CBO says immigration bill aids investors, not wage earners

The Senate’s pending immigration bill would boost investors’ and owners’ share of the economy for at least twenty years, and shrink some Americans’ wages and salaries for at least 10 years, according to a report from the Congressional Budget Office.

“The rate of return on capital would be higher [than on labor] under the legislation than under current law throughout the next two decades,” says the report, titled “The Economic Impact of S. 744.”

The higher rate of return would also push up the interest rates by paid by American taxpayers for the federal government’s $17 trillion debt, the report says.

The threat of lost wages has spurred opposition from populist conservatives, including Alabama Sen. Jeff Sessions, and from left-wing politicians, such as Vermont Sen. Bernie Sanders.

Populist conservatives who oppose the immigration bill, and some progressives who back the bill, also have long bemoaned the declining percentage of new wealth earned via blue-collar wages and professionals’ salaries.

President Barack Obama strongly backs the immigration rewrite, but has complained about the trend.
“In all countries around the world, you’re seeing growing inequality, and so we have to find ways to make sure that ladders of opportunity exist for those at the bottom, and that profits and increased productivity all does not just benefit those at the top,” Obama told a German audience in Berlin.

Last September, those worries were buttressed by a report from the Federal Reserve Bank of Cleveland, which showed that labor’s share of income has dropped by roughly 10 points since the early 2000s.

In turn, the share of income earned via capital has increased by the same percentage.

The federal Bureau of Economic Affairs estimates that labor’s share fell from roughly 67 percent to 58.2 percent.

The Bureau of Labor Statistics estimates the share fell from 75 percent in 1979 to 67 percent in 2007.

The result of this economic shift is that economic inequality widened, according to the authors of the reserve’s report, Margaret Jacobson and Filippo Occhino.

But once the economy recovers, the widening gap “will be reversed as the recovery continues … [and] the labor share will pick up and converge to its long-run trend value,” says the September report.

The pending bill will roughly double the inflow of immigrants over the next 20 years to roughly 46 million, or about 1 immigrant for every 7 Americans.

At least 85 percent of the immigrants will be low-skilled, and will not pay enough in taxes to cover the cost of routine government benefits, said Robert Rector, a budget analyst at the Heritage Foundation.

“It is very difficult to imagine that those households could pay enough in taxes to pay for their benefits,” he told reporters Wednesday.

The huge inflow of new workers will force down average wages, the CBO predicted. Average wages would then increase after 2025 as the market balanced itself out, according to the prediction.

“Because the bill would increase the rate of growth of the labor force, average wages would be held down in the first decade after enactment by a reduction in the ratio of capital to labor, which would make workers less productive,” said the densely written report.

The lost wages would be felt most by the low-skill Americans, but also by the smaller population of high-skill worker who will face an influx of competition from roughly 5 million skilled immigrants, and from a changing pool of roughly 2.5 million skilled guest-workers, the CBO report said.

“The legislation would particularly increase the number of workers with lower or higher skills but would have less effect on the number of workers with average skills. … The wages of lower- and higher-skilled workers would tend to be pushed downward slightly (by less than ½ percent) relative to the wages of workers with average skills,” said the CBO report.

Bill supporters dismissed the criticism.

The immigrant low-skill workers “complement our labor force, they make it more efficient,” said Diana Furchtgott-Roth of the Manhattan Institute. Even if the gain for capital increases inequality, “what’s important is not the degree of inequality, but the ability [of Americans] to move between income groups,” she said.

Increased immigration will help that movement because it will increase the economy’s efficiency, she told The Daily Caller.

The CBO report shows that low-skill and high-skill workers may not gain as much as middle-skill workers, but “average wages across all skills increase in the long term,” said Josh Culling from Americans for Tax Reform, which is backing the immigration rewrite.

The decline in average wages is caused by the arrival of many new low-skill immigrants, not by drops in Americans’ wages, he said.

The bill’s opponents’ dismiss these defenses.

For example, said Rector, the bill authors allow low-skill workers to be imported until the unemployment rate rises to 8.5 percent.

“What they’re really saying is that we don’t give a darn about those [American] low-skill workers,” Rector said.

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Lawsuit against EPA delayed until Obama unveils new climate plan

State governments and environmental groups are delaying a planned lawsuit against the Environmental Protection Agency.

Two months ago, the EPA delayed finalizing a controversial rule that would have put carbon dioxide emissions limits on new power plants and effectively ban coal plants. Three environmental groups, ten states and two cities planned to file suit against the agency over the delay, but they decided to hold back on the news that the Obama administration will soon unveil its plan to tackle global warming.

“Due to public reports that the president will be announcing major action on climate change very soon, the Attorney General has decided to postpone a lawsuit on this matter for a short period,” said a spokeswoman for New York Attorney General Eric Schneiderman, who is leading the effort.

“Our joint intention is to not file suit today and to see with great interest what the administration announces,” David Hawkins of the Natural Resources Defense Council told the Platts news service, adding that the Obama administration did not ask them to hold off on the lawsuit.

Last week, President Barack Obama reportedly told campaign donors that he will unveil his plans to address global warming, which could include using the EPA to curb power plant emissions.
The EPA’s proposed limits on new power plants have been harshly criticized because they would effectively ban the construction of coal-fired power plants unless they utilized carbon capture technology — which the industry says is not commercially viable.

While 10 states have expressed their intent to sue the EPA over the delay, another seven states’ governors have written to the EPA asking them to reconsider their emissions rule.

“The EPA’s proposed limits on greenhouse gas emissions threaten the livelihood of our coal miners to the point of killing jobs and crippling our state and national economies, while also weakening our country’s efforts toward energy independence,” said West Virginia Democratic Gov. Earl Ray Tomblin.

“Our ability to continue growing our economy depends on affordable, reliable power–and this can only be guaranteed if our nation truly has a diversified portfolio that included coal,” Kentucky Democratic Gov. Steve Beshear wrote to the EPA last month. Asking some states to dramatically alter their potential source of fuel for generating electricity puts their citizens at a distinct economic disadvantage.”
EPA regulations are already projected to shut down more than 280 coal-fired generating units, according to the American Coalition for Clean Coal Electricity.
“EPA continues to downplay the damage its regulations are causing to the U.S. economy and to the many states that depend on coal for jobs and affordable electricity,” said Mike Duncan, president and CEO of ACCCE.

