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California’s drought provides a useful lesson. I am glad California is having a drought. Not because I hate California (I love California) or Californians (I hate them only a little, for what they’ve done to California) or Central Valley farmers (some of my best friends . . .) or even Governor Jerry Brown, droll disco-era anachronism that he is, but because the episode presents an excellent illustration of the one fundamental social reality that cannot be legislated away or buried under an avalanche of government-accounting shenanigans and loan guarantees or brought to heel by politicians no matter how hard the ladies and gentlemen in Sacramento and Washington stamp their little feet: scarcity.
California has X amount of water at its disposal, and it has politicians in charge of overseeing how it gets divvied up. Which politicians? The same ones responsible for the current sorry state of California’s water infrastructure, of course. Should be a hoot.
The main claimants are these: Farmers, who by some estimates consume about 80 percent of the water used in California. Agriculture is a relatively small component of California’s large and diverse economy, but California nonetheless accounts for a large share of the nation’s agricultural output. Both of those things are, in a sense, the good news: If market-rate water costs were imposed on California farms, as they should be, then any higher costs could be passed along — not only to consumers, but up and down the supply chain — in a very large global market, where they should be digested more easily. People with lawns, including people with the very large and complex lawns known as golf courses, who account for an extraordinary amount of California’s non-agricultural water use.
In arid Southern California, and especially in the golf-loving desert resort communities of the Coachella Valley, keeping the grass green often accounts for more than half — and sometimes much more than half — of residential water use. How thirsty is grass? Consider that 200 square feet of California swimming pool uses less water over the course of three years than does 200 square feet of California lawn. (Yes, I know: volume versus surface area, but the math still works out.) And about half of the water used on lawns is lost to the wind, because sprinkler systems spray water in the air rather than on the grass. The goddamned delta smelt, a.k.a. “the world’s most useless fish,” whose comfort and happiness demanded the dumping of some 300 billion gallons of fresh water into the San Francisco Bay — and thence into the Pacific Ocean — in 2009 and 2010. That’s enough fresh water to cover the state of New Jersey nearly three inches deep. The smelt’s delicious friend, the salmon, is a co-claimant.
Governor Brown’s response is a textbook example of the central planner’s fatal conceit. He issued an executive order imposing 25 percent cuts on the state’s 400 local water agencies, which supply about 90 percent of Californians’ water but do not supply the farms that consume most of the state’s water. That 25 percent figure looks bold and authoritative, but when was the last time you saw the production, consumption, or price of a scarce commodity in the real world move by such neat increments?
When something disturbs the equilibrium of the world’s oil markets — which happens every single day — then the markets make minuscule, complex adjustments, and continue to make them around the clock — the markets never sleep — with producers and consumers both modifying their behaviors to accommodate the new economic realities as they emerge. Amazingly (but not amazingly), this happens with no Governor Brown in charge of the process. You’ve never seen the price of pork bellies or soybeans simply jump 25 percent and stay there indefinitely, or rice or wheat consumption fall by neat round numbers. But Governor Brown imagines that he can rationally manage by fiat the consumption of the most important commodity in the world’s seventh-largest economy. Good luck with that. Governor Brown’s solution/non-solution has been criticized for failing to impose serious new restrictions on farmers. There are several reasons for this: First, Governor Brown probably does not want to reinforce the impression that his administration is an instantiation of insular coastal soy-latte progressivism staffed by feckless urbanites of the sort who believe that grapes come from Trader Joe’s and who are therefore willing to see the state’s rural interior gutted; second, and to give a decent if often foolish man proper credit, Governor Brown probably is not much inclined to impose heavy new burdens on the state’s relatively poor and downwardly mobile agricultural corridor, and to see large numbers of the poorest Californians thrown out of work; third, farmers already have seen their water allowances docked.
Among tragedies of the commons, California’s water situation is Hamlet, a monumental work fascinating for all of the possibilities it raises and not given to easy resolution. But even given the underlying complications, from the hydrological to the legal (California’s system of water rights is remarkably complex), the fundamental problem is that nobody knows what a gallon of water in California costs. Water allocations are made mainly through politics rather than through markets, with the state’s legal regime explicitly privileging some water uses over others. There are two possible ways to allocate water in California: The people in Sacramento, Governor Brown prominent among them, can pick and choose who gets what, with all of the political shenanigans, cronyism, inefficiency, and corruption that brings. Or Californians can get their water the same way they get most everything else they need and value: by buying it on the open market.
