TBR News March 24, 2018

The Voice of the White House 

Washington, D.C. March 23 , 2018:”We will be out of the office until March 25, ed.”

Table of Contents

• ‘A grand illusion’: seven days that shattered Facebook’s facade
• Isis-Inspired Terrorism Gives Impression It’s a Global Force. It’s Not
• Bolton Was Early Beneficiary of Cambridge Analytica’s Facebook Data
• Facebook is facing its biggest test ever—and its lack of leadership could sink the company
• A Madman on the National Security Council
• Stormy Daniels: porn star primed to tell all about alleged Trump affair
• China warns U.S. it will defend own trade interests
• The Monster MERS Mortgage Fraud

 

‘A grand illusion’: seven days that shattered Facebook’s facade

• Revelations about the depths of Facebook’s failure to protect our data has finally pulled back the curtain, observers say
• Cambridge Analytica scandal: the biggest revelations so far

March 24, 2018

by Olivia Solon in San Francisco

The Guardian

Dumb fucks.” That’s how Mark Zuckerberg described users of Facebook for trusting him with their personal data back in 2004. If the last week is anything to go by, he was right.

Since the Observer reported that the personal data of about 50 million Americans had been harvested from Facebook and improperly shared with the political consultancy Cambridge Analytica, it has become increasingly apparent that the social network has been far more lax with its data sharing practices than many users realised.

As the scandal unfurled over the last seven days, Facebook’s lackluster response has highlighted a fundamental challenge for the company: how can it condemn the practice on which its business model depends?

“This is the story we have been waiting for so people will pay attention not just to Facebook but the entire surveillance economy,” said Siva Vaidhyanathan, a professor of media studies at the University of Virginia.

Since Zuckerberg’s “dumb fucks” comment, Facebook has gone to great lengths to convince members of the public that it’s all about “connecting people” and “building a global community”. This pseudo-uplifting marketing speak is much easier for employees and users to stomach than the mission of “guzzling personal data so we can micro-target you with advertising”.

In the wake of the revelations that Cambridge Analytica misappropriated data collected by Dr Aleksandr Kogan under the guise of academic research, Facebook has scrambled to blame these rogue third parties for “platform abuse”. “The entire company is outraged we were deceived,” it said in a statement on Tuesday.

However in highlighting the apparent deceit, the company has been forced to shine a light on its underlying business model and years of careless data sharing practices.

Sure, the data changed hands between the researcher and Cambridge Analytica in apparent violation of Kogan’s agreement with Facebook, but everything else was above board. The amount of data Cambridge Analytica got hold of and used to deliver targeted advertising based on personality types – including activities, interests, check-ins, location, photos, religion, politics, relationship details – was not unusual in the slightest. This was a feature, not a bug.

‘Extremely friendly to app developers’

There are thousands of other developers, including the makers of dating app Tinder, games such as FarmVille as well as consultants to Barack Obama’s 2012 presidential campaign, who slurped huge quantities of data about users and their friends – all thanks to Facebook’s overly permissive “Graph API”, the interface through which third parties could interact with Facebook’s platform.

Facebook opened up in order to attract app developers to join Facebook’s ecosystem at a time when the company was playing catch-up in shifting its business from desktops to people’s smartphones. It was a symbiotic relationship that was critical to Facebook’s growth.

“They wanted to push as much of the conversation, ad revenue and digital activity as possible and made it extremely friendly to app developers,” said Jeff Hauser, of the Center for Economic and Policy Research. “Now they are complaining that the developers abused them. They wanted that. They were encouraging it. They may now regret it but they knowingly unleashed the forces that have led to this lack of trust and loss of privacy.”

The terms were updated in April 2014 to restrict the data new developers could get hold of, including to people’s friends’ data, but only after four years of access to the Facebook firehose. Companies that plugged in before April 2015 had another year before access was restricted.

“There are all sorts of companies that are in possession of terabytes of information from before 2015,” said Jeff Hauser of the Center for Economic Policy and Research. “Facebook’s practices don’t bear up to close, informed scrutiny nearly as well as they look from the 30,000ft view, which is how people had been viewing Facebook previously.”

For too long consumers have thought about privacy on Facebook in terms of whether their ex-boyfriends or bosses could see their photos. However, as we fiddle around with our profile privacy settings, the real intrusions have been taking place elsewhere.

When the Observer contacted Facebook last week with testimony from a whistleblower stating that Cambridge Analytica had not deleted the data, Facebook’s reaction was to try to get ahead of the story by publishing its own disclosure late on Friday and sending a legal warning to try to prevent publication of its bombshell discoveries.

Then followed five days of virtual silence from the company, as the chorus of calls from critics grew louder, and further details of Facebook’s business dealings emerged.

A second whistleblower, the former Facebook manager Sandy Parakilas, revealed that he found Facebook’s lack of control over the data given to outside developers “utterly horrifying”. He told the Guardian that he had warned senior executives at the company that its lax approach to data protection risked a major breach but was discouraged from investigating further.

At around the same time it emerged that the co-director of the company that harvested the Facebook data before passing it to Cambridge Analytic is a current employee at Facebook. Joseph Chancellor worked alongside Aleksandr Kogan at Global Science Research, which exfiltrated the data using a personality app under the guise of academic research.

Demand for answers

Politicians on both sides of the Atlantic called for answers. In the US, the Democratic senator Mark Warner called for regulation, describing the online political advertising market as the “wild west”.

“Whether it’s allowing Russians to purchase political ads, or extensive micro-targeting based on ill-gotten user data, it’s clear that, left unregulated, this market will continue to be prone to deception and lacking in transparency,” he said.

The Federal Trade Commission plans to examine whether the social networking site violated a 2011 agreement with the agency over data privacy over its data-sharing practices.

In the UK, MPs summoned Facebook’s chief executive, Mark Zuckerberg, to give evidence to a select committee investigating fake news.

“I think they are in a very bad situation because they have long benefitted from the tech illiteracy of the political community,” said Hauser.

The backlash spooked investors, wiping almost $50bn off the valuation of the company in two days, although the stock has since rallied slightly.

On Wednesday, Zuckerberg finally broke his silence in a Facebook post acknowledging that the policies that allowed the misuse of data were a “breach of trust between Facebook and the people who share their data with us and expect us to protect it”.

