As part of her Questions for the Record, Attorney General nominee Loretta Lynch was asked about her role in the HSBC handslap in 2012. (See Q 38, h/t Katherine Hawkins)
38. As United States Attorney for the Eastern District of New York, you helped secure nearly $2 billion from HSBC over its failure to establish proper procedures to prevent money laundering by drug cartels and terrorists. You were quoted in a DOJ press release saying, “HSBC’s blatant failure to implement proper anti-money laundering controls facilitated the laundering of at least $881 million in drug proceeds through the U.S. financial system.”
You stated that the bank’s “willful flouting of U.S. sanctions laws and regulations resulted in the processing of hundreds of millions of dollars in [Office of Foreign Assets Control]-prohibited transactions.” Still, no criminal penalties have been assessed for any executive who may have been involved.
a. Did you make any decision or recommendation on charging any individual with a crime?
i. If so, please describe any and all decisions or recommendations you made.
ii. Please explain why such decisions or recommendations were made.
b. If you did not make any decision or recommendation on charging any individual with a crime, who made the decision not to prosecute?
RESPONSE: On December 11, 2012, the Department filed an information charging HSBC Bank USA with violations of the Bank Secrecy Act and HSBC Holdings with violating U.S. economic sanctions (the two entities are collectively referred to as “HSBC”). Pursuant to a deferred prosecution agreement (“DPA”), HSBC admitted its wrongdoing, agreed to forfeit $1.256 billion, and agreed to implement significant remedial measures, including, among other things, to follow the highest global anti-money laundering standards in all jurisdictions in which it operates. As the United States District Judge who approved the deferred prosecution found, “the DPA imposes upon HSBC significant, and in some respect extraordinary, measures” and the “decision to approve the DPA is easy, for it accomplishes a great deal.” Although grand jury secrecy rules prevent me from discussing the facts involving any individual or entity against whom we decided not to bring criminal charges, as I do in all cases in which I am involved, I and the dedicated career prosecutors handling the investigation carefully considered whether there was sufficient admissible evidence to prosecute an individual and whether such a prosecution otherwise would have been consistent with the principles of federal prosecution contained in the United States Attorney’s Manual.
I want to reiterate, particularly in the context of recent media reports regarding the release of HSBC files pertaining to its tax clients, that the Deferred Prosecution Agreement reached with HSBC addresses only the charges filed in the criminal violations of the Bank Secrecy Act for failures to maintain an adequate anti-money laundering program and for sanctions violations. The DPA explicitly does not provide any protection against prosecution for conduct beyond what was described in the Statement of Facts. Furthermore, I should note the DPA explicitly mentions that the agreement does not bind the Department’s Tax Division, nor the Fraud Section of the Criminal Division. information, which are limited to violations of the Bank Secrecy Act for failures to maintain an adequate anti-money laundering program and for sanctions violations. The DPA explicitly does not provide any protection against prosecution for conduct beyond what was described in the Statement of Facts. Furthermore, I should note the DPA explicitly mentions that the agreement does not bind the Department’s Tax Division, nor the Fraud Section of the Criminal Division. [my emphasis]
Lynch seems to want to have her cake and eat it too.
Sure, she and her prosecutors were unable to find the evidence in Carl Levin’s gift-wrapped case. But trust her, she seems to be saying, she might one day see fit to charge some warm bodies with fraud if she’s confirmed.
And note she makes no mention of material support for terrorism????
Because if you’re a bank, such things are legal, apparently.
As I pointed out the other day, the CIA IG Report on spying on the Senate Intelligence Committee appears to say the egregious spying happened after John Brennan told Dianne Feinstein and Saxby Chambliss on January 15 CIA had been spying on SSCI.
Agency Access to Files on the SSCI RDINet:
Five Agency employees, two attorneys and three information technology (IT) staff members, improperly accessed or caused access to the SSCI Majority staff shared drives on the RDINet.
