Corruption

Did China try to buy a Nobel Prize?

Thu, 12/18/2008 - 3:52pm

Swedish prosecutors are investigating whether Nobel Prize jurors who accepted an all-expenses paid trip to China can be charged with accepting bribery. Jurors from the medicine, physics, and chemistry comittees all accepted invitations from the Chinese government to come speak about what it takes to win a Nobel Prize. Chinese authorities covered their plane tickets, hotels, and meals.

One member of the Swedish Royal Academy of Sciences admitted that this doesn't look very good for the prize:

"We should be very careful not to put ourselves in a situation where the Nobel committee's work can be called into question," he said. "I think we should have thought about that here."

On the other hand, if China was trying to influence their decision, they may need to work a little harder. China hasn't won a prize since 1957.

(Hat tip: China Digital Times)

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Report: Blagojevich's Serbian cousin thinks Rod is being framed

Sun, 12/14/2008 - 5:00pm

I'm sure you've heard plenty about the Rod Blagojevich corruption scandal by now. But did you know his father, Radisa Blagojevich, was a Serbian immigrant? Apparently, the story has been getting big play in the old country.

The Chicago Tribune reports that, if Internet comment sections are any indication, there isn't a lot of sympathy in Serbia for the Illinois governor.

But the Associated Press did manage to find some folks who thinks the whole thing is an American plot. "He must have been framed, it's all politics," Rod's (supposed) cousin Dragan told Blic, a Serbian tabloid, in a story that ran under the headline "The Governor Defying Entire America." The AP adds:

Cousin Dragan appeared again in Friday's Blic, saying his famous relative still owns some land in the village so "he can come to Serbia if he cannot take it any more in America."

"He can have a cow or a pig or two, a chicken. ... He is always welcome."

Photo: Brian Kersey/Getty Images News

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Twelve steps to becoming an effective African dictator

Thu, 12/11/2008 - 3:48pm

Binyavanga Wainaina has written a viciously funny step-by-step "guide" for aspiring African dictators in South Africa's Mail & Guardian. Some of the highlights:

Rule 3. Make America or China happy. Make Israel and Saudi Arabia very happy. Become a Muslim, like Idi Amin. Visit Moammar Gadaffi often. He likes African leaders. We do not know why. Pray with George Bush and let him see your soul. Make your country's leading supermodel the ambassador to France and Italy. Ask her to wear a mini when presenting her papers to Nicholas Sarkozy...

Rule 6. Colonial countries expected little of Africans. Maintain this illusion...

Rule 10. A free press is important. But have shares in all major media and make sure that you allow them to be very critical of everything, except you. You can, these days, secretly pay bloggers. They can say, for example, that your economic policy is Keynesian, but they should never say you are a "corrupt Zulu warlord"...

If all these things fail and you find yourself in State House surrounded by screaming citizens carrying homemade weaponry, make sure you have a Hummer (Raila Odinga) in your garage. They are cheap now in America. You can burst out of your palace and make your way to Somalia, where you can become a pirate who earns $50-million a year.

Of course, if you don't have government connections in an unstable African country, you may have to start a country of your own. FP's got your back.

(Hat tip: Ethan Zuckerman)

Update: Apparently I had a brain malfunction and Beth flagged this last week in Smart takes. Sorry about that.

Photo: WALTER DHLADHLA/AFP/Getty Images

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Which country takes the most-likely-to-bribe award?

Wed, 12/10/2008 - 4:10pm

If you were thinking the place Vladimir Putin calls home, you chose wisely, tovarisch. Russia topped the list of countries whose companies are most likely to pay bribes when doing business abroad. China and Mexico took the silver and bronze. India, dropping from first in the 2006 survey, took fourth followed by Brazil and Italy.

Transparency International, a worldwide coalition dedicated to fighting global corruption, based its 2008 Bribe Payers Index (BPI) on interviews with 2,742 senior business executives from companies "selected on the size of their imports and inflows of foreign direct investment."

Among those on the up and up, Belgium ranked the least likely to engage in bribery, followed by Canada, the Netherlands, and Switzerland. The United States managed to squeak in with the top ten "good guys," ranking ninth.

