Tuesday, August 13, 2013
Tuesday, August 6, 2013
A COMPLETE EXPOSE WITH FOOT NOTES. John McCain, who has risen to political prominence on his image as a Vietnam POW war hero, has, inexplicably, worked very hard to hide from the public stunning information about American prisoners in Vietnam who, unlike him, didn’t return home.
McCain and the POW Cover-Up
The “war hero” candidate buried information about POWs left behind in Vietnam.
By John McCain, who has risen to political prominence on his image as a Vietnam POW war hero, has, inexplicably, worked very hard to hide from the public stunning information about American prisoners in Vietnam who, unlike him, didn’t return home. Throughout his Senate career, McCain has quietly sponsored and pushed into federal law a set of prohibitions that keep the most revealing information about these men buried as classified documents. Thus the war hero who people would logically imagine as a determined crusader for the interests of POWs and their families became instead the strange champion of hiding the evidence and closing the books.
Almost as striking is the manner in which the mainstream press has shied from reporting the POW story and McCain’s role in it, even as the Republican Party has made McCain’s military service the focus of his presidential campaign. Reporters who had covered the Vietnam War turned their heads and walked in other directions. McCain doesn’t talk about the missing men, and the press never asks him about them.
The sum of the secrets McCain has sought to hide is not small. There exists a telling mass of official documents, radio intercepts, witness depositions, satellite photos of rescue symbols that pilots were trained to use, electronic messages from the ground containing the individual code numbers given to airmen, a rescue mission by a special forces unit that was aborted twice by Washington—and even sworn testimony by two Defense secretaries that “men were left behind.” This imposing body of evidence suggests that a large number—the documents indicate probably hundreds—of the U.S. prisoners held by Vietnam were not returned when the peace treaty was signed in January 1973 and Hanoi released 591 men, among them Navy combat pilot John S. McCain.
Mass of Evidence
The Pentagon had been withholding significant information from POW
families for years. What’s more, the Pentagon’s POW/MIA operation had
been publicly shamed by internal whistleblowers and POW families for
holding back documents as part of a policy of “debunking” POW
intelligence even when the information was obviously credible.The pressure from the families and Vietnam veterans finally forced the creation, in late 1991, of a Senate Select Committee on POW/MIA Affairs. The chairman was John Kerry. McCain, as a former POW, was its most pivotal member. In the end, the committee became part of the debunking machine.
One of the sharpest critics of the Pentagon’s performance was an insider, Air Force Lt. Gen. Eugene Tighe, who headed the Defense Intelligence Agency (DIA) during the 1970s. He openly challenged the Pentagon’s position that no live prisoners existed, saying that the evidence proved otherwise. McCain was a bitter opponent of Tighe, who was eventually pushed into retirement.
Included in the evidence that McCain and his government allies suppressed or sought to discredit is a transcript of a senior North Vietnamese general’s briefing of the Hanoi politburo, discovered in Soviet archives by an American scholar in 1993. The briefing took place only four months before the 1973 peace accords. The general, Tran Van Quang, told the politburo members that Hanoi was holding 1,205 American prisoners but would keep many of them at war’s end as leverage to ensure getting war reparations from Washington.
Throughout the Paris negotiations, the North Vietnamese tied the prisoner issue tightly to the issue of reparations. They were adamant in refusing to deal with them separately. Finally, in a Feb. 2, 1973 formal letter to Hanoi’s premier, Pham Van Dong, Nixon pledged $3.25 billion in “postwar reconstruction” aid “without any political conditions.” But he also attached to the letter a codicil that said the aid would be implemented by each party “in accordance with its own constitutional provisions.” That meant Congress would have to approve the appropriation, and Nixon and Kissinger knew well that Congress was in no mood to do so. The North Vietnamese, whether or not they immediately understood the double-talk in the letter, remained skeptical about the reparations promise being honored—and it never was. Hanoi thus appears to have held back prisoners—just as it had done when the French were defeated at Dien Bien Phu in 1954 and withdrew their forces from Vietnam. In that case, France paid ransoms for prisoners and brought them home.
In a private briefing in 1992, high-level CIA officials told me that as the years passed and the ransom never came, it became more and more difficult for either government to admit that it knew from the start about the unacknowledged prisoners. Those prisoners had not only become useless as bargaining chips but also posed a risk to Hanoi’s desire to be accepted into the international community. The CIA officials said their intelligence indicated strongly that the remaining men—those who had not died from illness or hard labor or torture—were eventually executed.
My own research, detailed below, has convinced me that it is not likely that more than a few—if any—are alive in captivity today. (That CIA briefing at the Agency’s Langley, Virginia, headquarters was conducted “off the record,” but because the evidence from my own reporting since then has brought me to the same conclusion, I felt there was no longer any point in not writing about the meeting.)
For many reasons, including the absence of a political constituency for the missing men other than their families and some veterans’ groups, very few Americans are aware of the POW story and of McCain’s role in keeping it out of public view and denying the existence of abandoned POWs. That is because McCain has hardly been alone in his campaign to hide the scandal.
The Arizona senator, now the Republican candidate for president, has actually been following the lead of every White House since Richard Nixon’s, and thus of every CIA director, Pentagon chief, and national security adviser, not to mention Dick Cheney, who was George H.W. Bush’s Defense secretary. Their biggest accomplice has been an indolent press, particularly in Washington.
McCain’s Role
An early and critical McCain secrecy move involved 1990 legislation
that started in the House of Representatives. A brief and simple
document, it was called “the Truth Bill” and
would have compelled complete transparency about prisoners and missing
men. Its core sentence reads: “[The] head of each department or agency
which holds or receives any records and information, including
live-sighting reports, which have been correlated or possibly correlated
to United States personnel listed as prisoner of war or missing in
action from World War II, the Korean conflict and the Vietnam conflict,
shall make available to the public all such records held or received by
that department or agency.”Bitterly opposed by the Pentagon (and thus McCain), the bill went nowhere. Reintroduced the following year, it again disappeared. But a few months later, a new measure, known as “the McCain Bill,”suddenly appeared. By creating a bureaucratic maze from which only a fraction of the documents could emerge—only records that revealed no POW secrets—it turned the Truth Bill on its head. The McCain bill became law in 1991 and remains so today. So crushing to transparency are its provisions that it actually spells out for the Pentagon and other agencies several rationales, scenarios, and justifications for not releasing any information at all—even about prisoners discovered alive in captivity. Later that year, the Senate Select Committee was created, where Kerry and McCain ultimately worked together to bury evidence.
McCain was also instrumental in amending the Missing Service Personnel Act, which had been strengthened in 1995 by POW advocates to include criminal penalties, saying, “Any government official who knowingly and willfully withholds from the file of a missing person any information relating to the disappearance or whereabouts and status of a missing person shall be fined as provided in Title 18 or imprisoned not more than one year or both.” A year later, in a closed House-Senate conference on an unrelated military bill, McCain, at the behest of the Pentagon, attached a crippling amendment to the act, stripping out its only enforcement teeth, the criminal penalties, and reducing the obligations of commanders in the field to speedily search for missing men and to report the incidents to the Pentagon.
About the relaxation of POW/MIA obligations on commanders in the field, a public McCain memo said, “This transfers the bureaucracy involved out of the [battle] field to Washington.” He wrote that the original legislation, if left intact, “would accomplish nothing but create new jobs for lawyers and turn military commanders into clerks.”
McCain argued that keeping the criminal penalties would have made it impossible for the Pentagon to find staffers willing to work on POW/MIA matters. That’s an odd argument to make. Were staffers only “willing to work” if they were allowed to conceal POW records? By eviscerating the law, McCain gave his stamp of approval to the government policy of debunking the existence of live POWs.
McCain has insisted again and again that all the evidence—documents, witnesses, satellite photos, two Pentagon chiefs’ sworn testimony, aborted rescue missions, ransom offers apparently scorned—has been woven together by unscrupulous deceivers to create an insidious and unpatriotic myth. He calls it the “bizarre rantings of the MIA hobbyists.” He has regularly vilified those who keep trying to pry out classified documents as “hoaxers,” “charlatans,” “conspiracy theorists,” and “dime-store Rambos.”
