Downer is definitely the wrong man for the job

By Achilleas Antoniades

Downer01

In early 2004 I took up my position as High Commissioner for Cyprus in Australia. I had many opportunities to meet with and speak to Mr. Alexander Downer, the then foreign minister of Australia. I want to recount two occasions that are directly relevant to the present debate about his role in resolving the Cyprus problem.

When I learned that his ministry was organising a visit by a high-ranking representative of the “TRNC” to Australia, I asked to see Mr Downer in his office. The meeting was cordial until the moment I protested at the initiative of his foreign ministry to host a representative of a “state” his own country did not recognise.

Mr Downer surprised me with an explosion of anger over my objections. He was not only unreceptive and insensitive but he lashed out at me in a totally unbecoming manner. “What is your problem?” he said. “Get over it. They are humans too. They need an opportunity to present their point of view.”

Of course he knew that it was not a humanitarian issue I was raising. It was an issue affecting directly the integrity of my country. He chose to ignore it. It turned out that his future agenda included a visit by the Turkish Prime Minister. This was obviously part of the preparation. Seeking favour from the Turks is not something Mr. Downer is not used to. All in the name of good relations based on the Australian experience at Gallipoli, going back to the first World War.

If Mr. Downer was prepared to give such recognition to the Turkish Cypriot regime then, is it any surprise that he now conducts visits to the office of the “Foreign Minister” in the occupied areas? Does his position as the Special Adviser of the UN Secretary General on Cyprus make any difference? Apparently not. Warnings had been provided at the time of his appointment. Don’t we wish we had done something then?

The second incident concerns one of Mr Downer’s annual speeches to the diplomatic corps. He spoke at length about his country’s relations with all areas of the world. I was amazed to notice that he did not say a word about his country’s relations with the European Union, something that did not escape the attention of other colleagues too. When I approached him, trying to inquire if this was an unintended omission, his usual explosive, even abusive manner came through: “F**k the European Union. Who is the European Union? There are other more important areas in the world,” he blasted out. My other EU colleagues were aghast.

This is the man we have trusted to help us solve our problem and integrate a united Cyprus into the European Union.

Achilleas Antoniades, Retired Diplomat, Deputy Chief of Mission to the USA, High Commissioner to Australia, Ambassador to the Czech Republic

Source: MIgnatiou.com

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The Spy Factory

The NSA   was founded in 1952 but only publicly acknowledged years later, which explains its nickname ‘No Such Agency.’

In this program, an eye-opening documentary on the National Security Agency by best-selling author James Bamford and Emmy Award-winning producer Scott Willis, NOVA exposes the ultra-secret intelligence agency’s role in the failure to stop the 9/11 attacks and the subsequent eavesdropping program that listens in without warrant on millions of American citizens.

The Spy Factory

PBS Airdate: February 3, 2009

NARRATOR: Halfway between Baltimore and Washington, D.C., is a hidden city, the headquarters of the National Security Agency, NSA. Here, tens of thousands of mathematicians, computer scientists, analysts, linguists and voice interceptors work in absolute secrecy.

JAMES BAMFORD (Author, The Shadow Factory): For those in the know, the joke was that NSA stood for “no such agency.” For those on the inside, the joke was that NSA stood for “never say anything.”

NARRATOR: NSA’s job? To secretly listen in on telephone conversations, email communications, anything and everything that might warn of plots to do harm.

ERIC HASELTINE (National Security Agency, Director of Research, 2002–2005): The scope of what happens at NSA is mind-boggling. I don’t think the average person can even begin to conceive of the staggering depth and breadth of what they have to do.

NARRATOR: But was NSA doing its job before the 9/11 attacks? It’s a question that has never been thoroughly investigated.

MICHAEL SCHEUER (Former Central Intelligence Agency Analyst): None of this information that we’re speaking about this evening is in the9/11 Commission Report. They simply ignored all of it.

NARRATOR: But author James Bamford has investigated and come up with a chilling tale of terrorists, living in San Diego, communicating with bin Laden’s operations center in Yemen, moving freely about, and all the while, NSA is listening in.

JAMES BAMFORD: But the NSA never alerted any other agency that the terrorists were in the United States and moving across the country towards Washington.

NARRATOR: Since the 9/11 attacks, NSA’s role has grown even bigger, along with its license to listen in on Americans here and abroad.

ADRIENNE KINNE (Former National Security Agency Voice Interceptor):It was incredibly uncomfortable to be listening to private, personal conversations of Americans. It’s almost like going through and finding somebody’s diary.

NARRATOR: But is this flood of information making America any safer? Looking into The Spy Factory, right now on NOVA.

Major funding for NOVA is provided by the following:

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And by the Corporation for Public Broadcasting, and by contributions to your PBS station from viewers like you. Thank you.

NARRATOR: On the southbound lane of the Baltimore-Washington Parkway, traffic is stalled as commuters crowd down a special restricted exit that disappears into the thick woods. Beyond, hidden from view and protected by electrified fences and heavily armed guards, is the largest, most secret and most technologically advanced intelligence agency in the world: the National Security Agency, NSA.

Its mission: making and breaking codes; tapping into foreign signals, sifting through the international phone calls, emails, text and instant messages that blanket the modern world.

Every day, more than 20,000 people flood into this secret city. Unlike undercover CIA operatives, spying in hostile territory, NSA’s spies use technology in what is believed to be the largest collection of mathematicians, linguists and computer scientists on the planet. Author James Bamford has written about NSA for the past 25 years.

JAMES BAMFORD: For the few in the know, the joke was always that NSA stood for “no such agency.” For those on the inside, the joke was that NSA stood for “never say anything.”

During the cold war, NSA circled nearly the entire Soviet Union with listening posts, to intercept military and diplomatic communications. NSA even listened in on Soviet leaders calling to the Kremlin from their limousines. At its headquarters in Fort Meade, Maryland, NSA used acres of supercomputers to break any coded communications.

NARRATOR: But when the Soviet Union collapsed, a new enemy emerged, one NSA was never designed to engage. That enemy was Al Qaeda. Eric Haseltine was NSA’s Director of Research.

ERIC HASELTINE: The Russians were easy to find and hard to kill, and terrorists are hard to find and easy to kill.

NARRATOR: Unlike the Soviets, Al Qaeda was a small, scattered, moving target. Headquartered in remote, mountain training camps, its soldiers communicated by cell and satellite phones.

ERIC HASELTINE: And if you look at the job of NSA, to find the enemy, they had to go from looking at an enemy that they kind of knew who they were and where they were, to one that they didn’t know who they were or where they were or how they communicated.

NARRATOR: For NSA, the challenge was to change tactics to match an increasingly dangerous adversary. In cities across Asia and the Middle East, Al Qaeda operatives were using public payphones and internet cafes to plan a series of strikes that would culminate in the 9/11 attacks.

TIM SAMPLE (Former Staff Director, United States Congress House Intelligence Committee): At that point, it was a race. It was a race between how much could we rebuild and have the type of capabilities that you need against an individual or a small group of individuals who operate around the world and pay little attention to borders. Can you do that? And can you rebuild the intelligence community in time?

NARRATOR: Those questions still resonate today. Was the National Security Agency, the organization responsible for intercepting foreign calls and messages, listening in on Al Qaeda prior to 9/11? What role did the NSA play? And are we any safer today?

Surprisingly, the 9/11 Commission never investigated the NSA’s role as fully as it did those of the CIA or FBI, but by carefully piecing together a variety of unclassified public records, the story of NSA and its role in the “war on terror” emerges.

JAMES BAMFORD: In my research, I used thousands of documents available in the public record. They included intelligence agency memos, transcripts of terrorist trials, and a secret FBI chronology of the 9/11 terrorists’ movements obtained under the Freedom of Information Act. One fact is clear from these sources: they were monitoring the Al Qaeda leader long before 9/11.

NARRATOR: In November, 1996, a known Al Qaeda contact buys an Inmarsat satellite phone from a store in a New York suburb. That phone is for Osama bin Laden. Once he starts dialing from Afghanistan, NSA’s listening posts quickly tap into his conversations. Analysts at the CIA, like Michael Scheuer—head of Alec Station, the CIA’s newly formed bin Laden tracking unit—are also eager to get the information.

MICHAEL SCHEUER: Osama bin Laden’s Inmarsat telephone was really a godsend. It gave us an idea, not only of where he was in Afghanistan, but where Al Qaeda, as an organization, was established, because there were calls to various places in the world.

NARRATOR: For NSA, tapping into satellite calls is a basic tactic in what’s known as “signals intelligence.” Inmarsat phones transmit signals straight to a satellite orbiting over the Indian Ocean. By tracking all calls in and out of Afghanistan, the NSA quickly determines bin Laden’s number: 873-682505331. Once they have this, they home in on both sides of his conversations, listening to bin Laden by means of a huge dish in space, and to the person he’s speaking to with a dish-shaped antenna on the ground.

MICHAEL SCHEUER: In the intelligence business, signals intelligence is among the most important kind of intelligence options that you have—the electronic communications that are in the air, whether from telephone to telephone, from satellite to satellite, from Inmarsat radio to Inmarsat radio—and NSA collects those with a very broad array of electronic collection capability, but once you collect them, all you have is the signals. And ultimately, it all comes down to the human being.

NARRATOR: Human analysts plot out which numbers are being called from bin Laden’s phone and how frequently. They quickly discover that most of the calls from bin Laden’s phone in Afghanistan are going to a house in Yemen, 2,000 miles to the south.

JAMES BAMFORD: Yemen is central to understanding how Al Qaeda operates. It’s where Osama bin Laden’s father was born and raised. It has a culture of clans and secrets. It didn’t surprise me that bin Laden chose its capital city, Sana’a, for his logistics and communications headquarters. What was surprising was that I found it tucked away in one of the city’s poorest neighborhoods. The headquarters was hidden in a small undistinguished house the CIA said was the home of one of bin Laden’s closest associates.

NARRATOR: Bin Laden’s phone calls aren’t encrypted, so there is no code for NSA’s supercomputers to break. Instead, NSA voice interceptors and linguists painstakingly translate, transcribe and write summaries of the calls. The summaries are shared with the CIA, but its analysts at Alec Station want more. They believe that only by carefully studying each word will it be possible to understand bin Laden’s intentions.

MICHAEL SCHEUER: Over time, if you read enough of these conversations, you first get clued in to the fact that maybe “bottle of milk” doesn’t mean “bottle of milk.” And if you follow it long enough, you develop a sense of what they’re really talking about. But it’s not possible to do unless you have the verbatim transcript.

We went to Fort Meade to ask then the NSA’s deputy director for operations for the transcripts, and she said, “We are not going to share that with you.” And that was the end.

NARRATOR: NSA declined NOVA’s repeated requests for interviews, but its policy since its founding has been to never share raw data, even with other intelligence agencies. Scheuer is so determined to get it, he persuades the CIA to build its own ground station. But without a satellite, he can only get half of the conversations.

MICHAEL SCHEUER: We would collect it, translate it, send it to NSA and ask them for the other half of it, so we could better understand it, but we never got it.

NEWSCASTER (8/7/98): A terrorist attack on Americans half a world away.

NARRATOR: August 7, 1998: Al Qaeda strikes two U.S. embassies in east Africa.

NEWSCASTER (8/7/98): The principle suspect is Osama bin Laden.

NARRATOR: Both NSA and CIA are monitoring the Al Qaeda network, but neither gives any warning of the two precisely timed attacks.

MICHAEL SCHEUER: Truth of the matter is, though, we had various reports from human intelligence sources within East Africa that there was an Al Qaeda operation brewing somewhere on the east coast of Africa. We could never really pin it down.

NARRATOR: The embassy attacks are technically on American soil, so the FBI is called in and finds out about the house in Yemen.

MARK ROSSINI (Former Federal Bureau of Investigation Supervisory Agent): I first learned about the communications center in Yemen when I got to Nairobi, after the embassy bombing there. That house was a focal point for operatives in the field to call in, that number would then contact bin Laden to pass along information and receive instruction back.

NARRATOR: With only a handful of ways to pin down bin Laden’s location—reconnaissance satellites, spies on the ground and signals intelligence—NSA’s expertise is becoming increasingly important.

ERIC HASELTINE: If you’ve only got very few people who are hiding out in a cave somewhere, you’re looking for a very small target and very few targets, as opposed to a big army division or a big missile complex. So, imagery intelligence was of relatively less value. Human intelligence, in an environment where a terrorist network is all relatives, blood relatives…it becomes tougher to get information in that kind of network.

I think one interpretation was that NSA understood that they were becoming more important, in the grand scheme of things, in the war on terror.

NEWSCASTER (10/12/00): An American ship is attacked in Yemen.

NARRATOR: October 12, 2000: Al Qaeda strikes again. This time, it’s an attack on the U.S.S. Cole, moored off the coast of Yemen.

NEWSCASTER: Yemen’s Port Authority had been penetrated…immediately suspect Osama bin Laden.

NARRATOR: Once again, the U.S. intelligence community fails to give a timely warning of the attack. Frank Blanco, NSA’s Executive Director at the time, says NSA was still stuck confronting terrorist tactics with Cold War technology.

FRANK BLANCO (National Security Agency Executive Director, 1999–2001): You’ve got targets that are very mobile. They use a variety of communications, which are cell phones, laptops. NSA had to begin to think about, “What is the real technology that is necessary and how much is it going to cost and where do we get the money?”

NARRATOR: Money is a pressing issue. After the Cold War, Congress had reduced NSA’s budget by a third, while criticizing it for violating privacy laws.

CONGRESSPERSON 1: …concerned about the privacy rights of American citizens.

CONGRESSPERSON 2: There is no legitimate excuse for that.

CONGRESSPERSON 3: It is intolerable to think of the United States Government, of big brother, or anybody else…

NARRATOR: By law, NSA was prohibited from spying on American soil without approval from a special court, created by FISA, the Foreign Intelligence Surveillance Act.

JAMES BAMFORD: When I interviewed General Michael Hayden, the head of NSA, I was surprised when he told me that they were monitoring less than half a dozen people in the United States. He was very busy fighting Hollywood’s image of NSA like you saw in movie, Enemy of the State.

GENE HACKMAN (Film Clip, Enemy of the State): The National Security Agency conducts worldwide surveillance. Fax, phones, satellite communications — they’re the only ones including the military who could possibly have anything like this.

ERIC HASELTINE: To us, in the intelligence community, movies likeEnemy of the State are quite amusing, because it made us look omniscient, we could collect anything we want and it’s just not that way. It’s not that way, at all. You may collect a lot of stuff, but you don’t know what you’ve got. Really, the biggest technology challenge was how do you deal with volumes of information like that and find dots, connect dots and understand dots. That’s the problem.

NARRATOR: In late December, 1999, NSA finds one very important dot: it intercepts an alarming call to the house in Yemen, instructing two Al Qaeda foot soldiers to fly to Kuala Lumpur, Malaysia, for what sounds like a terrorist summit. The foot soldiers are Khalid al-Mihdhar and Nawaf al-Hazmi. This is the phone call that sets in motion the 9/11 attacks.

JAMES BAMFORD: After picking up this critical call, NSA passed on their first names to the FBI and the CIA but not their last names. Nawaf’s last name had been in the NSA’s database for over a year, because of his association with bin Laden’s operations center in Yemen, but apparently the NSA never looked it up.

NARRATOR: The CIA does find al-Mihdhar’s name in its database. They ask security agents to make a copy of his passport as he passes through a checkpoint in Dubai. When analysts at CIA headquarters see it, they are astonished to find a valid U.S. visa inside. Alec Station, the CIA’s bin Laden unit, now has two FBI agents detailed to it, Doug Miller and Mark Rossini.

MARK ROSSINI: Once they arrived in Kuala Lumpur, of course, the CIA requested the intelligence service over there in Malaysia to conduct surveillance of these subjects and find out as much as they can. They took photographs, followed them. And you read from that one of the individuals had a visa to come to the U.S.

NARRATOR: Fearing an Al Qaeda terrorist may be headed to the U.S., the agents are determined to tell the FBI, but a CIA official will not allow it.

MARK ROSSINI: I guess I was the more senior agent. So I went up to the individual that had the ticket on the Yemeni cell, the Yemeni operatives. And I said to her, I said, “What’s going on? You know, we’ve got to tell the Bureau about this. These guys clearly are bad. One of them, at least, has a multiple-entry visa to the U.S. We’ve got to tell the FBI.”

And then she said to me, “No, it’s not the FBI’s case, not the FBI’s jurisdiction.”

So I go tell Doug. And I’m like, “Doug, what can we do?” If we had picked up the phone and called the Bureau, I would have been violating the law. I would have broken the law. I would have been removed from the building that day. I would have had my clearances suspended, and I would be gone.

JAMES BAMFORD: This is one of the most astonishing parts of the story. The CIA had FBI operatives working within their bin Laden unit, but when the FBI operatives found out that one, and possibly two, of the terrorists had visas to the United States, were heading for the United States, the CIA wouldn’t let them tell their headquarters that they were coming. Only the FBI could have put out alerts to stop Khalid al-Mihdhar and Nawaf al-Hazmi if they tried to enter the United States.

NARRATOR: January 15, 2000, Los Angeles International Airport: United Airlines Flight 2 arrives from Bangkok, where the CIA lost al-Mihdhar and al-Hazmi’s trail. They pass through U.S. Immigration undetected. Within two weeks they move into the anonymity of a San Diego suburb.

MARK ROSSINI: The FBI put together this chronology as part of its investigation into the 9/11 attack. The timeline, the declassified copy, is the movements and the activities of the hijackers while they are in the U.S., hiding in plain sight.

NARRATOR: They get drivers licenses in their own names. They use a local bank to pick up international wire transfers from a known Al Qaeda finance chief. Their telephone number is even listed in the San Diego white pages: Alhazmi Nawaf M 858-279-5919.

JAMES BAMFORD: The CIA was forbidden from operating within the United States, and the FBI didn’t know they were here, so the only way to track the terrorists was if NSA continued to monitor the conversations as they called back to the house in Yemen.

NARRATOR: But nine days after al-Hazmi and al-Mihdhar arrive in California, the NSA has a catastrophic failure.

FRANK BLANCO: I remember getting a phone call on January 24, 2000, that began with, “We have a problem.” NSA systems had actually stopped working.

NARRATOR: The most technologically advanced intelligence agency in the world, capable of monitoring millions of simultaneous conversations, is deaf.

FRANK BLANCO: NSA was brain-dead. It took probably three to four, maybe even five days to bring everything back up the way it was.

NARRATOR: It is unclear whether, during those five days, NSA misses any calls from the hijackers in San Diego. But what is certain, as the FBI chronology spells out, is that the hijackers waste no time settling into their new neighborhood.

MARK ROSSINI: Here, as it says in the chronology: February 5, 2000: al-Mihdhar signed a lease to rent an apartment at 6401 Mount Ada Road, in San Diego.

February 25: Al-Mihdhar purchased a Toyota Corolla, in San Diego, California.

February 28: records at Progressive Insurance Company verify Al-Mihdhar’s insurance policy, number 604725921-0, Huggy Bear Insurance Corporation.

March 20: the San Diego telephone number associated with Nawaf al-Hazmi made a call, which lasted 16 minutes, to Yemen.

NARRATOR: That is one of many calls made from San Diego to bin Laden’s operations center, the house in Yemen that NSA has been monitoring for over three years. But NSA would not pass on that information to any other intelligence agency. Eleanor Hill investigated NSA’s role in 9/11 for Congress.

ELEANOR HILL (Staff Director, United States Congress 9/11 Committee): We were very surprised to learn that, you know, they had this information. And if there are contacts from known terrorists in the United States with terrorist facilities abroad, that’s exactly the kind of information our intelligence community needs to have. They didn’t have it.

MARK ROSSINI: You put the NSA intel and the FBI intel together, you have both sides of the conversation. So they come in, we follow them, find out where they’re going; listen to their homes, listen to their conversations at their home, or cell phone, whatever; emails. The possibilities are endless once you’re able to peer into someone’s life.

JAMES BAMFORD: Incredibly, the NSA never informed the FBI that these calls were coming from the United States, and we may never know why. No one from NSA will discuss it, and the 9/11 Commission never investigated it. They either didn’t realize the two terrorists were calling from the United States—which is hard to believe because even I have caller I.D., which shows where calls are coming from—or what’s more likely is that they ignored it because then they would have had to hand the contacts over to the FBI.

NARRATOR: April 12, 2000: almost three months after the hijackers arrive in the U.S., NSA director Michael Hayden hints at another possible explanation for NSA’s silence. Already warned by Congress to respect Americans’ privacy rights, Hayden responds to the House Intelligence Committee with extreme caution.

GENERAL MICHAEL HAYDEN (National Security Agency Director, 1999–2005): Let me put a fine point on this. If, as we are speaking here this afternoon, Osama bin Laden is walking across the Peace Bridge from Niagara Falls, Ontario, to Niagara Falls, New York, as he gets to the New York side, he is an American person. And my agency must respect his rights against unreasonable search and seizure, as provided by the Fourth Amendment to the Constitution.

JAMES BAMFORD: But General Hayden knew that the law permitted the agency to eavesdrop on the terrorists without interruption if they entered the United States.

MARK ROSSINI: You could link back who they were, their connection to bin Laden, the connection to the Yemeni house, et cetera. You could have gone to any court, any judge in the FISA court and say, “We want a FISA on that residence in San Diego.”

It would have been easy. And we would have surveilled them, and we would have learned more information. People who are going to watch this, they’re going to say, “Oh, it’s hindsight 20–20.” But, no, I’m not talking hindsight 20–20. I’m talking basic, logical investigation.

NARRATOR: Again, the FBI chronology, compiled after the 9/11 attacks, describes precisely how al-Mihdhar and al-Hazmi begin training for their 9/11 operation.

MARK ROSSINI: April 4, 2000: Nawaf al-Hazmi received one hour of introductory flight instruction from the National Air College, located at 3760 Glenn Curtis Road, San Diego.

May 4: Khalid al-Mihdhar debit card purchase: two Jeppesen training kits.

June 10, 2000: Al-Mihdhar departed U.S. via Lufthansa Flight 457 from Los Angeles, California to Frankfurt, Germany.

NARRATOR: Khalid al-Mihdhar is heading home to see a newborn son. For the next 13 months he will live with his wife and baby in the house in Yemen, the house NSA is monitoring. He will even apply for a new U.S. visa, and, incredibly, he will get it.

December 8, 2000: Hani Hanjour, another 9/11 hijacker, touches down in San Diego. Three days later he joins Nawaf al-Hazmi on a road trip to New Jersey, where the rest of the hijackers are assembling. Once more, the FBI chronology, compiled after the attacks, documents their five-month trip.

MARK ROSSINI: March 1, 2001: Hanjour has eight hours of simulator training at Jet Tech.

April 1: Nawaf al-Hazmi received a speeding ticket and received a summons for failure to wear a seatbelt.

May 1: Al-Hazmi filed a police report with Fairfax County, Virginia, police department, alleging he was mugged by an unknown black male.

NARRATOR: June 21, 2001: a reporter from the Middle East Broadcasting Corporation interviews bin Laden’s lieutenants in Afghanistan. They hint that a major attack may soon take place. U.S. forces in the Mideast are put on the highest alert.

After the interview is released, NSA’s traffic analysis detects a huge spike of threatening communications.

ELEANOR HILL: There was a great anticipation that there was going to be an attack on U.S. interests by Al Qaeda. Most people believed it was going to be overseas. And so, tragically, their focus was on their job, which was looking overseas and not so much on what was happening in the U.S., which they viewed as the FBI’s job.

MARK ROSSINI: As the chronology goes on: July 4, 2001: Al-Mihdhar entered the U.S. on Saudi Arabian Flight 53, via J.F.K., in New York City, using a B1 business visa and listing his intended address as the Marriot Hotel, New York City. That was the Marriot Hotel at the World Trade Center.

NARRATOR: To make final preparations for their attack, al-Hazmi, al-Mihdhar and Hanjour drive south on the New Jersey Turnpike. They avoid staying in large cities. They avoid hotel chains with computerized registration. Instead, the crew drives into the Maryland town of Laurel and checks in to the low-budget Valencia Motel. By now they have their final assignment, targeting the Pentagon.

JAMES BAMFORD: Throughout their whole journey, whether they were in San Diego or they were in New Jersey or they were in Laurel, Maryland, they were communicating back and forth to the bin Laden ops center in Yemen. NSA was listening in on the ops center, recording the conversations and then transcribing them. But the NSA never alerted any other agency that the terrorists were in the United States and moving across the country, towards Washington.

NARRATOR: On the face of it, Laurel, Maryland, looks like a typical Washington suburb.

JAMES BAMFORD: What’s very different is that this town happens to be right next door to NSA’s headquarters.

NARRATOR: While NSA has detected a spike in communications threatening an imminent attack, Bin Laden’s hit men have taken refuge right in their backyard.

MARK ROSSINI: August 18: Hani Hanjour rented mailbox number 433.

The day before the hijacking: Nawaf al-Hazmi, Walmart, $36.65; Food Factory, Khalid al-Midhar.

9/6/2001: Nawaf al-Hazmi, Khalid al-Midhar, Hani Hanjour: Gold’s Gym, Greenbelt, Maryland.

JAMES BAMFORD: The hijackers seemed to blend in very well. Even when they shopped for improvised weapons for the hijackings, they shopped in a Target Store just down the street from NSA. No one thought what they were doing was suspicious.

So here you have these two groups of people: one, the terrorists who were plotting the largest terrorist operation in U.S. history. And you have NSA, which had been listening to some of their phone calls for years. And now they are living side by side, neither of them knowing that the other is there.

What was really tragic is that if General Hayden had looked out his eighth floor window, west, towards Laurel, just two miles away, he could have almost seen the motel in which the hijackers were living. I mean, it’s one of the biggest ironies in the history of American intelligence.

NARRATOR: On the day of the 9/11 attacks, most of NSA’s employees are ordered to leave their headquarters. Afraid that NSA might be another target, some of the few who remain move from their upstairs offices to lower floors. Others tack up black curtains to block their windows. They seem to have no idea what their own agency and the CIA both knew but had said nothing about.

ELEANOR HILL: Had we been able to realize how significant that was, put it together and get it to the agencies who could have made use of it in time, would there have been a different end to the 9/11 story?

MARK ROSSINI: I can’t come up with a rational reason why I didn’t break the rules, pick up the phone, and tell that the hijackers, or really bad guys, are in the U.S. And I don’t know if I’ll ever be able to come to terms with that. I don’t know. I really don’t know.

MICHAEL HAYDEN: On the 13th of September, I gave an address to an empty room, but we beamed it throughout our entire enterprise, about free peoples always having to decide the balance of security and their liberties, and then I told the workforce, there are going to be a lot of pressures to push that banner down toward security, and our job at NSA was to keep America free by making Americans feel safe again.

NARRATOR: Those pressures aren’t long in coming. When Hayden is asked by Vice President Cheney what more NSA can do, he answers, “Not much, without breaking FISA laws,” the laws force that force NSA to obtain a warrant to listen in on Americans.

Three weeks after the attacks, President Bush bypasses those laws, by secretly issuing an executive order: NSA will no longer have to worry about obtaining warrants to eavesdrop inside America. If 9/11 was a wake-up call, the response is a license to listen to almost anything and everything.

TIM SAMPLE: And part of that wake-up call, certainly right after 9/11, included the fact that you needed to take some strict measures. You needed to take some action that would allow you to not let that happen again.

NARRATOR: But to make the new program work, Hayden must finally bring the National Security Agency into the modern age. The backbone of global communications had moved from easily intercepted satellite signals in space, to fiber optic cables buried under the ocean. To understand the challenge NSA faces, NOVA follows one email message as it circles the globe.

In Malaysia’s capital city of Kuala Lumpur, James Bamford is researching Al Qaeda’s communications network. In a busy cafe, he types out an email message to NOVA’s producers, in Boston. Bamford’s message is harmless but contains the kinds of keywords and phrases that NSA supercomputers are programmed to detect, phrases like “blow up the White House,” “destroy the Capitol building,” “biological warfare.”

When he presses “send,” Bamford’s message is instantly mixed in with dozens of other messages on the same wireless network, then routed to a large telecommunications center in the city. There, voice calls are converted from analog to digital signals and streamed, as pulses of light, through a fiber optic cable that dives into the South China Sea, off Malaysia’s Coast.

Along the way, Bamford’s message is merged with thousands of phone calls, emails and faxes, in dozens of languages, from hundreds of Asian cities. The jumble of data crosses under the Pacific Ocean at the speed of light.

Just five hundredths of a second after the message was sent, it comes ashore, six feet under this lonely stretch of California beach, near Morro Bay. There, beneath screeching gulls and surfers in wet suits, Asian communications stream in. A few miles inland, the message passes through a small, nondescript building near San Luis Obispo.

JAMES BAMFORD: If you want to tap into international communications, it seems like the perfect place is San Luis Obispo. That’s where 80 percent of all communications from Asia enters the United States.

NARRATOR: But under NSA’s new orders, they don’t tap in here. Instead the cables run straight from San Luis Obispo to a building in San Francisco.

