$450 million slush fund for Bush from Canadian lumber deal, just in time for the mid-terms

Yes, it seems that Bush has indeed wangled himself and Unka Karl $450 million smackeroos in a slush fund they can get their paws on right now and do anything they want with. Surprise! The story has a lot of detail, but the bottom line is simple: The terms of the Softwood Lumber Agreement with Canada will give Bush complete control of an escrow account with $450 million in it, controlled by a board that Bush appoints, and which can be used for any purpose whatever, with no Congressional oversight.

Hats off to the Kossacks for frontpaging this story, which I’m going to analyze below. (The cocktail weenie-scarfing SCLM, of course, has missed the story completely.) Is the story “interesting, if true”? Let’s see.

If the story is true, the scope and audacity of this Republican maneuver is mind-boggling. And before we say “$450 million?? They would never do that!” let’s remember that what we’ve laughingly called Iraq “reconstruction” was funded with suitcases full of cash, and $8.6 billion is missing, presumed stolen.) As usual, I’m never cynical enough about the Republicans, no matter how hard I try. And I do try.

And if the story is true, a $450 million slush fund would finance a lot of little October surprises. (Since Rove always operates at the margin, a lot of little surprises are more likely than the one big surprise that the BCW expects). It would finance, for example, any number of corrupt programmers if the election is close enough to steal. (Remember the Diebold programmer convicted of “tampering with computer files?)

And if the story is true, it fits perfectly into the pattern of Bush’s life: Whenever he fucks up, someone with more money always bails him out. And $450 million is a lot of bailing.

To our story. The key phrase to keep in mind is “meritorious initiatives,” and the key question you want to ask yourself is this: What would seem “meritorious” to a desperate Republican administration with $450 million to spend?

Onward:

1. The Software Lumber Agreement
I’m not going to summarize the NAFTA conflict between Canada and the US on softwood lumber, save to say that the Canadians are really pissed at us, and they have every right to be.

For our purposes, important thing is that the conflict may been resolved through the Softwood Lumber Agreement (SLA) between the United States and Canada, which leaves certain monies (the $450 million) to be disbursed. How that money is to be disbursed is the key point at issue.

(For the Canadians, the key point is the SLA itself, not the possibility of Bush’s slush fund. the The SLA has not yet been approved by Parliament. The vote will happen in “the fall,” and it’s huge: Prime Minister Harper’s minority government will fall if Parliament doesn’t approve the deal.)

2. The testimony of Elliot Feldman (“It’s a slush fund”)
Here’s where the Kossacks start the story: With a long excerpt from a statement by D.C. trade lawyer Elliot Feldman before the Standing Committee on International Trade in Canada’s capital, Ottawa. (Feldman is a partner at Baker, Hostetler, who contribute 64% to Republicans through their PAC.) The source for the Feldman transcript is The Tyee, a well-respected Canadian online newspaper. To the transcript:

[FELDMAN] First, on April 7, the United States Court of International Trade ruled that the U.S. industry was entitled legally to no money. None of it. It was not surprising then, that 20 days later, the U.S. coalition said that it would take $500 million. It was hardly a negotiating triumph to persuade them to take $500 million, when they had become legally entitled to not a penny.

The term sheet [for the United States offer that was then formalized as the SLA] promised a major joint initiative to improve North American competitiveness. The “remainder” — that was the word the terms said — would go to so-called “meritorious initiatives” in the United States.

Meanwhile, we were advised by negotiators that the White House had taken a direct and active interest in this money, but that Canadian industry ought to focus on other things. As the minister had said, it was not really their concern. The “remainder,” then, became $450 out of $500 million dollars.

So, here we have the government of Canada requiring that Canadian private parties sign over $450 million to an escrow fund slated to be conveyed to the White House.

Big words, Sahib, that I translate “slush fund.”

The agreement does not mention Congress, and the Bush administration says that Congress will not be involved in any way with this agreement.

The provision in Article 13.A.2 of the agreement, which recites the meritorious initiatives, is language which could be defined only as a slush fund for the president.