Some of McCain’s fellow captives at Hoa Lo prison in Hanoi didn’t share his views about prisoners left behind. Before he died of leukemia in 1999, retired Col. Ted Guy, a highly admired POW and one of the most dogged resisters in the camps, wrote an angry open letter to the senator in an MIA newsletter—a response to McCain’s stream of insults hurled at MIA activists. Guy wrote, “John, does this [the insults] include Senator Bob Smith [a New Hampshire Republican and activist on POW issues] and other concerned elected officials? Does this include the families of the missing where there is overwhelming evidence that their loved ones were ‘last known alive’? Does this include some of your fellow POWs?”
It’s not clear whether the taped confession McCain gave to his captors to avoid further torture has played a role in his postwar behavior in the Senate. That confession was played endlessly over the prison loudspeaker system at Hoa Lo—to try to break down other prisoners—and was broadcast over Hanoi’s state radio. Reportedly, he confessed to being a war criminal who had bombed civilian targets. The Pentagon has a copy of the confession but will not release it. Also, no outsider I know of has ever seen a non-redacted copy of the debriefing of McCain when he returned from captivity, which is classified but could be made public by McCain.
All humans have breaking points. Many men undergoing torture give confessions, often telling huge lies so their fakery will be understood by their comrades and their country. Few will fault them. But it was McCain who apparently felt he had disgraced himself and his military family. His father, John S. McCain II, was a highly regarded rear admiral then serving as commander of all U.S. forces in the Pacific. His grandfather was also a rear admiral.
In his bestselling 1999 autobiography, Faith of My Fathers, McCain says he felt bad throughout his captivity because he knew he was being treated more leniently than his fellow POWs, owing to his high-ranking father and thus his propaganda value. Other prisoners at Hoa Lo say his captors considered him a prize catch and called him the “Crown Prince,” something McCain acknowledges in the book.
Also in this memoir, McCain expresses guilt at having broken under torture and given the confession. “I felt faithless and couldn’t control my despair,” he writes, revealing that he made two “feeble” attempts at suicide. (In later years, he said he tried to hang himself with his shirt and guards intervened.) Tellingly, he says he lived in “dread” that his father would find out about the confession. “I still wince,” he writes, “when I recall wondering if my father had heard of my disgrace.”
He says that when he returned home, he told his father about the confession, but “never discussed it at length”—and the admiral, who died in 1981, didn’t indicate he had heard anything about it before. But he had. In the 1999 memoir, the senator writes, “I only recently learned that the tape … had been broadcast outside the prison and had come to the attention of my father.”
Is McCain haunted by these memories? Does he suppress POW information because its surfacing would rekindle his feelings of shame? On this subject, all I have are questions.
Many stories have been written about McCain’s explosive temper, so volcanic that colleagues are loath to speak openly about it. One veteran congressman who has observed him over the years asked for confidentiality and made this brief comment: “This is a man not at peace with himself.”
He was certainly far from calm on the Senate POW committee. He browbeat expert witnesses who came with information about unreturned POWs. Family members who have personally faced McCain and pressed him to end the secrecy also have been treated to his legendary temper. He has screamed at them, insulted them, brought women to tears. Mostly his responses to them have been versions of: How dare you question my patriotism? In 1996, he roughly pushed aside a group of POW family members who had waited outside a hearing room to appeal to him, including a mother in a wheelchair.
But even without answers to what may be hidden in the recesses of McCain’s mind, one thing about the POW story is clear: if American prisoners were dishonored by being written off and left to die, that’s something the American public ought to know about.
10 Key Pieces of Evidence That Men Were Left Behind
1. In Paris, where the Vietnam peace treaty was
negotiated, the United States asked Hanoi for the list of American
prisoners to be returned, fearing that Hanoi would hold some prisoners
back. The North Vietnamese refused, saying they would produce the list
only after the treaty was signed. Nixon agreed with Kissinger that they
had no leverage left, and Kissinger signed the accord on Jan. 27, 1973
without the prisoner list. When Hanoi produced its list of 591 prisoners
the next day, U.S. intelligence agencies expressed shock at the low
number. Their number was hundreds higher. The New York Times published
a long, page-one story on Feb. 2, 1973 about the discrepancy,
especially raising questions about the number of prisoners held in Laos,
only nine of whom were being returned. The headline read, in part,
“Laos POW List Shows 9 from U.S.—Document Disappointing to Washington as
311 Were Believed Missing.” And the story, by John Finney, said that
other Washington officials “believe the number of prisoners [in Laos] is
probably substantially higher.” The paper never followed up with any
serious investigative reporting—nor did any other mainstream news
organization.2. Two Defense secretaries who served during the Vietnam War testified to the Senate POW committee in September 1992 that prisoners were not returned. James Schlesinger and Melvin Laird, both speaking at a public session and under oath, said they based their conclusions on strong intelligence data—letters, eyewitness reports, even direct radio contacts. Under questioning, Schlesinger chose his words carefully, understanding clearly the volatility of the issue: “I think that as of now that I can come to no other conclusion … some were left behind.” This ran counter to what President Nixon told the public in a nationally televised speech on March 29, 1973, when the repatriation of the 591 was in motion: “Tonight,” Nixon said, “the day we have all worked and prayed for has finally come. For the first time in 12 years, no American military forces are in Vietnam. All our American POWs are on their way home.” Documents unearthed since then show that aides had already briefed Nixon about the contrary evidence.
Schlesinger was asked by the Senate committee for his explanation of why President Nixon would have made such a statement when he knew Hanoi was still holding prisoners. He replied, “One must assume that we had concluded that the bargaining position of the United States … was quite weak. We were anxious to get our troops out and we were not going to roil the waters…” This testimony struck me as a bombshell. The New York Times appropriately reported it on page one but again there was no sustained follow-up by the Times or any other major paper or national news outlet.
3. Over the years, the DIA received more than 1,600 first-hand sightings of live American prisoners and nearly 14,000 second-hand reports. Many witnesses interrogated by CIA or Pentagon intelligence agents were deemed “credible” in the agents’ reports. Some of the witnesses were given lie-detector tests and passed. Sources provided me with copies of these witness reports, which are impressive in their detail. A lot of the sightings described a secondary tier of prison camps many miles from Hanoi. Yet the DIA, after reviewing all these reports, concluded that they “do not constitute evidence” that men were alive.
4. In the late 1970s and early 1980s, listening stations picked up messages in which Laotian military personnel spoke about moving American prisoners from one labor camp to another. These listening posts were manned by Thai communications officers trained by the National Security Agency (NSA), which monitors signals worldwide. The NSA teams had moved out after the fall of Saigon in 1975 and passed the job to the Thai allies. But when the Thais turned these messages over to Washington, the intelligence community ruled that since the intercepts were made by a “third party”—namely Thailand—they could not be regarded as authentic. That’s some Catch-22: the U.S. trained a third party to take over its role in monitoring signals about POWs, but because that third party did the monitoring, the messages weren’t valid.
Here, from CIA files, is an example that clearly exposes the farce. On Dec. 27, 1980, a Thai military signal team picked up a message saying that prisoners were being moved out of Attopeu (in southern Laos) by aircraft “at 1230 hours.” Three days later a message was sent from the CIA station in Bangkok to the CIA director’s office in Langley. It read, in part: “The prisoners … are now in the valley in permanent location (a prison camp at Nhommarath in Central Laos). They were transferred from Attopeu to work in various places … POWs were formerly kept in caves and are very thin, dark and starving.” Apparently the prisoners were real. But the transmission was declared “invalid” by Washington because the information came from a “third party” and thus could not be deemed credible.
