World after 9-11 - New Yorker

The World After 9/11
Amy Davidson talks to Seymour M. Hersh, Jon Lee Anderson, and George Packer about Iraq, Afghanistan, the war on terror, and whether America is stronger now.
Issue of 2006-09-11
Posted 2006-09-04

Amy Davidson talks to Seymour M. Hersh, Jon Lee Anderson, and George Packer about Iraq, Afghanistan, the war on terror, and whether America is stronger now.

AMY DAVIDSON: Sy, in your first article after 9/11—just a few weeks after—you quoted a senior C.I.A. official who, you wrote, “confirmed that the intelligence community had not yet developed a significant amount of solid information about the terrorists’ organization, financing, and planning.” He said, “One day, we’ll know, but at the moment we don’t know.” Has that day arrived?

SEYMOUR M. HERSH: No, not in my view. He also said at the time that there was a debate about whether the attacks were a long-planned, deep-cell operation, and we were going to be looking at cell operations like this throughout the country—major embedded groups of Al Qaeda, what you will. The other possibility was that the nineteen hijackers were the equivalent of a pickup basketball team that made it to the Final Four. His guess was the latter. I think that’s true. I think the nineteen guys, however skilled, were more lucky than anything else, because of our lack of preparation. But we really know very little about how that operation worked, even now.

DAVIDSON: Why is that?

HERSH: Because the nineteen guys are dead. Despite all the arrests we’ve made—of Khalid Sheikh Mohammed and others—I’m very skeptical of the information we’ve got from interrogations, basically because, once people get into the interrogation process, even today, the torture is such that they invent stories to make us happy. So we’ve got an awful lot of bad information, along with some good. But certainly a lot of bad stuff. So we don’t have a good picture of what happened.

DAVIDSON: Let me ask all three of you: how good was Al Qaeda five years ago? Were the hijackers a pickup basketball team? And how good is Al Qaeda now—has it got better since 9/11, or is it much weaker?

GEORGE PACKER: I think that it’s been franchised since 9/11, and now we’ve got small groups in many parts of the world claiming varying degrees of association with Al Qaeda but, essentially, acting operationally on their own—pursuing their own regional and local goals but aligning themselves with the more global ambitions of Al Qaeda. If you consider Al Qaeda just in terms of its main base of operations, which were formerly in Afghanistan, that Al Qaeda, as far as I know, is not achieving very much in the way of operations. But what it’s become is an enormous public-relations boon to any group that wants to wear its colors and go off into its own Final Four tournament, and act essentially on its own. What our colleague Lawrence Wright’s book “The Looming Tower” suggests is that Al Qaeda is mainly the unbelievably ambitious and persistent vision of one man, and he has outlasted all kinds of other people in his willingness to stick with it, certainly through the nineties.

DAVIDSON: Osama bin Laden.

PACKER: Yes.

JON LEE ANDERSON: I agree with what George says and what Sy says. I think that Al Qaeda achieved in the attacks of 9/11 a blow so dramatic that it seemed to the Islamists to strip away the defenses and the perceived invincibility of the world’s greatest superpower, and it became possible, in a psychological and even tactical way, for others to try to emulate it. So whether or not Al Qaeda is operationally as potent as it was around 9/11 doesn’t matter. The mere fact that the United States absorbed that blow, unaware, sent a huge message around the world, and not only to non-state actors, like jihadis who follow Osama bin Laden or Zarqawi or others, but also to regimes that were held in check, prior to 9/11, by the sense of our overwhelming military capabilities. They no longer feel so threatened. And I think the Iraq war has done a lot to enhance that view—in other words, our inability to make headway against insurgents in a place like Iraq has stripped away the aura of American invincibility and might.

DAVIDSON: Let’s talk about Iraq, and let’s start with the question of whether we should be talking about Iraq when we’re looking back at the legacy of 9/11. What does Iraq have to do with 9/11?

PACKER: Iraq has turned out to be an enormous wrong turn in the five years since 9/11. The war was justified by the Administration, at some moments directly, by connections between Saddam and Al Qaeda, which were grossly overstated if not absolutely false, and at times indirectly, by a suggestion that if we eliminated this gross dictatorship in the middle of the Arab world we would begin to drain the swamps that were breeding terrorists. That was a more abstract, theoretical strategy that became the justification when the weapons of mass destruction didn’t show up. So now, even as we speak, the President, the Vice-President, and the Secretary of Defense are all trying to rally the country back to the war in Iraq by associating it with Islamic extremism. At this point, I think that argument has largely run out of juice, because there have been too many deceptions and too many rosy scenarios that failed to materialize in Iraq, and because the connection is simply too tenuous or too cosmic for Americans to accept it. The Administration cried wolf, and I don’t think this time around the electorate is going to buy that success in the war on terror and success in Iraq are one and the same thing.

DAVIDSON: Jon Lee, can you talk about that? You’ve spent a lot of time in Iraq.

ANDERSON: I agree with George’s appraisal of how the war came about, and the deceit that was involved, and the notion that, of course, Iraq and Saddam had nothing, or very little, to do with Al Qaeda—certainly there’s no evidence that Saddam had anything at all to do with 9/11. But build it and they will come. Iraq has become a central theatre in the war on terror because the Administration continues to say it is. And, therefore, having staked America’s reputation, prestige, military prowess, and all of that on the war in Iraq, the Administration—certainly this Administration, and, I suspect, future Administrations—will find it extremely difficult to extricate itself gracefully from Iraq without some electorally acceptable semblance of victory or, at least, a job accomplished. And therein lies the great disaster that is Iraq, because it didn’t have to be a disaster, but it has become so. You now have General George Casey, the top commander in Iraq, saying that American forces hope to be able to withdraw to superbases within a year to eighteen months. Read the subtext here: the country is, by any measure, in a state of civil war, and the conclusion is that the Administration intends to let the civil war fight itself out, probably by ultimately choosing a side and then withdrawing to these bases. By then, there will be a new spin operation, which is already in motion, to explain away the fact that America’s arrival in Iraq opened this Pandora’s box. The onus will be left on the Iraqis. It’s a very messy scenario, but I do think that even if it wasn’t initially part of the larger war on terror it is so now, and will remain so for some time in the future.

DAVIDSON: Sy, what do you think about that?

HERSH: In the fall of 2001, I was learning a lot about a great debate inside the Administration about what to do in Afghanistan. There were a lot of people who argued very bitterly against the air war—I’m talking about people on the inside, tough guys—arguing against what we all assumed to be the one just aspect of this whole post-9/11 process, which was the invasion and bombing of Afghanistan and the Special Forces operation. That was the beginning of the whole torture issue with Guantánamo, and the buying of prisoners. All of that stuff was debated before late October, when the President authorized the bombing. There was a huge debate about even whom to support in Afghanistan—whether or not we should do more real counterinsurgency, and take up the Taliban and consider them more seriously as people you could actually talk to, and the decision was that we ought to go with the warlords. Like a lot of people, I accepted the premise of the Afghan war; I accepted the premise that it wasn’t that irrational, that we had to do something. I didn’t accept it the second time, in Iraq. If the Administration wants a role model for how to respond to grave abuses in terms of international terrorism, look at the Indian government and Mumbai, the train bombing there. The government treated it like a criminal activity. By going to war, instead of criminalizing what Osama bin Laden and his minions did—there’s no question that, in terms of military operations, this is the worst government in the history of America.

