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« Reply #7950 on: Aug 05, 2013, 06:44 AM »

August 4, 2013

Tycoon’s Trials Rivet Serbia, Land of Graft


PARIS — When Miroslav Miskovic posted a record $16 million bail late last month after spending more than seven months in jail on charges of fraud and tax evasion, the outsized sum solidified the reclusive 68-year-old tycoon’s reputation as one of the Balkans’ richest businessmen, even as it breached his well-known preference for understatement and invisibility.

The spectacular rise and fall of Mr. Miskovic, an enigmatic figure who Serbian journalists say is suspected of paying the news media not to write about him, has riveted the region. The Serbian government hailed his arrest last December as part of a crackdown on organized crime and corruption to aid the country’s bid to join the European Union and shed a culture of lawlessness, a legacy of the Balkan wars of the 1990s.

Aleksandar Vucic, Serbia’s powerful first deputy prime minister, who is spearheading the fight against corruption, used his Facebook profile late last year to vent his frustration with the once seemingly untouchable business magnate. “Nobody has and nobody will beat Serbia, and that includes Miroslav Miskovic,” he wrote.

Prosecutors said Mr. Miskovic has been accused, along with his son Marko and nine others, of siphoning off more than $30 million during the privatization of a now bankrupt road repair company between 2005 and 2010. He was freed pending trial. If convicted, he faces up to 10 years behind bars.

Mr. Miskovic’s aides said he was not available for an interview. But his supporters insisted that the charges were politically motivated, and that he was being targeted as a scapegoat. A Web site produced by his company, Delta Holding, entitled “Who is Miroslav Miskovic?” said that he had committed no wrongdoing. “We reject all accusations,” said Branislava Milunov, a spokeswoman for Delta Holding.

The government’s pursuit of Mr. Miskovic is part of a growing effort to root out corruption among the newest members of the European Union, raising the admissions bar for aspiring entrants like Serbia. The Czech Republic recently intensified a high-profile anticorruption investigation that toppled the prime minister. Bulgaria has been mired in weeks of protests against endemic graft. Romania put a former prime minister behind bars last summer on corruption charges. Croatia, too, is grappling with organized crime even after joining the union last month.

A few days after posting the record bail, Mr. Miskovic made a rare public appearance at a news conference for his retail empire, where he said that he had been able to stay in touch with his business associates, even from his prison cell. Delta Holding is Serbia’s largest privately held company, with 7,200 employees across the Balkans, and a network of businesses that encompass real estate, food production, retail sales and insurance.

In a country that has struggled to shrug off economic hardship and corruption since the overthrow of the former Serbian strongman Slobodan Milosevic in 2000, analysts said Mr. Miskovic had become a potent emblem of the unhealthy link between business interests and the state that has allowed a handful of tycoons to amass enormous riches.

Mr. Vucic, the first deputy prime minister, has accused Mr. Miskovic of giving monthly ”allowances” ranging from $40,000 to $65,000 to some 20 senior politicians, the Beta news agency reported. He has also accused Mr. Miskovic of trying to bring down the government to avoid closer scrutiny of his business. Mr. Miskovic’s company spokeswoman declined to comment on the accusations.

“Miskovic simply became too big for this little country to be tolerated,” said Dejan Anastasijevic, the Brussels correspondent for Tanjug, the Serbian national news agency. “The crony system in Serbia created him, and now the state is trying to restore the balance.”

Mr. Miskovic’s business empire took root under Mr. Milosevic, whom he briefly served as deputy prime minister, assigned to privatize Serbian industry. His aides said he had resigned because he disagreed with Mr. Milosevic’s tactics. Mr. Milosevic died in his jail cell in 2006 during his trial for war crimes.

After leaving the government, Mr. Miskovic founded a private company, Delta 2M, which thrived despite war and international sanctions by selling coveted consumer goods like toys, chocolates and roller skates. After Mr. Milosevic was overthrown, Mr. Miskovic assiduously aligned himself with the country’s pro-Western democratic reformers and expanded his empire.

But the past continued to haunt him. A 2007 cable from the American Embassy in Belgrade, obtained by WikiLeaks, the antisecrecy group, said that Mr. Miskovic had been “the beneficiary of egregious political corruption.” It suggested that Delta Holding had benefited from a questionable deal with Serbian customs in the 1990s. The cable also recommended denying Mr. Miskovic permission to visit the United States.

His fortune “was made on the backs of the Serbian people as they struggled through crippling sanctions and hyperinflation while he collected on their misery,” it said.

According to the cable, Yugoslavia’s customs chief at the time, a close ally of Mr. Milosevic’s, gave favorable treatment to Delta, most conspicuously a 45-day grace period to pay customs duties. At a time of rampant hyperinflation, it said the deal allowed Mr. Miskovic to store the goods at customs and to time their release when prices skyrocketed.

Ms. Milunov, the Delta Holding spokeswoman, said that all goods had been released as soon as they arrived in Serbia, and that all companies at the time had a 45-day grace period to pay duties provided they had a bank guarantee, which Delta Holding had. Moreover, she stressed that Delta Holding was not on a list of companies blacklisted by the United States and European countries in the late 1990s.

Mr. Miskovic, like many wealthy Serbs seeking to avoid international sanctions imposed in the 1990s, registered an offshore company called Hemslade Trading in the tax haven of Nicosia, Cyprus, and transferred his company’s profits there. Ms. Mulinov said that Hemslade was created in 1992 to support Delta Holding’s international business and that it paid all legally required Serbian and Cypriot taxes.

The son of a traveling shoe salesman who owned a farm in Bosnjane, a village in central Serbia, Mr. Miskovic is a former national track athlete, and studied economics.

On the Web site Who is Miroslav Miskovic? he recalled that when he tried as a young boy to make shoes, his taskmaster father was never satisfied. “These aren’t good enough,” he recalled his father saying, even when, as a prank, he handed him shoes that the elder Miskovic had made.

While his personal wealth is shrouded in secrecy, in 2007 Forbes magazine estimated his net worth at more than $1 billion. In 2001, Mr. Miskovic, who is married with two children, was kidnapped and released the next day after paying $5 million in ransom.

Mr. Anastasijevic, the Serbian journalist, said it remained to be seen whether the case against Mr. Miskovic would have a lasting effect on a system of patronage so entrenched and institutionalized that it could not be easily overcome.

“The question is whether this government is serious about reform, or whether a new Miskovic of the ruling party will merely replace him,” Mr. Anastasijevic said.

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« Reply #7951 on: Aug 05, 2013, 06:51 AM »

Goldman Sachs and London Metal Exchange sued over aluminium storage

LME and Goldman Sachs named as co-defendants in suit alleging 'anti-competitive and monopolistic behaviour'

Associated Press, Monday 5 August 2013 08.19 BST   

The London Metal Exchange and the investment bank Goldman Sachs are being sued in a US court over alleged anti-competitive and monopolistic behaviour in aluminium storage.

The metal exchange will fight the class-action lawsuit, which its management believes is without merit, the LME's owner, Hong Kong Exchanges and Clearing, said in a statement late on Sunday.

Wall Street banks are facing increased scrutiny of their involvement in businesses that store and transport commodities such as oil and aluminium.

The LME and Goldman Sachs are named as co-defendants in the suit alleging "anti-competitive and monopolistic behaviour in the warehousing market in connection with aluminium prices".

The lawsuit was filed on 1 August by lead plaintiff Superior Extrusion, a maker of aluminium tubing and beams, in US district court for Michigan, Eastern District.

A growing number of buyers have complained about rising metal prices stemming from long waiting times at warehouses.

To address those concerns, Goldman said last week that it is taking measures to make more aluminium immediately available to customers at its metal storage business, Metro International Trade Services, which operates under LME regulations.

The bank pointed out last week that "the overall delivered price of aluminium is down nearly 40% since its 2006 peak levels".

Hong Kong Exchanges, which operates the special administrative region's stock exchange, last year bought the LME, which approves and licenses a network of more than 700 metal storage facilities in 40 locations across the US, Europe and Asia.

Last month a US Senate committee held a hearing into whether banks should be allowed to control power plants, warehouses and oil refineries.

The bank JPMorgan Chase said last week that the possibility of new regulations was a factor behind its decision to consider selling some of its physical commodities business, which includes metals and energy. It has agreed to pay $410m (£268m) to settle accusations by US regulators that it manipulated electricity prices.

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« Reply #7952 on: Aug 05, 2013, 06:56 AM »

August 4, 2013

Iranian President Is Sworn In and Presents a New Cabinet of Familiar Faces


TEHRAN — Hassan Rouhani was sworn in as Iran’s president during a ceremony in Parliament on Sunday, after which he presented a new cabinet dominated by technocrats who had previously served under a moderate former president, Ali Akbar Hashemi Rafsanjani.

The cabinet must still be confirmed by Parliament.

“My government will be one of foresight and hope,” Mr. Rouhani said in a speech after his swearing-in ceremony, adding that his election showed that the Iranian people want “to live free,” and “are longing for change and progress, they want relief from poverty and discrimination.”

He faces a mountain of problems, including rampant inflation, diminishing revenues and foreign reserves, possible food shortages and new United States sanctions over the country’s nuclear program.

By choosing to stock his cabinet with old hands from the Rafsanjani years, Mr. Rouhani appeared to be looking to a more moderate past to solve current problems and plan for the future, analysts said. And he showed that the former president would wield considerable influence in the new government.

“Most key ministers have served under Hashemi-Rafsanjani,” said Nader Karimi Joni, a political analyst who has been critical of Iran’s leaders. “This shows his clear involvement.”

Mr. Rafsanjani, 78, wanted to run for a new term as president this year, but he was barred by the country’s Guardian Council, which said he was too old.

During the ceremony on Sunday, he sat smiling next to the incoming president.

Among the Rafsanjani protégés is the proposed minister of oil, Bijan Namdar Zangeneh, who is widely regarded as the modernizer of Iran’s oil industry, having invited in Western companies to help carry out the work. The incoming minister of housing, Abbas Akhondi, held the same position during Mr. Rafsanjani’s tenure, from 1989 to 1997.

The proposed head of the influential Ministry of Industries and Mines, Mohammad Reza Nematzadeh, is a former member of the Revolutionary Guards who is now strictly opposed to involvement by that organization in the economy.

Mr. Rouhani’s choice for foreign minister, Javad Zarif, raised the most eyebrows. Mr. Zarif, 53, has lived half his life in the United States, is a fluent English speaker and served from 2002 to 2007 as Iran’s ambassador to the United Nations. He was also part of Mr. Rouhani’s nuclear negotiating team, which in 2003 struck a deal with European nations to temporarily suspend uranium enrichment.

“These appointments mean Mr. Rouhani’s cabinet is technocrat-dominated and geared towards changing domestic and international affairs, like what we saw during Mr. Rafsanjani’s time,” Mr. Joni said.

Hinting that he was open to talks with the West, Mr. Rouhani emphasized that sanctions and even war would not change the minds of Iran’s leaders regarding the nuclear program.

“To have interactions with Iran, there should be talks based on an equal position, building mutual trust and respect, and reducing enmity,” Mr. Rouhani said. Speaking to the West, he added, “I hereby say this explicitly, that if you expect a suitable response, you should talk to Iran with respect, not the language of sanctions.” His words prompted loud applause from members of Parliament and other officials.

Officials close to the new president are saying that they want to see a first-step gesture from the United States, noting that Mr. Rouhani’s landslide victory has given him a broad mandate to negotiate with the West.

The White House released a statement on Sunday hailing the arrival of Mr. Rouhani, but it made no mention of concessions.

“The inauguration of President Rouhani presents an opportunity for Iran to act quickly to resolve the international community’s deep concerns over Iran’s nuclear program,” the statement read. “Should this new government choose to engage substantively and seriously to meet its international obligations and find a peaceful solution to this issue, it will find a willing partner in the United States.”


White House: U.S. will be ‘willing partner’ if Iran’s new president halts nuclear program

By Matt Williams, The Guardian
Sunday, August 4, 2013 13:50 EDT

The inauguration of the new president of Iran, Hasan Rouhani, presents “an opportunity” for Tehran to resolve concerns over its nuclear programme and better engage with the West, the Obama administration said on Sunday.

In a statement marking the formal handing over of power to the moderate cleric from his hardline predecessor, Mahmoud Ahmadinejad, the White House congratulated the Iranian people for “making their voices heard” and calling for “change”. It added that should the new government in Iran move towards meeting its “international obligations”, then it would find a “willing partner in the United States”.

But the apparent olive branch comes amid hawkish calls in Washington for tougher sanctions on Tehran and the possibility of military action if no resolution is found. In a letter sent to President Barack Obama, 76 senators demanded tougher economic punishment for Iran until the Islamic republic scales back its nuclear ambitions. It also urged Obama to keep all options on the table, while keeping the door open to diplomacy.

“Until we see a significant slowdown of Iran’s nuclear activities, we believe our nation must toughen sanctions and reinforce the credibility of our option to use military force at the same time as we fully explore a diplomatic solution to our dispute with Iran,” the letter states, according to a version seen by the Associated Press.

The letter comes just days after the House of Representatives overwhelmingly passed new restrictions on Iran’s oil sector and its mining and construction industries. Senators are expected to take up the same package in September.

The stance from Congress is at odds with that of the Obama administration, which has pursued a softer line on Iran as it transitions the presidency. Rouhani has pledged to follow a “path of moderation” and promised greater openness over Iran’s nuclear program. The White House appears willing to give the president a chance to put those pledges into action.

The White House statement said: “We note that President Rouhani recognised his election represented a call by the Iranian people for change, and we hope the new Iranian government will heed the will of the voters by making choices that will lead to a better life for the Iranian people. The inauguration of President Rouhani presents an opportunity for Iran to act quickly to resolve the international community’s deep concerns over Iran’s nuclear program.”

The US has long believed that Iran has been working to develop nuclear weapons. Iran insists its program is for peaceful energy and research purposes only.

The last round of talks between Iran and the wider international community over the issue broke down in April, with seemingly little progress. At that point, US secretary of state John Kerry hinted that negotiations could be heading towards a deadline, noting that the talks were not an “interminable process”. But the election of Rouhani has seemingly raised hopes of diplomatic solution to the impasse. © Guardian News and Media 2013


Israel’s Netanyahu lashes out at new Iranian president

By Agence France-Presse
Sunday, August 4, 2013 10:16 EDT

Israeli Prime Minister Benjamin Netanyahu lashed out at new Iranian President Hassan Rowhani on Sunday, saying that he shared his hardline predecessor’s aim of destroying the Jewish state.

“The president of Iran said the day before yesterday (Friday) that Israel is a wound on the body of Islam,” Netanyahu’s office quoted him as saying at the start of the weekly cabinet meeting.

“The president of Iran may have been changed but the aims of the regime there have not,” Netanyahu said.

“Iran’s intention is to develop a nuclear capability and nuclear weapons, with the aim of destroying the state of Israel.”

Rowhani formally took office on Saturday at a ceremony in which he received the endorsement of supreme leader Ayatollah Ali Khamenei, who retains the final say on all strategic issues, including nuclear talks with the the major powers.

Western governments suspect that Iran’s nuclear programme is cover for a drive for a weapons capability. Iran insists it is for power generation and medical purposes only.

Both the United States and Israel — which has the Middle East’s sole, if undeclared, nuclear arsenal — have refused to rule out a resort to military action to prevent Iran developing a weapons capability.

Rowhani succeeds Mahmoud Ahmadinejad, whose turbulent two-term presidency was marked by frequent outbursts against Israel.

Rowhani too took a swipe at the Jewish state during Friday rallies marking the annual Quds (Jerusalem) Day.

“In our region, a wound has for many years been sitting on the body of the Islamic world in the shadow of occupation of the holy land of Palestine and the dear Quds,” Rowhani said in remarks broadcast on state television.

He pledged allegiance to the Palestinian cause and rejection of Israel as a Jewish state, an unfaltering cornerstone of Iranian foreign policy since the 1979 Islamic revolution toppled the US-backed shah.

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« Reply #7953 on: Aug 05, 2013, 07:05 AM »

August 4, 2013

Hours to Go, Just to Get to Work


JAKARTA, Indonesia — For someone with dropping blood-sugar levels and in the early stages of dehydration, Eva Roma was rather stoic as she began her one-and-a-half-hour commute home from her office in central Jakarta.

Her journey started with an hourlong ride on a standing-room-only public bus, followed by 25 minutes in a minivan, and finally a five-minute walk to her house in the far southern confines of this Indonesian capital.

Once there, Ms. Roma, 33, a Muslim who works as a secretary at a financial services company, planned to buka puasa — break her fast in observance of the holy month of Ramadan. Getting to work the next morning would be even worse, since that trip usually takes two hours.

