the U.S. has concluded that it is not, and will now take the case against Sri Lanka to the international community.

While this multilateralist foreign policy has proved effective elsewhere — most notably in Libya — it is unlikely to work with Sri Lanka. The U.S. no longer has the clear support of India, an ally and the most crucial partner on any international action involving Sri Lanka. Gotabaya Rajapaksa described exactly how important India was to Sri Lanka’s war effort in a June 2011 speech: “From the time of his election, President Rajapaksa went out of his way to keep New Delhi briefed of all the developments taking place in Sri Lanka. He understood that while other countries could mount pressure on us through diplomatic channels or economic means, only India could influence the military campaign.”

Last year, there were signals from New Delhi that the Indian government might lean on Sri Lanka in response to pressure from political parties in India’s Tamil-speaking south, who have long been sympathetic to the plight of Sri Lanka’s Tamil minority. But that political calculus has shifted: India’s Congress Party has grown estranged from those allies, and New Delhi is suddenly much less interested in pushing for change. Foreign Minister S.M. Krishna told Parliament that his main concern was “whether our actions will actually assist in the process of reconciliation in Sri Lanka” by encouraging dialogue between Sri Lanka’s Tamil political parties and the government. This is a spurious argument — the Tamil parties, under the umbrella Tamil National Alliance (TNA), have already lost faith in the government of Sri Lanka as a negotiating partner and have called on the international community to pass the UNHRC resolution: “The TNA states that the failure of the Council to act will enable governments, which in fact demonstrate no commitment to change, to escape their obligations by merely making empty promises of reform.”

Sri Lanka has been pushing hard to “win” the vote at the UNHRC and it seems confident of Indian support. In an interview with NDTV, the Sri Lankan Foreign Minister commented, “India is our closes neighbor and friend and is a responsible world power. They will take the right decision at the right time.” Even those in the Indian political establishment, like the retired diplomat and commentator M.K. Bhadrakumar, acknowledge that this small country has deftly outplayed India, the regional superpower.

“New Delhi had estimated that its decisive role in helping Sri Lanka vanquish the Tamil Tigers would enhance its prestige and influence in Colombo. However, the LTTE’s destruction has only led to triumphalism in Colombo. Riding a wave of Sinhalese chauvinism, Colombo overnight turned its back on the assurances held out to New Delhi that once the LTTE was done with, a fair, just and equitable solution to the root problem of Tamil alienation could be found. Plainly put, New Delhi’s capacity today to nudge Colombo in that direction is virtually nil.”

If its resolution at the UNHRC passes, the U.S. will be left with few other options. It could try to prosecute Gotabaya Rajapaksa, a U.S. citizen; it could push for sanctions or ask the U.N. Security Council to refer the case to the International Criminal Court. None of those seem very likely; but in any case, the Sri Lankan government has already made some moves to protect itself. It has moved several top military officials, including two of those named in the Channel 4 report, into senior diplomatic posts, which give them immunity from prosecution.

In a sense, this month’s battle at the UNHRC is the yet another stage in a long endgame to the war against the Tamil Tigers, one that President Mahinda Rajapaksa and others in his government have been strategizing for years. In a July 2009 interview, I asked him about the possibility of action against him for human-rights abuses.

TIME: What if an elected government is acting against its own people?

Rajapaksa: Are you going to punish the whole citizens for that, or the man who is responsible? Anywhere in the world if something goes wrong, they punish the whole country. Take me. Say that I violated all these human-rights violations, killed people, right? Do you punish me, Mahinda Rajapaksa, or the innocent people of this country by sanctions, embargoes, travel advisories? You punish the whole country.

TIME: What is the appropriate punishment, then, for an elected government?

Rajapaksa: You can take him out of U.N. membership. But still give the facilities to the people. Or ban him [from travel by not] giving visas. There are ways of punishing me if you want. There, now by saying that, I will get punished.

Then he laughed.

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Posted in: Against,Allegations,Crimes,Defiant,Lanka,Remains

United and Chelsea Show That English Soccer is a Game for Old Men

 

Chelsea's Didier Drogba, left, and Napoli's Hugo Campagnaro battle for the ball during the UEFA Champions League match at Stamford Bridge, London 

Among the most derisive chants that the fans of an English football club can hurl at the players and fans of a rival team is this: “You ain’t got no history! And over the past week, both Manchester United — by gliding past their derby rivals Manchester City to the top of the table — and Chelsea, in their improbable 4-1 Champion’s League win over Napoli, have served up reminders of the importance of history, and institutional memory, in the English game.

