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