Category Archives: government fraud spending collusion

The Shameful Truth at the Veterans Admin Continues

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The shame of the Veterans Administration continues. Maybe it is time to launch a criminal prosecutor or at least task the FBI to investigate the Veterans Administration. At least, falsifying government documents is a felony.

Watchdog: 900,000 vets may have pending health care requests

WASHINGTON (AP) — Nearly 900,000 military veterans have officially pending applications for health care from the Department of Veterans Affairs, the department’s inspector general said Wednesday, but “serious” problems with enrollment data make it impossible to determine how many veterans were actively seeking VA health care.

About one-third of the 867,000 veterans with pending applications are likely deceased, the report says, adding that “data limitations” prevent investigators from determining how many now-deceased veterans applied for health care benefits or when. The applications go back nearly two decades, and officials said some applicants may have died years ago.

More than half the applications listed as pending as of last year do not have application dates, and investigators “could not reliably determine how many records were associated with actual applications for enrollment” in VA health care, the report said.

The report also says VA workers incorrectly marked thousands of unprocessed health-care applications as completed and may have deleted 10,000 or more electronic “transactions” over the past five years.

Linda Halliday, the VA’s acting inspector general, said the agency’s Health Eligibility Center “has not effectively managed its business processes to ensure the consistent creation and maintenance of essential data” and recommended a multi-year plan to improve accuracy and usefulness of agency records.

Halliday’s report came in response to a whistleblower who said more than 200,000 veterans with pending applications for VA health care were likely deceased.

The inspector general’s report substantiated that claim and others, but said there was no way to tell for sure when or why the person died. Similarly, deficiencies in the VA’s information security — including a lack of audit trails and system backups — limited investigators’ ability to review some issues fully and rule out data manipulation, Halliday said.

The VA has said it has no way to purge the list of dead applicants, and said many of those listed in the report are likely to have used another type of insurance before they died.

VA spokeswoman Walinda West said Wednesday the agency has publicly acknowledged that its enrollment process is confusing and that the enrollment system, data integrity and quality “are in need of significant improvement.”

Sens. Johnny Isakson, R-Ga., and Richard Blumenthal, D-Conn., chairman and senior Democrat of the Senate Veterans Affairs Committee, said in a joint statement that the inspector general’s report pointed to “both a significant failure” by leaders at the Health Eligibility Center and “deficient oversight by the VA central office” in Washington.

The lawmakers urged VA to implement the report’s recommendations quickly to improve record keeping at the VA and “ensure that this level of blatant mismanagement does not happen again.”

As of June 30, VA has contacted 302,045 veterans by mail, asking them to submit required documents to establish eligibility, West said. To date, VA has received 36,749 responses and enrolled 34,517 veterans, she said.

“As we continue our work to contact veterans, our focus remains on improving the enrollment system to better serve veterans,” West said.

The Health Eligibility Center has removed a “purge-and-delete functionality” from a computer system used to track agency workloads, West said. VA will provide six months of data to demonstrate that any changed or deleted data on VA workloads has undergone appropriate management review, with approvals and audit trails visible, she said.

IG report: 300,000 vets died while waiting for health care at VA

WASHINGTON –  More than 300,000 American military veterans likely died while waiting for health care — and nearly twice as many are still waiting — according to a new Department of Veterans Affairs inspector general report.

The IG report says “serious” problems with enrollment data are making it impossible to determine exactly how many veterans are actively seeking health care from the VA, and how many were. For example, “data limitations” prevent investigators from determining how many now-deceased veterans applied for health care benefits or when.

But the findings would appear to confirm reports that first surfaced last year that many veterans died while awaiting care, as their applications got stuck in a system that the VA has struggled to overhaul. Some applications, the IG report says, go back nearly two decades.

The report addresses serious issues with the record-keeping itself.

More than half the applications listed as pending as of last year do not have application dates, and investigators “could not reliably determine how many records were associated with actual applications for enrollment” in VA health care, the report said.

The report also says VA workers incorrectly marked thousands of unprocessed health-care applications as completed and may have deleted 10,000 or more electronic “transactions” over the past five years.

Linda Halliday, the VA’s acting inspector general, said the agency’s Health Eligibility Center “has not effectively managed its business processes to ensure the consistent creation and maintenance of essential data” and recommended a multi-year plan to improve accuracy and usefulness of agency records.

