Tuesday, July 2, 2013
RECENT U.S. NAVY PHOTOS
130629-N-ZG290-010
ARABIAN GULF (June 29, 2013) Sonar Technician 2nd Class Brennan Lukas, from Ventura, Calif., prepares to test fire a surface vessel torpedo tube launcher aboard the guided-missile destroyer USS Higgins (DDG 76). Higgins is deployed to the U.S. 5th Fleet area of responsibility promoting maritime security operations, theater security cooperation efforts and support missions for Operation Enduring Freedom. (U.S. Navy photo by Mass Communication Specialist 2nd Class Devin Wray/Released)
130627-N-QL471-099
ARABIAN GULF (June 27, 2013) The guided-missile cruiser USS Monterey (CG 61) fires a Close-In Weapons System (CIWS) during a live-fire exercise. Monterey is deployed in support of maritime security operations and theater security cooperation efforts in the U.S. 5th Fleet area of responsibility. (U.S. Navy photo by Mass Communication Specialist 3rd Class Billy Ho/Released)
ATTORNEY GENERAL HOLDER'S STATEMENT ON U.S. V. WINDSON
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, June 28, 2013
Statement of Attorney General Eric Holder on the Implementation of the Supreme Court’s Decision in United States v. Windsor
Attorney General Eric Holder issued the following statement regarding the United States Office of Personnel Management (OPM) guidance to Federal agencies. On June 26, 2013, the Supreme Court issued a landmark decision in United States v. Windsor, holding Section 3 of the Defense of Marriage Act, known as DOMA, unconstitutional. As a result of this decision, the Federal government will now be able to extend benefits to Federal employees and annuitants who have legally married a spouse of the same sex.
"Today’s announcement represents a historic step toward equality for all American families. The Supreme Court ruled this week that Americans in same-sex marriages are entitled to equal protection and equal treatment under the law. By extending health insurance and other important benefits to federal employees and their families, regardless of whether they are in same-sex or opposite-sex marriages, the Obama Administration is making real the promise of this important decision.
"These initial changes in federal benefits will make a meaningful, positive difference in the lives of many. But this is only the beginning. As the President directed, the Department of Justice will continue to coordinate with other federal agencies to implement this ruling as swiftly and smoothly as possible. I look forward to sharing additional information as it becomes available. We will never stop fighting to ensure equality, opportunity, and – above all – justice for everyone in this country."
Friday, June 28, 2013
Statement of Attorney General Eric Holder on the Implementation of the Supreme Court’s Decision in United States v. Windsor
Attorney General Eric Holder issued the following statement regarding the United States Office of Personnel Management (OPM) guidance to Federal agencies. On June 26, 2013, the Supreme Court issued a landmark decision in United States v. Windsor, holding Section 3 of the Defense of Marriage Act, known as DOMA, unconstitutional. As a result of this decision, the Federal government will now be able to extend benefits to Federal employees and annuitants who have legally married a spouse of the same sex.
"Today’s announcement represents a historic step toward equality for all American families. The Supreme Court ruled this week that Americans in same-sex marriages are entitled to equal protection and equal treatment under the law. By extending health insurance and other important benefits to federal employees and their families, regardless of whether they are in same-sex or opposite-sex marriages, the Obama Administration is making real the promise of this important decision.
"These initial changes in federal benefits will make a meaningful, positive difference in the lives of many. But this is only the beginning. As the President directed, the Department of Justice will continue to coordinate with other federal agencies to implement this ruling as swiftly and smoothly as possible. I look forward to sharing additional information as it becomes available. We will never stop fighting to ensure equality, opportunity, and – above all – justice for everyone in this country."
U.S. DEDICATES EMBASSY IN BELGRADE, SERBIA
FROM: U.S. STATE DEPARTMENT
United States Dedicates New U.S. Embassy in Belgrade, Serbia
Media Note
Office of the Spokesperson
Washington, DC
July 1, 2013
In an important symbol of America’s commitment to an enduring friendship with the Republic of Serbia, U.S. Ambassador to the Republic of Serbia, Michael D. Kirby, dedicated the new U.S. Embassy in Belgrade today.
Occupying a 10-acre site adjacent to the Beli Dvor, the $149 million multi-building complex provides a secure, state-of-the-art, environmentally-sustainable workplace for over 350 embassy personnel.
Zimmer Gunsul Frasca Architects, LLP was the concept design architect and The Louis Berger Group of Washington, D.C. was the architect of record. The project was constructed by Framaco International of Rye Brook, New York.
The new facility incorporates numerous sustainable features to reduce operating costs and conserve resources, most notably a storm water detention pond; solar hot water technology; low-flow plumbing fixtures; and the careful selection of plantings to reduce the amount of irrigation needed. The facility has been registered with the U.S. Green Building Council for Leadership in Energy and Environmental Design (LEED®) certification.
Since 1999, as part of the Department’s Capital Security Construction Program, OBO has completed 103 new diplomatic facilities and has an additional 39 projects in design or under construction.
OBO’s mission is to provide safe, secure, and functional facilities that represent the U.S. government to the host nation and support our staff in the achievement of U.S. foreign policy objectives. These facilities should represent American values and the best in American architecture, engineering, technology, sustainability, art, culture, and construction execution.
United States Dedicates New U.S. Embassy in Belgrade, Serbia
Media Note
Office of the Spokesperson
Washington, DC
July 1, 2013
In an important symbol of America’s commitment to an enduring friendship with the Republic of Serbia, U.S. Ambassador to the Republic of Serbia, Michael D. Kirby, dedicated the new U.S. Embassy in Belgrade today.
Occupying a 10-acre site adjacent to the Beli Dvor, the $149 million multi-building complex provides a secure, state-of-the-art, environmentally-sustainable workplace for over 350 embassy personnel.
Zimmer Gunsul Frasca Architects, LLP was the concept design architect and The Louis Berger Group of Washington, D.C. was the architect of record. The project was constructed by Framaco International of Rye Brook, New York.
The new facility incorporates numerous sustainable features to reduce operating costs and conserve resources, most notably a storm water detention pond; solar hot water technology; low-flow plumbing fixtures; and the careful selection of plantings to reduce the amount of irrigation needed. The facility has been registered with the U.S. Green Building Council for Leadership in Energy and Environmental Design (LEED®) certification.
Since 1999, as part of the Department’s Capital Security Construction Program, OBO has completed 103 new diplomatic facilities and has an additional 39 projects in design or under construction.
OBO’s mission is to provide safe, secure, and functional facilities that represent the U.S. government to the host nation and support our staff in the achievement of U.S. foreign policy objectives. These facilities should represent American values and the best in American architecture, engineering, technology, sustainability, art, culture, and construction execution.
COMMUNICATIONS UPGRADE FOR B-52 STRATOFORTRESS BOMBERS
FROM: U.S. DEPARTMENT OF DEFENSE,
B-52s to receive communications upgrade
by Mike W. Ray
72nd Air Base Wing Public Affairs
6/28/2013 - TINKER AIR FORCE BASE, Okla. (AFNS) -- Installation of a communications system upgrade earmarked for the venerable U.S. Air Force B-52 Stratofortress bomber fleet is scheduled to start here in July.
The Combat Network Communications Technology system will enable aircrews to send and receive information via satellite links, allowing them to change mission plans and retarget weapons while in flight. In addition, pilots will be able to interact better with other aircraft and with ground forces. Currently, mission information must be uploaded to a B-52 before each flight.
Other improvements will include a state-of-the-art computing network with workstations at each crew position and an integrated digital interphone with increased capacity that will allow crew members to talk with each other over headsets equipped with noise-canceling technology.
