Monthly Archives: April 2013

Exploiting Digital Fingerprints: Military

Backed by a $5.6 million grant from the US Defense Advanced Research Projects Agency, a  team at Stanford is embarking on a four-year project to better understand and model complex communication patterns in social networks in real time…The new project is called MEGA: Modern Graph Analysis for Dynamic Networks, and is led by Associate Professor Ashish Goel.   A team of seven principal investigators… will develop algorithms which model human communication and detect subtle patterns in huge data sets from social media.

DARPA is interested because, from a national security standpoint, big data holds the promise of recognizing threats in unusual or suspicious social interactions of terrorists and other foreign adversaries.   Our daily social communication is spread across many forms of interaction. E-mails, tweets, text messages and Facebook posts define our modern social lives. More than ever, information about this correspondence and behavior can be collected, stored, and made available to computer scientists.With access to billions of tweets, e-mails and text messages, a project like MEGA can build reliable mathematical models of social phenomena, like the way news spreads through a network for instance, or even how people choose their social connections, Goel said.

One goal of the MEGA project is to model human online behavior and find how it shapes social networks… The second component of MEGA’s research: writing the step-by-step procedures for processing distributed data in real time….Some of their algorithms and programs will be passed directly to DARPA to be used in a security context…

Excerpt, DARPA Grant Will Help Stanford Dig Deep into the Big Data in Social Networks, Stanford.edu, April 24, 2013

 

The Fault Lines of Nuclear Waste Storage

A bipartisan quartet of senators dropped a draft of a long-awaited bill on April 25, 2013 that would change how the United States stores nuclear waste.  The draft bill would enable the transfer of spent nuclear fuel currently housed at commercial nuclear facilities to intermediate storage sites. It also would allow states and local governments to apply to host the nation’s long-term waste repository.It also proposes creating a new federal agency to manage nuclear waste, taking that responsibility from the Energy Department (DOE). The president would appoint the head of that agency, which would be subject to Senate confirmation…The bill largely implements findings by the Blue Ribbon Commission on America’s Nuclear Future, an expert panel convened by President Obama in 2010. Some of the suggestions that made it into the draft bill will likely run into opposition.

Chiefly, Republicans will not be keen on moving nuclear waste to interim storage sites before a permanent repository has been identified.  The draft legislation calls for a pilot project to take in waste from high-risk areas — such as waste stored near fault lines — by 2021. After that, any nuclear waste could be sent to interim storage units so long as “substantial progress” is being made to site and select a permanent repository.  An alternative proposal by Feinstein and Alexander would require proposals for the pilot program to be submitted no later than six months after the bill becomes law.  But GOP lawmakers worry that interim storage sites would turn into de facto permanent ones without identifying a permanent facility.  They point to the recent flap regarding the Yucca Mountain site as a cautionary tale.  Obama pulled the plug on Nuclear Regulatory Commission reviews of DOE’s application to use the Nevada site in 2009.

Republicans viewed it as a political move — Obama campaigned on shuttering Yucca, and Senate Majority Leader Harry Reid (D-Nev.) opposes the site. They also said it was illegal because federal law identifies Yucca as the nation’s lone permanent repository.  Republicans, therefore, want to ensure a permanent site is selected before transporting waste to interim facilities to avoid a similar political kerfuffle.  GOP lawmakers might also oppose the draft bill’s call for a “consent-based” process that lets states and local governments apply to host the nation’s permanent repository.  Again, they say it’s a legal issue. Since a 1982 federal law fingers Yucca as the nation’s sole permanent nuclear waste dump, some Republicans argue there can be no others.  That’s the line House Republicans have taken.  They say any legislation coming over from the Senate that doesn’t identify Yucca as the nation’s permanent repository won’t move. And Senate legislation has almost no chance of including such a component considering Reid’s virulent opposition to Yucca.

Murkowski and the bill’s other backers have tried to minimize the Yucca issue by contending that more than one permanent storage site is likely necessary to handle the nation’s volume of nuclear waste.  The Alaska Republican has said she doesn’t want to give up on Yucca, but that she wants to do something about nuclear waste. She said the matter is urgent, pointing to leaking nuclear waste containers at the Hanford Nuclear Reservation in Washington state….

Zack Colman, Senators float nuclear waste storage draft bill, The Hill, April 25,  2013

Tax Havens: Micro-States in Europe

Armed with a cache of more than 2m documents, leaked from two offshore service providers, a group of investigative journalists has spent the past week publishing articles that lift the lid on thousands of companies and trusts set up in the British Virgin Islands and Cook Islands. The vast client list ranges from Asian politicians to Canadian lawyers—and no fewer than 4,000 Americans. For an industry that peddles secrecy and likes to operate in the shadows it is all rather embarrassing.

Opinions vary on the impact of the leaks. Tax campaigners have cheered it as a “game changer”. Offshore operators counter that most of the activity uncovered is legal. So what if President François Hollande’s former campaign treasurer has a Cayman Islands company? So do thousands of banks and hedge funds. Nevertheless, the affair will add to international scrutiny of tax havens. The pressure on them has grown as governments scramble to plug fiscal holes and push for the systematic exchange of tax information across borders. Germany’s finance minister welcomed the leak, hopeful that it would provide leverage to force more co-operation from “those who have been more reticent” to rein in the havens.

Faced with an end to the days of easy money, offshore jurisdictions are being forced to rethink their strategies. One of the more proactive has been Liechtenstein, nestled between Switzerland and Austria. The principality has long been popular with European tax dodgers, but growth accelerated when Swiss banks hawked Liechtenstein foundations to clients worldwide. This lucrative niche was damaged in 2008 when the former head of Germany’s postal service and many others were caught hiding money in the principality.

Under pressure from Germany and America, Liechtenstein buckled, agreeing to dilute bank secrecy and to exchange tax information. It has since signed many bilateral tax agreements and clamped down on money-laundering. The local financial industry has paid a high price for this. Liechtenstein banks’ client assets declined by almost 30% in the five years to 2011, to SFr110 billion ($118 billion)…

Other offshore centres must also attempt to square this circle. Next may be Luxembourg, a leader in offshore banking and tax avoidance. Bowing to greatly intensified pressure from its neighbours since the Cyprus debacle, the Grand Duchy has dropped its long-held opposition to swapping information about non-resident depositors with other EU countries. Jean-Claude Juncker, the prime minister, said the policy shift was about “following a global movement”, not caving in to German demands. Whether automatic information exchange can be introduced “without great damage”, as he confidently declared, remains to be seen.

Offshore finance: Leaky devils, Economist, April 13, 2013, at 71

A Love Affair with Iran: Glencore and Trafigura

Glencore, a commodity trading house run by the billionaire Ivan Glasenberg, traded $659m (£430m) of goods, including aluminium oxide, to Iran last year, the Guardian has established.  The company…has admitted that some of its aluminium oxide ended up in the hands of Iranian Aluminium Company (Iralco).  Trafigura, another commodity trading house, has also admitted to trading an unspecified aluminium oxide (also known as alumina) with Iralco in the past.

The International Atomic Energy Agency has named Iralco as supplying aluminium to Iran Centrifuge Technology Company (Tesa), which is part of the Atomic Energy Organisation of Iran (AEOI). Aluminium oxide is an important material in gas centrifuges used to enrich uranium.  At the time of the Glencore and Trafigura trades with Iralco, it was not illegal or a breach of sanctions to supply Iran with alumina. It is unknown whether Glencore or Trafigura’s alumina passed from Iralco to Tesa, or whether it was used in centrifuge construction.

Since 2006, AEOI has been subject to UN sanctions designed to prevent Iran’s nuclear armament ambitions. Trading with Tesa has been specifically banned under US, EU and UK sanctions since July 2010. Iralco was added to the EU sanctions list in December 2012.  Glencore said it “ceased transactions” with Iralco immediately when it learned of its links with Tesa, and the last trade was in October 2012. “Prior to EU sanctions in December 2012, we were not aware of a link/contract between Iralco and Tesa,” the company said in a statement.  Glencore said it is “reliant on the relevant regulatory bodies/governments to advise us on developments in who we can/can’t do business with”.

