Wikileaks to auction Hugo Chavez aide's e-mail trove

When Wikileaks opened for business, the site proclaimed its mission to publish secretive documents from "oppressive regimes in Asia, the former Soviet bloc, Sub-Saharan Africa and the Middle East." What it has been best known for, though, has been taking on a Swiss bank, Mormons, Scientologists, and now, Venezuelan strongman Hugo Chavez. But selling the site's secrets at auction may turn out to be the most controversial decision of all.

Various news outlets like The Guardian and Wired (like Ars, Wired is owned by Condé Nast) are reporting this week that Wikileaks hopes to raise a little cash and attract more analytical researchers to its secret documents by auctioning them off. According to the plan, news outlets would have a set period of time to make use of the documents, which would be freely published for everyone to see at some point down the road.

In this case, the leak in question is an e-mail trove alleged to be from a senior aide to Venezuelan President Hugo Chavez, which may or may not contain tasty information. Wikileaks hopes to attract news organizations with the resources needed to dig through the e-mails, and the exclusivity arrangement would allow the winner to capitalize on the investment.

Buying this kind of information is generally frowned upon in reputable news circles, as it can encourage both forgery and lawbreaking in an effort to attract cash. It also turns secrets into just another form of currency, something that might seem at odds with the high-minded ideals behind Wikileaks.

But, as Julian Assange of Wikileaks told Wired, news outlets won't devote the time needed to sift such document caches since there's no guarantee of a scoop when anyone else might be looking through them at the same time. In a way, then, the auction is designed more as a mechanism to ensure an exclusivity period for the buyer than it is as a way to send the secretive Wikileaks backers on trips to the Bahamas.

5 Radical Real People Who Escaped Poverty

Do you habitually ignore certain numbers that regularly pop up on your phone? You know, like the one from the mortgage company calling because you are 15 days late with a payment. Maybe you own your own business but now find yourself dipping into your retirement savings, cashing out a life insurance policy, and maxing out those emergency credit cards you applied for last year just in case. Or, you might be one of a growing number of citizens who are having an even harder time than that. Whether you are out of a job, simply not making enough at your current job, or you own your own business and perceive a few ominous clouds on the horizon, it can be extremely hard to wake up each day and truly believe that you are going to make something happen to get out from under the rock.

The other day I was listening to a financial podcast where a female caller asked the host how to get out of debt. He responded by asking her how many jobs she and her husband were working and if the total hours worked added up to 60 hours a week. It wasn’t an insult. It was pragmatic advice on how to truly get ahead.

The commentator suggested that they both take a second job each for six months and put all money from the second job towards paying off debt. Fear has gripped the minds of many, and the headlines aren’t helping us at all as we see a new “expert” tell us each day that things are going to get even worse, and much worse than the last guy said they would be.

So, let’s put aside the newspaper and look at some real people who were so radical and inspirational that, in some cases, even Hollywood took notice. Not all heroes have their lives written about in books or turned into blockbuster movies, so we have included some everyday champions, and would love to hear who your heroes are in the comments. We will publish the best examples in an upcoming reader’s choice article, so let us know about your own story or someone you’ve known or been inspired by.

Chris Gardner shows us the importance of self-discipline and perseverance even in the face of worsening conditions. Shame or embarrassment often accompany financial hardship, and can cause paralysis and apathy, where even something as simple as picking up a phone to pursue a sale becomes an impossible task. The big problem here is that a month spent in the dumps mentally can cause things to worsen almost exponentially. So, Gardner shows us who we can be in the face of adversity. But how did he do it?

First, he had someone (or something) that he cared about more than himself–his son–who was completely dependent on him. A child who cannot fend for himself is often the source of motivation for exceptional action, and in this case he didn’t even have time to flinch or think much of his own wants because he had to simply meet basic survival needs. As he had already poured their life savings into buying a portable bone density scanner franchise, he kept making sales appointments after being repeatedly rejected. When his last machine was stolen, he seemingly had nowhere to turn. After taking a free internship at Dean Witter Reynolds, he set out with such a strong drive to survive that it is almost impossible to imagine anyone tackling any business with his discipline without succeeding. If you have seen the movie based on his life “Pursuit of Happyness,” surely you remember the diligence displayed in his cold-calling - he didn’t even put the phone down to hang up so that he could dial the next call immediately.

Mint Tip: Your income is the engine of your finances. If you own your own business or are in a sales role, give yourself a small attainable goal to implement today. It could be as simple as calling everyone on your list whose name starts with the letter A. If you are out of work and discouraged, do as Gardner did and try to find an internship at a company with a lot of growth potential. Don’t be afraid to take a temp job. You never know when your future might already be staring you in the face.

2. Elon Bomani

Elon Bomani found herself penniless and
living in a homeless shelter with a small child after her husband emptied her checking account and they divorced. Luckily, she had perfect credit and was able to obtain $100,000 worth of credit cards to start her own businesses and purchase a home with zero down.

Now, certainly taking out $100,000 in debt and buying a home with 100% financing as she did might not sound like an ideal solution. The lesson comes from learning how she first eliminated miscellaneous debt and later turned that debt to her advantage.

Bomani never was a spendthrift (which is how she managed to have such good credit in the first place) and instead of using credit to buy extravagant items for herself, she used it to invest and grow wealth. There’s no question she took a risk and even though now might not seem like the best time to start a new business, her example shows that sometimes a little discomfort might be just what you need to get out from under. It’s never too late to reeducate yourself.

3. Li Ka-shing

Li Ka-shing is the epitome of the self-made man. His family fled China during the Japanese invasion of 1940 and went to live with his wealthy uncle in Hong Kong. His father passed away shortly after the move and a few short years later, he was forced to drop out of school to take responsibility for the family at age 15. Working at a plastic factory for 16 hours a day he acquired the knowledge necessary to start his own factory and eventually became one of the largest suppliers of plastic flowers in the world. The wealth earned from the plastic factory allowed him to take advantage of a decline in property values in the 1960s and begin purchasing land.

He named his company Cheung Kong after the Yangtze River to reflect his belief in the value of synergy. He is now a billionaire and ranks #11 on the Forbes Billionaires List. So, again, we have an example of how the shake-up of the family unit calls people to a level of self-sacrifice they otherwise wouldn’t have achieved. In a recent commencement speech he offered some of the wisdom of his experiences:

“So what is the secret I want to share? It is something I call the hubris index, an internal and on-going process of weighing and measuring the size and affect of our ego. The hubris index governs not only our attitude, but also our behavior. Are we excessively proud and boastful? Do we fail to listen to people that tell us we’re wrong? Do we refuse to get feedback about the outcome of our acts and decisions? And are we lax in planning in advance for possible problems, consequences, and corrective measures? The humble heart,” says the wise man, is the beginning of all knowledge. It is the pathway to enlightenment, spiritual growth, service, and a life lived with joy.”

I have found myself in hard times with a resistance to take on a job that I thought was beneath me, and stubbornly stayed on a path that wasn’t working. In those times, it is difficult to look at someone else’s success and tempting to think of them as lucky or more blessed, but remember these words from one of the richest men in the world - “No, I wasn’t lucky. I worked hard to achieve the goals I set for myself.”

Mint Tip: You have to start somewhere. One of Kay-shing’s key steps on his path to wealth was having enough cash on hand to purchase his own factory when lease expenses went up, which led directly to his impressive real-estate investment portfolio. In your case, this could translate to cutting some fat from your monthly expenses and setting aside the difference in savings each month. If your plan is to buy a home in the next few years, make sure your credit is in good shape. Go to either freecreditreport.com or transunion.com to get the three bureau reports with credit scores. In addition, you can go to listclassaction.com if you are a US Resident to receive six months of free credit monitoring.

