Category Archives: DOJ, DC and inside the Beltway

There is Spying, Espionage and Stupidity

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The Virginia-based cyber security firm Mandiant recently released a report detailing one source of persistent cyber attacks, the Chinese People’s Liberation Army. Mandiant estimates that since 2006, a single Chinese army cyberattack unit has compromised “141 companies spanning 20 major industries, from information technology and telecommunications to aerospace and energy,” using a “well-defined attack methodology, honed over years and designed to steal large volumes of valuable intellectual property.”

Mandiant explains that once these hackers have infiltrated an organization’s system, they “periodically revisit the victim’s network … and steal broad categories of intellectual property, including technology blueprints, proprietary manufacturing processes, test results, business plans, pricing documents, partnership agreements, and emails and contact lists”. On average, access to a victimized network is maintained for nearly a year.

Now for the Chinese human operatives….

State Dept. contractor allegedly paid by Chinese agent to spy on Americans – yet no charges filed 

Newly unsealed court documents obtained by Fox News show a State Department contractor allegedly was paid thousands by an individual thought to be a Chinese agent in exchange for information on Americans — but despite an FBI probe, the Justice Department declined to prosecute.

A November 2014 FBI affidavit, filed in the U.S. District Court for the District of Maryland, shows the bureau investigated the contractor for her admitted contact with individuals she believed to be Chinese intelligence officers.

The affidavit from agent Timothy S. Pappa states the translator, Xiaoming Gao, was paid “thousands of dollars to provide information on U.S. persons and a U.S. government employee.”

According to the documents, she admitted these meetings took place in hotel rooms in China for years, where she reported on her “social contacts” in the U.S. to an individual who went by the name of “Teacher Zhao.”

The detailed affidavit even goes on to say the translator briefly lived, “for free,” with a State Department employee — who held a top-secret clearance and designed high-security embassies, including the U.S. compound in Islamabad, Pakistan.

The State Department employee, who was not named, initially told the FBI he didn’t discuss his job with Gao, but later changed his statement.

According to the documents, Gao also told the FBI — during interviews in 2013 — that she once told “Teacher Zhao” about the travel plans of an American and ethnic Tibetan. This person told the FBI he ended up being interrogated by Chinese intelligence officers during a trip to Tibet, and a member of his family was imprisoned.

Yet the U.S. attorney’s office in Washington, D.C., which oversaw the case, recently declined to prosecute, allowing the documents to be unsealed. The office offered no further comment. The FBI also is saying nothing beyond the court documents that were filed to search a storage unit in suburban Washington, D.C.

On its face, a former senior Justice Department official said the decision not to prosecute is perplexing, because the case was unlikely to reveal investigative sources and methods.

“It’s not clear to me, based on the court files that were unsealed, how a prosecution of this person could possibly have compromised U.S. intelligence gathering,” Thomas Dupree, former deputy assistant attorney general under the George W. Bush administration, told Fox News. “If it jeopardizes or threatens to disrupt relations with another country, so be it. That you have to draw the line somewhere, and that we need to send a message that this sort of conduct and activity simply will not be tolerated.”

The State Department confirmed Xiaoming Gao worked for the Office of Language Services over a four-year period beginning in June 2010. This would have covered the tenures of former Secretary of State Hillary Clinton and sitting Secretary John Kerry.

“She was employed as a contract interpreter until February 2014, is not employed here anymore. And so any additional questions on this, I’d refer you to the FBI,” spokeswoman Marie Harf said.

When told the FBI was referring Fox News’ questions back to State, Harf responded: “I’m referring you back to them.”

The documents do not fully explain Gao’s side of the story.

Emails and phone calls to the consulting firm, which the translator listed on the web as her employer, have gone unanswered. Fox News extended an invitation to discuss the allegations. No attorney of record was filed with the court.

 

So Goes Greece, Goes the European Union?

