Sebtember 7/14.

1998

The Nation since 1865.

3
VOLUME
267, NUMBER
7

BOOKS & T H E ARTS

29 BTJRCHILL: Diana
CAMPBELL: Diana Princess of Wales
MERCK M e r Diana
ARTICLES
Maria Margaronis
11 BEYOND MONICA THE FUTURE OF
32
FuHRMAN:
Murder in Greenwich
CLINTONS PAST
DUMAS:
Greentown
EDITORIALS
Robert B. Reich, Rogers M. Smith,
Jeanne Schinto
DIRTY POLITICS
Barbara Ehrenreich,Ronald Steel,
35 RABBAN: Free Speech in
Roger V?lkins,Jonathan Schell,
THE BULLS SOUR 16
Its Forgotten Years
,
Sean Wilentz
Doug Henwood
Edward
de
Grazia
TERRORISM AND RETALIATION
18 VIRTUAL DISENFRANCHISEMENT
38 NICHOLSON: The Tribes of Palos Verdes
Minority Congressional districts are
Ian Williams
Nu: Tapping the Source
becoming casualties of the courts.
WHY CALL IT REFORM?
The Dogs of Winter
Barry
Yeoman
Stephen l? Cohen
THE SURFERS JOURNAL
THE
GAY
CARD
21
THE
RIGHT
PLAYS
TROUBLE FOR SUHARTOS PAL
KAMPION Stoked
As the attack heats up, so does debate
Robert Bryce
FARBER: The Face of the Deep
over a planned march on Washington.
Mindy
Pennybacker
COLUMNS
Doug Ireland
41
MUSIC:
Bach for the Masses
THE FINAL DEFENSE
24 WITH ECONOMIC
Edward
K
Said
Calviii Trillin
INEQUALITY FOR ALL
In the absence of policies insuring fairness, 43 FILMS: The Eel The Chambermaid
BEATTHEDEVJL
on the Titanic Snake Eyes
its soon every man for himself.
Love and Distraction
Alexander Cockburn
James K. Galbraith
Stuart Klawans
Cover Design: Scott Stowell/Operi; illustrations by Eugene Mihaesco, Lars Leetaru

EXCHANGE
2 SINGININTHECHAIN
Michael Lacey, Eric Dexheimer,
John Mecklin, Nathan Landau,
Jon Wiener,Jon Tmlin, Eric Scigliano,
L.D. Chuknian, Eric Bates
3
5

5
6

6
8

10 DIARY OF A MAD LAW PROFESSOR

Passion and Punctilio
Patrkia 1 Williams

Dirty Politics

he outpouring of pious denunciation in the days following

President Clintons August 17 grand jury testimony-as if
the fact that he lied about Monica Lewinslcy in January could
possibly shock anyone outside his closest, most denial-bound
circles-only underscored the increasingly surreal quality of
his confi-ontation with independent counsel Kenneth Stan. Networks devoted hours of live TV coverage to Clintons closed-door
testimony despite the fact that there was no news to report and
indeed no image to show; Starrs prosecutors, according to the
New YOrkTimes,now charge that the Presidentdressed to obstruct
justice by wearing a Lewinslcy gift tie at a press conference; the
President in one breath took complete responsibility for all my
actions,both public and private and in the next moment fell back
on the old evasive formulation that his Paula Jones testimony,
though deceptive, was legally accurate.
Clintons testimony will probably stand as the summary moment of this presidency: when all the swirling destructiveforces
without and within the White House-around and within the President himself--converged. Among those forces are deep, sometimes generational,conflicts about sexuality and culture that have
festered since Clintons 1992 election; conservatives like Tom
DeLay who are calling for the Presidents resignation on moral
grounds have demonizedHillary and Bill Clinton as the embodiments of a corrupt sexual culture stretching from abortion to gay
rights to, well, blowjobs in the Oval Office. The public, the polls
show, doesnt buy this scarlet-letter line, standing far ahead of the