Agency Crimes Report on Alleged Misconduct by SSCI Staff:
The Agency filed a crimes report with the DOJ, as required by Executive Order 12333 and the 1995 Crimes Reporting Memorandum between the DOJ and the Intelligence Community, reporting that SSCI staff members may have improperly accessed Agency information on the RDINet. However, the factual basis for the referral was not supported, as the author of the referral had been provided inaccurate information on which the letter was based. After review, the DOJ declined to open a criminal investigation of the matter alleged in the crimes report.
Office of Security Review of SSCI Staff Activity:
Subsequent to directive by the D/CIA to halt the Agency review of SSCI staff access to the RDINet, and unaware of the D/CIA’s direction, the Office of Security conducted a limited investigation of SSCI activities on the RDINet. That effort included a keyword search of all and a review of some of the emails of SSCI Majority staff members on the RDINet system.
With respect to your second question about monitoring of Members of Congress and Legislative Branch employees, in general those individuals will not be subject to [User Activity Monitoring] because their classified networks are not included in the definition of national security systems (NSS) for which monitoring is required.
Because no internally owned or operated Legislative branch network qualifies as a national security system, UAM by the Executive Branch is accordingly neither required nor conducted. To be clear, however, when Legislative Branch personnel access a national security system used or operated by the Executive Branch, they are of course subject to UAM on that particular system.
CIA’s spying on SSCI took place on CIA’s RDI network, not on the SSCI one. SSCI had originally demanded they be given the documents pertaining to the torture program, but ultimately Leon Panetta required them to work on a CIA network, as Dianne Feinstein explained earlier this year.
The committee’s preference was for the CIA to turn over all responsive documents to the committee’s office, as had been done in previous committee investigations.
Director Panetta proposed an alternative arrangement: to provide literally millions of pages of operational cables, internal emails, memos, and other documents pursuant to the committee’s document requests at a secure location in Northern Virginia. We agreed, but insisted on several conditions and protections to ensure the integrity of this congressional investigation.
Per an exchange of letters in 2009, then-Vice Chairman Bond, then-Director Panetta, and I agreed in an exchange of letters that the CIA was to provide a “stand-alone computer system” with a “network drive” “segregated from CIA networks” for the committee that would only be accessed by information technology personnel at the CIA—who would “not be permitted to” “share information from the system with other [CIA] personnel, except as otherwise authorized by the committee.”
It was this computer network that, notwithstanding our agreement with Director Panetta, was searched by the CIA this past January,
Presumably, those limits on access should have prevented CIA’s IT guys from sharing information about what SSCI was doing on the network. But it’s not clear they would override Clapper’s UAM.
Remember, too, when Brennan first explained how this spying didn’t qualify as a violation of the Computer Fraud and Abuse Act, he said CIA could conduct “lawfully authorized … protective … activity” in the US. Presumably like UAM.
I have no idea whether this explains why CIA’s IG retracted what Feinstein said had been his own criminal referral or not. But I do wonder whether the CIA has self-excused some of its spying on SSCI in the interest of continuous user monitoring?
If so, it would be the height of irony, as UAM did not discover either Chelsea Manning’s or Edward Snowden’s leaks. Imagine if the only leakers the Intelligence Community ever found were their own overseers?
Chuck Grassley rarely gets the credit he deserves for championing whistleblowers. But, while there have been notable exceptions, Grassley has long defended both generalized protections for whistleblowers, as well as whistleblowers themselves.
Yesterday, he gave a long speech on the Whistleblower Protection Act. As part of it, he laid out a number of ways President Obama’s Insider Threat detection program threatened whistleblowers.
He described how the FBI has refused to explain whether Insider Threat Program training adequately distinguishes between whistleblowers and inside threats. Just last week, FBI walked out in the middle of a briefing for Grassley and Pat Leahy!
Meanwhile, the FBI fiercely resists any efforts at Congressional oversight, especially on whistleblower matters. For example, four months ago I sent a letter to the FBI requesting its training materials on the Insider Threat Program. This program was announced by the Obama Administration in October 2011. It was intended to train federal employees to watch out for insider threats among their colleagues. Public news reports indicated that this program might not do enough to distinguish between true insider threats and legitimate whistleblowers. I relayed these concerns in my letter. I also asked for copies of the training materials. I said I wanted to examine whether they adequately distinguished between insider threats and whistleblowers.