Halliday’s report came in response to a whistleblower who said more than 200,000 veterans with pending applications for VA health care were likely deceased.

The inspector general’s report substantiated that claim and others, but said there was no way to tell for sure when or why the person died. Similarly, deficiencies in the VA’s information security — including a lack of audit trails and system backups — limited investigators’ ability to review some issues fully and rule out data manipulation, Halliday said.

The VA has said it has no way to purge the list of dead applicants, and said many of those listed in the report are likely to have used another type of insurance before they died.

VA spokeswoman Walinda West said Wednesday the agency has publicly acknowledged that its enrollment process is confusing and that the enrollment system, data integrity and quality “are in need of significant improvement.”

Sens. Johnny Isakson, R-Ga., and Richard Blumenthal, D-Conn., chairman and senior Democrat of the Senate Veterans Affairs Committee, said in a joint statement that the inspector general’s report pointed to “both a significant failure” by leaders at the Health Eligibility Center and “deficient oversight by the VA central office” in Washington.

The lawmakers urged VA to implement the report’s recommendations quickly to improve record keeping at the VA and “ensure that this level of blatant mismanagement does not happen again.”

As of June 30, VA has contacted 302,045 veterans by mail, asking them to submit required documents to establish eligibility, West said. To date, VA has received 36,749 responses and enrolled 34,517 veterans, she said.

“As we continue our work to contact veterans, our focus remains on improving the enrollment system to better serve veterans,” West said.

The Health Eligibility Center has removed a “purge-and-delete functionality” from a computer system used to track agency workloads, West said. VA will provide six months of data to demonstrate that any changed or deleted data on VA workloads has undergone appropriate management review, with approvals and audit trails visible, she said.

Democrats Met with Adversary Ambassadors, Yes Vote on Iran

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Lobby versus Lobby, Country vs. Country, Money and Influence are all the high standard in Washington DC. This is ‘ZACTLY‘ how it all works in and around the Hill.

Meanwhile, who influenced Barack Obama to rename a mountain or to demand the Washington Redskins NFL football team to seek a new name?

Democrats Admit to Being Lobbied by Russia, China and Europe Before Backing Iran Nuclear Deal

(CNSNews.com) – More than a dozen of the 34 Democratic senators who have declared their support for the Iran nuclear agreement cited arguments by America’s five negotiating partners that there would be no better deal forthcoming if the U.S. rejects this one.

On Wednesday, the number of senators to have publicly stated support for the Joint Comprehensive Plan of Action (JCPOA) climbed to 34 – all Democrats – thereby giving President Obama the backing he needs to sustain his veto of a Republican-led resolution disapproving it, which is expected to pass by mid-September.

As previously undecided senators one by one came out in support of the agreement over the past month, references in their statements to the views of the other P5+1 governments involved in the negotiations – Russia, China, Britain, France and Germany – were strikingly common.

Many of them attended a briefing by ambassadors from those countries in early August.

When she announced her support for the deal on August 6, Sen. Kirsten Gillibrand (D-N.Y.) said, “In a meeting earlier this week, when I questioned the ambassadors of our P5+1 allies, it also became clear that if we reject this deal, going back to the negotiation table is not an option.”

Four days later Sen. Amy Klobuchar (D-Minn.) said she had asked the ambassadors of the five other countries involved in the talks “detailed questions about what their countries and others would do if Congress does not approve the agreement.”

“[N]ot one of them believed that abandoning this deal would result in a better deal,” she said. Instead, “international consensus” would splinter, sanctions would unravel and Iran’s nuclear program would be left unconstrained.

On Aug. 13, Sen. Al Franken (D-Minn.) also referred to the ambassadors’ briefing.

“[S]ome say that, should the Senate reject this agreement, we would be in position to negotiate a ‘better’ one,” he wrote. “But I’ve spoken to representatives of the five nations that helped broker the deal, and they agree that this simply wouldn’t be the case.

Instead, these diplomats have told me that we would not be able to come back to the bargaining table at all, and that the sanctions regime would likely erode or even fall apart…”

“[A]t a recent meeting of leaders from our partner nations, I specifically asked the ambassadors to the U.S. from China, the United Kingdom, and Russia whether their countries would come back to negotiate again should the U.S. walk away from the deal,” Sen. Mazie Hirono (D-Hawaii) said on Aug. 17.

“They unanimously said, ‘No,’ that there was already a deal – the one before Congress.”

