Posts Tagged ‘Obama Administration’

Wall Street Journal Editorial Board Goes To Bat Against FBI And Robert Mueller For Trump

December 5, 2017

The newspaper has published a series of pieces critical of the investigation into Russian election interference.


Mueller’s Credibility Problem

December 5, 2017

The special counsel is stonewalling Congress and protecting the FBI.

Donald Trump is his own worst enemy, as his many ill-advised tweets on the weekend about Michael Flynn, the FBI and Robert Mueller’s Russia probe demonstrate. But that doesn’t mean that Mr. Mueller and the Federal Bureau of Investigation deserve a pass about their motives and methods, as new information raises troubling questions.

The Washington Post and the New York Times reported Saturday that a lead FBI investigator on the Mueller probe, Peter Strzok, was demoted this summer after it was discovered he’d sent anti- Trump texts to a mistress. As troubling, Mr. Mueller and the Justice Department kept this information from House investigators, despite Intelligence Committee subpoenas that would have exposed those texts. They also refused to answer questions about Mr. Strzok’s dismissal and refused to make him available for an interview.

The news about Mr. Strzok leaked only when the Justice Department concluded it couldn’t hold out any longer, and the stories were full of spin that praised Mr. Mueller for acting “swiftly” to remove the agent. Only after these stories ran did Justice agree on Saturday to make Mr. Strzok available to the House.

This is all the more notable because Mr. Strzok was a chief lieutenant to former FBI Director James Comey and played a lead role investigating alleged coordination between the Trump campaign and Russia during the 2016 election. Mr. Mueller then gave him a top role in his special-counsel probe. And before all this Mr. Strzok led the investigation into Hillary Clinton’s emails and sat in on the interview she gave to the FBI shortly before Mr. Comey publicly exonerated her in violation of Justice Department practice.

Oh, and the woman with whom he supposedly exchanged anti-Trump texts, FBI lawyer Lisa Page, worked for both Mr. Mueller and deputy FBI director Andrew McCabe, who was accused of a conflict of interest in the Clinton probe when it came out that Clinton allies had donated to the political campaign of Mr. McCabe’s wife. The texts haven’t been publicly released, but it’s fair to assume their anti-Trump bias must be clear for Mr. Mueller to reassign such a senior agent.

There is no justification for withholding all of this from Congress, which is also investigating Russian influence and has constitutional oversight authority. Justice and the FBI have continued to defy legal subpoenas for documents pertaining to both surveillance warrants and the infamous Steele dossier that was financed by the Clinton campaign and relied on anonymous Russian sources.

While there is no evidence so far of Trump-Russia collusion, House investigators have turned up enough material to suggest that anti-Trump motives may have driven Mr. Comey’s FBI investigation. The public has a right to know whether the Steele dossier inspired the Comey probe, and whether it led to intrusive government eavesdropping on campaign satellites such as Carter Page.

All of this reinforces our doubts about Mr. Mueller’s ability to conduct a fair and credible probe of the FBI’s considerable part in the Russia-Trump drama. Mr. Mueller ran the bureau for 12 years and is fast friends with Mr. Comey, whose firing by Mr. Trump triggered his appointment as special counsel. The reluctance to cooperate with a congressional inquiry compounds doubts related to this clear conflict of interest.

***Mr. Mueller’s media protectorate argues that anyone critical of the special counsel is trying to cover for Mr. Trump. But the alleged Trump-Russia ties are the subject of numerous probes—Mr. Mueller’s, and those of various committees in the House and Senate. If there is any evidence of collusion, Democrats and Mr. Mueller’s agents will make sure it is spread far and wide.

Yet none of this means the public shouldn’t also know if, and how, America’s most powerful law-enforcement agency was influenced by Russia or partisan U.S. actors. All the more so given Mr. Comey’s extraordinary intervention in the 2016 campaign, which Mrs. Clinton keeps saying turned the election against her. The history of the FBI is hardly without taint.

Deputy Attorney General Rod Rosenstein, who appointed Mr. Mueller, is also playing an increasingly questionable role in resisting congressional oversight. Justice has floated multiple reasons for ignoring House subpoenas, none of them persuasive.

First it claimed cooperation would hurt the Mueller probe, but his prosecutions are proceeding apace. Then Justice claimed that providing House investigators with classified material could hurt security or sources. But House Intelligence Chairman Devin Nunes has as broad a security clearance as nearly anyone in government. Recently Justice said it can’t interfere with a probe by the Justice Department Inspector General—as if an IG trumps congressional oversight.

Mr. Nunes is understandably furious at the Strzok news, on top of the other stonewalling. He asked Justice to meet the rest of his committee’s demands by close of business Monday, and if it refuses Congress needs to pursue contempt citations against Mr. Rosenstein and new FBI Director Christopher Wray.

The latest news supports our view that Mr. Mueller is too conflicted to investigate the FBI and should step down in favor of someone more credible. The investigation would surely continue, though perhaps with someone who doesn’t think his job includes protecting the FBI and Mr. Comey from answering questions about their role in the 2016 election.
By Peter Hasson

Anti-Trump FBI Agent Bombshell Has The Spotlight On Mueller Now

The revelation that Special Counsel Robert Mueller kept secret that a top FBI investigator overseeing the Russia investigation exchanged anti-Trump text messages with an FBI attorney has fueled questions about Mueller’s credibility and his ability to oversee an impartial investigation.

Peter Strzok, the anti-Trump agent, is reported to be the official who first signed the FBI’s Russia investigation into existence and interviewed Michael Flynn. Strzok was also reportedly the one who softened former FBI Director James Comey’s language referring to Hillary Clinton’s email investigation.