This is an excellent opportunity to apply the cap-and-trade model that many progressives favor when it comes to carbon dioxide emissions, with an important difference: This deals with real, physical scarcity, not artificial scarcity created by regulation. (Incidentally, it here bears repeating that notwithstanding the inaccurate proclamations of Governor Brown and President Obama, California’s drought almost certainly is not the result of global warming; the climate models supporting the scientific consensus on global warming predict wetter winters for California, not the drier winters that have produced the current crisis. California’s climate is complex, but a great deal of it is dominated by desert and arid to semi-arid Mediterranean conditions.)
As the economist Alex Tabarrok puts it: “California has plenty of water — just not enough to satisfy every possible use of water that people can imagine when the price is close to zero.” As noted, the water-rights picture is complicated, but it is not so complicated that California could not 1) calculate how much water is available for consumption; 2) subtract preexisting claims; 3) auction off the remainder, with holders of preexisting water rights allowed to enter that market and trade their claims for money.
A gallon of water used to green up a lawn in Burbank and a gallon of water used to maintain a golf course in Palm Springs and a gallon of water used to irrigate almonds in Chico would be — and should be — on exactly the same economic and political footing. As Professor Tabarrok notes, San Diego residents use about twice as much water per capita as do residents of Sydney, a city whose climate is comparably arid and whose residents are comparably well-off, a situation that is almost certainly related to the fact that San Diegans pay about one half of a cent per gallon for household water. Governor Brown wants to be the man who decides what is and is not a good use of California’s water; in defending his decision not to impose further restrictions on farmers, he said: “They’re not watering their lawn or taking long showers. They’re providing most of the fruits and vegetables of America and a significant part of the world.” That is no doubt true. But the only way to discover what that is really worth — not in sentimental, good-enough-for-government-work terms, but in cold-eyed dollar terms — is to allow real prices for water to emerge. My own suspicion is that California’s almonds and avocados will remain in high demand when the water used in their cultivation is properly priced on an open market. Relatively small gains in the efficiency of agricultural irrigation would go a long way toward helping California live with the water it has. So would converting a few million suburban lawns to desert landscaping. So would ceasing to dedicate large amounts of fresh water to political projects of dubious value. Which to choose? Before that question can be answered, there is the prior question: “How to choose who chooses?” The rational answer is that water consumers should choose how water gets used, provided that each of them pays the real price for his choices. California’s largest crop is grass — by which I do not mean marijuana, but lawns. Until the day comes when a ton of fresh-cut grass fetches a higher price than a ton of avocados, my guess is that California’s farmers will do fine under a market-based water regime. But maybe not. Everyone has his own favorite drought bugaboo: suburban lawns, almond farms, the delta smelt, golf courses, illegal marijuana cultivation, etc.
Given enough time, somebody will figure out a way to blame this all on the Koch brothers, illegal immigrants, or the Federal Reserve. But the fact is that nobody knows — nobody can know — what the best use of any given gallon of water in California is. Californians can put their money where their parched mouths are, or they can let Governor Brown play Ceres-on-the-Bay, deciding which crops grow and which do not. Whether the commodity is water or education or health care, if you care about something, put a price tag on it. You can’t afford for it to be cheap, and you sure as hell can’t afford for it to be free.*** Now look at the legislative issues in your state to determine what similar actions are being taken. While you’re at it, how does your state compare to the others fiscally?
States across the U.S. share the common goal of economic prosperity, but they differ vastly in how they set out to achieve it. The latest edition of the American Legislative Exchange Council- Arthur Laffer Rich States, Poor States competitiveness index examines policies that maximize economic growth and assesses which states are on the path to prosperity and which are more likely headed to the poorhouse.
For the eighth consecutive year, Utah has remained #1. Rounding out the top 10 for 2014 are: North Dakota, Indiana, North Carolina, Arizona, Idaho, Georgia, Wyoming, South Dakota and Nevada. At the other end of the spectrum, New York obtained the lowest ranking at #50. Working backward, Vermont ranked 49, preceded by Minnesota, Connecticut, New Jersey, Oregon, California, Montana, Maine, and Pennsylvania.
The rankings are a combination of past economic performance (economic growth, net migration and employment) and forward-looking policy variables such as taxes, debt, and the presence of right-to-work laws.
States at the top earned their rankings by implementing policies that energized their economies, attracted businesses and entrepreneurs, and expanded employment and income. So what are these energizing policies that could help states at the bottom boost their economies? Based on both past and present rankings, low income taxes and right-to-work laws provide the most bang for the buck.
Analysis provided alongside last year’s rankings showed economic growth in the nine states with no personal income tax averaged 62 percent from 2003 to 2013 while the nine highest income tax states grew by an average of only 47 percent. And states with no income tax experienced twice the rate of population growth (14 percent) as the highest income tax states (7 percent).
