Technology and information penetration in China will eventually force the Great Firewall of China to crumble and even lead to the political opening of the Chinese system, according to Google Chairman Eric Schmidt.

Schmidt, who stepped down as Google's CEO last year, remains the head of Google's board and its chief spokesman. He roams the planet speaking to audiences and exploring countries where Google could expand its operations. He has been called Google's "Ambassador to the World," a moniker he doesn't promote but doesn't dispute. He sat down for a long interview with The Cable on the sidelines of the 2012 Aspen Ideas Festival last week.

"I believe that ultimately censorship fails," said Schmidt, when asked about whether the Chinese government's censorship of the Internet can be sustained. "China's the only government that's engaged in active, dynamic censorship. They're not shy about it."

When the Chinese Internet censorship regime fails, the penetration of information throughout China will also cause political and social liberalization that will fundamentally change the nature of the Chinese government's relationship to its citizenry, Schmidt believes.

"I personally believe that you cannot build a modern knowledge society with that kind of behavior, that is my opinion," he said. "I think most people at Google would agree with that. The natural next question is when [will China change], and no one knows the answer to that question. [But] in a long enough time period, do I think that this kind of regime approach will end? I think absolutely."

The push for information freedom in China goes hand in hand with the push for economic modernization, according to Schmidt, and government-sponsored censorship hampers both.

"We argue strongly that you can't build a high-end, very sophisticated economy... with this kind of active censorship. That is our view," he said.

The Chinese government is the most active state sponsor of cyber censorship and cyber espionage in the world, with startling effectiveness, Schmidt said. Google and Beijing have been at odds since 2010, when the company announced it would no longer censor search terms on Google.cn and moved the bulk of its Chinese operations to Hong Kong. That move followed a series of Gmail attacks in 2010, directed at Chinese human rights activists, which were widely suspected to be linked to the Chinese government.

More recently, Google has taken an aggressive approach to helping users combat government cyber censorship, by doing things such as warning Gmail users when Google suspects their accounts are being targeted by state-sponsored attacks and telling users when search terms they enter are likely to be rejected by Chinese government censorship filters.

Schmidt doesn't present Google's focus on state-sponsored cyber oppression as a fight between Google and China. Google's policy is focused on helping users understand what is happening to their accounts and giving them the tools to protect themselves, he explained.

"We believe in empowering people who care about freedom of expression," he said. "The evidence today is that Chinese attacks are primarily industrial espionage.... It's primarily trade secrets that they're trying to steal, and then the human rights issues, that obviously they're trying to violate people's human rights. So those are the two things that we know about, but I'm sure that there will be others."

Google still has hundreds of engineers working inside China and maintains a rapidly growing advertising business there. But the Chinese government is likewise doing a lot to make using Google difficult inside China. There are weeks when Gmail services run slow; then mysteriously, the service will begin running smoothly again, Schmidt said. The Chinese censors sometimes issue punitive timeouts to users who enter prohibited search terms. And YouTube, which is owned by Google, is not visible in China.

"It's probably the case where the Chinese government will continue to make it difficult to use Google services," said Schmidt. "The conflict there is at some basic level: We want that information [flowing] into China, and at some basic level the government doesn't want that to happen."

Meanwhile, Schmidt has been circling the globe looking for ways to expand Google's outer frontiers. His last international trip took him to four conflict or recently post-conflict states: Afghanistan, Libya, Pakistan, and Tunisia.

"I've become particularly interested in the expansion of Google in sort of wacky countries -- you know, countries that have problems," he said. "You can't really know stuff unless you travel and see it. It helps with your impressions and your judgment."

Schmidt believes that smartphone technology can have a revolutionary effect on how people in the developing world operate and he is researching how smartphone use can help fight corruption and bad governance in poor countries. He also sees Google's expansion into the emerging markets as a timely business move.

"The evidence is that the most profitable business in most countries initially is the telecom sector.  The joke is that you know the Somali pirates have to use cellphones, and so the strongest and most fastest-growing legal business in Somalia is the telecom industry," he said.

The revolutions of the Arab Spring show that open information systems can encourage and enable political change, according to Schmidt.