History is everything in the culture of English football, a game whose passion is grounded in the powerful chemistry of local affinities where the club — and its folklore — symbolize bonds of neighborhood, tribe, sect and class that have since morphed into its own imagined community of shared suffering and occasional salvation. No lifelong Liverpool fan (which I became in 1974) can fail to break out in misty-eyed gooseflesh when the club’s anthem, the Gerry and the Pacemakers’ cover of the Rogers and Hammerstein  show-tune “You’ll Never Walk Alone“, is played over the tannoy and lustily joined by a mass choir of 60,000. The song enshrines our history, evoking its triumphs and its tragedies and decades of football folklore that unite us in secular communion with the spirit of Bill Shankly, the curmudgeonly Scottish socialist who understood the club as a symbol of working class pride and left a legacy of unparalleled success and a mythology of solidarity as the key to the identity of Liverpool FC. Don’t just take it from me; take it from Elvis Costello.

We’re not title contenders, right now, and haven’t been for some years. But we have history, and history is priceless because it gives the club its authenticity. We still believe, regardless of where we stand on the league table (seventh, currently), that we can beat anyone on the day. And the results prove that we can. We may begrudge Manchester United their dominance in the Premier League over the past two decades, but there’s no denying their history of triumphs, and of tragedies. Respect is due. Arsenal have a history. So do Spurs.

“You ain’t got no history” is really reserved for clubs suddenly flush with the cash of some oligarch, oil sheikh or other member of the global 1% who’ve used it to assemble an enviable stable of thoroughbreds to make themselves Johnny-come-lately title contenders. Yes, we’re resentful of those clubs who’ve tried to buy success — irrational as that may seem in a market where even the clubs with “history” depend on hundreds of millions in investment in order to remain competitive. (Thank you, Fenway Sports Group, the Boston Red Sox owners who’ve done exactly that for Liverpool…)

Chelsea became the consummate “no history” team when they were acquired in 2003 by the Russian oligarch and Putin-pal Roman Abramovich, who over the ensuing nine years has spent close to $1.5 billion in buying some of the world’s finest players. Sure, they gave us our moments of schadenfreude when some of those players — $50 million Andriy Schevchenko,  or former Liverpool striker Fernando Torres who cost Abramovich close to $80 million — failed spectacularly to deliver for Chelsea the goals they had regularly produced for other clubs. But more galling was the fact that buying success actually worked for Abramovich. Portuguese coach Jose Mourinho — whose man-management ability is unrivaled when it comes to convincing his players they are invincible, and that belief becomes vital to their success — took Chelsea to back-to-back titles in 2005 and 2006. And they did it again in 2010 under Carlo Ancelotti.

Resentment at their buying the title may be why so many of us have enjoyed their implosion this season. Having hired the new Portuguese whizz-kid Andre Vilas-Boas as his coach, Abramovich was looking to rebuild a team that had won him everything except his most coveted prize, the European Champion’s League trophy. Vilas-Boas’ methods, and his disregard for reputation, particularly when it came to dropping players Mourinho had deemed “untouchable” — like midfielder Frank Lampard, defender Ashley Cole and occasionally even Ivoirian striker Didier Drogba — eventually ignited a player revolt. Or, at least a split dressing room, with the old guard led by the captain, John Terry, making obvious their disdain for the new man, who failed to deliver the results expected by the oligarch. With Chelsea out of the top four position in the English Premiership that provide access to the Champion’s League, Abramovich swung the axe. (And oh how we cackled! He’d spent close to $20 million simply to persuade Vilas-Boas’ previous employer, Portuguese club Porto, to release him from his contract; having paid the hapless fellow $4 million in wages for the 40 games he was in charge, Abramovich will now have to pay Vilas-Boas a further $15 million for the remainder of his contract.)

But watching Chelsea’s heroic comeback on Wednesday to knock Napoli out of the Champion’s League, Abramovich would have felt vindicated. Here were the players Vilas-Boas was ready to discard — Mourinho men — pulling off an epic turnaround from a 3-1 deficit on the first leg: Didier Drogba majestically throwing himself across his marker, striking like a cobra to head home Ramires’ near-post cross; Terry glancing his header inside the near post for his umpteenth decisive goal from a Lampard set piece; Lampard cool as ice blasting home from the penalty spot and then Drogba, after terrifying the Napoli defense all night, producing a magic turn in the area to lose his marker and tee up Ivanovic for the winner.

