TBR News April 5, 2016

Apr 05 2016

The Voice of the White House

Washington, D.C., April 4, 2016: “The so-called ‘Panama Papers’ have been released to a large number of international newspapers and have to potential to cause incredible social, political and economic damage. The question arises, however, as to the timing of the releases. It is known that a significant number of American legislators and high-level officials are deeply involved in hiding bribe money and the emergence of these release just before a major election in the US is interesting. Of course the US-backed media sources attempted to point to Putin but the only connection with Obama’s rival is that a Russian cellist, who knew Putin socially, had an offshore account. But Russian cellists are not the important issues. Massive thievery and pervasive corruption in domestic politicians and national leaders is the issue. Again, while the authenticity of the material is not in question, the timing is. That the Turkish president is corrupt is not important. The US has already decided to move away from his bombastic dictatorship and the Russians, as well, are now his enemies. There is now an interesting game on the international chess board.”

 

Conversations with the Crow

On October 8th, 2000, Robert Trumbull Crowley, once a leader of the CIA’s Clandestine Operations Division, died in a Washington hospital of heart failure and the end effects of Alzheimer’s Disease. Before the late Assistant Director Crowley was cold, Joseph Trento, a writer of light-weight books on the CIA, descended on Crowley’s widow at her town house on Cathedral Hill Drive in Washington and hauled away over fifty boxes of Crowley’s CIA files.

Once Trento had his new find secure in his house in Front Royal , Virginia, he called a well-known Washington fix lawyer with the news of his success in securing what the CIA had always considered to be a potential major embarrassment. Three months before, July 20th of that year, retired Marine Corps colonel William R. Corson, and an associate of Crowley, died of emphysema and lung cancer at a hospital in Bethesda, Md.           After Corson’s death, Trento and his Washington lawyer went to Corson’s bank, got into his safe deposit box and removed a manuscript entitled ‘Zipper.’ This manuscript, which dealt with Crowley’s involvement in the assassination of President John F. Kennedy, vanished into a CIA burn-bag and the matter was considered to be closed forever

After Crowley’s death and Trento’s raid on the Crowley files, huge gaps were subsequently discovered by horrified CIA officials and when Crowley’s friends mentioned Gregory Douglas, it was discovered that Crowley’s son had shipped two large boxes to Douglas. No one knew their contents but because Douglas was viewed as an uncontrollable loose cannon who had done considerable damage to the CIA’s reputation by his on-going publication of the history of Gestapo-Mueller, they bent every effort both to identify the missing files and make some effort to retrieve them before Douglas made any use of them.

Douglas had been in close contact with Crowley and had long phone conversations with him. He found this so interesting and informative that he taped and later transcribed them.

These conversations have been published in a book: ‘Conversations with the Crow” and this is an excerpt.

 

Conversation No. 17

Date: Monday, June 24, 1996

Commenced: 11:24 AM CST

Concluded: 12: 05 PM CST

GD: Good morning, Robert. I just got back from a business trip. What’s new inside the Beltway?

RTC: I missed your daily chats, Gregory. How was your trip?

GD: St. Petersburg was great. Moscow is improving from the old days but expensive as Hell and getting to be a Western-style mess. Still, I got to tour the older parts of the Kremlin and look at some of the stock in the military museum there. Money is necessary to live but collectables are far more interesting. Great art collections in St. Petersburg. Our St. Petersburg is full of ancient retired Jews, hoping the hot sun will extend their petty lives instead of giving them skin cancer.

RTC: Back to your cheerful self, I see. Did you have any trouble going through Immigration? You are on the watch list, you know.

GD: I know. No, I flew with a friend who has a private plane. I never go through the lines getting back. I sent Tom Kimmel a nice postcard from Moscow and put my prints all over the thing. I hope it distracts him.

RTC: What a terrible thing to do, Gregory. They will spend a week testing the card and once they decide it was authentic, they will get our Moscow…I assume you sent it from Moscow…people to check hotel rosters. If they find you, then they’ll check the Immigration records to see when you arrived back here. If they don’t find you and they know you’re back…

GD: Oh, I called Kimmel to cinch this up. He hadn’t gotten my card yet so I told him all about the joys of Moscow. Of course, he probably didn’t believe me but when he gets that card, my I will have so much fun.

RTC: And expect a smarmy call from him asking you about your plane trip. Oh, and what airline did you take? Oh, and where did you land, coming back? My, they have so little imagination, don’t they?

GD: No brains, either. That’s what comes from marrying your sister.

RTC: Gregory, how rude. Can’t you show some class? You know they’re trying to quit all that.

GD: (Laughter) Yes.

RTC: Did you know old Hoover was part black?

GD: Besides being queer?

RTC: In addition to that. But I think Hoover was more asexual that homosexual. A really vicious old man. Do you know how he kept from being kicked out by succeeding Presidents? He kept files on everyone of consequence, both in business, the media and, especially, government. The real dirt as it were. And no one, not the President, the Attorney General or Congress to whom he had to go every year to get the yearly appropriations would every dare to cross J. Edgar. Bobby Kennedy crossed him and Bobby was killed for his trouble. No, Hoover was a vicious man. We, on the other hand, use the same methodology but we are far smoother in applying it. We have a strong influence, for want of a better term, with the banking industry. We have the strongest and most effective influence with the print and television media. We have a much stronger hold on the Hill than Hoover ever had. At times, we’ve had iron control over the Oval Office. Hell, the NSA snoops domestically and we get it all. We have a strong in with the telephone people and we don’t need warrants to listen to anybody, domestically, we want, when we want. Now that the internet is in full bloom, trust it, Gregory, that we will establish our own form of control over that. It’s an invisible control and we never, ever talk about it and anyone who gets really close to the truth gets one in the back of the head from a doped-up burglar. And if something gets loose, who will publish it? Surely not our boys in the media. A book publisher? A joke, Gregory. Never. Rather than off some snoop, it’s much more subtle to marginalize them in print, imply they are either liars or nuts and make fun of them. Discredit them so no one will listen to them and then later, the car runs over them in the crosswalk. Oh, sorry about that, officer, but my foot slipped off the brake. I am desolated by that. And we pay for fixing the front end of his car.

GD: Such an insight. Too much coffee, today, Robert?

RTC: No, just an old man and his memories.

GD: How come you never nailed Hoover about the homosexual business?

RTC: We had a working relationship with him, observed, I might add, in the breach more than not. The old faggot put his men in foreign embassies as legates while our men were the USIA. We tried to take them over but it never worked out. We just made their lives miserable instead..

GD: Question here. Now that Communism is effectively dead in Russia and they are imploding, why go after them? Once the Second World War was over, we made friends with the evil Germans and Japanese and built them up again. Why not work with the non-Communist Russians?

RTC: Oh, that drunk Yeltsin was in our pocket but in the case of the former, we did build up their industries but we also owned them, lock, stock and barrel. Germany and Japan were our puppets but the Russians could never be brought to heel because they were too large and too diverse. Also, take into account that our main thesis at the Company was that the evil Russian Communists had to be stopped lest they take over Nova Scotia and bombard New York. With a decades-long mindset like that, you can’t expect our people to change overnight into actually accepting the Russians. Not likely. And besides, we tried to nail down all their oil and gas but we lost hundreds of millions in the process when they got wise and stopped it. We have to find a new international enemy to scare the shit out of American with; an enemy that only the CIA can save us from. The Jews are screaming about the Arabs, who are natural enemies of the Christians. We could dig up historians who will write about the Crusades and Hollywood people who will make movies about the triumph of Christianity over the Crescent. The Jews are getting too much power these days but remember that the Arabs have all the big oil and we need it. Yes, no doubt a resurrection of the Crusades will be next. Without enemies to protect from, we are of no use. Besides, Arabs are highly emotional and we can easily push them into attacking us, hopefully outside the country. Then, the well-oiled machinery that we have perfected over the years can start up and off we go on another adventure.

