Category Archives: Treasury

The U.S. $73 Billion Puerto Rico Problem

Posted on by

In a White House briefing, Josh Earnest, the spokesperson revealed that the United States will not bail our Puerto Rico. Oh really? In March of 2009, the White House created one of ‘those’ task forces, this one dedicated to Puerto Rico. 4 years later….financial crisis is worse.

On October 30, 2009, President Obama signed Executive Order 13517, which directed the Task Force to maintain its focus on the status question, but added to the Task Force’s responsibilities by seeking advice and recommendations on policies that promote job creation, education, health care, clean energy, and economic development on the Island.

The current Task Force was convened in December 2009 with members from every Cabinet agency. It organized two public hearings in San Juan, Puerto Rico and Washington, D.C. to hear directly from a broad cross section of voices on the issues of status and economic development. Furthermore, hundreds of citizens from Puerto Rico and the mainland offered input by sending materials through the mail and electronically through a White House public comment e-mail address. Members of the Task Force and White House staff also met with congressional leaders, Puerto Rican elected officials, and other interested parties to hear their views.

 

   

From the WSJ:

As Puerto Rico sinks under the weight of $73 billion in government and agency debt—not to mention billions more in unfunded pension and health-care liabilities—its political class is looking for an escape hatch.

This isn’t about wiping the slate clean. But if a bankruptcy judge approved the write-down of, say, half the municipal debt, it would reduce the fiscal pressure.

There’s an app for that. The trouble for Puerto Rico is that getting it requires a retroactive change in U.S. law. If Congress cares about the future of Puerto Rico or the hundreds of thousands of Americans who hold Puerto Rican debt, it will just say no.

More than half of the outstanding Puerto Rico debt is triple tax-exempt revenue bonds issued by government-owned corporations. Unlike public corporations and municipalities in the 50 states, these enterprises do not have access to Chapter 9 bankruptcy protection under the U.S. code. If they fail to meet their loan obligations, they face receivership.

Last June Puerto Rico enacted a law to allow its government corporations to declare bankruptcy. But in February, a U.S. federal judge in San Juan struck down that law on grounds that the federal bankruptcy code supersedes it.

Greece vs. Puerto Rico

SAN JUAN, Puerto Rico –  The governor warned that Puerto Rico can’t pay its $72 billion public debt on the eve of a private Monday meeting with legislators, delivering another jolt to the recession-gripped U.S. island as well as a world financial system already worrying over Greece’s collapsing finances.

Gov. Alejandro Garcia Padilla is hoping to defer debt payments while negotiating with creditors, spokesman Jesus Manuel Ortiz said Sunday night.

Garcia is expected to air a pre-recorded televised address after meeting with legislators, who are still debating a $9.8 billion budget that calls for $674 million in cuts and sets aside $1.5 billion to help pay off the debt. The budget has to be approved by Tuesday.

Ortiz confirmed comments by Padilla that appeared in a report in The New York Times published late Sunday, less than a day before Garcia planned to meet with legislators.

“There is no other option. I would love to have an easier option. This is not politics, this is math,” Garcia is quoted as saying in the Times.

Puerto Rico’s bonds were popular with U.S. mutual funds because they were tax-free, but hedge funds and distressed-debt buyers began stepping in to buy up debt as the island’s economy worsened and its credit rating dropped.

Garcia’s comments will likely not have much impact on Wall Street, said economist Jose Villamil, a former U.N. consultant and CEO of an economic and planning consulting firm.

“The markets are clear that Puerto Rico is heading to a direction of a restructuring or default,” said the economist, adding that a voluntary restructuring by bondholders might be the best option.

“The last four administrations have kicked the can down the road,” said Villamil. “At this point, there is no more can to kick. So we’re going to take some very strict measures and some very profound measures. It’s going to hurt, but there’s no way out.”

Some legislators were taken aback by Garcia’s comments, including Rep. Jenniffer Gonzalez, spokeswoman for the main opposition party.

“I think it’s irresponsible,” Gonzalez said. “He met privately with The New York Times last week, but he hasn’t met with the leaders of this island.”

Puerto Rico’s constitution dictates that the debt has to be paid before any other financial obligation is met. If Garcia seeks to not pay the debt at all, it will require a referendum and a vote on a constitutional amendment, she said in a phone interview.

Puerto Rico’s situation has drawn comparisons to Greece, where the government decreed this weekend that banks would be shuttered for six business days and restrictions imposed on cash withdrawals. The country’s five-year financial crisis has sparked questions about its continued membership in the 19-nation shared euro currency and the European Union.

