Rajat Gupta – Take-Down-of-Indians Pattern Continues

Posted in America, Business, Desert Bloc, India, politics by Anuraag Sanghi on June 15, 2012

How come never wire-taps were allowed in insider trading cases? Why only against Rajarathnam and Rajat Gupta?

Many in the US Senate and Congress are suspected of insider trading - but enjoy legal immunity  |  Cartoonist Chuck Asay in 2012  |  Click for image.

Many in the US Senate and Congress are suspected of insider trading – but enjoy legal immunity | Cartoonist Chuck Asay in 2012 | Click for image.

Rajat Gupta, 63, denied illegally leaking boardroom secrets to Raj Rajaratnam, a former hedge fund manager now serving 11 years in prison.defence lawyers told the jury that the use of phone records and FBI wiretaps only created the illusion of illegal business activities.

“That is a gambit that can bamboozle people into thinking something was proven when it wasn’t,” defence lawyer Gary Naftalis said.

The trial focused on a phone call made to Rajaratnam on 23 September 2008, minutes after Gupta had listened to a private conference call discussing a $5bn (£3.2bn) investment in Goldman Sachs by Warren Buffett’s company Berkshire Hathaway. The deal would be made public after stock markets closed that day.

According to phone records, Rajaratnam bought $40m in Goldman Sachs stock moments after the phone call, earning nearly $1m. (via BBC News – Ex-Goldman Sachs director Rajat Gupta guilty of fraud).

How come never wire-taps were allowed in insider trading cases? Why only against Rajarathnam and Rajat Gupta?

Was it a huge fraud? Even if the State case is true, the amount was in a few piffling millions – unlike the Boesky.

Ivan F. Boesky, once among the financial world’s most powerful speculators and now a symbol of Wall Street’s excesses, was sentenced yesterday to three years in prison for conspiring to file false stock trading records.

The three-year term is the third longest to have been imposed in a case related to insider trading. Mr. Boesky had faced a maximum penalty of five years in jail and a $250,000 fine.

A year ago, Mr. Boesky settled civil insider trading charges, paying a record $100 million. He had been charged with illegally earning more than $50 million by trading with inside information he bought from Dennis B. Levine, a former investment banker who pleaded guilty to criminal charges earlier and is now in prison. Mr. Boesky subsequently disclosed that he additionally earned more than $30 million by illegally trading with inside information sold to him for $700,000 by Martin A. Siegel, once one of Wall Street’s top corporate merger specialists. Mr. Siegel has pleaded guilty to criminal charges and is awaiting sentencing.

Last April, Mr. Boesky pleaded guilty to the single felony count, at that time one of the most important devel-opments in the widening Wall Street insider trading scandal. Mr. Boesky pleaded guilty to conspiring to file false documents in regard to a scheme in which he helped the corporate raider Victor Posner take over the Fischbach Corporation by buying stock in the company.

Mr. Boesky was unlikely to serve more than two years of his term, though. According to the standard guidelines that govern prison sentences. (via BOESKY SENTENCED TO 3 YEARS IN JAIL IN INSIDER SCANDAL – New York Times).

And if, you thought this was bad, look at what followed.

Michael Milken pleaded guilty to six felonies and agreed to put up $600 million, $200 million of that in fines, to settle the biggest fraud case in the history of the securities industry.

Mr. Milken’s public admission ends four years of obdurate denial of wrongdoing, virtually assures a prison term and opens the possibility of further fraud prosecutions.

The six felonies to which he pleaded guilty are serious yet technical securities violations and did not directly enrich him. His lawyer has even characterized them as an overzealous attempt to help friends.

The plea bargain allows theft to be cloaked as misguided loyalty.
The plea bargain reinforces another misconception. In his statement to the court, Mr. Milken explained that his ”business was in no way dependent on these practices. Nor did they comprise a fundamental part of our business.” That claim is, at best, a self-serving half-truth.

Opportunities to cheat clients, the Internal Revenue Service and regulators were numerous and lucrative. Drexel, for example, would lend money to investors who were buying stocks based on the predicted outcome of deals that Drexel itself was arranging. (via Michael Milken’s Guilt – New York Times).

Now these were cases that were ‘open’ secrets. Everyone knew these guys were brazenly flouting basic norms of professional etiquette – and should be disbarred from Wall Street.

Legally, any action against Boesky or Milliken was possible – short of a death sentence.

Did Rajat Gupta know that  this how insider-trading cases ae settled?  |  A Carol Simpson cartoon from 2003  |  Click for image.

Did Rajat Gupta know that this how insider-trading cases ae settled? | A Carol Simpson cartoon from 2003 | Click for image.

After fraud and illegal earnings in hundreds-of-millions, they served a few years in jail – and resurrected Michael Milken, ‘it seems, has made the classic American transformation from despised villain to “controversial” figure.’

Rajarathnam crime.

Two big ones.

SEC wanted Rajarathnam to squeal on and implicate his brother Renjit. He refused. Secondly, apparently, he never banged his head at the altar of the American Dream.

Ditto for Rajat Gupta.

Forbes, had one article that summed up the case very well.


That was evidence, that could put away Rajat Gupta for life.

Gary Naftalis, Rajat Gupta’s lawyer asked, “Where’s the beef?” referring to the government’s lack of evidence. Unlike other insider cases, Neftalis has a point.

While the circumstantial evidence against Gupta is strong, there was no concrete evidence, a recorded conversation, that put Gupta on the phone with Raj Rajaratnam passing inside information. Sure there was the call in 2008 that Gupta placed to Rajaratnam after a Goldman Sachs board meeting and minutes later Raj placed a large order for Goldman stock ahead of the announcement of Warren Buffett‘s $5 billion investment in the investment bank.

Granted, it does not look good, but is it enough to persuade a jury?

Galleon hedge fund trader, Rajaratnam was convicted last year of receiving insider information from various sources, some of whom were caught on FBI surveillance (tape) speaking directly with him about the confidential information. The government was actively taping many of Rajaratnam’s calls, so why don’t they have Gupta saying, “Here is some confidential information for you to trade on.”?

Who knows, but they do have other people on tape saying just that, and that person is not even on trial.

Goldman Sach’s David Loeb, who is still employed by the firm, was caught on phone calls tapped by the FBI passing inside information to Rajaratnam about Intel and Apple, both publicly traded stocks. Those tapes, Gupta’s lawyers argued, show that Rajaratnam had multiple sources of inside information, including others at Goldman besides Gupta.

However, U.S. District Judge Jed Rakoff sided with the prosecution that such evidence was hearsay and not directly a part of this case. The jury never heard the tape. Loeb has not been charged, but if I were him I would be sleeping with one eye open.

Another piece of information that the jury will not hear is that Rajat Gupta (63) could spend the remainder of his life in prison if he is found guilty. The jury must decide guilt or innocence, but they will have no idea that the penalty they could be giving Gupta because that is not allowed.

There is no real “DNA”, a wire tape, that proves Gupta passed inside information to Rajaratnam. It does not exist, but the circumstantial evidence is powerful …. but that does not mean Gupta is guilty.

Last weekend, we learned that Commerce Secretary John Bryson was involved in a traffic accident where he left the scene, proceeded to drive along further and ran into another vehicle. Immediately the press wondered if there were alcohol and drugs involved with Bryson’s accident(s).

The real story that Bryson had suffered a seizure leading to the accidents. How quick we judge.

If this jury convicts Gupta, it is because they believed he had a close relationship with Rajaratnam and not that they had irrefutable evidence. Is that worthy of a life sentence? We will see.

via Rajat Gupta Case – It’s All Circumstantial – Forbes.

In case of Anand Jon, it is amazing how a murder accused, Phil Spector, was Juror No.6, of the jury that found Anand Jon guilty. While the Phil Spector murder case went on for nearly a decade. Anand Jon’s case that started after Spector’s crime, has completed quite a few years in prison.

Phil Spector, the rock music impresario behind hits like “Da Doo Ron Ron,” and “You’ve Lost that Lovin’ Feeling,” was convicted Monday of murdering a struggling actress at his mansion in 2003 after a night of drinking.

Mr. Spector, 68, faces at least 18 years in prison. The jury, ending a five-month trial, reached its decision after 27 hours of deliberating This was the second murder trial in the case; the first ended in a hung jury in 2007. Mr. Spector has been out on bail for most of the last six years, but was immediately taken into custody after the verdict on Monday.

