HAPPY NEW YEAR 2007!!!!!!

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U.S. Official Overseeing Oil Program Faces Inquiry

WASHINGTON, Dec. 29 — The Justice Department is investigating whether the director of a multibillion-dollar oil-trading program at the Interior Department has been paid as a consultant for oil companies hoping for contracts.

The director of the program and three subordinates, all based in Denver, have been transferred to different jobs and have been ordered to cease all contacts with the oil industry until the investigation is completed some time next spring, according to officials involved.

The officials, who spoke on condition of anonymity because the investigation had not been announced publicly, said investigators were worried that senior government officials had been steering huge oil-trading contracts to favored companies.

Any such favoritism would probably reduce the money that the federal government receives on nearly $4 billion worth of oil and gas, because it would reduce competition among companies that compete to sell the fuel on behalf of the government.

If the allegations prove correct, they would constitute a major new blot on the Interior Department’s much-criticized effort to properly collect royalties on vast amounts of oil and gas produced on land or in coastal waters.

The Interior Department’s Minerals Management Service, which oversees royalty collections, is now the target of multiple investigations by Congress and the Interior Department’s inspector general.

Those investigations are focused on allegations that the agency ordered its own auditors to abandon claims of cheating by large oil companies; that the agency’s arcane rules for calculating sales value and royalties make it easier for companies to understate their obligations; and that the agency’s basic sources of data are riddled with inaccuracies and are unreliable.

Interior officials have promoted “royalties in kind” as a much simpler and more efficient way for the government to get its proper share, because it eliminates much of the arcane accounting and reduces the opportunities for sleight-of-hand bookkeeping.

About a quarter of all oil and gas produced in the United States comes from federal property, and the Interior Department collected about $10 billion in royalties last year on about $60 billion in oil and gas.

At issue is the “royalty in kind” program, a fast-growing program under which companies pay their royalties in the form oil or gas rather than in the traditional form of cash.

For the 12 months ending last April, the government collected about $3.7 billion in oil and gas. Until recently, most of the oil simply went to the government’s Strategic Petroleum Reserve. But the strategic reserve was essentially filled this year, so the Interior Department hires private companies to resell the fuel on the open market.

To ensure that it gets the best price, the Interior Department takes bids for contracts in which companies typically offer to pay a specific premium over the daily spot-market prices quoted on the Nymex commodity exchange. The companies offering the biggest premium over the spot market get the contracts.
People familiar with the investigation said it had begun several months ago, but had picked up speed in the last few weeks.

The most prominent figure in the inquiry is Gregory W. Smith, who was director of the royalty-in-kind program at the Minerals Management Service in Denver. Mr. Smith oversaw the entire program, which now covers 75 percent of royalties for all oil and 30 percent of royalties for all natural gas produced in the Gulf of Mexico.

One person familiar with the investigation said it originally had focused on potentially improper social ties between some of Mr. Smith’s subordinates and executives at companies vying for contracts. The subordinates include two women, including one who is said to be in charge of oil marketing, and a second man.

All four people were transferred out of the royalty-in-kind office several weeks ago. Mr. Smith was reassigned as a “special assistant” to Lucy Querques Dennett, associate director of the Mineral Management Service in Washington. He was given strict orders to avoid any contact with industry executives, according to one official.

One official said investigators were now looking at possible consulting arrangements between the Denver officials and oil companies. The official said the most recent information had, if anything, hardened the suspicions of investigators, and said the potential ramifications could turn out to be far-reaching.

Mr. Smith did not return calls to his office in Denver. Spokesmen for the Interior Department in Washington as well as in the inspector general’s office, which began the investigation before referring the matter to the Justice Department, refused to comment on the matter.

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Democrats vow to restore political integrity

WASHINGTON (AP) — A California Democrat newly elected to Congress promised Saturday that his party will restore integrity and civility to the House when it assumes control in January.

