Krugman makes the case for Chinese currency bill,
while Bachmann warns of Chinese lasers

Bachmann warns us of the dangers of Chinese lasers.
(Reuters)
With an initial vote ("a cloture vote on a motion to proceed") on Chinese currency manipulation scheduled in the Senate for Monday, Paul Krugman makes the case for the legislation in typically ferocious Krugman fashion:

To get our trade deficit down, however, we need to make American products more competitive, which in practice means that we need the dollar?s value to fall in terms of other currencies. Yes, some people will shriek about ?debasing? the dollar. But sensible policy makers have long known that sometimes a weaker currency means a stronger economy, and have acted on that knowledge. Switzerland, for example, has intervened massively to keep the franc from getting too strong against the euro. Israel has intervened even more forcefully to weaken the shekel.

The United States, given its special global role, can?t and shouldn?t be equally aggressive. But given our economy?s desperate need for more jobs, a weaker dollar is very much in our national interest ? and we can and should take action against countries that are keeping their currencies undervalued, and thereby standing in the way of a much-needed decline in our trade deficit.

That, above all, means China. And none of the arguments against holding China accountable can stand serious scrutiny.

The politics of passing the bill remain unchanged: It is expected to get through the Senate easily and has substantial support in the House, but House Republican leadership does not want to bring it to a vote and President Obama does not want it passed. In fact, as Brian Beutler suggests, one reason for Republican leadership to hold a vote would be to put Obama in the difficult position of vetoing a popular bill or signing something he has concerns about.

Of course all of these concerns about Chinese currency manipulation pale next to House Intelligence Committee member Michele Bachmann's information that China is blinding American satellites with lasers.

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The Man Behind Pakistan Spy Agency's Plot to
Influence Washington

By Kim Barker and Habiba Nosheen, ProPublica, and Raheel Khursheed, Special to ProPublica

The night should have been a coup for Syed Ghulam Nabi Fai. Once a poor villager from halfway around the world, Fai had become the go-to man in Washington, D.C., for his cause, Kashmir, the Himalayan region long caught in a tug of war between Pakistan and India.

And there he was on March 4, 2010, hosting a fundraiser for Rep. Dan Burton, the Indiana Republican who had been the chief supporter in Congress of Fai's Kashmiri American Council for 20 years. In some ways, the event inside Fai's home in Fairfax, Va., symbolized everything that Fai had become, featuring speeches in the living room and kebabs and curries in the basement.

But it barely camouflaged how Fai's carefully built world was collapsing.

The FBI was monitoring almost every move Fai made, every email he sent, every call he received. Investigators believed Fai's main donors were not well-meaning idealists but members of the Inter-Services Intelligence Directorate, or ISI, the most powerful of Pakistan's spy agencies.

Within weeks, the Justice Department would send Fai a letter of warning. Within months, he would be pulled over by New York police with $35,000 in cash in his car. And by the next year, Fai would be arrested, the unlikely central character in a scheme by a foreign government to pay more than $4 million to sway U.S. politicians and policy on Kashmir, the Justice Department says.

Fai's tale of rags to riches to arrest this summer is a lesson in how easy it is to win influence in Washington. Fai mingled with some of America's top politicians, meeting former President Bill Clinton and drawing as many as 32 members of Congress to his annual conference on Kashmir. Fai's access to power illustrates an issue that could become even more significant in this election cycle: foreign money illegally coming into U.S. political campaigns.

But the case, the first known criminal prosecution of its kind, could also involve much more. It is unfolding at a particularly sour moment in the relationship between the United States and Pakistan, once a key ally in the war on terror. Fai's alleged accomplice, Zaheer Ahmad, is a prominent Pakistani-American who runs one of the nicest hospitals in Pakistan. The FBI has reportedly questioned at least one person about Ahmad's ties to a Pakistani nuclear scientist who once met with Osama bin Laden.

To the Indian media, FBI and Justice Department, Fai had long denied being an agent of Pakistan. That changed the day he was arrested. Then, the FBI says, he told an agent that for 15 years, the ISI had funneled money to him and directed him to attend certain conferences and even to report back on certain people.

"He was living a lie," Assistant U.S. Attorney Gordon Kromberg said at Fai's initial court hearing. "When he spoke to politicians, when he spoke to members of Congress, when he spoke to heads of state, he didn't say, 'I get my money from the ISI.' "

A Pakistani embassy official in Washington, who spoke on condition of anonymity because of the sensitivity of the case, said allegations that Fai and Ahmad were working for the ISI were false. "The ISI has no connection with these two persons," he said, adding that the FBI has not talked to anyone at the embassy about the investigation.

