library

Jeffrey Inaba: How Smart Are Public-Private Partnerships?

by on January 12, 2011

A while back Jennifer Crozier of IBM’s Corporate Citizenship and Corporate Affairs blogged about the company’s Smarter Cities Challenge, a new public-private partnership aimed at assisting cities. As municipalities search for ways to reduce costs in the face of budget shortfalls, such offerings of “corporate citizenship” can help to support public services. But they also call attention to the need to examine the decision-making process for improving cities. Public-private partnerships draw skepticism because some believe they don’t adequately address the public’s interest. Rather than presume public-private partnerships are either necessary or necessarily evil, we ought to encourage local leaders to establish a set of urban goals and describe the means they will use to achieve them, including the criteria for partnerships with businesses. Public-private partnerships operate in various ways. Knowing about two types will shed light on important choices cities make. One concerns the arrangement between a local government and corporation to deliver a municipal service(s), which Crozier writes about. The other is the de facto relationship where a company offers without obligation a civic amenity. The latter type can be a good indicator of a provision that the public sector once administered but it has since curtailed or whose quality has declined. The arrangement is not a partnership in the traditional sense but rather an adaptive, informal action by a business to offer a public service that has become scarce in the city. These provisions contribute to the quality of urban life, and in turn, to the company’s reputation with customers. One area in which this has thrived is access to information. By having spaces for customers to read, Barnes & Noble and other book retailers make available a public resource. Patrons can sit, browse, and research a wide range of topics, receive assistance in finding material — and because of its longer hours, larger breadth of titles, and better reference staff, it’s an environment many prefer to frequent instead of their local library. These accommodations are happening amid misgivings about the bookstore’s public counterpart — the library. As a recent New York Times article explains, even municipalities in fairly good financial standing have opted to engage for-profit companies to manage their library systems. In defense, some profiled cities say such a partnership ensures the library’s survival in trying economic times by trimming operational costs. But it doesn’t explain what larger purpose these cities have in mind for their collective services. If a city is vague about its overall plan then community concern can arise about the city’s priorities and budget management. Even under extremely unpredictable economic circumstances having a provisional strategic plan will lessen the public’s uncertainty as it will help to explain the process for determining which services will be reduced, outsourced, or eliminated. More importantly, it minimizes the risk that city services will be governed in an ad hoc manner. Because the private sector has become an active partner, a plan is also necessary in order to state where government responsibility ends and for-profit business begins. As the NYT piece points out, when this isn’t clear an intense debate can occur over whether a public service should be entrusted to a for-profit entity. Citizens worry that elected officials are not sufficiently considering civic ideals when confronted with the immediate demand to lessen expenditures, and doubt that a company contracted to lower operating costs and which seeks to optimize its profits will act on their behalf. One kind of public-private partnership that assists cities to establish a development plan is corporate philanthropy. As Crozier describes, numerous major companies have philanthropic foundations that give grants to cities to enhance municipal operations. For these endeavors to work it is critical that if and when these companies do business with cities they go out of their way to differentiate between their socially-minded and business activities. Unlike the philanthropies Crozier applauds such as Living Cities and Cities of Service which give money to a local council to in turn fund an initiative the city has defined, IBM Foundation’s Smarter Cities Challenge bestows grants in the form of the company’s own consulting services and technology. The grants are intended to assist governments in creating an overarching “city-wide strategy” where all operations are integrated into an “interdependent system of systems.” Since it entails the private sector’s participation in shaping the public services framework at the highest level, it would be useful to city administrations, the public, and IBM alike if Big Blue clarifies the program’s philanthropic intent. Critical to the successful marketing and implementation of this extremely generous (50 Million USD) program is to delineate between the social mission of the non-profit Smarter Cities Challenge and the business goals of its for-profit unit, Integrated Service Management for Smarter Cities. Not doing so places the program at peril of appearing to benefit the company indirectly by introducing its services and products to the administrators who are prospective future paying clients of those wares. In cases of such grants to cities, companies need to communicate the procedures that ensure their foundation’s giving policies put the public’s interest first. In the coming year as cities search for ways to offset essential services, pay down debt, fulfill pension obligations, and in some cases stave off bankruptcy, public-private partnerships will increase in popularity as an effective cost saving option. Crozier’s piece reveals the invaluable role of corporate philanthropy as one type of partnership to fund projects that intelligently aid cities. These important efforts will serve localities best if there is strong leadership by government, including the drafting of a strategic plan that outlines a criteria for making decisions that specify a system of accountability for acting in the community’s interest. In fact, many of the leading philanthropies, such as the ones Crozier cites, involve non-profit public advocacy groups as core partners to make certain that what matters to communities are incorporated into programs they fund. We believe this needs to be an integral component of urban partnerships since their input helps to create plans that can garner public support, philanthropic momentum, and capital investment to improve city services, and by extension, the quality of urban experience.

Read the rest here:
Jeffrey Inaba: How Smart Are Public-Private Partnerships?

Tagged as: , , , , , , , , , , ,

{ 0 comments }

Rare Color Photos From The Great Depression (PHOTOS)

by Ryan McCarthy on August 7, 2010

These rare color photos from the Great Depression were compiled by the Farm Services Administration from 1939 and 1944, and were recently gathered by the Denver Post’s excellent photo blog . All told, there are some 1,600 pictures which are now available online thanks to the Library of Congress. The photos, which depict small town life, industry and recreational activities during the Great Depression included in a 2006 exhibit “Bound for Glory: America in Color.” Check them out below:

More here:
Rare Color Photos From The Great Depression (PHOTOS)

Tagged as: , , , , , , , , , ,

{ 0 comments }

David Isenberg: The GAO Transcripts, Part 22: A Convoy Was Attacked? Really, You Don’t Say

July 28, 2010

This is the twenty second installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .” The GAO met with two PSCs to get their viewpoint on interacting with the U.S. military. Who they can’t be determined from the transcript. But from their viewpoint the military could have done better in certain regards. For example: During this incident, a _____________ convoy was attacked for two days. _____________ equested aid from the miIitary, but received none. 41 assets were lost. After this incident, _____________ management team contacted the military. The military had no idea that the convoys were attacked even though they were accompanied by military vehicles. _____________ was aware of the situation because they have intra-convoy communication with a convoy movement control center. _____________ ___________ ater learned that the military escort that was supposed to be accompanying the convoy did not request aid or release information on the convoy’s situation. Also, the U.S., military, in their view did not have qualified personnel for convoy duty. _____________ feels that the _____________ support provided by the military are inexperienced. Most of the _____________ the convoys were previously cooks, etc and had not shot a gun since base camp training. Of course, this would have been during the first year and a half after the U.S. invaded Iraq so the situation likely improved in terms of the ability of U.S. soldiers Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Kate Walker Index Date Prepared: October 19, 2004 DOC Number. 1195724 Reviewed by: Carole Coffey DOC Library: Goal 2 Job Code. 350544 Record of Interview Title Interview with Contractor Purpose To gain on-the-ground insight to the Contractor perspective Contact Method Face-to-face Contact Place _____________ Contact Date October 9, 2004 Participants _____________ _____________ _____________ Carole Coffey, Analyst in Charge, GAO Glenn Furbish, Senior Analyst, GAO Kate Walker, Analyst, GAO Comments/Remarks: We met with _____________ and _____________ to discuss their experiences in interacting with the military. _____________ currently is currently working on tasks order _____________ __________________________ and task order _____________of all task orders which provides _____________n Iraq. CONVOY SUPPORT The military has complete control of convoy movements. The rnilltary decides the number of escorts necessary given the threat level. In addition to military support, the Kuwaiti Military Police also escort the convoy. The current standard protocols for convoys in Kuwait are: _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ The Army takes a “hands-off’ approach to convoys traveling in Iraq. When asked if he ever felt that the level of support that the Army had given him was insufficient, _____________ plied that he was a civilian and he really does not know what adequate protection warrants. _____________ did indicate, however, that the level of protection the military provides had been increased since an incident on 8 and 9 April 2004. During this incident, a _____________ convoy was attacked for two days. _____________ equested aid from the miIitary, but received none. 41 assets were lost. After this incident, _____________ management team contacted the military. The military had no idea that the convoys were attacked even though they were accompanied by military vehicles. _____________ was aware of the situation because they have intra-convoy communication with a convoy movement control center. _____________ ___________ ater learned that the military escort that was supposed to be accompanying the convoy did not request aid or release information on the convoy’s situation. After learning about the attack, the military increased security force protection and reduced the convoy size from _____________ In addition, the military added _____________ support, which convoys did not have before. The military also gave _____________ nvoy tracking system called Joint Distribution Logistic Management (JDLM) to help monitor their convoys _____________ so uses Qualcom to communicate with ifs convoys. Page 1 Record of interview _____________ also finds that military support is often unfamiliar with the territory. After the April incident, the military also told _____________ that they were going to get _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ __________________________ _____________ _____________ feels that the _____________ support provided by the military are inexperienced. Most of the _____________ the convoys were previously cooks, etc and had not shot a gun since base camp training. _____________ believes that the military is conserving their assets for more risky endeavors. TRANSFER POINTS _____________ reported that _____________ had noted that transfers between Army and Marine area of responsibility (AOR) are not seamless. Most recently, a convoy traveling to Anaconda that was being escorted by the Army had one of their trucks shot up by a Marine as the convoy entered the Marines AOR. _____________ heard some complaints regarding the support given by the Marines. He believes that the Marines feel that since _____________ is an Army contract that they should not be held responsible for their protection. _____________inds that “the Marines are a very independent group that likes to do things themselves.” He says there are a lot of “flexing over who’s in charge” between the Army and the Marines. MILITARY AID _____________ indicated that has a military contact person for times of need. Depending on the type of situation _____________ will call upon the aid of either the army or the Kuwaiti Ministry of Interior (KMOI). Typically _____________ will request help from KMOI in minor situations and rely upon military aid for larger problems. INTERNAL REPORTING AND COMMUNICATIONS Internally, _____________ tracks damages to its trucks incurred via rocks, IEDs, etc. _____________ believes that _____________ has good internal communication, but external communication with the military is not strong. _____________ latest fatality occurred south of Baghdad, when a _____________ ommander was killed by an IED. According to _____________ he military had known about the IED, but had not told anyone about it because they had heard that the IED was not live. RULES OF ENGAGEMENT Under the agreed upon rules of engagement _____________ mployees and subcontractors are not allowed to attack insurgents unless they are returning fire. _____________ employees are not allowed to take proactive attacks. CURRENT SECURITY SITUATION IN IRAQ Since the April convoy attack, _____________ ports that they have seen more security from the military. _____________ s, however, that they are still operating in a war zone and vulnerable to the insurgents. Pge 2 Record of Interview IMPROVEMENTS IN IRAQ _____________ would like to see increased route security, especially on main supply routes (MSR). At any given time, there are nearly _____________ convoys moving per week on MSRs. _____________ elieves that the military should be more proactive in protecting these routes. Extra support for convoys moving north would also improve the situation in Iraq as insurgents are aware that convoys _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ elieves that the military needs to reassess their policies dealing with PSCs. He believes that the rules of engagement for PSC need to be clarified. _____________ _____________ feels that _____________ has an advantage over other PSCs in their relationship with the military, as_____________ deals with the military directly and have full visibility. There has been some talk of creating a military “bubble” in Iraq and having the military control movements within the inner triangle of Cedar, Mosul, and Alasad in Iraq. In this central triangle, only military vehicles would travel and contractors would provide transportation and services to the main entry points. _____________ elieves that this system would be more successful because the military would be better able to manage its own personnel and improve internal communications. Page 3 Record of Interview

Read the full article →

David Isenberg: The GAO Transcripts, Part 19: When PSCs Hurt U.S. Troops

July 23, 2010

This is the nineteenth installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .”. Given language like this, “The risk-to his troops could be minimized if PSCs would coordinate with the Division 1st”, I assume, that this interview was done with members of the 1st Armored Division, Wiesbaden, Germany. Note that three years after the U.S. invaded Iraq the U.S. military still has problems working with PSCs. As the interviewees state, “The MNF-I guidance they had received did not include how to use PSCs or how to interface with them.” They also noted that when PSCs do something wrong the blowback affects the military: ________________ explained that whether the PSCs were from Global, or hired by other contractors, they all wore similar uniforms to the U.S. military, so when something occurred, the American army was blamed. … The ________________ also had concerns that the actions of some PSCs were hurting the image of the U.S. military. The ________________ said that when the PSCs forced an Iraqi off the road or shot at an Iraqi vehicle, the Iraqis thought it was a U.S. military member. The Iraqis did not make a distinction between PSCs and the troops. Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Laura Czohara Index: I Date Prepared: April 10, 2006 DOC Number: 149037 Reviewed by: Carole Coffey 4/19/06 DOC Library: Atlanta Job Code: 350732, 350739 ________________ Record of Interview Title Brief with ________________ Purpose To discuss our job objectives and scheduled meeting participants for the week 3/27/06 through 3/31/06 Contact Method. In-person Contact Place ________________ Contact Date March 27, 2006 1300 Participants U.S. Army (Army), ________________ ________________ ________________ ________________ ________________ Government Accountability Office (GAO) Defense Capabilities and Management Team: Vince Balloon, Senior Analyst – (404) 679-1983; balloonv@ gao_aov Laura Czohara, Senior Analyst- (404) 679-1814; czonaral@gao.gov Wesley Johnson, Analyst – (202) 512-8475; johxzsonw@zao.dov Aaron Kaminsky, Analyst – (214) 777-5782; kaminskya@gao.goy Comments/Remarks: ________________ ith the U.S. Army as part of an ________________ Page 1 Record of Interview Experience with Contractors in Iraq ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ Private Security Contractors ________________ provided his observations on the use of private security contractors (PSCs) in Iraq. He explained that the ________________ ad a difficult time working with and interfacing with PSCs during their deployment. For example; some were good while others acted like “cowboys.” However, it was a trade-off in the numbers game. The MNF-I guidance they had received did not include how to use PSCs or how to interface with them. However, once a week they would meet to gain situational awareness. There were about 91 PSCs in Baghdad. ________________ explained that whether the PSCs were from Global, or hired by other contractors, they all wore similar uniforms to the U.S. military, so when something occurred, the American army was blamed. He provided an example of when a PSC company shifted and lowered their bid. For eight months, they worked with a ________________ ompany. Then, this other company came in, had a lower bid, and won the contract. There was a large risk involved in this shift; language, procedures, and an established working relationship had changed. ________________ tated tha ________________should have had a say; however, he had no input. PSCs are a very different: thing. PSCs would pass through the area and the military would not even know of the movements so they could secure the area. In Baghdad, the military had no authority over them and no ability to communicate with them. However, ________________ xplained they could put pressure on it. MNF-I had a wing of PSCs. When asked about the Reconstruction 0perations Centers (ROCs), ________________ ted they were not familiar with ROCs. Conclusion ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ Follow-up interview On Friday, April 7, Carole Coffey phoned ________________ follow-up on the issues of PSCs. According to the ________________ some PSCs frequently did not coordinate their movements with his division. although others were very good about coordinating with the division. He re-iterated that the PSCs Page 2 Record of interview frequently entered the division’s battlespace without notifying the division. He said that that the lack of coordination put his troops at risk. He said that most army officers believe they have a moral obligation to help contractors when they get in trouble, particularly American contractors. The risk-to his troops could be minimized if PSCs would coordinate with the Division 1st. If the PSCs coordinated, his troops could secure the area or recommend a different route or a different time of day that might be safer. The ________________ also had concerns that the actions of some PSCs were hurting the image of the U.S. military. The ________________ said that when the PSCs forced an Iraqi off the road or shot at an Iraqi vehicle, the Iraqis thought it was a U.S. military member. The Iraqis did not make a distinction between PSCs and the troops. The ________________ felt that the division had no way to really communicate with the PSCs although they tried. To work with the embassy’s Regional Security Officer. The ________________ aid that he had no idea how many PSCs would be in his AOR before he got to Iraq. The Division was based in Baghdad and the ________________ stimated that there were about 90 PSCs working in the Baghdad area. He said the division got no information about working with PSCs in Iraq but he believed that some training/guidance/information would have been helpful. Page 3 Record of Interview

