Category Archives: Insurgency

We Cant Find Them

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The UK and several other European countries have been desperate to track down Europeans fighters that went to Syria for front line AQ training and they have returned home. This has been going on for months. Only this past week did Dianne Feinstein just say on a Sunday talk show that the domestic threat by AQ jihadi fighters is growing exponentially such that she has seen the intelligence and the United States now needs to be concerned.

Well at least Feinstein did say something and put out a feeble warning. It is also interesting that the matter of drone strikes ordered by Barack Obama on U.S citizens has come back into the news reports in a small way as there are likely some others that are slated for assassination as approved by Barack Obama.

So, it must be noted that many Americans have also traveled to Syria to get front line al Qaeda training and some too have returned home, yet our own intelligence cant find them.

AQ in American

 

Western intelligence services have been warning that European and American jihadists have been flocking to Syria to fight. But they’ve been reluctant to say how many Americans have joined the extremist forces there—until now. The latest U.S. intelligence estimates say that more than 100 Americans have joined the jihad in Syria to fight alongside Sunni terrorists there.

Senior American intelligence officials tell The Daily Beast that they believe between six and 12 Americans who have gone to Syria to fight Assad have now returned to America. “We know where some are,” one senior U.S. intelligence official told The Daily Beast. “The concern is the scale of the problem we are dealing with.”

The scale of that problem by all accounts has gotten worse. Last fall, the official U.S. estimate on Americans specifically who have joined the jihad in Syria was in the low double digits. In January, the New York Times reported that at least 70 Americans have either traveled or attempted to travel to Syria. Earlier this month FBI Director James Comey told reporters that he believed “dozens” of Americans were suspected to be foreign fighters in Syria, but declined to give a more precise number.

In recent months, the U.S. intelligence community has made the tracking of all Westerners going to fight into Syria a top priority. Speaking in March before the Senate Foreign Relations Committee, Matthew Olsen, the director of the National Counter-Terrorism Center, described in vague terms an effort by the whole government to find Western citizens traveling to Syria and to track their travel.

“In light of the large foreign fighter component in Syria crisis, we are working together to gather every piece of information we can about the identity of these individuals,” he said at the time.

More recently, the issue of Western foreign fighters came up in top-level meetings between the Syrian opposition delegation and the Obama administration last week to Washington, D.C.

“We view all foreign fighters as a threat and they are not welcome. There is a convergence of interests between the moderate Syrian opposition and the international community in fighting these foreign fighters and insuring they do not use Syria as a launching pad for external attacks,” said Oubai Shabandar, a strategic communications adviser to the Syrian opposition’s foreign mission in Washington. “This was a major topic of conversation this month in meetings with the Syrian opposition delegation and top U.S. officials.”

The problem, U.S. counter-terrorism and intelligence officials tell The Daily Beast, is that there are just so many jihadists with Western passports traveling to fight in Syria that they worry some of them may slip back into the United States without being detected.

“The NSA does not have the ability to track thousands of bad guys—and on the human intelligence side, this is even more difficult,” another senior U.S. intelligence official told The Daily Beast. “So we are worried that people are slipping through the cracks.”

Olsen in his March testimony said there were thousands of foreign fighters in Syria and that hundreds of those fighters held Western passports.

“This raises our concern that radicalized individuals with extremist contacts and battlefield experience could return to their home countries to commit violence on their own initiative or participate in al Qaeda-directed plots aimed at Western targets outside of Syria,” he said. Olsen also said that a group of “al Qaeda veterans” from Afghanistan and Pakistan have gone to Syria, making the prospect of recruiting new members for the organization even more likely.

Aaron Zelin, a senior fellow at the Washington Institute for Near East Policy who closely tracks the flow of foreign fighters into Syria, said, “In the past when we’ve seen Americans go abroad to fight in foreign countries and a number of individuals have been trained to go back to attempt attacks on the homeland.” The best example he said is Faisal al-Shahzad, the Pakistani American who traveled to Taliban training camps in Pakistan and then attempted to set off a bomb in Times Square in 2010. Al-Shahzad failed to properly detonate his bomb and was reported to the New York police by a Muslim-American street vendor.

“It’s not just Americans who are going to Syria, but there are up to 3,000 European citizens from countries that have visa waivers with the United States who have also joined the jihad in Syria,” Zelin said. “This is why so many Western counter-terrorism officials are so worried, it’s much easier to get into our country with a Western passport.”

Those Americans that have gone off to fight in Syria also do not fit the typical terrorist profile. Last May, the Detroit Free Press reported that Nicole Lynn Mansfield, a convert to Islam, was killed in fighting in Syria fighting Assad. In April of 2013, a federal court charged Eric Harroun, a former U.S. Army private, with firing a rocket-propelled grenade while fighting alongside al-Nusra, al Qaeda’s official affiliate in Syria. If U.S. intelligence estimates are correct, these cases could be unfortunate harbingers of things to come.

