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DNC Refused to Give FBI Access to Its Servers ... Instead Gave Access to a DNC Consulta... - 0 views

  • CNN reports: The Democratic National Committee “rebuffed” a request from the FBI to examine its computer services after it was allegedly hacked by Russia during the 2016 election, a senior law enforcement official told CNN Thursday. “The FBI repeatedly stressed to DNC officials the necessity of obtaining direct access to servers and data, only to be rebuffed until well after the initial compromise had been mitigated,” a senior law enforcement official told CNN. “This left the FBI no choice but to rely upon a third party for information. *** The FBI instead relied on the assessment from a third-party security company called CrowdStrike. As first reported by George Eliason, CrowdStrike’s Chief Technology Officer and Co-Founder Dimitri Alperovitch – who wrote the CrowdStrike reports allegedly linking Russia to the Democratic party emails published by Wikileaks – is a fellow at the Atlantic Council … an organization associated with Ukraine, and whose main policy goal seems to stir up a confrontation with Russia. [1].
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    The hawks' drive to keep the new Cold War against Russia going begins to ravel at the edges. Perhaps Russia might oblige by doing some surveillance and releasing some smoking gun documents?
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DOJ's Motion to Dismiss in Smith v. Obama, the case challenging the legality of the war... - 0 views

  • As I noted in an earlier post, Nathan Smith, a U.S. Army captain deployed to Kuwait as part of the campaign against ISIL, Operation Inherent Resolve, has sued the President, seeking a declaration that Congress has not authorized the hostilities in Iraq and Syria and that therefore the War Powers Resolution requires the President to remove U.S. forces from hostilities in those nations. On Tuesday, the Department of Justice filed a motion to dismiss the case. Its brief in support of the motion includes one argument that I think is correct (albeit not for all the reasons the government offers) — namely, that Smith lacks standing to sue. That ought to be sufficient to have the case dismissed. The brief also includes an argument on the merits (albeit not designated as such) that is very interesting and potentially important — an account of how Congress has allegedly authorized Inherent Resolve in three ways: (i) in the 2001 AUMF; (ii) in the 2002 AUMF; and (iii) in current appropriations statutes. The heart of the brief, however, is devoted to a third argument — that Judge Koller-Kotelly must dismiss the case on the basis of the political question doctrine — that is not only wrong, but that simply ignores the Supreme Court’s recent (and repeated) repudiation of that very argument.
  • On page 39 of its 45-page brief, the government finally gets around to the reason why the court should dismiss the complaint: Smith lacks standing. Importantly, Smith’s theory of standing is not that he — an Army captain deployed to perform intelligence services in Kuwait — is more likely to be injured or killed by virtue of the President’s decision to deploy troops into hostilities in Iraq and Syria. It is, instead, that the President’s alleged failure to comply with the War Powers Act results in Captain Smith’s own violation of his officer’s oath to “support and defend” the Constitution “against all enemies, foreign and domestic,” and to “bear true faith and allegiance” to the Constitution.
  • The government’s standing argument begins (p. 35) by suggesting that “[p]laintiff’s claim that he is being forced to betray his oath is insufficient to establish standing because the violation of an oath, by itself, is not an injury in fact.” The cases the government cites for that proposition, however, do not say that a forced oath violation would not be an injury in fact — and that’s not a question the judge needs to resolve. What the cases establish, instead, is the point the government finally argues at page 39 — namely, that a government officer does not violate his oath by complying with superiors’ orders, even if it turns out that the law prohibits the military operation in which those orders are issued. Indeed, Smith would not violate his oath of office even if his superiors’ orders themselves were unauthorized, or if the intelligence activities he is ordered to performed were unauthorized. But he does not allege even those things (as I discuss below, he does not, for instance, alleged that he is being ordered to do anything unlawful). Instead, he merely argues that because President Obama should have withdrawn troops from Syria and Iraq 60 days after their deployment, Smith himself is violating his oath to “bear true faith and allegiance to the Constitution.” This is a non sequitur: Even if Smith is right that the continuation of Operation Inherent Resolve is unlawful, that would not mean that he is acting in violation of his oath. (Much more on this in my earlier post.) And that simple fact is reason enough for Judge Koller-Kotelly to dismiss the case.
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  • One of Smith’s counsel, Professor Bruce Ackerman, argues that this reason for rejecting the oath-based theory of standing ignores the Supreme Court’s 1804 decision in Little v. Barreme. Little, however, is not on point. In that case, Navy Captain Little was sued by the owners of a Danish ship for damages caused when Little seized that neutral ship. The Court held that Little could be liable, notwithstanding the fact that he was following orders, because the capture violated a implicit statutory prohibition on the military’s seizure of ships sailing from France to the United States. In this case, however, Captain Smith has not argued — nor could he — that he has been ordered to do anything unlawful (in violation of a statute), let alone that he has been ordered to do something that would subject him to possible liability for damages. He is, instead, arguing that President Obama violated a statute. That is not enough to establish Smith’s standing to sue.
  • The government’s main argument, to which it devotes far too many pages, is that the judge must dismiss the case because it raises a “political question” that courts cannot answer. This is flatly wrong — and it ignores several controlling precedents, including the Supreme Court’s recent 8-1 rejection of virtually the same government argument in Zivotofsky v. Clinton.
  • The most interesting thing about the government’s brief — and by far the most important aspect of it, for public purposes apart from the lawsuit itself — is that, in the section ostensibly arguing that the case is nonjusticiable (see pp. 25-30, and also pp. 4-14), DOJ actually offers the Executive branch’s most detailed defense yet about why Operation Inherent Resolve is congressionally authorized. As some of us predicted, the government relies on three arguable authorizations, any one of which would be sufficient to defeat Smith’s WPR claim if the courts were to reach the merits. In this post I’m not going to assess the merits of the three arguments. For now, my purpose is only to describe them, and to raise one issue with respect to the third. i. First, the government argues that the 2001 AUMF authorizes the operation against ISIL.
  • Second, the government argues that the 2002 AUMF also authorizes Operation Inherent Resolve, just as it authorized operations in Iraq against AQI (which became ISIL) from 2003 to 2011, after the Hussain regime fell.
  • Finally, and most interestingly (in part because the government has not previously made this argument), DOJ argues that a recent “unbroken stream” of appropriations statutes not only confirm the authorities allegedly conferred by the 2001 and 2002 AUMFs, but also offer their own, independent congressional authorization.
  • Two things are fairly clear from this: The members of Congress approve of Operation Inherent Resolve — indeed, there’s virtually no opposition. And Congress has (most likely) appropriated funds to pay for it. The operative question, however, is whether Congress’s appropriations also serve as an authorization that would supersede the requirement of WPR section 5(b). The government brief alludes to one important argument that the plaintiff will undoubtedly raise: Section 8(a)(1) of the WPR provides that, for purposes of tolling the 60-day clock of section 5(b), “[a]uthority to introduce United States Armed Forces into hostilities or into situations wherein involvement in hostilities is clearly indicated by the circumstances shall not be inferred (1) from any provision of law . . . including any provision contained in any appropriations Act, unless such provision specifically authorizes the introduction of United States Armed Forces into hostilities or into such situations and states that it is intended to constitute specific statutory authorization within the meaning of this chapter.” Obviously, the 2016 Act does not satisfy that requirement. Is that fatal to the appropriations-as-authorization argument?
  • As the Office of Legal Counsel 50 U.S.C. 1542 and 1543). These provisions might be read simply to convey that the executive must continue to comply with the consultation and reporting requirements of WPR sections 3 and 4, even after the 2016 Act authorizes the introduction of troops into hostilities in Iraq and Syria. Or they might alternatively be construed to also specify that the Act is not providing the authority that section 5(b) of the WPR calls for.
  • Not surprisingly, DOJ argues for the former view (pp. 27-28 of the brief): “[I]n the few provisions in which Congress did reference the War Powers Resolution, to clarify that no funds made available for Operation Inherent Resolve are to be used ‘in contravention’ of the Resolution, Congress signaled its agreement that the President’s counter-ISIL military actions were authorized by simultaneously funding Operation Inherent Resolve. If Congress believed that the United States had been conducting airstrikes and other counter-ISIL military activities ‘in contravention of the War Powers Resolution,’ it would have made no sense for Congress to use the ‘in contravention’ proviso in the same laws that make funds available for the express purpose of continuing those military activities.” That’s not a bad argument, at least at first glance; but it’s not a slam-dunk, either, in part because appropriations provisions do not necessarily establish authorizations. It’ll be interesting to see how Captain Smith’s lawyers respond to this particular aspect of the merits argument. I doubt Judge Koller-Kotelly will reach it, however, because she is likely to dismiss the case for want of standing.
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    I've read the brief. I don't think the implied partial repeal of the War Powers Resolution argument should fly. The relevant provision establishes a rule of interpretation of later statutes and the appropriations bills neither reject the rule of interpretation nor specifically provide authorization for use of military force. They just authorize funding. On the standing issue, I think the DoJ position is correct; the oath of office applies only to senior officers who make the decision to initiate a war. But DoJ may have opened the door to a more compelling standing argument by arguing that the war does not constitute a war crime, a crime against peace, or a crime against humanity under international law. DoJ did not need to make that argument because Smith had not alleged in his complaint that he was being ordered to commit such crimes, but by doing so DoJ waives any argument that such issues are beyond the scope of Smith's standing and the evidence that the Iraq and Syrian wars are illegal under international law is, to say the least, strong.
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GOP immigration plan devised by Communist Party - 0 views