DAVIDSON: George, this is something you’ve written about. Do you think that we’ve learned something since 9/11 about the limits of what military action can accomplish?

PACKER: Some of us have, including some people in the government and in the military, but they’re not in the key positions. Sy’s most recent article, on the Lebanon war, suggests that the people who are in the key positions continue to learn the wrong lessons, which is that air power can destroy deeply entrenched groups that are as much political as they are military. Which is very worrying, because it shows that what one hears—that no unwelcome information reaches the President, that it is generally stopped at his door by people from the Vice-President’s office or by his immediate staff—is true. It’s something I hear over and over again. So I don’t think anyone in a position to make decisions has learned. I think what those people have done is protected themselves from learning by counterpunching every time anyone lands a blow and turning what should be very difficult strategic policy questions into, essentially, part of a permanent campaign at home to win a political argument. I think they’ve taken that more seriously, they’ve given it more energy, and they consider it more important, in a way, than they do the actual conflict outside of our borders. But I also want to say, there’s a huge ideological battle that is not of our making, but which is now the world we live in. That’s where I think the real key questions are. I think Sy’s absolutely right that war is far too blunt an instrument, that crime and intelligence work are where we—and the Brits, and other countries—have had our few successes. But, beyond that, there is this ideological problem, which anyone who travels in that part of the world gets a heavy dose of. And we don’t know what to do about it. And that is a failure of leadership.

ANDERSON: I’d like to leap in here and add something that has become dear to my heart in the course of observing on the ground the conflicts engendered since 9/11: first Afghanistan, then Iraq, and, most recently, Lebanon. I’ll begin with an anecdote. Immediately following the ceasefire, after four weeks of bombing, Hezbollah announced that it would pay for the reconstruction of homes for the tens of thousands of people whose homes had been destroyed in the Israeli bombardment—for the homes, a year’s worth of rent, and new furniture—and would itself rebuild, with funds from Iran, no doubt. Hezbollah effectively captured people’s loyalties and took away that role of the state from the Lebanese government, and, for that matter, from the larger actors in the conflict—including America. This was just the latest example; it goes back to Iraq and it goes back to Afghanistan. Following the American police action in Afghanistan, to chase the Taliban into the hills, almost nothing was done to rebuild the country. It took—I forget, exactly—a year and a half or two years before the first efforts were made to pave the Kabul-Kandahar road, which was passable for about a year but no longer is today, because the Taliban have returned and are likely to attack if you are a Westerner. Very little was done in the political arena. This problem of Islamic extremism, which George was referring to and which is very real, is a problem of perception. America is seen to act with all of its might and resources when it comes to military adventurism or military involvement. In Iraq, the amount of money expended there on nothing very visible, for the sake of pursuing the war, is astronomical. But what have we done to rebuild? I believe this sort of military action has to go hand in hand with a radical political decision to actually reform these countries. For Afghanistan, that could have meant a kind of mini-Marshall plan, which could have shown both the Afghans and the Muslim world that we had no vested interest in controlling that country but bore some responsibility for what had happened there. It would have been a very cost-effective investment. Once again, we do not truly compete for hearts and minds, because we’re not willing to pony up to invest, to show that America isn’t only about war, or being crusading Christians, or whatever it is.

DAVIDSON: One thing that we have built since 9/11 is a detention center at Guantánamo, which is as much a legacy of 9/11 as Iraq, and is the sort of blunt instrument that you mentioned, George. What has America gained from Guantánamo, and what has it lost?

HERSH: The evidence is, we’ve gained much less than people think we have, or at least than the Administration tells us, in terms of actionable intelligence. George made a point about how we have to change and deal seriously with people who want to fly airplanes into our buildings, and we really have to improve our ability to learn who they are and how to track them. I do think there’s been maybe the beginning of some idea that simple force doesn’t work. We’ll see. There is some new thinking going on. Even in Iraq, some of the military units seem to be operating more sensibly in terms of dealing with the population, but it’s far too late. The whole world was on our side after 9/11—most of the Muslim world, too, was shocked by the crazy activity—and, essentially, we’ve lost the moral authority, the moral edge we had. It’s the same thing Jon Lee was saying about the inability to really do reconstruction, in as serious a way as we do deconstruction. I grew up thinking that in America we always wore the white hat. It’s no longer so. Although I will still say that the average Muslim, if he got into business and made a pretty good living and got to the middle class, his ambition would be to send his kid to Yale. That still exists. But we’re not capitalizing on it.

DAVIDSON: George, you wrote a little about that this week—the question of moderate Islam.

PACKER: One thing we lose sight of, because we’re focussed, rightly, on the use of American power, is the battle within Muslim countries, which is acute and getting hotter all the time. It’s been going on for half a century now. What we’re experiencing is the sharp end of a battle that has been rising within Muslim countries since independence, and that’s a battle over modernity and what kind of society Muslims want to live in. For the article in this week’s issue, I went looking for some sign of intellectual moderation in places like Sudan and Morocco. I can’t say I was enormously encouraged, but there are things that are going on that we miss with the headlines coming from the Middle East. A Sudanese scholar told me, “I expect nothing good from the Arab world”—by which I think he meant the Middle East—“for a long time.” The place where there’s hope is the periphery, the Muslim periphery, from Senegal to Indonesia, countries that aren’t often in the headlines but where this internal battle to define their own societies is less explosive—and is less caught up with the Israeli-Palestinian conflict, the Iraq war, American military power, and so on. It is being waged in the way it can be when people aren’t being held at gunpoint, which is through ideas, through political parties, and even through democratic politics in some of these countries. So it isn’t entirely about war and destruction; it’s also about ideas and about the direction these societies are going in. What I heard over and over, though, is that the pictures on Al Jazeera coming from the Middle East make it very difficult for reformers in these peripheral Muslim countries to gain an audience, because they’re increasingly seen as being apologists for the West. The more this is defined as Islam versus the West, the worse it is for us and, I would argue, for Muslims themselves. The more it can become a battle of ideas within Muslim countries over modernity rather than the West, then the more hope there is, because I think most people don’t want to live in a totalitarian society in which seventh-century customs are imposed on them by force. I think most people want to live normal, modern lives.

DAVIDSON: I want to go back five years, to the moment right after 9/11 when we talked a lot about justice, about bringing the perpetrators to justice, and to the question of whether there has been justice for 9/11. Sy, you mentioned Khalid Sheikh Mohammed, who is described as the mastermind behind 9/11. He’s actually in U.S. custody. Why hasn’t he been brought to trial?

