TBR News December 12, 2013

Dec 10 2013

The Voice of the White House


            Washington, D.C. December 10, 2013: “The balance of power is always in a state of flux. Since the end of the Roosevelt world war, the United States was in global control, forcing her will on any potential rival. Soviet Russia was our chief rival and with the ascent of the intellectual, decent but ineffective Gorbachev in Russia, our intelligence organs worked overtime to overthrow him and replace him with one of our own men, in this case Boris Yeltsin. When Boris developed a strong attachment to the bottle, we wanted someone else in power in Russia that we, and our business friends, could control. Yeltsin suggested Putin, a quiet hard-working but safe type. Putin is a firm believer in the old Italian proverb that he who goes softly, goes safely and he who goes safely goes far. When an outraged Obama demanded that Russia ship Snowden back to face a life sentence, Putin declined the demand. When Israel got together with their friends in the American government and threatened Syria with invasion over the fictional “nerve gas” attack, Putin stepped into the global political arena and suggested that Syria divest herself of all such weapons. When Syria agreed, the wind went out of Obama’s sails and he walked away from the issue, muttering to himself. And now the focus has shifted to the oil-rich Arctic. America was under the impression that it controlled the Arctic but now it appears that Russia does. Since this country has an immense appetite for oil and do not have it, we are constrained to pay court, and money, to those who do. Russia is the leading exporter of oil, now that the Saudi fields are drying up. It would serve this country well to begin the practice of diplomacy instead of military invasion.”



Putin Orders Strong Military Presence in Arctic


MOSCOW, December 10 (RIA Novosti) – Russian President Vladimir Putin ordered the Russian military on Tuesday to boost its presence in the Arctic and complete the development of military infrastructure in the region next year.


“I request that you pay special attention to the deployment of infrastructure and military units in the Arctic,” Putin said at an expanded meeting of the Defense Ministry Board.


Putin said Russia is actively developing this promising region and should have all means for protection of its security and national interests there.


Arctic territories, believed to hold vast untapped oil and gas reserves, have increasingly been at the center of disputes between the United States, Russia, Canada, Norway and Denmark as rising temperatures lead to a reduction in sea ice.


Russia has made claims on several Arctic shelf areas and is planning to defend its bid at the United Nations.


Russian Defense Minister Sergei Shoigu said Tuesday that a combined-arms force will be deployed in the Arctic in 2014 to protect the country’s interests in the region.


As part of the ambitious program, the Russian military is planning to reopen airfields and ports on the New Siberian Islands and the Franz Josef Land archipelago that were mothballed in 1993.


Shoigu said that at least seven mothballed military airfields on the continental part of the Arctic Circle will also be restored.



Arctic ownership claims

by Zachary Fillingham

Geoploitical Monitor


1. Executive Summary


Rising global temperatures and melting Arctic ice are changing the geopolitical reality in the far north. In the span of a decade, the Arctic has gone from being considered a ‘global common’ to a hotly contested economic goldmine.


2. Significance of the Arctic


The geopolitical relevance of the Arctic is overwhelmingly economic in nature. Under the melting ice lies an abundance of natural resources, mainly in the form of energy reserves. According to estimates, the region is home to around 22% of the earth’s remaining supplies of oil and gas [1]. While the current cost of tapping these reserves is high, their ownership is particularly appealing to Arctic-bordering states given the widely held assumption that energy prices will once again spike in the future. Arctic reserves can also be exploited without risking the political violence and instability that can arise in the Middle East and Africa. 


According to the U.S Geological Survey assessment of energy resources in the Arctic, the largest potential oil reserves in the region are: The Arctic Alaska Basin off the northern coast of Alaska, the Amerasia Basin north of Canada, and the East and West Greenland Rift Basins, off the coasts of Greenland. The estimated supplies in these fields are 29, 9.7, 8, and 7 billion barrels of oil respectively [2].


3. The Players


According to the UN Convention on the Law of the Sea, every maritime state’s continental shelf extends 200 nautical miles; within this area is a state’s Exclusive Economic Zone (EEZ). However, states can extend their jurisdiction up to a maximum of 350 nautical miles by submitting geological evidence to the UN Commission on the Limits of the Continental Shelf (CLCS) within 10 years of ratifying the Law of the Sea [3]. The primary players involved in this process are Russia, Canada, Denmark, and Norway, all of whom have Arctic coastline. America is also a stakeholder, but one that is acting outside the UN framework.




In 2001, Moscow submitted a claim to the 1240 mile underwater Lomonosov Ridge to the UN CLCS, arguing that the ridge is an extension of the Siberian landmass [5].  If the Commission were to recognize the ridge as Russian territory, Russia would extend its EEZ nearly all the way to the North Pole.  In an effort to symbolically bolster their claim, a Russian science expedition used a mini-sub to plant a flag in the Arctic seabed under the North Pole in 2007.


More recently, a report released by the Russian National Security Council reveals that Moscow expects the Arctic to become its’ primary resource base by 2020.  The report also goes on to outline plans for the formation of a specialized military force responsible for protecting Russian interests in the Arctic [4].


The United States


American interests in the region include: Limiting Russian economic and military expansion into the area, pressing for the Northwest Passage to be classified as international waters, and securing a favorable agreement with Canada on the Alaska-Yukon sea border, location of the lucrative Arctic Alaska basin. American efforts to legally extend claims to the Arctic continental shelf are complicated by the fact that America has yet to ratify the UN Convention on the Law of the Sea, and is thus excluded from the legal process that other Arctic states are engaged in. 




Canadian geography allows for a potentially large claim on the Arctic shelf, one that could even argue that the Lomonosov Ridge is an underwater extension of Ellesmere Island [3]. The Canadian claim to the UN CLCS is most likely to conflict with those of Russia and Denmark. 


Arctic sovereignty is an increasingly visible issue on the Canadian political radar.  As such, the Canadian government has announced several steps aimed at strengthening the Canadian claim. These steps include: Plans to purchase 8 new armed ice-breaking patrol ships, conducting high-profile military exercises and leadership visits to the Arctic, as well as announcing plans to build a military base on the northern tip of Ellesmere Island [6, 7, 8].  Canadian scientists are also working to strengthen the Canadian claim, accumulating geological data and mapping the Arctic floor for use in Canada’s eventual submission to the UN CLCS. Canada must submit all evidence to the UN CLCS by 2013.


Canadian interests in the Arctic are not restricted to resource rights. Melting ice in the Northwest Passage has the potential to open new international trade routes that shorten the shipping distance from Europe to Asia by about 2,150 nautical miles [12]. These routes would pass between the islands of Canada’s Arctic Archipelago.  The conflict arises from whether these waters should be classified as international waters, a stance adopted by the United States and Russia, or as internal Canadian waters [8]. 




Denmark, like Russia, is laying claim to the North Pole itself via the Lomonosov Ridge [9]. Copenhagen argues that the ridge is an extension of the Greenland landmass. Denmark is also advancing claims to certain islands in the Arctic Archipelago west of Greenland that are also claimed by Canada. In 2005, Denmark tried to strengthen their claim and test Canadian resolve by occupying Hans Island, a small patch of contested land that lies between Ellesmere Island and the Northwestern coast of Greenland [9].




The Norwegian claim is dominated by a dispute with Russia over how to demarcate their mutual border in the Barents Sea, home to an estimated 11 billion barrels of oil. Oslo is engaging in bi-lateral negotiations with Russia as well as submitting data to the UN CLCS to extend their continental shelf to about 600 kilometers south of the North Pole [10, 11]


The Arctic Council


The Arctic Council has emerged as the primary institution for handling disputes between Arctic countries while keeping out non-Arctic states that ‘don’t belong.’ Its members are Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States. Some agreements that have thus far been reached by the council include: international search and rescue cooperation procedures; the establishment of a permanent secretariat in Norway; and a streamlined process for granting non-Arctic states a permanent observer status in the council (an attempt to appease the EU and China without legitimizing their interests in the region). Interestingly, a primary criterion for becoming a permanent observer is to accept Arctic countries sovereignty over their corresponding part of the Arctic. Or in other words, for a seat at the negotiating table a non-Arctic country must give up all pretentions that the region is a ‘global common.’