Some have speculated that the EPA delayed finalizing the new power plant rules in order to create a separate standard for coal plants, so they can be built without having to install carbon capture technology.

“I have not heard or had it implied to me that there’s serious consideration to setting some separate standard for coal plants,” Hawkins told Platts, adding that environmental groups intending to sue the EPA have not yet decided on how long they would wait for the Obama administration.

Environmentalists hope that recent small steps to address global warming taken by the Obama administration — such as the deal to limit ozone emissions with China — signal the beginning of a bigger push to address global warming.

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Whistleblower Says State Department Trying to Bully Her Into Silence

The State Department investigator who accused colleagues last week of using drugs, soliciting prostitutes, and having sex with minors says that Foggy Bottom is now engaged in an "intimidation" campaign to stop her.

Last week's leaks by Aurelia Fedenisn, a former State Department inspector general investigator, shined a light on alleged wrongdoing by U.S. officials around the globe. But her attorney Cary Schulman tells The Cable that Fedenisn has paid a steep price: "They had law enforcement officers camp out in front of her house, harass her children and attempt to incriminate herself."

Fedenisn's life changed dramatically last Monday after she handed over documents and statements to CBS News alleging that senior State Department officials "influenced, manipulated, or simply called off" several investigations into misconduct. The suppression of investigations was noted in an early draft of an Inspector General report, but softened in the final version.

Erich Hart, general counsel to the Inspector General, did not reply to a request for comment. State Department spokeswoman Jen Psaki said last week that "we hold all employees to the highest standards. We take allegations of misconduct seriously and we investigate thoroughly." She also announced that the department would request additional review by outside law enforcement officers on OIG inspection processes.

After the CBS News made inquiries to the State Department about the charges, Schulman says investigators from the State Department's Inspector General promptly arrived at Fedenisn's door. "They talked to both kids and never identified themselves," he said. "First the older brother and then younger daughter, a minor, asking for their mom's place of work and cell phone number ... They camped out for four to five hours."

Schulman says the purpose of the visit was to get Fedenisn to sign a document admitting that she stole State Department materials, such as the memos leaked to CBS. Schulman says it was crucial that she didn't sign the document because her separation agreement with the State Department includes a provision allowing disclosures of misconduct. Furthermore, none of the materials were classified.

Schulman charged that sending law enforcement officers to pressure her into signing an agreement was heavy handed. "Why not simply mail it, courier it, send it Federal Express or deliver it by any other normal means by which one delivers a demand letter? Why send two federal law enforcement agents?" he asked. He also said that officials from the Inpsector General's Office told him they'd be having a "no kidding get together with the DOJ," implying to him that they would push criminal charges if his client didn't cooperate.

In discussing the chain of events with Kel McClanahan, a D.C. attorney who has represented several agency whistleblowers, McClanahan said the case smacked of intimidation.

"This type of intimidation technique is all too common when an agency wants something from you that it is not entirely confident it can get without your cooperation, and more often than not people who don't know any better fall for it," he told The Cable. "Regardless of what you may think of Fedenisn's motives, she worked for these guys for years and she knows their playbook ... I would have been shocked if she did anything except promptly hire a lawyer and call their bluff."

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Jailed Qwest CEO claimed that NSA retaliated because he wouldn’t participate in spy program

While National Security Agency’s harvesting of telephone data is often defended as a necessary component of post-9/11 national security, old court documents claim the spy agency was putting such a program into place months before the Sept. 11, 2001 terrorist attacks.

In court papers filed during his 2007 insider trading trial, former Qwest CEO Joseph Nacchio claimed that Denver-based Qwest was denied lucrative NSA contracts he believed to be worth $50-$100 million, after Nacchio refused to involve Qwest in a secret NSA program that he thought would be illegal.

Subsequent reporting at the time revealed that it was a domestic wiretapping program in which the NSA wanted to snoop on Qwest’s vast telephone network without court orders.

President George W. Bush’s administration has said that warrantless wiretapping only began after 9/11, as part of the NSA’s Terrorist Surveillance Program.

Sources familiar with the request to Qwest, quoted anonymously in the New York Times in 2007, “say the arrangement could have permitted neighborhood-by-neighborhood surveillance of phone traffic without a court order, which alarmed them.”

Nacchio claimed that the NSA retaliated for his refusal by leaving Qwest out of a $2 billion NSA infrastructure program called Groundbreaker, which was split among numerous contractors, including Verizon.

Verizon, it was recently revealed, was required by court order to give the NSA telephone records from millions of its customer as part of a sweeping surveillance program.

Nacchio revealed these details in court papers in an attempt to show that he didn’t dump Qwest stock in 2001 because he knew the company was going to post poor performance results in the future. Rather, he suspected the company would benefit from participating in Groundbreaker, which he discussed with NSA personnel in Washington D.C. on Feb. 27, 2001.

But Nacchio’s court filing says NSA officials also sought his participation in the other program, the details of which were redacted in the document, a motion for the court to allow Nacchio to testify about the meeting as part of his defense.

“[O]ne purpose of bringing Messrs. Nacchio and [Qwest Senior Vice President James] Payne into the February 27, 2001 meeting was to [redacted] and stated that Qwest was subsequently denied any agency work as a direct result of Mr. Nacchio’s refusal,” the document reads.

In an interview with prosecutors, a portion of which was included in the court filing, Payne said NSA officials would bring up the secret program frequently and that they “expressed disappointment” that Qwest wouldn’t participate.

“Nacchio said it was a legal issue and that they could not do something their general counsel told them not to do,” Payne said. “Nacchio projected that he might do it if he could find a way to do it legally.”

“There was a feeling also,” he continued,” that the NSA acted as agents for other governmental agencies and if Qwest frustrated the NSA, they would also frustrate other agencies.

Ultimately, this argument wasn’t allowed in open court because the judge didn’t feel there was enough of a connection between the refusal to join the NSA program and Qwest not winning the Groundbreaker contract. Nacchio’s allegations didn’t come to light until the documents were unsealed six months after he was convicted in April 2007.

He was found guilty on 19 counts of insider trading and sentenced to six years. He was also fined $19 million and ordered to forfeit $52 million he made on his stock trade.

