Timeline: Is Volkswagen’s ‘Bug’ an EU Feature? [UPDATED]

[photo: macwagen via Flickr]

[photo: macwagen via Flickr]

Reports this last week that Volkswagen deployed “defeat devices” — software designed to cheat diesel passenger vehicle emissions controls tests — revealed more than an automobile manufacturing group run amok. One might suspect European Union’s emissions governance after looking at a timeline of events.

NOTE: This timeline is in progress and is subject to updating as new items are identified. [Update 7:00 pm EDT – note added about translation, and note added to citation [4]]

— 1970 —
February 1970 — The Council of the European Communities issued the Council Directive 70/156/EEC, which established a mutual baseline for technical specifications of vehicles sold across the member states. This included 3.2.20. Measures taken against air pollution.

— 1992 —
July 1992 — The first standard for passenger vehicle emissions, Euro 1 through 6, is implemented. Level Euro 1 for new diesel-fueled vehicles limited emissions of carbon monoxide (CO) to 2.72 grams per kilometer, with no initial limit on nitrous oxides (NOx) alone, but a combined limit of hydrocarbon+nitrous oxides (HC+NOx) at 0.97 g/km.

— 2004 – 2009 —
Dates Vary — Vehicle manufacturers phased in the remaining Euro 4 through 6 emissions standards.

19 October 2004 — European Environment Agency published a press release, Poor European test standards understate air pollution from cars, which summarized the problem:

Inadequate test standards are underestimating emissions of harmful air pollutants from new cars and evidence indicates that many diesel car owners are making things worse by modifying their engines to increase power, the European Environment Agency warned today.

No specific orders or directions were offered to resolve the problem with emissions test standards.

— 2007 —
(Month TBD) — Volkswagen subsidiary Audi launched its “Truth in Engineering” ad campaign. This tagline remains in use to present.

— 2008 —
(Month TBD) — VW announced its “Clean Diesel” (TDI model) technology, and began selling it in 4-cylinder diesel Jetta, Beetle, Audi A3, and Golf cars to the US market.

(Month TBD) — Green Car Journal named VW’s 2009 Jetta TDI “Green Car of the Year.”

— 2009 —
September 2009 — European emission standard Euro 5a for diesel passenger vehicles enacted, limiting CO to 0.50 grams per kilometer, NOx to 0.180 g/km , and HC+NOx to 0.230 g/km.

These levels are a reduction from Euro 4 standard implemented in January 2005 (CO=0.05, NOx=0.25, HC+NOx=0.30). Continue reading

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Obama and Xi Set Up a Red CyberPhone

Here are the terms of the cyber agreement announced today.

  • The United States and China agree that timely responses should be provided to requests for information and assistance concerning malicious cyber activities. Further, both sides agree to cooperate, in a manner consistent with their respective national laws and relevant international obligations, with requests to investigate cybercrimes, collect electronic evidence, and mitigate malicious cyber activity emanating from their territory. Both sides also agree to provide updates on the status and results of those investigation to the other side, as appropriate.
  • The United States and China agree that neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors.
  • Both sides are committed to making common effort to further identify and promote appropriate norms of state behavior in cyberspace within the international community. The United States and China welcome the July 2015 report of the UN Group of Governmental Experts in the Field of Information and Telecommunications in the Context of International security, which addresses norms of behavior and other crucial issues for international security in cyberspace. The two sides also agree to create a senior experts group for further discussions on this topic.
  • The United States and China agree to establish a high-level joint dialogue mechanism on fighting cybercrime and related issues. China will designate an official at the ministerial level to be the lead and the Ministry of Public Security, Ministry of State Security, Ministry of Justice, and the State Internet and Information Office will participate in the dialogue. The U.S. Secretary of Homeland Security and the U.S. Attorney General will co-chair the dialogue, with participation from representatives from the Federal Bureau of Investigation, the U.S. Intelligence Community and other agencies, for the United States. This mechanism will be used to review the timeliness and quality of responses to requests for information and assistance with respect to malicious cyber activity of concern identified by either side. As part of this mechanism, both sides agree to establish a hotline for the escalation of issues that may arise in the course of responding to such requests. Finally, both sides agree that the first meeting of this dialogue will be held by the end of 2015, and will occur twice per year thereafter.

The structure of these bullets, which comes from the White House, is rather interesting. The first and last simply announce an effort to agree to cooperate on cyber issues, with the first bullet announcing the principle and the last describing the nitty gritty of it. Basically, this is a call to implement a red phone — like the one Russia and the US had for nukes — for cybersecurity.

The third bullet, “welcoming” the UN Group of Government Experts report, is also about confidence building.

Which leaves the second bullet, which (unless I’m mistaken) goes far beyond what Obama noted in his press conference with Xi Jinping, but Xi did note in his speech: an agreement “that neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors,” that is, that China stop using hacks to steal from US companies. While the US does steal confidential business information, they don’t do so for competitive advantage of commercial sectors, though I can imagine some scenarios that China might claim did so. I imagine they’ll complain some about our spying on trade negotiations, for example, which probably would fall under this agreement.

I don’t think anyone thinks China will do this (though note the wiggle room in the “conduct or knowingly support” language). Instead, I suspect all the other language about confidence building intends to provide the US a means to more directly complain about this (and perhaps trade off corruption targets for hacker targets?).

Finally, note what was not included: Any promise to end spying for intelligence, like the OPM hack and/or US use of XKeyscore to accomplish the same kind of bulk collection. As I’ve said, I think that hacking might, for the short term, actually help confidence building measures, as it might provide some kind of transparency, though not verification.

We shall see whether a Red Phone for cyber will do any good.

Update: Herb Lin notes that the Red Phone idea is good in theory but hasn’t always worked as it should with China.

Clearly a good thing in principle.  But implementation is an issue, and experience with other hotlines between the United States and China has not always been positive.  A case in point is the military hotline between the United States and China, intended to enable direct communications between senior military leaders on both sides during crisis, has not always been operational even during routine tests of the system.  On several occasions in which the line was tested for operational capability and also in the wake of the 2001 EP-3 incident over Hainan, the Chinese military failed to respond at all.  In addition, the purview seems to be limited to cybercrime (whatever that might mean) and not to cyber issues related to national security.

