Two Cons and the Emperor's new clothes

The Security con and most securities cons have one important thing in common. They are both variations of the "emperor's new clothes" con. Both rely on often faulty intelligence and analysis Sometimes folks really know what they are doing, but it is easier to play the con, and cheaper. In real life the more data one has the more muddy the picture of what is going on usually is. To get information out of that data one must analyze it, and that introduces personal biases, group biases, cultural, and emotional biases. For that reason it is easier to simply apply those biases and pretend one's data is better quality than it is in fact. Both the security game and the financial game rely on secrecy to make that so much easier.

You remember the story:

A group of salesmen come to the Kings court and tell the king they are weavers of the most wonderful clothing. They arrange an audience with the king in which they pay people to help them convince the king they are selling such clothing. They show him bolts of cloth so magical that only a fool can't see it's wondrous qualities, and all the people in the room nod and pretend that they are looking at real cloth while there actually is nothing there. They then take money from him and begin pretending to weave, and next thing you know he's parading down the street stark naked. All are convinced "that only a fool can't see this cloth" and so everyone watches in awe, pretending that the clothes are magnificent. Meanwhile the grifters abscond with their takings and head for the hills. In the story sometimes a little boy notices the nakedness and points it out and that is how the con is revealed. In some versions they stone the little boy and don't realize the con until they see the grifters have robbed the pallace during the parade.

Our Financial and Security industries have been running such cons.

There are legitimate reasons to keep both economic information and military-industrial-police-security information secret and private. Ironically the main reason is to protect that information from falling into the wrong hands. However, while the "wrong hands" are usually sold to people as outside enemies. The most likely enemy to individual security, safety, privacy and wealth, is usually found in the trustees of that information. Thus we are in most danger for our personal wealth from our security personnel and from those we've trusted to invest our money. Our republic is in danger, not from outside enemies (they are a danger more to their own communities than ours), but from these grifters who are using our injust laws and spy state to steal from us and empoverish us. In the name of "security, jobs, and prosperity." We once had nice clothes, now all of us are naked because of the cons.

Catch 22 and unintended/Intended consequence

The other day in my article "Surveillance metastasizes" I wrote how the NSA has basically been spun off into various daughter organizations, Fusion Centers, and various program agencies. All this was ordered by an National Security Directive you can find at the Whitehouse website. The article detailed a few of the orders, but not all of them. But it shows how fiendishly transparent our government can be in a Catch 22 Milo Minderbinder kind of way. Anyway one of the organizations had these Instructions:

"Using the National Intellectual Property Rights Coordination Center, an interagency and inter- national law enforcement task force established in 2000 and led by ICE, to assist with combating intellectual property theft and maintaining the integrity of public health, public safety, the military, and the U.S. economy."

... and I deduced (predicted): that "We can expect to find out that NSA intelligence sharing is helping Giant Companies go after people who download movies, pirate software and who knows what else." Well I was right (of course) the referenced organization exists and is relentless in it's pursuit of housewives, teachers and other people in search of material long in the public domain:

http://www.iprcenter.gov/reports/public-service-announcements is their website. And they have a mission:

"The National Intellectual Property Rights Coordination Center (IPR Center) stands at the forefront of the U.S. government’s response to global intellectual property (IP) theft. As a task force, the IPR Center uses the expertise of its member agencies to share information, develop initiatives, coordinate enforcement actions, and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters."

"http://www.iprcenter.gov/about-us"

So they've been active since 2000. With some successes world wide! An article in the blog "Daily dot" claims " Mega founder Kim Dotcom had some key intelligence on his online activity, provided by a foreign government's spy powers" which were used to bring him down. They've also made it possible to arrest folks buying knock off purses and such in New Yorks Manhattan Garment District. That would have killed my late wife twice.

All these fusion centers and orgs are not strictly speaking NSA, so when NSA demurres from claims it spies on school teachers downloading files for teaching materials -- they are technically right. Our Catch 22 rules are secret, so if you want to see them you have to fill out a form. But what you will see, if you are ever allowed to see it, will be redacted.

Lots in the news today.

And when the NSC decided to protect "intellectual property" I'm sure they had more Kim Dotcom in mind than the school teachers they so openly went after recently. It's just easier to go after teenagers, cheap purse buyers, and moms, than Mega companies or actual Pedophiles who might be coaches at important universities or Senators, or Wall Street kleptarchs. Thus we find the FBI working with spies to go after folks protesting Wall Street instead of Wall Street. It's just easier and your benefactors will pay you. That's the law of intended/unintended consequences. Modern Catch 22.

Daily Dot: http://www.dailydot.com/politics/nsa-kim-dotcom-xkeyscore-gcsb/

PBS article on the spies spying on journalists and politicians to keep them in line: http://www.pbs.org/newshour/bb/government_programs/july-dec13/whistleblowers_08-01.html

Yesterdays' post reviewing Sirota's article:The Ghost of J. Edgar Hoover lives on

Catch 22: http://en.wikipedia.org/wiki/Milo_Minderbinder

AP Report on court decision about NSA: http://bigstory.ap.org/article/nsa-collected-thousands-us-communications

The Ghost of J. Edgar Hoover lives on -- A review of Sirota's article

This summary is not available. Please click here to view the post.

Strategic thinking and Corporatism

Strategic thinking means thinking about the long term effects: blow-backs, synergies, negative feedback -- suppresses an effect and positive feedback -- amplifies an effect, of our actions. Generals are taught to think strategically.

Unfortunately Generals usually get to be Colonels by following orders and tactical brilliance -- which isn't always strategically smart -- so truly brilliant Generals are rare. Less rare than you'd think however, and so we've got work by the Joint Chiefs that has looked into all of it.

