Financial Fraud

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The Intelligence Propaganda Complex

Matt Apuzzo has a remarkable story about the efforts DOJ is making to protect the records of United Against Nuclear Iran, a purported NGO that shames entities potentially doing business with Iran.

Greek shipping magnate Victor Restis is suing the group for defamation, claiming they falsely accused him of being an Iranian front.

The group said it had uncovered a letter proving there was a plan to do business in Iran. It also accused Mr. Restis of using his ships in support of Iran’s oil industry.

Mr. Restis said the letter was fraudulent, the illicit Iranian deal never existed, and his ships made only authorized humanitarian shipments. He accused the group of shaking down companies for donations; the group in turn accused him of being a “master criminal.”

The group said it based its accusations on “valid research, credible documents, distinguished relationships, and pre-eminent sourcing.” In court, Mr. Restis demanded that the group disclose those documents and its relationships.

Soon after that demand, Mr. Restis said he was approached by an Israeli businessman, Rami Ungar, with no direct connection to United Against Nuclear Iran.

According to court documents filed by Mr. Restis’s lawyers, Mr. Ungar knew details about the case and said he was “authorized to try to resolve the issues” on behalf of the group’s supporters.

It was not clear who those supporters were. Like many nonprofit groups, its donor list is secret. Mr. Restis’s lawyers said in a letter to the judge in April that they had uncovered information that United Against Nuclear Iran “is being funded by foreign interests.”

DOJ suggested they might claim a law enforcement exception to protect the files, though it has not yet formally claimed such a privilege. That might suggest the files are Treasury files that may soon be used to impose sanctions on Restis. Or perhaps it means they have files that don’t meet Treasury’s standards for imposing sanctions, and UANI exists to shame people where sanctions are unavailable. In any case, Restis wants to know how Ungar got them; I’d like to know precisely what UANI is getting from whom.

Apuzzo lists some of the characters who are behind the group: former Mideast Peace Envoy Dennis Ross, Fran Townsend, and Joe Lieberman. Otto Reich, whose role in Iran-Contra (as opposed to his role in trying to overthrow Hugo Chavez in the 2002 coup) involved illegally funneling taxpayer dollars for the purposes of lobbying, is of particular note. Restis is particularly interested in interviewing UANI advisor Meir Dagan, the long-time head of Mossad; Restis believes Dagan provided the documents to Ungar. In addition, Richard Dearlove, who was in charge of sexing up the British case for war in 2003 when he was MI6, also advises the group.

in other words, it’s a classic case of a quasi-governmental group, one that apparently plays an extra-legal purpose in the campaign to isolate Iran (to be fair, most, though not all, of its advisors have worked hard to stave off war). And Restis’ efforts to get some kind of justice against it may be stymied by US claims they’ve got privileged interests in the case.

The entire episode raises some very good questions about what goes into isolating our adversaries.

In a Nation Ravaged by Banksters, FBI Can’t Afford the “Luxury” of Frivolous Counterterrorism Stings

In a JustSecurity post reviewing the same speech that I observed ignored US failures to prevent violent extremism, NYU Professor Samuel Rascoff defends the US use of counterterrorism stings, even in spite of the details revealed by HRW’s report on all the problems related to them. David Cole has an excellent response, which deals with many of the problems with Rascoff’s argument.

I’d like to dispute a more narrow point Rascoff made when he suggested that, because we have so many fewer trained militants than the Europeans, we “can[] afford” the “luxury” of stings.

There are now approximately 3,000 European passport holders fighting in Syria and Iraq. In the time that it took Najibullah Zazi to drive from Denver to New York, a fighter could drive from Aleppo to Budapest. What that means is that European officials are relatively more consumed than American counterparts in keeping up with, and tabs on, trained militants.   Orchestrating American-style sting operations is, in a sense, a luxury they cannot afford.

The claim is astonishing on its face, in that it suggests that, because we don’t have real militants like Europe does, we should engage in the “luxury” of entrapping confused young Muslim men and sending them to expensive decades-long prison terms.