In case you need more on this go here. This is a time to raise your own local situational awareness.

Hey Barack, it IS Iran Stupid…

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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.’

Iran HR violations

 

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.

FBI’s Comey Stunned about al Qaeda

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So Barack Obama continues to say that al Qaeda leadership has been defeated and the Director of the FBI, James Comey agrees.

Well, we have countless al Qaeda factions all over the globe and they are more bold as we have seen with the kidnapping and killing of young children by Boko Harem in Nigeria. So it defies logic that Comey is stunned to determine that the garden variety attitude in the United States and with the few allies left that is al Qaeda has not been defeated.

Drone strikes abound in Yemen, Somalia and Pakistan dropping hellfire missiles on some high value targets yet, al Qaeda factions like al Nusra, al Shabaab and Boko Harem are still out there. Perhaps James Comey’s name is not on the memo distribution list.

 

WASHINGTON — When James B. Comey was nominated last June to be director of the F.B.I., it seemed to herald the beginning of a new era at the bureau.

His predecessor, Robert S. Mueller III, began the job just days before the Sept. 11 terrorist attacks, and Mr. Mueller’s years leading the F.B.I. had one overwhelming focus: fighting terrorism. Mr. Comey was appointed a month after President Obama delivered a sweeping speech on the future of the fight against terrorism and said the United States was at a “crossroads” and needed to move off its wartime footing.

As deputy attorney general in the George W. Bush administration, Mr. Comey had questioned the legality of a National Security Agency surveillance program regarded as a major component of the president’s counterterrorism strategy. And given Mr. Comey’s earlier experience in the Justice Department prosecuting gun cases, the F.B.I. seemed likely to shift resources into more traditional criminal prosecutions.

By Mr. Comey’s own account, he also brought to the job a belief, based on news media reports, that the threat from Al Qaeda was diminished. But nine months into his tenure as director, Mr. Comey acknowledges that he underestimated the threat the United States still faces from terrorism.

“I didn’t have anywhere near the appreciation I got after I came into this job just how virulent those affiliates had become,” Mr. Comey said, referring to offshoots of Al Qaeda in Africa and in the Middle East during an interview in his sprawling office on the seventh floor of the J. Edgar Hoover Building. “There are both many more than I appreciated, and they are stronger than I appreciated.”

Based on what he now knows, Mr. Comey said, he is convinced that terrorism should remain the main focus of the Federal Bureau of Investigation. The agency he inherited from Mr. Mueller had roughly half its 16,000 agents and analysts working on national security issues, and Mr. Comey made it clear that he would not be changing those priorities.

In his speech at the National Defense University a year ago, Mr. Obama could also not have been clearer. He said that the United States was entering “a new phase,” and that “we have to recognize that the scale of the threat resembles the types of attacks we faced before 9/11.”

But for his administration, translating that vision has proved difficult. The National Security Agency has resisted demands that it change after its secret surveillance programs were disclosed in documents released by Edward J. Snowden, a former contractor. The C.I.A. has continued to operate a drone program that Mr. Obama said would be transferred to the Pentagon, and it is likely to face renewed criticism when a long-awaited report on its secret prison program is finally released.

Critics say that, at the F.B.I., Mr. Comey has chosen to continue a strategy that is no longer appropriate for the way the terrorist threat has evolved.

“The F.B.I.’s evolution since 9/11 into a domestic intelligence agency is troubling both from a civil liberties standpoint and its effectiveness,” said Mike German, a fellow at the Brennan Center for Justice’s Liberty and National Security program at New York University, “and in the face of evidence that it is ineffective, it’s troubling that Comey would embrace it.”

Mr. Comey’s defenders say he has simply accepted the reality that it still is a dangerous world.

“The problem is that as they have wanted to dial back, the threat has persisted in places like Syria, Yemen and East Africa,” said Rick Nelson, a former senior counterterrorism official with the F.B.I. “There’s still a legitimate threat and we can’t stop what we have been doing and change the model, and that has limited what Comey can do at the F.B.I.”

In briefings with senior administration officials, testimony before Congress and interviews with the news media, Mr. Comey has said that while the United States has “dramatically reduced” the “primary tumor” of Al Qaeda in Afghanistan and Pakistan, “that threat has metastasized” in places like North Africa, Yemen and the United States.

The metaphor has personal meaning for Mr. Comey, who had a malignant tumor removed from his colon eight years ago and whose mother died of cancer. Just as the United States believed it had diminished Al Qaeda in Afghanistan and Pakistan, he said, doctors believed they had defeated his mother’s cancer.