The daily commute, especially while refraining from eating or drinking all day, takes a toll, Ms. Roma said. But she has long since become inured to the physical realities of commuting in Jakarta, where horrific traffic and an inefficient public transportation system condemn many people to sitting in cars, buses and minivans or on motorcycles for four hours a day or longer, year-round.

“I’m stressed by it,” she said, “but since the government hasn’t done anything about it, we just have to deal with it.”

Jakarta, with a metropolitan area populated by 28 million people, remains one of the world’s few major cities without a rapid-transit system, despite plans dating to the 1980s. The closest substitute, the TransJakarta Busway, carries fewer than 400,000 people a day. And a dedicated bus lane during peak hours, when the roads are clogged, does not help, as cars, motorcycles and even government, police and military vehicles illegally drive over the tiny concrete barriers that are supposed to block it off, further delaying the buses.

It is no wonder, then, that 9.9 million cars, motorcycles, trucks and other vehicles take to the capital’s streets each workday, according to the Jakarta Transportation Agency, nearly two million of them from neighboring municipalities in the provinces of West Java and Banten.

But help may finally be on the way. Jakarta, the Indonesian government and consortiums of private investors are pouring $4 billion into public transportation infrastructure projects scheduled to start between this October and 2015. They include the first stage of a subway and aboveground rail system linking south and central Jakarta; two monorail projects; an express train to the airport from central Jakarta; and an elevated train circling the outskirts of central Jakarta that would connect to existing provincial commuter rail lines west, south and east of the city.

“There is always light at the end of the tunnel, and the tunnel is getting bigger,” Bambang Susantono, Indonesia’s deputy minister of transportation, said in an interview. “With the improvement in the economy in Indonesia, we have the space to undertake these projects.”

The political will is also there. For decades, the Indonesian government ignored transportation as a policy priority, but this changed after President Susilo Bambang Yudhoyono took office in 2004, said Milatia Kusuma Mu’min, head of communications for the Indonesian Transportation Society, an advocacy group. In addition, decentralization has enabled local leaders like Joko Widodo, Jakarta’s governor, to exercise more authority in pursuing public works projects, Ms. Mu’min said.

But with the first rapid-transit rail lines not scheduled to start operating for at least four years, and greater prosperity only adding to the numbers of cars and motorcycles on the roads, transportation experts warn that in the near term congestion is likely to worsen.

That prospect brings both hope and despair to Jakarta commuters and motorists.

“I think the Jakarta government can do something about it,” Ms. Roma said as she squeezed her way onto a packed TransJakarta bus for her trip home. “I have hope.”

Simon Hendiwan, 32, an office manager in central Jakarta, does not agree. Unwilling to deal with long lines and the stifling heat of commuter trains, he instead drives his Toyota Kijang Innova van to work each morning from this city’s eastern suburbs. It takes him 90 minutes to cover the nine miles.

“For Jakarta, there is no way out for the next five years, unless the government hurries up,” he said while filling up at a gas station before his commute home amid the late-afternoon Ramadan rush.

Ramadan only magnifies Jakarta’s traffic woes. About 90 percent of Indonesia’s 240 million people are Muslim, and during the holy month workers are allowed to leave their jobs early to meet friends and family to break their daytime fast.

This means that millions hit the streets around 3 p.m. and 4 p.m. Central Jakarta has resembled a parking lot each afternoon since Ramadan began on July 10. The daily scenes on Jalan Sudirman, the main north-south thoroughfare, include obscene gestures; near collisions as privately run buses cram into seemingly impossible gaps; and earsplitting honking that enrages traffic police officers as they try to keep things moving.

And then there is the monsoon season, in which heavy downpours have washed out the toll road to the international airport and left motorists sitting for hours.

Commuting times could be significantly shortened by keeping the TransJakarta bus lane clear of unauthorized vehicles. The same afternoon that Ms. Roma was trying to get home, the lane was so packed with cars that public buses were crawling along no faster than the bumper-to-bumper traffic in adjoining lanes.

As if to prove the point, Dian Anggraini, a 29-year-old door attendant on a TransJakarta bus, jumped off and scurried across the street to an ATM. Five minutes later, she got back on the bus, which had moved about 100 yards.

“Mostly, the problem is the traffic that comes into the bus lane — that’s what needs fixing,” Ms. Anggraini said after resuming her post. “Many of our customers actually say it’s easier for them to just take TransJakarta rather than deal with the madness outside.”

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« Reply #7954 on: Aug 05, 2013, 07:09 AM »

Fonterra botulism scare leads to import ban in China, Vietnam and Russia

New Zealand dairy giant's whey protein and milk powder banned after discovery of potentially deadly bacteria

Tania Branigan in Beijing, Monday 5 August 2013 09.09 BST   

Link to video: China: formula milk from New Zealand and Australia in bacteria fears

China, Vietnam and Russia have banned the import of milk powder and whey protein from the New Zealand dairy giant Fonterra after a botulism scare.

The company warned on Saturday that a batch of whey protein produced last year contained bacteria that could lead to the illness. The ingredient was exported to factories in China, Saudi Arabia, Vietnam, Thailand, Malaysia and Australia.

Chinese shops cleared hundreds of tonnes of food products from their shelves and officials in Wellington said Beijing had banned imports of all Fonterra milk powder and whey protein. They added that Moscow had banned all New Zealand dairy goods despite not receiving any of the affected products.

The US Centres for Disease Control and Prevention said botulism was a rare but serious paralytic illness which could be fatal. Symptoms included double vision, blurred vision, drooping eyelids, slurred speech, difficulty swallowing, dry mouth and muscle weakness.

The case is a blow to New Zealand, which has thrived on a reputation for high-quality food products. Dairy products account for about a quarter of its exports and the industry is worth £6.1bn. Fonterra is the world's fourth-largest dairy company and this year announced plans to build a new plant in China.

The scare is likely to cause particular concern in China, where consumers have increasingly turned to foreign products after numerous food scandals involving domestic goods.

Imported dairy goods are particularly popular because of the 2008 milk powder case, in which at least six infants died and 300,000 were made ill by melamine-tainted formula made by Sanlu.

Chinese customs data cited by state media said milk powder imports from New Zealand jumped 34.3% in the first half of this year, compared with the same period of 2012, to reach 371,000 tonnes. The country is New Zealand's biggest trading partner.

Fonterra's chief executive, Theo Spierings, told a press conference in Beijing on Monday that products containing the whey protein sold by Coca-Cola and the Chinese firm Wahaha – one of the country's biggest food producers – were safe.

"We regret the distress and anxiety which this issue could have caused," Spierings said. "Parents have the right to know that infant nutrition and other products are safe."

Fonterra said it had received no reports of any ill health linked to consumption of the affected products.

Coca-Cola said it had used 25kg (55lb) of the tainted protein in one batch of a Minute Maid drink that was shipped to three Chinese provinces, but that its own experts and external authorities had confirmed the products were safe.

"This is due to the ultra-high-temperature manufacturing process we use, and also the low acidity, which sanitises the final product," it said.

Wahaha was recalling affected products despite finding no signs of contamination in them, said the group's chairman, Zong Qinghou.

Other affected companies in China are Shanghai Tangjiu and Dumex Baby Food. Dumex had already sold more than 400 tonnes of milk powder products made with the affected whey protein, according to state media, citing Chinese safety authorities.

The New Zealand company Nutricia and Malaysia's Danone Dumex had also recalled some batches of baby milk.

Australian officials said they had quarantined potentially affected baby milk but did not believe it had gone on sale, while Thai officials were expected to make an announcement on Monday.

John Key, the New Zealand prime minister, questioned why the company waited until Friday to alert authorities to the risk. Tests highlighted a potential problem in March.

Fonterra said a product had tested positive in spring for Clostridium – the genus of bacteria which includes Clostridium botulinum, which causes botulism – but because most Clostridium strains are harmless it had had to carry out further tests to assess whether there was a risk.

In the 2008 melamine scandal, Fonterra blew the whistle on Sanlu, its Chinese business partner, after local officials failed to alert the central government to the contamination. That case prompted many Chinese families to turn to imported milk powder despite the higher cost.

Supermarkets in countries from Australia to the UK now limit how many cans of baby formula people can buy because Chinese visitors have been purchasing so many. Visitors to Hong Kong are greeted by announcements at the airport reminding them that they may not carry more than two cans to the mainland.

Yang Jing, a father from Zhengzhou in Henan province, said that he and his wife fed their child with imported Dutch milk powder and that the scare would not deter them from buying foreign formula.

He pointed out that unlike in the Sanlu scandal – where milk producers deliberately added melamine because it boosted their results in nutritional tests – the problems appeared to have occurred by accident.

"The problem was discovered by New Zealand, not China. I think the quality checking system in western countries is better than ours," he said.


Fonterra admits baby formula milk contaminated with toxic bacteria

New Zealand dairy company recalls infant formula as exports to China come under threat

Australian Associated Press, Monday 5 August 2013 04.30 BST   

Infant formula has been recalled in New Zealand and exports to China may be at risk after Fonterra revealed its whey protein had been contaminated with a toxic bacteria.

Fonterra announced on Saturday that some of its whey contained a bacteria that can cause botulism, which can cause nausea, diarrhoea and vomiting, paralysis or even death.

The powder has been exported to Australia, China, Malaysia, Saudi Arabia, Thailand and Vietnam.

China's quality watchdog has suspended imports of New Zealand milk powders and ordered importers to pull products from their shelves.

Fonterra's chief executive, Theo Spierings, has rushed to China for crisis talks, and the New Zealand trade minister, Tim Groser, said he would follow "at the drop of a hat" if he were advised that political talks were necessary.

In New Zealand Nutricia Karicare is recalling two products: Karicare Infant Formula Stage 1 (0-6 months) with batch numbers 3169 and 3170, and Karicare Gold+ Follow On Formula Stage 2 (6-12 months) with batch number D3183.

The recall was precautionary and none of its products indicated any contamination, Nutricia said.

Parents have vented their frustration on social media at the recall and changing advice, after initially being told only formula for children aged 6 months plus was affected.

"I am furious that there is a chance that your formula has be contaminated, I have changed brands as of last night, will not be ever using karicare formula agai," Catherine Bunting posted on Karicare's Facebook page.

Fonterra animal feed subsidiary NZAgbiz is recalling calf milk replacer found to contain the affected whey.

A small amount of affected product had been sold to customers in the North Island, but the majority was still in stock, NZAgbiz general manager Justine Pearce said. Expert advice confirmed the risk to animal health was low, she said.

Fonterra says all its eight affected customers have either recalled or deemed their products safe.

About 38 tonnes of whey protein concentrate manufactured at Fonterra's Hautapu plant in Waikato were contaminated by an unsanitary pipe in May 2012.

Testing in March indicated a problem, and the whey tested positive for clostridium botulinum on Wednesday.

Fonterra notified the Ministry for Primary Industries (Mpi) on Friday afternoon.

The batches of whey product have been used in 870 tonnes of products, Mpi acting director general Scott Gallacher said.

More than 60 staff from Mpi, the Minsitry of Foreign Affairs and Trade and the Ministry of Health are working on the response.

There have been no reports of children with botulism in New Zealand, health minister Tony Ryall said.

Fresh milk, yoghurt, cheese, and ultra-high temperature milk products are not affected.

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« Reply #7955 on: Aug 05, 2013, 07:11 AM »

Kevin Rudd pledges $450m boost to after-school care

Services could run from 7am till 7pm under prime minister's pitch to working families

Australian Associated Press, Monday 5 August 2013 10.28 BST   

Labor has made a pitch to working parents stressed by the daily school drop-off and pick-up, promising $450m to boost after-school care programs.

Kevin Rudd made the direct appeal to families on the first full day on the campaign trail.

"A kid's development doesn't just begin at 9am and end at 3pm," the prime minister told reporters in Canberra. "The government will give parents a further helping hand."

The extra funding will be provided under the government's Better Schools plan and go to about 500 schools looking to set up after-school care programs or extend what they now offer.

Rudd said services could open as early as 7am and run to 7pm, while extra hours might be provided during school holidays.

Additional places would be available in areas where parents needed access to such care.

New services, such as music programs, supervised sport and homework clubs, would also be encouraged, with grants of up to $200,000 available to schools – "the practical stuff which makes that time before and after school useful and a fun place to be as well."

The measures, to start next year, would benefit 345,000 children aged five to 12 years.

The prime minister said families who accessed the improved after-school services would still be eligible for the 50% childcare rebate.

The union representing after-hours care workers said the funding would help meet the dramatic increase in demand for services.

"This new $450m program will go a long way to improving services offered to families, which can only make a positive contribution to children's wellbeing and to women's workforce participation," said the president of United Voice, Michael Crosby.

The Women's Electoral Lobby said it would boost work opportunities for mothers.

"We know that women's career opportunities are hampered by a lack of access to flexible and appropriate care for school-age children," said the lobby's national chair, Melanie Fernandez.

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« Reply #7956 on: Aug 05, 2013, 07:16 AM »

August 4, 2013

In a West Bank Culture of Conflict, Boys Wield the Weapon at Hand


BEIT OMMAR, West Bank — Muhammad Abu Hashem, 17, was sleeping in a sleeveless undershirt when the Israeli soldiers stormed into his home here at 4 a.m. on the second Monday in July. As they led him away moments later, Muhammad’s mother rushed after with a long-sleeved shirt: they both knew it would be cold in the interrogation room.

It was Muhammad’s fourth arrest in three years for throwing stones at Israeli soldiers and settlers. His five brothers — three older and two younger — have all faced similar charges. Last year, three Abu Hashem boys, and their father, were in prison at the same time.

“Children have hobbies, and my hobby is throwing stones,” Muhammad explained weeks before his most recent arrest. “A day with a confrontation is better than a free day.”

As Israeli and Palestinian negotiators resumed peace talks last week in Washington, the stone throwers of Beit Ommar are a reminder of the abiding tensions that animate relations between the two peoples that would populate the imagined two states living side by side.

Youths hurling stones has long been the indelible icon — some call it a caricature — of Palestinian pushback against Israel: a recent United Nations report said 7,000 minors, some as young as 9, had been detained between 2002 and 2012. Here in Beit Ommar, a village of 17,000 between Bethlehem and Hebron that is surrounded by Jewish settlements, rock throwing is a rite of passage and an honored act of defiance. The futility of stones bouncing off armored vehicles matters little: confrontation is what counts.

When they are not actually throwing stones, the children here play Arabs and Army, re-enacting the clashes and arrests. And when 17-year-old Bilal Ayad Awad was released in June after 16 months in prison, he was welcomed like a war hero with flags and fireworks, women in wedding finery lining the streets to cheer his motorcade.

The Israeli Army commander in the area counts 5 to 15 stone-throwing incidents per week, and the July 8 arrest of Muhammad and his father, Ahmad, brought to 45 the number of Beit Ommar residents taken into custody since the beginning of 2013, 35 of them ages 13 to 19. A teacher at the local high school said 20 boys missed class while in prison last year. A few, including Muhammad, were out more than 60 days, forcing them to repeat a grade.

“Here, it is as if the intifada never stopped,” said Musa Abu Hashhash, a field worker for the Israeli human rights group B’tselem.

Beit Ommar, a farm town with roots in the Roman era, is a hot spot because of its perch off Road 60, the main thoroughfare from Jerusalem south to the settlements of Gush Etzion, which the Palestinians say have taken up to one-third of the village’s original 13 square miles.

The military, which since May has been joined by a company of border police to crack down, focuses on 11 prime stone-throwing points along the village’s mile-long stretch of the road. There are “the duo,” two houses teenagers hide between; “the stage,” a raised area; “the triangle,” an open field; and “the Molotov bend.” And then there is the 200-year-old cemetery that slopes up from the road just north of the village entrance.

On Thursday, after the burial of a 63-year-old retired teacher, a teenager hurled a rock at a passing car with yellow Israeli plates: whack. Another teenager, two more stones: another direct hit.

The settlers stopped their car, got out, and began shouting at the small crowd. Soon, there were soldiers, rifles raised and tear gas at the ready, who eventually hauled a Palestinian taxi driver into a waiting army jeep.

Menuha Shvat, who has lived in a settlement near here since 1984, long ago lost count of the stones that have hit her car’s reinforced windows. “It’s crazy: I’m going to get pizza, and I’m driving through a war zone,” said Ms. Shvat, who knew a man and his 1-year-old son who died when their car flipped in 2011 after being pelted with stones on Road 60. “It’s a game that can kill.”

For as long as anyone here can remember, the cemetery has been a field for that game. Residents said it was often surrounded by soldiers and filled with tear gas, though the military commander said he stations his troops across the road and instructs them to unleash riot-control measures only if violence erupts.

Muhammad sees it as his Islamic duty to help bury the dead, and he has his own funeral-preparation ritual. He pulls on boots. He sprays his hands with perfume to counteract the gas. He grabs a face mask, to protect his identity, and his muqlaa — a homemade slingshot.