Think a bit more about that notion of “luxury” and the financial choices we make on law enforcement. Here are some numbers taken from two sources: the HRW report (I basically searched on the dollar sign, though this doesn’t include every mention of dollars) and today’s Treasury settlement with Bank of America for helping 10 drug kingpins launder their money over a four year period, three years of which constituted “egregious” behavior.

First, HRW reports that FBI spends over $1.3 billion a year on counterterrorism, much of it stings, leaving less than $2 billion for all other investigations.

More than 40 percent of the FBI’s operating budget of $3.3 billion is now devoted to counterterrorism.

That allows the FBI to pay some of its informants and experts hefty sums.

Beginning in August 2006, the FBI paid Omar $1,500 per week during the investigation. Omar received a total of $240,000 from the FBI. This included: $183,500 in payment unrelated to expenses, and $54,000 for expenses incurred during the investigation including car repair and rent.

[snip]

“Kohlmann is an expert in how to use the Internet, like my 12-year-old. He has found all the bad [stuff] about Islam, and testifies as if what he is reading on the Internet is fact. He was paid around $30,000 to look at websites, documents, and testify.”

These informants sometimes promise — but don’t deliver — similar hefty sums to the guys they’re trying to entrap.

Forty-five-year-old James Cromitie was struggling to make ends meet when, in 2009, FBI informant Hussain offered him as much as $250,000 to carry out a plot which Hussain—who also went by “Maqsood”—had constructed on his own.

[snip]

The informant proposed to lend Hossain $50,000 in cash so long as he paid  him back $2,000 monthly until he had paid back $45,000.

Which is particularly important because many of these guys are quite poor (and couldn’t even afford to commit the crimes they’re accused of).

At the time he was in contact with the informant and the undercover [agent] he was living at home with his parents in Ashland and he didn’t have a car, he didn’t have any money and he didn’t have a driver’s license because he owed $100 and he didn’t have $100 to pay off the fine. In various parts of the investigation he didn’t have a laptop and he didn’t have a cellphone. At one point the informant gave him a cell phone.

And some of these crimes (the very notable exceptions in the HRW report include two material support cases, both of which are close calls on charity designations, but which involved very large sums, $13 million a year in the case of Holy Land Foundation) involve relatively minscule sums.

According to the prosecution, Mirza was the ringleader in collecting around $1,000—provided by the FBI agents and co-defendant Williams—that he handed to a middleman with the intent that it go to families of Taliban fighters.

So one theme of the HRW report is we’re spending huge amounts entrapping what are often poor young men in miniscule crimes so taxpayers can pay $29,000 a year to keep them incarcerated for decades.

These are the stakes for what Rascoff calls a “luxury.” At a time of self-imposed austerity, these stings are, indeed, a luxury.

Compare that to what happens to Bank of America, which engaged in “egregious” violations of bank reporting requirements for three years (and non-egregious ones for a fourth), thereby helping 10 drug kingpins launder their money. No one will go to jail. Bank of America doesn’t even have to admit wrong-doing. Instead, it will have to pay a $16.5 million fine, or just 0.14% of its net income last year.

This settlement came out of a Treasury investigation, not an FBI one.

But when DOJ’s Inspector General investigated what FBI did when it was given $196 million between 2009 and 2011 to investigate (penny ante) mortgage fraud, FBI’s focus on the issue actually decreased (and DOJ lied about its results). When FBI decided to try to investigate mortgage fraud proactively by using undercover operations, like it does terrorism and drugs, its agents just couldn’t figure out how to do so (in many cases Agents were never told of the effort), so the effort was dropped.

Banks commits crimes on a far grander scale than most of these sting targets. But FBI throws the big money at its counterterrorism stings, and not the banks leaching our economy of its vitality.

Rascoff accuses HRW’s and similar interventions of being one-dimensional.

[F]or all the important questions about official practices that critics raise, they have tended to ignore some hard questions about the use of stings and the tradeoffs they entail.Instead, their interventions have an exaggerated, one-dimensional quality to them.

But he himself is guilty of his own crime. Because every kid the FBI entraps in a $240,000 sting may represent an actual completed bank crime that will never be investigated. It represents an opportunity cost. The choice is not just sting or no sting or (more accurately, as David Cole points out) sting or community outreach and cooperation.

Rather, the choice is also between manufacturing crimes to achieve counterterrorism numbers or investigating real financial crimes that are devastating communities.