Although the country shares no border with the Arctic, the Chinese government has actively sought to establish a place for itself at the Arctic ownership negotiating table. For the most part, it has accomplished this by extending a financial lifeline to Iceland; a country that has a very real stake in Arctic negotiations. While it goes without saying that Iceland is hesitant to cede its own strategic space in the Arctic to a distant government in East Asia, its negotiating position has been severely damaged in the fallout of the 2008 global financial crisis.


In 2011, Chinese billionaire Huang Nubo purchased 116 square miles of land in northern Iceland with the stated goal of developing the land for tourism. The deal was eventually axed by the government in Reykjavik over suspicions that the land would eventually be converted into an Arctic port to further Chinese shipping interests. The ruling has since been appealed and the deal is once more being considered by the Icelandic government, though it may be converted into a lease agreement.


China has extended its Arctic lobbying to include Canada, another Arctic state. Canadian Prime Minister Stephen Harper was reportedly urged to support China’s bid for observer status on the Arctic Council during a 2012 visit to China. Beijing has also made similar overtures towards Denmark, offering access to China’s booming economy in exchange for Danish support for China’s permanent observer bid.


 4. Cold War or Co-operation?


Russian plans to establish an Arctic military force have been met with consternation from the other Arctic states, all of whom are members of NATO. In January 2009, NATO held a conference in Iceland to discuss the security challenges that a thawed Arctic could bring.


NATO, still searching for a post-Cold War identity, may jump on the opportunity to stand up to Russia on a new Arctic frontier, as it offers a familiar resonance from the alliance’s Cold War past, one that could temporarily delay any true soul-searching over NATOs raison d’être in a post-Cold War world.


Of course, it is very likely that this will not be necessary. Most Arctic states have either yet to submit their claim to the UN CLCS, or are waiting on a definitive ruling. Given that the UN CLCS is generally regarded as legitimate and impartial by all parties involved in the process, it seems unlikely that an Arctic state would openly contradict the ruling of an international regime that they have voluntarily acquiesced to.


Military Exercises


The universal acceptance of arbitrating institutions such as the Arctic Council and the United Nations makes open conflict over Arctic ownership issues unlikely, but this hasn’t stopped the players from improving their military options.


Canada and Denmark recently held joint exercises in the Arctic called ‘Arctic Training 2012.’ The exercises, mainly restricted to special forces, were the direct result of an agreement signed in 2010 that pledged to deepen security links between the two countries on all Arctic issues. This agreement also allowed high-level Danish observers to witness Canada’s ‘Operation Nanook’ exercises at Resolute Bay in 2011.


In March 2012, Norway and its NATO allies completed one of the largest Arctic maneuvers ever, incorporating over 16,300 troops from 14 different counties. The goal was to improve operations in a wide range of fields, including high-intensity warfare and terrorism threats.


In an effort to maintain its own strategic balancing act, Norway is also planning to conduct Arctic exercises with the Russian Navy in May 2012. These exercises will simulate anti-submarine warfare, anti-piracy operations, and search and rescue missions.




5. Endnotes


[1] Borgerson, S & Antrim, C. ‘An Arctic Circle of Friends.’ The New York Times. March 28, 2009. http://www.nytimes.com/2009/03/28/opinion/28borgerson.html?_r=2&ref=opinion


[2] Bird, K & Charpentier, R. ‘Circum-Arctic resource appraisal: Estimates of undiscovered oil and gas north of the Arctic Circle.’ U.S Geological Survey.  http://pubs.usgs.gov/fs/2008/3049/fs2008-3049.pdf


[3] Singh, P. ‘Whos Arctic is it anyways?’ IDSA Strategic Comments. 01/01/08 http://www.idsa.in/publications/stratcomments/PriyadarshiniSingh010108.htm


[4] ‘Russia outlines Arctic force plan.’ BBC Worlds News Online. 03/27/2009. http://news.bbc.co.uk/2/hi/europe/7967973.stm


[5] Reynolds, P. ‘Russia ahead in Arctic gold rush.’ BBC World News Online. 08/01/2007. http://news.bbc.co.uk/2/hi/6925853.stm


[6] ‘Ottawa buying up eight Arctic patrol ships.’ CBC News Online. 07/09/2007.  http://www.cbc.ca/canada/story/2007/07/09/arctic-cda.html (arctic patrol ships)


[7]’Canadian forces carry out Arctic training exercises’. CTV News Online. 08/25/2008. http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080825/arctic_training_080825/20080825

[8] ‘Battle for Arctic heats up.’ CBC News Online. 02/27/2009. http://www.cbc.ca/canada/story/2009/02/27/f-arctic-sovereignty.html


[9] Demille, D. ‘Denmark goes Viking in Canada’s Arctic islands – strategic resources of the high Arctic entice the Danes.’ Canadian American Strategic Review.  March 2005. http://www.casr.ca/id-arcticviking1.htm


[10] ‘Maritime jurisdiction and boundaries in the Arctic region.’ Durham University International Boundaries Research Unit. August 2008. http://www.dur.ac.uk/resources/ibru/arctic.pdf


[11] Pritchard, L.W. ‘The Norwegian Barents Sea: Historical overview and future perspectives.’ IHS. December 2006.  http://energy.ihs.com/News/published-articles/articles/norwegian-barents-sea-historical-overview-future-perspectives.htm


[12] Pilkington, E. ‘Canada flexes its muscles in scramble for the Arctic.’ The Guardian. 07/11/2007. http://www.guardian.co.uk/environment/2007/jul/11/climatechange.climatechange


The Debt-collecting machine

Aeon Financial foreclosed on more than 400 properties in Ohio’s biggest county. It threatened more than 1,900 in D.C. and Maryland.

December 8, 2013

by Michael Sallah, Debbie Cenziper

Washington Post



The firm that threatened to foreclose on hundreds of struggling D.C. homeowners is a mystery: It lists no owners, no local office, no Web site.


Aeon Financial is incorporated in Delaware, operates from mail-drop boxes in Chicago and is represented by a law firm with an address at a 7,200-square-foot estate on a mountainside near Vail, Colo.


Yet no other tax lien purchaser in the District has been more aggressive in recent years, buying the liens placed on properties when owners fell behind on their taxes, then charging families thousands in fees to save their homes from foreclosure.


Aeon has been accused by the city’s attorney general of predatory and unlawful practices and has been harshly criticized by local judges for overbilling. All along, the firm has remained shrouded in corporate secrecy as it pushed to foreclose on more than 700 houses in every ward of the District.


“Who the heck is Aeon?” said David Chung, a local lawyer who said he wasn’t notified that he owed $575 in back taxes on his Northwest Washington condominium until he received a notice from Aeon. “They said, ‘We bought the right to take over your property. If you want it back — pay us.’ ”


Aeon’s story underscores how an obscure tax lien company — backed by large banks and savvy lawyers — can move from city to city with little government scrutiny, taking in millions from distressed homeowners.


The firm came into the District eight years ago with hardball tactics, sending families threatening letters and demanding $5,000 or more in legal fees and other costs, often more than three times the tax debt.


 At the same time, the company was moving across the country, buying up liens in Maryland, Ohio, Kentucky and Iowa.


In Maryland, Aeon filed more than 1,000 foreclosure cases mostly in Anne Arundel, Baltimore and Prince George’s counties, moving against the homes of a severely disabled woman and a grocery clerk who was hospitalized as the firm pressed to foreclose over a $2,100 tax debt.


In Cleveland, Aeon took the deeds to dozens of houses and then failed to care for them when they didn’t sell, leaving rotting porches, shattered windows and collapsed walls, prompting the city to levy more than 100 code violations.


Calls to two former Aeon executives and several attorneys who work on the company’s behalf were not returned.


“Somebody needs to do an investigation,” said Frank Ford, a senior policy adviser for a nonprofit housing agency in Cleveland. “You’re talking about an industry that comes to town and can impact hundreds of properties. If you don’t vet and screen these buyers, it’s going to cost you in the long run.”


