FSO Editorials: "The Inside Job" by Dr. Joe Duarte 07/19/2004

FSO Editorials

The Inside Job
A retrospective excerpt from Dr. Joe Duarte's Daily Market I.Q.
by Joe Duarte
July 19, 2004

Editor's note:

On July 16, 2004, Newsweek and Time magazines, published articles on their web sites that proclaimed that the 9/11 Commission had concluded that Iran had aided Al-Qaeda prior to the 9/11 attacks on New York City.

On July 17, 2004, according to a report on Stratfor.com: "The FBI warned July 16 that al Qaeda is recruiting non-Arabs, particularly U.S. citizens or those with legal residency. In a bulletin, the FBI said, "Finding operatives with U.S. status would greatly facilitate al Qaeda's ability to carry out an attack within the United States." The FBI said despite this warning, law enforcement should not discount the terror group from using Arab operatives."

On July 10, 2004, "The Iranian Cycle," a retrospective collection of columns and excerpts from Dr. Joe Duarte's Daily Market I.Q. column appeared on these pages, clearly chronicling the evolving story that may have reached a climactic stage with the reports published by Time and Newsweek.

The excerpt below, culled from the April 12, 2004, now titled "The Inside Job," was a clear harbinger of developments to come, and offers significant insight into what might be coming next.

As always, the reader is reminded that Dr. Joe Duarte is a centrist, and that the goal of all the writings is to keep investors abreast of significant geopolitical events and their potential effects on the financial markets. There is no political agenda being forwarded by Dr. Duarte.

The New Fifth Column

According to UPI�s Arnaud de Borchgrave, the anti U.S, and U.K. feeling form Muslims inside the respective countries is significant, and at least based on opinion surveys is worth keeping an eye on. De Borchgrave, on 4-8 wrote: �The new Fifth Column syndrome indicates the enemy inside the gates has plenty of bedlamites rooting for him in other countries. In Pakistan, some 66 percent believe Osama bin Laden is a good guy. As for the world's biggest proliferators of nukes to America's enemies, he has close to a 100 percent approval rating. Recent opinion surveys among Britain's almost 2 million Muslims, mostly from South Asia, rang alarm bells in Whitehall and in the media. Eighty percent were against the invasion of Iraq, 13 percent said another September 11-style attack on America would be justified, and 50 percent said they would consider becoming a suicide bomber if forced to live like Palestinians. Some 200,000 openly sympathized with Osama bin Laden.�

And perhaps offering a window into the future of the European Union, de Borchgrave added: �Muslim sentiments are not much different in Continental Europe. Increasingly, Europeans are older and affluent and find themselves surrounded by immigrants who have little respect for local traditions. In the Netherlands, Muslims are a majority among children under 14 in the country's four largest cities. Rotterdam, a port city where half the people are of foreign origin, will soon unveil Europe's largest mosque. In Brussels, the capital of the European Union, Muhammad has been the name most frequently given for newborn baby boys. Osama is a close second.�

Iran Bankrolls And Supports Anti U.S. Operations In Iraq

Middle East Newsline reported two significant developments over the weekend. First, the intelligence and analysis web site confirmed that Iran�s involvement in Iraq goes beyond putting pressure on the Shiite clerics, and as others have reported, providing strategic and financial assistance to the Sadr uprising.

According to the report: �Iranian intelligence has been operating at least 18 covert centers in Iraq as well as targeting Shiites deemed as aligned with the United States in a nearly $1 billion effort to prevent the spread of democracy in that Arab country.�

Quoting �a former Iranian official in Teheran's intelligence community,� Middle East Newsline continued by saying that the official � publicly disclosed the first details on Iran's intelligence presence in Iraq. The defector said Iran has bolstered its intelligence presence throughout Iraq where Teheran has sought to exacerbate ethnic tensions and encourage a nationwide revolt against the United States. The centers have been located in Baghdad, Basra, Karbala, Najaf, Nasseriya and Suleimaniya, the Iranian defector said. The centers, operating under the cover of charities, have also been used to recruit Iraqis to spy for Iran.

The defector, identified as Haj Saidi and who fled Iran in late 2003, told the London-based daily A-Sharq Al Awsat on April 3 that Iran has sent hundreds of intelligence agents into Iraq over the last 18 months. Many of them came under the guise of Iranian pilgrims and Iraqi refugees. He said more than 300 Iranian agents -- benefiting from about 2,700 safe houses in 14 cities -- were operating in Iraq.�

Syria Ships WMD To Sudan

Middle East Newsline also reported that Syria has shipped significant numbers of WMD, including chemical weapons to Sudan, using passenger airliners. The shipments, have reportedly been done with Syrian government approval, but have been made without the knowledge of the government of Sudan.

The smuggled cargo has been sent to Sudan as part of the two countries� recently improved trading relationship, and includes �shipments of Scud C and Scud D extended-range missiles as well as WMD components to warehouses in Khartoum since at least January 2004.

["There is widespread concern in the Syrian regime that Damascus will be the next to face heavy U.S. and international pressure to open its WMD facilities in the wake of the Libyan example,"] a senior intelligence source said. ["The Syrians have decided that they want to take some of their assets out of the country."]