It was the June funeral of a 2-year-old girl accidentally crushed by a relative’s bulldozer that led to his most recent arrest. “They were shooting gas, and I was with my mother in the car while the soldiers’ jeep was entering the town,” Muhammad admitted to a police officer after the arrest. “So I got out and threw stones at them.”

Musa Awad, a teacher at Beit Ommar’s high school, said that eight generations of his family are buried in the cemetery, but that he is one of many village residents who have stopped following funeral processions there because of the inevitable clashes. Two years ago, Mr. Awad said, he and his brothers offered to donate a patch of land for a new cemetery, far from the main road, but the Islamic authorities declined.

Mr. Awad, like many here, views the stone throwers with a mixture of pride at confronting Israel and fear for their safety. “Nobody dares to criticize them and say, ‘Why are you doing this?”

The youths, and their parents, say they are provoked by the situation: soldiers stationed at the village entrance, settlers tending trees beyond. They throw because there is little else to do in Beit Ommar — no pool or cinema, no music lessons after school, no part-time jobs other than peddling produce along the road. They do it because their brothers and fathers did.

Nasri Sabarna, an English professor who was Beit Ommar’s mayor for much of the past five years, remembers his first arrest vividly, despite the passage of four decades.

He was 14. Israeli soldiers had installed a plaque on his school saying it had been built under their supervision. He took the coins his mother had given him for food and bought black spray paint to cover the Hebrew letters.

“When I saw their language, it is not easy to stay and do nothing,” Mr. Sabarna recalled. “When they came on the second day, we have nothing except stones. You revenge for yourself.”

Of Mr. Sabarna’s eight children, only Ahmad, a 21-year-old engineering student, has been arrested: he is serving a six-month sentence that started in May, his fourth prison stay. When the youngest boy, Abdullah, started skipping school and throwing stones at age 7, after a night raid on the family home, his parents took him to see a psychiatrist to work out the anger.

“I want him to go to school, to study and to look for his future, but they are pushing us in the corner,” Mr. Sabarna said, referring to the Israelis.

Now 10, Abdullah uses binoculars a relative bought him for bird watching to monitor military movement. “I feel happy when I throw stones on the soldiers,” he said. “They occupy us.”

One Friday in July, two soldiers stood sentry on a hilltop several hundred yards inside the village. Five border police officers were stationed under an olive tree near the wholesale fruit market. More soldiers were on nearby rooftops, army jeeps in the middle of a road.

Three young men with slingshots crouched between trees, sending a little brother out to scout. They whipped the woven-string contraptions over their shoulders one, two, three, four times, then the stones disappeared in the distance. Two stones, five, seven. The boy reported that soldiers were coming closer. The young men retreated to a lower ridge.

Two soldiers with riot helmets and rifles appeared on a rock wall a few feet from where the stone throwers had been. Too late.

Three people from Beit Ommar were arrested in the wee hours of the following Sunday. That night, Muhammad Abu Hashem slept, while his father and younger siblings sat a vigil on worn couches on their roof.

The patriarch, Ahmad Abu Hashem, is an activist who videotapes arrests and clashes for the Center for Freedom and Justice, an advocacy group. His cellphone rang at 3:45 a.m.: 13 jeeps were entering the village. He was heading out to follow them when the alley filled with shouts of “Soldiers, soldiers!” They were coming for him — and his son.

It had been only a few weeks before when a gaggle of neighborhood children were scurrying around the same alley playing Arabs and Army.

By Heather Murphy, Sandra Stevenson and Jodi Rudoren

Boys wearing fatigues and toting toy guns kicked on the front door and Mr. Abu Hashem opened it, smiling. While one of the “soldiers” checked his green ID card, another imitated a defensive military maneuver to secure the house. “It is a wrong ID,” a boy said in a mixture of Arabic and Hebrew. “Where is Muhammad Abu Hashem?”

Muhammad appeared at the doorway, and was blindfolded with a black sweatshirt. “Come with us,” the soldier-boy ordered. “You are under arrest.” Girls’ screams of mock horror were punctuated with giggles as Muhammad vanished into the midnight darkness.

“You are lucky if you meet Muhammad here next week,” his father said. “He can be arrested for real any moment.”

That was what Muhammad told the girl he talks to daily by telephone and sneaks glances at on evening ambles through the village: “ ‘Be careful, I am maybe one month outside and 10 months in prison.’ She said, ‘O.K., I am waiting for you.’ ” He did not tell the girl, in June, when his left leg was sprayed with five rubber-bullet fragments as his stones smacked an army jeep carting away a beloved cousin.

Muhammad captures the contradictions of growing up here. He was tickled at the first salon-slicking of his short hair for a relative’s recent wedding. But he shunned a snack of popcorn outside: prison food.

He recently sneaked into a settlement before dawn to steal apricots he finds especially delicious because they grow on land he sees as stolen from his people. One of his hobbies is rescuing abandoned bird eggs and nurturing them in cages warmed by light bulbs until they hatch.

“When they fly,” he said, “it’s like a person in prison, and he will take his freedom.”

Muhammad’s first arrest was in October 2010: his family paid a fine of about $1,400. He was jailed from April to June of 2012, then returned to prison that September for another seven months. Graffiti welcoming him back remained on the outer wall of the family home as a dozen soldiers arrived July 8.

By Heather Murphy, Jodi Rudoren and Sandra Stevenson

Excerpts from Muhammad Abu Hashem's interrogation by the Israeli police along with photos of his arrest.

Two soldiers crouched in the driveway and 10 crowded the living room. Muhammad crammed on a couch with his two younger brothers and a cousin while the soldiers examined his father’s identification. Then they asked for his.

The whole operation took eight minutes. The jeeps had not left the alley when it erupted in stones.

Defense for Children International, an advocacy group that last year documented 360 cases of arrested Palestinian youths, found that many were blindfolded, beaten and threatened during interrogations. Most confessed, and 90 percent received jail sentences in Israel’s military system, according to the report, compared with 6.5 percent of arrested Israeli children, who are prosecuted in a civil system.

When Muhammad and his father appeared for their first hearing, they raised their wrists — handcuffed together — in something of a salute. The teenager’s face was a mixture of triumph and terror: he could face up to 10 months after a trial scheduled to start Aug. 18.

Their lawyer, Nery Ramati, soon discovered that Muhammad had already admitted throwing a stone during the girl’s funeral.

“I have nothing to do for him now,” Mr. Ramati sighed.

Rina Castelnuovo, Nayef Hashlamoun and Khaled Abu Aker contributed reporting.


August 4, 2013

Israeli Decree on West Bank Settlements Will Harm Peace Talks, Palestinians Say


JERUSALEM — With peace talks scheduled to begin next week, an Israeli cabinet decision involving West Bank settlements on Sunday drew condemnation from the Palestinian leadership, highlighting the fragility of the Washington-brokered effort to resume long-stalled negotiations.

The cabinet decision added a number of Jewish settlements in the West Bank territory that Israel seized in the 1967 war to a “national priority list” of communities eligible for extra subsidies for education, housing, infrastructure projects, cultural programs and sports, along with better mortgage rates and loans for new homeowners. The United States, along with most of the world, considers these settlements illegal, and some of them sit in the heart of the area imagined as a future Palestinian state.

“The Israeli government has approved a confidence-destruction measure,” Hanan Ashrawi, a member of the Palestine Liberation Organization’s executive committee, said in a statement. “Israeli attempts to grab more Palestinian land and to provide settlers with preferential treatment will not be tolerated.” The Associated Press quoted Ms. Ashrawi as saying that the decision would have “a destructive impact” on the talks.

In a routine annual move, the cabinet approved a list of more than 600 Israeli communities — about 90 of them West Bank settlements — eligible for the benefits, based on criteria like socio-economic status, location near Israel’s borders, security vulnerability and newness. Among the newcomers to the list are three formerly illegal outposts — Bruchin, Rachelim and Sansana — that obtained government recognition last year.

Tzipi Livni, the Israeli minister leading the negotiations, was one of four cabinet members who abstained from voting.

Mark Regev, a spokesman for Prime Minister Benjamin Netanyahu, denied that the decision encouraged or expanded West Bank settlement, noting that it required an additional vote before any actual benefits were granted to those communities. “The decision today changes nothing on the West Bank,” Mr. Regev said. As for the timing, Mr. Regev said, it “was determined by the legislative process and the legal process” and had nothing to do with the peace process.

After an aggressive push by Secretary of State John Kerry that included six rounds of shuttle diplomacy in the region, Israeli and Palestinian negotiators met last week in Washington, starting a nine-month process whose goal, Mr. Kerry said, is a final agreement in the long-running conflict. Negotiators plan to meet next week in Jerusalem or Jericho to plan for tackling the contentious issues of borders, security, refugees, water and the future of Jerusalem, which both Palestinians and Israelis see as their capital.

Mr. Netanyahu presides over a coalition government that includes many right-wing settlement supporters, and he refused to formally freeze settlement construction — as he did in 2010 — as a condition for restarting talks.

The dispute over the priority map is the latest in a series of hiccups in recent months involving settlements. Mr. Netanyahu has not allowed any new housing tenders to be issued in the West Bank, but on several occasions, already-approved projects advancing in the development process have raised questions among Palestinians, Americans, and left-leaning Israelis over his seriousness about negotiations.

“The National Priority List provides a clear example of the Israeli government choosing to incentivize and encourage Israeli citizens to immigrate into the settlements, especially into deep, isolated settlements that will not be included in any sort of peace agreement,” the anti-settlement group Peace Now said in a statement. “This is not only illegal under international law, but it brings into question whether this government is truly ready to negotiate in good faith.”

Gabby Sobelman contributed research.

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« Reply #7957 on: Aug 05, 2013, 07:19 AM »

As oil-rich Chad splashes the cash it must beware white elephant projects

Ten years after Chad's oil came onstream, large infrastructure projects disguise a country failing to fruitfully invest its revenue

Celeste Hicks in N'Djamena, Monday 5 August 2013 07.00 BST   

Four years ago, residents of Koudalwa village, near Bongor in south-western Chad, noticed 4x4 vehicles carrying Chinese people into the bush. They were searching for a good spot to build a central processing facility for their oil extraction project, having bought oil wells from Encana, a Canadian company.

Today, the enormous twin storage tanks of the facility glint in the sunlight, pipelines stretch far into the distance, and a constant roar and a whiff of petrol remind villagers of the gas flare that burns day and night a few kilometres away. A pipeline stretches 300km to a refinery built by the Chinese at Djermaya, near the capital, N'Djamena, and locally produced fuel has been on the market since 2011.

"I don't understand how the oil is being extracted on my doorstep, yet by the time it reaches me it's more expensive than before!" says Abangar Basswa, a resident of Koudalwa, reflecting local people's frustration that the cost of bringing refined fuel back to the Bongor region in tankers along rough roads means that any benefit from its original, cheaper price has been lost.

Not much has changed since the oil project started, but Basswa is happy that the village has a new school and several water pumps, thanks to China National Petroleum. "Like everyone, we just want the best future for our kids," he says.

A few hundred kilometres further south lies Doba, the first oil-producing town of southern Chad. Esso started work here (pdf) 10 years ago and extracts about 100,000 barrels per day (bpd) from the nearby Kome field. More than 5,000 Chadians have jobs at the facility, which is by far the biggest private sector employer in the country.

When Chad's oil project began in 2003, it was with World Bank support for a ground-breaking attempt to ensure that most of the revenue would be used for poverty reduction and social development. One aspect of this deal was that 5% of royalties were earmarked for developing the Doba producing region, decided by an appointed regional committee. One of the projects they pushed for was a university.

Sitting in a sparsely furnished office, the university's vice-rector, Hamdi Mahamat, admits a lot of work needs to be done. "We're really happy, but two years after we opened we still don't have enough benches for the students and the library doesn't have a single book," he says.

Like several of the projects the committee approved, the university has been called a white elephant. Critics have asked why a town of 50,000 people needs a university, particularly when only about 6,000 students nationally passed the annual baccalaureat exams this year. "Go and ask the people who came up with the idea," says Mahamat with a smile. "I just manage it."

Stories like this abound in Chad, which has earned $10bn (£7bn) since oil began to flow. This massively outweighs original projections of about $2.5bn for the 30-year life of the project, and even that was expected to swamp the economy (GDP per capita was $271 in 2000).

There's clearly no shortage of cash, but, after 10 years of elevated income, the country still performs poorly across a host of development indicators – literacy is 34%, under-five mortality 169 per 1,000 live births, and the country was 184th out of 187 in the UN's latest human development index. There is a chronic lack of skilled professionals – a handful of gynaecologists, one psychiatrist and a few hundred midwives, for example.

Civil society is quick to accuse the government, and in particular the president, Idriss Déby, of prioritising easy infrastructure projects such as roads and buildings, such as Doba University and a 25,000-seat sports stadium. "We don't deny there are physical changes but there's no point having a school if there are no teachers to work there," says Therese Mekombe, president of Chad's women's jurist association.

"Most countries have a fixation with infrastructure, especially when there's a windfall," says Alan Gelb, senior fellow at the Center for Global Development. "Part of it is genuine, because there can be a physical transformation, but governments often end up paying a very high price and there is a tremendous opportunity for corruption through the contracts-issuing process."

In Chad a "college" of civil society, ministry representatives and MPs has responsibility for vetting government spending plans and trying to control this tendency towards undisciplined spending. However, the nine-member body is appointed by the government.

The vice-president of the college, Ahmed Christian Diemathou, is defensive: "Have you seen one person who doesn't like the way that N'Djamena looks these days? It is a modern city." However he acknowledges that in 10 years not one request for funds for staff training or professional education has been submitted.

Estimates suggest Chad's oil could be exhausted by 2030, and Esso has experienced a sharp fall in productivity (pdf), from 225,000 bpd in 2003. The IMF has been vocal about the economy's heavy dependence on oil, while other key sectors such as agriculture are ignored. When oil prices crashed in 2009, the government's fiscal situation was precarious as it had already committed to infrastructure projects based on expectations of high prices.

"Countries need to save for the future and programme that into annual budgets," says Gelb. "The first step is to get a handle on spending. But discipline is really hard."

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« Reply #7958 on: Aug 05, 2013, 07:21 AM »

Ethiopia's sesame seed trade with China – a partnership of equals?

Ethiopia uses sesame seeds to repay loans on Chinese-built infrastructure. But what are the long-term benefits to farmers?

Tom Levitt   
Wednesday 10 July 2013 11.17 BST   

It seems unlikely that many Ethiopian farmers sat down and thought about what Chinese consumers want to eat for breakfast before planting their crops. Yet a surge in the eastward export of sesame seed over the past decade has created an unexpected interdependency between the two countries.

In less than a decade, Ethiopia has jumped from being a minor producer of sesame (38,000 tonnes in 2002, according to the UN's Food and Agriculture Organisation) to the largest producer in Africa and fourth largest in the world (320,000 tonnes in 2011, according to the most recent data available). During the same period, China has switched from being a net exporter to a net importer, providing the main destination for Ethiopia's sesame seeds.

Sesame seeds perhaps rank among the lesser known of China's growing food imports, lacking the headline-grabbing attention of Brazilian soyabeans. Black sesame paste, eaten at breakfast, lunch and dinner, is a popular snack among many southern Chinese people. It is made by mixing roast and ground sesame seeds with sesame oil; a sweeter version can be made by adding sugar or honey. Its use as a popular baking ingredient aside, sesame seed can be used as an oil or a high-protein feed for poultry.

Ethiopia has long produced sesame, but as China's economic ties with the country and elsewhere in Africa have grown, so has seed production. For Ethiopia, Chinese ties have meant an increase in Chinese manufacturing imports, and access to finance and new infrastructure. In January, the China Development Bank provided a $25m loan to finance agricultural enterprises. In May, the Export-Import Bank of China agreed to provide $3.3bn to build a railway from Ethiopia to Negad port in Djibouti.

In return, Ethiopia has effectively been using sesame seeds to repay Chinese loans. Foreign currency earned by selling sesame is passed over to the state-owned Commercial Bank of Ethiopia and used to secure and repay loans provided by China, according to Deborah Bräutigam, senior research fellow at the International Food Policy Research Institute. The relationship is likely to have started in 2005-06 as a shortage of sesame seeds in China and a favourable tariff policy (set by China) kickstarted the rise in Ethiopian exports, which are regulated largely by the state-owned Ethiopian commodities exchange.

Bräutigam says China is unlikely to have stipulated that Ethiopia export its sesame, which is now its second most valuable export after coffee. "The 'guaranteed supply' of whatever export is already going to China is simply the mechanism for ensuring repayment of the loan," she says.