Read the full article →

David Isenberg: The GAO Transcripts, Part 17: Use of PSC is Cost Prohibitive

July 21, 2010

This is the seventeenth installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .” It is not clear from the transcript what government office is being interviewed here. But given that it supported all overseas operations it obviously played an important role. Among the interesting revelations are that background checks are outsourced to a corporate security office. Even more interesting, someone in government disagreed with the near constant assertion by PSC supporters that using them is more cost effective than using government personnel as illustrated by this: Under _____________ the Army is contractually required to provide force protection f _____________ To date, _____________ not had to supplement the security that the Army or Rangers provide with private security guards. Several months prior to the interview _____________ templated getting more protecti _____________ concerned that the force was getting smaller and would not have sufficient resources to provid _____________ adequate protection. Ultimately _____________ decided against it because it was cost prohibitive. In addition, , the government would have to indemnify it, further complicating matters. Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Kate Walker Index: Date Prepared: October 27, 2084 DOC Number: 1201624 Reviewed by: Carole Coffey DOC Library: Goal 2 Job Code: 350544 Record of Interview Title Interview with _____________ Purpose To learn about _____________ Contact Method Face-to-face Contact Place _____________ Contact Date August 12, 2004 Participants _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ Steve Sternlieb, Assistant Director, GAO Carole Coffey, Analyst-in-charge, GAO Dave Grover, Senior Analyst, GAO William McPhail, Senior Analyst, GAO Kate Walker, Analyst, GAO Comments/Remarks: _____________ the _____________ in charge of the upport office for the _____________ contract. _____________ SUPPORT OFFICE SERVICES The _____________ upport Office supports all overseas operations. Currently, _____________ work in six countries: Uzbekistan, Djibouti, Georgia, Afghanistan, Kuwait, and Iraq _____________ human resource (HR) employees recruit and process employee applications. Processing new employees takes 8-10 days and HR processes about 500-600 employees every week _____________ required by contract to perform background check on all of its employees. These background checks are outsourced to a corporate security office. _____________ quires that employees pass provide updated medical physicals, passports, and training requirements. PROJECT CONTROLS _____________ ploys a number of resources to ensure that its projects are properly managed. In _____________ as a robust procurement office, a twenty-four hour operations center, a contract administration, and accounting and finance staff all dedicated to project management. CONVOY MOVEMENT Both _____________ mployees and supplies are transported in convoys. As of 19 July 2004, all _____________convoys are required to have: 1. One military platform (humvee, etc) for every five _____________ hicles 2. No more than 15 _____________ ehicles per convoy in order to keep the convoy short (The convoy standard used to be 25 _____________ ehicles.) 3. A military shooter on every third vehicle Page 1 Record of Interview _____________ has provided us with a copy of these convoy requirements. When crossing sector lines, force protection changes for supply and employee convoys; mail convoys have dedicated escorts and do not change between sectors. Army escorts can be the military police (MP). troops, combat arms, combat support (CS), or combat service support (CSS) units. _____________ reports that _____________ occasionally complain that they do not have combat arms escorting their convoys. But, he believes that this is just a grip and that CS and CSS units have provided sufficient force protection to date. _____________ had to occasionally leave a vehicle behind if it is not usable. These vehicles are typically burned so that insurgents cannot use them. If a vehicle is burned while in protected convoy transport, _____________ can submit claims for reimbursement to the PCO. _____________ ust also submit a loss, damaged, or destroyed (LDD) report to the PCO, but it must be approved by to be government property. _____________ transportation operations center at every location they have in theatre. _____________ vehicles are required to inform these transportation operations centers of their movement. Most _____________ vehicles have QualCom satellite systems that allow them to communicate with theatre transportation operation centers. _____________ vehicles also carry satellite phones. _____________ onvoys follow Army command. _____________ _____________ _____________ _____________ theatre. _____________ coordinates convoy movements with the commander in Kuwait and Anaconda in Iraq. He also works with _____________ _____________ Baghdad to coordinate movement. _____________would like to see _____________ move away from ground transportation to air transportation. CHAIN OF COMMAND _____________ finds that there is no “security chain of command” in Iraq; program managers are the chain of command. _____________ is the _____________ Middle East and Asia. _____________ is the _____________ is located at the _____________ n Baghdad. _____________ has provided us with a matrix of the chain of command fo_____________ _____________ an addition to the lack of a security chain of Command _____________also believes that technical stove piping is also a problem. FORCE PROTECTION AND SECURITY Under _____________ the Army is contractually required to provide force protection f _____________ To date, _____________ not had to supplement the security that the Army or Rangers provide with private security guards. Several months prior to the interview _____________ templated getting more protecti _____________ concerned that the force was getting smaller and would not have sufficient resources to provid _____________ adequate protection. Ultimately _____________ decided against it because it was cost prohibitive. In addition, , the government would have to indemnify it, further complicating matters. INTERNAL REPORTING The government requires that _____________ provide them with after-incident reports, daily SITREP reports (including personnel status), the death of an employee, etc, _____________ provided us with copies of some of the after-incident reports. Nearly five to ten after-incident reports are written daily. These reports go to the ACO and the PCO. Convoy incident reports initiated from theatre transportation are immediately sent to_____________ Baghdad where they are Page 2 Record of interview dispersed. The convoy commander writes a more detailed report after the conclusion of the convoy. Reports about mortar incidents are reported to an element on the camp. SUGGESTIONS Overall , _____________ elieves that s a good relationship with the military. He believes that the reserves and national units do a good job and does not think that the soldiers leave anything to want _____________ did suggest that the military acquire better technology to detect improvised explosive devices (IEDs). He did say, however, that _____________ vesting in its own hard vehicles, ballistic blankets, helmets, and vests. Page 3 Record of Interview

Read the full article →

David Isenberg: The GAO Transcripts, Part 13: Houston, We’ve Had A Problem

July 15, 2010

No, this is not about the Apollo 13 mission. But this is the thirteenth installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .” It is pretty obvious that the company in this transcript is Kellogg Brown and Root Services, Inc., (KBR), as evidenced by language like this, “The only reports seen in Houston office are serious reports that have to be given to the client. Serious reports involve the destruction of government property, USG embarrassment, or death/injury of contractor personnel.” I can’t help but wonder what KBR thinks constitutes “USG embarrassment;” KBR contractors in possession of child porn ? Personally, treating US troops like trash by running burn pits that may have given them cancer seems pretty embarrassing to me. Reading some of the below language one understands that getting adequate security for the logistics contractors was frequently a big problem. For example, “___________ that they are not receiving the amount of force protection ___________ contractually entitled to in coalition sectors… On Army camps, 1st tier subcontractors working with entitled to the same level of protection granted to below first tier subcontractors as unsure about the level protection provided to contractors by the military. He assumes that if the subcontractor were on the base, then they would get the same level of service as first tier subcontractors. But, most second and third tier subcontractors typically do not live on ___________ mps/sites.” Sometimes the lack of adequate security could negatively impact supply missions as this passage illustrates: ___________ is heard about situations in which the ratio for convoy security was not sufficient. ___________ acquiesced to this statement, saying that he was not sure if the Army’s status quo requirements provide enough protection to securely cross convoys. He said that J ___________ would better be able to answer that question. ___________tated that in the early days there could be as many as 1,000 trucks backed up awaiting security details. Because convoy transportation is so insecure, ___________ as an air shuttle run that goes to five locations in Iraq. ___________ noted that there is a problem with “free wheelers” in Iraq. “Free wheelers” are contractors that don’t want to wait for US Army protection for their convoys. ___________ ___________ ___________ ___________ ___________ ___________ At least in the early days, according to this interview, private security contractors were left on their own. “The general expectation among the multinational coalition forces is that ___________ fend for themselves; PSCs are the lowest priority for coalition services.” Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Kate Walker Index: Type bundle index, here Date Prepared: August 24, 2004 DOC Number: Type document number here Reviewed by: Type reviewer name here DOC Library: Type library name here Job Code: 350544 Record of Interview Title ___________ coordination with Military Purpose To understand how ___________ and its subcontractors coordinated with the military Contract Method Face-to-face Contact Place ___________ Contact Date August 11, 2004 Participants ___________ ___________ ___________ ___________ ___________ ___________ Carole Coffee, GAO Dave Grover, GAO William McPhail, GAO Steve Sternlieb, GAO Kate Walker, GAO Comments/Remarks: ___________ a military contractor that provides ___________ the US Army under the___________ contracts. Under this contract, the Army is supposed to provide ___________ with security protection. In addition to this protection, ___________ subcontracts for security with the ___________ a private security firm based out of ___________ . In this meeting, a number of ___________ fficials spoke with us about the current situation in Iraq, their experiences with the US military and the subcontractor relationships. ___________ did most of the talking. ______________________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ major contributors ___________ utilized a PowerPoint presentation to review the questions that we had sent to them in advance. (Analyst Note: Presentation included in Interview Notes.) ___________ resence in Theatre ___________ urrently has ___________ rsonnel in theatre ___________ rotates its employees in and out of field on yearlong rotations. Some people choose to stay the whole rotation. Page 1 Record of Interview Regional security managers handle sectors of Iraq. The security manager manages main camps and sites in Kuwait, Iraq, ___________ is th ___________ in Iraq. ___________ ___________ to the military officials almost hourly. Security coordinators are typically US expatriates with security clearances that work at Army camps. While their roles and responsibilities vary with their location, their primary job is to serve as the senior liaison with the US military and make sure that force protection measures are in place. Security technicians write reports and conduct analysis of security situations. ___________ has a regional office in ___________ at the ___________ which is protected by US military parameter defense troops ___________ rks out of the ___________ office. ___________ subcontracts with the ___________ for security protection. Military Force Protection: Who is responsible? The military provides protection for ___________ tractors. This protection is delegated to coalition forces in the sector closest the contractors. Currently, coalition forces provide limited perimeter protection. ___________ otes that coalition forces lack of quick response teams and that some coalition sectors could be stronger. ___________ that they are not receiving the amount of force protection ___________ contractually entitled to in coalition sectors. The military also provides protection for first tier subcontractors located on Army bases, and sometimes will also provide protection for second and third tier contractors if they are located on an Army base. ______________ What level of protection is provided? Under the provisions of the ___________ contract, the US military is required to provide its contractors with the same level of protection as that provided to the military troops. The level of protection is decided cooperatively based on ___________ rforms vulnerability assessments. If KBR had concerns, their first response would be to talk to ___________ they wouldn’t go direct y to the military. If that attempt elicited no response, ____________then go to the PCO in writing. On Army camps, 1st tier subcontractors working with entitled to the same level of protection granted to elow first tier subcontractors as unsure about the level protection provided to contractors by the military. He assumes that if the subcontractor were on the base, then they would get the same level of service as first tier subcontractors. But, most second and third tier subcontractors typically do not live on ___________ mps/sites. In general, ___________ eceived good cooperation and support from the U.S. military. While there have been some minor incidents ___________ unaware of any major situations in which ___________ sn’t received good support from the military. ___________ no ___________ have a very “symbiotic relationship” with the military as most of its employees were former military officials. ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Page 2 Record of Interview ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ______________________ ___________ ___________ ___________ Military Force Protection: Convoys The US military is responsible for establishing security requirements and coordinating details for contractor convoys ___________ rks “hand and glove” with their military counterparts to help assess whether convoy standards meet adequate protection levels. If ___________ sn’t satisfied with the level of security offered by the military ___________ to contact their prime security manger. The manager can then talk to the commander. The military is also responsible for coordinating dedicated detail for convoy travels from point A to point B. MOW has a dedicated team for convoy/personnel movements that coordinates with the military, ___________ ployees and subcontractors. ___________ _________________________________ ___________ ______________________ believe that convoy details are dedicated to specific regions, resulting in convoy handoffs at checkpoints between sectors. Military requirements for convoys are written into Fragmentary Orders (FRAG Orders). Specific force protection requirements are based on the size of the convoy. (Analyst note: See page 7 of the ___________ Force Discussions PowerPoint presentation.) ___________ is heard about situations in which the ratio for convoy security was not sufficient. ___________ acquiesced to this statement, saying that he was not sure if the Army’s status quo requirements provide enough protection to securely cross convoys. He said that J ___________ would better be able to answer that question. ___________tated that in the early days there could be as many as 1,000 trucks backed up awaiting security details. Because convoy transportation is so insecure, ___________ as an air shuttle run that goes to five locations in Iraq. ___________ noted that there is a problem with “free wheelers” in Iraq. “Free wheelers” are contractors that don’t want to wait for US Army protection for their convoys. ___________ ___________ ___________ ___________ ___________ ___________ One of the most dangerous roads to travel in Iraq right now is the 13km road from Biop to the Green Zone. This is a military supply route/army supply route (MSR/ASR) that needs to be protected. The MSR/ASR is not secure right now. ___________ that even in secure places there is still rock throwing, etc., that is thwarting progress. ___________ provided the following anecdote to illustrate his point. He spoke with a victim of the 9 April 2004 convoy attack that it was the 5th convoy that he had been in that had been attacked. ___________ eported that the convoy experience is different in different parts of Iraq. The South is unlike the West, East, or North. The PMO keeps a tally of convoy attacks. ___________ operational center ir ___________ keeps tabs on attacks on contracts for ___________ Multinational Coalition Force Protection: Convoys The general expectation among the multinational coalition forces is that ___________ fend for themselves; PSCs are the lowest priority for coalition services . Convoy movements have to be Page 3 Record of Interview scheduled, Unscheduled/non-regular convoy protection is nearly non-existent. The company will not move unless they are secure. ___________ that if their inability to move impedes their ability to fulfill the contract they would bring it up with their contracting officer. ___________ thinks that the convoy protection is under charter of ___________ While ___________ elieves that there are areas in convoy protection that could be stronger, they have not yet reached the threshold where they can say they are not getting adequate protection and need to subcontract for security. Weapons: It is against ___________ and ______________________ovisions for ___________ mployees to hold guns; ___________ employees are not shooters. If anyone is found with a gun, he/she is fired immediately. Subcontractors protecting ___________ch as the ___________ ___________ wever, can have weapons if they are required in the scope of work (SOW) for the subcontractor. Subcotractors have run into a number of problems acquiring weapons. ___________ ___________ ontract reported that, “it is very difficult to get weapons; availability is everything.” The requirements are based on cost importation and custom issues include: o 7.62 mm for rifles o Minimum 9 mm for side arms o Some AK47/45 and MP5 can be allowed depending on subcontractor location ___________ reported th ___________ subcontracted had originally planned to import and lease their weapons on day rate, but UN embargo prohibits importation of weapons. Ultimately, the ___________ ___________ contractor, ended up buying in country, forensically clean weapons and register them on government property books. ___________ formed us that a FRAGO had been issued defining which small arms/personal weapons could be used in Iraq. This FRAGO also required those operating or owning guns in Iraq to have weapons cards. (Analyst note: We have a copy of this FRAGO issued in September 2003 in our files.) Camp Protection ___________ unaware of any contractors living outside military camps in Iraq. There is a concern that high-rise hotels are too dangerous, when but 500-600 people are cycling in at a time, ___________ few choices other than housing them at a hotel. At complexes with a large number of people can hire PSC, but they have to be unarmed. There is no security at such hotels other than unarmed military. Recently, ___________s been warned about the security situation in Kuwait. There is some intelligence that the local insurgents were specifically striking contractors. Records of Activity: Military Reporting FRAG orders are distributed by and to all military. Records of Activity: Daily Reports ______________________ daily report about all personnel at each o___________ its subcontractors’ work locations by pay rate. He also has a roster of all personnel present for Page 4 Record of interview duty and their registered weapons. Activities are well recorded. The most common incidents vary depending on your location. o North: rockets, improvised explosive devices (IEDs), mortars. o Baghdad: Everything, vehicle borne IEDs, IEDs, kidnappings, small arms fi (SAF), rockets, mortars, attacks on camps, convoys, aircraft South: Occasional mortar attacks, hijackings, theft, vandalism Records of Activity: Operations Reports Operations reports have evolved over time and give security managers insight into what types of issues different bases are facing . They are provided and maintained in the security managers’ offices in Iraq. The ___________ ubmits operations reports as well. The ___________s also absolutely required to provide an after-accident and incident reports. ___________ gested that the new Project Manager would be the best person to talk regarding operations reports. The only reports seen in Houston office are serious reports that have to be given to the client. Serious reports involve the destruction of government property, USG embarrassment, or death/injury of contractor personnel. Serious incident and operations reports also go to the PC0. ___________ not contractually required to report security concerns to the PCO. ___________ as lost 42 ___________ people (including subcontractors) to date in theatre. Anytime a service person in injured or killed, ___________reports to the PCO. ___________ does not know, however, what the PCO does with that information. ___________ ports both ___________ nd subcontractor information to the PCO. ___________ general sentiment is that nobody has a grip on the contractors’ facilities, etc. because PSCs are not required by contract to report anything. (Analyst note ___________ suggested tha ___________would be the best person to ask ___________ ports to the client if anyone dies.) Intelligence Sharing: Among PSCs Currently, there are no contractual requirements that PSC communicate with each other, but intelligence sharing between all major companies is occurring. Note, however, that those companies perceived as “fly-by-night types” by major companies are not included in this communication. Emergency Action Plans: Al ___________ ocations have an emergency action plan. ___________ reports, however, that many military units have not created a coordinated emergency action plan with their contractors. ___________ CONTRACT Force Protection The origina ___________ nd PCO Oil Contract required that the Services Theater Command provide ___________ with force protection “commensurate with that given to Service/Agency civilians.” As this force has been found insufficient, the ___________ contract now has a hybrid of military security augmented by private security subcontractors. ___________ private security supplements the guard force in camps, provides escort security to move to work sites, and temporary perimeters at worksites supplemental security protects itself, its subcontractors, and DOD civilians. Coalition Forces still, however, provide a secure perimeter for the areas where ___________ ts subcontractors, and DOD personnel sleep. The ___________ came aboard the ___________ ontract ___________ ___________ rovides security for pipelines ___________s unaware of any subcontractors f___________ roviding private security for oil. Page 5 Record of interview