Nacchio’s lawyer, Herbert Stern, did not immediately return a phone call seeking comment.

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FBI hasn’t contacted a single tea party group in IRS probe, groups say

There is no evidence that the FBI has contacted a single tea party group in its criminal investigation of the Internal Revenue Service, according to the groups the IRS abused.

“We have not been contacted by any federal investigative agency and, to date, none of our clients have been contacted or interviewed by the FBI,” Jay Sekulow of the American Center for Law and Justice told The Daily Caller on Thursday. The ACLJ has filed suit against the IRS on behalf of 25 conservative groups, with additional groups being added in the next couple weeks, according to a spokesman.

“I have been very surprised that I have not heard from anybody and frankly, none of my clients have. I talk to other tea party leaders on a regular basis,” said Cleta Mitchell, the lawyer largely credited with pushing the IRS abuses to the forefront.

“It’s been a month and I can’t see any evidence of an investigation of the IRS,” Mitchell told TheDC Thursday. She represents nine tea party groups targeted by the IRS.

Tea Party Patriots — a group with thousands of local chapters — “has not been contacted by the FBI” either, according to Jameson Cunningham, the group’s spokesman.

The revelation suggests that the FBI is in no hurry to get to the bottom of the scandal, despite the Obama administration’s promise to investigate the IRS’s multi-year abuse of conservative groups.

“Americans are right to be angry about it, and I am angry about it,” Obama said in a White House statement on May 15. “I will not tolerate this kind of behavior in any agency but especially in the IRS, given the power that it has and the reach that it has into all of our lives.”

Attorney General Eric Holder promised in mid-May that the FBI would get to the bottom of the IRS’s behavior by opening a criminal investigation.

“I can assure you and the American people that we will take a dispassionate view of this,” Holder told congressional investigators on May 15. “This will not be about parties, this will not be about ideological persuasions. Anybody who has broken the law will be held accountable.”

But in separate testimony before congressional investigators Thursday, FBI Director Robert Mueller seemed completely unaware of the progress of any such investigation.


Republican Rep. Jim Jordan lit into Mueller for his lack of knowledge during a House judiciary committee hearing.

“This is the most important issue in front of the country in the last six weeks, and you don’t know who the lead investigator is?” Jordan asked, sounding shocked.

“At this juncture, no I do not,” Mueller responded.
“Do you know if you’ve talked to any of the victims?” Jordan went on. “Have you talked to any of the groups that were targeted by their government? Have you met with any of the tea party groups since May 14, 2013?”

“I don’t know what the status of the interviews are by the team that’s on it,” Mueller said.

Reached for comment Thursday afternoon, the FBI’s Washington, D.C. press office transferred TheDC to a long-ringing phone line and eventually hung up.

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Obama Threatens Veto of Religious Protection for Military

Breitbart News reported last week that Rep. John Fleming (R-LA) passed an amendment in the House Armed Services Committee protecting religious speech of service members in the military. President Barack Obama has now threatened to veto the bill if it passes the full House and Senate.

The White House released a Statement of Administration Policy (SAP) on H.R. 1960, the National Defense Authorization Act of 2014. Among other items, the SAP includes as an objection to the bill:

Expansion and Implementation of Protection of Rights of Conscience of Members of the Armed Forces and Chaplains of Such Members: The Administration strongly objects to section 530, which would require the Armed Forces to accommodate, except in cases of military necessity, “actions and speech” reflecting the “conscience, moral principles, or religious beliefs of the member.” By limiting the discretion of commanders to address potentially problematic speech and actions within their units, this provision would have a significant adverse effect on good order, discipline, morale, and mission accomplishment.

The SAP includes a veto threat: “…if the bill is presented to the President for approval in its current form, the President’s senior advisers would recommend that the President veto the bill.”

In other words, Obama says he will veto any bill that forbids his appointees or officers from telling a soldier that he cannot mention Jesus during prayer or have a Bible on his desk, or that keeps those appointees from telling a chaplain (who is an ordained clergyman) what religious teachings he is allowed to give in worship services, or what spiritual counseling he can give to another soldier. 

Ambassador Ken Blackwell, former U.S. ambassador to the United Nations Human Rights Commission, tells Breitbart News:

President Obama is waging a war on religion. He and Chuck Hagel are denying the most basic rights to those who put their lives on the line to protect all of our rights. It is shameful and appalling. I am confident that congressional leadership will show courage to stand up for our troops against this radical assault on religious liberty in the military.

This is the most compelling expression yet of the aggressive approach of the Obama-Hagel Defense Department to soldiers, sailors, airmen, and Marines who are observant Christians or devout members of other peaceful faiths, as seen in Breitbart News’ previous reports regarding the unconstitutional infringements of one of America’s most treasured, fundamental rights.

All eyes are on House and Senate leadership to see if they stand firm on the bill for those in the military who are facing this new form of pressure.

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Damage control: Hillary Clinton loyalists suspected of criminal cover-ups for diplomats

Both chambers of Congress and the State Department’s inspector general are examining allegations that senior officials working under Secretary of State Hillary Rodham Clinton may have suppressed investigations into suspected criminal activity among U.S. diplomats abroad — including the alleged solicitation of prostitutes by an ambassador in Europe.

After CBS News reported on the allegations this week, lawmakers from both parties said the charges are “very serious” — and point out the need for a permanent inspector general at the State Department. A deputy inspector general has been active in recent years, but the department’s top watchdog post, tasked with investigating practices at roughly 260 embassies worldwide, has been vacant for more than five years.

A spokesman for office of inspector general said Tuesday that the probe into “allegations of quashing” by State Department higher-ups was triggered by a 2012 office of inspector general review of the department’s Bureau of Diplomatic Security.

That review uncovered complaints by some officials that they were not allowed to thoroughly investigate the allegations of criminal activity. As a result, the office of inspector general has hired independent law enforcement specialists to examine the complaints and the extent to which investigators within the Bureau of Diplomatic Security are being allowed the level of independence required to do their jobs effectively.

In addition to reviewing “eight allegations of criminal misconduct” that arose during the 2012 review, Doug Welty, a spokesman for the office of inspector general, said the office is “also looking into the allegations of quashing.”

