National Australia Bank Writes Off 90% of Its U.S. AAA Rated Debt
July 26th, 2008Will the other banks—holding this toxic waste—try to simply ignore this event?
Via: Business Spectator:
The National Australia Bank’s decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.
We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.
It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable.
While global banks have been writing down their balance sheet assets, few have tackled their conduit exposures which are off balance sheet but to which they are ultimately liable.
This morning at around 6am I wrote that we had been experiencing a ‘dead cat bounce’. I had no idea that NAB would trigger the downturn and confirm what I had written. And of course Wall Street will receive a deep shock when it wakes up.
More: Bad Debt Bombshell from National Australia Bank
Strong Storm About to Hit Us
July 25th, 2008UPDATE: Electricity Back On
We’re ok. Man, that was a wild one! I can’t get over the amounts of water that can fall out of the sky here. And I don’t know how hard the wind was gusting, but all of the fast air moving against the house sounded like a giant blowing out a tune on an empty beer bottle. Various debris hit the house, but nothing broke.
I thought that I was going to wake up and find that the IPstar satellite dish had blown over into the cow paddock. Somehow, it’s still attached to the house and pointed at the bird.
The leading edge of the storm blacked us out, as expected, but the electricity is on again. I don’t know for how long. Looking at the hourly radar, it appears that the worst part has moved over us, but I just checked MetService and found this:
Severe Weather Warning
Issued by MetService at 08:14am 26-Jul-2008
MAJOR STORM STILL ON TRACK TO HIT THE NORTH ISLAND
A very deep low is approaching northern New Zealand this morning from the north Tasman Sea. This unusually intense low is forecast to move over Cape Reinga towards evening and then track southeastwards past Coromandel Peninsula around midnight, and lie near East Cape by midday Sunday. East to southeast gales are expected to buffet the North Island, with potentially damaging wind gusts of around 130 km/h possible in many exposed parts of the North Island, excluding Wairarapa and Hawkes Bay. MetService advises the public that winds of this strength have the potential to damage trees, powerlines and insecure structures and make driving hazardous, especially combined with heavy rain and possible slips. Boaties are advised to avoid going out and should have made moorings secure as high winds and very large waves are likely about northern and eastern coasts of the North Island.
A front ahead of the low is expected to bring widespread rain to the North Island by the end of Saturday. The heaviest rain should be in Northland,northern Auckland, Coromandel Peninsula, Gisborne and the Hawkes Bay. In these areas streams and rivers could rise quickly,with surface flooding and slips likely.
THIS IS A POTENTIALLY DESTRUCTIVE AND DANGEROUS STORM AND PEOPLE IN THE NORTH ISLAND, ESPECIALLY FROM WAIKATO NORTHWARDS, WOULD BE WELL ADVISED TO AVOID UNNECESSARY TRAVEL.
— End Update —
Just a quick note to let you know that a strong winter storm is about to pass over us. From previous experience, we know that it’s possible that we could lose power for a couple of days from something like this. So, if there are no updates, that’s why.
WaMu May Be Cut to “Junk”
July 24th, 2008Via: Reuters:
Washington Mutual Inc, the largest U.S. savings and loan, posted a $3.33 billion second-quarter loss on Tuesday as souring mortgages forced it to set aside more money for loan losses.
The thrift’s deteriorating health prompted Moody’s Investors Service to say it may downgrade Washington Mutual to “junk” status. Shares of Washington Mutual fell in after-hours electronic trading.
Washington Mutual said its third straight quarterly loss was $3.34 per share, more than triple the $1.09 per share loss that analysts on average expected according to Reuters Estimates. Year-ago profit was $830 million, or 92 cents per share.
The net loss was $6.58 per share including a one-time adjustment tied to the thrift’s $7.2 billion capital raising in April from private equity firm TPG Inc and other investors.
Seattle-based Washington Mutual said its retail banking, mortgage and credit card units all lost money in the quarter. The thrift set aside $5.91 billion for loan losses, and said net charge-offs totaled $2.17 billion.
It has been one of the hardest hit among the largest U.S. lenders in the nation’s housing and credit crisis.
“We are planning for continued softness in housing for the next several quarters,” Chief Executive Kerry Killinger said in an interview. “The capital that we have in place is sufficient to manage through this period. We have no plans at this point to raise additional capital.”
