The Justice Department went big game hunting and bagged a teeny-weeny scapegoat.  More like a scape-kid, really.

Today, Justice arrested former BP engineer Kurt Mix for destroying evidence in the Deepwater Horizon blow-out.

I once ran a Justice Department racketeering case and damned if I would have 'cuffed some poor schmuck like Mix––especially when there's hot, smoking guns showing greater crimes by BP higher ups.

Last week, I released evidence we uncovered that BP top executives concealed evidence of a prior blow-out.  Had they not covered up the 2008 blow-out in then Caspian Sea, then the Deepwater Horizon probably would not have blown out two years later in 2010. [Watch the film and read the stories.]

I urge you to read the affidavit of FBI agent Barbara O'Donnell which the government filed in arresting Mix.  His crime is deleting texts from his phone indicating that the blown-out Macondo well was gushing over 15,000 barrels of oil a day, not 5,000 as BP told the public and government.  If true, it's a crime, destruction of evidence.  But Mix is a minnow.  What about the sharks?  The texts were obviously sent to someone (named only "SUPERVISOR" by the FBI).  If "Supervisor" knew, then undoubtedly so did BP managers higher up.  Presumably, even CEO Tony Hayward would have gotten the message on his racing yacht.

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Two years before the Deepwater Horizon blow-out in the Gulf of Mexico, another BP off-shore rig suffered a nearly identical blow-out, but BP concealed the first one from the U.S. regulators and Congress.

This week, EcoWatch.org located an eyewitness with devastating new information about the Caspian Sea oil-rig blow-out which BP had concealed from government and the industry.

The witness, whose story is backed up by rig workers who were evacuated from BP’s Caspian platform, said that had BP revealed the full story as required by industry practice, the eleven Gulf of Mexico workers “could have had a chance” of survival. But BP’s insistence on using methods proven faulty sealed their fate.

One cause of the blow-outs was the same in both cases:  the use of a money-saving technique—plugging holes with “quick-dry” cement.

By hiding the disastrous failure of its penny-pinching cement process in 2008, BP was able to continue to use the dangerous methods in the Gulf of Mexico—causing the worst oil spill in U.S. history. April 20 marks the second anniversary of the Gulf oil disaster.

There were several failures in common to the two incidents identified by the eyewitness. He is an industry insider whose identity and expertise we have confirmed. His name and that of other witnesses we contacted must be withheld for their safety.

The failures revolve around the use of “quick-dry” cement, the uselessness of blow-out preventers, “mayhem” in evacuation procedures and an atmosphere of fear which prevents workers from blowing the whistle on safety problems.

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Robert F. Kennedy Jr., president of Waterkeeper Alliance and senior attorney for Natural Resources Defense Council, said, “We have laws that make it illegal to hide this kind of information. At the very least, these are lies by omission. When you juxtapose their knowledge of this incident upon the oil companies constant and persistent assurances of safety to regulators, investigators and shareholders, you have all the elements to prove that their concealment of the information was criminal.”

The first blow-out occurred on a BP rig in the Caspian Sea off the coast of Baku, Azerbaijan, in September 2008. BP was able to conceal such an extraordinary event with the help of the ruling regime of Azerbaijan, other oil companies and, our investigators learned, the Bush Administration.

Our investigation began just days after the explosion and sinking of BP’s Deepwater Horizon oil rig on April 20, 2010 when this reporter received an extraordinary message from a terrified witness—from a ship floating in the Caspian Sea:

“I know how …. Would not be wise for me to communicate via [official] IT system, ….”

When the insider was contacted on a secure line, he stated that he witnessed a blow-out and the panicked evacuation of the giant BP “ACG” drilling platform.

To confirm the witness’ story, British television’s premier investigative program, Dispatches, sent this reporter under cover into Baku, Azerbaijan, with a cameraman. While approaching the BP oil terminal, the Islamic republic’s Security Ministry arrested the crew.

To avoid diplomatic difficulties, we were quickly released. However, two new witnesses suddenly vanished, all communication lost with them, after they confirmed the facts of the 2008 blow-out. Both told us they had been evacuated from the BP off-shore platform as it filled with methane.

Furthermore, witnesses confirmed that, “there was mud (drill-pipe cement) blown out all over the platform.” It appears the cement cap failed to hold back high-pressure gases which, “engulfed the entire platform in methane gas,” which is highly explosive.

In both cases, the insider told us, BP had used “quick-dry” cement to cap their well bores and the cost-saving procedure failed catastrophically.

We have learned this week that BP failed to notify the International Association of Drilling Contractors (IADC) about the failure of the cement. (British companies report incidents as minor as a hammer dropped.) Notification would have alerted Gulf cement contractor Halliburton that the process of adding nitrogen to cement posed unforeseen dangers.

In fact, this past December, BP attempted to place the blame and costs of the Gulf disaster on Halliburton, the oil services company that injected quick-dry cement into the well under the Deepwater Horizon. BP told a federal court that Halliburton concealed a computer model that would show that, under certain conditions, the cement could fail disastrously.

Following the Deepwater Horizon explosion, it became clear that nitrogen-laced mud can leave “channels” in the cement, allowing gas to escape and blow out the well-bore cap. However, that would have become clearer, and risks better assessed, had Halliburton and regulators known of the particulars of the Caspian blow-out.

We have also just learned that the cement casing itself appears to have cracked apart in the Caspian Sea. The sea, we were told, “was bubbling all around [from boiling methane]. You’re even scared to launch a life boat, it may sink.”