Facebook’s chief operating officer, Sheryl Sandberg, added her own comment: “We know that this was a major violation of people’s trust, and I deeply regret that we didn’t do enough to deal with it.”

The company will investigate apps that had access to “large amounts of information” before the 2014 changes and audit thousands of apps that show “suspicious activity”. The company will also inform those whose data was “misused”, including people who were directly affected by the Kogan data operation.

These actions don’t go far enough, said Vaidhyanathan.

“Facebook has a history of putting on that innocent little boy voice: ‘Oh I didn’t know that I shouldn’t hold the cat by its tail’,” he said. “I think we’re tired of it at this point.”

These problems were pointed out by scholars years ago, said Robyn Caplan, a researcher at Data & Society, but Facebook’s response was slow and insufficient.

“They have been trying to put out a lot of little fires but we need them to build a fire department,” she said.

 

Isis-Inspired Terrorism Gives Impression It’s a Global Force. It’s Not

March 23, 2018

by Patrick Cockburn

The Independent/UK

March 23, 2018

The killing of three people in the south of France by a man claiming allegiance to Isis will make people doubt if this murderous cult is as dead as governments had announced and people had hoped. The answer is that the attack in the Carcassonne region by a single gunman, said to be a Moroccan petty criminal from the area, proves very little about the strength of Isis as a continuing threat.

It will always be easy for a single killer, who in this case has been named as 36-year-old Redouane Lakdim, to shoot down passers-by chosen at random or trapped in a supermarket. Lakdim demanded the release of Salah Abdeslam, a survivor of the Isis gang which killed 130 people in Paris on 13 November 2015, but there is no evidence so far that the killer, who has been shot dead by police, was part of a cell or that this was an attack organised from above or from outside the country.

Even if there was some degree of organisation behind the killings, it is important to take on board that atrocities carried out by Isis are geared to produce maximum publicity. Often, they happen close to iconic places in capital cities such as the Westminster or London Bridge attacks, or on the Promenade des Anglais in Nice in 2016 when 86 people were mowed down and killed by a lorry deliberately driven into them. The very cruel and arbitrary nature of the murders are designed to achieve the maximum publicity.

Isis is far less important than it was three years ago when it controlled territory in western Iraq and eastern Syria the size of Great Britain. At that time its terrorist operations in France and elsewhere could call on the resources of a de facto state that had money, weapons, expertise and the capacity to inspire its gunmen and suicide bombers.

This is no longer true to anything like the same degree.

The Islamic State died with the capture of its great strongholds, Mosul in Iraq and Raqqa in Syria, in the second half of 2017. It does still have its hideouts in the deserts of the region and has benefited from the dispersal of effort in the campaign against it by the Iraqi government’s confrontation with the Iraqi Kurdish authorities over Kirkuk, and the Turkish invasion of Afrin that has diverted the Kurdish People’s Protection Units (YPG) which had previously been fighting it. In a small way, Isis is back in business in its heartlands, though on nothing like the scale on which it previously operated.

Wherever there is chaos in Islamic countries, Isis will find opportunities to lodge itself and expand. Much of its most savage violence takes place largely below the radar of the international media, notably in Afghanistan where an Isis suicide bomber killed 33 and wounded 65 Shia celebrating the New Year in Kabul on 21 March.

Applause from social media sympathetic to Isis may give the impression that it still has a large base of support, but this is doubtful. Such support peaked when it was a new and rapidly expanding force in 2014 and 2015. Even then, it never became a vehicle in Europe for other social and political discontents and it is unlikely that this will happen now.

 

Bolton Was Early Beneficiary of Cambridge Analytica’s Facebook Data

March 23, 2018

by Matthew Rosenberg

The New York Times

WASHINGTON — The political action committee founded by John R. Bolton, President Trump’s incoming national security adviser, was one of the earliest customers of Cambridge Analytica, which it hired specifically to develop psychological profiles of voters with data harvested from tens of millions of Facebook profiles, according to former Cambridge employees and company documents.

Mr. Bolton’s political committee, known as The John Bolton Super PAC, first hired Cambridge in August 2014, months after the political data firm was founded and while it was still harvesting the Facebook data.

In the two years that followed, Mr. Bolton’s super PAC spent nearly $1.2 million primarily for “survey research,” which is a term that campaigns use for polling, according to campaign finance records.

But the contract between the political action committee and Cambridge, a copy of which was obtained by The New York Times, offers more detail on just what Mr. Bolton was buying. The contract broadly describes the services to be delivered by Cambridge as “behavioral microtargeting with psychographic messaging.”

To do that work, Cambridge used Facebook data, according to the documents and two former employees familiar with the work.

“The data and modeling Bolton’s PAC received was derived from the Facebook data,” said Christopher Wylie, a data expert who was part of the team that founded Cambridge Analytica. “We definitely told them about how we were doing it. We talked about it in conference calls, in meetings.”

Cambridge Analytica, which rose to prominence through its work with Mr. Trump’s 2016 election campaign, has found itself confronting a deepening crisis since reports this past weekend in The New York Times and The Observer of London that the firm had harvested the data from more than 50 million Facebook profiles in its bid to develop techniques for predicting the behavior of individual American voters.

Cambridge’s so-called psychographic modeling techniques, which were built in part with the data harvested from Facebook, underpinned its work for Mr. Trump’s campaign in 2016, setting off a furious — and still unsettled — debate about whether the firm’s technology worked. The same techniques were also the focus of its work for Mr. Bolton’s super PAC.

“The Bolton PAC was obsessed with how America was becoming limp wristed and spineless and it wanted research and messaging for national security issues,” Mr. Wylie said.

“That really meant making people more militaristic in their worldview,” he added. “That’s what they said they wanted, anyway.”

Using the psychographic models, Cambridge helped design concepts for advertisements for candidates supported by Mr. Bolton’s PAC, including the 2014 campaign of Thom Tillis, the Republican senator from North Carolina, according to Mr. Wylie and another former employee, who spoke on the condition of anonymity to avoid being dragged into the investigations that now appear to be engulfing Cambridge.

One advertisement, a video that was posted on YouTube, was aimed at people who scored high for conscientiousness, and were thought to respect hard work and experience. It emphasized Mr. Bolton’s time working for Ronald Reagan and how Mr. Tillis embodied the spirit and political ethos of the late president.

