Adamant: Hardest metal
Tuesday, July 1, 2003

In Person Reporting in Exile

<a href=inthesetimes.com>In These Times, By Aaron Sarver | 6.20.03

Greg Palast wants you to turn off your TV and find out what’s really going on.   Greg Palast is a reporter for BBC Television’s Newsnight and Britain’s Guardian and Observer newspapers. His recent book, The Best Democracy Money Can Buy, has been on the New York Times bestseller list for 15 weeks (visit www.gregpalast.com for more of his reporting). Palast spoke with In These Times during a recent visit to Chicago.

      You refer to print publications as “dinosaurs.” How do you think the Internet is changing how information is distributed?

      The advantage of the Internet is that it is harder to shut you down. Bush’s buddies sued the Observer for an article of mine that exposed their bloody machinations in Tanzania and their gains in Nevada. They were able to crush the print version, but then literally 400 Web sites put up my writing. That’s very important. They can’t stamp it out, and that’s why the “dependent” media is so intent on you knowing how scary and awful and evil the Internet is. 

      In the United States, people are increasingly reading the Guardian, Le Monde, and other foreign papers online. When do the New York Times and Washington Post become irrelevant, especially for foreign reporting?

      We just celebrated the 30th anniversary of the Watergate break-in, so that marks 30 years since the Washington Post has broken a major investigative story. They are irrelevant right now. Almost nothing original comes out of these big papers. You’re just not getting the information.

      Your book talks a lot about business connections between the Bush family and the bin Laden family in Saudi Arabia. 

      I don’t want to overstate the connection between the Bushes and the bin Ladens, because that underplays the connection between the Bush clique and Adnan Khashoggi, the Saudi arms dealer, and the connection between George W. Bush and Sheik Abdullah Taha Bakhsh, the guy who saved Harken Energy (which is George W. Bush’s former oil company) from extinction. Bakhsh is also, according to French intelligence, a guy who through indirect routes funded al-Qaeda. How come we aren’t investigating this guy? Does it have to do with it being hard to investigate the president’s business partner? 

      How do you think people are reacting to Republicans, who in 1994 were screaming for a balanced budget amendment, and who are now endorsing huge budget deficits? 

      People are picking up that they are being skinned alive. The war in Iraq has become the weapon of mass distraction. Progressives have to make sure we don’t let the jewels be stolen while we’re looking at Iraq. That’s why I won’t give up reporting on places like Venezuela and the attempt to overthrow the elected government there. I keep reporting on what the World Bank is up to and the inside documents there because it is thievery with both hands. The Bush family is making a whole new game out of this, on a different level than anyone has ever imagined. You never know where Bush family bank accounts end and American foreign policy begins. It’s really serious stuff, and it doesn’t matter your political spectrum, the average person is starting to pick this up.

      What do you think about the prospect of a liberal radio network, which there has been so much buzz about?

      It is not only a buzz. I have actually signed a letter of intent with the liberal radio media consortium. We don’t need to compete with Rush Limbaugh. We don’t need another fat windbag on the left. What we need is real information so we can make people’s brains wake up. There is this bullshit TV hypnosis going on in America. America’s real drug problem is called television. 

      How far are we from criminalizing dissent when Sy Hersh is called a terrorist by a State Department official?

      Things are going to get worse before they get better. But we’ve been here before. This is not as bad as the McCarthy era, yet. Americans really do stand up to the horseshit. That’s the point of the last chapter of my book. In America, because we have been brought up to believe everyone has a say in our democracy, once in a while when Americans are told “have a nice day” and they’re given that cheesy shit-eating grin from the presidential spokesman, they say, “Screw you, we’re not eating it anymore.” It happened in Vietnam, it happened in the civil rights movement, and going back to the populist movement, abolitionist movement. We have had a lot of successful movements.

      We’ll do it again. I’m not worried about America. One of the problems, even on the left, is that we have become accustomed to thinking, if I read it in the New York Times it must be true. And we have to begin trusting our own sources. 

      How does the average individual know what is a good news source? 

