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(Reuters) - China's Ministry of Public Security and a cabinet-level research center are preparing to investigate IBM Corp, Oracle Corp and EMC Corp over security issues, the official Shanghai Securities News said on Friday. The report follows revelations by former U.S. spy agency contractor Edward Snowden of widespread surveillance by the National Security Agency. It also comes as Beijing probes Western drugmakers over allegations of bribery and over-pricing.

China has been a focal point for the Snowden case since he stopped in Hong Kong en route to Moscow. He also claimed that the NSA hacked into critical network infrastructure at universities in China and in Hong Kong.Daniel Castro, a senior analyst with the Information Technology & Information Foundation, said he was concerned that a Chinese government probe could result in demands for U.S. companies to provide authorities with the blueprints to their technology so that Beijing can screen them for potential security threats.

Some experts have warned that Snowden's leaks could hurt the sales of U.S. technology companies in Asia and Europe, as reports of their complicity with NSA spying programs may lead foreign businesses and governments to purchase equipment and services from non-U.S. suppliers.The foundation, a think tank, last week projected that U.S. cloud computing firms could lose $21.5 billion in sales over the next three years, eventually ceding 10 percent of the foreign market to European and Asian competitors.

The first shot was fired on Monday. Teradata, which sells analytics tools for Big Data, warned that quarterly revenues plunged 21% in Asia and 19% in the Middle East and Africa. Wednesday evening, it was IBM’s turn to confess that its hardware sales in China had simply collapsed. Every word was colored by Edward Snowden’s revelations about the NSA’s hand-in-glove collaboration with American tech companies, from startups to mastodons like IBM.

The explanation is more obvious. In mid-August, an anonymous source told the Shanghai Securities News, a branch of the state-owned Xinhua News Agency, which reports directly to the Propaganda and Public Information Departments of the Communist Party, that IBM, along with Oracle and EMC, have become targets of the Ministry of Public Security and the cabinet-level Development Research Centre due to the Snowden revelations. “At present, thanks to their technological superiority, many of our core information technology systems are basically dominated by foreign hardware and software firms, but the Prism scandal implies security problems,” the source said, according to Reuters. So the government would launch an investigation into these security problems, the source said. Absolute stonewalling ensued. IBM told Reuters that it was unable to comment. Oracle and EMC weren’t available for comment. The Ministry of Public Security refused to comment. The Development Research Centre knew nothing of any such investigation. The Ministry of Industry and Information Technology “could not confirm anything because of the matter’s sensitivity.”

I’d warned about its impact at the time [read.... US Tech Companies Raked Over The Coals In China]. Snowden’s revelations started hitting in May. Not much later, the Chinese security apparatus must have alerted IT buyers in government agencies, state-owned enterprises, and major independent corporations to turn off the order pipeline for sensitive products until this is sorted out. As Mr. Loughridge’s efforts have shown, it’s hard to explain any other way that hardware sales suddenly collapsed by “40%, 50%” in China, where they’d boomed until then. This is the first quantitative indication of the price Corporate America has to pay for gorging at the big trough of the US Intelligence Community, and particularly the NSA with its endlessly ballooning budget. For once, there is a price to be paid, if only temporarily, for helping build a perfect, seamless, borderless surveillance society. The companies will deny it. At the same time, they’ll be looking for solutions. China, Russia, and Brazil are too important to just get kicked out of – and other countries might follow suit. In September, IBM announced that it would throw another billion at Linux, the open-source operating system, to run its Power System servers – the same that China had stopped buying. It seems IBM was trying to make hay of the NSA revelations that had tangled up American operating system makers. Linux, free of NSA influence, would be a huge competitive advantage for IBM. Or so it would seem. Read.... The Other Reason Why IBM Throws A Billion At Linux (With NSA- Designed Backdoor)

Ratcheting up the pressure on President Bashar al-Assad of Syria, the United States will keep American warplanes and antimissile batteries in Jordan, officials said Saturday.

