Thursday, September 26, 2013

Tea Party - Progressives Ally to Stop NSA

Rand Paul speaks at the unveiling of the NSA reform package

Rand Paul (third right) speaks at the unveiling of the NSA reform package on Capitol Hill. Photograph: Mark Wilson/Getty Images

Four senators at the vanguard of bipartisan efforts to rein in US government spying programs announced the most comprehensive package of surveillance reforms so far presented on Capitol Hill on Wednesday.

The draft bill represented the first sign that key Republican and Democratic figures in the Senate are beginning to coalesce around a raft of proposals to roll back the powers of the National Security Agency in the wake of top-secret disclosures made by whistleblower Edward Snowden.

"The disclosures over the last 100 days have caused a sea change in the way the public views the surveillance system," said Democratic senator Ron Wyden, unveiling the bill at a press conference alongside Republican Rand Paul.

"We are introducing legislation that is the most comprehensive bipartisan intelligence reform proposal since the disclosures of last June," he said.

Wyden said the bill would set a high bar for "not cosmetic" intelligence reform, on the eve of a series of congressional hearings into the NSA's surveillance powers that will begin on Thursday.
The two other senators supporting the bill were Democrats Mark Udall, a long-time ally of Wyden, and Richard Blumenthal, who has been at the forefront of efforts to reform the secretive court process that grants surveillance warrants.

Their bill, the Intelligence Oversight and Surveillance Reform Act, merges competing legislative proposals announced by the senators before the summer recess, and cherry-picks from ideas contained in about twelve other draft bills.

It would prohibit the NSA's bulk collection phone records of Americans under section 215 of the Patriot Act, the most controversial aspect of US surveillance revealed by documents supplied by Snowden to the Guardian.

The bill would also prevent a similar data trawl of internet communication records, which was stopped in 2011, and definitively close a so-called "backdoor" that potentially enables the NSA to intercept the internet communications of Americans swept up in a program protected by Section 702 of the of the Fisa Amendments Act.
There is limited, if any, support in Congress for limiting the NSA's ability of monitor or gather evidence on foreigners.

The bill fuses with a proposal originally made by senator Blumenthal, which aims to reform the foreign intelligence surveillance (Fisa) court, making the quasi-judicial process more transparent and accountable.

If made law, the act would require a "constitutional advocate" to be introduced into the opaque court process, so that the government could be challenged on privacy grounds in significant or precedent-setting cases. It would insert an adversarial dimension to a court process that is currently one-sided in favour of the government.

It also incorporates aspects of more than a dozen legislative efforts that surfaced in the wake of disclosures by Snowden, such as allowing technology companies to disclose how many court orders they receive for their users' data, and the strengthening a privacy watchdog.
President Obama pledged last month to work with Congress to "pursue appropriate reforms" to the government's surveillance programs. However, analysts are predicting the White House to pursue superficial reforms that might bring more transparency to the NSA and the Fisa court, but would stop short of clipping the wings of the intelligence community.

On Tuesday, the influential Senate judiciary committee chairman Patrick Leahy, who is bringing a similar bill to the one unveiled by Wyden, said the administration had failed to make the case that collection of phone records was "an effective counter-terrorism tool, especially in light of the intrusion on Americans' privacy right". Leahy said he was also considering reforms to the Fisa court. On Thursday, Feinstein's committee will hold a major congressional hearing into the various reforms under consideration. James Clapper, the director of national intelligence, and General Keith Alexander, the director of the NSA, are expected to argue hard against any diminution in their powers of surveillance. Earlier on Wednesday, Alexander criticised what he said was "sensationalised hype" and "media leaks" based on disclosures by Snowden, who has received temporary asylum in Russia. Alexander gave a specific defense of the mass collection of phone records, which looks most under threat in Congress, saying it enables the NSA to "join the dots" in major terrorist cases.

The appetite in Washington for reform of surveillance programs was made apparent in July, when a House of Representatives proposal to effectively end the NSA's bulk collection of phone records of millions of Americans was defeated by just 12 votes.
The amendment, brought by Republican Justin Amash and Democrat John Conyers, was strongly opposed by leaders of the two parties, the White House, and the intelligence establishment.

The fact it was only narrowly defeated revealed the depth of anger in some quarters of Capitol Hill over the perceived excesses of the NSA – and provided a glimpse of the potential strength of a House alliance between libertarian Republicans and left-leaning Democrats.