5. A series of what appeared to be distress signals from Vietnam and Laos were captured by the government’s satellite system in the late 1980s and early ’90s. (Before that period, no search for such signals had been put in place.) Not a single one of these markings was ever deemed credible. To the layman’s eye, the satellite photos, some of which I’ve seen, show markings on the ground that are identical to the signals that American pilots had been specifically trained to use in their survival courses—such as certain letters, like X or K, drawn in a special way. Other markings were the secret four-digit authenticator numbers given to individual pilots. But time and again, the Pentagon, backed by the CIA, insisted that humans had not made these markings. What were they, then? “Shadows and vegetation,” the government said, insisting that the markings were merely normal topographical contours like saw-grass or rice-paddy divider walls. It was the automatic response—shadows and vegetation. On one occasion, a Pentagon photo expert refused to go along. It was a missing man’s name gouged into a field, he said, not trampled grass or paddy berms. His bosses responded by bringing in an outside contractor who found instead, yes, shadows and vegetation. This refrain led Bob Taylor, a highly regarded investigator on the Senate committee staff who had examined the photographic evidence, to comment to me: “If grass can spell out people’s names and secret digit codes, then I have a newfound respect for grass.”
6. On Nov. 11, 1992, Dolores Alfond, the sister of missing airman Capt. Victor Apodaca and chair of the National Alliance of Families, an organization of relatives of POW/MIAs, testified at one of the Senate committee’s public hearings. She asked for information about data the government had gathered from electronic devices used in a classified program known as PAVE SPIKE.
The devices were motion sensors, dropped by air, designed to pick up enemy troop movements. Shaped on one end like a spike with an electronic pod and antenna on top, they were designed to stick in the ground as they fell. Air Force planes would drop them along the Ho Chi Minh trail and other supply routes. The devices, though primarily sensors, also had rescue capabilities. Someone on the ground—a downed airman or a prisoner on a labor gang —could manually enter data into the sensor. All data were regularly collected electronically by U.S. planes flying overhead. Alfond stated, without any challenge or contradiction by the committee, that in 1974, a year after the supposedly complete return of prisoners, the gathered data showed that a person or people had manually entered into the sensors—as U.S. pilots had been trained to do—no less than 20 authenticator numbers that corresponded exactly to the classified authenticator numbers of 20 U.S. POWs who were lost in Laos. Alfond added, according to the transcript, “This PAVE SPIKE intelligence is seamless, but the committee has not discussed it or released what it knows about PAVE SPIKE.”
McCain attended that committee hearing specifically to confront Alfond because of her criticism of the panel’s work. He bellowed and berated her for quite a while. His face turning anger-pink, he accused her of “denigrating” his “patriotism.” The bullying had its effect—she began to cry.
After a pause Alfond recovered and tried to respond to his scorching tirade, but McCain simply turned away and stormed out of the room. The PAVE SPIKE file has never been declassified. We still don’t know anything about those 20 POWs.
7. As previously mentioned, in April 1993 in a Moscow archive, a researcher from Harvard, Stephen Morris, unearthed and made public the transcript of a briefing that General Tran Van Quang gave to the Hanoi politburo four months before the signing of the Paris peace accords in 1973.
In the transcript, General Quang told the Hanoi politburo that 1,205 U.S. prisoners were being held. Quang said that many of the prisoners would be held back from Washington after the accords as bargaining chips for war reparations. General Quang’s report added: “This is a big number. Officially, until now, we published a list of only 368 prisoners of war. The rest we have not revealed. The government of the USA knows this well, but it does not know the exact number … and can only make guesses based on its losses. That is why we are keeping the number of prisoners of war secret, in accordance with the politburo’s instructions.” The report then went on to explain in clear and specific language that a large number would be kept back to ensure reparations.
The reaction to the document was immediate. After two decades of denying it had kept any prisoners, Hanoi responded to the revelation by calling the transcript a fabrication.
Similarly, Washington—which had over the same two decades refused to recant Nixon’s declaration that all the prisoners had been returned—also shifted into denial mode. The Pentagon issued a statement saying the document “is replete with errors, omissions and propaganda that seriously damage its credibility,” and that the numbers were “inconsistent with our own accounting.”
Neither American nor Vietnamese officials offered any rationale for who would plant a forged document in the Soviet archives and why they would do so. Certainly neither Washington nor Moscow—closely allied with Hanoi—would have any motive, since the contents were embarrassing to all parties, and since both the United States and Vietnam had consistently denied the existence of unreturned prisoners. The Russian archivists simply said the document was “authentic.”
8. In his 2002 book, Inside Delta Force, retired Command Sgt. Maj. Eric Haney described how in 1981 his special forces unit, after rigorous training for a POW rescue mission, had the mission suddenly aborted, revived a year later, and again abruptly aborted. Haney writes that this abandonment of captured soldiers ate at him for years and left him disillusioned about his government’s vows to leave no men behind. “Years later, I spoke at length with a former highly placed member of the North Vietnamese diplomatic corps, and this person asked me point-blank: ‘Why did the Americans never attempt to recover their remaining POWs after the conclusion of the war?’” Haney writes. He continued, saying that he came to believe senior government officials had called off those missions in 1981 and 1982. (His account is on pages 314 to 321 of my paperback copy of the book.)
9. There is also evidence that in the first months of Ronald Reagan’s presidency in 1981, the White House received a ransom proposal for a number of POWs being held by Hanoi in Indochina. The offer, which was passed to Washington from an official of a third country, was apparently discussed at a meeting in the Roosevelt Room attended by Reagan, Vice President Bush, CIA director William Casey, and National Security Adviser Richard Allen. Allen confirmed the offer in sworn testimony to the Senate POW committee on June 23, 1992.
Allen was allowed to testify behind closed doors and no information was released. But a San Diego Union-Tribune reporter, Robert Caldwell, obtained the portion relating to the ransom offer and reported on it. The ransom request was for $4 billion, Allen testified. He said he told Reagan that “it would be worth the president’s going along and let’s have the negotiation.” When his testimony appeared in theUnion-Tribune, Allen quickly wrote a letter to the panel, this time not under oath, recanting the ransom story and claiming his memory had played tricks on him. His new version was that some POW activists had asked him about such an offer in a meeting that took place in 1986, when he was no longer in government. “It appears,” he said in the letter, “that there never was a 1981 meeting about the return of POW/MIAs for $4 billion.”
But the episode didn’t end there. A Treasury agent on Secret Service duty in the White House, John Syphrit, came forward to say he had overheard part of the ransom conversation in the Roosevelt Room in 1981, when the offer was discussed by Reagan, Bush, Casey, Allen, and other cabinet officials.
Syphrit, a veteran of the Vietnam War, told the committee he was willing to testify, but they would have to subpoena him. Treasury opposed his appearance, arguing that voluntary testimony would violate the trust between the Secret Service and those it protects. It was clear that coming in on his own could cost Syphrit his career. The committee voted 7 to 4 not to subpoena him.
In the committee’s final report, dated Jan. 13, 1993 (on page 284), the panel not only chastised Syphrit for his failure to testify without a subpoena (“The committee regrets that the Secret Service agent was unwilling …”), but noted that since Allen had recanted his testimony about the Roosevelt Room briefing, Syphrit’s testimony would have been “at best, uncorroborated by the testimony of any other witness.” The committee omitted any mention that it had made a decision not to ask the other two surviving witnesses, Bush and Reagan, to give testimony under oath. (Casey had died.)
10. In 1990, Col. Millard Peck, a decorated infantry veteran of Vietnam then working at the DIA as chief of the Asia Division for Current Intelligence, asked for the job of chief of the DIA’s Special Office for Prisoners of War and Missing in Action. His reason for seeking the transfer, which was not a promotion, was that he had heard from officials throughout the Pentagon that the POW/MIA office had been turned into a waste-disposal unit for getting rid of unwanted evidence about live prisoners—a “black hole,” these officials called it.
Peck explained all this in his telling resignation letter of Feb. 12, 1991, eight months after he had taken the job. He said he viewed it as “sort of a holy crusade” to restore the integrity of the office but was defeated by the Pentagon machine. The four-page, single-spaced letter was scathing, describing the putative search for missing men as “a cover-up.”