“I have no reason to disbelieve all five governments [Russia, China, Britain, France, Germany] speaking together,” said Sen. Sheldon Whitehouse (D-R.I.) on Aug. 18. “I have heard their warnings that if we walk away from this agreement before even giving it a try, the prospect of further multilateral negotiations yielding any better result is ‘far-fetched.’”

“This agreement is not perfect, but I have personally spoken to leaders representing the P5+1 countries and the European Union who have said quite clearly that if the United States rejects this agreement, they will not join in new negotiations for a better deal,” Sen. Debbie Stabenow (D-Mich.) said on Aug 24.

“There are those who say that we should go back to the negotiating table and try to get a better deal,” Sen. Patty Murray (D-Wash.) said on Aug. 25. “I respect that view, but I have heard directly from top ambassadors representing our P5+1 partners as well as members of the administration that starting over is not an option.”

“Earlier this month, several of my colleagues and I met with representatives of our five negotiating partners,” Sen. Thomas Carper (D-Dela.) said on Aug. 28.

“They told us bluntly that if Congress kills this deal, the broad coalition of countries imposing sanctions on Iran would collapse,” he said. “If Congress rejects this deal now, a better one will not take its place, they declared.”

Menendez challenges ‘take it or leave it’ argument

Other JCPOA supporters who mentioned having taken into account the views of the other P5+1 ambassadors included Sens. Sherrod Brown (D-Ohio), Claire McCaskill (D-Mo.), Joe Donnelly (D-Ind.), Jeff Merkley (D-Ore.), Chris Coons (D-Dela.) and Robert Casey (D-Pa.).

One of just two Democratic senators to have come out in opposition to the JCPOA, Sen. Bob Menendez (D-N.J.), challenged the notion that the other P5+1 countries would simply walk away from sanctions if the U.S. rejected the JCPOA and pushed for a better deal.

In his speech announcing his intention to vote to disapprove the deal, Menendez said the attraction of doing business with the United States would far outweigh the lure of Iran’s much smaller economy.

“Despite what some of our P5+1 ambassadors have said in trying to rally support for the agreement, and echoing the administration’s admonition, that it is a take it or leave it proposition, our P5+1 partners will still be worried about Iran’s nuclear weapon desires and the capability to achieve it,” he said.

“They, and the businesses from their countries, and elsewhere, will truly care more about their ability to do business in a U.S. economy of $17 trillion than an Iranian economy of $415 billion,” Menendez said.

He was alluding to U.S. secondary sanctions, which would close the U.S. marketplace to companies and banks that do business with Iran.

 

Meet Criminal Ebrahim Shabudin Costs Taxpayers Millions

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Securities and Exchange Commission v. Thomas S. Wu, Ebrahim Shabudin, and Thomas T. Yu 

Exec at center of first TARP bank failure gets 8 years in prison

Fraud scheme cost taxpayers more than $300 million

More from Drew Harwell at the Washington Post: In 2009, less than a year after its $300 million taxpayer-funded rescue, the United Commercial Bank burned through the cash to become America’s first bailout-boosted bank to fail during the financial meltdown.

But this week, one of the imploded bank’s former senior executives was sentenced to eight years in prison for covering up its collapsing loans, becoming one of the few high-ranking bankers to face punishment for crisis-era crimes.

Ebrahim Shabudin, a former chief credit officer for the San Francisco-based bank, falsified records to hide major loan losses from auditors and investors in what prosecutors called a “delay-and-pray” scheme, even as the bank sought and pocketed cash from the Troubled Asset Relief Program, or TARP.

The bank, which once managed nearly $11 billion in assets and ran more than 50 branches across the United States, China and Taiwan, became the ninth largest to fail since 2007 even with help from the multitrillion-dollar bailout. Its dramatic failure cost the federal fund that insures Americans’ deposits more than $675 million.

The bailout’s chief watchdog called the years-long investigation into Shabudin “one of the most significant prosecutions” for crimes in the shadow of the financial meltdown. In March, after a six-week trial, a federal jury convicted Shabudin, 66, of seven counts of conspiracy and corporate fraud, making him one of the rare high-level bankers to head to court due to crisis-era crimes.

“Shabudin had every opportunity to do the right thing, but he was motivated instead to preserve the bank’s reputation at all costs, even if it meant committing a crime,” said Christy Goldsmith Romero, the special inspector general for TARP. “He was essentially gambling with taxpayers’ bailout dollars, and it was taxpayers who ultimately lost.”