Wednesday's press conference – featuring leftwingers Wyden, Udall and Blumenthal alongside Paul, one of the most prominent libertarians in the Republican party – suggested those dynamics could be repeated in the Senate.
Wyden said the House vote in July was "a huge wake-up call", revealing the depth of opposition to government surveillance programs in the wake of Snowden's disclosures. Blumenthal said their bill represented a "coming together of a very diverse ideological elements of our respective parties".

Tuesday, September 24, 2013

Obama Buddies with Chase and Goldman CEOs

Obama’s Friends in Low Places

Posted on Sep 24, 2013

AP/Evan Vucci

JPMorgan Chase CEO Jamie Dimon, left, and Goldman Sachs CEO Lloyd Blankfein leave the White House in 2009 after a meeting between chief executives and President Obama.

By Robert Scheer
That Barack Obama is such a kidder. No matter how awkward the moment, he’s got just the right quip to purchase some wiggle room. Remember when his old Chicago banking buddy Jamie Dimon, the CEO of JPMorgan Chase, first ran into that bit of trouble over his bank’s “London Whale” derivative scam? That scheme has already lost $6 billion with close to $1 billion more piled on by the SEC in fines last week after JPMorgan admitted it broke the law.
Well of course, being Obama, when the scandal first broke last year, the president picked a women’s daytime talk show, ABC’s “The View,” to deal with the scams of his leading Wall Street backer.

“JPMorgan is one of the best-managed banks there is,” he told the “View” audience. “Jamie Dimon, the head of it, is one of the smartest bankers we got, and they still lost $2 billion and counting.”

Yes, counting; that $2 billion is now likely to end up around $16 billion given the future legal fees and possible payouts allotted to countering the myriad lawsuits connected with this admission of illegal activity. That’s aside from the mortgage fraud, Libor rate rigging and energy manipulation cases still confronting the beleaguered bank. Thursday, on the same day that Dimon’s bank got slapped with the SEC fine, federal regulators revealed that JPMorgan had agreed to pay $389 million in penalties and refunds to compensate for a credit card identity theft protection scam after $309 million already paid out in that case.

It should be remembered that this same Dimon, who appeared before a Senate committee wearing Presidential cufflinks, once worked with Sanford Weill in engineering the reversal of the Glass-Steagall law to make Citigroup, a previously illegal merger of investment and commercial banks, possible. But despite his record as a leader in the radical deregulation of banking that caused all of the trouble, Obama turned to Dimon for direction on fixing the economy.

If you still require to be disabused of Obama’s pretend populism, consider his decision to select William M. Daley, JPMorgan’s representative in Washington, to be his White House chief of staff. It gave Dimon the key White House connection to accompany the passkey he already had at Treasury with his pal Timothy Geithner as Secretary (of the Treasury).

It was a real cozy arrangement; Dimon was still a governor of the New York Federal Reserve Bank, where he had served during Geithner’s presidency overseeing the banking meltdown. Geithner had been instrumental in arranging Fed financing for JPMorgan’s acquisition of troubled Bear Stearns through a $55 billion loan and later an additional $25 billion in TARP funds.

Once appointed Treasury secretary, Geithner made himself very accessible to Dimon. As an Associated Press investigation reported, Dimon had numerous personal meetings and phone calls with Geithner while the White House was calibrating its response to the Wall Street crisis.
Why are we not surprised that Obama has done nothing to break up the too-big-to-fail banks, the biggest now being Dimon’s? Don’t be fooled by the occasional fines; the banks have used the interest-free money to grow ever larger and more unaccountable in their behavior.

Even the recent SEC settlement, while mentioning the despicable behavior of JPMorgan’s chief executive, fails to utter Dimon’s name, and as Sen. Carl Levin, D-Mich., who did much to unravel this scam, noted, “the whole issue of misinforming investors and the public is conspicuously absent from the SEC findings and settlement.”

After the SEC condemnation of JPMorgan’s “egregious breakdowns in controls” and conclusion that “senior management broke a cardinal rule of corporate management” to honestly inform the board of directors, top senior manager Dimon made all the right noises. JPMorgan announced that $4 billion and a staff of 5,000 employees would be devoted to compliance with the law.

This was just the sort of commitment Dimon made in 2006 when he hired Stephen M. Cutler, who had been head of the SEC Division of Enforcement, to be JPMorgan’s general counsel. Once a committed regulator who urged corporations “to create a culture of compliance,” Cutler clearly drank the Kool-Aid at JPMorgan, for he was in charge of legal and compliance activities worldwide at the time of the London Whale fiasco. So much for trusting corporate compliance.

