Sunday, February 8, 2009

Excited with capital E! - White House social secretary is stylish, focused

White House social secretary is stylish, focused. By By Lola Ogunnaike, CNN Entertainment Correspondent
CNN, Feb 08, 2009

WASHINGTON (CNN) -- Every Sunday after an interminable 90 minutes at our family church in Washington, my parents would drive the family (me, baby brother and sis) past the White House as we headed back to our modest home in the suburbs of northern Virginia.

In my younger years, it was the perfect panacea after a morning spent praying and singing hymns about lambs and lepers.

As I grew older and more cynical, I wanted little to do with the White House jaunts. I longed for something a little edgier.

"Can we please drive through Georgetown?" I'd ask, with attitude to spare.

Checking out boutiques like Commander Salamander and Up Against the Wall, with their baggy jeans and Doc Martens boots, had become my idea of a fun-filled Sunday afternoon.

Flash forward more than a decade, and I'm actually making my way into the White House. And to my utter surprise I'm actually excited - excited with a capital E.

By now I've worked as a reporter at the New York Daily News and The New York Times, written for every publication from Rolling Stone to Elle magazine, attended every major event in Manhattan.

None of that was a match for the armed guards, the meticulously manicured grounds, and the 55,000 square feet of space that greeted me as I walked into the White House.

I was there to meet with Desirée Rogers, the White House's first African-American social secretary. As she strode into the room for our interview, I couldn't help but notice her impeccable style and her youthful face. Not a wrinkle on her 49-year-old face. And I was this close.

In articles she has been variously described as no-nonsense and focused. All true. This was her first television interview. Some answers sounded scripted. Others sounded like they could have casually been served over crust-free sandwiches and ice tea.

We talked about the family dog (it will arrive in the spring, she said) and her first days at 1600 Pennsylvania Avenue ("I used to get lost a lot," she said, smiling).

She wants to make the White House accessible to all Americans. Why shouldn't Jane the waitress have a chance to mix it up with Carla Bruni and Nicolas Sarkozy?

After nearly an hour, Rogers and I parted ways. She already has 14 events under her designer belt and she is in the throes of planning dozens more. I left her in her East Wing office to fret over seating charts and stemware.

I asked my colleagues Ethel Bass and Daria Shelton to capture as many magical moments as their digital cameras would hold. For me, the White House will never look the same.

Zurich voters abolish tax breaks for rich foreigners

Zurich voters abolish tax breaks for rich foreigners
February 08, 2009, 20:43 CET

(GENEVA) - Voters in the region of Zurich, the home of Swiss banking, sprang a surprise on Sunday by deciding to abolish tax breaks for rich foreigners living there, including showbusiness and sports stars.

Some 52.9 percent of voters -- more than 216,000 people -- backed an initiative launched by the left-wing Alternative List to abolish "tax privileges for foreign millionaires" in the canton.

It was the first time that the group had won a referendum in Zurich, the home of Switzerland's secretive and rather more conservative banking and finance establishment.

The result obliges cantonal authorities to change local tax laws.

The tax break has helped lure dozens of international sports, entertainment and business celebrities to Switzerland. In Zurich, 137 people benefitted from the deal in 2006, the Swiss news agency ATS reported.

In several cantons, wealthy foreigners have the opportunity to negotiate a confidential tax fee with local authorities based on their expenditure, instead of paying income tax, provided they do not work in Switzerland.

However, the practice has often triggered a storm of controversy in the home countries of some of the celebrities, amid accusations of tax dodging.

Unease has also grown in Switzerland recently, not least because some of their own stars -- such as tennis star Roger Federer -- could not enjoy the same deal.

Famous foreign residents in Zurich have included US singer Tina Turner and Russian oligarch Viktor Vekselberg.

Other celebrities residing in Switzerland last year included a brace of motor racing champions, such as Lewis Hamilton, Fernando Alonso, Kimi Raikonnen, Michael Schumacher and Sebastien Loeb, singers Shania Twain and James Blunt, as well as tycoons.

After arguing that the tax privilege was unfair, the Alternative List said it hoped the outcome would send a signal to the rest of Switzerland.

Bonuses are getting a bad rap, but they're an important and useful part of the financial services industry

Greed Is Good, by Roy C Smith
Wall Street bonuses are getting a bad rap, but they're an important and useful part of the financial services industry. Taking them away could hamper the economic comeback.
WSJ, Feb 07, 2009

Wall Street bonuses are getting a bad rap, but they're an important and useful part of the financial services industry. Taking them away could hamper the economic comeback.
1973 was a terrible year on Wall Street. An unexpected crisis in the Middle East led to a quadrupling of oil prices and a serious global economic recession. The president was in serious trouble with Watergate. The S&P 500 index dropped 50% (after 23 years of rising markets), and much of Wall Street fell deeply into the red. There were no profits, and therefore no bonuses.

I was a 35-year-old, nonpartner investment banker then and was horrified to learn that my annual take-home pay would be limited to my small salary, which accounted for about a quarter of my previous year's income. Fortunately the partners decided to pay a small bonus out of their capital that year to help employees like me get by. The next year was no better. Several colleagues with good prospects left the firm and the industry for good. We learned that strong pay-for-performance compensation incentives could cut both ways.

Many wondered if that was still the case last week, when New York State Comptroller Thomas DiNapoli released an estimate that the "securities industry" paid its New York City employees bonuses of $18 billion in 2008, leading to a public outcry. Lost in the denunciations were the powerful benefits of the bonus system, which helped make the U.S. the global leader in financial services for decades. Bonuses are an important and necessary part of the fast-moving, high-pressure industry, and its employees flourish with strong performance incentives.