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Raising Pat Kane and Lawyers Selling Out Clients

If you haven't seen the reportage, there is a bit of a fascinating case going on up in Erie County of New York. That would be the Buffalo area, give or take. The matter involves the star of the Chicago Blackhawks, the current Stanley Cup Champions, Patrick Kane. And it involves extremely serious rape allegations.

Several people, both on and offline, have asked me about this case. I have made a few observations on Twitter (namely that the cops have a LOT to answer for, and that this case is nuts), which I stand by, but have been unwilling, without more, and better, facts to really express much of an ultimate opinion.

I am still not willing to go to Kane’s ultimate guilt or innocence, and neither should anybody else at this point. In fact, it is revolting to the extent that many in the press, especially digital media, have putatively done so. I have long loved Dave Zirin, of The Nation, but he got out ahead of himself and criminal (frankly even civil) law here:

In the entire horrific history of male sports stars and accusations of sexual violence, there may have never been a story as nauseating as this one.

Yeah, what?? That was while he was explaining that there may actually be a heinous problem with the critical evidence of guilt. So let’s frame it in terms of the victim, right?

Okay, but which victim? Is the “victim” the one Zirin, and honestly most of us, assume, i.e. the “accuser”?

It may well be!

But, is it necessarily? No, the “victim” could well be Kane too. Usually the cops and prosecutors are putting their weight behind a civilian victim and lying against the accused. At least that is my experience. Sometimes the “State” case is only lightly shaded by the cops and prosecutors, sometimes (and this is way more than you think), it is in an unreasonably leveraged, and borderline unconscionable, manner. And this is the problem with a victim culture in criminal matters, victims get presumed and the presumption of innocence gets lost.

So, what about here where the DA is standing up and saying everybody needs to slow down on Kane? Is the DA protecting justice, or preventing it?

We don’t know. I don’t know. Dave Zirin doesn’t know. And neither do you. The publics’ emotions and feelings are not the judgment of the civil, much less criminal, justice system. Time may tell, or this case may be so fundamentally buggered up by yet unknown actors that it is never really known what happened.

But there is one way in which the accuser is absolutely a clear cut victim. She has been screwed by her, now former, lawyer, Tom Eoannou:

The lawyer for a woman accusing Chicago Blackhawks star Patrick Kane of sexual assault abruptly quit the case Thursday night, saying he’s no longer comfortable representing the woman because of how her mother reported finding an evidence bag they believed once held the woman’s rape kit.

Thomas Eoannou told reporters he believes there were, what he called, “fabrications” in the story of how the bag was found. He added that he’s no longer sure if the bag ever contained evidence from the investigation.

“I can only say that I don’t know what’s true and what’s not true,” Eoannou said during a hastily called news conference at his downtown Buffalo law office. “I received the storyline from the mother. And it’s my position that I’m not comfortable with that version of the events.”

Say what??

I don’t know where this story will ultimately go, but suffice it to say that it is some major league ethically dubious lawyering for Eoannou, to be publicly holding a press conference to say he doesn’t “have confidence” in his client’s story. Especially when he is abandoning his client in the process. On what any moron would know would be, nearly instantly, national television.

I guess Eoannou stopped a little short of calling his own client, and her mother, lying frauds, but, seriously, he did everything but that and certainly implied it. This is just flat out scummy, and arguably patently unethical lawyering, in my opinion. And it hurts lawyers, of all stripes, everywhere and taints the entire judicial system.

You don’t get to say such things as a lawyer. You CAN’T say such things as a lawyer. Not while both the active criminal investigation, and potential civil case, hang in the lurch for your client. And not while walking away like a coward from your client. Because that is selling your client, and everything you, as a lawyer, are supposed to stand for down the river. On a barge the width of the Mississippi.

Nothing good ever comes from a lawyer running his mouth to the press on a case before he really knows the facts. Far too many attorneys are tempted to self aggrandize and publicize themselves on their “big case” before they know what they are really dealing with. Thomas Eoannou should not have been yakking to the press to start with, much less have held a press availability to explain how he was shitting on his client and her case.

This is unconscionable, and unprofessional, media whoring at its worst. It brings to mind the case of David Aylor, the former lawyer for the cop charged with executing Walter Scott in South Carolina. As my friend Scott Greenfield said in that matter:

No one forces you to rush out to the spotlight and make a statement before you have a clue what evidence exists against your client, and no one forces you to rush out to the spotlight a second time when you’re exposed as the fool who shot off his mouth.

At first, the spotlight seems warm and alluring to the lawyer, a chance to get his brand out in public and make a name for himself as the kind of lawyer who can handle the big time. But stand in the spotlight long enough and it starts to burn.

Exactly. You just cannot do that, whether you represent the accused or the putative victim. You cannot bias and/or destroy your client’s case, your duty is to zealously protect the client. Here, Eoannou has prejudiced both the accuser’s case as a potential crime victim and any potential civil case she might have against Kane. That is simply impermissible irrespective of where the ultimate truth lies in the rape accusation against Patrick Kane.

UPDATE: Scribe has some good information in this comment regarding the the violations of the New York ethics code Thomas Eoannou arguably ran afoul of.

This is exacerbated by what might be the lawyer’s pretty blatant violation of the ethical rules. New York’s version of the Rules of Professional Conduct are interpreted more broadly than in other states, when it comes to disclosure of client confidences. Disclosure of anything that might embarrass the client or prejudice his rights is prohibited. The classic example is how the high-profile divorce lawyer is not allowed to acknowledge that the prominent movie star with a family values image has been to his office. This even if the star is not a client but only a prospective client.