In response, an FBI legislative affairs official told my staff that a briefing might be the best way to answer my questions. It was scheduled for last week. Staff for both Chairman Leahy and I attended, and the FBI brought the head of their Insider Threat Program. Yet the FBI didn’t bring the Insider Threat training materials as we had requested. However, the head of the Insider Threat Program told the staff that there was no need to worry about whistleblower communications. He said whistleblowers had to register in order to be protected, and the Insider Threat Program would know to just avoid those people.
Now I have never heard of whistleblowers being required to “register” in order to be protected. The idea of such a requirement should be pretty alarming to all Americans. Sometimes confidentiality is the best protection a whistleblower has. Unfortunately, neither my staff nor Chairman Leahy’s staff was able to learn more, because only about ten minutes into the briefing, the FBI abruptly walked out. FBI officials simply refused to discuss any whistleblower implications in its Insider Threat Program and left the room. These are clearly not the actions of an agency that is genuinely open to whistleblowers or whistleblower protection.
Grassley raises concerns that the monitoring of intelligence community employees will help the IC track whistleblowers who communicate properly to Congress.
Like the FBI, the intelligence community has to confront the same issue of distinguishing a true insider threat from a legitimate whistleblower. This issue could be impacted by both the House- and Senate-passed versions of the intelligence authorization. Both include language about continuous monitoring of security clearance holders, particularly the House version.
Director of National Intelligence James Clapper seems to have talked about such procedures when he appeared before the Senate Armed Services Committee on February 11, 2014. In his testimony, he said:
We are going to proliferate deployment of auditing and monitoring capabilities to enhance our insider threat detection. We’re going to need to change our security clearance process to a system of continuous evaluation. . . . What we need is . . . a system of continuous evaluation, where . . . we have a way of monitoring their behavior, both their electronic behavior on the job as well as off the job, to see if there is a potential clearance issue. . . .
Director Clapper’s testimony gives me major pause. It sounds as though this type of monitoring would likely capture the activity of whistleblowers communicating with Congress.
Imagine a McCain Committee as the inheritor of the tradition of Frank Church and Otis Pike.
(Yes, I did that to make bmaz’ head explode.)
Only, McCain proposes to investigate not just whether NSA has engaged in things it was not authorized to do. But also to investigate Snowden’s leaks themselves and the potential role of contractors in making leaks more likely.
All that said, I might be excited about McCain’s proposal to review the dragnet, as described:
(3) The nature and scope of National Security Agency intelligence-collection programs, operations, and activities, including intelligence-collection programs affecting Americans, that were the subject matter of the unauthorized disclosure, including–
(A) the extent of domestic surveillance authorized by law;
(B) the legal authority that served as the basis for the National Security Agency intelligence-collection programs, operations, and activities that are the subject matter of those disclosures;
(C) the extent to which such programs, operations, and activities that were the subject matter of such unauthorized disclosures may have gone beyond what was authorized by law or permitted under the Constitution of the United States;
(D) the extent and sufficiency of oversight of such programs, operations, and activities by Congress and the Executive Branch; and
(E) the need for greater transparency and more effective congressional oversight of intelligence community activities.
There’s just one problem with McCain’s proposal.
Here’s the list of the people who would be on the Committee (he provides titles, I’m providing names):
There are a number of very big NSA defenders on this list — in addition to DiFi and Saxby, both Jello Jay and Coburn are Intel Committee members who have never questioned the dragnet (indeed, Coburn has called for getting rid of the controls on the phone dragnet!). Chuck Grassley, too, has generally been supportive of the dragnet in SJC hearings on the subject. Most of the rest are simply not the caliber of people who might critically assess the dragnet much less show real interest in Americans’ privacy. Only Carl Levin and Pat Leahy, alone among the 12 named members, have been explicitly skeptical of the dragnet at all.
McCain proposes a Select Committee to investigate the dragnet. And he proposes to fill it with people who are really happy with the dragnet as it currently exists.