This exposed another problem with deepwater drilling. BP had promoted Blow-Out Preventers (BOPs) as a last line of defense in case of a blow-out. But if the casing shatters, the BOPs could be useless.

BP has gone to extraordinary lengths to conceal the story of the first blow-out, and for good reason:  If the company deliberately withheld the information that it knew “quick-dry” cement had failed yet continued to use it, the 11 deaths on its Gulf rig were not an unexpected accident but could be considered negligent homicide.

Kennedy told me, “This is a critical piece of information. The entire government is basing its policy on the assurances of this company that this process can be done safely and it never failed before. This is what they were telling everybody. Yet, the whole time they knew that this was a process that had failed disastrously in the Caspian Sea.”

Why haven’t these stories come out before? This week our witness explained that in Azerbaijan, “People disappear on a regular basis. It’s a police state.”

But even in the U.S. and Europe, BP and other industry workers are afraid to complain for fear their files will be marked “NRB,” for Not Required Back­­—which will end a workers’ offshore career. Jake Malloy, head of the Offshore Oil Workers Union, reached in Aberdeen, Scotland, independently confirmed statements of the whistleblowers. He noted that companies create an atmosphere of fear for one’s job with the “NRB” system and its latest variants, which discourage reports on safety problems.

BP refused an interview for this investigation, though the company responded to our written questions regarding the Caspian blow-out. Notably, the company does not deny that the blow-out occurred, nor even that it concealed the information from U.S. and UK regulators. Rather, the company says there was a “gas release”—a common and benign event, not a blow-out. As to the accusation of concealment, BP states:

While BP says it issued a press release at the time of the September 2008 Caspian blow-out, the company did not tell the whole truth as reported by workers and witnesses. The BP press release of that day admitted only that, “a gas leak was discovered in the area of” the platform when, in fact, it was an explosion of cement and methane, say our witnesses, “which engulfed the platform.”

BP later stated that all operations on the platform were suspended as a “precautionary measure,” suggesting a distant, natural leak. In fact, the workers themselves said that, like the workers on the Deepwater Horizon, they were one spark away from death, with frightened minutes to escape.

While BP called the evacuation a by-the-textbook procedure, in fact, said our witness, “It was total mayhem,” and that a lifeboat rammed a rescue ship in the chaos. U.S. government investigators in the Gulf cite BP’s confused and chaotic evacuation procedures for possibly adding to the Deepwater Horizon’s death toll. Information about the 2008 blow-out should have led to improved procedures and possibly could have saved lives.

More seriously, BP PLC’s official filing to the U.S. Securities Exchange Commission, which requires reporting of all “material” events in company operations, again talked about a “subsurface release,” concealing that the methane blew out through its drilling stack.

Both the safety of quick-dry cement (which some drillers won’t use) and deep water drilling itself were in contention before the April 20, 2010 Gulf blow-out. In fact, the U.S. Department of Interior was refusing BP, Chevron and Exxon the right to expand the area of their deep water drilling in the Gulf over safety questions.

However, BP and the industry conducted a successful lobbying campaign to expand deep water drilling. BP’s Vice-President for operations in the Gulf, David Rainey, testified before Congress in November 2009, five months before the Deepwater Horizon explosion that, “Releases from oil and gas operations are rare.” Rainey assured Congressmen that reliable “well control techniques” such as cement caps will prevent a deep water disaster. Rainey made no mention to Congress of the blow-out in the Caspian Sea which occurred a year before his testimony.

BP itself states that if not for Halliburton’s quick-dry cement failures, the Deepwater Horizon would never have blown out.  Halliburton defends itself by saying that BP’s methods created air channels in the cement that caused it to fail. Notably, BP’s court Motion states, “Halliburton has deprived the Court and parties of uniquely relevant evidence.” BP claims that hiding the information about problems with the cement caused the loss of lives.

Kennedy suggests that if Halliburton’s withholding evidence was deadly, so was BP’s concealment of the cement failure in the Caspian. Stefanie Penn Spear, editor of EcoWatch.org, says that BP’s hiding evidence ultimately led to, “The biggest oil spill in U.S. history. It entirely turned the Gulf Coast economy upside down and threatened—and continues to threaten—the health and livelihoods of the people in the Gulf region.”

How is it that a major oil disaster, a blow-out that shut down one of the world’s biggest oil fields and required the emergency evacuation of 211 rig workers could be covered up, hidden from U.S. regulators and Congress?

The answer:  pay-offs, threats, political muscle and the connivance of the Bush Administration’s State Department, Exxon and Chevron.

For that story, read Part 2 of Greg Palast’s investigation BP Covers up Blow-Out—Bush, Big Oil and WikiLeaks.

——–

Re-prints permitted with credit to EcoWatch.org and the author.

Greg Palast is the author of Vultures’ Picnic (Penguin 2011), which centers on his investigation of BP, bribery and corruption in the oil industry. Palast, whose reports are seen on BBC-TV and Britain’s Channel 4, will be providing investigative reports for EcoWatch.org.

You can read Vultures' Picnic, "Chapter 1: Goldfinger," or download it, at no charge: click here.

Subscribe to Palast's Newsletter and podcasts.

Follow Palast on Facebook and Twitter.

GregPalast.com

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There's only one thing to stop him:  A COMIC BOOK.

Please help us raise the cash to get this printed. The nation’s top elections-heist investigators can publish our new voter-protection comic book, BILLIONAIRES AND BALLOT BANDITS.

Donate $99 today and we'll list your name in the special thanks of the book for the 99% - plus a signed copy!

Or, if you can't swing that, at least get a signed DVD which you can pre-order.