4. Deann Alsaker

It’s sometimes hard to relate to the story of a billionaire because it seems so out-of-reach. But those billionaires all started from a quest for survival. Just like Deann Alsaker. Alsaker’s husband worked at a garbage company and noticed that people were throwing out perfectly good clothing. Instead of sending that clothing to a landfill, she saw an opportunity to recycle those items and turn a small profit. She also found a community program called Family Assets for Independence Minnesota (FAIM) to help lower income residents of Minnesota save money for a home, school, or business.

Tragically, her business was completely destroyed by a fire in 2004. Looking back, she told the Star Tribune, “The fire was a real blow, but you learn what you need to do to keep going, and then you do it.”

For someone like Alsaker that was just a momentary setup. Not only did she recoup her losses but she rose from the ashes to become a major contributor to a number of charitable causes—from providing rags for bedding at animal shelters to supplying clothing to developing nations. In 2006, Deann was awarded the Nothing Ventured, Nothing Gained Award by WomenVenture in St. Paul, Minnesota for her perseverance and entrepreneurship.

5. Bill Clinton

While watching Bill Clinton’s speech at the Democratic National Convention, I remembered how much his childhood shaped who he is today. His father was killed in a car accident before he was born. And his mother made the difficult choice to leave her children with their grandparents while she studied to be a nurse.

His grandparents sold goods to people of all races and from all walks of life, and demonstrated concepts of public service to Clinton. In an interview with CBS News, he described his stepfather, Roger Clinton, as an abusive father who was also an alcoholic. “I think the fact that I was born without a father, and that I spent a lifetime trying to put together a picture of one also had a lot to do with how I turned out,” he said. “Good and not so good. But I think on balance, more good than bad.”

He pursued his passion and took to memorizing the words of people who inspired him such as John F. Kennedy and Martin Luther King. Much like Elon Bomani and many others who have overcome adversity to succeed, his intense devotion to furthering his knowledge gave him a foundation of wisdom to draw from. He also worked hard to obtain scholarships at every level of his education. He is admittedly far from perfect, but he is a strong example of the classic American Dream in which a man or woman from a broken home can rise to the most powerful position of leadership in the world through perseverance and commitment.

Mint Tip: When you are just trying to put food on the table, the cost of education can seem out of reach. Consider doing as Clinton did and take advantage of resources that can help you find scholarships such as www.fastweb.com. If the process of researching and applying for them seems overwhelming, give yourself a small, attainable goal such as “today I am going to apply for one scholarship no matter what. Don’t worry about finding the perfect one, just help yourself with a small action step, which helps you get started on the item that you have procrastinated on or avoided for months or even years.

Many of you probably have a similar story of a parent, grandparent, friend or neighbor, and we would love to hear what they have done to be extraordinary and make a better life for their children. You might not think that your story is comparable but whatever the step was that got the ball rolling in the right direction, a month without cable, downsizing to a smaller house, or sharing one family car instead of three–please share your story with your fellow readers, and you just might trigger something in their imagination that puts them on a similar escape trajectory.

10 Things Millionaires Won't Tell You

1. "You may think I'm rich, but I don't."

A million dollars may sound like a fortune to most people, and folks with that much cash can't complain — they're richer than 90 percent of U.S. households and earn $366,000 a year, on average, putting them in the top 1 percent of taxpayers. But the club isn't so exclusive anymore. Some 10 million households have a net worth above $1 million, excluding home equity, almost double the number in 2002. Moreover, a recent survey by Fidelity found just 8 percent of millionaires think they're "very" or "extremely" wealthy, while 19 percent don't feel rich at all. "They're worried about health care, retirement and how they'll sustain their lifestyle," says Gail Graham, a wealth-management executive at Fidelity.

Indeed, many millionaires still don't have enough for exclusive luxuries, like membership at an elite golf club, which can top $300,000 a year. While $1 million was a tidy sum three decades ago, you'd need $3.6 million for the same purchasing power today. And half of all millionaires have a net worth of $2.5 million or less, according to research firm TNS. So what does it take to feel truly rich? The magic number is $23 million, according to Fidelity.

2. "I shop at Wal-Mart..."

They may not buy the 99-cent paper towels, but millionaires know what it is to be frugal. About 80 percent say they spend with a middle-class mind-set, according to a 2007 survey of high-net-worth individuals, published by American Express and the Harrison Group. That means buying luxury items on sale, hunting for bargains — even clipping coupons.

Don Crane, a small-business owner in Santa Rosa, Calif., certainly sees the value of everyday saving. "We can afford just about anything," he says, adding that his net worth is over $1 million. But he and his wife both grew up on farms in the Midwest — where nothing was wasted — and his wife clips coupons to this day. In fact, most millionaires come from middle-class households, and roughly 70 percent have been wealthy for less than 15 years, according to the AmEx/Harrison survey. That said, there are plenty of millionaires who never check a price tag. "I've always wanted to live above my means because it inspired me to work harder," says Robert Kiyosaki, author of the 1997 best seller Rich Dad, Poor Dad. An entrepreneur worth millions, Kiyosaki says he doesn't even know what his house would go for today.

3. "...but I didn't get rich by skimping on lattes."

So how do you join the millionaires' club? You could buy stocks or real estate, play the slots in Vegas — or take the most common path: running your own business. That's how half of all millionaires made their money, according to the AmEx/Harrison survey. About a third had a professional practice or worked in the corporate world; only 3 percent inherited their wealth.

Regardless of how they built their nest egg, virtually all millionaires "make judicious use of debt," says Russ Alan Prince, coauthor of "The Middle-Class Millionaire." They'll take out loans to build their business, avoid high-interest credit card debt and leverage their home equity to finance purchases if their cash flow doesn't cut it. Nor is their wealth tied up in their homes. Home equity represents just 11 percent of millionaires' total assets, according to TNS. "People who are serious about building wealth always want to have a mortgage," says Jim Bell, president of Bell Investment Advisors. His home is probably worth $1.5 million, he adds, but he owes $900,000 on it. "I'm in no hurry to pay it off," he says. "It's one of the few tax deductions I get."

4. "I have a concierge for everything."

That hot restaurant may be booked for months — at least when Joe Nobody calls to make reservations. But many top eateries set aside tables for celebrities and A-list clientele, and that's where the personal concierge comes in. Working for retainers that range anywhere from $25 an hour to six figures a year, these modern-day butlers have the inside track on chic restaurants, spa reservations, even an early tee time at the golf club. And good concierges will scour the planet for whatever their clients want — whether it's holy water blessed personally by the Pope, rare Mexican tequila or artisanal sausages found only in northern Spain. "For some people, the cost doesn't matter," says Yamileth Delgado, who runs Marquise Concierge and who once found those sausages for a client — 40 pounds of chorizo that went for $1,000.

Concierge services now extend to medical attention as well. At the high end: For roughly $2,000 to $4,000 a month, clients can get 24-hour access to a primary-care physician who makes house calls and can facilitate admission to a hospital "without long waits in the emergency room," as one New York City service puts it.

5. "You don't get rich by being nice."

John D. Rockefeller threatened rivals with bankruptcy if they didn't sell out to his company, Standard Oil. Bill Gates was ruthless in building Microsoft into the world's largest software firm (remember Netscape?). Indeed, many millionaires privately admit they're "bastards in business," says Prince. "They aren't nice guys." Of course, the wealthy don't exactly look in the mirror and see Gordon Gekko either. Most millionaires share the values of their moderate-income parents, says Lewis Schiff, a private wealth consultant and Prince's coauthor: "Spending time with family really matters to them." Just 12 percent say that what they want most to be remembered for is their legacy in business, according to the AmEx/Harrison study.
Millionaires are also seemingly undaunted by failure. Crane, for example, now runs a successful company that screens tenants for landlords. But his first business venture, a real estate partnership, went bankrupt, costing him $20,000 — more than his house was worth at the time. "It was the most depressing time in my life, but it was the best lesson I ever learned," he says.

