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Saturday, February 22, 2014


UN Security Council Resolution on Syria
Press Statement
John Kerry
Secretary of State
Washington, DC
February 22, 2014

This could be a hinge-point in the tortured three years of a Syria crisis bereft of hope. This overdue resolution, if fully implemented, will ensure humanitarian aid reaches people in Syria whose very lives depend on it. This is all about saving innocent lives and relieving the burden on Syria's neighboring countries.

After three years of slaughter and savagery, people rightfully will question whether progress is possible, but this resolution holds the promise of something real. The proof is on paper. By naming the areas in Syria where sieges must be lifted, demanding that hospitals, schools and other places where civilians gather must be demilitarized, insisting that aid must be allowed to cross borders and follow the most direct routes to the suffering, and by underscoring that attacks against civilians, including barrel bombing, must end, the international community hasn't minced words. This is a resolution of concrete steps to answer the worst humanitarian crisis in the world today.

But these steps are only first steps. Just as shipments of humanitarian aid mean little without access to beleaguered areas, resolutions demanding access mean little without full implementation. The test is whether the words of the Security Council are matched with the life-saving actions the Syrian people so desperately and urgently need.



Weekly Address: Time to Lift the Minimum Wage and Give America a Raise

WASHINGTON, DC—In this week’s address, President Obama said this is a year of action, and he will do everything he can to restore opportunity for all.  The President already lifted the wages for federal contract workers, and he calls on the American people to tell Congress to finish the job by boosting the federal minimum wage for all workers to $10.10 and give America a raise.
The audio of the address and video of the address will be available online at 6:00 a.m. ET, Saturday, February 22, 2014.
Remarks of President Barack Obama
Weekly Address
The White House
February 22, 2014
Hi, everybody. 
Restoring the idea of opportunity for all requires a year of action from all of us.  Wherever I can act on my own, I will – and whenever I can ask more Americans to help, I’ll do that too.
In my State of the Union Address, for example, I asked more business leaders to take action to raise their employees’ wages.  Because even though our economy is growing, and our businesses have created about eight and a half million new jobs over the past four years, average wages have barely budged.
So it’s good news that, earlier this week, one of America’s largest retailers, The Gap, decided to raise wages for its employees beginning this year.  Their decision will benefit about 65,000 workers in the U.S.  That means more families will be able to raise their kids, finish their studies, or keep up on their bills with a little less financial stress and strain. 
Gap’s CEO explained their decision simply – he said, “[It’s] right for our brands, good for our people, and beneficial to our customers.”  And he’s right – raising Americans’ wages isn’t just a good deed; it’s good business and good for our economy.  It helps reduce turnover, it boosts productivity, and it gives folks some more money to spend at local businesses.
And as a chief executive myself, that’s why I took action last week to lift more workers’ wages by requiring federal contractors to pay their employees a fair wage of at least $10.10 an hour.
In the year since I first asked Congress to raise the minimum wage, six states have passed laws to raise theirs, and more states are working on it as we speak.  But only Congress can finish the job and lift Americans’ wages across the country. 
Right now, there’s a bill before Congress that would boost America’s minimum wage to $10.10 an hour.  That’s easy to remember – “ten-ten.”  That bill would lift wages for more than 16 million Americans without requiring a single dollar in new taxes or spending.  But even though a majority of Democrats, Independents, and Republicans across the country support raising the minimum wage, Republicans in Congress don’t want to give it a vote. 
Hardworking Americans deserve better than “no.”  Let’s tell Congress to say “yes.”  Pass that bill.  Give America a raise.  Because here in America, no one who works hard should have to live in poverty – and everyone who works hard should have a chance to get ahead. 
Thanks, and have a great weekend.



Situation in Venezuela

Press Statement
John Kerry
Secretary of State
Washington, DC
February 21, 2014

I am watching with increasing concern the situation in Venezuela. Despite calls from that country’s democratic opposition and the international community, the Venezuelan government has confronted peaceful protesters with force and in some cases with armed vigilantes claiming to support the government. It has imprisoned students and a key opposition figure. It has limited the freedoms of expression and assembly necessary for legitimate political debate, and just today tightened restrictions on the media, revoking the credentials of CNN en Español reporters. This is not how democracies behave.

Every government has a duty to maintain public order, and all sides, including the opposition protestors, must refrain from violence. The government’s use of force and judicial intimidation against citizens and political figures, who are exercising a legitimate right to protest, is unacceptable and will only increase the likelihood of violence.

I call on the Venezuelan government to step back from its efforts to stifle dissent through force and respect basic human rights. The government should release incarcerated members of the opposition and initiate a process of genuine dialogue with the democratic opposition. The solution to Venezuela’s problems can only be found through dialogue with all Venezuelans, engaging in a free exchange of opinions in a climate of mutual respect.


FTC Action Leads to Court Order Barring Misleading Light Bulb Claims
Order Also Imposes $21 Million Judgment Against Marketers of LED Bulbs

At the request of the Federal Trade Commission, a federal court has ordered a light bulb manufacturer and its owners to pay more than $21 million for misleading consumers by exaggerating the performance of their Light Emitting Diode (LED) light bulbs.

In September 2010, the FTC charged Lights of America Inc., Usman Vakil and Farooq Vakil with violating federal law by overstating the light output and life expectancy of their LED bulbs on packages and in brochures, and falsely comparing the brightness of their LED bulbs with that of other light bulbs.

Following a four-day bench trial in October-November 2012, the court entered detailed findings of the defendants’ false and deceptive claims. Prior to trial, the court had already found that the defendants made unsupported claims that their LED bulbs provided the same or comparable light output as incandescent bulbs.

According to the FTC, the defendants initially claimed their LED lamps had a 30,000-hour life and lasted “15 times longer than 2,000 hour incandescent bulbs.” The defendants revised those claims downward several times, including a statement that their LED lamps had a 12,000-hour life and lasted “6 times longer than 2,000 hour incandescent bulbs.” But in fact, the documents and data the defendants relied upon showed that none of their LED bulbs that were tested lasted beyond a few thousand hours.

In September 2013, the court found that the FTC had proved its case and that the defendants were liable for deceptive marketing. The court order announced today requires them to pay $21 million to the FTC, which represents the total amount consumers paid to the company for light bulbs based on the deceptive claims. Most of the money will be available for refunds to consumers. The court order permanently prohibits the defendants from misrepresenting material facts about lighting products, and misrepresenting light output or brightness in lumens, light output equivalency to another product, lifetime of the product, energy costs, energy savings, or energy consumption, or the ability to produce a desired energy-related effect. The order also requires the defendants to meet certain compliance and record-keeping requirements for 20 years.

The judgment was entered by the U.S. District Court for the Central District of California, Southern Division, on January 15, 2014.

For information about light bulb performance, read the FTC’s Shopping for Light Bulbs, which notes that well-designed and manufactured LED bulbs save on energy costs and last much longer than other types of light bulbs.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.


Remarks by the President before Meeting with Democratic Governors
State Dining Room

11:20 A.M. EST

THE PRESIDENT:  Well, it's wonderful to have America’s governors in town.  Michelle and I look forward to hosting with their spouses our annual Governors’ Reception here and dinner.  And it's always a great opportunity to exchange ideas and hear what’s happening at the local level.

Today we did bring Democratic governors to the White House to spend some time talking about a couple of issues that are of critical importance to our constituencies and, I think, to the country.  And one of those is the issue of minimum wage and what we can do to give America a raise.

Many of the governors in this room are pushing to raise their state’s minimum wages to benefit more working families and help to grow their economies.  Governor Abercrombie, Governor Inslee, Governor Malloy, Governor O’Malley, Governor Patrick, Governor Quinn all focused on this in their State of the State addresses.

In my State of the Union address, obviously I promised that I would do what I could as the head of the executive federal government, and have already signed an executive order saying that if you want to do business with the federal government as a federal contractor then you need to be paying your employees $10.10 an hour.  We don't want somebody who is washing dishes for our troops or helping in some ways to care for them to be living in poverty when they’re working full-time.

And what we discovered in looking at this issue is that, increasingly, businesses recognize that raising wages for their employees is a smart business issue because they end up having lower turnover rates, higher productivity, higher morale, folks stay longer and are more focused on the job rather than having to worry about whether or not they can pay their bills at the end of the month.

And this is not just good policy; it also happens to be good politics, because the truth of the matter is the overwhelming majority of Americans think that raising the minimum wage is a good idea.  That is true for independents; that is true for Democrats; and it's true for Republicans.  So, in fact, where we've seen some of these issues going to referendum -- for example, in New Jersey, even though the Republican governor opposed it, it passed by 60 percent.

