New Leaks Reveal Insider Tips on S&P's U.S. Credit Downgrade to Killer-Drone Firm

We live in an age where insider deals, conflicts of interest, revolving doors between "regulators" and the "regulated" (lubricated with oceans of cash) accompanies the generalized looting of social wealth by deviant capitalist elites.

That such behavior by our corporate masters no longer raise an eyebrow, let alone elicit action by authorities charged with stopping criminal miscreants destroying other people's lives, is an unmistakable sign that the much-vaunted "free market" system, staring into an abyss of its own creation, has entered a terminal phase.

It now appears that insiders at Standard and Poor's or the Treasury Department, take your pick, may have leaked information to privileged clients on the recent U.S. credit downgrade, with confirmation coming from a surprising source.

Last week, AntiSec cyber-guerrillas (a loose alliance amongst individuals affiliated with LulzSec and Anonymous) released a 1GB cache of emails filched from security contractor Vanguard Defense Industries (VDI).

Previously Anonymous and LulzSec have wrapped their keyboards around defense grifters Booz Allen Hamilton, ManTech International, NATO, the Department of Homeland Security, the FBI, InfraGard (a "public-private" security alliance amongst corporate heavy-hitters and the Bureau), the CIA, the Arizona Department of Public Safety, the Arizona Counter Terrorism Information Center (a so-called "fusion center" staffed by cops, federal agents, private contractors and the U.S. military), the Bay Area Rapid Transit agency (BART), Britain's Serious Organised Crime Agency, PBS, Fox News, and repressive governments such as Egypt, Tunisia and Zimbabwe.

Their latest campaign targeted VDI, a Texas-based firm, which specializes in the "development and deployment" of Unmanned Aerial Systems (UAS, killer drones). VDI "draws on specialized experience of senior aerospace engineers, former military special operations officers, military instructor pilots as well as retired Senior Executive Service Federal Agents," claiming their "background and operational knowledge has afforded us the unique vision to provide a platform that will extend the security and response capabilities of any organization," according to a blurb on their web site.

While VDI touts their ability to offer "support" to the "military, local, state and federal law enforcement as well as the private sector," the firm also offers "a full scope of consulting services independent of our aerial technology."

That "unique vision" however, didn't prevent AntiSec from spiriting away thousands of emails from VDI's Senior Vice President Richard T. Garcia, a former FBI Assistant Director in Los Angeles who recently left a well-paid position as Global Security Manager for the environment-killing Shell Oil Corporation (can you say Niger Delta?) for "greener" pastures.

A press statement from AntiSec announced that the leak "contains internal meeting notes and contracts, schematics, non-disclosure agreements, personal information about other VDI employees, and several dozen 'counter-terrorism' documents classified as 'law enforcement sensitive' and 'for official use only'."

"Vanguard Defense Industries," AntiSec writes, "manufactures unmanned 'ShadowHawk' drones which cost $640,000 and are equipped with grenade launchers and shotguns. ShadowHawks are currently in use by law enforcement, military, and private corporations deploying them in the US, the Horn of Africa, Panama, Columbia [sic], and US-Mexico border patrol operations. These emails contain contracts, schematics, non-disclosure agreements, and more. Additionally we found evidence of a Merrill Lynch wealth management advisor giving private advance notice to Garcia about upcoming S&P US credit rating downgrades."

Improper Disclosures

In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."

Investigative journalist Steve Ragan, writing at The Tech Herald (the publication that broke the story on Anonymous's HBGary hack) informs us that "the U.S. Securities and Exchange Commission was investigating whether there was any sort of insider trading done by S&P employees before the downgrade was official. The story hinged on comments made to the paper by sources close to the investigation itself."

"On the day S&P cut the U.S.'s credit rating" Ragan writes, "Wall Street was flooded with downgrade rumors. These rumors started earlier in the day while trading was active. It turned out they were true."

According to Bloomberg News the SEC "is scrutinizing the method Standard & Poor's used to cut the U.S.'s credit rating and whether the firm properly protected the confidential decision, according to a person with direct knowledge of the matter."

Reporter Joshua Gallu wrote August 14 that SEC staff are "looking into whether certain market participants learned of the downgrade before its announcement."

Downplaying speculation that S&P employees may have breached SEC rules by leaking sensitive information to privileged clients, The New York Times, as is their wont, claimed "it is arguable whether S.&P.'s announcement on Aug. 5 of the rating change was all that confidential, given the speculation about it."

"Assuming information about the downgrade was confidential," the Times pontificates, "it must also be material, which means a reasonable investor would consider it important. This seems to be an easy element to establish because the wild gyrations in the market on the first trading day after the downgrade shows how investors viewed it."

But Cook's email to Garcia didn't arrive in his in-box "on the first trading day after the downgrade" but nearly four months earlier, long before July's political shenanigans over raising the federal debt ceiling, the ostensible reason why S&P downgraded America's credit worthiness.

Maxine Waters (D-CA), wrote to SEC chairwoman, cover-up specialist Mary Schapiro, demanding that the commission "conduct an investigation into whether S.&P. selectively disclosed information related to the U.S. government debt downgrade to any financial institutions, and whether any institutions that had that nonpublic information traded on that information prior to the official announcement."

It appears that Cook's email to Garcia would confirm that S&P insiders did just that, providing information to Merrill Lynch and one can assume other financial firms.

Throwing cold water on charges that the rating's agency acted improperly, the Times argues that "even if if the S.E.C. finds that the information was improperly disclosed, proving insider trading will be difficult."

Why might that be?

According to the Times, "while S.&P. and other credit rating agencies are required to adopt policies to prevent such disclosure, it is questionable whether just leaking information violates any federal regulations, even if it breaches a corporate confidentiality policy."

Lest readers believe however, that the SEC will mount a comprehensive investigation of leaks by S&P insiders, they would do well to read Matt Taibbi's latest piece for Rolling Stone.

According to congressional testimony by an SEC whistleblower, which sparked an investigation by that agency's Inspector General, the commission's enforcement division, under orders from higher-ups, who went on to secure well-paid positions with the firms they were charged to regulate, shredded a mountain of incriminating evidence detailing wrongdoing by some of the world's top financial firms.

How many files, called "Matters Under Investigation" or MUI were destroyed? According to whistleblower Darcy Flynn, the SEC's enforcement division "disappeared" some 18,000 files, including those of convicted fraudster Bernie Madoff, accused swindler, suspected CIA banker and drug money launderer R. Allen Stanford, as well as accusations that top-tier Wall Street investment banks such as J.P. Morgan Chase had engaged in insider trading.

Taibbi writes that "under a deal the SEC worked out with the National Archives and Records Administration, all of the agency's records--'including case files relating to preliminary investigations'--are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term 'Orwellian,' devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation."

It's a nice deal if you can get it, which of course firms like Goldman Sachs, J. P. Morgan Chase, Deutsche Bank, AIG and Lehman Brothers (before their 2008 collapse) managed to get in spades.

"We'll never know," Taibbi avers, "what the impact of those destroyed cases might have been; we'll never know if those cases were closed for good reasons or bad. We'll never know exactly who got away with what, because federal regulators have weighted down a huge sack of Wall Street's dirty laundry and dumped it in a lake, never to be seen again."

In this light, AntiSec's hack of VDI is instructive. If for nothing else, it demonstrates that well-connected insiders reap billions from the collapse of the global economy, divvying-up the spoils amongst privileged friends and clients, including those inhabiting the nethermost regions of the secret state.

Cyberwar: Bringing it All Back Home, and Waging War on the Global Economy

As global elites scramble to seize as much advantage as possible over their rivals as the economy craters, intelligence methods deployed as part of imperialism's endless "War on Terror" have migrated with a vengeance onto Wall Street.

Revelations by Anonymous earlier this year that a passel of Pentagon-linked security contractors had joined forces to run covert ops on whistleblowers and journalists set alarm bells ringing.

February's release of some 75,000 emails filched from servers controlled by security grifters HBGary Federal and HBGary, uncovered a sordid scheme by the Bank of American and the U.S. Chamber of Commerce to target supporters of WikiLeaks and left-wing corporate critics.

That hack, in addition to exposing BofA's illicit "Team Themis" gambit, a co-production of white shoe law firm Hunton & Williams, HBGary Federal, HBGary, Palantir Technologies (a recipient of CIA slush funds from its venture capital arm In-Q-Tel) and Berico Technologies, also revealed that the Pentagon and giant defense contractors such as General Dynamics had teamed up with HBGary to develop undetectable malware or "rootkits" for America's emerging Cyberwar-Intelligence Complex, according to a series of documents published by the secrecy-shredding web site Public Intelligence.

