Carlyle Group's Plan to Takeover the Banking System!

So what's Treasury Secretary Henry Paulson's call for changes in regulation of the financial markets all about? A clue may have been revealed today by Randal Quarles, former Under Secretary of the Treasury who led the Treasury Department's effort in the coordination of the President's Working Group on Financial Markets and is a current Managing Director at Carlyle Group.

Quarles spoke at a luncheon meeting of the Washington DC-based National Economists Club. His topic: "Restructuring Financial Regulation". Quarles told the luncheon group that he chose the topic in January. Hmmm. Didn't Treasury Paulson just make the proposal to restructure the financial regulatory agencies last week? How did Quarles pick this topic back in January? Short-answer, Quarles is a major insider and his comments should be monitored to get a sense for what insiders are thinking.

In his talk, Quarles said that estimates go into the hundreds of billions in terms of capital that will be required by the financial industry because of losses sustained as a result of the current crisis. He said there will be more financial institutions that will go under in coming months.

He said that public markets will not supply the necessary funds because they don't have the capabilities to study in detail the risks and potential rewards of the complex financials of financial institutions. He said private equity firms have the capabilities to do so and to supply the necessary funds. (N.B. Carlyle Group is a private equity firm).

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'Pig Book' Tallies $17.2 Billion in Pork

A government-watchdog group says the Democrat-led Congress last year broke a promise to slash pork spending and doled out $17.2 billion for pet projects, including $296 million in earmarks by Sen. Hillary Rodham Clinton — the top spender of the three presidential contenders.

"There was hope that the number and cost of earmarks would be cut in half. By any measure, that has not occurred," said Tom Schatz, president of Citizens Against Government Waste (CAGW), which yesterday released its annual "Pig Book" tally of pork spending.

Congress stuffed 11,610 projects into fiscal 2008 spending bills, the second-highest total ever and more than triple the number of projects in fiscal 2007. The $17.2 billion spent reflected a 30 percent increase over the previous year's $13.2 billion expenditure, according to the "Pig Book."

The projects include $1.9 million for the Charles B. Rangel Center for Public Service, named for Ways and Means Committee Chairman Charles B. Rangel, New York Democrat, who requested the earmark; $460,752 for hops research related to beer making; $188,000 for the Lobster Institute in Maine; and $148,950 for the Montana Sheep Institute.

The top three "porkers" identified in the "Pig Book" all were Republican members of the Senate Appropriations Committee: ranking member Thad Cochran of Mississippi with $892 million, Ted Stevens of Alaska with $469 million and Richard C. Shelby of Alabama with $465 million.

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Mexican Mayor Faces Trafficking Charges in N.Y.

The newly elected mayor of a Mexican city in the country's southwestern part of the state of Puebla was returned to New York yesterday to face charges of trafficking multikilogram quantities of cocaine into the United States.

Ruben Gil, 41, who was elected in November, is charged with participating in a "far-reaching narcotics trafficking conspiracy" that involved the transportation and delivery of cocaine to co-conspirators in the New York metropolitan area in 2006 and 2007.

"This arrest exemplifies the commitment of global law enforcement to identify and arrest those individuals responsible for trafficking cocaine into New York," said Drug Enforcement Administration (DEA) Special Agent in Charge John P. Gilbride, who heads the agency's New York office.

Mr. Gil was arrested in California on March 23 as he tried to fly into Los Angeles. His name was on a watch list because of his suspected drug-trafficking activity.

According to an indictment returned in December in U.S. District Court in Manhattan and statements made during a bail hearing in U.S. District Court in Los Angeles, Mr. Gil and co-defendant Martin N. Garcia arranged for the delivery of 11 kilograms of cocaine to New York in November and more than 22 kilograms of cocaine to New York in June 2006.

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DHS Bullying States on Real ID

By Lyndsey Layton / Washington Post

Members of the Senate Judiciary Committee criticized the Department of Homeland Security yesterday for pressuring reluctant states to adopt new federally approved driver's licenses, with one accusing Secretary Michael Chertoff of "bullying" the states into compliance under a threat of blocking citizens' travel.

"We ought to engage in a fairer, more productive negotiated rule-making with the states," the committee's chairman, Sen. Patrick J. Leahy (D-Vt.), told Chertoff. "Maybe people want to have a national ID card in their state. In my state, they don't."

