Health-Care Battle Helps GOP Climb Out of Morass, but Challenges Are Plentiful

By Perry Bacon Jr.
Washington Post Staff Writer
Sunday, August 23, 2009

When Sen. Arlen Specter (Pa.) left the Republican Party in April to become a Democrat, the situation for the Grand Old Party was so dismal that even one of Washington's most vocal Republican bashers, House Speaker Nancy Pelosi (D-Calif.), declared that "our country needs a strong, diverse Republican Party."

But after looking as if they would drift into irrelevance, Republicans are showing signs of being energized. The party's grass-roots activists, at times moribund during last year's presidential campaign, have mobilized against President Obama's agenda, vastly outnumbering Democrats at some of this month's health-care town hall meetings.

After badly trailing the campaign of then-Sen. Barack Obama in raising money last year, the Republican National Committee has raised more than the Democratic National Committee this year, figures released last week show. Ahead of next year's elections, several potentially strong GOP candidates, including popular Florida Gov. Charlie Crist, have decided to run for seats in the Senate. In this year's gubernatorial races, polls show the GOP candidates ahead in both New Jersey and Virginia.

What has emerged in the last few months is a more confident GOP. Republicans, who earlier this year thought they could not block a Democratic health-care reform bill and should focus on simply stopping one of its more liberal components -- a government-run insurance option -- have set their sights on forcing the president to dramatically scale back his proposal.

Still, even leading Republicans offer their positive views with caveats, a recognition that the party badly lost the last two elections and this year found two of its potential 2012 presidential hopefuls, Sen. John Ensign (Nev.) and Gov. Mark Sanford (S.C.), embroiled in sex scandals.

"Republicans are digging out of a pretty big hole and we're not yet back to parity, but it's headed in the right direction," said Minnesota Gov. Tim Pawlenty, a leading figure in the party who is considering a 2012 presidential run. "The mood of the grass roots has gone from one of discouragement and confusion in some cases after the last election cycle to one of concern about the direction of Obama to one of hope and optimism for a Republican comeback."

In an interview, RNC Chairman Michael S. Steele said, "We have a lot more to do," but added that "we've stopped the hemorrhaging away from the party where our activists and candidates were saying, 'I don't know if I want to play.' "

Democrats are dismissive of any GOP gains.

"The president remains strong [in public approval] and people have more confidence in congressional Democrats" than Republicans, said Rep. Chris Van Hollen (Md.), chairman of the Democratic Congressional Campaign Committee. "People have more questions about the health-care plan, but that has not translated into support for the Republicans."

Democrats cast the GOP as simply eager to block things.

"I think early on a decision was made by the Republican leadership that said, 'Look, let's not give him a victory. Maybe we can have a replay of 1993-94 when Clinton came in, he failed on health care and then we won in the midterm elections and we got the majority,' " Obama said on Thursday. "And I think there are some folks that are taking a page out of that playbook."

Strategists in both parties caution that increasing anxiety about Obama's agenda has not translated into enthusiasm for Republicans. A Washington Post-ABC News poll released last week found only 49 percent of Americans express confidence that Obama will make the right decisions for the country, down from 60 percent at the 100-day mark of his presidency. But only 21 percent think congressional Republicans will make the right decisions, a number that has dropped eight points since January.

At town hall meetings in states such as Iowa, opposition to Obama animates the Republicans who are turning out far more than any demonstrative enthusiasm on display for their own party, a dynamic that GOP officials concede. The Republican "brand," said RNC communications director Trevor Francis, remains severely damaged.

Steele acknowledged that the party's national leaders, including himself, aren't popular with voters, though he said Republicans running for office out in the states have been embraced.

"Some people may not like the messengers, but they like the message we're putting out there," he said.

Other challenges also remain. Steele said the party must do more to expand its base to black and Latino voters to win elections. In addition, a moderate-vs.-conservative split remains unresolved in the party.

Crist is facing a primary challenge from Marco Rubio, a young Florida conservative who has attacked him for supporting the economic stimulus plan Obama championed. In Iowa, conservative activists have threatened to campaign against Sen. Charles E. Grassley (Iowa) -- a reliable party-line vote -- if he backs a bipartisan health-care bill. If the more conservative candidate wins either state's GOP primary, he might struggle in the general election against a Democrat.

Party strategists say Republicans still haven't clearly defined their positive agenda, even as they rail against Democratic proposals. David Frum, a White House speechwriter in the administration of George W. Bush, criticized Republicans for essentially defending the "status quo" on health care. He said the GOP strategy of attacking Obama for seeking to reduce the costs of Medicare puts the party in the position of defending a big and growing national program that it should be trying to reform.

"Obama is helping them [Republicans]," said Ron Bonjean, an adviser to then-House Speaker J. Dennis Hastert (R-Ill.). "But by next year, it would be good to have an agenda of our own."

A few Republicans are declaring next year's elections will be like those in 1994, when a completely out-of-power GOP won back control of the House and Senate.

"I think the party has its greatest opportunity in the last 40 years," said Jim Greer, chairman of the Florida Republican Party.

Other Republicans are more cautious.

"We're still a long way away from the elections," said Rep. Eric Cantor (Va.), the No. 2 House Republican. "I don't necessarily think that when you look at the governor's races in our state and others, it's a Republican wave or a Democrat wave. . . . It was a historic election, and the public was wrapped up in this notion of change, but now I think what people are beginning to see is that all change is not good change."

Polling analyst Jennifer Agiesta contributed to this report.

Grass-Roots Reform Battle Tests Weary Obama Supporters

His Supporters Play Catch-Up on Reform

By Eli Saslow
Washington Post Staff Writer
Sunday, August 23, 2009

RACINE, Wis. -- The last three years had unfolded in an unrelenting series of what Jeremy Bird called Big Moments, and here began the latest on a sweltering afternoon earlier this month. Another rental car, another unfamiliar highway, another string of e-mails sent from his BlackBerry while driving 70 mph. Bird took a sip from his coffee and looked over at Dan Grandone, a co-worker riding in the passenger seat.

"I don't know about you, but I'm running on adrenaline right now," Bird said. "I love this feeling that we're on the verge of something crucial."

Bird had lived at that precipice ever since joining Barack Obama's campaign as a top organizer in 2007, but rarely had he faced a challenge so daunting as the one awaiting in Racine. As deputy director of Organizing for America, a national network of Obama supporters, Bird was scheduled to speak with a group of volunteers who had been threatened at town halls, outshouted at local rallies and weakened by a general sense of post-campaign fatigue. With one 90-minute visit, Bird hoped to leave them confident, empowered and reenergized.

"We want these people to feel like they can control almost anything that happens in government," said Bird, who had traveled from his office at Democratic National Committee headquarters in Washington to spend two days visiting volunteers across Wisconsin. "They should feel like there's no barrier between the regular people out in the states and the power players in D.C."

The outcome of the health-care debate weighed partially on Bird's success, and on the effectiveness of Organizing for America (OFA) in general. When Bird was named deputy director of OFA last year, he became the vanguard of much more than 13 million e-mail addresses collected from supporters during Obama's campaign. He became one of the people most responsible for validating Obama's campaign ethos: that grass-roots support can power government and shape legislation.

It is a theory that now faces a defining test. Conservatives have waged an angry and effective battle against Obama's health-care legislation, and OFA has responded by asking its volunteers to visit congressional offices and flood town hall meetings in a massive show of support. This month, Obama sent an e-mail to OFA members: "This is the moment our movement was built for," he wrote.

When Bird arrived at a Racine coffee shop called Cup of Hope and sat down with 10 OFA volunteers, he spoke with similar urgency.

"We need to flex our muscles on this, and we need to act fast," he said. "We always said in the campaign that this was not just about one election but about a chance to make some major changes. Well, here's the chance."

Bird had a lifetime of experience thriving against long odds, and he relished the role. The son of conservative Baptists, Bird grew up in a Missouri trailer park before attending Harvard Divinity School. He organized underfunded schools in Boston, worked for Howard Dean's presidential campaign in 2004 and started a company that lobbied Wal-Mart -- his mother's former employer -- to improve its benefits and wages. On behalf of Obama, he had moved to five states, helping the candidate overcome racism in South Carolina and Islamophobia in Pennsylvania and Ohio.

When Bird arrived in Wisconsin last week, he recognized all the familiar hallmarks of an underdog fight. Gone were the 44 field offices across the state where Obama organizers had worked during the campaign; now Bird spent his visit searching for power outlets in Wisconsin coffee shops and conducting conference calls at sidewalk cafes. Gone were the 100 paid staffers who orchestrated an Obama victory in the state; now OFA employed one person in Wisconsin, Grandone, who hoped to hire two or three assistants if the budget allowed.

"Right now," Grandone said, "we are kind of building this thing as we fly it."

