Leaders instructed to look out for tattoos of lightning bolts, skulls, swastikas, other extremist symbols
Baz Ratner / Reuters
U.S. Army soldiers are silhouetted as they walk during a mission in the Maiwand district of Kandahar province, southern Afghanistan, in April.
By Daniel Trotta
updated 8/21/2012 11:36:46 AM ET
FAYETTEVILLE, N.C. — They call it "rahowa" — short for racial holy war — and they are preparing for it by joining the ranks of the world's fiercest fighting machine, the U.S. military.
White supremacists, neo-Nazis and skinhead groups encourage followers to enlist in the Army and Marine Corps to acquire the skills to overthrow what some call the ZOG — the Zionist Occupation Government. Get in, get trained and get out to brace for the coming race war.
If this scenario seems like fantasy or bluster, civil rights organizations take it as deadly serious, especially given recent events. Former U.S. Army soldier Wade Page opened fire with a 9 mm handgun at a Sikh temple in Wisconsin on August 5, murdering six people and critically wounding three before killing himself during a shootout with police.
The U.S. Defense Department as well has stepped up efforts to purge violent racists from its ranks, earning praise from organizations such as the Southern Poverty Law Center, which has tracked and exposed hate groups since the 1970s.
Page, who was 40, was well known in the white supremacist music scene. In the early 2000s he told academic researcher Pete Simi that he became a neo-Nazi after joining the military in 1992. Fred Lucas, who served with him, said Page openly espoused his racist views until 1998, when he was demoted from sergeant to specialist, discharged and barred from re-enlistment.
While at Fort Bragg, in North Carolina, Page told Simi, he made the acquaintance of James Burmeister, a skinhead paratrooper who in 1995 killed a black Fayetteville couple in a racially motivated shooting. Burmeister was sentenced to life in prison and died in 2007.
No one knows how many white supremacists have served since then. A 2008 report commissioned by the Justice Department found half of all right-wing extremists in the United States had military experience.
"In my 26 years in the Army, I've never seen it," the former company commander said."We don't really think this is a huge problem, at Bragg, and across the Army," said Colonel Kevin Arata, a spokesman for Fort Bragg.
Experts have identified the presence of street gang members as a more widespread problem. Even so, the Pentagon has launched three major pushes in recent decades to crack down on racist extremists. The first directive was issued in 1986, when Defense Secretary Casper Weinberger ordered military personnel to reject supremacist organizations.
That failed to stop former Marine T.J. Leyden, with two-inch SS bolts tattooed above his collar, from serving from 1988 to 1991 while openly supporting neo-Nazi causes. A member of the Hammerskin Nation, a skinhead group, he said he hung a swastika from his locker, taking it down only when his commander politely asked him to ahead of inspections by the commanding general.
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"I went into the Marine Corps for one specific reason: I would learn how shoot," Leyden told Reuters. "I also learned how to use C-4 (explosives), blow things up. I took all my military skills and said I could use these to train other people," said Leyden, 46, who has since renounced the white power movement and is a consultant for the anti-Nazi Simon Wiesenthal Center.
In 1995, eight months before the Fort Bragg murders, two former Army soldiers bombed the Oklahoma City federal building, killing 168 people. With a growing awareness of the spreading militia movement, the Pentagon in 1996 banned military personnel from participating in supremacist causes and authorized commanders to cashier personnel for rallying, recruiting or training racists.
"What's scary about Page is that he served in the 1990s when putatively this was being treated quite seriously by the military. There's plenty of other Pages who served during the war on terror, and we don't know what they're going to be doing over the next decade or so," said Matt Kennard, author of the forthcoming book "Irregular Army: How the U.S. Military Recruited Neo-Nazis, Gang Members and Criminals to Fight the War on Terror."
Kennard argues the U.S. military was so desperate for troops while fighting simultaneous wars in Iraq and Afghanistan that it allowed extremists, felons and gang members into the armed forces.
The military can grant a "moral waiver" to allow a convicted criminal or otherwise ineligible person into the armed forces, and the percentage of recruits granted such waivers grew from 16.7 percent in 2003 to 19.6 percent in 2006, according to Pentagon data obtained by the Palm Center in a 2007 Freedom of Information Act request. But the Pentagon says no waiver exists for participation in extremist organizations.
