Hello FBI, What about this $125 Billion?

Posted on October 9, 2015October 9, 2015 by Denise Simon

Where is the U.S. Department of Treasury? Where is the White House? (rhetorical)

By the hour scandals come out of the Federal government where the reaction is: ‘it is under investigation’ or we have created a task force to advise on how to correct the issue or it was due to a computer glitch.

Never do we hear that someone is going to prison for malfeasance or theft or obstruction.

So how about putting pressure on the White House to call in the FBI, build the case and then move to a criminal case? Sounds great huh? Maybe even House of Cards will do a whole series on the waste, fraud and corruption, after all it is revenue generating right? Oh…one more thing, whistleblowers have a very short life and career span in Washington DC, but there are laws where Federal employees must comply and report waste, fraud and abuse….well so it goes.

Well back to the $125 billion, while that was only LAST year.

In part: What GAO Found

A number of strategies, including implementing preventive controls and addressing GAO’s prior recommendations, can help agencies reduce improper payments, which have been a persistent, government-wide issue. The improper payment estimate, attributable to 124 programs across 22 agencies in fiscal year 2014, was $124.7 billion, up from $105.8 billion in fiscal year 2013. The almost $19 billion increase was primarily due to the Medicare, Medicaid, and Earned Income Tax Credit programs, which account for over 75 percent of the government-wide improper payment estimate. Federal spending in Medicare and Medicaid is expected to significantly increase, so it is critical that actions are taken to reduce improper payments in these programs. Moreover, for fiscal year 2014, federal entities reported estimated error rates for 10 risk-susceptible programs that exceeded 10 percent. Recent laws and guidance have focused attention on improper payments, but incomplete or understated estimates and noncompliance with criteria listed in federal law hinder the government’s ability to assess the full extent of improper payments and implement strategies to reduce them. For example, for fiscal year 2014, 2 federal agencies did not report improper payment estimates for 4 risk-susceptible programs, and 5 programs with improper payment estimates greater than $1 billion were noncompliant with federal requirements for 3 consecutive years. Identifying root causes of improper payments can help agencies target corrective actions, and GAO has made numerous recommendations that could help reduce improper payments. For example, strengthening verification of Medicare providers and suppliers could help reduce improper payments. GAO has stated that continued agency attention is needed to (1) identify susceptible programs, (2) develop reliable estimation methodologies, (3) report as required, and (4) implement effective corrective actions based on root cause analysis. Absent such continued efforts, the federal government cannot be assured that taxpayer funds are adequately safeguarded. The full report is here.

Government burns $125B in improper payments, GAO says

FederalTimes:

A Government Accountability Office report found that the federal government racked up more than $124 billion in improper payments in 2014, $19 billion above the previous year.

The Oct. 1 report found that the surge in payments came almost exclusively from Medicare, Medicaid, and Earned Income Tax Credit programs, which account for 75 percent of improper payments across the federal government.

“Federal spending in Medicare and Medicaid is expected to significantly increase, so it is critical that actions are taken to reduce improper payments in these programs,” the report said.

Improper payments include things like overpayments, underpayments or payments made for goods and services not received.

GAO estimated that since agencies began reporting improper payments in 2003, $1 trillion in federal funding has been lost to the issue.

The report called for greater compliance from government agencies, citing findings that five federal programs with more than $1 billion in improper payments were noncompliant with federal law for three years.

U.S. Comptroller General Gene Dodaro testified before the Senate Committee on Finance on Oct. 1 to address the report’s findings as well as GAO’s recommendations.

“Reducing improper payments is critical to safeguarding federal funds and could help achieve cost savings and improve the government’s fiscal position,” Dodaro said in testimony.

The report noted that Medicaid and Medicare accounted for $77.4 billion in improper benefits in 2014. To fix the problem, GAO suggested the Centers for Medicare and Medicaid improve Medicare automated audits, track postpayment recovery audit activities, remove Social Security numbers from Medicare cards to help prevent fraud and other reforms.