So long as we fail to see that tradeoff, we fail to address one major source of the economic malaise that fuels other crimes.

Ignoring bank crimes is, truly, something we don’t have the luxury of doing. Nevertheless, we continue to choose to go on doing so, even while engaging in these “luxurious” counterterrorism stings that accomplish so little.

CISA: The Banks Want Immunity and a Public-Private War Council

A group of privacy and security organizations have just sent President Obama a letter asking him to issue a veto threat over the Cybersecurity Information Sharing Act passed out of the Senate Intelligence Committee last week. It’s a great explanation of why this bill sucks and doesn’t do what it needs to to make us safer from cyberattacks. It argues that CISA’s exclusive focus on information sharing — and not on communications security more generally — isn’t going to keep us safe.

Which is why it really pays to look at the role of SIFMA — the Securities Industry and Financial Markets Association – in all this.

As I’ve noted, they’re the banksters whom Keith Alexander is charging big bucks to keep safe. As Bloomberg recently reported, Alexander has convinced SIFMA to demand a public-private cyber war council, involving all the stars of revolving door fearmongering for profit.

Wall Street’s biggest trade group has proposed a government-industry cyber war council to stave off terrorist attacks that could trigger financial panic by temporarily wiping out account balances, according to an internal document.

The proposal by the Securities Industry and Financial Markets Association, known as Sifma, calls for a committee of executives and deputy-level representatives from at least eight U.S. agencies including the Treasury Department, the National Security Agency and the Department of Homeland Security, all led by a senior White House official.

The trade association also reveals in the document that Sifma has retained former NSA director Keith Alexander to “facilitate” the joint effort with the government. Alexander, in turn, has brought in Michael Chertoff, the former U.S. Secretary of Homeland Security, and his firm, Chertoff Group.

Public reporting positions SIFMA as the opposition to the larger community of people who know better, embracing this public-private war council approach.

Kenneth Bentsen, chief executive at the Securities Industry and Financial Markets Association, said in a statement that leaders of the Senate Intelligence panel who wrote the bill have “taken a balanced and considered approach which will help the financial services industry to better protect our customers from cyber terrorists and criminals, as well as their privacy.”

According to the same banksters who crashed our economy 6 years ago, this bill is about protecting them at the expense of our privacy and rule of law.

And in their reply to Alan Grayson’s questions about WTF they’re paying Keith Alexander so handsomely for, SIFMA repeats this line (definitely click through to read about Quantum Dawn 2).

Cyber attacks are increasingly a major threat to our financial system. As such, enhancing cyber security is a top priority for the financial services industry. SIFMA believes we have an obligation to do everything possible to protect the integrity of our markets and the millions of Americans who use financial services every day.

[snip]

However, the threat increases every day. SIFMA and its members have undertaken additional efforts to develop cyber defense standards for the securities industry sector as a follow on to the recently published NIST standards. And we are developing enhanced recovery protocols for market participants and regulators in the event of an attack that results in closure of the equity and fixed income markets. We are undertaking this work in close collaboration with our regulators and recently held a meeting to brief them on our progress. And, we plan to increase our efforts even further as the risks are too great for current efforts alone.

We know that a strong partnership between the private sector and the government is the most efficient way to address this growing threat. Industry and investors benefit when the private sector and government agencies can work together to share relevant threat information. We would like to see more done in Congress to eliminate the barriers to legitimate information sharing, which will enable this partnership to grow stronger, while protecting the privacy of our customers.

This is not — contrary to what people like Dianne Feinstein are pretending — protecting the millions who had their credit card data stolen because Target was not using the cyberdefenses it put into place.

Rather, this is about doing the banksters’ bidding, setting up a public-private war council, without first requiring them to do basic things — like limiting High Frequency Trading — to make their industry more resilient to all kinds of attacks, from even themselves.

Meanwhile, if that’s not enough indication this is about the bankstsers, check out what Treasury Secretary Jack Lew is doing this afternoon.

In the afternoon, the Secretary will visit Verizon’s facilities in Ashburn, Virginia to discuss cybersecurity and highlight the important role of telecommunications companies in supporting the financial system. 

