Category Archives: DOJ, DC and inside the Beltway

Even Russia is Cheating When it Comes to Gold

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In 2012, a Russian agent (spy) who worked for a bank as cover was arrested in New York. The criminal complaint is here.

Then there were the Russian gangs (mafia) in New York in the last decade.

A former correspondent for the venerable emigre newspaper “Novoye Russkoye Slovo,” Grant has cultivated convicted murderers and extortionists as sources and landed interviews with notorious reputed crime kingpins like Ukrainian-born Semion Mogilevich, listed by the FBI on its “10 Most Wanted” list of fugitives.

When bodies began piling up in the turf wars that rocked Russian-speaking New York neighborhoods like Brighton Beach in the 1990s, it was Grant that U.S. journalists turned to to make sense of the murky motivations and underworld machinations behind the bloodshed.

Putin’s agents in America have been very busy.

Ever since Putin reclaimed the presidency last year, the trampling of the rule of law has only accelerated. It is now being used to stifle the last remnants of political opposition. There are lots of recent examples, like the bogus charges brought against Alexei Navalny, the heroic investigative blogger, and the posthumous case currently being prosecuted against, believe it or not, Sergei Magnitsky. And then there’s the case of Dmitry Gudkov and his father, Gennady.
Both men were opposition politicians in Russia’s Duma. Both supported the Sergei Magnitsky Act, which President Obama signed in December and which freezes the U.S. assets of Russian government officials who are labeled “gross human rights violators.” Putin and his underlings are understandably threatened by the new law. They have retaliated by passing a bill banning the adoptions of Russian children by Americans. (That’s right. The Putin government is getting back at the United States by punishing Russian orphans.) Gennady Gudkov, a former K.G.B. official, had built a security company, Oskord, with some 4,000 employees. Last summer the government conducted an “inspection” and found the company to have committed numerous violations. It quickly put Oskord out of business. Two months later, a committee of the Duma charged Gudkov with violating Duma rules and tossed him out of Parliament. More details here.

 

Would those Russian diamonds be fake by chance in New York?

 

Zerohedge: Over the past several years, incidents involving fake gold (usually in the form of gold-plated tungsten) have emerged every so often, usually involving Manhattan’s jewerly district, some of Europe’s bigger gold foundries, or the occasional billion dealer. But never was fake gold actually discovered in the form monetary gold, held by a bank as reserve capital and designed to fool bank regulators of a bank’s true financial state. This changed on Friday when Russia’s “Admiralty” Bank, which had its banking license revoked last week by Russia’s central bank, was reportedly using gold-plated metal as part of its “gold reserves.”

According to Russia’s Banki.ru, as part of a probe in the Admiralty bank, the central bank regulator questioned the existence of the bank’s reported quantity of precious metals held in reserve. Citing a source, Banki.ru notes that as part of its probe, instead of gold, the “regulator found gold-plated metal.”

The Russian website further adds that according to “Admiralty” bank’s financial statements, as of August 1 the bank had declared as part of its highly liquid assets precious metals amounting to 400 million roubles. The last regulatory probe of the bank was concluded in the second half of August, said one of the Banki.ru sources. Another source claims that as part of the probe, the auditor questioned the actual availability of the bank’s precious metals and found gold-painted metal.

The website notes that shortly before the bank’s license was revoked, the bank had offered its corporate clients to withdraw funds after paying a commission of 30%. This is shortly before Russia’s central bank disabled Admiralty’s electronic payment systems on September 7.

Admiralty Bank was a relatively small, ranked in 289th place among Russian banks in terms of assets. On August 1 the bank’s total assets were just above 8 billion roubles, while the monthly turnover was in the order of 40-55 billion rubles. The balance of the bank’s assets was poorly diversified: two-thirds of the bank’s assets (4.9 billion rubles) were invested in loans. The rest of the assets, about 30%, were invested in highly liquid assets.

Or at least highly liquid on paper: according to Banki.ru the key reason for the bank’s license revocation was the central bank’s insistence that the bank had insufficient reserves against possible loan losses.

