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April 6 2013





Many furloughs will be rolled back

March 31, 2013


The Defense Department and at least a handful of other agencies are rolling back or rethinking plans for civilian employee furloughs in the wake of a newly passed spending bill for the rest of fiscal 2013.

DoD, for example, is cutting the number of furlough days for hundreds of thousands of workers from 22 days to 14 days through September, Defense Secretary Chuck Hagel announced last week.

At the Justice Department, which had begun telling employees in February that they could face up to 14 days of unpaid time off, Attorney General Eric Holder said last week that a final decision will be postponed until mid-April.

And the Border Patrol has decided not to pursue furloughs, said Shawn Moran, vice president of the National Border Patrol Council, the union that represents agents.

All of those steps came after President Obama signed the fiscal 2013 spending measure approved by Congress late last month. The legislation, which replaced a continuing resolution that expired March 27, locks in $85 billion in across-the-board spending cuts but also gives select agencies more flexibility in how they can spend the money they have left.

Chief among those agencies is DoD, which gets a transfer of more than $10 billion into the operations and maintenance account that pays civilian salaries. Furlough notices had been set to go out April 5. Now, civilian employees will be told in May that they must take “up to 112 hours or 14 days” off during the final 14 weeks of the fiscal year from June through September, according to a senior DoD official speaking on condition of anonymity.

“It’s good news from where we were two weeks ago,” Hagel said at a Pentagon news briefing.

But some union leaders question why any furloughs are still needed. By Hagel’s count, furloughs will save about $2.5 billion, or roughly one-quarter of the money moved into the O&M account.

Pentagon leaders “have always had the flexibility to impose budget cuts from sequestration in any way they chose,” J. David Cox, president of the American Federation of Government Employees, said in a statement. While cutting the number of days off “shows that they’re listening,” he added, “they still haven’t gotten the whole message.”

Although the reduction is a good start, the furloughs will still impose a significant financial hit, especially for workers in lower pay grades who make $30,000 to $40,000 a year, said William Dougan, president of the National Federation of Federal Employees.

“There are a lot of employees in the federal government that live paycheck to paycheck,” he said.

Although some 750,000 DoD civilians are potentially subject to furloughs, senior leaders are still debating how many to exempt. “This is a difficult and complicated decision, and the leadership wants to consider all of the primary and secondary effects,” the Defense official said.

Some unofficial estimates suggest that at least 10 percent of the overall workforce will be spared, including about 5 percent of Navy and Marine Corps civilians and 24 percent of their Army counterparts. When furloughs start in June, local managers will likely decide whether individual workers should either take one day off per week or be allowed to cluster their required time off into larger blocks, the official said.

Also getting a break are some 8,400 Agriculture Department meat inspectors. They had been facing furloughs of up to 11 days, but lawmakers — partly in response to lobbying from the meatpacking industry — redirected $55 million to to keep inspectors on the job full-time.

The $85 billion in cuts, officially known as a sequester, began taking effect March 1. They were required under the 2011 Budget Control Act because lawmakers and the Obama administration could not agree on a way to reduce future deficits by $1.2 trillion through 2021. Absent any changes, the budget act mandates another eight years of sequesters.

While lawmakers from both parties have decried the cuts as “dumb” and “devastating,” they have so far been unable to devise a way out. The challenge looms largest at the Defense Department, which is having to absorb a $41 billion cut, or about 8 percent of its base budget this year.

“We are in triage mode in terms of getting through this year,” Pentagon Comptroller Robert Hale said in a webinar last week hosted by the Association of Government Accountants. Besides employee furloughs, he said, the department is laying off temporary workers, ending almost all maintenance at its bases and reviewing and delaying contracts, Hale said. “This is one of the most distasteful tasks that I have had to do in my four years” as comptroller, he said.

For many federal programs, the newly passed spending bill will provide little, if any, relief because it freezes their funding at last year’s levels, minus a 5 percent sequester-related cut.

The Environmental Protection Agency, for example, has shown no sign of reconsidering plans for up to 13 furlough days, said Chuck Orzehoskie, president of the AFGE council that represents 10,000 EPA employees. The Federal Aviation Administration is scheduled to begin furloughs of one day per pay period for all employees on April 21, Doug Church, spokesman for the National Air Traffic Controllers Association, said in an email.

Although the Border Patrol has told the union it is canceling planned furloughs, it is still set to eliminate administratively uncontrollable overtime, Moran said. That move will take a much larger bite out of agents’ pay than furloughs, he said.

At Customs and Border Protection, the Border Patrol’s parent agency, spokeswoman Jenny Burke would not confirm any specific steps being taken in response to the spending bill’s passage. CBP officials are “developing a plan to implement this budget in a way that minimizes the impact on operations and our workforce,” Burke said in a statement.

The sequester “is a horrible way to manage government; that’s the bottom line,” said John Palguta, vice president for policy at the Partnership for Public Service. While the repercussions so far may not have registered with the general public, “the impact will become more and more noticeable” the longer the sequester lasts, Palguta said.

Even before the bill’s passage, Holder made an emergency transfer of $150 million to head off daily furloughs of almost 3,600 correctional officers at federal prisons around the country. “This action was necessary to protect the life and safety of our staff, inmates and the public,” he said in the March 28 memo announcing the postponement of a furlough decision for other Justice employees until mid-April.

Holder attributed the delay to the need to assess the impact of the recent budget changes as Justice Department managers work on options “to mitigate the harshest negative effects this fiscal year.”

Among those waiting for an answer is Konrad Motyka, president of the FBI Agents Association. Because lawmakers set aside some $8.2 billion for FBI salaries and expenses in the spending bill, Motyka was hopeful that the bureau’s workforce could avoid furloughs.

“It’s fair to say that the membership is very concerned and watching with apprehension, as is true across the whole federal government,” Motyka said. “Will there be an operational impact? Absolutely.”

Staff writer Andrew Tilghman contributed to this story.


Pentagon Seeks Solutions To UAV Bandwidth Crunch


March 31, 2013



WASHINGTON — The U.S. Defense Department is moving forward with what Pentagon insiders and corporate executives hope will be a solution to a crunch on the bandwidth needed to operate UAVs.

Speaking to a group of satellite company executives March 18, Frank Kendall, defense undersecretary for acquisition, said he is setting a 90-day window for commentary before he and Chief Information Officer Teri Takai begin to develop policy.

“We’re teaming with [the] CIO to come up with a business framework for a smarter way to buy commercial satellite communications,” Charles Beames, principal director for space and intelligence at the DoD office of acquisition, technology and logistics, told Defense News the next day. “[Kendall] gave us 90 days to come back with the answer.

“It’s a big challenge,” Beames added. “It’s an important thing that has to be taken on, and we have an undersecretary that’s excited about doing it.”

Beames was speaking after moderating a panel on UAV bandwidth issues as part of the SATELLITE 2013 Conference and Exhibition in Washington.

In his opening comments on the panel, he said DoD is “getting lots of feedback from industry. We have teams forming up that are going to look at the various aspects of that, and we have 90 days to come back with … how this is going to work.

“What we ultimately want to do is get to a long-term vision, a more seamless architecture in terms of how we provision this,” Beames said in his comments. The goal is to ensure “we have a viable plan for the surge activities. We don’t know what they are, but we know they’ll happen.”

Beames expects the result to be a mix of approaches that best fit the mission at hand. “There will be aspects of this where we buy, there will be aspects of this where we long-term lease, there will be aspects of this where we spot lease,” he said.

With the growing use of UAVs, DoD has frequently found itself short on the bandwidth needed for missions.

Military satellites such as the Defense Satellite Communications System and Milstar do not have the capacity to handle the massive growth of UAV use. In those situations, they buy bandwidth from commercial satellite providers. As much as 90 percent of UAV bandwidth being used in Iraq and Afghanistan was being purchased from commercial satellite companies, according to industry figures.

It’s an expensive process, and one industry executives have been trying to change for years. Rather than pay premiums case by case, they argue, the government should establish a baseline for required UAV bandwidth and enter long-term agreements for the use. It would lower the cost for taxpayers while providing a consistent source of revenue for the providers.


The “pivot” to the Pacific, along with heavier use of UAVs in Africa, is likely to exacerbate the bandwidth crunch. There was significant satellite coverage over the Middle East when the military began using large numbers of UAVs in the region; the same is not true for large chunks of Africa or the Pacific Ocean, where drones would likely be operating. Having a baseline of bandwidth available in those regions could be crucial for future UAV operations.

Philip Harlow, president and CEO of commercial satellite operator XTAR, said the Pentagon knows “they need to be smarter, they have some recommendations, and how do they move it to the next step.”

Harlow was one of five industry executives who penned a letter this year to Kendall in response to the Better Buying Power 2.0 initiative. The letter included seven suggestions for how the Pentagon and commercial satellite operators could work together to drive down costs.

In addition to a more permanent bandwidth baseline, the letter called for an increase in the use of hosted payloads — modules attached to commercial satellites that operate independently of the main system — and the creation of a single office to handle military and commercial satellite operations. Both of those things were addressed by Beames’ panel during the conference as key issues that need to be sorted out.

The good news, as Harlow sees it, is that the Pentagon has reacted positively to the letter, with Kendall’s plan for a 90-day period opening dialogue on the issue. And the budget situation may have actually accelerated DoD’s interest in finding a permanent architecture with its commercial partners.

“Without sequestration, I think it may have moved more slowly,” Harlow said. “In the last 10 years, this is the first time DoD has had to ask for more money than they’re probably going to get. Up to now, it’s ‘you’re at war; let’s write a check.’ I think budget pressures are making it move a little faster.”

Although pleased with Kendall’s plan, Harlow warns that the Pentagon reacts “very cautiously” when it feels pressure to act quickly. “It’s a little bit of a double-edged sword,” he said. “We’d like them to move faster, but we don’t want them to move so fast that they feel totally uncomfortable.”

US announces stricter gasoline standards

by Staff Writers

Washington (AFP) March 29, 2013


US regulators announced on Friday stricter rules on vehicle emissions and a requirement for low-sulfur gasoline as part of President Barack Obama’s efforts to reduce pollution.

The Environmental Protection Agency’s proposal would require a 60 percent reduction in sulfur in gasoline as well as stricter tailpipe emissions standards for cars and light trucks.

“Today’s proposal will enable the greatest pollution reductions at the lowest cost,” the EPA said in a statement.

The proposed standards will reduce gasoline sulfur levels by more than 60 percent — down to 10 parts per million (ppm) in 2017, the EPA said.


The Obama administration has said the proposal would result in a one cent per gallon cost increase at the gas pump and would cost about $130 per car in 2025.

But critics say the price to fuel vehicles will be higher, with industry estimates ranging from six to nine cents more per gallon.

“With $4 dollar a gallon gas the norm in many parts of the country, we cannot afford policies that knowingly raise gas prices,” said House Energy and Commerce Committee Chairman Fred Upton, a Republican from Michigan.

High sulfur content in gasoline creates more pollutants and adds to smog and soot in the air.

Supporters of the new rules hailed the move as a crucial step in Obama’s second term as president, and the equivalent of taking more than 33 million cars off US roads.

“We know of no other air pollution control strategy that can achieve such substantial, cost-effective and immediate emission reductions,” said S. William Becker, executive director of the National Association of Clean Air Agencies.

Lawmakers who opposed the release of the proposal, known as Tier 3, said it would raise costs for consumers in an already struggling US economy.

“The EPA continues to disregard the facts and potential economic costs of Tier 3, when consumers and our economy can’t afford gas prices going up even further,” said Louisiana Republican Senator David Vitter.

“This move signals a frightening flood of new rules.”

The proposal now faces a period of public comment before it can be finalized.


Industry watchers ponder future of drones at local conference

Ventura County Star, CA

By Carol Lawrence

Posted March 26, 2013 at 10:24 p.m., updated March 26, 2013 at 10:28 p.m.


Keith Ballenger, an assistant division manager with the Federal Aviation Administration, was among the speakers at Tuesday’s unmanned aircraft systems conference at the Hyatt Westlake Hotel.

Drone manufacturers and users need to be patient while the Federal Aviation Administration goes through the steps to get them safely and properly into the air, an aviation official told industry watchers Tuesday in Thousand Oaks.

Keith Ballenger, an assistant division manger of the Federal Aviation Administration, spoke before an audience of companies that play in one of the nation’s newest technologies — unmanned aircraft systems.

Ballenger’s division handles safety and certifications for the FAA, and that is key to getting unmanned aircraft systems certified and regulated by the federal agency.

Ballenger spoke on the first night of a three-day symposium on drones and their potential for civilian. The event at the Hyatt Westlake Plaza hotel was organized by Assemblyman Jeff Gorell, R-Camarillo, and the American Institute of Aeronautics and Astronautics.

The aviation veteran told the audience what the FAA is up against as it attempts to come up with rules, regulations and ways to evaluate the safety of unmanned aircraft.

“The big quandary within the FAA is: How do we begin to manage that technology?” Ballenger said.

Small unmanned systems, those that weigh less than 50 pounds, are where the FAA will see the bulk of its work, Ballenger said.

The FAA is undergoing what Ballenger called a “huge paradigm shift” as it tries to integrate unmanned aircraft systems into the airspace over the nation used by most civilian aircraft.

Keith Ballenger: “The big quandary within the FAA is: How do we begin to manage that technology?”

Currently, drones fly because they are “accommodated”, but they are not integrated into the national airspace, he said.

“Ultimately, we will have to change the way we do business and the way we provide oversight,” Ballenger said.

Staff and operating reductions will affect the ability to roll out new types of projects, he said.

Ballenger gave some tips and warnings to those in the audience on how to navigate through the process of authorizing their unmanned aircraft.

Safety management systems must be looked at early in the manufacturing process so safety is assured throughout the life of the systems, he said.

There are 7,000 manned aircraft at any moment flying in the air over the nation, he said, and the FAA is tasked with figuring out how the unmanned aircraft systems are going to safely fly amid them.

“So integrating the UAS into this system is a very, very difficult problem for us to grasp,” Ballenger said.

Drone manufacturers also face the pending development of operations rules the FAA eventually will undertake, Ballenger said.

Those rules will be frustrating and very expensive to follow and will take time to follow, he said.

Another key to getting the process of getting drones into the air will be the six sites that the FAA chooses for testing them, Ballenger said.


There are 50 applications from 37 states, he said. Ventura County is one, and will compete with at least one other site in California.

The main objective of the test sites is to work out the problems that the FAA foresees with unmanned aircraft systems, he said.

Getting drones approved for flight will entail two components, Ballenger said.

One is the flight standards review, which deals with construction, safety and the operational elements of the systems. Second is the air traffic review, which involves learning how to bring the unmanned systems safely into the air space with piloted aircraft.

Yet perhaps the greatest challenge, Ballenger said, is that each region tasked with approving unmanned aircraft systems has one inspector to help manufacturers with their requests.

“This is an area that’s got to be a huge growth area with the FAA,” he said, to handle those requests and the anticipated growth.

Hadir Alawami, who handles economic development for Thousand Oaks, was at the conference because the city lacks an aerospace industry.

“I’m hoping for some new companies because of this,” Alawami said.

The symposium is a perfect environment for Neuro Logic Systems Inc., a Camarillo manufacturer of visual displays for unmanned vehicles that operate in rugged land and sea environments, said Gary Paz, director of business development and marketing.

His company sells to prime contractors, such as Raytheon and General Dynamics, that supply directly to the federal government. Should Ventura County be designated an FAA test site, Neuro Logic would be impacted “exponentially,” Paz said.

“Because prime contractors would have an arena to test right here in Camarillo,” Paz said, “and it would open a door to civilian applications.”—uavconffaa/?goback=%2Egde_941207_member_227007557#ixzz2PE2SHXBr



Arizona aerospace firms seek FAA approval to test unmanned aircraft

1 April 2013

By Press

By: Steve Shadley

Arizona is among 37 states seeking federal approval for the testing of unmanned aircraft for commercial purposes. The Federal Aviation Adminstration will issue permits for drone operators in six states.

Drones already are used by the U.S. Army at Fort Huachuca near Tucson and to monitor security at the U.S.-Mexico border.

But, the Arizona Commerce Authority and some aerospace companies want permission to begin testing drones for business and civilian operations in other parts of the state. Brian Wimmer is president of the Thompson-Wimmer Defense and Space Company in Sierra Vista and said Ariz. has a good chance of winning FAA approval.

“This really puts Arizona on the cutting edge of having the first crack at testing new systems and solutions provided by all kinds of aviation companies,” Wimmer said.

Wimmer said drones can be used to transport freight, shoot movies and fight wildfires, but the director of the Arizona American Civil Liberities Union said they are concerned drones could be used to collect people’s private information.

The FAA will announce which states get certification to test drones by the end of the year.

Radar to Allow UAS to Fly in National Air Space

Jul 05, 2012| by C. Todd Lopez


WASHINGTON — By March 2014, the MQ-1C Gray Eagle, an Army unmanned aerial system, or UAS, will be able to train in the same airspace as the Boeing 747, with the help of the Army-developed Ground Based Sense and Avoid system.

The Army recently concluded a two-week demonstration of the Ground Based Sense and Avoid system, or GBSAA, at Dugway Proving Ground, Utah. During the demonstration, the Army put the system through multiple training “vignettes” that validated both the design and functionality of the system.

“We are ready to begin the certification process in order to be fielding in March 2014, for the Gray Eagle locations,” said Viva Austin, product director for the Army’s Unmanned Systems Airspace Integration.

The five locations for Gray Eagle basing and training include Fort Hood, Texas; Fort Riley, Kan.; Fort Stewart, Ga.; Fort Campbell, Ky.; and Fort Bragg, N.C. It’s expected the first system will field in March 2014 at Fort Hood. About three months later, the system should field to Fort Riley. All five sites should be equipped with the GBSAA system by 2015, officials said.

The GBSAA is a radar and warning system designed to allow Soldiers to fly unmanned aerial systems, like the Gray Eagle, inside the National Air Space, while still meeting Federal Aviation Administration regulations. The system monitors location and altitude of the UAS and other aircraft, detects possible collisions, and makes recommendations to UAS operators on how to avoid those collisions.

As unmanned aerial systems and the Soldiers who fly them return home from theater, the Army needs a way to keep those UAS operators trained for the next battle, and they need to do that training inside the United States and inside the National Air Space, or NAS.

The Federal Aviation Administration, or FAA, requires a pilot be able to “see and avoid” other aircraft flying in the same airspace. But a UAS has no pilot onboard. The Army can get around that by meeting other requirements, however. The Army can fly a UAS in the NAS with a chase aircraft following the UAS, for instance. It is also possible to fly in the NAS if a trained observer is watching the UAS. But the observer must be within one mile and 3,000 feet of the vehicle.

Additionally, the Army can’t fly the UAS in NAS at night.

The GBSAA was developed as an “alternate means of compliance” for the FAA’s “see and avoid” requirement. The system senses other traffic in the area, using a 3D radar system, and uses algorithms to determine if there is danger of collision and how to avoid that danger. That information is provided to the UAS operator.

When the FAA approves the system for use, the Army will be able to train UAS pilots any time of day.

“It’s a significant impact [on training],” said Austin. “It does two things. One is it allows us to not need to put chase planes out to follow the aircraft over. It allows us to not have ground observers standing out there, trying to separate traffic. And it allows us to fly through the night hours, it gives us 24-hour operations, GBSAA allows that and opens it up.”

The recent demonstration of the GBSAA involved seven vignettes at Dugway Proving Ground, involving both live and synthetic UAVs, as well as synthetic “intruders.”

The first three vignettes used real UAS. In vignettes 1 and 2, a real Hunter UAS flew at Dougway against synthetic “intruders” in their airspace. The difference between the two vignettes was the version of the GBSAA used. In both scenarios, the system performed without endangering the mission, but on the second run, the Army Phase 2 Block 0 system’s improved algorithms indicated an earlier, safer departure time between the two intruders.


Vignette 3 pitted two live Shadow UAS against each other. One of the Shadows served as the intruder aircraft, the other was guided by the GBSAA. The operator of that aircraft was warned at an appropriate time and was able to follow the recommended maneuver to avoid the other aircraft.

The next three vignettes showed the adaptability of the Phase 2 Block 0 algorithms. They were flown using synthetic UAS, through the X-Plane system. Each of the three vignettes used replicated airspace over different military installations, including Marine Corps Air Station, Cherry Point, N.C.; Fort Stewart, Ga.; and Fort Drum, N.Y.

Finally, in vignette 7, the GBSAA system was demonstrated again using a synthetic UAS, but was flown against live aviation traffic data around nearby Salt Lake City, and also against recorded air traffic data from Boston’s Logan Airport.

“In both cases we were extremely successful and (it) was even more than we had hoped for,” Austin said.

Austin said it was difficult to get the GBSAA system into a tough situation that it couldn’t handle.

“The hardest part of that was actually trying to get into a situation where the maneuver algorithm was really tested, getting into a red condition,” Austin said. “Big sky theory kind of held true, we almost felt like we were trying to chase people down at that point because air traffic control keeps people separated so well, it was kind of hard to put yourself in a really stressing situation and test those algorithms out really well. It was very safe and we demonstrated that the system and the test bed was really successful.”

Austin did say one thing learned about the GBSAA is that the algorithm used to safely move UAS through airspace does not always do things conventionally, as pilots would do them. Austin said that they will try to work more standard ways into the system, if they can do so without breaking the algorithm.


Army’s ‘sense and avoid’ radar will let drones fly in domestic airspace

By Kevin McCaney

Jul 10, 2012


The Army has completed a two-week trial of its new “sense and avoid” technology for unmanned aerial systems and says UASes could be sharing domestic airspace with piloted craft by March 2014.

The Ground Based Sense and Avoid (GBSAA) system was put through a series of training “vignettes” at Dugway Proving Ground, Utah, and successfully steered clear of other aircraft in both live and synthetic (programmed) environments, the Army said.

“We are ready to begin the certification process” with the Federal Aviation Administration for the system, said Viva Austin, product director for the Army’s Unmanned Systems Airspace Integration.

DOD and the FAA have been working together since March on establishing rules to allow drones to perform military training flights in domestic airspace. The GBSAA uses a 3-D radar system to detect other aircraft and software algorithms to identify possible collisions and recommend how to avoid them. It would meet the FAA’s standards, the Army said.


Essentially, the Army uses GBSAA to allow unmanned aircraft to meet the FAA’s “see and avoid” requirements for manned aircraft, which, as the name suggests, means that a pilot must be able to visually identify other aircraft in the same airspace and be able to avoid hitting them.

Until now, that meant having a piloted chase aircraft flying along with the UAS or having a trained observer watching within a distance of about a 1.6 miles. It also meant unmanned craft couldn’t fly at night.

The series of seven vignettes the Army staged tested the system’s algorithms against live and synthetic “intruders.” In one vignette, for instance, two Shadow UAS craft were used against each other, one acting as the intruder, the other under the control of GBSAA. In another vignette, a synthetic UAS was flown against live traffic around Salt Lake City and simulated air traffic from Boston’s Logan Airport.

In every case, the GBSAA-controlled aircraft successfully avoided entanglements with other planes, the Army said.

“The hardest part of that was actually trying to get into a situation where the maneuver algorithm was really tested, getting into a red condition,” Austin said. “Big sky theory kind of held true, we almost felt like we were trying to chase people down at that point because air traffic control keeps people separated so well. It was kind of hard to put yourself in a really stressing situation and test those algorithms out really well. It was very safe, and we demonstrated that the system and the test bed were really successful.”

FAA has yet to approve GBSAA, but the Army expects it to. When that happens, military UASes will be able to fly in National Air Space any time of day or night, the Army said.

The Army said it plans to start with training flights for the MQ-1C Gray Eagle, an extended-range upgrade of the MQ-1 Predator, at five locations: Fort Hood, Texas (which will get the first one in March 2014); Fort Riley, Kan.; Fort Stewart, Ga.; Fort Campbell, Ky.; and Fort Bragg, N.C.

Development of sense-and-avoid systems has been critical to the prospects for using UASes domestically. The Army has been working on it for a while, and GBSAA tracked its first UAS flight in April 2011.

In fact, GBSAA appears to be ahead of schedule. At the AUVSI Unmanned Systems Program Review 2012 conference in Washington, D.C., in March, Army officials said they were hoping to have the system in use domestically by 2015, a year later than now planned.

And if the program proves successful, it’s likely that GBSAA or similar technology would be applied to drones operated by civilian federal agencies, as well as state and local organizations. Many law enforcement agencies are interested in using drones, as are agencies such as NASA and the National Oceanic and Atmospheric Administration.

But a few things might have to be ironed out before domestic UAS flights become widespread. Bills introduced in the House and Senate propose that law enforcement agencies obtain a warrant before using them for surveillance.

A research team from the University of Texas at Austin recently demonstrated that domestic drones, which use unencrypted Global Positioning System signals, can be hijacked via GPS spoofing.



DOD aiming to lift restrictions on unmanned flights in US airspace

By Henry Kenyon

Mar 08, 2012


Unmanned aircraft operations are a major part of the military’s mission in central Asia. But sooner or later, those forces will return to the United States and have to fly in civilian airspace for training and operational purposes.

By 2015, unmanned aerial systems will be operating from government facilities across the country, said Mary Ottman, the Army’s deputy product director of unmanned systems airspace integration, at a recent conference.

Several Defense Department officials spoke at the conference about how DOD is working with the Federal Aviation Administration and other agencies to develop new techniques and technologies to monitor and manage the flight of UAS across the nation. The integration effort is being driven by legislation to better integrate military and civilian unmanned aircraft into the national airspace.

Because the robot aircraft will have to fly in commercial airspace, DOD is working with FAA to develop rules to govern the flights, Ottman said at the AUVSI Unmanned Systems Program Review 2012 conference in Washington, D.C.

An important part of the effort is ongoing work with the Ground-Based Sense-and-Avoid System (GBSAA), designed to help UAS to navigate commercial airspace. Currently, when unmanned aircraft transit commercial airspace, Ottman said, they require an FAA permit and must be tracked by observers on the ground and by manned chase planes. The GBSAA also uses a triple-redundant radar to track an unmanned aircraft in flight.

“The ultimate goal is that an unmanned aerial system can ‘file and fly’ like a manned system,” said Ottman, adding that DOD must work with the FAA to develop regulatory guidance to better manage UAS transits.

The Army-managed GBSAA system successfully tracked its first UAS flight in April 2011. The program is now working on tracking UAS transit between two points. The system will create a “tunnel” through commercial airspace for the UAS to fly through to its training area, Ottman said.


Sense and avoid

Sense-and-avoid technology is another key part of allowing more UAS flights in civilian airspace, according to Joe Sciabica, executive director of the Air Force Research Lab (ARL), who also spoke at the AUVSI conference. The technology consists of automated air and ground monitoring systems such as GBSAA as well as software and sensors installed on robot aircraft that allow them to detect and maneuver to avoid collisions. While UAS are remotely piloted, Sciabica said that automated collision-avoidance systems are necessary.

These capabilities will provide unmanned aircraft with more situational awareness than manned aircraft. “That is critical in the air,” he said.

Besides flight, the movement of UAV platforms on the ground at military and civilian airports need to be worked out. Sense-and-avoid procedures must be understood and laid out for everyone, Sciabica said.

The Army also is working with the FAA on “safe” states that will ultimately allow UAS to maneuver around any civilian aircraft that wanders into training airspace, Ottman said. Work on lateral UAS transit is not restricted to the Army. The Air Force and Marine Corps are also involved in developing these systems, she added.


Full testing of the GBSAA is scheduled to begin sometime from 2013 to 2015 at the Dugway Proving Grounds in Utah, Ottman said. The OSD has funded a testbed platform and MIT Lincoln Labs is developing sense and avoid algorithms. Plans are also underway for a GBSAA demonstration for this summer, she said.

The goal of these tests is to certify and field the system. Each service is working on a part of the sense-and-avoid technology, with the Army the lead for the GBSAA program. But Ottman added that there is a need to coordinate and work on standards to receive FAA certification.

The ARL plans to conduct flight tests later this year on a sense-and-avoid technology that it will transition to its Global Hawk program in 2013, Sciabica said. The future goal for the Air Force is to develop an integrated live and virtual training range. This will allow the service to incorporate UAS platforms into exercises and train both UAS and manned aircraft pilots to operate in this new environment, he said.

There is also increased interest in UAS systems from state governments. Some 22 states are interested in setting up UAS test sites, said Steve Pennington, the Air Force’s director of Bases, Ranges and Airspace, and active executive director of the DOD Policy Board on Federal Aviation.

The government is currently developing criteria for UAS test sites. One of the benefits of the sites would be to provide a testing area for both military and civilian use, he said.


Hagel warns of big squeeze at the Pentagon

March 31, 2013

By Thom Shanker

New York Times



Ending his first month as defense secretary, Chuck Hagel invited six young enlisted personnel for lunch in his private Pentagon office. Without military or civilian aides, Hagel himself took extensive notes as the sergeants and petty officers poured out their concerns about pay, benefits, training and sexual assault — issues that would decide whether they make the military a way of life or just a way station in life.

At the end of the 90-minute session, which was held on Thursday, Hagel, a former enlisted soldier who was wounded twice in Vietnam, surprised them with a promise. “Remember, you always have a friend in the secretary of defense,” one of those present quoted him as saying.

Even so, Hagel did not hide the quiet storm that is gathering, one that will test his empathy with the enlisted ranks as he begins to make tough calls over coming weeks about further shrinking the Pentagon after more than a decade of war and free spending.

Even more, as President Barack Obama — who has placed some of the military’s long-favored weapons programs in his sights — continues to negotiate with Congress over a spending and revenue deal, Pentagon officials acknowledge they are bracing for a protracted period in which they may have to manage even larger budget reductions than anticipated.

“There will be changes, some significant changes,” Hagel warned at a news conference last week. “There’s no way around it.”

Senior military commanders know the meaning of those words from Hagel: the former soldier may have to fire more soldiers and reduce or reject more weapons programs.

Hagel is expected to begin outlining those changes in a major speech this week that will differ in tone and substance from the dire warnings about budget cuts heard before his arrival. The message is that while the leadership hopes to dampen the impact of across-the-board spending cuts, there is a new Pentagon reality, and everyone must deal with it. Hagel, whose acceptance of the need to shrink the Pentagon is in step with Obama’s self-declared strategy to avoid large overseas land wars, will start to outline a rethinking of military policy to fit smaller budgets.

Already, Hagel directed Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, and Ashton B. Carter, the deputy defense secretary, to conduct a sweeping “Strategic Choices and Management Review” due by the end of May.

Their challenge is to trim the Pentagon while also assuring that the military continues to attract high-quality personnel and can maintain American and allied security around the world.

That lesson was made violently obvious on Hagel’s first overseas trip, when he went directly to Afghanistan, rejecting the comfortable stops in allied nations that are usually tacked on to war-zone travels. He chose a consciously understated public demeanor as he kept a grueling schedule that was interrupted by suicide bombings and caustic comments from a complex ally, President Hamid Karzai of Afghanistan. It was only after the trip ended that aides disclosed that Hagel had made a high-stakes gamble: He asked to halt a bilateral session at Karzai’s palace to hold an unscheduled one-on-one meeting with the Afghan president. A contentious problem was the hand-over of a detention facility at Bagram, which for the Afghans had become a touchstone of sovereignty and pride — but for the NATO alliance carried risks of letting dedicated enemies back into the fight.

The detention issue roiled relations between Washington and Kabul for the next weeks, a time in which Hagel and Karzai spoke by phone three times. But only two of those calls have been disclosed, and even those were distilled down to diplomatic pablum.

Although the heavy daily duty of negotiating with the Afghans was carried out by Gen. Joseph F. Dunford Jr., the top NATO commander, and the American ambassador, James B. Cunningham, senior alliance officials now say that it was the secret call between Hagel and Karzai that broke a deadlock that had become less about security than policy and personalities.

Senior Pentagon officials say that Hagel’s public air of understatement during his first days in office — which appeared as caution or even uncertainty — can be attributed less to his bumpy road to confirmation than to the time needed to find his stride.

“I did not know him well before the nomination, and then the things that I had heard about him, well, I was somewhat apprehensive,” said Rep. Howard P. McKeon, R-Calif., who is chairman of the House Armed Services Committee.

The two have spoken several times since, including when their visits to Kabul overlapped.

McKeon said he has come around on Hagel, swayed in part by the defense secretary’s announcement that reversed an Obama administration decision that had canceled an expansion of missile defenses. Hagel instead ordered the Pentagon to spend $1 billion to deploy more interceptors along the Pacific Coast to counter the growing reach of North Korea’s weapons. And Pentagon officials have disclosed that Hagel’s next foreign trip will open with an alliance-building visit to Israel.

“I’m feeling pretty good about where he is heading now,” McKeon said.


European industry flocks to cheap U.S. natural gas

Washington Post

By Michael Birnbaum, Updated: Monday, April 1, 3:42 PM

LUDWIGSHAFEN, Germany — This sprawling chemical plant along the Rhine River has been a jewel of Germany’s powerful manufacturing economy for more than a century. But a widening chasm between energy prices in Europe and the United States has European industry scrambling to make emigration plans.


A natural gas boom in the United States has sent manufacturing costs plummeting, and European companies are setting sail across the Atlantic to stay competitive. U.S. natural gas prices have fallen to a quarter of those in Europe, a gap that has swiftly widened in the past three years as shale gas has taken off. Many companies expect a long-term realignment.

The shift toward investment in the United States is another testament to the far-reaching effects of newly unlocked American energy reserves, made possible by new applications of technology that have lagged in Europe. Energy-intensive industries such as steel and chemicals are particularly affected, because they use natural gas as a raw material and a power source. But many analysts say those industries are simply the vanguard of a broader shift, because the boom has given an advantage to all U.S.-based manufacturing through lower electricity prices.

As billions of dollars pour into the United States, the outflow from Europe is costing jobs and weighing on decisions there about ambitious and expensive green-friendly policies.

“It’s become clear, with the drop in gas and electricity prices in the United States, that we are, at the moment, at a significant disadvantage with our competitors,” said Gordon Moffat, the general director of Eurofer, the main lobby group for European steel manufacturers. “The reality will hit home in Europe as regards climate policy. There will be modifications in order to take better account of our industrial realities.”

The price gap has opened quickly, leaving companies that make investment decisions years in advance scrambling to catch up. As recently as 2007, U.S. natural gas prices were only about 20 percent lower than Europe’s, not enough to fundamentally reshape markets.

But with the tremendous boom in U.S. shale gas production, U.S. prices last year dropped to a quarter of the European price, and most analysts expect American prices will stay low even if they rebound from their rock-bottom levels.

Gas prices in Asia are even higher than in Europe, further channeling investment to the United States. The International Energy Agency forecasts that by 2015, the United States will become the world’s largest gas producer, overtaking Russia, which supplies Europe with most of its natural gas.

“The differentials in the costs are just so big that it’s definitely driving the investment” to the United States, said Will Pearson, an energy analyst at the Eurasia Group, an economic consultancy.

Here in Ludwigshafen, where BASF, the German chemicals giant, operates one of the largest chemical plants in the world, many people see the United States as the land of the future. The company has announced plans for wide-ranging expansion in America, and in October, it started work on a new formic acid plant in Louisiana, where it will manufacture a chemical used to de-ice runways, tan leather and preserve animal feed. Since 2009, BASF has channeled more than $5.7 billion into new North American investments.

Top BASF officials warn that if Europe continues with its current environmental and energy policies, a chain reaction will eventually send more and more production to the United States. As one company after another moves, their suppliers also will be forced to relocate.

“It’s a very slow process, but it’s a continuous one,” said Harald Schwager, the head of BASF’s European operations. “Once a customer of ours decides to build a new factory in the U.S., then this customer will request from us to be close by with our production. And so over time, you see a self-accelerating process, which will move production into the U.S.”

For now, the complex in Ludwigshafen, which is a warren of spaghetti-twisting pipes and chimneys that makes chemicals for everything from diapers to foam to car parts, is expanding slightly. Few of the 38,000 workers at the plant, spread over a site eight times larger than Washington’s Mall, see any immediate threat to their jobs. But nervous union officials see the American expansion as a threat.

“Normally these would be good times right now. But we look into the future, and the prognosis is not so positive,” said Robert Oswald, the head of BASF’s union. “If the energy prices remain so much lower in the United States than here, of course that will endanger jobs.”

The price gap between the United States and Europe may eventually narrow. U.S. demand for natural gas may increase, driving up prices, as more manufacturers build factories to take advantage of the cheaper energy. The Obama administration also is considering proposals to sharply increase natural gas exports, which could raise prices domestically and push them down in Europe and Asia.

The increase in global natural gas supply has pushed prices modestly lower in European contracts with Russia. Europe also is using far more coal, which is cheaper but much dirtier than gas. And there is new pressure to start tapping into Europe’s limited shale gas resources, despite environmental concerns.

But the momentum favors the United States, and a growing number of European manufacturers have announced plans to invest there. One is Austrian steelmaker Voestalpine, which last month announced that it would build an iron -ore processing plant in Texas to take advantage of the low energy prices. The plant will cost $715 million and create 150 jobs. The company aims to almost double its total turnover by 2020, largely through U.S. expansion, and it has largely abandoned making any major new investments in Europe.

“We should not expect that the current production level of European industry will remain the same in the next 10, 20 or 50 years,” Voestalpine chief executive Wolfgang Eder said in an interview. “We will have to downsize industrial facilities in Europe in the long term.”

Royal Dutch Shell announced plans last year to build a multibillion-dollar petrochemical plant in Pennsylvania that will employ several hundred full-time workers, as well as up to 10,000 people during construction.

Some German lawmakers say they want to find a way to balance environmental considerations with economic ones.

“We are suffering from the high energy prices, our companies are affected by it, because there are German companies that are deciding in favor of other locations and do not want to set up their business in Germany,” German Economy Minister Philipp Roesler said at a conference in Munich earlier this year. “The challenge is to promote and expand renewable energies without jeopardizing competitiveness.”


North Korea Vows to Restart Nuclear Facilities

By AP / HYUNG-JIN KIM and FOSTER KLUGApril 02, 2013Add a Comment

(SEOUL, South Korea) — North Korea said Tuesday it will escalate production of nuclear weapons material, including restarting a long-shuttered plutonium reactor, in what outsiders see as Pyongyang’s latest attempt to extract U.S. concessions by raising fears of war.

A spokesman for the North’s General Department of Atomic Energy said scientists will quickly begin work “readjusting and restarting” a uranium enrichment plant and a graphite-moderated, 5-megawatt reactor that could produce a bomb’s worth of plutonium each year. Experts considered the uranium announcement to be a public declaration from Pyongyang that it will make highly enriched uranium that could be used for bomb fuel.

The plutonium reactor began operations in 1986 but was shut down in 2007 as part of international nuclear disarmament talks that have since stalled. It wasn’t immediately clear if North Korea had already begun work to restart facilities at its main Nyongbyon nuclear complex. Experts estimate it could take anywhere from three months to a year to reactivate the reactor.

The announcement will boost concerns in Washington and among its allies about North Korea’s timetable for building a nuclear-tipped missile that can reach the United States, although it is still believed to be years away from developing that technology.

The nuclear vows and a rising tide of threats in recent weeks are seen as efforts by Pyongyang to force disarmament-for-aid talks with Washington and to increase domestic loyalty to young North Korean leader Kim Jong Un by portraying him as a powerful military commander.

Hwang Jihwan, a North Korea expert at the University of Seoul, said the North “is keeping tension and crisis alive to raise stakes ahead of possible future talks with the United States.”

“North Korea is asking the world, ‘What are you going to do about this?’” he said.

The unidentified North Korean atomic spokesman said the measure is meant to resolve the country’s acute electricity shortage but is also for “bolstering up the nuclear armed force both in quality and quantity,” according to a statement carried by the official Korean Central News Agency.

The statement suggests the North will do more to produce highly enriched uranium, which like plutonium can be used to make nuclear weapons. Uranium worries outsiders because the technology needed to make highly enriched uranium bombs is much easier to hide than huge plutonium facilities. North Korea previously insisted that its uranium enrichment was for electricity _ meaning low enriched uranium.

Kim Jin Moo, a North Korea expert at the Korea Institute for Defense Analyses in South Korea, said that by announcing it is “readjusting” all nuclear facilities, including a uranium enrichment plant, North Korea “is blackmailing the international community by suggesting that it will now produce weapons-grade, highly enriched uranium.”

U.N. Secretary-General Ban Ki-moon said Tuesday that North Korea appears to be “on a collision course with the international community.” Speaking in Andorra, the former South Korean foreign minister said the crisis has gone too far and international negotiations are urgently needed.

China, Pyongyang’s only major economic and diplomatic supporter, expressed unusual disappointment with Pyongyang. “We noticed North Korea’s statement, which we think is regrettable,” said Chinese Foreign Ministry spokesman Hong Lei. Seoul also called it “highly regrettable.”

The North’s plutonium reactor generates spent fuel rods laced with plutonium and is the core of Nyongbyon. It was disabled under a 2007 deal made at now-dormant aid-for-disarmament negotiations involving the North, the U.S., South Korea, Japan, China and Russia.

In 2008, North Korea destroyed the cooling tower at Nyongbyon in a show of commitment, but the deal later stalled after North Korea balked at allowing intensive international fact-checking of its past nuclear activities. Pyongyang pulled out of the talks after international condemnation of its long-range rocket test in April 2009.

North Korea “is making it clear that its nuclear arms program is the essence of its national security and that it’s not negotiable,” said Sohn Yong-woo, a professor at the Graduate School of National Defense Strategy of Hannam University in South Korea.

Pyongyang conducted its third nuclear test in February, prompting a new round of U.N. sanctions that have infuriated its leaders. North Korea has since declared that the armistice ending the Korean War in 1953 is void, shut down key military phone and fax hotlines with Seoul, threatened to launch nuclear and rocket strikes on the U.S. mainland and its allies and, most recently, declared at a high-level government assembly that making nuclear arms and a stronger economy are the nation’s top priorities.


The Korean Peninsula is technically is a state of war because a truce, not a peace treaty, ended the Korean War. The United States stations 28,500 troops in South Korea as a deterrent to North Korea.

Washington has said it takes the threats seriously, though White House press secretary Jay Carney said Monday the U.S. has not detected any military mobilization or repositioning of forces from Pyongyang.

The North’s rising rhetoric has been met by a display of U.S. military strength, including flights of nuclear-capable bombers and stealth jets at annual South Korean-U.S. military drills that the allies call routine but that Pyongyang claims are invasion preparations.

South Koreans are familiar with provocations from the North, but its rhetoric over the last few weeks has raised worries.

” This is a serious concern for me,” said Heo Jeong-ja, 70, a cleaning lady in Seoul. “The country has to stay calm, but North Korea threatens us every day.”

Earlier Tuesday, a senior South Korean official told foreign journalists that there had been no sign of large-scale military movement in North Korea, though South Korea remains alert to the possibility of a provocation. The official spoke on condition of anonymity because he was not authorized to speak publicly to the media.

North Korea added its 5-megawatt plutonium reactor to its nuclear complex at Nyongbyon in 1986, and Pyongyang is believed to have exploded plutonium devices in its first two nuclear tests, in 2006 and 2009.

There had long been claims by the U.S. and others that Pyongyang was also pursuing a secret uranium program. In 2010, the North unveiled to visiting Americans a uranium enrichment program at Nyongbyon.

Analysts say they don’t believe North Korea currently has mastered the miniaturization technology needed to build a warhead that can be mounted on a missile, and the extent of its uranium enrichment efforts is also unclear.

Scientist and nuclear expert Siegfried Hecker, one of the Americans on the 2010 visit to Nyongbyon, has estimated that Pyongyang has 24 to 42 kilograms of plutonium — enough for perhaps four to eight rudimentary bombs similar to the plutonium weapon used on Nagasaki in World War II.

It’s not known whether the North’s latest atomic test, in February, used highly enriched uranium or plutonium stockpiles. South Korea and other countries have so far failed to detect radioactive elements that may have leaked from the test and which could determine what kind of device was used.


Cyber criminals tying up emergency phone lines through TDoS attacks

By InfoWorld Tech Watch

Created 2013-04-01 01:07PM


Credit: Matjaz Boncina

Emergency-service providers and other organizations are being targeted with TDoS (telephony denial of service) attacks, according to a security alert from the Department of Homeland Security (DHS) and the FBI [1] obtained by security expert Brian Krebs [2]. TDoS attacks use high volumes of automated calls to tie up target phone systems, halting incoming and outgoing calls.

“Dozens of such attacks have targeted the administrative PSAP [public safety answering point] lines (not the 911 emergency line),” according to the alert. “It is speculated that government offices/emergency services are being ‘targeted’ because of the necessity of functional phone lines.”

Emergency service providers aren’t the only organizations being targeted: “Many similar attacks have occurred targeting various businesses and public entities, including the financial sector and other public emergency operations interests, including air ambulance, ambulance and hospital communications.”

Perpetrators are using the attacks to extort cash from target organizations, according to the alert. They start with the organizations receiving a call from a representative from a purported payday loan company, during which a caller — usually speaking in a “strong accent” — demands payment of $5,000 for an outstanding debt, according to the alert.

Failing to get payment from an individual or organization, the perpetrator launches a TDoS attack. The attacks can last for several hours. They may stop for a period of time, then resume — and once an organization is attacked, it may suffer random attacks over weeks or months.

“According to a recent report [3] from SecureLogix, a company that sells security services to call centers, free IP-PBX software such as Asterisk, as well as computer-based call-generation tools and easy-to-access SIP services, are greatly lowering the barrier-to-entry for voice network attackers,” Krebs wrote.

This article, “Cyber criminals tying up emergency phone lines through TDoS attacks [4],” was originally published at [5]. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog [6]. For the latest business technology news, follow on Twitter [7].


    Source URL (retrieved on 2013-04-02 07:00AM):




    Sequestration Could Lead to Job Losses, Defense Comptroller Says

    By Kedar Pavgi

    April 1, 2013


    Defense Department workers could face job losses in fiscal 2014 if across-the-board cuts from sequestration continue on pace, Pentagon Comptroller Robert Hale warns.

    Defense’s fiscal 2014 budget proposal will include cuts, but it also would retain a level of spending that the Pentagon considers necessary to fulfill its mission, Hale said Thursday during a webinar hosted by the Association of Government Accountants and the American Society of Military Comptrollers. But if Congress rejects the budget plan, the department will be forced to “look at other longer-term choices besides furloughs,” including “involuntary separations,” he added.

    “We’ll have to get smaller and we’ll have to look at some areas where we can take some more risk, get rid of more overhead and make a lot of other tough decisions,” he said.

    Last week, Defense Secretary Chuck Hagel announced a reduction in furlough days planned for civilian employees from 22 to 14. Hagel said the continuing resolution passed by Congress allowed some transfer authority, shifting $10 billion into the military’s operation and maintenance accounts, but not enough to avert the worst consequences of sequestration. Civilian furloughs are now expected to begin mid-June, with some exceptions for positions in the intelligence, public safety and health fields.

    Hale said the budget cuts would be extremely detrimental for certain missions and for long-term readiness. He cited the example of Air Force cuts in pilot training, which he said would force the Pentagon to spend more money later retraining pilots who lose their certifications.

    “We are in triage mode in terms of getting through this year,” Hale said of the budget process. “But these near-term actions won’t solve the problems of sequestration.”

    He also said civilian hiring freezes and other cuts were eliminating job opportunities for returning veterans. Hale noted 40 percent of Defense’s workforce is composed of veterans, who would bear the brunt of budget cuts.

    “At the very time we are trying to increase job opportunities for veterans, we are severely cutting back on one of the main places they can be hired,” he said.



    Ohio transportation bill adds UAV provision

    Apr 2, 2013, 2:19pm EDT

    Tristan Navera

    Staff Reporter- Dayton Business Journal

    Buried in the 600-page transportation budget Ohio Gov. John Kasich signed into law Monday were provisions which may advance state efforts to develop a local test site for unmanned air systems.

    The extensive provisions of Ohio House Bill 51 lay out the transportation budget for next year. Among them are several amendments which will allow the Ohio Department of Transportation authority to conduct testing of Unmanned Aerial Vehicles (UAVs) and Unmanned Aerial Systems (UAS).

    In addition to allowing ODOT to use UAVs for research, the bill allows it to partner with other in-state agencies and share information. It also allows ODOT to partner with agencies in Indiana.

    Ohio state Sen. Chris Widener, R-Springfield, who’s district includes Clark, Madison and Greene counties, praised the language, which was introduced late as an amendment.

    “Ohio’s high-tech research capabilities, along with our military and aviation resources, make our state an ideal location for a UAV test site,” Widener said. “The changes made in the transportation budget regarding UAVs and information sharing will help give us an edge in growing the UAV industry here in Ohio. This field holds enormous potential to bring jobs and economic investment to our state, and I commend state officials for taking swift action to ensure these types of projects choose Ohio.”

    The Association for Unmanned Vehicle Systems International released a report last month noting the emerging UAV and UAS industry could add 100,000 jobs and $81 billion in economic impact nationally by 2025, following the integration of UAVs into the national aerospace in 2015. Ohio would gain 2,700 jobs and $2 billion in economic impact, according to that study.

    In the meantime, the Federal Aviation Administration is selecting six test sites for UAVs and UAS. Ohio and Indiana have partnered



    The climate may be heating up less in response to greenhouse-gas emissions than was once thought. But that does not mean the problem is going away

    The Economist

    Mar 30th 2013 |From the print edition


    OVER the past 15 years air temperatures at the Earth’s surface have been flat while greenhouse-gas emissions have continued to soar. The world added roughly 100 billion tonnes of carbon to the atmosphere between 2000 and 2010. That is about a quarter of all the CO put there by humanity since 1750. And yet, as James Hansen, the head of NASA’s Goddard Institute for Space Studies, observes, “the five-year mean global temperature has been flat for a decade.”

    Temperatures fluctuate over short periods, but this lack of new warming is a surprise. Ed Hawkins, of the University of Reading, in Britain, points out that surface temperatures since 2005 are already at the low end of the range of projections derived from 20 climate models (see chart 1). If they remain flat, they will fall outside the models’ range within a few years.

    The mismatch between rising greenhouse-gas emissions and not-rising temperatures is among the biggest puzzles in climate science just now. It does not mean global warming is a delusion. Flat though they are, temperatures in the first decade of the 21st century remain almost 1°C above their level in the first decade of the 20th. But the puzzle does need explaining.

    The mismatch might mean that—for some unexplained reason—there has been a temporary lag between more carbon dioxide and higher temperatures in 2000-10. Or it might be that the 1990s, when temperatures were rising fast, was the anomalous period. Or, as an increasing body of research is suggesting, it may be that the climate is responding to higher concentrations of carbon dioxide in ways that had not been properly understood before. This possibility, if true, could have profound significance both for climate science and for environmental and social policy.

    The insensitive planet

    The term scientists use to describe the way the climate reacts to changes in carbon-dioxide levels is “climate sensitivity”. This is usually defined as how much hotter the Earth will get for each doubling of CO concentrations. So-called equilibrium sensitivity, the commonest measure, refers to the temperature rise after allowing all feedback mechanisms to work (but without accounting for changes in vegetation and ice sheets).

    Carbon dioxide itself absorbs infra-red at a consistent rate. For each doubling of CO levels you get roughly 1°C of warming. A rise in concentrations from preindustrial levels of 280 parts per million (ppm) to 560ppm would thus warm the Earth by 1°C. If that were all there was to worry about, there would, as it were, be nothing to worry about. A 1°C rise could be shrugged off. But things are not that simple, for two reasons. One is that rising CO levels directly influence phenomena such as the amount of water vapour (also a greenhouse gas) and clouds that amplify or diminish the temperature rise. This affects equilibrium sensitivity directly, meaning doubling carbon concentrations would produce more than a 1°C rise in temperature. The second is that other things, such as adding soot and other aerosols to the atmosphere, add to or subtract from the effect of CO. All serious climate scientists agree on these two lines of reasoning. But they disagree on the size of the change that is predicted.

    The Intergovernmental Panel on Climate Change (IPCC), which embodies the mainstream of climate science, reckons the answer is about 3°C, plus or minus a degree or so. In its most recent assessment (in 2007), it wrote that “the equilibrium climate sensitivity…is likely to be in the range 2°C to 4.5°C with a best estimate of about 3°C and is very unlikely to be less than 1.5°C. Values higher than 4.5°C cannot be excluded.” The IPCC’s next assessment is due in September. A draft version was recently leaked. It gave the same range of likely outcomes and added an upper limit of sensitivity of 6°C to 7°C.

    A rise of around 3°C could be extremely damaging. The IPCC’s earlier assessment said such a rise could mean that more areas would be affected by drought; that up to 30% of species could be at greater risk of extinction; that most corals would face significant biodiversity losses; and that there would be likely increases of intense tropical cyclones and much higher sea levels.

    New Model Army

    Other recent studies, though, paint a different picture. An unpublished report by the Research Council of Norway, a government-funded body, which was compiled by a team led by Terje Berntsen of the University of Oslo, uses a different method from the IPCC’s. It concludes there is a 90% probability that doubling CO emissions will increase temperatures by only 1.2-2.9°C, with the most likely figure being 1.9°C. The top of the study’s range is well below the IPCC’s upper estimates of likely sensitivity.

    This study has not been peer-reviewed; it may be unreliable. But its projections are not unique. Work by Julia Hargreaves of the Research Institute for Global Change in Yokohama, which was published in 2012, suggests a 90% chance of the actual change being in the range of 0.5-4.0°C, with a mean of 2.3°C. This is based on the way the climate behaved about 20,000 years ago, at the peak of the last ice age, a period when carbon-dioxide concentrations leapt. Nic Lewis, an independent climate scientist, got an even lower range in a study accepted for publication: 1.0-3.0°C, with a mean of 1.6°C. His calculations reanalysed work cited by the IPCC and took account of more recent temperature data. In all these calculations, the chances of climate sensitivity above 4.5°C become vanishingly small.

    If such estimates were right, they would require revisions to the science of climate change and, possibly, to public policies. If, as conventional wisdom has it, global temperatures could rise by 3°C or more in response to a doubling of emissions, then the correct response would be the one to which most of the world pays lip service: rein in the warming and the greenhouse gases causing it. This is called “mitigation”, in the jargon. Moreover, if there were an outside possibility of something catastrophic, such as a 6°C rise, that could justify drastic interventions. This would be similar to taking out disaster insurance. It may seem an unnecessary expense when you are forking out for the premiums, but when you need it, you really need it. Many economists, including William Nordhaus of Yale University, have made this case.

    If, however, temperatures are likely to rise by only 2°C in response to a doubling of carbon emissions (and if the likelihood of a 6°C increase is trivial), the calculation might change. Perhaps the world should seek to adjust to (rather than stop) the greenhouse-gas splurge. There is no point buying earthquake insurance if you do not live in an earthquake zone. In this case more adaptation rather than more mitigation might be the right policy at the margin. But that would be good advice only if these new estimates really were more reliable than the old ones. And different results come from different models.

    One type of model—general-circulation models, or GCMs—use a bottom-up approach. These divide the Earth and its atmosphere into a grid which generates an enormous number of calculations in order to imitate the climate system and the multiple influences upon it. The advantage of such complex models is that they are extremely detailed. Their disadvantage is that they do not respond to new temperature readings. They simulate the way the climate works over the long run, without taking account of what current observations are. Their sensitivity is based upon how accurately they describe the processes and feedbacks in the climate system.

    The other type—energy-balance models—are simpler. They are top-down, treating the Earth as a single unit or as two hemispheres, and representing the whole climate with a few equations reflecting things such as changes in greenhouse gases, volcanic aerosols and global temperatures. Such models do not try to describe the complexities of the climate. That is a drawback. But they have an advantage, too: unlike the GCMs, they explicitly use temperature data to estimate the sensitivity of the climate system, so they respond to actual climate observations.

    The IPCC’s estimates of climate sensitivity are based partly on GCMs. Because these reflect scientists’ understanding of how the climate works, and that understanding has not changed much, the models have not changed either and do not reflect the recent hiatus in rising temperatures. In contrast, the Norwegian study was based on an energy-balance model. So were earlier influential ones by Reto Knutti of the Institute for Atmospheric and Climate Science in Zurich; by Piers Forster of the University of Leeds and Jonathan Gregory of the University of Reading; by Natalia Andronova and Michael Schlesinger, both of the University of Illinois; and by Magne Aldrin of the Norwegian Computing Centre (who is also a co-author of the new Norwegian study). All these found lower climate sensitivities. The paper by Drs Forster and Gregory found a central estimate of 1.6°C for equilibrium sensitivity, with a 95% likelihood of a 1.0-4.1°C range. That by Dr Aldrin and others found a 90% likelihood of a 1.2-3.5°C range.

    It might seem obvious that energy-balance models are better: do they not fit what is actually happening? Yes, but that is not the whole story. Myles Allen of Oxford University points out that energy-balance models are better at representing simple and direct climate feedback mechanisms than indirect and dynamic ones. Most greenhouse gases are straightforward: they warm the climate. The direct impact of volcanoes is also straightforward: they cool it by reflecting sunlight back. But volcanoes also change circulation patterns in the atmosphere, which can then warm the climate indirectly, partially offsetting the direct cooling. Simple energy-balance models cannot capture this indirect feedback. So they may exaggerate volcanic cooling.

    This means that if, for some reason, there were factors that temporarily muffled the impact of greenhouse-gas emissions on global temperatures, the simple energy-balance models might not pick them up. They will be too responsive to passing slowdowns. In short, the different sorts of climate model measure somewhat different things.

    Clouds of uncertainty

    This also means the case for saying the climate is less sensitive to CO emissions than previously believed cannot rest on models alone. There must be other explanations—and, as it happens, there are: individual climatic influences and feedback loops that amplify (and sometimes moderate) climate change.

    Begin with aerosols, such as those from sulphates. These stop the atmosphere from warming by reflecting sunlight. Some heat it, too. But on balance aerosols offset the warming impact of carbon dioxide and other greenhouse gases. Most climate models reckon that aerosols cool the atmosphere by about 0.3-0.5°C. If that underestimated aerosols’ effects, perhaps it might explain the lack of recent warming.

    Yet it does not. In fact, it may actually be an overestimate. Over the past few years, measurements of aerosols have improved enormously. Detailed data from satellites and balloons suggest their cooling effect is lower (and their warming greater, where that occurs). The leaked assessment from the IPCC (which is still subject to review and revision) suggested that aerosols’ estimated radiative “forcing”—their warming or cooling effect—had changed from minus 1.2 watts per square metre of the Earth’s surface in the 2007 assessment to minus 0.7W/m ² now: ie, less cooling.

    One of the commonest and most important aerosols is soot (also known as black carbon). This warms the atmosphere because it absorbs sunlight, as black things do. The most detailed study of soot was published in January and also found more net warming than had previously been thought. It reckoned black carbon had a direct warming effect of around 1.1W/m ². Though indirect effects offset some of this, the effect is still greater than an earlier estimate by the United Nations Environment Programme of 0.3-0.6W/m ².

    All this makes the recent period of flat temperatures even more puzzling. If aerosols are not cooling the Earth as much as was thought, then global warming ought to be gathering pace. But it is not. Something must be reining it back. One candidate is lower climate sensitivity.

    A related possibility is that general-circulation climate models may be overestimating the impact of clouds (which are themselves influenced by aerosols). In all such models, clouds amplify global warming, sometimes by a lot. But as the leaked IPCC assessment says, “the cloud feedback remains the most uncertain radiative feedback in climate models.” It is even possible that some clouds may dampen, not amplify global warming—which may also help explain the hiatus in rising temperatures. If clouds have less of an effect, climate sensitivity would be lower.

    So the explanation may lie in the air—but then again it may not. Perhaps it lies in the oceans. But here, too, facts get in the way. Over the past decade the long-term rise in surface seawater temperatures seems to have stalled (see chart 2), which suggests that the oceans are not absorbing as much heat from the atmosphere.

    As with aerosols, this conclusion is based on better data from new measuring devices. But it applies only to the upper 700 metres of the sea. What is going on below that—particularly at depths of 2km or more—is obscure. A study in Geophysical Research Letters by Kevin Trenberth of America’s National Centre for Atmospheric Research and others found that 30% of the ocean warming in the past decade has occurred in the deep ocean (below 700 metres). The study says a substantial amount of global warming is going into the oceans, and the deep oceans are heating up in an unprecedented way. If so, that would also help explain the temperature hiatus.

    Double-A minus

    Lastly, there is some evidence that the natural (ie, non-man-made) variability of temperatures may be somewhat greater than the IPCC has thought. A recent paper by Ka-Kit Tung and Jiansong Zhou in the Proceedings of the National Academy of Sciences links temperature changes from 1750 to natural changes (such as sea temperatures in the Atlantic Ocean) and suggests that “the anthropogenic global-warming trends might have been overestimated by a factor of two in the second half of the 20th century.” It is possible, therefore, that both the rise in temperatures in the 1990s and the flattening in the 2000s have been caused in part by natural variability.

    So what does all this amount to? The scientists are cautious about interpreting their findings. As Dr Knutti puts it, “the bottom line is that there are several lines of evidence, where the observed trends are pushing down, whereas the models are pushing up, so my personal view is that the overall assessment hasn’t changed much.”