But his sentencing may do little to quiet criticism that few big fraudsters have been punished in the meltdown’s long aftermath. The watchdog has secured convictions against 200 bank officers and other officials, but most were involved in smaller community banks, not Wall Street titans like those that used taxpayer money to pave over bad bets or dole out big bonuses.

Originally specializing in lending to Chinese Americans, the bank grew aggressively through commercial real-estate loans, becoming the first U.S. financial institution to buy a Chinese bank.

Its high-risk lending nearly doubled the bank’s loan portfolio between 2004 and 2007, to more than $8 billion, and made a rising star of chief executive Thomas Shiu-Kit (“Tommy”) Wu, who in 2006 was named auditing giant Ernst & Young’s financial-services Entrepreneur of the Year.

But as the bank’s river of risky loans began to fail, Shabudin and Wu held off on downgrading loans they knew were falling apart, ordered subordinates to understate the bank’s losses by at least $65 million, and blasted out false information in press releases, earning calls and annual reports.

Federal watchdogs including from the Federal Reserve, the Consumer Financial Protection Bureau and the FBI joined the case, making Shabudin and bank senior vice president Thomas Yu the first senior bank officials charged with fraud at a bailout-boosted financial institution.

Shabudin was the bank’s third officer to be criminally convicted, after Yu and chief financial officer Craig S. On pleaded guilty to conspiracy charges late last year. An outstanding warrant is in place for Wu, the chief executive, who has not yet been apprehended.

[SIGTARP proves that some bankers aren’t too big to jail]

Though credited with helping stabilize the wobbling economy, the bailout is remembered by many for its corporate largesse, including the hundreds of millions of dollars in bonuses paid to the heads of failing banks rescued by taxpayer cash.

Yet many of SIGTARP’s cases have focused on brazen acts of accounting fraud and smaller banks’ misspent millions. In one case, the executive of Mainstreet Bank, a community bank in Missouri, used nearly $400,000 of the bank’s $1 million bailout to buy a waterfront Florida condo.

The first person convicted of stealing bailout funds, Charles Antonucci, pleaded guilty in 2010 to bribes, fraud and embezzlement while serving as president of the Manhattan-based Park Avenue Bank. He was sentenced last month to 30 months in prison, down from a potential maximum of 135 years, because prosecutors said he cooperated with the bank probe.

William K. Black, a former bank regulator and University of Missouri associate professor specializing in white-collar crime, said Shabudin’s role in only the ninth-largest bank failure highlights the failure of regulators to combat larger frauds.

The Justice Department has still “prosecuted no banking leader for leading the three epidemics of fraud that hyper-inflated the bubble, drove the financial crisis, and caused the Great Recession,” referring to appraisal, loan and secondary-market fraud.

“Thousands of elite bankers reported pathetically inadequate” estimates of their bad debts similar to this bank’s, “and they face no investigations, much less prosecutions,” Black said. “The larger bank frauds were all bailed out this time around.”

More than Half of Immigrants on Welfare

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Contrary to declaration from the White House:

How do immigrants strengthen the U.S. economy? Below is our top 10 list for ways immigrants help to grow the American economy.