The $76 million CONECT upgrade will be performed by Boeing and covers a low-rate initial production of the first CONECT kits, along with spare parts, maintenance and service at Tinker AFB here.
Low-rate initial production is the first effort in the production phase of the program. The first eight CONECT kits in lot 1 will establish an initial production base for the system and will permit an orderly increase in the production rate for the CONECT system that is sufficient to lead to full-rate production upon successful completion of operational testing.
The contract for lot 2 is projected to be awarded in May 2014, for 10 CONECT kits. Then the full-rate production contract, projected for award in January 2015, will be for 10 CONECT kits.
Ultimately, CONECT is expected to be installed on all B-52H in the fleet.
The first B-52H to receive a CONECT kit will enter programmed depot maintenance at Tinker AFB in July and is scheduled to depart PDM next April. Each upgrade will take an estimated nine months to complete.
A CONECT kit was installed in a modified B-52 at Edwards AFB, Calif., and has been field tested for several years, Boeing spokesperson Jennifer Hogan said.
The B-52H was delivered to the Air Force in 1961-62. The aircraft have been kept aloft through regular maintenance and periodic upgrades. For example, GPS capabilities were incorporated into their navigation systems in the late 1980s.
"We are bringing this amazing workhorse of a bomber into the digital age and giving our customer the infrastructure necessary for continued future improvements," said Scot Oathout, Boeing's B-52 program director.
Citing engineering studies, Air Force officials said the heavy bombers could keep flying for at least another quarter-century.
B-52s to receive communications upgrade
by Mike W. Ray
72nd Air Base Wing Public Affairs
6/28/2013 - TINKER AIR FORCE BASE, Okla. (AFNS) -- Installation of a communications system upgrade earmarked for the venerable U.S. Air Force B-52 Stratofortress bomber fleet is scheduled to start here in July.
The Combat Network Communications Technology system will enable aircrews to send and receive information via satellite links, allowing them to change mission plans and retarget weapons while in flight. In addition, pilots will be able to interact better with other aircraft and with ground forces. Currently, mission information must be uploaded to a B-52 before each flight.
Other improvements will include a state-of-the-art computing network with workstations at each crew position and an integrated digital interphone with increased capacity that will allow crew members to talk with each other over headsets equipped with noise-canceling technology.
The $76 million CONECT upgrade will be performed by Boeing and covers a low-rate initial production of the first CONECT kits, along with spare parts, maintenance and service at Tinker AFB here.
Low-rate initial production is the first effort in the production phase of the program. The first eight CONECT kits in lot 1 will establish an initial production base for the system and will permit an orderly increase in the production rate for the CONECT system that is sufficient to lead to full-rate production upon successful completion of operational testing.
The contract for lot 2 is projected to be awarded in May 2014, for 10 CONECT kits. Then the full-rate production contract, projected for award in January 2015, will be for 10 CONECT kits.
Ultimately, CONECT is expected to be installed on all B-52H in the fleet.
The first B-52H to receive a CONECT kit will enter programmed depot maintenance at Tinker AFB in July and is scheduled to depart PDM next April. Each upgrade will take an estimated nine months to complete.
A CONECT kit was installed in a modified B-52 at Edwards AFB, Calif., and has been field tested for several years, Boeing spokesperson Jennifer Hogan said.
The B-52H was delivered to the Air Force in 1961-62. The aircraft have been kept aloft through regular maintenance and periodic upgrades. For example, GPS capabilities were incorporated into their navigation systems in the late 1980s.
"We are bringing this amazing workhorse of a bomber into the digital age and giving our customer the infrastructure necessary for continued future improvements," said Scot Oathout, Boeing's B-52 program director.
Citing engineering studies, Air Force officials said the heavy bombers could keep flying for at least another quarter-century.
THE 400TH COMBAT SORTIE
FROM: U.S. DEFENSE DEPARTMENT
Face of Defense: Flight Engineer Reaches Combat Sortie Milestone
By Air Force Staff Sgt. Joshua J. Garcia
380th Air Expeditionary Wing
SOUTHWEST ASIA, June 28, 2013 - A flight engineer assigned to the 908th Expeditionary Air Refueling Squadron here flew his 400th combat sortie recently.
Air Force Master Sgt. Brian Fahey, who reached the milestone June 14, has accumulated his total flying on two different aircraft platforms. He flew his 255th combat sortie on the KC-10 Extender tanker jet in support of Operation Enduring Freedom. Before that, he flew 145 combat missions as a flight engineer for the MH-60 Pave Low helicopter.
Fahey said he appreciates the opportunities he has had to support two distinct missions.
"Flying on the Pave Lows and being part of the Air Force Special Operations Command were the most challenging things I ever did in my life; their mission is so unique," he said. The KC-10 mission has provided him with a different perspective on the Air Force and a chance to see the world, he added.
As a flight engineer, Fahey monitors the engines and other critical flight systems while the aircraft is in flight. Working alongside his pilots, Fahey ensures the aircraft is fully functional throughout missions. The engineer must have mechanical and technical knowledge on the aircraft systems to provide quick response fixes to any issues while in flight. This knowledge lets the engineer work closely with maintenance personnel, debriefing them on issues an aircraft might have had.
Fahey is one of two flight engineers in the 908th EARS who have reached the milestone. He is the fourth flight engineer and the eighth member in the entire active KC-10 community to have accumulated more than 400 combat sorties.
"It is a significant achievement, one that symbolizes years of hard work through multiple deployments and long periods of separation from family," said Air Force Lt. Col. Mona Alexander, the 908th EARS commander. "Fahey has been flying for 13 years; he has more than 2,000 hours of combat time in the KC-10, and a total of over 4,200 hours flying in the MH-60 and KC-10."
Fahey, who is deployed from Joint Base McGuire-Dix-Lakehurst, N.J., said he is humbled by the experience and continues to strive.
"This is so cool. It really is an awesome feeling hitting a milestone like this," he said. "It makes me reflect back to all the missions I have flown and gives me a feeling that I was part of something bigger than myself."
Fahey said he hopes that reaching this milestone will show younger airmen they can attain their goals.
"It is important to always stay mission ready; I was notified of this deployment a week and a half before I left," he said. "You need to be resilient. Deployments take their toll. By keeping a balance to my work and off-duty time, I am able to handle the stress that comes with flying so many missions."
Always moving forward and thinking about the next generation of leaders, Fahey said, he has entertained the notion of becoming a first sergeant.
"Being a first sergeant is something I have wanted to do since I was an airman," he said. "I had a really good 'shirt' who had a big impact on me. I would love to be able to give back and keep that tradition going."
Fahey said his accomplishments are not due to his work alone, but to the efforts of the entire unit.
"My crew has been awesome on this trip. They have made this deployment so easy to handle," he said. "I have to give my praise to the aircraft maintainers. They are phenomenal. They provide outstanding support day in and day out, regardless of the difficult environment that they are challenged to work in."
With options available, Fahey said, he'll approach the remainder of his military career in the same manner he reached 400 combat sorties: humbled by the experience, but seeing successes as stepping stones to bigger goals.
 |
| Air Force Master Sgt. Brian Fahey performs preflight checks on a KC-10 Extender prior to a June 14, 2013, mission in Southwest Asia. A flight engineer assigned to the 908th Expeditionary Air Refueling Squadron, Fahey manages all systems on the aircraft throughout the flight. U.S. Air Force photo by Staff Sgt. Joshua J. Garcia |
Face of Defense: Flight Engineer Reaches Combat Sortie Milestone
By Air Force Staff Sgt. Joshua J. Garcia
380th Air Expeditionary Wing
SOUTHWEST ASIA, June 28, 2013 - A flight engineer assigned to the 908th Expeditionary Air Refueling Squadron here flew his 400th combat sortie recently.
