Whistleblower says BofA defrauded HAMP

By Jessica Dye - NEW YORK, March 7 | Wed Mar 7, 2012

(Reuters) - Bank of America NA prevented homeowners from receiving mortgage-loan modifications under a federal program in order to avoid millions of dollars in losses while benefitting from financial incentives for participating in the program, according to a complaint unsealed in federal court Wednesday.

The suit is the second whistleblower complaint unsealed so far with apparent ties to the $1 billion False Claims Act settlement announced by Bank of America and the U.S. Attorney's Office for the Eastern District of New York on February 9.

The Bank of America settlement is also part of the sweeping $25 billion agreement reached between state and federal authorities.

Final settlement documents have yet to be filed in the BoA settlement, which the U.S. Attorney's Office said was the largest ever False Claims Act payout related to mortgage fraud.

The settlement resolved claims that Bank of America's Countywide Financial subsidiaries defrauded the Federal Housing Administration by inflating appraisals used for government-insured home loans, as well as claims involving the Home Affordable Modification Program, a federal program to help American homeowners facing foreclosure.

The complaint unsealed Wednesday was filed by whistleblower Gregory Mackler, a Colorado resident who said he worked alongside Bank of America executives while an employee at Urban Lending Solutions, a company to which Bank of America contracted some of its HAMP work.

While working at Urban Lending, Mackler said he saw BofA and its loan servicing subsidiary, BAC Homes Loans Servicing LP, implement "business practices designed to intentionally prevent scores of eligible homeowners from becoming eligible or staying eligible for permanent HAMP modification."

The bank and its agents routinely pretended to have lost homeowners' documents, failed to credit payments during trial modifications and intentionally misled homeowners about their eligibility for the program, the complaint alleged.

BoA let through just enough HAMP modifications to avert suspicion and allay congressional critics, while not enough to incur any substantial losses to its own bottom line, according to the complaint.

"In other words, BoA has had it both ways. BoA has continued to maximize the value of its mortgage portfolio with anti-HAMP modification practices and managed to make money by committing fraud on homeowner," the lawsuit said.

A lawyer for Mackler could neither confirm nor deny that the complaint was tied to the settlement. A spokesman for the U.S. attorney's office and a representative for Bank of America declined to comment.

In February, a whistleblower complaint was unsealed from Kyle Lagow, a former employee in a Countrywide appraisal unit which detailed allegations of Countrywide's "corrupt underwriting and appraisal process." Bank of America purchased Countywide in June 2008.

Under the False Claims Act, successful whistleblower complaints can earn that whistleblower up to 25 percent of the settlement amount.

According to the docket, the U.S. Department of Justice has until March 16 to decide whether to intervene in both the Mackler and Lagow case. The case is United States of America v. Bank of America NA et al., in the U.S. District Court for the Eastern District of New York, no. 11-3270.

Cancer Warning: Coke And Pepsi Change Recipe

Friday March 09, 2012 - SKY News

Coca-Cola and Pepsi are changing the recipes for their soft drinks to avoid being forced by law to put a cancer warning on the label.

The caramel colouring in the drinks will contain lower levels of 4-methylimidazole, which has been added to the list of carcinogens in California law.

Coca-Cola's recipe is being changed across the US - but will not be changed in Britain or the rest of Europe.

While we believe that there is no public health risk that justifies any such change, we did ask our caramel suppliers to take this step so that our products would not be subject to the requirement of a scientifically unfounded warning~~Diana Garza-Ciarlante, from Coca-Cola

Under the legislation, drinks containing a certain level of carcinogens must bear a cancer warning label.

Coca-Cola and PepsiCo account for almost 90% of the fizzy drinks market in America.

The changes have already been made for drinks sold in California.

The companies said the new recipes would be rolled out across the US to streamline their manufacturing processes.

Diana Garza-Ciarlante, a spokeswoman for Coca-Cola, said: "While we believe that there is no public health risk that justifies any such change, we did ask our caramel suppliers to take this step so that our products would not be subject to the requirement of a scientifically unfounded warning."

The company later said that while its manufacturers had been asked to change the caramel ingredient, its "secret formula" was not being altered.

The American Beverage Association said the new standard was based on one study linking the chemical to cancer in mice and rats, but added there was no evidence showing that it causes cancer in humans.

The Food and Drug Administration said a person would have to drink more than 1,000 cans a day to reach the doses administered that have shown links to cancer in rodents.

What You Should Know About the Company Pushing Genetically Engineered Salmon on Consumers

If approved AquAdvantage would be the first GE animal greenlighted for human consumption.

By Ari LeVaux, AlterNet
Posted on March 7, 2012

AquaBounty Technologies, maker of genetically engineered salmon, is almost out of money. It's been more than two decades since the prototype of its AquAdvantage salmon was spliced into existence, and a decade since AquaBounty applied for FDA approval, but the fish remains on the sidelines of a salmon-hungry market.

The approval process is the first use of FDA's guidelines for GE animals, and if approved AquAdvantage would be the first GE animal greenlighted for human consumption. Further complicating matters, the FDA chose to treat the salmon as a "New Animal Drug," rather than a food. The drug per se is the genetically engineered part of each piece of AquAdvantage DNA, and is found in every cell of the fish.

The AquAdvantage salmon is an Atlantic salmon with genes inserted from a Chinook salmon and an ocean pout. The Chinook gene codes for growth hormone, and the pout gene keeps the Chinook gene locked in the "on" position. The extra growth hormone helps the AquAdvantage salmon reach market size twice as fast as non-GE salmon.

The approval process hasn't moved significantly since September 2010, when FDA announced it would redo a previous environmental assessment on the fish. The assessment is problematic because the fish aren't produced in the U.S. Eggs fertilized on Prince Edward Island, Canada, are shipped to a containment facility in interior Panama.

Meanwhile, the regulation of AquAdvantage salmon as a new animal drug, rather than as food, is causing side effects of its own. On February 8, an alliance of consumer advocacy groups submitted a petition to FDA requesting that AquAdvantage salmon be regulated as a food.

FDA regulation as a food additive is called for, says the petition, in cases where "breeding or selection through genetic engineering reasonably expects to alter the substance's nutritive value or the concentration of constituents."

One such constituent is IGF-1, a hormone found in some animal products that's linked to cancer in high doses. The petitioners suspect AquAdvantage salmon of harboring elevated levels of IGF-1, and challenge AquaBounty's claim that IGF-1 levels in AquAdvantage salmon are no greater than in normal salmon. The petition says AquaBounty's own data suggest IGF-1 levels could be higher in the GE salmon.

Since the fish is being considered as a new animal drug, the scientific issues around AquAdvantage salmon are being reviewed by FDA's Veterinary Medicine Advisory Committee (VMAC). The VMAC has been criticized for not containing experts in relevant fields, like allergenicity, or endocrinology. "Most of the people on VMAC are veterinarians that deal with large animals," said Michael Hansen, chief scientist of the Consumers Union, by phone.

Two weeks before the most recent VMAC meeting, in September 2010, FDA announced it considered AquAdvantage salmon to be safe. Huge public protests filled the unusually short 14-day comment period that followed. At the September VMAC meeting it was announced that a new environmental assessment would be done.

According to the transcript of the VMAC meeting, Dr. Gary Thorgaard of Washington State University said: "I would not feel alarmed about eating this kind of fish certainly. I am not worried about it." Nonetheless, Thorgaard, a fish geneticist, voiced concern about the environmental risk of an AquAdvantage salmon escaping into the wild, and endorsed the idea of a new EA.

Earlier in the meeting Dr. Erik Silberhorn, who produced an environmental safety assessment on behalf of AquaBounty, was asked for information on native fish and amphibians in the area surrounding the grow-out facility in Panama.

"No I do not have information on native fish ..." Silberhorn replied. "The assessment of the local environment is still under the jurisdiction of the Panamanian government, and the same thing would occur in Canada."

It's appropriate that Panama and Canada should be in charge of protecting their own environments. But will they? And when the "drugs" in question can swim thousands of miles across international borders and potentially mate with fish from elsewhere, a fish pharm becomes a matter of global reach and responsibility. If it gets approved in Panama, where will the next facility be?

AquaBounty's method for sterilizing its salmon is 98.9 percent effective, according to its own data. The environmental significance of that fertile 1.1 percent was compelling enough to help AquaBounty get a $500,000 FDA grant, in September 2011, to improve its sterilization practices.