Tehran, which some experts say already has enough enriched uranium to make several nuclear weapons, is in the middle of upgrading its stock of more than 10,000 centrifuges. The IAEA said Iran is replacing outdated centrifuges with thousands of more powerful IR-2m models.  Experts at the Institute for Science and International Security (Isis) in London said: “Iran is trying to replace maraging [super-strong] steel end-caps with high strength aluminium end-caps.”  Mark Fitzpatrick, director of Isis’s nonproliferation and disarmament programme, said the new centrifuges could enrich uranium four to five times faster than the existing ones. Iran insists its enriched material is for peaceful use, not for nuclear weapons, but it has refused to allow IAEA inspectors into several of its atomic facilities.

The Guardian has learned that Glencore traded $659m worth of metals, wheat and coal with Iranian entities during 2012. Buried deep in its annual report, one of Glencore’s US affiliates, Century Aluminium, 46% owned by Glencore, states: “During 2012 non-US affiliates of the largest stockholder of the company [Glencore] entered into sales contracts for wheat and coal as well as sale and purchase contracts for metal oxides and metals with Iranian entities, which are either fully or majority owned by the GOI [government of Iran].”…..

Trafigura, which came to global political attention when it was revealed that a licensed independent contractor of a ship it had chartered dumped tonnes of toxic oil slops in Ivory Coast, said: “We can confirm that Trafigura has traded with Iralco in the past. In October 2011, a physical swap agreement was reached whereby Trafigura provided alumina to Iralco in return for aluminium for Trafigura to export worldwide. No deliveries have been made or exports received since new EU sanctions were published in December 2012.

Excerpts, Rupert Neate, Glencore traded with Iranian supplier to nuclear weapon’s programme, Guardian,  Apr. 21, 2013

The Arms Trade Treaty and $70bn Weapons Market

[T] global Arms Trade Treaty (ATT) … was overwhelmingly approved by 154 countries on April 2nd, 2013 by the General Assembly of the United Nations.  The next stage is for those countries which voted for the treaty to begin formally signing up to it in early June. Each signatory country will then have to ratify it at home. The treaty will come into legal force 90 days after the 50th country has ratified it—perhaps as soon as the end of this year. For some, ratification will be a simple process; for others it could prove harder.

The Obama administration is a strong supporter and likely to sign up soon. But getting the two-thirds majority in the Senate needed for ratification will be a struggle, even though the American Bar Association has confirmed the treaty does not infringe any constitutional right to bear arms (as the NRA claims). America’s defence industry also supports it, hoping to bring other countries’ arms

Whatever difficulties may lie ahead, supporters of the treaty to regulate the $70-billion-a-year trade in arms are jubilant. It is the climax of a campaign that began a decade ago. It had especially strong support from African and Caribbean countries where society has been torn apart by civil war or transnational crime, both stoked by the illicit trade in small arms. The deal involved compromises: for example, a weaker section on munitions. But what a senior diplomat close to the negotiations describes as “the heart” of the treaty—the prohibitions section—is alive and beating.

The ATT requires states to establish regulations for arms imports and exports in eight main categories: battle tanks, armoured combat vehicles, large-calibre artillery, combat aircraft, attack helicopters, warships, missiles and missile launchers, and small arms and light weapons. They must assess whether their transfer could lead to serious violations of international humanitarian law, terrorism or organised crime. They must take into account the risk of serious acts of violence against civilians, particularly women and children. An overriding risk of any of these consequences means states must block the deal.

States must also report annually on all their arms transfers to a UN-run “implementation support unit”. The aim is to shine a light on a previously murky business and make governments accountable under the terms of the treaty. The main sanction is embarrassment. That may seem feeble, but previous treaties on landmines and cluster bombs have set a new global norm which makes it shameful to use such weapons indiscriminately.

The abstainers include big arms exporters (China and Russia) and importers (India, Saudi Arabia, Egypt and Indonesia). But they may sign up later. Russia says it needs more time, while China (surprising some) played a constructive role, apparently influenced by the African countries with which it has forged close commercial ties. Both may find they pay an economic price if their arms industries are increasingly excluded from global supply chains. It will take time for new standards of behaviour to establish themselves, but the push has begun and the treaty can be further strengthened over time. For the moment, says a diplomat involved with the treaty over many years, what has been achieved is “pretty damn good”.

Regulating the weapons trade: A Killer Deal, Economist, April 6, 2013, at 69

 

Tibet – Mineral Resources, Fragile Ecology

The ecology of the Tibetan plateau, noted the Ministry of Land and Resources two years ago, is “extremely fragile”. Any damage, it warned, would be difficult or impossible to reverse. But, it went on, the China National Gold Group, a state-owned company, had achieved “astonishing results” in working to protect the environment around its mine near the region’s capital, Lhasa. On March 29th at least 83 of the mine’s workers lay buried under a colossal landslide. Its cause is not yet certain, but critics of Tibet’s mining frenzy feel vindicated.

The disaster at the Jiama copper and gold mine, about 70km (45 miles) north-west of Lhasa, has clearly embarrassed the government in Beijing. According to China Digital Times, a California-based media-monitoring website, the Communist Party ordered newspapers to stick to reports issued by the government and the state-owned news agency, Xinhua.

Foreign reporters are rarely allowed into Tibet, least of all to cover sensitive incidents. The official media have avoided speculation about any possible link between the landslide and mining activities in the area. They say the landslide covered a large area with 2m cubic metres of rubble. By the time The Economist went to press, 66 bodies had been pulled out by teams of rescuers with sniffer dogs. The high altitude and lack of oxygen made rescue work hard. A deputy minister of land and resources, Xu Deming, said preliminary investigations had shown that the landslide was caused by a “natural geological disaster”. Fragments of rock left behind by receding glaciers are being blamed, though officials do not explain why the workers’ camp was set up so close to such an apparent hazard.

The Tibetan government-in-exile based in India says it fears the disaster was caused by work related to the mine, which appears to have grown rapidly since construction began in 2008. It was formally opened two years later, at a ceremony attended by Tibet’s most senior officials. The $520m investment was described at the time as the biggest in Tibet’s mining industry by a firm belonging to the central government. The mine is owned by China Gold International Resources, a company listed in Hong Kong and Toronto. China National Gold Group is the controlling shareholder.

Tibet has been trying hard in recent years to encourage such companies to dig up the plateau’s metals and minerals. It has a lot of them to offer: China’s biggest reserves of copper and chromite (used in steel production), among the world’s biggest of lithium (used to make batteries), as well as abundant reserves of uranium, gold, borax (a component of ceramics and glass) and oil. Extracting these, however, often involves boring into a landscape considered sacred by Tibetans.

The Jiama mine, in a valley known to Tibetans as Gyama and revered as the birthplace of a seventh-century Tibetan king, has been the focus of protests by locals angered by environmental and other issues. Water from the valley flows into the Lhasa river. Woeser, a Tibetan activist based in Beijing, has blogged about locals’ fear that their water supplies will be polluted.

Tibetan resentment has been fuelled by the mining industry’s failure to provide much direct employment.

Excerpts, Mining in Tibet: The price of gold, Economist, April 6, 2013, at 54

How the US Persecutes Hacktivists

The government is treating hackers who try to make a political point as serious threats.   [T]he state has come down on them with remarkable force. This is in large measure evidence of how poignant, and troubling, their message has been.

Hacktivists, roughly speaking, are individuals who redeploy and repurpose technology for social causes. In this sense they are different from garden-variety hackers out to enrich only themselves. People like Steve Jobs, Steve Wozniak and Bill Gates began their careers as hackers — they repurposed technology, but without any particular political agenda. In the case of Mr. Jobs and Mr. Wozniak, they built and sold “blue boxes,” devices that allowed users to defraud the phone company. Today, of course, these people are establishment heroes, and the contrast between their almost exalted state and the scorn being heaped upon hacktivists is instructive.

For some reason, it seems that the government considers hackers who are out to line their pockets less of a threat than those who are trying to make a political point. Consider the case of Andrew Auernheimer, better known as “Weev.” When Weev discovered in 2010 that AT&T had left private information about its customers vulnerable on the Internet, he and a colleague wrote a script to access it. Technically, he did not “hack” anything; he merely executed a simple version of what Google Web crawlers do every second of every day — sequentially walk through public URLs and extract the content. When he got the information (the e-mail addresses of 114,000 iPad users, including Mayor Michael Bloomberg and Rahm Emanuel, then the White House chief of staff), Weev did not try to profit from it; he notified the blog Gawker of the security hole.  For this service Weev might have asked for free dinners for life, but instead he was recently sentenced to 41 months in prison and ordered to pay a fine of more than $73,000 in damages to AT&T to cover the cost of notifying its customers of its own security failure.  When the federal judge Susan Wigenton sentenced Weev on March 18, she described him with prose that could have been lifted from the prosecutor Meletus in Plato’s “Apology.”

