The major media overlooked Communist spies and
Madoff’s fraud. What are they missing today?
In mid-March, the Wall Street Journal carried a long discussion of the
origins of the Bretton Woods system, the international financial
framework that governed the Western world for decades after World War II. A
photo showed the two individuals who negotiated that agreement. Britain was
represented by John Maynard Keynes, a towering economic figure of that era.
America’s representative was Harry Dexter White, assistant secretary of the
Treasury and long a central architect of American economic policy, given that
his nominal superior, Secretary Henry Morgenthau Jr., was a gentleman farmer
with no background in finance. White was also a Communist agent.
Such a situation was hardly
unique in American government during the 1930s and 1940s. For example, when a
dying Franklin Roosevelt negotiated the outlines of postwar Europe with Joseph
Stalin at the 1945 Yalta summit, one of his important advisors was Alger Hiss,
a State Department official whose primary loyalty was to the Soviet side. Over
the last 20 years, John Earl Haynes, Harvey Klehr, and other scholars have
conclusively established that many dozens or even hundreds of Soviet agents
once honeycombed the key policy staffs and nuclear research facilities of our
federal government, constituting a total presence perhaps approaching the scale
suggested by Sen. Joseph McCarthy, whose often unsubstantiated charges tended
to damage the credibility of his position.
The Cold War ended over two
decades ago and Communism has been relegated to merely an unpleasant chapter in
the history books, so today these facts are hardly much disputed. For example,
liberal Washington
Post blogger
Ezra Klein matter-of-factly referred to White as a “Soviet spy” in the title of
his column on our postwar financial system. But during the actual period when
America’s government was heavily influenced by Communist agents, such
accusations were widely denounced as “Red-baiting” or ridiculed as right-wing
conspiracy paranoia by many of our most influential journalists and
publications. In 1982 liberal icon Susan Sontag ruefully acknowledged that for
decades the subscribers to the lowbrow Readers Digest had received a more
realistic view of the world than those who drew their knowledge from the elite
liberal publications favored by her fellow intellectuals. I myself came of age
near the end of the Cold War and always vaguely assumed that such lurid tales
of espionage were wildly exaggerated. I was wrong.
The notion of the American
government being infiltrated and substantially controlled by agents of a
foreign power has been the stuff of endless Hollywood movies and television
shows, but for various reasons such popular channels have never been employed
to bring the true-life historical example to wide attention. I doubt if even
one American in a hundred today is familiar with the name “Harry Dexter White”
or dozens of similar agents.
The realization that the world
is often quite different from what is presented in our leading newspapers and
magazines is not an easy conclusion for most educated Americans to accept, or
at least that was true in my own case. For decades, I have closely read
the New
York Times,
the Wall
Street Journal,
and one or two other major newspapers every morning, supplemented by a wide
variety of weekly or monthly opinion magazines. Their biases in certain areas
had always been apparent to me. But I felt confident that by comparing and
contrasting the claims of these different publications and applying some common
sense, I could obtain a reasonably accurate version of reality. I was mistaken.
Aside from the evidence of our
own senses, almost everything we know about the past or the news of today comes
from bits of ink on paper or colored pixels on a screen, and fortunately over
the last decade or two the growth of the Internet has vastly widened the range
of information available to us in that latter category. Even if the
overwhelming majority of the unorthodox claims provided by such non-traditional
web-based sources is incorrect, at least there now exists the possibility of
extracting vital nuggets of truth from vast mountains of falsehood. Certainly
the events of the past dozen years have forced me to completely recalibrate my
own reality-detection apparatus.
Thoughtful individuals of all
backgrounds have undergone a similar crisis of confidence during this same
period. Just a few months after 9/11 New York Timescolumnist Paul Krugman argued
that the sudden financial collapse of the Enron Corporation represented a
greater shock to the American system than the terrorist attacks themselves, and
although he was widely denounced for making such an “unpatriotic” claim, I
believe his case was strong. Although the name “Enron” has largely vanished
from our memory, for years it had ranked as one of America’s most successful
and admired companies, glowingly profiled on the covers of our leading business
magazines, and drawing luminaries such as Krugman himself to its advisory
board; Enron Chairman Kenneth Lay had been a top contender for Treasury
secretary in President George W. Bush’s administration. Then in the blink of an
eye, the entire company was revealed to be an accounting fraud from top to
bottom, collapsing into a $63 billion bankruptcy, the largest in American
history. Other companies of comparable or even greater size such as WorldCom,
Tyco, Adelphia, and Global Crossing soon vanished for similar reasons.
