Guantanamo 'Brit' was offered freedom only if he promised not to sue the British Government

By Sam Greenhill

Former Guantanamo Bay 'torture' prisoner Binyam Mohamed was offered freedom only if he pledged not to sue the British Government, it has emerged.

The 'deal' put to Mohamed, who claims he was abused during seven years of captivity with the help of British secret agents, was revealed by two High Court judges.

Mohamed was told by his U.S. military captors at the Cuban base he could go back to Britain only if he:

• signed a statement saying he had never been tortured;
  
• promised never to speak to the media; promised never to sue the United States, or any U.S. ally, including Britain;
  
• and pleaded guilty to terror charges.
  

The military even wanted him to assign any rights he might have to compensation to the U.S. government.

Mohamed refused the deal and the U.S. eventually dropped all charges against him later last year. He was released last month.

Free: Binyam Mohamed arriving back in the UK last month

The extraordinary plea bargain was branded immoral and illegal by Mohamed's lawyers.

And MPs demanded to know what part Britain had played in trying to hush up Mohamed's alleged torture.

Clive Stafford Smith, who has represented 30-year-old Mohamed for four years, said: 'He was being told he would never leave Guantánamo Bay unless he promised never to discuss his torture, and never sue either the Americans or the British to force disclosure of his mistreatment.

'Gradually the truth is leaking out, and the governments on both sides of the Atlantic should pause to consider whether they should continue to fight to keep this torture evidence secret.'

Details of the desperate lengths to which the Americans were prepared to go emerged in a previously-secret court judgment released yesterday by the High Court.

They were held back until negotiations were complete to agree Mohamed's release, but have now been made public.

Lord Justice Thomas and Mr Justice Lloyd Jones said Mohamed had been asked to agree the plea despite not being allowed to know the charges against him.

Since his release, Ethiopian-born Mr Mohamed has given numerous interviews accusing MI5 of supplying '70 per cent' of the questions used by his CIA tormentors in a Moroccan prison where he said he was held for 18 months, beaten and had his genitals slashed.

He was later flown by 'extraordinary rendition' by the CIA to Guantanamo Bay for four years.

His claims have put mounting pressure on Foreign Secretary David Miliband to admit the Government either knew about his torture, or colluded in it.

Mr Miliband has refused to give evidence to a Parliamentary inquiry into what the UK knew.

The Foreign Office has insisted it does not condone the use of torture and Home Secretary Jacqui Smith has referred Mohamed's claims to the Attorney General, Baroness Scotland, to consider whether any criminal prosecutions should be brought.

Liberal Democrat foreign affairs spokesman Edward Davey said: 'This looks like a clumsy attempt to intimidate Binyam into silence.

'If the British Government, at any level, prove to have known about such an attempt, then that would seem yet another case of British complicity in torture.'

Mr Stafford Smith added: 'After the years of suffering he had been through, Binyam was willing to do just about anything to get out of there, but he would not plead guilty to something he did not do, nor would he lie about the fact that he had been tortured.

'Likewise, the "condition" that he agree not to speak about his torture is absolutely shameful.

'The truth about what happened to Binyam needs to come out and our government should do all it can to make that happen.'

His colleague Clare Algar added: 'By early 2009, the U.S. military was still desperately trying to get Mr Mohamed to plead guilty to something - anything - in order to save face.

'The final "offer" was that this man, originally alleged to be a most dangerous terrorist, should plead guilty and receive a sentence of only 10 days in prison, less than one might expect for many driving offences.

'Mr Mohamed rejected this offer, as he continued to insist that he was not guilty. Offering a man who is protesting his innocence freedom on the condition that he pleads guilty to something and serves a 10-day sentence is face-saving on an horrific scale.'

It has emerged that Craig Murray, the former British ambassador to Uzbekistan, is to tell MPs that the British Government has an official policy of accepting intelligence obtained by torture.

Mr Murray, who was sacked after exposing appalling human rights abuses, will give evidence to the Parliamentary joint committee on human rights next month.