Additional files revealed that HBGary and ManTech International had partnered-up with the National Security State for what they described as "Internet Based Reconnaissance Operations" that use "non-attributable internet access" methodologies (approved hacking by the secret state) for "operating system and network application identification," "identification of possible perimeter defense" for "intelligence gap fill" and "counterintelligence research." In other words, broad based internet spying on an array of "adversaries" (e.g., political dissidents, antiwar activists, anticorporate campaigners and other enemies of the state).

Further research by Project PM's OpMetalGear revealed that defense giant Northrop Grumman and other firms such as HBGary Federal, TASC and ManTech International were engaged in a bidding war to spear the Pentagon's Romas/COIN program (since renamed Odyssey).

That program, researcher Barrett Brown writes, is "a secretive and immensely sophisticated campaign of mass surveillance and data mining against the Arab world, allowing the intelligence community to monitor the habits, conversations, and activity of millions of individuals at once." (For additional background see: "Security Grifters Partner-Up on Sinister Cyber-Surveillance Project," Antifascist Calling, July 3, 2011)

We can assume that once intelligence sources and methods intended to target external enemies are turned inward and attack the American people, financial insiders too, would find such tools an exemplary means to crush their competitors and adversaries, the global working class.

Bankrupting and Criminalizing the State

"Economic warfare," economist and researcher Michel Chossudovsky, writing in The Global Economic Crisis: The Great Depression of the XXI Century, "consists in destabilizing countries and impoverishing their respective populations."

Chossudovsky argues that "the manipulation of market forces through the imposition of strong 'economic medicine' under the helm of the IMF supports U.S.-NATO strategic and geopolitical objectives."

Similarly," Chossudovsky observes, "the speculative attacks waged by powerful banking conglomerates in the currency, commodity and stock markets are acts of financial warfare," one in which the "financing of an oversized U.S. war economy triggers imbalances in the U.S. monetary system, destabilizes the U.S. fiscal structure and creates imbalances in the allocation of human and material resources."

This tragedy is playing out today. The on-going market meltdown in the wake of the U.S. credit downgrade and the crisis in the Eurozone has affected tens of millions of workers who saw their retirement funds gobbled up by speculators. Additionally, states and municipalities "carrying debt tied to federal creditworthiness," The Tech Herald avers, "each took a hit."

Hard hit cities and states struggling under an enormous debt burden due to falling revenues, are held hostage by the credit rating agencies. As economist Michael Hudson points out in Global Research credit rating agencies such as Standard and Poor's, Moody's and Fitch "are playing the political role of 'enforcer' as the gatekeepers to credit, to put pressure on Iceland, Greece and even the United States to pursue creditor-oriented policies that lead inevitably to financial crises."

Hudson writes that these "crises in turn force debtor governments to sell off their assets under distress conditions. In pursuing this guard-dog service to the world's bankers, the ratings agencies are escalating a political strategy they have long been refined over a generation in the corrupt arena of local U.S. politics."

As the World Socialist Web Site observes, "the crisis of the world's stock exchanges and financial markets is increasingly spiraling out of control. Governments are being driven by developments which they are unable to influence."

Socialist critic Peter Schwarz notes that "the panic on the stock markets shows that traders are expecting a deep recession, already heralded by stagnating growth and rising unemployment rates," and that "corporations will respond with new waves of layoffs, governments with further budget cuts."

In a climate stoked by fear, war and those all-purpose boogeymen, "debt," "terror" and now, "cyberwar," the cost of bailing-out a looted capitalist economy are shouldered by the working class. These pressures in turn increase the downward spiral as employment, wages, manufacturing and consumer spending go into a tail-spin, a self-destructive feed-back loop that further exacerbates levels of unemployment, home foreclosures and generalized misery. The tentacles of this manufactured "debt crisis" reach everywhere--from the smallest town to the largest city.

Hudson avers that "localities are pressured when their rising debt levels lead to a financial stringency. Banks pull back their credit lines, and urge cities and states to pay down their debts by selling off their most viable public enterprises."

And waiting in the wings are a new class of corporate vultures and rentier vampires who swoop down to reap the rewards gleaned by gobbling-up (looting) public assets at fire sale prices.

The rating agencies who profit at both ends of any transaction according to Hudson, "offer opinions" that have become a "big business" for the agencies. "So it is understandable why their business model opposes policies--and political candidates--that support the idea of basing public financing on taxation rather than by borrowing. This self-interest colors their 'opinions'."

Accordingly, "to acquiescence in such economically destructive financial behavior is the opposite of fiscal responsibility. Cutting federal taxes and Social Security payments to obtain a more positive S&P 'opinion," Hudson writes, "would give banks an ability to 'pull the plug' and force privatization and anti-labor austerity plans by refraining from rolling over the U.S. debt--and cutting taxes Tea-Party style rather than funding spending by taxation on a pay-as-you-go-basis."

In this light, one can certainly understand why a Merrill Lynch "wealth management advisor" would offer her "knowledgeable judgement" (clubby insider info) to a dodgy security outfit such as VDI.

Working classes across Europe have not "gone gently into the night" of impoverishment; the great fear here in the heimat amongst corporatists and militarists alike, is that once working people realize the game is up they just might impose some "shock therapy" of their own!

As Salon columnist Glenn Greenwald (a target of "Team Themis's" dirty tricks campaign) avers, speaking out about "the sprawling Surveillance State and the attempted criminalization of WikiLeaks and whistleblowing are so vital" to the defense of democracy.

"The free flow of information and communications enabled by new technologies--as protest movements in the Middle East and a wave of serious leaks over the last year have demonstrated--is a uniquely potent weapon in challenging entrenched government power and other powerful factions," Greenwald writes.

"And that is precisely why those in power--those devoted to preservation of the prevailing social order--are so increasingly fixated on seizing control of it and snuffing out its potential for subverting that order: they are well aware of, and are petrified by, its power, and want to ensure that the ability to dictate how it is used, and toward what ends, remains exclusively in their hands."

This is why actions by disparate groups such as AntiSec, Anonymous and WikiLeaks are informational beacons in an otherwise homogenized media landscape, one characterized by celebrity gossip, sex scandals and "crimes" carried out by poor and marginalized populations--never the filthy rich or the warmongers who murder millions as they launch resource wars that steal other people's social property.

While firms such as VDI, Boeing, General Atomics and Lockheed Martin hawk drone technologies that transform human beings into red mist, and do so as their "patriotic" (and highly-profitable) duty as the Pentagon wholeheartedly embraces hypermodern forms of robotized mass murder, the bill for American hubris, long past due, is coming faster than most people think.

As Economy Tanks, "New Normal" Police State Takes Shape

Forget your rights.

As corporate overlords position themselves to seize what little remains of a tattered social net (adieu Medicare and Medicaid! Social Security? Au revoir!), the Obama administration is moving at break-neck speed to expand police state programs first stood-up by the Bush government.

After all, with world share prices gyrating wildly, employment and wages in a death spiral, and retirement funds and publicly-owned assets swallowed whole by speculators and rentier scum, the state better dust-off contingency plans lest the Greek, Spanish or British "contagion" spread beyond the fabled shores of "old Europe" and infect God-fearin' folk here in the heimat.

Fear not, they have and the lyrically-titled Civil Disturbances: Emergency Employment of Army and Other Resources, otherwise known as Army Regulation 500-50, spells out the "responsibilities, policy, and guidance for the Department of the Army in planning and operations involving the use of Army resources in the control of actual or anticipated civil disturbances." (emphasis added)

With British politicians demanding a clampdown on social media in the wake of London riots, and with the Bay Area Rapid Transit (BART) agency having done so last week in San Francisco, switching off underground cell phone service to help squelch a protest against police violence, authoritarian control tactics, aping those deployed in Egypt and Tunisia (that worked out well!) are becoming the norm in so-called "Western democracies."

Secret Law, Secret Programs

Meanwhile up on Capitol Hill, Congress did their part to defend us from that pesky Bill of Rights; that is, before 81 of them--nearly a fifth of "our" elected representatives--checked-out for AIPAC-funded junkets to Israel.

