Tuesday, October 1, 2013

Shutdown: Congress Stuck In Funding Stalemate

Washington Post
October 1, 2013
Pg. 1


By Lori Montgomery and Paul Kane
The U.S. government began to shut down for the first time in 17 years early Tuesday, after a Congress bitterly divided over President Obama’s signature health-care initiative failed to reach agreement to fund federal agencies.
Hours before a midnight deadline, the Republican House passed its third proposal in two weeks to fund the government for a matter of weeks. Like the previous plans, the new one sought to undermine the Affordable Care Act, this time by delaying enforcement of the “individual mandate,” a cornerstone of the law that requires all Americans to obtain health insurance.
The new measure also sought to strip lawmakers and their aides of long-standing government health benefits.
The Democratic-led Senate quickly rejected that plan on a party-line vote. Senate Majority Leader Harry M. Reid (D-Nev.) urged House Speaker John A. Boehner (R-Ohio) to abandon the assault on the health-care law and pass a simple bill to keep the government open. Otherwise, Reid warned, “the responsibility for this Republican government shutdown will rest squarely on his shoulders.”
Boehner refused to yield. He instead won approval, in a 1 a.m. largely party-line roll call, requesting a special House-Senate committee to meet in the coming days to resolve differences between the two parties, leaving in limbo the fate of millions of federal workers and the services they provide.
Shortly before midnight, the White House budget office issued a memo instructing agencies to “execute plans for an orderly shutdown due to the absence of appropriations.”
The impasse means 800,000 federal workers will be furloughed Tuesday. National parks, monuments and museums, as well as most federal offices, will close. Tens of thousands of air-traffic controllers, prison guards and Border Patrol agents will be required to serve without pay. And many congressional hearings — including one scheduled for Tuesday on last month’s Washington Navy Yard shootings — will be postponed.
In a last-minute ray of hope for active-duty troops, Congress on Monday approved and sent to the White House an agreement to keep issuing military paychecks. But Obama warned that the broader economy, which is finally starting to recover from the shocks of the past six years, would take a substantial hit if congressional gridlock shutters “America’s largest employer.”
“Keeping the people’s government open is not a concession to me. Keeping vital services running and hundreds of thousands of Americans on the job is not something you ‘give’ to the other side. It’s our basic responsibility,” Obama said in a statement Monday evening at the White House.
Privately, senior Republicans predicted that the closure would last at least a week. A fraction of today’s House Republicans were on Capitol Hill in 1995 and 1996 when a Republican-led Congress last shut down the government in a dispute over the budget with a Democratic president. Younger lawmakers don’t remember the pain the shutdown caused constituents, senior Republicans said. And many of them now question the conventional wisdom that the closures weakened the GOP presidential candidate in 1996 and nearly cost the party control of the House.
Democrats predicted that if the shutdown stretches into the weekend, the government-funding dispute could be rolled into an even more serious battle over the $16.7 trillion federal debt limit. The Treasury Department will begin running short of cash to pay the nation’s bills as soon as Oct. 17 unless Congress approves additional borrowing authority. With so little time remaining to avoid what would be the nation’s first default, Democratic aides predicted that negotiations to reopen the government may be merged into the debt-limit talks.
On Monday evening, Obama telephoned Boehner to urge him to reconsider his stance on the health-care law. In a call that lasted nearly 10 minutes, according to Boehner’s office, the president reiterated his insistence that there would be no negotiations over the debt limit, and that Congress must pay the bills it has incurred.
Boehner responded by mocking Obama in a speech on the House floor.
“  ‘I’m not going to negotiate,’ ” he said, quoting Obama. “I would say to the president: This is not about me. It’s not about Republicans here in Congress. It’s about fairness.”
The speech drew applause for the embattled speaker, who argued passionately that Republicans were merely seeking “fairness” for working people. Obama has delayed a mandate for employers to insure workers and delayed other requirements for big unions, Boehner said. “Yet they stick our constituents with a bill they don’t like and a bill they can’t afford,” he said.
Despite the show of unity, Republicans on both sides of the Capitol remain deeply divided about the attack on the health-care law. In the House, a group of more moderate Republicans was seething about the decision to bow to the forces that oppose the Affordable Care Act, led by Sen. Ted Cruz (R-Tex.) and his allies on the right, including such outside groups as Heritage Action for America.
On Monday, some publicly urged Boehner to drop the issue and seek the help of House Democrats to pass the simple government-funding bill that the Senate approved last week.
“I don’t want to shut down the government,” said Rep. Shelley Moore Capito (W.Va.), who is trying to become her state’s first GOP senator since the 1950s, adding that she was inclined to support a “clean” funding bill.
Frustrations also were simmering among Senate Republicans, who complained that House leaders were pressing the attack in direct opposition to public opinion. Polls show that voters overwhelmingly disapprove of using the threat of a shutdown to defund the health-care law and that blame for a shutdown will fall squarely on Republicans.
“By wanting to repeal Obamacare using this method, it defies what the popular will is,” said Sen. John McCain (Ariz.), the 2008 GOP presidential nominee, who campaigned last year on behalf of his party’s national ticket.
“I campaigned in 2012 all over this country for months: ‘Repeal and replace Obamacare.’ That was not the mandate of the voters,” McCain said. “If they wanted to repeal Obamacare, the 2012 election would have been probably significantly different.”
Adding to the tension Monday was Boehner’s decision to add the provision that would strip lawmakers, congressional staff members and White House aides of the employer subsidies for health insurance they have received for many years.
Now that lawmakers and their aides must join the new health-insurance exchanges, some conservative groups have criticized the subsidies, worth about $5,000 a year for individual coverage and $10,000 for families, as a “special exemption” from the new law. By including the provision, House leaders hoped to attract conservative support and put pressure on Senate Democrats, who faced the choice of shutting down the government to protect their own perks.
“On what flooding peninsula can you stand when it’s a question of delaying the individual mandate, ending member subsidies and funding the government?” said Rep. Peter Roskam (R-Ill.). If Reid kills it, “the senators he’s going to protect become the subject of incredible scrutiny.”
Even some Republicans were uneasy about the prospect of dealing their aides — and some of their colleagues — the equivalent of a big pay cut. Sen. Richard J. Durbin (D-Ill.) called it an “outrage,” adding that Boehner had worked directly with Reid and the Obama administration to make sure the subsidies would stay in place when congressional employees join the exchanges next year.
Boehner and his team presented the proposal to rank-and-file Republicans in a closed-door meeting Monday. For more than an hour and a half, lawmakers argued about the plan. They emerged with an unusual number of public dissenters, including Rep. Peter T. King (N.Y.), one of a dozen Republicans who ultimately voted against the proposal.
“I don’t want to be the facilitator of a disastrous process and plan,” he said.
Still, most Republicans endorsed the deal, even if somewhat reluctantly. “I think this is a principled call by leadership and it has the support of the con­ference,” said Rep. Tom Cole (R-Okla.), one of Boehner’s closest friends.
Democrats, meanwhile, were united against any attempt by Republicans to extract concessions now, especially with the larger fight over the debt limit swiftly approaching.
“The bottom line is very simple,” said Sen. Charles E. Schumer (D-N.Y.). “You negotiate on this, they will up the ante for the debt limit.”
Ed O’Keefe, Rosalind S. Helderman, Jackie Kucinich and Jeff Simon contributed to this report.
FAQ: How will a government shutdown affect federal workers?
A list of key questions and answers from Washington Post coverage of the impact on federal government employees.
When will I know if I'll be furloughed because of a shutdown?
Federal workers should have received an e-mail or phone call from their supervisors by Monday telling them to report for work or remain at home.
Those who are nonessential can have a few hours Tuesday morning to come into the office to secure their files, send e-mails and put things in order before signing off. It is illegal for them to conduct any work until they are called back to their jobs.
Who is "exempt" and who's not?
That's up to individual agencies. A recent Office of Management and Budget memo told agencies to review plans they made in 2011. The government is required by law to maintain functions that:
*Provide for the national security, including the conduct of foreign relations.
*Provide for benefit payments and the performance of contract obligations under no-year or multi-year contracts.
*Protect life and property.
Who decides?
Federal managers must review which of their employees will be excepted or exempted and required to work, and which are be non-excepted or non-exempted and sent home.
How many workers will be affected?
A government shutdown jeopardizes the paychecks of more than 800,000 federal workers who will be told to stay home. The federal government has more than 2 million employees. Those workers who remain on the job as well as active military would be entitled to their salaries, but might not be paid on time.
Will I be paid?
The OMB memo says much the same: "Without further specific direction or enactment by Congress, all excepted employees are entitled to receive payment for obligations incurred by their agencies for their performance of excepted work during the period of the appropriations lapse. After appropriations are enacted, payroll centers will pay all excepted employees for time worked."
The memo does not directly address pay for "non-exempt" employees. The Office of Personnel Management guidance says that "Congress will determine whether furloughed employees receive pay for the furlough period."
If I am paid, will my paycheck be on time?
Gregory Junemann, president of the International Federation of Professional & Technical Engineers, said the administration officials indicated that employees who are required to work would be paid "eventually."
"They can't guarantee [the workers] will be paid on time," Junemann said. "They are pretty comfortable with the statement that everybody who works will be paid eventually." Those who are furloughed might be paid, but Republicans could move to block that.
If I'm furloughed, why can't I take annual leave or other paid time off instead?
Because that creates a debt obligation to the government not payable under the Antideficiency Act if no appropriation has been made. This includes a requirement to cancel any paid leave that had been scheduled.
Employees cannot substitute paid leave for furlough time, and even previously scheduled paid time off must be canceled "because the requirement to furlough supersedes leave and other paid time off rights."
How would a new plan offered by House Republicans affect me?
A new plan, like those Republicans have pushed before, would increase employee contributions to their retirement benefits.
The plan now under discussion apparently is like a bill that a Republican-majority House approved in December. Had it passed the Senate, the measure would have required federal workers to pay an additional 5 percent of their salary over five years toward their retirement contributions, saving the government about $80 billion.
How is this possible shutdown different from previous ones?
Compared with the shutdowns of the 1990s, many more federal workers are in danger of being furloughed this year, because Congress has not passed a single funding bill. In the past, Congress had passed appropriations bills that funded various large agencies, including the Defense Department, meaning they could continue to operate even if other parts of the government could not.
What if I'm a government contractor?
Contractors said they assumed they will receive little notice about whether their employees will go to work. And then, they would have to decide - on a contract-by-contract basis - what to do with those workers.
Will I be reimbursed for time missed?
In past shutdowns, federal employees have been reimbursed for time missed, said Alan Chvotkin, counsel at the Professional Services Council, an industry group. But contractors have not fared as well.
"Contractors have never been reimbursed," Chvotkin said. A shutdown has been "just lost revenue, lost salary to those affected."
While there is no law requiring that nonessential employees be compensated if they are ordered off the job, Congress has in the past voted to reimburse their losses once shutdowns ended.
But this go-round may be different. The bitterly divided Congress includes many lawmakers who are unsympathetic to the plight of federal workers and could be loath to help them recoup their money.
Will overseas military operations be affected?
Defense Department spokesman George Little said overseas operations, including those in Afghanistan, will not be directly affected.
What's the status of employee benefits?
Coverage under the federal employee health insurance program would continue, with the employees' share accumulating until they return to paid status. Coverage under the life insurance program also will continue, without cost to the employee. For the long-term care and vision and dental insurance programs, enrollees must continue to pay the premiums; those paying through payroll deduction will be billed directly if the unpaid period lasts of weeks.
What if I'm deemed "essential" but get sick?
Essential employees who are too sick to work during a shutdown will face the same uncertainty over their pay for the time off work as those who are furloughed.
If I'm a retired federal worker, will I still get my check?
For millions of federal retirees who may be concerned about their annuity checks, which arrive on the first day of each month, the OPM said they will be paid on Oct. 1 as normal.
Federal retirement payments, like payments such as Social Security benefits, fall under the "mandatory" budget category not funded through annual appropriations and thus not affected by these kinds of funding deadlocks. According to the OPM, federal retirees "will still receive their scheduled annuity payments on the first business day of the month."
How does a shutdown end?
It's up to Congress and the White House. No doubt there will be plenty of pressure from the public and workforce. There is no law setting a time limit.
-- From staff reports