GAO recommended improving efficiency and oversight for Medicaid, including tracking liability for third-party insurers. CMS concurred with the recommendations and, in some cases, was already working on implementation plans for them.

The other big source of improper payments identified in the report was from the Earned Income Tax Credit, a refundable tax credit for low- to moderate-income earners, particularly those with children.

The report identified $17.7 billion in improper payments related to EITC, largely to due to the credit being incorrectly claimed on tax returns.

“As we have reported, a root cause of EITC noncompliance is that eligibility is determined by taxpayers themselves or their tax return preparers and that IRS’s ability to verify eligibility before issuing refunds is limited,” the report said.

Dodaro said that while the some fraud could play a role in improper EITC payments, the complexity of tax law has led to mistaken applications, which perpetuate improper payments.

“Complexity is definitely the heart of the problem here with the error rates,” he said. “We’re not suggesting they be made more complex. What we are suggesting is that Congress regulate paid tax preparers.”

Dodaro cited Oregon’s practice of regulating paid tax preparers, which originated in the 1970s, and pointed to a 2008 study that found Oregon tax returns are 72 percent more likely to be accurate than a comparable return from paid preparers in other states.

Read the report here.

More TPP, Transpacific Partnership Pact Facts

Posted on October 9, 2015October 9, 2015 by Denise Simon

During Hillary Clinton’s time as Secretary of State, she was for the TPP and now, well she has flipped on that position.

This is yet another shot across the bow of the White House where she is separating herself from Barack Obama, but is she really?

Hillary Clinton announced Wednesday that she opposes the Trans-Pacific Partnership trade deal.

“I’m continuing to learn about the details of the new Trans-Pacific Partnership, including looking hard at what’s in there to crack down on currency manipulation, which kills American jobs, and to make sure we’re not putting the interests of drug companies ahead of patients and consumers,” she said in a statement. “But based on what I know so far, I can’t support this agreement.”

At the end of the segment of Senator Rand Paul this week with Bret Baier on Fox, Paul describes some of the classified maneuvers of the TPP.

One particular group, left leaning for sure is WikiLeaks, who has been an interesting champion of trying to get all the details on the Transpacific Partnership Part.

TPP leaked: Wikileaks releases intellectual property chapter of controversial internet and medicine-regulating trade agreement

Bolton of Independent:

Wikileaks has released the Intellectual Property Rights chapter of the controversial Trans-Pacific Partnership (TPP) agreement, which they claim contains rules and regulations that would have “wide-ranging effects on internet services, medicines, publishers, civil liberties and biological patents.”

The idea behind the TPP is free trade – amongst the member states, it aims to lower trade barriers, create a common standard for intellectual property, enforce labour and environmental law standards and promote economic growth.

The agreement has come under severe criticism and scrutiny, however, for the policy of total secrecy during the years-long negotiations.

Others have criticised the more stringent intellectual property laws it would introduce, which could extend copyright terms and mean harsher penalties for file-sharers.

A number of trade unions and economists, such as Joseph Stiglitz, have said the agreement “serves the interest of the wealthiest”, and caters to the needs of corporations rather than the citizens of member nations.

Concerns have also been raised over the effect it could have on the cost of medicines – by extending the intellectual property rights of certain branded drugs, delays in the development of cheaper, ‘generic’ versions of these drugs could ensue, potentially leading to poorer people having to wait much longer than the wealthy to get access to the newest medicines.

The chapter on these intellectual property issues is what has been leaked by Wikileaks, and is one of the more controversial chapters in the whole agreement.

Peter Maybarduk, the program director at Public Citizen’s Global Access to Medicines, said that if the TPP is ratified, “people in the Pacific-Rim countries would have to live by the rules of this leaked text.”

“The new monopoly rights for big pharmaceutical firms would compromise access to medicines in TPP countries. The TPP would cost lives.”

The document, dated 5 October, was apparently produced on the day it was announced that the 12 member states to the treaty had reached an agreement after five and a half years of negotiations.