punditocracy in the sensible perception that sexual engagements,

presidential or otherwise, are, as Mississippi John Hurt used to
spg, nobodys dirty business but my own.,
None of this is to minimize Clintons massive political irresponsibilityand epic self-indulgencewhen confronted first with
the Lewinslcy allegation in his Paula Jones deposition and then
with Starrs expanded inquiry in January. Clintonsseven-month
lie did more than humiliate his family and supporters; it gave
Stan an excuse for dangerous, unprecedented expansion of his
grandjury dragnet, and it fed the escalatingtabloid fixation of the
media. A family-values hypocrite caught with his pants down,
Clinton allowed this circus to continuewithout taking a forthright
stand on behalf of sexual privacy until now, instead hoping that a
lie could outlive Starrsrelentless investigativemachine. Clintons
behavior in the Lewinsky matter has been consistentwith the conduct of his presidency, from the betrayal of Lani Guinier through
welfare reform: Hes willing to sacrifice principles, constituencies, friends and finally even the self-respect and dignity of
his family to his political and personal interests.
In the short run Clintonsapologia-without-surrenderfollowing his testimony seems to have ratified public revulsion with
Starr. But with limited deception under oath now a confessed
fact, this President remains in constant self-inflictedjeopardy
and holds office at the sufferance of Congressional Republicans. For progressives, Clintons year of paralysis has been little
loss; when the President was riding high, after all, his Administration produced NAFTA, the welfare cutoff and the civil liberties
depredations of the 1994 crimebill. It would be nice to thinkthat
Clinton on the ropes would turn his Administration around by

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September 7/14,1998

reinventing himself in liberal attack mode on Social Security,

education and the appointment of federal judges. But his character and track record suggest that thats unlikely, except for the
occasional veto of GOP initiatives offensive to key Democratic
constituencies.
The immediate danger is that in the coming Congressional
electionsdisgustedand alienatedmoderate voters may stay home,
giving more clout to the organized and highly motivated rightwing voting base representedby Gary Bauer and other conservative activists. At least Clintons troubles may give progressive
Democrats some license to spend the next two years floating
independent proposals and crafting strategies to distinguish
themselves from Republicans in 2000-instead of repeating
the Clinton/Gore/Democratic Leadership Council strategy of
adopting the agendas of the GOP and Wall Street.
While most of Capitol Hill would still find it more convenient
for Starr to submit his report swiftly, the Presidents testimony
seems unlikely to bring any such therapeutic cclosure.yy
Starr is
obligated neither to opinion polls nor to the Republicans electoral-backlash fears, and his stymied prosecution team has other
targets in addition to the President. Ever since Linda Tripp and
Lucianne Goldberg surfaced with Tripps phone tapes, the Stan
teams real hope has been to connect Lewinskys lie in her Jones
deposition with Webb Hubbell and other resistant Whitewater
witnesses, to establish a pattern of silence purchased with jobs
and other rewards. While press attentionhas focused entirely on
speculation regarding Starrs Congressional report on the President, the prosecutor could also drag the case on further by indicting such secondary players as Betty Currie, Vernon Jordan and
Bruce Lindsey for their presumed role in coveringup the ClintonLewinsky affair-grand juries routinely issue indictments far in
excess of available evidence. And such is Starrs desire to vindicate his investigation that he might still take the legally untested gamble of attempting to indict a sitting President. In short,
dont expect the office of the independent counsel to crank in
its awning anytime soon.
If the polls are any indication;most Americans understand
that it doesnt require choosing sides between Clinton and Starr
to say that the public interest is poorly served by a political assault disguised as ajudicial inquiry, using the awesome power of a
grandjury to investigatebehavior rightly consideredprivate. The
public also knows that the Lewinsky scandal-and its handling
by both Starr and Clinton-remains irrelevantto issues of serious
consequence, whether the bombings in Northern Ireland and
Africa, or children returning to crumbling classrooms. Even a
pathetically deranged man who tried to cut his throat near the
White House the week before to draw attention to starvation
in Iraq managed to articulate better than all the assembledWashington press corps the profound disconnectbetween the pettiness
of this scandal and issues of substance: Who cares about Clinton
and Lewinsky when theres thousands of people dying?, he reportedly cried before being hauled away. This is a confrontation
between insular elites who have replaced democratic politics
with well-funded media spin and legal action. If there is any way
up from this low-water mark of American political history, its
by shifting the focus of debate past the personal shootout between

September 7/14,1998

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I

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Clinton and Starr and on to such broader institutional dangers,

starting with the investigationitself.