  • Republican support
  • But why would Republicans get behind such a plan? Some astute political observers advise that when politicians appear to be promoting agendas against their own interest, follow the money.
  • t’s no surprise that the Republicans supporting this thing are the ones with ties to the Chamber of Commerce, not ordinary voters.”
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  • But even if big business benefits, the cheap labor advantages are only temporary. Once illegal aliens are fully legalized, businesses will be required to provide just as much in pay and benefits as they pay American workers.
  • In the meantime, however, it is widely assumed those workers will take jobs from American citizens, depress wages and increase unemployment. Moreover, in many key swing states, projected amnesties will swamp the rolls of the unemployed (see table)
  • So, illegal aliens would be granted legal status immediately, but five years down the road, if the fence still isn’t built and e-verify still isn’t being used, then their legal status would be revoked. Given that the Department of Homeland Security is already allegedly ignoring border security –with immigration and customs agents suing their own agency for failing to enforce the law – many voters place little confidence in political promises of future enforcement.
  • In the meantime, Senate and House opponents have been painstakingly highlighting what they consider to be glaring flaws in these proposals: Every single border security provision in the Senate bill, including the hire of 20,000 Border Patrol agents, denying amnesty to criminals, building fences and installing surveillance devices, can be waived by the Homeland Security secretary. Both the House and Senate proposals emphasize the path to citizenship – the centerpiece of communist efforts – while making border security both vague and secondary. Both bills provide a $5,000 incentive for companies to hire the newly legalized illegal aliens instead of Americans, since the aliens would not be subject to the Obamacare coverage mandate.
  • Although politicians and the media have settled on the claim that there are 11 million illegal aliens, the actual number may well be closer to 20 million to 30 million. There were 10 million in 1996, a mere 10 years after Reagan’s amnesty, and it is doubtful only one million more have been added in the ensuing 17 years. Since 1990, Border agents have apprehended on average more than 1 million illegal aliens per year, almost all from Mexico.
  • When the Reagan amnesty became law, the intention was to naturalize only 1.2 million people, but the actual figure turned out to be 2.7 million. Statistics on illegal immigration have longed tended to be underestimated, sometimes vastly so.
  • Thus, current proposals provide a path to citizenship for as many as 20 to 30 million illegal aliens here now, plus relatives who will be brought in through chain migration and at least 75 percent of those who will come in the future – virtually endless amnesty – while efforts to secure the border are almost certain to be insufficient.
  • With polls showing more than two-thirds of Americans don’t believe “immigration laws would be enforced in the future if illegal aliens were given amnesty,” it is clear that passage of the current Republican-backed bill may indeed fulfill the agenda of its communist originators – the creation of a permanent Democrat voting majority, guaranteeing permanent control of the United States government by leftist progressives.
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    Wow.  Documentation up the ying yang .......... "The U.S. Senate's "Gang of Eight" immigration-reform plan, as well as a strikingly similar plan now being backed by Rep. Paul Ryan, R-Wis., and a bi-partisan House "Gang," both offer the "roadmap to citizenship" originally conceived and carefully developed by members of the Communist Party USA working within the Democratic Party and the radical left activist network for the purpose of using amnestied illegals to build a "permanent progressive majority." That is the inescapable conclusion readers will draw after reading the forthcoming book by acclaimed researcher and blogger Trevor Loudon, titled "The Enemies Within: Communists, Socialists and Progressives in the U.S. Congress." Although not yet published, Loudon agreed to allow WND readers to preview one chapter, titled "Latino Immigrants: Tools to Ensure a 'Governing Coalition' for the Left." Ads by Google Marriage Visa Lawyer $195 Get Your Fiance/Spouse to the USA. Free Consultation. (888) 902-9285 EasyFianceVisa.com/SpousalVisa Canadian Rockies By Train Experience the Rockies By Train. Luxury Mountain Travel By Rail TravelAlberta.us/Train In the book, Loudon exhaustively documents the Left's longtime agenda regarding illegal aliens and how its activists have gone about implementing it. He provides irrefutable proof that the entire immigration-reform movement was the brainchild of American communists and that their goal has long been to establish unchallengeable political supremacy. According to Loudon, the Communist Party USA has influenced U.S. policy toward illegals since at least the 1960s. He traces the history, showing how communists and communist-founded organizations slowly built the movement from the ground up. While other groups certainly joined the effort, the communists were always at the center. For example, he tells the story of CPUSA member Bert Corona, the "Communist Father of the 'Immigrants Rights' move
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Obama reassures Europeans over US surveillance - NorthJersey.com - 1 views