Beyond their conservative politics, Mr. Trump, Mr. Bolton and Cambridge Analytica all share a patron — the Mercer family of Long Island, whose patriarch, Robert L. Mercer, made a fortune at the helm of a top-yielding hedge fund.

Cambridge Analytica, which grew out of the London-based SCL Group, was founded in 2014 with a $15 million investment from Mr. Mercer, whose daughter Rebekah sits on the firm’s board of directors. Stephen K. Bannon was also a co-founder.

At the same time, Mr. Mercer was financially supporting Mr. Bolton’s PAC, donating $5 million between April 2014 and September 2016, according to Federal Election Commission filings. The Mercers also backed Mr. Trump in the presidential election.

The Mercer family has not publicly commented since the reports about the misuse of Facebook data by Cambridge first surfaced in The Times and The Observer.

The reports have prompted calls from lawmakers in Britain and the United States for renewed scrutiny of Facebook, and at least two American state prosecutors have said they are looking into the misuse of data by Cambridge Analytica.

The company also suspended its chief executive, Alexander Nix, after a television broadcast this week in which he was recorded suggesting that the company had used seduction and bribery to entrap politicians and influence foreign elections.

But it is the harvesting of Facebook data that has cast the harshest spotlight on Cambridge, and Mr. Bolton’s experience with the company appears to have provided a model for how it sold itself to future political campaigns, including Mr. Trump’s.

The firm took the psychographic profiles it was building off the Facebook data at the time and combined them with voter databases and other sets of data. Staff from SCL’s elections division, which through a convoluted corporate structure was interchangeable with Cambridge, discussed what they were doing at a meeting in July 2014 with another contractor for the Bolton PAC, according to an agenda of the meeting obtained by The Times.

The profiles would be used to “identify the personality traits of individuals” in states to be targeted by the Bolton PAC, said the agenda, which was prepared for SCL and Cambridge staff. “Individuals can be targeted with the right message,” it said.

The agenda also included a line, in boldfaced text, that said SCL wanted to use voter contact lists available to Bolton’s campaign to direct people “toward the FB app.” Cambridge, working through an outside researcher, used a Facebook app to harvest data from the social network’s profiles. The app claimed to be collecting data for academic research, and users were not aware of its true purpose.

Months later, the relationship between Cambridge and the Bolton PAC had grown so close that the firm was writing up talking points for Mr. Bolton. In an email dated Oct. 1, 2014, Cambridge staff outlined a few sentences that Mr. Bolton could use to describe the work the new firm was doing for his super PAC.

“It’s not just about how much you spend. It’s also about how smart you spend,” the email advised Mr. Bolton to say.

“One way we’re doing that is by enlisting an outside firm” — Cambridge Analytica — “to provide deepdive research into who makes up our audience of target voters,” it continued. “We are producing ads specifically designed for voters of a certain personality and demographic profile. So if you’re a young woman in New Hampshire with a specific kind of personality and a particular set of issues that you care about, our research allows us to connect with that voter in a way that truly resonates with her.”

The subject line of the email: “Did Bannon come back to you on this?”

 

Facebook is facing its biggest test ever—and its lack of leadership could sink the company

• Facebook’s reaction to a year of scandal has vacillated between defensive cluelessness and aloof silence.
• Users are getting the message that information they post on Facebook can be used in ways they did not intend, and usage is starting to decline.
• Meanwhile, executives are selling shares like crazy, including a plan by Mark Zuckerberg to sell almost $13 billion worth of shares by mid-2019.

March 18, 2018

by Matt Rosof

CNBC

Facebook is facing an existential test, and its leadership is failing to address it.

Good leaders admit mistakes, apologize quickly, show up where they’re needed and show their belief in the company by keeping skin in the game.

Facebook executives, in contrast, react to negative news with spin and attempts to bury it. Throughout the last year, every time bad news has broken, executives have downplayed its significance. Look at its public statements last year about how many people had seen Russian-bought election ads — first it was 10 million, then it was 126 million.

Top execs dodged Congress when it was asking questions about Russian interference. They are selling their shares at a record clip.

The actions of Facebook execs now recall how execs at Nokia and Blackberry reacted after the iPhone emerged. Their revenues kept growing for a couple years — and they dismissed the threats. By the time users started leaving in droves, it was too late.

There’s no outside attacker bringing Facebook down. It’s a circular firing squad that stems from the company’s fundamental business model of collecting data from users, and using that data to sell targeted ads. For years, users went along with the bargain. But after almost a year of constant negative publicity, their patience may be waning.

Facebook did not initially respond to questions or a request for comment from CNBC.

The drumbeat

For more than a year now, Facebook has been deflecting stories about how its platform was used during the 2016 presidential election.

Some of this activity — like Facebook embedding workers with the Trump campaign to tell them how to advertise more effectively — was perfectly legal, and in line with normal business practices. A lot of these tactics would probably have drawn no scrutiny if Donald Trump hadn’t surprised everybody by winning an election that all the polls showed him losing.

Other activity was against Facebook’s policies, or outright illegal. Most notably, a U.S. grand jury recently indicted 13 Russian nationals for conducting a disinformation campaign on American soil intended to further political divisions in the country and sway the election toward Trump. Their tactics included using Facebook groups to organize divisive political protests and buying targeted ads.

CEO and founder Mark Zuckerberg has remained aloof throughout the whole sequence of events.

He addresses some of these issues on personal Facebook posts, but seldom talks to the press about them. Last year, he spent most of the year doing photo ops with people around America, but did not show up when Congress asked questions about how the Russians used Facebook to influence the 2016 election.

This year, he announced his annual personal challenge would be fixing Facebook — in other words, doing his job as the CEO of a publicly traded company worth more than $500 billion. In past years, he’s taught himself Mandarin and hunted his own food.

The spin

Over the weekend, Facebook gave a case study in how the company reacts inappropriately to negative news.

On Friday night, Facebook made a surprise announcement that the company had suspended a political analytics research firm, Cambridge Analytica. The firm was funded by large Republican donor Robert Mercer, and Trump’s campaign used it to target ads on Facebook.

In its Friday post, Facebook claimed it had discovered new evidence that Cambridge Analytica had not deleted data about Facebook users passed to it by a Russian-American researcher, who had collected it through a personality quiz that 270,000 Facebook users took. The data included information like the cities where users lived and what they had “liked” on Facebook.