The growth gap between high-tax and low-tax states translates into more than a $100 billion in lost annual output for big, bottom-ranking states like California (#44) and New York (#50). And while it may seem counterintuitive, tax revenue increased substantially more in the nine states with no income tax than it did in the highest income tax states. Lower taxes produce a larger economic pie, and a larger pie means bigger slices for all—including the state tax revenue.
States with right-to-work laws that prevent workers from being coerced to pay union dues attract more businesses and workers, which in turn grow their economies. Compared to forced-union states, right-to-work states experienced twice the rate of employment growth from 2003–2013, one-quarter higher income growth, and one-third greater output growth. What’s more, right-to-work states experienced a 3 percent increase in net migration, while forced-union states suffered a 1 percent loss in net migration.
Competition is inherent in any ranking, and competition among the states is a good thing. Fortunately for states at the bottom of the rankings, research and analysis such as Rich States, Poor States provides an open playbook for prosperity.
17 of the 30 charges carry the death penalty, and Jokar Tsarneav sat in the courtroom listening to each ‘guilty’ verdict being read for all charges. He showed no emotion. The jury was shown every piece of evidence, each video captured, including broken bodies.
Now that the trial is over, the sentencing phase begins as these are all Federal charges. Sentencing will commence next week.
“She has stood up to the plate in the kinds of cases that bring the greatest disdain from the public,” as Gerald Goldstein, a Texas lawyer who knows her well, told the newspaper.
She represented Ted Kaczynski, known as the Unabomber, and al-Qaeda operative Zacarias Moussaoui. Another one of her clients, Jared Lee Loughner, shot and killed six people and wounded Congresswoman Gabrielle Giffords.
Dzhokhar Tsarnaev has been found guilty of carrying out the 2013 Boston Marathon bombings, but what do we know about him?
A second-year medical student. An all-star wrestler. Recipient of a $2,500 (£1,635) scholarship for promising school children.
These are some of the superlatives that described the man behind the deadliest terror attack on US soil since 9/11.
Tsarnaev and his elder brother, Tamerlan, planted bombs close to the finish line of the Boston Marathon two years ago.
When the brothers’ bombs exploded on 15 April 2013, killing three and injuring over 260 people, friends of Tsarnaev expressed shock at the news and described him as a popular teenager.
The older brother was killed in shootout with police on 18 April. Tsarnaev fled the shootout and was captured a day later, after being found hiding a boat in the backyard of a house in Watertown – a suburb of Boston.
The brothers had been living in the Massachusetts town of Cambridge, home of the prestigious Harvard University. Tsarnaev attended the University of Massachusetts, and, according to his father, was studying medicine with aspirations of becoming a brain surgeon.
Ethnic Chechens, the family emigrated to the US in 2002.
Their route from the troubled Caucasus region of southern Russia to the US is not exactly clear.
They are thought to have lived in Kyrgyzstan, a Central Asian republic which is home to many Chechen refugees who were deported under Stalin. Tsarnaev is thought to have have been born there in 1994.
Chechnya is a predominantly Muslim area that has fought for full independence from Russian in the past.
The family was forced to flee to the neighbouring Russian republic of Dagestan after the Second Chechen War broke out in 1999.
Three years later, they made their way to the US. Tsarnaev became an American citizen in 2012.
A large manhunt was launched in the days following the bombing
Shortly before the bombing, the brothers’ father, Anzor Tsarnaev, moved back to Dagestan following a divorce from his wife.
In the wake of the bombing, Anzor Tsarnaev told the BBC he believed the secret services had frame his sons.
Both had attended the Cambridge Rindge and Latin School.
Tsarnaev’s Facebook profile listed “Islam” as his world view and said his life goals as “career and money”. On the Russian social networking site VKontakte he was a member of various Chechen groups.
Rolling Stone’s decision to feature Mr Tsarnaev on its cover prompted an uproar
Shortly after the bombings, the brothers’ uncle, Ruslan Tsarni, said the brothers had “put shame on our family and on the entire Chechen ethnicity,” and noted that he had not seen his nephews since December 2005.
There had never been any apparent sign of “hatred toward the US” or else he would have turned them over to the police himself, he said.
He went on to describe the brothers as “being losers,” when asked what might have provoked the bombings.
“These are the only reasons I can imagine of. Anything else, anything else to do with religion, with Islam, it’s a fraud, it’s a fake,” he said.
Hillary continues to dig her way out of scandalapalooza with the two most recent issues being her server and the nefarious actions at the more than one Clinton Foundations. Still she has enlisted a hand chosen innercircle to work the media, recrafting herself into a political icon she is not. So it is important to understand who will the Democratic Party embrace if Hillary cannot rebrand herself.