There is also a fundamental misunderstanding of how bonuses are paid that is further inflaming public opinion. The system has become more complex than most people know, and involves forms of bonuses that are not entirely discretionary.

The anger at Wall Street only grew at the news that Merrill Lynch, after reporting $15 billion of losses, had rushed to pay $4 billion in bonuses on the eve of its merger with Bank of America. Because Merrill Lynch and Bank of America were receiving substantial government funds to keep them afloat, the subject became part of the public business. The idea that the banks had paid out taxpayers' funds in undeserved bonuses to employees, together with a leaked report of John Thain's spending $1 million to redecorate his office, understandably provoked a blast of public outrage against Wall Street. The issue was so hot that President Barack Obama interrupted his duties to call the bonuses "shameful" and the "height of irresponsibility." Then, on Wednesday, he announced a new set of rules for those seeking "exceptional" assistance from the Troubled Asset Relief Program in the future that would limit cash compensation to $500,000 and restrict severance pay and frills, perks and boondoggles.

In the excitement some of the facts got mixed up. Mr. DiNapoli's estimate included many firms that were not involved with the bailout, and only a few that were. Merrill's actions were approved by its board early in December and consented to by Bank of America. But the basic point is that, despite the dreadful year that Wall Street experienced in 2008, some questionable bonuses were paid to already well-off employees, and that set off the outrage.

Many Americans believe that any bonuses for top executives paid by rescued banks would constitute "excess compensation," a phrase used by Mr. Obama. But no Wall Street CEO taking federal money received a bonus in 2008, and the same was true for most of their senior colleagues. Not only did those responsible receive no bonuses, the value of the stock in their companies paid to them as part of prior-year bonuses dropped by 70% or more, leaving them, collectively, with billions of dollars of unrealized losses.

That's pay for performance, isn't it?

"Wall Street" has always been the quintessential, if ill-defined, symbol of American capitalism. In reality, Wall Street today includes many large banks, investment groups and other institutions, some not even located in the U.S. It has become a euphemism for the global capital markets industry -- one in which the combined market value of all stocks and bonds outstanding in the world topped $140 trillion at the end of 2007. Well less than half of the value of this combined market value is represented by American securities, but American banks lead the world in its origination and distribution. Wall Street is one of America's great export industries.

The market thrives on locating new opportunities, providing innovation and a willingness to take risks. It is also, regrettably, subject to what the economist John Maynard Keynes called "animal spirits," the psychological factors that make markets irrational when going up or down. For example, America has enjoyed a bonus it didn't deserve in its free-wheeling participation in the housing market, before it became a bubble. Despite great efforts by regulators to manage systemic risk, there have been market failures. The causes of the current market failure, which is the real object of the public anger, go well beyond the Wall Street compensation system -- but compensation has been one of them.

The capital-markets industry operates in a very sophisticated and competitive environment, one that responds best to strong performance incentives. People who flourish in this environment are those who want to be paid and advanced based on their individual and their team's performance, and are willing to take the risk that they might be displaced by someone better or that mistakes or downturns may cause them to be laid off or their firms to fail. Indeed, since 1970, 28 major banks or investment banks have failed or been taken up into mergers, and thousands have come and gone into the industry without making much money. Those that have survived the changing fortunes of the industry have done very well -- so well, in fact, that they appear to have become symbolic of greedy and reckless behavior.

The Wall Street compensation system has evolved from the 1970s, when most of the firms were private partnerships, owned by partners who paid out a designated share of the firm's profits to nonpartner employees while dividing up the rest for themselves. The nonpartners had to earn their keep every year, but the partners' percentage ownerships in the firms were also reset every year or two. On the whole, everyone's performance was continuously evaluated and rewarded or penalized. The system provided great incentives to create profits, but also, because the partners' own money was involved, to avoid great risk.

The industry became much more competitive when commercial banks were allowed into it. The competition tended to commoditize the basic fee businesses, and drove firms more deeply into trading. As improving technologies created great arrays of new instruments to be traded, the partnerships went public to gain access to larger funding sources, and to spread out the risks of the business. As they did so, each firm tried to maintain its partnership "culture" and compensation system as best it could, but it was difficult to do so.

In time there was significant erosion of the simple principles of the partnership days. Compensation for top managers followed the trend into excess set by other public companies. Competition for talent made recruitment and retention more difficult and thus tilted negotiating power further in favor of stars. Henry Paulson, when he was CEO of Goldman Sachs, once remarked that Wall Street was like other businesses, where 80% of the profits were provided by 20% of the people, but the 20% changed a lot from year to year and market to market. You had to pay everyone well because you never knew what next year would bring, and because there was always someone trying to poach your best trained people, whom you didn't want to lose even if they were not superstars. Consequently, bonuses in general became more automatic and less tied to superior performance. Compensation became the industry's largest expense, accounting for about 50% of net revenues. Warren Buffett, when he was an investor in Salomon Brothers in the late 1980s, once noted that he wasn't sure why anyone wanted to be an investor in a business where management took out half the revenues before shareholders got anything. But he recently invested $5 billion in Goldman Sachs, so he must have gotten over the problem.

As firms became part of large, conglomerate financial institutions, the sense of being a part of a special cohort of similarly acculturated colleagues was lost, and the performance of shares and options in giant multi-line holding companies rarely correlated with an individual's idea of his own performance over time. Nevertheless, the system as a whole worked reasonably well for years in providing rewards for success and penalties for failures, and still works even in difficult markets such as this one.

At junior levels, bonuses tend to be based on how well the individual is seen to be developing. As employees progress, their compensation is based less on individual performance and more on their role as a manager or team leader. For all professional employees the annual bonus represents a very large amount of the person's take-home pay. At the middle levels, bonuses are set after firm-wide, interdepartmental negotiation sessions that attempt to allocate the firm's compensation pool based on a combination of performance and potential.