However, the growth of sesame seed production on the back of Chinese demand is such that traders expect Ethiopia to earn $2bn a year from exports of seeds, spices and pulses by 2015, according to reports.

Among Ethiopian farmers the main beneficiaries appear to be smallholders, with sesame largely grown as a cash crop on farms producing less than 400kg a year, according to Jo Wijnands, a researcher at the Agricultural Economics Research Institute.

"Production has gone up very quickly," says Wijnands, "but I don't think the huge increases have come through efficiency of production, but with much more land being given over to it. The farmers have seen good prices from the previous year, so they have expanded their area. Demand could change quickly, but I don't think it'll change much in the next five years because of demand from China."

You could argue that sesame seed farmers are generating cash for themselves, at the same time as helping to finance Ethiopia's infrastructure. However, Wijnands is sceptical about the long-term benefit of the increased trade. He says there is little evidence of improvements in agricultural techniques in smallholder sesame seed production. An Oxfam report from 2011 said more than 600,000 smallholder farmers produced sesame seeds in Ethiopia, but still faced difficulties including seed shortages, poor product quality and access to finance.

Recent news of a Chinese shoemaker promising a $2bn investment in a new manufacturing hub near Addis Ababa, the capital, is perhaps more indicative of the benefits Ethiopia hopes to reap from its closer alliance with China. As the Ethiopian prime minister, Hailemariam Desalegn, made clear in a speech during his recent visit to Beijing, his country does not want a lopsided relationship.

"Africa should not be a net exporter of primary commodities and net importer of capital goods whether from China or elsewhere … China has both the responsibility and the incentive, as it has already begun to do, to turn Africa's resource curse into a blessing that will further enhance the mutual interest of both partners."

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« Reply #7959 on: Aug 05, 2013, 07:23 AM »

How China is educating Africa – and what it means for the west

In an extract from a new book, China's aspirational approach to education and investment in Africa is distinguished from the west's focus on basic needs

Stephen Chan   
Monday 13 May 2013 07.00 BST     

The da xue (Mandarin: the big study, or the big reading) or dai ho(k) (Cantonese: the big learning) are Chinese terms for a university. In the romance of the "old days", learning was the only way to bypass the class system. China's annual imperial exams allowed even the poorest subject to step outside his poverty and feudal status to become an official. When, later, learning became concentrated in universities, the institutions became prestigious and symbolic. They were the portals of escape.   

With this in mind, it is amazing that Chinese aid to Africa has not seized earlier upon the building of universities. The addition of universities was unremarked in the original Chinese proposal for the Democratic Republic of the Congo (DRC) in 2008. China pledged a $9bn loan, $3bn of which was to develop mines, over which China entered a 68/32% joint venture involving Sinohydro Corporation and DRC's previously almost defunct Gecamines; and $6bn was for infrastructure, with China Railway Engineering Corporation playing a major role.

The Chinese expected to gain 6.8m tonnes of copper and 620,000 tonnes of cobalt over a 25-year period. However, China would also build huge expanses of road and railway and, along those transport routes, a large number of clinics, schools and universities. It was an unheard-of proposal; it would have transformed development in the south of DRC, with provision for a huge increase in the national pool of trained personnel; and it thoroughly alarmed the west, which saw an exponential increase of Chinese influence in central Africa.

Using the IMF as a battering ram, and insisting upon the priority of its own development assistance programme, the west succeeded in reducing the Chinese package to $6bn. At the time of writing, it is unclear how many elements of infrastructure have been sacrificed in this reduction. But it still means 2,400 miles of road, 2,000 miles of railway, 32 hospitals, 145 health centres and two universities. On this occasion, there was a keen symmetry between Chinese and African aspiration – and this included both the benefits and the prestige of higher education.

Western assistance has always prioritised primary schooling, but the Chinese approach in this instance recognised something beyond foundational competencies. It recognised the need for educational foundations for international competitiveness – albeit in a distant future. In the meantime, it recognised the psychological foundation a university degree confers in situations of underdevelopment. The graduate is credentialised as having escaped the structural constraints of poverty upon his or her capacity to understand and interrogate the world. In the backwaters of southern DRC, this has the psychological impact of a huge achievement.


To an extent, the west has returned to the "basic needs" template – that the emphasis should be on clean water, housing and the like. "Assured subsistence" might be another coinage. The current emphasis on millennium development goals is a sophisticated development of this template, and gender equality is really the only key addition and difference. The goals are not only a set of targets; they constitute a ceiling. The aim is very much to ensure a level of development that prevents slippage into underdevelopment; it is not to take any part of Africa into a millennium in which, like China, it challenges the west.

The west is not providing aid to develop a competitor. Nor are the Chinese. But the image of China, precisely as a competitor to the west, is a deeply attractive one. So China as a developed economic and technological power is an aspirational model. What this aspiration envisages in Africa is the right to manufacture, to the industrialisation of products, to beneficiation. By and large, the Chinese are not providing this, just as the west did not.

However, in so far as joint ventures might be possible between such African industrial concerns that exist and Chinese ones, the outlook for co-operation in automotive manufacture in South Africa is, while hardly consolidated, a prospective one. So that when the west looks upon current Sino–African relations with alarm, it should be mindful that, perhaps, it is alarmed by a stage one, and might be even more alarmed by the possibility of a stage two. This stage could not provide competition with China, but it could in certain sectors provide competition with the west. The processing of coffee and cocoa, for instance, would not compete with Chinese concerns but would destabilise processing plants in Europe.

The upward spiral of this moves on to petroleum refineries across all African oil producers, but also local build of pipes for pipelines. Chinese assistance with steel plants is a key outlook for the future. But these would be best suited to joint ventures, and this would require the upgrade of local capacities as well as local investment. It would also require, as co-operation became more sophisticated, shared senior management. A working joint Sino–African company board of a major enterprise would have to become more than a rare event.

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« Reply #7960 on: Aug 05, 2013, 07:25 AM »

Morgan Tsvangirai loses hope following election defeat

Recent challenger for Mugabe's presidency brands result 'coup by ballot', hinting that a popular uprising may be way forward

David Smith, Africa correspondent
The Guardian, Sunday 4 August 2013 19.13 BST

Morgan Tsvangirai, striving to overturn his defeat in Zimbabwe's presidential election, has given his biggest hint yet that a popular uprising is the only option left for resisting the regime of the president, Robert Mugabe.

According to the national election commission, Mugabe won 61% of the vote compared with Tsvangirai's 34%. The result was branded a "coup by ballot" by the opposition leader. But on Sunday the polls result was endorsed by South Africa, leaving Tsvangirai isolated and fast running out of alternatives.

"Revolutions are not called by leaders," Tsvangirai, head of the Movement for Democratic Change (MDC) told South Africa's eNews Channel Africa. "Revolutions are something that is inside, and if you've got something inside and it drives you to do something, then nothing can stop you. In this case, there's no strategy for the leadership of the MDC. We've told people, there's been a subversion in 2002, there's been a subversion in 2008, there's a subversion now. The power is in your hands. It cannot be a revolution by the leadership."

The MDC has consistently renounced violence and resisted calls to organise street protests against what it regards a stolen election. But last week Roy Bennett, the party's treasurer-general who is exiled in South Africa, called for a campaign of passive resistance to bring the country to a standstill.

Other officials floated the idea of a mass prayer meeting. But Harare, the capital, was calm on Sunday with many residents going to church as usual.

In his eNCA interview, Tsvangirai, 61, added: "Remember that this democratic struggle has been a struggle with so many frustrating episodes. For me, I think this is the most frustrating event of my life because I thought that like everyone else in the world, president Mugabe, Zanu-PF, would respect Zimbabweans. But I have seen that they have no respect for Zimbabweans. They have respect for themselves and their power."

Mugabe's Zanu-PF party also won three-quarters of the seats in parliament, leaving the MDC at one of the lowest ebbs in its 14-year history. Party members have complained about the printing of surplus ballot papers, irregularities in the voters' roll, traditional leaders "frogmarching" villagers to the polls, people feigning illiteracy to be "assisted", voters being bussed to faraway constituencies, and the malign influence of the military.

"It's not the reflection of the will of the people," said Tsvangirai, who was prime minister under Africa's oldest leader in an uneasy coalition government. "I don't think that even those in Africa that have committed acts of ballot rigging have done it such a brazen manner."

He spoke as a division between Africa and the west opened up over the integrity of last week's polls. The UK, US and Australia lined up behind Tsvangirai while the African Union and South Africa took 89-year-old Mugabe's side in what critics saw as a sacrifice of principle for the sake of regional stability.

Following deep reservations expressed by William Hague and John Kerry, Australia's government called for a re-run of the election, warning that it would not lift sanctions unless free and fair polls were held.

The foreign minister, Bob Carr, said: "Given our doubts about the results, Australia calls for a re-run of the elections based on a verified and agreed voters roll."

But the South African president, Jacob Zuma, who has led the Zimbabwe mediation process in recent years, offered "profound congratulations" to Mugabe.

His office said Zuma "urges all political parties in Zimbabwe to accept the outcome of the elections as election observers reported it to be an expression of the will of the people".

The verdict comes as a hammer blow to the MDC which has previously praised Zuma for taking a tougher line against Mugabe than his predecessor, Thabo Mbeki. In effect it destroys Tsvangirai's last hope of appealing to the southern African regional bloc to intervene and nullify the election. It also leaves Britain and its western allies marginalised.

South Africa's main opposition party, the Democratic Alliance, gave a scathing response. The shadow foreign minister, Ian Davidson, said: "By congratulating Robert Mugabe on his stolen election president Zuma has failed Zimbabwe, failed Zimbabweans and failed the Southern African Development Community by not providing the leadership that the region desperately required.

"President Zuma's congratulations are not only extremely premature, given the very serious irregularities that have been noted in the elections, but shamefully legitimise undemocratic practices during elections, and send a message that significant irregularities will be tolerated by his administration."

In Zimbabwe, independent domestic monitors said the polls were "seriously compromised" by registration problems that may have disenfranchised up to a million people.

The anti-corruption watchdog Global Witness has alleged that state diamond revenues were spent on securing Mugabe's re-election.

Zanu-PF has rejected all vote-rigging allegations but on Saturday one of the nine members of the election commission resigned over the way it was conducted.

The commissioner, Mkhululi Nyathi, said in his resignation letter: "While throughout the whole process I retained some measure of hope that the integrity of the whole process could be salvaged along the way, this was not to be."

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« Reply #7961 on: Aug 05, 2013, 07:30 AM »

Soon heading to the International Space Station: A talking ‘companion’ robot

By Maev Kennedy, The Guardian
Sunday, August 4, 2013 12:50 EDT

When the Japanese astronaut Koichi Wakata arrives at the International Space Station in November, a companion will be waiting for him whose eyes will light up in recognition – literally.

Kirobo, the world’s first talking humanoid space robot, has already taken off – in the nattiest red Wellingtons since Paddington Bear – and should arrive at the space station by 9 August to await Wakata’s arrival. It knows he is coming: it has been programmed to recognise his face, and greet him warmly in Japanese.

Its name comes from the Japanese words for hope and robot, and its task is momentous for a kilo of superbly engineered plastic and a bundle of plug leads: nothing less than to supply emotional warmth and companionship.

Kirobo was fired into space from the Tanegashima space centre in southern Japan, zipped into a specially designed travelling case, along with 3.5 tons of more conventional supplies and equipment.

Although Kirobo stands just 34cm tall, weighs slightly less than a kilo, and is modelled on a beloved Japanese cartoon figure, Astro Boy, it would be quite wrong, indeed grossly offensive, to describe it as a toy. It will also relay messages and commands from the control centre to Wakata, and keep records of all their conversations.

Its developer, Tomotaka Takahashi, said: “Kirobo will remember Mr Wakata’s face so it can recognise him when they reunite up in space. I wish for this robot to function as a mediator between a person and machine, or a person and the internet, and sometimes even between people.”

It has been extensively tested over the last year, including in zero gravity conditions, and has an Earth-bound twin called Mirata which can monitor any problems in space. When the two robots were introduced to the media last month, Mirata said: “It’s one small step for me, a giant leap for robots.”

Generally robots in space have had a bad press, from the sarky C-3PO in the Star Wars series, to Marvin the Paranoid Android in the Hitchhiker’s Guide to the Galaxy, his systems almost fused with depression at having to apply his “brain the size of a planet” to interacting with pathetic human beings.

HAL 9000, (Heuristically programmed Algorithmic), the computer in 2001: A Space Odyssey, Stanley Kubrick’s film of the Arthur C Clarke novel, could do face recognition like Kirobo, but not necessarily face liking: it decided to kill its astronauts when they planned to disconnect it.

The robot dog in Doctor Who, K-9, although resembling a bread bin on casters, was closer in temperament to Kirobo, and allegedly at one point was in danger of being consigned to the crusher lest viewers find him more appealing than the Time Lord.

Before blast off, Kirobo told a press conference it had a dream of a society where humans and robots could get along together. Fuminori Kataoka, project manager from Toyota, which backed the project to make Kirobo, said they believed back on planet earth children and the elderly might benefit from such robots, endearing little machines which would really listen – and respond with entranced attention.

Click to watch: © Guardian News and Media 2013

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« Reply #7962 on: Aug 05, 2013, 07:52 AM »

In the USA...

Greenwald: Congress ‘forced to learn about what the NSA is doing’ from newspapers

By David Edwards
Sunday, August 4, 2013 13:31 EDT

Guardian columnist Glenn Greenwald on Sunday chided the U.S. government for claiming it had provided “robust oversight” of the National Security Agency (NSA) even though members of Congress were forced to go to his paper to learn about secret programs that gather data on American citizens.

In an interview with ABC’s Martha Raddatz, Greenwald pointed to his Sunday Guardian column that explains how “members of Congress have been repeatedly thwarted when attempting to learn basic information about the National Security Agency (NSA) and the secret FISA court which authorizes its activities.”

“We keep hearing that there’s all kinds of robust oversight by Congress,” Greenwald said, adding that lawmakers had provided “very detailed letters trying to get this information and they’re being blocked from getting it and they’ve said, and other members have said that they are forced to learn about what the NSA is doing from what they’re reading in our reporting.”

“I think the most amazing thing, one of the most amazing things in this whole episode, Martha, there is a 2011 opinion, 86 pages long from the FISA court, that ruled that much of what the NSA is doing which is spying on American citizens is both unconstitutional in violation of the Fourth Amendment and illegal, a violation of the statute,” he continued. “This opinion remains a complete secret. The FISA court has said they have no objection to having it released, but the Obama administration insists it has to be secret.”

“Both members of Congress and others have been requesting simply to read that court opinion. And the intelligence committee that is led in the House by Mike Rogers (R-MI) and Dutch Ruppersberger (D-MD), who represents the NSA district, receives all kinds cash from the defense and intelligence agencies, industries, have refused to allow them access.”


Secretive Drug Enforcement Agency (DEA) unit told to cover-up massive spy program used to investigate Americans

By Reuters
Monday, August 5, 2013 7:37 EDT

By John Shiffman and Kristina Cooke

WASHINGTON (Reuters) – A secretive U.S. Drug Enforcement Administration unit is funneling information from intelligence intercepts, wiretaps, informants and a massive database of telephone records to authorities across the nation to help them launch criminal investigations of Americans.

Although these cases rarely involve national security issues, documents reviewed by Reuters show that law enforcement agents have been directed to conceal how such investigations truly begin – not only from defense lawyers but also sometimes from prosecutors and judges.

The undated documents show that federal agents are trained to “recreate” the investigative trail to effectively cover up where the information originated, a practice that some experts say violates a defendant’s Constitutional right to a fair trial. If defendants don’t know how an investigation began, they cannot know to ask to review potential sources of exculpatory evidence – information that could reveal entrapment, mistakes or biased witnesses.

“I have never heard of anything like this at all,” said Nancy Gertner, a Harvard Law School professor who served as a federal judge from 1994 to 2011. Gertner and other legal experts said the program sounds more troubling than recent disclosures that the National Security Agency has been collecting domestic phone records. The NSA effort is geared toward stopping terrorists; the DEA program targets common criminals, primarily drug dealers.

“It is one thing to create special rules for national security,” Gertner said. “Ordinary crime is entirely different. It sounds like they are phonying up investigations.”


The unit of the DEA that distributes the information is called the Special Operations Division, or SOD. Two dozen partner agencies comprise the unit, including the FBI, CIA, NSA, Internal Revenue Service and the Department of Homeland Security. It was created in 1994 to combat Latin American drug cartels and has grown from several dozen employees to several hundred.

Today, much of the SOD’s work is classified, and officials asked that its precise location in Virginia not be revealed. The documents reviewed by Reuters are marked “Law Enforcement Sensitive,” a government categorization that is meant to keep them confidential.