The nations of Vietnam, Peru, Mexico, Malaysia, Japan, Canada, Australia, USA, Singapore, New Zealand, Chile and Brunei are all prospective member states to the free-trade agreement, between them representing over 40 per cent of the world economy.

Despite the leak, the final text of the TPP is reportedly being held until after the Canadian general election, on 19 October.

While, as Wikileaks says, there still needs to a be a final “legal scrub” of the document before it is finished, negotiations on the document between signatories have now ended.

Iran deal violates federal law

Posted on October 8, 2015October 8, 2015 by Denise Simon

What does it look like when the president of the United States is a desperate man for a deal? Does he have a platoon of legal eagles searching law and then writing executive orders to finesse the law? The order from the White House is ‘FIND A LOOPHOLE’.

EXCLUSIVE: U.S. officials conclude Iran deal violates federal law

FNC:James Rosen > Some senior U.S. officials involved in the implementation of the Iran nuclear deal have privately concluded that a key sanctions relief provision – a concession to Iran that will open the doors to tens of billions of dollars in U.S.-backed commerce with the Islamic regime – conflicts with existing federal statutes and cannot be implemented without violating those laws, Fox News has learned.

At issue is a passage tucked away in ancillary paperwork attached to the Joint Comprehensive Plan of Action, or JCPOA, as the Iran nuclear deal is formally known. Specifically, Section 5.1.2 of Annex II provides that in exchange for Iranian compliance with the terms of the deal, the U.S. “shall…license non-U.S. entities that are owned or controlled by a U.S. person to engage in activities with Iran that are consistent with this JCPOA.”

In short, this means that foreign subsidiaries of U.S. parent companies will, under certain conditions, be allowed to do business with Iran. The problem is that the Iran Threat Reduction and Syria Human Rights Act (ITRA), signed into law by President Obama in August 2012, was explicit in closing the so-called “foreign sub” loophole.

Indeed, ITRA also stipulated, in Section 218, that when it comes to doing business with Iran, foreign subsidiaries of U.S. parent firms shall in all cases be treated exactly the same as U.S. firms: namely, what is prohibited for U.S. parent firms has to be prohibited for foreign subsidiaries, and what is allowed for foreign subsidiaries has to be allowed for U.S. parent firms.

What’s more, ITRA contains language, in Section 605, requiring that the terms spelled out in Section 218 shall remain in effect until the president of the United States certifies two things to Congress: first, that Iran has been removed from the State Department’s list of nations that sponsor terrorism, and second, that Iran has ceased the pursuit, acquisition, and development of weapons of mass destruction.

Additional executive orders and statutes signed by President Obama, such as the Iran Nuclear Agreement Review Act, have reaffirmed that all prior federal statutes relating to sanctions on Iran shall remain in full effect.

For example, the review act – sponsored by Sens. Bob Corker (R-Tennessee) and Ben Cardin (D-Maryland), the chairman and ranking member, respectively, of the Foreign Relations Committee, and signed into law by President Obama in May – stated that “any measure of statutory sanctions relief” afforded to Iran under the terms of the nuclear deal may only be “taken consistent with existing statutory requirements for such action.” The continued presence of Iran on the State Department’s terror list means that “existing statutory requirements” that were set forth in ITRA, in 2012, have not been met for Iran to receive the sanctions relief spelled out in the JCPOA.

As the Iran deal is an “executive agreement” and not a treaty – and has moreover received no vote of ratification from the Congress, explicit or symbolic – legal analysts inside and outside of the Obama administration have concluded that the JCPOA is vulnerable to challenge in the courts, where federal case law had held that U.S. statutes trump executive agreements in force of law.

Administration sources told Fox News it is the intention of Secretary of State John Kerry, who negotiated the nuclear deal with Iran’s foreign minister and five other world powers, that the re-opening of the “foreign sub” loophole by the JCPOA is to be construed as broadly as possible by lawyers for the State Department, the Treasury Department and other agencies involved in the deal’s implementation.