Around the table in Racine, Bird listened as the volunteers rattled off evidence of OFA's growing pains. Local membership was relatively stagnant because Racine residents were exhausted after volunteering during the long presidential campaign. Newspapers had focused their coverage of health-care town halls on the most vocal conservatives, even when the crowd contained more Democrats. One OFA member said he was now the target of repeated threats. "I've had a guy say to me, 'Why should I be afraid of a liberal when I have a .357?' " said Ryan Gleason, 32.

"It's starting to feel like we're always on the defensive," Gleason said.

Bird responded by citing data aimed at demonstrating OFA's impact. Since the organization sent an e-mail to its members asking for help on health care in May, more than 1.3 million have visited a phone bank, shared their personal health-care stories on the Internet or attended one of 12,000 local rallies. More than 150,000 people have given an average of $38 to OFA's health-care campaign. This month, Obama spent an hour providing OFA members with "bullet points" for the debate during an Internet video.

"Usually, when a campaign ends, everybody is exhausted and people just go their separate ways," Bird told the volunteers assembled in Racine. "But we knew from the beginning that this could be different."

Bird and other top Obama operatives had decided as much during the first days after the election, when they began conceptualizing OFA at a conference held in Chicago. They polled thousands of Obama volunteers through a sequence of surveys and conference calls and sought advice from David Plouffe, the architect of Obama's campaign. By the time of Obama's inauguration, Bird and OFA Director Mitch Stewart had settled on a basic vision: OFA would get by with limited staff by relying on volunteers who would work as many as 30 hours a week to ensure grass-roots activity in each U.S. voting precinct.

Bird and others decided that OFA would succeed almost entirely based on the enthusiasm of its volunteers. In that spirit, he asked each person at the coffee shop in Racine to share a "how-Obama-inspired-me story." There was the mother of two young children who now works as a lead community organizer for OFA, taking her children with her from one event to the next. There was a registered independent voter who had volunteered for Obama only once, on election night. There was Racine's newly elected mayor, John Dickert, who had been inspired to run for office after volunteering for Obama.

These were now the key operatives in OFA's health-care campaign. Bird's visit coincided with the launch of two OFA initiatives. The group's Web site offered artificial appointment times for volunteers to visit their congressional offices, prompting 15 or 20 OFA volunteers to pile into waiting rooms across the country. Bird also asked the supporters in Racine to attend as many congressional town hall meetings as possible in an attempt to drown out the vocal and disruptive opposition.

"Remember to stay classy, like we did during the campaign," Bird said. "We want an educated debate. We are not going to outshout them."

"Do you really think these things will have a big impact?" volunteer Glenda Alexander asked. "I guess it can't hurt to try, but the chances that this debate will be determined by one person showing up at a congressman's office -- and not even seeing the congressman -- seem pretty tiny. It's like buying a lottery ticket."

"It might seem small when it's just you, but it's big when you add up everybody who is going," Bird said.

"But right now, we're getting outshouted," Gleason said.

"We can't let that stop us," Bird said.

"We are battling these false messages every day now," Gleason continued. "It is getting to the point where some people are so angry that our safety is becoming a concern."

"We can't let that stop us either," Bird repeated. "Look, it's nasty because we are on the brink of a change and people are getting scared. If you stick with this, I'll promise you: We will get health care passed this year."

Some of the volunteers stood up and began to applaud. For a moment, at least, Bird had restored their optimism. He thanked the group, picked up his notebook and walked out. There were more volunteers to meet 45 minutes down the road at a restaurant in Milwaukee, another big moment.

"That went well," Bird said to Grandone as they climbed into the rental car. "Now we just have to do the same thing again, and again."

Ransom Demand Puts Undocumented Residents in a Quandary

For undocumented residents, a call demanding ransom for a kidnapped loved one can lead to an equally fear-inducing call to federal immigration authorities.

By Josh White and Dagny Salas
Washington Post Staff Writers
Sunday, August 23, 2009

Ulises Martinez received the first call on a cold January morning, a stern voice shocking him through his cellphone. His in-laws had been taken hostage after a grueling border crossing from the Mexican desert into Arizona. Martinez would have to pay $3,000 to secure their release.

"I am not responsible for what will happen to them if you do not pay the money," the voice said. He would dismember the in-laws and dump them in the desert if Martinez didn't pay up. It was $3,000 Martinez, a 40-year-old Alexandria mechanic with a wife and toddler, didn't have and couldn't get.

As demands quickly increased to $5,400, Martinez's in-laws cowered in their underwear in a dark, squalid room in Phoenix and were told that their fingers would be cut off and their organs harvested if the cartel's demands weren't met.

Desperate and confused, Martinez, himself an undocumented immigrant, called U.S. Immigration and Customs Enforcement in the Washington area, touching off an intense federal investigation. It was one of dozens of such search-and-rescue missions spurred by similar menacing calls over the past year, and one of two cases in Northern Virginia in recent months.

As U.S. control of the border has strengthened since the Sept. 11, 2001, terrorist attacks, it has become harder for people to cross illegally. That has spawned a boom in hostage-taking as smuggling cartels have realized that they can extort money from illegal immigrants' families in the United States, many of whom wire the ransom instead of risking their own deportation by contacting police.

Although the cartels hold captives in the southwest border states, the crimes have reached into the Washington region, where established immigrant communities include undocumented people who left their families behind in Central America. The kidnappers prey on working-class, Spanish-speaking immigrants because they are especially vulnerable: They would do almost anything to free their loved ones, and they are sometimes equally fearful of U.S. authorities.

Two recent cases, involving victims who received extortion calls in Alexandria and Prince William County, highlight how reporting such crimes can lead to daring rescues. ICE officials and local police hope the cases encourage others receiving extortion calls to come forward, both to save lives and to help them make inroads into the sprawling criminal organizations.

"Nobody deserves to be held against their will, regardless of their immigration status," said James Dinkins, special agent in charge of ICE investigations in the District and Virginia. "Nobody deserves to be abused or tortured or to have their life threatened. . . . The hostage takers must think the loved ones aren't going to call the cops."

The extortion demands -- which also have been reported in places including Washington state, California, Illinois and Florida -- have led ICE agents to work with victims to record and trace the calls. Officials estimate that more than 1,000 captives have been rescued in raids after victims such as Martinez come forward. But ICE officials say countless other kidnappings have gone unreported as victims quietly pay millions of dollars in ransom.

'They Sold Us Like Chickens'

Hostage rescues have become almost a weekly occurrence on the southern U.S. border, according to ICE officials and police. ICE agents have been discovering an increasing number of "drop houses" in Arizona and Texas linked to complex human smuggling operations that they say are similar to violent Mexican drug and weapons cartels.

"Human smugglers think nothing of engaging in hostage taking and extortion to generate more profit for their illegal activities," said John Morton, Homeland Security assistant secretary for ICE.

Even Martinez, as desperate as he was, never intended to call ICE. He called an immigration advocacy group, which passed along a phone number that turned out to be ICE. Ultimately, he realized it might be the only way to save his wife's parents, whom he had heard crying and begging in one of numerous tense cellphone conversations with their armed captors.

ICE agents working at their Prosperity Avenue offices in Fairfax County were able to trace the calls to a house in west Phoenix within hours of Martinez's coming forward Jan. 9. Local and federal authorities raided the house 2,400 miles away 34 hours later, freeing 21 immigrant hostages -- including Martinez's in-laws. They were sent back to El Salvador.

"It's better to be deported alive than to be dead and dropped in the desert," Martinez said in Spanish in a recent interview, sitting with his wife, Teresa, and son, Alexis. "If I didn't call, maybe they would have killed them, and it would have been my fault."

As Martinez was receiving the extortion calls in January, his in-laws, Walter Flores, 42, and Sonia Maribel Valdez-Navas, 47, were squatting in the corner of a crowded and stinking bedroom at 8821 W. Palm Lane in Phoenix. The windows were covered with plywood, the hostages were stripped of their clothes, shoes and belts, and talk of escape was wistful and unrealistic. A guard flashed a 9mm handgun.

"They said terrible things," Valdez-Navas said in Spanish from El Salvador. "I worried a lot. I cried a lot. I didn't eat. They said if they didn't get the money, they would take out our organs and sell them. I cried a lot."

Valdez-Navas and her husband had made their way to the United States via Mexico on a journey to the Washington area to meet their grandson. They earned enough money in Mexicali to pay for what they expected would be a $1,500 trip. After walking in the desert for three days and crossing into Arizona near the dusty town of Sasabe, they were rushed to a U.S. highway and shoved in the back of a vehicle before arriving at the Phoenix house.

"They sold us like chickens," she said. She and her husband were in a room with about 10 other hostages, occasionally eating soup and sleeping on a dingy gray carpet.