As Donald Langevoort, an expert on compliance issues at Georgetown University School of Law, told The New York Times on Friday, “JPMorgan is by no means unique. None of these big banks really want compliance people causing traders and investment bankers to second-guess themselves too much because that gets in the way of making money. No one will say this, but it’s more effective to run the risk of noncompliance and pay a few fines, which is just a cost of doing business.”

Exactly the reason that too-big-to-fail banks can’t be trusted to do the right thing and why Obama shouldn’t have been guided by Dimon in the first place.

Snowden: Hero Without a Country

Edward Snowden and Chelsea Manning, the New Dissidents?

The United States is no Soviet Union—and yet it has set up machinery that satisfies certain tendencies that are in the genetic code of totalitarianism.

Jonathan Schell

Edward Snowden. (Courtesy of guardiannews.com)

While the whistleblower Edward Snowden, who revealed the National Security Agency’s mass spying, was still stuck in Moscow’s Sheremetyevo airport, he received support from an unexpected quarter. Four leaders of Solidarity, the workers’ movement in Poland that upended that country’s totalitarian Communist regime in the 1980s, issued an open letter demanding that their government give Snowden sanctuary from the global manhunt being conducted by the United States.

The signers were Barbara Labuda, Józef Pinior, Zbigniew Bujak and Władysław Frasyniuk, all of whom had the experience of being stalked by their government when they went underground during the period of martial law that began in 1981. “Edward Snowden did not kill anyone, did not kidnap or attack or maim anyone,” they wrote. “And yet, he is hunted and cornered like a terrorist. Why? Because he revealed an inconvenient truth about the activities of the authorities of his country. He revealed to the world that the American government systematically controls the behavior of millions of his [fellow] citizens through mass registering and listening to their telephone, Skype, Facebook, email and chat activities. Snowden’s revelations uncovered an ugly face of the American administration.”

And they voiced their expectation that the European Parliament “will recognize the value of his act and will extend over him the protections of European democratic institutions, which were created in order to defend and enlarge civic freedoms and human rights.”

Around the same time, in the West, a word familiar from the not so distant past—“dissident”—began to be attached to Snowden and other whistleblowers, like Julian Assange of WikiLeaks and Chelsea Manning, who soon received her ruthless sentence of thirty-five years for disclosing classified documents. In The New York Times, for instance, John Broder and Scott Shane wrote: “In 2006, when Edward J. Snowden joined the thousands of computer virtuosos going to work for America’s spy agencies, there were no recent examples of insiders going public as dissidents.” The use of the word is striking, because it was last widely employed to name those who, in the face of seemingly hopeless odds, had resisted the totalitarian rule of the Soviet Union and its client governments—in other words, people like the four Solidarity leaders who signed the letter in support of Snowden. Used this way, the word carried the implication that the US government might be that sort of oppressive power, or is perhaps on its way to becoming one.

As support for Snowden grew globally and the Obama administration widened its campaign to capture him, that picture of Snowden’s situation became so broadly accepted that the White House felt impelled to challenge it explicitly. Obama’s press secretary, Jay Carney, asserted, “He is not a human rights activist. He is not a dissident.”
Or to translate: “We are no Soviet Union.”

And certainly, the four Poles, of all people, are as fully aware as any sensible person of the abyss of difference that separates the Obama administration from, say, the regime of Joseph Stalin, slayer of tens of millions of his own people. And yet it is chillingly true at the same time that the US government has gone further than any previous government—not excluding Stalin’s—in setting up machinery that satisfies certain tendencies that are in the genetic code of totalitarianism.

One is the ambition to invade personal privacy without check or possibility of individual protection. This was impossible in the era of mere phone wiretapping, before the recent explosion of electronic communications—before the cellphones that disclose the whereabouts of their owners, the personal computers with their masses of personal data and easily penetrated defenses, the e-mails that flow through readily tapped cables and servers, the biometrics, the street-corner surveillance cameras. But now, to borrow the name of an intelligence program from the Bush years, “Total Information Awareness” is technologically within reach. The Bush and Obama administrations have taken giant strides in this direction. That China and Russia—and Britain, and many other countries—have done the same is hardly comforting to the humble individual under the eye of the universal spying apparatus.

A second totalitarian tendency has been the ambition to control the entire globe—a goal built into Fascist as well as Communist ideologies of the early twentieth century. In Hannah Arendt’s words, “Evidence that totalitarian governments aspire to conquer the globe and bring all countries on earth under their domination can be found repeatedly in Nazi and Bolshevik literature.” Neither achieved it, or even came close. But now, in the limited arena of information, a sort of shadow or rudiment of this ambition is near realization by the “sole superpower,” the United States. Much attention has been paid to Americans’ loss of privacy rights, but relatively overlooked in the debate over the government’s surveillance activities (at least in the United States) has been that all foreign communications—including those occurring in the lands of close allies, such as Germany—are fair game and are being swept into the US data banks.