The Bulls Sour 16

ugust 13 marked the sixteenth birthday of the great bull

market of the eighties and nineties. Unfortunately, the Sweet
Sixteenparty had to be canceledbecause its looking increasingly like the animal may not reach its seventeenth birthday.
Unlike sell-offs of the past, which weve all come to know
retrospectively as buying opportunities, something feels nastier
about this downdraft.
First signs of the potentially mortal illness became visible
a year ago, when Asia broke. At first we were assured that the
problem was local and easily managed. That was, after all, the
case with Mexico a few years earlier; although most Mexicans
suffered, some terribly, investors were protected, making it a
policy success. Mexicos crisis bruised other emerging markets-which used to be called developing countries, but portfolio allocation is what matters now-but it didnt kill them. In
fact, capital that left Mexico went to Asia as the next hot trend.
But Asias crisis is another story. The regions big economy,
Japan, is in a slump that keeps getting worse. Its elite seemsparalyzed, unable to use the state to socialize financiallosses and try to
get the machineryrunning again.The economicnews out of Japan
gets worse by the day, and the new government hasnt shown convincing signs of life. Japans torpor brings down the whole region.
One reason SoutheastAsia boomed in the late eighties and early
nineties was investment by Japanese multinationals trying to
escape high costs at home. With the yen weak and profits short,
Japanesefirms are no longerbuildingplants in MalaysiaandThailand. The news out of the whole region is bad and getting worse.
Things are breaking elsewhere too. Latin American stock
markets are off sharply, a sign of collapsing confidence and a
withdrawal of capital. Russia devalued the ruble by a third, and
Moscow-1997s best-performing stock exchange-has been
1998s nightmare. Globally, commodity prices are sinking,
hitting not only the so-called Third World, but other commoditydependent economies like Canadas and Australias. The relentlessness and scope of it feels like a global deflation is under way.
Except in the mighty USA, which seems largely immune to
the plague so far.Yes, some manufacturers are reporting weaker
sales, and our trade accounts are sinking deeper into the red, but
the domestic economy seems pretty strong, with the labor markets the tightest theyve been in thurty years and unions even winning a few strikes. In fact, in his recent Congressionaltestimony,
Federal Reserve chairmanAlan Greenspanmade hawkish sounds,
worrying-in carefully phrased ways-that the unemployment
rate was too low and that workers had lost the fear that kept them
pliant earlier in the nineties. (That unfriendly tone helped drive
US stock prices down about 10 percent from mid-July to midAugust.) But if the world really is imploding, its impossiblethat
American immunity can last forever.
Lets look at the United States as if it werent the United States
but just some ordinary small country. Its running a large and

5
I

growing trade deficit. Its financial markets are bubble-ish. It is a

net $1.8 trillion in debt to the outside world and borrowing at the
rate of $200-$300billion a year. Domestically,its on a consumption binge; the Clinton boom has been the most consumptionintensive in history, with a quarter of the expansion in demand
financed by debt. Its households are filing for bankruptcy at
record rates. This is what the worlds financial markets call their
haven. But Americanprofligacy is what keeps the rest of the world
going. Asia cyt recover if it cant export to the United States.
If this really is some nasty global paroxysm and not just one
of the brief tremors we%eall too familiar with, then its really
the crisis of an entire economic model thats swept the world
over the past twenty years-the model of free capital flows,
deregulated economies, open trade and almighty finance, with
America as the worlds consumer of last resort. Asia, the region
that was advertised (not always honestly) as the models pride
and joy, is now rubble. Decades of vigorous importing by the
United States did stimulate world trade, but now were almost
$2 trillion in debt to the outside world.
Inthe past, crisis managers havesucceededin staving off fullb l o disaster,
~
and in shifting the costs of adjustment onto the
poor and weak. Maybe they can do it again, and this is indeed
another buying opportunity. Or maybe not, and we have a true
DOUGH E W O O D
global slump on our hands.
Doug Henwood, editor of Left Business Observer, is the author of Wall
Street: How It Works and for Whom (vepso),just out in paperback.