So far, Fai, 62, and Ahmad, 63, have been accused of failing to register as foreign agents, punishable by a maximum of five years in prison. Fai also has been accused of making false statements. But Ahmad, who is free in Pakistan, and Fai, released on $100,000 bond and under house arrest, may soon face other charges. A grand jury has been hearing evidence, and a recent deadline to indict the men or drop the case was extended by two months.

Typically, people at the center of such cases remain a mystery, refusing to speak about their predicament or what led up to it. Fai, a birdlike man with a sing-song voice and thinning hair combed to the side, declined to talk about the case against him. But in his only interview since his arrest, Fai offered a detailed account of his journey from being a victim of world events to, in some small way, a shaper of them. Another U.S. ally, Saudi Arabia, played a pivotal role in his transformation, he explained. Mostly, though, Fai spoke about Kashmir, which remains his focus even amid his legal troubles.

"[My wife] said, 'You are not doing anything wrong, so you are helping your people of Kashmir,' " said Fai, sitting on a floral-patterned couch beneath a framed verse of the Quran. "And we know it's not an easy job, but we have to live with it."

***

Fai was born in 1949, just after the first war between Pakistan and India over Kashmir. India had held onto the Muslim-majority territory during its partition with Pakistan, even though Pakistan claimed it. The U.N. brokered a truce and called for a plebiscite for Kashmiris, which never happened. Kashmir remained split.

Fai grew up in a poor farming village near poplars and rice paddies about 25 miles outside Srinagar, the summer capital of India's state of Jammu and Kashmir. His father was an Islamic cleric.

The struggle over Kashmir consumed Fai: He listened to speeches from Pakistan on an illicit transistor radio. He waited outside for eight hours to see a leader just released from jail. By 1965, India and Pakistan were again at war over Kashmir, and Fai recalled watching his family slaughter sheep and chickens, then taking food and clothes to Pakistani soldiers hiding in the forest.

That year, at age 16, Fai married, his first wife said. The couple had two children. Both died young.

Fai attended college in Srinagar and fell in with the Jamaat-e-Islami, a fundamentalist South Asian Islamic group later linked to militant groups. He worked as the executive assistant to the local Jamaat founder, said Syed Atiqullah Ashiq, a Jamaat colleague and friend.

In 1976, shortly after India's prime minister declared an emergency and banned groups like Jamaat, Fai left home for a university outside Delhi and eventually for Saudi Arabia.

There, his life changed with one chance encounter in July 1980. A university dean encouraged Fai to reach out to the imam of Ka'aba--the cleric who leads prayers at the holiest site in Islam. Fai recalled inviting the imam to a Kashmir conference sponsored by Jamaat in Srinagar. The cleric agreed. At age 31, Fai returned to Kashmir, escorting perhaps the most influential Islamic leader in the world.

Tens of thousands of people showed up to hear the imam give a series of speeches. At one point, the scene was so chaotic Fai lost a shoe.

"It really revolutionized the whole thinking of the people of Kashmir: We are not alone," Fai recalled.

Fai and the imam of Ka'aba played a pivotal role in introducing the strict Saudi vision of Islam to Kashmir, which traditionally had been more moderate, said Arif Jamal, a Pakistani journalist who has written a book on the shadow war in Kashmir and who researched Fai's role.

After that visit, Fai left Kashmir and never returned to India. He said he had heard he would be arrested for treason. Several family members said they hadn't heard from him since.

"No phone, no letter, nothing, no correspondence right from 1980 until now," said Syed Ghulam Mohiuddin Habib, Fai's half-brother.

"Ghulam Nabi never wrote to me, never sent any money," said Peera Bano, his first wife.

Fai said he didn't write or call because he didn't want to endanger his family. He also said he divorced his first wife, which she denies.

By the end of 1980, Fai landed in the United States. Through the King Faisal Foundation, the Saudis agreed to pay for his schooling and living expenses, at least $50,000 a year. The Saudis even chose where he studied.

"They told me that you should go to Temple University, because one of the giants of Islamic scholarship was there; in fact, two giants," Fai recalled.

The late Ismail Raji al-Faruqi was a professor specializing in Islam at Temple and would soon help found the International Institute of Islamic Thought. (The institute later came under investigation in a federal probe into terrorism funding, although no charges were filed.) Another professor, Seyyed Hossein Nasr, a respected Islamic scholar, was trying to "Islamicize" the social sciences, Fai said.

At Temple, Fai became president of the Muslim Students Association of the U.S. & Canada, an organization started in part by members of the Muslim Brotherhood, which had spread from Egypt through the Middle East. Some branches of the Brotherhood were hardline; others, more moderate.