Air Force Master Sgt. Brian Fahey, who reached the milestone June 14, has accumulated his total flying on two different aircraft platforms. He flew his 255th combat sortie on the KC-10 Extender tanker jet in support of Operation Enduring Freedom. Before that, he flew 145 combat missions as a flight engineer for the MH-60 Pave Low helicopter.
Fahey said he appreciates the opportunities he has had to support two distinct missions.
"Flying on the Pave Lows and being part of the Air Force Special Operations Command were the most challenging things I ever did in my life; their mission is so unique," he said. The KC-10 mission has provided him with a different perspective on the Air Force and a chance to see the world, he added.
As a flight engineer, Fahey monitors the engines and other critical flight systems while the aircraft is in flight. Working alongside his pilots, Fahey ensures the aircraft is fully functional throughout missions. The engineer must have mechanical and technical knowledge on the aircraft systems to provide quick response fixes to any issues while in flight. This knowledge lets the engineer work closely with maintenance personnel, debriefing them on issues an aircraft might have had.
Fahey is one of two flight engineers in the 908th EARS who have reached the milestone. He is the fourth flight engineer and the eighth member in the entire active KC-10 community to have accumulated more than 400 combat sorties.
"It is a significant achievement, one that symbolizes years of hard work through multiple deployments and long periods of separation from family," said Air Force Lt. Col. Mona Alexander, the 908th EARS commander. "Fahey has been flying for 13 years; he has more than 2,000 hours of combat time in the KC-10, and a total of over 4,200 hours flying in the MH-60 and KC-10."
Fahey, who is deployed from Joint Base McGuire-Dix-Lakehurst, N.J., said he is humbled by the experience and continues to strive.
"This is so cool. It really is an awesome feeling hitting a milestone like this," he said. "It makes me reflect back to all the missions I have flown and gives me a feeling that I was part of something bigger than myself."
Fahey said he hopes that reaching this milestone will show younger airmen they can attain their goals.
"It is important to always stay mission ready; I was notified of this deployment a week and a half before I left," he said. "You need to be resilient. Deployments take their toll. By keeping a balance to my work and off-duty time, I am able to handle the stress that comes with flying so many missions."
Always moving forward and thinking about the next generation of leaders, Fahey said, he has entertained the notion of becoming a first sergeant.
"Being a first sergeant is something I have wanted to do since I was an airman," he said. "I had a really good 'shirt' who had a big impact on me. I would love to be able to give back and keep that tradition going."
Fahey said his accomplishments are not due to his work alone, but to the efforts of the entire unit.
"My crew has been awesome on this trip. They have made this deployment so easy to handle," he said. "I have to give my praise to the aircraft maintainers. They are phenomenal. They provide outstanding support day in and day out, regardless of the difficult environment that they are challenged to work in."
With options available, Fahey said, he'll approach the remainder of his military career in the same manner he reached 400 combat sorties: humbled by the experience, but seeing successes as stepping stones to bigger goals.
Monday, July 1, 2013
NSA LEADER WARNS OF CYBER ATTACKS AT CYBER SYMPOSIUM
FROM: U.S. DEPARTMENT OF DEFENSE,
Nation Must Defend Cyber Infrastructure, Alexander Says
By Claudette Roulo
American Forces Press Service
WASHINGTON, June 28, 2013 - The United States must have a transparent debate on how it will protect itself in cyberspace, the director of the National Security Agency said yesterday.
"It is a debate that is going to have all the key elements of the executive branch -- that's DHS, FBI, DOD, Cyber Command, NSA, and other partners -- with our allies and with industry," Army Gen. Keith B. Alexander told an audience at the Armed Forces Communications and Electronics Association International Cyber Symposium in Baltimore.
Everyone involved must figure out how to work together as the cyber threat grows, said Alexander, who also commands U.S. Cyber Command.
In August, the Saudi Aramco oil company was hit with a destructive attack that destroyed the data on more than 30,000 systems, he said. In September, distributed denial of service attacks began on the U.S. financial sector, and a few hundred disruptive attacks have occurred since.
In March, destructive cyberattacks took place against South Korea, the general said.
"If you look at the statistics and what's going on, we're seeing an increase in the disruptive and destructive attacks. And I am concerned that those will continue," he said. "As a nation, we must be ready."
Over the past few years, there has been a convergence of analog and digital data streams, Alexander said. Now, everything is on one network -- information sent by terrorists, soldiers and school teachers travels through the same digital pipelines.
The cyber world is experiencing an exponential rate of change, he said. "It's wonderful," he added. "These capabilities, I think, are going to help us solve cancer. This is a wonderful opportunity."
But, he said, cyberspace also has vulnerabilities. "We're being attacked," Alexander said. "And we've got to figure out how to fix that."
The key to the nation's future in cyber is a defensible architecture, he said, embodied for the Defense Department by the Joint Information Environment. In that environment, mobile devices will securely connect with fixed infrastructure across the services in a way that allows the department to audit and take care of its data much better than it could do in the legacy systems, Alexander said.
The need to create one joint integrated cyber force is "a great reason for having NSA and Cyber Command collocated," Alexander said. Both are based on Fort Meade, Md.
"We can leverage the exceptional talent that the people at NSA have to help build that force," he added, "and that's superb."
Nation Must Defend Cyber Infrastructure, Alexander Says
By Claudette Roulo
American Forces Press Service
WASHINGTON, June 28, 2013 - The United States must have a transparent debate on how it will protect itself in cyberspace, the director of the National Security Agency said yesterday.
"It is a debate that is going to have all the key elements of the executive branch -- that's DHS, FBI, DOD, Cyber Command, NSA, and other partners -- with our allies and with industry," Army Gen. Keith B. Alexander told an audience at the Armed Forces Communications and Electronics Association International Cyber Symposium in Baltimore.
Everyone involved must figure out how to work together as the cyber threat grows, said Alexander, who also commands U.S. Cyber Command.
In August, the Saudi Aramco oil company was hit with a destructive attack that destroyed the data on more than 30,000 systems, he said. In September, distributed denial of service attacks began on the U.S. financial sector, and a few hundred disruptive attacks have occurred since.
In March, destructive cyberattacks took place against South Korea, the general said.
"If you look at the statistics and what's going on, we're seeing an increase in the disruptive and destructive attacks. And I am concerned that those will continue," he said. "As a nation, we must be ready."
Over the past few years, there has been a convergence of analog and digital data streams, Alexander said. Now, everything is on one network -- information sent by terrorists, soldiers and school teachers travels through the same digital pipelines.
The cyber world is experiencing an exponential rate of change, he said. "It's wonderful," he added. "These capabilities, I think, are going to help us solve cancer. This is a wonderful opportunity."
But, he said, cyberspace also has vulnerabilities. "We're being attacked," Alexander said. "And we've got to figure out how to fix that."
The key to the nation's future in cyber is a defensible architecture, he said, embodied for the Defense Department by the Joint Information Environment. In that environment, mobile devices will securely connect with fixed infrastructure across the services in a way that allows the department to audit and take care of its data much better than it could do in the legacy systems, Alexander said.
The need to create one joint integrated cyber force is "a great reason for having NSA and Cyber Command collocated," Alexander said. Both are based on Fort Meade, Md.
"We can leverage the exceptional talent that the people at NSA have to help build that force," he added, "and that's superb."