It was against Facebook’s terms of use for the researcher to pass the data along. Cambridge Analytica had told Facebook it had deleted the data back in 2015, but Facebook said it had received recent reports to the contrary, according to the blog post.

(Cambridge Analytica has countered the allegations, saying it was in compliance with Facebook’s guidelines, and that no data collected through the app was used in the Trump campaign.)

But as is often the case in political scandal, the problem isn’t so much the original action, but the cover-up. Or in this case, the spin.

It turns out that Facebook didn’t just spontaneously decide to ban the political research firm. It was actually trying to get ahead of two bombshell reports, in the New York Times and The Observer (the Sunday edition of U.K. paper The Guardian). The publications detailed exactly how Cambridge Analytica had collected information about Facebook users in a bid to target them with political messages.

Facebook knew about these news stories for some time. It also appears that the company was trying to squelch the reports.

The Times report claimed that, in private conversations with the newspaper, Facebook “downplayed the scope of the leak and questioned whether any of the data still remained out of its control.” The Guardian wrote that “Facebook’s external lawyers warned the Observer it was making ‘false and defamatory’ allegations, and reserved Facebook’s legal position.”

The stories went ahead anyway. Once they were published, Facebook executives immediately took to Twitter to defend the company, insisting that this was not a “breach.”

In tweets that were later deleted, Facebook chief security officer Alex Stamos called the stories “important and powerful,” while insisting that it was “incorrect to call it a ‘breach’ under any reasonable definition of the term.”

Another senior Facebook exec, Andrew Bosworth, echoed that claim, saying it was “unequivocally not a data breach.”

So far, more than 24 hours after the stories, Zuckerberg and his number-two, COO Sheryl Sandberg, have not responded.

Missing the point

The Facebook executives who responded are correct — there was no security breach. Users gave their information willingly. Moreover, Facebook has since put better security controls for apps in place, so users can more easily control what information apps are gathering and how they’re using it.

But they’re missing the point.

Facebook users are slowly learning that almost anybody can use Facebook to collect detailed information about them, and that — at least some of the time — Facebook cannot control where this information flows, or how it is used. Using Facebook is like writing your life story down on a piece of paper, then taping it to a lamppost.

Journalists and privacy advocates may roll their eyes at this “revelation” — they’ve been warning people about Facebook and privacy since its inception.

Users mostly ignored these warnings. They wanted to share photos, connect with old friends, play games, take quizzes and watch videos, and Facebook gave them a simple way to do it. More than 2 billion people around the world now use the 14-year-old service, and Facebook sold nearly $40 billion worth of ads last year.

But things are beginning to change. There’s a growing sense that Facebook has become creepy instead of fun.

A lot of people are noticing that the ads on Facebook and Facebook-owned Instagram are so precisely targeted, they’re sure the company is eavesdropping on their conversations through their phone microphones. (Facebook swears it is not — CNBC’s Michelle Castillo has a great explanation of what is probably going on.)

More to the point, people are starting to curb their Facebook usage. In the fourth quarter, for the first time ever, the number of people in North America who used Facebook every day dropped from the previous year.

Also, Zuckerberg told investors on the company’s earnings call that the company saw a 5 percent drop in time spent on Facebook during the quarter. The company claimed that this reduced engagement was because of some technical changes that Facebook made to crack down on low-quality content and give users a more positive experience.

These are just two small metrics. Facebook is still growing in many regions and by many other measurements.

But still: Fewer people using Facebook every day in one region, and spending less time on it. That’s never happened before.

For the time being, advertisers are grumbling about Facebook and warning their clients to stay away from certain ad products, but they’re still putting their money there — with an audience over 2 billion and some of the most accurate ad targeting available, Facebook is still impossible to ignore.

But if usage continues to decline, advertisers will start eventually follow. And there are plenty of hungry smaller competitors — Twitter and Snap, particularly — who would be happy to take some of that money.

Executive stock sales not reassuring

Meanwhile, Facebook executives are not exactly sending a reassuring message to investors by unloading their shares at a rapid clip.

Last summer, after Zuckerberg’s plan to create another class of stock to solidify his control of the company foundered, he announced he’d begin selling off up to 75 million shares (about 18 percent of his stake), worth nearly $13 billion, by mid-2019. The money will support the Chan Zuckerberg Initiative (CZI), his other company devoted to good works.

Those sales are well underway. In February he sold nearly $500 million worth of shares, and he’s on pace to sell that much or more in March. By way of comparison, he sold only about $1.6 billion worth to fund CZI over the last two years.

Why now? Zuckerberg is 33 years old — far from retirement. What exactly is CZI doing that requires such a massive investment? Amazon CEO Jeff Bezos is building rocket ships to explore space with his other company Blue Origin, and he only needs to spend $1 billion a year.

Other top executives are also selling in massive amounts. Jan Koum, who founded the messaging app WhatsApp, which Facebook bought in 2014 for $19 billion, sold $2.8 billion worth of shares last year — more than any exec at any major tech company. (Amazon CEO Jeff Bezos sold $2 billion of stock last year, in part to fund Blue Origin. Nobody else is close.)

Sandberg sold over $300 million, which pales in comparison to her colleagues but is still unusually large among officers of top tech companies.

Facebook stock is up over 80 percent in the last 12 months. Perhaps these execs are just taking gains, as any normal employee with stock compensation would be advised to do.

But these are not normal employees. They’re the leaders of the company.

Other leaders keep skin in the game during difficult times — think of how Microsoft CEO Steve Ballmer  held on to most of his stock throughout his tenure, even as Microsoft faced expensive antitrust lawsuits and growing competitive threats, or how Twitter CEO Jack Dorsey bought shares in 2017 when many investors had written the company off.

Facebook is facing real problems. Instead of giving answers to those problems, top execs are selling, spinning and staying silent.

That’s not leadership. And when leaders fail to lead, companies fail.

 

A Madman on the National Security Council

John Bolton is that most ludicrous of creatures: the unreconstructed Bush-era foreign policy thinker.

March 23, 2018

by Matt Purple

The American Conservative

Would that John Bolton were only a clown. The mustachioed alleged diplomat, briefly of the Bush administration—and initially criticized as too controversial even for that team—has now been appointed national security advisor. That position will give him the president’s ear on matters of foreign policy, as well as control over which other administration principals enjoy such access. Donald Trump pledged that if elected he would be a different kind of Republican president, and he’s delivered: under the last GOP administration, Bolton occupied a slightly lower-ranking position than he does now.