Fai also started working for the ISI in about 1985 while at Temple, according to correspondence cited by the FBI, although the affidavit does not make clear what he was doing.

After earning his doctorate in 1988, Fai joined the advisory council for the Islamic Society of North America, an umbrella group started by the Muslim Students Association that also received Saudi funding.

Soon, violence bloomed again in Kashmir. The Indian military cracked down on indigenous groups. Pakistan's ISI was blamed for sponsoring insurgent groups across the border in Kashmir.

A confidential witness allegedly told FBI agents that in 1989 the ISI picked Fai to run the Kashmiri American Council because he had no overt ties to Pakistan. Similar groups were set up in London and Brussels, the FBI said.

Incorporation documents filed in Maryland in April 1990 show Fai was one of three people who established the Kashmir center. A second founder was Rafia Syeed, the wife of Sayyid Syeed, one of the organizers of ISNA. The third founder's father, who retired from the Pakistani military, also held a key post in a charity run by Fai's alleged accomplice, Zaheer Ahmad. The Syeeds did not reply to requests for comment. The third founder, Mohammad Bilal Yousaf, denied knowing Fai. "I have never heard of Dr. Fai before, only what's been reported in the media," he said.

IRS filings show the group got startup funds from two board members and a $20,000 loan from the North American Islamic Trust, an ISNA-linked group that hold titles to about 300 U.S. mosques, Islamic centers and schools.

Fai rented an office suite about three blocks from the White House, IRS records show. The Kashmiri American Council was open for business.

Within weeks of establishing the group, Fai made his first campaign contribution, $500 to Burton. Neither man would say how they met, but Burton, who later gained fame for investigating the Clintons as chairman of the House Oversight and Government Reform Committee, was a natural friend for Fai. The congressman had just sponsored a bill aiming to curtail aid to India until human-rights abuse investigations were allowed, particularly in Punjab and Kashmir. "Not even the Red Cross has been allowed access to Kashmir," Burton announced on the House floor.

Months later, Fai invited people to the council's first delegates meeting at a Holiday Inn in Dayton, Ohio. Burton, Fai announced, had agreed to be the keynote speaker.

*******

Over the next 20 years, Fai became the face of the separatist Kashmiri cause in the U.S. He never advocated publicly for Kashmir to join Pakistan, calling instead for "self-determination."

At first, Hafiz Mohammad Sabir, now an imam of one of the largest Pakistani mosques in Brooklyn, said he doubted Fai's commitment to Kashmir. "On that time, believe you me, he was alone," recalled Sabir, from the Pakistan side of Kashmir. "He cannot even come to the Kashmiri community and gather 10 Kashmiris."

But in about 1994, when Sabir was working as a cabdriver, he spotted Fai in midtown Manhattan, lugging a large bag through more than a foot of snow. Fai was handing out fliers about Kashmir, Sabir realized. He grabbed the bag, put it in his taxi and drove Fai wherever he wanted to go. After that, Sabir said, he helped Fai however he could, bringing busloads of mosque members to conferences in Washington and helping to spearhead protests in New York.

At about the same time, Fai was making inroads with U.S. politicians. In 1993, Fai wrote President Clinton about the suffering of Kashmiris, winning news coverage when Clinton wrote back. In 1996, Fai met Republican presidential nominee Bob Dole at the Republican National Convention. In 2000, he met Clinton in Chicago, just before Clinton visited India.

Fai grew particularly close to a few House Republicans. In 2002, an ally of Fai's, Rep. Joe Pitts of Pennsylvania, helped form a congressional forum on Kashmir. In an interview, Pitts said he met Fai after becoming interested in Kashmir, and felt that Fai wanted Kashmiris, Indians and Pakistanis to come up with a peaceful solution together. "Dr. Fai is an old gentleman, an American citizen interested in giving back to his homeland, interested in peace and peace talks," Pitts said.

Fai's most significant relationship was with Dan Burton. In 2004, Fai testified in front of Burton's subcommittee hearing on human-rights abuses in Kashmir. Burton introduced him personally, saying, "I've known Dr. Fai for a long time."

In 2007, Fai was given the American Spirit Medal, the highest award from the National Republican Senatorial Committee, for being committed to conservative principles.

Fai also leapt onto the world stage. He traveled to more than 40 countries, from Indonesia to Spain. Fai said he met with more than 1,000 ambassadors from around the world.