Lana Clarkson, who was 40, starred in a 1985 cult hit, “Barbarian Queen,” and had a bit part in “Fast Times at Ridgemont High” in 1982.

She was working as a hostess at the House of Blues on the Sunset Strip when Mr. Spector visited, struck up a conversation and took her out drinking.

They finished the night at his mansion, known as the Castle, but, when she spurned his advances and tried to leave, he shoved a gun in her mouth and pulled the trigger, prosecutors said.

The prosecutors argued that this fit a pattern of Mr. Spector’s drinking and threatening women with guns over decades. (via Phil Spector Found Guilty of Killing Actress – NYTimes.com).

Anand Jon never pulled a gun, to force wannabe-models to have sex. He got more than 50 years in prison. Phil Spector gets less than half.

Anand Jon was a Brown Indian – a segment of people who Uncle Sam wants to cow down and make subservient and submissive.

Unlike Rajat Gupta. Rajarathnam. Or Vikram Budhi.

These people may be guilty as hell – but they had a lot more grace and character under pressure.

Unlike many others, who hiding in their rat-holes.

The Crisis of Aging Populations

Posted in Current Affairs, Media, Pax Americana, politics, Propaganda by Anuraag Sanghi on June 15, 2012

‘Advanced’ economies of the world are aging rapidly. They can only sustain by ‘importing’ labour – i.e. immi-grunts.

Japanese women and men expect to live the longest  |  Source & courtesy - economist.com; Dec 11th 2009  |  Click for image.

Japanese women and men expect to live the longest | Source & courtesy – economist.com; Dec 11th 2009 | Click for image.

Demographic dead-end

Japan is already there.

People in Japan have to work late in their lives – when by all logic and reason, they should be at home – in retirement or care.

But acute labour shortage, small families, late marriages are forcing the elderly in Japan to work.

High mortality rates of men in Russia has forced the government to announce incentives for families to have a second child.

USA is growing its labour force by Mexican and Asian migrants, principally from India and China. Western Europe manages its labour shortage with controlled immigration from Africa, Eastern Europe and Asia to a lesser degree.

Image source & courtesy - businessweek.com

Image source & courtesy – businessweek.com

China is torn between a looming crisis – and publicly recanting its faulty population policy. Young people in China make do with ‘solitary sex’.

Apart from these four major economies, in country after country State intervention has wreaked havoc.

Lure of the State

And Anuj Chopra here wants the State to intervene, regulate, dictate, control reproduction.

His excuse for State intervention?

A few (maybe a few hundred elderly women) decided to have children. Much like the patronizing treatment and media circus around the Octomom Nadya Suleman, a few years ago.

In recent years, thousands of fertility clinics have cropped up around India, spawning a new industry of “fertility tourism” for reproductively challenged couples from around the world. They are the medical equivalent of dollar stores, offering IVF treatment at a fraction of the cost in developed economies, and often without the strict regulations and waiting periods that elsewhere make the procedure a logistical nightmare. IVF — along with other reproductive specialties like surrogacy (the world-famous “womb-for-rent” business), hormone therapy, and gamete (egg or sperm) donation — are part of India’s flourishing fertility treatment business, on track to blossom into a $2.3 billion enterprise in 2012 according to the lobby group Confederation of Indian Industry. The sector, described as a “pot of gold” in a report by the Indian Law Commission, has earned India the dubious reputation of being the world’s baby factory.

Fertility clinics aren’t just serving the international market, they’re increasingly serving the domestic market as well. And regulation has not kept pace with the proliferation of clinics as India emerges as the Wild West of fertility. In recent years, facilities have been accused of a litany of shocking abuses — from exploiting impoverished women who became surrogate mothers to prescribing unapproved fertility drugs to delivering “stateless babies” who are refused citizenship by both their mother’s country and their Indian birthplace.

The Indian government is gearing up to pass a new law to regulate the fertility business, prepared by a 12-member committee of the Indian Council of Medical Research and expected to be tabled in parliament in the coming months. It mandates that all fertility clinics be registered with the government; spells out specific guidelines for the sourcing, purchase and storage of gametes; and also explicitly enumerates the health and legal rights of surrogate mothers and babies delivered by them.

But one pressing issue has remained beyond the purview of regulation: How old is too old to get pregnant?

In 2008, Rajo Devi Lohan, an Indian woman from a tiny village in the northern state of Haryana, became the world’s oldest mother at the age of 70. About a year and a half later, Bhateri Devi, a 66-year-old from the same state, became the world’s oldest woman to give birth to triplets.

In India, as in many other countries, medically assisted procreation techniques have long been the preserve of the upper-class elite. But in recent years, with proliferating clinics hawking cheap treatment, it is fast becoming the trend du jour among middle- and working-middle class couples, including the elderly. (via The World’s Baby Factory – By Anuj Chopra | Foreign Policy).

The problem of stagnant economies! (Cartoonist - Chip Bok; published on 2005-06-05; source and courtesy - cartoonistgroup.com).

The problem of stagnant economies! (Cartoonist – Chip Bok; published on 2005-06-05; source and courtesy – cartoonistgroup.com).

Anuj Chopra thinks that the English-speaking, Western-educated elites in India know better.

Anuj, before you waste so much paper to print snooty and silly theories, and burn electricity on server farms that host such web-pages, check with reality.

Wake up – and smell the coffee.

India does not face a demographic dead-end, because Indians ignored English-speaking, Western-educated elites in India like you.

Go, figure!

Global Health Threats: How Governments are Creating Them

Posted in America, Business, India, Media, Propaganda by Anuraag Sanghi on June 12, 2012

How the economics of sugar and sugar-substitutes have an impact on the eating disorder related epidemics across the world – from India to USA.

Why is obesity and eating-related disorder rampaging across the world  |  Cartoon titled Big Problem by Jeff Parker  via Cagle Post  |  Click for image.

Why is obesity and eating-related disorder rampaging across the world | Cartoon titled Big Problem by Jeff Parker via Cagle Post | Click for image.

History in Chemistry

In 1976, Shashikant Phadnis, an Indian-Marathi student, researching for a pesticide, at King’s College London, misunderstood his professor’s instruction to test a chemical as a request to taste – a mistake common among Marathi and Gujarati speaking-people, who have difficulty in differentiating between a long-sound and short-sounds like beg becomes bag, leg becomes lag – or bag becomes beg and lag becomes leg.

Shashikant Phadnis ‘tasted’ a chemical he was supposed to test. That chemical was sucralose – a popular sweetener today that is probably one of the chemicals behind America’s obesity epidemic.

Sweet, sweet world

Sugar-substitutes are a billion dollar industry in the US – and in India about US$25 million dollars. The US market is dominated by aspartame (from Nutrasweet; an ex-Monsanto company); acesulfame potassium or acesulfame K (pronounced AY-see-sul-fame-KAY) initially introduced by Hoechst, now Sanofi-Aventis. In the US, Johnson & Johnson promotes sucralose, the Tate & Lyle sweetener, 600 times sweeter than sugar but no calories – sold as Splenda. Cyclamates from Abbot are banned in US – and saccharin remains popular. A rather low-key production and promotion is happening to Neotame – which is 7500-13,000 times sweeter than sugar.

For the last 70 years, sugar and sugar substitutes have been big business and backed by powerful lobbies and politicians.

Can consumer who bombarded by slick advertising, oily messages from the media, reassurances by the State and the academia have the discretion to over-rule all this and make an informed decision.  |  Cartoonist(s): Brian Walker Greg Walker Mort Walker; Comic/Cartoon: Beetle Bailey Viewable; Date: 2012-03-29; Pub. Date:  2012-03-29 |  Click for image.

Can consumer who bombarded by slick advertising, oily messages from the media, reassurances by the State and the academia have the discretion to over-rule all this and make an informed decision. | Cartoonist(s): Brian Walker Greg Walker Mort Walker; Comic/Cartoon: Beetle Bailey Viewable; Date: 2012-03-29; Pub. Date: 2012-03-29 | Click for image.

Why are sweeteners such an important commodity?

History of sugar

For centuries, sugar from sugarcane was the best and cheapest source of sugar in the world. According to Indian oral history, sugarcane cultivation was pioneered some 4000-7000 years ago, by the Ikshvaakus – the family of Raghu Ramachandra. Ikshvaaku itself in Sanskrit means cultivators of sugarcane. Till 18th century, the Indian sub-continent was the only principal grower of sugarcane and producer of sugar.

