Obama revives Guantanamo tribunals

President Barack Obama on Friday revived the system of military trials for foreign terrorism suspects at Guantanamo, angering supporters who said he had broken a promise to end the controversial tribunals set up by the Bush administration.

The Democratic president said the commissions would be restarted as an option for trying prisoners at the U.S. military base in Cuba after undergoing several rule changes, including barring statements made under harsh interrogation and making it more difficult to use hearsay evidence.

"These reforms will begin to restore the commissions as a legitimate forum for prosecution, while bringing them in line with the rule of law," said Obama, who opposed the law that created the tribunals during the administration of his Republican predecessor, President George W. Bush.

"He (the president) is determined to reform the military commissions as an available form, along with the federal courts, for prosecution of detainees at Guantanamo," Pentagon spokesman Bryan Whitman told reporters.

Republicans welcomed the move. Senate Republican leader Mitch McConnell called it an "encouraging development." Obama's presidential rival John McCain said it was a step toward a comprehensive detainee policy that "accords with our values and protects our national security."

RIGHTS GROUPS CRITICAL

Rights groups, which have been long been critical of Washington's treatment of foreign terrorism suspects and the use of the detention center at Guantanamo Bay, condemned the decision.

"By resurrecting this failed Bush administration idea, President Obama is backtracking dangerously on his reform agenda," said Kenneth Roth, head of Human Rights Watch.

Amnesty International accused Obama, who took office in January, of breaking a major campaign promise.

"These military commissions are inherently illegitimate, unconstitutional and incapable of delivering outcomes that we can trust. Tweaking the rules of these failed tribunals so that they provide 'more due process' is absurd," said Anthony Romero of the American Civil Liberties Union.

The decision was the second in less than a week to anger Obama's liberal supporters. Earlier this week, he reversed a previous decision and announced he would seek to prevent the release of photographs showing alleged abuse of prisoners, saying the images could endanger U.S. troops abroad.

White House spokesman Robert Gibbs, asked at a briefing if Obama was worried about alienating his most loyal supporters, defended the decisions.

"Look, first and foremost the president of the United States is going to do what he believes is in the best security interests of the people of the United States," he said.

Obama has promised to close Guantanamo Bay prison by 2010. The prison was set up in 2002 at the U.S. base on the southeastern tip of Cuba to house foreign prisoners in the U.S. war on terrorism that Bush declared after the hijacked plane attacks on the United States on September 11, 2001.

Gibbs said the decision to proceed with military commissions would not block the closure, but the administration was working to determine where the tribunals could be held once Guantanamo closes. He also indicated some prisoners would be shifted to the U.S. court system.

DEATH SENTENCES POSSIBLE

Among those facing trial at Guantanamo are self-described September 11 mastermind Khalid Sheikh Mohammed and four co-defendants who could be executed if convicted of nearly 3,000 murder charges stemming from the plane attacks.

When he took office in January, Obama ordered a four-month freeze on Guantanamo court proceedings to give him time to decide whether to move the prosecutions into the regular U.S. civilian or military courts or keep the special tribunals.

The freeze order had been seen as a death knell for the Guantanamo war crimes court, which has completed only two full trials since the detention camp opened.

The administration asked on Friday for a delay in the court proceedings to allow time for the new rules to take effect. The rule changes must be shown to Congress 60 days before they go into force.

"The secretary of defense will be sending to Congress several changes to the rules for military commissions," Whitman said.

He said the rule changes included:

- A ban on using statements obtained during cruel or inhumane interrogation

- A rule making it more difficult to use hearsay evidence

- Greater latitude for the accused to choose a defense counsel

- More protections for a defendant who refuses to testify.

U.S. authorities on Friday also released a Guantanamo Bay detainee who was part of a landmark Supreme Court case that granted inmates at the U.S. military prison the legal right to challenge their confinement, officials said.

The detainee, Algerian national Lakhdar Boumediene, was released from custody and flown from the U.S. Navy base to waiting relatives in France, said officials, who spoke on condition of anonymity.

Criticism : Obama walks tightrope on detainee policy

Suddenly, President Barack Obama is getting criticism from his friends and praise from his opponents -- evidence of how hard it has become to move past George W. Bush's legacy on detainee policy.

Instead of focusing exclusively on Obama's efforts to fix the U.S. economy this week, Washington instead has been fixated on dramas involving interrogation procedures and detainees.

