Greg Palast Defies Publishers, Speaks in San Diego

New Book “Armed Madhouse” Offers Dark View of Present-Day America

by MARK GABRISH CONLAN

Copyright © 2006 by Mark Gabrish Conlan for Zenger’s Newsmagazine • All rights reserved

Independent journalist, economist and activist Greg Palast opened his talk at the First Unitarian-Universalist Church in Hillcrest June 10 by announcing that the publishers of his new book, Dutton, had told him not to bother stopping in San Diego on his book tour. “I said, ‘I’m not going to visit all of San Diego, just Activist San Diego,’” Palast told his publisher — making a pun on the name of one of the organizations that sponsored his local appearance. He announced that he was donating all his author’s royalties on copies of the book sold that day to Activist San Diego, which promoted his appearance in partnership with the church’s Peace and Democracy Action Group, and thanked two of Activist’s principal organizers, Martin Eder and Tanja Winter, by name not only in his speech but in the book itself.

Palast’s speech was a mixture of familiar themes from his last book, The Best Democracy Money Can Buy, explored again and updated in his new one — to which he’s given the breath-challenging title Armed Madhouse: Who’s Afraid of Osama Wolf?, China Floats, Bush Sinks, The Scheme to Steal ’08, No Child’s Behind Left, and Other Dispatches from the Frontline of the Class War. Among them were the frauds used by the Republicans to win both the 2000 and 2004 Presidential elections by disqualifying massive numbers of voters in poor precincts; the business connections between the oil industry and the Bush administration that, he argued, led not only to the U.S. decision to invade and conquer Iraq but the way the postwar occupation was handled; and the real reasons the U.S. wants to get rid of Venezuelan President Hugh Chávez.

But, though Palast’s speech ended with a typical exhortation to get out and vote — “They’re going to take away five million votes this time, so we’re going to take six million new people to the polls,” he said — his book Armed Madhouse is considerably more cynical than he was in person. While much of the book merely expands on the themes in his stump speech, it also acknowledges that even if America’s progressive get those six million people registered and voting, there aren’t that many genuine alternatives for them to vote for. Though Palast is surprisingly sympathetic towards H. Ross Perot, whose independent campaign for President in 1992 got 19 percent of the vote nationwide, he’s well aware that the two-party structure built into the fabric of America’s political and electoral structure means that the only serious competitor to the Republican Party is the Democratic Party — and throughout the book Palast portrays the Democrats as either missing in action on the great battles of the day or, worse, actively complicit with the Republicans.

Democratic Villains

Palast’s list of Democratic villains is long and inglorious. The most prominent is Al Gore, who according to Palast almost singlehandedly drove the economically populist, socially conservative Perot voters solidly into the Republican camp. It happened, he said in Armed Madhouse, on one night — November 9, 1993 — when he and Perot appeared on Larry King Live to debate the North American Free Trade Agreement (NAFTA). “Seven years before the ‘Battle in Seattle’ at the World Trade Organization confab, Perot went after ‘free trade,’ the cornerstone of the new economic Darwinism,” Palast wrote. “Perot alerted the nation that the wealthy had joined forces to cut your jobs and wages, to pit Detroit against [the maquiladoras in Ciudad] Juárez, in a competition to the bottom. His message woke up working-class Republicans by the millions: those guys in the mailroom and behind the lunch counter who voted Republican because of the corporate party’s platform of no abortion, no flag burning, no homosexuals and lots of country music. Perot told them to ‘think jobs’ instead.”

In his book, Palast recalled just how Gore responded to Perot’s challenge to the “free trade” orthodoxy of both major parties. “Perot and his 19.7 million workers who feared for their pensions and union cards were called ignorant fools, suckers for labor union fear-mongering, confused, economic dummies, and cowards before history,” Palast wrote. “Gore, the rich prep-school kid, looked so pleased with himself, taunting the funny little man who’d made his way up from the working class. And 19.7 million Americans knew Gore was making fun of them, too, telling textile workers losing their health insurance they were unsophisticated little schmucks who knew nothing about economics. … Gore followed his put-down of labor unions, which unanimously opposed NAFTA, with praise for Rush Limbaugh as a ‘distinguished American’ (really) and accolades for NAFTA-backer Lee Iacocca, chairman of Chrysler Motors. Gore didn’t mention that Iacocca had moved Chrysler engine assembly work to Mexico in anticipation of NAFTA. But the unemployed Chrysler workers knew that.”

