Next Bailout Scandal, Un-noticed

Posted on May 21, 2014May 21, 2014 by Denise Simon

Shhh, but while the deadly VA mess at 27 medical facilities has taken the oxygen out of the country in recent days, we have missed a hidden bailout with regard to Obamacare. The next lie has bubbled to the surface, so here it is. Barack Obama told us that Obamacare would not cost taxpayers one dime, but last week, it is about to cost us much more than a dime.

Barack Obama once again altered the law and then he lied again….many in Congress are aware as a memo is circulating around members of Congress yet the media for the most part has ignored it. So, here it is for you. We don’t know yet the cost of the subsidies or the bailout….time to start asking bigger questions.

The Obama administration has quietly adjusted key provisions of its signature healthcare law to potentially make billions of additional taxpayer dollars available to the insurance industry if companies providing coverage through the Affordable Care Act lose money.

The move was buried in hundreds of pages of new regulations issued late last week. It comes as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall’s congressional elections.

Administration officials for months have denied charges by opponents that they plan a “bailout” for insurance companies providing coverage under the healthcare law.

They continue to argue that most insurers shouldn’t need to substantially increase premiums because safeguards in the healthcare law will protect them over the next several years.

But the change in regulations essentially provides insurers with another backup: If they keep rate increases modest over the next couple of years but lose money, the administration will tap federal funds as needed to cover shortfalls.

Although little noticed so far, the plan was already beginning to fuel a new round of attacks Tuesday from the healthcare law’s critics.

“If conservatives want to stop the illegal Obamacare insurance bailout before it starts they must start planning now,” wrote Conn Carroll, an editor of the right-leaning news site Townhall.com.

On Capitol Hill, Republicans on the Senate Budget Committee began circulating a memo on the issue and urging colleagues to fight what they are calling “another end-run around Congress.”

Obama administration officials said the new regulations would not put taxpayers at risk. “We are confident this three-year program will not create a shortfall,” Health and Human Services spokeswoman Erin Shields Britt said in a statement. “However, we want to be clear that in the highly unlikely event of a shortfall, HHS will use appropriations as available to fill it.”

The stakes are high for President Obama and the healthcare law.

Although more than 8 million people signed up for health coverage under the law, exceeding expectations, insurance companies in several states have been eyeing significant rate increases for next year amid concerns that their new customers are older and sicker than anticipated.

Insurers around the country have started to file proposed 2015 premiums, just as the midterm campaigns are heating up. Obamacare, as the law is often called, remains a top campaign issue, and big premium increases in states with tightly contested races could prove politically disastrous for Democrats.

If rates go up dramatically, consumers may also turn away from insurance marketplaces in some states, leading to their collapse.

Proposed increases in a few states where insurers have already filed 2015 rates have been relatively low, with several major carriers seeking just single-digit hikes. But insurers in closely watched states, such as Florida, Pennsylvania, North Carolina and Arkansas, are still preparing their filings.

“It’s absolutely paramount to keep premiums in check,” said Len Nichols, a health economist at George Mason University who has advised officials working on the law.

The state-based marketplaces, which opened last year, allow consumers who do not get health coverage at work to shop among plans that meet basic standards. Sick consumers cannot be turned away, and low- and moderate-income Americans qualify for government subsidies to offset their premiums.

To stabilize this new system, the law set up a complex system of funds, including one known as the Temporary Risk Corridors Program, that collect money from insurers and transfer it from companies with healthier, less expensive consumers to those with sicker, more costly consumers.

This system was supposed to pay for itself, as does a similar one used to shift money between drug plans in the Medicare Part D program.

But insurance industry officials have grown increasingly anxious about the new system’s adequacy.

Pressure is most acute on insurers in states where healthy consumers were allowed to remain in old plans that are not sold on the new online marketplaces, an option Obama offered to states amid a political firestorm over plan cancellations last year. The president had promised people would be able to stick with their plans.

The renewal temporarily solved a political problem for the White House, but created a new one. Maintaining these old plans kept many healthy consumers out of the marketplaces, making the pool of new customers less healthy and therefore potentially more expensive for insurers, according to experts.

In a series of White House meetings over the last several months, Obama and other senior administration officials have sought to persuade insurance company CEOs to nonetheless hold rates in check, arguing that the marketplaces would stabilize over time.

But with proposed 2015 rates beginning to come in, the administration acceded to industry demands for a clear guarantee that more money would be available to cover potential losses.