  • President Barack Obama sought Wednesday to reassure Europeans outraged over U.S. surveillance programs that his government isn't sifting through their emails or eavesdropping on their telephone calls. He acknowledged that the programs haven't always worked as intended, saying "we had to tighten them up." Obama said once-secret U.S. surveillance programs that became public knowledge after a government contractor leaked details about them are meant to improve America's understanding of what is happening around the world. He sought to allay the concerns of Europeans upset by the thought that their personal communications may have been swept up in the U.S. government's massive data collection operations. "I can give assurances to the publics in Europe and around the world that we're not going around snooping at people's emails or listening to their phone calls," Obama said at a news conference with Prime Minister Fredrik Reinfeldt on his first visit as president to Sweden. "What we try to do is to target very specifically areas of concern." Leaks by former National Security Agency contractor Edward Snowden about U.S. surveillance programs sparked outrage overseas, particularly among Europeans who place a premium on personal privacy and civil liberties and recall life under governments that routinely spied on them. The NSA program was the first question he received from the Swedish press.
  • Obama said additional changes to the programs may be required because of advances in technology. He said his national security team along with an independent board is reviewing everything to strike the right balance between the government's surveillance needs and civil liberties. "There may be situations in which we're gathering information just because we can that doesn't help us with our national security, but does raise questions in terms of whether we're tipping over into being too intrusive with respect to the ... the interactions of other governments," Obama said. "We are consulting with the (European Union) in this process; we are consulting with other countries in this process and finding out from them what are their areas of specific concern and trying to align what we do in a way that, I think, alleviates some of the public concerns that people may have."
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    Obama says, "we're not going around snooping at people's emails ... "What we try to do is to target very specifically areas of concern." That's a falsehood. We already know that NSA and GCHQ scan every email they can get their hands on for the presence of keywords.  And it's so nice that he's concerned the U.S. may be too intrusive in its spying on other governments. Now could he rustle up some concern about their spying  on U.S. citizens? I think not anytime soon unless his feet are held to a much hotter fire. 
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Glenn Greenwald  "The Goal Of The U.S. Government Is To Eliminate ALL Privacy... - 0 views

  • When Edward Snowden leaked American intelligence secrets the whole world became aware of the extent of US-UK surveillance of global phone and internet traffic. Have the revelations flagged up a corrosive infringement of individual liberty, or undermined efforts to protect the world from terrorism? Hardtalk speaks to journalist, Glenn Greenwald - the man who broke the Snowden story. His mission, he says, is to hold power to account. Is this a journalistic crusade that's gone too far?
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    The latest hilarious chapter in the ongoing saga of BBC commentators trying to best Glenn Greenwald in an interview. This time with a stuffed-shirt, pompous type who does an exceedingly poor job of concealing that his is the voice of GCHQ. How many documents do you have? Who else has them? How are they protected? Don't you think that you should give them back to NSA? What makes you think you are qualified to make decisions about what to publish? Haven't you endangered the security of millions of people with your sensational, advocacy journalism. Don't you know that Bob Woodward has severely criticized the way you have handled this?   Greenwald, of course, makes mincemeat of the latest BBC talking head to tackle him without knowing the subject matter and always turns the questions back onto the real story: that government agencies have created an Orwellian surveillance state, that goverrnent can't be trusted to operate in secrecy. Greenwald so thoroughly danced on the fellow's brain that he probably missed that Greenwald had not only demonstrated that the guy was a government stooge but then told him flat out that he was.   When the guy tried the old shouting match trick, Greenwald calmly informed him that if he wanted to filibuster that Greenwald would hang up and let him filibuster to his heart's content but that if he wanted to conduct an interview he would darned well allow Greenwald to answer the questions before changing the subject. All in all, a masterful performance by a U.S. constitutional lawyer, uncowed by the interviewer's highbrow received pronunciation. See http://en.wikipedia.org/wiki/Received_Pronunciation This reminded me of federal District Court Judge Owen Panner's First Law of Trial Conduct: Never try to cross-examine an expert. In my time I've met a very few lawyers capable of doing so but it takes an incredible amount of research and consultation with another expert or five, and the setting of meticulous traps. Glenn Greenwald's latest B
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US pushing local cops to stay mum on surveillance - Yahoo News - 0 views

  • WASHINGTON (AP) -- The Obama administration has been quietly advising local police not to disclose details about surveillance technology they are using to sweep up basic cellphone data from entire neighborhoods, The Associated Press has learned. Citing security reasons, the U.S. has intervened in routine state public records cases and criminal trials regarding use of the technology. This has resulted in police departments withholding materials or heavily censoring documents in rare instances when they disclose any about the purchase and use of such powerful surveillance equipment. Federal involvement in local open records proceedings is unusual. It comes at a time when President Barack Obama has said he welcomes a debate on government surveillance and called for more transparency about spying in the wake of disclosures about classified federal surveillance programs.
  • One well-known type of this surveillance equipment is known as a Stingray, an innovative way for law enforcement to track cellphones used by suspects and gather evidence. The equipment tricks cellphones into identifying some of their owners' account information, like a unique subscriber number, and transmitting data to police as if it were a phone company's tower. That allows police to obtain cellphone information without having to ask for help from service providers, such as Verizon or AT&T, and can locate a phone without the user even making a call or sending a text message. But without more details about how the technology works and under what circumstances it's used, it's unclear whether the technology might violate a person's constitutional rights or whether it's a good investment of taxpayer dollars. Interviews, court records and public-records requests show the Obama administration is asking agencies to withhold common information about the equipment, such as how the technology is used and how to turn it on. That pushback has come in the form of FBI affidavits and consultation in local criminal cases.
  • "These extreme secrecy efforts are in relation to very controversial, local government surveillance practices using highly invasive technology," said Nathan Freed Wessler, a staff attorney with the American Civil Liberties Union, which has fought for the release of these types of records. "If public participation means anything, people should have the facts about what the government is doing to them." Harris Corp., a key manufacturer of this equipment, built a secrecy element into its authorization agreement with the Federal Communications Commission in 2011. That authorization has an unusual requirement: that local law enforcement "coordinate with the FBI the acquisition and use of the equipment." Companies like Harris need FCC authorization in order to sell wireless equipment that could interfere with radio frequencies. A spokesman from Harris Corp. said the company will not discuss its products for the Defense Department and law enforcement agencies, although public filings showed government sales of communications systems such as the Stingray accounted for nearly one-third of its $5 billion in revenue. "As a government contractor, our solutions are regulated and their use is restricted," spokesman Jim Burke said.
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  • Local police agencies have been denying access to records about this surveillance equipment under state public records laws. Agencies in San Diego, Chicago and Oakland County, Michigan, for instance, declined to tell the AP what devices they purchased, how much they cost and with whom they shared information. San Diego police released a heavily censored purchasing document. Oakland officials said police-secrecy exemptions and attorney-client privilege keep their hands tied. It was unclear whether the Obama administration interfered in the AP requests. "It's troubling to think the FBI can just trump the state's open records law," said Ginger McCall, director of the open government project at the Electronic Privacy Information Center. McCall suspects the surveillance would not pass constitutional muster. "The vast amount of information it sweeps in is totally irrelevant to the investigation," she said.
  • A court case challenging the public release of information from the Tucson Police Department includes an affidavit from an FBI special agent, Bradley Morrison, who said the disclosure would "result in the FBI's inability to protect the public from terrorism and other criminal activity because through public disclosures, this technology has been rendered essentially useless for future investigations." Morrison said revealing any information about the technology would violate a federal homeland security law about information-sharing and arms-control laws — legal arguments that that outside lawyers and transparency experts said are specious and don't comport with court cases on the U.S. Freedom of Information Act. The FBI did not answer questions about its role in states' open records proceedings.
  • But a former Justice Department official said the federal government should be making this argument in federal court, not a state level where different public records laws apply. "The federal government appears to be attempting to assert a federal interest in the information being sought, but it's going about it the wrong way," said Dan Metcalfe, the former director of the Justice Department's office of information and privacy. Currently Metcalfe is the executive director of American University's law school Collaboration on Government Secrecy project. A criminal case in Tallahassee cites the same homeland security laws in Morrison's affidavit, court records show, and prosecutors told the court they consulted with the FBI to keep portions of a transcript sealed. That transcript, released earlier this month, revealed that Stingrays "force" cellphones to register their location and identifying information with the police device and enables officers to track calls whenever the phone is on.
  • One law enforcement official familiar with the Tucson lawsuit, who spoke on condition of anonymity because the official was not authorized to speak about internal discussions, said federal lawyers told Tucson police they couldn't hand over a PowerPoint presentation made by local officers about how to operate the Stingray device. Federal officials forwarded Morrison's affidavit for use in the Tucson police department's reply to the lawsuit, rather than requesting the case be moved to federal court. In Sarasota, Florida, the U.S. Marshals Service confiscated local records on the use of the surveillance equipment, removing the documents from the reach of Florida's expansive open-records law after the ACLU asked under Florida law to see the documents. The ACLU has asked a judge to intervene. The Marshals Service said it deputized the officer as a federal agent and therefore the records weren't accessible under Florida law.
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    The Florida case is particularly interesting because Florida is within the jurisdiction of the U.S. Eleventh Circuit Court of Appeals, which has just ruled that law enforcement must obtain a search warrant from a court before using equipment to determine a cell phone's location.  
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White House: US not ready to make decision on military action in Iraq | World news | th... - 0 views