      Please tell us you wouldn’t lie to us—that In These Times wouldn’t lie to us.   

Aaron Sarver is an associate publisher at In These Times.

Help Amplify the Voice of Dissent

The Bush administration is traveling merrily down the warpath, and the mainstream press is blithely following. In times like these, the independent press is more important than ever. We’re working to amplify the voice of dissent, but we need your help. Become a subscriber to In These Times today, and help us spread the word about the new movement for peace and justice.

COMMENT ON THIS STORY

READER COMMENTS

palast is awesome! the real drug is tv, and the real cancer is in the white house.

Posted by: geoffrey on 6.20.03 | 5:30 pm from ohio

Greg Palast is an absolute treasur. The "media" (and I use the term very losely) here should have just one reporter half as good.

Posted by: chris on 6.20.03 | 6:29 pm from Fl.

What does everyone think about the liberal tv network? NPR is already a liberal radio station, but what is interesting is most of its listeners (by a small margin) are republican. Would the liberal tv work? Republicans drive talk radio and tv is pretty balanced. If the liberal tv network affiliates itself with liberals than it is doomed. Who would trust a tv network that openly admits its political affiliation?

Posted by: Brad on 6.20.03 | 11:11 pm from NY

Palast is right about TV feeding us nothing but shit. Sports and reality shows are a great way to keep people's minds off of what is really happening in the world. America is not a democracy; The U$A is a plutocracy.

Posted by: michael` on 6.21.03 | 12:22 am from Buffalo, NY

I agree. Do not watch TV or the read the daily newspapers.

Posted by: Wesley Rothermel on 6.21.03 | 5:00 am from Belfast, Maine

Great Story, I know the Bush administration is lying to the American people Most of Bush's Administration is in the Council on Foreign Relations, Colin Powell, Donald Rumsfeld. Dick Cheney are all CFR members, they are very diligently working us towars the New World Order, They answer to Huge Corporations that want to destroy America like the Ford Foundation, Rockefeller Foundation, Cheney's Company Haliburton we have some very ruthless, criminalistic Basterds in Washington Right Now And The Americans need to know the Truth. In addition I am totally aware of what is going on with the Media the Government has sencored our media and actually the owners of FOX, MSN. ABC are all in the council On Foreign Relations as well. One thing is I am not a liberal I am a true conservative but the Bush Administration are not conservatives at all they are Neo-Cons which in short means socialist or Fascist. There is a Great book out that you may be interested in reading it is a real eye opener we have a huge fight ahead of us. The Shadows of Power The Council on Foreign Relations and the American Decline the Author is James Perloff you can purchase the book from www.jbs.org or www.aobs-store.com excellent book it is a real eye opener. The war on terrorism you will discover in the book that this same scenario that is going on in America with our terrorism war has been played out in several othe countries to destabalize their countries in fact Hitler did the same thing we he had his own S.S. burn the Reichstag down and blemed it on terrorist A must read!!

Posted by: John Gilbert on 6.21.03 | 10:44 am from Arizona

The srticle was great. Now I know another author to look for. About the war, David Habersham, the author of " The Best abd the Brightest" has a great eye opening book published in 2000 that concerns us today. The book " War in the time of Peace" is excellent. He tells you about the current players in today's game and where they came from

Posted by: jeff mond on 6.21.03 | 6:45 pm from chicago

Brad, I doubt that you listen to the National NPR, particularly the news. They seem 'liberal' (whatever the hell that is) to you because no other media presents both sides of an issue. Just needed to say that, although I see your righty mind is always made up. I did see your post about Bush's record on the environment...so there is hope for you, my friend. Anyone working for a salary in this country should be beating the bushes ('scuse the pun) to call attention to this miserable economy and the practices of this administration to derail it and the right of workers nationally. (i.e. forcing people to take "comp. time" instead of paying them the overtime they earn.)