* Obama's decision on Friday to continue for now using the Bush policy of setting up Guantanamo military tribunals to try terrorism suspects drew fire from his allies on the left.

"No amount of tinkering with their rules can fix this discredited system. The commissions -- which President Obama has himself described as an 'enormous failure' -- should be scrapped," said Rob Freer, U.S. researcher at Amnesty International.

On the other hand, Obama was getting praise from people who are usually highly skeptical.

"I am pleased that President Obama has now adopted this view," said Senator John McCain, the Republican presidential nominee last year, who lost the election to Obama.

Ari Fleischer, who was Bush's first press secretary, said Obama "should acknowledge his campaign criticisms were wrong."

"With some minor changes, he really is following the same path President Bush pursued," he said.

Obama also this week angered core supporters by changing his mind and ordering his lawyers to try to block the court-ordered release of dozens of photographs said to depict abuse of detainees, saying the pictures could "inflame anti-American opinion."

* Obama is walking a tightrope with his liberal supporters.

They want him to close the book on the Bush years and hold accountable those responsible for harsh interrogation procedures such as waterboarding, which they call torture.

Democratic strategist Doug Schoen said Obama is following a policy of "pragmatism combined with necessity."

"Obama understands all too well there is nothing to be gained for him and for the United States by looking backward. His problem is he can't totally abandon the Democratic left because he needs them," he said.

* Closing down the Guantanamo Bay prison by Obama's deadline of next January may prove harder than expected.

Many Republicans and Democrats do not want the prisoners there transferred to facilities on U.S. soil.
Obama's attempts to placate the left led to a decision that started the current round of recriminations sweeping Washington.

That was his release last month of previously classified Justice Department memos that outlined the Bush administration's legal justification for harsh interrogation measures.

It led to calls by House of Representatives Speaker Nancy Pelosi for a "truth commission" to investigate Bush-era officials.

She was left struggling to retain her credibility when Republicans charged she knew about the techniques when they were being used in 2002 and did not complain about them then.

Pelosi accused the CIA of lying to Congress in an extraordinary news conference, denying she was briefed by the agency's officials about waterboarding in 2002 and the interrogation of high-value suspect Abu Zubaydah.

CIA Director Leon Panetta issued a statement on Friday backing up the CIA's version of events.

"Our contemporaneous records from September 2002 indicate that CIA officers briefed truthfully on the interrogation of Abu Zubaydah, describing 'the enhanced techniques that had been employed.' Ultimately, it is up to Congress to evaluate all the evidence and reach its own conclusions about what happened," he wrote.

The Pop Vs Obama : Notre Dame Controversy

At the rate things are going, Pope Benedict XVI may find his next trip to the U.S. dogged by airplanes overhead trailing banners with images of aborted fetuses. O.K., that's a bit of hyperbole. But while several prominent conservative Catholics in this country are apoplectic over the University of Notre Dame's invitation of the pro-choice Barack Obama to give the school's commencement address on May 17, the Vatican has stayed completely silent on the matter.

The two very different reactions to the question of whether a Catholic institution should honor anyone who disagrees with the Church's teaching on abortion are just the latest examples of the strikingly divergent responses American Catholic leaders and the Vatican have had to the Obama Administration.

President Barack Obama and Pope Benedict XVI

Three-quarters of Catholics either approve of or offer no opinion on Notre Dame's decision to invite Obama, and the same percentage of U.S. bishops have opted to stay out of the fight. However, for a small but vocal group of conservative Catholics, the episode has become an opportunity to draw lines between those who are genuinely Catholic and those whom they accuse of being Catholic in name only — even the head of the country's premier Catholic university.

"It is clear that Notre Dame didn't understand what it means to be Catholic when they issued this invitation," said Cardinal Francis George, president of the U.S. Conference of Catholic Bishops (USCCB). The conservative Cardinal Newman Society organized a petition calling for Notre Dame president Father John Jenkins to disinvite the President. Professional protesters such as Alan Keyes and Randall Terry have descended on the South Bend campus, pushing blood-covered baby dolls in Spongebob strollers and getting themselves arrested. And Cardinal James Francis Stafford, one of the highest-ranking Americans at the Vatican, has declared Obama an unfit honoree because his statements on abortion reflect "an agenda and vision that are aggressive, disruptive and apocalyptic."