"I think that the countries that we're talking about all had very active censorship regimes, and they failed to censor the Internet. They wired the phone systems, the television was controlled, the newspapers were controlled; it was very hard to find genuinely new dissident voices except on the Internet. So you can think of what happened there as a failure to fully censor, and so it's obvious why we feel so strongly about openness and transparency," he said.

Unlike in China, Google has taken a more active role in other parts of the world by developing tools to spread information that could be used to foster more active democracies, such as with its project to organize and disseminate election information and political candidate data in places like Egypt.

"We're helping with the elections. So we're trying to help them with getting information to the candidates, and these are countries where Google is central to the public sphere," Schmidt said.

Google is also expanding its role in compiling data on government actors and their actions to aid people in the fight against corruption, but here Schmidt warns that only when there is a legal system to prosecute bad actors will this data be transformative.

"You need the data, and then you need somebody who's willing to prosecute the person who lies," he said. "All you have to do is have the information and then the penalty that has to be applied in a fair way, and it would change these countries dramatically."

Information is not enough to topple regimes, but in the end, regimes that fight the openness of information are doomed to fail, he said.

"The worst case scenario is the citizens have enormous information and the government is completely unresponsive. That would be Iran, for example. At some point, that's unstable," said Schmidt. "At some point, it gets worse ... but before they overthrow the current leader, they have to have the information to do that. That's why transparency matters."

It's been almost one year since the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR) has had a permanent leader ...  and Sen. Claire McCaskill (D-MO) is not happy about it.

SIGAR Arnie Fields resigned in January following over a year of bipartisan congressional criticism of his stewardship of the oversight office, which is responsible for finding waste, fraud, and abuse in the tens of billions of U.S. taxpayer dollars being spent to build Afghanistan. On Aug. 4, acting Special Inspector General Herbert Richardson, Fields's replacement, stepped down after only six months on the job, leaving that troubled office without a leader for the second time this year.

Now, three months later, there are no signs the White House is ready to name a new SIGAR. McCaskiill, who has been leading the drive to improve the office along with Sens. Tom Coburn (R-OK) and Susan Collins (R-ME), told The Cable in an interview on Tuesday that the vacancy is troubling and unacceptable.

"I am pushing as hard as I can to get a replacement named," McCaskill said. "Obviously I was very involved in getting General Fields out. I thought the interim [Richardson] was doing much better. I think it's unfortunate that he's gone and we need to get someone else in there."

McCaskill said that she asked the White House for an update on the status of a replacement late last month, and was led to believe a nomination was in the works. But none has materialized. So what's the reason for the inaction?

"I haven't gotten a good answer yet [from the White House]," McCaskill said.

A senior GOP senate aide told The Cable that senate staffs were informed a selection had been made but then that person turned down the job and now the administration is back to square one in looking for a candidate.

McCaskill added that while the auditing at SIGAR continues, the ongoing confusion atop the organization speaks to the need for a new, permanent special inspector general for all overseas contingency operations -- a proposal known as the Office of the Special Inspector General for Overseas Contingency Operations (SIGOCO), which was recommended by the Wartime Contracting Commission.

McCaskill said there is a need for a top oversight official who is "capable of going and looking wherever the U.S. military is operative."

The SIGOCO idea was first devised by Special Inspector General for Iraq Reconstruction (SIGIR) Stuart Bowen, who has been embroiled in a fight with the State Department over that agency's blocking of SIGIR inspectors from assessing the State's multi-billion dollar Iraqi police training program.

"SIGIR is perfectly free ... to audit the reconstruction activities in Iraq. They are not free to audit the base element of the State Department. That is within the jurisdiction of three other entities," Under Secretary of State for Management Patrick Kennedy told the Wartime Contracting Commission in a hearing last month.

Today, Newsweek reported that Bowen believes the Iraqi Army is not fully prepared to take over security in Iraq as U.S. forces withdraw this year.

"As we pull out of Iraq, the Iraqis will have a difficult time replacing the U.S. role in intelligence, logistics, and air defense," Bowen said. "Whether they can sustain themselves if called upon for significant field operations is a big question mark."

The Cable has learned that Herbert Richardson, the acting special inspector general
for Afghanistan reconstruction (SIGAR) is stepping down after only six months on the job, leaving that troubled office without a leader for the second time this year.