Read the full article →

David Isenberg: The GAO Transcripts, Part 10: Blackwater Would Have Cooperated if Only the Other PSCs Had Blackberries

July 9, 2010

This is the tenth installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .” Language likes this: ________________has provided personal security/close security, fixed-site facility security, and counter-terrorism training in support of U.S. government operations in Iraq for over one (1) year. ________________ stated that most of the company’s work is performed for the Department of State (DOS), although ________________ does provide fixed-site security for the Department of Defense (DOD). indicates that the interviewee is someone from Blackwater. Given some of the charges leveled against Blackwater/Xe in more recent years, the section on weapons and training merits reading. Also, it at least seems possible that Blackwater helped keep U.S. military personnel healthy, and possibly saved some of their lives, via unacknowledged medical services it provided, i.e., “assisted the military with medical support at some of its sites because the company often has higher qualified medical personnel than DOD.” Also, Blackwater gives its rationale for not cooperating with Aegis Defence, which had the responsibility of sharing information about PSC activity in Iraq among PSCs and to the U.S. military., has not participated in the ROC and stated that such a system does not work because _______________ reports to DOS, not DOD. ROC information provided to _______________ well after the fact and often through the ROC website and/or e-mails, which is not effective because mos _______________ mployees do not carry Blackberries (wireless communication devices). and how it really felt about Aegis: _______________ stated tha _______________ does not believe tha _______________fense Services has been successful in its mission. He noted that because PSCs are private companies registered with the Iraqi government, there is no requirement to work with _______________ Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Christopher Durbin Index: ________________ Date Prepared: 01/18/2005 DOC Number: 1246877 Reviewed by: Type reviewer name here DOC Library: GAO HQ Job Code: 350544 Record of Interview Title Interview with ________________ (Private Security Contractor) Purpose To discuss issues related to private security contractors in Iraq Contact Method Face to face interview Contact Place ________________ ________________ ________________ Contact Date January 13, 2005 Participants ________________ ________________ ________________ ________________ ________________ ________________ GAO Carole Coffey, Analyst-in-Charge Kate Walker, Analyst Chris Durbin, Analyst Comments/Remarks: Introduction Following a tour of the ________________ acilities led by led by the meeting participants reviewed ________________ answers to the initial list of questions provided in advance by GAO (see Work paper #12848071). These responses generated discussion and raised additional issues, which are described below. Company Description and Security Overview ________________ Operations in Iraq ________________ ated that ________________has provided personal security/close security, fixed-site facility security, and counter-terrorism training in support of U.S. government operations in Iraq for over one (1) year. ________________ stated that most of the company’s work is performed for the Department of State (DOS), although ________________ does provide fixed-site security for the Department of Defense (DOD). Currently ________________ holds nine (9) contracts in Iraq staffed by a total of 455 personnel (179 expatriates and 276 third country nationals). Page 1 Record of Interview ________________ noted that DOD provides outer-level perimeter security for the International Zone (formerly known as Green Zone) in Iraq, but within the Zone, security is provided by both DOD and private security contractors (PSCs). On ________________contracts, the overall level of security provided varies according to both contractual requirements and the environmental threat level. When changes to the threat environment occur, the client (DOS or DOD) has the ability to modify the level of security provided b ________________ an make suggestions as to the level of security that should be provided, but it is the client’s responsibility to modify the contractual requirement. This process becomes complicated, at times, on DOD contracts due to high turnover (every 60-90 days) of DOD contract officers. Iraq Security Situation ________________ stated that the security situation in Iraq continues to worsen, and they do not anticipate any improvements until at least after the Iraqi elections are held in late January 2005. Currently, the most secure areas in Iraq could best be described as “high threat”, while the least secure areas are combat zones. In addition, ________________ noted that hostilities are no longer confined to the Sunni Triangle area. Instead, new religious and tribal factions have become involved with the ultimate goal of preventing the success of national elections. Outside influences from other countries are also affecting the security situation in Iraq. also stated that “even the best area in Iraq is considered unsafe.” ________________ Views on Issues Involving PSCs in Iraq ________________ ted that the most significant issue facing ________________ is the inability to quickly and efficiently receive authorization to move weapons, ammunition, and equipment into the Iraqi theater to support U.S. government contracts. Other issues include a lack of clarification of the legal status of private security employees, which translates into liability and insurance issues, as well as the overall immature status of the Iraqi legal and enforcement mechanisms. (Additional details provided within Weapons section below.) Weapons and Training Weapons Used by ________________ ________________ stated that the weapons carried by ________________mployees are specified by individual contract requirements, but that primary systems include M-4 rifles, AK-47 rifles, and Glock-19 pistols. These weapons are consistent with those outlined in the initial end user certificate (EUC) ________________obtained from the Coalition Provisional Authority (CPA), but have varied on occasion from specific weapons ________________as requested. Challenges ________________ Faces in Acquiring Belt-Fed Weapons from Vendors As request for proposals (RFPs) are issued, they generally outline the weapons a bid-winning PSC will be required to use, including various automatic and belt-fed weapons. Although ________________ possesses a federal firearms license that enables them to acquire automatic weapons, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) regulations prohibit them from acquiring belt-fed weapons. ________________ cannot even purchase these weapons if they are registered as Page 2 Record of Interview government furnished equipment (GFE). Some examples of contractually required belt-fed weapons include the M-249 and M-240 machine guns. Under ________________contracts, these weapons become government furnished equipment at the point of sale. However, ________________cannot find a vendor who will sell it belt-fed weapons due to the previously mentioned ATF regulations. ________________described this as a Catch-22 situation. Challenges ________________ v. Faces in Acquiring EUCs and Export Authority for Weapons Another challenging situation facing ________________ concerns the process of obtaining EUCs and receiving export authority for weapons. While some contracts provide weapons and ammunition to ________________ as GFE, other contracts require the company to acquire an EUC from the contract authority to permit it to purchase weapons and apply for export authority from DOS’s Directorate of Defense Trade Controls (DDTC). Under the EUC process, delays occur at both the point of EUC issuance as well as during DDTC review of export authority requests, ________________ officials indicated ________________ pointed out that the process of receiving an EUC only to later have export authority denied is self-defeating, given that DOS is often the agency both issuing the EUC and subsequently denying the export authority (via its DDTC). ________________ indicated that the DDTC is not consistent in their issuance of export authority. Export authority is granted on a variable basis and is dependent upon the whim of the DDTC official. ________________ has had a widely ranging timeline for receiving their export authority. For example, ________________ eceived authority for buttstocks in 48 hours, but waited nearly 6 months to get their first shipment of weapons. According t ________________officials, the current process of EUC issuance and DDTC export authority review could be improved. Currently for government contracts, DOS (as contract authority) provides an EUC to ________________ which then submits the EUC to DDTC (export authority) for review. Alternatively, if DOS furnished its DDTC with a copy of the EUC at the time of contract award, and then issued the EUC to the contracting company within 72 hours, then DDTC would have advance notification of company requests, and companies would be able to meet short delivery timeframes. For civilian contracts, ________________ noted difficulty in determining who within the Iraqi Ministry of the Interior has the authority to sign EUCs for such contracts ________________ anticipates that DDTC approval in support of these types of contracts will require longer lead times and may require additional confirmation in order to gain approvals. Challenges ________________ Faces in Providing Training to Its Employees ________________ stated that providing training for certain U.S. manufactured weapons is prohibited under the International Traffic in Arms Regulations (ITAR) and presents a major issue for PSCs. She noted that ITAR only covers what is exported from the U.S., so weapons shipped from Germany, for example, are exempt from ITAR training prohibitions. ________________ stated that ________________ has sought permission to train vetted employees (i.e., those possessing certain military skills or experience) from Sri Lanka, the United Kingdom, and Canada, and the company has been denied. Currently ________________ must operate under the system of providing a training roster to DDTC and waiting extensive periods of time for approval. Consequently ________________ often must rely upon its personnel vendors to provide training and/or trained products (personnel) to the company. This reliance is not ideal given that training standards vary among the home Page 3 Record of Interview countries of individual ________________mployees and by job responsibility. However ________________ noted that the quality and previous combat experience levels of ________________ employees has only improved since the company’s initial Iraq deployments. Chain of Command and Military Interaction Transition from CPA to DOS ________________ noted that since the dissolution of the CPA and subsequent handover of contracts to DOS, that ________________ project managers report to either the DOS regional security officer or assistant regional security officer for each site and/or contract. Consequently, ________________ now typically coordinates its efforts with DOS. DOD regional military commanders do not have authority ove ________________ employees, other than to provide primary direction such as designated no-go regions. ________________ Interaction with Military ________________ noted that DOD has been very helpful in terms of providing after action MEDEVAC and removal of vehicles to ________________ nd its employees. In turn ________________ assisted the military with medical support at some of its sites because the company often has higher qualified medical personnel than DOD. As far as receiving military support during an actual incident, ________________ tated this was improbable, given the short time frames associated with such activities. He did note tha ________________ has developed a robust intelligence network throughout Iraq, and this information is formally shared with DOS, which then passes it along to DOD. Interoperability between PSCs and the military remains limited due to the vary missions of these entities and the fact-that neither group shares frequencies, encrypted radios or secure communication devices. In addition, because ________________ is embedded on military installations, its employees have developed active formal and informal and informal information sharing with regional DOD personnel. While on these installations ________________ mployees are generally under the regional/local DO commander’s procedures and regulations. ________________ stated that this situation causes some tension between DOS and DOD, but such issues always get worked out, despite confusion related to everyone and every entity having different policies. This situation becomes even more complicated when military troop rotations occur and new personnel arrive and modify or implement new rules and regulations. The Project and Contracting Office’s (PCO) Regional Operations Center (ROC), Movement Coordination, and Communication Movement Coordination ________________ that ________________ oordinates personal security detail movement and personnel information with its client, DOS. The DOS regional security officer is responsible for conveying these movements to the military (but ________________ often informally notifies the military, as well). DOS maintains a list o ________________ ersonnel by site location that is updated daily based on Page 4 Record of Interview reports the company provides to DOS. After-action reports are also submitted to DOS, who may or may not pass them along to the military. ________________ oted. Interaction with PCO/ROC With regard to the PCO, the company is registered and shares information with this office directly, by e-mail, or by telephone, but it does not coordinate movements through the PCO. For its part, the PCO relates intelligence to ________________ through a website, e-mails, and telephone (if a _______________ mployee calls the PCO). The PCO is not an actionable organization. noted tha _______________ has not participated in the ROC and stated that such a system does not work because _______________ reports to DOS, not DOD. ROC information provided to _______________ well after the fact and often through the ROC website and/or e-mails, which is not effective because mos _______________ mployees do not carry Blackberries (wireless communication devices). Likewise, it would be difficult for _______________ o provide movement information to the ROC due to the fluid situation in that country, which causes timelines to be rarely followed. The lack of interoperability between the different contractors working in Iraq and the military also makes movement coordination difficult. Good working relationships have developed with the military, however, which facilitate low level coordination with DOD. _______________ View _______________ contract Performance _______________ stated tha _______________ does not believe tha _______________fense Services has been successful in its mission. He noted that because PSCs are private companies registered with the Iraqi government, there is no requirement to work with _______________ d many companies have chose to work independent _______________ Additionally _______________ tated that contractors do not feel confident in sharing information with a competitor. Interaction with the Iraqi Government _______________ Registration with Iraqi Ministries of Trade and Interior _______________ stated that _______________ registered with the Iraqi Ministry of Trade (MOT), and its application has been submitted with the Iraqi Ministry of the Interior (MOI). Some difficulties were encountered related to the $25,000 bond requirement for MOI registration, but resolution was reached, and a U.S. bank is currently in possession of this bond. _______________ pected the bond to be processed shortly to be processed next week by MOI and for _______________ registration to be processed shortly thereafter. She stated _______________ DOS contractor, was very helpful t _______________ in expediting this process. MOT and MOI Implementation of CPA Memorandum 17 _______________stated that over time, _______________ believes MOT and MOI will have the systems in place to support the efforts of CPA Memorandum 17. However, the current overall lack of an enforced legal system, stable security situation, stable banking system, and ratified constitution makes the situation challenging. In addition, _______________ noted that the CPA turned over sensitive weapons card and registration documents related to PSCs and their employees to the new Iraqi ministries. These documents Page 5 Record of Interview contain names, addresses, and fingerprints of every PSC employee in Iraq, and their turnover to the Iraqi government was probably a violation of the 1974 Privacy Act, he said. Employees and Recruitment _______________ ovided copies of five (5) slides to GAO detailing _______________ employee demographics and recruiting issues (see Workpaper #C-TC-2H). _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ Other Issues _______________ has encountered no issues related to transferring security clearances. Every _______________ mployee sent to Iraq from the U.S. has at least a secret clearance. (Top Secret clearances are not required under their contracts.) Page 6 Record of Interview PSCs are in a state of redaction (not consolidation). Only “appropriate” firms are surviving _______________ ated. The PSC Working Group convenes monthly as a private organization. Every PSC in Iraq is a part of this group. _______________ is not a financial contributor, however. This Group seeks to reduce “blue on blue” incidents (between PSCs) and “green on blue” incidents (between military and PSCs), but it has not proven effective according to _______________ The Overseas Advisory Council (OSAC) is a DOS program that provides general area travel information. _______________ has not found it to be very useful, and the Council has not convened a meeting for several months now. On behalf of _______________ offered to meet with GAO again to discuss specific issues facing PSCs related to ITAR. _______________ emains the point of contact for GAO. Page 7 Record of Interview