Just what we need: our phone provider serving the interests of the financial system first.

DiFi wants to make it easier to spy on Americans domestically to help private companies that have already done untold damage to Main Street America. We ought to be protecting ourselves from them, not degrading privacy to subsidize their insecure practices.

Alan Grayson: Is Keith Alexander Selling Classified Information to the Banks?

I’ve been tracking Keith Alexander’s utterly predictable new gig, getting rich off of having drummed up cybersecurity concerns for the last several years, while at the same time shacking up with the most dubious of shadow bank regulators, Promontory Financial Group.

Apparently, I’m not the only one. Alan Grayson just sent some of the entities that Alexander has been drumming up business with — the Security Industries and Financial Markets Association, Consumer Bankers Association, and Financial Services Roundtable — a letter asking how the former NSA Director can be making a reported $600,000 a month. He cites Bruce Schneier wondering whether part of the deal is that Alexander will share classified information he learned while at NSA.

Security expert Bruce Schneier noted that this fee for Alexander’s services is on its face unreasonable. “Think of how much actual security they could buy with that $600K a month.Unless he’s giving them classified information.” Schneier also quoted Recode.net, which headlined this news as: “For another million, I’ll show you the back door we put in your router.”

[snip]

Disclosing or misusing classified information for profit is, as Mr. Alexander well knows, a felony. I question how Mr. Alexander can provide any of the services he is offering unless he discloses or misuses classified information, including extremely sensitive sources and methods. Without the classified information that he acquired in his former position, he literally would have nothing to offer to you.

Please send me all information related to your negotiations with Mr. Alexander, so that Congress can verify whether or not he is selling military and cybersecurity secrets to the financial services industry for personal gain.

Alexander is just the latest of a long line of people who profit directly off driving up the cybersecurity threat. But — as Recode.net notes — he’s also got the kind of inside information that could be particularly valuable.

As the Intelligence Industrial Complex and the Banking industry hop into bed together, there ought to be some transparency about just what kind of deals are being made. There’s simply too much immunity handed out to this community to let boondoggles like Alexander’s slide.

The intelligence community is subjecting every low level clearance holder to intense scrutiny right now. But thus far, there has not been a peep from those quarters that the former DIRNSA could command these fees for the expertise gained while overseeing the nation’s secrets.

Keith Alexander to Earn $600,000 a Month for Preventing DDos Attacks

When Politico reported that Keith Alexander was shacking up with shadow regulator Promontory Financial Group to profit off his cyber fear-mongering, I knew he’d be raking in the bucks.

Bloomberg provides more details on how much: his asking price starts at $1M a month, from which he negotiates down to a mere $600,000.

Alexander, 62, said in the interview he was invited to give a talk to the Securities Industry and Financial Markets Association, known as Sifma, shortly after leaving the NSA and starting his firm, IronNet Cybersecurity Inc. He has met with other finance groups including the Consumer Bankers Association, the Financial Services Roundtable and The Clearing House.

At the sessions, Alexander discussed destructive computer programs such as Wiper, which the U.S. government said was notable because attacks using it appeared to originate from North Korea and Iran. “I told them I did think they could defend against that,” Alexander said.

Still, despite the banks’ growing investments in computer security, Alexander said, “many of them aren’t really confident they’re getting their money’s worth.”

[snip]

Sifma Meeting

Alexander offered to provide advice to Sifma for $1 million a month, according to two people briefed on the talks. The asking price later dropped to $600,000, the people said, speaking on condition of anonymity because the negotiation was private.

Alexander declined to comment on the details, except to say that his firm will have contracts “in the near future.”

The article talks in terms of the DDoS attacks launched against US bank websites last year, as well as Wiper, which is allegedly tied to the StuxNet family (and therefore is something with which ALexander ought to be intimately familiar).

What he doesn’t seem to be promising he can fix are things like the recent hack of a hedge fund’s High Frequency Trading algorithms (about which I am simply failing not to laugh hysterically at … sorry, hedgies).

No wonder the banks doubt they’re getting their money’s worth.

It’s hard to read this as anything but a scam. Not only has Alexander spent the last year talking up the risk of cyberattacks, not only has he had access to whatever bank secrets haven’t been encrypted for the last 8 years, plus the double dipping in SWIFT databases. But he also knows what holes NSA hasn’t fixed.