We’ll look at Article 13.A.2 in more detail below when we look at the text of the SLA. Meanwhile, here’s one more interesting detail:

There is only one date certain in the deal: that the planned expenditure of the $450 million must be determined by September 1.

Which would be, um, tomorrow. Just in time to roll out new products!

Interesting, if true. Is it true?

3. Coverage from Think Progress (“It’s a slush fund”)
We in the great Republic to the South (of Canada) cheerfully ignore all things Canadian, and this story is no exception. And it’s no credit to the blogosphere that only one blog covered this one. (Maybe it’s just too big to see, or believe). Here’s how Think Progress covered the story, way back in June and linky-rich:

Obscure Trade Settlement Could Create $480 Million Slush Fund for White House

The United States lost virtually every major aspect of the litigation for the last five years, and as a result, a settlement seem elusive. Then, last April, the United States and Canada reached a surprise agreement. Here’s what we know about the deal from public sources:

– $4 billion dollars from the account [tarriff money and “stumpage fees” that were under dispute] will be returned to Canada. $1 billion will be returned to the United States. Of the $1 billion dollars that will remain in the United States, half is designated to the U.S. lumber industry.

– The remaining $500 million is to be split between “a joint initiative benefiting the North American lumber market” and “meritorious initiatives in the United States” such as “Katrina reconstruction.”

Funny. We’re not hearing anything about that now, and the news is full of Katrina propaganda. So, I wonder “initiatives” are more “meritorious” than helping out Katrina survivors?

(The New York Times reported that it is “not clear what will happen” with the money slated for this purpose.)

– The deal was struck after direct communication between President Bush and Prime Minister Stephen Harper, who are political allies and personal friends.

So, those are the details of the SLA acocording to Think Progress. Many red flags here, wouldn’t you agree? Does it create a slush fund under Bush’s control? Think Progress spoke to “a lawyer familiar with the case” (Feldman, presumably) and then to the US Trade representative:

ThinkProgress contacted the U.S. Office of the Trade Representative. A spokesman said that he didn’t know if the White House would be involved in dispersing the funds or if Congress would be consulted, and was doubtful he would “be able to discern” this information in the future.

Nice. “Didn’t know if the White House would be involved.” I guess $450 million dollars is such a trivial sum.

And now comes a passage so polite that it might as well have been written by a Canadian:

The fact that hundreds of millions of dollars may be headed to the White House with no oversight raises the possibility of abuse — especially five months before a federal election. This is a significant amount of money and the administration should explain exactly how it will be spent and who will be overseeing the process.

Let’s translate again: “hundreds of millions of dollars with no oversight” means “slush fund” (Fr. caisse noire)

4. The text of the SLA agreement (“It’s a slush fund”)
So, let’s look at the text of the SLA itself (PDF). And here is an annotated version from the American Consumers for Affordable Homes. (The name makes them look like they’re an AstroTurf organization from K Street, but if the look of the site is any guide, they have no money, so I’m guessing that at least they’re not from K Street, though they might be from Bywater Street.) I haven’t had time to compare this version to the PDF from the Canadian government.

Does the SLA translate to “slush fund” too? Let’s find out!

First, here’s the clause that Feldman wanted us to look at. Article 13.A.2 (“Institutional Arrangements”):

By September 1, 2006 [tomorrow] the United States, in consultation with Canada, shall identify meritorious initiatives to receive the funds that are to be set aside for that purpose under Annex 2C.

[ACAH COMMENT] September 1 is the only date certain in the Agreement. It precedes the most optimistic dates for entry into force of the Agreement, establishing a presumption for the expenditure of $450 million in the United States beginning in the autumn of 2006 during the mid-term congressional campaign.

The funds shall support meritorious initiatives in the United States related to:

[ACAH] The projects all have high visibility potential for compassionate conservatism.

(a) educational and charitable causes in timber-reliant communities;

(b) low-income housing and disaster relief; [Read: or

(c) educational and public-interest projects addressing:

(i) forest management issues that affect timber-reliant communities, or

(ii) the sustainability of forests as sources of building materials, wildlife habitat, bio-energy, recreation, and other values.