“Remember that the utilization of SOD cannot be revealed or discussed in any investigative function,” a document presented to agents reads. The document specifically directs agents to omit the SOD’s involvement from investigative reports, affidavits, discussions with prosecutors and courtroom testimony. Agents are instructed to then use “normal investigative techniques to recreate the information provided by SOD.”

A spokesman with the Department of Justice, which oversees the DEA, declined to comment.

But two senior DEA officials defended the program, and said trying to “recreate” an investigative trail is not only legal but a technique that is used almost daily.

A former federal agent in the northeastern United States who received such tips from SOD described the process. “You’d be told only, ‘Be at a certain truck stop at a certain time and look for a certain vehicle.’ And so we’d alert the state police to find an excuse to stop that vehicle, and then have a drug dog search it,” the agent said.


After an arrest was made, agents then pretended that their investigation began with the traffic stop, not with the SOD tip, the former agent said. The training document reviewed by Reuters refers to this process as “parallel construction.”

The two senior DEA officials, who spoke on behalf of the agency but only on condition of anonymity, said the process is kept secret to protect sources and investigative methods. “Parallel construction is a law enforcement technique we use every day,” one official said. “It’s decades old, a bedrock concept.”

A dozen current or former federal agents interviewed by Reuters confirmed they had used parallel construction during their careers. Most defended the practice; some said they understood why those outside law enforcement might be concerned.

“It’s just like laundering money – you work it backwards to make it clean,” said Finn Selander, a DEA agent from 1991 to 2008 and now a member of a group called Law Enforcement Against Prohibition, which advocates legalizing and regulating narcotics.

Some defense lawyers and former prosecutors said that using “parallel construction” may be legal to establish probable cause for an arrest. But they said employing the practice as a means of disguising how an investigation began may violate pretrial discovery rules by burying evidence that could prove useful to criminal defendants.


“That’s outrageous,” said Tampa attorney James Felman, a vice chairman of the criminal justice section of the American Bar Association. “It strikes me as indefensible.”

Lawrence Lustberg, a New Jersey defense lawyer, said any systematic government effort to conceal the circumstances under which cases begin “would not only be alarming but pretty blatantly unconstitutional.”

Lustberg and others said the government’s use of the SOD program skirts established court procedures by which judges privately examine sensitive information, such as an informant’s identity or classified evidence, to determine whether the information is relevant to the defense.

“You can’t game the system,” said former federal prosecutor Henry E. Hockeimer Jr. “You can’t create this subterfuge. These are drug crimes, not national security cases. If you don’t draw the line here, where do you draw it?”

Some lawyers say there can be legitimate reasons for not revealing sources. Robert Spelke, a former prosecutor who spent seven years as a senior DEA lawyer, said some sources are classified. But he also said there are few reasons why unclassified evidence should be concealed at trial.

“It’s a balancing act, and they’ve doing it this way for years,” Spelke said. “Do I think it’s a good way to do it? No, because now that I’m a defense lawyer, I see how difficult it is to challenge.”


One current federal prosecutor learned how agents were using SOD tips after a drug agent misled him, the prosecutor told Reuters. In a Florida drug case he was handling, the prosecutor said, a DEA agent told him the investigation of a U.S. citizen began with a tip from an informant. When the prosecutor pressed for more information, he said, a DEA supervisor intervened and revealed that the tip had actually come through the SOD and from an NSA intercept.

“I was pissed,” the prosecutor said. “Lying about where the information came from is a bad start if you’re trying to comply with the law because it can lead to all kinds of problems with discovery and candor to the court.” The prosecutor never filed charges in the case because he lost confidence in the investigation, he said.

A senior DEA official said he was not aware of the case but said the agent should not have misled the prosecutor. How often such misdirection occurs is unknown, even to the government; the DEA official said the agency does not track what happens with tips after the SOD sends them to agents in the field.

The SOD’s role providing information to agents isn’t itself a secret. It is briefly mentioned by the DEA in budget documents, albeit without any reference to how that information is used or represented when cases go to court.

The DEA has long publicly touted the SOD’s role in multi-jurisdictional and international investigations, connecting agents in separate cities who may be unwittingly investigating the same target and making sure undercover agents don’t accidentally try to arrest each other.


The unit also played a major role in a 2008 DEA sting in Thailand against Russian arms dealer Viktor Bout; he was sentenced in 2011 to 25 years in prison on charges of conspiring to sell weapons to the Colombian rebel group FARC. The SOD also recently coordinated Project Synergy, a crackdown against manufacturers, wholesalers and retailers of synthetic designer drugs that spanned 35 states and resulted in 227 arrests.

Since its inception, the SOD’s mandate has expanded to include narco-terrorism, organized crime and gangs. A DEA spokesman declined to comment on the unit’s annual budget. A recent LinkedIn posting on the personal page of a senior SOD official estimated it to be $125 million.

Today, the SOD offers at least three services to federal, state and local law enforcement agents: coordinating international investigations such as the Bout case; distributing tips from overseas NSA intercepts, informants, foreign law enforcement partners and domestic wiretaps; and circulating tips from a massive database known as DICE.

The DICE database contains about 1 billion records, the senior DEA officials said. The majority of the records consist of phone log and Internet data gathered legally by the DEA through subpoenas, arrests and search warrants nationwide. Records are kept for about a year and then purged, the DEA officials said.

About 10,000 federal, state and local law enforcement agents have access to the DICE database, records show. They can query it to try to link otherwise disparate clues. Recently, one of the DEA officials said, DICE linked a man who tried to smuggle $100,000 over the U.S. southwest border to a major drug case on the East Coast.

“We use it to connect the dots,” the official said.


Wiretap tips forwarded by the SOD usually come from foreign governments, U.S. intelligence agencies or court-authorized domestic phone recordings. Because warrantless eavesdropping on Americans is illegal, tips from intelligence agencies are generally not forwarded to the SOD until a caller’s citizenship can be verified, according to one senior law enforcement official and one former U.S. military intelligence analyst.

“They do a pretty good job of screening, but it can be a struggle to know for sure whether the person on a wiretap is American,” the senior law enforcement official said.

Tips from domestic wiretaps typically occur when agents use information gleaned from a court-ordered wiretap in one case to start a second investigation.

As a practical matter, law enforcement agents said they usually don’t worry that SOD’s involvement will be exposed in court. That’s because most drug-trafficking defendants plead guilty before trial and therefore never request to see the evidence against them. If cases did go to trial, current and former agents said, charges were sometimes dropped to avoid the risk of exposing SOD involvement.

Current and former federal agents said SOD tips aren’t always helpful – one estimated their accuracy at 60 percent. But current and former agents said tips have enabled them to catch drug smugglers who might have gotten away.

“It was an amazing tool,” said one recently retired federal agent. “Our big fear was that it wouldn’t stay secret.”

DEA officials said that the SOD process has been reviewed internally. They declined to provide Reuters with a copy of their most recent review.

(Edited by Blake Morrison)


How the U.S. DEA program differs from recent NSA revelations

By Reuters
Monday, August 5, 2013 7:48 EDT

By John Shiffman

WASHINGTON (Reuters) – Former spy-agency contractor Edward Snowden has caused a fierce debate over civil liberties and national-security needs by disclosing details of secret U.S. government surveillance programs.

Reuters has uncovered previously unreported details about a separate program, run by the U.S. Drug Enforcement Administration, that extends well beyond intelligence gathering. Its use, legal experts say, raises fundamental questions about whether the government is concealing information used to investigate and help build criminal cases against American citizens.

The DEA program is run by a secretive unit called the Special Operations Division, or SOD. Here is how NSA efforts exposed by Snowden differ from the activities of the SOD:

Purpose of the programs

NSA: To use electronic surveillance to help the Federal Bureau of Investigation catch terrorists, the U.S. military fight wars, and the Central Intelligence Agency collect intelligence about foreign governments.

SOD: To help the DEA and other law enforcement agents launch criminal investigations of drug dealers, money launderers and other common criminals, including Americans. The unit also handles global narco-terrorism cases.

Gathering of evidence

NSA: Much of what the agency does remains classified, but Snowden’s recent disclosures show that NSA not only eavesdrops on foreign communications but has also created a database of virtually every phone call made inside the United States.

SOD: The SOD forwards tips gleaned from NSA intercepts, wiretaps by foreign governments, court-approved domestic wiretaps and a database called DICE to federal agents and local law enforcement officers. The DICE database is different from the NSA phone-records database. DICE consists of about 1 billion records, and is primarily a compilation of phone log data that is legally gathered by the DEA through subpoenas or search warrants.

Disclosure to the accused

NSA: Collection of domestic data by the NSA and FBI for espionage and terrorism cases is regulated by the Foreign Intelligence Surveillance Act. If prosecutors intend to use FISA or other classified evidence in court, they issue a public notice, and a judge determines whether the defense is entitled to review the evidence. In a court filing last week, prosecutors said they will now notify defendants whenever the NSA phone-records database is used during an investigation.

SOD: A document reviewed by Reuters shows that federal drug agents are trained to “recreate” the investigative trail to conceal the SOD’s involvement. Defense attorneys, former prosecutors and judges say the practice prevents defendants from even knowing about evidence that might be exculpatory. They say it circumvents court procedures for weighing whether sensitive, classified or FISA evidence must be disclosed to a defendant.


NSA: Congressional leaders and intelligence committee members are briefed on the NSA’s classified programs. The Foreign Intelligence Surveillance Court reviews and approves warrants for domestic eavesdropping.

SOD: DEA officials who oversee the unit say the information sent to law enforcement authorities was obtained through subpoena, court order and other legal means. A DEA spokesman said members of Congress “have been briefed over the years about SOD programs and successes.” This includes a 2011 letter to the Senate describing the DICE database. But the spokesman said he didn’t know whether lawmakers have been briefed on how tips are being used in domestic criminal cases.

(Edited by Blake Morrison)


NSA defenders: embassy closures followed pre-9/11 levels of 'chatter'

Closures ordered in response to 'most serious threat in years', says Republican senator Saxby Chambliss

Dan Roberts in Washington and Robert Booth in London
The Guardian, Monday 5 August 2013   

The closure of 22 US embassies over an alleged security threat was seized on by defenders of the National Security Agency on Sunday, amid claims that its controversial surveillance programme alerted authorities to "pre-9/11" levels of terrorist chatter.

A meeting of President Barack Obama's top security officials on Saturday concluded that intelligence apparently gathered from overseas communications intercepts showed a serious but unspecified threat against Western and US interests. The administration moved to shut the embassies across North Africa and the Middle East as a precaution.

On Sunday the state department announced that diplomatic posts in 19 cities will remain closed at least until end of this week. A spokeswoman said the decision to keep the embassies and consulates closed is a sign of an "abundance of caution" and is "not an indication of a new threat."

Britain said its embassy in Yemen would stay closed until the Muslim festival of Eid on Thursday. France also said it would not reopen its Sana'a mission until Thursday.

Intelligence committee members in Washington who had been briefed on the alert said it was the most serious they had seen for years and repeatedly cited the threat during Sunday's political talk shows as a reason to resist growing calls in Congress for reform of the NSA's sweeping powers.

"There has been an awful lot of [terrorist] chatter, which is very reminiscent of what we saw pre-9/11," said the Republican senator Saxby Chambliss on NBC's Meet the Press. "As we come to the end of Ramadan, which is always an interesting time for terrorists, and the upcoming 9/11 anniversary, this is the most serious threat that I have seen in the last several years."

Chambliss, who was briefed by the vice president, Joe Biden, last week, said he believed the intelligence had been gathered by the NSA using foreign surveillance powers granted under section 702 of the Foreign Intelligence Surveillance Act.

"This is a good indication of why they [the surveillance powers] are so important," he said.

His defence of the NSA was echoed by another Republican, Lindsey Graham. Asked by CNN host Candy Crowley whether Americans were right to be frightened, senator Graham said: "It is scary … the NSA programme is proving its worth yet again."

The White House said it took the steps to close the embassies and put US troops on a heightened state of alert after specific intercepts coincided with growing worries about al-Qaida prisoners who escaped in a series of recent jail breaks in Afghanistan and elsewhere. It is particularly worried about al-Qaida activists believed to be operating in Yemen, although President Obama last week told the Yemeni president that he believed al-Qaida was on the retreat in the country.

A White House statement said: "Early this week, the president instructed his national security team to take all appropriate steps to protect the American people in light of a potential threat occurring in or emanating from the Arabian Peninsula.

"Given the nature of the potential threat, throughout the week, assistant to the president for homeland security and counterterrorism Lisa Monaco has held regular meetings with relevant members of the interagency to ensure the US Government is taking those appropriate steps."

The incoming national security advisor, Susan Rice, chaired a meeting on Saturday at the White House and was expected to further brief Obama, who was celebrating his 52nd birthday on Sunday.

A number of Congressional leaders concerned by the NSA's powers, particularly regarding domestic surveillance, urged caution over linking the latest terrorism alert.

Adam Schiff, a Democrat on the House intelligence committee, said: "This is not the usual kind of chatter … it had to be corroborated or come from very reliable sources to take this kind of action.

"You have to be very careful how much you represent that any particular programme has contributed to our security. There is no indication that the metadata programme [related to domestic surveillance] contributed to information about this particular plot."

US diplomatic facilities will remain closed in Egypt, Jordan, Libya, Yemen, Saudi Arabia and Kuwait, among other countries, until Saturday August 10. The State Department announcement on Sunday also added closures of four African sites, in Madagascar, Burundi, Rwanda and Mauritius.

The US has also decided to reopen some posts on Monday, including those in Kabul, Afghanistan, and Baghdad.

The UK Foreign Office said that the British embassy in the Yemeni capital, Sana'a, would remain closed until after Eidf after earlier saying it would re-open on Tuesday. British embassies in other capitals in the Middle East remain open.

In the eastern districts of Sana'a, Yemeni soldiers closed roads around the US and British embassies, witnesses said, only allowing residents through after rigorous checks.

"The ambassador is working and there is still a team out there doing their jobs," a Foreign Office spokeswoman said. She declined to elaborate if a specific threat had been made against the UK diplomatic mission in Yemen or what the nature of the general threat might be.


Terror alert reportedly based on warning from al Qaeda leader Ayman al-Zawahri

By Reuters
Sunday, August 4, 2013 15:57 EDT

By Mohammed Ghobari

SANAA (Reuters) – Soldiers blocked roads outside Western embassies in Sanaa on Sunday, after a U.S. warning of a possible major militant attack in the Middle East prompted the closure of many missions in Yemen and U.S. missions in several other Arab states.

Security in Yemen, home to one of the most active wings of al Qaeda, is a global concern as the impoverished Arab Peninsula state shares a long border with Saudi Arabia, a U.S. ally and the world’s top oil exporter.

While Washington has not disclosed the origin of the threat, the U.S. alert followed a renewed warning from al Qaeda leader Ayman al-Zawahri to take revenge for U.S. drone attacks on its fighters and imprisonment of Islamist militants in Guantanamo.

The day after the U.S. warning, international police agency Interpol asked member states to increase their vigilance against attacks after a series of prison breaks in Iraq, Libya and Pakistan in which al Qaeda is suspected to be involved.

In Sanaa’s eastern districts, Yemeni soldiers closed roads around the U.S. and British embassies, witnesses said, only allowing residents through only after rigorous checks, while troops with automatic rifles stood outside the French embassy.

“There is a high level of coordination with the American side, and these measures have been taken due to fears of attacks by al Qaeda,” a Yemeni security official told Reuters.

The French embassy was closed on Sunday, following the lead of Britain and Germany, which shut their missions after the United States said it was closing more than a dozen missions in the Middle East and Africa.

Security was also bolstered around the Presidential Palace in Sanaa, as well as near the Saudi embassy in the center of the Yemeni capital, causing big traffic jams.


“Living near Western embassies has become a source for suffering,” said Mohammed Kamel, a Yemeni in his 30s who lives near the French embassy.

“Every time there is a warning, we live in terror awaiting an explosion or an attack,” he said.

A shop owner near the U.S. embassy, under tight security since crowds tried to storm it in 2012 over a film released in the United States seen as insulting Prophet Mohammad, said many locals had moved elsewhere to escape stringent security.

Yemen has one of the world’s most active militant networks and is home to al Qaeda in the Arabian Peninsula (AQAP) which has plotted attacks on international aviation from Yemen.

Its affiliates have also repeatedly targeted senior Yemeni military officers and military and security installations with suicide attacks since the army drove its affiliates out of southern Yemeni strongholds last year.

Last week, suspected al Qaeda militants killed the Saudi bodyguard and Yemeni driver of a Saudi diplomat in Sanaa, and gunmen on a motorcycle shot and killed a Yemeni soldier guarding the Italian embassy in southern Sanaa, security sources said.

The United States has repeatedly hunted suspected al Qaeda militants in Yemen with drone strikes, killing dozens, including senior some senior leaders such as Saudi-born Saeed al-Shihri.