For Mr. Comey and the F.B.I., the Boston Marathon bombings in April 2013 and the scrutiny that followed have illustrated the conundrum the bureau faces 12 and a half years after planes crashed into the World Trade Center and the Pentagon.

After the inspectors general who oversee the American intelligence and law enforcement agencies released a report on whether warning signs had been missed before the bombings, a diverse group of critics seized on its findings, but for different reasons.

Local officials and congressional Republicans criticized the F.B.I. as not having done enough, saying that it should have more closely investigated Tamerlan Tsarnaev, one of the bombing suspects, after he returned to the United States from a 2012 trip to Dagestan. Civil libertarians said that it was the latest example of how the F.B.I.’s traditional approach to terrorism — deploying large numbers of agents to gather information — had failed.

“What we learned in the Boston Marathon bombing is that it wasn’t that the F.B.I. didn’t have enough information — it was drowning in information,” said Carol Rose, the executive director of the Massachusetts A.C.L.U. “If the F.B.I. and the police had done investigative work like they should be doing, they would have looked more closely” at a triple murder in 2011 that the F.B.I. now says Mr. Tsarnaev was involved in, she said.

Critics like Ms. Rose said the bombings exposed a problem that existed before the Sept. 11 attacks: that the F.B.I. needs to better investigate the information it has, not simply collect more of it. They contend that the bureau’s buildup under Mr. Mueller did not solve the problem, but made it worse.

“You had all this information coming in, and nearly all of it wasn’t helpful,” said Mr. German, a former F.B.I. agent, “so agents became accustomed to leads going nowhere and everything they opened became an exercise in how quickly you can close it.”

In the case of the Boston bombing, Russian officials had previously told the F.B.I. that Mr. Tsarnaev had become radicalized and planned to travel to Russia to join underground groups. In their report last month, the inspectors general found that the agent who investigated that lead never questioned Mr. Tsarnaev or his family about his travels, and did not reopen an investigation of him after he returned to the United States.

“The year the F.B.I. investigated the older brother, it said it did 1,000 assessments,” Mr. German said. “There weren’t 1,000 terrorists in Boston that year, and a vast majority of resources were obviously going to things that didn’t matter.”

The F.B.I. has said that it did all it could, given the information it had from the Russian government and the legal restrictions on how it conducts its investigations.

But the bureau’s focus on counterterrorism has led to criticism that a generation of agents have spent their entire careers doing nothing else. Mr. German and other critics say they never learned the basic policing skills needed for a criminal investigation. Mr. Comey hasacknowledged the problem, ordering that the F.B.I.’s newest class of recruits, scheduled to start training in June, spend significant time on criminal investigation squads. And he has given his field offices more power to devote resources to helping local authorities.

He has also spent time studying the cybersecurity issue — which Mr. Mueller has said would be one of his most significant challenges —  in an effort to determine how the bureau can be more effective in policing it.

And Mr. Comey said he also wanted to apply the lessons learned in fighting terrorism to fighting other crimes. If Congress approves, he plans to move the bureau’s head of intelligence out of the national security division and create a new intelligence branch that will amass information on crimes like fraud in an effort to more quickly identify trends and perpetrators.

Using another metaphor — this time a football one — Mr. Comey said that he envisioned the F.B.I. as a free safety who has some primary responsibilities but is often called on to help other defenders on the field.

“We have certain assigned defensive responsibilities, those are the national securities ones, but beyond that I want to look to the line of scrimmage, which is the primary line of defense, which is state and local law enforcement and say, ‘O.K. where do you need us to make a tackle?’ ” Mr. Comey said. “ ‘Do you need us to stay deep, do you need us to cover over the middle, do you need us to come up and play run support?’ And that’s very different in each game with each opponent.”

If Mr. Comey has not changed Mr. Mueller’s policies, he has brought a distinctly different style to the bureau, devoting much of his time to raising morale, which had sagged because of Mr. Mueller’s demanding approach to management as well as budget cuts ordered by Congress.

While both had a background as federal prosecutors, Mr. Mueller was a prep school and Princeton graduate who wore a white shirt nearly every day as director and stipulated that agents keep their coats on at meetings. Mr. Comey, a less intimidating figure despite being 6-foot-8, struck a more casual note with a blue shirt on his first day as director and has gone out of his way to personally connect with his agents.

He has vowed to visit every one of the 56 field offices in his first year as director, and on a recent visit to the Buffalo office explained his theory that a more informal F.B.I. might be a more effective one.

“My first day everyone showed up and everyone was dressed up looking beautiful,” he said “And I said, ‘Listen, I don’t want people for their regular staff meetings with me wearing jackets because I worry that physical buttoning-up leads to a metaphysical buttoning-up.’ ”

Shhhhh, Two Other Government Secrets

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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

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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.

 

Choke Point

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.”