  1. Immigrants start businesses. According to the Small Business Administration, immigrants are 30 percent more likely to start a business in the United States than non-immigrants, and 18 percent of all small business owners in the United States are immigrants.
  2. Immigrant-owned businesses create jobs for American workers. According to the Fiscal Policy Institute, small businesses owned by immigrants employed an estimated 4.7 million people in 2007, and according to the latest estimates, these small businesses generated more than $776 billion annually.
  3. Immigrants are also more likely to create their own jobs. According the U.S. Department of Labor, 7.5 percent of the foreign born are self-employed compared to 6.6 percent among the native-born.
  4. Immigrants develop cutting-edge technologies and companies.  According to the National Venture Capital Association, immigrants have started 25 percent of public U.S. companies that were backed by venture capital investors. This list includes Google, eBay, Yahoo!, Sun Microsystems, and Intel.
  5. Immigrants are our engineers, scientists, and innovators. According to the Census Bureau, despite making up only 16 percent of the resident population holding a bachelor’s degree or higher, immigrants represent 33 percent of engineers, 27 percent of mathematicians, statisticians, and computer scientist, and 24 percent of physical scientists. Additionally, according to the Partnership for a New American Economy, in 2011, foreign-born inventors were credited with contributing to more than 75 percent of patents issued to the top 10 patent-producing universities.
  6. Immigration boosts earnings for American workers. Increased immigration to the United States has increased the earnings of Americans with more than a high school degree. Between 1990 and 2004, increased immigration was correlated with increasing earnings of Americans by 0.7 percent and is expected to contribute to an increase of 1.8 percent over the long-term, according to a study by the University of California at Davis.
  7. Immigrants boost demand for local consumer goods. The Immigration Policy Center estimates that the purchasing power of Latinos and Asians, many of whom are immigrants, alone will reach $1.5 trillion and $775 billion, respectively, by 2015.
  8. Immigration reform legislation like the DREAM Act reduces the deficit.  According to the nonpartisan Congressional Budget Office, under the 2010 House-passed version of the DREAM Act, the federal deficit would be reduced by $2.2 billion over ten years because of increased tax revenues.
  9. Comprehensive immigration reform would create jobs. Comprehensive immigration reform could support and create up to 900,000 new jobs within three years of reform from the increase in consumer spending, according to the Center for American Progress.
  10. Comprehensive immigration reform would increase America’s GDP.The nonpartisan Congressional Budget Office found that even under low investment assumptions, comprehensive immigration reform would increase GDP by between 0.8 percent and 1.3 percent from 2012 to 2016.

Report: More than half of immigrants on welfare

USA Today: More than half of the nation’s immigrants receive some kind of government welfare, a figure that’s far higher than the native-born population’s, according to a report to be released Wednesday.

About 51% of immigrant-led households receive at least one kind of welfare benefit, including Medicaid, food stamps, school lunches and housing assistance, compared to 30% for native-led households, according to the report from the Center for Immigration Studies, a group that advocates for lower levels of immigration.

Those numbers increase for households with children, with 76% of immigrant-led households receiving welfare, compared to 52% for the native-born.

The findings are sure to fuel debate on the presidential campaign trail as Republican candidates focus on changing the nation’s immigration laws, from calls for mass deportations to ending birthright citizenship.

Steven Camarota, director of research at the center and author of the report, said that’s a much-needed conversation to make the country’s immigration system more “selective.”

“This should not be understood as some kind of defect or moral failing on the part of immigrants,” Camarota said about the findings. “Rather, what it represents is a system that allows a lot of less-educated immigrants to settle in the country, who then earn modest wages and are eligible for a very generous welfare system.”

Linda Chavez agrees with Camarota that the country’s welfare system is too large and too costly. But Chavez, a self-professed conservative who worked in President Reagan’s administration, said it’s irresponsible to say immigrants are taking advantage of the country’s welfare system any more than native-born Americans.

Chavez said today’s immigrants, like all other immigrant waves in the country’s history, start off poorer and have lower levels of education, making it unfair to compare their welfare use to the long-established native-born population. She said immigrants have larger households, making it more likely that one person in that household will receive some kind of welfare benefit. And she said many benefits counted in the study are going to U.S.-born children of immigrants, skewing the findings even more.

“When you take all of those issues into account, (the report) is less worrisome,” she said.

Chavez, president of the Becoming American Institute, a conservative group that advocates for higher levels of legal immigration to reduce illegal immigration, said politicians should be careful about using the data. Rather than focus on the fact that immigrants are initially more dependent on welfare than the U.S.-born, she said they should focus on studies that show what happens to the children of those immigrants.

“These kids who get subsidized school lunches today will go on to graduate high school … will go on to college and move up to the middle class of America,” Chavez said. “Every time we have a nativist backlash in our history, we forget that we see immigrants change very rapidly in the second generation.”

The center’s report is based on 2012 data from the Census Bureau’s Survey of Income and Program Participation. It includes immigrants who have become naturalized citizens, legal permanent residents, those on short-term visas and undocumented immigrants.

Camarota said one of the most shocking findings from the report was the high number of native-born Americans also on welfare. About 76% of immigrant households with children are on welfare, but so are 52% of native-born households with children.

“Most people have a sense that if you were to work for $10 an hour, 40 hours a week, you couldn’t be receiving welfare, could you? You couldn’t be living in public housing, could you?” he said. “The answer is yes, you can. That’s one of the most surprising things about this study.”

