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TBR News November 8, 2016

Nov 08 2016

A Compendium of Various Official Lies, Business Scandals, Small Murders, Frauds, and Other Gross Defects of Our Current Political, Business and Religious Moral Lepers.

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”- Napoleon Bonaparte, 1815


“Corrupted by wealth and power, your government is like a restaurant with only one dish. They’ve got a set of Republican waiters on one side and a set of Democratic waiters on the other side. But no matter which set of waiters brings you the dish, the legislative grub is all prepared in the same Wall Street kitchen”. – Huey Long


“I fired [General MacArthur] because he wouldn’t respect the authority of the President. That’s the answer to that. I didn’t fire him because he was a dumb son of a bitch, although he was, but that’s not against the law for generals. If it was, half to three-quarters of them would be in jail “- Harry S Truman


“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.” -Thomas Jefferson.


“Democracy is the art of running the circus from the monkey cage”

– H.L. Mencken


 “For a quarter of a century the CIA has been repeatedly wrong about every major political and economic question entrusted to its analysis.” 

-Senator Daniel Patrick Moynihan

The New York Times, 1991.


Don’t tell a lie! Some men I’ve known
Commit the most appalling acts,
Because they happen to be prone
To an economy of facts;
And if to lie is bad, no doubt
’Tis even worse to get found out!


My children, never, never steal!
To know their offspring is a thief
Will often make a father feel
Annoyed and cause a mother grief;
So never steal, but, when you do,
Be sure there’s no one watching you.


The Wicked flourish like the bay,
At Cards or Love they always win,
Good Fortune dogs their steps all day,
They fatten while the Good grow thin.
The Righteous Man has much to bear;

    The Bad becomes a Bullionaire!

 The Voice of the White House

Washington, D.C.  November 8, 2016: “A projected massive voter turn-out today indicates strong public opinions gendered by the destructive campaigns. The American media, bought and paid for, are still trumpeting a massive Clinton victory but various polls not connected with the media, show otherwise. It will be an interesting day indeed!”

Amid Clinton Controversy, FBI Documents Show Why Americans Should Worry About Intelligence Gathering

November 7 201

by Cora Currier

The Intercept

FBI Director James Comey took some heat off of Hillary Clinton Sunday when he said that recently discovered emails do not warrant new action over her handling of classified information. But questions linger around Comey, who reanimated the investigation into Clinton just before the election — questions about the power now concentrated in his organization and about its gathering and handling of sensitive intelligence.

Comey’s ill-timed move prompted a round of comparisons between Comey and his notorious predecessor J. Edgar Hoover, who made it the bureau’s mission to spy on, discredit, and blackmail civil rights leaders, leftists, anti-war protesters, and his personal political opponents. The Atlantic wrote the affair suggests that “some at the FBI once again feel untouchable.” Journalist Tim Weiner, author of a recent book about the FBI, wrote in The New York Times that the FBI “cannot and must not revert to its old role under Hoover as an instrument of political warfare.” Sen. Ron Wyden, D-Ore., said that Comey’s “leadership failures” were “another reminder we can’t let intelligence agencies say ‘trust us’ and then give them a blank check to probe into Americans’ lives.”

Two internal policy documents obtained by The Intercept make clear that, whatever Comey’s motivations, his critics are right to worry about the bureau’s mounting ambition and about the widening scope of its intelligence gathering. Under Comey and the previous director Robert Mueller, the bureau has transformed its domestic intelligence operations in the name of fighting terrorism, building up an army of some 15,000 informants and deploying those informants in recent years not only for aggressive sting operations but also to collect intelligence not tied to any particular criminal case.

The documents, one of which dates to August 2013, just before Comey was sworn in, clearly illustrate this transformation as they make the case that the FBI should maintain and expand its human intelligence (or “HUMINT”) efforts.  They also show the FBI jostling for “primacy” with the CIA and other intelligence agencies.

Competing with the CIA

One memo, a “Domestic HUMINT Vision Proposal” from an advisory council to the FBI’s Directorate of Intelligence, states that the FBI’s “policies and procedures need to mirror those under which US Intelligence Community (USIC) partners operate.” The advisory council stood up in 2011, according to the FBI’s 9/11 Review Commission report, and the vision proposal, from references in the text, appears to date to some time after 2012.

“If the FBI fails to capitalize on this opportunity, it runs the risk the Central Intelligence Agency (CIA) or another USIC partner, e.g., Department of Homeland Security, requesting the Director of National Intelligence revise the current order to place themselves in the position of primacy with regard to domestic recruitment and [foreign intelligence] collection,” it continues.

The vision proposal, classified “Secret,” also calls for “an expansion and enhancement of its Confidential Human Source (CHS) base.” It says that agents need to “overcome the cultural bias against pro-active CHS recruiting outside of cases,” and suggests assigning each human intelligence squad a dedicated analyst to work on identifying potential sources.

Another document, a “Senior Intelligence Officer Essay” from August 2013 (which was cited, but not quoted from, in the 9/11 Review Commission’s report), outlines a cultural shift from an organization that cultivated sources for “active investigations” to one aimed at “strategic threat issues.”

The essay’s author writes that a HUMINT push that began in 2008 has helped “cement the FBI’s role as the primary collector of domestic intelligence,” taking “advantage of the enormous amounts of intelligence available in the United States that can be collected at low cost and low risk.”

“The concept of an expanded informant base, especially outside of a criminal context, is really concerning,” said Michael German, a former FBI agent and fellow at the Brennan Center at New York University School of Law. “What are these spies for hire going to be collecting information on?”

A Loosening of Post-Hoover Reforms

The historic context is important: When the worst excesses of Hoover’s FBI were revealed, they helped motivate, starting in 1975, a major congressional investigation, known as the Church Committee, into intelligence abuses, which in turn led to new rules to govern the FBI’s actions. But in the decades since, and especially with counterterrorism concerns dominant after the 9/11 attacks, those rules were loosened considerably. In recent years, the FBI has ramped up its domestic intelligence gathering apparatus, growing the ranks of informants and mapping neighborhoods in order to identify potential sources. The FBI has sent informants into mosques and targeted Muslim student associations, political groups, and protestors. And there have been widespread reports of the FBI using immigration status as leverage to push people to work with the government.

While portions of the documents bear “Secret” classification designations, it’s well known that since the last year of the Bush administration, the FBI has had new leeway to cultivate informants for intelligence purposes. In 2008, then-Attorney General Michael Mukasey issued new guidelines for the FBI, emphasizing gathering, sharing, and retaining information “regardless of whether it furthers investigative objectives in a narrower or more immediate sense.” He explicitly cited the “historical evolution of the FBI” after the 9/11 attacks toward coordination with other intelligence agencies and toward the elimination of the traditional wall between foreign intelligence and domestic law enforcement.

Mukasey also gave agents the power to conduct “assessments,” a new category of investigative activity in which agents are allowed to use invasive techniques — including physical surveillance, checking government and public databases, and tasking an informant to gather information — in situations where there was no “particular factual” reason for concern. Assessments could be opened for intelligence-gathering purposes as well as in order to evaluate potential informants.

“The FBI’s guidelines have been expanded to the point of no return,” said German, of the Brennan Center.