Those strategies used to be public information, but I believe are now classified, and those fellows examined all these sorts of thing. Colin Powell wrote the book on Asymmetric warfare, and then burned it because he and other Generals involved in Vietnam concluded that such warfare was counterproductive strategically.

More recently they either rewrote the books or dusted them off of hidden shelves because they had to reinvent asymmetric warfare to fight in Afghanistan and Iraq, with pretty much the same inconclusive and strategically stupid results. Even the expansion into other countries reminds people familiar with Vietnam of our invasions of Cambodia and Laos. And folks familiar with the backstory can see how it also involved misunderstandings and bad decisions about countries all over the world in the name of fighting communism but actually in the name of corporatism and international banking.

Ironically the international banking folks won the Vietnam war at our expense. We don't even notice when our jobs get shipped to Vietnam and China.

Surveillance metastasizes

Often the worst official crimes start out as well meaning attempts to improve the fight against criminality, but in a bureaucratic context. That is the case with NSA and it's capabilities. We are told publicly that the NSA only collects "meta information" that there is no privacy expectation on meta-information, and that therefore we should trust NSA that it will strictly enforce the law and hold it's efforts to the scope of the Foreign Intelligence Surveillance Act and we won't spy on Americans. But this is too powerful a tool for the various police agencies in our government to keep to themselves.

From an Anti-Terrorism tool to an Anti-Drug Crime tool

So how did that NSA program get to be the basis for a massive internal spy effort? Well it starts out with a directive asking for improved capability to fight "Transnational Organized Crime"

I can't find the date on this directive. So you have an innocent sounding directive from the white house from the National Security Council dated sometime in 2012 calling for improved Intelligence and information sharing:

Strategy to Combat Transnational Organized Crime: Enhance Intelligence and Information Sharing

The Article gives the standard boilerplate justification:

"A shift in U.S. intelligence collection priorities since the September 11, 2001 attacks left significant gaps in TOC-related intelligence. Meanwhile, the TOC threat has worsened and grown in complexity over the past 15 years. The fluid nature of TOC networks, which includes the use of criminal facilitators, makes targeting TOC increasingly difficult."

So this becomes the rationale for a program initially directed against international Crime Syndicates to become a nationwide program:

"Enhancing U.S. intelligence collection, analysis, and counterintelligence on TOC is a necessary first step, but should be accompanied by collaboration with law enforcement authorities at Federal, State, local, tribal, and territorial levels and enhanced sharing with foreign counterparts. We will also supplement our understanding of TOC involvement in licit commercial sectors to better enable policymakers to develop specific interventions. Our aim is enhanced intelligence that is broad-based and centered on substan- tially upgraded signals intelligence (SIGINT), human intelligence (HUMINT) and open sources intelligence (OSINT). This effort will be aided through greater information sharing with foreign partners and closer cooperation among intelligence, law enforcement, and other applicable agencies domestically."

The problem here is that a program aimed at international drug cartels, but operated down to the locality is going to enable spying on not only drug king-pins, but all the way down to the local pot-head who sells on the side to support his habit. In otherwords. This noble sounding objective is the rationale for a massive program that enables blanket wiretaps of millions of people.

And of course every legal issue has to be a national security issue to justify the secrecy involved:

We will augment our intelligence in step with the new TOC threats described previously. The Administration will review its current intelligence priorities, including the National Intelligence Priorities Framework, and determine how best to enhance our intelligence against the highest-level TOC threats to national security.

Decoding (note some terms skipped because not germaine):

"Enhancing SIGINT and HUMINT collection on TOC threats"...

SIGINT authorizes NSA to gather and keep phone and messaging records on targets. HUMINT allows the hiring of personnel ot infiltrate or spy on people individually.

"Coordinating with the interagency International Organized Crime Intelligence and Operations Center (IOC-2) to utilize existing resources and databases of the Organized Crime Drug Enforcement Task Force (OCDETF) Fusion Center (OFC) and SOD to share intelligence, de-conflict operations, and produce actionable leads for investigators and prosecutors working nationwide;

The Organized Crime Drug Enforcement Task Force (OCDETF)

"Employs a strategy to focus federal drug resources on reducing the flow of illicit drugs and drug proceeds.., and conducting expanded, nationwide investigations against all the related parts of the targeted organizations." which means down to the end user essentially.

Source; http://www.justice.gov/criminal/taskforces/ocdetf.html

All folks had to do was to read these messages carefully and run down the terms and they could have seen that this order authorized a nationwide spy program. Reuters detailed from what they did, but anyone reading this directive and being able to decode the Acronyms could have predicted it.

Special Operations Division

Established in 1994, the Special Operations Division (SOD) is a DEA-led multi-agency operations coor- dination center with participation from Federal law enforcement agencies, the Department of Defense, the Intelligence Community, and international law enforcement partners. SOD’s mission is to establish strategies and operations to dismantle national and international trafficking organizations by attacking their command and control communications. Special emphasis is placed on those major drug trafficking and narco-terrorism organizations that operate across jurisdictional boundaries on a regional, national, and international level. SOD provides foreign- and domestic-based law enforcement agents with timely investigative information that enables them to fully exploit Federal law enforcement’s investigative author- ity under Title III of the U.S. Code. SOD coordinates overlapping investigations, ensuring that tactical and operational intelligence is shared among law enforcement agencies.