GD: My, how Heini Müller would have loved to listen in on this conversation. A thoroughgoing pragmatist and you two would have a wonderful time.

RTC: Remember that he and I had occasion to talk while he was here in Washington. I liked him as a matter of fact.

GD: In spite of the propaganda about the Gestapo in overcoats with dogs dragging screaming Jews into the streets, beating them with whips and driving them, in long parades, into the gas chambers? Of course that was wartime fiction but it got the Jews sympathy.

RTC”:And don’t forget, Gregory, it also got them political power and money. And they love both. I worked with them on a number of occasions and while they are all smart people, I wouldn’t trust one of them to the corner for a pound of soft soap. During the Stalin era, they spied on us for Josef by the carload, stealing everything, worming their way into Roosevelt’s New Deal and high government office and everything they could lay their hands on, went straight to Moscow. Now, it’s the identical situation but the information goes to Tel Aviv.

GD: Stalin hated them. He didn’t trust them.

RTC: Ah, but he did use them to kill people off, didn’t he?

GD: Yes, but when he was done with them, he planned to make the fictive Hitler’s death programs look like a fairy tale. Going to round up all the Jews and dump them into the wilds of a Siberian winter and let God freeze them all.

RTC: Oh, they won’t ever face up to that one, Gregory. No, Communism was wonderful because they used it as a ladder to climb up to where the white man held sway. Truman initially supported their cause until he found out how they were murdering Palestinians to steal their farms so he stopped US support of Israel. And then Israel tried to kill him.

GD: Müller mentioned that.

RTC: But Harry got cold feet after that.

GD: And now they have a place at the white man’s table, don’t they?

RTC: Hell, now they own the table and the restaurant and ten blocks around it. Roosevelt hated them, you know and he and Long kept them out of the country. Roosevelt said they were a pest and we did not want them here. Funny, because long ago, the Roosevelt family was Jewish.

GD: I know. German Jews from the Rhineland. Name was Rosenfeld. Went to Holland after they were run out of Germany and changed the name to a Dutch spelling.

RTC: Yes. I know that. Old Franklin’s second cousin was an Orthodox rabbi as late as 1938. Of course no one ever mentions that just like no one ever talks about Eleanor’s rampant lesbianism. God, what s sewer the White House was then. A veritable racial and ethical trash bin.

GD: Now they’re all dead.

RTC: There should be a way to prevent that sort of thing but of course we were not in existence when Franklin was king. Wouldn’t happen now. I’m afraid that the Jews will dig into the Company the same way they dug into Roosevelt’s bureaucracy and the second time around, we will have a terrible time rooting them all out.

GD: I can see pogroms in Skokie and Miami even as we speak.

RTC: Dream on, my boy, dream on. At any rate, I shall await the demonization of the Arab world. We can send the military into Saudi Arabia on some flimsy pretest, like the demolition of some US Embassy in a very minor state, like Portugal, by positively identified Saudi Arabs and then a new Crusade! Oh, and the precious oil!

GD: And the oil. Remember the Maine, Robert.

RTC: Yes and remember what old Hearst said? ‘ You supply the pictures and I’ll supply the war?” Oh yes and we got Cuba and the Philippines, although why we wanted the latter escapes me. The problem with that country is that it’s full of Filipinos and monkeys. Of course it’s often hard to differentiate between them but life is never easy. The Navy calls them the niggers of the Orient. I was at Pubic Bay once…

GD: (Laughter) what? You mean Subic Bay, don’t you?

RTC: A service joke. My God, Gregory, every square foot of land for miles around that base was filled with bars and tens of thousands of local prostitutes. ‘Oh you nice American! I love to fuck you! Take me back to America!’ And many of our corn-fed sailors went for the okeydoke and found out what Hell was like once they got Esmiralda back to Iowa. Ah well, thank God I never listened to their whining siren songs.

GD: I would imagine they had more claps than a football crowd….

RTC: (Laughter) My, isn’t it fun being bigots?

GD: I would prefer ‘realistic observers.’ Robert.

RTC: Call it what you will, Gregory, underneath the nice, polished veneer, we are all really cheap plywood.

GD: Hypocrisy is, after all, the tribute that vice pays to virtue.

RTC: Did you go to Harvard, Gregory? Such polished wit.

GD: I know. No, Not Harvard. The University of Unfortunate Experiences. I read a good deal, Robert, and I have moved in elegant circles and know just what to say and do at the appropriate time. Good manners are just the polish on the knife blade.

RTC: The University has embittered you, hasn’t it?

GD: Of course. Remember the Canadian counterfeit caper? A good case of embitterment. They stole from me so I returned the favor…in spades if you’ll pardon a rampant, bigoted remark. They stole four dollars and ten cents from me and I responded by stealing over two million dollars from them. In cash and their expenses. Loved every minute of it, too. I don’t think the Canadians expected me to come back and certainly not the way I did.

RTC: I read all about it. You made the press and we took note.

GD: I’m sure you did. Always strike at the weakest spot, unexpectedly and with force. Take them by surprise and then withdraw. They will rush their troops to the point of attack and then you circle around and hit them somewhere else.

RTC: How much did you get away with?

GD: Oh, Robert, such a pointed question. I got my four dollars and ten cents back and it cost them millions in a frantic attempt to stop what they called the efforts of the largest ring in their history. And if I made a profit out of it, why consider Delilah. Didn’t she make a prophet?

RTC: Oh, Gregory, a pun is the lowest form of humor. I should expect better from you.

GD: It would not be a good idea for me to go back to Canada, Robert. They will still be waiting for me. After all, I never used a lubricant. Sometimes, rarely but sometimes, I can sit back and enjoy a good laugh. I have two Canadian two dollar bills and a dime in a nice shadow box along with a newspaper clipping from the Vancouver Sun, next to my desk, It warms me on a cold night.

 

(Concluded at 12:02 PM CST)

 

http://www.amazon.com/Conversations-Crow-Gregory-Douglas-ebook/dp/B00GHMAQ5E/ref=sr_1_1?ie=UTF8&qid=1450147193&sr=8-1&keywords=conversations+with+the+crow#sthash.jWpLL7Wr.dpuf

 

SECRECY NEWS

From the FAS Project on Government Secrecy

Volume 2016, Issue No. 30

April 4, 2016

U.S. DECLASSIFIES HIGHLY ENRICHED URANIUM INVENTORY

The White House announced last week that the U.S. inventory of highly enriched uranium (HEU) as of September 2013 has been declassified.

“The newly declassified information shows that, from 1996 to 2013, U.S. HEU inventories decreased from 740.7 metric tons to 585.6 metric tons. This reflects a reduction of over 20 percent,” according to a March 31 White House fact sheet.

The White House added that “This announcement marks the first time in fifteen years that the United States has declassified and released information of this kind.”

But that assertion is in error.

In 2006, the Department of Energy declassified and released data on US HEU inventories dating from 2004. See Highly Enriched Uranium Inventory: Amounts of Highly Enriched Uranium in the United States, Department of Energy, January 2006.

Moreover, the DOE report from a decade ago shows that almost all of the 20% reduction in HEU inventories cited by the White House last week had already been accomplished by 2004, when the HEU total was 590.5 metric tons. Thereafter, in the period between 2004 and 2013, the total HEU inventory evidently declined by only about 5 additional metric tons (less than 1%) to 585.6 metric tons.

But the White House added that “further reductions in the inventory are ongoing; the U.S. Department of Energy’s material disposition program has down-blended 7.1 metric tons of HEU since September 30, 2013, and continues to make progress in this area.”