And the reason that this is important is not because  everybody is going to be benefiting from a hike in the minimum wage -- the truth is, is that most working Americans make more than the minimum wage already.  But people, I think, instinctually understand that part of what this country should be about is if you're working hard and taking responsibility that you can get ahead and that you can look after your family.  And raising the minimum wage will help up to 16 million Americans, and that's a big deal.  And that could give a boost to our economy as a whole.

So I'm going to continue to press Congress to pass a federal minimum wage bill that goes up to $10.10 an hour, being sponsored currently by Senator Harkin and Representative Miller.  I'm going to be seeking Republicans who are game to work with us and prepared to work with us on this issue.  As I said at the State of the Union, it's not something that requires a big bureaucracy and it doesn’t require a lot of federal spending.  All it requires is for us to stake out a claim on behalf of American workers that's consistent with our values as a nation.

And I'm going to be interested in hearing of the efforts of governors in this room to see what they can do to make sure that America gets a raise.

So I appreciate their presence.  We've got a lot of other issues on the plate, but I wanted to highlight that one because I think it's something that’s on a lot of people’s minds -- how can we boost people’s incomes and wages if they’re working hard so they can get ahead.

Thank you so much, everybody.



Remarks at the 39th Meeting of the Executive Council
Robert P. Mikulak
U.S. Permanent Representative to the Organization for the Prohibition of Chemical Weapons 
The Hague, Netherlands
February 21, 2014

Mr. Chairman,

At the last meeting of this Council, the United States expressed deep concern that the effort to remove chemical agent, key precursor chemicals, and other chemicals from Syria had seriously languished and stalled. Many members of this Council expressed the same concerns. Along with the United States, they called upon the Syrian Government to accelerate and expeditiously complete the relocation of these chemicals to the port of Latakia for removal and destruction.

In the three weeks since this Council last met, there has been progress in eliminating the isopropanol in Syria and in transporting limited quantities of the stabilizer hexamine to Latakia. The fact remains, however, that 95.5 percent of Priority One chemicals – CW agent and key binary precursors – remain in Syria as well as 81.1 percent of Priority Two chemicals, well beyond the dates set for removal by the Executive Council. And the Syrian Government continues to put its energy into excuses, instead of actions.

Regrettably, this Council at its January 30th meeting failed to address Syria’s unacceptable delay in completing removal of all designated chemicals. Why? Because a single member of this Council put its own political agenda above the welfare of the people of Syria and the international community. This lapse in leadership was unworthy of this Council and an affront to the dedicated efforts of the OPCW Technical Secretariat and the OPCW-UN Joint Mission to remove chemical weapons from the military arsenal of the Assad regime.

Mr. Chairman,

While this Council was silent, the growing concern of the international community thankfully found its voice at the UN Security Council. On February 6th, the Security Council publicly addressed the Syria CW situation. In particular,

-- The Security Council noted growing concern, with respect to the decision of OPCW Executive Council EC-M-34/DEC.1, dated 15 November 2013, about the slow pace of the removal of the chemical weapons from the territory of Syria, which has placed efforts behind schedule;

-- The Security Council called upon the Syrian Arab Republic to expedite actions to meet its obligation to transport, in a systematic and sufficiently accelerated manner, all relevant chemicals to Latakia for removal from Syrian territory, and in this regard noted the Secretary-General and Joint Mission’s call for the Syrian Arab Republic to intensify its efforts to expedite in-country movements of chemical weapons material;

--The Security Council noted the Secretary-General and Joint Mission's assessment that the Syrian Arab Republic has sufficient material and equipment necessary to carry out multiple ground movements to ensure the expeditious removal of chemical weapons material, and noted the substantial international support already provided for the removal of chemical weapons materials from the territory of the Syrian Arab Republic;

--Finally, the Security Council expressed its commitment to continue to closely monitor compliance with resolution 2118 (2013) with less than five months until the date for completing destruction of 30 June 2014 established in the OPCW Executive Council decision of 15 November 2013, which is a deadline that Security Council members remain committed to seeing met.

Mr. Chairman,

The United States fully supported the press elements by the UN Security Council chairman on February 6th and reaffirms that position today. In that regard, I would like to underscore the final element and make clear the position of the United States. It was the decision of this Council on November 15th that destruction -- not just removal -- of Syrian chemical weapons must be completed by June 30, 2014. Despite Syria’s inaction, the experts in the OPCW’s Operational Planning Group agreed last week that completion of removal and destruction by June 30, 2014 is indeed achievable if action is taken by Syria now.

The international community has put into place everything that is necessary for transport and destruction of these chemicals. Sufficient equipment and material has been provided to Syria. The ships to carry the chemicals away from Syria are waiting. The U.S. ship to destroy CW agent and precursors is now in the region and waiting. Commercial facilities to destroy other chemicals have been selected and contracts awarded; they are waiting. And yet Syria continues to drag its feet.

Mr. Chairman,

The Council should endorse all of the statements made by the President of the UN Security Council on February 6th, and reaffirm the June 30, 2014, date for removal and destruction of all Syrian chemical weapons. Further, this Council should reject Syria’s delaying tactics and insist that an expedited removal schedule be adhered to by the Syrian Government that will provide the international community sufficient time to destroy Syria’s chemical weapons by June 30, 2014.

Mr. Chairman,

At our meeting on January 30th, the United States called this Council’s attention to another serious issue – the destruction of Syrian chemical weapons production facilities (CWPF). Syria has proposed that seven hardened aircraft shelters and five underground structures previously used in connection with the production of chemical weapons be “inactivated,” by rendering them inaccessible. As detailed in a U.S. national paper and underscored by other members of this Council, Syria’s proposed measures would be readily and easily reversible within days. Thus, they clearly do not meet the requirement that such facilities be “physically destroyed” under the Convention and as implemented by the other States Parties that have declared chemical weapons production facilities. In an effort to resolve this impasse, the United States has engaged Syrian officials at the OPCW on several occasions, most recently a week ago. No progress has been made. Syria has flatly rejected U.S. efforts to find compromises for achieving the “physical destruction” requirement.

Mr. Chairman,

The deadline set by this Council for the destruction of Syria’s twelve chemical weapons production facilities is March 15 – just three weeks from today. Apparently, the Syrian Government intends to ignore yet another requirement set by the Council. This Council, however, cannot ignore the completion dates it established in its consensus decisions.

The United States believes the Council needs to address this issue, and we are considering a draft decision for the Seventy-Fifth Session of the Executive Council to address this impending situation. The United States believes this decision needs to have two principal components:

-- First, with respect to the seven hardened aircraft shelters, this Council should require that Syria by March 15 collapse the roofs using precision explosives. The United States has carefully analyzed this approach and concluded that it would meet the Convention standard for physical destruction in an expedited and cost-effective manner.

-- Second, with respect to the five underground structures, this Council, noting the additional technical challenges they entail, should extend the deadline for destruction but only on the condition that specified measures be undertaken by Syria first to inactivate them and then to physically destroy the entire underground structure.

Mr. Chairman,

In about ten days, this Council will convene in regular session and the Syrian CW situation will dominate our deliberations. This intervening period provides an opportunity for the Syrian Government to chart a new course – one that would allow Syria to meet its obligations in accordance with the decisions of this Council and UN Security Council resolution 2118. Over the next ten days, Syria should take the following actions to demonstrate its commitment to complying with its obligations. Syria should begin making substantial and systematic deliveries of liquid Priority One agent and precursors to Latakia. Syria should revise its 100-day transport schedule to embrace the recommendations developed by the OPCW, the UN, and others in the Operational Planning Group to expedite removal. And finally, Syria should withdraw its proposal to merely inactivate its CWPF aircraft shelters and underground structures, and agree to a true destruction plan.

Mr. Chairman,

If Syria does not soon undertake decisive action to fully comply with its obligations, this Council at its March regular session should require Syria to meet the expedited schedule for removal developed by the Operational Planning Group, with the goal of ensuring that the June 30th deadline for removal and destruction will be met. Further, the Council should adopt a decision to reinforce the Convention's requirement that Syrian CWPF aircraft shelters and underground structures be physically destroyed. We must take seriously the decisions of this Council and the requirements of the Convention, even if the Syrian Government does not.

Mr. Chairman,

The weeks ahead will be critical for the success of this historic endeavor. The United States urges Syria to finally make a course correction and fully comply with its obligations. If not, this Council, and indeed the broader international community, will need to consider the steps that will need to be taken to ensure that the promise of our September 27, 2013, decision and UN Security Council resolution 2118 are realized, and chemical weapons are forever removed from the hands of the Assad regime.

Mr. Chairman,

I request that this statement be made an official document of the meeting and posted on the OPCW website and external server.

Thank you, Mister Chairman.


Remarks at the “SEC Speaks” Conference
 Commissioner Kara M. Stein
U.S. Securities and Exchange Commission
Washington, D.C.

