Author Archives: Denise Simon

China did Not Hack OPM, Operative Just Signed In

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Per ARS Technica: Not only were the database records of POM not encrypted, it simply did not matter. At least 14 million personnel files have been compromised and protecting social security numbers by encryption did not mater.

But even if the systems had been encrypted, it likely wouldn’t have mattered. Department of Homeland Security Assistant Secretary for Cybersecurity Dr. Andy Ozment testified that encryption would “not have helped in this case” because the attackers had gained valid user credentials to the systems that they attacked—likely through social engineering. And because of the lack of multifactor authentication on these systems, the attackers would have been able to use those credentials at will to access systems from within and potentially even from outside the network.

House Oversight Chairman Jason Chaffetz (R-Utah) told Archuleta and OPM Chief Information Officer Donna Seymour, “You failed utterly and totally.” He referred to OPM’s own inspector general reports and hammered Seymour in particular for the 11 major systems out of 47 that had not been properly certified as secure—which were not contractor systems but systems operated by OPM’s own IT department. “They were in your office, which is a horrible example to be setting,” Chaffetz told Seymour. In total, 65 percent of OPM’s data was stored on those uncertified systems.’

Even more chilling, a person or team just found a way to sign in as a root user.

Some of the contractors that have helped OPM with managing internal data have had security issues of their own—including potentially giving foreign governments direct access to data long before the recent reported breaches. A consultant who did some work with a company contracted by OPM to manage personnel records for a number of agencies told Ars that he found the Unix systems administrator for the project “was in Argentina and his co-worker was physically located in the [People’s Republic of China]. Both had direct access to every row of data in every database: they were root. Another team that worked with these databases had at its head two team members with PRC passports. I know that because I challenged them personally and revoked their privileges. From my perspective, OPM compromised this information more than three years ago and my take on the current breach is ‘so what’s new?'”

Given the scope and duration of the data breaches, it may be impossible for the US government to get a handle on the exact extent of the damage done just by the latest attack on OPM’s systems. If anything is clear, it is that the aging infrastructure of many civilian agencies in Washington magnify the problems the government faces in securing its networks, and OPM’s data breach may just be the biggest one that the government knows about to date.

Future consequences of lack of security of data systems is blackmail

Reuters: The same hackers breached several health insurance companies last summer and made off with the medical records of 11 million people, including members of Blue Cross/Blue Shield’s District of Columbia affiliate CareFirst.

Media pundits spent all week talking about how Deep Panda could compile all this information to craft a potential blackmail database on U.S. operatives for its patron, presumably China. But that’s ridiculous. Beijing is smarter than that.

Espionage is a long game, not a race, and countries are patient. Blackmail is a quick, brutal method of acquiring information in the short term.

It typically begins when foreign agents play on a target’s existing weakness — a penchant for gambling, for example, or deviant sexual behavior — enticing the target to indulge in it and then threatening exposure.

That’s a lot of work for a short-term gain. Blackmail targets are almost always found out, or turn on their blackmailers or end their lives. No, a better use for that database is as a reference to create the background for the perfect mole. Many additional details found here.

An additional security concern of real proporations is this cyber intrusion has affected Hill and Congressional staff.

In Part from the Hill: Officials had initially said the breach only encompassed 4.2 million federal employees, all within the executive branch. But the discovery of a second breach that compromised security clearance data has many expecting the breach to eventually expose up to 14 million people.

According to an email sent to House staff members shortly before midnight Tuesday and obtained by The Hill, many of them are at risk.

“It now appears likely that the service records of current House employees employed previously by ANY federal government entity (including the House, if an individual left the House and later returned to a House position) may have been compromised,” said the email said, sent by House Chief Administrative Officer Ed Cassidy.

When staffers leave Capitol Hill, or any federal agency, their retirement records are forwarded to the OPM.

“In addition, the background investigation files of individuals holding security clearances (whether currently active or not) may have been exposed,” the email added.

Senate staffers received a similar email from the Senate Sergeant at Arms several hours earlier on Tuesday, according to multiple reports.

 

 

Honduran President at WH, Where is the Money?

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Juan Carlos Hernandez has been a busy man reaching out to the White House several times since 2014. He is after money and he is likely getting it.

Hernandez has a big problem that the White House and the State Department are overlooking….it is called corruption and Hondurans know it well. Earlier this month, the protests began against the president and the with some amazement the United Nations anti-corruption body actually uncovered corruption in Guatemala but not so much in Honduras. Hondurans are calling for the resignation of Hernandez and the country has one of the highest murder rates globally for 2014.