Part of Krugman’s argument was
that while the terrorist attacks had been of an entirely unprecedented nature
and scale, our entire system of financial regulation, accounting, and business
journalism was designed to prevent exactly the sort of frauds that brought down
those huge companies. When a system fails so dramatically at its core mission,
we must wonder which of our other assumptions are incorrect.
Just a few years later, we saw
an even more sweeping near-collapse of our entire financial system, with giant
institutions such as Fannie Mae, Freddie Mac, Bear Stearns, Lehman Brothers,
Wachovia, and AIG falling into bankruptcy, and all our remaining major banks
surviving only due to the trillions of dollars in government bailouts and loan
guarantees they received. Once again, all our media and regulatory organs had
failed to anticipate this disaster.
Or take the remarkable case of
Bernie Madoff. His colossal investment swindle had been growing unchecked for
over three decades under the very noses of our leading financial journalists
and regulators in New York City, ultimately reaching the sum of $65 billion in
mostly fictional assets. His claimed returns had been implausibly steady and
consistent year after year, market crashes or not. None of his supposed trading
actually occurred. His only auditing was by a tiny storefront firm. Angry
competitors had spent years warning the SEC and journalists that his alleged
investment strategy was mathematically impossible and that he was obviously
running a Ponzi scheme. Yet despite all these indicators, officials did nothing
and refused to close down such a transparent swindle, while the media almost
entirely failed to report these suspicions.
In many respects, the
non-detection of these business frauds is far more alarming than failure to
uncover governmental malfeasance. Politics is a partisan team sport, and it is
easy to imagine Democrats or Republicans closing ranks and protecting their
own, despite damage to society. Furthermore, success or failure in public policies
is often ambiguous and subject to propagandistic spin. But investors in a
fraudulent company lose their money and therefore have an enormous incentive to
detect those risks, with the same being true for business journalists. If the
media cannot be trusted to catch and report simple financial misconduct, its
reliability on more politically charged matters will surely be lower.
The circumstances surrounding
our Iraq War demonstrate this, certainly ranking it among the strangest
military conflicts of modern times. The 2001 attacks in America were quickly
ascribed to the radical Islamists of al-Qaeda, whose bitterest enemy in the
Middle East had always been Saddam Hussein’s secular Baathist regime in Iraq.
Yet through misleading public statements, false press leaks, and even forged
evidence such as the “yellowcake” documents, the Bush administration and its
neoconservative allies utilized the compliant American media to persuade our
citizens that Iraq’s nonexistent WMDs posed a deadly national threat and required
elimination by war and invasion. Indeed, for several years national polls
showed that a large majority of conservatives and Republicans actually believed
that Saddam was the mastermind behind 9/11 and the Iraq War was being fought as
retribution. Consider how bizarre the history of the 1940s would seem if
America had attacked China in retaliation for Pearl Harbor.
True facts were easily
available to anyone paying attention in the years after 2001, but most
Americans do not bother and simply draw their understanding of the world from
what they are told by the major media, which overwhelmingly—almost
uniformly—backed the case for war with Iraq; the talking heads on TV created
our reality. Prominent journalists across the liberal and conservative spectrum
eagerly published the most ridiculous lies and distortions passed on to them by
anonymous sources, and stampeded Congress down the path to war.
The result was what my late friend Lt. Gen.
Bill Odom rightly called the “greatest strategic disaster
in United States history.” American forces suffered tens of thousands of
needless deaths and injuries, while our country took a huge step toward
national bankruptcy. Economics Nobel Laureate Joseph Stiglitz and others have
estimated that with interest the total long-term cost of our two recent wars
may reach as high as $5 or $6 trillion, or as much as $50,000 per American
household, mostly still unpaid. Meanwhile, economist Edward Wolff has
calculated that the Great Recession and its aftermath cut the personal net
worth of the median American household to $57,000 in 2010 from a figure nearly
twice as high three years earlier. Comparing these assets and liabilities, we
see that the American middle class now hovers on the brink of insolvency, with
the cost of our foreign wars being a leading cause.
But no one involved in the
debacle ultimately suffered any serious consequences, and most of the same
prominent politicians and highly paid media figures who were responsible remain
just as prominent and highly paid today. For most Americans, reality is
whatever our media organs tell us, and since these have largely ignored the
facts and adverse consequences of our wars in recent years, the American people
have similarly forgotten. Recent polls show that only half the public today
believes that the Iraq War was a mistake.
Author James Bovard has
described our society as an “attention deficit democracy,” and the speed with
which important events are forgotten once the media loses interest might
surprise George Orwell.