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Stunned Greeks React To Initial Capital Controls And The “Decree To Confiscate Reserves”, And They Are Not Happy

Earlier today, following weeks of speculation, Greece finally launched the first shot across the bow of capital controls, when it decreed that due to an “extremely urgent and unforeseen need” (ironically the need was quite foreseen since about 2010, but that is a different story), it would be “obliged” to transfer – as in confiscate – “idle cash reserves” located across the country’s local governments (i.e., various cities and municipalities) to the Greek central bank.

Several hours later the decree which was posted in the government gazette has finally percolated among the population, and the response to what even ordinary Greeks realize is now the endgame, is less than exuberant.

Bloomberg reports, that “as Greece struggles to find cash to stay afloat, local authorities say they oppose a government decision to use their reserves for short-term financing.”

“The government’s decision to seize our reserves not only raises legal and constitutional issues, but also a moral one,” said George Papanikolaou, mayor of Glyfada, the third-largest municipality in the metropolitan region of Attica after Athens and Piraeus. “We have a responsibility to serve our citizens,” Papanikolaou said by phone on Monday. Glyfada has about 16 million euros in cash reserves, he said.

George is unhappy because as recently as tomorrow, he will find there is precisely zero euros in his public bank account, as all the money has now been forcibly sequestered by the government in order to repay future Troika, pardon, IMF obligations.

Sadly for Greece, this is the only option left as the money has now fully run out: Greek Prime Minister Alexis Tsipras ordered local governments and central government entities to move their cash balances to the central bank for investment in short-term state debt.

From Bloomberg:

The decree to confiscate reserves held in commercial banks and transfer them to the Bank of Greece could raise as much as 2 billion euros ($2.15 billion), according to two people familiar with the decision. The money is needed to pay salaries and pensions at the end of the month, the people said.

 

“It is a politically and institutionally unacceptable decision,” Giorgos Patoulis, mayor of the city of Marousi and president of the Central Union of Municipalities and Communities of Greece, said in a statement on Monday.“No government to date has dared to touch the money of municipalities.”

It took the radical leftist one all of 2 months since coming to power.

And the punchline is that the use of confiscated proceeds is unclear: the government says it is to pay pensions and wages, but recall that the same government recently confiscated pensions to repay the IMF, so according to the chain of logic, the government first raided pensions, and now municipalities, just to repay the dreaded Troika.

The Athens city council and the union of municipalities and communities in Greece will convene tomorrow to debate the order, a press officer of the mayor’s office said.

And one everyone realizes what just happened, expect the riot cam and the Greek Pay-Per-Riot channel, which has been on hiatus since the summer of 2012, to be fully reactivated.

More Fleecing of Medicaid Money

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There should be a law against this…oh wait there is…well there are several. But just who is going to investigate and prosecute it?

The Health and Human Services Agency or the DoJ…not so much.

How Schools Use Medicaid Money to Pay for Truancy Officers, Deans and Healthy-Eating Magnets

At a school board meeting in Henrico County, Va., two months ago, a panel of school district officials and board members had been left speechless.

School district officials were in the midst of crafting the district’s budget for 2016, and the five-member board had just heard a presentation from Assistant Superintendent for Finance Terry Stone, who outlined a $1.1 million plan to fund more than a dozen positions at various schools.

The proposal shocked the board members, who expressed their gratitude toward Stone and her team for crafting the plan.

“That’s incredible,” board member Lisa Marshall said. “Thank you. Did you pull that one out of your hat?”

“I find that remarkable and exciting,” John Montgomery Jr., the board’s chair, said.

The additional $1.1 million came from coffers unknown to the school board, but tapped by school districts across Virginia and the country: Medicaid reimbursements.

Stone proposed using the money to hire three psychologists, three social workers, five part-time truancy workers, five part-time deans of students and reimbursements for mileage.

“To the extent that they’re used for [the Medicaid] population, it allows you to bill for additional services and increase your revenue,” Stone said at the February board meeting.

Schools provide many health and social services to students, including those who are Medicaid-eligible. Some districts shoulder the costs of these services, but can actually use Medicaid funding to pay for these services and request reimbursements.

Henrico County, located in southeastern Virginia, first began accepting Medicaid reimbursements in fiscal year 2012. That year, the district received roughly $98,000 in reimbursements. This year, officials estimate reimbursements from the federal program will total more than $1.1 million.

