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Saturday, January 25, 2014


Thursday, January 23, 2014
Owner of Houston Medical Equipment Companies Indicted for $3.4 Million Medicare Fraud Scheme

Huey P. Williams Jr., the owner and operator of two durable medical equipment (DME) companies, was arrested for his alleged role in a $3.4 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

The indictment charges Williams, 44, of Katy, Texas, with one count of health care fraud, which carries a maximum penalty of 10 years in prison upon conviction.  Williams is expected to make his initial appearance in U.S. District Court for the Southern District of Texas in Houston.

According to the indictment, Williams orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until July 2010.  Williams allegedly submitted false and fraudulent claims to Medicare through his Houston-area DME companies – Hermann Medical Supplies Inc. and Hermann Medical Supplies II (Hermann Medical) – which purported to provide orthotics and other DME to Medicare beneficiaries.

Hermann Medical allegedly submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or never provided.  Many of the orthotic devices were components of an arthritis kit and were purported to be for the treatment of arthritis-related conditions.  From December 2006 through July 2010, Williams submitted claims of approximately $3.4 million to Medicare.

An indictment is merely a formal accusation.  Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the FBI, HHS-OIG and MFCU and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.   The case is being prosecuted by Trial Attorney Ashlee Caligone McFarlane of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.


India Republic Day
Press Statement
John Kerry
Secretary of State
Washington, DC
January 25, 2014

On behalf of President Obama and the people of the United States, I am delighted to send best wishes to the people of the Republic of India as you celebrate Republic Day on January 26.

The real magic of India lies as much in its promising future as it does in its rich heritage. I'll never forget my first visit to India nearly 20 years ago on a United States Senate Congressional trade delegation. The dynamism I saw then continues today. India is a country on the move.

Beneath all the changes – and what really binds our nations and our peoples together –is our shared commitment to a strong and vibrant democratic heritage. India’s transition to democratic independence and emergence on the world stage was one of the great success stories of the 20th century. Today, it is an inspiration for so many young democracies.

When I spoke with External Affairs Minister Khurshid in Montreaux this past week, we agreed that both our peoples benefit when the world’s largest and oldest democracies work closely together. External Affairs Minister Khurshid and I affirmed that we are eager to move forward with our high-level dialogues and exchanges soon, and that our countries remain firmly committed to the indispensable U.S.-India partnership.

On this special day, I offer our congratulations to the Indian people and warmest wishes for continued prosperity and peace.



Fatal Hemophagocytic Lymphohistiocytosis Associated with Locally Acquired Dengue Virus Infection — New Mexico and Texas, 2012

Dengue may be under recognized in the United States; clinicians should request diagnostic testing of suspected dengue cases and report confirmed cases to state and local health departments. This report describes a woman who was infected with dengue virus in the southern United States and died from a rare complication of dengue called hemophagocytic lymphohistiocytosis. The woman was initially diagnosed with West Nile fever and was not suspected of having dengue because the symptoms are sometimes associated with bleeding. Most people with dengue will not have severe bleeding, which is diagnostically linked with the disease. This case may suggest that there are more unrecognized cases of dengue in the United States. Although dengue outbreaks have recently occurred in Florida, Texas and Hawaii, the largest disease burden in the 50 United States will continue to be in travelers. Individuals who travel to areas where dengue is common should protect themselves from mosquito bites to reduce their risk of infection.


Statement by US Secretary of Labor Thomas E. Perez 
on the Bureau of Labor Statistics' 2013 Union Membership Report

WASHINGTON — U.S. Secretary of Labor Thomas E. Perez has issued the following statement regarding the department's Bureau of Labor Statistics report released today on union membership in 2013:

"Today the Bureau of Labor Statistics announced that, in 2013, the unionization rate of employed wage and salary workers was 11.3 percent. Among private-sector employees, the rate was 6.7 percent.

"The data also show that among full-time wage and salary workers, union members have higher median weekly earnings than nonunion workers. The median weekly earnings of union members were $950, compared to $750 for nonunion workers.

"Along with higher wages, other data show that union members have greater access to employment-based benefits, such as health insurance, a retirement savings plan, and sick and vacation leave.

"Workers' ability to form unions and engage in collective bargaining has been a cornerstone of a strong middle class. The decline in union membership over the last few decades has contributed to more working families struggling to get by. When workers have a seat at the table, they are better able to bargain for their fair share of the value they helped create; and that leads to greater economic security and economic mobility for everyone. As our economy continues to recover and we work to create good jobs, we need to ensure workers can lift their voices to raise wages, reduce inequality and help more people climb ladders of opportunity."


Finalization of the Philippines - Moro Islamic Liberation Front Framework Agreement on the Bangsamoro
Press Statement
John Kerry
Secretary of State
Washington, DC
January 25, 2014

The United States Government congratulates the Government of the Philippines and the Moro Islamic Liberation Front for concluding negotiations toward an historic, comprehensive peace agreement.

This agreement offers the promise of peace, security, and economic prosperity now and for future generations in Mindanao.

Both sides are moving closer to the vision of a just and peaceful solution as outlined in the October 2012 Framework Agreement on Bangsamoro.

The United States also commends the Government of Malaysia, facilitator of the talks, as well as the International Contact Group, for its constructive role in helping resolve a decades-long conflict.


Weekly Address: Taking Action to End Sexual Assault
Saturday, January 25, 2014.

WASHINGTON, DC—In his weekly address, President Obama said that the Administration has taken another important step to protect women at college by establishing the White House Task Force on Protecting Students from Sexual Assault. An estimated 1 in 5 women is sexually assaulted at college, and the President said that we will keep taking actions like strengthening the criminal justice system, reaching out to survivors, and changing social norms so that all Americans can feel safe and protected as they pursue their own piece of the American dream.

Remarks of President Barack Obama

Weekly Address

The White House

January 25, 2014

Hi, everybody.  This week, I called members of my Cabinet to the White House to deal with a challenge that affects so many families and communities – the crime, the outrage, of sexual violence.

Sexual assault is an affront to our basic decency and humanity.  And it’s about all of us – the safety of those we love most: our moms, our wives, our daughters and our sons.

Because when a child starts to question their self-worth after being abused, and maybe starts withdrawing… or a young woman drops out of school after being attacked… or a mother struggles to hold down a job and support her kids after an assault… it’s not just these individuals and their families who suffer.  Our communities – our whole country – is held back.

Over the past five years, we’ve stepped up our efforts stop these crimes.  And this week, we took another important step to protect young women at college.  An estimated 1 in 5 women is sexually assaulted at college – and that’s totally unacceptable.  So I’ve created the White House Task Force to Protect Students from Sexual Assault.  We’re going to help schools do a better job of preventing and responding to sexual assault on their campuses.  Because college should be a place where our young people feel secure and confident, so they can go as far as their talents will take them.

And we’re going to keep working to stop sexual assaults wherever they occur.  We’ll keep strengthening our criminal justice system, so police and prosecutors have the tools and training to prevent these crimes and bring perpetrators to justice.  We’ll keep reaching out to survivors, to make sure they’re getting all the support they need to heal.  We’re going to keep combating sexual assault in our armed forces, because when a member of our military is attacked by the very people he or she trusts and serves with, that’s an injustice that no one who volunteers to protect our nation should ever endure.

Some of this is a job for government.  But really, it’s up to all of us.  We’ve got to teach young people – men and women – to be brave enough to stand up and help put an end to these crimes.  We’ve especially got to teach young men to show women the respect they deserve.  I want every young man in America to know that real men don’t hurt women.  And those of us who are fathers have a special obligation to make sure every young man out there understands that being a man means recognizing sexual violence and being outraged by it, and doing their part to stop it.

Perhaps most important, we need to keep saying to anyone out there who has ever been assaulted:  you are not alone.  We have your back.  I’ve got your back.

I’m going to keep pushing for others to step up – across my administration, in Congress, in state capitals, college campuses and military bases all across our country.  This is a priority for me, not only as President and Commander-in-Chief, but as a husband and a father of two extraordinary girls.  And I hope it’s a priority for you.  Because here in the United States of America, every man and woman, every girl and boy, has the right to be safe and protected and to pursue their own piece of the American dream.

Let’s all do our part to make it happen.  Thanks, and have a great weekend.



Head lice. Every parent’s nightmare.
A year-round problem, the number of cases seems to peak when the kids go back to school in the fall and again in January, says Patricia Brown, M.D., a dermatologist at the Food and Drug Administration (FDA).

An estimated 6 to 12 million cases of head lice infestation occur each year in the United States in children 3 to 11 years of age, according to the Centers for Disease Control and Prevention. Head lice are most common among preschool children attending child care, elementary school children, and household members of children who have lice.

Contrary to myth, head lice are not caused by poor hygiene, Brown says. They are spread mainly by direct head-to-head contact with a person who already has head lice. You cannot get head lice from your pets; lice feed only on humans.

Lice don’t fly or jump; they move by crawling. But because children play so closely together and often in large groups, lice can easily travel from child to child, especially when they touch heads during playing or talking.

Blood-Sucking Bugs

Head lice are blood-sucking insects about the size of a sesame seed and tan to grayish-white in color. They attach themselves to the skin on the head and lay eggs (nits) in the hair.