Posted by: amolibri on 6.22.03 | 10:08 am from NY

What's at the ROOT of the problem with the Bushites? It's that they are abuseing govt. to aid corporate intrests in screwing PEOPLE worldwide (including the US). The Dems are little diferent in thie regard. Go Greens. www.gp.org

Posted by: John Howes on 6.22.03 | 10:09 am from Saint Petersburg, Florida

Is it good that there is a reporter that is so left-wing that it may affect is reporting? Palast is a British Peter Arnette

Posted by: Brad on 6.23.03 | 3:17 pm from NY

Aaron Sarver = Genius

Posted by: Dan on 6.24.03 | 10:39 am from Chicago

I apologize for making a personal request that's way off the topic but...amolibri what part of NY are you in? I'm just now starting to fight against where I work for only giving comp time and paying overtime. Do you have any info about it, or can you offer some advice...anything really? If could email me I would really appreciate it.

Brad, tv is not balanced, it's right wing. NPR is sometimes almost a little bit closer to being sort of balanced, but it's not left. Is it ok to have a reporter that's so right no sense can be included in the reports only propaganda? Extremists aren't the best reporters no matter which side they are for.

Posted by: Toby Fraser on 6.24.03 | 12:34 pm from Rochester NY

GW has no chance against the hard hitting journalism from the likes of Aaron Sarver. Keep standing tall before the Man.

Posted by: Doug Shaw on 6.24.03 | 12:40 pm from Wilmington, NC

I am currently reading Mr. Palast's book "The best democracy money can buy" and I congragulate him for having the guts to say what needs to be said, when our own American "free press" does not.

Keep up the good work, you've got my unending support!

B. Melkus

Posted by: B! on 6.24.03 | 1:16 pm from Detroit, MI

Toby, saying that tv is right-wing is garbage. What about Barbara Walters (and others) not challenging Hillary on the numerous lies in her book? What about Peter Jennings being very critical of Bush? What about Walter Cronkite who just admitted to being a lifelong liberal? There is no way that you could tell me that tv was right-wing during the Clinton impeachment as they completely bought into Carville's crap about being "only about sex". What about Jesse Jackson not getting nailed about cheating on his taxes? If you want to say that fox news is the most "rah-rah" for America, I can't deny that, but don't tell me that tv is right-wing. I'm not saying that tv is left-wing I think its pretty balanced.

And NPR is left-wing. They fired one of their dj's because he spoke in favor of the war on air.

Oh and Palast made mention of the ny times, which was called to task by fairness and accuracy in reporting for skewing their war coverage to make it seem we weren't doing as well in Iraq as we actually were.

Oh, and one last thing, In these times is not a news source either. They are a great news analysis source but not a hard news source. Meaning that these guys give us great opinion on the news but the news they give is very, very left-wing

Posted by: Brad on 6.24.03 | 1:46 pm from NY

All I can ask is if tv is so balanced why was there nothing but war cheering going on? There wasn't then, and still hasn't been, a decent debate about pros and cons of the issue. Name me a tv "journalist" that has called this administration on anything at all. There have been so many lies coming from the white house that have not been challenged, or even mildly questioned, all of it is taken as absolute truth. The same goes for NPR. If either were left-wing there would have been some serious questions and there have been none. If either were balanced they would have at least mentioned that maybe what we are being told about everything isn't always 100% true, that didn't happen either. Even now that the lies are coming out more and more there's barely a hint of it in the media. Until you get to media such as this that has been reporting it for a long time.

Posted by: Toby Fraser on 6.25.03 | 8:04 am from Rochester NY

I can't find my pants.

Posted by: Brian Potter on 6.25.03 | 10:50 am from Raleigh NC

alan colmes on fox news has called Bush on the wmd. Chris Matthews on cnbc has done it it too (so has his replacement). You don't watch much tv news do you, people challenge Bush all the time.

In these times is not balanced, when have they ever praised Bush on anything? The guy gives 15 billion to aids and he's criticized by Bleifuss.

Posted by: Brad on 6.25.03 | 1:53 pm from NY

The point of the Bleifuss article was he felt it a touch hypocritical for W to be doing humanitarian PR while at the same time keeping Africa under the cosh of a colossal debt.