The latest disclosure was made to enhance nuclear transparency so as to encourage reciprocal disclosures by other nuclear weapons states.

“The U.S. commitment to sharing appropriate nuclear security-related information has also been demonstrated by recent actions such as the declassification of information on the U.S. nuclear weapons stockpile and transparency visits by officials from non-nuclear weapons states to Los Alamos and Sandia National Laboratories,” the White House said. “These actions show that countries can increase transparency without revealing sensitive information.”

DOE REQUESTS INCREASE IN NUCLEAR WEAPONS BUDGET

The Department of Energy budget request for the National Nuclear Security Administration (NNSA) would again increase spending on nuclear weapons in Fiscal Year 2017.

“The budget request for FY2017 seeks $9,243.1 million for Weapons Activities within a total budget of $12,884 million for NNSA,” according to a new report from the Congressional Research Service. “This represents an increase of approximately 4.4% in the Weapons Activities Account over FY2016.”

“The Obama Administration has requested increased funding for the nuclear weapons complex in each of its annual budgets,” CRS noted. But the latest request still exceeds expectations.

In particular, “the FY2017 budget request and projections for subsequent years now exceed the amount predicted in [a] 2010 report [to Congress],” CRS said.

The details are presented in Energy and Water Development: FY2017 Appropriations for Nuclear Weapons Activities, April 1, 2016.

Other new and updated reports from the Congressional Research Service include the following.

Supreme Court Vacancies: Frequently Asked Questions, March 31, 2016

Supreme Court Appointment Process: President’s Selection of a Nominee, updated April 1, 2016

Medicare Primer, updated March 31, 2016

Iran, Gulf Security, and U.S. Policy, updated March 30, 2016

Mexico: Background and U.S. Relations, updated March 30, 2016

China Naval Modernization: Implications for U.S. Navy Capabilities — Background and Issues for Congress, updated March 31, 2016

Cybersecurity: Legislation, Hearings, and Executive Branch Documents, updated March 30, 2016

CIA WITHDRAWS EMAIL DESTRUCTION PROPOSAL

The Central Intelligence Agency has formally rescinded its widely-criticized plan to destroy the email records of all but 22 senior agency officials, the National Archives said last week.

The CIA proposal generated controversy when it became public in 2014 because of its surprisingly narrow scope, which would have precluded preservation of vast swaths of CIA email records. Such records have proved invaluable not only for historical purposes, but also for contemporary accountability and congressional oversight.

“The agency has withdrawn this schedule effective March 21, 2016, due to the agency’s reorganization,” wrote Margaret Hawkins, director of records appraisal and agency assistance at the National Archives and Records Administration, in an email message to the Federation of American Scientists.

“In our last communication on this schedule, it was conveyed that a public meeting would be held to address all comments received. With the schedule’s withdrawal, this meeting will not be held.”In any case, CIA is still obliged to present a plan to the National Archives to explain how it will preserve or dispose of its email records. CIA can either adopt the standard template known as the Capstone General Records Schedule, or it can devise a specific plan of its own for approval by the National Archives.

“If the agency chooses to submit a new agency-specific records schedule, it will be available for request and comment to the public through the Federal Register process,” Ms. Hawkins wrote.

INTELLIGENCE FOR AIR AND MISSILE DEFENSE

A new U.S. Army manual addresses the challenges of intelligence support for air and missile defense programs.

“A large number of adversary countries possess or are trying to acquire TBMs [tactical ballistic missiles] and Advanced Air Breathing Threats (ABTs) (i.e. Fixed-Wing (FW) aircraft, Rotary-Wing (RW) aircraft, Unmanned aircraft systems (UAS), Anti-Radiation Missiles (ARMs), and Cruise Missiles (CMs)), for prestige and/or military purposes,” the Army manual stated.

“These aerial and TBM threats have the potential to give the adversary a military advantage against the United States (US) and multinational forces. The threat the adversary presents is a complex, multi-dimensional, intelligence problem.”

To meet this emerging threat, the Army prescribes an Air and Missile Defense (AMD) Intelligence Preparation of the Battlefield (IPB) process, as outlined in the manual. See Air and Missile Defense Intelligence Preparation of the Battlefield, ATP 3-01.16, March 31, 2016.

“AMD IPB identifies facts and assumptions about the battlefield environment and the air and missile defense threat. AMD IPB determines enemy air and missile defense courses of action (COAs), their associated branches and sequels, and describes the operating environment for air and missile defense operations. This supports commander and staff planning and the development of friendly COAs.”

“Applied properly, AMD IPB provides for the timely and effective neutralization and/or destruction of the aerial and TBM threat, while minimizing the requirement for friendly AMD assets. ”

Air and missile defense systems may be vulnerable to attack through cyberspace, the Army manual noted, so consideration should be given to “what mitigations can be put into effect to limit or negate the effects of an attempted cyber-attack on the AMD system.”

 

Panama Papers probes opened, China limits access to news on leaks

April 5, 2016

by Ben Blanchard and Lisa Jucca

Reuters

BEIJING/HONG KONG Authorities across the globe have opened investigations into the activities of the world’s rich and powerful after a cache of leaked documents from a Panamanian law firm showed possible wrongdoing using offshore company structures.

The “Panama Papers” have cast light on the financial arrangements of high profile politicians and public figures and the companies and financial institutions they use for such activities. Among those named in the documents are friends of Russian President Vladimir Putin and relatives of the leaders of China, Britain, Iceland and Pakistan, and the president of Ukraine.

Leading figures and financial institutions responded to the massive leak of more than 11.5 million documents with denials of any wrongdoing as prosecutors and regulators began a review of the reports from the investigation by the U.S.-based International Consortium of Investigative Journalists (ICIJ) and other media organizations.

Following the reports, China has moved to limit local access to coverage of the matter with state media denouncing Western reporting on the leak as biased against non-Western leaders.

France, Australia, New Zealand, Austria, Sweden and the Netherlands are among nations that have commenced investigations, and some other countries, including the United States, said they were looking into the matter.

Mossack Fonseca, the Panamanian law firm at the center of the leaks, has set up more than 240,000 offshore companies for clients around the globe and denies any wrongdoing. It calls itself the victim of a campaign against privacy and claims media reports misrepresent the nature of its business.

In a printed statement given to Reuters by a staff member at Mossack Fonseca’s Hong Kong office on Tuesday, the firm said it has never been charged with or formally investigated for criminal wrongdoing in its nearly 40 years of operation.

“We do not advise clients on how to operate their businesses. We don’t link ourselves in any way to companies we help incorporate,” the firm said in the statement.

“Excluding the professional fees we earn, we don’t take possession of clients’ money, or otherwise have anything to do with any of the direct financial aspects related to operating these businesses.”

Mossack Fonseca also said it supports international initiatives requiring greater transparency of newly incorporated companies and trusts and has implemented such measures as part of its own due diligence.

The staff at the office declined to answer questions.

The Hong Kong government said in a statement that its Inland Revenue Department has taken note of the recent release of the documents and will take “necessary actions” based on any information it gets. It will not comment on individual cases or disclose the course of action because of secrecy provisions in Hong Kong tax law, the government said.

DENIALS AND BACKLASH

Credit Suisse and HSBC, two of the world’s largest wealth managers, on Tuesday dismissed suggestions they were actively using offshore structures to help clients cheat on their taxes.

Both were named among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money from one place to another, according to ICIJ.

Credit Suisse CEO Tidjane Thiam, who is aggressively targeting Asia’s wealthiest for growth, said his bank was only after lawful assets.

Speaking at a media briefing in Hong Kong, he acknowledged the bank uses offshore financial structures, but only for very wealthy customers with assets in multiple jurisdictions and did not support their use for tax avoidance or allow them without knowing the identities of all those concerned.