In 2008, you helped us put out the amazing Steal Back Your Vote comic book which went to over a quarter million threatened voters.  We are proud that one is in the Native-American museum in Santa Fe, New Mexico.

Genius pen-man Ted Rall, crusading voting rights attorney Bobby Kennedy Jr., gonzo photographer Zach Roberts (Friday is his trial date from his arrest covering the Occupation for us) and the rest of the Palast Investigation crew will be putting together another comic book PLUS a film short series PLUS a booklet.

The comic book, films and booklet will combine our investigation of vote theft with the names and blood-soaked sources of the super-PACs.

We know the billionaires, open and hidden, behind Restore Our Future, the Kochs and Rove’s Crossroads GPS. Shouldn’t you know who’s buying the White House and how they got their loot?

Help us get out the story right now.

We are a not-for-profit project and strictly non-partisan: it’s about saving our democracy from a coup d’état of moneyed ballot-burglars.

We MUST get this information out and soon. Help us right now and get your name in the film credits and in the book.

Are you an Angel?  We need heavenly agents to donate $1,000 each -- and get film co-producer credits and book co-publish credit ... 20 copies to give to the Occupation, civil rights or non-profit group of your choice.

Since 1996, when I was the first journalist to film a documentary exposé on the Koch Brothers, I've been building the files that no one has yet seen.  HELP ME GET OUT THE EVIDENCE.

In 2000, we uncovered how Katherine Harris purged 56,000 African-Americans from Florida’s voter rolls.  It's gotten worse––I kid you not––and we need to expose the Right's latest ballot burglary scheme.

And we got it to the activists: we made it available for free and published it in The Nation. All from donations.

Our publisher, Seven Stories Books, is willing to put the book/comic out for a dirt cheap price, online and in print. We need to get this onto the streets and into the media before the election.

Not one dime goes to Greg Palast.  I will donate my time and files.  But we can’t get to the scenes of the ballot-box crimes by flapping our arms.  We need travel money.

We already have hair-raising film in the can. That too needs editing so we can shine it on those who wreck our civil rights.

By the way: If you have ever donated to our Fund and NOT received the expected gift, please let us know immediately.  Everyone of our supporters is our soulmate.

You know I don't ask often.  But now I have to. Join me in supporting this defense of our democracy.

There are many levels at which you can support us - http://www.gregpalast.com/store/

"Journalism is just a gun. It's only got one bullet in it, but if you aim right, that's all you need. Aim it right, and you can blow a kneecap off the world." - Warren Ellis

Load our weapon.

With respect,

Greg Palast

******

Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores.

Subscribe to Palast's Newsletter and podcasts.

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Read the Greenpeace blog and listen to the Greenpeace Radio Podcast with Greg Palast, author of Vultures' Picnic: In pursuit of petroleum pigs, power pirates and high-finance carnivores.

Then read this.  It's my soul on a plate.  Then pass it on so others can taste it.
-- gp

"Occupy," Big Oil and the U.S. Media
with Muckraking Journalist Greg Palast
By Kevin J. Kelley [12.07.11]
Seven Days Magazine

Greg Palast was floating in a kayak off the Alaska coast in 1997 when he had an epiphany. He was working at the time as an investigator for the Chugach native people, whose lands had been slimed by the 1989 Exxon Valdez oil spill. In the course of his study, Palast uncovered information about Exxon’s culpability for the disaster, but he had no way of publicizing it. So he decided to become a journalist.

It’s proven a successful second career for Palast, 59, who studied business at the University of Chicago under right-wing economist Milton Friedman. He’s won six Project Censored awards for reporting important stories ignored by the mainstream press. He’s also the author of two international best sellers, Armed Madhouse and The Best Democracy Money Can Buy.

A native Californian, Palast reports regularly for Britain’s Guardian newspaper and for the BBC. Nation magazine writer Jim Hightower calls Palast “a cross between Sam Spade and Sherlock Holmes.” Corporate executives he’s outed as wrongdoers call Palast other things.

Palast spoke with Seven Days in advance of his scheduled talk next week at Burlington’s Main Street Landing Film House.

Seven Days: You must be sympathetic to Occupy Wall Street. Do you think it will have a lasting impact on U.S. politics?

Greg Palast: It’s not a setback for Occupy to no longer be occupying. No one gives a shit about Wall Street. It’s just a piece of tarmac. It was never the point of the movement.

The point has been to expose the 1 percent, the movers and shakers who are moving and shaking us, all those rich motherfuckers. Now we know their names, where they live, how they made their billions.

So yeah, the impact has been huge. And it’s just starting. I’m deeply involved with Occupy.

SD: You’ve got a new book out: Vultures’ Picnic: In Pursuit of Petroleum Pigs, Power Pirates, and High- Finance Carnivores. Can you summarize what it’s about?

GP: Vultures are financial speculators who seize the assets of the poorest nations by claiming these countries owe money that the speculators try to collect through intimidation, bribery and theft. One guy associated with this is Paul Singer; he’s Mitt Romney’s top economic adviser. I’ve been investigating how Romney’s “job creator” makes his money, and that’s a story Singer doesn’t want you to hear.

By the way, I’m totally nonpartisan. Even though Singer owns the Republican Party, I point out that he rents the Democratic Party.

Most of the book is a five-continent investigation of British Petroleum. I’m bringing you the stuff you don’t get from CNN or the Petroleum Broadcasting System.

BP’s blowout in the Gulf in 2010 was actually the second big disaster it had. There was also a blowout in the Caspian Sea in Azerbaijan in 2008, but BP covered it up with a combination of bribery, beatings and blow jobs. [Azerbaijani officials] kept their lips closed and their zippers open.