“And other values,” as a final term of the Agreement, invites the United States to spend the money any way it pleases.

Gosh, “other values” could mean anything, couldn’t it? Even, perhaps “Christian” values.

So, that’s how the money is to be disbursed, and I think you’ll agree that a Republican with a little imagination could use the $450 million any way they pleased.

Translation: “Slush fund” (Fr. caisse noire)

That makes the issue governance structure. After all, if there are sufficient institutional safeguards in place, we only have the bare possibility of a slush fund; in reality, there would be nothing to worry about and, people, we could just move along. Article 13.B covers governance:

B. Softwood Lumber Committee

1. The Parties shall establish a Softwood Lumber Committee, comprising an equal number of representatives of the Parties or their designees.

2. The Committee shall:

(a) supervise the implementation of the SLA 2006;

(b) oversee its further elaboration [Hmm…];

(c) supervise the Working Groups established under the SLA 2006; and

(d) consider any other matter that may affect the operation of the SLA 2006.

3. In exercising its functions, the Committee may:

(a) establish and delegate responsibilities to Working Groups or expert groups;

(b) seek the advice of non-governmental persons or groups; and

(c) take such other action in the exercise of its functions as the Parties may agree.

4. The Committee shall establish its rules and procedures. All decisions of the Committee shall be taken by consensus, except as the Committee may otherwise agree.

5. The Committee shall convene at least once a Year in regular session and at such other times as the Committee may agree. Regular sessions shall be chaired successively by each Party.

[ACAH] The Agreement does not specify qualifications for people to serve on this committee, the number of members, the term, or compensation. … [A]n unknown, unnamed body of people who run the Agreement on behalf of the two federal governments. … The mandate for this unknown group includes supervision over all other working groups, including therefore, one that would examine policy exits. The terms do not even specify whether Canada and the United States would have an equal number of committee members, nor does it indicate who would chair the committee [Karl Rove? Why not?] or even how a Chair would be chosen.

It looks like the same legal geniuses who turned Iraq into a legal limbo under the Coalition Provisional Authority were at work here. (The next Article covers Technical Working Groups and according to the ACAH is “as defective as the Softwood Lumber Committee – no indication of how many people, distribution between U.S. and Canada, specific qualifications, selection criteria, chairmanship, etc.”)

So, the $450 million can be used for anything Bush wants (“other values”), and Bush can put anybody he wants on the board that disburses it.

Translation: “Slush fund” (Fr. caisse noire)

Finally, let’s look at how the money is actually to be disbursed. ANNEX 2C, clauses 4 and 5:

ASSIGNMENT OF CASH DEPOSITS AND DISBURSEMENT OF PAYMENTS
4. At least 30 days before the Effective Date, the United States shall provide Canada or its agent with information identifying three separate escrow accounts whose beneficiaries are respectively:

(a) the members of the Coalition for Fair Lumber Imports;

(b) a binational industry council described in Annex 13; and

(c) meritorious initiatives in the United States identified by the United States in consultation with Canada as described in Article XIII(A).

5. Canada or its agent shall distribute $US 1 billion pursuant to the Irrevocable Directions to Pay to the escrow accounts referred to in paragraph 4 in the following amounts: $US 500 million to the members of the Coalition for Fair Lumber Imports, $US 50 million to the binational industry council, and $US 450 million for the meritorious initiatives account.

Jeebus, reminds you of a Nigerian 409 letter, doesn’t it? A few points (and I’m not a lawyer, and not an accountant, so I could be way off base):

1. Bush needs to tell Harper what escrow accounts to use “before” the Effective Date—but there’s no requirement that there be an effective date for the accounts to be identified. (In fact, the effective date cannot be known unless and until Parliament passes the SLA, which will not happen ’til “the fall.”) In other words, the accounts could be open and identified today, for all we know.

2. Harper could even put money into the accounts, even if Bush couldn’t take the money out in the absence of Parliament passing the SLA.