Photo: Christopher Furlong/Getty Images

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Tuesday Map: 'Where do babies come from?'

Tue, 12/02/2008 - 5:45pm

If you haven't yet had a chance to read E.J. Graff's superb piece "The Lie We Love" from our November/December issue, it's now available for free on ForeignPolicy.com. The piece is an exploration of the dark side of global adoption and the myth that millions of healthy babies are waiting for adoption in the developing world. Too often, Graff argues, these infants are "manufactured" to meet Western demand.

To accompany the piece, Brandeis University's Schuster Institute for Investigative Journalism has put together this online map showing the countries where the most serious adoption irregularities occur. Click through for in depth country data and check back as more countries are added:


Memo to the U.S: Don't be like Zambia

Tue, 11/04/2008 - 11:28am

Zambia has chosen today, of all days, to act out every American's worst fears about their own election. Michel Sata, leader of the Zambian opposition Patriotic Front Party, announced that he will challenge the result of Zambia's election last week. Sata had announced before the vote that he would not accept a defeat, and has evidently made good on that promise by accusing the army of "intimidating people," and "[fixing] the election" in favor of his opponent, Rupiah Banda.

Could the American election reach Zambia's levels of dysfunction? Well, probably not, though there have been signs that the voting hasn't gone entirely smoothly. The process got off to a bad start yesterday, when thousands of pages of voter information were found inexplicably lying on the side of a highway in Florida. Today, The New Republic's David Jamieson reported complaints ranging from a lack of ballots at polling places, flyers telling people to vote on Wednesday, and even "wet ballots."

Here's hoping for an Election Day with a bare minimum of soggy ballots, and which evokes no parallels to Zambian politics.

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Mandelson's mission to Moscow

Thu, 10/30/2008 - 2:11pm

It makes sense that the British government would want to smooth over relations with Russia by sending a cabinet minister to visit Moscow, the first such visit in over a year. But couldn't the Brits have sent someone -- anyone -- other than Business Secretary Peter Mandelson, who is currently at the center of a scandal over his relationship with a Russian oligarch?

Mandelson's friendly overtures to the Kremlin have been entirely overshadowed by questions from the British press. At issue is whether favors from metals magnate Oleg Deripaska played a role in Mandelson's decision to reduce aluminum tariffs while he was EU trade commissioner, a decision that greatly benefited Russia's richest man. Months after the change, Deripaska entertained Mandelson and other VIPs on his yacht in the Mediterranean.

Mandelson angrily brushed aside a question about the scandal during a press conference Wednesday, telling the reporter, "You have wasted your question." Mandelson has been cleared by the British government of any wrongdoing, but during a BBC interview, also yesterday, he noticeably failed to deny that he and Deripaska had discussed lowering the tariffs prior to the decision being made.

The tabloids have been having a field day with the $9,000-a-night hotel suite where Lord Mandelson is staying during his Moscow visit, a questionable PR move during an economic crisis. The Daily Mail proclaimed the room, "Fit for an Oligarch." It also can't help Mandelson that Deripaska is back in the headlines for the $4.5 billion bailout he received from the Russian government this week.

The Brits might want a do-over on this one.

Photo: Alexey SAZONOV/AFP/Getty Images

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Why the African Leadership Prize matters

Tue, 10/21/2008 - 11:57am
CARL DE SOUZA/AFP/Getty Images

Mo Ibrahim is a rare breed of African billionaire. On a continent far too often associated with the Mobutu Sese-Sekos and Charles Taylors of the world (whose fortunes came from commodity wealth, skimmed gracefully off the state budget), Ibrahim did it differently. A Sudanese telecoms entrepreneur, he earned his respect and big bucks as a businessman.

Now Ibrahim has set himself on a far more difficult task: fixing African governance and changing the continent's culture of corruption. A politician in Nigeria once described it to me like this: In a continent where so many are poor, when you see the chance to secure a financial future, you take it. Unabashedly, many politicians have done so. In 2006, Transparency International estimated that $140 billion of misappropriated African money was invested abroad.