The Fusion Centers

...are State organized entities that use wiretap information to go after general crime as directed by Governors at the State Level. There are also Fusion centers established by the Federal Government to operate various programs. The article goes on to define a number of them. I'm only sharing those directly related to domestic spying but the whole idea of fusion centers is to coordinate efforts, which usually means coordinating domestic spying, law enforcement and international spying. So the argument that "we don't spy on US citizens" is either false, or these organizations don't do anything.

De-conflict operations

First reading suggested this was an effort to prevent conflict, but it appears that this referred to the effort to ensure that every effort using spying was supported by nonspying corroborating evidence so the investigation real sources could be kept secret.

And this is a scandal as yet unrevealed:

"Using the National Intellectual Property Rights Coordination Center, an interagency and inter- national law enforcement task force established in 2000 and led by ICE, to assist with combating intellectual property theft and maintaining the integrity of public health, public safety, the military, and the U.S. economy."

We can expect to find out that NSA intelligence sharing is helping Giant Companies go after people who download movies, pirate software and who knows what else.

But of course the part that concerns us today is the following order:

" Enhancing Department of Defense support to U.S. law enforcement through the Narcotics and Transnational Crime Support Center."

Authorizing NSA to support Drug warfare in the name of National Security

The next part of the directive specifies actions to be taken. Actions that pretty much spell out authorization for local authorities to use NSA information and to spy on folks related to National efforts, drug enforcement, and law enforcement:

Specifically:

"Strengthen ties among U.S. intelligence and counterintelligence, law enforcement, and military entities, while strengthening cooperation with international intelligence and law enforcement partners.

These efforts were implemented through the Fusion Centers and programs like Infraguard.

Develop and foster stronger law enforcement and Intelligence Community relationships among Federal, State, local, tribal, and territorial authorities.

The following reinforces a long time intelligence sharing effort were we spy for them and they would spy for us:

Support multilateral senior law enforcement exchanges to promote the sharing of criminal intelligence and enhance cooperation, such as the “Quintet of Attorneys-General” and the “Strategic Alliance Group” fora established with the United Kingdom, Canada, New Zealand, and Australia.

And of course the following enables the spies to go after everyone involved in using or dealing drugs;

Establish a comprehensive and proactive information-sharing mechanism to identify TOC actors and exclude them from the United States or uncover them within the United States.

quotes from: http://www.whitehouse.gov/administration/eop/nsc/transnational-crime/intelligence-sharing

The Organized Crime Drug Enforcement Task Force Fusion Center

Created in June 2006, the Organized Crime Drug Enforcement Task Force (OCDETF) Fusion Center (OFC) serves as a central data warehouse for drug intelligence, financial intelligence, and related investigative information, and is designed to conduct cross-agency integration and analysis of such data with a view to creating comprehensive intelligence pictures of targeted organizations, including those identified as Consolidated Priority Organization Targets—the United States’ most wanted international drug and money laundering targets. The OFC provides agencies with operational human and financial intelligence, and is staffed with agents and analysts detailed from 14 participating investigative agencies. These personnel conduct analysis to produce investigative leads, develop target profiles, and identify links between drug organizations and other criminal activity in support of drug investigations.

The International Organized Crime Intelligence and Operations Center

In May 2009, Attorney General Eric Holder announced the establishment of the International Organized Crime Intelligence and Operations Center (IOC-2), an entity that marshals the resources and information of U.S. law enforcement agencies and Federal prosecutors to collectively combat the threats posed by inter- national criminal organizations. Understanding that international criminal organizations are profit-driven, IOC-2 also works with investigators and prosecutors to target the criminal proceeds and assets of inter-national criminal organizations. In recognition of the demonstrated interrelationship between criminal organizations that engage in illicit drug trafficking and those that engage in international organized crime involving a broader range of criminal activity, IOC-2 works in close partnership with the OFC and SOD.

The IOC would not be germaine to domestic crime, except it works with the SODs and shares intelligence with other Fusion Centers and Federal and State Law enforcement.

The EPIC Border Intelligence Fusion Section

The El Paso Intelligence Center (EPIC), managed by the DEA, was established in 1974 to support enforce- ment efforts against drug and alien smuggling along the Southwest border. EPIC has grown over time to better support Federal, State, local and tribal law enforcement. The DHS Office of Intelligence and Analysis established the Border Intelligence Fusion Section (BIFS) at EPIC in November 2010 with the objective of providing U.S. law enforcement, border enforcement, and investigative agencies with multi-source intelligence and law enforcement information to support investigations, interdictions, and other law enforce- ment operations related to the Southwest border. The BIFS is a joint, collaborative effort of the Department of Homeland Security, Department of Justice, Department of Defense, and partners in the Intelligence Community and, as a multi-source/all threats intelligence section at EPIC, the BIFS will access and analyze intelligence and information received by and developed at EPIC in order to produce a common intelligence picture and common operating picture.

EPIC is a classic example of mission creep.It was supposed to focus almost entirely on border crime, but now it works with local law enforcemnt along the border and within border states. This amounts to most of the country.

http://www.whitehouse.gov/administration/eop/nsc/transnational-crime/intelligence-sharing

So from necessary "national security needs" we develop programs that wind up causing all sorts of troubles for ordinary Americans.

Thanks to these capabilities we have millions of people in prison.

http://www.alternet.org/how-many-americans-are-rotting-prison-because-secret-evidence-collected-spy-agencies

From Alternet/Salon / By Andrew O'Hehir DEA:

This is the logic of National Security. Everyone is connected to someone. And even if someone like you or I aren't involved in drug smuggling, we might read books, or be related to someone who is. So it's ironic that the people with the most separation from international drug cartels are the most targetted. It is also ironic that the people who should have been closest to the programs are the last ones to find out about them.