“In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers,” the regulation published Friday notes. “In that event, HHS will use other sources of funding for the risk corridor payments, subject to the availability of appropriations.”

That language allows the administration to tap funds appropriated for other health programs to supplement payments to insurers, according to administration and industry officials.

Among congressional Republicans, the decision has raised concerns. “If the program costs more than it brings in, the secretary would be able to divert money intended for other programs,” Republicans on the Senate Budget Committee warned.

Whether the new regulations will be sufficient to control rates remains unclear.

America’s Health Insurance Plans, the industry’s Washington-based lobbying arm, welcomed the administration’s move, saying in a statement that the regulations “provide important clarity about how these insurer-financed programs will work as health plans prepare their rates for 2015.”

In a note to investors this week, J.P. Morgan also noted that the new rules “should improve stability of the exchange market.”

But some insurers continue to warn of bigger increases. Larry Levitt, an insurance expert at the nonprofit Kaiser Family Foundation, cautioned that some consumers may still be in for sticker shock.

“Premium hikes will likely be modest in much of the country,” he said. “But probably not everywhere.”

Hey Barack, it IS Iran Stupid…

Posted on May 20, 2014May 20, 2014 by Denise Simon

As SecState, John Kerry continues to press Iran over the failed talks on the nuclear program, there is much more to be known that apparently the NSC at the White House has yet to learn via the media, which is how Barack Obama learns about every scandal.

John Kerry has relied heavily on the UK’s Catherine Ashton as the main voice of negotiations with Iran and now she is set to leave the post. This leaves the talks exclusively in the laps of Iran and Washington.

The other main ‘go-to’ point person working the Iranian nuclear program for John Kerry is Martin Indyk. He has a long history in foreign policy, more than John Kerry and yet, Indyk has never sided with Israel either, especially when it comes to the peace talks between Israel and the Palestinians. Remember it is Israel that is fighting so hard to exterminate the Iranian nuclear program as is Saudi Arabia. So, Indyk has been straddling both sides of the debate and talks all the way around. It was just recently that in a bar, with probably a few martinis under his belt, the truth comes out of Indyk’s mouth. For a full 30 minutes, Indyk was on a bashing Israel diatribe eliminating all fault of the Palestinians.

In the meantime, another memo was delivered to the U.S. and Barack Obama and John Kerry much less the NSC apparently dismissed it when it comes to Iran recruiting Afghan fighters with full salaries to join the jihad in Syria. This has sparked a full Parliament outrage and an investigation is underway with exactly what Iran’s mission is.

Not to be omitted, the Iranian Revolutionary Guard Corps has gone full blown high tech and we cannot forget that U.S. drone that ended up in Iran’s possession.

‘The unveiling of an Iranian copy of the Lockheed Martin RQ-170 unmanned aerial vehicle (UAV) overshadowed other, potentially more significant, revelations that emerged when Supreme Leader Grand Ayatollah Ali Khamenei visited the Islamic Revolution Guards Corps (IRGC) Aerospace Force on 11 May. An operational anti-radiation version of the Fateh-110 would in theory allow Iran to suppress the radars essential to the ballistic missile defence systems deployed in the Arab Gulf states.’

We also in summary cannot overlook what is really happening to Christians in the region.

“The growing number of Iranian Christians fleeing their homeland to come to Germany should alarm us that Iran’s regime is getting more and more radicalized and repressive – on a daily basis,” Saba Farzan, a German-Iranian expert on human rights, told FoxNews.com.

A telling example of Iran’s heavy-handed crackdown on Christians is the case of a 40-something Iranian woman named Afsaneh. A spiritual display brought down the full force of Tehran’s hard-line regime.

“I was so excited about Christmas that I put up a tree in my home and work,” Afsaneh told The Guardian.

However, she along with her cousin would pay a steep price for their embrace of the Christian faith in the Sharia-dominated Islamic Republic. Iranian authorities imprisoned both converts and imposed more than 70 lashes on Afsaneh and her cousin for merely practicing Christianity.

Remember through all of this neither Barack Obama or John Kerry have worked nor found success in releasing the American pastor held prisoner in Iran.

Iran, a state sponsor of terror continues terror, virtually unchecked by any country in the West. Next we could see Rouhani at Disneyworld.

Shhhhh, Two Other Government Secrets

Posted on May 19, 2014May 19, 2014 by Denise Simon

Do you ever wonder who your neighbor really is? Do you ever wonder how people actually are allowed into the United States? Do you ever wonder who approves visas for foreigners and what they are doing when they get here?