Posted by: O on 6.25.03 | 2:24 pm from

O, but you're missing the point. Name one time that this magazine has said anything positive about George W Bush, 1 time. That's all I ask for. They've slammed democrats but they'll never compliment a republican. If you can give me one time, then I'll admit that this is more balanced than I thought. But you can't call this a balanced news source until they compliment Bush on something. (Note: them not praising Bush doesn't make it a bad mag/site, it just doesn't make them balanced)

Oh, and giving 15 billion dollars is more than PR.

Posted by: Brad on 6.25.03 | 4:17 pm from NY

That's because there's so many things Bush does that are worth of praise, right Brad? It must be his considerate environmental policy. Or his Enron-like financial management. Or his father's heavy involvement in one of the groups being investigated by the FBI over 911 (Carlyle). Or the fact that in 1942 his grandfather had some of his properties seized for being a Nazi front. Things like these make a family just so durned likeable, don't they? And compared to the amount of money Bush and G8 lean on the Third World for every year by way of debt, $15 billion is the equivalent of trying to combat world hunger with a can of sweetcorn.

Posted by: O on 6.26.03 | 3:56 am from

While it's true I try not to watch much tv, it's not like I haven't seen it (I also don't waste money on cable so some of the shows I'm thankfully spared of seeing). Were the questions raised by those, or any other person on tv, equivalent to lies they were questioning? As in, when asking about the lies of WMD and plagiarized reports, did they ask the question once, get the government answer and say "ok, good enough for me"? I highly doubt there was any critical analyzing of the facts, or even questioning the answers given.

Posted by: Toby Fraser on 6.26.03 | 3:36 pm from Rochester NY

Curious how some people hush up when you bring up the Bush family's Nazi past...

Posted by: O on 6.27.03 | 11:15 am from

Jesus Christ! Can't even the "left" (aka lazy-effete-fickel-thinkers) get past the phoney glamorization that characterizes the capitalists class?

Greg Palast is bald...bald, bald, bald.

However, he is a kickass investigative journalist that makes David Corn and Eric Alterman...and Molly Ivins look pretty silly for all the important issues that these denziens of the "left" consistantly fail to see, or at least comment on.

Please, have th guts to show Greg's full head in your photos. People who would be turned off enough not to read the article--well, the progressives shouldn't be wooing them anyway.

I stopped reading the Nation and Mother Jones years ago because they were fickel sell-outs and hypocrites.

Surely ITT can do better than to copy the worst aspects of these "progressives" perfidy.

But alas, if Greg himself prefers to leave the top of his head chopped off in photos--well such banality functions as a metaphor as to how far we have yet to travel before we start building an alternative, progressive conciousness.

Signed,

Fellow Progressive Baldy

Posted by: Steven Hunt on 6.28.03 | 5:37 pm from Orlando

The fact that Palast pretty much has either chosen or been forced to leave this country in order to not only conduct his research, but also to even be Considered for publication for a book like his most recent points to something not only dire and serious within the media in this country, but something SO serious, I feel that those of us who Are reading Palast need to be encouraging American media to pick up on Palast's Very Serious investigative journalism.

Palast has connected the dots so nicely...things begin to make sense after one sees how the Bush family has conducted "business as usual" all over the globe, but most especially in regions llike the Congo where regular bloodbaths are the normal day-to-day reality due to the co-operation in the area of local onmterets with these large business interests that have eveything to gain from the cover provided by continual turmoil in the region, AND their role in the genocide as well...

Palast's book, in my opinion, may well be the most important book we have to date on the motives and driving forces behind the seemingly insane actions of Bush and his "advisors".

I fear that most of the public has the mistaken idea that Palast's book is Commentary, and have NO Clue that this may well be one of the most important sources we have to date of Hard News.

I think it is up to US to alert one another to this important piece of investigative journalism, and MOST OF ALL to INSIST our local media look into (at the Very least) running some of this material.