  • The White House indicated on Tuesday that it may be some days away from a decision on any US military intervention in Iraq, as senior Democrats expressed growing caution about the risks of being sucked back in to conflict in the country.Amid signs that Barack Obama is treading warily over calls for air strikes against the advance of a Sunni Muslim insurgency, administration spokesman Jay Carney said the president would "continue to consult with his national security team in the days to come," and said that there will also be further consultations with members of Congress, including some closed briefings later this week.Obama met his national security team on Monday evening after announcing a bolstering of the US embassy security presence in Baghdad, but has repeated his concern that military support of the Iraqi government would be of little use without a longer-term political plan to unite the country."The president asked his national security team to develop options, and that effort continues,” Carney told reporters during a briefing on Air Force One.
  • Carney said Obama believed that Iraq’s problems required a political solution, not just a military one. The US believes that the sectarian policies of the Shia-led government of Nouri al-Maliki precipitated the present crisis.
  • At the Pentagon, officials said that they continued to submit military options to the White House and that they were encouraged by resistance to Isis within Iraq. “We also have reason to believe, certainly indications, that the Iraqi security forces are stiffening their resistance and their defense and are coalescing, particularly in and around Baghdad, and that's encouraging,” said Rear Admiral John Kirby, the Pentagon press secretary, who also referenced “Shia militias that are assisting.”Kirby added that Obama has non-military options to respond to Iraq and batted back a suggestion that the internal resistance to Isis relieved the burden of a decision on the administration. “This isn't about breathing space. It's about making measured, deliberate decisions that make the most sense, and it's a complicated issue,” Kirby said.On Tuesday, Carney declined to discuss a timeframe for any intervention, and although it is still possible that a surprise attack could be launched or an immediate US response mounted to any Isis assault on Baghdad, there are signs that pressure for action from Congress may be reversing.
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  • Steny Hoyer, the Democractic whip in the House of Representatives, said there needed to be more thought given toward a long-term plan before military action could be considered. “We have a real stake in this, a real interest in this,” he told NBC. “The question becomes, OK, what do you do? I think that's a much more complicated issue once we decide it has consequences for us, what do we do, I think we’re going to have to talk about that.”Ahead of a classified briefing for a key House panel on Iraq scheduled for Wednesday, there were also other signs of senior Democratic hesitating about launching air strikes against Isis.Adam Schiff, a California Democrat on the intelligence committee, said on Tuesday that an air campaign “will not affect the strategic balance on the battlefield, and is as likely to alienate the local population as it is to accomplish any tactical objective.”Schiff urged Obama to continue providing "intelligence and limited military support to the Iraqi government," conditioned on a nonsectarian Iraqi governing coalition, and pointed to "our limited intelligence" in Iraq as an inhibition on an effective air war.
  • Schiff said that the resistance likely to be mounted against Isis, should it advance further on Baghdad, would render US military intervention “even less vital”. Carl Levin, the Michigan Democrat who chairs the Senate armed services committee, told the Detroit News on Monday that he was not sure air strikes "make sense," saying that "we ought to be mighty damn cautious" before launching them.
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Economy Roundtable - Coast to Coast AM - 0 views

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    "Date: 05-07-14 Host: George Noory Guests: Catherine Austin Fitts, Gerald Celente, George Ure, Robert Zimmerman This special panel discussion on the economy and related topics featured investment advisor Catherine Austin Fitts, trends analyst Gerald Celente, and consultant George Ure. Currently, the financial system is still being pumped with cheap money, such as $45 billion a month in mortgage-backed securities, and interest rates remain at record lows-- but once those interest rates go back up, the economy will tumble, said Celente. Fitts cited the continued inequality and centralization in the economy as hampering growth, while Ure noted that we're in the bottoming process with the Fed, which is trying to print money fast enough so we don't drop into something like the Great Depression. While the US continues its behind-closed-doors propping up of the economy, "I still believe we're going to see something like a panic level by the end of the second quarter," Celente remarked. America used to be the land of opportunity, but now the wealth is concentrated in the hands of the few, he added. Globalization is lowering the wealth of the middle class, and the reality is "we're automating or outsourcing jobs, and putting people on government checks," Fitts commented. Ure, who studies cyclical patterns of the economy or "long waves," said right now we're seeing a "war on cash," with a huge effort to get people into an electronic system, where all their transactions and investments can be tracked. The revelations by Edward Snowden about America's surveillance state has had a depressing effect on US economic growth, as well as inspiring other countries around the world to pull out of the system, Fitts suggested. "We live in a country where the system of creating money has basically been sublet from Congress to the Federal Reserve...and government is wholesale now, in the business of granting different franchises such as in communications and money operations," Ure detail
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DEA Global Surveillance Dragnet Exposed; Access to Data Likely Continues - The Intercept - 0 views