SD: So your talk in Burlington is part of a book tour?

GP: I’m on a troublemaking tour. My talks are platforms for Occupy activists in their transition away from their fixation with real estate.

SD: You obviously come at stories from a left-wing perspective. Do you ever worry that your ideology might blind you to facts?

GP: I don’t have an ideology. There’s really only the truth and the not-truth. I’m just an old-fashioned gumshoe reporter.
The worst fucking thing about American journalism, by the way, is its “on-the-one-hand-this, on-the-other-that” approach. It really distorts or omits truth.

I exposed [Florida Secretary of State] Katherine Harris for purging thousands of black voters from the electoral rolls. That cost [Al] Gore the 2000 election. It was stolen from him. I documented it.

I could not get that story into the U.S. media. There was a total news blackout of what had happened. It finally got picked up by the L.A. Times, and they played the story as “Democrats accuse Republicans of removing black voters from the rolls; the Republicans deny that.”

Jesus Christ! We don’t have balanced news in the United States; it doesn’t fucking exist. News here isn’t reporting; it’s repeating.

SD: Hang on. You write mostly for British outlets. Are you saying the British press is less influenced by corporate interests than the American press? The same financial dynamics are at work, right?

GP: Wrong. The Guardian is owned by a not-for-profit charitable trust. That’s allowed it to become the most influential English-language paper in the world.

SD: More influential than the New York Times?

GP: The New York Times is influential in New York. People elsewhere see that it’s — what shall we say? — incomplete.

The BBC is the gold standard of journalism. It’s important to know it’s neither corporate owned nor government owned. It’s owned by subscribers, the people who pay £100 a year for a TV license.

SD: Yeah, but Britain doesn’t have a First Amendment or a Freedom of Information Act.

GP: That’s true, but the Brits could borrow our First Amendment, because we’re not using it. And have you tried using FOIA lately? Good luck.

It’s also true that I don’t have any legal protection for stories in the British press. The resulting degree of self-censorship by some reporters is just astonishing.

But it’s still not as bad as it is here. The entire front page of the Guardian last week had my coverage of Singer, Romney’s biggest funder. There wasn’t one mention of his role in the U.S. press.

SD: Staying with journalism for a minute, do you have a journalist hero? George Orwell, maybe?

GP: Only Christopher Hitchens is pompous enough to compare himself with Orwell. My model is Jack Anderson [a Pulitzer Prize-winning modern muckraker who broke scandals involving both Democrats and Republicans].

I also always admired Ron Ridenhour, the soldier who revealed the My Lai massacre [in which 500 Vietnamese villagers were killed by U.S. troops on March 16, 1968]. Ridenhour was the greatest investigative reporter of the last century. He died way too young [of a heart attack in 1998 at age 52].

The TV show “Columbo” had a big influence on me, too. I learned a lot from it about how to do investigations. Lt. Columbo was just totally dogged.

SD: How about Hunter Thompson? You’ve got an image like his.

GP: People make that connection all the time because we have Rolling Stone in common. But Thompson was a brilliant social analyst, and I’m just a gumshoe guy.

SD: You do look like an old-school reporter with that Humphrey Bogart hat of yours.

GP: I wear the hat because I’m bald and I’ll get painfully sunburned otherwise.

SD: Matt Drudge wears the same kind of hat.

GP: Yeah, some people say I’m a left-wing Matt Drudge, but there’s a big difference: Drudge is full of shit, and I’m full of information.

SD: You must be embarrassed that one of the first things on Google for “Greg Palast” is a 2009 piece you wrote saying what a great job Obama is doing.

GP: It was right after he took office. And it was nice to see him acting for one week like a real president.

SD: So what happened?

GP: Obama was reminded of who elected him. He brought into power guys like Tim Geithner and Larry Summers — Wall Street operatives and protégés of Robert Rubin, who was Clinton’s Treasury secretary [and a Goldman Sachs and Citigroup executive].

Remember, it wasn’t Bush who destroyed the economy; it was a guy named Bill Clinton.

They put the arm on Obama. They reminded him he’s just a tenant.

SD: Do you worry about your safety?

GP: I very much fear for the safety of my sources. Some of them do end up in jail and/or beaten up. It’s insanely dangerous for some of them to talk to me. One of my great sources was just charged with sedition. These guys are insanely courageous. But please don’t give the impression that your life will be threatened if you become my source. That wouldn’t be helpful.

SD: You’re talking about incidents in other countries, right? You haven’t had sources jailed or beaten up in the U.S., have you?

GP: Look at Bradley Manning, America’s most heroic political prisoner [the U.S. Army soldier accused of supplying a cache of secret diplomatic cables to WikiLeaks]. Lots of Americans are facing the ruin of their careers for whistle-blowing.

******

Greg Palast will talk about “Why We Occupy: How Wall Street Picks the Bones of America,” on December 12 at 7 p.m. in Burlington’s Main Street Landing Film House. Palast's One-Percent Tour travels this week to Houston on Thursday, Baltimore Friday and next week to Burlington VT (Monday), and Atlanta (Thursday).

Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, released in the US and Canada by Penguin.

You can read Vultures' Picnic, "Chapter 1: Goldfinger," or download it, at no charge: click here.

Subscribe to Palast's Newsletter and podcasts.
Follow Palast on Facebook and Twitter.

GregPalast.com

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[New York Monday March 19]

Our photographer ZD Roberts was beaten by New York City cops with nightsticks while covering Occupy Wall Street's attempt to re-take Zuccotti Park Saturday night.