Three such drone strikes in Yemen in the past 10 days killed 10 suspected militants before a visit to Washington by Yemeni President Abd-Rabbu Mansour Hadi.

(Writing by Sami Aboudi; Editing by Louise Ireland and William Maclean)


Activists stage second national day of protest against NSA's domestic spying

Campaigners say mood has shifted in their favour since 4 July demonstrations against government surveillance

Dan Roberts in Washington, Sunday 4 August 2013 22.59 BST   

The House minority leader Nancy Pelosi was the target of a march in San Francisco – she is blamed for for pressuring Democrats to oppose the Amash amendment, a measure to rein in the NSA. Photograph: Chip Somodevilla/Getty Images

Privacy campaigners held the second national day of protest against US government surveillance programmes on Sunday, picketing an AT&T building in New York they claimed was being used to facilitate National Security Agency snooping.

A grassroots group named Restore the Fourth, after protections against unreasonable search enshrined in the constitution, staged a series of events in several US cities to draw attention to the domestic spying programmes revealed by NSA whistleblower Edward Snowden.

Organisers said they felt the political mood had shifted in their favour since similar demonstrations were staged on 4 July, shortly after the Guardian first broke news of Snowden's revelations.

"The tide has turned against the National Security Agency's unconstitutional phone and internet monitoring," said Ben Doernberg from Restore the Fourth NYC. "The front page of Monday's New York Times stated that opposition to the NSA's activities has 'momentum that even critics say may be unstoppable,'"

Speaking shortly before the march arrived at the AT&T building in midtown Manhattan targeted by protestors, Doernberg estimated around 400 people had joined the New York rally.

A similar event in San Francisco was targeted at House minority leader Nancy Pelosi, who is criticised by the group for pressuring Democrats to oppose the Amash amendment, a narrowly defeated measure to rein in the NSA.

Pentagon Papers whistleblower Daniel Ellsberg was due to speak in San Francisco, while speakers from the ACLU of Massachusetts, Digital Fourth and other organisations were planning to speak at a "Bricnic" at the Boston Regional Intelligence Center (Bric).

The 4 August events were dubbed "1984 day" after George Orwell's dystopian warnings of all-powerful government surveillance.

"1984 is a warning, not an instruction manual," said Andrea O'Neill of Restore the Fourth DC. "As we find out about more unconstitutional programs every week, it is clear that the NSA's domestic spying has gone too far and must be stopped before it's too late."

Campaigners plan to spend the next few weeks targeting politicians in their local communities during the summer Congressional recess, before returning with more national events in October.


Virginia’s ‘Gov. Ultrasound’ facing possible criminal charges

By David Ferguson
Sunday, August 4, 2013 21:12 EDT

Virginia’s scandal-mired Republican Gov. Bob McDonnell may be facing criminal charges over gifts and loans from a wealthy donor. According to the Washington Post, three people connected to the federal investigation of the alleged crimes confirmed that the donor — Johnnie Williams Sr. of dietary supplement company Star Scientific — has been cooperating with authorities, a sign that a federal case against the governor may be in the offing.

McDonnell — who has been nicknamed “Gov. Ultrasound” by some critics because of his role in implementing mandatory trans-vaginal ultrasound exams for women seeking abortions — is accused of a wide range of corrupt practices involving loans and gifts from Williams, who hoped to have one of his company’s products included on the list of medicines covered by the state Medicare program.

To this end, Williams reportedly bought the conservative Christian governor a $6,500 Rolex watch, took his wife on a $15,000 New York City shopping spree and paid another $15,000 for the catering at the McDonnells’ daughter’s wedding. The CEO also allegedly paid for McDonnell family trips and loaned the governor his black Ferrari to drive on vacation.

McDonnell has apologized for violating the public trust, but insists that he broke no laws. He said that he is hurrying to pay back several loans made to him by Williams and his company and to return all the gifts he received.

Star Scientific is a former tobacco company that has lost money every year since it went into business in 2003, according to the Richmond Times-Dispatch. The company is currently battling with the federal government over $700,000 in back taxes and is under investigation for securities fraud.


Evangelical Corporations Try To Force Their Employees To Follow Their Religious Beliefs

By: Rmuse
Aug. 4th, 2013

In 2010 at the behest of the Koch brothers, Mitch McConnell, and corporate leaders everywhere, the U.S. Supreme Court granted personhood rights to corporations giving them power to control the direction of the government and buy the services of Republicans candidates without campaign finance restrictions. Dissatisfied with the inordinate power the conservative court gave corporations, they are likely headed back to the Supreme Court to demand power to impose their religion on their employees in the next logical step towards transforming America into a theocracy. Despite the U.S. Constitution’s guarantee of freedom of, and from, religious imposition on the people, the extremist Christian fanatics intent on forcing all Americans to toe the evangelical line and fall under the purview of America’s version of Sharia Law are appealing to the conservative High Court for their blessing to impose their bastardized version of Christianity on the people and as usual they are focusing their attention on women.

The latest tactic of corporations with evangelical CEOs is a continuation of last year’s attempt to ban American women from using birth control as a result of President Obama’s inclusion of contraceptive coverage in the Affordable Care Act. At issue is whether a secular corporation with no business relationship or involvement in a religion can be considered religious and force its employees to follow the corporation’s religious beliefs and be prohibited from using contraceptives included in prescription coverage in health plans. The President gave religious organizations and churches permission to ban their employees from having access to contraceptives, but it still did not satisfy the neo-Christian fascist wing who sees the conservative Court as their ticket to impose, by Constitutional fiat, their religious convictions on their employees. It is noteworthy that the push to ban contraceptive use is being pressed by evangelical men who avoid using IUDs or hormonal birth control pills by choice, but their personal choice is not the issue; eliminating women’s choice is.

In the President’s healthcare reform, any company with more than 50 employees is required to provide health insurance coverage, including prescriptions for contraceptives, and to acquiesce to Christian extremists the President exempted some religious institutions; churches and ministries were always exempt. One Pennsylvania Christian cabinet maker claimed that his company is Christian and does not have to provide contraception coverage because the prescription mandate violates the company’s right under the free religious exercise clause in the First Amendment as well as the company’s protection under the Religious Freedom Restoration Act. Last week the 3rd Circuit Court of Appeals upheld the contraception mandate despite the company owner, like Hobby Lobby’s CEO, claimed contraceptives are abortifacients. An abortifacient is a drug that causes a miscarriage, but contraceptives such as intrauterine devices (IUD) and hormonal birth control pills prevent pregnancy making the religious fanatics arguments a violation of all known medical and biological science. There is a large contingent of religious extremists who consider any miscarriage tantamount to premeditated murder and have attempted to pass laws imprisoning women who miscarry regardless it is a common biological process.

Writing for the 3rd Circuit’s majority, Judge Robert Cowen said although there was “a long history of protecting corporations’ rights to free speech,” there was no history of protecting a company’s free exercise of religion. “We simply cannot understand how a for-profit, secular corporation can exercise religion. A holding to the contrary … would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners.”  A few weeks ago, the Colorado-based 10th U.S. Circuit Court of Appeals ruled in favor of Hobby Lobby Stores finding that corporations are entitled to assert religious rights and impose them on their employees. The court specifically noted that President Obama had offended the company’s religious beliefs with the contraception requirement. Now that there is a split between the 3rd and 10th Circuit decisions, it falls to the Supreme Court to rule if a corporation has the Constitutional right to impose its “religious convictions” on its employees.

Since the highest court in the land is going to decide whether or not a secular corporation has the power to impose its religious beliefs on its employees, they will likely have to consult the source of the corporation’s religious dogma; the Christian bible. According to all anti-contraception and anti-women’s choice advocates, their “zygote is a person” assertion is founded in their conviction “to serve Jesus by being an Advocate for those who cannot speak for themselves, the pre-born child.” In their mission statement, PersonhoodUSA claim their goal is to force all Americans to “respect the God-given right to life by recognizing all human beings as persons who are “created in the image of God” from the beginning of their biological development, without exceptions.” However, the Christian bible they claim supports their, and religious corporations’,  advocacy and contention that personhood begins at the moment of conception does not in any iteration support their argument driving their assault on women’s rights to choose their reproductive health.

The religious right’s premise that the instant a living sperm penetrates a living ovum, and the resulting zygote, is a human life, or that a 20-week old fetus is viable outside a woman’s uterus contradicts the god Christian extremists claim to serve. First, the Supreme Court’s ruling that a fetus meet the requirement of viability outside the womb destroys the 20-week ban on abortions Texas just enacted. But biology aside, religious extremists ignore a simple and very clear definition of a person uttered by their  bible’s deity and is the only source the Supreme Court should consult in deciding if contraceptive coverage violates a corporation’s freedom to impose their religion on its employees.

According to the Christian bible book of Genesis, chapter 2, verse 7, “The Lord God proceeded to form the man out of dust from the ground, and breathed into his nostrils the breath of life and it was then that the man became a living person.” Plainly, taking a breath defined the first man as a human life, and doubtless a zygote is incapable of taking a breath of life. In Ezekiel 37:5-6 the bible reiterates god’s words in Genesis; “Thus says the Lord God to these bones: I will lay sinews upon you, and will cause flesh to come upon you, and cover you with skin, and put breath in you, and you shall live.” The bible even clarifies that a fetus, regardless the stage of development, is insignificant compared to the life of the mother. Exodus 21:22-24 states that “if a man causes a woman to have a miscarriage, he shall be fined;   however, if the woman dies then he will be put to death” and it is obvious the deity did not consider a fetus a living human being, or that causing a miscarriage, or abortion, qualified as a capital offense. However, harming or taking the life of the mother warranted death instead of just a fine.

The entire evangelical argument that a zygote, embryo, or fetus is a person is, according to their bible, as crazy as the notion that a corporation holds deep religious convictions they can impose on their employees. Still, in their crusade to force all Americans to fall under their theocratic purview, evangelicals, corporations with religious convictions, and Republican misogynists are attempting to impose a Christian version of Sharia Law without objection or pushback from Democrats from the President down to state legislators.

Despite the sole argument to ban contraception, abortion, or any woman’s reproductive health choices has as its basis religious dogmata, there is no opposition based on the Constitution’s prohibition against imposing religion by government fiat. It is bad enough that the fanatics’ arguments are not scriptural, or ever mentioned by their namesake Jesus Christ, but the cowardly reluctance to cite the unconstitutionality of imposing religion is stunning. If Americans cannot recognize that just considering whether or not religious fanatics, and now corporations with religious convictions, have the power to impose their religion on other Americans, then the nation is one ruling or new anti-choice law away from becoming a theocracy to rival the other major theocracy in the world; the Islamic Republic of Iran and their dastardly Sharia Law.

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« Reply #7963 on: Aug 06, 2013, 06:21 AM »

08/06/2013 12:33 PM

NSA Aftermath: German Firms Scramble to Boost Data Protection


German companies have long suspected China and Russia of trying to steal their secrets. But the NSA scandal has turned their attention west, forcing them to worry about prying American eyes and to rapidly bolster security measures.

Building No. 14 of SAP's service center in St. Leon-Rot seems as secure as Fort Knox. But, in the end, it isn't the exterior walls of meter-thick reinforced concrete that give off this impression. Nor is it the security cameras or the high-tech steel gate. In fact, the latter wasn't even working a few weeks ago, as can be seen from the handwritten note taped to it, saying: "Gate broken. Please open manually."

What really makes this building in southwestern Germany secure is a state-of-the-art fingerprint verification system. The computer center is filled with servers containing data on this German software giant and thousands of other companies, together making up a giant library of secret company information spanning much of Europe. To get into it, visitors must pass through five security control points, each equipped with its own fingerprint scanner. Only authorized fingers are given access, and only when they are still attached to living individuals. No one gets into the building with severed fingers.

In other words, it would be wrong to say that efforts aren't made to protect business secrets in Germany. On the contrary, the precautionary measures taken by German companies sometimes read like a chapter from a John Grisham novel -- or, in some cases, like pages from a medical textbook on paranoia.

When BMW managers fly to other countries, they leave their company-issued mobile phones at home in Munich. In their place, they are given disposable phones to be discarded upon return.

At the specialty chemicals giant Evonik, managers are required to store their mobile phones in cookie tins during meetings, the idea being that the tins will serve as Faraday cages that prevent anyone from listening in on the conversations.

Ferdinand Piëch, the chairman of Volkswagen's supervisory board, has conference rooms regularly swept for bugs, and the company even has its own airline, Volkswagen Air Services. The planes are registered in the Cayman Islands, but not in order to avoid paying taxes. Instead, the point is to make the aircraft less recognizable as VW planes so that passenger lists are not readily accessible.

At the aerospace group EADS, employees are not permitted to use iPads or iPhones at work. Only Blackberrys are allowed. Employees working in high-security areas are also not allowed to read work-related emails outside their sealed-off offices.

Heightened Worries about Data Abuse

After the revelations of large-scale data mining by the United States, German managers have become even more nervous about data security. EADS CEO Tom Enders and other senior executives have ratcheted up their defensive measures even further. "Many documents that used to be sent by email are now hand-delivered to the recipient," says an EADS official. He notes that the only documents that are now sent electronically are those that the company would have no objections to posting publicly or displaying "on the church door."

Enders and his fellow managers are not alone. Many German business executives are worried about what the NSA does with all the data it presumably collects on German companies, says Ulrich Brehmer, a member of the executive board of the German Association for Security in Industry and Commerce (ASW).

Brehmer is far from a conspiracy theorist, and he isn't trying to suggest that US intelligence services are deliberately poaching industrial know-how from Germany and channeling it to American companies. Instead, what worries him is that US intelligence agencies are working hand-in-hand with consultants from the private sector. "Who knows whether they might be selling information to interested parties here and there," says Brehmer, who assesses the risk of such data abuse as "high."

SAP founder Hasso Plattner also feels uneasy about the surveillance operations of American intelligence agencies. "It certainly is strange that much of the surveillance is centered on southern Germany," he says, "precisely where all the large and small technology companies are located."

This sense of anxiety has become widespread in Germany. "We are noticing that companies have become more sensitive in recent weeks," says Michael George, the head of the Cyber Alliance Center at the Bavarian State Office for the Protection of the Constitution, the state branch of Germany's domestic intelligence agency. "When it comes to industrial espionage, they had focused almost exclusively on the East. And now they're wondering whether the threat might not also be coming from the West."

Small and medium-sized businesses (SMEs), in particular, are contacting the experts at the state agency and asking some very basic questions: What about products made by US software companies, such as Microsoft, that are commonly used by German companies? Should managers still use Skype for meetings? In addition to hacker attacks from China, do SMEs now have to worry about industrial espionage originating in the United States?

'The Americans Are Pros'

German companies once had a lot of confidence in everything coming from the United States. But it's already clear that much of this has been lost.

Granted, to date, there are no known cases in which US agencies have tried to steal German know-how. But perhaps this is only because German authorities and companies haven't been looking hard enough. The victims of hacker attacks are usually kept in the dark, and it might be that American intelligence agencies are just better at covering their tracks.

In fact, they don't even have to gain direct access to German companies. What sometimes happens is that US intelligence agencies, while conducting their extensive searches on the Web, flush out packets of data from German companies "that don't belong there," says a senior official with the Federal Office for the Protection of the Constitution (BfV). Through data leaks, this information often reaches German authorities, who then notify the affected companies.

"The Americans are pros. They don't leave any tracks behind -- and if they do, they're the wrong ones," says Christopher Fischer of BFK, a consulting firm in the southwestern city of Karlsruhe. "It's always easy to act as if the attack were coming from China. And although they are very active at the moment, everything is now of course being blamed on the Chinese."

All companies know that they should protect themselves from the prying eyes of competitors. But, until now, it was commonly believed that threats of industrial espionage emanating from government entities primarily came from China and Russia, where it is common for intelligence services to spy on foreign economies.

Likewise, it has always been clear that Germany is a stomping ground for industrial spies. Dozens of cases have been publicized in recent years. The only real difference among them is that the spies were looking for different things. The Iranians wanted to know where in Germany they could secretly buy parts for their nuclear program. The Russians have an appetite for all things military. And China's product bootleggers are interested in everything from military technology to high-end record players.

The problem in fending off espionage is that many potential access points must be monitored at the same time. SAP alone sees about 3,000 attacks a month. Throughout Germany, the number of attacks is allegedly in the hundreds of thousands -- per day. "It isn't even necessary to have a great deal of expertise to attack small and mid-sized companies," says a senior BfV official.

Moreover, no one knows exactly where the attacks are coming from. Are they industrial spies? Intelligence agencies? Or just amateur hackers? It is clear, however, that there are entire armies of mercenaries roaming the web, ready to sell their services to the highest bidder. And they are good at what they do. "We have cases in which attackers played around in a company's computers for more than 100 days before being discovered," says Fischer, the BFK consultant. "When that happens, you can assume that nothing is secret anymore."