How the SOD bypasses the Constitution

Fakhoury (Deeplinks) writes in SOD bypasses the Constitution

Even beyond the larger systemic problem of insulating NSA surveillance from judicial review, criminal defendants whose arrest or case is built upon FISA evidence are now deprived of their right to examine and challenge the evidence used against them.

Fakhoury goes on:

Documents uncovered by Reuters specifically instruct federal agents and local police to “omit the SOD’s involvement from investigative reports, affidavits, discussions with prosecutors and courtroom testimony.” Instead, cops and agents are told to “recreate the investigative trail” to make it look like regular police work. This is “parallel construction,” a marvelous and terrifying bureaucratic neologism that in plain English appears to mean lying. For instance, it might mean claiming that a traffic stop that led to a drug bust stemmed from a broken taillight or an illegal left turn, rather than an NSA intercept, an overseas wiretap or a CIA informant. "

And all this flows from the National Security Commission and their directives to do "intelligence sharing" and go after the drug cartels. Only they usually can't get the leaders of the various International Organizations -- so they go after ordinary folks instead. It's easier.

Fakhoury’s recent post on the EFF’s DeepLinks blog explores various ways that these deliberate deceptions appear to violate the Fifth and Sixth Amendments, and undercut the crucial role of legal scrutiny entrusted to the courts. They prevent judges from assessing the constitutionality of government surveillance (since they never even find out about it), and deprive criminal defendants of the venerable common-law right to examine and challenge the evidence against them. He also makes the broader point that the NSA’s enormous trove of surveillance data has provoked an “unquenchable thirst for access” among other law enforcement agencies, whose leaders imagine all the wonderful things they could do with it. "

This is because the information from deep sources, being clearly unconstitutional is "wiped" from the investigative records after it is "cleared" and verified through legal channels.

Taken together, the Fifth and Sixth Amendments guarantee a criminal defendant a meaningful opportunity to present a defense and challenge the government's case. But this intelligence laundering deprives defendants of these important constitutional protections. It makes it harder for prosecutors to comply with their ethical obligation under Brady v Maryland to disclose any exculpatory or favorable evidence to the defense—an obligation that extends to disclosing evidence bearing on the reliability of a government witness. Hiding the source of information used by the government to initiate an investigation or make an arrest means defendants are deprived of the opportunity to challenge the accuracy or veracity of the government's investigation, let alone seek out favorable evidence in the government's possession.

This means that even judges don't know what is going on. The Reuters article notes:

Nancy Gertner, a Harvard Law professor who spent 18 years as a federal judge and cannot be accused of being a radical, told Reuters she finds the DEA story more troubling than anything in Edward Snowden’s NSA leaks. It’s the first clear evidence that the “special rules” and disregard for constitutional law that have characterized the hunt for so-called terrorists have crept into the domestic criminal justice system on a significant scale. “It sounds like they are phonying up investigations,” she said. Maybe this is how a police state comes to America: Not with a bang, but with a parallel construction."

Actually I'd say it comes to America with Joint operations, Fusion Centers and parallel construction is just one of the means to keep the program a secret so we can all continue to live under the delusion that we actually live by the principles of our declaration of Independence and the bill of rights. After all if you don't know you are being spied on "no knowledge, no foul." It "never happened" is something I've heard before. For most of my career, and that of many other folks connected to the Federal Government we've been using. but there are fouls here:

"Millions of people have been sent to prison on drug-war convictions over the last 20 years. Most of those people have been poor and black. We will never know how many of those cases resulted from secret evidence collected by spy agencies, but it might not be a small number. One of the Reuters articles that broke this story quotes DEA officials as saying that the “parallel construction” tactic had been used by the agency “virtually every day since the 1990s.” Legal scholar Michelle Alexander, author of the recent bestseller “The New Jim Crow: Mass Incarceration in the Age of Colorblindness,” sent me an email from her family vacation to say that these revelations “certainly lead one reasonably to wonder how many people — especially poor people of color, who have been the primary targets in the drug war — have been spied on by the DEA in the name of national security.”

The article from Alternet goes on:

"over the past week, the DEA’s Special Operations Division – originally created in 1994 to battle Latin American drug cartels – routinely funnels “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.” We’re talking about data collected by all the clandestine but theoretically legal means that Edward Snowden’s leaks have told us about, data gathered in the name of combating terrorism that ends up being used for entirely different purposes. These are ordinary drug prosecutions with no links to terrorism or other national security issues, but in which the information that led to the original arrest is treated as a state secret. "

No Wonder the Administration is angry. Most of us in this business keep our mouths shut about this stuff. Heck, if I were still working or got a job in the business again I'd revert to my usual "I see Nothink! I see NothinK!" response to this stuff. It's a shame that those of us connected to the military and the security state should have to quote from "Hogan's heros" which was about prisoners in the German POW Concentration camps after all.

PS: The list is long

The enemies list has already expanded. In my previous blog I noted how Occupy was labeled a "potentially terrorist" organization and gone after in coordinated efforts out of Norfolk. I haven't finished running down the details of that story yet, but the Fusion centers now seem to have access to NSA wiretap info to go after pretty much anything they want to. And even worse info is hinted in the directive's mention of "intellectual property" because that is a private effort and yet NSA is directed to provide intelligence to them too.

And the IRS

UPDATE: Add the IRS to the list of federal agencies obtaining information from NSA surveillance. Reuters reports that the IRS got intelligence tips from DEA's secret unit (SOD) and were also told to cover up the source of that information by coming up with their own independent leads to recreate the information obtained from SOD. So that makes two levels of deception: SOD hiding the fact it got intelligence from the NSA and the IRS hiding the fact it got information from SOD. Even worse, there's a suggestion that the justice Department (DOJ) "closely guards the information provided by SOD with strict oversight," shedding doubt into the effectiveness of DOJ earlier announced efforts to investigate the program.