Richardson has been running the SIGAR office since the January firing of Arnie Fields, who was finally removed from his position after more than a year of complaints by senior senators including Claire McCaskill (D-MO), Tom Coburn (R-OK), and Susan Collins (R-ME). Fields was criticized for running an oversight office that failed to produce results in the effort to find waste, fraud, and abuse in the tens of billions of dollars in contracts for Afghanistan reconstruction.

Richardson was never nominated to be permanent SIGAR and was leading the office as acting chief. But he will return to the private sector this month, according to four sources with direct knowledge of his decision. The SIGAR office declined requests for comment and said that Richardson was unavailable, in meetings all day. There's no word yet on who will take over as SIGAR.

On Capitol Hill, concerned lawmakers and staffers were actually hopeful that Richardson was improving the performance of the SIGAR office. Today, those congressional offices are back to voicing their usual disappointment and skepticism.

"He stopped some of the suck that was going on there, but it was only six months," one GOP senate aide told The Cable. "At this point they are supposed to be firing on all cylinders. And now that he's leaving, who knows."

"He came in with such fanfare and their team said there would be a ‘culture change' with his arrival," said a House Democratic staffer. "So much for culture change if it was dependent upon leadership."

Coincidentally, SIGAR officials were on the Hill this morning to brief staffers on their quarterly report. Richardson was expected to attend but did not show up. One staffer who attended the briefing said that SIGAR officials failed to mention that Richardson is leaving and the briefing itself left a lot to be desired.

"It was a weak briefing because they have a weak product," this House staffer said. "They just aren't producing convictions at a pace comparable to the results being produced by their counterparts at [the office of the Special Inspector General for Iraq Reconstruction] SIGIR in terms of Iraq."

SIGIR, which was established first and is led by the well respected Stuart Bowen, has a shrinking mission as the U.S. presence in Iraq winds down. Some lawmakers, such as Rep. Mike Honda (D-CA) are calling for SIGIR and SIGAR to be combined into something called the office of the Special Inspector General for Overseas Contingency Operations (SIGOCO), an idea that SIGAR has lobbied hard against.

"Rather than a piecemeal and reactive approach to the oversight of billions of dollars in these situations, we need a dedicated shop run by a proven investigator who can report to the National Security Council, and the Defense and State departments, without being cowed by political pressure," Honda told The Cable. "A permanent Office for Contingency Operations, whose mandate would transcend political timetables, would send the message that transparency, efficiency and efficacy are institutional priorities, and waste and corruption will not be tolerated."

One Senate staffer noted that the law that established SIGAR actually gives the president the authority to combine that office with its Iraq counterpart, placing them both under the control of Bowen.

"Everyone is looking for cuts of agencies that are not performing or duplicative," this staffer said. "We could shut down SIGAR, give some of that money to the DOD Inspector General's office, some for debt reduction, and call it a day."

The United States has committed $51 billion to Afghanistan reconstruction since 2001; that endowment will reach $71 billion by the end of 2011, according to the AP.

UPDATE: Late Thursday afternoon, Richardson put out a statement confirming our report.  "After more than 37 years of public service, I've decided to accept an opportunity in the private sector, at a time when I'm convinced SIGAR has changed course, is producing results, and is being led effectively by the new leadership team that I've put in place," he said.

Special Inspector General for Afghanistan Reconstruction retired Gen. Arnie Fields submitted his resignation Monday, ending over a year of congressional complaints about his performance in overseeing tens of billions of dollars of U.S. taxpayer reconstruction funding in Afghanistan.

In a statement issued by the press secretary's office, the White House praised Fields' tenure and avoided mentioning any of the criticisms leveled by senior senators, including Claire McCaskill (D-MO), Tom Coburn (R-OK), and Susan Collins (R-ME).

"Under General Fields' tenure, SIGAR produced numerous critical reports that have improved reconstruction efforts, and helped insure that U.S.-funded programs are achieving their objectives," the White House said. "General Fields' hard work and steadfast determination have established SIGAR as a critical oversight agency... As he moves on to new challenges, he can do so confident in the knowledge that the President and the American people owe him a debt of gratitude for his courage, leadership, and selfless service to our nation."