Secrecy News reported that the Senate Intelligence Committee "rejected an amendment that would have required the Attorney General and the Director of National Intelligence to confront the problem of 'secret law,' by which government agencies rely on legal authorities that are unknown or misunderstood by the public."

That amendment, proposed by Senators Ron Wyden (D-OR) and Mark Udall (D-CO) was rejected by voice vote, further entrenching unprecedented surveillance powers of Executive Branch agencies such as the FBI and NSA.

As Antifascist Calling previously reported, the Electronic Frontier Foundation filed a Freedom of Information Act lawsuit against the Justice Department "demanding the release of a secret legal memo used to justify FBI access to Americans' telephone records without any legal process or oversight."

The DOJ refused and it now appears that the Senate has affirmed that "secret law" should be guiding principles of our former republic.

Secrecy News also disclosed that the Committee rejected a second amendment to the authorization bill, one that would have required the Justice Department's Inspector General "to estimate the number of Americans who have had the contents of their communications reviewed in violation of the FISA Amendments Act of 2008 [FAA]."

As pointed out here many times, FAA is a pernicious piece of Bushist legislative detritus that legalized the previous administration's secret spy programs since embellished by our current "hope and change" president.

During the run-up to FAA's passage, congressional Democrats, including then-Senator Barack Obama and his Republican colleagues across the aisle, claimed that the law would "strike a balance" between Americans' privacy rights and the needs of security agencies to "stop terrorists" attacking the country.

If that's the case, then why can't the American people learn whether their rights have been compromised?

Perhaps, as recent reports in Truthout and other publications suggest, former U.S. counterterrorism "czar" Richard Clarke leveled "explosive allegations against three former top CIA officials--George Tenet, Cofer Black and Richard Blee--accusing them of knowingly withholding intelligence ... about two of the 9/11 hijackers who had entered the United States more than a year before the attacks."

Clarke's allegations follow closely on the heels of an investigation by Truthout journalists Jeffrey Kaye and Jason Leopold.

"Based on on documents obtained under the Freedom of Information Act and an interview with a former high-ranking counterterrorism official," Kaye and Leopold learned that "a little-known military intelligence unit, unbeknownst to the various investigative bodies probing the terrorist attacks, was ordered by senior government officials to stop tracking Osama bin Laden and al-Qaeda's movements prior to 9/11."

As readers are well aware, the 9/11 provocation was the pretext used by the capitalist state to wage aggressive resource wars abroad while ramming through repressive legislation like the USA Patriot Act and the FISA Amendments Act that targeted the democratic rights of the American people here at home.

But FAA did more then legitimate illegal programs. It also handed retroactive immunity and economic cover to giant telecoms like AT&T and Verizon who profited handily from government surveillance, shielding them from monetary damages which may have resulted from a spate of lawsuits such as Hepting v. AT&T.

This raises the question: are other U.S. firms similarly shielded from scrutiny by secret annexes in FAA or the privacy-killing USA Patriot Act?

Echelon Cubed

Last week, Softpedia revealed that "Google has admitted complying with requests from US intelligence agencies for data stored in its European data centers, most likely in violation of European Union data protection laws."

"At the center of this problem," reporter Lucian Constantin wrote, "is the USA PATRIOT ACT, which states that companies incorporated in the United States must hand over data administered by their foreign subsidiaries if requested."

"Not only that," the publication averred, "they can be forced to keep quiet about it in order to avoid exposing active investigations and alert those targeted by the probes."

In other words, despite strict privacy laws that require companies operating within the EU to protect the personal data of their citizens, reports suggest that U.S. firms, operating under an entirely different legal framework, U.S. spy laws with built-in secrecy clauses and gag orders, trump the laws and legal norms of other nations.

Given the widespread corporate espionage carried out by the National Security Agency's decades-long Echelon communications' intercept program, American firms such as Google, Microsoft, Apple or Amazon may very well have become witting accomplices of U.S. secret state agencies rummaging about for "actionable intelligence" on EU, or U.S., citizens.

Indeed, a decade ago the European Union issued its final report on the Echelon spying machine and concluded that the program was being used for corporate and industrial espionage and that data filched from EU firms was being turned over to American corporations.

In 2000, the BBC reported that according to European investigators "U.S. Department of Commerce 'success stories' could be attributed to the filtering powers of Echelon."

Duncan Campbell, a British journalist and intelligence expert, who along with New Zealand journalist Nicky Hager, helped blow the lid off Echelon, offered two instances of U.S. corporate spying in the 1990s when the newly-elected Clinton administration followed-up on promises of "aggressive advocacy" on behalf of U.S. firms "bidding for foreign contracts."

According to Campbell, NSA "lifted all the faxes and phone-calls between Airbus, the Saudi national airline and the Saudi Government" to gain this information. In a second case which came to light, Campbell documented how "Raytheon used information picked up from NSA snooping to secure a $1.4bn contract to supply a radar system to Brazil instead of France's Thomson-CSF."

As Softpedia reported, U.S.-based cloud computing services operating overseas have placed "European companies and government agencies that are using their services ... in a tough position."

With the advent of fiber optic communication platforms, programs like Echelon have a far greater, and more insidious, reach. AT&T whistleblower Mark Klein noted on the widespread deployment by NSA of fiber optic splitters and secret rooms at American telecommunications' firms:

What screams out at you when examining this physical arrangement is that the NSA was vacuuming up everything flowing in the Internet stream: e-mail, web browsing, Voice-Over-Internet phone calls, pictures, streaming video, you name it. The splitter has no intelligence at all, it just makes a blind copy. There could not possibly be a legal warrant for this, since according to the 4th Amendment warrants have to be specific, "particularly describing the place to be searched, and the persons or things to be seized." ...

This was a massive blind copying of the communications of millions of people, foreign and domestic, randomly mixed together. From a legal standpoint, it does not matter what they claim to throw away later in their secret rooms, the violation has already occurred at the splitter. (Mark Klein, Wiring Up the Big Brother Machine... And Fighting It, Charleston, South Carolina: BookSurge, 2009, pp. 38-39.)

What was Google's response?

In a statement to the German publication WirtschaftsWoche a Google corporate spokesperson said: "As a law abiding company, we comply with valid legal process, and that--as for any U.S. based company--means the data stored outside of the U.S. may be subject to lawful access by the U.S. government. That said, we are committed to protecting user privacy when faced with law enforcement requests. We have a long track record of advocating on behalf of user privacy in the face of such requests and we scrutinize requests carefully to ensure that they adhere to both the letter and the spirit of the law before complying." (translation courtesy of Public Intelligence)

Is the Senate Intelligence Committee's steadfast refusal to release documents and secret legal memos that most certainly target American citizens also another blatant example of American exceptionalism meant to protect U.S. firms operating abroad from exposure as corporate spies for the government?

It isn't as if NSA hasn't been busy doing just that here at home.

As The New York Times reported back in 2009, the "National Security Agency intercepted private e-mail messages and phone calls of Americans in recent months on a scale that went beyond the broad legal limits established by Congress last year."

Chalking up the problem to "overcollection" and "technical difficulties," unnamed intelligence officials and administration lawyers told journalists Eric Lichtblau and James Risen that although the practice was "significant and systemic ... it was believed to have been unintentional."

As "unintentional" as ginned-up intelligence that made the case for waging aggressive war against oil-rich Iraq!

In a follow-up piece, the Times revealed that NSA "appears to have tolerated significant collection and examination of domestic e-mail messages without warrants."

A former NSA analyst "read into" the illegal program told Lichtblau and Risen that he "and other analysts were trained to use a secret database, code-named Pinwale, in 2005 that archived foreign and domestic e-mail messages."

Email readily handed over by Google, Microsoft or other firms "subject to lawful access" by the Pentagon spy satrapy?

The Times' anonymous source said "Pinwale allowed N.S.A. analysts to read large volumes of e-mail messages to and from Americans as long as they fell within certain limits--no more than 30 percent of any database search, he recalled being told--and Americans were not explicitly singled out in the searches."

Nor, were they excluded from such illicit practices.

As Jane Mayer revealed in The New Yorker, "privacy controls" and "anonymizing features" of a program called ThinThread, which would have complied with the law if Americans' communications were swept into NSA's giant eavesdropping nets, were rejected in favor of the "$1.2 billion flop" called Trailblazer.

And, as previously reported, when Wyden and Udall sought information from the Office of the Director of National Intelligence on just how many Americans had their communications monitored, the DNI stonewalled claiming "it is not reasonably possible to identify the number of people located in the United States whose communications may have been reviewed under the authority."