Further Readings and links used in this post:

Reuters Article: http://www.reuters.com/article/2013/08/07/us-dea-irs-idUSBRE9761AZ20130807

article on NSA http://www.wired.com/threatlevel/?p=58188

http://en.wikipedia.org/wiki/Information_Awareness_Office

http://www.alternet.org/how-many-americans-are-rotting-prison-because-secret-evidence-collected-spy-agencies

Further Readings:

ttp://www.infragard-norfolk.org/

http://www.theguardian.com/world/2013/aug/05/secret-dea-unit-surveillance-authorities

Later writings by me:

On DSAC:http://holtesthoughts.blogspot.com/2013/09/the-domestic-security-alliance-council.html

Additional Readings:

http://www.whitehouse.gov/the-press-office/2013/08/09/press-briefing-press-secretary-jay-carney-882013

http://www.whitehouse.gov/blog/2013/08/09/protecting-our-security-and-preserving-our-freedoms

Bush's Loogie: http://holtesthoughts.blogspot.com/2013/08/bushs-loogie.html

Forbes Editorial:http://www.forbes.com/sites/kashmirhill/2013/08/09/lavabits-ladar-levison-if-you-knew-what-i-know-about-email-you-might-not-use-it/

Forbes Lavabit article: http://www.forbes.com/sites/kashmirhill/2013/08/08/email-company-reportedly-used-by-edward-snowden-shuts-down-rather-than-hand-data-over-to-feds/

Guardian Articlehttp://www.theguardian.com/commentisfree/2013/aug/09/lavabit-shutdown-snowden-silicon-valley

Privatization

Privatization is the turning over of services and entities to private government. It is a form of rent seeking in which persons seek to govern an entity for the sake of wealth and riches (profit). The rent seekers usually sell their services either on the premise that they can do a better job of running entities or they simply acquire and exercise power and control over entities and systems through acquisition and exercise of power. When they create the system they run that is not strictly speaking privatization as they are running that service from the start. But the results are similar.

Privately run entities are usually run for the private separate advantage of the owners and investors. They are usually monopolies and so such entities usually control their markets, have unequal power and information, can set monopolistic rents on their goods and services, and usually are monopolies or part of an oligarchic power structure. And so their rule of services and entities is usually oppressive and redistributes wealth from customers and employees to investors and owners.

History verifies is worse than bureaucratization (and usually combined). In the 19th century the Pennsylvania Railroad was bigger, had more power, and a bigger bureaucracy, than the State Government of Pennsylvania. Eventually they had to be "regulated" because they couldn't logically be broken up (on the contrary they needed to be integrated). Once regulated our Railroads decayed because private management was monopolistic acquisitive and diverted it's trust accounts to speculative purposes. Using it's monopoly over rails and steady income to finance other activities. A Government entity must be run on a mission; which may not have an end point but does have virtues and objective measures. For example a railroad provides transportation services and integrates towns and country; but private government does not have that mission, it's only mission is to make money. And as demonstrated with turnpikes, canals, railroads, and countless other examples going back to before the USA was a company, that is fatal to the efficient running (government) of any service or system.

Privacy protections like a string thong in a mens club

Press Secretary Carney's Press Conference August 9

Snowden's whistleblowing has embarrassed the administration because domestic spying in a Democracy is only effective if it is secret and under strict control. At least that is the premise of authorities before, and after, the word "democracy" becomes a joke due to abuses of spy powers. I was listening to Press Secretary Carney as he was asked about NSA spying. His carefully worded answer was that:

MR. CARNEY: "Well, I think the article eventually explained we have made clear that under FAA 702, the NSA may not intentionally target a U.S. person. In carrying out its mission, NSA collects only what it is explicitly authorized to collect. And while NSA analysts examine only a very small percentage of the world’s traffic, if communications of U.S. persons are incidentally collected the agency must follow minimization procedures that are approved by the U.S. Attorney General and designed to protect the privacy of U.S. persons. Specifically, these procedures require NSA to minimize the acquisition processing, retention and dissemination of information of or concerning U.S. persons."

His answer was no difference from what Bush's Press Secretaries were saying. This of course is talking about the National Security Agency. And the problem is that reporters are asking the wrong question. Carney is absolutely right. NSA itself is not supposed to spy on US citizens. It's job is to spy on foreign threats. For spying on US citizens you have to look to other agencies and other programs, which piggyback on FISA and work with NSA, so that technically it's not the main NSA FISA program doing the spying. Carney can say:

"The purpose of the program is to investigate and potentially prevent terrorist threats emanating from foreign sources. And the protections in place regarding the inadvertent collection of information of U.S. citizens ensure that there's a minimized -- a process of minimization that protects the privacy of American citizens."

...and be perfectly misleading. The reporter, of course, already knows this is not the whole truth, so asked for a redirect in plain language about NSA listening/reading private citizen messages:

MR. CARNEY: "It's not being read. The information that is targeted has to do with terrorist threats or potential terrorist threats emanating from foreign persons in foreign areas. And there are procedures in place -- as I just described and I'm sure ODNI and others, NSA, can explain to you in greater detail -- that ensure that inadvertently collected information is minimized and dealt with appropriately.

The right questions are "are there other programs, beyond what NSA does, that do sift through private messages? Does the DEA have access to the so called "Corporate Store?" But Carney is probably forbidden to answer that question. Reporters have to be savvy enough to ask the right questions. What NSA does as NSA is the wrong question. And really they just need to do their homework. The white house press corps is supposed to be the best of the best. So far they've just shown they are the toadiest of a pack of toads.