“You consider yourself a hero of sorts,” she said, and noted that Weev’s “special skills” in computer coding called for a more draconian sentence. I was reminded of a line from an essay written in 1986 by a hacker called the Mentor: “My crime is that of outsmarting you, something that you will never forgive me for.”  When offered the chance to speak, Weev, like Socrates, did not back down: “I don’t come here today to ask for forgiveness. I’m here to tell this court, if it has any foresight at all, that it should be thinking about what it can do to make amends to me for the harm and the violence that has been inflicted upon my life.”  He then went on to heap scorn upon the law being used to put him away — the Computer Fraud and Abuse Act, the same law that prosecutors used to go after the 26-year-old Internet activist Aaron Swartz, who committed suicide in January.  The law, as interpreted by the prosecutors, makes it a felony to use a computer system for “unintended” applications, or even violate a terms-of-service agreement. That would theoretically make a felon out of anyone who lied about their age or weight on Match.com.

The case of Weev is not an isolated one. Barrett Brown, a journalist who had achieved some level of notoriety as the “the former unofficial not-spokesman for Anonymous,” the hacktivist group, now sits in federal custody in Texas. Mr. Brown came under the scrutiny of the authorities when he began poring over documents that had been released in the hack of two private security companies, HBGary Federal and Stratfor. Mr. Brown did not take part in the hacks, but he did become obsessed with the contents that emerged from them — in particular the extracted documents showed that private security contractors were being hired by the United States government to develop strategies for undermining protesters and journalists, including Glenn Greenwald, a columnist for Salon. Since the cache was enormous, Mr. Brown thought he might crowdsource the effort and copied and pasted the URL from an Anonymous chat server to a Web site called Project PM, which was under his control…..

Other hacktivists have felt the force of the United States government in recent months, and all reflect an alarming contrast between the severity of the punishment and the flimsiness of the actual charges. The case of Aaron Swartz has been well documented. Jeremy Hammond, who reportedly played a direct role in the Stratfor and HBGary hacks, has been in jail for more than a year awaiting trial. Mercedes Haefer, a journalism student at the University of Nevada, Las Vegas, faces charges for hosting an Internet Relay Chat channel where an Anonymous denial of service attack was planned. Most recently, Matthew Keys, a 26-year-old social-media editor at Reuters, who allegedly assisted hackers associated with Anonymous (who reportedly then made a prank change to a Los Angeles Times headline), was indicted on federal charges that could result in more than $750,000 in fines and prison time, inciting a new outcry against the law and its overly harsh enforcement. The list goes on.

In a world in which nearly everyone is technically a felon, we rely on the good judgment of prosecutors to decide who should be targets and how hard the law should come down on them. We have thus entered a legal reality not so different from that faced by Socrates when the Thirty Tyrants ruled Athens, and it is a dangerous one. When everyone is guilty of something, those most harshly prosecuted tend to be the ones that are challenging the established order, poking fun at the authorities, speaking truth to power — in other words, the gadflies of our society.

Excerpts, By PETER LUDLOW, Hacktivists as Gadflies, NY Times, April 13, 2013

Killing Unknown Extremists: drones

The US government was accused of hiding the truth about its drone programme after leaked intelligence files revealed that it was targeting unidentified militants who posed no immediate threat to the United States.

Despite President Barack Obama’s public promise that the CIA’s armed Predators and Reapers were only firing on those suspected of plotting against America, top-secret documents show that in one year alone almost half of those killed were simply listed as “unknown extremists”. The documents, obtained by US news agency McClatchy, also reveal Pakistan’s intelligence agency was co-operating with the US at the same time as its government was condemning drone strikes on its soil.  “There is now mounting evidence that the Obama administration is misleading the American public – and the world at large – about the drone war it is waging in Pakistan,” said Jennifer Gibson, a lawyer working with the British human rights charity Reprieve.

“The reports show a significant number of the strikes have nothing to do with al-Qa’ida. Instead, they may have been a quid pro quo exchange between two countries’ spy agencies. The result is that the US often doesn’t know who it is killing.”

The US has come under increasing international pressure to open up its decision-making process to scrutiny following claims that the drone programme has killed hundreds of civilians among an estimated death toll of 2,500, predominantly in Pakistan and Yemen. Preparations are in place to transfer more control of the programme from the CIA to the Pentagon, in a move said to herald greater transparency.

The US intelligence reports leaked to McClatchy covered, its reporters said, most of the drone strikes in Pakistan during 2006 to 2008 as well as 2010 to 2011. Most of the attacks targeted al-Qa’ida but many were aimed at the Haqqani network and factions of the Pakistani Taliban.  At least 265 of the 482 people killed by the CIA programme in the 12 months up to September 2011 were listed as Afghan, Pakistani or “unknown extremists”.This contrasts sharply with US administration’s claim that drones are only used to target “senior operational leaders” in al-Qa’ida, those involved in the 11 September 2001 attacks or individuals plotting imminent attacks on the US.

Last night a spokesman for the US Department of Defence said neither they nor the CIA commented on intelligence matters

Excerpt, Terri Judd US drones target low-level militants who pose no threat, Independent, April 10, 2013

HardBall: Chevron and the Oil Pollution in Amazon

An environmental case that has pitted Chevron against Ecuadorean Amazon villagers for two decades has taken another bizarre twist, with an American consulting firm now recanting research favorable to the villagers’ claims of pollution in remote tracts of jungle.  The consulting firm, Stratus Consulting of Boulder, Colo., announced late Thursday (April 11, 2013) that it had originally been misled by Steven R. Donziger, a lead lawyer for the Ecuadorean villagers, and had decided to disavow its contributions to scientific research about whether there was groundwater contamination that sickened the residents in swaths of rain forest.

The move prompted the plaintiffs to assert that Chevron was coercing parties to the case, citing this as another example of strong tactics employed by the company as it tries to overturn an Ecuadorean judge’s decision two years ago that it pay $18 billion in damages, one of the largest environmental awards ever. In this instance, the plaintiffs claim that Chevron pressured Stratus to retract its assessment in exchange for dismissal of legal claims in a countersuit filed by Chevron made against the firm — claims that could have pushed the consulting business into bankruptcy.  “Stratus deeply regrets its involvement in the Ecuador litigation,” the firm said. It remains unclear whether this development with Stratus will have much impact on Chevron’s appeals, because the judge also based his ruling on other environmental assessments. The judge ruled that back in the 1970s, Texaco had left an environmental mess in oil drilling operations while operating as a partner with the Ecuadorean state oil company, and that Chevron, which bought Texaco in 2001, must apologize for and was liable for the damage.

Chevron has refused to apologize. In addition to appealing the decision in the Ecuadorean courts, Chevron also filed a countersuit in federal court in New York against Mr. Donziger and Stratus Consulting, accusing them of racketeering and fraud. Because Stratus has now retracted its statements on the Ecuadorean pollution, Chevron agreed not to pursue claims against the firm anymore. On Friday, Chevron filed witness statements from Douglas Beltman, a Stratus vice president, and Ann Maest, a Stratus scientist, in which they now say they were not aware of scientific evidence of groundwater contamination in the former Texaco concession area or of any adverse health impact to people from the operations.

Mr. Beltman stated that “at Donziger’s direction,” he drafted portions of a report in the first person as if it were written by Richard Cabrera, the supposedly independent expert, that detailed environmental damage for the Ecuadorean court. “Donziger stressed to me and Ann Maest the importance of Stratus ensuring that no one learn of Stratus’ involvement in any aspect of the Cabrera Report or Responses,” he said.  In an interview, Mr. Beltman said, “This settlement was extensively negotiated with Chevron and we think it’s fair and it’s not extortion.”  Mr. Donziger said he could not comment since he was a defendant in the racketeering case filed by Chevron.