Update: Just to give a sense of how terrible this make-up for a Select Committee is, compare it with the bipartisan list of 26 Senators who asked James Clapper for more information on other uses of Section 215 last June. Just one Senator from that list — Pat Leahy — would be on McCain’s committee.
Let’s take the narrative the Federal Government wants to tell us about the Boston Marathon attack.
Both FBI and CIA got tips from Russia in early- and mid-2011 implicating Tamerlan Tsarnaev in extremism which FBI, which appropriately has jurisdiction, investigated and entered into the relevant databases accessible to Joint Terrorism Task Force partners.
Later that year, the government alleges (based on the word of a guy they killed immediately thereafter), Tamerlan and Ibragim Todashev — and possibly Tamerlan’s brother Dzhokhar — knifed three friends and associates to death on 9/11 while they waited for pizza from a place the brothers may have once worked; while several of the people on both sides of that killing were involved in selling drugs, the presumed motive for that killing (especially given the date) pertains to Islamic extremism, not a drug and money dispute, in spite of or perhaps because of the pot and money left at the scene. After the killing, Tamerlan disappeared from the scene in Cambridge and was never interviewed by the cops. Senate Intelligence Committee members allege Russia passed on another warning about Tamerlan after October 2011, though the FBI insists it kept asking for more information to no avail.
The next year, Tamerlan left for Russia and Chechnya and Dagestan, but the Homeland Security dragnet missed him because Aeroflot misspelled his name (an issue that contributed to their missing the UndieBomb, too; Russia’s original tip to the FBI had gotten his birthdate wrong). While in Russia, Tamerlan met a bunch of Chechen extremists, several of whom were killed shortly after he met them. Then, Tamerlan returned to Boston, and he and his brother made some bombs out of pressure cookers and fireworks in his Cambridge flat (testimony of their cab driver notwithstanding), and then set them off near the finish line of the Boston Marathon, killing 3 and maiming hundreds.
In spite of the thousands of videos of the event, FBI’s prior investigation, and immigration records on the brothers including pictures, the government’s facial recognition software proved unable to find them (in spite of claims “FBI” officials were asking around Cambridge already), so the government released their pictures and set off a manhunt that resulted in Tamerlan’s death and the arrest of Dzhokhar.
That’s the story, right?
Two weeks after the attack, James Clapper tasked the Intelligence Community Inspector General, Charles McCullough, with investigating the attack to see if it could have been prevented (note, after the 2009 UndieBomb attack, the Senate Intelligence Committee conducted such an investigation but I’ve heard no peep of them doing so here). Also involved in that investigation are DOJ, DHS, and CIA’s IG, but not NSA’s IG, in spite of the fact that the Russians, at least, reportedly intercepted international texts implicating Tamerlan in planning jihad (though there’s no reason to believe the non-US side of those texts — a family member of the brothers’ mother — would have been a known CT target). (Note that, even as McCullough has been conducting this investigation, which ultimately involves information that has been leaked to the press, James Clapper has him conducting investigations into unauthorized leaks — does anyone else see the huge conflict here???)
Back on September 19 (perhaps not coincidentally the day after Ibragim Todashev’s friend Ashurmamad Miraliev was arrested in FL and questioned for 6 hours without a lawyer), McCullough wrote Congress to tell them that because “information relevant to the review is still being provided to the review team,” the review would be indefinitely delayed.
According to the BoGlo, McCullough is offering a new excuse for further delay: the shutdown.
Officials said the shutdown has hampered various agencies’ ability to conduct interviews, undertake research, or pay support personnel who are responsible for reviewing the operations of the government’s terrorism databases before the Marathon attack and determining whether information on the bombing suspects was properly handled.
Last month congressional oversight communities were informed that while officials were “working diligently” to complete the review, the process of interviewing counter-terrorism officials and reviewing computer files had turned out to be more challenging than expected. McCullough, the intelligence community’s inspector general, said at the time that “information relevant to the review is still being provided to the review teams.”
A senior Senate staffer, who was not authorized to speak publicly, said briefings recently scheduled for intelligence officials to brief key congressional committees on the progress of the review were canceled.