Other findings in the report:

  • Immigrants are more likely to be working than their native-born neighbors. The report found that 87% of immigrant households had at least one worker, compared to 76% for native households.
  • The majority of immigrants using welfare come from Central America, Mexico and the Caribbean. The use of welfare is lower for immigrants from East Asia (32%), Europe (26%) and South Asia (17%).
  • Immigrants who have been in the U.S. more than 20 years use welfare less often, but their rates remain higher than native-born households.

    • If you need some immigration advice, contact a team of immigration lawyers who will help you out.

 

Hillary Server-Gate Operative Pleas 5th?

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From this blog in an earlier post, I mentioned Brain Pagliano and he is in the news again today. Wait for it…..he is fending off a subpoena and will likely plea the Constitutional protection of the 5th Amendment. Will Hillary take down the White House?

Staffer who worked on Clinton’s private e-mail server faces subpoena

Washington Post: A former State Department staffer who worked on Hillary Rodham Clinton’s private e-mail server this week tried to fend off a subpoena to testify before Congress, saying he would assert his constitutional right not to answer questions to avoid incriminating himself.

The move by Bryan Pagliano, who had worked on Clinton’s 2008 presidential campaign before setting up the server in her New York home in 2009, came in a Monday letter from his lawyer to the House panel investigating the 2012 attack on the U.S. consulate in Benghazi, Libya.

The letter cited the ongoing FBI inquiry into the security of Clinton’s e-mail system, and it quoted a Supreme Court ruling in which justices described the Fifth Amendment as protecting “innocent men . . . who otherwise might be ensnared by ambiguous circumstances.’ ”

The FBI is investigating whether Clinton’s system — in which she exclusively used private e-mail for her work as secretary of state — may have jeopardized sensitive national security information.

Thousands of e-mails that have been released by the State Department as part of a public records lawsuit show Clinton herself writing at least six e-mails containing information that has since been deemed classified. Large portions of those e-mails were redacted before their release, on the argument that their publication could harm national security.

“While we understand that Mr. Pagliano’s response to this subpoena may be controversial in the current political environment, we hope that the members of the Select Committee will respect our client’s right to invoke the protections of the Constitution,” his attorney, Mark MacDougall, wrote.

Two other Senate committees also have contacted Pagliano in the past week, according to a copy of the letter, which was obtained by The Washington Post. The requests came from the Senate Judiciary Committee and the Homeland Security Committee, according to people familiar with the requests.

The Senate Judiciary Committee confirmed Wednesday that it sought to ask Pagliano about his work for Clinton.

“In response to questions . . . Mr. Pagliano’s legal counsel told the committee yesterday that he would plead the Fifth to any and all questions if he were compelled to testify,” a spokesperson for committee Chairman Charles E. Grassley (R-Iowa) said in a statement.

Rep. Trey Gowdy (R-S.C.), the chairman of the House Benghazi committee, had subpoenaed the computer staffer Aug. 11 and ordered that he appear for questioning before the committee Sept. 10. Gowdy also demanded that Pagliano provide documents related to the servers or systems controlled or owned by Clinton from 2009 to 2013.

Pagliano, who worked in the State Department’s information-technology department from May 2009 until February 2013, left the agency when Clinton departed as secretary. He now works for a technology contractor that provides some services to the State Department.

The committee’s ranking Democrat, Rep. Elijah Cummings (D-Md.), complained yesterday that Gowdy unilaterally issued the subpoena. He said the subpoena of a low-level aide is one of several signs that Gowdy is using the committee for the political purpose of trying to smear a Democratic presidential candidate.

“Although multiple legal experts agree there is no evidence of criminal activity, it is certainly understandable that this witness’s attorneys advised him to assert his Fifth Amendment rights, especially given the onslaught of wild and unsubstantiated accusations by Republican presidential candidates, members of Congress and others based on false leaks about the investigation,” Cummings said. “Their insatiable desire to derail Secretary Clinton’s presidential campaign at all costs has real consequences for any serious congressional effort.”

MacDougall declined to comment late Wednesday evening.

Will Hillary Clinton’s Emails Burn the White House?

DailyBeast: Counterintelligence specialists suspect that the former Secretary of State wasn’t the only member of the Obama administration emailing secrets around.
Hillary Clinton’s email problems are already causing headaches for her presidential campaign. But within American counterintelligence circles, there’s a mounting sense that the former Secretary of State may not be the only Obama administration official in trouble. This is a scandal that has the potential to spread to the White House, as well.