“In this election, the American people clearly called for change,” Rep.-elect Jerry McNerney said in the Democrats’ weekly radio address. “As our first responsibility in fulfilling the mandate of this critical election, House Democrats will restore integrity and civility in Washington in order to earn the public trust.”

The effort to build that trust will include bans on gifts from lobbyists, lobbyist-funded travel and use of corporate jets, McNerney said.

The incoming congressman also promised “a new direction in Iraq” and said Democrats would resist any plan to deploy more U.S. troops there. “The Iraqis need to understand that the responsibility for the future of that country is theirs,” he said.

McNerney also said Democrats would work to reduce U.S. dependence on foreign oil “while creating jobs, prosperity and a healthy environment with a new energy technology, including renewable energy and biofuels.”

Before running for office, McNerney worked as a wind-energy engineer and consultant. In November, he defeated incumbent Republican Richard Pombo, whose efforts to rewrite the endangered species law and open public lands to energy drilling were frequently criticized by environmentalists when he chaired the House Resources Committee.

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Saddam Hussein put to death

Refusing to have his face covered and uttering curses upon his perceived foes, condemned Iraqi ex-dictator Saddam Hussein was executed by hanging early Saturday morning in a Baghdad square outside the Green Zone.

The Associated Press reports that Hussein’s half-brother, Ibrahim Barzan al-Tikriti, and the former Revolutionary Court chief justice, Awad Hamed al-Bandar, were also to be hanged, though the exact times for each was unclear.

The deposed strongman’s execution, just before 6 AM Baghdad time, came as the Muslim feast of Eid ul-Adha began.

CNN reported “celebratory gunfire” in the Iraqi capital and showed footage of Iraqis in Dearborn, Michigan cheering the demise of the 69-year-old Hussein, who was put to death for the 1982 massacre of 182 Iraqi Shi’ites. There was also a report that Iraqis at Hussein’s execution site “were dancing around his body.”

Small protests were held by supporters of the former Iraq leader in his hometown of Tikrit, according to Deutsche Presse Agentur.

The White House released a written statement by President Bush in which he said that the death of Hussein “comes at the end of a difficult year for the Iraqi people and for our troops.” He acknowledged that “bringing Saddam Hussein to justice will not end the violence in Iraq, but it is an important milestone on Iraq’s course to becoming a democracy…”

Reuters reported that the President, vacationing in Crawford, Texas, was asleep at the time of Hussein’s execution and was not awakened. He had been informed by his staff earlier in the evening that “the execution would take place in a few hours.”

Buildup to dictator’s demise

Earlier, the Associated Press reported that U.S. authorities were “maintaining physical custody of Saddam to prevent him from being humiliated before his execution,” and will “try to prevent the mutilation of his corpse.”

Iraq’s national security adviser told CNN’s Anderson Cooper that Hussein’s body would be prepared according to traditional Muslim rituals, and, despite an expressed desire by his daughter to have him laid to rest in Yemen, could “absolutely” be buried in Iraq if his family requests it, saying “we can agree on the whereabouts.”

McClatchy Newspapers said that Hussein was in a “state of shock” and had “come apart” after realizing “he couldn’t escape this,” according to an Iraqi parliament member present at Friday meetings concerning Hussein’s execution. Later, United Press International quoted an Iraqi official who witnessed the execution as saying the deposed dictator was “quiet and obedient” as the noose was placed around his neck. “We were astonished,” the official said. “It was strange. He just gave up.”

Rumors had flown into the night about the timing of Hussein’s hanging, with news agencies reporting conflicting details.

Late Friday evening, the Associated Press reported that the Iraqi government had prepared all necessary documents for the hanging to commence, “including a ‘red card’ – an execution order introduced during Saddam’s dictatorship.”

Iraqis gathered in throngs during the early morning leadup to the execution, reports said. Reuters reported that some in the Kurd region of Iraq awaited Hussein’s death with “grim satisfaction.”

Some U.S. embassies around the world warned American travelers of potential “problems” they might encounter due to Hussein’s hanging. The Pentagon stated that U.S. troops were prepared to deal with any increase in violence that could follow the execution.