The decision, which came at the request of Jordan, means that a detachment of American F-16 warplanes and Patriot missile-defense systems would remain in Jordan after a military exercise there concludes next week. The move followed President Obama’s decision last week to send arms to Syrian rebels and came as efforts were being made on multiple fronts on Saturday to increase the pressure on the government.

In Washington, Secretary of State John Kerry renewed his efforts to persuade Iraq to curtail Iranian air shipments of arms to Syria.

Just weeks after European leaders tamped down a banking crisis in Cyprus, troubles in the euro zone have again reared their head, this time in Portugal.

“The risks in the euro zone have increased markedly over the past six weeks or so,” wrote Nicholas Spiro, managing director of Spiro Sovereign Strategy, a London-based consultancy that assesses risk on sovereign debt. A critical moment for the latest trouble took place on Friday, when Portugal’s Constitutional Court struck down four of nine contested austerity measures that the government introduced as part of a 2013 budget that included about 5 billion euros, or $6.5 billion, of tax increases and spending cuts. The ruling left the government short about 1.4 billion euros of expected revenue, or more than one-fifth of the 2013 austerity package.

Specifically, the court, which began reviewing the legality of the government’s austerity measures in January, ruled as unconstitutional and discriminatory the government’s plans to cut holiday bonuses for civil servants and pensioners, as well as to reduce sick leave and unemployment benefits.

the new Iran sanctions bill that would kill Obama’s historic deal with Iran. And today’s bottom line is, Opposition to the warmongers is firming up. Jim Lobe reports that Senator Feinstein’s speech (above) may have killed AIPAC’s hopes of passing the new sanctions with a veto-proof Senate majority, at least until the AIPAC policy conference in the spring. Lobe notes that financial incentives to block the Iran deal also affect media: Tuesday’s floor speech by Senate Intelligence Committee Chair Dianne Feinstein could bury AIPAC’s hopes of winning passage of what I have called the Kirk-Menendez Wag the Dog Act of 2013…at least for the next month or so. The speech, which was remarkably comprehensive in rebutting virtually every argument made by AIPAC and the 59 co-sponsors in favor of the bill, comes amid a surprising spate of newspaper editorials against the bill, particularly given the dearth of actual news coverage about it. Newspapers that have taken position against the legislation in just the last few days include the Minneapolis Star Tribune, USA Today, the New York Times, and the often-neoconservative-leaning Washington Post. As cash-poor as they are, newspapers are still less susceptible to the kind of pressure exerted by AIPAC and its associated PACs that are able to provide — or deny — substantial cash for political campaigns.

So is the new Jeff Bezos/Washington Post showing a little vertebrae? And what about the new Chris Hughes/New Republic. Ryan Cooper has a piece up there trashing Cory Booker as a warmonger.

Recall that the newspaper editorials denouncing the bill as a march toward war followed a forceful White House statement that called out the warmongers: “The American people have been clear that they prefer a peaceful resolution to this issue. If certain members of Congress want the United States to take military action, they should be up front with the American public and say so,” said security aide Bridget Meehan. That put AIPAC supporter Steny Hoyer on the defensive. Politico:

The United States is quietly rushing dozens of Hellfire missiles and low-tech surveillance drones to Iraq to help government forces combat an explosion of violence by a Qaeda-backed insurgency that is gaining territory in both western Iraq and neighboring Syria. The move follows an appeal for help in battling the extremist group by the Iraqi prime minister, Nuri Kamal al-Maliki, who met with President Obama in Washington last month.But some military experts question whether the patchwork response will be sufficient to reverse the sharp downturn in security that already led to the deaths of more than 8,000 Iraqis this year, 952 of them Iraqi security force members, according to the United Nations, the highest level of violence since 2008.Al Qaeda’s regional affiliate, the Islamic State in Iraq and Syria, has become a potent force in northern and western Iraq

s a starting point, we think the Proposed Rule is simply too tepid.” That was how Senators Jeff Merkley and Carl Levin opened their February 2012 comment letter to federal banking regulators about the “Volcker rule,” designed to prevent large banks from making risky proprietary trades for their own profit, the kinds of trades that nearly took down the financial system in 2008. The senators, who authored the rule in Congress, were displeased about a number of loopholes added to the proposal, which they said did not “fulfill the law’s promise.” They demanded that regulators “draw brighter lines, remove unnecessary complexities, and enable cost-effective, consistent enforcement.”Twenty months later, five regulators will today finalize the Volcker rule, and Merkley, for one, is pleased with the result. “I believe the loopholes inherent in that [2012] draft have been significantly reduced or eliminated,” he said in an interview on the eve of the final votes. “I have a much more positive feeling about what will be voted on.” 