Officials said hostages are treated like any other illicit commodity. Some are sold or bartered between groups, even stolen by rivals in carjackings and raids, according to federal court records. Martinez said he spoke to multiple callers demanding money and said he would have paid if he could have.

Court records and interviews show the terror extending across the country after the captors demand phone numbers of relatives. Often, the calls include hostages pleading for help or being tortured.

"We've had everything from people taking a brick and smashing the hostages' hands to tying them up with barbed wire to using a car battery to administer electrical shocks to get the relatives to bring the money," said Phoenix Police Chief Jack Harris. "And the conditions in these houses are absolutely atrocious. People are dehydrated, they're tied up, they're beaten."

Matthew Allen, special agent in charge of ICE investigations in Phoenix, said his office gets 40 to 50 referrals a year for such cases. Some of the houses he's raided have as many as 100 hostages crammed inside.

"We get these calls from all over the country," Allen said. "We see this as something we need to deal with urgently. There are victims out there that we need to find."

Allen's office worked on 40 hostage cases in fiscal 2008 alone, rescuing 584 people from their captors in Arizona, according to ICE data. From October 2006 through June, ICE handled 6,157 human smuggling cases resulting in 3,596 criminal convictions and seizures of more than $34 million. ICE does not compile national data on hostage cases.

Although ICE officials recognize that everyone involved -- the immigrants and the kidnappers -- have broken the law, they say they want to save lives first and sort out immigration status second. Allen said the victims are part of the criminal conspiracy, "but at the same time, most of them didn't sign up for what ended up happening."

"The victims are universally grateful," Allen said, adding that most are removed from the country but some remain to testify in court or assist investigations.

In Martinez's case, authorities arrested six men in a nighttime raid on the house in west Phoenix, recovering a Browning 9mm handgun and ledgers cataloguing smuggling activity. Six were convicted in U.S. District Court in Arizona and are serving sentences ranging from 24 to 46 months.

'I Risked So Much'

ICE agents and local police have been working to break into the organizations that smuggle and take hostages, expecting to peel back layers of management that mirror a drug organization. The hostages -- also known as "pollos," Spanish for chickens -- are guarded by armed men at the lowest level of vast organizations that authorities say rely on smugglers ("coyotes"), muscle, drivers, financiers and others to carry out extortion schemes.

Francisco Javier Quinones-Soriano, a slight man who himself was smuggled into the United States from Mexico, was one of the guards at the house and was sentenced to 30 months in prison in June. But his attorney said Quinones-Soriano was a prisoner of the smuggling system, someone who didn't have contacts in the United States and couldn't pay off his debt to the cartel. Out of options, he became a guard who did not relish his role.

Jim Park, a Phoenix attorney who represented Quinones-Soriano, likened smuggling operations to drug cartels, with organizers supervising recruiters, guards, money collectors, those who arrange drop houses and those who make the extortion calls.

"You have a 'pollo' who started out as a victim and they become the guards, and they work as a guard or a cook and they work their debt off. You rarely, if ever, find the guy who organized it all at these houses," Park said. "I think [the authorities] are going after the guys they can find. They're putting out fires left and right. I think they're trying to go up, but it's very difficult. There is a lot of protection for the higher-ups because they are insulated. People don't want to talk. They'll do their time because they don't want to face the repercussions."

Dinkins, the top ICE official in the Washington field office, said the agency is following organizations that smuggle drugs, money, weapons and people, groups that want to get "the biggest bang for the least risk." Allen said ICE is working to get deep into the cartels: "Our job is to get beyond these people to the organizers."

ICE is using ongoing hostage cases to make those inroads. One such case arose out of Prince William County in April.

Just as Juana, 22, of Manassas, was expecting her brother to be crossing into the United States, her cellphone rang. Violent smugglers had Felix, and they wanted $800 in cash to set him free.

So Juana scraped $800 together and wired the money to Texas. Then more urgent calls came, demanding $5,000 more in cash. If she didn't comply, they said, they were going to chop her 18-year-old brother into pieces and send them to her, one by one, in the mail.

At one point, a woman warned Juana: "You're starting trouble with the wrong people."

Unable to pay, Juana, an undocumented immigrant, called Prince William police. Within 48 hours, authorities tracked the kidnappers to a house near McAllen, Tex., and freed 17 hostages who had been bound, gagged and beaten.

"If I had the $5,000, I probably would have sent it to them," Juana said in Spanish through an interpreter. She spoke on the condition that her last name not be used because she is considered a witness to the violent crime. "I didn't know what to do, so I called the police."

Prince William's policy of turning illegal immigrants over to ICE has caused police officials to worry of a chilling effect, causing immigrants who are victimized to choose not to report crimes.

"I'm very pleased she called, and I'm sure she was desperate because of her brother's situation," said Prince William Police Chief Charlie T. Deane. "Our policy is that we're committed to protecting crime victims regardless of their immigration status. Time was of the essence, and our urgent response was critical. This case had grave potential."

Officers Donald Hoffman and Juan Sanchez Jr. responded to Juana's initial call. Armed with the phone numbers Juana had jotted down, Sanchez linked them to south Texas and set up a call with the kidnappers in which Juana agreed to make the payment.

"We believed that by 5 p.m. that day they were going to kill him," Sanchez said. Hoffman added: "While we were hopeful we could help Felix, we had no idea how many people were at risk."

Working with ICE officials in Texas and Washington, police pinpointed the Texas drop house within hours. Felix, who was sent back to El Salvador, told his sister that he was bound and gagged for three weeks, he barely ate, was made to sleep standing up and was beaten with fishing rods.

"He was very grateful when he was rescued," Juana said. "They sent him home, but he's thankful to God that he's alive."

Valdez-Navas, who endured days of captivity in Phoenix and was removed to El Salvador after speaking with authorities, said she continues to have nightmares.

"I wanted to know my grandson," Valdez-Navas said, crying. "I was sad I wouldn't get to realize my dream. I risked so much. I almost died."

Juana, whose brother also survived because of her phone call to authorities, said he has no desire to try to come back into the United States because "he's scared now even to think about it."

In the days after her brother was rescued, Juana received calls from the cartel, some bluffing that they still had her brother and wanted payment. At one point, cartel members asked to meet Juana at a fast-food restaurant in Manassas -- near her home -- to exchange cash. It was another bluff, but one that led police to fear for Juana's safety.

Juana and Martinez continue to live in the Washington area, and they say they are not in ICE removal proceedings. ICE tends to pursue illegal immigrants with criminal problems but would not comment on their individual circumstances.

Police and ICE officials want people like Juana and Martinez to call, because lives are on the line. They also urge people wishing to come to the United States to follow the rules and not put their lives in the hands of violent cartels.

"We want to make sure that [people] who have made a decision to be smuggled into the U.S. understand that they are putting their lives at risk, perhaps more so than ever," Allen said.

Staff researcher Meg Smith contributed to this report.

Mali protest against women's law

Tens of thousands of people in Mali's capital, Bamako, have been protesting against a new law which gives women equal rights in marriage.

The law, passed earlier this month, also strengthens inheritance rights for women and children born out of wedlock.

The head of a Muslim women's association says only a minority of Malian women - "the intellectuals" as she put it - supports the law.

Several other protests have taken place in other parts of the country.

The law was adopted by the Malian parliament at the beginning of August, and has yet to be signed into force by the president.

One of the most contentious issues in the new legislation is that women are no longer required to obey their husbands.

Hadja Sapiato Dembele of the National Union of Muslim Women's Associations said the law goes against Islamic principles.

"We have to stick to the Koran," Ms Dembele told the BBC's Focus on Africa programme. "A man must protect his wife, a wife must obey her husband."

"It's a tiny minority of women here that wants this new law - the intellectuals. The poor and illiterate women of this country - the real Muslims - are against it," she added.

US names secret terror suspects

The US military has begun notifying the Red Cross of the identities of terror suspects being held at secret camps in Iraq and Afghanistan, reports say.

The Red Cross, which has lobbied the Pentagon for years to give its staff access to all detention facilities, declined to confirm the changes.

The policy reportedly took effect this month with no public announcement.

Correspondents say that the move represents a victory for human rights groups seeking more US transparency.

The new approach is said to be part of a broad review of US detention and interrogation practice launched by the Obama administration.

Further scrutiny

Dozens of suspected foreign fighters captured in Iraq and Afghanistan are being held at so-called "temporary screening camps" run by US special forces at secret locations in Balad in Iraq and Bagram in Afghanistan.

Despite the change in policy, Red Cross officials are still not getting access to the highly secretive sites - something they do get at most other US military detention centres.

The Pentagon has previously said that providing information about these detainees could jeopardize counter-terrorism efforts.

It has refused to comment on the latest reports.

A spokeswoman for the Red Cross in Geneva told the BBC she could not comment on the reported changes, saying discussions about detention issues are always confidential.