“Whether it’s looking at a political candidate or a political protester, the point is the FBI shouldn’t have authority to use unfettered powers to chase down vague intelligence unconnected to a crime.”

The HUMINT Advisory Council envisioned expanding the powers of assessments further. It recommended that the FBI be allowed to send informants to operate overseas as part of two broad categories of assessments: Type 3, which are used to look into “actual or potential” national security threats or criminal activities, and Type 4, in which the FBI collects information “to inform intelligence analysis and planning.” The council also said that agents should be able to “open and operate an individual without the person ever knowing they are a CHS.” (A U.S. citizen, the memo notes, would have to at least be told they were talking to the U.S. government.)

It’s not clear if these recommendations have been implemented. The FBI declined to comment.

“It’s just very troubling to see that there’s this instruction to greatly expand intelligence informants, because the brunt of that is borne by particular communities,” said Diala Shamas, a lecturer at Stanford Law School. “What we’ve seen in targeted communities is a really big push to recruit individuals to become informants who have no particular knowledge of anything that’s criminal, and in order to coerce them they use all sorts of pressure

Student Debt Is Already a Hallmark Issue for 2016

November 3, 2016

by Andrew Josuweit

Huffington Post

Student debt is already well-positioned to be a pivotal issue of the 2016 presidential election, with nearly every candidate in the primaries weighing in on the cost of college.

Governor Chris Christie called the concept of a free college education “wrong.” His opponent, Senator Rand Paul, proposed making college tuition entirely tax deductible.

Across the aisle, Senator Bernie Sanders has posed the idea of free college education at public universities. Meanwhile, Hillary Clinton has enlisted policy experts tied to Senator Elizabeth Warren to help shape her student loan agenda.

As exciting as it is to see student debt already at the forefront of the election, it’s hard to get too optimistic for change when Congress has demonstrated an unwillingness to advance legislation that would provide relief to those buried in student debt.

For example, Senator Warren and Senate Democrats attempted to pass a bill in 2014 aimed at refinancing student loans to lower interest rates. However, that proposal died in the Senate when it fell short of the 60 votes it needed to pass.

That same year, Senators Marco Rubio and Mark R. Warner introduced the Dynamic Student Loan Repayment Act, which would make income-driven repayment automatic and limited to 10 percent of all borrowers’ discretionary income. This bill never even made it to a vote in Congress.

Recently, Senator Ayotte introduced the Student Loan Relief Act of 2015. However, critics were quick to point out that this bill merely allows student loan borrowers to refinance with private lenders, something they can already do without the government’s help. The bill instead appears to favor banks by passing the risk of refinancing student loans on to the federal government.

It is well past time for Congress to recognize student loans as being in line with other industries like retirement investment and home mortgage lending, and to pass similar policies that would provide much-needed support to borrowers. Here are three examples of policies that would not only help student loan borrowers but also improve our economy:

  1. Increase the student loan interest tax deduction.

Many borrowers are already eligible for student loan interest deduction, which allows them to subtract student loan interest paid. This rule is especially helpful as an “above-the-line” deduction, which benefits 20-somethings and others who do not itemize taxes.

The problem: it is currently capped at $2,500 on interest.

A home mortgage interest deduction, by contrast, is capped at $1 million annually (if you can even call a number this high a “cap”). You can even deduct interest on a second home in some cases!

While the $2,500 deduction cap might not apply to the majority of student loan borrowers, those with the highest balances (who may be in need of the most relief) are stuck without any added benefit for the extra interest they pay. Not to mention, the home mortgage interest deduction has no cap on income while the student loan interest deduction begins to phase out for grads making at least $65,000 and is completely eliminated by $75,000.

It wouldn’t be necessary to make student debt entirely tax-deductible, as suggested by Senator Paul. Even a modest increase of raising the student loan interest deduction cap to $10,000 and increasing the income cap on this rule would surely provide some relief to borrowers.

  1. Offer deductions to employers who pay employees’ student loans.

Employers already offer benefits to employees other than salary, such as 401(k) retirement plans. These plans provide employees with tax advantages on up to $18,000 in contributions for 2015. But how can we expect employees to focus on retirement when they’re stuck struggling to make student loan payments? Often, student loan debt holders are forced to make tough decisions like prioritizing paying off student loans versus saving for a retirement with a 401(k).

There is currently no tax benefit for employers who wish to pay off their employees’ student loans. By providing a tax break to employers on the federal level, businesses could help their employees tackle student loans so they can move on to focus on other financial issues, like buying a home and investing for retirement.

Senator Ayotte’s bill includes a provision that would allow employers to help employees repay student loans with pre-tax dollars. While this portion of the bill is a step in the right direction, the portion regarding government guarantee of privately refinanced student loans is likely to face objection, as mentioned above.

Meanwhile, some state legislators, such as in Colorado and Wyoming, are already considering implementing this policy.

  1. Allow graduates to repay student loans using pre-tax dollars.

This policy would admittedly be the most costly for the government of the three options posed in this article, but it would likely be the most beneficial to borrowers. If Congress wants to prioritize alleviating the student debt crisis, aggressive and unprecedented action is needed.

Unlike the policies suggested above, this would benefit borrowers equally, regardless of student loan rates. While the student loan interest deduction offers greater benefit to those with high-interest loans, this provision would also allow those with low-interest loans but high amounts of debt take advantage of a tax break.

Encouraging student loan borrowers to pay off loans with the help of tax breaks would mean that millions more Americans could focus their attention back on financial goals like buying a home and saving for retirement, which would positively impact the economy in the long run.

Given that Congress has thus far failed to pass legislation that will substantially overhaul the student debt industry, any of the policies outlined above could serve as a compromise and take some of the burden off borrowers.

If student loan reform remains a key issue in the upcoming presidential election, it will hopefully create enough momentum to wake Congress up to their responsibility to enact policies that enable borrowers to become student debt-free as quickly and efficiently as possible so they can focus on other financial priorities.

Countrywide: Subprime Kings

November 6, 2016

by Harry von Johnston PhD

Many factors combined to create the current housing crisis in the United States.

Low interest rates after the 2001 stock market crash spurred the housing boom. Housing prices skyrocketed above historic trend lines. People were duped into thinking prices would rise forever, but it was inevitable that the housing bubble would burst, and houses would suddenly be worth a lot less. With house prices falling, lots of people are now finding they owe more than their house is worth. This problem is exacerbated by predatory loan arrangements that have left millions facing suddenly rising mortgage payments.

A lot of people and corporations deserve blame for this state of affairs.

Instead of warning consumers about the housing bubble – which would have gone a long way to counter the excessive price run-ups – then-Federal Reserve Chair Alan Greenspan denied a bubble was occurring.

Wall Street firms created exotic investment instruments that made possible the purchase and trading of large numbers of mortgages. This created conditions so that banks and initial lenders took less care in issuing mortgages – since they wouldn’t be responsible for mortgages gone bad. The Wall Street firms not only sold these instruments to duped investors, they took on major liabilities on their own – even though it was obvious the housing bubble would have to burst.