Feb. 21, 2014

I am pleased to join you today as Commissioner for my first SEC Speaks.  Before I begin my remarks, I would like to remind you that the views I am expressing today are my own and do not necessarily reflect those of the Commission, my fellow Commissioners, or the staff of the Commission.

This summer will mark the 80th anniversary of the Securities and Exchange Commission, which is a testament not only to the mission of the Agency, but also to the dedication of the thousands of people who have worked for it over the decades.  Since joining the Commission, I’ve been impressed by the incredible amount of work that the SEC staff-members do each and every day.

In my office, I have copies of the original securities laws and a picture of the first Commission, with Chairman Joseph Kennedy and Commissioners Ferdinand Pecora and James Landis.  These men were extraordinary public figures.  Ferdinand Pecora led the investigation into the causes of the Great Depression, and used that knowledge to help shape the new Commission.  James Landis helped draft the Securities Act and was instrumental in developing the modern securities regulatory regime.  And Joe Kennedy, who was a leading investor, businessman, and statesman, worked as a powerful chairman driving the new agency.  That Commission was well-informed by the causes of the Great Depression.  And they acted boldly—even during a struggling economy—to help bring stability and fairness to the financial markets.

Those first Commissioners would likely be surprised to see how much the Commission has evolved over these past eight decades.  We’ve grown quite a bit.  We oversee whole industries that didn’t even exist back then.  And we also now have a little division that I think you might have heard of—the Division of Enforcement.

One of the greatest surprises for me when I joined the Commission was coming to grips with the vast scope of our enforcement efforts.  As many of you know, each week Commissioners are asked to review hundreds of pages of documents, and pass judgment on as many as two dozen cases covering any number of complex legal issues.

Chair White and Enforcement Director Ceresney have set a fantastic tone for the Commission’s enforcement efforts.  They have made it clear that the SEC will use its tools to vigorously protect the public interest and investors.    Under their guidance, the Commission is seeking admissions of culpability.  And we are now focusing more than ever before on firms’ internal controls.  That holds true whether at a trading desk, in an accountant’s office, or in the executive suite.

I am also strongly interested in seeking greater individual accountability for gatekeepers, including executives, compliance officers, accountants, and attorneys.  Just within the last few months, we’ve brought a case against a small auditor for entirely failed audits of shell public companies, a case against a large accounting firm for violating auditor independence rules, a case against a compliance officer of an investment adviser for egregious violations of custody and compliance rules, and a financial fraud case against the CFO of a large public company.  I applaud our Enforcement Staff for bringing these kinds of tough and important cases.

Gatekeepers fulfill a critical role in allowing participants to access the capital markets.  As the Commission is being tasked with overseeing more, with fewer resources, the focus on gatekeepers is both an efficient and effective approach to policing the securities marketplace.

This focus on gatekeepers will empower securities professionals, compliance officers, accountants, and lawyers to actively look for red flags, ask the tough questions, and demand answers.  Actions will be brought when professionals fail to fulfill their responsibilities.

I also think we should look at some of the other tools we have in our toolbox to see if they can enhance our ability to protect the public interest and investors.  For example, I think we should review our policies for waiving automatic disqualification provisions, sometimes called “bad actor” provisions.

Currently, there are over a half-dozen bad actor provisions.  If a firm violates the law or hits some other defined trigger, then it is precluded from obtaining certain privileges, engaging in some types of offerings, or even conducting a certain type of business.  These bad actor provisions exist to protect the public interest and investors, and so we should be very careful in granting waivers from them.  We should consider the initial purpose for the disqualification provision, and we should consider how that policy is impacted by a decision to waive it.

We must ensure that we have a fair, sound and consistent basis for granting or denying a waiver request.  Firms and investors both deserve to know what factors we, or our staff, will use to evaluate waiver requests, and we must be able to support our decisions to grant or deny waiver requests with documented policies and facts.

I am pleased to be working with my colleagues to ensure that we have clear waiver policies that I think will buttress our efforts to promote the public interest and protect investors.

As important as enforcement is, of course, that is not all that we do.  We also write rules.  Like the first Commission, we all come to our work informed by a financial crisis.  In fact, like Ferdinand Pecora, both Commissioner Piwowar and I came to the Commission, shaped by our time as Senate Banking aides.

Also like that first Commission, this Commission has received strong direction from Congress on how to help address the underlying causes of the crisis.  Following years of investigations and dozens of hearings detailing the causes of the crisis by the Senate Permanent Subcommittee on Investigations, the Senate Banking Committee, the House Financial Services Committee, the Senate Agriculture Committee, and the House Agriculture Committee, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act.

That ground-breaking law built upon the lessons from the collapse of AIG, and created a new regulatory regime for derivatives.  It built upon the lessons from the collapse of the housing and securitizations markets, and established new rules to make mortgages and securitizations safer.  And it built upon the explosive losses at many of the largest banks and placed new limits on banks’ risky trading.

These are only a few parts of the Act that were designed to make our financial system safer, more transparent, and more fair. The Dodd-Frank Act directed the Commission to write or modify over 90 rules, and authorized the Commission to write dozens more.  Over three years later, the Commission’s work to implement those rules is not complete.  We need to finalize, this year, our derivatives reforms, including the cross-border application of our rules and our business conduct rules.

We also need to finalize rules about executive compensation, including provisions requiring issuers to have policies in place to claw back compensation.  We should be empowering shareholders to take money back from executives who put their own personal gain ahead of the interests of shareholders and the firm.  And we should be working with the banking regulators to finalize a rule that would help ensure that our largest financial firms don’t have executive compensation structures that encourage risky and potentially disastrous behavior.

We also need to finally and firmly address the conflicts of interest in asset-backed securitizations and the provision of credit ratings.

We should move carefully but quickly to finish these rules.  And if a rule is rejected by a Court, we should dust ourselves off, make the rule better, and finish it.  We should not be intimidated into backing off our obligation to implement the law.  We should not be leaving any of our statutorily required rulemakings behind —even those that some of us may not like.

Our lessons from the financial crisis are not exclusively addressed by the Dodd-Frank Act.  We must also think proactively of ways to mitigate threats to our financial system.  During the depths of the financial crisis, the true fragility of our financial system was revealed as financial tidal waves washed over the global economy.  I was working in the Senate as the crisis unfolded, and I can assure you that I will forever remember those frightening times in 2008 and 2009.

Our government took extraordinary measures to save the world economy, pouring trillions of dollars into the markets and financial firms.  Many of us remember the Troubled Asset Relief Program, which provided billions of dollars in capital to banks.  But that was just one small part of the picture.

As financial institutions struggled for funding amidst the sharp pullback of the short term lending markets, the Federal Reserve eased the rules, and expanded the ability of firms to tap the discount window. It created several unprecedented programs out of thin air with technical-sounding names, such as the Term Auction Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility.

To help provide liquidity directly to borrowers and investors in key credit markets, the Federal Reserve also created the Commercial Paper Funding Facility, the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Money Market Investor Funding Facility, and the Term Asset-Backed Securities Loan Facility.

Some of these programs worked, and others didn’t.  But collectively, these and other efforts helped stem the tide of the credit crisis.  I also note that most of these markets, and those who participate in them, are regulated by the Commission.

Now, several years removed, some seem determined to forget what happened, arguing that we should ignore the inter-relationships that nearly caused global economic collapse.  I cannot forget.  I will not ignore the relationships between banks, broker-dealers, funds, and investors.  Nor will I forget how those relationships nearly unwound our financial system.

For example, the short term funding market is a complex ecosystem in which investors, including money market funds, interact with broker-dealers, banks, and non-bank issuers.  Behavior by one sector in the market will have repercussions for the rest.  For example, if the demand provided by money market funds for short term paper dries up, even if there isn’t a so-called “run,” what happens?  Similarly, if lenders refuse to accept even high-quality, stable-value collateral, to support their short term loans, what happens?

We learned that supposedly well-capitalized firms could quickly fall victim to liquidity crises.  And we learned that highly leveraged, affiliated broker-dealers can threaten even some of the largest banks.

Since the crisis, regulators around the world have been working to improve capital, leverage, liquidity, and margin rules.  There is a reason why Congress and regulators have been working to tighten the definition of what constitutes “capital” in the years since the crisis.  There is a reason why our fellow regulators care deeply about the risks posed by securities lending and the tri-party repo markets.[1]  And there is a reason why the Financial Stability Oversight Council (FSOC) has been working with the Commission to address risks posed by money market funds.  Our government put trillions of dollars on the line to bail out, directly and indirectly, our entire financial system, and each of these areas played a key role in the crisis.

We, at the Commission, are working on rules to prevent runs on money market funds.  Those are valuable efforts, but they do not go far enough to address systemic risks.  Our regulations shape the role that money market funds play in providing short-term funding for issuers, particularly the largest financial firms.  We must consider whether regulations need to be updated. We should consider whether enhanced capital, leverage, liquidity, and margin rules would help mitigate risks at the firms, and in the markets, we regulate.