The extent of the US global reach over information was mirrored in Snowden’s fate. Astonishingly, almost no fully democratic country would have him. (The conspicuous exception was Bolivia, whose President suffered the indignity of a forced diversion and landing of his plane when he was suspected of carrying Snowden to safety.) Almost all others, including Poland, bowed to US pressure, actual or potential, to refuse Snowden protection. The Polish letter writers were scandalized by this spectacle. “The fact that only dictatorial governments agreed to give him shelter shames the democratic states,” they wrote. “Our democracies discredit themselves with their indifference and cowardice in this matter.”

What happened to Snowden in Moscow diagrammed the new global reality. He wanted to leave Russia, but the State Department, in an act of highly dubious legality, stripped him of his passport, leaving him—for purposes of travel, at least—stateless. Suddenly, he was welcome nowhere in the great wide world, which shrank down to a single point: the transit lounge at Sheremetyevo. Then, having by its own action trapped him in Russia, the administration mocked and reviled him for remaining in an authoritarian country. Only in unfree countries was Edward Snowden welcome. What we are pleased to call the “free world” had become a giant prison for a hero of freedom.

Open letter by leaders of Poland's solidarity movement in defense of Edward Snowden.

by Jonathan Schell

September 4, 2013 |

Sunday, September 22, 2013

Too-Big-to-Jail Banks Continue Criminal Conduct

5 Years After the Financial Crisis, The Big Banks Are Still Committing Massive Crimes

Submitted by George Washington on 09/20/2013 12:12 -0400

Preface: Not all banks are criminal enterprises. The wrongdoing of a particular bank cannot be attributed to other banks without proof. But – as documented below – many of the biggest banks have engaged in unimaginably bad behavior.

You Won’t Believe What They’ve Done …

Here are just some of the improprieties by big banks over the last century (you’ll see that many shenanigans are continuing today):

Laundering money for terrorists (the HSBC employee who blew the whistle on the banks’ money laundering for terrorists and drug cartels says that the giant bank is still laundering money, saying: “The public needs to know that money is still being funneled through HSBC to directly buy guns and bullets to kill our soldiers …. Banks financing … terrorists affects every single American.” He also said: “It is disgusting that our banks are STILL financing terror on 9/11 2013“. And see this)

Funding the Nazis

Financing illegal arms deals, and funding the manufacture of cluster bombs (and see this and this) and other arms which are banned in most of the world

Launching a coup against the President of the United States

Handling money for rogue military operations

Laundering money for drug cartels. See this, this, this, this and this (indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis). A whistleblower said: “America is losing the drug war because our banks are [still] financing the cartels“, and “Banks financing drug cartels … affects every single American“. And see this.)

Engaging in mafia-style big-rigging fraud against local governments. See this, this and this

Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here

Manipulating aluminum and copper prices

Manipulating gold prices … on a daily basis

Charging “storage fees” to store gold bullion … without even buying or storing any gold . And raiding allocated gold accounts

Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)

Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car

Cheating homeowners by gaming laws meant to protect people from unfair foreclosure

Committing massive fraud in an $800 trillion dollar market which effects everything from mortgages, student loans, small business loans and city financing

Manipulating the hundred trillion dollar derivatives market

Engaging in insider trading of the most important financial information

Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this

Engaging in unlawful “frontrunning” to manipulate markets. See this, this, this, this, this and this

Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this

Manipulating corporate bonds through derivatives schemes

Otherwise manipulating markets. And see this

Participating in various Ponzi schemes. See this, this and this

Charging veterans unlawful mortgage fees

Helping the richest to illegally hide assets

Cooking their books (and see this)

Bribing and bullying ratings agencies to inflate ratings on their risky investments