The tougher rule is a pleasant surprise, given how reliably Wall Street lobbyists have gutted such efforts in the past. For once, the hard work of members of Congress, advocates, and the public actually produced something that could work. But if you view financial reform like a football game, today’s votes kick off the third quarter of a contest destined for 34 consecutive overtimes. Today’s vote mostly triggers an extended period of data collection and guideline-setting, giving mega-banks many future opportunities to water down the rules. And even if implementation wraps up strongly—as it certainly could—regulatory spine will be needed to prevent another financial crisis. As Merkley noted, in matters like this, “you need eternal vigilance.” And, in Washington and on Wall Street, vigilance has often been anything but.

“All of the investment banks, up in New York and D.C., they should have gone to jail.” That isn’t a quote from an Occupy Wall Street protester or Senator Elizabeth Warren. That’s a common campaign slogan repeated by Dave Brat, the Virginia college professor who scored one of the biggest political upsets in over a century by defeating Majority Leader Eric Cantor in the Republican primary last night. The national media is buzzing about Brat’s victory, but for all of the wrong reasons.

Did the Tea Party swoop in and help Brat, as many in the Democratic Party are suggesting? Actually, the Wall Street Journal reports no major Tea Party or anti-establishment GOP group spent funds to defeat Cantor. Did Cantor, the only Jewish Republican in Congress, lose because of his religion, as some have suggested? There’s no evidence so far of anti-Semitism during the campaign. Was Cantor caught flatfooted? Nope; Cantor’s campaign spent close to $1 million on the race and several outside advocacy groups, including the National Rifle Association, the National Realtors Association and the American Chemistry Council (a chemical industry lobbying association) came in and poured money into the district to defeat Brat. The New York Times claims that Brat focused his campaign primarily on immigration reform. Brat certainly made immigration a visible topic in his race, but Republic Report listened to several hours of Brat stump speeches and radio appearances, and that issue came up far less than what Brat called the main problem in government: corruption and cronyism. Brat told Internet radio host Flint Engelman that the “number one plank” in his campaign is “free markets.” Brat went on to explain, “Eric Cantor and the Republican leadership do not know what a free market is at all, and the clearest evidence of that is the financial crisis … When I say free markets, I mean no favoritism to K Street lobbyists.” Banks like Goldman Sachs were not fined for their role in the financial crisis — rather, they were rewarded with bailouts, Brat has said.

rat, who has identified with maverick GOP lawmakers like Representative Justin Amash of Michigan, spent much of the campaign slamming both parties for being in the pocket of “Wall Street crooks” and D.C. insiders. The folks who caused the financial crisis, Brat says, “went onto Obama’s rolodex, the Republican leadership, Eric’s rolodex.” During several campaign appearances, Brat says what upset him the most about Cantor was his role in gutting the last attempt at congressional ethics reform. “If you want to find out the smoking gun in this campaign,” Brat told Engelman, “just go Google and type the STOCK Act and CNN and Eric Cantor.” (On Twitter, Brat has praised the conservative author Peter Schweizer, whose work on congressional corruption forced lawmakers into action on the STOCK Act.) The STOCK Act, a bill to crack down on insider trading, was significantly watered down by Cantor in early 2012. The lawmaker took out provisions that would have forced Wall Street “political intelligence” firms to register as traditional lobbyists would, and removed a section of the bill to empower prosecutors to go after public officials who illegally trade on insider knowledge. And Brat may be right to charge that Cantor’s moves on the STOCK Act were motivated by self interest. Cantor played a leading role in blocking legislation to fix the foreclosure crisis while his wife and his stock portfolio were deeply invested in mortgage banks.