Guidelines for Funding

Medicaid is jointly funded by the federal and state governments, but states are in charge of administering the program. States adhere to Medicaid plans—an agreement between the state and federal government.

Schools can obtain Medicaid reimbursements through three different types of claiming, the most popular being administrative claiming. The administrative claiming program allows states to submit reimbursement claims for administrative activities that “directly support the Medicaid program.”

In order for activities to be reimbursable, they must be “found necessary by the secretary for the proper and efficient administration” of a state Medicaid plan.

Dennis Smith, former director of the Center for Medicaid and State Operations at the Centers for Medicare and Medicaid Services during President George W. Bush’s administration, told The Daily Signal that states are supposed to provide guidance to schools as to how they can use Medicaid reimbursements.

In Colorado, for example, schools must submit a plan for how they want to use the reimbursement funds. That blueprint must then be approved by the state.

However, Smith said it’s unknown whether they’re requiring school districts to adhere to guidelines governing how reimbursements are used.

John Hill, executive director of the National Alliance for Medicaid in Education, said schools are given a good deal of flexibility in how they use Medicaid reimbursements.

“The bottom line is if they wanted to put new bleachers at the football stadium, they can do that. I wouldn’t like to see that happen, but there’s nothing that could prevent it from happening,” said John Hill.

“They can be used for whatever they want to use it for,” Hill told The Daily Signal. “The bottom line is if they wanted to put new bleachers at the football stadium, they can do that. I wouldn’t like to see that happen, but there’s nothing that could prevent it from happening.”

In Henrico County, Stone told school board members that legally, there is nothing binding the funds to a specific purpose. However, the district’s school board agreed the dollars should be used for health and social services.

Smith contends that in specific instances, use of Medicaid reimbursements can be beneficial to students and within the spectrum of what Medicaid should be used for. For example, a school may be a good place for a student with developmental disabilities to receive physical therapy. Smith said it would be reasonable for a large district like Henrico to use reimbursements to hire a physical therapist.

However, administrative claiming opens the door for more abuses of Medicaid dollars. Smith said it would be questionable for a school to use reimbursements to hire deans and truancy officers.

“Medicaid should be paying for treatments and therapies,” he said. “There are bright lines that should be drawn for these things—what clearly Medicaid should and shouldn’t be paying for.”

CMS did not return The Daily Signal’s request for comment.

Controls Put in Place

Despite a claiming guide released in 2003 and guidance provided by states, Smith noted that abuse of Medicaid reimbursements is often found through independent audits conducted by the Centers for Medicare and Medicaid Services and state agencies.

As a result of such audits, school districts have been forced to return money.

In November 2013, an audit conducted by CMS of California’s administrative claiming program examined three educational entities.

The audit found that two of those three—Turlock Unified School District and Turlare County Office of Education—received improper reimbursements from 2010 to 2011.

In one instance, at Turlock Unified School District, two preschool teachers billed Medicaid and indicated that they spent every hour of their workday conducting Medicaid outreach. However, the government found they spent 50 percent of their time on school-related activities and the remaining time on Medicaid administrative activities.

The district alone had filed claims totaling $3.4 million.

According to EdSource, a website that tracks education in California, reimbursements also served to fill budget shortfalls.

Following the audit, CMS requested the state return more than $4 million in “unsupported school-based administrative costs.”

Similarly, a 2000 report from the Government Accountability Office found that “poor controls over what constitutes an allowable administrative activity cost claim have resulted in improper Medicaid reimbursements.”

In Colorado, some districts are using the reimbursements to fund wellness efforts.

Adams 12 Five Star, which serves students in the northeastern part of the state, received $1.2 million in reimbursements in 2013. The money paid for things like suicide prevention training, nursing hours and outreach to students who were uninsured.

Academy District 20, which serves Colorado Springs, used the Medicaid dollars to pay for magnets stamped with healthy snack suggestions.

“It’s been a very consistent and growing source of revenue for districts,” Bridget Beatty, coordinator for health strategies for Denver Public Schools, told Chalkbeat Colorado in 2013. “It is one of the only sources that has been increasing in the last few years.”