The resignation on Monday came as a surprise to watchers around Washington, including those on Capitol Hill who had been working on his ouster, according to multiple senate aides who had been following the ordeal. Following a meeting White House staff in mid December, McCaskill told The Cable that she couldn't get any firm answers from the White House on what they planned to do about Fields.

Fields had come under heavy criticism for his leadership of an oversight office that is failing to effectively monitor the allocation of billions of dollars in U.S. taxpayer funds that are being invested in infrastructure in Afghanistan. Fields was criticized for running an office that failed to recover significant amounts of funds lost due to waste, fraud, and abuse. The work product from SIGAR, which included investigations and audits, was seen as incomplete and often off target by Congressional overseers. A memo circulated by Hill staffers earlier this year outlined the shortcomings of several of the organization's audits.

In her capacity as chairwoman of the Homeland Security and Government Affairs subcommittee on Contracting Oversight, McCaskill called Fields to testify on Nov. 18, where she pointed out that the taxpayers have given $46.2 million to the SIGAR office, but their investigations have only resulted in collections of $8.2 million.

Last July, the Council of Inspectors General on Integrity and Efficiency (CIGIE), which is meant to oversee the overseers, issued a scathing report on SIGAR, which only fueled the fire of lawmakers calling for Fields' removal.

Last week, Fields fired two of his top deputies in an apparent bid to get out ahead of the many criticisms of his leadership at SIGAR, but the move proved not to be enough to save his job. There's no word yet on his possible replacement.

"They better put a rock star in there to replace him, because we are going to keep on watching this one closely," a senior Senate aide close to the issue told The Cable.

The United States has committed $51 billion to Afghanistan reconstruction since 2001; that endowment will reach $71 billion by the end of 2011, according to the AP.

Ever since President Barack Obama took office, his administration has refused to sell military equipment to Georgia. In a newly released WikiLeaks cable, the U.S. ambassador to Russia made the argument that U.S. military support to Georgia is unwise because it would upset the U.S.-Russian "reset."

"A decision to move towards a more robust military relationship with Georgia will imperil our efforts to re-start relations with Russia," read a June 2009 cable signed by U.S. Ambassador John Beyrle. "Our assessment is that if we say ‘yes' to a significant military relationship with Tbilisi, Russia will say ‘no' to any medium-term diminution in tensions, and feel less constrained absent reverting to more active opposition to critical U.S. strategic interests."

The U.S.-Russia reset policy is not as important to Russia as its "absolute" priority of expanding its influence in Eurasia, Beyrle wrote. He said that sending military supplies to Georgia would cause Russia to backtrack on other areas of U.S.-Russia cooperation, including joint action to pressure Iran.

Besides, the Russians don't think that the United States possesses the power to force a resolution to the situation in the disputed territories of Abkhazia and South Ossetia, which Russia has occupied since the end of the 2008 Russia-Georgia war, Beyrle explained in the leaked cable.

The Obama administration hasn't actually set forth a policy banning weapons sales to Georgia. They simply haven't sold weapons to Georgia and don't plan on doing so. That de facto ban on arms sales has riled some in Washington, including Senate Foreign Relations Committee ranking Republican Richard Lugar (R-IN).

"The United States, under substantial Russian diplomatic pressure, has paused the transfer of lethal military articles to Georgia, and no U.S. assistance since the war has been directly provided to the Georgian Ministry of Defense," Lugar's staff wrote in a December 2009 report. "Consequently, Georgia lacks basic capacity for territorial defense."

Contradicting Lugar, the Beyrle cable argues that arms sales would actually be harmful for Georgian national security, because it increases the likelihood of sparking another war that Georgia would surely lose.

"From our vantage point, a burgeoning military supply relationship with Georgia is more of a liability for Georgia than a benefit," Beyrle wrote. "We recognize that our suggested approach would be deeply dissatisfying to Saakashvili, but we see ... no way to neutralize the advantages of geography, size, and capabilities enjoyed by Russia."

Samual Charap, associate director for the Russia and Eurasia program at the Center of for American Progress, agreed. "Instead of the argument of whether we can fulfill this desire of the Georgian government, we have to step back and say ‘what is the U.S. interest here,'" he said. "There's no such thing as a military balance or a military deterrent in this case."