Zach yelled several times, “I’m PRESS! PRESS!” yet was slammed on the head twice after he’d been thrown to the ground when the police shoved back the protesters. Zach, whose photos of Occupy Wall Street have been seen all over the world on the front page of The Guardian, showed his press badge, an act for which his hair was grabbed, head pulled back and slammed again with a club.

If you remember, Zach was arrested while covering the story three months ago. His trial is coming up (he refused to cop a plea).

We’ve covered the world … but who thought that the toughest combat assignment would be New York?

Here’s Zach story and comment in his own words and photos:

My head hurts. The NYPD did this to me.

3 months after my arrest during an Occupy Wall St. protest on #D17 and two days away from my meeting with the Assistant DA about said arrest - I got beaten by cops just outside of Zuccotti Park.

I wasn't the only one, and I have no doubt I won't be the last. The NYPD has complete authority in this town - I hate using the word police state, but when I saw a girl thrown from a bus, in handcuffs, having a seizure being tossed to the ground - I really am at a loss for any other words.

Cameras documented it. Here's one of the photos I took. There's tons of video. I can tell you from being there that there wasn't a single police officer with a look of concern on his/her face as the girl continued having a seizure on the hard pavement of Broadway.

It took 15 minutes for an ambulance to arrive. I'm told 5 minutes is the usual response time in this part of town.

This is Commissioner Ray Kelly's city, we just live here.

There was no ambulance needed for me. I was lucky… or maybe just stupid.

After the second cleansing of Zuccotti Park, Saturday night, the police continued their pushback under the guise of 'safety concerns' - basically a standard operating procedure to keep protesters and journalists from being allowed to witness arrests and to disperse the crowd in different directions.

It works quite well, that is until it doesn't. The thing is, when you're pushing back with billy clubs and metal barricades, sometimes people can't move back quick enough. Or sometimes, people refuse to move from a public sidewalk. Well as a photographer, I get caught in the middle quite often - usually I'm deft enough to get out of the way - this time I wasn't.

I fell back, and while trying to get up - there was another push from the police - they saw me fall, mind you. Just didn't care.

Two or three people made it over me without falling as well, using me as their sidewalk (they didn't have any other choice) - but then came the rush - four or five people fell on top of me.

The police kept pushing. Then came the batons. I couldn't see if the people that were on top of me previously got hit at all but I certainly did, twice to the back and once on the head.

I'm not quite sure what the logic is of literally beating a man when he's down. But once he saw that his baton beating wasn't getting me going he decided to try to pick me up by my hair. That didn't work either - but by then I was up enough to get my footing under me as I continued screaming "PRESS!!! PRESS!!!" That was enough to get the beating to stop - but I still was pushed/thrown back into the crowd, again almost losing my footing as I had to leap over a pile of garbage into the street.

Checking my bag and camera for damage I moved outside of the crowd to compose myself before pushing back in.

Read the rest at SuicideGirlsblog.com later tomorrow and visit our facebook page for some exclusive photos from the raid.

Please support our kickstarter campaign to support the research and filming of a DVD and book on Billionaires and Ballots.

Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores.

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by Greg Palast
for FreePress.org

I've seen a lot of sick stuff in my career, but this was sick on a new level.

Here was the handwritten log kept by a senior engineer at the nuclear power plant:

Wiesel was very upset. He seemed very nervous. Very agitated. . . . In fact, the plant was riddled with problems that, no way on earth, could stand an earth- quake. The team of engineers sent in to inspect found that most of these components could "completely and utterly fail" during an earthquake.

"Utterly fail during an earthquake." And here in Japan was the quake and here is the utter failure.

The warning was in what the investigations team called The Notebook, which I'm not supposed to have.  Good thing I've kept a copy anyway, because the file cabinets went down with my office building ....

WORLD TRADE CENTER TOWER 1, FIFTY-SECOND FLOOR
NEW YORK, 1986

[This is an excerpt in FreePress.org from Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters, to be released this Monday.  Click here to get the videos and the book.]

Two senior nuclear plant engineers were spilling out their souls and files on our huge conference table, blowing away my government investigations team with the inside stuff about the construction of the Shoreham, New York, power station.

The meeting was secret. Very secret. Their courage could destroy their careers: No engineering firm wants to hire a snitch, even one who has saved thousands of lives. They could lose their jobs; they could lose everything. They did. That’s what happens. Have a nice day.

On March 12 this year, as I watched Fukushima melt, I knew:  the "SQ" had been faked.  Anderson Cooper said it would all be OK.  He'd flown to Japan, to suck up the radiation and official company bullshit.  The horror show was not the fault of Tokyo Electric, he said, because the plant was built to withstand only an 8.0 earthquake on the Richter scale, and this was 9.0.  Anderson must have been in the gym when they handed out the facts.  The 9.0 shake was in the middle of the Pacific Ocean, 90 miles away.  It was barely a tenth of that power at Fukushima.

I was ready to vomit.  Because I knew who had designed the plant, who had built it and whom Tokyo Electric Power was having rebuild it:  Shaw Construction.  The latest alias of Stone & Webster, the designated builder for every one of the four new nuclear plants that the Obama Administration has approved for billions in federal studies.

But I had The Notebook, the diaries of the earthquake inspector for the company.  I'd squirreled it out sometime before the Trade Center went down.  I shouldn't have done that.  Too bad.

All field engineers keep a diary. Gordon Dick, a supervisor, wasn’t sup- posed to show his to us. I asked him to show it to us and, reluctantly, he directed me to these notes about the “SQ” tests.