HERSH: Because the Administration has chosen not to do so. I think that one of the reasons is that at trial he would talk about how he was treated. If somebody would come into a courtroom describing the kind of treatment he’s reportedly had at the hands of the United States, a conviction might be very hard to get. We simply decided very early on that it was acceptable for us to be goons, and we’ve been goons. It still goes on. It is beyond stupidity.

DAVIDSON: We’ve talked about Afghanistan as the first place where we went to “get the bad guys.” Jon Lee, you were in Afghanistan when the bombing began, in October, 2001; you also went back there last year. Did you get a sense, when you were there, that somehow justice had been done, for the victims of 9/11—or, for that matter, for the Afghans?

ANDERSON: There’s no question that the American action—the coalition action—in Afghanistan achieved one thing: removing Al Qaeda from the almost aboveground role it had, pretty much steering the Taliban regime in Afghanistan. This isn’t political rhetoric—it had a preëminent role in the country, it funded the Taliban regime, and it provided an open base of operations for terrorists seeking to do harm to any number of regimes, including the United States. That was achieved, but it was not a total victory. The Taliban fled into the hills; Osama bin Laden escaped. And then, really, I think, the West—the United States and its coalition partners—sat on their hands. The Afghans were putty, so to speak. They had no expectations—other than every expectation of the West. We were the dreamland. We were that shimmering United States of the Kennedy era, still, in their imaginations. We were capable of doing anything for them. They were in our thrall. We could have done so much in Afghanistan to send an important message around the world; we could have done the right thing in that country. But we didn’t. We had our Special Forces guys doing what they needed to do, which was mop up and try to pursue the remnants of Al Qaeda and some of the Taliban. But what did the Afghans see on the ground? There was no effort to engage them truly in the battle of ideas, other than the amiable Western-handpicked figure of Hamid Karzai, who was soon seen as a puppet President; there was no visible or muscular empowerment of his government or, for that matter, of the international aid agencies in transforming a country that had been destroyed through three decades of war.

DAVIDSON: Sy, you’ve written a lot about the intelligence failures that led to 9/11. Again, right after 9/11 there was a lot of talk about how the way that the intelligence community dealt with and found information had to change. Has it changed? If so, is it for the better or for the worse?

HERSH: I actually think things are much worse, in that a lot of very capable people have got disgusted and discouraged and have left, and I think that the new system set up by the 9/11 Commission is going to be a disaster, too. So I’m skeptical. As I said earlier, in the field there are some people trying to be more progressive and use networking and more sophisticated means of going after the real hard-core jihadis’ terrorist cells, and we’ve done well that way, but it was such a blunderbuss approach in the beginning. Look, the bottom line is, you have a White House that, as George said early in this conversation, doesn’t want any information that it doesn’t want. There’s nothing new about it, and nothing has changed. We’re still in, I think, very dire shape.

DAVIDSON: The White House would say we have to give up some expectations about, say, the privacy of telephone calls, to make sure that 9/11 doesn’t happen again.

HERSH: There are ways to deal with that within the confines of the Foreign Intelligence Surveillance Act, and this Administration chose not to do that, for whatever reason—for security, or because it didn’t want people to know what was going on. They’ve demonstrated a contempt for the Constitution. We really have a constitutional crisis. We’ve got a crisis in terms of what’s going on in Iraq: as Jon Lee said, a civil war is going on there; we just don’t want to use those words.

DAVIDSON: Is America stronger now than it was five years ago?

HERSH: Oh, my God—nobody would argue that. Nobody would say that. You’ve just heard thirty minutes of conversation about how we are perceived. We haven’t done the right thing in terms of reconstruction; we haven’t done the right thing in Iraq. There’s no conceivable way we’re in better shape. Why there hasn’t been an attack in the United States—I don’t have an answer for that, but I don’t believe that’s going to be a political vehicle for George W. Bush. We’re not stronger, in any sense, because we’re not nearly as respected, and the invincibility shield is gone.

DAVIDSON: Jon Lee, going back to September 10, 2001—you were about to leave for Sri Lanka. That trip got put off, and you never ended up going. Do you think that there are parts of the world that America has neglected since 9/11?

ANDERSON: Absolutely. Just as it had, in fact, before 9/11. What I was doing then for The New Yorker was going around to parts of the world that I felt had been neglected since the Cold War, and that particularly interested me. In fact, Afghanistan was one of my target countries, but I didn’t get to it until after 9/11. Sri Lanka was a more obscure one—because there wasn’t a direct American angle there. As an American who’s lived much of my life abroad, I have often felt the disjointedness between our perceptions at home and people’s perceptions of us abroad. As an American, the perpetual stranger in the strange land, I’ve often taken it on the nose as the representative of my country. I was very keenly, acutely, and poignantly aware, in the late nineties and very early two-thousands, of a sense of abandonment of past responsibility, of a huge and, in some cases, quite destructive legacy that we had left during our many years of efforts to combat the Soviet expansion in Third World countries. We had left a huge hole; we had ceased to be the good Americans there. People were still waiting for us. The Clinton years have to be looked back on as almost golden years, despite the many mistakes in foreign policy Clinton made. The United States had somehow achieved, once again, this sense of promise in the world. Maybe it was the afterglow of the collapse of the Soviet Union. But it all changed, as Sy and George were pointing out, as a result of the language chosen and the political decisions taken, about how America would respond to the new threat against it. We’ve had many opportunities since then to right the course, to alter those perceptions which have deepened and deepened—perceptions of bitterness and enmity toward America for not shouldering its true responsibilities.

DAVIDSON: But, even if we’re not loved, are we stronger?

ANDERSON: No. No. Because we have lost the respect of our enemies. Why was it that in Iraq there was an interregnum between the time Baghdad fell and the time the so-called insurgents began attacking us? Because they finally saw us on the ground. First, it was an air war, and a sort of blitzkrieg infantry campaign to the capital. Then our troops began fanning out and becoming custodians of law and order. It was then that the defeated enemy—or, rather, an enemy that had vanished or melted away but had not felt itself defeated—waiting and watching in the shadows, decided to strike, decided that we were killable. Why were we killable? Because they were able to observe us at close hand and see that we operated without the logic of a superpower that knew what it wanted to do. We did not have mastery of the terrain, the language, the culture; there was an open debate about what we wanted. We were attackable. And so our enemies lost their respect for all of our billions of dollars’ worth of hardware. And we now have one of the most vicious insurgencies in the world there. A year ago, we were also under the illusion, the rosy illusion, that Afghanistan had largely been resolved, that the Taliban were in the hills, Karzai’s government was getting stronger, we were building a great new American Embassy—but no other building in Kabul—and now the Taliban have come back. They no longer fear us, either. We are not stronger, because our enemies do not believe we are strong, and until the United States understands this and figures out how to reconfigure its position in the world and make people respect it for itself as well as for its military might, properly applied, we are fighting an uphill battle.

wealth inequality

The Wealth Divide
The Growing Gap in the United States
Between the Rich and the Rest

An Interview with Edward Wolff

Edward Wolff is a professor of economics at New York University. He is the author of Top Heavy: The Increasing Inequality of Wealth in America and What Can Be Done About It, as well as many other books and articles on economic and tax policy. He is managing editor of the Review of Income and Wealth.