Mr. Welty made the remarks as Undersecretary of State Patrick F. Kennedy issued a statement to reporters Tuesday saying he has “never once interfered, nor would I condone interfering, in any investigation.”

Mr. Welty and others at the State Department have declined to comment on the specific allegations related to “quashing.”

But Mr. Kennedy apparently made the statement in response to the CBS News report this week that insinuated that he was involved in suppressing an investigation into the activities of a U.S. ambassador accused of patronizing prostitutes in a public park.

Citing “sources,” CBS News reported that after the accusation surfaced, the ambassador was called to Washington to meet with Mr. Kennedy, but then was permitted to return to his post.

CBS also reported that officials from the State Department's Bureau of Diplomatic Security told the office of inspector general that they were told to stop investigating the case.

The State Department has vigorously rejected ƒ CBS report. A senior spokeswoman called it “preposterous” to claim the department would not vigorously investigate allegations of criminal misconduct.

Department officials have remained vague, however, about the details of the allegations in question.
As spokeswoman Jennifer Psaki refused Tuesday to confirm or deny whether a U.S. ambassador had been accused of patronizing prostitutes, U.S. Ambassador to Belgium Howard Gutman emailed an abrupt statement to reporters, saying he was “angered and saddened” by “baseless allegations that have appeared in the press.”

“I live on a beautiful park in Brussels that you walk through to get to many locations, and at no point have I ever engaged in any improper activity,” Mr. Gutman said in the statement.

“To watch the four years I have proudly served in Belgium smeared is devastating,” he said.

The ambassador’s denial appeared to represent the first official acknowledgment of the various allegations of criminal activity cited in the CBS News report.

According to the Center For Responsive Politics, Mr. Gutman was a key Obama fundraiser in 2008, bundling at least $775,000 for the president’s campaign and the Inaugural Committee.

A separate allegation was reportedly made against a State Department security official in Beirut accused of sexually assaulting foreign nationals hired as embassy guards. In another, members of Mrs. Clinton’s security detail were accused of regularly pursuing prostitutes while on official trips in foreign countries. Another referenced a suspected illegal narcotics ring tied to State Department contractors at the U.S. Embassy in Baghdad.

When pressed for details Tuesday about the cases and an explanation as to whether Mr. Gutman has been cleared from the allegations made against him, Ms. Psaki responded that “there are some investigations that are still ongoing, some that have been concluded.”

“I’m not going to break down individual cases,” she said, adding that all of the allegations in question were “unsubstantiated.”

One State Department official say that the allegations of criminal activity as well as the allegations of quashing by department higher-ups may have been born out of an anonymous survey given to officials in the Bureau of Diplomatic Security as part of the office of inspector general’s 2012 review of the bureau’s activities. “One of the first things they do is a survey, sent out to employees, contractors, etc.,” the official said. “It’s all confidential and sometimes these issues come up. Then, these same people who filled out the survey have an opportunity to speak to inspectors confidentially and sometimes that’s when the allegations come up.

“Allegations are allegations,” the official added. “Not until they can be substantiated and verified do they become findings.”

The situation is drawing increasing attention, meanwhile, on Capitol Hill, where lawmakers from both sides of the isle have begun expressing concern.

“I am appalled not only at the reported misconduct itself, but at the reported interference in the investigations of the misconduct,” said Rep. Ed Royce, California Republican and chairman of the House Committee on Foreign Affairs.

If there was interference by State Department officials in investigations being conducted by the Bureau of Diplomatic Security, it “must be uncovered,” said Mr. Royce, who added that he has asked his staff “to begin an investigation into these allegations.”

In a letter to Secretary of State John F. Kerry, Mr. Royce wrote that “the notion that any or all of these cases would not be investigated thoroughly by the [State] Department is unacceptable.”

A spokesman for Sen. Robert Menendez, New Jersey Democrat and chairman of the Senate Foreign Relations Committee, said reports that the State Department dropped or influenced investigations into allegations of misconduct “are very serious and require a dispassionate investigation of the facts.”

“The committee is looking into the alleged actions, and this situation underscores the need for an appointment of a permanent inspector general for the Department of State to assure that allegations of this sort are quickly, fully, and appropriately addressed,” the Menendez spokesman said in an email to Politico on Tuesday.

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Glenn Greenwald calls out Mika Brzezinski for reading White House talking points

Glenn Greenwald, the journalist who recently broke the National Security Agency surveillance scandal, accused “Morning Joe” co-host Mika Brzezinski of reading White House talking points on the Monday broadcast of her program.

During the exchange that followed, Brzezinski denied she was using reading talking points.
Partial transcript of the exchange as follows:

BRZEZINSKI: This is an incredibly important question that affects all of us. We have to put it in perspective. I want to bring Richard Haass in but, quickly — I just want an answer, yes or no — isn’t it the case that reviewing of emails or any wiretapping cannot take place without an additional warrant from a judge and a review? I mean, it’s not like there’s haphazard probing into all our personal emails. Can we put this into context so we understand exactly what is going on? 

GREENWALD: Yeah, I’ll put it into context for you. The White House talking points you’re using are completely misleading and false. The whole point of what the Bush administration did when it disregarded and violated the FISA law and when the Congress on a bipartisan basis enacted a new surveillance law in 2008 was to enable the NSA to read emails between people in the United States and people outside of the United States without having first to go to a FISA court and get a warrant. The only time individual warrants are needed is when two people are both inside the United States and are both American citizens. But under that law, the U.S. government and the NSA have the power and exercise the power to listen in on telephone conversations and read emails involving all kinds of American citizens and the Senate has been repeatedly asking for the numbers of how many Americans they’re doing that to. And the NSA keeps saying –and it’s false — they can’t provide those numbers. So those talking points you’re reading from are completely false as anybody who has paid even remote attention – 

BRZEZINSKI: Glenn, I’m not reading talking points. Glenn, I’d like to ask a question, is this legal or illegal? Or Richard Haass, can you help me out, since Glenn doesn’t want to answer the question. Is the law being broken here? 

GREENWALD: I did answer your question — 

BRZEZINSKI: I questioned the law. I question all the issues that this raises. I’m personally concerned as well. I’d like to put this in perspective. Is the law being broken?