Sheesh:

Item one —>>

WASHINGTON — To those who lost loved ones in the suicide bombing of the American Embassy in Beirut, Lebanon, in April 1983, it is often called “the forgotten bombing” — overshadowed by an even deadlier attack on a Marine barracks at the Beirut airport six months later.

Now, a new book shines a spotlight on the embassy bombing, which killed 63 people, 17 of them American, including eight Central Intelligence Agency officers. One of those was Robert C. Ames, a C.I.A. operative who is the hero of the book, “The Good Spy: The Life and Death of Robert Ames,” by Kai Bird.

Mr. Bird explores Mr. Ames’s shadowy path in the Middle East, where he formed an unlikely friendship with the intelligence chief of the Palestine Liberation Organization and used it to try to draw the Israelis and Palestinians together in peace negotiations.

But in sifting through the long-dead embers from the embassy bombing, Mr. Bird makes a startling assertion: that an Iranian intelligence officer who defected to the United States in 2007 and is still living here under C.I.A. protection, oversaw the 1983 bombing, as well as other terrorist attacks against Americans in Lebanon.

“When it comes out that at least one of the intelligence officers associated with planning these truck bombings is living in the U.S., the relatives of these victims are going to go ballistic,” Mr. Bird said in an interview last week.

“This is a classic intelligence dilemma,” he continued. “When do you deal with bad guys? When do you agree to give them asylum? In my opinion, this goes over the line.”

Mr. Bird, who shared a Pulitzer Prize with Martin J. Sherwin for their book, “American Prometheus: The Triumph and Tragedy of J. Robert Oppenheimer,” spoke to more than 40 current and retired C.I.A. officers, though the agency declined to cooperate with him. He also consulted numerous sources in the Israeli Mossad and in Lebanon, including a Lebanese businessman with ties to the Palestine Liberation Organization.

A spokesman for the C.I.A., Todd Ebitz, declined to comment on Sunday about Mr. Bird’s assertion. “As a general rule, the C.I.A. does not comment on allegations that someone may or may not have worked as a source for the agency,” Mr. Ebitz said.

The disclosures in “The Good Spy” are timely, given that the United States is in a critical phase of negotiating a nuclear deal with Iran. The decision to grant asylum to the Iranian intelligence officer, Ali Reza Asgari, was made by the George W. Bush administration in 2007, Mr. Bird writes, because he had valuable information about Iran’s nuclear program, including that it had built a uranium enrichment facility at Natanz.

Mr. Asgari’s information has since been superseded by new disclosures, including that a second enrichment facility had been built in a mountain near the holy city of Qum. But even now, a critical negotiating issue is how many centrifuges Iran will be allowed to operate at these facilities.

On paper, Ali Reza Asgari would be a treasure trove for the C.I.A. He joined the Islamic Revolutionary Guards Corps soon after the 1979 revolution, and was sent to Lebanon in 1982, when Iran was bankrolling a wave of terrorism against Americans, through its proxy, the Islamic militant group Hezbollah. Later, he returned to Iran and rose to a senior post in the Revolutionary Guards, which oversees the nuclear program.

“He would have the crown jewels,” said Robert Baer, a retired C.I.A. agent who had his own career in the Middle East and spoke to Mr. Bird for his book.

But while Mr. Baer said Mr. Bird’s reporting is persuasive — he said he knows some of the sources the author consulted in the region — he noted that the book contains no smoking gun establishing Mr. Asgari’s whereabouts. Indeed, Mr. Asgari may no longer be in the United States.

Mr. Bird said that when he asked a former senior Bush official about the decision to grant Mr. Asgari asylum, he received a cryptic reply: “At the unclassified level, I cannot elaborate on this issue.” He cited a report in Der Spiegel, the German newsmagazine, that Mr. Asgari twice called a fellow Iranian defector — from Washington, where he had been held in a C.I.A. safe house, and from “somewhere in Texas.”

Stuart H. Newberger, a Washington lawyer who represents victims of the 1983 attack, said he believed the book was accurate, though he could not corroborate the Asgari disclosure himself. He said he had supplied Mr. Bird with trial transcripts and internal government documents he had obtained for his litigation.

“Asgari got a get-out-of-jail-free card because of the Iran nuclear issue,” Mr. Newberger said.

For the Obama administration, Mr. Bird’s revelations could be awkward. Mr. Newberger said it should make terrorism an issue in any negotiation about relaxing sanctions against Iran. But the White House has tried to keep the nuclear negotiations tightly focused on technical questions of Iran’s enrichment capability and international inspections.