In an appearance on “Tucker Carlson Tonight,” Judicial Watch president Tom Fitton told the Daily Caller co-founder that “both [the Clinton and Russia] investigations in my view have been irredeemably compromised.” (RELATED: Anti-Trump Text Messages Show Pattern Of Bias On Mueller’s Team)

“The Clinton investigation needs to be reopened and the Mueller investigation needs to be shut down until we figure out how badly it’s been politicized,” Fitton said.

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The Wall Street Journal’s editorial board said the Strzok news “reinforces our doubts about Mr. Mueller’s ability to conduct a fair and credible probe of the FBI’s considerable part in the Russia-Trump drama” in a column for Tuesday’s paper.

The editors noted Mueller’s close friendship with Comey, as well as his “reluctance to cooperate with” congressional oversight of the Russia investigation.

“The latest news supports our view that Mr. Mueller is too conflicted to investigate the FBI and should step down in favor of someone more credible,” the WSJ editors concluded. “The investigation would surely continue, though perhaps with someone who doesn’t think his job includes protecting the FBI and Mr. Comey from answering questions about their role in the 2016 election.”

In a column for the Washington Post Monday night, conservative radio host Hugh Hewitt called the Strzok bombshell “a blockbuster revelation, carrying the possibility of shattering public confidence in a number of long-held assumptions about the criminal-justice system generally and the FBI and the Justice Department specifically.”

Hewitt called on the Department of Justice to “appoint a special counsel to investigate Strzok’s actions as soon as possible.”

Even before the latest bombshell, former US attorney Andrew McCarthy was already warning about the credibility of Mueller’s investigation, which he said “started out as a fishing expedition.

“The ongoing Mueller probe is not a good-faith investigation of suspected espionage or other crime,” he wrote in National Review over the weekend.

“It is the exploitation of the executive’s intelligence-gathering and law-enforcement powers in order to (a) criminalize Trump political policies with which the Obama administration disagreed and (b) frame Clinton’s electoral defeat as the product of a traitorous scheme rather than a rejection of Democratic-party priorities.”


‘Iran Has Gotten Away With Murder Since 1979,’ Saudi Arabia Says

December 4, 2017

Haaretz Via Reuters

When Italy organized a conference focused on the Middle East, the Gulf and North Africa, it promised to look beyond the turmoil roiling the region and instead promote a “positive agenda.”
But many of the 45 heads of state, ministers and business leaders who attended the event over the past three days saw little future cheer.

Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani, captured the gloom, bemoaning “a lack of wisdom” in the region, with “no hope” on hand for ordinary people hoping for an end to years of conflict, upheaval and sectarianism.

“Maybe I have presented a dark picture, but it is not as dark as I have explained, it is darker,” said Thani, whose country is suffering an economic blockade by its Arab neighbors, which accuse Qatar of supporting

Qatar denies the accusations and the crisis has pushed the tiny, gas-rich state closer to Shi’ite Muslim Iran, the regional rival to Sunni Muslim Saudi Arabia.

The foreign ministers of both Iran and Saudi Arabia addressed the conference, taking turns to trade barbs.

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Saudi Foreign Minister Adel al-Jubeir

“Since 1979, the Iranians have literally got away with murder in our region, and this has to stop,” Saudi Foreign Minister Adel al-Jubeir said on Friday, accusing Tehran of interfering in the affairs of numerous Arab states, including Syria, Yemen and Lebanon.

A day earlier, on the same stage, Iranian Foreign Minister Mohammad Javad Zarif accused Saudi Arabia of blocking ceasefire efforts in Syria, “suffocating” Qatar, destabilizing Lebanon and supporting Islamic State.

Image result for Mohammad Javad Zarif, photos

Iranian Foreign Minister Mohammad Javad Zarif

He also dismissed suggestions that Tehran was meddling in the affairs of its troubled neighbors or that it should stop supporting militia groups, like Hezbollah in Lebanon.

Casting around for reasons to be positive, most speakers pointed to the defeat of Islamic State, which used to rule over millions of people in Iraq and Syria, but now controls just small pockets of land after months of fierce military assaults.

However, officials warned the group would not die easily.

“It has been defeated as a military force on the ground, but it is likely to go back to cities to create destruction and terror,” said Arab League Secretary General Ahmed Aboul Gheit, predicting the militant group could still be around in 10 years.

Iraq’s foreign minister bemoaned the destruction it had left in its wake, and called on the world to unite to help rebuild his country in the same way they had come together to fight ISIS.

“The world owes this to us,” said Ibrahim al-Jaafari. “A lot of destruction demands a lot of reconstruction. Mosul is not at all what it was like before. It used to be beautiful. It had a university. Now it is just ruins.”

Egypt’s Foreign Minister Sameh Shoukry warned that IS fighters fleeing Syria and Iraq had come to his country, where an attack on a mosque in Sinai last month had killed more than 300 people. They were also heading to lawless Libya, he said.

Amidst all the talk of war and chaos, there was little mention of diplomatic efforts to restore peace to the region.

“At a time when you have so many sources of tension, so many fuses, so many humanitarian catastrophes, you also have so little diplomacy,” said Robert Malley, vice president for policy at the non-governmental International Crisis Group.

Underscoring this point, no one from the White House administration took part in the conference – a signal some diplomats put down to a general disengagement from the Middle East by President Donald Trump. Last year, the then secretary of state, John Kerry, participated.


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Mick Mulvaney Is the True Pope

November 28, 2017

Once again, naked progressive overreach sets Donald Trump up for a win.