We are in grave danger of losing what little "democracy" we actually Had prior to November of 2000, but then again, I can Only beleive that things having swung SO far from plumb, that what is TRULY incumbent upon us in the US is to push for sweeping changes to correct the Sinsiter nature of the lies and twisting of the truth that mass media would have us simply digest, and, of course, (probably Most Importantly) than act accordingly, having had a nice bellyfull of Total Bullshit.

After all, natural physical itself would neccesiatate such a correction.

I beleive this and a Very Few other sources of hard news are giving us an opportunity to do JUST THAT..

to effect sweeping changes to environmental laws, to effect just as sweeping changes in the areas of antitrust, and many other areas this obscene abuse of power has skewed so dangerously, putting us in a very precarious place indeed in many many areas.

Posted by: Leigh (bird) Williams on 6.29.03 | 3:09 pm from North Carolina

Bush praises Brazil's Lula

BBC News

Lula has impressed Washington since taking office

US President George W Bush and his Brazilian counterpart have emphasised their countries' common interests despite opposing each other over Iraq and some trade matters.

Luiz Inacio Lula da Silva - commonly known as Lula - was visiting the White House, the first foreign leader who opposed the US-led war on Iraq to do so.

Mr Bush said the relationship between the countries is "vital, important and growing".

The two men announced a series of joint projects ranging from energy to business development in Brazil and fighting Aids in Africa.

"Brazil is an incredibly important part of a peaceful and prosperous North and South America," Mr Bush said as he received Lula for an Oval Office meeting.

The BBC's Steve Kingstone, in Washington, says the left-wing former trade union leader is not a natural political ally of Mr Bush.

He has maintained warm relations with Cuba's Fidel Castro, long a thorn in America's side.

But since taking office, Lula has impressed Washington with a combination of economic discipline and an ambitious long-term programme to combat poverty in Brazil, our correspondent says.

On a personal prospective I am very impressed by the vision of the President of Brazil -George W Bush

Mr Bush said: "This relationship is a vital and important and growing relationship.

"On a personal prospective I am very impressed by the vision of the President of Brazil. He not only has a tremendous heart, but he has got the abilities to encourage prosperity and to end hunger."

For his part, Lula spoke of a great partnership but it should, he said, be based on sincerity and trust going beyond a few occasional photo opportunities.

Confrontations

The dynamic between the two men is probably the key to this relationship for the next few years, our correspondent says.

Lula's domestic reforms have provoked trade union protests

Together the two governments are chairing negotiations towards a hemisphere-wide free trade agreement scheduled to come into force in 2005.

The United States is the largest investor in Brazil, with 400 firms and investments of $30bn (£20bn), while Brazil exports some $15bn (£10bn) worth of goods to the US.

With a population approaching 175 million, Brazil is the second largest country in the Americas, after the US - and South America's largest economy.

Lula would like to ensure greater access for Brazil's huge agricultural sector to US markets before agreeing to any trade deals.

Meanwhile, American policymakers are increasingly looking to Brazil for help in resolving some of the most difficult issues between the hemispheres.

These include the confrontation between US companies and Venezuela's Hugo Chavez, and the drug-trafficking issues in the Andes states.

The Brazilian president is accompanied by no fewer than 10 cabinet ministers, in the biggest Brazil-US summit since World War II when President Frank D Roosevelt persuaded Brazil to join the war effort.

Venezuela Poll Shows Chavez Would Lose Vote, Nacional Reports

June 20 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuelan President Hugo Chavez would lose a referendum on his presidency by 38 percentage points if a vote were held today, El Nacional reported, citing a poll by Consultores 21.

The May 17-27 poll of 1,500 Venezuelans found that 66 percent would vote for Chavez to leave office, while 28 percent would cast ballots for him to stay. Eight percent were undecided. No margin of error was given.

A similar poll in April showed that Chavez would lose by 18 percentage points.

Venezuela's opposition plans to seek a binding referendum on Chavez's presidency after Aug. 19 when the former paratrooper passes the halfway point of his term in office. Negotiations over holding the vote continue.