The Russian central bank has not yet made an official statement.

The first question, obviously, is if a small-to-mid level Russian bank was using gold-plated metal to fool the central bank about the quality of its “gold-backed” reserves, how many other Russian banks are engaged in comparable fraud. The second question, and perhaps more relevant, is how many global banks – especially among emerging markets, where gold reserves remain a prevalent form of physical reserve accumulation – are engaging in comparable fraud.

Finally, what does this mean for gold itself, whose price on one hand is sliding with every passing day (thanks in part to what is now a record 228 ounces of paper claims on every ounce of physical gold as reported before), even as it increasingly appears there is a major global physical shortage. If the Admiralty bank’s fraud is found to be pervasive, what will happen to physical gold demand as more banks are forced to buy the yellow metal in the open market to avoid being shuttered and/or prison time for the executives?

Obama Applying Every Nasty Political Tactic to Close Gitmo

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Bypass Congress, throw in the Iran deal, sanctions, vetoes and more. The White House may even threaten Secretary of Defense Ash Carter with his job as he did with former Secretary Hagel.

A sample detainee:

File:ISN 01103, Mohammed Zahir's Guantanamo detainee assessment.pdf

 

Bid to Shutter Gitmo Roils Pentagon, White House, Congress

WASHINGTON (AP) – The Obama administration’s struggling quest to close the U.S. detention center at Guantanamo Bay, Cuba, is mired in state and federal politics. Frustrated White House and Pentagon officials are blaming each other for the slow progress releasing approved detainees and finding a new prison to house those still held.

Defense Secretary Ash Carter is facing criticism from some administration officials who complain that he has not approved enough transfers, even though 52 Guantanamo detainees are eligible. Carter’s predecessor, Chuck Hagel, was forced from the Pentagon job in part because the White House felt he was not moving quickly enough to send detainees to other countries.

Two officials said the White House is frustrated because President Barack Obama discussed the issue with Carter when he was hired this year to lead the Defense Department, and they believed Carter was on board with the White House’s plans to act faster.

Other U.S. officials note that Carter has approved some transfers and is pushing his staff to move quickly to get more to his desk. But many other proposed transfers are slogging through the bureaucracy, under review by a long list of defense, military, intelligence and other administration offices. The transfers cannot be approved unless officials believe the detainees will not return to terrorism or the battlefield upon release and that there is a host country willing to take them.

During his two years as Pentagon chief, Hagel approved 44 detainee transfers. Carter, in his first seven months, has transferred six.

Obama has promised to close the facility since he was a presidential candidate in 2008. He said it ran counter to American values to keep people in prison, many without criminal charges or due process.

Opponents have argued the detainees are essentially prisoners of war.

From a peak of 680 prisoners, 116 remain. Finding acceptable places for them has been an intractable problem.

“Finding a solution for these individuals involves complicated negotiations with international partners, extensive consultations with the leaders of the national security and legal organizations and final approval by me,” Carter told reporters.

A key player in the process is Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff. Dempsey, who spent more than three years as a commander in Iraq, continues to be very cautious in his recommendations for transfers. His opinions carry a lot of weight.

According to U.S. officials familiar with the process, Carter recently notified Congress of two transfers, and has four whose files are ready to go to Capitol Hill, likely later this month. Congress has 30 days to review the transfers before they are made public.

A number of U.S. officials familiar with the ongoing discussions spoke on condition of anonymity because they were not authorized to talk about the subject publicly.

The movement of detainees is only part of the challenge. A greater hurdle will be finding a U.S.-based prison to house the 64 detainees considered too dangerous to be sent to another country. Congress has opposed any effort to bring detainees to America, so Obama’s long-stated goal of closing Guantanamo before he leaves office in January 2017 is more likely to die on the steps of Capitol Hill.

Aware of those objections, the White House last month stalled Pentagon efforts to send a plan to Congress outlining several U.S. prisons that could be upgraded and used for the detainees. Early drafts of the plan included some rough estimates of the costs and the time needed for renovations.