Read the full article →

David Isenberg: The GAO Transcripts, Part 7: It All Depends on What One Means by "May"

July 4, 2010

This is the seventh installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .” This transcript describes Department of Defense efforts back in 2004 to manage private security contractor personnel in contingency operations. Of course management is one thing; protection of contractors is something else, as this language makes clear, “in regards to military support of private security contractors in the case of an attack, the policy will probably read: “military assistance may be available to the contractors;” therefore, there is no “real (legal) committal” for the military forces to support the contractors.” Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Ryan J. Ona Index: Date Prepared: July 13, 2004 DOC Number: 1135726 Reviewed by: Carole Coffey 7-16-04 DOC Library: Goal 2 Job Code: 350544 Record of Interview Title Management of Contractor Personnel in Contingency Operations Purpose To document existing DOD and inter agency policies and changes in policies on private security contractors Contact Method Face-to-Face Contact Place Pentagon, Arlington, VA Contact Date July 7, 2004 Participants Steve Sternlieb, Assistant Director, DCM Carole Coffey, Analyst In-Charge, DCM Ryan Ona, Intern, DCM Comments/Remarks: We spoke to __________ during a visit to the Pentagon, Arlington, VA to discuss the current status of the DOD directive and interagency policy memorandum regarding management of private security contractor personnel in contingency operations. The new DOD directive and instruction, “Management of Contractor Personnel During Contingency Operations” and “Procedures for the Management of Contractor Personnel During Contingency Operations” respectively, are currently “draft” DOD working papers. __________ provide us with copies of the draft instruction (version: June 15, 2004) and the draft directive (version: June 21, 2004). The __________ told us that the recommendation for DOD-wide guidance for using contractors on the battlefield which was in GAO 03-695 Military Operations: Contractors Provide Vital Services to Deployed Forces but Are Not Adequately Addressed In Military Plans (June 2003) was the driving force behind both the instruction and directive. Originally, the Coalition Provisional Authority (CPA) in Iraq expected the military forces to provide force protection for all contractors whether they were working for the military or the CPA. As reconstruction began, the CPA realized that DOD could not reasonably provide security for over 2500 sites. Since then, typically all DOD contractors (such as LOGCAP) would have the military provide force protection where as CPA contracts (basically, any agency other than DOD) would have the contractors provide their own force protection (though private security contractors). In response to (1) GAO’s June 2003 report on contractors on the battlefield, (2) the realization that DOD is increasing its use of contractors, and (3) the National Defense Authorization Act for Fiscal Year 2005 (H.R 4200), DOD is finalizing a directive and instruction that will provide guidance on managing contractor personnel during contingency operations. The currently drafted directive states that DOD policy is to “provide force protection of contractor personnel. [... ] Geographic Combatant Commanders shall provide force protection through military means, commensurate with the level of force protection provided DOD civilians, unless valid contract terms place that responsibility with another party. [... ] Contractor personnel may only be armed for self-defense or security pursuant to reference b [which is the aforementioned currently drafted DOD instruction]. Basically, unless otherwise written in the contract, DOD will provide force protection for contractors. Unlike old DOD guidance, the new directive does specifically allow for exceptions to Page 1 Record of Interview be made in the contracts; which would allow armed, private security contractors rather than military forces to provide security. Furthermore, the directive explicitly states that “arming contractor personnel for [reasons] other than self-defense or security during contingency operations or within an area of international armed conflict creates an unacceptable risk that contractor personnel could be viewed as unlawful combatants…” Plainly, contractors du contingency operations can only be armed for “self-defense and security.” The currently drafted DOD instruction repeats many of the same policies (as the directive) regarding the provision of force protection for contractors and actual authorization for the possession and use of weapons by contractors. It also explicitly states that “contracts for security services shall not be used for direct support of combat operations where hostilities are ongoing or imminent. In addition, contract security will not be authorized to guard U.S. or coalition military supply routes, military facilities, military personnel or military property.” According to __________ there is also an Interagency Policy Memorandum that will address contractors and inter-government agency relationships and coordination with regard to contractors in Iraq. The Interagency Memo apparently will draw much of its policy and wordage from existing CPA orders, regulations, and memorandums. The DOD directive and instruction and the Interagency Policy Memorandum address “different phases of the operations,” respectively. __________ The DOD directive holds up to the point of ‘nation building’, which is when other [government] agencies get involved. The interagency memo addresses the ‘country rebuilding’ [portion] of the operation.” It is important to note that the drafted interagency policy memorandum currently written only to address the operations in Iraq. According to __________ major challenges in determining policies to manage contractors in contingency operations are the legal issues surrounding the “classification of contractors” (i.e. civilians vs. combatants). As contractors have more say in the actual contracts, in effect having more effect on regulations governing the contractors, the “gray area” in classifying [private security] contractors has the potential to grow. According to __________ currently, the term “contractors” includes “everyone” (including all subcontractors who can sometimes be foreign nationals). Possibly, different tiers of contractors need to be defined. With regards to command and control of private security contractors, in future operations, contractors will have to “register” themselves with in-theater military forces so that the contractors will have mere “visibility” to the military . Furthermore, a “security operations center will be set up as an information dispatch center to alert contractors of dangerous areas and “hot spots” in the theater. According to __________ in regards to military support of private security contractors in the case of an attack, the policy will probably read: “military assistance may be available to the contractors;” therefore, there is no “real (legal) committal” for the military forces to support the contractors. __________ lso provided other points of contact: Page 2 Record of Interview _______ ________ He also mentioned that after-action reports of contingencies involving private security contractors in Iraq would probably be available through the Joint Forces Command (JFCOM). Page 3 Record of Interview

Read the full article →

David Isenberg: The GAO Transcripts, Part 6: Coordinating PSC Activities in Iraq

July 4, 2010

This is the sixth installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .” This transcript describes the coordination of private security details. Although this interview is not about any one private security contractor the PSC that had overall responsibility for doing so is Aegis Defence. Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Kate Walker Index: Date Prepared: December 2, 2004 DOC Number: 1220820 Reviewed by: Carole Coffey 01/0705 DOC Library: Type library name here Job Code: 350544 Record of Interview Title Interview with _________ Purpose To learn about PCO PSC coordination and th _________ Contract Contact Method Conference Call Contact Place GAO HQ and Baghdad, Iraq Contact Date December 2, 2004 Participants _________ Bill Solis, Director, DCM, GAO Steve Sternlieb, Assistant Director, DCM, GAO Carole Coffey, Analyst-in-Charge, DCM, GAO Kate Walker, Analyst, DCM, GAO Tim DiNapoli, Assistant Director, ASM, GAO Gary Delaney, Analyst-in-Charge, ASM, GAO Comments/Remarks : _________ is the _________ or the Iraq Project and Contracting Office (PCO), formerly know as the Coalition Provisional Authority. The PCO is responsible for all activities associated with the program, project, asset, construction and financial management of the reconstruction effort in Iraq. _________ _________ security contractor for the PCO. _________ provides private security detail (PSD) for the PCO director and key members of the PCO staff. ________currently has 23 vehicle escort teams and static guards in one location. Within the PCO are seven operational centers (a National Center known as the Reconstruction Operations Center (ROC) and 6 regional ROCs) that provide situational awareness, information and intelligence, and serve as an interface between the military and the contractors including PSCs in Iraq. The national operational center is located in Baghdad at the PCO headquarters and the regional centers are located in Mosul, Tikrit, Ramadi, Baghdad-Camp Victory, Hillah, and Basra. director and key members of the PCO staff. operates these centers under the same contract used to provide security to the PCO. Currently ________ s is about 90% staffed. ________ sent us a brief giving the overview and readiness status of the cell. Genesis of the PCO and Contractor Participation The PCO was created in anticipation that the State Department/Department of Defense (DOS/DOD) Interagency Memorandum would be signed. The DOS/DOD Interagency Memorandum called for the creation of an entity to oversee movement and intelligence sharing in Iraq – the PCO. Currently, contractors participate with the PCO on a voluntary basis. ________ reports that the PCO is seeing increased participation every day. If the Interagency Memorandum is signed, it will require contractors to register with the PCO. ________ said that in some cases, contracts would have to be revised. ________ does not know if all new contracts include provisions for registration with the PCO. Contractors were informed about the PCO through a series of meeting with each of the prime contractors’ security managers. When asked about the concerns conveyed by several contractors we interviewed ________ conjectured that the contractors we spoke with might have viewed ________ a competitor. ________ reported that the CPA-IG had conducted an analysis of the contract award. Page 1 Intelligence Sharing The G-2 at the PCO gets information from the MNFI G-2. This information is then sent to the ROC where, once it is cleared, is sent to.PSCs for their use. Contractors can get information about movement security, etc. from the PCO via the ROC. Communication There are currently three methods for real time communication among PSCs and PCO. 1. Land-lines 2. HF Radios–direct link communications with regional operation centers 1 3. Internet, Centrix, SIPRnet To request aid or communication with the ROC or the regional operations centers, PSCs must radio their own headquarters’ dispatch center and that dispatch center would then contact the ROC. The ROC will then contact the regional operations centers if necessary . PSCs can contact the regional operation centers directly, but ________believes this to be a complicated process. He also doesn’t believe that the current method of contact causes too much delay . The PCO also has transponder units that plug into security vehicles. These units provide the location of the vehicle every four minutes and also have a panic button in the boxes that can alert regional operation centers if there is an emergency. ________said, however, that there were only a certain number of boxes that contractors could check out. Future PCO contracts will require that all prime PCO contractors purchase these transponder units. Transponders can be acquired on the commercial marketplace. This is not a problem; however, because typically only transmittal equipment is available in the market and translating equipment is proprietary to specific companies. In an emergency, vehicles or convoys without these transponder units can contact the PCO via cellular phone, but ________indicated that cellular phones were often unreliable in Iraq. In addition to contacts at the PCO, contractors are also given contact numbers for the embassy and local military operation centers. ________informed us that there is also a password protected website that ________ maintains that is also used to disseminate information. ________ is unaware of any communication between the PCO and OSAC. ________ encourages informal relationships between contractors, PSCs, and the military, but thinks that the PCO should be monitoring these relationships ideally. Movement Coordination A recent policy has been developed for handoffs between division boundaries, but________ is unable to verify that the policy has been implemented. ________ scribes the policy concept as one of a series of checkpoints through which convoys must pass. The checkpoints occur before the boundary changes. Contractors are supposed to get their march credits approved by the military before they begin their movement. March credits are then to be passed on to relevant division commanders. Page 2 QRF Should a PSC need help, the ROC is responsible for arranging quick reaction force (QRF) aid. After a PSC contacts the ROC and indicates that they need help, the PCO would in turn contact the regional operation centers. The regional reconstruction operation centers (RROCs) are co-located with the major subordinate commands’ operations centers, so the moment the ROC contacts the RROC, the G-3 can be contacted. QRFs are provided by the military on a not to interfere basis ________ reported that the QRF usually works, but there have been some instances were QRF has been delayed. After action reports are written about these incidents only when something goes wrong and there is a lesson-learned type scenario. Database of Contractor Personnel If the Interagency Memorandum is signed, the PCO will be responsible for collecting information on contractors. The PCO is not sure how to collect this data The PCO thinks that the Army’s Logistics Support Element (part of the Army Material Command) would best be able to collect information on DOD contractors. Weapons The types of weapons contractors may use are listed in CPA Order 3. Version seven of the Interagency Memorandum would make the PCO responsible for maintaining a list of those Contractors who have been approved to issue weapons and ammunition under Section III of the interagency guidance. ________ knows of several PSCs that have attempted to register with the Iraqi Ministry of Interior (MOI) and Ministry of Trade (MOT), but have found that the MOI and MOT do not have to capability to register them. Interagency Memorandum ________ would like to see the Interagency Memorandum signed. While the Memorandum isn’t perfect, he thinks the memorandum can be modified as necessary. The ________ is concerned that the “Interagency Memorandum” has been reduced to “Interagency Guidance” because he believes that guidance does not carry the same weight as a memorandum. The ________ believes that if State and DOD can not come to an agreement on the guidance, DOD should issue the guidance on its own. The ________ said that once the guidance is issued, MNFI will issue an order to the major subordinate commands in Iraq to provide the military assistance laid out in the agreement. Current Status in Iraq According to ________ , regional operation centers are not fully integrated and are not fully functional. He believes they will be in the near future. Commanders are not fully informed about PSCs. ________ is trying to educate commanders to get them to see PSCs as “blue forces.” In doing so, ________ hopes to convince commanders that PSC need to be given the same military support as other military units in Iraq. ________ says that he has personally briefed each division commander of PSCs and their issues. Chain of Command While the PCO is under the COM command, it is operating under CENTCOM Order #1. The SJA at CENTCOM, however, told ________ hat CENTCOM Order #1 is not applicable because the PCO falls under COM command. ________ would like the PCO to fall under MNFI for security matters. Page 3 Recommendations ________ only recommendation would be to get the Interagency Memorandum signed. He believes that even if the memorandum were less that perfect, it still would give authorities something to modify and improve. He thinks that there needs to be some overarching guidance on private security contractors. ________provided us with the following documents: o A ROC Overview o A Brief describing the PSC Association o The latest draft of the Interagency Policy Guidance o Contact Information for Lawrence Peters o ROC Daily Briefing o A Security Operations Briefing Page 4