“The Good Spy” is a vivid reminder of Iran’s prolific sponsorship of terrorism against the United States — a not-so-distant legacy. In January, Iran’s foreign minister and the leader of its nuclear negotiating team, Mohammad Javad Zarif, laid a wreath at the grave of Imad Mugniyeh, a lethal Hezbollah operative who the C.I.A. believes had an operational role in the embassy and barracks bombings. Mr. Mugniyeh was assassinated in 2008, probably by the Mossad, on information supplied by Mr. Asgari, who acted as his control officer during the 1980s, according to Mr. Bird.

None of this history is helpful to a White House eager to conclude a landmark nuclear deal. “People just don’t want to hear about Iranian terrorism,” Mr. Baer said. “Nobody has the appetite to dig this up. You focus on the battle you can win, which is nuclear.”

For Anne Dammarell, a retired American aid officer gravely injured in the Beirut bombing, Mr. Bird’s book solved a mystery of who masterminded the attack that nearly killed her.

But she said she was not outraged by the disclosure about Mr. Asgari. In the murky world of spying, she said, such trade-offs were sometimes necessary. “Most people understand that deals get cut,” she said. “You can be a very corrupt person and still die in your sleep.”

Item two –>

By JOSEPH FITSANAKIS | intelNews.org
Some of our longtime readers will recall the case of Dongfan “Greg” Chung, a Chinese-born American engineer for Boeing, who was convicted in 2009 of passing US space program secrets to China. The case is arguably far more important than it might have seemed at the time, as Chung was technically the first American to be jailed for economic espionage. Many at the Federal Bureau of Investigation view the Chung conviction as a landmark case for providing clear legal proof of Chinese espionage in the US. Little is known, however, about how the FBI managed to uncover Chung’s espionage activities, which are believed to have gone on for nearly three decades. In the latest issue of The New Yorker, Yudhijit Bhattachargjee reveals for the first time the fascinating background of how the Bureau got to Chung. It did so through another American engineer of Chinese origin, named Chi Mak. Unlike Chung, who was ideologically committed to Maoism and was recruited by Chinese intelligence after immigrating to the US, Mak was an accredited intelligence operative who was allegedly specifically planted in the US by the Chinese. He came to America from Hong Kong in 1979 and worked for California-based defense contractor Power Paragon. He almost immediately began stealing secrets relating to US Navy systems. The FBI first started monitoring Mak and his wife, Rebecca, in 2004, following a tip. The effort evolved in one of the Bureau’s biggest counterintelligence cases, involving elaborate physical and electronic surveillance that lasted for nearly 18 months. During that time, FBI and Naval Criminal Investigation Service agents installed surveillance cameras outside the Maks’ residence, followed the suspects around, and monitored their telephone calls. Eventually, the surveillance team managed to acquire a warrant allowing them to clandestinely enter the Maks’ home and conduct a secret search. The nondestructive entry team discovered numerous stacks of secret documents “some two or three feet high” all around the suspects’ house. Among the findings was an address book containing the names of other engineers of Chinese origin living in the state of California. That, says Bhattachargjee, was the first time the FBI came across Chung’s name. During a subsequent covert entry into Mak’s house, the surveillance team installed a surveillance camera. The information collected from the camera led the FBI to Mak’s younger brother, Tai Mak, who had been living in the US since 2001, along with his wife, Fuk Li, and their two children. It turned out that Tai was acting as a courier, transporting to China various pieces of intelligence collected by his brother. The FBI eventually managed to arrest Tai and his wife at the Los Angeles International Airport as he was preparing to leave the US, carrying an encrypted CD with secret documents stolen by his brother. In 2007, Chi Mak was sentenced to 24.5 years in prison, Tai Mak to 10 years, and Chi’s wife, Rebecca, to three years. The remaining members of the two families were deported to China.

Operation Choke Point, Choke Tubes

Posted on May 19, 2014May 19, 2014 by Denise Simon

Announced and launched in 2014, the White House in collusion with the Department of Justice created an edict in the national banking system that is allegedly to protect consumers, from what exactly is still to be determined, but Operation Choke Point leads to the assassination of private business and then it is an attack on customers. There are some bankers that are happy to comply, yet others not so much.

In a recent weekly address in Spanish, White House Director of the Domestic Policy Council Cecilia Muñoz weaved the President’s budget proposal into a fictitious narrative aimed to assure the Hispanic community that the administration’s policies will contribute to provide opportunity, economic growth, and prosperity, promising “it will grow the middle class.”