According to Brown, you can check for head lice or nits by parting the hair in several spots. You can use a magnifying glass and a bright light to help spot them. Because head lice can move fast it may be easier to spot the nits. Nits can look like dandruff, but you can identify them by picking up a strand of hair close to the scalp and pulling your fingernail across the area where you suspect a nit. Dandruff will come off easily, but nits will stay firmly attached to the hair, Brown explains.

FDA-approved treatments for head lice include both over-the-counter (OTC) and prescription drugs, such as Nix and Rid, in the form of shampoos, creams and lotions. “Many head lice products are not for use in children under the age of 2, so read the label carefully before using a product to make sure it is safe to use on your child,” Brown says.

Although OTC drugs are available for treatment of head lice, Brown says your health care professional may prescribe drugs recently approved by the FDA, such as Ulesfia (approved in 2009), Natroba (approved in 2011) or Sklice (approved in 2012).

Steps for Safe Use

Follow these steps to use any head lice treatment safely and appropriately:
After rinsing the product from the hair and scalp, use a fine-toothed comb or special “nit comb” to remove dead lice and nits.

Apply the product only to the scalp and the hair attached to the scalp—not to other body hair.

Before treating young children, talk with the child’s doctor or your pharmacist for recommended treatments based on a child’s age and weight.
Use medication exactly as directed on the label and never more often than directed unless advised by your health care professional.
Use treatments on children only under the direct supervision of an adult.

Heading Off Head Lice

Teach children to avoid head-to-head contact during play and other activities at home, school, and elsewhere (sports activities, playgrounds, slumber parties, and camps).

Teach children not to share clothing and supplies, such as hats, scarves, helmets, sports uniforms, towels, combs, brushes, bandanas, hair ties, and headphones.
Disinfest combs and brushes used by a person with head lice by soaking them in hot water (at least 130°F) for 5–10 minutes.

Do not lie on beds, couches, pillows, carpets, or stuffed animals that have recently been in contact with a person with head lice.

Clean items that have been in contact with the head of a person with lice in the 48 hours before treatment. Machine wash and dry clothing, bed linens, and other items using hot water (130°F) and a high heat drying cycle. Clothing and items that are not washable can be dry-cleaned or sealed in a plastic bag and stored for two weeks.

Vacuum the floor and furniture, particularly where the person with lice sat or lay. Head lice survive less than one or two days if they fall off the scalp and cannot feed.

Do not use insecticide sprays or fogs; they are not necessary to control head lice and can be toxic if inhaled or absorbed through the skin.

After finishing treatment with lice medication, check everyone in your family for lice after one week. If live lice are found, contact your health care professional.
Heading Off Head Lice source: Centers for Disease Control and Prevention
This article appears on FDA's Consumer Updates page, which features the latest on all FDA-regulated products.

Updated: January 23, 2014



 The Securities and Exchange Commission today charged public accounting firm KPMG with violating rules that require auditors to remain independent from the public companies they’re auditing to ensure they maintain their objectivity and impartiality.

The SEC issued a separate report about the scope of the independence rules, cautioning audit firms that they’re not permitted to loan their staff to audit clients in a manner that results in the staff acting as employees of those companies.

An SEC investigation found that KPMG broke auditor independence rules by providing prohibited non-audit services such as bookkeeping and expert services to affiliates of companies whose books they were auditing.  Some KPMG personnel also owned stock in companies or affiliates of companies that were KPMG audit clients, further violating auditor independence rules.

KPMG agreed to pay $8.2 million to settle the SEC’s charges.

“Auditors are vital to the integrity of financial reporting, and the mere appearance that they may be conflicted in exercising independent judgment can undermine public confidence in our markets,” said John T. Dugan, associate director for enforcement in the SEC’s Boston Regional Office.  “KPMG compromised its role as an independent audit firm by providing prohibited non-audit services to companies that it was supposed to be auditing without any potential conflicts.”

According to the SEC’s order instituting settled administrative proceedings, KPMG repeatedly represented in audit reports that it was “independent” despite providing services to three audit clients that impaired KPMG’s independence.  The violations occurred at various times from 2007 to 2011.

According to the SEC’s order, KPMG provided various non-audit services – including restructuring, corporate finance, and expert services – to an affiliate of one company that was an audit client.  KPMG provided such prohibited non-audit services as bookkeeping and payroll to affiliates of another audit client.  In a separate instance, KPMG hired an individual who had recently retired from a senior position at an affiliate of an audit client.  KPMG then loaned him back to that affiliate to do the same work he had done as an employee of that affiliate, which resulted in the professional acting as a manager, employee, and advocate for the audit client.  These services were prohibited by Rule 2-01 of Regulation S-X of the Securities Exchange Act of 1934.

The SEC’s order finds that KPMG’s actions violated Rule 2-02(b) of Regulation S-X and Rule 10A-2 of the Exchange Act, and caused violations of Section 13(a) of the Exchange Act and Rule 13a-1.  The order further finds that KPMG engaged in improper professional conduct as defined by Section 4C of the Exchange Act and Rule 102(e) of the Commission’s Rules of Practice.  Without admitting or denying the findings, KPMG agreed to pay $5,266,347 in disgorgement of fees received from the three clients plus prejudgment interest of $1,185,002.  KPMG additionally agreed to pay a penalty of $1,775,000 and implement internal changes to educate firm personnel and monitor the firm’s compliance with auditor independence requirements for non-audit services.  KPMG will engage an independent consultant to evaluate such changes.

The SEC’s investigation separately considered whether KPMG’s independence was impaired by the firm’s practice of loaning non-manager tax professionals to assist audit clients on-site with tax compliance work performed under the direction and supervision of the clients’ management.  While the SEC did not bring an enforcement action against KPMG on this basis, it has issued a report of investigation noting that by their very nature, so-called “loaned staff arrangements” between auditors and audit clients appear inconsistent with Rule 2-01 of Regulation S-X, which prohibits auditors from acting as employees of their audit clients.

The report also emphasized:

An auditor may not provide otherwise permissible non-audit services (such as permissible tax services) to an audit client in a manner that is inconsistent with other provisions of the independence rules.

An arrangement that results in an auditor acting as an employee of the audit client implicates Rule 2-01 regardless of whether the accountant also acts as an officer or director, or performs any decision-making, supervisory, or ongoing monitoring functions, for the audit client.

Audit firms and audit committees must carefully consider whether any proposed service may cause the auditors to resemble employees of the audit client in function or appearance even on a temporary basis.

The SEC’s Office of the Chief Accountant has a Professional Practice Group that is devoted to addressing questions about auditor independence among other matters.  Auditors and audit committees are encouraged to consult the SEC staff with questions about the application of the auditor independence rules, including the permissibility of a contemplated service.

“The accounting profession must carefully consider whether engagements are consistent with the requirements to be independent of audit clients,” said Paul A. Beswick, the SEC’s chief accountant.  “Resolving questions about permissibility of non-audit services is always best done before commencing the services.”

The SEC’s investigation was conducted by Britt K. Collins, Dawn A. Edick, Michael Foster, Heidi M. Mitza, and Kathleen Shields.  The SEC appreciates the assistance of the Public Company Accounting Oversight Board.


Press Release Reducing sodium in restaurant foods is an opportunity for choice
Communities reduce, replace, reformulate to offer lower-sodium options

Americans eat out at fast food or dine-in restaurants four or five times a week. Just one of those meals might contain more than an entire day’s recommended amount of sodium. CDC has strategies for health departments and restaurants to work together to offer healthier choices for consumers who want to lower their sodium intake. The report, “From Menu to Mouth: Opportunities for Sodium Reduction in Restaurants,” is published in today’s issue of CDC’s journal, Preventing Chronic Disease.

On average, foods from fast food restaurants contain 1,848 mg of sodium per 1,000 calories and foods from dine-in restaurants contain 2,090 mg of sodium per 1,000 calories. The U. S. Dietary Guidelines recommend the general population limit sodium to less than 2,300 mg a day. Too much sodium can cause high blood pressure, one of the leading causes of heart disease and stroke.

“The bottom line is that it’s both possible and life-saving to reduce sodium, and this can be done by reducing, replacing and reformulating,” said CDC Director Tom Frieden, M.D., M.P.H. “When restaurants rethink how they prepare food and the ingredients they choose to use, healthier options become routine for customers.”


Friday, January 24, 2014
Tennessee and Virginia Orthopedic Clinics to Pay $1.85 Million to Settle Allegations of Billing Medicare for Reimported Products

Two orthopedic clinics will pay a combined $1.85 million to resolve state and federal False Claims Act allegations that they knowingly billed state and federal health care programs for reimported osteoarthritis medications, known as viscosupplements, the Department of Justice announced today.  Tennessee Orthopaedic Clinics P.C., headquartered in Knoxville, Tenn., will pay $1.3 million, and Appalachian Orthopaedic Clinics P.C., headquartered in Kingsport, Tenn., will pay $550,000.

“The Department of Justice will not tolerate the conduct of companies that impermissibly shift risks onto patients in order to increase their own profits,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The department is committed to maintaining the integrity of the health care system, ensuring that patients receive drugs and devices that are safe and effective and taking action against companies that take chances with the health of consumers so as to improve their own bottom lines.”