Protesters outside the Consumer Financial Protection Bureau headquarters in Washington, Nov. 27.
Protesters outside the Consumer Financial Protection Bureau headquarters in Washington, Nov. 27. PHOTO: JACQUELYN MARTIN/ASSOCIATED PRESS

Once upon a time, the world had two popes. Today we have two acting directors of the Consumer Financial Protection Bureau.

In 1378, two men each claimed the papacy. One was Urban VI, an Italian who was elected by cardinals in Rome. The other was Clement VII, who was elected by French cardinals and reigned from Avignon—where a succession of French popes had lived for most of that century.

Monday morning, Americans awoke to similar competing claims for who the real acting director of the CFPB is. Mick Mulvaney says he is the true acting director because he was appointed by President Donald Trump. Leandra English, a CFPB executive, says she is the true acting director because former Director Richard Cordray anointed her such on his way out. Unlike the 14th century, when pope and antipope held court in different countries, Mr. Mulvaney and Ms. English are not only in the same city—Washington—but claim the same physical office.

It’s not over. And as so often happens when progressives overreach so publicly, the likeliest winner will be President Trump.

Republicans, of course, have distrusted the CFPB since its inception. Partly the objection is practical, because its creation embodies the classic Beltway approach: rather than fix a broken regulatory system, throw another powerful agency atop the heap.

In this case, however, the objections are also constitutional. Philip Hamburger, a Columbia University law professor and author of “Is Administrative Law Unlawful?,” notes that the lack of democratic accountability almost defines the CFPB.

“This agency is so independent that it does not need congressional funding, and it now has declared itself self-appointing—even in opposition to the president’s appointee,” he says. “The CFPB is thus a reminder of how the administrative state can go to dangerous extremes.”

In this battle over legitimacy, Mr. Mulvaney boasts two impressive credentials. First, he was appointed by the man whom the Constitution gives authority over the executive branch, the president. Second, Mr. Mulvaney is on record as saying he doesn’t “like the fact that the CFPB exists.” If only more heads of more administrative agencies came to their jobs with such a healthy reservation about government power.

All of which gives Mr. Trump and the Republicans an unexpected opening. One perpetual difficulty with advancing regulatory reform is that it’s not a sexy issue, so it’s difficult to drum up public support. But the longer the absurdity at the CFPB goes on, and the more attention it generates, the more the American people will see that the CFPB’s lack of accountability was meant not as a bug but a feature.

On strictly legal terms, Mr. Trump’s hand is strong. A year ago, a three-judge panel of the D.C. Circuit Court of Appeals threw out provisions that insulated the CFPB director from presidential accountability and said the CFPB would do its job “as an executive agency akin to other executive agencies.” More recently, the Justice Department’s Office of Legal Counsel invoked the Vacancies Reform Act to uphold the president’s right to make this appointment. For good measure, even the CFPB’s own general counsel, Mary McLeod, says Mr. Mulvaney’s appointment by Mr. Trump is legitimate.

With Donald Trump, of course, it’s always possible that someone will find some federal judge somewhere who will allow personal antipathy for the president to get in the way of the law and the Constitution. But the arrogance on display this week by Ms. English & Co. should also invite congressional correction.

Behind the metaphor of “the swamp,” after all, is the idea, not without justification, that today’s Washington is far removed from government of, by and for the people. In this context the CFPB is a good proxy for the beau ideal of modern American progressivism: appointed bureaucrats, unaccountable to the elected representatives of the people, who wield their regulatory authority as a weapon. As if this were not outrageous enough, Ms. English argues the CFPB also has the right to self-perpetuate by the laying of hands on a successor by her predecessor when he leaves.


Leandra English, left, met on Monday with Senators Chuck Schumer and Elizabeth Warren. Ms. English, the deputy director of the Consumer Financial Protection Bureau, was set to become its temporary chief. Credit Carlos Barria/Reuters

On Monday Mr. Mulvaney took his place in the director’s office, brought doughnuts for employees and met with senior staff. Meanwhile Ms. English sent an email signed “acting director.” And just as France and Scotland recognized the antipope Clement VII, Sens. Chuck Schumer and Elizabeth Warren say they recognize Ms. English as the CFPB’s true acting director.

In the end, the rebellion at the CFPB is about far more than an acting director. The defiance is a gift to Republicans, giving them a rare political opening to clip the wings of an agency designed to go rogue—while highlighting to the American people what happens when federal power is divorced from democratic accountability.

Anyone really think Mr. Trump loses this one?

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Mueller Investigating Kushner’s Efforts to Combat UN Resolution Condemning Israeli Settlements

November 22, 2017

In the lead-up to the vote on the resolution, there were speculations that Russia could veto it, thus protecting Israel after the Obama administration decided to abstain

Amir Tibon (Washington, D.C.) Nov 22, 2017 8:07 AM


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Jared Kushner and Ivanka Trump attend a ceremony in the Rose Garden of the White House to pardon the National Thanksgiving Turkey, Washington, D.C., U.S., November 21, 2017. Andrew Harrer/Bloomberg

WASHINGTON – Robert Mueller, the special counsel investigating Russia’s interference in the 2016 U.S. presidential elections, is reportedly examining actions taken by Jared Kushner against a UN Security Council Resolution condemning Israeli settlements in the West Bank and East Jerusalem.

The Wall Street Journal reported on Tuesday that Mueller is looking into efforts made by Kushner, U.S. President Donald Trump’s senior adviser and son-in-law, against the resolution, which passed in December 2016, during the transition period between the Obama and Trump administrations.

The UN resolution against Israeli settlements in the West Bank was proposed by Egypt, and the Obama administration controversially decided not to veto it. Israeli officials reached out at the time to the Trump transition team, asking the president-elect to try and exert influence over different countries to block the resolution.