SQ is nuclear-speak for “Seismic Qualification.” A seismically qualified nuclear plant won’t melt down if you shake it. A “seismic event” can be an earthquake or a Christmas present from Al Qaeda. You can’t run a nuclear reactor in the USA or Europe or Japan without certified SQ.

This much is clear from his notebook: This nuclear plant will melt down in an earthquake. The plant dismally failed to meet the Seismic I (shaking) standards required by U.S. and international rules.

Here’s what we learned: Dick’s subordinate at the nuclear plant, Robert Wiesel, conducted the standard seismic review. Wiesel flunked his company. No good. Dick then ordered Wiesel to change his report to the Nuclear Regulatory Commission, change it from failed to passed. Dick didn’t want to make Wiesel do it, but Dick was under the gun himself, acting on direct command from corporate chiefs. From The Notebook:

Wiesel was very upset. He seemed very nervous. Very agitated. [He said,] “I believe these are bad results and I believe it’s reportable,” and then he took the volume of federal regulations from the shelf and went to section 50.55(e), which describes reportable deficiencies at a nuclear plant and [they] read the section together, with Wiesel pointing to the appropriate paragraphs that federal law clearly required [them and the company] to report the Category II, Seismic I deficiencies.

Wiesel then expressed his concern that he was afraid that if he [Wiesel] reported the deficiencies, he would be fired, but that if he didn’t report the deficiencies, he would be breaking a federal law. . . .

The law is clear. It is a crime not to report a safety failure. I could imagine Wiesel standing there with that big, thick rule book in his hands, The Law. It must have been heavy. So was his paycheck. He weighed the choices: Break the law, possibly a jail-time crime, or keep his job.

What did Wiesel do? What would you do?

Why the hell would his company make this man walk the line? Why did they put the gun to his head, to make him conceal mortal danger? It was the money. It’s always the money. Fixing the seismic problem would have cost the plant’s owner half a billion dollars easy. A guy from corporate told Dick, “Bob is a good man. He’ll do what’s right. Don’t worry about Bob.”

That is, they thought Bob would save his job and career rather than rat out the company to the feds.

But I think we should all worry about Bob. The company he worked for, Stone & Webster Engineering, built or designed about a third of the nuclear plants in the United States.

From the fifty-second floor we could look at the Statue of Liberty. She didn’t look back.

***

Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores.

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********

5 years ago, we published out first report on the Vultures with BBC TV and Democracy Now! - in the UK it set London MP's to action - the former Prime Minister Gordon Brown called them "morally outrageous” and pledged to make them illegal in that country.

In the US it was two Congressman, Donald Payne and John Conyers that stormed the White House with our report and told the President that he must act.

Congressmen Donald Payne, tirelessly fought against Vulture Funds in this country, calling hearings, pushing the Washington beltway to take notice of this practice. He died this week, he will be missed. State Senator Richard Codey said it best "He was bigger than life but never conducted himself that way, If you were violating somebody’s rights, you better get out of the way.”

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See Greg Palast on Democracy Now! with Amy Goodman on the BP Settlement.

Following the Deepwater Horizon explosion, Greg Palast led a four-continent investigation of BP PLC for Britain's television series Dispatches. From 1989-91, Palast directed the investigation of fraud charges in the Exxon Valdez grounding for Alaska Native villages.

Some deal. BP gets the gold mine and the public gets the shaft.

On Friday night, the lawyers for 120,000 victims of the Deepwater Horizon blow-out cut a deal with oil company BP PLC which will save the oil giant billions of dollars. It will also save the company the threat of a trial that could expose the true and very ugly story of the Gulf of Mexico oil platform blow-out.

I have been to the Gulf and seen the damage — and the oil that BP says is gone.  Miles of it.  As an economist who calculated damages for plaintiffs in the Exxon Valdez oil spill case, I can tell you right now that there is no way, no how, that the $7.8 billion BP says it will spend on this settlement will cover that damage, the lost incomes, homes, businesses and boats, let alone the lost lives — from cancers, fetal deformities, miscarriages, and lung and skin diseases.

Two years ago, President Barack Obama forced BP to set aside at least $20 billion for the oil spill's victims.  This week's settlement will add exactly ZERO to that fund.  Indeed, BP is crowing that, adding in the sums already paid out, the company will still have spent less than the amount committed to the Obama fund.

There's so much corrosion, mendacity and evil covered up by this settlement deal that I hardly know where to begin.

So, let's start with punitive damages.

I was stunned that there is no provision, as was expected, for a punishment fee to by paid by BP for it's willful negligence. In the Exxon Valdez trial, a jury awarded us $5 billion in punitives - and BP's action, and the damage caused in the Gulf, is far, far worse.

BP now has to pay no more than proven damages. It's like telling a bank robber, "Hey, just put back the money in the vault and all's forgiven."

This case screamed for punitive damages. Here's just a couple of facts that should have been presented to a jury:

For example, the only reason six hundred miles of Gulf coastline has been slimed by oil was that BP failed to have emergency oil spill containment equipment ready to roll when the Deepwater Horizon blew out. BP had promised the equipment's readiness in writing and under oath.

And here's the sick, sick part. This is exactly the same thing BP did in the Exxon Valdez case. It was BP, not Exxon, that was responsible for stopping the spread of oil in Alaska in 1989. In Alaska, decades ago, BP told federal regulators it would have oil spill "boom" (the rubber that corrals the spreading stuff) ready to roll out if a tanker hit. When the Exxon Valdez struck Bligh Reef, BP's promised equipment wasn't there: BP had lied.