But the apparent conflict between the re-opening of the loophole and existing U.S. law leaves the Obama administration with only two options going forward. The first option is to violate ITRA, and allow foreign subsidiaries to be treated differently than U.S. parent firms. The second option is to treat both categories the same, as ITRA mandated – but still violate the section of ITRA that required Iran’s removal from the State Department terror list as a pre-condition of any such licensing.

It would also renege on the many promises of senior U.S. officials to keep the broad array of American sanctions on Iran in place. Chris Backemeyer, who served as Iran director for the National Security Council from 2012 to 2014 and is now the State Department’s deputy coordinator for sanctions policy, told POLITICO last month “there will be no real sanctions relief of our primary embargo….We are still going to have sanctions on Iran that prevent most Americans from…engaging in most commercial activities.”

Likewise, in a speech at the Washington Institute for Near East Policy last month, Adam Szubin, the acting under secretary of Treasury for terrorism and financial crimes, described Iran as “the world’s foremost sponsor of terrorism” and said existing U.S. sanctions on the regime “will continue to be enforced….U.S. investment in Iran will be prohibited across the board.”

Nominated to succeed his predecessor at Treasury, Szubin appeared before the Senate Banking Committee for a confirmation hearing the day after his speech to the Washington Institute. At the hearing, Sen. Tom Cotton (R-Arkansas) asked the nominee where the Obama administration finds the “legal underpinnings” for using the JCPOA to re-open the “foreign sub” loophole.

Szubin said the foreign subsidiaries licensed to do business with Iran will have to meet “some very difficult conditions,” and he specifically cited ITRA, saying the 2012 law “contains the licensing authority that Treasury would anticipate using…to allow for certain categories of activity for those foreign subsidiaries.”

Elsewhere, in documents obtained by Fox News, Szubin has maintained that a different passage of ITRA, Section 601, contains explicit reference to an earlier law – the International Emergency Economic Powers Act, or IEEPA, on the books since 1977 – and states that the president “may exercise all authorities” embedded in IEEPA, which includes licensing authority for the president.

However, Section 601 is also explicit on the point that the president must use his authorities from IEEPA to “carry out” the terms and provisions of ITRA itself, including Section 218 – which mandated that, before this form of sanctions relief can be granted, Iran must be removed from the State Department’s terror list. Nothing in the Congressional Record indicates that, during debate and passage of ITRA, members of Congress intended for the chief executive to use Section 601 to overturn, rather than “carry out,” the key provisions of his own law.

One administration lawyer contacted by Fox News said the re-opening of the loophole reflects circular logic with no valid legal foundation. “It would be Alice-in-Wonderland bootstrapping to say that [Section] 601 gives the president the authority to restore the foreign subsidiary loophole – the exact opposite of what the statute ordered,” said the attorney, who requested anonymity to discuss sensitive internal deliberations over implementation of the Iran deal.

At the State Department on Thursday, spokesman John Kirby told reporters Secretary Kerry is “confident” that the administration “has the authority to follow through on” the commitment to re-open the foreign subsidiary loophole.

“Under the International Emergency Economic Powers Act, the president has broad authorities, which have been delegated to the secretary of the Treasury, to license activities under our various sanctions regimes, and the Iran sanctions program is no different,” Kirby said.

Sen. Ted Cruz (R-Texas), the G.O.P. presidential candidate who is a Harvard-trained lawyer and ardent critic of the Iran deal, said the re-opening of the loophole fits a pattern of the Obama administration enforcing federal laws selectively.

“It’s a problem that the president doesn’t have the ability wave a magic wand and make go away,” Cruz told Fox News in an interview. “Any U.S. company that follows through on this, that allows their foreign-owned subsidiaries to do business with Iran, will very likely face substantial civil liability, litigation and potentially even criminal prosecution. The obligation to follow federal law doesn’t go away simply because we have a lawless president who refuses to acknowledge or follow federal law.”

A spokesman for the Senate Banking Committee could not offer any time frame as to when the committee will vote on Szubin’s nomination.