Why? Precisely because such programs act like a giant electronic sponge and soak-up and data mine huge volumes of our communications.

As former NSA manager and ThinThread creator Bill Binney told The New Yorker, that "little program ... got twisted" and was "used to eavesdrop on the whole world."

Three years after Barack Obama promised to curb Bush administration "excesses," illegal surveillance programs continue to expand under his watch.

A Permanent "State of Exception"

Under our current political set-up, "states of exception" and national security "emergencies" have become permanent features of social life.

Entire classes of citizens and non-citizens alike are now suspect; anarchists, communists, immigrants, Muslims, union activists and political dissidents in general are all subject to unprecedented levels of scrutiny and surveillance.

From "enhanced security screenings" at airports to the massive expansion of private and state databases that archive our spending habits, whom we talk to and where we go, increasingly, as the capitalist system implodes and millions face the prospect of economic ruin, the former American republic takes on the characteristics of a corporate police state.

Security researcher and analyst Christopher Soghoian reported on his Slight Paranoia blog, that according to "an official DOJ report, the use of 'emergency', warrantless requests to ISPs for customer communications content has skyrocketed over 400% in a single year."

This is no trifling matter.

As CNET News disclosed last month, "Internet providers would be forced to keep logs of their customers' activities for one year--in case police want to review them in the future--under legislation that a U.S. House of Representatives committee approved today."

Declan McCullagh reported that "the 19 to 10 vote represents a victory for conservative Republicans, who made data retention their first major technology initiative after last fall's elections."

Significantly, CNET noted that this is also a "victory" for Democratic appointees of Barack Obama's Justice Department "who have quietly lobbied for the sweeping new requirements."

According to CNET, a "last-minute rewrite of the bill expands the information that commercial Internet providers are required to store to include customers' names, addresses, phone numbers, credit card numbers, bank account numbers, and temporarily-assigned IP addresses."

However, by "a 7-16 vote, the panel rejected an amendment that would have clarified that only IP addresses must be stored."

Consider the troubling implications of this sweeping bill. While ultra-rightist "Tea Party" Republicans vowed to get "the government off our backs," when it comes to illicit snooping by securocrats whose only loyalty is to a self-perpetuating security bureaucracy and the defense grifters they serve (and whom they rely upon for plum positions after government "retirement"), all our private data is now up for grabs.

The bill, according to Rep. Zoe Lofgren (D-CA), who spearheaded opposition to the measure said that if passed, it would create "a data bank of every digital act by every American" that would "let us find out where every single American visited Web sites."

To make the poison pill legislation difficult to oppose, proponents have dubbed it, wait, the "Protecting Children From Internet Pornographers Act of 2011" even though, as CNET noted, "the mandatory logs would be accessible to police investigating any crime and perhaps attorneys litigating civil disputes in divorce, insurance fraud, and other cases as well."

Soghoian relates that the 2009 two-page Justice Department report to Congress took 11 months (!) to release under a Freedom of Information Act request.

Why the Justice Department stonewall?

Perhaps, as the Electronic Frontier Foundation disclosed last year, political appointees at the Department of Homeland Security and presumably other secret state satrapies, ordered "an extra layer of review on its FOIA requests."

EFF revealed that a 2009 policy memo from the Department's Chief FOIA Officer and Chief Privacy Officer, Mary Ellen Callahan, that DHS components "were required to report 'significant FOIA activities' in weekly reports to the Privacy Office, which the Privacy Office then integrated into its weekly report to the White House Liaison."

Included amongst designated "significant FOIA activities" were requests "from any members of 'an activist group, watchdog organization, special interest group, etc.' and 'requested documents [that] will garner media attention or [are] receiving media attention'."

Despite the appearance of reporting "emergency" spying requests to congressional committees presumably overseeing secret state activities (a generous assumption at best), "it is quite clear" Soghoian avers, "that the Department of Justice statistics are not adequately reporting the scale of this form of surveillance" and "underreport these disclosures by several orders of magnitude."

As such, "the current law is largely useless." It does not apply to "state and local law enforcement agencies, who make tens of thousands of warrantless requests to ISPs each year," and is inapplicable to "to federal law enforcement agencies outside DOJ."

"Finally," Soghoian relates, "it does not apply to emergency disclosures of non-content information, such as geo-location data, subscriber information (such as name and address), or IP addresses used."

And with Congress poised to pass sweeping data retention legislation, it should be clear that such "requirements" are mere fig leaves covering-up state-sanctioned lawlessness.

War On Terror 2.0.1: Looting the Global Economy

Criminal behavior by domestic security agencies connect America's illegal wars of aggression to capitalism's economic warfare against the working class, who now take their place alongside "Islamic terrorists" as a threat to "national security."

Despite efforts by the Obama administration and Republican congressional leaders to "balance the books" on the backs of the American people through massive budget cuts, as economist Michael Hudson pointed out in Global Research, the manufactured "debt ceiling" crisis is a massive fraud.

The World Socialist Web Site averred that "as concerns over a double-dip recession in the US and the European debt crisis sent global markets plunging--including a 512-point sell-off on the Dow Jones Industrial Average Thursday--financial analysts and media pundits developed a new narrative. Concern that Washington lacked the 'political will' to slash long-standing entitlement programs was exacerbating 'market uncertainty'."

Leftist critic Jerry White noted that "in fact, the new cuts will only intensify the economic crisis, while the slashing of food stamps, unemployment compensation, health care and education will eliminate programs that are more essential for survival than ever."

Indeed, as Marxist economist Richard Wolff pointed out in The Guardian, while the "crisis of the capitalist system in the US that began in 2007," may have "plunged millions into acute economic pain and suffering," the "recovery" that began in 2009 "benefited only the minority that was most responsible for the crisis: banks, large corporations and the rich who own the bulk of stocks. That so-called recovery never 'trickled down' to the US majority: working people dependent on jobs and wages'."

And despite mendacious claims by political officials and the media alike, the Pentagon will be sitting pretty even as Americans are forced to shoulder the financial burden of U.S. imperial adventures long into an increasingly bleak future.

Defense Secretary Leon Panetta "warned Thursday of dire consequences if the Pentagon is forced to make cuts to its budget beyond the $400 billion in savings planned for the next decade," The Washington Post reported.

The Post noted that "senior Pentagon officials have launched an offensive over the past two days to convince lawmakers that further reductions in Pentagon spending would imperil the country's security."

"Instead of slashing defense," Panetta urged lawmakers to "rely on tax increases and cuts to nondiscretionary spending, such as Medicare and Social Security, to provide the necessary savings."

But as Hudson points out, "war has been the major cause of a rising national debt." After all, it was none other than bourgeois icon Adam Smith who argued that "parliamentary checks on government spending were designed to prevent ambitious rulers from waging war."

Hudson writes that "if people felt the economic impact of war immediately--rather than postponing it by borrowing--they would be less likely to support military adventurism."

But therein lies the rub. Since "military adventurism" is the only "growth sector" of an imploding capitalist economy, the public spigot which finances everything from cost-overrun-plagued stealth fighter jets to multibillion dollar spy satellites, along with an out-of-control National Surveillance State, will be kept open indefinitely.

On this score, the hypocrisy of our rulers abound, especially when it comes to the mantra that "we" must "live within our means."

As Wolff avers, "where was that phrase heard when Washington decided to spend on an immense military (even after becoming the world's only nuclear superpower) or to spend on very expensive wars in Iraq, Afghanistan, Pakistan and Libya (now all going on at the same time)? No, then the talk was only about national security needed to save us from attacks."

"Attacks," it should be duly noted, that may very well have been allowed to happen as the World Socialist Web Site recently reported.

Driving home the point that war, and not social- and infrastructure investment fuel deficits, Hudson averred that "the present rise in in U.S. Treasury debt results from two forms of warfare. First is the overtly military Oil War in the Near East, from Iraq to Afghanistan (Pipelinistan) to oil-rich Libya. These adventures will end up costing between $3 and $5 trillion."

"Second and even more expensive," the economist observed, "is the more covert yet more costly economic war of Wall Street against the rest of the economy, demanding that losses by banks and financial institutions be passed onto the government balance sheet ('taxpayers'). The bailouts and 'free lunch' for Wall Street--by no coincidence, Congress's number one political campaign contributor--cost $13 trillion."