Ibrahim just may have found one of those rare strategies that is perfectly suited to the problem. Need an incentive for good governance? How about the more than $5 million that the Mo Ibrahim Foundation now offers to its yearly prize winner, a head of state who has recently left office. The qualifications are simply good behavior: attention to economic development, human rights, public health, transparency, rule of law, and security.

It's still nothing compared to the potential payoffs for corrupt leaders, (during my time in Nigeria, a former governor was arrested for having amassed $35 million in foreign accounts, though his official salary was just $25,000 a year) but it is a well-earned reward for those who resist this path. This year's winner, former Botswanan president Festus Mogae, oversaw economic growth and enormous progress in battling the stigma attached to HIV/AIDS patients.

The prize has been criticized by some for rewarding behavior that should just be expected as something extraordinary. But the most important aspect the prize has is not the reward itself, but the chance to tell the other story about African leadership -- to the continent itself and to the world. As Ibrahim explained to the New York Times, we all know about the Mugabes of Africa, but they're only part of the story.

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Russians, yachts and money

Tue, 10/21/2008 - 10:20am
Photo by Peter Macdiarmid/Getty Images

There are two stories today about Western politicans soliciting donations from Russian citizens. One is just funny, the other, a potentially bigger deal.

The BBC reports that Russia's U.N. ambassador Vitaly Churkin has been receiving mailers from McCain's campaign asking for help to "stop the Democrats from seizing control of Washington and implementing their radically liberal policy for our nation."

It's obviously just a mistake so there's no foul here, but Russia's U.N. mission seems to be relishing the opportunity to embarrass Mr. "We are all Georgians." As McCain spokesman Brian Rogers said, "it sounds like they're having a little fun at our expense."

If the British media seems to be overselling the Churkin story, it's probably an attempt to tie it to a British scandal with potentially far more serious implications. In a letter to the Times of London today, hedge fund manager Nathaniel Rothschild accused shadow chancellor of the exchequer George Osborne (above) of soliciting a donation to the Conservative Party from Russian billionaire Oleg Deripaska while all three were vacationing on the Greek Island of Corfu over the Summer.

Rothschild suggests that Osborne asked for £50,000 on board Deripaska's private yacht and discussed with a Tory fund raiser how the Russian citizen's donation could be channeled through one of the British companies he owns. Osborne has denied soliciting the donation, though he admits spending time on the yacht. The Osborne allegations are actually just the latest twist in a scandal that until now focused on European Union Trade Commissioner Peter Mandelson, a Labour Party member, who also availed himself of Deripaska's hospitality at the same gathering.

Memo to politicians everywhere: Even if you're not doing anything explicitly illegal, avoid spending time on yachts with wealthy foreign nationals. It never looks good.

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Rapping about economic gangsters

Fri, 10/17/2008 - 9:26am

Economic development blogger Chris Blattman has posted an interesting interview with Raymond "Ray" Fisman and Edward "Ted" Miguel, authors of "How Economics Can Defeat Corruption" in the September/October issue of FP:

[Chris]: Economists are fond of saying that strong institutions are at the heart of American economic growth. I say they should watch 'Gangs of New York' -- Scorsese makes Lagos and Nairobi look like kindergarten by comparison. Do we underplay violence and corruption in our own history, and overplay it in Africa today?

Ted: Yes, we could easily have written a book about violence and corruption in 19th century America or Europe. And there are surely lessons to be learned about present-day problems from looking at that earlier era, and vice versa.

Ray: But there are some highly instructive differences. In the 1970s, Sierra Leonian President Siaka Stevens destroyed the railroad in his country's southeast as a means of weakening an opposing ethnic group, the Mende. Contrast this with the equally corrupt robber barons of 19th century America, who used their power to build railways instead of tearing them down.

 

Fisman and Miguel have also started a promising-looking blog on the site for their new book, Economic Gangsters: Corruption, Violence, and the Poverty of Nations, on which their FP article was based.


Mbeki's fall, South Africa's loss

Mon, 09/22/2008 - 12:19pm
ALEXANDER JOE/AFP/Getty Images

If you were investing in South Africa's promising economy, what is the last thing you'd like to see

Well, there's no need for hypotheticals. You could have just watched the news last night.