“We do not condone structures for tax avoidance,” he said. “Whenever there is a structure with a third party beneficiary we insist to know the identity of that beneficiary.”

Separately, HSBC said the documents pre-dated a thorough reform of its business model

Both banks have in recent years paid large fines to U.S. authorities over their wealth management or banking operations.

Credit Suisse agreed in 2014 to pay a $2.5 billion fine for helping rich Americans evade taxes. HSBC agreed in 2012 to pay $1.92 billion in fines, mainly for allowing itself to be used to launder Mexican drug money.

The reports on leaks also pointed to the offshore companies linked to the families of Chinese President Xi Jinping and other powerful current and former Chinese leaders.

Chinese Foreign Ministry spokesman Hong Lei, when asked if the government would investigate tax affairs of those mentioned in the Panama Papers, told reporters at a daily news briefing the ministry would not comment on “these groundless accusations”.

Searches for the word “Panama” on Chinese search engines bring up stories in Chinese media on the topic, but many of the links have been disabled or only open onto stories about allegations directed at sports stars.

China’s Internet regulator did not immediately respond to a request for comment.

The Global Times, an influential tabloid published by the ruling Communist Party’s official People’s Daily, suggested in an editorial on Tuesday that Western media backed by Washington used such leaks to attack political targets in non-Western countries while minimizing coverage of Western leaders.

(Additional reporting by Denny Thomas, Saeed Azhar and Clare Baldwin; Writing by Sam Holmes; Editing by Martin Howell)

 

HSBC, Coutts & Rothschild: British banks help the 1% evade tax, #PanamaPapers suggest

April 5, 2016

RT

Big British banks have allegedly been helping the rich and powerful ferret away their wealth beyond the taxman’s reach for decades, according to explosive revelations in the Panama Papers.

Some of the world’s biggest banks were implicated in the largest data leak in history on Monday, including Britain’s HSBC, Coutts, and Rothschild, and Swiss banks UBS and Credit Suisse.

MPs and activists have attacked bankers for facilitating the use of near-invisible offshore firms used by criminals, terrorists, celebrities and politicians to hide their money.

Tax experts have called for new legislation to crack down on tax evasion in light of the revelations.

According to the leak, HSBC and affiliate companies have asked the Panama-based Mossack Fonseca law firm to create more than 2,300 shell companies since the 1970s.

London-based private bank Coutts – which counts Queen Elizabeth II among its clientele – requested the law firm to set up nearly 500 shell companies through its Jersey branch, while Rothschild requested 378 through its Guernsey arm.The shell companies were set up in Panama, the British Virgin Islands and other tax havens.

The leaked files allegedly show how banks and law firms failed in many cases to follow legal requirements to check their customers are not tax dodging, or involved in corruption or criminal enterprises.

“People are naturally very worried that there are individuals and organizations not paying tax when they should be. If this type of thing facilitates tax evasion then this is something we absolutely must clamp down on,” Tory MP Mark Garnier told the Financial Times.

Labour MP John Mann, a member of the Treasury committee, called for evidence to be handed to the Serious Fraud Office (SFO).

“There should be transparency, it is vital after the financial crisis. There needs to be some responsibility taken by senior bankmanagers — the top executives — if criminality is proven to have happened and they’ve turned a blind eye to it.”

Public outrage at the revelations is building momentum as social media users took to Twitter to condemn the banks for their role in alleged tax evasion.

Tax expert Richard Murphy called for new legislation to crack down on British Overseas Territories used as tax havens.

Murphy, who has advised Labour Leader Jeremy Corbyn’s taxation policy, said the government is not telling the truth when it says it cannot change the law in UK Crown Dependencies and Overseas Territories.

He proposes instigating four simple reforms:

  • All accounts of all companies on public record
  • All beneficial ownership on public record, proven by a requirement that banks confirm the beneficial ownership of companies they provide services to
  • Directorships on public record
  • Forcing trusts to be on public record.

If the territories refuse to cooperate with Westminster, Murphy says the government should implement direct rule.

He cites a 2009 example when the British parliament discovered corruption in the Turks and Caicos Islands and suspended its government for two years, with power transferred to a Westminster-appointed governor.

 

Trump would push Mexico to fund wall by blocking money transfers: report

April 5, 2016

by Susan Heavey

Reuters

WASHINGTON – Republican presidential candidate Donald Trump would try to force Mexico to pay for his proposed wall along the U.S. border by blocking remittances from immigrants in the United States in a move that could cripple the Mexican economy, The Washington Post reported on Tuesday.

Citing a two-page memo from Trump’s campaign, the Post said Trump vowed to change a rule under a U.S. anti-terrorism law that would cut off money transfers to Mexico unless it made a one-time payment of $5 billion to $10 billion for the wall, if he is elected in the November U.S. presidential election.

Trump’s pledge to build the wall along the southern U.S. border has been a cornerstone of his campaign as part of his larger platform targeting illegal immigration in the United States. While his plan has drawn cheers from his supporters, his harsh rhetoric on the issue, including calling some Mexican immigrants criminals, has drawn fierce criticism.

Mexico has flatly rejected paying for the wall.

In the memo to the Post, Trump’s campaign said it could also target visas, either by cancelling them or charging higher fees for Mexicans to visit the United States.

“It’s an easy decision for Mexico,” the memo, dated March 31, said.

(Reporting by Susan Heavey; Editing by Doina Chiacu)

 

Conservative challenge to voting rights unanimously rejected by supreme court

Case was brought before the court after conservative activists challenged legal principle that election districts should be drawn to be equal in population

April 4, 2016

by Sabrina Siddiqui

Reuters

Chicago-The US Supreme Court on Monday unanimously rejected a conservative challenge to voting rights – ruling that states could count the total population, not just eligible voters, in drawing legislative districts.

The case was brought before the court after conservative activists challenged the legal principle of “one person, one vote”, which has long established that election districts should be drawn to be equal in population. The two plaintiffs, both residents of Texas, argued the principle diluted the influence of those living in districts where a larger number of individuals were ineligible to vote.

But shifting the method would most certainly lend greater power to states with wealthier populations with mostly white voters, and away from urban and more racially diverse areas. The lawsuit was opposed by the Obama administration, the state of Texas and civil rights groups across America.

Not a single member of the court, down to eight members since the death of conservative justice Antonin Scalia, sided with the challengers. Ruth Bader Ginsburg authored the opinion for the court, in which the liberal justice wrote that the plaintiffs had failed to demonstrate a rationale upon which the court should overturn the longstanding use of total population in drawing districts.

The nation’s founders, she added, intended that “representatives serve all residents, not just those eligible or registered to vote”.

“Adopting voter-eligible apportionment as constitutional command would upset a well-functioning approach to districting that all 50 states and countless local jurisdictions have followed for decades, even centuries,” Ginsburg wrote.

The supreme court endorsed the current method of drawing districts during the civil rights movement in the 1960s.

Ginsburg cited “constitutional history, the court’s decisions and longstanding practice” in her opinion, in which she was joined by justices John Roberts, Stephen Breyer, Elena Kagan, Anthony Kennedy and Sonia Sotomayor. Justices Samuel Alito and Clarence Thomas, among the court’s conservative members, each wrote their own concurring opinions.

While the ruling was not entirely unexpected, some civil rights activists were nonetheless fearful of another potential blow to their cause after the supreme court gutted the Voting Rights Act three years ago. The “one person, one vote” challenge was backed by Edward Blum, the director of the conservative group that was behind the 2013 case striking down a central provision of the Voting Rights Act. Blum’s group, Project on Fair Representation, also brought before the court this term a challenge to the University of Texas’s use of affirmative action in its admissions policies.

Blum said in a statement on Monday he was disappointed in the ruling, while adding: “The issue of voter equality in the United States is not going to go away.”