Roy C. Smith, a professor of finance at New York University's Stern School of Business, is a former partner of Goldman Sachs.

Iraq combat could outlast Obama's term

Iraq combat could outlast Obama's term, by Mike Allen
Politico, Feb 08, 2009

Thomas E. Ricks, the nation’s best-known defense correspondent, writes in a book out this week that many Iraq veterans believe the U.S. is likely to have “soldiers in combat in Iraq until at least 2015 – which would put us now at about the midpoint of the conflict.”

That would mean American forces would remain in danger past President Obama’s terms, into his second term if he wins reelection or the 45th presidency if he doesn’t.

Ricks, author of the bestselling “Fiasco,” offers that grim forecast in a new book being published Tuesday, “The Gamble: General David Petraeus and the American Military Adventure in Iraq, 2006-2008” (394 pages, The Penguin Press, $27.95).

A member of two Pulitzer Prize-winning teams, Ricks also predicts that President Obama and his generals “eventually will settle on what one Obama adviser calls ‘a sustainable presence’ – and that that smaller force will be in Iraq for many years.”

On NBC’s “Meet the Press on Sunday, Ricks told moderator David Gregory that “a lot of people back here incorrectly think the war is over.”

“What I say in this book is that we may be only halfway through this thing,” Ricks said. “This year we're in now, '09, is going to be, I think, a, a surprisingly tough year. You've got a series of elections in Iraq. Meanwhile, you've got American troops declining. … We're doing the easy troop withdrawals now, but down the road you start taking them out of areas that aren't so secure, that aren't so safe, that you're, that you're worried about.

“So they're going to be holding national elections in Iraq just when we have fewer troops there. And finally, none of the basic problems that the surge was meant to solve have been solved. All of the basic issues facing Iraq are still there.”

The Washington Post is running two days of excerpts under the rubric “The Generals’ Insurgency.” Sunday’s first installment starred Army Gen. Roy Odierno, who in September succeeded Petraeus as the top U.S. commander in Iraq, and formerly oversaw day-to-day operations under Petraeus.

The book is supposed to be under a strict sales embargo, but Politico obtained a copy at a Washington-area bookstore on Saturday night.

Here are conversation-driving excerpts that did not appear in The Post:

--“THE LONG WAR … No matter how the U.S. war in Iraq ends, it appears that today we may be only halfway through it. That is, the quiet consensus emerging among many people who have served in Iraq is that we likely will have American soldiers in combat in Iraq until at least 2015 – which would put us now at about the midpoint of the conflict. … In other words, the events for which the Iraq war will be remembered probably have not yet happened.”

--“Even as security improved in Iraq in 2008, I found myself consistently saddened by the war, not just by its obvious costs to Iraqis and Americans, but also by the incompetence and profligacy with which the Bush administration conducted it. Yet I also came to believe that we can’t leave. … [A] smaller but long-term U.S. military presence is probably the best case scenario. … Nor, at the end of many more years of struggle, is the outcome likely to be something Americans recognize as victory.”

--“A FRAYED MILITARY … The last few years have seen soldiers burning out after repeated tours of duty in the war, with high rates of posttraumatic stress disorder among combat veterans. Rates of suicide and divorce have been increasing. Officers and sergeants are leaving in greater numbers. … The quality of recruits also has been dropping … The Army could be quite unforgiving of the missteps of younger soldiers, but enormously understanding when it came to much larger mistakes by generals. Captains were subjected to rigorous after-action reviews, but generals, inexplicably, were treated with kid gloves.”

--“OBAMA’S WAR (Fall 2008) … Just before the election, Odierno said in my interview with him that one of the points he would make to the new president would be ‘the importance of us leaving with honor and justice. … For the military it’s extremely important because of all the sacrifice and time and, in fact, how we’ve all adjusted and adapted.’ … Like Clinton, Obama also would face the prospect of a de facto alliance between the military and congressional Republicans to stop him from making any major changes. My bet is that Obama and his generals eventually will settle on what one Obama adviser calls ‘a sustainable presence’ – and that that smaller force will be in Iraq for many years.”

--“[A] major destabilizing factor in Iraq in 2009 will be the smaller size of the American military presence. Counterintuitively, the effects of drawing down troops will become more pronounced with the passage of time. … As more soldiers are withdrawn and the U.S. presence falls below pre-surge levels, the pullouts will become riskier. … In sum, the first year of Obama’s war promises to be tougher for America’s leaders and military than was the last year of Bush’s war.”

--“OBAMA IN IRAQ … He arrived in late July … [I]n this meeting, according to two participants, [Obama and Petraeus] concentrated on their differences – at least when Obama was permitted to interrupt the lecture. … Obama made it clear that his job as president would be to look at the larger picture – an assertion that likely insulted Petraeus, who justly prides himself on his ability to do just that. … Obama left people in Iraq with the sense he would be flexible and consider conditions on the ground and would be able to adjust his 16-month timetable if he saw the need.”

In Defense of Thailand's Democracy

In Defense of Thailand's Democracy, by Walter Lohman
Heritage, February 6, 2009

Over the last couple of months, one of America's two treaty allies in Southeast Asia turned the page on a period of intense political instability. And it did so democratically. Americans should take a moment to acknowledge Thailand as a member in good standing of the democratic club that is America's system of alliances in East Asia and the Pacific.

Reminders of an Undemocratic, Unstable Past

The most recent chapter of Thai political history began a little more than two years ago. On September 19, 2006, the military staged a coup to unseat and essentially exile Thailand's elected prime minister, Thaksin Shinawatra. Despite 14 years of uninterrupted democratic governance, global perceptions of a Thailand beset with chronic political instability quickly returned.