There has been a large push and media chatter to promote Senator Elizabeth Warren, yet she responds with ‘no’ when asked if she is going to run. Watch that carefully as she could wind that back. In the meantime, there is another player that is working the political rooms and streets and media that you need to know about…Martin O’Malley. Here is a tip sheet for your advanced use to know his history. Be warned.
Marylanders fear what a President O’Malley could do to America
Maryland has been called “the Land of Pleasant Living,” but after eight years of the policies of Gov. Martin O’Malley, a lot of Marylanders found it not so pleasant. In a Gallup poll taken in 2014, shortly before the conclusion of Mr. O’Malley’s second term, 47 percent of voters stated that they would move out of Maryland if they could — the third-highest state in the nation from which people wanted to flee.
Taxes, jobs and better opportunity were the main reasons Marylanders gave for wanting to leave. The poll did not count the thousands of people who had already left. In 2010 after just one term with Mr. O’Malley, nearly 31,000 Maryland taxpayers had fled his unabashedly left-wing economic and social policies, with most heading south to relatively tax-friendly states.
Since 2007, 40 tax, fee and toll increases were imposed on Marylanders, taking $3.1 billion annually out of taxpayer pockets to grow a state government that Mr. O’Malley claimed was “severely undercapitalized.” His budgets grew much faster than the taxpayers’ paychecks. During his two terms as governor, spending ballooned from $28.8 billion to more than $39 billion. His budget increases of over $1 billion a year were the highest in the region.
Shamefully, his budgets were only balanced by gimmicks like raiding most dedicated funds, including the state pension fund and the Transportation Trust Fund, and dramatically expanding bonded indebtedness to replace the pilfered money. Irresponsible, deliberate underfunding of the pension fund increased the unfunded pension liability by $10.4 billion.
Mr. O’Malley has bragged that he cut state spending by $9 billion and created thousands of new jobs, but both claims are delusional. By normal math, spending has increased more than $10 billion. Since 2007, Maryland has lost 40,000 jobs, thousands of small businesses and several major corporations.
On Election Day 2014, Mr. O’Malley’s record was soundly repudiated by the voters of liberal Maryland when his lieutenant governor, who promised to carry on his policies, was trounced by Larry Hogan, a Republican businessman promising change.
Liberal Democrats who are becoming intrigued with Martin O’Malley as a potential nominee for president might want to talk to the Democrats from Dundalk. The eastern Baltimore County community includes thousands of union steelworkers who once worked at the Bethlehem Steel plant, which was recently demolished. They have never elected a Republican to any office. But in 2014, fed-up Democrats went to the polls and in a clear repudiation of the O’Malley record, replaced all their state legislators and their councilman with GOP representatives.
Martin O’Malley ran for governor promising no tax increases on families earning less than $250,000 per year. A class warrior, he promised to balance the budget on the backs of the rich. Indeed, he tried soaking the rich by levying a “millionaire tax” on high earners. In creating the new top tax bracket, Mr. O’Malley pronounced that these richest Marylanders were “willing and able to pay their fair share.”
A year later, one-third of the millionaires had disappeared from the tax rolls and it was clear that they were not so willing to pay a combined state and county income tax rate approaching 10 percent. Some of the missing millionaire tax returns could be attributed to the recession, but many wealthy Marylanders just changed their residency to states such as Florida, which has no income tax. Instead of increasing revenues by an estimated $106 million, the following year the tax took in $100 million less than the prior year.
The loss of revenues had to be made up elsewhere. The O’Malley tax burden has weighed very heavily on middle-class Marylanders. They have suffered higher taxes on their paycheck, their beer, their tobacco, their gasoline and for the privilege of flushing their toilets. And they were hit with an increased sales tax, amusement tax, vehicle titling tax, hospital provider tax, fees for birth and death certificates, huge new tolls, and even a new tax on the rain that falls on their roof.
With the help of one of the most liberal legislatures in the nation, Mr. O’Malley was successful in achieving significant and controversial changes to the social fabric of Maryland. Among his “achievements” is a Maryland Dream Act that provides in-state college tuition to illegal immigrants whom the former governor defines as “New Americans.” He signed same-sex marriage into law, successfully fought to eliminate the death penalty, and passed one of the most onerous gun laws in the country. He also burnished his environmental credentials with a government-led scheme to build costly, inefficient wind turbines off the coast of Ocean City.
Fiscal irresponsibility, left-wing social causes and environmental extremism are pillars of Mr. O’Malley’s eight-year reign in Annapolis. Expect the same liberal agenda to appear on the presidential stage as he tries to outflank Hillary Clinton on the left.
As for Marylanders, we’re not ready to have an aspiring President O’Malley do to America what he did to Maryland.