This week, the detention policies of the former Bush administration are likely to come under further scrutiny with the publication of a CIA report dating from 2004 into its interrogation practices at that time.

It describes the physical and psychological abuse of detainees inside US-run facilities, including mock execution and, in one case, threatening a prisoner with a gun and a power drill.

Doubts cast on Taliban leadership

Pakistani intelligence officials have cast doubt on the claimed selection of a new leader to the country's Taliban.

The movement's deputy leader, Maulvi Faqir Mohammed, earlier told the BBC that a Taliban council had chosen Hakimullah Mehsud to lead it.

Pakistani intelligence officials have said the claim is a ruse to disguise factional fighting within the Taliban.

Pakistani and US officials believe the previous leader, Baitullah Mehsud, was killed in a US drone strike.

However the Taliban continue to insist that he is still alive, despite the announcement of a new leader being appointed.

Differing claims

Hakimullah Mehsud, who is in his late 20s, is a military chief of the Tehrik-e-Taliban Pakistan (TTP) organisation formed by Beitullah Mehsud in an effort to unite the various factions under one umbrella.

He controls an estimated 2,000 fighters in the Orakzai, Kurram and Khyber regions.

However, Pakistani intelligence officials have said Hakimullah Mehsud is also dead, killed in a shootout with rivals days after Beitullah Mehsud was apparently killed on 5 August.

Pakistani officials told news agencies that Maulvi Faqir Mohammed's announcement was a trick to cover up an ongoing power struggle among the movement.

"The announcement is real, but the man isn't," Reuters quoted one senior intelligence officer in north-west Pakistan. "The real Hakimullah is dead."

But on Saturday Mr Mohammed told BBC Urdu: "Baitullah Mehsud has been in hiding and he is very ill. He expressed his will that the next Taliban chief should be elected by the Taliban Council while he is alive."

"The council held its meeting in the Orakzai tribal area... the council has decided that Hakimullah Mehsud will be the leader of the Tehrik-e-Taliban Pakistan," Mr Mohammed said.

But the BBC's Orla Guerin in Islamabad says many will see the naming of a new leader as confirmation that Baitullah Mehsud is dead.

Our correspondent says Hakimullah Mehsud is a young commander in Baitullah's own image and is reported to be equally ruthless.

Some believe he could be an even bigger threat to Pakistan, and to foreign troops across the border in Afghanistan, she adds.

America's Muslims Celebrate Holy Month of Ramadan

By Mohamed Elshinnawi Washington 22 August 2009

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As the Muslim holy month of Ramadan begins on August 22, Muslim Americans are observing it in many ways.

American Muslims celebrate Ramadan

American Muslims of diverse national backgrounds are coming together to worship. They will break their dawn-to-dusk fast -for a whole month - in Islamic centers and in their homes across the country.

Imam Abdulla Khouj is president of the Islamic Center in Washington, DC.

"People from all over the world gather in one place and all do feel one people regardless of the distances and regardless of the geographical areas," he said.

Regardless of national origin, Ramadan is observed with rituals that bridge those differences.

Families shop for foods that have been prepared especially for Ramadan. They prepare Iftar meals that break the daily fast and they pray together.

Nadia Rachid immigrated to the US from Morocco. She misses the big Ramadan gatherings in her home country.

"There is a big difference. Here you do not have extended family, and so instead of having 10 people around the table, there is only the two of us," she said.

Her husband, Mohamed Ibrahim, says it's easy to observe Ramadan in America even though most people around him are not fasting.

"Because it is my duty to fast it does not matter what everybody else is doing," he explained.

With an estimated seven million American Muslims, Islamic centers and mosques are thriving.

Imam Hassan Qazwini directs the Islamic Center of America in Dearborn, Michigan. He says the center has a special program during Ramadan that focuses on the Holy Koran. Muslims believe God revealed it to the Prophet Muhammed in the 7th century AD.

"Every night, after the nightly prayers, the Islamic Center will hold a special session that consists of recitation of the Holy Koran, the interpretation of the Koran, as well as some other lectures," he said.

He says the center also takes advantage of Ramadan to teach non-Muslim Americans about the Islamic faith.

"I have invited Christian and Jewish leaders for the Iftar to share the peaceful and serene atmosphere of the month of Ramadan with us," he added.

During Ramadan, Muslim Americans hold open houses at mosques and Islamic centers. And they organize interfaith Iftars.

Amina Tambouch is an American Muslim from Senegal. She says Muslims here adapt their busy schedules to make room for Ramadan.

"Everyone will cook some food and brings it and we all will eat together, pray together and we talk about the Muslim religion, and we teach each other," she said. "And at work we go to pray together around lunchtime."

American Muslims have to adjust observing Ramadan to the beat of American life. However Ramadan gives American Muslims from different backgrounds a sense of unity as an integral part of the American society.

Nigeria's Delayed Electoral Reforms Sparks Concerns Over 2011 Elections

By Gilbert da Costa Abuja 22 August 2009

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Nigeria holds its next round of general elections in 2011 in what many see as a crucial test of the country's fledgling democracy. Without key electoral reforms, many Nigerians fear vote rigging and intimidation could derail the process.

The run-up to the 2011 elections has reignited concerns about a free, fair and credible vote in Africa's most populous nation. Nigerian elections in 2007 were marred by widespread vote rigging and intimidation and foreign and domestic observers said they were "not credible."

Even President Umaru Yar'Adua admitted "lapses and shortcomings" in the vote which brought him to power and promised to fix the flawed electoral system. But critics believe Mr. Yar'Adua has moved too slowly on reforms and that key changes are not expected before the 2011 elections.

Opposition parties are against the president appointing the head of the electoral commission. A 22-member electoral reform panel appointed by President Yar'Adua had recommended that the head of the electoral body should be appointed by the National Judicial Commission "to truly make it an independent body." The government however, rejected the recommendation.

The much-criticized electoral commission chairman Maurice Iwu blames a desperate political class motivated largely by a desire to enjoy the profits of office for Nigeria's electoral problems. He told a parliamentary committee that a crackdown on electoral offenders could be an important step in the conduct of free and fair elections in Nigeria.

"We need to look at creative ways of stopping such rot," said Iwu. "It is easy to say create a commission. Does it mean anywhere we have a failing we create a commission? We have to look at what are the problems? What do we want to achieve? We need to punish people who commit electoral offences."

Political commentators say peaceful, free and fair elections in 2011 are essential in stabilizing a country in danger of sliding into anarchy.

Nigerian opposition parties have vowed to resist any attempt to rig the vote, setting the stage for a hotly contested ballot.

More than 15,000 people have died in a series of violent clashes since the return to civil democracy in 1999.

North and South Korea hold talks

The first meeting between North and South Korean officials in nearly two years has taken place unexpectedly in the South Korean capital Seoul.

A spy chief said to be close to the North's leader Kim Jong-il met Seoul's Unification Minister Hyun In-taek.

Later, a South Korean government official announced the envoys would meet President Lee Myung-bak on Sunday.

The delegates from the North have said they want better relations on the Korean peninsula.

They are in Seoul to pay respects to late ex-President Kim Dae-jung.

The Northern official in charge of inter-Korean relations, Kim Yang-gon, said there was an urgent need to improve the frosty relations between the two countries.

"After meeting with several people [in the South], I felt the imperative need for North-South relations to improve," Mr Kim said ahead of his talks with Mr Hyun.

Conciliatory gestures

Saturday's meeting is the first between officials from the two Koreas since the conservative Mr Lee came to power in Seoul in February 2008.

Relations soured when Mr Lee made South Korean aid conditional on North Korea's nuclear disarmament.

In the past few months, North Korea has fired a long range rocket over Japanese territory and conducted an underground nuclear test.

But more recently, there has been a series of conciliatory gestures. Two US reporters and a South Korean worker were released from detention and Pyongyang said it was interested in resuming cross-border tourism and industrial projects.

Some observers believe that, with UN sanctions beginning to bite, the North is keen to boost cross-border tourism and trade that bring in badly needed foreign currency, our correspondent adds.

On Friday, the six officials from North Korea's ruling Workers' Party, wearing black suits and ties, placed a wreath of flowers on the steps of South Korea's National Assembly, where Kim Dae-jung is lying in state.

Mr Kim - who died on Tuesday at the age of 85 - devoted his presidency to improving relations between the two Koreas, still technically at war.

He reached out to the North with aid - the main thrust of his "Sunshine Policy" that earned him the Nobel Peace Prize in 2000, and held a historic summit with Kim Jong-Il in that year.

Mr Kim's funeral is to be held on Sunday.

Gaddafi seen meeting bomber on TV

Libyan leader Colonel Gaddafi has defied strong criticism from the UK and the US by meeting Lockerbie bomber Abdelbaset Ali al-Megrahi on Libyan TV.