Ultimately, though, this all serves to obscure the fact that these banks are rickety all by themselves, with or without a hacker’s help (which is one reason I’m laughing at that HFT hack). There’s only so much you can do to harden that target, and the banks won’t do it.

NSA Collects All Phone Calls from One of World’s Most Secretive Tax Havens, But Doesn’t Track That

In its report on how the NSA collects every cell phone conversation that takes place in the Bahamas, The Intercept focuses on the use of such intercepts for drug investigations (indeed, one of the other countries targeted in the MYSTIC program is Mexico, which clearly has a DEA angle).

But one memo indicates that SOMALGET data is covertly acquired under the auspices of “lawful intercepts” made through Drug Enforcement Administration “accesses”– legal wiretaps of foreign phone networks that the DEA requests as part of international law enforcement cooperation.

When U.S. drug agents need to tap a phone of a suspected drug kingpin in another country, they call up their counterparts and ask them set up an intercept. To facilitate those taps, many nations – including the Bahamas – have hired contractors who install and maintain so-called lawful intercept equipment on their telecommunications.

Perhaps the most telling part of the article, however, is that NSA/DEA don’t appear to be using this facility to track money launderers.

If the U.S. government wanted to make a case for surveillance in the Bahamas, it could point to the country’s status as a leading haven for tax cheats, corporate shell games, and a wide array of black-market traffickers. The State Department considers the Bahamas both a “major drug-transit country” and a “major money laundering country” (a designation it shares with more than 60 other nations, including the U.S.). According to the International Monetary Fund, as of 2011 the Bahamas was home to 271 banks and trust companies with active licenses. At the time, the Bahamian banks held $595 billion in U.S. assets.

They’re tracking pot, but not bothering to track the dollars that drive the pot.

So aside from the hubris of stealing off of the cell phone calls from Bahama, this is also a testament to the US’ misplaced priorities, its inability to understand how its coddling of tax havens serve to drive the drug trade.

Jim Comey Wants to Generalize FBI’s Intelligence Collection

In the 26th paragraph of a 32-paragraph article reporting on how FBI will remain terror terror terror under Jim Comey’s watch (albeit, potentially, with a more particularized focus, which would be welcome), this detail appears:

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

I look forward to learning more about this proposal (and we shall see whether Congress permits Comey to make this move, though he is still Congress’ darling). Plus, it’s unclear whether “fraud” means the small-time fraud propagated by local businessmen or whether it’s the kind Jamie Dimon has gotten rich off of.

Still, it’s a much needed idea. While it poses the risk of expanding the use of intrusive intelligence tools, it also might lead us to establishing a better standard for the use of such intelligence.

TurboTax Timmeh Teaches DC about Autobiographical Fiction

TurboTax Timmeh Geithner’s book has been out about a week or ten days. And it seems to have had a remarkable effect: teaching DC that the memoirs from figures of power are often as not autobiographical fiction as real historical fact.

Sure, I expected debunkings by David Dayen and William Black and Josh Rosner and Yves Smith. They didn’t disappoint.

But I’m particularly happy to see this plaintive discovery from Felix Salmon, after comparing TurboTax Timmeh’s account of a speech with the actual transcript.

As I read the rest of Geithner’s book, then, I’m basically forced to treat the author as an unreliable narrator. Geithner might seem to be straight-up and guileless, but his report of this speech shows that he can remember things — even things which are easily found on the internet — in an extremely self-serving manner. Maybe that’s only to be expected, from a political memoir. But it’s disappointing, all the same.

And I’m grateful that Marketwatch has deployed the slide show click bait genre into a list of all the things TurboTax Timmeh chooses to remain silent about.

I guess I just find the acceleration of attention on TurboTax Timmeh’s self-serving fictions welcome given that I’ve never seen similar focus on the lies that get spun for National Security figures: not for John Rizzo, not for Jose Rodriguez, not for Dick Cheney, in spite of abundant public documentation that those were fictional narratives.

Perhaps TurboTax Timmeh is just a more egregious example than these others, though I doubt it. They all did great damage, and boasted while they did so.