Bolton is indeed no circus act: he’s one of the sharpest and most dangerous national security operatives in Washington. To take just one example, last summer, Trump made it known that he was considering pulling out of the Iran nuclear deal, a campaign promise he wanted fulfilled but that had been discouraged by his then-secretary of state Rex Tillerson. Sensing an opportunity, Bolton wrote an essay for National Review explaining in breezy (i.e. Trump-digestible) terms just how to abrogate the agreement. The piece is chockablock with nonsense: at one point it claims sans any evidence that the Obama administration believed the JCPOA was “disadvantageous to the United States.” It also offers scant evidence to underpin its claim that Iran was in violation of the deal, an assertion that’s been repeatedly repudiated by the authorities at the IAEA. But the truth wasn’t the point: the piece was meant to water a seed in the president’s mind, to lend expert opinion to Trump’s burning preference that the JCPOA be reversed.

That Bolton did this shouldn’t surprise anyone because this is how Bolton works: shrewdly and always towards the goal of more war. As Gareth Porter detailed in a rigorously reported piece for TAC, during his tenure under Bush, Bolton maneuvered behind the scenes to pump up a pretext for conflict between the United States and Iran. Among his methods was to pretend that satellite images of a military base at Parchin demonstrated Iranian nuclear experimentation. That supposed smoking gun is cited to this day by neocons as proof of Iran’s atomic dreams.

What makes Bolton unique among hawkish operators is that he doesn’t feel the need to hide any of these machinations. The man wants to pulverize Tehran and he’s not afraid to say so. In 2015, Bolton wrote a piece for the New York Times subtly titled “To Stop Iran’s Bomb, Bomb Iran.” Never mind that the adverbial clause in that sentence had no definitive evidence in its favor; it was off to war because, as Bolton put it, “extensive progress in uranium enrichment and plutonium reprocessing reveal [Iran’s] ambitions” (imagine if that standard was applied universally). The coming operation, Bolton promised, would be akin to Operation Opera in 1981 when Israel destroyed a single Iraqi nuclear reactor, except that this one would take out multiple installations at Natanz and Fordow and Arak and Isfahan and…

The details never add up because they’re not supposed to. Bolton’s wheelhouse has never been the tactical nitty-gritty; he’s an ideologue whose credo dogmatizes violence against enemies regardless of consequences or cost. On the Iraq war, he declared in 2015, “I still think the decision to overthrow Saddam was correct.” On Libya, in 2011 before the Obama administration launched its calamitous intervention, Bolton recommended that the United States assassinate Moammar Gaddafi. On North Korea, he innocently suggested there was a “legal case” for a first strike. On Russia, you will not be surprised to learn that he thinks Trump needs to get tougher, including launching a cyber-attack that would be “decidedly disproportionate” to anything the Russians have done. He also thinks it’s time to revisit the “One-China Policy” that prevents us from antagonizing Beijing by recognizing an independent Taiwan.

There are all manner of vexatious wrinkles amidst those pronouncements. For instance, a foreign policy realist might note that the deposal of Iraq’s regime and the ascendance of Shiite power in Baghdad, which Bolton supported, greatly availed Iran, which Bolton detests. But again, such nuances are dwarfed by the big-picture concepts in which Bolton deals, like American Power and Dictatorships and Strength. Most foreign policy gurus, despite supporting generally hawkish policies, have at least disowned the war in Iraq and made some perfunctory efforts to adjust for its failures. Not Bolton, who is that most ludicrous of creatures: the unreconstructed Bush-era thinker. He belongs behind a glass display in the American History Museum, not enjoying a second wind at the apex of the federal bureaucracy.

But alas, the president himself has spoken. There are conditions to Bolton’s employment. CNN is reporting that Bolton promised Trump—quote—“he wouldn’t start any wars” if he became national security advisor, and surely that’s a promise he’ll keep. Bolton, after all, has never started (or fought in) a war in his life. What he will do is counsel Trump to take the most belligerent course of action possible in every given situation. Up first will be the Iran deal, which, with Bolton now at NSC and Mike Pompeo at State, seems certain to be the subject of a hardened stance from the White House, which will further isolate America from its allies, as the Europeans, more commercially entangled with Tehran than we are, decline to go along.

That brings us back to Trump, the insurgent who won the 2016 election pledging to repudiate the George W. Bush legacy and keep the United States out of foreign wars. It’s a show of both neocon strength and Trump impressionability that a mere year and a half later the most warmongering personality in Washington has already clambered all the way up to national security advisor. I’m new here at TAC, but I’m quickly learning that part of the arrangement is that we lose 100 battles for every one we win.

 

Stormy Daniels: porn star primed to tell all about alleged Trump affair

The adult star who flirted with a Senate run goes public on Sunday night in an interview that could increase the pressure on the president

March 24, 2018

by Lucia Graves in Washington

The Guardian

Stormy Daniels got her start in politics the same way most people get a used dresser – from a post on Craigslist.

“Seeking a female candidate to challenge David Vitter in the Republican primary for the United States Senate in 2010. We are looking for a candidate with a history in some aspect of the adult entertainment industry,” read the ad placed in 2008.

Vitter, the Republican senator from Louisiana who championed family values, had been ensnared in a prostitution scandal and some cheeky pranksters wanted to troll him on it.

But soon, what started as a gonzo prank idea was turning into something if not serious then at least real. “WE HAVE FOUND OUR PORN STAR,” read a follow-up post.

The porn star in question was Daniels, and in no time she was grabbing national headlines with her slogan that promised “Screwing People Honestly” – unlike her male opponent.

As wild as that was, that turned out to only be the prelude to Stormy Daniels’ main event. She currently faces a much more powerful male adversary, the president of the United States, as she prepares to go public on Sunday in a TV interview to give details about her alleged 2006 affair with Donald Trump.

The interview with Anderson Cooper, which is expected to break viewership records for CBS’s venerable 60 Minutes news magazine show, is easy to dismiss as frivolity. But her allegations, and the legal maneuvers Trump’s allies have employed to try to keep them quiet, could have implications spanning not just sex and sexual politics – but campaign finance laws and violence against women.

“You don’t know who become the pivotal players in history,” said Jonathan Tilove, who chronicled Daniels’ first steps in politics as a correspondent for the New Orleans Times-Picayune.