 

Prisoners in Multiple States Call for Strikes to Protest Forced Labor

April 4, 2016

by Alice Speri

The Intercept

Prison inmates around the country have called for a series of strikes against forced labor, demanding reforms of parole systems and prison policies, as well as more humane living conditions, a reduced use of solitary confinement, and better health care.

Inmates at up to five Texas prisons pledged to refuse to leave their cells today. The strike’s organizers remain anonymous but have circulated fliers listing a series of grievances and demands, and a letter articulating the reasons for the strike. The Texas strikers’ demands range from the specific, such as a “good-time” credit toward sentence reduction and an end to $100 medical co-pays, to the systemic, namely a drastic downsizing of the state’s incarcerated population.“Texas’s prisoners are the slaves of today, and that slavery affects our society economically, morally and politically,” reads the five-page letter announcing the strike. “Beginning on April 4, 2016, all inmates around Texas will stop all labor in order to get the attention from politicians and Texas’s community alike.”

The Texas Department of Criminal Justice, which oversees the state’s prisons, “is aware of the situation and is closely monitoring it,” spokesperson Robert Hurst wrote in a statement to The Intercept. He did not comment on the prisoners’ grievances and demands. Prisoner rights advocates said at least one prison — the French Robertson Unit in Abilene — was placed under lockdown today, but Hurst denied any prisons in Texas were on lockdown because of planned strikes.

Constitutional Servitude

The 13th Amendment to the United States Constitution bans “involuntary servitude” in addition to slavery, “except as a punishment for crime whereof the party shall have been duly convicted,” thus establishing the legal basis for what is today a $2 billion a year industry, according to the Prison Policy Initiative, a nonprofit research institute.

Most able-bodied prisoners at federal facilities are required to work, and at least 37 states permit contracting prisoners out to private companies, though those contracts account for only a small percentage of prison labor. “Ironically, those are the only prison labor programs where prisoners make more than a few cents an hour,” Judith Greene, a criminal justice policy analyst, told The Intercept.

Instead, a majority of prisoners work for the prisons themselves, making well below the minimum wage in some states, and as little as 17 cents per hour in privately run facilities. In Texas and a few other states, mostly in the South, prisoners are not paid at all, said Erica Gammill, director of the Prison Justice League, an organization that works with inmates in 109 Texas prisons.

“They get paid nothing, zero; it’s essentially forced labor,” she told The Intercept. “They rationalize not paying prison laborers by saying that money goes toward room and board, to offset the cost of incarcerating them.”

In Texas, prisoners have traditionally worked on farms, raising hogs and picking cotton, especially in East Texas, where many prisons occupy former plantations.

“If you’ve ever seen pictures of prisoners in Texas working in the fields, it looks like what it is,” Greene said. “It’s a plantation: The prisoners are all dressed in white, they got their backs bent over whatever crop they’re tending, the guards are on horseback with rifles.” In the facilities Greene visited, prisoners worked all day in the heat only to return to cells with no air conditioning. “The conditions are atrocious, and it’s about time the Texas prison administration had to take note.”

In 1963, in an effort to reduce the cost of running prisons, Texas began employing inmates to manufacture a wide array of products, including mattresses, shoes, soaps, detergents, and textiles, as well as the furniture used in many of the state’s official buildings. Because of labor laws restricting the sale of prisoner-made goods, Greene said, those products are usually sold to state and local government agencies.

Although they comprise nearly half the incarcerated population nationwide — about 870,000 as of 2014 — prison workers are not counted in official labor statistics; they get no disability compensation in case of injury, no social security benefits, and no overtime.

“They keep a high conviction rate at any cost,” reads the letter circulated by prisoners ahead of today’s strike, “all for the well-being of the multimillion-dollar Prison Industrial Complex.”

An Underground Prison Network

The Texas action is not an isolated one. Prisoners in nearby Alabama and Mississippi, and as far away as Oregon, have also been alerted to the Texas strike through an underground network of communication between prisons.

“Over the long term, we’ll probably see more work stoppages,” said Gammill. “In prison, you think it’d be difficult to spread information, but it actually spreads like wildfire.”

On April 1, a group of prisoners from Ohio, Alabama, Virginia, and Mississippi called for a “nationally coordinated prisoner work stoppage against prison slavery” to take place on September 9, the 45th anniversary of the Attica prison riot. “We will not only demand the end to prison slavery, we will end it ourselves by ceasing to be slaves,” that announcement reads. “They cannot run these facilities without us.”

Prison protests and strikes have seen a revival in recent years after a slowdown resulting from the increased use of solitary confinement to isolate politically active inmates. In 2010, thousands of inmates from at least six Georgia prisons, organizing through a network of contraband mobile phones, refused to leave their cells to work, demanding better living conditions and compensation for their labor. That action was followed by prison protests in Illinois, Virginia, North Carolina, and Washington. In 2013, California prisoners coordinated a hunger strike to protest the use of solitary confinement. On the first day of that protest, 30,000 prisoners across the state refused their meals.

Last year in Texas, nearly 3,000 detainees demanding better conditions seized and partially destroyed an immigration detention center.

In March, protests erupted at Holman Correctional Facility, a maximum security state prison in Alabama, where two riots broke out over four days. At least 100 prisoners gained control of part of the prison and stabbed a guard and the warden. Those protests were unplanned, but prisoners there had also been organizing coordinated actions that they say will go ahead as planned.

“We have to strain the economics of the criminal justice system, because if we don’t, we can’t force them to downsize,” an activist serving a life sentence at Holman told The Intercept. “Setting fires and stuff like that gets the attention of the media,” he said. “But I want us to organize something that’s not violent. If we refuse to offer free labor, it will force the institution to downsize.”

“Slavery has always been a legal institution,” he added. “And it never ended. It still exists today through the criminal justice system.”

 

Turkey’s Erdogan rejects western ‘lessons in democracy’

Turkish President Recep Tayyip Erdogan has said he rejects US and EU criticism over clampdowns on press freedoms. Erdogan has called on western leaders to “contemplate their own shame” before criticizing Turkey.

April 5, 2016

DW

Erdogan’s addressed the Turkish Red Crescent in Ankara on Monday in which he angrily rejected western allies’ criticism of his authoritarian tendencies.

US President Barack Obama warned last week after Erdogan’s Washington visit that Turkey’s apparent intolerance of critical media was taking it “down a path that would be very troubling.”

But the Turkish leader was having none of it.

“Those who attempt to give us lessons in democracy and human rights must first contemplate their own shame,” Erdogan said Monday.

His remarks follow Ankara’s anger at a satirical German music video mocking the Turkish president and a poem aired twice on Germany’s state ZDF written by German comedian Jan Böhmermann.

German Chancellor Angela Merkel’s spokesman said the poem was insulting and “deliberately offensive,” government spokesman Steffen Seibert said Monday.

Seibert added that Germany considered the poem to be defamatory, which is not permitted in Germany, but would not comment on whether a formal apology was conveyed to Turkish Prime Minister Ahmet Davutoglu who spoke to Merkel by phone over the weekend.

Merkel not laughing at German satire

Turkey’s government has been accused of muzzling critical voices and targeting opposition lawmakers, critical academics, independent lawyers and NGOs.

In the weekend phone call, Davutoglu’s office said the prime minister told Merkel that he was unhappy about recent articles criticizing Erdogan in German media.

Davutoglu complained such stories “were incompatible with freedom of the press” and said there should be an end to the publication of such “unacceptable” material, his office said.

Der Spiegel’s scathing Erdogan coverage

German weekly Der Spiegel ran a cover story deeply critical of Erdogan with a caricature of the Turkish president – whom the magazine called “the wild man of the Bosphorus” – shaking his fist.

