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Special Update #24

INTRODUCTION

On May 16, CBS News broke the story that President Bush was briefed by his national security advisors on August 6 of last year about a possible plan by Osama bin Laden's Al Qaeda network to hijack one or more US jetliners. You all know what happened after that. The Democrats pounced (more on that later). Yet they quickly backed off as their Watergate rhetoric - "what did the president know and when did he know it" - did not resonate with the public.

Even though the Dems were quick to retract their claws, at least publicly, the mainstream media continued the assault on the Bush administration. The latest issues of Newsweek and Time magazines, just to name a couple, have scathing cover stories about how the Bush administration missed and/or blundered the clues, however vague, that led up to the September 11 disaster.

Yet despite the media blitz over the issue of the August 6 briefing, Bush's approval ratings continued to soar. If I had been advising the president, and in light of the high approval ratings, I would have recommended that he and the administration simply ignore the hoopla over the issue of what did he know and when did he know it. But they didn't.

As it turned out, I was at home on the morning of Sunday, May 19 and I got a rare opportunity to watch portions of the three Sunday morning talk shows. To my surprise, the Bush administration trotted out none other than VP Dick Cheney, who was clearly on the defensive about the August 6 briefing. But his arguments about the August 6 briefing, and how no one could have known about 911, were only the "warm-up act."

On each of the shows, Cheney dropped a bombshell: There will be another major terrorist attack in the US; it's only a matter of when. Later in the day, National Security Advisor Condi Rice said the same thing on another news program. On Monday, Defense Secretary Rumsfeld told Congress that another major terrorist attack in the US was "inevitable." On Tuesday, Secretary of State Powell said the same thing, and added that the next one could be much worse than 911, alluding to possible weapons of mass destruction.

I must admit to being more than a little cynical at this point, but I have to question whether there really is a highly escalated terrorist threat all of a sudden, or if the Bush administration just decided to take that position in order to squelch at the "what did he know and when did he know it" rhetoric. I'm beginning to believe the latter. I will explore this question in more detail below.

Whatever is the true motivation of the administration recently, I also want to explore the real story on how the tragedy of September 11 could have been prevented. I have written about this before, specifically in SPECIAL UPDATE #12, but that and more deserves revisiting now.

So, with that introduction out of the way, roll up your sleeves and let's dig in.

RECENT BUSH MIS-STEPS - WHAT'S GOING ON HERE ?

I, like many conservatives, have become increasingly dismayed at Bush and his administration in recent months as they seemed to cave to political pressure on several important issues. I was surprised that Bush went along with steel import quotas. I was disappointed that he signed campaign finance reform. I was not happy with his "double standard" on Israel - we can fight terrorism, but they can't - and his refusal to call Arafat a "terrorist." I was disgusted that Bush rolled out the red carpet for the Saudi Crown Prince, the ruler of a known terrorist state. And then I was shocked that he signed the huge pork barrel farm bill.

What's going on here? My first reaction, and that of many conservatives, was that Bush has abandoned his conservative principles. Yet my colleague, Spencer Wright, had a different take on Bush's recent actions. Spencer argued (in the latest issue of our "Between The Lines" newsletter) that Bush had made the decisions and taken the actions described above for the greater cause of winning a Senate majority later this year and his own re-election in 2004.

Spencer argued that by signing onto these liberal bills and his other actions noted above, Bush was gaining the necessary votes in key states to retake the Senate in November. Once that happens, so Spencer opined, the "real" Bush, the true conservative Bush, will be back. You can read Spencer's analysis, if you haven't already, by clicking on the following link:

http://www.profutures.com/BushMissteps.pdf

THE HEIGHTENED TERROR THREAT - IS IT REAL OR IS IT A POLITICAL PLAY ?

When Dick Cheney appeared on the first Sunday talk show on May 19, and dropped the bombshell that there WILL BE another major terrorist attack in the US, I made sure to watch him on the other shows as well. He had the same "it's not a matter of if, but when" language. There was no doubt this was the message he was sent out to deliver.

Being a little cynical in the first place, I wondered . . . had the threat of another terrorist attack suddenly increased dramatically over the last week or two? We had not been hearing of such a heightened threat in the days prior to Sunday. But as noted above, Cheney sounded the alarm on Sunday along with Condi Rice, and Rumsfeld and Powell followed their lead on Monday and Tuesday, complete with the suggestion that the next attack could be much, much greater.

