Tough for gay members to return to full military

Associated Press, by JULIE WATSON,  Aug 13, 2011

SAN DIEGO (AP) -- Former Air Force officer Michael Almy's five-year battle to get back into the military after being discharged for being gay is still far from over despite the end of the policy that halted the decorated war veteran's 13-year career and left him curled up on his bathroom floor, crying.

The repeal of "don't ask, don't tell" coincides with the most competitive time in recent history to get into the military because of the sluggish economy, and the Defense Department says it has no plans to give priority to those discharged for being gay, even if they still meet the military's age limits, fitness standards and cutoffs for time out of service.

Many, like Almy, a 41-year-old former Air Force major, see the only way back to active-duty as being through the courts.

He and two other discharged officers - one from the Air Force officer and one from the Navy - are suing the Justice Department to demand they be reinstated, and they hope a federal appeals court will help their efforts by upholding a lower court ruling last year that declared the law unconstitutional.

Activists believe if the ruling stands it could open the legal doors for a class-action suit or settlement for many of the nearly 14,000 military members discharged under the nearly 18-year-old policy that prohibited the military from asking about the sexual orientation of service members but required discharge of those who acknowledged being gay or were discovered to be engaging in homosexual activity.

"The sad truth is repeal really does nothing for people thrown out of the military," Almy said. "There is no restitution, no reparations, no special personnel process to help those to get back in the military who were thrown out."

Almy said he never admitted to the military he was gay, but was discharged under the policy in 2006 after a service member snooped through his emails on a government-issued computer in Iraq when Almy's deployment there ended.

Almy testified for the Log Cabin Republicans at a trial last year. U.S. District Judge Virginia Phillips temporarily halted the policy after the trial, declaring the law violated the constitutional free speech and due process rights of gay military members.

Shortly before being honorably discharged, Almy was recognized as one of the top officers in the Air Force for his leadership skills in running an exemplary unit that helped maintain control over the vast majority of Iraq's air space during the war.

Even after his discharge, his wing commander formally recommended to the Air Force promotion board that he be promoted to lieutenant colonel, ahead of his peers, because of his outstanding performance, according to his testimony under oath.

Almy estimates his discharge cost him $1.5 million in retirement benefits, the amount he says he would have received if he had been allowed to complete his 20 years in the service.

Dan Woods, an attorney for the Log Cabin Republicans, said if the lower court ruling is upheld by the U.S. 9th Circuit Court of Appeals it could bolster the cases of thousands of former service members, like Almy, who "are still suffering the collateral consequences of being discharged under this unconstitutional law."

"A lot of people lost opportunities for promotion, a lot people might want to re-apply but can't because now they're too old," Woods said. "Those people ought to have the right to use our case to try to get their discharged status changed, or to try to get reinstated, or try to get back pay."

Woods said the Obama administration wants his case dismissed because it does not want "to deal with some 14,000 people making claims for back pay and reinstatement. That's really what it's about."

Justice Department officials declined to comment. DOJ attorneys have argued in their court filings that the lower court made its decision before the repeal process began and that repeal of a statute invalidates such constitutional challenges.

The 9th Circuit will hear arguments from both sides Sept. 1 at a hearing in Pasadena, Calif.

The law is scheduled to be abolished Sept. 20. But if the policy's fallout is still having an impact on people's lives then the court could still rule on the constitutionality of the case, said Erwin Chemerinsky, University of California, Irvine's law school dean.

For Almy, the victory of repealing the policy has been bittersweet as he celebrates for today's gay service members while struggling to get back the life he feels was stolen from him. "To get back on active duty is really next to impossible without the lawsuit," he said.

The Defense Department has said that the negative re-entry codes on the discharge paperwork of those kicked out under the policy will be waived, and that applicants with honorable discharges will be treated like other prior service applicants and accepted based on need. But that need is dwindling.

Traditionally, the military services bring in prior-service recruits for certain specialties, but even those positions are far fewer today, said Defense Department spokeswoman Eileen Lainez. The percentage of prior-service members among the active-duty recruits has dropped from 5 percent to 3 percent.