Leahy spoke at a hearing that touched on a range of homeland security issues, from the border fence to the backlog in the naturalization process. But, several times, the conversation between the secretary and the senators circled back to the initiative for a uniform driver's license, known as the Real ID program.

Conceived as a security measure after the Sept. 11, 2001, terrorist attacks, it is meant to strengthen the authenticity of driver's licenses and make it tougher to use them as fraudulent proof of identity. Many states have bristled, saying it poses privacy concerns and creates a financial burden. DHS has estimated the cost at $3.9 billion.

"Bullying the states is not the answer, nor is threatening their citizens' rights to travel," Leahy told Chertoff. "From Maine to Montana, states have said no."

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Data Breaches Hit 8.3 Million Records in First Quarter

At least 8.3 million personal and financial records of consumers were potentially compromised by data breaches at businesses, universities and government agencies in the first quarter of 2008, according to statistics released yesterday.

The Identity Theft Resource Center in San Diego said it tracked public reports of 167 data breaches in the first three months of this year. The center recorded 448 incidents in 2007.

Roughly 4.2 million of the breached records were the result of digital intrusions at the Hannaford supermarket chain, disclosed last month.

Overall, businesses were responsible for about 36 percent of the breaches, followed by schools and universities (25 percent), government and military (18 percent), medical/health care (14 percent), and banking and financial institutions (7 percent).

Only about 13 percent of the breaches were the result of hacker break-ins.

Most of the data breaches in the first quarter appear to have resulted from lost or stolen laptops, hard drives or thumb drives. Insider access and the inadvertent posting of sensitive data to a Web site or through e-mail were also frequently cited reasons for breaches, according to the report.

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What the Classroom Didn't Teach Me About the American Empire

With an occupying army waging war in Iraq and Afghanistan, with military bases and corporate bullying in every part of the world, there is hardly a question any more of the existence of an American Empire. Indeed, the once fervent denials have turned into a boastful, unashamed embrace of the idea.

However the very idea that the United States was an empire did not occur to me until after I finished my work as a bombardier with the Eighth Air Force in the Second World War, and came home.

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Former Governor Jesse Ventura: WTC Collapse A Controlled Demolition

Former Minnesota Governor Jesse Ventura vehemently savaged the official 9/11 story on a syndicated national radio show today, saying the WTC collapsed like a controlled demolition and was pulverized to dust as he also highlighted the impossible 10 second free fall speed of the towers.

Appearing on The Alex Jones Show, Ventura said that his initial reaction to 9/11 was much like most people at the time, and he accepted the official story outright, a response he now regrets because he was in a position of power and could have used it to raise a lot of pointed questions.

"I kicked myself when it initially happened that the light didn't go off but I was so shocked that this thing had even taken place that I apologize for not being more aware," said Ventura, adding that watching Loose Change at the insistence of his son was part of the catalyst for his wake up call.

Host Alex Jones is executive producer of Loose Change (get it here), the most watched Internet movie of all time. Ventura said he ran through a rollercoaster of emotions when he saw the film.

"When I finally did watch it I went through every emotion you could imagine, from laughing, crying, getting sick to my stomach, to the whole emotional thing," said the former Governor.

"To me questions haven't been answered and are not being answered about 9/11," said Ventura, before highlighting the collapse of Building 7, a 47-story tall skyscraper that was not hit by a plane but collapsed in its own footprint in the late afternoon of September 11.

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Why doesn't the 9/11 Commission know about Mukasey's 9/11 story?

By Glenn Greenwald

Last week, during a question-and-answer session following a speech he delivered San Francisco, Attorney General Michael Mukasey revealed a startling and extremely newsworthy fact. As I wrote last Saturday, Mukasey claimed that, prior to 9/11, the Bush administration was aware of a telephone call being made by an Al Qaeda Terrorist from what he called a "safe house in Afghanistan" into the U.S., but failed to eavesdrop on that call. Some help is needed from readers here to generate the attention for this story that it requires.

In that speech, Mukasey blamed FISA's warrant requirement for the failure to eavesdrop on that call -- an assertion which is, for multiple reasons that I detailed in that post, completely false. He then tearfully claimed that FISA therefore caused the deaths of "three thousand people who went to work that day." For obvious reasons, the Attorney Geenral's FISA falsehoods themselves are extremely newsworthy, but it is the story he told about the pre-9/11-planning call from Afghanistan itself that is truly new, and truly extraordinary.