Peck charged that, at its top echelons, the Pentagon had embraced a “mind-set to debunk” all evidence of prisoners left behind. “That national leaders continue to address the prisoner of war and missing in action issue as the ‘highest national priority,’ is a travesty,” he wrote. “The entire charade does not appear to be an honest effort, and may never have been. … Practically all analysis is directed to finding fault with the source. Rarely has there been any effective, active follow through on any of the sightings, nor is there a responsive ‘action arm’ to routinely and aggressively pursue leads.”
“I became painfully aware,” his letter continued, “that I was not really in charge of my own office, but was merely a figurehead or whipping boy for a larger and totally Machiavellian group of players outside of DIA … I feel strongly that this issue is being manipulated and controlled at a higher level, not with the goal of resolving it, but more to obfuscate the question of live prisoners and give the illusion of progress through hyperactivity.” He named no names but said these players are “unscrupulous people in the Government or associated with the Government” who “have maintained their distance and remained hidden in the shadows, while using the [POW] Office as a ‘toxic waste dump’ to bury the whole ‘mess’ out of sight.” Peck added that “military officers … who in some manner have ‘rocked the boat’ [have] quickly come to grief.”
Peck concluded, “From what I have witnessed, it appears that any soldier left in Vietnam, even inadvertently, was, in fact, abandoned years ago, and that the farce that is being played is no more than political legerdemain done with ‘smoke and mirrors’ to stall the issue until it dies a natural death.”
The disillusioned colonel not only resigned but asked to be retired immediately from active military service. The press never followed up.
My Pursuit of the Story
I covered the war in Cambodia and Vietnam, but came to the POW
information only slowly afterward, when military officers I knew from
that conflict began coming to me with maps and POW sightings and
depositions by Vietnamese witnesses.I was then city editor of the New York Times, no longer involved in foreign or national stories, so I took the data to the appropriate desks and suggested it was material worth pursuing. There were no takers. Some years later, in 1991, when I was an op-ed columnist at Newsday, the aforementioned special Senate committee was formed to probe the POW issue. I saw this as an opening and immersed myself in the reporting.
At Newsday, I wrote 36 columns over a two-year period, as well as a four-part series on a trip I took to North Vietnam to report on what happened to one missing pilot who was shot down over the Ho Chi Minh trail and captured when he parachuted down. After Newsday, I wrote thousands more words on the subject for other outlets. Some of the pieces were about McCain’s key role.
Though I wrote on many subjects for Life, Vanity Fair, and Washington Monthly, my POW articles appeared in Penthouse, the Village Voice, and APBnews.com. Mainstream publications just weren’t interested. Their disinterest was part of what motivated me, and I became one of a very short list of journalists who considered the story important.
Serving in the Army in Germany during the Cold War and witnessing combat firsthand as a reporter in India and Indochina led me to have great respect for those who fight for their country. To my mind, we dishonored U.S. troops when our government failed to bring them home from Vietnam after the 591 others were released—and then claimed they didn’t exist. And politicians dishonor themselves when they pay lip service to the bravery and sacrifice of soldiers only to leave untold numbers behind, rationalizing to themselves that it’s merely one of the unfortunate costs of war.
John McCain—now campaigning for the White House as a war hero, maverick, and straight shooter—owes the voters some explanations. The press were long ago wooed and won by McCain’s seeming openness, Lone Ranger pose, and self-deprecating humor, which may partly explain their ignoring his record on POWs. In the numerous, lengthy McCain profiles that have appeared of late in papers like theNew York Times, the Washington Post, and the Wall Street Journal, I may have missed a clause or a sentence along the way, but I have not found a single mention of his role in burying information about POWs. Television and radio news programs have been similarly silent.
Reporters simply never ask him about it. They didn’t when he ran unsuccessfully for the Republican nomination in 2000. They haven’t now, despite the fact that we’re in the midst of another war—a war he supports and one that has echoes of Vietnam. The only explanation McCain has ever offered for his leadership on legislation that seals POW files is that he believes the release of such information would only stir up fresh grief for the families of those who were never accounted for in Vietnam. Of the scores of POW families I’ve met over the years, only a few have said they want the books closed without knowing what happened to their men. All the rest say that not knowing is exactly what grieves them.
Isn’t it possible that what really worries those intent on keeping the POW documents buried is the public disgust that the contents of those files would generate?
How the Senate Committee Perpetuated the Debunking
In its early months, the Senate Select Committee on POW/MIA Affairs
gave the appearance of being committed to finding out the truth about
the MIAs. As time went on, however, it became clear that they were
cooperating in every way with the Pentagon and CIA, who often seemed to
be calling the shots, even setting the agendas for certain key hearings.
Both agencies held back the most important POW files. Dick Cheney was
the Pentagon chief then; Robert Gates, now the Pentagon chief, was the
CIA director.Further, the committee failed to question any living president. Reagan declined to answer questions; the committee didn’t contest his refusal. Nixon was given a pass. George H.W. Bush, the sitting president, whose prints were all over this issue from his days as CIA chief in the 1970s, was never even approached. Troubled by these signs, several committee staffers began asking why the agencies they should be probing had been turned into committee partners and decision makers. Memos to that effect were circulated. The staff made the following finding, using intelligence reports marked “credible” that covered POW sightings through 1989: “There can be no doubt that POWs were alive … as late as 1989.” That finding was never released. Eventually, much of the staff was in rebellion.
This internecine struggle continued right up to the committee’s last official act—the issuance of its final report. The Executive Summary, which comprised the first 43 pages, was essentially a whitewash, saying that only “a small number” of POWs could have been left behind in 1973 and that there was little likelihood that any prisoners could still be alive. The Washington press corps, judging from its coverage, seems to have read only this air-brushed summary, which had been closely controlled.
But the rest of the 1,221-page Report on POW/MIAs was quite different. Sprinkled throughout are pieces of hard evidence that directly contradict the summary’s conclusions. This documentation established that a significant number of prisoners were left behind—and that top government officials knew this from the start. These candid findings were inserted by committee staffers who had unearthed the evidence and were determined not to allow the truth to be sugar-coated.
If the Washington press corps did actually read the body of the report and then failed to report its contents, that would be a scandal of its own. The press would then have knowingly ignored the steady stream of findings in the body of the report that refuted the summary and indicated that the number of abandoned men was not small but considerable. The report gave no figures but estimates from various branches of the intelligence community ranged up to 600. The lowest estimate was 150.
Highlights of the report that undermine the benign conclusions of the Executive Summary:
• Pages 207-209: These three pages contain revelations of what appear to be either massive intelligence failures or bad intentions—or both. The report says that until the committee brought up the subject in 1992, no branch of the intelligence community that dealt with analysis of satellite and lower-altitude photos had ever been informed of the specific distress signals U.S. personnel were trained to use in the Vietnam War, nor had they ever been tasked to look for any such signals at all from possible prisoners on the ground.
The committee decided, however, not to seek a review of old photography, saying it “would cause the expenditure of large amounts of manpower and money with no expectation of success.” It might also have turned up lots of distress-signal numbers that nobody in the government was looking for from 1973 to 1991, when the committee opened shop. That would have made it impossible for the committee to write the Executive Summary it seemed determined to write.
The failure gets worse. The committee also discovered that the DIA, which kept the lists of authenticator numbers for pilots and other personnel, could not “locate” the lists of these codes for Army, Navy, or Marine pilots. They had lost or destroyed the records. The Air Force list was the only one intact, as it had been preserved by a different intelligence branch.
The report concluded, “In theory, therefore, if a POW still living in captivity [today], were to attempt to communicate by ground signal, smuggling out a note or by whatever means possible, and he used his personal authenticator number to confirm his identity, the U.S. government would be unable to provide such confirmation, if his number happened to be among those numbers DIA cannot locate.”
It’s worth remembering that throughout the period when this intelligence disaster occurred—from the moment the treaty was signed in 1973 until 1991—the White House told the public that it had given the search for POWs and POW information the “highest national priority.”