It was not immediately clear what impact Stratus’s recantation would have on the case. Chevron’s appeal is before Ecuador’s highest court, the National Court of Justice, and the company is defending itself in courts in Canada, Argentina and Brazil to avoid paying damages in those countries. The plaintiffs are waging an international campaign seeking damages because Chevron has no assets in Ecuador itself…

Kent Robertson, a Chevron spokesman, said the statements should uphold the company’s position in the American racketeering case and in the international enforcement proceedings. “The declarations today show there is no scientific evidence to support the plaintiffs’ lawyers’ allegations,” he said.

Craig Smyser, a lawyer for some of the Ecuadorean plaintiffs, said the statements by the consulting firm “should have almost no effect” because the Ecuadorean judge relied on many expert reports other than the one that Stratus was involved in.  He attributed the decision by Stratus to repudiate its earlier work to the “immense financial strain that threatened the financial extinction of the firm, including a campaign by Chevron to discredit Stratus with various government agencies and businesses with which Stratus worked.”

Chevron has been playing hardball for at least four years. The company produced video recordings from pens and watches wired with bugging devices that suggested a bribery scheme surrounding the proceedings and involving a judge hearing the case. An American behind the secret recordings was a convicted drug trafficker.  But the oil company appeared to gain the upper hand three years ago when it won a legal bid to secure the outtakes from a documentary about the case, “Crude,” in which Mr. Donziger was shown describing the need to pressure a Ecuadorean judge and boasting of meetings with Ecuadorean officials.

In a sworn statement filed in an American court, Alberto Guerra, an Ecuadorean judge who heard the Chevron case in 2003 and 2004, accused Nicolas Zambrano, the judge who issued the $18 billion verdict against Chevron, of taking a $500,000 bribe from the plaintiffs. Mr. Zambrano denied the charge, and in his own affidavit, said that Mr. Guerra had told him that Chevron would offer him $1 million in return for a favorable judgment.  Chevron has denied offering any bribes.

By CLIFFORD KRAUSS, Consultant Recants in Chevron Pollution Case in Ecuador, NY Times, April 12, 2013

 

Funding its Enemies: United States

The U.S. government may accidentally be funneling millions of dollars to the very terrorists and insurgents it’s fighting in Afghanistan through sloppy contracting regulations, according to a new government report.  The report, called “Contracting With the Enemy”  (pdf) and published April 11, 2013 by the Special Inspector General for Afghanistan Reconstruction (SIGAR), examined the system designed to make sure that the U.S. reconstruction is not providing business for any individuals or groups associated with terrorist or insurgent organizations.  SIGAR said that due to “several weaknesses” in the long and complicated process, “millions of contracting dollars could be diverted to forces seeking to harm U.S. military and civilian personnel in Afghanistan and derail the multi-billion dollar reconstruction effort.”

The report centered on what’s known as Section 841, part of the 2012 National Defense Authorization Act that describes how the U.S. government is supposed to identify individuals or companies with suspected ties to insurgents, confirm that information, pass it along to the head of the contracting activity, then to the primary contractor and finally to the targeted subcontractors whose business deals would then be voided or restricted based on guidance from higher up.

SIGAR said Section 841 was part of a “variety of efforts” undertaken by the government to keep American contracting money out of terrorists’ hands in the wake of incidents like the $2.16 billion Host Nation Trucking contract. In that instance, SIGAR said, the U.S. government paid several companies to ship more than 70 percent of food and materiel to American troops in Afghanistan, only to realize that some of those funds were “widely believed to have been funneled to insurgents.”

Section 841 is still full of holes, SIGAR said, from the military not telling the head of contracting activity about potentially shady actors to the head of the contracting activity not telling their prime contractors.  The SIGAR report also notes that Section 841 only applies to contracts worth more than $100,000, even though it said approximately 80 percent of contracts awarded in Afghanistan are worth less than that.

SIGAR made seven recommendations to rectify the reporting loopholes, most to “improve visibility over active contracts” and one to ditch the $100,000 threshold on Section 841. The SIGAR report said the military in general agreed with those recommendations but plans to issue a formal response to the new report later.

US May Unwittingly Fund Terrorism in Afghanistan: Report, ABC News, Apr. 13, 2013

Greening the Shipping Industry

The shipping industry faces the cost of complying with a deluge of new rules(issued by the International Maritime Organisation (IMO)). To make matters worse, it is in the middle of a slump caused by too many ships chasing too little trade.  As the deadlines for all these rules approach, shipping bosses are firing off distress flares. Masamichi Morooka, chairman of the International Chamber of Shipping (ICS), a lobby group, lamented on March 19th that the cost could run into “hundreds of billions” of dollars. He begged regulators to take into account the dire state of shipping

One of the first big expenses will be for cleaner fuel. Ships used to burn the cheap, unrefined crud, laden with sulphur and other nasties, that is left over when oil is refined. The fine soot that such fuel gives off can cause premature deaths from asthma and heart attacks. So in 2005 the IMO started to limit the sulphur content of maritime fuel, especially in “emission-control areas” along heavily populated coasts in North America and Europe. These limits are set to be tightened drastically,  Such fuels currently cost about 50% more than unrefined “residual” grades…

Shipping firms are also under pressure to cut their emissions of carbon dioxide and other greenhouse gases. The IMO reckons that ships cause about 2.7% of total man-made emissions, a bit more than planes but a lot less than cars and trucks. Under a convention it has brought into force this year, ships will have to introduce fuel-economy measures with the aim of reducing their emissions by 20% by 2020 and 50% by 2050….

The IMO is also pressing on with planned new rules on cleaning up ships’ ballast water. These may come into effect this year, once enough national governments have signed up for them. A study last year in the Journal of Marine Engineering and Technology* reckoned that around 60,000 ships worldwide would need refitting with one or more cleansing units, costing up to $1.7m each. In that case, shipping firms could be whacked with a bill of the order of $50 billion…

New proposals to make shipping greener, and push it further into the red, keep popping up. This week the European Parliament’s environment committee backed proposals for recycling levies on vessels calling at EU ports. This would pay for safer scrapping of old ships, which can contain asbestos and other toxic materials….

At a conference in Athens recently John Platsidakis, a Greek shipping boss who chairs an association of bulk-cargo operators, grumbled: “We carry 90% of world trade and we emit only 2.7% of the CO2 but still we are treated as if we are acting with indifference to the environment.”…[A]irlines, for example, have lobbied more shrewdly than shipping firms. But then again, the shipping industry is bigger and more fragmented than aviation, making it harder for it to present a united front. Many small, family-owned shipping firms have publicity-shy bosses and lack the sophisticated public-relations machines that giant firms deploy….[T]he ICS seeks to represent the entire global merchant-shipping fleet with just 20 people. The industry’s sluggish lobbying has meant that rules get passed before it has a chance to object to them. And once they are passed, it is much harder to get them changed.

The shipping industry: Sinking under a big green wave, Economist, Mar. 30, 2013, at 69

Gas as Tool of Foreign Policy: Gazprom

The good times for Gazprom once seemed like they would never end. The world’s largest natural-gas producer, founded out of the old Soviet gas ministry, enjoyed sky-high gas prices for years. The gas flowed along pipelines into Europe; the profits flowed back. Gazprom began work on a $1.9 billion headquarters in St Petersburg and acted as a bottomless wallet for Russia’s rulers. Whatever problems it encountered, it could “drown with money”, as Natalia Volchkova of the New Economic School in Moscow puts it.  All this is now under threat. Its ageing gasfields are in decline. Thanks to America’s shale boom, gas is more plentiful on the world market. Gazprom’s European customers are realising that they have other choices. The prices it can charge are falling, and with them the firm’s prospects.

Years of easy money have made Gazprom fat and slow. It dominates its domestic market, producing 75% of Russia’s gas. It enjoys a monopoly over exports of the stuff. Until recently, it had a tight grip on western Europe, where it supplies around 25% of gas. It retains an even tighter grip on former Soviet-bloc countries in eastern Europe. For a long time, this insulated Gazprom from shifts in global gas markets.