Mr Murray has long claimed he was aware of intelligence passed on to MI6 by the CIA which had been obtained by the torture of suspects by the Uzbek regime.

Mr Murray said: 'As British ambassador, I was told there is a very definite policy to accept intelligence from torture abroad.'

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Is Drywall the Next Chinese Import Scandal?

By Tim Padgett / Miami

Howard Ehrsam, left, recently founded Chinese Drywall Screening, pulls off an electrical plate to see if the electrical receptacles show any signs of Chinese drywall in a home's construction in Port St. Lucie.

Soon after Danie Beck and her husband bought their two-story townhouse west of Miami in the summer of 2006, she thought an animal had died somewhere behind the walls. The strong sulfurous odor lingered, she says, and she began having dizzy spells that would keep her in bed for days. She began suffering from insomnia and sore, swollen joints. The house, too, appeared to be ailing: Lights began blinking on and off, and Beck noticed discoloring of her wood furniture. The air conditioner, an indispensable appliance in South Florida, kept conking out. "It was an absolute nightmare," the 67-year-old dance teacher. "I felt as if something in this house was hammering me into the ground every day."

It wasn't until her repairman got fed up with fixing inexplicably corroded air-conditioner coils that Beck finally discovered what she and her homebuilder suspect is the source of the poltergeist: the Chinese drywall of the house's interiors. Beck is among hundreds of homeowners in Florida alleging that toxic levels of chemical pollutants such as sulfur are issuing from contaminated drywall made in some Chinese factories. At least four class-action lawsuits have been filed in Florida; others have been filed in California, Louisiana and Alabama.(See pictures of China's electronic waste village.)

The U.S. Consumer Product Safety Commission is also investigating the complaints. If the drywall proves to be the culprit, plaintiff attorneys say tens of thousands of potentially affected homes could see a further drop in house prices already hammered by the credit crisis. "A lot of these people are just getting hit over the head a second time," says David Durkee, a Miami attorney who has filed one of the suits. "This could have a further impact on the mortgage crisis by giving overwhelmed homeowners another incentive to just walk away from their houses."

During the heady but reckless days of the recent U.S. housing construction boom, builders were desperate for materials, and drywall was especially in demand. Before 2005, drywall imports into the U.S. from China had been negligible; since 2006, more than 550 million lbs of it have been shipped here, mostly to Florida. The imports amount to a fraction of the 15 million tons of drywall produced domestically each year, but it was used to build more than 60,000 homes in at least a dozen states — including in some post-Katrina reconstruction in Louisiana.

More than half the homes built with Chinese drywall are in Florida. Some of the suits there target construction companies; others include German drywall manufacturer Knauf and its Chinese subsidiaries — which in turn are being sued by at least one Florida homebuilder, Lennar Corp. Miami-based Lennar, which is also suing the U.S. suppliers from which it bought the Chinese drywall, has confronted the problem and initiated a program to do inspections and remove the offending wallboard in many homes, including Beck's. (The process usually involves moving a family out of the house for at least six months to replace its interior.) Another lawsuit lawsuit defendant, Engle Homes, based in Hollywood, Fla., has also admitted the drywall problem exists in at least a small number of its homes. In a statement regarding houses near Fort Myers, Fla., which are part of Durkee's suit, the company says: "Our initial findings tell us that that this seems to be an isolated incident that has affected a small number of Engle Homes in the Fort Myers, Fla., area and we are currently developing a plan to assist our affected homeowners."

Drywall is made from gypsum, a soft mineral, that is pressed between thick paperboard. Plaintiff attorneys say the allegedly toxic drywall material probably originated in at least one gypsum mine in China and possibly others. (A few years ago, Knauf and other drywall producers had received complaints about a mine in Tianjin, China; Knauf says it stopped using the mine toward the end of 2006.) But Knauf denies that its product is toxic, and argues it is not the only supplier of Chinese-made drywall to the U.S. Contacted by TIME, the company referred to a statement by its subsidiary Knauf Plasterboard Tianjin Ltd.: "Any low levels of sulfur compounds present in the air in homes are not a health risk...The substances identified in testing are in no greater amounts than [in] the air found outside homes or in soil, marshes or the oceans."