Read the full article →

Jan Phillips: Sparking the Collective Imagination

June 30, 2010

I read about an executive who had a real flat response from his employees when he put out the question “How can we best the best company in the world?” There was a long pause and a deep silence in the room until a worker said, “How about this: how can we be the best company FOR the world?” And that was the question that charged everyone’s imaginations and started everyone thinking creatively. It’s not about what we can get. It’s more about what we can give. And it’s our giving that opens the door to all the abundance we are going to receive in the world, as a person or a corporation. Just as a battery is charged by the union of positive and negative forces, just as a child is conceived by the union of a male sperm and female ovum, just as a thought issues forth from the union of right and left brain, so does original thinking emerge from the practice of joining “us” and “them” into a “we.” Our imaginations are the most potent engines of change in the universe. There is no doubt that we can evolve ourselves forward once we replace our dualistic thinking with thought processes that re-pair the opposites and cause convergence. In this matter, emotions are essential. They are our guide, our body’s means of instant messaging to the brain. Yes, this decision is wise. No, that choice is unwise. Our bodies are hardwired for survival of the species, and if we listen deeply to them, if we are wise enough to trust the feelings they emanate on our behalf, then we will find the clarity necessary to make inspired choices that are as good for the whole as they are for the one, which is an absolute prerequisite for thought leadership today. And because the work of transforming our own thought processes is so evolutionary an act, it requires the total engagement of body, mind, and spirit. This is not business as usual. This is reorienting to a new star. We are organisms in a constant state of flux, exposed to an ever-changing environment, and the more we inquire into our own state of consciousness and notice the evolution of our own ideas, the more aware we become of our place in the family of things. As a civilization, we are shifting out of an industrial, assembly-line mindset of isolated units into an organic, knowledge-based network of communities. There is a tectonic shift of consciousness occurring and an evolutionary tendency away from the mechanical and back toward the natural. This may be seen as Mother Nature’s mid-course correction. As the thinking neurons of the planet, biologically oriented toward survival, we are finding ways of connecting and communicating with unimaginable speed and precision. Someone has calculated that we can globally transmit the contents of the Library of Congress across a single fiber optic line in 1.6 seconds. Science and nature have announced their engagement. It is not the task of creators to know the answers, but to articulate the questions we face as a people and to call us together to create our solutions. This is the potential of corporate America–to re-think their structures and processes in such a way that they become furnaces of inspiration, centers of creative ingenuity, arbiters of a culture conscious enough to bring the whole human family into the picture. The profits from such an endeavor–materially, culturally, spiritually–could overwhelm the most skeptic imagination. Thought leaders do not think in terms of “me” and “mine.” They think in terms of “we” and “ours.” They do not think outside the box, they live outside the box. No matter what their address, they think of themselves as global citizens, responsible to the earth, responsible to the human family, and aware that their well-being is tied to the well-being of others. They are balanced and in tune with their own inner life, and they are awake to the immense possibilities that erupt when the inner lives and imaginations of their colleagues are fully engaged. These are the kinds of alliances that can emerge when we change our questions from “What can we gain?” to “What can we give?” Businesses have always been on the cutting edge of creative innovation, and finding ways of bridging their bottom line concerns with the basic needs of the poor opens up whole new avenues for win-win solutions. There is a tremendous opportunity here for commercial enterprises that balance commerce with compassion, that reframe “the poor” from a category of charity to a category of collaborator, and that imagine new ways of working with and in these communities so that everyone benefits. -from The Art of Original Thinking

Read the full article →

Republicans Boost Attack on Kagan Memos for Marshall

June 11, 2010

By Laura Litvan June 10 (Bloomberg) — Republicans stepped up criticism of U.S. Supreme Court nominee Elena Kagan , saying memos she wrote as a law clerk for Justice Thurgood Marshall are evidence of judicial activism. Kagan’s clerkship for Marshall in 1987 and 1988 will be a focus of her confirmation hearings, said Senator Jon Kyl of Arizona. He is a member of the Judiciary Committee that will hold hearings on Kagan’s nomination beginning June 28. Her notes to Marshall on which cases the court should review “reveal time and time again an effort to reach a certain result in a case,” Kyl said. Senator Jeff Sessions , ranking Republican on the Judiciary Committee, also said at a news conference with Kyl today her views were “results-oriented.” Obama nominated Kagan, 50, to replace retiring Justice John Paul Stevens on the nine-member high court. A former dean of Harvard Law School , Kagan is now U.S. solicitor general, the Obama administration’s chief courtroom lawyer. Democrats, who control 59 of the Senate’s 100 seats, want to have Kagan confirmed well before the next Supreme Court term begins in October. Kyl and Sessions pointed to a Kagan memo to Marshall in which she said she was “not sympathetic” to an individual’s claim that the District of Columbia’s firearms law violated his constitutional right to keep and bear arms. Sting Operation The Republicans also distributed a memo in which Kagan said she was “a bit shocked” by a government sting operation that used the U.S. Postal Service to catch child sex predators. She said a federal appeals court may have been right to uphold the operation and the court should abstain from review. But she said Marshall should still order the government to file a legal brief in the matter. “I think it indicates a developing lawyer who has a political bent to their legal work,” Sessions said of the memos. At her Senate confirmation hearing to be solicitor general, Kagan said her memos were intended to reflect Marshall’s views. She called herself a “27-year-old pipsqueak” working for a “90-year-old giant in the law.” Marshall asked his clerks “to channel him and to think about what cases he would want the court to decide,” Kagan said then. “And in that context, I think all of us were right to say, ‘Here are the cases which the court is likely to do good things with from your perspective, and here are the ones where they’re not.’” Leahy’s Response Judiciary Committee Chairman Patrick Leahy , a Vermont Democrat, said in a statement it was “unsurprising” that her law clerk memos “were mindful of Justice Marshall’s longstanding jurisprudence, and that her recommendations to him applied the lens through which he viewed cases and the law.” With no judicial record of Kagan’s to examine, lawmakers want to look into memos and e-mails from earlier in her career. Other documents of interest are from her tenure as a White House associate counsel in 1995 and 1996 and as a deputy assistant for domestic policy from 1997 to 1999, when Bill Clinton was president. The Clinton Library tomorrow will release another 42,000 pages of documents after issuing a first batch a week ago. Employees of the National Archives are helping to review the papers. The documents will include those from Kagan’s time in the White House counsel’s office and related to her 1999 nomination to the U.S. Court of Appeals for the D.C. Circuit, said Susan Cooper, a spokeswoman for the National Archives. A Republican- led Senate never acted on that nomination. A final round of documents will be released next week, including e-mails from her White House tenure, Cooper said. To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

Read the full article →

Financial ‘Reform’ Dodges Big Lessons

April 28, 2010

As congressional partisans wrangle over financial reform, neither side is grappling with a fundamental lesson learned from an investigation into the causes of the financial crisis. A recent Senate inquiry offered a rare peek into the secret world of bank examiners. What it revealed was that regulators had stopped regulating. In the case of Washington Mutual, regulators found all sorts of trouble, from lax lending standards to high delinquency rates on loans, and yet failed to prevent the biggest bank failure in history. Starting in 2003, examiners for the Office of Thrift Supervision found 545 problems at the bank. But the agency left it up to WaMu to track its own compliance with examiners’ recommendations, and took no formal action against the bank until it was too late. Even when problems grew so severe that the OTS should have taken strong enforcement action — and let the public know — the agency did nothing. In a revealing e-mail to WaMu’s CEO, Kerry Killinger, agency director John Reich said of OTS’ failure to demand remedies that “if someone were looking over our shoulders, they would probably be surprised.” A central lesson from the failure of Washington Mutual was that a system set up to prevent what happened utterly failed. For all the talk of reform, Congress isn’t addressing the problem of regulators who fail to do their job. Regulators routinely deferred to bankers and market forces and engaged in petty squabbles over who had authority over the bank. So the question now is: Can Congress fix ineffective regulators themselves? “It’s not only feeble enforcement, it is pitiful enforcement,” Sen. Carl Levin, (D-Mich.), chairman of the subcommittee on permanent investigations said at an April 16 hearing when scolding Reich, who has since retired from the OTS. In a bipartisan moment, Sen. Tom Coburn (R-Okla.) took it even further. “I have concluded that investors would have been better off had there been no OTS,” Coburn said. “OTS said everything was fine when, in fact, OTS knew everything wasn’t fine and wasn’t getting it changed.” ‘Conflict of Interest’ OTS’s own fortunes were heavily tied to Washington Mutual’s. The bank paid fees that amounted to 15 percent of OTS’s budget – more than any other financial institution under its watch. So it was in the OTS’s interest to make sure WaMu survived as a thrift, a bank that specializes in home mortgages. The financial reform bill emerging in Congress would fold the function of OTS into another agency that oversees national banks, the Office of the Comptroller of the Currency. That would eliminate a practice in which some banks could pick and chose their regulator. But as Coburn pointed out it an interview with the Investigative Fund, the reform bill still would compel regulators to depend on the banks they supervise for revenue. “They haven’t addressed that issue” in the financial reform bill, Coburn noted. “You have to end that conflict of interest.” Another issue highlighted by the Senate subcommittee investigation was deference to the market to regulate. Emails and reports turned up in that investigation show regulators would allow unsafe practices as long as shareholders and investors were happy. For example, an OTS examiner wrote in an e-mail to his boss in 2005 – three years before WaMu’s collapse — that he had problems with WaMu’s lax lending standards, because it could lead to bad loans. Yet, he added that as long as WaMu was profitable, “it has been hard for us to justify doing much more than constantly nagging (okay, “chastising”) … since they have not been really adversely impacted in terms of losses.” The reluctance to tell bank executives what to do so long as they reported profits came despite examiners’ own concerns in that year that a booming housing market was “masking” potential losses from shoddy loans — what would have been the first signs of a coming mortgage meltdown and financial crisis, and key opportunities to prevent it. Persistent ‘Liars’ Loans’ An easy target of the hearing was stated-income loans, mortgages that didn’t require borrowers to show proof of their income. Within the industry, these became known as “liars’ loans” because income could so easily be fabricated. Regulators knew about liars’ loans, and the trouble that might ensue. But they permitted them. In private emails, OTS’ chief examiner overseeing WaMu called stated-income loans “a flawed product that can’t be fixed and never should have been allowed in the first place.” Regulators could have banned stated-income loans. Reich said he didn’t because bankers persuaded him that stated-income loans performed no worse than other loans. But stated-income loans became an invitation for fraud and led to high default rates. What’s more, stated-income loans were once used sparingly but during the mortgage frenzy, 90 percent of Washington Mutual’s home-equity loans and more than 50 percent of its subprime loans were stated income. Now that the world knows that stated-income loans are shoddy loans have regulators gotten rid of them? “They certainly are frowned-upon,” testified FDIC examiner George Doerr. “There’s nothing to prevent them in the rules today.” FDIC chair Sheila Bair said she wouldn’t oppose getting rid of them. But she hasn’t. The problem, she says, is that if you forbid federally insured banks from giving loans to people who can’t document their income, they could lose business to unregulated lenders. So fears about regulations putting banks at a competitive disadvantage remain strong even in the wake of the financial crisis. Regulators did ban stated-income loans for subprime loans. But that was in late June 2007, just as Wall Street was shutting down the subprime market completely. Investors refused to buy the bad loans anymore. And banks refused to make them and hang onto them. In that case, the market took stronger action than the regulators. In 2006 when regulators issued a new “guidance,” urging banks to make sure borrowers could repay high-risk loans before approving them, OTS ignored the guidance for a year because Washington Mutual argued it was going to lose business as a result. Some in Congress aren’t sure how to address this problem. “The culture of regulators driven by heir ideology is a very tough one to legislate around,” said Steve Adamske, spokesman for the House Financial Service Committee . Sen. Sherrod Brown, D-Ohio, said, “You can’t always count on the regulators, especially in the administration like the one before this one. So we need more teeth in the bill.” No Room for a Rival While regulators treated Washington Mutual with kid gloves, they put on boxing gloves when dealing with each other. While the OTS had an interest in keeping Washington Mutual alive for its fees, the FDIC ultimately had an interest in making sure Washington Mutual was sold before it had a chance to fail. The FDIC would have to pay for Washington Mutual’s losses if the bank failed outright, and Washington Mutual was big enough to wipe out the FDIC’s insurance fund. An FDIC analysis determined that WaMu’s demise would have wiped out $41 billion of the insurance fund’s $45 billion. While rivalries between banking agencies are well-documented, these competing interests sometimes played themselves out in juvenile stunts. The FDIC was the “backup regulator” of Washington Mutual but still had a dedicated examiner assigned to the bank. Even so, for four months in 2007, the OTS as primary regulator wouldn’t give the FDIC examiner a chair or a desk in the library where WaMu kept its records for inspection by regulators. When Senate investigators privately asked an unidentified senior FDIC official why the agency wasn’t tougher and had failed to take action on its own, the official said such behavior would be viewed by other regulators as an “act of war” and could hurt relationships among agencies. That was precisely the atmosphere in early August 2008, when Bair asked Reich, her counterpart at OTS, about discreetly checking with other banks to see if they’d be willing to buy WaMu whole after a seizure. There had already been a run on the bank. This set Reich off, who lectured Bair in an e-mail , “I should not have to remind you the FDIC has no role until the (OTS) rules on solvency…You personally, and the FDIC as an agency, would likely create added instability if you pursue what I strongly believe would be a precipitous and unprecedented action.” Reich threatened to expose Bair publicly. But weeks later, with WaMu on the verge of running out of cash, the OTS concurred with Bair and WaMu was sold to JP Morgan Chase. And now? This same sort of agency rivalry could show up in a reformed system. The Senate bill creates a “bureau” of consumer financial protection to prevent predatory lending practices. But the bureau, a political hot potato, is given limited power to make rules. For example, any member of a special oversight council, which includes other regulators, can temporarily set aside the bureau’s rules and the council can overrule them with a two-thirds vote. The bureau is even required to coordinate its examinations with those of other regulators, even state regulators. And if the findings conflict with the other regulator, the banks can force the two regulators to issue a joint decision. The hearings, which followed an 18-month investigation, left Levin puzzled as to what to do. If regulators can’t pass tough regulations, should Congress do it for them? Do we need a law, he asked, to outlaw stated income loans and to require banks to make loans only to people who can afford to repay them? But those are just some of the questions. Coburn alluded to the other, huge one: Even if Congress passes a financial reform law, will regulators, operating in their secret world, fail to enforce it? Congress should have been watching the regulators more closely, he said. Maybe right now, he added, more needs to be learned about what went wrong behind the scenes — and how to really fix it. Follow the Huffington Post Investigative Fund on Twitter or fan us on Facebook . Do you have information about this story? Send us a tip or submit a correction . REPUBLISH THIS STORY FOR FREE: The Huffington Post Investigative Fund licenses its content through Creative Commons. We encourage you to republish our stories in full with proper attribution.

Read the full article →

Fortune’s Stanley Bing: Good Census Makes Good Neighbors

March 25, 2010

When I was a kid, there was a concept that was taught to us in school. It was called Citizenship. It was part of an ideal of cordiality and common interest that held us together as a nation. Of course, much of it was bushwah. The world back then was just as full of injustice, prejudice and rotten losers who didn’t care about anyone but themselves as it is today. Perhaps we were just more cordial about it. There were several aspects to citizenship that were drummed into us. First, it carried with it a host of benefits. You were an American. Americans were part of a great, ongoing experiment that had something to do with personal freedom, opportunity for all, hot dogs and baseball, education as a common right, and something about lifting the lamp beside the golden door to all the tired and poor. No matter how we might disagree on a host of things, we were all citizens, and that, along with television, bound us together. Citizenship, it was quickly pointed out, came with certain responsibilities. You had to vote, for instance, when the Mayor, Governor, or Uncle Sam told you it was time to do so. Those who didn’t vote were not being good citizens. This being America, we weren’t going to punish them for not voting. But we didn’t appreciate them, either. As a citizen, you also were supposed to bring your library books back on time, obey rules about crossing the street and spitting in public places, not run people over on your bike, even if they were crossing in the middle of the block, and eat a good breakfast every day. These weren’t onerous obligations. They were just part of good Citizenship. And exercising them, it turned out, gave one a certain good feeling that was unlike any other. It was a little like collecting money for Unicef at Halloween, particularly if you actually gave the money you got for that exercise to the teacher on November 1. But it was a quieter feeling than that. I still get it when I vote, even though sometimes I feel like I’m choosing between a block of stinky cheese and an old sock whose mate was long ago lost in the laundry. This brings us to the Census form that came in the mail last week. It had been sitting on my kitchen table for a while and this morning I filled it out. It made me feel quite good in a way that transcends the kind of glow I get when the stock goes up a few points, or somebody tells me I look thinner. For a few minutes, as I checked off the boxes that told my Government a little bit about myself, I felt like I was part of the big collective American people in a way I haven’t for some time. For just a few minutes, I forgot about Wall Street and health care and unemployment and tea parties and people who think that those who work for social justice are Nazis, for God’s sake, or how the President is doing in the polls or whether Twitter is the new Facebook or vice versa. I felt like I was doing something nice with the rest of my neighbors. I’m aware that not everybody sees it this way. A few of my friends looked at me like I was slightly demented when I started talking about this stuff. And last year some idiots actually killed a census worker in what I guess they thought was some kind of twisted, anti-Government patriotism of some kind. Or maybe he just stumbled on their still. But me, I liked filling out my census form. Actually, it made me wonder what other good citizenship things are going on out there for me to do. Once you get started, the possibilities seem kind of endless. I’ll bet you could come up with a few. Although this might not be the proper venue for that discussion, being concerned with business and free enterprise and all.