This isn't the first time Obama has received decidedly mixed reviews from Catholics. A few months ago, he issued an Executive Order lifting restrictions on federal funding for stem-cell research. The move was immediately denounced by the USCCB as "morally wrong," and even moderate Catholics complained about the way the decision was handled. But the Vatican had a different reaction. L'Osservatore Romano, the official newspaper published under the authority of the Vatican's Secretariat of State, ran an article in late April essentially urging the bishops to chill out.

Under the headline "The 100 Days that Did Not Shake the World," the paper gave Obama a tentative thumbs-up for his policy changes concerning the economy and international relations. "On ethical questions, too — which from the time of the electoral campaign have been the subject of strong worries by the Catholic bishops — Obama does not seem to have confirmed the radical innovations that he had discussed," said the article, which noted that Obama's stem-cell guidelines were "less permissive" than expected.

So is this a schism? Have Cardinal George and the other conservative U.S. bishops gone rogue? Or is the Pope letting them play bad cop while he makes nice with the popular new American President?

The Vatican has a tradition of remaining largely above the fray while allowing — sometimes even encouraging — local bishops to be more aggressive in challenging political leaders. In Italy, for instance, both Pope John Paul II and Pope Benedict XVI have given communion to pro-choice politicians while letting Italian church leaders take the role of lecturing those Catholics on their dissent from church teaching. And this is particularly true of the Vatican's relationships with foreign leaders, whom the Pope views as fellow heads of state. Some observers have interpreted Cardinal George's Oval Office meeting with Obama on St. Patrick's Day to talk about abortion as an emissary visit, speculating that the cardinal was sent by Benedict.

But if the Vatican merely wanted to avoid public unpleasantness in its dealing with the U.S. President, it could do that by essentially ignoring the new Administration. Instead, it has displayed a surprising optimism, bordering on enthusiasm, for Obama's presidency. Breaking with protocol that usually prevents the Pope from addressing heads of state before they take office, Benedict sent a congratulatory telegram to Obama the day after the November election. The Pope noted the "historic" nature of the victory and said he would pray that God would "sustain you and the beloved American people in your efforts to build a world of peace, solidarity and justice." The two spoke directly less than a week later, and the Pope sent yet another telegram on Jan. 20 when Obama was inaugurated.

When reporters at Catholic News Service, the official news agency of the USCCB, talked to Vatican officials just prior to the Inauguration, they found the Holy See mostly focused on economic issues and Middle East politics. "Asked about pro-life issues, on which Obama and the Catholic Church have clear differences, Vatican officials took a wait-and-see attitude," the news agency reported.

The starkly different responses of some U.S. bishops and the Vatican could just be a matter of pure politics. As Obama's European tour last month showed, the Pope would hardly be the only head of state eager to start off on the right footing with the new Administration. In addition, Obama is broadly popular among American Catholics, 67% of whom gave him a positive approval rating in a recent Pew poll. At a time when the U.S. Catholic Church is losing members — a separate Pew study found that for every American who joins the Catholic Church, four others leave — Benedict may not be willing to test the costs of opposing Obama.

Of course, the Notre Dame kerfuffle has political roots as well. The protesters aren't accusing the university of violating church teaching but rather of violating a 2004 policy that the USCCB approved in the midst of vigorous debate over John Kerry's presidential candidacy. The statement, titled "Catholics in Political Life," was speedily drafted in response to questions about whether Kerry should be denied communion because of his pro-choice positions. Catholic institutions, it read, "should not honor those who act in defiance of our fundamental moral principles." When the bishops approved the statement, it wasn't clear whether it would carry much weight after the election, much less whether it applied to the case of a non-Catholic like Obama.

Among those most eager to drive a wedge between the President and rank-and-file Catholics are Catholic Republicans, who worry about losing more voters to the Democratic Party. Newt Gingrich wasn't yet a Catholic when the 2004 statement was debated and approved. But the new convert was the first to speak out against Notre Dame's commencement speaker. On March 24, the Republican former House Speaker weighed in on his Twitter account, which appears to have limits on capital letters: "It is sad to see notre dame invite president obama to give the commencement address since his policies are so anti catholic values." There's nothing like the zeal of a convert, but Gingrich may find it's awkward to try to be more Catholic than the Pope.