The Scottish Government freed the terminally-ill 57-year-old on compassionate grounds on Thursday.

Col Gaddafi said he hoped the move would improve relations between Libya and Britain, state media reported.

But the UK Foreign Office has strongly denied claims Megrahi was released to ensure trade deals with Libya.

Col Gaddafi's son, Seif al-Islam, told Libyan TV Megrahi's case was raised during talks over oil and gas.

'Humane decision'

His father also praised the "courageous" Scottish Government during his meeting with Megrahi.

He said: "I praise their courage for having proved their independence in decision making, despite the unacceptable and and illogical pressures that opposed them," state media reported.

"But they took this sound, courageous and humane decision."

Col Gaddafi also praised Gordon Brown, the Queen and Prince Andrew for "encouraging" the Scottish Government.

Meanwhile, Megrahi told the Times newspaper he intended to present new evidence proving his innocence.

“ No deal has been made between the UK government and the Libyan government in relation to Megrahi and any commercial interests ”
UK Foreign Office

The man convicted of killing 270 people aboard a transatlantic airliner in 1988 said he would present the evidence through lawyers in Scotland and ask the British and Scottish communities to "be the jury".

He said he was "very, very happy" to be free.

"This was my hope and wish - to be back with my family before I pass away. I always believed I would come back if justice prevailed."

Colonel Gaddafi's son had labelled Megrahi's release a "victory".

In an interview with a Libyan station, Mr Islam reportedly claimed that the Megrahi issue had been raised repeatedly by Britain's former prime minister Tony Blair.

"In all commercial contracts, for oil and gas with Britain, (Megrahi) was always on the negotiating table," Mr Islam said told Libya's Al Mutawassit channel.

Government 'slur'

Mr Blair visited Libya in May 2007, during which UK energy giant BP signed a $900m (£540m) exploration deal.

However, the Foreign Office insisted Megrahi's release had been a matter solely for the Scottish authorities.

“ I never for a minute thought that it was just a question of compassionate release and the humanity and compassion of the Scots ”
Rosemary Wolfe Stepmother of bombing victim

A spokesman said: "No deal has been made between the UK government and the Libyan government in relation to Megrahi and any commercial interests in the country."

UK Foreign Secretary David Miliband earlier rejected suggestions the UK pushed for Megrahi's release to improve relations as "a slur on both myself and the government".

But Rosemary Wolfe, whose stepdaughter died in the bombing, said she was not surprised by claims that the release was part of a trade deal with Britain.

She told the BBC: "I never for a minute thought that it was just a question of compassionate release and the humanity and compassion of the Scots.

"What surprises me is that Gaddafi's son would have come out with this kind of a statement."

A former British ambassador to Libya, Sir Richard Dalton, said the UK government faced scrutiny over the circumstances surrounding Megrahi's release.

"There are a number of outstanding questions and silence I don't think is serving the British interest well," he said. "In my view it was not naivety, nor was it opportunism."

"There are honourable answers to the questions being posed and it is time, I think, for the British government to be more forthcoming in support of what the Scots have done."

Prince Andrew

Separately, the Foreign Office was unable to confirm whether a planned trip to Libya by the Duke of York in September would be cancelled.

A spokeswoman said an official invitation to the British government from Libya had not yet been received.

However, it is believed any visit by a member of the Royal Family is unlikely to go ahead in light of the furore surrounding Megrahi's return.

This won't have any long term affect on relations with the US, but the decision shows a lack of empathy for the families of the murdered, and it will affect them Gerry Giambattista, Pennsylvania

The bomber's release - and the hero's welcome he was given on return to Libya - provoked anger from many relatives of those who died aboard Pan-Am flight 103, particularly in the US.

President Barack Obama condemned the jubilant scenes at Tripoli airport as "highly objectionable".

The UK foreign secretary described TV footage of people greeting Megrahi by cheering and waving flags as "deeply distressing".

Scottish First Minister Alex Salmond also said the reception was "inappropriate".

UK Prime Minister Gordon Brown has so far made no comment, although it has emerged he wrote to Col Gaddafi to ask that Libya "act with sensitivity" in its welcome.

Supermodel fears over Gabon vote

Gabonese supermodel Gloria Mika has told the BBC she fears possible violence if elections in the West African nation are not free and fair.

The 29-year-old model has stepped off the catwalk in Paris to head a campaign for a transparent vote on 30 August.

The polls follow the death of Omar Bongo, Africa's longest-serving leader.

Ms Mika says her aim is not necessarily to stop his son Ali Ben Bongo winning the presidency, but to remind the Gabonese that their vote counts.

"Forty-two years with the same president could make the citizens feel like: 'What can we do anyway?'" she said.

Guardian angels

Ms Mika, who is the face of L'Oreal cosmetics, left Gabon at the age of 16.

Talking to the BBC's World Today programme and BBC French service, she said she has been surprised that her campaign has gathered such momentum.

It started earlier this month with a group on the social networking site Facebook and she now has a website, The Guardian Angels of Gabon.

Her aim is to recruit volunteers to act as observers at polling stations on 30 August.

"The feedback has been beyond my expectations," she said.

But it has also brought unexpected stresses, as different parties try to influence her.

She said with 23 presidential candidates and only one round, the prospects of a free vote are slim.

"It means the winner could be elected with 20% of the vote," she said.

She commended Bruno Ben Moubamba, an independent candidate who has gone on hunger strike demanding a postponement, for his conviction.

But Ms Mika will not be making the trip home next weekend, voting instead with other expatriates in Paris.

Omar Bongo amassed a vast fortune during his years in office - but most of the 1.4 million people in Gabon live in poverty.

Japanese Poll Sees Election Landslide

By TAKASHI NAKAMICHI

TOKYO -- Polls indicate that the Democratic Party of Japan is set to score a landslide victory in the Aug. 30 elections, potentially giving the opposition group a mandate to push through new measures to restart Japan's economy.

The DPJ would likely take about 300 of the 480 seats in the Japanese Parliament's lower house, local daily newspapers the Nikkei and Yomiuri Shimbun reported Friday in separate surveys. That is more than twice the party's current 112 seats. It would give the party both an outright majority and control over all 17 lower house parliamentary committees, giving it broad ability to push through initiatives.

The polls cited widespread desire among voters for a new ruling party to replace the scandal-prone Liberal Democratic Party, which has dominated Japanese politics for half a century.

Senior DPJ officials played down the survey results, saying elections are unpredictable. The number of undecided voters also makes the results hard to predict. The Nikkei poll found 24% of respondents were still undecided on whom to vote for in their single-member districts that make up 300 of the seats, while 17% said they were undecided on which party to vote for in the proportional representation segment, which makes up the rest.

But analysts said the polls showed the election would likely put an end to the LDP's nearly unbroken rule since 1955.

The LDP has acknowledged its trailing position in polls but says the DPJ's proposals are expensive and ineffective.

Some foreign investors would welcome a DPJ rise to power, as the party looks determined to tackle structural problems such as feeble domestic demand, a strained pension system, and a falling birth rate, said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Securities.

Some analysts questioned whether the DPJ's planned steps to lift domestic demand would be effective and whether the party would be able to fund those measures without worsening Japan's fiscal plight. The country's fiscal state is the worst among industrialized countries, with its debt totaling about 170% of its annual gross domestic product.

It will probably prove "difficult for a country with a shrinking population to build a domestic-demand-led economy," said Yoshimasa Maruyama, a policy analyst at Itochu Corp.

It might also have to show results quickly. "The consensus is the DPJ has to prove themselves in the first three months to the average punter and maintain their credibility in order to get a firm majority in the upper house" in elections next year, said Stephen Church, an analyst at equity research house Japaninvest.

The DPJ's campaign pledges released last month included plans to eventually spend 16.8 trillion yen, or $178 billion, in the fiscal year starting April 2013, on measures such as allowances to families raising children, free public high-school education, and cuts in gasoline taxes. Its aim is to generate more economic growth via domestic economic activity, rather than relying on ever-rising exports, the model that successive LDP administrations followed.

This month's election will come at a time when government support is playing a crucial role in pulling the economy out of its worst recession since World War II.

—Alison Tudor and Takeshi Takeuchi contributed to this article.

Write to Takashi Nakamichi at takashi.nakamichi@dowjones.com

Saudi Arabia Business Spat Threatens Riyadh Bid to Be Middle East Boomtown

By MARGARET COKER

RIYADH -- Eight months ago this sprawling desert capital seemed poised to take on the mantle of new Middle East boomtown.

Flush with $450 billion in foreign-exchange reserves, the Saudi government kicked off a massive spending program to mitigate effects of the global economic downturn and loss of oil revenues.