In Pakistan, he was treated like a visiting dignitary. In June 2009, Fai stayed at the best hotel in Islamabad and met the president, prime minister and foreign minister. A video from the trip showed Fai and President Asif Ali Zardari sitting in white armchairs, flanking a photo of Zardari's late wife, Benazir Bhutto.

Each year, starting in 2003, Fai co-hosted a Kashmir peace conference, usually on Capitol Hill. The 2007 conference drew Pitts, a dozen other members of Congress and various Pakistani dignitaries, as well as a handful of Indian and Indian-American human-rights activists and scholars. Fai covered the expenses of almost all the attendees who traveled to Washington.

About 20 of Fai's guests then flew with him to Montevideo, Uruguay's capital, for a one-day conference on Kashmir. They met with a group of Uruguayan generals and attended sessions that ran over familiar ground.

"[Fai] spoke about the usual things," recalled Angana Chatterji, an Indian-American scholar who attended the event. "He has this list of dignitaries he brings up and issues like the U.N. treaties and self-determination."

Fai paid for the group's flights. He also covered accommodations at the Radisson, one of Montevideo's nicer hotels, having about $13,000 wired to him to cover the tab in cash, Sabir said.

By last year, Fai was in some ways living the American dream. His second wife, whom he had met at Temple, had found a good job at the U.S. Environmental Protection Agency. They had bought a four-bedroom brick house in the Virginia suburbs for more than $650,000. They had raised two children, one who studied at Ohio State University, the other at Stanford.

But behind the scenes, things were unraveling.

***

As far back as 1991, stories in the Indian press referred to Fai as an "agent." The Indian embassy refused to send anyone to his conferences. Others were also suspicious: How did Fai have so much money? How could a shoestring nonprofit afford an office near the White House and a top-notch PR firm?

"I have always felt, and I know my view is widely shared by others working on the Kashmir issue in the Washington area, that Dr. Fai's Kashmiri American Council was subsidized by the Pakistan government," said Howard Schaffer, a former U.S. diplomat and Kashmir expert who has known Fai for about 15 years.

The Kashmiri American Council never operated like an ordinary charity, according to nonprofit experts. Money, sometimes large amounts, passed through it in unusual ways.

Several council supporters said they had donated regularly, maybe a few thousand dollars at a time, and were unaware of the ISI's purported role in funding the group. But the FBI says the largest donations came from a group of at least 13 unnamed "straw donors," Pakistani-American doctors and businessmen who gave cash to Fai or wrote checks to the Kashmiri American Council. Several received tax write-offs for their contributions.

Zaheer Ahmad, who ran Shifa International Hospital in Islamabad, allegedly reimbursed the straw donors with money he received from the ISI.

At minimum, the write-offs violated U.S. tax laws, experts said. "That's not allowed," said Eli Bartov, a research professor of financial accounting at the Stern School of Business at New York University. "You can only get the deduction if you make the contribution."

But there was a larger mystery.

Internal budget documents confiscated by the FBI show far more money flowing through the Kashmiri American Council than reflected in the group's annual IRS filings. In its 2008 IRS filing, for example, the group reported spending $291,807, while the budget documents say the amount was more than twice that much, $690,380. In 2009, the council's reported spending was $332,706, while its internal records said $662,730.

So far, the government has not offered an explanation for these discrepancies. Fai did not answer questions on the matter.

Pablo Eisenberg, an expert on philanthropy and a senior fellow at the Georgetown Public Policy Institute, said there could be several reasons for the conflicting information.

"One is, he wants to downsize for public consumption," Eisenberg said of Fai. "Or ... he's taking the money to use for his own purposes, whether spending it on himself or giving it to some other organization."

It's also possible Fai reported money he received by check but not in cash, particularly cash transferred to him outside the U.S., said Marcus Owens, the former head of the IRS unit that oversees nonprofits.

Fai's internal budget documents spelled out plans to spend $80,000 to $100,000 a year on campaign contributions to members of Congress, the FBI said.

But donations made by Fai, his associates and board members appear to fall far short of those amounts, campaign finance records show.