"Our standards have not changed; participation in extremist activities has never been tolerated and is punishable under the Uniformed Code of Military Justice," said Eileen Lainez, a Defense Department spokeswoman.
The Pentagon's third directive against white supremacists was issued in 2009 after a Department of Homeland Security report expressed concern that right-wing extremists were recruiting veterans returning from wars overseas.
The Pentagon's 2009 instruction, updated in February 2012, directs commanders to remain alert for signs of racist activity and to intervene when they see it. It bans soldiers from blogging or chatting on racist websites while on duty.
Her group monitors online chatter among self-described active-duty warriors serving overseas and reports it to military officials. It also receives regular calls from military investigators asking about racists in the service."This is the best we've ever seen," said Heidi Beirich, leader of the Southern Poverty Law Center's intelligence project, referring to the Pentagon's attitude. "It was really disheartening under the Bush administration how lightly they took it, so this is a major advance."
The Southern Poverty Law Center and the Anti-Defamation League (ADL), another civil rights monitor, have helped train officers on how to spot extremists, although Mark Pitcavage, director of investigative research at the ADL, says the military lacks comprehensive training for recruiters and commanders. He called the military's reaction when alerted to white supremacists "patchy."
"We've discovered a great range of response, from getting a phone call the next day saying, 'He's already out,' to not doing anything at all," Pitcavage said.
The tattoo matrix The Army showed Reuters a one-hour presentation it says was designed to educate soldiers and Army leaders about its extremism policy and how to respond, including to white supremacy groups. Penalties for extremist ideology may include being removed from the military, having security clearances yanked or being demoted.
"The standard hateful message has not been replaced, just packaged differently with issues like freedom of speech, anti-gun control themes, tax reform and oppression," the presentation says, noting that recruitment may be difficult to detect, occurring quietly "in bars and break areas" on bases.
The presentation instructs Army leaders to look out for tattooed symbols of lightning bolts, skulls, swastikas, eagles and Nordic warriors. Skinheads may have tattoos showing barbed wire, hobnailed boots and hammers.
In a detailed flowchart called a "Tattoo Decision Support Matrix," Army leaders are shown how to respond to various tattoos. At the time of publication, the Army was unable to identify the locations where this course was being taught.
Screening out rogues "We're very strict on the tattoo policy here within this recruiting station," said Sergeant Aaron Iskenderian, head of the Army recruiting office in Fayetteville, the Army town next to Fort Bragg.
With the United States withdrawn from Iraq, winding down from Afghanistan and unemployment stuck above 8 percent, recruiters can be choosy again.
Iskenderian cited the example of a young man who came in recently with a tattoo of the Confederate flag.
"We're in the South here. It's considered Southern heritage. It's on the General Lee," Iskenderian said, referring to the car from the television show "The Dukes of Hazzard."
The potential recruit also told Iskenderian he had a black girlfriend. Iskenderian sent the issue up the chain of command, and the young man was rejected."Is it racist? I asked him, 'What does it mean to you?' and he said, 'Southern pride.'"
Academics who study white supremacists say proponents of the "infiltration strategy" of joining the U.S. military have adapted, telling skinheads to deceive military recruiters by letting their hair grow, avoiding or covering tattoos, and suppressing their racist views.
"You have to differentiate between some of the grandiose fantasies of some of the leaders of the movement and what actually is going on," cautioned the ADL's Pitcavage.
For neo-Nazis who get past the screeners, as with the gang members, the military needs a comprehensive strategy, said Carter F. Smith, a former military investigator who is now a professor of criminal justice at Austin Peay State University in Tennessee.
"They are some of the most disciplined soldiers we have. They really want to learn to shoot those weapons," Smith said. "The problem wasn't just that we were opening the floodgates to let them in. We let them out after prosecution or when their time was up and we didn't let the police know."
James Lockhart, then a federal housing official, and Lawrence Summers, right, in 2009.
WASHINGTON —After inheriting the worst economic downturn since the Great Depression, President Obamapoured vast amounts of money into efforts to stabilize the financial system, rescue the auto industry and revive the economy.