And we should also empower market participants to help prevent systemic risks. One way may be to improve disclosures regarding issuers’ reliance on short term funding.  Investors should be aware of a firm’s susceptibility to a liquidity crunch, and be able to demand higher interest rates or other concessions.   That is how the capital markets should work when these risks are understood.

Our efforts to avoid another financial crisis also should not be confined to simply attempting to prevent the last one.  Since the financial crisis, we have also seen new issues emerge in how stocks, options, futures, and increasingly other products, are traded.  In recent years, the plumbing of our markets has evolved dramatically.  Today, there are 16 registered securities exchanges, dozens of so-called “dark pools,” and hundreds of so-called “internalizers.”  Markets and traders are connected at near-light speeds.  Telephone lines have given way to fiber optic cables, microwave towers, and now, laser beams.[2]

When this system works well, futures, options, and equities trade nearly seamlessly around the world.  Yet when something goes wrong, the results can be severe for the businesses and investors who rely on our capital markets.

As we all know, on May 6, 2010, an investment adviser selling E-mini futures, on a day filled with fears about the European debt crisis, helped trigger collapses in futures, options and equities.  Futures, options, and equities are inextricably linked, and our oversight of them must be too.  While this task may be made somewhat more complex because it involves two primary regulators, it is not impossible.  We simply must work together to oversee these markets.  For example, rules for systems and testing should be coordinated, as should safety measures.

We also must have a comprehensive vision and understanding of the markets.  The Consolidated Audit Trail, or CAT, is desperately needed and long overdue.  But we should not stop with what we have proposed already.  To be most useful, the CAT should be comprehensive, including data from all of the inter-related markets, not just those principally overseen by the Commission.

Critical market infrastructure should be both reliable and resilient.  It is not good enough to say that the system is operational 99 percent of the time.  It also must not be catastrophic if something unexpected or unknown occurs.  Traders, exchanges, dark pools, clearing firms and others need to anticipate, and plan for, the unexpected.

All market participants need to have the appropriate systems and controls in place to ensure that they don’t trigger market failures.  We, as a Commission, need to be working on improving expectations and standards for those systems and controls.

Our Enforcement staff has been doing great work in bringing some of these hyper-technical, often difficult cases against traders and execution venues.  These types of cases help send strong messages that good systems and good people are vital, not only to the health of one market participant, but to all of them.

Efforts to address all of these risks, and prevent the next financial crisis, should not fall victim to agency turf wars.  The FSOC was created to help break down some of the silos and end some of the jurisdictional divides that exacerbated the last crisis.  The Commission needs to be a helpful contributor to the FSOC.  As a Commissioner, my responsibility is to the American public, to investors, and to the businesses who rely on our capital markets every day.  While I work at the SEC, I work for the American people.  In that regard, I have the same goals as our fellow regulators.

We should embrace our fellow regulators’ efforts and work to improve them.  We do not lose power as an agency by working with other regulators, we leverage it.  We gain knowledge and expertise in new areas.  And other regulators gain knowledge and expertise by working collaboratively with us.  If we are to be successful in protecting American families and businesses from the damage of another financial crisis, we must work together.  And we must be bold.

Eighty years from now, I hope history will show that our Commission lived up to the high standard set by our very first Commission.  I hope history will show that we had the expertise and the courage to think boldly, and act carefully, to reduce risks in our financial system, promote the public interest, facilitate capital formation, and protect investors.

We have come a long way since 1934, and we have a long way to go.  I know those of us on stage today will be working hard to keep us moving, and ahead of the curve.  I hope you will help us.

[1] See, e.g., Adam Copeland, Antoine Martin, and Michael Walker, Fed. Reserve Bank of N.Y., The Tri-Party Repo Market before 2010 Reforms, (Staff Rep. No. 477, 2010).

[2] Scott Patterson, Race to Zero: Traders With Need for Speed Turn to Laser Beams, Wall St. J., Feb. 12, 2014.


Ex-Im Bank Tops $1 Billion in Financing for American Business Aircraft and Helicopters
Bank Approves $300 Million for Export of Gulfstream Aircraft to China, Supports 2,100 U.S. jobs

Washington, D.C. – Today the Export-Import Bank of the United States (Ex-Im Bank) announced it has topped $1 billion in support of American-made business-aircraft and helicopter financings since the beginning of FY 2012.

In a deal that drove recent business-aircraft and helicopter financings over the $1 billion mark and supported approximately 2,100 American jobs, the Bank’s board approved a guarantee of a $300 million loan extended by Apple Bank for Savings to Minsheng Financial Leasing Company Ltd. of Tianjin, China, last December to finance the purchase of eight aircraft manufactured by Gulfstream Aerospace Corporation of Savannah, Ga.

“Business aircraft is a great example of a homegrown American industry that is creating jobs in communities across the country, thanks to support from the Export-Import Bank,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “Despite an increase in the number of foreign competitors, America’s business-jet manufacturers continue to demonstrate the advantages of manufacturing high-technology, high-quality products in the USA. Our loan guarantee, which pushes us over the $1 billion threshold for business-aircraft and helicopter financings months before our in-house deadline, will boost the export of eight of these state-of-the-art, American-made business jets to China and bolster U.S. jobs in Georgia. It is great to see that even in this competitive global marketplace, the Chinese continue to buy American.”

At the European Business Convention and Exhibition in May 2012, Chairman Hochberg announced that Ex-Im Bank would provide support for at least $1 billion in business-aircraft and helicopter financings by the end of 2014. Ex-Im Bank met the goal well in advance.

Founded in 2008, Minsheng currently ranks as Asia’s largest business-jet leasing firm. The company was advised by Airfinance Leasing LLC, an Ex-Im Bank Qualified Advisor, and plans to lease the Gulfstream aircraft to various end users. The purchase of the four G450s and four G550s occurred in early 2013.

Gulfstream Aerospace Corporation, a wholly owned subsidiary of General Dynamics, designs, develops, manufactures, markets, services and supports the world’s most technologically advanced business-jet aircraft. Gulfstream has produced more than 2,200 aircraft for customers around the world since 1958.

“Gulfstream’s presence around the world has dramatically increased over the past 10 years,” said Larry Flynn, President of Gulfstream Aerospace. “In 2008, we had 10 Gulfstream aircraft based in China. Today, this number has grown to more than 80 aircraft. The support that Gulfstream receives from Ex-Im Bank allows us to be more competitive around the world and has enabled us to grow the number of employees in the U.S.”



The Securities and Exchange Commission today announced charges against Zurich-based Credit Suisse Group AG for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.

Credit Suisse agreed to pay $196 million and admit wrongdoing to settle the SEC’s charges.

According to the SEC’s order instituting settled administrative proceedings, Credit Suisse provided cross-border securities services to thousands of U.S. clients and collected fees totaling approximately $82 million without adhering to the registration provisions of the federal securities laws.  Credit Suisse relationship managers traveled to the U.S. to solicit clients, provide investment advice, and induce securities transactions.  These relationship managers were not registered to provide brokerage or advisory services, nor were they affiliated with a registered entity.  The relationship managers also communicated with clients in the U.S. through overseas e-mails and phone calls.

“The broker-dealer and investment adviser registration provisions are core protections for investors,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement.  “As Credit Suisse admitted as part of the settlement, its employees for many years failed to comply with these requirements, and the firm took far too long to achieve compliance.”

According to the SEC’s order, Credit Suisse began conducting cross-border advisory and brokerage services for U.S. clients as early as 2002, amassing as many as 8,500 U.S. client accounts that contained an average total of $5.6 billion in securities assets.  The relationship managers made approximately 107 trips to the U.S. during a seven-year period and provided broker-dealer and advisory services to hundreds of clients they visited.  Credit Suisse was aware of the registration requirements of the federal securities laws and undertook initiatives designed to prevent such violations.  These initiatives largely failed, however, because they were not effectively implemented or monitored.

“As a multinational firm with a significant U.S. presence, Credit Suisse was well aware of the steps that a firm needs to take to legally conduct advisory or brokerage business with U.S. clients,” said Scott W. Friestad, an associate director in the SEC’s Division of Enforcement.  “Credit Suisse failed to effectively implement internal controls designed to keep its employees from crossing the line and being non-compliant with the federal securities laws.”

According to the SEC’s order, it was not until after a much-publicized civil and criminal investigation into similar conduct by Swiss-based UBS that Credit Suisse began to take steps in October 2008 to exit the business of providing cross-border advisory and brokerage services to U.S. clients.  Although the number of U.S. client accounts decreased beginning in 2009 and the majority were closed or transferred by 2010, it took Credit Suisse until mid-2013 to completely exit the cross-border business as the firm continued to collect broker-dealer and investment adviser fees on some accounts.