U.S. Astronaut, Edgar Mitchell: Aliens Exist, “It’s Been Well Covered Up by All Our Governments”
July 24th, 2008I make a point of NOT covering the UFO stuff on Cryptogon, but this is VERY remarkable story. Edgar Mitchell not only walked on the moon, he has a PhD (technically, a Doctor of Science) in Aeronautics and Astronautics from MIT. In other words, this is not your typical speaker at some weekend UFO symposium.
Why is he talking about aliens now?
At first, you might think something like, “In their twilight years, some people like to unburden their souls.”
But think about that a bit more. Think about it from the perspective of a government that had information related to alien lifeforms, and all the rest of the X-Files type stuff, but wanted to keep it a secret.
Years ago, I was trying to understand how so much stuff stays secret. I tried to think about what it would take for me to be able to keep my mouth shut if I was exposed to some kind of astonishing information.
So, what would be the most difficult secret for me to keep?
Aliens. Yep, that would be a hard one for me to keep quiet about.
So, I put myself in an imaginary role as an employee on sublevel 23 at Area-51, or something appropriately weird sounding like that, where I saw and worked with ________ fill in the blank with some unthinkable alien technology…
Now, how would I punch the time clock at 5pm, board the 737 for the short trip back to the “Gold Coast” terminal at McCarran Airport in Las Vegas and just forget about what I’d seen all day? Maybe buy some Chinese take-out and then, what do Area 51 employees do on their down time?, watch TV, play video games, whatever… What would matter most of all, though, is that I’d never be able to tell anyone about what I did, especially my own family. Then, I’d be expected to grow old and die knowing about that stuff without ever saying or writing anything about it in public.
What would keep my gums from flapping?
The threat of jailtime for breaking the secrecy oaths that these people are bound by?
No. Because I’d wait until I was old and close enough to checking out that I didn’t care anymore. That’s when I’d write it down and upload it to the intertubes where it would languish for eternity on the tinfoil sites and other backwaters. (Yes, I’ve read The Day After Roswell by Philip Corso, and I’m not sure what to make of that book.)
Patriotism? Forget that. We’re talking about aliens here. Nobody working with alien stuff is going to be able to internalize any bullshit about patriotism. There would be, I think, an uncontrollable urge to spill the beans, somehow, at some point.
Maybe I wouldn’t even know what I was dealing with because of compartmentalization? Obviously, compartmentalization must be employed in these settings, probably to the point of absurdity. But no, for this exercise, I have all access clearance. There’s no doubt in my mind about what “this” is.
I would imagine that at some level of classification, the people involved with the work are told something like, “If you ever reveal this information, even from beyond the grave, in the form of a book or other material, we’ll kill your family, your children and their children and your dog. Nothing personal, but that’s what will happen.”
Anyway, that was my guess about how governments keep the serious family jewels secret.
Now, if someone actually had privileged government information about aliens, do you really think that they’d just casually let that slip into public discourse? I tend to think not. Not if the person was the real deal, which Edgar Mitchell obviously is. I’d tend to think that guys like him would have some sort of threat hanging over their heads that would keep their lips well and truly sealed for the duration.
Which leads me to wonder if, somehow, at some level, Mitchell’s disclosure could have been officially sanctioned?
For what purpose? Who knows…
Via: Telegraph:
Dr Edgar Mitchell, said he was aware of several UFO visits during his career, but each one had been covered up.
The 77-year-old, who was a crew member of the Apollo 14 mission, said sources at the space agency had described aliens as resembling “little people who look strange to us”.
Dr Mitchell told Kerrang! Radio that human technology was “not nearly as sophisticated” as theirs and had they been hostile, he warned: “We would be been gone by now”.
He said: “There’s not much question at all that there’s life throughout the universe, we are not alone at all. I’m most assured about that.
“Have we been able to identify where the other planets are? No, certainly not in our Solar System but we have been able to identify quite a number of planets that could be life bearing planets.
“I happen to have been privileged enough to be in on the fact that we’ve been visited on this planet and the UFO phenomena is real.
“It’s been well covered up by all our governments for the last 60 years or so, but slowly it’s leaked out and some of us have been privileged to have been briefed on some of it.
“I’ve been in military and intelligence circles, who know that beneath the surface of what has been public knowledge, yes – we have been visited.
“Reading the papers recently, it’s been happening quite a bit.”
Dr Mitchell, along with Apollo 14 Commander Alan Shepard, still holds the record for the longest ever moonwalking session at nine hours and 17 minutes following their 1971 mission.