5/4/1990 $500 Burton, Dan (R) 9/4/1990 $790 Burton, Dan (R) 5/20/1991 $500 Burton, Dan (R) 9/30/1992 $1,000 Kasten, Bob (R) 10/5/1994 $500 Burton, Dan (R) 6/12/1995 $500 Burton, Dan (R) 6/25/1996 $500 Durbin, Richard J (D) 6/28/1996 $500 Rahall, Nick J II (D) 8/14/1996 $500 Rohrabacher, Dana (R) 3/21/1997 $500 Kucinich, Dennis (D) 5/28/1997 $500 Burton, Dan (R) 2/27/1998 $1,000 Moran, James P Jr (D) 8/9/1999 $250 Gore, Al (D) 9/28/1999 $250 Sununu, John E (R) 9/5/2000 $250 Meeks, Gregory W (D) 7/14/2004 $3,500 National Republican Senatorial Cmte (R) 9/13/2004 $2,000 Pitts, Joe (R) 9/28/2004 $2,000 Burton, Dan (R) 5/2/2005 $1,000 Burton, Dan (R) 10/6/2006 $5,000 National Republican Senatorial Cmte (R) 2/21/2007 $500 Clarke, Yvette D (D) 6/19/2008 $1,000 National Republican Senatorial Cmte (R) 9/15/2008 $2,000 Burton, Dan (R) 11/2/2008 $250 Obama, Barack (D) 6/25/2009 $250 Democratic Senatorial Campaign Cmte (D) 3/23/2010 $2,000 Burton, Dan (R) 4/16/2010 $250 DNC Services Corp (D) 6/9/2011 $375 DNC Services Corp (D) Sources: FEC and OpenSecrets.org

Fai has given $28,165 to federal candidates and political parties since 1990, including $10,290 to Burton and $9,500 to the National Republican Senatorial Committee. Others connected to Fai, Ahmad and the Kashmiri American Council's board of directors donated at least $93,456 during those years, including $28,551 to Burton.

So far, the FBI has identified only $4,000 in ISI money that went into campaign contributions, from Ahmad and his nephew. Pitts and Burton received $2,000 each, the FBI said.

Ultimately, the affidavit may tell only part of what the FBI was actually investigating.

Agents first learned of the case in 2005 from an informant who wanted to reduce his jail sentence. The counterterrorism division of the FBI's Washington field office started looking into Fai -- and more troubling allegations against Ahmad.

A Pakistani-American physicist, Gul Chughtai, who specializes in cancer treatment and clashed with Ahmad while head of the cancer department at Shifa International Hospital, said he first talked to the FBI about Ahmad four years ago.

Chughtai said he met with four agents at the FBI's Philadelphia office, including one from Washington's counterterrorism division already investigating Ahmad. Chughtai said the agent has talked to him since, asking several times about a trip that Ahmad allegedly made to Afghanistan with an eccentric Pakistani nuclear scientist named Sultan Bashiruddin Mahmood.

Mahmood and another colleague had met with Osama bin Laden and Ayman al-Zawahiri in Afghanistan in August 2001, when the al-Qaeda leaders had allegedly inquired about nuclear weapons. Mahmood was later placed under house arrest and has been largely isolated in Islamabad since.

Chughtai, who in the 1990s had set up a MRI machine next door to Mahmood and knew that Mahmood and Ahmad were friendly, said he had heard rumors that Ahmad had once accompanied a nuclear scientist to see bin Laden but had forgotten the scientist's name. And that was what the counterterrorism agent was most interested in.

"[He] called me and said, 'Dr. Chughtai, I have done more research about Zaheer than anybody else. I could do a thesis,'" Chughtai recalled. "He wanted me to send everything possible on Shifa. I faxed and faxed. One day he called and asked about Zaheer going with a nuclear scientist to see Osama. I said, 'I heard the story, don't remember the guy.' He asked if I would recognize the name. I said, 'Maybe.' He said, 'Bashiruddin.' And that was the name I remembered."

Chughtai said the FBI agent also asked about people working in the Pakistani embassy in Washington, but he didn't recognize any names.

An FBI official confirmed that the agent had met with Chughtai but refused to discuss the investigation. The official also verified to ProPublica that the agent who talked to Chughtai worked on the same team as Sarah Webb Linden, the FBI agent who signed the affidavit against Fai and Ahmad. The FBI requested that ProPublica not name the agent, to avoid compromising the investigation.

***

The FBI first questioned Fai in 2007 but seemed to step up its scrutiny in 2010.

That March, the Justice Department sent Fai a letter, telling him that the Indian press had reported that he was a Pakistani agent, and if so, he needed to register with the department as a foreign agent. Fai responded after several weeks, denying he was an agent of Pakistan.

Three months later, New York police pulled Fai over and found $35,000 in cash in his car. Fai claimed the money was from a man identified by the FBI as "Straw Donor B." After getting advice from Ahmad, the donor allegedly told the FBI that the money was from Sabir, the Brooklyn imam. But the cleric wasn't even in the U.S. when Fai was pulled over, the FBI said. In his interview with ProPublica, Sabir identified Straw Donor B as a man in his 30s named "Akif" and called him "a stupid boy." Sabir denied giving Akif money for Fai. ProPublica could not find Akif.