6. "Taxes are for little people."

Most millionaires do pay taxes. In fact, the top 1 percent of earners paid nearly 40 percent of federal income taxes in 2005 — a whopping $368 billion — according to the Internal Revenue Service. That said, the wealthy tend to derive a higher portion of their income from dividends and capital gains, which are taxed at lower rates than wages (15 percent for long-term capital gains versus 25 percent for middle-class wages). Also, high-income earners pay Social Security tax only on their first $97,500 of income.

But the big savings come from owning a business and deducting everything related to it. Landlords can also depreciate their commercial properties and expenses like mortgage interest. And that's without doing any creative accounting. Then there are the tax shelters, trusts and other mechanisms the superrich use to shield their wealth. An estimated 2 million Americans have unreported accounts offshore, and income from foreign tax shelters costs the U.S. $20 billion to$40 billion a year, according to the IRS. Indeed, "an increasing number of people want to establish an offshore fund," says Vernon Jacobs, a certified public accountant in Kansas who specializes in legal foreign accounts.

7. "I was a B student."

Mom was right when she said good grades were the key to success — just not necessarily a big bank account. According to the book "The Millionaire Mind," the median college grade point average for millionaires is 2.9, and the average SAT score is 1190 — hardly Harvard material. In fact, 59 percent of millionaires attended a state college or university, according to AmEx/Harrison.

When asked to list the keys to their success, millionaires rank hard work first, followed by education, determination and "treating others with respect." They also say that what they absorbed in class was less important than learning how to study and stay disciplined, says Jim Taylor, vice chairman of the Harrison Group. Granted, 48 percent of millionaires hold an advanced degree, and elite colleges do open doors to careers on Wall Street and in Silicon Valley (not to mention social connections that grease the wheels). But for every Ph.D. millionaire, there are many more who squeaked through school. Kiyosaki, for one, says the only way he survived college calculus was by "sitting near" the smart kids in class — "we cheated like crazy," he says.

8. "Like my Ferrari? It's a rental."

Why spend $3,000 on a Versace bag that'll be out of style as soon as next season when you can rent it for $175 a month? For that matter, why blow $250,000 on a Ferrari when for $25,000 it can be yours for a few weekends a year? Clubs that offer "fractional ownership" of jets have been popular for some time, and now the concept has extended to other high-end luxuries like exotic cars and fine art. How hot is the trend? More than 50 percent of millionaires say they plan to rent luxury goods within the next 12 months, according to a survey by Prince & Associates. Handbags topped the list, followed by cars, jewelry, watches and art. Online companies like Bag Borrow or Steal, for example, cater to customers who always want new designer accessories and jewelry, for prices starting at $15 a week.

For Suzanne Garner, a millionaire software engineer in Santa Clara, Calif., owning a $100,000 car didn't make financial sense (she drives a Mazda Miata). Instead, Garner pays up to $30,000 in annual membership fees to Club Sportiva, a fractional-ownership car club in San Francisco that lets her take out Ferraris, Lamborghinis and other exotic vehicles on weekends. "I'm all about the car," she says. And so are other people, it seems. While stopped at a light in a Ferrari recently, Garner received a marriage proposal from a guy in a pickup truck. (She declined the offer.)

9. "Turns out money can buy happiness."

It may not be comforting to folks who aren't minting cash, but the rich really are different. "There's no group in America that's happier than the wealthy," says Taylor, of the Harrison Group. Roughly 70 percent of millionaires say that money"created" more happiness for them,he notes. Higher income also correlates with higher ratings in life satisfaction, according to a new study by economists at the Wharton School of Business. But it's not necessarily the Bentley or Manolo Blahniks that lead to bliss. "It's the freedom that money buys," says Betsey Stevenson, coauthor of the Wharton study.

Concomitantly, rates of depression are lower among the wealthy, according to the Wharton study, and the rich tend to have better health than the rest of the population, says James Smith, senior labor economist at the Rand Corporation. (In fact, health and happiness are as closely correlated as wealth and happiness, Smith says.) The wealthy even seem to smile and laugh more often, according to the Wharton study, to say nothing of getting treated with more respect and eating better food. "People experience their day very differently when they have a lot of money," Stevenson says.

10. "You worry about the Joneses — I worry about keeping up with the Trumps."

Wealth may go a long way toward creating happiness, but the middle-class rich still can't afford the life of the billionaire next door — the guy who writes charity checks for $100,000 and retreats to his own private island. "What makes people happy isn't how much they're making," says Glenn Firebaugh, a sociologist at Pennsylvania State University. "It's how much they're making relative to their peers."

Indeed, for all their riches, some 40 percent of millionaires fear that their standard of living will decline in retirement and that their money will run out before they die, according to Fidelity. Of course, it may not help if their lifestyle is so lavish that they're barely squeaking by on $400,000 a year. "You can always be happier with more money," says Stevenson. "There's no satiation point." But that's the trouble with keeping up with the Trumps. "Millionaires are always looking up," says Schiff, "and think it's better up there."

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How Newegg Stopped Collecting New York State Tax

Reader Chris Schiffner pinged Newegg to see why and how they stopped collecting New York State tax. They sent him an answer, posted after the jump, but here's the short story: A new New York law would have required internet retailers using affiliate marketing to collect sales tax, so Newegg "restructured its affiliate marketing program." The new structure somehow avoids having to collect New York sales tax. Shrug. Whatever, New York geeks, rejoice!

Newegg's official statement:

Earlier this year, New York State passed a law which potentially forces non-New York State internet retailers to collect and remit New York State sales tax if the retailer’s marketing affiliates engage in certain marketing activities targeted at New York residents.

In response to this law, on June 1, 2008 Newegg.com (“Newegg”) began collecting sales tax on its sales to New York State residents.

Since then, New York State tax authorities have issued additional guidance as to the circumstances in which internet retailers would be required to collect sales tax. Based on this guidance, Newegg has restructured its affiliate marketing program in an effort to ensure that Newegg is not presumed under New York State law to have to collect sales tax.

What this means to our New York State customers is that, effective 12:00 a.m. Eastern Time on August 21, 2008, Newegg will no longer charge sales tax on its sales to you. However, please be aware that you may still have an obligation to pay New York use tax on your purchases. (Use taxes are not charged or collected by Newegg but are paid directly by purchasers to the appropriate taxing authority.) Newegg cannot offer you any tax advice, so if you have any questions about whether you have to pay use tax, please consult an appropriate tax professional.

Disclaimer: Nothing in this email shall be deemed an admission that Newegg has ever been legally required to collect and remit New York State sales tax on its sales to residents of that state. Newegg continues to challenge the validity of section 1101(b) (8) (vi) of the New York State Tax Law.

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Japan military may run out of gas money this year

By Jay Alabaster, Associated Press Writer Japan's military may run out of gas money this year despite cutbacks on use of jets, ships TOKYO (AP) -- Japan's military may use up its annual fuel budget months early this year, despite running some ships and planes at low power and cutting back on major exercises.

Faced with fuel costs that exceed spending plans by 60 percent, the Self Defense Force has scaled back training missions involving jets and ships, vehicles are being run at slower speeds, and more passengers are being squeezed in per trip in order to conserve fuel, a Defense Ministry spokeswoman said on condition of anonymity, citing protocol.