So today there was a widespread power outage in Washington DC. The State Department, the Air and Space Museum, the Capitol building and even train stations were offline. Immediately officials came out early and said it was not terrorism.
Well that could depend on the definition of terrorism and who was behind it. Somehow the story turned to an explosion at a power station in Maryland. Humm, sounds like a hack of a portioned power grid, or does it? Even the White House is pointing to the Russians. Any other president would consider this an act of war.
Washington (CNN)Russian hackers behind the damaging cyber intrusion of the State Department in recent months used that perch to penetrate sensitive parts of the White House computer system, according to U.S. officials briefed on the investigation.
While the White House has said the breach only ever affected an unclassified system, that description belies the seriousness of the intrusion. The hackers had access to sensitive information such as real-time non-public details of the president’s schedule. While such information is not classified, it is still highly sensitive and prized by foreign intelligence agencies, U.S. officials say.
The White House in October said it noticed suspicious activity in the unclassified network that serves the executive office of the president. The system has been shut down periodically to allow for security upgrades.
The FBI, Secret Service and U.S. intelligence agencies are all involved in investigating the breach, which they consider among the most sophisticated attacks ever launched against U.S. government systems. The intrusion was routed through computers around the world, as hackers often do to hide their tracks, but investigators found tell-tale codes and other markers that they believe point to hackers working for the Russian government. A spokesman for the National Security Council declined to comment. Neither the U.S. State Department or the Russian immediately embassy responded to a request for comment.
To get to the White House, the hackers first broke into the State Department, investigators believe.
The State Department computer system has been bedeviled by signs that despite efforts to lock them out, the Russian hackers have been able to reenter the system. One official says the Russian hackers have “owned” the State Department system for months and it is not clear the hackers have been fully eradicated from the system.
As in many hacks, investigators believe the White House intrusion began with a phishing email that was launched using a State Department email account that the hackers had taken over, according to the U.S. officials.
Director of National Intelligence James Clapper, in a speech at an FBI cyberconference in January, warned government officials and private businesses to teach employees what “spear phishing” looks like.
“So many times, the Chinese and others get access to our systems just by pretending to be someone else and then asking for access, and someone gives it to them,” Clapper said.
The ferocity of the Russian intrusions in recent months caught U.S. officials by surprise, leading to a reassessment of the cybersecurity threat as the U.S. and Russia increasingly confront each other over issues ranging from the Russian aggression in Ukraine to the U.S. military operations in Syria.
The attacks on the State and White House systems is one reason why Clapper told a Senate hearing in February that the “Russian cyberthreat is more severe than we have previously assessed.”
The revelations about the State Department hacks also come amid controversy over former Secretary of State Hillary Clinton’s use of a private email server to conduct government business during her time in office. Critics say her private server likely was even less safe than the State system. The Russian breach is believed to have come after Clinton departed State.
But hackers have long made Clinton and her associates targets.
The website The Smoking Gun first reported in 2013 that a hacker known as Guccifer had broken into the AOL email of Sidney Blumenthal, a friend and advisor to the Clintons, and published emails Blumenthal sent to Hillary Clinton’s private account. The emails included sensitive memos on foreign policy issues and were the first public revelation of the existence of Hillary Clinton’s private email address now at the center of controversy: [email protected]. The address is no longer in use.
Starting in 1992, the Justice Department amassed logs of virtually all telephone calls from the USA to as many as 116 countries, a model for anti-terror surveillance after Sept. 11, 2001.
WASHINGTON — The U.S. government started keeping secret records of Americans’ international telephone calls nearly a decade before the Sept. 11 terrorist attacks, harvesting billions of calls in a program that provided a blueprint for the far broader National Security Agency surveillance that followed.
For more than two decades, the Justice Department and the Drug Enforcement Administration amassed logs of virtually all telephone calls from the USA to as many as 116 countries linked to drug trafficking, current and former officials involved with the operation said. The targeted countries changed over time but included Canada, Mexico and most of Central and South America.
Federal investigators used the call records to track drug cartels’ distribution networks in the USA, allowing agents to detect previously unknown trafficking rings and money handlers. They also used the records to help rule out foreign ties to the bombing in 1995 of a federal building in Oklahoma City and to identify U.S. suspects in a wide range of other investigations.
The Justice Department revealed in January that the DEA had collected data about calls to “designated foreign countries.” But the history and vast scale of that operation have not been disclosed until now.
The now-discontinued operation, carried out by the DEA’s intelligence arm, was the government’s first known effort to gather data on Americans in bulk, sweeping up records of telephone calls made by millions of U.S. citizens regardless of whether they were suspected of a crime. It was a model for the massive phone surveillance system the NSA launched to identify terrorists after the Sept. 11 attacks. That dragnet drew sharp criticism that the government had intruded too deeply into Americans’ privacy after former NSA contractor Edward Snowden leaked it to the news media two years ago.