Oddly, the sterility numbers the company reports far exceed the FDA requirement of 95% sterility. If the company is already exceeding the threshold by nearly four percentage points, why would it need grant money to further improve sterility techniques?

Things aren't adding up on AquaBounty's balance sheet either. On March 22, shareholders will vote on a proposed restructure to trim costs, raise operating capital, and continue waiting out the FDA approval process. A private sale of stock to company insiders will raise enough funds to float the company for 10 months more of its upstream voyage.

AquaBounty acknowledged in a February 22 letter to shareholders it "does not expect significant sales until 2014 and thus anticipates a need to raise further funds before that time." This raises the question: why fundraise for 10 months when you need, in a best-case scenario, about two years?

AquaBounty stock currently sits at $4 a share, down from $150 in 2006, when the company went public. The last time ABTX showed any life was in August, 2010, when the FDA announced it considered AquAdvantage safe. The stock had shot from $4 to $25 in days, before settling back down after the VMAC meeting, two weeks later, when the significance of a new EA set in.

More positive remarks from FDA could send the stock back up again, giving AquaBounty the opportunity to raise more capital. Maybe that's what AquaBounty is hoping will happen in the next ten months. Or perhaps the company is biding its time to see who wins the election, or is waiting for another FDA grant to come in. Or maybe 10 month's worth is all the money AquaBounty could raise at this juncture, which wouldn't bode well for its future stability.

AquaBounty did not respond to requests for comment, so we're stuck guessing why, after a 23-year haul, it's kicking the can ten months down the road.

The Precarious Jobs Recovery

Friday, March 9, 2012 by Robert Reichby Robert Reich


February’s 227,000 net new jobs – the third month in a row of job gains well in excess of 200,000 – is good news for President Obama and bad news for Mitt Romney.

Jobs are coming back fast enough to blunt Republican attacks against Obama on the economy and to rob Romney of the issue he’d prefer to be talking about in his primary battle against social conservatives in the GOP.

But jobs aren’t coming back fast enough to significantly reduce the nation’s backlog of 15 million jobs. That backlog consists of 7 million lost during the recession and another 4.7 million that needed to have been added just to keep up with the growth of the working-age population since the recession began. And another 3 million outsourced overseas by corporations in cost-cutting efforts.

If the American economy continues to produce jobs at the rate it’s maintained over the last three months, averaging 245,000 per month, the backlog won’t be whittled down for over five years — long after Barack Obama finishes his second term, should voters grant him another.

But whether even that rate continues depends largely on whether consumer demand can be revived. Spending by American consumers is 70 percent of U.S. economic activity. But so far, spending is anemic.

American consumers have replaced worn-out cars and appliances, but little else. They haven’t had the dough. Their wages are still falling, adjusted for inflation. The value of their homes – most consumers’ single biggest asset – continues to drop.

Home values are down by an average of a third from their 2006 peak. Consumers understandably feel far poorer as a result. Declining home prices also mean consumers can’t use their homes as collateral for new loans, as they did before 2008. And even with low interest rates, refinancing is difficult.

Corporate profits are up but the money isn’t flowing to American workers. The ratio of profits to wages is the highest on record – since the government began keeping track in 1947. Not only has the median wage continued to drop, adjusted for inflation, but a far smaller share of working-age Americans is now employed (58.6 percent) than was employed five years ago (63.3 percent). Today’s employment-to-population ratio isn’t much higher than it was at its lowest point last summer, when it dropped to 58.2 percent.

The major driver of the U.S. economy over the past several months hasn’t been consumer spending. It’s been businesses rebuilding depleted inventories. Wholesalers increased their stockpiles again in February, bringing them up almost a quarter from their low in September 2009.

But businesses won’t continue to rebuild inventories unless consumers start buying again. big-time. And consumers won’t resume spending as they did before the recession until they’re far better off financially.

Yet how can they be sufficiently better off when their major asset has shrunk so much and when so few of the economic gains are going to them?

This is the central paradox at the heart of the American economy today. If it’s not resolved, the jobs recovery will stall, as it did last spring.

A year ago, remember, we had another three-month run of good job numbers. Last February, March, and April saw net gains of more than 200,000 jobs a month. But that job boomlet abruptly ended.

At the time most observers blamed the stall on external events – the Japanese earthquake, Europe’s gathering debt woes, and higher gas prices. In reality, it stalled because of the shallow pockets of American consumers.

Another stall this time might be blamed on any number of external events – slower growth in China and India, the unraveling of Europe’s debt-crisis deal, and higher gas prices.

But if another stall occurs, the real reason will be Americans once again ran out of money.

The Misinformation Machine

Friday, March 9, 2012 by MediaCitizen
by Tim Karr


Dirty politics is a growth industry with few happy customers. In the run-up to Super Tuesday, television viewers nationwide had to endure an onslaught of negative and deceptive political ads.

For many in key primary and caucus states that meant sitting through up to 12 such ads an hour. And the vast majority of these ads went on the attack: The three political action committees buying the most television time this election season have spent more than 98 percent of their money on ads that discredit one or another candidate, according to Kantar Media.
These attacks by their very nature are misleading. FactCheck.org, which tracks accuracy in political messaging, found that the "avalanche of negativity" in recent political ads also contained a fair share of distortions and lies.

In February, Restore Our Future, the pro-Mitt Romney Super PAC, pushed an ad portraying Newt Gingrich as a supporter of China's one-child policy, a claim that sent the lie detectors at Politifact spinning.

Meanwhile, the pro-Santorum camp fired a salvo in Super Tuesday states with an ad claiming Romney left Massachusetts $1 billion in debt during his time as governor. Also false.

And it doesn't end with attacks on Republicans. An ad from the shadowy American Future Fund attempts to tar President Obama by listing dozens of former Wall Street executives allegedly serving under the president in the White House. One problem: Half of the people on the list never actually worked as Wall Street executives. As for the names of those financing the American Future Fund ad, the independent political group -- like all other Super PACs and 501(c)(4)s -- has no legal obligation to disclose.

The Real News Antidote
In this era of deceptive political ads, TV viewers don't receive enough of the antidote: the kind of hard-hitting reporting and election coverage that would help local voters separate political fact from fiction before they pick a candidate.

A 2011 Federal Communications Commission report found that 33 percent of commercial TV stations nationwide air little to no local news coverage. For those that do air news, the picture remains dim. Nearly two-thirds of local stations reported staff cuts in 2009 as owners focused on maximizing their profit margins. This has translated into fewer reporters on the political beat and less objective reporting about electoral issues.

A 2010 report by USC's Annenberg School of Communications shows that in the average 30-minute local news broadcast, less than 30 seconds is devoted to hard local government news, including reporting on political campaigns. Meanwhile, it's estimated that political ads will air up to 200,000 times nationwide before viewers become voters in November.

But what was bad for viewers and voters on Super Tuesday has been a boon for local broadcasters. Even after the rise of the Internet, local broadcast television has remained our most influential communications medium. According to a Pew Research Center survey, 78 percent of American viewers report getting their news from their hometown stations on a typical day -- more than the number that rely on newspapers, radio or the Internet.

Collateral Damage
Where viewers go, so goes the money to influence their votes. Industry analysts report that local television station advertising revenue is "going gangbusters" in 2012 as changes to campaign finance rules will unleash an estimated $3.3 billion in political ad buys across the country.

The media industry even has a term for this, "the Quadrennial Effect," which accounts for the surge in broadcast revenues every four years as national elections take center stage. The biggest beneficiaries are media corporations that control local broadcast television stations in battleground states. That group includes CBS Corp., Gannett Co., Media General and News Corp. All of these conglomerates have bought up stations in battleground states where cyclical election ad spending is concentrated.

What they don't want you to know, however, is that the broadcasters' rush to air political ads has caused collateral damage.

It is accepted wisdom among the campaigns and Super PACs that a political lie hammered repeatedly into the collective consciousness of the electorate will embed itself in the minds of many as truth. Spreading lies via an endless drumbeat of attack ads works especially well at a time when the press, by and large, doesn't question them.

And while all broadcast stations are legally entitled to reject outright any third-party political ad that pedals misinformation, few do.
Thus far in 2012, FactCheck.org hasn't found a single instance where a station has rejected a political ad for inaccuracy. 