  • Secret mass surveillance conducted by the Drug Enforcement Administration is falling under renewed scrutiny after fresh revelations about the broad scope of the agency’s electronic spying. On Tuesday, USA Today reported that for more than two decades, dating back to 1992, the DEA and the Justice Department “amassed logs of virtually all telephone calls from the USA to as many as 116 countries linked to drug trafficking.” Citing anonymous current and former officials “involved with the operation,” USA Today reported that Americans’ calls were logged between the United States and targeted countries and regions including Canada, Mexico, and Central and South America.
  • The DEA’s data dragnet was apparently shut down by Attorney General Eric Holder in September 2013. But on Wednesday, following USA Today’s report, Human Rights Watch launched a lawsuit against the DEA over its bulk collection of phone records and is seeking a retrospective declaration that the surveillance was unlawful. The latest revelations shine more light on the broad scope of the DEA’s involvement in mass surveillance programs, which can be traced back to a secret program named “Project Crisscross” in the early 1990s, as The Intercept previously revealed. Documents from National Security Agency whistleblower Edward Snowden, published by The Intercept in August last year, showed that the DEA was involved in collecting and sharing billions of phone records alongside agencies such as the NSA, the CIA and the FBI.
  • The vast program reported on by USA Today shares some of the same hallmarks of Project Crisscross: it began in the early 1990s, was ostensibly aimed at gathering intelligence about drug trafficking, and targeted countries worldwide, with focus on Central and South America. It is also reminiscent of the so-called Hemisphere Project, a DEA operation revealed in September 2013 by The New York Times, which dated as far back as 1987, and used subpoenas to collect vast amounts of international call records every day. There is crossover, too, with a DEA database called DICE, revealed by Reuters in August 2013, which reportedly contains phone and Internet communication records gathered by the DEA through subpoenas and search warrants nationwide. The precise relationship between Crisscross, DICE, Hemisphere and the surveillance program revealed by USA Today is unclear. Whether or not they were part of a single overarching operation, the phone records and other data collected by each were likely accessible to DEA agents through the same computer interfaces and search and analysis tools.
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  • A Justice Department spokesman told Reuters Wednesday that “all of the information has been deleted” and that the DEA was “no longer collecting bulk telephony metadata from U.S. service providers.” What the spokesman did not say is that the DEA has access to troves of phone records from multiple sources — and not all of them are obtained from U.S. service providers. As The Intercept’s reporting on Project Crisscross revealed, the DEA has had large-scale access to data covertly collected by the NSA, CIA and other agencies for years. According to NSA documents obtained by Snowden, the DEA can sift through billions of metadata records collected by other agencies about emails, phone calls, faxes, Internet chats and text messages using systems named ICREACH and CRISSCROSS/PROTON.
  • Notably, the DEA spying reported by USA Today encompassed phone records collected by the DEA using administrative subpoenas to obtain data from phone companies without the approval of a judge. The phone records collected by the agency as part of Project Hemisphere and the data stored on the DICE system were also collected through subpoenas and warrants. But ICREACH alone was designed to handle two to five billion new records every day — the majority of them not collected using any conventional search warrant or a subpoena. Instead, most of the data accessible to the DEA through ICREACH is vacuumed up by the NSA using Executive Order 12333, a controversial Reagan-era presidential directive that underpins several NSA bulk surveillance operations that monitor communications overseas. The 12333 surveillance takes place with no court oversight and has received minimal Congressional scrutiny because it is targeted at foreign, not domestic, communication networks.
  • This means that some of the DEA’s access to mass surveillance data — records collected in bulk through subpoenas or warrants — may have been shut down by Holder in 2013. But it is likely that the agency still has the ability to tap into other huge data repositories, and questions remain about how that access is being used.
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    How many ways do I love thee? ... Just a few minutes. I have to consult my haystacks.  'Twas on August 20, 1982 when Ronald Reagan formally declered "War on Drugs," thereby sweeping U.S. Drug Enforcement Administration records under the umbrella of "national security" secrets. Concurrently, a document was produced by the White House that mentioned that the forerunners of today's "fusion centers" would be created to begin trawling government databases for information to wage that war, including medical records held by the then-Veterans Administration. I''ve been keeping an eye on those rascals ever since. Believe me, we have merely scratched the surface of a very few of the Feds' "haystacks." There are very many to go before they're all rooted out into the sunlight.  
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Predatory lending with a smiley face; How tax payer subsidized "loan modification" prog... - 0 views

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    They say California is a harbinger of the future. If so, we should all be thinking about possible safe havens. The article begins with a description of loan modification seminars attended by the same mortgage brokers whose predatory lending practices got us into this fix. At the seminars, these predators learn how to make even more money off of the exact same clients they pushed off the ledge. It's all about fees and high pressure churning techniques. With one very big difference: Obama is banking on tax payer funded "loan modifications" to help struggling homeowners. The ugly truth is that mortgage brokers are the real winners. Just like mortgage brokers, loan mod companies are under no obligation to act in borrowers' financial interests, short- or long-term. Under California's model contract, which brokers are encouraged to emulate in their dealings with borrowers, almost any change to a mortgage is an acceptable result, whether or not it saves a borrower money. And while the client has to accept the proposed deal in order for the company to get paid in full, the sales forces at these firms are veterans of pressure pitches to people in tough financial situations. Both Carlson and a spokesman for Mortgage Bailout Assistance indicate that their clients almost invariably take the offers they are given. The proverbial fox is helping the hens hold on to their coops, and not just in California. Seventeen states now have laws on the books effectively banning "foreclosure consultants," but most make an exception for mortgage brokers. As consumer complaints about fraudulent loan mod operations proliferate across the country, other government officials, including New York's City Council, are now following California's lead and exploring the creation of an official registry of mod brokers.
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Jenkins: Obama vs. the 1980s - WSJ.com - 0 views

  • "World Tax Reform: A Progress Report," his 1988 volume showed how country after country was following the U.S. in adopting Reagan-style rate-flattening and tax simplification.
  • Mr. Obama now craves a federal infrastructure bank, apparently still unable to see how growth might emerge except by bureaucrats bossing around tax dollars.
  • Simpson-Bowles Commission—proposed a Reagan-style tax reform
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    excerpt:  Instead of a "stimulus" to create jobs by financing useful investments that would have paid a growth dividend in the future, we got a debt-fueled permanent expansion of entitlements and the size of government. In health care, instead of reforms to encourage competent consumers not to treat health care as a free lunch, we got a doubling down on health-care free lunchism. In banking, instead of new incentives to cause creditors to pull in the reins on risk-taking banks, we got a formalization of too big to fail. All economic crises begin differently-this one began in housing-but eventually they morph into the same old crisis of forgetting what works. Think about the last big crisis of faith in American capitalism in the early 1980s. The panic was eventually crystallized in dueling Harvard Business Review articles by George Gilder and Charles Ferguson. Mr. Ferguson, an MIT-based consultant, argued the U.S was dooming itself to vassalage unless Washington brushed aside small, poorly-funded entrepreneurs and concentrated regulatory favors and subsidies on giant firms like IBM, AT&T, Digital Equipment and Kodak. Mr. Gilder championed the then-emerging Silicon Valley paradigm. He quoted technologist Carver Mead: "We depend on the innovations of the citizens of a free economy to keep ahead of the bureaucrats and the people who make a living on control and planning. In the long term, it's the element of surprise that gives us the edge over more controlled economies." Who won hardly needs to be belabored except that it apparently does need to be belabored. Almost everything Mr. Obama understands as pro-growth consists of bets on "bureaucrats and the people who make a living on control and planning."
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Bruce Krasting: The Fed bombed the market - I ask, "Why?" - 1 views

