The controversial WikiLeaks cache of hundreds of thousands of documents from the U.S. State Department has been yielding many surprises, despite protestations to the contrary.
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One of the most recently unearthed State Department cables involves discussions in the aftermath of the Copenhagen climate change summit of 2009. The document displays the lengths to which U.S. diplomats went to persuade their foreign counterparts to adopt their preferred approach to combating global warming. The document, published by the Guardian newspaper in the U.K., shows how the U.S. used “spying, threats and promises of aid to get support” for the vaguely worded Copenhagen agreement, which was a tremendous letdown to many environmental advocates around the world.
According to the Guardian, “the U.S. diplomatic cables reveal how the U.S. seeks dirt on nations opposed to its approach to tackling global warming; how financial and other aid is used by countries to gain political backing; how distrust, broken promises and creative accounting dog negotiations; and how the U.S. mounted a secret global diplomatic offensive to overwhelm opposition to the controversial ‘Copenhagen accord,’ the unofficial document that emerged from the ruins of the Copenhagen climate change summit in 2009.”
The creative accounting part stems from negotiations with the Maldives, which apparently was one of the few countries that welcomed the U.S.’s preferred approach to climate change. However, officials from the island nation apparently needed some extra convincing. One of the enticements was the $30 billion that the U.S. wanted wealthier countries to pledge to help poorer nations cope with the effects of global climate change.
A diplomat from the Maldives met in February of this year with U.S. deputy climate change envoy Jonathan Pershing and mentioned approximately $50 million in projects that the island nation wanted help in developing. Pershing later met with the European Union’s climate action commissioner, Connie Hedegaard, and they discussed how to raise the $30 billion to help the Maldives and an alliance of other island nations that were endangered by the rising ocean waters. In a cable written by Pershing, he described how Hedegaard questioned whether the money for the islands would be all in the form of cash grants, or include loan guarantees, and whether any “creative accounting” would be needed.
“Hedegaard asked if the U.S. was prepared to move forward on Fast Start funding,” said the cable. “She said some countries like Japan and the U.K. will press the inclusion of loan guarantees as part of the package and asked whether the U.S. will need to do any ‘creative accounting. …’ She added: "$30 billion had been promised — it cannot be lent." She asked for Pershing's thought on the Soros proposal, which she said was ‘tempting in the long-term,’ but she is not sure it will work for Fast Start funding. [Note: In December 2010 George Soros proposed that developed countries return their IMF special drawing rights (SDRs) to the IMF, which could in turn lend the funds to developing countries for mitigation and adaptation. Soros estimated the amount from SDRs could provide about $150 billion. End note.] Pershing replied that this proposal is just another form of loan guarantee, and we were skeptical of its utility; he also said he would share our analysis on it. On Fast Track financing, Pershing said the administration anticipated the need and budgeted funds in 2010 and 2011. He said some U.S. funding would be directly applied for mitigation and adaptation and other sources would be indirect, citing for example program funds from various agencies and funds for food security. He concurred that it would be valuable to agree on what funds would be included in each country's reporting, and said donors have to balance the political need to provide real financing with the practical constraints of tight budgets. He suggested that the small group of key donors — those that provide about 90% of the financing — convene quickly to discuss this issue.”
It will be interesting to see what other accounting-related tidbits are revealed in the hundreds of thousands of confidential cables. It is not very likely that Hillary Clinton ordered State Department employees to secretly tap the phone lines and lift the fingerprints of the members of the International Accounting Standards Board. But there have already been reports of funds being routed to various shady groups and officials in the Middle East and other parts of the world, as well as a separate cache of documents on Bank of America and Guantanamo Bay whose contents have been encrypted with a secret code that could be released to WikiLeakers supporters at some point in the future. No doubt there are many examples to be found in the cables of “creative accounting” put in the service of realpolitik statecraft, combined with large sums of money being moved surreptitiously across the world with few financial controls in place.