Viscosupplements, such as Synvisc and Orthovisc, are injections approved by the Food and Drug Administration for the treatment of osteoarthritis pain in the knee.  Viscosupplements are reimbursed by Medicare, Medicaid and other federal health care programs at a set rate based on the average sales price of the domestic product.  The government contended that the clinics knowingly purchased deeply discounted viscosupplements that were reimported from foreign countries and billed them to state and federal health care programs in order to profit from the reimbursement system, when such reimported viscosupplements were not reimbursable by those programs.  Allegedly, the reimported product included labeling in foreign languages and in English for additional uses not approved in the United States, which demonstrated that the product was reimported.  Moreover, because the product was reimported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately.  

“This scheme is yet another example of illegal actions by health care providers to profit from drugs imported into the United States,” said U.S. Attorney for the Eastern District of Tennessee William C. Killian.  “Medicare and FDA requirements are designed to prevent potential harm to patients.  Noncompliance with the law to increase profit at the risk of patients will be pursued by the Department of Justice.”
“Attempts to increase profits by circumventing the law will not be tolerated,” said Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta Derrick L. Jackson.  “Health care providers buying cut-rate, cheap drugs from foreign sources will end up paying a steep price.”

The allegations resolved by the settlement were first raised in a lawsuit filed against the clinics under the qui tam, or whistleblower, provisions of the False Claims Act by Douglas Estey, a physician’s assistant who was occasionally paid by Genzyme Corp. to speak to medical providers about the use of Synvisc.  The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  Estey will receive $323,750.

The government’s investigation was a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Tennessee, the Department of Health and Human Services Office of Inspector General and Office of General Counsel, the Food and Drug Administration Office of Criminal Investigations and Office of Chief Counsel, the Federal Bureau of Investigation and the Tennessee Bureau of Investigation.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $17.1 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The case is captioned United States ex rel. Estey v. Tennessee Orthopaedic Clinics P.C., Appalachian Orthopaedic Associates P.C. and Appalachian Orthopaedic Partners LLC, Docket No. 3:12-cv-85 Varlan/Guyton.  The claims settled by these agreements are allegations only; there have been no determinations of liability.  



A United Launch Alliance Atlas V rocket with NASA's Tracking and Data Relay Satellite (TDRS-L) spacecraft on board arrives at the launch pad at Cape Canaveral Air Force Station's Launch Complex 41. Liftoff is scheduled for Thursday, Jan. 23 at 9:05 p.m. EST, the opening of a 40-minute launch window.

Live coverage on NASA TV begins at 6:30 p.m. The TDRS-L spacecraft is the second of three new satellites designed to ensure vital operational continuity for NASA by expanding the lifespan of the Tracking and Data Relay Satellite System (TDRSS) fleet, which consists of eight satellites in geosynchronous orbit.

The spacecraft provide tracking, telemetry, command and high bandwidth data return services for numerous science and human exploration missions orbiting Earth. These include NASA's Hubble Space Telescope and the International Space Station. TDRS-L has a high-performance solar panel designed for more spacecraft power to meet the growing S-band communications requirements. TDRSS is one of NASA's three Space Communications and Navigation (SCaN) networks providing space communications to NASA missionsImage Credit: NASA/Daniel Casper

Friday, January 24, 2014


Friday, January 24, 2014
Four Alleged Members of Android Mobile Device App Piracy Groups Charged
First Time Members of Mobile Device App Piracy Groups Charged

Four individuals have been charged in the Northern District of Georgia for their alleged roles in piracy groups engaged in the illegal distribution of copies of copyrighted Android mobile device applications, or “apps.”

Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Acting Special Agent in Charge Ricky Maxwell of the FBI’s Atlanta Field Office made the announcement.

“These crimes involve the large-scale violation of intellectual property rights in a relatively new and rapidly growing market,” said Acting Assistant Attorney General Raman.  “While this represents the first counterfeit apps case by the Department of Justice, it exemplifies our longstanding commitment to prosecute those who steal the creative works of others.”

“Copyright laws are designed to protect creative thinkers and encourage them to use their talents in ways that benefit society,” said U.S. Attorney Yates. “These defendants are charged with violating the law by stealing copyrighted apps, thereby depriving the creators of the apps the fruits of their labor. We are committed to protecting copyright owners, and we will continue to vigorously prosecute those who steal all forms of copyrighted work.”

“The protection of intellectual property is the cornerstone of a free market that rewards innovation and forward thinking,” said FBI SAC Maxwell.   “The federal charges presented in this case illustrates the problems facing technology based companies in particular but also highlights the FBI and U.S. government response to those engaged in such wholesale criminal activity involving the piracy of copyrighted products.”

An information filed on Jan. 23, 2014, charges Kody Jon Peterson, 22, of Clermont, Fla., with one count of conspiracy to commit criminal copyright infringement.   A separate information filed today charges Thomas Allen Dye, 21, of Jacksonville, Fla.; Nicholas Anthony Narbone, 26, of Orlando, Fla.; and Thomas Pace, 38, of Oregon City, Ore., with one count of conspiracy to commit criminal copyright infringement.   Peterson was arraigned on Jan. 23, 2014, and Dye, Narbone and Pace were arraigned today.

According to the information filed yesterday, Peterson and his fellow conspirators identified themselves as the SnappzMarket Group.   From May 2011 until August 2012, Peterson conspired with other members of the SnappzMarket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps through the SnappzMarket alternative online market, without permission from the software developers and other copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee.

According to the information filed today, Dye, Narbone, Pace and their fellow conspirators identified themselves as the Appbucket Group.   From August 2010 to August 2012, defendants conspired with other members of the Appbucket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps through the Appbucket alternative online market without permission from the copyright owners of the apps.

The informations charge the SnappzMarket Group and the Appbucket Group with renting computer servers to host websites such as and , respectively, to provide digital storage for the pirated copies of copyrighted Android apps that each group distributed to their members or subscribers.   On Aug. 21, 2012, seizure orders were executed against these two website domain names for the illegal distribution of copies of copyrighted Android mobile device apps – the first time website domains involving mobile device app marketplaces have been seized.

The maximum prison sentence for the charge of conspiracy to commit criminal copyright infringement is five years in prison.

Charges contained in a criminal information are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The investigation of the case was conducted by the FBI.   Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia are prosecuting the case on behalf of the United States, with the assistance of Assistant U.S. Attorney Brian M. Pearce of the Northern District of Georgia.   The Office of International Affairs provided assistance in the matter.   Significant assistance in the case has also been provided by the CCIPS Cybercrime Lab.



Readout of the Panel Discussion with the U.S. Conference of Mayors

Thursday, Senior Advisor to the President Valerie Jarrett, Secretary of Labor Thomas Perez, Secretary of Housing and Urban Development Shaun Donovan, Secretary of Transportation Anthony Foxx, and Secretary of Education Arne Duncan participated in a panel discussion with over 250 mayors to discuss the President’s commitment to partnering with local communities and cities to promote opportunity for hardworking Americans across the nation.

During the discussion, the Cabinet Secretaries reiterated the Administration’s commitment to working hand in hand with mayors to identify ways to deliver the services in their cities to help people succeed. The Administration Officials said they looked forward to working with mayors this year on expanding educational and economic opportunity and investing in infrastructure.  The Administration continues to work with mayors across the nation to explore new ideas, identify best practices, and develop ways forward to build upon these partnerships at the federal level.

As part of President Obama’s commitment to making 2014 a year of action, Cabinet Secretaries and senior administration officials will be traveling across the country in the coming weeks to advance the President’s priorities of strengthening our economy, creating jobs, rewarding hard work, and building a strong middle class. Mayors throughout the nation have been invaluable partners in creating platforms for success in their communities, and the Obama Administration is committed to ensuring that the Federal government remains an active partner in supporting local priorities for communities across America.


Remarks by the President and the Vice President at U.S. Conference of Mayors Reception
East Room
January 23, 2014
5:30 P.M. EST

THE VICE PRESIDENT:  Well, welcome to the White House.  My name is Joe Biden.  I work for President Obama.  (Laughter.)  Best job I ever had.

Hey, folks, look, there's a reason the President and I like talking to mayors.  You're the one group of elected officials that get things done, in large part because you have no option but to get things done.  (Laughter.)  And also, most of the innovation is coming from you all.

Today, I got further evidence of that when I talked with a few of you about what we can do together on the jobs, skills and workforce development.  We promised, back in 2009, there would be -- we'd be a strong partner with you, and I'm confident in saying that because of the man I'm about to introduce, we've kept that promise.

President Obama understands cities better than most American presidents have in American history.  He knows cities face unique challenges when it comes to building infrastructure and creating jobs, and that’s why he nominated a big city mayor, Anthony Foxx -- he doesn’t have all the money in the world, but he's ready to help.

And also, I've gotten a chance to work directly with so many of you during the Recovery Act.  The only reason it worked, the only reason there was less than 1 percent waste or fraud -- including with our Republican friends who investigated -- is because of you.  You made it work.  You're used to getting things done on time -- mostly under budget -- and getting answers back to people immediately.  And it never ceases to amaze me the tough political decisions, you guys and women, you make every single day in doing your job -- to save your neighborhoods, to rebuild and balance your budgets, and to bring jobs back to your communities.