Read the full article →

Swine Flu May Have Infected Every Second Schoolchild in U.S., Study Finds

February 22, 2010

By Jason Gale Feb. 22 (Bloomberg) — Swine flu may have infected at least 63 million people in the U.S. last year, according to a study in Pittsburgh, where almost every second schoolchild probably caught the pandemic virus. Blood tests on Pittsburgh residents found 45 percent of people aged 10 to 19 years had antibodies against the new H1N1 flu strain . About 22 percent of people across all groups developed immunity to the virus by early December and a quarter of those born in the 1920s may have already had protective antibodies before the pandemic resulting from prior flu infection, researchers at the University of Pittsburgh found. The findings, reported online yesterday in the Public Library of Science , suggest a fresh wave of swine flu infections isn’t likely unless the virus mutates or people become more susceptible to infection. A World Health Organization advisory panel is holding a teleconference tomorrow to discuss whether the first influenza pandemic in 41 years has peaked. “With current estimates of seroprevalence and continued increases in population due to vaccination, a significant change in viral antigens or a change in population immunity would be required for further disease spread,” Ted Ross, associate professor of microbiology at the university, and colleagues wrote. “We cannot rule out the possibility that geographical pockets of limited immunity may be present in which a third wave may yet occur.” Symptom-Free Cases At least 15,921 people have died from swine flu as the fast-moving pandemic spread to 212 countries and territories since its discovery in North America in April, the WHO said in a Feb. 19 statement . The global tally underestimates the actual number as many deaths are never tested or recognized as influenza related, the Geneva-based agency said. In yesterday’s study, researchers looked for infection- fighting antibodies against the 2009 pandemic flu strain in 846 anonymous blood samples collected in November and early December from people in southwestern Pennsylvania’s Allegheny County ages 1 month to 90 years. The tests identified people who caught the virus, including those who didn’t develop a fever, cough or other flu-like symptoms. The researchers compared the results against tests on blood samples collected in 2008, of which 6 percent contained antibodies that protected against swine flu, probably as a result of infection from a related influenza strain. Children and adolescents in the 10- to 19-year age group had the highest prevalence of swine flu antibodies, while 29 percent of blood samples from children younger than 9 years tested positive. Residents in the 70- to 79-year age group had the lowest prevalence rate of 5 percent. When the researchers extrapolated their findings across the county’s 1.2 million residents, they found swine flu antibodies in 21.5 percent of people, including more than 70,000 school-age children. “Extrapolating these results further to the entire US population, we estimate that 63 million persons became infected in 2009,” the authors wrote. To contact the reporter on this story: Jason Gale in Singapore at j.gale@bloomberg.net

Read the full article →

Swine Flu May Have Infected Every Second Schoolchild in U.S., Study Finds

February 22, 2010

By Jason Gale Feb. 22 (Bloomberg) — Swine flu may have infected at least 63 million people in the U.S. last year, according to a study in Pittsburgh, where almost every second schoolchild probably caught the pandemic virus. Blood tests on Pittsburgh residents found 45 percent of people aged 10 to 19 years had antibodies against the new H1N1 flu strain . About 22 percent of people across all groups developed immunity to the virus by early December and a quarter of those born in the 1920s may have already had protective antibodies before the pandemic resulting from prior flu infection, researchers at the University of Pittsburgh found. The findings, reported online yesterday in the Public Library of Science , suggest a fresh wave of swine flu infections isn’t likely unless the virus mutates or people become more susceptible to infection. A World Health Organization advisory panel is holding a teleconference tomorrow to discuss whether the first influenza pandemic in 41 years has peaked. “With current estimates of seroprevalence and continued increases in population due to vaccination, a significant change in viral antigens or a change in population immunity would be required for further disease spread,” Ted Ross, associate professor of microbiology at the university, and colleagues wrote. “We cannot rule out the possibility that geographical pockets of limited immunity may be present in which a third wave may yet occur.” Symptom-Free Cases At least 15,921 people have died from swine flu as the fast-moving pandemic spread to 212 countries and territories since its discovery in North America in April, the WHO said in a Feb. 19 statement . The global tally underestimates the actual number as many deaths are never tested or recognized as influenza related, the Geneva-based agency said. In yesterday’s study, researchers looked for infection- fighting antibodies against the 2009 pandemic flu strain in 846 anonymous blood samples collected in November and early December from people in southwestern Pennsylvania’s Allegheny County ages 1 month to 90 years. The tests identified people who caught the virus, including those who didn’t develop a fever, cough or other flu-like symptoms. The researchers compared the results against tests on blood samples collected in 2008, of which 6 percent contained antibodies that protected against swine flu, probably as a result of infection from a related influenza strain. Children and adolescents in the 10- to 19-year age group had the highest prevalence of swine flu antibodies, while 29 percent of blood samples from children younger than 9 years tested positive. Residents in the 70- to 79-year age group had the lowest prevalence rate of 5 percent. When the researchers extrapolated their findings across the county’s 1.2 million residents, they found swine flu antibodies in 21.5 percent of people, including more than 70,000 school-age children. “Extrapolating these results further to the entire US population, we estimate that 63 million persons became infected in 2009,” the authors wrote. To contact the reporter on this story: Jason Gale in Singapore at j.gale@bloomberg.net

Read the full article →

Viacom Buys Back Soros’s Stake in DreamWorks Film Library for $400 Million

February 11, 2010

By Andy Fixmer Feb. 11 (Bloomberg) — Viacom Inc. bought back a majority stake in the DreamWorks SKG film library from billionaire investor George Soros , taking on $400 million in debt to regain rights to movies such as “Gladiator.” The purchase of Soros’s 51 percent stake in 59 titles, including “Saving Private Ryan,” was completed on Feb. 8, Viacom Chief Financial Officer Thomas Dooley said today on a conference call. The sale occurs as bidders consider offers for film companies including Metro-Goldwyn-Mayer Inc., Overture Films LLC and Walt Disney Co.’s Miramax. Viacom said in March 2006 it agreed to sell the library to Soros in a transaction valuing the films at $900 million. The company reported in later filings that it retained a 49 percent stake. “Library values have clearly come down,” said David Davis , managing partner at Arpeggio Partners LLC, an investment advisory firm in Los Angeles. “And it’s because of the decline in DVD sales in the industry.” Viacom sold the library in connection with its $1.6 billion acquisition in 2006 of DreamWorks LLC, the film studio founded by Steven Spielberg , Jeffrey Katzenberg and David Geffen . Viacom said at the time the library sale would reduce the net purchase price to about $600 million. Soros, who gained broadcast and home-entertainment rights, agreed to sell the stake back after five years. Dooley Comments With today’s announcement, Viacom is repurchasing that stake. “As a result of this purchase, we will consolidate on our books the DreamWorks live-action library as well as approximately $400 million of net debt associated with the venture,” Dooley said on the call. The transaction includes all titles originally sold to Soros in 2006, Viacom said. Michael Vachon , a spokesman for Soros, declined to comment. Viacom, controlled by Chairman Sumner Redstone , fell 25 cents to $28.30 at 3:30 p.m. in New York Stock Exchange composite trading. The Class B shares gained 56 percent in 2009. Lions Gate Entertainment Corp. , the independent film studio, said yesterday it is interested in buying Miramax. Other potential bidders include Summit Entertainment LLC, maker of the “Twilight” movies, and Qualia Capital LLC, a closely held media investment company, a person with knowledge of the situation said yesterday. Miramax is worth about $500 million, Davis said. Seeking Investors Lions Gate is also among the bidders for MGM, the studio that put itself up for sale after failing to pay interest on $3.7 billion in debt, people familiar with matter said last week. Overture Chief Executive Officer Chris McGurk and Chief Operating Officer Danny Rosett are seeking investors to help them purchase the company from John Malone’s Liberty Media Corp., a person familiar with the matter said yesterday. Courtnee Ulrich , a spokeswoman for Englewood, Colorado- based Liberty Media, didn’t return a phone call yesterday seeking comment. Executives at Los Angeles-based Summit and New York-based Qualia were unavailable for comment, a spokesman said yesterday. To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

Read the full article →

Proquest Access FREE

January 6, 2010

The NAR Library’s ProQuest feature allows members to access full-text articles of more than 1500 business publications, for free. Save $120 a year on the Wall Street Journal alone!

Read the full article →

Bikini Babe, Crusoe Paintings by Wyeths Lead $12.6 Million Auction Sales

December 1, 2009

By Katya Kazakina Dec. 1 (Bloomberg) — Paintings by three generations of Wyeths — N.C., his son Andrew and grandson Jamie — are heading to the auction block in New York this week with a combined high estimate of $12.6 million. Twenty-two Wyeth lots are included in the American Paintings, Drawings and Sculpture sales at Christie’s International tomorrow and Sotheby’s on Dec. 3. The priciest, Andrew Wyeth’s melancholy depiction of a long-limbed teenager, may fetch as much as $5 million at Christie’s. It comes from the estate of mutual-fund pioneer Jack J. Dreyfus . Dreyfus, who died in March, bought Wyeth’s tempera-on-panel painting in 1961, a year after its creation. He had loaned it for exhibitions at New York’s Whitney Museum of American Art and the Albright-Knox Art Gallery in Buffalo, New York. Entitled “Above the Narrows,” the work depicts Wyeth’s son Nicky looking over dark, shimmering water, with his luminous white shirt billowing in the wind. N.C. Wyeth’s 14 canvases, dating from 1920 and illustrating Daniel Defoe’s 1719 adventure tale “Robinson Crusoe,” are being sold by the Wilmington Institute Library . Rich with violet and blue shades, the works show the shipwrecked adventurer reading the Bible, chatting with a parrot and meeting his servant Friday. Bikini Painting The artist sold the catalog to the library in 1921 and it’s been there ever since. Cosmopolitan Book Corp. published Wyeth’s illustrations in a 1920 edition of the book. Christie’s is offering each canvas separately, with estimates as low as $150,000 to $250,000 and as much as $400,000 to $600,000. The group is expected to bring in as much as $4.7 million. “We couldn’t conceive of a buyer who’d want them all,” Eric Widing , Christie’s head of American Paintings, Drawings and Sculpture Department, said in an interview. “We tried to make logical decisions based on the quality and drama; the more action, the higher the estimate.” At Sotheby’s , Andrew Wyeth’s “Bikini” (1968) is estimated to sell for $300,000 to $500,000. It depicts the artist’s model, Siri Erickson, standing in a darkened doorway in a yellow, flower-patterned two-piece. Pale and slumping, the dirty-blonde is no “Baywatch” babe. ‘Moon Landing’ The least expensive Wyeth lot up for auction is Jamie’s “Moon Landing” oil painting (1969), showing a wrecked ship’s bollard on a moonlit beach. The estimate is $30,000 to $50,000. The auction houses have lowered estimates because of the tough economic conditions. For some artists they are 10 percent less than two years ago. Others are down 50 percent, Widing said. An exception is John Singer Sargent’s smoldering “Mademoiselle Suzanne Poirson,” estimated to sell for $700,000 to $1 million at Christie’s. The 1884 oil on canvas with a fiery red bow fetched $132,000 in 1985. If the work mirrored the performance of the Mei Moses art index from the end of 1985 to the end of October 2009, its value would now be about $330,000, according to the index’s co-founder Michael Moses. Consigners to the American art auctions include the estates of hotdog maker Oscar Mayer , whose brand is now part of Kraft Foods Inc .; longtime Metropolitan Museum of Art trustee Jane Engelhard; and Ohio collectors Mary Schiller Myers and Louis S. Myers, whose postwar art trove sold for $24.5 million at Sotheby’s last month. The Corcoran Gallery of Art in Washington and the Delaware Art Museum are also selling works to raise acquisition funds. ( Katya Kazakina is a reporter for Bloomberg News. The opinions expressed are her own.) To contact the reporter of this story: Katya Kazakina in New York at kkazakina@bloomberg.net .

Read the full article →

Nassim Nicholas Taleb: Good Bye! The Reappointment Of Bernanke Is Too Much To Bear

November 30, 2009

What I am seeing and hearing on the news — the reappointment of Bernanke — is too hard for me to bear. I cannot believe that we, in the 21st century, can accept living in such a society. I am not blaming Bernanke (he doesn’t even know he doesn’t understand how things work or that the tools he uses are not empirical); it is the Senators appointing him who are totally irresponsible — as if we promoted every doctor who caused malpractice. The world has never, never been as fragile. Economics make homeopath and alternative healers look empirical and scientific. No news, no press, no Davos, no suit-and-tie fraudsters, no fools. I need to withdraw as immediately as possible into the Platonic quiet of my library, work on my next book, find solace in science and philosophy, and mull the next step. I will also structure trades with my Universa friends to bet on the next mistake by Bernanke, Summers, and Geithner. I will only (briefly) emerge from my hiatus when the publishers force me to do so upon the publication of the paperback edition of The Black Swan . Bye, Nassim