3. With the prospect of $450 million slush fund (Fr. “caisse noire”) before him, I would think Bush could find a complaisant banker to offer him a bridge loan, for that dicey period between September 1, when the “meritorious initiatives” have been identified, and “the Fall,” when the Canadian Parliament ratifies the SLA (or not). Possibly Harper could help him with this through the Caisse de dépôt et placement du Québec, the massive (and highly politicized) Quebec pension fund, which has major investments in timber.

Summary (“It’s a slush fund”)

1. The SLA sets aside $450 million for “meritorious initiatives.”

2. The nature of “meritorious initiatives” is not specified, and is therefore up to Bush.

3. How Bush spends of the $450 million is not subject to Congressional oversight. [UPDATE: Nor is the agreement.]

4. No qualifications of any kind are required for the members of the board that will implement the SLA and disburse the $450 million, so Bush can appoint anybody he wants.

5. The beneficiaries for the “meritorious purposes” are to be listed by September 1 (tomorrow).

6. The mechanics for disbursing the $450 million may already be in place, and any cash flow problems could be solved by a compliant banker, so Bush can use the money now.

So, yeah, I’d say it’s a slush fund, by defintion. Bush has control of it, through a board he appoints, and there’s no Congressional oversight. And he can do whatever he wants with the money, as long as he uses it for a “meritorious purpose.”

And I think I can guess what Bush—after consulting his gut—will consider a meritorious purpose. Can you?

Maybe some enterprising reporter could ask him. After all, the meritorious purposes are going to be decided tomorrow.

Appendix: The political context
Both Bush and Harper (the Canadian Prime Minister) are authoritarians desperate to hold onto power. From what NAFTA and the WTO say, Harper is selling out Canada by giving the United States $450 million that the United States couldn’t win in court. Why? It’s late, and I’m foily, but I’d say that Harper gets his cut with a kickback from Bush out of the $450 million, to help him pass the SLA in Parliament, and win his vote of confidence. Then Bush gets the rest.

UPDATE
Canadians agree: “It’s a slush fund”

Bob Rae of the Canadian Liberals back in July:

Rae said the deal means the White House will effectively get nearly a half-billion dollars to spend as it sees fit.

“It’s kind of a presidential slush fund that’s being given to them.”

Canadian Centre for Policy Alternatives:

The Bush White House cut (to use for aid projects as it sees fit) is nothing less than a huge slush fund for the upcoming Congressional elections—an unprecedented campaign gift from the Harper government to the Republican re-election bid, paid for by the Canadian lumber industry.

UPDATE Damn, if this were about something serious, like sex, or fisting, or sugar tits, or naked Canadians, or JonBenet, or, may the God of My Choice, if any, help me, Bush farts, it would be cranking the ol’ Hit-O-Meter (or, for you Canadians, the Hit-O-Metre). But n-o-o-o-o!

UPDATE The September 1 deadline for “determining” the beneficiaries for “meritorious beneficiaries passed without any announcement.

Bush: I'm a lumberjack?

Have you heard about the curious incident of the international agreement that did not bark in the nighttime?

Yes, I’m talking about the Softwood Lumber Agreement, whose “meritorious initiatives” were to be determined today—All $450 million smackeroos of meritoriousness. But the dog didn’t bark. No announcement.

I know, I know. Meritorious, WTF? [Yawn] ““Softwood Lumber Agreement”? Honestly, MEGO (My Eyes Glaze Over). B-o-r-i-n-g.

But that’s what they’re counting on, you fools! Some may find $450 million dull, dull, dull. Even if it’s a $450 million slush fund controlled by the Bush administration. Personally, I don’t. Nor should any progressive, on either side of the border.

For those who came in late, the Softwood Lumber Agreement:

1. Sets aside $450 million for “meritorious initiatives.”

2. The nature of “meritorious initiatives” is not specified, and is therefore up to Bush.

3. How Bush spends of the $450 million is not subject to Congressional oversight.

4. No qualifications of any kind are required for the members of the board that will implement the SLA and disburse the $450 million, so Bush can appoint anybody he wants.

5. The beneficiaries for the “meritorious initiatives” are to be listed by September 1 (tomorrow today).

6. The mechanics for disbursing the $450 million may already be in place, and any cash flow problems could be solved by a compliant banker, so Bush can use the money now.