U.S. officials said the administration was worried that sending the plan to Congress could affect the crucial vote on the Iran nuclear deal by infuriating lawmakers who do not want the detainees moved to the U.S. or who adamantly oppose having them in a prison in their state or district. The resolution of disapproval of the Iran deal failed in the Senate, handing Obama a victory on that issue.

Three to five civilian facilities are being eyed as potential sites, officials said. A Pentagon team has gone to military facilities in South Carolina and Kansas to develop better estimates of construction and other changes that would be needed to house the detainees as well as conduct military commission trials for those accused of war crimes.

The visits to the Navy Consolidated Brig in Charleston, South Carolina, and the United States Disciplinary Barracks at Fort Leavenworth in Kansas triggered immediate outrage from lawmakers and governors there.

Republican Govs. Nikki Haley of South Carolina and Sam Brownback of Kansas have threatened to sue the administration if detainees are brought to either state.

Both the House and Senate have pending legislation that would maintain prohibitions on transferring detainees to U.S. facilities. The Senate legislation allows the restrictions to be lifted if the White House submits a plan to close the facility and it’s approved by Congress.

GOP Sen. John McCain of Arizona, chairman of the Senate Armed Services Committee, has made it known he would consider a comprehensive plan to close Guantanamo, but said it must include answers to a number of tough legal and policy questions, including whether detainees held in the U.S. would have additional rights.

Sen. Lindsey Graham, R-S.C., has opposed using the Charleston brig because it is in a populated area.

Sen. Pat Roberts, R-Kan., has said flatly that, “Not on my watch will any terrorist be placed in Kansas.”

Carter has acknowledged the challenge of getting a U.S. facility approved by Congress, but has insisted that some lawmakers have indicated a willingness to consider a plan.

“This would be a good thing to do if – if we can all come together behind a plan to do it,” Carter told reporters. “Our responsibility is to provide them with a plan that they can consider that is a responsible one.”

 

Last February, Intercepted Phone Call Warned Europe of Refugee Crisis

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It is taught to empathize with those desperate fighters of Islamic State, they have no hope, no jobs, no values.

Europe stood still and did nothing to prepare for the fight in the Middle East, they ignored the warnings, ignored the beheadings, ignored the intelligence, ignored the kidnappings, the rapes, the seized territory, simply Europe went politically correct and froze in fear.

Islamic State warned Europe and Europe fell to the psychological warfare, the chaos and the prophecy.

ISIS threatens to send 500,000 migrants to Europe as a ‘psychological weapon’ in chilling echo of Gaddafi’s prophecy that the Mediterranean ‘will become a sea of chaos’

  • Italian press today published claims that ISIS has threatened to release the huge wave of migrants to cause chaos in Europe if they are attacked
  • And letters from jihadists show plans to hide terrorists among refugees 
  • In 2011, Muammar Gaddafi ominously predicted war would come to Libya
  • He was deposed in a violent coup and killed in October of the same year 
  • Islamic State executed 21 Egyptian Christians on Libyan beach this week
  • Crisis in Libya has led to surge in number of migrants heading for Europe

 

ISIS has threatened to flood Europe with half a million migrants from Libya in a ‘psychological’ attack against the West, it was claimed today.

Transcripts of telephone intercepts published in Italy claim to provide evidence that ISIS is threatening to send 500,000 migrants simultaneously out to sea in hundreds of boats in a ‘psychological weapon’ against Europe if there is military intervention against them in Libya.

Many would be at risk of drowning with rescue services unable to cope. But authorities fear that if numbers on this scale arrived, European cities could witness riots.

Separately, the militants hope to cement their control of Libya then cross the Mediterranean disguised as refugees, according to letters seen by Quilliam the anti-terror group, reported by the Telegraph.

ISIS had not yet made frightening inroads into Libya when he made this chilling prophecy during his last interview in March 2011.

But the Arab Spring uprising that year sparked a civil war in Libya and opposition forces – backed by NATO – deposed Gaddafi in violent coup just five months after his ominous prediction.

In October 2011, forces loyal to the country’s transitional government found the ousted leader hiding in a culvert in Sirte and killed him.