More broadly, Charap and top administration officials argue that the reset policy with Russia is actually good for Georgia, even if it means that the United States won't sell it weapons.

"I guess the question is: Is Georgia and is the rest of Europe more secure today than they were -- than Europe was when we first got here? And I think our answer is yes," Michael McFaul, senior director for Russia at the National Security Council, said in June.

"The reset protects Georgia because Russia now has a whole lot more to lose," added Charap. "Before, nobody in Moscow was going to think ‘what will they think in Washington,' because they didn't care. Now they care."

Other experts said that while the Beyrle cable reflects just one man's opinion, it fits into a broader pattern of an Obama administration that has ignored Georgia and other parts of central Asia due to a focus on improving U.S.-Russian ties.

"Having a reset policy is fine, but what the administration has not done is create a simultaneous comprehensive policy for the central Asian states," said Alexandros Petersen, senior fellow at the Atlantic Council.  "Right now 100 percent of our Georgia policy is about Russia, where it should be about 25 percent."

Petersen agreed that selling arms to Georgia is not a panacea, but should be combined with other types of assistance, including civil institution building, which is mentioned in Beyrle's cable.

"The Georgians love banging the table and saying give us lots of arms, but they are just as myopic as this cable was," Petersen said. "If you're going to do arms sales, you have to do 10 other things relating to bolstering Georgia."

The cable, by alluding to Russian corruption and heavy handedness in the disputed territories, fits into the larger picture of State Department reporting, as revealed by WikiLeaks, which privately emphasizes Russian misbehavior in Georgia. These cables, including reports on Russian military and intelligence attacks inside Georgia dating back to 2004, go well beyond what U.S. diplomats commented on in public.

Although Beyrle's cable does not represent U.S. official policy, some experts see a White House keen to adopt its candid recommendations.

"As the U.S. ambassador to Russia, naturally he is going to a focus on a better relationship with Russia, so you can't say this necessarily this trickles up to the Obama administration's policy," said Petersen. "But a senior official at State is clearly saying we should throw Georgia under the bus."

The White House spent an hour Friday afternoon trying to convince angry Hill staffers and human rights activists that "naming and shaming" governments that recruit child soldiers, rather than imposing Congressionally-mandated sanctions on them, will better address the problem. But advocacy leaders are upset with the administration and rejected top White House officials' contention that removing sanctions against four troubled states will be a positive move.

The White House began a conference call on the issue Friday afternoon by apologizing to the NGO and Hill community for the decision's botched rollout, which was announced only through a short official presidential memorandum on Monday and then reported on by The Cable on Tuesday, Wednesday, and Thursday. The call was off the record and not for press purposes, but a recording was made available to The Cable.

"This is a call that should have happened before you read about the administration's child soldiers' posture in the newspaper," said Samantha Power, the National Security Council's senior director for multilateral affairs and human rights. "Given the way you all heard about the implementation of the statute, I can understand why some of the reactions that you had were prevalent."

Power defended the president's decision to waive penalties under the Child Soldiers Prevention Act of 2008, which was set to go into effect this month, for Chad, the Democratic Republic of the Congo (DRC), Sudan, and Yemen. She argued that identifying these countries as violators while giving them one more year to stop recruiting underage troops would help make progress.

"Our judgment was brand them, name them, shame them, and then try to leverage assistance in a fashion to make this work," said Power, adding that this was the first year the Obama administration had to make a decision on this issue, so they want to give the violator countries one more year to show progress.

"In year one to just say we're out of here, best of luck, we wish you well... Our judgment is we'll work from inside the tent."

But Hill staffers and advocacy leaders on the call weren't buying what Power was selling. They were upset that they learned about the decision via The Cable, and challenged Power on each point that she made.

For example, Jo Becker, advocacy director for the children's rights division at Human Rights Watch, pointed out that the law was passed two years ago.

"The law was enacted in 2008, so countries have had two years to know that this was coming down the pike," she said. "So the consequences of the law really shouldn't be taking anyone by surprise, so to say countries need a year to get their act together is really problematic."

She also disputed Power's contention on the call that "there's evidence that our diplomatic engagement and this military assistance has resulted in some changes."

