People Fall for NYTimes’ Fake Hacking Story of 1.2B Stolen Passwords

Friday, 08 August 2014

On August 5th, the NY Times published a story titled “Russian Hackers Amass Over a Billion Internet Passwords ” which was, in fact, a “Native Advertising” venture between this once respected newspaper and a relatively new computer company identified as Hold Security founded last year in Wisconsin by Alex Holden.

“Native Advertising”, is an online advertising method in which the advertiser attempts to gain attention by providing content in the context of the user’s experience. Native ad formats match both the form and function of the user experience in which they are placed.

The word “native” is used to refer to the formatting of the advertising materials to make them appear more consistent with other media in the recipient’s universe. In other words, paid advertisement is presented as “news”, even though it isn’t.

The New York Times began their “Native Advertising” program this past January, when Dell became the first advertiser to buy into this highly deceptive program which was a three-month campaign costing six-figures.

English: The New York Times building in New Yo...
English: The New York Times building in New York, NY across from the Port Authority. (Photo credit: Wikipedia)

The Russian FSB was shocked US Media ran the fake story as “news”. It estimated The New York Times making “at least” US$1 million off of their “Native Advertising” article for Hold Security, based upon the Hold Security fee of US$120.00 for anyone seeking to find if their passwords were hacked by these “non-existent” Russian hackers as they are the only ones who, supposedly, know who they are. Continue reading “People Fall for NYTimes’ Fake Hacking Story of 1.2B Stolen Passwords”

Billionaire Chen Guangbiao invites 1,000 poor Americans to dinner in Central Park

Controversial entrepreneur sets out to change Americans’ perceptions about wealthy Chinese

.PUBLISHED : Wednesday, 18 June, 2014, 1:16am

Mimi Lau in Guangzhou

// Billionaire Chen Guangbiao invites 1,000 poor Americans to dinner in Central Park | South China Morning Post

// // // // //


Chen Guangbiao

Controversial billionaire Chen Guangbiao placed a full-page advertisement in Monday’s New York Times and a half-page advertisement in Wednesday’s Wall Street Journal, inviting 1,000 underprivileged Americans to dine with him.

In the latest eye-catching campaign following his unsuccessful bid to buy The New York Times earlier this year, Chen said he would also hand out red packets of US$300 to each participant after the charity lunch in New York on June 25. Continue reading “Billionaire Chen Guangbiao invites 1,000 poor Americans to dinner in Central Park”

Why CIA, NSA can’t spy on Putin?

Tuesday, 01 April 2014

English: Vladimir Putin in KGB uniform Deutsch...
Earlier this month, as Russia began its move in Crimea, U.S. spy agencies reportedly found a worrying silence in the spot where they were listening most attentively — the digital space around Russian President Vladimir Putin and his military brass. As the Wall Street Journal reported on Monday, U.S. intelligence services could not intercept any communications on the start of the Crimean invasion. One U.S. official called it a piece of “classic maskirovka,” the Russian spy term for masking sensitive data. But at least part of the radio silence may have a simpler explanation: Putin, by his own admission, does not have a cell phone for the Americans to tap. Continue reading “Why CIA, NSA can’t spy on Putin?”

UN Ambassador Samantha Power’s bizarre tweet on the Islamist beheading of Daniel Pearl

WSJ Reporter Daniel Pearl Kidnapped in Pakistan. Getty.

Posted By Christopher Bedford On 11:44 AM  02/24/2014 In

U.S. Ambassador to the United Nations Samantha Power tweeted early Monday morning that, “Daniel Pearl’s story is reminder that individual accountability & reconciliation are required to break cycles of violence.”

Pearl is the Wall Street Journal reporter who was abducted in Pakistan four months after Sept. 11, 2001. Al-Qaida leader Khalid Sheikh Mohammed slit Pearl’s throat and sawed his head off on camera, after forcing the reporter to read that “My name is Daniel Pearl. I’m a Jewish American from Encino, California, U.S.A. … My father’s Jewish, my mother’s Jewish, I’m Jewish. My family follows Judaism. We’ve made numerous family visits to Israel.” Continue reading “UN Ambassador Samantha Power’s bizarre tweet on the Islamist beheading of Daniel Pearl”

Exxon CEO: Don’t frack in my backyard

Published time: February 22, 2014 02:36                                                                             

Exxon Mobil CEO and Chairman Rex Tillerson.(Reuters / Kevin Lamarque )Exxon Mobil CEO and Chairman Rex Tillerson.(Reuters / Kevin Lamarque )

The CEO of ExxonMobil – the top producer of natural gas in the US – has joined a lawsuit that challenges the construction of a water tower connected to hydraulic fracturing operations near his Texas home, given that it may reduce the property value.

CEO Rex Tillerson and other plaintiffs claim the hydraulic  fracturing – or fracking – project will cause unwanted noise and  traffic associated with trucking water from the 160-foot tower to  the drilling site, The Wall Street Journal reported. Continue reading “Exxon CEO: Don’t frack in my backyard”

Sniper assault on US power station could have been the rehearsal for an ‘even bigger terrorist attack’, warns industry expert

  • As many as two gunmen stormed the PG&E Metcalf substation in California on April 16 last year
  • Former chairman of the Federal Energy commission branded the attack ‘the most significant domestic terrorist assault on the grid’
  • Jon Wellinghoff, who stepped down in November, was moved to speak publicly for fears over national security
  • He and colleagues believe the attack was a ‘dress rehearsal’ to a much larger and more serious incident
  • FBI investigating but say they do not believe terrorist group is responsible

By Lizzie Parry

UPDATED:          13:22 EST, 5 February 2014


Experts in the United States have warned an assault on a Californian power station in April could have been the ‘dress rehearsal to a larger terrorist attack’.

On April 16, last year, as many as two gunmen stormed the PG&E Metcalf substation in California after severing phone lines and firing several dozen rounds at transformers.

At least one person, maybe two, went down multiple manholes at the  facility in a San Jose suburb and cut fiber cables leading to the  substation.

Attacked: The FBI is investigating an April attack on PG&E's Metcalf substation. Experts have warned the assault could have been a 'dress rehearsal for a larger attack'

Attacked: The FBI is investigating an April attack on PG&E’s Metcalf substation. Experts have warned the assault could have been a ‘dress rehearsal for a larger attack’ Continue reading “Sniper assault on US power station could have been the rehearsal for an ‘even bigger terrorist attack’, warns industry expert”

Billionaire Tom Perkins under-fire for likening criticism of the super-rich to the Holocaust now says the Occupy movement is like Nazism

  • Thomas Perkins, 82, originally wrote a letter to the Wall Street Journal of the ‘parallels of fascist Nazi Germany to [San Francisco’s] war on [the rich]
  • His second letter to Bloomberg further compared the ‘Occupy’ movement to German fascism before the Nazis rose to power
  • Perkins is worth $8billion and recently built a superyacht worth $150million

By Daily Mail Reporter and Ryan Gorman

PUBLISHED:          15:39 EST, 26 January 2014       | UPDATED:          16:09 EST, 26 January 2014

Not backing down: Billionaire Tom Perkins clarified his Saturday Nazi reference by comparing the 'Occupy' movement to pre-Nazi rise to power fascism in Germany

Not backing down: Billionaire Tom Perkins clarified his Saturday Nazi reference by comparing the ‘Occupy’ movement to pre-Nazi rise to power fascism in Germany

The California billionaire widely ridiculed after the Wall Street Journal published his letter comparing criticism of the super-rich to the Holocaust is at it again.

Venture capitalist Thomas Perkins – worth about $8billion – wrote another letter Sunday, this time to Bloomberg, in which he compared the ‘Occupy’ movement to pre-Nazi rise to power fascism in Germany. Continue reading “Billionaire Tom Perkins under-fire for likening criticism of the super-rich to the Holocaust now says the Occupy movement is like Nazism”

Forgotten Soldiers / A cache of musty documents lost to memory exposes a time when the U.S. lobotomized some 2,000 veterans. The nation forgot

A cache of musty documents lost to memory exposes a time when the U.S. lobotomized some 2,000 veterans. The nation forgot. But Roman Tritz remembers.
Jenn Ackerman and Tim Gruber for The Wall Street Journal

Roman Tritz’s memories of the past six decades are blurred by age and delusion. But one thing he remembers clearly is the fight he put up the day the orderlies came for him.

“They got the notion they were going to come to give me a lobotomy,” says Mr. Tritz, a World War II bomber pilot. “To hell with them.”

The orderlies at the veterans hospital pinned Mr. Tritz to the floor, he recalls. He fought so hard that eventually they gave up. But the orderlies came for him again on Wednesday, July 1, 1953, a few weeks before his 30th birthday.

This time, the doctors got their way.

Continue reading “Forgotten Soldiers / A cache of musty documents lost to memory exposes a time when the U.S. lobotomized some 2,000 veterans. The nation forgot”

Spain and France’s intelligence agencies carried out collection of phone records and shared them with NSA, agency says

NSA spy row: France and Spain ‘shared phone data’ with US

Raf Sanchez

By , Peter Foster in Washington

8:35PM GMT 29 Oct 2013

European intelligence agencies and not American spies were responsible for the   mass collection of phone records which sparked outrage in France and Spain,   the US has claimed.

General Keith Alexander, the head of the National Security Agency, said   reports that the US   had collected millions of Spanish and French phone records were “absolutely   false”.

“To be perfectly clear, this is not information that we collected on   European citizens,” Gen Alexander said when asked about the reports,   which were based on classified documents leaked by Edward Snowden, the   former NSA contractor.

Shortly before the NSA chief appeared before a Congressional committee, US   officials briefed the   Wall Street Journal that in fact Spain and France’s own intelligence   agencies had carried out the surveillance and then shared their findings   with the NSA.

The anonymous officials claimed that the monitored calls were not even made   within Spanish and French borders and could be surveillance carried on   outside of Europe.

In an aggressive rebuttal of the reports in the French paper Le Monde and the   Spanish El Mundo, Gen Alexander said “they and the person who stole the   classified data [Mr Snowden] do not understand what they were looking at”   when they published slides from an NSA document.

The US push back came as President Barack Obama was said to be on the verge of   ordering a halt to spying on the heads of allied governments.

The White House said it was looking at all US spy activities in the wake of   leaks by Mr Snowden but was putting a “special emphasis on whether we   have the appropriate posture when it comes to heads of state”.

Mr Obama was reported to have already halted eavesdropping at UN’s   headquarters in New York.

German officials said that while the White House’s public statements had   become more conciliatory there remained deep wariness and that little   progress had been made behind closed doors in formalising an American   commitment to curb spying.

“An agreement that you feel might be broken at any time is not worth very   much,” one diplomat told The Telegraph.