But he tried to finesse the cleanup of the housing crash, rejecting unpopular proposals for a broad bailout of homeowners facing foreclosure in favor of a limited aid program — and a bet that a recovering economy would take care of the rest.
During his first two years in office, Mr. Obama and his advisers repeatedly affirmed this carefully calibrated strategy, leaving unspent hundreds of billions of dollars that Congress had allocated to buy mortgage loans, even as millions of people lost their homes and the economic recovery stalled somewhere between crisis and prosperity.
The nation’s painfully slow pace of growth is now the primary threat to Mr. Obama’s bid for a second term, and some economists and political allies say the cautious response to the housing crisis was the administration’s most significant mistake. The bailouts of banks and automakers are now widely regarded as crucial steps in arresting the recession, while the depressed housing market remains a millstone.
“They were not aggressive in taking the steps that could have been taken,” said Representative Zoe Lofgren, chairwoman of the California Democratic caucus. “And as a consequence they did not interrupt the catastrophic spiral downward in our economy.”
Mr. Obama insisted the government should help only “responsible borrowers,” and his administration offered aid to fewer than half of those facing foreclosure, excluding landlords, owners of big-ticket homes and those judged to have excessive debts.
He decided to rely on mortgage companies to modify unaffordable loans rather than have the government take control by purchasing the loans, the approach advocated by his chief political rivals in the 2008 presidential race, Hillary Rodham Clinton and John McCain.
The administration did not push for legislation to make mortgage companies help borrowers. The financial incentives it offered were often insufficient. And it responded slowly to warnings, including those in letters homeowners sent to Mr. Obama, that companies were not cooperating.
The result was a plan that failed to meet even its own modest goals, data shows. Mr. Obama said in Arizona a few weeks after taking office that the government would help “as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.” As of May, 4.3 million people had applied for aid, but only one million had received government-sponsored modifications, according to the most recent data. About a third of those turned away lost their homes, were facing foreclosure or filed for bankruptcy.
In June 2011, Mr. Obama conceded that his administration had not done enough. “And so,” he said, “we’re going back to the drawing board.”
The government has since enriched incentives for companies and found new ways to press them to take action. More people are getting help, and the housing market has finally begun to recover, leading some of the president’s allies to wonder what might have been.
“If the program they have now had been used at the beginning, it would have had a tremendous impact,” said John Taylor, chief executive of the National Community Reinvestment Coalition, an umbrella group for housing advocates.
But it is impossible to know whether a more forceful response would have produced better results. Administration officials argue that the missed opportunity was relatively small because mortgage companies were unprepared to help homeowners even if the government had pushed harder — and the government was unprepared to take the companies’ place.
“We operated at the frontier of what was possible,” Treasury Secretary Timothy F. Geithner, whose department oversaw the housing plan, said in a statement. “These programs helped millions stay in their homes and millions more refinance to take advantage of lower interest rates.”
Help wanted The president gets a purple file each day holding 10 letters selected from the thousands that arrive at the White House. Almost as soon as the administration started its housing plan, he began to see complaints.
“I get letters every day,” Mr. Obama said at a June 2009 news conference, “from people who say, ‘You know, I appreciate that you put out this mortgage program, but the bank is still not letting me modify my mortgage, and I’m about to lose my home.’ And then I’ve got to call my staff and team and find out why isn’t it working for these folks, and can we adjust it, can we tweak it, can we make it more aggressive.”
Some of the letters came from people the administration was not trying to help. But in Arizona the president had also made promises that the government was not ready to keep.
Mr. Obama had emphasized that borrowers with financial problems could get mortgage modifications even before missing a payment. But the administration did not define eligibility for that kind of pre-emptive aid, and more than 4,000 people called the Treasury Department during the first year to complain they had been turned away on the grounds they had not missed a payment.
People who lost their jobs generally could not qualify for modifications, but more than 18 months would pass before the White House persuaded mortgage companies to let people skip a few payments while looking for work.
And there were unsettling stories about mortgage companies repeatedly losing paperwork, rejecting qualified applicants and, with surprising frequency, foreclosing on the very customers they had just agreed to help.