"The U.S. has been providing training for years already with no real change on the ground," said Becker. "We haven't seen significant changes in practice so far from the engagement approach, so that seems to indicate to me we need to change the approach, maybe withholding programs until we see changes on the ground."

"I think the logic of engagement is something reasonable people can disagree on," Power responded. "There's probably empirical evidence on both sides."

Advocates on the call did acknowledge Chad's efforts on child soldier demobilization, but lamented that little or no progress has been seen in the DRC or with South Sudan's Southern People's Liberation Army (SPLA). But they wanted to know: If the administration believes that the threat of the sanctions has caused progress, then how does removing that threat keep the pressure on?

"Why remove that leverage now when we've seen it's been so valuable?" asked Scott Stedjan, senior policy advisor at Oxfam America

Jesse Eaves, policy advisor for children in crisis at World Vision, was one of several on the call to wonder why the administration decided to waive all sanctions, rather than using a part of the law that allows the continuation of military assistance to violator countries, along as that assistance goes toward military professionalization.

"Naming and shaming has not worked," he said. "You can give support under the law. Much of the aid that's even discussed in the justification memo that many of us have seen can still be given to these countries if they show a reasonable attempt to demobilize child soldiers."

Overall, Power wanted to point out that the administration is still intent on fighting the use of child soldiers and that waiving the sanctions doesn't mean that all pressures will stop. She promised that if these countries don't shape up, the administration will take a tougher line when reevaluating the sanctions next year.

Power repeatedly attempted to argue that the attention over the president's decision to waive sanctions was exactly the kind of public pressure needed to spur violator governments to change. However, her argument was complicated by the fact that the administration failed to tell anyone about the decision and announced it with no rollout or explanation whatsoever.

"I do think there's something different between what happened in 2008 [when the law passed] versus actually being named this week," she said. "And we're already seeing out in the field via our embassies a huge amount of discomfort and angst on the part of those countries about being branded in this way."

Power said at the end of the call that the administration plans to capitalize on the fallout from its decision. She said that the administration planned on "[u]sing the attention from this moment and the leverage of having abstained from having put the sanctions in effect right now and saying... ‘You're not going to get so lucky next time if we don't see some progress.'"

Overall, the call showed that the White House realized it botched the rollout of the decision but is standing by the decision itself. Next, they will have to defend it on Capitol Hill, where staffers are set to receive a special briefing on the issue next week.

"I think it's unfortunate that the NGO community and those in Congress who wrote the law were not involved in its implementation," said Kody Kness, an aide to Sen. Sam Brownback (R-KS), one of the lead sponsors of the law. "I think that's a missed opportunity."

Sen. Tom Coburn, R-OK, became the second senator to call for the ouster of Arnie Fields, the special inspector general for Afghanistan reconstruction, whose office received a failing grade in a new report on its investigations into the use of billions of dollars of U.S. taxpayer funds.

"The recent findings of the independent review of the Special Inspector General for Afghanistan Reconstruction (SIGAR) are appalling and confirm that there is clearly a lack of competent senior leadership in this agency," Coburn said. "Fraud, corruption and wasted resources are placing our soldiers and the mission in Afghanistan in danger.  The president must take swift action and replace the Inspector General and his top staff and immediately appoint an aggressive and independent watchdog who will oversee the billions of dollars the United States is sending there."

Earlier this week, the Council of Inspectors General on Integrity and Efficiency (CIGIE), which serves as an oversight board of all inspectors general in the U.S. government, issued a scathing report on the work of SIGAR, which came after months of congressional angst over what certain lawmakers see as the organization's shoddy work product.

"In our view, the safeguards and management procedures in this organization did not provide reasonable assurance of conforming with professional standards in the conduct of its investigations from the inception of SIGAR to April 16, 2010," the panel wrote.

Fields responded in a letter that funding delays had prevented him from "building the capacity necessary to address my investigative mandate," and said he had already taken measures to address the panel's concerns.

Coburn had requested the review, along with Sens. Claire McCaskill, D-MO, and Susan Collins, R-ME. McCaskill called for Fields to be fired on the day the report was issued.

On Tuesday, The Cable caught up with McCaskill and she said she wanted to see the entire SIGAR office reorganized and folded into its sister organization, the Office of the Special Inspector for Iraq Reconstruction (SIGIR).