Multinational Monitor: What is wealth?
Edward Wolff: Wealth is the stuff that people own. The main items are your home, other real estate, any small business you own, liquid assets like savings accounts, CDs and money market funds, bonds, other securities, stocks, and the cash surrender value of any life insurance you have. Those are the total assets someone owns. From that, you subtract debts. The main debt is mortgage debt on your home. Other kinds of debt include consumer loans, auto debt and the like. That difference is referred to as net worth, or just wealth.

MM: Why is it important to think about wealth, as opposed just to income?
Wolff: Wealth provides another dimension of well-being. Two people who have the same income may not be as well off if one person has more wealth. If one person owns his home, for example, and the other person doesn't, then he is better off.

Wealth — strictly financial savings — provides security to individuals in the event of sickness, job loss or marital separation. Assets provide a kind of safety blanket that people can rely on in case their income gets interrupted.

Wealth is also more directly related to political power. People who have large amounts of wealth can make political contributions. In some cases, they can use that money to run for office themselves, like New York City Mayor Michael Bloomberg.

MM: What are the best sources for information on wealth?
Wolff: The best way of measuring wealth is to use household surveys, where interviewers ask households, from a very detailed form, about the assets they own, and the kinds of debts and other liabilities they have run up. Household surveys provide the main source of information on wealth distribution.

Of these household surveys — there are now about five or six surveys that ask wealth questions in the United States — probably the best source is the Federal Reserve Board's Survey of Consumer Finances.

They have a special supplement sample that they rely on to provide information about high income households. Wealth turns out to be highly skewed, so that a very small proportion of families owns a very large share of total wealth. Most surveys miss these families. But the Survey of Consumer Finances uses information provided by the Internal Revenue Service to construct a special supplemental sample on high income households, so they can zero in on the high wealth holders.

MM: How do economists measure levels of equality and inequality?
Wolff: The most common measure used, and the most understandable is: what share of total wealth is owned by the richest households, typically the top 1 percent. In the United States, in the last survey year, 1998, the richest 1 percent of households owned 38 percent of all wealth.

This is the most easily understood measure.

There is also another measure called the Gini coefficient. It measures the concentration of wealth at different percentile levels, and does an overall computation. It is an index that goes from zero to one, one being the most unequal. Wealth inequality in the United States has a Gini coefficient of .82, which is pretty close to the maximum level of inequality you can have.

MM: What have been the trends of wealth inequality over the last 25 years?
Wolff: We have had a fairly sharp increase in wealth inequality dating back to 1975 or 1976.

Prior to that, there was a protracted period when wealth inequality fell in this country, going back almost to 1929. So you have this fairly continuous downward trend from 1929, which of course was the peak of the stock market before it crashed, until just about the mid-1970s. Since then, things have really turned around, and the level of wealth inequality today is almost double what it was in the mid-1970s.

Income inequality has also risen. Most people date this rise to the early 1970s, but it hasn't gone up nearly as dramatically as wealth inequality.

MM: What portion of the wealth is owned by the upper groups?
Wolff: The top 5 percent own more than half of all wealth.

In 1998, they owned 59 percent of all wealth. Or to put it another way, the top 5 percent had more wealth than the remaining 95 percent of the population, collectively.

The top 20 percent owns over 80 percent of all wealth. In 1998, it owned 83 percent of all wealth.

This is a very concentrated distribution.

MM: Where does that leave the bottom tiers?
Wolff: The bottom 20 percent basically have zero wealth. They either have no assets, or their debt equals or exceeds their assets. The bottom 20 percent has typically accumulated no savings.

A household in the middle — the median household — has wealth of about $62,000. $62,000 is not insignificant, but if you consider that the top 1 percent of households' average wealth is $12.5 million, you can see what a difference there is in the distribution.

MM: What kind of distribution of wealth is there for the different asset components?
Wolff: Things are even more concentrated if you exclude owner-occupied housing. It is nice to own a house and it provides all kinds of benefits, but it is not very liquid. You can't really dispose of it, because you need some place to live.

The top 1 percent of families hold half of all non-home wealth.

The middle class's major assets are their home, liquid assets like checking and savings accounts, CDs and money market funds, and pension accounts. For the average family, these assets make up 84 percent of their total wealth.

The richest 10 percent of families own about 85 percent of all outstanding stocks. They own about 85 percent of all financial securities, 90 percent of all business assets. These financial assets and business equity are even more concentrated than total wealth.

MM: What happens when you disaggregate the data by race?
Wolff: There you find something very striking. Most people are aware that African-American families don't earn as much as white families. The average African-American family has about 60 percent of the income as the average white family. But the disparity of wealth is a lot greater. The average African-American family has only 18 percent of the wealth of the average white family.

MM: Are you able to do a comparable analysis by gender?
Wolff: It is hard to separate out husbands and wives. Most assets are jointly held, so it is not really possible to separate which assets are owned by husband and which by wife. Even when things are specifically owned by one spouse or another, the other spouse usually has some residual lien on the assets, as we know from various divorce proceedings. If a pension account is owned by the husband and the family splits up, the wife typically gets some ownership of the pension assets. The same thing is true for an unincorporated business owned by the husband. It really is not that easy to separate out gender ownership in the family.

What we do know is that single women, or single women with children, have much lower levels of wealth than married couples.

MM: How does the U.S. wealth profile compare to other countries?
Wolff: We are much more unequal than any other advanced industrial country.

Perhaps our closest rival in terms of inequality is Great Britain. But where the top percent in this country own 38 percent of all wealth, in Great Britain it is more like 22 or 23 percent.

What is remarkable is that this was not always the case. Up until the early 1970s, the U.S. actually had lower wealth inequality than Great Britain, and even than a country like Sweden. But things have really turned around over the last 25 or 30 years. In fact, a lot of countries have experienced lessening wealth inequality over time. The U.S. is atypical in that inequality has risen so sharply over the last 25 or 30 years.

MM: To what extent is the wealth inequality trend simply reflective of the rising level of income inequality?
Wolff: Part of it reflects underlying increases in income inequality, but the other significant factor is what has happened to the ratio between stock prices and housing prices. The major asset of the middle class is their home. The major assets of the rich are stocks and small business equity. If stock prices increase more quickly than housing prices, then the share of wealth owned by the richest households goes up. This turns out to be almost as important as underlying changes in income inequality. For the last 25 or 30 years, despite the bear market we've had over the last two years, stock prices have gone up quite a bit faster than housing prices.

MM: A couple years ago there was a great deal of talk of the democratization of the stock market. Is that reflected in these figures, or was it an illusion?
Wolff: I would say it was more of an illusion. What did happen is that the percentage of households with some ownership of stocks, including mutual funds and pension accounts like 401(k)s, did go up very dramatically over the last 20 years. In 1983, only 32 percent of households had some ownership of stock.