Terrorism and Retaliation

engeance can be satisfying and,more important, popular in the

polls. With Monica Lewinsky in front of him and Kenneth Starr
behind him, it must have been very tempting for President
Clinton to order retaliation against one of the Islamic usual
suspects for the East African terrorist bombings. It would be
good to thinkthat it was moral principles rather than his domestic
preoccupations and habitual indecision that led him to resist this
particular temptation..Whatever the reason, we must commend
his forbearanceand hope that he maintains it. Obviously, the perpetrators of bombings like those that killed hundreds and injured
thousands inNairobi and Dar es Salaam should be sought, apprehended and punished. But the type of strikes that, for example,the
Reagan Administration carried out against Muammar el-Qaddafi
in Tripoli in 1986 are both immoral and counterproductive.
The United States blamed Libya for the Berlin bombing that
was the excuse for that act. The allegation is still unproven, but a
retaliatoryUS raid that killed Qaddafis infant daughter and about
forty others was in no way morally superior to the original deed.
Nor could it be claimedto be effective. The same security services
that allegedLibyan involvement in the Berlin bomb accuse Tripoli
of masterminding the Pan Am Lockerbie bombing and suggest
that it was retaliation for the 1986 raid.
The problem with such cycles of retaliation is that, like blood
feuds, they go on indefinitely. The 1996 Israeli assassination of
Yahya Ayyash, the engineer, in the Gaza Strip, for example,

The Nation.

was a terrorist act that provoked the ensuing terrorist counterattacks by Hamas, which had hitherto observed a cease-fire. As
a result, Labor lost power to Likud, and the Middle East peace
process has runinto the ground, with unacceptable innocent casualties on both sides. In Northern Ireland, the success of the peace
process depends on the parties not rising to the bait of the Omagh
atrocity to restart the cycle of sectarian killings.
In 1995,at the time of the OklahomaCity bombing, the media
lynch mob blamed Islamic terrorists, and for several days after
the blast, airline passengers with Muslim names were harassed
around the globe. The trial and conviction of Timothy McVeigh
demonstrated conclusively that cold-blooded terrorism is not a
confessionally exclusive profession. It did not lead to editorials
on Christian~terrorism and extremism, but it did highlight the
dangers of hastyjudgments and reactions.
Ironically, one plausible reason for suspecting Islamicbombers-in Oklahoma and in East Africa-was that the groups that
Washingtonsponsored,armed and trained to fight the Russians in
Afghanistan have turned that weaponry and training on the United States now that the Russians have pulled out and the expedient
fundamentalist alliance with the CIA is over. Another sponsor
eventhenwas Osama bin Laden, prime suspect in the East African
atrocities. Similarly, Cuban exiles who have long been the beneficiaries of US support have set off bombs in tourist hotels in Cuba,
without strenuous US efforts to help catch the perpetrators.
The rest of the world does not accept that life is cheaper outside
the United States or that atrocities by American allies and clients
are somehow excusable. It was perhaps this moral relativism that
motivated the US delegation to join those who insured that the
International Criminal Court established in Rome in July would
not have jurisdiction over terrorist offenses.
While we condemn bombings like those at Omagh and ih
Jerusalem, we cannot condone in any way atrocities carried out

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September 7/14,1998

by governments.Murdering civilians is wrong, whoever does it,

and whether the bombs come in trucks or are delivered from air
IAN WILLIAMS
force jets.
Ian FWliams is The Nation$ Weorrespondent.