Puerto Rico’s governor recently confirmed that he had considered having his government seek permission from the U.S. Congress to declare bankruptcy amid a nearly decade-long economic slump. His administration is currently pushing for the right for Puerto Rico’s public agencies to file for bankruptcy under Chapter 9. Neither the agencies nor the island’s government can file for bankruptcy under current U.S. rules.

Puerto Rico’s public agencies owe a large portion of the debt, with the power company alone owing some $9 billion. The company is facing a restructuring as the government continues to negotiate with creditors as the deadline for a roughly $400 million payment nears.

Garcia has taken several measures to help generate more government revenue, including signing legislation raising the sales tax to 11.5 percent and creating a 4 percent tax on professional services. The sales tax increase goes into effect Wednesday and the new services tax on Oct. 1, to be followed by a transition to a value-added tax by April 1.

Obama, the Conductor of Chaos

Posted on by

Barack Obama holds the baton to an anti-American orchestra of tuned, tested, rehearsed instruments. The production is mismanaged, sour to the ears and causes people to leave the arena when the verses are not American and in cadence with allies. The entire governmental score is tyrannical and abusive.

His performance however, is well driven by inside marxist, communists and socialist operators who themselves have tuned, tested and rehearsed instruments where it is in harmony with enemies of America. How about Hugo Chavez, Mohammed Morsi or the Taliban? Then there is Iran.

Three branches of government have been reduced to one, where Conductor Obama has ruled with a pen and a phone and otherwise political extortion. Up to the point where Senate majority leader, Harry Reid lost his leadership post, he functionally stopped and paralyzed the people’s work on Congress to protect Barack Obama.

All the while, Maestro Obama had his was working his intonations on the Supreme Court with his choice picks of Elena Kagan and Sonia Sotomayor, swinging the black robe influence to a more left octave. The court is broken when one sees the real dissention between the justices when not on the bench.

Obama has led an opus where the very social and civil structure in America has been thrown into turmoil. Border Patrol has no clue how to enforce immigration laws, they abide to DHS memos written by Secretary Jeh Johnson. Historical flags and icons are to be removed and gender designated bathrooms are now without any designation.

The fundamental security of government personnel and documents of several agencies has been compromised by an epic cyber intrusion and that finale is from over as the damage will be ongoing for years.

The very personal concern of having access to healthcare has reached a crisis pitch such that insurance deductibles are financially bending and having a doctor’s appointment is a future dream. Nothing is more demonstrative of this condition than that of the Veteran’s Administration where there is a slow death waltz.

Barack Obama performed a medley of government fraud and extortion using the IRS, the EPA, the DoJ, ATF, Education, HUD and HHS to name a few.

Off our shores, conditions are much worse. Barack Obama has modulated a score of retreat while his measure of sympathy to Islam in pure nocturne. His administration led of early in 2009 with the Cairo speech where the ligature plays out today throughout the Muslim world. The retreat from Iraq and his shallow threat of a ‘red-line’ have prove deadly in the whole region, a modern day holocaust. And mostly sadly of all was allowing 4 Americans to perish in Libya with no hope of security, support or rescue.

The most grave of the Obama coda is the terror and dying of Christians.

The building crescendo of Obama will be the nuclear agreement with Iran where Israel, Saudi Arabia, Europe and America as the great Satan will be his encore.

The stretto of the Obama symphony is defined here in an excellent summary by Stephen Hayes of The Weekly Standard.

There are several months left for the conductor of chaos to work his baton and that tremolo is clearly upon us and the world.

 

 

 

 

 

Cyber Security on the Skids, Blinking RED

Posted on by

Recorded Future is a real time open source intelligence collection company that determines trends and predictions of emerging threats.

Recorded Future identified the possible exposures of login credentials for 47 United States government agencies across 89 unique domains.

As of early 2015, 12 of these agencies, including the Departments of State and Energy, allowed some of their users access to computer networks with no form of two-factor authentication. The presence of these credentials on the open Web leaves these agencies vulnerable to espionage, socially engineered attacks, and tailored spear-phishing attacks against their workforce.

The damage has yet to be fully realized and cannot be overstated. Where is the White House? Where are the protections? Where is a policy? Major alarm bells as you read on.

From Associated Press:

Tech company finds stolen government log-ins all over Web

WASHINGTON (AP) — A CIA-backed technology company has found logins and passwords for 47 government agencies strewn across the Web – available for hackers, spies and thieves.

Recorded Future, a social media data mining firm backed by the CIA’s venture capital arm, says in a report that login credentials for nearly every federal agency have been posted on open Internet sites for those who know where to look.