So I'm honored to have you here, we're honored to have you here.  And I'm really honored to introduce the best friend the cities have ever had in this White House, President Barack Obama.  (Applause.)

THE PRESIDENT:  Thank you so much.  Thank you, everybody.  (Applause.)  Thank you.  Please have a seat.

Well, welcome to the White House.  It is great to have you.  For those of you who have been here before, welcome back.  I see a lot of friends and a lot of familiar faces around the room, but I've also already had a chance to meet some newly elected mayors.  So to all of you, congratulations -- and make sure you're shoveling the snow.  (Laughter.)  Just a little piece of advice.  It's been cold.

We've got more than 250 mayors here from more than 45 states and territories.  You represent about 40 million Americans.  And over the last five years, thanks in part to the partnerships that we've been able to forge with mayors in this room and across the country, we've accomplished some big things on behalf of the American people.

But you know as well as anybody that while our economy is growing stronger, and we are optimistic about growth this year and in subsequent years, we've got a lot more work to do to make sure that everybody has a chance to get ahead.  If they're willing to work hard and take responsibility, they've got to be able to participate in that growth.  And every day, mayors are proving that you don’t have to wait for the gridlock to clear in Congress in order to make things happen.

Now, Mayor Greg Stanton in Phoenix and Mayor Ralph Becker in Salt Lake City have ended chronic homelessness among veterans.  (Applause.)  In San Antonio, Mayor Castro has launched an early childhood education program designed to reach more than 22,000 four year olds over the next eight years.  In Fresno, Mayor Ashley Swearengin is spearheading projects to develop her city's downtown, including a high-speed rail station that's going to help attract jobs and businesses to the Central Valley.  In Philadelphia, Mayor Nutter is helping young people reach higher during their summers by working with partners across the city to create thousands of summer jobs.  In Tampa, Mayor Bob Buckhorn has gone, in his words, "all in," helping his constituents get covered with quality, affordable health insurance.

So mayors from both parties are a part of the climate task force, helping to make sure that cities have what it takes to withstand changes that may be taking place in our atmosphere in the years to come.  More than a thousand mayors across America have signed agreements to cut dangerous carbon pollutions.  I want to work with Congress whenever and wherever I can, but the one thing I'm emphasizing to all my Cabinet members is we're not going to wait.  Where Congress is debating things and hasn't been able to pull the trigger on stuff, my administration is going to move forward and we're going to do it in partnership with all of you.  I've got a pen and I've got a phone.  And that's all I need.  (Applause.)

Because with a pen I can take executive actions.  With a phone I can rally folks from around the country to help grow the economy and restore opportunity.  And that's what today, hopefully, has been about.  You've met with members of the administration.  You've gotten to know each other, but also, hopefully, they've given you some insight into where we see the most promising programs, things that are working, best practices.  And we want to cooperate and coordinate with you as effectively as we can to make sure that whatever works is getting out there and hitting the streets and actually having an impact on people's lives.  And, frankly, there are a lot of things that folks in this town could learn from all of you.

And I want to close by personally saying how much it means to me to have you here today.  As Joe mentioned, I know a little something about cities.  I got my professional career started as somebody working in some of the toughest neighborhoods in Chicago.  But I also saw how hard work can transform communities block by block, neighborhood by neighborhood.  And to see the resilience and the strength of people, and the incredible vibrancy that cities bring to not just those who live within the boundaries of cities but entire regions, that's what you understand.  And I want to make sure that I've got your back in everything that you do.

So I want to say thank you to all of you for making sure that your constituents are well-served.  But, as a consequence, America is well-served.




AMEC Environment and Infrastructure Inc., Plymouth Meeting, Pa. (W9133L-14-D-0002); CH2M Hill Inc, Atlanta, Ga., (W9133L-14-D-0003); AECOM Technical Services Inc. Alexandria, Va., (W9133L-14-D-0001); EA Engineering, Science And Technology Inc.*, Hunt Valley, Md., (W9133l-14-D-0004); Earth Resources Technology Inc.*, Laurel, Md., (W9133l-14-D-0005); J. M. Waller Associates Inc.*, Fairfax, Va., (W9133l-14D-0006); SAIC, McLean, Va., (W9133l-14-D-0007); Tec-Weston Joint Venture, Charlottesville, Va., (W9133L-14-D-0008); Tetra Tech, Inc., Pittsburgh, Pa., (W9133l-14-D-0009); URS Group Inc., Herndon, Va., (W9133L-14-D-0010) were awarded a $243,000,000 firm-fixed-price contract for environmental engineering support services.  Funding and location will be determined with each order.  Estimated completion date is Jan. 23, 2017.  Bids were solicited via the Internet with 21 received.  National Guard Bureau, Arlington, Va., is the contracting activity.

General Dynamics C4 Systems, Orlando, Fla., was awarded a $48,000,000 modification (P00014) to contract W900KK-10-D-0001 to continue the existing project manager for training devices live training transformation product line until the next consolidated product line management award.  Funding and location will be determined with each order.  Estimated completion date is Feb. 28, 2015.  Army Program Executive Office Simulation, Training and Instrumentation, Orlando, Fla., is the contracting activity.

Five Stones Research Corp.*, was awarded a $43,653,541 cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract for headquarters and directorate support services for the Army Test and Evaluation Command, Redstone Test Center.  Funding and location will be determined with each order.  Estimated completion date is Jan. 31, 2019.  Sixty-three bids were solicited with six received.  Army Contracting Command, Redstone Arsenal, Ala., is the contracting activity (W31P4Q-14-D-0002).

Arcadis Inc., Highlands Ranch, Colo., (W912DR-14-D-0003); Nova Consulting Inc.*, Washington, D.C., (W912DR-14-D-0004); CH2M Hill Inc., Chantilly, Va., (W912DR-14-D-0005); Black and Veatch Inc., Overland Park, Kan., (W912DR-14-D-0006) were awarded a $9,900,000 firm-fixed-price contract for architectural and engineering services for the Washington Aqueduct.  Funding and location will be determined with each order.  Estimated completion date is Jan. 23, 2017.  Bids were solicited via the Internet with six received.  Army corps of Engineers, Baltimore, Md., is the contracting activity.


Northrop Grumman Guidance and Electronics Company Inc., Woodland Hills, Calif., has been awarded a $200,000,000 indefinite-delivery/indefinite-quantity contract to perform acquisition and sustainment for the Embedded Global Positioning System Inertial Navigation System (EGI).  The acquisition and sustainment will consist of platform integration, modernization, diminishing manufacturing sources, flight test support, technical support following integration efforts, training, engineering support/studies, contractor depot repair, spares, and data for the standard EGI.   Work will be performed at Woodland Hills, Calif., and is expected to be complete by Dec. 31, 2018.  This award is the result of a sole-source acquisition.  This contract allows for orders to support foreign military sales countries; it is estimated that unclassified FMS sales will account for approximately 45 percent of the total contract ceiling.  Contract contains five ordering periods in total.  The first order placed against this IDIQ contract will obligate $2,027,004 of FMS funding in support of unclassified Iraq EGI sales and $722,192 of FMS funding in support of unclassified Thailand EGI sales.  Air Force Life Cycle Management Center/WNKCB, Robins Air Force Base, Ga., is the contracting activity (FA8540-14-D-0001).

B3H Corp., Shalimar, Fla., has been awarded a $6,856,100 firm-fixed-price task order (SK02) for an existing contract (FA4890-12-D-0014) for English language instructors and an English language training program using Defense Language Institute English Language Center courseware, methodology and processes.  This modification provides for the exercise of the first option year.  Work will be performed at King Abdul Aziz Air Base, Dhahran, and is expected to be completed by Jan. 31, 2015.  This contract is 100 percent foreign military sales for the government of Saudi Arabia.  338 SCONS, Joint Base San Antonio, Texas, is the contracting activity.


Lockheed Martin Corp., Orlando, Fla., has been awarded a $20,618,247 modification to cost-plus-fixed-fee contract HR0011-09-C-0096 to perform risk reduction and technical maturity efforts associated with the Long Range Anti-Ship Missile program, design to engineering, manufacturing and development phase.  The contractor will execute Systems Requirement Review 2 and support a preliminary design review.  Lockheed will conduct demonstration and performance assessment of all subsystems through testing, analysis, simulation and analogy.  Work will be performed in Orlando, Fla., (69.92 percent); Nashua, N.H., (26.35 percent) and Palm Bay, Fla., (3.73 percent).  The estimated completion date is Dec. 31, 2014.  Fiscal 2013 research and development funds are being obligated at time of award.  The contracting activity is DARPA, Arlington, Va.

Goodrich Corp., Jacksonville, Fla., has been awarded a $7,598,764 cost contract for engineering design services and fabrication of a full scale prototype submarine rotor component under the Hybrid Demonstration program.  Work will be performed in Jacksonville, Fla., (38 percent); Groton, Conn., (13 percent); Arvonia, Va., (17 percent) and Huntsville, Ala., (32 percent).  The estimated completion date is April 15, 2015.  Fiscal 2013 research and development funds are being obligated at time of award.  The contracting activity is DARPA, Arlington, Va., (HR0011-14-C-0054).