The resignation of President Thabo Mbeki, who for all his flaws oversaw fantastic economic growth, has sent shivers up investors' spines. South Africa is one step closer to its next elected leader, leftist Jacob Zuma of dubious economic credentials, who is hugely favored to win polls in 2009. But even more alarming, the country's respected political system looks closer to operating on tit-for-tat political disputes than ever in its democratic history.

Zuma was once Mbeki's deputy prime minister, but since a falling out several years ago, he has pushed hard to make his own name. In December, Zuma ousted Mbeki as the party leader of the ruling party, the African National Congress (ANC). Just last week, Zuma and Mbeki sparred again -- this time over long-pending corruption charges against the former. A court dismissed the charges against Zuma, and the ANC accused President Mbeki of having pressured the courts to go after his rival. Mbeki denied the charges, but tendered his resignation after his party pushed him out.

Since Zuma -- not yet a minister or MP -- is currently ineligible, ANC political veteran Kgalema Motlanthe looks slated to take over until next year's elections. Investors are waiting to see if Motlanthe will keep Mbeki's ministers or stick in a few of his own. Zuma, when he comes, has promised to redo South Africa's growth, empowering the working classes. No one is yet certain what that will look like, but opposition politician Helen Zille tells BBC that it's code for "grab the spoils of state." 

It would be a shame if a bitter political struggle sends South Africa back in time. As retired Archbishop Desmond Tutu eloquently put it, "The way of retribution leads to a banana republic."

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Fidel: The ref had it coming

Tue, 08/26/2008 - 12:32pm
BEHROUZ MEHRI/AFP/Getty Images

Remember Angel Matos, the Cuban Olympic martial artist who kicked a referee in the face after he was disqualified from a bronze-medal taekwondo match? According to Fidel Castro, he was totally justified since the match was obviously fixed:

"They had tried to buy his own coach," Castro wrote in his essay, published in state media. "He could not contain himself."

Cuba is accustomed to winning gold in boxing, but settled this year for four silver and four bronze medals. Overall, Cuba took home only two gold medals, down from nine in Athens four years ago.

"I saw when the judges blatantly stole fights from two Cuban boxers in the semi-finals," Castro wrote. "Our fighters ... had hopes of winning, despite the judges, but it was useless. They were condemned beforehand."

After their ejection, Matos's coach alleged that he had been offered a bribe before the match by their Kazakh opponents.

Castro vowed big changes for Cuban sports in the four years in order to counter the "European chauvinism, judge corruption, buying of brawn and brains...and a strong dose of racism" that they were sure to encounter in 2012.

I never like to tell a fellow blogger what he should be writing about, but it seems to me that Castro would better serve Cuban sports by praising an exceptional Cuban athlete like hurdler Dayron Robles, who turned in one of Beijing's more dominating performances, rather than sticking up for an unprofessional bully like Matos.

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Ivory Coast gas-price cut could be double whammy

Mon, 07/21/2008 - 11:27am
ISSOUF SANOGO/AFP/Getty Images

As dreams of a gas-tax holiday died in Congress amid concerns of lost jobs for transport and construction, lawmakers in the Ivory Coast are paying for a reduction in fuel costs out of their own pockets. Both government ministers and managers of state-owned companies will see their paychecks halved to pay for a 10-percent cut in fuel prices, Prime Minister Guillaume Soro says:

Having heard the people's cry from the heart, the government has decided to cut the price of fuel," Mr Soro said.

A noble effort on its face, yes, this political stunt could actually be double trouble for the people of Ivory Coast. We've expressed our skepticism toward "gas-tax holidays" before, but lowering government officials' pay can also prove problematic, making ministers more susceptible to the ubiquitous temptation of corruption.

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Is Mongolia the next democracy to go?