Brzezinski has also been accused of reading White House talking points on-air by her fellow MSNBC host Ed Schultz.

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Booz Allen employee admits leaking surveillance-program secrets

The source that publicly disclosed the Obama administration's domestic spying programs revealed himself on Sunday, just as federal authorities were preparing to hunt for him and lawmakers were debating the implications of such sweeping surveillance of Americans.

Edward Snowden, an employee of defense contractor Booz Allen Hamilton who worked with the National Security Agency, exposed the government's widespread monitoring of U.S. phone and Internet records last week, according to the Guardian newspaper, which first reported on the spying.

"I have no intention of hiding who I am because I know I have done nothing wrong," Snowden, 29, told the paper.

Hours before Snowden's identity was revealed, Director of National Intelligence James Clapper announced that authorities were about to launch the hunt for the source of last week's leaks to the Guardian and Washington Post of previously classified details about the government's covert search for terrorist cells in the U.S. Clapper said the NSA program monitoring major U.S. Internet providers was a harmless "internal government computer system" and not a threat to Americans' privacy.

But lawmakers are divided over the once-secret programs.

Liberals and conservative libertarians denounce the programs as a threat to privacy, but there is also bipartisan backing for President Obama's claim that the surveillance of phone and email records of millions of unaware Americans is necessary to detect potential terrorist threats.

Sens. John McCain, R-Ariz., and Dianne Feinstein, D-Calif., argued Sunday that the Prism program, under which the NSA monitors Internet servers inside the U.S., had thwarted potential attacks without violating citizens' privacy prior to Snowden's disclosure.

Feinstein, chairman of the Senate Intelligence Committee, credits the program with thwarting a 2009 plot to bomb the New York City subway and a 2008 plan to blow up a hotel in Mumbai, India.
But Sens. Rand Paul, R-Ky., and Mark Udall, D-Colo., said that domestic spying raises concerns of government overreach without proof that it protects the nation.

"It's unclear to me that we've developed any intelligence through the metadata program that's led to the disruption of plots that we couldn't obtain through other programs," Udall said on CNN. "I expect the government to protect my privacy, and it feels like that isn't what's been happening."

Paul called on all U.S. Internet and phone companies to join a class-action lawsuit against the government.

"If we get 10 million Americans saying we don't want our phone records looked at, then maybe someone will wake up and something will change in Washington," Paul said on "Fox News Sunday."
The Obama administration considers the leaks a threat to national security and, in the past, has secretly monitored journalists to uncover their sources.

"I think we all feel profoundly offended by [the leaks]," Clapper told NBC News prior to Snowden's acknowledgement. "This is someone who, for whatever reason, has chosen to violate a sacred trust for this country. And so I hope we're able to track down whoever's doing this, because it is extremely damaging to and it affects the safety and security of this country."

Clapper said Prism is "not an undisclosed collection or data-mining program," as critics charge, but an "internal government computer system" that "does not unilaterally obtain information from the servers of U.S. electronic communication service providers."

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GOP should lead fight against the Patriot Act

And to think they told us the War on Terror was over.

With news that the National Security Agency is currently collecting the telephone records of millions of us through one of America’s largest telecoms providers, Republicans have a chance to dramatically recast themselves in the debate over state surveillance and privacy.

An order requires Verizon on an “ongoing, daily basis” to hand over information on all telephone calls in its systems to the NSA — both domestically and between the United States and other nations.  A White House official has already defended the actions: “On its face, the order reprinted in the article does not allow the government to listen in on anyone’s telephone calls. The information acquired does not include the content of any communications or the name of any subscriber. It relates exclusively to metadata, such as a telephone number or the length of a call.”

Though Americans are usually evenly split over the Patriot Act, I suspect that the brazenness and widespread nature of this particular brand of snooping probably won’t go over well. It’s important to remember that during the Bush years the NSA had, as this USA Today story characterizes it, a “massive database of Americans’ phone calls,” so this isn’t exactly new territory. The GOP will undoubtedly be branded a bunch of hypocrites (and in some instances it will be well deserved). What is new in Washington, however, is a gaggle of libertarian-minded GOP politicians that weren’t part of the 99-1 affirmative vote on the Patriot Act and they weren’t here for a decade defending the expansion of FISA courts.

Imagine this scenario: Three Republicans senators – obviously, the mostly likely candidates being Ted Cruz, Mike Lee and Rand Paul – craft a bill that would repeal, or far more likely roll back certain provisions of the Patriot Act. A number of Democrats – Ron Wyden and Mark Udall, who have both warned that the administration was, with the blessing of a FISA court, engaged in these sorts of activities – would almost surely join in. Rand has already demonstrated the political potential of a passionate stand against abuse.

The administration, on the other hand, would likely have to oppose repeal or even rollbacks, turning the entire debate on its head – a pro-drone, pro-surveillance administration that also oversaw a similarly abusive IRS.

No doubt John McCain & Friends would also stridently oppose. Butt that fissure is already with the party. Though Democrats are in no position to lead a charge against their own leader, most would find themselves in a tough position, while at the same time Republicans could demonstrate a (sorely needed) consistent skepticism about government power.

And best case scenario, the Patriot Act reformers actually win.

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Internet Currency Exchange Charged With “Laundering” $6 Billion Under “Patriot Act”

The Liberty Reserve online currency exchange has been shut down and now the government is formally accusing them of “laundering money”.  Multiple people have been arrested and are facing serious jail time. What does this mean for bitcoin and other online currencies?

The human desire to be free will always push people to find ways around the oppressive roadblocks that are set up for them in life.  With things as naturally unjust as the income tax and other state and federal financial regulations it is inevitable for the people who suffer under these conditions to come together and figure out ways that they outsmart the system.  It goes without saying that the system will not respond well to this, and that has been proven with any sort of disruptive technology is vilified in the media.

Recently the cutting edge disruptive technologies that are getting attacked in the news are online currency exchanges and crypto-currencies that allow users to trade with anonymity.  The most recent exchange to come under government attack was a currency exchange called “Liberty Reserve”.
According to the New York Times:

The charges announced at a news conference by Preet Bharara, the United States attorney in Manhattan, and other law enforcement officials, mark what officials said was believed to be the largest online money-laundering case in history. Over seven years, Liberty Reserve was responsible for laundering billions of dollars, conducting 55 million transactions that involved millions of customers around the world, including about 200,000 in the United States, according to prosecutors.