According to the company, at least 12 agencies don’t require authentication beyond passwords to access their networks, so those agencies are vulnerable to espionage and cyberattacks.

The company says logins and passwords were found connected with the departments of Defense, Justice, Treasury and Energy, as well as the CIA and the Director of National Intelligence.

From the WSJ: Obama’s Cyber Meltdown

“While Russia and Islamic State are advancing abroad, the Obama Administration may have allowed a cyber 9/11 at home.”

If you thought Edward Snowden damaged U.S. security, evidence is building that the hack of federal Office of Personnel Management (OPM) files may be even worse.

When the Administration disclosed the OPM hack in early June, they said Chinese hackers had stolen the personal information of up to four million current and former federal employees. The suspicion was that this was another case of hackers (presumably sanctioned by China’s government) stealing data to use in identity theft and financial fraud. Which is bad enough.

Yet in recent days Obama officials have quietly acknowledged to Congress that the hack was far bigger, and far more devastating. It appears OPM was subject to two breaches of its system in mid-to-late 2014, and the hackers appear to have made off with millions of security-clearance background check files.

These include reports on Americans who work for, did work for, or attempted to work for the Administration, the military and intelligence agencies. They even include Congressional staffers who left government—since their files are also sent to OPM.

This means the Chinese now possess sensitive information on everyone from current cabinet officials to U.S. spies. Background checks are specifically done to report personal histories that might put federal employees at risk for blackmail. The Chinese now hold a blackmail instruction manual for millions of targets.

These background checks are also a treasure trove of names, containing sensitive information on an applicant’s spouse, children, extended family, friends, neighbors, employers, landlords. Each of those people is also now a target, and in ways they may not contemplate. In many instances the files contain reports on applicants compiled by federal investigators, and thus may contain information that the applicant isn’t aware of.

Of particular concern are federal contractors and subcontractors, who rarely get the same security training as federal employees, and in some scenarios don’t even know for what agency they are working. These employees are particularly ripe targets for highly sophisticated phishing emails that attempt to elicit sensitive corporate or government information.

The volume of data also allows the Chinese to do what the intell pros call “exclusionary analysis.” We’re told, for instance, that some highly sensitive agencies don’t send their background checks to OPM. So imagine a scenario in which the Chinese look through the names of 30 State Department employees in a U.S. embassy. Thanks to their hack, they’ve got information on 27 of them. The other three they can now assume are working, undercover, for a sensitive agency. Say, the CIA.

Or imagine a scenario in which the Chinese cross-match databases, running the names of hacked U.S. officials against, say, hotel logs. They discover that four Americans on whom they have background data all met at a hotel on a certain day in Cairo, along with a fifth American for whom they don’t have data. The point here is that China now has more than enough information to harass U.S. agents around the world.

And not only Americans. Background checks require Americans to list their contacts with foreign nationals. So the Chinese may now have the names of thousands of dissidents and foreigners who have interacted with the U.S. government. China’s rogue allies would no doubt also like this list.

This is a failure of extraordinary proportions, yet even Congress doesn’t know its extent. The Administration is still refusing to say, even in classified briefings, which systems were compromised, which files were taken, or how much data was at risk.

***
While little noticed, the IRS admitted this spring it was also the subject of a Russian hack, in which thieves grabbed 100,000 tax returns and requested 15,000 fraudulent refunds. Officials have figured out that the hackers used names and Social Security data to pretend to be the taxpayers and break through weak IRS cyber-barriers. As Wisconsin Senator Ron Johnson has noted, the Health and Human Services Department and Social Security Administration use the same weak security wall to guard ObamaCare files and retirement information. Yet the Administration is hardly rushing to fix the problem.

Way back in March 2014, OPM knew that Chinese hackers had accessed its system without having downloaded files. So the agency was on notice as a target. It nonetheless failed to stop the two subsequent successful breaches. If this were a private federal contractor that had lost sensitive data, the Justice Department might be contemplating indictments.

Yet OPM director Katherine Archuleta and chief information officer Donna Seymour are still on the job. Mr. Obama has defended Ms. Archuleta, and the Administration is trying to change the subject by faulting Congress for not passing a cybersecurity bill. But that legislation concerns information sharing between business and government. It has nothing to do with OPM and the Administration’s failure to protect itself from cyber attack.

Ms. Archuleta appears before Congress this week, and she ought to remain seated until she explains the extent of this breach. While Russia and Islamic State are advancing abroad, the Obama Administration may have allowed a cyber 9/11 at home.

Truck Hijacked in Mexico, Visas Stolen

Posted on by

Sheesh, can it get worse?

