Implausible Deniability

President Obama might want to send a thank-you note to Edward Snowden. According to his handlers, the president had no idea that we were monitoring telephones used by German Chancellor Angela Merkel and other world leaders until Snowden spilled a basket of secrets.

But I strongly doubt that Obama has anything nice to say to Snowden (who remains under temporary asylum in Russia), just as I strongly doubt the president’s contention that U.S. spies targeted top foreign leaders and neglected to tell him.

The concept of “plausible deniability” has a long history in American intelligence. The term came into general use nearly 40 years ago, when a committee chaired by Sen. Frank Church, D-Idaho, looked into CIA efforts in the early 1960s to assassinate Cuban President Fidel Castro.

“Non-attribution to the United States of covert operations was the original and principal purpose of the so-called doctrine of ‘plausible denial,’” the committee reported. “ …This concept, designed to protect the United States and its operatives from the consequences of disclosures, has been expanded to mask decisions of the president and his senior staff members.”

That pretty much sums up Obama’s story as told to Merkel. The German news magazine Der Spiegel reported this week that American spying on Merkel may date back to 2002. Der Spiegel and another German publication, Frankfurter Allgemeine Sonntagszeitung, both reported that Obama apologized to Merkel last week and said he would have stopped the monitoring of her calls if he had known about it.

But a third German news outlet, Bild am Sonntag, reported Sunday that Obama was personally briefed on the spying against Merkel in 2010 by National Security Agency chief Keith Alexander. Bild cited an unidentified NSA official for the information.

The NSA flatly denied the Bild report last week, while the White House claimed that all spying directed at Merkel has ceased, without directly confirming that any has actually occurred. The administration was otherwise mum about many details of the mounting diplomatic storm. Various press reports said Obama was on the verge of calling a halt to all spying that targets the leaders of allied nations – though exactly which nations would be considered allies for this purpose is far from clear.

Which brings us back to the White House’s story, reinforced through press leaks that look to me as though they were carefully orchestrated, that the president is not involved in such trivial matters as deciding whether to spy on the leader of Europe’s largest and most powerful nation, one that is especially sensitive to privacy concerns due to its Nazi and Communist history.

The Washington Post, for example, cited anonymous administration officials describing the classified briefings in recent months that allegedly surprised the president with news that his government was spying on heads of state. The Obama administration has aggressively pursued leakers of some classified material, but it seems safe to say that nobody in the Justice Department is interested in ferreting out the source or sources of this conveniently timed account. Sounds like an attempt at plausible deniability to me.

Except that this version of events is implausible. That’s not to say it is not true – I have no independent way of knowing who said what to the president and when – but I know what has not happened. What has not happened is someone, like the head of the NSA, the federal director of intelligence or the White House chief of staff, fired on the spot for failing to warn the president of a pointless spying exercise that was so obviously a major threat to American diplomacy.

It is entirely conceivable that the idea of spying on friendly foreign leaders seemed like a good idea back in 2002. The 9/11 attacks were fresh in our memories, as were the details that the attacks had been organized in Germany and carried out mainly by nationals of Saudi Arabia and Egypt, all of them considered “friendly” countries in varying degrees. Within a year, we would go to war in Iraq, an effort in which Germany was decidedly unhelpful. At that point, the potential benefits of knowing what was being said in the halls of German power might have seemed worth the diplomatic risks.

But that moment was long past by the time Obama took office and received his Nobel Peace Prize for not being George W. Bush. He had lots of time in his first term to rein in the national security apparatus. Apparently, however, Team Obama had other priorities.

The president now risks looking like either a knave for lying to Merkel about what he knew or a fool for not knowing it.

All indications are that the rudderless president and his allies will overcompensate by making overbroad promises, such as never to spy on friendly leaders. How do you put Germany on that list without adding France? After France, what about Israel? After Israel, the Saudis are next in line. At which point the Chinese will show up, waving their checkbook in one hand and their $1.3 trillion in U.S. Treasury debt in the other.

A blog on Foreign Policy magazine’s website summed it up the other day, in a quote from an NSA official. “We’re really screwed now,” said the official, noting that the chairman of the Senate Intelligence Committee, Dianne Feinstein (D-Calif.), also claims to have been kept in the dark all this time.

Yes, the NSA is really screwed now. Unfortunately, few of us could plausibly deny that we are in the same boat.

About Larry M. Elkin 553 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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