Wolf Creek Federal Services Inc.*, Anchorage, Alaska, is being awarded a $12,960,577 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for housing operations and maintenance services and change of occupancy maintenance services at Naval Base Guam and Andersen Air Force Base, Commander Joint Region Marianas.  The contract contains four option years, which if exercised, would bring the contract value to $95,323,477.  Work will be performed in Santa Rita, Guam (60 percent) and Yigo, Guam (40 percent), and is expected to be completed by October 2014.  Fiscal 2014 family housing operation and maintenance, Navy; fiscal 2014 quarter operations, Navy; fiscal 2014 sustainment, Navy; and fiscal 2014 family housing operation and maintenance, Air Force contract funds in the amount of $8,362,773 are obligated on this award and will expire at the end of the current fiscal year.  This contract was competitively procured via the Federal Business Opportunities Online website, with three proposals received.  The Naval Facilities Engineering Command Marianas, Guam, is the contracting activity (N40192-14-D-9000).

Patriot Contract Services LLC, Concord, Calif., is being awarded a $7,236,660 modification under a previously awarded firm-fixed price contract (N0003-10-C-5301) to exercise a one-year option period for the operation and maintenance of four large, medium-speed, roll-on/roll-off ships.  These four ships support the deployed military forces worldwide.  Work will be performed worldwide at sea and is expected to be completed by January 2015.  Working capital contract funds in the amount of $7,236,660 are obligated for fiscal 2014, and will expire at the end of the current fiscal year.  The U.S. Navy’s Military Sealift Command, Washington, D.C., is the contracting activity.


CORRECTION:  The contract modification announced Jan. 22, 2014 had incorrect dollar values associated with the award and obligated amounts.  The correct amounts are:  Lockheed Martin Space Systems Co. (LMSSC) of Huntsville, Ala., was awarded a $31,674,868 modification (P00004) to firm-fixed-price and cost-plus-fixed-fee contract HQ0147-14-C-0004 to provide highly specialized services to support Ballistic Missile Defense System flight test activities using LMSSC developed target hardware.  The work will be performed at several LMSSC facilities, and government test sites and is expected to be completed Dec. 31, 2014.  Fiscal 2014 research, development, test and evaluation funds in the amount of $6,582,845 are being obligated at time of award.  The Missile Defense Agency, Huntsville, Ala., is the contracting activity.

*Small Business


President Obama Announces Key White House Posts

WASHINGTON, DC – Today, President Obama announced the following individuals will serve in key White House posts:

David Simas, Assistant to the President and Director of the Office of Political Strategy and Outreach

Broderick Johnson, Assistant to the President and Cabinet Secretary

Amy Brundage, Deputy Assistant to the President and Deputy Communications Director

Anne Wall, Deputy Assistant to the President for Legislative Affairs & Senate Liaison

Amy Rosenbaum, Deputy Assistant to the President for Legislative Affairs

President Obama said, “Ed Pagano is a true public servant, and I am grateful to him for his tireless work on behalf of the American people.  Ed’s strong relationships with leaders in the Senate, his experience, his commitment, and his ability to forge consensus and get things done have made this country stronger.  I wish Ed all the best in his future endeavors.

The American people will be greatly served by the talent and dedication that David, Broderick, Amy, Anne and Amy bring to their new roles. I look forward to working with them in the months and years ahead as we continue to move our country forward.”


Remarks at the World Economic Forum
John Kerry
Secretary of State
Davos, Switzerland
January 24, 2014

Well, Klaus, thank you very, very much. It’s an enormous pleasure for me to be back in Davos and to have this opportunity to be able to share some thoughts with all of you about American foreign policy. And I have – as Klaus just said to you all, I have had the privilege of being here many times over the past 20 years. I always appreciate the diversity of thought and the thirst for new ideas that really characterizes this forum. It’s safe to say that Davos pushes the limits of thinking, tries hard to find the new thinking, and that’s really what makes this forum so special. So Klaus, I congratulate you on many, many years of putting together a really remarkable venue for everybody.

Today, I want to share our latest thinking with respect to the role that U.S. diplomacy can play in addressing some of the most pressing foreign policy challenges that we face in an obviously extraordinarily complex, very different world from the world of the last century.

I must say I am perplexed by claims that I occasionally hear that somehow America is disengaging from the world, this myth that we are pulling back or giving up or standing down. In fact, I want to make it clear today that nothing could be further from the truth. This misperception, and in some case, a driven narrative, appears to be based on the simplistic assumption that our only tool of influence is our military, and that if we don’t have a huge troop presence somewhere or we aren’t brandishing an immediate threat of force, we are somehow absent from the arena. I think the only person more surprised than I am by the myth of this disengagement is the Air Force pilot who flies the Secretary of State’s plane.

Obviously, our engagement isn’t measured in frequent flier miles – though it would be pretty nice if I got a few, as a matter of fact – but it is really measured – and I think serious students of foreign policy understand this – it is measured by the breadth of our global commitments, their depth, especially our commitments to our allies in every corner of the world. It is measured by the degree of difficulty of the crises and the conflicts that we choose to confront, and it is measured ultimately by the results that we are able to achieve.

Far from disengaging, America is proud to be more engaged than ever, and, I believe, is playing as critical a role, perhaps as critical as ever, in pursuit of peace, prosperity, and stability in various parts of the world.

Right here in Europe, we are working with our partners to press the Government of Ukraine to forgo violence, to address the concerns of peaceful protesters, to foster dialogue, promote the freedom of assembly and expression. And I literally just received messages before walking in here of the efforts of our diplomats on the ground working with President Yanukovych to try to achieve calm and help move in this direction in the next days. We will stand with the people of Ukraine.

We’re also making progress towards finalizing the Transatlantic Trade and Investment Partnership, which would link the world’s largest market, the EU, with the world’s single largest economy, the United States, raising standards and creating jobs on both sides of the Atlantic.

In the Asia Pacific region, we are negotiating the Trans Pacific Partnership, which will similarly encourage a race to the top, not the bottom, as it unifies 40 percent of the world’s economy. The United States is working extremely closely with China and our allies in the region in order to address North Korea’s reckless nuclear program, and also on diplomatic priorities like disaster relief and development. I was recently in the Philippines, and in a few weeks, I will be back in Asia, my fifth trip as Secretary of State within a year. We are working with our ASEAN partners to discourage escalatory steps and conflict in the South China Sea. And this is a critical part of the President’s rebalance to Asia.

Across Africa, the home to seven of the world’s 10 fastest-growing economies, we are investing heavily in both development and trade. And in the Great Lakes region, we just recently helped end an armed rebellion, demobilizing the M23 armed group. And just yesterday, thanks to our diplomatic intense engagement on the ground, we have helped to achieve a ceasefire in South Sudan. And I can tell you that almost every day during the so-called Christmas break, I was on the phone to either President Kiir or to former Vice President Riek Machar or to the prime minister of Ethiopia or President Museveni of Uganda as we worked diligently to try to move towards peace.

Closer to home, we just completed a U.S.-Canada-Mexico summit in Washington last week in preparation for our leaders who will focus on increased cooperation in our hemisphere, a North American effort for renewed entrepreneurship, renewable energy, and educational exchanges.

So after a decade that was perhaps uniquely, and in many people’s view, unfortunately, excessively defined foremost by force and our use of force, we are entering an era of American diplomatic engagement that is as broad and as deep as any at any time in our history. And such are the responsibilities of a global power.

The most bewildering version of this disengagement myth is about a supposed retreat by the United States from the Middle East. Now, my response to that suggestion is simple: You cannot find another country – not one country – that is as proactively engaged, that is partnering with so many Middle Eastern countries as constructively as we are on so many high-stake fronts. And I want to emphasize that last point: partnering. We have no pretense about solving these problems alone. Nor is anyone suggesting, least of all me, that the United States can solve every one of the region’s problems or that every one of them can be a priority at the same time.

But as President Obama made clear last fall at the United Nations, the United States of America will continue to invest significant effort in the Middle East because we have enduring interests in the region, and we have enduring friendships with countries that rely on us for their security in a volatile neighborhood. We will defend our partners and our allies as necessary, and we will continue to ensure the free flow of energy, dismantle terrorist networks, and we will not tolerate the proliferation of nuclear weapons.

Now in reality, all three of these challenges and the relationships that surround them and accomplishing all of these goals requires, in President Obama’s words, for the United States to “be engaged in the region for the long haul.”

From security cooperation with our Gulf partners like Saudi Arabia and the United Arab Emirates, with whom we are both discussing longer-term security framework for the region, as well as to helping countries in transition like Tunisia, Libya, Egypt, Yemen, to countering al-Qaida and its affiliates, to ensuring stability for the world’s shipping lanes and energy supply, there is no shortage of the places where we are engaged in the Middle East.

So the question isn’t whether we’re leaving. The question is how we are leading. Today, we believe that there are initiatives that, taken together, have the potential to reshape the Middle East and could even help create the foundations of a new order.

First, the agreement that we reached with Iran. As of this week, Iran’s nuclear weapons program is being rolled back in important ways. On Monday, Iran took a series of steps that the world has long demanded, including reducing its stockpile of 20 percent enriched uranium, disabling the infrastructure for its production, and allowing unprecedented transparency and monitoring to guarantee Iran is complying with the agreement.