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Hussein transfer to Iraqi authorities questioned, time of execution may depend on religious question

Earlier reports from various news organs that deposed Iraqi leader Saddam Hussein has been transferred from US custody to Iraqi control have now been cast into doubt, according to reports from Agence France Presse and Reuters.

Speculation continued on the timing of the execution, with some sources reporting that Iraq’s Prime Minister was seeking a judgment from Shi’ite clerics on when the hanging could go forward.

A breaking report at Reuters said that the deposed Iraqi dictator remained in US custody in Baghdad. Agence France Press also reported that the State Department had announced there was “no change in [Hussein’s] status.” The news followed up on reports from a variety of sources that Hussein had left US custody and been handed over to Iraqi control. The move would be a prelude to Saddam’s hanging by Iraqi authorities.

The most recent report from Reuters has suggested that Saddam’s execution may depend on a judgment by Shi’ite clerics. Tomorrow marks the beginning of the Muslim holiday of Eid Al-Adha, a week-long celebration of the beginning of the Hajj in Mecca, which may require delay of the execution. A Shi’ite politican said that Iraq’s Prime Minister Nuri al-Maliki “had asked Shi’ite religious leaders and clerics from Saddam’s Sunni Arab minority whether Saddam could be executed immediately. He told Reuters they may approve a hanging before noon (0900 GMT), when the festival formally begins, or say it should be delayed.”

Saddam Hussein is drawn from the country’s Sunni Arab minority, and there has been much speculation that this segment of Iraq’s population will be greatly angered by the execution of the country’s former dictator.

A senior Bush administration official said earlier that “Hussein’s execution by hanging isn’t expected to happen in the next 24 hours, though it may take place in the days that follow, the official told reporters yesterday,” according to Bloomberg News. Agence France Presse also quoted the official as speculating that it might take another day for an execution order to be carried out.

Meanwhile, according to AFP, an anonymous lawyer for Saddam was now claiming Hussein will be executed on Saturday at dawn.

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WH: bin Laden Capture "A Success That Hasn’t Occured Yet"

Five years after the Sept. 11 attacks, Osama bin Laden is still at large — but that’s not a failure of White House policy, says Frances Fragos Townsend.

As she explained to CNN’s White House correspondent Ed Henry last night:

HENRY: You know, going back to September 2001, the president said, dead or alive, we’re going to get him. Still don’t have him. I know you are saying there’s successes on the war on terror, and there have been. That’s a failure.

TOWNSEND: Well, I’m not sure — it’s a success that hasn’t occurred yet. I don’t know that I view that as a failure.

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Many soldiers say troop surge a bad idea

BAGHDAD, Iraq – Many of the American soldiers trying to quell sectarian killings in Baghdad don’t appear to be looking for reinforcements. They say the temporary surge in troop levels some people are calling for is a bad idea.

President Bush is considering increasing the number of troops in Iraq and embedding more U.S. advisers in Iraqi units. White House advisers have indicated Bush will announce his new plan for the war before his State of the Union address Jan. 23.

In dozens of interviews with soldiers of the Army’s 5th Battalion, 20th Infantry Regiment as they patrolled the streets of eastern Baghdad, many said the Iraqi capital is embroiled in civil warfare between majority Shiite Muslims and Sunni Arabs that no number of American troops can stop.

Others insisted current troop levels are sufficient and said any increase in U.S. presence should focus on training Iraqi forces, not combat.

But their more troubling worry was that dispatching a new wave of soldiers would result in more U.S. casualties, and some questioned whether an increasingly muddled American mission in Baghdad is worth putting more lives on the line.

Spc. Don Roberts, who was stationed in Baghdad in 2004, said the situation had gotten worse because of increasing violence between Shiites and Sunnis.

“I don’t know what could help at this point,” said Roberts, 22, of Paonia, Colo. “What would more guys do? We can’t pick sides. It’s almost like we have to watch them kill each other, then ask questions.”