Rating agencies like Moody’s and Standard & Poor’s, which evaluated the riskiness of these new mortgage investment instruments, failed utterly. The housing bubble meant mortgage investments were sure to lose money, but the ratings agencies gave them top ratings anyway. Along with the “innovation” of the Wall Street firms, the ratings agencies helped maintain a market that dramatically exacerbated, and to a considerable degree may have created, the housing bubble.

Financial bubbles create an incentive for criminal and shady activity. Just like the stock bubble of the late 1990s created the climate for Enron and dozens of other companies to cook their books, the housing bubble created incentives for predatory lenders to exploit consumers.

The predatory lenders offered low rates, at least at first. Rates would rise later, but the lenders said that – because home prices were rising so fast and would continue to do so – borrowers could always refinance with a new loan.

The biggest of the predatory lenders was Countrywide, a mortgage lender acquired by Bank of America in January 2008. The company and its CEO, Angelo Mozilo, made a bundle, while setting up thousands and thousands of families for financial ruin.

“Over the past few years,” says Martin Eakes of the Center for Responsible Lending, “by steering millions of people into bad loans, Countrywide has been the largest rogue mortgage lender in the country. According to Countrywide’s own data, more than 80 percent of its exotic adjustable-rate loans were made to borrowers that do not meet current banking standards. Countrywide knew that these homeowners would not be able to make their monthly loan payments after dramatic payment increases became effective.”

The Center for Responsible Lending has compiled a dossier on Countrywide’s irresponsible practices, presented in a report, “Unfair and Unsafe.” Its devastating report, based on customer complaints, lawsuits, regulatory actions, news accounts, government reports and company documents, shows how Countrywide engaged in rampant wrongdoing:

Predatory lending.

“Lawsuits filed around the country have accused Countrywide of preying on borrowers through a variety of unfair and fraudulent tactics that have siphoned equity out of their homes and pushed many into foreclosure,” notes “Unfair and Unsafe.” “Borrowers and regulators have accused the company of: steering borrowers with good credit into higher-cost ‘subprime’ loans; gouging minority borrowers with discriminatory rates and fees; working in cahoots with mortgage brokers who use bait-and-switch tactics to land borrowers into loans they can’t afford; targeting elderly and non-English-speaking borrowers for abusive loans; and packing loans with inflated and unauthorized fees.”      In one lawsuit, Albert Zacholl, a 74-year-old man living in Southern California, alleges that Countrywide and a pair of mortgage brokers “cold-called and aggressively baited” him. They promised him $30,000 cash, a mortgage that would replace his previous mortgage (which was leaving him owing more each month) and a monthly payment that would not exceed $1,700. Zacholl told the brokers that his income consisted of a pension of $350 a month and Social Security payments of $958, and that with help from his son, he could afford a mortgage up to $1,700. According to the lawsuit, the broker falsified his loan application by putting down an income of $7,000 a month, and then arranged for a high-interest mortgage that required him to pay more than $3,000 a month (and failed to deliver the $30,000 cash payment). The motivation for the scam, according to the lawsuit, was to collect $13,000 in fees.

In court papers, the Center for Responsible Lending reports, Countrywide responded that Zacholl “consented to the terms of the transaction” and that any problems were the result of his own “negligence and carelessness.”

Dangerous products.

Countrywide has been a leader in pushing unsound mortgage terms. These include “exploding” subprime adjustable rate mortgages – with reasonable interest rates in the first year that jump in subsequent years, often by as much as 30 percent to 50 percent.

Conflicts of interest.

“Countrywide has created a corporate structure designed to allow its subsidiaries to work hand-in-hand in squeezing borrowers with excessive fees and penalties,” according to “Unfair and Unsafe.” Countrywide affiliates handle appraisals, credit reports, flood certifications and other documentation for new loans; provide “force-placing” insurance for borrowers whose homeowners insurance has lapsed; and serve as a foreclosure trustee. The interconnections enable Countrywide to charge high fees, and deny borrowers the benefit of third parties’ independent judgment and independent interests.

Broken promises on loan modifications.

The company has a history of failing to fully live up to its promises to help borrowers keep their homes by modifying onerous loans, according to “Unfair and Unsafe.” The report cites a Fall 2007 Credit Suisse review that ranked Countrywide as one of the mortgage lenders least willing to adjust loan terms.

Countrywide says it is committed to working out fair arrangements to keep homeowners in their houses. In December, it entered into an arrangement with the community group ACORN designed to help subprime borrowers.

“During the first 11 months of 2007, Countrywide helped more than 69,000 customers retain their homes through solutions such as loan modifications, long-term repayment plans, special forbearance and other options,” says Steve Bailey, a Countrywide senior managing director of loan administration. “Regardless of the reason for the payment difficulties, Countrywide wants to try to find reasonable solutions for our borrowers.”

Abusive loan servicing

Borrowers claim that Countrywide has engaged in sloppy and  fraudulent loan servicing that has produced unwarranted fees and foreclosures.

With the collapse of the housing market in 2007, Countrywide’s fortunes turned, its mortgage-backed securities plummeted in value, and the company seemed on the edge of bankruptcy. In January 2008, Bank of America agreed to buy the company.

Do not weep for company co-founder and long-time CEO Angelo Mozilo, however. Mozilo grabbed compensation worth $185 million from 2002-2006, according to an analysis by the U.S. House of Representatives Committee on Oversight and Government Reform. Between November 2006 and December 2007, Mozilo sold $150 million in stock – effectively jumping from a sinking corporate ship for which he was supposedly at the helm, or at least on the captain’s deck.

“Particularly, the discrepancy between Mr. Mozilo’s compensation and Countrywide’s performance is striking,” concludes the Oversight Committee analysis. “In 2007, Countrywide announced a $1.2 billion loss in the third quarter and an additional loss of $422 million in the fourth quarter.” By the end of the year, the company’s stock fell 80 percent from its February peak. “During the same period, Mr. Mozilo was paid $1.9 million in salary, received $20 million in stock awards contingent upon performance, and sold $121 million in stock.”

Mozilo retired as CEO in 2006, remaining as company chair and an employee. The House Oversight Committee analysis shows that his compensation contract, taking effect in 2007, was outrageous, and based in part on recommendations from a compensation consultant loyal to Mozilo rather than Countrywide.

Even so, Mozilo was bitter that the company did not give him everything he wanted. In an e-mail message turned up by the Oversight Committee, Mozilo wrote to the compensation consultant:

“I appreciate your input but at this stage in my life at Countrywide this process is no longer about money but more about respect and acknowledgement of my accomplishments. … Boards have been placed under enormous pressure by the left wing anti-business press and the envious leaders of unions and other so called ‘CEO Comp Watchers’ and therefore Boards are being forced to protect themselves irrespective of the potential negative long term impact on public companies. I strongly believe that a decade from now there will be a recognition that entrepreneurship has been driven out of the public sector resulting in underperforming companies and a willingness on the part of Boards to pay for performance.”

With attention focused on the discrepancy between Mozilo’s compensation package and Countrywide’s well-being, he waived various payments – totaling $37.5 million – he could have received once Bank of America finalized its takeover.

In March 2008, Mozilo appeared before the House Oversight Committee to explain his compensation.