“We need to re-establish trust and then come to some kind of   understanding comparable to the [no spy agreement] the US has with other   English speaking countries.”

Despite the relatively close US-German relations, the White House is reluctant   to be drawn into any formal agreement and especially resistant to demands   that a no-spy deal be expanded to cover all 28 EU member states.

Viviane Reding, vice-president of the European Commission and EU justice   commissioner, warned that the spying row could spill over and damage talks   on a free-trade agreement between the EU and US.

“Friends and partners do not spy on each other,” she said in a   speech in Washington. “For ambitious and complex negotiations to   succeed there needs to be trust among the negotiating partners. It is urgent   and essential that our US partners take clear action to rebuild trust.”

A spokesman for the US trade negotiators said it would be “unfortunate to   let these issues – however important – distract us” from   reaching a deal vital to freeing up transatlantic trade worth $3.3 billion   dollars (£2bn) a day.

James Clapper, America’s top national intelligence, told a Congressional   hearing yesterday the US does not “spy indiscriminately on the citizens   of any country”.

“We do not spy on anyone except for valid foreign intelligence purposes,   and we only work within the law,” Mr Clapper said. “To be sure on   occasions we’ve made mistakes, some quite significant, but these are usually   caused by human error or technical problems.”

Pressure from European leaders was added to as some of the US intelligence   community’s key Congressional allies balked at the scale of surveillance on   friendly governments.

Dianne Feinstein, the chair of powerful Senate intelligence committee, said   she was “totally opposed” to tapping allied leaders and called for a   wide-ranging Senate review of the activities of US spy agencies.

“I do not believe the United States should be collecting phone calls or emails   of friendly presidents and prime ministers,” she said.

John Boehner, the Republican speaker of the house and a traditional hawk on   national security, said US spy policy was “imbalanced” and backed calls for   a review.

Mr Boehner has previously been a staunch advocate of the NSA and faced down a   July rebellion by libertarian Republicans who tried to pass a law   significantly curbing the agency’s power.

Japan’s PM warns China on use of force as jets scrambled

By AFP | AFP – 8 hours ago

Japanese Prime Minister Shinzo Abe (C) delivers a speech next to Defence Minister Itsunori Onodera (L) during military review at the Ground Self-Defence Force's Asaka training ground, on October 27, 2013


AFP/AFP – Japanese Prime Minister Shinzo Abe (C) delivers a speech next to Defence Minister Itsunori Onodera (L) during military review at the Ground Self-Defence Force’s Asaka training ground, on October 27, …more  2013  less 


Japan’s leader warned China on Sunday against forcibly changing the regional balance of power, as reports said Tokyo had scrambled fighter jets in response to Chinese military aircraft flying near Okinawa.

Verbal skirmishing between Asia’s two biggest economies, who dispute ownership of an island chain, escalated as Beijing warned Tokyo that any hostile action in the skies against Chinese drones would be construed as an “act of war”.

“We will express our intention as a state not to tolerate a change in the status quo by force. We must conduct all sorts of activities such as surveillance and intelligence for that purpose,” Abe said in an address to the military.

“The security environment surrounding Japan is becoming increasingly severe. This is the reality,” he said. “You will have to completely rid yourselves of the conventional notion that just the existence of a defence force could act as a deterrent.”

Abe presided over an inspection of the military at which a US amphibious assault vehicle was displayed for the first time, an apparent sign of Japan’s intention to strengthen its ability to protect remote islands.

The defence ministry plans to create a special amphibious unit to protect the southern islands and retake them in case of an invasion.

“There are concerns that China is attempting to change the status quo by force, rather than by rule of law,” Abe earlier told the Wall Street Journal in an interview following a series of summits this month with regional leaders.

“But if China opts to take that path, then it won’t be able to emerge peacefully,” he said in the interview published Saturday.

“So it shouldn’t take that path, and many nations expect Japan to strongly express that view. And they hope that as a result, China will take responsible action in the international community,” Abe added.

On Sunday Jiji Press and Kyodo News reported that Japan had deployed jets for two days running in response to four Chinese military aircraft flying over international waters near the Okinawa island chain.

Two Y8 early-warning aircraft and two H6 bombers flew from the East China Sea to the Pacific Ocean and back again but did not violate Japan’s airspace, the reports said.

The Japanese defence ministry was not immediately available for confirmation.

Japan’s military is on increased alert as Tokyo and Beijing pursue a war of words over the disputed islands in the East China Sea that lie between Okinawa and Taiwan.

On Saturday China responded angrily after a report said Japan had drafted plans to shoot down foreign drones that encroach on its airspace if warnings to leave are ignored.

Tokyo drew up the proposals after a Chinese military drone entered Japan’s air defence identification zone near the disputed islands in the East China Sea last month, Kyodo said.

“We would advise relevant parties not to underestimate the Chinese military’s staunch resolve to safeguard China’s national territorial sovereignty,” China’s defence ministry spokesman Geng Yansheng said in comments posted on the ministry’s website.

“If Japan takes enforcement measures such as shooting down aircraft, as it says it will, that would constitute a serious provocation, an act of war of sorts, and we would have to take firm countermeasures, and all consequences would be the responsibility of the side that caused the provocation.”

Tokyo and Beijing both claim the small uninhabited islands in the East China Sea. Japan administers them and calls them the Senkakus. China refers to the islands as the Diaoyus.

One of Abe’s first decisions as prime minister was to increase the defence budget for the first time in 11 years.

Tokyo also plans to hold a major air and sea exercise next month to bolster its ability to protect its remote islands.

In the Wall Street Journal interview, Abe said Japan had become too inward-looking over the past 15 years, but as it regains economic strength “we’d like to contribute more to making the world a better place”.

The Journal said he made it clear that one way Japan would “contribute” would be countering China in Asia.


Need health care coverage? Just dial 1-800-F**KYO to reach Obamacare’s national hotline

Posted By Katie McHugh On 12:26 AM  10/03/2013 In Politics | No Comments

Need health insurance? The Obama administration has you covered. Simply dial 1-800-FUCKYO to reach the next available health-care provider.

Far from being a mistype, that’s the official number that Health and Human Services wants Americans to dial when seeking health care. Obamacare’s national call center really did list its number as 1-800-318-2596, helpfully spelling out President Barack Obama’s tendency to blatantly flip the bird in plain view.

After allowing for the lack of letters attached to 1 on a traditional American telephone keypad, the number spells out a clear message. For every duped voter, every young invincible weighing the cost of a penalty versus a newly tripled yearly deductible, every ailing old granny in a wheelchair (whom, remember, Paul Ryan wants to push off a cliff) who needs adequate and affordable health care, Obama’s message is:

1-800-3(F) 8(U) 2(C) 5(K) 9(Y) 6(O).

That’s 1-800-FUCKYO. Sadly, the Obama administration failed to swap the useless 1 for a more functional 8 to complete the heartfelt message, perhaps in consolation to former White House Chief of Staff Rahm Emanuel’s tragically shortened middle finger.

Health and Human Services Secretary Kathleen Sebelius launched a media campaign this week to propagandize the transformative health-care overhaul. She compared the sweeping, coercive law that gives government huge power over the health-care industry to an iPhone system update.

“Everyone just assumes, “Well, there’s a problem, they’ll fix it, we’ll move on,’” Sebelius said about Apple’s iOS updates. “And like many of their customers, I put the ‘new’ system on my phone and went on my merry way, but it was just a reminder that we’re likely to have some glitches. We will fix them and move on. Is this a sign that the law is flawed and failed? I don’t think so. I think it’s a sign that we’re building a piece of complicated technology. We want it to work. We want it to work right. We’ve got an incredible team working 24/7 to do just that.”

“Hopefully they’ll give us the same slack they give Apple,” Sebelius said, according to the Wall Street Journal.

(h/t HotAir)

Photo credit: Chris Barrett

Follow Katie on Twitter

Article printed from The Daily Caller:

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Syria: US calls on UN to withdraw experts, mission senseless


Wsj, there was already definitive proof of chemical weapons use

28 August, 10:09


(ANSAmed) – NEW YORK, AUGUST 28 – The UN mission in Syria is meaningless, as there was already definitive proof of chemical weapons use, US presidential national security advisor Susan Rice told US Ambassador to the UN Samantha Power and other UN representatives in a message on Sunday. Reports were in Wednesday’s Wall Street Journal, which cited sources as saying that the US had put pressure on the UN ”in private” to withdraw its experts from Syria, thereby paving the way for a possible reaction from US president Barack Obama. Rice is reported to have said written that the UN investigation was too late and that it would only ”tell us what we already know”: that chemical weapons were used. She went on to say in the email that they already knew who had used them.

The Wall Street Journal said that Israeli secret services had provided the CIA with decisive information from an elite unit of the Syrian division tasked with supervision of Assad’s chemical weapons. The information, verified by the CIA, reportedly shows that some types of chemical weapons had been moved to the Damascus suburb where the August 21 alleged chemical attack took place, in the days prior to the attack. The information corroborated by the CIA is said to have changed the US administration’s position, and that Saturday evening it was decided that if the US were to attack it would do so with allied nations but without the UN, in order to circumvent what would almost certainly be a veto by Russia.


NSA officers ‘spy on love interests’

  • The spying has been given the codename  ‘LOVEINT’
  • LOVEINT has been going on for at least  the past decade
  • This revelation is the latest in a summer  of disclosures about how far the US government spy program  reaches

By  Ryan Gorman

PUBLISHED: 23:13 EST, 23  August 2013 |  UPDATED: 23:14 EST, 23 August 2013

National Security Agency officers have been  spying on people they’ve been eying.

NSA officers have been using agency tools to  keep tabs on their partner or spouse for at least the past decade, according to  a Wall Street Journal report Friday. The spying isn’t often, but is has been  given its own code name, according to the Journal, ‘LOVEINT.’

Instances of spying have averaged roughly one  a year, a mere drop in the 3,000 violations of privacy rules a year bucket the  spy agency recently disclosed.

Spy central: The National Security Agency headquarters in Fort Meade, Maryland 

Spy central: The National Security Agency headquarters  in Fort Meade, Maryland


Among the thousands of violations each year,  there have only been a handful of wilful  abuses of agency resources in the past decade, according to an NSA statement  quoted by the Journal  report.

‘NSA has zero tolerance for willful  violations of the agency’s authorities [and responds] as appropriate,’ the  statement said.

Each known instance of LOVEINT surveillance  was against a spouse or partner, the Journal reported, adding that each act was  met with ‘administrative action of discipline.’

The incidents are often self-reported and are  revealed during polygraph tests administered during the renewal of a security  clearance, according to the Journal.