NY RPC 1.6 states, in pertinent part:

(a) A lawyer shall not knowingly reveal confidential information, as defined
in this Rule, or use such information to the disadvantage of a client or for the
advantage of the lawyer or a third person, unless:
(1) the client gives informed consent, as defined in Rule 1.0(j);
(2) the disclosure is impliedly authorized to advance the best interests of the client and is either reasonable under the circumstances or customary in the professional community; or
(3) the disclosure is permitted by paragraph (b).
“Confidential information” consists of information gained during or relating
to the representation of a client, whatever its source, that is (a) protected by the
attorney-client privilege, (b) likely to be embarrassing or detrimental to the client if
disclosed, or (c) ….

(b) A lawyer may reveal or use confidential information to the extent that the lawyer reasonably believes necessary:
(1) to prevent reasonably certain death or substantial bodily harm;
(2) to prevent the client from committing a crime;
(3) to withdraw a written or oral opinion or representation previously given by the lawyer and reasonably believed by the lawyer still to be relied upon by a third person, where the lawyer has discovered that the opinion or representation was based on materially inaccurate information or is being used to further a crime or fraud;
(4) to secure legal advice about compliance with these Rules or other law by the lawyer, another lawyer associated with the lawyer’s firm or the law firm;
(5) (i) to defend the lawyer or the lawyer’s employees and associates against an accusation of wrongful conduct; or
(ii) to establish or collect a fee; or
(6) when permitted or required under these Rules or to comply with other law or court order.

NY RPC 1.18 makes 1.6 apply to prospective clients.

This attorney might argue his second “I quit” press release was correct under 1.6(b)(3) above. But the problem is that his first run-to-TV moment was the one he should not have undertaken. It appears he did little to no investigation before running to the press. If he had, chances are he would have had a good chance of finding whatever falsity he thinks he found between TV appearances that justified his dumping out on his client. Now, not only has he cast his client as a liar, her mother – who might have been a corroborating witness – as another liar – all prejudicial to the state’s case, if any existed, for an assault against her – but he also bolluxed any civil case she might have brought in the future.

I hope his malpractice insurance is paid up.

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Q: Whose Secrets Are More Sensitive than the DC Madam’s? A: NSA’s.

On September 17, FISC Judge Michael Mosman appointed the first known amicus under the terms laid out in USA F-ReDux; notice of which got posted yesterday (Mosman could have done so before USA F-ReDux, of course, but he did cite the statute in making the appointment). The question this amicus will help him determine is whether FISC should permit the government to retain bulk collected data past November 28, when the six month extension of the program ends. The government wants to retain the data it is collecting today for three months to make sure the new dragnet program collects the same data as the last one. But the data in question also includes data being held under an old protection order renewed last year as part of EFF’s suits against government dragnets; I suspect that data would show the extent to which one of the plaintiffs in EFF’s First Unitarian Church suit was dragnetted, and as such is critical to showing injury in that suit.

Mosman had deferred the decision on whether or not to let the government keep that data when he signed the August 28 dragnet order.

So who is the lawyer who will represent the interests of civil liberties and privacy in this question? [Update: In this post, I note Mosman may not have appointed Burton to represent privacy at all.]

White collar defense attorney Preston Burton. In addition to Russian moles Aldrich Ames and Robert Hanssen, Burton represented Monica Lewinsky and the DC Madam, Deborah Jeane Palfrey.

Burton is, undoubtedly, an excellent lawyer. And his experience representing the biggest spies of the last several decades surely qualifies him to work with the phone dragnet data, including data that probably shows NSA mapped out an entire civil liberties’ organization’s structure using the phone dragnet 5 years ago. Though given this description, it’s not clear Burton would learn of that information from the government’s application, which is what he’ll get.

Pursuant to 50 U.S.C. § l 803(i)(6)(A)(i), the Court has detennined that the government’s application (including exhibits and attachments) and the full, unredacted Primary Order in this docket are relevant to the duties of the amicus. By September 22, 2015, or after receiving confirmation from SEPS that the amicus has received the appropriate clearances and access approvals for such materials, whichever is later, the Clerk of the Court shall make these materials available to the amicus.

Moreover, remember the government can claim privilege over this data and not share it with Burton. Mosman even invited the government to tell the Court sharing information with Burton was not consistent with national security (though he set a deadline for doing so for September 21, so I assume they did not complain).

But it’s entirely unclear to me why Burton would be picked to represent the privacy interests of Americans, including those whose First Amendment rights had been violated under this program, in deciding whether to keep or destroy this data. Mosman made no mention of those interests when he explained his choice.

Mr. Burton is well qualified to assist the Court in considering the issue specified herein. The Security and Emergency Planning Staff (SEPS) of the Department of Justice has advised that he is eligible for access to classified information.

Which is why I take this to be one more in the series of Burton’s famous clients, in which discretion about DC’s secrets is the most important factor.

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Pope Francis Nails the Rhetoric of Addressing Congress

Pope Francis just finished his address to Congress. It was a masterful speech from a political standpoint, designed to hold a mirror up to America and provide a moral lesson.

He started with an appeal the most conservative in America would applaud, to the foundation of Judeo-Christian law (CSPAN panned to the Moses relief in the chamber as he spoke).

Yours is a work which makes me reflect in two ways on the figure of Moses. On the one hand, the patriarch and lawgiver of the people of Israel symbolizes the need of peoples to keep alive their sense of unity by means of just legislation. On the other, the figure of Moses leads us directly to God and thus to the transcendent dignity of the human being. Moses provides us with a good synthesis of your work: you are asked to protect, by means of the law, the image and likeness fashioned by God on every human face.

He then couched his lessons in a tribute to four Americans — two uncontroversial, Abraham Lincoln and Martin Luther King Jr — and two more radical, Dorothy Day and Thomas Merton (but probably obscure to those who would be most offended).

Several times he nodded towards controversial issues, as when he addressed making peace in terms that might relate to Cuba (controversial but still accepted by most who aren’t Cuban-American) or might relate to Iran.

I would like to recognize the efforts made in recent months to help overcome historic differences linked to painful episodes of the past. It is my duty to build bridges and to help all men and women, in any way possible, to do the same. When countries which have been at odds resume the path of dialogue – a dialogue which may have been interrupted for the most legitimate of reasons – new opportunities open up for all. This has required, and requires, courage and daring, which is not the same as irresponsibility. A good political leader is one who, with the interests of all in mind, seizes the moment in a spirit of openness and pragmatism. A good political leader always opts to initiate processes rather than possessing spaces (cf. Evangelii Gaudium, 222-223).