The building, at 611 Folsom Street, is AT&T’s regional switching center. All the international traffic snakes up to the seventh floor, and it is here that a crucial change takes place. The seventh floor is also where AT&T’s domestic traffic is routed—a cacophony of millions of conversations: cries and laughter, hopes and dreams, emails, faxes, bank statements, hotel reservations, love poems and death notices, all sent by people from inside the United States. The only thing they have in common is a reasonable expectation of privacy.

NARRATOR: In 2003, an AT&T engineer notices that the cables on the seventh floor have been rerouted, and a mirror image of all the traffic, both domestic and international, is now being sent to a secret room one floor below.

MARK KLEIN (Former AT&T Technician): It was obvious that this was some kind of NSA installation. I figured out that what they were doing was a blind wholesale copying of the entire internet data flow. And this meant randomly scooping up huge amounts of purely domestic data, as well as international data.

BRIAN REID (Internet Systems Consortium): When I hear the word wiretap, I’ve always imagined some person in a trench coat and a black hat and sunglasses, skulking around after dark, secretly tapping into a wire and hoping that no one notices. But what they’ve done in that facility is by full light of day, they’ve cut the fiber optic cables and then reconnected them in a splitter. What they have built is a facility that is capable of monitoring absolutely all data communication through it.

NARRATOR: Brian Reid, a communications expert, has examined AT&T’s internal documents that Klein provided. They show that the secret room contains electronic equipment specifically designed for signals intelligence, equipment programmed to sift through millions of messages, searching for keywords like the ones Bamford sent from Kuala Lumpur.

BRIAN REID: The most curious piece of equipment in that room is a completely flexible monitoring system that can be told on a moment’s notice, “Please monitor all conversations that contain the word hummingbird. Please monitor all conversation that goes to Mobile, Alabama. Please monitor all conversations that contain both the word hummingbird and go to Mobile, Alabama.”

NARRATOR: NSA has turned its giant ear to listen in on America.

BRIAN REID: Based on everything I know, I believe that there are between 15 and 30 of these secret rooms around the U.S.

NARRATOR: The post-9/11 rules authorized NSA to listen in to Americans both inside and outside the U.S., without any special court approval.

ADRIENNE KINNE: After 9/11, we were essentially put in charge of a new system which intercepted satellite phone communications in Iraq and Afghanistan and surrounding areas.

NARRATOR: Calls and data from the Middle East and North Africa are collected and relayed to a listening post, tucked in the hills, outside Augusta, Georgia. As a voice interceptor, Adrienne Kinne listened to some of those calls. Assigned by the Army to NSA, she was called back to active duty after 9/11.

ADRIENNE KINNE: For a voice interceptor, the computer system would essentially pop up, and it would be very similar, I would say, to iTunes, where you could just go through and click on various conversations, and it would have the phone number, the time up, time down. We were told that we were to listen to all conversations that were intercepted, to include those of Americans and other allied countries.

NARRATOR: Some of those conversations are personal, some even intimate.

ADRIENNE KINNE: And there was no directive to say that when you had conversations like this come through, that you should delete them. That’s what we did when I was on active duty in ’94 to ’98. We would never collect on an American. I had a real problem with the fact that people were listening to it and I was listening to it. The time that that interceptor, that voice interceptor, is spending listening to conversations in the States, that’s time that they can’t spend looking or listening for actual conversations related to terrorist organizations.

NARRATOR: As NSA began tapping in to fiber optic cables as well as satellites, information began to flood in like never before.

According to a Congressional study in 2008, some intelligence data sources grow at a rate of four petabytes—that’s four quadrillion bytes—per month, the equivalent of 12 filing cabinets of new information for every American citizen, every year. But what does it all mean?

ERIC HASELTINE: Computers, today, tell people what things are: “Here’s some data that you asked for.” They don’t tell you what it means. So there is some work going on to try to marry the power of computers to the power of humans.

NARRATOR: Specialized software can help extract important information based on context and meaning. Dr. Robert L. Popp does advanced research on these kinds of programs, known as classifiers.

DR. ROBERT L. POPP: Say you wanted to build a classifier for Al Qaeda, the term, the concept, Al Qaeda. The way it would work is you, as an analyst, would go find all these documents—whether they’re emails or things on the web or whatever—but all these documents that in your judgment are narratives associated with the concept of Al Qaeda.

NARRATOR: In the future, by refining the software and harnessing enough computing power, these classifiers could potentially reduce the mountain of information human analysts have to examine.

ERIC HASELTINE: So the next frontier may be, “Computer, do you see any unusual associations that I didn’t think to ask you about that I ought to have asked you about when it relates to a threat against the homeland?”

NARRATOR: But most experts agree that may take decades. And it could only help mine information in documents, emails and faxes. When it comes to human conversations, technology is of little help. It still takes people wearing headphones and listening in.

DAVID MURFEE FAULK (Former National Security Agency Voice Interceptor): I decided, a couple weeks after 9/11, to enlist, and go do Arabic. And I hoped to go hunt Osama at that time.

NARRATOR: David Murfee Faulk was one of the thousands of new linguists trained to work in the trenches of NSA’s signals intelligence operations.

DAVID MURFEE FAULK: NSA spends literally billions of dollars to obtain signals, to process them, move them from place to place without people knowing, to get them to an end user, a translator who can make some sense of them and write up a transcription.

What I found was a large number of translators simply not meeting minimal requirements in language skills, basically running some very expensive, very complicated equipment, without the kind of knowledge or context that they would need to do that properly.

NARRATOR: Before 9/11, the budget for U.S. intelligence was $26.7 billion. By 2008 that budget nearly doubled. NSA’s portion is secret, but believed to be over a third, more than the departments of Treasury, Interior or Labor. Its ranks have swelled to over 35,000.

TIM SAMPLE: Given all the additional money spent now, on rebuilding the intelligence community and its capabilities, are we really safer as a nation? I think generally, for me, the answer is yes—the fact that we haven’t had another attack, the fact that we have better coordination and better information-sharing. Are we to the point where we can relax and put our guard down? No. I think if we do, then we run the risk of changing the answer.

ELEANOR HILL: It’s very, very hard to draw a hard and fast line between where foreign intelligence stops and domestic intelligence starts. That doesn’t mean we want our foreign intelligence agencies on every street corner in America. But it does mean that you have to have very good communication and coordination between the foreign intelligence agencies, like the CIA and NSA, and our domestic agencies, like the FBI,

because if you don’t, things are going to slip between the cracks. And that’s exactly what happened with 9/11.

JAMES BAMFORD: The problem with reporting on a story like this is that you’re really searching in the dark. There’s no way to sit on the outside and really know what’s going on on the inside.

And, without an official inquiry, some questions can’t be answered: Why did the NSA fail to act or pass on information that could have warned of 9/11? Why didn’t it share information with the CIA and FBI that could possibly have stopped the plot?

As for the question of whether we are any safer now than we were before, we should have been safe the way it was. NSA had all the information that it needed to stop the hijackers, and it already had laws that allowed it to track them. So now, with NSA’s new rules, with all the money it’s spent, with all the data it collects, is NSA doing a better job or is its job that much harder because it’s just being flooded with data? How much information is enough, and won’t too much information end up making the world more dangerous?

Source: pbs.org/wgbh/nova/military/spy-factory.html

NSA Spying on Americans

The US government, with assistance from major telecommunications carriers including AT&T, has engaged in a massive program of illegal dragnet surveillance of domestic communications and communications records of millions of ordinary Americans since at least 2001.

News reports in December 2005 first revealed that theNational Security Agency (NSA) has been intercepting Americans’ phone calls and Internet communications. Those news reports, combined with a USA Today story in May 2006 and the statements of several members of Congress, revealed that the NSA is also receiving wholesale copies of American’s telephone and other communications records. All of these surveillance activities are in violation of the privacy safeguards established by Congress and the US Constitution.

The evidence also shows that the government did not act alone. EFF has obtained whistleblower evidence [PDF] from former AT&T technician Mark Klein showing that AT&T is cooperating with the illegal surveillance. The undisputed documents show that AT&T installed a fiberoptic splitter at its facility at 611 Folsom Street in San Francisco that makes copies of all emails web browsing and other Internet traffic to and from AT&T customers and provides those copies to the NSA. This copying includes both domestic and international Internet activities of AT&T customers. As one expert observed “this isn’t a wiretap, it’s a country-tap.”

EFF is fighting these illegal activities in the courts. Currently, EFF is representing victims of the illegal surveillance program in Jewel v. NSA, a lawsuit filed in September 2008 seeking to stop the warrantless wiretapping and hold the government and government officials officials behind the program accountable.

Previously, in Hepting v. AT&T, EFF filed the first case against a cooperating telecom for violating its customers’ privacy. After Congress expressly intervened in the FISA Amendments Act to allow the Executive to require dismissal of the case, the case was ultimately dismissed by the US Supreme Court.

Source: Electronic Frontier Foundation ( eff.org/nsa-spying )

Εξουσιαστές και Πρόθυμοι Εξουσιαζόμενοι

Του ΜΑΡΙΟΥ ΕΥΡΥΒΙΑΔΗ

Έχετε μήπως «μπερδευτεί» με όλα όσα ακούτε ή διαβάζετε αναφορικά με τον Αμερικανό φυγά Edward Snowden  και για τις κατηγορίες εναντίον του; Ότι αποκάλυψε πως λειτουργεί το αμερικανικό σύστημα παρακολούθησης , συλλογής και αποθήκευσης όλων των ηλεκτρονικών δεδομένων του κόσμου, συμπεριλαμβανομένου και των  εντός Αμερικής, δηλαδή αυτών που ανταλλάσσονται αναμεταξύ Αμερικανών πολιτών;

Για το τι ακριβώς συμβαίνει και γιατί συμβαίνει;  Και τι σημαίνει για τον καθένα μας προσωπικά όταν χρησιμοποιούμε το σύγχρονα ηλεκτρονικά μέσα για να επικοινωνούμε, να αγοράζουμε, να πουλάμε, να αγαπιόμαστε; Όταν για παράδειγμα οδηγούμε με τα σύγχρονης τεχνολογίας αυτοκίνητα που διαθέτουν το «δικό» τους σύστημα ελέγχου και οδήγησης – το δικό τους δηλαδή «μυαλό» που μπορεί να λειτουργήσει  ανεξάρτητα από τη βούληση αυτού που κρατά το τιμόνι;

Χωρίς να θέλω να μεταφέρω κάποιο αίσθημα υστερίας ή παράνοιας θα αρχίσω από το τελευταίο. Το σύγχρονης τεχνολογίας αυτοκίνητο μπορεί να λειτουργήσει εκτός βούλησης του οδηγού! Μπορεί δηλαδή να ελεγχθεί ηλεκτρονικά από κάποιον τρίτο εξ’ αποστάσεως και να το κάνει αυτός ό,τι θέλει, ρίχνοντάς τα ακόμα και στον γκρεμό!

Τις μέρες αυτές στην Αμερική μια σημαντική μερίδα περιθωριακών ΜΜΕ ασχολούνται εντόνως με το θάνατο από αυτοκινητιστικό ατύχημα ενός πολύ σημαντικού δημοσιογράφου, του Michael Hastings. Το ατύχημα συνέβη στις 18 Ιουνίου  στις τέσσερις το πρωί σε δρόμο του Λος Άντζελες. Ο Hastings οδηγούσε μόνος του ένα καινούριο Mercedes, έχασε τον έλεγχο, το αυτοκίνητο καρφώθηκε στο περιτοίχιο, ακολούθησε μια τρομακτική έκρηξη και μόνο μέσω DNA μπορούσε να διαπιστωθεί η ταυτότητα του νεκρού. Τις προηγούμενες μέρες ο Hastings, του οποιου η διερευνητική δημοσιογραφία τον είχε καταστήσει «στόχο» του συστήματος, έστειλε μηνύματα σε φίλο του ότι η FBI τον είχε παρακολουθήσει και ότι θα ήθελε για κάποιο χρονικό διάστημα να περιορίσει τα γραφόμενά του και να λειτουργήσει «εκτός ραντάρ».

Μέχρι στιγμής δεν υπάρχει κανένα τεκμήριο ότι ο Hastings δολοφονήθηκε. Μόνο εικασίες. Αλλά με αφορμή το γεγονός υπήρξαν δημοσιεύματα και αναφορές σε σοβαρές επιστημονικές μελέτες ότι το σύγχρονο αυτοκίνητο είναι δυνητικά εξαιρετικά επικίνδυνο για τον οδηγό και τους επιβάτες του, διότι μπορεί να ελεγχθεί εξ΄αποστάσεως από αυτοκίνητοπειρατές. Και αυτό τεκμηριώνεται από πολύ υψηλού επιπέδου επιστημονικές μελέτες και πειράματα (οι άπιστοι Θωμάδες παραπέμπονται στο κείμενο του Andrew Leonard  “Hacking a car is way too easy” στο ηλεκτρονικό περιοδικό Salon.com, 25 Ιουνίου 2013 και στα links , ειδικά στα κείμενα “Experimental Security Analysis of a Modern Vehicle” και “Comprehensive Experimental Analyses of Automotive Attack Surfaces”.

Επανέρχομαι όμως στο βασικό ερώτημα που έθεσα. Τι σημαίνουν και τι σηματοδοτούν οι αποκαλύψεις Edward Snowden; Καταρχάς όλα όσα λέει ο Snowden  δεν είναι καινούρια, έχουν την ιστορία τους και ανάγονται στη μεταπολεμική εποχή. Ως τέτοια αφορούν στην στρατηγική των ΗΠΑ να διαμορφώσουν  και να ελέγξουν το μεταπολεμικό κόσμο με το λιγότερο για αυτούς κόστος. Μια από τις μεθόδους που επέλεξαν ήταν η συστηματική παρακολούθηση όλων των επικοινωνιών όλου του κόσμου, με επίκεντρο τον κύριο ανταγωνιστή και δυνητικό αντίπαλο τη Σοβιετική Ένωση.

Αρχίζοντας από τη Σοβιετική Ένωση και ανάλογα με την τεχνολογική πρόοδο, οι παρακολουθήσεις διευρύνονταν συνεχώς και σήμερα καλύπτουν όλο τον κόσμο. Παλιά, επί Ψυχρού Πολέμου, οι τεχνολογικές ικανότητες των υπολογιστών δεν επέτρεπαν την αποθήκευση όλων των δεδομένων. Έτσι, πολλά καταστρέφονταν. Σήμερα αυτό δεν ισχύει και για αυτό όλα αποθηκεύονται.

Όλα άρχισαν το 1947 με την αμερικανική νομοθεσία, γνωστή ως National Security Act of 1947. Τότε δημιουργήθηκε η CIA, και η NSA – National Security Agency που σήμερα είναι ο κυρίαρχος θεσμός παρακολούθησης των πάντων. Είναι τα αρχεία και μυστικά της NSA  που διέρρευσε ο φυγάς Snowden.

Το 1947 οι ΗΠΑ υπέγραψαν μια συμφωνία με Αγγλο-σαξονικές χώρες, την Βρετανία, τον Καναδά, την Αυστραλία και τη Νέα Ζηλανδία (γνωστή ως UKASA) που αποτέλεσε το βασικό κορμό του παγκόσμιου συστήματος παρακολούθησης. Θεωρητικά, αυτή ήταν μια συμμαχία ισότιμων εταίρων. Στην πράξη, οι υπόλοιποι λειτουργούσαν ως  υποτελείς της Ουάσινγκτον και σε τέτοιο βαθμό μάλιστα που ακόμα και αυτοί υφίσταντο παρακολούθηση από την Ουάσιγκτον. Και όπως αποκάλυψε ο Snowden η παρακαλούθησή τους συνεχίζεται μέχρι τις μέρες μας.

Αρχικά η παρακολούθηση λάμβανε χώρα σε τρία επίπεδα. Αυτά ήταν το επίπεδο ELINT (Electric Intelligence), RADINT (Radar Intelligence) και COMINT (Communication Intelligence). Τα πρώτα δύο αφορούσαν στο σπάσιμο των κωδικών των αντιπάλων (της Σοβιετικής Ένωσης) και τη δημιουργία αντιμέτρων. Το τρίτο, το COMINT,  ήταν το πιο σημαντικό και αφορούσε το 95% της όλης παρακολούθησης. Μέσω του COMINT οι Αμερικανοί γνώριζαν όλο το σύστημα άμυνας των Σοβιετικών (αλλά και του υπόλοιπου κόσμου συμπεριλαμβανομένων όλων των συμμάχων τους) καθώς και όλα τα «προσωπικά» της εκάστοτε ηγεσίας του Σοβιετικού Πολιτπιούρο. Γνώριζαν μέχρι και τις εξωσυζυγικές τους σχέσεις.

Ο υπόλοιπος κόσμος άρχισε να μαθαίνει τις δυνατότητες των Αμερικανών λόγω κυρίως διαρροών από αμερικανούς αντιφρονούντες, όπως τον σημερινό Snowden. Καταλυτικό γεγονός για τις αποκαλύψεις ήταν ο Αμερικανικός πόλεμος στο Βιετνάμ που δίχασε την αμερικανική κοινωνία.  Η πρώτη καθοριστική διαρροή ήταν αυτή που έγινε από τον αξιωματούχο του Πενταγώνου Daniel Ellsberg που μας έδωσε τη μυστική ιστορία της αμερικανικής εμπλοκής στο Βιετνάμ, τα γνωστά Pentagon Papers (διαθέσιμα στο διαδίκτυο). Η διαρροή Ellsberg εξέθεσε την αμερικανική κυβέρνηση ως μαζικά και συνειδητά ψευδόμενη έναντι του λαού.

Η δεύτερη διαρροή, εμπνευσμένη από τον Ellsberg, υπήρξε μια καταπληκτική και για τα σημερινά δεδομένα συνέντευξη ενός κατασκόπου της NSA στο περιοδικό Ramparts τον Αύγουστο του 1972, «US- Electronic Espionage: A Memoir”. Εδώ θα βρείτε τα πάντα και θα κατανοήσετε ακριβώς τι έκανε ο Snowden . Το κείμενο είναι διαθέσιμο στο διαδίκτυο και το συστήνω ανεπιφύλακτα. Δεν χρειάζεται να διαβάσετε τίποτα άλλο.

Για την ιστορία, όμως, χρειάζονται δυο ακόμη αναφορές. Η μια είναι οι Ακροάσεις (Hearings) στο αμερικανικό Κογκρέσο που έλαβαν χώρα το 1975-76 κυρίως από το μακαρίτη Γερουσιαστή Frank Church. Αυτές ασχολούνται μεταξύ άλλων με την NSA, την CIA και τη δράση τους εντός και εκτός Αμερικής και την παρακολούθηση των πάντων. Και πάλι, όσα αποκαλύπτει ο Snowden θα τα βρείτε στα πρακτικά των Ακροάσεων.

Τέλος αναφορά πρέπει να γίνει και στο συγγραφέα James Bamford του οποίου τα δύο έργα για την NSA (The Puzzle Palace, 1982 και Body of Secrets, 2001αποτελούν το άλφα και το ωμέγα επί του θέματος.

Με αφορμή και δικαιολογία την 11η Σεπτεμβρίου φθάσαμε στο σήμερα. Η παρακολούθηση των πάντων έγινε δυνατή λόγω της γεωμετρικής εξέλιξης της τεχνολογίας. Και στο τρίπτυχο ELINT, RADINT, COMINT οι Αμερικανοί προσέθεσαν και το RUMINT,  Rumor Intelligence, ό,τι δηλαδή λέγεται και γράφεται ηλεκτρονικά σε παγκόσμιο επίπεδο, συμπεριλαμβανομένων και του κάθε ξεκατινιάσματος. Όλα πλέον είναι αναγκαία για τον καθολικό έλεγχο. Έχουμε εισέλθει για τα καλά στην εποχή της ηλεκτρονικής αυτοκρατορίας.

Παλιά ο αυτοκράτορας έπρεπε να γνωρίζει για το πέταγμα της κάθε πεταλούδας στην επικράτεια του ως δείγμα και απόδειξη της ισχύος του και τον έλεγχο που εξασκούσε επί των υποτακτικών του. Σήμερα πρέπει να γνωρίζει και για το κάθε ξεκατίνιασμα που γίνεται με τη βούληση όλων ημών. Έχουμε ως άτομα και ως κοινωνία αυτοεγκλωβιστεί από τις προσωπικές μας δουλείες και αδυναμίες. Και όλοι δουλεύουμε οικειοθελώς για τον κάθε εξουσιαστή Αμερικάνο ή μη και για την κάθε μορφή εξουσίας. Έχουμε καταντήσει ανδράποδα.

Πηγή: mignatiou.com

 

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Matala Beach Festival ( 21-23 June 2013 )

Matala Beach Festival 2013

Now in its 3rd year almost 100,000 fans of music and art have enjoyed ‘The Matala Beach Festival’ on the sands beneath the caves made famous during the hippie era of the 1960s and ‘70s.  Matala attracted international attention in the early 70s when Joni Mitchell released her critically acclaimed album ‘Blue’ which detailed her experiences whilst living in the caves with the young hippie travellers enjoying the tranquility of Matala Beach.

Matala’s culturally unique heritage continues to attract visitors of all ages.

The Matala Beach Festival features a range of music from the 1960s to present day and is pleased to announce that Hugh Cornwell former frontman of The Stranglers will be the first international artist to headline the event. Hugh had a series of international hits with The Stranglers in the 70s and 80s such as Peaches, No More Heroes, Golden Brown, and Always The Sun.

Check the official sites here: http://matalabeachfestival.com/   and here: www.facebook.com/matalabeachfestival

matala 2013

Hundreds of young scholars are being ‘held hostage’ by the Greek state

Figurines and a euro on a Greek flag

The Greek government’s accession to EU and IMF demands to curtail public spending has left young researchers out in the cold. Photograph: AFP/Getty Images

 

By V. Trachana and S. Gialis

Greece is reeling from six years of recession. Its economy resembles a 1930s-style Great Depression, with GDP having fallen by more than 20% and an official unemployment rate close to 30%. Among young, well-educated Greeks, unemployment hit 56.5% in early 2013.

Talking about scientific research against this economic backdrop might seem a luxury, but against all the odds Greek scientists’ contribution to the top 1% of the most-cited research articles has been ranked 13th in the world, above Canada, Italy and France. What’s more, for every euro invested, the Greek research community generates three.

How on Earth did Greece manage this? A possible explanation might be that Greek scientists have done really well in obtaining funds from European schemes such as the Framework Programmes. They rank second in Europe in terms of funds allocated per researcher.

You might expect that this human potential would be supported and encouraged by the Greek state. In fact, successive governments have cut back public expenditure on higher education and research. Even pre-crisis Greece was already ranked near the bottom of the list of EU member states for the proportion of GDP invested.

Things got a lot worse when the shock waves from the collapse of Lehman Brothers crashed on Greece’s shores. Since 2009, research centres and universities have seen their budgets cut by about 30% and 50% respectively. Salaries of scientists and faculty members have been cut by about 30%, leaving a typical lecturer with only €1,000 to take home each month. The 2013 education budget will reduce funds by a further 14%, effectively condemning Greek science to a state of dormancy.

As if this weren’t enough, since April the ministry of education has not paid subscriptions to academic journals. The denial of access to scholarly papers, the lifeblood of research, could mark the beginning of the end for creative science at Greek universities and research institutes.

By far the most dramatic impact of austerity, however, has been the “hostage situation” it created for around 750 university lecturers still waiting to be appointed to a faculty two to four years after being elected. These scholars, all PhD holders with significant academic and research credentials (many with years of postdoctoral experience abroad), were evaluated during a long, demanding process and elected to serve as faculty members. Instead they have been placed on a “waiting list”.

The government’s accession to EU and IMF demands to curtail public sector recruitment is effectively holding these young researchers hostage. In 2012, for the first time in decades, the Ministry of Education appointed no university professors. The last time it made a call for new faculty members was in 2010. The natural and necessary renewal of university staff with new blood has been abruptly suspended.

These 750 hostages of the Greek state are being sacrificed both on a personal and professional level. After years in limbo, many have turned towards casual, precarious or short-term employment outside academia, or have already left Greece to seek research posts in the rest of Europe, the US, or Australia. They are joining the 130,000 Greek graduates who according to a 2011 estimate are already living and working outside the country. The term “brain drain” seems like a euphemism for the extinction of an entire generation of high-calibre scientists, exactly at the time their skills are most needed to boost the economy.

Universities that are forced to close their doors to young scholars become lifeless and impotent, and have little hope of producing new knowledge through scientific research.

Varvara Trachana is a biologist and assistant professor at the department of medicine, University of Thessaly (elected, pending appointment since March 2011). Stelios Gialis is an economic geographer and assistant professor at the department of geography, University of the Aegean, (elected, pending appointment since December 2011). They are both members of the Initiative of Non-appointed Faculty Members

Source: guardian.co.uk/science/blog/2013/jun/20/hundreds-young-scholars-held-hostage-greek

Edward Snowden: ο 29-χρονος Αμερικάνος που “τίναξε τη ζωή του στον αέρα” για τις αρχές του

Ζούσε στη Χαβάη, είχε ένα καλό μισθό και καριέρα στις Αμερικάνικες μυστικές υπηρεσίες που πολλοί θα ζήλευαν. Στα 29 του, τα τίναξε όλα στον αέρα γιατί δεν ήθελε να ζει σε ένα κόσμο όπου ο Big Brother θα κυβερνά.

Είναι η ιστορία του Edward Snowden. Καλή τύχη Edward, θα τη χρειαστείς!

By G. Greenwald, E. MacAskill and L. Poitras in Hong Kong, The Guardian, 9/6/2013

The individual responsible for one of the most significant leaks in US political history is Edward Snowden, a 29-year-old former technical assistant for the CIA and current employee of the defence contractor Booz Allen Hamilton. Snowden has been working at the National Security Agency for the last four years as an employee of various outside contractors, including Booz Allen and Dell.

The Guardian, after several days of interviews, is revealing his identity at his request. From the moment he decided to disclose numerous top-secret documents to the public, he was determined not to opt for the protection of anonymity. “I have no intention of hiding who I am because I know I have done nothing wrong,” he said.

Snowden will go down in history as one of America’s most consequential whistleblowers, alongside Daniel Ellsberg and Bradley Manning. He is responsible for handing over material from one of the world’s most secretive organisations – the NSA.

In a note accompanying the first set of documents he provided, he wrote: “I understand that I will be made to suffer for my actions,” but “I will be satisfied if the federation of secret law, unequal pardon and irresistible executive powers that rule the world that I love are revealed even for an instant.”

Despite his determination to be publicly unveiled, he repeatedly insisted that he wants to avoid the media spotlight. “I don’t want public attention because I don’t want the story to be about me. I want it to be about what the US government is doing.”

He does not fear the consequences of going public, he said, only that doing so will distract attention from the issues raised by his disclosures. “I know the media likes to personalise political debates, and I know the government will demonise me.”

Despite these fears, he remained hopeful his outing will not divert attention from the substance of his disclosures. “I really want the focus to be on these documents and the debate which I hope this will trigger among citizens around the globe about what kind of world we want to live in.” He added: “My sole motive is to inform the public as to that which is done in their name and that which is done against them.”

He has had “a very comfortable life” that included a salary of roughly $200,000, a girlfriend with whom he shared a home in Hawaii, a stable career, and a family he loves. “I’m willing to sacrifice all of that because I can’t in good conscience allow the US government to destroy privacy, internet freedom and basic liberties for people around the world with this massive surveillance machine they’re secretly building.”

‘I am not afraid, because this is the choice I’ve made’

Three weeks ago, Snowden made final preparations that resulted in last week’s series of blockbuster news stories. At the NSA office in Hawaii where he was working, he copied the last set of documents he intended to disclose.

He then advised his NSA supervisor that he needed to be away from work for “a couple of weeks” in order to receive treatment for epilepsy, a condition he learned he suffers from after a series of seizures last year.

As he packed his bags, he told his girlfriend that he had to be away for a few weeks, though he said he was vague about the reason. “That is not an uncommon occurrence for someone who has spent the last decade working in the intelligence world.”

On May 20, he boarded a flight to Hong Kong, where he has remained ever since. He chose the city because “they have a spirited commitment to free speech and the right of political dissent”, and because he believed that it was one of the few places in the world that both could and would resist the dictates of the US government.

In the three weeks since he arrived, he has been ensconced in a hotel room. “I’ve left the room maybe a total of three times during my entire stay,” he said. It is a plush hotel and, what with eating meals in his room too, he has run up big bills.

He is deeply worried about being spied on. He lines the door of his hotel room with pillows to prevent eavesdropping. He puts a large red hood over his head and laptop when entering his passwords to prevent any hidden cameras from detecting them.

Though that may sound like paranoia to some, Snowden has good reason for such fears. He worked in the US intelligence world for almost a decade. He knows that the biggest and most secretive surveillance organisation in America, the NSA, along with the most powerful government on the planet, is looking for him.

Since the disclosures began to emerge, he has watched television and monitored the internet, hearing all the threats and vows of prosecution emanating from Washington.