Four years later, Islamic State kidnapped 21 Egyptian Coptic Christians in Sirte – Gaddafi’s birthplace – before releasing gruesome footage of their beheading on the shores of the Mediterranean, just 220 miles south of Italy. In it the terrorists warned that they ‘will conquer Rome’.

In response, Italian security chiefs have approved plans to put 4,800 soldiers on the country’s streets to help prevent terrorist attacks.

The statement from the Interior Ministry said they would guard ‘sensitive sites’ until at least June and reports claim 500 will be deployed in Rome – where soldiers are already guarding diplomatic residences, synagogues and Jewish schools.

The troops are also expected to be deployed at tourist venues such as archaeological sites and monuments.

A treaty between Gaddafi and the Italian premier provided for joint boat patrols which curtailed the departure of migrant boats from Libya.

But, as the Libyan despot predicted back in 2011, if the Gaddafis were brought down, Islamists would exploit the power vacuum.

Still holding court in a Bedoin tent while holed up in the fortified citadel of Bab Al Azizya, Gaddafi warned: ‘If, instead of a stable government that guarantees security, these militias linked to Bin Laden take control, the Africans will move en mass towards Europe.’

He added: ‘The Mediterranean will become a sea of chaos.’

That very sea ran red with blood when Islamic State brutally executed 21 Egyptian Christians on its shores.

The accompanying video, released on Sunday, showed the men dressed in orange jumpsuits and shackled – kneeling in the sand before the militants slit their throats and watched them bleed to death.

Egypt retaliated furiously by launching coordinated airstrikes on ISIS targets in Libya.

The European powers were putting their own security at risk by helping the rebels, Gaddafi pointed out.

He told Il Giornale, the Italian newspaper owned by his former friend Silvio Berlusconi he was saddened by the attitude of his friend. They no longer spoke.

‘I am shocked at the attitude of my European friends. They have endangered and damaged a series of great security treaties in their own interest.’

Without his harsh, but effective, regime, the entire North African Mahgreb ‘would become another Gaza,’ he claimed.

The telephone transcripts, seen by Il Messaggero newspaper claimed to provide evidence ‘that IS will use the migrants as a “psychological weapon” against countries that say they want to intervene in Libya, in particular, against Italy.’

‘As soon as our country mentioned armed intervention on Libya the jihadists suggested they let drift, bound for Italy, hundreds of boats full of migrants. The figure discussed is five hundred thousand, most of the 700,000 that are on the coast waiting to board,’ the newspaper reported.

Following the dire threat Italian Prime Minister Matteo Renzi immediately backtracked from his government’s previous rhetoric saying that ‘it was not the time for military intervention’.

Foreign Minister Paolo Gentiloni said this morning that Italy does not want to embark on ‘adventures, never mind Crusades’ in Libya.

But former President Giorgio Napolitano said that the ‘biggest error’ in the post-Gaddafi’s period was the European Unions ‘lack of involvement’ in the country.

Meanwhile following direct threats on Rome, the commander of Vatican City’s 110-man Swiss Guard said his forces are ready to defend Pope Francis if ISIS attempt a strike .

Colonel Christoph Graf said ‘Following the terrorists’ threats, we’re asking the guards to be more attentive and observe peoples’ movements closely. If something happens we’re ready, as are the men of the Gendarmerie.’

If you dare, click here for the photo essay.

 

Hacking the Department of Energy, the Threat to You

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The USDOEnergy is a cabinet level department and while responsibility includes power, laboratories, it includes nuclear. The agency secretary is Earnest Moniz, most notable for being at the side of John Kerry during the Iran nuclear talks.

Hacking this agency is terrifying and added into this equation, in 1999 the FBI investigated how China obtained specific specifications for a particular nuclear device from Los Alamos National Laboratory.

Records: Energy Department struck by Cyber Attacks

USAToday: Attackers successfully compromised U.S. Department of Energy computer systems more than 150 times between 2010 and 2014, a review of federal records obtained by USA TODAY finds.