Similarly, he spoke of the threats to the family in such a way that might include gay marriage, but he then focused on the inability of young people to form new families.

I will end my visit to your country in Philadelphia, where I will take part in the World Meeting of Families. It is my wish that throughout my visit the family should be a recurrent theme. How essential the family has been to the building of this country! And how worthy it remains of our support and encouragement! Yet I cannot hide my concern for the family, which is threatened, perhaps as never before, from within and without. Fundamental relationships are being called into question, as is the very basis of marriage and the family. I can only reiterate the importance and, above all, the richness and the beauty of family life.

In particular, I would like to call attention to those family members who are the most vulnerable, the young. For many of them, a future filled with countless possibilities beckons, yet so many others seem disoriented and aimless, trapped in a hopeless maze of violence, abuse and despair. Their problems are our problems. We cannot avoid them. We need to face them together, to talk about them and to seek effective solutions rather than getting bogged down in discussions. At the risk of oversimplifying, we might say that we live in a culture which pressures young people not to start a family, because they lack possibilities for the future. Yet this same culture presents others with so many options that they too are dissuaded from starting a family.

By far the shrewdest rhetorical move the Pope made — standing just feet from the Catholic swing vote on the Supreme Court, Anthony Kennedy, as well as John Roberts (Catholic Justices Sam Alito, Clarence Thomas, and Antonin Scalia, all blew off the speech given by the leader of their faith), with the Catholic Vice President and Speaker sitting just behind — calling to “defend life at every stage of its development.” — This brought one of the biggest standing ovations of the speech (though Justices never applaud at these things and did not here), at which point the Pope pivoted immediately to ending the death penalty.

The Golden Rule also reminds us of our responsibility to protect and defend human life at every stage of its development.

This conviction has led me, from the beginning of my ministry, to advocate at different levels for the global abolition of the death penalty. I am convinced that this way is the best, since every life is sacred, every human person is endowed with an inalienable dignity, and society can only benefit from the rehabilitation of those convicted of crimes. Recently my brother bishops here in the United States renewed their call for the abolition of the death penalty. Not only do I support them, but I also offer encouragement to all those who are convinced that a just and necessary punishment must never exclude the dimension of hope and the goal of rehabilitation.

I hope the Pope’s general pro life call, emphasizing the death penalty rather than abortion, will get people who claim to be pro-life to consider all that that entails.

That led — past his expected appeal to stop shitting on Eden and start taking care of the poor — to what was probably the worst received line in the speech, a call to stop trafficking in arms.

Being at the service of dialogue and peace also means being truly determined to minimize and, in the long term, to end the many armed conflicts throughout our world. Here we have to ask ourselves: Why are deadly weapons being sold to those who plan to inflict untold suffering on individuals and society? Sadly, the answer, as we all know, is simply for money: money that is drenched in blood, often innocent blood. In the face of this shameful and culpable silence, it is our duty to confront the problem and to stop the arms trade.

The Pope went into a Chamber where large numbers are funded by arms merchants and told them they were relying on “money that is drenched in blood.” Very few applauded that line.

Still, the message was about the duty of legislators to serve the common good and on several issues, the Pope avoided directed confrontation, preferring an oblique message that might be interpreted differently by people of all political stripes. Amid the rancor of Congressional debates — about Planned Parenthood, about defunding government (and with it, harming the poor the most), about Iran — it was a remarkably astute message.

Continue reading

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The Real Story Behind 2014 Indictment of Chinese Hackers: Ben Rhodes Moves the IP Theft Goal Posts

As I’ve noted repeatedly, there has been some abysmal reporting on the indictment, in May 2014, of 5 Chinese People’s Liberation Army hackers. Over and over reporters claim, without any caveat, that the indictment was for the theft of intellectual property, the kind of economic espionage we claim to forswear but complain about China conducting. Here are two recent examples.

David Sanger:

And when Unit 61398 of the People’s Liberation Army in China was exposed as the force behind the theft of intellectual property from American companies, the Justice Department announced the indictment of five of the army’s officers. Justice officials hailed that as a breakthrough. Inside the intelligence community and the White House, however, it was regarded as purely symbolic, and the strike on the Office of Personnel Management continued after the indictments were announced.

Elias Groll:

But nearly a year and a half after that indictment was unveiled, the five PLA soldiers named in the indictment are no closer to seeing the inside of a federal courtroom, and China’s campaign of economic espionage against U.S. firms continues.

Given that China’s hacking of US targets is so central to this week’s visit by Chinese President Xi Jinping, I wanted to return to that indictment to tease out what it actually showed. Because it — and Deputy National Security Advisor Ben Rhodes’ description of it in the lead-up to Xi’s visit — makes it clear the US is really talking about far more than IP theft.

The May 2014 indictment was mostly about monitoring negotiations and trade disputes

The indictment includes 31 charges. Just one of those charges — involving the theft of nuclear plant information from Westinghouse — is for economic espionage. Just one of those charges — involving the same theft from Westinghouse — is for theft of a trade secret. I’ll return to the Westinghouse charges in a second.

The additional charges include 9 Computer Fraud and Abuse Act violations (1-9) for breaking into various computers and stealing information, much of it to enable further hacking, 14 charges (10-23) of damaging a computer by planting malware in various computers, and 6 charges ( 24-29) of identity theft for stealing identity information associated with the targets of the attacks.

Yes, all those other 29 charges did involve hacking to obtain information. But that’s the point of what I wrote in my previous post on this: the theft isn’t the core of what we — at least explicitly — complain about China taking, the technology IP of private companies.