And he knows only too well the sophisticated technology available to them and how easy it will be for them to find him. The NSA police and other law enforcement officers have twice visited his home in Hawaii and already contacted his girlfriend, though he believes that may have been prompted by his absence from work, and not because of suspicions of any connection to the leaks.

“All my options are bad,” he said. The US could begin extradition proceedings against him, a potentially problematic, lengthy and unpredictable course for Washington. Or the Chinese government might whisk him away for questioning, viewing him as a useful source of information. Or he might end up being grabbed and bundled into a plane bound for US territory.

“Yes, I could be rendered by the CIA. I could have people come after me. Or any of the third-party partners. They work closely with a number of other nations. Or they could pay off the Triads. Any of their agents or assets,” he said.

“We have got a CIA station just up the road – the consulate here in Hong Kong – and I am sure they are going to be busy for the next week. And that is a concern I will live with for the rest of my life, however long that happens to be.”

Having watched the Obama administration prosecute whistleblowers at a historically unprecedented rate, he fully expects the US government to attempt to use all its weight to punish him. “I am not afraid,” he said calmly, “because this is the choice I’ve made.”

He predicts the government will launch an investigation and “say I have broken the Espionage Act and helped our enemies, but that can be used against anyone who points out how massive and invasive the system has become”.

The only time he became emotional during the many hours of interviews was when he pondered the impact his choices would have on his family, many of whom work for the US government. “The only thing I fear is the harmful effects on my family, who I won’t be able to help any more. That’s what keeps me up at night,” he said, his eyes welling up with tears.

‘You can’t wait around for someone else to act’

Snowden did not always believe the US government posed a threat to his political values. He was brought up originally in Elizabeth City, North Carolina. His family moved later to Maryland, near the NSA headquarters in Fort Meade.

By his own admission, he was not a stellar student. In order to get the credits necessary to obtain a high school diploma, he attended a community college in Maryland, studying computing, but never completed the coursework. (He later obtained his GED.)

In 2003, he enlisted in the US army and began a training program to join the Special Forces. Invoking the same principles that he now cites to justify his leaks, he said: “I wanted to fight in the Iraq war because I felt like I had an obligation as a human being to help free people from oppression”.

He recounted how his beliefs about the war’s purpose were quickly dispelled. “Most of the people training us seemed pumped up about killing Arabs, not helping anyone,” he said. After he broke both his legs in a training accident, he was discharged.

After that, he got his first job in an NSA facility, working as a security guard for one of the agency’s covert facilities at the University of Maryland. From there, he went to the CIA, where he worked on IT security. His understanding of the internet and his talent for computer programming enabled him to rise fairly quickly for someone who lacked even a high school diploma.

By 2007, the CIA stationed him with diplomatic cover in Geneva, Switzerland. His responsibility for maintaining computer network security meant he had clearance to access a wide array of classified documents.

That access, along with the almost three years he spent around CIA officers, led him to begin seriously questioning the rightness of what he saw.

He described as formative an incident in which he claimed CIA operatives were attempting to recruit a Swiss banker to obtain secret banking information. Snowden said they achieved this by purposely getting the banker drunk and encouraging him to drive home in his car. When the banker was arrested for drunk driving, the undercover agent seeking to befriend him offered to help, and a bond was formed that led to successful recruitment.

“Much of what I saw in Geneva really disillusioned me about how my government functions and what its impact is in the world,” he says. “I realised that I was part of something that was doing far more harm than good.”

He said it was during his CIA stint in Geneva that he thought for the first time about exposing government secrets. But, at the time, he chose not to for two reasons.

First, he said: “Most of the secrets the CIA has are about people, not machines and systems, so I didn’t feel comfortable with disclosures that I thought could endanger anyone”. Secondly, the election of Barack Obama in 2008 gave him hope that there would be real reforms, rendering disclosures unnecessary.

He left the CIA in 2009 in order to take his first job working for a private contractor that assigned him to a functioning NSA facility, stationed on a military base in Japan. It was then, he said, that he “watched as Obama advanced the very policies that I thought would be reined in”, and as a result, “I got hardened.”

The primary lesson from this experience was that “you can’t wait around for someone else to act. I had been looking for leaders, but I realised that leadership is about being the first to act.”

Over the next three years, he learned just how all-consuming the NSA’s surveillance activities were, claiming “they are intent on making every conversation and every form of behaviour in the world known to them”.

He described how he once viewed the internet as “the most important invention in all of human history”. As an adolescent, he spent days at a time “speaking to people with all sorts of views that I would never have encountered on my own”.

But he believed that the value of the internet, along with basic privacy, is being rapidly destroyed by ubiquitous surveillance. “I don’t see myself as a hero,” he said, “because what I’m doing is self-interested: I don’t want to live in a world where there’s no privacy and therefore no room for intellectual exploration and creativity.”

Once he reached the conclusion that the NSA’s surveillance net would soon be irrevocable, he said it was just a matter of time before he chose to act. “What they’re doing” poses “an existential threat to democracy”, he said.

A matter of principle

As strong as those beliefs are, there still remains the question: why did he do it? Giving up his freedom and a privileged lifestyle? “There are more important things than money. If I were motivated by money, I could have sold these documents to any number of countries and gotten very rich.”

For him, it is a matter of principle. “The government has granted itself power it is not entitled to. There is no public oversight. The result is people like myself have the latitude to go further than they are allowed to,” he said.

His allegiance to internet freedom is reflected in the stickers on his laptop: “I support Online Rights: Electronic Frontier Foundation,” reads one. Another hails the online organisation offering anonymity, the Tor Project.

Asked by reporters to establish his authenticity to ensure he is not some fantasist, he laid bare, without hesitation, his personal details, from his social security number to his CIA ID and his expired diplomatic passport. There is no shiftiness. Ask him about anything in his personal life and he will answer.

He is quiet, smart, easy-going and self-effacing. A master on computers, he seemed happiest when talking about the technical side of surveillance, at a level of detail comprehensible probably only to fellow communication specialists. But he showed intense passion when talking about the value of privacy and how he felt it was being steadily eroded by the behaviour of the intelligence services.

His manner was calm and relaxed but he has been understandably twitchy since he went into hiding, waiting for the knock on the hotel door. A fire alarm goes off. “That has not happened before,” he said, betraying anxiety wondering if was real, a test or a CIA ploy to get him out onto the street.

Strewn about the side of his bed are his suitcase, a plate with the remains of room-service breakfast, and a copy of Angler, the biography of former vice-president Dick Cheney.

Ever since last week’s news stories began to appear in the Guardian, Snowden has vigilantly watched TV and read the internet to see the effects of his choices. He seemed satisfied that the debate he longed to provoke was finally taking place.

He lay, propped up against pillows, watching CNN’s Wolf Blitzer ask a discussion panel about government intrusion if they had any idea who the leaker was. From 8,000 miles away, the leaker looked on impassively, not even indulging in a wry smile.

Snowden said that he admires both Ellsberg and Manning, but argues that there is one important distinction between himself and the army private, whose trial coincidentally began the week Snowden’s leaks began to make news.

“I carefully evaluated every single document I disclosed to ensure that each was legitimately in the public interest,” he said. “There are all sorts of documents that would have made a big impact that I didn’t turn over, because harming people isn’t my goal. Transparency is.”

He purposely chose, he said, to give the documents to journalists whose judgment he trusted about what should be public and what should remain concealed.

As for his future, he is vague. He hoped the publicity the leaks have generated will offer him some protection, making it “harder for them to get dirty”.

He views his best hope as the possibility of asylum, with Iceland – with its reputation of a champion of internet freedom – at the top of his list. He knows that may prove a wish unfulfilled.

But after the intense political controversy he has already created with just the first week’s haul of stories, “I feel satisfied that this was all worth it. I have no regrets.”

Source: guardian.co.uk

Greece’s Garbage Crisis: A Stinky Metaphor for an Economy in the Dumps

by Y. Palaiologos

It is like a dark inversion of the tourist images of Greece. Seagulls circle not over the clear blue waters of the Aegean, but a bleak, cratered landscape, swooping down to compete with human scavengers and mangy dogs for spoils in a sea of waste. The landfill in the municipality of Fyli receives the lion’s share of the 6,000 tons of garbage produced every day in Attica, the region that is home to the Greek capital Athens and 35% of the country’s entire population.

Greece’s surfeit of garbage has become one of the most visible — and pungent — symptoms of its debt crisis. A report commissioned by the European Commission last year ranked the country as the European Union’s least efficient in its implementation of European waste-management directives. It still buries 80% of its waste, while the E.U. average is 38% and some member states have deployed recycling and recovery to reduce the amount that ends up in the ground to less than 1%. Moreover, Greece’s landscape is still littered with hundreds of illegal dump sites. This doesn’t just threaten public health and the environment, but also the recovery prospects for its long-suffering public finances. The European Commission said in February that it is taking Greece back to court, proposing a daily penalty of €71,193 ($91,527) for each of the 396 illegal sites that are either still active or have not yet been cleaned and rehabilitated.

The short-term solution would be to create more official “sanitary” dumps. But one attempt to do so in Attica provoked an insurgency. In December 2010, Keratea, a sleepy, conservative town of 10,000 souls southeast of Athens, exploded in rage against government plans to dig a new landfill on its outskirts. For 128 days hitherto ordinary citizens fought police, lobbing Molotov cocktails amid tear gas, torching bulldozers and even digging a trench, 6 ft. deep, across the main thoroughfare connecting Athens to the port of Lavrio.

Erupting, as it did, a few months after Greece’s first bailout, the Keratea uprising was seized on by politicians and activists ranging from the hard left to the far right as a model of civil disobedience against government policies seeking to make the people shoulder the costs of adjustment for the failures of the elites. Others, including members of the government at the time, saw the events as an extreme symptom of the wider breakdown of law and order, demanding a show of force by the state. Either way, it highlighted the collapse in relations between government and the people in Greece in an era of national bankruptcy and externally imposed austerity.

Today, 25 months after the end of hostilities in Keratea, brokered in part by a local bishop, no waste-management facilities operate there. In August last year, EDSNA, the local government association responsible for waste management, approved the construction of four waste-processing facilities in Attica, to be realized through private-public partnerships at a projected cost of over $550 million. EDSNA has not even announced the shortlist of candidates for three out of the four projects, including the one in Keratea.

The landfill that will accompany the processing plant is now envisaged to be a tenth the size of the dump originally proposed. It is unclear, however, by how much the amount of waste expected to head to Keratea for processing and burial will be reduced, and whether these concessions are enough to placate lingering opposition in the town.

Yannis Sgouros, the elected head of the region of Attica and president of EDSNA, says there is no stalemate. “We are within the preset timetables,” he tells TIME. “The shortlists for Keratea will soon be announced. These are among the biggest development projects in the country, and we hope to have completed the tender process on all of them by year’s end.”

Speed is of the essence. The Fyli landfill — still the only legal one operating in Attica, 10 years after Parliament voted for three to be built in the region — is a testament to the unsustainability of the existing arrangements. Gangs of rag collectors make daily raids into the site. They are mostly after copper and iron, which they extract by burning cables and other items, releasing toxic dioxins into the atmosphere. There has been sporadic violence, between gangs and toward workers at the landfill, and at least four gang members have been killed while scavenging, buried unseen by bulldozers throwing dirt to cover the garbage. The area of the landfill has already been expanded to prolong its lifespan. Sgouros says it has less than two more years of operation left.

But Sgouros also admits his waste-management goals will not be met unless government institutions step up the pace in creating new facilities and more effective approaches. Cleaning up Attica would be a boon for the environment and a boost for economic activity, in a country where infrastructure spending has collapsed during the crisis. But if red tape and clogged court proceedings don’t allow things to move forward in the next few months, the garbage crisis will deepen, local tensions will increase and Greece’s budding, fragile reputation as a place to do business will be heading for a heap of trash.

Source: Time magazine

 

I upset my least favourite big fat greek minister


The author and Greek minister Theodoros Pangalos.

Greg Palast is a New York Times bestselling author and fearless investigative journalist whose reports appear on BBC Newsnight and in The Guardian. Palast eats the rich and spits them out. Catch his reports and films atwww.GregPalast.com, where you can also securely send him your documents marked, “confidential”.

It wasn’t too difficult picking out the Fat Bastard in the crowd of Russian models, craven moochers and media mavens. Besides, Fat Bastard and I were both desperate for coffee and heading for the same empty urn.

(We’d both signed on for Kazakhstan’s annual Eurasia Media Forum, a kind of Burning Man festival for Eastern oilgarchs and their media camp followers.)

Now, it is my policy never to mention an interlocutor’s weight, nor question the legitimacy of their birth, given my own vulnerabilities. (A would-be groupie told me, “You could do a few sit-ups, you know.” Yes, I know.)

But this particular Fat Bastard is asking for it. I had tried to put the belly of this beast out of my thoughts, but I still had New York Times story folded in my pocket that begins:

ATHENS – As an elementary school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.

Fat Bastard – or Theodoros Pangalos, leading member of the Panhellenic Socialist Party (PASOK), Greece’s equivalent to Labour – thinks the little Greek kiddies should stop belly-aching. Pangalos, as you can see from the photo below, is not bent over with hunger pains. In fact, he looks more likely to be bent over with labour pains, but in truth he probably just can’t bend over at all.

Pangalos is best known for blaming the working people of Greece for the horror and the hunger among the ruins of what was once Greece’s economy. However, it is, of course, not his fault; until last year, and through the core of the crisis, he was just Greece’s Deputy Prime Minister – why should he be held accountable for anything?

 

Minister Pangalos is much loved by Europe’s banking chieftains, by vulture speculators and by Prussian President Angela Merkel because they’ve got themselves a gigantic Greek who will mouth their mantra: that his nation’s sudden collapse can be blamed squarely on olive-pit-spitting, lazy-ass Greeks who won’t work more than three hours a week, then retire while they’re still teenagers to swill state-subsidised ouzo.

Pangalos leads the Fifth Column of Greeks calling to accept Germany’s terms of economic surrender: austerity, meaning cuts in food allowances, in pensions, in jobs. As of this week, more than one in four Greeks (27 percent) are out of work.

While we hunted for caffeine, Fat Bastard told me that anyone who complains about the austerity diktat, “Is a fascist or a communist or a conspiracy theorist.” He didn’t tell me which of these three categories the 11-year-old kids complaining of hunger pains fell into.

Just for the record, Greeks who can get a job work 619 more hours per year (see table) than the average German (and way, way more than Britons or Americans, as well).

But in the world according to Pangalos, Merkel and poobahs of the media, Greece went to hell in a handbag because the entire nation suddenly turned into work-shirking grifters.

But there’s another explanation for wrack and ruin: Greece is a crime scene. And its working people are not the perpetrators of the crime, they are the victims – scammed, defrauded, their national industries looted and their treasury drained by financial flim-flam.

In 2001, Greece dropped the drachma for the euro. The drachma was good enough for Aristotle and very good for tourism, Greece’s main industry. But when sun-and-fun was re-priced in euros, tourists swam across the Adriatic for kofte meatballs priced in dirt-cheap Turkish lira. Pre-euro tourist visits to Greece outnumbered those to Turkey by millions; but by last year, it was the just the opposite, with two-thirds of tourists tanning in Turkey.

With its Treasury bleeding hard currency, the government of Minister Pangalos’s PASOK joined together with the opposition in a complex international currency kiting operation to conceal the losses from the public and, most importantly, from the European Central Bank.

Minister Pangalos is much loved by Europe’s banking chieftains, by vulture speculators and by Prussian President Angela Merkel because they’ve got themselves a gigantic Greek who will mouth their mantra: that his nation’s sudden collapse can be blamed squarely on olive-pit-spitting, lazy-ass Greeks who won’t work more than three hours a week, then retire while they’re still teenagers to swill state-subsidised ouzo.

Pangalos leads the Fifth Column of Greeks calling to accept Germany’s terms of economic surrender: austerity, meaning cuts in food allowances, in pensions, in jobs. As of this week, more than one in four Greeks (27 percent) are out of work.

While we hunted for caffeine, Fat Bastard told me that anyone who complains about the austerity diktat, “Is a fascist or a communist or a conspiracy theorist.” He didn’t tell me which of these three categories the 11-year-old kids complaining of hunger pains fell into.

Just for the record, Greeks who can get a job work 619 more hours per year (see table) than the average German (and way, way more than Britons or Americans, as well).

But in the world according to Pangalos, Merkel and poobahs of the media, Greece went to hell in a handbag because the entire nation suddenly turned into work-shirking grifters.

But there’s another explanation for wrack and ruin: Greece is a crime scene. And its working people are not the perpetrators of the crime, they are the victims – scammed, defrauded, their national industries looted and their treasury drained by financial flim-flam.

In 2001, Greece dropped the drachma for the euro. The drachma was good enough for Aristotle and very good for tourism, Greece’s main industry. But when sun-and-fun was re-priced in euros, tourists swam across the Adriatic for kofte meatballs priced in dirt-cheap Turkish lira. Pre-euro tourist visits to Greece outnumbered those to Turkey by millions; but by last year, it was the just the opposite, with two-thirds of tourists tanning in Turkey.

With its Treasury bleeding hard currency, the government of Minister Pangalos’s PASOK joined together with the opposition in a complex international currency kiting operation to conceal the losses from the public and, most importantly, from the European Central Bank.


German chancellor Angela Merkel with Greek Prime Minister Antonis Samaris. (Image via)

Why the cover-up of the deficit? The answer is that the euro is more than a currency: it is a straitjacket, a set of constricting rules that, for example, prohibit any euro nation from running a deficit of more than 3 percent of GDP.

That’s impossible in a recession – not to mention plain insane – as it requires cutting public spending when spending is needed most. The USA, China, Brazil, India – the nations that pulled the world from depression’s brink – all ran deficits way over the nutty 3 percent cap. I asked finance wiz Nomi Prins to calculate America’s debt-to-GDP ratio using euro rules, and she estimates that Obama’s deficits are now way down from recession’s peak – to 10.2 percent of GDP.

Greece, fearing expulsion from the euro loony bin, turned to Goldman Sachs. For a mere $400 million (£263 million) in fees, plus golden sacks of ill-gotten trading gain, the investment was willing to cook the nation’s books via a complex set of derivatives transactions. [For the particulars of the derivatives con, see “How Goldman Sacked Greece“.]

Since the con was busted open in 2009, the Greek public has had to pay cheated bondholders a premium to insure against default of the nation’s debts. The credit default insurance costs an average of $14,000 (£9,218) per family per year.

When I was a racketeering investigator working with the US Justice Department, in the days when we pretended America still had justice, we would have called the derivatives trick a “fraud on the market”. We’d handcuff the perpetrators, lock ’em up, or, at the least, make them cough up their purloined profits.

So, should Goldman pay up? Not according to Pangalos, because – in the worldview of our rulers – the victims of the scam are as guilty as the victimisers. Pangalos even put it into a famous (or infamous) motto: mazi-ta-fagame. That’s Greek for “We all ate it together” (a sample of which was used in a Plastic Flowers song).

But the visible evidence suggests Pangalos, not Pantelis – the kid doubled over with stomach pain – ate all the pies.

The mass privatisation of public property at wiener schnitzel prices has German speculators dipping in their spoons as well, though the Federation of German industry is complaining about Greece’s own “princes” gobbling up the assets.

I was going to invite Minister Pangalos to lunch to test his theories, but he left in a pachydermic huff when I asked him about Geir Haarde. Haarde, the former Prime Minister of Iceland, was found guilty of criminally concealing his knowledge of the trickery used by Iceland’s banks before they melted that nation’s finances.

I asked Fat Bastard, “Do you think you too should be in prison for” similar conduct in the Greek government?

Maybe that’s why Minister Pangalos didn’t want to go to lunch with me.

Source: vice.com

Doors co-founder Ray Manzarek dies at 74 in Germany

John Densmore, Robby Krieger, Jim Morrison and Ray Manzarek pictured in 1968

The Doors – John Densmore, Robby Krieger, Jim Morrison and Ray Manzarek – were hugely successful in their heyday

 

Ray Manzarek, keyboard player and founder member of the 60s rock band The Doors, has died aged 74.

He formed the band with lead singer Jim Morrison in 1965 after a chance meeting in Venice Beach, Los Angeles.

Manzarek, who had battled bile duct cancer for many years, died in a clinic in Rosenheim, Germany, with his wife and brothers at his bedside.

The Doors found fame in the 1960s with hits such as The End, Break on Through to the Other Side and Hello I Love You.

They sold more than 100 million albums worldwide and Manzarek became one of the best-known keyboardists of his era, his artistry colouring tracks like Riders on the Storm and Light my Fire.

 

Ray Manzarek performing  at the Sunset Strip Music Festival in August 2012
Manzarek’s keyboard skills helped The Doors sell 100m albums

In his latter years, Manzarek played in other bands and, in 1998, wrote a best-selling memoir, Light My Fire: My Life with The Doors.

Drummer John Densmore paid tribute to Manzarek, saying he felt “totally in sync” with his “musical brother”.

“There was no keyboard player on the planet more appropriate to support Jim Morrison’s words,” he added.

Guitarist Robbie Krieger, who continued to play with Manzarek following Morrison’s death on 3 July 1971, said he was “deeply saddened” to hear the news.

“I’m just glad to have been able to have played Doors songs with him for the last decade. Ray was a huge part of my life and I will always miss him,” he said.

British rock musician Billy Idol ‏tweeted, “I was lucky to get a chance to rock out with him and the other two Doors. Cheers mate, say hi to Jim.”

 

Iggy Pop and Ray Manzarek in 1974
Iggy Pop [L] played with Manzarek in 1974

Bill Siddons, the band’s manager in the 60s, told the BBC it was a “tremendous loss” to musical culture.

“He understood what Jim’s talent was, and he put the band together to make it work,” he said. “The Doors really had a huge impact, and still do, on our musical culture.”

The original line-up, which included drummer John Densmore and guitarist Robby Krieger, made six albums in their six years together.

The death of Morrison, who died of heart failure in a bath in Paris, effectively spelled the end for the band, although Chicago-born Manzarek took on singing duty.

Manzarek, who was of Polish descent, was born and raised in south Chicago before studying cinematography at the University of California in Los Angeles where he first met fellow film student Morrison.

“There was no idea of forming a rock and roll band at the time. Jim was a poet and a film maker – and not a very good film maker but a really good poet and a real intellectual,” he told singer Suzi Quatro in a documentary for the BBC.

He took classical piano lessons as a child which later contributed to the fusion style of The Doors’ music.

“The introduction to Light My Fire was my little Bach study. I had a good time with that,” he said.

“The whole point of The Doors was a fusion of rock and roll but with some jazz, a little bit of classical, Robbie Krieger’s flamenco guitar, and my classical background.”

He met Morrison again by chance on Venice Beach in 1965 after finishing their course, where Morrison sang him an early version of Moonlight Drive, which would later feature on their second album, Strange Days.

Manzarek met Densmore and Krieger at a Transcendental Meditation lecture and the four became the house band at The London Fog on the Sunset Strip in Los Angeles in 1966.

He played with a number of other bands throughout his career including Iggy Pop and punk rock band X.

Manzarek is survived by his wife Dorothy Fujikawa, who he married in 1967, his son, Pablo and three grandchildren.

Source: bbc.co.uk ( http://www.bbc.co.uk/news/entertainment-arts-22604798 )

Austerity’s Drug of Choice: Sisa is destroying the lives of Athens’s homeless people

By Alex Miler

Standing in the Athens police headquarters, interviewing the director of the drug unit, I realized I had a bag of chemically enhanced crystal meth in my pocket. I’d bought it the night before from a Greek homeless man and had forgotten to throw it away. After the interview, I stepped outside to smoke a cigarette, which is when some officers noticed the film crew I had brought along, who were recording from a distance.

Minutes later the cops dragged us into a holding room, the little packet of drugs still stuffed in my pants. They made some calls, glared at us, and eventually, reluctantly, released us—without ever searching me, thankfully. On my way out, I threw the baggie into the first garbage can I passed.

Several Greek police stations have been firebombed in recent months, so the cops have reason to be nervous, especially when they notice that they are being filmed. On our first evening in Athens, a different group of officers approached us and, after spotting our film crew down the street, demanded to see our papers. They deleted our footage and detained us for a couple of hours, until we’d managed to get our passports delivered to the station. Greece is a paranoid place at the moment. The police, fascists, anarchists, dealers, and drug users are all fighting for local supremacy and no one trusts anyone else.

The night before our close call at the Athens police headquarters, I was approached by a group of homeless people, one of whom was smoking some horrible-smelling stuff through what appeared to be a meth bowl made from an old lightbulb. Although I don’t speak Greek, I managed to let him know that I wanted to buy some of the drug, colloquially known as sisa. The homeless guy wandered off with my five-euro note, and afterward an old man grabbed my arm and shouted, “No, no take! Very bad.” I wasn’t going to smoke it, but I was very curious about Greece’s infamous new drug.

In 2012, Charalampos Poulopoulos, director of KETHEA, a government-funded antidrug, rehabilitation organization, authored a research paper titled “Economic Crisis in Greece: Risks and Challenges for Drug Policy and Strategy” for the journal Drugs and Alcohol Today. In it, he detailed the ways the Greek economic disaster has exacerbated drug use in the country, claiming that “rates of drug and alcohol consumption… as well as the associated mental-health problems are set to rise the longer the recession continues.” At its essence, the report provides data for the obvious: the instability that results from widespread and increasing nationwide poverty leads to hopelessness, health problems, and self-medication by way of street drugs.

“In the last two years drug users have become more self-destructive,” Charalampos wrote. “Especially in the region of Athens where the effects of economic crisis are more obvious.” According to him, it was around this time that sisa emerged on the market.

The basic ingredient of sisa is methamphetamine. Addicts have reported that it can also contain filler ingredients like battery acid, engine oil, shampoo, and cooking salt. “There is no official data on that,” Charalampos told me. “The General Chemical State Laboratory of Greece hasn’t gotten enough samples to reach any conclusions yet.”

Whatever’s in it, in many ways sisa is the epitome of an austerity drug. The majority of its users are poor, often homeless, city dwellers reeling from the psychological and physical impacts of a country in the grip of total economic collapse. In a country so broke that upper-middle-class families reportedly ate their Christmas dinners in unheated homes so they could afford a turkey, many users’ habits have become unsustainable. Addicts who’ve been priced out of using smack, crack, and meth have turned to sisa, which costs as little as two euros a hit.

As with most cheap highs, sisa comes with some nasty side effects, including “insomnia, delusions, heart attacks, and aggressiveness,” according to Charalampos. “It’s often compared with cocaine,” he said, though it acts faster, and the effects last longer than coke. “It’s the drug of the streets, produced in home-based laboratories.”

Sisa is the latest grim example in a global trend toward mass-produced synthetic drugs, from the skin-eating opiate cocktail krokodil in Siberia to South Africa’s new fascination with getting high from souped-up anti-AIDS meds to the bath-salts craze in America and the UK. These are cheap, DIY highs, so it’s no wonder that in poverty-stricken Greece, sisa has found a natural home.

Kapodistriou Street, a long road in the center of Athens, where sisa users congregate.

The day we arrived in Athens, we approached a man as we walked through Exarcheia, a district that’s traditionally been home to anarchists and is now known for its high concentration of addicts. The man was glaring at the sky, shouting. I thought he was screaming at God, but it turned out he was just yelling about a broken traffic light. Cars swept past, their drivers giving him no opportunity to beg at their windows. He was inconsolable, flitting between rage and tears, but after I bought him an orange juice, he chilled out, said his name was Konstantinos, and told me all about sisa.

“The cocaine of the poor! It’s the cocaine of the poor!” he shouted. He said that people he knew who smoked too much were losing limbs. “If you smoke it for six months, you’ll be dead,” he said. He claimed that he wasn’t a user, but the next day I bumped into him again, and he beckoned for me to follow, squatted behind a car, and smoked a pipe full of sisa. It was the middle of the afternoon.

Sisa has become something of an urban legend in Athens; everyone knows it exists, but no one knows exactly what it is. The only people with any real understanding of it are its users, the police who bust them, and the dealers who fuel the epidemic. The rest of the country is too busy trying to ignore the country’s 58 percent youth-unemployment rate, the rise of the far right and the extreme left, an increasingly ineffective legal system, a political class reduced to selling the nation’s islands, and the European Union’s demands for austerity measures that may or may not be working. As such, reports about sisa in the Greek media have been rare.

“We found out about sisa from a paper by the European Center of Disease Prevention in November,” said Dani Vergou, the health editor of the newspaper Efsyn. Sisa was a mystery to her. She’d heard rumors, but “there’s not much research from the Greek authorities or the Ministry of Health. It just sounds dangerous.”

In the streets, though, people know all about it. On Kapodistriou Street, one of the most popular junkie hangouts in Athens, I met Kostas, Stathis, and Panagiotis—chronically homeless addicts who have been trying to kick sisa, without much success.

“There’s three ways you can take sisa,” said Stathis, who’s in his 40s. “With a pipe, with a syringe, or with a piece of aluminum, and I’ve seen people snorting it as well. But let me say that if you shoot it, you don’t have long to live. It destroys all vital organs from the inside.” I asked him if he knew of anyone who had died from taking it.