Gazprom is not a normal company. It serves two masters. As a firm that issues shares to outside investors, it should in theory strive to maximise profits in the long run. But since it is majority-owned by the Russian state, it pursues political goals, too.  In practice, it serves one master more assiduously than the other. As President Vladimir Putin consolidated his power in the early 2000s, he built Gazprom into a main instrument of Russia’s new state capitalism. He appointed allies to top positions. He used Gazprom as a tool of foreign policy, for example by cutting off gas supplies to Georgia, Ukraine, Belarus and Moldova during political rows.  Gazprom’s deep pockets have helped Mr Putin at home, too. It sells gas cheaply in Russia, so that the poor do not freeze in winter. Oddly for an energy company, it has bought television stations and newspapers, all of which are now friendly to the Kremlin. Mikhail Krutikhin of RusEnergy, a consultancy, says, “Gazprom has one manager: Putin.”

With friends in high places, Gazprom has enjoyed low taxes and privileged access to gasfields. But its costs are startlingly high…And some projects favoured by Mr Putin are of questionable economic value. For example, he is dead set on building a $21-billion South Stream pipeline between southern Russia and Austria via eastern Europe. This project has political appeal because it would bypass troublesome Ukraine as the main transit route for gas to Europe. But given weak prices and demand, it is “commercial idiocy”, says Mr Krutikhin. The opening in 2011 of Nord Stream, an offshore pipeline to Germany, was a diplomatic coup for Mr Putin, but it is still running far below capacity….

Gas on the spot market is often much cheaper than Russian gas delivered under long-term contracts… Because so many of its customers are tied to contracts, the full effects of the global gas glut on Gazprom’s bottom line will not be felt straight away….   The final threat to Gazprom’s old way of doing business is legal. An antitrust probe launched by the European Commission alleges that Gazprom is using its dominant position in central and eastern Europe to restrict competition and hike prices. If it loses the case, it could face a fine of up to $14 billion and lose the mighty lever of being able to charge some European countries more than others.  An adverse ruling might also threaten its strategy of trying to dominate the European gas market by owning both the supplies and the means of distributing them. Gazprom has quietly bought gas pipelines and storage facilities. It has tried to strike deals whereby it lends money to impoverished European utilities in order to secure their custom. If this strategy stops working, Gazprom will no longer be such a potent foreign-policy tool for the Kremlin….

Gazprom’s future may involve more robust competition even at home. Two domestic rivals have emerged: Novatek, a gas producer part owned by Gennady Timchenko, an old acquaintance of Mr Putin’s, and Rosneft, a state-owned oil firm led by Mr Putin’s trusted adviser, Igor Sechin. Put together, non-Gazprom firms now account for a quarter of all Russian gas production….

The other way to get gas to Asia would be via pipeline. The obvious destination is China, which sits on Russia’s doorstep and is potentially the world’s biggest market for gas. The two countries have haggled unsuccessfully for a decade. In February they revealed they had agreed to everything related to pipeline exports apart from the price. China has signed up to import gas from Central Asia, Australia, the Middle East and west Africa; almost everywhere, in fact, except Russia. China refuses to pay Asian prices; Gazprom won’t budge.

Gazprom: Russia’s wounded giant, Economist, Mar. 30, 2013, at 69

The Secret Bugs: Exploits

Packets of computer code, known as “exploits”, allow hackers to infiltrate or even control computers running software in which a design flaw, called a “vulnerability”, has been discovered. Criminal and, to a lesser extent, terror groups purchase exploits on more than two dozen illicit online forums or through at least a dozen clandestine brokers, says Venkatramana Subrahmanian, a University of Maryland expert in these black markets. He likens the transactions to “selling a gun to a criminal”.

Just a dozen years ago the buying and selling of illicit exploits was so rare that India’s Central Bureau of Investigation had not yet identified any criminal syndicates involved in the trade, says R.K. Raghavan, a former director of the bureau. Underground markets are now widespread, he says. Exploits empower criminals to steal data and money. Worse still, they provide cyber-firepower to hostile governments that would otherwise lack the expertise to attack an advanced country’s computer systems, worries Colonel John Adams, head of the Marine Corps’ Intelligence Integration Division in Quantico, Virginia.

Exploits themselves are generally legal. Several legitimate businesses sell them. A Massachusetts firm called Netragard last year sold more than 50 exploits to businesses and government agencies in America for prices ranging from $20,000 to more than $250,000. Adriel Desautels, Netragard’s founder, describes some of the exploits sold as “weaponised”. The firm buys a lot from three dozen independent hackers who, like clients, are carefully screened to make sure they are not selling code to anyone else, and especially not to a criminal group or unfriendly government.

More than half of exploits sold are now bought from bona fide firms rather than from freelance hackers, says Roy Lindelauf, a researcher at the Netherlands Defence Academy. He declines to say if Dutch army or intelligence agencies buy exploits, noting that his government is still figuring out “what we’re allowed to do offensively”.Laws to ban the trade in exploits are being mooted. Marietje Schaake, a Dutch member of the European Parliament, is spearheading an effort to pass export-control laws for exploits. It is gathering support, she says, because they can be used as “digital weapons” by despotic regimes. For example, they could be used to monitor traffic on a dissident’s smartphone. However, for a handful of reasons, new laws are unlikely to be effective.

Exploits are a form of knowledge, expressed in computer code. Attempting to stop people from generating and spreading knowledge is futile, says Dave Aitel, a former computer scientist at America’s National Security Agency (NSA) who went on to found Immunity, a computer-security firm in Florida. He says that legal systems would not even agree on which code is good and which is bad. Many legal experts say code should be protected by free-speech laws—it is, after all, language expressed as strings of zeros and ones.

Moreover, tracking down exploits is hard. Hackers keep them secret so that the intended victim doesn’t identify and fix the vulnerability, thereby rendering the exploit worthless. As a French exploit developer puts it, those liable to be rapidly detected are about as useful as a “disposable gun” that can be fired just once. Secrecy surrounding the design, sale and use of exploits makes protecting computer networks from them akin to finding “unknown unknowns”, says Kenneth Geers, a cyber-security specialist at America’s Naval Criminal Investigative Service.

Several governments want firms to develop exploits. In 2010 a computer worm called Stuxnet was revealed to have attacked Iran’s nuclear kit. It used four main exploits to get in; at least one appears to have been bought rather than developed in-house by the government that launched the attack (presumably America or Israel), says David Lindahl, an IT expert at the Swedish Defence Research Agency, a government body in Stockholm. An unprecedented weapon, Stuxnet remained undetected for years by quietly erasing its tracks after “planting sabotage charges at exactly the right place” in Iran’s uranium-enrichment centrifuges, Mr Lindahl says.

Nearly all well-financed intelligence agencies buy exploits, says Eric Filiol, a lieutenant-colonel in computer intelligence for France’s army until 2009. Computer experts who years ago would reveal software vulnerabilities for mere prestige have realised that they were treating “diamonds as pebbles”, says Mr Filiol, now head of the Operational Cryptography and Computer Virology Lab in Laval. His lab is partly financed by France’s defence ministry to provide it with exploits.

The price of exploits has risen more than fivefold since 2004, Mr Filiol says, referring to a confidential document. They vary greatly, depending on three main factors: how hard the exploit is to develop; the number of computers to which it provides access; and the value of those computers. An exploit that can stealthily provide administrator privileges to a distant computer running Windows XP, a no-longer-fashionable operating system, costs only about $40,000. An exploit for Internet Explorer, a popular browser, can cost as much as $500,000 (see chart).

Software firms also buy exploits to identify and repair vulnerabilities in their products before others take advantage of them. A small Vancouver firm called Tarsnap, for example, has paid 30 people who pointed out flaws in its encryption software for online PC backups. To develop better defences for its clients’ computer systems, HP, an American giant, has spent more than $7m since 2005 buying hundreds of “zero days”, as undiscovered exploits are also known in hacker slang. (Once discovered, an exploit’s days are numbered, literally: it becomes a “one day”, then a “two day”, and so on until the vulnerability it exploits is patched.)

Such “bug bounty” schemes, however, will struggle to compete with buyers who want to exploit rather than seal vulnerabilities. Tarsnap’s biggest payout was just $500. Last year Google offered Vupen, a French firm, $60,000 for an exploit that burrowed into its Chrome browser. Vupen’s boss, Chaouki Bekrar, balked, noting that he could get more elsewhere.