I hope, then, that the clear debunking of TTT’s autobiographical fiction will serve as a model response the next time someone in power attempts to get rich by telling lies.

Keith Alexander Declares Failure in War on Terror, as He Earlier Declared Failure in Cyberdefense

The New Yorker has a weird interview with Keith Alexander. The weirdness stems from Alexander’s wandering answers, which may, in turn, stem from the fact that the interview was not done by an NSA beat reporter. Such interviews seem to flummox NSA insiders.

But beyond all the rambling about Jeopardy and “free vowels” and disingenuous claims (and silences) about past terrorist events, ultimately Keith Alexander wants us to know that we are at greater risk as he steps down after more than 8 years of protecting us.

His logic for that is not that terrorists struck the Boston Marathon last year, in spite of NSA apparently collecting on them but not reviewing the collection — he doesn’t even mention that.

Rather, it’s that the number of terrorist attacks are going up globally. The US has thus far avoided such attacks (ignoring hate crimes and the Marathon attack), which he points to as proof our spying is working. But he also points to it as proof that we’re due.

There are people on one side saying that these N.S.A. programs could have stopped these plots. And then there are people who dispute that.

We know we didn’t stop 9/11. People were trying, but they didn’t have the tools. This tool, we believed, would help them. Let’s look at what’s happening right now. You ought to get this from the START Program at the University of Maryland. They have the statistics on terrorist attacks. 2012 and 2013. The number of terrorist attacks in 2012—do you know how many there were globally?

How many?

Six thousand seven hundred and seventy-one. Over ten thousand people killed. In 2013, it would grow to over ten thousand terrorist attacks and over twenty thousand people killed. Now, how did we do in the United States and Europe? How do you feel here? Safe, right? I feel pretty safe.

[snip]

So think about how secure our nation has been since 9/11. We take great pride in it. It’s not because of me. It’s because of those people who are working, not just at N.S.A. but in the rest of the intelligence community, the military, and law enforcement, all to keep this country safe. But they have to have tools. With the number of attacks that are coming, the probability, it’s growing—

I’m sorry, could you say that once more?

The probability of an attack getting through to the United States, just based on the sheer numbers, from 2012 to 2013, that I gave you—look at the statistics. If you go from just eleven thousand to twenty thousand, what does that tell you? That’s more. That’s fair, right?

I don’t know. I think it depends what the twenty thousand—

—deaths. People killed. From terrorist attacks. These aren’t my stats. The University of Maryland does it for the State Department.

I’ll look at them. I will. So you’re saying that the probability of an attack is growing.

The probability is growing. What I saw at N.S.A. is that there is a lot more coming our way. Just as someone is revealing all the tools and the capabilities we have. What that tells me is we’re at greater risk. I can’t measure it. You can’t say, Well, is that enough to get through? I don’t know. It means that the intel community, the military community, and law enforcement are going to work harder.

Since Alexander invited us, let’s see what the START data say, shall we? Here’s what they tell us:

According to the annex, the 10 countries that experienced the most terrorist attacks in 2013 are the same as those that experience the most terrorist attacks in 2012.

Although terrorist attacks occurred in 93 different countries, they were heavily concentrated geographically. More than half of all attacks (57%), fatalities (66%), and injuries (73%) occurred in Iraq, Pakistan and Afghanistan. By wide margin, the highest number of fatalities (6,378), attacks (2,495) and injuries (14,956) took place in Iraq. The average lethality of attacks in Iraq was 40 percent higher than the global average and 33 percent higher than the 2012 average in Iraq.

The US hasn’t been attacked. But attacks are mushrooming in Iraq, Pakistan, and Afghanistan. These not only happen to be places where we’ve been fighting the war on terror the longest and most directly, places where Alexander has been at the forefront of the fight, even before he took over at NSA. But they also happen to be those places overseas that the NSA uses to legitimize their global reach.

Yet 13 or 11 years of concentrated spying — of collect it all — in those places has not eliminated terrorism. On the contrary, terrorism is now getting worse.

And now they serve as both the proof that spying is working and that spying is more necessary than ever.

Rather than evidence that the War on Terror is failing.