In the District, city officials said they have never been able to determine who owns Aeon.


When city lawyers challenged the firm in court to divulge its owners three years ago, the company refused, even filing for a protective order to stop the city from digging deeper.


Aeon has long listed its headquarters in the famed Willis Tower in Chicago, but when The Post showed up at the 110-story building in October to track down company officials, a building representative said Aeon was not a tenant. A second address used by the company’s law firm turned out to be a United Parcel Service store in the heart of downtown — two other addresses were UPS stores in strip shopping centers outside the city.


The Post spent three months examining Aeon’s corporate history, traveling to Chicago, Cleveland and three counties in Maryland and reviewing hundreds of business and land records, to find out who is behind the company that has affected thousands of homeowners across the country.


The trail begins and ends with a 52-year-old Chicago lawyer named Mark Alan Schwartz.


Aeon jumped into the District’s tax lien market in 2005 as bank financing was transforming an industry once led by mom-and-pop investors.


With Schwartz as the firm’s attorney, Aeon started small, buying 89 tax liens worth $65,000 at the District’s public auction.


Four years later, the company was among the top purchasers in the city, buying liens worth more than $1 million and dominating the tax auctions with the financial support of two national banks.


For Aeon, the District was the perfect place. Investors could charge property owners 18 percent interest and had to wait only six months before filing for a foreclosure, compared with a year or longer in other jurisdictions.


Between 2005 and 2009, Aeon bought 1,300 tax liens from Columbia Heights to the city’s poorest neighborhoods near the Anacostia River. Then, the firm with the slogan “Supporting Local Communities” embarked on a series of lawsuits that would stun property owners.


Week after week, Aeon took families to court, where the firm demanded they pay thousands in legal fees or lose their homes. On a single day in 2009, the company filed nearly 270 cases.


“Aeon was like a machine,” said Amy Mix, an attorney with AARP’s Legal Counsel for the Elderly. “Other purchasers would have some sympathy for our clients . . . but we didn’t get that from them. They were unapologetic.”


A Washington Post investigation in September found that tax lien investors had foreclosed on hundreds of properties owned by the elderly, the disabled and the poor, taking the homes and all of the equity.


Aeon ended up with only a handful of properties, instead pressing for the fees from the property owners pulled into court.


One of the first to challenge Aeon’s bills was John Kazemi, a 71-year-old retired teacher who waged a two-year battle with the company.


In 2007, he discovered that Aeon had purchased a $500 lien on a condominium parking space he owned in Northeast Washington. The D.C. tax office had been mistakenly sending the annual bills to the former owner, and Kazemi said he had no idea that he owed the money.


As soon as he received a court summons from Aeon, he paid the $500 in back taxes.


But Schwartz, Aeon’s attorney, also demanded that Kazemi pay $4,200 for Aeon’s legal fees and costs — more than eight times the tax debt. Kazemi hired an attorney to fight the bill, but Schwartz refused to drop the case until the money was paid, writing in an e-mail, “We are fully prepared to litigate.”


Kazemi’s attorney pushed back: “You run a factory and we are not going to be victims to it.”


Schwartz, who has a medical degree from the University of Illinois and a law degree from John Marshall Law School in Chicago, wrote: “Let’s litigate it. My pleasure.”


When the case went to court, the judge slashed the fees to $952, saying they were “excessive” and “unnecessary.” In one instance, the law firm billed one hour for court hearings — the judge cut the time to 12 minutes. In another, the firm billed nearly five hours to review documents — the judge reduced the time to 30 minutes.


A second attorney on the case was Schwartz’s father, Spencer, who had been suspended from practice for a year in Illinois in 2001 for misconduct, including allowing his son to practice law before he was licensed, records show.


Mark Schwartz had been reprimanded, too, for sending out ads that exaggerated his professional experience and accomplishments.


In the end, Kazemi said the fight with Aeon was grueling, costing him time and money.


“They had lawyers from Chicago and they came really to destroy,” he said.


Neither Spencer nor Mark Schwartz returned calls or letters seeking comment. In a court document filed in the case, Mark Schwartz wrote, “No time or expenses are billed for unsuccessful or unnecessary motions.”


By 2009, hundreds of families were struggling to pay Aeon. One property owner faced $7,300 in fees for a $1,546 lien. Another faced $6,750 in fees for a $901 lien.


Homeowners complained that their calls to Aeon were not returned, and there was no office to visit in the District. A former attorney for Aeon, Malik Tuma, said the Chicago mail drops were used as a safety precaution.


Most homeowners paid the fees, but some stepped forward, asking local judges to weigh in. In a series of critical rulings, Superior Court Judge Alfred Irving called Aeon’s charges “extraordinarily high,” while Judge Joseph Beshouri referred to them as “unreasonable” and “excessive.”


Judges found that Aeon billed for legal work that was not done and repeatedly charged homeowners $450 an hour for one top attorney’s time.


That attorney was Tuma, who said the company did not overcharge homeowners.


“I purposely requested the courts to give people time to redeem their properties,” said Tuma, a Maryland and D.C. real estate attorney who represented Aeon for several years.


He also said his rate was justified: “The $450 hourly rate is the low-to-median rate charged by law firms with attorneys with equivalent levels of experience in the District of Columbia and the District’s suburbs.”


Working a regular 40-hour week for 50 weeks, that would amount to $900,000 a year.


In 2009, D.C. Attorney General Peter Nickles sued Aeon, arguing that the firm’s legal fees and practices were “abusive” and “unlawful” and asking the court to step in.


“There was significant evidence of padding of the bills, charging an excessive number of hours for literally doing nothing,” Nickles recently told The Post. “They gouged the hell out of poor people.”


The city is waiting on a ruling in the case.


By 2010, Aeon had stopped buying liens in the District. But the company still has more than 300 active foreclosure cases.


At the height of Aeon’s operations in the District, the company branched out, moving 370 miles northwest to the largest county in Ohio.


In 2008, Cuyahoga County was reeling from a sinking economy and plummeting housing prices. In two years, Aeon spent more than $25 million buying thousands of liens in the county’s largest city, Cleveland, as well as several nearby cities.


But unlike the District’s homeowners, who largely paid the fees to avoid foreclosure, hundreds in Ohio didn’t do so. Aeon went on to foreclose on more than 400 properties, from Cleveland’s historic Slavic Village to the badly blighted east side.


Aeon tried to sell the properties, but buyers were scarce. In neighborhoods across Cleveland, Aeon houses are rotting, prompting inspectors in the past two years to condemn 41 properties and file more than 100 code violations.


“The houses are stripped to the bone — no windows, no doors, no walls, no pipes. This is what I’m screaming about,” neighborhood activist Anita Gardner said.


One of Aeon’s major lenders was CapitalSource Bank, founded in 2000 by John Delaney, who was elected to the U.S. House last year. The Maryland Democrat was the bank’s chief executive officer when CapitalSource loaned $30 million to Aeon in 2009.


Delaney spokesman Will McDonald said the congressman didn’t know about the company’s problems in Ohio or the District’s lawsuit against Aeon, which was the subject of media reports, including a national story in the Huffington Post in 2010. The article also found that Aeon’s law firm was doing business out of a Chicago mail drop.


“During Congressman Delaney’s time as CEO, CapitalSource made over 5,000 business loans, loans probably totaling over $20 billion,” McDonald said. “The CEO of a bank does not track the ongoing business operations of all outstanding loans because doing so would be impossible.” Delaney took a leave of absence from his position at the bank last year and resigned after being elected to Congress.


A spokesman for CapitalSource said the bank doesn’t comment on its borrowers “as a matter of policy and pursuant to borrower confidentiality agreements.”


An attorney for Aeon in Cleveland declined to comment, but during a hearing last year over one of the troubled houses, attorney Kirk Liederbach argued that the firm had invested heavily in the city and “didn’t contemplate” taking title to so many rundown properties.


“We intend to be good citizens here,” said Liederbach, who works in the law firm’s Cleveland office.


Jay Westbrook, a 33-year member of the Cleveland City Council, said the company has repeatedly failed to step up. “Aeon has an extra-vicious business model — take no prisoners, take no responsibility,” he said.