"It's not to the advertisers or stations' competitive advantage to publicize this fact," says Kathleen Hall Jamieson, director of the Annenberg Public Policy Center, which runs FactCheck.org. "So the likelihood that we'll hear about this is low."

The irony, of course, is that stations pay a higher price for deciding to debunk political misinformation and pursue the truth. That's not the way media are supposed to function in a democracy.

They could correct course by spending some of their election-year profits on the kind of quality political reporting that viewers need before they go to the polls. They could devote more news coverage to exposing the wealthy individuals and corporations funding attack ads. They could do a better job of opening their own political files to public scrutiny to shed light on the Super PACs and independent groups that trade in deception.

But will they? With so much political ad money up for grabs in 2012, few broadcasters are willing to bite the hands that feed them. And that's bad news for anyone who believes the media should serve democracy and not merely profit from its demise.

Parallel Primary

word of the day...

Vivific: means giving life; reviving; enlivening.

We Have a Right to Know if Our Food is GMO

Fracking Could Cause a New Global Water Crisis

Wednesday, March 7, 2012 by Common Dreams
Report: “Does the rest of the world want to live this nightmare?”

As the oil and gas industry heads more towards hydraulic fracturing, also known as fracking, to access resources, a new report out today from Food & Water Watch states that the process may become a global environmental and public health threat. Numerous communities in the U.S. where fracking has occurred have suffered long-term damage to their public water, as gas and oil companies leave a legacy of carcinogens and climate damage in their wake. The group says that the worldwide community must heed the warnings out of stricken communities in the U.S. and ban the practice.




Wenonah Hauter, Executive Director of Food & Water Watch, states:

“Fracking is a dangerous American export that should be viewed critically by countries just starting to engage in the practice. Modern drilling and fracking have caused widespread environmental and public health problems, as well as posed serious, long-term risks to vital water resources.”

“While the oil and gas industry is profiting off of this technology, it has been a disaster for Americans exposed to its pollution. They have dealt with everything from mysterious ailments likely caused by hazardous air pollution to well water contamination that has left rural communities unable to use their water for washing, brushing their teeth or cooking—much less drinking,” adds Hauter. “Does the rest of the world want to live this nightmare?”

Numerous communities where fracking has occurred in the U.S. have had their public water resources contaminated as a result of fracking. One community the report highlights is Dimock, Pennsylvania:

In 2009, Pennsylvania regulators ordered the Cabot Oil and Gas Corporation to cease all fracking in Susquehanna County after three spills at one well within a week polluted a wetland and caused a fishkill in a local creek. The spills leaked 8,420 gallons of fracking fluid containing a Halliburton-manufactured lubricant that is a potential carcinogen. Fracking had so polluted water wells that some families could no longer drink from their taps. Pennsylvania fined Cabot more than $240,000, but it cost more than $10 million to transport safe water to the affected homeowners. In December 2010, Cabot paid $4.1 million to 19 families that contended that Cabot’s fracking had contaminated their groundwater with methane. In 2012, the U.S. EPA began providing clean drinking water to these families after Cabot had been released of its obligation to do so by the state of Pennsylvania.

Fracking pollution hasn't been limited to water; it has also caused air pollution near fracking sites, the report states:

Hazardous air pollutants found near fracking sites include methanol, formaldehyde and carbon disulfide. Volatile organic compounds, including nitrogen oxides, benzene and toluene, are also discharged during fracking. These compounds mix with emissions from heavy-duty truck traffic, large generators and compressors at well sites to form ground-level ozone that can, in turn, combine with particulate matter to form smog. [...]

In Wyoming, drilling and fracking have caused ground-level ozone pollution to exceed amounts recorded in Los Angeles, affecting the quality of life for Wyoming residents.

Methane, a key greenhouse gas, is also implicated in fracking, showing that heading towards fracking means heading toward more climate change:

Recent scientific studies have demonstrated that, due to the amount of fugitive methane released during modern shale gas development as compared to during conventional gas development, any increased use of shale gas instead of coal may actually accelerate climate change in the coming decades, not reduce climate change impacts.

Food & Water Watch shows that the natural gas and oil industry have had their eyes worldwide to expand fracking, with some countries showing tremendous resistance to it:

[C]ountries around the world are grappling with how to address the push to drill and frack. In Europe, while France and Bulgaria have banned fracking in the face of strong public opposition, Poland has welcomed the industry. In China and Argentina, shale gas extraction is being developed with government support. In South Africa, pending an environmental review, a subsidiary of Royal Dutch Shell may be granted permission to extract shale gas.

These countries would be wise,  Food & Water Watch  believes, to learn the lessons of communities in the U.S. that have had their water and environment damaged by fracking.
The report concludes:

Taken together, spills of toxic fracking fluid and fracking wastewater, water well contamination from the underground migration of methane and toxic fracking fluid, local and regional air pollution problems from shale development, explosions at the sites of shale wells, and substantial emissions of the global warming pollutant methane during drilling and fracking make the dangers of shale development clear. 

Countries not yet exposed to the risks and costs of drilling and fracking have an opportunity to choose a different path, one that “meets the needs of the present without compromising the ability of future generations to meet their own needs.” Enacting a national ban on fracking and investing in the deployment of energy efficiency and renewable energy technologies will set a sustainable course.

Why Can’t You Smoke Pot? Because Lobbyists Are Getting Rich Off of the War on Drugs

Why we still put hundreds of thousands of people in steel cages for pot-related offenses.

By Lee Fang, Republic Report
Posted on March 7, 2012


John Lovell is a lobbyist who makes a lot of money from making sure you can’t smoke a joint. That’s his job. He’s a lobbyist for the police unions in Sacramento, and he is a driving force behind grabbing Federal dollars to shut down the California marijuana industry. I’ll get to the evidence on this important story in a bit, but first, some context.

At some point in the distant past, the war on drugs might have been popular. But not anymore — the polling is clear, but beyond that, the last three Presidents have used illegal drugs. So why do we still put hundreds of thousands of people in steel cages for pot-related offenses? Well, there are many reasons, but one of them is, of course, money in politics. Corruption. Whatever you want to call it, it’s why you can’t smoke a joint without committing a crime, though of course you can ingest any number of pills or drinks completely within the law.

Some of the groups who want to keep the drug illegal are police unions that want more members to pay more dues. One of the primary sources for cash for more policing activities are Federal grants for penalizing illegal drug use, which help pay for overtime, additional police officers, and equipment for the force. That’s what Lovell does, he gets those grants. He also fights against democratic mechanisms to legalize drugs.

In 2010, California considered Prop 19, a measure to legalize marijuana and tax it as alcohol. The proposition gained more votes than Meg Whitman, the former eBay executive and Republican gubernatorial nominee that year, but failed to pass. Opponents of the initiative ran ads, organized rallies, and spread conspiracy theories about billionaire George Soros to confuse voters.

Lovell managed the opposition campaign against Prop 19. He told Time Magazine that he was pushing against the initiative because, “the last thing we need is yet another mind-altering substance to be legalized.”

But Republic Report reviewed lobbying contracts during the Prop 19 fight, and found that Lovell’s firm was paid over $386,350 from a wide array of police unions, including the California Police Chiefs Association.

While Lovell may contend that he sincerely opposes the idea of marijuana legalization, he has constructed an entire business model predicated on pot prohibition.

Shortly after President Obama’s stimulus program passed, Lovell went to work channeling the taxpayer money for California into drug war programs. According to documents Republic Report obtained from the Police Chiefs Association, Lovell helped local departments apply for drug war money from the Federal government. Here’s a copy of one letter sent to a police department in Lassen County, California:

There is big money in marijuana prohibition. Lovell represented a police union in a bid to steer some $2.2 million dollars into a “Marijuana Suppression Program.” In 2009 and 2010, California police unions sought a $7,537,389 chunk of Federal money for police to conduct a “Campaign Against Marijuana Planting” program.

The anti-marijuana money went directly into the paychecks of many officers. For example, police departments in Shasta, Siskiyou, and Tehama Counties formed a “North California Eradication Team” to receive $550,000 in grants that helped pay for overtime, a new officer, and flight operations:

The total amount awarded was $550,000, to be split between Shasta, Siskiyou and Tehama counties, which make up the Northern California Marijuana Eradication Team (NorCal-MET). Broken down in the agenda worksheet, the sheriff’s office is expecting to spend $20,000 on flight operations, $94,895 for the full-time deputy’s salary and benefits, $16,788 for the administration assistant salary and benefits and $29,983 to cover up to 666.29 hours of overtime.