For more details and reading:

Sanctions on Foreign Subsidiaries Implemented Under Iran Threat Reduction Act

By Scott Maberry and Matthew Riemer on October 19, 2012 Posted in Sanctions

In the months since the signing of the Iran Threat Reduction and Syria Human Rights Act (which we will stubbornly continue to refer to here as “ITRA”), the Obama administration has worked to implement tougher sanctions against Iran. Although many of the ITRA regulations are not expected until early November, an Executive Order issued last week marked the beginning of a much stricter era of sanctions pursuant to ITRA, the Iran Sanctions Act of 1996 (ISA), and the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA).

On October 9, 2012, sixty days after President Obama signed ITRA into law, he issued Executive Order No. 13,628, extending U.S. Iran sanctions to cover foreign subsidiaries of U.S. parent companies, a prohibition that did not exist until promulgated in ITRA.[1] The Executive Order implements ITRA Section 218,[2] which we highlighted in our August 17, 2012 post, by providing that:

No entity owned or controlled by a United States person and established or maintained outside the United States may knowingly engage in any transaction, directly or indirectly, with the Government of Iran or any person subject to the jurisdiction of the Government of Iran, if that transaction would be prohibited by [the pre-existing Iran sanctions].

The Executive Order defines the term “entity” to mean “a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.” This is a slight expansion of the definition provided by Congress in Section 218, which does not include the words “group” or “subgroup.” The resulting definition appears to authorize sanctions where any group “controlled by” a U.S. person, regardless of whether the group is formally incorporated, conducts prohibited Iran-related business.

The Executive Order gives no quarter for existing contracts, and authorizes standard Office of Foreign Assets Control (OFAC) penalties against the U.S. person controlling the foreign entity. However, Subsection 4(c) of the Order provides that civil penalties shall not apply if the U.S. person divests or terminates its business with the foreign subsidiary not later than February 6, 2013.

The Order also directs that Secretaries of Treasury and State to issue regulations to implement several other provisions of ITRA (though the ITRA itself also directed the issuance of such regulations within 90 days of the effective date of the statute). Thus, Treasury regulations may be expected by around November 8, 2012 regarding several ITRA provisions, including the following:

Section 202, which requires the imposition of at least five ISA sanctions on any person who, on or after November 8, 2012, beneficially owns, operates, or controls a vessel that is used to transport crude oil from Iran to another country. This provision applies, however, only if the President determines under the National Defense Authorization Act that there is a sufficient supply of petroleum from countries other than Iran to permit petroleum purchasers to significantly reduce purchases from Iran;

Section 214, which increases the availability of sanctions on subsidiaries and agents of UN-sanctioned persons;

Section 215, which extends the availability of sanctions against persons connected to Iran’s weapons of mass destruction to any foreign financial institution who aids that person; and

Section 216 adds a new section to CISADA, expanding sanctions to apply to financial institutions connected to certain proliferation or terrorism activities of Iran or its National Guard.

In addition to the forthcoming regulations, the President is required to provide a great deal of information to Congress on and after November 8. Under section 211, the President must report to Congress on the identity of operators of vessels and persons that conduct or facilitate significant financial transactions that manage Iranian ports designated for sanctions under the International Emergency Economic Powers Act. Furthermore, the President must provide the identity of and the restrictions on individuals, including senior Iranian officials, Iranian Revolutionary Guard Corps Officials, foreign persons supporting the Iranian Revolutionary Guard, and foreign government agencies carrying out transactions with certain Iran-affiliated persons.[3]

The Secretaries of Treasury and State also are required to report to the relevant Congressional committees on certain aspects of the implementation of ITRA. Under Section 206, the Secretary of State must brief Congress on the implementation of the ISA by November 8, 2012, and every 120 days thereafter. The Secretary of Treasury, pursuant to sections 216 and 220, must report to Congress on the implementation of sanctions on persons and entities who provide financial assistance to proliferation and terrorism activities.

The pace of Iran sanctions has accelerated rapidly in recent months and should be expected to continue to increase over the near and medium term. We will continue to provide our analysis of new developments here.

[1] On the same day the Executive Order was issued, OFAC issued a “Frequently Asked Questions” document providing guidance with regard to the Order.