10 U.S. banks to need more capital on stress test

About 10 of the 19 largest U.S. banks being stress tested will be instructed by regulators to raise more capital, according to a source familiar with official talks.

The banks have been negotiating with their regulators about the depth of their capital needs, should the recession prove to be deeper and longer than anticipated. Markets have been anxiously anticipating the results, which will differentiate the strongest banks from those still expected to sustain considerable credit losses.

The exact roster of banks needing to build their capital positions is still unclear. Banks are expected to be briefed on the official results on Tuesday. The Federal Reserve and Treasury Department will also tell them how policymakers plan to publicly unveil the market-sensitive results, the source said, speaking anonymously because the discussions are private.

The Treasury and Fed declined to comment on how many banks will be directed to raise more capital.

The largest U.S. banks have spent recent days making the case to regulators that they have the financial firepower to withstand a deeper recession, as Bank of America on Monday denied a report it was trying to raise capital of $10 billion.

Some industry insiders worry the stress test results come at a time when the sector is starting to see positive effects from some surprisingly strong first-quarter earnings figures.

"I think the great risk there is that you create some new uncertainty and concerns at the very time the financial condition of the banking industry is turning for the better," Wayne Abernathy, an executive at the American Bankers Association and a former Treasury official said earlier on Monday.

Banks found to be in need of more capital will have to embark on a recovery plan that could involve converting preferred stock, raising fresh private capital, or accepting government help -- assistance which comes with close scrutiny from Congress that will certainly be unwelcome on Wall Street.

Banks found to need capital will likely want to lay out capital-raising plans quickly to avoid being punished by panicky investors, although regulators won't require them to put a plan on the table immediately.

The emphasis will be placed on raising capital from within or private outlets. Pouring more public money into banks would put political pressure on President Barack Obama, whose administration is keen to avoid asking lawmakers to approve more bailout money for shortfalls that some analysts think may reach $150 billion.

The Treasury could soon have more funds on hand to infuse into weaker institutions, as officials estimate that stronger banks will return at least $25 billion doled out from the government's financial rescue fund. However, they want to ensure enough capital remains in the system as a whole.

Policymakers are expected to soon lay out conditions banks would need to meet to return funds.

White House spokesman Robert Gibbs on Monday said that the administration does not see a need to ask the U.S. Congress for additional funds to support banks, and that the banks will be encouraged to seek extra funds through private sources.

"I think everyone involved will be looking for banks to raise this through either private means or the selling of some assets that they have or that they control," Gibbs said.

He also said that the banks themselves will determine which steps they will take to raise capital. "They'll have a certain amount of time to put together a plan that meets ... the test of regulators to ensure that stability," Gibbs told reporters.

Some banks have complained that regulators were too harsh in their assessment over how much of a buffer they need to absorb future losses, and were underestimating profitability.

"The banking system can handle an awful lot of loss and be okay," JPMorgan Chase & Co Chief Executive Jamie Dimon said on a conference call, adding that he agreed with legendary investor Warren Buffett who said many banks have enough earning power to make up for future losses.

NOT SO BAD?

Bank of America Corp shares rose more than 19 percent after it denied a Financial Times report that it was working on plans to raise fresh funds to fill a $10 billion capital hole.

The KBW Banks index, which includes about two dozen large banks including Bank of America, rose almost 15 percent.

But investors remained on edge as Thursday's deadline neared. The Associated Press reported that Wells Fargo was asked to raise more capital after its stress test.

Citigroup has also been identified as a bank needing to raise its capital buffer. The firm will need to boost its common equity by up to $10 billion, a person familiar with the matter said Monday.

Bank of America, Wells Fargo and JPMorgan did not immediately respond late on Monday to a request for comment. An official from Citigroup declined comment.

Ratings agency Standard & Poor's said it may lower the counterparty credit ratings of 22 financial firms -- including Bank of America, Wells Fargo and Citigroup -- based on results of its own stress testing.

"These rating actions identify companies that we believe have at least a one-in-two likelihood of a ... downgrade within 90 days," S&P said in a statement. "That said, we believe that most rated institutions will be able to earn their way out of these credit losses during the cycle."

As analysts crunched their own numbers, at least one found that balance sheets may not be in as bad shape as feared.