Sugarcane remains, even after centuries of research by the West, the best source of sugar – accounting for close to 80% of world sugar production. It is crop that can be grown  continuously – unlike sugar beet, which is the distant second-best source of sugar. Sugar beet quickly creates soil fatigue – and crops collapse, unless the soil is given a sugar-beet ‘holiday’ for a season. Continuous cropping also triggers a ‘rhizome-madness’ where the tap-root, which contains the sugars, starts to sub-divide randomly, making any further processing difficult.

For the West, sugarcane presents two problems.

It grows in tropical climates and needs a lot of labour. Till slave labour was available, sugar cane was equivalent to oil in the 17th-19th century. Sugar-plantation colonies in the Caribbean like West Indies, Cuba, Haiti were prized for sugar production. Inspired by Haiti’s example, as each of these slave-plantations revolted, Western sources of sugar also dried up.

In the 20th century, major sugar-exporting countries were Brazil, Cuba, Australia and the Dominican Republic. But, at the slightest hint of international disturbances – like war, sugar stocks would vanish – and the war-mongering nations of the West were left dry.

Sugarcane to sugar-beet

The first attempts to diversify from sugarcane in modern history came from what is now Germany.

Andreas Sigismund Marggraf (3 March 1709 – 7 August 1782) a German chemist from Berlin isolated zinc in 1746. Not the first to do so, Marggraf is more famous as he detailed the process and establishing the basic theory of zinc extraction. Next year, in 1747, Marggraf devised a method using alcohol to extract sugar from beets.

Prussia (no Germany then) without colonies or the slave labour was dependent on imperial powers for sugar. It was left to Marggraf’s student Franz Karl Achard to breed and improve the White Silesian fodder beet to a sugar beet variety with higher sugar content in 1784. Achard’s work attracted the Prussian Emperor, Frederick William III, to help Achard to start the world’s first beet sugar factory in 1801, at Cunern in Silesia.

Sugar as weapon

The French loss of Haiti created a national shortage of sugar – and Achard’s work attracted Napoleon’s attention. Additionally, the British naval blockade during the Napoleonic wars, made sugar into a scarce commodity.

France readily moved to sugar-extraction from beet.

US Sweetner Usage - all sources.  |  Graphic source - pomona.edu  |  Click for image.

US Sweetner Usage – all sources. | Graphic source – pomona.edu | Click for image.


Haiti’s surviving sugar-production workers moved to America – giving rise to sugar production in America, using slave labour. This too was short-lived. Except for the last three decades, US has always been a significant importer of sugar – and a principal reason for high sugar prices globally.

However sugar production has been a source of friction with Haiti, Dominican Republic, – and most famously, in Cuba.

As a global super-power, America could not be seen as suffering shortages – especially of an item, like sugar. Sugar shortages were a Third-World feature. In the Cold War era, Soviet Union was an economy of shortages – and US was the land of plenty.

US sought to replace sugar imports which accounted for roughly 40% of US sugar consumption. Apart from increasing sugar production, sugar in the form of high-fructose corn syrup (HF-corn syrup) was promoted. Artificial sweeteners like saccharin, aspartame, sucralose, neotame, acesulfame potassium were permitted – and widely promoted.


Imported sugar is now down to less than 10% of total sugars – from nearly 40%. If artificial sweeteners are converted to sugar equivalents, the share of imported sugar will fall to probably less than 1%. HF-corn syrup, which was less than 10% of US sugar consumption, exploded to nearly 50% in a short 10-year period – from 1975-1985.

While all these ‘good’ things were happening, simultaneously another bad thing was happening.

America goes to fat. |  14 Mar 2004 – Obesity in America - Daily Political Cartoons by Mike Keefe, editorial cartoonist for the Denver Post.  |  Click for image.

America goes to fat. | 14 Mar 2004 – Obesity in America – Daily Political Cartoons by Mike Keefe, editorial cartoonist for the Denver Post. | Click for image.

Fat, Fatter, Fattest

Obesity assumed the proportions of a national epidemic.

One of the most comprehensive data sets available about Americans—how tall they are, when they last visited a dentist, what sort of cereal they eat for breakfast, whether they have to pee during the night, and, if so, how often—comes from a series of studies conducted by the federal Centers for Disease Control and Prevention. Participants are chosen at random, interviewed at length, and subjected to a battery of tests in special trailers that the C.D.C. hauls around the country. The studies, known as the National Health and Nutrition Examination Surveys, began during the Eisenhower Administration and have been carried out periodically ever since.

In the early nineteen-nineties, a researcher at the C.D.C. named Katherine Flegal was reviewing the results of the survey then under way when she came across figures that seemed incredible. According to the first National Health study, which was done in the early nineteen-sixties, 24.3 per cent of American adults were overweight—roughly defined as having a body-mass index greater than twenty-seven. (The metrics are slightly different for men and women; by the study’s definition, a woman who is five feet tall would count as overweight if she was more than a hundred and forty pounds, and a man who is six feet tall if he weighed more than two hundred and four pounds.)

By the time of the second survey, conducted in the early nineteen-seventies, the proportion of overweight adults had increased by three-quarters of a per cent, to twenty-five per cent, and, by the third survey, in the late seventies, it had edged up to 25.4 per cent. The results that Flegal found so surprising came from the fourth survey. During the nineteen-eighties, the American gut, instead of expanding very gradually, had ballooned: 33.3 per cent of adults now qualified as overweight.

Flegal began asking around at professional meetings. Had other researchers noticed a change in Americans’ waistlines? They had not. This left her feeling even more perplexed. She knew that errors could have sneaked into the data in a variety of ways, so she and her colleagues checked and rechecked the figures. There was no problem that they could identify. Finally, in 1994, they published their findings in the Journal of the American Medical Association. In just ten years, they showed, Americans had collectively gained more than a billion pounds. “If this was about tuberculosis, it would be called an epidemic,” another researcher wrote in an editorial accompanying the report.

During the next decade, Americans kept right on gaining. Men are now on average seventeen pounds heavier than they were in the late seventies, and for women that figure is even higher: nineteen pounds. The proportion of overweight children, age six to eleven, has more than doubled, while the proportion of overweight adolescents, age twelve to nineteen, has more than tripled. (According to the standards of the United States military, forty per cent of young women and twenty-five per cent of young men weigh too much to enlist.) As the average person became heavier, the very heavy became heavier still.(via Why are Americans fat? : The New Yorker).

In the same period that HF-corn syrup and artificial sweetener consumption was exploding, obesity in the US was also growing.

America was growing fat. In fact, lot of Americans were growing very fat.


Artificial sweeteners, far from diminishing the craving for sugar, seem to reinforce it. Americans ate about 24 lbs. of sugar substitute per person last year, nearly double what they did in 1980, yet sugar consumption rose about 25% in the same period. (via Department of Food Science: The Search for Sweet : The New Yorker).

Chemical or Character

Much like how female foeticide is being portrayed as a social moral failure of people, obesity also is being portrayed as an ethical failure.

The truth may be otherwise.

In its ability to pack on the body fat, high-fructose corn syrup appears to be worse than sugar. Research from Princeton University looked at how high-fructose corn syrup increases body fat.

It might seem that this much-maligned sweetener would have seen its day. Instead, high-fructose corn syrup continues to be a powerhouse, sweetening the big soft drinks and sports drinks. It adds a touch of sweetness to ketchup and provides stickiness to barbeque sauce. Americans suck back 60 pounds per person, on average, of high-fructose corn syrup each year.

Read: High-Fructose Corn Syrup Propaganda

High-Fructose Corn Syrup and Body Fat

A research team from Princeton has concluded that high-fructose corn syrup outdoes sugar when it comes to increasing body fat. [1] Researchers from the Princeton’s Neuroscience Institute and its Department of Psychology explored the connection between body fat and use of high-fructose corn syrup.

When they did experiments involving rats, they found that rats with high-fructose corn syrup available to them packed on more weight than rats that had sugar available.

Professor Bart Hoebel, leader of the Princeton team, discussed the results:

“Some people have claimed that high-fructose corn syrup is no different than other sweeteners when it comes to weight gain and obesity, but our results make it clear that this just isn’t true, at least under the conditions of our tests.”