So here we are over 6 months after the attack, and an inquiry purportedly reviewing whether our CT information sharing (led by the National Counterterrorism Center, which reports to Clapper, to whom McCullough also reports as a non-independent IG) did what it was supposed to, is still having trouble reviewing the actual databases (!?!?), ostensibly because they had to furlough the support people doing that rather than allow them to figure out how to fix problems to prevent the next terrorist attack. (Remember, James Clapper testified he had furloughed 70% of civilian IC staff, to the shock of Chuck Grassley and others.)
Perhaps that’s the problem. Perhaps it is the case that in 6 months time, IC support personnel had not yet been able to access and assess the database counterterrorism professionals are expected to monitor and respond to almost instantaneously. If that is the case, it, by itself, ought to be huge news.
Or perhaps there’s something about the Waltham investigation that has made it newly embarrassing that warnings before and — if blathery Senators are to be believed — after the murders didn’t focus more attention on Tamerlan Tsarnaev.
Chuck Grassley just released a summary of violations of NSA authority he requested back in August.
The data is pretty meaningless. As I have shown, NSA’s own internal reporting shows about 9% (and up to 20% in some categories) of its violations are “due diligence” violations, which are violations of rules that an analyst knows (human error, intelligence error, and training are treated as distinct violations). If today’s hearing was any indication, the Senate Intelligence Committee seems to have no understanding that 9% of all violations are willful violations of rules.
All that said, of the 12 incidents the NSA reported (there are 3 incidents still under investigation), fully half appear to be committed by members of different agencies (though one of those was a military person reported to NSA). That’s a lot of other agency personnel abusing SIGINT authorities they’re granted access to.
And note, DOJ has never prosecuted any of these. In just about all cases where DOJ gets a referral, the person resigns before being charged. The UCMJ does better — DOD has punished two people.
The Hill reports that the Senate Judiciary Committee will get to read the Office of Legal Counsel memos authorizing the targeting of Anwar al-Awlaki tomorrow.
Committee Chairman Patrick Leahy (D-Vt.) told The Hill that he and other members of the panel will be given access to the detailed Office of Legal Counsel (OLC) memos, which lay out the administration’s legal support for targeting U.S. citizens who are suspected of being terrorists, pose an “imminent threat” to U.S. national security and for whom capture is not an option.
On Tuesday Leahy said the administration was planning to make documents available for committee members to read on Capitol Hill on Wednesday.
Sen. Chuck Grassley (R-Iowa), the panel’s ranking member, is also planning to attend, according to his spokeswoman.
It appears that this will be one of those quickie reviews, where Senators are not allowed to share with lawyers who will conduct more in-depth analysis.
Also no word on whether the House Judiciary Committee will laso get to glimpse these memos.
They really don’t want people to really scrutinize these memos, I guess.
As Ryan Reilly demonstrated a few weeks ago, the Office of Legal Counsel refuses to release a list of all the memos they’ve written in the last four years.
In response to [a FOIA list for all OLC opinions written during the Obama Administration] the OLC sent a letter dated Feb. 20 and enclosed five mostly redacted lists from 2009, 2010, 2011, 2012 and the first month-and-a-half of 2013.
What’s more interesting is what wasn’t included: The office stated that it was withholding, in full, 11 lists of classified OLC opinions. Because the length of each list is unknown, it’s unclear how many classified opinions the OLC has issued during the Obama administration.
On the unclassified side, the OLC issued 28 legal memos in 2009, 19 in 2010, 12 in 2011, 16 in 2012 and one so far in 2013, for a total of 76 unclassified opinions.
The titles of many OLC opinions were fully redacted in the lists provided, with a Justice Department official writing that the titles were “protected by the deliberative process, attorney-client, and/or attorney work-product privileges.” The names of the lawyers who wrote a number of opinions — including the memo on the president’s use of recess appointments during the Senate’s pro forma sessions — were also blacked out because their disclosure would “constitute a clearly unwarranted invasion of personal privacy,” the official wrote.