In May 2010, when the United Nations Security Council was weighing sanctions against Iran over its nuclear program, several members were undecided about how they would vote. The American ambassador to the United Nations, Susan E. Rice, asked the National Security Agency for help “so that she could develop a strategy,” a leaked agency document shows.The N.S.A. swiftly went to work, developing the paperwork to obtain legal approval for spying on diplomats from four Security Council members — Bosnia, Gabon, Nigeria and Uganda — whose embassies and missions were not already under surveillance. The following month, 12 members of the 15-seat Security Council voted to approve new sanctions, with Lebanon abstaining and only Brazil and Turkey voting against. Continue reading the main story Related Coverage Books of The Times: ‘No Place to Hide,’ by Glenn GreenwaldMAY 12, 2014 Later that summer, Ms. Rice thanked the agency, saying its intelligence had helped her to know when diplomats from the other permanent representatives — China, England, France and Russia — “were telling the truth ... revealed their real position on sanctions ... gave us an upper hand in negotiations ... and provided information on various countries ‘red lines.’ ”

The two documents laying out that episode, both leaked by the former N.S.A. contractor Edward J. Snowden, are reproduced in a new book by Glenn Greenwald, “No Place to Hide: Edward Snowden, the N.S.A., and the U.S. Surveillance State.” The book is being published Tuesday.

A White House official said Tuesday that Venezuela was not a threat to the national security of the United States, backing off language in an executive order that had inflamed relations with the South American nation and drawn criticism from other countries in the region.The comments came as President Obama prepared to leave for a trip to the Caribbean and Latin America that will include a meeting of heads of state from the hemisphere.“The United States does not believe that Venezuela poses some threat to our national security,” said Benjamin J. Rhodes, deputy national security adviser for strategic communications, during a telephone call with reporters to discuss the president’s trip.

He was referring to an executive order signed by Mr. Obama last month that called for economic sanctions against seven Venezuelan officials who the United States said were involved in human rights abuses or violations of due process. Continue reading the main story Related in Opinion Editorial: A Failing Relationship With Venezuela MARCH 12, 2015 The executive order said that Venezuela was a threat to national security and that it constituted a national emergency for the United States.

The language escalated tensions between the two countries and provoked an angry response from President Nicolás Maduro of Venezuela. Even Venezuelan opposition leaders said it was excessive and had inadvertently played to Mr. Maduro’s political benefit.American officials had previously sought to play down the language in the order, saying that the administration was required by law to make the security threat designation to carry out the sanctions.But Mr. Rhodes went further on Tuesday, explicitly stating that Venezuela did not pose a threat, adding that the language was “completely pro forma.”“We, frankly, just have a framework for how we formalize these executive orders,” he said.

A top congressional intelligence official said on Sunday that American counterintelligence officials are virtually unanimous in believing that Edward J. Snowden is “under the influence of Russian intelligence services.”That suggestion came from Representative Mike Rogers, the Michigan Republican who is chairman of the Intelligence Committee.Mr. Rogers had previously raised the possibility that Mr. Snowden, the former National Security Agency contractor, might be working for Russia, though the congressman has yet to offer any evidence. His assertions on Sunday, however, were his most sweeping to date.“Every counterintelligence official believes that,” Mr. Rogers said on the NBC News program “Meet the Press.” “You won’t find one that doesn’t believe today he’s under the influence of Russian intelligence services.”

But investigators have disclosed no evidence that Mr. Snowden’s work, while under contract to the N.S.A., might have been directed by a foreign power.Ben Wizner, an American Civil Liberties Union lawyer who advises Mr. Snowden, has vigorously rejected Mr. Rogers’s contentions, noting that Mr. Snowden tried to gain asylum in several other countries before settling in Russia.There has been no public indication that investigators for the F.B.I., the N.S.A. or the Pentagon have uncovered evidence that Mr. Snowden received assistance from any foreign intelligence service.