Officials from NASA, were quick to play the comments down.
In a statement, a spokesman said: “NASA does not track UFOs. NASA is not involved in any sort of cover up about alien life on this planet or anywhere in the universe.
“Dr Mitchell is a great American, but we do not share his opinions on this issue.”
Possibly Related: U.S. Department of Defense Shills: Prepare for Alien Invasion
Key Benazir Bhutto Assassination Witness Shot Dead
July 24th, 2008Via: Telegraph:
Khalid Shahenshah, who was the former Pakistan prime minister’s security chief at the time of her assassination, was killed in a drive-by shooting as he left his house in the southern port city of Karachi on Tuesday, police said.
Mr Shahenshah, 45, was riding in Mrs Bhutto’s bullet-proof car when she was killed in a suicide attack in the northern city of Rawalpindi on December 27.
He was expected to be called to give evidence at a United Nations probe into her death.
“He was a key witness in the case and was also interviewed by the Scotland Yard experts who came to Pakistan to investigate her killing,” said Waqar Mehdi, the junior information minister of Sindh province.
“There is a possibility that his killing could be linked to his status as a witness, although investigations are still underway.”
A team of Scotland Yard detectives concluded in February that Mrs Bhutto was killed by a suicide bomb and not by gunfire, backing the previous Pakistani government’s claim the attack was masterminded by Baitullah Mehsud, Pakistan’s top Taliban commander.
But the UN earlier this month agreed to set up an independent panel to investigate her slaying, following a request by Pakistan’s new government.
£37 Billion Plan to Power EU with the Saharan Sun
July 24th, 2008Imagine my shock.
Via: Guardian:
Vast farms of solar panels in the Sahara could provide clean electricity for the whole of Europe, according to EU scientists working on a plan to pool the region’s renewable energy.
Harnessing the power of the desert sun is at the centre of an ambitious scheme to build a €45bn (£35.7bn) European supergrid that would allow countries across the continent to share electricity from abundant green sources such as wind energy in the UK and Denmark, and geothermal energy from Iceland and Italy.
The idea is gaining political support in Europe, with Gordon Brown and Nicolas Sarkozy, the French president, recently backing the north African solar plan.
Because the sunlight is more intense, solar photovoltaic panels in north Africa could generate up to three times the electricity compared with similar panels in northern Europe.
Arnulf Jaeger-Walden of the European commission’s Institute for Energy explained how electricity produced in solar farms in Africa, each generating around 50-200 megawatts of power, could be fed thousands of miles to European countries. The proposed grid would use high-voltage direct current (DC) transmission lines, which lose less energy over distance than conventional alternating current (AC) lines.
The idea of developing solar farms in the Mediterranean region and north Africa was given a boost by Sarkozy earlier this month when he highlighted solar farms in north Africa as central to the work of his newly formed Mediterranean Union.
Depending on the size of the grid, building the necessary high-voltage lines across Europe could cost up to €1bn a year every year till 2050, but Jaeger-Walden pointed out that the figure was small when compared to a recent prediction by the International Energy Agency that the world needs to invest more than $45tn (£22.5tn) in energy systems over the next 30 years.
Research Credit: JoKerHill
Telco Won’t Install Fiber Network, Sues to Prevent City from Doing So
July 24th, 2008Individuals and local government working together to improve a situation that the “free market” has no interest in addressing?
Unthinkable. It can’t be allowed. Send lawyers, guns and money.
Via: Ars:
The small town of Monticello, Minnesota seems an unlikely spot for a battle over city-owned fiber-to-the-home. The town, which is a distant commute to Minneapolis, thought it could better attract residents and business by building its own fiber-optic network. After a couple years of due diligence, the town held a referendum; 74 percent of voters agreed to fund the $25 million scheme. The city sought the needed municipal bonds, but the day before it closed on them, the local telco filed suit to stop the plan. Its claim: taking out bonds to build a fiber network is illegal.
…
The City of Monticello, which has just replied to the lawsuit, thinks the whole case is ridiculous. In its response, the city’s attorney says that the telco offers only a “plain misreading of a Minnesota statute” and “pleads no facts that tend in any way to call into question whether the project constitutes a ‘utility or other public convenience from which revenue is or may be derived’.”
…
Mitchell, who has been involved with the city on this entire issue, tells Ars that he’s sympathetic to arguments from private companies about having to compete unfairly with cities. But he points out that cities have to publish their business plans, deployment, targets, and funding, which levels the playing field. And Monticello did first approach Bridgewater, asking it to deploy fiber in the town; the answer was no.