The Impact, Agency By Agency

Washington Post
October 1, 2013
Pg. 12

Government Shutdown


The government shutdown will interrupt some services and jeopardize the paychecks of more than 800,000 federal workers. The Office of Management and Budget asked federal agencies to make contingency plans; the government does not stop functioning completely, and by law, certain agencies must operate with unsalaried employees. They include those that deal with national security and the safety of people and property, as well as those that manage benefits such as Social Security payments. The U.S. Postal Service will also be unaffected by a shutdown. Here’s what some agencies have said about their plans.
Department of Agriculture
Overall impact -- Inspections of meat and poultry will continue, and workers including firefighters will remain on the job. The agency will halt its production of statistical reports on crop estimates and sales widely used in the agricultural market.
Workers -- The USDA hasn’t said precisely how many of its 100,000 workers will be furloughed.
Department of Commerce
Overall impact -- The department includes agencies such as the Census Bureau and the Bureau of Economic Analysis, as well as various economic development offices — all of which will be closed.
Workers -- Of the Commerce Department’s 46,420 employees, 40,234 will be furloughed.
Federal courts
Overall impact -- According to Judge John D. Bates, director of the Administrative Office of the U.S. Courts, federal courts can continue to operate for approximately two weeks with reserve funds.
Workers -- After the reserve funds are depleted, only essential employees will continue to work. Each court has flexibility in determining which employees are essential -- other than judges, who will work.
Department of Defense
Overall impact -- The Defense Department will continue to conduct military operations and training exercises.
Workers -- The roughly 1.4 million active-duty uniformed military personnel will stay on the job. Of the department’s 800,000 civilian workers, about half will be furloughed.
Department of Education
Overall impact -- The department will still distribute $22 billion to public schools that is normally obligated on Oct. 1. This represents the second half of 2013 funding already appropriated by Congress to help educate poor and disabled K-12 students and to fund career and technical education programs. This funding does not require further congressional authorization.
Workers -- If the shutdown lasts a week, approximately 212 of the department’s 4,225 full- and part-time employees will be working. An additional 30 employees may be called to work if the shutdown lasts longer than a week.
Department of Energy
Overall impact -- Most of the Department of Energy's activities will cease during the shutdown, with big exceptions for the office overseeing the safety of the nation's nuclear arsenal and the administrators in charge of dams and transmission lines around the country.
Workers -- The Department of Energy has 13,814 employees. During a shutdown, all but 1,113 will be sent home, according to a contingency plan the agency recently posted on its Web site.
Environmental Protection Agency
Overall impact -- On Monday, Gina McCarthy, administrator of the Environmental Protection Agency, said her department will all but close during the shutdown.
Workers -- McCarthy offered no specifics but said that the “vast majority of people” will not be paid if there is no budget.
The Federal Reserve
Overall impact -- The Fed is self-funded and will remain open and operational.
Workers -- No impact.
Health and Human Services
Overall impact -- The department has said it anticipates furloughing 40,512 workers while retaining 37,686.
Workers -- The agency will be sending home more than half its workers, but the lack of funding will not affect various offices equally.
Department of Homeland Security
Overall impact -- The vast majority of Department of Homeland Security employees will continue to work under a shutdown because their functions “must be maintained under all circumstances to ensure the safety and security of the nation and its citizens,” or because their jobs are not funded by congressional appropriations.
Workers -- About 86 percent of the department’s roughly 231,000 employees are “essential,” meaning they will remain on the job for the “safety of human life or protection of property.” Some of those workers will also be part of an “emergency relocation group” that responds to possible emergency situations.
Federal Transit Administration
Overall impact -- According toFTA Administrator Peter Rogoff, no grants, cooperative agreements, contracts, purchase orders, travel authorizations or other documents obligating funds will be made to any of the agency's 1,300 grantees.
Workers -- About 95 percent of the FTA’s workers will be furloughed. Remaining staffs will be limited to four people who will handle shutdown and startup activities as well as emergency needs.
Food and Drug Administration
Overall impact -- The FDA will continue “limited activities” in programs that are funded through industry user fees and will continue “select vital activities” such as handling high-risk recalls of tainted food or drugs. Officials said the FDA will be unable to keep up the majority of its food-safety, nutrition and cosmetics oversight.
Workers -- The agency will be forced to furlough 6,620 workers, or about 45 percent of its 14,779-person workforce.
Housing and Urban Development
Overall impact -- The agency's contingency plan says that just 379 of 8,709 employees will be expected to work during a shutdown.
Workers -- The vast majority of HUD's agencies will be staffed by skeleton crews, with the exception of Ginne Mae, the mortgage-guarantee agency, will maintain 43 of 108 employees.
Department of the Interior
Overall impact --Interiorwill operate with a significantly smaller workforce, and national parks will be closed to the public. Agencies under its authority include the National Park Service, the U.S. Geological Survey, the Fish and Wildlife Service, the Bureau of Indian Affairs, the Bureau of Ocean Energy Management, the Bureau of Land Management, the Office of Surface Mining Reclamation and Enforcement, and the Bureau of Safety and Environmental Enforcement.
Workers -- Interior has 72,562 employees. More than 58,000 will face furloughs, and those remaining on the job as exempted workers (6,306) have mostly law enforcement and security-related duties.
Department of Justice
Overall impact -- BecauseJustice has a broad array of national security, law enforcement and criminal justice responsibilities, a high percentage of activities and employees are excepted.
Workers -- Of 114,486 employees, an estimated 96,744 will be excepted from furloughs under the Justice Department's plan. Approximately 17,742 employees will be subject to possible furloughs.
Department of Labor
Overall impact -- During the shutdown, a majority of the Department of Labor's employees will be furloughed.
Workers -- Of the 16,304 employees at the agency, only 2,954 will be expected to work.
Overall impact --NASA employees will be furloughed unless instructed that their jobs are exempted. Among the agency functions that will continue are those involving the safe operation of satellites and the international space station, and “other activities involving protection of life and property,” according to the agency Web site.
Workers -- An internal memo states that NASA will “narrowly construe the available exceptions in determining which activities can continue.” The agency has 18,250 employees across the country, and the shutdown contingency plan indicates that 549 will be exempted from furloughs.
National Institutes of Health
Overall impact -- The NIH will not take any actions on grant applications or awards, but will continue to allow grantees with existing grants to draw on their funds and will accept new online grant applications (which will be stored and processed later). The NIH Clinical Center will continue to provide direct medical services and maintain research protocols for current patients but will not admit new patients or initiate new clinical trials.
Workers -- Under theplan, 2,564 NIH staff members will be excepted for the provision of patient care, 734 to protect property related to ongoing medical experiments, 568 for maintenance of animals and protection of inanimate government property, and 212 to maintain computerized systems to support research and clinical patient care.
United States Postal Service
Overall impact -- The U.S. Postal Service, which is a self-funded agency, will remain open, and mail delivery will continue as usual.
Workers -- No impact.
Small Business Administration
Overall impact -- The agency will shut down nearly all its operations, including processing for most of its lending programs, which guarantee tens of billions of dollars in lending to small and new businesses every year.
Workers -- The SBA will have to furlough more than 2,100 employees, nearly two-thirds of its workforce, according to the agency’s contingency plan. Nearly all of the exempt employees work in the agency's Office of Disaster Assistance.
Securities and Exchange Commission
Overall impact -- The SEC will not be immediately affected. It plans to use funds carried over from the previous year.
Workers -- No immediate impact.
Overall impact -- Essentially, all Smithsonian institutions, museums and zoos will be closed.
Workers -- Those exempted include security and maintenance workers and zoo employeesresponsible for the care of the animals.
Department of State
Overall impact -- The State Department, which receives funding in the annual State, Foreign Operations and Related Programs Appropriations Act, will be able to operate for a limited time.
Workers -- Activities carried out by the Bureau of Consular Affairs, both domestically and abroad, are fee-funded and will continue. The department will continue passport operations and visa issuance overseas.
Supreme Court
Overall impact --The court has made no official announcement, but it continued to operate during previous shutdowns.
Workers -- Not available.
Department of Transportation
Overall impact -- Air travel should continue as normal because federal air-traffic controllers will remain on the job.
Workers -- According to the department's contingency plan, 18,481 of its 55,468 employees will be furloughed.
Department of the Treasury
Overall impact -- The Treasury Department will continue disbursements of Social Security funds, automated revenue collections and the work of daily cash management for the government, in addition to paying interest on the federal debt. But the department’s largest component, the Internal Revenue Service, will cease some of its key functions such as audits, examinations of returns, processing of paper returns and call-center operations.
Workers -- About 88 percent of the 110,000 employees will be placed on furlough, including nearly 90 percent of IRS workers. About 8,800 of the IRS’s 95,000 employees will stay on in roles such as law enforcementor because their positions are paid for by funds outside of appropriations. Most headquarters and administrative employees will be furloughed.
Department of Veterans Affairs
Overall impact -- Medical services will not be affected, but benefits programs probably will. Regional offices handling disability claims will have limited services, and the Veterans Benefits Administration will be unable to process education and rehabilitation benefits. The Board of Veterans' Appeals will be unable to hold hearings.
Workers -- VA projects that 95 percent of its 332,000 employees are exempt from furloughs, including the 289,000 who work for the Veterans Health Administration.
The White House
Overall impact -- About three-quarters of White House employees will be furloughed.
Workers -- Some 436 employees will be designated as exempt, and the remaining 1,265 will be furloughed.