We shouldn’t be surprised that we’re losing a war fighting which Alexander was one of the longest tenured generals (though I don’t think he bears primary responsibility for the policy decisions that have led to this state). After all, last year, Alexander said that also under his watch, we had been plundered like a colony via cyberattacks. He seems to think he lost both the war on terror and on cyberattacks.

Which, if you’re invested in Wall Street, ought to alarm you. Because that’s where Keith Alexander is headed to wage war next.

Unread Reports as the Big Data Dump? Not Really.

The very same week the President released his breathless report on Big! Data!, the Washington Post has a story criticizing the sheer number and types of reports Congress requires from the Federal bureaucracy.

It started out with a good idea. Legislators wanted to know more about the bureaucracy working beneath them. So they turned to a tool as old as bureaucracy itself — the interoffice memo. They asked agencies to send in written reports about specific things they were doing.

Then, as happens in government, that good idea was overused until it became a bad one.

[snip]

But as the numbers got bigger, Congress started to lose track. It overwhelmed itself. Today, Congress is not even sure how many of those 4,291 reports are actually turned in. And it does not try to save copies of all the ones that are.

So some agencies cheat and send in nothing. And others waste time and money sending in reports — such as the one on dog and cat fur — that simply disappear into the void.

To support its case, WaPo focuses on one report requiring Customs and Border Patrol to report on how much dog and cat fur products are being shipped into the US, which is probably a needless report (which is also probably why WaPo picked it out of the 4,291 it identified).

And WaPo — a member of the Fourth Estate that purportedly serves as a check on power — comes to this very dangerous conclusion.

The problem is that there is no system to sort the good ones from the useless ones. They all flow in together, which makes it hard for congressional staffers to spot any valuable information hidden in the flood.

First, the press is part of that system! Rather than throwing cat and dog fur, perhaps WaPo could have tried to distinguish those that were critical from those that are questionable and those that are clearly frivolous.

Moreover, it is the height of irresponsibility to absolve Congressional staffers — whose bosses are the only ones that can eliminate useless reports — of responsibility for reading the reports they get. Either the staffers must be held accountable for reading the reports, or for eliminating them. That’s how you fix the system. That’s why we’re paying them.

Ultimately, too, I’m not sure I buy the WaPo’s argument that these are useless reports. 4,291 seems like a not unreasonable amount of data for legislators to receive and read about the world’s biggest (perhaps now second biggest) economy, about DOD’s $526 billion budget, about the many federal benefit programs, about the expanding police state.

And if you look at the actual list (rather than WaPo’s admittedly snazzy but not very informative infographic on them), many — perhaps even most — of the reports make a lot of sense.

Consider the reports listed for General Services Administration, an entity with an annual budget of $26 billion, which has the ability to effect great change as the source of enormous spending, and one that has routinely experienced significant spending scandals.

  1. Activities and status of advisory committees in existence during the previous calendar year
  2. A report on the status of the high-performance green building initiatives under this subtitle
  3. Administration’s alternative fueled vehicle program
  4. A description of lost opportunities for waste-heat recovery from the project described in paragraph (A)
  5. A report on the use of photovoltaic energy in public buildings
  6. Violations by Federal agencies of Federal Records Act of 1950, as codified 1950
  7. Reports by Inspector General of particularly serious or flagrant problems, abuses, or deficiencies in the administration of programs and operations of the agency
  8. Activities of the Inspector General
  9. Accessibility to public buildings by the physically handicapped
  10. Prospectus proposing a building project or lease
  11. Location, space, cost, and status of each public building, the construction, alteration, or acquisition of which is to be under authority of the Act, and which was uncompleted as of the date requested
  12. Building project surveys as requested by either the Senate or House
  13. Use of underutilized public buildings and property for facilities to assist the homeless
  14. Summary of excess property disposal reports
  15. Evaluation of the operation of programs for donation of Federal surplus personal property; excess personal property transferred
  16. Excessive stocking of property, above reasonable inventory levels, by executive agencies
  17. Administration of the Federal Property and Administrative Services Act of 1949
  18. Contracts to facilitate the national defense entered into, amended, or modified
  19. Acquisition cost of surplus real or related personal property conveyed for care or rehabilitation of criminal offenders during previous fiscal year
  20. Results of investigations of the cost of travel and the operation of privately owned vehicles to Federal employees while engaged in official business
  21. Annual determination of the average actual cost per mile for the use of a privately owned motorcycle, automobile, and airplane
  22. A plan to comply with Section 432 relating to energy and water conservation at General Services Administration facilities