"If fuel prices keep increasing we won't be able to cover it, and we will have to make a request to ensure we have sufficient funds," the spokeswoman said.

She refused to say the fuel shortage would affect Japan's foreign operations, such as dispatches in support of U.S.-led forces in Iraq, but she denied that the country's defense would be compromised.

It was unclear when the country's military would run out of gas under current conditions, though broadcaster NHK said the fuel budget would run out in November, over four months before the end of the fiscal year in March.

A request for more funds would likely be included in the supplementary budget, to be debated in the Diet -- Japan's parliament -- later this year, she said.

Japan is dependent on imports for 99.7 percent of its oil supply. Over the last two months, the average price for fuel used in military vehicles -- land, air and sea -- has risen to $4.18 a gallon (120,000 yen per kiloliter), 60 percent higher than the $2.62 a gallon (75,000 yen per kiloliter) budgeted by the military.

The ministry is considering canceling its largest annual naval exercise in November for the first time. The exercise involving 90 warships and 170 jets has not been called off since it began in 1954.

As in other countries, soaring oil prices have also hit consumers and prompted some industries to ask the government for help.

Japanese fisherman staged their largest-ever national strike last month, and Tokyo responded with 74.5 billion yen ($690 million) in emergency aid.

Earlier this week thousands of truck drivers across Japan held demonstrations to protest rising fuel prices, demanding lower gas taxes and highway tolls and warning they would add surcharges to cover spiraling costs.

Even royalty has not been exempt: when Emperor Akihito attends an annual ocean convention in northern Japan in September, there will be no sea parade for him this year.

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Prosecutor: Baby put in microwave on purpose

DAYTON, Ohio (AP) -- A mother intentionally put her month-old daughter in a microwave oven and cooked the child to death after a fight with her boyfriend, a prosecutor told jurors Thursday.

China Arnold is accused of killing her baby by burning her in the microwave.

Defendant China Arnold and her boyfriend had argued over whether he was the biological father, Assistant Montgomery County prosecutor Daniel Brandt said during closing arguments in the woman's retrial.

The argument got so heated that Arnold bit her boyfriend's lip and he slapped her, Brandt said.

Arnold, 28, of Dayton, is accused of killing her infant daughter Paris Talley in 2005. She could face the death penalty if convicted of aggravated murder.

Brandt said Arnold told a cellmate she put the baby in the microwave and turned it on because she was worried her boyfriend would leave her if he found out the child wasn't his, Brandt said.

"She could have stopped it with one finger, but she didn't," Brandt said. "We know she used that microwave as the instrument of death."

Defense attorney Jon Paul Rion told the jury there was evidence that someone else was responsible.

He cited testimony from a boy who said he saw another boy walk into the kitchen of a nearby apartment with the baby, heard the microwave go on, and then later saw the burned baby in the microwave.

"He told a very believable story," Rion said.

Judge John Kessler declared a mistrial in February after he privately heard the youngster's account. The boy, now 8, testified at the retrial Tuesday.

In rebuttal, however, the 8-year-old's mother testified Wednesday that they lived some distance away and they were not at Arnold's apartment complex when the baby died. Her former live-in boyfriend also testified that he was certain the boy was not at the location.

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Text message snoop? Study says beware

SYDNEY (Reuters Life!) - Can't help checking your partner's text messages on the sly? You're not alone, with an Australian survey showing one in three mobile phone users are text message snoops, and the consequences can often be heart-breaking.

The online survey, conducted for telecoms service provider Virgin Mobile Australia, shows that women are more likely than men to check their partner's phone in secret.

It also revealed that 73 percent of these sneaky text checkers have found out things they later wished they hadn't, and 10 percent ended their relationship because of SMS snooping.

"In a society when we very rarely let our mobile phones out of our sight, it's quite amazing to think that for a lot of us the minute we jump in the shower, someone might be checking up on us," Virgin Mobile's Amber Morris said in a statement.

Slightly more than 500 mobile phone users in Australia aged between 18 and 29 were polled by a market research firm in July.

The survey found that 60 percent spy on text messages when their partner is in the shower, while just over 41 percent do it when they are in the same room.

Nearly 45 percent said they had discovered flirtatious or sexual texts, ranging from the harmless to the graphic.

"With so many modes of communication available these days, it's difficult to keep track of your partner's whereabouts or who they're chatting to and when," Virgin Mobile quoted author and relationship expert Samantha Brett as saying.

"Flirting is age old, but the fact that it can now be tracked on your phone makes a nervous partner a paranoid text-checker."

Brett advised SMS snoops to stop. "If you suspect that your partner is up to something, talk about it. Text checking can turn into a vicious cycle, and it can easily be avoided," she added.

(Writing by Miral Fahmy; Editing by Paul Tait)

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Halliburton sued for human trafficking

John Byrne

Twelve men recruited in Nepal died after forced transfer to Iraq, lawfirm says

Thirteen Nepali men were recruited and held against their will for thirteen months in a human trafficking scheme engineered and perpetrated by Halliburton and its Jordanian contractor, according to a lawsuit filed yesterday in California federal court.

The Nepali men, each between the ages of 18 and 27, were allegedly hired as kitchen staff by the then-Halliburton subsidiary KBR and its Jordanian subcontractor, Daoud & Partners. Once they arrived in Jordan, however, their passports were seized and they were dispatched to Iraq.

"Tragically, as the men were being transported to Iraq, a car containing twelve of the men was stopped by members of the Ansar al-Sunna Army, an insurgent group," the Washington lawfirm Cohen, Milstein, Hausfeld & Toll writes. "The 12 men in the car were taken hostage and executed by the insurgents. The executions were filmed and posted on the Internet. The Inspector General for the United States Department of Defense investigated and confirmed the facts related to the fate of the 12 men, which led to increased enforcement of anti-trafficking measures by the United States."

Only one man survived. After he was released by Iraqi rebels, he said he was assigned to work as a loader/unloader in a US military warehouse facility supervised by KBR. He asserts that he was held for 15 months against his well, before the firm finally allowed him to return home to Nepal.

Cohen, Milstein is suing on behalf of their families and the remaining survivor, Buddi Prasad Gurung. According to the law firm, their families went deep into debt to pay recruiting fees to Halliburton's contractor in order to get promised jobs.

This spring, a judge at the Department of Labor ordered KBR's contractor, Daoud, to pay $1 million to the families of 11 of the victims. "The Inspector General for the United States Department of Defense investigated and confirmed the facts related to the fate of the 12 men, which led to increased enforcement of anti-trafficking measures by the United States," the lawfirm said in a release.

KBR declined to comment directly on the charges when contacted by the Washington Post Wednesday.

"KBR has not seen the lawsuit so it is premature for us to comment at this time," KBR spokeswoman Heather Browne wrote the Post in an e-mailed statement. "The safety and security of all employees and those the company serves remains KBR's top priority. The company in no way condones or tolerates unethical or illegal behavior."

KBR was spun off from Halliburton in a 2006 IPO, and formally disengaged from the company in 2007. The spinoff appears party as a result of negative press relating to allegations the company engaged in overbilling and got sweetheart deals. KBR had been Halliburton's engineering arm for 44 years, and was also accused of overbilling and sweetheart deals during the Vietnam War.

The family members and the survivor are suing under the Trafficking Victims Protection Reauthorization Act, the Racketeering Influenced and Corrupt Organizations Act, and the Alien Tort Claims Act. The DC lawfirm representing them often focuses on victims of forced and slave labor and other violations of international law.