“Countrywide’s board,” he testified, “has aligned the interests of our top executives, including me, with shareholders by making our compensation primarily performance-based – namely, tied to earnings per share and share price appreciation. Since 1982 through early 2007, Countrywide’s stock appreciated over 23,000 percent, reaching a peak market value of over $25 billion from a starting value of zero. As a result, over recent years, I have received substantial income from bonuses under a formula that was approved by our shareholders on at least two occasions.”

He also received substantial stock options, explaining, these were “options that required the price of the stock to rise above the option price before any income could be realized, thereby aligning me squarely with our shareholders.” In anticipation of his retirement, he testified, he put in place a plan to cash in some stock options earned in earlier years. His sales were thus planned in advance of Countrywide’s downturn. But he continues to hold substantial shares in Countrywide – shares worth much less than before the company’s stock collapsed.

Mozilo testified that he is “very proud of the home ownership opportunities that Countrywide has provided for over 20 million families,” while acknowledging the hardship faced by homeowners and Countrywide employees and shareholders.

“In my 55 years in the industry,” he said, “this by far is the worst housing crisis I have ever seen, combined with an unprecedented collapse of the credit and liquidity markets.”

“The problem we face,” he said, “is the deterioration of the value of homes. As values were going up, we had no problem. We had no delinquencies and no foreclosures, because people had options, because people run into three things in their lives generally – loss of job, loss of marriage, loss of health. When that happens and they own a home, and it impacts their income, they generally have a way out – sell the house, refinance, do something.

“That equity that they have in their homes has been virtually wiped out. And that’s what’s exacerbating this whole foreclosure problem.”

Wasn’t that problem entirely foreseeable? Didn’t Countrywide’s lending policies – which generously might be called aggressive – depend on constantly rising housing values in what was obviously a bubble market?

The Real Foreclosure Crisis: Who Owns the Mortgages?

by Peter G. Miller

Huffington Post

For all the headlines given to foreclosure affidavits and robo-signing virtually no one has mentioned the real point, the idea that the affidavits themselves may not prove loan ownership regardless of how they were signed.

For several years foreclosure defense attorneys have been telling anyone who would listen that the entire foreclosure process is flawed because you have to own a mortgage note before there can be a foreclose — and several courts have found that the affidavits used in foreclosures do not prove ownership.

Go back to 2007. Federal judge Christopher Boyko of the U.S. District Court in Ohio — a 2005 appointee of George W. Bush — was asked to foreclose on 14 homeowners.

In a lot of courts the borrowers and their families would instantly be on the street but Judge Boyko said before there could be a foreclosure the lenders would first have to show that they owned the delinquent loans and therefore had the right to appear in court.

The problem was that public records showed the loans were owned by the local banks that originated the mortgages, not the big banks before the court. So, to foreclose, the big banks would first have to show ownership of the notes. How? By providing evidence of ownership such as a sworn affidavit.

Judge Boyko looked at the affidavits and made this ruling:

“The Court’s Amended General Order No. 2006-16 requires Plaintiff to submit an affidavit along with the Complaint, which identifies Plaintiff either as the original mortgage holder, or as an assignee, trustee or successor-in-interest. Once again, the affidavits submitted in all these cases recite the averment that Plaintiff is the owner of the Note and Mortgage, without any mention of an assignment or trust or successor interest. Consequently, the very filings and submissions of the Plaintiff create a conflict. In every instance, then, Plaintiff has not satisfied its burden of demonstrating standing at the time of the filing of the Complaint.”

Why The Ownership Mess Matters

The Boyko decision arose because lenders wanted to have a way to quickly transfer loan ownership. This is necessary if you’re going to electronically buy and sell mortgage-backed securities, essentially bonds secured with thousands of mortgages.

Before the computer era lenders would have to go down to the courthouse each time a mortgage was sold. The sale would be recorded in the public records and a new owner would be named. If the borrower defaulted the owner of the loan — the party who had the right to go to court and foreclose — was clear.

However, with the creation of mortgage-backed securities Wall Street needed a way to avoid the pesky and costly recordation system so it came up with MERS — the Mortgage Electronic Registration System.

In general the MERS concept works like this: When a loan is originated and sold on Wall Street MERS would become the nominal owner. Loan ownership can then be transferred within MERS and without having to change the public record with every loan sale.

Not only was the MERS system a big time saver, it also saved lenders a bunch of money:

“Lenders save at least $25 for every new loan they register on the MERS System ,” said Carson Mullen, Executive Vice President of the MERS Customer Division. “Since the beginning, MERS has saved the mortgage industry over $1 billion in unnecessary costs.”

Other States

Challenges to the nominee system of ownership have now emerged in a number of states including Nevada, Missouri and Kansas.

According to the Kansas Supreme Court, “MERS did not demonstrate, in fact, did not attempt to demonstrate, that it possessed any tangible interest in the mortgage beyond a nominal designation as the mortgagor. It lent no money and received no payments from the borrower. It suffered no direct, ascertainable monetary loss as a consequence of the litigation. Having suffered no injury, it does not qualify for protection under the Due Process Clause of either the United States or the Kansas Constitutions.”

“There is no evidence in the record or the pleadings,” said the Missouri Court of Appeals, “that MERS held the promissory note or that BNC (the lender) gave MERS the authority to transfer the promissory note. MERS could not transfer the promissory note; therefore the language in the assignment of the deed of trust purporting to transfer the promissory note is ineffective.” (Parenthesis mine)

What Next

If more courts agree that mortgage ownership cannot be proven then vast numbers of foreclosures can’t occur until the actual loan owners go to court. At the same time, if loan ownership is unclear then what’s the real market value of mortgages now on lender books or securities backed by bundles of mortgages? And what if a thorough audit shows mistakes such as the ownership of one mortgage by several lenders or mortgage-backed securities?

We may soon find ourselves in a financial environment where foreclosures are stalled, mortgage ownership is unclear, asset values are uncertain and the foreclosure problems of the past few years will be minor and minimal when compared with issues which lie ahead. In the meantime, massive new employment opportunities will open up in such fields as foreclosure defense law and mortgage ownership auditing.

Germany must detach foreign policy from US, whether Trump or Clinton wins – think tank

November 8, 2016


A leading German think tank has urged the government to redirect its foreign policy toward gaining more independence from the United States, regardless of who becomes the next US president.

In October, the German Institute for International and Security Affairs (SWP), a Berlin-based government-oriented think tank, published a paper titled ‘Even without Trump much will change’. It calls for a more aggressive German foreign policy, which should pursue its own economic and geopolitical goals independently from those of the United States and, if need be, even go against Washington’s interests

“The Presidential elections in the US can have serious consequences for the global order,” said Johannes Thimm, the author of the paper and head of the US research group for the think tank.

“Germany therefore should re-examine both its relations with the United States and its own contribution to the world order.”

The paper calls a potential Donald Trump presidency “the great unknown.”

“With Trump as president… there is a high degree of uncertainty about US foreign policy.

“Since Trump has so far only made vague announcements on foreign policy issues, there is a great deal of uncertainty about the possible consequences of his election. In general, Trump assumes that the US leadership has done more harm than good. The Americans had been exploited by others, allies and rivals… Therefore, the US should act in the future according to a narrowly defined cost-benefit calculation,” the paper states, adding that “Trump’s repeated announcements that, as president, he would review the security alliances of the US, triggered considerable unrest among the European and Asian allies.”