Violently cracking down on peaceful protesters

The executives of the big banks invariably pretend that the hanky-panky was only committed by a couple of low-level rogue employees. But studies show that most of the fraud is committed by management.
Indeed, one of the world’s top fraud experts – professor of law and economics, and former senior S&L regulator Bill Black – says that most financial fraud is “control fraud”, where the people who own the banks are the ones who implement systemic fraud. See this, this and this.
Even the bank with the reputation as being the “best managed bank” in the U.S., JP Morgan, has engaged in massive fraud. For example, the Senate’s Permanent Subcommittee on Investigations released a report today quoting an examiner at the Office of Comptroller of the Currency – JPMorgan’s regulator – saying he felt the bank had “lied to” and “deceived” the agency over the question of whether the bank had mismarked its books to hide the extent of losses. And Joshua Rosner – noted bond analyst, and Managing Director at independent research consultancy Graham Fisher & Co – notes that JP Morgan had many similar anti money laundering laws violations as HSBC, failed to segregate accounts a la MF Global, and paid almost 12% of its 2009-12 net income on regulatory and legal settlements.
But at least the big banks do good things for society, like loaning money to Main Street, right?
Actually:

The big banks no longer do very much traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits. Instead, they are mainly engaged in financial speculation and derivatives. (and see this)

The big banks have slashed lending since they were bailed out by taxpayers … while smaller banks have increased lending. See this, this and this

A huge portion of the banks’ profits comes from taxpayer bailouts. For example, 77% of JP Morgan’s net income comes from taxpayer subsidies

The big banks are looting, killing the economy … and waging war on the people of the world

And our democracy and republican form of government as well

Indeed, top experts say that fraud caused the Great Depression and the 2008 crisis, and that failing to rein in fraud is dooming our economy.
We can almost understand why Thomas Jefferson warned:

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies ….

John Adams said:

Banks have done more injury to religion, morality, tranquillity, prosperity, and even wealth of the nation than they have done or ever will do good.

And Lord Acton argued:

The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.

No wonder a stunning list of prominent economists, financial experts and bankers say we need to break up the big banks.

E.G. U.S. Senator Sherrod Brown of Ohio.

Friday, September 20, 2013

NSA Spies for Big Oil in Brazil

NSA Spied on Brazil Oil Company, Petrobras—What WikiLeaks Cables Reveal About Possible Motivation
By: Kevin Gosztola

Brazil’s state-controlled oil company, Petrobras

A Brazilian television program has revealed that theNational Security Agency in the United States spied on the internal and private computer networks of the oil company, Petrobras, which is partly state-owned.

Globo TV’s “Fantastico” program reported top secret documents from former NSA contractor and whistleblower Edward Snowden, which were provided to program by Guardian journalist Glenn Greenwald, include a May 2012 presentation used to “train new agents step-by-step on how to access and spy upon private computer networks—the internal networks of companies, governments, financial institutions—networks designed to precisely to protect information.”

“The name of Petrobras—Brazil’s largest company—appears right at the beginning, under the title: ‘MANY TARGETS USE PRIVATE NETWORKS,’ Globo noted.

Several slides feature the name Petrobras, as the presentation explains how target companies can be monitored.

Globo additionally reported, “Individual folders are created for each target – and contain all the intercepted communications and IP addresses – the identification of each computer on the network – which should be immune to these attacks.”

An individual with a Ph.D in “information security,” Paulo Pagliusi, who analyzed the documents for “Fantastico,” concluded the documents were evidence of “systematic spying” and it “had been going on for a while.”

“You don’t obtain all of this in a single run. From what I see, this is a very consistent system that yields powerful results; it’s a very efficient form of spying,” he told the television program.

This expressly undermines a previous claim by the NSA that it does not spy for “economic purposes.” It disproves what an NSA spokesman told the Washington Post on August 30, which is that the agency, a part of the Defense Department, does not “engage in economic espionage in any domain, including cyber,” even though the department engages in computer network exploitation.

The motivation for being interested in the operations of Petrobras is, for the most part, clear. The United States Energy Information Agency (EIA) highlighted in a brief on the country dated February 28, 2012, how Brazil recently discovered “large offshore, pre-salt oil deposits” that “could transform Brazil into one of the largest oil producers in the world.”

It described “state-controlled Petrobras” as the “dominant participant in Brazil’s oil sector, holding important positions in up-, mid-, and downstream activities.” Petrobras held a “monopoly on oil-related activities in country until 1997, when the government opened the sector to competition,” which included Royal Dutch Shell, as the first foreign crude oil producer. Chevron, Repsol, BP, Anadarko, El Paso, Galp Energia, Repsol, Statoil, BG Group, Sinopec, ONGC and TNK-BO became foreign producers of crude oil as well.

Brazilian officials have suggested that NSA spying must be motivated by the US government’s interest in this massive discovery of oil and natural gas. Minister of Communications for Brazilian President Dilma Rousseff, Paulo Bernardo, stated,

“The spying is of a commercial, industrial character. It is the interest [of the US]

to know about issues of the pre-salt [offshore oil finds] and other issues of

economic and commercial weight.”

