us bullies another small country

And people wonder why there is so much hate for the U.S. building.




Secret US terror plan for Nauru
By Martin Chulov, Cameron Stewart
April 05, 2003
THE US has coerced Nauru, through a series of secret deals since the Bali bombing, to outlaw offshore banks, ending one of the most notorious safe havens for terrorist funds.

The US also has won permission from Nauru to set up a listening post to eavesdrop on neighbouring countries in the South Pacific, as well as a pledge from the tiny island nation not to haul Americans in front of the International Criminal Court.

The concessions are the result of an extraordinary behind-the-scenes campaign driven by intermediaries at arm's length from the US Government to force Nauru in from the cold.

This little-known front in the war on terror, revealed exclusively today in The Weekend Australian, has severely strained relations between the US and Nauruan leaders, who accuse Washington of effectively colonising their island.

"The CIA has cornered the President and we have not had much choice to do what we've done," former Nauruan president Rene Harris says.

"We have been given the riot act by the United States," says Nauru's former finance minister, Kinza Clodumar. "We feel our sovereignty has been compromised, no doubt about that."

Nauru has bowed to US demands on reforming its banking sector in the expectation of winning a substantial aid package from the US to save it from bankruptcy.

But the US Government denies claims by senior Nauruan politicians it promised aid in return for Nauru taking tough steps against terrorism.

The Weekend Australian has obtained confidential documents showing the US did use the promise of extra aid to lure Nauru to the negotiating table.

They show the US used non-government go-betweens to inform Nauru it could be rewarded with up to $250 million in ecological aid over 10 years, new cost-free diplomatic missions in Beijing and Washington, and the refinancing of $3 million debt for the island's grounded airline. Nauru also was told of potential funding for new schools, a state-of-the-art phone system and even new diets for Nauru's 11,000 citizens.

The offers – although not formally made by the US Government – were sufficient to convince Nauru that it would be handsomely rewarded if it cleaned up its banking sector.

Now some Nauran leaders are concerned the US may not come through on promises they believed were set in stone.

Despite the island state quietly passing laws late last week to end offshore banking, the US State Department said this week it was "not currently developing" any package of financial assistance for Nauru.

However, a State Department spokesman welcomed Nauru's decision to abolish offshore banking, which he said "removes a significant vulnerability to exploitation of Nauru by transnational organised criminals, as well as terrorists".

The Department of Foreign Affairs and Trade in Canberra yesterday also welcomed Nauru's reforms.

Nauru has also agreed to end its passports-for-sale system, which the US said could be exploited by terrorists.

These outcomes are seen as a major blow to people-smuggling and terrorism throughout southeast Asia, and have long been sought by Australia and its regional allies.

The US also persuaded a reluctant Nauru to sign a so-called Article 98 agreement in which both countries would agree not to send the other's nationals to the ICC.

In a confidential letter to President Derog Guiora, Nauru's ambassador to the UN, Vinci Clodumar, accuses the US of forcing the late president, Bernard Dowiyogo, to agree to the package "under duress".

US Secretary of State Colin Powell wrote to Dowiyogo this year, warning him that "Nauru's offshore sector, consisting exclusively of shell banks, poses an unacceptable money-laundering risk".

Documents obtained by The Weekend Australian, and independently verified over the past week, show the US resorted to threats to force Nauru to stymie terrorist groups by cleaning up its banking system.

One letter sent to then president Mr Harris by a US lawyer acting as an unofficial go-between said: "So what we have here is both a threat and a promise for the future.

"The threat is for major international sanctions to be taken against Nauru for violation of international banking practices."

These sanctions would be sufficient to shut down the economy of Nauru, and would essentially eliminate all trade in and out of Nauru.

"The promise, on the other hand, is that Nauru will receive substantial economic assistance from the United States and from other countries in return for changes to its banking practices."

Documents reveal the US claimed to have clear evidence that terrorist groups, intent on harming the US and its allies, had moved money through Nauru and its laissez-faire banking system.

A telex from Mr Powell earlier this year also complained of Nauru repeatedly selling passports.

"The indiscriminate sale of Nauru's passports to persons having no genuine allegiance or substantial ties to your state contradicts (a commitment to fight terrorism)," Mr Powell's letter said.

"I strongly urge Nauru to stop immediately what is in effect the sale of Nauru passports to such individuals."

Mr Harris claims Nauru has been forced to hand over its financial lifeblood for little return.