(EN 6/20 A5) (To see El Nacional's Web site, click on {NCNL })

Emerging debt-Market stumbles again, Brazil drops

Reuters, 06.20.03, 1:50 PM ET

NEW YORK, June 20 (Reuters) - Emerging sovereign debt stumbled for a fourth straight session on Friday as investors' push to lock in profits after a vibrant rally combined with a flimsy U.S. Treasury market to sink prices.

The benchmark J.P. Morgan Emerging Market Bond Index Plus <11EMJ> shed 1.14 percent, piling on to sharp losses from much of the week. Brazil, a heavyweight in the market with a one-fifth share of the index, slid 2.06 percent as the C bond <BRAZILC=RR> veered 1.0 point lower to 88.75.

Emerging debt took a turn into negative territory this week as U.S. Treasury prices, hit by conflicting messages about an expected U.S. Federal Reserve rate cut, ground lower. U.S. government debt is used as the base for gauging the risk premium of emerging bonds.

Investors have also sought to pare down holdings to take advantage of this year's 22 percent surge. Emerging debt has seen billions of dollars in new cash since the turn of the year, thanks to Wall Street's search for yields above the level of the paltry U.S. rates and optimism for Brazil's reform agenda.

"Overall it's been very quiet," said an emerging debt trader. "Generally it seems there's a fair amount of weakness, particularly Brazil."

"I think it's a little bit of the Treasury and some profit-taking," said the trader. "The sticker price on (emerging market) debt has gotten to levels where many of the old salts are absolutely astonished."

In addition, many investors from Brazil, Latin America's largest country, were seen out of their offices on Friday as they extended Thursday's holiday into a long weekend.

Among the day's biggest losers were Ecuador, whose share of the EMBI-Plus careened 3.62 percent lower. Mexico lost a hefty 1.04 percent, Peru slid 1.02 percent and Venezuela shed 2.18 percent.

"It's trading pretty heavy -- there's lots of supply still. It's profit taking more than anything else and no one's buying yet," said another emerging debt trader.

Ecuador's debt has soared 62.5 percent this year, thanks to the flows to emerging markets and optimism for its International Monetary Fund loan deal. Mexico has gained 11.8 percent, Peru is up 16 percent and Venezuela has added 14.9 percent.

MOODY'S UPGRADES PRIDE INTERNATIONAL'S LIQUIDITY RATING TO SGL-2

Source, Corporate Rating News  (The following statement was released by the ratings agency)