Also on Palast’s list of Democratic villains are New Mexico Governor Bill Richardson — a former member of President Clinton’s Cabinet and a partner in Henry Kissinger’s firm, Kissinger Associates — and Secretary of State Rebecca Vigil-Giron, who he claims allowed local Republican elections officials systematically to disenfranchise Native American voters and others likely to vote Democrat for President in this closely contested “battleground state.” The reason Richardson and Vigil-Giron let the Republicans get away with it, according to Palast, was to win an internal battle for control of the New Mexico Democratic Party. Since delegates to state and county Democratic conventions in New Mexico are allocated according to the percentage of the vote for the Democratic Presidential candidate in each precinct, Palast argued, Richardson’s machinations around the election — which included signing a bill requiring anyone who wants a recount of a state election to post a bond of over $1 million — were aimed mostly at getting his principal political rival, State Senator Linda Lopez, out of her position as Democratic state chair. “The ballot they shot at Lopez hit [Democratic presidential nominee John] Kerry between the eyes,” Palast wrote.

Ohio’s Third-Sex Voters

Palast’s main topics at the First Unitarian-Universalist Church were election fraud and the real motives for the war in Iraq — both treated in depth in his book as well. He cited Donna Frye’s loss in the 2004 mayoral election in San Diego — she actually got more votes than either of the other candidates, Dick Murphy or Ron Roberts, despite the handicap of running as a write-in, but was denied the victory because some of her voters had written her name but hadn’t filled in the bubble hole beside the write-in blank — as an example of the “spoiled ballot” phenomenon, by which a ballot where the voter’s intent is clear is nonetheless disqualified for a stray mark where one shouldn’t be, no mark where one should be, or some other insignificant violation of elections rules. “The one investigation that keeps coming back is how American democracy works, or doesn’t,” Palast said.

He cited CNN exit polls on the day of the 2004 election which indicated that Kerry was leading Bush 51 to 49 percent among men and 53 to 47 percent among women. “So here’s your question, class: what third sex put George Bush over the top in Ohio and gave him the White House? Answer: the uncounted,” Palast wrote in Armed Madhouse. “The nasty little secret of American democracy is that, in every national election, ballots cast are simply thrown in the garbage — millions of them. Most of them are called ‘spoiled,’ supposedly unreadable, damaged, invalid. They just don’t get counted. In Ohio, there were 133,237 ballots simply thrown away, more than the Bush ‘victory’ margin. In New Mexico the uncounted vote was five times the Bush alleged victory margin of 5,988. In Iowa, Bush’s triumph of 13,498 was overwhelmed by 36,811 votes rejected. In all, over three million votes were cast but never counted in the 2004 Presidential election.” [Emphasis Palast’s.]

This wouldn’t be much of a problem if the voters whose ballots were rejected— the ones who cast “spoiled” ballots, the ones who were challenged at the polls but allowed to cast “provisional” ballots which were discarded uncounted, the over half a million absentee voters whose ballots were simply shredded, and the continuing disqualification of voters for being convicted felons (even if their only “crime” was allegedly committed years in the future, as happened to some of the supposed “felons” barred from voting in Florida in 2000) — broke the same way politically as those whose ballots were counted. But Palast said that’s hardly likely.

“I used to be a professor of statistics,” Palast said, “and I and a team of statisticians went through the precincts with ‘spoiled’ ballots to see where they came from. The probability of your vote not getting counted is 900 percent higher for African-Americans, 500 percent higher for Latinos and over 2,000 percent higher for Native Americans than for whites. Eighty-eight percent of the 3.6 million uncounted votes were cast by minority voters.” One place Palast went to investigate the phenomenon of disappearing voters of color was Precinct 13 in Taos, New Mexico, better known as the Taos Pueblo, where “every single voter is either a Native American or married to one,” he wrote in Armed Madhouse.