Merkel’s relationship with Turkey has been increasingly complex. The chancellor has tried to distance herself from Erdogan’s polarizing rhetoric.

At the same time Germany’s relationship with Ankara was instrumental in crafting a controversial deal in which Turkey has begun accepting refugees back from Greece in exchange for 6 billion euros ($6.8 billion) and a resumption of talks over Turkey’s ascension into the EU.

 

Fear and Loathing in Ukraine

April 4, 2016

by James W. Carden

consortiumnews

The overnight train from Kiev to Slavyansk gives a passenger, if nothing else, ample time to read and think. On a return trip to war-torn eastern Ukraine in March, I took the opportunity the 13-hour journey afforded to re-read Judith Shklar’s seminal essay, The Liberalism of Fear.

Written in 1989, at the time of what in retrospect looks like an era of unhinged, to say nothing of embarrassing, American triumphalism, Shklar, unlike many of her contemporaries in the academy (particularly Francis Fukuyama who published The End of History? in the National Interest that year), took a sober accounting of her time. Shklar warned, quite presciently, as it turns out, that “anyone who thinks that fascism in one guise or another is dead and gone ought to think again.”

The Liberalism of Fear essentially seeks to answer the question: What is the baseline requirement for a good society? What is the absolute precursor it must achieve without which it would be impossible to achieve democratic norms, pluralism, cultural freedom, and a market economy (be it democratic-capitalist or democratic-socialist) to develop?

In a biographical essay on Shklar, written after her untimely death in 1992, the philosopher Seyla Benhabib wrote that for Shklar, cruelty “was the chief vice, the summum malum, that liberalism must avoid.” In singling out the corrosive effect cruelty has on society Shklar was, according to Benhabib, “calling attention to the accompanying sentiments of fear, degradation, and humiliation that would ultimately make a liberal polity impossible.”

Shklar’s liberalism of fear has no positive program, it is essentially negative; as she herself notes, her liberalism resembles “Isiah Berlin’s ‘negative liberty’” though “it is not exactly the same.” What the liberalism of fear is also not, as she makes clear, is utopian. Then what is it?

According to Shklar, the liberalism of fear is a liberalism that is grounded “in the conviction of the earliest defenders of toleration, born in horror, that cruelty is an absolute evil an offense against God or humanity. “

The liberalism of fear is resolutely anti-fascist: It must, according to Shklar, reject political doctrines which “do not recognize any difference between the spheres of the personal and the public … it requires [that] every public policy be considered with this separation in mind and must be consciously defended,” she continues by noting that, “the limits of coercion begin, though they do not end – with a prohibition upon invading the private realm.”

The reason for Shklar’s emphasis on the dangers posed by the erasure between the public and private surely has something to do with her biography. As she recounted in the 1989 Charles Homer Haskins lecture, she was born in Riga, Latvia, in 1928 during the inter-war years but had to flee with her family when the war came:

“[J]ust before the Russians arrived, my uncle put us on a plane to Sweden, where we remained far too long, until well after the German invasion of Norway. By then there was only one route out of Europe, the Trans-Siberian railroad, which slowly took us to Japan. It was not an easy trip, but miraculously we escaped.”

Shklar, according to Benhabib, “carried into her political thought the indelible marks of disbelief in the face of a world gone insane.” Hence her desire to help build liberalism a sturdy enough intellectual edifice which would not succumb to the barbarity that racked Europe between 1914 and 1945. Are we in danger of a repeat performance today? I wonder.

Shklar also tackles the tricky topic of political spirituality. We are told, in the U.S. anyway, that the EuroMaidan in Ukraine was a “Revolution of Dignity” and that the sacrifices of the “Heavenly Hundred” who died on the Square should not be in vain. The implicit instruction is for the West to gloss over and ignore the violent nature of the revolution, which saw a democratically elected president flee in the face of violence.

It is reasonable to infer that Shklar would have taken a dim view of all this claptrap. “The consequences of political spirituality,” she wrote, “are far less elevating than it might seem. Politically it has usual served as an excuse for orgies of destruction.”

How do we apply Shklar’s criteria to the situation in Ukraine as it obtains today? In Shklar’s vision of liberalism, there are absolute minimums which societies need to meet. From what I saw, Kiev is not meeting them.

The Ukraine crisis poses some very tough questions on the nature of statehood and nationality within the modern European nation-state. As the British political scientist Richard Sakwa has noted, the outcome of the crisis will likely determine which of two paths Ukraine will chose: will it go the route of a monist, in many ways, exclusionary society where Ukrainian is the sole official or even acceptable language or will Ukraine choose the model that Western countries aspire to, that of a pluralistic society in which there is toleration for differences in language, religion, culture and even historical narratives?

I can tell you the path on which it is currently embarked. Kiev’s decommunization policy seems, at first glance, somewhat reasonable, especially to Western ears, which too easily associates communism with the monstrous criminality of the early Bolsheviks, of Stalin, of Pol Pot.

However, in its rush to purge itself of its communist past – in renaming street signs, toppling statues of Lenin, and banning the current iteration of the communist party – the government in Kiev is driving dissent underground, shaming and alienating millions of Russian speakers in the Donbas, and driving a stake through the heart of pluralism.

Shklar warned against such campaigns, warning that any “theory that gives public authorities the unconditional right to impose beliefs and even a vocabulary as they may see fit upon the citizenry can be described as even remotely liberal.”

In the eastern Ukrainian city of Severodonetsk locals are afraid to express even a modicum of sympathy with the Soviet past lest they draw the unwanted attention of the SBU (Security Service of Ukraine), so dissent manifests itself here and there – usually at night – in what one local described as a “graffiti war” in which painted slogans of the Azov battalion and other Ukrainian armed forces groups are defaced with red paint.

The push to decommunization might reasonably be said to encourage hooliganism. In Kiev in late March, a group of young thugs physically attacked elderly pensioners who were marching with Soviet flags. The concerted effort to erase the Soviet past isn’t the only attack on pluralism. A gay rights parade was brutally attacked in Lviv in late March.

The question which then arises is this: why are these incidents met with complete silence or, at best, utter indifference by the European Union and the rest of the international community?

 

Spying on Friends? Atmosphere of Distrust Hinders EU Anti-Terror Cooperation

April 5, 2016

by Maik Baumgärtner, Martin Knobbe and Jörg Schindler

Spiegel

The man who wants to explain the psyche of Germany’s foreign intelligence service is sipping a cappuccino and talking about the abduction of German tourists in the Sahara Desert a few years ago. A crisis committee was meeting at the Foreign Ministry in Berlin, and agents at the Federal Intelligence Service (BND) in Pullach, outside Munich, were trying to figure out how to get information about the kidnappers. Human lives were at stake, the pressure considerable.

The French intelligence services had good sources in the region, but they were unwilling to share their information with the Germans, so the BND decided to spy on the French to gain access to it. This was how it came about that the Germans spied on a government agency in a friendly country, one they treated as one of their closest political allies. Friendly? Allied? These are not categories with which the man with the cappuccino is familiar in his work.

A senior BND official at the time, he prefers to keep his name a secret. He recounts the episode to explain why an intelligence service sometimes finds it necessary to spy on one of its partners — and how it could happen that the BND spied on so many institutions in Europe. Our business, says the man, is based primarily on suspicion.

It took only a few hours after three bombs had exploded in Brussels and 35 people had been killed for politicians and experts to begin calling for better cooperation among intelligence services in Europe.

Hording Data

There was talk of a community of values, of solidarity and of trust. German Interior Minister Thomas de Maizière, a member of the center-right Christian Democratic Union (CDU), mentioned various “pots of data” and the need to finally link them together. Federal Prosecutor General Peter Frank and the domestic policy spokesman of the center-left Social Democratic Party (SPD) parliamentary group, Burkhard Lischka, called for a European counterterrorism center.