The SEC’s order finds that Credit Suisse willfully violated Section 15(a) of the Securities Exchange Act of 1934 and Section 203(a) of the Investment Advisers Act of 1940.  Credit Suisse admitted the facts in the SEC’s order, acknowledged that its conduct violated the federal securities laws, accepted a censure and a cease-and-desist order, and agreed to retain an independent consultant.  Credit Suisse agreed to pay $82,170,990 in disgorgement, $64,340,024 in prejudgment interest, and a $50 million penalty.

The SEC’s investigation was conducted by senior attorneys David S. Karp and Matthew R. Estabrook under the supervision of assistant director Laura B. Josephs and associate director Scott W. Friestad.  The SEC appreciates the assistance of the Swiss Financial Market Supervisory Authority.

Friday, February 21, 2014


Readout of the Obama Administration’s Meeting with Governors Inslee, Malloy, O’Malley, and Quinn on Minimum Wage

Today the Vice President dropped by a meeting with Secretary of Labor Thomas Perez, Senior Advisor Valerie Jarrett, and Director of the National Economic Council Gene Sperling and Governor Inslee of Washington, Governor Malloy of Connecticut, Governor O’Malley of Maryland, and Governor Quinn of Illinois to discuss the President’s call to action on raising the minimum wage.

The Vice President reiterated the Administration’s strong support of the efforts of these Governors to raise the minimum wage in their states. The Vice President stated that action from Congress is needed to make a difference nationwide, and boost the wages of millions of workers. Legislation before both the House and the Senate would raise America’s minimum wage to $10.10 per hour. The Vice President and the Administration look forward to continuing to work closely with Congress, Governors, businesses, and partners all across the country to give hardworking Americans a raise.


Readout of the President’s Meeting with His Holiness the XIV Dalai Lama

The President met this morning at the White House with His Holiness the XIV Dalai Lama.  The President reiterated his strong support for the preservation of Tibet’s unique religious, cultural, and linguistic traditions and the protection of human rights for Tibetans in the People’s Republic of China.  The President commended the Dalai Lama’s commitment to peace and nonviolence and expressed support for the Dalai Lama’s “Middle Way” approach.  The President stressed that he encourages direct dialogue to resolve long-standing differences and that a dialogue that produces results would be positive for China and Tibetans. In this context, the President reiterated the U.S. position that Tibet is part of the People’s Republic of China and that the United States does not support Tibet independence. The Dalai Lama stated that he is not seeking independence for Tibet and hopes that dialogue between his representatives and the Chinese government will resume.  The President and the Dalai Lama agreed on the importance of a positive and constructive relationship between the United States and China.


Readout of President Obama’s Call with President Putin

President Obama called Russian President Vladimir Putin today to discuss Ukraine and a range of other global issues.  On Ukraine, they exchanged views on the need to implement quickly the political agreement reached today in Kyiv, the importance of stabilizing the economic situation and undertaking necessary reforms, and the need for all sides to refrain from further violence.  They also spoke about the situation in Syria, including the importance of efforts to advance a political solution, concerns over the humanitarian crisis and the necessity of a strong UN Security Council resolution on the issue, and the need for the Assad regime to adhere to its commitment to eliminate Syria’s chemical weapons program.  In addition, they discussed U.S.-Russian cooperation in the P5+1 process on Iran.  The President also congratulated Russia on its hosting of the Olympic games.  


St. Lucia's Independence Day
Press Statement
John Kerry
Secretary of State
Washington, DC
February 21, 2014

On behalf of President Obama and the people of the United States, I congratulate the people of St. Lucia as you celebrate the 35th anniversary of your independence on February 22.

St. Lucia and the United States share a commitment to a more peaceful and prosperous future for the region.

We are working together to improve health and education, mitigate the effects of climate change, protect human rights, promote citizen safety, advance democracy, and create greater economic opportunities.

As you celebrate this special day with family and friends, I offer warmest wishes for the year ahead.


Guyana's Republic Day
Press Statement
John Kerry
Secretary of State
Washington, DC
February 21, 2014

On behalf of President Obama and the people of the United States, I am delighted to extend best wishes to the people of the Co-operative Republic of Guyana on your nation’s 44th anniversary.

The United States and Guyana share a dynamic partnership based on common interests and aspirations for peace, democracy, and respect for universal rights and freedoms.

Our partnership through the Caribbean Basin Security Initiative enhances the security and prosperity of the region by increasing law enforcement capacity. We are working with the youth of Guyana to provide training for better economic opportunities. And through PEPFAR, we are proud to join with Guyana to reach its goal of Getting to Zero: zero new HIV infections, zero stigma and discrimination, and zero AIDS-related deaths.

Our efforts to promote a cleaner, healthier, and more resilient natural environment are important to the entire region. We look forward to strengthening our cultural, business, and personal ties to help build a prosperous, secure, democratic, and healthy Guyana.

As you gather for Mashramani festivities, I wish all Guyanese peace, happiness, and a productive year ahead.





General Atomics-Aeronautical Systems, Inc., Poway, Calif., was awarded an $18,109,374 modification (P00014) to contract W58RGZ-12-C-0057 for changes to the Universal Ground Control Station.  Fiscal 2013 other procurement funds in the amount of $8,873,593 were obligated at the time of the award.  Work will be performed in Poway, Calif., with an estimated completion date of Nov. 30, 2015.   Army Contracting Command, Redstone Arsenal, Ala. is the contracting activity.

General Atomics-Aeronautical Systems, Inc., Poway, Calif., was awarded a $76,215,685 modification (P00015) to contract W58RGZ-12-C-0057 to change the Gray Eagle Portable Ground Control Station to a mobile ground control station.  Fiscal 2014 other procurement funds in the amount of $35,842,972 and fiscal 2013 other procurement funds in the amount of $2,453,283 were obligated at the time of the award. Estimated completion date is Nov. 30, 2016.Work will be performed in Poway, Calif. Army Contracting Command, Redstone Arsenal, Ala. is the contracting activity.


Eastern Research Group, Lexington, Mass. (N00174-14-D-0007); Martin-Baker Aircraft Co., United Kingdom (N00174-14-D-0008); Pacific Scientific Energetic Materials, Hollister, Calif. (N00174-14-D-0009); General Dynamics Ordnance and Tactical Systems, Bothell, Wash. (N00174-14-D-0010); Hi-Shear Technology Corp., Torrance, Calif. (N00174-14-D-0011); Nammo Talley, Mesa, Ariz. (N00174-14-D-0012); and Ensign-Bickford Aerospace & Defense Co., Simsbury, Conn. (N00174-14-D-0013) are each being awarded firm-fixed-price, indefinite-delivery/indefinite-quantity, multiple award contracts for development, product improvement, prototyping, qualification and production support.  Each contractor will receive the minimum guaranteed task order amount of $500 at time of award. These contracts include options, which if exercised, would bring these contracts to an estimated combined value of $232,897,406.  If all options are exercised, the estimated ceiling for Eastern Research Group is $10,787,035; the estimated ceiling for Martin-Baker Aircraft Co. is $32,122,194; the estimated ceiling for Pacific Scientific Energetic Materials is $36,744,748; the estimated ceiling for General Dynamics Ordnance and Tactical Systems is $30,405,120; the estimated ceiling for Hi-Shear Technology Corp. is $33,423,374; the estimated ceiling for Nammo Talley is $40,535,021; and the estimated ceiling for Ensign-Bickford Aerospace & Defense Co. is $48,879,914.  These seven contractors will be given the opportunity to compete for the task orders under the terms and conditions of the awarded contracts.  Work will be performed in Lexington, Mass. (14.3 percent), the United Kingdom (14.3 percent), Hollister, Calif. (14.3 percent), Bothell, Wash. (14.3 percent), Torrance, Calif. (14.3 percent), Mesa, Ariz. (14.3 percent) and Simsbury, Conn. (14.2 percent), and is expected to be completed by February 2015.  Fiscal 2014 operations & maintenance, Navy contract funds in the amount of $3,500 will be obligated at time of award and will expire at the end of the current fiscal year.  This contract was competitively procured via the Federal Business Opportunities website, with seven offers received.  The Naval Surface Warfare Center, Indian Head Explosive Ordnance Disposal Technology Division, Indian Head, Md., is the contracting activity.