Consider the story of Vioxx, a
highly lucrative anti-pain medication marketed by Merck to the elderly as a
substitute for simple aspirin. After years of very profitable Vioxx sales, an
FDA researcher published a study demonstrating that the drug greatly increased
the risk of fatal strokes and heart attacks and had probably already caused
tens of thousands of premature American deaths. Vioxx was immediately pulled
from the market, but Merck eventually settled the resulting lawsuits for
relatively small penalties, despite direct evidence the company had long been
aware of the drug’s deadly nature. Our national media, which had earned
hundreds of millions of dollars in advertising revenue from Vioxx marketing,
provided no sustained coverage and the scandal was soon forgotten. Furthermore,
the press never investigated the dramatic upward and downward shifts in the
mortality rates of elderly Americans that so closely tracked the introduction
and recall of Vioxx; as I pointed out in a 2012
article, these indicated that the likely death toll had actually
been several times greater than the FDA estimate. Vast numbers Americans died,
no one was punished, and almost everyone has now forgotten.
Or take the strange case of
Bernard Kerik, New York Mayor Rudolph Giuliani’s police commissioner during
9/11, later nominated by President Bush to be America’s first director of
national intelligence, a newly established position intended to oversee all of
our various national-security and intelligence agencies. His appointment seemed
likely to sail through the Republican-controlled Senate until derailed by
accusations he had employed an undocumented nanny. With his political rise
having been blocked, the national media suddenly revealed his long history of
association with organized-crime figures, an indictment quickly followed, and
he is currently still serving his federal prison sentence for conspiracy and
fraud. So America came within a hairbreadth of placing its entire
national-security apparatus under the authority of a high-school dropout
connected with organized crime, and today almost no Americans seem aware of
that fact.
Through most of the 20th
century, America led something of a charmed life, at least when compared with
the disasters endured by almost every other major country. We became the
richest and most powerful nation on earth, partly due to our own achievements
and partly due to the mistakes of others. The public interpreted these decades
of American power and prosperity as validation of our system of government and
national leadership, and the technological effectiveness of our domestic
propaganda machinery—our own American Pravda—has heightened this effect. Furthermore, most
ordinary Americans are reasonably honest and law-abiding and project that same
behavior onto others, including our media and political elites. This differs
from the total cynicism found in most other countries around the world.
Credibility is a capital asset,
which may take years to accumulate but can be squandered in an instant; and the
events of the last dozen years should have bankrupted any faith we have in our
government or media. Once we acknowledge this, we should begin to accept the
possible reality of important, well-documented events even if they are not
announced on the front pages of our major newspapers. When several huge
scandals have erupted into the headlines after years or decades of total media
silence, we must wonder what other massive stories may currently be ignored by
our media elites. I think I can provide a few possibilities.
Consider the almost forgotten
anthrax mailing attacks in the weeks after 9/11, which terrified our dominant
East Coast elites and spurred passage of the unprecedented Patriot Act, thereby
eliminating many traditional civil-libertarian protections. Every morning
during that period the New York Times and other leading newspapers carried articles describing the
mysterious nature of the deadly attacks and the complete bafflement of the FBI
investigators. But evenings on the Internet I would read stories by perfectly
respectable journalists such as Salon’s Laura Rozen or the staff of the Hartford
Courant providing a wealth of additional detail and
pointing to a likely suspect and motive.
Although the letters carrying
the anthrax were purportedly written by an Arab terrorist, the FBI quickly
determined that the language and style indicated a non-Arab author, while tests
pointed to the bioweapons research facility at Ft. Detrick, Md., as the
probable source of the material. But just prior to the arrival of those deadly
mailings, military police at Quantico, Va., had also received an anonymous
letter warning that a former Ft. Detrick employee, Egyptian-born Dr. Ayaad
Assaad, might be planning to launch a national campaign of bioterrorism.
Investigators quickly cleared Dr. Assaad, but the very detailed nature of the
accusations revealed inside knowledge of his employment history and the Ft.
Detrick facilities. Given the near-simultaneous posting of anthrax envelopes
and false bioterrorism accusations, the mailings almost certainly came from the
same source, and solving the latter case would be the easiest means of catching
the anthrax killer.
Who would have attempted to
frame Dr. Assaad for bioterrorism? A few years earlier he had been involved in
a bitter personal feud with a couple of his Ft. Detrick coworkers, including
charges of racism, official reprimands, and angry recriminations all around.
When an FBI official shared a copy of the accusatory letter with a noted
language-forensics expert and allowed him to compare the text with the writings
of 40 biowarfare lab employees, he found a perfect match with one of those
individuals. For years I told my friends that anyone who spent 30 minutes with
Google could probably determine the name and motive of the likely anthrax
killer, and most of them successfully met my challenge.