2 Marine Generals Fired Over Base Attack

Washington Post
October 1, 2013
Pg. 1


Taliban entered NATO airfield in Afghanistan, killing 2, destroying jets

By Rajiv Chandrasekaran
The commandant of the Marine Corps on Monday took the extraordinary step of firing two generals for not adequately protecting a giant base in southern Afghanistan that Taliban fighters stormed last year, resulting in the deaths of two Marines and the destruction of half a dozen U.S. fighter jets.
It is the first time since the Vietnam War that a general, let alone two, has been sacked for negligence after a successful enemy attack. But the assault also was unprecedented:
Fifteen insurgents entered a NATO airfield and destroyed almost an entire squadron of Marine AV-8B Harrier jets, the largest single loss of allied materiel in the almost 12-year Afghan war.
The commandant, Gen. James F. Amos, said the two generals did not deploy enough troops to guard the base and take other measures to prepare for a ground attack by the Taliban. The two, Maj. Gen. Charles M. Gurganus, the top Marine commander in southern Afghanistan at the time, and Maj. Gen. Gregg A. Sturdevant, the senior Marine aviation officer in the area, “failed to exercise the level of judgment expected of commanders of their rank,” Amos said.
“It was unrealistic to think that a determined enemy would not be able to penetrate the perimeter fence,” Amos said.
The incident brings into stark relief the unique challenges of waging war in Afghanistan. The withdrawal of thousands of U.S. troops over the past two years has forced commanders to triage, sometimes leading them to thin out defenses. The U.S. military also has been forced to rely on other nations’ troops, who often are not as well trained or equipped, to safeguard American personnel and supplies.
The attack occurred at Camp Bastion, a British-run NATO air base in Helmand province that adjoins Camp Leatherneck, a vast U.S. facility that serves as the NATO headquarters for southwestern Afghanistan. Because Leatherneck does not have a runway, the Marines use Bastion as their principal air hub in the country. Several hundred Marines live and work on the British side, and dozens of U.S. helicopters and fixed-wing aircraft are parked there.
The British are responsible for guarding Bastion, which is ringed by a chain-link fence, triple coils of razor wire and watchtowers from which sentries can scan the horizon for any potential attackers. British commanders had assigned the task of manning the towers to troops from Tonga, which has sent 55 soldiers to Afghanistan.
On the night of the attack, the Tongans left unmanned the watchtower nearest to the Taliban breach, according to an investigation by the U.S. Central Command.
Other aspects of the U.S.-British security plan were “sub-optimal,” the investigation found, with no single officer in charge of security for both Bastion and Leatherneck. The security arrangement created command-and-control relationships “contrary to the war-fighting principles of simplicity,” Amos wrote in a memo accepting the investigation.
Troop reductions also affected security measures. When Gurganus took command in 2011, about 17,000 U.S. troops were in his area of operations. By the time of the attack, in September 2012, the American contingent had dropped to 7,400 because of troop-withdrawal requirements imposed by President Obama.
In December 2011, 325 Marines were assigned to patrol the area around Bastion and Leatherneck. In the month before the attack, that number was cut to about 110.
Gurganus did seek permission in the summer of 2012 to add 160 troops to protect Bastion and Leatherneck, but his superiors in Kabul rejected the request because the military had reached a limit on forces set by the White House.
Even so, Amos said Gurganus should have reallocated troops from elsewhere to protect the encampments. “The commander still has the inherent responsibility to provide protection for his forces,” Amos said. “Regardless of where you are in a [troop] drawdown, you’re required to balance force projection with force protection.”
Despite the overall troop reduction, several officers stationed at Leatherneck at the time said that many Marines with idle time could have been assigned to guard duty. Instead, some of them took online college classes and others worked out in the gym twice a day.
In an interview with The Washington Post this year, Gurganus characterized the attack as “a lucky break” for the Taliban. “When you’re fighting a war, the enemy gets a vote,” he said.
Amos said that when he informed Gurganus that he was being relieved, Gurganus told him, “As the most senior commander on the ground, I am accountable.”
Two Marines, Lt. Col. Christopher Raible and Sgt. Bradley Atwell, were killed trying to fend off the attack. Raible, a Harrier squadron commander, charged into the combat zone armed with only a handgun. Eight other Marines were wounded in the fighting. The cost of the destroyed and damaged aircraft has been estimated at $200 million.
Although Gurganus ordered a review of security on the bases after the attack and a British general conducted a brief investigation for the NATO headquarters in Kabul, the Marine Corps waited eight months to ask the Central Command to initiate a formal U.S. investigation. Amos’s decision followed inquiries from the Pentagon’s Joint Staff, congressional staff members and a front-page article in The Post that detailed the unmanned watchtower and the reduction in troops patrolling the perimeter.
Amos said Monday that he wanted to wait for reports from NATO and the Central Command before requesting a formal investigation.
Before seeking the investigation, Amos had nominated Gurganus to receive a third star and serve as the Marine Corps staff director, the service’s third-ranking job. His nomination was placed on hold once the inquiry began.
Since his return from Afghanistan, Sturdevant has been serving as the director of plans and policy for the U.S. Pacific Command.
Amos said the decision to fire the generals was the most agonizing choice he has had to make as Marine commandant. Gurganus and Sturdevant are friends of his, he said, and their collective time in uniform totals almost seven decades.
In a statement Monday evening, Gurganus said, “I have complete trust and confidence in the leadership of our Corps and fully respect the decision of our Commandant.”
Gurganus and Sturdevant will be allowed to retire, but Amos said it will be up to Navy Secretary Ray Mabus to determine their final rank. If allowed to retire as major generals, they would be eligible to receive an inflation-adjusted annual pension of about $145,000.
The last two-star general to be fired for combat incompetence was Army Maj. Gen. James Baldwin, who was relieved of command in 1971 following a North Vietnamese attack that killed 30 soldiers at a U.S. outpost, said military historian Thomas E. Ricks.

Hagel Hopes Deal By End October On US Forces In Afghanistan

Agence France-Presse
September 30, 2013


US Defense Secretary Chuck Hagel said Monday he hoped an accord on the future US military presence in Afghanistan would be in place by November, despite President Hamid Karzai's refusal to be rushed.
"I hope we'll have that agreement by the end of October, because we just can't move without it," Hagel told US soldiers participating in a live-fire exercise in South Korea.
The United States plans to pull out the bulk of its 57,000 troops in Afghanistan by the end of 2014 and has tentative plans to retain a smaller force of around 10,000 forces after that.
But a new security agreement is needed to allow for the post-2014 presence, including provisions allowing the United States access to various bases.
"We're working with President Karzai and his government to get that bilateral security agreement completed and signed," Hagel said.
"Once we do that, we can and will go forward. That's critically important," he added.
But Karzai has insisted Afghanistan would not be rushed over the negotiations and has even hinted that an agreement might not be finalised before presidential elections in April next year.
"We are not in a hurry, if it happens in my government it will be good, if not, the new president can discuss it and either accept or reject it," Karzai said in August.