More than a dozen current and former law enforcement and intelligence officials described the details of the Justice Department operation to USA TODAY. Most did so on the condition of anonymity because they were not authorized to publicly discuss the intelligence program, part of which remains classified.
The DEA program did not intercept the content of Americans’ calls, but the records — which numbers were dialed and when — allowed agents to map suspects’ communications and link them to troves of other police and intelligence data. At first, the drug agency did so with help from military computers and intelligence analysts.
That data collection was “one of the most important and effective Federal drug law enforcement initiatives,” the Justice Department said in a 1998 letter to Sprint asking the telecom giant to turn over its call records. The previously undisclosed letter was signed by the head of the department’s Narcotics and Dangerous Drugs Section, Mary Lee Warren, who wrote that the operation had “been approved at the highest levels of Federal law enforcement authority,” including then-Attorney General Janet Reno and her deputy, Eric Holder.
The data collection began in 1992 during the administration of President George H.W. Bush, nine years before his son, President George W. Bush, authorized the NSA to gather its own logs of Americans’ phone calls in 2001. It was approved by top Justice Department officials in four presidential administrations and detailed in occasional briefings to members of Congress but otherwise had little independent oversight, according to officials involved with running it.
The DEA used its data collection extensively and in ways that the NSA is now prohibited from doing. Agents gathered the records without court approval, searched them more often in a day than the spy agency does in a year and automatically linked the numbers the agency gathered to large electronic collections of investigative reports, domestic call records accumulated by its agents and intelligence data from overseas, it even use 800 numbers for business too!
The result was “a treasure trove of very important information on trafficking,” former DEA administrator Thomas Constantine said in an interview.
The extent of that surveillance alarmed privacy advocates, who questioned its legality. “This was aimed squarely at Americans,” said Mark Rumold, an attorney with the Electronic Frontier Foundation. “That’s very significant from a constitutional perspective.”
Holder halted the data collection in September 2013 amid the fallout from Snowden’s revelations about other surveillance programs. In its place, current and former officials said the drug agency sends telecom companies daily subpoenas for international calling records involving only phone numbers that agents suspect are linked to the drug trade or other crimes — sometimes a thousand or more numbers a day.
Tuesday, Justice Department spokesman Patrick Rodenbush said the DEA “is no longer collecting bulk telephony metadata from U.S. service providers.” A DEA spokesman declined to comment.
HARVESTING DATA TO BATTLE CARTELS
The DEA began assembling a data-gathering program in the 1980s as the government searched for new ways to battle Colombian drug cartels. Neither informants nor undercover agents had been enough to crack the cartels’ infrastructure. So the agency’s intelligence arm turned its attention to the groups’ communication networks.
Calling records – often called “toll records” – offered one way to do that. Toll records are comparable to what appears on a phone bill – the numbers a person dialed, the date and time of the call, its duration and how it was paid for. By then, DEA agents had decades of experience gathering toll records of people they suspected were linked to drug trafficking, albeit one person at a time. In the late 1980s and early 1990s, officials said the agency had little way to make sense of the data their agents accumulated and almost no ability to use them to ferret out new cartel connections. Some agents used legal pads.
“We were drowning in toll records,” a former intelligence official said.
The DEA asked the Pentagon for help. The military responded with a pair of supercomputers and intelligence analysts who had experience tracking the communication patterns of Soviet military units. “What they discovered was that the incident of a communication was perhaps as important as the content of a communication,” a former Justice Department official said.
The military installed the supercomputers on the fifth floor of the DEA’s headquarters, across from a shopping mall in Arlington, Va.
The system they built ultimately allowed the drug agency to stitch together huge collections of data to map trafficking and money laundering networks both overseas and within the USA. It allowed agents to link the call records its agents gathered domestically with calling data the DEA and intelligence agencies had acquired outside the USA. (In some cases, officials said the DEA paid employees of foreign telecom firms for copies of call logs and subscriber lists.) And it eventually allowed agents to cross-reference all of that against investigative reports from the DEA, FBI and Customs Service.
The result “produced major international investigations that allowed us to take some big people,” Constantine said, though he said he could not identify particular cases.
In 1989, President George H.W. Bush proposed in his first prime-time address using “sophisticated intelligence-gathering and Defense Department technology” to disrupt drug trafficking. Three years later, when violent crime rates were at record highs, the drug agency intensified its intelligence push, launching a “kingpin strategy” to attack drug cartels by going after their finances, leadership and communication.