The Federal Bureau of Investigation can be expected to be tight-lipped, especially because this highly sensitive case is being handled by counterintelligence experts from Bureau headquarters a few blocks down Pennsylvania Avenue from the White House, not by the FBI’s Washington Field Office. That will ensure this investigation gets the needed “big picture” view, since even senior FBI agents at any given field office may only have a partial look at complex counterintelligence cases.

And this most certainly is a counterintelligence matter. There’s a widely held belief among American counterspies that foreign intelligence agencies had to be reading the emails on Hillary’s private server, particularly since it was wholly unencrypted for months. “I’d fire my staff if they weren’t getting all this,” explained one veteran Department of Defense counterintelligence official, adding: “I’d hate to be the guy in Moscow or Beijing right now who had to explain why they didn’t have all of Hillary’s email.” Given the widespread hacking that has plagued the State Department, the Pentagon, and even the White House during Obama’s presidency, senior counterintelligence officials are assuming the worst about what the Russians and Chinese know.

EmailGate has barely touched the White House directly, although it’s clear that some senior administration officials beyond the State Department were aware of Hillary’s unorthodox email and server habits, given how widely some of the emails from Clinton and her staff were forwarded around the Beltway. Obama’s inner circle may not be off-limits to the FBI for long, however, particularly since the slipshod security practices of certain senior White House officials have been a topic of discussions in the Intelligence Community for years.

Hillary Clinton was far from the only senior Obama appointee to play fast and loose with classified materials, according to Intelligence Community insiders. While most counterspies agree that Hillary’s practices—especially using her own server and having her staffers place classified information into unclassified emails, in violation of Federal law—were especially egregious, any broad-brush investigation into security matters are likely to turn up other suspects, they maintain.

“The whole administration is filled with people who can’t shoot straight when it comes to classified,” an Intelligence Community official explained to me this week. Three U.S. officials suggested that Susan Rice, the National Security Adviser, might be at particular risk if a classified information probe goes wide. But it should be noted that Rice has made all sorts of enemies on the security establishment for her prickly demeanor, use of coarse language, and  strategic missteps.

However, Clinton should take no comfort from the fact that others may be in trouble with the FBI too. Just how many of her “unclassified” emails were actually classified is a matter of dispute that will take months for the FBI to resolve with assistance from the State Department and Intelligence Community. The current figure bandied about, that something like 300 of the emails scanned to date by investigators contained information that should have been marked as classified, is somewhat notional at this point, not least because the Intelligence Community has yet to weigh in on most of them.

Spy agencies typically take a harder line on classification than the State Department does, including a tendency to retroactively mark as classified mundane things—for instance press reports that comment on security matters can be deemed secret—that other, less secrecy-prone agencies might not. That said, there’s little doubt that our intelligence agencies fear that the compromise engendered by Hillary’s email slipshod practices was significant.

Although it will be months before intelligence agencies have reviewed all Clinton emails, counterintelligence officials expect that the true number of classified emails on Hillary’s servers is at least many hundreds and perhaps thousands, based on the samplings seen to date.

Excuses that most of the classified emails examined to date are considered Confidential, which is the lowest level, cut no ice with many insiders. Although the compromise of information at that level is less damaging than the loss of Secret—or worse Top Secret—information, it is still a crime that’s taken seriously by counterintelligence professionals. Most of the classified that Hillary and her staff seem to have compromised dealt with diplomatic discussions, which is a grave indiscretion as far as diplomats worldwide are concerned.

“Of course they knew what they were doing, it’s a clear as day from the emails,” opined one senior official who is close to the investigation. “I’m a Democrat and this makes me sick. They were fully aware of what they were up to, and the Bureau knows it.” That Hillary and her staff at Foggy Bottom were wittingly involved in a scheme to place classified information into ostensibly unclassified emails to reside on Clinton’s personal, private server is the belief of every investigator and counterintelligence official I’ve spoken with recently, and all were at pains to maintain that this misconduct was felonious.

It’s clear that many people inside the State Department had to be aware, at least to some degree, of what Clinton and her inner staff were engaged in. How far that knowledge went is a key question that the FBI is examining. The name Patrick Kennedy pops up frequently. A controversial character, Kennedy is the State Department’s undersecretary for management (hence his Foggy Bottom nickname “M”). A longtime Clinton protégé, Kennedy is believed by many to be the key to this case, since his sign-off likely would have been needed for some of Clinton’s unorthodox arrangements.