    But given the hiatus in warming and all the new evidence, a small reduction in estimates of climate sensitivity would seem to be justified: a downwards nudge on various best estimates from 3°C to 2.5°C, perhaps; a lower ceiling (around 4.5°C), certainly. If climate scientists were credit-rating agencies, climate sensitivity would be on negative watch. But it would not yet be downgraded.

    Equilibrium climate sensitivity is a benchmark in climate science. But it is a very specific measure. It attempts to describe what would happen to the climate once all the feedback mechanisms have worked through; equilibrium in this sense takes centuries—too long for most policymakers. As Gerard Roe of the University of Washington argues, even if climate sensitivity were as high as the IPCC suggests, its effects would be minuscule under any plausible discount rate because it operates over such long periods. So it is one thing to ask how climate sensitivity might be changing; a different question is to ask what the policy consequences might be.

    For that, a more useful measure is the transient climate response (TCR), the temperature you reach after doubling CO gradually over 70 years. Unlike the equilibrium response, the transient one can be observed directly; there is much less controversy about it. Most estimates put the TCR at about 1.5°C, with a range of 1-2°C. Isaac Held of America’s National Oceanic and Atmospheric Administration recently calculated his “personal best estimate” for the TCR: 1.4°C, reflecting the new estimates for aerosols and natural variability.


    That sounds reassuring: the TCR is below estimates for equilibrium climate sensitivity. But the TCR captures only some of the warming that those 70 years of emissions would eventually generate because carbon dioxide stays in the atmosphere for much longer.

    As a rule of thumb, global temperatures rise by about 1.5°C for each trillion tonnes of carbon put into the atmosphere. The world has pumped out half a trillion tonnes of carbon since 1750, and temperatures have risen by 0.8°C. At current rates, the next half-trillion tonnes will be emitted by 2045; the one after that before 2080.

    Since CO accumulates in the atmosphere, this could increase temperatures compared with pre-industrial levels by around 2°C even with a lower sensitivity and perhaps nearer to 4°C at the top end of the estimates. Despite all the work on sensitivity, no one really knows how the climate would react if temperatures rose by as much as 4°C. Hardly reassuring.



    Hagel Outlines Plan for Defense Cuts

    April 3, 2013, 1:12 p.m. ET


    WASHINGTON—Defense Secretary Chuck Hagel on Wednesday outlined his vision for reducing defense spending in the coming years, saying he was taking a hard look at weapons programs, overhead and personnel.

    Despite other efforts in recent years to cut underperforming weapons programs, Mr. Hagel said projects remained that were “vastly more expensive and technologically risky than what was promised or budgeted for.”

    The Pentagon is keeping details of its proposed cuts under wraps until the Obama administration unveils its budget next week. But defense analysts said Mr. Hagel’s speech indicates military forces will be cut more deeply and that some high-profile weapons systems, like the Army’s ground-combat vehicle or light tactical vehicle, are likely to be cut back or delayed significantly.

    Mr. Hagel sketched his views in an address at the National Defense University in Washington that marked his first major speech as defense secretary.

    He said in prepared remarks that the 10-year, $500 billion in across-the-board spending cuts taking effect this year and known as the sequester halted many essential activities and necessitated further cuts in immediate spending plans. Although the sequester could be replaced with a more comprehensive deficit-reduction deal, Mr. Hagel said there was no question the department needed to work harder at “matching missions with resources.”

    The Pentagon, Mr. Hagel said, will begin “another hard look at personnel” examining to see if it must cut personnel, alter pay and benefit structures, and reduce health-care costs. Mr. Hagel also signaled that he will review whether the military had too many officers and whether some duties being done by uniformed military could be moved to civilians.


    He also promised a look at the organization of the Defense Department, saying the effort to make the military services work together more efficiently had led to new organizations being layered on top of old ones.

    “The last major defense reorganization…was drafted at the height of the Reagan defense buildup and focused on improving jointness and establishing clear operational chains of command,” Mr. Hagel said. “Cost and efficiency were not major considerations.”

    Mackenzie Eaglen, a defense analyst at the American Enterprise Institute, said Mr. Hagel’s assessment that efficiencies alone won’t sufficiently reduce Pentagon spending was accurate.

    “What really matters most is not this speech but rather what comes over next week in President Obama’s 2014 budget proposal that actually starts to tackle these areas of bureaucratic creep,” Ms. Eaglen said. The Pentagon, she said, should look to trim the staff of the Defense secretary, currently at some 5,000 people.

    Ms. Eaglen also predicted that given the reluctance of President Barack Obama’s administration to use ground forces, the Army would face some of the deepest cuts. “It seems ripe that Army modernization programs will be a key target for cuts,” she said.

    Even as he laid out the broad cuts to come, Mr. Hagel argued for further innovation. He noted that in prior periods of reduced spending, the military had developed weapons and strategies that later proved invaluable. Aircraft carriers were developed before World War II, and drones emerged during the post-Cold War drawdown.

    “The United States military has always proved capable of adapting to new realities, even when resources were relatively scarce,” Mr. Hagel said.


    New Defense Chief Signals ‘Fundamental Change’ to Military Hardware, Personnel

    By Spencer Ackerman


    1:14 PM


    Former Defense Secretary Bob Gates canceled scads of dubious, expensive weapons systems and began preparing for big budget cuts. His successor, Leon Panetta, managed those budget cuts, but didn’t cancel any more big-ticket items. Their new successor, Chuck Hagel, used his first major speech as defense secretary to signal that he wants to be more Gates than Panetta.

    Hagel told an audience at the National Defense University today that the onset of deep, congressionally mandated and across-the-board cuts to the Pentagon budget will prompt him to re-evaluate the military’s hardware, its personnel size, its expensive benefits systems and its bureaucracy — and “challenge all past assumptions” about them.

    “This effort will by necessity consider big choices that could lead to fundamental change and a further prioritization of the use of our resources,” Hagel said. “Change that involves not just tweaking or chipping away at existing structures and practices but, where necessary, fashioning entirely new ones that are better suited to 21st-century realities and challenges.”

    As one of his earliest acts in office, Hagel ordered a review of the defense strategy the Obama administration rolled out last year, following on Panetta’s warning that the budget cuts might render it obsolete. Hagel didn’t go that far — his goal, he said, was to “better execute the strategic guidance set out by the president” — but said that he would now examine “the full range of options” that undergird a strategy emphasizing the western Pacific region, launching military assets from the sea, and lots of robots. Yet Hagel briefly mentioned some “core strengths” of the U.S. military that might end up newly emphasized in Hagel’s review: “leader development, training, mobility and logistics, special operations forces, cyber, space, and research and development.”

    The speech had much to offer dovish defense analysts who argue that the Pentagon still suffers from too much overhead bloat and commitment to un-strategic weapons systems. Hagel referred to previous rounds of weapons cancelations as “pruning” and said he was concerned that “the military’s modernization strategy still depends on systems that are vastly more expensive and technologically risky than what was promised or budgeted for.” He singled out no major weapons system, but he probably got the attention of military offices working on the F-35 Joint Strike Fighter and the Army’s forthcoming Ground Combat Vehicle.

    Without getting specific in a speech that mostly was about broadcasting intent, Hagel skewered a few sacred Pentagon cows. He worried that the military’s expensive benefits system was crowding out core missions to prepare for, deter and wage conflict. He said the Pentagon’s bureaucratic acquisitions system was ensuring that new programs “take longer, cost more and deliver less than initially planned and promised.” He said he would take “another hard look at personnel,” hinting that he’s willing to cut the size of the services and their civilian supporters. “Reducing layers of upper and middle management,” particularly from headquarters staffs, will also be part of Hagel’s new review, he said, pointedly noting that the Pentagon had not restructured its institutions since before the Berlin Wall fell.

    But Hagel also tempered much of his criticisms. The reviews might determine that dramatic changes are “unwise, untenable or politically impossible,” he said. His speech also rejected doing less around the world, saying that the United States lacked the “luxury of retrenchment”: “If we refuse to lead, something, someone will fill the vacuum.” And there was an olive branch to congressional hawks who don’t like Hagel. “If we get time and flexibility to implement savings, we could limit the impact of spending reductions on force structure and modernization while still making a significant contribution to deficit reduction,” he said. Translated from the politician, Republicans need to raise taxes if they don’t want deeper defense cuts.

    Hagel may have provided few specifics in the speech, and Pentagon chiefs’ ambitious priorities have a tendency to get ground down by daily bureaucratic resistance and real-world crises. But next Wednesday, the Pentagon plans on releasing its first budget under his tenure. Critics have pointed out that his deployment of new Alaska-based missile interceptors to guard against North Korea’s renewed bellicosity represent the kind of short-sighted thinking his speech criticized. His budget documents will provide a better sense of whether they’re an exception or the rule.

    Yet Hagel has not described the Pentagon cuts in the hysterical language Panetta employed to avert them. His speech underscored that he sees them as a challenge to be managed — and perhaps more. “The Department must understand the challenges and uncertainties, plan for the risks,” Hagel said, “and, yes, recognize the opportunities inherent in budget constraints and more efficient and effective restructuring.” That’s been a task that has vexed his predecessors.


    How do You Create U.S. Cyber Guidelines for Foreign Firms?


    By Aliya Sternstein

    April 3, 2013


    Fitting foreign companies critical to U.S. society into a domestic cybersecurity framework will be tricky, said a U.S. pharmaceutical executive helping to form the guidelines.

    On Wednesday, government and industry leaders met for the first time to try hammering out voluntary security standards for private sector networks. A policy is due by November, under a Feb. 12 cyber executive order covering “critical infrastructure” American sectors that sustain economic and national security.

    “What happens if we have a non-U.S. company operating critical infrastructure,” questioned Terry Rice, Merck chief information security officer, who also has experience consulting critical infrastructure defense contractors. There is no answer yet as to how the guidelines will apply to those organizations, he said.

    Merck, headquartered in New Jersey, spends about $8 billion annually on medical research and development, according to the manufacturer. U.S. corporations repeatedly complain that foreign firms, particularly Chinese-owned entities, are pilfering this proprietary, expensive data, the national intelligence director has reported.

    Commerce Department Deputy Secretary Rebecca Blank, earlier in the day, had said the security standards policy will be “a living framework” that adapts to morphing threats.

    The National Institute of Standards and Technology, which is steering the negotiations, is in the difficult position of formulating cross-industry controls that the White House would prefer Congress mandate. Many companies have shunned the idea of government-regulated computer security.

    On Wednesday, NIST officials noted that perhaps the forthcoming policy could prove useful in shaping cyber guidelines for all firms, worldwide.

    Merck falls under the critical infrastructure category because it produces vaccines and other treatments that protect Americans from the aftereffects of terrorist attacks, disease outbreaks and natural disasters.

    But the company also runs a consumer products division to turn out, for instance, Coppertone sunscreen that Rice said he worries could be subject to “restrictive requirements.” Rice cautioned the standards could impede business unconnected to Merck’s critical infrastructure responsibilities.

    After standards are settled on, the Homeland Security Department will execute the program and offer incentives, such as liability protections and tax incentives, Commerce officials said. NIST, a Commerce agency with a favorable reputation among businesses, began outreach work last month at a briefing organized by lobbying firm Venable LLP.



    US NIST: Industry should lead creation of cybersecurity framework

    The voluntary standards should serve companies’ cybersecurity needs, officials say

    By Grant Gross, IDG News Service

    April 03, 2013 02:31 PM ET


    IDG News Service – The U.S. government agency leading an effort to create a voluntary cybersecurity framework for companies operating critical infrastructure wants to hear ideas about what to include in those standards.

    The U.S. National Institute of Standards and Technology, tapped by President Barack Obama to steer the standards effort in a February executive order, needs the best ideas from businesses, officials with the agency said during a workshop Wednesday.

    “Protecting America’s businesses and America’s infrastructure from attacks is crucial to ensuring our economy continues to grow,” said Rebecca Blank, acting secretary of the U.S. Department of Commerce, NIST’s parent agency. “The question is, how do we do that? There’s only one viable answer: together.”

    NIST needs businesses to tell it which best practices and standards should be included in the framework, Blank added.

    NIST’s job in the development of the framework is to support businesses and operators of critical infrastructure, NIST Director Patrick Gallagher said. NIST will develop the framework based on the cybersecurity needs of industry, he said.

    “This framework … is one that has to be baked into your businesses and to your interests and to be put into practice in your daily lives,” he told attendees of Wednesday’s workshop. “We will not be seeking to tell industry how to build your products or to run your business; instead we are relying on critical infrastructure industries to dictate their needs for technology products and services.”

    During the framework development process, participants should aim for a flexible set of guidelines, said Russell Schrader, associate general counsel for global enterprise risk at Visa. “One size does not fit all,” he said. “We need things that will enhance, rather than detract, from operational goals of business.”

    Schrader also called on NIST and other participants to build on existing cybersecurity programs and to aim for standards with global scalability. “One of the things we need to be careful about is to avoid confusing, duplicative, or even oppositional, standards and requirements across geographies,” he said.

    In February, NIST issued a request for information focused on the cybersecurity challenges businesses face and what steps they are taking now to protect their cyberassets. Comments are due by Monday.

    Comments from Wednesday’s workshop will be included in NIST’s documents used as a foundation for developing the cybersecurity framework, Gallagher said.

    Wednesday’s workshop in Washington, D.C., served as an introduction to the standards development process, with NIST planning three more workshops in other cities to focus on the actual creation of the standards. The next workshop will be at Carnegie Mellon University in Pittsburgh in late May.




    GE’s New “Brilliant” Wind Turbine Put to the Test

    By James Montgomery, Associate Editor,

    April 3, 2013 | 1 Comment


    New Hampshire, USA — Earlier this year GE launched its new 2.5-120 wind turbine targeting low-wind-speed sites (7.5 m/s average wind speed, for IEC Class III and DiBT WZ2 environments), offering what it says will be better efficiency (25 percent) and power output (15 percent) than its current model, the 2.85-103.

    The new system is now installed at a test site in Wieringermeer, The Netherlands (about 50 km north of Amsterdam), where it will be tested and validated through this fall.

    GE touts its new turbine’s pedigree as not just intelligent or smart, but downright “brilliant” due to its utilization of the “Industrial Internet” to help manage the intermittency of wind-produced energy, explained Keith Longtin, GM of wind products at GE, in an interview when the turbine was first announced. The system analyzes tens of thousands of data points per second with sensors on the turbines tracking everything from wind speed and direction to blade pitch, communicating with other turbines to share and compare performance data and more intelligently support voltage. “If the turbine knows what’s going on with other turbines, it may not have to shut down,” he explained. That also could expand to wind farms communicating with each other, across grids and county lines with different regulations.

    That communication should also save time and money on the servicing side. If a turbine does indeed require maintenance, data about the problem is sent to the service technician who can figure out what parts to bring to specifically address a problem — or whether an on-site fix is required at all.

    The turbine integrates a small amount of energy storage (100-350kW) and “some forecasting algorithms” to predict power output in 15-30 minute stages. That’s not overnight arbitrage on a megawatt-scale, but it does serve to “strengthen the grid for a short period of time,” Longtin explained.

    It’s the “next chapter of where we’re taking the business,” he said.

    The 2.5-120 is also taller than other turbines at 139 meters, with 120-meter rotors and 58.7-meter blades. Capacity factor exceeds 45 percent, which in a ~7 meters/second environment translates to more than 10 GWh/year, according to Longtin. (Power generation starts at 3 m/s, he noted.)


    Remarks As Delivered by Secretary of Defense Chuck Hagel, National Defense University, Washington, DC, Wednesday, April 03, 2013


    General, thank you. I am very proud to be here. I am proud to be among all of you who give so much every day and will continue to contribute to our country and making a better world. And I thank you for that service.

    For a fancy general, to give such an overstated introduction to a retired Army Sergeant is something that I rarely get. But I am very appreciative of the generous introduction and to you, General, and all of your staff and colleagues here. Thank you for what you continue to do for our country in this important institution, an institution, I think, as important for our country and the development not only of our leaders, but the leaders of other nations who are represented here today.

    I think it is one of the wisest investments our country has made and will continue to make in developing our leaders, helping other nations develop their leaders, based not just on military doctrine, but on the principles and values of mutual respect and dignity and the rule of law. And this facility, this institution, has done that very effectively for many, many years, so I thank you all.

    Generations of our military leaders have come to this institution here at Fort McNair to receive training and education they needed to succeed not just in combat, but in their daily lives. The responsibilities you all will take on will be immense. Every day you will face decisions with real implications for the safety and welfare of our troops and the security of our nation.

    As you move onward and upward in your careers, I would urge you to always keep three questions in mind before making a decision:

    •    Does this help protect national security?

    •    Is this in America’s strategic interests, which includes the political, economic, and moral dimensions of our interests and our responsibilities?

    •    Is this worthy of the service and sacrifice of our men and women in uniform, and their families?

    These questions speak to the Department of Defense’s most basic responsibilities – defending the nation, advancing America’s strategic interests, and keeping faith with its quiet heroes.

    How we fulfill these enduring responsibilities at a time of unprecedented shifts in the world order, new global challenges, and deep global fiscal uncertainty is the subject of my remarks today.

    I want to focus on challenges, choices and opportunities:

    •    the challenges posed by a changing strategic landscape and new budget constraints;

    •    the choices we have in responding to these challenges, and;

    •    the opportunities that exist to fundamentally reshape the defense enterprise to better reflect 21st century realities.

    NDU is an appropriate venue for this discussion because the success of these efforts ultimately rests on the abilities and judgments of our military and civilian leaders. Those here today.

    As President Dwight Eisenhower said during a visit to these grounds more than fifty years ago, “the wise and prudent administration of the vast resources required by defense calls for extraordinary skill in meshing the military, political, economic, and social machinery of our modern life…so that the greatest effective use is made of resources with a minimum of waste and misapplication.”

    As a former Army Officer who graduated from this campus shortly before the onset of the Great Depression, Eisenhower knew of what he spoke.

    The security landscape of 2013 is of a far different character than the world of 1960, or even the world of a few years ago. But Eisenhower’s words still ring true today. The United States is emerging from more than a decade of war in Iraq and Afghanistan, but the threat of violent extremism persists and continues to emanate from weak states and ungoverned spaces in the Middle East and North Africa.

    There also stands an array of other security challenges of varying vintage and degrees of risk to the United States: the proliferation of dangerous weapons and materials, the increased availability of advanced military technologies in the hands of state and non-state actors, the risk of regional conflicts that could draw in the United States, the debilitating and dangerous curse of human despair and poverty, as well as the uncertain implications of environmental degradation.

    Cyberattacks – which barely registered as a threat a decade ago – have grown into a defining security challenge, with potential adversaries seeking the ability to strike at America’s security, energy, economic and critical infrastructure with the benefit of anonymity and distance.

    The world today is combustible and complex, and America’s responsibilities are as enormous as they are humbling. These challenges to our security and prosperity demand America’s continued global leadership and engagement, and they require a principled realism that is true to our values.

    The United States military remains an essential tool of American power, but one that must be used judiciously, with a keen appreciation of its limits. Most of the pressing security challenges today have important political, economic, and cultural components, and do not necessarily lend themselves to being resolved by conventional military strength. Indeed, the most destructive and horrific attack ever on the United States came not from fleets of ships, bombers, and armored divisions, but from 19 fanatical men wielding box cutters and one-way plane tickets.

    So our military must continue to adapt in order to remain effective and relevant in the face of threats markedly different than those that shaped our defense institutions during the Cold War.

    Since 9/11, the military has grown more deployable, more expeditionary, more flexible, more lethal, and more professional. It has also grown significantly older – as measured by the age of major platforms – and enormously more expensive in just about every area.

    Today America’s defense institutions are emerging, and in some cases recovering, from more than a decade of sustained conflict while confronting new strategic challenges – and doing so with significantly less resources than the Department has had in the past.

    As this audience knows, this process of change and realignment is already well underway. It began under Secretary Gates, who recognized that what he called the post-9/11 “gusher” of defense spending was coming to an end. Under his leadership, the Department worked to reduce overhead costs within the military services, and canceled or curtailed a number of major modernization programs that were performing poorly or poorly suited to real-world demands.

    The realignment continued under Secretary Panetta, who worked closely with the President and the Joint Chiefs of Staff to craft new defense strategic guidance and a defense budget which reduced the Department’s planned spending by $487 billion over ten years. Even while reshaping the force to become smaller and leaner, this budget made important investments in the new strategy – including rebalancing our defense posture to the Asia-Pacific and prioritizing critical capabilities such as cyber, special operations, and unmanned systems.

    So the Department of Defense has been preparing for this inevitable downturn in defense budgets, and has taken significant steps to reduce spending and adapt to the new strategic environment.

    Nevertheless, a combination of fiscal pressures and a gridlocked political process has led to far more abrupt and deeper reductions than were planned for or expected. Now DoD is grappling with the serious and immediate challenge of sequester – which is forcing us to take as much as a $41 billion cut in this current fiscal year, and if it continues, will reduce projected defense spending by another $500 billion over the next decade.

    The sequester cut, because it falls heavily on operations and modernization accounts, is already having a disruptive and potentially damaging impact on the readiness of the force.

    The Department has already made many cuts, including cuts to official travel and facilities maintenance. We have imposed hiring freezes and halted many important but non-essential activities. However, we will have to do more. Across-the-board reductions of the size we are looking at will demand that we furlough civilian personnel, which could affect morale and may impact productivity. Cuts will fall heavily on maintenance and training, which further erodes the readiness of the force and will be costly to regain in the future. As the Service Chiefs have said, we are consuming our readiness. Meanwhile, our investment accounts and the defense industrial base are not spared damage as we take indiscriminate cuts across these areas of the budget too.

    These are the challenges that face us right now, and I am determined to help the Department get out ahead of them. General Dempsey has said that we need to “lead through” this crisis. I have told our senior leadership – the Joint Chiefs, the Service Secretaries, and the Undersecretaries of Defense – we are in this together, and we will come out of it together.

    The task ahead for the Department is to prepare for the future, but not in a way that neglects, or is oblivious to, the realities of the present. We are therefore undertaking a process to develop choices, options and priorities to deal with further reductions in the defense budget that could result from a comprehensive deficit reduction deal or the persistence of sequester level cuts – all anchored by the President’s strategic guidance.

    My goal in directing this Strategic Choices and Management Review – which is being led by Deputy Secretary Carter, who is working with General Dempsey – is to ensure that we are realistically confronting both our strategic and fiscal challenges. It is not to assume or tacitly accept that deep cuts – such as those imposed by sequester – will endure, or that these cuts can be accommodated without a significant reduction in military capabilities. At the same time, we cannot simply wish or hope our way to carrying out a responsible national security strategy and its implementation. The Department must understand the challenges and uncertainties, plan for the risks, and, yes, recognize the opportunities inherent in budget constraints and more efficient and effective restructuring.

    This exercise is also about matching missions with resources – looking at ends, ways, and means. This effort will by necessity consider big choices that could lead to fundamental change and a further prioritization of the use of our resources. Change that involves not just tweaking or chipping away at existing structures and practices but where necessary fashioning entirely new ones that are better suited to 21st century realities and challenges. All of this with the goal of ensuring that we can better execute the strategic guidance set out by the President.

    In order for this effort to succeed, we need to be steely-eyed and clear-headed in our analysis, and explore the full range of options for implementing our national security strategy. We need to challenge all past assumptions, and we need to put everything on the table.

    For example, it is already clear to me that any serious effort to reform and reshape our defense enterprise must confront the principal drivers of growth in the Department’s base budget – namely acquisitions, personnel costs, and overhead.

    In many respects, the biggest long-term fiscal challenge facing the Department is not the flat or declining top-line budget, it is the growing imbalance in where that money is being spent internally. Left unchecked, spiraling costs to sustain existing structures and institutions, provide benefits to personnel, and develop replacements for aging weapons platforms will eventually crowd out spending on procurement, operations and readiness – the budget categories that enable the military to be and stay prepared.

    If these trends are not reversed, former Chief of Naval Operations Admiral Gary Roughead warned, DoD could transform from “an agency protecting the nation to an agency administering benefit programs, capable of buying only limited quantities of irrelevant and overpriced equipment.”

    Thanks to the efforts of my predecessors and other DoD leaders, we have made strides in addressing some of this internal “crowding out” in the budget. Much more hard work, difficult decisions and strategic prioritizing remains to be done. Deep political and institutional obstacles to these necessary reforms will need to be engaged and overcome.

    I’m concerned that despite pruning many major procurement programs over the past four years, the military’s modernization strategy still depends on systems that are vastly more expensive and technologically risky than what was promised or budgeted for. We need to continually move forward with designing an acquisition system that responds more efficiently, effectively and quickly to the needs of troops and commanders in the field. One that rewards cost-effectiveness and efficiency, so that our programs do not continue to take longer, cost more, and deliver less than initially planned and promised.

    With full recognition for the great stresses that our troops and their families have been under and been under for nearly twelve years of war, and for the essential contributions civilian employees make to the Department’s mission, fiscal realities demand another hard look at personnel – how many people we have both military and civilian, how many we need, what these people do, and how we compensate them for their work, service, and loyalty with pay, benefits and health care. This will involve asking tough questions.

    Tough questions such as:

    •    What is the right mix of civilian and military personnel across the Department and its various components?

    •    Within the force, what is the right balance between officers and enlisted?

    •    Without necessarily accepting the oft-stated claim that there are more than 300,000 service members performing civilian and commercial functions, what is the appropriate distribution of troops performing combat, support and administrative duties?

    There will likewise have to be close scrutiny of DoD’s organizational chart and command structures, most of which date back to the early years of the Cold War. The last major defense re-organization, Goldwater-Nichols, was drafted at the height of the Reagan defense buildup and focused on improving jointness and establishing clear operational chains of command. Cost and efficiency were not major considerations.

    Goldwater-Nichols succeeded in its purpose by strengthening the Joint Staff and the Combatant Commands, but it went about doing this by layering joint organizations and processes atop service organizations and atop processes. The elevation of the former did not automatically lead to the diminution of the latter.

    Today the operational forces of the military – measured in battalions, ships, and aircraft wings – have shrunk dramatically since the Cold War era. Yet the three and four star command and support structures sitting atop these smaller fighting forces have stayed intact, with minor exceptions, and in some cases they are actually increasing in size and rank.

    More broadly, despite good efforts and intentions, it is still not clear that every option has been exercised or considered to pare back the world’s largest back-office. Prior efficiency campaigns yielded substantial savings from the services, and some from the DoD-elements known as the “Fourth Estate,” which consists, as you all know, of the Office of the Secretary of Defense, the Joint Staff, the Combatant Commands and the defense agencies and field activities – the Missile Defense Agency as well as those that provide health care, intelligence, and contracting support.

    We need to relook at funding for these activities, which won’t be easy. With respect to the fourth estate, former Secretary of Defense Gates compared the process of looking for savings to “going on an Easter Egg hunt” – an image for this time of year. Secretary Panetta was more blunt – he called the Pentagon quote a “big damned bureaucracy.” It doesn’t sound like Panetta at all! Wherever you are, Leon, know that we are quoting you.

    The military is not, and should never be, run like a corporation. But that does not mean we don’t have a good deal to learn from what the private sector has achieved over the past 20 to 30 years, in which reducing layers of upper and middle management not only reduces costs and micromanagement, it also leads to more agile and effective organizations and more empowered junior leaders.

    In light of all these trends, we need to examine whether DoD is structured and incentivized to ask for more and do more, and that entails taking a hard look at requirements – how they are generated, and where they are generated from.

    It could turn out that making dramatic changes in each of these areas could prove unwise, untenable, or politically impossible. Yet we have no choice but to take a very close look and see how we can do all of this better.

    In order to address acquisition, personnel, and overhead costs in smart ways that have not been done before we need time, flexibility, and the support and partnership of Congress. We also need long-term budget certainty.

    One of the biggest problems that sequester has brought is that it is requiring immediate, deep and steep cuts. This means that the Department will by necessity have to look at large cuts to operations and modernization to find savings that can be quickly realized.

    The kinds of reforms the Department needs in other areas would take some time to implement, and take longer for significant savings to accrue. If we get time and flexibility to implement savings, we could limit the impact of spending reductions on force structure and modernization while still making a significant contribution to deficit reduction.

    By contrast, the cuts required by sequester afford neither time nor flexibility. These quick and dramatic cuts would almost certainly require reductions in what have long been considered core military capabilities and changes in the traditional roles and missions among the uniformed services.

    Regardless, we will need to take a critical look at our military capabilities and ensure that our force structure and modernization plans are directly and truly aligned with the President’s strategy. That includes taking a new look at how we define and measure readiness and risk, and factor both into military requirements. It also includes balancing the competing demands of capacity and capability – how much of any given platform we need, and how much capability it needs to have to fulfill real-world missions.

    The size and shape of the force needs to be constantly re-assessed, to include the balance between active and reserve, the mix of conventional and unconventional capabilities, general purpose and special operations units, and the appropriate balance between forward stationed, rotationally deployed, and home-based forces. We also need to re-assess how much we can depend on our allies and partners, what can we anticipate from them in capabilities and capacity, and factor these calculations into both our short and long-term planning.

    A thorough examination of the way our military is organized and operates will also highlight our inherent strengths. Our strategic planning must emphasize these strengths, which include leader development, training, mobility and logistics, special operations forces, cyber, space, and research and development.

    Another core strength we have is that the United States military has always proved capable of adapting to new realities, even when resources were relatively scarce.

    Consider that in the lean interwar years between World War I and World War II during the Great Depression, a group of farsighted officers – with virtually no funding or prospect of promotion – and you remember in your history how long General Eisenhower was a lieutenant colonel, a good example of what we’re talking about. They conceived important new platforms and operating concepts for armored warfare, amphibious assault, aircraft carriers, submarines, and long-range bombers – all of which proved decisive in the Second World War.

    After the Korean War, President Eisenhower’s “new look” defense strategy controlled the growth of defense spending – then exceeding 10 percent of GDP – while investing in the kind of strategic and long-range capabilities that were critical during the Cold War and are still employed in various forms today.

    As the military grappled with incredible challenges to morale and readiness after Vietnam it also made the transition to an all-volunteer force and protected key investments in technologies like stealth, precision weapons, and platforms like the F-16 and Abrams tank.

    Even during the 1990s procurement holiday, we invested in satellite guidance and networking systems, as well as remotely piloted aircraft that have been game-changers during the last decade of war.

    The goal of the senior leadership of this Department today is to learn from the miscalculations and mistakes of the past drawdowns, and make the right decisions that will sustain our military strength, advance our strategic interests, and protect our nation well into the future.

    Let me now conclude with some comments on America and its role in the world.

    During this period of budget turmoil, and after a financial crisis and a decade where our country has grown weary of war and skeptical of foreign engagements, questions arise about the merits of America’s global leadership.

    America does not have the luxury of retrenchment – we have too many global interests at stake, including our security, our prosperity, and our future. If we refuse to lead, something, someone will fill the vacuum. The next great power may not use its power as responsibly or judiciously as America has used its power over the decades since World War II. We have made mistakes and miscalculations with our great power. But as history has advanced, America has helped make a better world for all people with its power. A world where America does not lead is not the world I wish my children to inherit.

    More than a century ago on this campus, while laying the cornerstone on the building which now bears his name, President Theodore Roosevelt declared that the United States had “by the mere trend of events, been forced into a position of world power.” He went on to say that America “cannot bear these responsibilities aright unless its voice is potent for peace and justice…with the assured self-confidence of the just man armed.”

    What distinguishes America is not our power, for the world has known great power. It is America’s purpose and our commitment to making a better life for all people. We are a wise, thoughtful and steady nation, worthy of our power, generous of spirit, and humble in our purpose. That is the America we will defend together, with the purpose and self-confidence of the “just man armed.”

    Thank you, and I would be happy to take your questions.


    Cheap Drones Made in China Could Arm US Foes

    By Jeremy Hsu, TechNewsDaily Senior Writer |

    Cheap drones made in China could end up arming potential U.S. foes such as North Korea, Iran and terrorist organizations.

    China already makes drones that don’t quite match up to U.S. military drones, but for a fraction of the cost. The Chinese military envisions such unmanned autonomous vehicles (UAVs) scouting out battlefield targets, guiding missile and artillery strikes, and swarming potential adversaries, such as U.S. carrier battle groups.

    “In whatever future conflict scenario we’re in five or 10 years from now, the proliferation of UAVs is going to complicate things for the U.S. military,” said Ian Easton, a research fellow at the Project 2049 Institute.

    China has built a huge military-industrial complex to support its growing drone fleet, which consisted of about 280 military drones as of mid-2011, according to a report released by the Project 2049 Institute on March 11. Chinese manufacturers supplying the military and state agencies also have begun seeking foreign buyers in a global drone market that aerospace and defense market research firm Teal Group estimates to be worth $89 billion over the next 10 years.

    Retired Chinese generals have stated on Chinese state television station CCTV that Chinese drone technology lags American technology by about five years, Easton said. However, Chinese manufacturers are touting their plans to build drones five or even 10 times cheaper than comparable U.S. drones, whose hardware alone costs $5 million to $10 million. [Video: RoboBees: Design Poses Intriguing Engineering Challenges]

    The idea of cheap, China-made drones may not tempt countries such as Japan, South Korea, Taiwan, Australia or NATO allies that want to buy the best U.S. or Israeli drone hardware. Instead, China is seeking buyers in the Middle East and Africa at glitzy expositions such as China’s biennial Zhuhai Air Show.

    “In the area of the Middle East, there could be direct competition, and the Chinese would have an advantage because they can apparently make UAVs cheaper,” Easton told TechNewsDaily. “For countries that don’t demand the best technology, good enough would be good enough.”

    That means countries such as Syria might obtain Chinese drones for the surveillance or oppression of their own citizens, Easton said. He added that Chinese drones also could end up in the hands of North Korea or Iran — regional hotspots where the U.S. military may potentially find itself embroiled in future conflicts.

    Iran has already sold its own crude drones to countries such as Syria and organizations such as Hezbollah, a militant group based in Lebanon and backed by Iran. In addition, China-made drones would allow countries like Iran and North Korea to obtain technology which Western countries refuse to sell.

    “It’s bad enough that China has that kind of capability, but the same capability could end up in the hands of the Iranians or North Koreans or a terrorist group like Hezbollah that Iran is cooperating with,” Easton said.

    The U.S. has already shown the world how battlefield drone surveillance and drone strikes can prove both effective and controversial. Still, the U.S. military faces a new challenge in detecting swarms of China-made drones during future conflicts, Easton said. Some drones may go undetected by radar because they can fly extremely low and may come in small sizes.



    North Korea asks embassies to consider moving diplomats out

    April 5, 2013

    By Guy Faulconbridge and Ronald Popeski | Reuters –


    LONDON/SEOUL (Reuters) – North Korea has asked embassies to consider moving staff out and warned it cannot guarantee the safety of diplomats after April 10, Britain said, amid high tension and a war of words on the Korean peninsula.

    The requests come on the heels of declarations by the government of the secretive communist state that real conflict is inevitable, because of what it terms “hostile” U.S. troop exercises with South Korea and U.N. sanctions imposed over North Korea’s nuclear weapons testing.

    “The current question was not whether, but when a war would break out on the peninsula,” because of the “increasing threat from the United States”, China’s state news agency Xinhua quoted the North’s Foreign Ministry as saying.

    It added that diplomatic missions should consider evacuation. North Korea would provide safe locations for diplomats in accordance with international conventions, Xinhua quoted the ministry as saying in a notification to embassies.

    Britain said its embassy in Pyongyang had been told by the North Korean government it “would be unable to guarantee the safety of embassies and international organizations in the country in the event of conflict from April 10th”.


    “We believe they have taken this step as part of their continuing rhetoric that the U.S. poses a threat to them,” Britain’s Foreign Office said.

    It said it had “no immediate plans” to evacuate its embassy and accused the North Korean government of raising tensions “through a series of public statements and other provocations.”

    A Polish spokesman said Warsaw saw the latest statements by Pyongyang as “an inappropriate element of building up the pressure and we obviously think that there is no risk from outside on North Korea”. He added that the Polish embassy saw no need to move staff out.

    “This question has been directed to all embassies that are on the ground in Pyongyang,” a Swedish Foreign Office official said.

    Under the Vienna Convention that governs diplomatic missions, host governments are required to help get embassy staff out of the country in the event of conflict.

    Russia’s Foreign Ministry said North Korea had “proposed that the Russian side consider the evacuation of employees in the increasingly tense situation”, according to a spokesman for its embassy in Pyongyang.

    Moscow said it was “seriously studying” the request. A statement from its foreign ministry said Russia hoped all parties would show restraint and considered “whipping up military hysteria to be categorically unacceptable.”



    In a fusillade of statements over the past month, North Korea has threatened to stage a nuclear strike on the United States, something it lacks the capacity to do, according to most experts, and has declared war on South Korea.

    Military analysts say North Korea might be able to hit some part of the United States, but not the mainland and not with a nuclear weapon.

    The threats against the United States by North Korea’s young leader Kim Jong-un are “probably all bluster”, said Gary Samore, until recently the top nuclear proliferation expert on President Barack Obama’s national security staff.

    The North Koreans “are not suicidal. They know that any kind of direct attack (on the United States) would be end of their country,” he added.

    On Friday, South Korean media reported that North Korea had placed two of its intermediate-range missiles on mobile launchers and hidden them on the east coast of the country in a move that could threaten Japan or U.S. Pacific bases.

    The report could not be confirmed.

    Speculation centered on two kinds of missiles, neither of which is known to have been tested.

    One is the so-called Musudan missile which South Korea’s Defence Ministry estimates has a range of up to 3,000 km (1,865 miles). The other is the KN-08, believed to be an inter-continental ballistic missile.

    The North has always aggressively condemned the regular military exercises held by U.S. forces and their South Korean allies, but its reaction to this year’s has reached a blistering new pitch.

    “The rhetoric is off the charts,” said Victor Cha, former director for Asian affairs at the White House National Security Council.

    The verbal assaults from Pyongyang have set financial markets in South Korea, Asia’s fourth largest economy, on edge.

    South Korean shares slid on Friday, with foreign investors selling their biggest daily volume in nearly 20 months, hurt after aggressive easing from the Bank of Japan sent the yen reeling, as well as by the tension over North Korea.

    “In the past, (markets) recovered quickly from the impact from any North Korea-related event, but recent threats from North Korea are stronger and the impact may therefore not disappear quickly,” Vice Finance Minister Choo Kyung-ho said.

    Kim Jong-un, 30, is the third member of his dynasty to rule North Korea. He took over in December 2011 after the death of his father Kim Jong-il, who staged confrontations with South Korea and the United States throughout his 17-year rule.

    Some fear the young leader of the isolated communist state may view the risk of conflict as one worth taking.

    “We don’t understand this new guy at all. And if the North Koreans move to provoke the South, the South is going to retaliate in a way we haven’t seen before,” Cha said.




    What They Told Us: Reviewing Last Week’s Key Polls

    Rasmussen Polls

    Bottom of Form

    Saturday, April 06, 2013

    Americans like a level playing field, but that’s not what they see these days.

    As April 15 approaches, half of Americans think they are paying more than their fair share in taxes to Uncle Sam

    Forty-eight percent (48%) think the federal government puts more focus on making Wall Street profitable than on making sure the U.S. financial system works well for all Americans. 

    Scott Rasmussen’s weekly newspaper column says that to fight inequality, it’s time to end the college admissions scam.  There is a problem when “some people earn big bucks simply because they can game the system in ways that aren’t available to most Americans,” he says. “In America today, one of the biggest parts of gaming the system unfairly can be traced to the elite universities.”

    Seventy-one percent (71%) believe accepting only the most qualified students for admission is better than giving preference to alumni families, just 23% mistakenly believe that’s the way it works. Most Americans don’t think it’s fair for colleges to give special treatment to children of large donors

    On other topics, most Americans don’t believe the federal government has the constitutional authority to tax bank deposits as they did in Cyprus to help fund a bank bailout. But 46% think it’s at least somewhat likely that the U.S. government will try to tax money in individual bank accounts

    Fewer than half of voters now believe the federal government should have the final say when it comes to environmental protection, and they remain critical of the Environmental Protection Agency and its impact on the economy. 

      In advance of Friday’s disappointing report on job creation, the Rasmussen Employment Index had fallen for three straight months. Workplace confidence in the labor market is at the lowest level since November.

    There also is growing concern about the long-term prospects for the economy. Only 36% of Americans now think the U.S. economy will be stronger five years from today.  That’s the lowest level of long-term confidence we’ve ever measured. Sixty-four percent (64%) felt that way in early March 2009, but confidence has been declining ever since. Looking in the short term, 32% say the U.S. economy will be stronger a year from today, but 46% feel it will be weaker. 

    Americans remain pessimistic about the housing and stock markets, too. Just 19% think the stock market will be higher a year from today. Nearly half (48%) of adults still think it will take housing prices more than three years to recover from the downturn that began in 2008.

    On Friday, 27% of consumers said their personal finances are getting better, but 38% felt they are getting worse. 

    Fifty-nine percent (59%) of all Americans think it’s at least somewhat likely that the United States will soon face another financial industry meltdown similar to the 2008 crisis. 

    Most voters (55%) still believe policies that encourage economic growth are more important than those promoting economic fairness, but they’re also less convinced that there is a conflict between the two

    Most Americans continue to see poverty as a problem in the United States, but only 10% actually claim they are living in poverty. 

    America Works founder Peter Cove joins Scott Rasmussen on this weekend’s edition of What America Thinks to discuss his life’s work fighting poverty and how his private company is finding jobs for many thought to be unemployable. Democratic consultant Emily Tisch Sussman and the Winston Group’s Kristen Soltis Anderson are also on hand to discuss the ongoing debate over gun control.

    The weekly television show, hosted by Scott Rasmussen, is carried on 62 stations around the country. WKYT, in Lexington, Kentucky is the newest affiliate. Beginning this week, the CBS station will air the show at 9:30 on Sunday morning. Find a station near you.

    Support for requiring a strict background check to buy a gun remains high, but 51% of voters believe these checks will not reduce the level of violent crime in America.

    Forty-one percent (41%) think the federal government should maintain a database with the names and addresses of all gun owners in the United States. Slightly more (47%) disagree and oppose a government database of all gun owners. Most Democrats strongly favor such a database, but most Republicans and unaffiliated voters are opposed.

    Forty-four percent (44%) of all voters believe it is at least somewhat likely that the government will try to confiscate all privately owned guns over the next generation or so.

    This distrust of government is a major factor in the immigration debate as well.

    Most voters are willing to support immigration reform only if it includes both border security and a way for some illegal immigrants to remain in the country.  While 59% favor a comprehensive reform plan, just 26% support a plan without tougher border control. Only 39% favor a plan that would secure the borders but does not allow illegal immigrants who are otherwise law-abiding to stay here. A big problem for reformers, though, is that most voters don’t trust the government to really try to secure the border.

    Most voters continue to like the health care they get but remain more critical of the overall U.S. health care system.  However, the majority also still expects the system to get worse in the near future as President Obama’s health care law kicks in.

    The president continues to earn just over 50% job approval in the daily Presidential Tracking Poll. But for the month of March, Obama’s total Job Approval Rating fell another point from 53% in February to 52%. In December, it reached 56%, the highest level since May 2009. Prior to the election, that rating had remained in the narrow range of 44% to 49% for two years straight.

    Democrats lead Republicans again this week on the Generic Congressional Ballot

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    Take the Rasmussen Challenge.

    In other surveys last week:

    – Thirty-five percent (35%) of Likely U.S. Voters say the country is heading in the right direction. That compares to 29% a year ago at this time.

    –Following the recent major computer attack on South Korea, Americans continue to worry about the safety of this nation’s computer systems, and 55% believe a foreign attack on them should be viewed as an act of war. 

    – While most voters continue to view global warming as a serious problem, 61% think it is more important to find news sources of energy than to fight climate change.  This question was asked in the context of the Keystone XL pipeline which most voters want built.

    Most Americans don’t approve of the decision to tax bank accounts as part of a bank bailout in Cyprus but think it’s likely other European countries will resort to similar plans to fight their massive deficit problems. 

    – Belief in the importance of Easter is down slightly, but nearly half of Americans still planned to attend a religious service to celebrate the holiday last Sunday. 

    – At the beginning of the week, 61% of American Adults had filed their federal income taxes

    Subscribers to Rasmussen Reports receive more than 20 exclusive stories each week for less than a dollar a week. Please sign up now. Visit the Rasmussen Reports home page for the latest current polling coverage of events in the news. The page is updated several times each day.

    Wall Street Journal profile called Scott Rasmussen “America’s Insurgent Pollster.” The Washington Post described him as “a driving force in American politics.”  If you’d like Scott to speak at your conference or event, contact Premiere Speakers Bureau.


March 30 2013




Cutting out the middleman

Systems buying and developing insurance plans

By Melanie Evans

Posted: March 23, 2013 – 12:01 am ET


One of the nation’s largest not-for-profit hospital operators is building its own insurance arm to sell health plans directly to employers.

Catholic Health Initiatives, which operates more than six dozen hospitals in 17 states, has hired a half-dozen former insurance executives and acquired the majority stake in a Washington insurer under a push to prepare for coming changes to hospital and physician reimbursement structures. The changes will increase providers’ financial risk in ways that policymakers hope will create new incentives to eliminate waste and improve overall healthcare quality.

The Englewood, Colo.-based system is not alone in jumping into the insurance game. The Detroit Medical Center and Partners HealthCare recently acquired insurers. Two Georgia health systems last December announced plans to launch an insurer within a year. Piedmont Healthcare and WellStar Health System said the newly created insurer would cover their combined 35,000 workers and dependents, and enrollment was projected to grow to 160,000 in five years.

Demands from employers and policymakers to slow health spending are driving healthcare systems’ push into insurance. New initiatives that save money by eliminating waste, improving quality and promoting health require access to data captured by insurers, industry executives and experts say. That data can identify how often and what care patients receive—or don’t—and help providers identify possible targets to bolster care. Competition and consolidation among insurers may also be behind the deals.

CHI—which last year reported 6 million physician visits, 1.3 million emergency room visits and 1.7 million days of hospital care—is building its insurance operations and its capacity to enter into contracts with private insurers for riskier incentive-based contracts that will match the scale of its clinical operations across the country, said Michael Rowan, chief operating officer for the health system.

CHI won’t entirely cut out insurers. “We see ourselves in the future, in some cases, working as we do now with insurance companies,” Rowan said. But the system will continue to acquire health insurers, and in some markets will position itself to compete for employers’ business with a full benefit package and a network of providers inside and outside the hospital.

Deborah Chollet, a Mathematica Policy Research senior fellow, called hospitals’ entry into the insurance market a natural evolution toward more integrated delivery systems. It follows a wave of physician hiring in recent years. Hospitals may also be responding to consolidation among insurers, she said.

But hospitals’ broadening business model isn’t without risk. “It’s a culture shift for them,” Chollet said, one that will require more aggressive use of information technology and new incentives for physicians and hospitals that promote prevention and primary care instead of relying on high-volume delivery of acute and specialty care. “It certainly isn’t impossible, but it’s not something that happens overnight,” she said. “It really is a change in how healthcare is perceived all the way up and down the line.”

CHI’s push is part of a broader strategy to expand its reach and control over healthcare delivery beyond the hospital. In 2010, the system acquired a Cincinnati home health company with 30 locations in three states. Continued hiring has brought the total number of CHI’s employed physicians to roughly 3,000. The health system, which totaled $10.9 billion in revenue last year, wants to generate roughly two-thirds of its revenue from operations other than hospitals in coming years.

Just as hospitals have acquired insurers, health insurers have moved to acquire providers. UnitedHealth Group purchased the independent practice association Monarch HealthCare early last year. Insurer Humana purchased Concentra, an occupational and urgent care clinic company, for $780 million in December 2010.

Earlier this month, CHI closed on its acquisition of the Washington state insurer Soundpath Health for $24 million after the health system bid unsuccessfully to contract directly with Boeing to provide local workplace health benefits. Boeing spokesman Joseph Tedino said the company does not comment on negotiations or proposals. “In the normal course of business, Boeing continues to look for opportunities to improve the quality and control the cost of the healthcare benefits provided to our employees and their dependents,” he said.


The insurer claimed 9% of the Medicare Advantage market in the nine Washington counties where it operated as of last October. Catholic Health Initiatives plans to continue building its Washington state clinical network and insurance capabilities should “any employer in that community” seek to contract directly with the system, Rowan said.

Rowan anticipates employers will continue to move in the direction of contracting directly with health systems as they seek to reduce their healthcare costs. Even though CHI plans to slash $2 billion from its overall cost structure over the next four years, it will continue investing in its new insurance arm. “We think markets can turn in a hurry,” he said. ?trk=tynt



Furlough Watch: Agency-by-Agency Impacts of Sequestration

March 22, 2013

The across-the-board budget cuts known as sequestration now scheduled to hit in two days would have serious implications for federal workers, including mandatory unpaid furloughs for hundreds of thousands of employees, beginning in April. We have compiled a list of possible agency-by-agency effects, should Congress and President Obama fail to reach a deficit reduction agreement in time to avoid the cuts. We will update the list as more information becomes available.

Agriculture Department: Agriculture Department Undersecretary for Food Safety Elizabeth Hagen told a House Appropriations subcommittee that all 9,212 meat safety workers will be furloughed for 11 non-consecutive days starting in mid-July, Reuters reported. She said that Agriculture was looking for additional savings to avoid and possibly reduce the number of furlough days.


Air Force: The Washington Post reported that employees in combat zones, non-appropriated funds employees, and foreign nationals would be excepted from furloughs. The Post also said that further exceptions would be allowed for “safety of life or property.” An Air Force spokeswoman told Government Executive that all Air Force civilian police, security guards and firefighters would be subject to furlough “except at installations where the manning level is under 25 percent.”

Army: The Army formally clarified its furlough plans in a memo published March 20. Officials wrote that the Office of the Secretary of Defense had excepted employees deployed in a combat zone, non-appropriated fund employees, foreign national employees, political appointees, civilians funded through the National Intelligence Program and Foreign Military Sales workers. The memo also included overtime exceptions for workers ensuring “health, safety, and security of personnel or property.”

Broadcasting Board of Governors: The agency does not anticipate needing to furlough employees this year, according to a memo obtaind by Government Executive. BBG is required to reduce spending by approximately 5 percent, or $37.6 million, by September 30, the memo said. It will do so by freezing hiring, eliminating bonuses, postponing technical upgrades and reducing broadcasts.

Customs and Border Protection: Started sending furlough notices to all 60,000 of its employees on March 7. The furloughs are slated to begin April 21 and will be spread over several pay periods. Full time employees will be furloughed no more than 14 workdays, and part-time employees will have their furlough time pro-rated.

Defense Department: Secretary Leon Panetta on Feb. 20 informed lawmakers that sequestration would force the Pentagon to put the “vast majority” of its 800,000 civilian workers on administrative furlough. The furloughs would begin in late April and would occur one day a week for up to 22 discontinuous work days. (See separate Air Force and Army entries.)

Education Department: Secretary Arne Duncan testified Feb. 14 before the Senate Appropriations Committee that he expected furloughs. “The sequester would … likely require the department to furlough many of its own employees for multiple days,” he wrote in a Feb. 1 letter to the committee.” The letter did not provide an exact number of employees who would be affected.

Environmental Protection Agency: Employees could be subject to as many as 13 furlough days, according to a Feb. 26 internal message from acting Administrator Bob Perciasepe. “We are working to minimize the burden on employees and maintain our ability to do our job,” he wrote. “Decisions are not final yet, but one of the ways in which we are trying to soften the impact is by evaluating the furlough need in phases.” For instance, the agency is looking into requiring four furlough days before June 1, and then reevaluating the budget situation to see if further furloughs are necessary.

Federal Aviation Administration: Almost all 47,000 workers would be furloughed for one-to-two days per pay period, according to Transportation Secretary Ray LaHood and FAA head Michael Huerta. Employees should be prepared for 11 furlough days, beginning as early as April 7, according to a Washington Post update. Air traffic control towers at 100 airports would be closed, and midnight shifts at many smaller airports would be dropped. This could lead to 90-minute delays during peak travel times for flights to major cities, LaHood and Huerta said in their Feb. 22 letter to airline industry groups and unions. The FAA announced on March 22 that 149 federal contract towers would be shuttered beginning April 7.

Federal courts: 20,000 employees could be furloughed for 16 days.

Government Accountability Office: Plans to avoid furloughs, according to The Washington Post. But, the sequester would affect hiring, employee benefits and travel and contract spending, according to Feb. 26 testimony from Comptroller General Gene Dodaro.


Government Printing Office: Will save money by scaling back technology and other investments, but “if necessary, a furlough of GPO’s workforce may also be implemented,” acting Public Printer Davita Vance-Cook testified before a House subcommittee on Feb. 26.

Homeland Security Department: Law enforcement personnel would face furloughs of up to 14 days, DHS Secretary Janet Napolitano said in a Feb. 13 letter to House lawmakers. She did not provide a specific number of employees affected but said it would be a “significant portion” of the department’s front-line law enforcement staff (see Customs and Border Protection and Transportation Security Adminsitration entries).

Housing and Urban Development: A memorandum of understanding signed by agency executives and union officials says seven unpaid furlough days for employees won’t happen until May 24. A union representative told Government Executive that the department would shut down on furlough days, except for the Government National Mortgage Association and the inspector general’s office, neither of which are paid from the HUD salaries and expenses account.

Interior Department: Secretary Ken Salazar has warned about furloughs of thousands of employees. The National Parks Service plans to furlough permanent staff if other cost-savings measures fail.

Internal Revenue Service: Employees could expect a total of five to seven furlough days by the end of the fiscal year on Sept. 30, acting Commissioner Steven T. Miller said in a memo to employees. The furloughs would begin “sometime in the summer, after the filing season ends,” he wrote. Employees would have no more than one furlough day per pay period.

Justice Department: Would furlough hundreds of federal prosecutors, according to the White House. FBI Director Robert Mueller has said $550 million in cuts to the bureau “would have the net effect of cutting 2,285 employees — including 775 agents — through furloughs and a hiring freeze,” according to the FBI Agents Association. The Office of Management and Budget on Feb. 27 said Justice had already sent out formal furlough notices.

Labor Department: Sent 4,700 employees furlough notices on March 5. A document posted on the department’s website said furloughs would begin on April 15, and continue through Sept. 21. All furlough scheduling would begin on March 29, and half of the furlough hours must be taken by July 13.

National Institutes of Health: Director Francis Collins said during a Feb. 25 conference call with reporters that the agency would “do everything we can to avoid furloughs.” He said that furloughs would barely help the agency manage a 5 percent cut since a bulk of the budget was spent on grants and funding for research. Areas that could face the axe include travel and conference spending, Collins said.

National Labor Relations Board: Has issued formal furlough notices, according to OMB.

National Park Service: In a March 20 statement, NPS said that sequestration-related budget cuts would force reduced visitor hours at several major attractions including Independence Hall and the Liberty Bell, the Thaddeus Kosciuszko National Memorial, and the Edgar Allan Poe National Historic Site. The agency noted that the budget cutbacks did not necessitate furloughs of current staff.

NASA: 20,500 contractors could lose their jobs. The agency has not notified federal employees of any furlough possibility, but a spokesman told Government Executive on Feb. 25 that “all possible effects” of sequestration are “still being assessed.”

Nuclear Regulatory Commission: Has ruled out furloughs or salary cuts.


National Nuclear Security Administration: Acting chief Neile Miller said it might not become clear until a month into sequestration whether the agency’s employees will have to be furloughed as a result of the across-the-board federal budget cuts.

Office of Management and Budget: An OMB spokesman told Government Executive that 480 employees subject to administrative furloughs were issued notices on March 7. Employees will be required to take 10 unpaid furlough days for the pay periods between April 21 and Sept. 7.

Office of Personnel Management: Plans to find the required savings through a hiring freeze and administrative cuts, rather than furloughs.

Small Business Administration: The Small Business Administration will rely on staff cuts made through early retirements in 2012 to avoid furloughs, according to an Associated Press report.

Smithsonian: Does not anticipate furloughs.

Social Security Administration: Remains “uncertain” about reducing its employees’ hours, which would save about $25 million per furlough day, according to a Feb. 1 letter to Congress. It will instead try to reach the reduced budget level through attrition.

State Department: Won’t need furloughs, at least through June 30, according to The Washington Post.

Transportation Security Administration: Isn’t planning any furloughs; will rely on a hiring freeze and reductions in overtime, according to a union official.

Treasury Department: Acting Treasury Secretary Neal Wolin told the Senate Appropriations Committee earlier in February that the department would try to avoid furloughs by instituting hiring freezes, and reducing spending on support, travel, training and supplies, but noted that if the sequester takes effect, “most Treasury employees would face furloughs, which would have a cascading effect on employees’ families as well as on the economy at large.” The Internal Revenue Service would be particularly hard hit, he said (see separate IRS entry).

Veterans Affairs Department: Mostly exempt from sequestration.

USPS Ranks Last Among Postal Services Worldwide, Report Finds

By Eric Katz

March 22, 2013

The U.S. Postal Service ranked as the lowest-performing postal agency or commercial operator in a new global, private industry report.

The survey, released by Accenture, evaluated 24 government-operated postal organizations and two private companies that together deliver 75 percent of the world’s mail. The report found USPS burdened by legacy costs high performing agencies in other countries have shed, such as pension burdens and the “restrictive” universal service obligation.

The Postal Service has not adapted to the worldwide trend of declining mail volume by innovating new products and offering new services with flexible pricing, the report found. Mail volume decreased 12.8 percent from 2010 to 2011, according to Accenture, and the agency lost a record $15.9 billion in fiscal year 2012.


The report highlighted countries such as Singapore and Italy for their adaptability in what others have found to be trying times, as they are not bound by the same legislative roadblocks that restrict their U.S. counterpart. Those high-performers have provided new functions, such as financial services, and have used price changes to develop revenue growth.

All product price changes at USPS must be approved by the Postal Regulatory Commission, an independent agency with Postal Service oversight responsibility.

The report also surveyed commercial companies UPS and FedEx, which have effectively provided logistics services, such as sourcing, warehouse management and transportation to its clients. Successful postal agencies, such as Australia Post, have used their retail space for issuing passports, fishing licenses and motor vehicle registration.

While no mail operator has fully and embraced and integrated digital mail into its revenue model, many organizations have developed successful digital products, such as Germany’s Deutsche Post, which allows customers to send a letter using a texted code rather than a stamp.

USPS also lags behind its counterparts in adapting to its customers’ needs. Many countries have instituted 24/7 lockers for customers to pick up packages, same-day delivery — a service USPS is currently developing — return package services and package redirection.

Another burden on USPS, according to Accenture, is its monopoly on individuals’ mailboxes; some countries allow private companies to deliver mail directly to a customer’s home.

The report said the Netherlands and New Zealand have created more flexibility with employee costs by instituting a part-time workforce and a three-day delivery schedule, respectively.

USPS has dramatically reduced its workforce over the last few years through attrition, but still has 495,000 employees.



Water-Free Fracking Catching On in Texas

BY: The Texas Tribune | Texas | March 27, 2013

by Kate Galbraith

In most hydraulic fracturing operations, several million gallons of water, together with sand and chemicals, get pumped down a hole to blast apart rock that encases oil or gas. But with water increasingly scarce and expensive around Texas, a few companies have begun fracking with propane or other alternatives.

“We don’t use any water,” said Eric Tudor, a Houston-based official with GasFrac, a Canadian company that fracks with propane gel and butane. “Zip. None.” At a GasFrac operation in South Texas last month, a sticker on one worker’s hard hat showed a red slash through the word H2O.

Water-free fracking still remains an early-stage technology, with potentially higher initial costs than conventional fracking methods. But as lawmakers and oil regulators focus on the large quantity of water used for fracking wells, the concept is getting a closer look. GasFrac has led the way, bringing its propane fracking operations to Texas, and there is talk of using other substances like carbon dioxide or nitrogen.


“We’ve looked at [propane fracking], and I would say that absolutely our industry is open to all possibilities,” Michael Dunkel, the director of sustainable development for Pioneer Natural Resources, said in testimony last month before a joint hearing of the House Energy Resources and Natural Resources committees.

Waterless fracking is “a viable technology for sure,” said David Yoxtheimer, an extension associate with the Marcellus Center for Outreach & Research at Penn State University. However, he noted, there is a reason that companies use water, namely that it is “virtually incompressible” and thus is very effective in bringing pressure against, and ultimately breaking up, rock.

Currently there are no special rules on fracking with propane or other nonwater liquids in Texas, according to Christi Craddick, one of three members of the Railroad Commission of Texas, which regulates the oil and gas industry. The technology is “exciting” but still rare, she said, and no rule changes are on the horizon.

“We’ll see as the technology evolves if our rules need to evolve,” Craddick said last week in an interview.

Tudor, of GasFrac, said his company began working in Texas in 2010, after fracking its first well in Canada in 2008. It has done roughly 100 fracks in Texas so far, he estimated. (Some wells get fracked multiple times.) Much of the work has been in South Texas. A recent job bored into the San Miguel formation, which is a relatively shallow formation in the vicinity of the Eagle Ford Shale. But GasFrac has also done “a couple of prototype fracks” in West Texas, he said.