Officials knew 2009 would be a tough year but unlike neighboring Dubai at least they could boast of healthy banks. Bankers were touting Riyadh as the next financial frontier.

But a speedy economic recovery is threatened by a multibillion-dollar battle between two of the kingdom's biggest business groups. The ugly brawl between Ahmad Hamad Al Gosaibi & Brothers Co. and the Saad Group has left the fate of as much as $20 billion in debt in question and almost paralyzed lending to the private sector.

Ahmad Hamad Al Gosaibi & Brothers, or AHAB, is one of the region's largest conglomerates. It is controlled by a group of siblings, cousins and partners and owns one of the country's Pepsi bottling plants among other industrial assets.

The Saad Group focuses mainly on financial services. One of its owners, Maan al Sanea is one of HSBC Holdings PLC's largest individual investors. The two families that run both companies are related by marriage and have been listed among the world's richest people.

In May, however, both groups started defaulting on their debt and blaming each other for their problems. Together they owe around 100 Saudi and international banks between $10 billion and $20 billion, analysts estimate. Both companies have started debt restructuring talks that have been complicated by allegations of foul play.

AHAB, in a lawsuit filed in New York federal court, contend that Mr. al Sanea misappropriated close to $10 billion of its money by forging documents for loans. In a separate suit filed by the group in the Cayman Islands, a judge froze Mr. al Sanea's global assets. Mr. al Sanea denies the charges.

It's uncertain how far the fallout of this feud could spread. Saudi banks haven't reported their exposure to the two family businesses, and the Saudi central bank has declined to answer questions about the issue. The Saudi government has set up a special committee to help schedule repayments from the two firms to Saudi banks.

Uncertainty about the situation has taken a toll on the banking sector as well as the country's economic outlook. Saudi banks aren't expected to fail, but they also aren't expected to open the taps to cash-hungry private businesses anytime soon. Bank lending to the private sector has declined in five of the last seven months.

Approximately 90% of Saudi Arabia's private-sector activity comes from family-owned businesses which run everything from large industrial concerns to contracting firms, banks and retail businesses.

The expected slowdown in private-sector growth caused Saudi economists to cut their economic growth forecasts last month. They expect the economy to contract by 1% this year, wider than the earlier forecast of a 0.5% contraction.

"It is a difficult year for Saudi because of what is happening globally and problems of credit locally," triggered by these two troubled business groups, says Paul Gamble, head of research at Jadwa Investment in Riyadh.

The kingdom, the world's largest oil producer, was already taking a hit from the sliding prices and demand for oil that accounts for a third of its gross national product. Saudi Arabia is expected to produce 10% less oil this year than in 2008. Average price is around $63 a barrel so far this year, less than half of last summer's high of around $145.

To make up for lost oil earnings, the government announced a stimulus package in November. It even plans to run its first deficit in more than a decade. Those plans had many observers expecting investment bankers, lawyers and consultants to gravitate to Riyadh from places like Dubai, where the financial crisis has triggered retrenchment.

For now, however, the financial landscape around Riyadh appears as parched as its sun-baked plains shimmering in the August sun.

The Tadawul All Stock Index has underperformed other emerging markets this year and average volumes have declined. The country's IPO market, the second-most-active in the world in 2008, remains sluggish.

Saudi economists say the economy should return to growth next year. As debt concerns sap energy from private sector, they say the only bright line on the horizon is giant government projects.

From January to July, Saudi Arabia awarded nearly $21 billion in petrochemical-sector deals and $70 billion in nonoil-related contracts for everything from power plants and railways to schools.

Among those benefiting from the government spending are international engineering and construction companies that have been looking to the kingdom to make up for falling orders elsewhere.

In February, General Electric Co. sealed a $912 million deal with the Saudi Electric Co. to supply gas turbines for new power plants. In July, China Railway Construction Corp. signed a $533 million contract with the Saudi Ministry of Education to build 200 schools over a period of 14 months.

Write to Margaret Coker at margaret.coker@wsj.com

Afghanistan Contractors Outnumber Troops

Despite Surge in U.S. Deployments, More Civilians Are Posted in War Zone; Reliance Echoes the Controversy in Iraq

By AUGUST COLE

Even as U.S. troops surge to new highs in Afghanistan they are outnumbered by military contractors working alongside them, according to a Defense Department census due to be distributed to Congress -- illustrating how hard it is for the U.S. to wean itself from the large numbers of war-zone contractors that proved controversial in Iraq.

The number of military contractors in Afghanistan rose to almost 74,000 by June 30, far outnumbering the roughly 58,000 U.S. soldiers on the ground at that point. As the military force in Afghanistan grows further, to a planned 68,000 by the end of the year, the Defense Department expects the ranks of contractors to increase more.

The military requires contractors for essential functions ranging from supplying food and laundry services to guarding convoys and even military bases -- functions that were once performed by military personnel but have been outsourced so a slimmed-down military can focus more on battle-related tasks.

The Obama administration has sought to reduce its reliance on military contractors, worried that the Pentagon was ceding too much power to outside companies, failing to rein in costs and not achieving desired results.

President Obama has repeatedly called defense contractors to task since taking office. "In Iraq, too much money has been paid out for services that were never performed, buildings that were never completed, companies that skimmed off the top," he said during a March speech.

In April, Defense Secretary Robert Gates announced plans to hire 30,000 civilian officials during to cut the percentage of contractors in the Pentagon's own work force, and last month he told an audience of soldiers that contractor use overseas needed better controls.

Military contractors' personnel for a time outnumbered U.S. troops in Iraq. The large contractor force was accompanied by issues ranging from questionable costs billed to the government to shooting of civilians by armed security guards. A September 2007 shooting incident involving Blackwater Worldwide guards working for the U.S. State Department, in which 17 Iraqis were killed, forced the U.S. to aggressively rework oversight of security firms.

Yet in Afghanistan as in Iraq, the Pentagon has found that the military has shrunk so much since the Cold War ended that it isn't big enough to sustain operations without using companies to directly support military operations.

"Because of the surge, we're trying to get ahead of the troops," said Gary Motsek, Assistant Deputy Under Secretary of Defense for Program Support, who helps oversee the Pentagon's battlefield contractor efforts. "So we're pushing contractors in place, doing it as fast as we can, and trying to be responsible about it."

The heavy reliance on contractors in Afghanistan signals that a situation that defense planners once considered temporary has become a standard fixture of U.S. military operations.

"For a sustained fight like our current commitments, the U.S. military can't go to war without contractors on the battlefield," said Steven Arnold, a former Army general and retired executive at logistics specialists Ecolog USA and KBR Inc. KBR was formerly owned by Halliburton Co. He added, "For that matter, neither can NATO."

That poses a challenge for military planners who must keep tabs on tens of thousands of people who are crucial to their operations yet are civilians outside the chain of command.

In Congress, there's a particular concern about security contractors who might upset diplomatic and military relationships. "We've had incidents when force has been used, we believe, improperly against citizens by contractors," said Sen. Carl Levin, the Michigan Democrat who chairs the Senate Armed Services Committee. "This creates huge problems, obviously, for those who have been injured or killed and their families, but it also creates huge problems for us and our policies in Afghanistan."

More

• Front-Runners Claim Victory in Afghanistan
• Obama Hails Afghan Elections, Decries Violence

In Iraq, as of June 30 there were 119,706 military contractors, down 10% from three months earlier and smaller than the number of U.S. troops, which stood at approximately 132,000. But as the Pentagon has been drawing down contractors in Iraq, their ranks have been growing in Afghanistan -- rising by 9% over that same three-month period to 73,968. More than two-thirds of those are local, which reflects the desire to employ Afghans as part of the counterinsurgency there.

Many contractors in Afghanistan are likely to face combat-like conditions, particularly those manning far-flung outposts, and are exposed to possible militant attacks -- blurring the line between soldier and support staff.

The reliance on contractors has prompted a shift in the defense industry, sending more money to logistics and construction companies that can perform everything from basic functions to project engineering.

A recent contract is worth up to $15 billion to two firms, DynCorp International Inc. and Fluor Corp., to build and support U.S. military bases throughout Afghanistan.

Meanwhile, government auditors have repeatedly uncovered military mismanagement of contractors. The Wartime Contracting Commission reported finding during an April trip that the military had accepted a new headquarters building in Kabul hobbled by shoddy construction. Officials in Iraq and Afghanistan were unable to give the commission complete lists of work being contracted out at the bases they visited.

Coordination of security contractors, one of the most charged issues in Iraq, is being beefed up for Afghanistan, said Mr. Motsek, the Pentagon official. A new umbrella contract planned for later this year is designed to make awarding work speedier and to help oversight and vetting.

As well, he said more Defense Department civilians are being sent to oversee all types of contracts, and they will stay longer overseas than their predecessors did in Iraq.