According to the official results of the 2004 elections — the ones a Democratic governor and secretary of state chose not to challenge — “tens of thousands of Native Americans showed up to vote, waited in line for hours, didn’t cast a vote for President, and walked out,” Palast explained. “So I dropped in on Taos, Precinct 13, and asked Ruben Romero, who holds the grand title of Governor and War Chief of the pueblo, ‘Why can’t you people do something as simple as pick a president?’” Palast wrote in Armed Madhouse. “The War Chief ignored my deliberate provocation. Unflappable, in his slow, rhythmic English, he explained, ‘We thought they knew about these sophisticated things, so we trusted them.’ By them he meant the local, politically hostile white officials from the country who wheeled in new machines before the vote. He was resigned to it.”

Palast also talked to Taos Pueblo “Head of Tourism” Richard Archuleta, who mentioned that virtually all the young men from the Taos Pueblo join the U.S. military — and that virtually all the registered voters from the Pueblo are Democrats. “On the Pueblo’s mud-brick walls there were several hand-painted signs announcing Democratic Party pow-wows, none for Republicans,” Palast said. “Richard showed me where the Ketchup Queen herself, First Lady wannabe Teresa Heinz Kerry, had stopped and had lunch before the election. Laura Bush wouldn’t do that. Indecisive? Indians are Democrats. Case closed, white boy.” [Emphasis Palast’s.]

Homeless Republican Donors

At his First Unitarian-Universalist Church lecture, Palast also explained how the Congressional Black Caucus got suckered into supporting the so-called Help America Vote Act (HAVA), passed in 2002, which allowed voters whose credentials were challenged at the polls to cast so-called “provisional” ballots. “The Congressional Black Caucus thought no more than 100,000 people would get provisional ballots,” he said. “In fact, three million voters got provisional ballots and almost two million of those were thrown out.” Much of Bush’s “victory” margin in Ohio came from voters who showed up at the “wrong” precinct to vote, Palast explained. Until HAVA, the voters at the “wrong” precincts — sometimes meaning the wrong card table in a large school gymnasium where many precincts’ voters were casting ballots — could still cast ordinary, countable ballots as long as they were legally registered. That changed in 2004. “Under HAVA, all voters in the wrong precincts had to be given provisional ballots,” two-thirds of which weren’t counted, Palast said.

One reason there were three million provisional ballots in the 2004 election was because the Republican Party pursued an aggressive strategy of challenging voters of color and others considered likely to vote Democrat. “I wasn’t sure that happened until I got this in my e-mail inbox at georgewbush.org,” Palast explained. Two friends of his had registered that domain in hopes that they might get e-mails meant for the official Bush campaign at georgewbush.com — and they hit paydirt when they got an e-mail from Tim Griffith, research director and deputy communications director for the Bush campaign. It was sent to all Republican state party chairs throughout the country, and it contained attachments with long lists of names, addresses and phone numbers of voters — 98 percent of them from majority African-American precincts in Florida.

Asked by his bosses at the British Broadcasting Corporation (BBC) to go to the Republicans for confirmation that the documents were authentic, Palast got the door slammed in his face at national Republican headquarters in Washington, D.C. but he got an explanation from Florida Republican public relations director Joseph Agostini. According to Agostini, the lists were potential donors to the Bush-Cheney re-election campaign — which didn’t ring true because not only were the addresses in poor, largely African-American neighborhoods, some of them were from a homeless shelter in Tallahassee.

Agostini’s boss, Mindy Tucker Fletcher, had a different explanation. “These are newly registered voters we mailed to, where the letter came back — bad addresses,” she told Palast. After Palast’s team stumbled on these so-called “caging” lists in Tallahassee, “more confidential Republican National Committee caging lists poured in: hit lists of African-American voters, including students of Edward Waters College, an African-American school, and the Jacksonville State Street Rescue Mission (more Bush campaign donors, Mr. Agostini?),” Palast wrote in Armed Madhouse.

In his book, Palast explained how the “caging” system worked: “Voters in Black precincts made the list if a first-class letter sent to them was returned — they could then be challenged based on an address change. We checked one list that included 50 Black soldiers. We called one, Randall Preusa. His wife indicated that his address had changed because he was shipped overseas. Go to Baghdad, lose your vote. A Black soldier’s vote gone. Nice. Mission accomplished.” Despite the fact that “caging” was illegal under the 1965 Voting Rights Act, the Republicans did it anyway, Palast said — not only in Florida, but in Ohio, Pennsylvania, Michigan and Wisconsin. Nor did they have to worry about being prosecuted — not with the American justice system safely in the hands of then-attorney general John Ashcroft, Mindy Tucker Fletcher’s former boss.