The question is, are these latest warnings based on real intelligence? Or are they just a political play on the part of the administration? Tom Ridge's office of homeland security, after all, has not increased its risk level for another attack. Maybe the latest warnings from Cheney and others are based on troubling new intelligence. If they aren't, here's the possible political strategy.

On the one hand, Karl Rove (Bush's senior advisor) may have been so unsettled by the media feeding frenzy over the August 6 brief that he told Bush to send out the troops (Cheney, et al) and warn of another serious terror attack. This, he may have believed, would divert attention from the "what did the president know..." debate in the media. If this was his mission, he seems to have succeeded, at least for now.

On the other hand, Rove may have decided something along the lines of the following: Okay, the media wants us to tell everything we know; yet we don't want to; but just this once, let's give 'em a really serious warning; then the Congress and the media will see it's not a good idea to unnecessarily scare the public. If this was his mission, he seems to have succeeded as well.

From the standpoint of national security, we should all hope that the latest warning of a major terror attack was largely a political move to quiet down the President's critics, and not based on real intelligence that a specific new threat is eminent. We may never know.

THE BLAME GAME - WHAT ABOUT BILL CLINTON ?

While the media is still trying to hang the blame for September 11 on President Bush, let's take a quick look back at the events which preceded 911.

February 26, 1993: A massive van bomb explodes in the underground parking garage of the World Trade Center killing six and wounding 1,042. The operation was carried out by four Islamist extremists and was masterminded by Ramsey Yousef. Yet following that disaster, there was no 'shake-up' in the government intelligence community. President Clinton did not even visit the World Trade Center. Clinton was the first modern president to not take daily intelligence briefings, and this practice continued even after the WTC attack.

1995 - Airliners as Missiles: Intelligence sources in the Philippines uncovered a plot to hijack multiple US commercial airplanes and crash them into buildings. This was called "Project Bojinka," and it was again masterminded by Yousef and reportedly funded by Osama bin Laden. This was the first link to Al-Qaeda. [What, you never heard about this in the media until now? Imagine that!]

Other evidence found was used to link Yousef to the 1993 WTC bombing and convict him. Elements of the Clinton administration became increasingly concerned with future terror attacks, yet the President still did not take daily intelligence briefs. The CIA Director could not even get a meeting with Clinton.

1996 - Gore To Investigate: Finally, after additional pressure from his Cabinet and the National Security Agency, who feared additional terrorist attacks, Clinton assigned VP Al Gore the task of reviewing airline and airport security. Though there were several good suggestions and improvements placed on the table, in the end, few if any were actually implemented in order to fix the airports or the airlines. Yet the effort was heralded as a success.

1996 - Torricelli Bill Guts CIA/FBI: In this same year, Sen. Robert Torricelli proposed legislation that would "scrub" the US intelligence agencies of supposed human rights violations. Specifically, it barred them from recruiting 'thugs' or 'unsavory characters' within the bad guy networks around the world. This resulted in the hobbling of the "HUMINT" (human intelligence) capabilities of our intelligence agencies. The Clinton administration supported it whole-heartedly.

1996 - Sudan Offers Up Bin Laden: The government of the Sudan offered to arrest Osama bin Laden and turn him over directly to the US, but the Clinton administration declined, reportedly on the grounds they feared we did not have enough direct evidence to indict him. DUH???

After Clinton declined the first offer, Sudan even offered to arrest bin Laden and deport him to a mutually agreed upon third country, whereupon the US could take him into custody and do whatever we would with him. Again, Clinton declined the offer, after which Sudan forced bin Laden to find another host country. He went to Afghanistan. We know the rest of the story.

I reported this in SPECIAL UPDATE #12, with all the details, and called it the most damning evidence against Clinton during the eight years of his presidency. You can read (or re-read) that disgusting story in the link below:

http://www.profutures.com/CLINTONBINLADEN.pdf

June 25, 1996: In Dhahran, Saudi Arabia, a fuel truck carrying a bomb exploded outside the Khobar Towers housing facility. 19 US military personnel were killed and 240 were wounded. Like the 1993 attack before it, the 1996 attack came as a complete surprise. An investigation later identified the outlaw Saudi "Hezbollah" movement as responsible. Again, no serious action was taken by the Clinton administration. No shake-up in national security.