Pacific Scientific Energetic Materials, Hollister, Calif. (N00174-14-D-0014); Science Applications International Corp., Lexington, Mass. (N00174-14-D-0015); Martin-Baker Aircraft Co., United Kingdom (N00174-14-D-0016); Nammo Talley, Mesa, Ariz. (N00174-14-D-0017); and General Dynamics Ordnance and Tactical Systems, Bothell, Wash. (N00174-14-D-0018), are each being awarded a firm-fixed-price, indefinite-delivery/indefinite-quantity, multiple-award contract for quality evaluation/surveillance program support.  Each contractor will receive the minimum guaranteed task order amount of $500 at time of award.  These contracts include options, which if exercised, would bring these contracts to an estimated combined value of $66,256,118. If all options are exercised, the estimated ceiling for Pacific Scientific Energetic Materials is $13,055,474; the estimated ceiling for Science Applications International Corp. is $9,646,501; the estimated ceiling for Martin-Baker Aircraft Co. is $12,796,879; the estimated ceiling for Nammo Talley is $14,840,429; and the estimated ceiling for General Dynamics Ordnance and Tactical Systems is $15,916,835.  These five contractors will be given the opportunity to compete for the task orders under the terms and conditions of the awarded contracts.  Work will be performed Hollister, Calif. (20 percent), Lexington, Mass. (20 percent), United Kingdom (20 percent), Mesa, Ariz. (20 percent), and Bothell, Wash. (20 percent), and is expected to be completed by February 2015.   Fiscal 2014 operations & maintenance, Navy contract funds in the amount of $2,500 will be obligated at time of award and will expire at the end of the current fiscal year.  This contract was competitively procured via the Federal Business Opportunities website, with seven offers received.  The Naval Surface Warfare Center, Indian Head Explosive Ordnance Disposal Technology Division, Indian Head, Md., is the contracting activity.

Engility Corp., Chantilly, Va., is being awarded a $39,969,545 indefinite-delivery/indefinite-quantity contract for electronic warfare (EW) weapons systems modifications for U.S. Navy and Australian EA-6B, EA-18G, E-2C, MH-60R, BAMS, P-8A aircraft, Unmanned Air Systems, flight simulators, training systems, other advanced electronic attack derivatives and initiatives.  Services to be provided include systems engineering, in-service hardware and software engineering, intelligence data analysis, test and evaluation, EW systems development, threat analysis, threat defeat, mission planning, and EW data development.  EW weapons systems modifications include weapon system software, on-call field engineering analysis, test and evaluation, studies and analysis, threat analysis and sensor intelligence mission data files, jammer techniques development and logistics for distribution of Operational Flight Programs.  Work will be performed at the Naval Air Warfare Center Weapons Division, Point Mugu, Calif. (90 percent) and Naval Air Station Whidbey Island, Wash. (5 percent), and Nellis Air Force Base, Las Vegas, Nev. (5 percent), and is expected to be completed in February 2019.  Fiscal 2014 research, development, test, and evaluation, Navy funding in the amount of $800,000 are being obligated on this award, none of which will expire at the end of the current fiscal year.  This contract was competitively procured via an electronic request for proposals; three offers were received.  This contract combines purchases for the U.S. Navy ($37,971,068; 95 percent) and the Government of Australia ($1,998,477; 5 percent) under the Foreign Military Sales Program.   The Naval Air Warfare Center, Weapons Division, China Lake, Calif., is the contracting activity (N68936-14-D-0015).

Lockheed Martin Corp., Baltimore, Md., is being awarded a $23,555,382 modification to previously awarded Basic Ordering Agreement (N00024-12-G-4329) for the accomplishment of fleet maintenance sustainment support for littoral combat ships.  Work will be performed in San Diego, Calif., and is expected to be completed by September 2014.  Fiscal 2013 and 2014 operations & maintenance, Navy contract funds in the amount of $23,555,382 will be obligated at time of award and will expire at the end of the current fiscal year.  The Southwest Regional Maintenance Center, San Diego, Calif., is the contracting activity.

BAE Systems Land and Armaments L.P., Minneapolis, Minn., is being awarded a $19,227,000 modification to previously awarded contract (N00024-12-C-5311) to exercise an option for hardware and engineering services in support of the Advanced Gun System.  BAE will provide mounts for the magazine upper pallet hoist, gun cooling assembly, centerline hoist, and engineering services to support those efforts.  Work will be performed in Louisville, Ky. (90 percent), Minneapolis, Minn. (6 percent), and Cordova, Ala. (4 percent), and is expected to be completed by January 2018.  Fiscal 2014 shipbuilding and conversion, Navy contract funds in the amount of $19,227,000 will be obligated at time of award will not expire at the end of the current fiscal year.  The Naval Sea Systems Command, Washington., D.C., is the contracting activity.

York International Corp., York, Pa., is being awarded an $11,100,082 indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee/firm-fixed-price contract for the procurement of engineering and technical support services to provide research, development, testing and evaluation for shipboard air conditioning and refrigeration modernization programs.  Work will be performed in York, Pa., and is expected complete by February 2017.  Fiscal 2014 research, development, test & evaluation funding in the amount of $935,000 will be obligated at time of award and will not expire at the end of the current fiscal year.  This contract was not competitively procured in accordance with 10 U.S.C. 2304(c)(1) and FAR 6.302-1 - as there is only one responsible source and no other supplies or services will satisfy agency requirements.  The Naval Surface Warfare Center, Carderock Division, Ship System Engineering Station, Philadelphia, Pa., is the contracting activity (N65540-14-D-0006).


EnerSys Energy Products Inc., Warrensburg, Mo., has been awarded a maximum $40,263,852 fixed-price with economic-price-adjustment contract for storage batteries.  This contract is a competitive acquisition, and two offers were received.  This is a three-year base contract with no option periods.  Location of performance is Missouri with a Feb. 20, 2017 performance completion date.  Using military service is Army.  Type of appropriation is fiscal year 2014 defense working capital funds.  The contracting activity is the Defense Logistics Agency Land and Maritime, Columbus, Ohio, (SPE7LX-14-D-0020).

Sysco Seattle, Kent, Washington, has been awarded a maximum $24,400,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for prime vendor full line food distribution for customers in the Alaska area. This contract is a sole-source acquisition and is an extension of two contracts (SPM300-08-D-3160 and SPM300-13-D-3641).  Location of performance is Alaska with a Feb. 22, 2015 performance completion date.  Using military services are Army, Navy and Air Force.  Type of appropriation is fiscal 2014 defense working capital funds.  The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPM300-14-D-3738).

Exide Technologies, Milton, Ga., has been awarded a maximum $18,546,992 fixed-price with economic-price-adjustment contract for storage batteries.  This contract is a competitive acquisition, and two offers were received.  This is a three-year base contract with no option periods.  Location of performance is Georgia with a Feb. 20, 2017 performance completion date.  Using military service is Army.  Type of appropriation is fiscal year 2014 defense working capital funds.  The contracting activity is the Defense Logistics Agency Land and Maritime, Columbus, Ohio, (SPE7LX-14-D-0021).

Rockwell Collins-ESA Vision Systems, Fort Worth, Texas, has been awarded a maximum $12,235,755 modification (01) on delivery order (0009) to firm-fixed-price contract (SPRWA1-11-D-0007).  The modification adds various items in support of the joint helmet mounted cueing system.  Delivery order 0009 was awarded Jan. 21, 2014 with a total value of $14,666,736.  The revised total based on this modification is $26,902,491.  This is a sole-source acquisition.  Locations of performance are Texas, Oregon, and Israel with an Aug. 31, 2015 performance completion date.  Using military service is Navy.  Type of appropriation is fiscal year 2014 Navy aircraft procurement and foreign military sales funds.  The contracting activity is the Defense Logistics Agency Aviation, Robins Air Force Base, Ga.

Actavis Pharma, Parsippany, N.J., has been awarded a maximum $7,692,983 modification (P00042) exercising the fourth option year on a one-year base contract (SPM2D0-10-D-0001) with seven one-year option periods for various pharmaceutical products.  This is a fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract.  Location of performance is New Jersey with a Feb. 24, 2015 performance completion date.  Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies.  Type of appropriation is fiscal year 2014 war-stopper funds.  The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.


More than $6.8 million in back wages, liquidated damages to be paid to 
current & former Chickie's & Pete's employees for serious wage violations
US Labor Dept. finds popular bar & restaurant chain improperly took tips from servers

PHILADELPHIA — Philadelphia sports bar and restaurant chain Chickie's & Pete's has signed a consent judgment agreeing to pay current and former employees more than $6.8 million in back wages and damages for improperly taking tips from servers and violating federal minimum wage, overtime and record-keeping requirements. Following one of the U.S. Department of Labor's largest tipped employee investigations in recent years, the company and its owner, Peter Ciarrocchi, Jr., have agreed to pay $6,842,412 to 1,159 employees at nine of the company's locations, plus a $50,000 civil money penalty. The proposed consent judgment has been filed in the U.S. District Court for the Eastern District of Pennsylvania and is subject to the review and approval by the court.

"The egregious actions by Chickie's & Pete's harmed real people and violated the promise that a fair day's work deserves a fair day's pay," said U.S. Secretary of Labor Thomas E. Perez. "Restaurant servers are among the lowest paid workers in this country, with many earning incomes below the poverty line. Tipped workers deserve better and this action shows that the Department of Labor is ready to stand up for them."