David Trone, a Fox-Pitt Kelton bank analyst, said he expected Thursday's results to show a few banks were in need of more capital, although the shortfalls would probably be modest and "bank stocks won't collapse."

The U.S. Federal Reserve and other regulators have spent the past few weeks poring over holdings of the 19 largest banks, examining real estate and other assets that have lost significant value as the housing market crashed.

The process aimed to gauge how banks would hold up if the economy were to continue its steep descent and home prices fell another 22 percent this year and 7 percent in 2010.

The institutions undergoing stress tests include Citigroup Inc, Bank of America, Goldman Sachs Group Inc, JPMorgan Chase & Co, Morgan Stanley, MetLife Inc, Wells Fargo & Co, PNC Financial Services Group Inc, US Bancorp, Bank of NY Mellon Corp, SunTrust Banks Inc, State Street Corp, Capital One Financial Corp, BB&T Corp, Regions Financial Corp, American Express Co, Fifth Third Bancorp, KeyCorp and GMAC LLC.

Senators on SCOTUS pick;Obama calls (hopes for progress by July)

President Barack Obama has begun reaching out to senators who will play a key role in the confirmation of his Supreme Court nominee, who the White House hopes will be seated before the court starts its next session.

The president is aware of a "fairly tight timeline" to nominate a candidate in time for the Senate to hold hearings and vote, White House Press Secretary Robert Gibbs told reporters Monday. The next session will begin in
early October.

Obama got his first opportunity to have an impact on the nation's highest court when Justice David Souter announced Friday he will leave the bench after
19 years.

Several factors are being considered in a Supreme Court candidate, White House officials say, including diversity, experience, and age.

The president wants to have a nominee in place and "get something done before Congress gets out of town in August," Gibbs said. That would mean the Senate would vote on the nominee shortly after the August recess ends around Labor Day, if not before, he said. He later clarified his remarks, saying that by late July "this process has to be a decent ways down the field."

But the White House was offering no predictions on when a candidate will be named.

"The process has begun — and began some time ago — to go through prospective and potential candidates, to begin to review the history and the background and their experience," Gibbs said. "But I don't have a specific timeline." No candidates have yet been interviewed by Obama, he said.

Obama called Sens. Orrin Hatch and Arlen Specter of the Judiciary Committee, which will review the nominee's record and hold confirmation hearings. Hatch, a Republican, warned the White House on Sunday about selecting a "judicial activist" to the high court. Specter, a moderate, last week switched to the Democratic Party.

Several factors are being considered in a Supreme Court candidate, White House officials say, including diversity, experience, and age.

"You always assume, rightly so, that whomever you choose is going to have a significant impact on the court for quite some time," said Gibbs. "This is one of nine. And I think you have to assume that whomever you pick is somebody that you believe will have great weight on the court for a long time to come."

Chief Justice John Roberts and Justice Samuel Alito — President George W. Bush's 2005 picks — are both still in their 50s. Justice Clarence Thomas, named by President George H.W. Bush in 1991, turns 61 in June. The other justices besides Souter are all in their 70s or 80s.

But Gibbs emphasized again the main qualities Obama will be looking for: "Somebody that understands the rule of law, somebody that has a record of excellence and integrity, somebody who also understands how these opinions affect everyday lives, and will exercise some common sense."

Retire from Supreme Court:Justice David Souter

After more than 18 years on the nation's highest court, Supreme Court Justice David Souter is retiring, a source close to Souter told Thursday.

Souter will leave after the current court term recesses in June, the source said.
Filling Souter's seat would be President Barack Obama's first Supreme Court appointment -- and the first since George W. Bush's picks of Samuel Alito in 2006 and Chief Justice John Roberts in 2005.

David Souter has served more than 18 years on the Supreme Court.
Souter, 69, was tapped for the court by President George H.W. Bush in 1990, but disappointed many conservatives when he turned out to be a typical old-fashioned Yankee Republican -- a moderate, with an independent, even quirky streak.
Souter's departure will leave the two oldest justices -- and the most liberal -- still on the bench. Retirements for John Paul Stevens, 89, and Ruth Bader Ginsburg, 76, have been rumored for years, with many expecting that one or the other would be the first to give a new Democratic president a Supreme Court vacancy.
Souter's decision came as something of a surprise, although he has long been known to prefer the quiet of his New Hampshire farmhouse to the bustle of the nation's capital.