He continues:

“When rats are drinking high-fructose corn syrup at levels well below those in soda pop, they’re becoming obese — every single one, across the board. Even when rats are fed a high-fat diet, you don’t see this; they don’t all gain extra weight.”

Learn about: Artificial Sweeteners, Not So Sweet

The link between high-fructose corn syrup and obesity has also been explored in studies conducted at research centers in locations such as Louisiana State University and the University of California. Writing in the American Journal of Clinical Nutrition, the Louisiana researchers note:

“The consumption of HFCS increased more than 1000% between 1970 and 1990, far exceeding the changes in intake of any other food or food group.” [2]

Researchers in Germany have also studied the high-fructose corn syrup and weight gain connection. Publishing their findings in the journal Obesity Research, researchers from the German Institute of Human Nutrition gave mice drinks containing either fructose, sucrose or artificial sweetener to see the impact on weight gain and metabolism. [4] They found that mice drinking the fructose containing beverage increased body fat, while the others did not.

Read: Increase Metabolism With the Fat Burning Hormone Leptin

via Jonathan Galland: Worse Than Sugar: What’s in Your Soda?.

Was this the entire story.

Not quite. Some other studies found that in preparation of HF-corn syrup, mercury-contaminated caustic soda was used to make this ‘natural sugar’.

Almost half of tested samples of commercial high-fructose corn syrup (HFCS) contained mercury, which was also found in nearly a third of 55 popular brand-name food and beverage products where HFCS is the first- or second-highest labeled ingredient, according to two new U.S. studies.

“Mercury is toxic in all its forms. Given how much high-fructose corn syrup is consumed by children, it could be a significant additional source of mercury never before considered. We are calling for immediate changes by industry and the [U.S. Food and Drug Administration] to help stop this avoidable mercury contamination of the food supply,” the Institute for Agriculture and Trade Policy’s Dr. David Wallinga, a co-author of both studies, said in a prepared statement.

IATP’s Ben Lilliston also told HealthDay that the Environmental Health findings were based on information gathered by the FDA in 2005. And the group’s own study, while not peer-reviewed, was based on products “bought off the shelf in the autumn of 2008,” Lilliston added. (via Study Finds High-Fructose Corn Syrup Contains Mercury).

Is the case against HF-corn syrup open-and-shut? Hardly. But when, producers defend with a lot of noise, and tricks, surely there is something fishy.

In 2008, the corn refiners launched a multi-million dollar advertising and marketing campaign designed to convince consumers that sugar and HFCS are identical. The message was “sugar is sugar” and the ads encouraged people to learn more at CornSugar.com and SweetSurprise.com.

The FDA was not happy with this and asked the refiners to modify statements that used the term corn sugar.

U.S. sugar farmers and refiners responded by filing a lawsuit which is still pending. (via Feds say high-fructose corn syrup is not sugar – Vitals).

How natural is HF-corn syrup? Not very, if this report is to be believed.

Massive print and television advertising campaigns by the Corn Refiners Association’s attempt to dispel the “myth” that HFCS is harmful and assert through the opinion of “medical and nutrition experts” that it is no different than cane sugar. It is a “natural” product that is a healthy part of our diet when used in moderation.

High fructose corn syrup is an industrial food product and far from “natural” or a naturally occurring substance. It is extracted from corn stalks through a process so secret that Archer Daniels Midland and Carghill would reportedly not allow the investigative journalist Michael Pollan to observe it (via Mark Hyman, MD: The Not-So-Sweet Truth About High Fructose Corn Syrup).

The rise of obesity coincides with increased use of artificial sweeteners and sugar-substitutes  |  Aug 24 2006 Steve Breen’s Cartoon; image source & courtesy - cagle.com  | Click for image.

The rise of obesity coincides with increased use of artificial sweeteners and sugar-substitutes | Aug 24 2006 Steve Breen’s Cartoon; image source & courtesy – cagle.com | Click for image.

Biology, Technology

How does this obesity story work?

There is some understanding – and much of empirical evidence.

The key to obesity seems to a complex interplay between insulin and leptin – two hormones that seem to manage metabolic activities.

On of the biggest marketing and PR tactics for man-made chemical sweeteners has been the claim that they help in the battle against obesity. Folks, they don’t. They never have and they never will.

The research and the epidemiologic data suggest the opposite is true, and that artificial sweeteners such as aspartame and neotame tend to lead to weight gain. There’s more to weight gain or weight loss than mere calorie intake.

One reason for aspartame and neotame’s potential to cause weight gain is because phenylalanine and aspartic acid – the two amino acids that make up 90 percent of aspartame and are also present in neotame — are known to rapidly stimulate the release of insulin and leptin; two hormones that are intricately involved with satiety and fat storage.

Insulin and leptin are also the primary hormones that regulate your metabolism.

So although you’re not ingesting calories in the form of sugar, aspartame and neotame can still raise your insulin and leptin levels. Elevated insulin and leptin levels, in turn, are two of the driving forces behind obesity, diabetes, and a number of our current chronic disease epidemics.

Over time, if your body is exposed to too much leptin, it will become resistant to it, just as your body can become resistant to insulin, and once that happens, your body can no longer “hear” the hormonal messages instructing your body to stop eating, burn fat, and maintain good sensitivity to sweet tastes in your taste buds.

What happens then?

You remain hungry; you crave sweets, and your body stores more fat.

Leptin-resistance also causes an increase in visceral fat, sending you on a vicious cycle of hunger, fat storage and an increased risk of heart disease, diabetes, metabolic syndrome and more. (via Neotame Receives FDA Approval But is Not Widely Used Yet).

|  The State and its minions have managed to deflect attention away from their faulty products and policies - and instead have pinned the blame on the consumers as being voracious gluttons  |  Cartoonist: Steve Kelley ; Pub. Date:  1999-01-01; souce and courtesy - cartoonistgroup.com |  Click for image.

| The State and its minions have managed to deflect attention away from their faulty products and policies – and instead have pinned the blame on the consumers as being voracious gluttons | Cartoonist: Steve Kelley ; Pub. Date: 1999-01-01; souce and courtesy – cartoonistgroup.com | Click for image.

What do studies show?


Run fast and far, from HF-corn syrup and artificial sweeteners.

In a series of experiments, scientists at Purdue University compared weight gain and eating habits in rats whose diets were supplemented with sweetened food containing either zero-calorie saccharin or sugar. Animals fed with artificially sweetened yogurt over a two-week period consumed more calories and gained more weight — mostly in the form of fat — than animals eating yogurt flavored with glucose, a natural, high-calorie sweetener.

In 2004, they reported that animals consuming saccharin-sweetened liquids and snacks tended to eat more than animals fed high-calorie, sweetened foods. Susan Swithers, a professor of psychological sciences at Purdue University and a co-author of the study (says) the net result is a more sluggish metabolism that stores, rather than burns, incoming excess calories.

Swithers says that the study does suggest artificial sweeteners somehow disrupt the body’s ability to regulate incoming calories. “It’s still a bit of a mystery why they are overeating, but we definitely have evidence that the animals getting artificially sweetened yogurt end up eating more calories than the ones getting calorically sweetened yogurt.” (via Can Sugar Substitutes Make You Fat? – TIME).

Calorie-free drinks and diet products seems have a vicious back-lash by the body’s metabolic system. Instead of getting fooled, it seems to simply increase craving, appetite – close to addiction.

They are the calorie-free way of having a sweet treat, but diet drinks could still make you fat, scientists have warned.

A ten-year study of almost 500 men and women linked low-calorie soft drinks with bulging waistlines – even when taken in small quantities.

Those who downed two or more diet fizzy drinks a day saw their waistbands expand at five times the rate of those who never touched the stuff, a diabetes conference heard.

The results were so dramatic that the American researchers advise that people ditch their diet drinks and use water to quench their thirst instead.

Those who cannot bear to give up the sugar rush may be better off drinking normal full-sugar fizzy drinks. (via Why guzzling a diet drink can make you fatter – they can trigger the appetite | Mail Online).

How the 'Establishment' mocks at us - and deflects attention from itself.  |  Cartoonist: Darrin Bell; Pub. Date: 2012-04-22; source & courtesy - cartoonistgroup.com |  Click for image.

How the ‘Establishment’ mocks at us – and deflects attention from itself. | Cartoonist: Darrin Bell; Pub. Date: 2012-04-22; source & courtesy – cartoonistgroup.com | Click for image.