…
Local control, choice of ISP
Assuming the lawsuit can be dealt with, Monticello hopes to build fiber lines to each home and business in town with the goals of:
* choice of service provider
* competitive rates
* local service
* local ownership
* economic development
* economic returns to the community
When 74 percent of town’s voters want to build themselves a fiber network, but the telco demands that they 1) not do it, and then 2) accept that the telco won’t do it for years, either, the market (such as it is) doesn’t appear to be functioning well.
Schwarzenegger to Cut Most California State Workers’ Pay to Minimum Wage?
July 24th, 2008It’s not the Onion.
Via: San Francisco Chronicle:
Gov. Arnold Schwarzenegger plans next week to slash the pay of more than 200,000 state workers to the federal minimum of $6.55 per hour to help ease the state’s budget crisis, according to a draft executive order obtained by The Chronicle on Wednesday.
The governor also will order an end to overtime pay for all but critical services, a freeze on state hiring and the immediate layoff of nearly 22,000 temporary, seasonal and student workers.
“As a result of the late state budget, there is a real and substantial risk that the state will have insufficient cash to pay for state expenditures,” the executive order states.
Schwarzenegger’s staff would neither confirm nor deny that the governor plans to issue the executive order, but sources said he could take action as early as Monday. The state, facing a projected $17.2 billion budget deficit for the fiscal year that began July 1, has not approved a budget.
“The governor is looking at a number of different options to ensure that the state does not run out of cash,” said Aaron McLear, a spokesman for the governor.
But administration officials, who asked to remain anonymous, said that about 200,000 of the state’s 245,000 workers, both hourly and salaried, will see their pay trimmed back to the federal minimum wage of $6.55 an hour, saving the state up to $1.2 billion a month. Dropping the temporary and short-time workers will save an additional $28.5 million each month.
While the layoffs could be made immediately, the pay cuts might not be completed until mid- or late August.
The proposed pay cut for hourly employees would take their wages well below the state minimum wage of $8 an hour. But a 2003 California Supreme Court decision allows the state to chop workers’ pay to the federal minimum when a state budget has not been enacted.
Research Credit: ltcolonelnemo
Exposing Bush’s Historic Abuse of Power
July 23rd, 2008Please see my heavily referenced post on MAIN CORE for more “current history” on this matter.
The full text of this Salon piece follows.
Via: Salon:
Exposing Bush’s historic abuse of power
Salon has uncovered new evidence of post-9/11 spying on Americans. Obtained documents point to a potential investigation of the White House that could rival Watergate.
By Tim Shorrock
Jul. 23, 2008 | The last several years have brought a parade of dark revelations about the George W. Bush administration, from the manipulation of intelligence to torture to extrajudicial spying inside the United States. But there are growing indications that these known abuses of power may only be the tip of the iceberg. Now, in the twilight of the Bush presidency, a movement is stirring in Washington for a sweeping new inquiry into White House malfeasance that would be modeled after the famous Church Committee congressional investigation of the 1970s.
While reporting on domestic surveillance under Bush, Salon obtained a detailed memo proposing such an inquiry, and spoke with several sources involved in recent discussions around it on Capitol Hill. The memo was written by a former senior member of the original Church Committee; the discussions have included aides to top House Democrats, including Speaker Nancy Pelosi and Judiciary Committee chairman John Conyers, and until now have not been disclosed publicly.
Salon has also uncovered further indications of far-reaching and possibly illegal surveillance conducted by the National Security Agency inside the United States under President Bush. That includes the alleged use of a top-secret, sophisticated database system for monitoring people considered to be a threat to national security. It also includes signs of the NSA’s working closely with other U.S. government agencies to track financial transactions domestically as well as globally.
The proposal for a Church Committee-style investigation emerged from talks between civil liberties advocates and aides to Democratic leaders in Congress, according to sources involved. (Pelosi’s and Conyers’ offices both declined to comment.) Looking forward to 2009, when both Congress and the White House may well be controlled by Democrats, the idea is to have Congress appoint an investigative body to discover the full extent of what the Bush White House did in the war on terror to undermine the Constitution and U.S. and international laws. The goal would be to implement government reforms aimed at preventing future abuses — and perhaps to bring accountability for wrongdoing by Bush officials.