Japan, U.S. To Incorporate Cyber-Defense In Cooperation Guidelines

Japan News
October 1, 2013
Pg. 1


By The Yomiuri Shimbun
The Japanese and U.S. governments will incorporate a policy on how to respond to cyber-attacks in the Japan-U.S. defense cooperation guidelines, a move aimed at countering China, according to Japanese government sources.
China is said to be actively studying the use of cyber-attacks.
Under the new policy, the Self-Defense Forces and the U.S. military would jointly respond if Japan's defense computer system came under a cyber-attack.
The Japanese and U.S. governments plan to agree on the re-revision of the guidelines at a meeting of the Japan-U.S. Security Consultative Committee, also known as a two-plus-two meeting of foreign and defense ministers, scheduled to be held in Tokyo on Thursday. The bureau chief-level Subcommittee for Defense Cooperation is expected to have concrete discussions on the matter for more than a year.
The current guidelines define cooperation between the two countries in three situations--peacetime, when Japan comes under armed attack and when there is an emergency around Japan that could seriously affect the country's peace and security. The guidelines do not refer to cyber-attacks.
However, there have recently been an increasing number of cyber-attacks against the Japanese and U.S. governments, and there is a high risk that the communication and command systems of the SDF and the U.S. military stationed in Japan may come under such attacks.
Therefore, according to the sources, the Japanese and U.S. governments judged it is necessary to define bilateral cooperation in dealing with cyber-attacks in the guidelines.
Specifically, the two countries will discuss how to communicate and cooperate during peacetime and how to respond to an enemy state's possible cyber-attack against their missile defense or radar systems prior to attacks using ordinary weapons such as missiles and airplanes, the sources said.
Cyberspace is the fifth field of military operations along with ground, sea, air and space. Developing a defense system to cope with cyber-attacks is an urgent task for Japan.
However, the Japanese government sets strict requirements for initiating the right to self-defense under the current interpretation of the Constitution. Therefore, legal limits are unclear as to how vigorous a counterattack Japan could undertake as part of its right to self-defense if the country comes under a cyber-attack that does not involve weapons.
A panel concerning the re-definition of a legal basis for security, which is an advisory body to Prime Minister Shinzo Abe, is currently discussing legal issues related to countering cyber-attacks. The Japanese government will discuss with the U.S. government the re-revision of the guidelines based on outcomes of the panel's discussions.

Chinese Ships In Disputed Waters On National Day: Japan

Agence France-Presse
September 30, 2013


Chinese ships sailed into Tokyo-controlled waters on Tuesday as Beijing celebrated its National Day and as Japan and the United States prepare for talks on their defence pact.
Four vessels from the Chinese coastguard entered the 12-nautical-mile territorial waters of the Senkaku islands at around 9:00 am (0000 GMT) and stayed for about six hours before leaving, the Japanese coastguard said.
China calls the islands the Diaoyus and says they belong to Beijing.
The incursion came as US Secretary of Defense Chuck Hagel and Secretary of State John Kerry prepare to head to Tokyo for a meeting Thursday with Japanese counterparts Itsunori Onodera and Fumio Kishida.
Japan's hawkish Prime Minister Shinzo Abe wants Tokyo to play a more self-confident role on the world stage and for its military to shoulder more of the burden of the defence pact with Washington.
The so-called "2+2" meeting will discuss operational arrangements for the Tokyo-Washington alliance, which were last amended in 1997, officials have said.
The latest incident comes on the anniversary of the founding of the People's Republic of China in 1949, a day marked by a public holiday throughout the country.
In recent months there have been fewer incidents than in the opening stages of the latest row over the islands, which erupted in September last year. However, China has apparently loosely tied the sallies to significant events, either diplomatic or domestic.
Observers say Beijing wants to create a "new normal" by demonstrating that Japan no longer has effective control over the islands. It hopes that might force Tokyo to the negotiating table over their future -- something Japan has repeatedly ruled out.
Tokyo is not prepared even formally to acknowledge the existence of any dispute.
Asia-watchers say the tense stand-off could erupt into a limited armed conflict, with some warning that it may even draw the United States in.
So far there has been little diplomatic headway on finding a solution, although both sides have made qualified offers of talks.
The long-running dispute over the ownership of the islands flared into a bitter row about a year ago when Tokyo nationalised part of the chain.

China-U.S. Military Ties Grow As Countries Eye Each Other At Sea

September 30, 2013


By Bloomberg News
China’s official People’s Daily newspaper lambasted the U.S. when it led the most recent RIMPAC naval drill, the Pacific Ocean military simulation held every other year. The 22-nation exercise reflected Washington’s bid to “contain the military rise of another country,” it said.
Next year, Chinese ships will join the Rim of the Pacific exercise for the first time. During a visit to the Pentagon last month, Foreign Minister Wang Yi described military ties as a “bright spot” in the U.S.-China relationship.
Wang’s words and China’s participation reflect a changed attitude as the world’s two biggest militaries boost contacts despite competing for influence in the Asia-Pacific, home to shipping lanes and resource reserves. The closer ties will be tested as China grows more assertive in a region dotted with nations that would call for U.S. help if attacked.
“The competition and conflicts between China and the U.S. will still be there, but it will prevent them from escalating to an unmanageable level,” Yan Xuetong, dean of the Institute of Modern International Relations at Tsinghua University in Beijing, said by phone. “It is preventable diplomacy rather than positive cooperation.”
U.S.-China ties will be on display at next week’s Asia-Pacific Economic Cooperation forum leaders meeting in Bali. China’s territorial disputes in the South China Sea may be discussed, along with changing U.S. and Chinese roles in the region.
Military competition between the the U.S. and China is on the rise even as the two foster closer links, with China’s defense budget more than doubling since 2006. Though its military spending is less than one-fifth of the U.S., China has developed drones, stealth fighters and an aircraft carrier while deploying a type of anti-ship ballistic missile the U.S. says is meant to threaten U.S. carriers in the region.
That buildout comes as China has pushed its territorial claims more forcefully in the South and East China seas and as the U.S. Navy plans to move more forces to the region in a strategic shift.
China’s naval expansion “is largely about countering” the U.S. Pacific Fleet, Captain James Fanell, deputy chief of staff for intelligence and information operations at the U.S. Pacific Fleet headquarters in Hawaii, said in a January presentation at a conference in San Diego.
“They want to have the capability to make sure that events do not occur in those three seas that they do not approve of,” said Bernard Cole, a former Navy officer who teaches at the National War College in Washington, referring to the Yellow, East and South China seas. “The problem from a U.S. perspective is that we have mutual defense treaties with South Korea, Japan and the Philippines.”
Recent contacts offer a counterpoint to unease on both sides. In August, China’s Defense Minister Chang Wanquan visited the Pentagon and the commander of China’s navy, Admiral Wu Shengli, got a tour of a U.S. Los Angeles-class attack submarine in San Diego in September. Also last month, three Chinese ships joined search-and-rescue exercises with the U.S. off Pearl Harbor, Hawaii.
RIMPAC is held by the U.S. Pacific Fleet in seas around the Hawaiian islands. The exercises once trained for conflict with the Soviet Union and later included Russia as a participant. China was an observer to the drills in 1998.
Chinese State Councilor Yang Jiechi announced China would attend the exercise after a summit between President Barack Obama and President Xi Jinping in California in June. During the talks, the two vowed to build “a new type of military relations,” Yang said, according to the official Xinhua News Agency.
“This is to us a very visible manifestation of the idea that a rising China can provide a positive contribution to international security,” U.S. Undersecretary of Defense for Policy James Miller said of China’s participation in RIMPAC when he visited Beijing Sept. 10.
Still, closer ties between the U.S. and the People’s Liberation Army can be reversed, Richard Bitzinger, a senior fellow at the S. Rajaratnam School of International Studies in Singapore, said by phone. The visits and the RIMPAC exercises are the “warm fuzzies of military diplomacy,” he said.
U.S. reconnaissance as well as arms sales to Taiwan remain problems in the military relationship with China, Zhao Xiaozhuo, a researcher with the PLA Academy of Military Science, wrote in the People’s Daily in August.
China’s participation in RIMPAC sparked concern in the U.S. Rep. Randy Forbes, a Virginia Republican, introduced an amendment to the 2014 National Defense Authorization Act seeking to limit Chinese exposure to “sensitive information obtained through military-to-military contacts.”
“This it not like turning over an entirely new leaf, this is just one small step forward to develop a slightly more positive relationship with the PLA,” Bitzinger said. “There’s going to be steps forward and steps backward. And every time there’s a step backward generally U.S.-allied ties get stronger.”

Ball In Indian Court On Co-Development Projects: Carter

Press Trust of India
October 1, 2013


By Lalit K Jha
Washington (PTI) -- After offering a number of specific proposals to co-develop and co-produce high-tech defence systems, the US is awaiting a response from India, a top defence official has said.
"On this trip, I put forward quite a large number of them," Deputy Secretary of Defence Ashton Carter told a Washington audience, more than a fortnight after he travelled to India to submit a series of specific proposals related to co-development and co-production.
While the list has not been revealed, one proposal Carter has made public is for co-developing the next generation of the Javelin anti-tank missile.
"I'm not prepared to say what they are, because I want my Indian colleagues to have a chance to take a look at them, but they're ideas that come from our industry. So it's not true that they've turned down proposals or a large number of things have been sifted through," Carter said in response to a question at the Center of American Progress.
"I think they are giving very serious consideration to some of the proposals we put forward last year. These are things where they have to consider whether they meet their military requirements and whether they have the budget to pay for them, so it takes a little time for them to figure it out, but they haven't turned it down," he said.
Carter said the industry on both sides is enthusiastic about these proposals. The US government has concluded that it is the US interests to expedite them, he said.
"Now it's in India's court. But it's only been two-and-a-half weeks or so since I left. And I'm going to do another round of them here, where we're going to go out to US industry again, because in the first round, I think we got a lot of very good proposals, but they were mostly from companies that had done some business in India and had kind of figured out how to work with India," he said.
"We also want to draw in companies that haven't tried India yet or have been afraid to deal with India, and I believe we can reduce those barriers to entry to the point where India is a very attractive market," Carter said.
"I'm not discouraged at all. And it's more than destiny. It is hard work on our part, as well. I'm very encouraged by the pace of things we're doing," he said.
Responding to questions, Carter asked the industry to get in touch with him directly if they have any difficulties in arms sale to India.
"I read my own e-mail. I'll get it to the right person. I don't mind. Just send it to me," Carter told the Washington audience giving his email.
"It is frustrating. We in the Department of Defence are trying to remove as many obstacles as we can. Those of you who are doing business there, I encourage you to be in touch with us, be it directly in touch with me - I'll work these problems," he said.
"We have history on our side. And all we have to do is remove some of these picayune obstacles, and we'll do them," he added.

