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How U.S. treats "Suspects"

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    Posted: 07 July 2012 at 5:14am

JUAN GONZÁLEZ: We turn now to a shocking new story about U.S. secret operations in Africa. The Nation magazine has just published an exposé titled "How the US Rendered, Tortured and Discarded One Innocent Man." The article by human rights investigator Clara Gutteridge recounts the ordeal of a Tanzanian man named Suleiman Abdallah. He was captured in Mogadishu in 2003 by a Somali warlord and handed over to U.S. officials, who had rendered him to Afghanistan for five years of detention and torture. Imprisoned in three different U.S. facilities, Abdallah said he was subjected to severe beatings, prolonged solitary confinement, forced nakedness and humiliation. He said he was also sexually assaulted, locked naked in a coffin, and forced to lie on a wet mat, naked and handcuffed. Suleiman was finally released in July 2008 from Bagram Air Force Base—with a piece of paper confirming his innocence. However, he has received neither reparations nor apologies for his ordeal.

For more, we’re joined in London by Clara Gutteridge. She used to work as a secret prisons investigator at the human rights organization Reprieve.

Welcome to Democracy Now!


JUAN GONZÁLEZ: Could you lay out for us how you came across this case and how you got involved in Suleiman Abdallah’s situation?

CLARA GUTTERIDGE: My job at Reprieve used to be finding disappeared people, people who had been disappeared by the United States in the context of the war on terror. And, you know, my methods were quite varied, but one of the things I used to frequently do would be to interview people who had just been released from one of these secret prisons and ask them about the other people that they were detained with. And they could usually remember quite well who was there. And so, from that, I kind of built up this list of people. [inaudible] 2007 onwards, my work increasingly focused on East Africa, and I had this list of people that I would always ask [inaudible]—

JUAN GONZÁLEZ: We seem to have lost Clara Gutteridge. We’re going to try to see if we can get her back. Her recent piece for The Nation is called "How the US Rendered, Tortured and Discarded One Innocent Man." We’re trying to see if we can get that connection back. OK, well, we’ll take a break while we try to see if we can get Clara Gutteridge back on the line. This is Democracy Now!, We’ll be back in a minute.


JUAN GONZÁLEZ: This is Democracy Now!,, The War and Peace Report. I’m Juan González. We’re still having trouble getting to Clara Gutteridge, so we’re going to move now to Peru...

[Peru segment]

JUAN GONZÁLEZ: We’re joined now by the British human rights investigator, Clara Gutteridge, we had on before, before we had the difficulties. We were talking with her about the U.S. secret operations in Africa. The Nation magazine has just published her exposé titled "How the US Rendered, Tortured and Discarded One Innocent Man." The story recounts the ordeal of a Tanzanian man named Suleiman Abdallah.

Clara Gutteridge, welcome back to Democracy Now! Hopefully we’ll be able to keep you on the line this time. Continue with where you left off, talking about how you learned of Suleiman Abdallah’s situation.


So I was saying that my job at Reprieve a couple of years ago involved, essentially, building files on people who had disappeared in the context of the U.S. war on terror, people who were being held in the network of secret prisons around the world. And one of the cases I was building a file on was Suleiman Abdallah’s. And routinely, what I would do would be things like interview people that had just been released from U.S. detention, put that together with other sorts of documentation, then, hopefully, ultimately, find out where somebody was being held and get representation—get authorization to represent them in prison.

But the thing that happened with Suleiman’s file was that it just grew and grew and grew, and I still had no idea where he was. So I found out all of this really fascinating stuff about, you know, how he’d been picked up in Somalia in 2003, sold by a warlord, funny things about his personality and his life. His nickname is Travolta, because he was very fond of dancing—things like this. But I had no idea, you know, where he was being held. And I would—every time I met somebody that had been held in one of these prisons, I would ask them, "Do you know, Suleiman Abdallah, an East African man?" And the answer was always no. And then, eventually, in 2008, I learned off record that he was being held in Bagram Air Force Base in Afghanistan, which is or was essentially Guantánamo Bay’s lesser-known, more evil twin. And then, not long after that, I heard through kind of NGO contracts that he had been released and that he was at home in Tanzania or in the island of Zanzibar. And so, I went to meet him.

JUAN GONZÁLEZ: Well, can you trace for us his amazing odyssey from country to country and how this happened?

CLARA GUTTERIDGE: Right. Well, I mean, it’s been—it’s very difficult to piece together, obviously. And we only know, you know, some of—some of what happened. But he’s from Zanzibar. He grew up in Zanzibar, like many people from that island. He was fond of fishing, and he was, you know, good with boats. And so, he ended up being a kind of itinerant trader going up and down the coast from Zanzibar up the Kenyan coast to the southern bit of Somalia, which is also Swahili-speaking. And he was kind of trundling up and down in his boat and then ended up in Mogadishu, where he got a job for a couple of weeks.

And then he was abducted by a notorious warlord whose name is Mohamed Dhere, who still lives in Mogadishu—in fact, he’s one of the most powerful people in Somalia still, he’s had various roles in successive Somali governments—sold for a bounty to Americans, presumably, members of the CIA, who rendered him via Djibouti and Kenya to secret prisons in Afghanistan. And in Afghanistan, he was held, first of all, in a prison he called "The Darkness," which we think is a prison called the "Dark Prison," where prisoners are held in pitch black with music pumping 24 hours a day, where they’re like very, very seriously abused, no access to lawyers; then taken to a prison called the "Salt Pit," which was slightly better, although not much better; and then, ultimately, to Bagram Air Force Base, where he was held for about five years, until he was ultimately released, sent back to Tanzania in 2008.

JUAN GONZÁLEZ: And the original reason why the U.S. government took him and jailed him?