Iraq: The War for No Oil

One of the most contrarian parts of Armed Madhouse has to do with the war in Iraq and its real motivations. According to Palast, the war was indeed fought for Iraq’s oil — but not in the way most progressives believe. Besides chronicling the dispute within the American ruling elite over how to get rid of Saddam Hussein and what sort of government to put in his place — whether to foment a quick military coup or launch a full-scale invasion and a lengthy occupation — he argued that the real purpose of the Iraq war was not to gain access to Iraq’s oil, but quite the opposite: to keep Iraqi oil out of the world market altogether so oil prices would skyrocket and the world’s oil giants would make record-breaking profits.

Palast’s key clue, he explained, was a 323-page document, “Options for a Sustainable Iraqi Oil Industry,” which he traced back to all-purpose Republican fixer James Baker III, who in addition to having been secretary of state and White House chief of staff under Reagan and Bush, Sr. is also the attorney for Exxon/Mobil and the Carlyle Group, and a legal representative of the government of Saudi Arabia who has an office inside the White House. “In a 320-page document, the oil companies said they wanted to ‘enhance the Iraqi government’s relationship with OPEC,’” Palast explained. OPEC, for those who weren’t alive in the 1970’s or slept their way through them, is the Organization of Petroleum Exporting Countries, the international cartel that controls the price of crude oil — and Saudi Arabia, the world’s largest exporter of petroleum, runs the cartel and brooks no rivalry from its other members.

“Saudi Arabia establishes a quota for every other OPEC nation: you produce this much and no more,” Palast explained. “It keeps down the supply of oil, and therefore keeps up the price. Iraq has almost as much oil as Saudi Arabia, but its quota is four million barrels a day. It could produce six million. Before the war, the U.S. kept Saddam Hussein to two million barrels a day.” According to Palast, the strategy to go to war against Iraq to bolster the OPEC cartel was hatched in James Baker’s offices in Houston, and one participant was Ken Lay, then founder and chief executive officer of Enron and now a convicted felon. Palast said that Baker, Lay and their fellow conspirators decided to get rid of Saddam Hussein because he was “jerking” the oil supply, raising and lowering his production to try to break OPEC and get more oil revenue for his country.

According to Palast, keeping Iraq’s oil production well below its potential has been part of the Western world’s plan for that country “ever since Winston Churchill invented Iraq in 1920 by drawing a circle around the oil fields in Kirkuk and Basra and the oil-bearing tar sands near Baghdad.” Aside from launching a poison-gas attack against the Kurds who resisted incorporation into Iraq and wanted independence (“I am strongly in favor of using poisoned gas against uncivilized tribes to spread a lively terror … against recalcitrant Arabs as an experiment,” Churchill wrote at the time in a memo Palast quotes in Armed Madhouse), Churchill installed a Hashemite Jordanian, Prince Faisal (the character Anthony Quinn played in the film Lawrence of Arabia) as king of Iraq, and in 1925 Faisal gave exclusive rights to all Iraq’s oil to a sham company headed by Calouste Gulbenkian.

According to Palast, Gulbenkian became known as “Mr. Five Percent” because he immediately “flipped” 95 percent of Iraq’s oil business to a consortium of the West’s biggest oil companies — Anglo-Persian (now British Petroleum), Standard Oil (now Exxon/Mobil), Royal Dutch Shell and the French company CFP. “The oil majors had a better use for Iraq’s oil than drilling it — not drilling it,” Palast wrote in Armed Madhouse. “The oil bugs had bought Iraq’s concession to seal it up and keep it off the market.” Palast describes a bizarre series of maneuvers to keep Iraq’s oil sealed up and off the market from that day to this, including drilling sham wells that were virtually certain not to produce.