Prior to this story, Rousseff suggested in a meeting with ministers the “pre-salt layer” was the interest that had driven the NSA to spy on the company.

In fact, there is a major auction scheduled in October around the time that Rousseff is currently scheduled to visit Washington, DC. US oil companies plan to participate. If any of these oil companies received tips related to any of the intelligence collected on the reserves that will be up for auction, that would provide an edge to that company:

Former Petrobras Director Roberto Villa considers this the greatest action in the history of oil exploration. “It’s a very peculiar auction. The auction of an area where we already know there’s oil, there’s no risk”, he says. What no one else should know, Villa says, is which are the richest lots. “Petrobras knows. And I hope only they know.” He considers that such information, if stolen, could give someone an advantage. “Someone would have an edge. If this information was leaked and someone else has obtained it, he would be in a privileged position at the auction. He’ll know where to invest and where not to. It’s a handy little secret.”

In terms of pre-salt oil, EIA outlined:

A consortium of Petrobras, BG Group, and Petrogal discovered the Tupi field in 2007, which contains substantial reserves in a pre-salt zone 18,000 feet below the ocean surface under a thick layer of salt. Following Tupi, numerous additional pre-salt finds were announced in the Santos Basin, such as Iracema, Carioca, Iara, Libra, Franco and Guara. Additional pre-salt discoveries were also announced in the Campos and Espirito Santo Basins. Estimates for the total pre-salt resources vary. Some analysts place total extent of pre-salt recoverable oil and natural gas reserves at more than 50 billion barrels of oil equivalent (boe). [emphasis added]

Significantly, Petrobras has not only been of interest to the NSA and the EIA but the US State Department too. Diplomatic cables published by WikiLeaks show a focus on the operations of Petrobras and an overt willingness to fight for the interests of US oil companies while conducting meetings with Brazilian officials.

Though before the discovery of the Tupi field in 2007, an unclassified cable sent on June 13, 2006, containing “business-confidential information,” shows US firms “involved in upstream petroleum sector operations” complained about “Brazil’s inadequate climate for foreign investment.” Representatives from Exxon-Mobil,

Chevron and El Paso indicated “Petrobras’ dominance meant that independent players, even well-funded one, needed to tread lightly.

“While doing business in Brazil was certainly easier than operating in Bolivia, we were told, in many ways the majors found investment conditions worse than those in Venezuela,” according to the cable.

“Chevron’s Tim Miller noted that even though his company often partners with Petrobras on the E&P side, it sometimes receives the thumb-screw treatment from the company’s gas division.” And, “In one off-shore field where Chevron had found gas reserves, Petrobras, which owned the only pipeline to the shore, had offered the company a mere 70 cents per million BTU for the gas, knowing full well that Chevron’s only alternative was the risky gambit of re-injecting gas into an underground reservoir.”

The animosity in the industry toward Petrobras is palpable. Exxon-Mobil’s Brazil President John Knapp, while complementing Petrobras, called it an “800-pound gorilla” and acknowledged its “state-run status gave it access to key information about specific blocks which ensured that it always was able to purchase the most promising parcels.”

A January 28, 2008, cable on an “oil roundtable discussion with US oil companies” and US Ambassador Clifford Sobel, including the “CEOs of Chevron, Exxon Mobil, Devon Energy, Anadarko and Hess Corporation” provides further evidence of the extent of the US government interest in helping oil companies overcome the dominance of Petrobras.

“Expressing the view of all present, John Knapp, President of Exxon Mobil, confirmed that Exxon had a great deal of interest in Brazil because of perceived substantial undiscovered potential beyond even the Tupi field that Petrobras recently discovered,” according to the “sensitive but unclassified” cable. Knapp “expressed concern about the recent unstable investment environment caused by Rio State tax changes, oil blocks being removed in the last two auctions, and the Government of Brazil’s (GOB) apparent willingness to change the oil concession contracts.”

Devon Energy President Murilo Marroquim suggested at that “Petrobras had lied about the easy prospects of finding oil in under-salt areas due to the Tupi discovery. He believed Petrobras influenced the GOB to remove the blocks from the 9th oil auction to avoid stiff competition with other bidders. Devon asserted that Petrobras did not have sufficient drilling equipment so had an interest in removing those blocks to allow more preparation time for it to bid for those blocks in future auctions.”

When 51-year-old Brazilian entrepreneur Eike Batista launched oil company OGX to challenge Petrobras share of the market in 2007, a “sensitive but unclassified” cable sent on June 27, 2008, highlighted this development. It noted that OGX hired former Petrobras President Francisco Gros and had “lured more key executives away from their positions at Petrobras in exchange for equity in Batista’s companies, making them instant millionaires.”