All military branches are at full capacity as people flock to the military for jobs or choose to stay in longer. With budget tightening and the expectation the Afghanistan war is winding down, the branches plan to trim their numbers.

The Army is looking to cut 22,000 starting in October after getting a temporary surge in troops in 2009, while the Marine Corps plans to slim down from 202,000 down to 186,000 in the next few years.

The Navy will cut 3,000 officers in the next few months because the promotion lines are so clogged "there is no place for anybody to go," Navy Adm. Gary Roughead, the chief of naval operations, told The Associated Press. The Air Force at the same time is going to start letting go several hundred of its 9,000 officers.

Jenny L. Kopfstein said she applied in March to be a Navy attorney but was turned down.

The former decorated Navy officer from San Diego, who has testified three times about her 2002 discharge, said she doesn't know if she was rejected because "don't ask, don't tell" is still in place or because there were no positions available for her.

She's going to try again in the fall but time is running short for the 36-year-old to meet the military's age limits. If she doesn't get in, Kopfstein said she might become a civilian lawyer who works with the military or another kind of government attorney.

Almy said he is not ready to let go of his dream.

"This is what I had dedicated all my life to doing," said Almy, who followed in the footsteps of his father and uncles, all former Air Force officers. "That's where my heart is. That's what my passion is - to be an officer, a leader in the Air Force. I miss the missions, the camaraderie, the esprit de corps."

"I never had a desire to do anything else when I was growing up, and I still don't to this day," he said.

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About the Challenges of Being a Gay Man – Oct 23, 2010 (Saint Germain channelled by Alexandra Mahlimay and Dan Bennack) - “You see, your Soul and Creator are not concerned with any perspective you have that contradicts the reality of your Divinity – whether this be your gender, your sexual preference, your nationality – or your race, ethnicity, religious beliefs, or anything else.”

"The Akashic System" – Jul 17, 2011 (Kryon channelled by Lee Carroll) - (Subjects: Religion, God, Benevolent Design, DNA, Akashic Circle, (Old) Souls, Gaia, Indigenous People, Talents, Reincarnation, Genders, Gender Switches, In “between” Gender Change, Gender Confusion, Shift of Human Consciousness, Global Unity,..... etc.)  New !

Market rout spawns calls for outside-the-box remedies

Reuters, by Alan Wheatley, Global Economics Correspondent, LONDON, Tue Aug 9, 2011

Traders work on the floor of the New York Stock Exchange,
August 5, 2011. (Credit: Reuters/Brendan McDermid)

(Reuters) - In a sign of the harm that tumbling markets are doing to the global economy, calls multiplied on Tuesday for a concerted campaign of bold policy-making to stop the rot.

Globally coordinated asset purchases, debt relief for under-water U.S. home owners, a cut in euro zone interest rates and a reduction in Chinese banks' required reserves were just some of the ideas aired to cut the negative feedback loop of a 10-day slide in world share prices that has fanned fears of a new recession.

"We're in a situation where sentiment is so very badly damaged that everything should be on the table in terms of policy options to tackle the crisis," said Mark Cliffe, chief economist at ING Bank in Amsterdam.

"Almost anything is worth a try," he added.

The obstacles to a policy "grand bargain" are well known. Interest rates in many countries are already near zero, while governments are under market and political pressure to borrow less, not more.

China has no appetite to let the yuan rise, which would stoke export-led growth in the United States and elsewhere. In Europe, critics blame the European Central Bank and Germany for deepening the euro zone's debt crisis by opposing radical proposals to bail out indebted members of the bloc's periphery.

It is a measure, then, of the sudden deterioration in global growth prospects that economists are urging policy makers to think outside the box to get round these constraints and make good on their repeated promises to cooperate to ensure financial stability.

"Should we be dished up half-hearted and lukewarm measures, the markets will give a decisive thumbs-down and central banks will be pressed to do more later -- in less favorable circumstances," said Paul Mortimer-Lee, global head of market economics at BNP Paribas in London.