Can you say “slush fund”? I thought you could. (And the Canadians already have.)

Now, if you’ve been asking yourself what a cornered and desperate Republican administration that will do anything, anything at all to win would consider “meritorious” in an election year… Well, you’re thinking like I do.

What’s more, the text of the SLA explicitly states that the list of “meritorious initiatives” must be “determined” September 1: today.

But the list hasn’t been published. Not on Google or Yahoo (regular and news, US and Canada), Reuters, Bloomberg, whitehouse.gov, www.commerce.gov, or PR Newswire.

Zero. Zip. Zilch. Nada. Nothing. But why?

Remember, the original example of a “meritorious initiative” Katrina reconstruction. So, you’d think the Bush administration would do everything possible to end their Katrina public relations nightmare by making half a billion dollars available to the citizens of New Orleans. But apparently not.

So, why hasn’t the list been published?

1. They forgot. $450 million, they forgot?

2. They don’t want to tell anybody where the $450 million is going.

Call me crazy, but I’ll pick door #2. In fact, the text of agreement could support them: It states that “initiatives” must be “determined.” It doesn’t say that they must be “published.”

Now, why would the Bush administration not want to publish them? Typically, when the administration wants to hide a document dump, they do the dump on Friday at 5:00, and Friday at 5:00 on a three day weekend would be especially auspicious for a really odiferous dump. But nothing.

I don’t know. But I’d like to know, and maybe you would, too. One of the many government institutions that I support through my taxes is the US Commerce Department. They would know. Here’s the address:

Designated Monitoring Officer –
U.S. -Canada Softwood Lumber Agreement
Office of NAFTA and Inter-American Affairs
Room 3022
U.S. Department of Commerce
14th Street & Constitution Avenue, N.W.
Washington, D.C. 20230
Phone: (202) 482 - 0390
Fax: (202) 482 - 5865

I think I’ll call them on Monday Tuesday. I’m sure I’ll hardly be able to sleep for the excitement…

UPDATE Here’s an interesting site all about:

[The] North American Competitiveness Council (NACC), an apparently extra-constitutional advisory group organized by the Department of Commerce (DOC) under the auspices of the Security and Prosperity Partnership (SPP).

For those who like foil… And eighteen-lane superhighways rammed through Texas… This looks like a “meritorious iniative.” Just guessing, though.

Laissez le Bon Temps Roulez!

As we speculated, Canada’s Parti Quebecois will vote in favor of the Softwood Lumber Agreement, making a $450 million slush fund available to Bush well before November 7. Sweet! Bloomberg:

The Bloc Quebecois, Canada’s second- largest opposition party, plans to back an accord to end a four- year dispute with the U.S. over softwood lumber tariffs because Quebec companies support it.

The Bloc’s support guarantees that legislation on the accord will pass.

Prime Minister Stephen Harper said last month that he’ll introduce the law in the parliamentary session that starts Sept. 18.

Maybe the mysteriously unavailable list of “meritorious initiatives” which were to be “determined” September 1, according to the agreement, will shake loose in today’s Friday document dump.

Because “meritorious initiatives”—loophole, meet truck—are where the $450 million are going. No congressional oversight, a board appointed by Bush… And guesses where the money will go?

I’d say Bush will allocate the money according to the Endangered Republican Incumbents Act. Wouldn’t you?

Will Bush evade accountability on surveillance by using his Softwood Lumber Agreement slush fund?

Josh Meyer of the LA Times has a story up today that shows how the criminal (30 felonies) Bush regime’s surveillance really is worse than anybody, except Corrente, ever imagined. (And we’ll get to the Softwood Lumber Agreement, I promise.)

Now we know why the NSA is running out of electrical power.

And the surveillance really is domestic, and targets Americans. (as we said back in May).

They’re breaking into your home:

FBI agents are also using what are known as “sneak and peek” warrants on a wider scale, entering hundreds of homes clandestinely to gather intelligence and copy files and computer drives, again without notification. And they have conducted surveillance on antiwar, religious, civil rights and environmental groups, including Greenpeace and the American-Arab Anti-Discrimination Committee.