“If we know this much about torture, rendition, secret prisons and warrantless wiretapping despite the administration’s attempts to stonewall, then imagine what we don’t know,” says a senior Democratic congressional aide who is familiar with the proposal and has been involved in several high-profile congressional investigations.
“You have to go back to the McCarthy era to find this level of abuse,” says Barry Steinhardt, the director of the Program on Technology and Liberty for the American Civil Liberties Union. “Because the Bush administration has been so opaque, we don’t know [the extent of] what laws have been violated.”
The parameters for an investigation were outlined in a seven-page memo, written after the former member of the Church Committee met for discussions with the ACLU, the Center for Democracy and Technology, Common Cause and other watchdog groups. Key issues to investigate, those involved say, would include the National Security Agency’s domestic surveillance activities; the Central Intelligence Agency’s use of extraordinary rendition and torture against terrorist suspects; and the U.S. government’s extensive use of military assets — including satellites, Pentagon intelligence agencies and U2 surveillance planes — for a vast spying apparatus that could be used against the American people.
Specifically, the ACLU and other groups want to know how the NSA’s use of databases and data mining may have meshed with other domestic intelligence activities, such as the U.S. government’s extensive use of no-fly lists and the Treasury Department’s list of “specially designated global terrorists” to identify potential suspects. As of mid-July, says Steinhardt, the no-fly list includes more than 1 million records corresponding to more than 400,000 names. If those people really represent terrorist threats, he says, “our cities would be ablaze.” A deeper investigation into intelligence abuses should focus on how these lists feed on each other, Steinhardt says, as well as the government’s “inexorable trend towards treating everyone as a suspect.”
“It’s not just the ‘Terrorist Surveillance Program,'” agrees Gregory T. Nojeim from the Center for Democracy and Technology, referring to the Bush administration’s misleading name for the NSA’s warrantless wiretapping program. “We need a broad investigation on the way all the moving parts fit together. It seems like we’re always looking at little chunks and missing the big picture.”
A prime area of inquiry for a sweeping new investigation would be the Bush administration’s alleged use of a top-secret database to guide its domestic surveillance. Dating back to the 1980s and known to government insiders as “Main Core,” the database reportedly collects and stores — without warrants or court orders — the names and detailed data of Americans considered to be threats to national security.
According to several former U.S. government officials with extensive knowledge of intelligence operations, Main Core in its current incarnation apparently contains a vast amount of personal data on Americans, including NSA intercepts of bank and credit card transactions and the results of surveillance efforts by the FBI, the CIA and other agencies. One former intelligence official described Main Core as “an emergency internal security database system” designed for use by the military in the event of a national catastrophe, a suspension of the Constitution or the imposition of martial law. Its name, he says, is derived from the fact that it contains “copies of the ‘main core’ or essence of each item of intelligence information on Americans produced by the FBI and the other agencies of the U.S. intelligence community.”
Some of the former U.S. officials interviewed, although they have no direct knowledge of the issue, said they believe that Main Core may have been used by the NSA to determine who to spy on in the immediate aftermath of 9/11. Moreover, the NSA’s use of the database, they say, may have triggered the now-famous March 2004 confrontation between the White House and the Justice Department that nearly led Attorney General John Ashcroft, FBI director William Mueller and other top Justice officials to resign en masse.
The Justice Department officials who objected to the legal basis for the surveillance program — former Deputy Attorney General James B. Comey and Jack Goldsmith, the former head of the Office of Legal Counsel — testified before Congress last year about the 2004 showdown with the White House. Although they refused to discuss the highly classified details behind their concerns, the New York Times later reported that they were objecting to a program that “involved computer searches through massive electronic databases” containing “records of the phone calls and e-mail messages of millions of Americans.”
According to William Hamilton, a former NSA intelligence officer who left the agency in the 1970s, that description sounded a lot like Main Core, which he first heard about in detail in 1992. Hamilton, who is the president of Inslaw Inc., a computer services firm with many clients in government and the private sector, says there are strong indications that the Bush administration’s domestic surveillance operations use Main Core.
Hamilton’s company Inslaw is widely respected in the law enforcement community for creating a program called the Prosecutors’ Management Information System, or PROMIS. It keeps track of criminal investigations through a powerful search engine that can quickly access all stored data components of a case, from the name of the initial investigators to the telephone numbers of key suspects. PROMIS, also widely used in the insurance industry, can also sort through other databases fast, with results showing up almost instantly. “It operates just like Google,” Hamilton told me in an interview in his Washington office in May.