Read the full article →

U.S. Said to Target Wave of Insider Trading Cases After Rajaratnam Arrest

October 18, 2009

By Joshua Gallu and David Scheer Oct. 19 (Bloomberg) — Federal investigators are gearing up to file charges against a wider array of insider-trading networks, some linked to the criminal case against billionaire hedge-fund manager Raj Rajaratnam that shook Wall Street last week, people familiar with the matter said. The pending crackdown, based on at least two years of investigation, targets securities professionals including hedge- fund managers, lawyers and other Wall Street players, the people said, declining to be identified because the cases aren’t public. Some probes, like the one that focused on Rajaratnam, rely on wiretaps. Others stem from a secret Securities and Exchange Commission data-mining project set up to pinpoint clusters of people who make similar well-timed stock investments. Investigators have struggled for years to build cases against large institutional investors such as hedge fund managers, who often deflect regulatory queries about suspiciously timed bets, arguing they’re statistical flukes amid their millions of trades. The case against Rajaratnam, built on recorded conversations within a web of alleged conspirators, offers a glimpse of how U.S. investigators are using more aggressive tactics to cut through the blizzard of trading and trace the flow of information. “If you’re going to shoot the king, you better shoot to kill,” said Bradley Bennett , a partner at Baker Botts in Washington who formerly focused on insider-trading cases as an SEC investigator. “If they’re going to take on a billionaire, they need to have the strongest possible cases. The defendant’s own words are the strongest possible evidence.” SEC spokesman John Nester declined to comment, as did Alejandro Miyar , a spokesman for the Justice Department. Intel, McKinsey, IBM Rajaratnam, who founded the Galleon Group hedge fund in 1997, was arrested with five alleged conspirators on Oct. 16 in what prosecutors called the biggest insider-trading ring targeting a hedge fund. Prosecutors said he and his firm reaped as much as $18 million by investing on tips from a hedge fund, a credit-rating firm and employees within companies including Intel Capital, McKinsey & Co. and IBM Corp. He hasn’t yet entered a plea. Rajaratnam’s lawyer, Jim Walden , said last week that prosecutors are misconstruing the evidence against his client and that the case isn’t as strong as prosecutors allege. U.S. senators including Pennsylvania Democrat Arlen Specter have pressed regulators for years to more aggressively scrutinize hedge funds. Some of those concerns were spurred by the SEC’s decision in 2006 to close an insider-trading probe of Pequot Capital Management Inc., once the world’s biggest hedge- fund manager, after investigators said they lacked evidence to bring the case. ‘Blue Sheets’ The SEC later reopened part of the inquiry focusing on whether Pequot abused information from a former Microsoft Corp. employee. In August, Pequot and founder Arthur Samberg , 68, said they may be sued by the agency. Insider-trading claims would be “without merit,” they said. Many cases begin when stock exchanges send the SEC reports on traders who place profitable bets shortly before corporate announcements. Someone who rarely trades may have difficulty explaining later what prompted an uncharacteristic investment. Hedge funds, on the other hand, can more plausibly attribute their windfalls to skill or chance. To overcome that hurdle, the SEC began using computer software about two years ago to sift hundreds of millions of electronic trading records, known as blue sheets, attached to the stock exchange reports about suspicious incidents, according to people familiar with the project. By looking for patterns in the library of data, they identified groups of traders who repeatedly made similar well-timed bets. UBS, Blackstone Once investigators find a cluster of correlated trades, they tap other sources of information to unravel how its members obtain and share tips, the people said. For example, if a group profits on trades before a series of corporate takeovers, the SEC may check so-called league tables listing which investment banks or law firms advised the deals. If one firm was involved in all of them, an employee there may be the source of the leak. The data-mining strategy yielded one of its first cases in February, when the SEC and U.S. prosecutors charged takeover advisers at UBS AG and Blackstone Group LP with taking part in an $8 million insider-trading case, people familiar with the inquiry said. Authorities used a “novel” technique to detect the scheme, the SEC’s lead investigator on the case, Daniel Hawke , said at the time, without elaborating. While the investigation of Rajaratnam didn’t stem from the data-mining project, it did start with the SEC’s identification of suspicious trades, people with knowledge of the case said. Wiretap Probes Continue Investigators developed at least one informant in the ring, who began meeting in November 2007 with agents from the Federal Bureau of Investigation, according to charging documents. Prosecutors also obtained warrants for wiretaps, a level of surveillance typically reserved for organized crime, drug syndicates and terrorism prosecutions. Surveillance during the probe of Rajaratnam, 52, led investigators to other suspects and more charges are likely, people familiar with the matter said. U.S. Attorney Preet Bharara said Oct. 16 the Justice Department will continue using wiretaps to root out insider-trading. The SEC is adopting other strategies to crack difficult cases. SEC Enforcement Director Robert Khuzami , a former federal prosecutor who joined the agency in March, said last week that he’s seeking greater access to grand-jury evidence and wants to expand deal-making and cooperation with informants. “Insider-trading cases are notoriously difficult to prosecute because the evidence is often circumstantial,” said Bill Mateja , a former Justice Department lawyer now at Fish & Richardson in Dallas. “If law enforcement is actively going to go out and target this with covert investigative techniques, I think it’s going to keep people on their toes.” The filed cases are U.S. v. Rajaratnam, 09-02306, and U.S. v. Chiesi, 09-02307, U.S. District Court for the Southern District of New York (Manhattan). To contact the reporters on this story: Joshua Gallu in Washington at jgallu@bloomberg.net ; David Scheer in New York at dscheer@bloomberg.net .

Read the full article →

Ryan Mack: Picking Up the Pieces: 11 Financial Tips for the Unemployed

October 14, 2009

Jobs, jobs, jobs … while the economy seems to be improving, those who have stumbled into the ranks of the unemployed find little comfort in recent statistics (i.e. a slight stabilization in housing prices, better-than-expected corporate earnings, and over 50% returns in the US stock markets since March 9th lows). Even though many economists project slightly positive Gross Domestic Product growth in the US during the third and fourth quarters of 2009, it will still continue to feel like a recession to millions across this country because the labor market is usually one of the last economic indicators to show improvement in an improving economic environment. Just take a walk around my hometown of Detroit, Michigan and ask a random resident if they feel the recession is over. You will certainly hear a resounding, “NO.” With this country on a course to see a double-digit unemployment rate according to many economist estimates, is there any reason to have hope? The answer: absolutely! Whenever I discuss financial tips/strategies for the unemployed, many in the audience respond with bewildered looks coupled with a “huh?!” Or I get the classic, oversimplified response, “FIND A JOB!” This is great advice, but there are other financial strategies for those who find themselves unwillingly placed into the ranks of the unemployed. 1. Get Rid of Foolish Pride — Many people feel that their job is an integral part of their identity. They take pride in their career and being laid off or fired can be a huge blow to the ego. I have spoken with many who experience a sense of shame upon finding themselves unemployed. This shame can lead to medical ailments such as depression or stress. Going into a shell or becoming the life of the party to mask the reality of your situation from your friends are both very normal occurrences. Picking up the dinner tab with friends, shopping sprees, and trying to put on the facade that things are still normal is a very destructive and expensive habit. Not only are you using money which should be kept in your savings, but you are depriving yourself of a very important resource … your network. Your network of family, friends and acquaintances who can help you find employment is often more expansive than you realize. Very often your friends and family are more likely to work harder for you to find employment than random strangers who read your resume on websites and with employment agencies. The more people who know about your situation, the more support you will have from those willing to go the extra mile to provide assistance. Warm referrals, placing resumes directly into the hands of people who can make hiring decisions, and constantly monitoring the employment scene are more likely to occur through people who care about your future. In addition, using social networking sites like Linkedin, Facebook, and Myspace can magnify your outreach to others who can assist you in your search. 2. File for Benefits — There are some unemployed people who feel so disillusioned and embarrassed by their situation that they are reluctant to file for unemployment benefits. However, there are measures in the recent stimulus bill that are designed to help those who have lost their jobs which include: • Lengthening the period which people can be eligible for unemployment benefits. • Suspending the taxation of benefits up to $2,400 • Providing a 65% subsidy to cover COBRA health insurance premiums for up to nine months • Increasing the maximum monthly food-stamp benefit by 13% 3. Join the Ranks of the “Under-Employed” — Having “a” job is better than having “no” job. The mortgage company or your landlord will not stop collecting rent just because you lost your job. If you find it hard to find a job in your first field of choice, you must begin to look for the next best thing. There are thousands in my hometown of Detroit who are in this very predicament … they were laid off from the automobile industry and have no other training but that which applies to a suffering industry. If you can, find a job that will at least help pay bills you can remain above water. While you are working as an “under-employed” individual, consider other options that you might pursue while you are working — options that will expand your scope of career choices and therefore make you more marketable. For example, community colleges offer inexpensive classes and training, non-profits offer free and inexpensive certification courses (consult your local politicians office for a list of community resources), and the internet has made the new education and training search much easier. Never look at a temporary job as a negative or a step backwards; think of it as a positive event that buys you the time to look for the job of your first choice while allowing you to pay your bills. 4. Get CHEAP! — Your pot of funds now has a finite ending and every penny spent gets you one penny closer to that scary ZERO figure! Now is the time to design a budget for your household, tighten your belt, use coupons, buy food in bulk, use only your ATM machine to avoid charges, and eliminate all impulse spending. Lowering your interest rates can assist in lowering your monthly bills so inquire about lowering your interest rates on your credit cards or your eligibility to refinance your home. Fannie Mae has reported that up to 50% of individuals who own a loan from Freddie Mac or Fannie Mae and who are eligible for a loan refinance have not taken advantage of the opportunity to get a lower interest rate. The US Treasury Department recently reported that only 12% of U.S. homeowners eligible for loan modifications under Obama administration’s housing rescue plan have had their mortgages modified, and millions more foreclosures are expected (although much of the reason for this low number comes from the stingy banks who choose not to modify loans because they are not required to … but that is another story). Here are a few other quick tips that will allow you to cut costs: • Cut all unnecessary luxury spending that create monthly bills such as cell phone bills (use a house phone and carry two quarters), gym memberships (work out at home), garage parking in the city (park on side streets), and magazine subscriptions (read articles on the internet or for free at the library). • Only take on additional debt in the case of an emergency. • Talk to your accountant about researching all legal tax strategies that you can utilize. • No more loans or money gifts to family members and/or loved ones. 5. Make Job Searching a Job – If you are unemployed, your new job is to find a job. Create an organized database listing all places that have received your resumes, the primary contact person and and an expected date to hear from them. Rank them in your database according to the likelihood of receiving a yes. Start your search early in the morning and set as many appointments as possible. Schedule meetings and appointments on a daily basis since the more time that you spend away from home the more productive you will be and less time will be spent watching daily talk shows. 6. Stay Healthy — Even with the 65% COBRA subsidy from the government, maintaining health insurance can be costly. Whether you elect to maintain health insurance or not (I always advise against going without health insurance) make sure you are taking every precaution to remain healthy. Eat more healthy foods and less junk food. As we all know, junk food is not only high in calories but it is usually filled with sugar which leads to more costly trips to the dentist. Work out at least three times per week for a minimum of 30 minutes per day, wash your hands regularly, get plenty of sleep, and take up yoga at home. Staying healthy is not only good for the body, but it helps to maintain a positive/confident outlook that will make for a more impressive job interview. 7. Don’t Touch Your 401K (if you can help it) – Try your best not to have a knee jerk reaction to raid your 401K or company retirement plan. Keep in mind, just because your statement reads “$50,000″ does not mean you have that much to withdraw. If you consider the federal, state, and perhaps city taxes on the funds that you have invested along with the 10% early withdrawal penalty and the possibility of deducting any matching funds contributed by your company (if you are not fully vested), that $50,000 could easily turn into $25,000. Raiding the company retirement plan should be the absolute last option. 8. Investing Is Not a Priority — If you have other investments, don’t use this as a time to check your portfolio every minute hoping that the $10 stock turns into the next Google. This is unnecessary stress in your life. If you were putting funds into an account monthly, those funds should now be diverted into your checking or savings account with the most access. Liquidity is your best friend in these times of hardship and stocks are not liquid. Even if you have your funds in a standard, non-qualified brokerage account you may not have to pay a penalty for the sale of a stock but you have tax liabilities if you have gains. As with the 401K, stop your investing in these funds, but don’t rush to liquidate these funds at first. However, if you are forced with the choice between paying rent and keeping a position in a stock, and you have exalted ALL other options, feel free to sell the stock. 9. Decide Which Bills to Pay First – After you have exhausted all options, if you are unemployed there may be a time to make hard decisions about which bills take priority. This should not be determined by which collection agencies are the most annoying or seem to yell the loudest. If you cannot pay your light bill you may lose your lights. If you cannot pay your phone bill you may lose your phone. However, if you cannot pay your rent or mortgage you will lose your home. Losing your phone or lights might be a tremendous loss, but not as big of a loss as having to sleep on the street. I am not suggesting that it is okay to skip any bill payment that you owe, as this is irresponsible and negatively impacts your credit; however, when hard times are upon us we must keep things in proper perspective. Here are a few things to consider BEFORE you decide to skip a bill payment: • Have you called the companies before to negotiate a payment plan? • Have you checked your budget and cut all luxury expenditures to see if you can squeeze out a few extra dollars? • Do you have any items around the home of value that you would consider selling? Is it time to host that yard sale that you have been considering? 10. Don’t Get Suckered — When desperation sits in, financial offers that you would not have considered before now begin to look more attractive. The financial predators are constantly swimming in the waters trying to attract those who are worried, anxious, and concerned that using “traditional” strategies of working hard will not be effective. These are the commercials that only play during the middle of the day or late at night when the typical employed person will never see them. They offer you overnight fame by purchasing the most effective real estate system ever created or magical options trading software that can never be incorrect. For a small fee you will be able to purchase your financial freedom…what a deal! Your money is too valuable to waste on false notions of fast prosperity. 11. Have Faith! – What other choice do you have? Faith is not waiting on a unicorn to prance into your life or a rainbow to form which signifies the end of your misery. Faith is half believing in that belief and half acting on that belief. People behave according to what they believe will happen. So if you believe that things will continue to be bleak, your job search will weaken and this will lessen the chances of finding a job. However, if you believe that your future will be bright, and you hold onto this positive outlook, you will be more likely to do the work that is necessary to find employment. I promise this to you, if you hold on to the belief that you will find a job, and aggressively pursue that belief, you will survive these hard times!

Read the full article →

Machu Picchu, Connecticut Highway on World Monuments Fund 2010 Watch List

October 6, 2009

By Patrick Cole Oct. 6 (Bloomberg) — The ancient Peruvian city of Machu Picchu, Jerusalem’s Cathedral of St. James and the Al-Hadba Minaret in Mosul, Iraq, are among 93 sites around the world at risk of deteriorating, the World Monuments Fund announced today. The fund’s 2010 World Monuments Watch ranges among 47 countries in noting structures that need to be preserved. Others listed this year include the scenic Merritt Parkway in Fairfield County, Connecticut, the wooden Machiya Townhouses in Kyoto, Japan, dating back to the 1600s, and the desert castles of Ancient Khorezm in Uzbekistan. “The 2010 Watch make it clear that cultural-heritage efforts in the 21st century must recognize the critical importance of sustainable stewardship,” fund President Bonnie Burnham said in a statement. “We must work closely with local partners to create viable and appropriate opportunities to advance this.” The New York-based nonprofit, founded in 1965, has worked to preserve more than 500 architectural and cultural sites in more than 90 countries, from Route 66 in the U.S. to St. Paul’s Cathedral in London. Three years ago, the fund placed the nation of Iraq on its list. “The sites on the 2010 Watch list make a dramatic case for the need to bring together a variety of sectors — economic, environmental, heritage-preservation and social — when we are making plans that will affect us all,” Burnham said. The fund listed nine sites in the U.S., including Phillis Wheatley Elementary School in New Orleans, which was damaged by Hurricane Katrina in 2005, Miami’s Marine Stadium , damaged by Hurricane Andrew in 1992, and the Atlanta-Fulton Central Public Library in Atlanta. Subway Threat Antoni Gaudi’s Temple Expiatori of the Sagrada Familia , a cathedral in Barcelona, made the list because a new underground train line through the city “will run precariously close” to its foundation, the fund said. The Suq Al-Qaysariya in Bahrain, one of the few remaining structures of its kind, made the list because it “may be razed in favor of a modern, upscale mall.” (The 2010 World Monuments Fund’s Watch list of 93 at-risk sites can be found at http://www.wmf.org ) To contact the writer on this story: Patrick Cole in New York at pcole3@bloomberg.net .