They will have to reduce their 20 percent to zero, and they do not have and will not have the capacity for reconversion. They will have to reduce it to forms that are not suitable for making weapons. Iran must also halt enrichment above 5 percent and it will not be permitted to grow the current stockpile of 3.5 percent enriched uranium. Iran cannot increase the number of centrifuges that are in operation, and it cannot install or use any next-generation centrifuges to enrich uranium. And while we negotiate a final agreement over these next months, Iran will not be permitted to take any steps to commission the Arak plutonium reactor.

Now clearly, there are good reasons to ask tough questions of Iran going forward – and believe me, we will – and good reasons to require that the promises Iran made are promises kept. Remember – we certainly haven’t forgotten – there is a reason that world has placed sanctions on Iran. There’s a reason why they exist in the first place. And there’s a reason why the core architecture of those sanctions remains in place. And that is why this effort is grounded not in trusting, not in words, but in testing. And that is why now inspectors can be at Fordow every day.

That wasn’t the case before the agreement we struck. Inspectors can now also be at Natanz every day. That’s also new, thanks to the agreement we struck. And inspectors will visit Arak plutonium plant every month, and they are under an obligation to deliver the plans for that plant to us.

Taken altogether, these elements will increase the amount of time that it would take for Iran to break out and build a bomb – the breakout time, as we call it – and it will increase our ability to be able to detect it and to prevent it. And all of this will to an absolute guarantee beyond any reasonable doubt make Israel safer than it was the day before we entered this agreement, make the region safer than it was the day before we entered this agreement, and make the world safer than it was.

Now yesterday, President Rouhani stood here and he said that Iran is eager to engage with the world, and hopefully. But Iran knows what it must do to make that happen. He told you that Iran has no intention of building a nuclear weapon. Well, while the message is welcome, my friends, the words themselves are meaningless unless actions are taken to give them meaning. Starting now, Iran has the opportunity to prove these words beyond all doubt to the world.

Now, let’s be clear: If you are serious about a peaceful program, it is not hard to prove to the world that your program is peaceful. For sure, a country with a peaceful nuclear program does not need to build enrichment facilities in the cover of darkness in the depth of a mountain. It doesn’t need a heavy water reactor designed to produce weapons-grade plutonium, like the one at Arak. It has no reason to fear intrusive monitoring and verification. And it should have no problem resolving outstanding issues with the International Atomic Energy Agency.

This is true for every country in the world with an exclusively peaceful nuclear program. And it is the tough but reasonable standard to which Iran must also be held.

So we welcome this week’s historic step. But now the hard part begins, six months of intensive negotiations with the goal of resolving all the international community’s concerns about Iran’s nuclear program. I want to say that the P5+1 has acted in unity, in great cooperation, and we welcome the international community’s efforts that has characterized this initiative.

So Iran must meet this test. If it does, the Middle East will be a safer place, free from the fear of a nuclear arms race. And diplomatic engagement, my friends, backed by sanctions and other options, will have proved its worth.

The second challenge is Syria, where an enormous, almost unimaginable human tragedy is unfolding before our eyes. Just this week, we have seen the terrible new evidence of torture at the hands of the Assad regime. But this week we also saw the Syrian regime and the opposition sit at the same table in the same room – or separate tables but in the same room – for the first time since the war began. They were joined by more than 40 countries and institutions who have assented to the Geneva communique, which clearly outlines how this conflict must conclude: With the creation of a transitional government with full executive authority by mutual consent.

Let me tell you in simple terms why that means Bashar al-Assad cannot be part of that future. It is simple. It is first because of the extraordinary havoc that he has wreaked on his own country, on his own people; a man who has killed university students and doctors with Scud missiles; a man who has gassed his own people in the dead of night – families sleeping, women, children, grandparents; a man who has unleashed extraordinary force of artillery and barrel bombs against civilians against the laws of warfare. Assad will never have or be able to earn back the legitimacy to bring that country back together.

That’s number one. But number two, because of those things that he has done, because of 130,000 people who have been killed, the opposition will never stop fighting while he is there. And so if your objective is to have peace, this one man must step aside in favor of peace and of his nation. You can never achieve stability until he is gone. And finally, any transitional government formed by mutual consent by definition will not include Assad because the opposition will never consent to permit him to be there.

The United States is engaged in this difficult endeavor because we know that the longer the fighting continues, the greater the risk that Syria’s sectarian divisions will spiral out of control. We know there are people who wish that American young men and women who were on the ground fighting for them – there are people who would love to see America fight the war for them. But that is not the choice.

The choice is first diplomacy in order to avoid the devastating results that could result in the disintegration of the Syrian state, and the instability that could spread across the entire region. We are engaged because the number of refugees pouring into Jordan – I see our friend Nasser Judeh, the foreign minister here – into Lebanon, and Turkey is destabilizing and it’s unsustainable.

We are engaged because, while we are proud to be the largest contributor to the humanitarian assistance to deal with those refugees, the ultimate solution can only come when we stop the supply of refugees, when we stop the fighting. And that can’t happen soon enough because Assad continues to kill and displace innocent Syrians, and in doing so has become the world’s greatest single individual magnet for jihad and terror.

Absent a political solution, we know where this leads: more refugees, more terrorists, more extremism, more brutality from the regime, more suffering for the Syrian people. And we do not believe that we or anyone should tolerate one man’s brutal effort to cling to power. We must instead empower all of the Syrian people.

That is why the United States and our partners who sat around that table this week will continue to fight for a pluralistic, inclusive Syria where all minorities are protected, where all rights are protected, and where Syria can come together to be once again the secular and unified state that it was, represented by a government of the people’s choice where all minorities are protected.

Now, we believe this vision is achievable, and we will continue to work closely with our partners for a new Syria that can exist peacefully as a sovereign, independent, and democratic state where Syrians will be able to able have their voices heard without fear of retribution, imprisonment, or even death.

Now obviously, we know this isn’t going to be easy. In fact, it’s obviously very, very hard. It’s already hard. But we’ve already seen in Syria what forceful diplomacy is able to achieve. As we speak, a man who, the day before he agreed to do it, denied he even had the weapons, is now removing all the chemical weapons from that country. As we speak, the international community is on its way to completely removing all of Syria’s chemical weapons, an unprecedented undertaking that is making the region and the world safer and is setting an example on a global basis.

We are convinced that if the Syrian people are to have the chance to rebuild their country and if millions of Syrian refugees are to have the chance to return home, it is ultimately diplomacy that will make it possible. There is no military solution to the problem of Syria.

And that brings me to the most intractable of all conflicts: the struggle to make peace between Israelis and Palestinians. Every time I meet my foreign counterparts, anywhere in the world – when they visit me in Washington or when I travel to their countries – I am not kidding you when I tell you that invariably the first issue that they ask me about is the challenge of Middle East peace. It may seem improbable to you, but I’m telling you it’s absolutely true. From Asia to Latin America to Africa, all through Europe, this question lingers. This intractable conflict has confounded administration after administration, prime minister after prime minister, leaders, and peacemakers. And they always ask this about the Middle East even before they complain about what we’re doing or not doing, ironically.

Despite this global interest, my friends, people still ask me – I’m astonished by it – why, with all the troubles in the world, and in the Middle East in particular, why is the Obama Administration so focused on trying to forge Israeli-Palestinian peace? And obviously, I’ve had that question directed at me in personal and in other ways. Well, the reason that we are so devoted to trying to find a solution is really very simple: Because the benefits of success and the dangers of failure are enormous for the United States, for the world, for the region, and most importantly, for the Israeli and Palestinian people. After all the years expended on this, the last thing we need is a failure that will make certain additional conflict.

There are some people who assert this may be the last shot. I don’t know the answer to that. I don’t want to find out the hard way. But I want you to consider what happens if talks fail. For Israel, the demographic dynamic will make it impossible to preserve its future as a democratic, Jewish state. Israel’s current relative security and prosperity doesn’t change the fact that the status quo cannot be sustained if Israel’s democratic future is in fact to be secured. Today’s status quo, my friends, I promise you will not last forever.

President Abbas is committed to negotiation and to nonviolence. But failure will only embolden extremists and empower hardliners at the expense of the moderates who have been committed to a nonviolent track to try to find peace. And what would happen in the West Bank without that commitment to nonviolence?

The Israeli and Palestinian members of Breaking the Impasse initiative who are here today know well what is at stake. Israel’s economic juggernaut is a wonder to behold. Prime Minister Netanyahu was able to talk to you about it here today. But a deteriorating security environment and the growing isolation that could come with it could put that prosperity at risk.

Meanwhile, if this fails, Palestinians will be no closer to the sovereignty that they seek, no closer to their ability to be the masters of their own fate, no closer to their ability to grow their own economy, no closer to resolving the refugee problem that has been allowed to fester for decades. And if they fail to achieve statehood now, there is no guarantee another opportunity will follow anytime soon.

This issue cannot be resolved at the United Nations. It can only be resolved between the parties. If peace fails, the region risks another destabilizing crisis. One unilateral act from one side or the other will beget another, and yet another, and another, until we have fallen yet again into a dangerous downward spiral at a time where there’s already too much danger in the region.