Richard Weber, who heads the Internal Revenue Service’s criminal investigation division in Washington, said at the news conference that the case heralds the arrival of “the cyber age of money laundering,” in which criminals “are gravitating toward digital currency alternatives as a means to move, conceal and enjoy their ill-gotten gains.”

 

The charges detailed a complicated system designed to allow people to move sums large and small around the world with virtual anonymity, according to an indictment, which was unsealed in federal court in Manhattan.

 

“As alleged, the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes — the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers and traffickers,” Mr. Bharara said at the news conference, where officials from the Justice and Treasury Departments, as well as the Secret Service and Homeland Security Investigations, also spoke. “The global enforcement action we announce today is an important step toward reining in the ‘Wild West’ of illicit Internet banking. As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”

This same type of fear mongering was echoed by so called security experts interviewed in the mainstream media. “Organized crime and terrorist groups are now financing their operations through these anonymous payment systems,” said Tom Kellermann, a vice president at Trend Micro, a security firm. “The financial sector no longer has a monopoly on moving capital around the world.”

 

That last sentence was extremely telling and shows exactly why the government is taking this matter so seriously.  It has nothing to do with terrorism or criminality, and has everything to do with the government maintaining their monopoly on currency by any means necessary.

 

Arthur Budovsky, founder of Liberty Reserve, who renounced his United States citizenship in 2011, and was arrested in Spain on Friday under terms of the Patriot Act.

 

This arrest and shut down has huge implications for all other online exchanges and crypto-currencies, specifically bitcoin, but it is likely that the feds haven’t figured out exactly how to deal with bitcoin yet because there is no central server.

 

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Tea Party Patriots to Organize Mass 'Audit the IRS Rally' in D.C.

The Tea Party Patriots will organize a mass "Audit the IRS Rally" on June 19th in Washington, D.C. with local and national Tea Party groups to protest the IRS's targeting of conservative organizations. 

Jenny Beth Martin, the co-founder of Tea Party Patriots, told Breitbart News that the targeted witnesses that testified before the House Ways and Means Committee on Tuesday "showed the IRS discrimination and abuse had very real consequences on the local coordinators of the groups affected."

"These were not faceless, amorphous 'groups' but real Americans who wanted to peacefully assemble," Martin said. "Those in the hearings this week are a sample of the thousands of Americans who have been affected by the thuggish tactics of the IRS."

The Tea Party Patriots, a group that formed when the Tea Party movement officially launched in 2009, finally secured the permit to organize the event on Tuesday only after various delays. At one point in the permitting process, D.C. officials requested information from TPP in a serious of events the group's leaders said would make "your blood boil" if "you despise government bureaucracy and big government in general."

In an e-mail blast to local and national Tea Party groups on Tuesday, Tea Party Patriots noted that the rally, starting at noon on the 19th, was important because the IRS scandal is one that crosses party lines and impacts Republicans, independents, and Democrats. 

"With all of mess and scandals that are going on in DC, we need to have a big presence to tell them that we aren't going to take it," Martin wrote. "We are focusing on the IRS because it is the issue that can cross both lines. No one likes the government abusing its power, and that's the message we want to convey."

The group emphasized that the "focus of the rally will be the IRS to try to reach the broadest audience that we can and gain as much support as we can" and asked local Tea Party leaders to "start spreading the word to your groups." 

The IRS has come under fire for deliberately targeting groups applying for tax-exempt status that had "Tea Party" or "Patriots" in their names. The agency naturally scrutinized Tea Party Patriots, a group that had raised concerns about IRS harassment before revelations came to light.

J. Russell George, the Treasury Inspector General for Tax Administration, said the abuse of power that he discovered while auditing the IRS was "unprecedented."

"Together we stand with all of the groups and individuals who were affected and give our fellow Americans the opportunity to see more of the people who have been unfairly abused by the IRS," Martin told Breitbart News. "We have been fighting for constitutionally limited government for over 4 years. The discriminatory tactics from the IRS and an abusive government will not intimidate us or stop us from fighting for the country we love."

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Leftist Groups Enjoy IRS Tax-Exempt Status While Tea Party Suffers

Campaign finance zealots and free speech regulators have sought to stifle the freedom of conservative organizations, such as the Tea Party, by falsely claiming they are “political” while giving a pass to leftist groups that still enjoy unimpaired 501(c) IRS tax-exempt status. As the IRS attacked Tea Party groups, it left hundreds of leftist activist groups alone. A quick review of just eight of those leftist, tax-exempt activist groups demonstrates the IRS's hypocrisy.

Americans United for Change

Americans United for Change enjoys 501(c)4 tax-exempt status.  The organization exists, according to its own website, “to amplify the progressive message--to contribute to a grass roots groundswell for progressive policies. Progressives need to redefine ‘common sense’--by reasserting the primacy of the traditional progressive values that resonate with most Americans.”
The group spent $4.7 million in 2009 “redefining” common sense and, according to their IRS form 990, on “advocacy and education about public policy issues.” Americans United for Change directly engaged Republican senators facing reelection in 2008, running television advertisements against them. Naturally, no Democrat complained.  Nor did the IRS revoke its 501(c) status.

Ruckus Society

The Ruckus Society (photo above) is part of the Occupy Movement--and donations to this 501(c)3 organization are tax deductible. The George Soros-funded organization’s purpose reads like a parody of the modern Left.

The Ruckus Society provides environmental, human rights, and social justice organizers with the tools, training, and support needed to achieve their goals through the strategic use of creative, nonviolent direct action.

Ruckus also evidently organizes criminal trespass:

The Brass Liberation Orchestra accompanied a second round of the “I Will Survive…Capitalism” flashmob before leading the crowd of over 1,000 people onto the Bank of America, and deployed a giant balloon banner with our friends at [Rainforest Action Network] reading “Defend Human Dignity: Challenge Corporate Power”...The day of course culminated in the truly mass marches to the Port of Oakland to shut down all operations at the Ports for the night. Some reports say 50,000 people marched and danced the three miles to the ports from Camp, and it was truly an unforgettable experience, marching in a sea of thousands at sunset.