Read the full article →

Google Works With Publishers to Alter Book Settlement; Case Delay Sought

September 22, 2009

By Susan Decker and David Glovin Sept. 22 (Bloomberg) — Google Inc. and groups of authors and publishers are working to modify a $125 million settlement to create a digital library following criticism from parties including the U.S. Justice Department, the groups said. The groups today asked U.S. District Judge Denny Chin to postpone an Oct. 7 hearing where Google planned to seek approval of the settlement. In a federal court filing in Manhattan, the groups said they are working with Google to address some of the concerns raised in hundreds of filings in the case. “The parties, after consultation with the DOJ, have determined that the settlement agreement that was approved preliminarily in November 2008 will be amended,” the groups said in the four-page filing. The Justice Department said in a Sept. 18 filing that the agreement may not have given enough notice to rights holders, may limit price competition, and may give Google too much control in the market for the digital distribution of books. An antitrust investigation is continuing, the department said. Google, based in Mountain View, California, doesn’t oppose the postponement request, the groups said. Gabriel Stricker , a Google spokesman, said in an e-mailed statement that the company won’t be filing its own request for a postponement. Publishers, Authors “We are considering the points raised by the Department of Justice and others, and we look forward to addressing them as the court proceedings continue,” Stricker said. “It is because the parties wish to work with DOJ to the fullest extent possible that they have engaged, and plan to continue to engage, in negotiations in an effort to address and resolve the concerns expressed in the U.S. Statement of Interest,” the groups of authors and publishers told Chin in their filing today. The Open Book Alliance, a coalition that includes Amazon.com Inc., the world’s largest online retailer, Microsoft Corp. and Yahoo! Inc., said the postponement “is a huge victory” for groups and companies including those that opposed the accord. “It’s also an enormous loss for Google, which has been saying for months that no changes were necessary,” the alliance said in a statement. “Now, that settlement, as we know it, is dead.” Most-Favored Nation One likely change is the elimination of a provision that gives Google “most-favored nation status,” which means publishers pledge not to strike more favorable deals with Google rivals. The Justice Department said that provision discourages potential competitors. Google was sued in 2005 by authors and publishers who said the company was infringing their copyrights on a massive scale by digitizing books without their permission. Google said a settlement struck last year will “bring back to life” millions of books sitting unread on library shelves or out of print. Under the agreement, Google, the publishers and authors groups would set up a Book Rights Registry to compensate copyright holders whose works were scanned. It also would seek to identify the rights holders of so-called “orphan works” whose owners aren’t currently known. The Justice Department said Google would have too much control over the use of the orphan works, and said Google and the publishers could address concerns by limiting future rights to the works and appointing a “guardian” for the them. Chin had given Google and the book groups until Oct. 2 to respond to the more than 400 submissions from individuals, groups and countries who object to the deal, support it, or just wanted to point out a legal issue. The governments of Germany and France have joined authors in the U.S., Japan and Europe to oppose the settlement, saying it doesn’t give copyright owners enough choice about how their content is used. Larger Fight The settlement has become part of a larger fight over the future of digital books. Sales of electronic titles more than doubled to $61 million in the first six months of 2009, according to the Association of American Publishers in New York. Total U.S. book sales rose just 1.8 percent over that period. Amazon.com Inc., maker of the Kindle e-book reader, argues in its court filing that the agreement would give Google unfair control over a vast database of books. Sony Corp., which makes a digital-book reader that competes with Amazon.com’s Kindle, works with Google to offer digital books and supports the settlement. Groups including the National Federation of the Blind and the United States Student Association say the digital library would give individuals with disabilities, people who live in poor neighborhoods and community college students access to top-notch libraries like those at Harvard, Princeton and Columbia universities. Library Groups The American Library Association and other library groups say the agreement would give “unprecedented” access to digital books and simplify how digital rights are managed. Still, the library groups expressed concern that Google would have too much control of digital books and are worried about protecting user privacy. The case is Authors Guild v. Google Inc., 05-cv-8136, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: Susan Decker in Washington at decker1@bloomberg.net ; David Glovin in New York federal court at glovin@bloomberg.net .

Read the full article →

Best of the boutiques

September 19, 2009

The Fund Library A decade ago, a small mutual fund company could still survive and prosper in Canada. But the rise of the big banks as major players changed the landscape dramatically

Read the full article →

Google May Have to Modify Book Settlement for Court Approval, Lawyers Say

September 10, 2009

By Susan Decker and David Glovin Sept. 10 (Bloomberg) — Google Inc., the Web-search engine scanning millions of books to create a digital library, may have to modify a settlement with publishers and authors after more than 60 groups and individuals filed objections or demanded changes, lawyers said. A federal judge is scheduled to decide Oct. 7 whether to approve a $125 million agreement to establish a “Book Rights Registry,” which would identify and compensate rights holders whose books have been scanned by Google. The governments of Germany and France have joined authors in the U.S., Japan and Europe to oppose the settlement, saying it doesn’t give copyright owners enough choice about how their content is used. “There are some good points the court cannot ignore” while some attacks are “unfair,” said Terence Ross , a copyright lawyer with Gibson Dunn & Crutcher in Washington who is following the case and doesn’t represent either side. “He may ask the parties to go back, without rewriting the agreement from scratch, and address certain objections. Innovation often poses problems for the law and established bureaucracy.” The settlement has become part of a larger fight over the future of digital books. Sales of electronic titles more than doubled to $61 million in the first six months of 2009, according to the Association of American Publishers in New York. Total U.S. book sales rose just 1.8 percent over that period. Objections to the agreement were due this week. The U.S. Justice Department, which is investigating whether the plan violates antitrust law, has until Sept. 18 to weigh in on the issue. U.S. District Judge Denny Chin , who sentenced conman Bernard Madoff to 150 years in prison, will then oversee the Oct. 7 review. Back to Life A House Judiciary Committee hearing is scheduled for today with testimony expected from both sides and from Marybeth Peters , the register of copyrights at the Library of Congress. David Drummond , Google’s chief legal officer, is set to testify. Google was sued in 2005 by authors and publishers, who said the company was infringing their copyrights on a massive scale by digitizing books. The Mountain View, California-based company said a settlement struck last year will “bring back to life” millions of books that are sitting unread on library shelves or are out of print. Amazon.com Inc. is part of a group that argues the agreement would give Google unfair control over a vast database of books. Sony Corp., which makes a digital-book reader that competes with Amazon.com’s Kindle, works with Google to offer digital books and supports the settlement. Settlement Changes “I doubt the judge is going to just say, ‘I disapprove it,’” said June Besek, executive director of the Kernochan Center for Law, Media and the Arts at Columbia Law School, part of Columbia University in New York. “There is enough good in it, he might indicate what changes are needed and how it could be done.” Authors in the U.S. are split on the agreement. “Wonder Boys” writer Michael Chabon and “Pay It Forward” author Catherine Ryan Hyde object, while satirist Dave Barry, “Presumed Innocent” writer Scott Turow and children’s author Judy Blume are among those who say they support it. Under a key aspect of the agreement, Google would make digital copies of books that are no longer commercially available but are still covered by copyright. The out-of-print books would be available for preview and purchase, unless the author tells Google not to offer them. ‘Favored Nation’ Changes to the plan could include eliminating a provision that gives Google “most-favored nation status,” which means publishers pledge not to strike more favorable deals with Google rivals, and addressing how Google would use information on people’s reading habits, said Tom Selz , a copyright lawyer with Frankfurt, Kurnit, Klein and Selz in New York. Google is “confident in our agreement,” said Jennie Johnson, a spokeswoman for the company. The company also said the agreement allows for court supervision. Google rose $5.35 to $463.97 yesterday in Nasdaq Stock Market trading. The shares have gained 51 percent this year, compared with the 41 percent gain in the Standard & Poor’s 500 Information Technology Index. Google has sought to highlight the benefits of creating a digital library. Civil rights groups say individuals with disabilities, people who live in poor neighborhoods and community college students would have access to the top-notch libraries like those at Harvard, Princeton and Columbia universities. Blind people would also benefit because digital books can be read aloud or shown on Braille displays, according to The National Federation of the Blind . More Access “It would give blind people more access to more books than we have had in all of human history,” said Chris Danielsen, a spokesman for the federation. “Google is the only one making sure these books are accessible to blind people. If it is derailed, it would be a huge setback for blind Americans.” A group of 32 economics and antitrust professors said the agreement fosters competition because it gives consumers more information about how to find and buy books. The American Library Association and other library groups say the agreement would give “unprecedented” access to digital books and simplify how digital rights are managed. Still, the library groups expressed concern that Google would have too much control of digital books and are worried about protecting user privacy. Germany and France both filed objections to the agreement, and the European Union held a Sept. 7 hearing in Brussels. Germany said the plan would interfere with a European initiative to create noncommercial digital libraries. The biggest concern for the judge in the U.S. will be the Justice Department’s investigation, Selz said. What Google might have to change is still unclear, he said. “They have to be prepared to modify, but what the modifications will be and what the judge will require is anybody’s guess,” Selz said. The case is Authors Guild v. Google Inc., 05-cv-8136, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: Susan Decker in Washington at decker1@bloomberg.net ; David Glovin in New York federal court at glovin@bloomberg.net .

Read the full article →

Senator Kennedy’s Passion for Public Service Remembered on Eve of Funeral

August 28, 2009

By Tom Moroney Aug. 29 (Bloomberg) — Senator Edward Kennedy was remembered as a passionate public servant who loved his family, friends and a good laugh during a memorial service on the eve of his funeral and burial at Arlington National Cemetery. “It was never about him, it was always about you, a truly remarkable character trait,” said Vice President Joe Biden , one of many who recalled personal kindnesses performed for them by Kennedy. “Your father was a historic figure,” Biden said to Kennedy’s three children at the service last night at the John F. Kennedy Presidential Library and Museum in Boston. “He was a heroic figure beyond that” for his support of Americans trying to “start over again,” the vice president said. The funeral for Kennedy, who died Aug. 25 at age 77 of brain cancer, will be held today at Our Lady of Perpetual Help Basilica in Boston. President Barack Obama is scheduled to speak. Afterward, the senator will be buried at the national cemetery outside Washington near his two brothers — President Kennedy, assassinated in 1963, and Robert Kennedy, killed by a gunman in 1968. “John Fitzgerald Kennedy inspired our America; Robert Kennedy challenged our America; and Teddy changed our America,” said Senator Chris Dodd of Connecticut. “He was a champion for countless people who otherwise might not have had one, and he never quit on them, never gave up on the belief that we could make tomorrow a better day. Never.” Frequent Laughter The audience laughed frequently at the stories told by speakers. Dodd recalled that after he underwent prostate surgery a few weeks ago, Kennedy called him, saying in a booming voice, “between going through prostate cancer surgery and doing town hall meetings, you made the right choice!” Kennedy’s niece Caroline Kennedy , daughter of the late president, spoke about how her uncle used to take his nieces and nephews on “family history trips,” including one miserable campout that he abandoned to check into a Ritz hotel. “Now Teddy has become a part of history,” she said. Republican Senator Orrin Hatch of Utah recalled that although he came to Washington to “fight Ted Kennedy,” the senator wound up becoming “one of my closest friends in the world.” “He and I didn’t agree on much,” Hatch said, adding that Kennedy sometimes would “lay into me with the harshest red-meat liberal rhetoric you could imagine.” Minutes later, Kennedy would come up and ask him, “How’d I do, Orrin?” “I miss fighting in public and joking with him in the back room,” Hatch said, his voice quavering. ‘Large Family’ Kennedy’s nephew, Joseph P. Kennedy II , a former congressman and the son of the late New York Senator Robert Kennedy , said his uncle had to look after “one very, very large family” after the assassinations of Joseph’s father and President Kennedy. “For so many of us, we just needed someone to hang on to, and Teddy was always there to hang on to,” his nephew said. “He had such a big heart and he shared that heart with all of us.” Arizona Senator John McCain , last year’s Republican presidential nominee, said that when he and Kennedy worked together on an immigration bill, “he was the best ally you could have.” “He was the most reliable, the most prepared, and the most persistent member of the Senate,” McCain said. “He took the long view. He never gave up.” Work on Issues Massachusetts’ other senator, Democrat John Kerry , cited Kennedy’s work on matters such as the Americans With Disabilities Act, workplace safety, children’s health issues and Meals on Wheels. “He labored with all his might to make health care a right for all Americans and we will do that in his honor,” Kerry said. Cardinal Sean P. O’Malley will preside over today’s funeral in his role as Archbishop of Boston and will lead the final prayers of commendation. Obama’s eulogy is “obviously going to be very personal,” White House spokesman Bill Burton told reporters on Aug. 27. The president has been vacationing this week on the Massachusetts island of Martha’s Vineyard. More than 33,000 mourners filed past Kennedy’s flag-draped casket during the past two days at the library in Boston. His widow, Victoria , and other family members greeted visitors before the doors to the library, overlooking the Atlantic Ocean, were closed to the public yesterday. Thousands of People Thousands of people waited alongside roads and on overpasses two days ago to glimpse the black hearse bearing Kennedy’s body from his home in Hyannis Port. Before arriving at the museum, the motorcade toured Boston, the city Kennedy’s grandfather John F. Fitzgerald once served as mayor. Among the locations the motorcade passed were the federal building named for his brother John, the office where he served as a Suffolk County Assistant District Attorney and the church where his mother, Rose, was baptized. To contact the reporter on this story: Tom Moroney in Boston at tmorrone@bloomberg.net

Read the full article →

Mid-America in acquisition mode

July 24, 2009

Profiles Policy Tracker Advice Library Funding Businesses For Sale Prospecting Advice Library Sales Tools Sales Stories Whitepapers Commercial Real Estate Property Search Business Events Nominations My Dashboard My News My Friends Invite Your Friends

Read the full article →

Florentine Palazzo Lures Investors With $310,000 Papal Apartments: Travel

July 21, 2009

By Andrew Davis July 21 (Bloomberg) — At a time of imploding real-estate markets and a deepening global recession, selling stakes in a glorified timeshare starting at 218,000 euros ($310,000) might seem like a folly, unless the property is Palazzo Tornabuoni , a Renaissance palace in central Florence. The palazzo , once the power center of the city’s famed Medici family, has undergone a $150-million restoration and reopened as a private membership club, the most exclusive tranche of the fractional-ownership vacation market.

Read the full article →

Robert Siciliano: Fox Anchor’s Email Hacked, Leads to Identity Theft

July 18, 2009

I recently appeared on Fox and Friends to discuss email hacking. Dave Briggs, a FOX & Friends Weekend co-host, lost access to his Hotmail email account when hackers were able to guess either his password or his qualifying question. (He admitted that his password was not as strong as it should have been.) The hackers locked Briggs out of his own account and spammed all of his contacts with a fraudulent email that appeared to be written by Briggs himself, claiming that he was trapped in Malaysia and requesting that someone help him by transferring money via Western Union

Read the full article →

Robert Siciliano: Fox Anchor’s Email Hacked, Leads to Identity Theft

July 18, 2009

I recently appeared on Fox and Friends to discuss email hacking. Dave Briggs, a FOX & Friends Weekend co-host, lost access to his Hotmail email account when hackers were able to guess either his password or his qualifying question. (He admitted that his password was not as strong as it should have been.) The hackers locked Briggs out of his own account and spammed all of his contacts with a fraudulent email that appeared to be written by Briggs himself, claiming that he was trapped in Malaysia and requesting that someone help him by transferring money via Western Union

Read the full article →

Associations: Earn up to 15% Comission for "Discovering Commercial Real Estate Course"!

April 24, 2009

Learning Library, the course provider of Discovering Commercial Real Estate, designed Learning Library Inc. Affiliate Program to be the best and easiest way to provide your visitors with value added education while concurrently creating a revenue stream for your organization.

Read the full article →