Still not the end: Media reports indicate further disclosures about NSA spying will be made in the coming weeks by both The Guardian and the New York Times 

Still not the end: Media reports indicate further  disclosures about NSA spying will be made in the coming weeks by both The  Guardian and the New York Times


Senate intelligence committee chairwoman  Senator Dianne Feinstein (D – CA) told the Journal that the agency has made  Congress aware of the ‘isolated cases’ of LOVEINT and did not involve  surveillance of Americans, rather people overseas.

Clearly, any case of noncompliance is  unacceptable, but these small numbers of cases do not change my view that NSA  takes significant care to prevent any abuses… when errors are identified, they  are reported and corrected,’ Feinstein added.

This revelation comes amid a summer of  shocking reports about the amount of surveillance carried about by the federal  government and may lead to further disillusionment with the  agency.

Additional surveillance disclosures from  former security contractor Edward Snowden are expected to be published by both  the British newspaper The Guardian and the New York Times in the coming weeks,  according to media reports.

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White House knew extent of IRS scandal in April, says report

Wall Street Journal says counsel learned of targeting of conservative groups on 22 April, 18 days before president

  •,              Monday 20 May 2013 12.33 EDT
President Obama

President Barack Obama has been under pressure in recent weeks. Photograph: Alex Wong/Getty Images

Barack Obama‘s hopes of moving beyond the scandals that have dogged his administration were dashed on Monday, when it was disclosed that the White House had been informed last month about the details of the IRS affair.

After being forced on the defensive all last week on the apparent targeting of conservative groups by the Inland Revenue Service, the Benghazi consulate attack and the seizure of Associated Press phone records by the Department of Justice, the White House had hoped to move on this week, switching attention to other issues, primarily foreign affairs.

But the Wall Street Journal on Monday picked up an important discrepancies in the official White House versions of how much it knew about the IRS scandal in advance.

Obama has said that he learned about the scandal at the same time as the press, on 10 May. Last Monday Obama’s press spokesman, Jay Carney, said that the White House counsel Kathryn Ruemmler had been informed in April that an independent audit of the scandal had been completed, but had not been given the findings. A White House adviser, Dan Pfeiffer, interviewed on CBS on Sunday, echoed Carney’s line, saying the White House had been made aware of the scandal a few weeks ago by the Treasury, although not the full details of what had happened.

But the WSJ reported that Ruemmler learned from Treasury lawyers on 22 April that “a small number of line IRS employees had improperly scrutinised certain … organizations by using words like ‘tea party’ and ‘patriot'”.

Republicans, who have been trying to establish a link between the IRS scandal and the White House, seized on the apparently contradictory statements. “I just don’t know who I can believe anymore,” said Brendan Buck, spokesman for the Republican House Speaker, John Boehner.

The scandal involves an IRS office in Cincinnati, Ohio, which selected for extra scrutiny conservative groups with words such as ‘tea party’ or ‘patriot’ in their titles. The IRS denies this was for partisan reasons but admitted applications by these groups for tax-exempt status have been delayed.

In another sign that the scandals will not die away quickly, Tea Party groups are to launch a lawsuit against the IRS for discriminating against them. Another came in a letter sent to the IRS on Monday by the Senate finance committee.

The committee chairman Max Baucus, a Democrat, and Orrin Hatch, the ranking Republican, list a series of demands for internal documents relating to the scandal and the names and position of everyone who had been either involved in or informed about it. The deadline for the hand-over of the material is 31 May.
A House hearing began on Friday but the Senate enjoys a lot more power. In their joint letter, Baucus and Hatch wrote: “Targeting applicants for tax-exempt status using political labels threatens to undermine the public’s trust in the IRS. The lack of candor in advising the Senate of this practice is equally troubling.”

In a separate development, the Washington Post on Monday disclosed new details of the Obama administration‘s crackdown on leaks to journalists.

Court documents obtained by the Post showed that the Department of Justice tracked the comings and goings to the State Department of James Rosen, the chief Washington correspondent of Fox News.

Officials wanted to track his connections with Stephen Jin-Woo Kim, a former state department adviser, in relation to alleged leaks of classified information about North Korea in 2009. By using Rosen’s security badge access, Justice officials were able to track the timings of his visits to the State Department. They also seized Rosen’s phone records and personal emails. Kim was indicted by a grand jury in August 2010, over an alleged conversation with Rosen about a North Korea nuclear bomb test.

The Department of Justice’s seizure of AP phone records in relation to a leak of a CIA operation to stop a bomb plot hatched in Yemen has not yet had the same traction as the IRS scandal. But the involvement of a Fox News reporter excited rightwing commentators on Monday.

The Obama administration has launched more actions against whistleblowers than any previous presidency, prompting accusations that it has launched a “war on journalism”.

FBI to older bomber in 2011: ‘We are watching you’

Parents of Boston Marathon bombing suspects defend their sons, and father reveals FBI interviewed Tamerlan Tsarnaev two years ago

Suspects’ mother: ‘I am 100% sure that this is a set-up’

James Legge

Saturday, 20 April 2013

The father of the suspected Boston Marathon bombers has revealed that the FBI questioned the older of the two brothers two years ago, about possible terrorist links.

Dzhokhar Tsarnaev and his 26-year-old brother Tamerlan, are suspected of carrying out Monday’s bombing, which killed three and injured over 150. Dzhokhar, 19, is in custody after a tense search last night, while his older brother was killed in a shootout with police the night before.

The pair are of Chechen origin, and had lived in the US for around ten years.

Speaking to the Wall Street Journal from Makhachkala in Russia’s Republic of Dagestan, the pair’s father said FBI agents talked to Tamerlan as a “person of interest” in 2011.

He said he was present at the time, but wasn’t worried: “They said, ‘We know what sites you are on, we know where you are calling, we know everything about you. Everything’. They said, ‘we are checking and watching’ – that’s what they said.”

“I knew what he was doing, where he was going. I raised my children right.”

He insisted that his boys were victims of a set-up, saying: “This is all lies. These are my children. I know my children.”

He also mentioned a domestic assault that Tamerlan had carried out in his past but brushed it off as a minor incident that involved the son’s first girlfriend.

Last night the FBI confirmed the questioning, saying a foreign government – which they didn’t name – asked them for information on Tamerlan.

The statement continued: “The request stated that it was based on information that he was a follower of radical Islam and a strong believer, and that he had changed drastically since 2010 as he prepared to leave the United States for travel to the country’s region to join unspecified underground groups.

“In response to this 2011 request, the FBI checked U.S. government databases and other information to look for such things as derogatory telephone communications, possible use of online sites associated with the promotion of radical activity, associations with other persons of interest, travel history and plans, and education history.

“The FBI also interviewed Tamerlan Tsarnaev and family members. The FBI did not find any terrorism activity, domestic or foreign, and those results were provided to the foreign government in the summer of 2011. The FBI requested but did not receive more specific or additional information from the foreign government.”

Online accounts have since suggested that the brothers were interested in Islam, supported Chechen independence, and had an interest in forgeries

And the men’s mother, Zubeidat Tsarnaeva said: “I am really sure. I am 100% sure that this is a set-up. My two sons are really innocent and I know that neither of them never, never, have talked about whatever they’re saying about now.”

She said “nobody talked about terrorism” in their house, and said she believed her sons were not involved in it.

She said her sons used to call her every day to ask how she was, saying: “Mama, we love you. Mama, how are you? We miss you,” adding: “It’s impossible, impossible for both of them to do such things, so I am really, really, really, really telling that this is a set-up.”

“If there is anyone who would know it would be me.”


Will new fed guidelines force companies to hire more employees with criminal pasts?

Published February 23, 2013



Employers could be pressured to hire more workers with a criminal background  under recent guidelines issued by the federal government.

The Equal Employment Opportunity Commission’s guidelines warn businesses  about rejecting minority applicants who have committed a crime and recommend  they eliminate policies that “exclude people from employment based on a criminal  record.”

The EEOC says civil rights laws already prohibit different treatment for job  applicants who are of a different ethnic background but have identical criminal  histories. The update was issued out of concern that employers might  disproportionally exclude minorities from getting hired because more African  Americans and Hispanics are getting arrested and going to prison, according to  the guideline report.

But businesses and even one EEOC commissioner strongly objected to the  changes, saying they are confusing and go beyond the commission’s  authority.

“The only real impact the new guidance will have will be to scare business  owners from ever conducting criminal background checks,” said Commissioner  Constance Barker, who cast the lone nay vote and was one two George W. Bush  appointees on the Democrat-controlled commission at the time. Agency  commissioners approved the report in a 4-1 vote in April 2012.

Though the percentage of working-age Americans with a criminal record has  increased significantly over the past 20 years, African Americans and Hispanics  are arrested two to three times as much compared with the rest of the U.S.  population, the report states.

The commission report also states that businesses that continue to use  background checks, in spite of the recommendation, should limit their inquires  to criminal records related only to the open job.

The guidance is not legally binding, but the commission will use it as a  basis of enforcing discrimination claims.

Barker, nominated by former President George W. Bush in 2008 and nominated  for a second term by President Obama in 2011, said failing to get public input  on the hastily compiled final report before voting showed an “utter and blatant  lack of transparency.”

She also said the EEOC’s major shift in guidance from the past 22 years had  “far exceeded its authority as a regulatory commission.”

Though ex-convicts seeking work are not protected under Title VII of the 1964  Civil Rights Act, the EEOC guidelines suggest that rejecting applicants because  of their criminal record is not enough.

Instead, businesses must also prove the criminal history would exclude an  applicant from a specific job or duties and consider such factors as how long  ago the crime was committed.

The guidance tells businesses “they are taking a tremendous risk” by running  such checks, Barker added.

The report also says federal law preempts state laws, including ones that  would prohibit hiring ex-convict for some jobs, such as home health-care  workers. So if companies reject a minority with a criminal history for the  health-care job, for example, they now face a potential discrimination suit  under Title VII.

“It’s very, very confusing,” said Kevin Connell, chairman of the Florida-base  employment and tenant screening company “You could be doing  everything in your power to follow your own state’s guidance and the EEOC could  still come after you.”

Carol Miaskoff, the commission’s acting associate legal counsel, told on Friday that the guidance doesn’t preempt and conflict with all  local laws.

She also disagreed with the argument that the commission has overstepped its  authority.

“Clearly, the four commissioners who voted disagreed and thought it was  within the scope of their authority,” said Miaskoff, adding the commission has  provided such guidance since the 1980s.

Though the commission’s intent appears to be to increase minority hiring, the  impact of the policy changes could have the opposite impact.

Studies published by the University of Chicago Legal Forum and the Journal of  Law and Economics show businesses are much less likely to hire minority  applicants when background checks are banned, as reported by The Wall Street  Journal.

Read more:

FDA withheld documents of defective defibrillator device to avoid embarrassing the manufacturer – and itself, a union claims in court.