Since the late 1980s, Inslaw has been involved in a legal dispute over its claim that Justice Department officials in the Reagan administration appropriated the PROMIS software. Hamilton claims that Reagan officials gave PROMIS to the NSA and the CIA, which then adapted the software — and its outstanding ability to search other databases — to manage intelligence operations and track financial transactions. Over the years, Hamilton has employed prominent lawyers to pursue the case, including Elliot Richardson, the former attorney general and secretary of defense who died in 1999, and C. Boyden Gray, the former White House counsel to President George H.W. Bush. The dispute has never been settled. But based on the long-running case, Hamilton says he believes U.S. intelligence uses PROMIS as the primary software for searching the Main Core database.
Hamilton was first told about the connection between PROMIS and Main Core in the spring of 1992 by a U.S. intelligence official, and again in 1995 by a former NSA official. In July 2001, Hamilton says, he discussed his case with retired Adm. Dan Murphy, a former military advisor to Elliot Richardson who later served under President George H.W. Bush as deputy director of the CIA. Murphy, who died shortly after his meeting with Hamilton, did not specifically mention Main Core. But he informed Hamilton that the NSA’s use of PROMIS involved something “so seriously wrong that money alone cannot cure the problem,” Hamilton told me. He added, “I believe in retrospect that Murphy was alluding to Main Core.” Hamilton also provided copies of letters that Richardson and Gray sent to U.S. intelligence officials and the Justice Department on Inslaw’s behalf alleging that the NSA and the CIA had appropriated PROMIS for intelligence use.
Hamilton says James B. Comey’s congressional testimony in May 2007, in which he described a hospitalized John Ashcroft’s dramatic standoff with senior Bush officials Alberto Gonzales and Andrew Card, was another illuminating moment. “It was then that we [at Inslaw] started hearing again about the Main Core derivative of PROMIS for spying on Americans,” he told me.
Through a former senior Justice Department official with more than 25 years of government experience, Salon has learned of a high-level former national security official who reportedly has firsthand knowledge of the U.S. government’s use of Main Core. The official worked as a senior intelligence analyst for a large domestic law enforcement agency inside the Bush White House. He would not agree to an interview. But according to the former Justice Department official, the former intelligence analyst told her that while stationed at the White House after the 9/11 attacks, one day he accidentally walked into a restricted room and came across a computer system that was logged on to what he recognized to be the Main Core database. When she mentioned the specific name of the top-secret system during their conversation, she recalled, “he turned white as a sheet.”
An article in Radar magazine in May, citing three unnamed former government officials, reported that “8 million Americans are now listed in Main Core as potentially suspect” and, in the event of a national emergency, “could be subject to everything from heightened surveillance and tracking to direct questioning and even detention.”
The alleged use of Main Core by the Bush administration for surveillance, if confirmed to be true, would indicate a much deeper level of secretive government intrusion into Americans’ lives than has been previously known. With respect to civil liberties, says the ACLU’s Steinhardt, it would be “pretty frightening stuff.”
The Inslaw case also points to what may be an extensive role played by the NSA in financial spying inside the United States. According to reports over the years in the U.S. and foreign press, Inslaw’s PROMIS software was embedded surreptitiously in systems sold to foreign and global banks as a way to give the NSA secret “backdoor” access to the electronic flow of money around the world.
In May, I interviewed Norman Bailey, a private financial consultant with years of government intelligence experience dating from the George W. Bush administration back to the Reagan administration. According to Bailey — who from 2006 to 2007 headed a special unit within the Office of the Director of National Intelligence focused on financial intelligence on Cuba and Venezuela — the NSA has been using its vast powers with signals intelligence to track financial transactions around the world since the early 1980s.
From 1982 to 1984, Bailey ran a top-secret program for President Reagan’s National Security Council, called “Follow the Money,” that used NSA signals intelligence to track loans from Western banks to the Soviet Union and its allies. PROMIS, he told me, was “the principal software element” used by the NSA and the Treasury Department then in their electronic surveillance programs tracking financial flows to the Soviet bloc, organized crime and terrorist groups. His admission is the first public acknowledgement by a former U.S. intelligence official that the NSA used the PROMIS software.
According to Bailey, the Reagan program marked a significant shift in resources from human spying to electronic surveillance, as a way to track money flows to suspected criminals and American enemies. “That was the beginning of the whole process,” he said.