THE START OF BULK COLLECTION
In 1992, in the last months of Bush’s administration, Attorney General William Barr and his chief criminal prosecutor, Robert Mueller, gave the DEA permission to collect a much larger set of phone data to feed into that intelligence operation.
Instead of simply asking phone companies for records about calls made by people suspected of drug crimes, the Justice Department began ordering telephone companies to turn over lists of all phone calls from the USA to countries where the government determined drug traffickers operated, current and former officials said.
Barr and Mueller declined to comment, as did Barr’s deputy, George Terwilliger III, though Terwilliger said, “It has been apparent for a long time in both the law enforcement and intelligence worlds that there is a tremendous value and need to collect certain metadata to support legitimate investigations.”
The data collection was known within the agency as USTO (a play on the fact that it tracked calls from the U.S. to other countries).
The DEA obtained those records using administrative subpoenas that allow the agency to collect records “relevant or material to” federal drug investigations. Officials acknowledged it was an expansive interpretation of that authority but one that was not likely to be challenged because unlike search warrants, DEA subpoenas do not require a judge’s approval. “We knew we were stretching the definition,” a former official involved in the process said.
Officials said a few telephone companies were reluctant to provide so much information, but none challenged the subpoenas in court. Those that hesitated received letters from the Justice Department urging them to comply.
After Sprint executives expressed reservations in 1998, for example, Warren, the head of the department’s drug section, responded with a letter telling the company that “the initiative has been determined to be legally appropriate” and that turning over the call data was “appropriate and required by law.” The letter said the data would be used by authorities “to focus scarce investigative resources by means of sophisticated pattern and link analysis.”
The letter did not name other telecom firms providing records to the DEA but did tell executives that “the arrangement with Sprint being sought by the DEA is by no means unique to Sprint” and that “major service providers have been eager to support and assist law enforcement within appropriate bounds.” Former officials said the operation included records from AT&T and other telecom companies.
A spokesman for AT&T declined to comment. Sprint spokeswoman Stephanie Vinge Walsh said only that “we do comply with all state and federal laws regarding law enforcement subpoenas.”
Agents said that when the data collection began, they sought to limit its use mainly to drug investigations and turned away requests for access from the FBI and the NSA. They allowed searches of the data in terrorism cases, including the bombing of a federal building in Oklahoma City that killed 168 people in 1995, helping to rule out theories linking the attack to foreign terrorists. They allowed even broader use after Sept. 11, 2001. The DEA’s public disclosure of its program in January came in the case of a man charged with violating U.S. export restrictions by trying to send electrical equipment to Iran.
At first, officials said the DEA gathered records only of calls to a handful of countries, focusing on Colombian drug cartels and their supply lines. Its reach grew quickly, and by the late 1990s, the DEA was logging “a massive number of calls,” said a former intelligence official who supervised the program.
Former officials said they could not recall the complete list of countries included in USTO, and the coverage changed over time. The Justice Department and DEA added countries to the list if officials could establish that they were home to outfits that produced or trafficked drugs or were involved in money laundering or other drug-related crimes.
The Justice Department warned when it disclosed the program in January that the list of countries should remain secret “to protect against any disruption to prospective law enforcement cooperation.”
At its peak, the operation gathered data on calls to 116 countries, an official involved in reviewing the list said. Two other officials said they did not recall the precise number of countries, but it was more than 100. That gave the collection a considerable sweep; the U.S. government recognizes a total of 195 countries.
At one time or another, officials said, the data collection covered most of the countries in Central and South America and the Caribbean, as well as others in western Africa, Europe and Asia. It included Afghanistan, Pakistan, Iran, Italy, Mexico and Canada.
The DEA often — though not always — notified foreign governments it was collecting call records, in part to make sure its agents would not be expelled if the program was discovered. In some cases, the DEA provided some of that information to foreign law enforcement agencies to help them build their own investigations, officials said.
The DEA did not have a real-time connection to phone companies’ data; instead, the companies regularly provided copies of their call logs, first on computer disks and later over a private network. Agents who used the system said the numbers they saw were seldom more than a few days old.
The database did not include callers’ names or other identifying data. Officials said agents often were able to identify individuals associated with telephone numbers flagged by the analysis, either by cross-referencing them against other databases or by sending follow-up requests to the phone companies.
To keep the program secret, the DEA sought not to use the information as evidence in criminal prosecutions or in its justification for warrants or other searches. Instead, its Special Operations Division passed the data to field agents as tips to help them find new targets or focus existing investigations, a process approved by Justice Department lawyers. Many of those tips were classified because the DEA phone searches drew on other intelligence data.