They’re tracking your politics:

Authorities and private data brokers now have easy access to a digitized footprint of their activities and interests. Phone records, political preferences and purchasing habits are now only mouse clicks away from government agents.

They’re even surveilling your Blackberry. (We’ll get to the Softwood Lumber Agreement!)

The programs comprise actual surveillance of Americans’ activities and communications, and “dataveillance,” the practice of mining the vast amounts of personal data compiled on Americans.

The NSA has improved its ability to monitor the entire spectrum of communications, including fiber-optic and wireless transmissions, instant messages, BlackBerry e-mails and voice conversations sent over the Internet, officials and experts say.

Blackberrys? Tremble, Beltway elite! Because Rove’s opposition research can get everything.

And the scope of surveillance is vast, much larger than the warrantless surveillance we already know about. In fact, some of it only Bush and a few “advisers” know about:

[Some programs] are operating without the knowledge or approval of judicial and legislative overseers, officials and experts say.

Privacy experts and even some ranking lawmakers in Congress say their efforts to learn about other suspected surveillance efforts have been blocked.

They believe that some of the activity is so secret that none but a small circle of top administration officials [Karl Rove] and operational support personnel know about it [For example?] — though notification of congressional leaders is legally required.

Hmmm… Could that be the politically explosive surveillance? Ratfucking? It would be irresponsible not to speculate—and since the Bush administration has politicized everything else, it would be highly uncharacteristic of them not to have politicized domestic intelligence gathering, illegally.

And the Softwood Lumber Agreement part of the story? Here it comes…

The Bush administration is stonewalling:

“The White House simply refuses to be straight with us about what they’re up to,” said Sen. Ron Wyden (D-Ore.), who says he has pressed unsuccessfully for answers as a member of the Senate’s Select Committee on Intelligence, which entitles him to classified briefings on the subject.

Strong stuff from Wyden. And it gets stronger:

“My sense today is that there is a staggering amount of personal information being collected on millions of Americans,” Wyden said. “And how it’s accessed and how it’s used is at best unclear. What is certain is that there is no real accountability to ensure that a balance is struck between fighting terrorism and protecting privacy.”

It’s good to see Wyden taking advantage of the “accountability” meme in MyDD’s strategy memo.

So, what would Bush’s response to Wyden’s threat to hold him accountable be?

I’d guess the first thing that would come to Bush’s mind would be bribery. And now we are at the Softwood Lumber Agreement part of the story:

Here is a map of softwood sawmills from from the United States Forest Service:

The presence of softwood sawmills is an excellent proxy for where there are softwood lumber revenues, softwood lumber jobs—and softwood lumber constituents and campaign contributions.

You will note the very high concentration of softwood lumber mills in Oregon: Ron Wyden’s state, where Bush is destroying national forests to fund rural roads and schools.

And you will remember that Bush has a $450 million slush fund available for “meritorious initiatives” in the softwood lumber industry, and that the list of beneficiaries remains mysteriously un-announced (though, by the text of the agreement, the list was to be determined September 1). Has the list not been announced because the bribes agreements between the Bush administration and our elected represenatives have not yet been not finalized? (We won’t use the word “bag men” but feel free to think it!)

While I have no difficulty believing that the increasingly desperate Bush would pay anybody anything to maintain his grip on power, I have more difficulty believing that Ron Wyden, a Democrat, would trash the Fourth Amendment, sell out the Constitution, and enable Republican authoritarian rule, all for a few pieces of silver from a Bush slush fund. Surely, at this point, the Beltway Dems know it’s not business as usual.

But I’d really like to be completely sure…

NOTE Wyden’s been one of the good guys on Iraq, and on net neutrality, but wavered on Social Security, and he’s in the tank on Gitmo. And Oregon may be getting stained with red.

UPDATE Welcome, Daou Report readers. Here’s the original post that describes the Softwood Lumber Agreement, and shows how the slush fund works. Here are all the other SLA posts. Enjoy!

UPDATE Trade rep Susan Scwhab in Ottawa tomorrow!