CLARA GUTTERIDGE: Right. Well, this is obviously—is very difficult to piece together, because the U.S. government won’t talk about why this happened. But it seems as though—so, in Somalia, between 2002 and 2005, there was this system of—essentially, the CIA would pay warlords money for so-called terror suspects. The same thing happened in Pakistan. Eighty-five percent of the people in Guantánamo Bay, in fact, were sold for a bounty in Pakistan rather than being picked up off any battlefield. And in Somalia, this was going on, as well, although it was much quieter, there was less attention. And we think that Suleiman may have originally been sold as—passed off, if you like, as a notorious terror suspect called Fazul, who was ultimately, you know, killed only last year. Of course, he wasn’t Fazul. He was a nobody from Tanzania. One thing we have noticed is that it tends to be kind of what tended to be the more kind of light-skinned, foreign-looking people that were sold, you know, maybe because, you know, as in Pakistan, it was more Arab-looking people, so people that could be passed off as something—something suspicious.

JUAN GONZÁLEZ: And I summarized in the introduction some of what he went through, but could you describe for us what you learned was some of the torture and the treatment that he underwent, the abuses that he underwent?

CLARA GUTTERIDGE: Right. Well, I mean, the worst of the torture, we’re not authorized to talk about, because it’s too painful for him to talk about, and he doesn’t want it to be made public. What I can say is that he was subject to some of the worst torture that I have ever encountered in, you know, interviewing over a hundred U.S. torture victims. He was routinely beaten. He was sexually assaulted. He was locked in a cage. He was locked in a kind of—in a coffin-shaped box. He was subjected to extreme temperatures of hot and cold. He was threatened that, you know, he would never be released again. You know, the list really is endless. It took—it took, you know, two intensive days of debriefing for the medical experts to document what he went through. So, obviously, I can’t really summarize it all in such a short space of time.

JUAN GONZÁLEZ: And who did he say inflicted this torture on him?

CLARA GUTTERIDGE: You know, U.S.—generally speaking, it was a series of different people, but mainly U.S. personnel, so DOD and other—probably the CIA, although we—of course, we can’t be certain.

JUAN GONZÁLEZ: And could you tell us about the overall role of the United States forces, CIA and Special Forces in Africa, where he was originally abducted?

CLARA GUTTERIDGE: Right. So, when Suleiman was abducted in 2003, that was in the middle of this—there was this arrangement between the CIA and Somali warlords, who were then in control of most of Somalia, called—euphemistically called the Alliance of Peace and Counter-Terrorism. And what that really was was an arrangement whereby the warlords—you know, there was no—there was no law. These people were just, you know, in de facto control. The warlords would go around and would pick people up and would sell them for, you know, large amounts of money to the CIA. And at that time, people were routinely, you know, rendered off into—rendered into different parts of the world to be held in different U.S. prisons.

Now, you know, like everywhere else, the U.S.—you know, since, say, let’s say 2007, the U.S. has increasingly been seeking to get out of the detention game. It’s no longer running, you know, masses of prisons all around the world where detainees are held. But what’s happening now in East Africa is that the war on terror is very much alive and kicking, although it’s more decentralized and outsourced than it used to be, which means that the role of partner states, of local, regional states, is much more important. They’re receiving, you know, masses of money, masses of aid, to conduct counterterrorism. And what we’re increasingly seeing is that it is these states that are doing the jailing, either on behalf of the United States or perhaps in some kind of, you know, joint detention operation. And for those of us kind of working on rule of law issues and trying to ensure that these prisoners get—you know, get the rights that they deserve, it is even more difficult than working with prisons that are, you know, on the face of it, obviously run by the United States.

JUAN GONZÁLEZ: Well, I want to ask you about those U.S. operations, for instance, in Somalia. Last year, Jeremy Scahill of The Nation and Democracy Now! traveled to Mogadishu and revealed the existence of a secret CIA facility in that city.

JEREMY SCAHILL: When we arrived in Mogadishu, within days, we discovered that the CIA had just finished construction of a pretty massive compound at the Aden Adde International Airport in Mogadishu. And the compound, which is not even hidden in plain sight—it’s just in plain sight—looks like a gated community. It has about a dozen buildings inside of it, brand new. It’s a walled compound with guard posts at all of its—at each of its four corners. It’s right on the banks of the Indian Ocean. And then next to it there are six or eight small hangars. And the CIA also has its own aircraft there.

JUAN GONZÁLEZ: Yes, your response to this Jeremy Scahill report?

CLARA GUTTERIDGE: Right. I mean, you know, it is common knowledge amongst, you know, not only Somalis in Mogadishu but really most people that go through Mogadishu, you know, that this prison exists and that there is, you know, clearly, a kind of a multilateral detention operation going on in Somalia that involves, you know, secret detention of prisoners. You know, the only person [inaudible] who said to the BBC Somali Service that he didn’t know anything about it.

JUAN GONZÁLEZ: OK, and finally, Suleiman Abdallah, his situation now? He’s gotten no compensation for his years of unjust jailing or extralegal jailing?

CLARA GUTTERIDGE: Right. So, you know, Suleiman Abdallah is right now, you know, struggling against significant odds to rebuild his life after what he’s been through. U.S. torture is very, very effective at totally unraveling people, you know, but there is—there are no resources put into, you know, helping people once they’ve been released, if they’re found innocent, to put themselves back together, to rebuild their lives. And so, Suleiman is—you know, he’s doing extremely well, but, you know, it’s very, very difficult for him.

JUAN GONZÁLEZ: Well, Clara Gutteridge, I want to thank you for joining us. She’s a human rights investigator. Her recent piece for The Nation is called "How the US Rendered, Tortured and Discarded One Innocent Man." We’ll be back in a minute.

             7/7 Bombings
Now lets see what has to say about the 7/7 bombings on this, the anniversary.