Politicians and others have been singing the same mantra for months, and it always happens when there has been an attack. It happened in November, after the attacks on the Stade de France stadium and the Bataclan concert hall in Paris, and before that, in January, on the editorial officials of the French satirical magazine Charlie Hebdo.

The argument makes sense: If terrorists are forming cross-border networks, governments must do the same to fight terrorists. Nevertheless, cooperation among security agencies in Europe remains rudimentary.

The episode in the Sahara illustrates why this is true. Intelligence services mistrust rather than trust each other. Data is horded instead of shared. Everyone spies on everyone else, as we have learned from past revelations. The American National Security Agency (NSA) tapped German Chancellor Angela Merkel’s mobile phone, and the BND spied on former French Foreign Minister Laurent Fabius. The examples could be continued indefinitely.

For months, the German government has been working on a law to reform the country’s intelligence agencies. Its aim is to improve transparency and eliminate mistrust, especially of European partners. But the suspicion is deeply entrenched, as evidenced by the thousands of spying targets, known as selectors, the BND has directed at European neighbors.

Deep Distrust

They consist of long sequences of letters and characters. The sequence begins with a telephone number, email address or number of a device the BND wishes to spy on, followed by a code for the subject matter: “WPR” for weapons production, “LAP” for agricultural policy, “TEF” for funding of terrorism, “ISG” for an Islamist who poses a potential threat to public safety.

Then comes a three-letter code for the country where the spying occurs. The sequence often ends with a blocking code to identify intelligence services with which the Germans prefer not to share the results of the spying operation: HORT for Hortensie (hydrangea), for example, the code for the United States, and BEGO for Begonia, the code for Denmark.

The BND employees referred to the services of other countries as Fleurop partners (which stands for the Europe-wide online flower delivery service of the same name). Many of the BND selectors included blocking codes, a sign of how deeply the Germans mistrusted these agencies.

The selectors open a window into the world of BND espionage, revealing how pronounced the German agents’ desire to gather information was. To some extent, they used the same terms to search the worldwide sea of data as their counterparts from the United States. The overlap encompassed many areas, including politics and business, government agencies and private citizens. The BND was snooping around in crisis zones, but also in countries like the United States. European neighbors were targets of its espionage with remarkable frequency.

For instance, the email addresses, telephone and fax numbers of virtually all European embassies and many consulates in Germany were on this target list, and the agents didn’t even shy away from spying on a Vatican delegation. The list also included phone numbers for the interior ministries in Vienna and Brussels, the Defense Ministry in London and the US State Department, as well as banks like HSBC.

International institutions were on the list of targets, as well as the United Nations drug control program, the Organization for Security and Co-operation in Europe (OSCE), the Organization of the Petroleum Exporting Countries (OPEC) and the International Monetary Fund in Washington. So were non-governmental organizations, such as Oxfam, Care International, the International Committee of the Red Cross in Vienna, the International Medical Corps in Los Angeles and the International Action Center in New York.

The offices of politicians were also wiretapped, such as that of the Israeli prime minister, along with telecommunications companies like British Telecom and MCI Worldcom, a NASA flight operations center, a department of the US Air Force, and many small and mid-sized companies in Austria and Switzerland, even gun manufacturer Heckler & Koch in the southwestern German state of Baden-Württemberg, which was British-owned at the time it was spied on.

At the beginning of the espionage scandal, it seemed that the BND was mainly gathering information about European targets on behalf of the Americans. One revelation that triggered outrage was that the Germans had wiretapped European companies Eurocopter and EADS for the NSA, fueling speculation over possible industrial espionage. The Americans had given their German counterparts 73 telephone numbers at both companies to monitor. BND terminated the program in 2006, because it violated German and European interests.

It is now becoming clear that the BND listened in on calls associated with at least two phone numbers at the defense contractors for its own purposes, a Eurocopter office in Marignane, France, and an EADS number in Warsaw.

An Atmosphere of Distrust

The surveillance was so broad in scope that it forces the question of whether the targets were all actually necessary to track down terrorists and money launderers, human traffickers and arms dealers. Put differently, how many encroachments on personal data are needed to ensure security in Germany?

The selectors show that part of the BND’s mentality is to not trust anyone. But this lack of trust is not talked about, nor is the question of what society expects from an intelligence service, what powers it should have and where its limits should lie. As long as these questions remain unanswered, there can be no honest debate over sensibly combatting terrorism in Europe.

For more than two years, a parliamentary investigative committee has been trying to shed light on the activities of intelligence agencies on German soil. But in this environment of suspicion, lawmakers are encountering one roadblock after the other in their work. Most BND employees are only willing to say the minimum required to avoid being liable to prosecution. Many are unable to remember details, many contradict themselves and some call in sick when called to testify. During the hearings, an attorney for the German Chancellery often interjects as soon as he sees a threat of secret information being disclosed.

This secretiveness also pervades the debate surrounding a new BND law that would police the agency’s work. The reform effort has been stalled for some time. The plans to monitor the agency are too lax for some politicians and yet too strict for others, who fear it will paralyze the BND. The skeptics have voiced their concerns behind the scenes, and Finance Minister Wolfgang Schäuble and Chancellor Angela Merkel, both members of the center-right Christian Democratic Union (CDU), have reportedly intervened. Suddenly their party is divided on the issue.

From the investigative committee to the parties to the Chancellery, the case illustrates how two worlds are colliding, those of the reformers and those seeking to preserve the status quo. Gerhard Schindler is caught between the two.

‘Transparency Offensive’

The BND president points to a photo of a salami sandwich in the office of a scientist in Pullach. It’s his favorite image. A wrinkled white work coat is draped over a chair, a chemical formula is written on a blackboard in the background, and papers, magazines and files are stacked on brown furniture. The sandwich, still wrapped in plastic wrap, is on top of one these stacks. This is the BND to a T, says Gerhard Schindler.

He’s surrounded by people holding wine glasses. Schindler has come to the offices of the Gruner + Jahr publishing house in Hamburg to open an exhibition about the BND. Large images by photographer Markin Lukas Kim taken at the BND’s Pullach headquarters depict the inner life of the agency. They make the BND seem very old-fashioned, like a relic from the Cold War. There aren’t any people in the photos, which were all taken at night, but they depict many details. One could say that they represent the dark past of the BND.

The exhibition is part of a “transparency offensive,” says the president, who envisions the BND of the future as a modern intelligence service in a modern democracy.

He recently ordered the elimination of the code names for BND field offices, and employees are also no longer required to conceal who they work for. Some 4,000 of the BND’s 6,500 employees will soon have been moved from a hidden compound on the banks of the Isar River in Pullach to a modern, light-filled building in downtown Berlin. Images of the new headquarters are also on display at the exhibition. They could be interpreted to represent the BND’s bright future.

Schindler knows how long the path from dark to bright is. He mentions a “deep incision” into the culture of his agency, and a necessary “mental shift.” He wants less suspicion and more discussion, as he puts it.

The NSA’s Willing Helper

The last few months have also taken their toll on Schindler, who was out sick for some time. Many of his employees feel unfairly criticized and let down by lawmakers. When testifying before the fact-finding commission, these agents, people who were left alone for decades as they quietly engaged in their espionage activities, are now expected to explain to the public how the BND became the NSA’s willing helper.

In 2002, the two agencies, still reeling from by the shock of the 9/11 attacks, signed a memorandum of agreement to engage in close cooperation, which included a jointly operated listening station in Bad Aibling south of Munich. After that, BND employees entered millions of search terms, or selectors, for the Americans into their databases — a program the public only learned about a year ago.