"We need one inspector general that covers all crisis situations so we can have some accountability and consistency in this mission," she said.

SIGIR head Stuart Bowen has suggested a Special Inspector General for Overseas Contingecy Operations (SIGOCO) as a minor part of its lessons learned project, although his office has not been involved in the current imbroglio regarding SIGAR. 

On a separate track, his office has been shopping around town his idea for a new U.S. government agency that would manage all reconstruction efforts in areas where the military is deployed. He calls it the U.S. Office for Contingency Operations.

"It assumes that over time, contingencies will occur," Bowen told The Cable last November, "It's sort of like FEMA. FEMA is set up to address disasters, but disasters aren't continuous. The history of the last 50 years, with 15 contingencies or so, indicates that the next 50 years will probably have more contingency operations."

The SIGAR office Tuesday declined to comment on Coburn's statement.

Cable readers already know the pernicious role that illicit cash can play in the U.S. politics, but it's nothing compared to what goes on in Japan, where the mafia organization known as the yakuza has deep ties to even the country's top leaders.

The recently-released Tokyo Vice, by American reporter Jake Adelstein, is the most in-depth look at the group published in English. In 2008, Adelstein broke the blockbuster story of top yakuza boss Tadamasa Goto, the "John Gotti of Japan," who made a deal with the FBI to rat out his cohorts in exchange for a liver transplant at UCLA.

He literally risked his life while writing Tokyo Vice and remains in constant danger as he continues to break news all over Japan. A great explanation of the yakuza can be found in this excerpt, titled, Bury Me In a Shallow Grave: When the Yakuza Come Calling (pdf).

Jake's introduction to the chapter, written for The Cable, explains how one current cabinet minister in Japan is alleged to have deep and longstanding ties to the mafia there:

This chapter from the book deals with the first time I ever met a yakuza boss as reporter and is also an introduction the role of the yakuza in modern Japanese society. I hope people find it elucidating.

As noted in the text, Japan's longest ruling political party, the Liberal Democrat Party, was originally founded with yakuza money.  Associations with the yakuza don't seem to be much of a deterrent to holding political office in Japan.

Kamei Shizuka, the current Minister of Financial Services, according to the Weekly Economist, at one time received 40,000,000 yen from a stock-speculating front company Cosmopolitan--which was run by the notorious yakuza crime boss, Ikeda Yasuji. He also received political donations from the late nineties until 2001 from Kajiyama Susumu, a Yamaguchi-gumi Goryokai member and so-called emperor of loan sharks. Kajiyama himself laundered millions of dollars in Switzerland and the US.  When I asked a reporter at one major newspaper why Kamei's past associations with yakuza members wasn't an issue--he simply replied, "The Personal Information Protection Act (PIPA) makes it difficult to write about these things."

Minister Kamei is in the unusual position of being the de facto boss of the Financial Services Agency (FSA) in Japan, which is responsible for uncovering corporate malfeasance and making sure that the yakuza make no further incursions into Japan's already tainted financial markets...

The law was put in place after former Prime Minister Mori became distressed about numerous periodicals writing about his social connections to yakuza figures and touching upon the possibility that he had been arrested in a prostitution raid in his youth. He initiated the movement to create the law and the LDP delivered. In a way, the yakuza are responsible for that legislation---which has successfully muzzled the press and according to lawyers specializing in dealing with organized crime interventions in civil affairs, "has only protected politicians and made it increasingly difficult to discern whether a business is a legitimate entity or a yakuza front company."

In my humble opinion, if you want to understand the nitty-gritty of Japanese politics, you can't avoid dealing with yakuza issues on one level or another. There have been a great number of politicians with associations to them, though most of the politicians with yakuza ties usually conveniently kill themselves after an investigation begins.  I've always taken this to mean that suicidal politicians somehow find it very enticing to do business with organized crime. I suppose you could argue that they actually wind up getting killed and having their suicides staged. Possible.

The other reason that yakuza can't be ignored in the political sphere is they have lots of money.  The Yamaguchi-gumi, with 40,000 members is probably the second or third largest private equity groups in Japan and as the Japanese say, ????????? (jigoku no sata mo kane shidai) ---" Even in the depths of hell, money talks."  When money talks, politicians listen.