WAITING FOR THE FED TO LEAD

All eyes for now are on Tuesday's policy meeting of the Federal Reserve. The consensus is that the U.S. central bank will not launch a third round of asset purchases -- quantitative easing (QE) in market jargon -- but could well lengthen the maturity of its government bond holdings and reinforce its pledge to keep monetary policy ultra-loose for much longer.

Mortimer-Lee said such an outcome would be worthy but insufficient. What is needed, he said in a note, is coordinated QE from the United States, Britain, the euro zone and Japan to increase liquidity and stimulate demand for risk assets.

Keep markets awash with cash is always a priority for policy makers when markets are stressed. If banks hoard money and refuse to lend to each other, the wheels of the economy can grind to a halt.

To that end, Mortimer-Lee said overnight money market rates should be allowed to fall below central banks' official policy rates. He also advocated joint central bank intervention to prevent a further destabilizing rise in the Japanese yen and Swiss franc.

Harvard University economics professor Kenneth Rogoff agreed that both the Fed and the ECB ideally would adopt expansionary policies to keep exchange rates on an even keel.

Writing in the Financial Times, Rogoff also advocated very large debt write-downs in the smaller countries on the edge of the euro zone combined with a German guarantee of central government debt in the rest. In the United States, a scheme was needed to write down mortgages that surpass the value of the homes they are financing.

If political obstacles rule out direct debt reduction, excess debt now shackling the global economy could be partly inflated away by targeting inflation of 4-6 percent for several years, he argued.

NO QUICK FIX

John Wadle, a banking analyst at Mirae Asset Securities in Hong Kong, said he backed the thrust of Rogoff's comments. What markets needed, though, was a concrete commitment by Fed Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner to tackle the debt overhang using the Fed's balance sheet and regulatory sticks and carrots.

"Bernanke and Geithner need to jointly make an announcement of a coordinated set of measures to rebuild confidence and economic fundamentals," Wadle told clients. A Fed press statement at this point would fall short.

Desperate times call for desperate remedies. But not everyone agrees that it is time to press the panic button.

Economists at Bank of America Merrill Lynch said their measures of financial stress are rising but are not as elevated as during previous market slumps. So the urgency for the Fed to ease is not as great.

And some seasoned market-watchers are convinced that there is little policy makers can do in any case in the short term to redress what are deep-seated global imbalances in savings and investment.

Charles Dumas, chief economist and chairman of Lombard Street Research, a macroeconomics forecasting consultancy in London, is convinced the world is headed for recession in 2012 because countries with excess savings are doing too little to consume and import more from economies such as the United States that need to save more.

Japan had tried and failed for 20 years to stoke domestic consumption; hopes that China would switch its engine of growth to homegrown demand were similarly fanciful, Dumas said. But the greatest measure of blame attached to Germany, he argued.

"You can produce fancy economic solutions until you are blue in the face, but they won't work until Germany gets out and starts spending," Dumas said. "And they won't do it."

(Reporting by Alan Wheatley; editing by Ron Askew)

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"Update on Current Events" – Jul 23, 2011 (Kryon channelled by Lee Carroll) - (Subjects: God, Gaia, Shift of Human Consciousness, 2012, Benevolent Design, Financial Institutes (Recession, System to Change ...), Water Cycle (Heat up, Mini Ice Ace, Oceans, Fish, Earthquakes ..), Nuclear Power Revealed, Geothermal Power, Hydro Power, Drinking Water from Seawater, No need for Oil as Much, Middle East in Peace, Persia/Iran Uprising, Muhammad, Israel, DNA, Two Dictators to fall soon, Africa, China, (Old) Souls, Species to go, Whales to Humans, Global Unity,..... etc.) - New !


Paul Hellyer - Abolishing Fed and new energy disclosure key to US survival

In a reborn Israel, a glimpse of a New Israeli

The explosion of protests has sparked different modes of thinking, behavior and a reconsideration of what it is to be an Israeli.