August 7, 1998: A car bomb exploded at the rear entrance of the US embassy in Nairobi. The attack killed a total of 292, including 12 US citizens. On the same day in Tanzania, a car bomb exploded outside the US embassy killing 11 and injuring 86. Osama bin Laden and Al-Qaeda claimed responsibility. Again, the attacks were a total surprise. Nothing was done in response. No shake-up in national security.

August 20, 1998: Finally, in what some ridiculed as a "wag the dog" tactic, Clinton ordered cruise missile attacks on Sudan and Afghanistan. The attack in the Sudan destroyed a pharmaceutical (so called "aspirin") factory, while the Afghanistan attack destroyed a long deserted Al-Qaeda camp (the so-called "tents in the desert" bombing).

The August 1998 bombings, incidentally, occurred at the height of the Monica Lewinski Grand Jury hearings which were dominating the media. Many believe Clinton ordered these missile strikes solely to divert media attention from his Monica problems. IF these strikes were not entirely politically motivated, they were intelligence failures of the first order and a sign of more bad things to come.

October 12, 2000: At Aden harbor, in Yemen, a suicide squad rammed the warship USS Cole with an explosive-laden boat. 13 sailors were killed and 33 wounded. The attack was credited to Osama bin Laden and Al-Qaeda. Once again, the attack was reportedly a total surprise. Despite election year rhetoric, once again nothing was done by Clinton to revamp national security.

YET BUSH IS TO BLAME ?

Former Clinton aides say he waived the national security tradition of the "President's Daily Brief" (PDB) compiled by the intelligence agencies. All other modern presidents have received these briefings. Apparently, Clinton didn't consider that information to be important and left it to others to review. Ditto for meetings with the CIA Director.

Numerous terrorist attacks which cost American lives occurred on Clinton's watch, yet nothing significant was done to revamp national security, and the media was SILENT about these problems.

Now they would have us believe that the Bush administration should have been able to foretell the tragic events of 911 from that August 6 PDB that reportedly warned only of a possible airline hijacking, possibly by agents of Al Qaeda.

The Democrats shot themselves in the foot by blaming the President, and they quickly retreated. Yet the media, especially the print media such as Newsweek and Time, were already at the presses with the "BLAME GAME" stories that, frankly, are an EMBARRASSMENT!

Having said that, I do not believe that all of the information regarding "who knew what and when did they know it" about 911 has yet been revealed. My bet is we will see more information leak out in the weeks and months ahead. Some of it may confirm that the Bush administration could not have known more specifically about 911 in advance. Or, some of it may suggest that the Bush team should have done a better job of connecting the dots. Only time will tell.

Based on the information we know about today, the Bush administration is not at fault for the events of 911. The American people never bought into the idea in the first place. Bush's approval ratings are soaring once again.

WHAT'S WRONG WITH OUR INTELLIGENCE/ SECURITY AGENCIES & HOW DO WE FIX THEM ?

Next week, I will send you a very informative analysis from Stratfor.com which explains not only how our national security agencies (NSA, CIA, FBI, etc.) have gotten so screwed-up, but also what will have to happen to fix them. I think you will find it very helpful in understanding the problems.

MISDIRECTED E-MAIL EXPOSES SORDID POLITICAL STRATEGY THE DEMS USE

Late-breaking story: a misguided e-mail reveals how the Democrats attempt to scare the elderly with admitted lies about the Republicans. You can read about it in the first two links below if you haven't already heard about it.

That's all for now.

Wishing you a great holiday weekend,

Gary D. Halbert

SPECIAL ARTICLES

E-mail may be smoking gun for GOP.

More on the Dems' e-mail.

Democratic self-destruction.

GOP is the winner in the blame game.

Despite new bumps, presidential approval remains high.

Fmr. CIA Director Woolsey says stop the blame game.

Phoenix memo never makes it to Bush.

Morris on what Clinton knew, and when he knew it.

Right questions, wrong president. From the left wing, a swipe at Clinton.


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Forecasts & Trends E-Letter is published by ProFutures, Inc. Gary D. Halbert is the president and CEO of ProFutures, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, ProFutures, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.

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