“We’re just getting started,” Tudor said.

Academics see a number of challenges associated with propane fracking, which few if any companies are experimenting with in Texas, apart from GasFrac. First, according to Yoxtheimer, “you’ve got to truck in a lot of propane,” which can be expensive. He also said the propane “works less effectively in deeper formations where you need to build up more pressure.”

Tudor disagrees that these issues pose problems. He pointed out that the virtually all the propane — which is a byproduct of natural gas processing and oil refining — gets reused. Supplies of propane come from Corpus Christi, he said, and the fuel is “easily available” in South Texas. “We won’t cause any shortages,” he said.

That is an implicit contrast with the considerable water needs of conventional fracking, which already accounts for a double-digit percentage of water use in some rural Texas counties. The water leftover from fracking operations typically does not get reused. Instead, it gets discarded into a disposal well. (The Texas Railroad Commission on Tuesday approved rules to make it easier for companies to recycle water.)

Tudor also said that his company had fracked at depths well over 10,000 feet.

An advantage of propane fracks, said Yoxtheimer, is that they avoid the damage to the oil and gas-producing formation that water can cause.

“If you’re using water, the water can actually block off or at least impede the flow of hydrocarbons,” he said.

Tudor agreed, saying that his company could recover a higher percentage of the oil or gas with propane than with a traditional water frack job. It was this increased production, rather than the reduced use of water, that enticed GasFrac’s customers, he said.

David Burnett, research coordinator at the Department of Petroleum Engineering at Texas A&M University, said that more study is needed. Evidence that the wells fracked with propane are more productive is “sort of anecdotal data,” he said.


As for the risks of handling flammable material like propane, “Our industry is used to handling high-pressure gas and pumping flammable liquids,” Burnett said. “It’s not an issue if the equipment is designed properly.” The risks, he added, are “no more worrisome than a propane tank on the edge of town.”

Tudor said that his company had done 2,000 or more fracks by now, with only one “minor incident in Canada” in which a worker got blisters while some equipment was being shut off. Any leaks, Tuder said, can be “quarantine[d], and “we’re always hooked up to a flare” that can release the gas if needed. The company uses thermal cameras to monitor “hot areas” remotely.

As GasFrac’s technology spreads, other companies are also trying to use less water. In testimony last month before the joint hearing of the House Natural Resources and House Energy Resources committees, Glenn Gesoff, an official with BP who also chairs the water committee of the Texas Oil and Gas Association, told lawmakers that there were “a number of tests going on” in waterless fracking and fracking that uses significantly less water. In addition to propane, he said, work is ongoing with carbon dioxide and nitrogen.

“They’re in the development phase,” Gesoff said. “There are some safety concerns.”

Marathon Oil has begun using a new formula, which it describes as a “guar mix commonly used in ice cream and other food products,” to reduce its water use. Guar is a small bean that can thicken water, and the thicker fluid can carry the sand and other elements “while simultaneously using less water,” Lee Warren, a Marathon Oil spokesman, said in an email.

Over the last 18 months, she said, Marathon has cut its water use by 45 percent per well.

Cyber Attack Thought to Originate in Russia

A massive cyber attack targeting a European spam-fighting group that slowed some global Internet traffic to a crawl appears to have been launched by a gang of hackers from Russia and neighboring countries, says the head of a Russian firm specializing in defending against such attacks.

By Lukas I. Alpert

MOSCOW–A massive cyber attack targeting a European spam-fighting group that slowed some global Internet traffic to a crawl appears to have been launched by a gang of hackers from Russia and neighboring countries, says the head of a Russian firm specializing in defending against such attacks.

Alexander Lyamin, of Moscow’s Highload Labs, says he believes the same group who have caused trouble around the world with their attack against the non-profit Spamhaus Project Ltd. had earlier launched a series of brief strikes on several top Russian Internet companies as a trial run of their weapon known as a Domain Name System amplification attack.

“We first noticed incidents utilizing this technique a month-and-a-half ago in Russia. It started with a measly 10-20 gigabytes per second, but during the next month it grew to 60 and then 120 gigabytes. Apparently the attackers were growing their network of hacked servers,” Mr. Lyamin said.

The attacks against Spamhaus began on March 19 and appeared to have subsided on Wednesday. Some experts said the attack grew to as large as 300 gigabytes per second, which would make it the largest ever seen, although others–including Mr. Lyamin — dispute that.


A DNS amplification attack works by manipulating the basic system by which the Internet operates wherein a series of domain name system servers convert searches for particular sites, like, to their INS address which is actually a numerical code and makes the connection. The attack utilizes a network of hacked DNS servers to answer fake messages that appear to come from a targeted site with much larger responses. While this cripples the target site, it also severely slows the DNS server which results in bogging down scores of other searches. In the Spamhaus attack, experts have said they believe millions of web surfers were affected.

Spamhaus has accused Dutch Web-hosting company Cyberbunker for being behind the attack in a tit-for-tat retaliation for Spamhaus putting Cyberbunker on a blacklist for allegedly allowing vast amounts of spam to be sent through its servers.

Spokespeople for Cyberbunker and Spamhaus did not immediately respond to messages seeking comment. In a statement on its Website, Spamhaus said “a number of people have claimed to be involved in these attacks. At this moment it is not possible for us to say whether they are really involved.”

While Mr. Lyamin would not name the Russian companies that were the earlier targets because of “the very sensitive nature of this matter,” but said they included services used by Russians every single day.

“The targets were companies with good visibility and big names, but the attacks were only for a short duration of time. We think it was done for bragging rights. Also lots of Internet trash was targeted–porn, scam, drugs, piracy, etc. It was like a child playing Robin Hood or something,” he added.

He said the targeting of Russian companies, and the fact that the attacks tended to begin during daylight hours in Russia’s timezone, led his team to believe the attacks were launched by “a group of Russians or from our closest neighbors.”

Mr. Lyamin says he suspects whoever was behind the spam that Spamhaus had targeted had hired the hackers to launch the attack, which he said is a copycat of one undertaken in October 2010, about 20% smaller by volume of traffic.

“This is not new,” he said. “And I really doubt this is the biggest.”


Will China finally ‘bite’ North Korea?

By Jennifer Lind, Special to CNN

updated 3:09 PM EDT, Thu March 14, 2013

(CNN) — North Korea, China’s longtime ally, has vexed Beijing for years with its rocket launches, nuclear tests, kidnapping of Chinese fishermen and other erratic behavior. Yet, Beijing has run interference at the United Nations to temper punishments against Pyongyang, and has even helped Pyongyang circumvent sanctions.

In the wake of North Korea’s third nuclear test in February, its reckless threats to strike the United States, and now — its decision to scrap the armistice that ended the Korean War — has China finally had enough?

Beijing signed on to sanctions that, in the words of Susan Rice, U.S. ambassador to the United Nations, will “bite and bite hard.” China’s ambassador to the U.N. declared Beijing’s commitment to “safeguarding peace and stability on the Korean peninsula.”

One shouldn’t exaggerate the significance of these recent developments. After all, in the U.N. negotiations over sanctions — this time as before — the Chinese have consistently played the role of watering down the degree of punishment imposed against Pyongyang. And in the past Chinese firms have helped North Koreans evade sanctions. It remains to be seen whether Beijing intends to enforce the new measures.

As rhetoric heats up, North Koreans ready to ‘rain bullets on the enemy’

Beijing also has good reasons that continue to make it reluctant to crack down on its unruly ally. The Chinese perceive that they have a powerful interest in maintaining the status quo. As hard as it is to live with North Korea, Beijing fears it may be harder to live without it.

The Chinese worry that coming down hard on Pyongyang, by cutting off their vital oil or food exports, could trigger a collapse of the North Korean government or other political instability on the peninsula. Beijing’s nightmares include a loose nukes problem and a humanitarian disaster.

Beijing also has fears about the effects of a North Korean collapse on the strategic balance in East Asia. If North Korea collapsed and the two Koreas unified, China might find astride its border a unified, U.S.-aligned Korea hosting American troops.

Chinese analysts also commonly argue that North Korea serves as an important distraction for the U.S. military, which might otherwise train its focus on defending Taiwan.

Thus, despite the nuisance that North Korea regularly makes of itself, for all these reasons, it would be sorely missed by Beijing.

But the days of “lips and teeth” (Mao Zedong’s’s famous statement about the closeness of Sino-North Korean relations) are clearly over. Chinese scholars and analysts increasingly express open frustration with Pyongyang’s behavior. In the wake of North Korean piracy against Chinese fishermen, Chinese microblogs overflowed with outrage.

Most recently, in a meeting of an advisory group to the Chinese government — the Chinese People’s Political Consultative Conference — participants openly debated the question: whether to “keep or dump” North Korea?

The two countries have evolved from vitriolic BFFs to East Asia’s odd couple. When China and North Korea formed their alliance, the countries were both poor, weak, resentful, isolated, and the target of cold-war containment by the United States and its allies.

While North Korea is still that country, China is emphatically not. China’s remarkable four decades of economic reform and growth have catapulted it to wealth and power — China is a global power, with global interests. China has a deep stake in maintaining stability in order to sustain its pathway to prosperity.

China’s relationship with the United States can be tense. But quite unlike in the days of Mao, the two countries are vital trade partners that share a vast array of ties and often overlapping interests.

Beijing also values its relationship with South Korea, which Pyongyang’s provocations seriously jeopardize. Booming trade flows, warm political relations, and deeply intertwined ties have created a relationship that makes it increasingly awkward for Beijing to look away when North Korea murders South Koreans as it did in 2010 (with the sinking of the South Korean vessel Cheonan that killed 46 sailors, and when it shelled Yonpyeong Island).

China is a great power that is increasingly concerned with its standing in the world, and with cultivating “soft power.” Beijing’s support for North Korea’s ruthless, bloody regime — that attacks its neighbors, and brutalizes its people at home — only draws attention to China’s own human rights failings, and undermines China’s soft power.

Because the specter of North Korea’s collapse could potentially destabilize the Korea peninsula, Beijing may continue to shield Pyongyang. But the two countries’ increasingly divergent interests suggest that China’s dissatisfaction with North Korea is only likely to grow.


Photo from Kim Jong Un’s war room reveals North Korea’s ‘U.S. mainland strike plan’

Washington Post

By Max Fisher, Updated: March 29, 2013

Update, 12:50 p.m., EDT: The Associated Press believes that this photo from North Korean state media may have been digitally altered, which has certainly happened before. If it were, that would seem to underscore North Korea’s intent to send a specific propaganda message with the photo.

North Korea’s state media agencies have been releasing a slew of photos showing the country’s actual military build-up, which we are meant to understand is a prelude to war. They are probably bluffing, but you have to admire their attention to detail.

Early on Friday, the Korean Central News Agency released the above photo. Reuters, using the KCNA information, passed on the photo with a caption that began, “North Korean leader Kim Jong Un presides over an urgent operation meeting on the Korean People’s Army Strategic Rocket Force’s performance of duty for firepower strike at the Supreme Command in Pyongyang.” According to Reuters, the large chart on the left bears the title, “Strategic force’s plan to hit the mainland of the U.S.”

James Pearson of NK News also looked at the photo, writing in a post that “plans for a strike on the U.S. mainland are clearly – and therefore probably deliberately – visible.” Pearson says that the photo has been published in the North Korean newspaper Rodong, which is widely distributed and often displayed in public.

The chart also appears to show a series of lines shooting out of North Korea and landing on major U.S. cities on the East and West coasts, as well as Hawaii.

Let’s be clear about two things before we go any further. First, as Pearson notes, this is almost certainly for domestic propaganda purposes, which is why it’s displayed so clearly. Second, North Korea does not even have the military capability to strike any American cities, particularly not on the East coast. “Red Dawn” was a work of fiction.

Now to the photos. NK News has kindly granted me permission to repost Pearson’s annotations of the images, which appear to show the plan’s “targets.” (He did ask me to point readers toward the NK News daily e-mail service, which I can recommend without reservation.) Here’s the first, with the chart labeled “U.S. Mainland Strike Plan”:

Pearson then superimposed a Google map of the United States and the Pacific over the chart, which shows pretty clearly that the “targets” line up with major U.S. cities on the West and East coasts.






Lithium-ion battery melts, another catches fire in Mitsubishi vehicles

Japan Times

JIJI, Bloomberg

Mar 29, 2013

Mitsubishi Motors Corp. said two lithium-ion battery packs suffered accidents last week.

A charged battery melted March 21 in an Outlander PHEV at a dealership in Kanagawa Prefecture before the vehicle was sold, Mitsubishi Motors said Wednesday.

The automaker also said a lithium-ion battery pack in an i-MiEV electric vehicle caught fire during a charging test at a plant in Kurashiki, Okayama Prefecture, on March 18.

Both batteries were produced by Lithium Energy Japan, a joint venture set up by Mitsubishi Motors, GS Yuasa Corp. and trading house Mitsubishi Corp.

GS Yuasa, based in Kyoto, manufactured the lithium-ion batteries that have been malfunctioning on Boeing Co.’s 787 Dreamliner aircraft.

Ryugo Nakao, director of MMC, told reporters that he cannot comment on whether there are any links between the problems at the automaker and Boeing.

Nakao said it was possible a metallic fragment may have been mixed in during the manufacturing process, causing the battery to short out.


“We will find the cause of the trouble in about one to two weeks,” he said.

Boeing Co. said Wednesday that the fire in a lithium-ion automobile battery built by GS Yuasa is unrelated to overheating that prompted the worldwide grounding of the composite plastic jet.

“We have been assured that the battery in question is fundamentally different from the 787 battery both in its construction processes, design, and chemistry,” said Marc Birtel, a Boeing spokesman.

He said GS Yuasa reported the fire to Boeing, which is working toward government approval of a battery fix that would let the Dreamliner return to commercial service.

Mitsubishi Motors will halt production and sales of the Outlander PHEV for the time being while calling on owners not to charge their vehicles from an external power source.

The company will also consider whether it is necessary to recall the vehicle.

So far, some 4,000 units have been sold since the Outlander PHEV was released in January. The company said nobody was injured in the i-MiEV battery fire.

Mitsubishi Motors is investigating the cause of the fire and production of i-MiEVs and Minicab-MiEV commercial electric vehicles using batteries from Lithium Energy will be suspended.

The 787′s lithium-ion batteries have been under scrutiny by U.S. regulators after one caught fire on a parked jet in Boston and another began smoldering and smoking, prompting an emergency landing at Takamatsu Airport in Kagawa Prefecture.

Boeing performed a test flight March 25 with its proposed fix and plans a second 787 flight in the “coming days” before submitting the changes to the Federal Aviation Administration for approval.

Although Boeing hasn’t found the cause of its lithium-ion battery malfunctions, the Chicago-based company said March 15 that changes to the design and added safeguards, such as a new enclosure and a vent line, will ensure safety.

Boeing, which has a backlog of more than 800 Dreamliners with a list price starting at about $207 million, has halted deliveries until commercial service resumes.




Graphene Hybrid Material Comes to the Rescue of Li-ion Battery-Powered Vehicles

IEEE Spectrum

POSTED BY: Dexter Johnson

March 28, 2013


Researchers at Rice University believe a hybrid material they have developed combining vanadium oxide (VO2) and graphene could revitalize the use of lithium-ion (Li-ion) batteries for powering all-electric vehicles.

While Li-ion batteries for hybrid vehicles have enabled that car segment to grow rapidly over the years, the all-electric vehicle has languished as a niche market. This is in large part because Li-ion batteries just don’t have the charge life or short recharging capabilities for them to make sense for most people’s driving habits. The demise of companies that have developed nanomaterials for Li-ion batteries in all-electric vehicles, like A123 Systems and Ener1, underscores just how difficult it has been to get Li-ion batteries to perform at levels necessary to make electric vehicles to take a stronger foothold in the market.

To address this shortcoming, Pulickel Ajayan, professor of engineering at Rice, and his team turned to the well-characterized use of VO2 for cathodes because of their high energy and power density. While vanadium pentoxide has been used in Li-ion batteries, oxides have not been so readily adopted because they have a low electrical conductivity that translates into slow charge and discharge rates.

Ajayan and his team overcame this problem by essentially baking graphene into the VO2, a process that imparted graphene’s high electrical conductivity into the ribbon-like hybrid material that makes up the cathodes. The graphene is able to pass its conductivity to the hybrid material even though the VO2 accounts for 84 percent of the cathode’s overall weight.

The challenge for the researchers was finding the right method for “baking” the graphene into the VO2. In a process described in the journal Nano Letters, the researchers suspended graphene oxide nanosheets along with vanadium pentoxide in water and then heated the suspension for hours in an autoclave. The result was that the vanadium pentoxide had been reduced into vanadium oxide and had taken the form of crystallized ribbons, and the graphene oxide had been reduced to graphene. When characterized, the VO2 ribbons had a web-like coating of graphene and were about 10 nanometers thick, 600 nanometers wide, and tens of micrometers in length.

“These ribbons were the building blocks of the three-dimensional architecture,” said Shubin Yang, lead author of the research, in a press release. “This unique structure was favorable for the ultrafast diffusion of both lithium ions and electrons during charge and discharge processes. It was the key to the achievement of excellent electrochemical performance.”

As far as performance, the cathodes are capable of holding 204 milliamp hours of energy per gram and remained stable after 200 cycles even at high temperatures (75 degrees Celsius).

“We think this is real progress in the development of cathode materials for high-power lithium-ion batteries,” Ajayan said in the press release. “This is the direction battery research is going, not only for something with high energy density but also high power density. It’s somewhere between a battery and a supercapacitor.”


Cyprus details heavy losses for major bank customers

By Karolina Tagaris, Reuters

Mar 31, 2013 01:35 AM EDT

The Washington Post Published: March 30

NICOSIA, Cyprus — Major depositors in Cyprus’ biggest bank will lose around 60 percent of their savings over 100,000 euros, the central bank confirmed Saturday, sharpening the terms of a bailout that has shaken Europe but saved the island from bankruptcy.

Initial signs that big depositors in the Bank of Cyprus would take a hit of 30 to 40 percent — the first time the euro zone has made bank customers contribute to a bailout — had already unnerved investors in European lenders last week.

But the official decree published Saturday confirmed a Friday report that the bank would give depositors shares worth just 37.5 percent of savings over 100,000 euros ($128,200). The rest might never be paid back.

The terms send a clear signal that the bailout means the end of Cyprus as a hub for offshore finance and could accelerate economic decline on the island.

Banks reopened to relative calm Thursday after the imposition of the first capital controls the euro has seen since it was launched a decade ago. Cypriots, however, are angry at the price attached to the rescue — the winding down of the island’s second-largest bank, Cyprus Popular Bank, called Laiki, and the raid on deposits over 100,000 euros.

Under the terms of Saturday’s decree, Laiki’s assets will be transferred to the Bank of Cyprus, where about 22.5 percent of deposits over 100,000 euros will earn no interest. The remaining 40 percent will continue to earn interest, but it will not be repaid unless the bank does well.

Nicosia was filled with crowds relaxing in cafes and bars Saturday, but popular anger was not hard to find. “Europe shouldn’t have allowed this disaster to happen here. Cyprus was paradise, and they’ve turned it into hell,” said Tryfonas Neokleous, a clothes shop owner.

There are no signs that bank customers in other struggling euro-zone countries such as Greece, Italy and Spain are taking fright at the bailout precedent.

“Cyprus is and will remain a special one-off case,” German Finance Minister Wolfgang Schaeuble told Germany’s mass daily Bild. “Savings accounts in Europe are safe.”

What They Told Us: Reviewing Last Week’s Key Polls

Rasmussen Reports

Saturday, March 30, 2013

President Obama is focusing on immigration reform once again, a move signaled by his appearance on two Spanish language television networks this past week.

Voter skepticism about the federal government’s willingness to enforce immigration laws plays a major part in the debate. Historically, the United States is a nation of immigrants and a nation of laws. Voters continue to respect both traditions. Sixty-eight percent (68%) think immigration, when done within the law, is good for America. Fifty-nine percent (59%) favor comprehensive immigration reform.

But if immigration reform legislation passes, just nine percent (9%) believe it is Very Likely the federal government will actually try to secure the border. That’s an important point because, even among supporters of comprehensive reform, 64% think border security should come before legalizing the status of those here illegally.

An estimated 40% to 45% of the 11 million illegal immigrants now in the United States are people who entered the country on legal visas and then stayed after those visas expired. Most voters (55%) believe the federal government should find these illegal immigrants and make them go home.

Seventy-three percent (73%) think individual states should set limits for guest workers allowed as part of the immigration reform effort.

Support is even higher for a reform plan that includes making English the official language of the United States. Republican support increases dramatically, while support among Democrats falls only slightly. There is virtually no change among unaffiliated voters.

If someone wants to become a U.S. citizen, 54% of all voters believe they should not be allowed to keep their citizenship in any other country.

That’s why Scott Rasmussen contends in his new weekly newspaper column that “we need to move the immigration debate beyond the narrow question of how somebody enters the country. It’s time to have a healthy conversation about what happens after newcomers settle here. … What happens after immigrants get here has a lot to do with how voters will view the laws regarding how they cross the border.”

Scott’s previous column argued that it is “time to bust up the big banks,” and he’ll be joined this weekend on What America Thinks
by Mark Calabria of the Cato Institute and Patrick Sims of Hamilton Place Strategies to discuss whether the government should break up the nation’s megabanks. The weekly television show is carried on 61 stations around the country. Find a station near you.

Fifty-five percent (55%) of Americans think the government should let the largest banks and finance companies go out of business if they can no longer meet their obligations

While Americans clearly have reservations about the fairness of the U.S. economy, they’re now also almost evenly divided over whether the U.S. system of justice is fair to most in this country. Only 35% believe the system is fair to poor Americans. At the same time, Americans feel even more strongly that the biggest problem with the criminal justice system is that too many criminals are set free, not that too many innocent people are arrested.

Fifty-nine percent (59%) still support the death penalty, but only 42% believe capital punishment actually deters crime.

Just over three weeks after the sequester cuts in the growth of federal spending kicked in, voters feel a bit more strongly that they didn’t cut deep enough. Twenty-two percent (22%) still think the sequester cut the projected growth in spending too much. But twice as many (45%) think the sequester didn’t cut enough.

Fifty-one percent (51%) now say the March 1 sequester cuts in the growth of federal government spending have had no impact on their lives. Only 12% say the sequester cuts have had a major impact on them personally.

Nearly half (49%) of voters remain concerned that the federal government will not do enough to help the U.S. economy, but 64% think the best thing the government can do for the economy is to cut its spending. Even among the voters who worry the government won’t do enough to help the economy, a plurality (45%) thinks the best response is to cut government spending.

Sixty-four percent (64%) of Americans still think there are too many of their fellow countrymen dependent on the government for financial aid. Forty-two percent (42%) believe that current government programs actually increase the level of poverty in America

Americans overwhelmingly agree that the best way to stay out of poverty is to work, and they like the idea of shifting government money spent on welfare programs to jobs for the poor.

The Keystone XL pipeline is expected to create several thousand new jobs, but the president has been holding up because of environmental concerns. However, the administration is now expected to give that pro later this year. Most voters continue to support constructing the oil pipeline from western Canada to Texas, and they are more confident this can be done without hurting the environment. 

The Rasmussen Consumer and Investor Indexes both remain near their highest level in five years. But 53% of consumers and 48% of investors still believe the United States is in a recession.

It’s been three years since the passage of the president’s health care law, and it still hasn’t become popular. Half of voters hold an unfavorable opinion of it, and most continue to think the law will push up health care costs.

Democrats continue to lead Republicans on the Generic Congressional Ballot as they have every week since Election Day.


In other surveys last week:

– Easter is tomorrow, and 64% of Americans still believe that Jesus Christ rose from the dead on that day.

– Number one seed Louisville remains the fans’ choice to win the men’s NCAA basketball tournament

– Thirty-three percent (33%) of Likely U.S. Voters say the country is heading in the right direction.

Ten years after the U.S. invasion of Iraq, voters tend to think both the United States and Iraq are better off because of the war, but 52% don’t believe America should ever have been involved there.

– Most voters agree that American schools should provide their students with a world-class education and teach them the values of Western civilization, but few think they’re doing a good job. Just 19% think most public schools do a good job teaching Western values.

The field of contenders to win the World Series is wide open as the 2013 Major League Baseball season gets under way this weekend.

Subscribers to Rasmussen Reports receive more than 20 exclusive stories each week for less than a dollar a week. Please sign up now. Visit the Rasmussen Reports home page for the latest current polling coverage of events in the news. The page is updated several times each day.

Wall Street Journal profile called Scott Rasmussen “America’s Insurgent Pollster.” The Washington Post described him as “a driving force in American politics.”  If you’d like Scott to speak at your conference or event, contact Premiere Speakers Bureau.

Remember, if it’s in the news, it’s in our polls.

March 23 2013



Telegram for the FCC: Time to Retire the Telephone Network

Larry Downes, Contributor

3/18/2013 @ 3:00AM

Today, the FCC convenes the first meeting of its “Technology Transitions Policy Task Force,” a new intra-agency group announced in December by FCC Chairman Julius Genachowski.

The bland name belies a radical charter for the Task Force. Its goal is nothing less than to review thousands of pages of yellowing FCC rules and regulations and recommend how to adapt or eliminate them to reflect the utter transformation of 20th
century telephone, radio, television and data networks—all of which are in the final stages of conversion and upgrade to native Internet technologies.

Monday’s agenda is simply to orient the group to existing technologies, usage patterns, and the on-going evolution of what I call the “Internet Everywhere“–the dynamic ecosystem of network operators, device manufacturers, app developers and consumers that is creating new businesses and new value every day.

But here’s what the Task Force should do as its first official act: pick a date, right now, to permanently retire our obsolete wireline telephone network. And make it soon.

The old telephone network is just the latest victim of the Internet revolution, which began slowly but which has accelerated in the last decade. As better and cheaper voice services have appeared from cable, fiber, and dozens of over-the-top Internet providers including Skype, Google, and Vonage, fewer customers rely on the old wireline network every day. The residual value of its assets—switches, copper wiring, and other equipment—is falling fast. Maintenance costs are soaring.

We should put it out of its misery.

The engineering beauty of broadband IP networks, which are well on their way to replacing the circuit-switched networks, is that they don’t care what kind of communications flow over their ever-faster networks. We’re already well on our way to Internet Everywhere, where voice, video, and data packets move seamlessly over a single IP infrastructure, regardless of whether their ultimate destination is a television, a tablet or a home sensor. As Nicholas Negroponte so succinctly explained it almost twenty years ago, “bits are bits.”

For most consumers, the transition to Internet Everywhere has proven easy–even obvious. But for the affected industries and the regulators who oversee them, the transition is traumatic.

Driven by the counter-intuitive economics of the Internet and computing technology, the spread of Internet Everywhere is deconstructing the supply chains in a wide range of once-mature industries, including broadcasting, telecommunications, mass media, computing and consumer electronics, to name just a few.

It may be the best example yet of what Paul F. Nunes and I call “big bang disruption”: an innovation that is simultaneously faster, cheaper, and more customized than the existing services it’s replacing. (Watch for our new column on BBD, launching soon.)

Permission to Withdraw

To their credit, the incumbent providers of circuit-switched networks have recognized the need to retire quickly what had been, until recently, their most valuable assets. Both Verizon and AT&T have spent billions accelerating the replacement of copper with fiber, and circuit-switched with packet-switched equipment. In November, AT&T announced an additional $14 billion in capital expenditures over the next few years, making its IP-based U-verse (wired) and LTE (wireless) available to millions more consumers.

But turning off the old network isn’t as simple as it sounds. That’s because regulators at the federal and state level still treat switched telephony as if it were not only the dominant voice service, but in many cases as if it were the only choice—as it was back in the 1930′s, when communications industry regulation began in earnest.

The maintenance, usage and pricing of legacy infrastructure, for example, are still subject to often-minute oversight by an alphabet soup of federal and state regulators. Leftover rules from the early 20th century days of monopoly carriers and equipment providers even make it difficult for wireline providers to terminate services without permission, even if they are replacing those services with something better and cheaper.

It’s urgent that we break that logjam and wind down the old network as soon as possible. A swift and speedy transition would make it easier for consumers and network providers alike to accelerate the build-out of new, native IP networks, which are faster, more efficient, and cheaper to maintain. It will also speed the process of getting the roughly 30% of Americans not already part of the broadband revolution to join it–the top priority for the FCC since the 2010 publication of its visionary National Broadband Plan.

The FCC has an unavoidable role to play in the process. As communications markets are being simultaneously destroyed and recreated, regulations designed to dull the sharper edges of once-static and siloed technologies are now, as the agency recognizes, posing the very real danger of unintentionally holding back the progress of innovation. The agency must unravel itself from its complicated relationships with the affected industries.

As FCC Chairman Genachowski said in announcing the Task Force,

Technological transitions don’t change the basic mission of the FCC. But technology changes can drive changes in markets and competition. And many of the Commission’s existing rules draw technology-based distinctions. So the ongoing changes in our nation’s communications networks require a hard look at many rules that were written for a different technological and market landscape.

That’s putting it mildly. This is in fact the moment of truth for the eighty-year old federal agency. Right now, the FCC is teetering precariously between a productive role coordinating and accelerating the retirement of circuit-switched networks and a dangerously reactionary response that would instead bootstrap the old rules to the networks of the future.

But why does the outcome of an ideological battle for the agency’s soul even matter? After all, consumers and providers are already making the transition to IP on their own. More than 40% of U.S. homes have already abandoned their landline in favor of cable, Voice over IP, and mobile alternatives. By the end of 2013, according to industry trade group USTelecom, less than 30% of American homes will rely on a wired connection as their primary telephone.

But those are the easy consumers to switch. Getting older and rural families off the circuit-switched network will be much more difficult. Meanwhile, carriers must by law continue to maintain obsolete equipment even as they invest in its replacement. With fewer customers relying on the old system, maintenance costs are soaring on a pro rata basis, skewing investment decisions.

And so long as the legacy networks are still in the picture for voice as well as mobile backhaul, IP networks have to dumb down their traffic to remain backward compatible. While most cable companies have already completed their IP transition, for example, VoIP phone traffic that interconnects with circuit-switched networks must be, as Cablevision puts it, “downconverted.”

Lessons from the Digital Television Transition

If this story is starting to sound familiar, it should. Circuit-switched telephone networks are experiencing the same kind of regulatory undertow that fatally wounded over-the-air television broadcasting, which today accounts for less than 10% of the TV audience.

At its height in the 1970′s, 93% of all American homes relied on antennas. But analog broadcast couldn’t compete with either the quality or the quantity of cable channels, a fact Congress recognized as early as 1996, when it first set a 2006 deadline to mandate for conversion from analog to digital broadcast, a transition that was coordinated by the FCC.

A coordinated switch to Digital Television was intended to make the highly-regulated broadcasters more competitive with relatively unregulated cable.

How? Digital TV lowered costs and created new opportunities for broadcasters, already losing ground rapidly to cable, satellite, and soon, fiber. As part of the transition, broadcasters traded their analog radio spectrum allocations in the 700 MHz. band for a new 6 MHz. block in the 600 MHz. band. (Some of the freed-up 700 MHz. spectrum was auctioned for mobile broadband, bringing in billions for the U.S. Treasury.)

Because digital signals are more compressed, each 6 MHz. block could be split and used for multiple channels, all of them capable of high-definition broadcast, as well as new mobile business opportunities for the broadcasters.

So far, however, few station operators have been able to make use of that capacity to offer extra channels or to repurpose underutilized spectrum for mobile or other premium services. That’s largely because, in the end, the DTV transition didn’t occur until 2009. By then, over-the-air television had already entered an unrecoverable dive in viewership and revenue. According to research from the Consumer Electronics Association, the decline in over-the-air audience became irreversible between 2005, when the transition should have happened, and 2009, when it finally did. An earlier switch may have saved them

In theory, the IP transition should be easier. Unlike digital television, consumers will not need to replace equipment already in their homes, nor will they need to install adapters for existing telephones. In some cases, fiber optic cable will replace copper wiring in the heart of the network; in other cases, fiber will be run directly to the home. But inside wiring will not be affected, and existing telephones (far cheaper to replace, in any case, than old analog televisions) will continue to operate, just as they do now in homes that have already switched to Internet voice services.

It is true that some rural users may need to switch from landline to mobile service, especially in remote areas where the cost of installing wired IP networks is prohibitive. But the FCC can subsidize the cost of that switch—as indeed it already does through the recently-reformed Universal Service Fund. AT&T has already committed to an “economic path” for customers who will need to switch from slow wired connections to mobile broadband. Which is, in any case, better.

The transition to Internet Everywhere will also be unfortunately complicated by the fact that the FCC shares regulatory authority over wired providers with state public utility commissions. And state regulators are already resisting the transition, based on objections that seem to emphasize retaining their own authority relative to the FCC over the interests of their own citizens.

A taste of these and other counter-productive objections were voiced as part of an FCC proceeding initiated at the request of AT&T, which has proposed to conduct limited trials of IP transition in test markets, in part to unearth regulatory, technical, or logistical issues associated with a nationwide switchover. The Commission is considering that petition now, and last month received dozens of comments. (I submitted comments, in conjunction with the think-tank TechFreedom, urging approval of the petition.)

Many of the comments filed reveal an odd coalition of self-interested parties who are pushing the FCC in precisely the wrong direction. This includes state regulators worried over their own relevance, asset-less local phone companies who rely on the incumbents’ equipment and rates overseen by the FCC, and self-proclaimed consumer advocates, who fear any relaxation of existing FCC regulations will lead to the satanic resurrection of the early 20th century telephone monopoly.

Emotionally-charged rhetoric from some groups even claim that millions of Americans will be left without any telephone service, and that 911 and other public safety uses of the circuit-switched network will come to a deadly halt. The AARP, for example, called the IP transition a “sledgehammer” that “would result in the demolition of the foundation” on which decades of successful communications policy has been built. They see conspiracies everywhere, including a secret agenda to force senior citizens to give up their cherished landlines in favor of confounding smartphones.

The short answer is that no one is even asking for—nor could anyone expect the government to approve—a plan to turn off the obsolete legacy network, let alone one that doesn’t protect the dwindling number of consumers who still rely on it for basic telephone service. When the circuit-switched network is ultimately allowed to sunset, every American will have one if not several IP-based alternatives. As in the case of digital TV, each will be a better alternative, on every relevant dimension.

The naysayers could, however, gum up the works in ways that actually make things worse for broadband holdouts. Similar hyperbole, after all, slowed the DTV transition, dooming the broadcasters and, ironically, unnecessary limiting the future choices of the very consumers whom the delays were meant to protect.

A 2006 article in Fortune, for example, got nearly everything wrong, warning breathlessly that the DTV transition would “render about 70 million TV sets obsolete,” and that “for consumers with one of those 70 million sets — many of whom are likely to be poor, elderly or uneducated, being forcibly switched from one technology to another will be a nightmare.”

A nightmare? Hardly. Consumers who weren’t already cable or satellite subscribers and whose energy-inefficient tube television sets were too old to receive digital signals were barely inconvenienced, let alone “forcibly switched.” All they had to do was to buy and attach small digital converter boxes to their old TVs. Under a plan implemented by the Department of Commerce, consumers could even apply for up to two $40 coupons with which to purchase the converters, funded by proceeds from the 700 MHz. spectrum auctions.

On the fateful day, June 12, 2009, according to Nielsen, almost no one was left behind. Nearly all “unready homes” had successfully made the transition by using the converter box, or by switching to digital cable or satellite. No television was rendered “obsolete,” let alone 70 million.

The only victims were the broadcasters, who were set free too late to make use of their new competitive technologies and who now are limping into extinction.

If we don’t get the IP transition right, the same fate could be unnecessarily visited on incumbent wireline phone companies.

What to do? Start with the lessons of the past. While the DTV transition was clearly flawed, it still sets a useful precedent for the FCC’s role in retiring the circuit-switched telephone network and the regulations that have unintentionally rendered it uncompetitive.

And, one hopes, lessons learned from the earlier effort will improve an eventual plan for a similar transition for the telephone network. To start with, the switch to native IP voice networks needs to happen faster, with fewer starts, stops, and delays. The FCC must set a date certain for the switchover, and stick to it. And overblown and hypothetical concerns from self-interested parties should not be used as the basis for onerous conditions and unrelated new regulations.

We need to set a date now. And we need to set it aggressively, while there’s still time to salvage the value of a hundred years of investment in our circuit-switched infrastructure.

Let’s hope the FCC’s Technology Transitions Policy Task Force gets itself quickly oriented, and moves on to its essential task: clearing away the regulatory rubble that will otherwise delay the speedy transition to Internet Everywhere.

If not for the sake of the industries being transformed, than for U.S. consumers–who only stand to gain.


Cyberattack on Florida election is first known case in US, experts say


By Gil Aegerter Staff Writer, NBC News

March 18, 2013, 7:37 am



An attempt to illegally obtain absentee ballots in Florida last year is the first known case in the U.S. of a cyberattack against an online election system, according to computer scientists and lawyers working to safeguard voting security.

The case involved more than 2,500 “phantom requests” for absentee ballots, apparently sent to the Miami-Dade County elections website using a computer program, according to a grand jury report on problems in the Aug. 14 primary election. It is not clear whether the bogus requests were an attempt to influence a specific race, test the system or simply interfere with the voting. Because of the enormous number of requests – and the fact that most were sent from a small number of computer IP addresses in Ireland, England, India and other overseas locations – software used by the county flagged them and elections workers rejected them.

Computer experts say the case exposes the danger of putting states’ voting systems online – whether that’s allowing voters to register or actually vote.

“It’s the first documented attack I know of on an online U.S. election-related system that’s not (involving) a mock election,” said David Jefferson, a computer scientist at Lawrence Livermore National Laboratory who is on the board of directors of the Verified Voting Foundation and the California Voter Foundation.

Other experts contacted by NBC News agreed that the attempt to obtain the ballots is the first known case of a cyberattack on voting, though they noted that there are so many local elections systems in use that it’s possible that a similar attempt has gone unnoticed.

There have been allegations of election system hacking before in the U.S., but investigations of irregularities have found only software glitches, voting machine failures, voter error or inconclusive evidence. Where there has been evidence of a computer security breach — such as a 2006 incident in Sarasota, Fla., in which a computer worm that had been around for years raised havoc with the county elections voter database — it was unclear whether the worm’s appearance was timed to interfere with the election.

In any case, experts say they’ve been warning about this sort of attack for years.

“This has been in the cards, it’s been foreseeable,” said law Professor Candice Hoke, founding director of the Center for Election Integrity at Cleveland State University.

The primary election in Miami-Dade County in August 2012 involved state and local races along with U.S. Senate and congressional contests (see a sample ballot here). The Miami Herald, which first reported the irregularities, said the fraudulent requests for ballots targeted Democratic voters in the 26th Congressional District and Republicans in Florida House districts 103 and 112. None of the races’ outcomes could have been altered by that number of phantom ballots, the Herald said.

Overseas “anonymizers” — proxy servers that make Internet activity untraceable — kept the originating computers’ location secret and prevented law enforcement from figuring out who was responsible, according to the grand jury report, issued in December. The state attorney’s office closed the case in January without identifying a suspect.

Read the Miami-Dade County grand jury report (PDF)

Then came the Herald report, which said that three IP addresses in the United States had been identified among those sending the requests and that there had been a delay in getting that information to investigators, which a Miami-Dade elections official confirmed to NBC News. Terry Chavez, spokeswoman for the state attorney’s office for Miami-Dade County, also confirmed to NBC News that the investigation was reopened to look into those IP addresses. Chavez said she could release no details on the investigation.

Rep. Joe Garcia won the Democratic primary in the 26th District and went on to win the general election. Jeff Garcia, his chief of staff and no relation, said last week that no state or federal investigators had contacted the congressman’s office about the case.

State Rep. Jose Javier Rodriguez, a Democrat who won the District 112 seat, said Thursday that his office had not heard from investigators about the case either. A message left at the legislative office of state Rep. Manny Diaz Jr., the Republican who won the primary and the general election in District 103, was not immediately returned.

The Herald report said that as the requests began coming in, elections officials figured out that they were improper and started blocking the IP addresses. “I guess they finally gave up,” the newspaper quoted Bob Vinock, an assistant deputy elections supervisor for information systems, as saying.

People who study election security say the fact that this attempt did not succeed should be of little comfort to election officials. They warn that attempts to attack voting systems are likely to increase.

“In this case the attack was not as sophisticated as it could have been, and it was easy for elections officials to spot and turn back,” said J. Alex Halderman, an assistant professor of computer science and engineering at the University of Michigan who studies the security of electronic voting. “An attack somewhat more sophisticated than the one in Florida, completely within the norm for computer fraud these days, would likely be able to circumvent the checks.”

Fraudulently obtaining absentee ballots is just one way elections might be subverted by digital means, experts say. Among the other methods and attack points:

  • Malware. Rogue software infects millions of home computers across the country. Jefferson said hackers could use malware to change votes or prevent them from being cast in an online election.
  • Denial of service attacks. Jefferson said that hackers could use botnets to prevent election-system servers from working for hours, or perhaps longer. In fact, during an election in June 2012, a DOS attack hit the San Diego County Registrar of Voters’ website, preventing voters from tracking the results.
  • “Spoofing” of election websites. For example, Hoke said, legitimate requests for absentee ballots could be misdirected to another site. The data then could be misused, or the requests could hit a dead end, and voters would be left wondering where their ballots were.
  • Exploiting software flaws in digital voting machines, known as DREs. The flaws could allow insertion of viruses or alteration of programming code that would change votes or delete them. (Read one description of hacking a voting machine.)
  • Tampering with email return of marked ballots. Experts say email return is troublesome because of the multiple points for attack along the ballots’ electronic path. “The overwhelming consensus of the computer science community is don’t do it, it’s a bad idea,” said Jeremy Epstein, a senior computer scientist at SRI International. But in about half the states, email absentee ballot return is an option for members of the military and their families, along with some other U.S. citizens living overseas.
  • Wholesale hijacking of an online voting system. In 2010, the District of Columbia Board of Elections and Ethics tested an Internet-based voting system for a week, asking computer experts to probe it for flaws. It took only 48 hours for a team led by Halderman to break in and take control of the site – even altering it so that the University of Michigan fight song played after a vote was cast.

Read the University of Michigan researchers’ report on the DC hack (PDF)

In terms of illegally getting access to absentee ballots, Epstein said, the attacker or attackers who failed in Florida might have had an easier time with Washington state and Maryland.

He said that last summer he demonstrated to the FBI a method of changing individual voters’ addresses and other information online in those two states by predicting their driver’s license numbers.

First he used publicly available information to gain a voter’s full name and address. Then, he predicted the individual’s driver’s license number – which is based on a combination of the person’s name and numbers and letters — and used the information to access their voter registration online. From there, he said, he could have changed their addresses and had absentee ballots sent out.

“Imagine if (attackers) changed the address for 2,500 votes. It could be completely automated, and they have the ballots sent to a post office box or whatever,” Epstein said. “Then the registered voters would have no idea until they tried to vote.”

In October, Halderman and other researchers sent letters warning elections officials in both states of the danger of staking system security on driver’s license numbers.

The letter to Washington officials (read it here in PDF) also said that other security features in the state’s MyVote system would be only a speed bump to a dedicated hacker.

“Although the MyVote system uses a CAPTCHA, an image of distorted text intended to deter simple automated attacks, this provides only minimal defense,” the letter says. “Attackers can use commercial services to defeat the CAPTCHA at a cost of less than $0.001 per voter.”

Shane Hamlin, assistant director of elections in the Washington Secretary of State’s Office, told NBC News that state election officials have acted on the recommendations in the October letter and will require additional information to register to vote or change registration online.

Maryland election officials did not immediately return a call from NBC News seeking comment, but the Washington Post reported last month that Ross K. Goldstein, deputy administrator of the Maryland State Board of Elections, acknowledged the security hole and said the online voter registration system was being updated to address the issue.

“I believe technology can solve problems, and there are steps that we definitely can, and plan to, take to mitigate the risks,” the newspaper quoted him as saying.

While elections officials are attracted to the savings that online voting and registration systems promise, the cost of guarding online registration and voting systems is large, Hoke said. And that might negate the financial advantage of online balloting touted by some elections officials and vendors who want to sell electronic voting products.

“It’s cheap, if you don’t care whether elections are stolen,” she said.

That possibility — of an election being stolen through digital means — haunts researchers. For Jefferson, it’s a matter of national security.

“The legitimacy of government depends on it being impossible for single parties to change the results of elections,” he said.


Solar Power Soars in United States; Top 10 Solar Projects Under Construction


William Pentland, Contributor

3/15/2013 @ 5:10PM |9,011 views


The United States added a staggering 3.3 gigawatts of solar power capacity in 2012, according to a new report by GTM Research and the Solar Energy Industries Association.

To put the scale of solar power’s rapid and relentless expansion in perspective, the solar power capacity added in 2012 was greater than all of the solar power capacity added for the three previous years combined. If you’re not impressed yet, consider the swell of super-sized solar energy projects scheduled to come online in the US over the next few years.


Top 10 Largest Solar Projects Under Construction

Indeed, nine of the top 10 largest solar power projects currently under development are located in the US, according to SolarPlaza.

First Solar, the Tempe, AZ-based solar manufacturing giant, is developing three of the largest solar power farms in the world currently under construction – the Topaz Solar Farm in San Luis Obispo County, CA, the Desert Sunlight Solar Farm in Riverside County, CA, and the Agua Caliente Solar Project in Yuma County, AZ. These three projects alone will have a combined capacity of nearly one and a half gigawatts of electric power when they are completed.


Like First Solar, Sempra Generation and SunPower also have mega scale solar projects in the pipeline in California and Arizona.

The surge in solar power capacity deployed in 2012 is not surprising given the history of global investments in solar energy over the past decade. From 2004 to 2007, global private sector investment in solar energy increased nearly twenty-fold, according to the National Renewable Energy Laboratory. This investment trajectory and the resulting market expansion has driven down costs across the solar supply chain and made it considerably cheaper to generate electricity with solar technologies than it was previously.



3G and 4G USB modems are a security threat, researcher says

Researchers showed how to attack 3G and 4G USB modems at Black Hat Europe

Lucian Constantin

March 15, 2013 (IDG News Service)


The vast majority of 3G and 4G USB modems handed out by mobile operators to their customers are manufactured by a handful of companies and run insecure software, according to two security researchers from Russia.

Researchers Nikita Tarakanov and Oleg Kupreev analyzed the security of 3G/4G USB modems obtained from Russian operators for the past several months. Their findings were presented Thursday at the Black Hat Europe 2013 security conference in Amsterdam.

Most 3G/4G modems used in Russia, Europe, and probably elsewhere in the world, are made by Chinese hardware manufacturers Huawei and ZTE, and are branded with the mobile operators’ logos and trademarks, Tarakanov said. Because of this, even if the research was done primarily on Huawei modems from Russian operators, the results should be relevant in other parts of the world as well, he said.

Tarakanov said that they weren’t able to test baseband attacks against the Qualcomm chips found inside the modems because it’s illegal in Russia to operate your own GSM base station if you’re not an intelligence agency or a telecom operator. “We’ll probably have to move to another country for a few months to do it,” he said.

There’s still a lot to investigate in terms of the hardware’s security. For example, the SoC (system on a chip) used in many modems has Bluetooth capability that is disabled from the firmware, but it might be possible to enable it, the researcher said.

For now, the researchers tested the software preloaded on the modems and found multiple ways to attack it or to use it in attacks.

For one, it’s easy to make an image of the USB modem’s file system, modify it and write it on the modem again. There’s a tool available from Huawei to do modem backup and restore, but there are also free tools that support modems from other manufacturers, Tarakanov said.

Malware running on the computer could detect the model and version of the active 3G modem and could write an image with malicious customizations to it using such tools. That modem would then compromise any computer it’s used on.


The modem contains the installer for an application that gets installed on the computer, as well as the necessary drivers for different OSes. The application allows the user to stop, start and manage the Internet connection established through the modem.

The configuration files for the installed application, as well as those of the application installer stored on the modem, are in plain text and can be easily modified. One setting in the configuration files defines what DNS servers the modem should use for the Internet connection.

An attacker could change those entries to servers controlled by the attacker, Tarakanov said. This would give the attacker the ability to direct users to rogue websites when they’re trying to visit legitimate ones using the modem connection.

While the application installer itself cannot be directly modified to load malware because it’s a signed executable, there are some entries in its configuration file that can be used for this purpose.

For example, many configuration files had paths to antivirus installers and an option of whether to install those programs or not, Tarakanov said. The researcher said that he never found an antivirus installer shipped with the USB modems he tested, but the feature was there.

An attacker could create a custom image with a modified configuration file that enables this feature and installs a malicious file stored on the modem instead of an antivirus program. If the image is written on a USB modem, every time the user would install the modem application, the malware would also be installed, Tarakanov said.

The researchers also found a possible mass attack vector. Once installed on a computer, the modem application — at least the one from Huawei — checks periodically for updates from a single server, Tarakanov said. Software branded for a specific operator searchers for updates in a server directory specific to that operator.

An attacker who manages to compromise this update server, can launch mass attacks against users from many operators, Tarakanov said. Huawei 3G modems from several different Russian operators used the same server, but there might be other update servers for other countries, he said.

Tarakanov said that he didn’t look for vulnerabilities in the actual modem drivers installed in the OS, but he expects them to have vulnerabilities. The vast majority of third-party drivers in general have vulnerabilities, he said.

Tarakanov specializes in exploit writing and finding vulnerabilities in the Windows kernel mode drivers. However, Oleg Kupreev was the leader for this particular research project concerning 3G/4G modems.

Research in this area is just at the beginning and there’s more to investigate, Tarakanov said. Someone has to do it because many new laptops come with 3G/4G modems directly built in and people should know if they’re a security threat.



Huntsville vying to be one of six sites selected for FAA drone testing center

By Leada Gore |

on March 13, 2013 at 10:53 AM, updated March 13, 2013 at 11:00 AM


Huntsville is vying to be one of six sites selected by the Federal Aviation Administration for the testing of unmanned aerial vehicles, commonly known as drones, a move that could bring thousands of jobs to the area.

Huntsville Mayor Tommy Battle said existing capabilities at Redstone Arsenal make the city a natural fit for testing of future commercial-use UAVs. Redstone Arsenal is home to the Army’s Program Executive Office for Aviation, which manage helicopters, fixed-wing aircraft, unmanned aerial vehicles and more.

“We’re already developing technology with the UAV center that is here (at Redstone Arsenal),” Battle said. “Now it’s on to how that technology is used in the commercial world.”

The test sites, Battle said, would help the FAA determine how the drones would co-exist with commercial planes already in the sky.

“The UAV’s have a multitude of commercial uses,” he said. “We’ve done the technology here, if we’re going to do the testing, too, then the next step would be production and ultimately, that’s going to mean jobs.”

The establishment of the testing sites was part of the FAA Modernization and Reform Act signed in to law by President Barack Obama in February 2012. It established that U.S. airspace will be open for commercial drones by 2015. Advocates say the drones will have a range of uses, including assisting farmers and emergency responders.

Detractors say a drone’s surveillance capabilities raise privacy concerns. To answer those questions, the FAA is developing a set of privacy standards that will have to be followed by every test site.

Battle said the University of Alabama in Huntsville is leading the city’s efforts to land the drone testing location.

The news of the city’s interest in becoming a test site comes as the Association for Unmanned Vehicle Systems International’s Pathfinder Chapter in Huntsville is hosting its 24th annual meeting today and tomorrow at the Von Braun Center. More than 400 people are expected to attend the event. It also comes as a new AUVSI study shows the unmanned aircraft industry could create as many as 70,000 new jobs in the coming years.

The study shows the new jobs will be created in the first three years following the integration of unmanned aircraft systems, known as UAS, into the country’s airspace. The drone industry could create as many as 100,000 new jobs by 2025, according to the study.

“This is an incredibly exciting time for an industry developing technology that will benefit society, as well as the economy,” said Michael Toscano, president and CEO of AUVSI. “In recent years, unmanned aircraft technology has grown remarkably and is already proving useful in a range of domestic applications. Integrating UAS into the national airspace will lead to new and expanded uses, which means the creation of quality, high-paying American jobs.”

The study shows the integration project will have an economic impact of some $13.6 billion in the first three years, growing to a projected $82.1 billion in impact between 2015-2025. AUVSI estimates states involved in the drone testing will share in $482 million in tax revenues in the first 10 years of site operations.


House Won’t Pass Tax Bill Without Code Overhaul: Beeman

By Richard Rubin

March 18, 2013 10:25 AM EDT |


Senate Democrats’ attempts to raise taxes this year will run into a problem: a House determined to starve it of revenue bills.

Under the Constitution, revenue measures must start in the House, limiting the Senate’s ability to raise or lower taxes if the House doesn’t send it a tax bill. That’s exactly what the House is planning to do.

The House doesn’t intend to advance any tax bills to the Senate until it passes a comprehensive overhaul of the entire code, said Ray Beeman, an aide to Rep. Dave Camp, chairman of the House Ways and Means Committee.

The House typically passes tax bills each year, either small-bore simplification measures designed for popular appeal around the tax filing deadline or broader bills, such as the repeal of the health care law, that include revenue items and can be stripped and replaced in the Senate.

Beeman, who is drafting the overhaul bill that Camp plans to push through his committee this year, spoke on a panel today at the Tax Executives Institute conference in Washington.

If the Senate wants to raise taxes, “they’re not going to have a vehicle with

which to do it,” said Nick Giordano, a Democratic tax lobbyist who also spoke

on the panel.


Is China after More than IP?

Study: Most Attacks against Industrial Systems Start in China

By Eric Chabrow, March 18, 2013.

Follow Eric @GovInfoSecurity

Think about the cyberthreat from China. Its main goal is to attack information systems to steal government and military secrets as well as intellectual property from Western corporations.

Conventional thinking goes that China isn’t interested in disabling industrial control systems, say, to bring down a power plant in the United States. After all, being so heavily invested in America’s and other Western economies, such acts would go against China’s own economic interests.

Chinese hackers often come back to try additional exploitations if the prior attempts failed.

That’s why a finding from a Trend Micro study can give one pause: The information security provider finds that China by far leads all other nations as the place where attacks originate against industrial control and SCADA (supervisory control and data acquisition) systems.

When American governmental leaders speak about the consequences of cyberattacks originating from China, they generally refer to intellectual-property theft, not disruptions to the nation’s critical infrastructure. Just last week, in a phone conversation with China’s new President Xi Jinping, President Obama raised concerns about the pilfering of U.S. intellectual property through cyberattacks

Honeypot Traps Employed

Nothing in the Trend Micro study says China seeks to disrupt the American economy through attacking industrial control systems. What Trend Micro threat researcher Kyle Wilhoit did was to create honeypot traps that mimic vulnerabilities found on industrial control systems and SCADA devices. And, as he reveals in a blog, 35 percent of the attacks he recorded originated in China; the U.S. was a distant second at 19 percent, followed by Laos at 12 percent [see chart below].

Except for Laos, China had the most repeat offenders, often returning not only to exploit the same vulnerabilities, but to try additional exploitations if the prior attempts failed. Wilhoit explains that the repeated acts show that these particular actors were likely interested in gaining access to the devices or causing further damage or exploitation, adding that he expects these types of attacks to increase “with possible far reaching consequences.”

In its report, Trend Micro contends industrial systems can be defended from such attacks, and offers 20 recommendations. The No. 1 recommendation: “Disable Internet access to your trusted resources, where possible.”

True, removing key systems from the Internet could prevent the attacks Wilhoit describes, but creating an island of such systems is not necessarily easy to accomplish. Besides, as the Iranians learned when their nuclear centrifuges were disabled by the computer worm Stuxnet, not being connected to the Internet doesn’t mean one is safe from outside exploits.

Follow Eric Chabrow on Twitter: @GovInfoSecurity


DoD Reviewing Strategy in Wake of Budget Cuts



WASHINGTON — The Pentagon has launched a new military strategy review that will examine how planned U.S. defense spending reductions will impact future Defense Department operations.

Defense Secretary Chuck Hagel put Deputy Defense Secretary Ashton Carter and Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, in charge of the review, which will “examine the choices that underlie the Department of Defense’s strategy, force posture, investments, and institutional management — including all past assumptions, systems, and practices,” Pentagon Press Secretary George Little said in a statement.

The announcement of the new strategy review comes a little more than a year after the Obama administration unveiled a sweeping military strategy that called for placing a greater emphasis on the Asia-Pacific region.

Unveiled by President Barack Obama himself during an unprecedented briefing at the Pentagon in January 2012, the so-called strategic guidance was supposed to be DoD’s foundation for the next decade.

But since then DoD has been hit with sweeping budget cuts, most recently a $46 billion in 2013 that kicked in on March 1. A total of $500 billion in defense spending reductions are looming if current law is not modified by Congress.

Defense officials have warned that any significant spending cuts would impact DoD’s ability to carry our its existing strategy.

“As I stand here today, I don’t yet know whether, or if, or how much our defense strategy will change, but I predict it will” Dempsey said at a Monday event at the Center for Strategic and International Studies think tank.

“We’ll need to re-look at our assumptions and we’ll need to adjust our ambitions to match our abilities,” he said. “That means doing less, but not doing less-well.”

The new review will look at how that strategy will be impacted.

“This Strategic Choices and Management Review will define the major decisions that must be made in the decade ahead to preserve and adapt our defense strategy, our force, and our institutions under a range of future budgetary scenarios,” Little said on Monday. “The review will take the 2011 Defense Strategic Guidance as the point of departure, and it will examine whether the assumptions made in that strategy are still applicable.”

The review’s findings — expected by May 31 — will “frame the Secretary’s guidance for the Fiscal Year 2015 budget and will ultimately be the foundation for the Quadrennial Defense Review due to Congress in February 2014,” Little said.



Cyberwar manual lays down rules for online attacks

USA Today

RAPHAEL SATTER, Associated Press12:42p.m. EDT March 19, 2013


A handbook due to be published later this week applies the venerable practice of international law to the world of electronic warfare in an effort to show how hospitals, civilians, and neutral nations can be protected in an information age fight.

“Everyone was seeing the Internet as the ‘Wild, Wild, West,’” U.S. Naval War College Professor Michael Schmidt, the manual’s editor, said in an interview ahead of its official release. “What they had forgotten is that international law applies to cyberweapons like it applies to any other weapons.”

The Tallinn Manual — named for the Estonian capital where it was compiled — was created at the behest of the NATO Cooperative Cyber Defense Center of Excellence, a NATO think tank. It takes existing rules on battlefield behavior — such as the 1949 Geneva Convention — to the Internet, occasionally in creative or unexpected ways.

The manual’s central premise is that war doesn’t stop being war just because it happens online. Hacking a dam’s controls to release its reservoir into a river valley can have the same effect as breaching it with explosives, its authors argue. Legally speaking, a cyberattack which sparks a fire at a military base is indistinguishable from an attack that uses an incendiary shell.

The humanitarian protections don’t disappear online either. Medical computers get the same protection that brick-and-mortar hospitals do. The personal data related to prisoners of war have to be kept safe in the same way that the prisoners themselves are — for example by having the information stored separately from military servers which might be subject to attack.

Cyberwar can lead to cyberwar crimes, the manual warned. Launching an attack from a neutral nation’s computer network is forbidden in much the same way that hostile armies aren’t allowed to march through a neutral country’s territory. Shutting down the Internet in an occupied area in retaliation against a rebel cyberattack could fall afoul of international prohibitions on collective punishment.

Marco Roscini, who teaches international law at London’s University of Westminster, described the 282-page manual as well-drafted and comprehensive, predicting that it would play an important role as military lawyers across the world grapple with issues of online warfare.


“I’m sure it will be quite influential,” he said.

Read manual online at


Drones will require new privacy laws, Senate told

Kansas City Star

Posted on Wed, Mar. 20, 2013


Associated Press

Privacy laws urgently need to be updated to protect the public from information-gathering by the thousands of civilian drones expected to be flying in U.S. skies in the next decade or so, legal experts told a Senate panel Wednesday.

A budding commercial drone industry is poised to put mostly small, unmanned aircraft to countless uses, from monitoring crops to acting as lookouts for police SWAT teams, but federal and state privacy laws have been outpaced by advances in drone technology, experts said at a Senate hearing.

Current privacy protections from aerial surveillance are based on court decisions from the 1980s, the Judiciary Committee was told, before the widespread drone use was anticipated. In general, manned helicopters and planes already have the potential to do the same kinds of surveillance and intrusive information gathering as drones, but drones can be flown more cheaply, for longer periods of time and at less risk to human life. That makes it likely that surveillance and information-gathering will become much more widespread, legal experts said.


The Federal Aviation Administration recently predicted about 7,500 civilian drones will be in use within five years after the agency grants them greater access to U.S. skies. Congress has directed the FAA to provide drones with widespread access to domestic airspace by 2015, but the agency is behind in its development of safety regulations and isn’t expected to meet that deadline.