Trump, in turn, attacked the resolution on his social media accounts and called Egyptian President Abdel-Fattah al-Sissi, requesting he reverse his country’s support of the resolution.

In the lead-up to the vote on the resolution, there were speculations in the Israeli media that perhaps Russia could veto it, thus protecting Israel from the lack of a veto by the Obama administration. Eventually, however, Russia voted in favor of the resolution, as did all the 14 other members of the UN Security Council, except the U.S., which chose to abstain.

Trump took to Twitter following the vote, writing, in reference to his slated inauguration date: “As to the UN, things will be different after Jan. 20th.”

The White House, in turn, blamed the passage of the resolution on Prime Minister Benjamin Netanyahu’s settlement policies. “If we didn’t see acceleration in settlement activity and wouldn’t hear that kind of rhetoric from the Israeli government then maybe the U.S. would have taken take a different view,” then-Deputy National Security Adviser Ben Rhodes said.

Netanyahu, for his part, called the resolution “crazy,” accused the Obama administration of carrying out an underhanded, anti-Israel maneuver and assured the Israeli public that the resolution would be overcome.

Amir Tibon
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Bonfire of the Prosecutors — Special Prosecutor to investigate Hillary Clinton? — Political war of beltway media?

November 16, 2017

Political animosities are pushing the U.S. toward a significant political crisis.

Attorney General Jeff Sessions testifies during a House Judiciary Committee hearing on Capitol Hill, Nov. 14.
Attorney General Jeff Sessions testifies during a House Judiciary Committee hearing on Capitol Hill, Nov. 14. PHOTO: CAROLYN KASTER/ASSOCIATED PRESS

American politics has become an endless fox hunt. The hounds’ heads jerked up this week on news that Attorney General Jeff Sessions, responding to a request from House Judiciary Committee Chairman Bob Goodlatte, had asked the Justice Department’s career lawyers to look into the possibility of appointing a second special prosecutor, to investigate Hillary Clinton.

Set aside for a moment what the precise meaning of “investigate” might be. The day doesn’t pass anymore without a demand, from the Oval Office or the ozone, that someone should “look into” some political malefaction. Theoretically, we could have public officials being led to the executioner’s block weekly in Washington.

Indeed, the movement to name a second special prosecutor flows from the fact that the Washington press corps in January decided en masse to “look into” the notion that the Trump campaign had colluded with Russia to defeat Mrs. Clinton, a thought dropped into the water by the departing Obama administration.

What followed was a river of stories purporting Trump-Russian collusion. Months later, it remains true that the federal code recognizes no crime called “collusion.” Eventually the river of collusion stories joined with Oval Office mania over them to produce special prosecutor Robert Mueller.

A fiction exists that Mr. Mueller represents the “rule of law.” In truth, Mr. Mueller looks about as relevant as a lawyer wandering around the smoking battlefield at Gettysburg. We are in the midst of a multifront political war—between Republicans and Democrats, and President Trump and the Beltway media.

The central, contested issue in this war is the acceptability of Mr. Trump’s presidency. The Trump opposition believes that a Trump presidency remains unthinkable and abhorrent, so opposing it is a moral imperative. But however intense the imperative, it’s nothing more than that, because the formal politics are moot. Mr. Trump received more Electoral College votes than Mrs. Clinton.

But so deep is the antipathy to the existence of a Trump presidency—forget that someonehas to deal with North Korea’s nuclear-armed missiles, the Middle East or the U.S. economy—that the opposition has spent nearly a year hoping just one more Russian collusion story would . . . do what? Make Mr. Trump evaporate?

So there is a kind of delicious temptation to embrace the idea of a second special prosecutor to “investigate” the Clintons. Why not? A lot of people on the right and left have been spoiling for a street fight over the 2016 election, so let’s have it out. Light the torch and set off a bonfire of special prosecutors.

The people who brought us the Trump-Russia collusion narrative are now weeping crocodile tears that the appointment of a second prosecutor would mean that President Trump is politicizing and weaponizing the Justice Department. Oh my. They should have thought of that before they approved how the nation’s security agencies weaponized the press last January.

Time to sober up. A self-indulgent American political class, reveling in perpetual tumult, is pushing the U.S. toward a significant crisis. The appointment of a second special prosecutor would bring that crisis closer.

Primary U.S. institutions are already on thin ice with the American people. Start with the malperformance of institutions once thought trustworthy, whether the unprecedented collusion leaks from the intelligence agencies or James Comey’s ham-handed and too-public tenure at the FBI.

Mr. Mueller’s team of prosecutors represents a rebuke of the Justice Department’s credibility and standing. His first act, the Paul Manafort indictment, was a pre-existing case that Justice offloaded to Mr. Mueller. If Mike Flynn or anyone else has violated the Foreign Agents Registration Act, Justice should prosecute, not the deus ex machina of a special prosecutor.

Political accountability remains crucial in a system as open as ours, and historically the press has provided much of that oversight. That’s changed. The media’s referee role has morphed into relentless political tendentiousness.

The media dresses up its collusion stories with insinuations that something illegal has occurred. In fact, the criminal law’s traditionally high bar of proof is being replaced by a weaker, more volatile standard from prehistory. In short, where’s there’s smoke, there must be guilt, so erect a special prosecutor to concoct indictments. This is a formula for creating unappeasable political resentments. Pressure builds; the system blows.

If you want to hate Donald Trump, feel free. But a sane world would have dropped the Russia stuff months ago, just as a sane world would get over Hillary’s crimes so that what’s left of the country’s institutions could get back to normal governing.