Hill of the National Alliance for Medicaid in Education said schools filing claims for Medicaid reimbursements “ebbs and flows” depending on a variety of different factors. However, he noted that the number of schools requesting the funds has held steady over the last four to five years.

When districts find themselves strapped for cash, Hill said, they begin exploring Medicaid reimbursements more deeply.

To rein in Medicaid reimbursements for things outside the program’s realm, Smith, the former CMS administrator, said the lines of what is and what isn’t Medicaid’s responsibility need to be brightened.

“It’s not Medicaid’s job to fund the schools,” he said.

 

 

The Clinton’s and False Philanthropy

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The Latest Available Clinton Foundation Filings Appear Deceptive

by: Charles Ortel

My interest in the Clinton Foundation financial disclosures was originally sparked by an article written in the New York Times entitled “Unease at Clinton Foundation over Finances and Ambitions.”

Considering this article with the benefit of hindsight after having poured through reams of public filings and comments made by the Clinton Foundation as well as related parties, one wonders how seriously management, directors, and other employees take their manifold legal duties, particularly when it comes to making truthful and complete disclosures.

Since August 2013, few investigative reporters have dug deeply enough below the surface of Clinton Foundation filings, seeking and finding answers to questions concerning the stated financial performance of significant constituent entities as well as the consolidated whole.

I have completed a summary review of these filings, and have attached a report which answers a few key questions. Specifically:

  1. What do Clinton Foundation disclosures tell informed readers about the stewardship of billions of dollars in “charitable contributions” sent to Little Rock, to New York City, to Boston, to London, and to Stockholm from numerous donors with modest means, from wealthy and powerful donors, and from a host of governments and government-connected benefactors?
  2. Did management exercise vigilance to ensure that the Clinton Foundation actually carried out its original and its amended tax-exempt purposes?
  3. Did directors take reasonable care, as fiduciaries, under applicable state, federal, and foreign laws to operate this charity serving, at all times, a public interest?
  4. Are all business arrangements with material “related” parties fully and adequately disclosed in annual, publicly available filings that comparable charities regularly complete on time?

Or, do the Clintons, and others who operate the Clinton Foundation, function as Robin Hood in reverse? Do they dupe small, modest income donors to enrich themselves and cronies?

Headline Conclusions of the First Foundation Report

The truth is that it is difficult to perform penetrating analysis of publicly available financial information pertaining to the Clinton Foundation because, so far, it is not technically complete in numerous material respects.

The numbers that the Clinton Foundation supplies to the public in its legally mandated filings do not add up, are frequently incorrect, and appear to be materially misleading. In numerous cases, the Clinton Foundation appears to have followed inconsistent policies adding in appropriate portions of the various activities it pursued around the world to create “consolidated” financial statements.

As the attached report notes, In several instances portions were added only for some of the years in which the entities remained in operation, artificially enhancing purported financial results. In other cases, important elements of activity were improperly characterized and combined.

Meanwhile the Foundation solicits donations even though its informational filings are not in compliance with applicable law. Regulators at Federal, State, Local, and international levels are not doing what they should do to protect the public.

Why?

And how long must we wait before regulators at home and abroad remedy rampant and persistent deficiencies in the Clinton Foundation’s operating and disclosure practices.

The attached print report details ten specific concerns about the most recent Clinton Foundation filings. I invite your considered reaction.

Read the full interim report here.

Clinton Foundation(s) Collusion

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From their website:

Creating Partnerships of Purpose We convene businesses, governments, NGOs, and individuals to improve global health and wellness, increase opportunity for women and girls, reduce childhood obesity

New Book, ‘Clinton Cash,’ Questions Foreign Donations to Foundation

The book does not hit shelves until May 5, but already the Republican Rand Paul has called its findings “big news” that will “shock people” and make voters “question” the candidacy of Hillary Rodham Clinton.

“Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich,” by Peter Schweizer — a 186-page investigation of donations made to the Clinton Foundation by foreign entities — is proving the most anticipated and feared book of a presidential cycle still in its infancy.