“Many,” Stathis said. “I know too many. For some, their innards rotted… It might give you other sorts of sicknesses, it might hit your liver, your heart, kidneys… anywhere.”


A bag of sisa we bought for $6.50. We suspect we were ripped off.  

The three of them spoke darkly about sisa. “When I had it for the first time, it freaked me out,” Panagiotis said. “I didn’t like it. It tensed me up, I didn’t feel good at all.”

“It melts you,” Kostos said. “It hits others in their nervous system. It creates wounds on the body that don’t heal, they never close. It starts like a pimple and instead of healing, it grows. Even the user’s face is full of holes.”

“You see 50- to 60-year-old guys addicted to sisa. Men, women, wherever you look, sisa,” Panagiotis bleakly added. “Everywhere in Athens: alleys, squares, smoking all day long and looking for more sisa. You don’t hear about heroin anymore, or weed or pills. This is because sisa is a cheap drug… For me sisa is the drug that will destroy Greece.”

Later the trio took us to the Off Club, a day center for sisa addicts, where the attendants handed us zine-like comic books about the dangers of the drug. The club is located just off Exarcheia Square, which is cluttered with coffee shops, bars, gangs, teens, immigrants, and others on society’s margins. Near the square is the enormous building that houses Athens Polytechnic, one of Greece’s most prestigious universities, and where, in 1973, the military sent tanks to break up an antigovernment protest, resulting in 24 deaths. The police don’t patrol around here much; instead they stay in their riot vans on the square’s outskirts, smoking cigarettes, submachine guns hanging from their shoulders. A few anarchists I met harbor a conspiracy theory that the police themselves are behind the influx of sisa into the neighborhood.

In a nearby bar, we met a notorious young anarchist who we’ll call Alcander. In 2008, during the anarchist riots, he allegedly manufactured gasoline bombs and handed them out en masse. Two years ago, Alcander noticed that homeless drug addicts were acting differently; then he had the shit kicked out of him by a group of people he claimed were users. He said that he directly blames sisa for their wanton aggression, and the way he spoke about the drug made it sound demonic. “How can I tell if someone’s a sisa user? It’s easy—they’re unbalanced, unstable, like a psychopath. They have crazy eyes, are talking to themselves, and they are very aggressive. I think sisa is the worst drug in the world.”

I asked him why he thought local police officers were behind the distribution of the potentially fatal narcotic. “Some of [the users] came to us and said that the police told them to go to Exarcheia. They said, ‘We cannot do it anywhere else, they send us away from all the other territories, all the other squares. They said go to Exarcheia.’”

“So you believe it’s political?” I asked.

“Yeah, this whole social movement is starting to rise up, and they want to have an excuse to come in as a savior for the residents… They’ve done it before, like two decades ago with heroin.”

Greek anarchists have already begun fighting back against the sisa epidemic by coordinating attacks on dealers and users in an attempt to clean up their neighborhoods. “We want the children to play in Exarcheia Square and not have to worry about drug dealing,” Alcander said. Their goal doesn’t seem like it will be met any time soon, however. Users are scattered throughout the city and, presumably, other parts of the country. And over the course of our visit, sisa dealers appeared out of nowhere to sell their wares before charging off just as abruptly.

According to Alcander, some women in the area have been raped by sisa addicts. However, this could be a rumor inspired by the idea that sisa fuels sexual appetites—a description that some addicts agree with. Konstantinos said that after he smokes sisa, he usually ends up having wild, violent sex. And he wasn’t bragging; he looked upset about it.


A sisa user smoking his pipe on Kapodistriou Street.

As recently as 2009, it was a rarity to see homeless people in Athens. But since then, homelessness in Greece has gone up 25 percent, according to Greek activists, and today, a drive through the city feels like touring a never-ending Skid Row. The police have even started throwing the homeless in the back of vans and driving them out of Athens to Amigdaleza, an immigrant detention center, in an effort they’ve dubbed Operation Thetis, after Achilles’s mother. The word thetiko, taken from her name, means “positive,” but in the minds of the homeless people it targets and those who work with them, it’s nothing short of fascistic.

“This is crazy policing,” said Charalambos. “It pushes people with the problems to the margins, and toward criminal behavior.” While we were in Greece, the homeless people we spoke to claimed that at least twice a day, the police were conducting sweeps through the center of Athens to round up the homeless and drug addicts.

“We don’t know where they’re taking them or what they’re doing it for,” said one social worker, as I accompanied her on her nightly tours of addict hot spots. “It’s a mystery.” She was being coy; it was obvious what she thought the police were doing: cleansing the streets of undesirables.

A couple days later, we visited Kannigos Square, where prostitutes, addicts, and drug dealers (who, we’d been warned, were often armed) congregated. The atmosphere was tense: earlier that day, about 20 uniformed policemen had rounded up the homeless situated throughout the square and loaded them into three large buses. When we arrived, plainclothes cops were still milling around a crowd of tweaked-out sisa and heroin users.

The sergeant who had detained us and deleted our footage when we arrived in Athens was also there, so we hid our cameras and approached his colleagues. They told to us inquire at the local headquarters, which is how I ended up accidentally bringing sisa into a Greek police station, where I met George Kastanis, the director of the Athens narcotics division. He said that he thinks sisa originated in Africa and Asia, and although he told me he was increasingly worried about its popularity, he didn’t believe the drug was turning users into violent maniacs and rapists, which matched up with my own impressions—very few of the addicts I met had showed any signs of aggression. When I asked George about Operation Thetis, he told me that it had been enacted only once.

“But I saw something this morning that looked a lot like a sweep of the streets. Was that Thetis?” I asked.

“No. It’s something completely different,” George answered, adding that these detainees are taken to police stations where the cops check for outstanding warrants against them, and that most of the time, they’re set free after an hour and a half. When I asked him whether he believed schemes like Operation Thetis were useful, he looked as though the question made him uncomfortable and said, “I’m a policeman—I follow orders.”

The follwing day, before returning home, we bumped into Konstantinos again and took him to a bakery to get him some lunch. We stood in the sun, eating small, honey-covered balls of dough, while Konstantinos tried to explain something in broken English. He kept running his finger across his neck to clarify his point, but I couldn’t understand what he was saying. He was a nice guy, the son of a prostitute who said he’d always been surrounded by drugs, whose quality of life had become immeasurably worse since Greece’s financial collapse. We gave him prints of some photos he’d asked for earlier, and he left smiling, saying he loved us.

“You know what he was trying to tell you before?” my translator asked me later. “That he loved you, but if you’d approached him in English that day underneath the traffic light, he would have got his sisa dealers to kill you for your cameras.”

Watch our new documentary, Sisa: Cocaine of the Poor, now on VICE.com

Source: vice.com

This is too crazy! Even for Greece!

 

 

The CoLab in Athens is a sign of the times. A shabby grey building a short walk from the city’s becalmed shopping district, it is home to a clutch of fledgeling tech start-ups. The bright young things in jeans and T-shirts are housed in the otherwise drab former offices of a branch of the state bureaucracy that fell victim to Greece’s spending cuts. Underneath it sits a discount supermarket, the front window of which is plastered in adverts for items at €1 or less.

Among the aspiring entrepreneurs hunched over a computer is Alex Christodoulou. The 36-year-old has been trying to make the journey that institutions like the International Monetary Fund (IMF) and the European Central Bank (ECB) want Greece to make. Two summers ago he quit a “job for life” in the public sector to launch his own tech-based business, aiming to compete in the global market.

Instead of being feted as a trailblazer, the computer studies teacher found that he was treated as a pariah. First his school in Kalamata, the same seaside city in the Western Peloponnese where the Prime Minister Antonis Samaras hails from, refused to accept his letter of resignation.

“They told me I was too late to resign and I would have to wait for the next year. I couldn’t believe it,” said Mr Christodoulou. Bewildered officials told him that he risked losing his pension with his unorthodox behaviour. Having thought of his big idea and persuaded a friend to join him, he didn’t care about the pension. “They couldn’t imagine that someone would resign because they wanted to do something else with their life.”

In his nine years of teaching he got a first-hand insight into Greece’s woefully dysfunctional education system. In order to top-up their salaries, some teachers reserved their real teaching for after-school lessons at frontistiria – private crammers that most Greek pupils attend. A minority of his colleagues would even fail children in tests to encourage them to sign up for the paid lessons after hours.

Mr Christodoulou was told if he really wanted to quit he would have to stay away from work for 21 consecutive school days. He would then be fired. After two months had passed without showing his face there was no response. When he contacted the school to ask when he would be fired, he was told he would have to face a disciplinary board and a possible lawsuit. The stand-off continued for seven months before he finally got a letter telling him that his resignation was accepted.

It was not just the school that could not understand his burst of entrepreneurialism. His move confounded friends and family who thought he was wrong to leave his safe position. Despite earning a modest €1,300 (£1,100) a month, his job with only 20 hours of teaching a week and three months vacation a year “was considered one of the best you could get”, he said. It was the “Greek dream” of an easy-going job followed by early retirement.

Two years on and the reluctant public servant’s ordeal is not over. Last week, he got a call from the Greek education ministry telling him he would receive written notification that his resignation had been rescinded, his salary would recommence and that he would then face disciplinary action and expulsion. In other words they wanted to rehire him so that they could fire him and include him in the number of public servants being laid off to appease Greece’s international creditors.

Mr Christodoulou, who has launched a smartphone application called “Locish” which offers travellers advice from local experts, is angry at his retrospective lay-off. “I don’t want to be counted as a fired person. I shouldn’t be punished because I resigned,” he said. “This is crazy even for Greece.”

Earlier this week, the Greek Parliament passed its latest package of austerity measures, the centrepiece of which was a commitment to take 15,500 workers off the public payroll. The lay-offs will break a century-old tradition of permanent positions in the civil service. It was forced upon a largely unwilling Parliament by the ECB, IMF and European Commission – known collectively as the troika – in return for the latest loans of €8.8bn.

The troika’s prescription of tax increases, privatisations and spending cuts has not tackled Greece’s debt crisis. Unemployment is the highest in Europe, and youth joblessness stands at more than 60 per cent.

What cases like Mr Christodoulou’s illustrate are how little the trumpeted reforms have eaten into Greece’s client state. For decades civil service jobs have been handed out in return for votes. It was politically cheaper to hike taxes than reform Greece’s expensive and grossly inefficient bureaucracy.

And it is not just a numbers game. Contrary to popular perception, the percentage of the working population employed by the state in Greece is lower than the eurozone average. But public sector workers outnumber their private counterparts to a greater extent than any other EU country. This trend has emerged during the crisis. In 2008 a little over four out of every 10 Greek taxpayers was employed by the state. Now it is six out of 10.

What Greece really needs is to manage its public sector “on a qualitative, not a quantitative basis”, said Theodore Pelagidis, an economics professor at the University of Piraeus who compiled the public-private research.

Aristos Doxiadis, a partner at OpenFund, the venture capital firm who invested in Locish, explains that the private sector has been squeezed to protect “public sector profligacy”, which has contributed to the downward spiral. OpenFund, which has been supported by the European Investment Fund, has helped to stimulate a lively startup scene in Athens where hundreds of would-be entrepreneurs now turn out at almost daily “new economy” events.

Measured in numbers, the new ventures are not going to turn things around, Mr Doxiadis admits, “but the example they give can have a huge impact”.

The Christodoulou family have belatedly come around to the idea of their son’s startup venture since it received seed funding and he and his partner Gregory Zontanos – who also quit his job in the civil service – were interviewed by local media outlets.

The Locish founder admits the inspiration for his travel app, which launches in New York this month, came from a Greek entrepreneur who started a successful website in London several years ago. “We used to think that the guys in Silicon Valley are different to us, then we saw him on a video and thought ‘he’s like us’, we can get funded too.”

Source: independent.co.uk

Greek Minister speech copy-pasted from Wikipedia

by Pantelis Panteloglou

 

During his recent visit in the USA, Greek Minister of Public Order and Citizen Protection Mr. Nikolaos Dendias made a speech at John Jay College of Criminal Justice of City University of New York. According to the Athens News Agency, the minister said later on: “I had the chance to elaborate on a subject connected to human rights and law enforcement and to analyze the huge challenges the Greek society is facing today”.

It is true that Minister Dendias talked about the rule of law, the principle of proportionality, Aristotle, Plato and other stuff, before he justified his policy. However, most of the theoretical part of his speech, which was published later on both the ministry’s and his personal websites, has been found to be copy-pasted from Wikipedia and other sites. It has also been found that some of the material used by the minister has been copied with some mistakes too…

Dendia’s speech part 3 Wikipedia:Rule of law
The rule of law is the “supremacy of regular power as opposed to arbitrary power”. The phrase can be traced back to the 17th century, and it was popularized in the 19th century by British jurist A. V. Dicey. Even earlier the phrase “Not under man but God and Law” was attributed to the British jurist Henry of Bracton while the concept was familiar to ancient philosophers as well.
Aristotle wrote that “Law should govern.” as well as “The only stable state is the one in which all men are equal before the law”. Rule of law implies that every citizen is subject to the law. It stands in contrast to the idea that the ruler is above the law, for example by divine right.
In its general sense, the phrase can be traced back to the 16th century, and it was popularized in the 19th century by British jurist A. V. Dicey. The concept was familiar to ancient philosophers such as Aristotle, who wrote “Law should govern”.[4] Rule of law implies that every citizen is subject to the law. It stands in contrast to the idea that the ruler is above the law, for example by divine right.

[…]
Bracton saith, quod Rex non debed esse sub homine, sed sub Deo et lege (That the King ought not to be under any man but under God and the law.).”

[…]
The lead definition given by Black’s is this: “A substantive legal principle”, and the second definition is the “supremacy of regular as opposed to arbitrary power”.

Schematically man can say that the rule of law is a system in which the following four universal principles are upheld:
o The government and its officials and agents are accountable under the law.
o The laws are clear, publicized, stable and fair, and protect fundamental rights, including the security of persons and property.
o The process by which the laws are enacted, administered, and enforced is accessible, efficient, and fair.
o Justice is delivered by competent, ethical and independent representatives and neutrals, who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.
As used by theWorld Justice Project, a non-profit organization committed to advancing the rule of law around the world, the rule of law refers to a rules-based system in which the following four universal principles are upheld:[56]
1. The government and its officials and agents are accountable under the law;
2. The laws are clear, publicized, stable, fair, and protect fundamental rights, including the security of persons and property;
3. The process by which the laws are enacted, administered, and enforced is accessible, fair, and efficient;
4. Access to justice is provided by competent, independent, and ethical adjudicators, attorneys or representatives, and judicial officers who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.
Nowadays it is safe to say that the rule of law ultimately comes down to a principle of governance in which all persons, institutions and entities—including the State itself—areaccountable to laws that are publicly promulgated, equally enforced and independently adjudicated—and which are consistent with international human rights norms and standards. TheSecretary-General of the United Nationsdefines the rule of law as:[47]
a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards.
Dendia’s speech part 5 Wikipedia:Proportionality
In European Union law there are generally acknowledged to be four stages to a proportionality test, namely: there must be a legitimate aim for a measure or restriction
o the measure or restriction must be suitable to achieve the aim (potentially with a requirement of evidence to show it will have that effect)
o the measure or restriction must be necessary to achieve the aim, that there cannot be any less onerous way of doing it
o the measure or restriction must be reasonable, considering the competing interests of different groups at hand.
InEuropean Union lawthere generally acknowledged to be four stages to a proportionality test, namely,[3]

  • there must be a legitimate aim for a measure
  • the measure must be suitable to achieve the aim (potentially with a requirement of evidence to show it will have that effect)
  • the measure must be necessary to achieve the aim, that there cannot be any less onerous way of doing it
  • the measure must be reasonable, considering the competing interests of different groups at hand
Dendia’s speech part 5 Wikipedia:Hamdan v. Rumsfeld
In Hamdan v. Rumsfeld case (2006), the US Supreme Court held that military commissions set up by the Bush administration to try detainees at Guantanamo Bay lacked “the power to proceed because its structures and procedures violate both the Uniform Code of Military Justice and the four Geneva Conventions signed in 1949.” Specifically, the ruling said that Common Article 3 of the Geneva Conventions which requires fair trials for prisoners was applicable in such situation and thus violated. Hamdan v. Rumsfeld,548 U.S. 557(2006), is a case in which theSupreme Court of the United Statesheld thatmilitary commissionsset up by theBush administrationto trydetainees at Guantanamo Baylack “the power to proceed because its structures and procedures violate both theUniform Code of Military Justiceand the fourGeneva Conventionssigned in 1949.”[1]Specifically, the ruling says that Common Article 3 of the Geneva Conventions was violated.
Two years earlier in Hamdi v. Rumsfeld case the Court had recognized the power of the government to detain enemy combatants, including U.S. citizens, but ruled that detainees who are U.S. citizens must have the rights of due process, and the ability to challenge their enemy combatant status before an impartial authority. Hamdi v. Rumsfeld,542 U.S. 507(2004), is aUnited States Supreme Courtcase in which the Court recognized the power of thegovernmentto detainenemy combatants, including U.S. citizens, but ruled that detainees who are U.S. citizens must have the rights ofdue process, and the ability to challenge their enemy combatant status before an impartial authority.
Dendia’s speech part 6 Wikipedia:European union
It took us decades of hard negotiations to move forward from the European Community of Coal and Steel (1952) to the European Economic Community (1957) and from it to the European Union (1992). The latter constitutes today an economic and political union of 27 member statesencompassing a population of more than 500 million habitants and ranking No 1 in the list of countries by Gross Domestic Product (GDP) in total (Per capita ranks No 15). The EU traces its origins from theEuropean Coal and Steel Community(ECSC) and theEuropean Economic Community(EEC), formed by theInner Sixcountries in 1951 and 1958 respectively.

[…]
With a combined population of over 500million inhabitants,[24]or 7.3% of the world population,[25]the EU, in 2012, generated a nominalgross domestic product(GDP) of 16.584 trillion US dollars, representing approximately 20% of the global GDP when measured in terms ofpurchasing power parity, and represents the largest nominal GDP and GDP PPP in the world.[26]

Dendia’s speech part 6 Web page:Citizenhouse.eu
Fundamental rights established by the European Convention for the Protection of Human Rights and Fundamental Freedoms(1950) and other international legal instruments ratified by the Members States, as well as those deriving from the constitutional traditions common to them, form part of the general principles of law that are enforceable by the Court of Justice of the European Union.

Moreover the Treaty of Lisbon (2007) brought substantial amendments to the field of human rights environment by giving them a legally binding status, making them part of primary law and providing EU citizens with an additional layer of protection:

The revised Charter of Fundamental Rights originally proclaimed in Nice (2000) is the most updated and comprehensive legal instrument of human rights in the world. It contains fifty “rights, freedoms and principles”, stretching from civil and political rights on the one hand to economic, social and cultural rights on the other. Being part of the primary law, the Charter prevails over national law of Member States, when they are acting within the scope of EU law (Article 51). After the adoption of the Treaty of Lisbon, it became directly enforceable by the EU and national courts (Article 51(1)).

It is important to keep in mind that fundamental rights established by the European Convention for the Protection of Human Rights and Fundamental Freedoms, and other international legal instruments ratified by the Members States, as well as those deriving from the constitutional traditions common to them, form part of the general principles of law that are enforceable by the Court of Justice of the European Union.

[…]
The Treaty of Lisbon brought substantial amendments to the field of human rights environment.The Charter of fundamental rights of the European Union(hereinafter referred as the‘Charter’) is now part of primary law and has been given a legally binding status.
The prime objective of this Charter is to bring together your European citizens’ rights that had been scattered over a range of national and international instruments, making them more accessible, visible while providing EU citizens with an additional layer of protection.
The revised Charter now contains fifty “rights, freedoms and principles” the Charter contains both civil and political rights on the one hand, and economic, social and cultural rights on the other. There are also a number of new generation’s rights – such as the right to a clean environment and a right to good administration. These rights are organised under five major headings – human dignity, fundamental freedoms, equality, solidarity, citizenship and justice. It also contains four horizontal provisions, which are intended to clarify its field of application, scope and interpretation of its provisions.
Applying to the EU institutions and bodies, it means that they must conform to the Charters’ rights and observe its principles.
Being part of the primary law, the Charter prevails over national law of Member States, but only when they are acting within the scope of EU law (Article 51). After the adoption of the Treaty of Lisbon, it became directly enforceable by the EU and national courts (Article 51(1)).]

Dendia’s speech part 7 Wikipedia:Prum Convention
Especially the Prüm Convention, also known as Schengen III Agreement (2005) has been criticized as the ‘eye of Big Brother over Europe’. The Treaty provides theexchange of data regarding DNA, fingerprints and vehicle registration of concerned persons and cooperation against terrorism. It also contains provisions for the deployment of armed sky marshals on flights between signatory states, joint police patrols, entry of (armed) police forces into the territory of another state for the prevention of immediate danger (hot pursuit), and cooperation in case of mass events or disasters.
The Treaty was initially adopted outside the EU framework but some of its provisionshave already been subsumed into the police and judicial cooperation provisions of EU law by Council decisions providing for law enforcement cooperation in criminal matters primarily related to exchange of fingerprint, DNA (both on a hit no-hit basis) and vehicle owner registration (direct access via the EUCARIS system) data.
ThePrüm Convention(sometimes known asSchengen III Agreement[1]) is a treaty which was signed on 27 May 2005 byAustria,Belgium,France,Germany,Luxembourg, theNetherlandsandSpainin the town ofPrüminGermany. The convention was joined later byother membersof theSchengen Agreement.
Παρακάτω:
The Convention was adopted so as to enable the signatories to exchange data regardingDNA,fingerprintsandVehicle registrationof concerned persons and to cooperate againstterrorism. It also contains provisions for the deployment of armedsky marshalson flights between signatory states, joint police patrols, entry of (armed) police forces into the territory of another state for the prevention of immediate danger (hot pursuit), and cooperation in case of mass events or disasters.

[…]
The Convention was adopted outside of theEuropean Union framework(and its mechanism ofEnhanced co-operation), but asserts that it is open for accession by anyMember state of the European Unionand that:
provisions of this Convention shall only apply in so far as they are compatible withEuropean Union law[EU law]should take precedence in applying the relevant provisions of this Convention
—Convention on the stepping up of cross-border cooperation, particularly in combating terrorism, cross-border crime and illegal migration,Article 47
Additionally the text of the Convention and its annexes were circulated on 7 July 2005 between the delegations to theCouncil of the European Union.
Some of the Convention provisions, falling under theformer third pillar of the EU, were later subsumed into the police and judicial cooperation provisions ofEuropean Union lawby 2008 Council Decisions,[3][4]commonly referred to as thePrüm Decision. It provides for Law Enforcement Cooperation in criminal matters primarily related to exchange of Fingerprint, DNA (both on a hit no-hit basis) and Vehicle owner registration (direct access via theEUCARISsystem) data.

 

Source: thePressProject.gr

FCA fines EFG Private Bank £4.2m for failures in its anti-money laundering controls

EFG Private Bank has been fined £4.2 million for failures in its anti-money laundering (AML) controls, the first monetary penalty imposed by the new Financial Conduct Authority (FCA).

EFG is the UK private banking subsidiary of the EFGI Group, a global private banking group, based in Switzerland.  EFG provides private banking and wealth management services to high net worth individuals including some from overseas jurisdictions recognised as presenting a higher risk of money laundering and/or bribery and corruption.  At the end of 2011 around 400 of EFG’s 3,342 customer accounts were deemed by the firm to present a higher risk of money laundering or reputational risk, and of these 94 were held by politically exposed persons (PEPs).

As part of a thematic review of how UK banks were managing money laundering risk in higher risk situations, the Financial Services Authority (FSA) visited EFG in January 2011.  That visit and further investigation caused serious concern to the FSA.  The investigation found that EFG had not fully put its AML policies into practice.  Of particular concern was that 17 of 36 reviewed customer files, opened between December 2007 and January 2011, contained customer due diligence that highlighted significant money laundering risks, but insufficient records of how the bank’s senior management had mitigated those risks.

Of these 17 files, the FSA found that the risks highlighted in 13 files related to allegations of criminal activity or that the customer had been charged with criminal offences including corruption and money laundering.

For example in one account, EFG’s due diligence highlighted that a prospective client had acquired their wealth through their father, about whom there were allegations of links with organised crime, money-laundering and murder.  However there was insufficient information on file to explain how the bank concluded that this risk was acceptable or how it was mitigating the risks.

EFG also failed to appropriately monitor its higher risk accounts.  Of the 99 PEP and other high risk customer files reviewed by the FSA, 83 raised serious concerns about EFG’s monitoring of the relationship.

As a result of these failures, EFG breached FSA Principle 3, requiring it to take reasonable care to organise and control its affairs responsibly and effectively.

Tracey McDermott, head of enforcement and financial crime, said:

“One of the FCA’s objectives is to protect and enhance the integrity of the UK financial system. This includes ensuring money in the UK system is clean.

“Banks are the first line of defence to make sure that proceeds of crime do not find their way into the UK.  In this case while EFG’s policies looked good on paper, in practice it manifestly failed to ensure that it was addressing its AML risks.  Its poor implementation of its agreed policies risked the bank handling the proceeds of crime.  These failures merited a strong penalty from the FCA.

“Firms that accept business from high risk customers must have systems, controls and practices to manage that risk. The FCA will continue to focus on high risk customers and business.”

EFG settled at an early stage of the investigation and qualified for a 30% discount on its fine.  Without the discount the fine would have been £6 million.

Notes for editors

  1. The Final Notice for EFG Private Bank Ltd.
  2. On 22 June 2011, the FSA published its findings from a thematic review, which focused on how banks manage money laundering risk in higher risk situations.  The FSA published a Policy StatementPS11/15 Financial crime: a guide for firms on 9 December 2011. This contains guidance on steps firms can take to reduce their financial crime risk, including in their dealings with high risk and PEP customers.
  3. EFG breached Principle 3 of the FCA’s Principles for Businesses.  Principle 3 is set out in the FCA Handbook and states: a firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
  4. The FSA fined Coutts and Habib Bank for similar AML failings.
  5. On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
  6. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers
  7. You can find more information about the FCA, as well as how it is different to the PRA.