As Aeon sparred with Cleveland officials, the company began getting rid of the houses. On a single day this summer, Aeon sold 83 to a newly formed limited liability company, records show.


One member of the city council, concerned that Aeon is trying to skirt the code violations, has requested that prosecutors investigate whether the sales were legitimate.


The lead agent for Aeon who signed the deeds was John A. Lord, a former Ohio attorney who was permanently disbarred in 2007 for deceiving and abandoning clients and then keeping their money. He was later convicted of aggravated theft and served one year’s probation, records show.


Lord did not return calls seeking comment.


Lord has also signed legal documents on Aeon’s behalf in Maryland, where the firm has filed hundreds of foreclosure cases since 2006, including one against Craig Brown’s family home in Baltimore. The 53-year-old grocery clerk who earns $16 an hour stocking milk had been hospitalized for three weeks with a chronic illness when Aeon moved to take the house.


“It was terrible,” said Brown, who said he tried to persuade Aeon to give him more time to pay the bill but ultimately lost his home. “They just didn’t care.”


D.C. officials say they still don’t know who actually owns Aeon.


In 2010, city lawyers tried to determine whether there was “cross-ownership” between Aeon and Schwartz’s law firm, demanding that Aeon produce financial records. Aeon refused, asking the court for a protective order.


The District agreed to stop pressing the issue if Aeon swore that Schwartz’s law firm had no ownership interest in the company. Again, Aeon refused. The judge ultimately focused only on Aeon’s legal bill, saying it was “rife with inaccuracies and vague descriptions.”


But clues to Aeon’s ownership appear in corporate and court records reviewed by The Post.


Records in Nevada in 2004 and Maryland the following year show that Aeon Properties — a predecessor to Aeon Financial — was managed by Schwartz’s younger sister, Stacey Lynn Schwartz, a clinical social worker.


In 2011, records filed in Kentucky for Aeon Financial list Schwartz as a director, along with his sister and a neighbor, Robert Mesch, who lives near Schwartz’s $1.7 million estate in Colorado.


Mesch, a businessman who founded a private investment group, did not return calls seeking comment. Stacey Schwartz declined to comment.


In addition, records show that one company, Axis Investment Holdings Trust — which lists the same office as Aeon in Chicago’s Willis Tower — has ownership interest in both Aeon Financial and another company, Axis Capital.


Schwartz is the chief executive officer of Axis Capital, which has a subsidiary, Records Direct, court records show. The office suite in the Willis Tower, where Aeon is supposed to do business, is registered to Records Direct.


Schwartz, who is divorcing his wife in Chicago, said in that case earlier this year that the faltering economy had hurt his businesses.


“I was caught right in the middle of it,” Schwartz said in a deposition. “We had liens on real property. The value of those assets suddenly plummeted.”


In court records, Schwartz said he was “living off borrowed funds.” His estranged wife described a high-end lifestyle that took him to Hong Kong, London, Aruba and Hawaii. His Colorado estate has five bedrooms, a chef’s kitchen, a game room and an artist’s study. The residence is listed as an address for Schwartz’s law firm.


Nickles, the former D.C. attorney general, said the District should continue to pursue its case against Aeon and determine the company’s ownership.


“This is debt collecting that leads to the destruction of the lower economic level of the community,” he said. “Anyone who would be behind that kind of scheme — and it was a well-thought-out scheme — I don’t think they would be very happy about their names being disclosed on the public record.”


Steven Rich, Jennifer Jenkins and Alexia Campbell contributed to this report.




CIA’s anti-terrorism effort called ‘colossal flop’

CIA officers given ‘non-official cover,’ often posing as business executives, tried to collect intelligence on terrorists. The NOC program reportedly has had few successes.

December 8, 2013

by Ken Dilanian



WASHINGTON — Several years ago, a senior officer in the CIA clandestine service attended a closed-door conference for overseas operatives. Speakers included case officers who were working in the manner Hollywood usually portrays spies — out on their own.


Most CIA officers abroad pose as U.S. diplomats. But those given what’s called non-official cover are known as NOCs, pronounced “knocks,” and they typically pose as business executives. At the forum, the NOCs spoke of their cover jobs, their false identities and measures taken to protect them. Few said much about gathering intelligence.


A colleague passed a caustic note to the senior officer. “Lots of business,” it read. “Little espionage.”


Twelve years after the CIA began a major push to get its operatives out of embassy cubicles and into foreign universities, businesses and other local perches to collect intelligence on terrorists and rogue nations, the effort has been a disappointment, current and former U.S. officials say. Along with other parts of the CIA, the budget of the so-called Global Deployment Initiative, which covers the NOC program, is now being cut.


“It was a colossal flop,” a former senior CIA official said in sentiments echoed by a dozen former colleagues, most of whom spoke on condition of anonymity to discuss a classified program.


Spurred by Congress after the attacks of Sept. 11, 2001, the CIA rushed to put its eyes and ears in gritty corners of the globe where Al Qaeda and other adversaries operate or recruit. The risk was considerable: Unlike CIA officers in embassies, NOCs have no diplomatic immunity if caught, and could face imprisonment or worse.


The CIA spent at least $3 billion on the program, and the number of specially trained spies grew from dozens to hundreds. The entire clandestine service is believed to total about 5,000 people.


But because of inexperience, bureaucratic hurdles, lack of language skills and other problems, only a few of the deep-cover officers recruited useful intelligence sources, several former officers said.


Some of the most ambitious efforts were aimed at Iran, former officers said. The CIA created front companies and elaborate fake identities for operatives trying to recruit sources inside Iran’s nuclear and missile procurement networks.


But Iranian authorities were able to expose American operatives, said two former senior CIA officials. They were transferred back to CIA headquarters in Virginia or other U.S. posts.


Sometimes the CIA didn’t send the right people with the right cover, said Joseph Wippl, former chief of the CIA’s Europe division. Others were posted “a zillion miles from where their targets were located,” he said.


CIA leaders also were reluctant to put the special spies in harm’s way.


“There was just a great unwillingness to put NOCs in really, really dangerous places,” said another former case officer. “If you’re a high-grade agency manager, are you going to sign off on a memo that puts Joe Schmuckatelli in Pyongyang? Whether you are a careerist or not, that is a hard decision for anybody to make.”


The program also was tainted by financial irregularities, according to a former senior CIA official. The CIA’s inspector general found that some NOCs billed the agency for unjustified time and expenses, three former officials said, and it forced a few to repay money.


A CIA spokesman, Todd Ebitz, declined to comment about the NOC program, its budget or its problems.


“The agency does not discuss publicly any cover techniques that it may employ,” he wrote in an email. “The CIA does keep the congressional intelligence oversight committees fully informed of its activities, which are constantly evolving to meet the threats to national security. And, while the details of the agency budget remain properly classified, sequestration and budget cutbacks have affected the entire federal government, including CIA.”


The best-known NOC was Valerie Plame. In the mid-1990s, while in Brussels, she posed as an energy analyst for a Boston-based firm, Brewster Jennings & Associates, which the CIA later acknowledged was a front company. Plame maintained her false identity after she moved back to CIA headquarters in 1997, traveling frequently to the Middle East and elsewhere to recruit agents who could spy in Iran and elsewhere.


Her CIA career ended in 2003 after Bush administration officials leaked her name to the press in an effort to discredit her husband, who had claimed the White House had manipulated intelligence on Iraq. A White House aide, I. Lewis “Scooter” Libby, was later convicted of perjury and obstruction of justice. Plame’s best-selling book on the case, “Fair Game,” was turned into a Hollywood film.


Masking spies as engineers, consultants or other professions has long been part of the CIA playbook. But the push took on new urgency after the 2001 terrorist attacks exposed the CIA’s lack of informants inside Al Qaeda and other terrorist networks.


It wasn’t that CIA officers were expected to personally infiltrate Al Qaeda. But working outside the embassy might make it easier to recruit local sources in Pakistan, Yemen and elsewhere who could collect intelligence on terrorist money, aims and intentions.