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Putin accuses U.S. of orchestrating Georgian war

SOCHI, Russia (CNN) -- Russian Prime Minister Vladimir Putin has accused the United States of orchestrating the conflict in Georgia to benefit one of its presidential election candidates.

Russian PM Vladimir Putin has accused the U.S. of orchestrating the conflict in Georgia.

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In an exclusive interview with CNN's Matthew Chance in the Black Sea city of Sochi on Thursday, Putin said the U.S. had encouraged Georgia to attack the autonomous region of South Ossetia.

Putin said his defense officials had told him it was done to benefit a presidential candidate -- Republican John McCain and Democrat Barack Obama are competing to succeed George W. Bush -- although he presented no evidence to back it up.

"U.S. citizens were indeed in the area in conflict," Putin said. "They were acting in implementing those orders doing as they were ordered, and the only one who can give such orders is their leader." Watch Putin accuse the United States »

White House spokeswoman Dana Perino blasted Putin's statements, saying they were "patently false."

"To suggest that the United States orchestrated this on behalf of a political candidate just sounds not rational," she said.

U.S. State Department deputy spokesman Robert Wood concurred and labeled Putin's statements "ludicrous."

"Russia is responsible for the crisis," Wood said in an off-camera meeting with reporters in Washington on Thursday. "For the Russians to say they are not responsible for what happened in Georgia is ludicrous. ... Russia is to blame for this crisis, and the world is responding to what Russia has done."

When told that many diplomats in the United States and Europe blame Russia for provoking the conflict and for invading Georgia, Putin said Russia had no choice but to invade Georgia after dozens of its peacekeepers in South Ossetia were killed. He told Chance it was to avert a human calamity. iReport.com: First-person accounts from the center of the conflict

The former Russian president, still considered the most powerful man in the country, said he was disappointed that the U.S. had not done more to stop Georgia's attack.

Putin recalled that he was watching the situation in Georgia and South Ossetia unfold when he was at the opening ceremony of the Beijing Olympic Games on August 8.

He said he spoke to U.S. President Bush, also attending, who told the Russian prime minister he didn't want war, but Putin spoke of his disappointment that the U.S. administration didn't do more to stop Georgia early in the conflict.

Also Thursday, Putin announced economic measures that he said were unrelated to the fighting with Georgia. Nineteen U.S. poultry meat companies would be banned from exporting their products to Russia because they had failed health and safety tests, and 29 other companies had been warned to improve their standards or face the same ban, Putin said.

Putin said Russia's health and agricultural ministries had randomly tested the poultry products and found them to be full of antibiotics and arsenic.

Putin repeated that the bans were not related to the Georgian conflict, but they indicate the measures that some Western countries -- particularly in Europe -- fear if Russia goes on a diplomatic offensive.

Russia is trying to counterbalance mounting pressure from the West over its military action in Georgia and its recognition of the breakaway regions of Abkhazia and South Ossetia.

But Russia's hopes of winning international support for its actions in Georgia were dashed Thursday, when China and other Asian nations expressed concern about tension in the region.

The joint declaration from the Shanghai Cooperation Organization, which includes China, Russia, Tajikistan, Kyrgystan, Kazakhstan and Uzbekistan, said the countries hoped that any further conflict could be resolved peacefully. Watch more on rising tensions between Russia and the West. »

"The presidents reaffirmed their commitment to the principles of respect for historic and cultural traditions of every country and efforts aimed at preserving the unity of a state and its territorial integrity," the declaration said, The Associated Press reported.

"Placing the emphasis exclusively on the use of force has no prospects and hinders a comprehensive settlement of local conflicts," AP quoted the group as saying.

Russian President Dmitry Medvedev had appealed to the group at a summit in Tajikistan on Thursday to support its actions, saying it would serve as a "serious signal for those who are trying to justify the aggression."

On Wednesday, a U.S. ship carrying aid docked in Georgia, while Britain's Foreign Secretary David Miliband traveled to the Ukraine, which is worried about Russia's intentions in the region, to offer the UK's support.

Miliband equated Moscow's offensive in Georgia with the Soviet tanks that invaded Czechoslovakia to crush the Prague Spring democratic reforms in 1968, and demanded Russia "change course," AP reported. iReport.com: Do remember the Cold War?

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Do You Want To Save 10% By Opening A Target Visa? Just Kidding!

Reader Nancy says that Target rejected the 10% coupon she received for being a Target Visa card holder. When she asked why, the cashier told her it had probably been used, but had no more information.

I went to use my coupon, which was not expired, and was told it was invalid. The cashier said it was probably used already. Since I knew I hadn't used it, I asked them to tell me when/where it was used. They couldn't tell me for sure why it was rejected, just that the computer wouldn't accept it. Long story short, no one at Target nor the credit card company could tell me when I had supposedly already redeemed this particular coupon.

Basically, it was their word against mine and the Target did not have to bear the burden of proof. They simply reject the coupon and I'm out the 10% I would have saved on my purchases for that day. Maybe they should put this in the fine print of their ads to solicit Target credit cards? They always ask if you want to save 10% today by opening up a Target Redcard.

That's how they get you. They just asked if you "wanted" to save 10%. Ha! Get it? Ok, we're just kidding.

Put on your negotiating pants and calmly tell Target that you're going to cancel your account, transfer your balance, and buy everything at Walmart from now on if they don't send you another coupon — one that works.

Here's some contact information for Target's CEO just in case the negotiations don't go well, but we sincerely hope it doesn't come to that.

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America - The Newest Third World Nation

By the Earl of Stirling

The evil Bush administration has largely completed the process begun years ago of turning America, the most powerful and richest nation in history, into a Third World nation. I remember a lunch, about 21 years ago in Long Beach, California, with the president of an aerospace company, myself, and a senior foreign general. A comment by the general has always stayed with me. He said, “America is a very rich nation, it will take a lot to bring her down”. In the twenty some years after this, I am simply amazed at just how far one crooked president after another, with the assistance of our “bought and paid for” Congress has managed to take us.

Currently we have an economy that is being held together with bailing wire and glue until after the November election. Even CNBC’s Cramer, a capitalist if there ever was one, now says that the American stock market is so rigged that the average person needs to get out NOW (link to a video with him talking about this is http://www.breakthematrix.com/content/Cramer-States-the-Obvious-Markets-are-Rigged .

We have just seen the early stages of systemic problems in the American economy and the global economy with the fallout from the subprime mortgage problems. The real problem is that the “policemen” of the American economy, and to a lessor extent the entire global economy, have “been asleep” at their jobs; and this has not been an accident. Laws have been changed overturning the post-Great Depression rules designed to save the banking industry from itself.

We have had a massive host of new investment vehicles created over the last few years, and in many cases even the people pushing the vehicles do not understand how they work because they have been designed to be so complex as to confuse even the experts. We have $1.2 quadrillion invested in derivates, trillions in collateralized debt obligations and structured investment vehicles ~ and many of these new forms of financial paper are shady in the extreme.

The American economy, and with it the global economy, is being deliberately set up to collapse. One can look to the traditional sources of war, economic crisis, and revolution to find the cause behind the demise of America. The global international banking families fingerprints are all over the programmed fall of America. While they had their hands in the War of 1812, and the Civil War, blackmailed Wilson to get the US into the First World War, placed their puppet FDR in the White House to control (to their designs) the Great Depression and then to bate the Japanese to attack us to get American in the Second World War, the deliberate high treason committed on 9/11 by senior Bush/Cheney administration officials was a new low. We have now experienced almost seven years of wars based on this false flag operation and we are being led into yet another war with Iran (a nation with advanced biological strategic weapons of mass destruction that can kill a third of the world). Additionally the satanic US Vice-President is in Georgia preparing to push the Russians into the coming Third World War; a world war that with current 21st Century weapons will kill most of us.