Here’s what PLA allegedly took from the five victims other victims, aside from Westinghouse, described in the indictment:

  • SolarWind (a German company with a location in Oregon): PLA allegedly stole detailed information on SolarWind’s financial position at a time when SolarWind was litigating a dumping complaint against Chinese solar manufacturers
  • US Steel: During a period when it was litigating cases against the Chinese steel industry, including against Baosteel, PLA allegedly stole data from (apparently) a sysadmin mapping USS’ computers and mobile devices
  • Allegheny Technologies Incorporated: During a period when it had already started a joint venture with China’s Baosteel but also when it was in anti-dumping litigation against the company, PLA monitored ATI’s computers
  • Alcoa: Immediately after Alcoa and Aluminum Corporation of China bought a 14% stake of Rio Tinto together, PLA monitored Alcoa’s computers
  • US Steel Workers: During a period when it, and the steel industry, was pushing for anti-dumping action against China, PLA stole emails including strategic information

Note the last one: the Steelworkers. A bunch of business reporters are pointing to this indictment — for stealing strategic discussions from a union! — as proof that China is stealing intellectual property from US corporations and sharing it with Chinese companies.

The one case of IP theft in the indictment is reverse engineering, not independent IP theft

In addition to those four corporations and one union, there’s Westinghouse, the one victim against which DOJ actually alleged economic espionage. In 2007, Westinghouse entered into a joint venture, which included significant but carefully negotiated tech transfer. The indictment doesn’t describe which entity involved in the deal it had in mind (several companies were involved, including ones that are more independent from the state), though it is almost certainly China’s State Nuclear Power Technology Corporation, which has no illusions of independence from the state.  The deal was signed with ExIm Bank support and export licensing approval. Since that time, the deal has been renegotiated over what technology would get transferred to China, and Westinghouse is still building new reactors under the deal, with the latest one opening in May 2015. A subsequent contract sold even more advanced nuke plants, with Westinghouse expecting 100% localization through the contract.

In the middle of this 8 year relationship that has and will lead to Westinghouse transferring the technology to build these plants, on May 6, 2010, the indicted hackers allegedly stole information pertaining to design specs for pipes within nuclear power plants; the indictment does not say whether those pipes were included in the technology transfer. In the economic espionage section, the indictment alleges this information got transferred for the benefit of a foreign government, China, not naming even Chinese nuclear authority SNPTC, much less any of the individual joint ventures involved in the deal. That is, even in the charge pertaining to economic espionage, the indictment does not claim this was about benefitting a specific company, but instead was about benefitting the country as a whole. And it’s not like the US can claim it doesn’t spy on specific nuclear companies in the interest of the country as a whole.

And even the Westinghouse hack included the theft of information pertaining to negotiations. The indictment notes that in the advance of Hu Jintao’s state visit to the US in 2011, as Westinghouse and SNPTC were negotiating further construction, one of the hackers targeted deliberative emails regarding these negotiations.

Some stolen e-mails described the status of the four AP1000 plants’ construction. Many other stolen e-mails, however, concerned Westinghouse’s confidential business strategies relating to [SNPTC], including Westinghouse’s (a) strategies for reaching an agreement with [SNPTC] on future nuclear power plant construction in China; and (b) discussions regarding cooperation and potential future competition with [SNPTC] in the development of nuclear power plants elsewhere around the world.

Altogether, the indictment alleges, PLA hackers took 1.4G of data, which in the grand scale of nuclear plans and negotiations is not all that much data.

All of which is to say that the economic espionage charge was a fairly minor theft in the scope of the larger indictment, constituting nowhere near the kinds of data China steals from Defense contractors, and not alleging a transfer to a specific company. It’s also, both in the scale of data stolen from US companies doing business in China (where reverse engineering is often considered the cost of doing business) and the scale of Chinese IP theft here, miniscule.

The US spies on trade disputes too

The rest of the indictment — by far the bulk of the charges — involves spying during a range of negotiations, several of them international trade disputes (though there’s also an aspect of intimidation anytime takes a trade dispute against China). We know that NSA spies on other countries involved in trade disputes, including spying on the American attorneys representing foreign governments in trade disputes. It spies rampantly in advance of larger trade negotiations. And I would be shocked if the US didn’t spy on countries considering huge arms deals with ostensibly private US companies, especially when those deals are central to the petrodollar laundering that serves as the foundation to our Middle East strategy. That is, much of what we charged China’s PLA hackers for in this indictment, the US does. And we certainly spy on individual foreign companies for US national advantage, as when we mapped out Huawei very similarly to the way China mapped out USS.

None of that’s to excuse it. But it is to say no one should expect an indictment that involved — in the grand scheme of things — miniscule amounts of IP theft and lots more amounts of trade negotiation theft to teach China a lesson about IP theft. If we want to teach China a lesson about IP theft, then maybe we should indict it for IP theft, especially the kind of IP theft outside the realm of ongoing business relations which we claim to be the real concern.

That has never happened, and reporters should stop claiming it has.

Ben Rhodes now says this is about IP theft and confidential information

All that said, in the run-up to Xi Jinping’s visit, the Administration has actually gotten slippery on what it means when it invokes this kind of theft.

In an on the record conference call Tuesday, Ben Rhodes claimed (according to the transcript), “the United States government has already engaged in law enforcement actions, for instance, that targeted Chinese entities who we believed were behind that type of activity,” referring to this 2014 indictment. He had just described the activity as, “cyber-enabled theft of confidential business information and proprietary technology from U.S. companies” and described the goals as, “the protection of intellectual property and the ability of businesses to operate without concern of cyber theft.” In addition to “proprietary technology,” Rhodes is now including the cyber-enabled theft of “confidential business information” to China’s sins.

That is, in the days before a big public discussion about cyber theft, Ben Rhodes is moving the goal posts, describing the action of concern to include both “proprietary technology” — what they’ve been talking about for years — and “confidential business information” — which definitely describes what the PLA hackers took but doesn’t describe what they usually talk about when discussing IP theft.