[2] Sec. 218 – Liability of Parent Companies for Violations of Sanctions by Foreign Subsidiaries (requiring the President and the Secretary of Treasury to promulgate regulations within 60 days of enactment).

[3] ITRA §§ 221, 301-303.

Susan Rice Inspires Obama to be Anti-Israel

Posted on October 8, 2015October 8, 2015 by Denise Simon

Proof in this video, begin at the 11:00 mark for the nuggets.

WaPo: Jeffrey Goldberg has quoted an anonymous Obama Administration official as calling Israeli Prime Minister Netanyahu a “chickenshit” because Bibi refuses to make bold moves for peace that might endanger his electoral prospects. Putting aside the incorrect use of the word chickenshit (which is not synonymous with “a chicken”), and the fact that it’s foolish to base a diplomatic strategy on assuming politicians won’t act like politicians, I think the underlying dynamic here reflects not just the general antipathy the Obama and Netanyahu administrations have for each other, but the continuing fallout from the Obama Administration’s initial gross misreading of the Israeli political scene.

Very succinctly, the Obama Administration came in to office thinking it could either force Netanyahu to make concessions, or force his government to fall. Both the Shamir and the first Netanyahu governments made concessions and ultimately got tossed out by the voters after tensions rose with the U.S., so this was not a completely unreasonable assumption.

However, Obama and his advisors missed several contrary factors. The Israeli public never liked Obama, never trusted him due to his well-known associations with various anti-Israel leftists such as Rashid Khalidi.

Ex-Adviser to Obama Says Susan Rice Accused Israeli Leader of Racism

NYT: WASHINGTON — Dennis B. Ross, the former Middle East adviser to President Obama, faults Susan E. Rice, the president’s national security adviser, for exacerbating tensions with Israel during the talks that led up to the recent nuclear accord with Iran and quotes her accusing Israel’s prime minister of racism.

In a new book on Israeli-American relations, Mr. Ross — who has worked on Middle East diplomacy for presidents of both parties — concludes that Ms. Rice’s “combative mind-set” worsened an already troubled relationship with Israel’s prime minister, Benjamin Netanyahu, who feared that negotiations would leave Iran a threshold nuclear state.

Hillary, Write a Fat Check to the FBI/Benghazi Cmte.

Posted on October 7, 2015October 7, 2015 by Denise Simon

Taxpayers are on the hook for this malfeasance and dereliction of duty and reckless behavior, so the entire bill as it accumulates needs to be paid by Hillary. Ever wonder why she did this? My bet is to keep from responding to Freedom of Information Act requests and to keep information from the White House…cant prove but she has a history of being cunning.

It is time for a special prosecutor, voters…DEMAND IT

Employees at company working with Clinton email server expressed concerns

Washington (CNN)Employees at the company that maintained Hillary Clinton’s private email server expressed concern among themselves about the way the former secretary of state’s team directed them to manage data backups after the FBI started looking into the arrangements, according to emails obtained by a senator.

In a letter obtained by CNN, Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson, R-Wisconsin, asks Datto, Inc, the makers of Clinton’s server back-up system, for information on how her emails were preserved and protected. The FBI has also sought information from the company, according to sources.

Johnson indicates that a “Clinton family company,” Clinton Executive Service Corp., paid for the back-up services, operated through a device called the Datto SIRIS S2000, and that the purchase was made by Platte River Networks when the server was moved from her private residence to a New Jersey-based data center in 2013.

7 photos: Hillary Clinton email controversy

In the letter, Johnson quotes from emails sent by and to employees at Platte River Networks, which indicate there was discussion about how the duration of data backups could be reduced, apparently at the direction of the Clinton Executive Service Corp.

Clinton on emails: ‘It is a drip-drip-drip’

Then this past August, a Platte River Networks employee wrote to a coworker that he was, “Starting to think this whole thing really is covering up some shaddy (sic) s**t.”