Civil Liberties problem or PR problem?

Obama is almost breaking relations with Russia because he's sheltering Snowden. The irony of this is that we used to regularly harbor dissidents from the World oppression, the Russian Gulag and the Russian surveillance state, and we'd get super ticked if anyone threatened us for it. Russia is a sovereign state, and Snowden seeking assylum there is appropriate given that it is probably the only country that still is willing to stand up to us, he really does face torture and mistreatment when and if he ever returns to the USA, and Snowden did break the law but IS a whistleblower. If is he were a simple spy the USA government would probably get ticked and otherwise go "ho hum" that's the spy game. They are ticked at Snowden because he did blow the whistle on some programs that directly violate the constitution, directly violate liberal (not libertarian --that is a brand rustling counterfeiter operation) traditions, and traditions of free speech and good government. If Snowden were so wrong the President wouldn't have felt it necessary to give a speech affirming respect for due process, privacy, and individual civil rights

President's speech:

So the President gave a speech where he "highlighted his commitment to the balance between “protecting our security and preserving our freedoms" and announced his plans for increased transparency and reforms in our intelligence programs, in order to give the public confidence that these programs have strong oversight and clear protections against abuse:

"The American people need to have confidence in them as well. And that's why, over the last few weeks, I’ve consulted members of Congress who come at this issue from many different perspectives. I’ve asked the Privacy and Civil Liberties Oversight Board to review where our counterterrorism efforts and our values come into tension, and I directed my national security team to be more transparent and to pursue reforms of our laws and practices."

He wouldn't have called for "appropriate reforms" of FISA and NSA if Snowden hadn't embarrassed him.

Infowars, Infragard, Fusion Centers and State Control

In his speech he agreed that the secret courts shall have a secret defense bar to represent those who don't know they are being spied on, probably as well as public defenders defend accused criminals in most states. Personally I'm not impressed. This looks like a PR move, and the center of abuses isn't at the Federal level anyway, it's at the State Level and it is centered on Fusion Centers and programs like Infragard, where these same national agencies work with State and local police, private and State agencies, and fight crime, "terrorism", "unrest", drugs, and whatever the pet Peeve of the local governor is; all with access to databases that originally were supposed to be for spying on spies only.

Fact is, as I alluded to the other day in "Bush's Loogie", General Hayden, Bill Casey, and others envisioned a public-private security capability that could focus on domestic spying and operate under fewer restrictions than Government agencies operating under supervision of courts and officials afraid of their shadow. but of course, courts need judicial oversight too;

Metastasis

The real problem is not the government going after Al Qaeda or actual terrorist groups. It is when they use the resources of a spy/police state to attack citizens trying to live within their lives and pursue their private affairs. Not everyone is a criminal, but for police and spy types, everyone is suspect until cleared. When prosecutorial forces are allowed to run free, the burden of proof for criminality becomes "can you prove your are innocent" or not. And since no human being is completely innocent, that means that no human being can be secure from a spy state. Spying Metastasizes. Moreover, spy states become so single mindedly obsessed about enemies and potential enemies that they will shut down or attack anything that gets in the way of their operations. And they will use their powers of official secrecy to criminalize efforts for such institutions to defend themselves from them. This is going on here. Yesterday, Lavabit, an internet email supplier shut down rather than comply with a secret court order:

http://www.theguardian.com/commentisfree/2013/aug/09/lavabit-shutdown-snowden-silicon-valley Greenwald writes (it's also in Forbes and other articles):

"A Texas-based encrypted email service recently revealed to be used by Edward Snowden - Lavabit - announced yesterday it was shutting itself down in order to avoid complying with what it perceives as unjust secret US court orders to provide government access to its users' content. "After significant soul searching, I have decided to suspend operations," the company's founder, Ladar Levinson, wrote in a statement to users posted on the front page of its website. He said the US directive forced on his company "a difficult decision: to become complicit in crimes against the American people or walk away from nearly ten years of hard work by shutting down Lavabit." He chose the latter.

And so, will it really save us from the security forces if the secret courts have a secret defense, secret court orders, gag the ones they serve, and make it criminal to complain?

"CNET's Declan McCullagh smartly speculates that Lavabit was served "with [a] federal court order to intercept users' (Snowden?) passwords" to allow ongoing monitoring of emails; specifically: "the order can also be to install FedGov-created malware." After challenging the order in district court and losing - all in a secret court proceeding, naturally - Lavabit shut itself down to avoid compliance while it appeals to the Fourth Circuit.

So, here we have secret courts (presumably FISC court, but possibly just district courts) ordering secret behavior aimed, not at going after Foreign operatives, but going after an alleged "spy", Snowden, who most people would label more a whistleblower. And from the record around this, they probably were trying to force Lavabit to put in malware that would give them access not just to Snowden's email, but to all email clients of Lavabit. We are used to hearing of "black hatted" hackers sticking malware on our computers, but here it is the government doing it.

"This morning, Silent Circle, a US-based secure online communication service, followed suit by shutting its own encrypted email service. Although it said it had not yet been served with any court order, the company, in a statement by its founder, internet security guru Phil Zimmerman, said: "We see the writing on the wall, and we have decided that it is best for us to shut down Silent Mail now."