If Americans’ privacy concerns aren’t addressed first, the benefits of potentially “transformative” drone technology may not be realized, Ryan Calo, a University of Washington law professor, told the Judiciary Committee.

It’s in “everyone’s interest to update the law even if only to provide the industry with the kind of bright lines its need to develop this technology,” said Amie Stepanovich of the Electronic Privacy Information Center, a privacy advocacy group.


But Calo and Stepanovich were divided on whether Congress should update federal privacy laws to set a national standard, or whether the responsibility should be left to state lawmakers to craft their own solutions. Several bills have been introduced in Congress that would, among other things, require warrants before drones could be used for surveillance.


Calo said he is concerned that some of the congressional legislation isn’t written broadly enough to cover other types of technology, like robots that can walk up walls.


There is also virtue in allowing states to experiment with their own laws, he said. A variety of drone-related bills have been introduced this year in more than 30 state legislatures.


But Stepanovich urged Congress to pass legislation requiring police to obtain warrants for drone surveillance, with exceptions for emergency situations or when necessary to protect human life.


There is already limited civilian drone use. The FAA has granted more than two hundred permits to state and local governments, police departments, universities and others to experiment with using small drones.


Initially, most civilian drones are expected to be around the size of backpack or smaller, weighing less than 55 pounds and unable to fly higher than most birds. The U.S. military, on the other hand, uses everything from unarmed, hand-launched drones like the 2.9-pound Wasp to systems like the MQ-9 Reaper that flies at an altitude up to 50,000 feet, has a 66-foot wingspan, weighs up to 10,500 pounds and can fire Hellfire missiles and guided bombs.


“I am convinced that the domestic use of drones to conduct surveillance and collect other information will have a broad and significant impact on the everyday lives of millions of Americans going forward,” said the committee’s chairman, Sen. Patrick Leahy, D-Vt.


“Small, quiet unmanned aircraft can easily be built or purchased online for only a few hundred dollars and equipped with high-definition video cameras while flying in areas impossible for manned aircraft to operate without being detected,” Leahy said. “It is not hard to imagine the serious privacy problems that this type of technology could cause.”


Earlier this year, the FAA solicited proposals to create six drone test sites around the country. With a nod to privacy concerns, the FAA said test site applicants will be required to follow federal and state privacy laws and to make a privacy policy publicly available.


The test sites are supposed to evaluate what requirements are needed to ensure the drones don’t collide with planes or endanger people or property on the ground. Remotely controlled drones don’t have a pilot who can see other aircraft the way an onboard plane or helicopter pilot can.


The agency has received 50 applications to create test sites in 37 states. Eventually, every state may have a test site, said Michael Toscano, president and CEO of the Association for Unmanned Vehicle Systems International, a trade association for the domestic drone industry.



Is the CIA Getting Out of the Drone Business?

By Dashiell Bennett

March 20, 2013


Daniel Klaidman of The Daily Beast reports that the White House will soon take the power to launch lethal drone strikes away from the CIA and make the program the exclusive domain of the Defense Department. Because the military and intelligence services operate under a different set of rules, the move would consolidate all drone operations under a single command and a single set of procedure. It could also (potentially) add new layers of transparency and accountability to what has become one of the government’s most controversial operations.

The shift may not change much in the real world of missile strikes and terrorist hunting, as drones will continue to be a major tool in the U.S. arsenal. However, it could signal a major shift in the legal and diplomatic basis for the program. For example, one of the most important distinctions between CIA operations and military ones is the difference between “covert” and “clandestine.” The military can keep its “clandestine” activities classified or secret—like say a SEAL team raid to kill a wanted terrorist. But if Congress or a judge asks, they can’t pretend they didn’t happen. The CIA, on the other hand, is allowed to declare certain missions to be “covert.” (Like say, sneaking American citizens out of a hostile country.) That means that, legally, they can deny that program even exists, shielding those responsible from accountability and hiding them from the public.

Read more at The Atlantic Wire.


New WH Plan Would Cut $100B From Defense


March 20, 2013


WASHINGTON — The White House is preparing to submit a fiscal 2014 federal budget that would partially offset across-the-board sequestration cuts by reducing the Pentagon budget by $100 billion, but not until later this decade, according to a senior defense official and budget documents.

Obama administration officials are pushing these Defense Department spending cuts, along with an additional $100 billion in nondefense discretionary spending — for a total of $200 billion in cuts — as part of a $4 trillion deficit reduction plan that has been offered to House Republican leadership.

The $100 billion in defense cuts would not begin until 2019, according to Frank Kendall, the Pentagon acquisition chief.

“The president’s budget … does deal with the deficit, it does do the things that need to be done, if it were passed, to avoid sequestration,” he said Wednesday at a National Defense Industrial Association conference in Springfield, Va.

The White House is planning to submit its fiscal 2014 spending plan to Congress on April 8, according to sources.

“The way the president did it was he took $100 billion out of defense, but he took it out [from] the second five years,” Kendall said.

Each year the Pentagon submits a budget to Congress that includes five-year spending estimates. That five-year period is called the future years defense program (FYDP).

“So essentially you have a FYDP that remains intact and we take another $100 billion out beyond the FYDP,” Kendall said. “The same thing more or less [will] be done on the domestic discretionary part; there’s $100 billion that’s taken out.””>A deficit-reduction plan posted on the White House’s website forecasts $600 billion in savings through taxes “from [the] wealthiest [as part of the] fiscal cliff deal” struck in January.

DoD is facing a $500 billion cut over the next decade — about $50 billion per year — as part of sequestration. Those cuts were triggered March 1. The White House proposal does not appear to address the sequestration cuts for the remainder of fiscal 2013, which total about $46 billion.

For months the Pentagon has said it prepared a 2014 budget proposal that did not include sequestration cuts. On Wednesday, a defense official confirmed that the White House Office of Management and Budget has not asked DoD to submit a new spending plan that includes sequestration.

“The President has put forward a specific plan that will avoid sequestration’s harmful budget cuts and reduce the deficit in a balanced way — by cutting spending, finding savings in entitlement programs and closing tax loopholes,” according to a statement on the White House website.

On Capitol Hill, the immediate reaction from pro-defense Republicans was mixed.

Senate Armed Services Committee Ranking Member Sen. James Inhofe, R-Okla., told Defense News on Wednesday he would be open to $100 billion in outyear defense cuts as a way to avoid the final nine years of the $500 billion sequester cut.

“If you isolate the $100 [billion], obviously I would support that,” Inhofe said. “But I doubt it’s going to be quite that easy. “I anticipate [White House officials] are using that as a carrot to get tax increases,” Inhofe said. “But that sure has my attention.”

Asked about the $580 billion in new revenues the White House plan proposes — something which congressional Republicans have long opposed — Inhofe signaled his opposition.

“I want to see those first, but I seriously doubt I’d support those,” Inhofe said.

While Inhofe signaled a willingness to at least consider parts of the White House plan, especially the lessened defense cuts, one senior House Armed Services Committee aide rejected it.

“What strategic analysis did they do to come up with the $100 billion figure?” the senior HASC aide told Defense News on Wednesday. “[Joint Chiefs Chairman Gen. Martin] Dempsey testified to us last month that he can’t keep doing what we are doing around the world with additional cuts, so what is the White House proposing they stop doing?”

The White House had yet to respond to a reporter’s inquiry about the sequestration-replacement plan and what year the $100 billion defense cut begins.

But the timeline laid out by Kendall suggests Congress and the White House would have several years to replace the proposed $100 billion cut with other deficit-reduction measures.

Not good enough, the senior HASC aide said.

“I would be skeptical of additional $100 billion in defense cuts, even in the out years,” the senior aide said. “Dempsey said he couldn’t absorb that, and we take him at his word. Would love to know what strategic assessment led the White House to believe another $100 billion in defense cuts are workable — answer [equals] none.”


NASA Tightens Security In Response To Insider Threat


NASA shuts down database and tightens restrictions on remote access following the arrest of a Chinese contractor on suspicion of intellectual property theft.

By Patience Wait, InformationWeek

March 21, 2013



NASA has closed down its technical reports database and imposed tighter restrictions on remote access to its computer systems following the arrest of a Chinese contractor on suspicion of intellectual property theft.

NASA administrator Charles Bolden outlined those and other security measures in March 20 testimony before a congressional subcommittee. Bolden said he had ordered a review of the access that foreign nationals from designated countries — including China, Iran and North Korea — are given to NASA facilities and a moratorium on providing new access to citizens of those countries.

The agency’s actions follow the March 16 arrest of Bo Jiang, a Chinese citizen, at Dulles Airport in Washington, D.C., as he prepared to leave the United States. The FBI, in its application for an arrest warrant, said it was investigating violations of the Arms Export Control Act.

Jiang worked as a contractor with the National Institute of Aerospace, a nonprofit research organization, at NASA’s Langley Research Center. During a border stop at Dulles, Jiang allegedly said that he had in his possession a cellphone, memory stick, external hard drive and new computer. During a subsequent search of Jiang’s possessions, the agents found a second laptop, hard drive and SIM card, according to the arrest warrant.

Jiang was arraigned March 19 in federal district court in Norfolk, Va., on a charge of lying to federal agents. The contents of the confiscated electronic media have not been revealed.

Rep. Frank Wolf (R-Va.), chairman of the House appropriations subcommittee that funds the space agency, said in a press conference that whistleblowers at NASA prompted the investigation. Wolf said Jiang was working on high-tech imaging technology that could be of potential interest to the Chinese military. Citing the arrest warrant, Wolf said Jiang had previously traveled to China with a NASA laptop “that agents believe to have contained sensitive information.”


Wolf accused NASA of circumventing restrictions on the hiring of foreign nationals and said he had evidence that the NIA might employ other Chinese nationals under similar arrangements. The congressman called on NASA to audit all of its contractors that employ citizens of countries or organizations considered “entities of concern.”

Wolf, in his seventeenth year in Congress, has been focused on the threat of Chinese cyber espionage. Earlier this month, he warned of security threats and the potential leak of classified information at NASA’s Ames Research Center, and he pointed to the Chinese government’s “systematic and aggressive efforts to steal” sensitive technology.


Mismanaged State Pensions Bill Taxpayers for Shortfall

By ERIC PIANIN, DAVID FRANCIS, The Fiscal Times March 22, 2013

For years, state and local governments have been playing imaginative or patently dishonest games with their pension funds, thinking they could get away with it. But now the chickens are coming home to roost, as federal authorities have begun cracking down on corruption and mismanagement.

The modus operandi was much the same in state after state: government officials underfunding or skimming retiree pension funds to meet other more immediate costs; financial officers papering over or hiding the extent of the funding shortfalls; and private financial managers exaggerating the return they could deliver on pension fund investments while often leaving the fund vulnerable to unexpected market swings.

State pensions, still feeling the pain of the Great Recession, are now underfunded to the tune of more than $4 trillion, according to State Budget Solutions, a non-partisan fiscal watchdog.

In the past week alone, government officials and private investment groups with major government contracts have learned hard lessons about the risks of playing fast and loose with the government retirement systems:

The Securities and Exchange Commission charged Illinois with securities fraud following years in which state officials misled investors and shortchanged the state pension system and stuck future generations of taxpayers with the staggering bill. The suit was part of a larger push by the SEC to bring greater transparency and accountability to the municipal bond market, according to the Wall Street Journal.

• A federal grand jury indicted the former CEO and former board member of the $232 billion California Public Employees’ Retirement System on bribery and influence peddling charges. The indictment accuses them of unduly using their influence to defraud a giant equity firm of millions of dollars.
• The nearly bankrupt city of Detroit was placed under a state financial overseer after years of mismanagement, corruption and obfuscation of major obligations – including billions of dollars in retiree health costs. Federal authorities meanwhile charged two former pension officials with bribery and accepting kickbacks.

These are arguably among the worst cases of state and municipal malfeasance in the handling of public employees’ vital pension programs, but experts say they represent the tip of the iceberg. Around the country, state and local governments are cutting corners and taking big chances to meet pension investment goals. Absent reforms or a turnabout in current practices, many state employees will end up with far less than promised when they retire.

“There are a lot of governmental pension plans that have been chronically underfunded, and this is a big problem,” said Chester Spatt, a former chief economist for the SEC and now the director of the Center for Financial Markets at Carnegie Mellon University’s Tepper School of Business.

A big part of the problem has been shoddy accounting practices by state and municipal officials who have operated with fewer restraints than financial officers in the private sector, Spatt said. Moreover, many states and local governments have misled investors by exaggerating the projected return on their bonds and securities.

Nowhere is the problem greater than in Illinois, where Democratic Gov. Patrick Quinn is facing the biggest crisis of his administration. Quinn inherited the budget crisis when he took office back in January 2011, at a time when many state governments were struggling to make ends meet.

Quinn and the Democrat controlled state legislature moved swiftly to pass a major tax increase to offset a budget deficit of at least $12 billion, or about 34 percent of the $35 billion general fund budget – plus another $6 billion of debt carried over from the previous year. That debt consisted of unpaid bills to public universities, schools, social service agencies, druggists and vendors.

On top of that, the state employee pension fund was woefully underfunded to the tune of $80 to $90 billion, and the state’s once shining credit rating was dangerously on the skids, which meant paying high interest rates to borrow money. “It’s the enormity of the deficit,” when compared to the overall budget, that sets Illinois apart from many other states, Richard F. Dye, of the University of Illinois’ Institute of Government, said at the time.

Even with the new tax revenue in place, Illinois has struggled to address its long term pension program problems. Standard & Poor’s downgraded Illinois Jan. 25 to A-, six steps below AAA, after lawmakers were unable to whittle down a backlog of $9 billion of unpaid bills or produce a plan to shore up the pensions, which have just 39 percent of assets needed to cover projected obligations, according to Bloomberg. No other U.S. state has a ratio that low.

But the illegal practices that triggered last week’s SEC sanctions date back to 2005 and the administration of disgraced — and now imprisoned — Democratic governor Rod Blagojevich. The SEC charged that the state misled investors from 2005 to 2009 about shortfalls in retirement funds. Illinois failed to disclose how much it was underfunding its plans as it sold $2.2 billion in bonds, according to the SEC. The fifth-most-populous state became the second to settle over such charges. New Jersey resolved a similar case in 2010, as did San Diego in 2006.

Illinois neither admitted nor denied the SEC’s findings in the settlement, which didn’t include fines, according to a statement from Quinn’s Office of Management and Budget. However, the state is paying a steep price for its misdeeds in operating the pension fund. Investors demand 1.3 percentage points of extra yield to own 10-year debt of the state and its localities, almost seven times the average in 2005, when the SEC said the inadequate disclosure began.

“I can tell you it’s troubling because we have made promises we can’t keep in Illinois,” said Sen. Richard J. Durbin, D-Ill, the second-ranking Democrat in the U.S. Senate. “And the people who are affected by those promises have done everything they were asked to do. They’ve made all the payments they were expected to make, and many of them are in a vulnerable position personally.”



For years, the California Public Employees’ Retirement System (CalPERS) was considered one of the best run in the nation. It was the largest public fund, with nearly $180 billion in assets at the end of 2008. It served 1.6 million workers, and had a reputation for taking a careful, balanced investment approach that provided consistent returns. Also absent were rumors of corruption.

That all changed in 2011, when the Justice Department launched an investigation into how the fund was managed. What followed was a scandal that followed a familiar script: former CalPERS CEO Federico Buenrostro Jr. and former board member Alfred J.R. Villalobos steered money to Wall Street investment houses in exchange for payouts. They also conspired to hide the payments, creating false document trails to mislead investigators.

According to Edward Siedle, a forensic expert who specializes in pension fraud crimes, the crimes committed in the CalPERS scandal are common in cases of pension abuse. He said lack of sufficient regulation allows board members to act without oversight.

“Funds aren’t regulated by any comprehensive federal or state laws. They’re subject to a patchwork or quilt of city, state or county laws that more often than not don’t have the power to oversee fund activities,” he said. “If you want to know if a fund can invest in derivatives, there’s almost certainly no law that requires the board to tell you.”

Siedle also said that the very make up of pension boards invite the prospect of mismanagement. “Pensions boards are composed of firefighters, kindergarten teachers, and garbage collectors,” he said. “There is no requirement that these boards require any kind of financial expertise.”

But mismanagement does not just exist on the public side, Siedle said. Money managers know they aren’t dealing with the most sophisticated investors when they pitch pension boards. They often oversell projected returns, making promises that they are unlikely to keep.

“It is often said that public pension boards are the dumbest investors in the room. If you want to pitch a billion dollar scam, are you better pitching it to a wealthy person or a bunch of schoolteachers or firefighters?” Siedle asked. The burden falls on taxpayers when money managers fail to deliver.

The Pension Benefit Guarantee Corporation guarantees pensions, and in the wake of the Great Recession, has had to dish out billions. In 2010, it covered $5.6 billion in lost pensions. According to a 2012 Inspector General Report, it does not have “the resources to fully satisfy PBGC’s long-term obligations. These funds are backed by taxpayers,” he said. “If the money’s not there, the taxpayers have to put more money in.”

The financial crisis that led Republican Gov. Rick Snyder to installing bankruptcy attorney Kevyn Orr as emergency czar of Detroit last week was decades in the making and had much to do with an economy buffeted by a declining auto industry, white flight to the suburbs, widespread poverty and crime, and government corruption. But a state-appointed review board also found astounding examples of government mismanagement, particularly in the handling of employee pension and retiree health programs.

These included the hiding of $7.2 billion in retiree health costs until it was discovered by an outside consultant in 2005 and the use of tricks to hold down salary costs in the short term by offering employees inflated pension programs down the road without the resources to make good on them.

Last week, Ronald Zajac, the long-time general counsel of Detroit’s two pension funds, and Paul Stewart, a former trustee of Detroit’s Police and Fire Retirement System, were indicted on federal charges of taking part in a bribery and kickback scheme involving more than $200 million in Detroit pension fund investments.

A distraught Mayor Dave Bing issued a statement saying Detroiters deserved honest government, and that “when the public trust is betrayed, justice must prevail.”


Secret Report Warns of Skewed U.S. Intelligence Priorities



WASHINGTON — White House advisers have warned that U.S. spy agencies are too focused on anti-terror operations and pay inadequate attention to China, the Middle East and other flashpoints, a news report said Thursday.

The Washington Post reported that a panel of White House advisers warned President Barack Obama last year that the work of the Central Intelligence Agency, the National Security Agency and other U.S. spy services had been distorted by more than a decade of counterterror efforts following the Sept. 11, 2001 attacks. The panel, whose members included new U.S. Defense Secretary Chuck Hagel and former senator David Boren, urged greater attention to America’s other intelligence priorities and called for a significant shift in resources to correct the perceived imbalance.

The document issued last year by the President’s Intelligence Advisory Board was distributed to senior national security officials at the White House, the newspaper wrote.

U.S. intelligence officials cautioned that any course corrections are likely to be incremental rather than comprehensive, because of continued concern over the threat by al-Qaida, and because of influence amassed by U.S. counterterror institutions over the past decade, the Post reported.

The daily wrote that the intelligence board, which meets in secret, is made up of 14 experts, many of whom once held top government posts and that they have extensive access to intelligence officials and records.

The Post reported that it contacted several panel members who declined to discuss the contents of the report but expressed misgivings about the increasingly paramilitary missions of U.S. intelligence efforts, including at the Central Intelligence Agency.



Drone base in Niger gives U.S. a strategic foothold in West Africa

Washington Post

By Craig Whitlock, Published: March 21

NIAMEY, Niger — The newest outpost in the U.S. government’s empire of drone bases sits behind a razor-wire-topped wall outside this West African capital, blasted by 110-degree heat and the occasional sandstorm blowing from the Sahara.


The U.S. Air Force began flying a handful of unarmed Predator drones from here last month. The gray, mosquito-shaped aircraft emerge sporadically from a borrowed hangar and soar north in search of al-Qaeda fighters and guerrillas from other groups hiding in the region’s untamed deserts and hills.

The harsh terrain of North and West Africa is rapidly emerging as yet another front in the United States’ long-running war against terrorist networks, a conflict that has fueled a revolution in drone warfare.

Since taking office in 2009, President Obama has relied heavily on drones for operations, both declared and covert, in Afghanistan, Iraq, Pakistan, Yemen, Libya and Somalia. U.S. drones also fly from allied bases in Turkey, Italy, Saudi Arabia, Qatar, the United Arab Emirates and the Philippines.

Now, they are becoming a fixture in Africa. The U.S. military has built a major drone hub in Djibouti, on the Horn of Africa, and flies unarmed Reaper drones from Ethiopia. Until recently, it conducted reconnaissance flights over East Africa from the island nation of the Seychelles.

The Predator drones in Niger, a landlocked and dirt-poor country, give the Pentagon a strategic foothold in West Africa. Niger shares a long border with Mali, where an al-Qaeda affiliate and other Islamist groups have taken root. Niger also borders Libya and Nigeria, which are also struggling to contain armed extremist movements.

Like other U.S. drone bases, the Predator operations in Niger are shrouded in secrecy. The White House announced Feb. 22 that Obama had deployed about 100 military personnel to Niger on an “intelligence collection” mission, but it did not make any explicit reference to drones.

Since then, the Defense Department has publicly acknowledged the presence of drones here but has revealed little else. The Africa Command, which oversees U.S. military missions on the continent, denied requests from a Washington Post reporter to interview American troops in Niger or to tour the military airfield where the drones are based, near Niamey’s international airport.

Government officials in Niger, a former French colony, were slightly more forthcoming. President Issoufou Mahamadou said his government invited Washington to send surveillance drones because he was worried that the country might not be able to defend its borders from Islamist fighters based in Mali, Libya or Nigeria.

“We welcome the drones,” Mahamadou said in an interview at the presidential palace in Niamey. Citing the “feeble capability” of many West African militaries, he said Niger — which is three times the size of California — and its neighbors desperately needed foreign help to track the movements of guerrillas across the Sahara and Sahel, an arid territorial belt that covers much of the region.

“Our countries are like the blind leading the blind,” he said. “We rely on countries like France and the United States. We need cooperation to ensure our security.”


Surveillance operations

The Predator drones in Niger are unarmed, U.S. officials said, though they have not ruled out equipping the aircraft with Hellfire missiles in the future. For now, the drones are conducting surveillance over Mali and Niger.

U.S. officials said they share video footage and other intelligence collected by the unmanned aircraft with French forces and African troops — including 670 soldiers from Niger — who are fighting the Islamist insurgency in Mali. Liaison officers from Niger, France and Chad work alongside U.S. Air Force personnel who launch and land the drones from the base in Niamey.


Most of the surveillance missions are designed to track broad patterns of human activity and are not aimed at hunting individuals, said a senior U.S. official, who spoke on the condition of anonymity to discuss military operations. Although French and African troops are engaged in combat in Mali, the Obama administration has not given the U.S. military the same authorization.

“The whole issue is lethality,” the senior official said. “We don’t want to abet a lethal action.”

But the rules of engagement are blurry. Intelligence gathered by the Predators could indirectly help the French fix targets for airstrikes or prompt Nigerien security forces to take action on their territory.

Moreover, U.S. officials have acknowledged that they could use lethal force under certain circumstances. Last month, Army Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, told Congress that the U.S. military had designated “a handful of high-value individuals” in North Africa for their suspected connections to al-Qaeda, making them potential targets for capture or killing.


Mission’s duration unclear

The Pentagon declined to say exactly how many Predator aircraft it has sent to Niger or how long it intends to keep them there. But there are signs that the U.S. military wants to establish a long-term presence in West Africa.

After years of negotiations, the Obama administration signed an agreement with Niger in January that provides judicial protection and other safeguards for U.S. troops in the country.

Two U.S. defense officials, speaking on the condition of anonymity to discuss internal planning, said the Pentagon ultimately wants to move the Predators to the Saharan city of Agadez, in northern Niger.

Agadez is closer to parts of southern Algeria and southern Libya where fighters and arms traffickers allied with al-Qaeda have taken refuge. The airfield in Agadez, however, is rudimentary and needs improvements before it can host drones, officials said.
The U.S. military has used Agadez since last year as a refueling stop for U-28 spy planes — small, piloted aircraft flown by private contractors. U.S. officials have hesitated to send those surveillance aircraft across the border into Mali because of fears that the crews could be taken hostage if the planes crash or are shot down.

Government officials in Niger declined to say whether they viewed the U.S. drones as a short-term fix or a permanent addition.

“I can’t tell you how long they will be here,” said Mahamadou, the president. “How long it will take to stabilize Mali is one factor. The stabilization of Libya is another.”

At the same time, he said Niger cannot rely on French and U.S. military forces forever and needs to ensure its own security. To that end, the U.S. government has agreed to give Niger two Cessna Grand Caravan aircraft to transport troops and conduct surveillance.

“The intelligence is crucial for us,” said Col. Mamane Souley, director of exterior relations for the Nigerien armed forces. “We have a vast territory, and in that sense aircraft are fundamentally important.”


Low profile in Muslim nation

The presence of high-tech Predator drones in Niger’s skies contrasts jarringly with life on the ground. There are only a handful of paved roads in the capital. Many people live in mud-brick shanties. Goats and camels are a common sight in the city center.


U.S. and Nigerien officials had worried that the drones might spur a popular backlash in Niger, where about 90 percent of the population is Muslim. Extra security barriers were raised outside the U.S. and French embassies as a precaution. So far, however, reaction has been muted, and many people seem to favor anything that the U.S. and French militaries can do to prevent a spillover of violence from Mali.

“Of course, we might have some narrow-minded Nigeriens,” said Marou Amadou, who serves as Niger’s justice minister and its chief government spokesman. “But people understand that the presence of these drones is very, very helpful. . . . What is happening in Mali could happen in Niger also.”

Nonetheless, U.S. troops have kept a low profile. Americans with short haircuts and a military bearing occasionally surface at a couple of Niamey hotels to eat barbecue or drink beer, but most confine themselves to the base.

The Africa Command did not respond to questions about how many U.S. troops are in Niger, but one U.S. official said the number of Air Force personnel had increased beyond the 100 troops Obama said last month he had deployed.

“We just know there are drones; we don’t know what they are doing exactly,” said Djibril Abarchi, chairman of the Nigerien Association for the Defense of Human Rights, an independent watchdog group. “Nothing is visible. There is no transparency in our country with military questions. No one can tell you what’s going on.”

Most Nigeriens are strongly opposed to al-Qaeda in the Islamic Maghreb, the terrorist network’s affiliate, and recognize that their country is vulnerable without foreign military help, said Boureima Abdou Daouda, an imam in Niamey who leads a regional council of religious leaders that advises governments on countering extremism.

At the same time, as in many African countries, the presence of foreign troops is a sensitive issue given the history of colonialism in Niger. Daouda warned that the government could face trouble if it doesn’t shore up popular support and do a better job of publicly explaining why the American drones are necessary.

“Someone with bad intentions could say, ‘They are here to cause strife with Muslims,’ ” he said. “People might demonstrate. They might riot. Big flames begin with little flames.”


Senate Passes $3.7 Trillion Budget, Its First in 4 Years

March 23, 2013 5:30 AM EDT


After an all-night debate that ended close to 5 a.m., the Senate on Saturday adopted its first budget in four years, a $3.7 trillion blueprint for 2014 that would fast-track passage of tax increases, trim spending gingerly and leave the government deeply in debt a decade from now.

The 50-49 vote sets up contentious — and potentially fruitless — negotiations with the Republican-dominated House to reconcile two different visions for dealing with the nation’s economic and budgetary problems. No Republicans voted for the Senate plan, and four Democrats, Mark Pryor of Arkansas, Kay Hagan of North Carolina, Mark Begich of Alaska, and Max Baucus of Montana, also opposed it. All four are Red State Democrats up for re-election in 2014.

In contrast, the House plan ostensibly brings the government’s taxes and spending into balance by 2023 with cuts to domestic spending even below levels the automatic “sequestration” levels roiling federal programs now, and it orders up significant changes to Medicare and the tax code.



What They Told Us: Reviewing Last Week’s Key Polls

Rasmussen Reports

March 23, 2013


Voters want new thinking in Washington, D.C., but what they get is more of the same.

Consider the deficit-cutting plans rolled out by the two parties in recent days.   Voters don’t care much for either one. Thirty-five percent (35%) favor Republican Congressman Paul Ryan’s plan that calls for a balanced budget in 10 years through spending cuts only. Ryan’s plan includes cuts to Medicare but not the military. Nineteen percent (19%) support Democratic Senator Patty Murray’s plan that doesn’t balance the budget but includes a trillion dollars in tax increases and a trillion dollars in spending cuts over the next decade.

Interestingly, Murray is personally more popular than Ryan, the GOP’s 2012 vice presidential nominee, even though she is much less well-known.   Ryan is now more disliked than former House Speaker Nancy Pelosi who long has reigned as the most unpopular congressional leader.

Voter frustration in highlighted by Washington’s bumbling on the budget. Sixty-three percent (63%) of voters believe it is Very Important to balance the federal budget, although only seven percent (7%) think it is Very Likely to happen in the next 10 years.  

Just 16% of voters think it is possible to balance the federal budget without cutting spending.  But they are evenly divided on whether it is possible to balance the budget without raising taxes.

But The Washington Post’s Ezra Klein and others on the political left argue that the federal deficit is, if anything, too small. Just 20% of voters share Klein’s view, while 59% think the deficit is too big.

Only 36% would rather have a balanced budget with higher levels of taxes and spending than a deficit with lower levels of taxes and spending.  

Scott Rasmussen discusses Washington’s never-ending budget battles with Congresswoman Marsha Blackburn, a Tennessee Republican, on this weekend’s edition of What America Thinks
.   Then he sits down with Caren Bohan from the National Journal and The Hill’s Bob Cusack to talk about what happened to President Obama’s post-election momentum.

What America Thinks is a weekly television show currently available on 61 stations. Find a station near you.

Obama’s job approval ratings have been slipping in the daily Presidential Tracking Poll.   Sixty-nine percent (69%) of voters now consider the president at least somewhat liberal, including 43% who see him as Very Liberal. 

  Voters also disagree with Washington’s continued propping-up of the nation’s megabanks.  A new Senate report reveals that the nation’s largest bank, JP Morgan Chase, manipulated and withheld key information during its record trading losses last year, prompting even stronger belief that the big banks haven’t learned their lesson after receiving government bailouts in 2008. Most Americans want to end government subsidies for these “too big to fail” institutions, and half want to see these megabanks broken up 

“No bank should ever be in a position where it could be deemed too big to fail,” Scott Rasmussen says in his latest weekly newspaper column.   “It’s time to bust up the big banks.”

On Monday, the Supreme Court heard oral arguments in yet another dispute between the federal government and the state of Arizona. This time the fight is over Arizona’s requirement that people must prove their citizenship before being allowed to register to vote. The Obama administration argues that this requirement is discriminatory. However, 71% of voters nationwide side with Arizona and think proof of citizenship should be required before voter registration. By a two-to-one margin, voters reject the argument that this could discriminate against some.

Most voters like finding a way for illegal immigrants to stay in this country but not until the border is secured.   However, they remain skeptical about whether the federal government actually will secure the border if immigration reform legislation is passed.

One thing Americans don’t want the government involved in is the housing market. Just 21% think the government should help those who are struggling with their mortgages. Sixty-five percent (65%) believe that if someone can’t afford to make increased mortgage payments, he or she should sell their home and buy a less expensive one.

Short-term confidence about home values is down from last month’s high, but the number of homeowners who say their home is worth more than what they still owe on it is back over 50%.   More Americans than ever (28%) believe now is a good time to sell a house, although most still disagree.  

At week’s end, 53% of adult consumers said the United States is still in a recession. A plurality (49%) of investors agrees.

Voters again trust Republicans more than Democrats when it comes to handling the economy, but the president’s party continues to be trusted more on most issues tracked regularly by Rasmussen Reports. This includes a whopping 25-point advantage when it comes to the environment.

Democrats lead Republicans again this week on the Generic Congressional Ballot

However, only 17% of all voters nationwide feel Very Connected to a national political party.
That’s a stronger connection than people feel to the federal government (7%) and roughly the same as allegiance to local schools, local sports teams and high school friends.   Family remains far and away the strongest social connection: 76% of Americans feel Very Connected to their family. Also far outpacing the affiliation with a national political party is the 36% who feel Very Connected to their job and the 34% who feel such a connection to a local church or religious organization.


In other surveys last week:

– Thirty-one percent (31%) of Likely U.S. Voters say the country is heading in the right direction

– Voters are now evenly divided over whether they want their governor to help make the president’s health care law a reality in their state. 

– By a 46% to 38% margin, voters oppose a single-payer health care system in which the government provides coverage for everyone. 

– The federal government provides deposit insurance for regulated banks up to a limit of $250,000 per account per bank. Nine-out-of-10 Americans (87%) support this federal policy

– Many Americans planned to celebrate St. Patrick’s Day last Sunday by wearing green or having a drink even though they don’t consider it an important holiday. 

– Sixty-five percent (65%) say the arrival of spring puts them in a better mood. 



General Officer Announcements

March 22, 2013


            The chief of staff, Air Force announces the assignment of the following general officers: 

            Maj. Gen. Thomas J. Masiello, director of Special Programs, Office of the Under Secretary of Defense for Acquisition, Technology and Logistics, Pentagon, Washington, D.C., to commander, Air Force Research Laboratory, Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio. 

March 16 2013



Top general at Wright-Patt says cuts will be ‘far-reaching’

In an exclusive interview, Gen. Wolfenbarger says ‘impact on my people, especially my civilians will be significant.”

Dayton Daily News

Posted: 5:00 p.m. Sunday, March 10, 2013

By Barrie Barber

Staff Writer


Air Force spending cuts will slow plans to modernize an aging fleet, delay or cancel acquisition programs, ground flight testing to a halt except for a new stealth fighter, and could create up to a five-year backlog at maintenance depots, the leader of the Air Force Materiel Command told the Dayton Daily News in an exclusive interview.

Gen. Janet C. Wolfenbarger, AFMC commander based at Wright-Patterson, said automatic cuts known as sequestration will have a major impact on missions, installations and hit hard 60,000 civilian employees who face potential furloughs at nine bases in nine states.

The civilians in her command, including 13,000 at Wright-Patterson, could face 22-day furloughs between April and September, a 20 percent pay cut during that time. Seventy-seven percent of the 80,000-member AFMC workforce are civilian employees.

“The impact on my people, especially my civilians will be significant,” she said. “I don’t know anyone who can take a 20 percent cut to their income, with minimal notice, and not feel it. Many of my employees live paycheck to paycheck.”

Many have talked about finding part-time work or withdrawing money from retirement accounts “to make ends meet,” she said.

“This is devastating,” Wolfenbarger said. “We have broken faith with our civilian airmen.”

Furloughs would begin in April once employees receive a 30-day notice.

An exact estimate of the size of the cuts isn’t yet known until Congress approves a final appropriation. But the command has planned for a $1.4 billion reduction, or 40 percent of what’s left in a readiness account and an additional $300 million, or 29 percent less for operations, according to AFMC. It’s all part of the $43 billion the Department of Defense must eliminate from spending between now and September under sequestration. The Air Force faces a more than $14 billion share of that cut between sequestration and a shortfall in wartime spending.

Sequestration will be far-reaching across AFMC,” the general said in response to Dayton Daily News questions. “Sequestration impacts every piece of the AFMC mission and, as a result, the entire Air Force.”

Spending cuts at Wright-Patterson will also slow research and technology development at Air Force Research Laboratory directorates and force the cancellation of most evening and weekend special events at the National Museum of the U.S. Air Force, Wolfenbarger said.

In other impacts, she said:

  • The Air Force Life Cycle Management Center, headquartered at Wright-Patterson, will slow replacing and modernizing aging Air Force aircraft. “Acquisition programs will be delayed or canceled, some costs will rise, and much needed capabilities will take longer to get into the hands of our warfighters,” the four-star general said.
  • The Air Force Test Center will be “significantly impacted” at test ranges. All flight testing will be grounded and test support suspended by the end of June, with the exception of the F-35 Joint Strike Fighter, and a summer test pilot school will be canceled at Edwards Air Force Base in southern California.
  • The Air Force Sustainment Center, headquartered at Tinker Air Force Base in Oklahoma, will cut operations at three depots that could mean the deferment of maintenance and modification work on roughly 297 aircraft and 197 engines, a 40 percent drop in operations. “Depot operations will slow down, aircraft availability and mission capable rates will drop, and some aircraft will simply be grounded,” Wolfenbarger said. “It could take up to five years for depot operations to ‘catch up’ once fully funded.”

Communities surrounding AFMC bases — such as Fairborn, Riverside, Huber Heights and Dayton — will also feel the pinch of less money in the economy, the general said.

“Less money in the pockets of our civilians means less money to spend at the local grocery store, restaurant or movie theater,” she said. “Less money will go to local taxes that pay for roads, schools and infrastructure.”

The spending cuts could mean contract modifications with defense contractors, Wolfenbarger added.

“Small contractors, who provide everything from office supplies to bomb fuses, will be hit especially hard since they do not have the financial depth of larger financial contractors,” she said.

A suspension of spending on base maintenance for all but the most critical needs will be felt, too, she said.

“My people will come to work at bases where streets, buildings and housing will see all but emergency upkeep delayed,” she said.

She held out hope Congress could lessen the impact with House approved legislation sent to the Senate. The bill adds $10 billion to the military’s operation and maintenance accounts, boosting spending to $173.4 billion, but takes money from personnel, procurement, research and development to account for the difference, according to The Associated Press. The legislation would eliminate the threat of a government shutdown when a continuing funding resolution ends March 27.

“While not all that we requested, we hope the bill, when eventually reconciled with a Senate version, will give the Department of Defense more clarity and more flexibility as it carries out sequestration reductions,” she said.


How Many Cyberattacks Hit the United States Last Year?


By Brian Fung

March 8, 2013

Thanks to the warnings of senior lawmakers and Obama administration officials, Americans are growing more aware of online vulnerabilities that could lead to a “cyber Pearl Harbor” attack. By definition, such a catastrophe would be extraordinarily rare, its chances perhaps no more than one in a … what, exactly?

It’s hard to talk about odds when the pool of minor cyberincidents is growing larger every day. Depending on when it arrives, the first major cybervent against the United States could be a one-in-2 million incident or a one-in-10-trillion incident. But noise from garden-variety hacks shouldn’t just be ignored in a broader search for the next 9/11. Understanding those day-to-day online skirmishes can help reveal the scale of the broader problem.

The Homeland Security Department runs a national clearinghouse of cyberthreat information known as the U.S. Computer Emergency Readiness Team, or US-CERT. Part of its job is to track cyberincidents, which DHS defines as violations of an organization’s security policy. That could include unauthorized attempts to access a network, DDoS attacks, or other nasty behavior.

In 2007 — the year that Twitter was founded — US-CERT received almost 12,000 cyberincident reports. That number had more than doubled by 2009, according to new statistics from the Government Accountability Office , and it had quadrupled by 2012. We’re learning of more attacks, more often. From a certain point of view, this is a good thing: Growing awareness means improved detection.

More than two-fifths of the cyberincidents reported by federal agencies last year were attempts to access U.S. networks or propagate malicious code. And here’s something else: The incidence of denial-of-service attacks that disable a website with bogus traffic was hardly worth mentioning. Remember when hackers from Anonymous managed to take down the CIA’s website last February? Despite the breathless news coverage of that event, it was dwarfed by the number of other incidents the government recorded. And these are just the ones the government knows about.

All of which is to say that the universe of cyberincidents is gigantic, and that by focusing so closely on The Next Big Attack, the United States risks failing to connect the dots — again.

I’ll leave you with some additional recent numbers on cyberintrusions, as reported by various actors:


The energy company BP says it suffers 50,000 attempts cyberintrusion a day.

The Pentagon reports getting 10 million attempts a day.

The National Nuclear Security Administration, an arm of the Energy Department, also records 10 million hacks a day.

The United Kingdom reports 120,000 cyberincidents a day.

That’s almost as many as the state of Michigan deals with.

Utah says it faces 20 million attempts a day — up from 1 million a day two years ago.

How these groups define and count their cyberincidents could be fairly diverse; it stretches credibility to think that Utah would be a bigger target than the Defense Department, for example. But, altogether, the numbers provide a necessary sense of scale.



Pyongyang scraps armistice amid heightened saber rattling

By Tom Watkins and Ed Payne , CNN

updated 12:31 PM EDT, Mon March 11, 2013

(CNN) — Saber-rattling rose Monday to new levels on the Korean peninsula, as Pyongyang officials “scrapped” the armistice credited for nearly 60 years of uneasy peace and then failed to answer a hotline phone.

“The Korean Armistice Agreement is to be scrapped completely just from today,” said a spokesman for the North Korean military — the Korean People’s Army Supreme Command — according to Rodong Sinmun, the official newspaper of North Korea’s ruling Workers’ Party.

North Korea cited the U.N. Security Council’s unanimous passage last Thursday of tougher sanctions against Pyongyang for carrying out missile and nuclear tests.

“The collective sanction is precisely a declaration of war and an act of war against the DPRK,” said the newspaper, using the initials of North Korea’s formal name, the Democratic People’s Republic of Korea.

U.S.-South Korean drills

North Korea’s announcement came as military drills involving South Korea and the United States were taking place. The exercises, called Key Resolve, are in conjunction with the Foal Eagle joint exercises that began March 1 and are scheduled to last two months. More than 3,000 U.S. forces are taking part in Key Resolve, according to United States Forces Korea.

North Korea also has called the annual training exercises “an open declaration of a war.”

“Under the cloak of the UNSC, the U.S. seeks to realize its aggressive purpose against the DPRK by threatening its right to existence as well as its sovereignty,” the newspaper continued. “What is graver is the fact that the U.S. cooked up the resolution on sanction timing to coincide with the ‘Key Resolve’ and ‘Foal Eagle’ joint military exercises.”

The United Nations Command notified the North Korean military on February 21 of the exercise dates, noting that they are annual joint exercises that are defensive in nature and not related to current events on the Korean Peninsula.

Also Monday, North Korea did not answer its hotline with Seoul, South Korea’s unification ministry said, according to the Yonhap news agency.

The ministry said the North did not answer two attempts to communicate by telephone at 9 a.m. and 4 p.m. local time.

The military hotline was set up in 2004 with the goal of easing tensions along the heavily fortified border between South and North, the world’s last Cold War frontier.

Last week, Pyongyang said it planned to terminate its military telephone line with the United States.

But Andre Kok, deputy public affairs officer for U.S. Forces in Korea, said reports that the North’s Korean People’s Army, known as the KPA, cut off communication often arise when military training exercises are taking place.

“When we place a call on the direct phone line and the KPA does not answer, we have no way of knowing if the KPA has actually disconnected the phone lines or are just not answering the phone,” he said.

North Korea’s nuclear warning

North Korea had previously warned it could carry out strikes against the United States and South Korea.

But analysts say North Korea is years away from having the technology needed to mount a nuclear warhead on a missile and aim it accurately at a target.

And, analysts say, North Korea is unlikely to seek a direct military conflict with the United States, preferring instead to try to gain traction through threats and the buildup of its military deterrent.

The Koreas are still technically at war because the 1950-53 war ended in a truce, not a peace treaty.

In 2002, then-U.S. President George W. Bush labeled Pyongyang part of an “axis of evil” with Iraq and Iran.

Cuts Give Obama Path to Create Leaner Military

NY Times

March 10, 2013



WASHINGTON — At a time when $46 billion in mandatory budget cuts are causing anxiety at the Pentagon, administration officials see one potential benefit: there may be an opening to argue for deep reductions in programs long in President Obama’s sights, and long resisted by Congress.

On the list are not only base closings but also an additional reduction in deployed nuclear weapons and stockpiles and a restructuring of the military medical insurance program that costs more than America spends on all of its diplomacy and foreign aid around the world. Also being considered is yet another scaling back in next-generation warplanes, starting with the F-35, the most expensive weapons program in United States history.

None of those programs would go away. But inside the Pentagon, even some senior officers are saying that the reductions, if done smartly, could easily exceed those mandated by sequestration, as the cuts are called, and leave room for the areas where the administration believes more money will be required.

These include building drones, developing offensive and defensive cyberweapons and focusing on Special Operations forces.

Publicly, at least, Mr. Obama has not backed any of those cuts, even though he has deplored the “dumb” approach of simply cutting every program in the military equally.

Mr. Obama will visit Capitol Hill on Tuesday in another attempt to persuade lawmakers to reach a long-term deficit-reduction deal and replace the indiscriminate cuts with more targeted ones.

Still, Pentagon officials are starting to examine targeted ways to cut their budget. “What we’ve learned in the past year is that the politics of dumb cuts is easy, because no one has to think through the implications of slicing everything by 8 percent,” said one senior defense official who has been deeply involved in the planning process. “The politics of cutting individual programs is as hard as it’s always been.”

When Mr. Obama took office four years ago, with the Iraq and Afghanistan wars raging, deep cuts in the defense budget seemed unthinkable. He forced the Pentagon to cut nearly $50 billion a year, which was regarded by many as huge.

But today, deficit hawks outnumber defense hawks on Capitol Hill, and the possibility of $100 billion or more in additional annual cuts does not seem outrageous — if only agreement were possible on which programs should shrink fastest.

Last week, a group of five former deputy defense secretaries — essentially the Pentagon’s chief operating officers — called for a “bottom up” review that reassesses the need for each major program and weapons system, saying this was an opportunity to accomplish cuts that have long been delayed, after a decade in which the American national security budget has nearly doubled.

In their more candid moments — almost always when speaking with a guarantee of anonymity — the Pentagon’s top civilian and military leaders acknowledge that the painful sequestration process may ultimately prove beneficial if it forces the Defense Department and Congress to reconsider the cost of cold-war-era systems that are still in inventory despite the many changes made to the military in the last 10 years.

“Sequester is an ugly experience, but it could grow up to be a budget discipline swan,” said Gordon Adams, a former senior budget official in the Clinton administration who is now at the Stimson Center, which studies defense issues. “It could provide the planning discipline the services and the building have been missing since 2001.”

The central challenge facing the Pentagon and the White House, Mr. Adams and several current senior officials said, is this: All the big, immediate budget benefits come from reducing the size of active-duty forces. By contrast, cutting new weapons systems and bases and reducing health care costs can save large amounts 5 to 10 years out, but it does little in the short term.

Mr. Obama took a step in that direction in 2011, when he rejected a Pentagon request for a permanent standing force of 100,000 or so troops for future “contingency operations” like those in Iraq and Afghanistan. “That’s not the way we are going to go,” he told his staff after the request was received.

The message quickly got back to the Pentagon that Mr. Obama had no interest in repeating the kind of lengthy interventions that have consumed more than $3 trillion since the attacks of Sept. 11, 2001.

But the Pentagon’s subsequent agreement to cut $500 billion in planned spending over a decade turns out to have been just a start, and military officials are now abandoning the phrase that they will have to “do more with less” and starting to assess what it would mean to just do less.

Toward that end, officials say that Ashton B. Carter, the deputy defense secretary, plans to convene a panel of experts to conduct a crash review of the current national military strategy with an eye to reshaping it to fit the new budget constraints.

Mr. Carter, whom the White House asked to remain under the new defense secretary, Chuck Hagel, has already cut the budget for information technology, to force the Pentagon to find cheaper ways to provide it, officials say.

But the next set of cuts will be much harder, because they involve huge constituencies — in Congressional districts, inside the military services and among veterans’ groups.

“The problem is that the biggest, most-needed cuts are in programs that also have the broadest set of defenders,” said Maren Leed, the director of the defense policy studies group at the Center for Strategic and International Studies in Washington and a former top aide to Gen. Ray Odierno, now the Army’s chief of staff.

The most obvious examples of those problems come in base closings and higher co-payments or premiums for the beneficiaries of Tricare, the military’s sprawling health care program, which costs upward of $51 billion a year. To take the politics out of base closings, Congress in the past has established a commission to identify underused facilities, creating a list that it could either vote up or down on but could not amend.

But with many of the targeted bases now fairly obvious to members of Congress, they are reluctant even to establish a new commission. Similarly, Congress turned back a modest administration effort to revamp Tricare. “There’s not a single district without a lot of beneficiaries of the system,” Ms. Leed said.

Cuts in the nuclear arsenal face a different political imperative. Mr. Obama has been sitting for months on a proposal, agreed to by the Joint Chiefs of Staff, that could trim the number of active nuclear weapons in America’s arsenal by nearly a third and make big cuts in the stockpile of backup weapons. But he has not signed off on it.

Rather than act unilaterally, the administration is hoping it can negotiate similar cuts with President Vladimir V. Putin of Russia — and do it without a treaty that would surely set off another battle with defense hawks in the Senate. But that prospect is doubtful, senior officials say.

Even if Mr. Obama wins his strategic argument that the arsenal is far too large for America’s future defense needs, it is not clear how big the savings would be. The easiest weapons to cut — those based in silos in the middle of the country — are also the cheapest to keep in the field.

The most expensive nuclear weapons to operate are carried aboard submarines; they are also the most invulnerable to attack, and thus Pentagon and White House strategists want to preserve them the longest.

Moreover, operating a production base for nuclear weapons, the Defense Department’s insurance policy in case the country ever needed to produce more, is very costly — though the administration is looking for ways to cut an $80 billion commitment to remake America’s nuclear laboratories.

The biggest target of all is the F-35 Joint Strike Fighter, a new jet for the Navy, the Air Force and the Marines, and the largest single line item in the Pentagon’s budget. Between $55 billion and $84 billion has already been spent, but the estimates of final production costs run close to $400 billion.

The Marine Corps says it has no choice but to go forward with its version of the plane, because its current aircraft are obsolete, and the Air Force wants to replace aging F-16s with the new, stealthy plane.

But the program was wildly mismanaged during the Bush administration — “The Joint Strike Fighter program has been both a scandal and a tragedy,” Senator John McCain, Republican of Arizona, said in December 2011 — and now that the number of planes scheduled for production has already been slashed, the per-plane cost has risen to well over $1 billion.

The handling of the production by Lockheed Martin, and the huge changes demanded by each of the services, has made the plane an easy target for critics.

But Lockheed has spread production over nearly every state in the union, in order to keep Congressional support high: as soon as the discussion veers toward strategic needs, Lockheed begins to stress the jobs at risk if the program were cut or canceled.



Sequestration’s Stew of Furloughs and Expense Cuts


The Fiscal Times

March 11, 2013

One week into sequestration and agencies across the federal government are busy reallocating spending to accommodate the across-the-board budget cuts. While many agencies like the Department of Homeland Security and Defense Department are planning to furlough thousands of employees, others like the Small Business Administration and the Government Accountability Office have planned ahead and are managing the sequester furlough-free.

Here is a rundown of the most up-to-date information of sequestration’s effects on federal government agencies. Point of information: A government furlough is a temporary layoff that does not interrupt health care coverage, pensions, or other employee benefits. No one is fired.

Compiled from Congressional Testimony, the White House Factsheet, Government Executive, Office of Management and Budget and Office of Personnel and Management.


Agriculture Department

More than 2,100 Food Safety and Inspection Service employees will be furloughed for two weeks.
2013 Budget: $155 billion
Workforce: 100,574

Defense Department
DOD will
begin furloughing “many” of its 800,000 civilian workers in late April, one day a week for up to 22 workdays, according to congressional testimony from former Defense Secretary Leon Panetta, who did not specify the total number of employees being furloughed.
2013 Budget: $525.5 billion
Total workforce: 2,086,701

Economic Development Administration

Will furlough all of its employees for six days.
2013 Budget $220 million
Workforce: 206

Environmental Protection Agency

The agency expects to furlough many of its 18,000 employees for 13 days, but nothing has been finalized and further details have yet to be released.
2013 Budget: $8.3 billion
Workforce: 18,655

Federal Aviation Administration

Nearly all of the 43,000 employees will be furloughed for one-to-two days each pay period through the rest of the fiscal year. FAA will also close 100 air traffic control towers and eliminate midnight shifts at smaller airports to absorb cuts.
2013 Budget $12.7 billion
Workforce: 43,000

Federal Courts

The Judicial Conference of the United States expects to furlough 20,000 employees for 16 days, as well as cut spending on information systems, and other areas.
2013 Budget: $5.2 billion

Internal Revenue Service

Employees will be furloughed for five to seven days beginning in the summer after the filing season ends, extending through the end of the fiscal year – September 31st.
2013 Budget: 12.2 billion
Workforce: 100,000

Justice Department

The DOJ has already sent out furlough notices to its employees. Every FBI employee will be furloughed for 14 workdays, or nearly three full weeks through the rest of the fiscal year.
2013 Budget: 27.1 billion
Workforce: 117,285


Broadcasting Board Of Governors

The agency will avoid furloughs by implementing a hiring freeze, eliminating bonuses and reducing broadcasts to absorb the 5 percent or $37.6 million in spending cuts.
2013 Budget $720 million
Workforce: 1,922

Government Accountability Office

The GAO is planning to avoid furloughing its employees by reducing costs in other areas like travel and IT spending.
2013 Budget $526.2 million
Workforce: 2,975

Government Printing Office
No furloughs. The agency will save money by delaying spending in technology and other investments.
2013 Budget $83.6 million
Workforce: 2,378


Housing And Urban Development

Secretary Shaun Donovan told the Senate Appropriations Committee furloughs would likely be required to absorb the cuts, but did not specify how many employees would be affected.
2013 Budget: $44.8 billion
Workforce: 9,594

Health and Human Services
HHS does not plan to furlough its employees.
2013 Budget $707 billion
Workforce: 64,750

National Institutes Of Health

NIH does not expect to furlough employees, since the bulk of the budget goes toward grants and funding for research. Aside from reductions in research grants, spending on travel and conferences will likely face the chopping block.
2013 Budget: $30.7 billion
Workforce: 18,000

National Labor Relations Board
NLRB has already issued formal furlough notices.
2013 Budget: $292.8 million

National Oceanic Atmospheric Administration
NOAA is issuing furloughs to 2,600 employees.
2013 Budget $5.1 billion
Workforce: 12,222

National Aeronautics and Space Administration

Nothing has been finalized, but NASA expects to furlough an unspecified number of its employees, and cut 20,500 contractor jobs.
2013 Budget: $17.7 billion
Workforce: 18,201

Nuclear Regulatory Commission
NRC isn’t planning on furloughing employees or cutting their salaries.
2013 Budget: $1.053 billion
Workforce: 3,951

Small Business Administration

SBA is avoiding furloughs and will instead rely on staff cuts made through early retirements in 2012.
2013 Budget $949 million
Workforce: 3,200

Smithsonian Institute No furloughs
2013 Budget? $856 million
Workforce: 4,233

State Department

Is not expecting to furlough its 40,613 employees.
2013 Budget: 51.6 billion
Workforce: 40,613

Treasury Department No furloughs for now. Treasury plans to institute hiring freezes, and reduce spending on support, travel, training and supplies.
2013 Budget $14 billion
Workforce: 107,612


Education Department
Furloughs are expected but nothing has been finalized.
2013 Budget $69.8 billion
Workforce: 4,200

Homeland Security Department
DHS already notified 60,000 custom and border patrol agents to expect furloughs in April. More than 1,000 Secret Service agents are also expected to be furloughed.
2013 Budget $39.5 billion
Workforce: 208,000

Interior Department

Secretary Ken Salazar also said furloughs\are likely for thousands of employees, though nothing has been finalized.
2013 Budget: $11.4 billion
Workforce: 68,894

Labor Department

Acting Labor Secretary Seth Harris told employees that some agencies within the department will be forced to furlough employees, though nothing has been finalized yet.
2013 Budget: 49 billion
Workforce: 16,848

Social Security Administration

The SSA has not made any decisions on whether it will furlough its employees. For now, it is trying to survive on the reduced budget level through attrition.
2013 Budget: $11.9 billion
Workforce 65,904


Two UAS workshops offered

Dayton Daily News

Updated: 12:14 p.m. Monday, March 11, 2013 | Posted: 11:32 a.m. Monday, March 11, 2013


Sinclair Community College will hold two workshops before the second annual Ohio Unmanned Aerial Systems Conference April 23-25, the school announced Monday.

Sinclair and Riverside Research will present two, one-day courses, Introduction to Unmanned Aerial Systems (UAS) and Current State of UAS Standards and Regulations, through its UAS Training & Certification Center on Sinclair’s downtown Dayton campus.

Introduction to UAS on March 25 introduces specialized technologies including newly developed sensors, aviation platforms, products and applications. Participants will explore ways to integrate their areas of interest with UAS capabilities through scenarios covering a variety of uses.

Current State of UAS Standards and Regulations on March 26 reviews today’s UAS regulations and best practices and provides an outlook for anticipated federal guidance in the future. Operating UAS in the National Airspace System (NAS) is a major concern and is an area of research emphasis.

Both classes will be held from 8 a.m. to 5 p.m. in the Sinclair Conference Center, Building 12, located at West Fourth and South Perry streets downtown. The special package fee for both classes is $500, and include materials, continental breakfast, lunch, and parking in the Sinclair Conference Center’s underground parking garage.

For more information and registration details, go online to or call Sinclair Workforce Development at (937) 252-9787.


DSB task force urges security mandates for DoD cloud computing


March 11, 2013 | By David Perera

Cloud computing adoption within the Defense Department will require establishment of clear security mandates, says a report from a Defense Science Board task force.

The report ( , dated January 2013, says among the mandates the DoD chief information officer and the Defense Information Systems Agency could establish include aspects of trusted computing such as hypervisor attestation to assure that it hasn’t been corrupted, cryptographic sealing and “strong virtual machine isolation.”

Data at rest should be stored in encrypted form with keys protected using a hardware attestation “such as a trusted platform module” and data in transit should likewise be encrypted with hardware-attested keys, the report says.

The task force also recommends that the DoD CIO and DISA establish standard service level agreements for both private- and public- cloud computing, and that the DoD CIO establish a central repository to document the cloud computing transition. The repository should contain enough data to improve understanding of systems costs before, during and after a switch to cloud computing as well as best practices and metrics.

The task force also calls on the under secretary of defense for acquisition, technology & logistics and the DoD CIO to establish a lean, rapid acquisition approach for cloud computing hardware and software and other information technology.

The two co-chairs of the task force were Eric Evans, director of the MIT Lincoln Laboratory, and Robert Grossman, a University of Chicago professor and partner of the Open Data Group.

Read more: DSB task force urges security mandates for DoD cloud computing –

Is The U.S. Government Too Big To Fail?

Mike Patton, Contributor

3/11/2013 @ 8:30PM |478 views 1 comments, 0 called-out

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This is the first in a series on the topic of our governments debt and the possibility of default. The United States has existed as a republic for nearly 237 years, during which time there have been five defaults. Could it happen again? Most would summarily dismiss the very notion as ridiculous. However, although no country “plans” to default, sometimes circumstances and a lack of forethought combine to create this unfortunate outcome. In this series, we’ll examine this question and discuss how it would affect us, the citizens of this great nation. To begin, let’s journey back to the late 1700′s, right after the U.S. gained independence from the British Empire.

Default #1: The Continental Currency Default of 1779

After the U.S. became a sovereign nation, there were debts to pay. To facilitate payment, the Continental Congress printed money. In fact, by the time they were finished, they had printed 241 million “Continental Dollars.” At a 3.0% inflation rate, this is roughly equivalent to $243 billion today. At the time, the federal government did not possess taxation powers and, in essence, this debt fell upon each of the 13 states according to their population. Within a few years, it became clear to an increasingly suspicious public that Congress and the states had neither the will nor the capacity to meet its obligations. As a result, the dollars began to depreciate until Congress announced in November 1779, they would devalue the “Continentals” by 38.5 to 1. This was an admission of default and holders of the Continental Dollars realized significant losses.

Back to the Future

The chart below illustrates how the government has been spending more than it’s received each year with the exception of 1998 to 2001. Notice how the gap widens dramatically at the right end of the graph. When the Great Recession hit in 2008, government receipts fell sharply, but expenditures rose just as sharply, creating record deficits. These deficits were added to the national debt and today we are staring at a $16.6 trillion debt and it’s rising fast. In fact, in just a few short years, it is projected to hit $22 trillion!

Move up tMove down

When you separate facts from sound bites, you find that revenue is not the issue. Spending is the problem! Is the government trying to spend our way out of this economic malaise or is there something deeper at work? I believe there’s something deeper but we’ll discuss that in a subsequent article. What would happen if the economy were to accelerate?

Retirees Rejoice?

With the massive expansion of the monetary supply, thanks to the Federal Reserve’s easy money policy, if economic growth is indeed beginning to accelerate, interest rates will continue to rise. That’s good news for “income starved” retirees, however, it’s bad news for the federal government. Actually, it’s very bad news. For starters, the cost of servicing our debt would rise and place a heavy burden on the government’s budget. Currently, the interest payments on our debt is the fourth largest item in the federal budget. Moreover, it could force government to cut in places they may not want to cut or raise taxes instead. After all, everyone should pay their “fair share,” right? But who’s to say what’s fair? Also, an accelerating economy would reduce the need for higher taxes and may take some of the air out of that argument. Hence, if the “higher tax crowd” is going to be successful, I expect the rhetoric will increase.