There is no mention in the report about whether the WMD have any connection to Saddam Hussein�s arsenal, which according to multiple unsubstantiated reports, was smuggled into Syria prior to the U.S. invasion of Iraq.

The August PDB

The August 6, 2001 Presidential Daily Briefing (PDB) was declassified by the White House, which spent a good deal of time downplaying its importance.

Quoting anonymous sources �who read the presidential memo,� prior to the release, the Associated Press , reported that the presidential daily briefing, or PDB, delivered to Bush on Aug. 6, 2001 - a month before the Sept. 11 attacks - said there were various reports that Osama bin Laden had wanted to strike inside the United States as early as 1997 and continuing into the spring of 2001, the sources told The Associated Press. The wire service added that [�the same month as that briefing of Bush, U.S. intelligence officials received two uncorroborated reports suggesting terrorists might use airplanes, including one that suggested al-Qaida operatives were considering flying a plane into a U.S. embassy, current and former government officials said,�] and that [�those August 2001 reports - among thousands of varied and uncorroborated threats received by the government each month - weren't deemed credible enough to tell the president or his national security adviser, Condoleezza Rice, the officials said. Neither involved the eventual Sept. 11 plot.�]

The PDB became a hotly contested point during National Security Adviser Rice�s public testimony in front of the 9/11 commission. In our opinion, although Dr. Rice�s testimony was seen favorably by 50% of those polled by Rasmussen.com, little new light was shed on the subject. All evidence we have reviewed still points to the same conclusion: The United States, hampered by laws prohibiting the cooperation between domestic and international security agencies, and political squabbling during the Clinton administration and the Bush years, was never able to put together enough calm heads to sift through the evidence that might have led to better insight into the possibility of a dramatic attack by a terrorist organization.

Perhaps the key statement by Rice to the commission was this, as quoted by AP: �Rice stated emphatically on Thursday she did not see any such reports about al-Qaida using a plane as a weapon until after Sept. 11, suggesting the intelligence may have reached someone lower in the White House. ["To the best of my knowledge, Mr. Chairman, this kind of analysis about the use of airplanes as weapons actually was never briefed to us,"] she said. ["I cannot tell you that there might not have been a report here or a report there that reached somebody in our midst."]

Again, substantiating our conclusion, AP added, also over the weekend that �A person familiar with the session said Mr. Clinton told the commission he did not order retaliatory military strikes after the bombing of the USS Cole in October 2000 because he could not get ["a clear, firm judgment of responsibility"] from U.S. intelligence before he left office the following January. It wasn't until after the Bush administration took power that U.S. intelligence concluded al Qaeda had sponsored the attack on the ship in the harbor at Aden, Yemen. Some commissioners have been critical of the decision not to launch a retaliatory military strike.�

The report added that �Mr. Clinton ["did not indicate anything fundamentally that he would have done differently"] given what U.S. intelligence knew about Osama bin Laden and the al Qaeda threat.�

Conclusion: The Enemy Within

Today�s report clearly indicates that the Islamic militants have been planning to bring about the downfall of the United States, and the Western world for several years, and most likely several decades. The degree and sophistication of the entire operation, including the amazing attention to detail and the inclusion of multiple fronts of engagement, including Afghanistan, Europe, and the United States, shows that the situation is beyond serious, it is ubiquitous.

By carefully studying the weaknesses of its enemy, including the legal hurdles in the United States, such as the legislation that prevented the FBI and the CIA from communicating on high level, matters of national security, and by capitalizing on the secretive nature of the spy business, the perpetrators have shown a level of sophistication and cunning, that is only slowly being acknowledged, albeit begrudgingly in Washington.

The 9/11 commission, even with its increasingly apparent partisanship, is mostly responsible, and perhaps accidentally, for revealing, albeit only to those who read between the lines, that the enemy of Western life, as we know it, is as much without, as it is within.

It also points out one clear fact, that is only surmised by careful scrutiny and thought, the enemy is within the fabric of western society now, and perhaps even inside the governments.

Thus, the worried look, and the increasingly graying hair on President Bush�s head, along with the permanent scowl on National Security Advisor�s face, are in our opinion, only partially present due to the pressures of re-election.

To us, it seems, that well...they, perhaps more than any others before them, are coming to grips with the fact that they are up against a formidable, multiheaded foe, who has been plotting the end of western life as we have come to know it, for at least one or maybe more generations.

J.A. Duarte M.D.
President River Willow Capital Management
Author of "Successful Energy Sector Investing"
www.joe-duarte.com

Joe Duarte, M.D.

Joe Duarte M.D. is founder and Editor in Chief of Joe-Duarte.com. Dr. Duarte is a board certified anesthesiologist, a registered investment advisor, and President of River Willow Capital Management, where he manages individual client accounts. His latest books "Successful Energy Sector Investing" and "Successful Biotech Investing" (Prima/Random House) are available on line at amazon.com, barnesandnoble.com, borders.com, Traders Press, and all major online and brick and mortar bookstores in the U.S., U.K. Europe, and Australia.

Dr. Joe Duarte�s Daily Market I.Q. is a subscriber service that provides daily intelligence, trading strategies, and technical analysis at www.joe-duarte.com.