It won’t happen. Politics as a permanent bonfire has become both a thrill ride and a business model. But let me wonder who benefits from this scenario:

The day that the Trump Justice Department names a Clinton special prosecutor will be the day Mr. Trump’s impeachment is guaranteed, if the Democrats take the House in 2018. After that, let ’er rip.


Appeared in the November 16, 2017, print edition as ‘Bonfire of the Prosecutors.’

Why Trump is sticking with Obama’s China hacking deal

November 8, 2017
Donald Trump and Xi Jinping are pictured. | AP Photo


The hacking agreement is not expected to be a major talking point when President Donald Trump meets on Wednesday in Beijing with Chinese President Xi Jinping (right). | Saul Loeb/Pool Photo via AP/File

President Donald Trump has broken with a host of Obama-era international agreements, from the Trans-Pacific Partnership to the Paris climate pact — but he’s showing every sign of sticking with a 2015 hacking accord with China.

Last month, the Trump administration quietly reaffirmed the agreement, which Republicans had initially greeted with skepticism. And business groups, cyber researchers and international policy experts say they see little reason for Trump to cancel the deal, especially as he’s pressing for China’s cooperation in curbing North Korea’s increasingly bellicose cyber and nuclear programs.

The hacking agreement is not expected to be a major talking point when Trump meets on Wednesday in Beijing with Chinese President Xi Jinping, whose country remains one of the most skilled and aggressive operators in cyberspace.

China appears to be largely complying with the 2015 deal, in which both countries pledged not to steal trade secrets from each other for the benefit of their domestic companies. That has helped calm the friction that once reigned between Washington and Beijing over cyber disputes, leaving Trump free to press his complaints with China on issues such as its protectionist regulations and unfavorable trade balance with the U.S.

“Having the cyber accord that we have helps to narrow the issues in dispute,” said Luke Dembosky, who worked on the 2015 U.S.-China cyber pact as a senior Justice Department official. “We need every bit of goodwill we can muster between our two countries on issues like North Korea. And we should, as a country, capitalize on the breakthrough that was achieved in fall of 2015.”

Perhaps most surprisingly to some, the deal has had its intended effect: Chinese-backed cyber theft of American trade secrets has dropped roughly 90 percent since the September 2015 accord, according to two leading digital security firms. Before then, analysts estimated that the thefts were costing the U.S. hundreds of billions of dollars a year.

“We saw the level of that activity drop off a cliff,” said Chris Porter, the chief intelligence strategist at FireEye, which closely tracks major Chinese-linked hacking groups. “At or near zero levels.”

Those same researchers, though, caution that Chinese hacking tactics may have mutated in recent months, once again threatening American businesses through means that push the boundaries of the 2015 accord.

The Trump administration has not made strong public statements either way regarding the U.S.-China cyber pact despite jointly pledging with China in October to continue implementing the deal.

“President Trump believes strongly in protecting intellectual property rights, which are a key part of a fair and reciprocal trade policy,” White House spokesman Marc Raimondi said via email. “We will be closely monitoring [China’s] adherence to both the letter and the spirit of the commitment.”

When Xi visited the White House in 2015, cyber tensions were at an all-time high between the two countries. It was widely believed that Beijing’s cyber spies had been behind the devastating theft that spring of more than 20 million sensitive U.S. government security clearance background-check files. And business groups were imploring the Obama administration to punish China over what they said was a pervasive hacking campaign to steal America’s trade secrets and erode the country’s competitive advantage, costing the U.S. up to $400 billion a year.

But instead of slapping Beijing with sanctions, Obama and Xi announced a mutual vow to end the type of theft that was enraging U.S. business leaders. Republicans — and even some Democrats — were immediately dubious that the diplomatic route would have any tangible effect on China’s behavior. And notably, the deal did not require either side to stop traditional cyber espionage, such as the theft of the U.S. background-check records.

However, just over two years later, the pact has held.

There has been a “massive reduction” in Chinese intrusions of American companies, said Dmitri Alperovitch, co-founder of the digital security firm CrowdStrike, which is working on a report analyzing China’s digital behavior since the agreement.

And it has allowed the two countries to focus more on their trade relationship, making it “a remarkable success” from that perspective, said Porter, of FireEye. “It shows that diplomacy can be used to reduce the cyber threat to Americans.”

Those who worked on the deal also believe it played a broader role in stabilizing U.S.-China relations and set a rare precedent for the international community on cyber norms, which have been notoriously difficult to pin down.

“These are two of the, if not the two, world leaders on cyber issues,” said Dembosky, now a partner at the law firm Debevoise and Plimpton. “So for them to reach any agreement on matters of cyberspace … has huge ripple effects in the international community in a positive way.”

China did not give up its expansive cyber efforts, though. Instead, the country shifted its focus to regional targets, training its digital spies on dissidents in Tibet and Hong Kong, as well as political, military and economic targets across Asia, CrowdStrike’s Alperovitch said. According to FireEye’s Porter, Chinese hackers were able to pilfer intellectual property — from other nations, like Japan — that was largely comparable to what they had been getting in the U.S.

At the same time, Xi was also restructuring his military. The increasingly powerful leader wanted to consolidate the country’s cyber army and rein in government-linked hackers moonlighting as rogue digital actors, a process FireEye detailed in a June 2016 report.

And there are recent signs that Beijing may be testing the limits of its 2015 promises.

In mid-2016, FireEye noticed that one prominent suspected Chinese hacking group had resurfaced, catching it infiltrating a U.S. information technology services firm in a likely attempt to gain access to the firm’s clients. Porter said FireEye had also discovered Beijing-linked hackers spying on corporate executives, giving them access to inside information that might eventually come in handy for Chinese investors looking to purchase an American firm or Chinese companies bidding on a U.S. project.