Edited by Dick - 09 July 2012 at 7:06am
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Monday, July 30, 2012

Pulitzer-Winning Reporting Duo Don Barlett and James Steele on "The Betrayal of the American Dream"

The famed award-winning investigative reporting team of Donald Barlett and James Steele have just published a new book, "The Betrayal of the American Dream," a followup to their landmark bestseller, "America: What Went Wrong?" As Republicans and Democrats continue disputing who should bear the brunt of the tax burden, Barlett and Steele argue that America’s middle class has been decimated over the years due to policies governing not only taxes but also bank regulations, trade deficits and pension funds. Their book chronicles how the American middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite. Barlett and Steele have worked together for more than 40 years, sharing two Pulitzer Prizes and two National Magazine Awards. The duo join us for the hour to discuss the assault on the middle class, the great tax heist, deregulation, the outsourcing of U.S. jobs by companies like Boeing and Apple, and the end of retirement. "People are going to have to work forever, and yet what are those jobs going to be? What are they going to pay? And it also puts pressure then on people coming into the workforce. How are they going to get a job if people are having to work between 65 and 75 years old?," Steele says. The duo also discuss their past reporting on the 2002 Olympics in Salt Lake City, headed by the Republican presidential candidate, Mitt Romney, and note he headed "an Olympic committee where that entire operation raided the federal Treasury like no other Olympics in history." [includes rush transcript]

Filed under Financial Meltdown, Author Interviews, Election 2012, U.S. Economy, Taxes, James Steele, Donald Barlett


James Steele, contributing editor at Vanity Fair. Steele and his reporting partner Donald Barlett have won virtually every major national journalism award, including two Pulitzer Prizes and two National Magazine Awards. Their latest book is The Betrayal of the American Dream.

Donald Barlett, contributing editor at Vanity Fair. Barlett and his reporting partner James Steele have won virtually every major national journalism award, including two Pulitzer Prizes and two National Magazine Awards. Their latest book is The Betrayal of the American Dream.

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"The Betrayal of the American Dream." By Donald Barlett and James Steele. (Public Affairs, 2012)
Donald Barlett and James Steele’s Official Website
Read Donald Barlett and James Steele’s latest articles for Vanity Fair
“America: What Went Wrong?” By Donald Barlett and James Steele. (Andrews McMeel Publishing, 1992)
See additional Democracy Now! interviews with Barlett & Steele

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Rush Transcript

This transcript is available free of charge. However, donations help us provide closed captioning for the deaf and hard of hearing on our TV broadcast. Thank you for your generous contribution.Donate >


AMY GOODMAN: Democrats and Republican lawmakers are in a deadlock over whether to extend the politically decisive Bush-era tax cuts. The Republican-controlled House of Representatives is planning to vote this week to extend all the cuts, but Obama says those Americans making above $250,000 a year should return to the tax levels they paid before Bush took office. Pointing to the Senate’s passage of the White House-backed proposal, Obama called on House Republicans to support the bill in his weekly address on Saturday.

PRESIDENT BARACK OBAMA: This week, the Senate passed a plan that I proposed a few weeks ago to protect middle-class Americans and virtually every small business owner from getting hit with a big tax hike next year—a tax hike of $2,200 for the typical family. Now it comes down to this. If 218 members of the House vote the right way, 98 percent of American families and 97 percent of small business owners will have the certainty of knowing that their income taxes will not go up next year. That certainly means something to a middle-class family who has already stretched the budget as far as it can go.

AMY GOODMAN: In an interview on Fox News, Republican House Speaker John Boehner countered that Obama’s tax plan would destroy hundreds of thousands of jobs.

SPEAKER JOHN BOEHNER: President’s plan would cost about 700,000 new jobs that wouldn’t be created or could be lost by taxing small businesses. The House will not do that. The House will extend all of the existing tax rates. We’ve got 8 percent unemployment; we’ve got 41 months of it. This is not to be time—the time to be raising taxes on American small businesses.

AMY GOODMAN: As Republicans and Democrats continue disputing who should bare the brunt of the tax burden, our next guests argue America’s middle class has been decimated over the years due to policies governing not only taxes but also bank regulations, trade deficits and pension funds. Their new book chronicles how the American middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite.

We’re joined now for the hour by Don Barlett and James Steele, the award-winning investigative reporters. They have worked together for over 40 years, first at the Philadelphia Inquirer, then at Time magazine, most recently at Vanity Fair. They’ve also written seven books. Their first book, America: What Went Wrong?, was a New York Times bestseller. They share two Pulitzer Prizes, two National Magazine Awards. Their new book is called The Betrayal of the American Dream.

Jim Steele, Don Barlett, we welcome you both to Democracy Now! Start off by laying out your thesis, Don. Start off by talking about the betrayal of the American dream.

DONALD BARLETT: It really goes back to when we did America: What Went Wrong?, which was in '91. And at that time, people were upset around the country. They knew something was happening, but they didn't know what. And what made that book so successful was that we pulled everything together in terms of pensions and pay and union membership—and just everything economics. And you could see that there was a systematic attack going on on the middle class.

At that time, it was still kind of—you know, could have gone either way if there had been a political response, which there should have been, but there wasn’t. And as a result, when—we received just literally hundreds and hundreds and hundreds of letters of emails over the last several years saying, "Would you go back and look at this in terms of what you wrote the first time?" And if we made one mistake the first time, it was we grossly underestimated how fast this country was going to go down the tubes. And we really did.

Back then, there were still defined benefit pensions, and people still had a hope of getting them. They’re gone. There was one wage structure. Now there are two-tiered wage systems all over the country. The one wage is gone. Income has been flat, for the most part, since then. You go down the list, and everything has gotten incredibly worse than it was then.

And one of the arguments that was raised by critics back then was because this—that series ran right at the tail end of one of the recessions, and people said, "Well, what’s happening now is really related to the recession, and once we’re out of the recession, everything will be fine." And we made the point this was not true, that what was happening was totally unrelated to the recession. It was the result of structural defects in the American economy, and it was going to continue unless they were dealt with. Well, they weren’t dealt with, and now everything is—you couldn’t even go back now to the 2000 level and give people what they had then. It would be impossible, given the attitudes in Congress, the hardening lines in Washington.

AMY GOODMAN: I wanted to talk about specifics and also go general. Jim Steele, the story of corporations tell a very major story about the United States, corporations like Apple and Boeing. Apple doesn’t manufacture one product in the United States?