Remember, the government is a large and powerful force and a robust economy may not be to their liking, at least not quite yet. Because of the negative ramifications to the federal government, we could hear a great deal of negativity. Things like pushing grandma over the cliff and other ridiculous banter. Constant negativity has a tendency to create fear in the minds of consumers and cold cause them to restrain spending. Then, the Fed could continue its acceleration of the money supply and interest rates would remain low for a while longer, the very thing government desires. If you doubt this, just Google “Financial Repression.”


Agree or disagree, in reality government does not want interest rates to rise. And the best way to keep rates low is to instill fear. When fear rises, investors move money from risky assets to “safe” U.S. government securities which would boost the price and keep yields down. Of course, if that doesn’t work, we could just ask the Fed to print more money and purchase even more treasuries. How about QE IV, V, or higher? Actually, the lines are beginning to blur.

In my next article, we’ll discuss another U.S. default and other possible ramifications.


White House Supports DOD Spectrum Research

InformationWeek Government

J. Nicholas Hoover | March 11, 2013 04:18 PM

The Defense Advanced Research Projects Agency’s Shared Spectrum Access for Radar and Communications (SSPARC) program, announced last month, seeks research proposals to develop “revolutionary” advances in spectrum sharing.

High-speed wireless Internet access and other wireless technologies are widely available around the United States, and mobile services contribute billions to the American economy, but airwaves are increasingly crowded by services offered by an array of private sector stakeholders and by government, from transportation systems to law enforcement.

“Building on U.S. leadership and promoting even greater economic growth requires that the Nation make ever more efficient use of spectrum,” White House deputy CTO for telecommunications Tom Power and assistant secretary of commerce for communications and information Lawrence Strickling wrote in a blog post. “Ensuring adequate spectrum to support the expected growth in commercial and non-commercial uses poses technical challenges.”

To that end, SSPARC seeks to support spectrum sharing between military radars and military and commercial communications systems. To share spectrum with commercial systems, SSPARC is focusing on low-power wireless access points, known as “small cells,” that can extend cellular coverage.

SSSPARC looks to “improve performance or reduce interference when sharing spectrum” at an “acceptable cost” by, for example, identifying devices causing interference and changing how they are transmitting information to help prevent that interference or by developing hardware and methodology to improve separation of the radar and other data.

The Obama White House has been a vocal supporter of freeing up spectrum for use and has said that American leadership in developing wireless services is “an important part” of the Obama administration’s job creation and growth strategy.

The government under the Obama administration has taken a number of steps to free up wireless spectrum. President Obama in 2010 issued a memorandum instructing the National Telecommunications and Information Administration (NTIA) to identify federal and commercial spectrum that could be reused for wireless broadband, and the NTIA uncovered a number of bands that could be made available.

The FCC under Obama has catalogued and freed up so-called “white space” spectrum between TV channels for unlicensed use, has begun to reform the Universal Service Fund to help extend broadband Internet connections, and has removed barriers to the use of certain other spectrum.

However, the efforts of the last few years have not come without criticism. The 2012 Republican Party platform criticized President Obama for making “no progress” toward universal broadband coverage since the end of the Bush Administration, for example. SSPARC and the White House support for it and similar programs might not end Republican criticism, but it could help spark better ways to use and free up spectrum.


Bjorn Lomborg: Green Cars Have a Dirty Little Secret

Producing and charging electric cars means heavy carbon-dioxide emissions…

Updated March 11, 2013, 10:14 a.m. ET

By Bjorn Lomborg


Electric cars are promoted as the chic harbinger of an environmentally benign future. Ads assure us of “zero emissions,” and President Obama has promised a million on the road by 2015. With sales for 2012 coming in at about 50,000, that million-car figure is a pipe dream. Consumers remain wary of the cars’ limited range, higher price and the logistics of battery-charging. But for those who do own an electric car, at least there is the consolation that it’s truly green, right? Not really.

For proponents such as the actor and activist Leonardo DiCaprio, the main argument is that their electric cars—whether it’s a $100,000 Fisker Karma (Mr. DiCaprio’s ride) or a $28,000 Nissan Leaf—don’t contribute to global warming. And, sure, electric cars don’t emit carbon-dioxide on the road. But the energy used for their manufacture and continual battery charges certainly does—far more than most people realize.

A 2012 comprehensive life-cycle analysis in Journal of Industrial Ecology shows that almost half the lifetime carbon-dioxide emissions from an electric car come from the energy used to produce the car, especially the battery. The mining of lithium, for instance, is a less than green activity. By contrast, the manufacture of a gas-powered car accounts for 17% of its lifetime carbon-dioxide emissions. When an electric car rolls off the production line, it has already been responsible for 30,000 pounds of carbon-dioxide emission. The amount for making a conventional car: 14,000 pounds.

While electric-car owners may cruise around feeling virtuous, they still recharge using electricity overwhelmingly produced with fossil fuels. Thus, the life-cycle analysis shows that for every mile driven, the average electric car indirectly emits about six ounces of carbon-dioxide. This is still a lot better than a similar-size conventional car, which emits about 12 ounces per mile. But remember, the production of the electric car has already resulted in sizeable emissions—the equivalent of 80,000 miles of travel in the vehicle.

So unless the electric car is driven a lot, it will never get ahead environmentally. And that turns out to be a challenge. Consider the Nissan Leaf. It has only a 73-mile range per charge. Drivers attempting long road trips, as in one BBC test drive, have reported that recharging takes so long that the average speed is close to six miles per hour—a bit faster than your average jogger.

To make matters worse, the batteries in electric cars fade with time, just as they do in a cellphone. Nissan estimates that after five years, the less effective batteries in a typical Leaf bring the range down to 55 miles. As the MIT Technology Review cautioned last year: “Don’t Drive Your Nissan Leaf Too Much.”

If a typical electric car is driven 50,000 miles over its lifetime, the huge initial emissions from its manufacture means the car will actually have put more carbon-dioxide in the atmosphere than a similar-size gasoline-powered car driven the same number of miles. Similarly, if the energy used to recharge the electric car comes mostly from coal-fired power plants, it will be responsible for the emission of almost 15 ounces of carbon-dioxide for every one of the 50,000 miles it is driven—three ounces more than a similar gas-powered car.

Even if the electric car is driven for 90,000 miles and the owner stays away from coal-powered electricity, the car will cause just 24% less carbon-dioxide emission than its gas-powered cousin. This is a far cry from “zero emissions.” Over its entire lifetime, the electric car will be responsible for 8.7 tons of carbon dioxide less than the average conventional car.

Those 8.7 tons may sound like a considerable amount, but it’s not. The current best estimate of the global warming damage of an extra ton of carbon-dioxide is about $5. This means an optimistic assessment of the avoided carbon-dioxide associated with an electric car will allow the owner to spare the world about $44 in climate damage. On the European emissions market, credit for 8.7 tons of carbon-dioxide costs $48.


Yet the U.S. federal government essentially subsidizes electric-car buyers with up to $7,500. In addition, more than $5.5 billion in federal grants and loans go directly to battery and electric-car manufacturers like California-based Fisker Automotive and Tesla Motors . This is a very poor deal for taxpayers.

The electric car might be great in a couple of decades but as a way to tackle global warming now it does virtually nothing. The real challenge is to get green energy that is cheaper than fossil fuels. That requires heavy investment in green research and development. Spending instead on subsidizing electric cars is putting the cart before the horse, and an inconvenient and expensive cart at that.

Mr. Lomborg, director of the Copenhagen Consensus Center in Washington, D.C., is the author of “The Skeptical Environmentalist” (Cambridge Press, 2001) and “Cool It” (Knopf, 2007).

A version of this article appeared March 11, 2013, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: Green Cars Have a Dirty Little Secret.


Dayton Daily News

Updated: 6:44 p.m. Tuesday, March 12, 2013 | Posted: 12:05 p.m. Tuesday, March 12, 2013

UAV testing could bring 2,700 jobs, $2.1B to Ohio, study says

Dayton Daily News

By Barrie Barber

Staff Writer


The potential growth of the unmanned aerial systems industry will have an “enormous economic and job creation” impact in the United States, creating at least 2,700 jobs and a $2.1 billion impact in Ohio by 2025, according to an industry group study released Tuesday.

But one Dayton Development Coalition official said the projections underestimated the number of jobs that could be created in the Dayton-Springfield area and across the state.

“There’s many other areas that unmanned systems will have, future developments that we think Ohio will be a large player in,” said Maurice “Mo” McDonald, vice president of military affairs who has worked on UAV issues.

The study looked at employment, sales and taxes, but didn’t explore areas such as maintenance, training and the potential sale of U.S. drones overseas.

The report arrives in the midst of the Federal Aviation Administration calling for proposals to select six sites nationwide to test the integration of unmanned aerial vehicles into the national air space by 2015. The Dayton Development Coalition will submit Ohio’s pitch to the FAA which is expected to choose the winners by the end of the year. The state has teamed with Indiana to make its case. The proposal would have the UAVs flown out of the Springfield-Beckley Municipal Airport and the Wilmington Air Park.

The Arlington, Va.-based Association for Unmanned Vehicle Systems International report projected that if UAVs are integrated into civilian airspace by 2015 the industry will create 70,000 jobs and have a $13.6 billion impact nationwide within the first three years. By 2025, the industry would create more than 100,000 jobs and pump $82 billion into the U.S. economy. Each year of delay costs the economy $10 billion, the study author said. Ohio would gain $14.6 million in taxes and the nation as a whole $482 million by the middle of next decade.

AUVSI is the “largest non-profit organization devoted exclusively to advancing the unmanned systems and robotics community,” according to its website.

Two hot spots will make up 90 percent of the market: The use of UAVs in agriculture and in public safety, the AUVSI report said. The UAV market in “precision agriculture,” where farmers use UAVs to monitor crops, or spray pesticides, or other uses, was expected to reach $75 billion by 2025, or more than 10 times larger than public safety agencies, the report said.

Ohio didn’t rank in the top 10 states for expected economic gains, but study author Daryl Jenkins, an aviation industry economist, said in a conference call Tuesday UAV test site selection along with business climate and regulations could have a significant role on where jobs and industry grow.

The Dayton Development Coalition has not estimated how many jobs might be created in the Dayton region, McDonald said. But growth has already happened or is expected. Defense Research Associates in Beavercreek expects to double in size to more than 100 workers by 2016 under a military contract to develop UAV sense and avoidance technology, said company president and CEO Roy Anderson.

Phillip Finnegan, director of corporate analysis at the aerospace consultant firm Teal Group in Fairfax, Va., said the AUVSI report was “quite modest” in its market forecast, but he said it’s difficult to predict how quickly UAVs will be allowed to fly in civilian airspace and under what conditions.

“It’s likely to be a slow process obviously because of concerns about safety and there’s a lot of extraneous factors entering into it beyond safety,” he said. “The whole privacy debate may affect how UAVs are integrated into the airspace and under what conditions.

The FAA had suspended indefinitely selection of UAV test sites until privacy concerns were addressed, but backtracked when members of Congress said the agency’s role was to safely integrate unmanned aircraft into civilian airspace while other agencies addressed privacy issues.

For now, Finnegan said military sales will continue to outpace the civilian market.

“The military is the dominant segment of the market now and it’s going to be the dominant market for years,” he said.

The Dayton-Springfield region has strong points to build a UAV industry, officials say. Wright-Patterson Air Force Base has a major UAV research and development program, for example, and Sinclair Community College offers training on the use of UAVs.

“There’s a lot that we need to fill out, but we have the basic infrastructure to start,” said Kerry D. Taylor, director of the Ohio Aerospace Hub in Dayton.

In Springfield, SelectTech GeoSpatial produces the airframe for a commercial unmanned aircraft called Vireo.

Designed and sold by UTC Aerospace Systems, a unit of the corporation that manufactures Sikorsky helicopters and Pratt & Whitney jet engines, Vireo is being pitched to law enforcement agencies, first responders and agriculture producers. Weighing about three pounds, it can be launched by hand and can stay airborne for an hour with a payload of electro-optical and infra-red sensors.

SelectTech GeoSpatial, whose Advanced Manufacturing Facility is located within a renovated, 17,000-square-foot hangar at the Springfield-Beckley Municipal Airport, has so far made 10 Vireo prototypes, Executive Director Frank Beafore said.

“I do believe we’re going to see the benefits of having robotic aircraft performing jobs we can’t do,” Beafore said.


Defense leaders: Region ready for future BRAC round

Dayton Daily News

Posted: 1:15 p.m. Tuesday, March 12, 2013

By Thomas Gnau


Beavercreek —

Wright-Patterson Air Force Base has the capacity to welcome new organizations and jobs should a new round of military base closures happen in the next few years, the base commander said Tuesday.

In fact, the base regularly takes calls from military units looking for space, said Col. Cassie Barlow, commander of the 88th Air Base Wing, an organization which acts as landlord of the base, which with more than 29,000 employees is Ohio’s largest single-site employer.

“They say, ‘Hey, do you have space?’ Our answer is ‘Yes,’” Barlow said.

In a panel discussion hosted by the the NAIOP (National Association for Industrial and Office Parks) Dayton Area Chapter at Pentagon Centre, Barlow said two flying units will move to Wright-Patterson this summer while runway repairs are performed at other bases.

But later in the day, a base spokesman said federal budget cuts have altered those plans. Today, it’s not known if the units — the 434th Air Refueling Wing from Grissom Air Reserve Base, Indiana, and the 180th Fighter Wing, Toledo Express Airport in Swanton, Ohio — will move to Wright-Patterson.

“It’s real fluid right now,” said Ted Theopolos, a base spokesman.

Barlow also reminded listeners that the base benefited in the 2005 BRAC (Base Realignment and Closure) round with the relocation of six missions and about 1,200 jobs from five U.S. locations.

Joe Zeis, chief strategic officer and executive vice president with the Dayton Development Coalition, expects a new BRAC round, perhaps in 2015-2017. Wright-Patterson did well in the 2005 BRAC, which helps position it for future moves, he said.

“I think the region is teed up extremely well as a receptor base, rather than as a giver base,” Zeis said. “Take a look at Wright-Patterson. Follow the trail of consolidations that have occurred since BRAC 2005.”

The coalition has hired three contractors to help take advantage of future BRAC rounds, said Jeff Hoagland, coalition chief executive.

“In 2005, we were more in a reactive mode,” Hoagland said. “The BRAC announcements came out, and then we reacted.”

This time, he said: “We’re in a proactive mode.”

Dennis Andersh, SAIC Dayton region executive, said the company moved offices to the Dayton area because of the 2005 BRAC. He said much also depends on a Federal Aviation Administration decision on possibly locating a UAV (unmanned aerial vehicle) test site in the region.

“There are a lot of new companies interested in moving to Dayton and opening offices here,” Andersh said.

Speakers also addressed the impact of automatic federal budget cuts. Called “sequestration,” the cuts amount to a 20 percent cut — and far higher in some cases, up to 75 percent — for the base and affected employees, Barlow said.

“‘Devastating’ is the word,” she said.

Andersh said SAIC “saw this coming” for some time. The company has pulled back on overhead spending, travel and local hiring, he said. “It’s a pretty significant impact,” he said.

In his own remarks, U.S. Rep. Mike Turner, R-Dayton, said defense represents less than 18 percent of overall federal spending, yet is bearing 50 percent of the sequestration burden.

“It is going to be devastating,” Turner said. “And the mechanism by which it was put together in its indiscriminate effect will have a devastating effect on our national security and our spending.”


Defense Dept.: Furloughs could begin in late April


13,000 at Wright-Patt facing 22-day unpaid leave.

Dayton Daily News

By Barrie Barber

Staff Writer



Unless Congress takes action to avoid Department of Defense furloughs, most civilian employees — likely including thousands at Wright-Patterson — will begin to take mandatory unpaid time off work beginning April 26, according to Pentagon officials.

At Wright-Patterson, 13,000 Air Force civilian employees face the prospect of 22-day furloughs, expected to be one day a week through September. Fewer than 100 civilian base employees are expected to be exempt from the mandatory time off.

“We’re really going to feel it, and it’s just really regrettable,” said Army Lt. Col. Elizabeth Robbins, a Pentagon spokeswoman.

The Air Force Materiel Command, which is headquartered at Wright-Patt, anticipates furlough notices could go out around March 21 once an agreement is reached with the American Federation of Government Employees union, said AFMC spokesman Ron Fry.The furloughs would begin 30 days after the notices are sent.

“We have had positive, productive meetings with AFGE over the past several days,” Fry said in an email Tuesday. “Negotiations continue and we are confident an agreement is near.”

Troy Tingey, AFGE Council 214 president, said in a phone interview from Hill Air Force Base in Utah the union hopes to have a memorandum of agreement by the end of this week on how the furloughs will be handled. He said AFGE has asked the materiel command to send the notices no later than March 22 to give workers time to deal with the expected 20 percent loss in income during the time the furloughs are in place.

The Pentagon has estimated the furlough of 26,000 Department of Defense employees in Ohio will mean about $167 million in lost wages.

Once employees receive a furlough notice, they will have a week to appeal under the Merit Systems Protection Board.

Some in the Pentagon have expressed hope that furloughs can be avoided if Congress stops the sequestration and gives the defense department more flexibility on what to cut.

Tingey said employees have asked about the chances for avoiding time off the job. “We just tell them, look, you keep the pressure on your congressional (representative),” he said. “We believe it’s working.”


Washington Post

F-35′s ability to evade budget cuts illustrates challenge of paring defense spending

Washington Post

By Rajiv Chandrasekaran, Published: March 9

At EGLIN AIR FORCE BASE, Fla. — With an ear-ringing roar, the matte-gray fighter jet streaked down Runway 12 and sliced into a cloudless afternoon sky over the Florida Panhandle. To those watching on the ground, the sleek, bat-winged fuselage soon shrank into a speck, and then nothing at all, as Marine Capt. Brendan Walsh arced northward in America’s newest warplane, the F-35 Lightning II.

The F-35 has features that make pilots drool. It is shaped to avoid detection by enemy radar. It can accelerate to supersonic speeds. One model can take off and land vertically. Onboard electronic sensors and computers provide a 360-degree view of the battlefield on flat-panel screens, allowing pilots to quickly identify targets and threats.

But its greatest strength has nothing to do with those attributes. The Defense Department and Lockheed Martin, the giant contractor hired to design and build the plane, also known as the Joint Strike Fighter, have constructed what amounts to a budgetary force field around the nearly $400 billion program.

Although it is the costliest weapons system in U.S. history and the single most expensive item in the 2013 Pentagon budget, it will face only a glancing blow from the sequester this year. And as the White House and Congress contemplate future budgets, those pushing for additional cuts may find it difficult to trim more than a fraction of the Pentagon’s proposed fleet, even though the program is years behind schedule and 70 percent over its initial price tag.

The reasons for the F-35′s relative immunity are a stark illustration of why it is so difficult to cut the country’s defense spending. Lockheed Martin has spread the work across 45 states — critics call it “political engineering” — which in turn has generated broad bipartisan support on Capitol Hill. Any reduction in the planned U.S. purchase risks antagonizing the eight other nations that have committed to buying the aircraft by increasing their per-plane costs. And senior military leaders warn that the stealthy, technologically sophisticated F-35 is essential to confront Iran, China and other potential adversaries that may employ advanced anti-aircraft defenses.

The biggest barrier to cutting the F-35 program, however, is rooted in the way in which it was developed: The fighter jet is being mass-produced and placed in the hands of military aviators such as Walsh, who are not test pilots, while the aircraft remains a work in progress. Millions more lines of software code have to be written, vital parts need to be redesigned, and the plane has yet to complete 80 percent of its required flight tests. By the time all that is finished — in 2017, by the Pentagon’s estimates — it will be too late to pull the plug. The military will own 365 of them.

By then, “we’re already pregnant,” said Air Force Lt. Gen. Christopher Bogdan, who oversees F-35 development for the Pentagon.

When the F-35 finishes testing, “there will be no yes-or-no, up-or-down decision point,” said Pierre Sprey, who was a chief architect of the Air Force’s F-16 Fighting Falcon. “That’s totally deliberate. It was all in the name of ensuring it couldn’t be canceled.”

The Pentagon has long permitted equipment to be produced while it is still being tested, with the intent of getting cutting-edge gear to warriors more quickly, but senior military officials said the F-35 takes the approach to new extremes. Doing so has served as more than a hedge against cuts — it has also driven up the overall price. The 65 aircraft that already have been built, and those that will be assembled over the next few years, will require substantial retrofits that could cost as much as $4 billion as problems are uncovered during testing, the officials said.

Initial tests already have yielded serious problems that are forcing significant engineering modifications. The entire fleet was grounded earlier this year because of a crack in the fan blade in one jet’s engine. The Marine Corps’ version has been prohibited from its signature maneuver — taking off and landing vertically — because of a design flaw. And the Navy model has not been able to land on an aircraft carrier because its tailhook, an essential feature to alight aboard a ship, needs to be redesigned. The Pentagon’s top weapons tester issued a scathing report on the F-35 this year that questioned the plane’s reliability and warned of a “lack of maturity” in performance.

When the F-35 program was first approved by the Pentagon, Lockheed Martin said it could develop and manufacture 2,852 planes for $233 billion. The Pentagon now estimates the total price tag at $397.1 billion. And that is for 409 fewer planes.

The overall program is almost four times more costly than any other weapons system under development. Taxpayers have already spent $84 billion on the plane’s design and initial production. By contrast, the production of 18,000 B-24 bombers during World War II cost less than $60 billion, in inflation-adjusted dollars.

To the plane’s backers, including senior leaders of the Air Force and Marine Corps, the benefit is worth the cost. Unlike the infantry, which still accepts battlefield casualties as part of war, military aviators have grown accustomed to a different risk calculus since the 1991 Persian Gulf War, when U.S. warplanes quickly established air superiority over Iraq with minimal losses: They want to ensure that, whatever the future conflict, their planes are packed with enough offensive and defensive measures to accomplish the mission and avoid getting shot down.

“This aircraft reinforces the way Americans go to war. . . .We don’t want to win 51-49. We want to win 99 to nothing,” said Lt. Gen. Frank Gornec, the assistant vice chief of staff of the Air Force. He said he is convinced the F-35 “will become a superstar in the arsenal of the United States.”

Many independent defense analysts do not share that conviction. To them, the plane’s political engineering and buy-before-you-fly procurement mask deep problems with performance and affordability.

“It was a bait-and-switch operation; we were overpromised benefits and under-promised costs,” said Chuck Spinney, a former Pentagon analyst who gained widespread attention in the 1980s for issuing pointed warnings about the military’s pursuit of unaffordable weapons. “But by the time you realize the numbers don’t add up, you can’t get out of the program.”

A turbulent takeoff

The F-35 program, which commenced 12 years ago, was intended to be a model of how to build a modern fighter. The same airframe would be used to produce planes for the Air Force, Navy and Marine Corps, with only modest modifications to address service-specific needs, hence the name Joint Strike Fighter. The commonality, proponents argued, would allow the three services to mount more coordinated wartime missions, and, perhaps more important, it would drive down development, assembly and maintenance costs.

That was essential because the Pentagon needs a lot of F-35s. It is supposed to replace thousands of legacy aircraft including the F-16, a workhorse of the Air Force fleet, and every fighter jet owned by the Marine Corps. The F-35 was pitched as the answer because it was supposed to be affordable — in the relative terms of fighter jets — and could be acquired in larger quantities than the F-22 Raptor, the Air Force’s new high-performance fighter.

Pentagon officials accepted Lockheed’s claim that computer simulations would be able to identify design problems, minimizing the need to make changes once the plane actually took to the sky. That, in turn, led to an aggressive plan to build and test the aircraft simultaneously.

Cautioning that all of those assumptions were flawed, Spinney and other defense analysts urged the Pentagon to see the plane in flight before committing to buy it. But senior Defense Department officials in the George W. Bush administration did not heed the warnings.

Within months, the program began veering off course.

The Air Force, Marines and Navy all sought additional modifications to meet their needs, reducing commonality among the three models. A bigger problem was the fundamental concept of building one plane, with stealth technology, that could fly as far and fast as the Air Force wanted while also being able to land on the Navy’s carriers and take off vertically from Marine amphibious assault ships.

Instead of meeting the original plan of being about 70 percent similar, the three versions now are 70 percent distinct, which has increased costs by tens of billions and led to years-long delays. “We have three airplane programs running in parallel,” Bogdan said. “They are very, very different airplanes.”

Even with three variants, the plane’s design has forced serious compromises. To remain stealthy, bombs and missiles must be placed inside a weapons bay, which limits the volume of munitions that can be carried. The use of a single engine, required for the Marine version, restricts speed.

With an even more complex engineering challenge than initially envisioned, Lockheed and the Pentagon took a hands-off approach to managing the program, according to several people involved in the process.

An electrical engineer who worked as a manager at Lockheed’s F-35 program headquarters in Fort Worth beginning in 2001 said the development effort was beset with “tremendous organizational inadequacies” and “schedule and cost expectations that never were achievable.” In his unit, he said, there were no firm development timetables and no budgets. “It was all on autopilot,” he said. “It was doomed from the beginning.”

In 2005, the engineer, who spoke on the condition of anonymity because of concerns he will risk job opportunities in the close-knit aviation industry, participated in a two-week-long assessment of the program.”There were reds and yellows across the board,” he recalled. But when he briefed his superiors, “nobody was interested,” he said. And when he gave a copy of the assessment to those at the Pentagon office responsible for the plane, he said, “they didn’t want to hear it.”

A senior Defense Department official acknowledged the office “didn’t have the capacity or the understanding to manage such a complicated program” at the time. Lockheed executives also make little excuse for those years. “It was a very different program from what we are executing today,” said Steve O’Bryan, Lockheed’s vice president of F-35 business development.

With wars raging in Iraq and Afghanistan, and military budgets growing year over year, Defense Secretary Donald H. Rumsfeld paid little attention to the program. His successor, Robert M. Gates, took the same approach during his first few years on the job. In 2007, the Defense Department permitted Lockheed to begin producing the fighter — before the first flight tests had even begun. Frank Kendall, who is now the Pentagon’s chief weapons buyer, has called that decision “acquisition malpractice.”

Early tests uncovered flaws unnoticed by the computer simulations. Key engineering tasks, including the vertical takeoff and landing system, were taking much longer to complete. All the while, costs were rising at supersonic speeds.

In 2009, Gates grasped the dysfunction. The following year, he withheld $614 million in fees from Lockheed, fired the two-star Marine general in charge of the program and brought in a Navy vice admiral, David Venlet, to clean house. In 2011, Gates placed the Marine plane on probation, warning that it would be killed if problems with its propulsion system were not fixed quickly.

Bogdan, who served as Venlet’s deputy until December, when he took charge of the development effort, was astounded by what he found when he delved into the program.

“It was an unimaginable mess,” he said.

Taking countermeasures

An imposing former test pilot who wears an olive flight suit to his office in Crystal City, Bogdan spent his first two years on the job analyzing virtually every aspect of how the plane is designed and built. He and Venlet adjusted schedules and assumptions, and they implemented changes that brought the Marine version off probation. New goals call for aggressive testing and modifications over the next five years, and the start of full-rate production by 2018.

Bogdan thinks the program cannot afford another do-over. “There is no more money and there is no more time,” he said.

To stay on track, he has adopted a get-tough approach with Lockheed and Pratt & Whitney, the contractor building the plane’s engine. Instead of allowing Lockheed to manage the development of millions of lines of software code for the plane — one of the most vexing technical challenges — his office, which has now grown to 2,000 people, is taking charge. “We have forced discipline on them,” he said of Lockheed.

Until recently, he said, Lockheed’s software developers worked at computers that were not connected to each other. “I couldn’t believe it,” he said. Changes imposed by his office have reduced software revision cycles from 27 days to three.

Although enormous technical hurdles remain — designing the tailhook on the Navy’s model, for instance, and writing software to instantaneously fuse reams of data from the plane’s electronic sensors — Bogdan said none of that keeps him up at night. His nightmares are all about the cost: what it costs to design and build the plane, but also what it will cost to operate it over the next 50 years.

He has pushed Lockheed to pay for all cost overruns — in the past, the government picked up the tab — and he has insisted that the company share in the expense of modifications to planes that are being built during the testing phase.

“What I see Lockheed Martin and Pratt & Whitney doing today is behaving as if they are getting ready to sell me the very last F-35 and the very last engine and are trying to squeeze every nickel of that last F-35 and that last engine,” Bogdan said earlier this month during a visit to Australia, which plans to buy 100 F-35s. “I want them both to start behaving like they want to be around for 40 years. I want them to take on some of the risk of this program. I want them to invest in cost reductions. I want them to do the things that will build a better relationship. I’m not getting all that love yet.”

Lockheed and Pratt executives insist they are trying to drive down expenses and increase reliability. “We’ve made enormous progress over the past few years,” said Lockheed’s O’Bryan. “When the professionals look at the facts and they talk to the pilots, they see a program that is accelerating with costs that are rapidly decreasing.”

O’Bryan said Lockheed and its suppliers are “committed to working in close partnership” with Bogdan’s office.

For Bogdan, an even bigger challenge involves the cost of flying and maintaining the F-35. The Pentagon estimates it could reach as much as $1.1 trillion over the life of the plane. Although unknown variables such as the cost of fuel could drive that figure down, Bogdan said the jet has serious sustainability problems. Chief among them are a greater need for maintenance and replacement parts than projected. “If we don’t do things now to change the game, this airplane will be unaffordable to fly,” he said.

He is pushing suppliers to make parts more reliable, and he has put Lockheed and Pratt & Whitney on notice that they should not assume they will be selected to fill the operations and maintenance contracts, which could be worth as much as $500 billion. He wants other firms to compete for parts of the work, reasoning that it will bring down costs.

To reinforce his seriousness, he has told Lockheed and Pratt not to wait him out. Unlike other senior officers, who change assignments ever few years, he intends to stay for 10 years. “The only way I’m leaving this program,” he said in the interview, “is if I’m fired.”

A dogfight no one wants

But Bogdan’s leverage is limited. Behind his feisty language lies an inescapable reality: The services don’t want to shrink their orders, and Congress doesn’t want to clip the F-35′s wings.

For many legislators, the F-35 is as much about employment as it is about air superiority. Lockheed has repeatedly emphasized to legislators, particularly those who sit on appropriations committees, that the plane supports 133,000 jobs, many of them at 1,300 subcontractors and parts suppliers spread across 45 states. When full-rate production begins, likely in 2018, the company says the employment figure will grow to 260,000.

A Web site established by Lockheed for the plane provides a sample letter for constituents to send to lawmakers. “The F-35 program is a win-win proposition for our national security and our nation’s declining manufacturing base,” the letter states.

Despite the lobbying, a few members have spoken out. One of them was Sen. John McCain (R-Ariz.), a former Navy pilot. In December 2011, he took to the floor of the Senate to lambaste the development effort. “In a nutshell, the JSF program has been both a scandal and a tragedy,” he said.

The following November, the Marines established their first F-35 squadron in Yuma, Ariz. They invited McCain to the inauguration ceremony.

“I am — after many years of frustration and setbacks — encouraged that the overall program is moving in the right direction,” McCain said at the event. He said the program was on track “to produce more achievable and predictable outcomes.”

For the generals who lead the Marines, the F-35 is a must-win fight. There is no alternative fighter readily available to replace the service’s current jets, which will soon become too obsolete to fly.

“It’s essential for us,” said Lt. Gen. Robert Schmidle, the Corps’ deputy commandant for aviation. “We don’t have another option.”

Thus far, there has been little discussion within the Pentagon or on Capitol Hill about whether the Marines, which are organized to travel by sea and fight small wars, require such a sophisticated aircraft. Compared with the Air Force and Navy versions, the Marine variant has the most engineering challenges and the largest price tag. But the Marines, the smallest service, have long wielded disproportionate influence on the Hill and in the Pentagon.

“Nobody wants to say no to the Marines,” a senior Army officer said on the condition of anonymity to speak candidly about the program. “Nobody around here is asking the fundamental question: Why does the Navy’s army need its own air force?”

Avoiding a death spiral

The Pentagon’s latest five-year budget plan, released last year, calls for a smaller volume of annual purchases to save money. Sequestration-related cuts this year also will defer a few more planes. But the overall purchase of 2,443 jets remains unchanged.

Though the F-35 is rarely mentioned by those seeking to rein in federal spending on Capitol Hill, sotto voce discussions are beginning within the walls of the Pentagon. Some senior officers, even those who are enamored of the plane, worry that footing the $400 billion tab in an era of declining defense budgets will require too many other sacrifices and trade-offs.

“This aircraft does everything better than anything ever flown,” a three-star general said on the condition of anonymity. “But how many can we afford? How many of them do we really need?”

Although Air Force and Marine leaders have held fast, an unofficial reexamination is occurring within the Navy, which is not as desperate for the F-35 because it possesses a relatively new fleet of F/A-18 Super Hornets. While toeing a public line of support for the F-35, some Navy experts are looking at whether it makes sense to reduce its planned order and plow some of the savings into high-speed drones that can operate off aircraft carriers, according to senior military officials.

Should that occur, or should Defense Secretary Chuck Hagel decide to shrink the overall purchase, it could prompt howls from key U.S. allies, including Britain, Italy and Norway, which all have contributed to the development of the aircraft. Their purchase price has been based on a U.S. order of about 2,500 jets. If that number drops, the per-plane cost will rise for the allies, possibly leading them to buy fewer then planned.

For some of them, cost increases and delays over the past decade have been significant enough to prompt a reexamination. Australia is deciding whether to halve its 100-plane order and Canada is reconsidering its plan to buy 65.

A smaller total purchase, of course, further increases unit costs for the United States, which likely would increase pressure to cut more. Procurement officers have a term for the phenomenon, borrowed from the world of aviation: a death spiral.

That’s what happened to the Air Force’s F-22. The original plan, set in 1991, was to buy 750 of them for $132 million apiece. Increased development costs and budget cuts in the 1990s sent that program into a tailspin. The Air Force eventually wound up with just 187 — at a cost of $422 million per plane.

That is why Bogdan is pressing Lockheed so aggressively to reduce costs. He knows the F-35 — despite the jobs it fuels, regardless of the needs of the Marines and Air Force — is a giant, unstealthy presence in the federal budget.

His best defense against cuts, he figures, involves showing that the long-troubled program can finally meet its targets — and that more reductions will just mean more-expensive aircraft.

“We have to understand there are trade-offs every time we cut spending on the F-35,” he said. “And none of them are very good.”


Cyber-attacks a bigger threat than Al Qaeda, officials say

Top intelligence officials say the foreign assaults are growing. They also sound an alarm about North Korea.

LA Times

By Ken Dilanian, Los Angeles Times

March 12, 2013, 6:31 p.m.


WASHINGTON — Cyber-attacks and cyber-espionage pose a greater potential danger to U.S. national security than Al Qaeda and other militants that have dominated America’s global focus since Sept. 11, 2001, the nation’s top intelligence officials said Tuesday.

For the first time, the growing risk of computer-launched foreign assaults on U.S. infrastructure, including the power grid, transportation hubs and financial networks, was ranked higher in the U.S. intelligence community’s annual review of worldwide threats than worries about terrorism, transnational organized crime and proliferation of weapons of mass destruction.

The startling reappraisal came a day after President Obama’s national security advisor, Thomas Donilon, complained of “cyber-intrusions emanating from China on an unprecedented scale” and said China-based digital attacks on U.S. businesses and institutions had become “a key point of concern” for the White House.

“The international community cannot afford to tolerate such activity from any country,” he said in a speech at the Asia Society in New York. He urged Beijing to “take serious steps to investigate and put a stop to these activities.”

Appearing Tuesday before the Senate Intelligence Committee, James R. Clapper, director of national intelligence, said Russia and China are unlikely to launch a devastating cyber-attack against the United States outside a military conflict or crisis that they believe threatens their vital interests.

But according to Clapper’s written statement, computer hackers or organized groups “could access some poorly protected U.S. networks that control core functions, such as power generation” although their ability to cause “high-impact, systemic disruptions will probably be limited.”

“It’s hard to overemphasize [cyber's] significance,” Clapper told the committee.

Clapper testified alongside CIA Director John Brennan; FBI Director Robert S. Mueller III; Army Lt. Gen. Michael T. Flynn, who heads the Pentagon’s Defense Intelligence Agency; Matthew Olsen, who heads the National Counterterrorism Center; and Philip Goldberg, who heads the State Department’s Bureau of Intelligence and Research.

The downgrading of the terrorist threat came with notable qualifiers. As was clear in the September lethal attack on U.S. diplomatic and intelligence compounds in Benghazi, Libya, Al Qaeda’s affiliates and sympathizers in the Middle East and North Africa still seek to harm U.S. interests.

Officials warned that despite setbacks, Al Qaeda in the Arabian Peninsula, the affiliate based in Yemen, aims to carry out attacks on U.S. soil and it “continues to adjust its tactics, techniques and procedures for targeting the West.”

But aggressive counter-terrorist operations, including using drone-launched missiles to kill individuals and small groups in northwestern Pakistan, “have degraded core Al Qaeda to a point that the group is probably unable to carry out complex, large-scale attacks in the West,” Clapper said.

Al Qaeda and its affiliates played little or no role in the popular uprisings across the Middle East and North Africa in 2011. But the fragile new governments in Egypt, Yemen and Libya, and continuing unrest in Syria and Mali, “have offered opportunities” for what Clapper called “unpredictable” attacks by established or aspiring terrorist groups on U.S. facilities and allies.

In response, Sen. Dianne Feinstein (D-Calif.), the committee chair, said “the terrorist threat has receded” because of a broad array of U.S. efforts. She said they include criminal prosecutions, noting that 438 people were convicted of terrorism-related charges in American courts from 2001 to 2010.

In a separate hearing before the Senate Armed Services Committee, Gen. Keith Alexander, who heads the Pentagon’s new U.S. Cyber Command, which conducts military operations, as well as the National Security Agency, which carries out digital espionage overseas, said the number of attacks is growing.

“It’s getting worse,” he said, citing more than 140 attacks on Wall Street over the last six months. And in August, he said, a computer intrusion at Saudi Aramco, the Saudi Arabian national oil and gas company, destroyed data on more than 30,000 computers.

Outside experts blamed Iran for both sets of assaults, and Alexander was asked whether the Obama administration had considered retaliation.

“I think this gets to the heart of … when does the Defense Department step in to defend the country?” Alexander replied, saying he could not address specifics. Defense experts have struggled to define precisely when and how U.S. military or covert action should be taken to prevent a potential cyber-attack, especially when many appear all but impossible to trace.

On other fronts, Clapper warned that congressionally mandated budget cuts under the so-called sequester would create numerous problems for intelligence collection and analysis. The overall budget for the 16 U.S. intelligence agencies has grown sharply over the last decade and now is about $75 billion.

“We’ll reduce human, technical and counterintelligence operations, resulting in fewer collection opportunities while increasing a risk of strategic surprise,” he said.

The intelligence assessments of most danger zones around the globe changed little from last year.

Iran continues to enrich uranium and is moving closer to being capable of constructing a nuclear weapon, but it has not decided to build one, according to Clapper’s statement. Tehran has “the scientific, technical and industrial capacity to eventually produce nuclear weapons. This makes the central issue its political will to do so,” Clapper said.

Iran probably cannot divert weapons-grade fissile material without being discovered by United Nations inspectors, who make regular visits to Iran’s nuclear facilities, and Western intelligence agencies. Intelligence analysts believe Iran’s leaders are “guided by a cost-benefit approach” that still allows for a diplomatic solution to the standoff with the West.

Clapper stepped up his warnings on North Korea, however. In recent months, leader Kim Jong Un’s regime has successfully conducted an underground nuclear test, displayed what appeared to be a mobile intercontinental ballistic missile and placed a small satellite in orbit.

Clapper said North Korea’s nuclear weapons and missile programs “pose a serious threat to the United States” as well as its East Asian neighbors. The regime’s efforts to develop long-range missile technology, he said, “could pose a direct threat” to America and its allies.


USDA suspends some ag reports due to budget cuts


Associated Press

Mar 13, 9:14 PM EDT


MADISON, Wis. (AP) — The U.S. Department of Agriculture’s statistical arm said it won’t issue some agricultural reports this year because of automatic federal budget cuts, alarming some in the dairy industry who fear the information void could wreak havoc with milk prices.

The National Agricultural Statistics Service keeps tabs on a wide range of agricultural industries that generate billions of dollars for the U.S. economy. Its reports influence the price and supply of many products that end up on American dinner plates. Farmers use them to decide how much to produce, and food processors and traders look to them to determine when to buy and sell.

The agency posted a notice on its website Tuesday saying it would suspend multiple reports covering at least 10 agricultural products ranging from milk and chickpeas to cattle and catfish because of $85 billion in across-the-board federal spending cuts went into effect earlier this month. The notice offered almost no details about the rationale for the decision, saying only that it “was not made lightly, but it was nevertheless necessary, given the funding situation.”

The budget cuts cost NASS’ agricultural estimates program $5.9 million, agency officials said.

Perhaps the highest profile reports on the chopping block are the agency’s milk production estimates, which are used to set prices. The agency will issue its February estimate on Tuesday and then suspend its next six monthly reports, along with the annual milk production report that had been expected in April, according to the National Milk Producers Federation.

“This is a big deal,” NMPF spokesman Chris Galen said Wednesday. “This is going to affect how decisions are made in marketing of milk and other dairy products. If you don’t have a national estimation of what your supply is, then it’s a lot harder to figure out where prices are going to go.”


Galen said he’s not aware of any other entities that produce the data dairy farmers need. His organization plans to send a letter to NASS officials seeking a better explanation and justification for eliminating those reports.

NASS spokeswoman Stephanie Chan declined comment.

NASS also canceled its July cattle report, which it has produced since 1973. Cattlemen said that would have less impact than some other cuts, such as furloughing meat inspectors. Ranchers sometimes use the July report to adjust their marketing plans, and it can be a tool for those running feedlots, where cattle go for final fattening before slaughter, said Joe Parker, president of the Texas and Southwestern Cattle Raisers Association. But a January inventory report, which gives a state-by-state breakdown, is more helpful.

“The industry gets a better idea of the inventory location and the movement of that inventory,” he said. “We sure would like to keep (the July report) but we should be able to adjust without it.”

Other reports that won’t come out this year include those on catfish, potatoes, lentils, rice, nuts and some fruit and vegetables.

USDA officials announced in 2011 that they planned to eliminate 14 crop and livestock reports to save $10 million. Farmers complained they would be left guessing how much to produce and when to sell. The agency reversed itself two months later, saying operational improvements had helped free up money to reinstate the reports.


Initial Tests of Battery by Boeing Fell Short

NY Times


Published: March 13, 2013

In an age of sophisticated computer modeling, Boeing engineers relied on the same test used for tiny cellphone batteries to gather data about the safety of the heftier lithium-ion battery on its new 787 jets: they drove a nail into it to see what happened.

The burned Boeing 787 battery in a CT scan. Boeing grossly underestimated the amount of usage that would risk a fire.

Prof. Donald Sadoway of M.I.T. said more extensive tests of the 787 battery were needed this time.

As the nail pierced one of the eight cells, it accomplished its goal of setting off a short circuit. But only smoke, not fire, belched from the battery.

But the test and other evaluations that Boeing conducted while the plane was in development proved to be far off the mark in predicting what would happen when the plane was in use and led Boeing to severely underestimate the likelihood of a fire in the 63-pound battery.

Now, as Boeing tries to recover from a battery fire on one of the jets and a smoke incident on another that led to a worldwide grounding of the 787s in January, federal officials say it is crucial that the company collect better data this time from its laboratory and flight tests. That is particularly important, they said, since the cause of the jet’s battery problems is still unknown.

Boeing won approval on Tuesday from the Federal Aviation Administration to begin an extensive array of 20 types of tests to determine if its proposed new battery protection system works.

“It is clear from what happened in January that there are other ways for the batteries to catch fire that clearly weren’t captured by the nail test,” said Donald R. Sadoway, a materials chemistry professor at M.I.T.

He said the test — it is standard in testing lithium-ion batteries in cellphones, laptops and electric cars — measures just one kind of failure mode and represents an extreme short circuit of the battery in a very short period of time.

“It can work on a cellphone battery with a single cell, but you’re talking about a very different configuration here,” he added.

A preliminary report on the fire that occurred in a plane parked at Logan Airport in Boston on Jan. 7, released last week by the National Transportation Safety Board, provided new details of Boeing’s initial battery testing, including its reliance on the nail test for some of the basic data on the odds of incidents with smoke and fire.

The board’s report said that Boeing also gathered information from companies using the lithium-ion batteries in other industries and, based on that and the test data, it calculated that the odds of smoke being emitted from a battery was only one in 10 million flight hours.


Given that Boeing has never made its own batteries, it assigned other crucial tests to its subcontractors, including GS Yuasa, the Japanese battery maker, and Thales, a French company that oversees the battery charging system.

The F.A.A. also delegated much of the testing to Boeing, except for a safety assessment conducted once the plane’s electrical power system was certified. The F.A.A.’s decision to delegate some of its certification authority was done under a decades-old program meant to help the agency keep up with fast-changing technology but also to fill a gap in its own expertise.

In the course of the original testing, the batteries were also subjected to other kinds of destructive tests, including provoking an external short circuit, overcharging the batteries for 25 hours, subjecting them to high temperatures of 185 degrees Fahrenheit for an extended period, and discharging them completely. Boeing found that none of these tests in its computer modeling resulted in a battery fire, according to the safety board’s report, leading it to conclude that the chance of a battery fire was one in 1 billion flight hours, a negligible probability. In fact, the Boston fire occurred after the entire 787 fleet had flown with passengers for only 52,000 hours.

F.A.A. and Boeing officials said they did the best they could, given what was known about the batteries when the agency approved them for the 787 in October 2007. The innovative plane, which uses lighter-weight composite materials to cut fuel costs by 20 percent, makes more extensive use of the new batteries than any other commercial aircraft, and the F.A.A. imposed a series of special safety conditions to compensate for that risk.

But in March 2008, the R.T.C.A., an advisory group that suggests regulatory measures, released new and more rigorous guidelines for testing lithium-ion batteries — standards that Boeing says it will meet in its new round of testing.

The safety board’s report said that Boeing continued to test its original battery design in 2010. But the company, which was busy dealing with many other problems that had led to multiyear delays in the 787 program, did not change its test plans to follow the R.T.C.A. guidelines. It was not obliged to do so under the law and Boeing officials said they had not run into any problems with the battery in tests anyway.

It is not clear whether the nail test will be included in Boeing’s new testing regimen. In the test, a metallic nail is driven with blunt force by a machine into a battery to provoke a short circuit. The test is supposed to show whether the battery cells are properly insulated from each other. If they are not, this increases the risk of a thermal runaway where one cell overheats, catches fire and the fire cascades to the other battery cells.

But according to a 2011 presentation by the National Renewable Energy Laboratory, a federal research lab, the nail test and other so-called abusive test methods are not representative of the kinds of failures that can happen when the batteries are used in real life. Further, the report found that many of the failures that occurred with lithium-ion batteries in laptops or cellphones originated in an internal short “that was not detectable or predictable” during manufacturing.

Boeing officials said they now have a deeper understanding of what might cause the batteries to fail and how to minimize that possibility. After weeks of engineering work, Boeing has proposed redesigning the batteries to insulate the eight cells from each other to keep a short circuit in one from cascading to the others, as investigators believe happened on the plane parked in Boston.

Boeing plans to enclose the batteries in stainless steel boxes, more resistant to higher temperatures than the earlier aluminum ones. While the original batteries could leak hazardous substances into surrounding bays, Boeing also plans to create tubes made of titanium to vent any overheated air or hazardous gases outside the planes.

Boeing is hoping it can rapidly complete the tests of the new design and get the planes refitted by mid- to late April, though government officials expect a slower timeline. While domestic regulators have approved testing of the redesigned system, Boeing must still convince Japanese regulators and is sending a delegation to Japan to present its technical fix this week.

Ray Conner, the chief executive of Boeing’s commercial plane division, said in a statement on Tuesday that this “permanent resolution” was designed to “significantly minimize the potential for battery failure while ensuring that no battery event affects the continued safe operation of the airplane.”

But safety and battery experts are still questioning whether regulators can approve a permanent fix even when the cause of the fire remains unknown. Boeing has brought in a number of outside battery experts, including some from General Electric and companies like General Motors that make electrical cars, to help it design the new system.

One of the plane’s two batteries provides power to start up the cockpit instruments. The other battery helps provide power when the plane is on the ground.

Boeing officials said the batteries never suffered any serious problem during more than 1 million hours of laboratory and flight testing before the first 787 was delivered in late 2011.

Hans Weber, an aviation consultant, said Boeing’s new effort to eliminate every possible source of a problem “is what I would call brute forcing it, which is what you do when you don’t know what went wrong.” Still, he said, “One of the challenges of new technology is that it takes time to learn the ways a technology can fail. And the only way to learn more is to start using the planes again.”


Reid Says Two-Year Budgeting Cycle Worth Considering

By Niels Lesniewski

Roll Call Staff

March 14, 2013, 3:50 p.m.


Majority Leader Harry Reid, latching on to an idea aimed at easing the yearly pain Congress goes through in setting spending plans, said Thursday that he’s open to exploring a two-year budget cycle.

“This has been something that has been looked at by a lot of people. We have had over the years many people who’ve said that this is probably a good idea,” Reid said. “And if we were ever going to do that, we should take a look at it now because we’re getting back into the appropriations process.”

Sens. Johnny Isakson, R-Ga., and Jeanne Shaheen, D-N.H., introduced a bill this week that would move Congress to a two-year cycle and Rep. Joe Wilson, R-N.C., introduced a similar bill in the House with five GOP co-sponsors.

“Moving from a one-year to a two-year budget process will allow Congress to devote more time and attention to the wasteful programs and policies that need reform,” Wilson said in a statement.

Reid said he was appointed to a group exploring the issue by then-Majority Leader George Mitchell, D-Maine, a group that also included his longtime appropriations colleague Pete V. Domenici, R-N.M. However, Reid said the effort ran into trouble because of opposition from, among others, Sen. Robert C. Byrd, D-W.Va.

“Sen. Byrd was opposed to it, and that made it very difficult and we got nothing done. But it’s something I would really like to take a look at. It’s something we should consider” Reid said.

Several states produce budgets on a two-year cycle.


U.S. National Vulnerability Database Hacked

The central database of vulnerability and related security information, maintained by NIST, remains down due to malware discovered on the site and traced, ironically, to a software vulnerability


By Larry Seltzer, , Darkreading

Mar 14, 2013 | 07:23 AM





The U.S. National Vulnerability Database (NVD) was taken down by its administrators at the National Institute of Standards and Technology last Friday, March 8.

As of this morning, the site shows this message:

Site/Page Not Available

The NIST National Vulnerability Database (NVD) has experienced an issue with its Web Services and is currently not available. We are working to restore service as quickly as possible. We will provide updates as soon as new information is available.


Kim Halavakoski, chief security officer at Crosskey Banking Solutions, broke the news on his Google+ page. After trying to retrieve some data from the site and finding it down, Halavakoski contacted the site administrators and received a note explaining the situation. The salient points:

•On Friday, March 8, a NIST firewall detected suspicious activity and took measures to block traffic related to it.

•The servers on which the activity was detected were taken down.

•Malware was discovered on two NIST Web servers.

•The malware was traced to a software vulnerability.

•There is no evidence the NVD itself spread malware.

•NIST has no further information on when the NVD will be back up.

The note was signed by Gail Porter of the NIST Public Inquiries Office.

In a subsequent post, Halavakoski noted that Netcraft data shows NIST had been running IIS 7.5 for years, but after the breach, it was listed as running Linux and Apache. Netcraft’s “risk rating” for the site is 0/10.


Pay freeze, furloughs might push employees to retire, but stats don’t show it yet

Washington Post

By Joe Davidson, Published: March 14


Take a look at the recent federal retirement figures and you can easily get the impression that feds are fleeing the pay freeze and pending furloughs like members of Congress leaving the Capitol on a Thursday night.

Citing the hardships federal employees will face because of the budgets cuts known as the sequester, Colleen M. Kelley, president of the National Treasury Employees Union (NTEU), said that “many of the most talented and experienced will likely head for the exits.”

In testimony Wednesday to the Senate Homeland Security and Governmental Affairs Committee, she pointed to data showing a recent “large increase in the number of federal workers leaving the workforce, primarily to retire.”

“In February 2013, 20,374 federal employees retired. That is more than three times the number who retired in February 2012. So far, in 2013, 42,561 employees have retired, about 40 percent of the entire total for 2012. A large increase in retirements is especially alarming since approximately 53 percent of the federal workforce will be eligible to retire by next year, and a significant loss of these experienced employees could leave agencies, already stretched thin, in dire circumstances.”


The Office of Personnel Management, however, where Kelley got her data, says the spike was mostly because of U.S. Postal Service personnel taking early retirement. In February, postal retirements accounted for about 73 percent of the total, according to OPM. Postal workers are not subject to the pay freeze and budget cuts affecting government generally, because thePostal Service does not use tax money for operating expenses.

“Based on historical workload trends, we generally see a spike in retirement claims in January after the end of the year, and, typically, that number drops in February,” said OPM spokesman Thomas Richards. “This year, close to 21,000 Postal Service employees accepted early-outs. Of those postal early-outs, approximately 3,000 came into OPM in January and 15,000 came into OPM in February, causing a spike in retirement claims. After working closely with the Postal Service in preparation for the early-outs, we were able to process a record 15,333 retirement claims in February. We expect the remainder of the early-outs to arrive in March and April.”

Curiously, the Postal Service had no comment Thursday. In 2011, however, Postmaster General Patrick R. Donahoe spoke of offering $20,000 incentive payments to encourage early retirements as a way to cut personnel costs.

Kelley is correct when she said that “actual retirements have been higher than OPM projections for nine of the last 14 months.”

And she made a good point when she told the Senate: “The federal employees I represent are frustrated, angry and scared. They have been under a pay freeze for more than two years. They are facing significant pay cuts due to sequestration. They are not sure if they will face yet another potential government shutdown on March 27. And they know the debt ceiling and the possibility of a government default is coming back this summer.

“These employees work really hard and care about their jobs. They know that budgets need to be tight, but as they see the waste that comes from the lack of timely congressional action, the contingency planning and short-term patch-up solutions that cost more in the long term, you shouldn’t be surprised that they think the wrong people are getting their pay cut.”

Kelley was testifying at a hearing about “The Costs and Impacts of Crisis Budgeting,” this herky-jerky way Congress has of going from one stopgap measure to another.

“We have definitely seen an uptick in the numbers of our members who are retiring,” she told the Federal Diary. “I believe it is related to a number of factors: constant attacks by some in Congress and the media, pay freezes, threats of unpaid furlough days, a lack of funding for agencies and resources to get the work done, and fears about potential changes to the retirement system.”

Witness Henry Powell, who retired in January after 20 years with the Internal Revenue Service. The pay freeze, the threat of furloughs and increased retirement contributions “had an awful lot to do with it,” he said. “Me and quite a lot of co-workers discussed this.”

Though Powell, a former NTEU chapter leader in Baltimore, is 70 years old, he said he probably would not have retired as a telephone customer service agent if conditions had been better for feds.

“I honestly don’t think so,” he said in an interview. “I would have continued to work. I enjoyed the job.”

But he fell victim to what Sen. Thomas R. Carper (D-Del.), chairman for the Homeland Security and Government Affairs Committee, called “a way of doing business in Washington that makes it impossible for the federal government as a whole to give taxpayers the results they demand in an effective and affordable manner.”

One result of doing business this way, Carper said, is “degraded federal employee morale.”

Sen. Tom A. Coburn of Oklahoma, the top Republican on the panel, recalled a comment by “Will Rogers, a great Oklahoman [who] once said, ‘I don’t make jokes. I just watch the government and report the facts.’ Only, government dysfunction is no laughing matter. . . . We can and should do better.”

If not, expect more people to adopt the attitude about government work that Powell said many of his colleagues have:

“The hell with it.”

March 9 2013




Obama renews offer to cut social safety nets

By Richard Cowan

WASHINGTON | Mon Mar 4, 2013 1:49am EST


(Reuters) – President Barack Obama raised anew the issue of cutting entitlements such as Medicare and Social Security as a way out of damaging budget cuts, a White House official said on Sunday, as both sides in Washington tried to limit a fiscal crisis that may soon hit millions of Americans.

Signaling he might be ready to explore a compromise to end automatic spending cuts that began late Friday, Obama mentioned reforming these entitlement programs in calls with lawmakers from both parties on Saturday afternoon.

“He’s reaching out to Democrats who understand we have to make serious progress on long-term entitlement reform and Republicans who realize that if we had that type of entitlement reform, they’d be willing to have tax reform that raises revenues to lower the deficit,” White House senior economic official Gene Sperling said on Sunday on the CNN program “State of the Union.”

Republicans have long argued that the only way to tame budget deficits over the long haul is by slowing the cost of sprawling social safety net programs.

These include the Social Security retirement program and Medicare and Medicaid healthcare programs for the elderly, disabled and poor that are becoming more expensive as a large segment of the U.S. population hits retirement age.

While Obama also has proposed some savings on these programs, he has insisted that significant new tax revenues be part of the deficit-reduction formula, an idea Republicans so far reject.

Budget fights in Congress took their most serious turn in years on Friday when $85 billion in indiscriminate spending cuts known as “sequestration” began to kick in after both parties failed to agree on how to stop them.

Democrats predict the automatic cuts could soon cause air-traffic delays, meat shortages as food safety inspections slow down, and hundreds of thousands of furloughs for federal workers.

As the budget battles rage on in Washington, sources said Obama plans to nominate on Monday Sylvia Mathews Burwell to head to White House Office of Management and Budget. A veteran of the Bill Clinton White House, Burwell is president of the Walmart Foundation, which handles the corporation’s charitable efforts.

Neither Sperling nor White House spokesmen would provide further details on Obama’s conversations on Saturday with members of Congress, and they did not identify the lawmakers to whom the president spoke.

Obama’s mention of entitlement reform may help bring Republicans to the table to halt the cuts. Republican leaders also made soothing noises on Sunday about the need to avoid a government shutdown on March 27, when funding runs out for most federal programs.



House of Representatives Speaker John Boehner, interviewed on NBC’s “Meet the Press,” said he “absolutely” would do whatever it takes to keep the government operating. Toward that end, he will seek House passage this week of a “continuing resolution” to fund the government through September 30, when the fiscal year ends.

Lately, some rank-and-file Democrats and Republicans have been sending signals that they are willing to compromise to end a two-year-old deadlock over tax and entitlement reforms.

Last week, conservative Republican Senator Lindsey Graham of South Carolina said he was open to raising $600 billion in new tax revenue if Democrats accepted significant changes to Medicare and Medicaid as part of a long-term budget deal.

A few days later, liberal Democratic Senator Ben Cardin of Maryland told Reuters that he had discussed with Senate Democratic leader Harry Reid the possibility of replacing the automatic spending cuts with a mix of entitlement reforms and tax increases.

“Democrats know we have to do entitlement reforms and Republicans know they have to do revenues (increases),” Cardin said.

Now that they are in place, the $85 billion in spending cuts must be carried out by September 30 if no alternative is found. Half of those cuts would hit the military with the rest scattered over thousands of other domestic programs.

Economists have warned that such a heavy dose of belt tightening over such a short period will slow U.S. economic growth and potentially cost 750,000 jobs.

Speaking of the search for alternatives, Boehner said on “Meet the Press:” “I don’t think anyone quite understands how it gets resolved.”

No matter how Obama and Congress resolve the 2013 battle, this round of automatic spending cuts is only one of a decade’s worth of annual cuts totaling $1.2 trillion mandated by the sequestration law.



Deep divisions between Democrats and Republicans have soured previous negotiations.

Slamming the door on Democrats’ demands for new tax hikes, Boehner said that Obama “got $650 billion of higher taxes on the American people on January the first. How much more does he want?” He was referring to the higher tax rate that began in the new year on households making more than $450,000 a year.

“It’s time for the president and Senate Democrats to get serious about the long-term spending problem that we have,” Boehner said.

In the meantime, both Democrats and Republicans were hoping to win the immediate fight over the automatic spending cuts so that they are best positioned in any upcoming battles over long-term budget deficits.

Senate Republican leader Mitch McConnell on Sunday played down the severity of the automatic cuts, describing them as modest.

“We’re willing to talk to him (Obama) about reconfiguring the same amount of spending reduction over the next six months,” McConnell said on CNN. “The American people look at this and say: ‘Gee, I’ve had to cut my budget more than this,’ – probably on numerous occasions over the last four years because we’ve had such a tepid economy now for four long years.”

At the heart of Washington’s persistent fiscal crises is disagreement over how to slash the budget deficit and gain control of the $16.7 trillion national debt, bloated over the years by wars in Iraq and Afghanistan and government stimulus for the ailing economy.

Government red ink also rose over the last decade after the enactment of across-the-board tax cuts in 2001 and 2003 secured by President George W. Bush.

(Additional reporting by Will Dunham and Philip Barbara; Editing by Alistair Bell, Philip Barbara and Eric Beech)


Despite Sequester, House Panel Proposes DoD Budget Hike

Defense News

March 4, 2013



U.S. House Republicans have unveiled a government-wide 2013 spending measure that would fund the Pentagon in 2012 at a higher level than it requested, despite the so-feared sequester cuts that began on Friday.