‘My daughter’s name is Stephanie, not Stormy’

Born Stephanie Gregory Clifford in Baton Rouge in 1979, Daniels grew up with her mother, who worked as a trucking company manager. Her dad was seldom around. As a girl she loved dancing and horses, but if her parents hoped she might pursue a childhood dream of becoming a vet, it was not to be. She left home and began stripping at 17; by 21 she was performing in adult films under the stage name Stormy Daniels.

She considers it her real name, but her mother, Sheila Gregory, can’t abide it.

“My daughter’s name is Stephanie, not Stormy,” she said when the Guardian reached her at home Tuesday. “Please forgive me if you think I’m being rude,” she added, before hanging up.

Gregory may not have made peace with her daughter’s career, but by any measure, Daniels is extremely successful at what she does, both in front of the camera and behind it. She started directing in her mid-20s, and won best new starlet at the 2004 AVN awards, referred to as the “the Oscars of porn”. The following year, she made a number of cameos in mainstream film, including Judd Apatow’s blockbuster hit The 40-Year-Old Virgin. (On social media, Apatow has said he admires her work.)

Her platform, thin though it was, was socially liberal and fiscally conservative. But mainly it was about trolling Vitter, and she was a master provocateur. Asked if she was pro-life, for instance, she said she was “pro-condom”. Asked if she really just wanted to embarrass Vitter, she replied flatly: “I don’t see how I could possibly embarrass him more than he’s already embarrassed himself.”

Most notable though, was her ability to stay in the public eye, despite her never formally entering the race. “It was clear she was smart, prepared and comfortable with the media frenzy,” said Democratic operative Bradley Beychok, who met with Daniels during a “listening tour” in Baton Rouge.

The Craigslist post turned what should have been a low-key election into a national spectacle, and Louisiana is just quirky enough of a place that national election forecaster Nate Silver didn’t rule her out. “She’s certainly not without her, um, charms,” Silver wrote at the time.

Daniels’ campaign would prove quite literally explosive. At the height of her political momentum, the Audi belonging to her political manager burst into flames, and though no one was ever apprehended, blurry surveillance footage showed someone loitering around the car and getting into it shortly before it detonated.

Soon after that, and amid a domestic violence arrest, Daniels opted out of the race. Vitter would go on to win, riding the wave of anti-Obama backlash in 2010. But when he ran for governor a few years later, his Democratic opponent won in an upset by reviving the prostitution scandal that Daniels had worked to highlight.

Target on her back

Today, as she prepares to take on the president, Daniels is – improbably, perhaps, at 39 – on top of her industry, with a confidence and acerbic Twitter profile to match.

Her second foray into politics began in February, when the Wall Street Journal reported that Trump’s longtime personal lawyer, Michael Cohen, had paid Daniels $130,000 to keep quiet about her story just before the 2016 election.

In response to the bombshell, the tabloid In Touch Weekly published an interview with Daniels it had been sitting on since 2011, kept under wraps due to legal threats from Trump’s circle. In the interview, Daniels describes in explicit detail a consensual, nearly year-long sexual dalliance with Trump, allegedly begun weeks after his wife Melania gave birth to their son, Barron.

Sunday’s interview, however, will be the first time Daniels has spoken about the matter since Trump forged his own political career, and the first time she will address the efforts to muzzle her, which she has been fighting in court.

Details from Daniels’ account further shape the narratives that first emerged about Trump and his relationship with women during the 2016 election. More than a dozen women came forward to accuse Trump of sexual harassment and assault in the lead-up to the election. And while Daniels’ alleged affair with Trump was consensual, the context is nonetheless informative about how he views women.

And Daniels is not alone. Another adult film star, Jessica Drake, who accused Trump of trying to buy sex from her, claims she also has “confidential information” about Trump’s relationship with Daniels, according to a 2016 non-disclosure agreement or NDA.

On Tuesday, the former Playboy model Karen McDougal became the second woman this month to challenge Trump’s efforts to silence her, announcing she was suing the president to be released from a 2016 legal agreement that restricted her ability to speak about her alleged affair with the future president.

Separately, a judge this month ruled that a defamation suit brought by former Apprentice star Summer Zervos, who accused Trump of harassing her, may go forward, clearing the path for other sexual misconduct allegations against the president to be aired.

“It is settled that the president of the United States has no immunity and is ‘subject to the laws’ for purely private acts,” the judge declared, citing the precedent set by a lawsuit brought against Bill Clinton by his alleged mistress Paula Jones two decades ago.

Meanwhile, the president, who has denied all the claims brought against him, remains committed to keeping Daniels quiet.

Daniels’ legal team, in a clever bit of maneuvering, has offered to pay back every dollar she was paid in the NDA for the chance to speak freely. Her team claims the agreement is null and void because Trump never signed it, and they are moving ahead with the CBS interview despite a threat from Trump’s camp of up to $20m in damages.

Daniels now has a target on her back, and her lawyer has said she’s been physically threatened and is under 24-hour security. But her background in adult entertainment may give her a rare liberty other women Trump has tried to shame into silence do not possess. Namely, she is not easily embarrassed and she doesn’t care if people don’t like her.

“Slut and whore are words used by people who feel threatened,” she responded to a troll on Twitter who accused her of promiscuity. “I find power in them.”

 

China warns U.S. it will defend own trade interests

March 23, 2018

by Ryan Woo and Hallie Gu

Reuters

BEIJING (Reuters) – The United States has flouted trade rules with an inquiry into intellectual property and China will defend its interests, Vice Premier Liu He told U.S. Treasury Secretary Steven Mnuchin in a telephone call on Saturday, Chinese state media reported.

The call between Mnuchin and Liu, a confidante of President Xi Jinping, was the highest-level contact between the two governments since U.S. President Donald Trump announced plans for tariffs on up to $60 billion of Chinese goods on Thursday.

The deepening rift has sent a chill through financial markets and the corporate world as investors predicted dire consequences for the global economy should trade barriers start going up.

Several U.S. chief executives attending a high-profile forum in Beijing on Saturday, including BlackRock Inc’s Larry Fink and Apple Inc’s Tim Cook, urged restraint.

In his call with Mnuchin, Liu, a Harvard-trained economist, said China still hoped both sides would remain “rational” and work together to keep trade relations stable, the official Xinhua news agency reported.