And you know what’s interesting? We often spend so much time talking about what both parties stand to lose without peace that we actually sometimes forget to talk enough about what they stand to gain from peace. I believe that the fact that peace is possible, especially in a region with so much tension and turmoil, ought to motivate people.

Palestinians stand to gain, above all else, an independent, viable, contiguous state, their own place among the community of nations. Imagine this time next year here in Davos if Palestinian businessmen and government leaders from the state of Palestine are able to pitch the world’s largest investors a host of projects from the Palestinian Economic Initiative. And imagine if they could be invited to participate in building a new state with new jobs, new infrastructure, and a new life free from occupation.

And for Israel, the benefits of peace are enormous as well, perhaps even more significant. For starters, no nation on earth stands to gain so many new economic partners so quickly as Israel does, because 20 additional members – nations of the Arab League and 35 Muslim countries stand ready under the Arab Peace Initiative to all recognize Israel and normalize relations the moment a peace agreement is reached.

As Sheikh Abduallah bin Zaid said at a meeting of the foreign ministers of the Arab League, which we held in Paris a few months ago, he said to his minister colleagues – completely spontaneously, unexpected from me, he said, “You know what? After peace, Israel will enjoy greater economic benefit from relations with the Gulf than it now enjoys with Europe.” That’s the foreign minister of the United Arab Emirates.

Just imagine what that would mean for commerce and trade. Stanley Fischer, the former governor of the Bank of Israel who President Obama has nominated to serve on our own Federal Reserve Board, said that a peace agreement with the Palestinians could boost Israel’s GDP by as much as 6 percent a year.

And together, the Jewish state of Israel and the Arab state of Palestine can develop into an international hub for technology, for trade, tourism – tourism, unbelievable tourism, the holy sites of the world, of the major three religions. This would invigorate a region. It is long past time that the people of this great and ancient part of the world became known for what they can create, not for the conflicts that they can perpetrate. It is long past time that Jerusalem – the crucible of the world’s three great monotheistic religions – becomes known not as the object of constant struggle, but as the golden city of peace and unity, embodying the aspirations of Israelis and Palestinians alike.

The truth is that after decades of struggling with this conflict, we all know what the endgame looks like: an independent state for Palestinians wherever they may be; security arrangements for Israel that leave it more secure, not less; a full, phased, final withdrawal of the Israeli army; a just and agreed solution to the Palestinian refugee problem; an end to the conflict and all claims; and mutual recognition of the nation-state of the Palestinian people and the nation-state of the Jewish people.

That is our destination. And the real challenge is not what is it; it’s just how to get there – how to get the leaders and the body politic of both places to make the courageous decisions necessary to embrace what would be fair and what would work. That’s why I am working with President Abbas and with Prime Minister Netanyahu to achieve a framework for the negotiations that will define the endgame and all the core issues, and provide guidelines for the negotiators in their efforts to achieve a final-status peace agreement.

I have watched over 30 years in the United States Senate. I was on the lawn in Washington when the great handshake took place. I’ve watched Annapolis and Wye and Madrid and Oslo and all of these efforts, but always we’ve left out the endgame. Always, people have had to wonder when or if the real peace could be achieved.

One of the biggest challenges in reaching this agreement, I will tell you, my friends, is security. The Palestinians need to know that at the end of the day, their territory is going to be free of Israeli troops, that occupation ends; but the Israelis rightfully will not withdraw unless they know that the West Bank will not become a new Gaza. And nobody can blame any leader of Israel for being concerned about that reality. We have been working hard on addressing this challenge. President Obama’s approach begins with America’s steadfast commitment to Israel’s security. He knows and I know that there cannot be peace unless Israel’s security and its needs are met.

We have put the full range of resources of the U.S. Government behind this effort in an unprecedented way. For the past nine months, a team led by General John Allen – a four-star general and one of the most respected minds in the U.S. military – has been engaged in a comprehensive security dialogue with our Israeli and Palestinian counterparts.

Based on his efforts, we are confident that, together with Israel, working with Jordan, working with the Palestinians, working with us, all of us together can create a security structure that meets the highest standards anywhere in the world. And by developing a layered defense that includes significantly strengthening the fences on both sides of the border, by deploying state-of-the-art technology, with a comprehensive program of rigorous testing, we can make the border safe for any type of conventional or unconventional threat, from individual terrorists or a conventional armed force. We are well aware that technology alone is not the answer, but we also know that it can play a key role in helping to secure the Jordanian border, just like Iron Dome has played a key role in securing Israel’s southern communities.

Security is a priority because we understand that Israel has to be strong to make peace, but we also believe that peace will make Israel stronger. We are convinced that the greatest security of all will actually come from a two-state solution that brings Israel the lasting peace and secure borders that they deserve, and brings Palestinians the freedom and the dignity that they deserve.

As committed as we are, it is ultimately up to the Israelis and the Palestinians to reach an agreement on how to end this conflict. Make no mistake: this will require difficult political decisions and painful compromises on both sides. These are emotional issues, many embedded in age-old narratives. At the end of the day, it is up to Prime Minister Netanyahu and President Abbas to recognize what the world has recognized: that peace is in the best interests of their people. But that makes it no less true that at every level, everybody has a role to play. The Arab League and the European Union have already shown how they can pave the way for peace, and they have been unbelievably cooperative, and we’re grateful for their help. I thank King Abdullah of Jordan and Nasser Judeh and the extraordinary efforts of Jordan to help move this; the Arab League Nabil Elaraby, and Khalid Atiyah, the leader of the Arab League Follow-On Committee that is working month to month to stay current and to be engaged in this.

Many states have made contributions to the Palestinian economy, including a micro-infrastructure initiative that is making a difference to people’s everyday lives. Many companies, including some of you here, have invested in both Israel and the Palestinian territories, and you’ve shown the difference that the private sector can make in this endeavor. And all of you can make a positive contribution by dismissing, please, the all-too-easy skepticism by seeing the possibilities and by building the momentum for peace.

Successful diplomacy, like the conversations here at Davos, demands the kind of cooperation that has to come from many stakeholders. As Klaus Schwab says, in an interconnected world, all challenges must be addressed on the basis of togetherness. That is true, whether you’re talking about this peace effort or about what we must achieve in Syria, or about what we must ensure in Iran. Intensive, creative, strong diplomacy requires cooperation, and that is exactly why the United States is so engaged in the Middle East and around the world, and why we will stay so.

As our friends and partners take courageous steps forward, they can be assured that President Obama and his Administration will remain engaged for the long haul. But we will also confront these challenges with the urgency that they deserve. We dare not, and I sure you, we will not miss this moment.

Thank you. (Applause.)



In the week ending January 18, the advance figure for seasonally adjusted initial claims was 326,000, an increase of 1,000 from the previous week's revised figure of 325,000. The 4-week moving average was 331,500, a decrease of 3,750 from the previous week's revised average of 335,250.

The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending January 11, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 11 was 3,056,000, an increase of 34,000 from the preceding week's revised level of 3,022,000. The 4-week moving average was 2,939,000, an increase of 31,000 from the preceding week's revised average of 2,908,000.


The advance number of actual initial claims under state programs, unadjusted, totaled 411,678 in the week ending January 18, a decrease of 121,020 from the previous week. There were 436,955 initial claims in the comparable week in 2013.

The advance unadjusted insured unemployment rate was 2.8 percent during the week ending January 11, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,563,268, a decrease of 65,558 from the preceding week. A year earlier, the rate was 2.9 percent and the volume was 3,711,100.

The total number of people claiming benefits in all programs for the week ending January 4 was 3,706,087, a decrease of 1,003,734 from the previous week. There were 5,659,482 persons claiming benefits in all programs in the comparable week in 2013.

No state was triggered "on" the Extended Benefits program during the week ending January 4.

Initial claims for UI benefits filed by former Federal civilian employees totaled 2,227 in the week ending January 11, an increase of 661 from the prior week. There were 2,449 initial claims filed by newly discharged veterans, an increase of 704 from the preceding week.

There were 23,306 former Federal civilian employees claiming UI benefits for the week ending January 4, an increase of 466 from the previous week. Newly discharged veterans claiming benefits totaled 31,591, an increase of 567 from the prior week.

The Emergency Unemployment Compensation (EUC) program expired on January 1, 2014, and under current law no EUC payments will be made for weeks of unemployment after this date.

The highest insured unemployment rates in the week ending January 11 were in Alaska (5.8), Puerto Rico (4.9), Pennsylvania (4.5), Connecticut (4.4), New Jersey (4.4), Michigan (3.8), Montana (3.8), Wisconsin (3.8), Rhode Island (3.6), California (3.5), Illinois (3.5), and Massachusetts (3.5).

The largest increases in initial claims for the week ending January 11 were in Texas (+12,800), California (+8,319), Pennsylvania (+7,107), Indiana (+6,622), and Florida (+5,790), while the largest decreases were in New York (-18,019), Georgia (-7,278), Alabama (-2,639), Wisconsin (-2,577), and South Carolina (-1,810).