s Russiaseconomic collapse spirals out of control, rarely if

ever has American discourse about that country been so uncaringly and dangerously in conflict with reality. With its
endless ideological mantra of a purported transition from
Communism to free-market capitalism, almost all US governmentmedia and academic commentary on Russias current
troubles is premised on two profoundly wrong assumptions: that
the problem is essentially a financial crisis and that the remedy
is faster and more resolute application of the reform policies
pursued by President Boris Yeltsin since 1991.
Treating Russias agony as a case of the Asian flu-as
merely a matter of bolstering a faltering stock market, banking
system and currency with more budgetary austerity and tax collection, ruble devaluation and Western financial bailouts-is
like rearranging deck chairs on the Titanic. Russias underlying
problem is an unprecedented, all-encompassing economic catastrophe-a peacetime economy that has been in a process of
relentless destruction for nearly seven years. GDP has fallen
by at least 50 percent and according to one report by as much
as 83 percent, capital investment by 90 percent and, equally
telling, meat and dairy livestock herds by 75 percent. Except for
energy, the country now produces very little; most consumer
goods, especially in large cities, are imported.
So great is Russias economic and thus social catastrophethat
we must now speak of another unprecedented development: the
literal demodernizationof a twentieth-century country. When the
infrastructuresof production, technology, science,transportation,
heating and sewage disposal disintegrate; when tens of millions
of people do not receive earned salaries, some 75 percent of society lives below or barely above the subsistence level and at least
15 million of them are actually starving; when male life expectancy has plunged to 57 years, malnutritionhas become the norm
among schoolchildren, once-eradicated diseases are again ber
coming epidemics and basic welfare provisions are disappearing;
when even highly educated professionals must grow their own
food in order to survive and well over half the nations economic
transactions are barter-all this, and more, is indisputable evidence of a tragic transition backward to a premodern era.
Even if economic growth were miraculously to resume tomorrow, Russia would need decades to regain what it has lost in
the nineties, and nothing can retrieve the millions of lives already
cut short by the transition. Indeed, as a careful statistical study
by Professor Stephen Shenfield of Brown University shows, an
even greater and possibly inescapable economic and social disaster is rapidly approaching.
Why call this reform, as does Virtually every US commentator? Certainly, very few Russians any longer do, except to curse

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Yeltsin and his policies, especially those long and zealously

promotedby the ClintonAdministration.Russian economists and
politicians across the spectrum are now desperately trying to
formulate alternative economic policies that might save their
nation-ones more akin to Franklin Roosevelts New Deal than
to the neoliberal monetarist orthodoxies of the State andTreasury
departments, the IMF, World Bank and legions of Western advisers, which have done so much to abet Russias calamity.
But when President Clinton goes to Moscow in early September, he will no doubt tell Yeltsin publicly, as he often has done
in the past and Vice President Gore did when he visited in July,
Stay the course! For most Russians, it will mean that America
welcomes what has happened to their country and does not care
STEPHEN
F. COHEN
about their ruined lives.
Stephen I? Cohen is a professor of Russian studies and history at New
York Universiv. His most recent book, Rethinking Russia, will be
published next year by Oxford.