U.S. officials say an eight-month probe under the 1974 U.S. Trade Act has found that China engages in unfair trade practices by forcing American investors to turn over key technologies to Chinese firms.

However, Liu said the investigation report “violates international trade rules and is beneficial to neither Chinese interests, U.S. interests nor global interests”, Xinhua cited him as saying.

In a statement on its website, the office of the U.S. Trade Representative Robert Lighthizer said it had filed a request – at the direction of Trump – for consultations with China at the World Trade Organization to address “discriminatory technology licensing agreements”.

China’s commerce ministry expressed regret at the filing on Saturday, and said China had taken strong measures to protect the legal rights and interests of both domestic and foreign owners of intellectual property.

COUNTER MOVES

During a visit to Washington in early March, Liu had requested Washington set up a new economic dialogue mechanism, identify a point person on China issues, and deliver a list of demands.

The Trump administration responded by telling China to immediately shave $100 billion off its record $375 billion trade surplus with the United States. Beijing told Washington that U.S. export restrictions on some high-tech products are to blame.

“China has already prepared, and has the strength, to defend its national interests,” Liu said on Saturday.

According to an editorial by China’s state-run Global Times, it was Mnuchin who called Liu.

Firing off a warning shot, China on Friday declared plans to levy additional duties on up to $3 billion of U.S. imports in response to U.S. tariffs on steel and aluminum, imposed after a separate U.S. probe.

Zhang Zhaoxiang, senior vice president of China Minmetals Corp [CHMIN.UL], said that while the state-owned mining group’s steel exports to the U.S. are tiny, the impact could come indirectly.

“China’s direct exports to the U.S. are not big. But there will be some impact due to our exports via the United States or indirect exports,” Zhang told reporters on the sidelines of the China Development Forum in Beijing on Saturday.

Global Times said Beijing was only just beginning to look at means to retaliate.

“We believe it is only part of China’s countermeasures, and soybeans and other U.S. farm products will be targeted,” the widely-read tabloid said in a Saturday editorial.

Wei Jianguo, vice chairman of Beijing-based think tank China Centre for International Economic Exchanges, told China Daily that Beijing could impose tariffs on more U.S. products, and is considering a second and even third list of targets.

Possible items include aircraft and chips, Wei, a former vice commerce minister, told the newspaper, adding that tourism could be a possible target.

SOYBEANS, AUTOS, PLANES

The commerce ministry’s response had so far been “relatively weak”, respected former Chinese finance minister Lou Jiwei said at the forum.

“If I were in the government, I would probably hit soybeans first, then hit autos and airplanes,” said Lou, currently chairman of the National Council for Social Security Fund.

U.S. farm groups have long feared that China, which imports more than third of all U.S. soybeans, could slow purchases of agricultural products, heaping more pain on the struggling U.S. farm sector.

U.S. agricultural exports to China stood at $19.6 billion last year, with soybean shipments accounting for $12.4 billion.

Chinese penalties on U.S. soybeans will especially hurt Iowa, a state that backed Trump in the 2016 presidential elections. Boeing jets have also been often cited as a potential target by China.

China and the U.S. had benefited by globalization, Blackrock’s Larry Fink said at the forum.

“I believe that a dialogue – and maybe some adjustments in trade and trade policy – can be in order. It does not need to be done publicly; it can be done privately,” he said.

Apple’s Tim Cook called for “calm heads” amid the dispute.

The sparring has cast a spotlight on hardware makers such as Apple, which assemble the majority of their products in China for export to other countries.

Electrical goods and tech are the largest U.S. import item from China.

Some economists say higher U.S. tariffs will lead to higher costs and ultimately hurt U.S. consumers, while restrictions on Chinese investments could take away jobs in America.

“I don’t think local governments in the United States and President Trump hope to see U.S. workers losing their jobs,” Sun Yongcai, general manager at Chinese railway firm CRRS Corp, which has two U.S. production plants, said at the forum.

Reporting by Ryan Woo and Hallie Gu; additional reporting by Ben Blanchard, Kevin Yao, Matthew Miller and Cate Cadell; Editing by Richard Pullin

 

The Monster MERS Mortgage Fraud

Millions of Americans can never own title to their homes

March 24, 2018

by Christian Jürs

MERS = Mortgage Electronic Registration Inc.holds approximately 60 million Amerrican mortgages and is a Delaware corporation whose sole shareholder is Mers Corp. MersCorp and its specified members have agreed to include the MERS corporate name on any mortgage that was executed in conjunction with any mortgage loan made by any member of MersCorp. Thus in place of the original lender being named as the mortgagee on the mortgage that is supposed to secure their loan, MERS is named as the “nominee” for the lender who actually loaned the money to the borrower. In other words MERS is really nothing more than a name that is used on the mortgage instrument in place of the actual lender. MERS’ primary function, therefore, is to act as a document custodian. MERS was created solely to simplify the process of transferring mortgages by avoiding the need to re-record liens – and pay county recorder filing fees – each time a loan is assigned. Instead, servicers record loans only once and MERS’ electronic system monitors transfers and facilitates the trading of notes. It has very conserbatively estimated that as of February, 2010, over half of all new residential mortgage loans in the United States are registered with MERS and recorded in county recording offices in MERS’ name

MersCorp was the created in the early 1990’s by the former C.E.O.’s of Fannie Mae, Freddie Mac, Indy Mac, Countrywide, Stewart Title Insurance and the American Land Title Association. The executives of these companies lined their pockets with billions of dollars of unearned bonuses and free stock by creating so-called mortgage backed securities using bogus mortgage loans to unqualified borrowers thereby creating a huge false demand for residential homes and thereby falsely inflating the value of those homes. MERS marketing claims that its “paperless systems fit within the legal framework of the laws of all fifty states” are now being vetted by courts and legal commentators throughout the country.

The MERS paperless system is the type of crooked rip-off scheme that is has been seen for generations past in the crooked financial world. In this present case, MERS was created in the boardrooms of the most powerful and controlling members of the American financial institutions. This gigantic scheme completely ignored long standing law of commerce relating to mortgage lending and did so for its own prsonal gain. That the inevitable collapse of the crooked mortgage swindles would lead to terrible national reprecussions was a matter of little or no interest to the upper levels of America’s banking and financial world because the only interest of these entities was to grab the money of suckers, keep it in the form of ficticious bonuses, real estate and very large accounts in foreign banks.. The effect of this system has led to catastrophic metldown on both the American and global economy.