The Florida Health Department has not yet concluded its own tests of the drywall in question. But Beck and other homeowners insist the common symptoms suffered by the Chinese-drywalled houses and their occupants can't be mere coincidence. The problem came to light last year as those homeowners began commiserating on the Internet about rotten-egg smells in their houses and rashes of nosebleeds and other ailments. At the same time, exasperated air-conditioner repairmen began complaining to builders about copper coil corrosion in newly built houses. The air-conditioning companies concluded it was caused by high levels of airborne sulfur and other moldy toxins. Wires in outlets, appliances and lamps were going bad, too, as was wood. That in turn raised red flags for consumer protection groups, already alarmed in recent years by the flood of defective Chinese-made products like toothpastes and toys.

Depending on how many homes ultimately prove to be contaminated, the repair costs — Beck says Lennar promised to "tear my house down to the studs" — could run into the tens of millions for builders. And that does not include the unspecified damages sought in the lawsuits. One problem plaintiffs face, however, is that many of the builders being sued have gone bankrupt in the recent housing bust. And even if homes are repaired, they may still carry the taint of having been drywall victims. Beck paid $344,000 for her townhouse; it is now worth $245,000 — less than the amount owed on her mortgage. And she worries that she may not be able to sell it at some point in the future even after Lennar fixes the drywall problem. "I'll admit there are moments when I'm tempted to ask Lennar to just buy the house back," says Beck, whose husband died last year of cancer. (His illness was not related to the drywall.)

Beck's fortunes have taken a pummeling in recent years. She and her husband bought the townhouse after an arson fire destroyed the Miami home they'd live in for 39 years. And she's become accustomed to seeing its value jeopardized by the threat of hurricanes and by Wall Street malfeasance. But she wasn't expecting any trouble from China.

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Citigroup Plans Big Bonuses Despite Rules Against Them

By Stephen Gandel

A Citibank branch in New York.

AIG isn't the only bailed-out financial firm paying big bucks to managers who helped steer their company to near collapse. Citigroup has pledged millions of dollars in bonuses to senior executives for the next few years, despite lawmakers efforts to eliminate such payments.

It's not clear whether the bonuses, which Citigroup says are for 2008 but won't start paying out until 2010, will be allowed. Under compensation rules passed by Congress in mid-February, cash bonuses are barred for top executives at bailed-out banks. (See pictures of the global financial crisis.)

But Citi finalized its bonus program shortly before the new rules were introduced. That might make the payments permissible, though they could be made almost worthless by new tax rules just passed by the House of Representatives and headed for consideration in the Senate. Even so, Citigroup's move in January to set in place bonus payments for years to come raises questions about whether it was trying to evade compensation rules it knew were coming.

"If an executive legitimately earns a bonus, then paying it out over a number of years makes a lot of sense,' says Paul Hodgson, a senior research associate at the Corporate Library, which examines issues of corporate governance. "But I find it hard to believe that any top executive at a bailed-out bank would have had the performance in 2008 to generate a multimillion-dollar bonus." (Read "Is Citibank Really Out of the Woods?")

Under Citi's proposed compensation plan, three of the company's top five executives would be paid a total of nearly $12.5 million in cash bonuses over the next five years. One of the executives, James Forese, is a co-head of Citi's Institutional Client Group, which lost $20 billion in 2008. Forese is rewarded $5 million under the plan. At least 15 other Citi executives are in line for multimillion-dollar payouts. Citi declined to say how much in total it has promised under the plan.

According to a proxy statement Citi filed with the Securities and Exchange Commission, the company finalized its bonus plan on Jan. 14. Twelve days later an amendment barring such payments was inserted by the House of Representatives into the $787 billion fiscal stimulus bill, which went into effect on Feb. 17.