The Federal anti-marijuana honeypot might have dried up if Prop 19 had passed. Legalizing marijuana would have generated billions in tax revenue for the state of California, while also reducing victimless crime prosecutions. But for lobbyists like Lovell, legalization was a direct assault on hundreds of thousands of dollars in potential fees for helping to solicit taxpayer money for his clients.

Of course, police unions aren’t the only interest group with a stake in maintaining broken drug laws. The beer industry, alcohol corporations, and prison guard unions also contributed money to help Lovell stop Prop 19. Howard Wooldridge, a retired police officer who now helps push for legalization as a citizen advocate, told Republic Report that drug company lobbyists also fight to keep marijuana illegal because they view pot as a low-cost form of competition.

Economic Recovery for Whom?

by: Richard D. Wolff, Truthout | News Analysis

Wednesday 7 March 2012

We expect ever-grosser competitive lying from the presidential primary candidates. We should expect no less from the media "analysts," politicians and academics competing for big business favors. With those expectations, we might be less disappointed by what we get.

These days, the hype about "economic recovery" is intense. Obama pitches it as a reason to reward him with campaign donations and votes. The money should flow in from the business community that wants badly to hide the fact that recovery has - from the beginning of this crisis - been only for them at the expense of recovery for everyone else. They need a president who hypes "recovery" as if it's about helping everyone in some general or "fair" way. The votes should come, Obama's team calculates, because average people are becoming increasingly desperate. They want someone in power who might help them even just a bit.

The Republicans had planned to use the economy against Obama (as he did against them in 2008). The recovery hype drove them to emphasize instead contraception, religion and the ever-popular Iran-bashing. By abandoning their attacks on "Obama's bad economy," Republicans leave the field to those hyping recovery.

The major media take their cues from politicians and their orders from the mega-corporations that own them. 

Mainstream academics, lowest on the public relations hype totem pole, celebrate recovery, too. Then they remember that they are supposed to be independent thinkers, so they find something about "the recovery" to "debate." That turns out to be, yet again, whether government interventions help or hinder economic recovery. In reality, big business leaders and the top politicians they control collaborate ever more closely for their mutual benefit. To mainstream academics falls the public relations task of pretending that big business and the government are adversaries.

However convenient to some, to speak of economic recovery today is false. There is no general improvement in economic conditions, let alone the sustained, self-reinforcing economic upturn that the word "recovery" is supposed to mean. Here is what we know early in March, 2012: The "good" news is about unemployment (slowly declining for a few months), retail sales (slowly rising) and especially sales of automobiles (rising quickly). It is also about corporate profits (high) and General Motors' (GM) profits (record high). Finally, the stock market had a nice upturn over recent months as well. That's pretty much it for the good news.

Here's the "bad" news. Housing prices are falling again (their much-hyped "recovery" earlier during the crisis turned out to be false). Manufacturing was down in the latest reports, while consumer spending and construction spending were flat. Consumer debt is rising again. The largest city bankruptcy in US history has been announced for Stockton, California (population: 300,000). State and city services across the country continue to be cut. Real wages and job benefits keep trending down.

A closer look at the good news raises even more doubt about "recovery" than the bad news does. Let's focus on those robust car sales and the hiring back of some laid-off auto-workers. Consider just two facts. First, the average age of cars on the roads in the US today is 10.8 years, making them the oldest fleet since the records began many years ago. People are not buying cars because they can afford them. Rather, their old cars now cost too much to repair too often. What they borrow to spend on car replacement now will require spending less on everything else in the months ahead. Second, hiring more auto-workers will have a much smaller impact on the US economy than rehiring used to. That is because the auto-industry bailout deal with the unions allows GM, for example, to hire "new" workers at $16 per hour, half of what they used to pay for the exact same jobs.

Looking closer at high corporate profits shows that they come more than ever from overseas activities of US corporations. Indeed, the country's sad condition and worse prospects are why so many US corporations place their hopes and investments outside the US.

The truth about "economic recovery" is that, for the mass of people, it is untrue. For the top 10 percent and especially the top 1 percent - those who brought global capitalism into crisis in 2007 - recovery has been real. They got the huge bailouts from Bush and Obama. They got the trillions in government loans at low interest that they then lent back to the government at higher interest rates (so much for how profits are capitalists' rewards for "taking risks"). To pay for its expensive bailouts (hyped as "stimulus plans"), the US government chose NOT to tax big businesses and their rich executives. Doing that, we were told by business and government alike, might "hamper the recovery."

So, the government borrowed trillions to "fund the recovery." And from whom? From the same banks, insurance companies, large corporations and rich executives whom the government had bailed out and NOT taxed. When those creditors began to worry that the US government's debt was becoming too high to sustain, they demanded that government cut back public services and use the money instead to pay interest and principal back to those creditors. And so it does.

"Recovery" is a recurring hype for a grotesquely unjust economic system. It is dusted off and reused whenever possible to cover the basic policy shared by both major parties in the US during major capitalist crises: help those at the top so maybe it will "trickle down" to everyone else. "Recovery" is the go-to word when business and government impose conditions to make the US more profitable especially for big business. Those conditions now include declining real wages, job benefits and public services for most Americans. They also include the huge numbers of personal and small business bankruptcies that cheapen the costs of second-hand equipment; empty office and retail space; and professionals (accountants, lawyers etc.) desperate for work.
"Recovery," in this capitalist economy, refers to profits, not to people.

Police Given Direct Line To Cell Phone Searches

Reporting Jay Gormley
March 6, 2012

DALLAS (CBSDFW.COM) – Think about all the personal information we keep in our cell phones: It’s something to consider after the U.S. Court of Appeals for the 7th Circuit ruled it is now legal for police to search cell phones without a warrant.

Former Dallas FBI Agent Danny Defenbaugh said the ruling gives law enforcement a leg up. “I think not only will it help them, but it could be life saving,” said the former Special Agent, who was based in Dallas.

The decision stems from an Indiana case where police arrested a man for dealing drugs. An officer searched the suspect’s cell phone without warrant.

The judge in the appeal case, Judge Richard Posner, agreed that the officer had to search the phone immediately or risk losing valuable evidence. Judge Posner ruled it was a matter of urgency, arguing it was possible for an accomplice to wipe the phone clean using a computer or other remote device.

Defenbaugh says the ruling takes into account exigent or time-sensitive circumstances that could be life saving in more urgent cases, such as child abduction. ”If the child is alive and you’re only minutes behind, that could be critical to recovering that child alive,” added Defenbaugh.

Judge Posner ruled that the search was legal because the officer conducted a limited search and only looked for phone numbers associated with the alleged drug deal. The judge argued it was similar to flipping through a diary to search for basic information such as addresses and phone numbers.

Paul Coggins is the former U.S. Attorney for the Northern District of Texas. Coggins says the court’s ruling pushes the envelope on privacy issues and wonders if it opens the door to more extensive searches down the road. “Does that mean officers now have the right to search through your phone, search through your search history, your photographs, your e-mails and the rest, because it could all be wiped clean,” Coggins asked.

Many critics are asking the same question. They call the ruling an invasion of privacy that far outweighs the needs of law enforcement.

Both Defenbaugh and Coggins agree that the case is likely to go to the U.S. Supreme court.

55 Vermont Towns Affirm: 'Corporations Are Not People'

Wednesday, March 7, 2012 by Common Dreams
Can grassroots victory in Green Mountain state spark national movement?


With some results still yet to come in, reports confirm that at least 55 towns in Vermont approved municipal resolutions calling for an end to big money's dominance in US politics and calling for a Constitutional amendment to reverse the Supreme Court's 'Citizens United' decision that has opened the floodgates for secretive, unlimited campaign spending in US elections.

“The people of Vermont and across America are totally disgusted with the huge amounts of money that billionaires and corporations are throwing into the political process,” US Senator Bernie Sanders said today. “We have to overturn this disastrous Citizens United decision. I hope the message coming out of the town meetings will spark a grassroots movement across the United States.”