We are currently witnessing the main stream news media’s massive coverage of the Democratic National Convention, with the follow-on coverage of the Republican National Convention in a couple of weeks. This coverage is designed to convince the American public that “their vote does count”, that the American political system is working for them. This BS/hype is falling on more and more ‘deaf ears’ as more people turn to the alternative internet news sources for the truth. Americans have not forgotten that two years ago they elected a Democratic Congress to end the war in Iraq but instead the Democratic controlled Congress actually increased the funding for the war and the troop levels.

Some thirty-five years ago, we legalized bribery in America by allowing PACs (political action committees). What had been done before under the table, suddenly became legal and this allowed money to elbow out whatever influence the public had in Congress. Unless you are making tens of thousands of dollars in contributions to your congress critter don’t expect him to really care about you or your interest. The average Congressman must raise $40,000 per day for every day that he/she spends in Washington. Not even the most beautiful hooker on earth can rake in that level of money but out Congressmen and Senators do, giving a whole new meaning to the term prostitution.

We have a medical/pharmaceutical industry that is more fraud and rip off than real medicine. Most expensive pharmaceuticals are designed to “treat you” rather than to “cure you” and in fact the treatment usually brings on additional serious health problems. No one can do anything about this as Big Pharma spends untold millions every year buying off Congress.

We have a giant agricultural industry whose genetically modified food is killing off the bees and without the bees, most of us will not have enough food to survive.

A sign of a Third World country is that its systems don’t work well because the government is for sale. When you can bribe anyone in the government to get what you want, regardless of the death and suffering that it causes to the population, that is a sign of very deep sickness in the nation. No society that allows a high level of organic corruption, of the outright buying of votes in its parliament or congress, will function well. That is why so many African and other Third World nations are failed states. This is happening more and more to America.

We are in a madman’s race to see what kills us first, corporate food and medical nightmares or the ever increasing march to global war by the neo-cons.

It breaks my heart to see the great American experiment in democracy fail and fail so horribly. The first Earl of Stirling (Sir William Alexander of Menstrie) was the founder of English-speaking Canada and was the owner of what became several American states and most of Canada. The last claimant (before me) to the Earldom was Major General Lord Stirling of the American Revolutionary Army. He was a key financier of George Washington; took over Washington’s command when he would take a rare leave of absence to return to Mt. Vernon; saved Washington’s army at the Battle of Long Island (which the Earls of Stirling use to own); and gave his fortune and his life to the American nation. On my watch (as Earl), I am seeing America destroyed.

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FDIC may borrow money from Treasury: report

(Reuters) - Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported.

The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said.

The borrowed money would be repaid once the assets of that failed bank are sold.

"I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses," Chairman Sheila Bair said in an interview with the paper.

Bair said such a scenario was unlikely in the "near term." With a rise in the number of troubled banks, the FDIC's Deposit Insurance Fund used to repay insured deposits at failed banks has been drained.

In a bid to replenish the $45.2 billion fund, Bair had said on Tuesday that the FDIC will consider a plan in October to raise the premium rates banks pay into the fund, a move that will further squeeze the industry.

The agency also plans to charge banks that engage in risky lending practices significantly higher premiums than other U.S. banks, Bair said.

The last time the FDIC had borrowed funds from the Treasury was at nearly the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered.

The fact that the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis, the Journal said.

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Tourists evacuate as Gustav grows near Jamaica

By HOWARD CAMPBELL, Associated Press Writer

KINGSTON, Jamaica - Tropical Storm Gustav surged toward hurricane force on Thursday as it drove toward Jamaica and aimed for the Cayman islands, prompting evacuations of tourists and offshore oil workers. In its wake, impoverished Haitians scrambled for food. Meanwhile, New Orleans kept nervous watch, three years after Katrina's destruction.

Gustav — the cause of flooding and mudslides that killed 23 in Haiti and the Dominican Republic — was nearly stationary about 80 miles (130 kilometers) east of Jamaica's low-lying capital, but it was expected to run west-southwest later in the day, very close to the shore.

Its top sustained winds were just below hurricane strength at about 70 mph (110 kph), according to the National Hurricane Center in Miami.

Also Thursday, Tropical Storm Hanna formed in the Atlantic, northeast of the northern Leeward Islands.

It was too early to predict whether Hanna will threaten the United States, but Gustav was already causing jitters from Mexico's Cancun resort to the Florida panhandle. Gustav was projected to become a major Category 3 hurricane over warm and deep Gulf waters, sending oil prices jumping above US$120 a barrel Thursday on fears of production slowdowns.

Royal Dutch Shell PLC has evacuated nearly 400 people and said it will pull out another 270 Thursday, affecting production. BP PLC also removed personnel from the region that produces about a quarter of U.S. crude and much of its natural gas. Transocean, the world's biggest offshore drilling contractor, is suspending operations at all of its rigs and pulling nearly 1,600 people out of the Gulf.

Some models showed Gustav taking a path toward Louisiana and other Gulf states devastated by Hurricanes Katrina and Rita three years ago.

Jamaican authorities urged people in rural areas to seek shelter, but businesses remained open early Thursday in Kingston, where a steady drizzle was falling from dark clouds.

Emergency officials opened shelters and sent relief supplies to flood-prone areas.

Gustav hit Haiti as a hurricane on Tuesday, causing floods and landslides that killed 15 people on Haiti's deforested southern peninsula, where it dumped 12 inches (30 centimeters) or more of rain. A landslide buried eight people, including a mother and six of her children, in the neighboring Dominican Republic.

Gustav's projected track pointed directly at the Cayman Islands, an offshore banking center where residents boarded up homes and stocked up on emergency supplies.

Forecasters said Gustav might slip between Mexico's Yucatan Peninsula and the western tip of Cuba on Sunday, then March toward a Tuesday collision with the U.S. Gulf Coast — anywhere from south Texas to the Florida panhandle.

"We know it's going to head into the Gulf. After that, we're not sure," said meteorologist Rebecca Waddington at the National Hurricane Center. "For that reason, everyone in the Gulf needs to be monitoring the storm."

New Orleans began planning a possible mandatory evacuation, hoping to prevent the chaos it saw after Hurricane Katrina struck three years ago Friday. Mayor Ray Nagin left the Democratic National Convention in Denver to help the city prepare.

Any damage to the Gulf oil infrastructure could send U.S. gasoline prices spiking.

"A bad storm churning in the Gulf could be a nightmare scenario," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "We might see oil prices spike US$5 to US$8 if it really rips into platforms."

Cuba, Haiti and the Dominican Republic were still getting heavy rain Thursday, and rising waters damaged many homes.

In the low-lying Cayman Islands, where Gustav is expected to hit Friday, tourists flocked to the airport to get out before the storm.

Stacey McLaughlan of Albany, New York, said she and her husband were told to leave their resort by noon Thursday or prepare to move to a public shelter.

Cayman Airways pilot Chris Witt says a lot of evacuation flights are planned for Thursday, but McLaughlan said she and her husband had to pay an extra US$1,000 to get out because their airline refused to bring in a plane to return them to the U.S.

Finding affordable food was an immediate priority for many in Haiti. Jean Ramando, an 18-year-old banana grower, said winds tore down a dozen of his family's banana trees, so bushels of 60 bananas they once sold to Port-au-Prince markets for 135 gourdes ($3.55) would have to be moved at prices as high as 300 gourdes ($7.80).

"The wind blew them down quickly so we need to make some money quickly," he said as he carried bushels through floodwaters.

In the Dominican Republic, friends and relatives buried a mother and six of her seven children, smothered when a landslide crushed their tin-roofed shack.