In 2004, then-CIA Director Porter J. Goss announced a new effort to put more officers under deep cover to gain what he called “close-in access to the plans and intentions” of America’s adversaries. Soon after, Congress passed legislation permitting undercover CIA officers serving overseas to keep salaries from their civilian cover jobs even if it exceeded their federal paychecks.


Members of the Senate Intelligence Committee pressed the CIA to go further. They attached a provision to their 2006 intelligence authorization measure questioning whether the spy service was “committed to doing what is needed to ensure that NOC operations are successful.”


The agency doubled down. A growing number of recruits at the CIA training facility at Camp Peary, Va., known as the Farm — including the class of 2008, the largest in CIA history — was made up of NOCs, former officials said.


Unlike their classmates, they were barred from making cellphone calls or using the Internet in order to hide any ties to the CIA. Later, many would operate in their own names, holding real jobs for multinational companies around the globe.


But when it came to penetrating terrorist networks, NOCs suffered the same shortcomings as other CIA officers — too few spoke Urdu, Pashto, Dari or other necessary languages, or could disappear in local cultures, former CIA officers say.


In 2008, a former CIA operative’s biting memoir, “The Human Factor,” was published, describing his 15 years overseas targeting nuclear networks and terrorist groups. He wrote that the CIA had spent at least $3 billion since 2001 to get deep-cover operatives overseas, but only a few had been successfully deployed.


“There were only a handful of effective NOCs overseas, and that never changed,” the author, who uses the pseudonym Ishmael Jones, said in a telephone interview.


In 2010, then-CIA Director Leon E. Panetta gave a speech promising “new approaches to cover.” But the vast majority of case officers continue to pose as diplomats, U.S. officials say.


John Maguire, who retired from the CIA in 2005, argues that the CIA could help the NOC program by doing more to establish legitimate commerce for the front companies. But that would cause headaches for CIA administrators, he acknowledged.


Maguire said he knew only three successful NOCs in his 23 years as a case officer. “They were absolute nightmares for the administrative bureaucracy of the agency,” he said.






FBI Able :For Several Years ” To Secretly Turn on Lap Top Cameras



December 7, 2013

by Madison Ruppert

Activist Post



In a recent report by The Washington Post, it was revealed that the FBI has been able to secretly activate a target’s laptop camera “without triggering the light that lets users know it is recording” for several years.


While this may be surprising to some, it really shouldn’t be. Previous reports revealed that the FBI employs hackers to create software to remotely activate the microphones on laptops and cell phones as well as cameras. The U.S. government has also become the world’s largest buyer of malware. The NSA also recommended physically removing the webcam from Apple laptops for security reasons.


In August, the Wall Street Journal reported that the FBI has developed hacking tools like this for over a decade, though they rarely are discussed publicly.


The Washington Post cites Marcus Thomas, former assistant director of the FBI’s Operational Technology Division in Quantico, who said that the remote activation of cameras is used mostly in serious cases.


Thomas, who now sits on the advisory board of Subsentio, a company that helps telecommunications firms comply with federal wiretap laws, told the Post that the bureau uses the technique “mainly in terrorism cases or the most serious criminal investigations


As technology advances, the FBI’s surveillance techniques do as well.


“Because of encryption and because targets are increasingly using mobile devices, law enforcement is realizing that more and more they’re going to have to be on the device — or in the cloud,” Thomas said.


Indeed, in January of this year a report indicated that all data stored on cloud services could be accessed by the U.S. government without a warrant



In the past, a federal magistrate rejected the FBI’s attempt to get authorization to activate the laptop camera of a suspect. The magistrate ruled that it was “extremely intrusive” and could be a violation of the Fourth Amendment.


Federal magistrate Judge Stephen W. Smith also said the Texas-based court did not have the jurisdiction to approve the search of a computer in an unknown location.


Yet, another federal magistrate approved sending surveillance software to a target, though it did not involve remotely activating a computer camera.


The surveillance software gave the FBI a detailed account of the computer of the target – a federal fugitive – including his hard drive space, the chips used on his computer and a list of installed programs.


In the case the Post was reporting on, an individual calling himself “Mo,” probably located in Tehran, made a series of bomb threats.


The FBI obtained a warrant to send surveillance software to Mo’s computer when he sign in to his Yahoo email account but the program “never actually executed as designed,” according to a handwritten note by a federal agent given to a court



The Over-Policing of America

Police Overkill Has Entered the DNA of Social Policy

by Chase Madar



If all you’ve got is a hammer, then everything starts to look like a nail. And if police and prosecutors are your only tool, sooner or later everything and everyone will be treated as criminal. This is increasingly the American way of life, a path that involves “solving” social problems (and even some non-problems) by throwing cops at them, with generally disastrous results. Wall-to-wall criminal law encroaches ever more on everyday life as police power is applied in ways that would have been unthinkable just a generation ago.

By now, the militarization of the police has advanced to the point where “the War on Crime” and “the War on Drugs” are no longer metaphors but bland understatements.  There is the proliferation of heavily armed SWAT teams, even in small towns; the use of shock-and-awe tactics to bust small-time bookies; the no-knock raids to recover trace amounts of drugs that often result in the killing of family dogs, if not family members; and in communities where drug treatment programs once were key, the waging of a drug version of counterinsurgency war.  (All of this is ably reported on journalist Radley Balko’s blog and in his book, The Rise of the Warrior Cop.) But American over-policing involves far more than the widely reported up-armoring of your local precinct.  It’s also the way police power has entered the DNA of social policy, turning just about every sphere of American life into a police matter.

The School-to-Prison Pipeline

It starts in our schools, where discipline is increasingly outsourced to police personnel. What not long ago would have been seen as normal childhood misbehavior — doodling on a desk, farting in class, a kindergartener’s tantrum — can leave a kid in handcuffs, removed from school, or even booked at the local precinct.  Such “criminals” can be as young as seven-year-old Wilson Reyes, a New Yorker who was handcuffed and interrogated under suspicion of stealing five dollars from a classmate. (Turned out he didn’t do it.)

Though it’s a national phenomenon, Mississippi currently leads the way in turning school behavior into a police issue.  The Hospitality State has imposed felony charges on schoolchildren for “crimes” like throwing peanuts on a bus.  Wearing the wrong color belt to school got one child handcuffed to a railing for several hours.  All of this goes under the rubric of “zero-tolerance” discipline, which turns out to be just another form of violence legally imported into schools.

Despite a long-term drop in youth crime, the carceral style of education remains in style.  Metal detectors — a horrible way for any child to start the day — are installed in ever more schools, even those with sterling disciplinary records, despite the demonstrable fact that such scanners provide no guarantee against shootings and stabbings.

Every school shooting, whether in Sandy Hook, Connecticut, or Littleton, Colorado, only leads to more police in schools and more arms as well.  It’s the one thing the National Rifle Association and Democratic senators can agree on. There are plenty of successful ways to run an orderly school without criminalizing the classroom, but politicians and much of the media don’t seem to want to know about them. The “school-to-prison pipeline,” a jargon term coined by activists, is entering the vernacular.

Go to Jail, Do Not Pass Go

Even as simple a matter as getting yourself from point A to point B can quickly become a law enforcement matter as travel and public space are ever more aggressively policed.  Waiting for a bus?  Such loitering just got three Rochester youths arrested.  Driving without a seat belt can easily escalate into an arrest, even if the driver is a state judge.  (Notably, all four of these men were black.) If the police think you might be carrying drugs, warrantless body cavity searches at the nearest hospital may be in the offing — you will be sent the bill later.

Air travel entails increasingly intimate pat-downs and arbitrary rules that many experts see as nothing more than “security theater.” As for staying at home, it carries its own risks as Harvard professor Henry Louis Gates found out when a Cambridge police officer mistook him for a burglar and hauled him away — a case that is hardly unique.

Overcriminalization at Work

Office and retail work might seem like an unpromising growth area for police and prosecutors, but criminal law has found its way into the white-collar workplace, too.  Just ask Georgia Thompson, a Wisconsin state employee targeted by a federal prosecutor for the “crime” of incorrectly processing a travel agency’s bid for state business.  She spent four months in a federal prison before being sprung by a federal court.  Or Judy Wilkinson, hauled away in handcuffs by an undercover cop for serving mimosas without a license to the customers in her bridal shop.  Or George Norris, sentenced to 17 months in prison for selling orchids without the proper paperwork to an undercover federal agent.