This powerful evidence received
almost no attention in the major national media, nor is there any indication
that the FBI ever followed up on any of these clues or interrogated the named
suspects. Instead, investigators attempted to pin the attacks on a Dr. Steven
Hatfill based on negligible evidence, after which he was completely exonerated
and won a $5.6 million settlement from the government for its years of severe
harassment. Later, similar hounding of researcher Bruce Ivins and his family
led to his suicide, after which the FBI declared the case closed, even though
former colleagues of Dr. Ivins demonstrated that he had had no motive, means,
or opportunity. In 2008, I commissioned a major 3,000-word cover
story in my magazine summarizing all of this crucial
evidence, and once again almost no one in the mainstream media paid the
slightest attention.
An even more egregious case
followed a couple of years later, with regard to the stunning revelations of
Pulitzer Prize winner Sydney Schanberg, one of America’s foremost Vietnam War
reporters and a former top editor at the New York Times. After years of research,
Schanberg published massive evidence demonstrating that the endlessly ridiculed
claims of America’s Vietnam MIA movement of the 1970s and 1980s were correct:
the Nixon administration had indeed deliberately abandoned many hundreds of
American POWs in Vietnam at the close of the war, and our government afterward
spent decades covering up this shameful crime. Schanberg’s charges were
publicly confirmed by two former Republican House members, one of whom had
independently co-authored a 500 page book on the
subject, exhaustively documenting the POW evidence.
Although a major focus of
Schanberg’s account was the central role that Sen. John McCain had played in
leading the later cover-up, the national media ignored these detailed charges
during McCain’s bitter 2008 presidential campaign against Barack Obama. One of
America’s most distinguished living journalists published what was surely “the
story of the century” and none of America’s newspapers took notice.
In 2010 Schanberg republished
this material in a collection of his other writings, and his work received
glowing praise from Joseph Galloway, one of America’s top military
correspondents, as well as other leading journalists; his charges are now
backed by the weight of four New York Times Pulitzer Prizes. Around that same time, I produced a 15,000-word cover-symposium on
the scandal, organized around Schanberg’s path-breaking
findings and including contributions from other prominent
writers. All of this appeared in the middle of Senator McCain’s difficult
reelection campaign in Arizona, and once again the material was totally ignored
by the state and national media.
An argument might be made that
little harm has been done to the national interest by the media’s continued silence
in the two examples described above. The anthrax killings have largely been
forgotten and the evidence suggests that the motive was probably one of
personal revenge. All the government officials involved in the abandonment of
the Vietnam POWs are either dead or quite elderly, and even those involved in
the later cover-up, such as John McCain, are in the twilight of their political
careers. But an additional example remains completely relevant today, and some
of the guilty parties hold high office.
During the mid-2000s I began
noticing references on one or two small websites to a woman claiming to be a
former FBI employee who was making the most outlandish and ridiculous charges,
accusing high government officials of selling our nuclear-weapons secrets to
foreign spies. I paid no attention to such unlikely claims and never bothered
reading any of the articles.
A couple of years went by, and
various website references to that same woman—Sibel Edmonds—kept appearing,
although I continued to ignore them, secure that the silence of all my
newspapers proved her to be delusional. Then in early 2008, the London Sunday Times, one of the world’s leading
newspapers, ran a long, three-part front-page series presenting her charges,
which were soon republished in numerous other countries. Daniel Ellsberg described
Edmonds’s revelations as “far more explosive than the
Pentagon Papers” and castigated the American media for completely ignoring a story that
had reached the front pages of newspapers throughout the rest of the world.
Such silence struck me as rather odd.
Philip Giraldi, a former CIA
official who regularly writes for this magazine, suggested he investigate her
charges. He found her highly credible, and his 3,000-word article
in TAC presented some astonishing but very detailed claims.
Edmonds had been hired by the
FBI to translate wiretapped conversations of a suspected foreign spy ring under
surveillance, and she had been disturbed to discover that many of these
hundreds of phone calls explicitly discussed the sale of nuclear-weapons
secrets to foreign intelligence organizations, including those linked to
international terrorism, as well as the placement of agents at key American
military research facilities. Most remarkably, some of the individuals involved
in these operations were high-ranking government officials; the staffs of
several influential members of Congress were also implicated. On one occasion,
a senior State Department figure was reportedly recorded making arrangements to
pick up a bag containing a large cash bribe from one of his contacts. Very
specific details of names, dates, dollar amounts, purchasers, and military
secrets were provided.