Tue, 07/08/2008 - 12:47pm
JUDE MAK/AFP/Getty Images

After Kenya's violent polls in December, and Robert Mugabe's "sham" reelection last month, electoral violence is rearing its ugly head once more. The latest victim? Mongolia, an otherwise respectable democracy now "facing its biggest challenge since its birth in 1990," The New York Times reports:

Following cries of fraud in parliamentary elections — accusations that were disputed by international election observers — hundreds of rioters, many of them drunk, attacked the headquarters of the dominant political party and the neighboring national art gallery on July 1. Fires were started. Five people were killed. More than 1,000 pieces of artwork were destroyed, damaged or looted.

But not everyone's jumping off the democracy bandwagon just yet. While the government's response to the violence--which included declaring a state of emergency, shutting down media outlets, and deploying troops into the streets--was far from ideal, there are reasons to remain optimistic.

For one, the violence appears not to be caused by any inherent flaws in Mongolia's system, but rather by the unfortunate confluence of economic frustrations and cheap vodka. Second, as we noted in the March/April edition of FP, Mongolia's parliament is among the world's strongest, and recent research shows that countries with strong legislatures are more likely to have resilient democracies.

While the government must answer for its stronghanded response to the recent violence and address the ecnomic concerns that may have caused it, I'd expect the only democracy from the Sea of Japan to Eastern Europe will endure.

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Russia: Closed for business

Tue, 07/01/2008 - 12:49pm
ALEXANDER NEMENOV/AFP/Getty Images

Last month, Dmitry Medvedev assured a group of international CEOs that he would work to enforce the rule of law and establish "absolutely independent modern courts that comply with the country's economic development level." But if the assembled corporate leaders were hoping that the new Russian president would be true to his word, and the corruption and politically motivated prosecutions of the Putin era would end, this has not been an encouraging couple of days.

Yesterday, most of the expatriate staff of TNK-BP, an oil venture co-owned by British Petroleum, were denied extensions of their work visas. CEO Robert Dudley e-mailed employees this morning telling them to prepare for relocation as early as next week. The standoff between BP and its Russian partners has been escalating for months but after today, it appears that that the Russian shareholders have effectively wrestled the company away from the departing Brits. (Medvedev has denied accusations that the government is intervening on behalf of the Russian oligarchs on TNK-BP's board as well as the rumors that his old company Gazprom plans to take control of what's left of the company.)

Also today, new charges were filed against Mikhail Khodorkovsky. Once Russia's richest man, the former CEO of oil company Yukos has languished in a Siberian prison since a tax-evasion conviction in 2003 that was widely seen as punishment for the tycoon's political ambitions. Khodorkovsky has now been charged with embezzling more than $28 billion and stealing 350 million tons of oil. Kohodorkovsky's lawyers had hoped he could be released early after having served more than half his original sentence, but the new charges could keep him behind bars for another 20 years. One of his lawyers, Robert Amsterdam, told Bloomberg: "I don't think they're even trying to make these new charges look real."

Russia's leaders have created a legal system in which it's essentially impossible for a business to operate legally, making anyone who does business there subject to arbitrary prosecution. It's an arrangement that's well-suited to protecting state power, but not very effective at promoting economic growth. If Medvedev really wants to make Russia the world's fifth largest economy by 2020, he's going to need to try a littler harder.

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Russian officials steal a third of the budget

Fri, 06/06/2008 - 12:13pm

Reuters reports:

Corrupt officials are raking off a sum equivalent to one third of Russia's annual budget, or $120 billion, a senior prosecutor was quoted as saying Friday.

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Georgian opposition protests rigging, breaks for soccer finals

Thu, 05/22/2008 - 12:32pm

SERGEI SUPINSKY/AFP/Getty Images

It looks like Georgia's opposition may have a legitimate beef about yesterday's parliamentary election, which President Mikheil Saakashvili's party appears to have won commandingly. Here's what the observer mission from the Organization for Security and Cooperation in Europe had to say:

Parties were able to campaign actively, but there were numerous allegations of intimidation, some of which could be verified [...] Election day was overall calm and generally assessed positively, although problems with inking and instances of pressure on observers and proxies were noted. Counting and tabulation was evaluated less positively, with many significant procedural shortcomings observed.

While they differ little on policy, opposition parties accuse Saakashvili's government of widespread corruption and are still angry over the crackdown on demonstrators in Tbilisi last year.