Despite the growing pressure, Fai kept traveling the world and kept asking the ISI for more money, the FBI said. Fai's lawyers have pointed out that Fai repeatedly chose to return to the U.S., despite knowing he was being watched.

To some, Fai's behavior indicated that he believed that he was protected.

"The ISI probably told him: 'Don't worry, you're taken care of, you're part of the tacit agreement we have with the CIA,'" said Vijay Sazawal, who is from the Indian side of Kashmir and started a rival Kashmiri group in the U.S. "He's not stupid. I have to believe he was confident he was shielded."

In February, Fai traveled to Pakistan, right about the time that U.S. and Pakistan relations were starting to fall apart. CIA operative Raymond Davis had been arrested for allegedly shooting two men in Lahore. The arrest and fallout heightened tensions between the countries.

When Fai returned home, his luggage was searched. Customs agents found what appeared to be excerpts of a court filing on Davis from the Lahore High Court. Within days, Linden, the FBI agent, visited Fai at home. She asked whether he knew anyone in the Pakistan government. Yes, he admitted. But he then suggested that none of them knew him, the FBI affidavit said.

Fai also allegedly showed Linden the court filing, which had a photocopy of a photograph of Fai on the back.

Linden testified that she emailed Fai on July 13, asking to meet again "to talk about the situation in Kashmir." Fai agreed.

She showed up at Fai's house after he returned from a trip to the United Kingdom, on the morning of July 18. Fai again denied working with the ISI.

That night, Fai went out to dinner with family and friends. After coming home, Fai or a family member called the police to report a suspicious car parked near Fai's driveway. FBI agents were in the car.

The next morning, Fai was arrested as he drove his wife toward the subway.

Before charges against Fai and Ahmad were were publicly announced, agents fanned out across the U.S., questioning about 18 men linked to Ahmad, said Shafqat Chaudhary, who serves on the boards of Ahmad's hospital and his U.S. charity, the Society for International Help. Chaudhary, a Long Island businessman, said the FBI questioned him but declined to say what it asked him. He said he wasn't involved in transferring money for Ahmad and had done nothing wrong. Chaudhary said none of the men questioned by the FBI had been arrested, as far as he knew.

Sabir said law-enforcement agents -- he wasn't certain which agency they were from -- also questioned him, showing him photographs of Chaudhary, Akif and Ahmad, along with several photographs of men he didn't know. He said he had not moved money to Fai.

In a phone conversation, Ahmad said he was free and working at Shifa. "Until this case is finished, I can't discuss this," Ahmad told a ProPublica reporter. "And it could be dangerous for you, too."

Some of Fai's supporters defended him. They pointed out that Fai was arrested the same day U.S. Secretary of State Hillary Clinton was in India, where officials had long complained about his group. They pointed out that Kromberg, the assistant U.S. attorney on the case, has been accused of anti-Muslim bias. They said they believe Fai was a victim of the chill in U.S.-Pakistan relations.

"They say that when two elephants fight, it's the grass that gets trampled," said Mirwaiz Umar Farooq, the leader of a moderate separatist group in Kashmir who always traveled with Fai when visiting the U.S. "Similarly, poor Fai has been a victim of these cross-agency wars."

At a detention hearing on July 26, Fai's lawyers indicated they will argue that even if Fai got money from the ISI, he didn't follow its directions. "His message was always his own message," said one lawyer, Khurrum Wahid, in a news conference after the hearing. "It was never the message of the Pakistani government."

Some legal experts said the case raised questions about why the Justice Department would so aggressively pursue Fai, even asking for pretrial confinement, considering the relatively light charge. Charles Swift, a former military defense lawyer who has represented high-profile terror defendants in private practice, said he researched the registration law and could not find another case in which criminal charges had been pursued.

Even when the Irish Northern Aid Committee in New York was accused of being a front for the Irish Republican Army, the group was only sued civilly and eventually forced to register. A group of 10 Russian spies was charged with failing to register last year, but they were allowed to leave the country as part of a spy swap.

Several Kashmiris said they worried that the real victim in the case would be their struggle for self-determination.

"The Kashmir movement, as we talk about it in Washington D.C., was identified with Dr. Fai," said Mumtaz Wani, a lawyer in Washington from the Indian side of Kashmir. "And we find it's a huge setback to us. At this stage I don't feel that many in Congress will be willing to talk to us. Not even Dan Burton."

Burton and Pitts announced they would donate any campaign contributions linked to Fai and Ahmad to charity. The FBI affidavit says there's no evidence any politician knew Fai's money had come from the ISI. "I was really stunned that he might be an agent, undisclosed and unregistered," Pitts said. "I was shocked."