Vintage stuff. Like it or not, the men Mourinho bought with Abramovich’s millions have created a mini-history of their own at Chelsea.

They are old, of course, for footballers: Drogba is 34, and is expected to seek a final payday in China at the end of this season; Lampard is 32 and may also move on; Terry turns 32 in December as does Ashley Cole — another of the Mourinho men who made a decisive contribution against Napoli. Michael Essien, the Mourinho man who anchored the midfield against Napoli is 30, but his knees have started to go. Still, Wednesdays heroics were a moment when Chelsea claimed its own history, not necessarily as a club and symbol as much as a team — a group of players with a shared history and ethos, who understand one another and how to turn a game around, and whose commitment, nous and leadership steady the younger players around them.

History has been decisive at the top of the table, too, where last weekend Manchester United recaptured the lead from their city rivals, Manchester City — another team with “no history” (or rather, a history of being elegant also-rans until Sheikh Mansour bin Zayed Al Nahyan, a member of the royal family of the oil emirate of Abu Dhabi, bought the club three years ago and has poured more than $1 billion into assembling a team that could emulate or surpass what Chelsea did for the oligarch Abramovich.) The Mansour millions have put some of the most talented players in game in the sky-blue shirt — Spain’s David Silva, Argentina’s Sergio Aguero, France’s Samir Nasri and the mercurial Italian Mario Balotelli to name but four in what would be deemed an “embarrassment of riches” if people rich and vain enough to buy football clubs were actually embarrassed by that sort of thing.

The problem? They have no history as a team. Every player in Manchester City’s typical starting lineup bar goalkeeper Joe Hart and midfielder Gareth Barry is in either his first or his second season at the club; all (including Barry, now in his third season) had been established stars on other teams when the lure of the City’s lucre proved irresistible. And some of the antics this season — Balotelli’s spectacular indiscipline, Carlos Tevez refusing to go on as a substitute against Bayern Munich, or periodic tales of dressing room rebellions against coach Roberto Mancini — remind us that they’re a collection of exorbitantly paid individuals rather than a team. And football is a team sport — a proposition tested when things are going badly.

Having coasted into what appeared to be an unassailable lead earlier in the season, City have suddenly begun to wobble, losing three of their last six premiership games (after being knocked out of the Champion’s League). United, legend has it, only goes into top gear after Christmas, and over the same period, the men in red have won five and drawn one. United have a history, of course, not just as a club, but as a team — Sir Alex Ferguson has been their coach for two decades, and he has molded a culture of high-tempo attacking football and a never-say-die mentality that allows them to grind out victories even when they’re playing badly, never allowing their heads to drop when the tide of a game is against them. And he has been remarkably served, this season, by two old men. Ryan Giggs, the 38-year-old Welsh attacking midfielder whose ability to keep on running after 21 years in the first team has roast beef-and-two-veg English commentators waxing lyrical about the virtues of yoga — Giggs’ fitness secret — remains a key player. Even more astonishing has been Paul Scholes, the 37-year-old midfield general who actually came out of retirement in January to rejoin the squad and has since proven to be a vital asset.

Scholes and Giggs both spent their entire premiership careers at United, and have this season provided that vital leadership and continuity that has integrated younger stars into a winning system in which egos are left in the locker — or at least, in the glove compartment of the Ferrari out in the players’ parking lot. Right now, two points ahead of City at the top of the table, you’d bet on them winning their 20th title this spring. That’s hard to swallow for a Liverpool fan, of course, because until a couple of seasons ago, our 18 league titles had been a record.

Still, there’s a reassuring lesson in there: History still counts.

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Posted in: Chelsea,English,Soccer,United

Why U.S. Tax Evaders Can No Longer Rely on Swiss Secrecy

 

A man walks by Wegelin & Co. bank headquarters building in St. Gallen, Switzerland. Switzerland's oldest private bank was the first foreign bank in history to be indicted by the U.S. government

Switzerland's oldest private bank, Wegelin & Co., had survived three centuries of upheaval on the continent, including Napoleon's invasion of the country and two World Wars. But its illustrious history was brought to an end last month by an unlikely source: a U.S. government desperate to track down tax evaders.