And Glenn Greenwald comments (which I agree with):

What is particularly creepy about the Lavabit self-shutdown is that the company is gagged by law even from discussing the legal challenges it has mounted and the court proceeding it has engaged. In other words, the American owner of the company believes his Constitutional rights and those of his customers are being violated by the US Government, but he is not allowed to talk about it. Just as is true for people who receive National Security Letters under the Patriot Act, Lavabit has been told that they would face serious criminal sanctions if they publicly discuss what is being done to their company. Thus we get hostage-message-sounding missives like this:

He then shares this from Lavabit:

I wish that I could legally share with you the events that led to my decision. I cannot. I feel you deserve to know what's going on - the first amendment is supposed to guarantee me the freedom to speak out in situations like this. Unfortunately, Congress has passed laws that say otherwise. As things currently stand, I cannot share my experiences over the last six weeks, even though I have twice made the appropriate requests."

So between court gag orders and congress gagging those who they force to cooperate. Do we really have anything less than a police state? Forbes reports:

“As a Dallas company, we weren’t really equipped to respond to this inquiry. The government knew that,” said Levison, who drew parallels with the prosecutorial bullying of Aaron Swartz. “The same kinds of things have happened to me. The government tried to bully me, and [my lawyer] has been instrumental in protecting me, but it’s amazing the lengths they’ve gone to to accomplish their goals.”

Putting courts over spy programs actually just corrupts the courts, as long as secrecy is the rule. Separation of powers becomes a joke when Judges, prosecutors, and spies are all part of the same enterprise. Rule of law becomes less protective of privacy and rights than a string thong at at a mens club.

That is enough for this post. I drafted it yesterday. But the information is too depressing. Aaron Swartz was driven to suicide by a prosecution that was going to put him in jail for the rest of his life for challenging a private company's (JStore) usurpation of information that belongs in the public domain (and libraries). And "that's not all!". More to come.

Further Readings and links used in this post:

Sources and Further Readings:

http://www.whitehouse.gov/the-press- office/2013/08/09/press-briefing-press-secretary-jay-carney-882013

http://www.whitehouse.gov/blog/2013/08/09/protecting-our- security-and-preserving-our-freedoms

Bush's Loogie: http://holtesthoughts.blogspot.com/2013/08/bushs-loogie.html

Forbes Editorial:http://www.forbes.com/sites/kashmirhill/2013/08/09/lavabits-ladar-levison-if-you-knew-what-i-know-about-email-you-might-not-use-it/

Forbes Lavabit article: http://www.forbes.com/sites/kashmirhill/2013/08/08/email-company-reportedly-used-by-edward-snowden-shuts-down-rather-than-hand-data-over-to-feds/

Guardian Articlehttp://www.theguardian.com/commentisfree/2013/aug/09/lavabit-shutdown-snowden-silicon-valley

Why Summers and Wall Street should not run the Federal Reserve

Grifters and Swindlers

Wall Street was once a venerable institution, but is now little more than a den of thieves. Maybe there are decent people, but the culture itself is one of grifters and swindles, cons and it's been this way for a while with the help of corrupt lawyers like Eric Holder, and corrupt political-pundits like Rubin and Larry Summers. Okay, it always has had a sleazy side, ever since markets were places where animals were bought, sold, and slaughtered. There have always been hucksters, grifters, fraudsters, and thieves. But never so brazen and so many. And so transparently so! And they always manage to "dirty" their marks so that they think they are at fault.

I had other subjects in mind, but several news topics pushed them aside today. In the context of these news items I'm hearing that Larry Summers wants to be Federal Reserve Chairman and the logical and Obama wants to pass up the integral (person with integrity) choice for the job; Janet Yellen. This would be a disaster. Larry Summers should be in jail not the Fed. Janet Yellen is well qualified and what we need right now. But Summers is a corrupt insider and Obama likes him for some reason.

Champion putting hungry foxes in the hen houses

He's been involved in nearly every corrupt short sighted decision in this country since before he championed repeal of Glass Steagle in the waning days of the Clinton Administration. Wikipedia summarizes well [sorry this would take three blogs otherwise]:

1. "Summers hailed the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass–Steagall Act):

"Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," Summers said. "This historic legislation will better enable American companies to compete in the new economy."

2. As a member of President Clinton's Working Group on Financial Markets, Summers, along with U.S. Securities and Exchange Commission (SEC) Chairman Arthur Levitt, Fed Chairman Greenspan, and Secretary Rubin, torpedoed an effort to regulate the derivatives that many blame for bringing the financial market down in Fall 2008."
3. And there is his role in bringing down Gray Davis in California and enabling Enron to replace him with the Terminator (Arnold Schwarzenegger) Summers excused Enron's financial manipulation in that incident.

Indeed he still supports financial deregulation, is still blocking regulation of the derivatives market and enabling banks to acquire rent seeking opportunities. Heaven help us if he gets access to the Federal Reserves regulatory apparatus! In the Daily Beast Steven Senne quotes Kurt Eichenwald saying:

In his book about Enron, Conspiracy of Fools, Kurt Eichenwald describes Summers’ role in the early stages of the California energy crisis when the state was suddenly faced with power shortages and energy costs that were soaring up to 20 times normal levels. Then-Governor Gray Davis, convinced that Enron and others were manipulating the market, begged the federal government to intervene.

And of course it turned out that Enron really was engaging in swindles and frauds, and that the program of deregulation that the Summers/Rubin school was pursuing would eventually lead to other companies immitating and multiplying frauds -- which are still continuing to this day. And was there quid pro quo? You decide. Tony Wikrent posted this excerpt from emails from around that same time in "Real Economics":

"As you know, Ken has talked to Larry Summers about serving on Enron's Board of Directors. Larry told Ken that in light of his selection to head Harvard, he wants to hold off going on any corporate boards for now. My understanding is that Larry will most likely accept Ken's offer at the end of the year."