Source: fca.org.uk

BlitzGreek on Germanizm

Blitzkriegs were Nazi Germany’s violent surprise military attacks against its targets with overwhelming firepower and speed that left little or no options for defence.
The new victims of German neoNazism are orienting for doing the same to Germanizm: this economic-geopolitical entity and phenomenon which brought bloodshed to the world twice in the 20th century and formed the backbone of what is historically known as “Barbaric Invasions” against the Roman-Byzantine empire from the 3rd century. It was a significant influence for altering the meaning of the Greek word barbarian (“Varvaros”). It used to mean “foreigner”, “stranger” but these invasions from “foreigners” and “strangers” were of such brutal nature that gradually the word barbarian solidified in the meaning it has today; because of German tribes’ brutality and barbarism. Although they were exposed to Greek civilization through the Byzantine Empire, most of them were not eventually civilized, not even through the people they conquered (the majority of today’s Europe are barbarian-conquered Byzantine populations). What we see today is the culmination of the survived barbarism for total germanization-totalitarianism of Europe.
Germany is the most dangerous Rogue State today. Only the physical removal of Germanizm from the German society can stop today’s crisis (to the point of even renaming Germany after a time). And this can be done with Germany governed by non-Germans, like after the Second World War. This will also remove existing and covert non-German power, which uses Germans as foundations for enslaving the world. In the final analysis, those living in Germany (citizens and foreigners) will be finally liberated from any external exploitation (German and non-German) and truly live humanly.
There is no way, however, to have German population convinced to change their leaders, their current policy and dependencies. German society is crawling behind the current neoNazi leadership as it did during Hitler’s era. Like in WWII, German leadership (political, economic, Media, etc) must be externally detached and stopped from influencing the people.
The entire Germany must be de-Germanized. That was the fundamental goal of the Allied Control Council. The de-Nazification was essentially de-Germanization, that was never achieved. Today the entire world pays for the inability and inadequacy of the United States, Britain, France and the Soviet Union to jointly heal German society and remove the Germanizm infection from it. Nazizm was the latest symptom and it was not treated properly. We should go back and treat German society to remove the infection.
The re-activated regime in Germany has recently demonstrated its old nature once again, with the racist “economic” attack against Greece, Cyprus and the European South. The old regime of Germanizm, which uses people living in Germany, nurtured Nazism in the Second World War and its predecessors of First World War. It is now in full control of the German state, in an effort to eliminate democracy and freedom in Europe and turn the European Union into a Fourth Reich. The manufacturing of today’s “economic crisis” is the main instrument. It is the new Final Solution against south Europe and especially against Hellenism which played a decisive role in the Nazi defeat and was later betrayed by the “Allies” of that time.
The German regime is rebuilding the former Nazi Axis with countries like Austria and Finland that belonged to it and new ones like Netherlands, which created the Apartheid regime in South Africa and with a new Vichy government in Paris. Italy and Japan seem to be escaping the new Axis.
We will not enter into detail on the game that was set up against Greece, as well as Cyprus and the European south. What the “self-authorized experts and guardians of fiscal responsibility” did, was to make full use of (Siemens-controlled) Greek corrupted politicians and business figures. They presented a virtual reality situation on the Greek society, diverting attention from their actions and goals.International Media proved to be inadequate to reveal these covert actions. They even doctored statistical data to inflate deficit and the corruption, management uselessness etc of main political parties and their business handlers, who were their associates in ripping-off the wealth of the Greek people and the country.
served as one “scientific” justification for the economic and moral destruction of Greek society at first and Spain, Portugal, Italy, Cyprus later. Two of the most crucial points, which are constantly blocked in international Media, are the huge amounts of WWII compensation which Germany owes to Greece and the second is the public demand for judicial inquiry on “who, why, how much” Greeks owe money. The latter will prove to be a huge surprise, because it will reveal that the actual Greek debt is MUCH SMALLER than presented. Greece was presented as a virtual “Debt Colony” to speed up political and civil liberties violations throughout Europe, towards a “Federalized” totalitarian “German Europe”. Greece is supposed to have borrowed money from some entities that did not have this money, but they produced it virtually, out of nowhere. Literally, this is what happened.
Essentially, the European Union and Eurozone owe Greece compensation because they failed to fulfill their obligations to Greece. When Greece entered the Eurozone, it abandoned its drachma currency and completely replaced it with the euro, as all Eurozone countries did with their currencies. Greece also delivered national sovereignty in the monetary-economics fields to the Eurozone, certainly for something in return which was never given. Greece was pushed into the euro, the country did not select its participation. Greeks did not really want the euro and did not see any real tangible benefits from the euro. The only benefit finally presented to them was that there would be “Monetary and Economic Security”, that is, if some organized groups attack Greece financially, they will face all Eurozone supporting Greece. This is EXACTLY what DID NOT happen. Germany and France with all other Eurozone countries, attacked Greece alongside with what is called “The Markets” on the grounds of the artificially created “crisis” we mentioned before. They failed in their obligations towards Greece and now have the nerve to demand that Greece should deliver more national sovereignty!
“The Markets” are essentially a composition of high level organized crime interests which now managed to control European and other governments in a focused attack against other targets: countries, economies, etc. Since the Eurozone did not honor its part of the agreement with Greece, it should compensate Greece instead of playing the role of “self-authorized expert and guardian of fiscal responsibility”. However, the German-controlled Greek governments (of Papandreou, Papadimos and now of Samaras) are incapable of raising any voice and are now collapsing. The collapse will start the new era of total control on Germanizm.
The people are already self-organizing their response without the need of government approval. The German WWII compensations are now set on another basis, for immediate German payment. The German debt to Greece reaches almost 1 trillion euros (if we take into account the interest rate). Instead of taking action to force Germany pay what it owes to Greece, another approach takes shape: Take action to have income from now on and stop the interest rate from now on, while at the same time continue the actions against Germany for the amount it owes until now. More specifically: remove legal protection on German patents, trade secrets and other legally protected property either held by German companies or individual Germans or German-based companies. The products and services based on these patents, trade secrets, etc will be produced in Greece by Greeks (preferably from the cities that were slaughtered by German Nazi troops) and sold to the Greek market without the obligation to pay fees to German individuals, companies and German-based companies holding intellectual rights. There is a perfectly ethics and moral basis for that.
The German state did not pay to Greece the money which the German occupation forces stole from Greece and the compensation from the atrocities and infrastructure destruction the Nazis did to Greece. The German state used this money to support the German educational system of Universities and other educational levels, to enhance the business and economic conditions in Germany, to foster entrepreneurship and industry and do what any government would do to grow the national economy. The German governments did this because they had money: the stolen money of occupied Greece and other countries which the Nazis brought to Germany. When children in post-war Greece were freezing in their classrooms even without shoes, because Nazi Germans took to Germany all the wealth, resources and other means, the German state was using this stolen money, wealth, resources and means to boost education and the German economy. Similarly in business when Greeks were struggling every day after the war for decent work and living, their stolen money was supporting and building German industries. A major part of the German society’s foundations were created with Greek money stolen by Nazis and kept by their successors.
The entire German economy today is totally supported on this infrastructure (academic, training, business, institutional, etc) that was created to a large extent using the stolen Greek money which Germany was supposed to pay back and never did. Greek money actually funded German growth and Greeks never got something in return. Therefore, the spirit of the previously mentioned is that Greeks will assume access to the profits they did not have for almost 60 years by using and selling products and services developed partly with their money. The German debt will not be increasing from now on (because the equivalent interest will be balanced by the income from selling such products and services) but the already existing amount will still be demanded. No permission is necessary from Berlin.
The moral and ethical foundations of this move are solid, since the victims of Nazi atrocities could me managing companies offering these products and services. The victims themselves or their children could be handling this enterprise, although any Greek citizen could be entitled to do so. The German individuals and companies can be compensated for their loss directly by the German state. The money they will (justifiably and completely ethically) loose from this Greek initiative should be paid back by the German state. Their loss will be a result of the actions of German governments and in their capacity of German citizens they will be entitled of compensation from their government.

 Images of Greek Schools after WWII

These are some sample images from Greek schools after World War II, when the country was struggling to survive after the Nazi atrocities on people and destruction of infrastructures. German denial to pay war compensations and the mandatory loan kept stolen Greek money in Germany and left Greek children in such conditions, when German schools and industry were growing with Greek money. This stolen Greek money funded the so called “German miracle”.

Greek Banksters in Action

by Yanis Varoufakis

Last November I posted a piece entitled A Small Victory for Press Freedom in Greece’s Struggle against Cleptocracy. That story concerned the courageous decision of Kostas Vaxevanis, one of Greece’s few, valiant investigative reporters, to publish the so-called Lagarde List; the list of Swiss bank account holders that Greece’s political class did its utmost to keep hidden, to pretend that either it never existed or that it had been ‘misplaced’. Since then, Vaxevanis has been arrested by Special Branch officers, was tried in the Greek Courts, was acquitted triumphantly, and, more recently, awarded one of international journalism’s top awards.

In an earlier piece, last July, (entitled Bankruptocracy in the Greek Sector of Bailoutistan) I had drawn my readers’ attention to the remarkable revelations of Reuters’ Stephen Grey regarding the ponzi scheme put together by Greek bankers for the purposes of usurping Europe’s bank recapitalisation rules, pretending that they managed to draw private capital into their insolvent banks which never really existed. My piece castigated the Greek media for maintaining a veil of silence on these corrupt and criminal practices, while highlighting the troika’s curious lack of interest in the shenanigans of bankers who are receiving billions of European taxpayers’ money (in the process of the so-called ‘recapitalisation’ process).

Today’s post links these two stories together in a manner that you, dear reader, will find startling, worrying, enraging, disconcerting. It comprises, mainly, the summary of a letter that Kostas Vaxevanis sent to a London based journalist last week (the translation and summarising from the Greek original is mine). With this letter Vaxevanis sought support, advice and an opportunity of spreading the news of the dire situation faced by Greeks (citizens and journalists) who refuse to keep silent in the face of deep seated, criminal corruption. I urge you to read on.

“In May 2012, I investigated the functioning of Greek banks, with special emphasis on a certain Greek Bank (The Bank henceforth) and its Chairman (The Chairman). I found that The Chairman’s family members were the secret owners of a number of offshore companies that would receive loans from the bank without any real collateral. These loans would then: (a) be written off as unserviceable, or (b) be used to buy office space that would immediately be resold to other parties which would then lease them to The Bank or sell them toThe Bank at inflated prices. In addition, other offshore companies were used byThe Chairman to borrow substantial amounts from two other Greek banks, again with no collateral, for the purposes of buying shares The Bank (thus helping the bank demonstrate its capacity to draw in private capital). Since then the owner of one of these two other banks has been imprisoned (on different charges) while the second bank involved has played a central role in bringing down the Cypriot banking system (after its merger with one of the island’s now collapsed banks and the transfer of its headquarters from Greece to Cyprus).

After the publication of these two investigative pieces, photographs of Stephen Grey (the Reuters investigative reporter who broke a part of this story to an international audience), were published in various websites with the caption: “The man who came to destroy Greece”. Worse still, the same blogs circulated a ‘document’ which ‘showed’ that I was on the payroll of the Greek state’s intelligence services. I managed to defuse this campaign of defamation by writing extensively about it in the press.

On 11th September 2012, late at night, a group of 4 or 5 people staked out my home. It was only accidentally that I avoided being ambushed (my motorcycle had a flat tire and I thus returned home in a friend’s car). Upon noticing the stalkers I called the police and asked them to come quietly. The police arrived noisily and went to a nearby house first, thus giving the men plenty of time to make their escape. For days, the police refused to investigate properly or to call eyewitnesses to make a statement (later, after I published the story, they did). Since then, I have been denied police protection (unlike most other journalists) and have had to resort to private security.

Soon after the failed ambush, a woman visited my office insisting that I should see her to discuss “the bankers’ designs” on me. I decided to meet with her. She was a frightened woman who claimed to be in grave personal danger. She said that she had been, and was, part of a group comprising former agents and salaried members of the Greek intelligence services, connected to business interests who worked on, at first, wrecking my public image and, later on, planning my physical demise. She added that it was her who, following specific orders, had forged the document ‘proving’ that I was on the payroll of the secret service – a document which her group then circulated to the various blogs that used it.

According to her testimony to me, a group stationed in Skopja was engaged to “see me off”. Part of the same plot concerned the defamation of another woman, a former bank manager with The Bank, who had been fired on false charges of embezzlement because, in truth, she possessed damning evidence concerningThe Chairman’s family’s activities. Their plan, vis-a-vis this former bank manager was to plant narcotics in a restaurant that she owned on the island of Zakynthos and to orchestrate a very public arrest so that, in the future, if she ever revealed her evidence against The Chairman’s family, the press could dismiss her as a ‘drug dealer’. To prove her story, my interlocutor handed over a sequence of photographs that were the result of the surveillance of the former bank manager taken by «her group». The woman further claimed that she had not dared distance herself from that group but she was afraid that she would be killed upon completing her ‘tasks’.

On our part, we immediately investigated her claims. We subjected her to an accredited graphologist’s test who comfirmed that the forged document showing that I was, supposedly, on the secret agents’ payroll (as published in various blogs) was in her handwriting. We also confirmed with the ferry company that the car in which that team of operatives was supposed to have travelled to Zakynthos (to plant drugs in order to frame The Bank’s former employee) had indeed travelled there. We also established that the car was registered to former intelligence agents who had been prosecuted for an number of misdeeds – and whose court case is pending.

I met with this woman a number of times in an attempt further to establish the truth of her allegations. In one of these meetings, she said that the headquarters of her group was close to our magazine’s (HOT DOC) but also that the group had abandoned those quarters fearing that we had worked out they were conducting surveillance on us from there (after I had written in HOT DOC that I know I am being followed). Furthermore, the woman handed to us audio records from her group’s meetings in which they were discussing their plans. We went to the address she gave us to find abandoned offices that were for lease and to see if they featured hidden crypts (where the woman had told her group kept weapons). We found these hidden crevices and photographed them.

To protect myself, I wrote a report on the above which I sealed and delivered to a notary to be released on the event of my death or disappearance. I also visited a district attorney whose incorruptibility I trust. The woman left Athens and is in hiding, even though I remain in contact with her.

Following the above events, I was contacted by the group of people that I consider to have planned to assassin me. I alerted the police and met with them under police surveillance. In the meeting, they denied everything and pretended they had nothing to do with any of these plans. I left that meeting and then refused to take their repeated calls. A few days ago the case files were transferred again from the police to the district attorney. I know nothing further about the law agencies’ activities in this regard.”

Kostas Vaxevanis’ letter then moves on to another, related, issue: The Lagarde List which he and HOT DOC published causing a major political storm, that echoed around the world, and leading to his arrest (for endangering the privacy of those on the list) – not to mention to worldwide acclaim at least within the international community of investigative journalists. Vaxevanis was then acquitted in a short and triumphant trial but the prosecution appealed with the result that a second trial will take place next June.

Meanwhile, following the publication of the Lagarde List, and under enormous pressure from public opinion, the Greek Parliament set up an investigative committee (made up of parliamentarians from each party, in proportion to their strength in Parliament – as per the Constitution) to investigate only one person: the former Minister of Finance, Mr George Papakonstantinou under whose watch the Lagarde List got ‘lost’ within the Greek government and was never utilised by the authorities. The said Committee has a remit to rule on whether there is sufficient evidence to try Mr Papakonstantinou. In the context of its investigation, the Committee calls witnesses who are then examined by members of the Committee. In his letter, Vaxevanis says that, even though no one disputes that the list he and HOT DOC published was the original Lagarde List – as given to him by an anonymous person – certain members of the Committee subjected him to aggressive examination (something that I can vouch for having read the official transcripts as produced by the Greek Parliament) the purpose of which was, clearly, not to establish the truth about the Lagarde List but to discredit Vaxevanis and HOT DOC. Vaxevanis notes in his letter that the members of the Committee that were most aggressive happened to be the ones that ought to have stood down from the Committee on the basis of a clear conflict of interest. In particular, Vaxevanis writes in his letter:

“The mother of one member of the Committee was on the Lagarde List. The wife of another member of the Committee appears to have power of attorney for an account on the Lagarde List. The third member, who happens to Chair the Committee, is the lawyer of a tax office employee who has been convicted for having embezzled millions of euros of tax payers’ money. He has also been the subject of two parliamentary investigations but escaped prosecution shielded by legislation that gives investigators/prosecutors a mere two years before the case is considered to fall under the statute of limitations.”

Vaxevanis’ letter finishes thus:

“I thought it important to relate to you these events. I am in need for your assistance and advice. Every day that goes by, a new piece of a conspiracy is put together and I fear that the jigsaw may be completed by the time my second trial takes place in June. I feel they are keen to convict me while giving me the option to pay a fine instead of serving time in prison. Of course if convicted I shall refuse to do so, opting for prison in order to publicise in that manner what is going on in this country. I could ask for assistance from opposition parties but I revile the idea of becoming part of the party political game. Thank you for your attention and apologies for tiring you with my long-winded story. Alas, you are our only allies. Greece is sinking not only in an economic crisis but also in filth.”

Epilogue

You may wonder what happened to The Chairman and to The Bank. The Chairman is doing fine, thank you. His insolvent bank has now turned into a (by Greek standards) Too-Big-Too-Fail monster, having been handed on a silver platter the good chunks of banks that the Greek taxpayer has paid through the nose to carve out of failed operations. Those in the know expect that he, amongst all Greek bankers, will probably manage to retain control of ‘his’ bank after ESM-funded recapitalisation (though no one seems to know why he can attract private capital when healthier banks, like the National Bank of Greece, are failing to do so). His close connections with people high up in the Central Bank of Greece and in the political establishment (that the average Greek refers to as the Cleptocracy) have ensured that his power to extract rents from the rest of a crumbling society is inversely proportional to ‘his’ bank’s performance. Being a major ‘sponsor’ of the bankrupt (both financially and morally) Greek media has certainly not done him any harm.

Bankruptocracy in the Greek Sector of Bailoutistan is, thus, progressing in leaps and bounds. With European taxpayers’ loan guarantees providing the capital and a bonfire of the Greek people’s hopes for the future supplying the energy.

Source: yanisvaroufakis.eu

Greek journalist Kostas Vaxevanis uncovers assassination plans

The 3rd issue of the magazine HotDoc, dated 24 May 2012, revealed sensitive information about scandals involving Greek banks. Advance copies had been sent to other news outlets. On 23 May, Fimotro, a blog often denounced for engaging in defamation and blackmail, published a picture of a receipt allegedly issued by the Greek Intelligence Service (EYP) in the name of HotDoc’s editor, Kostas Vaxevanis. The receipt was dated 15 June 2011 and said he was paid €50,000 for services to EYP for the 1st semester of 2011. Fimotro, as well as other blogs which circulated this picture of the receipt, also played a role in portraying Reuters’ Steven Grey, who was researching a similar story on Greek banks, as an “agent” of unknown forces who sought to ruin the Greek economy (Reuters published at the time a long piece on the surveillance Grey was subjected to).

The HotDoc team denounced the receipt as a forgery and Vaxevanis tried to sue Giannis Papagiannis, the administrator of Fimotro, whose name is known to the public following a previous court case in which he was accused of blackmail. Strangely, the prosecutor office refused the documents of the previous case file as proof of his identity, and, because Papagiannis could not be charged with a felony in the HotDoc case, Google refused to provide his personal data. The case against Papagiannis was thus dropped, despite abundant online evidence of his identity, including, recently, blog postssigned with his full name.

Then the HotDoc team started receiving barely veiled threats through friends and acquaintances, while living under the constant impression that they were being followed. The magazine however continued to conduct research on banks. In July 2012, it published a first set of findings showing that a team of EYP perjurers, who had been exposed for illegal activities by the HotDoc journalists in the past, was trying to eliminate them in collaboration with big businessmen and bankers.

On 8 September, Vaxevanis was returning home late at night in a friend’s car when they noticed two vehicles parked strangely in the street with their headlights on. He avoided the cars and entered his house through the back door, unnoticed. Early the next morning, on 9 September, he heard his dog bark. He got up and saw in the garden a man hiding behind the gate, as if waiting for him to come home. He called the police, whose arrival in the street scared the presumed assailants away – it turned out that there were at least 4 of them – but they managed to escape, as the operations centre had given the patrol car a wrong house number. When State Security agents came later during the day to take Vaxevanis’s deposition, the commanding officer dismissed the whole case as a botched burglary attempt. Vaxevanis reported to the police observations made by himself and by neighbours about people loitering in the neighbourhood, but was never asked to give the witnesses’ names. Neither was he offered police protection, which many prominent journalists enjoy in Greece. The media also ignored the issue, while some people in media circles started whispering that Vaxevanis was merely an attention whore.

On 17 September, a woman named Maria contacted HotDoc and asked to meet Vaxevanis, saying that it was a matter of life and death and that “his life is at risk, it’s the bankers”. She claimed that guns-for-hire from FYROM had been contracted by a banker and ordered to kill Vaxevanis, that she herself had forged the EYP receipt in his name, that the same gang was contracted to defame journalist Tasos Telloglou, who was also publishing reports critical of the same banker, and, most importantly, that they were to break into the offices of Reuters journalist to steal evidence of a serious bank scandal. HotDoc knew that such a break-in had already happened on 30 May in the offices of Reuters’ Nikos Leontopoulos, but the event had never been made public. For Maria to know this, she must have been involved somehow, and HotDoc decided that Maria’s “confession” was worth investigating.

Maria revealed that she had been hired by a company run by a number of individuals employed by EYP. She was asked as part of her duties to prepare forged receipts in the name of Vaxevanis, other journalists and a politician from Independent Greeks, all in the name of the “national interest”. The targets had in common that they were investigating scandals involving the banker who hired the company or the illegal activities of the company owner himself. The receipts were then sent not only to “friendly” newspapers and to a publishing company in greater Athens, but also to the offices of New Democracy, where a party official showed the Vaxevanis receipt to a foreign journalist who was interviewing him about the Lagarde list and Vaxevanis’s arrest.

After defamation-by-receipt failed, the EYP gang, according to Maria, launched three parallel operations. The first aimed at defaming Tasos Telloglou, the second at eliminating – physically – Vaxevanis, and the third at discrediting the key witness in a lawsuit against the same banker who was targeting Vaxevanis, by planting drugs in her restaurants and framing her for drug trafficking. After the ambush at Vaxevanis’s house on 9 September, Maria had understood what the “contract” she heard mentioned in conversations was about and freaked out, realizing that, after Vaxevanis was killed, she would likely be next. She tried to pull out under various pretexts, but, since that was not possible, she chose to meet with Vaxevanis and tell him the whole truth. The HotDoc team asked her to keep her position in the EYP gang so that they could conduct their investigation safely.

From there on, Vaxevanis first met with a notary to give a statement about the whole story, in a document that was to be unsealed and published only in case of his death or with his explicit order. He then informed Tasos Telloglou that he was being targeted too. Then, the HotDoc team took handwritten notes handed over by Maria to an expert graphologist, Ioannis Makris, who was formerly the deputy head of the Hellenic Police Directorate for Criminal Investigations. Makris was able to determine that the author of the handwritten notes was most likely the same person as the one who had forged the EYP receipt. In December 2012, Makris met with Maria at the HotDoc offices to take handwriting samples from her. After examining the samples in detail, Makris concluded beyond any doubt that Maria was the author of the receipt, while the signature on the receipt was obviously not that of Vaxevanis.

The HotDoc team was further able to confirm Maria’s statements by visiting the premises used by the EYP gang to monitor the magazine, where they found hidden crypts behind ventilation shafts as she had described. Meanwhile, Maria played her role and was pretending to run the operation targeting the witness in the court case against the banker. She gave documents and surveillance photographs about this operation to the HotDoc team, which was able once again to cross-check the information. Having collected sufficient evidence that Maria’s story was well-founded, the HotDoc team took their case to the judiciary. HotDoc was also provided a CD with recorded phone conversations between members of the gang, in which they discuss details of their operations and name the banker behind the story (for safety reasons, the CD has been given for safekeeping to colleagues abroad.)

In early December 2012, HotDoc was contacted by one, then two, other members of the gang, in what seems to have been an attempt at laying the blame for the whole operation on the rest of its members. After two meetings, HotDoc chose not pursue the contact any further.

The magazine also notes that verbal attacks against Vaxevanis have been scaled up in political circles, quoting the minutes of a session of the parliamentary investigation committee on the Lagarde list, in which PASOK’s leader Evangelos Venizelos, instead of discussing his own role in matter, insinuates that a rival banker is secretly funding HotDoc and that “the Service” (hinting at EYP) should be able to prove it.

The 26th issue of HotDoc includes a thorough article on the above, as well as a long interview with Maria in which she narrates the story in detail, a list of the individuals involved in the EYP gang (initials only) and extensive documentation, including photographs, from the magazine’s investigation file.

Source: koutipandoras.gr

Read the whole story in Greek here.

Dimitroula and the Barbarian, by Chronis Missios

Three years now Dimitroula won the championship. And of course the sadness and unhappiness would not be so great if the prize of victory was only medal. Besides, it is obvious that the philosophy of the group that would be pure vanity, and all of them would prefer the walk by running around. But the prize included  an innocent lamb that would sacrifice himself to the spit of the winner.

The decision to enroll Dimitroula for the first time in the donkey-race, the Architect took under the kind exhortations of Ismini and Gerasimos, who pitied the lamb. Slowly, it became like the annual vow of the group, the first common purpose for the year and they all felt good, because the path for this was full of selflessness and love.

It was natural then that Dimitroula would have the most fans and the most enthusiastic among the kids and the loving people, since she was the only one struggling to save the lamb from the knife.

Year after year, this seemingly innocent sports meeting evolved quite naturally in the collision of two different biological theories, as the Maoist would suggest. In any case, nobody would be satisfied with the familiar phrase “the best won”.

Why this ‘best’ would take wider dimensions. The victory strengthened or weakened the questions of the type: “What is best to drink Harp Cola or two oranges”? “These crisps are better or fresh almonds”? “Fresh milk or canned”? – And such.

But the conflict would lead to other problems even thicker, such as “What is wisest to make a hotel in the field or to leave it a field”? “Violence is better or understanding and love”, and so on.

As one realizes, this donkey-race was a tough conflict between financial interest and love, between artificial and natural, between profit and selflessness.

As if Dimitroula was a donkey with the true meaning of the word! We would call it rather a miniature donkey so to speak.

“We will do everything we can,” replied the Architect’s concerns doctors. She’s smart and mostly magical, maybe she’ll manage. I will consult and old-Nicole.

“Like a mule is the cuckold, huge,” said the Doctor.

“David and Goliath” replied the Architect. “But there is always hope for good: let’s make positive thoughts.”

“God helps those who help themselves” replied the Maoist appearing through the dusk.

Not even Magas noticed him. He didn’t like him very much neither. As a child of nature, he could “read you” instantly and he knew all the bad and the good that each carried inside hi. He felt that the Maoist loved not like anybody else, but as if he was doing him a favor, like politicians ‘sacrifice’ themselves to save us. But as we said, the Maoist had a long way yet to accept Nature at least as equal.

He sat down, drank Architect’s raki because he was too lazy to go get another glass, picked the best meze, licked his fingers and asked: “What do we do against this brutal imperialist challenge of the multinationals? You have learned I guess that Harp Cola owns Barbarian “.

Before anyone had time to reply, he continued undaunted to deliver a series of proposals starting from we also buy a donkey like Barbarian, more robust and more powerful than Dimitroula, to steal or poison Harp Cola’s Barbarian.

Architect got up and brought Maoist a glass, he poured him some raki and gave him a kind smile, one of those sweet smiles of untold kindness. Maoist tried to attack his smile: “Do not start again to bullshit me, that violence is the midwife of power, that the right and the good, the conscience, the tenderness and all these abstract concepts are more effective way to overturn capitalism! ”

“As for capitalism, we don’t give a shit, buddy, and as for the overthrowing it, I have overthrown it for myself. When the others want the same, let them overthrown it for themselves, said the doctor calmly. ”

“Not only the most effective way, the only way” replied Architect, “if you understand what the doctor told you”. But Maoist was carrying so much realism in him,  that he was like inside a snapshot.

“But Capitalism uses brute force. Here: he paid three hundred grand and bought Barbarian. This is the painful reality. What are you going to do? Send him some waves of affection?

Architect looked at him for a moment surprised and then hugged him and kissed him. “You gave me the nicest idea. Now I’m sure this year will save the lamb. ”

The Maoist and the Doctor looked at him questionably. The Architect poured some raki in his glass, he drank it, smiled and said: “You must be wondering what happened to me. Among the revolutionary bullshit of our buddy that filled us with toxins, a sentence passed in my heart and enlightened me: “And how will you beat Barbarian? Will you send waves of affection?”

This phrase brought me back to the right path of thinking, that path that prohibits any evil to achieve good. Friends, we can only achieve through the path of affection, of understanding and of love. We cannot defeat an opponent, but we can defend our innocence and our tender sentiments. If in this effort we identify with the opponent in thinking and behavior, then even if we win on the battlefield, we are the losers. ”

by Chronis Missios, The key is under the geranium

The “Dictatorship of the Elites” in Greece

by T. Dimadis

One of the major mistakes that international and European observers often make in their analyses about Greece is that they focus way too much on the problem rather than the roots of it. The nature of these roots is much more political rather than an economic one. For example we have heard many a time about the necessity for Greece to go forward with the structural reforms, put its fiscal house in order and correct the imbalances of its completely dysfunctional economic system. As many of these recommendations, though, have to do about what must be changed in the field of the economy, a most significant matter is neglected that all seem not to want to speak about. And “it’s not about the economy, stupid.” But it is about the “dictatorship of the elites” that Greece has been suffering from for the last three decades or more. In my view, this is the core reason of the very difficult situation that the country is in today. Moreover, this is also the reason of why I am rather pessimistic that there is space for Greece to get back on track sometime in the near future as long as these elites keep ruling the country.

The grievous time that Greece is currently experiencing, is not only the outcome of the free falling economy, the shutting down of thousands of medium and smaller local companies, or the humiliation of more than one million Greeks begging for a job. This is the one side of the coin. The other –even more threatening for the internal political and social stability — side is the “status quo” under which the country is ruled. It is what I call “the dictatorship of Greek elites” in politics, media and economy that has retained, for many decades so far, the power in their hands. Of course this is not a phenomenon occurring for the first time in the history of modern civilization and, for sure, Greece is not the only example of how few “oligarchs” struggle to manipulate a country in favor of their own interests. For those who are not familiar with the Greek reality, I will try to give a clear example of what I mean: What has occurred until today is the function of a nasty vicious circle within which politicians, media and wealthy people supporting each other in the scope of increasing their profits. Their profits though are not necessarily combined with the interests of the vast majority in the society. These are profits being materialized into power in influencing the process of political decision-making, in manipulating the public opinion’s views, in doing business without having the risks of undesirable “constraints” from the state’s surveillance. The role that these elites have played diachronically in Greece has been the reason of why the country was led to bankruptcy. The oxymoron is that these same elites are vowing today to take the country out of the crisis. Can they make it? Greeks don’t think so. Probably not many outside the country either.

Another mistake which is made by many analysts internationally trying to approach the Greek situation is that they usually interpret the social unrest in the country as an opposition — basically against the harsh sequential austerity packages that have been imposed. This is only one side of the truth. The whole truth is that Greeks are protesting against these austerity policies because while wages and pensions are cut, they see “elites” remaining strong and protecting their profits. Their opposition is primarily against these elites’ immorality to preserve their special rights and economic interests while people are forced to accept a wider loss in their income and give up their rights in the labor market. These elites in Greece are the fundamental constrain for the country to go forward and the society to see a light of hope for real change. The systemic alliance among the counterparts of these elites, which drove Greece to the edge of the cliff, does not intend to give up. The “dictatorship of elites” in Greece aspires to retain its privileges deriving from three conditions: the first is the game not to be played within the rule of meritocracy, but the measure of the social class, political power and personal connections that someone must have in order to survive professionally and economically. That’s why most of brighter young minds from Greece, who are not part of this corrupt system, are making the choice to leave the country hunting a better future abroad. The second is the media to remain corrupted and dependent from the government as the way to ensure their financing from the banking system and to gain a kind of “asylum” for any economic illegality. So, the media has a reason to need the government as much as the government needs the media to propagandize its message. The third is politics to continue being something like a members-only club where people, who are favored by the two other parts of elites (media and wealthy), can have access.