The initiatives called on the Vermont Legislature and the state's congressional delegation to support a constitutional amendment that clarifies that 'money is not speech and corporations are not people.' Such an amendment would make it possible for Congress to limit election-related expenditures by for-profit corporations, nonprofits, unions and individuals.

“Vermonters are taking a lead in the growing movement for a constitutional amendment to limit the influence of big money and corporations in our democracy,” said Aquene Freechild, senior organizer with Public Citizen’s Democracy Is For People campaign. Public Citizen – along with Move to Amend/Women’s International League for Peace and Freedom, Vermont Peace and Justice Center, VPIRG, Vermont Businesses for Social Responsibility, Rural Vermont, Common Cause Vermont, Occupy Burlington, Vermonters Say Corporations Are Not People, Vermont Action for Peace, Vermont Workers Center, and Ben Cohen and Jerry Greenfield (co-founders of Ben & Jerry’s ice cream) – worked with Vermont activists to collect signatures and get the resolutions on town meeting agendas.

Late last year, Sanders introduced the Saving American Democracy Amendment. His proposal would restore the power of Congress and state lawmakers to enact campaign spending limits like laws that were in place for a century before the controversial court ruling.

The Associated Press reported that in most towns where 'corporate personhood' resolutions were on the agenda, they were passed with "overwhelming margins." And added:

State Sen. Virginia Lyons of Chittenden County, an organizer of the movement, said that when she started pushing for the idea she would have been thrilled to see the measure taken up in four or five towns. 

"People are just fed up with the status quo," she said after the polls closed. [...] 

Supporters of the personhood amendment want Congress to begin the process of amending the Constitution to overrule the Supreme Court's 2010 Citizens United decision, which critics say has unleashed huge amounts of unregulated money into the presidential election process. 

Lyons said she knows the process of amending the constitution is a long one. 

"It took 40 or 45 years just to get women the vote," Lyons said. "For me, this is just the beginning of something. We need to absolutely set the record straight. We can't continue down the slippery slope we've been traveling. It's not just money, but corporate influence in everything we do."

The measure failed to pass in only two locations, said Fairchild, who was monitoring the votes for the group Public Citizen.

***

Concensus abounds, but 'complicated' battle still ahead
Seven Days, an indepedent Vermont paper, spoke with state Rep. Bill Lippert (D-Hinesburg) who "was packing up a cardboard box and shaking his head" because, though he agreed in principle, thought the vote in his town was an “ill-formed” attempt to halt the “obscene amounts of money distorting the political process.”

“It’s far more complicated than it appears on the surface,” Lippert said of the issue, noting the amendment would restrain nonprofit corporations, not just for-profit ones. “You start sorting it out, it’s not as neat and clean as people would like it to be.”

And the Seven Days report continued:

In the state legislature, Sen. Ginny Lyons (D-Chittenden) and 10 cosponsors have proposed a joint resolution urging Congress to amend the constitution to say that corporations are not people. The Senate Committee on Government Operations is set to take up the resolution next week, and at least one witness has warned that, as written, the resolution could have “catastrophic” unintended consequences. 

Benson Scotch, a Vermont lawyer who served as chief staff attorney to the Vermont Supreme Court and was executive director of the Vermont ACLU, told the committee last month that “money is not speech” makes a fine motto but could cause trouble if it’s enshrined in a resolution. 

To illustrate, Scotch offered a hypothetical: Imagine that a town, tired of Occupy protests and mounting police costs, passes an ordinance against rowdy meetings or promoting rowdy meetings. A political organization solicits donations to buy television airtime opposing the ordinance. When the town goes to court to stop the fundraising, the organization raises its First Amendment right to free speech and assembly. 

“The court under this amendment might dismiss the complaint because money is not speech,” Scotch testified, “and therefore no speech rights have been violated.” 

Lyons says she’s suggested modifications to her resolution and is hopeful the Gov Ops committee will incorporate them. 

“We are not writing the amendment,” she notes. “We are writing a resolution urging Congress to please send an amendment for ratification. There are greater constitutional minds than Vermont’s senators at work.”

The Day 'Due Process' Died

Wednesday, March 7, 2012 by Huffington Post
Obama, Holder and the End of Rights
by Peter Van Buren

Historians of the future, if they are not imprisoned for saying so, will trace the end of America's democratic experiment to the fearful days immediately after 9/11, what Bruce Springsteen called the days of the empty sky, when frightened, small men named Bush and Cheney made the first decisions to abandon the Constitution in the name of freedom and created a new version of the security state with the Patriot Act, Guantanamo, secret prisons and sanctioned torture by the U.S. government. They proceeded carefully, making sure that lawyers in their employ sanctioned each dark act, much as kings in old Europe used the church to justify their own actions.

Those same historians will remark from exile on the irony that such horrendous policies were not only upheld by Obama, a Nobel Peace Prize winner and professor of Constitutional law, but added to until we came to the place we sadly occupy today: the Attorney General of the United States, Eric Holder, publicly stating that the American Government may murder one of its own citizens when it wishes to do so, and that the requirements of due process enshrined in the Constitution's Fifth Amendment, itself drawn from the Magna Carta that was the first reflowering of basic human rights since the Greeks, can be satisfied simply by a decision by that same president.

Yesterday will thus be remembered as the day we gave up. No more clever wordplay (enhanced interrogations, "patriot" act, targeted killing, kinetic operations) but a simple declaration that the U.S. government will kill its own citizens when it wishes to, via a secret process we, and our victims, are not allowed to know or contest.

Brevity in Our Freedom
Like most of the Bill of Rights, the Fifth Amendment to the Constitution is beautiful in its brevity and clarity. When you are saying something true, pure, clean and right, you often do not need many words: "... nor be deprived of life, liberty, or property, without due process of law."

There are no footnotes in the Fifth Amendment, no caveats, no secret memos, no exceptions for war, terrorism, mass rape, creation of concentration camps, acts of genocide, child torture or any evil. Those things are unnecessary, because in the beauty of what Lincoln offered to his audience as "a government of the people, by the people, for the people," the government would be made up of us, the purpose of government was to serve us, and the government would be beholden to us. Such a government would be incapable of killing its own citizens without care and debate and open trial.

With the excuse all tyrants proclaim, protecting the nation, on or about September 30, 2011 a U.S. drone fired a missile in Yemen and killed American Citizen Anwar al Awlaki, born in the United States and tragically devoted to al Qaeda. About a week later, the U.S. murdered al Awaki's 16 year old son. The U.S. had shot at the elder al Awlaki before, on May 7, 2011 under Obama's orders, and under the Bush administration. Before the U.S. government killed his son, attorneys for al Awlaki's father tried to persuade a U.S. District Court to issue an injunction preventing the government killing of al Awlaki. A judge dismissed the case, ruling the father did not have standing to sue. This was the first time in our nation's history that a father sought to sue to prevent the government from extra-legally killing his son. The judge in the case surrendered to his post-9/11 fear and wrote that it was up to the elected branches of government, not the courts, to determine whether the United States has the authority to murder its own citizens by decree.

Fear Shaped by Lies to Compel Compliance
In his speech, Attorney General Holder said things no honest man would ever believe would be said by the highest law officer in the United States.

So while the popular media remembers ... the day Rush apologized for calling someone a slut and Republican candidates ignored the wave of history to carp about birth control, historians will look back on March 5, 2012 as the day America gave up on its experiment with unalienable rights, rights that are natural, not given, rights independent of governments, what our Declaration explained to an unsure forming nation as "Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."

Holder said "that a careful and thorough executive branch review of the facts in a case amounts to 'due process' and that the Constitution's Fifth Amendment protection against depriving a citizen of his or her life without due process of law does not mandate a 'judicial process.'"

Holder thus also declaimed that the victim also has no right to a defense, no right to speak on his behalf, no right to examine and refute the evidence against him and no right even to know his life will be taken under the decision of a few men in Washington. Indeed, Holder made clear that the government's decision to kill overshadowed the right to self-defense in saying "An individual's interest in making sure that the government does not target him erroneously could not be more significant. Yet it is imperative for the government to counter threats posed by senior operational leaders of al Qaeda, and to protect the innocent people whose lives could be lost in their attacks."