"Now that finance is the new form of warfare," Hudson wrote, "where is the power to constrain Treasury and Federal Reserve power to commit taxpayers to bail out financial interests at the top of the economic pyramid?"

And since "cutbacks in federal revenue sharing will hit cities and states hard, forcing them to sell off yet more land, roads and other assets in the public domain to cover their budget deficit as the U.S. economy sinks further into depression," Hudson wrote that "Congress has just added fiscal deflation to debt deflation, slowing employment even further."

While the global economy circles the drain, with ever more painful cuts in so-called "entitlement" programs meant to cushion the crash now on the chopping block, the corporate and political masters who rule the roost are sharpening their knives, fashioning administrative and bureaucratic surveillance tools, the better to conceal the "invisible hand" of that bitch-slaps us all.

And they call it "freedom."

White House Stonewalls Senators on Use of "Secret Law" to Spy on Americans

During last spring's run-up to the reauthorization of three expiring provisions of the USA Patriot Act, Senator Ron Wyden (D-OR) charged that the administration and the FBI was relying on a "secret" interpretation of law to vacuum-up exabytes of data, including cell phone location records and internet data mining that target Americans.

In March, a written statement to the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security by Justice Department official Todd Hinnen confirmed that the administration had used Section 215, the so-called "business records" section of the Act "to obtain driver's license records, hotel records, car rental records, apartment leasing records, credit card records, and the like."

Further confirmation of Wyden's charges came from an unlikely source: a White House nominee for a top counterterrorism position.

Last week Wired reported that Matthew Olsen, the administration's pick to head the National Counterterrorism Center "acknowledged that 'some of the pleadings and opinions related to the Patriot Act' to the secret Foreign Intelligence Surveillance Court that approves snooping warrants 'are classified'."

If confirmed, Olsen will replace Michael E. Leiter, the Bushist embed who told the Senate last year during hearings into 2009's aborted plot to bring down Northwest Airlines Flight 253 over Detroit on Christmas Day: "I will tell you, that when people come to the country and they are on the watch list, it is because we have generally made the choice that we want them here in the country for some reason or another."

What those reasons are for wanting a terrorist to board a packed airliner were not spelled out to Senate nor were they explored by corporate media. This raises an inevitable question: what else is the administration concealing from the American people?

White House Stonewall

Back in May, the Electronic Frontier Foundation (EFF) filed a Freedom of Information Act lawsuit against the Justice Department "demanding the release of a secret legal memo used to justify FBI access to Americans' telephone records without any legal process or oversight."

So far, the administration has refused to release the memos.

According to the civil liberties' watchdogs, a report last year by the DOJ's own Inspector General "revealed how the FBI, in defending its past violations of the Electronic Communications Privacy Act (ECPA), had come up with a new legal argument to justify secret, unchecked access to private telephone records."

"The Obama administration," The Washington Post reports, has continued "to resist the efforts of two Democratic senators to learn more about the government's interpretation of domestic surveillance law, stating that 'it is not reasonably possible' to identify the number of Americans whose communications may have been monitored under the statute."

In a letter to Wyden and Senator Mark Udall (D-CO), Kathleen Turner, the director of legislative affairs for the Office of the Director of National Intelligence (ODNI), claimed that a "joint oversight team" has not uncovered evidence "of any intentional or willful attempts to violate or circumvent the Foreign Intelligence Surveillance Act or FISA, which was amended in 2008."

Turner went on to say that "with respect to FAA" [FISA Amendments Act of 2008, the statute that "legalized" Bushist surveillance programs and handed retroactive immunity to spying telecoms like AT&T], "you [Wyden] asked whether any significant interpretations of the FAA are currently classified. As you are aware, opinions of the FISA Court usually contain extensive discussions of particularly sources, methods and operations and are therefore classified."

Throwing the onus back on political grifters in the House and Senate, Turner wrote: "Even though not publicly available, by law any opinion containing a significant legal interpretation is provided to the congressional intelligence committees."

With circular logic Turner claims that because "FISA Court opinions are so closely tied to the facts of the application under review that they cannot be made public in any meaningful form without compromising the sensitive sources and methods at issue."

At best, her statement is disingenuous. After all, it is precisely that secret interpretation of the law made by the White House Office of Legal Counsel that Wyden and others, including EFF, the Electronic Privacy Information Network (EPIC) and journalists are demanding the administration clarify.

Justice Department Shields NSA's Private Partners

The FBI isn't the only agency shielded by the Justice Department under cover of bogus "state secrets" assertions by the Obama administration.

On July 13, EPIC reported that a U.S. District Court Judge issued an opinion in their lawsuit (EPIC v. NSA), "and accepted the NSA's claim" that it can "neither confirm nor deny" that the agency "had entered into a relationship with Google following the China hacking incident in January 2010."

The privacy watchdogs sought documents under FOIA "because such an agreement could reveal that the NSA is developing technical standards that would enable greater surveillance of Internet users."

According to EPIC, the administration's "Glomar response" to "neither confirm nor deny" a covert relationship amongst giant media corporations such as Google and secret state agencies "is a controversial legal doctrine that allows agencies to conceal the existence of records that might otherwise be subject to public disclosure."

This issue is hardly irrelevant to internet users. CNET News reported last week that "Google's Street View cars collected the locations of millions of laptops, cell phones, and other Wi-Fi devices around the world, a practice that raises novel privacy concerns."

And given the government's penchant to vacuum-up so-called "transactional data" without benefit of a warrant, would media giants such as Google, high-tech behemoths such as Apple or Microsoft, beholden to the federal government for regulatory perks, resist efforts by the feds demanding they cough-up users' locational data?

Investigative journalist Declan McCullagh found that the cars "were supposed to collect the locations of Wi-Fi access points. But Google also recorded the street addresses and unique identifiers of computers and other devices using those wireless networks and then made the data publicly available through Google.com until a few weeks ago."

According to CNET, "the French data protection authority, known as the Commission Nationale de l'Informatique et des Libertés (CNIL) recently contacted CNET and said its investigation confirmed that Street View cars collected these unique hardware IDs. In March, CNIL's probe resulted in a fine of 100,000 euros, about $143,000."

On Friday, CNET reported that Microsoft too, is in on the geolocation spy game.

Declan McCullagh wrote that "Microsoft has collected the locations of millions of laptops, cell phones, and other Wi-Fi devices around the world and makes them available on the Web."

A security researcher confirmed that the "vast database available through Live.com publishes the precise geographical location, which can point to a street address and sometimes even a corner of a building, of Android phones, Apple devices, and other Wi-Fi enabled gadgets."

Such information in the hands of government snoops would prove invaluable when it comes to waging War On Terror 2.0, the so-called "cyber war." Which is why the administration is fighting tooth and nail to keep this information from the public.

On the cyber front, EPIC is suing the White House to obtain the top secret National Security Presidential Directive that sets out the "NSA's cyber security authority," and is seeking clarification from the agency about so-called internet vulnerability assessments, "the Director's classified views on how the NSA's practices impact Internet privacy, and the NSA's 'Perfect Citizen' program."

As Antifascist Calling previously reported, "Perfect Citizen" is a $100 million privacy-killing program under development by the agency and defense giant Raytheon. Published reports informed us that the program will rely on a suite of sensors deployed in computer networks and that proprietary software will persistently monitor whichever system they are plugged into.

While little has been revealed about how Perfect Citizen will work, it was called by a corporate insider the cyber equivalent of "Big Brother," according to an email obtained last year by The Wall Street Journal.

New Report Highlights "Transparency" Fraud

The refusal by the White House to divulge information that impact Americans' civil liberties and privacy rights, along with their expansion of repressive national security and surveillance programs launched by the Bush regime, underscores the fraudulent nature of Obama's so-called "transparency administration."

A new report published by the American Civil Liberties Union, Drastic Measures Required: Congress needs to Overhaul U.S. Secrecy Laws and Increase Oversight of the Secret Security Establishment, documents how "out-of-control secrecy is a serious disease that is hurting American democracy."

Authors Jay Stanley and former FBI undercover agent turned whistleblower, Michael German, write that "we are now living in an age of government secrecy run amok."

According to the report, "reality has not always lived up to the rhetoric" of the Obama regime. Since the administration took office, the White House:

• Embraced the Bush administration's tactic of using overbroad "state secrets" claims to block lawsuits challenging government misconduct.