None of this seems to attract any IRS attention. Ruckus's 2011 IRS Form 990 indicates that it has maintained undisturbed 501(c)3 status. The form states Ruckus “provides environmental, human rights, and social justice organizers with the tools, training and support needed to achieve their goals.”

The Ruckus training offers the manual “Beautiful Trouble: A Toolbox for Revolution” and provides suggestions for direct action such as “take over intersections and use for community activities,” give “fake parking tickets on SUV’s,” “Occupy Bank Foreclosed Homes,” and “rip out rancher’s fences” to free livestock.

Planning illegal acts is incompatible with 501(c)3 status. Ruckus is run by Megan Swoboda. 

Women’s Action for New Directions

Women’s Action for New Directions (WAND) is another leftist organization funded by George Soros that engages in activity designed to transform politics and America. It dates back to the era when the KGB was funding anti-nuclear movements in the West, and was involved in the effort to block installation of Pershing II missiles in West Germany. After the Soviet Union collapsed, the organization continued to oppose America’s national defense.WAND enjoys 501(c)4 tax-exempt status. The organization also boasts a “Students Action Network for New Directions” that encourages leftist students “to become politically active, to vote, and to network with other WAND members.”
Despite the overt political mission and anti-defense militancy, the 990 Forms submitted by WAND to the IRS whitewash their mission in one short sentence: "Empowering women to stop violence through the legislature."

New World Foundation

The New World Foundation, like so many others, uses the money from industrialists who built America to help reduce America. Cyrus McCormick’s daughter formed the NWF to help transform the world, starting with America. The foundation enjoys 501(c)3 tax exempt status and exists, according to its IRS Form 990, to support “community activists across America and around the world.”

The IRS Form 990 also states that the NWF seek to “build stronger alliances for social justice, environmental justice...while encouraging democratic participation to achieve real and lasting [sic].”  The form details the mission of “mobilizing of the least enfranchised in working class and people of color communities.”

In 2010, NWF spent over $15 million.  It funnels money to a variety of activist leftist groups like the Coal River Mountain Watch, Colorado Progressive Action and National Peoples Action.

Fierce

Fierce is a New York-based organization that employs the Saul Alinsky organizing model toward activist gay issues. Its website unapologetically proclaims that it is “building the leadership and power of lesbian, gay, bisexual, transgender, and queer (LGBTQ) youth of color,” and “We develop politically conscious leaders.”

Looking toward the future, as always, “FIERCE is dedicated to cultivating the next generation of social justice movement leaders who are dedicated to ending all forms of oppression.”  This unapologetic political mission is also included in the IRS Form 990 submitted by Fierce, so it should not surprise the IRS.

Fierce also provides a chart showing its organizing model is dedicated first to “Build our Power,”  then “Exercise our Power,” and finally “Sustain our Power.”

Fierce! has 501(c)3 status, making contributions to the overtly political organization tax deductible.  Last tax year it spent $529,713 on stipends for activists, travel and other expenses.

Black Alliance for Just Immigration

The Black Alliance for Just Immigration enjoys 501(c)3 status.  The organization “advocates for administrative changes to visa, detention and deportation regulations” according to the IRS Form 990 it filed with the IRS.

For whom does it advocate these changes?  The Black Alliance webpage states:

Historically and currently, U.S. immigration policy has been infused with racism, enforcing unequal and punitive standards for immigrants of color. African Americans, with our history of being economically exploited, marginalized and discriminated against, have much in common with people of color who migrate to the United States, documented and undocumented.

Executive Director Gerald Lenoir told me by telephone that the IRS has never questioned the tax status of the organization. After providing this information, Mr. Lenoir also asked: “is Breitbart a progressive news publication?”

Brennan Center for Justice

Few organizations have worn nonpartisan sheep’s clothing while behaving like a partisan wolf better than the Brennan Center for Justice. Enjoying 501(c)3 status, the Brennan Center’s stated mission on its IRS Form 990 barely scratches the surface. They merely “focus on fundamental issues of democracy and justice,” they claim.  The Brennan Center also told the IRS that it is engaged in “the study and solving of intractable problems of social justice and implementing those solutions by coordinating strategies.”

What Brennan didn’t tell the IRS was that those “coordinating strategies” involved bare-knuckle attacks on election integrity laws around the country. The IRS probably doesn’t know that Brennan is hip deep in the effort to derail public policies such as photo voter identification laws. Both the effort and the results of the effort are bathed in politics.

Brennan’s executive director Michael Waldman isn’t above publishing outright falsehoods or phony social science data about election integrity measures in order to advance the group's agenda and enable voter fraud.

Voto Latino

Voto Latino is dedicated to mobilizing Hispanic voters into powerful political coalitions. It also enjoys 501(c)3tax exempt status.

The group holds an annual “Power Summit.” The April 2013 Power Summit included panels entitled “Activism Everyday--I’m Hustling,”  “We Voted, Now What?,” “How to Run for Office,” and “Field Operations for Beginners.”

Voto Latino also has a webpage dedicated to the 2012 Democratic National Convention (click while it still exists).

Some on the left are defending the IRS attacks on the Tea Party by falsely claiming the Tea Party is a political organization. These charges sound like projection when considering the descriptions of Voto Latino on itsown webpage:

“We firmly believe that the quality of our future depends on our ability to mobilize and vote....Texas and Florida, two states with the largest Latino populations, passed restrictive voting laws that intimidate people from going to the polls. There's never been a more pivotal time for us to flex our collective power and move our country forward. Despite our economic difficulties and educational needs, Latinos profoundly believe in America....The quality of our future depends on our ability to mobilize today.”

When contacted, a representative at Voto Latino told me its IRS 501(c)3 tax status had never been challenged. Voto Latino receives money from the Soros-affiliated Open Society Foundations.

These are a mere eight groups dedicated to activist political outcomes. Many, many more exist. Under the law, anyone can demand a copy of the IRS 990 form filed by a tax-exempt organization.  All you need to do is pick up the phone and call whatever leftist organization you wish and demand its “IRS 990 form.”  If they don’t send it, call the IRS.

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IRS agents tell House committee that the targeting started in D.C.