But as has all-too-often been the case during the last few years, the administration’s rhetoric concerning economic opportunity flies in the face of heavy-handed political maneuvers that destroy chances for upward mobility.

For example, the Obama administration has been employing clandestine policies to cut off easy access to cash by systematically eliminating alternative lending options. In August 2013, the Wall Street Journal reported that the Justice Department was “targeting banks that service a broad range of what it considers questionable financial ventures, including online payday lenders.” Additionally, banks like Capital One have already closed the accounts of check-cashing companies. By going after these companies, hardworking Hispanics without a bank account may not have a place to cash their paychecks.

This affects anyone who finds themselves strapped for cash, including self-employed and blue-collar workers. The administration’s regulatory assault is not an assault on the short-term lending industry, but rather on any consumer who relies on having access to cash in cash flow emergencies, especially in underserved communities. For example, two-thirds of all Hispanics work in the service industry, and they will feel the brunt of these policies more than others. In addition, alternative lenders can cater to newer immigrants without substantial credit histories — a demographic that banks fail to serve.

Contrary to the administration’s claim that these targeted financial businesses have a “disparate impact” on minorities, the truth is that these heavy-handed regulations will have a disparate impact on the country’s minorities, many of which live in communities with limited access to traditional banks. And the answer is not capping rates or creating artificial “waiting periods” as the controversial Consumer Financial Protection Bureau has considered. Those remedies will ultimately ensure that the companies will stop providing these services since they are no longer profitable.

In addition to restricting financial options for blue-collar workers, lending regulation will also hurt small-business owners and entrepreneurs, an area where Hispanics have contributed greatly to the American economy. Hispanic entrepreneurs fortified the U.S. economy by an estimated $468 billion last year. This has been pivotal for the nation’s economy, especially in the face of the economic recession.

For frame of reference, from 2010 to 2012, the total number of American entrepreneurs declined by 250,000. Yet in the same period, there were 160,000 new Hispanic entrepreneurs in the U.S.

From 1990 to 2012, entrepreneurship among Hispanics multiplied nearly 10 times that of the general population. Many of them utilized these alternative loan products for quick access to capital, capital that is harder than ever to receive from traditional banks due to the passage of the Dodd-Frank Act.

Targeting payday lenders is only the tip of the iceberg of the administration’s broader initiative, which they tellingly named Operation Choke Point, a maneuver designed to literally choke private businesses at their financial wellsprings by intimidating banks and lending institutions into compliancy. These purely political maneuvers hold no promise for actual economic recovery.

In addition to targeting short-term lenders, another goal of the Obama Administration’s Operation Choke Point is to obstruct multi-level marketing companies, where new entrepreneurs often get their start.

Take Herbalife, a company where Hispanics make up 60 percent of direct sellers. The administration opts to gut profitable companies, condemning sales practices that they judge to be inferior while at the same time initiating no real recovery measures. These policies hurt minorities, who disproportionately make up the lower echelon of workers that are forced to seek irregular forms of employment.

Government agencies and the folks who seek to empower them with more control over the lives of ordinary people are quick to claim “disparate impact” as a justification for their regulatory excesses. But in order to understand the full story, policymakers should look at the impact those very same regulations have on the economy at large, all the people whose jobs and livelihoods are tied to the impacted industries, and the disparate impact the destruction of those industries will have on underserved communities all across the country.

Without a sane analysis, efforts like Operation Choke Point can really only be interpreted as political operatives prioritizing an ideological crusade over an interest in actual economic recovery.

Now for the Choke Tube component, it is the gun dealers and the parts dealers……the backdoor method to infringe again on the 2nd Amendment.

BankUnited N.A., which dropped Top Gun Firearms Training & Supply in Miami from its customer list, declined to comment.

In a statement to The Washington Times, Bank of America said: “We would not deny banking services to an organization solely on the basis of its industry.”

The banking giant blamed a misunderstanding with the Arizona gun manufacturers McMillan Group International and American Spirit Arms.

However, the American Banking Association, the industry’s advocacy group in Washington, said businesses deemed “risky” will be frozen out of the financial system if the Justice Department continues Operation Choke Point because the regulatory burden and risk of investigation will be too great for less-specialized banks to bear.

“We’re being threatened with a regulatory regime that attempts to foist on us the obligation to monitor all types of transactions,” Richard Riese, a senior vice president at the American Bankers Association, said in the April 28 issue of American Banker. “All of this is predicated on a notion that the banks are a choke point for all businesses.”