The president’s advisers, including Mr. Geithner and Lawrence H. Summers, then director of the National Economic Council, played down the significance of these anecdotes. They saw no evidence of widespread problems, and besides, the broader strategy was working: the recession ended in June 2009, and housing prices posted the first monthly increase in three years.
In late July, eager to claim credit, the president bounded onto a high school stage in Raleigh, N.C.
“We knew that ending our immediate economic crisis would require ending the housing crisis, where it began, or at least slowing down the pace of foreclosures,” he said. “We didn’t stop every foreclosure. We couldn’t help every single homeowner who had gotten overextended, but folks who could make their payments with a little bit of help, we were able to keep them in their homes.”
The celebration was premature. By the end of 2009 only 66,465 borrowers had received government-backed mortgage modifications, and the pace of foreclosures continued to rise: more than 900,000 homes in 2009 and more than a million in 2010, more homes than in any American city save New York.
Peter P. Swire, Mr. Obama’s special assistant for economic policy in 2009 and 2010, said both the administration’s successes in repairing financial markets and its shortcomings in helping homeowners could be traced to the president’s reliance on Mr. Geithner and Mr. Summers.
“They were the most experienced financial crisis team that you could have,” said Mr. Swire, an Ohio State University law professor. “But when you have economists like Larry Summers working on things — well, Larry Summers is a macroeconomist. He’s not a case worker.”
Mr. Summers declined to comment on the record, but other current and former officials echoed Mr. Geithner’s view that the administration had done well under the circumstances. Some said they underestimated the complexity of helping millions of people. Some said they tried too hard at first to protect taxpayers from unnecessary losses. But they agreed that the most important problem was beyond their control: the mortgage industry was set up either to collect payments or to foreclose, and it was not ready to help people.
“They were bad at their jobs to start with, and they had just gone through this process where they fired lots of people,” said Michael S. Barr, a former assistant Treasury secretary who served as Mr. Geithner’s chief housing aide in 2009 and 2010. “The only surprise was that they were even more screwed up than the high level of screwiness that we expected.”
Let them eat carrots Former Representative Jim Marshall, a centrist Georgia Democrat who lost his House seat in 2010, was a staunch advocate of the administration’s economic policies. He supported the banking bailout. He opposed a similar bailout for homeowners.
The administration made just one mistake, he said in a recent interview: it failed to rewrite the bankruptcy code.
Congressional Democrats wanted to change the law to permit “cramdown” — a term that meant letting bankruptcy courts cut mortgage debts — to put pressure on mortgage companies to modify loans and to provide a backup plan for borrowers who could not get the help they needed.
Mr. Obama sponsored cramdown legislation as a senator, endorsed it as a presidential candidate and called on Congress to pass it in the Arizona speech.“There was another way to deal with this, and that is what I supported: forcing the banks to deal with this,” Mr. Marshall said. “It would have been better for the economy and lots of different neighborhoods and people owning houses in those neighborhoods.”
But he also repeatedly pressed the pause button. When proponents sought to add a cramdown to the Emergency Economic Stabilization Act in September 2008, Mr. Obama, who had flown back to Washington from the campaign trail, persuaded them to postpone the “partisan” effort as an example to Republicans, who said the measure would violate existing contracts.
In February 2009, after Mr. Obama became president, the White House asked Democrats not to attach the measure to the American Recovery and Reinvestment Act, fearing it would cost votes. In March, a watered-down version finally passed the House, but the mortgage industry rallied opposition to block it in the Senate.
Some officials said the White House had tried and failed. But other officials and participants, including Mr. Marshall, said it simply was not a priority.
“There wasn’t enough political capital, time or energy,” said Mr. Barr, the former Treasury deputy.
Mortgage companies, mostly owned by large banks, had ample resources to improve their treatment of troubled borrowers. But in the absence of any significant threat of punitive government action, they made little progress.
“Here we are in 2011, looking at high levels of foreclosures on the horizon, looking at significant failures in process, and nothing much has changed,” Sarah Bloom Raskin, a Federal Reserve governor, said at a housing finance conference in February 2011.
“It seems to me we have reached the point where this sign of failure is hindering our economy’s ability to rebound.”