RECENT U.S. NAVY PHOTOS
Seaman Sophia Lam measures the bearing of navigational land marks during a strait transit aboard the amphibious assault ship USS Kearsarge (LHD 3). Kearsarge is the flagship for the Kearsarge Amphibious Ready Group and, with the embarked 26th Marine Expeditionary Unit, is deployed in support of maritime security operations and theater security cooperation efforts in the U.S. 5th Fleet area of responsibility. U.S. Navy photo by Mass Communication Specialist 2nd Class Corbin J. Shea (Released) 130622-N-SB587-014
A Marine from the 26th Marine Expeditionary Unit (26th MEU) dives near the amphibious assault ship USS Kearsarge (LHD 3) during a swim call after the conclusion of Exercise Eager Lion 2013. Eager Lion 2013 is an annual, multinational exercise designed to strengthen military-to-military relationships and enhance security and stability in the region. Kearsarge is the flagship for the Kearsarge Amphibious Ready Group and, with the embarked 26th MEU, is deployed in support of maritime security operations and theater security cooperation efforts in the U.S. 5th Fleet area of responsibility. U.S. Navy photo by Mass Communication Specialist 2nd Class Corbin J. Shea (Released) 130622-N-SB587-630
JAMES DOBBINS HOLDS PRESS CONFERENCE ON AFGHANISTAN IN NEW DELHI
FROM: U.S. DEPARTMENT OF STATE
Press Conference in New Delhi
Press Conference
Ambassador James Dobbins, Special Representative for Afghanistan and Pakistan
New Delhi, India
June 27, 2013
Ambassador Dobbins: Thank you. It’s a pleasure to be here in New Delhi. I’ve been in the job I currently hold for a month now. I’ve been touring the region for the last week. I went to Doha with Secretary Kerry for discussions there, and then met with President Karzai in Kabul on Monday and with Prime Minister Nawaz and other Pakistani officials on Tuesday. I arrived here yesterday and met with the Foreign Secretary and others from the Foreign Ministry yesterday evening. I’ll meet with the Indian Special Envoy for Afghanistan, Ambassador [Lamba] who is an old friend from a decade ago after this meeting.
I think the last time I was in New Delhi was in a similar capacity. I was the American Special Envoy for Afghanistan also in the immediate aftermath of 9/11 and represented the U.S. in the early diplomacy after 9/11 which led to the Bonn Conference and the establishment of an interim government in Afghanistan which ultimately led to the current constitution and current government in Afghanistan.
So I’ve come back at an interesting and pivotal time, a time when NATO and the United States are transitioning from a combat to an advisory and assistance role in Afghanistan, and maybe more importantly a time when Afghanistan will be going through its first peaceful democratic transition in its national history.
I’ve come to Delhi and hope to be able to come back regularly because India has an important stake in Afghanistan and it has important influence in Afghanistan, and it’s important that we understand Indian views and obviously that India understands our views and that we collaborate as closely as possible which I certainly did 10 years ago or 11 years ago when the Indian representative and I, Ambassador [Lamba] collaborated very closely, very effectively, in bringing about the emergence of an interim government in Afghanistan, and I anticipate that we’ll be able to continue to collaborate on a similar basis. So I’ll be glad to answer questions.
Press: What talks with the Indian [inaudible] the Special Envoy. What [were] talks?
Ambassador Dobbins: The talks pretty much covered all aspects of our relations with Afghanistan and also to some degree with Pakistan where I had just been, but the focus was on Afghanistan.
The issue that’s probably most topical because it’s been in the news lately is the efforts to begin a peace process and I would say that was probably the single, the topic that occupied the most time. But we also talked about other issues including the upcoming Afghan elections and the political transition. And I think while a lot of us concentrate on our attention on both the possible peace process on the one hand and the military situation and the reduction in NATO and American forces, those are not the most important things that are going on. The most important things that are going on, the thing that will shape Afghanistan’s future more than anything else is the political transition that will take place next year.
Press: What topics?
Ambassador Dobbins: I think we talked about the election process, about the international [inaudible], that it’s a free and fair process, and how we can encourage the Afghan political elites to coalesce around candidates who have broad non-sectarian or cross-sectarian appeal. Candidates who don’t just represent one sectarian community but bring together coalitions that will result in an administration that has support and appeal in Pashtun, Hazara, Tajik, Uzbek communities.
On the reconciliation there were a lot of questions about where we stand in terms of the possibilities of opening a Taliban office in Doha for the purpose of negotiating and I explained where that process stood.
Press: Could you summarize what the Indian view was to your [Doha] peace process and how you responded to what has widely been considered [inaudible] of great [inaudible]?
Ambassador Dobbins: They questioned me closely about what the prospects were, what the exact status was, and I hope that they were somewhat reassured as a result. They weren’t telling me they were opposed, they weren’t telling me that this was something we should stay away from, but they clearly had anxieties, anxieties that we all have. Nobody knows how this is going to progress and it’s certainly not a sure thing that it will result in a diminished violence and a successful evolution toward peace. But I didn’t get a sense that they thought it wasn’t worth trying.
I don’t really want to speak for the Indian side, however. I think they’re perfectly capable of doing that for themselves. For our standpoint we’re going into this process with open eyes and without naïve or excessive expectations of rapid progress or even a certainty that there will be any progress at all. Indeed, there’s no certainty that the process will even start since we’re still waiting for responses from the Taliban as to whether they’re prepared to operate under the conditions that the government of Qatar has set, whether they’re prepared to meet with us, and whether they’re prepared to meet with representatives of the Afghan High Peace Council. We haven’t yet received definitive responses on those questions.
Press: After the change of government in Islamabad, what is your assessment for improvement of India-Pakistan ties, and how important do you see that in terms of [Afghanistan’s situation] post 2014?
Ambassador Dobbins: I think that any improvement in India-Pakistan ties will almost automatically improve Afghanistan’s situation. I’ve met twice now in little more than two weeks with Prime Minister Nawaz Sharif. The first time shortly before he became Prime Minister and then again the day before yesterday. My sense is that an improvement in relations with India is fairly high on his list of priorities. He’s got an overwhelming set of problems facing him, most immediately economic pressures, also significant domestic violence that he need to cope with.
But on the external front, and I think he understands that internal and external affairs are related, my sense is that improving relations with India seems to be his top priority.
Press: [What is the] concern [in] India? [Inaudible] talks with Taliban? Without [inaudible] of terrorists, do you believe that an improvement in Indo relations with Pakistan [or] Taliban [will pass]?
Ambassador Dobbins: We certainly agree that there’s no prospect for improvement in relations with the Taliban or any agreement with the Taliban unless the issue of terrorism is directly addressed. We set as a precondition for beginning talks with the Taliban that they make a statement that at least began to distance themselves from international terrorism and they did so. They made a statement a week ago Tuesday in which they said they opposed the use of Afghan territory for attacks on anybody else. But that’s I think from our standpoint sufficient to begin talking to them, but it’s not going to be sufficient as the basis for any agreement.
We’ve made clear, Secretary Kerry made clear when he was here that any agreement would need to include a cessation of hostilities, a respect for the Afghan constitution, and a severing of all ties with al-Qaida and similar terrorist organizations.
I would stress that the negotiations toward this objective will principally be negotiations between the Afghan government and the Taliban. Not between the United States and the Taliban. But we hope that our dialogue with them, if it begins, can contribute to that and we’ll be focused particularly on the topic that you raised which is severing their ties with al-Qaida. It will be one of the first issues we will raise is how do they intend to do that. Not just what they intend to say about it but how they actually intend to go about severing those ties.