Interestingly, Rhodes went on to suggest China would change its ways because otherwise US corporations won’t want to do business with them. “[T]he chief reason I think the Chinese have an interest in changing some of their behavior in the cyber realm is because if they’re operating outside of established international rules and norms, they’re ultimately going to alienate businesses, including U.S. businesses who have been critical to Chinese economic growth.” This is not the model of stealing data on the F-35 from Lockheed and subcontractors, the quintessential example of IP theft people like to point to. Rather, it’s the use of hacking to reverse engineer products China is buying from US companies, something Chinese companies usually do by stealing tools used in plants in China. Maybe Rhodes is correct that companies aren’t going to rush headlong into the fastest growing market anymore knowing China will reverse engineer, including by cyber-theft, of the things they’re buying, though I think that’s only likely if China’s growth continues to skid to a halt.

Ultimately, Rhodes accused China of cheating capitalism at a more fundamental level. “[T]hat’s something that gets at the integrity of the global economy, and that’s why we’ve been so focused on this.” Which is where it gets rather farcical, because it’s not like the US as a country doesn’t do what it can to bend the rules for its companies. Plus, if the Administration wants to take on China’s cheating, there are far easier ways to do it, such as on currency.

The roll-out of some kind of mutual understanding on cyber issues this week will be interesting regardless of Rhodes’ moving of the goal posts. But that he has done so — and broadened our age-old complaint about IP theft to now include the theft of confidential business information (some, but not all of which, we also do), is itself notable.

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Delusional DOJ Claims Documents Declassified, Released Under FOIA Not Declassified, Not Authentic

Screen Shot 2015-08-28 at 11.22.34 AM
Back in March, NYT’s Charlie Savage sued to get the NSA to respond to a FOIA request asking for “copies of — and declassification review of, as necessary” a bunch of things, including IG reports on “bulk phone records collection activities under Section 215 of the PATRIOT Act.”

In late August, they delivered an installment of their response to that suit to him including a series of IG Reports on the 215 program. Among other things, the FOIA response included an August 2, 2010 letter to FISC Judge John Bates referring to a compliance violation in Docket BR 10-10 (the order is dated February 26, 2010). In referring to the caption of that docket (and the caption redactions in other dockets are consistent in size), it named Verizon Wireless.

As I pointed out at the time, this provides Larry Klayman and other Verizon Wireless subscribers challenging the phone dragnet basis to establish standing to sue. While in the Klayman suit, Judge Richard Leon invited Klayman just to add a plaintiff who subscribed to Verizon Business Services, in Northern CA, EFF requested the 9th Circuit take judicial notice of the document.

So now DOJ has gone a bit batshit. (Josh Gerstein first reported on this here.) It mocks that EFF head Cindy Cohn “apparently believes” it fair to conclude Verizon Wireless took part in the phone dragnet because of a reference to “a company name that includes the term ‘Verizon Wireless’ in the caption of a purported FISC filing” that happens to govern the entire phone dragnet. It suggests the accuracy of the document DOJ gave to Savage can be reasonably questioned, apparently disputing its own FOIA response to Savage. And it bitches that EFF “does not contend that this document was declassified,” even though it was given to Savage pursuant to his request for “declassification review [] as necessary.”

In short, in an effort to argue the document doesn’t say what it says (which may, I admit, not mean what it says, but such is the wackiness of the secret FISA Court and the secret phone dragnet), DOJ is saying that DOJ didn’t provide Charlie Savage authentic, declassified documents like he sued to get. DOJ uses words like “purported” to describe DOJ’s own FOIA response.

I mean, I’ll grant you, those of us outside DOJ often doubt the accuracy of their FOIA responses to us. But usually DOJ at least pretends they’re giving us authentic documents.

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BREAKING: OPM and DOD (Claim They) Don’t Think Fingerprint Databases Are All That Useful

In the most negative news dump released behind the cover of Pope Francis’ skirts, Office of Public Management just announced that rather than previous reports that 1.1 million people had had their fingerprints stolen from OPM’s databases, instead 5.6 million have.

Aside from the big numbers involved, there are several interesting aspects of this announcement.

First, it seems OPM had an archive of records on 4.5 million people, including fingerprint data, they hadn’t realized was there at first.

As part of the government’s ongoing work to notify individuals affected by the theft of background investigation records, the Office of Personnel Management and the Department of Defense have been analyzing impacted data to verify its quality and completeness. During that process, OPM and DoD identified archived records containing additional fingerprint data not previously analyzed.

If, as it appears, this means OPM had databases of key counterintelligence lying around it wasn’t aware of (and therefore wasn’t using), it suggests Ron Wyden’s concern that the government is retaining data unnecessarily is absolutely correct.

Rather bizarrely, upon learning that someone found and went through archived databases to obtain more fingerprint data, “federal experts” claim that “as of now, the ability to misuse fingerprint data is limited.”

As EFF just revealed, since February the FBI has been busy adding fingerprint data it gets when it does when it does background checks on job applicants into its Next Generation Identification database.

Being a job seeker isn’t a crime. But the FBI has made a big change in how it deals with fingerprints that might make it seem that way. For the first time, fingerprints and biographical information sent to the FBI for a background check will be stored and searched right along with fingerprints taken for criminal purposes.

The change, which the FBI revealed quietly in a February 2015 Privacy Impact Assessment (PIA), means that if you ever have your fingerprints taken for licensing or for a background check, they will most likely end up living indefinitely in the FBI’s NGI database. They’ll be searched thousands of times a day by law enforcement agencies across the country—even if your prints didn’t match any criminal records when they were first submitted to the system.

This is the first time the FBI has allowed routine criminal searches of its civil fingerprint data. Although employers and certifying agencies have submitted prints to the FBI for decades, the FBI says it rarely retained these non-criminal prints. And even when it did retain prints in the past, they “were not readily accessible or searchable.” Now, not only will these prints—and the biographical data included with them—be available to any law enforcement agent who wants to look for them, they will be searched as a matter of course along with all prints collected for a clearly criminal purpose (like upon arrest or at time of booking).

In its PIA explaining the move, FBI boasts that this will serve as “an ‘ongoing’ background check that permits employers, licensors, and other authorized entities to learn of criminal conduct by a trusted individual.” To suggest that a massive database of fingerprints can provide the FBI real-time updates on certain behaviors, but pretend it wouldn’t serve a similar purpose to the Chinese, defies logic. Heck, why is OPM keeping fingerprint information if it can’t be used? And of course, all that assumes none of the 5.6 million people affected has a fingerprint-authenticating iPhone.