The unelected military-backed government exacerbated negative perceptions by mangling the Thai economy. And where the new government was widely expected to outperform the previous administration--dealing with the southern Islamist insurgency--it failed.

Then, at the end of 2007, after absorbing a coup, suffering under a year of inept government, and approving a new constitution designed to deflate the powers of the prime minister, new elections returned to government proxies for Thaksin and his disbanded Thai Rak Thai Party (TRT). Thailand appeared to pick up right where it left off in September 2006: Political strife dominated 2008; two prime ministers were forced from power; protests escalated to the point of shutting down Bangkok's airports; and the economy dragged through the year.

A Welcome Turn of Events

As 2008 drew to a close, pressure for another coup grew. But then something positive happened: Democracy provided a channel for government to change hands. Was the transfer of power pretty? No. Did it involve political trade-offs? Certainly. But expediency--as well as opacity--in democratic politics is a matter of degree, not kind.

In a parliamentary system, legitimate change in government is possible without proximate appeal to general elections. The Democrat party pulled enough sitting MPs away from the latest iteration of a Thaksin-based party and its coalition partners to form a new government under the leadership of opposition leader Abhisit Vejjajiva.

Critics point to the messiness of the process and nefarious connections among Thai royalty, military, politicians, bureaucrats, and judges. Political intrigue makes for good copy. But in an environment as prone to rumor as Bangkok, and with so much at stake, it is important to separate out the facts.

First, it is a matter of public record that army commander General Anupong Paochinda urged the prime minister to resign. Second, it is a fact that in October, the queen attended the funeral of a protester killed in a clash with police. Both were very powerful gestures in Thai politics. But they do not amount to a coup. Nor do they explain the formation of the new Democrat government, or the Democrats' victories in subsequent by-elections. Disillusionment with the Thaksin-proxies in the electorate and factional cracks in his party base were already present and growing; pulling them apart did not require a mastermind general.

In 2006, the United States was right to insist that Thailand return to democratic rule as quickly as possible. Even when some argued that the United States's geopolitical position in the region would suffer as a result of the pressure--China being all the willing to step into the gap--the Bush Administration remained focused on the longer term. It suspended more than $29 million in assistance to Thailand, including financing for military hardware and training for Thai officers. At the same time, however, the Administration maintained regular diplomatic contact with the Thais and preserved some of the most critical areas of the relationship, including military exercises and vital counterterrorism cooperation.

In 2006, the Thai military unwisely aborted a political process that would have eventually resolved the crisis without intervention. There are a great many variables involved in comparing September 2006 with December 2008: Thaksin's role, the bungling of his military appointed successors, a new constitution, a changing electorate, and civil society fatigue. But, essentially, the events of the last few months in Thailand prove that coup is not an inevitable feature of Thai politics and that democracy is stability's partner, not its enemy.

The Road Ahead

The Thai Democrat Party has a considerable amount of work to do. The new prime minister must find a way to reach across the political spectrum in Bangkok and elsewhere to heal the yawning divide. The perception that his ascension to power is purely the product of political maneuvering is refutable, but it will prove corrosive over time. There is also a significant element of anti-democratic class exceptionalism among the forces that brought him to power. And there is resistance outside of Bangkok to his Oxford-educated persona. He will have to take both issues head-on. But ultimately these are matters for Thais to resolve.

Indeed, Americans have their own work to do. Thailand was a key ally of the United States during the Cold War. Thais by the thousands fought side by side with Americans in Korea and in Vietnam. Thailand also contributed non-combat troops to the American-led coalitions in Iraq and Afghanistan and has served as a critical logistics node in the movement of American forces around the globe.

But the Thais, as much as any power in the region, pay close attention to geopolitical trends. During World War II, Thai Prime Minister and strongman Phibunsongkhram famously asked one of his commanders, "Which side do you think will lose this war? That side is our enemy." And he began to hedge his early bets on the Japanese.

Today it is China's rise that is the most striking fact of life in East Asia. And its rise is not unwelcome in Thailand. This is not necessarily a bad thing: China is an important economic partner for both the U.S. and its Asia-Pacific allies. America cannot ask our allies to recuse themselves from the opportunity China offers any more than it can refrain from reaping the benefits itself.

What the United States can do, however, is be absolutely clear about its long-term commitment to the region. It should intensify its economic engagement, not retreat from it. This means embracing free trade agreements. The proposed Free Trade Area of the Asia Pacific now has a core around which to develop--the Trans-Pacific Economic Partnership (TPP)--free trade negotiations underway between eight Asia-Pacific Economic Cooperation member economies. A bilateral U.S.-Thai free-trade agreement was left on the table in 2006. America should dust it off and get negotiations moving again with an eye toward not only completing a first-rate agreement but including the Thais in the broader TPP.

On the diplomatic, military side, the U.S. should make clear that it has no intention of compromising its predominance in Asia. Such clarity demands a level of defense spending that will belie Asian suspicions of an American superpower in decline. It also means participating in the region's diplomatic life. This year's Association of Southeast Asian Nations (ASEAN) Regional Forum is being held in Thailand. Prior to the last few years, the U.S. secretary of state's attendance was a given. Once again becoming a reliable ASEAN participant in the year America's Thai allies host will be well-noted in the region. President Obama should also resurrect plans for a full-fledged U.S.-ASEAN leaders' summit, an idea abruptly cancelled by President Bush in 2007, and schedule it in Thailand during this year's ASEAN leaders' meetings.

Reinforcing the Alliance

America's allies are the foundation of its commitment to Asia. These allies make policy formulation easier when they stay true to their democratic values. When one of the allies strays, the U.S. should help bring it back to its senses, as President Bush sought to do with Thailand. By the same token, when one demonstrates a commitment to the alliance's mutual values, America should use the occasion to reinforce the relationship. It is good to have Thailand in the club.