In an interview with The Times, Mr. Riese said the cost of doing business with gun retailers outweighs the benefits for some banks, given that regulators deem the industry as “risky,” state laws vary on the sale of guns and ammunition, and the Justice Department’s enforcement.

The Independent Community Bankers of America, an association for small banks, said enforcement actions from the Justice Department are too broad and overly aggressive.

“While preventing fraud is a top concern for community banks, it needs to be balanced with ensuring that businesses and consumers that operate in accordance with applicable laws can still access payment systems,” bankers association President Camden Fine told the Justice Department in an April 7 letter. “ICBA requests that the DOJ suspend Operation Choke Point immediately and focus its resources directly on businesses that may be violating the law, rather than targeting banks providing payment services.”

Justice’s operation threatens to “close access to the financial system to law-abiding businesses, because the mere prospect of an enforcement action is sufficient to cause financial institutions to restrict access to their payment systems to only established companies that present low risks,” the organization said.

‘No statutory authority’

Regulations on the financial industry have increased over the past few years, said Thomas P. Vartanian, chairman of Dechert LLP, a global law firm specializing in regulatory and financial matters.

He noted the chilling effect of overregulation by the Financial Fraud Enforcement Task Force, an interagency behemoth that includes the departments of Commerce, Justice, Labor, Education, Homeland Security and Justice along with the Internal Revenue Service, the Securities and Exchange Commission, the Secret Service, the FBI, the Social Security Administration and the Federal Trade Commission.

“The key to effective regulation is the balancing between too little and too much regulation,” Mr. Vartanian said. “The problem here is that there are now so many regulators, including the Department of Justice, with their fingers on the scales on that balancing act.”

Congressional Republicans say the Obama administration is using its regulatory powers to shutter industries it doesn’t like. Last year, 31 Republicans accused the Justice Department and the Federal Deposit Insurance Corp. of intimidating banks and payment processors to “terminate business relationships with lawful lenders.”

In a March hearing before the Senate Banking, Housing and Urban Affairs subcommittee on consumer protection, Sen. David Vitter, Louisiana Republican, complained that several payday lenders — another industry labeled “risky” by the administration — were being dropped by their banks in his home state.

“There is a determined effort from [the Justice Department] to the regulators to cut off credit and use other tactics to force [payday lenders] out of business,” Mr. Vitter said. “I find that deeply troubling because it has no statutory basis, no statutory authority.”

In a House hearing in April, FDIC acting General Counsel Richard Osterman defended his agency’s definition of what constitutes a “risky” business — subject to money laundering or other criminal behavior — but made it clear that no bank is outright prohibited from serving any such companies.

“We have actually put out a policy statement on this issue to make it very clear from the very top that as long as financial institutions are properly managing their relationships and the risks, they’re neither prohibited nor discouraged from providing these services,” Mr. Osterman said.

“Basically, what we’re saying is, these types of programs can be, can involve high-risk activities that could create litigation risk and reputation risk for financial institutions,” he said. “So, they need to do due diligence to ensure that the folks who they’re banking are acting in a safe and sound manner.”

But the cost of that due diligence, coupled with the threat of a lawsuit for doing business with a customer in an industry the government has defined as risky, is having a chilling effect on legitimate companies such as gun dealers, said Mr. Weinstock, the Hunton & Williams lawyer.

“We are one of the most heavily regulated industries in America,” said Mr. Sirochman of American Spirit Arms. “We have to ship our guns to another federal licensed dealers for pickup. The people that are picking up the rifles have to go through a background check to make sure they don’t have any felonies. You can’t own a gun or pass the background check if you do.

“All this is, is an assault on our Second Amendment rights.”

Cyber: When War Isn’t War

Posted on May 19, 2014May 19, 2014 by Denise Simon

The most under reported war across the globe is cyber-spying. It has only been this week that Eric Holder and the Department of Justice decided to arrest a handful of Chinese that have been cyber-spying on America for years among other factions.

Cyber threats and hackers is nothing new, but it is rarely reported until it involves citizens like in the matter of Target stores last year. The question that remains officially unanswered is just why has the United States been so soft on cyber-wars against the United States? The answer is in fact foreign policy trumps everything and that should cause some real head-scratching as foreign policy under Barack Obama via Hillary Clinton and John Kerry is decayed.