Another point that goes against Trump, according to the SWP paper, is his lack of experience in politics in general, coupled with the impulsiveness he’s shown throughout his election campaign and previous public appearances.

“What is known about him allows very different conclusions. His lack of experience in politics could well have the effect that as a president he would listen to counselors and, above all, act pragmatically. The cause for concern, in turn, is his great likeness for risk-taking and his impulsiveness. In any case, German policy should not rely on the possibility that Trump’s uncalculated [decisions] and extreme views will be ‘suppressed’ whether by a consultative staff, the Cabinet, the military or the Congress.”

The paper states that in this regard the potential policy of Democratic candidate Hillary Clinton would be more convenient for Germany, as it would be more predictable.

“Hillary Clinton is likely to inherit [President Barack] Obama’s foreign policy, in whose first term of office she served as [secretary of state]. Like Obama, she stands for the more multilateral version of liberal hegemony, where cooperation with historic partners is likely to be pursued.”

However, the paper notes that even in the event a Clinton victory, Germany should make “appropriate strategic considerations” as there is no way to tell to what extent she would follow in Obama’s footsteps. For instance, there may be controversies regarding the free trade agreements such as the Transpacific Partnership (TPP) and Transatlantic Trade and Investment agreement (TTIP).

“Even without drastic change, this area holds the potential for conflict. The demand for higher capital reserves for financial institutions is met with resistance in Europe. Critics fear that this will undermine the competitiveness of European banks.

“[Clinton’s opinion on the matter] has not yet been explicitly stated. However, there is some evidence that Clinton is not fundamentally satisfied with the past US policy on free trade agreements,” the paper pointed out.

It concluded that whether Hillary Clinton or Donald Trump next occupy the Oval Office, Germany should already be drawing up a foreign policy that will be unaffected by the election outcome and will not depend on it.

“Trump’s victory would have far-reaching consequences for Washington’s foreign policy, but changes are to be expected with any election outcome… [But] even in the event of Hillary Clinton’s victory, German policy would do well not to remain in the comfortable routine of waiting. Rather, we should think about how the transatlantic relationship and the future world order should be shaped, irrespective of the outcome of the elections,” the paper said.

This means that Germany should “question the attitude, based on the US’ exceptionalism, that American interests per se are global interests,” as well as be ready to argue with Washington if its decisions are counterproductive from the German perspective.

“Good transatlantic relations for their own sake and disregarding other considerations can rob [our country] of the possibility of strategically beneficial action. Without a willingness to argue with the US government, many of the options for [German] influence could be eliminated from the start,” the paper stresses.

German authorities have abstained from announcing official support for a particular presidential candidate. Yet Merkur newspaper recently alleged that Chancellor Angela Merkel would prefer to see Clinton win the election. Another news outlet recalled a statement by Clinton in which she praised the German chancellor as an “extraordinary, strong leader,” while Trump on several occasions has alleged Merkel “is ruining Germany.”

Legalizing Pot and 10 Other Ballot Issues to Watch on Election Day

November 7 2016

by Zaid Jilani, Naomi LaChance

The Intercept

The presidential race and legislative offices aren’t the only things on voters’ ballots on Tuesday. Around the country, voters will also get to decide ballot measures that could change the lives of millions of Americans — offering them access to cheaper prescription drugs, for instance, or legalizing the sale of recreational marijuana, or changing the system by which they vote altogether.

Here are 11 issues on state ballots that could change America:

1.Cheaper Pharmaceutical Drugs and True Universal Health Care (California and Colorado): California’s Proposition 61 could potentially dramatically lower the prices of pharmaceutical drugs for many in the state, as it would mandate state agencies to purchase medicine at a price no higher than what the Department of Veterans Affairs pays for them (it negotiates prices to lower them considerably). The big drug companies have spent over $100 million trying to stop the initiative. Meanwhile, in Colorado, voters will have a chance to enact a truly universal health care system with Amendment 69, which would direct the state to adopt a single-payer plan. The health insurance industry has hired Democratic consultants to try to stop the push.

2.A Different Way to Vote That Busts Up the Two-Party Duopoly (Maine): In Maine, voters will have an opportunity to enact a ranked-choice voting system — becoming the first state to do so statewide. Under this system, voters choose not just one candidate at the ballot, but rank their preferences between different parties and candidates — empowering voters to vote for third-party and independent candidates without worrying about viability. If no candidate receives the majority of first-preference votes, then the candidates who finished last are eliminated each round until the winning candidate has the majority of votes. Maine, a state where independent candidates are popular, is a great place to start with such a system — the current Republican Governor Paul LePage has never received a majority of votes thanks to three-way vote splitting, something that is not possible under a ranked-choice system.

3.Curtail the Influence of Money in Politics (South Dakota, Missouri): Voters in South Dakota will decide the fate of Initiated Measure 22, the South Dakota Government Accountability and Anti-Corruption Act. Currently, South Dakota is the only state in the country where lobbyists can give an unlimited number of secret gifts to lawmakers. The measure would, among other things, limit the gifts an individual lobbyist can give a lawmaker to a value of $100 a year. In Missouri, candidates can rake in virtually unlimited contributions from megadonors, and the governor’s race is the nation’s most expensive, topping $50 million in spending. With Amendment 2, voters can change that. It would enact rules that cap donations to individual candidates to $2,600.

4.Boost the Minimum Wage, or Lower it for the Young (Arizona, Colorado, Maine, South Dakota, Washington): Four states — Arizona, Colorado, Maine, and Washington — will have initiatives on the ballot to raise the minimum wage. But one state, South Dakota, is asking voters for permission to lower the state minimum wage from $8.50 to $7.50 for workers under age 18.

5.Expand Charter Schools and School Takeovers (Massachusetts, Georgia): Massachusetts voters will decide the fate of Question 2, which would lift the state’s charter school cap and allow up to 12 independent charter schools to be established each year. Democratic Sen. Elizabeth Warren, who represents the state, came out against the initiative in late September, raising concerns that it would help drain funding away from traditional public schools. In Georgia, Amendment 1 would empower the state to take over what it deems to be failing schools and potentially shut them down or convert them into charter schools. The amendment has faced fierce opposition from teachers, who see it as a way of undermining local control of public education.

6.Legalize Marijuana (California, Massachusetts, Maine, Arizona and Nevada): Five states are looking at legalizing recreational marijuana. The ballot measures would allow for states to regulate marijuana sales and generate tax revenue. A 15 percent California sales tax would go toward drug research and law enforcement, and a 10 percent Maine sales tax would to to a general fund. People age 21 or older would be allowed to possess a limited amount of weed in these states, though in Arizona and Nevada they would be fined if caught smoking in public view. The pharmaceutical industry, alcohol industry, police and prison guard groups and billionaire casino magnate Sheldon Adelson have bankrolled the opposition to these measures. Jerry Brown of California is the only governor of the five states who has not spoken against the measures; he has declined to take a position. Three other states — Montana, Florida, and North Dakota — are looking at legalizing medical marijuana.