Press: What exactly is the U.S. doing to get President Karzai on board with the peace process with the Taliban? [Inaudible] and I understand that President Karzai isn’t very happy about that. I was wondering [inaudible].
Ambassador Dobbins: Well, President Karzai wasn’t happy about it, quite aside from that we weren’t happy about it either. There’s I think an impression that we intervened with the Qataris only because President Karzai complained. We intervened with the Qataris well before President Karzai complained because the self-presentation of that office was inconsistent with the assurance that the Qataris had given us and that we had given President Karzai.
The government of Qatar responded very quickly. They took down the sign that said Islamic Emirates. They took down the flag. And they issued a public statement that this was not the Office of the Islamic Emirate, this was the political office of the Taliban.
So in terms of the specific things that Karzai was concerned about, I think those issues have been resolved. When I talked to President Karzai on Monday, he was perfectly content to move forward with this if the Taliban are prepared to do so on the basis that we had previously agreed
Press: Are you going back to Qatar?
Ambassador Dobbins: No. We’re still waiting to hear from the Taliban whether they’re willing to meet. I think they’re still debating among themselves as the result of the events of last Tuesday whether they want to go forward or not. I don’t know.
From here I’m going back to Washington via Europe.
Press: On the Taliban. You mentioned a statement by them a week ago saying the use of Afghan territory [inaudible]. And yet we saw a couple of days ago an attack on central Kabul targeting the Presidential Palace. How do you manage the process if you see in the coming months the attacks continuing in Afghanistan? What would your [inaudible] to do with that?
Ambassador Dobbins: You don’t hold peace talks after the war, you hold peace talks during wars. The Taliban haven’t asked us to stop fighting and we don’t expect them to stop fighting just because they’re talking. The objective of the talks obviously is a diminution of violence and ultimately an enduring peace, but we’re not naïve enough to think that’s going to come quickly and it’s certainly not a precondition for just talking.
Frankly, I anticipate that the Taliban will continue to try to negotiate from a position of strength. They’ll continue to mount attacks as will we and as will the Afghan government. The attacks that the Taliban have mounted over the past several months have been fairly severe and they’ve almost all failed. The Afghan armed forces are now taking the lead in combat operations. We’re no longer leading in combat. They are increasingly reliant on their own resources. And they’re performing well.
But I don’t think that’s going to lead to an immediate diminution in violence. I think the Taliban probably want to continue to put pressure on. They want to continue to make it look like the United States is retreating as a result of that pressure rather than as a result of its success in building a viable Afghan capacity for self-defense. And NATO, the United States, and in particular the Afghan Security Forces are going to continue not just to defend themselves, but to mount offensive operations against the Taliban, and not only seek to hold territory but to reclaim territory.
So I don’t anticipate that the beginning of negotiations will end the war. I do hope that negotiations will ultimately contribute to an end to the war. But that’s by no means certain. It’s simply something that’s worth trying.
Press Conference in New Delhi
Press Conference
Ambassador James Dobbins, Special Representative for Afghanistan and Pakistan
New Delhi, India
June 27, 2013
Ambassador Dobbins: Thank you. It’s a pleasure to be here in New Delhi. I’ve been in the job I currently hold for a month now. I’ve been touring the region for the last week. I went to Doha with Secretary Kerry for discussions there, and then met with President Karzai in Kabul on Monday and with Prime Minister Nawaz and other Pakistani officials on Tuesday. I arrived here yesterday and met with the Foreign Secretary and others from the Foreign Ministry yesterday evening. I’ll meet with the Indian Special Envoy for Afghanistan, Ambassador [Lamba] who is an old friend from a decade ago after this meeting.
I think the last time I was in New Delhi was in a similar capacity. I was the American Special Envoy for Afghanistan also in the immediate aftermath of 9/11 and represented the U.S. in the early diplomacy after 9/11 which led to the Bonn Conference and the establishment of an interim government in Afghanistan which ultimately led to the current constitution and current government in Afghanistan.
So I’ve come back at an interesting and pivotal time, a time when NATO and the United States are transitioning from a combat to an advisory and assistance role in Afghanistan, and maybe more importantly a time when Afghanistan will be going through its first peaceful democratic transition in its national history.
I’ve come to Delhi and hope to be able to come back regularly because India has an important stake in Afghanistan and it has important influence in Afghanistan, and it’s important that we understand Indian views and obviously that India understands our views and that we collaborate as closely as possible which I certainly did 10 years ago or 11 years ago when the Indian representative and I, Ambassador [Lamba] collaborated very closely, very effectively, in bringing about the emergence of an interim government in Afghanistan, and I anticipate that we’ll be able to continue to collaborate on a similar basis. So I’ll be glad to answer questions.
Press: What talks with the Indian [inaudible] the Special Envoy. What [were] talks?
Ambassador Dobbins: The talks pretty much covered all aspects of our relations with Afghanistan and also to some degree with Pakistan where I had just been, but the focus was on Afghanistan.
The issue that’s probably most topical because it’s been in the news lately is the efforts to begin a peace process and I would say that was probably the single, the topic that occupied the most time. But we also talked about other issues including the upcoming Afghan elections and the political transition. And I think while a lot of us concentrate on our attention on both the possible peace process on the one hand and the military situation and the reduction in NATO and American forces, those are not the most important things that are going on. The most important things that are going on, the thing that will shape Afghanistan’s future more than anything else is the political transition that will take place next year.
Press: What topics?
Ambassador Dobbins: I think we talked about the election process, about the international [inaudible], that it’s a free and fair process, and how we can encourage the Afghan political elites to coalesce around candidates who have broad non-sectarian or cross-sectarian appeal. Candidates who don’t just represent one sectarian community but bring together coalitions that will result in an administration that has support and appeal in Pashtun, Hazara, Tajik, Uzbek communities.
On the reconciliation there were a lot of questions about where we stand in terms of the possibilities of opening a Taliban office in Doha for the purpose of negotiating and I explained where that process stood.
Press: Could you summarize what the Indian view was to your [Doha] peace process and how you responded to what has widely been considered [inaudible] of great [inaudible]?
Ambassador Dobbins: They questioned me closely about what the prospects were, what the exact status was, and I hope that they were somewhat reassured as a result. They weren’t telling me they were opposed, they weren’t telling me that this was something we should stay away from, but they clearly had anxieties, anxieties that we all have. Nobody knows how this is going to progress and it’s certainly not a sure thing that it will result in a diminished violence and a successful evolution toward peace. But I didn’t get a sense that they thought it wasn’t worth trying.
I don’t really want to speak for the Indian side, however. I think they’re perfectly capable of doing that for themselves. For our standpoint we’re going into this process with open eyes and without naïve or excessive expectations of rapid progress or even a certainty that there will be any progress at all. Indeed, there’s no certainty that the process will even start since we’re still waiting for responses from the Taliban as to whether they’re prepared to operate under the conditions that the government of Qatar has set, whether they’re prepared to meet with us, and whether they’re prepared to meet with representatives of the Afghan High Peace Council. We haven’t yet received definitive responses on those questions.
Press: After the change of government in Islamabad, what is your assessment for improvement of India-Pakistan ties, and how important do you see that in terms of [Afghanistan’s situation] post 2014?
Ambassador Dobbins: I think that any improvement in India-Pakistan ties will almost automatically improve Afghanistan’s situation. I’ve met twice now in little more than two weeks with Prime Minister Nawaz Sharif. The first time shortly before he became Prime Minister and then again the day before yesterday. My sense is that an improvement in relations with India is fairly high on his list of priorities. He’s got an overwhelming set of problems facing him, most immediately economic pressures, also significant domestic violence that he need to cope with.