Holder said he rejected any attempt to label such operations assassinations, invoking the same airbrush of lawfulness that fueled the Inquisition, the Salem Witch Trials and the Holocaust. "Assassinations are unlawful killings. The U.S. government's use of lethal force in self-defense against a leader of al Qaeda or an associated force who presents an imminent threat of violent attack would not be unlawful."

Sluts All
So while the popular media remembers yesterday as the day Rush apologized for calling someone a slut and Republican candidates ignored the wave of history to carp about birth control, historians will look back on March 5, 2012 as the day America gave up on its experiment with unalienable rights, rights that are natural, not given, rights independent of governments, what our Declaration explained to an unsure forming nation as "Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."

And that is the saddest part of a very sad day: the majority of Americans -- the consent of the governed -- seemingly do not care what Holder said, and are even now bleating on internet forums and likely in comments below to this article about the need to kill more terrorists, adding terrified, empty justifications to Holder's clever Newspeak. 

We did not have our freedom taken from us, we gave it away.

Rights Groups, Law Experts Reject Obama's 'Assassination' Program

Wednesday, March 7, 2012 by Common Dreams

Law experts, human rights groups, and advocates for civil liberties and international law are expressing outrage and concern just days after the Obama administration's chief prosecutor, Attorney General Eric Holder, publicly outlined and defended the US government's program to target and kill, without trial, individuals who it determines are affiliated with al Qaeda or deems a threat to national security.

Speaking to law students at Northwestern University on Monday, Holder said of the program:

Given the nature of how terrorists act and where they tend to hide, it may not always be feasible to capture a United States citizen terrorist who presents an imminent threat of violent attack.

In that case, our government has the clear authority to defend the United States with lethal force.

Responding to the speech on Tuesday, legal scholar Jonathan Turley, wrote: 

"The choice of a law school was a curious place for discussion of authoritarian powers. Obama has replaced the constitutional protections afforded to citizens with a "trust me" pledge that Holder repeated."

In the days since, groups and individuals have responded with incredulous amazement. Though the program has been known about for some time, the public defense shocked many. Hina Shamsi, director of the American Civil Liberties Union’s National Security Project, commented on the speech:

“While the speech is a gesture towards additional transparency, it is ultimately a defense of the government’s chillingly broad claimed authority to conduct targeted killings of civilians, including American citizens, far from any battlefield without judicial review or public scrutiny. Few things are as dangerous to American liberty as the proposition that the government should be able to kill citizens anywhere in the world on the basis of legal standards and evidence that are never submitted to a court, either before or after the fact. Anyone willing to trust President Obama with the power to secretly declare an American citizen an enemy of the state and order his extrajudicial killing should ask whether they would be willing to trust the next president with that dangerous power.”

Inter Press Service reports today:

Although the Obama administration has stated publicly that its policy to assassinate U.S. citizens and foreign nationals allegedly involved with terrorist organizations does not fall outside of legal bounds, the actual decision-making process – how, when and under what circumstances – through which authority is granted remains classified.

The debate over targeted killings reignited in December 2011 when President Obama signed into law a bill that included language reaffirming the executive’s right “to use all necessary and appropriate force” in combating terrorism.

“We have had all of these arguments since 2010. They are inadequate,” Mary Ellen O’Connell, a professor at the University of Notre Dame who specialises in international dispute, told IPS.

“This is the global war on terror with a new name – the same global war on terror that President Obama dismissed on the campaign trail” in 2008, O’Connell added. “The U.S. has always had a policy against targeted killing for legal, moral and strategic reasons. None of these reasons have changed."

Former litigator and civil rights blogger, Glenn Greenwald, was scathing in his critique at Salon.com. However, due to his extensive previous critique of the assassination program itself, he saved most of his ire for the Democrats who have so blithely followed the lead of the President and his administration on the issue:

The willingness of Democrats to embrace and defend this power is especially reprehensible because of how completely, glaringly and obviously at odds it is with everything they loudly claimed to believe during the Bush years. Recall two of the most significant “scandals” of the Bush War on Terror: his asserted power merely to eavesdrop on and detain accused Terrorists without judicial review of any kind. Remember all that? Progressives endlessly accused Bush of Assaulting Our Values and “shredding the Constitution” simply because Bush officials wanted to listen in on and detain suspected Terrorists — not kill them, just eavesdrop on and detain them — without first going to a court and proving they did anything wrong. Yet here is a Democratic administration asserting not merely the right to surveil or detain citizens without charges or judicial review, but to kill them without any of that: a far more extreme, permanent and irreversible act. Yet, with some righteous exceptions, the silence is deafening, or worse.

Turley echoes Greenwald's criticism of most Democrats and questions the limits of such vaguely worded executive authority:

The Obama administration continues to stonewall efforts to get it to acknowledge the existence of a memo authorizing the killing of Anwar al-Awlaki. Democrats previously demanded the "torture memos" of the Bush administration that revealed both poor legal analysis by Judge Jay Bybee and Professor John Yoo to justify torture. Now, however, Democrats are largely silent in the face of a president claiming the right to unilaterally kill citizens.

Holder became particularly cryptic in his assurance of caution in the use of this power, insisting that they will kill citizens only with "the consent of the nation involved or after a determination that the nation is unable or unwilling to deal effectively with a threat to the United States." What on earth does that mean?

Peter Van Buren, a former US diplomat, argued that Holder's defense of the program amounted to death of the Constitution's fifth amendment:

Like most of the Bill of Rights, the Fifth Amendment to the Constitution is beautiful in its brevity and clarity. When you are saying something true, pure, clean and right, you often do not need many words: "... nor be deprived of life, liberty, or property, without due process of law."

There are no footnotes in the Fifth Amendment, no caveats, no secret memos, no exceptions for war, terrorism, mass rape, creation of concentration camps, acts of genocide, child torture or any evil. Those things are unnecessary, because in the beauty of what Lincoln offered to his audience as "a government of the people, by the people, for the people," the government would be made up of us, the purpose of government was to serve us, and the government would be beholden to us. Such a government would be incapable of killing its own citizens without care and debate and open trial.

IPS' report focused particularly on the implication for international laws:

Holder also argued that certain legal principles “do not forbid the use of stealth or technologically advanced weapons”, such as covert operations and unmanned aerial vehicles, or drones, used to kill militants and foreign nationals suspected of posing an “imminent threat” to U.S. national security.

But the use of such methods has set controversial precedents that may violate international law, Laura Pitter, a specialist on U.S. counterterrorism policy for Human Rights Watch, told IPS.

“The reason it’s important to comply with international law is that there are standards that all countries use when applying lethal force so that countries like Russia and China, when they have these technologies, all apply the same standards,” Pitter explained.

While the speech provided the clearest insight to date regarding the administration’s legal framework for assassinations of U.S. citizens, Holder avoided detailing the implications of such a policy for foreign nationals.

“[The speech] deals with what would be justified for a U.S. citizen,” said Pitter. The fact that it didn’t address non-citizens leaves “little basis for determining whether the U.S. is meeting its legal obligations when it conducts these operations in regard to non-citizens,” she added.

“Each targeted killing that occurs takes place in different circumstances, and all of it is secret because it’s being conducted by the CIA…We’ve called for a long time for them to be conducted under military authority, which has greater transparency,” Pitter added.

And Charles Pierce, writing at Esquire, highlights the predictable (and troubling) path that expansive and unchecked executive authority has followed since the George W. Bush presidency.

The criteria for when a president can unilaterally decide to kill somebody is completely full of holes, regardless of what the government's pet lawyers say. And this... 

"This is an indicator of our times," Holder said, "not a departure from our laws and our values." 

"...is a monumental pile of crap that should embarrass every Democrat who ever said an unkind word about John Yoo. This policy is a vast departure from our laws and an interplanetary probe away from our values. The president should not have this power because the Constitution, which was written by smarter people than, say, Benjamin Wittes, knew full and goddamn well why the president shouldn't have this power. If you give the president the power to kill without due process, or without demonstrable probable cause, he inevitably will do so. 

"And, as a lot of us asked during the Bush years, if you give this power to President George Bush, will you also give it to President Hillary Clinton and, if you give this power to President Barack Obama, will you also give it to President Rick Santorum?"