An article in yesterday's New York Times titled "US Pins Hope on Syrian Rebels with Loyalties All Over the Map" highlights the fact that President Obama's recently declared strategy against the Islamic State depends on empowering Syrian rebels to take control once the Islamic State is driven out. This plan leaves the US "dependent on a diverse group riven by infighting, with no shared leadership and with hard-line Islamists as its most effective fighters," the article observes, and proceeds to elaborate on the difficulties of working with the various groups and even knowing what their allegiances are.

The article concludes with a brief focus on one likely prospect: Some rebels appear ready to join the fight against ISIS [Islamic State]. A video posted online this week showed Jamal Maarouf, a rebel commander in northern Syria, addressing a gathering of hundreds of fighters. "God willing, we will fight two states: the state of Bashar al-Assad, the unjust tyrant, and the state of Baghdadi, the aggressor tyrant," he said, referring to the head of ISIS, Abu Bakr al-Baghdadi. The only problem with this example of a possible US ally in the fight in Syria is that Maarouf has already stated that he has no problem with al Qaeda's Syrian branch, the Al Nusrah Front, and has admitted to sharing weapons with it. And this example of cooperation between "moderate" and radical Islamist groups is not an isolated one; see Threat Matrix report, Desperately seeking moderate Syrian rebels.

As we pointed out here at Threat Matrix back in April, Maarouf told an interviewer from The Independent: "It's clear that I'm not fighting against al-Qa'ida. This is a problem outside of Syria's border, so it's not our problem. I don't have a problem with anyone who fights against the regime inside Syria." Maarouf admits to fighting alongside Jabhat al-Nusra - one example being the offensive against Isis, whose brutal tactics were deemed too violent even for al-Qa'ida leader Ayman al-Zawahiri. While Maarouf maintains that their military supplies are too few to share, he cites the battle of Yabroud, against the regime, as an example of how his group shared weapons with Jabhat al-Nusra. "If the people who support us tell us to send weapons to another group, we send them. They asked us a month ago to send weapons to Yabroud so we sent a lot of weapons there. When they asked us to do this, we do it."

Almost before the votes were counted in the recent Greek elections, battle lines were being drawn all over Europe. While Alexis Tsipras, the newly elected Prime Minister from Greece’s victorious Syriza Party, was telling voters, “Greece is leaving behind catastrophic austerity, fear and autocratic government,” Jens Weidmann, president of the German Bundesbank, was warning the new government not to “make promises it cannot keep and the country cannot afford.”   On Feb. 12 those two points of view will collide when European Union (EU) heads of state gather in Brussels. Whether the storm blowing out of Southern Europe proves an irresistible force, or the European Council an immovable object, is not clear, but whatever the outcome, the continent is not likely to be the same after that meeting.   The Jan 25 victory of Greece’s leftwing Syriza Party was, on one hand, a beacon for indebted countries like Spain, Portugal, Italy and Ireland. On the other, it is a gauntlet for Germany, the Netherlands, Finland, and the “troika”—the European Central bank, the European Commission, and the International Monetary Fund (IMF)—the designers and enforcers of loans and austerity policies that have inflicted a catastrophic economic and social crisis on tens of millions of Europeans.

The troika’s policies were billed as “bailouts” for countries mired in debt—one largely caused by the 2008 financial speculation bubble over which indebted countries had little control—and as a way to restart economic growth. In return for the loans, the EU and the troika demanded massive cutbacks in social services, huge layoffs, privatization of pubic resources, and higher taxes.   However, the “bailouts” did not go toward stimulating economies, but rather to repay creditors, mostly large European banks. Out of the $266 billion loaned to Greece, 89 percent went to investors. After five years under the troika formula, Greece was the most indebted country in Europe. Gross national product dropped 26 percent, unemployment topped 27 percent (and over 50 percent for young people), and one-third of the population lost their health care coverage.   Given a chance to finally vote on the austerity strategy, Greeks overwhelmingly rejected the parties that went along with the troika and elected Syriza.