Evolutionary mumbo-jumbo

Some ‘scientists’ have proposed that obesity is an evolutionary response in human beings in the last 20-40 years.

several million years of hominid evolution can’t explain why it is just in the past few decades that waistlines have expanded.

Eric Finkelstein is a health economist at a research institute in North Carolina. In “The Fattening of America” (Wiley; $26.95), written with Laurie Zuckerman, he argues that Americans started to put on pounds in the eighties because it made financial sense for them to do so. Relative to other goods and services, food has got cheaper in the past few decades, and fattening foods, in particular, have become a bargain. Between 1983 and 2005, the real cost of fats and oils declined by sixteen per cent. During the same period, the real cost of soft drinks dropped by more than twenty per cent.

“For most people, an ice cold Coca-Cola used to be a treat reserved for special occasions,” Finkelstein observes. Today, soft drinks account for about seven per cent of all the calories ingested in the United States, making them “the number one food consumed in the American diet.” If, instead of sweetened beverages, the average American drank water, Finkelstein calculates, he or she would weigh fifteen pounds less.

The correlation between cost and consumption is pretty compelling; as Finkelstein notes, there’s no more basic tenet of economics than that price matters. But, like evolution, economics alone doesn’t seem adequate to the obesity problem. If it’s cheap to consume too many calories’ worth of ice cream or Coca-Cola, it’s even cheaper to consume fewer.

In “The End of Overeating” (Rodale; $25.95), David A. Kessler, a former commissioner of the Food and Drug Administration, takes a somewhat darker view of the situation. It’s not that sweet and oily foods have become less expensive; it’s that they’ve been reëngineered while we weren’t looking. Kessler spends a lot of time meeting with (often anonymous) consultants who describe how they are trying to fashion products that offer what’s become known in the food industry as “eatertainment.” Fat, sugar, and salt turn out to be the crucial elements in this quest: different “eatertaining” items mix these ingredients in different but invariably highly caloric combinations. A food scientist for Frito-Lay relates how the company is seeking to create “a lot of fun in your mouth” with products like Nacho Cheese Doritos, which meld “three different cheese notes” with lots of salt and oil. Another product-development expert talks about how she is trying to “unlock the code of craveability,” and a third about the effort to “cram as much hedonics as you can in one dish.”

Kessler invents his own term—“conditioned hypereating”—to describe how people respond to these laboratory-designed concoctions. Foods like Cinnabons and Starbucks’ Strawberries & Crème Frappuccinos are, he maintains, like drugs: “Conditioned hypereating works the same way as other ‘stimulus response’ disorders in which reward is involved, such as compulsive gambling and substance abuse.” For Kessler, the analogy is not merely rhetorical: research on rats, he maintains, proves that the animals’ brains react to sweet, fatty foods the same way that addicts’ respond to cocaine. A reformed overeater himself—“I have owned suits in every size,” he writes—Kessler advises his readers to eschew dieting in favor of a program that he calls Food Rehab. The principles of Food Rehab owe a lot to those of drug rehab, except that it is not, as Kessler acknowledges, advisable to swear off eating altogether. “The substitute for rewarding food is often other rewarding food,” he writes, though what could compensate for the loss of Nacho Cheese Doritos he never really explains. (via Why are Americans fat? : The New Yorker).

So, what is emerging from the jigsaw puzzle is public-policy actions by the State and Big Business.

Between the State and Big Business, they control and manage our food, appetites, nutrition, diseases, medicine – and information about all this. Media and academia also owned, funded and controlled by the State and Big Business lets us know little – only when forced, in dribs and drabs.

New York has decided that it must legally force food-vendors (like Coke) etc., to reduce the size of each helping.  |  Cartoonist: Gary Varvel; Pub. Date: 2012-06-06; source & courtesy - cartoonistgroup.com  |  Click for image.

New York has decided that it must legally force food-vendors (like Coke) etc., to reduce the size of each helping. | Cartoonist: Gary Varvel; Pub. Date: 2012-06-06; source & courtesy – cartoonistgroup.com | Click for image.

In the early nineteen-sixties, a man named David Wallerstein was running a chain of movie theatres in the Midwest and wondering how to boost popcorn sales. Wallerstein had already tried matinée pricing and two-for-one specials, but to no avail. According to Greg Critser, the author of “Fat Land” (2003), one night the answer came to him: jumbo-sized boxes. Once Wallerstein introduced the bigger boxes, popcorn sales at his theatres soared, and so did those of another high-margin item, soda.

A decade later, Wallerstein had retired from the movie business and was serving on McDonald’s board of directors when the chain confronted a similar problem. Customers were purchasing a burger and perhaps a soft drink or a bag of fries, and then leaving. How could they be persuaded to buy more? Wallerstein’s suggestion—a bigger bag of fries—was greeted skeptically by the company’s founder, Ray Kroc. Kroc pointed out that if people wanted more fries they could always order a second bag.

“But Ray,” Wallerstein is reputed to have said, “they don’t want to eat two bags—they don’t want to look like a glutton.” Eventually, Kroc let himself be convinced; the rest, as they say, is supersizing.

The elasticity of the human appetite is the subject of Brian Wansink’s “Mindless Eating” (2006). Wansink is the director of Cornell University’s Food and Brand Lab, and he has performed all sorts of experiments to test how much people will eat under varying circumstances. These have convinced him that people are—to put it politely—rather dim. They have no idea how much they want to eat or, once they have eaten, how much they’ve consumed. Instead, they rely on external cues, like portion size, to tell them when to stop. The result is that as French-fry bags get bigger, so, too, do French-fry eaters.

Consider the movie-matinée experiment. Some years ago, Wansink and his graduate students handed out buckets of popcorn to Saturday-afternoon filmgoers in Chicago. The popcorn had been prepared almost a week earlier, and then allowed to become hopelessly, squeakily stale. Some patrons got medium-sized buckets of stale popcorn and some got large ones. (A few, forgetting that the snack had been free, demanded their money back.) After the film, Wansink weighed the remaining kernels. He found that people who’d been given bigger buckets had eaten, on average, fifty-three per cent more.

In another experiment, Wansink invited participants to cook dinner for themselves with ingredients that he provided. One group got big boxes of pasta and big bottles of sauce, a second smaller boxes and smaller bottles. The first group prepared twenty-three per cent more, and downed it all. In yet another experiment, Wansink rigged up bowls that could be refilled, via a hidden tube. When he served soup out of the trick bowls, people, he writes, “ate and ate and ate.” On average, they consumed seventy-three per cent more than those who were served from regular bowls. “Give them a lot and they eat a lot,” he writes. (via Why are Americans fat? : The New Yorker).

This super-sized servings are having an effect. We have a curious situation in New York.

First the State and its cohorts (Big Business, media and academia) create a problem – and then they display their intent to solve – making the problem, even more complex.

New York is trying to take a stand. The city’s mayor, Michael Bloomberg, says he’ll seek to limit sugary soft drinks sold at restaurants, movie theaters and sports stadiums to no more than 16 ounces per cup.

A 16-ounce Coke contains nearly 200 calories, or about 10% of your entire recommended daily intake.

Beverage companies say the New York plan is nanny-state regulation run amok — and to some degree they’re right. The problem is that leaving people to their own devices is turning us into a nation of porkers. Bloomberg has concluded that to protect the public welfare, we have to save us from ourselves. (via David Lazarus: FDA strikes a sour note for corn sweetener makers – latimes.com).

Industrial food inputs are sold to Big Food producers who 'manage' Big Retail to give us a choice of unhealthy food in blue, green, yellow colours in peach, vanilla and chocolate flavors. We the consumer have choice  |  Jeff Koterba’s Cartoon  on Jun  20  2006; source and courtesy - cagle.com  |  Click for image.

Industrial food inputs are sold to Big Food producers who ‘manage’ Big Retail to give us a choice of unhealthy food in blue, green, yellow colours in peach, vanilla and chocolate flavors. We the consumer have choice | Jeff Koterba’s Cartoon on Jun 20 2006; source and courtesy – cagle.com | Click for image.

Global, local – same difference

Are these problems isolated and limited to America. Unfortunately not.