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    This is an interesting post.  The WSJ published an article yesterday claiming that the Federal Reserve Bankster Cartel was looking at European Banksters and assessing the quality of "funding positions" and asset status for their USA branch operations.  The Fed Banksters are also consulting with EU regulators about European Bankster concerns. The WSJ article (http://on.wsj.com/nugr7s) triggered a massive market crash on Thursday.  Over $2 Trillion was washed away in the panic following the publication of this WSJ story.  That's on top of the $6 Trillion lost following the Obama Debt-Man-Walking deal with Congress. But here's where it gets interesting.  Bruce Krasting contacted Zero Hedge's Tyler Durden and got this reply; "the story is a Fed plant". Tyler Durden believes that the Feds want to create a world economic crisis to justify a massive QE3 where tens of trillions of dollars would be created and distributed to the worlds Banksters.  This follows the $16.1 Trillion created and distributed to the world's Banksters in 2009 - 2010 under QE1 and QE2. Incredible.  Just a few days ago Republican presidential candidate Gov Rick Perry warned the Fed Banksters not to flood the market with a new QE3.  No doubt what Perry has in mind is that the Fed will flood the world's economy with dollars, debasing the currency even further, but providing a phony and very temporary veil of prosperity - just enough to get Obama into a second term.   Not a bad concept for the Banksters since Obam has proven himself time and again as the bes tfriend the Banksters have ever had.  Obama has overseen the transfer of over $23 Trillion of USA taxpayer debt to the world Bankster community.
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The 25 Billion Dollar Secret: The NY Fed, Goldman & The AIG Cover-Up (GS, AIG) - 1 views

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    WOW!  Everyday brings new revelations.  We've been robbed! excerpt:  Now we know: Geithner and Friedman interceded on behalf of Goldman and Wall Street (Merrill received $6.2 billion, Societe General - a whopping $16.5 billion) to deliver a stealth bailout, one that wouldn't need Congressional approval, and even better wouldn't require the counterparties to pay any of it back NOR would it require that they issue shares, warrants or any other instrument to AIG (taxpayers) in return for more than $32 billion in free money. In any other time, a sitting Treasury Secretary who interceded on behalf of Wall Street to screw taxpayers out of tens of billions, would not be sitting long.  But Democrats control both the House and Senate, so there are no investiagtions (Issa's letter aside).  Traditional media is content not to rock the boat for President Banks Obama lest they be shunned by their peers, and ultimately, 99% of TV and print journalists don't understand the issues well enough to complain with any conviciton, especially against the merry backdrop of the Dow rising and their deflated 401ks beginning to show life. They fall prey to fear and weakly submit to duplicitous hyperbole (Paulson threatening martial law and blood in the streets), when they should instead be consulting with the objective, critical voices who foresaw the crisis and were prepared with alternative solutions when it finally came (Stiglitz said instead of TARP, create new banks). A pox on Congress, President Banks Obama, Bush, Paulson, Friedman, Bernanke and Geithner (plus Greenspan and Rubin).  You may have gotten away with it for now, but I would wager there are a few million of us, roughly, who do understand everything that went down last Fall, and we're not amused.  We're not just going to let this one pass, and we will not stop filling the vast interweb with the truth (and our distaste and vitriol for your wretched souls) day after day, week after week, all over message boards and fin
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The Vineyard of the Saker: Mikhail Khazin Q&A with the Saker Community - 0 views

  • t is a huge pleasure, and honor, for me to present you today with the Q&A between Mikhail Khazin and the Saker Community.  For those who might have missed it, here it is (including a biography of Mr Khazin): http://vineyardsaker.blogspot.com/2014/10/exclusive-mikhail-khazin-q-with-saker.html
  • Considering the importance of this document, I have decided to try to make it as easy to access, copy and distribute as possible.  First, I have made it available in 4 formats: ODT, PDF, HTML and DOCX.  Second, I have uploaded it to both the Internet Archive and Mediafire.  Here are the links: https://archive.org/details/KhazinQAENFinal https://www.mediafire.com/#t713dfdpadk0z Third, you will find below the text pasted in from the HTML file.
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    This is a must-read if you want to learn about Russia's internal politics as they affect Russian economic foreign policy.  There is a video of a roundtable discussion including Khazin touching on the same topics here. http://goo.gl/3E4QWL (I've borrowed the clip below from that page.) Mikhail Khazin is a mathematician and economist in Russia (graduated from Moscow State University in 1984). After working in various government and banking positions, he was discharged from his position as Deputy Chief of the Economic Directorate for attempting to fight corruption during Russia's failed experiment at privatization in 1997. Since 2000, he has worked as a consultant. He's an acquaintance of President Putin and is well informed of Kremlin politics, including the behind-the-scenes power struggles.  Besides being an expert economist, he seems to have a knack for predicting major world events. In 2000 he predicted the 2008 economic collapse (having previously predicted Russia's 1998 default). Then, on 10 September 2001, he predicted large-scale, U.S.-organized terror attacks as a cover for the States' economic deterioration. Now, in August of this year he predicted the end of a period of consumption stimulated by credit and a fresh round of bankruptcies and unemployment in the last quarter of 2014.  Back in September he had this to say about the current 'dollar economy': "There is nothing we will gain anymore from the dollar model. It's run dry."
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Syria ready to discuss Russia peace plan talks, opposition dismissive | Reuters - 0 views

  • Syria said on Saturday it was willing to participate in "preliminary consultations" in Moscow aimed at restarting talks next year to end its civil war but the Western-backed opposition dismissed the initiative. Two rounds of peace talks this year in Geneva failed to halt the conflict which has killed 200,000 people during more than three years of violence and there was little sign of the latest move gaining traction.Syrian state television quoted a source at the foreign ministry saying: "Syria is ready to participate in preliminary consultations in Moscow in order to meet the aspirations of Syrians to find a way out of crisis."
  • But there are many obstacles to peace. The most powerful insurgent group, the hardline Islamic State, controls a third of Syria but has not been part of any initiative to end the fighting.Other rebel factions are not unified.The opposition is also suspicious of Russian-led plans as Moscow has long backed President Bashar al-Assad with weapons.Hadi al-Bahra, head of the Turkey-based opposition National Coalition, met with Arab League Chief Nabil Elaraby in Cairo on Saturday and told a news conference "there is no initiative as rumoured"."Russia does not have a clear initiative, and what is called for by Russia is just a meeting and dialogue in Moscow, with no specific paper or initiative," he was quoted by Egyptian state news agency MENA as saying.The opposition said after the failed "Geneva 2" talks in February that Damascus was not serious about peace.
  • Syrian state news agency SANA said on Saturday the Moscow talks should emphasise a continued fight against "terrorism", a term it uses for the armed opposition.Members of Assad's government say the opposition in exile is not representative of Syrians and instead says a small group of opposition figures who live in Damascus, and are less vocal against the president, should represent the opposition.Russian Foreign Minister Sergei Lavrov said this month that he wanted Syrian opposition groups to agree among themselves on a common approach before setting up direct talks with the Damascus government.But Lavrov did not specify which opposition groups should take part.
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    It's no surprise that the figurehead U.S.-backed moderate Syrian opposition would reject the Russian peace overtures. But note carefully that Syria wants to negotiate with the true moderate opposition, not the U.S. puppet group. I can see Russia engineering an agreement that includes replacing President Assad with another elected leader in a power-sharing arrangement with the opposition. And with Assad on the way out, there's no more "evil dictator" for the U.S. to villify.  
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Nursery staff to be forced to report toddlers at risk of becoming terrorists - UK Polit... - 0 views

  • Nursery staff will be forced to report toddlers at risk of becoming terrorists under plans drawn up by the Home Office. It is part of the department’s consultation over ways to enhance its anti-terrorism strategy, Prevent.Critics have dismissed the proposals as being unnecessarily draconian and turning staff, who are meant to be caring for youngsters, into spies.The consultation document on the Prevent Strategy states: “Senior management and governors are expected to assess the risk of pupils being drawn into terrorism, including support for the extremist ideas that are part of terrorist ideology.”
  • It continues, staff are expected to “identify children at risk of being drawn into terrorism” and “challenge extremist ideas which can be used to legitimise terrorism”.The Home Office said it would not expect the hypothetical situation of a young child being taught that non-Muslims are wicked to be ignored. Equally, anti-Semitic comments made in front of nursery workers should be reported, the department added.But opponents of the plans are unsure how they will work in practice.
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    Incredible.
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New Disclosures Highlight Ashton Carter's Ties to Investors - 0 views