Walter Lohman is Director of the Asian Studies Center at The Heritage Foundation.

Odierno Challenged the Military Establishment, Pressing for More Troops and a Long-Term Strategy to Guide Them

The Dissenter Who Changed the War. By Thomas E. Ricks
As the No. 2 Commander in Iraq, Raymond Odierno Challenged the Military Establishment, Pressing for More Troops and a Long-Term Strategy to Guide Them
The Washington Post, Sunday, February 8, 2009; Page A01

Full set or articles w/key documents here

Army Gen. Raymond T. Odierno was an unlikely dissident, with little in his past to suggest that he would buck his superiors and push the U.S. military in radically new directions.

A 1976 West Point graduate and veteran of the Persian Gulf War and the Kosovo campaign, Odierno had earned a reputation as the best of the Army's conventional thinkers -- intelligent and ambitious, but focused on using the tools in front of him rather than discovering new and unexpected ones. That image was only reinforced during his first tour in Iraq after the U.S. invasion in 2003.

As commander of the 4th Infantry Division in the Sunni Triangle, Odierno led troops known for their sometimes heavy-handed tactics, kicking in doors and rounding up thousands of Iraqi "MAMs" (military-age males). He finished his tour believing the fight was going well. "I thought we had beaten this thing," he would later recall.

Sent back to Iraq in 2006 as second in command of U.S. forces, under orders to begin the withdrawal of American troops and shift fighting responsibilities to the Iraqis, Odierno found a situation that he recalled as "fairly desperate, frankly."

So that fall, he became the lone senior officer in the active-duty military to advocate a buildup of American troops in Iraq, a strategy rejected by the full chain of command above him, including Gen. George W. Casey Jr., then the top commander in Iraq and Odierno's immediate superior.

Communicating almost daily by phone with retired Gen. Jack Keane, an influential former Army vice chief of staff and his most important ally in Washington, Odierno launched a guerrilla campaign for a change in direction in Iraq, conducting his own strategic review and bypassing his superiors to talk through Keane to White House staff members and key figures in the military. It would prove one of the most audacious moves of the Iraq war, and one that eventually reversed almost every tenet of U.S. strategy.

Just over two years ago, President George W. Bush announced that he was ordering a "surge" of U.S. forces. But that was only part of what amounted to a major change in the mission of American troops, in which many of the traditional methods employed by Odierno and other U.S. commanders in the early years of the war were discarded in favor of tactics based on the very different doctrine of counterinsurgency warfare.

Now, President Obama, an opponent of the war and later the surge, must deal with the consequences of the surge's success -- an Iraq that looks to be on the mend, with U.S. casualties so reduced that commanders talk about keeping tens of thousands of soldiers there for many years to come.

The most prominent advocates of maintaining that commitment are the two generals who implemented the surge and changed the direction of the war: Odierno and David H. Petraeus, who replaced Casey in 2007 as the top U.S. commander in Iraq and became the figure most identified with the new strategy. But if Petraeus, now the head of U.S. Central Command, was the public face of the troop buildup, he was only its adoptive parent. It was Odierno, since September the U.S. commander in Iraq, who was the surge's true father.

In arguing for an increase in U.S. forces in Iraq, Odierno went up against the collective powers at the top of the military establishment. As late as December 2006, Marine Gen. Peter Pace, then chairman of the Joint Chiefs of Staff, was privately telling his colleagues that he didn't see that 160,000 U.S. troops in Iraq could do anything that 140,000 weren't doing. The month before, Army Gen. John P. Abizaid, then head of Central Command, told a Senate hearing that he and every general he had asked opposed sending more U.S. forces to Iraq. "I do not believe that more American troops right now is the solution to the problem," Abizaid emphasized.

This account of the military's internal struggle over the direction of the Iraq war is based on dozens of interviews with Odierno, Petraeus and other U.S. officials conducted in 2007 and 2008. In many cases, the interviews were embargoed for use until 2009.

Odierno's role has not been previously reported, and he remains a controversial figure because of his first tour in Iraq, when the tactics he employed violated many of the counterinsurgency principles he would later embrace.

Retired Army Col. Stuart Herrington, a veteran intelligence officer, concluded that the approach that many U.S. commanders used in the early days of the Iraq war effectively made them recruiters for the insurgency, and he was especially bothered by the actions of Odierno's division. "Some divisions are conducting operations with rigorous detention criteria, while some -- the 4th ID is the negative example -- are sweeping up large numbers of people and dumping them at the door of Abu Ghraib," Herrington wrote in a 2003 report to Brig. Gen. Barbara Fast, the top Army intelligence officer in Iraq.

Odierno was determined to operate differently on his second tour of duty, but he will not talk about how his transformation occurred. "I think everyone's changed," he said, brushing aside the question in one of a series of interviews in Iraq over the past two years. "We've all learned."

But one impetus, Odierno agreed, was the severe wounding of his son in August 2004. Lt. Anthony Odierno, then in the 1st Cavalry Division, had been leading a patrol near Baghdad's airport when a rocket-propelled grenade punched through the door of his Humvee, severing his left arm.

"It didn't affect me as a military officer, I mean that," Odierno said one evening in Baghdad much later. "It affected me as a person. I hold no grudges. My son and I talked a lot about this. He was doing what he wanted to do, and liked what he was doing."

But he said it did deepen his determination. "I was going to see this through -- I felt an obligation to see this through. That drives me, frankly. I feel an obligation to mothers and fathers. Maybe I understand it better because it happened to me."