JAMES STEELE: That’s correct. That’s correct. I think some of the parts—some of the parts are made here, but basically the essential products aren’t. And we made the point in the book—we actually wrote about this before a lot of the news surfaced this year—that what was significant about what Apple has done is not just their working conditions in China, which were horrendous by the subcontractors over there, but what they did, they completely closed down manufacturing in this country after really less than a generation. The historic pattern in this country was a product would be invented here, a company would go into business, they would start making it. Up and down the line, you had a broad-based workforce for that product, from folks on the factory floor to the designers, to the salesmen, so on, to the stockholders who might be part of that company. But ultimately, you had this broad-based situation. Apple originally had some manufacturing in this country but very quickly, in less than a generation, just closed that down and shipped most things to China and other countries. And it’s just part of that pattern where jobs that once middle-class people had in this country are now gone.

You see a similar kind of thing now going on with Boeing. Boeing has outsourced all kinds of parts of the new Dreamliner, its great new aircraft, which of course has recently run into some problems with parts of their engines falling off, apparently. But Boeing, as part of getting into the Chinese market, which everybody agrees will be a huge market, has manufactured all sorts of things over there. Basically, what Boeing is doing, which a lot of companies are doing, they are basically showing the Chinese how to make airplanes. And what have the Chinese done? They’re creating their own civilian aircraft industry, where we were told, I think, in this country the idea was have some presence there so we can sell them airplanes. But where is that going to lead down the line if we are turning over to them some of the technology that will let them build airplanes that are our principal export in this country?

AMY GOODMAN: And how much of that information, that knowledge, is taxpayer-financed?

JAMES STEELE: Boeing has of course been a major defense contractor over time, and many of those contracts have led to all sorts of technology that have worked their way into both civilian and military planes. Taxpayers have supported that. So now you have a situation where some of the technology that taxpayers have paid for—through Boeing and of course other contractors, as well, not just them—is now going to be handed over to the Chinese to build airplanes to compete against us. And civil aircraft is the only significant export this country has.

AMY GOODMAN: And the number of jobs Boeing has moved to China?

JAMES STEELE: The number of jobs is, I think, 20,000 to 30,000 by Boeing’s own statement. I should correct one thing: we have other exports, but in civilian aircraft is the only thing where we have a surplus of exports. We export a lot of things, but—and most of those products, like auto parts and things of that sort, the imports vastly overwhelm our exports.

AMY GOODMAN: Back on Apple, earlier this year Democracy Now! spoke to Charles Duhigg, a staff reporter for the New York Times. I asked him about President Obama’s meeting with the late Steve Jobs of Apple in February of 2011 to see what it would take to make iPhones in the United States. This is what Charles Duhigg said.

CHARLES DUHIGG: One of the things that President Obama asked was, is it ever possible to bring back those jobs to the United States, to make iPhones in the U.S.? And what Steve Jobs said was—I think accurately—those jobs are never coming back. And the reason why isn’t just because workers are cheaper in China, although that—they are cheaper in China; it’s because China has established a huge competitive advantage over the U.S. There are supply chains that exist in China and Asia now which the U.S. simply can’t replicate.

AMY GOODMAN: I also asked the New York Times reporter, Charles Duhigg, about the human costs of Apple products for workers in China.

CHARLES DUHIGG: What Apple says—and you have to take Apple at their word, because this is a major corporation, they usually don’t lie about stuff like this—is that they say every single time they find a violation inside a supplier, that they mandate that a change is made and a management system is put in place in order to prevent that from occurring again. The difficulty is, when you look at the aggregate statistics that Apple publishes every year, we see the same violations occurring again and again and again.

AMY GOODMAN: New York Times reporter Charles Duhigg about the human costs of Apple products. James Steele?

JAMES STEELE: I think he’s right that these Apple products are not going to be coming back here. But the issue isn’t that they’d be coming back here; the issue is what happened that let them go over there, to begin with. And I think the point could easily have been made, Apple could still certainly have kept some manufacturing in this country—doesn’t mean you couldn’t also have some manufacturing elsewhere. Nobody has said that. But the point is, they made a conscious decision to go over there.

And the reason a lot of companies do that, it’s not just the cheap labor. The Chinese have a system in place that subsidizes companies—land, low-interest loans, a whole range of things—the kinds of things that a company in this country cannot compete with. So it goes way beyond the labor. We talk about free trade in this country, but other countries don’t really practice free trade. And China is a perfect example of that. I mean, how is a company over here expected to compete with a company that has that kind of support, that can then bring its product back here duty-free? I mean, it’s almost impossible. And this is true of dozens of products, not just computers and iPhones.

AMY GOODMAN: Why couldn’t Apple build factories here now?

JAMES STEELE: Well, I mean, they could if they wanted to, but I’m just saying it’s just not going to happen, because they don’t want to. And the problem was—

AMY GOODMAN: But consumers can also make a statement.

JAMES STEELE: Absolutely.

AMY GOODMAN: And make demands.

JAMES STEELE: And make demands, exactly. And maybe enough heat will be exerted on them. And we got so much mail after our piece on Apple last year. People who thought Apple products were more expensive because they were built in this country, that was one of the most common themes we heard from people. And people were astonished to find out, no, they’re not. And yet they still cost you more than things that might be made here.

AMY GOODMAN: Don Barlett?

DONALD BARLETT: Well, the only thing to add to that is if—you need to put controls on corporations. Somewhere along the line, we’ve reached this point where there can be no—you know, no tariffs, no—nothing on corporations. They are free to do whatever they want. And look no further than fracking everywhere, but especially in Pennsylvania, where we’re both from. I mean, you grew up in Pennsylvania, you remember what it was like—well, I do. I’m a lot older than Jim. You went out of the house in the morning, it was covered with orange dust from the blast furnaces. That was a way of life. Was that healthy? No. Should it have been allowed? No. But now, that kind of behavior is tolerated—not only tolerated, encouraged, because nothing is done to prevent it.

I mean, there’s—you have all of this talk on the far right about the regulations that are, you know, stifling creativity and all this. That’s utter and complete nonsense. When it’s put in historical terms, it is just mind-numbing that we’ve allowed this, because—Jim made the distinction: we’re talking about civilian aircraft now. The Chinese have just been given the keys to the U.S. attack helicopter. What does this say? I mean, back—as an old Cold Warrior, in which I spent a few years in counterintelligence, security clearances would have been killed then automatically for the corporation. And this is just mind-numbing that nobody says anything in Washington. They like to pretend they’re in charge of something. They’re not. They are just there to do whatever the corporations want them to do.