But on the external front, and I think he understands that internal and external affairs are related, my sense is that improving relations with India seems to be his top priority.
Press: [What is the] concern [in] India? [Inaudible] talks with Taliban? Without [inaudible] of terrorists, do you believe that an improvement in Indo relations with Pakistan [or] Taliban [will pass]?
Ambassador Dobbins: We certainly agree that there’s no prospect for improvement in relations with the Taliban or any agreement with the Taliban unless the issue of terrorism is directly addressed. We set as a precondition for beginning talks with the Taliban that they make a statement that at least began to distance themselves from international terrorism and they did so. They made a statement a week ago Tuesday in which they said they opposed the use of Afghan territory for attacks on anybody else. But that’s I think from our standpoint sufficient to begin talking to them, but it’s not going to be sufficient as the basis for any agreement.
We’ve made clear, Secretary Kerry made clear when he was here that any agreement would need to include a cessation of hostilities, a respect for the Afghan constitution, and a severing of all ties with al-Qaida and similar terrorist organizations.
I would stress that the negotiations toward this objective will principally be negotiations between the Afghan government and the Taliban. Not between the United States and the Taliban. But we hope that our dialogue with them, if it begins, can contribute to that and we’ll be focused particularly on the topic that you raised which is severing their ties with al-Qaida. It will be one of the first issues we will raise is how do they intend to do that. Not just what they intend to say about it but how they actually intend to go about severing those ties.
Press: What exactly is the U.S. doing to get President Karzai on board with the peace process with the Taliban? [Inaudible] and I understand that President Karzai isn’t very happy about that. I was wondering [inaudible].
Ambassador Dobbins: Well, President Karzai wasn’t happy about it, quite aside from that we weren’t happy about it either. There’s I think an impression that we intervened with the Qataris only because President Karzai complained. We intervened with the Qataris well before President Karzai complained because the self-presentation of that office was inconsistent with the assurance that the Qataris had given us and that we had given President Karzai.
The government of Qatar responded very quickly. They took down the sign that said Islamic Emirates. They took down the flag. And they issued a public statement that this was not the Office of the Islamic Emirate, this was the political office of the Taliban.
So in terms of the specific things that Karzai was concerned about, I think those issues have been resolved. When I talked to President Karzai on Monday, he was perfectly content to move forward with this if the Taliban are prepared to do so on the basis that we had previously agreed
Press: Are you going back to Qatar?
Ambassador Dobbins: No. We’re still waiting to hear from the Taliban whether they’re willing to meet. I think they’re still debating among themselves as the result of the events of last Tuesday whether they want to go forward or not. I don’t know.
From here I’m going back to Washington via Europe.
Press: On the Taliban. You mentioned a statement by them a week ago saying the use of Afghan territory [inaudible]. And yet we saw a couple of days ago an attack on central Kabul targeting the Presidential Palace. How do you manage the process if you see in the coming months the attacks continuing in Afghanistan? What would your [inaudible] to do with that?
Ambassador Dobbins: You don’t hold peace talks after the war, you hold peace talks during wars. The Taliban haven’t asked us to stop fighting and we don’t expect them to stop fighting just because they’re talking. The objective of the talks obviously is a diminution of violence and ultimately an enduring peace, but we’re not naïve enough to think that’s going to come quickly and it’s certainly not a precondition for just talking.
Frankly, I anticipate that the Taliban will continue to try to negotiate from a position of strength. They’ll continue to mount attacks as will we and as will the Afghan government. The attacks that the Taliban have mounted over the past several months have been fairly severe and they’ve almost all failed. The Afghan armed forces are now taking the lead in combat operations. We’re no longer leading in combat. They are increasingly reliant on their own resources. And they’re performing well.
But I don’t think that’s going to lead to an immediate diminution in violence. I think the Taliban probably want to continue to put pressure on. They want to continue to make it look like the United States is retreating as a result of that pressure rather than as a result of its success in building a viable Afghan capacity for self-defense. And NATO, the United States, and in particular the Afghan Security Forces are going to continue not just to defend themselves, but to mount offensive operations against the Taliban, and not only seek to hold territory but to reclaim territory.
So I don’t anticipate that the beginning of negotiations will end the war. I do hope that negotiations will ultimately contribute to an end to the war. But that’s by no means certain. It’s simply something that’s worth trying.
BRUNEI DARUSSALAM'S DEPUTY DEFENSE MINISTER VISITS PENTAGON
FROM: U.S. DEPARTMENT OF DEFENSE
Carter Hosts Brunei Darussalam's Deputy Defense Minister
American Forces Press Service
WASHINGTON, June 28, 2013 - Deputy Defense Secretary Ash Carter met at the Pentagon with Brunei Darussalam's deputy defense minister, Pentagon Press Secretary George Little said.
In a statement summarizing the meeting, Little said Carter complimented Dato Paduka Haji Mustappa bin Haji Sirat for Brunei's ongoing leadership during its chairmanship of the Association of Southeast Asian Nations.
"The two leaders agreed that ASEAN continues to play a vital role in ensuring a spirit of cooperation in the Asia-Pacific region, which is essential to the promotion of shared security and prosperity," he said.
Carter congratulated Brunei on having recently concluded a historic multilateral exercise focusing on humanitarian assistance, disaster relief and military medicine, which the two leaders agreed demonstrates ASEAN's importance as a platform for regional nations to address shared security challenges, enhance interoperability and build trust, the press secretary said.
Carter and Dato Mustappa also discussed ways in which the United States and Brunei are deepening their bilateral relations, he added, and they talked about plans for the ASEAN Defense Ministers' Meeting-Plus ministerial conference in August, which Defense Secretary Chuck Hagel will attend.
"Deputy Secretary Carter reiterated Secretary Hagel's offer to host all ASEAN defense ministers in the United States next year, and noted he looked forward to staying in close touch," Little said.
Carter Hosts Brunei Darussalam's Deputy Defense Minister
American Forces Press Service
WASHINGTON, June 28, 2013 - Deputy Defense Secretary Ash Carter met at the Pentagon with Brunei Darussalam's deputy defense minister, Pentagon Press Secretary George Little said.
In a statement summarizing the meeting, Little said Carter complimented Dato Paduka Haji Mustappa bin Haji Sirat for Brunei's ongoing leadership during its chairmanship of the Association of Southeast Asian Nations.
"The two leaders agreed that ASEAN continues to play a vital role in ensuring a spirit of cooperation in the Asia-Pacific region, which is essential to the promotion of shared security and prosperity," he said.
Carter congratulated Brunei on having recently concluded a historic multilateral exercise focusing on humanitarian assistance, disaster relief and military medicine, which the two leaders agreed demonstrates ASEAN's importance as a platform for regional nations to address shared security challenges, enhance interoperability and build trust, the press secretary said.
Carter and Dato Mustappa also discussed ways in which the United States and Brunei are deepening their bilateral relations, he added, and they talked about plans for the ASEAN Defense Ministers' Meeting-Plus ministerial conference in August, which Defense Secretary Chuck Hagel will attend.
"Deputy Secretary Carter reiterated Secretary Hagel's offer to host all ASEAN defense ministers in the United States next year, and noted he looked forward to staying in close touch," Little said.
SEC COMMISSIONER WALTER'S SPEECH ON CORPORATE DISCLOSURE
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Corporate Disclosure: The Stage, the Audience and the Players
by
Commissioner Elisse B. Walter
U.S. Securities and Exchange Commission
U.S. Securities and Exchange Commission
Stanford Directors College
Palo Alto, CA
June 25, 2013
Thank you, [Joe], for your kind introduction. Joe and I have much in common — the same alma mater and a working relationship at the SEC more years ago than either of us would like to admit. That adds to my pleasure at being here today at the 19th annual Stanford directors college.