• Page 13: Even in the Executive Summary, the report acknowledges the existence of clear intelligence, made known to government officials early on, that important numbers of captured U.S. POWs were not on Hanoi’s repatriation list. After Hanoi released its list (showing only ten names from Laos—nine military men and one civilian), President Nixon sent a message on Feb. 2, 1973 to Hanoi’s Prime Minister Pham Van Dong saying, “U.S. records show there are 317 American military men unaccounted for in Laos and it is inconceivable that only ten of these men would be held prisoner in Laos.”
Nixon was right. It was inconceivable. Then why did the president, less than two months later, on March 29, 1973, announce on national television that “all of our American POWs are on their way home”?
On April 13, 1973, just after all 591 men on Hanoi’s official list had returned to American soil, the Pentagon got into step with the president and announced that there was no evidence of any further live prisoners in Indochina (this is on page 248).
• Page 91: A lengthy footnote provides more confirmation of the White House’s knowledge of abandoned POWs. The footnote reads, “In a telephone conversation with Select Committee Vice-Chairman Bob Smith on December 29, 1992, Dr. Kissinger said that he had informed President Nixon during the 60-day period after the peace agreement was signed that U.S. intelligence officials believed that the list of prisoners captured in Laos was incomplete. According to Dr. Kissinger, the President responded by directing that the exchange of prisoners on the lists go forward, but added that a failure to account for the additional prisoners after Operation Homecoming would lead to a resumption of bombing. Dr. Kissinger said that the President was later unwilling to carry through on this threat.”
When Kissinger learned of the footnote while the final editing of the committee report was in progress,he and his lawyers lobbied fiercely through two Republican allies on the panel—one of them was John McCain—to get the footnote expunged. The effort failed. The footnote stayed intact.
• Pages 85-86: The committee report quotes Kissinger from his memoirs, writing solely in reference to prisoners in Laos: “We knew of at least 80 instances in which an American serviceman had been captured alive and subsequently disappeared. The evidence consisted either of voice communications from the ground in advance of capture or photographs and names published by the Communists. Yet none of these men was on the list of POWs handed over after the Agreement.”
Then why did he swear under oath to the committee in 1992 that he never had any information that specific, named soldiers were captured alive and hadn’t been returned by Vietnam?
• Page 89: In the middle of the prisoner repatriation and U.S. troop-withdrawal process agreed to in the treaty, when it became clear that Hanoi was not releasing everyone it held, a furious chairman of the Joint Chiefs of Staff, Adm. Thomas Moorer, issued an order halting the troop withdrawal until Hanoi complied with the agreement. He cited in particular the known prisoners in Laos. The order was retracted by President Nixon the next day. In 1992, Moorer, by then retired, testified under oath to the committee that his order had received the approval of the president, the national security adviser, and the secretary of Defense. Nixon, however, in a letter to the committee, wrote, “I do not recall directing Admiral Moorer to send this cable.”
The report did not include the following information: behind closed doors, a senior intelligence officer had testified to the POW committee that when Moorer’s order was rescinded, the angry admiral sent a “back-channel” message to other key military commanders telling them that Washington was abandoning known live prisoners. “Nixon and Kissinger are at it again,” he wrote. “SecDef and SecState have been cut out of the loop.” In 1973, the witness was working in the office that processed this message. His name and his testimony are still classified. A source present for the testimony provided me with this information and also reported that in that same time period, Moorer had stormed into Defense Secretary Schlesinger’s office and, pounding on his desk, yelled: “The bastards have still got our men.” Schlesinger, in his own testimony to the committee a few months later, was asked about—and corroborated—this account.
• Pages 95-96: In early April 1973, Deputy Defense Secretary William Clements “summoned” Dr. Roger Shields, then head of the Pentagon’s POW/MIA Task Force, to his office to work out “a new public formulation” of the POW issue; now that the White House had declared all prisoners to have been returned, a new spin was needed. Shields, under oath, described the meeting to the committee. He said Clements told him, “All the American POWs are dead.” Shields said he replied: “You can’t say that.” Clements shot back: “You didn’t hear me. They are all dead.” Shields testified that at that moment he thought he was going to be fired, but he escaped from his boss’s office still holding his job.
• Pages 97-98: A couple of days later, on April 11, 1973, a day before Shields was to hold a Pentagon press conference on POWs, he and Gen. Brent Scowcroft, then the deputy national security adviser, went to the Oval Office to discuss the “new public formulation” and its presentation with President Nixon.
The next day, reporters right off asked Shields about missing POWs. Shields fudged his answers. He said, “We have no indications at this time that there are any Americans alive in Indochina.” But he went on to say that there had not been “a complete accounting” of those lost in Laos and that the Pentagon would press on to account for the missing—a seeming acknowledgement that some Americans were still alive and unaccounted for.
The press, however, seized on Shields’s denials. One headline read, “POW Unit Boss: No Living GIs Left in Indochina.”
• Page 97: The POW committee, knowing that Nixon taped all his meetings in the Oval Office, sought the tape of that April 11, 1973 Nixon-Shields-Scowcroft meeting to find out what Nixon had been told and what he had said about the evidence of POWs still in Indochina. The committee also knew there had been other White House meetings that centered on intelligence about live POWs. A footnote on page 97 states that Nixon’s lawyers said they would provide access to the April 11 tape “only if the Committee agreed not to seek any other White House recordings from this time period.” The footnote says that the committee rejected these terms and got nothing. The committee never made public this request for Nixon tapes until the brief footnote in its 1993 report.
McCain’s Catch-22
None of this compelling evidence in the committee’s full report
dislodged McCain from his contention that the whole POW issue was a
concoction by deluded purveyors of a “conspiracy theory.” But an honest
review of the full report, combined with the other documentary evidence,
tells the story of a frustrated and angry president, and his national
security adviser, furious at being thwarted at the peace table by a
small, much less powerful country that refused to bow to Washington’s
terms. That president seems to have swallowed hard and accepted a treaty
that left probably hundreds of American prisoners in Hanoi’s hands, to
be used as bargaining chips for reparations.Maybe Nixon and Kissinger told themselves that they could get the prisoners home after some time had passed. But perhaps it proved too hard to undo a lie as big as this one. Washington said no prisoners were left behind, and Hanoi swore it had returned all of them. How could either side later admit it had lied? Time went by and as neither side budged, telling the truth became even more difficult and remote. The public would realize that Washington knew of the abandoned men all along. The truth, after men had been languishing in foul prison cells, could get people impeached or thrown in jail.
Which brings us to today, when the Republican candidate for president is the contemporary politician most responsible for keeping the truth about this matter hidden. Yet he says he’s the right man to be the commander in chief, and his credibility in making this claim is largely based on his image as a POW hero.
On page 468 of the 1,221-page report, McCain parsed his POW position oddly, “We found no compelling evidence to prove that Americans are alive in captivity today. There is some evidence—though no proof—to suggest only the possibility that a few Americans may have been kept behind after the end of America’s military involvement in Vietnam.”
“Evidence though no proof.” Clearly, no one could meet McCain’s standard of proof as long as he is leading a government crusade to keep the truth buried.
“We in the mujahideen are imperfect beings trying to establish a perfect religion,” Hassan added. “I apologize for any mistakes I have made in this endeavor”
Hassan's opening statement (he's representing himself):
“Evidence will show I was on the wrong side of America’s war and I later switched sides,”
“We in the mujahideen are imperfect beings trying to establish a perfect religion,” Hassan added. “I apologize for any mistakes I have made in this endeavor”
Hassan also does not deny shouting “Allahu akbar!” — Arabic for “God is great!” – before committing the deadliest mass shooting ever on a U.S. military base
Up a tall ladder and down a short rope.
P.S. Having admitted in open court to waging war against the United States; a charge of Treason should now be appended to the charge sheet and Obama 's name should be added to the charges.
After nearly four years of delays as Maj Nidal Hassan mocked the Army and the military’s judicial system, the Ft. Hood shooter’s trial began today. Hassan gave a brief opening statement in which he confessed to trying to kill as many American soldiers as he could.