It’s unclear whether either strategy would technically violate the narrow terms of the 2015 agreement.

“I do think that it’s still too early to call victory here,” Alperovitch said.

Still, cyber watchers say that Trump should stick with the deal.

The U.S. gave up almost nothing in inking the agreement, they note, as it already had a long-established commitment to not steal corporate secrets for domestic economic gain. Plus, the deal established law enforcement channels to swap details on cybercrime, a valuable tool given China’s proximity to North Korea’s increasingly assertive cyber army. Researchers believe Pyongyang was behind a global malware outbreak earlier this year that froze tens of thousands of computer networks, costing businesses hundreds of millions of dollars. South Korea has also blamed its northern neighbor for the digital theft of war plans.

China may have enabled North Korea’s hacking operations by providing network bandwidth or even physical space for Pyongyang’s digital warriors, according to studies and media reports. Details are thin on what assistance China may currently provide.

“China may well be in a position to be able to provide information about North Korean cyber activities,” said Samir Jain, who helped craft the U.S.-China cyber deal as a senior director for cyber policy at the National Security Council. “To the extent that the Chinese can provide information about those actors or about servers or other infrastructure being used by North, then that would all be helpful.”

The White House also doesn’t appear eager to rock the boat over any possible noncompliance with the 2015 deal. A White House blog post about Trump’s upcoming visit to Beijing mentioned only the North Korea situation and “China’s unfair trade practices.”

Indeed, those “unfair trade practices” are where industry leaders’ concerns now lie. They worry that new Chinese cybersecurity regulations could force foreign technology companies to hand over software for “security” reviews before being allowed to enter China’s booming market. Trump recently ordered the U.S. trade representative to investigate the issue, setting up a potential showdown with Beijing on trade.

“We are at risk of a trade war,” Dembosky said. “It may be a cold trade war, but it’s certainly getting much hotter. If we don’t reach some understanding with China on the processes — and the fairness of the processes on both sides for evaluating these risks — then both counties will suffer.”

Eric Geller contributed to this report.


Paradise Papers spotlight Apple tax strategies amid GOP push to cut corporate rates

November 7, 2017


Paradise Papers spotlight Apple tax strategies amid GOP push to cut corporate rates

Image may contain: 1 person, eyeglasses and closeup

By Don Lee

The Los Angeles Times

For years, Apple and other multinational firms have faced inquiries from government authorities about tactics they employed to lower their tax bills.

Now, new published reports show just how some of these global corporations tapped elite tax specialists to devise clever strategies, including island havens and secretive shell companies, to avoid paying billions of dollars into government coffers.

The disclosures contained in the so-called Paradise Papers — documents and corporate records primarily from Bermuda-based law firm Appleby — immediately added fuel to the debate over the GOP’s tax proposal released last week, which includes slashing the corporate tax rate to 20% from 35%.

“We are all bearing witness to the consequences of Congress’ failure to address offshore tax haven abuse,” said Gawain Kripke, policy director for Oxfam America. “Yet congressional leaders are charging forward with a tax bill which has as its primary feature a massive windfall for offshore tax dodgers.”

The international antipoverty organization called for an immediate pause on the Republican tax bill and an investigation into the activities revealed by the Paradise Papers.

Apple, in response to reports based on the documents, on Monday defended its tax payments, saying the maker of iPhones is the largest taxpayer in the world and that the company “pays every dollar it owes in every country around the world.”

While critics have decried the Republican tax bill as a corporate handout, others argue that a tax overhaul is needed precisely because of the current system. They say the 35% tax rate leaves U.S. companies at a disadvantage against foreign rivals and motivates corporations to set up complex tax structures to reduce their tax burden, as well as to stash international profits abroad.

American businesses have long complained that the U.S. corporate tax rate is the highest among advanced economies, but the reality is that many American multinationals pay a much smaller percentage. The tax code is rife with many exemptions and special provisions, and tax lawyers and advisors have come up with creative methods to exploit loopholes in the system.

The result is that more than $100 billion in corporate tax revenue is lost annually by the U.S. government, according to analysts’ estimates. And while the American statutory corporate tax rate is among the highest, total U.S. corporate taxes collected, as a percentage of the economy, is about average for developed countries.

The House GOP tax plan would allow multinational companies to bring home an estimated $2.6 trillion parked in offshore entities at a rate of 12% or lower. Even so, tax policy experts doubt that the tax proposal would discourage U.S. firms from going abroad or reduce their penchant for devising tax shelters.

“I don’t think the tax overhaul is going to really address the flaws in our international tax rules,” said Eric Toder, co-director of the Urban-Brookings Tax Policy Center at the Urban Institute. “With a 20% [corporate tax] rate, I suppose that decreases the incentive to stash money overseas. On the other hand, you still want to get the rate down to zero if you can.”

Few companies are perceived to be as aggressive — and successful — in pushing down corporate taxes as Apple, making it a target of government investigations in the U.S. and Europe. One particular focus in recent years was how Apple had booked its massive earnings, much of it intellectual property generated in the U.S., to offshore tax shelters in Ireland.



Senate subcommittee in May 2013 claimed Apple had used various methods to avoid paying federal taxes on $44 billion of earnings from 2009 to 2012. Apple’s chief, Tim Cook, said at the Senate hearing then that the maker of iPhones pays “every single dollar” of taxes that it owes.

But not long after that Senate testimony, Apple sought a new strategy and, with the help of the legal- and tax-advisory firm Appleby, eventually found a new tax haven on a tiny island in the English Channel called Jersey, according to published reports based on the Paradise Papers.