7.Background Checks for Guns and Other Restrictions (California, Maine, Nevada, Washington): Three states — California, Maine, and Nevada — have ballot measures that would strengthen measures requiring background checks for gun purchases or for the purchase of ammunition. In Washington, Initiative 1491 would empower judges to remove an individual’s access to firearms if it was deemed they were a danger to themselves or others.

8.End or Restore the Death Penalty (California, Nebraska): Two states, California and Nebraska, are revisiting whether prisoners should be subject to capital punishment. California has two ballot measures — Proposition 62 would repeal the death penalty, while Proposition 66 would speed up the appeals process and increase the amount of a prisoner’s wages that would go to a victim’s family for restitution. Since the two measures contradict each other, the ballot measure with the most “yes” votes will pass. In Nebraska, voters are being asked to overturn the death penalty ban passed by the state legislature in May 2015.

9.Ensure Rights for the Incarcerated (Colorado, California, New Mexico): In Colorado, Amendment T would forbid authorities from forcing prisoners to do unpaid labor. It would remove language about slavery from the Colorado constitution that the head of the state’s ACLU called “archaic and offensive.” In New Mexico, Constitutional Amendment 1 would prevent officials from keeping people in jail solely because they can’t pay bail, and allow for defendants who are proven dangerous to be denied bail entirely. California Proposition 57, pushed by Gov. Jerry Brown, would create more opportunities for parole for people in prison for nonviolent crimes. It would also let judges, rather than prosecutors, decide whether a juvenile should be tried in court as an adult.

10.Protect Animals (Massachusetts, Montana, Oregon): In Massachusetts, Question 3 would ban sales of eggs, veal, or pork from farms where animals are kept in spaces so small that they cannot stand up or move around freely. A measure in Montana would ban animal traps on state public lands. Oregon’s Measure 100 would prohibit the sale of products made from 12 types of animals, including lions, elephants, and sea turtles. Exemptions would apply for inheritances, antiques, certain musical instruments, and members of Native American tribes.

11.Raise Taxes (Oregon, Washington): Oregon’s Measure 97 would increase the corporate gross sales tax, generating an estimated $25 million in revenue to be used for the state to fund its needs. It is the most expensive ballot battle in Oregon’s history with $42 million spent during the campaign. In Washington, Initiative 732 seeks to establish a carbon tax, although the environmental community there is split on the measure.

In addition to these state referendums, some cities are voting on innovative measures as well. For example, in San Francisco, voters will decide whether to lower the voting age to 16.

The Great American Mortgage Rip-Off

by Harry von Johnston, PhD


Although only bankers are aware of it, there is a second wave of economic disaster starting to build up that will make the earlier one pale into insignificance. Let us start out with MERS

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

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 orselling 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.

Readers wishing to find out if their title is secure should write to Vermont Trotter, an investigative reporter whose own mortgage ended up in the courts. Mr. Trotter is embarking on a series of articles on this subject and is able, and is willing, to forward requests for information to attorneys specializing in the subject.

If you want to get in touch with Mr. Trotter, write him at vtskis@gmail.com and he will respond.

Wall Street ‘flash crash’ accused Navinder Sarao extradited to US

British defendant due to appear shortly in Chicago court to answer 22 charges of fraud and market manipulation

November 8, 2016

by Julia Kollewe

The Guardian

The day trader accused of helping trigger the 2010 Wall Street “flash crash” from his parents’ home, has been extradited to the US and is expected to appear in a court in Chicago.

Navinder Sarao is in US custody and is scheduled to appear in federal court on Tuesday morning, Bloomberg reported. Sarao lost his year-long legal battle against extradition at the high court in London in mid-October.

Sarao, 37, faces 22 charges of fraud and market manipulation, which carry sentences totalling a maximum of 380 years. He is accused of making $40m (£32m) by “spoofing” the US market over five years, trading from his parents’ home in Hounslow, west London.

Sarao is alleged to have modified computer software to spoof the market by placing huge orders on the Chicago Mercantile Exchange which he never intended to execute and which were later cancelled.

The case centres on his alleged contribution to the Dow Jones Industrial Average plunging 600 points in five minutes on 6 May 2010, wiping almost $1tn off the value of US shares. US authorities claim he made $875,000 on the day.

Lawyers for the former bank worker and Brunel University student argued that his actions did not constitute a crime in the UK, where he should be tried because he is a British citizen.

US prosecutors in Chicago have stepped up their investigations into spoofing in recent years. In July, Michael Coscia became the first person to be convicted of spoofing after it was made a crime under the Dodd-Frank Act. He was sentenced to three years in prison.




  1. Scope

This document provides commanders and staffs with general information and

technical data concerning chemical/biological (CB) agents and other compounds of

military interest such as toxic industrial chemicals (TIC). It explains the use;

classification; and physical, chemical, and physiological properties of these agentsand compounds. Users of this manual are nuclear, biological, and chemical (NBC)/ chemical, biological, and radiological (CBR) staff officers, NBC noncommissioned officers (NCOs), staff weather officers (SWOs), NBC medical defense officers, medical readiness officers, medical intelligence officers, field medical treatment officers, and others involved in planning battlefield operations in an NBC environment.

  1. Purpose

This publication provides a technical reference for CB agents and related

compounds. The technical information furnished provides data that can be used to

support operational assessments based on intelligence preparation of the battlespace


  1. Application

The audience for this publication is NBC/CBR staff personnel and

commanders tasked with planning, preparing for, and conducting military operations.

  1. Implementation Plan

Participating service command offices of primary responsibility (OPRs) will

review this publication, validate the inform ation, and reference and incorporate it in service and command manuals, regulations, and curricula as follows:

Army.The United States Army (USA) will incorporate this publication in USA training and doctrinal publications as directed by the Commander, United States Army Training and Doctrine Command (TRA DOC) . Distribution is in accordance with Department of the Army (DA) Form 12-99-R (Initial Distribution Requirements for Publications). Marine Corps . The United States Marine Corps (USMC) will incorporate the procedures in this publication in USMC training and doctrinal publications as directed by the Commanding General (CG), United States Marine Corps Combat

i.Development Command (MCC DC) . Distribution is in accordance with Marine Corps

Publication Distribution System (MCPDS).

Navy.The United States Navy (USN) w ill incorporate these procedures in

USN training and doctrinal publications as directed by the Commander, Navy Warfare Development Command (NWDC). Distribution is according to the military standard requisitioning and issue procedures (MILSTRIP).

Air Force.The United States Air Force (USAF) will validate and incorporate appropriate procedures according to applicable governing directives.

  1. User Information
  2. The United States Army Chemical School (USACMLS) developed this

publication with the joint participa tion of the approving service commands.

  1. We encourage recommended changes for improving this publication. Please

reference the specific page and paragraph, and provide a rationale for each

recommendation. Send comments and recommendations directly to—



US Army Chemical School


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  1. Background

The threat or use of CB weapons is a possible condition of future warfare and could occur in the early stages of war to disrupt United States (US) operations and logistics. In many of the regions where the US is likely to deploy forces, potential adversaries may use CB weapons. Potential adversaries may seek to counter US conventional military superiority using less expensive and more attainable, asymmetrical means. To meet this challenge, US forces must be properly trained and equipped to operate effectively and decisively in the face of NBC attack.. Additionally, US forces could be confronted in an environment where TIC present a hazard to US forces.