NEW YORK, June 20 - Moody's upgraded Pride International's liquidity rating to SGL-2 from SGL-3, indicating good combined direct and alternative liquidity. Pride's senior implied rating is Ba1 and its senior unsecured note rating is Ba2. The upgrade to SGL-2 reflects: (1) rising operating cash flow cover of interest expense and capital expenditures, (2) successful refinancing earlier this year of Pride's putable convertible debt, (3) the fact that cash balances, cash flow, and fully-undrawn bank revolver availability indicate internal coverage of scheduled capital spending and debt maturities over the next twelve months, (4) a fully undrawn available $250 million revolver, and (5) good alternative liquidity. Moody's estimates that Pride's 2003 EBITDA will be in the range of $450 million to $470 million range and free cash flow after interest expense, working capital changes, and capital spending will be in the range of $110 million to $130 million. After issuing $300 million of unrated convertible senior notes this year and repaying $211 million of putable notes and $165 million of bank revolver debt, Moody's estimates cash balances to now be roughly $135 million. By year-end 2003, cash balances may materially exceed $200 million. The SGL-2 rating is restrained by, and sensitive to, bank loan covenant coverage that may continue to be tight at June 30, 2003, December 31, 2003, and again in 2004. Pride's expected pace of earnings and cash flow growth is nearly matched by covenant tightening during that period, though the tightening covenants do further reinforce Pride management's and board of directors' clear intention to significantly reduce leverage. The SGL-2 rating cannot rise if Pride continues to operate relatively close to its bank loan covenants. An upgrade of the SGL rating over the next twelve months would likely require a substantial debt reduction with proceeds of either newly issued equity or conversion of existing convertible instruments. In the meantime, retaining the SGL-2 rating depends on Pride meeting its bank loan covenants while firming of the rating would occur when Pride also refinances or extends the maturity of an early 2004 $86 million seller note maturity and a $75 million 2004 European credit line maturity. The SGL-2 rating is supported by significant alternative liquidity. While the $250 million bank revolver and $200 million bank term loan are secured by twenty-eight GOM jack-up drilling rigs and by two semisubmersible rigs, the unencumbered base is relatively large. This includes receivables of over $300 million at mid-year 2003, roughly $400 million of mostly offshore unencumbered jack-up and platform rigs, and Pride's large valuable South American land rig business. Unencumbered rigs can be monetized, but proceeds must first retire Pride's loan facilities, whereas qualified receivables could be monetized without retiring bank debt. Trailing four quarters net income and defined EBITDA are expected to continue rising as previous trough quarters are replaced by stronger quarter results but Pride's Debt/Capital, Defined EBITDA/Interest, and Defined Debt/Defined EBITDA convenant tests will retighten through to March 31, 2004. The Debt/EBITDA test (trailing four quarters) declined from 4.95x at September 30 and December 31, 2002 to 4.75x on March 31, 2003, 4.50x on June 30 and September 30, 2003, 4.0x at year-end 2003, and 3.50x on March 31, 2004. Net Debt/Total Capital steps down from 55% through to September 30, 2003, to a possibly tight 50% by year-end 2003, and 45% by March 31, 2004. The EBITDA/Interest test stepped up from 3.0x in 2002 to 3.25x through 2003, and 4.00 by March 31, 2004. Pride easily meets its Net Worth Test. Moody's anticipates ongoing net debt reduction due to constrained capital spending, rising cash flow from new term drilling contracts and firming in rig activity in the Gulf of Mexico, assuming Pride's other markets do not decline materially. After political and fiscal turmoil in Argentina and Venezuela, Pride reports that its Argentine land rig business is operating at high utilization and that its Venezuelan land rig and barge rig business is firming too. One hundred percent of Pride's international jack-up, semisubmersible, and drillship fleet are under contract. However, Pride's U.S. GOM mat-supported jack-up fleet is at 46% utilization (six of thirteen rigs utilized) and Pride's mat-supported Gulf of Mexico jack-up rigs face stiff marketing competition from a key competitor. Along with other competitors, Pride is deploying rigs out of the U.S Gulf of Mexico market and into the Mexican Gulf of Mexico market. Moody's expects debt and leases at year-end 2003 of roughly $1.8 billion, down $40 million from March 31, 2003, and excluding $225 million in non-recourse debt in the now 30% owned Amethyst 4 and 5 joint venture. In the 1997 through 200x period, Pride incurred very substantial leverage to fund acquisition and construction of an offshore drilling rig fleet, including a deepwater semi-submersible drilling rig and drillship fleet now generating strong core contracted cash flow. Core cash flow should rise as term contracts generate a full quarter's activity for the deepwater fleet and as the rising number of term contracts with PEMEX for commodity jack-up rigs impact cash flow. Fairly recent term contracts include the Pride South Pacific semisubmersible, twelve contracts with Pemex for mat-supported jack-up rigs (bringing to sixteen its total rigs on contract with Pemex), and two jack-ups signed for other offshore markets. Eleven of the fourteen rigs placed into contracts here came off of inactive status. For 2003, Moody's projects $450 million to $470 million of EBITDA, with roughly $100 million of increased working capital investment absorbing that amount of cash flow. EBITDA peaked at $511 million in 2001 during up-cycle conditions and on the placement of Pride's new high-end drilling assets into drilling contracts. EBITDA bottomed at $369 million in 2002, beating Moody's projection of $362 million, on down-cycle conditions in the Gulf of Mexico and disruption in its Argentine and Venezuelan markets. Working capital increases absorbed approximately $114 million of cash flow in 2001 and reductions in working capital investment freed-up approximately $79 million of cash in 2002. Pride International, Inc. is headquartered in Houston, Texas.

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