The most important factor in his change in thinking, however, was probably his growing belief, as he prepared to redeploy to Iraq, that the United States was heading toward defeat.

The General Fears That His Commanders' Plan Will Lead to Failure.

As the newly designated second in command in Iraq, Odierno was given a clear understanding of the scenario that Bush, Defense Secretary Donald H. Rumsfeld and his military superiors expected to play out: The United States would begin drawing down its forces in Iraq, cutting the number of combat troops in 2007 by as much as a third.

His responsibilities were equally clear: moving U.S. forces outside all major cities and establishing a handful of bigger bases along key roads leading into Iraq, deploying U.S. forces to the country's borders to limit outside influence, speeding up the transition to Iraqi security forces, and letting Iraqis handle fighting in the cities.

But the more the general and his team considered this plan, they less they liked it. They feared that it got ahead of the Iraqis' ability to do the job and thus, in keeping with the American pattern in Iraq since 2003, was likely to amount to one more rush to failure.

Odierno was "very nervous" about the course of U.S. strategy, he recalled. He decided to formally oppose any additional troop cuts. He wasn't even thinking about an increase, because, he said, "I didn't think I could get more."

He and a small group of advisers decided on a course almost the opposite of the plan given them. Instead of moving out of the cities, they would deploy more forces into them. Instead of consolidating their base structure, they would establish scores of smaller outposts. Nor would they withdraw to the borders. And most emphatically, they would slow, not accelerate, the transition to Iraqi forces.

Odierno realized that to take all those steps, he would need more troops -- and before long, it was clear to subordinates that Odierno was at odds with Casey, his commanding officer. "Casey fought it all the way," recalled Brig. Gen. Joe Anderson, then Odierno's chief of staff.

In an interview last year, Casey seemed puzzled when told that Odierno had grave doubts about the direction of the war back in late 2006. "Ray never came to me and said, 'Look, I think you've got to do something fundamentally different here,' " he said.

But to their subordinates, the disagreement was obvious. "We would backbrief one general and get one set of guidances, and then brief the other and get a different set," remembered a senior Army planner in Iraq.

In Washington, Keane had his own doubts about U.S. policy and was not shy about expressing them. More influential in retirement than most generals in active service, he allied himself with Odierno, advising him to ask for five new brigades. But when Odierno raised that number with Casey, his commander dismissed the notion. "He said, 'You can do it with two brigades,' " Odierno recalled. "I said, 'I don't know.' "

Plotting with Odierno, Keane bypassed the Pentagon and called the White House, which he had already been lobbying for a troop surge. "Just think about what's going to happen," he told national security adviser Stephen J. Hadley. "You are not going to be effective in bringing down the violence with only two additional brigades, therefore you will call for an additional brigade three separate times, each time because we do not have sufficient troops. The media will be all over you for failing three more times. Meanwhile, the president is going to bite this bullet; he should only bite it once. He shouldn't bite it one time and then three more times."

Throughout that fall, Keane recalled, he had "a continuous dialogue" with Odierno. "He knows he needs more troops; he knows the strategy has got to change. His problem is General Casey."

In Baghdad, Odierno tasked his planners with considering how they would use the additional troops. "We have to secure the population, first thing," he told them. "We have to get back out into Baghdad."

They thought they really needed about eight brigades, but they knew that no more than five would be possible and that it would take months to get them all to Iraq.

The Joint Chiefs backed Casey. But after the Democratic victory in that November's congressional elections, Bush fired Rumsfeld, replacing him with former CIA director Robert M. Gates, who brought a skeptical view of how the Iraq war had been managed. And on Dec. 19, the day after Gates was sworn in, Bush acknowledged that "we're not winning, we're not losing" in Iraq -- a striking turnaround from his previously positive formulations.

Shortly thereafter, Gates and Pace, the Joint Chiefs head, left for Iraq. In Baghdad they met with Abizaid of Central Command, Casey and Odierno. The first two generals were at loggerheads with Odierno, the newer, younger and junior officer pushing hard for more troops. Gates listened without indicating which way he was leaning.

Gates later had breakfast with some young soldiers. "Never mind all the generals standing around," he began, according to a tape recording of the meeting, which reporters did not attend. He found far more agreement in the ranks on the need for more manpower.

On the long flight home to Washington in a C-17 military cargo jet, Gates, who declined to be interviewed for this article, disappeared into his mobile home in the plane's belly with Pace and a bottle of California cabernet sauvignon. A few days later, Odierno got the word: Gates wants you to have all five brigades.

"The surge really began the day that Gates visited," Odierno later concluded.

The Military Transforms Its Mind-Set Along With Its Tactics.

Once it was decided that the troop buildup would have five brigades, Odierno laid down some key principles to his planners and commanders.

First, the strategy wouldn't be just about Baghdad -- a decision influenced by heeding the experience of former Iraqi leader Saddam Hussein's generals. American analysts, studying Hussein's deployment of Republican Guard troops in 2002 and 2003 west and south of the capital, had assumed that the move was made to reduce the ability of commanders to launch a coup. No, the Iraqi generals told them: The elite troops were kept there, rather than in Baghdad, because that was where the trouble was.

So while the first two American brigades of the surge went into the capital, the next three went mainly into areas around the city. Ultimately, the surge forces were divided about evenly between Baghdad and its outskirts.

The second principle, Odierno said: Don't make a move unless your presence is sustainable, and once you take an area, don't leave it uncovered. "Don't give up terrain," he ordered his commanders. "Don't try to do too much." This tactical patience was consistent with the Army's new counterinsurgency manual and the thinking of its author, who arrived in Baghdad in February as Odierno's commanding officer.