AMY GOODMAN: Interesting, on that—

DONALD BARLETT: And let me qualify this. This is—and this is my mistake more often, when I say "corporations." We need to distinguish between global corporations and domestic corporations, which truly are being screwed in Washington. The domestic companies, who—the ones that employ the people in this country, have really taken it in the ear, and only because Washington is—gives a free pass to the international, the global corporations.

AMY GOODMAN: And, Jim Steele, the statement on Apple products, "designed by Apple in California"?

JAMES STEELE: Right, but manufactured elsewhere. And in the past—I mean, this is the point I was trying to make earlier. In the past, you had a whole chain of people: you had the inventors, you had the designers, you had the people who manufactured, you had the people who sold it, and then, of course, at the end of that you had the consumers that bought that product. And this doesn’t mean that you can’t have factories elsewhere, but the idea that we do not have the capability of building these products in this country, that we do not have all the engineers to do that, I mean, we just totally reject that. I mean, too many people have told us—too many people in manufacturing in this country are very—who are very upset by this whole trend, because they say separating the design from the actual manufacturing floor is a huge mistake. That’s the way so many great things were done in the past.

DONALD BARLETT: That’s where you got your new products from. That’s where you got your innovations from. And if you’re not making it on the floor, doesn’t come.

AMY GOODMAN: We’re going to come back to this discussion. Don Barlett and Jim Steele are our guests, the authors of The Betrayal of the American Dream, the Pulitzer Prize-winning dynamic duo.

And just before break, a clarification for an earlier headline: police in Burlington, Vermont, are being accused of firing rubber bullets at activists protesting a meeting of New England governors and eastern Canadian premiers. Police said pellets were fired but have denied firing rubber bullets. This is Democracy Now! We’ll be back with Jim Steele and Don Barlett in a minute.


AMY GOODMAN: We are joined by Don Barlett and Jim Steele. They are the authors of the new book, The Betrayal of the American Dream. I want to go to the issue of the Olympics since they’re happening in London right now. In 2001, you wrote a story called "Snow Job" about the 2002 Olympics in Salt Lake City, headed by none other than the Republican presidential candidate, Mitt Romney. In your investigation, "Snow Job," about these Olympics, which you published in Sports Illustrated, you reported, quote, "The $1.5 billion in taxpayer [dollars] that Congress is pouring into Utah is 1.5 times the amount spent by lawmakers to support all seven Olympic Games held in the U.S. since 1904—combined." Jim Steele?

JAMES STEELE: Well, it’s an interesting position for somebody who’s against new taxes and wants to cut the deficit, that here you had somebody heading an Olympic committee where that entire operation raided the federal Treasury like no other Olympics in history. And they got everything: Salt Lake—infrastructure around Salt Lake, sewer lines, land exchanges that transformed the average snow resort, ski resorts into world-class resorts. All of these things happened one way or another under Romney’s watch. And that’s what astonished us about this comment he made where he was dissing the London Olympics, I mean, because—that they’re not operating right, they’re not doing this right. I mean, the whole—I think he’s so vulnerable on that issue, and everybody who had anything to do with the Salt Lake Olympics is very vulnerable on that. The thing that struck us so much—and here was Utah, a state famously with a great antipathy to paying any kind of taxes, but they had absolutely no qualms whatsoever about raiding the federal Treasury to take care of all of their needs for really the next generation. So, the fact that he would make this point in London just, frankly, astonished us.

DONALD BARLETT: Jim’s right. I mean, Utah got out of this anything they wanted. The states—other states would have had to have paid for on their own, Utah got from the federal government. And so, it’s—the other thing is this hypocrisy of people like Romney who want everyone in the middle and the bottom to pay their own way, but they themselves have no trouble grabbing as much money as they can get out of Washington. And they do it all the time. And it’s just—it’s just astonishing. But people generally don’t know it. The news media does not do what it should do on this area—never has. And so, there—part of the problem here is because most people today get their news from TV, and it’s not public TV, as you well know, it’s commercial TV. And commercial TV is not about to do this kind of work. It just isn’t.

AMY GOODMAN: It’s interesting, with NBC covering the Olympics around the clock, we’re not seeing any of the protests that are taking place and the increasing anger of the small businessmen in East London who are getting wiped out, the whole issue of not criticizing the corporate sponsors, the corporate sponsors—

DONALD BARLETT: Right, right.

AMY GOODMAN: —getting huge numbers of seats, yet they don’t fill them. These arenas are now empty, and so the British government is trying to get soldiers in there, their families, school kids—someone.


AMY GOODMAN: But it shows that these seats—and these arenas, these stadiums were sold out years in advance, and now no one’s there, because the corporations aren’t people.

JAMES STEELE: Yeah, the Olympics, like so many—

DONALD BARLETT: Oh, well, yeah. Yeah, wait a minute.

JAMES STEELE: Like so many of these other issues. I mean, like Don said, I mean, Romney and so many of the policies that he advocates will benefit very few. I mean, his tax structure, the tax structure of the wealthy in this country—the tax structure of the whole country is now geared just solely to benefiting the wealthy. I mean, some of the statistics are amazing. I mean, the wealth of the top 1 percent in this country is greater than the wealth of the bottom 90 percent. That is a staggering figure.

And one of the things that has made that possible has been a whole series of tax changes over a long period of time, mainly in the last 10 years. I mean, one of the things they’ve done in the last 10 years that we just cannot get over was in 2003 when they made dividend income taxable at 15 percent. This was the first time ever that dividend income was treated differently than somebody earning a wage or salary. And the idea that that somehow should be more favored than somebody working in the sweat of their brow is absolutely ridiculous and appalling.