There is the Syrian Electronic Army, Turkey’s RedHack, Serbia’s TeslaTeam, China has them, Russia has them, Iran has them. Hackers are the 21st century nuclear weapons. In fact nuclear weapons secrets is just what the Chinese hackers were after and are now sought by Eric Holder.

The United States brought first-of-its kind cyber-espionage charges Monday against five Chinese military officials accused of hacking into U.S. companies to gain trade secrets.

According to the indictment, hackers targeted the U.S. nuclear power, metals and solar products industries and are accused of stealing trade secrets and economic espionage. The victims are Alcoa World Alumina, Westinghouse Electric Co., Allegheny Technologies, U.S. Steel Corp., United Steelworkers Union, and SolarWorld, Attorney General Eric Holder said.

The charges underscore a longtime Obama administration goal of prosecuting state-sponsored cyber threats.

“The alleged hacking appears to have been conducted for no other reason than to advantage state-owned companies and other interests in China at the expense of businesses here in the United States,” Holder told a news conference at the Justice Department. “This is a tactic that the United States government categorically denounces.”

Said Bob Anderson Jr., executive assistant director of the FBI’s criminal, cyber response and services division: “This is the new normal. This is what you’re going to see on a recurring basis.”

In a statement, China’s Foreign Ministry said the U.S. charges were based on “fabricated facts” and jeopardize China-U.S. “cooperation and mutual trust.”

US Government: China Cited in Cyber-spying Case

“China is steadfast in upholding cybersecurity,” said the statement. “The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber theft of trade secrets. The U.S. accusation against Chinese personnel is purely ungrounded and absurd.”

The charges against the Chinese military officials come on the heels of a separate worldwide operation over the weekend that resulted in the arrest of 97 people in 16 countries who are suspected of developing, distributing or using malicious software called BlackShades, Holder said. The software allows criminals to gain surreptitious control of personal computers. An announcement on those arrests was expected for later Monday in New York.

“These two cases show that we are stepping up our cyber enforcement efforts really around the globe,” Holder said, adding that the U.S. will not tolerate these activities.

U.S. officials have previously asserted that China’s army and China-based hackers had launched attacks on American industrial and military targets, often to steal secrets or intellectual property. China has said that it faces a major threat from hackers, and the country’s military is believed to be among the biggest targets of the NSA and U.S. Cyber Command.

“It is our hope that the Chinese government will respect our criminal justice system,” Holder said.

Attorney General Eric Holder, accompanied by, from …

In recent months, Washington has been increasingly critical of what it describes as provocative Chinese actions in pursuit of territorial claims in disputed seas in East Asia. For its part, Beijing complains that the Obama administration’s attempt to redirect its foreign policy toward Asia after a decade of war in the Middle East is emboldening China’s neighbors and causing tension.

The hackers allegedly stole emails and other communications that could have helped Chinese firms learn the strategies and weaknesses of American companies involved in litigation with the Chinese government or Chinese firms.

Despite the ominous-sounding allegations, at least one of the firms downplayed the hacking.

“To our knowledge, no material information was compromised during this incident, which occurred several years ago,” said Monica Orbe, Alcoa’s director of corporate affairs. “Safeguarding our data is a top priority for Alcoa, and we continue to invest resources to protect our systems.”

Last September, President Barack Obama discussed cybersecurity issues on the sidelines of a summit in St. Petersburg, Russia, with Chinese President Xi Jinping.

“China not only does not support hacking but also opposes it,” Premier Li Keqiang said last year in a news conference when asked if China would stop hacking U.S. websites. “Let’s not point fingers at each other without evidence but do more to safeguard cyber security.”

—————————–

But hacking still does threaten common citizens and yet no one tells us much less provides the tools to protect us.

Computer hacker forums lit up last week as Federal Bureau of Investigation agents and police in 17 countries began knocking on doors, seizing computers and making arrests.

On the popular websites where cyber criminals buy and sell software kits and help each other solve problems, hackers issued warnings about police visits to their homes.

The hackers quickly guessed that a major crackdown was underway on users of the malicious software known as Blackshades.

The malware sells for as little as $40. It can be used to hijack computers remotely and turn on computer webcams, access hard drives and capture keystrokes to steal passwords — without victims ever knowing it.

Criminals have used Blackshades to commit everything from extortion to bank fraud, the FBI said.

Last week, watching it all play out were about two dozen FBI cybercrime investigators holed up in the New York FBI’s special operations center, high above lower Manhattan.