The “dictatorship of elites” suffocates Greeks by taking the oxygen they need to build on ruins. But the point is that international lenders of Greece seem to pay no attention to that. Probably because they believe that it is not their business. This is absolutely wrong though. It is their business if they honestly want Greece to meet the basic standards for a country to be perceived as a culturally progressive, socially liberal and politically radical European counterpart. As I belong in the new generation of Greeks, I have no appreciation for how the so-called Troika is approaching the Greek crisis. What they have succeeded to do until today is to make these “elites” stronger and their “dictatorship” even more oppressive for Greeks. In order for Greece to stand up again, it should find a way to escape from the regime of political corruption, media propaganda and immunity for wealthy. As long as this doesn’t happen, the so called “pseudo-democracy” in the country will lead Greeks to find a “refuge” in extremism, as it is demonstrated in the increasing electorate rates of the extremist Golden Dawn party and a tension of a general conservatism wave that is ready to charge at the society.

Source: Huffington Post

Golden Dawn party infiltrates Greek police

A senior police officer claims successive governments in Greece allowed the ultra-nationalist Golden Dawn party to infiltrate the country’s police force. Victims of some brutal attacks by far-right thugs in Athens warn that immigrants are just the first victims in a long list of neo-fascist targets

http://www.guardian.co.uk/world/video/2012/oct/26/golden-dawn-greece-police-video

ONSHORE AND OFFSHORE REALMS EQUALLY SECRETIVE IN GREECE

By Harry Karanikas

 For me, the Offshore Leaks investigation started in September 2012.ICIJ’s deputy director, Marina Walker Guevara, sent me a list of Greek names they had extracted from the data and some extra clues on the material.

She told me that I had two choices: either travel to a country in Eastern Europe to search the data myself now, or wait until November to get remote help from another colleague. Two months was too long to wait. A few days later I travelled to Eastern Europe.

An ICIJ colleague showed me how to search the millions of records. During the first few hours I was totally frustrated; I had to check different tables with names and codes; I had to cross check numbers, shareholders, sham directors and addresses; and read hundreds of emails. And time was pressing – I couldn’t occupy his desktop and office forever. My aim was to track down all of the offshore companies connected with Greeks in the next three days and to be at the airport on time. I still am not sure if I tracked them all.

Back in Greece the crosschecking continued. With the help of another ICIJ colleague in Spain, Mar Cabra, new aspects of the Greek offshore world were revealed. The stories behind the complex moves of the directors and shareholders unraveled slowly, and some of them were expanding outside the country.

Via the ICIJ forum, Vlad Lavrov from Ukraine, Roman Shleynov from Russia, and Frederik Obermaier from Germany provided valuable answers to my questions about the findings. In one way or another, the problems arising during my investigations were solved by ICIJ’s advanced infrastructure and the unprecedented solidarity among my colleagues in this project.

Except for one.

The deeper I went into the stories, the more I confronted opaque obstacles that were not only in the secretive offshore world but in the Greek onshore reality as well.

In my efforts to find out how many of the 107 offshore entities of Greek interest in the ICIJ data were unknown to our tax authorities, I submitted a formal request to the Ministry of Finance of the list of foreign companies registered in Greece.

I still haven’t received an answer. Although the list with the foreign entities should be publicly accessible, it wasn’t. That’s not an exception, it’s the rule that applies in Greece to tons of information which should be available to the public.

From sources inside the ministry I was able to access the list of registered offshore companies “unofficially.” This lead me to discover that the Greek tax authorities knew of the existence of only four out of the 107 offshore entities in the ICIJ data.

Another wall of opacity appeared while searching two bond transactions via an offshore entity of Greek interests. Due to the fact that the transactions took place over the counter, there was no way to find out who had bought the bonds. And it was one of the most interesting purchases I have ever seen: the buyer paid almost double the price the bonds had sold for just four months earlier, while the company’s stock price had remained at the same levels.

Still, after seven months of research into the secretive offshore world, I think that I have only scratched the surface. I know there is a lot more work that has to be done. And, with the help of my colleagues around the world, this scratching may become digging.

Source: icij.org

Why the first Jesuit pope is a big deal

By Caleb Bell

Jesuits are bound by oath not to seek higher office in the Roman Catholic Church, and now one of them has been elected to its highest office: Bishop of Rome, Vicar of Christ, Pontifex Maximus.

Pope Francis, the first Jesuit to become pope, not only represents a paradox for the papacy, but also the larger history of the Society of Jesus, as the Jesuits are formally known.

“On the one hand, Jesuits aren’t supposed to be in positions of authority,” said the Rev. Joseph Fessio, a Jesuit and founder of Ignatius Press. “On the other hand, they’re supposed to be obedient to the church.”

The Jesuits have played a key role in the history of the church. For centuries, they have served as its leading missionaries, founded its most prestigious universities and committed themselves to alleviating the deepest poverty.

St. Ignatius Loyola, a Spanish soldier, founded the order in 1540 after being wounded in battle and having a religious conversion during his convalescence. Jesuits are sometimes known as “God’s Marines,” after Loyola’s military history, and their missions worldwide.

Yet despite their prominence — at 18,000 members, they are the church’s largest religious order — Jesuits have had a complicated history with the institutional church and the hierarchy in Rome. With the first Jesuit pope, things just got a bit more complicated.

With their emphasis on missions work and intellectual pursuits, Jesuits often work on the margins of the church, sometimes overstepping boundaries set by Rome. It’s a point of pride among some Jesuits that they frequently challenge authority and seem to have a predisposition for coloring outside the lines.

“Since their founding, Jesuits have consistently offended people … But if there’s a barricade in the street, there’s going to be a Jesuit on both sides of that barricade,” said David Collins, a history professor at Georgetown University.

The left-leaning liberation theology movement that swept across Latin America in the 1970s and 1980s — including Francis’ native Argentina, where he headed the Jesuit order from 1973 to 1979 — is just one example. Bergoglio opposed it; many of his priests openly supported it.

Here in the United States, the New York-based Jesuit magazine America frequently challenges the hierarchy, so much so that one of Pope Benedict XVI’s first acts after his election was to order the removal of the Rev. Thomas Reese as editor.

“This is all new ground,” Reese said Thursday in Rome, where he’s working as an analyst on the papal transition for National Catholic Reporter.

“We never had a Jesuit pope, so I think we are all trying to figure out how this works, and it was a total surprise to everybody: surprise to the Jesuits, surprise to the media, probably a surprise to Pope Francis. This is something we’ll just work out as time goes on.”

Jesuits have also been accused of wielding too much influence, a concern that led Pope Clement XIV to suppress the order in the 1700s. (Pope Pius VII restored the society in 1814.) The Superior General of the Jesuits is informally known as “the Black Pope” because of the power the position has held in the past.

In the early 1980s, when the Jesuit Superior General was sidelined by a stroke, Pope John Paul II stepped in with his own appointee, rather than allow the Jesuits to elect their own leader. “That was his right as pope, but it still discouraged many Jesuits at the time, said the Rev. James Martin, an editor at America and the author of “The Jesuit Guide to (Almost) Everything.” ‘’With a Jesuit pope, that cloud has been, if not removed, then lifted much higher.”

Patrick Hornbeck, a theology professor at Jesuit-run Fordham University in New York, said Jesuits are accustomed to the tensions. “Jesuits are on the frontiers and in the heart of the Catholic church,” he said. “And when you’re doing work on the margins, there’s going to be some natural friction with what’s happening in the center.”

Normally, if a Jesuit is appointed a bishop, he must first seek permission from his Jesuit superiors before he can accept the job. So what happens when a Jesuit is tapped to be pope?  “Most people think when the College of Cardinals comes and asks you to take on a job, that’s the voice of God telling you this is your new mission in life,” Reese said. “It’s pretty hard to say no to that.”

Collins said he hopes that new pope will bring some of his Jesuit training and tradition to bear during his papacy. “Jesuits work hard to cultivate spiritual depth, and pragmatism. We get a glimpse of a little bit of that in (Bergoglio’s) time as bishop. He has a vision of simplicity and connection with the poor and marginalized,” Collins said. “I hope another part of what shapes his papacy is that pragmatic, let’s-get-it-done attitude.”

(Alessandro Speciale contributed to this report from Vatican City)

Copyright: Religion News Service LLC., posted in washingtonpost.com

They Shot Cyprus for a Handful of EURO’s

The decision on Cyprus violates a serious foundation: The depositors of the banks are not shareholders. It’s like asking a consumer of electrical power to become the new investor to a collapse of the electricity company. The stupidity of people who have in their hands the fate of Europe is such that you have to say goodbye to the idea of ​​a European Union.

Such is the joke that Americans play on Europe that it should be enough to convince Mme. Merkel that perhaps the time has come to deal with home economics instead, taking with her also Mr. Schäuble. The Americans said that the surest way to protect the American depositor money is to keep them in U.S. banks. If one wants to study suicidal syndrome phenomenon, European leaders are the best example.

The most miserable thing in this whole story is that this is supposedly a mistake. This is wrong, this decision is not a mistake. It is a decision aimed to convince depositors of Southern European countries to transfer their deposits in supposedly safest destinations! Let’s have Mme. Merkel tell us how many times the German banks have played their deposits at derivatives. Maybe then everyone revise their view about what is safe and what is not.

Archbishop Chrysostomos said that once Cyprus reached a point that it could leave the eurozone, it should do so. Archbishop says two truths! The first is that Cyprus should leave the EU when it can. If Europe of its peoples behave in such a way for a handful of euros, what could you expect for the island into a harder time. The second truth is that Cyprus cannot leave EU now! The bankruptcy will have a greater impact than those of the haircut.

Greece is in a more difficult position than Cyprus. Cyprus has other structures, other size and other features. We should first of all solve many of our issues, begin to produce and then to consider carefully what is the interest of the country. And in the Greek case applies the same as for Cyprus: The bankruptcy is the worst solution.

Greece and Cyprus will sooner or later find their way as long as they do not repeat mistakes of the past and take advantage of the “gift of hydrocarbons.” Our friends, the Germans, however, should in future have a ready answer to the question “why others turn their backs on us.” Certainly no one requirests the Germans to pay the tragic mistakes of Greeks and Cypriots. Irrespectively if the taxpayers of Europe have hitherto sometimes financed the development of Germany. Probably, however, there will be NO OTHER TIME. At least not from southern Europe.

this is a translation of an article By Thanasis Mavridis, Capital.gr

A GREEK OIL BARON WANTS TO BLOW ME UP IN MY SLEEP

by Elektra Kotsoni

Athens and the smog (Photo by Yannis Larios).

Christmas in Greece this year was pretty much just like any other Christmas: people met up with family and friends, exchanged presents (on a budget), got too drunk too quick and ate food offered to them in quantities largely unaffected by the crisis. The major difference was that everyone did all those things wrapped up in their coats, scarves, gloves and everything else people wear when they need to keep their extremities warm, because no one could afford to heat their house.

Petrol prices have reached new highs and, for whatever reason, most Greek households run on petrol (I guess nobody offered us a gas pipe from Russia, or something), so the city ended up covered in a cloud of smog spewed out from thousands of fireplaces and stoves. Everyone talked about how bad smog is for the environment and my mum kept apologising to anyone who came round about how cold our house was, but no one was talking about why we didn’t have any heating in the first place.

Until last week, when Unfollow magazine published an extensive report on the smuggling of shipping oil. A day after the magazine went to print, Lefteris Charalampopoulos – the guy who wrote the article – received a phone call from someone claiming to be oil magnate (and alleged oil smuggler) Dimitris Melissanidis, who threatened to kill him. I spoke to Unfollow’s editor-in-chief, Augustine Zenakos, who witnessed the conversation.


Dimitris Melissanidis.

VICE: Hi Augustine. Could you first give me a synopsis of Lefteris’s article?
Augostine Zenakos: Since petrol prices in the country skyrocketed, the government have been talking about fighting oil smuggling, but it only seems to do so by persecuting small business owners – like people who run gas stations – for minor crimes. However, there’s this whole other side to oil smuggling that involves shipping oil, which is what our story deals with. Shipping companies don’t have to pay import tax for the petrol they use, which is coloured so you can identify it. The oil is then decolourised and channeled back into the market. Our article shows that two massive Greek oil companies are accused by Customs Authorities to have engaged in this practice.

That’s not good news. How did you go about proving that?
We published two reports by the 7th Piraeus Customs Authority showing how these two companies, ELPE (Hellenic Petroleum) and Aegean Oil, have been unable to explain the large quantities of oil missing from their cargo – quantities amounting to millions of  litres in both cases. The Aegean Oil case has actually been taken to court, but the trial has been delayed four times because the public prosecutors never bother to show up. One of the prosecuted is Iakovos Melissandis, who’s on the board of Aegean Oil, but our research shows that the guy running the company is actually his brother, Dimitris.

Yeah. I hear this guy is on the verge of a major deal, too.
Yes. Another thing the article stresses is that Dimitris Melissanidis is poised to buy the soon to be privatised OPAP – the state company that holds a monopoly on gambling. So, the main curiosity is the silence of the media in cases like that. They might spend hours arguing over some gas station owner, but when it comes to a company as big as Aegean oil – a company that supplies the American navy – you don’t hear a thing.

And it was Dimitris who supposedly threatened your colleague?
Yeah. A day after the magazine went to print, we got a phone call asking for Lefteris Charalampopoulos – the writer – and the caller identified himself as  Dimitris Melissanidis and threatened him. First with legal action, then going on to threaten his life and his family. He said, “I could have you killed without warning you. But I’m a man and I’m gonna have you blown up in your sleep. I’ll have you killed, your wife, your children, everything you’ve got.” The call lasted 20 minutes, half of which was spent threatening our reporter.


The cover of the latest issue of Unfollow magazine.

Do you think it was actually Dimitris calling?
Well, we have caller ID, so, after a quick Google search, we could see that the number they were calling from belongs to Aegean Oil. The rest of the information is in the hands of our lawyers and we’re prepared to act in any way they advice us.

Is there any reason for you to believe it wasn’t Dimitris Melissanidis?
I’d rather not comment on that because of the legal dimension of the case. What I need to say, however, is that Mr Melissanidis’ lawyer is a guy called Failos Kranidiotis, who not only happens to be an advisor to the prime minister, Antonis Samaras, but is also the creative mind behind a myriad of far-right, xenophobic articles. Mr Kranidiotis sent us a letter the other day stating his client denies he ever made that call. We published the letter on our site and said we expect to see Mr Kranidiotis taking action to find out who forged his client’s identity if what he’s saying is the truth.

How have the authorities reacted so far?
The police haven’t done anything. Parties of the opposition, the press association and the guild of journalists have made announcements condemning the actions, but not the state. We haven’t filed our report yet, but the police should still have acted on its own accord. The authorities in Greece aren’t exactly famous for their reflexes in matters like this, though.

What do you expect to happen?
Look, we are journalists. All we care about is for all sides of a story to be visible. It’s a fact that, in Greece, everything in the media works according to who it’s about. We’re against that. We want to know what’s really going on and for the media to remain untouched by government propaganda.

Check out Unfollow magazine here.

Follow Elektra on Twitter @elektrakotsoni

Source: vice.com

The big pay-off of Greece’s central banker

(Reuters) – The governor of the Bank of Greece was given a severance payment of 3.4 million euros when he left his former employer, a major bank that he now regulates, documents seen by Reuters show.

provopoulos

George Provopoulos was awarded the sum when he stepped down as vice-chairman of Piraeus Bank to become governor of Greece’s central bank and a member of the board of the European Central Bank in 2008. The scale of the pay-off, previously unknown to most Greeks, is likely to prove controversial, amounting to nearly 2.8 million euros ($3.6 million) after tax.

As governor of the central bank, Provopoulos, now 62, has played a key role in propping up Greece’s banking system, which has received billions of euros in liquidity from the ECB and is in line for up to 50 billion euros of new capital from the bailout provided by euro zone countries and the International Monetary Fund.

The Greek central bank has also faced criticism over the recent rescue of the country’s troubled state-run Agricultural Bank (ATE), which left-wing Greek MPs described as the “robbery of the century.” In that deal the authorities decided to place ATE’s non-performing loans into a ‘bad bank’ and hand the rest of ATE to Piraeus.

The Bank of Greece said Provopoulos faced no conflict of interest from his severance deal and had fully informed the authorities of the payment. When Reuters sent questions to Provopoulos, the Bank of Greece legal department responded: “In compliance with the applicable Greek law, Governor Provopoulos declared the severance payment to all pertinent tax and judicial authorities.”

In a letter to Reuters, Dr Vassilios Kotsovilis, the bank’s legal director, added: “The severance payment, having been agreed upon at an earlier time and under very different (pre-crisis) circumstances, was neither of an arbitrary nature nor of an extra-ordinary nature.”

Kotsovilis said details of the payment were reported in “the press and blogs of the period.” However, Reuters was unable to find mention of the payment despite extensive searches in both Greek and English.

Piraeus, which is suing Reuters over a previous report about the bank, said in a statement: “In view of legal proceedings… we consider it inappropriate to comment in any detail.”

It added: “It goes without saying that Piraeus Bank has always fully complied with the rules and regulations governing the Greek banking sector.”

BOARD APPROVAL

Provopoulos, a former chief executive at Emporiki Bank, Greece’s fifth largest bank, joined Piraeus, the fourth largest, on October 18, 2006. As a vice-chairman and managing director, he was entitled to a net salary of 580,000 euros, plus expenses and a bonus.

On May 22, 2008 he resigned from Piraeus after 19 months service. Documents seen by Reuters indicate that, on the day before he left the bank, its directors approved a severance payment of 2,775,000 euros, in addition to his pay of 325,704 euros for five months work that year.

The Bank of Greece confirmed the severance payment was 3.46 million euros before tax and was paid to Provopoulos that month. It amounted to more than two million euros per year of service.

Almost a year later the deal appeared in minutes of a Piraeus shareholder meeting held on April 30, 2009, which sought retrospective approval for the payment. Though such shareholder meetings are open to the press, the payment appears to have passed unnoticed.

Louka Katseli, a former Greek Economy Minister and now professor of Economics at the University of Athens, was one of those unaware of the payment, despite being a prominent opposition politician at the time. When told of the payment this week, she said: “I had no prior knowledge of Mr. Provopoulos’s severance.”

George Gougoulis, the president of ESETP, a staff union within Piraeus Bank, was also unaware of the pay-off to Provopoulos. “We have repeatedly asked the Bank to disclose to us information about the way top executives and members of the Board are remunerated, for instance by stock options, and they have always refused that,” he said.

The scale of Provopoulos’ payment is notable when set against what minutes of shareholder meetings record for payments to other directors who have departed Piraeus. Another vice-chairman, Theodoros Pantalakis, was on a similar level of remuneration at Piraeus to Provopoulos and left in December 2009 after working for the bank since 2004. He was given a pay-off of 470,000 euros, according to shareholder minutes, amounting to less than 100,000 euros per year of service.

By comparison, Provopoulos’ pay-off was three times his after-tax annual compensation, according to the Bank of Greece.

Pantalakis told Reuters that any payments to him were “as recorded in minutes of shareholder meetings.” His severance payment may have been lower because of the worsening credit crunch at the time of his departure. He said of the payment to Provopoulos: “I don’t find it peculiar, I don’t have any recollection that something was out of line.”

Michalis Colakides, another former vice chairman and deputy chief executive of Piraeus, left the bank in 2007 after seven years of service. Piraeus accounts record no severance pay for Colakides that year, though Colakides told Reuters that he received a payment equal to two years salary. He declined to comment further.

A spokesman for Piraeus said: “The remuneration of Piraeus Bank’s senior management has been established and duly approved by all the relevant corporate committees and bodies, in full compliance with all applicable internal and external regulations and duly recorded as such in the Bank’s financial statement.”

In response to Reuters inquiries about Provopoulos’ financial arrangements with Piraeus, the Bank of Greece said that “detailed answers have been given to the Greek parliament”, and other relevant authorities.

The issue arose in parliament in 2009 because rumors had been circulating in banking and political circles about a large investment loss suffered by Provopoulos a few months after he left Piraeus.

In September 2007 he and other senior executives of Piraeus had taken out loans from the bank to buy shares in a rights issue it was staging. According to one former Piraeus manager, all senior figures at the bank were asked to take part when the bank’s then executive chairman, Michael Sallas, announced he would raise 1.35 billion euros by issuing approximately 67m new shares.

“Everyone got a letter that said something like: ‘Here is your allocation of shares. Your loan is pre-approved. Sign here!'” said the former manager.

Bank of Greece rules allow banks to finance the participation of employees in rights issues. Piraeus declined to comment on the rights issue and the loans because of legal proceedings against Reuters.

In May, Piraeus announced it was suing Reuters over an earlier report about the bank renting properties owned by companies run by Sallas and his family. The bank is claiming 50 million euros in damages. Reuters stands by the accuracy of its report.

“AN IMPORTANT LOSS”

According to stock exchange records, on September 17, 2007 Provopoulos bought 212,911 shares in Piraeus, having purchased the rights to participate in the offer a week earlier. To cover the cost Provopoulos took a loan from Piraeus for 5,024,812 euros, according to his own later declarations.

He bought another 23,250 shares on December 28, 2007, under a share option scheme.

After leaving Piraeus, Provopoulos held onto his shares for three months while he was governor of the central bank overseeing the banking system. He had informed legal advisers and been told that “the ownership of the portfolio did not…influence in any way the legality of his duties”, his office later told parliament.

Provopoulos sold the shares in October 2008 after the collapse of Lehmann Brothers sent bank shares plunging. He realized 2,449,256 euros – far less than his outstanding loan to Piraeus.

Speculation about Provopoulos’ debt to his former employer prompted Michael Karhimakis, then a Pasok MP, to ask questions in the Greek parliament. Provopoulos responded with a formal statement from the director of his office.

It said he had suffered an “important loss” on his Piraeus shares and repaid his loan to the bank with the proceeds of the share sale plus a personal cheque for 2.1 million euros. The statement to parliament made no reference to the fact that Provopoulos had been granted a severance payment of 3.4 million euros by Piraeus.

There was no legal obligation for Provopoulos to declare his severance payment in parliament and the Bank of Greece said it was not mentioned “due to the fact that the then-asking MP confined his questions to the sale of the shares of Piraeus.”

But Karhimakis, the former Pasok MP, told Reuters that, in his opinion, Provopoulos had a moral duty to disclose the payment and make clear his assets and their source. “This is a period when transparency for public figures is needed more than ever,” he said.

Provopoulos’ salary as governor of the central bank is not published. But the Bank of Greece told Reuters his salary is 50 per cent lower than it was when he took office, after he had accepted two pay cuts during the country’s austerity drive. Provopoulos now receives an after-tax ‘monthly’ salary of 7,615 euros paid, as for many Greek public officials, 14 times a year, said the central bank.

In August, Provopoulos defended Piraeus’s takeover of ATE in the Greek parliament. When lawmakers questioned him about Reuters reports involving Sallas, Provopoulos was dismissive. He said the reports referred “to isolated incidents, implications that are presented as facts and selected parts of statements by experts and non-experts to arrive at an arbitrary conclusion in my opinion – that the Greek banking system is suffering from bad corporate governance and inadequate regulation.”

If this were true, Provopoulos said, “then today there would no banks left standing.”

(This story removes euro sign in third paragraph from bottom)

(Reporting By Stephen Grey and Nikolas Leontopoulos; Editing by Richard Woods and Simon Robinson)

Source: reuters.com

Clandestine loans were used to fortify Greek bank

(Reuters) – The chairman of one of Greece’s largestbanks and his family took out loans totaling more than 100 million euros to finance an undisclosed stake in the bank, according to audit documents seen by Reuters.

A woman walks out of a Piraeus bank branch in central Athens in this May 30, 2012 file photo. REUTERS-John Kolesidis-Files

By Stephen Grey and Nikolas Leontopoulos

Offshore companies owned by Michael Sallas and his two children paid for shares in the Piraeus Bank, the country’s fourth-biggest, by borrowing money from a rival bank.

Together the shares make the Sallas family the largest shareholder in Piraeus, with a combined stake of over 6 percent. The purchase of these shares has not been declared to the Athens stock exchange by Piraeus.

The loans to Sallas, who was executive chairman of Piraeus Bank until last month and remains its non-executive chairman, raise new questions about the stability and supervision of the Greek financial system at a time when European taxpayers and the International Monetary Fund are bailing out its banks with more than 30 billion euros.

The IMF had no comment on the issue, and a spokesman for the Bank of Greece declined to comment on Sallas’s holdings in Piraeus, citing banking confidentiality guidelines. “Our supervision department cannot comment on specific prudential data available or actions taken with regard to any specific bank as such information is confidential,” he said.

According to audit reports seen by Reuters, most of the money borrowed by companies linked to Sallas was used to buy shares in a Piraeus Bank rights issue in January 2011. The issue was designed to strengthen Piraeus’s capital base.

The disclosure highlights concerns that Greek banks have been borrowing money from each other and using it to meet recapitalization requirements, but not making that clear.

“This (the Greek financial system) is a closed circuit, operating as a system of power with no transparency and effective supervision,” said Louka Katseli, professor of economics at the University of Athens and former Greek minister of economy. “Through triangle deals between banks, businessmen and other banks, capitalization requirements were fulfilled without new money injected.”

Piraeus Bank and Sallas declined to answer specific questions for this story, but offered an interview later this month. On Sunday Sallas issued a statement to the Greek media attacking Reuters and accusing the news agency of “slandering” and “undermining” the bank.

“It is not the first time that I or Piraeus Bank have been the target of attacks,” the statement said. “What should be of concern to all of us in the present situation is the safety and the further strengthening of our banking system.”

Reuters Global Editor for Ethics and Standards Alix M. Freedman said: “Our coverage of Piraeus and of the Greek banking system has been accurate and fair to every person and institution involved.”

In April, a Reuters investigation found that Piraeus had failed to tell shareholders it had rented expensive properties from a network of private companies run by the Sallas family. The bank has sued Reuters for defamation over the story, claiming 50 million euros in damages.

Reuters has also reported allegations of mismanagement at the Proton Bank and at a Cyprus-based bank formerly known as the Marfin Popular Bank that operates in Greece. Proton’s former president and major shareholder, Lavrentis Lavrentiadis, has vigorously denied allegations that he used the bank to loan himself and associates hundreds of millions of euros.

Andreas Vgenopoulos, former chairman of Marfin Popular Bank, now renamed Cyprus Popular Bank, has denied conflicts of interest alleged by a Greek parliamentary inquiry and Cypriot lawmakers.

It was Marfin’s largest then Greek subsidiary, the Marfin-Egnatia Bank (MEB), that issued the loans to the Sallas family. According to two audit reports on Marfin, the loans were ranked among its riskiest exposures, judged both by their shortfall in collateral, which is mainly Piraeus shares, and risk of future losses to the bank.

The two audit reports, from January and May this year, were shown to Reuters by separate and unconnected sources. They were authenticated in interviews with banking sources and officials in Greece and Cyprus.

Internal Marfin auditors said executives at MEB had “failed to act in the best interests of the bank” by granting successive loans to Sallas to buy his own bank shares. By 2011 his investment in those shares, the auditors found, had “dire prospects” and had been made through special purpose vehicles and with no personal guarantees.

The auditors wrote: “Worth noting is that loan approval took place at a time when it was all but clear that the outlook for the Greek banking sector and by extension for Piraeus stock was deeply negative.” The loans were issued “when our Bank was already in a precarious liquidity situation”.

SHARE PURCHASES

According to the records, Sallas first obtained a loan agreement from MEB in May 2009. A facility for up to 150 million euros was signed off by the Marfin group’s Vgenopoulos, then executive vice-chairman. A spokesman for Vgenopoulos and Efthymios Bouloutas, the bank’s chief executive at the time, declined to comment on the loans due to “banking secrecy legal obligations.”

By January last year, according to the first audit report, MEB loans to Sallas companies amounted to 48 million euros. But that month, “another 65 million was used” to purchase shares in Piraeus’s 800-million-euro rights issue.

The Sallas family bought their shares via three separate Cyprus-based companies, according to both audit reports. The purchase brought the family’s total loans to 113 million euros, secured on collateral estimated to be worth less than 30 million euros, based on Piraeus’s recent share price.

The three Cyprus-based companies are Shent Enterprises, which is owned by Sallas and which has 45 million euros in outstanding loans to MEB; Benidver Enterprises, which has 22 million in loans; and KAEO Enterprises, which has 46 million in loans.

Records at Cyprus’ corporate registry show that both Benidver and KAEO were owned by Michael Sallas personally until a month before Piraeus’s rights issue.

Ownership was switched to two Greek companies linked to the family and in turn owned by a single Cyprus company called Avecmac, whose shareholders are anonymous. But MEB audit documents from 2012 seen by Reuters record Benidver as owned by Sallas’ daughter Myrto and KAEO as owned by Sallas’ son George.