Haaretz.com, by Bradley Burston, Israel, 8 Aug 2011

Hundreds of thousands of protesters march in Tel Aviv, August 6, 2011
(Photo; Tal Cohen)

               

"Show a little faith," a song keeps playing in my head. "There's magic in the night."

It was playing as I watched a young father, sweat-soaked and hoarse, slogging along with his wife and 200,000 other people in the heart of Tel Aviv, juggling a toddler daughter on his shoulders, the handle of a stroller in one hand, the handle of a placard in the other. The crayon on his sign read "Yisrael Noledet M'chadash" - Israel Is Being Reborn. 

               

What if he's right? Despite everything we're trained to think, despite everything that disappointment has trained us to distrust, and despite the state religion of 21st Century Israel, the one religion everyone here can fully believe in and practice, which is cynicism. What if this country is, in fact, being reborn? What if, despite everything we know, we could choose the Israel we would want Israel to become?

And, most unimaginable of all, what if this explosion of protest could spark a reconsideration of what it is to be an Israeli? What if it could spark different modes of thinking, even different modes of behavior, of how we act and how we react?

It already has.

If Israel were the same Israel that it was three weeks ago, if we were the same Israelis that we used to be, we would know what issues are serious and which are, well, unmanly.

There are subjects we see as worth fighting over – usually, to no effect - and there are those we leave alone, in shame over our own needs and our inability to address them.

If this Israel were the same Israel, we would know that no one would bother to hit the streets for education, which, while vital, is, let's face it, domestic, and can wait. We would know that no one would go out and demonstrate for health care, which, while crucial, seems to eke along in any case, and can wait. We would certainly know that no one would raise a collective call for housing, which, while essential, only gets built for people wealthy enough not to live in it, and can wait.

But what if that young family is right? What if, in choosing the Israel we want Israel to become, ordinary people decided they could no longer wait?

Three weeks into this, I'm betting they're right. What have I got to lose? Politicians who have nothing better to waste their time on than concocting laws to end all laws, democratic processes to end all democratic processes, Cherno-Bills worthy of the Supreme Soviet? Or, for dessert, a new bolus of legislation, all the parliamentary sewage flushed into one, a bill so heinous it will make it impossible even for Israel's best friends to defend Israel as a democracy, so extreme it will remove every remaining moral obstruction to branding Israel outright apartheid.

I'm thinking, choose again. I choose the Israel that's on the street. I choose these Israelis.

You're thinking: sure you do, what do you know, you're not from here. But you don't know. I've had decades of re-education in the gulag of the now-aging neo-Zionist ideal: The New Hebrew Man'yak. In uniform and out, I can recite chapter and verse. M'kol Mlamdei Hiskalti Lo L'tzet Frierer. The man who cuts me off in traffic, the woman who cuts in the pharmacy line, the bank line, the clinic queue - they are all my teachers in the idea that I, we, are all alone in this place, and I, we've got to grab everything for ourselves before someone else gets to it. Nothing will ever change. If it does, it won't be for the better.

If, after the failure of socialism in Israel you still believe in people getting together to make a better life for ordinary people and their needs, goes the credo, you must be either effeminate, if you’re a man; unduly mannish, if you're a woman; or, in any case, that most contemptible and therefore invisible and trample-worthy of Israelis – the freier (sucker).

When I saw that young family in Tel Aviv, I remembered one day when my wife and I were new parents, and new Israelis, living in Beer Sheva. Shopping for Rosh Hashana in a mobbed supermarket, we waited forever in a check-out line, our infant daughter in our arms. As we neared the register, a checkstand opened alongside, and the checker motioned us over. A burly man who had just arrived, watching the scene, rammed his shopping cart into the line just ahead of ours. With a giddy look of consummate triumph on his face, he pronounced his coup de grace sentence, for the benefit of my education in Israeliness: "Kol Echad V' haMazal Shelo." "Everyone has his own personal brand of luck."