After 9/11, this capability was instantly seen within the U.S. government as a critical tool in the war on terror — and apparently was deployed by the Bush administration inside the United States, in cases involving alleged terrorist supporters. One such case was that of the Al-Haramain Islamic Foundation in Oregon, which was accused of having terrorist ties after the NSA, at the request of the Treasury Department, eavesdropped on the phone calls of Al-Haramain officials and their American lawyers. The charges against Al-Haramain were based primarily on secret evidence that the Bush administration refused to disclose in legal proceedings; Al-Haramain’s lawyers argued in a lawsuit that was a violation of the defendants’ due process rights.
According to Bailey, the NSA also likely would have used its technological capabilities to track the charity’s financial activity. “The vast majority of financial movements of any significance take place electronically, so intercepts have become an extremely important element” in intelligence, he explained. “If the government suspects that a particular Muslim charitable organization is engaged in collecting funds to funnel to terrorists, the NSA would be asked to follow the money going into and out of the bank accounts of that charity.” (The now-defunct Al-Haramain Foundation, although affiliated with a Saudi Arabian-based global charity, was founded and based in Ashland, Ore.)
The use of a powerful database and extensive watch lists, Bailey said, would make the NSA’s job much easier. “The biggest problems with intercepts, quite frankly, is that the volumes of data, daily or even by the hour, are gigantic,” he said. “Unless you have a very precise idea of what it is you’re looking for, the NSA people or their counterparts [overseas] will just throw up their hands and say ‘forget it.'” Regarding domestic surveillance, Bailey said there’s a “whole gray area where the initiation of the transaction was in the United States and the final destination was outside, or vice versa. That’s something for the lawyers to figure out.”
Bailey’s information on the evolution of the Reagan intelligence program appears to corroborate and clarify an article published in March in the Wall Street Journal, which reported that the NSA was conducting domestic surveillance using “an ad-hoc collection of so-called ‘black programs’ whose existence is undisclosed.” Some of these programs began “years before the 9/11 attacks but have since been given greater reach.” Among them, the article said, are a joint NSA-Treasury database on financial transactions that dates back “about 15 years” to 1993. That’s not quite right, Bailey clarified: “It started in the early ’80s, at least 10 years before.”
Main Core may be the contemporary incarnation of a government watch list system that was part of a highly classified “Continuity of Government” program created by the Reagan administration to keep the U.S. government functioning in the event of a nuclear attack. Under a 1982 presidential directive, the outbreak of war could trigger the proclamation of martial law nationwide, giving the military the authority to use its domestic database to round up citizens and residents considered to be threats to national security. The emergency measures for domestic security were to be carried out by the Federal Emergency Management Agency (FEMA) and the Army.
In the late 1980s, reports about a domestic database linked to FEMA and the Continuity of Government program began to appear in the press. For example, in 1986 the Austin American-Statesman uncovered evidence of a large database that authorities were proposing to use to intern Latino dissidents and refugees during a national emergency that might follow a potential U.S. invasion of Nicaragua. During the Iran-Contra congressional hearings in 1987, questions to Reagan aide Oliver North about the database were ruled out of order by the committee chairman, Democratic Sen. Daniel Inouye, because of the “highly sensitive and classified” nature of FEMA’s domestic security operations.
In September 2001, according to “The Rise of the Vulcans,” a 2004 book on Bush’s war cabinet by James Mann, a contemporary version of the Continuity of Government program was put into play in the hours after the 9/11 terrorist attacks, when Vice President Cheney and senior members of Congress were dispersed to “undisclosed locations” to maintain government functions. It was during this emergency period, Hamilton and other former government officials believe, that President Bush may have authorized the NSA to begin actively using the Main Core database for domestic surveillance. One indicator they cite is a statement by Bush in December 2005, after the New York Times had revealed the NSA’s warrantless wiretapping, in which he made a rare reference to the emergency program: The Justice Department’s legal reviews of the NSA activity, Bush said, were based on “fresh intelligence assessment of terrorist threats to the continuity of our government.”
It is noteworthy that two key players on Bush’s national security team, Cheney and his chief of staff, David Addington, have been involved in the Continuity of Government program since its inception. Along with Donald Rumsfeld, Bush’s first secretary of defense, both men took part in simulated drills for the program during the 1980s and early 1990s. Addington’s role was disclosed in “The Dark Side,” a book published this month about the Bush administration’s war on terror by New Yorker reporter Jane Mayer. In the book, Mayer calls Addington “the father of the [NSA] eavesdropping program,” and reports that he was the key figure involved in the 2004 dispute between the White House and the Justice Department over the legality of the program. That would seem to make him a prime witness for a broader investigation.