Between 2005 and 2009, more than $567 million was spent on one contract in Iraq to build up the logistical capabilities of the Iraq security forces, with almost no oversight whatsoever. When an audit was finally done on the invoices, it found that 14 percent of the money examined in sampling -- that's more than $4.2 million -- was completely unaccounted for.

The audit was conducted by the office of the Special Inspector General for Iraq Reconstruction (SIGIR), which found in one example that the contractor, a company called AECOM, charged $196.50 for a package of 10 washers that should have cost $1.22, a markup of 16,000 percent. "There just weren't enough people to look at this contract, which was a half a billion dollars," Deputy Inspector General Ginger Cruz told The Cable.

The contract is one of the hundreds of investigations done in recent years by SIGIR. But as the U.S. military withdraws from Iraq, SIGIR is losing its funding and its staff, begging the question of how the U.S. government will be able to discover such abuses going forward. Special Inspector General Stuart Bowen has been meeting with various government officals and groups to try to create a permanent organization to oversee reconstruction  projects in warzones, an idea that hasn't gotten any official traction so far but could be included in any of a number of government reform efforts now ongoing.

Since its inception in 2004, SIGIR claims to have produced $82 million of direct savings, $49 million of seizures and restitution payments, $224 million of funds put to better use, 31 criminal indictments, and 25 convictions. Right now, SIGIR has 96 ongoing investigations. But SIGIR's budget is being cut in half over the next two years and the organization will cut its staff correspondingly. The office could close completely as soon as 2012.

"The ramp-down has begun," said Bowen told The Cable. "A year from now, we will be in a serious windup mode and in two years from now there will be 30 people left," meaning basically no investigations will be able to move forward.

SIGIR has almost gone out of business five times since 2004. First it was created as the Inspector General for what was then the Coalition Provisional Authority. Congress has extended its mandates, albeit temporarily, several times since then. But with the clock running down on the U.S. military presence in Iraq, SIGIR's nine lives are just about up.

There is $6 billion left to spend of the $52 billion appropriated by the U.S. Congress for reconstruction in Iraq. The law stipulates that when the money runs out, so too will SIGIR's mandate.

Bowen is currently searching for a way to keep SIGIR's institutional knowledge and expertise in the government and to keep his staff employed. He has been shopping around town his idea for a new U.S. government agency that would manage all reconstruction efforts in areas where the military is deployed. He calls it the U.S. Office for Contingency Operations, which would exist in perpetuity and stand independent of either the State or Defense Departments, as SIGIR does now.

"It assumes that over time, contingencies will occur," said Bowen, "It's sort of like FEMA. FEMA is set up to address disasters, but disasters aren't continuous. The history of the last 50 years, with 15 contingencies or so, indicates that the next 50 years will probably have more contingency operations."

Bowen met with Deputy Secretary of State James Steinberg on Thursday and plans to meet with Policy Planning chief Anne Marie Slaughter's office soon. The hope is that his proposal will find its way into the Quadrennial Diplomacy and Defense Review (QDDR) ongoing inside State now.

"The idea is contribute to the ongoing efforts to reform how the United States approaches this critical issue," Bowen said.

If that's too ambitious, Bowen has a scaled-back idea that he hasn't yet proposed, creating a Special Inspector General for Overseas Contingency Operations. This would be a version of his other proposal, but focused on oversight and investigations, rather than actually managing contracts.

"It makes sense to have a body that can look at both pots of money without resistance. That ‘s the genius of this organization, there's no door we can't get through."

SIGIR's top officials point to $100 billion spent by the U.S. on reconstruction in Iraq, Afghanistan, and Pakistan. When Lebanon and Georgia are added, more than $16 billion will be spent in fiscal 2010. Afghanistan alone will see at least $1 billion in reconstruction money coming next year, and very few of the 68,000 troops there are trained as program managers, much less contract oversight specialists.

The Pentagon office for Acquisitions, Technology and Logistics, run by Ashton Carter, is working to rapidly increase the contracting staff in Afghanistan now, "but are they going to be able to ramp up fast enough so that when you start moving all this money really fast in Afghanistan, that it is properly managed?" asked Cruz. "You run the risk of it being wasted or stolen."