Also, “In October 2007, just one month before Brazil’s ‘Ninth Bid Round’ lease sale for new offshore exploration blocks, OGX delivered an especially damaging blow to Petrobras’ interests. Petrobras’ Manager for Exploration and Production Paulo Mendonca and Contracts Manager Luis Reis defected to OGX, bringing with them intimate knowledge of Petrobras’ bidding strategy in the upcoming auction such as which blocks Petrobras wanted and how much it was willing to bid.”

While it is unclear whether the State Department was as delighted as oil companies to see someone taking on a “monopoly,” the diplomat who wrote the cable commented:

OGX’s dramatic entry into the Brazilian oil industry is significant. With the financial backing of Batista, OGX has built a formidable team. U.S. oil company contacts have privately shared how they are reveling in Petrobras’ frustration with having to deal with real competition from a domestic company for the first time. Worth watching is Petrobras’ further reaction as OGX gears up to drill wells. Though OGX can hire top people and win exploration blocks with money alone, it will need partners to drill for and produce oil. We are hearing that Petrobras is strongly discouraging (i.e. threatening to cut them off from Petrobras projects) its own partners from working with OGX. It remains to be seen if OGX can successfully convince potential partners to stand up to Petrobras.

In August 2009, according to another diplomatic cable, “petroleum actors and insiders in Rio de Janeiro” derided “pre-salt reform” proposals as “pre-election politicking” by the administration of Luiz Inacio Lula da Silva. The proposal to have Petrobras be the “sole operator” of “unlicensed blocks” of reserves led Exxon Mobile’s External Relations Director Carla Lacerda, to suggest this “constituted a reversion to Brazil’s former monopoly system.” It could have an adverse effect on “US equipment and service supply to Brazil.”

The Brazilian National Congress eventually was successful in passing reforms, which maximized Petrobras’ ability to make profits off the discovered pre-salt fields.

On August 2, 2013, Rousseff signed a decree creating Pre-Sal Petroleo, “a new state-owned company to manage contracts for large oil and natural gas fields in the offshore pre-salt region.”

While the cables and documents from Snowden contain no specific proof that oil company executives were given tips on the status off offshore oil exploration, they do indicate a questionable and possibly unethical interest in helping oil companies succeed against Petrobras. And, as PreSalt.com, a website specializing in coverage of oil and gas in pre-salt areas, reacted, “Petrobras holds unique knowledge in offshore oil exploration in high depths and very high pressures and Brazil holds the largest world reserves known in the pre-salt. If the NSA invaded and violated the servers of Petrobras, [it] was not to find Bin Laden [but] probably was to capture information about technologies, research and knowledge that Petrobras holds.”

Furthermore, “These technologies and information about exploration and production of oil and gas in ultra-deep wells, such as in the Brazilian pre-salt, is of inestimable value to the oil industry,” Fernando Busquet wrote for the website.

Even if the intelligence never was shared by officials or analysts with oil companies, it still should be considered improper to have the NSA targeting the networks of Petrobras. Whatever information was gained from targeting the networks would have been stolen or misappropriated information essentially gained through hacking or network exploitation, which means the NSA was engaged in economic espionage. Plus, the US government has not typically embraced state-driven capitalism.

Globo had previously reported that the NSA spied on the phone calls and emails of President Rousseff. She has demanded an explanation.

“This is what I asked: It’s very complicated for me to learn about these things through the press,” President Rousseff declared last week. “I read something one day, then two days later I learn something else, and this goes on piece by piece. I’d like to know what exists (about spying). I want to know what’s going on. If there is something or not, I want to know. Is it real or not? Besides what’s been published by the press, I want to know everything they have regarding Brazil. The word ‘everything’ is very comprehensive. It means all. Every bit. In English, ‘everything.’”

President Barack Obama apparently told the Brazil president he would look into allegations of spying in news reports. Whether he will follow-up and provide information to Brazil is unclear, however, revelations around the NSA could possibly lead to Rousseff refusing to make an upcoming visit to the United States in October.

Tea Party Rebel Justin Amash (R-MI)

Lindsey Graham, John McCain on the 'extreme fringes of American society,' says Rep. Justin Amash (R-Michigan)

BY ASHE SCHOW | SEPTEMBER 20, 2013 AT 1:15 PM

Rep. Justin Amash, R-Mich., told a crowd of libertarians Thursday that Sens. John McCain, R-Ariz., and Lindsey Graham, R-S.C., "are on the extreme fringes of American society in terms of their views on war.”