After his arrest, Fai sat down for another interview with Linden.

This time, Fai admitted that he had been affiliated with the ISI for 15 years, and that no one on the Kashmiri American Council board had known the group was funded by the ISI, Kromberg said at the detention hearing. Fai also allegedly wasn't just bankrolled by Pakistani spies. Instead, Kromberg said, Fai "agreed that the ISI directs him, Mr. Fai, to go to certain conferences and to report on certain people, including some that were mentioned in the criminal complaint."

Fai told ProPublica he's stopped talking to Ahmad or anyone else in Pakistan. He said he doesn't want anyone else to get in trouble.

While under house arrest, Fai keeps working even as he reports all his meetings to the FBI. He goes to the mosque to meet friends. He edits a new 54-page paper on Kashmir, focusing on topics such as the U.N. resolution from 1949 and the visit of the imam of Ka'aba in 1980. He sends out emails to the Kashmiri American Council's mailing list, saying he will keep fighting for Kashmiris to decide their future.

"God willing!" he wrote in one. "I will continue to do that in days, weeks, months and years to come."

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CIA Operative, Who Caused International Crisis
After Killings, Arrested After Argument Over Parking Spot

For a CIA operative, Raymond Davis sure has trouble keeping a low profile.

Earlier this year Davis sparked a diplomatic standoff after shooting two men dead on the streets of Lahore, Pakistan.

Now Davis -- who was freed in March after two months in Pakistani custody only after a deal was reached to pay $2.34 million in 'blood money' to the victims' families -- on Saturday was arrested after a scuffle outside an Einstein Bagels south of Denver, the Associated Press reports.

According to a local ABC affiliate, Davis and another man got in an argument over a parking space, and things allegedly got physical. Davis was allegedly the aggressor, according to the report. Jeff Maes, who was involved in the incident recounted the story to Watch 7NEWS:

"He literally parked his car behind me and started shouting at me and I says, 'You need to relax'. And he got out of the car," Maes said Saturday. "When I got hit I went back, I hit my back straight on the concrete and then, I don't know, I must've got up. I looked, he's standing there and I got up to defend myself and started again."

Authorities charged Davis with third-degree assault and disorderly conduct, according to the report, and he was released after posting $1,750 bond.

When reached for comment, the Douglas County Sheriff's Office did not offer any additional details.

Read more here.

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Bloomberg: Occupy Wall Street Is Targeting People
'Struggling To Make Ends Meet'

New York City's billionaire Mayor Michael Bloomberg thinks the Occupy Wall Street protesters shouldn't be fighting Wall Street, because most of those people are "struggling to make ends meet."

The "Occupy Wall Street" protests were organized by the hacking collective Anonymous against influence of the financial sector in politics, and have been slowly growing since they started September 17. Things are expected get even bigger this week, when some of New York's biggest labor groups say they will join up.

But Bloomberg thinks the protests are against the wrong people. "The protesters are protesting against people who make $40-50,000 a year and are struggling to make ends meet," he said on John Gambling's WOR radio show Friday, Politicker NY reported. "That's the bottom line. Those are the people that work on Wall Street or on the finance sector."

"People in this day and age need support for their employers," Bloomberg continued. "We need the banks, if the banks don't go out and make loans we will not come out of our economic problems, we will not have jobs."

He added: "Also we always tend to blame the wrong people. We blame the banks. They were part of this, but so were Freddie Mac and Fannie Mae and Congress and you and me and everybody."

Here's the audio:

Via ThinkProgress.

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Mitt Romney sits down with Mike Huckabee to
flip-flop on abortion

Oh Mitt. We all know how utterly unprincipled you are, how you'll say absolutely anything if you think it might help you to secure the Republican nomination, even if it's the exact opposite of what you've said before. And it's not as if you haven't spent the past several years trying to pretend that you never gave full-throated support to protecting women's reproductive rights.

So the endorsement-fishing expedition with Mike Huckabee this weekend is really just more of the same:

HUCKABEE: Would you have supported a constitutional amendment that would have established the definition of life at conception?

ROMNEY: Absolutely.

Wanting an amendment to the state's Constitution to ban women's reproductive rights is a pretty far cry from the Mitt Romney of 1994:

"I believe that abortion should be safe and legal in this country. [...] I believe that since Roe v. Wade has been the law for 20 years, that we should sustain and support it and I sustain and support that law and the right of the woman to make that choice. [...] And you will not see me wavering on that."