A Citigroup spokesman denied that the company did anything wrong, noting the pay packages in question were set a month before the bonus ban became law. "Overall executive compensation [at Citigroup] substantially decreased from 2007 to 2008," the spokesman said. "CEO Vikram Pandit and CFO Gary Crittenden declined any bonus for last year as well. As always, we will comply with the new restrictions on compensation ... in addition to continued adherence to the substantial changes we already have made to our compensation structure.'

The revelations about Citi's bonus plan come at a time when anger over executive pay, particularly in the troubled financial sector, is boiling over. On Thursday, the House overwhelmingly passed a bill that would impose a 90% income tax on all compensation over $250,000 earned by employees at banks that have received more than $5 billion in bailout funds. The Senate is working on its own bill to raise taxes on highly compensated bankers. President Barack Obama indicated he would sign legislation that curtails bonuses.

"In the end, this is a symptom of a larger problem, a bubble-and-bust economy that valued reckless speculation over responsibility and hard work," Obama said in a statement released by the White House. "That is what we must ultimately repair to build a lasting and widespread prosperity."

Citi has also been criticized this week for an estimated $10 million renovation of its executive offices, and reports that the firm was considering boosting salaries for its top executives.

The bonuses for top executives at Citi are particularly surprising because the company is typically seen as the most in danger of failing among the nation's largest banks. Citi has received more government assistance than any other bank: $45 billion in cash infusions and over $300 billion in loan guarantees since late October. By comparison, none of Bank of America's top five executives will receive a cash bonus for 2008.

"There is no question [Citigroup] is violating the spirit of executive-compensation rules,' says Heather Slavkin, who studies executive-pay issues for the AFL-CIO. "Hopefully by the time Citi tries to pay these out we will have gotten over this idea about the sacredness of contracts, and these bonuses won't be allowed either.'

Citi has long deferred the payment of stock options that are granted at the end of the year. Cash bonuses, though, have always been paid at the time they were granted, typically in January for prior-year performance. But this year Citi decided to defer bonus payments for the first time. Instead of paying a lump sum in early 2009 for 2008 performance, payouts would be spread over four years, with the first payouts in January 2010.

For example, Forese, the Institutional Client Group executive, received a salary of $225,000 and was awarded a cash bonus of $5,265,000 for 2008. But he won't get any of his millions yet. Instead, he has a promise from Citi that he will get a check for $1.3 million in January 2010 and three checks for the same amount over the following three years.

On the surface, the plan looks like a good public relations move. At a time when people are angry about bonuses, Citi can say it isn't currently handing out bonuses to its top executives for work they did in 2008. What's more, the Citi bonuses include a provision that allows the bank to "claw back" the money if it is found that an executive made false statements to the company.

The problem is that Citi's payment plan is not consistent with executive-compensation rules put into place by the stimulus package. The American Recovery and Reinvestment Act signed by Obama on Feb. 17 says banks that have received money from the government's $700 billion Troubled Asset Relief Fund are barred from paying cash bonuses to their top executives. They can pay stock bonuses equal to as much as a third of an employee's salary, but the employee is not allowed to sell those shares until the government's money is paid back by their company.

The rub is that a provision was inserted into the stimulus package that says the rules do not apply to any bonuses contained in employment contracts signed before Feb. 11. (It is this provision that AIG has cited in defending its controversial bonuses to top executives.) Citi finalized its plan for paying 2008 bonuses in January. But it's unclear whether Citi's deferred-payout plan would be considered a valid employment contract under the rules set out in the stimulus package. The law leaves that up to Treasury Secretary Tim Geithner to decide.

Compensation experts say that as the government increases its efforts to curtail executive pay, companies will come up with more and more creative ways to keep their employees happy. "Citi may have bent the rules a bit,' says top compensation consultant Alan Johnson. "But if these firms don't come up with some way to pay their people, they are going to be out of business.'

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