Based in Fort Lewis, Wash., the battalion is part of the 3rd Stryker Brigade Combat Team of the 2nd Infantry Division. Deployed in June, its men were moved to Baghdad from Mosul in late November to relieve another Stryker battalion that had reached the end of its tour.

“Nothing’s going to help. It’s a religious war, and we’re caught in the middle of it,” said Sgt. Josh Keim, a native of Canton, Ohio, who is on his second tour in Iraq. “It’s hard to be somewhere where there’s no mission and we just drive around.”

Capt. Matt James, commander of the battalion’s Company B, was careful in how he described the unit’s impact since arriving in Baghdad.
“The idea in calling us in was to make things better here, but it’s very complicated and complex,” he said.
But James said more troops in combat would likely not have the desired effect.
“The more guys we have training the Iraqi army the better,” he said. “I would like to see a surge there.”

During a recent interview, Lt. Gen. Nasier Abadi, deputy chief of staff for the Iraqi army, said that instead of sending more U.S. soldiers, Washington should focus on furnishing his men with better equipment.
“We are hoping 2007 will be the year of supplies,” he said.

Some in the 5th Battalion don’t think training will ever get the Iraqi forces up to American standards.

“They’re never going to be as effective as us,” said 1st Lt. Sean McCaffrey, 24, of Shelton, Conn. “They don’t have enough training or equipment or expertise.”
McCaffrey does support a temporary surge in troop numbers, however, arguing that flooding Baghdad with more soldiers could “crush enemy forces all over the city instead of just pushing them from one area to another.”

Pfc. Richard Grieco said it’s hard to see how daily missions in Baghdad make a difference.
“If there’s a plan to sweep through Baghdad and clear it, (more troops) could make a difference,” said the 19-year-old from Slidell, La. “But if we just dump troops in here like we’ve been doing, it’s just going to make for more targets.”

Sgt. James Simons, 24, of Tacoma, Wash., said Baghdad is so dangerous that U.S. forces spend much of their time in combat instead of training Iraqis.
“Baghdad is still like it was at the start of the war. We still have to knock out insurgents because things are too dangerous for us to train the Iraqis,” he said.

Staff Sgt. Anthony Handly disagreed, saying Baghdad has made improvements many Americans aren’t aware of.
“People think everything is so bad and so violent, but it’s really not,” said Handly, 30, of Bellingham, Wash. “A lot of people are getting jobs they didn’t have before and they’re doing it on their own. We just provide a stabilizing effect.”

Staff Sgt. Lee Knapp, 28, of Mobile, Ala., also supported a temporary troop surge, saying it could keep morale up by reducing the need to extend units past the Army’s standard tour of one year in Iraq.
“It could help alleviate some stress on the smaller units,” he said. “It could help Baghdad, but things are already getting better.”

Sgt. Justin Thompson, a San Antonio native, said he signed up for delayed enlistment before the Sept. 11 terror attacks, then was forced to go to a war he didn’t agree with.
A troop surge is “not going to stop the hatred between Shia and Sunni,” said Thompson, who is especially bitter because his 4-year contract was involuntarily extended in June. “This is a civil war, and we’re just making things worse. We’re losing. I’m not afraid to say it.”

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Defense Secretary Is Wary of Adding More Iraq Troops

WASHINGTON — With President Bush leaning toward sending more soldiers to pacify Iraq, his defense secretary is privately opposing the buildup.

According to two administration officials who asked not to be named, Robert Gates expressed his skepticism about a troop surge in Iraq on his first day on the job, December 18, at a Pentagon meeting with civilians who oversee the Air Force, Army, Navy, and Marines.

The view of the new defense secretary appears to be at odds with the leanings of Mr. Bush, who is expected to announce a new troop surge when he unveils his new war strategy next month. Mr. Gates met with Mr. Bush Saturday at Camp David after a trip to Iraq, where the defense secretary met with the commander of American forces there, General George Casey. General Casey said he would be open to an increase in troops, but a spokesman for him told the Christian Science Monitor over the weekend that the general had not formally requested more troops.