Union Says FDA Is Hiding Document


LOS ANGELES (CN) – The FDA wrongfully redacted “almost every portion” of a crucial report on problems with an implanted heart defibrillator, to avoid embarrassing the manufacturer – and itself, a union claims in court.

Unite Here sued the U.S. Food & Drug Administration in Federal Court.

The FDA is the only defendant.

The union seeks information on FDA reports on implantable cardioverter defibrillator devices (ICDs) manufactured and sold by St. Jude Medical (SJM).

It claims the devices have been implanted in “thousands of patients,” including Unite Here members.

“This is an action under FOIA challenging defendant FDA’s unexplained insistence on redacting almost every portion of an inspector’s report which identified actual or potential problems with a medical device implanted inside thousands of patients,” the complaint states. “FDA failed to explain its redactions beyond simply citing FOIA Exemption 4 (trade secrets or confidential information, 5 USC §552(b)(4)), but such exemption cannot reasonably be construed to preclude release of information likely available from other sources such as the company’s own published product descriptions, and no of aid to competitors in copying a company’s product but instead likely showing the company put public health at risk. Construing the exemption to insulate from release all mention of patient ailments related to a medical devices [sic] would be contrary to the purpose of FOIA. Embarrassment due to exposure of public health risks is not an interest protected by Exemption 4. Plaintiff appealed administratively but this appeal has gone unaddressed for substantially longer than the customary deadline for rendering a decision.”

Unite Here says its health benefits plans provide care for “hundreds of thousands” of member and their families, and cover the implantable defibrillators and other medical products regulated by the FDA.

St. Jude Medical is not a defendant, though the 44-page complaint focuses upon its medical products.

The complaint states: “SJM’s ICDs are devices installed inside patients’ chests to treat irregular heartbeats known as arrhythmias. They contain a cable (known as a ‘lead’) which runs through the patients’ veins into their hearts through which an electric shock is supposed to be provided by a battery-powered device installed inside the patient’s chest.

“FDA issued a recall of SJM’s Riata-brand ICDs in a Class 1 recall, one of FDA’s most serious classes, due to serious problems with its leads. The Wall Street Journal has reported claims by physicians that years before SJM and FDA took action as to these devices, several physicians had warned SJM of problems with the devices.

“SJM’s later brand of ICD known as the Durata has also been questioned publicly in the press by some prominent physicians. The Durata has been implanted in thousands of patients. SJM has posted publicly hundreds of pages of information about the materials used inside the Durata and their configuration, and about the problems SJM sought to avoid.”

In late 2012, FDA inspectors reviewed St. Jude Medical’s procedures and records for testing its Durata defibrillators and issued a report, which was publicly posted in redacted form by St. Jude, as part of an SEC filing, according to the complaint.

“On October 31, 2012, plaintiff requested from FDA an unredacted version of such report, explaining why plaintiff believed the redactions in SJM’s posting were excessive under the law,” Unite Here says.

In response, the FDA posted a “somewhat-less-redacted version” of the report on its website, the only additional information being that the product was Durata, which was already known thanks to postings by St. Jude, the complaint states.

The FDA reports are known in the industry as 483 Reports: i.e., FDA Form 483.

The complaint states: “FDA has still redacted every description of the problems considered by the inspector and SJM so that it is impossible to know whether they were purely cosmetic or instead serious risks of device failure and heart attack. For example, here is how several inspectional findings look after the redactions:

“‘You failed to follow your written test procedures during design verification testing of your [ ] test which ensures the [ ] is not greater than [ ] to prevent a potential [ ].’

“‘Your Durata risk analyses (2007) identified canine testing as a mitigation addressing [ ]. *** you failed to evaluate one of the study results which stated, [ ].’

“‘Your [ ] out for all [ ] leads states a severity of [ ] and probability of [ ] when your design team stated the Durata design decreased the risk of this [ ] root cause.'” (Empty brackets and asterisks as in complaint. Citations to paragraphs omitted.)

The only explanation the FDA offered for the censoring of the reports was Exemption 4.

But Unite Here says: “FDA cannot carry its burden of showing the requested information is covered by Exemption 4, including:

“(a) FDA deleted all discussion of problems with the devices and patients so as to make it impossible to know whether FDA and SJM were merely concerned with cosmetic issues or instead with serious health issues, but the issues arising with ICD devices and patients and the specific components and configuration of Durata are already a matter of public record and not even close to a trade secret, for indeed SJM discusses them at length on its website;

“(b) information which may embarrass FDA and SJM showing there has been lax safety review up until now is not within the protection of Exemption 4, which instead protects only information useful in ordinary competition such as revealing a formula which a competitor could borrow from SJM. Unite Here is not a competitor and there is no evidence that competitors would use the information in competition which is being sought by Unite Here. Nor is there evidence that FDA’s future access to information would be retarded by release of the information sought by plaintiff, as FDA has ample power both under the law and in practice to obtain information from medical device manufacturers.”

Unite Here wants to see the unredacted FDA reports on SJM’s Durata testing and review, or a copy for the court’s review for release to plaintiff.

They are represented by Andrew Kahn with Davis, Cowell & Bowe in San Francisco.

FBI Agent in Petraeus Case Under Scrutiny: Agent in question sent shirtless photos to Ms. Kelley well before the email investigation began

The Wall Street Journal

  • U.S. NEWS
  • Updated November 12, 2012, 10:24 p.m. ET


WASHINGTON—A federal agent who launched the investigation that ultimately led to the resignation of Central Intelligence Agency chief David Petraeus was barred from taking part in the case over the summer due to superiors’ concerns that he was personally involved in the case, according to officials familiar with the probe.

After being blocked from the case, the agent continued to press the matter, relaying his concerns to a member of Congress, the officials said.

New details about how the Federal Bureau of Investigation handled the case suggest that even as the bureau delved into Mr. Petraeus’s personal life, the agency had to address conduct by its own agent—who allegedly sent shirtless photos of himself to a woman involved in the case prior to the investigation.


Associated PressJill Kelley leaves her house Monday.

FBI officials declined to identify the agent, so he couldn’t be reached to give his side of the story. The agent is now under investigation by the Office of Professional Responsibility, the internal-affairs arm of the FBI, according to two officials familiar with the matter.

The revelations address how the investigation first began and ultimately led to Mr. Petraeus’s downfall as director of the CIA. The new developments also raise questions about the role played by the FBI and the adequacy of notification to administration and congressional leaders about the scandal.

The FBI agent who started the case was a friend of Jill Kelley, the Tampa woman who received harassing, anonymous emails that led to the probe, according to officials. Ms. Kelley, a volunteer who organizes social events for military personnel in the Tampa area, complained in May about the emails to a friend who is an FBI agent. That agent referred it to a cyber crimes unit, which opened an investigation.

However, supervisors soon became concerned that the initial agent might have grown obsessed with the matter, and prohibited him from any role in the investigation, according to the officials.

One official said the agent in question sent shirtless photos to Ms. Kelley well before the email investigation began, and FBI officials only became aware of them some time later. Eventually, supervisors told the agent he was to have nothing to do with the case, though he never had a formal role in the investigation, the official said.


The Charlotte Observer/Associated PressPaula Broadwell, at the center of the Petraeus case, poses with her biography of the former CIA Chief in January.

The agent, after being barred from the case, contacted a member of Congress, Washington Republican David Reichert, because he was concerned senior FBI officials were going to sweep the matter under the rug, the officials said. That information was relayed to top congressional officials, who notified FBI headquarters in Washington.

By that point, FBI agents had determined the harassing emails had been sent by Paula Broadwell, who had written a biography of Mr. Petraeus’s military command.

Investigators had also determined that Ms. Broadwell had been having an affair with Mr. Petraeus, and that the emails suggested Ms. Broadwell was suspicious of Ms. Kelley’s attention to Mr. Petraeus, officials said.

The accusatory emails, according to officials, were sent anonymously to an account shared by Ms. Kelley and her husband. Ms. Broadwell allegedly used a variety of email addresses to send the harassing messages to Ms. Kelley, officials said.

One asked if Ms. Kelley’s husband was aware of her actions, according to officials. In another, the anonymous writer claimed to have watched Ms. Kelley touching “him” provocatively underneath a table, the officials said.

The message was referring to Mr. Petraeus, but that wasn’t clear at the time, officials said. A lawyer for Ms. Kelley didn’t respond to messages Monday seeking comment on the anonymous emails or on the alleged emails from the FBI agent. A lawyer for Ms. Broadwell also didn’t respond. Neither woman has replied to requests to speak about the matter.

By then, what began as a relatively simple cyberstalking case had ballooned into a national security investigation. Mr. Petraeus and Ms. Broadwell, both of them married, had set up private Gmail accounts to contact each other, according to several officials familiar with the investigation. The FBI at one point was concerned the CIA director’s email had been accessed by outsiders.

After agents interviewed Ms. Broadwell, she let them examine her computer, where they found copies of classified documents, according to the officials. Both Mr. Petraeus and Ms. Broadwell denied that he had given her the documents, and FBI officials eventually concluded they had no evidence to suggest otherwise.

Even as the probe of the relationship between Mr. Petraeus and Ms. Broadwell intensified in late summer and early fall, authorities were able to eventually rule out a security breach, though intelligence officials became concerned Mr. Petraeus had left himself exposed to possible blackmail, according to officials.

On Monday night, reporters watching Ms. Broadwell’s home in Charlotte, N.C., saw federal agents conduct what appeared to be a search. An FBI spokeswoman confirmed agents were at the home but declined to say what they were doing.

A day after the Nov. 6 election, intelligence officials presented their findings to the White House. Mr. Petraeus met with White House officials last Thursday and announced his resignation the following day.

Lawmakers on Capitol Hill have questioned whether Mr. Petraeus needed to resign over the affair, and some have argued that the FBI should have alerted both the White House and Congress much earlier to the potential security implications surrounding Mr. Petraeus.

In a separate twist in the tangled matter of Mr. Petraeus’s resignation, the CIA disputed a theory advanced by Ms. Broadwell that insurgents may have attacked the U.S. consulate and a CIA annex in Benghazi, Libya, on Sept. 11 in a bid to free militants being held there by the agency. Ms. Broadwell suggested that rationale for the consulate attack in an address at the University of Denver on Oct. 26.

“I don’t know if a lot of you had heard this, but the CIA annex had actually taken a couple of Libyan militia members prisoner and they think the attack on the consulate was an attempt to get these prisoners back,” she said then. “It’s still being vetted.”

A CIA spokesman said there were no militant prisoners there, noting that President Barack Obama ended CIA authority to hold detainees in 2009. “Any suggestion that the agency is still in the detention business is uninformed and baseless,” said the spokesperson.