“Evidence will show I was on the wrong side of America’s war and I later switched sides,” Maj. Nidal Malik Hassan, who is representing himself, declared during a two-minute opening statement in a heavily guarded courtroom on the base.The Obama administration classifies Hassan rampage as “workplace violence,” a politically useful designation that allows the administration to claim that there have been no terrorist attacks on American soil on its watch. The “workplace violence” designation also deprives survivors of their due military benefits and medals.
“We in the mujahideen are imperfect beings trying to establish a perfect religion,” Hassan added. “I apologize for any mistakes I have made in this endeavor”
It was a jarring opening argument from a Muslim fanatic who has admitted killing 13 of his countrymen and wounding 32 others, and claims he did it to protect Taliban fighters in Afghanistan.
A son of Palestinian immigrants who grew up in Virginia, Hassan also does not deny shouting “Allahu akbar!” — Arabic for “God is great!” – before committing the deadliest mass shooting ever on a U.S. military base.
OBAMA MUST BE DEPOSED... HE IS WORKING WITH THE ENEMY... TO HARM AMERICANS..
ARTICLE 3 SECTION 3 OF THE US CONSTITUTION APPLIES!
The flawed logic of the Leftist minimum wage increase law. which is better: 600 jobs at $8.25/hr or 0 jobs at $12.50/hr?
The flawed logic of using 1968 as the baseline to calculate any minimum wage hike!!
Joe Biden’s flawed logic of a 1968 minimum wage hike
In an op-ed in today’s Wall Street Journal, Michael Saltsman exposes the flawed logic of Vice-President Joe Biden’s selection of 1968 as the base year to justify his claim that a hike in the minimum wage is overdue.
According to one news report,
Biden said the real value of the minimum wage is much less then it has been in the past, specifically at its peak in 1968. In 1968, the minimum wage was $1.60 an hour. In 2013, that wage would have the same purchasing power as $10.71. “That’s all they’re asking here, is ‘just pay me minimum wage of what you paid folks in 1968,’ think in those terms. They’re not asking a whole heck of a lot,” Biden said.Here’s Michael Saltsman:
The logic goes something like this: Had the minimum wage tracked inflation since 1968, it would today be more than $10 an hour, so Congress should seek to bring it up to at least that amount. The federal minimum wage was first set in 1938 at 25 cents an hour. Had it tracked the cost of living since, it would today be $4.07 an hour, based on Labor Department data and the Bureau of Labor Statistics’ inflation calculator (see blue line in the chart above for the year 1938). This is the only logically consistent “historic” value of the minimum wage, and it’s 44% less than the current amount of $7.25.MP: The chart above shows the history of the nominal and real minimum wage (in constant 2013 dollars) from 1938 to 2013, and reveals why Biden (and other supporters of the minimum wage) would pick the year 1968 to make a case for a higher minimum wage – that year’s inflation-adjusted minimum wage at $10.66 per hour was the highest in the history of the minimum wage back to 1938 when it was first enacted.
Advocates of a higher minimum wage arbitrarily selected 1968 as the historical reference point. It’s no wonder: That’s when federal minimum wage hit its inflation-adjusted high point (see chart).
How about picking other arbitrary years to track the minimum wage and inflation? If you used 1948 instead of 1968, the minimum wage’s inflation-adjusted value would only be $3.81 an hour. If you chose 1988, the adjusted minimum wage would be $6.50 an hour.
But if you pick another year as the base year, like 2007 when the Great Recession started, the case for a minimum wage increase today weakens considerably. In real dollars, today’s minimum wage of $7.25 per hour during the worst jobless recovery in US history is almost 11% higher than it was in 2007 when the recession started. Perhaps that explains why the jobless rate today for teenagers (the group most affected by the minimum wage law) is stubbornly stuck at 24%, more than seven percentage points above the 16.8% rate in December 2007 when the recession started? If Joe Biden really cared about creating jobs for unskilled and low-skilled workers during a sub-par economic recovery, he should use 2007 as his base year, and not 1968, when considering the advisability of raising the minimum wage. Raising the minimum wage today, and increasing the cost of hiring unskilled and low-skilled workers, would be a disaster for the most vulnerable Americans struggling to find a job in a very tough labor market.
As Michael Saltsman concludes, “Entry-level employees can only move up the career ladder if they have experience. To get experience, you need a job in the first place. These jobs will be more difficult to come by if Congress embraces the flawed logic of a 1968 minimum wage.”
SO
Again, which is better:
600 jobs at $8.25/hr or 0 jobs at $12.50/hr?
BE AWARE OF THE INDEBTED STATES OF AMERICA'S REAL DEBTS !! States and localities owe far, far more than their citizens know.
The Indebted States of America
States and localities owe far, far more than their citizens know.
Since Pappas began her project to tally Cook County’s hidden debt, she has found lots of company. Across America, elected officials, taxpayer groups, and other researchers have launched a forensic accounting of state and municipal debt, and their fact-finding mission is rewriting the country’s balance sheet. Just a few years ago, most experts estimated that state and local governments owed about $2.5 trillion, mostly in the form of municipal bonds and other debt securities. But late last year, the States Project, a joint venture of Harvard’s Institute of Politics and the University of Pennsylvania’s Fels Institute of Government, projected that if you also count promises made to retired government workers and money borrowed without taxpayer approval, the figure might be higher than $7 trillion.
Most states have restrictions on debt and prohibitions against running deficits. But these rules have been no match for state and local governments, which have exploited loopholes and employed deceptive accounting standards in order to keep running up debt. The jaw-dropping costs of these evasions have already started to weigh on budgets; as the burden grows heavier, taxpayers may decide that it’s time for a new fiscal revolt.
Illustrations by Sean Delonas
Since then, the history of state and local debt has been a tug-of-war between those struggling to keep governments from overextending themselves and elected officials seeking legal loopholes for further debt spending. In the second half of the nineteenth century, for instance, some states, now restricted from doing it themselves, used local governments to float debt, producing tens of millions of dollars in new obligations—and calls for limits on local borrowing. The go-go 1920s, a period of unprecedented construction and transformation throughout America, saw states and localities once again borrowing massively, this time to build roads and electrical infrastructure. State and local debt had hit $15 billion ($260 billion in today’s dollars) by the Great Depression’s onset. Arkansas was one of the heaviest borrowers, with obligations reaching $160 million ($2.8 billion today). It defaulted in 1933—one of more than 4,700 Depression-era defaults by state and local government entities, including nearly 900 by school districts.
The wave of bad borrowing led some states to tighten restrictions even more. Even as reformers made progress, however, courts began to sign off on government evasions of debt limits. As a consequence, such limits “have had only a modest effect on aggregate state and local debt,” writes Columbia Law School’s Richard Briffault. Judges, he notes, “appear to share with state governors and legislators a belief in the legitimacy of the modern activist state.” In the words of the New York State Court of Appeals, judges have often proved open to any “modern ingenuity, even gimmickry” that legislators can cook up to get around debt restrictions.
Today, states and localities engineer most of their borrowing through what Briffault calls “non-debt debt,” a term for bonds designed to avoid legal restrictions on borrowing. For example, courts in some states have decided that when a state’s independent authorities issue bonds, that borrowing isn’t restricted by constitutional debt limits—even if taxpayers are ultimately on the hook for it. If a legislature takes on debt itself, that also doesn’t count against constitutional restrictions on borrowing, according to the judiciaries in some states. Briffault estimates that such evasions are responsible for three-quarters of state debt and two-thirds of municipal obligations incurred through bond offerings. The growth of this kind of borrowing helps explain why state and local debt outstanding from municipal securities has blasted from $2 trillion (in today’s dollars) in 2000 to nearly $3 trillion today—real growth of 50 percent in little over a decade.