Honduras is a key country in the matter of the DACA insurgency of people coming across our southern border in 2014. The matter was so bad that both Obama and Biden spoke to President Hernandez on the phone in 2014 on humanitarian issues and that those fleeing the country are not eligible for the DACA program.

Still desperate, President Hernandez was in the United States and had important time allotted to him at the State Department that was part of a 2 day program titled ‘Americas Society and Council of the Americas’ where the charter is to cover items including LGBT rights, economic development and the rule of law.

At the core of the corruption charges against President Hernandez is social security embezzlement. In 2014, yet another Honduran official was arrested for stealing more than $330 million in public money from a health pension fund.

Under Hillary Clinton at the State Department and with collaboration with the World Bank loans for more than a billion dollars have been pledged and then the United States augmented those dollars with 200 and 300 million going separately to countries in the region. With all this monetary infusion, why no clean up in corruption or a global cocaine network or an exodus of Hondurans?

Well at 3:00 PM, on June 17, 2015, President Hernandez just left the White House again.

President of Honduras Juan Orlando Hernandez speaks to reporters on June 17, 2015 in Washington, DC

In part from AFP news: Hernandez has come to Washington to meet with the new secretary general of the Organization of American States, Luis Almagro, and with US Vice President Joe Biden to discuss the development plan.

President Barack Obama has asked Congress for one billion dollars for the initiative but Republicans in Congress have expressed reservations.

– Taking responsibility –

To overcome those misgivings Honduras will disclose details of the plan to leaders of the two chambers, Hernandez said.

A Central American region that is prosperous and peaceful “is a tremendous investment for the American people”, the president said.

“I would hope that the leaders in Washington would understand that,” he added.

Still, the American aid is only symbolic.

Passing the package, he said, would mean Washington acknowledges that a huge part of the problem is Americans’ appetite for drugs like cocaine that are produced in South America and smuggled through destitute nations like Honduras, El Salvador and Guatemala to reach the streets of the United States.

“In the end, it is not so much the money. It is the message that the United States takes responsibility for generating violence and migration as a result of drug trafficking in the region,” he said.

Paying Too Much for United Nations Failures

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The summary failure of the United Nations in regard to the Congo. There more recently there is the admitted inability to stop the atrocities in Syria.

In 1945, the United Nations Charter, which was adopted and signed on June 26, 1945, is now effective and ready to be enforced.

The United Nations was born of perceived necessity, as a means of better arbitrating international conflict and negotiating peace than was provided for by the old League of Nations. The growing Second World War became the real impetus for the United States, Britain, and the Soviet Union to begin formulating the original U.N. Declaration, signed by 26 nations in January 1942, as a formal act of opposition to Germany, Italy, and Japan, the Axis Powers.

The principles of the U.N. Charter were first formulated at the San Francisco Conference, which convened on April 25, 1945. It was presided over by President Franklin Roosevelt, British Prime Minister Winston Churchill, and Soviet Premier Joseph Stalin, and attended by representatives of 50 nations, including 9 continental European states, 21 North, Central, and South American republics, 7 Middle Eastern states, 5 British Commonwealth nations, 2 Soviet republics (in addition to the USSR itself), 2 East Asian nations, and 3 African states. The conference laid out a structure for a new international organization that was to “save succeeding generations from the scourge of war,…to reaffirm faith in fundamental human rights,…to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and to promote social progress and better standards of life in larger freedom.”

Today, the United Nations is a failed global operation and the United States pays the largest share of the financial freight. All of it is too much.

By: Brett D. Schaefer is the Jay Kingham Fellow in International Regulatory Affairs at Heritage Foundation’s Margaret Thatcher Center for Freedom.

America, we pay way too much for the United Nations

‘Each year the United States gives approximately $8 billion in mandatory payments and voluntary contributions to the United Nations and its affiliated organizations. The biggest portion of this money – about $3 billion this year – goes to the U.N.’s regular and peacekeeping budgets.

If that seems like a lot, it is—far more than anyone else pays And it’s also, in some cases, bad value for money.

The U.N. system for calculating member nations’ “fair share” payment toward its regular and peacekeeping budgets has increasingly shifted the burden away from the vast majority of the 193 members and onto a relative handful of high-income nations, especially the U.S. Indeed some nations pay next to nothing.

Over the last six decades, the share of the U.N. expenses borne by poor or small member states has steadily ratcheted downward to near- microscopic levels. From 1974 to 1998, the minimum mandatory payment for the regular budget for example, fell from 0.04 percent to 0.001 percent. For the peacekeeping budget, the minimum is 0.0001 percent.