Paying Hackers to Hack
All companies should be terrified of Thorsten Schröder. He calls himself a hacker and likes to wear the trademark garb of the hacker community: T-shirts from hacker conferences and practical cargo pants, preferably all in black.

Schröder recently attacked a company in the medical field. Using his own computer, he was quickly able to pose as one of the company's external salesperson. This gave him all the access privileges of an employee, thereby allowing him to breach the firewall meant to protect the company from outside access.

"Once you're inside, it's just a matter of time and effort before you can access sensitive customer information or internal financial planning data," Schröder says. In this case, the outcome was even worse for the company. Schröder managed to install his own software on the company's servers, turning himself into an administrator and "super user."

This is one of the greatest triumphs for an outside hacker -- but a nightmare for the company. In this case, however, the company was actually paying Schröder for his services. Like many of his counterparts, the 36-year-old hacker has turned his hobby into a profession. Schröder owns Modzero, a company based in the Swiss town of Winterthur. With his four full-time employees, he advises companies on IT security issues and defending themselves against cyber-espionage.

The success rate for one of his operations, which usually last between five and 10 days, is close to 100 percent, Schröder says. "In fact, we always find something." This even applies to larger companies with their own corporate security departments, which sometimes have their own "red teams" that regularly attack and test the company's own systems. In many cases, says Schröder, the higher levels of the hierarchy pose the greatest security risks. "Top managers are usually attractive targets," he says," because they have special status and often a particularly large number of access privileges."

Human Weakness Opens Doors

This brings us back the fundamental problem of every counter-espionage operation: the many access points that need to be monitored. Even if it were possible to make company networks more secure, attackers would simply choose a different route -- one that passes through the bedroom, for example, as an employee of a German medical-technology firm learned only a few weeks ago.

At first, he couldn't believe his good fortune when he launched into an intense flirtation with a Chinese woman. She was young and attractive, and she was apparently interested. Only when he was blackmailed with compromising photos of himself and the attractive Chinese woman did the manager figure out what had really happened. He had stumbled into a "honey trap," an age-old trick in espionage of all sorts.

The victim was supposed to provide information about a successful product made by his company. But the attack failed in this case when the employee told both his boss and his wife about the Chinese woman. Nevertheless, the example shows that even in the era of the PRISM surveillance program and Trojan horses, there is still one particularly weak point when it comes to drawing secrets out of a victim: the human being. Or, in this case, the male.

Attackers use simple but effective tricks. For instance, a man walks up to a convention booth, identifies himself as a manager with a competitor and inadvertently leaves his keychain behind with something very tempting attached to it: a USB flash drive.

The victim, thinking it's his lucky day, sticks the flash drive into his computer to see what the competition is up to -- and, in doing so, unwittingly downloads a spy program onto his own computer.

Attackers like to combine new technology with time-tested methods. To gain the trust of a potential victim, attackers search for information on social networks. Within a few days, social networks can yield the amount of information that it used to take several weeks to gather.

Preferences, contacts, friends and even hints about possible passwords for email accounts or company networks can often be found in Facebook or Xing profiles. This information can then be used for subsequent operations.

Efforts to Improve Coordinated Defenses

This form of spying by using someone's personal context is called social engineering. Next to hacking, it is one of the most important tools for intelligence services. But, according to a study by the consulting firm Corporate Trust, only one in four employees of German companies is prepared for this threat.

In fact, employees in many companies simply assume that the IT department will somehow figure out how to solve the security problem on its own. In most companies, it isn't even clear which data is considered especially sensitive -- what industry insiders call a company's "crown jewels." Only one in five companies has prepared the necessary analysis for itself.

One problem for German domestic intelligence agents is that they don't really know what is actually going on behind company doors. Indeed, companies are tight-lipped and only report 20 percent of industrial espionage cases to the BfV.

To address the issue, George, the cyber security expert in Bavaria, is constantly trying to gain the trust of SMEs. "The fatal aspect of the current situation is that every company is an island," he says, "and no one knows what is happening on the next island." This means that attackers can use the very same trick to gain access to several different companies, and no one even notices it's a trick. The Bavarian domestic intelligence agency only recently began passing on anonymous information about attacks from one company to another.

When it comes to espionage, the relationship between government agencies and companies, and between the political and business worlds, has been filled with suspicion for years -- and become a vicious circle. Companies feel that the interior ministry and the BfV pay too little attention to the issue. Meanwhile, the intelligence agencies are critical of industry, saying that companies provide them with too little information about hacker attacks and cases of possible industrial espionage.

Hartfrid Wolff, a domestic policy expert with the pro-business Free Democratic Party (FDP), believes that Germany is in a relatively poor position when it comes to defending itself against industrial espionage, and that SMEs, in particular, are in over their heads. "Universities and other research facilities also need substantially better protection," he says.

But ever since news leaked about the NSA's vast spying operations, the fronts seem to be softening. At the end of August, representatives of both sides intend to sign an agreement on protecting businesses. The plans include an Internet platform on which companies and government agencies can exchange information about possible attacks. "The goal is to warn each other so that security gaps can be plugged," says the head of IT for a major German company.

Privacy Agreements Ignored
The IT reporting law planned by Interior Minister Hans-Peter Friedrich, on the other hand, has gained little support. Under the proposed rule, companies that discover an attack on their computer systems would be required to report it immediately. But the business community feels that the current draft of the bill is poorly thought-out. What does Minister Friedrich intend to do with all of this wonderful data, asks the head of security for a defense contractor? He calls the proposed law "a joke," saying that it shows how helpless lawmakers actually are.

The so-called Safe Harbor Framework, an agreement that the United States and the European Union signed in 2000 to regulate data privacy for US companies operating in Europe, is especially sensitive.

Under the framework, US companies can more or less voluntarily agree to comply with certain data privacy rules when they wish to store and process information about European citizens. The Safe Harbor Framework is then essentially considered a seal of quality for which US authorities are supposed to handle certification and compliance monitoring.

More than 3,000 companies in the United States -- including giants like Google, Facebook and Microsoft -- have already agreed to observe the rules. This has enabled them, with the EU's approval, to store, process and swap billions of data sets on EU residents.

However, in 2004, a study commissioned by the European Commission revealed that there was no monitoring of compliance with the data privacy guidelines, especially in the United States. At the time, the Americans promised to improve the still somewhat obscure guidelines.

A second study appeared only four years later. Commissioned by the EU, it was prepared by a Belgian university in collaboration with Norwegian and American researchers. But, unlike the 2004 study, the 192-page study was only made available to a small group of experts.

Today, the EU says that it incorporated the study into its overall assessment of Safe Harbor. But the managers of major German corporations suspect that other motives are behind the reluctance to talk about the study. Indeed, they believe that the study's results were so devastating that the agreement should have been terminated long ago.

The study's authors frankly conclude that the US officials complied with the data privacy provisions "even worse" in 2008 than in 2004. For instance, the report states, the relevant US authorities' verification of certification and compliance with the data privacy rules was "completely inadequate." In such cases, there were hardly any sanctions against the US authorities.

But now European Justice Commissioner Viviane Reding has apparently had enough. The agreement, she says, is apparently more of a "loophole than a safeguard for our citizens." Reding is now no longer ruling out the possibility of a unilateral termination of the agreement.

Surge in Demand for Tap-Proof Phones

Under the USA Patriot Act of 2001, US authorities are granted access to all domestic data, both private and commercial. What's more, software developers can be compelled to build backdoors -- or "interfaces" -- into programs through which intelligence agencies can later gain access. The developers are also required to sign non-disclosure agreements and forbidden from even talking to their superiors about the work.

Still, software giant SAP is not worried that the US software it buys might contain interfaces for US intelligence services. Whenever SAP doesn't have access to a software's source code, it hires outside specialty companies to search for such loopholes before buying it. After that, an in-house department at SAP checks the source codes. "You have to be pretty cunning to get around such scans," says Gordon Mühl, SAP's head of security.

But dangerous leaks can arise at the interfaces as soon as different programs have to be coordinated with each other or when antivirus software is not constantly updated. "Thousands of SAP systems with Internet access are not up to date," says Alexander Polyakov of the security company ERPScan. "They are gateways for data thieves."

Some are also profiting from the new security boom, such as the Düsseldorf-based company Secusmart, which specializes in tap-proof mobile phones and includes German Chancellor Angela Merkel among its customers.

In a few weeks, Secusmart will provide the German government with ordinary Blackberrys that operate with a special card about the size of a fingernail. As soon as the caller speaks into the phone's microphone, the words are encoded. At the same time, the device can still be used like a smartphone.

Since the NSA's surveillance methods were revealed, Secusmart has seen a growing interest in tap-proof mobile phones from companies. "In the past, companies often didn't believe us when we said that it isn't just very easy to tap phone calls, but that it also happens," says Jörg Goronzy, chief sales officer at Secusmart. "The surveillance scandal has opened the eyes of many."

But, Goronzy adds, that's not even the best part: To effectively protect itself, a company would have to provide tap-proof mobile phones not only to executives and managers, but also to secretaries and assistants. The encoding system only works when both the caller and the receiver have a tap-proof phone. For that reason, Secusmart says, it makes sense for a major corporation to buy the phones for 500 to 1,000 employees -- at a cool €2,500 ($3,300) a pop.


Translated from the German by Christopher Sultan

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« Reply #7964 on: Aug 06, 2013, 06:34 AM »

Greenwald: Embassy closings looks like a conspiracy to silence NSA debate

By David Edwards
Monday, August 5, 2013 12:25 EDT

Guardian columnist Glenn Greenwald on Monday suggested that President Barack Obama had ordered 19 U.S. embassies in the Middle Easy closed not because of a legitimate terror threat, but to silence a debate on recently-revealed details of National Security Agency (NSA) data collection programs.

In a Sunday appearance on Meet the Press, Sen. Saxby Chambliss (R-GA) said that the embassies had been temporarily closed after the NSA learned of a terrorist plot.

Speaking to Democracy Now‘s Amy Goodman on Monday, Greenwald observed that the Obama administration may have shuttered the posts just to stop discussion about his reporting.

“Here we are in the midst of one the most intense debates and sustain debates that we’ve had in a very long time in this country over the dangers of excess surveillance, and suddenly an administration that has spent two claiming that it has decimated Al-Qaeda decides that there is this massive threat that involves the closing of embassies and consulates throughout the world,” Greenwald explained. “And within literally an amount of hours, the likes of Saxby Chambliss and Lindsey Graham join with the White House and Democrats in Congress — who, remember, are the leading defenders of the NSA at this point — to exploit that terrorist threat, and to insist that it shows that the NSA and these programs are necessary.”

Goodman pointed out Rep. Dutch Ruppersberger’s (D-MD) had said on Sunday that Greenwald’s reporting had been wrong and that members of Congress were being given ample opportunity to learn about the NSA programs.

“I hope Dutch Ruppersberger takes a much more prominent role in the political debate because he’s basically the embodiment of the rotted soul that is become the Democratic Party,” the Guardian columnist quipped.


US embassy closures used to bolster case for NSA surveillance programs

Congress told that NSA monitoring led to interception of al-Qaida threats but privacy campaigners fear ulterior political motives

Spencer Ackerman and Dan Roberts in Washington, Monday 5 August 2013 21.30 BST   

US embassies in the Middle East are to remain closed for the rest of the week as supporters of the National Security Agency's sweeping surveillance powers used the unspecified terror alert to bolster the case against reining in the controversial measures.

The closures follow the alleged interception of al-Qaida communications in Yemen, which intelligence committee members in Congress have been told were collected overseas using powers granted to the NSA under the Foreign Intelligence Surveillance Act – not the bulk surveillance programs disclosed by the Guardian and the Washington Post thanks to whistleblower Edward Snowden.

A privacy group questioned the publicity given to the latest alert after the State Department announced on Sunday evening that the number of embassies and consulates closed "out of an abundance of caution"
would be increased, with some remaining shut for up to a week.

Rebublican senator Saxby Chambliss said the NSA had identified threats that were the most serious for years and akin to levels of "terrorist chatter" picked up before 9/11.

"These [NSA] programs are controversial, we understand that," he told NBC's Meet the Press on Sunday. "But they are also very important … If we did not have these programs, then we simply would not be able to listen in on the bad guys."

Senator Lindsey Graham added: "To the members of Congress who want to reform the NSA program, great. If you want to gut it, you make us much less safe, and you're putting our nation at risk. We need to have policies in place that can deal with the threats that exist, and they are real, and they are growing."

Most warnings about NSA over-reach have focused on its domestic bulk surveillance program authorised under section 215 of the Patriot Act. Yet several news organizations reported on Monday that the information justifying the latest alert came from an intercepted communication between al-Qaida leader Ayman Zawahiri and the chief of the terrorist organization's Yemeni affiliate. Such information would have been collected overseas using powers granted to the NSA under section 702 of the Foreign Intelligence Surveillance Act.

Critics of the NSA surveillance programs pointed out that the latest threat had nothing to do with the bulk collection of domestic phone data. Senator Ron Wyden, the Oregon Democract who has been a longstanding voice against the bulk collection of phone records, said the latest threat was "serious".

But Wyden, a member of the Senate intelligence committee, added: "While I can't go into specific details, the vice chairman of the Senate intelligence committee noted yesterday that this information was collected using section 702 of the Foreign Intelligence Surveillance Act, rather than the Patriot Act. I still haven't seen any evidence that the NSA's dragnet surveillance of Americans' phone records is providing any unique value to American counterterrorism efforts."

Privacy campaigners criticised the widespread linking of the latest terror alerts with the debate over the domestic powers of the NSA. Amie Stepanovich, a lawyer with the Electronic Privacy Information Center, said: "The NSA's choice to publish these threats at this time perpetuates a culture of fear and unquestioning deference to surveillance in the United States."

News of the fresh terror alert came as Congress looked increasingly likely to pursue fresh attempts to limit the NSA's domestic powers when it returns in September.

"The NSA takes in threat information every day. You have to ask, why now? What makes this information different?" added Stepanovich.

"Too much of what we hear from the government about surveillance is either speculation or sweeping assertions that lack corroboration. The question isn't if these programs used by this NSA can find legitimate threats, it's if the same threats couldn't be discovered in a less invasive manner. This situation fails to justify the NSA's unchecked access to our personal information."

Late on Sunday, the State Department confirmed the closures would continue for several days.

"Given that a number of our embassies and consulates were going to be closed in accordance with local custom and practice for the bulk of the week for the Eid celebration at the end of Ramadan, and out of an abundance of caution, we've decided to extend the closure of several embassies and consulates including a small number of additional posts," the department said in a statement.

"This is not an indication of a new threat stream, merely an indication of our commitment to exercise caution and take appropriate steps to protect our employees including local employees and visitors to our facilities."

Posts in Abu Dhabi, Amman, Cairo, Riyadh, Dhahran, Jeddah, Doha, Dubai, Kuwait, Manama, Muscat, Sanaa, Tripoli, Antanarivo, Bujumbura, Djibouti, Khartoum, Kigali, and Port Louis are instructed to close for normal operations from Monday, August 5 through to Saturday, August 10.

Other posts that are normally open on Sunday, but were closed on Sunday, August 4, were due to reopen for normal operations on August 5, including: Dhaka, Algiers, Nouakchott, Kabul, Herat, Mazar el Sharif, Baghdad, Basrah, and Erbil.


Embassy closures earn little respect for a US that's lost the benefit of the doubt

We might be forgiven for thinking embassy closures provoked by terrorist threats were all very convenient for the NSA

Richard Norton-Taylor, Monday 5 August 2013 16.30 BST          

Not so long ago, a decision by the US and other western countries to close their embassies because of a risk of terrorist attacks, citing "chatter" from intercepted communications between al-Qaida-inspired jihadists, would have been treated overwhelmingly with unquestioning respect.

That the response may be very different now is recognised by members of the US senate intelligence committee. The closure of 25 US embassies across North Africa and the Middle East demonstrated just how important the National Security Agency (NSA) and its ability to bug huge amounts of communications, was in protecting the security of Americans, they insisted.

That they needed to go so far out of their way to defend the NSA is testament to growing concern among many other members of Congress and the US public, according to opinion polls, since the disclosure by Edward Snowden, to the Guardian and Washington Post, of the extent to which the NSA is intercepting the personal communications of Americans and non-Americans alike.

We might be forgiven for the thought that the embassy closures provoked by terrorist threats were all very convenient – even though they came after attacks on prisons in Iraq and Libya and elsewhere, reportedly leading to the escape of many al-Qaida-inspired extremists.