Marcelina Feliz, 32, was found hugging the body of her smallest child, rescue officials said. A neighbor was also killed.

"I don't know how I can live now, because none of my family is left," said Marino Borges, her husband and father of several of her children.

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Within the next 10 years, the U.S., China, Israel, and a host of private companies plan to set up camp on the moon. So if and when they plant a flag, does that give them property rights?

A NASA working group hosted a discussion this week to ask: Who owns the moon? The answer, of course, is no one. The Outer Space Treaty, the international law signed by more than 100 countries, states that the moon and other celestial bodies are the province of all mankind. No doubt that would irk all of the people throughout the ages, like monks from the Middle Ages, who have tried to claim the moon was theirs.

But ownership is different from property rights. People who rent apartments, for example, don't own where they live, but they still hold rights. So with all of the upcoming missions to visit the moon and beyond, space industry thought leaders are seriously asking themselves how to deal with a potential land rush, cowboy-style.

"This is a very relevant discussion right now. We've got this wave of new lunar missions from around the world," said William Marshall, a scientist in the small-spacecraft office at NASA, but who spoke this week at an event hosted by NASA's CoLab, a collaborative public-private working group. He was speaking from his personal interest and not on behalf of the agency.

To be sure, the United States aims to send astronauts back to the moon by as early as 2015, in a mission that would include a long-term settlement. China and Israel, among others, are also working on lunar projects. And for the first time, several private groups are building spacecraft to land on the moon in an attempt to win millions of dollars in the Google Lunar X Prize. Some participants say that they plan to gain some property rights in the mission.

One of those people is Steve Durst, a director on the board of the International Lunar Observatory (ILO) and owner of the Space Age Publishing Co. He's linked to one of the Google Lunar competitors, Odyssey Moon, and he said during the talk that he hopes to scratch out his initials on one of the legs of a lunar rover and "claim his acre."

His group has calculated that there are about 10 billion acres on the moon, not counting crater slopes. Given that there are about 6.7 billion people on Earth, it aligns nicely with the idea of "I want my acre," he said.

The question is, he said: "How do you get activity going if the moon is owned by everyone at the same time?"

Durst has helped start the ILO in Hawaii to eventually put an astrophysical observatory on the moon that will generate power, communicate, and act as a property rights agent, he said. Durst gave a talk in China last week and he jokingly said that he skipped over the part about property rights.

Ultimately, he thinks it's about balancing the common good and free enterprise. "I'm happy to deed over half of my acre to a common acre pool. I see this as a way of reconciling a right of individual ownership and the idea that the moon belongs to the whole Earth."

The question of lunar rights also hit home when someone from Russia bought part of the Russian rover and then subsequently claimed that he owns a bit of lunar surface under its foot, according to Marshall. Land rights could also get tricky when it comes to coveted areas of the moon with "peaks of eternal light" that could be more valuable for research, he said.

"It's much easier to solve this problem by thinking it through and thinking through what would most benefit the best interest of humanity … rather than doing it once it's a mess," Marshall said.

So, he said, it comes down to assigning rights in the best interest of humanity, including ensuring no monopolies and no military installations.

Entities can apply for space in geostational orbit and receive a slot on a first come, first served basis, according to Marshall. That's an interesting model, he said, because it does that without granting ownership and allows access by less prosperous nations.

"In conclusion: Who owns on the moon? No one. Who should own the moon? No one. Does this stop property rights? No. The best way forward is probably some sort of property licensing body like how it works in geo," he said.

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Military help for Georgia is a 'declaration of war', says Moscow in extraordinary warning to the West

Moscow has issued an extraordinary warning to the West that military assistance to Georgia for use against South Ossetia or Abkhazia would be viewed as a "declaration of war" by Russia.

The extreme rhetoric from the Kremlin's envoy to NATO came as President Dmitry Medvedev stressed he will make a military response to US missile defence installations in eastern Europe, sending new shudders across countries whose people were once blighted by the Iron Curtain.

And Moscow also emphasised it was closely monitoring what it claims is a build-up of NATO firepower in the Black Sea.

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Russian President Dmitry Medvedev (right) meets with Prime Minister Vladimir Putin - the 'real architect' of the Georgia conflict - and the Security Council (unseen) in Sochi yesterday

The incendiary warning on Western military involvement in Georgia - where NATO nations have long played a role in training and equipping the small state - came in an interview with Dmitry Rogozin, a former nationalist politician who is now ambassador to the North Atlantic Alliance.

"If NATO suddenly takes military actions against Abkhazia and South Ossetia, acting solely in support of Tbilisi, this will mean a declaration of war on Russia," he stated.

Yesterday likened the current world crisis to the fevered atmosphere before the start of the First World War.

Rogozin said he did not believe the crisis would descend to war between the West and Russia.

But his use of such intemperate language will be seen as dowsing a fire with petrol.

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The U.S. Coast Guard cutter Dallas at Georgia's Black Sea port of Batumi today, carrying what the U.S. says is humanitarian aid

Top military figure Colonel General Leonid Ivashov, president of the Academy of Geopolitical Studies in Moscow, alleged that the US and NATO had been arming Georgia as a dress rehearsal for a future military operation in Iran.

"We are close to a serious conflict - U.S. and NATO preparations on a strategic scale are ongoing. In the operation the West conducted on Georgian soil against Russia - South Ossetians were the victims or hostages of it - we can see a rehearsal for an attack on Iran."

He claimed Washington was fine tuning a new type of warfare and that the threat of an attack on Iran was growing by the day bringing "chaos and instability" in its wake.

With the real architect of the worsening Georgian conflict - prime minister Vladimir Putin - remaining in the background, Medvedev followed up on Rogozin's broadside with a threat to use the Russian military machine to respond to the deployment of the American anti-missile defence system in Poland and the Czech republic.

Poland agreed this month to place ten interceptor missiles on its territory, and Moscow has already hinted it would become a nuclear target for Russia in the event of conflict.

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A South Ossetian separatist fighter prepares to fire his weapon as another raises the South Ossetian and Russian flags, in Tskhinvali, the capital of Georgia's separatist-controlled territory of South Ossetia yesterday

"These missiles are close to our borders and constitute a threat to us," Medvedev told Al-Jazeera television. "This will create additional tension and we will have to respond to it in some way, naturally using military means."

The Russian president said that offering NATO membership to Georgia and Ukraine, two former Soviet republics, would only aggravate the situation.

Moscow has consistently expressed its opposition to the U.S. missile shield, saying it threatens its national security.

The U.S. claims the shield is designed to thwart missile attacks by what it calls "rogue states," including Iran.

Meanwhile, Russia - seen by the West as flouting international law - today demanded NATO abide by an obscure agreement signed before the Second World War limiting its warships in the Black Sea.

Russian ambassador to NATO Dmitry Rogozin

"In light of the build-up of NATO naval forces in the Black Sea, our fleet has also taken on the task of monitoring their activities," said hawkish deputy head of Russia's general staff, Anatoly Nogovitsyn.

The Montreux Convention, as it is called, sets a weight restriction of 45,000 tonnes on the number of warships that countries outside the Black Sea region can deploy in the basin.

"Can NATO indefinitely build up its forces and means there? It turns out it cannot," said Nogovitsyn.

NATO has said it is undertaking pre-arranged exercises in the Black Sea involving US, German, Spanish and Polish ships. Two other US warships sailed to Georgian waters with humanitarian aid.

Georgia is poised to sever diplomatic relations with Russia, or reduce them to a bare minimum.

"We will drastically cut our diplomatic ties with Russia," said a top official.