By 2001, the share was 51 percent. So there has been much more widespread stock ownership, in terms of number of families.

But a lot of these families have very small stakes in the stock market. In 2001, only 32 percent of households owned more than $10,000 of stock, and only 25 percent of households owned more than $25,000 worth of stock.

So a lot of these new stock owners have had relatively small holdings of stock. There hasn't been much dilution in the share of stock owned by the richest 1 or 10 percent. Stock ownership is still heavily concentrated among rich families. The richest 10 percent own 85 percent of all stock.

As a result, the stock market boom of the 1990s disproportionately benefited rich families. There were some gains by middle class families, but their average stock holdings were too small to make much difference in their overall wealth.

MM: Apart from the absolute level of wealth of people at the bottom of the spectrum, why should inequality itself be a matter of concern?
Wolff: I think there are two rationales. The first is basically a moral or ethical position. A lot of people think it is morally bad for there to be wide gaps, wide disparities in well being in a society.

If that is not convincing to a person, the second reason is that inequality is actually harmful to the well-being of a society. There is now a lot of evidence, based on cross-national comparisons of inequality and economic growth, that more unequal societies actually have lower rates of economic growth. The divisiveness that comes out of large disparities in income and wealth, is actually reflected in poorer economic performance of a country.

Typically when countries are more equal, educational achievement and benefits are more equally distributed in the country. In a country like the United States, there are still huge disparities in resources going to education, so quality of schooling and schooling performance are unequal. If you have a society with large concentrations of poor families, average school achievement is usually a lot lower than where you have a much more homogenous middle class population, as you find in most Western European countries. So schooling suffers in this country, and, as a result, you get a labor force that is less well educated on average than in a country like the Netherlands, Germany or even France. So the high level of inequality results in less human capital being developed in this country, which ultimately affects economic performance.

MM: To what extent is inequality addressed through tax policy?
Wolff: One reason we have such high levels of inequality, compared to other advanced industrial countries, is because of our tax and, I would add, our social expenditure system. We have much lower taxes than almost every Western European country. And we have a less progressive tax system than almost every Western European country. As a result, the rich in this country manage to retain a much higher share of their income than they do in other countries, and this enables them to accumulate a much higher amount of wealth than the rich in other countries.

Certainly our tax system has helped to stimulate the rise of inequality in this country.

We have a much lower level of income support for poor families than do Western European countries or Canada. Social policy in Europe, Canada and Japan does a lot more to reduce economic disparities created by the marketplace than we do in this country. We have much higher poverty rates than do other advanced industrialized countries.

MM: Do you favor a wealth tax?
Wolff: I've proposed a separate tax on wealth, which actually exists in a dozen European countries. This has helped to lessen inequality in European countries. It is also, I think, a fairer tax. If you think about taxes that reflect a family's ability to pay, a family's ability to pay is a reflection of their income, but also of their wealth holdings. A broader kind of tax of this nature, would not only produce more tax revenue, which we desperately need, but it would be a fairer tax, and also help to reduce the level of inequality in this country.

MM: In broad outlines, how would you structure such a tax?
Wolff: I would model it after the Swiss system, which I think is a pretty fair system. It would be a progressive tax. In the United States, the first $250,000 of wealth would be exempt from the tax. That would exclude 80 percent of all families. The tax would increase at increments, starting out at .2 percent from about $250,000 to $500,000. The marginal rate would go up to .4 percent from $500,000 to $1 million, and then to .6 percent from a $1 million to $5 million, and then to .8 thereafter.

It would not be a very severe tax. In fact, the loading charges on most mutual funds are typically of the order of 1 or 2 percent. It would not be an onerous tax, but it could raise about $60 billion annually. Eighty percent of families would pay nothing, and 95 percent of families would pay less than $1,000. It would really only affect very rich families.

MM: Do you recommend non-tax approaches to deal with inequality as well?
Wolff: I think we have to provide a much broader safety net in this country.

There are lots of things that we should do to strengthen our income support system. We can expand the Earned Income Tax Credit, which is now a fairly substantial aid to poor families, but which can be improved.

The minimum wage has fallen by about 35 percent in real terms since its peak in 1968. We should think about restoring the minimum wage to where it used to be. That would help a lot of low-income families.

The unemployment insurance system is in a real mess; only about one third of unemployed persons actually get unemployment benefits, either because they don't qualify or because they exhaust their benefits after six months. Typically the replacement rate is about 35 or 40 percent. In the Netherlands, the replacement rate is 80 percent. Our unemployment insurance system is much less generous than in other industrialized countries and can certainly be shored up.

Of course, the welfare system is in a total state of disrepair, since it provides very restrictive coverage. Even before the switchover from AFDC to TANF with the 1996 welfare reform bill, real welfare payments had declined by about 50 percent between 1975 and 1996. So we had already experienced an enormous erosion in welfare benefits, even before we adopted this new system.

Bush appoints 100 lobbyists as regulators

May 23, 2004 by the Denver Post
When Advocates Become Regulators
President Bush has installed more than 100 top officials who were once lobbyists, attorneys or spokespeople for the industries they oversee.
by Anne C. Mulkern


WASHINGTON -- In a New York City ballroom days before Christmas, a powerful Bush administration lawyer made an unprecedented offer to drug companies, one likely to protect their profits and potentially hurt consumers.

Daniel E. Troy, lead counsel for the U.S. Food and Drug Administration, extended the government's help in torpedoing certain lawsuits. Among Troy's targets: claims that medications caused devastating and unexpected side effects.

Pitch us lawsuits that we might get involved in, Troy told several hundred pharmaceutical attorneys, some of them old friends and acquaintances from his previous role representing major U.S. pharmaceutical firms.

The offer by the FDA's top attorney, made Dec. 15 at the Plaza Hotel, took the agency responsible for food and drug safety into new territory.

"The FDA is now in the business of helping lawsuit defendants, specifically the pharmaceutical companies," said James O'Reilly, University of Cincinnati law professor and author of a book on the history of the FDA. "It's a dramatic change in what the FDA has done in the past."

Troy's switch from industry advocate to industry regulator overseeing his former clients is a hallmark of President Bush's administration.

Troy is one of more than 100 high-level officials under Bush who helped govern industries they once represented as lobbyists, lawyers or company advocates, a Denver Post analysis shows.

In at least 20 cases, those former industry advocates have helped their agencies write, shape or push for policy shifts that benefit their former industries. They knew which changes to make because they had pushed for them as industry advocates.

The president's political appointees are making or overseeing profound changes affecting drug laws, food policies, land use, clean-air regulations and other key issues.

Government watchdogs call it a disturbing trend, not adequately restrained by existing ethics laws.

Among the advocates-turned-regulators are a former meat-industry lobbyist who helps decide how meat is labeled; a former drug-company lobbyist who influences prescription-drug policies; a former energy lobbyist who, while still accepting payments for bringing clients into his old lobbying firm, helps determine how much of the West those former clients can use for oil and gas drilling.