The US state department in Washington said the decision on Monday to extend the embassy closures was taken "out of an abundance of caution". That might be understandable given the political fallout of the attack on the US consulate in Benghazi last September and the death of the US ambassador Chris Stephens – fallout now fuelled by reports that up to 35 CIA operatives were in the Libyan city at the time trying to procure weapons for rebels in Syria.

Scepticism is healthy. For far too long the intelligence agencies of the US – and Britain – have been allowed to hide behind a wall of secrecy as they hoisted the flag of "national security" before which everyone else must genuflect. Secret courts and congressional committees in the US, and parliamentarians in the UK, tasked with monitoring the activities of the agencies, have been seduced too easily by the privilege of being allowed to be party to those secrets.

That scepticism may lead to potentially dangerous cynicism is the fault of the failure adequately and convincingly to hold the intelligence agencies to account. The detail of operations, certainly recent ones and ones planned for the near future, may need to be protected by secrecy. But as other commentators have pointed out, the US government, in its approach to secrecy and in particular in its attitude towards WikiLeaks and Bradley Manning, has not been able to distinguish between a US Apache helicopter crew shooting unarmed men, including Reuters journalists in Iraq, and the exposure of operations that might conceivably threaten the lives of innocent Americans.

The US and UK securocracies have not been able to distinguish between the invasion of privacy and a legitimate need to protect the public from terrorist threats. Until they do so, they will sacrifice the "benefit of the doubt" approach, the public's trust, that they will need to depend on in future.


As an American, I question the US travel alerts and embassy closures

We've seen this before where US presidents cite terrorism concerns in an effort to win back public opinion

Lance deHaven-Smith, Monday 5 August 2013 18.00 BST   

It is unfortunate, but true that Americans cannot trust the statements of their leaders about threats to national security. Ironically, this is especially so when questions are being raised about the competence of the government or the legitimacy of its policies. The United States government has a long history of deflecting criticism by crying wolf, especially the terrorism kind of wolf.

On Friday, the US State Department issued a global travel alert after announcing it was closing 22 diplomatic missions in the Middle East and North Africa. US officials said they had intercepted electronic communications of al-Qaida operatives talking about attacking American interests in the region. Travelers were advised to "take every precaution to be aware of their surroundings" and to register their travel plans with the State Department.

There are several reasons to wonder if this threat is being concocted – or at least exaggerated – for political purposes. One reason, of course, is the timing of the alert. Allegedly based on electronic eavesdropping, the alert comes in the midst of a national and international political firestorm over the continuing revelations of Edward Snowden about the electronic surveillance programs of the National Security Agency. Opposition to the NSA dragnet that is sweeping up data on millions of Americans' emails, phone calls, and internet activities is snowballing in US public opinion and in Congress. The NSA programs have also become a major issue in the domestic politics of America's allies.

To say that the Obama Administration and US intelligence community are alarmed about these developments is a huge understatement. The nation's top leaders have been apoplectic in condemning Snowden as well as any nation that even mentions the possibility of offering him asylum. Both President Obama and Secretary of State John Kerry have been personally involved in trying to cut off Snowden's escape from American authorities.

While Russia Federation was considering Snowden's application for temporary asylum, the US Department of Justice made the embarrassing and telling promises that, if Snowden were returned to the US, he would not be tortured, deprived of a public trial with a jury, or subjected to the threat of capital punishment. These promises were necessary because all of these protections were denied to Bradley Manning, who, despite committing an essentially civilian crime of leaking evidence of war crimes to the press, was held in harsh conditions, charged with a capital offense, and tried by a military court with a judge and no jury.

Another reason for being suspicious about Friday's announcement of the travel alert and mission closures is the justification given for them in official statements. The travel alert is available on the Department of State's website. It says the US continues "to work closely with other nations on the threat from international terrorism" and "routinely" shares information with America's "key partners" in an effort "to disrupt terrorist plotting, identify and take action against potential operatives, and strengthen our defenses against potential threats". This reads likes a public relations statement for the people of Germany and the United Kingdom, who have expressed outrage not only at the NSA programs but also at the extent to which their own governments have cooperated with the NSA operations in their countries.

Third, the recent travel alert and mission closures warrant suspicion because of the US government's history of using terror alerts to manipulate public opinion. The Bush-Cheney Administration issued terror alerts at two key points in its first term. In May of 2002, Dan Rather accused administration officials of issuing a bogus terrorist alert for New York City. At the time, Rather was the anchorman for CBS nightly news, and a week earlier his network had reported that Bush had been briefed by the CIA in August 2001 about possible terrorist attacks on US soil involving airplane hijackings by al-Qaida. Democrats in Congress were calling for a 9/11 investigation. The alert in May, as Rather pointed out, effectively changed the subject.

The Bush-Cheney Administration also issued a series of terror alerts in the run-up to the 2004 presidential election. The president's popularity soared after 9/11, but it declined in 2003 and 2004 because of the invasion of Iraq, the fact that the administration's claims about Iraqi WMD proved false, and a major insurgency developed in Iraq after President Bush had declared "mission accomplished". However, Bush's popularity spiked upward whenever the terrorist threat level was raised from yellow to orange. After terror alerts were raised in 2003 and 2004 whenever Bush's numbers were low, speculations went viral in the blogosphere that the alerts were being timed politically to improve Bush's chances of reelection.

The administration's defenders dismissed these speculations as "conspiracy theories". In the United States, this retort is sufficient to silence stories in the mainstream media unless the accusations are supported by smoking-gun evidence of elite political intrigue. It was not until five years later, after Bush and Cheney were out of office, that the truth came out. Tom Ridge, who had served as Secretary of Homeland Security in the Bush-Cheney Administration, admitted in writing that he had been pressured to raise the alert levels to bolster Bush's popularity as the 2004 presidential election approached.

This is not the only example in modern American history of US leaders crying wolf to trigger a rally-around-the-president effect. As the 1964 presidential election approach, President Lyndon Johnson, a Democrat, was being blasted by Republican presidential candidate Barry Goldwater for not being sufficiently aggressive in Vietnam. The Johnson Administration responded by claiming inaccurately that North Vietnamese gunboats attacked a US ship in international waters near the Gulf of Tonkin. Congress passed the Gulf of Tonkin Resolution in October, the US sent combat troops to South Vietnam, and in November Johnson won by a landslide.

Other examples could be cited, but the important point is that people everywhere have good reasons to be suspicious when the US government issues warnings that have the effect of fomenting fear and quelling criticism. Dismissing doubts about possible intrigue on the grounds that they are "conspiracy theories" stymies debate when it is most needed.

In the months ahead, America and other democracies will be reconsidering the limits of government surveillance. Now is not the time to accept US government warnings uncritically. Quite the opposite, present circumstances call for the utmost vigilance against possible intrigue by officials who have proven to be less than candid and cautious in interpreting their legal authority and protecting, preserving, and defending the Constitution.


White House warns some US embassies could remain closed for another month

Obama administration downplays connection between current scare and ongoing debate over NSA surveillance in the US

Dan Roberts and Spencer Ackerman in Washington, Monday 5 August 2013 22.54 BST   

The White House has warned the terror alert which forced US embassy closures across the Middle East and Africa could continue for another four weeks as it revealed its intelligence indicated an ongoing threat "from now until the end of August".

It was widely reported on Monday that the closures follow an intercepted communication between al-Qaida leader Ayman Zawahiri and the chief of the terrorist organization's Yemeni affiliate.

Supporters of the NSA's surveillance tactics have used the latest threat to justify their opposition to reining in the agency's domestic spying activities. But the information related to the latest threat was collected overseas under the Foreign Intelligence Surveillance Act – not the bulk surveillance programs disclosed by the Guardian and the Washington Post thanks to whistleblower Edward Snowden.

White House spokesman Jay Carney distanced himself from those linking the scare to recent debates about the agency's surveillance power in the US.

The White House and State Department also both sought to downplay the impact of the shutdown on the effectiveness of US diplomacy in the region, stressing the embassy closures should not be seen as indefinite.

"This is a temporary measure and it is out of an abundance of caution," said Carney. "We are engaged around the world and that engagement creates some risk. This decision is designed to reduce that risk but our engagement will continue."

In contrast to NSA supporters who have been quick to link the surveillance debate with the current scare, the White House sought to downplay any political implications.

"I am not going to blend those two stories together," added Carney. "We have a threat that we have advised the public about and we have a set of issues regarding the unauthorised disclosure of classified information that has led to a debate about the balance between protecting our security and maintaining privacy – I wouldn't blend the two issues."

The White House did however re-iterate its threat to boycott a planned bilateral summit with President Putin in Moscow in retaliation for its decision to grant temporary asylum to NSA whistleblower Edward Snowden.

Asked if there was any relationship between the embassy alerts and the recent NSA controversies, Marie Harf, a State Department spokeswoman, said "I can assure that in no way, at all, period, affects" the State Department's threat assessment.

While the administration did not make the link, others did. On Sunday, Rebublican senator Saxby Chambliss said the NSA had identified threats that were the most serious for years and akin to levels of "terrorist chatter" picked up before 9/11. "These [NSA] programs are controversial, we understand that," he told NBC's Meet the Press on Sunday. "But they are also very important … If we did not have these programs, then we simply would not be able to listen in on the bad guys."

Critics of the NSA surveillance programs were measured in their responses. Senator Ron Wyden, the Oregon Democract who has been a longstanding voice against the bulk collection of phone records, said the latest threat was "serious".

As a member of the Senate intelligence committee, Wyden receives classified briefings, but he added: "While I can't go into specific details, the vice chairman of the Senate intelligence committee noted yesterday that this information was collected using section 702 of the Foreign Intelligence Surveillance Act, rather than the Patriot Act. I still haven't seen any evidence that the NSA's dragnet surveillance of Americans' phone records is providing any unique value to American counterterrorism efforts."

Privacy campaigners criticised the linking of the latest terror alerts with the debate over the domestic powers of the NSA. Amie Stepanovich, a lawyer with the Electronic Privacy Information Center, said: "The NSA's choice to publish these threats at this time perpetuates a culture of fear and unquestioning deference to surveillance in the United States."

News of the fresh terror alert came as Congress looked increasingly likely to pursue fresh attempts to limit the NSA's domestic powers when it returns in September.

"The NSA takes in threat information every day. You have to ask, why now? What makes this information different?" added Stepanovich.

"Too much of what we hear from the government about surveillance is either speculation or sweeping assertions that lack corroboration. The question isn't if these programs used by this NSA can find legitimate threats, it's if the same threats couldn't be discovered in a less invasive manner. This situation fails to justify the NSA's unchecked access to our personal information."

US embassies have been closed temporarily in response to similar perceived terrorist threats, but rarely for this long. Four embassies were closed for the first anniversary of 9/11 in 2002; six African embassies were closed for 3 days in June of 1999; and 38 embassies shut for 2 days in December 1998.

"I don't want anyone to think we're leaning toward indefinite closure," Harf said, emphasizing that many of the embassies would largely have been closed or on relaxed hours due to the Eid holiday.

Harf said the threat "looks credible" in response to a question about whether it might have been a decoy once revelations of NSA surveillance became public.

"We continue to refine our assessment of the threat," Harf said.


August 5, 2013

Qaeda Leader’s Edict to Yemen Affiliate Is Said to Prompt Alert


WASHINGTON — The Obama administration’s decision last week to close nearly two dozen diplomatic missions and issue a worldwide travel alert came after the United States intercepted electronic communications in which the head of Al Qaeda ordered the leader of the group’s affiliate in Yemen to carry out an attack as early as this past Sunday, according to American officials.

The intercepted conversations last week between Ayman al-Zawahri, who succeeded Osama bin Laden as the head of the global terrorist group, and Nasser al-Wuhayshi, the head of the Yemen-based Al Qaeda in the Arabian Peninsula, revealed what American intelligence officials and lawmakers have described as one of the most serious plots against American and Western interests since the attacks on Sept. 11, 2001.

American officials said that it was highly unusual for senior Qaeda leaders in Pakistan to discuss operational matters with the group’s affiliates. The communication between the two men seems to indicate that Mr. Zawahri — whom administration officials have portrayed as greatly diminished and hindered in running a global terror network while deep in hiding — still has a strong influence over a group in Yemen that has become Al Qaeda’s most powerful offshoot.

In recent weeks, counterterrorism officials said, Mr. Zawahri has elevated Mr. Wuhayshi to what one official described as the new “general manager” of the global terror network, making him the second most important man in the organization.

The identities of the two Qaeda leaders whose discussions were monitored and the imminent nature of the suspected plot — in the intercepts, the terrorists mentioned Sunday as the day that the attacks were to take place — help explain why the United States, as well as other Western governments, took such extraordinary steps in the past few days to close embassies and consulates in the Middle East and North Africa.

“This was significant because it was the big guys talking, and talking about very specific timing for an attack or attacks,” said one American official who had been briefed on the intelligence reports in recent days.

Yemen experts said that Mr. Wuhayshi, who was Bin Laden’s private secretary in Afghanistan, remains particularly loyal to the core group of Qaeda operatives who are believed to mostly be hiding in Pakistan.

“Wuhayshi was groomed by Osama bin Laden to take on a leadership role, and he was able to use his connections to Bin Laden to become head of AQAP,” said Gregory D. Johnsen, a Yemen scholar at Princeton and author of “The Last Refuge,” a book about Al Qaeda in Yemen.

Mr. Wuhayshi fled to Iran from Afghanistan in 2001, but was extradited to Yemen in 2003. In 2006, he was part of a mass breakout from a prison in Sana that led to a resurgence of Al Qaeda’s operations in Yemen. In recent years, the Qaeda group there, Al Qaeda in the Arabian Peninsula, has tried to carry out several high-profile attacks.

One was an attempt to blow up a trans-Atlantic jet over Detroit on Dec. 25, 2009, using explosives sewn into a passenger’s underwear. Last spring, a C.I.A. double agent spirited out of Yemen an even more sophisticated explosive that was meant to blow up an American commercial airliner.

A campaign of American drone strikes and a Yemeni Army offensive have put the Qaeda affiliate under heavy pressure over the past 18 months, with militants pushed out of the territory they had been holding and back into hiding.

But even with these setbacks and the years of drone strikes, the group has continued to publish an English-language online magazine, Inspire. Yemen has been at the center of the recent uptick in threat levels, and Mr. Johnsen said American estimates of the group’s followers had actually increased.

“The question I have is, If the Obama administration is confident that its strategy in Yemen is correct, then why is Al Qaeda growing in Yemen and why is the group still capable of forcing the United States to shut down embassies in more than a dozen countries?” Mr. Johnsen said.

In an article posted on the Web on Friday and published on Saturday, The New York Times agreed to withhold the identities of the Qaeda leaders whose conversations were intercepted after senior American intelligence officials said the information could jeopardize their operations. The names were disclosed Sunday by McClatchy Newspapers, and after the government became aware of the article on Monday, it dropped its objections to The Times’s publishing the same information.

The State Department on Monday defended its decision on Sunday to extend the closing of 19 diplomatic posts in the Middle East and North Africa through at least Saturday because of continued fears of an imminent attack.

“We are going to keep evaluating information as it comes in, keep analyzing the various intelligence that we’re getting in in regards to this stream,” said a State Department spokeswoman, Marie Harf. “Over all, what we are doing is taking precautionary steps out of an abundance of caution to protect our people and our facilities and visitors to those facilities overseas.”

The embassies that will be closed include the ones in Yemen, Libya, Egypt, Saudi Arabia and the United Arab Emirates, the statement said.

Embassies in Algiers, Baghdad and Kabul reopened on Monday, as did the United States Embassy in Pakistan, even though the Qaeda threat that shuttered many other diplomatic missions emanated in part from that country. Still, rumors of an impending militant attack on Islamabad, the capital — and not necessarily on an American target — coursed through diplomatic and security circles last weekend.

One Western diplomat, speaking on the condition of anonymity, said his mission had received reports that militant attackers had congregated in the Margalla Hills, which overlook the city. But the diplomat stressed that those reports were unconfirmed, and that while the security situation in the city had tightened, there was little information to suggest an impending assault.

Britain and France said Monday that they had extended the closing of their embassies in Yemen until at least Thursday, after Washington announced that its embassy would stay shut until after Ramadan ends, which is to occur around Thursday in most places. The German mission was still closed Monday, while Norway had shut its embassies in Yemen and Saudi Arabia.

Counterterrorism analysts, as well as former intelligence official, said closing the embassies — and depriving Al Qaeda of targets, at least for now — may have deterred an attack.

“The announcement itself may also be designed to interrupt Al Qaeda planning, to put them off stride,” Michael V. Hayden, a former C.I.A. director, said on “Fox News Sunday.” “To put them on the back foot, to let them know that we’re alert and that we’re on at least to a portion of this plotline.”

Steven Erlanger, Katrin Bennhold and Declan Walsh contributed reporting from London.

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