That practice sparked a furor when the Reuters news agency reported in 2013 that the DEA trained agents to conceal the sources of those tips from judges and defense lawyers. Reuters said the tips were based on wiretaps, foreign intelligence and a DEA database of telephone calls gathered through routine subpoenas and search warrants.
As a result, “the government short-circuited any debate about the legality and wisdom of putting the call records of millions of innocent people in the hands of the DEA,” American Civil Liberties Union lawyer Patrick Toomey said.
A BLUEPRINT FOR BROADER SURVEILLANCE
The NSA began collecting its own data on Americans’ phone calls within months of Sept. 11, 2001, as a way to identify potential terrorists within the USA. At first, it did so without court approval. In 2006, after The New York Times and USA TODAY began reporting on the surveillance program, President George W. Bush’s administration brought it under the Foreign Intelligence Surveillance Act, which allows the government to use secret court orders to get access to records relevant to national security investigations. Unlike the DEA, the NSA also gathered logs of calls within the USA.
The similarities between the NSA program and the DEA operation established a decade earlier are striking – too much so to have been a coincidence, people familiar with the programs said. Former NSA general counsel Stewart Baker said, “It’s very hard to see (the DEA operation) as anything other than the precursor” to the NSA’s terrorist surveillance.
Both operations relied on an expansive interpretation of the word “relevant,” for example — one that allowed the government to collect vast amounts of information on the premise that some tiny fraction of it would be useful to investigators. Both used similar internal safeguards, requiring analysts to certify that they had “reasonable articulable suspicion” – a comparatively low legal threshold – that a phone number was linked to a drug or intelligence case before they could query the records.
“The foundation of the NSA program was a mirror image of what we were doing,” said a former Justice Department official who helped oversee the surveillance. That official said he and others briefed NSA lawyers several times on the particulars of their surveillance program. Two former DEA officials also said the NSA had been briefed on the operation. The NSA declined to comment.
There were also significant differences.
For one thing, DEA analysts queried their data collection far more often. The NSA said analysts searched its telephone database only about 300 times in 2012; DEA analysts routinely performed that many searches in a day, former officials said. Beyond that, NSA analysts must have approval from a judge on the Foreign Intelligence Surveillance Court each time they want to search their own collection of phone metadata, and they do not automatically cross-reference it with other intelligence files.
Sen. Patrick Leahy, D-Vt., then the chairman of the Senate Judiciary Committee, complained last year to Holder that the DEA had been gathering phone data “in bulk” without judicial oversight. Officials said the DEA’s database was disclosed to judges only occasionally, in classified hearings.
Holder pulled the plug on the phone data collection in September 2013.
That summer, Snowden leaked a remarkable series of classified documents detailing some of the government’s most prized surveillance secrets, including the NSA’s logging of domestic phone calls and Internet traffic. Reuters and The New York Times raised questions about the drug agency’s own access to phone records.
Officials said the Justice Department told the DEA that it had determined it could not continue both surveillance programs, particularly because part of its justification for sweeping NSA surveillance was that it served national security interests, not ordinary policing. Eight months after USTO was halted, for example, department lawyers defended the spy agency’s phone dragnet in court partly on the grounds that it “serves special governmental needs above and beyond normal law enforcement.”
Three months after USTO was shut down, a review panel commissioned by President Obama urged Congress to bar the NSA from gathering telephone data on Americans in bulk. Not long after that, Obama instructed the NSA to get permission from the surveillance court before querying its phone data collection, a step the drug agency never was required to take.
The DEA stopped searching USTO in September 2013. Not long after that, it purged the database.
“It was made abundantly clear that they couldn’t defend both programs,” a former Justice Department official said. Others said Holder’s message was more direct. “He said he didn’t think we should have that information,” a former DEA official said.
By then, agents said USTO was suffering from diminishing returns. More criminals — especially the sophisticated cartel operatives the agency targeted — were communicating on Internet messaging systems that are harder for law enforcement to track.
Still, the shutdown took a toll, officials said. “It has had a major impact on investigations,” one former DEA official said.
The DEA asked the Justice Department to restart the surveillance program in December 2013. It withdrew that request when agents came up with a new solution. Every day, the agency assembles a list of the telephone numbers its agents suspect may be tied to drug trafficking. Each day, it sends electronic subpoenas — sometimes listing more than a thousand numbers — to telephone companies seeking logs of international telephone calls linked to those numbers, two official familiar with the program said.
The data collection that results is more targeted but slower and more expensive. Agents said it takes a day or more to pull together communication profiles that used to take minutes.
The White House proposed a similar approach for the NSA’s telephone surveillance program, which is set to expire June 1. That approach would halt the NSA’s bulk data collection but would give the spy agency the power to force companies to turn over records linked to particular telephone numbers, subject to a court order.