Trouble for Suhartos Pal

ix months ago, a close relationship with Suharto was the best

insurance a foreign company could have in Indonesia. Today,
Louisiana-basedFreeport-McMoRan Copper & Gold, which
had a cozy relationship with the former ruler, is finding that
close ties to Suharto may prove more liability than insurance.
Freeport is one of the biggest foreign taxpayers in Indonesia, and its executiveswere closer to Suharto than any other nonIndonesian businessmen. Jim Bob Moffett, the flamboyant CEO
of Freeport, was a golfing pal of Suharto.And he made sure that
Suharto and his cronies were given a piece of Freeports Grasberg
mine, which contains the richest gold deposit on earth. Located in
Irian Jaya, the disputedwesternhalf of Papua New Guinea, which
was forcibly colonized by Indonesia in the late sixties, the &e
holds at least $50 billion worth of gold, copper and silver.
Last year, according to Freeports annual report, the company
guaranteed $254 million worth of loans that allowed PT Nusamba-an Indonesian company, 80 percent of which is owned by
foundations controlledby Suharte-to buy a 4.8 percent stake in
the Freeport mine from a third party. If the dividends from the
stock dont cover all of Nusambas loan payments, Freeport also
agreed to lend funds to PT Nusamba to service the interest cost
on this debt. In other words, Freeport agreed to take the risk on
a deal that allows Suharto and his partners in Nusamba, billionaire timber magnate Bob Hasan and Suhartos son, Sigit Harjojudanto, to gain an asset worth a quarter of a billion dollars.
The Nusamba deal is one of several that Freeport made with
Suharto and his cronies. According to the companys annual report, between 1993 and 1997 it sold $270 million worth of the
infrastructure at the Grasberg mine to PT Alatief, a company
controlled by Suhartos Labor Minister, Abdul Latief. Freeport,
which now leases that same infrastructurefromAlatief, continues
to guarantee a $50 million bank loan that Latiefs company used
to buy the assets. In a May 14letterto me, Freeport officials
called the Nusamba deal a typical businessarrangement.

Suhartos successor,President B.J. Habibie, has taken a public

stand against corruption.Hasan, Suhartos Closest crony, has been
barred by the government from traveling overseas. The.Indonesian
attorney general is now reportedly investigatingthe foqdations
that Suharto controls, including, presumably, the foundations that
own Nusamba. But Freeport still controls a mountain of hard
currency-+urrency that Indonesia desperatelyneeds to prop up
its ailing economy. For that reason Indonesia watchers doubt that
Habibie will take a strong stand against the company.
The Nusamba and Alatief deals should gain the interest of
US regulators, who may wish to examine whether the Foreign
Corrupt Practices Act, which prohibits American companies
from bribing foreign officials, has any application to the Suharto transactions. But even if Freeport escapes such scrutiny,
the company has other problems [see Eyal Press, FreeportMcMoRan at Home & Abroad, July 3 UAugust 7, 19951. On
July 2 the Louisiana Supreme Court, in a unanimous ruling,
determined that a human rights and environmental damages
lawsuit brought against Freeport by Yosefa Alomang can proceed. Alomang, a prominent Amungmetribal member, claims
that she was tortured by Indonesian soldiers inside Freeports
concession area four years ago. Lawyers representingAlomang
are eager to take depositions fkom Moffett and former Secretary
of State Henry Kissinger to see what they know about the human
rights and environmentalproblems at the mine. (Freeport pays
Kissinger more than $200,000 a year to sit on its board and
provide advice on foreign affairs.)
Freeport has repeatedly denied that it is responsible for the
rash of documentedhuman rights abuses in and around the Grasberg mine. In 1995Australian investigatorsas well as Indonesias
human rights commission documented more than four dozen
cases of abuse and murder, including the murder of a civilian by
Indonesian soldiers while the man was riding on a Freeport bus.
In late May, Indonesian church groups documented the murder
of eleven unarmed villagers by Indonesian soldiers in the region
just east of Freeports mine. The report alleges that soldiers
stationed at the Freeport mine are responsible for some of the
murders. Freeport pays to feed, house and transport more than
1,200 soldiers stationed in the mine area, which is one of the
most heavily militarizedregions in that country. It has also spent
$35 million to build a new garrison. The Robert F. Kennedy
Memorial Center for Human Rights has asked the Indonesian
government to allow independent human rights investigators to
assess the human rights problems in and around the mine.
In early August, Freeport got more bad news when the 5,000
workers at the Grasbergmine went on a four-day strike to demand
higher wages. The devaluationof the rupiah has been a windfaSl
for Freeport, which expects to save more than $50 million thanks
to the currencys plunging value.-Freeportsworkers, however,
have not shared in the windfall.
Other companieshave allied themselves with corrupt regimes,
but Freeport has taken such complicity to another level. Now that
Freeports partner is out ofpower, its collusion with Suhartos ruthless regime should be fully investigated.
ROBERT
BRYCE
Robert Bryce is a contributing editor at the Austin Chronicle.