Reports 1, 6, 7, 8, 10, 11, 12, 17, and 18 are simply reports Congress needs to ask for to ensure there’s some visibility into the Agency, to ensure they’ll be informed if GSA finds something wrong itself. Reports 2, 3, 4, 5, 9, 13, 14, 19, and 22 measure the efficacy of efforts to use GSA’s buying power to do some social good  (and report 9, on ADA accessibility, involves significant legal compliance).  Reports 15 and 16 address an area susceptible to graft.  Reports 20 and 21 are not only key to cost-benefit analysis of how Federal employees travel, but they apparently are tied to one of GSA’s most requested links. Some of these are also reports tied to an action, like buying a building. And all that amounts to less than 1 report for every $ billion American taxpayers give to GSA. If anything, there are a few more reports — that might identify obviously politicized or excessive spending, which is a persistent problem with GSA — that are missing.

Admittedly, that’s just one random agency. But aside from some entities the Federal government runs itself (like American Samoa and DC) as well as some Commissions over which there have been political fights in the past I’m not seeing a whole lot of waste here — though there may be some inefficiency in how the information is requested. I might grant that in the era of big data we need to automate this — in effect, give Congress a better way to Big! Data! the bureaucracies it oversees (though that would be awfully susceptible to abuse), but I don’t see a lot of information that shouldn’t be required from the bureaucracy.

I’m reminded how, 2 years ago, James Clapper claimed ODNI had to produce too many reports and should be permitted to eliminate 30 of them. He tried to get rid of the annual report on how many people have security clearance (one of the few ways we can measure the ballooning secret government). He tried to get rid of reports on Department of Homeland Security’s notoriously useless intelligence agency. He tried to eliminate reports on Chinese spying on the US and nuclear lab security, both persistent security issues. He tried to eliminate a report informing Congress what the privacy staffs of intelligence agencies are doing. In short, in the guise of onerous reporting, he tried to eliminate crucial oversight  (as well as a paper trail that could be FOIAed) on several areas of great public concern.

Or consider this: DOD cannot pass an audit. The biggest military in the world still is not required to account for the money it spends, both to itself and Congress.

And yet a newspaper is saying we require too much reporting from the great big bureaucracy?

I don’t buy it.

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Emptywheel Twitterverse
JimWhiteGNV RT @mz_chief: #DirtyWars McRaven |WTF! How does being head of Spec-Ops Cmd provide skill-set needed to run a university system? http://t.co
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JimWhiteGNV RT @ArifCRafiq: Confining Palestinians in Gaza to an even smaller space. Monitoring their caloric intake. Discussing their "demographic thr…
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JimWhiteGNV RT @SIGARHQ: Under 20% of Afghanistan expected to be accessible to US civilian oversight personnel by Dec 2014 http://t.co/PsJQYQvCl1
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JimWhiteGNV RT @samueloakford: UN says 23 medical facilities have been destroyed in #Gaza.
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JimWhiteGNV Of course @BarackObama won't answer my challenge today and suspend tanks to Israel. http://t.co/hjeWZDhMK6 But depravity of position shown.
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bmaz @adamgoldmanwp Uh, hello.
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bmaz @ColMorrisDavis No. And I'm thinking about coming for a visit...
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bmaz RT @dmataconis: Theodore Van Kirk, Last Surviving Member Of Enola Gay Crew, Dies At 93 http://t.co/cwK5qKARGW
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JimWhiteGNV @SimonEdhouse Yeah, I wasn't planning on it.
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JimWhiteGNV RT @SpaceCoastLaw: Don't understand how tank shells & artillery, aimed at schools & power plants, helps eradicate tunnels. Or how killing 1…
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JimWhiteGNV RT @Ramisalemdeeb: Can you spot the difference? [left] Warsaw Ghetto, 1940 [right] Gaza city, 2012 #GazaUnderAttack @occpal http://t.co/W6
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