Some critics pointed to Ms. Broadwell’s remarks in Denver as an indication that she may have been passing on classified information, leading to speculation that Mr. Petraeus may have been the source. Based on descriptions by U.S. officials, the romantic relationship had ended by then.

In addition, the source of her comment may not have been intelligence information, but news reports. Earlier in her address, she cited findings of a report that day by Fox News. Immediately after, she mentioned the possibility that the CIA had held militants at the site, which the Fox report also mentioned.

The Sept. 11 consulate attack resulted in the deaths of U.S. Ambassador Christopher Stevens and three other Americans. One person briefed on U.S. intelligence said that reports focused on two main motives for the attack: inspiration from the violent protest that day at the U.S. embassy in Cairo, and the exhortation of al Qaeda leader Ayman al Zawahiri to avenge the death of his second in command. The possibility of attackers trying to free detainees never came up, this person said.

This week, lawmakers are slated to receive a series of closed-door briefings on both Benghazi and the FBI investigation that turned up the affair between Mr. Petraeus and Ms. Broadwell. The Senate Foreign Relations Committee has one such briefing on Benghazi scheduled Tuesday. On Wednesday, leaders of the House intelligence committee—Rep. Michael Rogers, a Michigan Republican who chairs the panel and Rep. C.A. Dutch Ruppersberger of Maryland, the top Democrat—will be briefed by FBI Deputy Director Sean Joyce and acting CIA director Michael Morell.

Senate intelligence committee staffers are working to schedule similar briefings. On Thursday, both the House and Senate intelligence committees were already slated to receive testimony on Benghazi from top intelligence and law-enforcement officials. The investigation that uncovered the affair is now expected to also be a central issue at those hearings, which won’t be public.

Sen. Dianne Feinstein (D., Calif.), who chairs the Senate intelligence committee complained Sunday that she and her colleagues should have been told of the Petraeus-Broadwell affair when the FBI discovered it because of national-security concerns.

Write to                 Devlin Barrett at, Evan Perez at and Siobhan Gorman at

A version of this article appeared November 12, 2012, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: FBI Agent In Petraeus Case Under Scrutiny.

Did hackers uncover Petraeus’ saucy affair webmails before FBI? And How they may of Hacked it

Engineering Evil: Need second confirmation

Biographer minx previously exposed in Stratfor caper

By John LeydenGet more from this author

Posted in Security, 12th November 2012 17:24 GMT


FBI agents may not have been the first to rumble the affair between CIA director David Petraeus and his biographer that led to the four-star general’s resignation on Friday.

Anyone with a copy of the leaked Stratfor databases, a half-decent PC, some political nous and a barrel of luck could have uncovered the fling months ago, it has emerged.

Paula Broadwell, the former spy chief’s mistress and biographer, was a customer of Stratfor, the private intelligence outfit that was attacked by Anonymous hackers last year. Buried in the megabytes of subsequently leaked information was Broadwell’s Yahoo! email address and her hashed Stratfor login password.

A security researcher says he spent the weekend recovering her original password from the MD5 hash, or at least a passphrase that will generate an identical hash value, using a brute-force approach and 17 hours of number-crunching on his computer. If the password is indeed the same one she used for Stratfor, and she also used it for her Yahoo! account, then anyone before now could have used the information at hand to compromise her webmail and follow a trail of messages to her illicit liaison with America’s spook supremo.

How a top general came to fall on his sword

Petraeus, 60, resigned on Friday after the Feds discovered his dalliance with Broadwell, a married 40-year-old former military officer. An FBI probe was launched months ago when another woman alleged Broadwell had sent her “harassing” emails, the New York Times reports. This is contrary to earlier reports suggesting agents began monitoring on the spy boss’s personal Gmail account over concerns it had been compromised by Chinese hackers.

An anonymous “senior US military official” named Jill Kelley, a 37-year-old from Tampa in Florida, as the woman who complained to the FBI; she is an executive on the State Department’s liaison to the military’s Joint Special Operations Command, and is known to both Petraeus and Broadwell.

It is alleged Broadwell used her address to send unpleasant emails to Kelley, possibly perceiving her as a love rival, that included extracts of sexually suggestive messages copied from a Gmail account setup by Petraeus. The emails sent to Kelley warned her to “stay away from” the general, the Wall Street Journal claims. This linked the complaint to Petraeus, a breadcrumb trail picked up by investigators – and potentially anyone else who was able to log into the Yahoo! account.

Cracking her Stratfor password – and potentially unlocking her Yahoo! inbox too

Broadwell’s Stratfor password was fairly strong; if it was one character longer, it would have been beyond the grasp of security researcher Robert Graham of Errata Security. He used a cracking utility called oclHashcat and a GPU accelerator to brute force the original password from its MD5 hash value, or at least a phrase that would generate the same value, eventually finding out the password after 17 hours of exhaustive crunching.

It is possible she used the same combination of eight characters elsewhere, perhaps even for her Yahoo! account. This would have given anyone who cracked her password a way to access her webmail, assuming they had decided to target Broadwell months before she hit the headlines.

However, Graham can find no reference to the password after a Google search, suggesting that if a hacker had compromised the password then it wasn’t an Anonymous or LulzSec bod, who often like to brag in public and reveal stolen credentials.

Graham said his exercise in cracking Broadwell’s password was justified because her account and password had already been blown.

Meanwhile some are beginning to speculate that Google’s location tracking of IP addresses of Gmail accounts might have betrayed the identity of the adulterous CIA chief. The Atlantic reports Petraeus used a pseudonym to set up his private Google mail account, but this didn’t prevent his identity from being gleaned by investigators monitoring Broadwell’s email accounts. It is believed that rather than exchanging emails, the two lovers swapped explicit messages using shared access to the same Gmail account.

Tinker, tailor, shagger, spy

‪Petraeus‬’ affair with Broadwell began after the former architect of the US counterinsurgency strategy in Iraq retired from the military and joined the CIA last year, according to a former aide.

‪Petraeus has been married ‬for ‪37 years to Holly Petraeus and the couple have two children, including a son serving in Afghanistan.‬ Justice Department and high-level administration officials, including Attorney General Eric Holder, have reportedly been aware of the investigation into Broadwell since spring but things only came to a head over the last fortnight.

FBI agents interviewed Petraeus, who admitted the fling. A report was submitted to Director of National Intelligence James Clapper last week by the Feds. They noted no crime had been committed‪, ‬but the spy chief‪ nonetheless‬ understood his position was untenable.

In a resignation statement, ‪Petraeus‬ said:

Yesterday afternoon, I went to the White House and asked the President to be allowed, for personal reasons, to resign from my position as D/CIA. After being married for over 37 years, I showed extremely poor judgment by engaging in an extramarital affair. Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours. This afternoon, the President graciously accepted my resignation.

Lawmakers left in the dark are beginning to raise questions over the Petraeus affair and the timing of his resignation days before an important hearing. ‪Petraeus‬ was due to testify before Congress regarding the Obama administration’s handling of a terrorist attack in Benghazi that led to the death of four Americans, including US ambassador Chris Steven.

“We received no advanced notice. It was like a lightning bolt,” said Democratic Senator Dianne Feinstein of California, who heads the Senate Intelligence Committee, AP reports.

Some commentators are upset ‪Petraeus has been obliged to resign‬ for behaviour that in other Western countries may have passed almost without notice. Predictably the whole business has quickly become a butt of jokes.

Patriot hacker ‏th3j35t3r joked: “Give Petraeus a break, having sex w/ ur biographer is unquestionably more exciting than having sex w/ ur autobiographer. Right ‪#assange‬?” ®

Yet more security concerns emerge about Paula Broadwell’s access to Petraeus:” disregarded normal CIA security procedures”

Yet more security concerns emerge about Paula Broadwell’s access to Petraeus

By Max Fisher , Updated: November 10, 2012

CIA Director David Petraeus (Photo by Mark Wilson/Getty Images)

Newly reported information about CIA Director David Petraeus’s alleged affair with Paula Broadwell, the military intelligence officer who also co-wrote a biography of the retired general, has focused more and more on the security risks that their secret relationship may have posed to the famously security-obsessed Central Intelligence Agency.

The FBI investigation that unraveled the story seems to have begun with threatening e-mails that Broadwell allegedly sent to another woman close to Petraeus, according to an extensive report by The Washington Post’s Sari Horwitz and Greg Miller. Investigators initially feared that Petraeus’s personal e-mail had been compromised. The Wall Street Journal reported that Broadwell or someone close to her had attempted to access that  account. Given the sensitivity of even Petraeus’s personal e-mail, outside access to its contents could have presented a significant national security risk.

Broadwell’s access to Petraeus appears to have been high, perhaps inappropriately so, even before the e-mail threats and FBI investigation. The Associated Press reports that some in the CIA had worried at how freely their director had invited her into his world, and at the spotlight-seeking Broadwell’s care with what she learned.

But her access was unsettling to members of the secretive and compartmentalized intelligence agency, where husbands and wives often work in different divisions, but share nothing with each other when they come home because they don’t “need to know.”

In one incident that caught CIA staff by surprise, Broadwell posted a photograph on her Facebook page of Petraeus with actress Angelina Jolie, taken in his 7th floor office where only the official CIA photographer is permitted to take photos. Petraeus had apparently given Broadwell the photo just hours after it was taken.


Posting a photo of Petraeus with a movie star on a Facebook page is obviously not much of a national security breach. But what may have raised concern is the pair’s apparent disregard, at least in this incident, for following security procedures and for circumspection. If she was posting unapproved photos of the CIA director’s office on her Facebook wall, then, you have to wonder, what did she see as too sensitive for social media but fine to share with friends? Or what did Petraeus feel was appropriate to share with her privately?

The point is not that Broadwell had access to anything more sensitive than a forbidden photo of her secret lover’s office, or that Petraeus had to share anything more. The point is that they, based on the reports out so far, disregarded normal CIA security procedures — which would also require disclosing a secret affair, given the potential for blackmail — and appeared to have invented their own. That Petraeus would invite someone into his personal and professional world — especially someone who was well known for being temperamental — without regard for normal security standards would be no small breach.


Why David Petraeus’s Gmail account is a national security issue: “enormous value to foreign hackers”

Posted by Max Fisher on November 10, 2012 at 11:14 am

CIA Director David Petraeus speaks during a high-level meeting in the White House Situation Room. (Pete Souza/The White House via Getty Images)

The beginning of the end came for CIA Director David Petraeus when Paula Broadwell, a younger married woman with whom he was having an affair, “or someone close to her had sought access to his email,” according to the Wall Street Journal’s description of an FBI probe. Associates of Petraeus had received “anonymous harassing emails” that were then traced to Broadwell, ABC’s Martha Raddatz reported, suggesting she may have found their names or addresses in his e-mail.