The investigation had been
going on for years with no apparent action, and Edmonds was alarmed to discover
that a fellow translator quietly maintained a close relationship with one of
the key FBI targets. When she raised these issues, she was personally threatened,
and after appealing to her supervisors, eventually fired.
Since that time, she has passed
a polygraph test on her claims, testified under oath in a libel lawsuit,
expanded her detailed charges in a 2009 TAC cover
story also by Giraldi, and most recently published a book recounting
her case. Judiciary Committee Senators Chuck Grassley and Patrick Leahy have
publicly backed some of her charges, a Department of Justice inspector
general’s report has found her allegations “credible” and “serious,” while
various FBI officials have vouched for her reliability and privately confirmed
many of her claims. But none of her detailed charges has ever appeared in any
of America’s newspapers. According to Edmonds, one of the conspirators
routinely made payments to various members of the media, and bragged to his
fellow plotters that “We just fax to our people at the New York Times. They print it under their names.”
At times, Congressional
Democratic staff members became interested in the scandal, and promised an
investigation. But once they learned that senior members of their own party
were also implicated, their interest faded.
These three stories—the anthrax
evidence, the McCain/POW revelations, and the Sibel Edmonds charges—are the
sort of major exposés that would surely be dominating the headlines of any
country with a properly-functioning media. But almost no American has ever
heard of them. Before the Internet broke the chokehold of our centralized flow
of information, I would have remained just as ignorant myself, despite all the
major newspapers and magazines I regularly read.
Am I absolutely sure that any
or all of these stories are true? Certainly not, though I think they probably
are, given their overwhelming weight of supporting evidence. But absent any
willingness of our government or major media to properly investigate them, I
cannot say more.
However, this material does
conclusively establish something else, which has even greater significance.
These dramatic, well-documented accounts have been ignored by our national
media, rather than widely publicized. Whether this silence has been deliberate
or is merely due to incompetence remains unclear, but the silence itself is
proven fact.
A likely reason for this wall
of uninterest on so many important issues is that the disasters involved are
often bipartisan in nature, with both Democrats and Republicans being culpable
and therefore equally eager to hide their mistakes. Perhaps in the famous words
of Benjamin Franklin, they realize that they must all hang together or they
will surely all hang separately.
We always ridicule the 98
percent voter support that dictatorships frequently achieve in their elections
and plebiscites, yet perhaps those secret-ballot results may sometimes be
approximately correct, produced by the sort of overwhelming media control that
leads voters to assume there is no possible alternative to the existing regime.
Is such an undemocratic situation really so different from that found in our
own country, in which our two major parties agree on such a broad range of
controversial issues and, being backed by total media dominance, routinely
split 98 percent of the vote? A democracy may provide voters with a choice, but
that choice is largely determined by the information citizens receive from
their media.
Most of the Americans who
elected Barack Obama in 2008 intended their vote as a total repudiation of the
policies and personnel of the preceding George W. Bush administration. Yet once
in office, Obama’s crucial selections—Robert Gates at Defense, Timothy Geither
at Treasury, and Ben Bernanke at the Federal Reserve—were all top Bush
officials, and they seamlessly continued the unpopular financial bailouts and
foreign wars begun by his predecessor, producing what amounted to a third Bush
term.
Consider the fascinating
perspective of the recently deceased Boris Berezovsky, once the most powerful
of the Russian oligarchs and the puppet master behind President Boris Yeltsin
during the late 1990s. After looting billions in national wealth and elevating
Vladimir Putin to the presidency, he overreached himself and eventually went
into exile. According to the New York Times, he had planned to transform Russia into a fake two-party
state—one social-democratic and one neoconservative—in which heated public
battles would be fought on divisive, symbolic issues, while behind the scenes
both parties would actually be controlled by the same ruling elites. With the
citizenry thus permanently divided and popular dissatisfaction safely channeled
into meaningless dead-ends, Russia’s rulers could maintain unlimited wealth and
power for themselves, with little threat to their reign. Given America’s
history over the last couple of decades, perhaps we can guess where Berezovsky
got his idea for such a clever political scheme.
Major
References in The American Conservative:
[Erratum: In my text I mentioned that Bernard Kerik, Mayor Rudolph
Giuliani’s New York City police chief during the 9/11 attacks, was a high
school dropout with ties to organized crime, who is currently still serving his
federal prison sentence on related charges. This was correct. However,
President George W. Bush had nominated him to run America’s Department of
Homeland Security rather than to be America’s Director of National
Intelligence.]
(Republished from The American Conservative by
permission of author or representative)