In a hearing on Sunshine week today, Patrick Leahy asked DOJ’s Office of Information Policy, Melanie Pustay whether they could get a list of all OLC opinions still in action. Pustay dodged the answer, saying it wasn’t her responsibility. Leahy complained that the Attorney General and President had previously dodged the responsibility themselves. He suggested he might subpoena the list, suggesting Chuck Grassley would be in support, too. Grassley not only endorsed Leahy’s inclusion of him in this subpoena threat, but he said “We’ve been pussy-footing too long on this.”
Yes indeed. Time to stop pussy-footing on understanding what secret interpretations of laws the government has adopted.
I noted earlier that Eric Holder suggested that a law prohibiting the use of drones against non-combatant Americans in the US would be unconstitutional.
Grassley: Do you believe Congress has the Constitutional authority to pass a law prohibiting the President’s authority to use drone aircraft to use lethal force against Americans on US soil and if not, why not?
Holder: I’m not sure that such a bill would be constitutional. It might run contrary to the Article II powers that the President has.
That’s interesting background for a move Rand Paul tried at roughly hour 8 of his filibuster.
He proposed a non-binding resolution saying precisely what Grassley had laid out 10 hour earlier, voicing the position of the Senate to be opposed to the “use of drones to target Americans on American soil who pose no imminent threat.”
As I understand it, the resolution was independent from the Brennan nomination (so it would not disrupt that, aside from a vote).
But — as just one of two Democrats to show up during this filibuster (Ron Wyden showed up in support during the 3:00 hour) — Dick Durbin showed up to oppose Paul’s unanimous consent to call for that resolution.
Durbin promised his subcommittee of the Senate Judiciary Committee would hold a hearing on drones. Nevertheless, he objected to Paul’s resolution. He suggested more Constitutional review of this simple measure was needed.
A leader of the Democratic party (and the President’s fellow Chicagoan) opposed a non-binding resolution prohibiting the use of drones in the US against non-combatants out of Constitutional concerns.
I’ve got a lot of theories why that might be. A belief this is all about making trouble for another nomination. insistence that nothing limit potential Article II claims.
But I keep thinking about the fact that there’s a wrongful death suit out there, with state secrets as the fallback claim crumbling with the public discussion.
As I lay out in this Salon post, Eric Holder told Chuck Grassley that Article II of the Constitution would make probably any attempt to limit the use of lethal force in the US unconstitutional.
Chuck Grassley, R-Iowa, asked Holder whether Congress could prohibit the targeted killing of Americans in America. “Do you believe Congress can pass a law prohibiting POTUS to use lethal force on U.S. soil?” he bluntly asked, explaining he meant the prohibition would apply only where a person did not present an imminent threat.
“I’m not sure that such a bill would be constitutional,” the attorney general responded. “It might run contrary to the Article II powers that the president has.” Article II is the section of the Constitution that lays out the president’s authority as commander in chief of the military.
Holder went on to embrace a view of the AUMF (as he has before) that ignores Congress’ refusal in 2001 to authorize the use of military force in the US.
Holder embraced a view of the 2001 Authorization to Use Military Force that completely ignores the legislative history of the law that authorized the war against al-Qaida. “We didn’t exempt the homeland in the AUMF did we?” Lindsey Graham, R-S.C., asked the attorney general, in a question setting up his support for presidential use of lethal force in the U.S. “No,” Holder replied, “I don’t think we did.”
The attorney general may believe Congress authorized the use of lethal force in the U.S. with the AUMF, but former Senate Majority Leader Tom Daschle has made it clear that Congress refused to authorize military force in the U.S. “Literally minutes before the Senate cast its vote,” Daschle revealed in a 2005 Op-Ed that described the legislative process behind the AUMF, “the [George Bush] administration sought to add the words ‘in the United States’” into the authorization. Such a change, Daschle continued, “would have given the president broad authority to exercise expansive powers not just overseas — where we all understood he wanted authority to act — but right here in the United States, potentially against American citizens.”
Back in 2001, Congress very specifically refused to authorize lethal force against Americans.
It has long been clear that the Administration believed — as John Yoo did — that nothing can limit their authority in the war against terror. But these were rather more blunt admission than normal.