The e-mail account was apparently Petraeus’s personal Gmail, not his official CIA e-mail, according to the Wall Street Journal. That’s a big deal: Some of the most powerful foreign spy agencies in the world would love to have an opening, however small, into the personal e-mail account of the man who runs the United States’ spy service. The information could have proved of enormous value to foreign hackers, who already maintain a near-constant effort to access sensitive U.S. data.

If Petraeus allowed his Gmail security to be compromised even slightly, by widening access, sharing passwords or logging in from multiple addresses, it would have brought foreign spy agencies that much closer to a treasure trove of information. As the Wall Street Journal hints, investigators were concerned about Petraeus’s Gmail access precisely because of the history of foreign attempts to access just such accounts:

Security officials are sensitive to misuse of personal email accounts—not only official accounts—because there have been multiple instances of foreign hackers targeting personal emails.

A personal e-mail account like Petraeus’s almost certainly would not have contained any high-level intelligence; he probably didn’t keep a list of secret drone-base coordinates on his Google docs account. But access to the account could have provided telling information on, for example, Petraeus’s travel schedule, his foreign contacts, even personal information about himself or other senior U.S. officials.

Private e-mail services like Google’s, though considered significantly more secure than most, still have susceptibilities to foreign intrusion. And it happens. Technology writers have sometimes discussed what one writer called the “password fallacy,” the false sense of safety created by access systems such as Google’s that balance security against ease of use. Even with Google’s extra security features, the company must also avoid making security so onerous as to drive away customers, making it an easier target for foreign hackers even before Petraeus possibly started sharing access and thus diluting the account’s integrity. And, as a Wired magazine investigation demonstrated in August, personal e-mail accounts often allow hackers access to other personal accounts, worsening both the infiltration and the damage.

All of this might sound a little overly apprehensive – really, U.S. national security is compromised because the CIA director’s personal Gmail account might have been a little easier to hack? – until you start looking at the scale and sophistication of foreign attempts to infiltrate U.S. data sources. Chinese hacking efforts, perhaps the best-known but nowhere near the only threat to U.S. networks and computers, suggest the enormous scope and ferocious drive of foreign government hackers.

Some Americans who have access to sensitive information and who travel to China describe going to tremendous lengths to minimize government efforts to seize their data. Some copy and paste their passwords from USB thumb drives rather than type them out, for fear of key-logging software. They carry “loaner” laptops and cellphones and pull out cellphone batteries during sensitive meetings, worried that the microphone could be switched on remotely. The New York Times called such extreme measures, which also apply in other countries, “standard operating procedure for officials at American government agencies.”

Even still, the publicly reported incidents of successful Chinese hacking – such as a March intrusion that stole a $1 billion, 10-year research project overnight – suggest that the efforts might be near-continuous and the successes rampant. A 2010 Chinese infiltration of the U.S. Chamber of Commerce ended up funneling weeks of corporate data; even after the chamber thought it had reestablished security, it discovered that an office printer and a corporate apartment thermostat were still sending data – who knows what kind? – back to China. You have to wonder what a similar infiltration into the private e-mail account of the director of the Central Intelligence Agency might have turned up.

Of course, the CIA director is not the Chamber of Commerce, which may explain why the FBI’s counter-intelligence monitoring is so sensitive that just Broadwell’s access to his Gmail account triggered an investigation. But the fact that the FBI looked so hard and so carefully – and that Petraeus lost his directorship of the CIA over an intrusion that many of us might consider minor or even routine – underscores the potential risk to U.S. intelligence entailed in Petraeus’s, or Broadwell’s, alleged misuse of his personal account.

Briton murdered in China fed tips to British intelligence

By Mark Hosenball | Reuters – 7 hrs ago

  • British businessman Neil Heywood poses for a photograph at a gallery in Beijing, in this handout picture dated April 12, 2011. REUTERS/
  • British businessman Neil Heywood …

WASHINGTON (Reuters) – A British businessman murdered in China in a high-profile case of political intrigue was an informal source of information for Britain’s foreign intelligence agency, MI6, two sources familiar with the matter said.

              The sources confirmed the substance of a news report earlier Tuesday alleging that U.K. businessman Neil Heywood, who died under suspicious circumstances a year ago in the Chinese city of Chongqing, had been in contact with MI6 and had been a “willful and knowing informant.”

              The sources, who spoke on the condition of anonymity because of the matter’s sensitivity, reiterated public denials by top British government officials that Heywood had ever been an MI6 staff officer. In an April letter to a member of Parliament, William Hague, Britain’s foreign secretary, declared that “Mr. Heywood was not an employee of the British government in any capacity.”

              When asked about the Heywood allegation today, a spokeswoman for the British embassy in Washington said: “We don’t comment on intelligence matters.”

The Wall Street Journal reported on Tuesday that Heywood’s contact in MI6 had once described him as “useful.” The newspaper said Heywood, who acted as a “freelance” consultant advising companies and individuals on business in China, for about a year had provided British intelligence with information on intrigue inside the family of Bo Xilai, a Chinese Communist Party boss whose spectacular downfall earlier this year caused political upheaval.

              The Journal reported that Heywood had not been paid for information by MI6 and that the British agency had not given him “tasking,” meaning it had not asked him to perform specific assignments or dig up specific information.

The Journal said Heywood had dealings with various British companies and politicians, including a member of the House of Lords who met Heywood several times in the company of his MI6 contact.

              While Heywood’s high-level Chinese contacts were impressive, there are indications that British authorities regarded him as unreliable and treated him and his information with caution.

              According to news reports and official Chinese accounts, Heywood was murdered after he flew last November to Chongqing to meet with members of Bo’s family. Bo, then that city’s Communist Party boss, had been expected to be promoted to the Party’s highest echelon this year.

              According to an account presented at the trial of Gu Kailai, Bo’s wife and Heywood’s alleged killer, Gu murdered Heywood by poisoning him with cyanide in his hotel room in Chongqing.

              Heywood’s body was cremated without an autopsy. His family was told that he died of a heart attack, while the Journal said British authorities were advised he had died from excessive alcohol consumption.

              The alleged murder plot against Heywood began to unravel after Chongqing’s former police chief, Wang Lijun, took refuge briefly in a U.S. consulate in China and reportedly told American diplomats about Gu’s role in Heywood’s murder and her husband’s involvement in corruption.

              Gu was subsequently convicted of Heywood’s murder and given a suspended death sentence. Bo Xilai was sacked from the Communist Party’s Politburo and now awaits trial on charges of corruption and abuse of power.

              (Reporting by Mark Hosenball; Editing by Warren Strobel and Ciro Scotti)

Stingrays: The Biggest Technological Threat to Cell Phone Privacy You Don’t Know About

October 22, 2012 | By Hanni Fakhoury  and Trevor Timm

On Friday, EFF and the ACLU submitted an amicus brief in United States v. Rigmaiden, a closely-followed case that has enormous consequences for individuals’ Fourth Amendment rights in their home and on their cell phone. As the Wall Street Journal explained today, the technology at the heart of the case invades the privacy of countless innocent people that have never even been suspected of a crime.

Rigmaiden centers around a secretive device that federal law enforcement and local police have been using with increased frequency: an International Mobile Subscriber Identity locator, or “IMSI catcher.” These devices allows the government to electronically search large areas for a particular cell phone’s signal—sucking down data on potentially thousands of innocent people along the way—while attempting to avoid many of the traditional limitations set forth in the Constitution.

How Stingrays Work

The Stingray is a brand name of an IMSI catcher targeted and sold to law enforcement. A Stingray works by masquerading as a cell phone tower—to which your mobile phone sends signals to every 7 to 15 seconds whether you are on a call or not— and tricks your phone into connecting to it. As a result, the government can figure out who, when and to where you are calling, the precise location of every device within the range, and with some devices, even capture the content of your conversations. (Read the Wall Street Journal’s detailed explanation for more.)

Given the breadth of information that it can stealthily obtain, the government prefers the public and judges alike not know exactly how Stingrays work and they have even argued in court that it should be able to keep its use of the technology secret. The Electronic Privacy Information Center has filed a FOIA request for more information on Stingrays, but the FBI is dragging its feet and is sitting on 25,000 pages of documents explaining the device.

The Rigmaiden Case: An Illusory Warrant

In Rigmaiden, the government asked a federal judge in Northern California to order Verizon to assist in locating the defendant, who was a suspect in a tax fraud scheme. But after they received an order telling Verizon to provide the location information of an Aircard they thought to be the defendant’s, the government took matters into their own hands: they claimed this authorization somehow permitted its own use of a Stingray.

Not only did the Stringray find the suspect, Rigmaiden, but it also got the records of every other innocent cell phone user nearby.

The government now concedes that the use of the device was a “search” under the Fourth Amendment and claims it had a warrant, despite the fact that, as we explain in our brief, “the Order directs Verizon to provide the government with information and assistance, but nowhere authorizes the government to search or seize anything.”

In fact, the government’s application made no mention of an IMSI catcher or a Stingray, and only has a brief sentence about its plans buried at the end of an 18-page declaration: “the mobile tracking equipment ultimately generate[s] a signal that fixes the geographic position of the Target Broadband Access Card/Cellular Telephone.”

A judge initially signed off on this order, but clearly, the government did not accurately and adequately explain what it was really up to.

General Warrants: Unconstitutional, All You Can Eat Data Buffets

Beyond the government’s conduct in this specific case, there is an even broader danger in law enforcement using these devices to locate suspects regardless of whether they explain the technology to judges: these devices allow the government to conduct broad searches amounting to “general warrants,” the exact type of search the Fourth Amendment was written to prevent.

A Stingray—which could potentially be beamed into all the houses in one neighborhood looking for a particular signal—is the digital version of the pre-Revolutionary war practice of British soldiers going door-to-door, searching Americans’ homes without rationale or suspicion, let alone judicial approval. The Fourth Amendment was enacted to prevent these general fishing expeditions. As the Supreme Court has explained, a warrant requires probable cause for all places searched, and is supposed to detail the scope of the search to ensure “nothing is left to the discretion of the officer executing the warrant”.

But if uninformed courts approve the unregulated use of Stingrays, they are essentially allowing the government to enter into the home via a cellular signal at law enforcement’s discretion and rummage at will without any supervision. The government can’t simply use technology to upend centuries of Constitutional law to conduct a search they would be prevented from doing physically.

Stingrays Collect Data on Hundreds of Innocent People

And when police use a Stingray, it’s not just the suspects’ phone information the device sucks up, but all the innocent people around such suspect as well. Some devices have a range of “several kilometers,” meaning potentially thousands of people could have their privacy violated despite not being suspected of any crime. This is another fact the government didn’t fully explain to the magistrate judge in Rigmaiden.