As we know today, the Americans palmed off thousands and thousands of search terms on the Germans that violated German interests. Over the years, the BND sorted out about 40,000 of these selectors, but the number it overlooked cannot be quantified. Some 68.7 percent of the search terms were directed against government offices of European Union partners, while many others targeted German companies.

But the BND also independently spied on many targets in Europe, entirely without being requested to do so by the Americans. It wasn’t until the end of 2013 that Schindler issued the order to suspend spying operations on friendly EU and NATO partners, but some problematic selectors remained active nonetheless.

The Parliamentary Control Panel of the German Bundestag in charge of supervising the intelligence services appointed a task force, which paid a visit to BND headquarters in Pullach. Although the task force was shown a 900-page list of selectors, its final report remained classified.

Nevertheless, some details were revealed — for instance, that the BND was not only surveilling politicians like the French foreign minister, but also German citizens, such as the diplomat husband of Emily Haber, a state secretary in the Interior Ministry. He was head of the European Union Monitoring Mission in Georgia from 2008 to 2011. Other Germans were also on the list, including employees at EU outposts abroad. Not even German citizens were spared when it came to the agency’s suspicions. The task force concluded that the BND had “spied on a large number of targets that were not in conformity with its mandate, and were legally inadmissible.”

A Dearth of Scrutiny

How pan-European cooperation among intelligence services is supposed to flourish under these conditions remains a mystery. As long as no clear legal basis for their work exists, and as long there is no reliable supervision of their activities, a European counterterrorism program will make little progress.

Every four years, the German government provides the BND with a secret mission profile detailing which issues and countries it should focus on and address. There are also three bodies that monitor the BND: the G-10 commission of the Bundestag, which consists mainly of experienced lawyers; the Parliamentary Control Panel, which meets behind closed doors; and a department at the Chancellery headed by State Secretary Klaus-Dieter Fritsche. But neither the government nor any of these bodies has learned very much about the everyday activities of BND agents, in part because no one is asking pointed questions.

This, at least, might explain why Chancellor Merkel made a statement on the sidelines of an EU summit on Oct. 24, 2013 that would be remembered for years to come: “Spying between friends, that’s just not done.” It was a reaction to the news that the Americans had eavesdropped on one of her mobile phones. At the time, didn’t she know that the BND was also spying on Germany’s friends? How blind were politicians, and how ignorant?

The NSA investigative committee recently held its 91st meeting inside a committee conference room in Berlin. Foreign Minister Frank-Walter Steinmeier, a member of the center-left Social Democratic Party (SPD) sat down at a semi-circular table, facing 10 members of the Bundestag in the hearing. Behind him, representatives of the federal ministries, the intelligence services and the German states observed the hearing as stenographers took notes. The foreign minister peered out a row of windows, where he could see excursion boats passing on the Spree River outside. The building’s architect once wrote that his design was meant to symbolize the German Bundestag’s claim to openness and transparency.

Steinmeier spent more than an hour giving his opening presentation. He described the situation shortly after the 9/11 attacks, which revealed a “completely new quality of terrorism,” as well as the need for close cooperation with the Americans. He said that he still supports this cooperation today.

‘Plausible Deniability’

The foreign minister used his words to paint a large political picture, something he does very well. But he seems less interested in the small brushstrokes.

From 1999 to 2005, Steinmeier served as chief of staff in the Chancellery under Gerhard Schröder, which also made him the BND’s top supervisor. He claims that he knew nothing about problematic selectors at the time, and that he never issued any orders to spy on European partners. According to Steinmeier, he also never received any such dossiers in his later role as foreign minister. In fact, he said, he had no need for the BND’s information, because he was already familiar with the European partners’ political positions.

Steinmeier’s predecessors said similar things to the investigative commitee. In his hearing, Thomas de Maizière said that until leaving his position as head of the Chancellery in 2009, he had received no indication that the BND had entered search terms like “EADS” or “Eurocopter” for the Americans. Was the Chancellery that clueless for so many years?

Internal memos show that the BND was already reporting problematic NSA selectors to a department head in the Chancellery in early 2008. Former BND President Ernst Uhrlau also told the committee that the selector problems were discussed at length in the Chancellery in 2008. Was the Chancellery head not present in that debate? Or is de Maizière simply having a memory lapse?

There will be no credible responses to these questions, because the agreements between intelligence agents and their supervisors are usually verbal. For instance, no minutes are prepared for the so-called presidential group, in which the heads of the security agencies at the federal level meet in the office of the Chancellery head every Tuesday. The Americans call this method “plausible deniability.” Those who leave no paper trail behind have nothing to deny.

Taking on a Life of Its Own

Through a lack of political leadership, the situation took on a life of its own. At the BND, it manifested itself in the unbridled collection of data. Was a shipping company suspected of proliferation, because it had once shipped goods to Iran? Should a chemical manufacturer be monitored because its products can be used to build bombs? These questions were discussed often and heatedly, say BND employees. When in doubt, however, the agents reverted to entering the surveillance target. For an intelligence service, neglecting to do something is worse than gathering too much information.

The employees had little to fear from a legal standpoint. The BND operates largely without binding rule. The BND law enacted in 1990 consists of 12 sections, which are intended to create a framework for the agency’s operations. But when it comes to conducting surveillance abroad, one of the BND’s main tasks, it operates largely outside the confines of German law.

The BND also violated the rules in its thirst for data. This is evident in its forwarding of raw data to the Americans, which was even automated in 2002. Internal documents show that at that point, BND offices had long known that these activities were partly opposed to German and European interests.

But the BND brushed aside the concerns — and used a bizarre justification to do it. According to an expert report, the “deliberate disclosure” of such data is “illegal,” but through the use of a filter, the BND documented its intention not to pass any sensitive data from Germany or Europe to foreign intelligence services. It neglected to mention that this filter didn’t work very well from the start.

It is legally “unobjectionable,” according to the report, if the automatic sharing of data “is to be viewed as being of greater value” than the isolated forwarding of “information about German citizens.” In other words, close cooperation with the NSA was more important than protecting the constitutional rights of German citizens.

Schindler’s agency even wanted to give itself a carte blanche of sorts for intercepting satellite communications. The BND law is invalid in orbit, the agency wrote in a memo dated 11/25/2014, explaining its so-called space theory to the Chancellery. A department head working for Chancellor Merkel retorted that she considered the BND’s argument to be “hardly acceptable.”

Failures in Government Supervision

As these examples show, government supervision of Germany’s intelligence services has failed. In response, the SPD parliamentary group presented the key parameters of a reform of the BND in June of last year, and seven months later, many of those ideas were incorporated into a draft bill that emerged from the Chancellery.

Under the proposed legislation, not just Germans but all citizens and institutions in the EU would be placed under special protection against surveillance in the future. The BND president would be required to sign off on critical surveillance operations. The draft law also calls for an external panel consisting of several units that would monitor BND activities more closely.

The domestic policy experts of the government coalition in Berlin quickly agreed on the basic elements of the proposal, and Schindler also agreed. The draft law, says Karlsruhe constitution law expert Matthias Bäcker, will at the very least create a framework for the BND’s work. Although Bäcker criticizes some provisions as too vague, he believes that on the whole the effort is an attempt to provide BND employees with greater legal security.

Nevertheless, the reform still has a long way to go before implementation. Talks within the government coalition have been bogged down for weeks, because the CDU is divided. Domestic policy expert Clemens Binninger, who is also the chairman of the Parliamentary Control Panel, supports the draft put forward by the Chancellery. In contrast Patrick Sensburg, chairman of the NSA investigative committee, proposes that an outside control committee should “report regularly to the Chancellery.” Other politicians with the CDU and its Bavarian sister party, the Christian Social Union (CSU), would rather see the BND left as it is.

 

 

 

 

 

 

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