-Caveat Lector- from: http://www.aci.net/kalliste/#todnews Click Here: <A HREF="http://www.aci.net/kalliste/#todnews">The Home Page of J. Orlin Grabbe</A> ----- Spy vs. Spy Russians Capture CIA Spy in Moscow Not just another pretty face. RUSSIAN intelligence boasted yesterday of catching a CIA officer working under diplomatic cover as she prepared to take delivery of what it called "military-strategic materials" in Moscow. Cheri Leberknight, listed as a second secretary at the US embassy, was detained in possession of a detailed map of the area, invisible ink "tablets" and a device to monitor and hamper efforts to tape her conversations, a spokesman said. Russia's domestic intelligence service also released photographs of Miss Leberknight, who is in her thirties, taken during her detention, as well as the anti-surveillance equipment she allegedly had with her. Alexander Zdanovich, spokesman for the FSB, successor to the KGB, said: "This is pointless to deny. Arresting a foreign diplomat or someone working under diplomatic cover is a very serious step so everything was thoroughly checked." The FSB was clearly elated at the operation's success, crowing that Miss Leberknight was the second female CIA officer apprehended in Moscow. The first, described as Martha Peterson, was caught in 1977. Rivalry between Russian and US intelligence has recently recovered much of the edge it had during the Cold War, with both sides accusing the other of excessive spying on their territory. Rows over espionage have also increased tension over Russia's military campaign in Chechnya and Nato's presence in the Balkans. President Yeltsin's recent walk-out from an international summit in Istanbul was presented at home as a diplomatic triumph and the detention of a CIA officer in Moscow is further ammunition for those whipping up anti-western sentiment. Only what Mr Zdanovich called an operation "of a pre-emptive character" had prevented highly sensitive secrets leaving the country, he said. According to news agencies, the material included information about Russia's nuclear capabilities. Mr Zdanovich denied that the incident was a tit-for-tat reaction to this week's charging of a US navy code-breaker, Petty Officer Daniel King, with passing classified information to Russia. He said: "This was not a response. That is the vocabulary of the Cold War, when the principle of an eye for an eye was in effect." Russia's Foreign Minister, Igor Ivanov, expressed the hope that the scandal would not further damage relations between the two countries. He said: "We hope and consider that it will not prejudice the development of bilateral relations. Nevertheless, naturally, such episodes do not help their climate and atmosphere." The fate and identity of Miss Leberknight's Russian contact remained a mystery and it was not clear whether he was in the area when she was detained in the Izmailovo district of Moscow on Monday evening. The large park in Izmailovo would be ideal for dead letter drops. It is also not far from the FSB's main remand prison at Lefortovo. After her arrest, she was taken to FSB headquarters in the Lubyanka complex, and a US consular official and Russian diplomat were summoned. Miss Leberknight, listed as working in the embassy's political section, was later released but is likely to be declared persona non grata by the Russian authorities and given a short period to leave the country. The London Telegraph, December 1, 1999 Stock Market Record Money Flow into Equity Funds Um, um, I do love that Turkey. US retail investors stepped up their investments in equity mutual funds last month, probably breaking a near four-year-old record for net cash inflows. TrimTabs.com, an investment research group, estimates that net cash inflows into equity mutual funds in November could reach $31.4bn (E31.1bn), as the US bull market revived after a jittery summer and early autumn. If confirmed, this would top the $28.9bn record set in January 1996. Retail investors' taste for aggressively managed funds, including high-growth investment vehicles, has helped power a strong increase in the principal US equity indices. That has in turn attracted more investors anxious not to miss out. Both the broadly based Standard & Poor's 500 and the tech-weighted Nasdaq Composite Index have set records in the last week. The two indices have fallen this week, but the Nasdaq is still trading at more than 3,350, having started the year below 2,000. "Earlier in the year, even though these [aggressive] funds were still doing well, people were inclined to put money into large-capitalisation funds," said Russ Kinnel, senior analyst at Morningstar, the mutual fund research group. "This [trend] is a reflection of the fact that tech has been the only story this year - the more tech you have, the better the returns." "Another point of view says the public is being extremely reckless," said Carl Wittnebert, director of research at TrimTabs, which estimates that in November aggressively managed funds will receive a net inflow of $10.6bn. "It's an all-out speculative play." Definitive figures for November will not be published until later this month, but mutual fund inflows also improved sharply between September and October. The Investment Company Institute (ICI), the trade body that tracks trends in mutual fund investments, reported earlier this week that net new cash flow in October was $20.42bn, compared with $10.79bn in September. However, analysts said it was too early to say whether the increase would be sustained, after a plateau that has lasted for one or two years. Rather than a structural change, Geoff Bobroff, an industry consultant, said the increased inflows reflected the fact that "we have had a very quiet summer and money sitting on the sidelines is now coming into funds". January is normally the big month for fund inflows because of investment by newly retired Americans and employees banking