Other reputable customers, such as Western intelligence agencies, often pay higher prices. Mr Lindelauf reckons that America’s spies spend the most on exploits. Vupen and other exploit vendors decline to name their clients. However, brisk sales are partly driven by demand from defence contractors that see cyberspace as a “new battle domain”, says Matt Georgy, head of technology at Endgame, a Maryland firm that sells most of its best exploits for between $100,000 and $200,000. He laments a rise in sales by unscrupulous vendors to dangerous groups.

On March 12th the head of the Pentagon’s Cyber Command, General Keith Alexander, warned the Senate Armed Services Committee that state-sponsored groups are stepping up efforts to steal and destroy data using “cybertools” purchased in illicit online markets. As an American military-intelligence official points out, governments that buy exploits are “building the black market”, thereby bankrolling dangerous R&D. For this reason, governments appear increasingly keen to develop exploits in-house. Paulo Shakarian, a cyberwar expert at West Point, an American military academy, says China appears to be moving in this direction.

Developing exploits in-house reduces the risk that a double-dealing vendor will resell code meant to be exclusive. Even so, the trade isn’t likely to fade away. When developers work out a trick that gives them control over the targeted software, they like to yell out a celebratory “who’s your daddy?” notes Pierre Roberge, boss of Arc4dia, a Quebec firm that sells exploits to spy agencies. Exploit trading will continue as long as people pay big money for the opportunity to utter the same joke—this time at the expense of a victim who has been hacked.

Cyber-security: The digital arms trade, Economist, Mar. 30, 2013, at 65.

The Sanctions Busters: Iran and Friends

The past 15 months have been grim for Iranian businesses which trade with the outside world. America has tightened sanctions against Iran’s financial system; the European Union has put an embargo on its oil; and international traders are wary of dealing with the country.Iranian businesses are used to fighting for survival. The Islamic Republic has faced sanctions of one sort or another since its creation in 1979. Parts for Iran’s ageing civilian airliners trickle in from the black market. A host of sanctioned products, from industrial chemicals to anti-aircraft missiles, come from China. Almost any good can be found in Iran, at a price.  Amir, a manager in a mining business, says he regularly meets British and German suppliers in Turkey, to obtain the most advanced equipment to tap Iran’s mineral wealth. “Foreign firms are terrified of doing something illegal, but in the end they are businessmen,” he says. “The Europeans send our cargoes to Dubai, documented as the final destination. From there we are in charge.” Amir uses Gulf middlemen to change the documents, for a fee of 3-5%, before the goods are shipped to Bandar Abbas, Iran’s largest port.

Because few international banks deal with sanctioned Iranian institutions, Iranian importers have to find roundabout ways of paying suppliers. Amir uses a network of Iranian go-betweens who own companies in South Africa and Malaysia to pay his suppliers’ Western banks. He says 30% of his revenues are spent on avoiding sanctions—not counting the time involved.

The sanctions have hit Iran’s oil industry the hardest. Iran’s government depends on oil for more than half of its revenue, but exports have fallen and grown more volatile. The country’s total production is a quarter less than the 3.6m barrels per day it pumped in 2011.  One way of keeping sales going is to dress up Iranian oil as Iraqi. Another trick is to move Iranian oil onto foreign tankers on the open sea. Once crews have switched off their ships’ tracking beacons, this is all but undetectable. The oil is sold at a discount. Fujairah, in the United Arab Emirates (UAE), is a big market for Iranian oil. Business is down, says Sajad, but European firms still trade with Iran, using Swiss subsidiaries which broker deals with the Iranians and collect the crude using tankers under the flag of a third country.

The sanctions have been a fillip for the few institutions still handling Iranian money. One foreign bank charges 5% on cash moving in or out of Iran, says an Iranian shipping source. Normal business rates are a fraction of a percent, but Iranian firms have little choice.

Sometimes the fear of sanctions is more effective than the sanctions themselves. A customer in the UAE owed $1.3m to Sajad’s shipping firm but would only send it in costly small instalments. Sajad flew to the Gulf to pick up the balance in cash. “I was nervous about what I would say to customs from either country if they checked my suitcase,” he says. “I decided I would tell the truth. I am not a criminal.” But no one did.

Dodging sanctions in Iran: Around the block, Economist, Mar. 3, 2013, at 68

It Can Cost Your Life: Shipping Minerals

A dark underbelly exists in Indonesia’s thriving trade with China. Since late 2010 five ships loaded with Indonesian minerals have sunk when bound for China, with huge loss of life. Little has been done to break the deadly trend. Indeed, plenty of interests have an incentive to hush it up. The latest ship to founder is the Harita Bauxite, a bulk carrier which sank on February 17th near the Philippines. Of its 24 crew, who were all or mainly from Myanmar, ten were rescued, one of whom later died. Fourteen were still missing when the search was called off two weeks later.

The vessel is thought to have been carrying nickel ore, a potentially deadly cargo, loaded on Obi island in the remote Indonesian province of Muluku and destined for China’s steel mills. In terms of the global bulk trade, shipments of nickel ore from Indonesia to China are tiny: just 2m-3m tonnes out of more than 4 billion tonnes of bulk goods carried each year on over 9,000 vessels. Yet this backwater trade accounted for four of the 20 bulk freighters lost worldwide during 2010-11, and for 66 of 82 deaths, according to Intercargo, an association of ship owners.

ll four ships were found to have sunk because the cargo had liquefied. Nickel ore is dangerous because if it gets too wet, the fine, claylike particles that are often present in the ore turn the cargo to a liquid gloop that sloshes about the holds with such momentum that even a giant ship can capsize. The four ships had loaded during Indonesia’s rainy season. The ore is typically stockpiled in the open. Quite how the Harita Bauxite foundered is not yet clear, but if liquefaction was a factor, as many in the shipping industry suspect, it will have been another entirely avoidable tragedy.

Preventing liquefaction should be fairly simple. It involves checking the moisture content of susceptible commodities. If they are too wet, a surveyor will deem the cargo unsafe and not to be loaded. Time and again in Indonesia, checks have been inadequate. With the bulk-shipping business in the doldrums, the profitable nickel trade is a siren call for ship owners and charterers. Indonesia’s ministers and mandarins in Jakarta, the capital, refuse to comment on the tragedies and have done little to tighten policing at faraway ports in Sulawesi, Muluku and Papua.

Ship captains report intimidation by miners and agents if they refuse to accept cargo. A leading marine insurer says the ports’ remoteness makes it hard to sample cargoes reliably. Local officials turn a blind eye to unsafe practices. Peter Lundahl Rasmussen at Bimco, a maritime association, says surveyors trying to do their job have been assaulted or arrested.

With insurance claims mounting, shipping bodies and insurers have issued plenty of instructions about how to load nickel ore safely, especially in Indonesia. The International Maritime Organisation (IMO), the UN agency responsible for shipping safety, is also taking steps to tighten the regulations for commodities that can suffer liquefaction.

But the IMO’s process is a glacial one, and the new rules will not clear its various committees and be promulgated until at least 2015. Even then, the organisation relies on its members to enforce regulations. In Indonesia, in other words, the impact of tighter rules may be minimal. Moreover, existing and planned legislation covers ore depots and the ports, but not the transit between the two, where rain may do its dangerous work. Steve Cameron at RTI, a risk consultancy, argues that it would be more effective if mining companies faced charges of corporate manslaughter for not ensuring that their ore reaches ships in good condition.

Shipping: Deadly Trade, Economist, Mar. 23, 2013, at 46.

 

How the FBI Uses Technology Firms

National Security Letters [NSLs] are written demands from the FBI that compel internet service providers, credit companies, financial institutions and others to hand over confidential records about their customers, such as subscriber information, phone numbers and e-mail addresses, websites visited and more.  NSLs are a powerful tool because they do not require court approval, and they come with a built-in gag order, preventing recipients from disclosing to anyone that they have even received an NSL. An FBI agent looking into a possible anti-terrorism case can self-issue an NSL to a credit bureau, ISP or phone company with only the sign-off of the Special Agent in Charge of their office. The FBI has to merely assert that the information is “relevant” to an investigation into international terrorism or clandestine intelligence activities.