Under the Fair Labor Standards Act, tips are the property of the employee who receives them; however, restaurant operators can benefit by claiming a credit based on the tips towards their obligation to pay those employees the full minimum wage. If an employee's tips combined with the employer's direct wages do not equal the minimum wage, the employer must make up the difference during the pay period. An employer that claims a tip credit is required to pay a tipped employee only $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. The federal minimum wage of $7.25 per hour was last increased in 2009 and the federal tip credit's cash wage requirement of $2.13 has not been increased since 1991.

"When employers exploit tipped workers, they not only harm their employees who are working hard to earn a living, but also take advantage of the trust of their customers," said Laura Fortman, principal deputy administrator for the department's Wage and Hour Division. "Customers might not realize it, but their tips frequently are paying part of their servers' wages, not just giving them a little extra to go with their pay. Chickie's and Pete's behavior is troubling because they both unlawfully took tips from their workers and failed to pay them even the $2.13 per hour the law requires when an employer takes a tip credit."

Investigators from the Wage and Hour Division's Philadelphia and Southern New Jersey offices conducted investigations at locations in Northeast Philadelphia, South Philadelphia, Philadelphia International Airport, Parx Casino in Bensalem, Pa., Warrington, Pa., Drexel Hill, Pa., Audubon, Pa., Egg Harbor Township, N.J., and Bordentown, N.J. Investigators found that the company improperly retained a fixed portion of the tips servers received from customers.

The investigation disclosed that the company required servers to contribute a portion of their tips to an improper "tip pool," or tip-sharing arrangement, which was approximately between 2 percent and 4 percent of the server's daily table sales. The owner illegally retained approximately 60 percent of the tip pool. This amount had come to be known as "Pete's Tax" and was required to be paid to the manager in cash at the end of each shift, even if the server received all tips on credit cards and therefore did not have cash on hand. In some cases, the company required employees to use their own money to contribute to this pool by withdrawing cash from a nearby ATM or borrowing from another server.

Additionally, servers and bartenders were paid only a flat rate of $15 per shift at all locations except for Chickie's and Pete's airport establishment — an amount that was not sufficient in all cases to even cover the minimum cash wage of $2.13 per hour that must be paid to a tipped employee when an employer claims a tip credit under federal law. Additionally, the employer failed to pay the required overtime wages to these employees when they worked in excess of 40 hours in a week. Investigators also determined that employees were not paid for time spent in mandatory meetings and training, and were improperly required to pay for uniforms.

Under the provisions of the consent judgment filed in U.S. District Court for the Eastern District of Pennsylvania, and subject to court approval, the company will pay minimum wage and overtime back wages and is required to return the improperly retained tips to the servers, as well as pay liquidated damages. In addition, the company has agreed to enhanced compliance, including:
External compliance monitoring for an 18-month period;

Internal compliance monitoring for an additional 18-month period;

Training for all employees on their rights under the FLSA;

Providing a statement to any employee required to contribute to a tip pool detailing the amounts that were contributed by the employee, the job categories of workers included in the tip pool and the specific percentage each category receives; and Peter Ciarrocchi, Jr., will write an article for a restaurant trade publication that addresses an employer's obligations under the FLSA.

The consent judgment also calls for Chickie's & Pete's and Ciarrocchi to be permanently enjoined and restrained from violating the provisions of the FLSA in the future.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers also are required to provide employees notice about the FLSA tip credit provisions, to maintain accurate time and payroll records and to comply with the hours, hazardous orders and other restrictions applying to workers under age 18.


Obama administration announces final rule regarding Affordable Care Act 90-day waiting period limitation

WASHINGTON — The U.S. Departments of Labor, Treasury, and Health and Human Services have announced the publication of final regulations implementing a 90-day limit on waiting periods for health coverage.

"This is a common sense measure that helps workers access employer-sponsored health insurance while providing employers flexibility," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi.

The final regulations require that no group health plan or group health insurance issuer impose a waiting period that exceeds 90 days after an employee is otherwise eligible for coverage. The rules do not require coverage be offered to any particular individual or class of individuals.

To ensure that eligibility conditions based solely on the passage of time are not used to evade the waiting period limit, the rules state that such conditions cannot exceed 90 days. Other conditions for eligibility are generally permissible, such as meeting certain sales goals, earning a certain level of commission, or successfully completing an orientation period.

Additionally, requiring employees to complete a certain number of hours before becoming eligible for coverage is generally allowed as long as the requirement is capped at 1200 hours. The rules also address situations in which it cannot be determined that a new employee will be working full-time.

The departments are issuing a companion proposed rule that would limit the maximum duration of an otherwise permissible orientation period to one month. This proposal will be open for public comment.


Statement on Court Filing by SEC to Protect Whistleblowers From Retaliation
 Sean McKessy
Chief, Office of the Whistleblower

Feb. 20, 2014

“The Commission’s whistleblower program both encourages whistleblowers to report wrongdoing and protects them when they do.  Today's filing makes clear that under SEC rules, whistleblowers are entitled to protection regardless of whether they report wrongdoing to their employer or the Commission.  The Commission's brief supports the anti-retaliation protections under the Dodd-Frank Act that I believe are critical to the success of the SEC's whistleblower program.”


Remarks by the President at DGA Dinner
The St. Regis
Washington, D.C.

February 20, 2014
5:39 P.M. EST

THE PRESIDENT:  Hello, everybody.  (Applause.)  Thank you.  Thank you so much.  (Applause.)   Everybody have a seat.  Have a seat.  Well, it is wonderful to see all of you.  It is always a great weekend when the governors come into town.  And tonight, we’re with some of the best -- and a few of their better halves. And I’m so grateful to all of you for all the great work you’re doing.

And I’m grateful for the people who are here to support our outstanding governors.  I want to thank our DGA chair, Peter Shumlin, for the great work that he’s doing up in Vermont.  (Applause.)  His neighbor, Maggie Hassan, who is the vice chair, and the first time I saw her was another state senator just like me.  And she’s doing great up in New Hampshire, so we are very, very proud of her.  (Applause.)

I’m not going to give a long speech because I think we want to make this more of a conversation.  I want to take out some time for questions and answers.  But the main thing I want to do is just to say thank you for all of you coming out and supporting Democratic governors.

And Peter alluded to this, but let me underscore it.  Folks here in Washington like to talk abstractions.  You get into a lot of ideological debates.  The problem for governors is that they actually have to do something and they just can’t talk.  And they have to be practical.  They have to understand a wide range of issues that are affecting a wide range of constituents.  And the work that these governors do each and every day are having a concrete impact in helping to shape the debate in ways that are extraordinary.

And the challenge we have sometimes in politics is that the national politicians and the national races get all the attention.  But so often, the action -- how our policies are actually impacting our constituents day to day -- are being determined by governors and state legislatures.

And if there’s one message I want to deliver today to every Democrat and every person who’s interested in supporting Democratic policies, it’s that you got to pay attention to the states.  You have to stay focused on what’s happening in the states, and you especially have to pay attention to what’s happening in the states during midterm elections.  Because we know how to win national elections, but all too often, it’s during these midterms where we end up getting ourselves into trouble, because I guess we don’t think it’s sexy enough.  But the fact of the matter is, is that that’s where so much of the action is.

And Democratic governors are testing ideas, and they are innovating and implementing critical policies all across the board.  And that’s work that obviously is made tougher when you don’t always have a Congress that is cooperating.  And what binds together all these Democratic governors is a pretty simple idea, and that’s the idea of opportunity -- the idea that if you work hard in this country, no matter who you are, where you come from, what you look like, what your last name is, you can make it.

And we recognize as Democrats and you recognize as governors that government can’t do it all or shouldn’t even try to do it all.  But government has a critical role to play in helping provide communities and families the tools they need to succeed, if they’re willing to work hard, if they’re acting responsibly.

And that’s as important as ever today, because what we are seeing right now is the economy is slowly healing from what was the worst crisis since the Great Depression.  We’ve now created over 8.5 million jobs since the depths of the recession.  Businesses are optimistic this year.  CEOs say they want to start reinvesting.  We’ve got an unemployment rate that is as low as it’s been since 2005 and is continuing to drop.

But despite all that, for ordinary families -- for a whole lot of the constituents of these governors here -- folks are still worried.  They’re still anxious, in part because if they do have a job, their wages and their incomes have flat-lined for over a decade now.  They don’t feel as if they’re getting ahead. In fact, they feel like they’re working harder and harder just to stay in place or to avoid slipping back.