FTC Charges Email Spammer with Tricking Consumers With Phony Information About the Affordable Care Act

The Federal Trade Commission is taking action against a website operator that allegedly tricked consumers – in advance of the roll-out of the Affordable Care Act (ACA) – with spam emails that falsely claimed that consumers would be violating the ACA if they did not immediately click a link to enroll in health insurance.

The case against Kobeni Inc. and its president, Yair Shalev, is the first the agency has brought alleging ACA-related fraud.  According to the FTC’s complaint, from at least May 2013 through August 2013, the defendants sent consumers email with statements such as:

Today is the deadline to make your election or be in violation of federal law

Must Receive Your Election Or You Will Be In Violation of Federal Law.

Effective Monday (08-05-13) health coverage is REQUIRED BY LAW.

Why is this mandatory? New Federal Law signed by the President made it mandatory for all U.S. residents to have active coverage.  You will be in violation and face penalties if you do not elect.

You Must Select One of These 5 Options

As stated in the complaint, links in the email messages led to websites with advertisements for insurance.  The websites’ operators paid the defendants when consumers clicked links contained in the ads.  Insurance companies whose ads appeared on the websites did not authorize the email messages.

The FTC charges the defendants with violating the FTC Act by falsely representing that consumers would violate federal law if they did not select health insurance by the dates that appeared in their email messages.  The complaint alleges that the defendants violated the CAN-SPAM Act by not providing consumers who received the spam email messages with a clear and conspicuous notice that they had the right to opt out of receiving future commercial email messages from the defendants, and by sending commercial email messages that did not include the sender’s physical postal address.

The Commission vote authorizing the staff to file the complaint was 4-0.  The complaint was filed in the U.S. District Court for the Southern District of Florida.


Thursday, January 23, 2014
General Electric Hitachi Nuclear Energy Americas Agrees to Pay $2.7 Million for Alleged False Claims Related to Design of Advanced Nuclear Reactor

The Justice Department announced today that General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi) has agreed to pay $2.7 million to resolve allegations under the False Claims Act that it made false statements and claims to the Department of Energy and the Nuclear Regulatory Commission (NRC) concerning an advanced nuclear reactor design.  GE Hitachi, a provider of nuclear energy products and services headquartered in Wilmington, N.C., is a subsidiary of General Electric Company (GE) that is also partially owned by Hitachi Ltd., a multinational engineering and manufacturing firm headquartered in Tokyo, Japan.  GE is headquartered in Fairfield, Conn.

“Transparency and honesty are absolutely critical when dealing with issues relating to the design of a nuclear reactor,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Department of Justice will protect federal funds and the Nuclear Regulatory Commission’s crucial mandate of ensuring public safety.”  

“Fraud involving government contracts will be zealously pursued in North Carolina,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.  “We encourage our citizens to report fraud related to government contracts and our federal programs.”

GE Hitachi allegedly made false statements to the NRC and Department of Energy about a component of the advanced nuclear Economic Simplified Boiling-Water Reactor (ESBWR) known as the steam dryer.  A steam dryer removes liquid water droplets from steam produced by the nuclear reaction that generates electricity in boiling-water type reactors.  The NRC requires that applicants for nuclear reactor design certification, such as GE Hitachi, demonstrate that vibrations caused by the steam dryer will not result in damage to a nuclear plant.  The government alleged that GE Hitachi concealed known flaws in its steam dryer analysis and falsely represented that it had properly analyzed the steam dryer in accordance with applicable standards and had verified the accuracy of its modeling using reliable data.    

Between 2007 and 2012, GE Hitachi received funding from the Department of Energy to cover up to half of the cost of developing, engineering and obtaining design certification for the advanced nuclear ESBWR.  The NRC, which regulates the civilian use of nuclear power in the U.S., is responsible for determining whether to approve GE Hitachi’s application for the reactor design certification.  The NRC is still reviewing the application and has not reached a final decision on the certification.

“The Nuclear Regulatory Commission supports the settlement and appreciates the Department of Justice’s close coordination during its investigation of these allegations,” said Director of NRC’s Office of New Reactors Glenn Tracy.  “The NRC continues to rigorously review the ESBWR application in order to reach a final design certification decision, ensure compliance with NRC regulations and protect public health and safety.”

The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by LeRay Dandy, a former employee of GE Hitachi.  Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery.  Dandy’s share of the settlement has not been determined.  

This case was handled by the Department of Justice Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Eastern District of North Carolina and the Offices of Inspector General for the Nuclear Regulatory Commission and the Department of Energy.



Military Chiefs Look to NATO’s Future
By Jim Garamone
American Forces Press Service

ABOARD A U.S. MILITARY AIRCRAFT, Jan. 23, 2014 – The NATO chiefs of defense “talked a little bit about today, a little bit about tomorrow, and a little bit about 10 years from now,” the chairman of the Joint Chiefs of Staff said as he returned to Washington today from alliance meetings in Brussels.
Army Gen. Martin E. Dempsey took advantage of the 170th Chiefs of Defense Meeting to not only address NATO issues, but to strengthen military-to-military relations with other nations.

The chairman’s first engagement in Brussels was a meeting with his Russian counterpart Gen. Valery V. Gerasimov. Dempsey said the session was very positive and constructive, describing U.S.- Russian relations as important “not just because of the issues that are apparent to us, but the ones that are not yet apparent,” he said. The alliance’s possible future in Afghanistan after its current mission ends this year was also discussed. At the NATO meeting itself, he said, “We reminded ourselves that while the discussions are going on about our 2015 presence, we still have some tasks at hand to accomplish,” he said.

The chiefs looked at ways to increase the pace of development of the Afghan national security forces – focusing on how to improve the institutions that build and manage them. And, they discussed what can be done to help Afghans hold a credible, transparent and fair presidential election in April.

Most of the NATO support will be peripheral, as the Afghans have the lion’s share of conducting the vote. The United States will provide some logistical support and transportation for election observers.

The chiefs also discussed how they can “preserve our options so when the political decision is made on 2015 and beyond, we’ll have a pretty clear understanding of how we will have to shift to accomplish it.”

The other main outcome of the meeting was an increased awareness of the threats and risks building on the alliance’s southern flank. The United States has long spoken about transnational threats emanating from North Africa and the Middle East. Terrorist organizations take advantage of weak governments or ungoverned spaces and use them as safe havens, Dempsey said. Al-Qaida in the Islamic Mahgreb is one of these groups and there are others.

“I am encouraged that the alliance is beginning to understand some of the risks that are building on its southern flank,” the chairman said. “Now we have reached the point of entering into conversations about what as an alliance we might do about it.”

The chiefs spoke about NATO’s nascent cyber defense capability. “It’s mostly all national level,” he said. “We’re trying to find ways to link it together to make ourselves more capable in the cyber dimension.”

The meeting in Brussels will be followed by a NATO defense ministers’ meeting next month, which will help set up a NATO Summit that will be hosted by the United Kingdom later this year.



Nissan North America, Inc., Advertising Agency TBWA Worldwide, Inc., Settle FTC Charges that that Nissan Frontier Dune Buggy Rescue Ad Was Deceptive

Advertisers Cannot Misrepresent Key Attributes in Product Demonstrations, FTC Says

Nissan North America, Inc., and an advertising agency that designed television ads for the mid-sized Nissan Frontier pickup truck have agreed to settle Federal Trade Commission charges of deceptive advertising for a 30-second ad showing a Frontier pushing a dune buggy up a steep hill, something the truck actually cannot do.

Under the proposed settlements, Nissan and TBWA Worldwide, Inc. are prohibited from using deceptive demonstrations in advertisements for pickup trucks.

According to the administrative complaints, Nissan and TBWA promoted the Frontier pickup truck with a “Hill Climb” advertisement that showed the vehicle rescuing a dune buggy trapped in sand on a steep hill, while onlookers observe the feat in amazement.  It was produced in a realistic “YouTube” style, as if it were shot on a mobile phone video camera.

The administrative complaints allege that Nissan and TBWA violated the FTC Act by representing that the ad accurately showed the performance of an unaltered Nissan Frontier under the conditions that were depicted.  In fact, the truck is not capable of pushing the dune buggy up and over the hill, and both the truck and the dune buggy were dragged to the top of the hill by cables, according to the complaints.  The complaints also allege that the hill was made to look significantly steeper than it actually was.

“Special effects in ads can be entertaining, but advertisers can’t use them to misrepresent what a product can do,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.  “This ad made the Nissan Frontier appear capable of doing something it can’t do.”

Under the proposed settlements, Nissan and TBWA cannot misrepresent any material quality or feature of a pickup truck through the depiction of a test, experiment, or demonstration. The orders do not prohibit the use of special effects and other production techniques as long as they do not misrepresent a material quality or feature of the pickup truck.

This case is part of the FTC’s ongoing efforts to protect consumers from misleading advertising.  

The Commission vote to accept the consent agreement package containing the proposed consent orders for public comment was 4-0.  The FTC will publish a description of the consent agreement package in the Federal Register shortly.

The agreements will be subject to public comment for 30 days, beginning today and continuing through Monday February 24, 2014, after which the Commission will decide whether to make the proposed consent orders final.  Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.  Comments in electronic form should be submitted using the following Web link:, and following the instructions on the web-based form. Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.  Each violation of such an order may result in a civil penalty of up to $16,000.