Avecmac, contacted through its representative in Cyprus, did not respond to requests for comment. Myrto Sallas declined to comment; George Sallas could not be reached.

FAMILY HOLDINGS

Exactly how many shares Sallas and his family bought in Piraeus last January, and in whose name they were registered, is not clear.

Some indication comes from the number of Piraeus shares pledged by the Sallas companies as collateral for the loans. Those rose by 62 million after the rights issue, bringing the total number of Piraeus shares pledged as collateral to more than 66 million, or around 6 percent of ordinary stock in the bank.

In filings to the stock exchange and in other declarations, Sallas has said he owns around 16 million shares in his name, as well as a total of around 16 million purchased through Shent Enterprises. He has declared no share purchases by his children.

Under Greek and European law, any holding in a public company of more than 5 per cent should be announced publicly. Greek law also requires all company executives “and persons closely associated with them” to make all share transactions public.

Marfin’s auditors, according to their report, regard loans to Sallas and his family as “connected.”

But Kostas Botopoulos, chairman of Greece’s Capital Market Commission, which regulates the country’s public companies, said the decision of who to define as a “person closely associated” was “considered on an ad hoc basis.” There is no specific ruling on whether a spouse or children would fall in that category, he said.

Piraeus Bank released a statement saying the bank would not answer the detailed questions sent to Sallas and the bank due to “civil and criminal cases” between Piraeus and Reuters, and between the bank and a former Piraeus employee “charged with serious crimes.” Piraeus has previously said the former employee had defamed the bank.

“The Bank will refute the allegations in court,” the statement said. “To do otherwise would clearly be in contempt of the proceedings. In the interest of transparency, to defend its reputation and reassure its shareholders, the Bank has provided the Bank of Greece with all the relevant information.”

CAPITAL BASE

The loans to investors in the Piraeus rights issue highlight a bigger concern in the Greek banking sector. Piraeus issued more shares last year to strengthen its capital base, enabling it to score higher in European bank stress tests.

The successful issue, Sallas said at the time, showed “a sign of confidence in Piraeus Bank, the Greek banking system and of course the prospects of the Greek economy.”

But Sallas did not make public the loans he and other shareholders had taken out to help make the rights issue a success.

In all, according to loans disclosed so far, nearly one-fifth of the new capital in Piraeus was raised with financing from other Greek banks – including another 20 million euros or so loaned by MEB to investors, and 70 million euros loaned by the Proton Bank. The Proton loans went through offshore companies in tax havens such as the Cayman Islands.

Proton has since been nationalized after Greece’s money-laundering authority alleged fraud and embezzlement in cases unrelated to Piraeus or MEB.

According to several European banking and accounting experts, if banks loan money to finance major stakes in other banks, then the industry’s regulator, in this case the Bank of Greece, should deduct the same amount from the capital the lending bank claims to hold.

Dr Peter Hahn, a fellow at London’s Cass Business School and an adviser to the UK Financial Services Authority, said that a loan scheme whose only means of repayment was shares in another bank should, under international rules, be treated as if the lending bank was directly purchasing shares in the other bank. “The equity in the lending bank would otherwise be supporting risk of loss in both banks,” he said.

Hans-Peter Burghof, a professor of banking and finance at the University of Hohenheim, Germany, said that billions of euros had been given to the Greek banking system without adequate supervision of the sector. “It’s our money and it has been given without controls. It’s a disaster,” he said.

If banks lent to finance each other’s shares, he said, then “this way you can produce as much equity as you like and make banks as big as you like. It is not real equity.” He likened it to “a kind of Ponzi scheme.”

Burghof said that, whether deemed to be covered by regulations or not, if bank equity was raised in this way, the banks and companies involved should be treated as a consolidated whole. “If the regulator finds out (about loans from one bank to finance share purchases in another), he should discount this equity,” he said.

The European Banking Authority, which is meant to safeguard the stability of the financial system and transparency of markets, generally agreed with that analysis, though a spokeswoman said there may be exceptions in the case, say, of a “financial assistance operation”.

There is no indication in their financial statements that either Proton or Marfin made deductions in their capital levels after their loans for Piraeus shares.

In a statement the Bank of Greece said it does not ordinarily require capital deductions from banks that lend money for the purchase of shares in other unconnected banks.

“European Union law does not prohibit granting loans to an entity (person or organization) in order to participate in a share capital increase of another credit institution,” the bank said. Such a deduction from regulatory capital would only take place if a bank granted loans to buy its own shares, it said.

It added that the disclosure of major stakes (over 5%) in a public company was “indeed a requirement on the stakeholder”. But this was policed by the Capital Market Commission, not the Bank of Greece.

The CMC said that shareholders, in calculating whether they hold 5% or more, should aggregate holdings if they have an agreement to act together.

Source: reuters.com

Special report: A Greek banker’s secret property deals

(Reuters) – He is the former economics professor behind an upstart bank that rode the Greek boom to become a publicly listed heavyweight with a loan book of over 35 billion euros. She is his devoted wife, who oversees the bank’s sponsorship of museums and the arts, and advised it on corporate social responsibility.

Chairman and chief executive officer of the Piraeus Bank, Michalis Sallas (L), escorts his wife Sophia Staikou during the first day of the American-Hellenic Chamber of Commerce conference in Athens, December 1, 2009. REUTERS-Icon-Elias Anagnostopoulos-Files

Michalis Sallas, executive chairman of Piraeus Bank, Greece‘s fourth largest, and Sophia Staikou are a Greek power couple, symbols of the fast-growth years after the country joined the euro in 2001.

But an investigation of public documents, including financial statements and property records, shows the couple may also be emblematic of the lack of transparency and weak corporate governance that have fueled Greece’s financial problems.

Greek banks will soon be recapitalized with an estimated 30 billion to 50 billion euros, part of the country’s second bailout, backed by the International Monetary Fund and European taxpayers. Analysts estimate Piraeus will take about 3 billion to 3.5 billion euros.

Sallas was put in charge of Piraeus by the government 21 years ago, before the bank was privatized. He owns about 1.5 percent of the bank, whose stock price has plunged 97 percent since its peak in 2007.

But Sallas and his wife and his two children have also run a series of private investment companies that public records show have sealed millions of euros in real estate business with Piraeus, deals that were not disclosed to shareholders.

In wealthy locations in Athens and its suburbs and on at least one Greek island, these companies bought properties with loans from Piraeus and then rented at least seven of the buildings back to the bank, which used them as branches. Piraeus also bought properties from the companies and financed other buyers to buy properties from them.

Among the most unusual deals were transactions involving companies linked to Staikou, Sallas’ children Giorgos and Myrto, as well as key former Piraeus executives. These centered on the sale to Piraeus in April 2006 of three different properties, via three different private businessmen. According to property records, each of the businessmen bought a property for a knock-down price from the family companies and then sold them on to Piraeus for more than double that price. On paper, they generated a 160 percent total cash profit for the men, nearly 6 million euros, within the space of three weeks.

According to real estate and legal experts in Athens, a pattern of quick sales is often used in complex tax avoidance schemes. Such deals are legal if all taxes were paid. But one businessman named in the sales documents told Reuters his name had been used without his knowledge. He had “never owned property in Athens in my life,” he said.

Neither Piraeus nor Sallas would answer questions about the property deals, saying they were unable to do so because of an ongoing legal case against an ex-Piraeus employee. Matthew Saltmarsh, a UK-based spokesman for the bank, told Reuters that Greek banks had become “the most thoroughly audited financial institutions in the world,” and there was no reason to question Piraeus’ governance.

But property records show the deals linked to Sallas were opaque and raise questions about how cleanly the lines between his family and Piraeus Bank were drawn. They also provide a window into some of the often byzantine money-making schemes that characterized what one Athens real-estate agent calls the “crazy times” – the years between the stock market boom in 1999 and the crash in 2009, a span that included Greece’s entry into the Euro and its hosting of the 2004Olympics.

“It’s nothing compared to what was happening back then,” a businessman who helped run one of the Sallas’ family companies said of the property deals. “It would be unfair to limit your research to Sallas and Piraeus. Everybody in the business knows that there are other banks that used similar tricks to do much worse things than buying and selling a bank branch.”

“This period of time was a crazy party for some.”

SUNK BY THE COUNTRY

Greek banks have long had a reputation for being conservative. In the past decade they mostly avoided the excesses – investment in sub-prime debt and complex derivatives – of U.S. and other Western banks.

In “Boomerang,” his 2011 book on the European debt crisis, former Wall Street trader Michael Lewis argues that Greece’s banks were laid low not by their own misbehavior but by the collapse in value of the sovereign debt they had been pushed by their government to purchase.

“In Greece the banks didn’t sink the country. The country sank the banks,” writes Lewis.

Still, the banks in Greece played a key part in creating the bubble that helped Athens convince the world it could afford its ever-growing pile of debt.

Piraeus was among the fastest growing of those banks. Privatized in 1991, it expanded its total assets, including loans, from less than the equivalent of 4 billion euros in 1998 to 57 billion euros in 2010. Aggressive and willing to innovate, Piraeus swallowed several smaller lenders as well as branches of foreign banks in Greece. It expanded into the Balkans and bought the Marathon National Bank of New York.

Like other Greek banks, Piraeus is now struggling to deal with a massive funding gap, the result of lost access to interbank borrowing and falling deposits as many Greeks citizens withdraw their savings.

Saltmarsh, the bank’s spokesman, said the loan book of all the banks had been examined in the last few months in an independent audit commissioned by the Bank of Greece and carried out by Blackrock, a U.S.-based asset management firm. The size of the banks’ bad loans and the amount of new capital they required, he said, would be “resolved in the most public of ways” when the Bank of Greece publishes capital-raising requirements across the sector sometime in the coming weeks.

A spokesman for Blackrock said they had examined all “Greek domestic debt assets held onshore or in foreign branches”, but they declined to discuss their conclusions. The Bank of Greece, which regulates the country’s banking system, said Blackrock’s terms of reference were confidential. The Bank failed to respond to repeated separate requests to identify what rules of disclosure and conflicts of interest applied to Greek banks, or to questions about the Piraeus property deals.

Last year, with attention focused on Greek banks and their role in the country’s crisis, several Greek newspapers and blogs reported on the existence of a series of private companies, some offshore, that were allegedly loaned up to 250 million euros by Piraeus and whose debts appeared to have been written off. The reports included articles in a widely-read anonymous blog called WikiGreeks.org and Kathimerini, a newspaper.

The origin of the reports appears to be a vague one-page document, of unproven provenance, listing 21 companies. This is now at the centre of a criminal complaint filed in the Greek courts by Piraeus against a former employee, Angeliki Agoulou, a one-time branch official. The bank accuses her of embezzling money from savings accounts and spreading false information.

“Piraeus believes this to be a falsified document distributed to entities including WikiGreeks by a disgruntled ex-employee as part of that employee’s continuing attempt to intimidate Piraeus Bank into dropping legal action against that ex-employee related to an alleged serious fraud perpetrated against Piraeus Bank,” the bank said, referring to Agoulou’s case.

Agoulou denies any wrongdoing and insists the document is genuine.

Agoulou and the contents of the document are now under official investigation by both Greece’s financial police and national anti-money laundering department, the Financial Intelligence Unit, according to one senior Greek official.

BOARD MEMBERS

Reuters examined publicly available data to try to establish independently if the companies linked to Piraeus existed and, if they did, what business they were in.

Greek companies, whether public or private, are not required to publicly register all their shareholders and there is no public register of directorships. But an inspection of the Greek government’s official gazette, where company announcements and financial results are published, showed an extensive network of private interests connected both to Sallas and his family, and to several former senior executives at Piraeus.

In all, Reuters identified 11 companies in which members of the Sallas family have served on the board of directors, including four mentioned on the disputed document allegedly leaked by Agoulou. Sallas’ wife Staikou served as a director on nine of them, including at least six as chairman, while Sallas’ children Giorgos and Myrto each served on four. Sallas himself was not a director of any of them.

As well as the family, Konstantinos Liapis was just one of many former Piraeus executives who served on the companies’ boards. Liapis, who was financial director of the bank from 2004 until 2006 before becoming vice-general manager until 2009, served on the boards of eight of the companies in all. Stylianos Niotis, a manager of the shipping department until 2009, served on four.

An examination of Piraeus’ public declarations since 1999 appears to acknowledge only two of the companies, both property management firms: Erechtheas Investment and Holdings SA, which was bought by the bank at the end of 2009 and listed as a new subsidiary; and a 2004 mention of MGS (which happen to be Sallas’ initials), in which Sallas held 73.76 percent of shares.

Reuters was unable to locate any disclosures by the bank of any property purchases, rents or sales involving the private companies, despite the apparent links with the chairman and despite public documents showing the companies regularly did business with Piraeus.

Several accounting experts said deals such as rental agreements or the sale of real estate between the companies and the bank should have been defined as “related party transactions.” Under the International Financial Reporting Standards (IFRS), adopted by Piraeus in 2005, such transactions should have been disclosed publicly in the bank’s financial statements so as to highlight any potential conflicts of interest.

The accounts do show, as required by the IFRS, a global declaration of loans to directors and executives and their families, peaking at 244 million euros in 2008, 0.64 percent of the bank’s then total loans and advances to customers. Several Greek banks show high levels of such loans to executives.

But outside the global declaration of loans, Piraeus accounts do not mention any property transactions between the bank and any companies related to its directors, including MGS.

Brian Creighton, a UK-based director at BDO, a leading accounting firm, declined to comment on any specific case. But under the version of the IFRS rules that applied until last year, he said, loans or any case where a company director or close family member had a “significant influence” over another entity should have been disclosed. “Property sales, leases, loans and rent are among transactions that should be disclosed if they are between related parties,” he said.

In its annual accounts, Piraeus often asserted that “the terms of the Bank’s transactions with related parties are those that prevail in arm’s length transactions and according to the financial procedures and policies of the Bank.”

Grant Kirkpatrick, deputy head of corporate affairs at the Paris-based Organization for Economic Cooperation and Development, said that banks had a particular duty to be transparent about lending activities.

“The fact there are family members on the board of a company doing business with a bank is enough to suggest a potential conflict of interest,” he said. “The board of directors of the bank should have a very clear process to deal with such cases, and that process, and the details of any transactions, should be disclosed.”

Former Piraeus financial director Liapis said he was confident Sallas and his family had declared everything they should. “A businessman has his own private activities or assets that he has to handle,” Liapis said. “He only has to declare his so-called related interests and respect the ‘arms-length principle.’ Everything was declared in the bank’s statements. Otherwise, (do) you think that Price Waterhouse (the bank’s external auditors) would sign Piraeus Bank accounts?”

PricewaterhouseCoopers declined to comment.

Piraeus and Sallas did not respond to repeated requests to identify any public declarations about the firms linked to Sallas.

BURIED TREASURE

Property is the foundation of almost all personal wealth in Greece, a country with one of the highest rates of home ownership in Europe. Land records are officially public, but routine access is restricted to practicing lawyers. Reuters worked with an Athens-based lawyer who searched for transactions recorded by the firms linked to Sallas’ family.

Land records found by the lawyer and examined by Reuters show that six of the companies had bought at least 11 properties between 1998 and 2012 for a total of 14 million euros. Eight of the properties were subsequently sold.

The documents show that more than 28 million euros in loans, all from Piraeus, were secured on the buildings. One senior official at the Greek ministry of finance said that such a high ratio of loan to purchase price could indicate the loans were issued by Piraeus without sufficient collateral in place.

In all, seven of the 11 properties have been or are still used as Piraeus branches or offices. The rent the bank paid or pays for these properties couldn’t be determined. But deeds found in the land registries show three references to rental contracts with Piraeus, one for 24,000 euros a month, another 11,400 euros a month, and the other unspecified.

Sallas declined to comment on the rental agreements.

Myrto Sallas, who sat on the boards of four of the private companies and heads the family’s winecompany, Semeli, referred all questions to her father and said she had no knowledge of any of the property deals.

“I can’t help you with that; you can talk maybe better with my father,” she said. “All the other companies are totally different from Piraeus Bank. They have nothing to do with that.”

Giorgos Sallas could not be reached for comment.

Liapis, who now teaches at the Panteion University of Athens, said he had been a director of thousands of companies because “that’s what accountants do.”

Asked specifically about some of the companies he helped run – including Erechtheas, MS Investing, and MGS – Liapis confirmed he had been a director at each. “It is not a secret to whom they belong. You can even tell by the names sometimes.”

Asked if that meant Sallas and his family, he confirmed: “Of course. There is nothing wrong with that.”

Liapis said he had no conflict of interest since he had not worked at Piraeus between 2000 and 2004, the period in which he was a director on the boards of those companies.

When told records showed that he had remained a director of at least two family companies until at least 2006, after he returned to Piraeus, Liapis conceded that might be possible. “Yes, maybe,” he said. “But still I didn’t sign any transactions with Piraeus Bank. During my tenure as financial director, I had nothing to do with holding companies or real estate.”

Liapis described his role as an agent of Sallas. “It is very simple,” he said. In his position running Piraeus, Sallas could not be the director of another company “so he appointed me.”

Liapis said many Greeks in high-profile positions were not honest in their declarations of assets; Sallas, in contrast, had been sincere and honest.

Niotis, the former Piraeus shipping adviser, said he retired from the bank in 2009. “During my career I accepted, at times, a number of, mostly, non-executive directorships in various companies of different remit. In none of these have I had ever any beneficial shareholding.”

UNUSUAL TRANSACTIONS

Of all the transactions that involved the Sallas companies, perhaps the strangest were three prime properties in central Athens that Piraeus bought in April 2006 for a combined cost of 9.4 million euros.

One of the properties was the ground floor of an office building; the other two were townhouses. Each had belonged to one of three companies: MGS, Agallon, and Erechtheas. According to company accounts, Staikou then chaired MGS and has previously been a director of the other two.

In each case, the companies sold their properties to individuals who then sold them on within days. In all, the three Sallas family-connected companies declared a total of 4 million euros for their property sales. The new owners sold them for 2.05 million, 2.65 million and 4.7 million respectively. The buyer in each case? Piraeus Bank.

The properties were sold at what would prove to be the height of the property boom, according to Athens real estate experts, and the price paid by Piraeus was close, if not a little above, what was then the market price. “The bank would have lost money later when the price of property fell, but I am not sure it was cheated at the time,” said one experienced agent, who advises the Bank of Greece.

Real estate agents, lawyers, and officials said that the deals could have been a complex attempt to buy properties indirectly from the family-connected companies. Others suggested it was simply a legal tax dodge.

In Greece, explained one senior tax official, most property is typically sold with part of the real price left undeclared and paid in cash. “The problem is when you want to sell the property again, if you declare the real price, then you are left with a huge capital gain to declare,” he said.

One solution, he said, was to make use of an individual who, in return for a cut of profits, operated as a so-called “strawman” who could buy on the gray market, paying both the declared price and an extra portion in cash, and then selling on at the real price.

Piraeus would not comment on these three deals.

Stefanos Vasilakis, a public notary who said he helped draw up the purchase contracts for all three sales for Piraeus, said the reasons behind the complex arrangement “have to do with taxation.”

“When a company sells a property, it has to pay capital gains tax, which is the difference between the property bought and the property sold. Maybe two sales would be more profitable than one because my capital gains tax would be smaller,” he said.

Another tax official said that, under laws that applied briefly in 2006, capital gains tax for such deals was much lower, explaining the timing.

The businessmen who acted as intermediaries in two of the deals confirmed by email and phone that they took part.

The third case – the ground floor of an office block at 157 Mihalakopoulou Street in central Athens – is less straight forward.

MGS bought the property in 2003 for a declared total of 1.05 million euros. At the same time, Piraeus approved a loan to MGS of 2.4 million euros, secured on the property. MGS then got further cash from Piraeus by renting the property back as a bank branch for a monthly sum of 11,454 euros, according to later sale documents.

When it eventually sold the property in April 2006, MGS declared the sale price at 975,000 euros. According to the Athens real estate agent, this was “an extremely low price for those times. About two million euros would be a normal price.”

The buyer listed in the sale documents was a Lebanese-born businessman based in London called Philip Moufarrige. Nine days after buying the building, Moufarrige sold it to Piraeus for 2.65 million euros, according to a contract in the land registry. A lawyer involved in the case confirmed to Reuters he had represented Moufarrige in his absence.

Moufarrige, who lives in London, expressed bafflement when reached for comment. The passport and family details recorded in the sales documents were accurate, he said, but the London address the documents listed was wrong.

“I have never owned property in Athens in my life,” he said. “This was done without my knowledge.”

(Additional reporting: Nikolas Leontopoulos and Karolina Tagaris in Athens and Yeganeh Torbati in London; Editing by Simon Robinson and Sara Ledwith)

Source: http://uk.reuters.com

NSA: We are that far from a turnkey totalitarian state

The spring air in the small, sand-dusted town has a soft haze to it, and clumps of green-gray sagebrush rustle in the breeze. Bluffdale sits in a bowl-shaped valley in the shadow of Utah’s Wasatch Range to the east and the Oquirrh Mountains to the west. It’s the heart of Mormon country, where religious pioneers first arrived more than 160 years ago. They came to escape the rest of the world, to understand the mysterious words sent down from their god as revealed on buried golden plates, and to practice what has become known as “the principle,” marriage to multiple wives.

Today Bluffdale is home to one of the nation’s largest sects of polygamists, the Apostolic United Brethren, with upwards of 9,000 members. The brethren’s complex includes a chapel, a school, a sports field, and an archive. Membership has doubled since 1978—and the number of plural marriages has tripled—so the sect has recently been looking for ways to purchase more land and expand throughout the town.

But new pioneers have quietly begun moving into the area, secretive outsiders who say little and keep to themselves. Like the pious polygamists, they are focused on deciphering cryptic messages that only they have the power to understand. Just off Beef Hollow Road, less than a mile from brethren headquarters, thousands of hard-hatted construction workers in sweat-soaked T-shirts are laying the groundwork for the newcomers’ own temple and archive, a massive complex so large that it necessitated expanding the town’s boundaries. Once built, it will be more than five times the size of the US Capitol.

Rather than Bibles, prophets, and worshippers, this temple will be filled with servers, computer intelligence experts, and armed guards. And instead of listening for words flowing down from heaven, these newcomers will be secretly capturing, storing, and analyzing vast quantities of words and images hurtling through the world’s telecommunications networks. In the little town of Bluffdale, Big Love and Big Brother have become uneasy neighbors.

Under construction by contractors with top-secret clearances, the blandly named Utah Data Center is being built for the National Security Agency. A project of immense secrecy, it is the final piece in a complex puzzle assembled over the past decade. Its purpose: to intercept, decipher, analyze, and store vast swaths of the world’s communications as they zap down from satellites and zip through the underground and undersea cables of international, foreign, and domestic networks. The heavily fortified $2 billion center should be up and running in September 2013. Flowing through its servers and routers and stored in near-bottomless databases will be all forms of communication, including the complete contents of private emails, cell phone calls, and Google searches, as well as all sorts of personal data trails—parking receipts, travel itineraries, bookstore purchases, and other digital “pocket litter.” It is, in some measure, the realization of the “total information awareness” program created during the first term of the Bush administration—an effort that was killed by Congress in 2003 after it caused an outcry over its potential for invading Americans’ privacy.

But “this is more than just a data center,” says one senior intelligence official who until recently was involved with the program. The mammoth Bluffdale center will have another important and far more secret role that until now has gone unrevealed. It is also critical, he says, for breaking codes. And code-breaking is crucial, because much of the data that the center will handle—financial information, stock transactions, business deals, foreign military and diplomatic secrets, legal documents, confidential personal communications—will be heavily encrypted. According to another top official also involved with the program, the NSA made an enormous breakthrough several years ago in its ability to cryptanalyze, or break, unfathomably complex encryption systems employed by not only governments around the world but also many average computer users in the US. The upshot, according to this official: “Everybody’s a target; everybody with communication is a target.”

For the NSA, overflowing with tens of billions of dollars in post-9/11 budget awards, the cryptanalysis breakthrough came at a time of explosive growth, in size as well as in power. Established as an arm of the Department of Defense following Pearl Harbor, with the primary purpose of preventing another surprise assault, the NSA suffered a series of humiliations in the post-Cold War years. Caught offguard by an escalating series of terrorist attacks—the first World Trade Center bombing, the blowing up of US embassies in East Africa, the attack on the USS Cole in Yemen, and finally the devastation of 9/11—some began questioning the agency’s very reason for being. In response, the NSA has quietly been reborn. And while there is little indication that its actual effectiveness has improved—after all, despite numerous pieces of evidence and intelligence-gathering opportunities, it missed the near-disastrous attempted attacks by the underwear bomber on a flight to Detroit in 2009 and by the car bomber in Times Square in 2010—there is no doubt that it has transformed itself into the largest, most covert, and potentially most intrusive intelligence agency ever created.

In the process—and for the first time since Watergate and the other scandals of the Nixon administration—the NSA has turned its surveillance apparatus on the US and its citizens. It has established listening posts throughout the nation to collect and sift through billions of email messages and phone calls, whether they originate within the country or overseas. It has created a supercomputer of almost unimaginable speed to look for patterns and unscramble codes. Finally, the agency has begun building a place to store all the trillions of words and thoughts and whispers captured in its electronic net. And, of course, it’s all being done in secret. To those on the inside, the old adage that NSA stands for Never Say Anything applies more than ever.

UTAH DATA CENTER

When construction is completed in 2013, the heavily fortified $2 billion facility in Bluffdale will encompass 1 million square feet.

Utah Data Center

1 Visitor control center

A $9.7 million facility for ensuring that only cleared personnel gain access.

2 Administration

Designated space for technical support and administrative personnel.

3 Data halls

Four 25,000-square-foot facilities house rows and rows of servers.

4 Backup generators and fuel tanks

Can power the center for at least three days.

5 Water storage and pumping

Able to pump 1.7 million gallons of liquid per day.

6 Chiller plant

About 60,000 tons of cooling equipment to keep servers from overheating.

7 Power substation

An electrical substation to meet the center’s estimated 65-megawatt demand.

8 Security

Video surveillance, intrusion detection, and other protection will cost more than $10 million.

Source: U.S. Army Corps of Engineers Conceptual Site plan

A swath of freezing fog blanketed Salt Lake City on the morning of January 6, 2011, mixing with a weeklong coating of heavy gray smog. Red air alerts, warning people to stay indoors unless absolutely necessary, had become almost daily occurrences, and the temperature was in the bone-chilling twenties. “What I smell and taste is like coal smoke,” complained one local blogger that day. At the city’s international airport, many inbound flights were delayed or diverted while outbound regional jets were grounded. But among those making it through the icy mist was a figure whose gray suit and tie made him almost disappear into the background. He was tall and thin, with the physique of an aging basketball player and dark caterpillar eyebrows beneath a shock of matching hair. Accompanied by a retinue of bodyguards, the man was NSA deputy director Chris Inglis, the agency’s highest-ranking civilian and the person who ran its worldwide day-to-day operations.

A short time later, Inglis arrived in Bluffdale at the site of the future data center, a flat, unpaved runway on a little-used part of Camp Williams, a National Guard training site. There, in a white tent set up for the occasion, Inglis joined Harvey Davis, the agency’s associate director for installations and logistics, and Utah senator Orrin Hatch, along with a few generals and politicians in a surreal ceremony. Standing in an odd wooden sandbox and holding gold-painted shovels, they made awkward jabs at the sand and thus officially broke ground on what the local media had simply dubbed “the spy center.” Hoping for some details on what was about to be built, reporters turned to one of the invited guests, Lane Beattie of the Salt Lake Chamber of Commerce. Did he have any idea of the purpose behind the new facility in his backyard? “Absolutely not,” he said with a self-conscious half laugh. “Nor do I want them spying on me.”

For his part, Inglis simply engaged in a bit of double-talk, emphasizing the least threatening aspect of the center: “It’s a state-of-the-art facility designed to support the intelligence community in its mission to, in turn, enable and protect the nation’s cybersecurity.” While cybersecurity will certainly be among the areas focused on in Bluffdale, what is collected, how it’s collected, and what is done with the material are far more important issues. Battling hackers makes for a nice cover—it’s easy to explain, and who could be against it? Then the reporters turned to Hatch, who proudly described the center as “a great tribute to Utah,” then added, “I can’t tell you a lot about what they’re going to be doing, because it’s highly classified.”

And then there was this anomaly: Although this was supposedly the official ground-breaking for the nation’s largest and most expensive cybersecurity project, no one from the Department of Homeland Security, the agency responsible for protecting civilian networks from cyberattack, spoke from the lectern. In fact, the official who’d originally introduced the data center, at a press conference in Salt Lake City in October 2009, had nothing to do with cybersecurity. It was Glenn A. Gaffney, deputy director of national intelligence for collection, a man who had spent almost his entire career at the CIA. As head of collection for the intelligence community, he managed the country’s human and electronic spies.