“I just think if we have it in writing that they told us to cut the backups, and that we can go public with our statement saying we have backups since day one, then we were told to trim to 30days (sic), it would make us look a WHOLE LOT better,” the unnamed employee continued.

The email was sent shortly after news emerged that the FBI was looking into the security of the server, and several months after it was revealed that Clinton exclusively used the private account to conduct State Department business.

The employee indicates in the email that Clinton’s team asked them to change the back-up duration between October and February, presumably of 2014/2015, though that isn’t explicitly stated in the portion of the email included in Johnson’s letter.

Clinton’s email controversy explained

In a statement Wednesday morning, the Clinton campaign accused Johnson of “ripping a page from the House Benghazi Committee’s playbook and mounting his own, taxpayer-funded sham of an investigation with the sole purpose of attacking Hillary Clinton politically.”

“The Justice Department’s independent review is led by nonpolitical, career professionals, and Ron Johnson has no business interfering with it for his own partisan ends,” campaign spokesman Brian Fallon said in the statement.

The committee did not share any of the emails with CNN, but excerpts and descriptions from them are printed in Johnson’s letter.

Emails sent between Datto and Platte River Networks during that time indicate there was confusion about where the backed-up data would be stored, and for a while it was backed-up to an off-site Datto server, apparently against the wishes of Clinton staff.

When Platte River Networks became aware of the off-site syncing issue, they contacted Datto and discussed how they could retrieve that data for storage on-site, according to Johnson’s letter.

“Despite these communications, it is unclear whether or not this course of action was followed,” Johnson said. “Additionally,questions still remain as to whether Datto actually transferred the data from its off-site datacenter to the on-site server, what data was backed up and whether Datto wiped the data after it was transferred.”

Johnson wrote to Datto seeking more information about their dealings with Platte River Networks and Clinton Executive Service Corp.

Johnson also asked the company to say whether Datto is authorized to store classified information, and whether any employees at the company have security clearances that would allow them to view classified information.

FBI seizes four State Department servers in Clinton email probe

The FBI has seized four State Department computer servers as part of its probe into how classified information was compromised on former Secretary of State Hillary Clinton’s private email system, according to people familiar with the investigation.

The four servers, which were located at the State Department’s headquarters building, were seized by the FBI several weeks ago. They are being checked by technical forensic analysts charged with determining how Top Secret material was sent to Clinton’s private email by State Department aides during her tenure as secretary from 2009 to 2013, said two people familiar with the probe. The people spoke on condition of anonymity because it is an ongoing investigation.

State Department spokesman John Kirby referred questions about the computer servers to the FBI. An FBI spokeswoman, Carol Cratty, declined to comment.

No other details about the servers, including whether they are part of the department’s classified system, or used for unclassified information networks, could be learned.

A spokesman for the Clinton campaign did not respond to an email request for comment.

Clinton has offered varying explanations for her use of a private email server, initially claiming she had done nothing wrong. Then, under pressure from critics, she said she was sorry people were confused by the practice, later admitting in early September that her use of a private email system had been a mistake.

The State Department uses two separate networks, one for classified information and one for unclassified information. The two networks are kept separate for security reasons. Most classified networks are equipped with audit systems that allow security managers to check who has accessed intelligence or foreign policy secrets.

The FBI is trying to determine the origin of the highly classified information that was found in Clinton emails.

However, the task is said to be complicated because those with authority to create classified information have broad authority to label information in one of three categories: Confidential, Secret, and Top Secret.

The FBI is primarily concerned with trying to determine how Top Secret information made its way on to the private server.

Chris Farrell, an investigator with the public interest legal group Judicial Watch, said the State Department has been reluctant to describe the nature of its computer networks as some of the 16 Freedom of Information Act lawsuits the group has filed make their way through the courts.

Farrell said in an interview that the department also has been unwilling to say whether the private email system, used by Clinton and close aides Huma Abedin and Cheryl Mills, should be considered an official State Department network covered by FOIA laws.

Farrell said the seizure of the four State Department servers is likely part of the forensic investigation underway by the FBI into hardware used by Clinton and her aides to send email to the private server.