Cyber attackers successfully compromised the security of U.S. Department of Energy computer systems more than 150 times between 2010 and 2014, according to a review of federal records obtained by USA TODAY.

Incident reports submitted by federal officials and contractors since late 2010 to the Energy Department’s Joint Cybersecurity Coordination Center shows a near-consistent barrage of attempts to breach the security of critical information systems that contain sensitive data about the nation’s power grid, nuclear weapons stockpile and energy labs.

The records, obtained by USA TODAY through the Freedom of Information Act, show DOE components reported a total of 1,131 cyberattacks over a 48-month period ending in October 2014. Of those attempted cyber intrusions, 159 were successful.

“The potential for an adversary to disrupt, shut down (power systems), or worse … is real here,” said Scott White, Professor of Homeland Security and Security Management and Director of the Computing Security and Technology program at Drexel University. “It’s absolutely real.”

Energy Department officials would not say whether any sensitive data related to the operation and security of the nation’s power grid or nuclear weapons stockpile was accessed or stolen in any of the attacks, or whether foreign governments are believed to have been involved.

“DOE does not comment on ongoing investigations or possible attributions of malicious activity,” Energy Department spokesman Andrew Gumbiner said in a statement.

In all cases of malicious cybersecurity activity, Gumbiner said the Energy Department “seeks to identify indicators of compromise and other cybersecurity relevant information, which it then shares broadly amongst all DOE labs, plants, and sites as well as within the entire federal government.”

The National Nuclear Security Administration, a semi-autonomous agency within the Energy Department responsible for managing and securing the nation’s nuclear weapons stockpile, experienced 19 successful attacks during the four-year period, records show.

While information on the specific nature of the attacks was redacted from the records prior to being released, numerous Energy Department cybersecurity vulnerabilities have been identified in recent years by the department’s Office of Inspector General, an independent watchdog agency.

After a cyber attack in 2013 resulted in unauthorized access to personally identifying information for more than 104,000 Energy Department employees and contractors, auditors noted “unclear lines of responsibility” and “lack of awareness by responsible officials.” In an audit report released in October of last year, the Inspector General found 41 Energy Department servers and 14 workstations “were configured with default or easily guessed passwords.”

Felicia Jones, spokeswoman for the Energy Department Office of Inspector General, said while there have been some improvements, “threats continue and the Department cannot let down its guard.”

Records show 53 of the 159 successful intrusions from October 2010 to October 2014 were “root compromises,” meaning perpetrators gained administrative privileges to Energy Department computer systems.

Manimaran Govindarasu, a professor in the Department of Electrical and Computer Engineering at Iowa State University who studies cybersecurity issues involving the power grid, said the root compromises represent instances where intruders gained “super-user” privileges.

“That means you can do anything on the computer,” he said. “So that is definitely serious. Whether that computer was critical or just a simple office computer, we don’t know.”

Govindarasu said while there could be information in Energy Department computer systems concerning security plans or investments related to the nation’s power grid, the grid’s real-time control systems are operated by utilities and are not directly connected to the Energy Department’s computer systems.

The Energy Department federal laboratories, however, sometimes pull data on the operation of the grid from utilities for research and analysis.

Records show 90 of the 153 successful cyber intrusions over the four-year period were connected to the DOE’s Office of Science, which directs scientific research and is responsible for 10 of the nation’s federal energy laboratories.

A USA TODAY Media Network report in March found a physical or cyber attack nearly once every four days on the nation’s power infrastructure, based on an analysis of reports to the U.S. Department of Energy through a separate reporting system which requires utility companies to notify the federal agency of incidents that affect power reliability.

Amid mounting concerns, the oversight and energy subcommittees of the House Committee on Science, Space and Technology will hold a joint hearing at 10 a.m. Thursday to examine vulnerabilities of the national electric grid and the severity of various threats.

The congressional committee’s charter for Thursday’s meeting, citing USA TODAY’s report in March, notes the growing vulnerability of the nation’s increasingly sophisticated bulk electric system.

“As the electric grid continues to be modernized and become more interconnected,” the charter states, “the threat of a potential cybersecurity breach significantly increases.”