Critically, the 9/11 Commission Report -- intended to be a comprehensive account of all relevant pre-9/11 activities -- makes no mention whatsoever of the episode Mukasey described. What has been long publicly reported in great detail are multiple calls that were made between a global communications hub in Yemen and the U.S. -- calls which the NSA did intercept without warrants (because, contrary to Mukasey's lie, FISA does not and never did require a warrant for eavesdropping on foreign targets) but which, for some unknown reason, the NSA failed to share with the FBI and other agencies. But the critical pre-9/11 episode Mukasey described last week is nowhere to be found in the 9/11 Report or anywhere else. It just does not exist.

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Loose Change Final Cut: The Ultimate 9/11 Exposé

What People Are Saying About Loose Change :

• Loose Change, a documentary ...which just might be the first Internet blockbuster. -Vanity Fair-
• Loose Change is a... blizzard of statistics, photographs, documents, eyewitness accounts and expert testimony set to a trippy hip-hop backbeat. -TIME MAGAZINE-
• Millions of people have heard its message. Like it or loathe it, you can't ignore Loose Change.
-London Guardian-

Readiness Is Dangerously Low, Army Chief Says

Senior Army and Marine Corps leaders said yesterday(4-1-08) that the increase of more than 30,000 troops in Iraq and Afghanistan has put unsustainable levels of stress on U.S. ground forces and has put their readiness to fight other conflicts at the lowest level in years.

In a stark assessment a week before Gen. David H. Petraeus, the top U.S. commander in Iraq, is to testify on the war's progress, Gen. Richard A. Cody, the Army's vice chief of staff, said that the heavy deployments are inflicting "incredible stress" on soldiers and families and that they pose "a significant risk" to the nation's all-volunteer military.

"When the five-brigade surge went in . . . that took all the stroke out of the shock absorbers for the United States Army," Cody testified before the Senate Armed Services Committee's readiness panel.

He said that even if five brigades are pulled out of Iraq by July, as planned, it would take some time before the Army could return to 12-month tours for soldiers. Petraeus is expected to call for a pause in further troop reductions to assess their impact on security in Iraq.

"I've never seen our lack of strategic depth be where it is today," said Cody, who has been the senior Army official in charge of operations and readiness for the past six years and plans to retire this summer.

Lt. Gen. Raymond T. Odierno, one of the chief architects of the Iraq troop increase, has been nominated to replace Cody. Odierno is scheduled for a Senate confirmation hearing tomorrow.

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Army Can’t Be Sure Body Armor Met Safety Standards

The Army can’t be sure some of its body armor met safety standards, partly because it didn’t do proper paperwork on initial testing of the protective vests, a Defense Department audit said.

Democratic Rep. Louise M. Slaughter of New York, who requested the department inspector general’s report, on Wednesday(4-2-08) demanded the firing of officials responsible. But the Army said the gear is safe and the issue is a disagreement over when and what type of testing is required — principally so-called “first article testing” typically done on a product before a contract is awarded.

The inspector general reviewed $5.2 billion worth of Army and Marine Corps contracts for body armor from 2004 through 2006.

“Specific information concerning testing and approval of first articles was not included in 13 of 28 Army contracts and orders reviewed, and contracting files were not maintained in 11 of 28 Army contracts to show why procurement decisions were made,” the report concluded.

“As a result, DoD has no assurance that first articles produced under 13 of the 28 contracts and orders reviewed met the required standards,” or that 11 of the 28 contracts were awarded based on informed decisions, it said.

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Pentagon: Colleges must hand over names

The Defense Department has announced a new get-tough policy with colleges and universities that interfere with the work of military recruiters and Reserve Officer Training Corps programs.

Under rules that will take effect April 28, defense officials said they want the exact same access to student directories that is provided to all other prospective employers.

Students can opt out of having their information turned over to the military only if they opt out of having their information provided to all other recruiters, but schools cannot have policies that exclude only the military, defense officials said in a March 28 notice of the new policy in the Federal Register.

The Defense Department “will honor only those student ‘opt-outs’ from the disclosure of directory information that are even-handedly applied to all prospective employers seeking information for recruiting purposes,” the notice says.

Directories are an important recruiting tool because they include the names, birthdates, phone numbers and academic pursuits of college students that can be used to identify people with knowledge and interests that are particularly useful to the military.

The new policy also no longer lets schools ban military recruiters from working on campuses solely because a school determines that no students have expressed interest in joining the military. If other employers are invited, the military has to have the same access.