• Fought a court order to release photos depicting the abuse of detainees held in U.S. custody and supported legislation to exempt these photos from FOIA retroactively. Worse, the legislation gave the Secretary of Defense sweeping authority to withhold any visual images depicting the government's "treatment of individuals engaged, captured, or detained" by U.S. forces, no matter how egregious the conduct depicted or how compelling the public's interest in disclosure.

• Threatened to veto legislation designed to reform congressional notification procedures for covert actions.

• Aggressively pursued whistleblowers who reported waste, fraud and abuse in national security programs with criminal prosecutions to a greater degree than any previous presidential administration.

• Refused to declassify information about how the government uses its authority under section 215 of the Patriot Act to collect information about Americans not relevant to terrorism or espionage investigations. (Mike German and John Stanley, Drastic Measures Required, Washington, D.C., The American Civil Liberties Union, July 2011, pp. 7-8)

Amongst other findings in the report we learn that more than 2.4 million personnel, "official" denizens of the secret state which include the 16 agencies of the so-called "Intelligence Community" and outsourced private contractors hold top secret and above security clearances.

Although the Government Accountability Office (GAO) disclosed that the Intelligence Authorization Act of 2010 "required required the Director of National Intelligence (DNI) to calculate and report the aggregate number of security clearances for all government employees and contractors to Congress by February 2011," as of this writing "the DNI has so far failed to produce this data."

Last year, The Washington Post's "Top Secret America" series revealed that "some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States," and that "the privatization of national security" has been made possible by a "nine-year 'gusher' of money."

The Post's reporting on America's security outsourcing mania echoed critical investigations by other journalists, including those by Tim Shorrock, who has reported extensively on intelligence privatization in his essential book Spies For Hire and by James Bamford in The Shadow Factory, which explored how NSA was turned loose on the American people.

In a follow-up piece last December, investigative journalists Dana Priest and William M. Arkin described how "the United States is assembling a vast domestic intelligence apparatus to collect information about Americans, using the FBI, local police, state homeland security offices and military criminal investigators."

"The government's goal," Priest and Arkin wrote, "is to have every state and local law enforcement agency in the country feed information to Washington to buttress the work of the FBI, which is in charge of terrorism investigations in the United States."

As the Post reported, "technologies and techniques honed for use on the battlefields of Iraq and Afghanistan have migrated into the hands of law enforcement agencies in America."

This is a pernicious development. As I reported three years ago, one such program were efforts by the Department of Homeland Security, partnering-up with the Pentagon, to train America's fleet of top secret surveillance satellites on the American people.

That program, since killed by DHS, the National Applications Office, would have provided state and local authorities access to geospatial intelligence gleaned from military spy satellites and would have done so with no congressional oversight or privacy controls in place and would have handed over this sensitive data to selected law enforcement partners.

Local Police Control Ceded to the FBI

Along with intrusive techniques and highly-classified programs, Priest and Arkin wrote that the FBI has built "a database with the names and certain personal information, such as employment history, of thousands of U.S. citizens and residents whom a local police officer or a fellow citizen believed to be acting suspiciously."

What constitutes "suspicious behavior" of course, is in the eye of the beholder, and can constitute anything from taking photographs on a public street to organizing and participating in protests against America's endless wars.

Just recently, the San Francisco Bay Guardian revealed that local cops "assigned to the FBI's terrorism task force can ignore local police orders and California privacy laws to spy on people without any evidence of a crime."

Investigative journalist Sarah Phelan discovered that even after a "carefully crafted" set of rules on intelligence gathering had been in place "since police spying scandals of the 1990s," were "bypassed without the knowledge or consent of the S.F. Police Commission."

John Crew, a police practices expert with the American Civil Liberties Union of Northern California told the Bay Guardian that the 2007 Memorandum of Understanding by S.F. cops and the FBI means that "Police Commission policies do not apply" and that it "allows San Francisco police to circumvent local intelligence-gathering policies and follow more permissive federal rules."

Despite serious concerns over the Bureau's long-standing practice of spying on political dissidents and its "War On Terror" racial profiling policies, in a follow-up piece the Bay Guardian reported that Police Commission President Thomas Mazzucco, a former federal prosecutor, seemed "more concerned about defending federal practices and officials ... than worrying about the role and authority of the civilian oversight body he now represents."

The ACLU's Crew noted that when the FBI came to the SFPD with a new MOU, "there was no review by the City Attorney, and no notice to the police commission."

"Now, we didn't know about that MOU because it was kept secret at the insistence of the FBI for four years," Crew told Sarah Phelan. Crew also noted that "when ACLU and ALC [Asian Law Caucus] met with the SFPD in 2010, they were suddenly told that the police department couldn't talk about these issues without FBI permission.

"That set off a warning sign," Crew observed, "noting that in early April, when the ACLU and ALC finally got the MOU released, their worst suspicions were confirmed."

"There was no public discussion of transforming the SFPD into a national intelligence gathering association," ALC attorney Veena Dubal told the Bay Guardian. "The problem is that the FBI changed the deal, and the SFPD signed it, without telling anyone."

Neither the Bay Guardian nor the ACLU of Northern California have released the 2007 Memorandum of Understanding. However, the secrecy-shredding web site Public Intelligence has posted a sample MOU that makes for interesting reading indeed.

According to the document, local police agencies who participate in JTTFs will adhere to loose rules covered by the "Attorney General's Guidelines for Domestic FBI Operations." As Antifascist Calling reported last month, those rules will soon be loosened even further by "constitutional scholar" Barack Obama's Justice Department.

But here's the kicker; local police participating in JTTFs will be subject to rules crafted in Washington. State and municipal policies which sought to limit out-of-control spying on local activists by notorious police "Red Squads," are annulled in favor of "guidance on investigative matters handled by the JTTF" that "will be issued by the Attorney General and the FBI."

Such "guidance" we're told governs everything from "the Use of Confidential Informants" to "Guidelines Regarding Disclosure to the Director of Central Intelligence and Homeland Security Officials of Foreign Intelligence Acquired in the Course of a Criminal Investigation."

In other words, police participating in JTTFs become the CIA's eyes on the ground!

We are informed that "in order to comply with Presidential Directives, the policy and program management of the JTTFs is the responsibility of FBI Headquarters (FBIHQ)." As readers are well aware, more often than not those "Presidential Directives" arrive with built-in poison pills in the form of top secret annexes concealed from the public.

Such questions are not academic exercises.

More than three years ago, author and researcher Peter Dale Scott wrote in CounterPunch that "Congressman Peter DeFazio, a member of the House Homeland Security Committee, told the House that he and the rest of his Committee had been barred from reviewing parts of National Security Presidential Directive 51, the White House supersecret plans to implement so-called 'Continuity of Government' in the event of a mass terror attack or natural disaster."

"The story," Scott wrote, "ignored by the mainstream press, involved more than the usual tussle between the legislative and executive branches of the U.S. Government. What was at stake was a contest between Congress's constitutional powers of oversight, and a set of policy plans that could be used to suspend or modify the constitution."

Should something go wrong, the onus for civil or criminal penalties resulting from lawsuits for illegal acts by JTTF officers rests solely with local taxpayers who may have to foot the bill. This is clearly spelled out: "The Participating Agency acknowledges that financial and civil liability, if any and in accordance with applicable law, for the acts and omissions of each employee detailed to the JTTF remains vested with his or her employing agency."

Got that? You violate someone's rights and then get caught, well, tough luck chumps.

Intelligence Spending, No End in Sight

While the administration and their troglodytic Republican allies in Congress are planning massive cuts in social spending as a result of a manufactured "deficit crisis," the President's fiscal year 2012 budget proposes a five-year freeze for "all discretionary spending outside of security."

Indeed, according to the Associated Press, the Defense Department will reap a windfall some $727.4 billion and DHS $44.3 billion. But these numbers only tell part of the story.

Back in March, Secrecy News disclosed that figures provided by ODNI and the Secretary of Defense "document the steady rise of the total U.S. intelligence budget from $63.5 billion in FY2007 up to last year's total of $80.1 billion."

Americans are told they face "hard choices" when it comes to America's fiscal house of cards and that they--and they alone--not the capitalist thieves who destroyed the economy, must shoulder the burden.

But as economist Michael Hudson warned last week Global Research, the American people are "being lead to economic slaughter."

Hudson writes that "whenever one finds government officials and the media repeating an economic error as an incessant mantra, there always is a special interest at work. The financial sector in particular seeks to wrong-foot voters into believing that the economy will be plunged into crisis if Wall Street does not get its way--usually by freeing it from taxes and deregulating it."