"When you go to work in lobbying, it is clearly understood and accepted that your job is to advocate for the interests of those who hired you," said Terry L. Cooper, a University of Southern California ethics and government professor. "When you go to work in government, you are supposed to be responsible for upholding and maintaining whatever you can identify as the public interest."

The Bush administration says the regulators were chosen for their abilities.

"The president appoints highly qualified individuals who make their decisions based on the best interests of the American people," said White House spokesman Jim Morrell. "Any individual serving in the administration must abide by strict legal and ethical guidelines, including full disclosure of past lobbying activities."

Six of the former industry advocates have faced ethics investigations or resigned amid conflict-of-interest charges. Those and at least 14 others have been lambasted by public-interest groups.

Government ethics standards are part of the problem because they don't fully address the kind of issues that now permeate Washington, Cooper and some inside government say. The rules focus mainly on direct financial conflicts. Other, more nuanced conflicts aren't addressed

"There are so many ways around, over and under these (ethics) bans ... they almost never work," said Paul Light, who for decades has studied the appointment process for the Brookings Institution, a think tank in Washington. "There're more screen doors than steel doors."

A March 16 report from the Interior Department's inspector general, for example, concluded that department's "byzantine" conflict-of-interest rules were "wholly incapable" of addressing ethical questions involving a former energy lobbyist, J. Steven Griles, as the department's No. 2 official.

The report called the department's ethics system "a train wreck waiting to happen."

Bringing bias to a federal job isn't new. Presidents of all political persuasions have appointed people who shared their party's values.

As president, Bill Clinton peppered the federal bureaucracy with Democratic state officials, lawyers and advocates from various environmental or public-interest groups.

Only a handful of registered lobbyists worked for Clinton, however.

Bush's embrace of lobbyists marks a key difference because it allows "those who are affected by the regulations to determine what the ground rules should be," said David Cohen, co-director of the Advocacy Institute, which helps teach nonprofits how to lobby in Washington.

While previous Republican presidents hired lobbyists, "the Bush administration has made it rise in geometric proportions," Cohen said, meaning Bush is "capturing the instruments of government and using them for the ends" that favor Bush's political supporters.

"In the Bush administration," said U.S. Sen. Joe Lieberman, D-Conn., "the foxes are guarding the foxes, and the middle-class hens are getting plucked."

Republicans and their lobbying allies reject the idea that industry is embedded in the administration.

"Foxes? No," Vice President Dick Cheney told The Denver Post. "I think we have a good track record."

The clout of industry is balanced by the power of labor unions, trial lawyers and public-interest groups, said Jerry Jasinowski, chairman of the National Association of Manufacturers.

"The notion that somehow business gets everything and we've gotten a free ride is absurd," he said.

Still, the lobbyists-turned-policymakers control or influence health care, food safety, land use, the environment and other issues touched by government.

HEALTH CARE

Ann-Marie Lynch

The drug-industry lobbyist who fought price controls joined the Health and Human Services Department and has helped drug companies avoid the limits.

Top aides in the Department of Health and Human Services provide analysis and advice to the president on key consumer issues, including prescription-drug policies. In doing so, they consider the needs of pharmaceutical companies seeking revenue for future research, and consumers struggling to afford increasingly costly medications.

In June 2001 Bush installed Ann- Marie Lynch, a lobbyist for the drug- company trade group Pharmaceutical Research and Manufacturers of America, to help set those policies.

As a lobbyist, Lynch fought congressional attempts to cap prices for drugs. Price controls, she argued, would hamper medical innovation.

Thirteen months after Lynch became deputy assistant secretary in the office of policy, her division issued a report that praised brand- name drugs. It warned that "government-controlled restrictions on the coverage of new drugs could put the future of medical innovation at risk and may retard advances in treatment."

Consumer advocates say that's nonsense. Other countries innovate despite price controls, said Gail Shearer, director of health policy analysis for Consumers Union, nonprofit publisher of Consumer Reports.

"They haven't taken as seriously their job of making medicines affordable to all Americans," Shearer said. "When you talk about the need for (drug) innovation, you have to put it in the context of, will people get the wonder drugs?"

Critics say the report influenced congressional debate over a Medicare drug policy that, among other things, banned government from using Medicare's buying power to cut drug prices. The legislation will mean an extra $139 billion in profit over eight years to drug companies, Boston University researchers said.

Republicans in Congress used arguments that came "directly out of Ann-Marie Lynch's mouth" and from the trade group she previously worked for, said Rep. Sherrod Brown of Ohio, lead Democrat on the Energy and Commerce Committee's health subcommittee.

Lynch declined to talk to a reporter. HHS spokesman Bill Pierce said the report was not intended to sway Congress. Provisions banning Medicare from negotiating drug prices date to 2000, he said.

Lynch also blocked the release of about a dozen completed research reports that challenge drug-company claims, three former employees said. Pierce said Lynch decides research topics and which reports are released.

One 2001 report, for example, criticizes Medicare plus Choice (now known as Medicare Advantage). Its findings suggested that running the Medicare prescription-drug benefit through private health companies - the method the administration ultimately chose - would be more expensive and would not serve rural areas well.

"Very few of (the private companies) manage to bring in the benefit cost effectively," said Mark Merlis, the private health policy consultant who wrote the report.

Thomas A. Scully

The former hospital lobbyist presided over an agency that helped a chain he once represented win a favorable settlement in a Medicare fraud case.

Thomas A. Scully represented the nation's for-profit hospitals as a lobbyist before being hired by the Bush administration in June 2001 to head the federal Centers for Medicare & Medicaid Services.

Eight months after Scully arrived at the Medicare and Medicaid agency, it moved to settle final claims involving HCA Inc., a hospital chain that was the biggest member of Scully's former employer, the Federation of American Hospitals. HCA Inc. faced allegations it fraudulently overbilled the government for Medicare cases.

Under the terms agreed to in June 2002 by Scully's agency, HCA would have settled for $250 million. Medicare fraud cases typically are ironed out with Justice Department participation, but Scully agreed to those terms on his own, said John R. Phillips, an attorney who represented whistle-blowers in the case.

"The $250 million was a total sellout by Scully, who totally negotiated it behind Justice's back," Phillips said.

It also was handled in a way that protected the company from a full review of its cost reports and the triple- damage civil fines that can be imposed in fraud cases, he said.

Sen. Charles Grassley, R-Iowa, asked Justice in October 2002 if that deal was "too lenient."

Justice delayed the settlement until June 2003.

HCA, the nation's biggest for-profit hospital company, eventually paid that $250 million, plus $631 million in civil penalties and damages and $17.5 million to states.

Scully's ethics agreement did not require him to officially avoid cases involving HCA. But Scully said he steered clear.

"I recused myself from everything involving HCA-specific issues or policy and was not involved in any way, shape or form," Scully said. "Every time anything came up (regarding) HCA, I left it to my deputies."