bonuses. The January 1996 record was nearly broken a year later when net inflows reached $28.88bn, according to ICI. Since 1990, there has only been one month when there was a net outflow. The combined assets of US mutual funds reached $6,225bn in October, of which $3,506bn is accounted for by stock funds. The Financial Times, December 1, 1999 Political Payoffs Kohl Admits Secret Payments The perils of Swiss parking lots. BERLIN - In a dramatic confession by one of Europe's most respected statesmen, former chancellor Helmut Kohl of Germany said Tuesday that he used a system of secret accounts while running the government to mask illicit donations that were channeled to regional branches of his Christian Democratic Union. After meeting with fellow party leaders to discuss a growing scandal that threatens his reputation and future electoral prospects of the Christian Democrats, Mr. Kohl said that he assumed full responsibility for any errors in judgment during his years in office and expressed regret if the hidden accounts broke German laws on political financing. The scandal erupted earlier this month when prosecutors opened a tax evasion investigation of Walther Leisler Kiep, a former treasurer for the Christian Democrats, when they could not trace a $520,000 donation made in 1991 by an arms dealer. The money, contained in a metal suitcase, was passed to Mr. Kiep during a secret encounter in a Swiss parking lot. Mr. Kiep denied taking the money for himself and later acknowledged the cash went into a secret slush fund managed by Mr. Kohl to cover political operations and ensure the loyalty of local party chiefs. Last week Parliament launched an inquiry to determine if the undeclared gift was connected to a decision by Mr. Kohl to authorize the export of 36 tanks to Saudi Arabia - a link vehemently denied by the former chancellor. ''I reject in the strongest terms all allegations - in whatever form - that political decisions made by me could be bought,'' Mr. Kohl said. ''Anyone who knows me knows that the only responsibility I felt, and still feel, was toward the good of our country,'' he added. Wolfgang Schaeuble, Mr. Kohl's trusted lieutenant and his chosen successor as leader of the Christian Democrats, said the party leadership listened to Mr. Kohl's explanation of the secret accounts with ''great respect.'' He said the board unanimously concluded that there had been no venal motives behind the financial dealings of the former chancellor. ''We are quite certain that nobody enriched themselves,'' Mr. Schaeuble said. ''And there is absolutely no doubt that decisions in the Kohl era were not for sale.'' But Mr. Schaeuble acknowledged there were serious misgivings about the peremptory manner in which Mr. Kohl put himself above the party, and possibly above the law, in gathering donations of dubious origin and then doling out funds to his political friends. ''Helmut Kohl led the party in a patriarchal way,'' Mr. Schaeuble said. ''He took care of and really cared about everyone. But this patriarchal style meant that the rules were not adhered to exactly in the way we might want today.'' Mr. Schaeuble said ''a gray zone'' involving political financing of questionable legality evolved under Mr. Kohl, who dominated the Christian Democrats as their iron-willed chairman for 25 years. German law requires that all political donations must be publicly declared. Mr. Kohl, however, said he felt justified in setting up and operating the secret funds network after the Christian Democrats encountered financial difficulties during the 1980's. Those difficulties came in the wake of political finance reforms following a scandal involving donations to major parties by a wealthy industrialist, Friedrich Flick. ''During my term as party chairman I considered it necessary to treat certain matters secretly,'' Mr. Kohl said, ''such as special payments to party branches and organizations in order to give crucial assistance in the financing of their political work.'' ''Running accounts separately from the normal accounts of the party treasury seemed to me to be appropriate,'' he added. ''If the consequence of this action was a lack of transparency and perhaps violations of rules on party financing, then I regret that. I did not want this. I only wanted to serve my party.'' Mr. Kohl said he wanted to carry the full burden ''for mistakes made during my term of office'' because he was concerned about harming the efforts of his party to recover from the disastrous defeat last year in national elections that drove Mr. Kohl from power. The Christian Democrats have rebounded in recent state polls and hope to make further gains next spring at the expense of Chancellor Gerhard Schroeder's governing Social Democrats. But Mr. Kohl's historical legacy has clearly been tarnished. Only three weeks ago, he celebrated the 10th anniversary of the fall of the Berlin Wall in the company of former President George Bush and Mikhail Gorbachev, the ex-Soviet leader. At a dignified ceremony at the Reichstag, both leaders extolled Mr. Kohl as one of the great statesmen of the century for the skillful way he orchestrated the reunification of Germany. This week, the German media adopted a more critical attitude toward the nation's longest-serving leader since Bismarck. ''The Kohl monument is crumbling,'' wrote Der Spiegel, an influential newsmagazine. ''Will the political life of the chancellor of unity end in sordid money tales?'' France has also been shaken by political scandals recently. In early November, Finance Minister Domininque Strauss-Kahn resigned after magistrates opened an investigation into allegations that he was involved in the use of forged and fraudulent documents to cover up that he did no work in exchange for a legal fee. International Herald Tribune, December 1, 1999 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. 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