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U.S. must leave Iraq, retired generals say

Setting a withdrawal timetable from Iraq might be a shaky strategic move, but it would provide a morale boost for service members and their families, a former Army War College commandant said Wednesday.

Retired Army Maj. Gen. Robert Scales Jr., testifying before the Senate Foreign Affairs Committee about U.S. military strategy in Iraq, said he has no doubt that a major withdrawal of combat forces is coming because the U.S. has “run out of military options” and cannot indefinitely sustain troop levels.

“Regardless of who wins the election and regardless of conditions on the ground, by summer the troops will begin to come home,” said Scales, who headed the war college in 1997. “The only point of contention is how precipitous will be the withdrawal and whether the schedule of withdrawal should be a matter of administration policy.”

White House and Pentagon officials have resisted efforts by some lawmakers to set a fixed timetable for withdrawal of U.S. combat forces from Iraq, arguing that insurgents and other groups would try to use the dates to their advantage.

Scales, who was one of the creators of the Army After Next program in 1995 that helped plan for transforming the force, agreed that following a fixed withdrawal schedule “is not a good idea in an insurgency because the indigenous population tends to side with the perceived winners.”

“However, some publicly expressed window of withdrawal is necessary, for no other reason than to give soldier’s families some hope that their loved ones will not be stuck on a perpetual rollercoaster of deployments,” he said.

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Ted Olson's Report of Phone Calls from Barbara Olson on 9/11: Three Official Denials

By David Ray Griffen

Late in the day on 9/11, CNN put out a story that began: “Barbara Olson, a conservative commentator and attorney, alerted her husband, Solicitor General Ted Olson, that the plane she was on was being hijacked Tuesday morning, Ted Olson told CNN.” According to this story, Olson reported that his wife had “called him twice on a cell phone from American Airlines Flight 77,” saying that “all passengers and flight personnel, including the pilots, were herded to the back of the plane by armed hijackers. The only weapons she mentioned were knives and cardboard cutters.”²

Ted Olson’s report was very important. It provided the only evidence that American 77, which was said to have struck the Pentagon, had still been aloft after it had disappeared from FAA radar around 9:00 AM (there had been reports, after this disappearance, that an airliner had crashed on the Ohio-Kentucky border).

Also, Barbara Olson had been a very well-known commentator on CNN. The report that she died in a plane that had been hijacked by Arab Muslims was an important factor in getting the nation’s support for the Bush administration’s “war on terror.” Ted Olson’s report was important in still another way, being the sole source of the widely accepted idea that the hijackers had box cutters.³.

However, although Ted Olson’s report of phone calls from his wife has been a central pillar of the official account of 9/11, this report has been completely undermined.

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Attacks on U.S. Forces Soared at End of March

Attacks against U.S. troops and Iraqi security forces soared across Baghdad in the last week of March to the highest levels since the deployment of additional U.S. troops here reached full strength last June, according to U.S. military data and analysis.

The sharp spike in attacks, in response to an ill-prepared Iraqi government offensive in the southern city of Basra last week, underscores the fragility of the U.S. military's hard-won security gains in Iraq and how easily those gains can be erased.

"Last week was clearly a bad week and shows the tenuous nature of security, which is something we've been stressing for some time now," Navy Rear Adm. Gregory J. Smith, the U.S. military's chief spokesman, wrote in an e-mail response to questions. "Security in Iraq is not irreversible, and any number of actors can affect the level of violence if and when they choose to."

Over the week that began March 25, when the offensive began in Basra, there were 728 attacks against U.S. coalition forces, Iraqi security forces and civilians across Iraq, according to U.S. military data obtained by The Washington Post.

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House Joins Senate in OK'ing DNA Bill

A proposal to take genetic material from people charged with certain crimes cleared the legislature yesterday(4-1-08) after weeks of debate.

The House voted 130-7 to expand Maryland's DNA database to include some people who haven't been convicted of a crime. Currently, only convicted people must submit samples.

The bill has passed the Senate, though the two chambers must settle differences before sending a final bill to Democratic Gov. Martin O'Malley, who proposed the plan.

ACLU: Military Skirting Law to Spy

The military is using the FBI to skirt legal restrictions on domestic surveillance to obtain private records of Americans' Internet service providers, financial institutions and telephone companies, the ACLU said Tuesday.

The American Civil Liberties Union based its conclusion on a review of more than 1,000 documents turned over by the Defense Department after it sued the agency last year for documents related to national security letters, or NSLs, investigative tools used to compel businesses to turn over customer information without a judge's order or grand jury subpoena.