Of course, there's no way that 1994 Pro-choice Romney could have known just how much he'd need to "waver" on women's rights in order to have a snowball's chance in hell of winning the uber-crazy vote known as his party's base. And as Jed Lewison pointed out last week, Romney has a perfectly valid reason for completely reversing himself on his supposed principled positions:

"In the private sector," he said, "if you don't change your view when the facts change, well you'll get fired for being stubborn and stupid. Winston Churchill said, 'When the facts change I change too, Madam." What do you do?"

It's hard to argue with that kind of infallible logic. Oh, except for the part where that wasn't Winston Churchill; that was John Maynard Keynes.

But other than that, it's perfectly obvious that Romney has simply changed his position based on the facts. See, in 1994, Romney supported women's reproductive rights because Roe v. Wade had been the law of the land for 20 years. But, see, that's no longer true. Now that Roe v. Wade has been the law of the land for 30 years, that fact has changed. His whole reason for supporting women's rights in the first place is invalid. And what kind of principled leader would Romney be if he continued to support women's rights on the faulty basis that Roe v. Wade has been the law of the land for 20 years when that quite obviously is no longer true?

Would Churchill Keynes continue to support a principled position based on 20 years of precedent even when that precedent extended beyond 20 years? Of course not! And neither will Mitt Romney. Because he's unwavering that way.

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Put Up Your Dukes

Obama campaign previews new Populist reelection campaign in new strategy memo. [...]

Read The Full Article:
http://feedproxy.google.com/~r/Talking-Points-Memo/~3/gJGmKSw4u6A/put_up_your_duk
es.php

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Does Someone Need a Timeout

Intelligence operatives are supposed to know how to keep a low profile. Last we heard of CIA operative Raymond Davis he was at the center of a diplomatic crisis with Pakistan after he was arrested for shooting two men dead on the streets of Lahore,[...]

Read The Full Article:
http://feedproxy.google.com/~r/Talking-Points-Memo/~3/PaiP8PsmZRw/does_someone_ne
ed_a_timeout.php

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The muddled Republican presidential primary

Over at AMERICAblog Elections: The Right's Field, I take a look at the ongoing saga that is Chris Christie's speculative candidacy. I also look at the broader question of whether or not there will ever be a resolution between the tensions that have emerged between the Tea Party and the 51% of Republicans who don't identify as part of the Tea Party. No candidate has satisfied both the extreme and hyper-extreme wings of the base as of yet and I doubt Chris Christie will be the one who does it.

Read the post at AMERICAblog Elections: The Right's Field.

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Skepticism on 3rd TARP anniversary

Neil Barofsky, former Special Investigator General of TARP, is highly critical of the program on its third anniversary of TAR:

"While successful in helping to prevent financial Armageddon, on TARP's third birthday it is apparent that Treasury has failed to deliver on the other core promises that it made to Congress and the American people - that TARP would 'restore lending' and 'preserve homeownership.' Perhaps even more concerning, the inevitable moral hazard that followed Secretary Paulson and Secretary Geithner's repeated use of TARP funds to back up their pronouncements that they would not let the largest banks fail has not been adequately addressed by regulatory reform. ...

"As a result, the TBTF banks are even larger and more dangerous than ever, and could still hold the taxpayer hostage once again in the next financial crisis. Finally, TARP's most enduring legacy may be the HISTORICAL DISDAIN with which the American people now hold their government, which I believe has been fueled by Treasury administrating TARP with insufficient transparency and with undue deference to the largest financial institutions."

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McCain: 'Hard to React' to GOP Audience Booing
Gay Soldier

Click here to view this media

Sen. John McCain (R-AZ) says that Republican candidates should have rebuked members of the audience that booed a gay service member during Fox News' September presidential debate but it is sometimes "hard to react" while on stage.

"The fact is that we should honor every man and woman who is serving in the military and in no way should treat them with anything but the highest regard," McCain, who opposed the repeal of the military's gay ban, told CBS' Bob Schieffer Sunday.

"Do you think that the Republican candidate should have spoken up at that debate about that?" Schieffer asked.

"Yeah, I do," McCain replied. "But a lot of times when you are in a debate, you're thinking about what you're going to say and what the question is going to be. It's hard to react sometimes, but I'm sure that -- I would bet that every Republican on that stage did not agree with that kind of behavior."

The Arizona senator added that President Barack Obama had a point during his speech to the Human Rights Campaign Saturday.

"You want to be commander in chief?" Obama had declared. "You can start by standing up for the men and women who wear the uniform of the United States even when it's not political convenient."

Audiences at recent Republican presidential debates have also called for letting an uninsured man die and have cheered Texas' record of 234 executions under Gov. Rick Perry (R).

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