MEXICO CITY (AP) — The U.S. Embassy in Mexico says a truck carrying visas was hijacked in northern Mexico and the visas stolen.

The embassy says in a statement Wednesday that the theft occurred on June 7 “in northern Mexico,” without specifying where.

The truck was making a trip from the United States to U.S. Consulates in the cities of Monterrey and Guadalajara.

Some approved border crossing cards also were stolen. An electronic alert has been issued so that the stolen cards cannot be used to cross the border.

The cards were re-issued for the intended holders, but they have also been advised of the robbery in case the cards are used in attempts at identity theft.

***

The Vice Admiral of the Coast Guard delivered testimony on drug interdiction on the waterways. In part:

Emerging Threats: Transnational Organized Crime, Violence, and Instability
One of the goals of the Coast Guard’s drug interdiction program is to interdict illicit traffic as close to the source zone1 as possible. This helps to keep the drugs from reaching the shores of Central America where it is transported over land into Mexico, and then to the United States, where the proceeds from the sale of drugs fuel TOC networks. These nefarious organizations operate with impunity throughout Central America while vying for power through drug-fueled violence and corruption of government officials; in fact, eight out of the ten most violent nations in the world are along these trafficking routes in the Western Hemisphere. Traffickers have also increasingly moved product through the Central and Eastern Caribbean vector. Corresponding with this movement, the homicide rate in Puerto Rico is five times that of the rest of the United States. Drug trafficking has destabilized regional states, undermined the rule of law, terrorized citizens, and driven both families and unaccompanied children to migrate to the United States. To be clear, the flow of illicit drugs funds TOC networks which pose a significant and growing threat to national and international security.

Then Border Patrol has their terrifying summary. Yes, it can get worse and Border Patrol is telling the media just how bad it is, but who is really listening, who will address the issues and how is this breaking national security policy? The clarion call is being made, but is there a busy signal?

From the LA Times in full:

Rank-and-file Border Patrol agents are furious that they have lost some of their favorite enforcement tools and say that intense public criticism of border shootings has led to a morale crisis.

“We lack the political will to enforce the law and allow our agency to be effective,” said National Border Patrol Council spokesman Shawn Moran in a conference call with reporters Wednesday. The call was coordinated by the union that represents the agents.

Among the most far-reaching and damning accusations from agents working entry points in Arizona, Texas and California was that the U.S. Customs and Border Patrol administration in Washington does not want agents to make drug busts and has taken away their ability to do so.

Shane Gallagher, an agent in the San Diego sector, said roving interdiction patrols — in which agents would stop suspicious vehicles north of the border — were extraordinarily successful at nabbing border crossers with drugs. But those patrols would then create uncomfortable questions for the ports through which the vehicles had just passed, he said.

“Now the port of entry has to explain who was in the primary lane, what actions were taken, if the vehicle was inspected, so you can see there’s a whole host of implications,” he said.

Though rank-and-file agents saw the value in drug interdictions, Gallagher said, agency leadership did not and drastically reduced the number of agents doing such work.

“There was a lot of pressure for us to get out of the [drug] interdiction game,” Gallagher said.

The decision to speak with reporters comes as rank-and-file agents have come under intense criticism for their involvement in fatal cross-border shootings – including the slaying of a 15-year-old boy who was walking home from a basketball game in Nogales, Mexico, when he was hit by a bullet fired by an agent on the Arizona side of the border.

According to records released last month, only 13 out of 809 abuse complaints sent to Customs and Border Protection’s office of internal affairs between January 2009 and January 2012 led to disciplinary action, and last week, the agency’s head of internal affairs was removed from his post.

A Customs and Border Protection spokesman declined to comment Wednesday when reached by the Los Angeles Times.

The agency also handcuffed agents by instituting civil liberties protections for potential targets of investigations at public transit stations or on agricultural land, colloquially known as a “farm and ranch check,” Moran said.

For such checks, Moran said, agents are required to create an “operations plan” and be able to show supervisors some kind of intelligence that connects targets of investigations to potential criminal activity. No longer, he said, can Border Patrol agents simply question random people.

Amid a flood of women and children turning themselves in at the border, agents also criticized administration directives to lend help to neighboring agencies.

The Border Patrol “grew but other agencies didn’t grow,” said Tucson sector Agent Art Del Cueto. “They’ve been butchering our agency to assist other agencies.”

According to Agent Chris Cabrera of the Rio Grande Valley sector in southern Texas, in one hour last week, 80 people, mostly women and children, turned themselves in to the Border Patrol in the Rincon Village area of his sector.