And in 2010, BP did it again. Instead of getting the oil contained in five hours as promised as a condition of drilling, it took five days to get the equipment in place (and that was done by the US Navy on orders of the President).

This was more than negligence: it was fraud, and by a repeat offender. Now BP is laughing all the way to the bank.

And there's more. BP mixed nitrogen into the cement which capped the well-head below the Deepwater Horizon. BP claimed to be shocked and horrified when the cement failed, releasing methane gas that blew apart the rig. BP accused the cement's seller, Halliburton, of hiding the fact that this "quick-set" cement can blow out in deep water.

But, in an investigation that took me to Central Asia, I discovered that BP knew the quick-set cement could fail - because it had failed already in an earlier blow-out which BP covered up with the help of an Asian dictatorship.

The lack of promised equipment, the prior blow-out — it all could have, should have, come out in trial.

Think about it: BP knew the cement could fail but continued to use it to save money. Over time, the savings to BP of its life-threatening methods added up to billions of dollars worldwide. BP will get to keep that savings bought at the cost of eleven men's lives.

Other investigators have uncovered more penny-pinching, life-threatening failures by BP and its drilling buck-buddies, Halliburton and TransOcean. These include bogus "blow-out preventers" and a managerial system that could be called, "We-Don't-Care Chaos."

BP partners and contractors will have to pay $5.4 billion as part of the deal — and BP, not the victims, will keep the entire $5.4 billion. If TransOcean and Halliburton follow suit, BP could walk without paying another dime to victims.

BP had no choice but to pay proven damages and conceded as much. I have learned from inside the plaintiffs' legal team that this judge was just not going to allow punitive damages; and the Bush-burdened US Supreme Court is just as hostile. (The Supremes cut the Exxon Valdez punitive award by 90%.)

So BP walks without the civil punishment that tort law should provide and justice demands, grinning and ready to do it again: drill on the cheap with the price paid by its workers and the public.

But stopping a trial denies the public more than the full payment due: it denies us the truth, the whole truth and nothing but the truth. There are 72 million pages of evidence from inside BP and industry files obtained by legal discovery in the case which are now likely to follow the rig to the bottom of the sea.

That's not good. We need the real story.

The lawyers for plaintiffs got all they could get for their clients given the rightward march of the law. Also, there is no doubt that the control of the “$20-billion” spill fund by Kenneth Feinberg, known here in New York as “The Reptile,” the back room choice of Obama and BP, shafted victims by the thousands. Getting the Fund out of his saurian hands is probably the best part of the settlement deal.

But we need to widen the idea of “victim” to beyond those measurably harmed individuals. We are all BP’s victims: because of BP’s and the industry’s addiction to safety fakery from Alaska to the Caspian.

The President has just opened up the arctic waters of Alaska for drilling, has reopened the Gulf to deepwater platforms, and is fiddling with the idea of allowing the XL Pipeline to slice America in half.

So we need to know: Can we trust this industry?

The states of Louisiana and Mississippi could still haul BP into court. Fageddaboudit: neither Louisiana's Governor Bobby Jindal nor Mississippi's Phil Bryant, both of the Grand Oil Party, will expose BP. The Obama Administration must be pushed to bring the case to trail in the public interest. Though the history of federal complicity and Obama's fear of looking like a whale-hugging drill buster suggests a sell-out is in the offing.

Without a trial in the Deepwater Horizon case, we may never get the answer, never get the full story of the prior blow-outs, the fakery in the spill response system, and other profits-first kill-later trickery that bloats the bottom line of BP and the entire drill-baby-drill industry.

***

For more on Palast's worldwide investigation of BP and the industry in Central Asia, the Gulf, Alaska and the Amazon, read Palast's new book, Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores at www.VulturesPicnic.org.

You can read Vultures' Picnic, "Chapter 1: Goldfinger," or download it, at no charge: click here.

Support the Palast Investigative Fund and keep our work alive.
Subscribe to Palast's Newsletter and podcasts.
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by Greg Palast
for NationOfChange

[Thursday February 23] Republican Presidential candidate Mitt Romney called the federal government’s 2009 bail-out of the auto industry, “nothing more than crony capitalism, Obama style... a reward for his big donors to his campaign." In fact, the biggest rewards ­­– a windfall of more than two billion dollars care of US taxpayers ­­­–– went to Romney's two top contributors.

John Paulson of Paulson & Co and Paul Singer of Elliott International, known on Wall Street as “vulture” investors, have each written checks for one million dollars to Restore Our Future, the Super PAC supporting Romney’s candidacy.

Gov. Romney last week asserted that the Obama Administration’s support for General Motors was a, “payoff for the auto workers union.” However, union workers in GM’s former auto parts division, Delphi, the unit taken over by Romney’s funders, did not fare so well. The speculators eliminated every single union job from the parts factories once manned by 25,200 UAW members.

The two hedge fund operators turned a breathtaking three-thousand percent profit on a relatively negligible investment by using hardball tactics against the US Treasury and their own employees.

Under the control of the speculators, Delphi, which had 45 plants in the US and Canada, is now reduced to just four factories with only 1,500 hourly workers, none of them UAW members, despite the union agreeing to cut contract wages by two thirds.

It wasn’t supposed to be quite so bad. The Obama Administration and GM had arranged for a private equity investor to provide half a billion dollars in new capital for Delphi, but that would have cut the pay-out to Singer and Paulson. The speculators blocked the Obama-GM plan, taking the entire government bail-out hostage. Even the Wall Street Journal’s Dealmaker column was outraged, accusing Paul Singer of treating the auto company, “like a third world country.”