The Defense Department appropriations bill is attached to the House GOP leadership’s offering to what will be the next messy political fight in Washington: a struggle over an expiring funding bill that threatens to shut down the federal government.

Over half of the $982 billion continuing resolution (CR) introduced Monday by House Appropriations Committee Chairman Rep. Hal Rogers, R-Ky., would fund DoD for the remainder of fiscal 2013. It proposes $518.1 billion for the Pentagon’s base budget, which would be $2 billion larger than the Obama administration’s request.

All components of the massive continuing resolution have been adjusted to account for the so-called sequestration cuts, which were triggered Friday and are set to reduce projected defense and domestic spending by about $1 trillion over a decade.

For the Afghanistan conflict, the fight against al-Qaida and other overseas contingencies, the House panel proposes $87.2 billion for the remainder of 2013. It also includes a full Department of Veterans Affairs spending bill.

The House passed a 2013 defense appropriations bill last session; the Senate, however, never took up a Pentagon spending bill.

Sources confirmed in recent weeks that staff from the House and Senate Appropriations committees have huddled over the contents of a final DoD appropriations bill. Those talks were spawned late last year when it was a possibility — though a longshot — that congressional leaders might opt for an omnibus appropriations bill to replace the current CR.

That never transpired, but “they got pretty close” to hammering out a compromise version of a 2013 defense appropriations bill, one House GOP source said last month.

“The legislation will avoid a government shutdown on March 27, prioritize DoD and Veterans programs, and allow the Pentagon some leeway to do its best with the funding it has,” Rogers said in a statement “It is clear that this nation is facing some very hard choices, and it’s up to Congress to pave the way for our financial future.” Rogers said.

“But right now, we must act quickly and try to make the most of a difficult situation. This bill will fund essential federal programs and services, help maintain our national security, and take a potential shutdown off the table. This CR package is the right thing to do, and it’s the right time to do it.”


House Armed Services Committee Vice Chairman Rep. Mac Thornberry, R-Texas, told reporters last Friday that the chamber’s DoD appropriations bill would give the Pentagon some needed fiscal maneuverability.

A CR means federal agency leaders largely are unable to fully fund certain programs and accounts, while also lacking the authority to transfer monies among accounts.

Giving DoD an actual appropriations bill would remove those limits, Thornberry said.

The House bill would “add flexibility and update [budget] categories that [would] reduce some of the damage of having a CR and a sequestration at the same time,” he said.

Pentagon and White House officials have warned for months that the sequester cuts would hit military operations and maintenance (O&M) accounts hard. They said the across-the-board 10 percent cut to all non-exempt accounts in fiscal 2013 would cause much planned maintenance and training to be canceled or severely scaled back.

The House CR appears to provide some relief: It calls for $173.5 billion in O&M, which is $1.4 billion below the administration’s request but a $10.4 billion hike over current levels.

On procurement, the bill’s proposed $100.4 billion level would be $4.21 billion below 2012 levels and $1.3 billion smaller than the administration’s request.

For all research and development accounts, the House bill proposes $70 billion. That would be $2.5 billion below last year’s levels but $521 million above the administration’s request.

A committee summary of the bill notes it contains “common-sense decisions to save taxpayer dollars where possible, in areas that will not affect the safety or success of our troops and missions.”

That list includes: “$4 billion in savings from rescissions of unused prior-year funding; $515 million for unjustified Army growth funding; and $500 million for excess inventory of spare parts and secondary items.”

Senate Democratic leaders and Appropriations Committee leaders have yet to announce their plan for moving the upper chamber’s CR.

It remains unclear whether that bill will also feature a full defense appropriations bill.

HASC Chairman Rep. Howard “Buck” McKeon, R-Calif., told reporters Friday, “if we do [another] CR or an omnibus [appropriations to fund the all agencies], that doesn’t give them the authority” to transfer funds within their own budgets. Giving the Pentagon that authority would help ease some pain associated with the $46 billion it must cut under sequestration before Oct. 1, McKeon said.

“The secretary of the Army told me he’ll have to cut 40 percent from operations and maintenance,” which would mean big training cancellations, McKeon said. “This cannot be allowed to happen.”




Cybersecurity: The Role of DHS

Tom Ridge Sees Department as Focal Point for Collaboration

By Jeffrey Roman, March 4, 2013. Follow Jeffrey @ISMG_News


Tom Ridge, the first Homeland Security secretary, sees the role of the Department of Homeland Security as a focal point for collaboration among the various agencies on cybersecurity.

Proposals from the White House and Capitol Hill would to varying degrees give DHS more sway in developing cybersecurity policy for the civilian part of the federal government, as well as collaborating with industry to create voluntary security standards for the nation’s critical IT infrastructure.

Ridge, a former House member and governor of Pennsylvania, says the biggest challenge exists with how DHS can work with private industry in order to advance security needs of both the public and private sector.

“Because … if you’re looking to try to preserve government continuity of operations, the infrastructure that the government relies upon is generally owned by the private sector,” Ridge says in an interview with Information Security Media Group [transcript below].

“DHS will have some form of role in trying to collaborate and ensure the exchange of information between the public and the private sector to the benefit of both,” he explains.

As far as being prescriptive in directions, Ridge can’t see how any agency can identify precise procedures and approaches to managing risk.

“In my judgment, the most effective means of reducing the risk … is making sure that you have this very robust exchange of information between the public and private sector,” Ridge says.

In the interview, Ridge discusses the:

•Critical need for the government and industry to share cyberthreat information;

•Bipartisan nature of the new leaders of the Senate and House Homeland Security committees;

•Prospects for passage of cybersecurity legislation in the just-convene 113th Congress.

Ridge recently was named chairman of the advisory board of anti-malware startup TaaSERA. He also chairs the U.S. Chamber of Commerce’s National Security Task Force.

Ridge served in the House of Representatives from 1983 to 1995, leaving Congress after being elected Pennsylvania’s governor, a post he held until 2001. He resigned as governor shortly after the 9/11 terrorists attacks, when President Bush asked him to become assistant to the president for homeland security. With the creation of DHS in 2003, Ridge became its first secretary, serving until 2005.


The Role of DHS

ERIC CHABROW: President Obama is going to increase authority to the Department of Homeland Security to help direct government-wide IT security, at least among civilian agencies. Some on Capitol Hill, such as Arizona Senator John McCain, oppose giving DHS such clout. What’s the appropriate role for DHS in safeguarding the government’s IT security?


RIDGE: DHS’s role in terms of what we’re seeing in government security is shared responsibility. Quite frankly, I could argue that among all the agencies they may be assigned responsibility, I’m not quite confident that they have the breadth and depth of experience to oversee what the rest of the federal government is doing. Having said that, I think they can be a focal point for collaboration among the various agencies. The biggest challenge that exists right now is not only the government’s relationship with the agency and how they can act with the private sector in order to advance security needs of both the public and private, because, frankly, if you’re looking to try to preserve government continuity of operations, etc., the infrastructure that the government relies upon is generally owned by the private sector. DHS will have some form of role in trying to collaborate and ensure the exchange of information between the public and the private sector to the benefit of both.


CHABROW: I’ll get to that in a moment. I would just like to expand a little bit more on DHS itself. What should the role be, just as a coordinator among the various agencies, or should it have a little more clout there?


RIDGE: Candidly, I don’t know how any federal agency can be prescriptive in terms of identifying precisely the procedures and approaches that the government and/or the private sector takes in order to reduce the risk of malicious malware being embedded and exploited in the system. I think hackers and technology move quicker than prescriptive directions. In my judgment, the most effective means of reducing the risk – and we’re just about managing the risk, as you and I know that intrusions are going to continue forever and ever – is making sure that you have this very robust exchange of information between the public and private sector. Horizontal would be public to public, agency to agency, with vertical [being] federal government to private sector and private sector up to the feds.


Public/Private Sector Relationship


CHABROW: Let’s talk a little bit about the private sector. I know you testified on Capitol Hill against the government regulating the private sector. But what should that relationship be?


RIDGE: The best example I can relate to is the comprehensive arrangement that the Department of Defense has with several thousand of its contractors and subcontractors, where they have, after they experimented with a pilot program, developed a means by which there’s continuous flow by directional flow of information between their contractors and DOD. I think that’s one of the means by which you enhance information sharing and, frankly, you reduce the risk.


Prospects for Cyber Legislation


CHABROW: We’re going to need federal law to do that and there are some hang-ups getting that through Congress. What should Congress do and what’s feasible legislation that can get enacted?


RIDGE: Frankly, Congress is very close to a solution. You now have two new chairmen. You have Congressman McCaul over in the House side. You have Senator Tom Carper on the Senate side. It’s interesting. You’ve got a Republican and a Democrat, both known to be very practical in their orientation. I think this is one area, in spite of what appears to be bipartisan gridlock, I’m optimistic that sometime during the course of this year we can marry the ideas that frankly are fundamental to the legislation that both chambers offer next year to come up with a solution.


At the end of the day, I think the epicenter of the solution has more to do with information sharing than anything prescriptive, but I think there’s a way we can get it done this year, and I fully intend on being as involved as I possibly can because I chair the U.S. Chamber of Commerce Taskforce on Homeland Security, and the past couple of years we’ve been focused on both supply-chain security and IT. I hope to be involved in that. I’m optimistic. I know both men and I think there’s a desire to get something done, and I suspect it will be done.


Addressing Privacy

CHABROW: Do you think the privacy issue will be addressed to get many lawmakers to support the bill?


RIDGE: You’re onto something major here. Whenever you’re dealing with the digital world, this proprietary corporate information or private individual information, that’s an issue that has to be dealt with directly and carefully, but I don’t think that’s going to be an impediment to the kind of solution that I think government and corporate America is looking to develop.



CHABROW: Would you say the same thing about liability, not providing too much protection, as some critics of some of the legislation have said?


RIDGE: This whole question of liability is a fascinating one to me because there have been people who have written articles who have said, “If some of these software providers were going to be held legally liable because of their failure to embed detection software or other better means of resisting attacks, should they be held liable?” Frankly, I think that will need to be a separate discussion. I think the key point right now is let’s start sharing information to combat the hackers and then let’s start talking about how we can incentivize the private sector, frankly, to do more and to do better. These are the software that are more resistant to these kinds of attack.


That’s where it’s a natural lead into TaaSERA, because here’s an opportunity for the digital world to, I don’t say, necessarily change from the proactive security where they look for signature-based malware, but to do what the intelligence and law enforcement agencies are doing and kind of do it with a little more behavior analysis and anticipation on an attack. That’s the kind of innovation that I think government and the private sector longs for and one of the reasons I think TaaSERA has some great market potential.


Hybrid Legislation

CHABROW: Do you see more narrowly focused legislation on cybersecurity going through Congress this year than a broad, omnibus Cybersecurity Act?


RIDGE: Yes. I see a hybrid. You probably followed very closely with what was contained in the House bill and the Senate bill. I think much of the House bill, married with about 75 percent or 80 percent of the Senate bill, is a good baseline and gets us about almost all the way there. There are some details to be worked out, but I do see a piece of cyber legislation coming out of the Congress this year.


DARPA wants UAV systems that can be based on small ships

Mon, 2013-03-04 01:13 PM

By: Mark Rockwell


Government researchers are looking for ways to convert small ships into mobile bases from which long-endurance unmanned aerial vehicles could perform intelligence, surveillance and reconnaissance missions.

Traditional airborne intel, surveillance and recon (ISR) aircraft like helicopters have their purposes, said the Defense Advanced Research Projects Agency (DARPA), but also a host of limitations, including distance and flight time. Manned and unmanned fixed wing aircraft can fly farther and longer, but require large or fixed land bases with runways longer than a mile, it said. Building those bases, or deploying carriers, said the agency, is also expensive, and requires substantial diplomatic and security commitments.

To overcome those challenges and expand the Department of Defense’s options, DARPA launched the Tactically Exploited Reconnaissance Node (TERN) program. The program, it said, looks to combine the strengths of both land- and sea-based approaches to supporting airborne assets using smaller ships as mobile launch and recovery sites for medium-altitude long-endurance (MALE) fixed-wing UAVs.

The program is named after the family of seabirds known for flight endurance – many species migrate thousands of miles each year – TERN aims to make it much easier, quicker and less expensive for DoD to deploy ISR and strike capabilities almost anywhere in the world, it said.

“It’s like having a falcon return to the arm of any person equipped to receive it, instead of to the same static perch every time,” said Daniel Patt, DARPA program manager. “About 98 percent of the world’s land area lies within 900 nautical miles of ocean coastlines. Enabling small ships to launch and retrieve long-endurance UAVs on demand would greatly expand our situational awareness and our ability to quickly and flexibly engage in hotspots over land or water.”

To familiarize potential participants with the technical objectives of TERN, DARPA is set to host a Proposers’ Day on Tuesday, March 20, 2013, in the DARPA Conference Center. Registration closes on Wednesday, March 18 at 12 p.m. ET.

DARPA said it wants proposals that would design, develop and demonstrate a MALE UAV and an associated automated launch and recovery system. The UAV would have to carry a 600-pound payload and have an operational radius of 600 to 900 nautical miles from its host vessel. The launch and recovery system would have to fit Littoral Combat Ship 2 (LCS-2)-class ships and other surface combat vessels as feasible.


Key technical challenges include:

Devising a reliable launch and recovery technique that enables large aircraft operations from smaller ships, even in rough seas;

Designing an aircraft with range, endurance and payload comparable to emerging land-based unmanned aircraft, while still meeting the demands of the maritime environment;

Ensuring the entire system can operate with minimal, and preferably reversible, ship modifications and minimal personnel requirements for operations and maintenance; and

Packaging the system to fit into the limited space aboard ships.


DARPA wants to roll out TERN in three phases over approximately 40 months, culminating in a full-scale launch and recovery demonstration.


“We’re trying to rethink how the ship, UAV and launch and recovery domains – which have traditionally worked in parallel – can synergistically collaborate to help achieve the vision of base-independent operations for maritime or overland missions,” Patt said.



Pilot Reports ‘Drone’ Sighting at JFK

By ABC News

March 5, 2013

The Federal Aviation Administration is looking into a report by an Alitalia pilot who said he saw a “small, unmanned or remote-controlled aircraft” on final approach to New York’s John F. Kennedy International Airport.

The Alitalia plane was on final approach about 1:15 p.m. Monday, when the pilot saw the unmanned aircraft approximately four to five miles southeast of the airport, the FAA said in a statement.

“We saw a drone, a drone aircraft,” the pilot can be heard telling the control tower on radio calls captured by the website Later in the recording another pilot reports a similar sighting.

The FAA is investigating the pilot’s claim and the FBI is taking a preliminary look into this incident. The Joint Terror Task Force is also investigating, a source familiar with the investigation told ABC News.

The unmanned aircraft was flying at an altitude of approximately 1,500 feet, but the pilot did not take evasive action and the Alitalia flight landed safely, according to the FAA.


Credit rating agencies shrug off sequester, say more cuts needed

The Hill

By Peter Schroeder – 03/04/13 04:33 PM ET


Credit rating agencies are shrugging off sequestration, saying the U.S. government will need to do more to reduce the deficit if it wants to prevent a downgrade of the nation’s credit rating.

While the agencies say the $85 billion in automatic spending cuts represent at least a step towards deficit reduction, they argue much more is needed to prevent the United States from losing its “AAA” rating.

“It’s not the most ideal outcome,” said David Riley, Fitch Rating’s global managing director for sovereign ratings, on CNBC Europe. “You’d rather have intelligent cuts and some revenue measures as well … but we don’t live in an ideal world, and it’s better to have some deficit reduction than none at all.”

The agencies view it as a positive sign that Congress did not simply scrap the unpopular sequester. Erasing the cuts without coming up with an alternative, something pushed by some liberal lawmakers, would have added to the deficit and debt and further pressured agencies to downgrade the nation’s credit rating.

At the same time, the agencies say they are worried that Washington’s inability to replace the sequester with targeted deficit reduction underlines concerns about the U.S. government’s dysfunction, a concern that led Standard & Poor’s to downgrade the U.S. in 2011.

The S&P downgrade came just days after Congress approved a hike in the nation’s debt limit in August 2011. The months-long debate caused stocks to dip and raised serious doubts about the ability of Republicans and Democrats to come together on fiscal issues.

It also led to the sequester, a series of cuts meant to be triggered only if Congress could not come up with a better deficit-reduction plan.

In downgrading the U.S. credit rating, S&P cited “political brinksmanship” and said Washington’s actions in the debate made the nation “less stable, less effective, and less predictable than what we previously believed.”

Watching both parties continue to butt heads on fiscal issues, S&P is confident they made the right call.

“The political discord around this process was a factor in lowering the credit rating,” said John Piecuch, a spokesman for the rater. “We believe that the events since then have validated our opinion.”

Agencies are raising similar concerns with the sequester.

Just days before Friday’s deadline, Fitch said allowing sequestration to occur would “further erode confidence” in policymakers’ ability to strike the broader deficit deals needed to get the country’s debt under control.

In addition, while the sequester will reduce spending and the deficit in the short term, U.S. deficits are expected to rise toward $1 trillion again by 2023.

The sequester reduces defense and non-defense discretionary spending, but does nothing to curtail Medicare spending, a key driver of the deficit.

The Congressional Budget Office found the deficit will drop to $430 billion by 2015 partly because of the sequester, and will continue to fall if spending caps remain curtailed by the budget cuts. (The “fiscal cliff” deal in January also improved the nation’s outlook by bringing in an additional $600 billion in revenue.)

Yet the CBO finds deficits will rise again in later years as entitlement costs continue to skyrocket and the population ages.

Raters say Congress will need to make even tougher choices to rein in debt and deficits if the country is to keep its top-shelf ratings.

The overarching concern from credit raters is getting the nation’s debt-to-GDP ratio on a sustainable course.

According to Fitch, assuming Congress leaves the sequester fully in place, policymakers would still need to track down another $1.6 trillion in deficit reduction to get the nation’s debt on a sustainable course. Actually driving down that ratio would require another $3 trillion in deficit reduction.

Federal Reserve Chairman Ben Bernanke struck a similar note when he testified before Congress last week.

He warned that while the sequester cuts might improve the nation’s finances in the short term, they do nothing to address the actual drivers of long-term fiscal woes. He called on Congress to replace the sequester with longer-term fiscal reforms that actually address those issues.

“The difficult process of addressing longer-term fiscal imbalances has only begun,” Bernanke added.

Credit raters are not weighing in on whether Congress should raise taxes, reduce spending or lower entitlement benefits to improve the nation’s fiscal trajectory.

Both Fitch and Moody’s Investors Service still give the U.S. their top rating, but both have placed it on a negative outlook, effectively warning that Washington will need to address the nation’s long-term debt issues in 2013 or face a downgrade.


Senate Democrats Seek Wider Scope, May Add Appropriations Bills

By Kerry Young

Roll Call Staff

March 6, 2013, 5:03 p.m.



Mikulski, the Appropriations chairwoman, has been tapped by Reid to craft a Senate package that includes more spending bills than the House-passed measure.

The continuing resolution that will come out of the Senate will almost certainly be a larger and more complicated measure than the stopgap funding measure the House coped with this week.

How far Democrats in the Senate hope to take the bill remains an open question, however, with lawmakers trying to balance concerns over the effects of the sequester on federal agencies and spending on major regulatory initiatives with the fundamental need to fund the government through the rest of the fiscal year.

Conservatives in both chambers appear willing to include more appropriations bills in the Senate version of the fiscal 2013 spending package, as long as the $85 billion slice to the federal budget under the sequester is preserved. The fiscal 2013 measure (HR 933) that went through the House on Wednesday combines Defense and Military Construction-Veterans Affairs bills with a stopgap CR for the rest of federal agencies, giving the military-related programs some ability to soften the blunt impact of the sequester.

The House’s bill effectively would cap fiscal 2013 spending at about $984 billion, a roughly $59 billion cut from the previous budget year’s spending, effectively entrenching the sequester for the current fiscal year.

Rep. Mick Mulvaney, R-S.C., said he doesn’t object to adding other spending bills as long as the total cost of the package stays the same. “I’m more interested in the top-line number,” Mulvaney said.

The challenge in the days ahead will be to devise a Senate package that can do more than win the needed GOP support for passage. To advance, the measure also would need to be written in a way that doesn’t spark a Republican backlash. That makes some of the more controversial bills, such as the Financial Services and Labor-Health and Human Services-Education measures, less likely to be included in a continuing resolution that will pick up after the current stopgap funding plan expires March 27.

“It depends on the structure of it, but the important thing is the overall cap,” said Sen. Jeff Flake of Arizona, a conservative freshman Republican with a long track record in the House of opposing spending measures.

Tom Cole of Oklahoma, a House GOP appropriator, endorsed this approach. “That’s fine,” Cole said. “We will negotiate it out, we’ll avoid a government shutdown.”

With the public blessing of Senate Majority Leader Harry Reid, D-Nev., Senate Appropriations Chairwoman Barbara A. Mikulski, D-Md., has been trying to craft a package that would contain more spending bills than the two contained in the House bill.

Sen. Richard C. Shelby of Alabama, the ranking member on the Appropriations Committee, said he was in conversations with Mikulski and was optimistic that other provisions could be added in the Senate. “We’ve got to see what’s doable,” he said. “I don’t think it will be an omnibus. I don’t think so. But it might be some kind of a hybrid. I’d call it a hybrid, smaller than a minibus.”

New spending bills added to Mikulski’s measure may still reflect the cuts made by the sequester, but they would move money around within the cap to allow agencies to better manage these reductions. Leaving an agency running under a CR means it will be cutting spending while still following budget marching orders that Congress set in late 2011 when it cleared the fiscal 2012 appropriations laws (PL 112-55, PL 112-74).


Among the clear candidates for the Senate’s fiscal 2013 bill are those from the Commerce-Justice-Science subcommittee and the Agriculture and Homeland Security measures. Staff members and appropriators largely worked out House-Senate compromise agreements for these two last years. Sen. Susan Collins of Maine, the ranking Republican on the Transportation-Housing and Urban Development Appropriations Subcommittee, said she hoped her panel’s bill could be added to the package but that an obstacle remained.

“I just don’t know if we are going to be able to resolve all of the issues with high-speed rail,” Collins said.

The differences over numerous such issues present serious hurdles to efforts to expand the scope of the funding resolution, and questions over the funding for issues with sharp partisan division, such as implementation of the Affordable Care Act and new financial regulations, provide even steeper barriers.

“I don’t think we would want any game-breakers,” said Sen. Dan Coats of Indiana, the ranking Republican on the Homeland Security Appropriations Subcommittee.

Among the bills facing such a challenge are the Financial Services measure, which would cause a fight about funding the 2010 Dodd-Frank overhaul (PL 111-203) of the financial services industry, and the Labor-Health and Human Services-Education measure, which would spark debate about money to be spent on the 2010 health care overhaul (PL 111-148, PL 111-152). The Interior-Environment measure also has been marked by some deeply partisan splits.

Other bills may be excluded from Mikulski’s measure because they contain unresolved issues, said Sen. Lamar Alexander of Tennessee, the ranking Republican on the Energy-Water Appropriations Subcommittee. With 13 or 14 items still to be worked out on his panel’s bill, he said, it’s “not at the head of the line.”


White House Cybersecurity Czar: New Executive Order A ‘Down Payment’

Michael Daniel says President Obama’s Executive Order on Cybersecurity sets the stage for cybersecurity legislation for protecting critical infrastructure


By Kelly Jackson Higgins, , Darkreading

Mar 05, 2013 | 10:34 PM



SAN FRANCISCO — RSA CONFERENCE 2013 — The White House’s top cybersecurity official here last week confirmed what experts had been speculating since President Obama issued an executive order for shoring up the security of critical infrastructure earlier this month: The order lays the groundwork for still-needed cybersecurity legislation.

“The executive order is really a down payment — a down payment on a lot of the hard work that [has been done],” Michael Daniel, special assistant to the president and cybersecurity coordinator, told attendees during a special White House forum session on the executive order at the RSA Conference. “There are things the executive order can’t do, such as direct agencies to do things they don’t already have [the authority] to do in the first place.


“We definitely need Congress to act and update our laws so we can see progress in cybersecurity,” he said.

Daniel says the president has taken a personal interest in cybersecurity, as have his top staffers, signaling just how important an issue it is in the national interest, as well as globally. “Within the White House itself, you can see the president is personally interested in this issue, as well as the chief of staff and the national security adviser. It has become a lot of the focus of our policy efforts,” he said. “Internationally, you can see this, too. It’s now not just about engineering arrangements … it’s an issue of statecraft and international diplomacy.”

Meanwhile, the threat is escalating, he noted. “The attack surface continues to grow” with more network-attached devices, he said, and the attackers are becoming more sophisticated. “It’s not just simple worms and viruses anymore,” and the malware is harder to detect and is more dangerous, he said.

“It’s not just website defacements or even denial-of-service attacks, but moving up to actual destructive attacks, things like what happened with Saudi Aramco this past summer,” Daniel said. “All of these trends mean the environment is getting more dangerous, and that’s why the president felt compelled to act in this space. The level of the threat simply demanded it.”

The executive order is based on three “pillars,” he said: information-sharing, privacy, and a framework of standards.

Daniel said the executive order is aimed at improving the amount of, quality of, and timeliness of threat information the federal government shares with the private sector. “We’re focusing on where the government has specific threat information related to companies or assets or systems so we do a better job at pushing out that information to those particular entities that have been targeted, and we’re going to do that in a classified and unclassified level,” he said.

A key component here is expanding the information-sharing process it uses with the defense industrial base to “all critical infrastructure sectors,” he said. “This program enables us to use particularly classified information and classified signatures in a way that enables [us] to give that information and protect critical infrastructure, but still protect sources of and methods used by which those signatures were derived.”

Daniel said privacy and cybersecurity go hand in hand. “Privacy and cybersecurity are really two sides of the same coin. You can’t have privacy these days without good cybersecurity,” he said.

The framework/standards piece of the executive order is more about best practices, he said. The order calls for the National Institute of Standards and Technology (NIST) to interface with private industry to determine how to take existing security best practices and get them adopted more widely across the nation’s critical infrastructure, he said. A preliminary framework is due from NIST in eight months, and a final framework in one year, he said.

“This is not about technology or techniques. It’s about best practices for cybersecurity that are already out there and making sure all critical infrastructure is following those,” he said. “It has to be industry-driven. It won’t work unless we get heavy participation and enthusiasm from industry.”

One the security framework is finalized, the U.S. Department of Homeland Security will launch a voluntary program for adoption of the framework. Also in the works are incentives for companies to adopt it, he said.

Regulatory bodies, meanwhile, will have to review their current regulations and requirements to determine whether they are in line with the framework. If so, they “don’t need to do anything else,” he said. But if there are any gaps or conflicts, they must align them, which may or may not require new regulations, depending on the issues, he said.

The executive order requires periodic reviews of the framework given the rapid pace of change in the threat landscape, he said.



New Wave of DDoS Attacks Launched

Are Community Institutions Adequately Prepared?

By Tracy Kitten, March 6, 2013. Follow Tracy @FraudBlogger


Hacktivists have formally launched their third wave of distributed-denial-of-service attacks on U.S. banking institutions.

On March 5, Izz ad-Din al-Qassam Cyber Fighters announced on the open forum Pastebin that banks and credit unions should brace for ongoing attacks beginning March 6.

“During running Operation Ababil Phase 3, like previous phases, a number of American banks will be hit by denial of service attacks three days a week, on Tuesday, Wednesday and Thursday during working hours,” hacktivists claim in their most recent post.

And while experts have warned institutions of all asset sizes to maintain strong online guards, this newest wave of attacks is just starting to garner serious attention from community banks and credit unions. That’s because smaller institutions, such as University Federal Credit Union and Patelco Credit Union, were among those hit during the hacktivists’ second wave of attacks.

“The NCUA’s warning has highlighted DDoS attacks as a concern worthy of consideration,” says Richard Reinders, information security officer for Lake Trust Credit Union, a $1.5 billion non-profit institution based in Michigan. “It has provided needed attention to the issue, so the results from it so far are positive.”

Reinders is referring to a recent alert from the National Credit Union Administration, which notes that DDoS attacks are often waged as tools of distraction to conceal fraud. “Credit unions should voluntarily file a Suspicious Activity Report if an attack impacts Internet service delivery, enables fraud, or compromises member information,” the alert states. “DDoS attacks may also be paired with attempts to steal member funds or data.”


Mixed Messages?

Still, one Midwest community bank executive, who asked not to be named, says as recently as January, smaller institutions were getting mixed messages about their need for concern. While regulators and banking associations such as the Financial Services Information Sharing and Analysis Center had issued warnings about DDoS attacks linked to fraud, federal investigators suggested hacktivists’ attacks were the primary worry, the executive says.

“We spoke with the FBI a couple weeks ago about DDoS attacks on community banks, and they basically stated that the smaller community banks have not, and most likely will not, be targeted by DDoS attacks,” the executive told BankInfoSecurity in early February, shortly after Izz ad-Din al-Qassam Cyber Fighters announced plans to halt its attacks. “They didn’t feel banks our size and smaller needed to spend a lot of time and resources on this issue.”

That perspective, however, has evolved among some executives since late January, when the attacks shifted and mid-tier institutions were among the hacktivists’ new targets.

Reinders says credit unions are heeding regulators’ warnings. “Credit unions are definitely talking about it, but it seems there is some hesitancy to discuss specifically what they do at this point.”


Phase 3

Experts say banking institutions should do more of the same to prepare for this newest wave of attacks. The lessons learned during phase one, which hit in September and October, taught the industry how to collaborate and brace. Strikes waged against them during phase two, which hit in December and January, were less tasking for that reason, says Rodney Joffe, senior technologist for online security provider Neustar Inc.

In addition to sharing information about the attacks suffered, financial institutions have been more closely collaborating with Internet service providers to scrub and block traffic. Some also have implemented measures to turn off access to certain parts of their online sites, such as search functions, when DDoS activity is detected. These precautions, and others, have helped ensure sites are not completely taken offline by an attack, experts say.

Mike Smith, a security evangelist and DDoS specialist at Web security provider Akamai, says the banking institutions and third-party providers like Akamai have improved efforts to deflect the hacktivists’ botnet, known as Brobot. “At this point in the attack campaign, most larger banks and their DDoS mitigation providers are able to defend themselves successfully against Brobot, or at least minimize the effects of any outage that they might have. This means that the QCF have to adjust tactics in order to get the impact that they are after.”

Hacktivists have not yet launched their proverbial big guns, Joffe suggests, and the time the hacktivists took off during the month of February was likely spent regrouping and building their botnet, which dealt a more powerful blow when it returned from its four-week hiatus on Feb. 25.

“This is the last al-qassam’s ultimatum to U.S. government, and, we announce that if the insulting films are not removed in the following days the Operation Ababil will be started again next week, March 5, 2013,” the group stated in a Feb. 26 post about its new attacks.

In the March 5 posting, the group vowed to fulfill its promise. It also seems hacktivists did some preparation work this time around before officially announcing their plans for more attacks.

“We started seeing activity on Friday and it continued over the weekend,” Joffe told BankInfoSecurity on Feb. 25. “That indicated an attack was being prepared, and it matched the kind of activity we had seen before.”

The botnet’s increased activity over the weekend of Feb. 23 did give security firms some forewarning, Joffe said. But that the attacks started on a Monday and were not previously announced did give them an element of surprise, he added.

Dan Holden, director of the security engineering research team for DDoS prevention provider Arbor Networks, says the Feb. 25 attacks reveal Izz ad-Din al-Qassam’s botnet has grown, and that should be a concern for institutions of all sizes. Among the latest targets: Bank of America, PNC Financial Services Group, Capital One, Zions Bank, Fifth Third, Union Bank, Comerica Bank, RBS Citizens Financial Group Inc. [dba Citizens Bank], People’s United Bank, University Federal Credit Union, Patelco Credit Union and others.


Hacktivist Demands

In addition to the National Credit Union Administration, the Office of the Comptroller for the Currency also issued a warning about DDoS attacks, and the possibility that the attacks could be used to mask fraud taking place in the background.

Still, it wasn’t until Izz ad-Din al-Qassam widened its attack net in late January that smaller institutions started to take serious notice, Reinders says. Not fully understanding what the hacktivists are after is breeding concern, he adds.


Hacktivists continue to pin the reason for their strikes on YouTube’s inability or unwillingness to remove links to a movie trailer deemed offensive to Muslims. “If the offended film is eliminated from the Internet, the related attacks will also be stopped,” the group says in its March 5 post.

They also explain why they stopped their attacks, albeit a brief cease fire. “While running the phase 2 of Operation, a main copy of the insulting film was removed from YouTube and that caused the phase 2 to be suspended,” Izz ad-Din al-Qassam claims. “al-Qassam cyber fighters measured this act positively and a bit sign of rationalism in the U.S. government and for this reason suspended the operation for one month. That also was an opportunity for U.S. government to think more about the topic and remove other copies of the film as well.”

As links to the offensive movie trailer remain active, the group says it has decided to reignite its DDoS efforts.

But Smith, like Joffe, suggests the break was taken to give the group time to build their botnet.

“When the QCF have lost enough Brobot nodes that they are no longer able to impact their targets, they are forced to go into a development phase to recruit new Brobot nodes and recon additional targets for application denial-of-service vulnerabilities that require a lower volume of attack traffic.”


As drone use grows, so do privacy, safety concerns


Ann Zaniewski, Detroit Free Press1a.m. EST March 7, 2013

DETROIT — Last September, a gunman barricaded himself on the top floor of his West Bloomfield, Mich., home. He had already killed one police officer and fired shots at others.

Oakland County Sheriff Michael Bouchard sent a deputy to a Brookstone store to buy a $300 Parrot A.R. Drone 2.0 App-Controlled Quadricopter.

Bouchard hoped that the camera-equipped, remote-controlled drone, with its ability to hover in midair, would allow police to see inside the house without putting more officers’ lives at risk.

“I was unwilling to send my people into a firefight without having any kind of information on what they were going into,” Bouchard recalled.

Perhaps best known for their role in military operations overseas, an increasing number of drones are taking to U.S. skies. Most are much smaller and far less sophisticated than the Predator drones used by the U.S. military.

They can be deployed in a police standoff, sent up to give firefighters real-time information on a fire or used by a real estate company to create an aerial video tour of a home for sale.

A federal law enacted last year streamlined the process for public agencies, including police departments, to get drone licenses and paved the way for commercial use. About 7,500 small, commercially operated drones — not including drones flown by public bodies — will be active in the U.S. in about five years, according to the Federal Aviation Administration.

As domestic drone use has grown, so have concerns about privacy, safety, regulation and the potential for abuse, including fears of unwarranted spying on people by police agencies or even by other citizens. Lawmakers in several states, including Michigan, are weighing rules to regulate the use of drones.


“The bill is really designed to make sure that we’re protecting people’s rights,” said state Republican state Rep. Tom McMillin of the drone legislation he intends to introduce next week. “We don’t want Big Brother flying over watching all our activities.”


Less-expensive options

The FAA has allowed drones, also known as unmanned aerial systems, to be used domestically for years for environmental monitoring, firefighting, disaster relief and search and rescue. The Department of Homeland Security uses them to monitor borders and ports.

Drones can be equipped with high-powered cameras, microphones, infrared devices and other high-tech tools.

A technically advanced cousin of remote-controlled model planes, the commercial and hobbyist versions range in price from less than $100 to thousands of dollars, depending on their size and sophistication. Drones available for purchase online or in stores today for hobbyists range in size from about 5 inches wide up to 3 or 4 feet.

Ryan Calo, a privacy law expert and professor of law at the University of Washington, said the widespread use of drones in the U.S. seems inevitable.

“Often when the cost of surveillance goes down, people do more of it. It’s expensive to have a helicopter. It’s expensive to have a plane. It’s less expensive to have a drone,” he said.

The cost of drones versus helicopters makes them appealing to cash-strapped police departments.

At the barricaded gunman scene in West Bloomfield, the quadricopter, designed to be controlled by a smartphone or tablet, was not stable enough to be useful. But Bouchard said the incident was a perfect example of when a similar device could be valuable to law enforcement.

He also pointed to a train derailment years ago that spewed toxic fumes in the air, preventing a helicopter from getting close.

“When people hear the word drone, I think they think of what’s being deployed in the Middle East,” Bouchard said. “High altitude, many hours of orbiting and, in some cases, carrying a lethal payload. … What we picked up from Brookstone is what you can pick up for your 10-year-old kid.”

Harry Arnold, 51, of Detroit is the founder of Detroit Drone, specializing in aerial photography and video. He is getting aerial footage of the ongoing construction of a Wayne State University building in Detroit on Feb. 2.

Harry Arnold paid more than $4,000 to make and equip the four-propeller drone he uses in his home-based business, Detroit Drone. He takes aerial images for construction companies and other clients.

For safety reasons, Arnold said, he welcomes better regulations over civilian drone use.

“For right now, there’s no law stopping a 13-year-old from buying one of these at Best Buy and flying over (Comerica Park). … I want to see it be regulated before aforementioned 13-year-old flies his drone around (Comerica Park) during the first inning because he thinks he will be cool and he crashes and hurts everybody, and all of a sudden, drones are illegal,” he said.


Legal issues

Under the FAA Modernization and Reform Act of 2012, Congress directed the FAA to develop guidelines for safely accelerating the integration of drones into the national airspace system by September 2015. Calo said the act was intended to streamline the process by which public and private entities can get licenses to fly drones.


Since 2007, the agency has issued 1,428 certificates of authorization allowing for drone use to police departments, universities and other public bodies. According to the FAA, 327 of those permits were still active as of Feb. 15.

Private companies, such as drone manufacturers, can fly drones for testing, demonstration and training after getting an experimental airworthiness certificate from the FAA.

Hobbyists and recreational users of model aircraft currently don’t need any special licensing but are encouraged to follow guidelines that are outlined in a 1981 circular. The guidelines say model aircraft should be operated at a site that is a “sufficient distance from populated areas” and not flown above 400 feet.

Right now, there are no provisions for commercial, for-hire unmanned aircraft operations, but Calo said that’s expected to change.

Many states aren’t waiting for the federal government to address concerns about privacy. Lawmakers in more than 25 states have proposed legislation related to drone use.

Some cities, fearful of abuse, have banned or considered banning their use by law enforcement. Police in Seattle recently scrapped plans to use two high-tech drones following protests from residents.


Data collection

In Michigan, McMillin is working on legislation that would prohibit government use of drones except under limited circumstances.

It is based on model legislation created by the American Civil Liberties Union, which says that law enforcement should only use the devices with a warrant or in emergency situations when a person’s safety is imminently threatened. The bill also sets parameters on how data is collected, used and retained.

The technology behind drones is evolving quickly, McMillin said.

“I think there’s probably going to be legal issues tomorrow that we don’t know about today. … It’s uncharted territory, for sure,” he said.

A Jan. 30 Congressional Research Service report prepared for members of Congress outlined some of the legal questions.

“Several legal interests are implicated by drone flight over or near private property. Might such a flight constitute a trespass? A nuisance? If conducted by the government, a constitutional taking?” the report asked.

Courts have generally upheld the principle that people do not enjoy a reasonable expectation of privacy in public, even on portions of their own property visible from a public vantage. The Fourth Amendment to the Constitution protects against unreasonable searches and seizures by the government.

An ACLU report about drones says the U.S. Supreme Court has allowed some warrantless aerial surveillance from manned aircraft but has not taken a position on whether the Fourth Amendment limits government use of drone surveillance.

“I think the nexus is this concept of what is public, and what is private?” said Shelli Weisberg, legislative director for the ACLU of Michigan. “Just because you’re out in public, does it mean that nothing you’re doing is private? Is the conversation with the person you’re walking with private? Those are the things that will be (eventually) tested by the courts.”

Both Weisberg and Calo said that when it comes to drones, current privacy law is inadequate.


“If the idea (is) that these things are going to follow folks around or patrol a particular neighborhood, there isn’t much in American privacy law that stands in the way. That’s both on the Constitutional law side and the civil law side,” Calo said.


Privacy isn’t the only concern.

This week an Italian airline pilot reported spotting a small, black drone hovering just a few hundred feet from his passenger plane as it made a final approach for a landing at New York’s JFK Airport.

The pilot reported the drone was flying at about 1,800 feet some 3 miles from the airport, according to various published reports.

Although the plane landed safely, the incident drew the attention of the FAA and counterterrorism officials in New York and at the FBI.



New Sanctions Imposed on North Korea as it Warns of Pre-emptive Nuclear Attack



Published: March 7, 2013 66 Comments


The United Nations Security Council approved a new regimen of sanctions on Thursday against North Korea for its underground nuclear test last month, imposing penalties on North Korean banking, travel and trade in a unanimous vote that reflected the country’s increased international isolation.

The resolution, which was drafted by the United States and China, was passed 15-0 in a speedy vote hours after North Korea threatened for the first time to launch a pre-emptive nuclear strike against the United States and South Korea.

“The strength, breadth and severity of these sanctions will raise the cost to North Korea of its illicit nuclear program,” the United States ambassador to the United Nations, Susan E. Rice, told reporters after the vote. “Taken together, these sanctions will bite and bite hard.”

Li Baodong, the ambassador from China, whose support for the new sanctions angered the North Korean government, told reporters the resolution was aimed at the long-term goal of denuclearizing the Korean Peninsula.

“This resolution is a very important step,” he told reporters. Mr. Li called passage of the resolution “a reflection of the view and determination of the international community.”

The resolution, which was drafted three weeks after the Feb. 12 underground test by North Korea, is the Security Council’s fourth against the reclusive North Korean government. It contains new restrictions that will block financial transactions, limit North Korea’s reliance on bulk transfers of cash, further empower other countries to inspect suspicious North Korean cargo, and expand a blacklist of items that the country is prohibited from importing. The sanctions also place new constraints on North Korean diplomats, raising their risk of expulsion from host countries.


Asked if she thought the sanctions would break the pattern of North Korean defiance of earlier punishments imposed by the Security Council, Ms. Rice said: “The choice lies with the decision that the North Korean leadership makes.”

She dismissed the North’s vows of a pre-emptive nuclear strike, saying “North Korea will achieve nothing by continued threats and provocations.”

In recent days, with the resolution set to pass, North Korea characterized the sanctions as part of an “act of war” in its escalating invective against the United States and its allies. Earlier this week it declared the 1953 armistice that stopped the Korean War null and void and threatened to turn Washington and Seoul into “a sea in flames” with “lighter and smaller nukes.”

The combative country has often warned that it has the right to launch pre-emptive military strikes against the United States, claiming that the western power wants to start a war on the Korean Peninsula. But on Thursday the North ratcheted up the hostile language by talking about pre-emptive nuclear strikes for the first time, citing the continuing joint American-South Korean military exercises as a proof that the United States and its allies were preparing for “a nuclear war aimed to mount a pre-emptive strike” on North Korea.

“Now that the U.S. is set to light a fuse for a nuclear war, the revolutionary armed forces of the DPRK will exercise the right to a pre-emptive nuclear attack to destroy the strongholds of the aggressors and to defend the supreme interests of the country,” a spokesman of the North Korean Foreign Ministry said in a Korean-language statement carried by the North’s official Korean Central News Agency. He used the acronym for his country’s official name, Democratic People’s republic of Korea.

The spokesman said that North Korea was no longer bound by the 1953 armistice ending the Korean War — and its military was free to “take military actions for self-defense against any target any moment” — starting from Monday, when it declared the cease-fire was terminated.

The resolution the United Nations adopted to impose more sanctions against the North “will compel the DPRK to take at an earlier date more powerful second and third countermeasures as it had declared,” the spokesman added, without elaborating.

In the past, whenever the United Nations considered more sanctions, North Korea’s typically strident rhetoric had grown harsher with threats of war. The threats were just that, and analysts said the message was meant as much for its home population, to whom they said the young leader Kim Jong-un sought to inspire a sense of crisis, as it was meant to unsettle the region to force Washington to engage it with concessions.

Photos filed by news agencies from the North Korean capital, Pyongyang, and carried in South Korean media on Thursday showed buses covered with military camouflage and university students rushing out of their classroom building in military uniforms in a military exercise.

Few analysts believe that North Korea would launch a military attack at the United States, a decision that would be suicidal for the regime. But officials in Seoul feared that North Korea might attempt an armed skirmish to test the military resolve of Park Geun-hye, South Korea’s first female president, who took office less than two weeks ago.

On Wednesday, in an uncharacteristically blunt response to North Korea’s threat, a South Korean Army general called a news conference and warned that if provoked, South Korea would strike back at the top North Korean military leadership. The two Koreas’ front-line units exchanged artillery fire after North Korea launched a barrage against a South Korean border island in 2010.

In the same year, 46 South Korean sailors were killed when their navy corvette sank in an explosion the South blamed on a North Korean torpedo attack.


With the United States standing behind it, South Korea has since vowed to strike back with a deadlier force if North Korea provokes again.

Despite such warnings, however, South Korean officials feared that Mr. Kim, an inexperienced leader eager to build his credentials and gravitas as leader of his “military-first” country might have been emboldened by his country’s recent successful tests of a long-range rocket and nuclear device to believe that he could try an armed provocation with impunity.

In North Korea, where pronouncements are carefully choreographed and timed, the threat on Tuesday to use “lighter and smaller nukes” was read on North Korean television by Gen. Kim Yong-chol. General Kim, the head of the North’s military intelligence, is one of the hard-liners that South Korean officials suspected was deeply involved in the 2010 attacks.

Rick Gladstone reported from New York, and Choe Sang-hun from Seoul, South Korea


Holder: US has no authority to kill Americans with drones on US soil

The Hill

By Justin Sink – 03/07/13 01:46 PM ET

The U.S. does not have the authority to use a drone attack against a U.S. citizen not engaged in combat on U.S. soil, Attorney General Eric Holder told Sen. Rand Paul (R-Ky.) in a Thursday letter.

White House press secretary Jay Carney revealed the letter at his Thursday press briefing. It was sent in response to a 13-hour filibuster Paul held on the Senate floor Wednesday to criticize the administration’s drone policy.

“The president has not and would not use drone strikes against American citizens on American soil,” Carney said.

Reading from the Holder letter to Paul, Carney said: “Does the president have the authority to use a weaponized drone to kill an American not engaged in combat on American soil? The answer is no. The answer to that question is no.”

The new letter from Holder is a slight shift in position from an earlier letter he sent to Paul last week. In that letter, Holder said it was unlikely the U.S. would use a drone attack against in American in the U.S., but that it was possible in response to a September 11, 2001-type attack.

Paul criticized the administration’s position in his filibuster, which he used to block a confirmation vote on Obama’s nominee to lead the CIA, John Brennan.

“No one politician should be allowed to judge the guilt, to charge an individual, to judge the guilt of an individual and to execute an individual. It goes against everything that we fundamentally believe in our country,” Paul said during his marathon effort, which won support from senators on both sides of the aisle.

Brennan is likely to win confirmation, and Paul’s position on drones and filibuster came under criticism on Thursday from GOP Sens. John McCain (Ariz.) and Lindsey Graham (S.C.).

The administration’s policies on drones have come under increased scrutiny, and Holder indicated earlier this week that Obama will soon publicly address the issue.

Carney said Thursday that the timing of an Obama address had not been set but would take place in the “coming months.”

The press secretary also criticized Paul for holding up Brennan’s confirmation.

“This debate has nothing to do with the qualifications of John Brennan. Sen. Paul said as much yesterday,” Carney said.

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Time now to get smart on sequestration, furlough


Posted 3/5/2013 Updated 3/4/2013

by Debbie Gildea, Air Force Personnel Center


3/5/2013 – JOINT BASE SAN ANTONIO-RANDOLPH, Texas — Former Defense Secretary Leon Panetta notified Congress recently that should sequestration occur, the Department of Defense will initiate furlough for its 800,000-plus civilian employees. Congressional notification is required at least 45 days from a planned furlough, with implementation anticipated for late April, Air Force officials said.

“The potential for sequestration-driven furlough continues to be a sensitive topic of discussion,” said Robert Corsi, Air Force Assistant Deputy Chief Staff for Manpower, Personnel and Services. “It has headlined every news product for months, and Air Force leaders at every level are working to determine how to minimize negative impact on people and the mission.”

In the event of sequestration, furlough will be implemented across the Department of Defense, with all the services working with the Department to execute furloughs similarly, including how and when employees will be notified (subject to applicable laws, regulations and collective bargaining agreements).

“DOD-wide, installation leaders are discussing furlough impact with union representatives to determine the most effective, least disruptive way to implement furlough, should it become necessary,” Corsi said.

If implemented, civilians will be furloughed for no more than 16 hours per pay period. In addition to duty hours and pay impact, furlough will affect employees in other areas, including benefits.

“I encourage all Airmen to study the guidance on furlough and ask questions to be sure you understand how you’re affected, or how your employees are affected,” Corsi said. “Civilians – especially those relatively new to service – will turn first to their supervisors for explanations and guidance.”

To learn more go to the myPers site at and enter “Civilian: Furlough Home Page” in the search window. For other furlough information, visit the Office of Personnel Management site at

Civilian Airmen must also be aware of the impact on leave accrual, benefits and Thrift Savings Plan contributions, particularly if they are planning vacations or nearing retirement, he said.

According to Office of Personnel Management guidance, the accumulation of non-pay status hours can affect the accrual of annual leave and sick leave. For example, when a full-time employee with an 80-hour biweekly tour of duty accumulates a total of 80 hours of non-pay status from the beginning of the leave year (either in one pay period, or over the course of several pay periods), the employee will not earn annual and sick leave in the pay period in which that 80-hour accumulation is reached. If an employee is furloughed for 176 hours (22 days), he or she will lose two pay periods worth of annual leave and sick leave accrual.

“Employees who have extended leave plans need to understand that they will not accrue those hours while on furlough,” Corsi said.

In addition, where TSP contributions are based on a percent of pay, employees will see a reduction in TSP contributions. Employees in the Federal Employee Retirement System will also see a reduction in agency automatic contributions and may experience a reduction in employer-matching contributions, depending on employee contribution amounts, Corsi explained.

While leaders at every level work to develop alternatives to sequestration, the possibility of a furlough must be taken seriously and Airmen must be smart about the impact on their lives, the director said.

“If sequestration and furlough are averted, so much the better. In the meantime, I ask every Airmen to actively prepare for the days ahead and review the information already available. I cannot overemphasize the importance of planning for a potential reduction of income,” said Corsi.



Agency facing ‘tidal wave’ of furlough appeals

Mar. 7, 2013 – 10:21AM |

By STEPHEN LOSEY | 3 Comments

The tiny Merit Systems Protection Board fears it is about to be swamped.

Agency officials expect to be flooded in the coming weeks by thousands of appeals from federal employees looking to evade furloughs. MSPB handles appeals of adverse actions such as furloughs.

MSPB Chairman Susan Tsui Grundmann said that if even 1 percent of federal employees facing furloughs appeal, that would more than double the board’s annual workload of 8,000 cases.

But the agency has bigger problems than that: MSPB is also facing sequestration and may be forced to furlough some of its 204 employees while trying to weather an unprecedented increase in its caseload. Those MSPB employees also have their own rights to appeal their furloughs — to an outside administrative law judge — and MSPB will have to foot the bill for those appeals as well, while already trying to absorb sequestration budget cuts.

“It’s a tidal wave,” Grundmann said. “Everything hitting at the same time. Like other agencies, we don’t really know what’s coming.”


MSPB’s options

MSPB doesn’t have very many options, she said. The agency won’t have the money to bring on temporary employees or rehire retirees. And even if MSPB brought on new temporary employees to take up the slack, Grundmann said, it would take two years to get them fully trained.

The last time MSPB handled a situation even remotely similar to this was after President Reagan fired the striking air traffic controllers in 1981, Grundmann said. About 12,000 fired controllers appealed their firings, and MSPB was able to lump all their appeals together and process them at once.

But those 12,000 appeals came from one agency and dealt with a single personnel action, Grundmann said. The sequestration furloughs will affect hundreds of thousands of employees across dozens of agencies differently, and grouping them together will be nearly impossible, she said.

The government shutdowns in 1995 or 1996 also provide no guidance to MSPB. Because Congress restored back pay to federal employees furloughed during that shutdown, they had nothing to appeal to MSPB.

Grundmann said MSPB took 93 days on average to process a case last year. If its workload is more than doubled, that time could also potentially double, she said.

“I can’t even fathom what that would do to our backlog,” she said. “Some things, I don’t want to think about.”

John Mahoney, a partner at the law firm Tully Rinckey, which represents federal employees before MSPB, said it will be hard to predict how many feds might appeal their furloughs.

“We’ve never had anything like this,” Mahoney said.


Winning the case

If a fed can prove that he was targeted for a furlough because he was a whistleblower, or that furloughs disproportionately fell on members of a particular minority group, Mahoney said that federal employee may have a case for appealing his furlough.

But if virtually everybody in a particular office or agency gets furloughed, an employee’s case would get weaker, he said.

“If everybody gets furloughed, that hurts your appeal,” Mahoney said. “If there’s no prohibited personnel practice, it’s going to be very difficult to win.”

Some employees might try to appeal their furlough anyway, to see if they can negotiate a settlement with the agency and shorten their furloughs, Mahoney said. Some feds may have access to an attorney through their union, and some may sign on to a potential class-action lawsuit, he said. Others may file appeals on their own.

“If I’m a federal employee about to lose 20 percent of my pay between now and September, is there a prospect for an alternative dispute resolution settlement negotiation to come up with a more favorable resolution?” Mahoney said. “We’re talking about years, and hundreds of thousands of dollars [possibly spent on fighting furlough appeals]. This is just an administrative nightmare, frankly, for the United States.”


House orders Pentagon to disclose domestic drone use

The Pentagon operates drones abroad that are armed with sophisticated sensors, Hellfire missiles, and laser-guided bombs. The House of Representatives wants to know if they’re used at home.

by Declan McCullagh

| March 7, 2013 5:48 PM PST


The U.S. House of Representatives voted yesterday to require the Defense Department to disclose whether military drones are being operated domestically to conduct surveillance on American citizens.

A requirement buried in a lengthy appropriations bill calls on newly confirmed Defense Secretary Chuck Hagel to disclose to Congress what “policies and procedures” are in place “governing the use” of military drones or other unmanned aerial vehicles (UAVs) domestically. The report is due no later than 90 days after the bill is signed into law.


The vote on the bill, which was overwhelmingly supported by Republicans and opposed by Democrats, comes as concerns about domestic use of drones have spiked. Sen. Rand Paul, a Kentucky Republican, launched the first filibuster in three years yesterday to call attention to the Obama administration’s drone policy, and CNET reported last weekend that Homeland Security required that its UAVs be capable of “signals interception” and “direction finding” of cell phones in use on the ground.

“I think the drone issue has crystalized many of the public anxieties and frustrations surrounding the decade-old war on terror, including many concerns that have nothing to do with drones,” says Steven Aftergood, who directs the Project on Government Secrecy at the Federation of American Scientists. “The executive branch has been stingy with information, and that has created a vacuum that is now being filled with reactions of all kinds.”

The appropriations measure, which is now before the Senate, notes that the U.S. Air Force has “policies and procedures in place governing the disposition of UAV [surveillance] that may inadvertently capture matters of concern to law enforcement agencies.” The bill says “it is unclear” if other branches of the military — the Navy and Marine Corps operate drones as well, for instance — currently follow “similar policies and procedures.”

Last year, the U.S. Air Force adopted a drone policy (PDF) that says its unmanned aircraft “will not conduct nonconsensual surveillance on specifically identified U.S. persons, unless expressly approved by the Secretary of Defense.” It also says, however, that “collected imagery may incidentally include U.S. persons or private property without consent.”

A National Guard policy (PDF) adopted last year includes similar language, saying neither its manned nor unmanned aircraft may “conduct nonconsensual surveillance on any specifically identified U.S. persons” — unless approved by the Secretary of Defense and permitted by law.

The House’s language stops short of requiring Hagel to disclose whether he or his predecessor have taken the step of approving the targeting of any U.S. citizens for surveillance.

Concern about domestic use of drones is growing, with federal legislation introduced last month that would restrict arming drones, in parallel with similar efforts from state and local lawmakers. The Federal Aviation Administration recently said that it will “address privacy-related data collection” by drones, and Rep. Austin Scott, a Georgia Republican, on Tuesday introduced a bill, H.R. 972, that would require police to obtain warrants before sending drones on domestic surveillance missions.

The prospect of widespread surveillance from the skies concerns civil libertarians, who say the technology billed as securing the United States’ land and maritime borders could be used inside the nation’s borders. Michael Kostelnik, the Homeland Security official who created its drone program, told Congress that the department’s drone fleet would be available to “respond to emergency missions across the country,” and a Predator drone was dispatched to the tiny town of Lakota, N.D., to aid local police in a dispute that started with who owned six cows. The alleged cow-nabber arrested through Predator surveillance lost a preliminary bid to dismiss the charges.

Sen. Paul’s filibuster yesterday, which lasted about 13 hours, may have done the most of any of these recent efforts to raise the profile of drone misuse. Paul attempted to block the nomination of John Brennan, President Obama’s nominee to be CIA director and supporter of overseas use of drone strikes, until the administration answered questions about domestic targeting of civilians.

“I will speak as long as it takes, until the alarm is sounded from coast to coast that our Constitution is important, that your rights to trial by jury are precious, that no American should be killed by a drone on American soil without first being charged with a crime, without first being found to be guilty by a court,” Paul, who was eventually joined by some Republican colleagues and Democratic senator Ron Wyden, said on the Senate floor.

Paul received his response today, when Attorney General Eric Holder responded in a terse letter saying that the president does not have the authority to “use a weaponized drone to kill an American not engaged in combat on American soil.”


Budget wave set to hit House and Senate

March 8, 2013

The Hill

By Peter Schroeder

Capitol Hill will be a flurry of fiscal activity next week, as a host of major budget and spending documents are unveiled and considered by lawmakers.

Both parties and chambers will release competing budget documents next week, starting with the House Republican budget set for public consumption on Tuesday. House Budget Committee Chairman Paul Ryan (R-Wis.) will host a mark-up of the spending vision Wednesday.

Meanwhile, Senate Budget Committee Chairwoman Patty Murray (D-Wash.) intends to roll out a competing proposal Wednesday, the first from Senate Democrats in about four years. A two-day committee markup sets the stage for its passage Thursday.

The intention is for both budgets to receive respective floor votes before Congress breaks for Easter recess beginning March 22.

Senate Appropriations Chairwoman Barbara Mikulski (D-Md.) will release her version of a continuing resolution (CR) on Monday, which would keep the government funded until Oct. 1. The House passed the GOP-crafted version of the CR last week, and Senate Democrats plan to make extensive changes to the measure.

Among the changes, the Senate CR would give the Obama administration more flexibility in implementing the $85 billion in sequester spending cuts, and will add a trio of appropriations bills that would provide funding for the Departments of Commerce, Justice, Agriculture, Homeland Security and science agencies.



Obama budget delayed until April

The Hill

By Jeremy Herb – 03/08/13 11:33 AM ET

The Obama administration will release its 2014 budget more than two months late on April 8, according to congressional sources.


Pentagon officials have informed the House Armed Services Committee that the budget is coming on April 8, said Claude Chafin, a committee spokesman. A Democratic congressional source confirmed that is the planned release date.

The April release means President Obama’s budget will be nine weeks late, as it was due by law on Feb. 4, the first Monday in February.

Republicans have slammed Obama for delaying the budget so far past the deadline.

“This indicates a troubling unwillingness to lead,” Sen. Jeff Sessions (R-Ala.), the ranking member of the Senate Budget Committee, said of the new delay. “It is odd to me that the president would not have a plan and want the Congress to consider it.”

“Will he ever commit himself to a plan? He has been very effective in criticizing others,” Sessions said. “The budget is so late, it doesn’t give me much confidence. It is almost like he is leading from behind even more that before. “

Congressional sources said last week that they had been told the budget was coming on March 25, meaning the latest April 8 release date would be yet another delay.

Under the law, the president must submit a budget by the first Monday in February, but Obama has met the deadline only once.

The White House declined to confirm the budget delay at a press briefing on Friday.

“I don’t have a budget date to announce to you,” White House deputy press secretary Josh Earnest said.

But Earnest also pointed the finger at Congress when explaining the lengthy delay in producing a budget document.

“The budget has been delayed because some of the impediments that have been thrown in the path of those working on it,” Earnest said, citing the sequester and the “fiscal cliff” as complicating the budget forecast.

The administration’s budget typically kicks off the annual budgeting process, as Congress then shapes its budget resolution on the president’s request.

But this year that process is reversed, as both House Budget Commitee Chairman Paul Ryan (R-Wis.) and Senate Budget Chairwoman Patty Murray (D-Wash.) are planning to release their 2014 budgets next week.

The House and Senate Armed Services Committees started their 2014 budget hearings with military officials this week without a budget.

A GOP congressional aide said that the delay is fueling what’s already a high level of budget anxiety in the Pentagon due to sequester and the lack of a 2013 budget resolution.