New York State has turned to court-sanctioned gimmickry again and again. Though New York’s constitution requires that voters approve any new government debt, only 5 percent of the state’s $63 billion in outstanding borrowing has received voter authorization, down from 10 percent a decade ago. Meantime, the cost of servicing that debt has risen by an average of 9.4 percent annually. Partly because of such unsanctioned borrowing, New Yorkers bear the nation’s second-highest per-capita load of state debt, says New York’s comptroller. The state is still paying off what it owes from the infamous 1991 Attica prison deal, in which New York, trying to close a budget deficit, “sold” the facility to one of its independent authorities, which borrowed the money to pay for it. New York also still counts on its books debt from the 1970s bailout of New York City, which, thanks to refinancing, it won’t pay off until 2033.
Other New York deals engineered without voter say-so include a $2.7 billion bond offering in 2003, backed by 25 years’ worth of revenues from the state’s gigantic settlement with tobacco companies. To circumvent borrowing limits, the state created an independent corporation to issue the bonds and then used the money from the bond sale to close a budget deficit—instantly consuming most of the tobacco settlement, which now had to be used to pay off the debt. Legislators engineer such borrowing because they aren’t confident that voters would agree to new debt: of the seven bond offerings that Empire State voters have considered over the past 25 years, four went down to defeat.
Thanks to its low state debt, Texas enjoys a reputation for budgetary restraint. Yet as Texas comptroller Susan Combs found to her dismay, the state’s towns, cities, counties, and school districts have racked up the second-highest per-capita local debt in the nation, behind only New York’s spendthrift municipalities. The total, nearly $8,000 per resident, is more than seven times higher than Texas’s per-capita state debt. Over the last decade, local debt in the Lone Star State has more than doubled, growing at twice the rate of inflation plus population growth. At the moment, Texas localities owe $63 billion for education funding—155 percent more than they did a decade ago, though student enrollment and inflation during that period grew less than one-third as quickly. The borrowing has also paid for a host of expensive new athletic facilities, such as a $60 million high school football stadium, complete with video scoreboard, in the Dallas suburb of Allen.
As in Cook County, so many different levels of government in Texas can issue debt that taxpayers, bewildered by the complexity of it all, let overlapping districts keep on borrowing. As an example, Combs describes how the residents of a single Houston block must repay debt incurred by the county, the city, the city’s school district, and Houston Community College, among other entities. “I went to dozens of town hall meetings around the state, and when I asked, not a single member of the public knew just how much people in their towns were on the hook for,” she says.
Texas, like New York, amassed all this debt by pushing the limits of the law. Though taxpayers must approve most government borrowing, Texas provides an exception for localities that need to issue debt quickly: a “certificate of obligation,” borrowing that doesn’t require approval unless 5 percent or more of local voters petition to have a say on it (a rare occurrence, since most don’t even know that they have that power). Since 2005, Texas localities have issued nearly $13 billion worth of these certificates, often for dubious ends. In 2010, for instance, Fort Worth borrowed nearly $35 million through certificates of obligation to build a facility for horse shows.
Texas school districts have made use of another controversial financing technique: capital appreciation bonds. Used to finance construction, these bonds defer interest payments, often for decades. The extension saves the borrower from spending on repayment right now, but it burdens a future generation with significantly higher costs. Some capital appreciation bonds wind up costing a municipality ten times what it originally borrowed. From 2007 through 2011 alone, research by the Texas legislature shows, the state’s municipalities and school districts issued 700 of these bonds, raising $2.3 billion—but with a price tag of $23 billion in future interest payments. To build new schools, one fast-growing school district, Leander, has accumulated $773 million in outstanding debt through capital appreciation bonds.
Capital appreciation bonds have also ignited controversy in California, where school districts facing stagnant tax revenues and higher costs have used them to borrow money without any immediate budget impact. One school district in San Diego County, Poway Unified, won voter approval to borrow $100 million by promising that the move wouldn’t raise local taxes. To live up to that promise, Poway used bonds that postponed interest payments for 20 years. But future Poway residents will be paying off the debt—nearly $1 billion, all told—until 2051. After revelations that a handful of other districts were also using capital appreciation bonds, the California legislature outlawed them earlier this year. Other states, including Texas, are considering similar bans.
Judges have proved especially eager to approve evasions of debt limits when they’re the ones demanding that states or localities spend money. Back in 2001, New Jersey’s activist supreme court mandated that the legislature embark on a project of building and refurbishing schools (see “The Court That Broke Jersey,” Winter 2012). To comply, Trenton lawmakers announced a plan to borrow $8.6 billion through a bond offering—a shockingly high sum. Taxpayer groups reacted with such outrage that officials knew that voters would never endorse the move. So the legislature decided to channel the borrowing through an independent authority. The taxpayer groups sued, but the state supreme court brushed their objections aside, arguing that a clear precedent existed for such borrowing. The state quickly burned through half of the borrowed money on patronage and inefficient construction practices, so it borrowed another $3.9 billion, again through the authority. Taxpayers, needless to say, will foot the bill.
If you define municipal debt simply as what states and localities have borrowed, the total nationwide comes to about $3 trillion. Nevertheless, these governments actually owe more than twice that much, according to estimates from groups like the States Project. The reason for the discrepancy is that states and localities carry another kind of debt—promises of retirement benefits to public-sector workers—and they have radically underfunded the systems that must pay for it. As Boston University Law School professor Jack Michael Beermann wrote recently in the Washington and Lee Law Review, the situation is a “double whammy” for future taxpayers, who not only will have to pay for “the consumption of prior generations” but also will receive “reduced government services” as increased spending on retirement debt crowds out other programs.
Some states have laws stating that annual funding of future pension or health-care payments must be considered part of current budgets, but as Beermann points out, many states don’t. Those states can therefore run deficits—even if they have balanced-budget requirements, as most do—by shortchanging retirement accounts. A report by the Pew Center on the States showed 29 states failing to make the necessary payments into their pension systems in 2010, the latest year for which data are available. Over the last decade, Kansas, a prime offender, has contributed less than 80 percent of the necessary dollars to fund employee pensions, according to a recent report by the Kansas Policy Institute. Even in an economically robust year like 2006, the state government managed to set aside just 64 percent of the necessary funds, one reason that Kansas’s state pension system is less than 50 percent funded.
State and local governments have likewise made ambitious promises to finance the health care of their employees when they retire, yet they have set aside almost no money to do it. Instead, they’re purchasing the health care on a pay-as-you-go basis as workers retire. With workers quitting earlier and living longer, governments suddenly find themselves with little room in current budgets and zero reserve funds. State governments owed nearly $700 billion in health-care promises to retirees, the Pew study estimated, but they had set aside only about 5 percent of that amount. The study found that only one state, Alaska, had paid in advance for more than 50 percent of its obligations. Even states with low levels of other debt had done little to finance retirees’ health-care benefits; Texas, for instance, had set aside just 1 percent of the funds. Similarly, a Pew study of 61 big American cities determined that they owed $126 billion in health-care promises and had paid for only 6 percent.
Consider Michigan, where crushing government retirement costs helped push Detroit into insolvency, leading to a state takeover of the city’s fiscal management. With Detroit’s debt crisis in view, Governor Rick Snyder commissioned a study of the level of health benefits promised retirees throughout Michigan. The study, the first of its kind, concluded that the state’s municipalities had put aside, on average, just 6 percent of what was necessary to finance their retirees’ health care; the remainder, some $12.7 billion, hadn’t been funded. The city of Lansing, for example, already devoted $20 million of its $150 million annual budget to retirees’ health care, the study observed; yet its unfunded liabilities were so great that to fund the debt properly each year, it would have to double property-tax rates. Many municipalities, the study added, had done little to control debt. More than half required no annual contribution from government workers to help fund their future health-care costs.
Earlier this year, a commission created by Chicago mayor Rahm Emanuel reported that that city’s health-care costs for retirees would rise from $109 million in the 2013 budget to $541 million in a decade. Chicago has since decided to drop its current health-insurance program and shift all retirees onto the health-insurance exchange being set up in Illinois under President Obama’s Affordable Care Act. That insurance will be cheaper because the federal government will subsidize the rates of the exchanges, basically getting taxpayers nationwide to pick up some of the cost for Chicago workers.