“Globesity” (Earthscan; $34.95) takes an international approach to the problem of weight gain. The book’s authors—Francis Delpeuch, Bernard Maire, Emmanuel Monnier, and Michelle Holdsworth—observe that, while Americans were the first to fatten up, they no longer lead the pack. “Like it or not, we have no choice but to face up to the numbers: current data reveal that in Cyprus, the Czech Republic, Finland, Germany, Greece, Malta, and Slovakia, the proportion of overweight adults is actually higher than in the U.S.,” they write.

In Asia, Africa, and South America, too, obesity is on the rise. Although nearly a billion of the world’s most impoverished citizens still suffer from too few calories, Delpeuch and his colleagues note that it’s those living just above the poverty level who appear to be gaining weight most rapidly. It may seem to go without saying that being fat is better than starving, but even this truism, the authors argue, is no longer entirely true: in the new world order, it is possible to be overweight and malnourished at the same time.

“People on modest incomes suddenly find a cheap, calorie-packed diet within their grasp and make the most of it as soon as they can,” they write. “Unfortunately this means sacrificing many elements that are nutritionally more valuable.” Type 2 diabetes, coronary disease, hypertension, various kinds of cancers—including colorectal and endometrial—gallstones, and osteoarthritis are just some of the conditions that have been linked to excess weight.

But, as anyone who has ever gone on a diet knows, weight that was easy to gain is hard to lose. If anything, this is even more true on a societal level. Those politicians who could take the recommended actions tend, the authors of “Globesity” point out, to be in thrall to the very interest groups that are profiting from the status quo. (It’s probably no coincidence that, in a period when the rest of the world has come to look more like Americans, U.S. corporations have been making significant investments—some fifty-five billion dollars a year—in food-processing and distribution facilities abroad.) “To conquer obesity will thus require a complete new awareness, the re-education of the great mass of consumers, and this seems a distant prospect,” they write. (via Why are Americans fat? : The New Yorker).

Tracking price changes in consumer edibles on a gold index reveals interesting correlations.  Graphic by 2ndlook. Price data is based on shopping memory og 2ndlook.

Tracking price changes in consumer edibles on a gold index reveals interesting correlations. Graphic by 2ndlook. Price data is based on shopping memory og 2ndlook.

India has emerged as the diabetic capital of the world. Though Indians have been sugarcane users for centuries, why have we suddenly become so prone to diabetes.

Two interesting observations.

When sugar was made at an artisan level – in each village, in many houses, crystalline sugar was discarded.

Only raw sugar was used – without refinement, which has no such side-effects.

Secondly, if we see the relative price of selected edibles in the last 50 years, sugar has shown the maximum decline. By nearly 1000%. Along with skimmed milk. Probably skimmed milk consumption has not taken off as much as sugar has, it is probably because Indians prefer full-cream milk.

But sugar, which was expensive and limited just about 50 years ago, has suddenly become the cheapest, in relative terms. Is this sudden dip in prices, led to a surge in consumption of sugar, that has created a diabetic epidemic in India. The attempts by the Indian State to keep sugar prices low, paid off in the way of increased diabetics? Should sugar prices be allowed to rise – the moment sugar is decontrolled sand sugar exports are allowed.

The Powerful Few control our food, medicine, home, work. We can change this  |  Cartoonist: Joel Pett Pub. Date: 2002-03-20; source & courtesy - cartoonistgroup.com |  Click for image.

The Powerful Few control our food, medicine, home, work. We can change this | Cartoonist: Joel Pett Pub. Date: 2002-03-20; source & courtesy – cartoonistgroup.com | Click for image.

Back in the USA.

Is the government really helping people to slim down and avoid foods that pack on pounds and invite the risk of heart disease? High-saturated-fat foods like cheese? Not according to a New York Times expose in 2010. A USDA group with 162 employees called Dairy Management, mostly funded by farmers, is shamelessly committed to getting people to double and triple their cheese intake to replace profits from falling milk sales.

According to the Times, Dairy Management has supported Pizza Hut, Taco Bell, Burger King, Wendy’s and Domino’s in “cheesifying” their menu options, putting dairy farmers’ profits before consumer health. “If every pizza included one more ounce of cheese, we would sell an additional 250 million pounds of cheese annually,” rhapsodized the Dairy Management chief executive in a trade publication. Dairy Management received $5.3 million from the USDA during one year, for an overseas dairy campaign, which almost equals the total $6.5 million budget of USDA’s Center for Nutrition Policy and Promotion. That’s the group that tells people not to eat high fat milk and cheese! (via 8 Surprising Things That May Be Making Americans Fat | Food | AlterNet).

Farm subsidies, ‘well-intentioned’ with complex justifications have ballooned to US$100 billion across the Western world. What is that these subsidies are achieving?

Are farm subsidies making us fat?

Billions in taxpayer dollars are going to support high fructose corn syrup and three other common food additives used in junk food, according to the report, “Apples to Twinkies: Comparing Federal Subsidies of Fresh Produce and Junk Food,” makes the case that federal farm subsidies are helping feed the nation’s obesity epidemic.

The research shows that from 1995 to 2010, $16.9 billion in federal subsidies went to producers and others in the business of corn syrup, high fructose corn syrup, corn starch and soy oils.

Among the findings: Taxpayers in the San Francisco area spend $2,762,295 each year in junk food subsidies, but only $41,950 each year on apple subsidies. In Los Angeles, taxpayers spent $13,010,286 in junk food subsidies, and $201,291 on apple subsidies, according to the report. (via Junk Food | U.S. spending billions to subsidize junk food, study says – Los Angeles Times).

Not a good feeling, eh?

China’s ‘naked’ officials

Posted in China, Current Affairs, Media, politics, Propaganda by Anuraag Sanghi on June 8, 2012

The Chinese media ‘bares’ its soul on ‘naked’ officials. Western media triumphalist. Reality is the victim.

Cartoon rendition of China's naked official  |  Cartoon on July 26, 2010 on the 'naked' officials phenomenon in chinahush.com; artist credit not available at source  |  Click for image.

Cartoon rendition of China’s naked official | Cartoon on July 26, 2010 on the ‘naked’ officials phenomenon in chinahush.com; artist credit not available at source | Click for image.

Indian Tales

Indian media usually limits China coverage to three themes.

Progress Theme: China is progressing; has become a world-player; will it replace USA as the economic and military super-power.

Threat To India: China’s threat to India; The China-Pakistan axis which will ‘finish’ India.

Ape The Chinese: What India must learn from China; How India must be more like China.

Nearly all of Indian media coverage can be slotted into these three categories.

Are the Chinese also on the same page? Especially ‘ordinary’ Chinese?

Stories from China

The Chinese?

They, but have, different stories.

Sex: Non-existent sex lives of Many versus overactive sex-lives of the few. What must the State do about the non-existent sex lives of many Chinese.

Executions: The unresponsive State wishes to show itself as sensitive to public-opinion by pandering to public demand for killings and punishments of ‘corrupt’ officials.

Western media is equally busy:

Predicting: The down fall of China;

Drooling: Over ‘horror’ stories from China; to be fair, Western media drools over horror stories back at home too.

World Domination: If it is not these two themes, then China is taking over the world.

If US leaders do not peddle the China-threat story, how will Obama win an election?

Birathers – take a 2ndlook!

‘Naked’ Officials

Not what you think.

Over the last 2 years, an interesting story has built up in China – the story of 裸体官员; (pinyin) luǒtǐ guānyuán, often shortened to 裸官 (pinyin) luǒ guān. ‘Naked’ officials.

What or who are these ‘naked’ officials? The English language edition of People’s Daily Online, in an article some time back, defined these bureaucrats and officials as,

rogues in government have become the latest target that commentators, and the public, love to hate. With a wife or husband and children overseas, little money in the bank here and no home of their own, the often high-flying thieves of the public purse have earned the euphemistic nickname “naked official.”

Even though this topic has been active in media and the Chinese internet, recent incidents have revived interest and coverage even in the Western media. From Britain, The Economist writes

THE phrase “naked official”, or luo guan, was coined in 2008 by a bureaucrat and blogger in Anhui province, Zhou Peng’an, to describe officials who have moved their family abroad, often taking assets with them. Once there, they are beyond the clutches of the Communist Party in case anything, such as a corruption investigation, should befall the official, who is left back at home alone (hence “naked”). Mr Zhou says the issue has created a crisis of trust within the party, as officials lecture subordinates on patriotism and incorruptibility, but send their own families abroad.(via Moving the family abroad: Hedging their bets | The Economist).