Inspectors To Begin Syria Work

Los Angeles Times
October 1, 2013
Pg. 3


Team plans to employ low-tech means to disable equipment used to assemble chemical weapons.

By Shashank Bengali
The fast-paced effort to eliminate Syria's chemical weapons will kick off Tuesday when the first 20 international experts arrive in Damascus to prepare for field inspections.
The advance team will meet with senior Syrian officials to lay the groundwork for a complex effort that aims to impound, dismantle, remove or destroy all of President Bashar Assad's toxic weapons by mid-2014 under a United Nations Security Council resolution approved Friday.
The Organization for the Prohibition of Chemical Weapons, the international body that is conducting the work, said 20 additional inspectors would go to Syria early next week to start disabling the equipment used to assemble chemical munitions. Once complete, that would largely remove the threat of future poison gas attacks by Syrian forces.
"In the first week they will be setting up operations and getting things primed for the hands-on, formal verification work next week," OPCW spokesman Michael Luhan said by telephone Monday from The Hague, where the organization is based.
"So far, at this point, we have nothing we can complain about in terms of cooperation" from Assad's government, Luhan added. "We make no assumptions about the future, but for now it's businesslike and cooperative and efficient."
The inspectors' first priority is to disable the equipment used to mix precursor chemicals into sarin or VX nerve gases and pour the lethal material into bombs, shells and rockets. Inspectors will seek to destroy the mixing and filling apparatus by Nov. 1 by removing parts, pouring concrete into machines, running engines without motor oil until they seize up, and other mostly low-tech methods.
The teams will include chemists, technical specialists and medical personnel trained to respond to an accidental release of poison gas. With Syria still engaged in a civil war, the inspectors will travel in convoys with unarmed U.N. guards and under the protection of Syrian military forces.
Assad has pledged to cooperate with the plan, which has gathered speed in the two weeks since he acceded to the Chemical Weapons Convention of 1993, the international treaty that bans the production, storage or use of chemical warfare agents.
He subsequently disclosed an initial list of his production and storage sites to the OPCW, which monitors implementation of the treaty.
The advance team, which gathered Monday in Beirut, includes experts who will help Syrian officials complete the legal paperwork needed to disclose their chemical sites. OPCW officials said Syria submitted documents that were not properly formatted under the treaty.
Western officials said Assad's list, which has not been released, was roughly consistent with U.S. intelligence estimates of his operation.
Assad said his government would comply with the Security Council resolution, which demands that Syria relinquish its chemical weapons by the middle of next year or face unspecified consequences.
"Of course we have to comply," Assad told Italy's RAI News 24 in a televised interview. "This is our history to comply with every treaty we sign."
U.S. officials believe that Assad has roughly 45 chemical weapons sites and that all remain under government control. But insurgent forces hold or contest large swaths of Syrian territory, raising doubts that inspectors will be able to move freely.
The inspectors who investigated an Aug. 21 chemical attack outside Damascus came under sniper fire at one point. But the team ultimately confirmed that rockets filled with sarin were fired into neighborhoods in Ghouta, a suburb of Damascus, killing more than 1,000 people.
Pictures and videos of the attack sparked a global outcry, and at one point it appeared all but certain that President Obama would launch punitive missile strikes in retaliation. But a last minute U.S.-Russian diplomatic deal led to the disarmament proposal.
Assad has consistently denied that his forces have used poison gas in the civil war, in which more than 100,000 people have been killed since early 2011.
Special correspondent Nabih Bulos in Amman, Jordan, contributed to this report.

Invoking Sept. 11, Syrian Accuses U.S. Of Hypocrisy

New York Times
October 1, 2013
Pg. 6


By Rick Gladstone and Somini Sengupta
Seeking to rebut Syria’s political opposition and its outside supporters, the Syrian foreign minister on Monday equated his country’s brutal conflict to the Sept. 11 attacks and accused the United States of hypocrisy.
“The people of New York have witnessed the devastations of terrorism, and were burned with the fire of extremism and bloodshed, the same way we are suffering now in Syria,” the foreign minister, Walid al-Moallem, told the United Nations General Assembly meeting in New York. “How can some countries, hit by the same terrorism we are suffering now in Syria, claim to fight terrorism in all parts of the world, while supporting it in my country?”
The United States denounced Mr. Moallem’s assertions. In a statement issued afterward, Erin Pelton, a spokeswoman for the United States Mission, called Mr. Moallem’s remark “as disingenuous as it is offensive.”
She also said, “The fact that the Syrian regime has shelled schools and hospitals and used chemical weapons on its own people demonstrates that it has adopted the very terrorist tactics that it today decried.”
The only positive remarks about the United States in the speech by Mr. Moallem were in his endorsement of efforts made to improve the estranged relationship with Iran, the Syrian government’s only regional ally.
Most of Mr. Moallem’s speech amounted to a point-by-point rejection of the West’s version of the conflict in Syria, which began as a peaceful uprising against President Bashar al-Assad in March 2011. It has turned into a sectarian civil war that has left more than 100,000 people dead and millions displaced, and made the country a magnet for Sunni jihadists bent on toppling Mr. Assad’s ruling Alawite sect, an offshoot of Shiite Islam.
In a reference to a group of Western and Arab countries that support the opposition, Mr. Moallem said, “They are the ones supporting terrorism in my country, in contradiction of all United Nations resolutions and all human and moral values.” He said some of these countries did not want to recognize that Al Qaeda and its affiliates are even fighting in Syria.
“The scenes of murder, manslaughter and eating human hearts were shown on TV screens, but did not touch blind consciences,” he said. “In Syria, ladies and gentlemen, there are murderers who dismember human bodies into pieces while still alive and send their limbs to their families, just because those citizens are defending a unified and secular Syria.”
He ridiculed assertions made by the United States and its allies about the existence of a moderate armed opposition in Syria that has repudiated the jihadists and that advocates an inclusive democracy representing all Syrian groups.
“The claims about the existence of moderate militants and extremist militants have become a bad joke,” he said. “Terrorism means only terrorism. It cannot be classified as moderate terrorism and extremist terrorism.”
Mr. Moallem appeared to refer only obliquely to the Aug. 21 chemical weapons attack on the outskirts of Damascus that left hundreds of people dead, an event that led to intensive diplomacy by Russia and the United States that averted an American-led missile strike on Syrian government targets. As a result, Syria, known to harbor one of the world’s largest stockpiles of chemical weapons, agreed to join the worldwide treaty banning them. A unanimous Security Council resolution approved Friday is aimed at holding Syria to its pledge, under which the weapons will be sequestered and then destroyed by mid-2014.
A United Nations investigation into the Aug. 21 attack did not specify who was responsible, but the forensic information it compiled appeared to implicate Syrian government forces. Mr. Assad has repeatedly asserted that insurgents are using chemical arms.
Reflecting the government’s view, Mr. Moallem said that even with its accession to the treaty banning chemical weapons, “there remains the challenge that is facing all of us: whether those who are supplying terrorists with these types of weapons will abide by their legal commitments, since terrorists, who used poisonous gases in my country, have received chemical agents from regional and Western countries that are well known to all of us.”
He also beseeched the Syrian families who have fled to neighboring Turkey, Lebanon, Jordan and Iraq, many of them confined to refugee camps, to return home. “I appeal, from this platform, to Syrian citizens to return to their towns and villages where the state guarantees their safe return and their livelihood away from the inhuman conditions they suffer in those camps,” he said.
The United Nations, which coordinates the effort to accommodate Syrian refugees, has repeatedly called for more donations to handle the growing populations in the camps. António Guterres, the high commissioner for refugees, said in a statement on the refugee agency’s Web site on Monday that more than 2.1 million Syrians had registered as refugees and that the crisis was threatening the host countries’ “social and economic fabric.”
The Syrian foreign minister spoke as the Security Council was considering issuing a statement urging all sides in the conflict to allow access to humanitarian aid.
A Security Council statement lacks the coercive power of a resolution, which was likely to have been opposed by Russia, Syria’s principal ally on the Council. Diplomats nonetheless said they wanted to seize on the momentum of last Friday’s chemical weapons resolution, rather than sink into protracted talks once more.
A number of humanitarian agencies, including Oxfam and Doctors Without Borders, along with the United Nations agency that coordinates humanitarian relief, have called on the Council to urge the warring parties to allow the unmolested movement of emergency relief into the country.
In Syria, the group of chemical weapons inspectors who returned to the country last week after their investigation of the Aug. 21 attack have left after six days, a United Nations spokesman said. The spokesman, Martin Nesirky, said the inspectors had visited at least one other suspected attack site, spoken to survivors and inspected medical documents.
Mr. Nesirky said the inspectors had not yet investigated the site of a suspected attack on March 19 in Khan al-Assal, near Aleppo, in which the Syrian authorities and insurgents have blamed each other for chemical weapons use.
Under Syria’s commitment to surrender its chemical arsenal, an advance team from the Organization for the Prohibition of Chemical Weapons, the Hague-based group that monitors compliance, will arrive in the country on Tuesday.