As many of you know, I am nearing the end of my tenure as a Commissioner at the Securities and Exchange Commission. As a Commissioner, as Chair and as an SEC staffer, jobs spanning over two decades, I have delved into every aspect of the agency’s mission. And, looking back, it was my years in the Division of Corporation Finance that may have taught me the most important lesson: the cornerstone of securities regulation and investor protection is the timely disclosure to investors of accurate and complete information.
And by disclosure, I mean more than the numbers in the financial statements. I mean the information investors need to put those numbers into context — not just the "what?" and "how much?" but the "why?" And so today, in what may be one of the last speeches of my public career, I’d like to return to a subject that is an old favorite of mine: Management’s Discussion and Analysis, or MD&A. And I want to do that because I believe that you, as directors, need to take an active role in the company’s disclosure, and particularly the MD&A, and are in a special position to do so.
But before I get started, I do need to remind you that the views I express today are my own, and not those of the Commission, my fellow Commissioners or the Commission’s staff.
Comprehensive corporate disclosure is critical to maintaining and improving investor confidence in the markets. And investor confidence in the quality of financial disclosures is what makes our markets work.
As directors of public companies, you serve a critical function as stewards of the robust, transparent communication with your company’s shareholders that builds this confidence. This is not only a responsibility, but also an opportunity. As I’ve said many times, you should not view disclosure as an obligation; instead, view it as a chance to tell your story.
"Mend your speech a little, lest it may mar your fortunes." William Shakespeare wrote that sometime between 1603 and 1606 in his famous work, King Lear. Unfortunately, that approach to disclosure about affections didn’t work out so well for King Lear or his daughter Cordelia. And I certainly don’t mean for you to take King Lear’s approach in order for your considerations about corporate disclosure to be respected. Rather, my strongest desire is that companies and their shareholder-owners truly engage in an honest dialogue.
So, inspired by the Bard, I’d like to give you three things to think about when considering MD&A. First, set the stage. Second, know your audience. And finally, know your players.
"All the world’s a stage…." Shakespeare wrote that too. And I’m not even going to mention the one about lawyers.
When we talk about disclosure, SEC regulations merely set the stage. But they aren’t designed to tell the whole story. That’s where you and the managers you oversee come in — enter stage right.
Regulations are the floor but not the ceiling. They tell companies what, at a minimum, should be covered, but it’s up to the company to make sure the story gets told. That’s where MD&A becomes a real opportunity for the company to tell shareholders what’s really going on. And if the company’s management isn’t doing that, or isn’t doing it well, it’s up to the directors to ask questions, suggest changes, and require more information.
You should take this role very seriously. You are the investor’s voice and advocate, and they deserve a good story. Now, a good story may not always be a happy story. Shakespeare was a master of both tragedy and comedy. But the real story — and by that I mean the whole story — is the one that needs to be told.
I’m going to read you a comment that was actually issued by the staff of the Division of Corporation Finance to an issuer regarding its MD&A. Bear with me, it’s a little long:
We believe your current disclosures are too general in nature and do not provide your investor with a complete picture of your enterprise by segment and as a whole. In this regard, for each period presented and for each of your reportable segments, revise to:
Clearly disclose and quantify each material factor that contributed to the change in revenue and operating income, indicating the impact by geographic area;
Provide insight into the underlying business drivers or conditions that contributed to these changes;
***
Describe any other known trends or uncertainties that have had or you expect may reasonably have a material impact on your operations and if you believe that these trends are indicative of future performance.
This is not a comment a company (or a board) should be happy to see. This comment outlines very basic things that should have been covered by this MD&A, but weren’t — it reflects a play that no one would want to see because the stage has not been properly set.
No MD&A should be merely a recitation of the financial statements. Give investors the when, the where, the why and, perhaps most importantly, the what’s next.
Here’s another comment:
We note that you identify and quantify various factors that impacted the year to year trends of your results of operations and the related financial statement line items … but did not discuss the business developments or external events that underlie these factors. Please expand your MD&A to explain in greater detail what gave rise to the factors that you have identified, and indicate whether or not you expect them to have a continuing impact on your results of operations in the future.
This is another comment no one should be happy to receive. I’m told that sometimes companies will leave out disclosure and wait to see if the SEC staff will issue a comment. If that’s true, and I worry that it is, I must say that that is entirely the wrong approach. The staff is very good at asking the right questions to require better disclosure, but they are not insiders. They do not know your company the way that you do. Frankly, they should not be doing your job for you, nor should we expect them to.
Sometimes finding the right details to give investors is hard. Predicting the impact, either positive or negative, of a future event is even more challenging. It requires significant judgment and thoughtful consideration. But it’s a task that should be undertaken by the very insiders who have the information to make that call, so that investors have the complete story. The focus should always be on the investors.
And that brings me to my second point: know your audience.
Well, that’s easy enough. Your audience is your investors. And in my view, you should address your investors like they are your business partners, and the MD&A should reflect that perspective. You wouldn’t address a business partner with boilerplate. Your investors deserve the same respect.
They also deserve the whole story. As some of you know, I frequently use the example of my fictional Aunt Millie, the archetype of the retail investor. Well, Aunt Millie has been reading, or trying to read, corporate disclosure for years, and I’m not sure she has ever seen an MD&A that reads quite like one of her Agatha Christie novels — where Detective Hercule Poirot solves each and every mystery step by step. To be honest, I fear that my dear Aunt Millie might just leave this Earth without having ever seen the kind of truly informative and complete MD&A that I have dreamed of for years.
Please don’t let this happen to my dear Aunt Millie! Perhaps you’d even be willing to go back and read one of the more well-known Supreme Court cases about disclosure, TSC Industries. That case gives us the famous concept of evaluating disclosure by looking at the "total mix" of information, but it also says that doubts about whether disclosure is required should "be resolved in favor of those the statute is designed to protect."
I listed in a speech from 2010 (I told you I’d been talking about this for a while) some questions that investors probably still want to know the answers to after reading an MD&A. I think they are still quite relevant today:
What is the company’s business today?
How did it perform?
Where is the cash?
What are the company’s key business drivers?
What are the risks and uncertainties?
How flexibly can the company respond to change?
What do the company’s future prospects look like?
And of course there may be other questions to answer that are specific to your company. But the MD&A is the place to answer them clearly, thoroughly, and directly.
When I served as the Chairman of the Commission, there was a sign on my office door that read simply "How does it help investors?" It was a reminder that everything the Commission does should be focused on that goal.
Sometimes I think that every board meeting should prominently display a similar sign, one reading "What do investors want to know?" Let it serve as a reminder to everyone in the room that disclosure isn’t driven by what the company wants to disclose but by what the investors want to know. That should be front and center as you review the MD&A.
How the company gets to those answers brings me to my third point today: know your players.
In addition to examining the content of the MD&A, I believe the board should know the people and the processes involved in putting it together. First, what is the attitude of management towards disclosure? If they believe that robust, transparent disclosure is a good thing, then that tone will affect both the employees involved in providing information that is relevant to disclosure and to those designing controls and procedures to ensure that information is evaluated by management in a timely, thoughtful manner.
And I believe directors can influence that tone by being engaged, by reading the disclosure with a critical eye and by holding management’s feet to the fire when they believe there is more to the story that ought to be told. Ask yourself, what do I know about the company’s performance that cannot be reasonably inferred from the financial statements?