Of course this can be used, otherwise the Chinese wouldn’t have gone out of their way to get it!

But OPM’s claim that the Chinese just went out of their way to get that fingerprint data for no good reason provides the agency with a way to delay notification while FBI, DHS, DOD and “other members of the Intelligence Community” come up with ways to limit the damage of this.

If, in the future, new means are developed to misuse the fingerprint data, the government will provide additional information to individuals whose fingerprints may have been stolen in this breach.

After which OPM spends two paragraphs talking about the identity protection those whose identities have been stolen will get, as if that mitigates a huge counterintelligence problem.

It sure sounds like OPM is stalling on informing the people who’ve been exposed about how badly they’ve been exposed, under the incredible claim that databases of fingerprints aren’t all that useful.

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“It’s Good to Be Back,” Petraeus Says before He Offers a Vague Apology and Oil Market Advice

Screen Shot 2015-09-22 at 1.24.13 PMJohn McCain has officially launched David Petraeus’ rehabilitation tour.

Petraeus testified today before the Senate Armed Services Committee on what to do in the Middle East. But you could tell how much this is about rehabilitation for the heartfelt thanks Petraeus offered McCain for bringing him in to testify. “It’s good to be back,” Petraeus said, before launching into the most hailed part of the hearing, this vague apology.

I think it is appropriate to begin my remarks this morning with an apology, one that I have offered before, but nonetheless one that I want to repeat to you and to the American public. Four years ago I made a serious mistake, one that brought discredit on me and pain closest–to those closest to me. It was a violation of the trust placed in me, and a breach of the values to which I had been committed throughout my life. There’s nothing I can do to undo what I did. I can only say again how sorry I am to thoseI let down and then strive to go forward with a greater sense of humility and purpose, and with gratitude to those who stood with me during a very difficult chapter in my life.

He didn’t actually say what part of the scandal he was apologizing for, though some of the press seemed to be certain that it was about one or another aspect of it. His invocation of the pain he caused those closest to him suggests it was the affair itself. The timing — just over four years ago, August 28, 2011, was the day he gave his black books full of code word intelligence to Paula Broadwell for several days — suggests it was about actually leaking intelligence.

If the acts he apologized for were four years ago, though, it means this apology doesn’t cover the lies he told the FBI on June 12, 2012 about sharing this intelligence. And it doesn’t cover keeping those books with code word intelligence in the top drawer of his unlocked desk until FBI found them on April 5, 2013, the act — mishandling classified information — that he technically pled guilty too.

Though I wouldn’t be surprised if the lawyer he shares with Hillary Clinton, David Kendall, advised him not to apologize for lying to the FBI, given that would involve admitting guilt for something he didn’t plead guilty for.

So having apparently apologized for a range of things that didn’t apparently include lying to the FBI, David Petraeus gave unsworn testimony to Congress.

The testimony was about what you’d expect. David Petraeus’ surge was, according to David Petraeus, a huge success. Petraeus told of some great things Nuri al-Maliki did even while explaining some great things Haider al-Abadi is doing. Petraeus envisioned the break up of Syria while insisting that the same couldn’t happen in Iraq (because the Sunnis in Iraq would have no oil revenues). All casualties in Syria were the fault of Bashar al-Assad, and not the US ally-backed forces Petraeus watched get armed while he was still CIA Director. Petraeus denied, without being asked, that the military had a policy of ignoring Afghan bacha bazi, as reported in NYT this week.

Not a word was mentioned about the chaos CIA-led intervention in Libya has caused, or what to do about it (Petraeus did mention Libya in a passing answer to a question), not even in discussions of why the Russians would never be willing to work under US command in countering ISIS, not even from the party that remains obsessed about Benghazi.

Nothing was mentioned about how all the men we’ve — Petraeus — has trained have been prone to flee.

The closest Petraeus came to discussing the support for Sunni extremism our allies — Qatar, Saudi Arabia, and Turkey — give (and therefore their role in the region’s instability) came when Petraeus discussed Turkey’s increasing targeting of PKK that happened at the same time Turkey agreed to let us use Incirlik Air Base, though Petraeus didn’t note any connection between those two things.

Perhaps the most interesting part of the hearing, though, came towards the end (after 2:11), when Thom Tillis asked a very reasonable question about how other countries (he didn’t say, but he probably had China in mind) reliance on Iran once they start selling oil will become important strategically.

After claiming Tillis’ break-even number for Iran’s budget (which accords with public reporting) was incorrect, Petraeus put on his private equity guy hat.

I’m the chairman of the KKR global institute and a partner in KKR, one of the global investment firms, uh [hand gesture showing breadth] big private equity firms in our country. And, first of all, by the way, the analysis on crude oil export shows that not only would the price of WTI, West Texas Intermediate go up slightly, so the producers would be better off, it would also have an impact on Brent Crude prices, which would come down, the global price, which is a lot of what we refine, and the price at the pump probably would go down. So it’s very interesting — if you look at, I think it’s the CBO that did the analysis of this. One of our analytical organizations here, I think, on Capitol Hill has looked at this. And it’s a very interesting dynamic.

[Tillis tries to interrupt, Petraeus keeps speaking.]

Beyond that, I don’t think we should get involved in markets as a country, unless we want to do something like sanctions. So again, you wouldn’t do it — if you want to use sanctions for economic tools as a weapon, gives thumbs up sign] fine, but otherwise I think you have to be very careful about intervention in the global markets.

Tillis tried again, restating his question about whether we should drill as much oil as we can to hedge against increased Iranian influence.

We ought to produce all the oil that we can, if we’re making a profit. If we can enable countries like Iraq to revive their oil industry as we did, it helps Iraq, it funds their gover–by the way they’re running into fiscal deficit now. But again, this is really about market forces I think, much more than getting involved in this as a country.

Not much of Petraeus’ answer made sense, but I can assure you, the head of KKR’s Global Institute is pretty excited about natural gas.