Within days, the tent and sandbox and gold shovels would be gone and Inglis and the generals would be replaced by some 10,000 construction workers. “We’ve been asked not to talk about the project,” Rob Moore, president of Big-D Construction, one of the three major contractors working on the project, told a local reporter. The plans for the center show an extensive security system: an elaborate $10 million antiterrorism protection program, including a fence designed to stop a 15,000-pound vehicle traveling 50 miles per hour, closed-circuit cameras, a biometric identification system, a vehicle inspection facility, and a visitor-control center.

Inside, the facility will consist of four 25,000-square-foot halls filled with servers, complete with raised floor space for cables and storage. In addition, there will be more than 900,000 square feet for technical support and administration. The entire site will be self-sustaining, with fuel tanks large enough to power the backup generators for three days in an emergency, water storage with the capability of pumping 1.7 million gallons of liquid per day, as well as a sewage system and massive air-conditioning system to keep all those servers cool. Electricity will come from the center’s own substation built by Rocky Mountain Power to satisfy the 65-megawatt power demand. Such a mammoth amount of energy comes with a mammoth price tag—about $40 million a year, according to one estimate.

Given the facility’s scale and the fact that a terabyte of data can now be stored on a flash drive the size of a man’s pinky, the potential amount of information that could be housed in Bluffdale is truly staggering. But so is the exponential growth in the amount of intelligence data being produced every day by the eavesdropping sensors of the NSA and other intelligence agencies. As a result of this “expanding array of theater airborne and other sensor networks,” as a 2007 Department of Defense report puts it, the Pentagon is attempting to expand its worldwide communications network, known as the Global Information Grid, to handle yottabytes (1024 bytes) of data. (A yottabyte is a septillion bytes—so large that no one has yet coined a term for the next higher magnitude.)

It needs that capacity because, according to a recent report by Cisco, global Internet traffic will quadruple from 2010 to 2015, reaching 966 exabytes per year. (A million exabytes equal a yottabyte.) In terms of scale, Eric Schmidt, Google’s former CEO, once estimated that the total of all human knowledge created from the dawn of man to 2003 totaled 5 exabytes. And the data flow shows no sign of slowing. In 2011 more than 2 billion of the world’s 6.9 billion people were connected to the Internet. By 2015, market research firm IDC estimates, there will be 2.7 billion users. Thus, the NSA’s need for a 1-million-square-foot data storehouse. Should the agency ever fill the Utah center with a yottabyte of information, it would be equal to about 500 quintillion (500,000,000,000,000,000,000) pages of text.

The data stored in Bluffdale will naturally go far beyond the world’s billions of public web pages. The NSA is more interested in the so-called invisible web, also known as the deep web or deepnet—data beyond the reach of the public. This includes password-protected data, US and foreign government communications, and noncommercial file-sharing between trusted peers. “The deep web contains government reports, databases, and other sources of information of high value to DOD and the intelligence community,” according to a 2010 Defense Science Board report. “Alternative tools are needed to find and index data in the deep web … Stealing the classified secrets of a potential adversary is where the [intelligence] community is most comfortable.” With its new Utah Data Center, the NSA will at last have the technical capability to store, and rummage through, all those stolen secrets. The question, of course, is how the agency defines who is, and who is not, “a potential adversary.”

The NSA’S SPY NETWORK

Once it’s operational, the Utah Data Center will become, in effect, the NSA’s cloud. The center will be fed data collected by the agency’s eavesdropping satellites, overseas listening posts, and secret monitoring rooms in telecom facilities throughout the US. All that data will then be accessible to the NSA’s code breakers, data-miners, China analysts, counterterrorism specialists, and others working at its Fort Meade headquarters and around the world. Here’s how the data center appears to fit into the NSA’s global puzzle.—J.B.

SPY NETWORK

1 Geostationary satellites

Four satellites positioned around the globe monitor frequencies carrying everything from walkie-talkies and cell phones in Libya to radar systems in North Korea. Onboard software acts as the first filter in the collection process, targeting only key regions, countries, cities, and phone numbers or email.

2 Aerospace Data Facility, Buckley Air Force Base, Colorado

Intelligence collected from the geostationary satellites, as well as signals from other spacecraft and overseas listening posts, is relayed to this facility outside Denver. About 850 NSA employees track the satellites, transmit target information, and download the intelligence haul.

3 NSA Georgia, Fort Gordon, Augusta, Georgia

Focuses on intercepts from Europe, the Middle East, and North Africa. Codenamed Sweet Tea, the facility has been massively expanded and now consists of a 604,000-square-foot operations building for up to 4,000 intercept operators, analysts, and other specialists.

4 NSA Texas, Lackland Air Force Base, San Antonio

Focuses on intercepts from Latin America and, since 9/11, the Middle East and Europe. Some 2,000 workers staff the operation. The NSA recently completed a $100 million renovation on a mega-data center here—a backup storage facility for the Utah Data Center.

5 NSA Hawaii, Oahu

Focuses on intercepts from Asia. Built to house an aircraft assembly plant during World War II, the 250,000-square-foot bunker is nicknamed the Hole. Like the other NSA operations centers, it has since been expanded: Its 2,700 employees now do their work aboveground from a new 234,000-square-foot facility.

6 Domestic listening posts

The NSA has long been free to eavesdrop on international satellite communications. But after 9/11, it installed taps in US telecom “switches,” gaining access to domestic traffic. An ex-NSA official says there are 10 to 20 such installations.

7 Overseas listening posts

According to a knowledgeable intelligence source, the NSA has installed taps on at least a dozen of the major overseas communications links, each capable of eavesdropping on information passing by at a high data rate.

8 Utah Data Center, Bluffdale, Utah

At a million square feet, this $2 billion digital storage facility outside Salt Lake City will be the centerpiece of the NSA’s cloud-based data strategy and essential in its plans for decrypting previously uncrackable documents.

9 Multiprogram Research Facility, Oak Ridge, Tennessee

Some 300 scientists and computer engineers with top security clearance toil away here, building the world’s fastest supercomputers and working on cryptanalytic applications and other secret projects.

10 NSA headquarters, Fort Meade, Maryland

Analysts here will access material stored at Bluffdale to prepare reports and recommendations that are sent to policymakers. To handle the increased data load, the NSA is also building an $896 million supercomputer center here.

Before yottabytes of data from the deep web and elsewhere can begin piling up inside the servers of the NSA’s new center, they must be collected. To better accomplish that, the agency has undergone the largest building boom in its history, including installing secret electronic monitoring rooms in major US telecom facilities. Controlled by the NSA, these highly secured spaces are where the agency taps into the US communications networks, a practice that came to light during the Bush years but was never acknowledged by the agency. The broad outlines of the so-called warrantless-wiretapping program have long been exposed—how the NSA secretly and illegally bypassed the Foreign Intelligence Surveillance Court, which was supposed to oversee and authorize highly targeted domestic eavesdropping; how the program allowed wholesale monitoring of millions of American phone calls and email. In the wake of the program’s exposure, Congress passed the FISA Amendments Act of 2008, which largely made the practices legal. Telecoms that had agreed to participate in the illegal activity were granted immunity from prosecution and lawsuits. What wasn’t revealed until now, however, was the enormity of this ongoing domestic spying program.

For the first time, a former NSA official has gone on the record to describe the program, codenamed Stellar Wind, in detail. William Binney was a senior NSA crypto-mathematician largely responsible for automating the agency’s worldwide eavesdropping network. A tall man with strands of black hair across the front of his scalp and dark, determined eyes behind thick-rimmed glasses, the 68-year-old spent nearly four decades breaking codes and finding new ways to channel billions of private phone calls and email messages from around the world into the NSA’s bulging databases. As chief and one of the two cofounders of the agency’s Signals Intelligence Automation Research Center, Binney and his team designed much of the infrastructure that’s still likely used to intercept international and foreign communications.

He explains that the agency could have installed its tapping gear at the nation’s cable landing stations—the more than two dozen sites on the periphery of the US where fiber-optic cables come ashore. If it had taken that route, the NSA would have been able to limit its eavesdropping to just international communications, which at the time was all that was allowed under US law. Instead it chose to put the wiretapping rooms at key junction points throughout the country—large, windowless buildings known as switches—thus gaining access to not just international communications but also to most of the domestic traffic flowing through the US. The network of intercept stations goes far beyond the single room in an AT&T building in San Francisco exposed by a whistle-blower in 2006. “I think there’s 10 to 20 of them,” Binney says. “That’s not just San Francisco; they have them in the middle of the country and also on the East Coast.”

The eavesdropping on Americans doesn’t stop at the telecom switches. To capture satellite communications in and out of the US, the agency also monitors AT&T’s powerful earth stations, satellite receivers in locations that include Roaring Creek and Salt Creek. Tucked away on a back road in rural Catawissa, Pennsylvania, Roaring Creek’s three 105-foot dishes handle much of the country’s communications to and from Europe and the Middle East. And on an isolated stretch of land in remote Arbuckle, California, three similar dishes at the company’s Salt Creek station service the Pacific Rim and Asia.

Binney left the NSA in late 2001, shortly after the agency launched its warrantless-wiretapping program. “They violated the Constitution setting it up,” he says bluntly. “But they didn’t care. They were going to do it anyway, and they were going to crucify anyone who stood in the way. When they started violating the Constitution, I couldn’t stay.” Binney says Stellar Wind was far larger than has been publicly disclosed and included not just eavesdropping on domestic phone calls but the inspection of domestic email. At the outset the program recorded 320 million calls a day, he says, which represented about 73 to 80 percent of the total volume of the agency’s worldwide intercepts. The haul only grew from there. According to Binney—who has maintained close contact with agency employees until a few years ago—the taps in the secret rooms dotting the country are actually powered by highly sophisticated software programs that conduct “deep packet inspection,” examining Internet traffic as it passes through the 10-gigabit-per-second cables at the speed of light.

The software, created by a company called Narus that’s now part of Boeing, is controlled remotely from NSA headquarters at Fort Meade in Maryland and searches US sources for target addresses, locations, countries, and phone numbers, as well as watch-listed names, keywords, and phrases in email. Any communication that arouses suspicion, especially those to or from the million or so people on agency watch lists, are automatically copied or recorded and then transmitted to the NSA.

The scope of surveillance expands from there, Binney says. Once a name is entered into the Narus database, all phone calls and other communications to and from that person are automatically routed to the NSA’s recorders. “Anybody you want, route to a recorder,” Binney says. “If your number’s in there? Routed and gets recorded.” He adds, “The Narus device allows you to take it all.” And when Bluffdale is completed, whatever is collected will be routed there for storage and analysis.

According to Binney, one of the deepest secrets of the Stellar Wind program—again, never confirmed until now—was that the NSA gained warrantless access to AT&T’s vast trove of domestic and international billing records, detailed information about who called whom in the US and around the world. As of 2007, AT&T had more than 2.8 trillion records housed in a database at its Florham Park, New Jersey, complex.

Verizon was also part of the program, Binney says, and that greatly expanded the volume of calls subject to the agency’s domestic eavesdropping. “That multiplies the call rate by at least a factor of five,” he says. “So you’re over a billion and a half calls a day.” (Spokespeople for Verizon and AT&T said their companies would not comment on matters of national security.)

After he left the NSA, Binney suggested a system for monitoring people’s communications according to how closely they are connected to an initial target. The further away from the target—say you’re just an acquaintance of a friend of the target—the less the surveillance. But the agency rejected the idea, and, given the massive new storage facility in Utah, Binney suspects that it now simply collects everything. “The whole idea was, how do you manage 20 terabytes of intercept a minute?” he says. “The way we proposed was to distinguish between things you want and things you don’t want.” Instead, he adds, “they’re storing everything they gather.” And the agency is gathering as much as it can.

Once the communications are intercepted and stored, the data-mining begins. “You can watch everybody all the time with data- mining,” Binney says. Everything a person does becomes charted on a graph, “financial transactions or travel or anything,” he says. Thus, as data like bookstore receipts, bank statements, and commuter toll records flow in, the NSA is able to paint a more and more detailed picture of someone’s life.

The NSA also has the ability to eavesdrop on phone calls directly and in real time. According to Adrienne J. Kinne, who worked both before and after 9/11 as a voice interceptor at the NSA facility in Georgia, in the wake of the World Trade Center attacks “basically all rules were thrown out the window, and they would use any excuse to justify a waiver to spy on Americans.” Even journalists calling home from overseas were included. “A lot of time you could tell they were calling their families,” she says, “incredibly intimate, personal conversations.” Kinne found the act of eavesdropping on innocent fellow citizens personally distressing. “It’s almost like going through and finding somebody’s diary,” she says.

But there is, of course, reason for anyone to be distressed about the practice. Once the door is open for the government to spy on US citizens, there are often great temptations to abuse that power for political purposes, as when Richard Nixon eavesdropped on his political enemies during Watergate and ordered the NSA to spy on antiwar protesters. Those and other abuses prompted Congress to enact prohibitions in the mid-1970s against domestic spying.

Before he gave up and left the NSA, Binney tried to persuade officials to create a more targeted system that could be authorized by a court. At the time, the agency had 72 hours to obtain a legal warrant, and Binney devised a method to computerize the system. “I had proposed that we automate the process of requesting a warrant and automate approval so we could manage a couple of million intercepts a day, rather than subvert the whole process.” But such a system would have required close coordination with the courts, and NSA officials weren’t interested in that, Binney says. Instead they continued to haul in data on a grand scale. Asked how many communications—”transactions,” in NSA’s lingo—the agency has intercepted since 9/11, Binney estimates the number at “between 15 and 20 trillion, the aggregate over 11 years.”

When Barack Obama took office, Binney hoped the new administration might be open to reforming the program to address his constitutional concerns. He and another former senior NSA analyst, J. Kirk Wiebe, tried to bring the idea of an automated warrant-approval system to the attention of the Department of Justice’s inspector general. They were given the brush-off. “They said, oh, OK, we can’t comment,” Binney says.

Sitting in a restaurant not far from NSA headquarters, the place where he spent nearly 40 years of his life, Binney held his thumb and forefinger close together. “We are, like, that far from a turnkey totalitarian state,” he says.

There is still one technology preventing untrammeled government access to private digital data: strong encryption. Anyone—from terrorists and weapons dealers to corporations, financial institutions, and ordinary email senders—can use it to seal their messages, plans, photos, and documents in hardened data shells. For years, one of the hardest shells has been the Advanced Encryption Standard, one of several algorithms used by much of the world to encrypt data. Available in three different strengths—128 bits, 192 bits, and 256 bits—it’s incorporated in most commercial email programs and web browsers and is considered so strong that the NSA has even approved its use for top-secret US government communications. Most experts say that a so-called brute-force computer attack on the algorithm—trying one combination after another to unlock the encryption—would likely take longer than the age of the universe. For a 128-bit cipher, the number of trial-and-error attempts would be 340 undecillion (1036).

Breaking into those complex mathematical shells like the AES is one of the key reasons for the construction going on in Bluffdale. That kind of cryptanalysis requires two major ingredients: super-fast computers to conduct brute-force attacks on encrypted messages and a massive number of those messages for the computers to analyze. The more messages from a given target, the more likely it is for the computers to detect telltale patterns, and Bluffdale will be able to hold a great many messages. “We questioned it one time,” says another source, a senior intelligence manager who was also involved with the planning. “Why were we building this NSA facility? And, boy, they rolled out all the old guys—the crypto guys.” According to the official, these experts told then-director of national intelligence Dennis Blair, “You’ve got to build this thing because we just don’t have the capability of doing the code-breaking.” It was a candid admission. In the long war between the code breakers and the code makers—the tens of thousands of cryptographers in the worldwide computer security industry—the code breakers were admitting defeat.

So the agency had one major ingredient—a massive data storage facility—under way. Meanwhile, across the country in Tennessee, the government was working in utmost secrecy on the other vital element: the most powerful computer the world has ever known.

The plan was launched in 2004 as a modern-day Manhattan Project. Dubbed the High Productivity Computing Systems program, its goal was to advance computer speed a thousandfold, creating a machine that could execute a quadrillion (1015) operations a second, known as a petaflop—the computer equivalent of breaking the land speed record. And as with the Manhattan Project, the venue chosen for the supercomputing program was the town of Oak Ridge in eastern Tennessee, a rural area where sharp ridges give way to low, scattered hills, and the southwestward-flowing Clinch River bends sharply to the southeast. About 25 miles from Knoxville, it is the “secret city” where uranium- 235 was extracted for the first atomic bomb. A sign near the exit read: what you see here, what you do here, what you hear here, when you leave here, let it stay here. Today, not far from where that sign stood, Oak Ridge is home to the Department of Energy’s Oak Ridge National Laboratory, and it’s engaged in a new secret war. But this time, instead of a bomb of almost unimaginable power, the weapon is a computer of almost unimaginable speed.

In 2004, as part of the supercomputing program, the Department of Energy established its Oak Ridge Leadership Computing Facility for multiple agencies to join forces on the project. But in reality there would be two tracks, one unclassified, in which all of the scientific work would be public, and another top-secret, in which the NSA could pursue its own computer covertly. “For our purposes, they had to create a separate facility,” says a former senior NSA computer expert who worked on the project and is still associated with the agency. (He is one of three sources who described the program.) It was an expensive undertaking, but one the NSA was desperate to launch.

Known as the Multiprogram Research Facility, or Building 5300, the $41 million, five-story, 214,000-square-foot structure was built on a plot of land on the lab’s East Campus and completed in 2006. Behind the brick walls and green-tinted windows, 318 scientists, computer engineers, and other staff work in secret on the cryptanalytic applications of high-speed computing and other classified projects. The supercomputer center was named in honor of George R. Cotter, the NSA’s now-retired chief scientist and head of its information technology program. Not that you’d know it. “There’s no sign on the door,” says the ex-NSA computer expert.

At the DOE’s unclassified center at Oak Ridge, work progressed at a furious pace, although it was a one-way street when it came to cooperation with the closemouthed people in Building 5300. Nevertheless, the unclassified team had its Cray XT4 supercomputer upgraded to a warehouse-sized XT5. Named Jaguar for its speed, it clocked in at 1.75 petaflops, officially becoming the world’s fastest computer in 2009.

Meanwhile, over in Building 5300, the NSA succeeded in building an even faster supercomputer. “They made a big breakthrough,” says another former senior intelligence official, who helped oversee the program. The NSA’s machine was likely similar to the unclassified Jaguar, but it was much faster out of the gate, modified specifically for cryptanalysis and targeted against one or more specific algorithms, like the AES. In other words, they were moving from the research and development phase to actually attacking extremely difficult encryption systems. The code-breaking effort was up and running.

The breakthrough was enormous, says the former official, and soon afterward the agency pulled the shade down tight on the project, even within the intelligence community and Congress. “Only the chairman and vice chairman and the two staff directors of each intelligence committee were told about it,” he says. The reason? “They were thinking that this computing breakthrough was going to give them the ability to crack current public encryption.”

In addition to giving the NSA access to a tremendous amount of Americans’ personal data, such an advance would also open a window on a trove of foreign secrets. While today most sensitive communications use the strongest encryption, much of the older data stored by the NSA, including a great deal of what will be transferred to Bluffdale once the center is complete, is encrypted with more vulnerable ciphers. “Remember,” says the former intelligence official, “a lot of foreign government stuff we’ve never been able to break is 128 or less. Break all that and you’ll find out a lot more of what you didn’t know—stuff we’ve already stored—so there’s an enormous amount of information still in there.”

That, he notes, is where the value of Bluffdale, and its mountains of long-stored data, will come in. What can’t be broken today may be broken tomorrow. “Then you can see what they were saying in the past,” he says. “By extrapolating the way they did business, it gives us an indication of how they may do things now.” The danger, the former official says, is that it’s not only foreign government information that is locked in weaker algorithms, it’s also a great deal of personal domestic communications, such as Americans’ email intercepted by the NSA in the past decade.

But first the supercomputer must break the encryption, and to do that, speed is everything. The faster the computer, the faster it can break codes. The Data Encryption Standard, the 56-bit predecessor to the AES, debuted in 1976 and lasted about 25 years. The AES made its first appearance in 2001 and is expected to remain strong and durable for at least a decade. But if the NSA has secretly built a computer that is considerably faster than machines in the unclassified arena, then the agency has a chance of breaking the AES in a much shorter time. And with Bluffdale in operation, the NSA will have the luxury of storing an ever-expanding archive of intercepts until that breakthrough comes along.

But despite its progress, the agency has not finished building at Oak Ridge, nor is it satisfied with breaking the petaflop barrier. Its next goal is to reach exaflop speed, one quintillion (1018) operations a second, and eventually zettaflop (1021) and yottaflop.

These goals have considerable support in Congress. Last November a bipartisan group of 24 senators sent a letter to President Obama urging him to approve continued funding through 2013 for the Department of Energy’s exascale computing initiative (the NSA’s budget requests are classified). They cited the necessity to keep up with and surpass China and Japan. “The race is on to develop exascale computing capabilities,” the senators noted. The reason was clear: By late 2011 the Jaguar (now with a peak speed of 2.33 petaflops) ranked third behind Japan’s “K Computer,” with an impressive 10.51 petaflops, and the Chinese Tianhe-1A system, with 2.57 petaflops.

But the real competition will take place in the classified realm. To secretly develop the new exaflop (or higher) machine by 2018, the NSA has proposed constructing two connecting buildings, totaling 260,000 square feet, near its current facility on the East Campus of Oak Ridge. Called the Multiprogram Computational Data Center, the buildings will be low and wide like giant warehouses, a design necessary for the dozens of computer cabinets that will compose an exaflop-scale machine, possibly arranged in a cluster to minimize the distance between circuits. According to a presentation delivered to DOE employees in 2009, it will be an “unassuming facility with limited view from roads,” in keeping with the NSA’s desire for secrecy. And it will have an extraordinary appetite for electricity, eventually using about 200 megawatts, enough to power 200,000 homes. The computer will also produce a gargantuan amount of heat, requiring 60,000 tons of cooling equipment, the same amount that was needed to serve both of the World Trade Center towers.

In the meantime Cray is working on the next step for the NSA, funded in part by a $250 million contract with the Defense Advanced Research Projects Agency. It’s a massively parallel supercomputer called Cascade, a prototype of which is due at the end of 2012. Its development will run largely in parallel with the unclassified effort for the DOE and other partner agencies. That project, due in 2013, will upgrade the Jaguar XT5 into an XK6, codenamed Titan, upping its speed to 10 to 20 petaflops.

Yottabytes and exaflops, septillions and undecillions—the race for computing speed and data storage goes on. In his 1941 story “The Library of Babel,” Jorge Luis Borges imagined a collection of information where the entire world’s knowledge is stored but barely a single word is understood. In Bluffdale the NSA is constructing a library on a scale that even Borges might not have contemplated. And to hear the masters of the agency tell it, it’s only a matter of time until every word is illuminated.

James Bamford (washwriter@gmail.com) is the author of The Shadow Factory: The Ultra-Secret NSA from 9/11 to the Eavesdropping on America.

Source: wired.com/threatlevel/2012/03/ff_nsadatacenter/all/1

Energa and Hellas Power counter-attack

The management of the company Worldwide Energy Limited (WEL) of Dubai, which is the new owner of Energa and Hellas Power, seems determined to seek its rights in the Greek courts and the “Competition” Department of the European Commission. The investment company will appeal against the decision of the regulatory authority based on which the two power companies were deleted from the register of electricity suppliers, which led to the termination of their activities.

The total amount, which the company will ask from the state regulators – the Hellenic transmission system operator (DESMIE), the Regulatory Authority for Energy (RAE), and others – for “violations and irregularities in the market”, exceeds 340 million Euros.

This was announced at a news conference by Noe Benziane and Alan Cable, representatives of WEL, which since November is the new majority shareholder in both energy companies. They once again refused to name the owners of the company and limited themselves in refuting the rumours that they have a direct link with the old owners of the companies.

WEL representatives indirectly claimed that the closing of the companies is due to competition and explained that, given the liberalization of the energy market through the sale of thermal and hydroelectric power stations by the State Electricity Company (DEI), some people got scared that the two companies could acquire such power stations or sign contracts for long-term cooperation. This would have reduced their production costs and enable them to grow even more, especially because they would have won over 200 000 customers, which today due to the closing of the two companies, went back to the State Electricity Company (DEI).

“It is not a coincidence that the signal for illegal transmission has been submitted to the authorities by the Swiss RGL, which has left Greece, is not in the records of suppliers, and carries out only trade. So, virtually it has no business interests in the country”, said WEL representatives and suggested that the Swiss have acted on behalf of another competitor, who did not want to appear on the stage.

Participating in the interview were also WEL’s legal advisers Glikeria Siouti (who has worked as legal advisor to former Prime Minister George Papandreou) and Nikolaos Nikolinakos, who indicated that they initiated legal proceedings for the return of the companies’ licenses, in order to subsequently open the way for requesting benefits.

They believe that the first vindication came with the recent decision of the State Council to approve the request of the two energy companies. The decision is reflected in the return of 80 million Euros for both companies by the Hellenic transmission system operator.

Given that the obligations of both companies to the Hellenic transmission system operator for the purchase of electricity amounted to 60 million Euros, the decision of the State Council turns the claims of the state body and it automatically becomes indebted to the two companies.

To a journalist’s question of whether the money should be returned to consumers rather than to the company the legal advisers and WEL representatives avoided giving a specific answer, saying that they must first see the detailed decision. According to information, however, such a question will not be posed.

The WEL representatives reiterated that the available cash of the companies exceeds 73 million Euros and is sufficient to cover all their obligations, property taxes, municipal taxes and other obligations. A request to the judicial authorities has already been submitted in order for the accounts of the companies to be released, so they can pay everything off and so that the embezzlement charge can be dropped.

Furthermore, they stressed that the two companies have additional requests for 135 million Euros from the market, relating to amounts billed but not collected from customers.

We should remind you that the conclusion of the prosecutor and chairman of the Agency against legalization of proceeds of crime Panagiotis Nikoloudis, indicated that the two companies received money for the supply of electricity, but instead of giving it to the State Electricity Company (DEI) and the Hellenic transmission system operator (DESMIE), the money reached bank accounts in Switzerland. The WEL representatives emphasized that the accounts in Switzerland are completely legitimate, they do not belong to an individual, on the contrary – these are accounts of both companies.

They also confirmed that the WEL is a gated investment company based in Dubai, seeking investment opportunities in energy. They believe that despite the objections of the Greek market, the country offers dynamic opportunities, given the liberalization of the market.

Even they themselves did not expect that within three months their investment will return 80 million Euros.

The financial claims of the company, amounting to 340 million Euros as mentioned, include 40 million Euros for 2011 from the requirement for consumption of electricity by customers of both companies, 30 million Euros from not charging the energy produced from alternative energy sources, which was increasing the marginal price in the system by 10 percent, 40 million Euros from increased fees for certification of availability and estimated damages amounting to 90 million Euros by the refusal of the State Energy Company (DEI) to include in the system 38 000 customers, who had wanted to become customers of both companies, “under the pretext that the companies did not fully pay the overtime property tax.”

Source: grreporter.info

U.S. provided a whopping $16 trillion in secret loans to bail out US and foreign banks

By Sen. Bernie Sanders

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression.

An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. “As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.

The Fed Audit:  "U.S. provided a whopping $16 trillion in secret loans to bail out US and foreign banks"

 

Among the investigation’s key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. “No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,” Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse.  In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed.  Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds.  One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

To Sanders, the conclusion is simple. “No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed,” he said.

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.

The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo.  The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.

A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. “The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street.”

To read the GAO report, click here.

 

Source: globalresearch.ca/the-fed-audit-u-s-provided-a-whopping-16-trillion-in-secret-loans-to-bail-out-us-and-foreign-banks/25750

 

7.4 Trillion Dollars And Counting: The Cost Of “Rescuing” The US Financial System

By Hamilton Nolan

Hey, the government has agreed to bail out Citigroup.

Surely we’ll now be saved from worldwide insolvency!

Right? Or is this a profligate waste of money?

We have to level with you: this whole bailout thing has now exceeded the media’s ability to critically analyze it. You’ve heard everyone throw around figures like $750 billion for the earlier bailout costs. This Citigroup thing includes a guarantee of $306 billion in assets. But think about this: according to Bloomberg, the US government has now pledged more than $7.4 trillion to rescue the financial system in the past 15 months. How much is 7.4 trillion?

  • It is “half the value of everything produced in the nation last year,” according to Bloomberg.
  • It’s enough to cut a check for almost $25,000 to every single citizen of the USA!
  • If you had 7.4 trillion pennies, you would have $74,000,000,000. That’s enough money to buy the New York Times Co. 86 times over. If we say that 100 pennies stack up 4 inches high, 7.4 trillion pennies would stack up 4,671,717 miles high. That’s enough to go to the moon and back ten times.

Fun with math! If you think the US media is equipped to evaluate numbers like this precisely, you’re out of your mind. Even the media outlets that are most qualified to report on money matters have a hard time putting $1 trillion into perspective (try this: “It would take almost three decades to spend a trillion dollars at $1,000 per second), much less $7.4 trillion.

If it makes you feel better though: this financial crisis has actually erased $23 trillion in corporate value. So 7.4 tril isn’t too bad! [Bloomberg]

Source: globalresearch.ca/7-4-trillion-dollars-and-counting-the-cost-of-rescuing-the-us-financial-system/11143