Increasingly, basic economic transactions are being policed under the purview of criminal law.  In Arkansas, for instance, Human Rights Watch reports that a new law funnels delinquent (or allegedly delinquent) rental tenants directly to the criminal courts, where failure to pay up can result in quick arrest and incarceration, even though debtor’s prison as an institution was supposed to have ended in the nineteenth century.

            And the mood is spreading.  Take the asset bubble collapse of 2008 and the rising cries of progressives for the criminal prosecution of Wall Street perpetrators, as if a fundamentally sound financial system had been abused by a small number of criminals who were running free after the debacle.  Instead of pushing a debate about how to restructure our predatory financial system, liberals in their focus on individual prosecution are aping the punitive zeal of the authoritarians.  A few high-profile prosecutions for insider trading (which had nothing to do with the last crash) have, of course, not changed Wall Street one bit.

            Criminalizing Immigration

            The past decade has also seen immigration policy ingested by criminal law. According to another Human Rights Watch report — their U.S. division is increasingly busy — federal criminal prosecutions of immigrants for illegal entry have surged from 3,000 in 2002 to 48,000 last year.  This novel application of police and prosecutors has broken up families and fueled the expansion of for-profit detention centers, even as it has failed to show any stronger deterrent effect on immigration than the civil law system that preceded it.  Thanks to Arizona’s SB 1070 bill, police in that state are now licensed to stop and check the papers of anyone suspected of being undocumented — that is, who looks Latino.

            Meanwhile, significant parts of the US-Mexico border are now militarized (as increasingly is the Canadian border), including what seem to resemble free-fire zones.  And if anyone were to leave bottled water for migrants illegally crossing the desert and in danger of death from dehydration, that good Samaritan should expect to face criminal charges, too. Intensified policing with aggressive targets for arrests and deportations are guaranteed to be a part of any future bipartisan deal on immigration reform.

            Digital Over-Policing

            As for the Internet, for a time it was terra nova and so relatively free of a steroidal law enforcement presence.  Not anymore.  The late Aaron Swartz, a young Internet genius and activist affiliated with Harvard University, was caught downloading masses of scholarly articles (all publicly subsidized) from an open network on the MIT campus.  Swartz was federally prosecuted under the capacious Computer Fraud and Abuse Act for violating a “terms and services agreement” — a transgression that anyone who has ever disabled a cookie on his or her laptop has also, technically, committed.  Swartz committed suicide earlier this year while facing a possible 50-year sentence and up to a million dollars in fines.

            Since the summer, thanks to whistleblowing contractor Edward Snowden, we have learned a great deal about the way the NSA stops and frisks our (and apparently everyone else’s) digital communications, both email and telephonic. The security benefits of such indiscriminate policing are far from clear, despite the government’s emphatic but inconsistent assurances otherwise. What comes into sharper focus with every volley of new revelations is the emerging digital infrastructure of what can only be called a police state.

            Sex Police

            Sex is another zone of police overkill in our post-Puritan land. Getting put on a sex offender registry is alarmingly easy — as has been done to children as young as 11 for “playing doctor” with a relative, again according to Human Rights Watch.  But getting taken off the registry later is extraordinarily difficult.  Across the nation, sex offender registries have expanded massively, especially in California, where one in every 380 adults is now a registered sex offender, creating a new pariah class with severe obstacles to employment, housing, or any kind of community life.  The proper penalty for, say, an 18-year-old who has sex with a 14-year-old can be debated, but should that 18-year-old’s life really be ruined forever?

Equality Before the Cops?

It will surprise no one that Americans are not all treated equally by the police.  Law enforcement picks on kids more than adults, the queer more than straight, Muslims more than Methodists — Muslims a lot more than Methodists — antiwar activists more than the apolitical. Above all, our punitive state targets the poor more than the wealthy and Blacks and Latinos more than white people.

            A case in point: after the 1999 massacre at Columbine High School, a police presence, including surveillance cameras and metal detectors, was ratcheted up at schools around the country, particularly in urban areas with largely working-class black and Latino student bodies.  It was all to “protect” the kids, of course.  At Columbine itself, however, no metal detector was installed and no heavy police presence intruded.  The reason was simple.  At that school in the Colorado suburb of Littleton, the mostly well-heeled white families did not want their kids treated like potential felons, and they had the status and political power to get their way. But communities without such clout are less able to push back against the encroachments of police power.

            Even Our Prisons Are Over-Policed

            The over-criminalization of American life empties out into our vast, overcrowded prison system, which is itself over-policed.  The ultimate form of punitive control (and torture) is long-term solitary confinement, in which 80,000 to 100,000 prisoners are encased at any given moment.  Is this really necessary?  Solitary is no longer reserved for the worst or the worst or most dangerous prisoners but can be inflicted on ones who wear Rastafari dreadlocks, have a copy of Sun Tzu’s Art of War in their cell, or are in any way suspected, no matter how tenuous the grounds, of gang affiliations.

            Not every developed nation does things this way. Some 30 years ago, Great Britain shifted from isolating prisoners to, whenever possible, giving them greater responsibility and autonomy — with less violent results.  But don’t even bring the subject up here.  It will fall on deaf ears.

            Extreme policing is exacerbated by extreme sentencing.  For instance, more than 3,000 Americans have been sentenced to life terms without chance of parole for nonviolent offenses.  These are mostly but not exclusively drug offenses, including life for a pound of cocaine that a boyfriend stashed in the attic; selling LSD at a Grateful Dead concert; and shoplifting three belts from a department store.

            Our incarceration rate is the highest in the world, triple that of the now-defunct East Germany. The incarceration rate for African American men is about five times higher than that of the Soviet Union at the peak of the gulag.

            The Destruction of Families

            Prison may seem the logical finale for this litany of over-criminalization, but the story doesn’t actually end with those inmates.  As prisons warehouse ever more Americans, often hundreds of miles from their local communities, family bonds weaken and disintegrate. In addition, once a parent goes into the criminal justice system, his or her family tends to end up on the radar screens of state agencies.  “Being under surveillance by law enforcement makes a family much more vulnerable to Child Protective Services,” says Professor Dorothy Roberts of the University of Pennsylvania Law school.  An incarcerated parent, especially an incarcerated mother, means a much stronger likelihood that children will be sent into foster care, where, according to one recent study, they will be twice as likely as war veterans to suffer from PTSD.

            In New York State, the Administration for Child Services and the juvenile justice system recently merged, effectively putting thousands of children in a heavily policed, penalty-based environment until they age out. “Being in foster care makes you much more vulnerable to being picked up by the juvenile justice system,” says Roberts.  “If you’re in a group home and you get in a fight, that could easily become a police matter.” In every respect, the creeping over-criminalization of everyday life exerts a corrosive effect on American families.

            Do We Live in a Police State?

            The term “police state” was once brushed off by mainstream intellectuals as the hyperbole of paranoids.  Not so much anymore.  Even in the tweediest precincts of the legal system, the over-criminalization of American life is remarked upon with greater frequency and intensity. “You’re probably a (federal) criminal” is the accusatory title of a widely read essay co-authored by Judge Alex Kozinski of the 9th Circuit of the U.S. Court of Appeals.  A Republican appointee, Kozinski surveys the morass of criminal laws that make virtually every American an easy target for law enforcement.  Veteran defense lawyer Harvey Silverglate has written an entire book about how an average American professional could easily commit three felonies in a single day without knowing it.

The daily overkill of police power in the U.S. goes a long way toward explaining why more Americans aren’t outraged by the “excesses” of the war on terror, which, as one law professor has argued, are just our everyday domestic penal habits exported to more exotic venues.  It is no less true that the growth of domestic police power is, in this positive feedback loop, the partial result of our distant foreign wars seeping back into the homeland (the “imperial boomerang” that Hannah Arendt warned against).