How far a trillion Goes A stone-faced building just north of the Capitol testifies to the federal response to the last national housing crash in the 1930s. The block-long office building housed the Home Owners’ Loan Corporation, which bought and refinanced roughly 20 percent of outstanding mortgages, most within two years of its creation in 1933, to help a million families avoid foreclosure. It even turned a modest profit before closing in 1951.
Mr. McCain surprised Mr. Obama during their second debate in October 2008 when he proposed investing $300 billion in such a program, echoing prominent Democrats. Some economists argued that debt reduction would hasten recovery not just by preventing foreclosures, but by spurring consumer spending, the nation’s primary economic activity.
Mr. Obama, leading in the polls, dismissed the idea as a “risky” giveaway to mortgage companies. “Taxpayers shouldn’t be asked to pick up the tab for the very folks who helped to create this crisis,” he said at a rally two days later in Dayton, Ohio.
After the election, top economic advisers led by Mr. Summers told the president-elect that debt reduction was not the best policy. Mr. Obama hoped to secure about $1.1 trillion from Congress to arrest the recession — a stimulus package of about $750 billion and the second half of the $700 billion Troubled Asset Relief Program bailout fund Congress had created in September. In a blueprint delivered at a mid-December meeting in Chicago, the advisers recommended that nearly all of the money be used to stabilize the financial system and for a package of tax cuts and government spending programs. That, they said, would stimulate growth more than paying down mortgage debts and hoping homeowners spent their savings.
Mr. Geithner told Mr. Obama that if even if an additional $100 billion were available, he still would not spend it on housing.
As for foreclosures, the advisers said more modest forms of aid would work just as well in most cases. Indeed, some economists argued that debt reduction would counterproductively persuade other borrowers to stop making payments in pursuit of a better deal.
But the decision ultimately was political. Mr. Obama and his advisers were convinced that even in the depths of an unyielding crisis, most Americans did not want their neighbors rescued at public expense. Several cited the response to the Arizona speech — including the televised diatribe by a CNBC personality, Rick Santelli, that helped give rise to theTea Party — as proof that they were wise not to do more.
“There’s a lot of risk aversion in Washington,” said James B. Lockhart III, who participated in some discussions as director of the Federal Housing Finance Agency, administrator of Fannie Mae and Freddie Mac, “and I don’t think anybody knew how bad it was going to get.”
End of the beginning Eighteen months later, the administration’s hopes for a rapid economic recovery had faded. By summer 2010, it knew that the recession had been deeper than initially understood and that the effects of the financial crisis were lingering longer than expected. The housing market still showed no signs of life.
Frustrated allies — including Congressional Democrats and liberal advocacy groups not normally focused on housing, like the National Council of La Raza — were shouting for new action to prevent foreclosures.
Still the White House held firm to its strategy. “The most important thing I can do right now to keep people in their homes is to make sure the economy is growing,” the president said in Albuquerque in September 2010. “That’s probably the thing that’s going to strengthen the housing market the most over the next couple of years.”
Two days later, an important deadline passed quietly. The $700 billion bailout fund Congress had created in 2008 expired. The administration could no longer use the money to finance new programs even if it wanted to. It had left more than $300 billion unspent.
CNBC's Diana Olick reports the details of big banks selling loans to what are called "specialty servicers."
In November, Democrats lost control of the House, further constraining the administration’s ability to address the housing crisis.
And right about then, in the fall of 2010, Mr. Obama began to reconsider. The frustrated president told his advisers that what they were doing was not good enough. He told them to revisit old ideas and to find new ones.
Mr. Obama was particularly incensed by mounting evidence that mortgage companies were breaking the law in some foreclosure cases. There was also new research underscoring the costs of foreclosures and the benefits of measures like debt reduction.
At a virtual town hall in April 2011, Mark Zuckerberg of Facebook read a question that began, “The housing crisis will not go away.”But perhaps most important was the simple reality that housing, left to fester, had become Mr. Obama’s biggest economic problem.
The president, perched on a stool, listened gravely and nodded. “Well, it’s a good question,” he said, “and I’ll be honest with you — this is probably the biggest drag on the economy right now.”