  • Ashton Carter, President Obama’s nominee for Secretary of Defense, received $20,000 last year from one of the top consulting firms offering political intelligence to investors. And his wife’s investments in the defense industry may at times require him to stay on the sidelines while he serves at the Pentagon. Those are among the tidbits revealed in new disclosure reports posted online by the Office of Government Ethics. Last week, the Project On Government Oversight wrote that Carter, “[w]hile working in the private sector...has held plum positions on government advisory boards that called for reforms with potential ramifications for his defense industry clients and other companies that receive [Department of Defense] dollars.” Like many members of Washington’s policy establishment, he has straddled the public and private sectors, keeping a foot in both worlds with the potential to gain inside information on, and influence over, government policy. Carter’s latest ethics disclosures show another way for former government officials to cash in: giving speeches sponsored by companies in the investment world. The new disclosures detail Carter’s consulting and speaking engagements since he stepped down as Deputy Secretary of Defense in late 2013.
  • Several years ago, while serving as the Pentagon’s chief weapons buyer, he spoke to investors about mergers in the defense industry. “He told the assemblage that the Pentagon would frown on mergers among the five giant military contractors—the so-called primes: Lockheed Martin, General Dynamics, Raytheon, Northrop-Grumman and Boeing,” according to a 2011 article by New York Times business columnist Joe Nocera. “However, he added, the Defense Department was going to encourage mergers among smaller military contractors. And, he said, ‘we will be attentive’ to innovative smaller companies that provide services (as opposed to weapons systems) to the Pentagon.” “For the last few months, beginning with a secret meeting last October, Defense Department officials have been making the rounds of analysts and investors,” Nocera wrote. “Their main message, to put it bluntly, is that even in an era of tighter budgets, the Pentagon is going to make sure the military industry remains profitable. ‘Taxpayers and shareholders are aligned,’ Mr. Carter intoned” in his remarks.
  • Carter, his wife, the Gerson Lehrman Group, and a Pentagon spokesperson did not respond to POGO’s requests for comment, but we will update this post with any comments they provide. Carter’s confirmation hearing is set to take place in early February, according to Politico.
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Syria in the Crosshairs - Obama Confirms Airstrikes Will Not Be Limited to Iraq | SCG News - 0 views

  • One year ago the Obama administration was doing their very best to build up public support for U.S. military intervention in Syria. Even though that attempt failed, no one who has been following this crisis closely believed for a moment that this was the end. They would regroup and try again from another angle. The angle they chose was surprising. Iraq has been off the media radar for so long that almost no one was factoring it in as an important geopolitical variable. ISIS (or ISIL) changed that. In our video "The Fall of Iraq What You're Not Being Told" we covered the history of U.S. tinkering in Iraq dating back to 1963, and showed how the U.S. government's push to topple Assad by funding and arming extremists in Syria enabled ISIS to gain a foothold in the region. At the end of that video we pointed to how this latest crisis in Iraq was likely to be used as a pretext for U.S. strikes in Syria.
  • The Obama administration confirmed this when questioned yesterday on whether the U.S. military intervention in Iraq would be extended to Syria. Their response: “We don't restrict potential U.S. action to a specific geographic space,” "The president's made clear time and again that we will take action as necessary, including direct U.S. military action, if it's necessary to defend the United States against an imminent threat," the official said. "Clearly we're focused on Iraq. That's where our ISR [intelligence, surveillance and reconnaissance] resources have surged. That's where we're working to develop additional intelligence," the official added. "But the group [ISIS], again, operates broadly and we would not restrict our ability to take action that is necessary to protect the United States." Oh, and this time Obama is not going to ask for permission from Congress. No one is talking about how the Syrian government (and the Washington's desire to topple it) fits into this, but once the U.S. is carrying out airstrikes in Syrian territory, it would be trivial to expand the scope of the mission to include Syrian military targets. That way there would be no need for debate on the topic. The public would just find out we were at war after the fact (and probably via youtube). It's a backdoor approach.
  • Another variable that has changed in the equation since last year is Russia's involvement. Due to the crisis in Ukraine, Russia has been placed on the defensive diplomatically, and as of yet it seems to be too tied up with disputes with Kiev to take an active role in the deliberations over ISIS. In the first round of the Syrian crisis both China and Russia warned the U.S. several times against military intervention, and Russia threatened that it could lead to a nuclear conflict. At this point, it's not clear whether Russia and China see where Washington is planning to take this, or if they will back up their previous threats when the time comes. It is also yet to be seen whether the relentless anti-Russia propaganda campaign that western media outlets have been pushing since the Ukraine crisis will affect Putin's ability to influence the outcome diplomatically. The annexation of Crimea will definitely be used to discredit Putin if he attempts to block airstrikes in Syria.
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    Obama has Syria in his rocket-sights again, but no consultation with Congress this time. 
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Operation to retake Mosul has already started, says US envoy - Iraqi News - 0 views

  • The U.S. envoy to the international coalition Brett Magrec, said on Wednesday, that the liberation operation of Mosul has started, already, while noted that the international coalition is holding consultations to coordinate with the Peshmerga forces as well as Sunni forces as part of the preparations to attack ISIS inside Mosul. Magrec said in a press statement obtained by IraqiNews.com, “The coalition will work this year to accelerate the raids against [ISIS] in order to achieve more progress,” noting that, “The coalition will focus on retaking Mosul in its operations.” He added, “The operation is a major challenge, especially because about one million people live in Mosul,” pointing out that, “The coalition forces is holding consultations to coordinate with Peshmerga as well as Sunni forces as part of the preparations to attack ISIS inside Mosul during the operation liberation that the coalition has already started.”
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Martin Shkreli Arrested on Securities Fraud Charges - 0 views