And if you look at it statistically -- everybody here knows some of the numbers -- folks at the very top are doing better and better, but ordinary folks, that middle class that’s always been the core of our society and made America different, they’re still feeling squeezed.  And so everything we do this year, next year, the year after that, and as long as we have the opportunity to serve has to be focused on how are we expanding opportunity; how are we growing that middle class; how are we building an economy that is good for everybody, not just some; how are we making sure that folks, whatever their station in life, can succeed if they’re willing to work hard.

And fortunately, we’ve got a bunch of Democratic governors who have been willing to implement what I’ve called an opportunity agenda and that I talked about in the State of the Union:  Number one, that we’re creating more good jobs out here through manufacturing and clean energy, and making sure that we’re rebuilding our infrastructure -- our bridges, our roads, our ports -- all across the country.

Number two -- making sure that we are giving every child in this country the best education they can get, because we know in the 21st century that’s what it’s going to take for them to compete.  Number three -- training folks throughout their lives with the skills they need to get those good jobs.  Number four -- making sure that work pays; that if you’re out working hard, you’re not in poverty and you have a chance to get ahead.

Those simple precepts should be guiding everything that we do this year and for years to come, and that’s what we should be talking about as we’re supporting incumbent Democratic governors and candidates for Democratic governors across the country, open seats.

Now, unfortunately, state by state, Republican governors are implementing a different agenda.  They’re pursuing the same top-down, failed economic policies that don’t help Americans get ahead.  They’re paying for it by cutting investments in the middle class, oftentimes doing everything they can to squeeze folks who are bargaining on behalf of workers.  Some of them, their economies have improved in part because the overall economy has improved, and they take credit for it instead of saying that Obama had anything to do with it.  I get that.  There’s nothing wrong with that.  But they’re making it harder for working families to access health insurance.  In some states, they’re making it harder even for Americans to exercise their right to vote.

And we’ve got a Congress that prefers to say “no” rather than “yes” right now.  They don’t have an affirmative agenda.  Their main strategy is to just try to do nothing and see if they can -- falsely -- give people a sense that somehow the policies that we’re trying to pursue aren’t working for them.

So the good news is that we are now talking about the issues that are on the minds of people every single day around the kitchen table.  And I’ll just give you a couple of examples of where I see significant progress all across the country, even if it hasn’t been realized in every state.

Number one is on the minimum wage.  Three out of four Americans support raising the minimum wage.  The majority of not just Democrats but independents and Republicans think it’s important for us to make sure that if you work full-time you’re not in poverty.  And we’ve been seeing businesses around the country that are starting to recognize it’s good for their bottom lines to do right by their employees.  Yesterday, the Gap became the latest business to raise wages for its U.S. employees.

But even though more than half of Republicans in America support raising the minimum wage, Republicans in Congress don’t want to vote for it -- even though the current proposal in Congress would give more than 16 million Americans a raise.  So I recently required federal contractors to pay their employees a wage of at least $10.10 an hour.  We’ve got Democratic governors that are doing their part.

So, last year, Jerry Brown signed America’s first $10 an hour minimum wage into law in California.  Dan Malloy in Connecticut, and Martin O’Malley in Maryland, who are both here tonight, they’re fighting to raise their state’s wages, as well. It’s no surprise then that most of the states that have a higher minimum wage, higher than the federal minimum wage, are governed by Democrats.

Republican governors are out of touch with their own citizens on this.  Just last November, you had a ballot initiative to raise the minimum wage in New Jersey.  Governor Christie opposed it; it got 60 percent of the vote -- because voters understood this is the right thing to do, and it will be good for the economy, not bad for the economy.  It will be good because suddenly workers now have a little more money in their pockets and they’re out there and businesses have more customers.

And when it comes to making sure that Americans have access to affordable health care, we’re seeing the same pattern.  Peter alluded to it.  Right now, we’ve already got close to 4 million Americans who have signed up for exchanges.  We’ve got 3 million Americans who were able to stay on their parents’ plan because of the law.  We’ve got close to 7 million Americans who have access to health care for the first time because of Medicaid expansion. So we’ve already got well over 10 million Americans just in the first few months, despite problems with in the first month and a half, who suddenly have the financial security that in some cases they’ve never known before.

And we’re doing it while reducing the cost -- the health care inflation that’s out there and that’s been plaguing us and hurting our businesses, our families, and our economies for a very long time.  We’ve seen now three consecutive years of the lowest increase in health care inflation in the last 50 -- even as we’re covering more people.

Now, as you know, there have been a lot of governors and state legislators that are still resisting doing right by their people.  But the good news is, is that we’ve got a bunch of Democratic governors who are willing to take on this fight.  Terry McAuliffe in Virginia, I know that he is fighting this good fight.  And we want to make sure that all across the country, we are supporting governors who are saying, I’m going to set politics aside, I’m going to do what’s right for my constituents.

And, ultimately, that’s what the American people are interested in.  They’re not interested in ideological battles.  What they’re interested in is action that is focused on their lives, on their hopes, on their aspirations.  That’s what they want us to focus on each and every day.  And that’s what we are offering -- more jobs, better training, better education, better pay, more ladders of opportunity for folks who currently don’t have opportunity.  That’s what our agenda is about, and it is an agenda that resonates with the American people.

But we’re going to need your help to make sure that it moves forward.  And we wouldn’t be able to do that unless we had already some outstanding Democratic governors who are here and have made me very proud.  They are great partners with me.

I appreciate Peter’s sentiment.  In some cases, in some states there are some fierce battles when you expand something like health care.  The fact that you guys on the front lines are willing to stand up courageously means the world to me.  More importantly, it’s going to mean the world to your constituents and future generations.

So thank you, everybody.  I appreciate it.  I’m proud of you.  (Applause.)



U.S. Marshals Holding National Jewelry Sale
Solid 24-Karat Gold Nuts and Bolts, Gold and Silver Bullion and Coins, Diamonds, Fine Jewelry and Watches from Federal Crime Cases Nationwide to be Sold via Live and Web Simulcast Auction

Washington – The U.S. Marshals Service is selling nearly 300 lots of gold and silver bullion and coins, diamonds, fine jewelry and watches from federal crime cases nationwide in a live and Web simulcast auction Saturday at 12:15 p.m. CST at the Fort Worth Convention Center, Texas, and online at

A public preview will be held Saturday from 8:30 a.m. to noon CST at the Fort Worth Convention Center, 1201 Houston St., Room 204A, Fort Worth, TX 76102. Registration and pre-bidding are open now.

One item of note is lot 5, 23 pieces of 24-karat gold nuts, bolts and other hardware, painted black or silver as a disguise, from a drug case in New Jersey. Weighing just over four pounds (1,818 grams), the starting bid is $54,060.

Some other cases with assets being sold are as follows:

Philip Wooten, former Army staff sergeant stationed at Fort Bragg, N.C., stole $210,000 in government funds while deployed in Afghanistan, lot 211, diamond ring set with a starting bid of $29,750
Jean Joseph Ibrahim, former chief financial officer of Trustin Technology in Irvine, Calif., embezzled $15 million from the company, 12 bars of gold bullion (1 kilo each), lots 76, 77, 101, 102, 126, 127, 151-156, worth approximately $500,000 total

Drug-related cases out of northern Texas: gold pellets, lot 264; silver bar, lot 270; and gold bar, lot 271

The U.S. Marshals Service consolidates pieces from cases nationwide and holds a large auction several times a year. Proceeds generated from the auctions are used to compensate victims of crimes and supplement law enforcement programs.
For information on the auction, including a catalog, pictures, registration and terms and conditions, go to

For information on the criminal cases in this news release:

The U.S. Marshals Service is responsible for managing and selling seized and forfeited properties acquired by federal criminals through illegal activities. Proceeds generated from asset sales are used to compensate victims, supplement funding for law enforcement initiatives and support community programs. As part of the Department of Justice’s Asset Forfeiture Program, the Marshals currently manage more than 22,000 assets with a value of $2 billion.



Migratory birds and military aircraft often fly in a V-shaped formation. The “V” formation greatly boosts the efficiency and range of flying birds, because all except the first fly in the upward motion of air -- called upwash -- from the wingtip vortices of the bird ahead.

In this image of a dune field on Mars in a large crater near Mawrth Vallis, some of the dunes appear to be in a V-shaped formation. For dune fields, the spacing of individual dunes is a function of sand supply, wind speed, and topography. This image was acquired by the HiRISE camera aboard NASA's Mars Reconnaissance Orbiter on Dec. 30, 2013. The University of Arizona, Tucson, operates the HiRISE camera, which was built by Ball Aerospace & Technologies Corp., Boulder, Colo. NASA's Jet Propulsion Laboratory, a division of the California Institute of Technology in Pasadena, manages the Mars Reconnaissance Orbiter Project for the NASA Science Mission Directorate, Washington. > More information and image products Image Credit-NASA-JPL-Caltech-Univ. of Arizona Caption-Alfred McEwen