Looking back, I can only thank this man. He taught me a lesson much more valuable than he could possibly have suspected.

I used to think that the lesson of the supermarket story was that if that was this guy's brand of luck, he was welcome to it. I had a lovely family, and I wasn't about to trade.

But there was something else, which took me years to see. This week, walking with hundreds of thousands of people in Tel Aviv, I began to wonder, who are the real freiers now?

What if these ordinary, extra-ordinary people, at long last, could make their own luck? What if they could begin to trade the mindset that substitutes macho displays and disproportionate might and intensely selective blindness, for addressing the authentic problems of ordinary, no less heroic people?

Saturday night, a little boy near us marched with a sign reading "Mommy says we don't have enough money for a little brother."

It's time to choose the Israel we want Israel to become. The hell with my re-education as the New Privatized Hebrew, which is, at this point, as last century as you can get. I'm starting a new re-education program. To be myself again. As a human. The hell with macho. The hell with the hair on the chest and the taking pride in putting visiting diplomats into sawed-off chairs.

Let's hear it for little brothers and sisters.

It's time to show a little faith. Now that there's magic in the night.

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China tells U.S. "good old days" of borrowing are over

Reuters, by Walter Brandimarte and Melanie Lee, NEW YORK, SHANGHAI, Sat Aug 6, 2011

Euro zone leaders' fresh crisis talks, Fri, Aug 5 2011

(Reuters) - China bluntly criticized the United States on Saturday one day after the superpower's credit rating was downgraded, saying the "good old days" of borrowing were over.

Standard & Poor's cut the U.S. long-term credit rating from top-tier AAA by a notch to AA-plus on Friday over concerns about the nation's budget deficits and climbing debt burden.

China -- the United States' biggest creditor -- said Washington only had itself to blame for its plight and called for a new stable global reserve currency.

"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary.

After a week which saw $2.5 trillion wiped off global markets, the move deepened investors' concerns of an impending recession in the United States and over the euro zone crisis.

Finance ministers and central bankers of the Group of Seven major industrialized nations will confer by telephone later on Saturday or on Sunday, a senior European diplomatic source said.

The source said the credit rating downgrade had added a global dimension on top of the euro zone debt issue, raising the need for international coordination.

"The G7 will confer by telephone. It's not yet confirmed whether it will be in one stage or in two stages, tonight and tomorrow," the source said.

French Finance Minister Francois Baroin, who would chair such a meeting under France's G7 and G20 presidency, said it was too early to say whether there would be an early G7 gathering.

In the Xinhua commentary, China scorned the United States for its "debt addiction" and "short sighted" political wrangling.

"China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," it said.

It urged the United States to cut military and social welfare expenditure. Further credit downgrades would very likely undermine the world economic recovery and trigger new rounds of financial turmoil, it said.

"International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country," Xinhua said.

In Washington, President Barack Obama urged lawmakers on Saturday to set aside partisan politics after the debt battle, saying they must work to put the United States' fiscal house in order and refocus on stimulating its stagnant economy.

S&P blamed the downgrade in part on the political gridlock in Washington, saying politics was preventing the United States from addressing its deficit and debt problems.

Obama called on Congress to back measures to give tax relief to the middle class, extend jobless benefits and pass long-delayed international trade pacts.

"Both parties are going to have to work together on a larger plan to get our nation's finances in order," he said.

"In the long term, the health of our economy depends on it...in the short term, our urgent mission has to be getting this economy growing faster and creating jobs."

STAY COOL

In contrast to the Chinese criticism, France's Baroin said France had faith in the United States' ability to get out of this "difficult period."

Friday's U.S. unemployment numbers were better than expected and so things were heading in the right direction, he said.

"Therefore, one should not dramatise, one needs to remain cool-headed, one should look at the fundamentals," he told France's iTele.

While the impact of the rating cut on financial markets when they reopen on Monday may be modest because the decision was expected, the shift may have a long-term impact for U.S. standing in the world, the dollar's status, and the global financial system.