The book, a copy of which was obtained by The New York Times, asserts that foreign entities who made payments to the Clinton Foundation and to Mr. Clinton through high speaking fees received favors from Mrs. Clinton’s State Department in return.

“We will see a pattern of financial transactions involving the Clintons that occurred contemporaneous with favorable U.S. policy decisions benefiting those providing the funds,” Mr. Schweizer writes.

His examples include a free-trade agreement in Colombia that benefited a major foundation donor’s natural resource investments in the South American nation, development projects in the aftermath of the Haitian earthquake in 2010, and more than $1 million in payments to Mr. Clinton by a Canadian bank and major shareholder in the Keystone XL oil pipeline around the time the project was being debated in the State Department.

In the long lead up to Mrs. Clinton’s campaign announcement, aides proved adept in swatting down critical books as conservative propaganda, including Edward Klein’s “Blood Feud,” about tensions between the Clintons and the Obamas, and Daniel Halper’s “Clinton Inc.: The Audacious Rebuilding of a Political Machine.”

But “Clinton Cash” is potentially more unsettling, both because of its focused reporting and because major news organizations including The Times, The Washington Post and Fox News have exclusive agreements with the author  to pursue the story lines found in the book.

Members of the Senate Foreign Relations Committee, which includes Mr. Paul and Senator Marco Rubio of Florida, have been briefed on the book’s findings, and its contents have already made their way into several of the Republican presidential candidates’ campaigns.

Conservative “super PACs” plan to seize on “Clinton Cash,” and a pro-Democrat super PAC has already assembled a dossier on Mr. Schweizer, a speechwriting consultant to former President George W. Bush and a fellow at the conservative Hoover Institution who has contributed to the conservative website Breitbart.com, to make the case that he has a bias against Mrs. Clinton.

And the newly assembled Clinton campaign team is planning a full-court press to diminish the book as yet another conservative hit job.

A campaign spokesman, Brian Fallon, called the book part of the Republicans’ coordinated attack strategy on Mrs. Clinton “twisting previously known facts into absurd conspiracy theories,” and he said “it will not be the first work of partisan-fueled fiction about the Clintons’ record, and we know it will not be the last.”

The timing is problematic for Mrs. Clinton as she begins a campaign to position herself as a “champion for everyday Americans.”

From 2001 to 2012, the Clintons’ income was at least $136.5 million, Mr. Schweizer writes, using a figure previously reported in The Post. “During Hillary’s years of public service, the Clintons have conducted or facilitated hundreds of large transactions” with foreign governments and individuals, he writes. “Some of these transactions have put millions in their own pockets.”

The Clinton Foundation has come under scrutiny for accepting foreign donations while Mrs. Clinton served as secretary of state. Last week, the foundation revised its policy to allow donations from countries like Germany, Canada, the Netherlands and Britain but prohibit giving by other nations in the Middle East.

Mr. Schweizer’s book will be released the same day former President Bill Clinton and the Clintons’ daughter, Chelsea, will host the Clinton Global Initiative gathering with donors in Morocco, the culmination of a foundation trip to several African nations. (A chapter in the book is titled “Warlord Economics: The Clintons Do Africa.”)

There is a robust market for books critical of the Clintons. The thinly sourced “Blood Feud,” by Mr. Klein, at one point overtook Mrs. Clinton’s memoir “Hard Choices” on the best-seller list.

But whether Mr. Schweizer’s book can deliver the same sales is not clear. He writes mainly in the voice of a neutral journalist and meticulously documents his sources, including tax records and government documents, while leaving little doubt about his view of the Clintons.

His reporting largely focuses on payments made to Mr. Clinton for speeches, which increased while his wife served as secretary of state, writing that “of the 13 Clinton speeches that fetched $500,000 or more, only two occurred during the years his wife was not secretary of state.”

In 2011, Mr. Clinton made $13.3 million in speaking fees for 54 speeches, the majority of which were made overseas, the author writes.

*** Now the questions that need to be asked include what policies did the State Department, the NSC and the White House take covertly with regard to diplomacy and those affects on strategies.