The U.N. system for calculating member nations’ “fair share” payment toward its regular and peacekeeping budgets has increasingly shifted the burden away from the vast majority of the 193 members and onto a relative handful of high-income nations, especially the U.S. Indeed, some nations pay next to nothing.

In addition, over three quarters of the total U.N. membership get additional discounts, with the cost also shifted to wealthier countries.

The end result is a hugely skewed bill for U.N. expenses.

In 2015, 35 countries will be charged the minimum regular budget assessment of 0.001 percent which works out to approximately$28,269 each. Twenty countries will be charged the minimum peacekeeping assessment of 0.0001 percent or approximately $8,470 apiece.

By contrast, the U.S. is assessed 22 percent of the regular budget (approximately $622 million) and over 28 percent of the peacekeeping budget (approximately $2.402 billion).

Put another way, the U.S. will be assessed more than 176 other member states combined for the regular budget and more than 185 countries combined for the peacekeeping budget. Who says America isn’t exceptional!

This is more than a complaint about dollars. It’s also about the value received for those outsized contributions. Consider:

· An independent academic study assessing best and worst practices among aid agencies ranked U.N. organizations among the worst.

·Numerous reports, audits, and investigations have revealed mismanagement, fraud and corruption in procurement for U.N. peacekeeping.

· Studies and reports have identified U.N. peacekeepers as the source of the cholera outbreak that ravaged Haiti starting in 2010, leaving more than 8,000 dead and more than 600,000 seriously sickened.

· A 2014 study of eight of the nine U.N. peacekeeping operations with a mandate to protect civilians found that peacekeepers “did not report responding to 406 (80 per cent) of [the 570] incidents where civilians were attacked.”

· U.N. personnel have been accused of sexual exploitation and abuse in Bosnia, Burundi, Cambodia, Congo, the Democratic Republic of Congo, Guinea, Kosovo, Liberia, Sierra Leone, and Sudan. Recent news stories from the Central African Republic and Haiti indicate the problem is still far too common and the U.N. is more interested in concealing the issue than in confronting it

· Atop all that, U.N. employees enjoy extremely generous benefits and salaries—over 32 percent higher than U.S. civil servants of equivalent rank.

Moreover, the U.N. and its employees enjoy broad protections and immunities and cannot be sued in national courts, arrested, or prosecuted for actions related to their official duties unless those immunities are waived. This places an extremely heavy responsibility on the U.N. to self-police, correct, and punish wrongdoing by the organization and its employees.

Unfortunately, oversight and accountability at the U.N. have historically been weak. And on the rare occasion when internal watchdogs bite, the organization moves to defang them.

Take the case of the Procurement Task Force (PTF) , a special U.N. unit that went to work in 2006  to root out corruption.   It uncovered fraud, waste, and mismanagement involving contracts valued at more than $630 million. It led to misconduct findings and convictions of U.N. officials.

Unfortunately the PTF was eliminated in 2008—at the behest of countries angry about PTF actions against their nationals holding U.N. staff positions. The U.N. has not completed any major corruption cases since the PTF was eliminated.

Poor oversight is made worse by U.N. hostility toward its own whistleblowers. Only a few weeks ago, nine staffers from various U.N. organizations sent a letter to the Secretary-General asserting that the U.N. affords “little to no measure of real or meaningful protection for whistleblowers.”

The U.N. badly needs reform, but the U.S., despite the mammoth checks it writes, can’t reform the U.N. alone. In the one-nation, one-vote world of the U.N., it needs support from other nations. Unfortunately, many of them remain blasé about U.N. budget increases, corruption, and inefficiencies because the financial impact on them is miniscule.

To change the institution, the first thing that needs to change is the thumb-on-the-scales system that makes the U.S. the biggest bill-payer, but just one of 193 voting members when it comes to demanding honesty, efficiency and effectiveness in return for its over-generous payments.

Congress and the Obama administration have both said they want the United Nations to be more transparent and accountable and to use its resources more effectively. To make that happen, major donors must have a greater say in budgetary decisions, and smaller donors must assume financial responsibilities that lead them to undertake budgetary decisions and conduct serious oversight.

Every three years the U.N. General Assembly approves adjustment to its scale of assessments: 2015 is one of those years. The U.S. should not let this opportunity slip away to get more for its money—and make other nations actually try to make the U.N. live up to the image that the organization likes to show the world.’

If you agree that the United Nations should have funding cut, you’re in luck. Here is the link to sign the petition.