But Grassley in a June 25, 2002, letter to a Justice Department lawyer said comments by Scully "have given me great concern that there is an active, ongoing effort underway to change or modify enforcement (on Medicare fraud) policy that in my view could significantly undermine the (law)."

Scully has since left the administration for consulting jobs with a lobbying firm and an investment company that represent Medicare providers.

Daniel E. Troy

The lawyer who represented major drug companies still fights for causes that benefit them as chief counsel at the Food and Drug Administration.

Daniel E. Troy was well-known at the FDA before he arrived in summer 2001 to work as chief counsel, the top legal position in the department.

As a lawyer in private practice, Troy repeatedly sued the FDA, arguing that it had only limited ability to regulate drug companies. He filed those suits through the Washington Legal Foundation, a group funded by businesses, including drug companies. Donors include charitable foundations run by Pfizer Inc., Procter & Gamble Co. and Eli Lilly & Co.

Troy also represented Pfizer through his firm, Wiley, Rein & Fielding. Troy said in an e-mail to a reporter that his Pfizer work was mainly communications and insurance law, and averaged only 80 hours a year.

At the FDA, Troy still is fighting for causes that benefit drug companies.

It's unclear whether any of pharmaceutical firms responded to his December request for lawsuits the FDA might get involved in.

By the time Troy made that offer, he had already intervened in three drug-company cases as FDA chief counsel. One involved Pfizer.

In court briefs, the FDA argued that it determines which warnings a drug company must give consumers. Lawsuits filed in state courts arguing that drug-company warnings are inadequate therefore were invalid, the FDA says. One of the cases Troy challenged involves thousands of consumers who say they were harmed by painful withdrawal from an antidepressant.

Lawsuits accusing drug companies of telling consumers too little about side effects constitute the largest category of cases against drug companies, law professor O'Reilly said.

If Troy's legal position prevails, O'Reilly said, it would be catastrophic for consumers hurt by drugs. He said it would bar cases like the one filed against the makers of fen-phen, the combination of diet medications tied to heart problems. The makers of those drugs are settling with consumers for $14 billion. That case predates Troy's policy.

Troy, who declined to be interviewed, said in a written statement that the FDA is intervening in the lawsuits to protect "the safety, effectiveness and availability of important medical products."

He said that would be "adversely affected if judges and juries acting under state law had the power to substitute their judgment for the expert determinations made by FDA scientists."

Clinton's Justice Department, he added, took the same legal position, arguing that federal law pre-empts state law.

But prior to Troy, professor O'Reilly and one FDA official said, the government got involved only when a judge asked. Troy, in contrast, is seeking cases in which to intervene.

And the FDA now is staking a new legal claim, experts say: that its authority to determine drug labeling always trumps any claims made in state court.

The FDA is "taking sides in private litigation," said Thomas McGarity, a University of Texas Law School professor and president of the Center for Progressive Regulation, which supports government regulation on health and safety issues.

The FDA asks drug-company attorneys to alert the agency to cases because otherwise "our rules might be undermined by contrary state findings" the agency is unaware of, said Peter Pitts, an FDA spokesman.

He added: "For people to infer that (FDA) decisions are made with anything but the public health as our focus is untrue, unfair and very ill-considered."

FDA officials also say they want to discourage frivolous lawsuits, which drive up costs.

A former FDA chief counsel in the Nixon administration, Peter Barton Hutt, said he supported the FDA's legal position but added, "I probably wouldn't be out there encouraging" lawsuits.

Troy oversees other FDA changes that provoked accusations that he is siding with drug companies.

In October 2001, the Health and Human Services Department gave Troy's office final approval over warnings telling companies they could be in violation of FDA rules. Those had previously been sent out by the FDA's drug-marketing division and district offices.

After that change, the number of warnings of questionable claims by pharmaceutical companies quickly dropped from an average of seven a month to two.

FDA spokesman Pitts said fewer letters were sent because the process was centralized.

"If you torture statistics long enough," Pitts said, "they confess to anything."

Others see this as dangerous to the public.

"This ... may be a welcome development for the drug industry, but it poses serious dangers to public health," Rep. Henry Waxman of California, the top Democrat on the House Committee on Government Reform, said in an Oct. 1, 2002, letter to HHS Secretary Tommy Thompson.

Waxman said the bad policy decision was "exacerbated by the appointment of Daniel Troy."

The investigative arm of Congress, the General Accounting Office, in October 2002 also found that, under the new system, warning notices "have taken so long that misleading advertisements may have completed their broadcast life cycle before FDA issued the letters."

Waxman described the delays as "a development that benefits the powerful pharmaceutical industry at the expense of consumers."

FOOD SAFETY

Charles Lambert

As a USDA official, the former lobbyist for the meat industry who opposed labeling told a hearing that mad cow disease was not a threat.

Mad cow disease had yet to surface in the United States last June when a U.S. Department of Agriculture official - a meat-industry lobbyist only eight months earlier - bet his job on the promise that the ailment couldn't sneak into the country through imports.

Congress had just passed a law requiring meat labels to state which country a cow lived in before slaughter. Food safety groups say those labels could, among other things, help consumers avoid buying beef from countries with mad cow disease.

The USDA opposed such labeling. The person making the agency's case, Deputy Undersecretary Charles Lambert, knew the arguments against such labels. He'd made them as a lobbyist for the National Cattlemen's Beef Association.

Lambert spent 15 years at the Cattlemen's Association working in Denver before coming to Washington, D.C., where he worked as lobbyist and chief economist. He left in December 2002 to join the USDA as undersecretary for marketing and regulatory programs.

When asked about mad cow and the labels, Lambert said mad cow disease wasn't a threat.

"Is there a possibility that it could get through?" Rep. Joe Baca, a California Democrat, asked Lambert at a hearing last June.

Lambert answered, "No, sir."

"None at all?" Baca asked.

"No," Lambert replied.

"You would bet your life on it - your job on it, right?"

Lambert answered, "Yes, sir."

The disease was discovered in the U.S. six months later - apparently brought here by a cow from Canada.

Lambert now says, "I overstated my case."

More than a dozen other high-ranking USDA officials appointed under Bush also have ties to the meat industry.

"Whether it's intentional or not, USDA gives the impression of being a wholly owned subsidiary of America's cattlemen," said Carol Tucker Foreman, director of the Consumer Federation of America's Food Policy Institute. She served as a USDA assistant secretary in the Carter White House. "Their interests rather than the public interests predominate in USDA policy."

When he came to the USDA, Lambert signed an agreement stating that in his first year he would "not participate personally and substantially in any particular matter involving specific parties in which (Cattlemen's) is a party or represents a party, unless I am authorized to participate."

During that period he met at least 12 times with current or former members of Cattlemen's and its affiliates, an office calendar obtained by The Denver Post shows.

Lambert said that at any meeting where policy was discussed, he acted only as a facilitator and that another USDA person was present. The calendar shows meetings where other USDA people were present, although it is not always clear what was discussed.

The rest of those meetings were at social settings, he said.