  1. Use of CB Weapons. Adversaries may employ CB agents and other toxic

materials to achieve specific effects. In addition to the physical effects, there exist psychological effects, both in the immediate target area and in other vulnerable areas that may be potential targets.

(1) Chemical agents have effects that can be immediate or delayed, can be

persistent or nonpersistent, and can have significant physiological effects. While relatively large quantities of an agent are required to ensure an area remains contaminated overtime, small- scale selective use that exploits surprise can cause significant disruption and may have lethal effects.

(2) Biological agents can produce lethal or incapacitating effects over an

extensive area and can reproduce. The delayed onset of symptoms and detection,

identification, and verification difficulties for biological agents can also confer important advantages to adversaries who decide to use biological agents.

(3) The means available to adversaries for delivery of CB weapons range from

specially designed, sophisticated weapon systems developed by nations to relatively inefficient improvised devices employed by terrorists and other disaffected individuals and groups.

  1. US Policy. This paragraph contains brief descriptions of treaty, legal, and

policy strictures on chemical and biological warfare (CBW ).

(1) The Protocol for the Prohibition of the Use in War of Asphyxiating,

Poisonous or Other Gases, and of Bacteriological Methods of Warfare,” also known as the Geneva Protocol of 1925, prohibits chemical and bacteriological methods of warfare. Most parties interpret the protocol as a prohibition only of the first use of these agents in war. It did not ban the development, production, or stockpiling of these weapons. In 1974, the US Senate gave advice and consent to ratification of this protocol, subject to the reservation that the US would not be bound by the provisions with respect to an enemy state or its allies who fail to respect the prohibitions of the protocol. On 22 January 1975, the US ratified the protocol subject to this reservation. The protocol entered into force for the US on 10 April 1975. The relevance of the Geneva Protocol is largely superseded by the more restrictive Convention on the Prohibition of the Development, Production, Stockpiling, and Use of Chemical Weapons and on their Destruction (also known as the Chemical Weapons Convention [CWC] and by the Convention on the Prohibition of Bacteriological and Toxic Weapons (also known as the Biological Weapons Convention [BWC]) summarized below.

(2) The Presidential Statement on Chemical and Biological Weapons, 25

November 1969, renounced the US use of lethal biological agents and weapons and confined biological research to defensive measures such as immunization and safety. Under the terms of the BWC, parties undertake not to develop, produce, stock pile, or acquire biological agents or toxins “of types and in quantities that have no justification for prophylactic, protective and other peaceful purposes,” as well as weapons and means of delivery. The BWC does not establish a specific verification regime. The US ratified the BWC on 29 March 1975.

(3) Executive Order No. 11850, 8 April 1975, Renunciation of Certain Uses in

War of Chemical Herbicides and Riot Control Agents, renounced first use of herbicides in war (except for specified defensive uses) and first use of RCAs in war except for defensive military modes to save lives.

(4) The CWC, which entered into force on 29 April 1997, ban s the development,

production, acquisition, stockpiling, transfer, or use of chemical weapons. It provides for the destruction of all chemical weapons stocks within 10 years after entry into force. It contains a vigorous challenge regime to ensure compliance. The US ratified the CWC on 25 April 1997.

  1. Threat
  2. Changes. Countries with chemical weapons programs are adding agents and

more sophisticated delivery systems. Similarly, the sophistication of CBW capabilities is increasing. Proliferation of weapons technology, precision navigation technology, and CBW technology in developing nations presents the US with a complicated national security challenge. Intelligence efforts include co llection and analysis of nations’ dual-use, CB industrial capabilities, and development of the indications and warning of adversarial use of dual-use capabilities.

  1. Challenges. The US faces a number of regional proliferation challenges. Many

of these are detailed in the January 2001 report published by the Office of the Secretary of Defense (OSD), Proliferation: Threat and Response. At least 25 countries now possess—or are in the process of acquiring and developing—capabilities to inflict mass casualties and destruction: NBC weapons or the means to deliver them.

  1. Proliferation. Proliferation of CBW technology also raises several important

issues. Various nations could export a wide array of chemical products, including

Australian group-controlled items to numerous countries of proliferation concern. The controlled items include specific chemical agent precursors, pathogens with biological warfare (BW) applications, and dual-use equipment that can be used in both CBW programs.

  1. Increases in Proliferation. In the next several years, the threat from the

proliferation of CBW may increase. This could result from the development of CB agents that are more difficult to detect and from the adoption of more capable delivery systems.

States with existing programs may master the production processes for complete weapons development and will be less depen dent on outside suppliers.

Any nation with the political will and a minimal industrial base could produce CBW agents suitable for use in warfare. Efficient weaponization of these agents, however, does require d esign and production skills usually found in countries that possess a munitions development infrastructure or access to such skills from cooperative sources.

(2) On the other hand, almost any nation or group could fabricate crude agent

dispersal devices. Such weapons might be ca pable of inflicting only limited numbers of casualties; nevertheless, they could have significant operational repercussions due to the psychological impact created by fears of CBW agent exposure.

(3) Genetic engineering gives BW developers the tools to pursue agents that

could defeat the protective and treatment protocols of the prospective adversary.

Genetically engineered microorganisms also raise the technological hurdle that must be overcome to provide for effective detection, identification, and early warning of BW attacks.

(4) Numerous characteristics need to be controlled for a highly effective BW

agent. Historically, the accentuation of one characteristic often resulted in the attenuation of one or more other characteristics, possibly even rendering the modified agent ineffective as a weapon. Advances in biotechnology, genetic engineering, and related scientific fields provide ever-increasing potential to control more of these factors, possibly leading to an enhanced ability to use BW agents as battlefield weapons.

  1. Novel BW Agents. Advances in biotechnology and genetic engineering may

facilitate the development of potentially new and more deadly BW agents. The ability to modify microbial agents at a molecular level has existed since the 1960s, when new genetic engineering techniques were introduced, but the enterprise tended to be slow and unpredictable. With today’s techniques, infectious organisms can be modified to bring about disease in different ways. The current level of sophistication for many biological agents is low, but there is enormous potential—based on advances in modern molecular biology, fermentation, and drug delivery technology—for making more sophisticated weapons. The BW agents may emerge in two likely categories: man-made manipulations of classic BW agents and newly discovered or emerging infectious diseases. An example of a recent new pathogen (though not necessarily ideal BW agents) includes streptococcus pneumonia S23F, a naturally occurring strain of pneumonia resistant to at least six of the more commonly used antibiotics.

(1) The potential types of novel biological agents that could be produced

through genetic engineering methodologies are listed below. Each of these techniques seeks to capitalize on the extreme lethality, virulence, or infectivity of BW agents and exploit this potential by developing methods to deliver more efficiently and to control these agents on the battlefield.

(a) Benign microorganisms genetically altered to produce a toxin, venom ,or bioregulator.

(b) Microorganisms resistant to antibiotics, standard vaccines, and therapeutics.

(c) Microorganisms with enhanced aerosol and environmental stability.

(d) Immunologically altered microorganisms able to defeat standard identification, detection, and diagnostic methods.

(e) Combinations of the above four types with improved delivery systems.