But it worked. Singer and Paulson got what they demanded. Using US Treasury funds:

• GM agreed to pay off $1.1 billion of Delphi’s debts,
• forgave $2.15 billion owed GM by Delphi (which had been spun off as an independent company)
• pumped $1.75 billion into Delphi operations, and
• took over four money-losing plants that the speculators didn’t want.

If those plants had been closed, GM factories would have shut down cold for lack of parts.

Then there was the big one: The US government agreed to take over $6.2 billion in pension benefits due Delphi workers under US labor law.

Governor Romney, while opposing the bail-out of GM, accused Obama of eliminating the pensions of 21,000 non-union employees at Delphi. In fact, it was Romney’s funders who wiped out 100% of the pensions and health care accounts of Delphi salaried retirees­­.

Paulson and Singer paid an average of about 67 cents a share for Delphi. In November, 2011, Paulson sold a chunk of his holdings for $22 a share. Paulson’s gain totals a billion and a half dollars ($1,499,499,000), and Singer gained nearly a billion ($899,751,000) –– thirty-two times their investment.

One-hundred percent of this gain for the Paulson and Singer hedge funds is accounted for by taxpayer bail-out support.

But, unlike the government loans and worker concessions given to GM, the US Treasury and workers get nothing in return from Delphi.

From GM, the US Treasury got warrants for common stock (similar to options) that have already produced billions in profit.

And Delphi? It’s doing well for Paulson and Singer. GM and Chrysler, still in business by the grace of the US Treasury, remain Delphi’s main customers, buying parts now made almost entirely in China and other cheap-labor nations.

And exactly who are Paulson and Singer?

Billionaire John Paulson became the first man in history to earn over $3 billion in a single year –– not for his hedge fund, but for himself, personally. At the core of this huge payday was a 2007 scheme by which, via Goldman Sachs, he sold “insurance” on subprime mortgage loans. According to a lawsuit filed by the Securities Exchange Commission, Goldman defrauded European banks by pretending that Paulson was investing in the insurance. In fact, Paulson was, secretly, the beneficiary of the insurance, reaping billions when the mortgage market collapsed.

Goldman paid half a billion dollars in civil fines for the fraud. While the SEC states that Paulson knowingly participated in the scheme, he was not fined and denies he defrauded the banks.

Multi-billionaire Singer is known as Wall Street’s toughest “vulture” speculator. Vulture fund financial attacks on the world’s poorest nations have been effectively outlawed in much of Europe and excoriated by human rights groups, conduct Britain’s former Prime Minister Gordon Brown described as, “morally outrageous.”

***
Greg Palast has been investigating vulture speculator Paul Singer for BBC Television Newsnight and Britain’s Guardian for five years. The investigative reporter is author of Vultures’ Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores and the New York Times bestseller, The Best Democracy Money Can Buy. For reports on Singer and vulture funds, go to www.GregPalast.com and www.VulturesPicnic.org.

You can follow Palast on twitter at Greg_Palast and find him on facebook at Greg Palast.

Greg Palast is available for media - contact Julia at Jwouk (at) boothmedia.com

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The Plan is working.

Mitt Romney's biggest backer didn't want him to win.

We know that Paul "The Vulture" Singer, Romney's Daddy Warbucks, organized the "grassroots" campaign to replace Romney with Gov. Chris Christie back in September.

That flopped, so Singer and the billionaire boys' club that courted Christie moved over to Romney. Not that they had a choice. They knew Moonrocks Gingrich, who thinks he's running for Master Jedi, and Saint Santorum who thinks he's running for pope, would end up road kill in November.

But despite their million-dollar checks for Romney's campaign, the billionaires are handling the ex-governor with very long and slippery tweezers. The fact that Singer and the Koch brothers went on bended knee to Christie means they are just nauseated over Romney, a man losing a war with the English language and his own tax returns, carrying their standard against President Obama.

These billionaires are smart men. Devious men. I've followed them for years, and they do nothing in a straight line. The super PAC that Singer and the gang control, Restore Our Future, is supposed to be for Romney. But it's not; it's for Singer and Bill Koch. The future they want to restore is their own, not yours or mine - or Romney's.

Now, if your ultimate goal is to beat Obama and you need Christie to do it, you want the GOP race to end in a brokered convention. Then, the billionaires become the brokers. In the best of all worlds for these super PAC men, no candidate gets the 1,144 delegates needed to win. Restore Our Future can then restore the nomination to Christie (or, say, Sen. Marco Rubio, or both), someone who can win.

So, think about it. The Singer-Koch super PAC has access to more money than Fort Knox. It has raised over $30 million and has left as much as half sitting unspent. Yet, they didn't bother to run major ads in cheap media markets like Grand Junction, letting Romney go down in Colorado by less than 4,000 votes.

For a few bucks, they could have sealed it for Governor Romney this week. But they chose not to. Why?

By moving money in and out of selected primaries like a piston, Restore Our Future can shoo Santorum and Gingrich away from the nomination - and, with a bit of luck, the Romney campaign ends up in Tampa dead on arrival.

Then the Vulture and the Richie Rich Club can gnaw at Romney's political corpse and regurgitate the nomination for the cat's paw of their choice.

****

Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, released in the US and Canada by Penguin.

You can read Vultures' Picnic, "Chapter 1: Goldfinger," or download it, at no charge: click here.

Support the Palast Investigative Fund and keep our work alive.
Subscribe to Palast's Newsletter and podcasts.
Follow Palast on Facebook and Twitter.

GregPalast.com

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