Watching Over You

The Perils of Deep Packet Inspection

by ANTOINE CHAMPAGNE

When The Wall Street Journal reporter Margaret Coker visited the Libyan government’s surveillance centre in Tripoli after the city’s fall, she saw that the authorities had been monitoring everything: the internet, mobile phones, satellite phone and internet connections. Some files included emails and online conversations between Gaddafi’s opponents. Notices on the walls revealed that the company which had installed the equipment was Amesys, a subsidiary of French firm Bull (1). The French satirical weekly Le Canard Enchainé later reported that France’s military intelligence directorate had been solicited to help train Libya’s internal spies (2).

In Syria, US equipment helps Bashar al-Assad’s regime censor the internet, and retrieve logins and passwords to access people’s emails or Facebook and Twitter pages. This tool is particularly useful for tracking the communications of opponents with internal or foreign connections.

The technology is innocuously named “deep packet inspection” (DPI). When someone sends an email, a series of servers relays it to its destination. Each server sends the message on to the next, looking only at the recipient’s address, and not at the contents. An expert on internet law, Jonathan Zittrain, explained: “It’s a bit like being at a party with polite friends. If you’re too far from the bar, or there are too many people in the way, you ask the person next to you to get you a beer. They ask the person next to them, who is a bit closer to the bar, and so on. Eventually your order reaches the bar and your beer arrives via the same route back. Since everyone is polite, no one will have drunk your beer along the way.”

But DPI is less polite. How would you feel if the person next to you analysed your order, and started lecturing you about it? Or if they tampered with your drink, adding water or something stronger? This is exactly what DPI technology can do: it allows people to read the content of internet traffic, modify it, and even send it to someone else.

Amesys is not alone in this market. US press agency Bloomberg recently reported that another French company, Qosmos, had provided DPI technology to a consortium equipping Syria to the same standard as Gaddafi’s Libya (3). DPI is also at the heart of China’s firewall, which allows the government to censor internet traffic and spy on its citizens.

‘Secret new industry’
The recent Wikileaks publication of numerous internal documents from these companies shows that monitoring communication networks is “a secret new industry spanning 25 countries … In traditional spy stories, intelligence agencies like MI5 bug the phone of one or two people of interest. In the last 10 years systems of indiscriminate, mass surveillance have become the norm” (4). A little earlier The Wall Street Journal had published more than 200 marketing documents from 36 companies offering the US anti-terrorist agency various surveillance and computer hacking tools (5).

DPI entered the spotlight in May 2006 when Mark Klein, a former technician with US internet provider AT&T, leaked the fact that the company had installed DPI technology at the heart of the county’s internet network, in cooperation with the US National Security Agency (which invented the Echelon system in the 1980s and 1990s). The technology was provided by internet surveillance company Narus (slogan “See Clearly, Act Swiftly”). Narus was set up in 1997, has 150 employees, earned $30m in 2006, and was bought up by Boeing in 2010. The Mubarak regime was reported to have installed Narus equipment in Egypt (6).

The flow of information over the internet includes the web, emails, synchronous exchanges (instant messaging) and asynchronous exchanges (blogs, discussion forums), phone conversations, video, raw data, etc. Most of this communication is not encrypted, so it is easy for both the casual hacker and state security services to monitor it.

Constraints or profits?
But some private companies are also seeing a financial advantage in this technology. Telecoms operators such as Free, SFR and Orange have started to complain that large amounts of information are being conveyed on their networks without the producer paying. Internet service providers (ISPs) are not happy about paying to transmit YouTube videos, which they are obliged to provide to their subscribers. So they came up with the idea of charging a supplement to the information’s producer or its final user, or slowing down some traffic in favour of others. But to do that they have to be able to measure precisely what is passing through their networks.

In the same way, mobile phone operators have tried to limit their infrastructure costs by restricting their customers’ access to the internet. So they prohibit smart phone users from peer-to-peer file sharing, or using vocal or video communication like Skype.

Here too, DPI allows them to monitor and manage the traffic, and allocate higher bandwidths to certain services, such as those they provide. This contradicts the notion of “network neutrality”, whereby service providers are meant to convey all requested information without discrimination.

When DPI is applied to web browsing, it can record every move a person makes online. Marketing professionals are desperate to exploit such information. Orange recently launched Orange Shots, which uses DPI technology to analyse the websites a subscriber uses (with their consent), in order to offer them ultra-targeted products. That could make ISPs as profitable as Facebook and Google, as long as these programmes attracted subscribers; it would be enough to claim that the data was anonymous to make it a perfectly marketable product.

The curious reader could check the Data Privacy page on the website of GFK, an international market research group and Qosmos shareholder: while it casually mentions web “cookies”, it fails to explain that it also tracks visitors to websites using a DPI technology which is supposedly anonymous because GFK alone knows the formula. GFK is present in more than 150 countries.

DPI is also attracting intellectual property rights and copyright holders who are trying to fight “illegal” file sharing on peer-to-peer networks (BitTorrent), or sites for uploading and downloading files directly, like Megaupload. Knowing exactly who is trying to download what film or music file, and blocking that person’s access, can only be done with “deep” surveillance infrastructure shared across all the data exchange points that the ISPs represent.

Legal surveillance
Another natural market for DPI technology is legal surveillance. In France police sometimes monitor a suspect’s communications as part of a judicial investigation, authorised by a judge and the National Committee for the Control of Security Interceptions. But this is a niche market, concerning a very small proportion of the population. Unless they were counting on another huge rise in the anti-terrorist budget, it would make sense for businesses in this sector to look for other commercial outlets.

That is where the governments of police states, which want to listen to their entire populations, come in. Surveillance software can be tested in these countries under real conditions. That is why Ben Ali’s Tunisia received a discount on systems that still had bugs. Libya provided Amesys with a real life experiment of what Eagle software could or could not do. Alcatel is doing the same in Burma. The information gathered by DPI inevitably leads to arrests. (Torture, using tried and tested methods, can do the rest.)

Puzzled, no doubt, by the high number of European companies in this sector, the European parliament has passed a resolution to ban the sale abroad of systems monitoring phone calls and text messages, or providing targeted internet surveillance, if this information is used to violate democratic principles, human rights or freedom of expression. On 1 December 2011 the EU Council tightened restrictions on Syria and banned “exports of equipment and software intended for use in the monitoring of internet and telephone communications by the Syrian regime”.

Despite this, there is little legal control over the global export of surveillance equipment. Manufacturers find it easy to slip through the net (especially since there is such a diversity of legislation), governments do not publish their permits, and this type of software is not strictly considered a weapon.

Notes.1) Paul Sonne and Margaret Coker, “Firms Aided Libyan Spies”, The Wall Street Journal, New York, 30 August 2011.
(2) “Des experts des services secrets francais ont aidé Kadhafi à espionner les Libyens” and “Secret militaire sur le soutien à Kadhafi”, Le Canard Enchainé, Paris, 7 September and 12 October 2011.
(3) “Syria Crackdown Gets Italy Firm’s Aid with US-Europe Spy Gear”, Bloomberg, 3 November 2011.
(4) WikiLeaks, “The Spy Files”, 1 December 2011.
(5) Agreement between France’s education minister Jack Lang and Max Cloupet, representing Catholic schools under contract to the state, 15 June 1992.
(6) Timothy Karr, “One US Corporation’s Role in Egypt’s Brutal Crackdown”, The Huffington Post,28 January 2011.

Getting Around Geithner

Why Other Countries Must Lead the Way on Financial and Trade Reforms

by SARAH ANDERSON
I’ve been trying to get the Obama administration to come out of the Dark Ages on the subject of capital controls for three years. The light, however, seems to be shining only outside Washington.

I know capital controls aren’t exactly issue No. 1 on Americans’ minds. But these tools for managing volatile hot money flows have saved countless families around the world from economic disaster. And while they’re most frequently used in developing countries, promoting financial stability anywhere is in the interest of all of us.

So in the wake of the worst financial crisis in 80 years, I thought it would be a no-brainer for the U.S. government to give up its longstanding policy of banning capital controls through trade agreements. The North American Free Trade Agreement and dozens of other U.S. treaties severely restrict our trade partners’ ability to use capital controls. If governments break the rules, foreign investors can sue their pants off in international tribunals.

In 2009, I was appointed to an official advisory committee to the Obama administration on investment policy, where I talked myself blue in the face about the need for a rethink on capital controls. To pump up the volume, I partnered with Professor Kevin Gallagher of Boston University to organize more than 250 economists to sign a letter to the administration, urging trade reforms to allow capital controls.