The government now claims it protected privacy by deleting all third-party data on its own after it collected it. But the government’s unilateral decision to binge and purge comes with its own consequences. Now there’s no way to know what exactly the government obtained when it used the device.

Had the government told the court what it really was planning on doing and the amount of information it would obtain, the court may have exercised its constitutional role of ensuring the government narrowed its search. After all, it was for the court, not the government, to decide how best to balance the government’s need for information with third-party privacy, and any suspect’s future interest in access to potentially exculpatory information.

Enough Warrantless Excursions

Unfortunately, US government excuses for conducting warrantless searches are becoming all too familiar. Whether it’s the hundreds of thousands of searches for cell phone location information, the skyrocketing of warrantless surveillance of who and when you’re calling, or the NSA’s still-active warrantless wiretapping program, Americans are seeing their Fourth Amendment privacy rights under attack from all angles. We hope in this case and others like it, the court will prevent such violations of privacy from occuring again.

Several major Chinese banks have canceled participation in the annual meetings of the IMF and World Bank to be held in Tokyo next week

China banks pull out IMF Tokyo meet amid island row: WSJ

Posted 2012/10/02 at 10:37 pm EDT

TOKYO, Oct. 2, 2012 (Reuters) — Several major Chinese banks have canceled participation in the annual meetings of the IMF and World Bank to be held in Tokyo next week, the Wall Street Journal said on Wednesday, the latest sign that a territorial row is starting to hurt broader ties between Asia’s two biggest economies.

Chinese lenders that have pulled out of International Monetary Fund-related events include Agricultural Bank of China <601288.SS> and Bank of Communications <601328.SS>, while Bank of China <3988.HK> officials have yet to decide whether to attend the meetings, the newspaper said.

“Quite frankly, it’s Japan-China relations,” the paper quoted an official at the Tokyo branch of Agricultural Bank of China in explaining why the bank was pulling out.

Japan is scheduled to host the IMF and World Bank annual meetings for the first time in nearly half a century. About 20,000 people are expected to attend the event, making it one of the world’s largest international conferences.

Sino-Japanese relations deteriorated sharply after Japan in September bought the East China Sea islets that both Tokyo and Beijing claim, sparking anti-Japan protests across the country.

Japanese automakers such as Toyota Motor Corp <7203.T> and Nissan Motor Co <7201.T> are cutting back production in China following the anti-Japan protests that shuttered dealerships and darkened their sales outlook in the world’s biggest car market.

The disputed group of islands, called Senkaku in Japan and Diaoyu in China, are located near rich fishing grounds and potentially huge oil and gas reserves. Taiwan also asserts its own sovereignty over the islets.

China has sent its patrol ships into what Japan considers its territorial waters near the islands in recent weeks, prompting Japan to lodge protests against China.

(Reporting by Kiyoshi Takenaka; Editing by Michael Perry)

Lipitor drug mismarketed to women

2008 study posted for filing

Contact: Amy Molnar

Ithaca, N.Y. – September 17, 2008 – Lipitor has been the top-selling drug in the world and has accounted for over $12 billion in annual sales. It has been prescribed to both men and women to lower cholesterol and reduce the risk of heart attack and stroke in patients with common risk factors for heart disease. However, a new study appearing in the Journal of Empirical Legal Studies was unable to find high quality clinical evidence documenting reduced heart attack risk for women in a primary prevention context. Furthermore, advertising omits label information relevant to women.

Theodore Eisenberg of Cornell Law School and Martin T. Wells of Cornell University assembled studies for a meta analysis of drugs’ effects on cardiovascular risk, taking into account all relevant studies reporting risks for both men and women.

Not one of the studies that included women with a mixture of risk factors for heart attacks provided statistically significant support for prescribing Lipitor or other statins to protect against cardiovascular problems. Pfizer’s claims of clinical proof that Lipitor reduces risk of heart attack in patients with multiple risk factors for heart disease does not appear to be scientifically supported for large segments of the female population.

In addition, Lipitor’s advertising repeatedly fails to report that clinical trials were statistically significant for men but not for women. Unqualified advertising claims of protection against heart attacks may therefore be misleading. Pfizer’s advertising also does not disclose critical portions of the Lipitor FDA-approved label, which acknowledges the absence of evidence with respect to women.

“Our findings indicate that each year, reasonably healthy women spend billions of dollars on drugs in the hope of preventing heart attacks but that scientific evidence supporting their hope does not exist,” the authors conclude.



This study is published in the September 2008 issue of the Journal of Empirical Legal Studies. Media wishing to receive a PDF of this article may contact

Theodore Eisenberg is affiliated with Cornell Law School and can be reached for questions at

Journal of Empirical Legal Studies (JELS) fills a gap in the legal and social science literature that has often left scholars, lawyers, and policymakers without basic knowledge of legal systems. Always timely and provocative, studies published in JELS have been covered in leading news outlets such as the New York Times, the Wall Street Journal, the Economist, Forbes Magazine, the Financial Times, and USA Today.

Wiley-Blackwell was formed in February 2007 as a result of the acquisition of Blackwell Publishing Ltd. by John Wiley & Sons, Inc., and its merger with Wiley’s Scientific, Technical, and Medical business. Together, the companies have created a global publishing business with deep strength in every major academic and professional field. Wiley-Blackwell publishes approximately 1,400 scholarly peer-reviewed journals and an extensive collection of books with global appeal. For more information on Wiley-Blackwell, please visit or

Study: Banks to blame for over 800,000 unnecessary foreclosures

By Pro Publica Tuesday, September 11, 2012 16:25 EDT

A foreclosure sign. Photo: Wikimedia Commons.


By Paul Kiel ProPublica

Over the past several years, we’ve reported extensively on the big banks’ foreclosure failings. As a result of banks’ disorganization and understaffing — particularly at the peak of the crisis in 2009 and 2010 — homeowners were often forced to run a gauntlet of confusion, delays, and errors when seeking a mortgage modification.

But while evidence of these problems was pervasive, it was always hard to quantify the damage. Just how many more people could have qualified under the administration’s mortgage modification program if the banks had done a better job? In other words, how many people have been pushed toward foreclosure unnecessarily?

A thorough study released last week provides one number, and it’s a big one: about 800,000 homeowners.

The study’s authors — from the Federal Reserve Bank of Chicago, the government’s Office of the Comptroller of the Currency (OCC), Ohio State University, Columbia Business School, and the University of Chicago — arrived at this conclusion by analyzing a vast data set available to the OCC. They wanted to measure the impact of HAMP, the government’s main foreclosure prevention program.

What they found was that certain banks were far better at modifying loans than others. The reasons for the difference, they established, were pretty predictable: The banks that were better at helping homeowners avoid foreclosure had staff who were both more numerous and better trained.

Unfortunately for homeowners, most mortgages are handled by banks that haven’t been properly staffed and thus have modified far fewer loans. If these worse-performing banks had simply modified loans at the same pace as their better performing peers, then HAMP would have produced about 800,000 more modifications. Instead of about 1.2 million modifications by the end of this year, HAMP would have resulted in about 2 million.

That’s still well short of the 3-4 million modifications President Obama promised when he announced the program back in early 2009. But it’s a big difference, and a reasonable, basic benchmark against which to compare the program’s failings.

The report does not identify these poor performing banks, but it’s not hard to ID them. A “few large servicers [have offered] modifications at half the rate of others,” the authors say. The largest mortgage servicers are Bank of America, JPMorgan Chase, Wells Fargo and Citi.

Bank of America in particular (the largest of all the servicers when HAMP launched) has been far slower to modify loans than even the other large servicers, as other analyses we’ve cited have shown.

Rick Simon, a spokesman for Bank of America, said the banks’ “home retention results are significant and in line with our industry peers to date.”

The Home Affordable Modification Program (HAMP) paid subsidies to mortgage servicers on the theory that doing so would convince them to embrace modifications. The authors say that voluntary approach apparently didn’t have much effect with the biggest servicers. They weren’t very good at modifying loans before HAMP was launched and weren’t much better after it launched.

The authors wrote that while they can’t be sure why these banks underperformed, they “may not have responded to the program since doing so would involve changing their business focus from processing and channeling payments to actively renegotiating loans. In addition, this may have involved significantly altering their organizational capabilities, such as building appropriate infrastructure and hiring and training servicing staff.”

That echoes on our reporting on how ill-suited the big banks were when it came to modifying loans. The result inside the banks has sometimes been chaos. As one Bank of America employee complained, “The whole documentation collection thing has got to be purposely not funded. Like, I can’t get a fax. I work for a huge bank that has tons of money, and you’re telling me that I can’t get a fax?”

Since HAMP’s oversight has been lax — the Treasury Department, which runs the program, has responded indulgently to mortgage servicers breaking HAMP’s rules — banks haven’t had to worry much about their low modification rates. (You can see this explained with a song. It’s also a big part of our book on the foreclosure crisis.)

A Treasury spokeswoman, responding to the new report, said HAMP had resulted in “one of the most comprehensive compliance reviews of mortgage servicing operations in the country. Servicers in the Making Home Affordable Program are subject to an unprecedented level of compliance oversight.”

The report did have some positive findings concerning HAMP. As we’ve reported, modifications in the program have been more generous to homeowners than modifications done outside HAMP. The authors also found that the program did boost the number of modifications — i.e. it caused modifications that likely would not have happened if not for the program.

The authors also say that HAMP might have induced more modifications if the program had not required such extensive screening of homeowners seeking a modification. From the program’s launch, the administration emphasized that the program wouldn’t help the wrong sort of “irresponsible” homeowner. That emphasis led to requirements that homeowners send in lots of paperwork to prove their income, which in turn further taxed the big servicers’ inadequate systems.

Despite the recent stabilization in home prices and a drop in the rate of homeowners falling behind on their payments, HAMP’s limited impact remains a very relevant issue. Even in the sixth year of the foreclosure crisis, the country remains saddled with an extraordinarily high number of loans in foreclosure — about 2 million. That backlog hasn’t improved much in the last couple years, meaning it’s still hard to forecast when the foreclosure rate will return to a normal level.

Debtors’ Prison Is Back — and Just as Cruel as Ever

By Ross Kenneth Urken  Posted 12:25PM 08/30/12

–>prison cell

To most of us, “debtors’ prison” sounds like an archaic institution, something straight out of a Dickens novel. But the idea of jailing people who can’t pay what they owe is alive and well in 21st-century America.
According to a report in The Wall Street Journal, debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who legitimately cannot pay their debts.
Here’s how clever payday lenders work the system in Missouri — where, it should be noted, jailing someone for unpaid debts is illegal under the state constitution.
First, explains St. Louis Post-Dispatch, the creditor gets a judgment in civil court that a debtor hasn’t paid a sum that he owes. Then, the debtor is summoned to court for an “examination”: a review of their financial assets.
If the debtor fails to show up for the examination — as often happens in such cases — the creditor can ask for a “body attachment” — essentially, a warrant for the debtor’s arrest. At that point, the police can haul the debtor in and jail them until there’s a court hearing, or until they pay the bond. No coincidence, the bond is usually set at the amount of the original debt. As the Dispatchnotes:

“Debtors are sometimes summoned to court repeatedly, increasing chances that they’ll miss a date and be arrested. Critics note that judges often set the debtor’s release bond at the amount of the debt and turn the bond money over to the creditor — essentially turning publicly financed police and court employees into private debt collectors for predatory lenders.”