However, when it comes to the secret state and the corporate interests they serve, regulators, in the form of congressional oversight or the public, seeking answers about illegal government programs, need not apply.

After all, as ODNI securocrat Kathleen Turner told the Senate, "the questions you pose ... are difficult to answer in an unclassified letter."

And so it goes...

A Link to the Murdoch Scandal? Under the Radar Firm Sells Phone Tracking Tools to Police, Intelligence Agencies

Following revelations earlier this year by The Tech Herald that security firms with close ties to the Pentagon ran black ops for major U.S. banks and corporations, it became clear that proprietary software developed for the military and U.S. intelligence was being used to target Americans.

Those firms, including now-defunct HBGary Federal, parent company HBGary, Palantir (a start-up flush with cash from the CIA's venture capital arm In-Q-Tel) and Berico Technologies had partnered-up with the Bank of America's law firm Hunton & Williams and the U.S. Chamber of Commerce and devised a sub rosa plan of attack against WikiLeaks and Chamber critics.

And when the cyber-guerrilla collective Anonymous published some 70,000 emails and documents filched from HBGary servers, it was off to the races.

In the intervening months since that story first broke, journalists and researchers have turned their attention to a dark web of security firms developing surveillance software for law enforcement, the Pentagon, and repressive foreign governments.

Last week, Wired revealed that one such shadowy firm, TruePosition, "a holding of the Liberty Media giant that owns Sirius XM and the Atlanta Braves," is marketing "something it calls 'location intelligence,' or LOCINT, to intelligence and law enforcement agencies," investigative journalist Spencer Ackerman disclosed.

The Pennsylvania-based company has sold their location services system to NSA surveillance partner AT&T and T-Mobile, allowing those carriers to pinpoint "over 60 million 911 calls annually."

"For the better part of decade," Ackerman writes, "TruePosition has had contracts to provide E-911 services with AT&T (signed originally with Cingular in 2001, which AT&T acquired) and T-Mobile (2003)."

Known as "geofencing," the firm explains that location tech "collects, analyzes, stores and displays real-time and historical wireless events and locations of targeted mobile users."

Bloomberg BusinessWeek reported that amongst the services TruePosition offers clients are "products for safety and security applications, including family monitoring, personal medical alert, emergency number service, and criminal tracking."

Additionally, BusinessWeek reports, the company tailors its "enterprise applications" to corporations interested in "workforce management, asset tracking, and location-based advertising; consumer applications, including local search, traffic, and navigation."

But what should concern readers is the firm's "government applications" market which includes everything from "homeland security" and "military intelligence" to "force tracking."

According to a press release posted on the firm's web site, the "TruePosition Location Intelligence Management System (LIMS)" is a "a multi-dimensional database, which uses probes within mobile networks to capture and store all mobile phone network events--including the time and the location of events. Mobile phone events are items like calls made and received, text messages sent and received, a phone powered on and off, and other rich mobile phone intelligence."

Deploying technology dubbed Uplink Time Difference of Arrival (U-TDOA), the system, installed on cell phone towers, identifies a phone's approximate location--within 30 meters--even if the handset isn't equipped with GPS.

Undoubtedly the system can save lives. "In one case," Ackerman reports, "a corrections officer ... was abducted by a recent parolee. But because her cellphone was turned on and her carrier used TruePosition's location tech, police were able to locate the phone along a Kentucky highway. They set up a roadblock, freed the officer and arrested her captor."

All well and good. However, in the hands of repressive governments or privacy-invading corporations, say Rupert Murdoch's media empire, there just might be far different outcomes.

A Link to the Murdoch Scandal?

The relevance of location intelligence in general and more pointedly, TruePosition's LIMS cellphone surveillance products which may, or may not, have been sold to London's Metropolitan Police and what role they may have played in the Murdoch News of the World (NoW) phone hacking scandal have not been explored by corporate media.

While the "who, what, where" aspects of the scandal are now coming sharply into focus, the "how," that is, the high-tech wizardry behind invasive privacy breaches, and which firms developed and profited from their sale, have been ignored.

Such questions, and related business entanglements, should be of interest to investigators on both sides of the Atlantic.

After all, TruePosition's parent company, the giant conglomerate Liberty Media currently holds an 18 percent stake in News Corporation.

With corporate tentacles stretching from investments in TimeWarner Cable to Expedia and from QVC to Starz and beyond, Liberty Media is a multi-billion dollar media behemoth with some $10.9 billion in revenue in 2010, according to an SEC filing by the firm.

With deep pockets and political clout in Washington the company is "juiced."

In 2011, Liberty's CEO, John C. Malone, surpassed Ted Turner as the largest private landowner in the United States, controlling some 2.1 million acres according to The New York Times.

Dubbed "Darth Vader" by The Independent, Malone acquired a 20 percent stake in News Corp. back in 2000 and "was one of the main investors who rode to the rescue of Mr Murdoch in the early 1990s when News Corp was on its knees."

The New York Times reported back in 2005 that Malone's firm was "unlikely to unwind its investment in the News Corporation" because he considered "the stake in the News Corporation a long-term investment, meaning that the relationship between him and Rupert Murdoch, the chairman of the News Corporation, was not likely to be dissolved any time soon."

After acrimonious mid-decade negotiations that stretched out over two years, the media giants cobbled together a deal in 2006 resulting in a $11 billion asset swap, one that gave Liberty control of the DirectTV Group whilst helping Murdoch "tighten his grip" on News Corp., according to The New York Times.

Interestingly enough during those negotiations, investment banking firms Goldman Sachs and J.P. Morgan Chase along with the white shoe law firm Hogan & Hartson advised News Corp., while Liberty was represented by Bear Stearns and the Baker Botts law firm, long time Bush family consiglieres.

All this can be chalked-up to an interesting set of coincidences. However, the high stakes involved and the relationships and connections forged over decades, including those amongst players who figured prominently in capitalism's 2008 global economic crisis and Bush family corruption, cannot be ignored.

A Suspicious Death

Last week's suspicious death of former NoW whistleblower Sean Hoare should set alarm bells ringing.

When the scandal broke, it was Hoare who told The New York Times last year that senior editors at NoW and another Murdoch tabloid, The Sun, actively encouraged staff to spy on celebrities and others, including victims of the London terror attacks, British soldiers killed in Afghanistan and Iraq and the murdered teenager Milly Dowler; all in pursuit of "exclusives."

The Guardian reported that Hoare said that "reporters at the NoW were able to use police technology to locate people using their mobile phone signals, in exchange for payments to police officers."

"He said journalists were able to use 'pinging', which measured the distance between a mobile handset and a number of phone masts to pinpoint its location," The Guardian revealed.

Hoare described "how reporters would ask a news desk executive to obtain the location of a target: "Within 15 to 30 minutes someone on the news desk would come back and say 'Right, that's where they are.'"

Quite naturally, this raises the question which "police technology" was used to massage NoW exclusives and which firms made a pretty penny selling their wares to police, allegedly for purposes of "fighting crime" and "counterterrorism"?

It was Hoare after all who told The New York Times just days before his death that when he worked for NoW "pinging cost the paper nearly $500 on each occasion."

According to the Times, Hoare found out how the practice worked "when he was scrambling to find someone and was told that one of the news desk editors, Greg Miskiw, could help."

The Times reports that Miskiw "asked for the person's cellphone number, and returned later with information showing the person's precise location in Scotland."

An unnamed "former Scotland Yard officer" interviewed by the Times said "the individual" who provided confidential information to NoW and other Murdoch holdings "could have been one of a small group entitled to authorize pinging requests," that is a senior counterterrorism officer charged with keeping the British public "safe."

Hoare told the Times "the fact that it was a police officer was clear from his exchange with Mr. Miskiw."

"'I thought it was remarkable and asked him how he did it, and he said, 'It's the Old Bill, isn't it?'"

"At that point, you don't ask questions," Hoare said.

Yet despite the relevance of the reporter's death to the scandal, police claimed Hoare's sudden demise was "unexplained but not thought to be suspicious." Really?

As the World Socialist Web Site points out: "The statement is at the very least extraordinary, and at worst sinister in its implications."

Left-wing journalist Chris Marsden wrote that "Hoare is the man who broke silence on the corrupt practices at the News of the World and, most specifically, alleged that former editor Andy Coulson, who later became Prime Minister David Cameron's director of communications, was fully aware of phone hacking that took place on an 'industrial scale'."