  • Martin Shkreli, a boastful pharmaceutical executive who came under withering criticism for price gouging vital drugs, denied securities fraud charges on Thursday following an early morning arrest, and was freed on a $5 million bond. While the 32-year-old has earned a rare level of infamy for his brazenness in business and his personal life, what he was charged with had nothing to do with skyrocketing drug prices. He is accused of repeatedly losing money for investors and lying to them about it, illegally taking assets from one of his companies to pay off debtors in another. “Shkreli essentially ran his company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company,” Brooklyn U.S. Attorney Robert Capers said at a press conference.
  • Evan Greebel, a New York lawyer, who is alleged in the federal indictment to have helped Shkreli in his schemes, was also arrested and charged. Like Shkreli, he pleaded not guilty, and he was freed on a $1 million bond. Both men and their lawyers declined to comment after their court appearance.
  • Read the full text of the indictment here In the federal indictment and a complaint by the Securities and Exchange Commission, authorities say Shkreli began losing money and lying to investors from the time he began managing money. In his mid-20s, he got nine investors to place $3 million with him and at one point he had only $331. Securities fraud is hardly unheard of on Wall Streeet and the amounts involved here are nowhere near on the scale of Bernie Madoff. But Shkreli’s case has drawn such attention because of his defiant price-gouging and his own up-by-the-bootstraps history. The son of immigrants from Albania and Croatia who did janitorial work and raised him and his brothers in working-class Brooklyn, Shkreli seemed at first to embody the American dream and then to mock it. After dropping out of an elite Manhattan high school, he worked as an intern for Jim Cramer’s hedge fund as a 17-year-old and quickly impressed with his ability to call stocks. He created hedge funds, taught himself biology and, after earning a BA at Baruch College in New York City, began hedge funds investing in biotech.
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  • He became famous within a certain world but entered public consciousness after he raised the price more than 55-fold for Daraprim in September from $13.50 per pill to $750. It is the preferred treatment for a parasitic condition known as toxoplasmosis, which can be deadly for unborn babies and patients with compromised immune systems including those with HIV or cancer. His company, Turing Pharmaceuticals AG, bought the drug, moved it to a closed distribution system and instantly drove the price into the stratosphere. He drew shocked rebukes from Congress, doctors and presidential candidates, and brought public attention to the rising prices of older drugs. Donald Trump called Shkreli a “spoiled brat,” and the BBC dubbed him the “most hated man in America.” Bernie Sanders, the Democratic presidential candidate, rejected a $2,700 campaign donation from him, directing it to an HIV clinic. A spokesman said the campaign would not keep money “from this poster boy for drug company greed.” All the criticism seemed at first to have some impact and Shkreli said he would lower the price. Then he reneged. When Hillary Clinton tried one more time last month to get him to cut the cost, he dismissed her with the tweet “lol.” At a Forbes summit in New York this month, wearing a hooded sweatshirt, he said if he could have done it over, “I probably would have raised the price higher,” adding, “My investors expect me to maximize profits.”
  • Shkreli did further damage to his public image with other acts and boasts. He spent millions on the only copy of a Wu-Tang Clan album that music fans are desperate to hear and then told Bloomberg Businessweek that he had no immediate plans to listen to it. He takes often to Twitter and message boards, bragging about his business strategies, musical tastes and politics; he live-streams from his office for long stretches. The SEC complaint and federal indictment lay out a series of schemes and cover-ups carried out by Shkreli. Capers said authorities began investigating him as early as 2014.
  • Barely 23, he was managing hedge fund Elea Capital in New York and lost it all in 2007. Around then, a trade with Lehman Brothers ended with a $2.3 million judgment against him, prosecutors said. In 2010, he lost his clients’ $3 million investment in his new fund, MSMB Capital. In 2011, he bet that shares of Orexigen Therapeutics Inc. would fall and wound up owing $7 million to his broker, Merrill Lynch, authorities said. He couldn’t pay, and he, an unnamed accomplice and MSMB Capital eventually extinguished the debt with a $1.35 million settlement, they said. Part of that money came from his next firm, authorities said. After the collapse of MSMB Capital, Shkreli launched MSMB Healthcare with about $5 million from 13 investors. He paid himself “far in excess” of the agreed-upon 1 percent management fee and 20 percent profit incentive, according to the SEC.
  • Shkreli then used cash from MSMB Healthcare to invest in Retrophin, the pharmaceutical company he founded in 2011, even though it “had no products or assets,” prosecutors said. Later, he used the assets of Retrophin to repay angry investors in his hedge funds, prosecutors said. Shkreli is confident that he will be cleared of the charges, according to a statement on his behalf. Shkreli is particularly disappointed that his litigation with Retrophin has become a government enforcement matter, according to the statement. He also denied the charges regarding the MSMB entities, which he said involve complex accounting matters that prosecutors and the SEC fail to understand, according to the statement. “It is no coincidence that these charges, the result of investigations which have been languishing for considerable time, have been filed at the same time of Shkreli’s high-profile, controversial and yet unrelated activities,” according to the statement. “The government suggested that Mr. Shkreli was involved in a Ponzi scheme. Ponzi victims do not make money, yet Mr. Shkreli’s investors enjoyed strong results.”
  • As Shkreli’s losses mounted, so did his lies. He fabricated portfolio statements and, with his lawyer’s help, deceived the SEC and outside accountants. He backdated records, manufactured a phony loan agreement between Retrophin and a hedge fund, and created sham consulting agreements with Retrophin as a way to route the company’s cash to his earlier investors. Greebel, the arrested lawyer, made sure Retrophin’s outside accountants were unaware of Shkreli’s financial maneuvers and helped him concoct the consulting agreements used to repay the hedge fund investors, the U.S. said. The cases mirror a lawsuit brought by Retrophin. Shkreli blithely dismissed his old company’s claims, saying, “The $65 million Retrophin wants from me would not dent me. I feel great. I’m licking my chops over the suits I’m going to file against them.” Earlier, he had denied wrongdoing in a post on InvestorsHub after Retrophin disclosed it had received a subpoena from federal prosecutors and the preliminary findings from its own investigation of Shkreli. He called the company’s allegations “completely false, untrue at best and defamatory at worst.”
  • “Every transaction I’ve ever made at Retrophin was done with outside counsel’s blessing,” he said on the investment blog in February, without identifying the lawyers. When Shkreli was working for Cramer’s firm, he was still a teenager. After recommending successful trades, Shkreli eventually set up his own hedge fund, quickly developing a reputation for trashing biotechnology stocks in online chatrooms and shorting them, to enormous profit. Widely admired for his intellect and sharp eye, he set up Retrophin to develop drugs and acquire older pharmaceuticals that could be sold for higher profits. Turing, which is less than a year old and has raised $90 million in financing, has followed a similar strategy with the purchase of drugs, including Daraprim. Shkreli recently bought a majority stake in KaloBios Pharmaceuticals Inc. after Turing received a warning from the New York attorney general that the distribution network for Daraprim may violate antitrust laws. State officials made their concerns known to Turing and Shkreli in an Oct. 12 letter obtained by Bloomberg.
  • KaloBios recently acquired the license for benznidazole, a standard treatment for Chagas, a deadly parasitic infection most common in South and Central America. The firm announced plans to increase the cost from a couple hundred dollars for two months to a pricing structure like that for hepatitis-C drugs, which can run to nearly $100,000 for 12 weeks.
  • With the federal charges and regulatory actions, Shkreli could be banned from running a public company, which could put the future of KaloBios into question. Trading in KaloBios shares was halted after the stock fell 53 percent. It’s less clear what the impact could be on Turing, which is closely held.
  • Federal authorities will have to ask a judge to impose an asset freeze if they want to guarantee Shkreli doesn’t dispose of ill-gotten gains. The charges suggest that a small group of health-care firms—ones that acquire the rights to drugs and significantly increase their prices—is drawing the scrutiny of regulators and prosecutors, with a possible chilling effect on aggressive drug-pricing strategies. Legislators are already paying attention. A hearing of the Senate Special Committee on Aging on Dec. 9 scrutinized such tactics. Before Shkreli started Turing, Retrophin raised the price of Thiola, used to treat a rare condition causing debilitating recurrences of kidney stones, from $1.50 a pill to $30. “Some of these companies seem to act more like hedge funds than traditional pharmaceutical companies,” said Senator Susan Collins, a Maine Republican who ran the recent hearing. George Scangos, CEO of biotechnology giant Biogen Inc., went further, saying in an interview, “Turing is to a research-based company like a loan shark is to a legitimate bank.”
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    Couldn't happen to a nicer guy.
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