2) The future likelihood of infectious agents being created for BW purposes will be influenced by technological trends such as—

(a) Genetically engineered vectors in the form of modified infectious organisms may become increasingly available as medical tools and techniques become more widely available.

(b) Strides will be made in the understanding of infectious disease mechanisms and in microbial genetics that are responsible for disease processes.

(c) An increased understanding of the human immune system function and disease mechanisms will shed light on the circumstances that cause individual susceptibility to infectious disease.

(d) Vaccines and antidotes will be improved over the long term, perhaps to the point where classic BW agents will offer less utility as a means of causing casualties.

(e) Many bioengineering companies (both US and foreign) now sell all-in–one kits to enable researchers to perform recombinant deoxyribonucleic acid (DNA) experiments. The availability of free online gene sequence databases and analytic software over the Internet further amplifies and disseminates this capability. It is now possible to transform relatively benign organisms to cause harmful effects.

  1. Militarily Significant Aspect s of Toxic Chemical Agents
  2. Classification. A toxic chemical ag ent is any chemical which, through its chemical action on life processes, can cause death, temporary incapacitation, or permanent harm to humans or animals. For the purpose of this manual, chemical agents are further divided into chemical warfare (CW) agents and military chemical compounds. The terms “persistent” and “nonpersistent” describe the time chemical agents remain in an area and do not classify the agents technically.

(1) CW Agents. The CW agents are toxic chemicals and their precursors prohibited under the CWC. These agents include choking, nerve, blood, blister, and incapacitating agents. Their physiological actions are as follows:

(a) Choking Agents. Choking agents cause damage to the lungs, irritation to the eyes and the respiratory tract, and pulmonary edema (“dry-land drowning”).

(b) Nerve Agents. Nerve agents inhibit cholinesterase (ChE) enzymes. This inhibition permits acetylcholine (ACh), which transmits many nerve impulses, to collect at its various sites of action. The body’s muscles and glands become overstimulated due to excessive amounts of ACh. At sufficient doses, this can lead to an inability of the body to sustain breathing.

(c) Blood Agents. The blood transports these agents to all body tissues. Hydrogen cyanide (AC) and cyanogen chloride (CK) are cellular poisons, and they disrupt the oxidative processes used by the cells. Arsine (SA) is different. It causes hemolysis of the red blood cells. The central nervous system (CNS) is especially vulnerable to lack of oxygen rega rdless of the etiology, and respiratory and cardiovascular collapse resulting from AC and CK poisoning. In the case of SA poisoning, the proximal cause of death is

myocardial failure.

(d) Blister Agents (Vesicants). Blister agents are noted for producing reddening and blistering of the skin, but the eyes and respiratory tract are more sensitive than the skin. Eye exposure results in reddening of the eyes and temporary blindness or permanent effects. Inhaled mustard damages mucous membranes and the respiratory tract.

(e) Incapacitating Agents.Used in a military context, incapacitation is understood to mean inability to perform one’s military mission. Since missions vary, for the purpose of this manual, incapacitation means the inability to perform any military task effectively. An incapacitating agent is an agent that produces temporary physiological or mental effects, or both, which will render individuals incapable of concerted effort in the performance of their assigned duties. Medical treatment is not essential but can facilitate a more rapid recovery.

(2) Military Chemical Compounds. Military chemical compounds are less toxic and include materials such as respiratory irritant agents, RCAs, smoke and obscurants, and incendiary materials. The term excludes CW agents. Their physiological actions are as follows:

(a) RCAs (Lacrimators). The RCAs are chemicals that rapidly produce in humans sensory irritation or disabling physical effects which disappear within a short time following termination of exposure.  They are local irritants that, in very low concentrations, act primarily on the eyes, causing intense pain and tearing. At high concentrations they irritate the respiratory tract and the skin. They sometimes cause nausea and vomiting.

(b) Respiratory Irritant Agents. These agents were previously called vomiting agents. Their primary action is irritation of the respiratory tract. In addition, these agents cause lacrimation (tearing), irritation of the eyes, uncontrollable coughing, sneezing, nausea, and a general feeling of bodily discomfort. Usually symptoms disappear in 20 minutes to 2 hours, leaving no residual injury.

  1. Duration of Effectiveness. Several factors determine the time a chemical agent remains effective. These include, but are not limited to, the method of dissemination, weather and terrain co nditions, and the physical and chemical properties of the agent.

(1) Method of Dissemination. Chemical agents are usually disseminated in the field in the form of vapors (gases), aerosols, or liquids. When a chemical agent is disseminated as a vapor from a bursting munition, initially the cloud expands, grows cooler and heavier, and tends to retain its form. Aerosols are finely divided liquid and/or solid substances suspended in the atmosphere and behave in much the same manner as vaporized agents. Liquid agents can be absorbed (soaked into) and adsorbed (adhered to) by surfaces. They can then be evaporated or desorbed (off-gas) from surfaces, causing a vapor hazard.

(2) Weather and Terrain Conditions. Many weather factors and terrain conditions influence the duration of effectiveness of chemical agents. Most important weather factors include temperature, temperature gradient, wind speed, relative humidity, and precipitation. Important terrain conditions include vegetation, soil, and terrain contours.

(3) Physical Properties. Some of the important physical properties are vapor density, vapor pressure (VP), volatility, freezing point (FP), and melting point (MP). Vapor density determines whether the agent is lighter or heavier than air, thus determining whether the agent will settle to low areas or float away and dissipate in the atmosphere. Vapor press ure is used to determine the volatility of an agent. The volatility has an effect upon the vapor concentration. It also affects the duration of an agent hazard after dissemination. The boiling and freezing points of chemical agents influence their operational use and the means of disseminating them..

(4) Chemical Properties. The chemical properties of an agent include its stability and reactivity with water and other substances.

  1. Potency and Physiological Actions. Factors that contribute to the adverse human health effects of chemical agents include toxicity, route of exposure (ROE ), dosage, exposure duration, minute volume (MV), temperature, endpoint, physiological stressors, rate of detoxification (ROD), and rate of action (ROA). Note that not all factors are applicable to all exposure scenarios. For example, MV is not applicable to a percutaneous liquid exposure. Dosages are given for a 70-kilo gram (kg) male with an MV of 15 liters per minute (L/min). Additional toxicological data are required to determine if the toxicity

estimates can be applied to women. Emphasis is placed on acute toxic effects. Acute toxic effects are those occurring within moments to a few days of the toxic exposure. The toxicity estimates provided are not applicable to the general population.

  1. CWC Chemicals. There are, by conservative estimates, 25,000 or more chemicals subject to the CWC regulation—listing each chemical by name is not practical. Chemicals covered under the CWC are divided into three categories as follows:

(1) Schedule 1 chemicals have little or no use in industrial and agricultural industries. They pose a high risk to the object and p urpose of the CWC by virtue of their high potential for use in activities prohibited under the CWC.14

(2) Schedule 2 chemicals may be useful in the production of chemical weapons; however, they also have legitimate uses in other industrial areas. They pose a significant risk to the object and purpose of the CWC.14

(3) Schedule 3 chemicals have legitimate uses in industrial areas and pose a risk to the object and purpose of the CWC. 14

  1. Dual-Use Precursors. Precursors for CW agents also have civil uses in industrial and agricultural industries.









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