MERS, it has clearly been proven in many civil cases, does not hold any promissory notes of any kind.. A party must have possession of a promissory note in order to have standing to enforce and/or otherwise collect a debt that is owed to another party. Given this clear-cut legal definition,  MERS does not have legal standing to enforce or collect on the over 60 million mortgages it controls and no member of MERS has any standing in an American civil court.

MERS has been taken to civil courts across the country and charged with a lack of standing in reprossion issues. When the mortgage debacle initially, and invevitably, began, MERS always rotinely broght actions against defauilting mortgage holders purporting to represent the owners of the defaulted mortgages but once the courts discovered that MERS was only a front organization that did not hold any deed nor was aware of who or what agencies might hold a deed, they have been routinely been denied in their attempts to force foreclosure.  In the past, persons alleging they were officials of MERS in foreclosure motions, purported to be the holders of the mortgage, when, in fact, they nor only were not the holder of the mortgage but, under a court order, could not produce the identity of the actual holder. These so-called MERS officers have usually been just employees of entities who are servicing the loan for the actual lender. MERS, it is now widely acknowledged by the courty, has no legal right to foreclose or otherwise collect debt which are evidenced by promissory notes held by someone else.

The American media routinely identifies MERS as a mortgage lender, creditor, and mortgage company, when in point of fact MERS has never loaned so much as a dollar to anyone, is not a creditor and is not a mortgage company. MERS is merely a name that is printed on mortgages, purporting to give MERS some sort of legal status, in the matter of a loan made by a completely different and almost always,a totally unknown enitity.

The infamous collapse of the American housing bubble originated, in the main, with one Angelo Mozilo, CEO of the later failed Countrywide Mortgage.

Mozilo started working in his father’s butcher shop, in the Bronx, when he was ten years old. He graduated from Fordham in 1960, and that year he met David Loeb.. In 1968, Mozilo and Loeb created a new mortgage company, Countrywide, together. Mozilo believed the company should make special efforts to lower the barrier for minorities and others who had been excluded from homeownership. Loeb died in 2003

In 1996, Countrywide created a new subsidiary for subprime loans.

 

Countrywide Financial’s former management

• Angelo R. Mozilo, cofounder, chairman of the board, chief executive officer
• David S. Loeb, cofounder, President and Chairman from 1969 to 2000
• David Sambol, president, chief operating officer, director
• Eric P. Sieracki, chief financial officer, executive managing director
• Jack Schakett, executive managing director, chief operating officer
• Kevin Bartlett, executive managing director, chief investment officer
• Andrew Gissinger, executive managing director, chief production officer, Countrywide Home Loans[14]
• Sandor E. Samuels, executive managing director, chief legal officer and assistant secretary
• Ranjit Kripalani, executive managing director and president, Capital Markets
• Laura K. Milleman, senior managing director, chief accounting officer
• Marshall Gates, senior managing director, chief administrative officer
• Timothy H. Wennes, senior managing director, president and chief operating officer, Countrywide Bank FSB
• Anne D. McCallion, senior managing director, chief of financial operations and planning
• Steve Bailey, senior managing director of loan administration, Countrywide Home Loans

The standard Countrywide procedure was to openly solicit persons who either had no credit or could not obtain it, and, by the use of false credit reports drawn up in their offices, arrange mortgages. The new home owners were barely able to meet the minimum interest only payments and when, as always happens, the mortgage payments are increased to far, far more than could be paid, defaults and repossessions were inevitable. Countrywide sold these mortgages to lower-tier banks which in turn, put them together in packages and sold them to the large American banks. These so-called “bundled mortgages” were quickly sold these major banking houses to many foreign investors with the comments that when the payments increased, so also would the income from the original mortgage. In 1996, Countrywide created a new subsidiary for subprime loans.

At one point in time,Countrywide Financial Corporation was regarded with awe in the business world. In 2003, Fortune observed that Countrywide was expected to write $400 billion in home loans and earn $1.9 billion. Countrywide’s chairman and C.E.O., Angelo Mozilo, did rather well himself. In 2003, he received nearly $33 million in compensation. By that same year, Wall Street had become addicted to home loans, which bankers used to create immensely lucrative mortgage-backed securities and, later, collateralized debt obligations, or C.D.O.s—and Countrywide was their biggest supplier. Under Mozilo’s leadership, Countrywide’s growth had been astonishing.

He was aiming to achieve a market share—thirty to forty per cent—that was far greater than anyone in the financial-services industry had ever attained. For several years, Countrywide continued to thrive. Then, inevitably, in 2007, subprime defaults began to rocket upwards , forcing the top American bankers to abandoned the mortgage-backed securities they had previously prized. It was obvious to them that the fraudulent mortgages engendered by Countrywide had been highly suceessful as a marketinig program but it was obvious to eveyone concerned, at all levels, that the mortgages based entirely on false and misleading credit information were bound to eventually default. In August of 2007, the top American bankers cut off

Countrywide’s short-term funding, which seriously hindered its ability to operate, and in just a few months following this abandonment, Mozilo was forced to choose between bankruptcy or selling out to the best bidder.. In January, 2008, Bank of America announced that it would buy the company for a fraction of what Countrywide was worth at its peak. Mozilo was subsequently named a defendant in more than a hundred civil lawsuits and a target of a criminal investigation. On June 4th, 2007 the S.E.C., in a civil suit, charged Mozilo, David Sambol, and Eric Sieracki with securities fraud; Mozilo was also charged with insider trading. The complaint formalized a public indictment of Mozilo as an icon of corporate malfeasance and greed.

In essence, not only bad credit risks were used to create and sell mortgages on American homes that were essentially worthless. By grouping all of these together and selling them abroad, the banks all made huge profits. When the kissing had to stop, there were two major groups holding the financial bag. The first were the investors and the second were, not those with weak credit, but those who had excellent credit and who were able, and willing to pay off their mortgages.

Unfortunately, as no one knows who owns the title to any home, when the legitimate mortgage holder finally pays off his mortgage, or tries to sell his house, a clear title to said house or property cannot ever be found so, in essence, the innocent mortgage payer can never own or sell his house. This is a terrible economic time bomb quietly ticking away under the feet of the Bank of America and if, and when, it explodes, another bank is but a fond memory.