In early February, in a move that rattled Switzerland's financial industry, the U.S. Department of Justice indicted Wegelin on charges of helping wealthy Americans hide $1.2 billion from U.S. tax authorities. As the first foreign bank in history to be indicted by the U.S. government, the ruined Wegelin was quickly sold to a former rival, Raiffeisen Group. But the Obama Administration was just getting started — it also ramped up the pressure on 11 more Swiss financial institutions to hand over their American clients' names. Now it looks like U.S. authorities might get their wish.

On March 4, the Swiss parliament approved an amendment to the country's existing tax accord with the U.S., which, when ratified by the U.S. Senate, will give the American government unprecedented access to accounts held by its citizens in Switzerland. While the existing agreement has long allowed the release of tax information in cases of proven wrongdoing, various stumbling blocks, like different interpretations of tax evasion under Swiss and American laws, often slowed or even halted the process. (Evasion is a civil, not a criminal, offense in Switzerland.)

The amended treaty will now allow U.S. authorities to identify American tax evaders who exhibit certain "behavioral patterns" more easily. That includes stashing undeclared money in banks, "dummy" corporations, trusts and foundations created specifically to hide these assets. The new treaty will also allow U.S.
authorities to request information from foreign banks that don't do business on American soil but have U.S. clients. Banks and account holders who are found to be hiding undeclared U.S. assets will be forced to pay a substantial fine to the American government.

"This is a strike at the heart of the Swiss banking sector and a major breakthrough for the U.S.," says Teodoro Cocca, an adjunct professor at the Swiss Finance Institute, a private foundation created by Switzerland's banking and finance community in cooperation with leading Swiss universities. Cocca warns that the pressure on Switzerland, which has long prided itself on its banking-secrecy rules, will now increase dramatically if other countries "also demand the same exchange of information rights."

The U.S. Department of Justice has been tightening its grip on Switzerland since 2008, when an investigation revealed that the country's biggest bank, UBS, helped rich Americans hide billions in undisclosed offshore accounts. To avoid criminal charges, UBS paid a $780 million fine and released the names of 250 clients suspected of tax evasion.

Both the Swiss government and Swiss Bankers Association welcomed the new treaty, hoping it will finally end the long-running tax dispute with the U.S. But not everyone in Switzerland is happy about it. The right-wing Swiss People's Party (SVP) argues that the agreement is a breach of constitutional privacy rights and a brazen attempt by a cash-strapped U.S. government eager to fill its coffers with tax revenue. "Americans disregard rights of others just to be able to pay off their huge debt," the party claims on its website, adding that American authorities are "hypocrites" for pressuring Swiss banks while thousands of "dummy" companies set up in Delaware are helping U.S. corporations evade taxes in their own country.

Switzerland is the world's largest offshore-banking center, with $2.1 trillion in foreign money under management, but the Swiss believe their country's reputation as a haven for illicit funds is unjustified. Legislation passed in 1998 made money laundering illegal, while other laws require that any suspicious deposits be reported to the authorities. Last year, another new law was passed allowing the government to confiscate funds deposited in Switzerland by plundering dictators and return the money to the country of origin. And numbered anonymous Swiss bank accounts are a myth — the law requires that all financial institutions identify their customers and ensure that deposits come from legitimate sources.

Some Swiss banks worry that the new treaty will make the country's financial sector less attractive to overseas clients. But experts say this is an unlikely scenario. "The future competitiveness of Swiss banks doesn't depend solely on secrecy," says Stéphane Garelli, an economist and director of the World Competitiveness Center at the International Institute for Management Development in Lausanne. "Switzerland offers other advantages — a stable democracy with transparent arbitration and justice procedures — which may not be the case of certain emerging competitors, especially in Asia." Martin Naville, head of the Zurich-based Swiss-American Chamber of Commerce, agrees. He says Swiss banks still offer "more discretion, professionalism and security, within tax compliant and legal bounds, than financial institutions in many other countries."

While the long-term impact of the new treaty remains unknown, the U.S. government has made at least a couple things clear: Swiss banks will have to change the ways they operate if they want to stay on Washington's good side, and Americans hoping to hide their wealth in Switzerland can certainly no longer bank on secrecy.

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Posted in: Evaders,Longer,Secrecy,Swiss