Since the IRS targeting scandal began, top IRS brass has maintained that this very politically convenient suppression of conservative non-profit groups’ applications was the work of a few low-level employees in the Cincinnati IRS office. But those provincial IRS employees have offered a very different story under questioning from the House Oversight committee staff.
Related: IRS spent $50M on conferences in 2010-2012

House Oversight chairman Darrell Issa, R-Calif., posted partial transcripts today from two of the interviews, in which all names are redacted. Although the Cincinnati employees’ denials should be taken with a grain of salt (like all the other IRS officials’ denials), these two interviews both point the finger back at the IRS in Washington — which is consistent with other accounts that both the conservative and mainstream press has unearthed.

One of the low-level employees said that the Washington office was “basically throwing us underneath the bus” for an operation they had ordered and directed. And an employee described as being more senior said that he viewed the entire project as unfair and was so worried about being blamed for it later that he actually applied for another job in the summer of 2010. “I didn’t want my name in the paper for being this rogue agent for a project I had no control over,” the more senior employee said.

This should make for some good hearings in the near future. 

Below is the partial transcript released by the committee: 

Q: In early 2010, was there a time when you became aware of applications that referenced Tea Party or other conservative groups?
A: In March of 2010, I was made aware. 

******
Q: Okay.  Now, was there a point around this time period when [your supervisor] asked you to do a search for similar applications?
A: Yes.
Q: To the best of your recollection, when was this request made?
A: Sometime in early March of 2010. 

******
Q: Did [your supervisor] give you any indication of the need for the search, any more context?
A: He told me that Washington, D.C., wanted some cases. 

******
Q: So as of April 2010, these 40 cases were held at that moment in your group; is that right?
A: Some were.
Q:  How many were held there?
A: Less than 40.  Some went to Washington, D.C.
Q: Okay.  How many went to Washington, D.C.?
A: I sent seven.
******
Q: So you prepared seven hard copy versions of the applications to go to Washington, D.C.?
A:  Correct. 

******
 Q: Did he give you any sort of indication as to why he requested you to do that? […]
A: He said Washington, D.C. wanted seven.  Because at one point I believe I heard they were thinking 10, but it came down to seven.  I said okay, seven.
 Q: How did you decide which seven were sent?
 A: Just the first seven.
 Q: The first seven to come into the system?
A: Yes.

*****
Q: Did anyone else ever make a request that you send any cases to Washington?
A:  [Different IRS employee] wanted to have two cases that she couldn’t ‑‑ Washington, D.C. wanted them, but she couldn’t find the paper.  So she requested me, through an email, to find these cases for her and to send them to Washington, D.C.
Q: When was this, what time frame?
A: I don’t recall the time frame, maybe May of 2010. 

******
Q: But just to be clear, she told you the specific names of these applicants.
A: Yes.
Q: And she told you that Washington, D.C. had requested these two specific applications be sent to D.C.
A: Yes, or parts of them. 

******
Q: Okay.  So she asked you to send particular parts of these applications.
A: Mm‑hmm.
Q: And that was unusual.  Did you say that?
A: Yes.
Q: And she indicated that Washington had requested these specific parts of these specific applications; is that right?
A: Correct. 

******
Q: So what do you think about this, that allegation has been made, I think as you have seen in lots of press reports, that there were two rogue agents in Cincinnati that are sort of responsible for all of the issues that we have been talking about today.  What do you think about those allegations?
[…]
A:  It’s impossible.  As an agent we are controlled by many, many people.  We have to submit many, many reports.  So the chance of two agents being rogue and doing things like that could never happen.
******
Q: And you’ve heard, I’m sure, news reports about individuals here in Washington saying this is a problem that was originated in and contained in the Cincinnati office, and that it was the Cincinnati office that was at fault.  What is your reaction to those types of stories?
[…]
A: Well, it’s hard to answer the question because in my mind I still hear people saying we were low‑level employees, so we were lower than dirt, according to people in D.C.  So, take it for what it is.  They were basically throwing us underneath the bus. 

******
Q: So is it your perspective that ultimately the responsible parties for the decisions that were reported by the IG are not in the Cincinnati office?
A: I don’t know how to answer that question.  I mean, from an agent standpoint, we didn’t do anything wrong. We followed directions based on other people telling us what to do.
Q: And you ultimately followed directions from Washington; is that correct?
A: If direction had come down from Washington, yes.
Q: But with respect to the particular scrutiny that was given to Tea Party applications, those directions emanated from Washington; is that right?
A: I believe so.

The more senior employee told committee staff he was scared at the idea of being blamed for this operation, which he said was being directed from Washington D.C.

Q: But you specifically recall that the BOLO terms included “Tea Party?”
A: Yes, I do.
Q: And it was your understanding ‑‑ was it your understanding that the purpose of the BOLO was to identify Tea Party groups?
A: That is correct.
Q: Was it your understanding that the purpose of the BOLO was to identify conservative groups?
A: Yes, it was.
Q: Was it your understanding that the purpose of the BOLO was to identify Republican groups?
A: Yes, it was. 

******
Q: Earlier I believe you informed us that the primary reason for applying for another job in July [2010] was because of the micromanagement from [Washington, DC, IRS Attorney], is that correct?
A: Right.  It was the whole Tea Party. It was the whole picture. I mean, it was the micromanagement. The fact that the subject area was extremely sensitive and it was something that I didn’t want to be associated with.
Q: Why didn’t you want to be associated with it?
A: For what happened now. I mean, rogue agent? Even though I was taking all my direction from EO Technical [Washington, D.C], I didn’t want my name in the paper for being this rogue agent for a project I had no control over.
Q: Did you think there was something inappropriate about what was happening in 2010?
A: Yes. The inappropriateness was not processing these applications fairly and timely. 

******
Q: You have stated you had concerns with the fairness and the timeliness of the application process. Did you have concerns with just the fact that these cases were grouped together and you were the only one handling them?
A: I was the only one handling the Tea Party’s, that is correct.
Q: Did that specifically cause you concern?
A: Yes, it did. And I was the only person handling them.
Q:  Were you concerned that you didn’t have the capacity to process all of the applications in a timely manner?
A: That is correct. And it is just ‑‑ I mean, like you brought up, the micromanagement, the fact that the topic was just weirdly handled was a huge concern to me.

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