The naked official (wearing the traditional hat of an official) is putting "public funds" into a bag labeled "corruption." The official is in China and his wife and daughter are abroad.  |  Image source & credit - chinadigitaltimes.net  |  Click for image.

The naked official (wearing the traditional hat of an official) is putting “public funds” into a bag labeled “corruption.” The official is in China and his wife and daughter are abroad. | Image source & credit – chinadigitaltimes.net | Click for image.

How deep and how wide is this problem?

Zhou Peng’an, a member of China Democratic League, one of China’s Non-Communist Parties and a popular blogger, asked “How many corrupt officials are naked?” in July 2008.

The answer to Zhou’s question varies widely.

Lin Zhe, a well-known anti-corruption expert, speaking angrily at last year’s legislative session, estimated that almost 1.2 million officials went naked between 1995 and 2005.

A report by People’s Bank of China in June last year suggested corrupt officials had smuggled an estimated 800 billion yuan ($124 billion) out of China between 1995 and 2008. The bank said research by the Chinese Academy of Social Sciences indicated that between 16,000 to 18,000 government employees, including police officers, judicial officers, senior managers of government institutions and State-owned companies, had fled abroad during that period.

The bank’s report, which was posted on its website but has since been taken off line, was widely reported in the media. (via Naked and corrupt – People’s Daily Online).

The Chinese Government is unsure about the methodology of an earlier report – now withdrawn. Official media has no hesitation in covering this topic – and only rampant speculation, rumor-mongering is being controlled.

The People’s Bank of China last year inadvertently made public a confidential study stating that 800 billion Chinese yuan ($126 billion at today’s exchange rate) had been siphoned overseas by thousands of officials in the government and state-owned companies from the mid-1990s until 2008.

Another report by the Washington-based watchdog Global Financial Integrity, which tracked illicit outflow of money by all people, not just officials, found China led the world with $2.7 trillion (five times as much as runner-up Mexico) illegally taken out of the country from 2000 to 2009. (via China steps up efforts to keep officials from leaving country – latimes.com).

So, what events have revived interest in these ‘naked’ officials?

One man is all it takes

The scene – US Consulate at Chengdu.

On the evening of Feb. 6, a vice mayor of a major Chinese city who had a reputation as a crime fighter turned up at the American Consulate in Chengdu in an agitated state, telling a tale of corruption and murder that has ensnared the Obama administration in a scandal it wants nothing to do with.

The official, Wang Lijun, sought asylum, fearing for his life even as Chinese security forces quickly surrounded the building and asked the American diplomats inside to turn him over.

Instead, after a frantic debate that reached the White House, Mr. Wang stayed until he could arrange for an official from a Beijing ministry to come 36 hours later and escort him past the local security cordon. The authorities from Beijing took him into custody, and he is now under investigation for divulging internal Chinese affairs to the Americans. If charged with and convicted of treason, he could face a death sentence.

The information Mr. Wang possessed involved Bo Xilai, who was the Communist Party chief in Chongqing until last month and Mr. Wang’s onetime patron before a falling-out led Mr. Wang to seek refuge in the consulate (via Frenzied Hours for U.S. on Fate of a China Insider – NYTimes.com).

With Wang Lijun in the US Consulate, the story took a life of its own. It could no longer be suppressed. Chinese discussion forums, chat rooms, message boards exploded. Wang Lijun patron-in-Chief, Bo Xilai was put out in the cold. His wife was arrested.

Was this entire incident engineered?

at the Communist Party’s 18th five-yearly Congress in the autumn, Hu and other leaders will retire, forced out by age limits, and up to this week the seven vacancies were being contested by up to nine current Politburo members, including Bo. (via INSIGHT – With Bo Xilai down, nine leaders who may soon run China | Reuters).

One American ‘think-tank’ seems to be confirming that this entire fracas was engineered. Was this an intricate power-struggle within the Chinese communist party? A faction feud? Was it a case of Dengist-Reformers taking down a Mao-Loyalist?

This is a particularly delicate time in Chinese politics. A new-generation of leaders are expected to take over from retiring leaders in November this year.

Zhou Yongkang, who turns 70 this year, will step down from the standing committee along with Hu and Wen after the 18th National Congress to make way for Xi Jinping, Li Keqiang and the younger generation of party leaders. The Chinese government requires politicians 68 and older to step down during leadership changes. (via Politburo Standing Committee to be reduced to seven: Boxun|Politics|News|WantChinaTimes.com).

Whatever, it was,

The issue of official corruption has risen to the top of the government agenda this year with the ouster in March of Politburo member and Chongqing party secretary Bo Xilai. Among the myriad accusations swirling around Bo is that his wife moved the couple’s money out of the country through trading companies set up abroad with an Englishman, Neil Heywood, whom she is accused of killing. In addition, the couple’s son, Bo Guagua, was sent overseas to school, first to Harrow, then Oxford and more recently Harvard’s Kennedy School, where he graduated last month.

The practice has become so endemic in China’s officialdom that the Communist Party’s top disciplinary body is enacting an “anti-flight” program to keep people in place. The Central Commission for Discipline Inspection last month reviewed ways to keep people from moving abroad, including confiscating passports and registering family members living overseas as a way to monitor who might be kept out of high positions.

Chinese prosecutors say 18,487 officials, including executives from state-owned companies, have been caught during the last 12 years while allegedly trying to flee overseas with ill-gotten gains, according to this week’s issue of China Economic Weekly. The magazine described the typical “naked official” as a man in his 50s who was approaching retirement and had accumulated at least $13 million. (via China steps up efforts to keep officials from leaving country – latimes.com).

Bo Xilai, son of Bo Yibo, one of the Eight Elders of the Communist Party of China, was already a member of the 25-member Politburo (2007-2012). The 25-member Politburo is itself drawn from the 150-member Central Committee chosen by the party congress.

One of the “princelings” from Chinese politics, Bo Xilai was widely expected to be elevated up from the 25-member Politburo to the 9-member Politburo Standing Committee in November this year.

On Jan. 16, Bo Xilai, who then still ran the southwestern Chinese city of Chongqing, has been ousted first from his position as Chongqing party secretary, then his seats on the Communist Party’s Politburo and Central Committee. His wife Gu Kailai has been arrested for murder in connection with the death of Neil Heywood, a British businessman with a long connection to the Bo family who died in Chongqing last fall.

A former Bo deputy, ex-Chongqing police chief Wang Lijun, revealed his suspicions over Heywood’s death in a visit to a U.S. consulate in February before being taken into custody by state security officers.

Bo’s purge has been labeled the biggest leadership upheaval in China since soldiers crushed the Tiananmen movement on June 4, 1989. But that comparison is more an expression of how tightly the party has managed politics over the past two decades than the potential for similar upheaval today.

Bo had been a front runner for elevation to the Politburo Standing Committee, the top ruling body, and his downfall creates a significant political vacuum others are vying to fill. But officials of his status, if not outsize personality, have been toppled before, including Beijing party secretary Chen Xitong, who was ousted in an anticorruption campaign in 1995, and Shanghai party secretary Chen Liangyu, who was dismissed in 2006 and later sentenced to 18 years in prison for abusing the city’s pension fund.

Unlike those of disgraced Chen Xitong and Chen Liangyu, Bo’s case involves a murder allegation. The other major difference between Bo and his fellow fallen officials is the way he cultivated a public following through his popular campaign against organized crime — which many critics have said trampled the rule of law — efforts to revive Mao-era “red culture” and an emphasis on social benefits for poorer Chongqing residents. His popularity makes his removal that much more complicated.

Likewise, the Chinese military, with which Bo had cultivated close ties, has been ordering anticorruption study sessions that emphasize the disgraced Chongqing leader’s case, the People’s Liberation Army Daily reported on Friday. But while those public messages indicate a wariness of Bo’s residual influence, there is little sign that his removal will cause waves of the magnitude felt in 1989. “This was a major takedown of an extraordinary figure by the party apparatus,” says Russell Leigh Moses, a Beijing-based political analyst. “It’s thus far been done with little political fallout and very little, if any, reaction in the streets.

Most every day sees a new revelation in Bo’s case. Reuters reported on Monday that Heywood had been poisoned in a hilltop guesthouse the news agency identified as the Nanshan Lijing Holiday Hotel after threatening to reveal Gu’s plans to send money abroad. And U.S. officials, who had been silent over Wang’s visit to the U.S. consulate in Chengdu, a city about 200 miles (320 km) from Chongqing, have finally begun to talk, telling the New York Times on Tuesday that Wang entered the consulate “telling a tale of corruption and murder.”