Odierno and Petraeus made an odd pair: Odierno, at 6 feet 5 inches and 245 pounds, is eight inches taller and 90 pounds heavier than Petraeus. Odierno's most noticeable physical trait is his bulk topped by his bald, bulletlike head. Petraeus is small and slightly buck-toothed. The nimble Petraeus is as much a diplomat as a soldier, while the hulking Odierno always seemed inclined to use firepower. Odierno is emotional, the type of general who will bear-hug a colonel having a hard day. Petraeus is cool to the point of being remote.

During their first tours, in 2003-2004, the two generals commanded divisions in adjacent areas -- Odierno with the 4th Infantry Division headquartered in Tikrit, and Petraeus with the 101st Airborne north of him in Mosul. But they had run their divisions very differently, with Odierno inclined to use the closed fist and Petraeus the open hand.

The guidance Odierno gave his subordinates during his second tour underscored just how much he had changed. His "key message" at one meeting, according to an internal Army summary, was that "planners must understand the environment and develop plans from an environmental perspective [instead of] an enemy situation perspective."

This was classic counterinsurgency thinking, almost the opposite of the strategy that Odierno and most of the Army had taken in Iraq in 2003-2004, when they emphasized a kill-and-capture approach.

"General Odierno has experienced an awakening," said Herrington, the retired intelligence officer who in 2003 wrote the report highly critical of the general. "I've now completely revised my impression of him."

The change in tactics and the increase in troops were not the only reasons that the security situation in Iraq would improve in the following months. By the time the surge began, the ethnic cleansing by Shiite militias had largely been completed. In addition, Moqtada al-Sadr, the anti-American Shiite cleric, declared a cease-fire later in 2007. Most important, Petraeus that year decided to put large parts of the Sunni insurgency on the U.S. payroll, essentially paying them to stop fighting.

In a recent interview, Odierno expressed surprise that a book by The Washington Post's Bob Woodward, published just as Odierno took command in Iraq, credited White House aides and others in Washington with developing the surge. From Odierno's perspective -- and that of many other senior officers in Iraq -- the new strategy had been more or less conceived and executed by himself in Baghdad, with some crucial coaching from Keane in Washington.

"We thought we needed it, and we asked for it and we got it," he said, referring to the strategy. "You know, General Petraeus and I think . . . I did it here, [and] he picked it up. That's how we see it. And so it's very interesting when people back there see it very differently."

Of course, Odierno said, ultimately Bush had to make the policy decision, and some White House aides encouraged that step. But, he continued, "they had nothing to do with developing" the way it was done. "Where to go, what [the soldiers] would do. I mean, I know I made all those decisions."

Odierno's focus is now the future -- and trying to influence the decisions of the new administration.

While he believes the surge has achieved some important tactical success, Odierno appeared uncertain of its long-term impact, specifically whether the improved security has created the breathing space for Iraqi leaders to foster reconciliation among the nation's warring factions -- the strategy's long-term political goal.

As 2008 proceeded, not only were some top Iraqi officials not seizing the opportunity, some were regressing, Odierno worried one day last November as he sat in the Green Zone office he had inherited from Petraeus.

"What we're finding is that as Iraq has become more secure, they've . . . moved backwards, in some cases, to their hard-line positions, whether it be a Kurdish position, an Arab position, a Sunni position, a Shi'a position, a Da'wa position, an ISCI position" -- the last two being the major Shiite parties.

Obama is likely to find Odierno and other generals arguing passionately that to come close to meeting his commitment to keeping U.S. troops safe, keeping Iraq edging toward stability and maintaining the pressure on extremists, he will need a relatively large force to remain in Iraq for may years.

When asked what sort of U.S. military presence he expected in Iraq around 2014 or 2015 -- well after Obama's first term -- Odierno said, "I would like to see a . . . force probably around 30,000 or so, 35,000," with many troops training Iraqi forces and others conducting combat operations against al-Qaeda in Iraq and its allies.

One of the points he would stress to the new commander in chief, Odierno said, would be "the importance of us leaving with honor and justice. "

"For the military, he added, "it's extremely important because of all the sacrifice and time and, in fact, how we've all adjusted and adapted."

In WaPo: New Powers for Obama's National Security Council

New Powers for Obama's National Security Council, by Karen DeYoung
Agency headed by former Marine Gen. James L. Jones to expand and increase role in setting policy across spectrum of foreign and domestic issues.
Sunday, February 8, 2009; Page A01

President Obama plans to order a sweeping overhaul of the National Security Council, expanding its membership and increasing its authority to set strategy across a wide spectrum of international and domestic issues.

The result will be a "dramatically different" NSC from that of the Bush administration or any of its predecessors since the forum was established after World War II to advise the president on diplomatic and military matters, according to national security adviser James L. Jones, who described the changes in an interview. "The world that we live in has changed so dramatically in this decade that organizations that were created to meet a certain set of criteria no longer are terribly useful," he said.

Jones, a retired Marine general, made it clear that he will run the process and be the primary conduit of national security advice to Obama, eliminating the "back channels" that at times in the Bush administration allowed Cabinet secretaries and the vice president's office to unilaterally influence and make policy out of view of the others.

"We're not always going to agree on everything," Jones said, and "so it's my job to make sure that minority opinion is represented" to the president. "But if at the end of the day he turns to me and says, 'Well, what do you think, Jones?,' I'm going to tell him what I think."

The new structure, to be outlined in a presidential directive and a detailed implementation document by Jones, will expand the NSC's reach far beyond the range of traditional foreign policy issues and turn it into a much more elastic body, with Cabinet and departmental seats at the table -- historically occupied only by the secretaries of defense and state -- determined on an issue-by-issue basis. Jones said the directive will probably be completed this week.