Gerry Adams of Sinn Fein—now the third largest party in the Irish Republic—hailed the vote as opening “up the real prospect of democratic change, not just for the people of Greece, but for citizens right across the EU.” Unemployment in Ireland is 10.7 percent, and tens of thousands of jobless young people have been forced to emigrate.   The German Social Democrats are generally supportive of the troika, but the Green Party hailed the Syriza victory and Die Linke Party members marched with signs reading, “We start with Greece. We change Europe.”   Italian Prime Minister Matteo Renzi—who has his own issues with the EU’s rigid approach to debt—hailed the Greek elections, and top aide Sandro Gozi said that Rome was ready to work with Syriza. The jobless rate in Italy is 13.4 percent, but 40 percent among youth.

Hillary Clinton E-Mail Controversy Illuminates Government-Wide Failure National Security Archive Lawsuit Established E-Mails as Records in 1993 CIO Council Repeats as Rosemary "Winner" for Doubling Down On "Lifetime Failure" Only White House Saves Its E-Mail Electronically, Agencies No Deadline Until 2016

The Federal Chief Information Officers (CIO) Council has won the infamous Rosemary Award for worst open government performance of 2014, according to the citation published today by the National Security Archive at www.nsarchive.org. The National Security Archive had hoped that awarding the 2010 Rosemary Award to the Federal Chief Information Officers Council for never addressing the government's "lifetime failure" of saving its e-mail electronically would serve as a government-wide wakeup call that saving e-mails was a priority. Fallout from the Hillary Clinton e-mail debacle shows, however, that rather than "waking up," the top officials have opted to hit the "snooze" button. The Archive established the not-so-coveted Rosemary Award in 2005, named after President Nixon's secretary, Rose Mary Woods, who testified she had erased 18-and-a-half minutes of a crucial Watergate tape — stretching, as she showed photographers, to answer the phone with her foot still on the transcription pedal. Bestowed annually to highlight the lowlights of government secrecy, the Rosemary Award has recognized a rogue's gallery of open government scofflaws, including the CIA, the Treasury Department, the Air Force, the FBI, the Justice Department, and Director of National Intelligence James Clapper.

Chief Information Officer of the United States Tony Scott was appointed to lead the Federal CIO Council on February 5, 2015, and his brief tenure has already seen more references in the news media to the importance of maintaining electronic government records, including e-mail, and the requirements of the Federal Records Act, than the past five years. Hopefully Mr. Scott, along with Office of Management & Budget Deputy Director for Management Ms. Beth Cobert will embrace the challenge of their Council being named a repeat Rosemary Award winner and use it as a baton to spur change rather than a cross to bear.

William Binney is one of the highest-level whistleblowers to ever emerge from the NSA. He was a leading code-breaker against the Soviet Union during the Cold War but resigned soon after September 11, disgusted by Washington’s move towards mass surveillance.On 5 July he spoke at a conference in London organised by the Centre for Investigative Journalism and revealed the extent of the surveillance programs unleashed by the Bush and Obama administrations.

“At least 80% of fibre-optic cables globally go via the US”, Binney said. “This is no accident and allows the US to view all communication coming in. At least 80% of all audio calls, not just metadata, are recorded and stored in the US. The NSA lies about what it stores.”The NSA will soon be able to collect 966 exabytes a year, the total of internet traffic annually. Former Google head Eric Schmidt once argued that the entire amount of knowledge from the beginning of humankind until 2003 amount to only five exabytes.Binney, who featured in a 2012 short film by Oscar-nominated US film-maker Laura Poitras, described a future where surveillance is ubiquitous and government intrusion unlimited.“The ultimate goal of the NSA is total population control”, Binney said, “but I’m a little optimistic with some recent Supreme Court decisions, such as law enforcement mostly now needing a warrant before searching a smartphone.”

It shows that the NSA is not just pursuing terrorism, as it claims, but ordinary citizens going about their daily communications. “The NSA is mass-collecting on everyone”, Binney said, “and it’s said to be about terrorism but inside the US it has stopped zero attacks.”The lack of official oversight is one of Binney’s key concerns, particularly of the secret Foreign Intelligence Surveillance Court (Fisa), which is held out by NSA defenders as a sign of the surveillance scheme's constitutionality.“The Fisa court has only the government’s point of view”, he argued. “There are no other views for the judges to consider. There have been at least 15-20 trillion constitutional violations for US domestic audiences and you can double that globally.”