Aside from the secret state, what other entities are capable of intercepting phone and other electronic communications on "an industrial scale"? Given Rupert Murdoch's close ties to the political establishment on both sides of the Atlantic, is it a stretch to speculate that a "sympathetic" intelligence service wouldn't do all they could to help a "friend," particularly if cash payments were involved?

How could Hoare's death not be viewed suspiciously?

Indeed, "the morning after Hoare's body was found," Mardsen writes, "former Metropolitan Police Commissioner Sir Paul Stephenson and his former deputy, John Yates, were to give evidence before a home affairs select committee. Stephenson had tendered his resignation Sunday and Yates Monday."

Conveniently, for those with much to hide, including police, "the death of Hoare means that his testimony will never be heard by any such inquiry or, more importantly, by any criminal investigation that may arise."

Yet, despite a pending coroner's inquest into the exact cause of the reporter's death, corporate media have rushed to judgement, labeling anyone who raise suspicions as being, what else, "conspiracy theorists."

This despite the fact, as the World Socialist Web Site reported Saturday that information has surfaced "regarding the extent of News International links to known criminals."

Indeed, on July 6 left-wing journalist Robert Stevens reported that "Labour MP Tom Watson told Parliament that News International chief executive and former News of the World editor Rebekah Brooks 'was present at a meeting with Scotland Yard when police officers pursuing a murder investigation provided her with evidence that her newspaper was interfering with the pursuit of justice'."

"'She was told of actions by people she paid to expose and discredit David Cook [a Detective Superintendent] and his wife Jackie Haines so that Mr. Cook would be prevented from completing an investigation into a murder'.

"Watson added," Stevens writes, that "'News International was paying people to interfere with police officers and were doing so on behalf of known criminals. We know now that News International had entered the criminal underworld'."

Although Hoare had suffered from years of alcohol and cocaine abuse, he was in rehab and by all accounts on the road to recovery. Hoare could have died from natural causes but this has not yet been established.

Pending histology and toxicology tests which will take weeks, and a coroner's inquest was adjourned July 21 until said test results were in, short of a definitive finding, nothing can nor should be ruled out, including murder, by a party or parties unknown.

While it would be a fatal exercise in rank stupidity for News Corp. to rub out Sean Hoare, would others, including police or organized crime figures caught up in the scandal and known to have been paid by News Corp. "people to interfere with police officers" and to have done so "on behalf of known criminals," have such qualms?

An Open Question

We do not know if TruePosition sold LIMS to London's Metropolitan Police, key players in the Murdoch hacking scandal, and the firm won't say who they sell to.

However, whether they did or did not is a relevant question. That security firms develop and sell privacy-killing products and then wash their hands of responsibility how and by whom their products are used--for good or ill--is hardly irrelevant to victims of police repression or private corruption by entities such as News Corp.

The issue here are the actions taken by our corporate and political minders who believe that everything in terms of smashing down walls between public and private life is up for grabs, a commodity auctioned off to the highest bidder.

While we are told by high-tech firms out to feather their nests and politicians that "law enforcement" require we turn over all our data to police to "keep us safe," the Murdoch scandal reveals precisely that it was police agencies corrupted by giant corporations which had allowed such criminal behavior to go unchecked for years.

And with Congress and Obama Justice Department officials pursuing legislation that will require mobile carriers to store and disclose cell-tower data to police and secret state agencies--all without benefit of a warrant, mind you--as well as encryption back doors built into the internet, we are reaching a point where a perfect storm threatens privacy well into the future, if not permanently.

A Looming Threat

Since LIMS 2008 introduction some 75,000 mobile towers in the U.S. have been equipped with the system, FoxNews, ironically enough, reported two years ago.

That same report informed us that "LOCINT continues to operate in Middle Eastern and Asia-Pacific nations where no legal restrictions exist for tracking cell phone signals."

TruePosition's marketing vice president Dominic Li told Fox "when you establish a geofence, anytime a mobile device enters the territory, our system will be alerted and provide a message to the customer."

Li went on to say, "we realize that this has a lot of value to law enforcement agencies outside of search and rescue missions. It gives rise to a whole host of new solutions for national security."

In keeping with the firm's penchant for secrecy, risk averse when it comes to negative publicity over the civil liberties' implications of their products, "citing security concerns," Fox reported that "company officials declined to specify which countries currently use the technology."

TruePosition claims that while wireless technology "has revolutionized communication" it has a "dark side" as "terrorists and criminals" exploit vulnerabilities to create "serious new threats to the security of nations worldwide."

Touting their ability to combine "location determination and network data mining technologies," TruePosition "offers government agencies, security experts and law enforcement officials powerful, carrier-grade security solutions with the power to defend against criminal and terrorist activity."

Never mind that most of the "serious new threats" to global citizens' rights come from unaccountable state security agencies and international financial cartels responsible for the greatest theft of resources in human history.

For interested parties such as TruePosition, "actionable intelligence" in the form of "data mining to monitor activity and behavior over time in order to build detailed profiles and identify others that they associate with," will somehow, magically one might say, lead to the apprehension of "those who threaten the safety of citizens."

Unasked is the question: who will protect us from those who develop and sell such privacy killing technologies?

Certainly not Congress which has introduced legislation "that would force Internet companies to log data about their customers," CNET News reported earlier this month.

"As a homeland security tool," Wired reported, LIMS is "enticing." Brian Varano, TruePosition's marketing director told Spencer Ackerman to "imagine an 'invisible barrier around sensitive sites like critical infrastructure,' such as oil refineries or power plants."

"The barrier contains a list of known phones belonging to people who work there, allowing them to pass freely through the covered radius. 'If any phone enters that is not on the authorized list, [authorities] are immediately notified,'" Varano told Wired.

While TruePosition's technology may be useful when it comes to protecting nuclear installations and other critical infrastructure from unauthorized breaches and may be an important tool for investigators tracking down drug gangs, human traffickers, kidnappers and stalkers, as we have learned from the Murdoch scandal and the illegal driftnet surveillance of Americans, the potential that governments and private entities will abuse such powerful tools is also likely.

According to Wired while "TruePosition sells to mobile carriers," the company is "cagey about whether the U.S. government uses its products." Abroad however, Ackerman writes, "it sells to governments, which it won't name. Ever since it came out with LOCINT in 2008," Varano said that "'Ministries of Defense and Interior from around the world began beating down our door'."

That technological "quick fixes" such as LOCINT can augment the power of secret state agencies to "easily identify and monitor networks of dissidents," doesn't seem to trouble the firm in the least.

In fact, such concerns don't even enter the equation. As Wired reported, the company "saw a growth market in a field" where such products would have extreme relevance: "the expanding, globalized field of homeland security."

"It really was recession-proof," Varano explained to Ackerman, "because in many parts of the world, the defense and security budgets have either maintained where they were or increased by a large percentage."

Small comfort to victims of globalized surveillance and repression that in many places, including so-called "Western democracies," are already an ubiquitous part of the political landscape.

Consider the ease with which police can deploy LIMS for monitoring dissidents, say anticapitalist activists, union leaders or citizen organizers fighting against the wholesale theft of publicly-owned infrastructure to well-connected corporations (Greece, Ireland or Spain for example) by governments knuckling-under to IMF/ECB demands for so-called "deficit reduction" schemes.

As Stephen Graham points out in his seminal book Cities Under Siege, "as the everyday spaces and systems of urban everyday life are colonized by militarized control technologies" and "notions of policing and war, domestic and foreign, peace and war become less distinct, there emerges a massive boom in a convergent industrial complex encompassing security, surveillance, military technology, prisons, corrections, and electronic entertainment."

"It is no accident," Graham writes, "that security-industrial complexes blossom in parallel with the diffusion of market fundamentalist notions for organizing social, economic and political life."

Creating a climate of fear is key to those who seek to manage daily life. Thus the various media-driven panics surrounding nebulous, open-ended "wars" on "deficits," "drugs," "terror" and now "cyber-crime."

That firms such as TruePosition and hundreds of others who step in to capitalize on the highly-profitable "homeland security" market, hope to continue flying under the radar, we would do well to recall U.S. Supreme Court Justice Louis Brandeis who strongly admonished us that "sunlight is the best disinfectant."

(Image courtesy of PrisonPlanet.com)