Overall, the agency finds itself holding 500 people in the Rio Grande Valley sector each day, he said, down from 700 people each day last year, when a flood of women and children from Central America overwhelmed the U.S. immigration sector.

Typically, one or two agents are stationed near Rincon Village to get people into a shelter and check them for weapons. Those agents can handle 10 or 15 people at once, Cabrera said. But when scores arrive, the agency must call on other agents to respond.

“You’re leaving large swaths of the area unprotected,” Cabrera said. “You take a few agents from the field, then you take a few more, and before you know it, you’re down to five agents covering a 53-mile stretch of river.”

Agents criticized the Border Patrol as top-heavy, with a ratio of four or five agents per each supervisor, a ratio that the agents said should be closer to 10 agents per supervisor.

Cabrera said the issue isn’t a lack of resources, but the way in which they’re used.

“We do not have what we need,” he said, “to do the job we need done.”

Hillary’s Plan for Post Qaddafi Libya

Posted on by

Libya and Hillary’s team investment operation in post Qaddafi Libya

 

When Ambassador Cretz was expelled from Libya, he was later assigned to Ghana. As of this week, he is out of Ghana, allegedly retiring. I would suggest he is in the belly of the beast with the Hillary team, but I can’t prove anything other than a gut feeling.

 

The Blumenthal and Clinton emails explain that Qaddafi’s demise was imminent so the financial investment opportunities in the pipeline for Libya were about to gain traction that included Qatar, where Hillary fully collaborated with the dynasty there. 

 

Last month, I authored a piece on the little known agenda Hillary, Blumenthal and Drumheller along with the Qataris were working on, where Tripoli and Benghazi were to be the new Middle East version of New York’s 5th Avenue.

     

Before Qaddafi and just after Qaddafi, note there was a luxury project underway. The Libyan-Qatari Company declared recently the laying of the foundation stone of “The Waterfront” project, for the construction of a luxurious residential complex and resort near Tripoli, expected to be completed by the end of 2012.

Many interesting details are noted here.

 Pay to Play…literally…

This poses another question to bubble to the surface when the matter of Bill Clinton, the Foundation, Qatar and FIFA all come into the same sentence.

 

 

In 2014, more came to light when one pays attention to foreign press releases that speaks about the future of Libya at the hands of Qatar and other European investors.

 

Qatar in Libya, 2011-present

 

Qatar’s bold support for the 2011 Libyan revolution was a striking example of the small state’s assertiveness in the external realm. One of the most symbolic moments of this support came when rebels in Libya overran Qadhafi’s Tripoli headquarters in August 2011 and briefly raised the maroon and white Qatari flag over the compound. That day, Mahmoud Jibril, the head of Libya’s provisional governing authority, the National Transitional Council (NTC), publically thanked Qatar for its support of the Libyan revolution.

 

While Qatar’s role in Libya was critical in backing the revolution, the emirate had also dealt with the Qadhafi regime prior to 2011. Indeed, Qatari investments in Libya amounted to USD 10 billion before the start of the civil war. During that time, Qatari companies won construction contracts for the development of residential and entertainment complexes in and around Tripoli based on a joint venture between the Libyan Economic and Social Development Fund and the Qatari Diar Real Estate Investment Company, a branch of the state-run Qatar Investment Authority.

 

Apparently seeing the inevitable demise of Qadhafi, in March 2011, Qatar nevertheless helped to rally support within the Arab League for the UN Security Council resolutions authorizing NATO intervention in Libya. It was the first Arab state to recognize the National Transition Council (NTC).viii Qatar went so far as to participate in the air war with its own military aircraft (six Mirage fighter jets), and elite Qatari troops participated in the liberation of Tripoli. By the end of the conflict, Qatar had contributed USD 400 million to the rebels (including an estimated twenty thousand tons of Qatari weapons and equipment), trained fighters, set up a TV station in Doha, helped Libya keep its oil exports flowing, and provided political and organizational support, especially to militias aligned with its vision and interests.

 Doing Business with Middle East Operations Blocked by Treasury

What is very interesting is in November of 2011, several of the investment groups were removed from the Treasury Department’s special designation list of Foreign Assets Control and one in particular was the Libyan Economic and Social Development Fund.

 

Then enter more on Qatar. Now there is a Tourism company in Libya?  The Qatar Diar a worldwide real estate developer has grand real estate operations.

 

What is planned now for Libya after the Arab Spring?   Back to the European investors and the collusion with Qatar. Then Rachel Ehrenfeld wrote a very good time line using names attached to the Foundation.

 

So how did or does this all work out? Not so well when ISIS has a growing footprint in Libya. Summary from The Fuse:

 ISIS in Libya map