The lack of court oversight raises the possibility for extensive abuse of NSLs under the cover of secrecy, which the gag order only exacerbates. In 2007 a Justice Department Inspector General audit found that the FBI had indeed abused its authority and misused NSLs on many occasions. After 9/11, for example, the FBI paid multimillion-dollar contracts to AT&T and Verizon requiring the companies to station employees inside the FBI and to give these employees access to the telecom databases so they could immediately service FBI requests for telephone records. The IG found that the employees let FBI agents illegally look at customer records without paperwork and even wrote NSLs for the FBI.

The first challenge to NSLs occurred around an NSL that was sent in 2005 to Library Connection, a consolidated back office system for several libraries in Connecticut. The gag order was challenged and found to be unconstitutional because it was a blanket order and was automatic. As a result of that case, the government revised the statute to allow recipients to challenge the gag order. .  Now companies can simply notify the FBI in writing that they oppose the gag order, leaving the burden on the FBI to prove in court that disclosure of an NSL would harm a national security case. The case also led to changes in Justice Department procedures. Since Feb. 2009, NSLs must include express notification to recipients that they have a right to challenge the built-in gag order that prevents them from disclosing to anyone that the government is seeking customer records.

Few recipients, however, have ever used this right to challenge the letters or gag orders.

When recipients have challenged NSLs, the proceedings have occurred mostly in secret, with court documents either sealed or redacted heavily to cover the name of the recipient and other identifying details about the case.

On March 2013  U.S. District Judge Susan Illston (California) ordered the government to stop issuing so-called NSLs across the board, in a stunning defeat for the Obama administration’s surveillance practices. She also ordered the government to cease enforcing the gag provision in any other cases. However, she stayed her order for 90 days to give the government a chance to appeal to the Ninth Circuit Court of Appeals.

“We are very pleased that the Court recognized the fatal constitutional shortcomings of the NSL statute,” said Matt Zimmerman, senior staff attorney for the Electronic Frontier Foundation, which filed a challenge to NSLs on behalf of an unknown telecom that received an NSL in 2011. “The government’s gags have truncated the public debate on these controversial surveillance tools. Our client looks forward to the day when it can publicly discuss its experience.”  The telecommunications company received the ultra-secret demand letter in 2011 from the FBI seeking information about a customer or customers. The company took the extraordinary and rare step of challenging the underlying authority of the National Security Letter, as well as the legitimacy of the gag order that came with it.

After the telecom challenged the NSL, the Justice Department took its own extraordinary measure and sued the company, arguing in court documents that the company was violating the law by challenging its authority.

In her ruling, Judge Illston agreed with EFF, saying that the NSL nondisclosure provisions “significantly infringe on speech regarding controversial government powers.”  She noted that the telecom had been “adamant about its desire to speak publicly about the fact that it received the NSL at issue to further inform the ongoing public debate” on the government’s use of the letters.  She also said that the review process for challenging an order violated the separation of powers. Because the gag order provisions cannot be separated from the rest of the statute, Illston ruled that the entire statute was unconstitutional.

Illston found that although the government made a strong argument for prohibiting the recipients of NSLs from disclosing to the target of an investigation or the public the specific information being sought by an NSL, the government did not provide compelling argument that the mere fact of disclosing that an NSL was received harmed national security interests.  A blanket prohibition on disclosure, she found, was overly broad and “creates too large a danger that speech is being unnecessarily restricted.” She noted that 97 percent of the more than 200,000 NSLs that have been issued by the government were issued with nondisclosure orders.

——

Number of NSLs Issued by FBI

2003——-39,346

2004——56,507

2005—–47,221

2006—-49,425

2007—-16,804

2008—-24,744

2009—14,788

2010—24,287

2011—16,511

(Source: DoJ reports)

She also noted that since the gag order on NSL’s is indefinite — unless a recipient files a petition with the court asking it to modify or set aside the nondisclosure order — it amount to a “permanent ban on speech absent the rare recipient who has the resources and motivation to hire counsel and affirmatively seek review by a district court.”

This case is remarkable for a number of reasons, among them the fact that a telecom challenged the NSL in the first place, and that EFF got the government to agree to release some of the documents to the public, though the telecom was not identified in them. The Wall Street Journal, however, used details left in the court records, and narrowed the likely plaintiffs down to one, a small San-Francisco-based telecom named Credo. The company’s CEO, Michael Kieschnick, didn’t confirm or deny that his company is the unidentified recipient of the NSL, but did release a statement following Illston’s ruling.

“This ruling is the most significant court victory for our constitutional rights since the dark day when George W. Bush signed the Patriot Act,” Kieschnick said. “This decision is notable for its clarity and depth. From this day forward, the U.S. government’s unconstitutional practice of using National Security Letters to obtain private information without court oversight and its denial of the First Amendment rights of National Security Letter recipients have finally been stopped by our courts.”

The case began sometime in 2011, when Credo or another telecom received the NSL from the FBI.EFF filed a challenge on behalf of the telecom.   In May that year on First Amendment grounds, asserting first that the gag order amounted to unconstitutional prior restraint and, second, that the NSL statute itself “violates the anonymous speech and associational rights of Americans” by forcing companies to hand over data about their customers.

The redacted documents don’t indicate the exact information the government was seeking from the telecom, and EFF won’t disclose the details. But by way of general explanation, Zimmerman said that the NSL statute allows the government to compel an ISP or web site to hand over information about someone who posted anonymously to a message board or to compel a phone company to hand over “calling circle” information, that is, information about who has communicated with someone by phone.

An FBI agent could give a telecom a name or a phone number, for example, and ask for the numbers and identities of anyone who has communicated with that person. “They’re asking for association information – who do you hang out with, who do you communicate with, [in order] to get information about previously unknown people.

“That’s the fatal flaw with this [law],” Zimmerman told Wired last year. “Once the FBI is able to do this snooping, to find out who Americans are communicating with and associating with, there’s no remedy that makes them whole after the fact. So there needs to be some process in place so the court has the ability ahead of time to step in on behalf of Americans

Excerpts, Kim Zetter, Federal Judge Finds National Security Letters: Unconstitutional, Bans Them, Wired,  Mar. 15, 2013

The War on Dams

An Amazonian community has threatened to “go to war” with the Brazilian government after what they say is a military incursion into their land by dam builders.  The Munduruku indigenous group in Para state say they have been betrayed by the authorities, who are pushing ahead with plans to build a cascade of hydropower plants on the Tapajós river without their permission.  Public prosecutors, human rights groups, environmental organisations and Christian missionaries have condemned what they call the government’s strong-arm tactics.

According to witnesses in the area, helicopters, soldiers and armed police have been involved in Operation Tapajós, which aims to conduct an environmental impact assessment needed for the proposed construction of the 6,133MW São Luiz do Tapajós dam.  The facility, to be built by the Norte Energia consortium, is the biggest of two planned dams on the Tapajós, the fifth-largest river in the Amazon basin. The government’s 10-year plan includes the construction of four larger hydroelectric plants on its tributary, the Jamanxim.

Under Brazilian law, major infrastructure projects require prior consultation with indigenous communities. Federal prosecutors say this has not happened and urge the courts to block the scheme which, they fear, could lead to bloodshed.  “The Munduruku have already stated on several occasions that they do not support studies for hydroelectric plants on their land unless there is full prior consultation,” the prosecutors noted in a statement.

However, a court ruling last week gave the go-ahead for the survey. Government officials say that neither researchers nor logistical and support teams will enter indigenous villages. The closest they will get is about 30 miles from the nearest village, Sawré Maybu.  The ministry of mines and energy noted on its website that 80 researchers, including biologists and foresters, would undertake a study of flora and fauna. The army escort was made possible by President Dilma Rousseff, who decreed this year that military personnel could be used for survey operations. Officials say the security is for the safety of the scientists and the local population.

Missionaries said the presence of armed troops near Sawré Maybu village, Itaituba, was intimidating, degrading and an unacceptable violation of the rights of the residents.  “In this operation, the federal government has been threatening the lives of the people,” the Indigenous Missionary Council said. “It is unacceptable and illegitimate for the government to impose dialogue at the tip of a bayonet.”

The group added that Munduruku leaders ended a phone call with representatives of the president with a declaration of war. They have also issued open letters calling for an end to the military operation. “We are not bandits. We feel betrayed, humiliated and disrespected by all this,” a letter states.  One of the community’s leaders, Valdenir Munduruku, has warned that locals will take action if the government does not withdraw its taskforce by 10 April, when the two sides are set to talk. He has called for support from other indigenous groups, such as the Xingu, facing similar threats from hydroelectric dams.