Rows of computer screens flickered with updates from police in Germany, Denmark, Canada, the Netherlands and elsewhere. Investigators followed along in real time as hundreds of search warrants were executed and suspects were interviewed.

One of the largest global cybercrime crackdowns has yielded the arrests of over 100 people linked to the Blackshades malware.

The sweep, capping a two-year operation, was coordinated so suspects didn’t have time to destroy evidence. It included the arrest in Moldova of a Swedish hacker who was a co-creator of Blackshades. Prosecutors in the Manhattan U.S. attorney’s office are expected to announce the results of the probe later Monday.

700,000 victims around the world: Inside the FBI special operations center, six large computer monitors displayed key parts of the probe. Agents kept an eye on one screen showing a popular website where Blackshades was sold. The site was taken down by the FBI.

Another monitor showed a heatmap of the world displaying the locations of the 700,000 estimated victims, whose computers have been hijacked by criminals using the Blackshades software. Splotches of green on the map indicated concentrations of infected computers in highly populated parts of the U.S., Europe, Asia and Australia.

The FBI said that in just a few years Blackshades has become one of the world’s most popular remote-administration tools, or RATs, used for cybercrime.

Leo Taddeo, chief of the FBI’s cybercrime investigations in New York, said the unprecedented coordination with so many police agencies came about because of concern about the fast growth of cybercrime businesses.

“These cyber criminals have paid employees, they have feedback from customers — other cyber criminals — to continually update and improve their product,” Taddeo said recently. While he spoke, agents took calls from counterparts working the case in more than 40 U.S. cities.

Blackshades had grown rapidly because it was marketed as off-the-shelf, easy to use software, much like legitimate consumer tax-preparation software.

“It’s very sophisticated software in that it is not very easy to detect,” Taddeo said. “It can be installed by somebody with very little skills.”

Hack victim: ‘I felt completely violated’: For victims whose personal computers were turned into weapons against them, the arrests bring reassurance.

Cassidy Wolf, the reigning Miss Teen USA, received an ominous email message in March 2013.

The email, from an unidentified sender, included nude photos of herself, obviously taken in her bedroom from her laptop. “Either you do one of the things listed below or I upload these pics and a lot more … on all your accounts for everybody to see and your dream of being a model will be transformed into a porn star,” the email said.

And so began what Wolf describes as three months of torture.

The email sender demanded better quality photos and video, and a five-minute sex show via Skype, according to FBI documents filed in court. He told her she must respond to his emails immediately — software he had installed told him when she opened his messages.

“I felt completely violated,” Wolf said in an interview. “I felt scared because I didn’t know if this person was a physical threat. My whole sense of security and trust was gone.”

A former classmate she knew, Jared Abrahams, had installed Blackshades malware on Wolf’s laptop. In March, the 20-year-old computer science student was sentenced to 18 months in prison after pleading guilty to extortion and unauthorized access of a computer.

Abrahams had been watching her from her laptop camera for a year, Wolf later learned. The laptop always sat open in her bedroom, as she played music or communicated with her friends.

Abrahams had used Blackshades to target victims from California to Maryland, and from Russia to Ireland. He used the handle “cutefuzzypuppy” to get tips on how to use malware, according to FBI documents. In all, he told the FBI, he had controlled as many as 150 computers.

Cybercriminals like Abrahams often rely on weak links in computer security, and mistakes by victims, to infect computers.

Many computer users don’t update anti-virus software. Many click on links sent in messages on social media sites such as Facebook, or in email, without knowing what they’re clicking on. In seconds, malware is downloaded. Often computer users have no idea infection has taken place.

“A hacker is going to go for the low-hanging fruit,” said Tyler Cohen Wood, a cybersecurity expert at the Defense Intelligence Agency and author of the book “Catching the Catfishers.”

Victims often don’t realize how easy they make themselves to be targeted and can better protect themselves by being careful about what they reveal online, Wood said.

Taddeo, the FBI cyber chief, said the most common way criminals have used Blackshades to target victims is by sending emails that seem legitimate, perhaps with a marketing offer, and with a link to click. “Anyone who signs on to the internet is potentially a victim of this tool,” he said.

In Wolf’s case, she received a Facebook message related to teen pageants. When her computer was infected it sent messages to other friends, whose computers also became infected.

The episode has made Wolf into a campaigner to urge young people to be better educated about online safety. She said her passwords are now more complicated and unique for each account, and she changes them often. She uses updated security software.

“I really didn’t think that everything I worked for could be lost because of this,” she said. “This can happen to anybody.”