"The whole concept of what constitutes the membership of the national security community -- which, historically has been, let's face it, the Defense Department, the NSC itself and a little bit of the State Department, to the exclusion perhaps of the Energy Department, Commerce Department and Treasury, all the law enforcement agencies, the Drug Enforcement Administration, all of those things -- especially in the moment we're currently in, has got to embrace a broader membership," he said.

New NSC directorates will deal with such department-spanning 21st-century issues as cybersecurity, energy, climate change, nation-building and infrastructure. Many of the functions of the Homeland Security Council, established as a separate White House entity by President Bush after the terrorist attacks of Sept. 11, 2001, may be subsumed into the expanded NSC, although it is still undetermined whether elements of the HSC will remain as a separate body within the White House.

Over the next 50 days, John O. Brennan, a CIA veteran who serves as presidential adviser for counterterrorism and homeland security and is Jones's deputy, will review options for the homeland council, including its responsibility for preparing for and responding to natural and terrorism-related domestic disasters. In a separate interview, Brennan described his task as a "systems engineering challenge" to avoid overlap with the new NSC while ensuring that "homeland security matters, broadly defined, are going to get the attention they need from the White House."

Organizational maps within the government will be redrawn to ensure that all departments and agencies take the same regional approach to the world, Jones said. The State Department, for example, considers Afghanistan, Pakistan and India together as South Asia, while the Pentagon draws a line at the Pakistan-India border, with the former under the Central Command and the latter part of the Pacific Command. Israel is part of the military's European Command, but the rest of the Middle East falls under Central Command; the State Department combines Israel and the Arab countries surrounding it in its Near East Bureau.

"We are going to reflect in the NSC all the regions of the world along some map line we can all agree on," Jones said.

The national security process, he said, will also be "transparent to its clients" inside the administration, with meeting agendas and outcomes made available to "the whole community" in real time. Each department will appoint someone to monitor the NSC process, enabling senior officials across the government to be ready to jump into issues without steep learning curves.

Directorates inside Jones's NSC staff will oversee implementation of decisions. "It doesn't mean that we micromanage or supervise," he said. "But you have to make sure, . . . particularly if it's a presidential decision, that the president is kept abreast of how things are going. That it doesn't just fall off the end of the table and disappear into outer space."

Most modern chief executives have issued an early directive outlining a structure for making national security decisions. Although the 1947 National Security Act created the NSC and listed its membership -- including the president, the vice president, and the secretaries of state and defense -- each president has redefined it to fit his own needs and style. In recent administrations, the CIA director, the chairman of the Joint Chiefs of Staff and at times the Treasury secretary have regularly attended principals meetings. At the same time, the role and power of the president's national security adviser, and the size of his staff, have grown larger or smaller depending on the president's wishes.

But initial presidential intentions have often been waylaid by personalities and events. George W. Bush criticized Bill Clinton's NSC style as rambling and indecisive. Over the next eight years, however -- as first-term Bush adviser Condoleezza Rice was outmaneuvered by Vice President Richard B. Cheney and Defense Secretary Donald H. Rumsfeld and as Bush's second term became mired in an unpopular war and a failing economy -- decision-making quickly became more reactive than strategic, and deliberations were opaque to all but a small inner circle.

The Obama administration -- with powerful figures such as Secretary of State Hillary Rodham Clinton and Defense Secretary Robert M. Gates -- appears crowded at the top of the national security pyramid and heavy with military officials, including Jones himself and retired Navy Adm. Dennis C. Blair as director of national intelligence. Special envoys to trouble spots -- former diplomat Richard C. Holbrooke to Afghanistan and Pakistan, and former senator George J. Mitchell to the Middle East -- have been given broad presidential authority.

Although Jones said he strongly supports increased resources for the State Department, which is increasingly dwarfed by the size and expanding missions of the Defense Department, he has long been an outspoken proponent of a "pro-active military" in noncombat regions. He has advocated military collaboration with the oil and gas industry and with nongovernmental organizations abroad.

But Jones said he sees an administration filled with colleagues rather than competitors. Since Jan. 20, "I've had more meetings with the secretary of state and the secretary of defense than I've had in my entire lifetime," said Jones, who served as Marine Corps commandant, NATO military chief and, under Bush, a special Middle East envoy.

During a midafternoon interview last Thursday, Jones said he had already spoken face to face with Gates and had four telephone conversations with him that day. He has set up a standing Wednesday morning meeting with Gates and Clinton together in his office.

"I believe in collegiality . . . in sounding out people and getting them to participate," Jones said. "I notice the president is very good at that." But he made clear he plans to apply military-like discipline to the NSC. "The most important thing is that you are in fact the coordinator and you're the guy around which the meetings occur. When we chair a principals meeting, I'm the chairman." One of the first of many internal Bush administration clashes occurred when Cheney proposed that he, rather than Rice, chair NSC meetings.

In his initial conversations with Obama before taking the job, Jones confirmed, he insisted on being "in charge" and having open and final access to the president on all national security matters. "We engaged in about an hour-long discussion about what I was already thinking about the NSC; it happened, I think, to mesh pretty well with what his instincts were. He was clear about the role of the national security adviser," Jones said of Obama.

The NSC will take on all national security matters that are strategic in nature and "of such importance that the president of the United States would care" about them, he said. Action groups from various departments and agencies will be formed around specific issues for as long as it takes to resolve them. "Some of these things will be very short-term. When the problem goes away, the group goes away." Others will be ongoing. "An Afghan strategic review, that's going to take a while," Jones said. "The policy that is generated from that review, and the implementation, is going to take a while."

Some principals will be regulars at the NSC "just by force of issues," he said, and "you can't just designate the whole government as being there." But everyone should be kept aware of "what's going on" and given an opportunity to say, 'Wait a minute, I've got something to say here.' "