Putin’s Propaganda Game, Effective

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President Vladimir Putin said on Tuesday that Russia was concerned about an anti-missile defense system near its borders, after announcing that Russia would add more than 40 intercontinental ballistic missiles (ICBM) to its nuclear arsenal this year.

“We will be forced to aim our armed forces … at those territories from where the threat comes,” Putin said.

Putin made his comments a day after Russian officials denounced a U.S. plan to station tanks and heavy weapons in NATO member states on Russia’s border. Putin said it was the most aggressive act by Washington since the Cold War a generation ago.

Putin, the Patriot

Putin opens ‘military Disneyland’ near Moscow

KUBINKA , Russia, June 17 (UPI) — Russian President Vladimir Putin opened “Patriot Park,” a military theme park funded by the Russian Defense Ministry.

The 15,000-acre park, a hour away from Moscow in Kubinka, will be completed by 2017 featuring hotels, conference centers and a residence for Defense Minister Sergey Shoigu. A massive assortment of military hardware will be on display on which children can climb and play.

U.S. Secretary of State John Kerry said that Russia’s plans to buy more intercontinental ballistic missiles was concerning and could herald a return to the international hostility of the “Cold War.” “Nobody should hear that kind of announcement from the leader of a powerful country and not be concerned about what the implications are,” Kerry said in a teleconference Tuesday.

“Of course it concerns me, we have the START agreement (the nuclear arms reduction treaty between the U.S. and Russia) and we’re trying to move in the opposite direction,” he said.   

Kerry said that, since the 1990s, there had been “enormous cooperation” in the destruction of nuclear weapons that were in the former territories of the Soviet Union.

Since leaving the hospital, John Kerry is even busier and that included making a phone call to his Russian counterpart:

Washington, Jun 16 (EFE).- U.S. Secretary of State John Kerry telephoned his Russian counterpart Sergei Lavrov on Monday, urging him to expedite implementation of the Minsk peace agreement and resolve the Ukraine conflict.

“Kerry urged Russia to seize the opportunity of upcoming meetings of the Trilateral Contact Group and its Working Groups to accelerate progress on implementing the Minsk agreements,” State Department spokesman John Kirby said in a brief statement.

The Trilateral Contact Group and its Working Groups, comprising representatives from Ukraine, Russia and the Organization for Security and Co-operation in Europe, or OSCE, favours a diplomatic solution to the conflict in East Ukraine along the Russian border.

However, renewed clashes between government forces and pro-Russian rebels in the Donetsk region in early June had made the viability of peace agreements doubtful.

The last peace agreement was signed in February.

Fresh clashes had erupted in Marinka, along the separation line between the warring forces, 20 kms (12 miles) west of Donetsk, the main separatist bastion.

A report by OSCE observers says the separatists launched the offensive while the government forces limited themselves to defense.

Kerry and Lavrov took the opportunity to also discuss the situation in Syria, Iran, Yemen and the Arctic Council, Kirby added.

 

 

 

 

 

WalMart has a Secret Global Operation

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In 2013, WalMart announced an ‘All American’ objective….yet there are other truths.

Wal-Mart Stores Inc will buy an additional $50 billion in U.S.-made goods over the next decade in areas like sporting goods and high-end appliances in what the world’s largest retailer called a bid to help boost the U.S. economy. Wal-Mart, the largest private employer in the United States, also said on Tuesday it plans to hire 100,000 newly discharged veterans over the next five years, at a time when the U.S. unemployment rate is at 7.8 percent.

The moves are likely to receive a cool reception from critics, who claim Wal-Mart does not pay its workers enough and slam the retailer for selling too many goods made in lower-cost countries like China. The company is also under pressure over its sourcing practices, particularly after a deadly fire at a Bangladesh factory that made Wal-Mart clothes.

Then Walmart went all in with China.

But WalMart is fully offshore hiding monies for tax purposes…what would Barack Obama say?

Wal-Mart Has $76 Billion in Undisclosed Overseas Tax Havens

Wal-Mart Stores Inc. owns more than $76 billion of assets through a web of units in offshore tax havens around the world, though you wouldn’t know it from reading the giant retailer’s annual report. A new study has found Wal-Mart has at least 78 offshore subsidiaries and branches, more than 30 created since 2009 and none mentioned in U.S. securities filings. Overseas operations have helped the company cut more than $3.5 billion off its income tax bills in the past six years, its annual reports show. The study, researched by the United Food & Commercial Workers International Union and published Wednesday in a report by Americans for Tax Fairness, found 90 percent of Wal-Mart’s overseas assets are owned by subsidiaries in Luxembourg and the Netherlands, two of the most popular corporate tax havens.