Speaking at the Liberty Political Action Conference, Amash was responding to a question about Graham's request to seek military action against Iran as well as Syria.

“I’ve had a lot of town halls in my district — there is basically nobody who thinks like they do,” Amash said. “So, you know, it’s a very small percentage of the population and I think you can basically dismiss what they’re doing.”

Amash also spoke at length about his amendment that would have defunded the National Security Agency's program to collect massive stores of consumer telephone records and metadata from innocent Americans.

Amash said, “the Intelligence committee is not one of the branches of government, but that’s how it’s being treated.”

Specifically, Amash said that the classified briefings that members were encouraged to attend for information regarding the NSA surveillance program were more like “a game of 20 questions.”

“You ask a question and if you don’t ask it in the exact right way you don’t get the right answer,” Amash said.

Amash said that asking about the wrong agency — or even using the wrong pronoun — would result in an answer of “no,” and that the correct answer would not be given. He said that members would go from hearing to hearing and briefing to briefing asking questions to try and get an answer.

Amash said that the idea that members could just go into the classified briefings and get answers was “ridiculous.”

“In an extreme hypothetical, let’s say they had a base on the moon,” Amash said. “If I don’t know that there’s a base on the moon, I’m not going to go into the briefing and say ‘you have a moon base,’ right?

“If they have a talking bear or something, I’m not going to say, ‘Have you guys engineered a talking bear?’ You’re not going to ask questions about things you don’t know about,” Amash said.

At times, the intelligence committees would allow members of Congress brief periods of time to read classified documents. Amash said that in order to read the document he had to sign a non-disclosure agreement, but said Americans would learn about the information in the documents “one way or the other.”

“This information will come out eventually,” Amash said. “The kind of things that they are trying to hide can’t be hidden forever.”

Americans first found out about the NSA surveillance program from leaks by former government contractor Edward Snowden, who is currently a fugitive in Russia.

Amash wouldn’t say if he would pardon Snowden for his leaks because “I don’t know all the facts.” But his opinion of Director of National Intelligence James Clapper was crystal clear.

“With respect to Director Clapper, I have said before that he should be charged, that he should resign and he should be removed.”

Amash said that it was possible for grassroots to influence politicians, and that he was working the system “from the inside.” (Inside-outside strategy? -ed)

For instance, Amash introduced the LIBERT-E Act, which would revise the PATRIOT Act to only allow data collection from Americans if they were under investigation. The bill would also allow members of Congress to read court opinions and members of the public to have redacted versions of those opinions.

“You can’t have a free society with secret laws,” Amash said.

Rep. Waxman: Climate Change is Dangerous

Letter from Congressman HENRY WAXMAN

Dear Friends,

The connection between climate change and wildfires cannot be denied. As co-chairs of the Bicameral Task Force on Climate Change, Senator Sheldon Whitehouse (D-RI) and I convened a hearing this summer to discuss the devastating impact of climate change on wildfires. Our panel of experts included firefighters, a US Forest Service representative, State Foresters, and scientist Dr. William Sommers. The panelists warned that the effects of climate change are worsening, the danger of fighting fires is growing, and the cost to minimize the risk of forest fires and fight the fires is increasing.

Two weeks after our hearing, the Rim Fire near Yosemite National Park started burning, and it has consumed more than 235,000 acres of forest land. According to the California Department of Forestry and Fire Protection (CAL FIRE), the Rim Fire is poised to become the third largest wildfire in California history. A quick glance at Cal Fire's list of the 20 largest California wildfires since 1932 shows that half of the fires have occurred in the last 10 years (http://www.fire.ca.gov/communications/downloads/fact_sheets/20LACRES.pdf).

The problem is not limited to California. More than nine million acres burned in the United States last year in one of the most destructive fire seasons on record. Each of the last six fire seasons has cost the federal government more than $1 billion. The panelists at our hearing expressed their strong concern that budget sequestration is limiting our ability to prevent and fight forest fires just as they reach new levels of frequency and intensity.

Congress and the American people cannot continue to ignore the impact of climate change. Scientists tell us these changes are not just random variability and that bigger and more intense fires are red flags indicating climate change. Wildfires are only going to continue to worsen as our temperatures rise, so Congress must act to address not only the impacts of these devastating wildfires, but also the effects of climate change. You can count on me to continue to push as hard as I can for congressional action on this critically important challenge.

Sincerely,

Henry A. Waxman

Ranking Democrat in Energy Committee