Looks like Quid Pro Quo to me. But that's not all. He's also been a champion of bankers and wealth over just about every other priority. During his stint at the World Bank he helped engineer our current trade imbalances by engineering a bailout of East Asian Countries based on letting them arbitrage the dollar. He:

"engineered a bailout that gave countries the money they needed to get through the crisis, but required that they would pay their debts in full. The flip side was that the United States would maintain an open door to exports from the region.

If he'd learned anything from these things it might be one thing but he still champions corporate power, is against regulation and is out to deregulate just about anything that wants to be deregulated. And Obama seems to feel the same way. The times Rana Foroohar quotes him in 2011:

“I’ve been more cautious than many about constraining financial innovation,” he said, adding that he didn’t believe the financial crisis had its roots in “new-fangled financial instruments” but rather in a simple real estate bubble.

If he can say that despite Enron and everything that has happened since, then he's also a prevaricator.

Read more: http://business.time.com/2011/04/12/larry-summers-no-regrets-on-deregulation/#ixzz2bJvLVbRa

No surprises

But that should be no surprise. Money leads people to moral blindness and eyes open recklessness, and the pursuit of money and power is what is behind most corruption. Wall Street is unrepentant. Goldman Sachs has been accused of manipulating aluminum prices, and other companies Copper and other metals. Without laws forbidding them using "other people's money" recklessly they'll continue using their corrupt control over congress, courts and executives to make more money and take over and loot one industry after another. With Summers at the Fed at least he won't be provoking stupid policy decisions such as getting rid of the mortgage option for ordinary people trying to buy a house:

Rules are meant to be Broken

Summers is an awful choice for a human being (could be worse of course), much less to be a trusted advisor or in any position of trust. Yet a lot of folks think Summers is a genius and continue to believe him despite his track record of being wrong and the corrupt results of his prescriptions. This is because he reflects the Wall Street mindset that Alexis Goldstein wrote about after he left it more than 2 years ago. Nothing has changed about it or the people who shill for it:

"But the key to truly understanding superiority on Wall Street is by looking at how it’s measured: with cold, hard numbers. Numbers can be amplified by honest work, but they can also be amplified by betrayal, manipulation, and cheating. And when everything is a cold cost-benefit analysis, why wouldn’t you break regulations—provided you knew the profits you stood to make would dwarf the fines you would pay should you get caught?"

Wall Street's modus operandi for nearly a century has been to "promise the moon" and then laugh at people when the promise turns out to be a lie. And folks like Larry Summers are there to make sure that they can ignore regulations, engage in "new-fangled" swindles and not even get fined in the first place -- to their hearts content. Deregulation and prosecutors who tell Congress that Wall Street firms are "too big to jail" have contributed to the current attitude that Goldstein refers to in this quote:

"This is why paying fines when you are caught breaking the rules is simply deemed “the cost of doing business” on Wall Street. "

Summers has already been handsomely rewarded, and once he leaves office he'll get more rewards still. I suspect his membership in boards and he'll draw good speech fees once he leaves office. And he's still at it. His current project is an attack on government supported mortgages for the remaining middle class: BINYAMIN APPELBAUM writes in the New York Times;

The president praised a bipartisan Senate effort to replace Fannie and Freddie with a system that would charge lenders for explicit government guarantees of some mortgage loans. And while there is a risk that the cost of borrowing would increase, Mr. Obama also said that he wanted to preserve the wide availability of the 30-year, fixed-rate loans that are preferred by most Americans.

A risk? No the word is certainty. And all of us know that their promises are worthless. The end of Fannie and Freddie means the end of the 30 year fixed rate mortgages and folks locked into Usurious interest rates. Wall Street has a massive power over both parties -- and this has to be fought. The first step is defeating Summers.

But of course the Grifters label these frauds and corrupting laws "reform" and act like it will benefit the people it assaults. The same article notes:

"“Washington has suddenly come alive on housing finance reform,” said David Stevens, president of the Mortgage Bankers Association"

Mike Papantonio notes that we should be deliberative as we fight, and neither get furious, nor let nasty people rattle our nerves. It is hard sometimes. But worth the effort. Because once you open your eyes and learn how to see and analyze you can tell the scoundrels from more integral people. I didn't mention that Yellen is more than qualified, a lot smarter, teaches economics, serves on the Federal Reserve Board now, and is honest. Nor did I mention that Larry Summers has a reputation as a macho misogynist. That is because the current in crowd thinks that being a woman or having integrity is a drawback for the job.

Sources for this post:

http//www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-easing-bank-laws.html

http//online.wsj.com/article/SB123665023774979341.htm

http//www.pbs.org/wgbh/pages/frontline/warning/view/#morelink"

http//www.huffingtonpost.com/2013/08/05/larry-summers-enron_n_3708137.html

http//www.thedailybeast.com/articles/2008/11/12/larry-summers-and-enron.html

http//real-economics.blogspot.com/2010/12/larry-summers-role-in-derivatives.html

http//www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/larry-summers-biggest-blunder

http//business.time.com/2011/04/12/larry-summers-no-regrets-on-deregulation/

Aluminum scam:

http//www.nakedcapitalism.com/2013/07/how-goldman-made-5-billion-by-manipulating-aluminum-inventories-and-copper-is-up-next.html

http//nplusonemag.com/leaving-wall-street

http//www.nytimes.com/2013/08/07/business/washington-edges-warily-into-housing.html?smid=fb-share&_r=0

Rolling Stone's narrative on the 2008 bailout includes details on Summer's swindling role in it:

http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104?page=2

Bush's Loogie

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