Netanyahu Urges U.S. To Boost Iran Curbs

Wall Street Journal
October 1, 2013
Pg. 1


By Jay Solomon and Carol E. Lee
Israeli Prime Minister Benjamin Netanyahu pressed the U.S. for stronger sanctions on Iran even as it pursues nuclear talks, in an emerging conflict between the two allies amid a thaw between Washington and Tehran.
Mr. Netanyahu, who met with President Barack Obama at the White House on Monday, also said Iran needed to completely dismantle its "military nuclear program" before the West should roll back financial pressure or the threat of military force against Iran's nuclear installations.
The line set by Israel's leader differed from the White House's position that Tehran could maintain some of its nuclear-enrichment capabilities if it allowed the international community to verify that Iran's program was solely for peaceful purposes.
"Iran is committed to Israel's destruction, so for Israel, the ultimate test of a future agreement . . . is whether or not Iran dismantles its military nuclear program," Mr. Netanyahu said. "It is Israel's firm belief that if Iran continues to advance its nuclear program during negotiations, the sanctions should be strengthened."
The Israeli leader spoke during a break from 2 1/2 hours of meetings with Mr. Obama -- a significant chunk of the president's time as a partial shutdown of the U.S. government loomed. Vice President Joe Biden, Secretary of State John Kerry and other top officials also attended the meetings, and Mr. Netanyahu met separately for an hour with Mr. Biden.
The Obama administration has been working aggressively to win Israel's buy-in for diplomacy with Iran. The White House worries Mr. Netanyahu could make good on his threats to launch unilateral strikes on Iran's nuclear facilities, potentially sparking a wider Mideast war and upending delicate Arab-Israeli peace talks, according to U.S. and Israeli officials. The U.S. also works closely with Israel on intelligence gathering and counterterrorism operations.
The meeting between Messrs. Obama and Netanyahu was their first since the U.S. and Iran took tentative steps last week to thaw more than 30 years of animosity and agreed to engage more directly in negotiations over Tehran's nuclear program.
Mr. Netanyahu will address a meeting of the United Nations General Assembly on Tuesday. He warned in last year's address that Iran was rapidly approaching a red line that could trigger war.
On Friday, Mr. Obama spoke on the phone for 15 minutes with his Iranian counterpart, Hasan Rouhani, the first conversation between U.S. and Iranian presidents since Iran's 1979 Islamic revolution. International talks aimed at curtailing Tehran's nuclear program are set to resume in mid-October in Geneva.
The warming between Washington and Tehran has unnerved Mr. Netanyahu's government and some of the U.S.'s Arab allies who fear the diplomacy is moving too fast.
Israeli officials have cautioned the U.S. that Tehran would seek to use the cover of diplomacy to continue advancing its nuclear program. Israel estimates that Iran already has enough fissile material to make an atomic bomb, if Tehran decides to enrich its uranium stockpiles further.
Arab allies of the U.S. fear Mr. Rouhani could use better relations with Washington to bolster Tehran's finances and further threaten the interests of countries such as Saudi Arabia, the United Arab Emirates and Bahrain.
Mr. Obama stressed to Mr. Netanyahu during their public remarks that the U.S. wasn't naively headed into the negotiations and that Washington remained committed to denying Iran nuclear weapons, by force if necessary.
"Because of the extraordinary sanctions that we have been able to put in place over the last several years, the Iranians are now prepared, it appears, to negotiate," Mr. Obama said. "As president of the United States, I've said before, and I will repeat that we take no options off the table, including military options."
Israel and the Arab allies, as well as members of Capitol Hill, remained skeptical about the Iranian diplomatic track.
Messrs. Obama and Netanyahu both said on Monday that the unprecedented international sanctions imposed on Tehran were the primary reason Mr. Rouhani won Iran's June elections and has pledged to return to the negotiating table.
But Israel and the U.S. appear at odds over whether to increase the sanctions while the negotiations take place.
U.S. officials have concluded that enforcing new sanctions on Tehran at this moment could weaken Mr. Rouhani domestically by feeding into Iranian hard-liners' views that Washington will never accept a deal with Iran's theocratic leaders.
These officials said new sanctions should be readied but only implemented if the negotiations falter.
Mr. Netanyahu, conversely, said on Monday that Iran would agree to giving up its nuclear program only if it is facing economic collapse.
"A credible military threat and strong sanctions, I think, is still the only formula that can get a peaceful resolution of this problem," he said.
A coalition of Republican and Democratic lawmakers are backing that view. Legislation is being prepared in the Senate that seeks to enforce a total ban of international purchases of Iranian oil over the next year.
A sanctions bill Mr. Obama signed in late 2011 has played a major role in cutting Iran's oil exports in half. The proposed legislation would demand international buyers cease all Iranian oil purchases or risk losing access to America's financial system.
"Our resolve to prevent Iran from achieving a nuclear weapons capability remains unchanged, and we will not hesitate from proceeding with further sanctions and other options to protect U.S. interests," said Sen. Robert Menendez (D., N.J.), chairman of the Senate Foreign Relations Committee, after meeting Mr. Netanyahu.
Differences between the U.S. and Israel over what nuclear capabilities Iran could maintain as part of a negotiated settlement also are apparent.
Mr. Netanyahu's government maintains that Iran should be allowed to maintain none of the technologies needed to produce nuclear fuel on its soil. Israel sees that function inherently as a part of Tehran's military program because as long as Iran maintains the ability to enrich uranium domestically it maintains the ability to make bombs.
The Obama administration hasn't taken a firm position on whether Iran could be allowed to continue to make nuclear fuel. U.S. officials have only stated that Iran has the right to have a civilian nuclear program.
While Mr. Netanyahu is pushing Israel's position at the U.N., the White House is also promoting its Iran policy to Jewish Americans and Capitol Hill.
On Monday, Mr. Biden addressed J Street, a liberal pro-Israel organization that lobbies Congress on Mideast issues.
"We don't know if Iran is willing to do what is necessary to get there" and reach a deal, the vice president told a receptive audience. "But we. . .are committed to finding out."
The Obama administration has been closely monitoring Iran's economy as a gauge to understand why Mr. Rouhani has so aggressively embraced diplomacy since taking office in August.
The Iranian president said publicly during his appearances in New York that the state of Iran's economy was worse than what he imagined it to be during his country's presidential campaign. Mr. Rouhani's calls for a nuclear deal to be completed in between three to six months were a sign to some Iran watchers that Tehran might be running low on foreign-exchange reserves, because of the growing impact of sanctions.
The International Monetary Fund put Iran's foreign-exchange reserves at $90 billion at the end of 2012. Outside experts who have studied Tehran's finances believe these reserves could now be as low as $70 billion and that Iran may have access to as little as $15 billion, because of sanctions and the country's inability to repatriate some of its U.S. dollar holdings.
"Iran's fully accessible reserves may cover as little as three months of imports," said Mark Dubowitz of the Foundation for Defense of Democracies, a Washington think tank that advises Congress on Iran sanctions.