Units in Luxembourg — where the company has no stores — reported $1.3 billion in profits between 2010 and 2013 and paid tax at a rate of less than 1 percent, according to the report. All of Wal-Mart’s roughly 3,500 stores in China, Central America, the U.K., Brazil, Japan, South Africa and Chile appear to be owned through units in tax havens such as the British Virgin Islands, Curacao and Luxembourg, according to the report from the advocacy group. The union conducted its research using publicly available documents filed in various countries by Wal-Mart and its subsidiaries. Randy Hargrove, a Wal-Mart spokesman, called the report incomplete and “designed to mislead” by its union authors. He said the company has “processes in place to comply with applicable SEC and IRS rules, as well as the tax laws of each country where we operate.”

Mailbox Subsidiaries

The union behind the study backs the Organization United for Respect at Wal-Mart, a group that campaigns for wage increases and more predictable schedules. Wal-Mart has historically resisted unions and discourages employees from joining them. The report comes a week after the Group of Twenty nations unveiled its latest effort to combat multinational corporate tax avoidance. The body wants companies to disclose to regulators where they book profits, employees and sales, so tax authorities can be aware of discrepancies between where corporations report income and where they have operations. Hargrove, the Wal-Mart spokesman, pointed to guidance issued by the SEC that permits companies to avoid disclosure of subsidiaries with significant “intercompany transactions.” He said Wal-Mart’s tax savings overseas was driven by lower rates in markets including Canada and the U.K.

‘Continuing Evidence’

Companies such as Google Inc., Apple Inc. and Starbucks Corp. have come under fire for avoiding billions of dollars of income taxes by attributing profits to mailbox subsidiaries in low-tax jurisdictions like Bermuda. The Group of Twenty has directed the Organization for Economic Cooperation and Development to develop plans to crack down on such strategies. The new Wal-Mart disclosures could expand the scope of international tax reform, which has often focused on technology companies that move profits offshore by assigning valuable patent rights to mailbox units. Bloomberg News reported last year that Inditex SA, the parent of Zara, the world’s biggest fashion retailer, cut its taxes by shifting billions of dollars of profits to a tiny Dutch unit. “This report is continuing evidence that everybody has been engaging in cross-border tax avoidance,” said Stephen E. Shay, a professor at Harvard Law School and former deputy assistant secretary for international tax affairs for the Obama Treasury Department.

Hybrid-Loan Strategy

Nearly a decade ago, Wal-Mart ran into trouble over strategies to avoid U.S. state income taxes. It used a real estate investment trust to effectively pay rent to itself, generating big tax deductions, even though the rent payments never left the company. At least six states changed their tax laws after publicity about the tactics. Since then, Wal-Mart has stepped up its use of offshore tax havens. It has created 20 new subsidiaries in Luxembourg alone since 2009, according to the report. Wal-Mart employs a popular legal strategy in that country called a hybrid loan. It permits companies’ offshore units to take tax deductions for interest paid — typically on paper only — to their parents in the U.S. The parent, however, doesn’t include that interest as taxable income in the U.S. The OECD has called for an end to the tax benefits of such loans. Luxembourg generated headlines last year after the International Consortium of Investigative Journalists revealed its role in cutting the tax bills of hundreds of multinationals.

Union Funding

U.S. companies owe tax at a rate of 35 percent but can defer indefinitely the income taxes on profits attributed to overseas units. In 2011, Wal-Mart’s then-chief executive officer, Mike Duke, called in testimony before Congress for a system that would exempt from U.S. income tax the earnings that multinationals generate overseas. Wal-Mart’s accumulated offshore earnings have doubled to $23.3 billion in 2015 from $10.7 billion 2008. The company operates about 6,300 stores in 27 countries outside the U.S. and last fiscal year reported 28 percent of its sales abroad, or about $137 billion. Wal-Mart paid $6.2 billion in U.S. income tax last year, Hargrove, the company spokesman, said, or “nearly 2 percent of all corporate income tax collected by the U.S. Treasury.” Americans for Tax Fairness called on the European Union to open investigations into whether the Luxembourg tax benefits constitute illegal state aid. The EU has issued preliminary findings that this was indeed the case with companies using similar strategies in various countries, including as Starbucks in the Netherlands, Apple in Ireland and Fiat SpA in Luxembourg. The tax group receives most of its funding from foundations, including the Ford Foundation, Open Society Foundations, Bauman Foundations and Stoneman Family Foundation. It’s also funded by public-sector unions, including the American Federation of State, County and Municipal Employees and the National Education Association.