Many fancy economists were eager to sign — a Nobel Prize winner, a former finance minister and Central Banker, a Harvard department head, etc… We got coverage in the New York Times and Wall Street Journal, as well as the opportunity to present the letter to Treasury officials and trade negotiators.

Finally, we received a reply from Treasury Secretary Timothy Geithner. The administration would “seek to preserve” current policy, he said, since, in his view, governments have sufficient alternatives to capital controls to deal with volatility.

Ouch. Geithner made the International Monetary Fund look like a relative beacon of progressive enlightenment. After decades of blanket opposition, the IMF now endorses capital controls on inflows of speculative capital under certain circumstances. They have recommended outflows controls in a number of countries facing capital flight, such as Iceland, and are supporting inflows controls to prevent speculative bubbles in emerging market countries.

What about Geithner’s argument that there are plenty of other policy tools to deal with financial volatility? An IMF paper from 2010 went through the alternatives and concluded that in certain circumstances capital controls are still needed.

Fortunately, there are ways to get around Geithner. The greatest hope lies in other countries that may put up a fight over this issue. The Obama administration is negotiating a Trans-Pacific trade agreement with eight other governments: Australia, Brunei, Chile, Malaysia, Peru, New Zealand, Singapore, and Vietnam. Several of these have used capital controls effectively in the past.

For example, throughout most of the 1990s, Chile required a percentage of all foreign investments to be deposited in the central bank for a year, helping to prevent rapid capital flight. Malaysia imposed controls on capital outflows at the height of the Asian financial crisis in 1998. Nobel economist Joseph Stiglitz has written that this allowed Malaysia to “recover more quickly with a shallower downturn and with a far smaller legacy of national debt.”

More than 100 economists from countries in the Trans-Pacific trade talks have signed a new letter urging more flexibility on capital controls. This time, signatories include prominent scholars from six of the nine participating governments, including well-known free trade supporter Professor Jagdish Bhagwati of Columbia University and former IMF officials Olivier Jeanne of Johns Hopkins University and Arvind Subramanian of the Peterson Institute for International Economics. The letter was be delivered to each of the nine governments on the eve of a big March 1-9 negotiating round in Melbourne, Australia.

This isn’t the only fix needed in our trade agreements. But if we can’t move beyond the Dark Ages belief in the wonders of unfettered financial flows, it’s hard to imagine winning much else in the way of enlightened trade reforms.

Putting Drug Legalization on the Agenda

Time to End a Failed War
by JEFFREY DHYWOOD

The so-called War on Drugs has been going on for over 40 years, but despite the colossal resources that have been thrown at this failed social experiment, the world’s appetite for illicit substances keeps heading stubbornly upwards and drug–trafficking is as flourishing as ever, sowing mayhem and chaos all over the planet. To whoever is willing to analyze the issue without ideological or moralist goggles, it is painfully obvious that this doomed war is even less winnable than the war in Afghanistan (or the war in Iraq for that matter), and has been going on four times longer, at a far higher cost. The list of retired world leaders speaking out against drug prohibition and calling for a paradigm shift on drug policy is growing by the day, and includes former UN Secretary General Kofi Annan and a long string of ex-presidents, ex-drug czars and top drug-warriors, most notably from Latin America. The flow of retired high-level officials coming out of the War on Drugs closet is turning into a stampede.

Unfortunately, it was so far considered political suicide for lawmakers of all nationalities, kept in tight line under the hawkish watch of US Prohibitionist-in-chief, to acknowledge the abysmal failure of the War on Drugs while they were in office. Colombian President Santos was a notable exception, tiptoeing over a careful legalization line even before he was elected, and keeping his stance once in office. Mexican president Calderon started his mandate with a fierce determination to tackle the problem once and for all, but nearing the end of his 6 years term, and after a semi-official body count toppling 50,000, doubt seems to be creeping in. His determination was first shaken by the Monterrey massacre in August 2011, while the fast-and-furious debacle rightly infuriated him. The first expression of regional discontent came on December 6th, 2011, with the publication of a declaration calling for the exploration of “regulatory or market oriented options”, signed by 10 heads of states of the Central-American and Caribbean region members of the Tuxtla System for Dialogue.

But the big surprise came from Guatemala where, a few days after taking office in January 14th, 2012, President Perez Molina, a former general elected on a law and order platform, started talking about legalization as a way out of the War on Drugs conundrum. Following discussions with Colombian President Santos, President Perez Molina further declared on February 11th his intention to present a proposal for drug legalization in Central America at the April 14-15 Summit of the Americas. Guatemalan Vice-President Roxana Baldetti started a tour to discuss the proposal with regional leaders and garner support for it, starting with Panama, Costa Rica and Salvador on February 29th.

Unsurprisingly, the move was greeted by a quick rebuke from the US government, who dispatched Secretary of Homeland Security Janet Napolitano to the region on February 28th, one day ahead of Roxana Baldetti’s own tour. Napolitano gained support for the continuation of the war on drugs from the Presidents of Costa Rica, Salvador and Panama, three of Baldetti’s prime targets. Suspecting arm-twisting would of course be disingenuous. Earlier in that tour, Napolitano declared that the Mexican war on drugs was not a failure, despite its 50,000 body count, though she came short of calling it a success. How do you spell denial? But then, if the war on Iraq is the new benchmark, the most dismal failure can be touted as success. (If Napolitano really thinks the drug war isn't a failure, then she is incompetent and not qualified to hold the position she holds.--jef)

It is remarkable that Baldetti still managed to get the support of Costa Rica and El Salvador. On Sunday Marhc 3rd came the announcement that the US administration is now sending VP Biden himself, a staunch supporter of the war on drugs, to tour the region.

President Perez Molina’s initiative is unprecedented and marks the first time since the launching of the War on Drugs by Richard Nixon in 1971 that a foreign head of state actively challenges the US-led policies of drug prohibition and try to build a coalition against it. A former top-brass Guatemalan military, President Perez Molina has impeccable credentials to launch such a move. Guatemala is on the major transit route from Colombia to the US and drug violence has exploded there over the past few years, turning this already impoverished and unstable country into one of the most dangerous countries in the world.

It remains to be seen whether President Perez Molina will be able to withstand the US pressure. A lot will depend on the attitude of Colombia and Mexico, the most influential countries in the region. Should these countries decide to seriously explore alternatives to the War on Drugs and move resolutely towards more pragmatic and realistic policies, the balance of power would be drastically altered and other countries could be persuaded to align behind them, but nothing can happen without Colombia and Mexico onboard.

There are reasons to believe that the recent development represent a lasting shift in Latin American approach to the intractable drug trafficking problem that has caused tremendous damage to the region over the past 3 decades. There is growing realization that the current prohibitionist approach is powerless to tackle the issue, as any apparent success on one front just displaces the problem. Methamphetamines displace cocaine. Guatemala replaces Mexico. A splinter of mini-cartels take over mega-cartels after their demise, in endless vicious circles. Violence is contained, at best, as seems to be currently the case in Colombia.

Latin America deeply resents that the US has long blamed producing and transiting countries while being unwilling and unable to curb demand at home. Adding fuel to the resentment is the constant flow of US weaponry and the extremely lax US gun laws that US lawmakers are too terrified to challenge. Latin Americans also realize that they are bearing the brunt of the human cost of a war that has been largely imposed on them, and were they somewhat feel as innocent bystanders, especially in transiting countries.

More worrisome, the region is facing a drug problem of its own as drug-related services and transactions are often paid in kind, a move started by the cartels in the late 80s. The substances used as payment end up fueling an explosion of the local demand. As a result, the turf wars between gangs and cartels are increasingly fought over local territories rather than transit routes. The most vulnerable, children, youths and women are cannon fodder on the front line, used as lookouts, couriers, mules or even hired guns.

At the same time, Latin American countries are increasingly eager to assert their independence from their often over-bearing Northern neighbor. The current power vacuum in the US, where the government is practically held hostage by a fanatical political fringe, reinforces this desire for independence and creates favorable conditions. The intransigence displayed by the Obama administration and Janet Napolitano might end up backfiring. The time is gone when the US could dictate its fiat to the region. Its strategy of string-attached aid, which often amounts to intimidation and bribery, eerily mirrors the “plomo o plata” strategy of the drug cartels.