Iran Staggers As Sanctions Hit Economy

New York Times
October 1, 2013
Pg. 1


By Thomas Erdbrink
TEHRAN — The owner of a bus manufacturing company here admits that he is a man who likes his routines, and so every day he continues to commute to his downtown office. There he orders cups of tea, barks orders to his factory foremen over the phone and signs a steady flow of papers his employees put on his desk.
“It looks like I’m working, right?” the owner, Bahman Eshghi, said, folding his hands. “No. In reality I am praying, either for a miracle to save our economy or for a fool to come in and buy my factory.”
For years, Iran’s leaders have scoffed at Western economic sanctions, boasting that they could evade anything that came their way. Now, as they seek to negotiate a deal on their nuclear program, the leaders are acknowledging that sanctions, particularly those applied in 2010 on international financial transactions, are creating a hard-currency shortage that is bringing the country’s economy to its knees.
This was evident in New York last week when Iran’s new president, Hassan Rouhani, emphasized the need to act swiftly to resolve the standoff over Iran’s nuclear program, perhaps in three to six months. While there may well be political reasons for him to be in a hurry, Mr. Rouhani and other officials admitted that the sanctions were hurting.
In repeated meetings during the week, Mr. Rouhani and his foreign minister, Mohammad Javad Zarif, said the government’s financial condition was far more dire than the previous president, Mahmoud Ahmadinejad, had let on.
Mr. Rouhani and Mr. Zarif did not publicly specify the severity of the cash squeeze. But Western economists believe the crisis point may be much closer than previously thought, perhaps a matter of months. Iran news outlets have reported that the government owes billions of dollars to private contractors, banks and municipalities.
Because of the sanctions, oil sales, which account for 80 percent of the government’s revenue, have been cut in half. While Mr. Ahmadinejad had asserted that Iran had $100 billion in foreign exchange reserves, the total had shrunk to $80 billion by mid-2013, according to a new study by Roubini Global Economics, a research firm based in New York, and the Foundation for Defense of Democracies, a Washington group that advocates strong sanctions against Iran.
But even that vastly overstates the amount readily available to Iran. Three-quarters of the $80 billion is tied up in escrow accounts in countries that buy Iranian oil — the result of an American sanctions law that took effect in February. Under that law, the money can be spent only to buy products from those countries.
Even gaining access to the remaining $20 billion is difficult — it has to be physically moved in cash because of Iran’s expulsion from the global banking network known by its acronym Swift, which had allowed the money to be transmitted electronically.
“They can’t repatriate the money back to Iran,” said Mark Dubowitz, the executive director of the Foundation for Defense of Democracies. “This is the dilemma Iran finds itself in.”
The sanctions pose other problems. Unable to arrange simple financing for business deals, executives are forced to transfer suitcases of cash through street-level money changers to shady bankers abroad. This is not only costly, with middlemen exacting fees every step of the way, but also dangerous, the cash making a tempting target for thieves.
Lower-level officials here and businesspeople are even more alarmed than the leadership, with some saying Iran’s economy is already on the verge of collapse.
The frustrations encountered by Mr. Eshghi (pronounced Esh-REE) in trying to conduct normal business deals are by all accounts typical.
A self-made entrepreneur, Mr. Eshghi, 43, said he had enough savings to scrape by for four more months. After that, if nothing changes, he said, he will have to make the difficult drive to the poor city of Malayer and tell his remaining 100 employees — out of 200 a few years ago — that he is closing the factory. The sanctions have so increased the cost of doing business that he is losing money on every bus the factory turns out, he said.
“Like a camel can survive in the desert on the fat in his hump, I have survived on my savings in recent years,” Mr. Eshghi said. “But now the end is near. I’m giving up.”
Before the sanctions were imposed, Mr. Eshghi, whose thick hair has grayed since he started his business in 2005, would walk to the bank just around the corner from his office. There he would sign a letter of credit to buy parts from China, pay a small portion of his order up front, have tea with the clerk and be back behind his desk in less than an hour.
But things are far more complicated these days. When he wants to order components for his buses now, Mr. Eshghi has to follow a long, complicated and sometimes dangerous procedure.
His partner in China also works with European carmakers, who might drop him as a supplier if they know he is dealing with an Iranian, and is scared to death that “the Americans” will find out and punish him with high fines. “They treat me like a mistress they have to keep secret,” Mr. Eshghi said.
To avoid detection, his partner works through a third party. “Let’s call this middleman Mr. Chen,” said Mr. Eshghi. “Mr. Chen says, ‘No letter of credit,’ because the Americans have already fined the only bank willing to work with Iran in China, the Bank of Kunlun.”
So Mr. Eshghi, without any bank credit, must pay the banker all the money up front, through a bank in Dubai, where his wife and children have moved. First, he needs to gather all the cash rials, Iran’s currency, and give them to a money-changer. The money-changers then send the cash through couriers to partners in other countries who have stepped in to fill the void, asking up to 10 percent in transfer fees.
“Just last week one of these money-changers disappeared into thin air, stealing around $160,000 from me,” Mr. Eshghi said, lifting his hands in the air in a sign of desperation.
Barring theft, the payment slowly makes its way to the banker in China, who also takes a cut. Only then will the Chinese company begin to fill Mr. Eshghi’s order. “They promise loading in 10 days, but take two months.”
When the shipment finally arrives at the factory, “there are lots of issues,” Mr. Eshghi said, saying he felt he was losing on all sides. If the products are late or defective, he said, there is not much he can do about it. “What do I do? Send it back? That’s impossible,” he said. “I have to trust everybody and take all the risks.”
In July, he joked, he “nearly had a heart attack" when he found out that President Obama had imposed sanctions against any company working with Iran’s automotive industry. “That’s me,” he said. “I feed 100 families in a city where nobody has work. Is Mr. Obama waging economic war on our leaders or on us?”
Businesspeople in Iran have seen this coming and have been adapting, said one economic analyst, who asked not to be named to avoid trouble with the government. “But the government is slow and way too optimistic in their predictions,” the analyst said. “Now they are starting to feel the full force of what has been unleashed on them.”
The sanctions have introduced numerous distortions into everyday life. For example, Iran is allowed to use money it earns from oil sales only to buy products from the purchasing country. As a result, Iranian supermarkets are filled with low-quality Chinese products, while several infrastructure projects are being built by Chinese companies, rather than Iranian.
“We don’t have an oil-for-food program like Iraq,” the analyst said. “We have an oil-for-junk program.”
One economist, Mohammad Sadegh Jahansefat, said the government had been taken hostage by countries benefiting from the sanctions — particularly China, which he called the worst business partner Iran had ever had.
“China has monopolized our trade — we are subsidizing their goods, which we are forced to import,” he said, adding of its work in the energy industry, “They destroy local production and leave oil and gas projects unfinished so that no one can work with them.”
The state’s dire financial straits are especially tough on contractors and their workers. Akbar, 50, a building contractor from Isfahan, said a big state foundation had not paid $40,000 it owed him. “I will never again work for the state,” he said. “We just can’t trust they will pay up.”
Iranian business families are used to dealing with the roller coaster that Iran’s economy is. Patience is key, said Ali Khalilpour, 34, who operates a chain of sports apparel stores with his father. “We have fired many people, lost dozens of stores and lots of money following the collapse of the national currency,” he said.
There were times when the rial would fall 20 percent in value in a few months while the Khalilpours owed the equivalent of millions of dollars to Western sports brands in Dubai. They were forced to absorb the loss.
“It’s is hard, but some things are beyond your control,” Mr. Khalilpour said, before finding a silver lining.
Most of his competitors have gone bankrupt, he said, leaving the field to his family.
“We have faith that good times are finally coming to this country,” He said. “When they come, we will be the biggest player in the market.”
Rick Gladstone contributed reporting from New York.

Russia Vying For Influence In Mideast

Washington Post
October 1, 2013
Pg. 15


Traditional U.S. allies being wooed in echo of Cold War maneuvering

By Liz Sly
BEIRUT -- Two decades after the collapse of the Soviet Union affirmed the United States as the dominant power in the Middle East, a resurgent Russia is seeking ways large and small to fill the vacuum left by the departure of American troops from Iraq and the toppling of U.S. allies in the Arab Spring revolts.
The recent diplomacy that averted a U.S. strike on Syria underscored the extent to which Moscow's steadfast support for its last remaining Arab ally has helped reassert Russia's role. Russian President Vladimir Putin has emerged as the world leader with the single biggest influence over the outcome of a raging war that is threatening the stability of the wider region, winning concessions from both President Bashar al-Assad and President Obama to secure a U.N. resolution requiring Syria to surrender its chemical weapons arsenal.
Less conspicuously, Russia has been nurturing new alliances and reviving old friendships further afield, reaching out to countries long regarded as being within the American sphere of influence in ways that echo the superpower rivalries of the Cold War era.
Those countries include Egypt and Iraq, traditional Arab heavyweights that have been exploring closer ties with Moscow at a time when the Obama administration has signaled a reluctance to become too deeply embroiled in the region's turmoil.
In his address to the United Nations last week, Obama stressed that he does not regard the Middle East or the conflict in Syria as an arena of competition with Washington's bygone foe.
"This is not a zero-sum endeavor. We are no longer in a Cold War. There's no Great Game to be won," Obama said, referring to an earlier period of big-power rivalry in which the British Empire and Russia's czars vied for influence across Central Asia.
Whether Russia is equally determined not to compete with the United States in the strategically vital region is in question, however, Arab analysts say.
Saudi Arabia, the region's strongest Arab power and Washington's staunchest Arab ally, is deeply suspicious of Russia's maneuvering and is convinced that Moscow is engaged in an effort to outwit the United States at Riyadh's expense, said Mustafa Alani of the Dubai-based Gulf Research Center.
The overtures between the United States and Iran, a close Moscow ally, further reinforce anxieties in Riyadh and other Persian Gulf capitals that Russia is seeking to eclipse the U.S. role in the region, Alani said.
"The view is that Russia is looking at the whole problem in the Middle East from the old position of the Cold War," he said. "Wherever America is, they have to spoil the game. They don't have any principles. Their only policy is to counter the Americans."
That is not the case, said Fyodor Lukyanov, chairman of the Moscow-based Council on Foreign and Defense Policy. Rather, Lukyanov said in an e-mail, it is Saudi Arabia and its gulf allies that "are trying to play great games themselves . . . and arrogantly casting stones in a glass house."
Russian intentions in the region are rooted in many concerns, but foremost among them is Moscow's determination "to emphasize Russia's role in the world as an indispensable nation, especially vis-a-vis American helplessness to settle problems," he said.
The intent is being felt. Iraqi Prime Minister Nouri al-Maliki, who became premier three years after the 2003 U.S.-led invasion, has made two trips to Moscow in the past year and none to Washington. His talks were focused on a $4 billion defense deal under which Russia will supply Iraq with a range of armaments, including fighter jets, which are expected to be delivered soon.
The size of the deal is dwarfed by the more than $18 billion worth of arms deals concluded between Baghdad and Washington over the past eight years. But key elements of those - including coveted F-16 fighter jets - have yet to arrive.
Iraqi officials say they turned to Moscow only because they were frustrated by the slow pace of U.S. arms deliveries at a time when the conflict in neighboring Syria has heightened anxieties about Iraq's stability.
Russia, concerned about escalating violence in Iraq, "sees a vacuum there, which she is trying to fill," Lukyanov said.
Meanwhile, strains between Egypt's new military-backed rulers and Washington have led Egyptian leaders to encourage Russian advances. A Russian tourism delegation came to the country to explore ways of expanding visits by Russians at a time when most Westerners have been staying away, and interim Egyptian Foreign Minister Nabil Fahmy, a former ambassador to Washington, chose Moscow for his first visit beyond the region in his new job.
In an interview with the London-based al-Hayat newspaper, Fahmy said he did so mainly because Russia was the first of several countries he approached that responded with an invitation.
"I asked to visit a number of states and Russia responded fast by setting a date," Fahmy said. He stressed, however, that the visit was not intended to signal a major shift in Egypt's allegiances. "We are not heading east at the expense of the West," he said.
Indeed, although many U.S. allies in the Middle East are frustrated with the Obama administration's policies, it is unlikely that any would seriously contemplate abandoning Washington in favor of Moscow, if only because the military imbalance between the two countries is so great, said Salman Shaikh, director of the Brookings Doha Center in Qatar.
Only the United States, with its extensive network of military bases across the region and its superior military technology, can offer the kind of security guarantees that jittery Arab nations seek, he said.
Alani, who consults closely with Persian Gulf leaders, acknowledged the dependence.
"With all our complaining, it is not going to happen," he said of the likelihood that regional powers would shift allegiances. "We understand there is no alternative, and we have to live with all the faults of U.S. policy.
"But that doesn't mean we are not looking around."