In 1961, Iraq’s nationalist Ba’athist government nationalized its oil fields and threatened a takeover of neighboring Kuwait. (A TV documentary on the first President Bush, shown in 1992, revealed that he was in the Persian Gulf during this dry run for the 1991 Gulf war — on board a British Petroleum tanker.) President Kennedy talked the British out of invading Iraq, but, according to Palast, “the freedom Kennedy offered the Iraqis to drill their own oil to the maximum was quickly taken away from them by their Arab brethren. The OPEC cartel, controlled by Saudi Arabia, capped Iraq’s production at a sum equal to Iran’s, though the Iranian reserves are far smaller … To keep Iraq’s Ba’athists from complaining about the limits, Saudi Arabia simply bought off the leaders by funding Saddam’s war against Ian and giving the dictator $7 billion for his ‘Islamic bomb’ program.”

Palast argued that Iraq’s next move — the 1990 seizure of Kuwait — was provoked not only by internal politics within OPEC but also by Kuwait’s siphoning off Iraq’s oil reserves through slant-drilling into Iraqi territory on the border. The result was a disaster for Iraq, which from 1990 to 2003 was subjected to the most restrictive regime of economic sanctions ever imposed on a single country by the rest of the world. The burden of sanctions was lifted somewhat in 1996 by the so-called “Oil for Food” program, which served the interests of the major oil companies by restricting Iraq’s production still further — from four million barrels a day before the war to two million. Since the U.S. invasion, Palast said, Iraq’s oil production has fallen even lower than that. “Whether by design or happenstance, this decline in output has resulted in tripling the profits of the five U.S. oil majors to $89 billion for a single year, 2005, compared to pre-invasion 2002,” Palast wrote in Armed Madhouse — and if you’re wondering who’s funding those profits, just look at the price board on any gas station.

Palast Debunks “Hubbert’s Peak”

Though he didn’t go into this in his First Unitarian-Universalist Church appearance, in Armed Madhouse Palast took on what’s become an article of faith among many progressives, particularly environmentalists: the idea that the world is running out of oil. Virtually all the “end of oil” theories can, he argued, be traced back to a single paper, presented in 1956 by Shell Oil geologist M. King Hubbert. Hubbert’s paper estimated the world’s total oil reserves at 1.25 trillion barrels and predicted they would run out in 2006. It included a graph with a somewhat lopsided bell-shaped curve that’s become known as “Hubbert’s Peak” because it purported to show how oil use would rise as discoveries of new fields declined, leading to a “peak” in 2000 and eventual exhaustion of the world’s oil supplies.

According to Palast, Hubbert’s paper — prepared by him as a Shell company man and first presented to a meeting of the American Petroleum Institute — had two uses as propaganda. First, at a time when the price of oil was $2.77 a barrel and falling, it justified higher oil prices by presenting petroleum as a scarce resource. Second, it promoted the unlimited development of nuclear energy as an alternative — not coincidentally, just after Shell had just launched Urenco, a consortium to enrich uranium for nuclear power plants — and argued that nuclear could meet the world’s energy needs for the next 5,000 years.

Palast’s analysis claims that Hubbert’s end-of-oil theory not only served the interests of his employers but has proven to be flat-out wrong. “Worldwide oil reserves continue to rise even faster than American and China can burn it,” he wrote in Armed Madhouse. “Since 1980, reserves, despite our binge-guzzling, have risen from 648 billion to 1.2 trillion barrels. Yet, weirdly, despite the rising flood of discovered crude, its price quadrupled between 2001 and 2005.” Why? Palast named five factors: the U.S. invasion of Iraq and the resulting “insurgency” and civil war; Russia’s takeover of Yukos Oil, which cut its output; “U.S.-promoted sabotage of oil piping, loading and refining systems in Venezuela”; a cutback of production by Saudi Arabia to maintain their power as the prime mover in OPEC; and the U.S. abandonment of conservation as an energy policy since Bush took office in 2001.

Indeed, Palast’s critique of Hubbert runs so far against the grain of progressive thought that he felt compelled to include an appendix to his book partially rehabilitating Shell’s geologist. Hubbert’s 1956 paper acknowledged that his “end of oil” prediction applied only to the world’s primo petroleum: the so-called “light, sweet crude” that comes out of Saudi Arabia and is the benchmark against which all the rest of the world’s oil is priced. Once the price of oil rises, it becomes economically feasible to exploit the heavy tar-like crude found in abundance in three places in the world: Iraq (especially the central third of the country around Baghdad, the part that doesn’t contain any light, sweet crude), Brazil and Venezuela.