But as valid as their complaints may be, last night's post-election rally sounds like one uninspiring affair:

The opposition called for protests in Tbilisi late on Wednesday night, saying tens of thousands would gather, but only about 1,000 people showed up [...] Protesters then watched live coverage of the Champions League final in Moscow between English teams Manchester United and Chelsea.

It does sound like it was a good game, but still, this is no way to overthrow a government. I hope they weren't Chelsea fans at least.

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Macedonia: Name not the only thing keeping it out of the club

Wed, 05/14/2008 - 4:06pm
ROBERT ATANASOVSKI/AFP/Getty Images

For months, Greece has been threatening to veto Macedonia’s admittance into the EU, all because the two can't agree on the name issue.  But with violent outbreaks pock-marking Macedonia in the weeks before its June 1 elections, it appears the tiny Balkan state might just knock itself out of contention before Greece even gets the chance.

Last month, Macedonia’s parliament moved to disband and hold snap elections after months of deadlock (and the occasional headlock) over reform issues and rights for its 25 percent Albanian minority.

Since the beginning of the campaign last Sunday, a member of the Democratic Party of Albanians (DPA) has been stabbed to death and members of the rival Democratic Union for Integration (DUI), have been beaten, shot at, and had their offices attacked. In the latter cases, the DUI has blamed the violence on DPA supporters.

EU leaders have expressed concern over Macedonia’s pre-election troubles, saying that "violence has no place in an election campaign."  

This seems like an awfully understated response on the part of the EU, for whom Macedonia is quite close to the front of its new membership queue.  A candidate country since 2005, Macedonia is on track for EU membership in the coming years. But if the country can’t better control its pre-election tensions, is it really ready?  After all, as Bulgaria has shown, EU membership is not just going to make crime and corruption disappear.  But on the flip side, the promise of an EU future may be the only thing keeping countries like Macedonia on track toward an eventually stable government.

So back to Greece and its veto-happy approach to its northern neighbor. Is prolonged regional instability really worth it for one little modifier?


Burmese generals caught in the act

Tue, 05/13/2008 - 3:18pm

It's getting harder for the Burmese state to hide the truly profound level of its own dysfunction:

The Burmese generals were visible all right. State television showed them handing out boxes of the small amount of aid allowed in from neighbouring Thailand. Unwittingly, it also showed that the Burmese leadership had plastered their own names over the true origins of the food aid to fool their own people into believing that the emergency relief supplies had come from them.

You know things are bad when a military dictatorship can't even get its own propaganda right.

(Hat tip: Reason's Kerry Howley)

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Police raid office in Olmert investigation

Mon, 05/12/2008 - 1:57pm

ALEX KOLOMOISKY/AFP/Getty Images Images

Today, Israeli police raided the offices of the Jerusalem municipality looking for evidence of bribes given to Prime Minister Ehud Olmert by New York businessman Morris Talansky.

With Israel's media gag order lifted, more details are starting to come out about the investigation. It now appears that the investigators are looking into money Olmert received while he was a minister in Ariel Sharon's government, not when he was running for mayor of Jerusalem as previously reported:

"At present, the investigation is clearly focusing on the period when Olmert served as the minister of industry, trade and labor," the official said, adding that investigators may yet expand their probe to cover the period during which Talansky raised funds for Olmert's various election campaigns. "The investigators have solid information regarding envelopes of cash that were handed over to Olmert, and there is no information regarding the fate of that money."

In an interview on Israeli television, Talansky denied bribing Olmert and said that he had donated to Olmert's campaigns but had no idea how the money was spent. However, according to the New York Times, a minibar company started by Talansky picked up a $4,717 one-night Washington hotel tab for Olmert in 2005. Even at the Ritz-Carton, that's a lot of cashews.

Meanwhile, George W. Bush will arrive in Israel tomorrow and plans to meet with Olmert. Asked about the investigation today, he described the Israeli prime minister as "an honest man, an open man, a guy easy to talk to and somebody who understands the vision necessary for Israelis' security."

Fifty-nine percent of Israelis, on the other hand, don't really see it that way.

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