Russia Says To Push For Mideast Free Of Mass-Destruction Weapons

September 30, 2013


By Steve Gutterman, Reuters
MOSCOW -- Russia wants to revive plans for a conference on ridding the Middle East of weapons of mass destruction now that Syria has pledged to abandon its chemical arms, Foreign Minister Sergei Lavrov said in comments published on Monday.
Such a move could put Moscow at odds with Washington which announced the conference would be delayed last year. Analysts said it feared the event would be used to criticise its ally Israel, believed to be the region's only nuclear-armed state.
Russia has been pushing to extend its influence in the Middle East. It initiated a U.N. deal to get Syria to abandon its chemical arms after Washington threatened military strikes to punish Damascus for a sarin gas attack on rebel areas.
"We will seek to have this conference take place," Lavrov said in an interview with the Russian daily Kommersant.
Lavrov said Syria's agreement to destroy its chemical weapons by next June should trigger a broader effort.
"In the current situation, it is particularly important to make the ... non-possession of weapons of mass destruction universal in this explosive region," he said.
Russian President Vladimir Putin has said Syria's government always viewed its long-undeclared chemical arsenal as a counterweight to the nuclear arms Israel is believed to possess. Israel has never acknowledged having atomic weapons.
A plan for a meeting to lay the groundwork for the possible creation of a Middle East free of weapons of mass destruction was agreed in 2010, co-sponsored by Russia, the United States and Britain.
But Washington said the meeting would be delayed just before it was due to start at the end of last year. No new date has been announced.
"Our American partners baulked and sidestepped this," Lavrov said in the interview, published the same day Israeli Prime Minister Benjamin Netanyahu was to meet U.S. President Barack Obama.
The United States also rejected a Russian proposal to include a line in a U.N. Security Council resolution saying that Syria's plan to scrap chemical weapons was an important step toward a WMD-free Middle East, Lavrov told Kommersant.
Russia has been Syria's biggest diplomatic ally during the uprising against President Bashar al-Assad that has killed more than 100,000 people.
Speaking to the U.N. General Assembly on Monday, Syrian Foreign Minister Walid al-Moualem called for the creation of a zone free of weapons of mass destruction but said it was "unachievable without the accession of Israel".
Arab states such as Egypt and Bahrain have made similar calls in speeches at the General Assembly.
But U.S. and Israeli officials see Iran's nuclear activity as the main proliferation threat in the Middle East.
They have said a nuclear-free zone could not be a reality until there was broad Arab-Israeli peace and Tehran curbed its nuclear programme, which they fear is aimed at developing nuclear weapons capability.
Washington remained committed to working toward a Middle East zone free of weapons of mass destruction (WMD) and their delivery systems, the U.S. envoy to the U.N. nuclear agency said earlier this month.
Additional reporting by Michelle Nichols at the United Nations and Fredrik Dahl in Vienna.

Wave Of Bombs Across Baghdad Kills 55

September 30, 2013


By Sinan Salaheddin, Associated Press
BAGHDAD — A new wave of bombs tore through Baghdad on Monday, officials said, killing at least 55 people. Most of the blasts were car bombs detonated in Shiite neighborhoods, the latest of a series of well-coordinated attacks blamed on hard-line Sunni insurgents determined to rekindle large-scale sectarian conflict.
Multiple coordinated bombing strikes have hit Baghdad repeatedly over the last five months. The Shiite-led government has announced new security measures, conducted counter-insurgency sweeps of areas believed to hold insurgent hideouts, and sponsored political reconciliation talks, but has not significantly slowed the pace of the bombing campaign.
No group immediately claimed responsibility for the deadly wave, but they bore the hallmarks of al-Qaida's local branch in Iraq, known as the Islamic State of Iraq. Al-Qaida is believed to be trying to build on the Sunni minority's discontent toward what they consider to be second-class treatment by Iraq's Shiite-led government and on infighting between political groups.
In addition to helping al-Qaida gain recruits, the political crisis may also be affecting the security forces' ability to get intelligence from Sunni communities.
"Our war with terrorism goes on," Interior Ministry spokesman Saad Maan told The Associated Press. "Part of the problem is the political infighting and regional conflicts ... There are shortcomings and we need to develop our capabilities mainly in the intelligence-gathering efforts."
The deadliest of Monday's bombings was in the eastern Sadr City district, where a parked car bomb tore through a small vegetable market and its parking lot, killing seven people and wounding 16, a police officer said.
Other parked car bombs went off in quick succession in the Shiite neighborhoods of New Baghdad, Habibiya, Sabaa al-Bour, Kazimiyah, Shaab, Ur, Shula as well as the Sunni neighborhoods of Jamiaa and Ghazaliyah. Police officers said 44 people were killed and 139 wounded.
And in the evening, a roadside bomb outside a Sunni mosque within a refinery compound in the south Baghdad district of Dora killed four and wounded 14. Some such attacks on Sunni targets are blamed on hard-line militants targeting rival Sunnis, but there are also indications that Shiite groups have started to retaliate, raising fears of a return to the widespread sectarian killing of 2006-2007.
Medical officials confirmed the casualty figures in Monday's attacks. All officials spoke on condition of anonymity because they were not authorized to talk to the media.
Iraqi security forces sealed off the sites of the attacks as fire fighters struggled to extinguish fires that broke out. The twisted wreckage of cars and remnants of the car bombs littered the pavement.
Iraqi militants often target crowded places such as markets, cafes and mosques, seeking to inflict huge numbers of casualties.
Monday's attacks were the biggest since the Sept. 21 suicide bombings that struck a cluster of funeral tents packed with mourning families in Sadr City, killing at least 104 people.
On Sunday, a series of bombings in different parts of Iraq — including two suicide bombings in the country's relatively peaceful northern Kurdish region — killed 46.
More than 4,500 people have been killed since April. Although overall death tolls are still lower than at the height of the conflict, the cycle of violence is reminiscent of the one that brought Iraq to the brink of civil war.
Associated Press writer Qassim Abdul-Zahra contributed to this report from Baghdad.

Turkey Says Chinese Missile Deal Not Final

September 30, 2013


By Jonathon Burch, Reuters
ANKARA -- Turkey said on Monday it could still reconsider its decision to co-produce a long-range air and missile defence system with a Chinese firm currently under U.S. sanctions, but said it felt no obligation to heed other countries' blacklists.
Turkey's Defence Ministry announced last week it had chosen the FD-2000 missile defence system from China Precision Machinery Import and Export Corp, or CPMIEC, over rival systems from Russian, U.S. and European firms. Turkey is a member of the NATO transatlantic military alliance.
"We do not consider anything other than Turkey's interests," Turkish Deputy Prime Minister Bulent Arinc told reporters.
"It is not possible for another country to say, 'I have a problem with them, I had put them on a black list, a red list, how could you give them a tender?'" said Arinc, who also serves as the government's spokesman.
CPMIEC is under U.S. sanctions for violations of the Iran, North Korea and Syria Nonproliferation Act, and the United States has expressed "serious concerns" over Turkey's decision. NATO sources said collaboration with China on the system could raise questions of compatibility of weaponry and of security.
Arinc did not single out the United States in his criticism, saying comments from U.S. officials about the decision had been "respectful", but reiterated that Turkey did not need to consult on matters of domestic defence.
"We are a member of NATO and we have had good relations from the beginning with NATO countries, especially the United States. However, when it comes to the subject of defending Turkey ... we have the power to take a decision without looking to anyone else," he said.
Arinc said that while the deal had not yet been completed, the initial selection had been based on the Chinese offer being the most economical and because some of the production would be carried out in conjunction with Turkey.
In Washington, State Department spokeswoman Jen Psaki said the United States has made clear its concerns to Turkey at a high level.
"We have conveyed our serious concerns about the Turkish government's contract discussions with the U.S.-sanctioned company for a missile defence system that will not be inter-operable with NATO systems or collective defence capabilities," Psaki told a daily briefing for reporters. "Our discussions will continue."
Psaki said the United States had taken note of comments by Turkey that the deal was not yet final. If a deal was finalised "then we will talk about that at that point," Psaki added.
President Abdullah Gul was quoted by the English-language Hurriyet Daily News as saying: "The purchase is not definite. ... There is a short list and China is at the top of it. We should look at the conditions, but there is no doubt that Turkey is primarily in NATO."
Some Western defence analysts have said they were surprised by Turkey's decision, having expected the contract to go to Raytheon Co, a U.S. company that builds the Patriot missile, or the Franco/Italian Eurosam SAMP/T.
The United States, Germany and the Netherlands each sent two Patriot batteries and up to 400 soldiers to operate them to southeastern Turkey early this year after Ankara asked NATO for help with air defences against possible missile attacks from Syria.
Turkey has long been the closest U.S. ally in the Middle Eastern region, bordering during the Cold War on the Soviet Union. The U.S. military exercised great influence over a Turkish military that strongly influenced domestic politics.
Under Prime Minister Tayyip Erdogan, elected in 2002, the role of the Turkish military in politics has been curbed. Political and military relations between Ankara and Washington, while still close, play a less central role, and this could be reflected in procurement policy.
A source familiar with the competition said Turkey could still back away from its decision, describing Thursday's announcement as a "selection", not an actual contract award.
The next step was for Turkey to actually negotiate the terms of the deal with the Chinese provider, which could present opportunities to back away from the deal, said the source, adding that U.S. government and industry officials had not received any advance notice about Turkey's intentions.
Raytheon and other losing bidders hope to receive a briefing on the decision, but those meetings have not yet been scheduled. Industry executives hope to schedule those meetings this week.
Industry experts also said the decision appeared to have been based on cost, but they did not expect Raytheon to offer significant price concessions to secure the deal, given its big backlog of orders from other countries for the Patriot system and other missile defence equipment.
Asked about Turkey's decision, a NATO official said it was up to each nation to decide what military capabilities they acquire but that it was also the alliance's understanding the Turkish decision was not final.
"However, it is important for NATO that the capabilities allies acquire are able to operate together," the official said.