Environmental groups have expressed concern. The 1,200-mile waterway is home to more than 300 fish species and provides sustenance to some of the most biodiverse forest habitats on Earth. Ten indigenous groups inhabit the basin, along with several tribes in voluntary isolation.  With similar conflicts over other proposed dams in the Amazon, such as those at Belo Monte, Teles Pires, Santo Antônio and Jirau, some compare the use of force to the last great expansion of hydropower during the military dictatorship. “The Brazilian government is making political decisions about the dams before the environmental impact assessment is done,” said Brent Millikan of the International Rivers environmental group.  “The recent military operations illustrate that the federal government is willing to disregard existing legal instruments intended to foster dialogue between government and civil society.”

Jonathan Watts, Amazon tribe threatens to declare war amid row over Brazilian dam project, Guardian, Aprl. 3, 2013

 

Gated Rainforests: the militarization of conservation

The  Epulu  village  in the Democratic Republic of Congo is situated inside a nature reserve in the Ituri rainforest, an area covering 5,000 square miles that is supposed to be off limits to hunters and gold prospectors. A militia, led by a former elephant poacher called Paul Sadala, has terrorised communities inside the reserve since 2012, employing methods brutal even by the grisly standards of this part of the world.

“The attacks were absolutely terrifying,” said Justin Oganda, a representative of the residents of Epulu who remain displaced in Mambasa, about 50 miles away. By the end of that day in June, the militiamen had murdered, raped, burned people alive and even eaten the flesh and heart of one of their victims. “To have killed so many people, to burn them alive, the cannibalism … Mentally they cannot be normal,” Oganda added.

As ever with Congo, it is not just a simple tale of victims and villains. Sadala, who goes by the nom de guerre Morgan, and his “Mai Mai Morgan” gunmen are thought to have powerful supporters in the security forces who enable their lucrative illegal trade in ivory and smuggled gold. Some local people with an eye on the gold in the ground beneath their feet tacitly support Morgan, who improbably also likes to be called Chuck Norris. “There is complicity between [Morgan] and certain elements within the army,” said Jefferson Abdallah Pene Mbaka, the MP for Mambasa. “With the support of certain army authorities [Mai Mai Morgan] have increased their poaching activities. The sale of ivory is organised by these figures in the army.” Many people in the region believe soldiers have orders not to arrest Morgan.

Morgan’s principal targets are those who operate and police the Unesco-recognised world heritage site known as the Okapi wildlife reserve, or by its French acronym, RFO. The laws of the reserve forbid the hunting of endangered species, especially elephants and okapi, and the exploitation of its gold reserves….The suspicion is that at least some of Morgan’s booty winds up 280 miles south-west of Epulu, in the hands of the Congolese army. At the end of 2012 the United Nations group of experts on Congo issued a report that accused Congolese general Jean Claude Kifwa in the provincial capital, Kisangani, of giving “arms, ammunition, uniforms and communication equipment to Mai Mai Morgan in exchange for ivory”….

Despite the brutality of the attacks, many reserve dwellers express sympathy for Morgan, with some even confessing to outright support for him. “I am behind Morgan,” said an 18-year-old in a small village not far from Epulu who refused to give his name. “Because Morgan is here the rangers cannot patrol and we are free to dig for gold. But I wouldn’t support him if he came here and burned our homes.”  Most people, however, have a more nuanced position, saying that although revolted by his methods, they support his stated desire to see the size of the reserve reduced and more rights given to locals to hunt and dig.  “The forest is where we find what we need to survive,” said Matope Mapilanga, the leader of a Pygmy community on the edge of the reserve. “[The park authorities] have cut our land, there is now a part we cannot access. It has worsened in the last few years, since the RFO got bigger. We would prefer that the people of the RFO weren’t in our forest. We feel like the big non-governmental organisations and the rangers have privileged the animals over the people.”

The conservationists remain unconvinced, though. “The people who say they support Morgan are just those people who want to dig gold and exploit timber,” said Robert Mwinyihali, the project leader for Wildlife Conservation Society’s (WCS) work in the Ituri rainforest. WCS has given financial backing to the park rangers and the Congolese Wildlife Authority’s work in the reserve. “There are laws in Congo about the exploitation of resources,” said Mwinyihali. “These people can either respect those laws, or they can ignore them and commit criminal acts.”  WCS and GIC’s support for the park rangers has led to accusations that they are partly responsible for the militarisation of the conflict. However, Mwinyihali said the biggest problem was the absence of effective intervention by the Congolese state, which meant NGOs and the park rangers had had to fulfil roles that should be the government’s responsibility: for example, bringing in armed guards to track Morgan. Bernard Iyomi Iyatshi, the director of park rangers, complained about a lack of government funds for his anti-poaching operations.

Mwinyihali also accused the Congolese government of doing little to reconcile the park authorities and local communities. As mutual resentment and misunderstanding grows, Morgan and other armed groups are able to exploit the toxic atmosphere and continue their poaching, digging and savage attacks.  “There are no job opportunities created by government investment here,” said Mwinyihali. “This has led to this crisis, where people have no option but to want to dig for gold. This leads to the conflict with the park authorities, and then it is only a small step to people taking up arms and joining militias.”  Despite being a member of the ruling party, Mbaka is an outspoken critic of the government’s policy, or lack of it, in the region. “Swaths of the park are inaccessible, there’s just no infrastructure,” he said. “It’s an absolute scandal, there’s potentially so much wealth here. It also means it is difficult to track and stop men like Morgan.”  Even if Morgan is caught, people fear that his powerful backers in the army will find another militia to continue poaching and stealing gold…

About 70% per cent of the ivory from slaughtered African elephants goes to China, another of the countries warned by Cites. The price of ivory has rocketed. Cites reported that the price more than doubled between 2004 and 2010, from about $300 to $700 (£198 to £462) a kilogramme. An Associated Press investigation in 2010 claimed ivory was being sold in China for $1,800 a kilogramme.

Excerpt, Pete Jones, Gold and poaching bring murder and misery to Congolese wildlife reserve, Guardian, Mar. 31, 2013

SeaWeb Live: drones, mules & gliders

UUVs [unmanned underwater vehicles]  will probably play a bigger role as roving wireless nodes that increase the reach of underwater networks. The latest “glider” UUVs consume very little battery power…. Already, gliders serving as “mules” are descending to sensors in deep water where they acoustically collect information. They then ascend to the surface and send the data via radio, says David Kelly, chief executive of Bluefin Robotics, which provides UUVs to half a dozen navies.

The US Navy has ordered several gliders to form underwater mobile networks. With no engine noise, a stealthy “swarm” of gliders could monitor submarines and ships entering a strait, for example, surfacing to transmit their findings. Floating gateway nodes, dropped from the air, allow messages to be sent to submerged devices via low-frequency acoustic signals. This scheme, known as Deep Siren and developed by Raytheon, an American defence contractor, has been tested by the British and American navies.

“Underwater networking will put an end to the ‘data starvation’ experienced by submarines”.  The combination of acoustic signalling and UUVs, which can deliver data physically, will put an end to the “data starvation” experienced by submarines, as America’s submarine command described it in a report last year. Often incommunicado, subs have been condemned to “lone wolf” roles, says Xavier Itard, head of submarine products at DCNS, a French shipbuilder. His firm is developing a funnel-shaped torpedo-tube opening that would make it easier for a UUV to dock with a submarine. Being able to send messages quickly via acoustic networks would enable submarines to take on more tactical roles—inserting special forces when needed to a nearby battlefield, say, or supporting ground operations by launching cruise missiles from the depths.

The Soviet-built ELF radio system remains a “backbone” of Russia’s submarine communications, according to a Norwegian expert. But in a clear vote of confidence in newer technologies, America shut down its own system in 2004. Thanks to steady progress in undersea networks, what was once a technological marvel was, a US Navy statement explained, “no longer necessary”. Whether via sound waves, laser pulses, optical fibres or undersea drones, there are now better ways to deliver data underwater.

Excerpt , Underwater networking: Captain Nemo goes online, Economist Technology Quarterly, Mar. 9, 2013, at 7