“Budget delays fuel uncertainty in the military, an uncertainty that is already being inflicted through sequester,” the aide said. “It is precisely this kind of uncertainty that the uniformed senior commanders have asked Congress and the Commander and Chief to prevent.”

The White House has blamed the hold-up on the uncertainty caused by fights over the fiscal cliff, sequestration and the continuing resolution to fund the government that expires March 27.

Sessions blasted the administration last week when it appeared the budget would come at the end of March.

“He will be submitting it after the House and Senate have produced a budget proposal and adjourned for Easter. So while the President speaks of his deep concern for American workers and families, he fails to even submit to Congress his financial plan to help those workers and families,” Sessions said.

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March 2 2013




Obama’s Five-Point Plan to Fight Cyber-Crime

2/25/2013 @ 6:00AM |317 views

Derek Klobucher, SAP

Continued cyber-attacks on the United States may soon be met with trade or diplomatic punishment against the nations of origin. The Obama administration last week listed more than a dozen instances of international assaults against U.S. businesses, resulting in stolen trade secrets, blunted competitive edge and lost American jobs.

“There are only two categories of companies affected by trade-secret theft: those that know they’ve been compromised and those that don’t know it yet,” U.S. Attorney General Eric Holder said Wednesday during a conference at the White House. “A hacker in China can acquire source code from a software company in Virginia without leaving his or her desk.”

Five-Point Plan

China again denied involvement in cyber-attacks this week, according to The Wall Street Journal, but experts believe that strikes against DuPont, defense contractor Lockheed Martin and many more U.S. firms originated on Chinese soil. “The new push comes on the heels of fresh allegations of Chinese cyberspying … and represents an effort by Washington to respond to growing complaints about theft of military and corporate secrets,” WSJ stated Thursday.

The White House summed up much of that effort in the pragmatically named report “Administration Strategy on Mitigation the Theft of U.S. Trade Secrets.” It is a five-point plan to:

  • Focus Diplomatic Efforts to Protect Trade Secrets Overseas
  • Promote Voluntary Best Practices by Private Industry to Protect Trade Secrets
  • Enhance Domestic Law Enforcement Operations
  • Improve Domestic Legislation
  • Public Awareness and Stakeholder Outreach

The report also follows a revelation weeks ago of executive powers allowing the U.S. to launch preemptive cyber-attacks, and President Obama’s mention of cyber-warfare in his State of the Union Address. And the plot continues to thicken.

Making the Case

The Hill noted Thursday that U.S. Congress is juicy and easy prey for cyber-attacks by hacker group Anonymous, as well as foreign intelligence agencies. Military, budget, policy and other sensitive dat are on congressional networks, which aren’t protected by adequate defenses against sophisticated hacking.

And Washington D.C.-based cyber-security firm Mandiant released a report last week about a Chinese military unit with English-speaking hackers that has pilfered data from at least 115 companies across major industries in the U.S. since 2006. “APT1: Exposing One of China’s Cyber Espionage Units” describes the People’s Liberation Army Unit 61398 and its status as an Advanced Persistent Threat (APT).

Beijing has spoken out against these types of assertions, saying that the shadowy nature of cyber-attacks makes it difficult to point fingers. But the Obama administration’s strategy report got pretty specific.

“Of the 19 cases that had resulted in charges and convictions detailed in the strategy document,” WSJ noted, “16 involve theft aimed to benefit entities in China, such as stolen hybrid technology from GM and military secrets from defense contractor L-3 Communications Holdings Inc., among others.”

Stealing know-how from a company, such as GM, negatively impacts is ability to compete in the global marketplace. Spying on defense contractors, such as L-3, compromises national security.

And both of these adversely affect jobs.


Most businesses — especially technology companies — can understand the importance of intellectual property, so the White House is right to portray this as an economic and a national security issue.


U.S. Budget Cuts Could Shift COCOM Requirements

WASHINGTON — The U.S. Navy has had two aircraft carriers steaming in Middle Eastern waters for most of the past three years.

And despite warnings from the Navy that maintaining the two-carrier presence there over an extended period could have drastic effects on the fleet, they stayed for one simple reason: a general believed they were necessary.

U.S. Central Command (CENTCOM), which oversees combat operations in the Middle East and Southwest Asia, said it needed the extra aircraft carrier year round to help support and carry out strikes against the Taliban and other insurgent fighters in Afghanistan.

The Navy said it could deliver the two carriers, but only for nine months out of the year — one carrier would be present for the remaining three months. Even as combat operations in Iraq came to a close, the requirement remained, until this month.

Facing an uncertain future budget, the Pentagon in February announced it would delay the deployment of the Harry S. Truman Carrier Strike Group, which would have been the second carrier in the Middle East.

Experts say that budget uncertainty combined with a refocused military strategy could further play a role in the prioritization of regional combatant commands’ (COCOMs’) operational requirements and lead to more constraints when senior military leaders make these requests, experts say.

“Combatant commands don’t have to fund these capabilities … so they don’t have a natural constraint on their ‘requirements,’” said Mark Gunzinger, an analyst with the Center for Strategic and Budgetary Assessments think tank in Washington.

The Army, Navy and Air Force are responsible for funding the troops, equipment and weapons that combatant commanders deem essential.

As the Pentagon prepares to shrink its budget $487 billion from planned spending levels over 10 years — and perhaps an additional $500 billion over that same period should across-the-board spending cuts known as sequestration begin next month — the Defense Department’s January 2012 announced military strategy is expected to play a critical role in requirements allotment.

For more than a decade, CENTCOM has received the largest portion of U.S. military assets due to combat in Afghanistan and Iraq. Other commands, such as U.S. Southern Command (SOUTHCOM), which oversees operations in South America and Latin America, and more recently U.S. European Command (EUCOM), have received fewer.

The Pentagon’s year-old military strategy, which puts more emphasis on the Asia-Pacific region, is expected to elevate U.S. Pacific Command (PACOM), SOUTHCOM and U.S. Africa Command (AFRICOM) requirements, experts say.

The new military strategy could elevate the requirement requests from combatant commands that have historically ranked lower in priority over the past decade.

“I think you’ll see a waning of effort in the CENTCOM area,” said retired Air Force Gen. Charles Wald, a former EUCOM deputy commander. “You’ll see a growing attention being paid to AFRICOM and SOUTHCOM. I think [U.S. Northern Command] will remain important. I don’t think we’re ever going to get away from the fact that we actually have to have a combat capability to protect America now.”

In the coming years, much of the focus in South America, Africa and Southeast Asia will likely center on training local forces through partner building efforts and intelligence, surveillance and reconnaissance (ISR).

The vast majority of the Pentagon’s expansive unmanned aircraft inventory — key tools in ISR operations — has been in Central Asia, the Middle East and Africa.

The Cost of Presence

Scaling back COCOM requirements could in fact lead to a trimmer force. Defense Secretary Leon Panetta has often said the size of the U.S. military — as laid out in the Pentagon’s military strategy — will get smaller, but remain agile and flexible.

“To an extent, all of the services can justify their force structure and so forth based on the presence requests of the combatant commands,” Gunzinger said.

With defense spending already set to decline in the coming years, and the deeper cuts looming, some analysts believe throttling back on requirements could help the Pentagon save billions of dollars without major capability losses.

“I think given the chance to do it right … DoD could afford to take some more cuts and they will,” Wald said. “I don’t get real nervous if they’re given a chance to do the right planning. I think the COCOMs will follow that eventually if that kind of guidance and leadership comes out of the Pentagon.”

Presence, or forward basing troops, ships or aircraft in a particular region, is a major cost driver.

“Everything is on the table and that means our global presence is certainly on the table, not just how many, but how we do it,” Gunzinger said.

For example, a Navy presence reduction could mean reducing the number of aircraft carriers, which in turn reduces the number of carrier air wings and other assets that support the ship.

“The calculus driven by presence requirements are pretty significant and justifies keeping more carriers around,” Gunzinger said. “If that presence policy changes, then that can have implications on the size of the carrier fleet.”

Gunzinger — a former deputy assistant defense secretary and a retired Air Force colonel — said the COCOMs could do a better job addressing particular requirements by mixing and matching different weapons and forces to deliver a certain capability.

“Don’t ask me for a carrier battle group, ask me for what is it you want me to do,” he said. “These are the kind of things that could be managed through the joint process and could mitigate some of the strains on the force, especially for our capabilities and units that are in high demand.”

Traditionally, urgent battlefield requirements, which have been extremely prevalent in Iraq and Afghanistan, are for weapons or equipment already in production. Historically, experts say, an urgent battlefield request is given higher priority based on the rank of the person requesting it.

The Threat

A classified document called the guidance for the employment of the force establishes priorities and makeup of U.S. assets in different regions of the world. Based on that document, the combatant commanders develop war plans and create a force posture that seeks to deter conflict.

Combatant command requirements are overseen by members of the Joint Staff through the Global Force Management process. The combatant commanders provide a list of requirements to the chairman of the Joint Chiefs of Staff once per year. Those requirements — the majority of which are classified — are then adjudicated through this process.

“Usually, the demand for presence, forces and so forth exceeds the supply, so you have to have an adjudication process that allocates forces and so forth across the COCOMs,” Gunzinger said.

At the same time, urgent requirements are reviewed every few weeks, most often to address requests from the battlefield.

Because combatant commanders strive to reduce risk, the practice could lead to “requests for capabilities that can be a little unrealistic at times,” Gunzinger said.

“If your responsibility is to do this in your [area of responsibility] and you think you need that to do it, then you’re going to ask for it, probably without concern for other theaters,” he said.

Combatant commanders are “attempting to minimize risk, and that can drive a significant request for force structure and capabilities and presence, and you’re not required to pay for those, the services are,” Gunzinger said. “There’s no governor on those requests due to resources, and that’s why you have that centralized Global Force Management process.”

But military officials and many lawmakers argue that combatant commanders’ requests are justified due to threats, such as terrorism.

“[T]here’s this big suggestion that somehow our combatant commanders are coming up with all of these wish lists of everything they want,” said Rep. Randy Forbes, R-Va., chairman of the House Armed Services seapower subcommittee. “When you really do the analysis, when you peel that onion back, they’re not. You know, they’re making requests that we truly need and they truly need.”

Despite the looming defense spending cuts, the Global Force Management oversight process is not expected to change, said a spokeswoman for the Joint Staff.

The only way to inject more constraint in the requirements process is though strong leadership, experts say.

Pentagon brass needs to send a blunt message to the COCOMs as yearly budgets shrink: “Think a little smarter about how you’re going to spend,” said Todd Harrison, also with the Center for Strategic and Budgetary Assessments.

“You need a strong set of leaders in the Pentagon who are willing to say: ‘OK we get it. That’s what you would like, but you need to support that as a requirement,’” Gunzinger said.


Chinese hackers: Professional cyberspies?



By Christopher Bodeen – The Associated Press

Posted : Monday Feb 25, 2013 21:07:18 EST



BEIJING — Beijing hotly denies accusations of official involvement in massive cyberattacks against foreign targets, insinuating such activity is the work of rogues. But at least one piece of evidence cited by experts points to professional cyberspies: China’s hackers don’t work weekends.


Accusations of state-sanctioned hacking took center stage this past week following a detailed report by a U.S.-based Internet security firm Mandiant. It added to growing suspicions that the Chinese military is not only stealing national defense secrets and harassing dissidents but also pilfering information from foreign companies that could be worth millions or even billions of dollars.


Experts say Chinese hacking attacks are characterized not only by their brazenness, but by their persistence.


“China conducts at least an order of magnitude more than the next country,” said Martin Libicki, a specialist on cyber warfare at the Rand Corporation, based in Santa Monica, California. The fact that hackers take weekends off suggests they are paid, and that would belie “the notion that the hackers are private,” he said.


Libicki and other cyber warfare experts have long noted a Monday-through-Friday pattern in the intensity of attacks believed to come from Chinese sources, though there has been little evidence released publicly directly linking the Chinese military to the attacks.


Mandiant went a step further in its report Tuesday saying that it had traced hacking activities against 141 foreign entities in the U.S. Canada, Britain and elsewhere to a group of operators known as the “Comment Crew” or “APT1,” for “Advanced Persistent Threat 1,” which it traced back to the People’s Liberation Army Unit 61398. The unit is headquartered in a nondescript 12-story building inside a military compound in a crowded suburb of China’s financial hub of Shanghai.


Attackers stole information about pricing, contract negotiations, manufacturing, product testing and corporate acquisitions, the company said.


Hacker teams regularly began work, for the most part, at 8 a.m. Beijing time. Usually they continued for a standard work day, but sometimes the hacking persisted until midnight. Occasionally, the attacks stopped for two-week periods, Mandiant said, though the reason was not clear.


China denies any official involvement, calling such accusations “groundless” and insisting that Beijing is itself a major victim of hacking attacks, the largest number of which originate in the U.S. While not denying hacking attacks originated in China, Foreign Ministry spokesman Hong Lei said Thursday that it was flat out wrong to accuse the Chinese government or military of being behind them.


Mandiant and other experts believe Unit 61398 to be a branch of the PLA General Staff’s Third Department responsible for collection and analysis of electronic signals such as e-mails and phone calls. It and the Fourth Department, responsible for electronic warfare, are believed to be the PLA units mainly responsible for infiltrating and manipulating computer networks.


China acknowledges pursuing these strategies as a key to delivering an initial blow to an opponent’s communications and other infrastructure during wartime — but the techniques are often the same as those used to steal information for commercial use.


China has consistently denied state-sponsored hacking, but experts say the office hours that the cyberspies keep point to a professional army rather than mere hobbyists or so-called “hacktivists” inspired by patriotic passions.


Mandiant noticed that pattern while monitoring attacks on the New York Times last year blamed on another Chinese hacking group it labeled APT12. Hacker activity began at around 8:00 a.m. Beijing time and usually lasted through a standard workday.


The Rand Corporation’s Libicki said he wasn’t aware of any comprehensive studies, but that in such cases, most activity between malware embedded in a compromised system and the malware’s controllers takes place during business hours in Beijing’s time zone.


Richard Forno, director of the University of Maryland Baltimore County’s graduate cybersecurity program, and David Clemente, a cybersecurity expert with independent analysis center Chatham House in London, said that observation has been widely noted among cybersecurity specialists.


“It would reflect the idea that this is becoming a more routine activity and that they are quite methodical,” Clemente said.


The PLA’s Third Department is brimming with resources, according to studies commissioned by the U.S. government, with 12 operation bureaus, three research institutes, and an estimated 13,000 linguists, technicians and researchers on staff. It’s further reinforced by technical teams from China’s seven military regions spread across the country, and by the military’s vast academic resources, especially the PLA University of Information Engineering and the Academy of Military Sciences.


The PLA is believed to have made cyber warfare a key priority in its war-fighting capabilities more than a decade ago. Among the few public announcements of its development came in a May 25, 2011 news conference by Defense Ministry spokesman Geng Yansheng, in which he spoke of developing China’s “online” army.


“Currently, China’s network protection is comparatively weak,” Geng told reporters, adding that enhancing information technology and “strengthening network security protection are important components of military training for an army.”


Unit 61398 is considered just one of many such units under the Third Department responsible for hacking, according to experts.


Greg Walton, a cyber-security researcher who has tracked Chinese hacking campaigns, said he’s observed the “Comment Crew” at work, but cites as equally active another Third Department unit operating out of the southwestern city of Chengdu. It is tasked with stealing secrets from Indian government security agencies and think tanks, together with the India-based Tibetan Government in Exile, Walton said.


Another hacking outfit believed by some to have PLA links, the “Elderwood Group,” has targeted defense contractors, human rights groups, non-governmental organizations, and service providers, according to computer security company Symantec.


It’s believed to have compromised Amnesty International’s Hong Kong website in May 2012, although other attacks have gone after targets as diverse as the Council on Foreign Relations and Capstone Turbine Corporation, which makes gas microturbines for power plants.


Civilian departments believed to be involved in hacking include those under the Ministry of Public Security, which commands the police, and the Ministry of State Security, one of the leading clandestine intelligence agencies. The MSS is especially suspected in attacks on foreign academics studying Chinese social issues and unrest in the western regions of Tibet and Xinjiang.


Below them on the hacking hierarchy are private actors, including civilian universities and research institutes, state industries in key sectors such as information technology and resources, and college students and other individuals acting alone or in groups, according to analysts, University of Maryland’s Forno said.


China’s government isn’t alone in being accused of cyber espionage, but observers say it has outpaced its rivals in using military assets to steal commercial secrets.


“Stealing secrets is stealing secrets regardless of the medium,” Forno said. “The key difference is that you can’t easily arrest such electronic thieves since they’re most likely not even in the country, which differs from how the game was played during the Cold War.”




BRAC Again

AF Magazine

Feb 26, 2013


With the sequestration deadline just days away, Air Force officials are once again urging Congress to consider more base realignments and closures.


Air Force Secretary Michael Donley said last week the Pentagon’s forthcoming Fiscal 2014 budget request, which is set to go to Congress in a few weeks, would include a request for more BRAC. “We continue to believe BRAC authority is a tool we urgently need to allow [the Defense Department] to divest excess infrastructure and meet other needs, including modernization,” said Donley on Feb. 22 at AFA’s Air Warfare Symposium in Orlando, Fla. “Given sequestration, it’s even more important for Congress to give DOD BRAC authority to pursue health care reforms that will help us control costs,” he added.


Air Combat Command boss Gen. Mike Hostage said he realizes BRAC is a “touchy topic,” but said it could be critical to ensuring that the command remains mission capable in light of the steep budget cuts that sequestration would bring. ACC is set to transition to a state of tiered readiness, which means that the command will place any unit not deployed or preparing to deploy in “dormant status,” said Hostage during a Feb. 21 interview with the Daily Report at the symposium.


“I need to close one out of every three” ACC bases, he said. In its Fiscal 2013 budget request, DOD asked for two new rounds of BRAC—one in 2013 and one in 2015—but Congress turned down the proposal.


—Amy McCullough




The sequester? Never heard of it.


Washington Post

Posted by Chris Cillizza and Aaron Blake on February 26, 2013 at 6:30 am



Just one in four Americans are following the debate over the $1.2 trillion in automatic spending cuts set to kick in on Friday very closely, according to a new Washington Post-Pew poll, numbers that serve as a reminder that although talk of the sequester is dominating the nation’s capitol, it has yet to permeate into the public at large.


Most Americans are clueless about the sequester.


Not only are most people paying very little attention to the sequester, they also have only the faintest sense of what it would do. Less than one in five (18 percent) say they understand “very well” what would happen if the sequester went into effect in the Post-Pew poll.


Those remarkably low numbers come despite the fact that the debate over the sequester has dominated Washington for much of the last month and, in the past week or so, President Obama has cranked up the direness of his warning about what it could do to the economy.


The lack of interest and knowledge about the sequester stands in contrast to the level of engagement the public showed in the last crisis — the fiscal cliff. In Pew polling done in the run-up to the cliff, 40 percent of people said they were following the negotiations “very” closely while roughly three in ten said they had a very strong understanding of what it would mean for themselves and the country if we went off the cliff.


What explains the difference between sequester and the cliff? At first glance, it appears to be the fact that, without tax increases included in the sequester, most people don’t think it will really affect them. Just 30 percent of those tested say sequestration would have a “major effect” on their own financial situation — a contrast to 43 percent who said the same about the fiscal cliff. The lack of a tax increase component in sequestration (Democrats do want some increases in revenue, but mostly through closing loopholes) is see most clearly among Republicans — with just one in five following news about the automatic cuts “very closely.” Twice as many Republicans followed the fiscal cliff battle in December very closely.


(While impossible to document via polling, we believe strongly that people have less of a sense for sequestration than they did for the fiscal cliff because it lacks a catchy name. Never underestimate the shallowness of the American public’s news consumption habits.)


The sea of numbers above should serve as a reminder that, for most Americans, the sequester doesn’t exist. All of the talk about it coming out of Washington about who to blame is lost on these people — another fight in the nation’s capitol that they don’t believe will have any actual impact in their lives.


(For what it’s worth, the poll shows that 45 percent say Republicans in Congress should be blamed for the sequester, while 32 percent blame President Obama; that’s a far less sizable edge than the 26-point blame game advantage that Obama enjoyed over congressional GOPers on the fiscal cliff.)


Whether the lack of interest and knowledge regarding the sequester will change once it actually hits later this week remains to be seen, although these numbers suggest it’s got a long way to go to even be a relevant issue for most people in the country. A very long way.





Thin Snowpack in West Signals Summer of Drought


NY Times


February 22, 2013


DENVER — After enduring last summer’s destructive drought, farmers, ranchers and officials across the parched Western states had hoped that plentiful winter snows would replenish the ground and refill their rivers, breaking the grip of one of the worst dry spells in American history. No such luck.


Lakes are half full and mountain snows are thin, omens of another summer of drought and wildfire. Complicating matters, many of the worst-hit states have even less water on hand than a year ago, raising the specter of shortages and rationing that could inflict another year of losses on struggling farms.


Reservoir levels have fallen sharply in Arizona, Colorado, New Mexico and Nevada. The soil is drier than normal. And while a few recent snowstorms have cheered skiers, the snowpack is so thin in parts of Colorado that the government has declared an “extreme drought” around the ski havens of Vail and Aspen.


“We’re worse off than we were a year ago,” said Brian Fuchs, a climatologist at the National Drought Mitigation Center.


This week’s blizzard brought a measure of relief to the Plains when it dumped more than a foot of snow. But it did not change the basic calculus for forecasters and officials in the drought-scarred West. Ranchers are straining to find hay — it is scarce and expensive — to feed cattle. And farmers are fretting about whether they will have enough water to irrigate their fields.


“It’s approaching a critical situation,” said Mike Hungenberg, who grows carrots and cabbage on a 3,000-acre farm in Northern Colorado. There is so little water available this year, he said, that he may scale back his planting by a third, and sow less thirsty crops, like beans.


“A year ago we went into the spring season with most of the reservoirs full,” Mr. Hungenberg said. “This year, you’re going in with basically everything empty.”


National and state forecasters — some of whom now end phone calls by saying, “Pray for snow” — do have some hope. An especially wet springtime could still spare the Western plains and mountains and prime the soil for planting. But forecasts are murky: They predict warmer weather and less precipitation across the West over the next three months but say the Midwest could see more rain than usual.


Water experts get more nervous with each passing day.


“We’re running out of time,” said Andy Pineda of the Northern Colorado Water Conservancy District. “We only have a month or two, and we are so far behind it’s going to take storms of epic amounts just to get us back to what we would think of as normal.”


Parts of Montana, the Pacific Northwest and Utah have benefited from a snowy winter. But across Colorado, the snowpack was just 72 percent of average as of Feb. 1, which means less water to dampen hillsides and mountains vulnerable to fire, less water for farms to use on early season crops, and less to fill lakes and reservoirs that ultimately trickle down into millions of toilets, taps and swimming pools across the state.


Heavy rains and snow have recently brought some hope to the parched states of Iowa, Minnesota and Missouri, where the drought is easing. But 55.8 percent of the United States remains locked in drought, according to the government’s latest assessments. And states like Nebraska and Oklahoma are facing precipitation deficits of as much as 16 inches.


Without damp soil, many wheat crops will have trouble growing come March and April when they should be in full bloom, and corn and soybeans could be stunted after they are planted this spring. In a year when farmers are planning another record planting, some might be forced to sow fewer seeds because there is not enough soil moisture to go around.


In southwestern Kansas, Gary Millershaski said the wheat on his 3,000 acres was as dry as it had ever been after two years of drought. But as snow fell around him, he was smiling, a guarded optimist for this year’s planting. “If we get above average rainfall from here on, we’re going to raise a wheat crop,” he said. “But what are the odds of that?”


Senator Mark Udall, Democrat of Colorado, put it this way: “Mother Nature is testing us.”


But Washington is also posing a challenge.


Mr. Udall, Senator Michael Bennet, a Democrat, and other members of Colorado’s Congressional delegation are seeking $20 million in emergency funds to help restore watersheds in Colorado ravaged by last year’s wildfires. So far, there has been little action on the measure. Western politicians are also urging the Forest Service to move more quickly to modernize the shrinking and aging fleet of tanker planes it uses to douse wildfires.


If Congress does not head off the looming across-the-board budget cuts set to take effect March 1, financing for the Forest Service’s Wildland Fire Management program will be cut by $134 million. As many as 200,000 acres — an area about the size of Kansas City, Mo. — would not be treated to remove dry brush, dead wood and other tinder for wildfires.


In dry states like Colorado, officials are already preparing for the worst. Wildfires did $538 million in damage last year, burning hundreds of homes and driving away summer tourists. As late as December, when the high country should be blanketed by snow, a 4,000-acre fire continued to burn in Rocky Mountain National Park. To some officials, it was a harbinger of longer, fiercer fire seasons that may come with climate change. “It’s just so dry here,” said Tom Grady, the emergency manager in Aspen and the surrounding county, which is already meeting to fine-tune its fire plans for the summer.


Denver Water, which serves 1.3 million people, depleted many of its reservoirs after last year’s dry winter and an unrelenting spree of 90- and 100-degree summer days. Those basins never fully recovered, and are now an average of 63 percent full. The agency has already idled one water treatment plant to conserve its reservoir supplies, and officials say they are likely to declare a Stage 2 drought, limiting when people can water their lawns.


In Northern Colorado, a combination of drought and wildfire is shutting off the spigot for scores of farmers. Cities are worried about ash and sediment flowing from the burn areas into the rivers that supply their water, so they are holding onto every drop possible this year and not selling any water to local farmers.


In 2011, the Northern Colorado city of Greeley alone leased enough water to irrigate 13,000 acres of farmland — representing millions of dollars in wages for farmhands, seed money, fertilizer sales and profits for farmers. Every year, just after midnight on Jan. 1, farmers start calling the city to sign up to lease the surplus water. This year, Greeley had to call them all back to say there was none to be had.


Eldon Ackerman, who grows sugar beets, pinto beans and alfalfa on his farm in Wellington, said he had water supplies for only about one-third of his fields. He was praying the spring snow and rains would come to save him. If they do not, he said he might have to let 1,000 acres lie fallow this year.


“There isn’t any more water to get,” Mr. Ackerman said.


John Eligon contributed reporting from Kansas City, Mo.




The coming R&D crash

Washington Post

By Brad Plumer , Updated: February 26, 2013

One of the few things Republicans and Democrats have been able to agree on in recent years is that the government should be spending more on basic scientific research — the sort of research that, in the past, has played a role in everything from mapping the human genome to laying the groundwork for the Internet.

Should the government be funding this sort of work? (AP)

“Government funding for basic science has been declining for years,” Mitt Romney wrote in his 2010 book No Apology. “It needs to grow instead.” In his most recent State of the Union address, President Obama sounded a similar note: “Now is the time to reach a level of research and development not seen since the height of the space race.”

So it’s notable that the exact opposite is, in fact, about to occur. Thanks to budget pressures and the looming sequester cuts, federal R&D spending is set to stagnate in the coming decade. The National Institutes of Health’s budget is scheduled to drop 7.6 percent in the next five years. Research programs in energy, agriculture and defense will decline by similar amounts. NASA’s research budget is on pace to drop to its lowest level since 1988.

As a result, scientists and other technology analysts are warning that the United States could soon lose its edge in scientific research — and that the private sector won’t necessarily be able to pick up the slack.

“If you look at total R&D growth, including the corporate and government side, the U.S. is now at the low end,” says Rob Atkinson, president of the Information Technology and Innovation Foundation (ITIF). “We’re seeing other countries, from Germany to Korea to China, make much bigger bets. And if that persists for long enough, it’s going to have an impact.”

So how dire is the situation, really?

Let’s start with some basic charts. Over the past decade, federal spending on R&D has grown in real terms, according to the American Association for the Advancement of Science (although it’s shrinking as a percentage of GDP). That’s been driven largely by Bush-era increases in defense and life-sciences spending:


USDA = U.S. Department of Agriculture, NSF = National Science Foundation, DOE = Department of Energy, NIH = National Institutes of Health, DOD = Department of Defense. ARRA Funding includes 2009 stimulus money for research.

At its peak in 2009, the federal government funded some 31 percent of all R&D in the country, with private firms and universities financing the rest. The array of federal programs is staggering, from semiconductor work at the Pentagon to climate-change research at NOAA to clinical trials for cancer at the National Institutes for Health. About half of the spending here is “basic” research and half “applied” research.

Yet as a recent report from ITIF explains, this landscape is set to shift now that Congress is putting strict limits on discretionary spending. If the sequester spending cuts take effect on Mar. 1, total spending on research and development will drop to 2007 levels and grow only slowly thereafter (below, black line). Federal R&D spending will decline sharply as a share of GDP:

How worrisome is this projected stagnation in federal R&D spending? A lot depends on how valuable you think government research actually is — and on that point, the debate can get surprisingly contentious.

There’s a long, long list of world-changing innovations that can be traced back to federally funded R&D over the years. The Department of Energy’s research labs spawned digital recording technology, communications satellites, and water-purification techniques. Pentagon research laid the groundwork for the Internet and GPS. The current shale-gas fracking boom couldn’t have happened without microseismic imaging techniques that were developed at Sandia National Laboratories.

But that’s not necessarily the best way to look at things. The key question here is how much of this innovation might have happened without government involvement. And as Stanford’s Roger Noll explains in this NBER essay, economists have fairly nuanced views on this.

Many economists agree that private companies tend to under-invest in very basic scientific research, since it’s hard for one firm to reap the full benefits from those discoveries. So the federal government, which now funds 60 percent of all basic research in the United States, is likely irreplaceable here. What’s more, studies have found that many types of government R&D spur private companies to conduct their own additional research. That is, the two are complementary, not substitutes.

But the situation is murkier for other forms of public R&D. Many government programs are focused on advancing commercial technologies in specific industries — and those could well be crowding out private-sector activities. What’s more, some government R&D programs are so focused on demonstrating their usefulness to Congress that they stick with “safe” research that the private sector would have done anyway.

When the Congressional Budget Office reviewed the evidence in 2007, it concluded that government-funded basic research generated “substantially positive returns.” And it found that, on the whole, government R&D helped spur additional private-sector R&D rather than displace it. Yet the CBO also noted that some types of government programs may very well be crowding out private research. Likewise, a 2007 survey by the Bureau of Labor Statistics found that the social returns for many public R&D programs were “near zero.”

“It’s not always cut-and-dried,” says Scott Wallsten, president of the Technology Policy Institute. “In theory there are certainly things that are good for society that aren’t profitable for private companies to do. Basic research especially. But when you move out from that, it sometimes becomes more questionable.”

Indeed, this is one area that has recently divided Republicans and Democrats. During the 2012 campaign, Romney heaped praise on basic research programs like ARPA-E, which funds long-shot energy research. But he criticized Obama’s support for programs that try to commercialize new technologies — such as loan guarantees for mature solar firms.

In the near future, however, this debate is moot: When the sequester takes effect on March 1, it will affect all types of R&D, regardless of type or value. In the National Institutes of Health, because of the way grants are structured, the immediate 5.3 percent sequester cuts for 2013 will mean that little new research of any type will get funded this year, explains former NIH director Elias Zahouni.

Meanwhile, there’s the international context to consider. Atkinson points out that United States is in danger of losing its spot as the undisputed world leader on R&D — both public and private. Not only is the federal government paring back its research budget, but the corporate sector isn’t making up the gap either. “In most countries,” he says, “corporate R&D is up over the past decade. Ours didn’t, it stayed stagnant.”

The causes for America’s private-sector R&D stagnation are complex, Atkinson says, ranging from impatient investors to unfavorable tax policies. But ITIF projects that the United States will soon spend less on all types of R&D as a percentage of its economy in the coming decade than countries like Australia and South Korea (though we’ll still spend a lot more in absolute terms, since our economy’s much bigger). Even China is catching up:

There are a few ways to interpret this chart. The sanguine view is that other countries are tossing more money at scientific research that will have positive spillover benefits for the entire world — including us. If China invents a cure for cancer, we all benefit.

Others worry, however, that the U.S. economy could suffer from the fact that a greater share of research is happening elsewhere. A 2012 report by the National Science Foundation, for instance, found that U.S. firms were now shifting much of their R&D work overseas. And the United States has recently developed a trade deficit in high-technology goods, after surpluses during the 1990s.

Many lawmakers seem to take the alarmist view. President Obama in particular has insisted that the United States can’t fall behind on R&D. A sample line: “We’ve got to make sure that we’ve got the best science and research in the world.”

Finding the money to do that will be difficult in an era when Congress is insisting on tight budgets. Some policymakers have tried to put forward novel approaches to R&D — like Sen. Lisa Murkowski’s (R-Alaska) idea for an “Advanced Energy Trust Fund” that would dedicate a portion of revenues from oil and gas drilling to energy research. (Obama embraced a similar idea in his State of the Union.) Other economists have suggested that the government should lean more heavily on prizes or tax credits as a way of funding innovation.

Yet many of those ideas are fairly small-bore. Getting R&D back to where it was at the height of the space race, as Obama has suggested, will either take a hefty portion of policy creativity — or a big shift in budget politics in the years ahead.

Further reading:

–The Congressional Budget Office has a good overview (pdf) of the economics of federally funded R&D, including a discussion of what works and what doesn’t.

–Elias Zahouni, who directed NIH during the Bush years, explained in this interview how the sequester would likely affect research in that agency.

–Over at Slate, Konstantin Kakaes disputed the idea that the U.S. is in a “research arms race” with China or anyone else. Worth reading as a counterpoint





Furlough Watch: Potential Agency-by-Agency Impacts of Sequestration

February 26, 2013


The across-the-board budget cuts known as sequestration now scheduled to hit in two days would have serious implications for federal workers, including mandatory unpaid furloughs for hundreds of thousands of employees, beginning in April. We have compiled a list of possible agency-by-agency effects, should Congress and President Obama fail to reach a deficit reduction agreement in time to avoid the cuts. We will update the list as more information becomes available. Please use the comment section below to let us know if you have additional information about your agency.


Agriculture Department: Food Safety and Inspection Service employees would be furloughed for approximately two weeks, the White House said in a Feb. 8 fact sheet.


Defense Department: Secretary Leon Panetta on Feb. 20 informed lawmakers that sequestration would force the Pentagon to put the “vast majority” of its 800,000 civilian workers on administrative furlough. The furloughs would begin in late April and would occur one day a week for up to 22 discontinuous work days.


Education Department: Secretary Arne Duncan testified Feb. 14 before the Senate Appropriations Committee that he expected furloughs. “The sequester would … likely require the department to furlough many of its own employees for multiple days,” he wrote in a Feb. 1 letter to the committee.” The letter did not provide an exact number of employees who would be affected.


Environmental Protection Agency: Employees would be furloughed a total of six days between April and September, according to a union official. The furlough days would break down as follows: from April 21 to June 15, each EPA employee would have to take one day of leave without pay per paid period, for four pay periods. From July 5 through Sept. 30, each employee would be required to take two furlough days.


Federal Aviation Administration: Almost all 47,000 workers would be furloughed for one-to-two days per pay period, according to Transportation Secretary Ray LaHood and FAA head Michael Huerta. Air traffic control towers at 100 airports would be closed, and midnight shifts at many smaller airports would be dropped. This could lead to 90-minute delays during peak travel times for flights to major cities, LaHood and Huerta said in their Feb. 22 letter to airline industry groups and unions.


Federal courts: 20,000 employees could be furloughed for 16 days.


Government Accountability Office: Plans to avoid furloughs, according to The Washington Post. But, the sequester would affect hiring, employee benefits and travel and contract spending, according to Feb. 26 testimony from Comptroller General Gene Dodaro.


Government Printing Office: Will save money by scaling back technology and other investments, but “if necessary, a furlough of GPO’s workforce may also be implemented,” acting Public Printer Davita Vance-Cook testified before a House subcommittee on Feb. 26.


Homeland Security Department: Law enforcement personnel would face furloughs of up to 14 days, DHS Secretary Janet Napolitano said in a Feb. 13 letter to House lawmakers. She did not provide a specific number of employees affected but said it would be a “significant portion” of the department’s front-line law enforcement staff.


Housing and Urban Development: Secretary Shaun Donovan told the Senate Appropriations Committee furloughs could be necessary. “Specific plans are still being reviewed and finalized, but we believe that furloughs or other personnel actions may well be required to comply with cuts mandated by sequestration,” he said in Feb. 14 testimony.


Interior Department: Secretary Ken Salazar has warned about furloughs of thousands of employees. The National Parks Service plans to furlough permanent staff if other cost-savings measures fail.


Justice Department: Would furlough hundreds of federal prosecutors, according to the White House. FBI Director Robert Mueller has said $550 million in cuts to the bureau “would have the net effect of cutting 2,285 employees — including 775 agents — through furloughs and a hiring freeze,” according to the FBI Agents Association.


NASA: 20,500 contractors could lose their jobs. The agency has not notified federal employees of any furlough possibility, but a spokesman told Government Executive on Feb. 25 that “all possible effects” of sequestration are “still being assessed.”


Nuclear Regulatory Commission: Has ruled out furloughs or salary cuts.


Small Business Administration: No furloughs; will rely on an anticipated reduction in a certain type of loan to cut costs, according to an Associated Press report.


Smithsonian: Does not anticipate furloughs.


Social Security Administration: Remains “uncertain” about reducing its employees’ hours, which would save about $25 million per furlough day, according to a Feb. 1 letter to Congress. It will instead try to reach the reduced budget level through attrition.


Veterans Affairs Department: Mostly exempt from sequestration.







NIST formally asks for Cyber security ideas

Tue, 2013-02-26 01:33 PM

By: Mark Rockwell


The National Institute of Standards and Technology (NIST) formally issued a Request for Information (RFI) on developing voluntary industry standards to protect against Cyber attacks and intrusions.

NIST issued the RFI in the Federal Register on Feb. 26, marking its first step in a year-long process that will develop a Cyber security framework, mandated by president Obama’s Executive Order on Cyber security. The president issued the order on Feb. 12 aiming to protect critical infrastructure such as power plants and financial, transportation and communications systems. Congress is also pushing for legislation that would extend more protections, but those rules are still being hammered out.

The president’s framework will set voluntary standards and best practices to guide critical infrastructure and other industries in reducing cyber risks to vital networks and computers.

NIST has also set its first public meeting and workshop on the issue at its Gaithersburg, MD, headquarters on April 3.

In its formal announcement, NIST requested ideas, recommendations and other input from critical infrastructure owners and operators, federal agencies, state and local governments, standards-setting organizations, and other interested parties about current risk management practices; use of frameworks, standards, guidelines and best practices; specific industry practices and more. Specific questions are included in the RFI.

NIST said comments are due by 5 p.m., April 8, and should be sent to with the subject line: “Developing a Framework to Improve Critical Infrastructure Cybersecurity.”




Pentagon F-35 program chief lashes Lockheed, Pratt



Feb 27, 2013 5:24am EST


By Jane Wardell


AVALON, Australia (Reuters) – The Pentagon program chief for the F-35 warplane slammed its commercial partners Lockheed Martin (LMT.N: Quote, Profile, Research, Stock Buzz) and Pratt & Whitney on Wednesday, accusing them of trying to “squeeze every nickel” out of the U.S. government and failing to see the long-term benefits of the project.


U.S. Lieutenant-General Christopher Bogdan made the comments during a visit to Australia, where he has sought to convince lawmakers and generals to stick to a plan to buy 100 of the jets, an exercise complicated by the second grounding of the plane this year and looming U.S. defense cuts.


Pratt & Whitney, a unit of United Technologies Corp (UTX.N: Quote, Profile, Research, Stock Buzz), is sole supplier of engines to the $396 billion F-35, or Joint Strike Fighter. Lockheed Martin provides the body of the radar-evading jet, the most expensive combat aircraft in history.


“What I see Lockheed Martin and Pratt & Whitney doing today is behaving as if they are getting ready to sell me the very last F-35 and the very last engine and are trying to squeeze every nickel out of that last F-35 and that last engine,” Bogdan told reporters at the Australian International Airshow in southern Victoria state.


“I want them both to start behaving like they want to be around for 40 years,” he added. “I want them to take on some of the risk of this program, I want them to invest in cost reductions, I want them to do the things that will build a better relationship. I’m not getting all that love yet.”


A Lockheed Martin executive at the airshow declined to comment when reached by Reuters, saying he was unaware of Bogdan’s comments. Executives from Pratt & Whitney could not immediately be reached for comment.


Bogdan caused a stir shortly after joining the F-35 program last August when he described the relationship between the government and Lockheed Martin as the worst he’d ever seen. There had been little improvement since then, he said.


“Are they getting better? A little bit,” he said. “Are they getting better at a rate I want to see them getting better? No, not yet.”


If the project stays on track, Pratt & Whitney will eventually provide 4,000 engines and Lockheed Martin 3,000 planes.


The Pentagon plans to buy 2,443 of the warplanes in the coming decades, although many analysts believe U.S. budget constraints and deficits will reduce that number.


Australia, a close American ally, is considering doubling its fleet of 24 Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) F/A-18 Super Hornets amid delays and setbacks in the F-35 project. That means Canberra could buy far fewer F-35s than initially planned.




Bogdan was also critical of what he suggested were leaks from Pratt & Whitney’s camp about the engine issue, which led the Pentagon to suspend F-35 flights last Friday.


Two sources told Reuters that Pratt & Whitney is 99 percent sure the fan blade problem that grounded the jets was not caused by high-cycle fatigue, which could force a costly design change, and the aircraft could be flying again within the week.


“Until all those tests are done and I see the results, I don’t know what’s going on,” Bogdan said. “However … my gut would tell me it’s on the spectrum of the minor side – 99 percent is bold, flying next week is bold.”


Bogdan also gave the example of taking six months to close a deal with Pratt & Whitney for engines on its fifth bloc of jets, shortly after General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) had been dropped as a second supplier of engines for the program, leaving Pratt & Whitney as sole supplier for the next 40 years.


“Now, you would think a company like Pratt & Whitney that was just given the greatest Christmas gift you could ever, ever get for a company would act a little differently,” Bogdan said.


Bogdan is flying back to the United States this weekend, just in time to hear about the future of U.S. military budgets, which are slated to be cut by nearly $500 billion over the next decade, an amount which could double unless Congress acts in the next week to avert spending reductions known as “sequestration”.


Bogdan said he was confident the F-35 program would remain on track and on budget if he was given the discretion to deal with any cuts.


The risk is that money is cut from the $6 billion set aside for the development program by the end of October next year.


“I need every penny of that $6 billion to get over the finish line,” Bogdan said. “If they take money out of development something’s going to have to give. I’m either going to have to push the program out or I’m going to have to shed capability.”


Budget cuts aside, Bogdan said he was confident of bringing the cost of each plane down to around $90 million by 2013, compared to around $120 million now.


Budget cuts have already forced Italy to scale back its F-35 orders, and Turkey has delayed its purchases by two years. Orders from Japan and Israel have buoyed the project, and additional Israeli orders are expected in 2013.


Lockheed is building three different models of the F-35 for the U.S. military and eight countries that helped pay for its development: Britain, Canada, Italy, Turkey, Denmark, the Netherlands, Australia and Norway.



Message to the Department from Secretary of Defense Chuck Hagel

As Delivered by Secretary of Defense Chuck Hagel, The Pentagon, Wednesday, February 27, 2013



To all Department of Defense personnel:


Earlier today I was privileged to take the oath of office to become the 24th Secretary of Defense. I am humbled by and grateful for the opportunity that President Obama and the Congress have given me to once again serve our nation.


I am most especially grateful for the opportunity to work with all of you. Every day you work to defend America. The noble cause of your profession, your individual sacrifices, and your service inspire us all.


As your leader, I will always do my best for our country and for all of you – and your families. As with my friends and predecessors Leon Panetta and Bob Gates, your safety, success, and welfare will always be at the forefront of my decisions. I will build on the strong foundation of teamwork built by Secretaries Gates and Panetta, as we work together. Leadership is a team business.


I have long believed that America must maintain the strongest military on earth; we must lead the international community, with a steady and sure hand to confront threats and challenges together as we work closely with our allies and partners to advance our common interests and build a more hopeful world. We must use all tools of American power to protect our citizens and our interests; and America must engage – not retreat – in the world, but engage wisely.


This is a defining time for the United States military and for our nation. We are emerging from more than a decade of war, yet the threats facing us are no less dangerous or complicated.


Despite these challenges, I believe an historic opportunity exists to help build a safer, more prosperous, and more secure world. But to achieve this goal we must ensure that we are ready, trained and equipped to fulfill our role of protecting the country and standing firm against aggression. To that end, the strength, well-being and readiness of our all-volunteer force will be my top priority. This will require 21st century agility and flexibility. We must take care of our people, and working with the VA and other institutions, I will ensure that you and your families get the health care, job opportunities, benefits, and education you have all earned and deserve. My life and career have been about helping our service members, veterans and their families. One of my proudest accomplishments in the U.S. Senate was coauthoring with my fellow Vietnam veteran and friend, Jim Webb, the Post-9/11 G.I. Bill.


As I assume this office, I am mindful of the sacrifices that you and your families have made for more than a decade, and continue to make every day. In Afghanistan, where 66,000 of our troops remain in a tough fight, we have a clear and achievable objective to fully transition security responsibility to the Afghan National Security Forces by the end of 2014. As you know, Afghan forces will step into the lead for security operations across the country this spring, and over the next year another 34,000 of our troops will come home.


As we turn the page on more than a decade of grinding conflict, we must broaden our attention to future threats and challenges. That means continuing to increase our focus on the Asia-Pacific region, reinvigorating historic Alliances like NATO, and making new investments in critical capabilities like cyber.


In order to accomplish our mission, we also must make wise budget decisions prioritizing our interests and requirements. Like each of you, I am greatly concerned about the impact that the looming round of automatic budget cuts will have on you and your families, and on military readiness. As someone who has run businesses, I know that severe budget uncertainty limits our ability and flexibility to manage and plan and use taxpayer dollars in the most efficient manner possible. I will work within the Administration and with Congress to help resolve this uncertainty in a way that does not break America’s commitment to you, your families, and our veterans.


As I begin my time here at the Department I want you to know that I recognize the immense responsibility that I have, and will work hard every day to fulfill my duties as Secretary of Defense as honestly and effectively as I know how. You are the greatest force for good in the world. It is the highest honor to serve alongside you. I am proud to be part of your team. Thank you for your commitment and dedication to our country.



Sequestration break for Defense?

Washington Post

By Walter Pincus

Feb 20, 2013


The Defense Department could have some wiggle room to avoid major cuts in readiness as the sequester looms, according to a recent Congressional Research Service analysis by Amy Belasco, a specialist in U.S. defense policy and budgets.


Congress also could soften the impact of the $46 billion in military spending cuts required over the next seven months if lawmakers agree on legislation that expands the amount of funds that can be transferred among Defense accounts. In addition, Congress could allow new procurement starts and increases in weapon production rates.


About $22 billion would have to come from the military services’ operations and maintenance (O&M) account, which pays for readiness-related activities such as training.


Because cuts would have to be applied in the last seven months of the fiscal year, it would require an average reduction of 17.5 percent to each O&M program. Such cuts, the Joint Chiefs of Staff wrote to Congress, could put the United States “on the brink of creating a hollow force.”


The sequester deadline, March 1, is eight days away, but Congress appears unable to make the compromises needed for a realistic solution to the nation’s fiscal problems. Yet, President Obama and House and Senate Republicans seem to agree that the Pentagon, if not the rest of the government, ought to get some immediate relief.


If there’s no remedy approved before March 1, there certainly could be one worked out before March 27, when the fiscal 2013 continuing appropriations resolution (fiscal 2013 CR) runs out. Before that date, Congress can pass a full-year fiscal 2013 defense appropriations bill, which appears unlikely, or a new fiscal 2013 CR that would keep the government running through Sept. 30, the end of the fiscal year.


So far, however, Democrats and Republicans are far apart on how to make up any major funding relief provided to the Defense Department, whether by cutting more non-defense spending or providing additional revenue.


What’s possible, however, is at least giving the Pentagon authority to shift funds, which Defense Secretary Leon E. Panetta has sought for more than a year.


To understand Belasco’s analysis, you must realize that the fiscal 2013 CR for the most part linked this year’s current spending levels to those of the fiscal 2012 appropriations law.


According to Belasco, the fiscal 2012 appropriations law specified that in the personnel and operations and maintenance accounts, “there would be considerable more flexibility to allocate O&M sequester reductions applied at the account level” than the program-specific reductions for procurement and research and development.


Applying that approach to the fiscal 2013 CR, Belasco says, gives the Defense Department — and the individual services — “discretion to allocate funding within O&M accounts.” That is important because some O&M funding accounts in fiscal 2012 were lower than funds originally sought for fiscal 2013.


She writes that the Army has the greatest mismatch, a gap this year of $6 billion, because of the reset costs of forces returning from Afghanistan. However, Belasco says, that may be softened because the Army may have overestimated the funds needed to cover inflation and a requirement for a civilian pay increase that has not taken place. The Army may gain another $2.6 billion with the transfer of funds from the overseas war account to the base budget that also took place in fiscal 2012.


Overall, Belasco suggested that the Pentagon can limit “cuts to readiness-related O&M operating forces to 10 percent to 12 percent, about half the level that the Joint Chiefs warned would be dangerous in its January letter to Sen. Carl Levin (D-Mich.), chairman of the Senate Armed Services Committee.”


Her analysis is based on Defense implementing a hiring freeze, furloughing civilian workers for 22 days over seven months, and cutting recruiting, administrative and servicewide base support, including contractors, which could reach 20 percent.


Procurement offers another opportunity. Under the fiscal 2013 CR, new starts and increases in production rates other than those provided for in fiscal 2012 are prohibited. Funding mismatches also have been created because of how major weapons systems were handled last year.


For example, Belasco notes that there was $581 million more in fiscal 2012 for Army weapons and tracked vehicles such as tanks than the Army wanted in this year’s budget. Under the fiscal 2013 CR, that large amount of money is available, but only for those kinds of weapons. On the other hand, the Army is short some $481 million for its fiscal 2013 aircraft request because its fiscal 2012 amount was that much lower than what the Army wanted for this year. The Air Force has $1.9 billion more for aircraft this year than it wanted because its fiscal 2012 amount was that much greater than this year’s request.


Sequester would cut these excesses: the Army’s down to $404 million, the Air Force to $829 million.


The services would benefit if Congress granted authority to transfer those funds, and permit new starts or increasing production numbers.


The Army, for example, cannot go ahead this year with planned procurement of 17 upgraded Paladin howitzers for $206 million because none were purchased in fiscal 2012. Under the fiscal 2013 CR, the Air Force, if authorized, could use some of its excess to increase funding of the new KC-46 tanker development program. It has $877 million, the amount it got in fiscal 2012 but had planned to increase to $1.8 billion in fiscal 2013. If it doesn’t get additional funds, the Air Force will delay this high-priority program for months.


I expect Congress to continue kicking the can down the road when it comes to solving the nation’s basic fiscal problems, but I have no doubt that lawmakers are going to find a way to ease, if not erase, Defense’s sequester.


If they do so for no other reason, it would be a fitting and perfect going away gift for Panetta.




Kerry defends liberties, says Americans have “right to be stupid”


Tue, Feb 26 2013


BERLIN (Reuters) – Secretary of State John Kerry offered a defense of freedom of speech, religion and thought in the United States on Tuesday telling German students that in America “you have a right to be stupid if you want to be.”


“As a country, as a society, we live and breathe the idea of religious freedom and religious tolerance, whatever the religion, and political freedom and political tolerance, whatever the point of view,” Kerry told the students in Berlin, the second stop on his inaugural trip as secretary of state.


“People have sometimes wondered about why our Supreme Court allows one group or another to march in a parade even though it’s the most provocative thing in the world and they carry signs that are an insult to one group or another,” he added.


“The reason is, that’s freedom, freedom of speech. In America you have a right to be stupid – if you want to be,” he said, prompting laughter. “And you have a right to be disconnected to somebody else if you want to be.


“And we tolerate it. We somehow make it through that. Now, I think that’s a virtue. I think that’s something worth fighting for,” he added. “The important thing is to have the tolerance to say, you know, you can have a different point of view.”


Kerry made the comments on his first foreign trip since becoming secretary of state on February 1. After one-night stops in London and Berlin, he visits Paris, Rome, Ankara, Cairo, Riyadh, Abu Dhabi and Doha before returning to Washington on March 6.


While speaking to the students and earlier to U.S. diplomats, Kerry reminisced about the time he spent in Berlin in the 1950s as the intrepid son of an American diplomat and retold a story of sneaking across to East Berlin with his bike.


“I used to have great adventures. My bicycle and I were best friends. And I biked all around this city. I remember biking down Kurfuerstendamm and seeing nothing but rubble. This was in 1954 … the war was very much still on people’s minds,” he told the diplomats, referring to West Berlin’s main shopping avenue.


“One day, using my diplomatic passport, I biked through the checkpoint right into the east sector and noticed very quickly how dark and unpopulated (it was) and sort of unhappy people looked,” he added, saying it left an impression “that hit this 12-year-old kid.”


“I kind of felt a foreboding about it and I didn’t spend much time. I kind of skedaddled and got back out of there and went home and proudly announced to my parents what I had done and was promptly grounded and had my passport pulled,” he added.


“As a 12-year-old, I saw the difference between East and West,” he later told the students. “I never made another trip like that. But I have never forgotten it. And now, it’s vanished, vanished.”




(Reporting by Arshad Mohammed; Editing by Jon Hemming)


Budget Alert: ‘Peace Dividend’ Has Already Been Spent


By DAVID FRANCIS, The Fiscal Times

February 27, 2013


In numerous speeches, President Obama has tried to sell Americans on the idea that the peace dividend, or the amount saved by ending wars and cutting the Defense Department budget, would invigorate the American economy.


In his speech at the Democratic National Convention in Charlotte last year, Obama said the hundreds of billions of dollars spent to fight in Iraq and Afghanistan would now be used to rebuild American infrastructure and create new jobs. He’s repeated similar claims in speeches he’s made since the convention.


“I’ll use the money we’re no longer spending on war to pay down our debt and put more people back to work — rebuilding roads and bridges, schools and runways,” Obama said last September. “After two wars that have cost us thousands of lives and over a trillion dollars, it’s time to do some nation-building right here at home.”



President George H.W. Bush and British Prime Minister Margaret Thatcher first used the term peace dividend at the end of the Cold War, when the fall of the Berlin Wall allowed each nation to concentrate on making butter, not guns. In the United States, the dividend paid off, as the economy roared back in the late 1990s.



The peace dividend anticipated from the most recent U.S. wars will be hard to find because of the way money was spent in Iraq and Afghanistan, and how the military is structured, experts say. Just because money is not being spent by the Pentagon does not mean that it can be spent by other agencies to create jobs or improve infrastructure.


“You can’t look at it from the point of view of the United States having more to spend,” said Jacob Stokes, a research associate at the Center for New American Security. “That’s just not true.”


It’s accurate to say that defense spending is going to be cut by nearly $500 billion in the coming years. But the money being cut did not originally come out of a U.S. savings account. The vast majority of what we spent to finance Iraq and Afghanistan was borrowed.


So unless the White House plans to continue to borrow money at the clip it did to finance two wars, there won’t be any new money to fund the infrastructure programs Obama is touting.


According to Linda Bilmes, a professor at Harvard’s Kennedy School of Government, some of the planned cuts simply will not be able to occur.



“We’ve made so many decisions over the last 10 years that have made structural changes in the defense budget,” she said. Costs related to those decisions are “rising very fast and will continue to grow so rapidly that the peace dividend won’t materialize.”


Military leaders told a Congressional subcommittee Tuesday that the spending cuts would put the country at risk because the Pentagon would be unable to combat all threats. But according to Bilmes, the areas where the Pentagon is most stressed deal with soldier benefits and deferred maintenance, not weapons systems or troop readiness.


It used to be, “join the Army and get a college education.” Now, it’s “get a deal on health insurance.” The cost of Tricare, DOD’s health plan, is expected to rise dramatically in the coming years. In 2001, military healthcare spending accounted for just $19 billion. By 2012 that number had increased to $52.2 billion. A report by the Center for American Progress estimates that the Pentagon will spend $63.9 billion by 2015.




These expenditures are occurring as Tricare’s insurance rates for retired military families have increased annually from $600 to $820. For enlisted men and women, annual fees increase from $230 to $269.28 for individuals, and to from $460 for $538.56 families. Given these dirt-cheap rates, it’s no surprise that the number of people the Defense Department insures is increasing.


“We saw Tricare membership accelerating as the Obamacare mandates kick in,” she said. Soldiers and their families “will take up Tricare as it turns out to be cheaper than getting health care through the open market or through state plans.”



There are also costs related to soldier pay. In 2004 and 2005, the Bush administration adjusted military pay scales higher as part of an effort to increase recruiting. The Congressional Budget Office found that military pay outpaced the income growth in the private sector by more than 25 percent in the last ten years. Because Congress approved these increases, lawmakers must repeal them as well.


“The Pentagon has tried to get [the pay increases] rolled back but Congress has not been willing and is unlikely to be willing,” she said.


Bilmes also said there is growing pressure to provide long-term care for war veterans that serve less than the 20 years required to receive health care as part of a retirement plan.


“There’s a lot of pressure to change the structure of the pension plan so that it benefits Afghan and Iraq vets,” she said. “This will add another layer of cost.”


Lastly, there are costs related to maintenance. Equipment used in the war needs to be repaired or replaced. Until this equipment is evaluated, there is no way to estimate how much this will cost.


Stokes added that there are procurement requirements looming. Many of the weapons used to fight in Iraq and Afghanistan are relics of the Reagan era, and will need to be replaced. And as the F-35 fighter program proves, acquiring new weapons can be a costly experience that lasts for decades.


“Too much of a peace dividend means you’re not investing in the future technologies that you need,” he said. “At the same time, if you do the spending cuts the right way, you can do it in a way that keeps the country safe.”


In numerous speeches, President Obama has tried to sell Americans on the idea that the peace dividend, or the amount saved by ending wars and cutting the Defense Department budget, would invigorate the American economy.



In his speech at the Democratic National Convention in Charlotte last year, Obama said the hundreds of billions of dollars spent to fight in Iraq and Afghanistan would now be used to rebuild American infrastructure and create new jobs. He’s repeated similar claims in speeches he’s made since the convention.


“I’ll use the money we’re no longer spending on war to pay down our debt and put more people back to work — rebuilding roads and bridges, schools and runways,” Obama said last September. “After two wars that have cost us thousands of lives and over a trillion dollars, it’s time to do some nation-building right here at home.”



The Fiscal Times FREE Newsletter


President George H.W. Bush and British Prime Minister Margaret Thatcher first used the term peace dividend at the end of the Cold War, when the fall of the Berlin Wall allowed each nation to concentrate on making butter, not guns. In the United States, the dividend paid off, as the economy roared back in the late 1990s.



The peace dividend anticipated from the most recent U.S. wars will be hard to find because of the way money was spent in Iraq and Afghanistan, and how the military is structured, experts say. Just because money is not being spent by the Pentagon does not mean that it can be spent by other agencies to create jobs or improve infrastructure.


“You can’t look at it from the point of view of the United States having more to spend,” said Jacob Stokes, a research associate at the Center for New American Security. “That’s just not true.”


It’s accurate to say that defense spending is going to be cut by nearly $500 billion in the coming years. But the money being cut did not originally come out of a U.S. savings account. The vast majority of what we spent to finance Iraq and Afghanistan was borrowed.


So unless the White House plans to continue to borrow money at the clip it did to finance two wars, there won’t be any new money to fund the infrastructure programs Obama is touting.


According to Linda Bilmes, a professor at Harvard’s Kennedy School of Government, some of the planned cuts simply will not be able to occur.



“We’ve made so many decisions over the last 10 years that have made structural changes in the defense budget,” she said. Costs related to those decisions are “rising very fast and will continue to grow so rapidly that the peace dividend won’t materialize.”


Military leaders told a Congressional subcommittee Tuesday that the spending cuts would put the country at risk because the Pentagon would be unable to combat all threats. But according to Bilmes, the areas where the Pentagon is most stressed deal with soldier benefits and deferred maintenance, not weapons systems or troop readiness.


It used to be, “join the Army and get a college education.” Now, it’s “get a deal on health insurance.” The cost of Tricare, DOD’s health plan, is expected to rise dramatically in the coming years. In 2001, military healthcare spending accounted for just $19 billion. By 2012 that number had increased to $52.2 billion. A report by the Center for American Progress estimates that the Pentagon will spend $63.9 billion by 2015.




These expenditures are occurring as Tricare’s insurance rates for retired military families have increased annually from $600 to $820. For enlisted men and women, annual fees increase from $230 to $269.28 for individuals, and to from $460 for $538.56 families. Given these dirt-cheap rates, it’s no surprise that the number of people the Defense Department insures is increasing.


“We saw Tricare membership accelerating as the Obamacare mandates kick in,” she said. Soldiers and their families “will take up Tricare as it turns out to be cheaper than getting health care through the open market or through state plans.”



There are also costs related to soldier pay. In 2004 and 2005, the Bush administration adjusted military pay scales higher as part of an effort to increase recruiting. The Congressional Budget Office found that military pay outpaced the income growth in the private sector by more than 25 percent in the last ten years. Because Congress approved these increases, lawmakers must repeal them as well.