Video conferencing and other remote management tools had fallen short as a substitute. The Army is also adding hundreds of civilian contracting personnel, among the measures being put in place.

Write to August Cole at august.cole@dowjones.com

Developing World's Parasites, Disease Hit U.S.

Researchers Say Infections Spread by Bug Bites, Larvae Are Flourishing Along Border and in Other Pockets of Poverty

By STEPHANIE SIMON and BETSY MCKAY

Parasitic infections and other diseases usually associated with the developing world are cropping up with alarming frequency among U.S. poor, especially in states along the U.S.-Mexico border, the rural South and in Appalachia, according to researchers.

Government and private researchers are just beginning to assess the toll of the infections, which are a significant cause of heart disease, seizures and congenital birth defects among black and Hispanic populations.

Click on the image to see diseases associated with developing countries that are becoming common in the U.S.

One obstacle is that the diseases, long thought to be an overseas problem, are only briefly discussed in most U.S. medical school classes and textbooks, so many physicians don't recognize them.

Some of the infections are transmitted by bug bites and some by animal feces contaminated with parasite larvae; still others are viral. All spread in conditions of overcrowding, malnutrition, poor sanitation and close contact with animals receiving little veterinary care.

"These are diseases that we know are ten-fold more important than swine flu," said Peter Hotez, a microbiologist at George Washington University and leading researcher in this field. "They're on no one's radar."

The insect-borne diseases -- among them, Chagas and dengue fever -- thrive in shanty towns along the Mexican border, where many homes have no window screens and where poor drainage allows standing puddles for bugs to breed. Outbreaks of a bacterial infection transmitted in rat urine have cropped up among the urban poor in Baltimore and Detroit.

Health Blog: Rockefeller Versus a Parasite

Such parasites as toxocara -- shed in animal feces -- thrive in the soil and sandpits where poor children often play. There are an estimated 10,000 toxocara infections a year in the U.S. Symptoms include wheezing, fever and retinal scarring severe enough to blind.

These diseases share a common thread. "People who live in the suburbs are at very low risk," Dr. Hotez said. But for the 37 million people in the U.S. who live below the poverty line, he said, "There is real suffering."

Consider cysticercosis, caused by ingestion of tapeworm larvae. Medical journals estimate 3,500 new cases a year in the U.S., mostly among Latin American immigrants. The larvae spread through the bloodstream and can damage the heart, lungs and brain.

Several times a year, pregnant women complaining of seizures come into Jeanne Sheffield's obstetrics practice at Parkland Health & Hospital System in Dallas, which serves a mostly poor, Hispanic population. Dr. Sheffield orders MRIs and often finds lesions in the brain, a telltale sign of this parasitic infectio

In recent years, as the immigrant population has spread, Dr. Sheffield said, cysticercosis has cropped up in states that have never had to deal with it before, including Iowa, Missouri, Ohio and Oregon. Treatment is available but complex; patients must remain on anti-seizure medicine for years.

Chagas disease, another troubling infection, begins with the innocent-sounding "kissing bug," an insect endemic in parts of Latin America and also found in across the American South, especially Texas.

The bugs are often infected with a tiny protozoan parasite, which they excrete after snacking on human or animal blood. When a bite victim scratches, he may accidentally rub the parasite into his open wound -- and an infection takes hold. Chagas spreads more easily in poor rural communities where homes without window screens get infested.

Many of those ill with Chagas are immigrants or travelers who became infected elsewhere; as many as half develop complications such as cardiac inflammation that can cause heart failure.

Most blood banks in the U.S. began screening for Chagas in the past two years, as concern about the disease mounted. Hundreds of cases have been detected, with especially high rates among Hispanics in Florida and California.

Nationally, one in 30,000 potential blood donors tests positive -- yet many don't seek treatment even after they are told they have Chagas, said Susan Stramer, executive scientific officer of the American Red Cross. Many are immigrants who don't want to draw attention: "They're afraid of the consequences of finding out they're infected in the U.S," she said.

One of the few Chagas clinics in the nation is run by Sheba Meymandi, a physician at Olive View-UCLA Medical Center in Los Angeles.

Dr. Meymandi hits the road one weekend a month with a car full of PVC piping and lengths of cloth, which she uses to transform church sanctuaries into makeshift clinics with curtained exam rooms. At each stop, she tries to persuade Latinos to be tested.

It is a hard sell. Those who feel fine see no need to be tested for what sounds like an exotic disease. And those who have heard about Chagas have also heard that the treatment is exceptionally grueling -- three daily doses of a drug that can cause insomnia, nausea, memory loss and a possible lack of sensation in the limbs. The cure rate is about 70%.

Dr. Meymandi presses on, spurred by the reports that regularly cross her desk, such as the recent case of a 38-year-old gardener who dropped dead, his heart ruined by the parasite. "This is no longer an exotic disease," Dr. Meymandi. "It's prevalent."

Public-health experts say the first step in fighting the infections is to learn more about them. "We understand the basic biology," said Mark Eberhard, who directs the parasitic-diseases division at the Centers for Disease Control and Prevention. "But we don't understand that much about the burden of these diseases."

Hoping to raise awareness -- and money for research -- the CDC is teaming with private foundations to organize a national summit this fall for doctors, nurses, community activists and politicians.

Health-care legislation pending in the House calls for a full report to Congress about the threat from this cluster of diseases, termed "neglected infections of poverty," as their consequences threaten to increase U.S. health-care costs.

Write to Stephanie Simon at stephanie.simon@wsj.com and Betsy McKay at betsy.mckay@wsj.com

Banker, Gadfly, Lawyer, Spy

Authorities Probe a Web of Intrigue at Deutsche Bank

By DAVID CRAWFORD and MATTHEW KARNITSCHNIG

Michael Bohndorf, a gadfly shareholder, was spied on in Spain by Deutsche Bank agents.

MUNICH -- A young woman appeared at the offices of a small law firm here three summers ago to interview for a job as a lawyer. After impressing one partner, she was invited back to speak to the lawyer handling one of the firm's most important cases, a multibillion-dollar lawsuit against Deutsche Bank AG.

The partner and the young woman discussed the case for nearly two hours, according to people familiar with the meeting. When they finished talking, the partner offered her a job.

German authorities are now investigating whether the woman, German law graduate Traudel Schmitt, already had a job -- as a spy for Deutsche Bank, according to people close to the probe.

The suspected attempt to infiltrate the law firm, Bub, Gauweiler & Partner, is part of a complicated spy tale involving Germany's largest bank. The cast of characters also includes a gadfly Deutsche Bank shareholder, an apparent Brazilian seductress and a list of about 20 alleged spying targets. Frankfurt prosecutors, government privacy-law officials, and Germany's banking regulatory agency, Bafin, are all investigating the affair.

Any evidence that Deutsche Bank secretly gathered information on the major lawsuit, filed by onetime media mogul Leo Kirch, would mark an escalation in the scandal, which has already touched Deutsche Bank's boardroom and raised questions about regulatory oversight of the bank. The young woman who interviewed for the law-firm job, who now goes by her married name, Traudel Blecher, declined to comment.

More on the Spy Scandal

• Bank Spy Scandal Widens
  6/3/09
• Bank Releases Surveillance Details
  7/23/09
• Deutsche Bank Fires Two in Spying Probe
  7/22/09

Deutsche Bank has acknowledged that its employees dispatched agents as far as the Spanish Mediterranean to spy on various people. It said last month that it had identified several incidents of spying between 2001 and 2007, and that it fired two midlevel executives. The bank also said there was no evidence to suggest that senior management was involved or that the activity was "systemic" in nature.

After Deutsche Bank disclosed the matter in May, it commissioned New York law firm Cleary Gottlieb Steen & Hamilton LLP to undertake an internal investigation. In July, Cleary submitted to Deutsche Bank's board a roughly 180-page report, portions of which were reviewed by The Wall Street Journal. Relying on interviews and documentary evidence, Cleary concluded that while bank officials may have breached Germany's privacy laws, they didn't commit any major crimes.

Deutsche Bank said last month that Cleary found four incidents involving "questionable investigative or surveillance activities."

Three of the four cases are relatively minor, involving either an attempt to safeguard proprietary information or ensure the safety of senior staff, according to the law firm. The fourth is the focus of German authorities.

That operation began just after Deutsche Bank's annual meeting in June 2006, according to the Cleary report. During that meeting, Michael Bohndorf, a litigious shareholder, had questioned the legitimacy of the bank's new chairman, Clemens Börsig. Mr. Börsig's election, Mr. Bohndorf alleged, had been improper.

Associated Press and AFP/Getty Images

Left to right: Former media mogul Leo Kirch; Deutsche Bank Chairman Clemens Börsig; lawyer Peter Gauweiler.