"You're not required to sever all personal and past relationships ... when you come to federal employment," Lambert said in an interview.

ENVIRONMENT

Jeffrey Holmstead

The EPA official, a lawyer, formerly worked for a firm that represents utility companies, which are among the biggest air polluters.

When the Environmental Protection Agency issued proposed changes to air pollution rules Jan. 30, the wording troubled Martha Keating, a scientist with environmental advocacy group Clear the Air.

"It struck me that I had seen this before," Keating said.

At least 12 paragraphs were identical to or closely resembled a Sept. 4, 2003, proposal given to the Bush administration by Latham & Watkins, a law firm that represents utility companies.

The EPA official overseeing the proposed changes is Jeffrey Holmstead, who until he joined the EPA in October 2001 had worked as a lawyer at Latham & Watkins. His clients included a chemical company and a trade group for utility companies. Power plants are among the biggest air polluters.

Holmstead oversees the EPA division that governs air pollution.

Environmental groups say the rewrite poses a health threat because it slows the reduction of mercury emissions by as much as 11 years. Those emissions can end up in water where they contaminate fish. Forty-three states have issued advisories about fish consumption because of mercury pollution, the U.S. Public Interest Research Group said.

One effect of the proposal would be that 168 of 236 Western-based plants, including those in Colorado, would not be required to reduce those emissions at all, Keating said.

Lobbyists commonly suggest wording for legislation. But even EPA Administrator Mike Leavitt objects to how this language was lifted.

"To take something from a source without noting it doesn't seem to be the normal course of business, and it shouldn't have been done," EPA spokeswoman Cynthia Bergman said, speaking for Leavitt.

Holmstead declined to comment.

Six Democratic senators are asking for an investigation. Ten attorneys general and 45 senators - including three Republicans - have asked Leavitt to void the proposed rule because of undue industry influence.

The inspector general hasn't decided whether to investigate. Bergman said the final pollution rule is still under development.

LAND USE

J. Steven Griles

The tenure of the veteran energy lobbyist at the Interior Department was labeled an "ethical quagmire" by the agency's inspector general.

At the U.S. Department of the Interior, which oversees some 507 million acres of national parks, refuges and rangeland, top officials weigh the competing merits of resource conservation and development.

Bush named J. Steven Griles, a veteran energy industry lobbyist, as the department's second-highest official in June 2001.

Griles earned $585,000 a year as a lobbyist, representing an array of oil, gas and other energy interests. As Interior's deputy secretary, he continues to receive $284,000 a year for four years to pay him for the value he had created for the firm by bringing in clients.

Upon entering the government, Griles had pledged to remove himself from deliberations that affected his former clients.

This year, the department's inspector general called Griles' tenure an "ethical quagmire."

"Mr. Griles' lax understanding of his ethics agreement and attendant recusals, combined with the lax dispensation of ethics advice given to him, resulted in lax constraint over matters in which the deputy secretary involved himself," the inspector general concluded.

That report or a subsequent review by the U.S. Office of Government Ethics found other issues:

A former business partner of Griles' hosted a party for Griles and top Interior officials for land and mining.

Also, a former Griles client, Advanced Power Technologies Inc., won some $2 million in no-bid contracts from his department after two people Griles supervised pressed APTI's case.

And Griles urged the EPA not to press concerns over a plan to open 8 million acres in Wyoming and Montana to gas drilling by companies including six of his former clients. The project is proceeding while a task force studies the matter.

The investigations of Griles found no illegalities. Secretary of the Interior Gale Norton announced that her right-hand man had been "cleared."

Review of ethics guidelines

Neither the Bush administration nor Congress has called for a systematic review of government's ethics guidelines.

They should, says Stuart Gilman, president of the Ethics Resource Center, a nonprofit group in Washington that works with companies and government groups.

"The question is, are we dealing with the problems we're currently confronting in government?" Gilman said.

Complaints about ethical breaches within government in some cases can be politically motivated, said Gilman, who also worked in the Office of Government Ethics under Presidents George H.W. Bush and Clinton.

At the same time, Gilman said, governmental leaders have a responsibility to eliminate both real and perceived conflicts of interest.

"For government to function, government must have the confidence of people," Gilman said. "If people don't believe the government is acting fairly, it encourages everyone to cheat."

Denver Post staff writers John Aloysius Farrell and Mike Soraghan and researchers Tamania Davis, Barbara Hudson and Regina Avila contributed to this report.

© Copyright 2004 The Denver Post

Better Day Coming

Chapter 1 & 2

What different kinds of violence did African Americans experience in the South in the decades after the end of the Civil War? How was violence connected to political issues? What political function did violence serve? How did this violence also shape society and daily life for African Americans?

Chapters 3 & 4

Compare the ideas of WEB DuBois and Booker T. Washington. Be sure to address their different personal backgrounds and their different perspectives on Reconstruction, education, and political activism.

Chapter 5

How did the Great War change life for African Americans? What changed for blacks and what did not between 1914 and 1920? Would you say this was a period of progress or defeat? Why?

Chapter 6

Though most remember Garvey as advocating the return of blacks to Africa, we see here that his ideas were much more complex. What ideas about blacks and Africa did Garvey seek to change? Why did he think the establisment of a "free and independent Africa" would help black Americans? In what ways did his ideas differ with those of the NAACP?

Chapter 7
In the 1930s "radical" groups began to challenge the NAACP's position as the political voice of African Americans. What kinds of criticism were launched at the NAACP? What ideas, strategies, and tactics differentiated activism in the 1930s from the NAACP's approach? Why did some African Americans find communism so appealing?

Chapter 9
"World War II seemed to change everything" including life for African Americans and their quest for civil rights. What do you think are the most important gains for African Americans in this period? What setbacks and defeats for African Americans continued to slow racial progress in this period? Was president Roosevelt part of the problem or part of the solution, in your opinion?

alternative question for Chapter 9 -- you can do this one or the one above

In this chapter we learn more about the extent of and limits to FDR's contribution to civil rights. In what ways did FDR expand rights for blacks and further the goal of racial equality? What are some examples of his failures in supporting civil rights? How does the author explain these failures?

Chapter 10
How did the cold war and the "Red Scare" hurt the civil rights movement and how did it assist the cause of racial equality? How did the NAACP react to pressure from anti-communist activists? What happened to WEB Dubois in this period?

Chapter 11
What role did religion play in the Civil Rights movement? How did the Christian church shape MLK's ideology? How did it provide logistical support for the movement? How the church influence the model of leadership employed by King and the SCLC?

Chapter 12
NO essay question for this chapter

Chapter 13
What was the "Mississippi Freedom Summer"? Why did some civil rights activists think Northern college students could help break the stalemate in Mississippi? Why did some activists oppose the presence of these students? How did Johnson respond to the murder of Schwerner, Goodman, and Cheney?

Chapter 14
What kinds of discrimination did African Americans face in the North? What ideas and beliefs charcterised "black nationalists" and members of the Black Power Movement (including Malcolm X). How did they differ from the ideas of Martin Luther King?