President Mikhail Saakashvili said he was frightened to leave Georgia to attend the EU summit on the crisis.

"If I leave Georgia, the Russians will close our airspace and prevent me from returning home," he said.

Russia sought Chinese backing for its action - but the Communist regime in Beijing appeared reluctant to offer support, instead issuing a statement saying it was "concerned" about recent developments.

NATO called for Russia to reverse its decision on recognition for the two enclaves, both Georgian under international law.

But the new 'president' of South Ossetia, Eduard Kokoyty, called for Russian military bases on his territory.

French foreign minister Bernard Kouchner warned today that an marauding Russian bear could trample over other ex-Soviet states.

"That is very dangerous," he said, pointing at Ukraine and Moldova.

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'Moscow Has Maneuvered Itself into a Dead End'

Russian President dismayed Western leaders on Tuesday when he recognized the independence of the two Georgian provinces Abkhazia and South Ossetia. Many German commentators argue that Moscow may look strong now, but in reality it is cutting off its nose to spite its face.

AP

Russian President Dmitry Medvedev has upset the West by recognizing the Georigan breakaway provinces.

Moscow's decision to recognize Georgia's breakaway regions of South Ossetia and Abkhazia has made it clear that the current Russian leadership places no great value on ties with the West. That, at least, seems to be the tenor of the response by world leaders to Tuesday's announcement by Russian President Dmitry Medvedev. Still, despite the harsh words, there seems little the West can do to confront a confrontational Moscow.

Medvedev said on Tuesday that Georgia had forced Russia's hand by trying to reassert control over the two regions, both of which had run their own affairs since wars with Tbilisi in the early 1990s. Georgian troops launched an attack on South Ossetia on Aug. 7 but were quickly forced out of the region by a huge Russian counter-attack which then pushed deep into Georgia proper.

The West had been trying to persuade Russia to withdraw its troops from Georiga, but Moscow continues to maintain a military presence. The decision to recognize the breakaway regions' independence makes the prospects of sending in international observers and peacekeepers to maintain the cease-fire all the more unlikely.

Still, some in Europe are urging the West to keep a level head. In an opinion piece for the tabloid Bild on Wednesday, German Foreign Minister Frank-Walter Steinmeier writes: "By recognizing Abkhazia and South Ossetia, Russia has turned up the heat on the conflict. That is irresponsible. But exactly for that reason, we in the West cannot react without careful thought.... Conflicts can only be solved with one another and in an atmosphere of respect and mutual trust."

On Wednesday German commentators assess the damage Moscow's decision will have on relations with the West. And many argue that it is Russia itself that will suffer the consequences in the long term.

The center-left Süddeutsche Zeitung writes:

"For weeks Moscow's leadership has been escalating an isolationist furor … The president and government are eagerly breaking bridges that they had carefully built …"

"The exchange of goods, military cooperation on fighting terrorism, diplomatic efforts to keep Iran in check, none of these seem to hold any value for the Russians now."

"It is as if Russia has suddenly woken up and realized that for years it had chased the illusions of compromises and partnerships, and now it is celebrating the break with the West as an act of liberation."

"Moscow sees itself as a new global policeman … the protector of the small nations. However, even small friendly neighboring countries regard this with distrust, looking fearfully at their own Russian minorities, because Russia could use this as a pretext for military action -- as it did in Georgia. Saakashvili had tried to commit genocide and thus had lost his right to Abkhazia and South Ossetia, Medvedev said. But the Ingushetians, Chechnians and other countless Caucasus peoples also regard themselves as having been the victims of genocide. Sometimes the perpetrators were from nearby, and sometimes they were sitting in the Kremlin. The shock resulting from Medvedev's decision may be spreading across the Atlantic now, but it could actually cause an earthquake along Russia's restive flanks."

"Moscow wants to dictate its rules to the rest of the world, but for all its oil and gas it is unlikely to succeed. Instead it has maneuvered itself into a dead end, in which compromises that have already been reached seem like defeats. Only Moscow can find its way out again."

The conservative Die Welt writes:

"The Russian leadership duo seem particularly pleased that they can finally answer the diplomatic defeat represented by Kosovo. The method is simple and perfidious: Russia is playing Europe, NATO and the West at their own game. If you want to act out of empathy for the rights of ethnic minorities -- we can too. What Kosovo is to you, Abkhazia and South Ossetia are to us."

"The perfidious part of all this is naturally that Russia couldn’t care less about the rights of minorities -- as it proved in the way it dealt with Chechnya. Their priority is the effort to win back a part of the old territorial and imperial might. And what could be nicer than to do so using Western arguments?"

"It is now clear that this is just the beginning. Ukraine, which is internally divided ... will undoubtedly see its territorial integrity come under pressure."

The business daily Handelsblatt writes:

"One could accuse Russia of naked imperialism if it weren't for Kosovo. The precedent that the West has created on the doorstep of the EU and NATO was a free pass for Moscow to carry out its long prepared Georgia coup."

"It is worrying how quickly feathers have been ruffled. The hot heads in Moscow are already boasting that Russian gas supplies could be turned off if the West has any stupid ideas -- completely misjudging the true power relations. This is pretty absurd as Russia would be cutting off its nose to spite its face if it were to resort to the energy weapon."

"Russia can flex its muscles at the moment because NATO and the EU are finding it difficult to find a common line. … They don’t have any way of applying pressure on Moscow. The withdrawal of the strategic partnership and the refusal of WTO memberships won't leave much of an impression on Moscow. The Kremlin is determined to make trouble and sees confrontation as a sign of political strength. This is certainly a fallacy, but until Moscow realizes this, a lot of diplomatic damage is going to be done."

The Financial Times Deutschland writes:

"Abkhazia and South Ossetia are now, once and for all, under Russian control. All the Europeans' well-intended plans to send international observers and peacekeepers into the region are now obsolete. The Kremlin has no interest in resolving the conflict with help from outside."

"The way in which Russia has de facto annexed part of another state is brutal but it also creates clarity."

"There is no point in negotiating anything with Russia and that would also send the wrong signal. The EU cannot talk about easing visa restrictions or building up economic cooperation, when the other side has shown that it regards international treaties as little more than scraps of paper. If someone bangs a door shut, there is little point in scratching at it hopefully."

The left-leaning Berliner Zeitung writes:

"There is no question that, according to international law, South Ossetia and Abkhazia belong to Georgia. And undoubtedly the invasion of Georgia by Russia troops is a flagrant violation of international law. Russia is only recognizing the two regions out of pure power political considerations.... However, Moscow has made a volatile decision. One day the forcibly pacified Chechnya -- or indeed Ingushetia and North Ossetia -- could invoke the precedent that has now been created."

The left-leaning Die Tageszeitung writes:

"Is this act of recognition not the prelude to a new aggressive policy of regaining former (Soviet) Russian territories? Does Putin, the new Czar … want to recreate the vanished empire? This type of speculation is not backed up by the facts. The interests and the power relations between the various powers are too different across the former Soviet Union. That is why South Ossetia/Abkhazia should not be regarded as the writing on the wall. To halt the negotiations over the Georgia crisis now and adopt a common line of confrontation with Russia would be a major mistake."

The center-right Frankfurter Allgemeine Zeitung writes:

"The act of recognition must be seen in context. The secession of the breakaway provinces is a result of Russian aggression; without Russia exerting a dubious influence and stationing troops there, these areas could hardly have been characterized as self-contained entities."

"Through its recognition of part of an independent state, which it had prepared for with illegal force, Russia has violated its duties to the international community. All law-abiding states have to stand together. They must not accept the new situation. The very least that is required is collective protest. Sanctions are another possibility … In the end one of the foundations of the international order is at stake."

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