DONALD BARLETT: There’s going to be, you know, in the coming weeks—you know better than anyone—just a constant, you know—I don’t know what you call it. But out of Washington on taxes and how we’re penalizing entrepreneurs and all of that garbage—and I say "garbage" for this reason: if people focus on two numbers—that’s all you need to do—in 1955, the top 400 households in this country, they paid 51.2 percent of their income in taxes. That’s 1955. In 2007, they paid 16.6. And everybody’s talking about a deficit. Of course there’s a deficit, and there’s going to always be a deficit until they impose the tax system that had existed in this country in the ’40s, the ’50s, the ’60s and the ’70s, in which people at the top who had money paid serious taxes. No one—but no one at the top pays serious taxes today remotely close to what their, you know, peers would have paid back in the ’60s and ’70s.

AMY GOODMAN: Journalist Nick Shaxson of your magazine, of Vanity Fair_, wrote about Mitt Romney’s fortune, called "Where the Money Lives." We spoke to returns">Nick Shaxson about how someone as wealthy as Romney has an average personal tax rate, as you were saying, of less than 15 percent.

NICHOLAS SHAXSON: This is about the U.S. tax code. This is the way that privileged people like Mitt Romney and other—and hedge fund managers and private equity titans receive their income. They receive it as a thing called carried interest, where—which many people would argue is just like ordinary income. It’s just like a salary earned by anybody else and should earn, you know, the top tax rate, but instead, for historical reasons and reasons of lobbying, it is taxed at a very low rate of 15 percent. Mitt Romney’s tax rate is a little bit lower than that. He has—for various other reasons, he has deductions and earns other kinds of income, as well. But it’s not too far off 15 percent. But carried interest is—the tax treatment of carried interest is the sort of central reason why his tax rate is so much lower than many Americans.

AMY GOODMAN: I want to go to his role—oh, go ahead, Don.

DONALD BARLETT: Well, just, we need to point out, you know, all these pleas for him to release the rest of his tax returns, which every candidate has always done. And he’s, "That’s it. You’re not getting any more from me." And people wondering—

AMY GOODMAN: And his father, George Romney, set the precedent by doing it for 12 years when he ran for president.

DONALD BARLETT: Yeah, yeah, 12 years, exactly. Well, his father was kind of a straight arrow compared to Mitt. I mean, but we wondered, in the back of our minds—there may not be anything in those returns, but he may be amending them furiously. And this is what candidates do once they reach a point where, "Oh, my god, this is going to become public. We’ve got to go back and clean up the returns."

AMY GOODMAN: How do you clean it up?

DONALD BARLETT: Well, you file an amended return. And that’s not uncommon. "Aw, gee, we had a mistake here. We need to correct that."

AMY GOODMAN: And so it completely replaces the one that was there.

DONALD BARLETT: Exactly, exactly. And in our minds, we think, you know, that’s the more likely thing that’s going on here. It’s not that they’re afraid of something in those returns; it’s that they are being sanitized.

AMY GOODMAN: Earlier this month, Mitt Romney gave a series of television interviews defending his role at Bain Capital. This is Romney speaking to CNN’s Jim Acosta.

MITT ROMNEY: There’s nothing wrong with being associated with Bain Capital, of course, but the truth is that I left any role at Bain Capital in February of '99. And that's known and said by the people at the firm. It’s said by the documents, offering documents that the firm made subsequently about people investing in the firm. And I think anybody who knows that I was out full-time running the Olympics would understand that’s where I was. I spent three years running the Olympic Games. And after that was over, we worked out our retirement program, our departure official program from Bain Capital and handed over the shares I had. But there’s a difference between being a shareholder, an owner, if you will, and being a person who’s running an entity. And I had no role whatsoever in managing Bain Capital after February of 1999.

AMY GOODMAN: That’s Mitt Romney speaking on CNN. James Steele?

JAMES STEELE: I think that that whole story is still probably evolving and developing, exactly where he was at that time. It’s just one of the reasons it would be nice to see the tax returns, to see exactly what some of that material said at the time. But I think the most significant thing about Bain isn’t just that period of time. Bain, like every one of the private hedge funds, the private equity funds, very much involved in basically killing jobs one way or another, and—because when they take over a company, people are jettisoned, let loose, streamed down. Sometimes the work is sent offshore. And that’s just the way they work, and they’ve always worked that way, whether it was when he was there or after. It’s just the common way all those private equity funds function.

And I think that’s why so much of a furor has built up about this, because people know this. I mean, that’s the thing we found out when we went around the country and we talked to people here and there. People know what’s going on in this country. They know a lot of the deck is being stacked against them. They know that they’re almost powerless when one of those companies buys a company. I mean, some very famous companies, like Birds Eye, were bought by another private equity firm, Blackstone—all kinds of people let go, the company is supposedly streamlined. You see that sort of thing across industries—food, computers, technology, so forth. That’s just the way that process works, and that’s just how the deck is so stacked against the average person and in favor of the equity companies.

Nick was talking about the carried interest. We have a whole section in the book about carried interest. And it’s a complex concept that people sometimes have trouble getting their mind around.

AMY GOODMAN: And if you could explain it simply.

JAMES STEELE: But it is just an outrageous thing. The idea is, if you are heading one of those private equity funds, you take a portion of the interest of one of these companies that you are theoretically managing. Part of your salary comes in a—part of your money comes in a salary, a direct salary, which is paid in normal rates. But part of it is supposedly an interest in this company. But you haven’t bought that interest. You’ve just been given it as the manager. And then, when you cash out on that, because it’s supposedly you were an investor, you pay the 15 percent. And that, as much as anything, as Nick was talking about, is why somebody like Romney and other private equity moguls pay 15 percent.

Now, there was a big boomlet to try to get rid of this a few years ago. And there were hearings in the Senate and the House. And a lot of people thought, "Oh, boy, this thing is going to change." But once again, people do not seem to realize how powerful those interests are in Washington. And they trotted out all kinds of people to lobby against it, mainly the private equity funds. I mean, Henry Kravis on down the line, all of those people actually paid visits to Capitol Hill.

AMY GOODMAN: It’s called "vampire capitalism"?