“The Pentagon has tried to get [the pay increases] rolled back but Congress has not been willing and is unlikely to be willing,” she said.


Bilmes also said there is growing pressure to provide long-term care for war veterans that serve less than the 20 years required to receive health care as part of a retirement plan.


“There’s a lot of pressure to change the structure of the pension plan so that it benefits Afghan and Iraq vets,” she said. “This will add another layer of cost.”


Lastly, there are costs related to maintenance. Equipment used in the war needs to be repaired or replaced. Until this equipment is evaluated, there is no way to estimate how much this will cost.


Stokes added that there are procurement requirements looming. Many of the weapons used to fight in Iraq and Afghanistan are relics of the Reagan era, and will need to be replaced. And as the F-35 fighter program proves, acquiring new weapons can be a costly experience that lasts for decades.


“Too much of a peace dividend means you’re not investing in the future technologies that you need,” he said. “At the same time, if you do the spending cuts the right way, you can do it in a way that keeps the country safe.”






Names Emerging for U.S. Service Secretary, OSD Positions


Defense News

February 27, 2013



Now that Chuck Hagel has been confirmed and sworn in as U.S. defense secretary, names are emerging for who might become his top lieutenants as service secretaries and undersecretaries.


Carol DiBattiste and Sheila Cheston, lawyers who served in senior Pentagon posts during the Clinton administration, have emerged as candidates to become Air Force secretary.


The two women have had their names come to light as President Obama has come under fire for a lack of diversity among his nominees and appointees for top administration posts.


The nomination and confirmation of a female service secretary would be significant. Sheila Widnall, who served as Air Force secretary from August 1993 to October 1997, is the only woman to serve as a secretary of a military service.


For months, F. Whitten “Whit” Peters had been the only person said to be a candidate for Air Force secretary. Peters served as the Air Force secretary in the Clinton administration.


In recent weeks, DiBattiste and Cheston have been mentioned in Air Force circles as strong candidates to replace Michael Donley, a George W. Bush administration holdover who has served as Air Force secretary since October 2008. Donley is expected to step down this spring, according to defense sources.


DiBattiste is general counsel and chief administrative officer of online retailer Geeknet. She served as Air Force undersecretary from 1999 to 2001.


Cheston is currently a corporate vice president and general counsel for Northrop Grumman and served as Air Force general counsel from 1995 to 1998.


In the other services, Navy Secretary Ray Mabus is expected to remain in his current position, as Obama begins his second term.


Army Secretary John McHugh is expected to step down at some point during Obama’s second term, according to defense sources. Joseph Westphal, the current Army undersecretary, has been mentioned as a candidate to become secretary.


There are also several high-profile vacancies within the Office of the Secretary of Defense.


The undersecretary of personnel and readiness will play a major role, particularly if the Obama administration puts forth widespread personnel and benefits reforms.


Jessica Wright has been filling this position in an acting capacity since January. Erin Conaton stepped down as the undersecretary billet in December, citing a desire to return to personal life.


DoD also needs a top lawyer. Jeh Johnson stepped down late last year after serving as DoD’s general counsel since 2009. Robert Taylor, the No. 2 lawyer at DoD, is currently Pentagon’s acting general counsel.


Another vacant position is the assistant secretary of defense for research and engineering. The position, which reports to the Pentagon’s acquisition chief, has been vacant since Zachary Lemnios stepped down in November 2012.



Google’s Sergey Brin rips smartphones, shows off Glass

Brin calls smartphones ‘emasculating’ as company looks for thousands of ‘explorers’ to test the digitized eyewear


Sharon Gaudin

February 28, 2013 (Computerworld)


Sergey Brin, Google co-founder and head of the company’s Glass project, said the computerized eyeglasses are more masculine than smartphones.



Brin wore the Glass device as he spoke at a TED conference in Long Beach, Calif., on Wednesday. He made it clear that his vision for the future of search is that people won’t have to make queries or disconnect from personal interactions to get the information they need.


“When we started Google 15 years ago, my vision was that information would come to you as you need it,” said Brin, according to a TED blog. “You wouldn’t have to search query at all… But for now, we get information by disconnecting from other people, looking down into our smartphone.”


Brin isn’t comfortable with staring down into a smartphone screen.


“Is this the way you’re meant to interact with other people?” he asked conference attendees. “Is the future of connection just people walking around hunched up, looking down, rubbing a featureless piece of glass? It’s kind of emasculating. Is this what you’re meant to do with your body?”


Brin talked about Glass and the future of digital connectivity on the same day that Google closed the application period for testing the wearable computers. The company on Feb. 20 announced it was looking for Glass “explorers” and asked applicants to tell how they would use the computerized glasses in 50 words or less.


Google on Thursday declined to say how many people applied to be in the first test group. However, a Google spokesman said the company is looking for several thousand explorers. The spokesman did not comment on when the first explorers will be announced.


Brin, during his talk, referred to the first explorers as “a few early, bleeding-edge adopters.”


Those applicants, who must be over 18 and live in the U.S., need to be ready to pay up for being an early adopter. Google said the first explorers will need to pay $1,500 plus tax for the glasses, along with travel expenses to attend a special “pick-up experience” in New York, San Francisco or Los Angeles.


When Google called for explorer applications, the company also released a video showing people using the glasses while skydiving, dancing, playing with their children and riding a roller coaster.


The video also shows off the Glass interface, which is a translucent pane on the right eye glass that shows options for taking photos, shooting videos, getting directions, sharing, search and showing maps with graphic overlays.


The glasses, which Google noted are now called Glass instead of Google Glass, also are designed to enable users to activate all these options with voice control.

February 23 2013




Report Fingers Chinese Military Unit in US Hack Attacks

ABC News

By LEE FERRAN (@leeferran)

Feb. 19, 2013

Virginia-based cyber security firm has released a new report alleging a specific Chinese military unit is likely behind one of the largest cyber espionage and attack campaigns aimed at American infrastructure and corporations.

In the report, released today by Mandiant, China’s Unit 61398 is blamed for stealing “hundreds of terabytes of data from at least 141 organizations” since 2006, including 115 targets in the U.S. Twenty different industrial sectors were targeted in the attacks, Mandiant said, from energy and aerospace to transportation and financial institutions.

Mandiant believes it has tracked Unit 61398 to a 12-story office building in Shanghai that could employee hundreds of workers.

“Once [Unit 61398] has established access [to a target network], they periodically revisit the victim’s network over several months or years and steal broad categories of intellectual property, including technology blueprints, proprietary manufacturing processes, test results, business plans, pricing documents, partnership agreements, and emails and contact lists from victim organizations’ leadership,” the report says.

The New York Times, which first reported on the Mandiant paper Monday, said digital forensic evidence presented by Mandiant pointing to the 12-story Shangai building as the likely source of the attacks has been confirmed by American intelligence officials. Mandiant was the firm that The Times said helped them investigate and eventually repel cyber attacks on their own systems in China last month.

The Chinese government has repeatedly denied involvement in cyber intrusions and Chinese Foreign Ministry spokesperson Hong Lei said today that the claims in the Mandiant report were unsupported, according to a report by The Associated Press.

“To make groundless accusations based on some rough material is neither responsible nor professional,” he reportedly said.

Mandiant’s report was released a week after President Obama said in his State of the Union address that America must “face the rapidly growing threat from cyber attack.”

“We know hackers steal people’s identities and infiltrate private e-mail. We know foreign countries and companies swipe our corporate secrets. Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions, and our air traffic control systems. We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy,” he said.

Though Obama did not reference China or any country specifically, U.S. officials have previously accused the Asian nation of undertaking a widespread cyber espionage campaign.

Referring to alleged Chinese hacking in October 2011, House Intelligence Committee Chairman Rep. Mike Rogers (R-Mich.) said in an open committee meeting that he did not believe “that there is a precedent in history for such a massive and sustained intelligence effort by a government agency to blatantly steal commercial data and intellectual property.”

Rogers said that cyber intrusions into American and other Western corporations by hackers working on behalf of Beijing — allegedly including attacks on corporate giants like Google and Lockheed Martin — amounted to “brazen and widespread theft.”

“The Chinese have proven very, very good at hacking their way into very large American companies that spend a lot of money trying to protect themselves,” cyber security expert and ABC News consultant Richard Clarke said in an interview last week.


A Chinese Hacker’s Identity Unmasked

By Dune Lawrence and Michael Riley on February 14, 2013


Joe Stewart’s day starts at 6:30 a.m. in Myrtle Beach, S.C., with a peanut butter sandwich, a sugar-free Red Bull, and 50,000 or so pieces of malware waiting in his e-mail in-box. Stewart, 42, is the director of malware research at Dell SecureWorks, a unit of Dell (DELL), and he spends his days hunting for Internet spies. Malware is the blanket term for malicious software that lets hackers take over your computer; clients and fellow researchers constantly send Stewart suspicious specimens harvested from networks under attack. His job is to sort through the toxic haul and isolate anything he hasn’t seen before: He looks for things like software that can let hackers break into databases, control security cameras, and monitor e-mail.

Within the industry, Stewart is well-known. In 2003 he unraveled one of the first spam botnets, which let hackers commandeer tens of thousands of computers at once and order them to stuff in-boxes with millions of unwanted e-mails. He spent a decade helping to keep online criminals from breaking into bank accounts and such. In 2011, Stewart turned his sights on China. “I thought I’d have this figured out in two months,” he says. Two years later, trying to identify Chinese malware and develop countermeasures is pretty much all he does.

Computer attacks from China occasionally cause a flurry of headlines, as did last month’s hack on the New York Times (NYT). An earlier wave of media attention crested in 2010, when Google (GOOG) and Intel (INTC) announced they’d been hacked. But these reports don’t convey the unrelenting nature of the attacks. It’s not a matter of isolated incidents; it’s a continuous invasion.

Malware from China has inundated the Internet, targeting Fortune 500 companies, tech startups, government agencies, news organizations, embassies, universities, law firms, and anything else with intellectual property to protect. A recently prepared secret intelligence assessment described this month in the Washington Post found that the U.S. is the target of a massive and prolonged computer espionage campaign from China that threatens the U.S. economy. With the possible exceptions of the U.S. Department of Defense and a handful of three-letter agencies, the victims are outmatched by an enemy with vast resources and a long head start.

Stewart says he meets more and more people in his trade focused on China, though few want that known publicly, either because their companies have access to classified data or fear repercussions from the mainland. What makes him unusual is his willingness to share his findings with other researchers. His motivation is part obsession with solving puzzles, part sense of fair play. “Seeing the U.S. economy go south, with high unemployment and all these great companies being hit by China … I just don’t like that,” he says. “If they did it fair and square, more power to them. But to cheat at it is wrong.”


Stewart tracks about 24,000 Internet domains, which he says Chinese spies have rented or hacked for the purpose of espionage. They include a marketing company in Texas and a personal website belonging to a well-known political figure in Washington. He catalogs the malware he finds into categories, which usually correspond to particular hacking teams in China. He says around 10 teams have deployed 300 malware groups, double the count of 10 months ago. “There is a tremendous amount of manpower being thrown at this from their side,” he says.

Investigators at dozens of commercial security companies suspect many if not most of those hackers either are military or take their orders from some of China’s many intelligence or surveillance organizations. In general, they say the attacks are too organized and the scope too vast to be the work of freelancers. Secret diplomatic cables published by WikiLeaks connected the well-publicized hack of Google to Politburo officials, and the U.S. government has long had classified intelligence tracing some of the attacks to hackers linked to the People’s Liberation Army (PLA), according to former intelligence officials. None of that evidence is public, however, and China’s authorities have for years denied any involvement.

Up to now, private-sector researchers such as Stewart have had scant success putting faces to the hacks. There have been faint clues left behind—aliases used in domain registrations, old online profiles, or posts on discussion boards that give the odd glimpse of hackers at work—but rarely an identity. Occasionally, though, hackers mess up. Recently, one hacker’s mistakes led a reporter right to his door.

Stewart works in a dingy gray building surrounded by a barbed-wire fence. A small sign on a keycode-locked door identifies it as Dell SecureWorks. With one other researcher, Stewart runs a patchwork of more than 30 computers that fill his small office. As he examines malware samples, he shifts between data-filled screens and white boards scribbled with technical terms and notes on Chinese intelligence agencies.

The computers in his office mostly run programs he wrote himself to dissect and sort the malware and figure out whether he’s dealing with variations of old code or something entirely new. As the computers turn up code, Stewart looks for signature tricks that help him identify the work of an author or a team; software writers compare it with the unique slant and curlicues of individual handwriting. It’s a methodical, technical slog that would bore or baffle most people but suits Stewart. He clearly likes patterns. After work, he relaxes with a 15-minute session on his drum kit, playing the same phrase over and over.


A big part of Stewart’s task is figuring out how malware is built, which he does to an astonishing level of detail. He can tell the language of the computer on which it was coded—helping distinguish the malware deployed by Russian criminal syndicates from those used by Chinese spies. The most important thing he does, however, is figure out who or what the software is talking to. Once inside a computer, malware is set up to signal a server or several servers scattered across the globe, seeking further marching orders. This is known in the information security business as “phoning home.” Stewart and his fellow sleuths have found tens of thousands of such domains, known as command and control nodes, from which the hackers direct their attacks.

Discovery of a command node spurs a noticeable rise in pitch in Stewart’s voice, which is about as much excitement as he displays to visitors. If a company getting hacked knows the Internet Protocol (IP) address of a command node, it can shut down all communication with that address. “Our top objective is to find out about the tools and the techniques and the malware that they’re using, so we can block it,” Stewart says.

The Internet is like a map, and every point—every IP—on that map belongs to someone with a name and an address recorded in its registration. Spies, naturally, tend not to use their real names, and with most of the Internet addresses Stewart examines, the identifying details are patently fake. But there are ways to get to the truth.



In March 2011, Stewart was examining a piece of malware that looked different from the typical handiwork of Russian or Eastern European identity thieves. As he began to explore the command nodes connected to the suspicious code, Stewart noticed that since 2004, about a dozen had been registered under the same one or two names—Tawnya Grilth or Eric Charles—both listing the same Hotmail account and usually a city in California. Several were registered in the wonderfully misspelled city of Sin Digoo.

Some of the addresses had also figured in Chinese espionage campaigns documented by other researchers. They were part of a block of about 2,000 addresses belonging to China Unicom (CHU), one of the country’s largest Internet service providers. Trails of hacks had led Stewart to this cluster of addresses again and again, and he believes they are used by one of China’s top two digital spying teams, which he calls the Beijing Group. This is about as far as Stewart and his fellow detectives usually get—to a place and a probable group, but not to individual hackers. But he got a lucky break over the next few months.

Tawnya Grilth registered a command node using the URL It was a little too close to the name of Stewart’s employer. So Stewart says he contacted Icann (the Internet Corporation for Assigned Names and Numbers), the organization that oversees Internet addresses and arbitrates disputes over names. Stewart argued that by using the word Dell, the hackers had violated his employer’s trademark. Grilth never responded, and Icann agreed with Stewart and handed over control of the domain. By November 2011 he could see hacked computers phoning home from all over the world—he was watching an active espionage campaign in progress.

He monitored the activity for about three months, slowly identifying victim computers. By January 2012, Stewart had mapped as many as 200 compromised machines across the globe. Many were within government ministries in Vietnam, Brunei, and Myanmar, as well as oil companies, a newspaper, a nuclear safety agency, and an embassy in mainland China. Stewart says he’d never seen such extensive targeting focused on these countries in Southeast Asia. He broadened his search of IP addresses registered either by Tawnya Grilth or “her” e-mail address,, and found several more. One listed a contact with the handle xxgchappy. The new addresses led to even more links, including discussion board posts on malware techniques and the website, a malware repository where researchers study hacking techniques from all over the world.

Then Stewart discovered something much more unusual: One of the domains hosted an actual business—one that offered, for a fee, to generate positive posts and “likes” on social network sites such as Twitter and Facebook (FB). Stewart found a profile under the name Tawnya on the hacker forum BlackHatWorld promoting the site and a PayPal (EBAY) account that collected fees and funneled them to a Gmail account that incorporated the surname Zhang. Stewart was amazed that the hacker had exposed his or her personal life to such a degree.

In February 2012, Stewart published a 19-page report on SecureWorks’s website to coincide with the RSA Conference in San Francisco, one of the biggest security industry events of the year. He prefaced it with an epigraph from Sun Tzu’s The Art of War: “We cannot enter into informed alliances until we are acquainted with the designs of our neighbors and the plans of our adversaries.”

Stewart didn’t pursue Zhang. His job was done. He learned enough to protect his customers and moved on to the other countless bits of malware. But his report generated interest in the security world, because it’s so difficult to find any traces of a hacker’s identity. In particular, Stewart’s work intrigued another researcher who immediately took up the challenge of unmasking Tawnya Grilth. That researcher is a 33-year-old who blogs under the name Cyb3rsleuth, an identity he says he keeps separate from his job running an India-based computer intelligence company. He asked that his name not be used to avoid unwanted attention, including hacking attempts on his company.


Cyb3rsleuth says he’d already found a calling in outing the identities of Eastern European hackers and claims to have handed over information on two individuals to government authorities. Stewart’s work inspired him to post his findings publicly, and he says he hopes that unearthing more details on individual hackers will give governments the evidence to take action. The hackers are human and make mistakes, so the trick is finding the connection that leads to a real identity, Cyb3rsleuth says.

As Stewart’s new collaborator dug in, the window into Tawnya Grilth’s world expanded. There were posts on a car forum; an account on a Chinese hacker site; and personal photos, including one showing a man and a woman bundled up against the wind at what looked like a tourist site with a pagoda in the background.

Cyb3rsleuth followed the trail of the hacker’s efforts to drum up business for the social media promotion service through aliases and forums tied to the Hotmail account. He eventually stumbled on a second business, this one with a physical location. The company, Henan Mobile Network, was a mobile-phone wholesaler, according to business directories and online promotional posts. The shop’s website was registered using the Jeno Hotmail account and the Eric Charles pseudonym.


Cyb3rsleuth checked an online Chinese business directory for technology companies and turned up not only a telephone number for the company but also a contact name, Mr. Zhang, and an address in Zhengzhou, a city of more than 8 million in the central Chinese province of Henan. The directory listing gave three account numbers for the Chinese instant-messaging service called QQ. The service works along the lines of MSN Messenger, with each account designated by a unique number. One of those accounts used an alternate e-mail that incorporated the handle xxgchappy and listed the user’s occupation as “education.”

Putting that e-mail into Chinese search engines, Cyb3rsleuth found it was also registered on, a Chinese Facebook-style site, to a Zhang Changhe in Zhengzhou. Zhang’s profile image on Kaixin is of a blooming lotus, a traditional Buddhist symbol. Going back to the QQ account, Cyb3rsleuth found a blog linked to it, again with a Buddha-themed profile picture, whose user went by Changhe—the same pronunciation as the Kaixin user’s given name, though rendered in different characters. The blog contained musings on Buddhist faith, including this, from a post written in Chinese and titled “repentance”: “It’s Jan. 31, 2012 today, I’ve been a convert to Buddhism for almost five years. In the past five years, I broke all the Five Precepts—no killing living beings, no stealing, no sexual misconduct, no lies, and no alcohol, and I feel so repentant.” Amid his list of sins, from lack of sympathy to defensiveness to lying, is No. 4: “I continuously and shamelessly stole, hope I can stop in the future.”

The same QQ number appears on an auto forum called xCar, where the user is listed as belonging to a club for owners of the Dongfeng Peugeot 307—a sporty four-door popular among China’s emerging middle class—and where the user asked, circa 2007, about places to buy a special license-plate holder.

In a photo taken in 2009, Zhang stands on a beach, squinting into the sun with his back to the waves, arm in arm with a woman the caption says is his wife—the same person as in the pagoda picture. His bushy hair is cut short over a young face.

In March, Cyb3rsleuth published what he found on his personal blog, hoping that someone—governments, the research community, or some of the many hacking victims—would act. He knows of no response so far. Still, he’s excited. He’d found the face of a ghost, he says.



The city of Zhengzhou sprawls near the Yellow River in Henan province. The municipal government website describes it as “an example of a remarkably fast-changing city in China (without minor tourism clutter).” Kung-fu fans pass through on their way to the Shaolin Temple, a center of Buddhism and martial arts, 56 miles to the southwest. The city mostly serves as a gigantic transit hub for people and goods moving by rail to other places all over China.

About a 500-meter walk south from the central railway station is a tan, seven-story building with a dirty facade and red characters that read Central Plains Communications Digital City. The building is full of tiny shops, many selling electronics. The address listed for Zhang’s mobile-phone business is on the fourth floor, room A420.

Under dim fluorescent lights, two young clerks tell a reporter that they don’t know Zhang Changhe or Henan Mobile Network. The commercial manager of the building, Wang Yan, says the previous tenant of A420 moved out three years ago; she says she has no idea what the business had been, except that the proprietors weren’t there very often and that the operation didn’t last long.

A Chinese-language search on Google turns up a link to several academic papers co-authored by a Zhang Changhe. One, from 2005, relates to computer espionage methods. He also contributed to research on a Windows rootkit, an advanced hacking technique, in 2007. In 2011, Zhang co-authored an analysis of the security flaws in a type of computer memory and the attack vectors for it. The papers identified Zhang as working at the PLA Information Engineering University. The institution is one of China’s principal centers for electronic intelligence, where professors train junior officers to serve in operations throughout China, says Mark Stokes of the Project 2049 Institute, a think tank in Washington. It’s as if the U.S. National Security Agency had a university.

The gated campus of the PLA Information Engineering University is in Zhengzhou, about four miles north of Zhang Changhe’s mobile shop. The main entrance is at the end of a tree-lined lane, and uniformed men and women come and go, with guards checking vehicles and identification cards. Reached on a cell-phone number listed on the QQ blog, Zhang confirms his identity as a teacher at the university, adding that he was away from Zhengzhou on a work trip. Asked if he still maintained the Henan Mobile telephone business, he says: “No longer, sorry.” About his links to hacking and the command node domains, Zhang says: “I’m not sure.” About what he teaches at the university: “It’s not convenient for me to talk about that.” He denies working for the government, says he won’t answer further questions about his job, and hangs up.

Gate to the PLA Information Engineering UniversityStewart continues to uncover clues that point to Zhang’s involvement in computer network intrusions. A piece of malware SecureWorks discovered last year and dubbed Mirage infected more than 100 computers, mainly in Taiwan and the Philippines. Tawnya Grilth owned one of the command domains. Late last year, Stewart was looking at malware hitting Russian and Ukrainian government and defense targets. The only other sample of that kind of malware he could find in his database was one that phoned home to a command node at The billing name used in the registration: Zhang Changhe. Stewart says Zhang is affiliated with the Beijing Group, which probably involves dozens of people, from programmers to those handling the infrastructure of command centers to those who translate stolen documents and data. As Stewart discusses this, his voice is flat. He’s realistic. Outing one person involved in the hacking teams won’t stop computer intrusions from China. Zhang’s a cog in a much larger machine and, given how large China’s operations have become, finding more Zhangs may get easier. Show enough of this evidence, Stewart figures, and eventually the Chinese government can’t deny its role. “It might take several more years of piling on reports like that to make that weight of evidence so strong that it’s laughable, and they say, ‘Oh, it was us,’ ” says Stewart. “I don’t know that they’ll stop, but I would like to make it a lot harder for them to get away with it.”



6 Types of Data Chinese Hackers Pilfer


Mandiant Highlights Broad Range of Info Stolen from Victims

By Eric Chabrow, February 19, 2013.

Follow Eric @GovInfoSecurity


IT security provider Mandiant lists six categories of information that’s commonly pilfered from business and government computers by hackers from a Chinese military unit it dubs APT1.

Mandiant’s findings appear in a comprehensive report issued Feb. 18 that the security firm contends documents how APT1 has breached computers in enterprises that conduct business mostly in English, especially in the United States [see map below]. China denies the allegations presented in the report.

According to Mandiant, the data stolen relate to:

1. Product development and use, including information on test results, system designs, product manuals, parts lists and simulation technologies;

2. Manufacturing procedures, such as descriptions of proprietary processes, standards and waste management processes;

3. Business plans, such as information on contract negotiation positions and product pricing, legal events, mergers, joint ventures and acquisitions;

4. Policy positions and analysis, such as white papers, and agendas and minutes from meetings involving high-ranking personnel;

5. E-mails of high-ranking employees;

6. User credentials and network architecture information.


Mandiant says it’s often difficult to estimate how much data APT1 has stolen during its intrusions because the People’s Liberation Army unit deletes the compressed archives after it pilfer them, leaving only trace evidence that is usually overwritten during normal business activities.

Another reason Mandiant cites for the difficulty to determine how data were stolen: Some victims are more intent on assigning resources to restore the security of their network in lieu of investigating the impact of the security breach.

The security firm estimates that the Chinese army unit had stolen as much as 6.5 terabytes of compressed data from a single organization over a 10-month time period and conjectures that APT1 has stolen hundreds of terabytes from its victims.

Mandiant says the report provides evidence linking APT1 to China’s 2nd Bureau of the People’s Liberation Army General Staff Department’s 3rd Department. Other highlights from the report reveal that economic espionage conducted by APT1 since 2006 has been directed against 141 victims across multiple industries, most notably information technology, aerospace, public administration and satellites and telecommunications.

Mandiant Chief Executive Officer Kevin Mandia says the scale and impact of APT1′s operation compelled the company to write this report.

“APT1 is among dozens of threat groups Mandiant tracks around the world and one of more than 20 attributed to China that are engaged in computer intrusion activities,” Mandia said in a statement accompanying the report’s release. “Given the sheer amount of data this particular group has stolen, we decided it was necessary to arm and prepare as many organizations as possible to prevent additional losses.”

Dan McWhorter, Mandiant’s managing director for threat intelligence, says the company expects retribution from China, but feels exposure outweighs such risks.

“It is time to acknowledge the threat is originating from China, and we wanted to do our part to arm and prepare security professionals to combat the threat effectively,” he says in a preface to the report. “The issue of attribution has always been a missing link in the public’s understanding of the landscape of APT (advanced persistent threat) cyber-espionage. Without establishing a solid connection to China, there will always be room for observers to dismiss APT actions as uncoordinated, solely criminal in nature, or peripheral to larger national security and global economic concerns.”



China Says Army Is Not Behind Attacks in Report


February 20, 2013



SHANGHAI — A day after a United States security company accused a People’s Liberation Army unit in Shanghai of engaging in cyberwarfare against American corporations, organizations and government agencies, China’s defense ministry issued a strong denial and insisted that the report was flawed.

At a news conference in Beijing Wednesday, the ministry suggested the allegations were destructive and challenged the study, which was produced by Mandiant, an American computer security company. The report identified P.L.A. Unit 61398 in Shanghai as one of the most aggressive computer hacking operations in the world.

Geng Yansheng, a spokesman for China’s Ministry of National Defense, said that China had been the victim of cyberattacks that have originated in the United States, and that Mandiant mischaracterized China’s activities.

“Chinese military forces have never supported any hacking activities,” Mr. Geng said at the briefing. “The claim by the Mandiant company that the Chinese military engages in Internet espionage has no foundation in fact.”

On Tuesday, a spokesman for China’s Foreign Ministry, Hong Lei, made similar remarks, arguing that cyberattacks are difficult to trace because they are “often carried out internationally and are typically done so anonymously.”

The New York Times reported on Tuesday that a growing body of digital forensic evidence pointed to the involvement of the P.L.A. Shanghai unit and that U.S. intelligence officials had also been tracking the unit’s cyber activities.

On its Web site, Mandiant released a lengthy report on Tuesday detailing some of its evidence, including Internet protocol addresses and even the identities of several Chinese individuals it believes were behind some of the attacks. Mandiant said it had monitored the hackers as they logged onto social networking sites or through e-mail accounts.


Attempts to contact two of the individuals through telephone numbers and instant message service addresses linked to them were unsuccessful. In one case, the individual — whose online profile says he is 28 years old and a graduate of a university that specializes in computer science — declined to answer questions.


Several military analysts said they had also traced some major cyber attacks back to the P.L.A. and its Shanghai Unit 61398, which is known to be engaged in network security.


Still, many security experts concede that it is difficult if not possible to know for certain where attacks originate because hackers often take control of computers in various locations.


Chinese officials have insisted in recent years that China is one of the biggest targets of cyber attacks.


“Statistics show that Chinese military terminals connected to the Internet have been subjected to large numbers of attacks from abroad, and I.P. addresses indicate that a considerable number of these attacks are from the United States, but we have never used this as a reason to accuse the United States,” the defense ministry said Wednesday. “Every country should handle the problem of cyber security in a professional and responsible manner.”


Administration developing penalties for cybertheft

Seattle Times

Wednesday, February 20, 2013


Associated Press




Evidence of an unrelenting campaign of cyberstealing linked to the Chinese government is prompting the Obama administration to develop more aggressive responses to the theft of U.S. government data and corporate trade secrets.

A report being released Wednesday considers fines and other trade actions against China or any other country guilty of cyber-espionage. Officials familiar with the administration’s plans spoke on condition of anonymity because they were not authorized to speak publicly about the threatened action.

The Chinese government denies being involved in the cyberattacks cited in a cybersecurity firm’s analysis of breaches that compromised more than 140 companies. On Wednesday, China’s Defense Ministry called the report deeply flawed.

Mandiant, a Virginia-based cybersecurity firm, released a torrent of details Monday that tied a secret Chinese military unit in Shanghai to years of cyberattacks against U.S. companies. Mandiant concluded that the breaches can be linked to the People’s Liberation Army’s Unit 61398.

Military experts believe the unit is part of the People’s Liberation Army’s cybercommand, which is under the direct authority of the General Staff Department, China’s version of the Joint Chiefs of Staff. As such, its activities would be likely to be authorized at the highest levels of China’s military.

The release of the Mandiant report, complete with details on three of the alleged hackers and photographs of one of the military unit’s buildings in Shanghai, makes public what U.S. authorities have said less publicly for years. But it also increases the pressure on the U.S. to take more forceful action against the Chinese for what experts say has been years of systematic espionage.

“If the Chinese government flew planes into our airspace, our planes would escort them away. If it happened two, three or four times, the president would be on the phone and there would be threats of retaliation,” said Shawn Henry, former FBI executive assistant director. “This is happening thousands of times a day. There needs to be some definition of where the red line is and what the repercussions would be.”

Henry, the president of the security firm CrowdStrike, said that rather than tell companies to increase their cybersecurity, the government needs to focus more on how to deter the hackers and the nations that are backing them.

James Lewis, a cybersecurity expert at the Center for Strategic and International Studies, said that in the past year the White House has been taking a serious look at responding to China. “This will be the year they will put more pressure on, even while realizing it will be hard for the Chinese to change. There’s not an on-off switch,” Lewis said.

In denying involvement in the cyberattacks tracked by Mandiant, China’s Foreign Ministry said China too has been a victim of hacking, some of it traced to the U.S. Foreign Ministry spokesman Hong Lei cited a report by an agency under the Ministry of Information Technology and Industry that said that in 2012 alone foreign hackers used viruses and other malicious software to seize control of 1,400 computers in China and 38,000 websites.

“Among the above attacks, those from the U.S. numbered the most,” Hong said at a daily media briefing, lodging the most specific allegations the Chinese government has made about foreign hacking.

Cybersecurity experts say U.S. authorities do not conduct similar attacks or steal data from Chinese companies but acknowledge that intelligence agencies routinely spy on other countries.

China is clearly a target of interest, said Lewis, noting that the U.S. would be interested in Beijing’s military policies, such as any plans for action against Taiwan or Japan.

In its report, Mandiant said it traced the hacking back to a neighborhood in the outskirts of Shanghai that includes a white 12-story office building run by the army’s Unit 61398.

Mandiant said there are only two viable conclusions about the involvement of the Chinese military in the cyberattacks: Either Unit 61398 is responsible for the persistent attacks, or they are being done by a secret organization of Chinese speakers, with direct access to the Shanghai telecommunications infrastructure, who are engaged in a multi-year espionage campaign being run right outside the military unit’s gates.

“In a state that rigorously monitors Internet use, it is highly unlikely that the Chinese government is unaware of an attack group that operates from the Pudong New Area of Shanghai,” the Mandiant report said, concluding that the only way the group could function is with the “full knowledge and cooperation” of the Beijing government.

The unit “has systematically stolen hundreds of terabytes of data from at least 141 organizations,” Mandiant wrote. A terabyte is 1,000 gigabytes. The most popular version of the new iPhone 5, for example, has 16 gigabytes of space, while the more expensive iPads have as much as 64 gigabytes of space. The U.S. Library of Congress’ 2006-10 Twitter archive of about 170 billion tweets totals 133.2 terabytes.



Chuck Hagel, Strategic Thinker?

Why aren’t more pundits defending the Defense nominee for foreseeing today’s budget problems? Probably because they were wrong themselves.

National Journal

by Michael Hirsh

Updated: February 19, 2013 | 10:26 a.m.

It looks awfully likely that Chuck Hagel will squeak through confirmation as President Obama’s Defense secretary. But it is also likely that he’ll enter the Pentagon a damaged figure, a nominee tainted by the lingering impression that he is not ready to handle the vast complexities of a defense budget slated for slashing. Sen. Lindsey Graham, R-S.C., in telling Fox News Sunday that he would no longer block a Hagel vote, still indicated he was shifting his position reluctantly. He called Hagel “one of the most unqualified, radical choices for secretary of Defense in a long time.”

Unqualified? Radical? Hagel did himself no favors, of course, with his unsteady performance at his confirmation hearing two and a half weeks ago. But what has gone largely unnoted by the punditocracy is that, over the past decade or so, the former Republican senator from Nebraska has distinguished himself with subtle, well-thought-out, and accurate analyses of some of America’s greatest strategic challenges of the 21st century–especially the response to 9/11–while many of his harshest critics got these issues quite wrong.


Even Hagel’s defenders, scarce though they still seem today, have not addressed this question well. Consider Thomas Friedman, perhaps the most widely read foreign-affairs columnist of our time. In a column in The New York Times on Dec. 25, Friedman supported the Hagel nomination even though he said Hagel’s views on Israel and Iran were “out of the mainstream.”

“The legitimate philosophical criticism of Hagel concerns his stated preferences for finding a negotiated solution to Iran’s nuclear program, his willingness to engage Hamas to see if it can be moved from its extremism, his belief that the Pentagon budget must be cut, and his aversion to going to war again in places like Iraq and Afghanistan, because he has been to war and knows how much can go wrong,” Friedman wrote. “Whether you agree with these views or not, it would be nothing but healthy to have them included in the president’s national security debates.”

This was faint praise indeed. Perhaps it might even be more “healthy” to have a Pentagon chief whose views on these issues have so often proved right in contrast to so many others, including Friedman himself. Much has been made of Hagel’s opposition to the Bush administration’s turn toward Iraq a decade ago, but what is more important are the reasons Hagel gave at the time for this lonely stand. In an interview he did with me in the summer of 2002, Hagel laid out a sophisticated vision of a foreign policy that needed to balance “realism and idealism,” one that was governed, above all, by a careful assessment of what it might mean to divert precious resources–both human and monetary–to Iraq when Afghanistan was still so unfinished.

“We are involved in something here we’ve never had to face before,” Hagel said as the Bush administration turned its war machine toward Iraq, expressing concern to me that the minuscule security forces left behind in Afghanistan would not be enough. “The coalition forces run the risk of having not an adequate force on the ground to be able to give the Afghans under the [Hamid] Karzai government a reasonable chance to succeed with the monumental task that government has,” he said. “I have always believed that once we engaged in Afghanistan the way we did, we had to see it through not just for Afghanistan but also because our prestige was on the line. The greatest risk is allowing that to unwind and go backward.”

As we now know, Afghanistan did unwind and go backward, thanks in large part to U.S. inattention. In the first years after the fall of the Taliban, aid amounted to just $67 a year per Afghan, a meager figure compared to nation-building exercises such as Bosnia ($249) and East Timor ($256), according to Beth DeGrasse of the U.S. Institute of Peace. Jim Dobbins, Bush’s former special envoy to Kabul, told me in an interview in 2006 that Afghanistan was the “most under-resourced nation-building effort in history.” Another senior Bush administration official, former reconstruction coordinator Carlos Pascual, also said at the time that the State Department had “maybe 20 to 30 percent” of the people it needed in Afghanistan.


Yet as much as Hagel raised concerns about backsliding in the actual theater of the war against al-Qaida, he also worried presciently about U.S. overreach, as well as alienating allies around the world that were critical to fighting a global struggle against transnational terrorists. Hagel foresaw that unless Washington was more careful about the exercise of hard power, we would find ourselves in the very crisis we are in today, with a $600 billion-plus defense budget that the president and Congress have now mandated be cut by $500 billion over the next decade. Hagel saw that, in Iraq, America was taking on an already weakened leader who the senator said probably didn’t have weapons of mass destruction, and at the same time empowering another regime (Iran) that badly wanted WMDs–a dire development further documented on Monday by The Washington Post, which reported that the Iranian-backed Shiite group Asaib Ahl al-Haq, the “League of the Righteous,” is exerting new political power in Iraq.

Hagel also delivered some of the earliest warnings about the potentially disastrous effects of George W. Bush’s ill-grounded “Axis of Evil” speech, in which the president needlessly alienated Tehran only days after the Iranians had actually delivered up aid and support to stabilize post-Taliban Afghanistan. Ironically, Bush’s own officials on the ground in Afghanistan, such as Dobbins, had testified to Iran’s measured policies at the time. They noted that at a 2002 donor’s conference in Tokyo that occurred only a week before the Axis of Evil speech, Iran pledged $500 million–at the time, more than double the Americans’ contribution– to help rebuild Afghanistan. “Iran actually has been quite helpful in Afghanistan,” Hagel, then a member of the Senate Foreign Relations Committee, told Congressional Quarterly on Feb. 1, 2002. “And we’re giving them the back of our hand.” Hagel added: “We’re not isolating [the Iranians]. We’re isolating ourselves…. We ought to be a little more thoughtful. That [axis] comment only helps the mullahs.”

Hagel was, in other words, displaying a deeply knowledgeable, well-grounded sense of the actual (monetary) and strategic costs of war, a critical faculty that will be badly needed in the months ahead as he grapples with the possibility of sequestration and budget cuts. His skepticism has since been vindicated by a large number of studies of the titanic costs of launching wars in both Iraq and Afghanistan, amounting to multiple trillions of dollars. A Rand Corp. study in 2010 even concluded that the chaos in Iraq following the U.S. invasion “stalled or reversed the momentum of Arab political reform; local regimes perceive that U.S. distraction in Iraq and the subsequent focus on Iran have given them a reprieve on domestic liberalization.”

What were Hagel’s critics of today, and even some of his lukewarm defenders, saying at the same time? On March 13, 2003, seven days before the Iraq invasion, the Times’ Friedman wrote: “This war is so unprecedented that it has always been a gut call-and my gut has told me four things. First, this is a war of choice. Saddam Hussein poses no direct threat to us today. But confronting him is a legitimate choice-much more legitimate than knee-jerk liberals and pacifists think. Removing Mr. Hussein-with his obsession to obtain weapons of mass destruction-ending his tyranny and helping to nurture a more progressive Iraq that could spur reform across the Arab-Muslim world are the best long-term responses to bin Ladenism.”

Chuck Hagel, of course, was no knee-jerk liberal. He was, demonstrably, smart and strategic about the risks of a terrible expense in blood and treasure that lay ahead– far more than many others. And he deserves more credit for that than he is getting. Perhaps Hagel is, after all, just the man to tackle the Defense Department budget.


NAME – Charles Timothy “Chuck” Hagel.

AGE-BIRTH DATE – 66; Oct. 4, 1946.

EDUCATION – Graduate, Brown Institute for Radio and Television, Minneapolis, 1966; bachelor’s degree, history, University of Nebraska, Omaha, 1971.

EXPERIENCE – Chairman of the Atlantic Council and the United States of America Vietnam War Commemoration Advisory Committee; co-chairman of the President’s Intelligence Advisory Board and member of the Defense Policy Board. U.S. senator, 1997-2009; president, McCarthy & Co., an investment banking firm based in Omaha, Neb., 1992-1996; president and chief executive officer of the Private Sector Council, a nonprofit business organization in Washington, D.C., 1990-1992; co-founder, director and executive vice president of Vanguard Cellular Systems Inc. and chairman of Communications Corporation International LTD, 1985-1987; co-founder, director and president of Collins, Hagel & Clarke Inc., an international consulting, marketing and investment company involved in cellular telecommunications, 1982-1985; deputy administrator, U.S. Veterans Administration, 1981-1982; manager of government affairs, Firestone Tire & Rubber Co., 1977-1980; assistant to Rep. John Y. McCollister, R-Neb., 1971-1977; newscaster and talk-show host in Nebraska, 1969-1971; Army, including service in Vietnam, 1967-1968.

FAMILY – Wife, Lilibet; two children.

QUOTE – “We are each a product of our experiences, and my time in combat very much shaped my opinions about war. I’m not a pacifist; I believe in using force, but only after following a very careful decision-making process.” – Hagel in an October interview with Vietnam Magazine.


Postal Service to launch new clothing line in 2014 – in a store near you

Washington Post

Posted by Josh Hicks on February 19, 2013 at 4:27 pm

First the end of Saturday mail, now a new clothing line. The U.S. Postal Service is taking unprecedented steps to make itself relevant and profitable these days.

The cash-strapped agency announced plans on Tuesday to launch a new line of all-weather apparel and accessories sometime next year.

Move over, upscale North Face. Or should it be the grittier Carhartt brand that worries?

The Postal Service chose “Rain Heat & Snow” as its own brand name, alluding to its unofficial motto: “Neither snow nor rain nor heat nor gloom of night stay these couriers from the swift completion of their appointed rounds.”


Only men’s apparel and accessories will be available initially, but the agency plans to add a women’s line in the future, it said Tuesday.

The Postal Service inked a licensing agreement with Cleveland-based Wahconah Group, Inc. to produce the new line, which will include jackets, headgear, footwear and clothing that allows integration of modern technology devices such as iPods, according to agency spokesman Roy Betts.

“This agreement will put the Postal Service on the cutting edge of functional fashion,” agency licensing manager Steven Mills said in a statement. “The main focus will be to produce Rain Heat & Snow apparel and accessories using technology to create ‘smart apparel’ — also known as wearable electronics.”

Betts said the Postal Service plans to sell its apparel and accessories in premium department stores and specialty stores, but not at post offices. He said the agency plans to make the products available in 2014.

The Postal Service decided to launch a clothing line as a way to promote and strengthen its brand, as well as to generate money, according to Betts.

The licensing agreement allows the Postal Service to collect royalty fees for its new product line without investing money to produce the gear, Betts said.

“We’re looking at many different approaches to generate revenue and become more innovative in the marketplace,” Betts said. “This is one effort among many that the Postal Service is undertaking to respond to the changing dynamics of the marketplace.”

The agency reported a $1.3 billion loss during the first quarter, but its numbers were severely hampered by a congressional mandate that cost about $1.4 billion during that period.

In 2006, Congress passed a statute requiring the Postal Service to pre-pay for 75 years worth of retiree benefits within 10 years. No other federal agency is forced to make such an investment.

The Postal Service would have recorded a $100 million profit during the first quarter if not for that mandate, according to the figures in the agency’s financial report.

Postmaster General Patrick R. Donahoe announced on Feb. 6 that the Postal Service would end Saturday mail delivery starting in August in an effort to deal with its financial troubles, which have been ongoing for several years now.

The Postal Service introduced a limited retail line in the 1980s that included items such as T-shirts, mugs and neckties, all sold exclusively in post offices. Betts said the agency discontinued those products after lobbyists complained to Congress that the organization was directly competing with private businesses and that it was not established to sell merchandise.


FAA Drone Plan Hits Turbulence

Information Week


February 20, 2013 01:50 PM

The Federal Aviation Administration is hampered by technology and policy issues that must be resolved before the federal government allows the expanded use of unmanned aerial vehicles in U.S. airspace, according to testimony from the Government Accountability Office.

The FAA currently approves the use of UAVs, or drones, on a case-by-case basis over U.S. skies. To date, the Department of Defense has received the largest number of approvals, 201, followed by academic institutions, NASA, local law enforcement and other federal agencies. Opening U.S. airspace to more drone traffic, including those for commercial purposes, requires a coordinated plan with new systems and processes.

Legislation passed by Congress last year requires the FAA to establish six drone test ranges in the United States, but privacy concerns about the collection and use of data have delayed the opening of the ranges. Without the hard data on UAV performance that would be generated by test ranges, it’s difficult for the FAA to draft the safety, reliability and performance standards that Congress requires.

There are other challenges to “integrating” drones into U.S. airspace. “UAS integration is an undertaking of significant breadth and complexity,” Gerald Dillingham, GAO’s director of physical infrastructure issues, said in his testimony.

For one thing, the sense-and-avoid technology needed to let drones automatically avoid piloted aircraft isn’t mature. Among the methods under consideration is a ground-based system under development by the Army that has been successfully tested, but which might not be suitable for all drones. A second approach involves the use of the same GPS-based transponder system being planned for the FAA’s NextGen air traffic management system.

A third possibility is a NASA-tested system that uses GPS and avionics to transmit a drone’s location to ground receivers, which forward the information to other aircraft with the right kind of avionics.

The potential for “lost link” communications between ground control and the UAV is another issue. Drones typically have preprogrammed instructions on how to operate if those communications are lost, but air traffic controllers need access to that same information. Standard procedures have not yet been created.

Dedicated radio spectrum for command and control is also needed. Drone now use unprotected spectrum, leaving them vulnerable to interference, either intentional or accidental, and the potential for loss of control. Similarly, GPS signals could be used to keep air traffic control informed of a drone’s whereabouts, but low-cost devices are available that can jam those signals.

The FAA faces a series of deadlines, some of which it has already missed, related to the UAV integration effort. Congress tasked the agency with creating a five-year roadmap for assimilating drones into the national airspace. The roadmap, due earlier this month, is circulating within the FAA but has not yet been publicly released.


US students get cracking on Chinese malware code

Students at Mississippi State University will analyze samples used in a wide-ranging, seven-year hacking campaign

Jeremy Kirk

February 21, 2013 (IDG News Service)


Wesley McGrew, a research assistant at Mississippi State University, may be among the few people thrilled with the latest grim report into a years-long hacking campaign against dozens of U.S. companies and organizations.

But McGrew’s interest is purely academic: He teaches a reverse engineering class at the university, training 14 computer science and engineering students how to analyze malicious software.

Part of the curriculum for his class will involve analyzing malware samples identified in a report from security vendor Mandiant, which alleged a branch of the Chinese military called “Unit 61398″ ran a massive hacking campaign that struck 141 organizations over the last seven years.

Mandiant’s report is fueling a diplomatic crisis between the U.S. and China, but it will also provide a learning opportunity for future computer security experts.

“Oh, it’s fantastic,” said McGrew, who will defend his doctoral thesis on the security of SCADA (supervisory control and data acquisition) systems next month. “The importance of having malware that has an impact on the economic advantage of one company over another or the security of a nation is priceless. This is exactly what they should be learning to look at.”

Mandiant published more than 1,000 MD5 hashes for malware it linked to the campaign. An MD5 hash is a mathematical representation of a file based on its size. No two files have the same MD5 hash unless they are exactly the same, which makes it a good way to identify files.

In an interview late Wednesday night, McGrew said Mandiant also described “families” of related malware used in the campaigns but did not link those to the MD5 hashes. He is working to analyze some of the malware files to link them to certain malware families, which he detailed on his blog.

There are also other efforts to find out precisely what malware has been used. The website is an online repository for malware where researchers can submit and obtain samples.

Since the Mandiant report was published, has seen an influx of samples with the same MD5 hashes. McGrew said that in the last day or so, there are now 281 matches on for the 1,007 MD5 hashes published by Mandiant.

McGrew said he is particularly interested in samples that are not too complicated for his students, who have basic malware analysis skills. The blend of malware linked to the attacks ranges in sophistication, he said. Some of the samples are detected by antivirus software and aren’t particularly complex.

Attackers are less likely to use their more advanced malware against a target if a simpler one suffices, since it could be detected and blocked in the future, McGrew said. Other samples, however, still aren’t detected by some security software.

McGrew’s lesson plan will include supplying the students with malware samples and asking them about certain functions.


“By providing them with real malware samples and teaching them all the proper safety procedures for handling, we allow them to have the expertise of looking at real malicious software,” he said.

Many of his students are on scholarship programs that will require them to work for a certain time for government agencies. Mississippi State University, based in Starkville, is part of the National Science Foundation’s Scholarship for Service program. The scholarship pays for the last two years of a student’s degree in exchange for the student taking a job revolving around security with a federal government agency.

The university is also part of the U.S. Department of Defense’s Information Assurance Scholarship Program, established in 2001, that requires students to spend one year in government service for every year they received funds. The idea behind the program is to increase U.S. expertise in cybersecurity in a field that increasingly demanding more and more skill people.

“We have a room with highly motivated students absolutely looking to get into this field,” McGrew said. “It puts them in positions that the country is desperately trying to fill right now.”


Congress risks cyberattack hit

The Hill

By Jennifer Martinez – 02/21/13 05:00 AM ET

Security experts warn Congress is vulnerable to cyberattacks from digital intruders like hacker group Anonymous and China, which was named in a report this week as having successfully breached the security of some U.S. firms.

The digital networks that run the backbone of the information systems and networks of congressional staff and lawmakers are treasure troves of sensitive data for foreign intelligence services and independent hacker groups alike. Experts warn that Congress isn’t using the types of technology and security methods that could prevent sophisticated hacker attacks.

A successful security breach on a congressional committee or lawmaker’s office network could yield information about U.S. military operations and the budget, draft legislation and policy memos, or upcoming hearing testimony from top government officials, according to security experts. By cracking into these networks, hackers could get a peek into future U.S. policymaking and the thinking of some of the country’s top decision-makers.

Foreign hackers would aim to use this valuable intelligence to get an economic, political or security advantage over the U.S., experts say.

Over the years, hackers have learned to bypass traditional security tools, like firewalls and network encryption, to gain access to sensitive networks by unleashing targeted cyberattacks on an employee’s laptop or another device, said Tom Kellermann, vice president of cybersecurity for security software firm Trend Micro.


Congress is “overly reliant on perimeter defenses that are ineffective in today’s targeted environment,” he warned.

“They lack their own appropriate levels of funding for technologies and manpower to deal with this properly,” Kellermann said. “A major corporation has more resources than they do.”

Top-ranking lawmakers and influential congressional committees, such as the Intelligence and Armed Services committees, are likely at the top of hackers’ target lists, security experts say.

Tapping into the computer systems and communications of the House and Senate Intelligence, Foreign Relations, Finance and Armed Services committees would be of particular interest to hackers because they handle critical data on the military, and ask agencies for highly sensitive information that is typically locked away from public view.

“I would be shocked if there wasn’t deep penetration of multiple committees and the FBI hadn’t already told them about it,” said Alan Paller, research director of the SANS Institute.

Even unclassified discussions about upcoming hearings and witness testimony from defense officials would provide valuable insight for cyber adversaries on the hunt for intelligence, Paller added.

In recent weeks, major U.S. companies like Facebook, Apple, Twitter, The New York Times and other media organizations have reported breaches on their computer networks. Computer security firm Mandiant on Tuesday revealed that an elite military unit of Chinese hackers based in Shanghai are likely behind a spate of successful cyberattacks against U.S. companies and the government.

The revelation about the elite Chinese hacker unit represents a broad shift in the way countries are waging war against one another and moving the battlefield to cyberspace.

“We used to do it with bombers and artillery shells, now they’re doing it with cyber warfare,” House Intelligence Committee Chairman Mike Rogers (R-Mich.) said at a conference earlier this month. Rogers has sounded alarm about the cyberattack capabilities of China, Russia, Iran and others.

The Senate Sergeant at Arms oversees the computer security of the upper chamber’s networks and email systems, while the House Information Resources unit for the Chief Administrative Officer provides cybersecurity for the lower chamber. Both offices declined to comment about the security measures they have in place or whether they’ve stepped up those measures in the wake of the recent hacker reports, presumably to keep hackers in the dark about the safeguards used to protect Congress’s computer networks.

“While many security measures are taken, we do not comment on what those are,” a spokesman for the Senate Sergeant at Arms said in an email.

Dan Weiser, a spokesman for the Chief Administrative Officer of the House, also declined to comment on the cybersecurity measures it has in place, but said House employees are trained on proper cyber hygiene annually.

“House employees take information security training on an annual basis,” said Weiser. “Other training and information is available to them as needed.”


Congressional committees take extra steps to secure sensitive data. A spokesman for the Senate Armed Services Committee, which handles classified information, said none of that critical data is stored on a computer system that’s hooked up to the Web.

“None of the classified information held by the committee is available on a computer that is connected to the Internet,” said the committee spokesman. “There is a way to send classified documents to the committee, but that system is managed by special arrangements as an extension of the classified network of the executive branch.”

Meanwhile, the Senate Homeland Security and Governmental Affairs Committee works with the Senate Sergeant at Arms when it comes to handling classified information.

Few hacker attacks on Congress have come to light in recent years.

LulzSec, a hacker group that is considered an offshoot of Anonymous, claimed it publicly posted internal data from the Senate’s public website in June 2011. Following that claim, the Senate Sergeant at Arms said an intruder gained unauthorized access to a public server that supports the website and that the information stored on that server is intended to be public. The Sergeant at Arms spokeman said the office took the opportunity to review its security posture after the incident.

Last May it was revealed that hackers had gained access to the personal information — including Social Security numbers and addresses — of roughly 123,000 federal employees who participate in the Thrift Savings retirement program. At a hearing this summer, then-Sen. Daniel Akaka (D-Hawaii) said 43 current and former members of Congress, himself included, were affected by the attack on the Federal Retirement Thrift Investment Board.

Additionally, Rep. Frank Wolf (R-Va.) reported that four computers in his personal office were compromised by an outside intruder in August 2006. Wolf said the attack stemmed from China and he believed his office was a target because of his ongoing criticism of the country’s human rights record.

Both the House and Senate networks have suffered breaches in the past, but the chambers’ cybersecurity professionals have notably stepped up their efforts to beef up Congress’s network security in the last couple years, according to James Lewis, director of the technology and public policy program at the Center for Strategic and International Studies.

He said the security professionals on the Hill have paid closer attention to suspicious activity on the House and Senate networks, and worked on improving its authentication system so hackers impersonating congressional staffers are locked out.

“In the last year, they’ve put more effort into tightening things up,” Lewis said. “Once you get hacked, you get religion.”

“They have a lot of resources up there and they’re willing to spend,” he added.

Lewis said senators have previously told him about their office networks suffering security breaches. He noted that probing for Tibetan human rights activities has been another popular hacker activity spotted on congressional networks.


Despite these previous cyber incidents, Congress has failed to pass cybersecurity legislation. A comprehensive cybersecurity bill failed twice in the Senate last year after GOP members said it would apply burdensome new regulations on businesses.

President Obama issued a cybersecurity executive order last week amid the gridlock in Congress. The executive order intends to improve information sharing about cyber threats between government and industry and establish a framework of cybersecurity best practices that industry would elect to follow.

“[Lawmakers] know what the problem is. They just can’t get their act together politically,” Lewis said. “No one disputes there’s a problem, but the politics of the Hill get in the way of there being any solution.”

Read more:


White House rolls out Cyber espionage response

Thu, 2013-02-21 08:45 AM

By: Mark Rockwell

The White House Under took aim at curbing the electronic theft of U.S. companies’ intellectual property with a new strategy that improves coordination among U.S. intelligence, diplomatic and law enforcement agencies.

The step comes as evidence mounts against China as a major state sponsor of Cyber attacks and snooping. A groundbreaking report by Cyber security company Mandiant, released only days before, meticulously tracked illicit Cyber espionage activities to a bureau of the Chinese army that employs dozens, if not hundreds, of hackers.

Days before that report’s release, the White House had issue a much-anticipated executive order aimed at increasing critical infrastructure defenses against electronic attack.

The administration’s Strategy on Mitigating the Theft of U.S. Trade Secrets strategy, unveiled on Feb. 20 by Victoria Espinel, U.S. Intellectual Property Enforcement coordinator for the White House, which is part of the Office of Management and Budget.

Espinel said the new strategy coordinates and improves the U.S. government’s efforts to protect American companies and jobs. Espinel called the plan “a whole of government approach” aimed at stopping the theft of trade secrets by foreign competitors or foreign governments by any means – Cyber or otherwise.

The strategy, said Robert Hormats, undersecretary of state for economic growth, energy and the environment, at Washington event unveiling the strategy, said the U.S. would look to staunch the theft of intellectual property wherever it is threatened, including China. He added, however, that other groups in countries like Russia and India were also very active in intellectual property theft from U.S. companies.


The plan, said Espinel, will increase U.S. diplomatic engagement on the issue. She didn’t specifically mention trade sanctions, though. The U.S., she said, will convey concerns to countries with high incidents of trade secret theft “with coordinated and sustained messages from the most senior levels of the administration.” The U.S. government, she said, will also work to establish coalitions with other countries that have been targeted by Cyber thieves, as well as use trade policy “to press other governments for better protection and enforcement.”

The Department of Justice, she said, will step up its job of investigating and prosecuting trade secret theft by foreign competitors and foreign. The FBI and the intelligence community will also provide warnings and threat assessments to the private sector on information and technology that are being targeted for theft by foreign competitors and foreign governments.

The Obama administration, she said, will conduct a review of laws to determine if more changes are needed to enhance enforcement and will work with Congress to make those changes lasting and comprehensive. hacked to serve up banking malware

NBC said it was working to clear up the issues, which also affected some of its other websites

Jeremy Kirk

February 21, 2013 (IDG News Service)

Websites affiliated with U.S. broadcaster NBC were hacked for several hours on Thursday, serving up malicious software intended to steal bank account details.

On its own technology blog, NBC released a statement saying, “We’ve identified the problem and are working to resolve it. No user information has been compromised.”

Sites such as are a frequent target for hackers since the high volume of visitors offers a chance to infect many people in a short period of time.

Several computer security companies said the main website had been modified to serve up an iframe, which is a way to load content into a website from another domain.

The iframe loaded an exploit kit called Redkit, which tries to see if a visitor is running unpatched software, according to a blog post from Securi, a computer security company based in Menifee, California. The style of attack is known as a drive-by download and can infect a computer when a user merely views a website. was temporarily blacklisted by Google after the attack. Facebook also stopped directing users to Securi wrote that other NBC sites, including ones for TV talk show hosts Jimmy Fallon and Jay Leno, were also affected.

The hack follows the release of a report this week from security vendor Mandiant about a long-running hacking campaign allegedly based in Shanghai that targeted U.S. corporations, although it did not immediately appear connected with the problems at

Another computer security firm, SurfRight, wrote on its HitmanPro blog that the NBC attack loaded exploits that look for vulnerabilities in Oracle’s Java programming framework and Adobe’s PDF products. Oracle and Adobe have both released critical updates for their products this month, but hackers hope to hit users who have not updated their computers.

If the attack is successful, one of two malicious software programs is delivered, called Citadel or ZeroAccess. Citadel is a trojan designed to collect account credentials for banks including Bank of America, Wells Fargo, Chase and others, according to Fox-IT, a Dutch computer forensics company.

The version of Citadel analyzed by Fox-IT showed it was being detected by only three of 46 products on VirusTotal, a website where malicious software can be tested for detection against many of the popular security suites.

According to Symantec, ZeroAccess is an advanced rootkit, or a piece of malicious software that hides at a low level in a computer’s operating system. ZeroAccess, detected by Symantec in July 2011, can create its own hidden file system and download other malware to a computer.


Sequester will delay flights, LaHood warns

By Robert Schroeder, MarketWatch

WASHINGTON (MarketWatch) — Travelers should expect flight delays of up to 90 minutes at major U.S. airports if the automatic budget cuts known as the sequester are allowed to take effect, Transportation Secretary Ray LaHood warned on Friday.

LaHood said the government would beginning in April have to furlough Federal Aviation Administration workers one or two days a week as long as the sequester lasts, slowing down work at airports.

“It’s not possible to continue the same schedules with less people,” LaHood told reporters at the White House.

The transportation chief also said that air traffic control towers at more than 100 regional airports from Alabama to Wyoming could be closed if the cuts — totaling $85 billion across domestic and military programs in fiscal 2013 — go into effect on March 1. See list of regional airports from the FAA.

Congress has until March 1 to replace or postpone the sequester, which was originally due to kick in at the beginning of the year. The cuts for fiscal 2013 were delayed by last year’s fiscal-cliff agreement. Overall, the sequester calls for $1.2 trillion in cuts from fiscal 2013 to fiscal 2021.

LaHood said that his agency would need to cut about $1 billion in 2013, $600 million of which would come from the FAA. See LaHood letter to aviation associations.

Lawmakers are due back in Washington next week and are expected to work on bills to replace the sequester. President Barack Obama plans to travel to Newport News, Va., on Tuesday to discuss the impacts that the cuts would have, White House press secretary Jay Carney said Friday.



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