Getting a full picture on Bush’s intelligence programs, however, will almost certainly require any sweeping new investigation to have a scope that would inoculate it against charges of partisanship. During one recent discussion on Capitol Hill, according to a participant, a senior aide to Speaker Pelosi was asked for Pelosi’s views on a proposal to expand the investigation to past administrations, including those of Bill Clinton and George H.W. Bush. “The question was, how far back in time would we have to go to make this credible?” the participant in the meeting recalled.
That question was answered in the seven-page memo. “The rise of the ‘surveillance state’ driven by new technologies and the demands of counter-terrorism did not begin with this Administration,” the author wrote. Even though he acknowledged in interviews with Salon that the scope of abuse under George W. Bush would likely be an order of magnitude greater than under preceding presidents, he recommended in the memo that any new investigation follow the precedent of the Church Committee and investigate the origins of Bush’s programs, going as far back as the Reagan administration.
The proposal has emerged in a political climate reminiscent of the Watergate era. The Church Committee was formed in 1975 in the wake of media reports about illegal spying against American antiwar activists and civil rights leaders, CIA assassination squads, and other dubious activities under Nixon and his predecessors. Chaired by Sen. Frank Church of Idaho, the committee interviewed more than 800 officials and held 21 public hearings. As a result of its work, Congress in 1978 passed the Foreign Intelligence Surveillance Act, which required warrants and court supervision for domestic wiretaps, and created intelligence oversight committees in the House and Senate.
So far, no lawmaker has openly endorsed a proposal for a new Church Committee-style investigation. A spokesman for Pelosi declined to say whether Pelosi herself would be in favor of a broader probe into U.S. intelligence. On the Senate side, the most logical supporters for a broader probe would be Democratic senators such as Patrick Leahy of Vermont and Russ Feingold of Wisconsin, who led the failed fight against the recent Bush-backed changes to FISA. (Both Feingold and Leahy’s offices declined to comment on a broader intelligence inquiry.)
The Democrats’ reticence on such action ultimately may be rooted in congressional complicity with the Bush administration’s intelligence policies. Many of the war on terror programs, including the NSA’s warrantless surveillance and the use of “enhanced interrogation techniques,” were cleared with key congressional Democrats, including Pelosi, Senate Intelligence Committee chairman Rockefeller, and former House Intelligence chairwoman Jane Harman, among others.
The discussions about a broad investigation were jump-started among civil liberties advocates this spring, when it became clear that the Democrats didn’t have the votes to oppose the Bush-backed bill updating FISA. The new legislation could prevent the full story of the NSA surveillance programs from ever being uncovered; it included retroactive immunity for telecommunications companies that may have violated FISA by collaborating with the NSA on warrantless wiretapping. Opponents of Bush’s policies were further angered when Democratic leaders stripped from their competing FISA bill a provision that would have established a national commission to investigate post-9/11 surveillance programs.
The next president obviously would play a key role in any decision to investigate intelligence abuses. Sen. John McCain, the Republican candidate, is running as a champion of Bush’s national security policies and would be unlikely to embrace an investigation that would, foremost, embarrass his own party. (Randy Scheunemann, McCain’s spokesman on national security, declined to comment.)
Some see a brighter prospect in Barack Obama, should he be elected. The plus with Obama, says the former Church Committee staffer, is that as a proponent of open government, he could order the executive branch to be more cooperative with Congress, rolling back the obsessive secrecy and stonewalling of the Bush White House. That could open the door to greater congressional scrutiny and oversight of the intelligence community, since the legislative branch lacked any real teeth under Bush. (Obama’s spokesman on national security, Ben Rhodes, did not reply to telephone calls and e-mails seeking comment.)
But even that may be a lofty hope. “It may be the last thing a new president would want to do,” said a participant in the ongoing discussions. Unfortunately, he said, “some people see the Church Committee ideas as a substitute for prosecutions that should already have happened.”
SAIC User Searches for Infomation About Wachovia Distributing Counterfeit Money
July 23rd, 2008The SAIC user (host: proxy1.east.saic.com, ip: 198.151.13.8) conducted the following Google search: customers claim that wachovia is handing out counterfeit bills.
The SAIC user visited the following Cryptogon pages:
/ (Home)