In some places, elected officials have promised benefits to workers without even a cursory effort to calculate what they might add up to. Before the California city of Stockton filed for bankruptcy last year, auditors listed “uncontrolled pension, health, and other benefit cost increases” as a big part of the city’s woes, including a whopping $400 million unfunded liability for retirees’ health care. “No one gave a thought to how it was going to eventually be paid for,” said a financial manager brought in to address the fiscal difficulties.
Stockton may be an extreme example, but after its bankruptcy, officials in other California municipalities began asking what their cities owed. Earlier this year, to take one example, Sacramento officials commissioned a study to measure their city’s debt. In what the Sacramento Bee reported as a “sobering” city council session, the city manager explained that Sacramento had racked up some $2 billion in obligations—a “big and scary” number, the manager said, for a city of 477,000 residents with an annual general-fund budget of just $366 million. Nearly half of that debt was retirement-related, including $440 million for retirees’ health care. To pay down the debt, the city estimated, it would have to put aside $43 million annually, or 12 percent of the general fund. City officials added that it wouldn’t be easy to solve the problem by firing workers, since Sacramento had already cut some 1,200 employees, or 20 percent of its workforce, in the last several years.
One problem, the group says, is that half of all states don’t bother to file their required annual financial reports on time. Local governments are guilty, too. Though the Securities and Exchange Commission (SEC) requires any government that issues municipal bonds to file a Comprehensive Annual Financial Report, a 2011 study by the California Debt and Investment Advisory Commission estimated that one in four Golden State local governments in that position failed to file the report on time—and one in ten never filed it at all, even though the SEC gives states and cities three times as long to file as it gives private companies. In May, the SEC cited Harrisburg, Pennsylvania, for failing to file reports for two years, even as the city collapsed into insolvency.
Another source of dispute involves the way states and cities calculate pension debt. For starters, they often use a nineteenth-century form of balance-sheet math known as cash-basis budgeting, in which you don’t report expenses until they’re paid. This approach lets local governments ignore costs, such as retirement obligations, that are building up today but aren’t payable for years to come.
Also, the loose accounting standards that states and cities use, recommended by the Governmental Accounting Standards Board, allows them to calculate pension debt using their own projected annual rate of return on the investments that they make, rather than a rate set by an independent body or by some preestablished formula. The higher the projected returns, the lower the pension debt appears to be; unsurprisingly, the projections tend to run high. The rules governing private pensions in the United States, as well as both private and government pension systems in Europe and Canada, are much more restrictive. Economists Aleksandar Andonov, Rob Bauer, and Martijn Cremers noted in a recent paper that corporate pensions in the United States, as well as private and government pension systems in Canada and Western Europe, had significantly lowered their investment projections as interest rates declined, reasoning correctly that lower rates made it harder to hit lofty investment goals. By contrast, government pension funds in the United States responded to lower interest rates by increasing risky investments and maintaining high projections of market returns (see “The Pension Fund That Ate California,” Winter 2013). In the United States, government funds projected gains of 8 percent, on average, the study found; government funds in Canada and in Europe projected returns of 6.7 percent and 3.6 percent, respectively, considering those targets more realistic.
Different projected returns can result in significantly different debt calculations. In 2011, the nonpartisan Congressional Budget Office pointed out that, according to states’ own accounting methods, their pension systems had $700 billion in unfunded debt. But if you used a lower, more plausible, rate of return, the CBO added, total unfunded pension debt was somewhere between $2 trillion and $3 trillion—and the amount has kept growing since then.
Some states have intentionally used the complexity of pension accounting to mislead taxpayers and investors. Over the last three years, the SEC has accused two states, New Jersey and Illinois, of making deceptive and fraudulent statements to potential investors about the health of their employee-pension funds. The SEC said that Illinois failed to tell investors both that its plan to bail out its troubled pension system wouldn’t actually achieve that goal and that the system was “structurally underfunded,” meaning that without further reform, it would fall still deeper into debt. Illinois also failed to report that it used a form of pension accounting that funds a larger percentage of an employee’s retirement costs near the end of his career, increasing the system’s risk of running out of money. In New Jersey’s case, the SEC disclosed that the state had neglected to tell investors that it wasn’t adhering to a financing plan that it had concocted to stabilize its pension system, creating a “fiscal illusion” that it could meet its financial requirements.
Eventually, such soft accounting slams into reality, and pension systems begin to miss investment projections. Governments then find themselves contributing more and more each year to keep the system afloat. New York City’s average pension contributions have risen from 6.1 percent of its budget in 2005 to 11.5 percent today, according to a recent paper by Manhattan Institute scholar Daniel DiSalvo. In 2005, pension payments consumed 43 percent of income-tax revenue; in 2013, “every penny in personal income tax we collect will go to cover our pension bill,” Mayor Michael Bloomberg recently complained. America’s second-largest city, Los Angeles, has seen its pension payments rise from 3 percent of its budget to 18 percent today. Atlanta’s pension payments increased from $43 million annually in 2002 to $144 million in 2010, consuming 19 percent of its budget, before the city finally initiated pension reforms that capped costs and began reducing debt.
Even as governments scramble to find ways of paying their existing obligations, taxpayers should demand fundamental reforms that will make state and local leaders more fiscally responsible going forward. An easy place to start would be a push for honest accounting and greater transparency. States and cities need to move away from cash-basis budgeting and adopt the accrual accounting that private corporations and the federal government use, in which future expenses are included in current reckonings, providing a clearer picture of long-term debt.
Taxpayers should also demand that states and cities produce timely financial reports. The SEC should slap governments and elected officials with harsher penalties for failing to file on time or at all. To date, the commission has mostly just required states to agree not to miss future deadlines. And reformers should strive to make state balanced-budget amendments rigorous again. Some states that have recently enacted pension reform, such as New Jersey, have written into law that the government must make its required annual pension contributions: a budget wouldn’t be considered “balanced” if officials ignored that requirement.
At the same time, states need to remove some of the discretion that retirement systems have to calculate pension obligations, including their discretion to predict future investment returns. Handing that task to an independent body or determining it with a formula—perhaps one linked to the movement of interest rates—would remove some of the political manipulation of retirement accounting. The ratings agency Moody’s and the Governmental Accounting Standards Board have each proposed new, more accurate, ways of calculating pension debt. But these new standards will have little effect unless states and cities respond to them by contributing more to their pension systems or by cutting benefits.
An even better way to make retirement plans more honest would be to replace defined-benefit plans with hybrid systems, as some states and cities have already done. Such systems start with a 401(k)-style defined-contribution plan featuring individual retirement accounts and then add either Social Security (in places where public workers receive it) or, in lieu of Social Security, a basic, inexpensive defined-benefit plan that pays a small monthly pension. Taxpayer obligations to workers are much clearer in defined-contribution plans, since the government must simply contribute a certain percentage of a worker’s salary into an account each year, eliminating the vexed question of whether it can afford to pay a defined pension many years down the road.
Reformers should also seek to get rid of the many loopholes that state legislators use to get around debt-limit rules. In particular, states should be banned from assuming debt through independent authorities or by direct appropriation of the legislature. Reform should also cap state-supported debt by tying it to some flexible measure of economic or revenue growth, such as state personal income, rather than just stating a dollar limit.
Reformers should strive, too, to end governments’ use of debt to balance budgets, perhaps by introducing a requirement that all taxpayer-supported debt be used for capital projects, such as schools, roads, and bridges. Such structures endure for decades, so it’s reasonable to ask future residents to contribute to their construction through debt payments. By contrast, bonds floated to close a particular year’s budget, pledging to the bondholders that they’ll be paid with future lottery, toll, or tobacco revenues, give today’s residents a benefit at future residents’ expense.
There’s no single cure for the debt crisis afflicting state and local governments. But unless taxpayers start pulling harder in that everlasting tug-of-war, they can expect to keep losing ground.
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