The view from the military on the troop surge is murky. The Pentagon‘s top generals have been on the record before Congress and in the press for the past two years as saying the current troop levels in Iraq are adequate for the balancing act of standing up an Iraqi military and also fighting off largely Sunni insurgents. At the same time, last June’s Baghdad offensive, which moved troops to Iraq’s capital from other troubled provinces such as Anbar has been widely seen as a failure, as Shiite militias continue their killing spree undeterred. The failure of what was known as “Operation Forward Together” has led to a rethinking of strategy.

Before taking over as defense secretary earlier this month, Mr. Gates had been a member of the 10-person Iraq Study Group, also known as the Baker-Hamilton commission. That group has warned against a long-term buildup of forces in Iraq, arguing it would lessen pressure on the elected government in Baghdad to reach a political accommodation there, which the commission says is the only way to stabilize the deteriorating nation.

That’s the way many of the Democrats preparing to take over Congress see things as well. Yesterday, in a conference call with reporters, the incoming chairman of the Senate Foreign Relations Committee, Joseph Biden, a Democrat of Delaware, said he would launch three weeks of hearings on Iraq in January in part to persuade Republicans to go to the White House to oppose a new troop surge for Iraq.

“I totally oppose the surging of additional troops in Baghdad,” Mr. Biden told reporters yesterday. He also said a majority of his colleagues in the Senate also opposed the push for new troops “absent some profound political announcement, addressing the two overriding issues,” which he said were sharing oil revenues and dealing with largely Shiite factional militias.

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Edwards shoots for White House again

NEW ORLEANS – Former vice presidential nominee John Edwards said Thursday that he is a candidate for the 2008 Democratic presidential nomination, promising “a grass roots, ground-up campaign where we ask people to take action.”

Clad in blue jeans, an open-necked shirt and with his sleeves rolled up, Edwards chose the backyard of a victim of Hurricane Katrina in New Orleans’ devastated 9th Ward for his unorthodox announcement.

“We want people in this campaign to actually take action now, not later, not after the next election,” the former North Carolina senator said, sounding as much like a recruiter as a presidential campaigner.

“Instead of staying home and complaining, we’re asking Americans to help,” Edwards said. “Most of the good that has been done in New Orleans has been done by faith-based groups, charitable groups and volunteers.”

Edwards — who is calling for cuts in poverty, global warming and troops in Iraq — chose the site to highlight his signature concern of the economic disparity that divides America.

“I’m here to announce I’m a candidate for president of the United States,” Edwards told NBC’s “Today Show” earlier Thursday, one of three back-to-back interviews by the candidate on morning news shows. “I’ve reached my own conclusion this is the best way to serve my country.”

Edwards, 53, said the difference between his message to voters in 2004 and his 2008 presidential bid is that, “I’ve learned since the last campaign that it’s great to identify a problem … but the way you change things is by taking action.”

And Iraq is one of the biggest issues facing the country.

“It would be a huge mistake to put a surge of troops into Iraq,” Edwards said on ABC’s “Good Morning America. “It sends exactly the wrong signal. We can maximize our chances for success by making clear we are going to leave Iraq and not stay there forever.”

And the next president must restore America’s leadership in the world, he said.

“It’s absolutely crucial that America re-establish its moral authority and leadership role in the world,” Edward said on CBS “Early Show.”

Edwards’ campaign got a little ahead of itself Wednesday and announced his intentions online a day early. His Web site briefly featured the logo “John Edwards ’08” and its slogan, “Tomorrow begins today” — literally, in this case — before aides quickly removed them.

In his message to supporters, Edwards listed five priorities to change America.

Among them: “Guaranteeing health care for every single American,” “Strengthening our middle class and ending the shame of poverty,” “Leading the fight against global warming,” and “Getting America and the world to break our addiction to oil.”

Edwards has been working to build his campaign ever since he and John Kerry lost a close race to the Bush-Cheney ticket in 2004.

The campaign could pit Edwards against his former partner on the Democratic ticket.