Many who have long railed against our country’s everyday police overkill have reacted to the revelations of NSA surveillance with detectable exasperation: of course we are over-policed!  Some have even responded with peevish resentment: Why so much sympathy for this Snowden kid when the daily grind of our justice system destroys so many lives without comment or scandal?  After all, in New York, the police department’s “stop and frisk” tactic, which targets African American and Latino working-class youth for routinized street searches, was until recently uncontroversial among the political and opinion-making class. If “the gloves came off” after September 11, 2001, many Americans were surprised to learn they had ever been on to begin with.

            A hammer is necessary to any toolkit.  But you don’t use a hammer to turn a screw, chop a tomato, or brush your teeth. And yet the hammer remains our instrument of choice, both in the conduct of our foreign policy and in our domestic order.  The result is not peace, justice, or prosperity but rather a state that harasses and imprisons its own people while shouting ever less intelligibly about freedom.   

            Chase Madar is an attorney, a TomDispatch regular, and the author of The Passion of [Chelsea] Manning: The Story behind the Wikileaks Whistleblower. Chase tweets @ChMadar.



NYT reporters sue Homeland Security in FOIA fight


December 9, 2013



NEW YORK (AP) – Two reporters for The New York Times have sued the Department of Homeland Security after they were questioned at an airport as they headed to overseas assignments.


The Freedom of Information Act lawsuit was filed Wednesday in U.S. District Court in Manhattan. Writers Mac William Bishop and Christopher Chivers said in the lawsuit that employees of the department responsible for securing U.S. borders subjected them to questioning last May as they prepared to board an international flight.


David McCraw, vice president and assistant general counsel for the newspaper, said in a statement that the reporters were preparing to leave New York for Turkey to report on the war in Syria at the time.


“We want to be sure that our journalists are not being targeted by DHS for special scrutiny or having their activities monitored by the government when they are engaged in reporting,” he said. “DHS has failed to provide adequate responses to our FOIA requests seeking whatever information DHS employees were working from in initiating the questioning and whatever information they gathered in the questioning.”


According to the lawsuit, Bishop was again questioned as he returned two weeks later.


Homeland Security spokesman Michael J. Friel said the department’s Customs and Border Protection unit had no comment.


According to the lawsuit, Bishop was told by the government that Homeland Security had no records pertaining to him, a frequent international traveler who answered questions in a private room at the airport as government employees recorded the answers on a computer. The lawsuit said a similar request for documents by Chivers failed to get results, although the government last month said it was expediting the processing of his request.


According to his website, Chivers, an infantry officer in the U.S. Marine Corps from 1988 to 1994, served in the Persian Gulf war and performed peacekeeping duties as a company commander during the Los Angeles riots in 1992. Honorably discharged as a captain in 1994, he turned to journalism. He joined the Times in 1999, accumulating numerous awards while covering world conflicts, including in Afghanistan and Pakistan, where he and a team from the Times in 2009 were awarded the Pulitzer Prize for International Reporting for a series of stories.


Bishop served in the U.S. Marine Corps as an infantryman before working as a correspondent, producer, digital journalist and cameraman at several news outlets. He joined the Times as a video producer in 2010.


In November, The Washington Times filed papers in federal court in Maryland seeking to force the Coast Guard to return any documents and copies of records it seized from a reporter while searching her home last summer as part of a gun investigation involving her husband.



Data-sharing among US law agencies amounts to ‘organised chaos’ – report•

• Report describes lack of oversight and civil liberties violations

Agencies ‘risk masking reliable counter-terrorism intelligence’

December 10, 2013

by Spencer Ackerman in New York



The sharing of crucial intelligence about counter-terrorism between the FBI, the Department of Homeland Security and local police departments takes place through a patchwork process that amounts to “organized chaos”, according to a new report.


The report, released Tuesday by the Brennan Center for Justice, a public-policy institute at New York University law school that has a track record of being skeptical of government surveillance, found inconsistent rules, inadequate oversight, apparent wastefulness and insufficient regard for civil liberties nationwide.


“This poorly organized system not only wastes time and resources; it also risks masking reliable intelligence that could be crucial to an investigation,” the report says, warning that a “din of data” is overwhelming law enforcement.


“There’s a lot of irrelevant information being collected,” said Michael Price, a counsel with the Brennan Center and the author of the report.


“As a result of that, it seems pretty easy for information to slip through the cracks.”


Scrutiny of the wide-reaching intelligence apparatus in federal, state and local law enforcement since 9/11 has largely taken a backseat during the past six months’ worth of revelations from whistleblower Edward Snowden about the National Security Agency’s surveillance activities. But this week, several reports pointed to an enormous amount of data collected by police departments – particularly from cellular towers.


The Brennan Center report examined 16 major police departments across the US, along with 19 affiliated “fusion centers” – controversial data-sharing pools between federal, state and local agencies – and 14 of the FBI’s joint terrorism task force partnerships with police.


It found, among other problems, inconsistent quality control, which permitted a flood of local tips – some as innocuous as “ordering food at a restaurant and leav[ing] before the food arrives” (an example from California, according to a Fusion Center training document obtained by the report’s authors) – into fusion centers.


Data like that does not meet the legal standard for “reasonable suspicion” normally required to pursue surveillance, let alone the requirements of probable cause. Yet it can be stored within fusion centers and accessed by a variety of law enforcement and homeland security agencies for up to a year, the report said.


Despite efforts by the Department of Homeland Security, most of the fusion centers operate with “minimal oversight, or no oversight whatsoever”, the report found. Out of 19 centers reviewed, only five require independent audits of retained data.


“We’re calling for clear, consistent processes and stronger standards for collecting and sharing information to reduce some of the noise coming from this din of data,” Price said.


Fusion centers have been the subject of criticism from both civil libertarians and powerful elected officials. A 2012 investigation by the bipartisan Senate permanent subcommittee on investigations of more than 80,000 fusion center documents could not find any contribution the centers had made to “disrupt[ing] an active terrorist plot”.


Senator Tom Coburn, an Oklahoman who serves as the top Republican on the Senate government reform and homeland security committee, has emerged as a leading legislative critic of fusion centers and joint terrorism task forces, for many of the same reasons detailed in the Brennan Center report. After a government inquiry indicated many federal data-sharing efforts were duplicative, Coburn issued a statement in April calling them “a vital component of national security”, but adding, “that is not an excuse to waste taxpayer funds”.


The Brennan Center’s report comes as police departments’ widespread use of cellphone data is attracting new scrutiny.


On Monday, the Washington Post revealed that police departments around the country relied 9,000 times last year on so-called “tower dumps”, or data collected from cellphone signals that went to a given cellphone tower during a certain period of time. That data necessarily includes call information from cellphone subscribers who are never suspected of any crime.


“There are serious questions about how law enforcement handles the information of innocent people swept up in these digital dragnets,” congressman Ed Markey, a Massachusetts Democrat who plans to introduce legislation limiting tower dumps, told the Post.


Also on Monday, USA Today reported that approximately a quarter of police departments in the US have employed tower dumps, and at least 25 departments around the country employ a portable piece of spoofing hardware, called a Stingray, that tricks cellphones into thinking it is a cell tower, allowing it siphon data and send it directly to police.


And all that information is on top of the fruits of the NSA’s vast data collection efforts, which are not entirely off limits to federal law enforcement. The controversial bulk collection of Americans’ phone data has been repeatedly described by the NSA as a tool to aid the FBI in detecting domestic terrorism activity.


NSA deputy director John C Inglis recently stated that the FBI cannot search directly through the NSA’s data troves, but the agency shares telephone metadata with the bureau following searches through its databases based on “reasonable articulable suspicion” of connections to specific terrorist organizations.


The Brennan Center report did not specifically analyze law enforcement tower dumps, but Price called the reports of them alarming.


“This is another indication of the vast trove of information that state and local police are collecting about law abiding Americans,” Price said. “To date, that information does not appear to be particularly useful in preventing terror attacks.”