"I think even if it was half-expected, the consequence will be far reaching," said Ciaran O'Hagan, fixed income strategist at Societe Generale in Paris.

"It will weigh on secure assets. The bigger reaction will be on risky assets, including equities and on agencies (Freddie Mac, Fannie Mae) and states backed directly by the federal government."

But he added: "U.S. Treasuries will remain a benchmark. This is a ship which takes a long time to turn around."

Norbert Barthle, a budget expert for German Chancellor Angela Merkel's conservatives said the downgrade would certainly provoke further turbulence in markets.

"I'm not surprised about the U.S. rating downgrade, rather I am astonished that for weeks, international rating agencies have focused their attention on the European debt situation but not the American one. For a while, there have been clear worries about America's economic woes but also the fact the U.S. is heavily indebted."

NO EARLY ITALIAN ELECTION

In Europe, Italian Prime Minister Silvio Berlusconi on Saturday ruled out calling early elections to stem market panic that has pounded Italian assets and forced his government to bring forward austerity measures.

Italy buckled on Friday to world pressure by pledging to bring forward cuts to balance the budget in 2013 in return for European Central Bank help with funding.

European policy makers are concerned that a debt emergency in the euro zone's third largest economy could completely overwhelm bailout mechanisms set up to help smaller troubled countries like Greece or Ireland.

Italy is due to go to the polls in 2013 but Berlusconi dismissed any suggestion of emulating Spain, where Prime Minister Jose Luis Rodriguez Zapatero has called an early election to tackle the crisis.

"This has absolutely not been talked about," Berlusconi told reporters. "This has never been an option."

The European Union's top economic official praised Italy's decision to accelerate budget-balancing measures and structural economic reforms and said swift implementation was now crucial.

"I strongly support this announcement and call on the authorities to quickly translate it into concrete measures," European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters in a telephone interview.

"This will help to boost potential growth, secure budgetary retrenchment and bolster market confidence," Rehn said.

The European Central Bank sources said the bank remains divided over whether to buy Italian government bonds but even some of those who favor the move say Italy should do more to front-load austerity measures.

Two sources said they expected ECB President Jean-Claude Trichet to hold a teleconference of the bank's policy-setting Governing Council over the weekend to discuss how to respond to turmoil in financial markets and Italy's latest measures.

China and Japan have called for coordinated action to avert a new worldwide financial crisis. India's finance minister Pranab Mukherjee told reporters: "There is no need to unnecessarily press the panic button."

(Additional reporting by Reuters bureaux; Writing by Angus MacSwan)

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"Update on Current Events" – Jul 23, 2011 (Kryon channelled by Lee Carroll) - (Subjects: God, Gaia, Shift of Human Consciousness, 2012, Benevolent Design, Financial Institutes (Recession, System to Change ...), Water Cycle (Heat up, Mini Ice Ace, Oceans, Fish, Earthquakes ..), Nuclear Power Revealed, Geothermal Power, Hydro Power, Drinking Water from Seawater, No need for Oil at Much, Middle East in Peace, Persia/Iran Uprising, Muhammad, Israel, DNA, Two Dictators to fall soon, Africa, China, (Old) Souls, Species to go, Whales to Humans, Global Unity,..... etc.) - New !

U.S. seriously probing News Corp 9/11 hacking report

Reuters, WASHINGTON, Wed Aug 3, 2011

A man holds a U.S. flag while others pause for a moment of silence to pay
 their respects at the site of the former Twin Towers on the eighth anniversary
 of the 9/11 attacks on the World Trade Center in New York September 11, 2009.
(Credit: Reuters/Carlos Barria)

(Reuters) - Attorney General Eric Holder will reassure families of September 11 victims when he meets them later this month that the Justice Department is seriously investigating allegations that News Corp reporters tried to hack victims' phones.

"I'll certainly want to hear what they have to say with regard to their concerns and, to the extent that I can share information with them, I will," Holder said on Wednesday.

"I will try to reassure them that this is something we are taking seriously," he told reporters.