These leaked records, originally obtained by a German newspaper, have been shared with the International Consortium of Investigative Journalists, which is made up of media organizations such as the New York Times, the Guardian in Britain and CBC in Canada. The Los Angeles Times is not a media partner.

In its statement Monday, Apple contended that there were a number of inaccuracies in the reports by the consortium.

“The changes Apple made to its corporate structure in 2015 were specially designed to preserve its tax payments to the United States, not to reduce its taxes anywhere else,” the company said. No operations or investments were moved from Ireland, said Apple, which noted that its effective tax rate on foreign earnings is 21%.

In addition to details of Apple’s tax-restructuring strategy, the Paradise Papers included information about the use of shell companies and other tax-reducing strategies by corporations such as Nike, Uber, Facebook and Allergan, as well as individuals.

Last year, the Obama administration sought to crack down on companies moving headquarters overseas, so-called corporate inversions, to avoid paying U.S. taxes. Officials also sought to curb another tax-avoidance practice in which multinational firms make loans or shift finances between affiliates to strip out earnings in higher-tax countries or take advantage of tax breaks such as interest deductions.

Follow me at @dleelatimes


Trump says time for ‘strategic patience’ with N. Korea is over

November 6, 2017


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President Trump and Japan’s Prime Minister Shinzo Abe shake hands in Tokyo Nov. 6. (Reuters/Jonathan Ernst)


Latest update : 2017-11-06

The time for “strategic patience” with North Korea is over, President Donald Trump said Monday, after winning Japan’s backing on his policy of considering all options to rein in the rogue state.

Trump has signalled in the past that Washington could look beyond a diplomatic solution to the North‘s nuclear weapons ambitions, and consider military intervention.

The North’s nuclear programme is “a threat to the civilised world and international peace and stability,” Trump told reporters on the second day of a trip to Asia dominated by the crisis.

“The era of strategic patience is over,” he declared alongside his host, Japanese Prime Minister Shinzo Abe.

The hawkish Abe, whose own nation has seen North Korean missiles fired over its northern island amid threats by Pyongyang to “sink” it into the sea, backed the bullish stance.

“We always support President Trump’s policy that all options are on the table,” in reining in North Korea over its provocative actions involving its nuclear and ballistic missile programmes, he said.

Abe announced Japan will freeze the assets of 35 North Korean groups and individuals as a new sanction.

The United Nations has adopted multiple rounds of sanctions against the reclusive North, the most recent in September following its sixth nuclear test and a flurry of missile launches.

Abe said the additional measures were aimed at punishing the North over its weapons program, as well as to attempt to resolve the issue of civilian abductions that took place in the 1970s and ’80s.

A number of ordinary Japanese citizens were kidnapped by North Korean agents in that era, in order to train spies in Japanese language and culture.

Trump will later Monday sit down with an elderly couple whose then 13-year-old daughter, Megumi Yokota, was kidnapped four decades ago while on her way home from school.

The president arrived in Asia with tensions over North Korea at fever pitch, as US bombers fly sorties over the Korean peninsula and concerns mount that Pyongyang might stage another nuclear or missile test.

Trump began his marathon trip in belligerent form, warning on Sunday that “no dictator” should underestimate US resolve, a clear swipe at North Korea and its young leader Kim Jong-Un.

However in a pre-recorded interview broadcast on US TV he held out the prospect of talks with Pyongyang, saying he would “certainly be open” to meeting Kim.

“I would sit down with anybody,” he said. “I don’t think it’s strength or weakness, I think sitting down with people is not a bad thing,” he said on the “Full Measure” show.

“So I would certainly be open to doing that but we’ll see where it goes, I think we’re far too early.”

Is Saudi Arabia Pushing Israel Into War With Hezbollah and Iran?

November 6, 2017


By Daniel B. Shapiro

What connects Lebanese PM Saad Hariri’s sudden resignation and Hezbollah’s assassination threat with Saudi Arabia and Israel? It’s all about Iran. But Israel must not be maneuvered by an impatient Riyadh into a premature confrontation

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Is Saudi Arabia pushing Israel into war with Hezbollah and Iran? Pictured: Israeli paratroopers walk a dirt road on their way to a Lebanese village during the second Lebanon War, Aug. 12, 2006 Emilio Morenatti / AP


Saad Hariri, who resigned Saturday as Prime Minister of Lebanon, always faced a no-win situation trying to serve in that role. His departure heralds the latest ratcheting up of tensions between Saudi Arabia and Iran playing out across the region, with significant implications for Israel.

Hariri is a good man, but not a natural political leader. His role as the leader of Lebanon’s Sunni bloc was thrust upon him by the assassination of his father, Prime Minister Rafik Hariri, in 2005.

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During his first term as prime minister, from 2009 to 2011, Saad chose, by design, to operate in his father’s imposing shadow. When I visited his compound in Beirut, I was struck not only by the opulent wealth and suffocating security arrangements, but by the extreme deference to Rafik’s memory. In the salon where he received guests, Saad sat in the second chair on the Lebanese side. The first was reserved for a black ribbon-draped portrait of his father.

But there was another force that thrust him into that role: his Saudi patrons. Saudi Arabia had long backed the Sunnis in Lebanon’s multi-sectarian political system and during the civil war. But they also provided a base and financial backing for the Hariri business empire. Hariri could not move right or left without Saudi support, nor could he rebuff their orders that he return to Lebanon as prime minister.