JAMES STEELE: "Vampire capitalism," that’s—excellent word. That’s exactly what it is. And they defeated the effort to try to change that. I mean, this Congress, you couldn’t do it at all, but back then there was a little bit more common sense that some people had. But even then, they couldn’t get that thing changed. And it, as much as anything, illustrates how this system is totally geared against the average person. There is no defensible—no defense for that tax break. And it’s something that was not basically used years ago, but it’s typical how folks in power figure out a way to bring the code to their advantage. And when it happens, Congress should amend it and change it. But because of that interest and that lobbying, that’s frustrated.

AMY GOODMAN: I want to turn to President Obama’s recent attack on Mitt Romney’s record at Bain Capital.

PRESIDENT BARACK OBAMA: I have said, let’s stop giving tax breaks to companies that are shipping jobs overseas, let’s give tax breaks to companies that are investing right here in the United States of America and investing in American workers, so we can make American products stamped with those three proud words: "Made in America." That’s how we build an economy that lasts, and that’s why I’m running for a second term as president. Now, Mr. Romney has got a different idea. You know, he invested in companies that have been called pioneers of outsourcing. I don’t want to pioneer in outsourcing. I want some insourcing. I want to bring companies back.

AMY GOODMAN: That’s President Obama. By the way, he is in New York tonight at the NoMad Hotel at a fundraising dinner, 60 guests spending $40,000 each at a hotel near the Gramercy Park.

JAMES STEELE: We won’t be there.

AMY GOODMAN: But his idea?

JAMES STEELE: Well, his idea, I mean, is a very valid idea, because one of the things that’s been happening with the multinationals is a lot of the money they earn offshore, they keep offshore. The estimates of the amount of money that companies like Apple, the technology companies, the pharmaceutical companies, some of the big manufacturing companies—their estimates are $2 trillion is sitting in foreign accounts that they will not bring back to this country. And the reason they will not bring it back, they say, is because of this onerous U.S. tax rate.

But the fact of the matter is, once, a few years ago, Congress waived that and let a number of them bring money back—and my memory is they brought back $3.3 billion in some of the assets that were there—with the understanding that they would create jobs here. But you know what they did? Those same—the leading companies that brought their money back actually killed 20-some thousand jobs, did not create jobs. I mean, it just gets back to what Don was saying earlier in terms of the power of these multinational corporations. They’re beyond our control theoretically. And even when they get a right like that, it’s not enforced. And as a result of that, no jobs are created.

AMY GOODMAN: I want to talk about breaking up the mega banks with you, pensions, what’s happening to them, retirement and more. Don Barlett and Jim Steele, authors of the new book, The Betrayal of the American Dream. Twenty years ago, they wrote America: What Went Wrong? While they were accused of exaggerating, they now say they didn’t go far enough. Stay with us.


AMY GOODMAN: Our guests for the hour are Don Barlett and Jim Steele. They are the Pulitzer Prize-winning dynamic writing duo, who are writing most recently for Vanity Fair. Their latest book, out tomorrow, The Betrayal of the American Dream.

The former CEO of the banking giant Citigroup is drawing headlines for publicly calling for the breaking up of the nation’s largest banks and for restoring the separation of commercial and investment banking. Sandy Weill made the comments last week in an interview on CNBC.

SANFORD WEILL: What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, and have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.

BECKY QUICK: That’s a pretty radical idea, though, the idea of breaking up the investment banks and the banks. Are you suggesting going back and really breaking these companies up?

SANFORD WEILL: That’s exactly what I’m suggesting. I want to see the United States be the leader. I mean, and I really believe in our country. And we’re not going to be a leader if we keep on trashing our institutions.

AMY GOODMAN: Former head of Citigroup, Sandy Weill, very significant, because he was a major lobbying force—


AMY GOODMAN: —to end Glass-Steagall. Of course, President Clinton signed off on it. And now this is what he’s saying. Don Barlett, Jim Steele?

DONALD BARLETT: Well, we’ll both take a shot at this. But there was a reason that this law went into—Glass-Steagall went into place after the Great Depression. There was no reason whatsoever to change it. And everybody who recommended that was flat wrong. Now, I don’t know where Weill is coming from now—has some terminal disease and he wants to clear his conscience or what. It never should have been repealed. That served to benefit only one tiny slice of the population: the people at the top. And it did enormous harm to broad middle-class America. It’s one reason, in part, why people lost their homes.

JAMES STEELE: I mean, one of the things that happened after the removal of that firewall is it then became—the whole mortgage industry—

AMY GOODMAN: The commercial banks and the investment banks.

JAMES STEELE: Commercial banks and investment banks—the whole mortgage industry was transformed by this. If you go back a few years and you were buying a house or a co-op or a condo or whatever it was, you almost had to mortgage your first-born child in order to get a mortgage. I mean, you had to go through a very dramatic process. But because selling the mortgages, the fees and so forth, was more important than whether—the person’s ability to pay and so forth, led to all kinds of abuses. It wasn’t just they put people in houses who shouldn’t have been there. They actually tricked an awful lot of people who had been in their house but who had been misled about the provisions of those instruments, because the fees up front were so important and so significant.

So, if he’s now—if Weill is now finally getting religion, that’s wonderful. It’s hard to imagine what has provoked this. But the fact is, he’s absolutely right, and it never should have happened. The fact that—I think Clinton signed it because it was part of the whole deregulatory mindset that has gripped this country for really the last two or three decades. Before that, it was true in airlines, it was true in the trucking industry—two industries where the wages have been driven down, the earnings driven down tremendously for the people who are in those fields. And the profits of many of the companies in those fields have not been borne out. Both those industries have just been in total chaos for 20 to 30 years. And they extended that. Even with that record in 1999, they further repealed Glass-Steagall, which then further added to that chaos in financial services.

DONALD BARLETT: The other thing that runs along with this is that the jobs—everybody talks about creating jobs. Nobody looks at the kind of jobs that are being created. They at the bottom end of the wage scale, which also, you know, fuels this ripple effect, really, on tax revenue and Social Security revenue, because under the old system in which people had jobs that paid solid middle-class wages, now you’ve got jobs in which people pay little or no taxes because they don’t make enough money to pay the taxes. And that, in turn, impacts the deficit. And so, people who are talking about, "Well, we’re going to—we’ve got to fix this deficit overnight," are just people who want to take care of the tiny 1 percent at the top. There is no other reason to do that.

