General Petraeus’s leaked emails about Israel

Blogger Philip Weiss has them, and they’re not pretty.

I've written the cover story for this week's New Statesman on the rise and rise of David Petraeus and America's "cult of the generals".

Here's an extract:

Twelve of the 43 men who have served as US president have been former generals -- including the very first occupant of the Oval Office, George Washington. Nonetheless, there has not been a general in the White House since Dwight D Eisenhower, the former Supreme Allied Commander in the Second World War and architect of the D-Day landings, left office in 1961 (excoriating the "military-industrial complex" on his way out). But the rise of the generals in recent years, exemplified by the hallowed status of Petraeus, has altered the dynamic. If a general is elected to the White House in 2012 or 2016, the grip of this cult on the US polity will once again have been demonstrated.

Interestingly, in an unrelated story on the supposedly declining power of the Israel lobby in today's Guardian, the paper's Washington correspondent, Chris McGreal, writes:

Senior figures in the American military, including General David Petraeus who has commanded US forces in both wars, have identified Israel's continued occupation of Palestinian land as an obstacle to resolving those conflicts.

McGreal is referring to the general's official "posture" statement on US Central Command -- which Petraeus was in charge of before he was redeployed to Afghanistan by President Obama a fortnight ago. In this, he says:

The [Israel-Palestine] conflict foments anti-American sentiment, due to a perception of US favouritism for Israel. Arab anger over the Palestinian question limits the strength and depth of US partnerships with governments and peoples in the AOR [Centcom's Area of Responsibility] and weakens the legitimacy of moderate regimes in the Arab world. Meanwhile, al-Qaeda and other militant groups exploit that anger to mobilise support. The conflict also gives Iran influence in the Arab world through its clients, Lebanese Hizballah and Hamas.

Petraeus's prepared statement caused uproar in pro-Israeli circles back in March, when it was published, with some on the right and the left automatically assuming he must be a private supporter of the Palestinians and that he had suddenly and bravely decided to stand up to the Israel lobby inside the United States.

But guess what? In a gaffe that hasn't yet attracted the same amount of press as Stanley McChrystal's bizarre interview with Rolling Stone, Petraeus accidentally leaked an email exchange of his -- with the belligerent, neoconservative, pro-Israeli columnist Max Boot -- to an activist named James Morris, who then passed it on to the blogger Philip Weiss:

Last March General David Petraeus, then head of Central Command, sought to undercut his own testimony before the Senate armed services committee that was critical of Israel by intriguing with a right-wing writer to put out a different story, in emails obtained by Mondoweiss.

The emails show Petraeus encouraging Max Boot of Commentary to write a story -- and offering the neoconservative writer choice details about his views on the Holocaust:

"Does it help if folks know that I hosted Elie Wiesel and his wife at our quarters last Sun night?! And that I will be the speaker at the 65th anniversary of the liberation of the concentration camps in mid-Apr at the Capitol Dome . . ."

Petraeus passed the emails along himself through carelessness last March. He pasted a Boot column from Commentary's blog into in an "FYI" email he sent to an activist who is highly critical of the US's special relationship with Israel. Some of the general's emails to Boot were attached to the bottom of the story. The activist, James Morris, shared the emails with me.

You can read the full details here.

Meanwhile, here's a taster of Clayton Swisher's amusing response on the al-Jazeera blog:

It's not clear what miracles Holocaust survivor and Nobel laureate Elie Wiesel can work for General Petraeus now that he's the top officer in Kabul.

Based on these emails Petraeus apparently authored, subsequently leaked to blogger Philip Weiss, it seems the former Central Commander thought a private dinner with Weisel and a Holocaust Museum stint might boost his pro-Israel bona fides ("some of my best friends are Jewish!").

I guess the good general is keener on becoming the next US president, and not upsetting the Israel lobby in the meantime, than some had assumed.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

Ralph Orlowski / Getty
Show Hide image

Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

0800 7318496