Xbox Live among game services targeted by US and UK spy agencies

NSA and GCHQ collect gamers’ chats and deploy real-life agents into World of Warcraft and Second Life

December 9. 2013

by James Ball

The Guardian  


Read the NSA document: Exploiting Terrorist Use of Games & Virtual Environments

To the National Security Agency analyst writing a briefing to his superiors, the situation was clear: their current surveillance efforts were lacking something. The agency’s impressive arsenal of cable taps and sophisticated hacking attacks was not enough. What it really needed was a horde of undercover Orcs.

That vision of spycraft sparked a concerted drive by the NSA and its UK sister agency GCHQ to infiltrate the massive communities playing online games, according to secret documents disclosed by whistleblower Edward Snowden.

The files were obtained by the Guardian and are being published on Monday in partnership with the New York Times and ProPublica.

The agencies, the documents show, have built mass-collection capabilities against the Xbox Live console network, which has more than 48 million players. Real-life agents have been deployed into virtual realms, from those Orc hordes in World of Warcraft to the human avatars of Second Life. There were attempts, too, to recruit potential informants from the games’ tech-friendly users.

Online gaming is big business, attracting tens of millions of users worldwide who inhabit their digital worlds as make-believe characters, living and competing with the avatars of other players. What the intelligence agencies feared, however, was that among these clans of elves and goblins, terrorists were lurking.

The NSA document, written in 2008 and titled Exploiting Terrorist Use of Games & Virtual Environments, stressed the risk of leaving games communities under-monitored, describing them as a “target-rich communications network” where intelligence targets could “hide in plain sight”.

Games, the analyst wrote, “are an opportunity!”. According to the briefing notes, so many different US intelligence agents were conducting operations inside games that a “deconfliction” group was required to ensure they weren’t spying on, or interfering with, each other.

If properly exploited, games could produce vast amounts of intelligence, according to the NSA document. They could be used as a window for hacking attacks, to build pictures of people’s social networks through “buddylists and interaction”, to make approaches by undercover agents, and to obtain target identifiers (such as profile photos), geolocation, and collection of communications.

The ability to extract communications from talk channels in games would be necessary, the NSA paper argued, because of the potential for them to be used to communicate anonymously: Second Life was enabling anonymous texts and planning to introduce voice calls, while game noticeboards could, it states, be used to share information on the web addresses of terrorism forums.

Given that gaming consoles often include voice headsets, video cameras, and other identifiers, the potential for joining together biometric information with activities was also an exciting one.

But the documents contain no indication that the surveillance ever foiled any terrorist plots, nor is there any clear evidence that terror groups were using the virtual communities to communicate as the intelligence agencies predicted.

The operations raise concerns about the privacy of gamers. It is unclear how the agencies accessed their data, or how many communications were collected. Nor is it clear how the NSA ensured that it was not monitoring innocent Americans whose identity and nationality may have been concealed behind their virtual avatar.

The California-based producer of World of Warcraft said neither the NSA nor GCHQ had sought its permission to gather intelligence inside the game. “We are unaware of any surveillance taking place,” said a spokesman for Blizzard Entertainment. “If it was, it would have been done without our knowledge or permission.”

Microsoft declined to comment on the latest revelations, as did Philip Rosedale, the founder of Second Life and former CEO of Linden Lab, the game’s operator. The company’s executives did not respond to requests for comment.

The NSA declined to comment on the surveillance of games. A spokesman for GCHQ said the agency did not “confirm or deny” the revelations but added: “All GCHQ’s work is carried out in accordance with a strict legal and policy framework which ensures that its activities are authorised, necessary and proportionate, and there is rigorous oversight, including from the secretary of state, the interception and intelligence services commissioners and the intelligence and security committee.”

Though the spy agencies might have been relatively late to virtual worlds and the communities forming there, once the idea had been mooted, they joined in enthusiastically.

In May 2007, the then-chief operating officer of Second Life gave a “brown-bag lunch” address at the NSA explaining how his game gave the government “the opportunity to understand the motivation, context and consequent behaviours of non-Americans through observation, without leaving US soil”.

One problem the paper’s unnamed author and others in the agency faced in making their case – and avoiding suspicion that their goal was merely to play computer games at work without getting fired – was the difficulty of proving terrorists were even thinking about using games to communicate.

            A 2007 invitation to a secret internal briefing noted “terrorists use online games – but perhaps not for their amusement. They are suspected of using them to communicate secretly and to transfer funds.” But the agencies had no evidence to support their suspicions.

            The same still seemed to hold true a year later, albeit with a measure of progress: games data that had been found in connection with internet protocol addresses, email addresses and similar information linked to terrorist groups.

            “Al-Qaida terrorist target selectors and … have been found associated with Xbox Live, Second Life, World of Warcraft, and other GVEs [games and virtual environments],” the document notes. “Other targets include Chinese hackers, an Iranian nuclear scientist, Hizballah, and Hamas members.”

            However, that information wasn not enough to show terrorists are hiding out as pixels to discuss their next plot. Such data could merely mean someone else in an internet cafe was gaming, or a shared computer had previously been used to play games.

            That lack of knowledge of whether terrorists were actually plotting online emerges in the document’s recommendations: “The amount of GVEs in the world is growing but the specific ones that CT [counter-terrorism] needs to be methodically discovered and validated,” it stated. “Only then can we find evidence that GVEs are being used for operational uses.”

            Not actually knowing whether terrorists were playing games was not enough to keep the intelligence agencies out of them, however. According to the document, GCHQ had already made a “vigorous effort” to exploit games, including “exploitation modules” against Xbox Live and World of Warcraft.

            That effort, based in the agency’s New Mission Development Centre in the Menwith Hill air force base in North Yorkshire, was already paying dividends by May 2008.

            At the request of GCHQ, the NSA had begun a deliberate effort to extract World of Warcraft metadata from their troves of intelligence, and trying to link “accounts, characters and guilds” to Islamic extremism and arms dealing efforts. A later memo noted that among the game’s active subscribers were “telecom engineers, embassy drivers, scientists, the military and other intelligence agencies”.

            The UK agency did not stop at World of Warcraft: by September a memo noted GCHQ had “successfully been able to get the discussions between different game players on Xbox Live”.

            Meanwhile, the FBI, CIA, and the Defense Humint Service were all running human intelligence operations – undercover agents – within Second Life. In fact, so crowded were the virtual worlds with staff from the different agencies, that there was a need to try to “deconflict” their efforts – or, in other words, to make sure each agency wasn’t just duplicating what the others were doing.

            By the end of 2008, such efforts had produced at least one usable piece of intelligence, according to the documents: following the successful takedown of a website used to trade stolen credit card details, the fraudsters moved to Second Life – and GCHQ followed, having gained their first “operational deployment” into the virtual world. This, they noted, put them in touch with an “avatar [game character] who helpfully volunteered information on the target group’s latest activities”.

            Second Life continued to occupy the intelligence agencies’ thoughts throughout 2009. One memo noted the game’s economy was “essentially unregulated” and so “will almost certainly be used as a venue for terrorist laundering and will, with certainty, be used for terrorist propaganda and recruitment”.

            In reality, Second Life’s surreal and uneven virtual world failed to attract or maintain the promised mass-audience, and attention (and its user base) waned, though the game lives on.

            The agencies had other concerns about games, beyond their potential use by terrorists to communicate. Much like the pressure groups that worry about the effect of computer games on the minds of children, the NSA expressed concerns that games could be used to “reinforce prejudices and cultural stereotypes”, noting that Hezbollah had produced a game called Special Forces 2.

            According to the document, Hezbollah’s “press section acknowledges [the game] is used for recruitment and training”, serving as a “radicalising medium” with the ultimate goal of becoming a “suicide martyr”. Despite the game’s disturbing connotations, the “fun factor” of the game cannot be discounted, it states. As Special Forces 2 retails for $10, it concludes, the game also serves to “fund terrorist operations”.

            Hezbollah is not, however, the only organisation to have considered using games for recruiting. As the NSA document acknowledges: they got the idea from the US army.

            “America’s Army is a US army-produced game that is free [to] download from its recruitment page,” says the NSA, noting the game is “acknowledged to be so good at this the army no longer needs to use it for recruitment, they use it for training”.

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