"Newly unredacted documents released today reveal that the Department of Defense is using the FBI to circumvent legal limits on its own NSL power," said the ACLU, whose lawsuit was filed in Manhattan federal court.

ACLU lawyer Melissa Goodman said the documents the civil rights group studied "make us incredibly concerned." She said it would be understandable if the military relied on help from the FBI on joint investigations, but not when the FBI was not involved in a probe.

The FBI referred requests for comment Tuesday to the Defense Department. A department spokesman, Air Force Lt. Col. Patrick Ryder, said in an e-mail that the department had made "focused, limited and judicious" use of the letters since Congress extended the capability to investigatory entities other than the FBI in 2001.

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Centers Tap Into Personal Databases

Intelligence centers run by states across the country have access to personal information about millions of Americans, including unlisted cellphone numbers, insurance claims, driver's license photographs and credit reports, according to a document obtained by The Washington Post.

One center also has access to top-secret data systems at the CIA, the document shows, though it's not clear what information those systems contain.

Dozens of the organizations known as fusion centers were created after the Sept. 11, 2001, terrorist attacks to identify potential threats and improve the way information is shared. The centers use law enforcement analysts and sophisticated computer systems to compile, or fuse, disparate tips and clues and pass along the refined information to other agencies. They are expected to play important roles in national information-sharing networks that link local, state and federal authorities and enable them to automatically sift their storehouses of records for patterns and clues.

Though officials have publicly discussed the fusion centers' importance to national security, they have generally declined to elaborate on the centers' activities. But a document that lists resources used by the fusion centers shows how a dozen of the organizations in the northeastern United States rely far more on access to commercial and government databases than had previously been disclosed.

Those details have come to light at a time of debate about domestic intelligence efforts, including eavesdropping and data-aggregation programs at the National Security Agency, and whether the government has enough protections in place to prevent abuses.

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Prevent Digital Pickpocketing by Blocking Radio Frequencies

Stuck on the tarmac, flipping through a travel magazine, you're struck by the blurb for metal-lined wallets. Purpose: to prevent digital pickpocketing by blocking radio frequencies.

These handsome babies start at $79.99 and top out at the $225 Italian Leather Teju Lizard Embossed Travel Wallet.

Your reaction: Wow! Luxury accessories for paranoids!

But you would be wrong. Maybe.

Because, says electronic security expert Bruce Schneier, crystallizing the view of many: "As weird as it sounds, wrapping your passport in tinfoil helps. The tinfoil people, in this case, happen to be correct."

The issue is bigger than just the new style of passports, which contain chips that emit information that can be read by a scanner. We're also talking about your Metro SmarTrip card, your employee ID/building access card, your automatic highway toll pass, the newest wave of credit cards and gas purchasing cards, even digital drivers' licenses being developed in some states.

All of these nifty and oh-so-convenient bits of plastic employ versions of what's known as radio frequency identification technology, or RFID. That is, they toss out bits of data that are caught by receivers, with little or no contact, just through the air in some cases. The new credit cards, such as MasterCard's PayPass, don't have to be swiped through a machine. Swiping is so retro, and takes precious extra seconds. You need only lightly tap the PayPass on a terminal to register a purchase.

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Bernanke Offers Bleaker View on U.S. Economy

Also see: Bernanke warns of possible recession

Ben S. Bernanke, the chairman of the Federal Reserve, presented his bleakest assessment yet of the economy on Wednesday morning, warning a Congressional committee that economic growth was likely to stagnate — and perhaps even contract — over the first half of the year.

In his first public remarks since the Fed orchestrated an unprecedented bailout of the brokerage firm Bear Stearns, Mr. Bernanke acknowledged that while the Fed’s actions had “helped stabilize” the credit markets, banks and other financial institutions remained hesitant to lend, causing problems for the broader economy.

“Financial markets remain under considerable stress,” Mr. Bernanke said, in remarks prepared for delivery Wednesday morning to the Joint Economic Committee. “The capacity and willingness of some large institutions to extend new credit remains limited.”

Over all, Mr. Bernanke said, “It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly.”

While he said growth would likely recover in the second half of the year, and return to a “sustainable pace” in 2009, he warned that the current turbulence made the economic outlook difficult to predict.

“The uncertainty attending this forecast is quite high and the risks remain to the downside,” he said.

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