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Saad Hariri, Lebanon’s now former prime minister, at a joint press conference with U.S. President Donald Trump, at the White House in Washington, D.C. July 25, 2017Zach Gibson/Bloomberg
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During Hariri’s first term, he faced no end of headaches: Hezbollah-affiliated ministers in the cabinet who could bring down his government at any time; the unfinished business of the Special Tribunal investigating his father’s murder; and the taunts and bullying of Hezbollah’s ally, Bashar Assad in Syria. The certain knowledge that Hezbollah, backed by Assad, were the culprits in his father’s killing must have made each day a special kind of torture.

Those ressures all reflected Iran’s ongoing attempt to retain its influence in Lebanon, and recover the ground they had lost when the March 14 popular uprising following Hariri senior’s assassination resulted in the withdrawal of Syrian troops after 30 years.

With sustained support from Saudi Arabia and the United States, Saad Hariri withstood these pressures for a time. But Saudi support wavered in 2010, when Prince Abdulaziz, the son of then-King Abdallah, pursued a rapprochement with Assad. When Hariri refused to play along, Hezbollah withdrew its ministers from his government, bringing it down in humiliating fashion while Hariri met with President Barack Obama in Washington in January 2011.

As I watched his face across the Oval Office that day, Hariri seemed almost relieved.

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Saudi Crown Prince Mohammed bin Salman (known as MBS) poses while meeting with Turkey’s President Recep Tayyip Erdogan in Jiddah, Saudi Arabia. July, 23, 2017/AP

Knowing that history, I was frankly surprised when he returned to the premiership late last year, following a protracted government stalemate, so bad that even the Lebanese trash was not being collected. The logjam was only broken when Michel Aoun, a Christian ally of Hezbollah, ascended to the presidency.

Why would Hariri return under an even tougher set of circumstances than those that prevailed during his first term? Once again, because the Saudis made him an offer he couldn’t refuse.

But this was a new breed of Saudi rulers. King Abdallah had no love for Iran, whom he described as the head of the snake spreading poison throughout the Middle East. But he picked his spots for confronting his rivals, and cut his losses in Lebanon in 2011. His successor, King Salman bin Abdulaziz al-Saud, and his son Prince Mohammed bin Salman (MBS), seem determined to contest Iran from Yemen to Syria to Lebanon. Getting their man, Hariri, back to Beirut at least gave them a player on the field.

Hariri faced a truly impossible task. Hezbollah’s dominance of Lebanese politics has only increased. Despite continued U.S. support for the Lebanese Armed Forces, ostensibly a multi-confessional counterweight to the Shia forces, is has become increasingly clear that Hezbollah can intimidate, infiltrate, and when called upon, dominate them.

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Rescue workers and soldiers stand around a massive crater after a Hezbollah bomb attack that killed former Prime Minister Rafik Hariri in Beirut, Lebanon. Feb. 14, 2005/AP

The winding down of the Syrian civil war made it even worse. As long as the fighting raged, Hezbollah’s priority was shoring up the Assad regime, which has facilitated the conveyance of Iranian weapons into Hezbollah’s hands. As Assad’s future has been assured, under Russian and Iranian sponsorship, Hezbollah fighters have been returning home to Lebanon, and their leadership has been able to refocus on internal Lebanese battles.

Hariri has long known that as prime minister, he lived on borrowed time. At Hezbollah’s whim, at any moment, his father’s fate could become his own. It’s fair to say that the assassination attempt he alluded to in his resignation announcement represented a death threat he always faced. It was only a question of when Hezbollah would choose to operationalize it.

The bigger question is whether his resignation is a sign that the Saudis withdrew their support for him once again. At first blush, that would not seem consistent with King Salman and MBS’s overall desire to confront Iran’s proxies on every front.

But it is plausible that the Saudis are trying to create the context for a different means of contesting Iran in Lebanon: an Israeli-Hezbollah war.

Hezbollah leader Sheik Hassan Nasrallah delivers a video link message during Ashura, a 10-day ritual commemorating the death of Imam Hussein, in a southern suburb of Beirut, Lebanon. Sept. 30, 2017Hassan Ammar/AP

With Assad clearly having survived the challenge posed by Saudi-backed rebels, the Saudi leadership may hope to move its confrontation with Iran from Syria to Lebanon. By pulling Hariri out of his office, they may hope to ensure that Hezbollah gets stuck with the blame and responsibility for Lebanon’s challenges, from caring for Syrian refugees to mopping up Al Qaida and ISIS affiliates.

That could, the Saudis may believe, lead Hezbollah to seek an accelerated confrontation with Israel as a means of unifying Lebanese support for their dominance. As indicated in a different context – this week’s arrests of Saudi princes in a putative corruption crackdown – King Salman and MBS have little patience to establish their desired order.

Israeli leaders have been preparing for the next war with Hezbollah since 2006. Iran’s increasing assertiveness across the region makes clear that, even more than the last war, it will be a fight to diminish the Iranian threat on Israel’s borders. Israel and Saudi Arabia are fully aligned in this regional struggle, and the Saudis cannot help but be impressed by Israel’s increasing assertiveness to strike at Iranian threats in Syria.

Israel will have to make its own decision when the time is right for that fight. When the moment of truth arrives, Israel’s allies, with the United States in the lead, should give it full backing. An act of Iranian or Hezbollah aggression may well be the spark, as their malign intentions are perfectly clear.

But Israeli leaders will want to take care not to find themselves backed into a premature confrontation by the maneuvers of their allies who sit in Riyadh.

Daniel B. Shapiro is Distinguished Visiting Fellow at the Institute for National Security Studies in Tel Aviv. He served as U.S. Ambassador to Israel, and Senior Director for the Middle East and North Africa at the National Security Council, during the Obama Administration.

Twitter: @DanielBShapiro

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