According to Palast, if you count heavy oil tar, Venezuela, not Saudi Arabia, has the world’s largest reserves of crude. “There are questions about how much crude Saudi Arabia has left, but Venezuela has more oil than all the Arabian Peninsula put together,” he told his First Unitarian-Universalist audience. “If you had more oil, you would bring down the price — but you would also bring down the House of Saud and the little house of Bush. That’s why we have to kill [Venezuelan president] Hugo Chávez.” Palast noted in his book that Chávez has not only been offering cut-rate oil to his South American neighbors and using the proceeds from the rising cost of petroleum to benefit Venezuela’s poor — “in the 1970’s the Venezuelan oil money went to Miami and the Venezuelans got cardboard houses; today they’re brick houses,” Palast explained — he’s also threatening the International Monetary Fund’s control of the developing world’s economies and even offering foreign assistance to communities of color in the U.S.

“It was the Wall Street Journal that dubbed Chávez ‘a tropical version of the International Monetary Fund, offering cut-rate oil supply deals and buying hundreds of millions of dollars of bonds from financially strapped countries such as Argentina and Ecuador,’” Palast wrote in Armed Madhouse. “The un-tropical International Monetary Fund was not amused, nor were money center banks of New York and London. Petro-dollars are supposed to move from Venezuela to New York and only then return to Latin America as loans carrying interest rates up to 16 percent. … And to underscore the point, Chávez traveled to more Third World nations with gifts of low-cost oil: the Bronx, New York and Chicago’s West Side. In September 2005, Chávez offered these poor racial Bantustans … discounted heating oil through CITGO, the U.S. retail outlet of Venezuela’s oil company. A public relations gimmick? Undoubtedly. But Chávez is making a point. The public, American public included, does not have to remain hostage to the Saudi-Houston cartel.”

According to Palast, Chávez also stepped in — or tried to — to help New Orleans recover from Hurricane Katrina. “He swiftly ordered the federal government to dispatch to New Orleans 18 water purification units, 50 tons of food, two mobile hospitals, expert search teams, and 20 lighting units with generators,” Palast wrote in Armed Madhouse. However, … [this] equipment was refused entry to the disaster zone by the U.S. State Department. President Bush also flew in generators and lights. They were used for a photo op in the French Quarter, then removed when the President concluded his television pitch.”

Where’s the New Kingfish?

Along with H. Ross Perot and Hugo Chávez, one unlikely member of Palast’s pantheon of heroes is the late Huey Long, nicknamed the “Kingfish,” who rode nature’s last near-annihilation of New Orleans — the Mississippi River floods of 1927 — to election as Louisiana governor and nationwide fame for his demands for a sweeping redistribution of wealth and income in the U.S. Though he met the fate televangelist Pat Robertson called to be meted out to Chávez — Long was assassinated in 1935 just as he was planning an independent run for President on a “Share-the-Wealth” ticket — many of Long’s ideas, including unemployment insurance and Social Security, became part of President Franklin Roosevelt’s New Deal and helped make the Democrats the majority party in the U.S. from 1932 to 1968.

Despite his skewering of pro-corporate and pro-war Democrats in his book, Palast clearly thinks that progressive programs will emerge from the Democratic Party if the people rise up and demand them. That was the message behind the peroration with which he concluded his First Unitarian-Universalist Church speech. “What are you going to do about this, about the attack on our kids in the classroom [an issue Palast only briefly referenced in his speech but discussed in far greater detail in his book’s critique of what he calls the “No Child’s Behind Left” act], about the fact that they are stealing elections and you can see where they’re heading in 2008?”

Palast recalled a meeting he had with African-American leaders, including Martin Luther King III — eldest son of the late civil-rights hero — in which King said, “I’m going to take your book and put it on my father’s grave.” “I was very moved, “ Palast recalled, “but I said, ‘You’re just going to get the book dirty.’ Jesse Jackson said, ‘When we march, we win. If we don’t march, we do lose.’ So I said, ‘Let’s march down Pennsylvania Avenue.’ He said, ‘Register people and vote.’ It sounds simple, but right now it’s revolutionary.”