Standing Up for Those Who Can’t Pay
The practice — in addition to putting an additional squeeze on poor people — turns courts and police into enforcers for private creditors, from payday lenders to health care providers. The situation prompted Illinois legislators in July to pass a bill “to protect vulnerable consumers from being hauled to jail over unpaid debts,” in the words of state Attorney General Lisa Madigan. The Debtors’ Rights Act of 2012 requires two “pay or appear” court notices to be sent to debtors before an arrest can be made, and also prevents creditors from calling for multiple examinations unless the debtor’s financial state has significantly changed.

Many of the victims, Madigan noted at the time, were living on funds that are legally protected from being used for outstanding debt judgments, such as Social Security, unemployment insurance or veterans’ benefits. In one case she cited, an Illinois court brought a “pay or appear” order against a mentally disabled man living on legally protected disability benefits of $690 a month. The man told the court of his circumstances but was still ordered to pay $100 a month or appear in court once a month for a three-year period.
“It is outrageous to think in this day and age that creditors are manipulating the courts, even threatening jail time, to extract whatever they could from people who could least afford to pay,” Madigan said. “This law corrects that gross oversight and puts a stop to throwing people in jail for being poor while still allowing fair debt collection when people have the means to pay their debts.”

Illinois notwithstanding, the modern-day debtors’ prison probably isn’t going away anytime soon given the current economic climate: More than a third of U.S. states allow borrowers who can’t or won’t pay their debts to be jailed

Almost half of Americans have less than $10,000 left when they die

  • 46% now die with £10,000 or less  saved
  • Many do not have cash to absorb financial  ‘shocks’ such as big medical bills
  • Single retirees more likely to be  poorer

By Sam Adams

PUBLISHED:03:48 EST, 31  August 2012| UPDATED:09:08 EST, 31 August 2012

It’s a time of life when most folks hope to  enjoy some financial security.

But nearly half of elderly Americans now die  with little money saved, a new study has found.

Research by the National Bureau of Economic  Research, revealed that 46 per cent of retirees now reach the end of their lives  with just $10,000 or less in reserve.

The findings reveal the true scale of the  financial vulnerability of many elderly households.

Experts found many retirees do not have the  liquid assets to absorb ‘shocks’ such as big medical bills.

But while some elderly people struggle to  make ends meet others enjoy  wealth and health throughout their  retirement.

The survey looked at the financial situation  of retirees between 1993 and 2008.

James  Poterba, professor of economics at  M.I.T., president of the National  Bureau of Economic Research, and a co-author  of the study, said the low level of savings did not mean all pensioners were  suffering in poverty.

‘That doesn’t mean their  standard of living  is very low – they might have a relatively generous  pension plan, most of them  will have Social Security,’ he told The Wall Street Journal.

Cash crisis: Around half of elderly Americans now die with savings of $10,000 or less
Cash crisis: Around half of elderly Americans now die  with savings of $10,000 or less

However, he said the figures ‘suggest  something about the financial resiliency of these households.’

‘They may not have much capacity to absorb a  shock, such as an out-of-pocket medical expenditure.’

When other measures of wealth are taken into  account – such as equity in the value of property, and the value of pensions –  the outlook for many retirees appears less worrying.

Single people in the study had average  assets of about $142,000, while those whose husband or wife had died had around  $253,000.


  • Nearly half of  pensioners have savings of $10,000 or less
  • Richer pensioners  tend to live longer
  • Married  pensioners tend to be wealthier
  • Nearly 60  per cent of singles are worse off

Couples where the retiree surveyed had  died  but their husband or wife was still living had average assets of  more than  $690,000.

Of particular concern was the relatively big  fall in income faced by retirees whose partners had died.

While the income of single people and married  couples remained comparatively stable, the income of retirees whose spouse had  died fell by almost 75 per cent during the course of the survey.

It is unclear why this group is so badly  affected, but a drop in pension benefits is believed to be one of the  causes.

Their income fell by nearly three quarters  during the course of the survey, The Wall Street Journal reports.

The rich and those who stay married were also  more likely to be better off financially according to the study.

Nearly 60 per cent of people who are single  throughout the course of the survey had just $10,000 in savings when they died.

Married people are likelier to have equity  saved in their property

Read more:

And Now Facebook’s Bankers Are Divvying Up The $100 Million They Made Shorting Facebook’s Stock

Boy it doesn’t suck to be a banker.

Henry Blodget|Aug. 18, 2012,  9:41 AM

Every time I forget how much it doesn’t suck, I’m reminded of some other  magical cash-printing tool I had forgotten about that allows Wall Street to coin  money no matter what.

And this latest one is a beauty.

Remember the Facebook  IPO? Yes, it was one of the biggest IPOs ever. It has also now become a colossal  disaster that has vaporized half of investors’ capital in three months.

Wall Street bankers were paid extremely handsomely to sell the $16 billion of stock they sold on the  Facebook IPO. Specifically, they were  paid $176 million in fees.

(Investors who bought Facebook’s stock on the IPO, meanwhile, have since lost  $8 billion).

But that was only the beginning.

Right now, reports  Lynn Cowan of the Wall Street Journal, while Facebook investors digest the  fact that the stock has now dropped to $19 from an IPO price of $38, Facebook’s  bankers are divvying up another $100 million they made on the Facebook  stock, this time in a much less visible fashion.

How did the bankers make this second bonanza?

By shorting Facebook’s stock.

By, in other words, selling Facebook stock they didn’t own and then cashing  in when the price dropped.


Wall Street didn’t call this “shorting” the stock, of course. Because  “shorting” is widely understood to be a bet that a stock will drop. And  obviously bankers don’t want to be seen as “betting against the clients” they  just sold IPO stock  to.

Instead, the big short position that Facebook’s lead banker, Morgan Stanley,  took in Facebook’s stock at the IPO price is described as engaging in “price  stabilization” (details below).

Also, “shorting” stocks generally entails risk: If you short a stock that  goes up, you lose money. And bankers don’t like to take risks when they can coin  money without taking risks. So this particular cash-printing tool enables Wall  Street to short the stocks without taking the risk that the price will go up and  they’ll get hosed.

“Price stabilization?” “Risk-free stock shorting”? How does all this  work?

Through something called the “overallotment option.”

The “overallotment option,” also known as the “green shoe,” is a mechanism  Wall Street banks use in most IPOs. This mechanism gives the banks the option to  sell up to 15% more stock than is initially expected to be sold in the IPO. The  stated goal of this option is to enable the bankers to more closely match supply  with demand and, thus, reduce the volatility that might otherwise follow the IPO  pricing. This option also allows the bank to buy stock in  the after-market without taking undue risk–thus “supporting” the price of the  stock.

In other words, when there appears to be “excess” demand for stock on the  IPO, the lead underwriter has the ability to sell 15% more shares than it has  already agreed to sell. In selling these shares, the bank takes a short position  in the stock, by selling shares it doesn’t yet own. If the bank were doing this  as a “naked short”–selling shares it didn’t have a right to buy later at a  specific price–the bank would be taking huge risk: The stock might go up,  forcing the bank to buy back stock to cover its short at a much higher price.  But the “overallotment option” allows the bank to buy another 15% of shares from  the company at the IPO price, thus allowing it to sell additional stock on the  IPO without taking the risk that the stock might go up.

Importantly, the bank gets paid its full IPO commission on the extra shares  it sells if exercises its option, so it has an incentive to sell them regardless  of how much excess demand there is. And there’s no risk to the bank if the stock  price jumps, because the bank can cover its short buy buying the stock back at  the IPO price.

And if the stock drops after the IPO?

Well, then the bank really cashes in.

Because then the bank makes money from:

  • IPO commissions
  • And proceeds from shorting the stock at the IPO price and then buying it  back at a lower price.

And that’s just what happened with Facebook.

With Facebook, we all remember, the underwriters “supported” the stock for  the first day, helping it close just above the IPO price. Then the underwriters  gave up on supporting it. And the stock has traded pretty much straight down  from there.

And at some point, shortly after the IPO, the underwriters covered the short  position they established by “over-allotting” Facebook stock on the IPO…and  they covered at a lower price.

The net gain from this little trade, the Wall  Street Journal reports, was $100 million.

And Facebook’s bankers are now divvying up those proceeds.

The “over-allotment option” has been a standard mechanism used in IPOs for as  long as anyone can remember. To the extent that it does help underwriters  stabilize the price of an IPO, there’s nothing sinister about it, and its  existence is clearly disclosed.

But the fact that Facebook’s underwriters made an extra $100 million on the  Facebook IPO from shorting Facebook’s stock–while the clients who bought the  stock lost their shirts–is just yet another example of the heads-we-win,  tails-you-lose structure of Wall Street.

It’s no mystery why, even given all the travails Wall Street has gone through  in the past 5 years, the Wall Street firms are still coining money. And it’s no  mystery why everyone still wants to be a banker.

Read more:

White House considers executive order, leaves Internet takeover a possibility

The Daily CallerThe Daily Caller – Mon, Aug 6, 2012

The White House has left open the possibility of enacting its Internet agenda via executive order after the failed effort to bring the Democrat-supported cybersecurity bill to a full vote in the Senate last week.

In response to a question from The Hill, a Washington, D.C. political newspaper, about whether President Obama was considering advancing his party’s cyber-plan through an executive order, White House Press Secretary Jay Carney didn’t rule out the possibility.

“In the wake of Congressional inaction and Republican stall tactics, unfortunately, we will continue to be hamstrung by outdated and inadequate statutory authorities that the legislation would have fixed,” he said via email.

“Moving forward, the President is determined to do absolutely everything we can to better protect our nation against today’s cyber threats and we will do that,” added Carney.

The failed cyber security bill, which could be revived by Sen. Majority Leader Harry Reid when the Senate comes back from recess in September, would have given federal agencies in charge of regulating critical infrastructure industries like power companies and utilities the ability to mandate cybersecurity recommendations.

Shortly before the Senate’s August recess, Obama penned a Wall Street Journal op-ed in which he threw his support behind the Cybersecurity Act of 2012.

An executive order would be another action from the Obama administration to extend executive branch authority over a largely free and open Internet