AMY GOODMAN: You write, "Deregulation is one of the greatest triumphs of America’s ruling class, but [for] middle-class workers and their families the fallout has been devastating." What about retirement and pensions?

JAMES STEELE: One of the most astonishing statistics that we think we have in the book, because we were not aware of this statistic: since 1985, almost 85,000 pension plans have been killed. In the '50s, the ’60s, the ’70s, even into the early ’80s, more and more people were eligible for pensions, defined benefit plans where you got a specific benefit when you did retire. But since the mid-'80s, corporations, with the great assistance of Congress, have been shifting people out of pensions into 401(k) plans. Now, there’s nothing wrong with 401(k) plans, but originally they were viewed just as a supplement to a pension. They were not viewed as a pension. But corporations saw this would be a lot cheaper for them. It would shift the responsibility totally to the employees and the workers. But it would also not contribute enough to really take care of their retirement needs.

So, what’s happened in—this is one of the greatest title shifts in the country, because we were going in a certain direction for decades, middle-class people—I mean, not everybody had a pension. We know that. But more and more did over time. But since the '80s, this has now been totally reversed. And it raises all kinds of questions about what retirement is going to be like for people. The main question is, people are going to have to work forever, and yet what are those jobs going to be? What are they going to pay? And it also puts pressure then on people coming into the workforce. How are they going to get a job if people are having to work between 65 and 75 years old? That's going to put even more pressure on the jobs that are left.

DONALD BARLETT: And the other irony of this is—this is almost another Sandy Weill incident. You have the current head of AIG, who was not there during the collapse. He had nothing to do with it. He worked for another global insurance company. He was brought in after AIG collapsed, and the taxpayers bailed them out, and they still haven’t paid everything back yet. He was quoted as saying earlier this year that people are just going to have to get used to the idea of working until they are 70 or 80. Now, he made that pronouncement from his villa in Dubrovnik in Croatia.

You’re going to work 'til you're 80? We have a friend down who, you know, is a job recruiter, basically. And she said, "Look," she said, "if you’re over 50 now, you’re going to have trouble getting a job." She said, "I hate to say it, but I tell people, 'You can't look your age anymore. You really can’t.’" And she’s talking about somebody in their fifties and maybe 60. Eighty? You’ve got to be kidding me. I mean, we have Betty.

JAMES STEELE: Yeah, there’s a woman in the book—

DONALD BARLETT: A woman in the book.

JAMES STEELE: —who is solely dependent on Social Security, as millions of Americans are, who had to continue to work well beyond 65. She actually for a long time delivered meals, Meals on Wheels, to people in some cases younger than herself. She worked for a tax preparation company for another 20 years until she was laid off in her late eighties. Still looking for work at this point. That’s very true of many people. So, even if you get a job, though, you’re going to be putting pressure on the other end of the workforce.

AMY GOODMAN: Very quickly—

DONALD BARLETT: And the one job I was counting on was being a greeter at Walmart. Now Wal-Mart has killed their greeter program. I mean, so, what are you going to do?

AMY GOODMAN: Veterans, what they used to face, what they face today?

JAMES STEELE: One of the places we visited was a veterans center outside of Fort Myers, Florida. And this is what brought the mortgage crisis home to really us. It isn’t the story of people who just are buying a house who maybe should not own a house. Many of the veterans in that center had owned houses for many years. But some of them had been tricked by the circumstances of their mortgage. Some had lost their home. Some were on the verge of losing their home. These are after people—some of these people, their service went back, a couple of them to World War II, many to the Korean War, Vietnam, and so forth. Beyond that, the young veterans coming into this center, some of whom have done all the right things—they had served multiple tours of duty. One, in particular, had gone back to college, gotten his degree, but then began to look at what was available out there and was thinking about re-enlisting, then in his mid-thirties, because he saw no real job opportunities.

This is one of the underlying things of the book. We make the point, yeah, manufacturing got hammered and continues to be get hammered over time, but our jobs are supposed to be these knowledge-based jobs, the smart jobs, the service jobs. These are now—the whole process that began eliminating the blue-collar jobs has now moved into the white-collar field, with a real vengeance. Even the Labor Department is finally sensing this. And they had a study a couple years ago. It said 160 service occupations, 25 percent of the entire service workforce, is susceptible to offshore.

AMY GOODMAN: We only have a few minutes. You have a whole chapter, the last chapter, "Restoring the American Dream," which is devoted to solutions. Lay them out.

JAMES STEELE: Well, one of what—the most obvious thing to us and the thing we put first is the tax code. The tax code needs to be amended. The folks who can afford to pay more should. Almost every poll out there shows widespread American support for this. I mean, this is what’s so bizarre about Boehner’s comment about raising taxes on people who make money. It’s just totally ridiculous. People can afford—in fact, many rich people say that and have come forth to say that, so—and putting in multiple brackets. And brackets mean the more you pay—the more you earn, the more you pay. That’s the way things used to be, and the country thrived under that system, and it didn’t penalize anybody and didn’t create class warfare, had actually created a very broad-based society.

Trade policy is another that needs to be amended. Don’t just have our door open, let everybody send their stuff in, unless they’re going to do the same with us, which has never happened. We’ve never had the guts to enforce the proper trade policy.

A significant thing we also talk about is, we really need to invest in the country, because corporations aren’t. So many of them are going abroad. A true broad-based investment infrastructure and many other things. The largest peacetime infrastructure investment program in this country was under Dwight Eisenhower in the '50s: the interstate highway program. And that was with broad, bipartisan support. I mean, that's what we need to get back to in this country. Obama’s rather anemic stimulus program was roundly condemned by conservatives, when in fact it’s things like that that are part of the solution to the problem.

AMY GOODMAN: We’re going to end the conversation here. We’re going to continue it offline, post it at Don Barlett, James Steele, the Pulitzer Prize-winning dynamic reporting duo. Their latest book is called The Betrayal of the American Dream. They are authors, 20 years ago, of the number one bestseller, America: What Went Wrong?


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