It wasn't Mr. Bohndorf's first tangle with Deutsche Bank. A retired Hamburg attorney, Mr. Bohndorf had been the bank's most persistent gadfly, peppering management with uncomfortable questions at annual meetings and filing lawsuits challenging everything from executive bonuses to the appointment of directors.

Difficult shareholders are a fixture at such meetings in Germany. In Mr. Bohndorf's case, his doggedness and willingness to go to court made him impossible for Deutsche Bank to ignore.

After the meeting, Mr. Börsig, the chairman, asked the bank's head of investor relations, Wolfram Schmitt, to look into Mr. Bohndorf, Deutsche Bank has said. Mr. Börsig was particularly interested in finding out whether Mr. Bohndorf was working with Mr. Kirch, the former media mogul, the Cleary report says.

Mr. Kirch and Deutsche Bank had been battling one another in German courts since 2003. Mr. Kirch alleges that former Deutsche Bank Chief Executive Rolf Breuer improperly pushed the Kirch media empire into bankruptcy in 2002.

In February of that year, Mr. Breuer gave a television interview in which he said it was "questionable" whether Mr. Kirch would be able to refinance billions of euros of debt. Within weeks, the Kirch Group filed for bankruptcy protection. Mr. Kirch sued the bank, one of his major creditors, arguing that Mr. Breuer had violated German laws that prohibit bankers from making public statements about the financial situation of their clients.

In January 2006, just months before the annual meeting during which Mr. Bohndorf challenged Deutsche Bank's chairman, Germany's highest civil court ruled Deutsche Bank should compensate Mr. Kirch for some of the losses he suffered. That case, in which Mr. Kirch has sought billions of euros in damages, is pending.

After the bank's chairman requested information about Mr. Bohndorf, the gadfly shareholder, Deutsche Bank's head of investor relations, Mr. Schmitt, contacted the bank's head of German security, according to the Cleary report. Soon thereafter, they brought in Bernd Bühner, a former German Army security officer who runs a private-detective agency, the report says.

Mr. Bühner was asked to figure out whether Messrs. Bohndorf and Kirch were working together, according to the report. Mr. Bühner says bank officials also handed him a list of about 20 other investigative targets, including the law firm handling Mr. Kirch's suit, Bub Gauweiler. He says he put together a plan involving two teams, code-named Team Deutschland and Team Balearia.

In July 2006, Mr. Bühner activated his agents, according to both the Cleary report and Mr. Bühner, in an interview. Team Balearia was dispatched to Ibiza, a Spanish island in the Mediterranean where Mr. Bohndorf owns a home.

A few weeks later, Mr. Bohndorf says, he was sitting in an outdoor cafe when a Brazilian woman sat down at a neighboring table. "This is such a romantic island," she said, smiling at him, Mr. Bohndorf recalls. She introduced herself as Adriane.

"She was 23, and I was 66," Mr. Bohndorf said in a recent interview at Bar Es Canto, the cafe on Ibiza where he says he first met the young woman. She told him she was a student, he says, and "asked lots of unusual questions about my work and my home."

A weeklong romance ensued, Mr. Bohndorf said. He gave her a total of €100 after their liaisons, as "taxi money," although she didn't ask for anything, he says. Then she disappeared without saying goodbye, he says, and without leaving him any phone number or email address. Mr. Bohndorf says he believes the romance was part of Deutsche Bank's operation to gather information on him, because the woman asked many questions about his work and the photos in his home, and fiddled with his belongings.

Later, when lawyers from Cleary interviewed Mr. Bohndorf, he didn't mention the young woman. In the wake of German media reports about the matter, Cleary looked into it, but turned up no evidence of any Brazilian woman being involved in the investigation, according to the firm's report. Mr. Bühner said in an interview that he did not send the woman to Ibiza.

Cleary did find evidence that Deutsche Bank sent agents to Mr. Bohndorf's retirement home in Ibiza that summer. A Deutsche Bank official sent Mr. Bühner a link to an online ad offering Mr. Bohndorf's property for rent. Mr. Bühner says he forwarded the address to one of his agents with the comment: "you can go on holiday." The agent, he says, rented the house.

While Team Balearia was busy casing Mr. Bohndorf's home, Team Deutschland was undertaking another operation in Munich, according to people familiar with the matter.

The Cleary report says the plan, which was "authorized" by at least one Deutsche Bank official, was to insert "an attractive young female lawyer" as an "intern" into Bub, Gauweiler, the law firm handling Mr. Kirch's case. The goal, according to Cleary, was to figure out if there was a link between Messrs. Kirch and Bohndorf.

The report says the young woman was interviewed and offered a position at the law firm, but that Deutsche Bank decided to end the operation before she began the job. In the report, Cleary said it was unable to identify the woman. But Frankfurt prosecutors are weighing evidence that Ms. Schmitt was acting as an agent for Deutsche Bank, according to people familiar with the investigation.

On July 1, 2006, Ms. Schmitt responded to an ad in Süddeutsche Zeitung, a local newspaper, seeking a lawyer to work at Bub Gauweiler, these people say. The ad, which appeared in the paper's Saturday jobs section, said that the firm was looking for a "lawyer to assist one of our partners in the area of corporate and banking law." The ad said that the position would put the successful candidate on track to become a partner.

On the morning of July 20, Ms. Schmitt arrived at the firm for an interview. Wolfgang Bub, the partner who conducted the initial interview, was impressed with the young lawyer and recommended that she speak directly with the partner running the Kirch case, Franz Enderle, according to records reviewed by the Frankfurt prosecutors.

Ms. Schmitt returned to the firm on Aug. 3, the records indicate. For about two hours, Mr. Enderle discussed the Kirch case with Ms. Schmitt, according to someone familiar with the conversation. During the discussion, he provided her with background information on the case, including his assessment of how the litigation was progressing, this person says. Mr. Enderle and Ms. Schmitt also discussed the firm's strategy in preparation for the bank's annual shareholder meetings, the person says.

"This is information that would be important for the bank," the person says. Mr. Bohndorf, the troublesome shareholder, was discussed, but only briefly, the person says.

At the end of their chat, Mr. Enderle told Ms. Schmitt that he would like to hire her, and the two discussed her salary, the person says.

Six days later, Deutsche Bank officials held a conference call to discuss its operation and decided not to proceed, according to the Cleary report.

On Aug. 17, Bub Gauweiler sent Ms. Schmitt a written job offer to join the firm as a lawyer, according to an email reviewed by the Journal. Ms. Schmitt responded on Aug. 22, saying she had decided to accept another position in Berlin.

The Cleary report says that there is "no indication" that Deutsche Bank's agents sought or received information on Mr. Kirch's legal strategy. The report says that the only mention of Mr. Bohndorf by Bub Gauweiler lawyers during the young woman's interview was when one of them said that the shareholder was a "hanger-on," riding Mr. Kirch's coattails.

"As a result it can be determined that none of the participants in the Bub Gauweiler incident committed a crime or civil offense," Cleary concluded.

But Peter Gauweiler, a senior partner at Bub Gauweiler and a member of the German parliament, maintains that the evidence suggests that Deutsche Bank managers were "involved for weeks in an organized criminal activity. The incidents must be and will be fully investigated."

Deutsche Bank declined to comment on his statement. The bank said it has "no reason to doubt that the independent investigation was thorough," and that it is "awaiting the results" of the investigations by authorities.

Ms. Schmitt, who resides in Munich and now uses her married name, didn't respond to several requests for an interview.

A man at her residence who identified himself as her husband, Michael Blecher, told a reporter: "My wife will definitely not want to have any contact with you."

On Sept. 12, 2006, Mr. Bühner, the private investigator, met with Deutsche Bank officials at the bank's Frankfurt headquarters to present his findings, according to the Cleary report.

In attendance were Mr. Schmitt, the bank's head of investor relations, Rafael Schenz, then head of security in Germany, and Wolfgang Schnorr, then deputy head of investor relations.

The Cleary report identifies another executive whose participation hasn't been previously disclosed: Reinhard Marsch-Barner, then head of Deutsche Bank's legal department.

Mr. Marsch-Barner, who played a key role in the bank's defense in the Kirch case before leaving in 2008, was the senior-most Deutsche Bank executive to have direct knowledge of the operation, according to Cleary's findings.

Mr. Marsch-Barner, who now works for Linklaters LLP in Frankfurt, said in a telephone interview that he couldn't recall the 2006 meeting. "It's too far in the past," he said.

According to the Cleary report, Mr. Bühner showed the group pictures of the interior and exterior of Mr. Bohndorf's house on Ibiza and went over the operation. He used a computer disk containing details. The Cleary report said no such disk can now be found.

—Almut Schoenfeld contributed to this article.

Write to David Crawford at david.crawford@wsj.com and Matthew Karnitschnig at matthew.karnitschnig@wsj.com