Holder will meet with the families on August 24 at their request following a report in Britain's Daily Mirror newspaper that reporters with the rival News of the World had offered to pay a New York police officer for private phone records of some victims of the 2001 attacks.

The Mirror report, citing an unidentified source, has yet to be independently verified but has fueled speculation that the phone hacking scandal that has rocked Rupert Murdoch's News Corp media empire in Britain may spread to the United States.

The Federal Bureau of Investigation opened an investigation into the hacking allegation after the Daily Mirror report appeared.

The amount of information that Holder can share with the victims' families will likely be limited because of the ongoing investigation.

During an inquiry by members of Britain's Parliament in London last month, Murdoch said there was nothing to suggest his reporters had hacked the phones of September 11 victims.

(Reporting by Jeremy Pelofsky, editing by Anthony Boadle)

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U.S. to Cooperate with China on Deporting Corrupt Fugitives

China Briefing, by Vivian Ni, August 1, 2011 

Aug. 1 – Chinese government officials and state-owned enterprise (SOE) leaders charged with corruption may not find the United States a safe haven for them to flee to anymore, despite the lack of an extradition treaty between the two countries. A senior U.S. official recently said the United States will be working together with China to repatriate Chinese fugitives wanted for graft, according to a Reuters report.

During his five-day Beijing visit last week with a focus on anti-corruption and commercial rule of law issues, U.S. Department of Commerce General Counsel Cameron Kerry complimented the current cooperation between Chinese and U.S. prosecutors on repatriating graft officials or their illegally-obtained assets. He also said prosecutors from both countries are looking to have more cooperation on various cases in the future, including investigations into bribes paid to Chinese officials by U.S. companies under the U.S. Foreign Corrupt Practices Act.

Although there is no extradition treaty between China and the United States so far, some other domestic legal mechanisms can be used to pursue and repatriate fugitives, according to Kerry. For example, many of the fugitives have been deported under immigration laws, since they usually fail to obtain a legal residency in the United States.

A report completed in 2008 (in Chinese) but only recently disclosed to the public by the Anti-money Laundering Monitoring & Analysis Center of the People’s Bank of China (PBC) said there have been around 16,000 to 18,000 government officials and SOE managers who have fled overseas to escape corruption accusations since the mid-1990s. The Reuters report also cited the Chinese police statistics in 2010, saying there were around 600 Chinese suspects at large overseas who are wanted for economic crimes. Western countries, including the United States, Canada, Australia and the Netherlands, have become major destinations for officials who have embezzled large amounts of money, the PBC report pointed out.

Beijing’s lack of extradition treaties and its harsh penalties against corruption have increased the complexity when the Chinese government looks for the West’s help to repatriate the fugitives. According to China’s Criminal Law, individuals who  have embezzled more than RMB100,000 could receive a 10-year to life sentence, or even the death penalty.

However, if we look at several major fugitive deportation cases in the past, China seems to have been able to stick to its commitment to the international community that extradited criminals will not face capital punishment. Canada’s recent repatriation of Lai Changxing – who was accused to have smuggled US$6.4 billion worth of goods into China between 1996 and 1999 and evaded a total tax payment of US$3.96 billion – was agreed upon based on China’s promise that Lai will not be given the death penalty.

Yu Zhendong, a former Bank of China manager responsible for the embezzlement of US$482 million of bank funds together with other two managers, was deported by the United States in 2006 and received a 12-year jail sentence instead of the death penalty.

One of the major motivations that drive China to call its corrupt ex-officials back from foreign countries is its concern over a massive amount of capital flight. The PBC report estimated a total of RMB800 billion of illicit capital has flown out of the country together with those graft fugitives since the mid-1990s, emphasizing that it is still difficult to calculate the exact scale of asset loss China has suffered due to the escape of corrupt individuals. Noticing the fact that a significant amount of the illegal money is often spent overseas, the report warns of the risk that China’s stolen social fortune will be injected into economic development cycle of other countries, and that capital flight to a serious level will finally harm the country’s financial stability.

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