Those developments have been widely discussed online in China, despite efforts to block posts containing sensitive information and rumors, including a three-day shutdown of comments on Chinese microblogs. Those conversations will be uncomfortable for China’s leaders, particularly as they consider how someone like Bo came so close to the country’s highest echelon of power. But they’re far happier having people talking online than taking to the streets. (via How Bo Xilai Will Affect China’s Leadership Transition | Global Spin | TIME.com).

After all this action, the Chinese leadership is left with options on how to close the Bo Xilai chapter.

China’s leadership faces a knotty choice in how to finish off fallen politician Bo Xilai without further damaging the Communist Party’s image: Purge him the old-fashioned way — in secret — or run him through a public trial. The challenge is to prevent lurid allegations that Bo abused his power and that his wife was involved in the murder of a British businessman from upsetting a once-a-decade leadership transition just months away.

After months of investigation and high-level deliberations, leaders believe a trial will have more public legitimacy. While the unproven allegations against Bo range from illegal wiretapping to illicit sexual liaisons, the ones that likely reflect worst on the party involve graft and flouting basic laws.

Many Chinese see those vices as endemic among their leaders, despite repeated avowals by the party to end them. His popularity makes Bo’s case particularly tricky and bolsters the chance for a trial, analysts said. Both Bo’s sympathizers among communist conservatives and their more liberal rivals are demanding one.

State media raised expectations for a trial in the wake of Bo’s ouster by repeatedly declaring that no one is above the law and that the legal process must run its course. (via China Mulls Public Trial for Ousted Politico – TIME).

Whatcha gonna do when they come for you?
Thanks Bob Marley for this line.

With an impatient populace breathing down its back, the Chinese Government had to be seen as taking some action.

The central government and the General Office of the Central Committee of the Communist Party of China issued a regulation last May calling on “naked officials” to draw up reports about their emigrated family members in 60 days or be prepared for punishment.

“We have to be more aggressive and active in managing naked officials,” Zhao Xiaoqing, a press officer of Beijing Municipal People’s Procuratorate, told the official media. The Central Commission for Discipline Inspection of the Communist Party of China directed the procuratorate and other related authorities to participate in the campaign, he said. (via China’s ‘naked officials’ come under closer scrutiny – Times Of India).

The Chinese Government publicized a series of actions across China, to control the situation – and assuage public anger.

The Communist Party of China’s (CPC) disciplinary body last week announced its latest victory in the fight against corruption, declaring that efforts to tighten the net on “naked” officials – or those who remain in the country while their spouses and children live abroad – had yielded success.

“A number of officials who have attempted to run away have been stopped, while some officials already overseas have been brought to justice,” the Ministry of Supervision declared in a statement posted on its website.

Authorities have implemented various measures including monitoring the whereabouts of officials’ family members, scrutinizing their travel, controlling their passports and investigating the source of large sums of money transferred overseas.

Authorities in Guangdong, another pilot province, have also kept a close eye on officials’ travel to and from the Chinese mainland.

Liu Xiaohua, Party head of Zhanjiang, Guangdong, revealed in January that the planned promotion of an official was scrapped after it was revealed he visited Hong Kong, where his family had moved to and settled, more than 20 times within a year.

In many local governments, officials’ passports are kept by administrators and only given out after strict personal assessment or for formal overseas tours.

Nevertheless, some corrupt officials manage to fly under the radar. Liu Defu, a former bureau chief in Guangzhou, filed for 20 days’ leave in 2010 and went to the US with his passport on a “personal” trip. He never returned and today lives with his family, who emigrated to the US years earlier.

One of China’s most infamous “naked” officials is Pang Jiayu, the former mayor of Baoji in Northwest China’s Shaanxi Province. Pang’s wife and son emigrated to Canada in 2002, but before the corrupt ex-mayor could join them he was arrested and sentenced in 2008 to a 12-year jail term for bribery and dereliction of duty. His family is reportedly still living a life of luxury in Canada.

The flagship Party magazine, Qiushi, or “Seeking Truth,” will publish an article today by He Guoqiang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee.

He wrote in the article that China will take further steps to combat corruption and build a clean government in order to benefit people and gain people’s trust. (via Anti-corruption measures clamp down on ‘naked’ officials eyeing an escape).

Like oil on water

In much of this reportage in the Chinese and Western media there was much that was superficial.

All this raises many doubts and some questions?

Can and should the State have restrictions on education abroad? Limitations on travel abroad? Or a long-term stay abroad?

Some of these reports talk of life of luxury abroad. What luxuries can you get in Canada or USA, which are not available in China?

Does the defection of these few thousand corrupt bureaucrats, signify a loss of faith in the future of China? Like some Western media reports suggest. What could be so deeply wrong with China that makes some of these bureaucrats plan this defection so many years in advance?

The fact that people send their spouses and children abroad does not necessarily mean they are corrupt — many Chinese prefer a foreign education, for example — but when an entire family leaves, authorities presume that an official does not envision a future in China. Chinese officials, including executives of state-owned companies, often have two passports, one for business and the other for personal travel.

“It’s very hard for the government to control this. They might hold your official passport, but most people will have a private passport as well and they can slip out of the country with that,” said He.

For every new restriction implemented, people come up with loopholes. The fake divorce, for example.

“The Chinese Communist Party is very strict about officials and their families having green cards or foreign passports. If they find out, that’s the end of your political career, but people will do a divorce on paper and then remarry,” said Ding Xueliang, a Hong Kong-based political scientist. (via China steps up efforts to keep officials from leaving country – latimes.com).

Cartoon depicting the capture of a fleeing naked official  |  Image courtesy & source - chinadigitaltimes.net  |  Click for image.

Cartoon depicting the capture of a fleeing naked official | Image courtesy & source – chinadigitaltimes.net | Click for image.

You do not have to be corrupt to be “naked”, however. Sending your family abroad is simply a state of maximum readiness. It does not suggest huge confidence in a stable Chinese future. Many wealthy businessmen have also been preparing exit strategies. One of the most common legitimate routes involves immigrant-investor programmes in America, Canada or Hong Kong, typically requiring an investment of up to $1m. Chinese nationals have rushed to apply for these. Three-quarters of applicants for America’s programme last year were Chinese.

The less well-heeled obtain passports from other countries—in the South Pacific, Africa or Latin America—at more affordable prices (as low as $20,000). Li Chengyan, director of the Centre for Anti-Corruption Studies at Peking University, says countries that do not have an extradition treaty with China are particularly popular among corrupt officials. One crooked former governor of Yunnan province was found to have five foreign passports. “No need to wait for a visa if they have to run,” says Mr Li. (via Moving the family abroad: Hedging their bets | The Economist).

What exactly are they fleeing from?

Looking at how some of these ‘naked’ officials are rushing to the South Pacific, Africa or Latin America, it is no indictment of future of China.

But it probably, is an indictment of the judicial system in China.

Is it China’s liberal use of the death sentence, which has created the disquiet. While 30-years of death sentences have not reduced corruption, it has certainly triggered the search for an escape from this random kind of justice.

Naked and in plain sight.

Story so far

There are many other elements to the Chinese puzzle.

Earlier posts examined the Chinese economy without the support of a cheap yuan that boosted exports for the last nearly twenty years. Will China go the Japan way? The mysterious manner in which the Buddhist monk has disappeared from Chinese movies is an ominous feature. Especially when the Buddhist monk has been replaced by gangsters.

Tibetan protests in the form of self-immolation by priests and nuns have unnerved the Chinese administration. Even in the past, in the 1965 and the 1971 India Pakistan Wars, China had maintained a distant attitude towards Pakistan. Indian Navy in the South China Sea, in alliance with Vietnam, is a significant counter-measure to posturing in the Indian North East by China.

China’s liberal use of the death sentence, has created disquiet in its bureaucracy – giving rise to the ‘naked’ officials. While 30-years of death sentences have not reduced corruption, it has certainly triggered the search for an escape from this random kind of justice. China’s implementation of the population dogma peddled by the West has emptied the lives of Chinese – created masses of people who have solitary sex.

2ndlook – Catching on and catching up on the emerging China picture.

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