“In the midst of what I believe to be a forensic examination of the hardware that [Clinton lawyer David] Kendall surrendered on behalf of Mrs. Clinton, any serious national security investigation would seek to track all emails inbound and outbound,” Farrell said. “If they are doing that tracking of email since she was secretary of state, then they would be looking at any email that could have crossed into a State server.”

The servers were part of the State Department bureau of information resource management.

The bureau helps the department “to successfully carry out its foreign policy mission by applying modern IT tools, approaches, systems, and information products.”

In addition to improving efforts of “transparent, interconnected diplomacy,” the bureau is “focused on enhancing security for the department’s computer and communications systems.”

The FBI probe of State Department servers is the latest disclosure on the criminal investigation into the private Clinton email server that has embroiled the leading Democratic presidential candidate for several months.

The FBI took possession of Clinton’s private email server last summer after classified information was found in some of the more than 30,000 emails Clinton turned over to the State Department.

The investigation began after I. Charles McCullough, the intelligence community inspector general, reported to Congress Aug. 11 that Clinton’s private emails included some highly classified information labeled “Top Secret//SI/TK//Noforn.” Information classified at that level is deemed by the government to be very sensitive, requiring strong security protections because its compromise would cause grave damage to U.S. national security.

The politics surrounding the probe prompted FBI Director James Comey to tell reporters last week that the bureau will not be influenced by politics.

“One of the main reasons I have a 10-year term is to make sure that this organization stays outside of politics, and if you know my folks, you know that they don’t give a whit about politics,” Comey said, adding that the FBI has devoted sufficient resources and personnel so that the Clinton email probe can be completed in a timely way.

Those remarks were the first official confirmation of the investigation.

The State Department contacted Clinton’s lawyer, David E. Kendall, seeking additional emails that were not part of the more than 30,000 emails provided to the department earlier, the Washington Times reported on Tuesday.

The private email server was discovered by the legal public interest group Judicial Watch in late 2014 after the State Department informed the group that it had discovered a new tranche of records. Judicial Watch currently has at least 16 lawsuits related to State Department and other government records.

The email server material then became the focus of House investigators looking into Clinton’s handling of the terrorist attack on the U.S. diplomatic compound in Benghazi in 2012.

The House investigation of the Benghazi attack was attacked by Clinton this week after Rep. Kevin McCarthy (R., Calif.), the frontrunner to be the next House speaker, said the Benghazi probe was part of a political effort to diminish Clinton’s presidential prospects.

Clinton seized on the comments in a New Hampshire town hall meeting this week.

Asked if she would have investigated a member of a Republican administration amid charges of improperly using a personal email account and server, Clinton said, “I would never have done that.”

“Look at the situation they chose to exploit to go after me for political reasons, the death of four Americans in Benghazi,” she continued.

In a sign of increasing worries about the probe at the Clinton campaign, the New York Post reported that an unidentified legal aide to Clinton has advised her to hire a criminal defense lawyer.

The number of communications regarded as classified is about 400, according to the latest State Department release of emails. Three of the new emails released last month were marked secret, including emails relating to Iranian nuclear talks.

Security analysts have voiced concerns that foreign hackers may have breached the private email server.

One theory is that Clinton aides who were cleared for access to national security secrets first read classified reports on State Department information system and then “gisted” the material into private emails for Clinton.

Clinton spokesman Nick Merrill told the New York Times that none of the candidate’s aides had mishandled classified information.

“She and her team took the handling of classified information very seriously, and at home and abroad she communicated with others via secure phone, cable, and in meetings in secure settings,” Merrill said.

The State Department has confirmed to Sen. Chuck Grassley (R., Iowa) in a related development that Clinton currently holds a security clearance for Top Secret, Sensitive Compartmented Information, the highest-level security clearance.

The department said Clinton’s clearance was “revalidated” after she left office in 2013 and was done so as part of a standard practice allowing former high-ranking officials to be granted access to secrets.

Critics in Congress have called for Clinton’s clearance to be revoked based on the compromises involved in her use of the private email system.