Sure, the expertise of a private equity guy might be worthwhile to Congress, though that affiliation was not listed on the SASC websiteScreen Shot 2015-09-22 at 12.46.32 PM

But it’s all the more absurd given the rest of Petraeus testimony, most notably his silence about Saudi Arabia’s destabilizing influence, given that we do play in global markets precisely through our unquestioningly loyalty to the Saudis.

I guess the Senate — which turned out in big numbers — finds this kind of analysis useful. But it is, once again, about David Petraeus more than it is about testimony that will help us adopt a sound policy in the Middle East.

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What Is the Point of the SEC ECPA-Reform Power Grab?

Last week, the Senate Judiciary Committee had a hearing on Electronic Communication Privacy Act reform, the main goal of which is to provide protection for content served on a third party’s server. Because reform is looking more inevitable in Congress (the House version of the bill has more sponsors than any other), government agencies used the hearing as an opportunity to present their wish list for the bill. That includes asking for an expansion of the status quo for civil agencies, with witnesses from SEC, DOJ, and FTC testifying (DOJ also made some other requests that I hope to return to).

Effectively, the civil agencies want to create some kind of court order that will provide them access to stored content. A number of the agencies’ witnesses — especially SEC’s Andrew Ceresney — claimed that a warrant is the same as an order, which culminated in Sheldon Whitehouse arguing (after 45:30) that an order requiring court review is actually less intrusive than a warrant because the latter is conducted ex parte.

It took until CDT policy counsel (and former ACLU lawyer) Chris Calabrese to explain why that’s not true (after 2:08):

We have conflated two really different and very different things in this committee today. One is a court, some kind of court based on a subpoena and one is a probable cause warrant. These are not the same thing. A subpoena gives you access to all information that is relevant. As pursuant, relevant to a civil investigation, a civil infraction. So if you make a mistake on your taxes, that’s a potential civil infraction. Nothing that has been put forward by the SEC would do anything but be a dramatic expansion of their authority to get at ordinary people’s in-boxes. Not just the subjects of investigation, but ordinary folks who may be witnesses. Those people would have the–everything in their in-boxes that was relevant to an investigation, so a dramatic amount of information, as opposed to probable cause of evidence of a crime. That’s a really troubling privacy invasion.

I’m utterly sympathetic with Calabrese’s (and the EFF’s) argument that the bid for some kind of civil investigative order is a power grab designed to bypass probable cause.

But I wonder whether there isn’t another kind of power grab going on as well — a bid to force banks to be investigated in a certain kind of fashion.

It was really hard, to begin with, to have former and (presumably) future Debevoise & Plimpton white collar defense attorney Andrew Ceresney to talk about how seriously SEC takes it job of  “the swift and vigorous pursuit of those who have broken the securities laws through the use of all lawful tools available to us,” as he said in his testimony and during the hearing. There’s just been no evidence of it.

Moreover, as Ceresney admitted, SEC hasn’t tried to obtain email records via an order since the US v. Warshak decision required a warrant in the 6th Circuit, even though SEC believes its approach — getting an order but also providing notice to the target — isn’t governed by Warshak. As SEC Chair Mary Jo White (another revolving door Debevoise & Plimpton white collar defense attorney) said earlier this year,

“We’ve not, to date, to my know­ledge, pro­ceeded to sub­poena the ISPs,” White said. “But that is something that we think is a crit­ic­al au­thor­ity to be able to main­tain, done in the right way and with suf­fi­cient so­li­cit­ous­ness.”

For five years, the SEC hasn’t even tried to use this authority, all while insisting they needed it — even while promising they would remain “solicitous,” if there were any worries about that.

Claims that the SEC needed such authority might be more convincing if SEC was actually pursuing crooks, but there’s little evidence of that.

Which is why I’m interested in this passage, from a letter White sent to Pat Leahy in April 2013 and appended to Ceresney’s testimony, explaining why SEC can’t have DOJ obtain orders for this material.

DOJ only has authority to seek search warrants to advance its own investigations, not SEC investigations. Thus, the Commission cannot request that the DOJ apply for a search warrant on the SEC’s behalf. Second, many SEC investigations of potential civil securities law violations do not involve a parallel criminal investigation, and thus there is no practical potential avenue for obtaining a search warrant in those cases. The large category of cases handled by the SEC without criminal involvement, however, have real investor impact, and are vital to our ability to protect- and, where feasible, make whole – harmed investors.

The only times when SEC would need their fancy new order is if the subject of an investigation refuses to turn information voluntarily, and the threat that they could obtain an order anyway is, according to Ceresney, they key reason SEC wants to maintain this authority (though he didn’t argue the apparent absence of authority has been responsible for SEC’s indolence over the last 5 years). But that act, refusing to cooperate, would get companies more closely into criminal action and — especially under DOJ’s purportedly new policy of demanding that companies offer up their criminal employees — into real risk of forgoing any leniency for cooperation. But White is saying (or was, in 2013, when it was clear Eric Holder’s DOJ wasn’t going to prosecute) that SEC can’t ask DOJ to subpoena something because that would entail a potentially criminal investigation.

Well yeah, that’s the point.

Then add in the presumption here. One problem with prosecuting corporations is they hide their crimes behind attorney-client and trade secret privileges. I presume that’s partly what Sally Yates meant in her new “policy” memo, noting that investigations require a “painstaking review of corporate documents … which may be difficult to collect because of legal restrictions.” SEC’s policy would be designed for maximal privilege claims, because it would involve the subject in the process.


If the legislation were so structured, an individual would have the ability to raise with a court any privilege, relevancy, or other concerns before the communications are provided by an ISP, while civil law enforcement would still maintain a limited avenue to access existing electronic communications in appropriate circumstances from ISPs.


Other criminals don’t get this treatment. Perhaps the problems posed by financial crime — as well as the necessity for broader relevancy based evidence requests — are unique, though I’m not sure I buy that.

But that does seem to be a presumption behind this SEC power grab: retention of the special treatment financial criminals get that has thus far resulted in their impunity.

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