Kerry has not said yet whether he will run, nor have other big names like Hillary Clinton and Barack Obama, but Edwards did not wait to find out who will be his competition.

He has positioned himself as a serious contender. He’s been strengthening his ties to labor and other Democratic activists behind the scenes, rebuilding a top-notch campaign staff and honing his skills. The efforts have made him the leading candidate in early polls of Iowa Democrats who will get the first say in the nomination fight.

Edwards’ advisers scheduled a six-state announcement tour between Christmas and New Year’s Day with the hopes that news would be slow and he could dominate media coverage. Over three days, Edwards also planned to travel to Iowa, New Hampshire, Nevada, South Carolina and his home state of North Carolina.

Edwards was kicking off his campaign at one of the few homes in the neighborhood that appears close to being habitable. It belongs to Orelia Tyler, 54, who has been living in a Federal Emergency Management Agency trailer in her yard while her home was rebuilt.

Edwards’ challenge over the next year will be to show that he can keep up with front-runners Clinton and Obama, should they get in the race, in terms of fundraising and support. Unlike officeholders who may run, Edwards does not have a federal campaign account and will have to start raising money from scratch.

He also has hundreds of thousands of dollars in debt from his 2004 campaign.

The son of a textile mill worker, Edwards has been on a fast track most of his life despite his up-by-the-bootstraps roots.

A standout law student who became a stunningly successful trial lawyer and millionaire, Edwards vaulted from nowhere politically into the U.S. Senate and then onto the 2004 Democratic presidential ticket — all in less than six years.

In 1998, in his first bid for public office, Edwards defeated incumbent Sen. Lauch Faircloth, R-N.C., a leading advocate for impeachment of President Clinton.

Edwards began building support for his first presidential bid shortly after arriving in the Senate. He quickly made a name for himself in Congress, using his legal background to help Democratic colleagues navigate the impeachment hearings.

Edwards launched a bid for the Democratic nomination in 2003 and quickly caught the eye of Democratic strategists. Although he won only the South Carolina primary, his skills on the trail, his cheerful demeanor, and his message of “two Americas” — one composed of the wealthy and privileged, and the other of the hardworking common man — excited voters, especially independents and moderate-leaning Democrats.

Edwards’ handsome, youthful appearance also gave him a measure of star quality, one of the reasons Kerry selected Edwards as his running mate.

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‘This is no longer America’s war in Iraq,’ says U.S. commander of Iraqi military training unit

Thursday’s edition of The New York Times includes a story which records the frustrations of some commanding officers in charge of training Iraqi soldiers in Baghdad, who fear that “sectarian ties” may be almost insurmountable in a country where “everyone, to some extent, is influenced” by the Shiite militias.

“I have come to the conclusion that this is no longer America’s war in Iraq, but the Iraqi civil war where America is fighting,” Maj. William Voorhies, the American commander of a military training unit in Baghdad tells the Times.

“A two-day reporting trip accompanying Major Voorhies’s unit and combat troops seemed to back his statement, as did other commanding officers expressing similar frustration,” writes Marc Santora.

Excerpts from article:

The car parked outside was almost certainly a tool of the Sunni insurgency. It was pocked with bullet holes and bore fake license plates. The trunk had cases of unused sniper bullets and a notice to a Shiite family telling them to abandon their home.

“Otherwise, your rotten heads will be cut off,” the note read.

The soldiers who came upon the car in a Sunni neighborhood in Baghdad were part of a joint American and Iraqi patrol, and the Americans were ready to take action. The Iraqi commander, however, taking orders by cellphone from the office of a top Sunni politician, said to back off: the car’s owner was known and protected at a high level.

For Maj. William Voorhies, the American commander of the military training unit at the scene, the moment encapsulated his increasingly frustrating task — trying to build up Iraqi security forces who themselves are being used as proxies in a spreading sectarian war. This time, it was a Sunni politician — Vice Prime Minister Salam al-Zubaie — but the more powerful Shiites interfered even more often.

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