You are the investor’s voice and as the company’s stewards, you should also be their advocate as well. You play such a crucial role in ensuring that the company’s true story is told, and that’s the story that investors deserve to hear.
And disclosure has other positive effects. Full disclosure is a hallmark of good corporate governance — which should serve to help create the positive corporate culture that results in effective processes and procedures necessary to reveal the important information that your investors need to know. You can only be successful at good governance if you are also successful at disclosure.
Better disclosure equals better markets. It really can be that simple. I hope, as I conclude today, that you’ll always keep the investor — and of course, especially my dear Aunt Millie — at the forefront of your mind each and every time you embrace your important role in the disclosure process.
Thank you.
Corporate Disclosure: The Stage, the Audience and the Players
by
Commissioner Elisse B. Walter
U.S. Securities and Exchange Commission
U.S. Securities and Exchange Commission
Stanford Directors College
Palo Alto, CA
June 25, 2013
Thank you, [Joe], for your kind introduction. Joe and I have much in common — the same alma mater and a working relationship at the SEC more years ago than either of us would like to admit. That adds to my pleasure at being here today at the 19th annual Stanford directors college.
As many of you know, I am nearing the end of my tenure as a Commissioner at the Securities and Exchange Commission. As a Commissioner, as Chair and as an SEC staffer, jobs spanning over two decades, I have delved into every aspect of the agency’s mission. And, looking back, it was my years in the Division of Corporation Finance that may have taught me the most important lesson: the cornerstone of securities regulation and investor protection is the timely disclosure to investors of accurate and complete information.
And by disclosure, I mean more than the numbers in the financial statements. I mean the information investors need to put those numbers into context — not just the "what?" and "how much?" but the "why?" And so today, in what may be one of the last speeches of my public career, I’d like to return to a subject that is an old favorite of mine: Management’s Discussion and Analysis, or MD&A. And I want to do that because I believe that you, as directors, need to take an active role in the company’s disclosure, and particularly the MD&A, and are in a special position to do so.
But before I get started, I do need to remind you that the views I express today are my own, and not those of the Commission, my fellow Commissioners or the Commission’s staff.
Comprehensive corporate disclosure is critical to maintaining and improving investor confidence in the markets. And investor confidence in the quality of financial disclosures is what makes our markets work.
As directors of public companies, you serve a critical function as stewards of the robust, transparent communication with your company’s shareholders that builds this confidence. This is not only a responsibility, but also an opportunity. As I’ve said many times, you should not view disclosure as an obligation; instead, view it as a chance to tell your story.
"Mend your speech a little, lest it may mar your fortunes." William Shakespeare wrote that sometime between 1603 and 1606 in his famous work, King Lear. Unfortunately, that approach to disclosure about affections didn’t work out so well for King Lear or his daughter Cordelia. And I certainly don’t mean for you to take King Lear’s approach in order for your considerations about corporate disclosure to be respected. Rather, my strongest desire is that companies and their shareholder-owners truly engage in an honest dialogue.
So, inspired by the Bard, I’d like to give you three things to think about when considering MD&A. First, set the stage. Second, know your audience. And finally, know your players.
"All the world’s a stage…." Shakespeare wrote that too. And I’m not even going to mention the one about lawyers.
When we talk about disclosure, SEC regulations merely set the stage. But they aren’t designed to tell the whole story. That’s where you and the managers you oversee come in — enter stage right.
Regulations are the floor but not the ceiling. They tell companies what, at a minimum, should be covered, but it’s up to the company to make sure the story gets told. That’s where MD&A becomes a real opportunity for the company to tell shareholders what’s really going on. And if the company’s management isn’t doing that, or isn’t doing it well, it’s up to the directors to ask questions, suggest changes, and require more information.
You should take this role very seriously. You are the investor’s voice and advocate, and they deserve a good story. Now, a good story may not always be a happy story. Shakespeare was a master of both tragedy and comedy. But the real story — and by that I mean the whole story — is the one that needs to be told.
I’m going to read you a comment that was actually issued by the staff of the Division of Corporation Finance to an issuer regarding its MD&A. Bear with me, it’s a little long:
Provide insight into the underlying business drivers or conditions that contributed to these changes;
***
Describe any other known trends or uncertainties that have had or you expect may reasonably have a material impact on your operations and if you believe that these trends are indicative of future performance.
This is not a comment a company (or a board) should be happy to see. This comment outlines very basic things that should have been covered by this MD&A, but weren’t — it reflects a play that no one would want to see because the stage has not been properly set.
No MD&A should be merely a recitation of the financial statements. Give investors the when, the where, the why and, perhaps most importantly, the what’s next.
Here’s another comment:
This is another comment no one should be happy to receive. I’m told that sometimes companies will leave out disclosure and wait to see if the SEC staff will issue a comment. If that’s true, and I worry that it is, I must say that that is entirely the wrong approach. The staff is very good at asking the right questions to require better disclosure, but they are not insiders. They do not know your company the way that you do. Frankly, they should not be doing your job for you, nor should we expect them to.
Sometimes finding the right details to give investors is hard. Predicting the impact, either positive or negative, of a future event is even more challenging. It requires significant judgment and thoughtful consideration. But it’s a task that should be undertaken by the very insiders who have the information to make that call, so that investors have the complete story. The focus should always be on the investors.
And that brings me to my second point: know your audience.
Well, that’s easy enough. Your audience is your investors. And in my view, you should address your investors like they are your business partners, and the MD&A should reflect that perspective. You wouldn’t address a business partner with boilerplate. Your investors deserve the same respect.
They also deserve the whole story. As some of you know, I frequently use the example of my fictional Aunt Millie, the archetype of the retail investor. Well, Aunt Millie has been reading, or trying to read, corporate disclosure for years, and I’m not sure she has ever seen an MD&A that reads quite like one of her Agatha Christie novels — where Detective Hercule Poirot solves each and every mystery step by step. To be honest, I fear that my dear Aunt Millie might just leave this Earth without having ever seen the kind of truly informative and complete MD&A that I have dreamed of for years.
Please don’t let this happen to my dear Aunt Millie! Perhaps you’d even be willing to go back and read one of the more well-known Supreme Court cases about disclosure, TSC Industries. That case gives us the famous concept of evaluating disclosure by looking at the "total mix" of information, but it also says that doubts about whether disclosure is required should "be resolved in favor of those the statute is designed to protect."
I listed in a speech from 2010 (I told you I’d been talking about this for a while) some questions that investors probably still want to know the answers to after reading an MD&A. I think they are still quite relevant today:
How did it perform?
Where is the cash?
What are the company’s key business drivers?
What are the risks and uncertainties?
How flexibly can the company respond to change?
What do the company’s future prospects look like?
And of course there may be other questions to answer that are specific to your company. But the MD&A is the place to answer them clearly, thoroughly, and directly.
When I served as the Chairman of the Commission, there was a sign on my office door that read simply "How does it help investors?" It was a reminder that everything the Commission does should be focused on that goal.
Sometimes I think that every board meeting should prominently display a similar sign, one reading "What do investors want to know?" Let it serve as a reminder to everyone in the room that disclosure isn’t driven by what the company wants to disclose but by what the investors want to know. That should be front and center as you review the MD&A.
How the company gets to those answers brings me to my third point today: know your players.
In addition to examining the content of the MD&A, I believe the board should know the people and the processes involved in putting it together. First, what is the attitude of management towards disclosure? If they believe that robust, transparent disclosure is a good thing, then that tone will affect both the employees involved in providing information that is relevant to disclosure and to those designing controls and procedures to ensure that information is evaluated by management in a timely, thoughtful manner.
And I believe directors can influence that tone by being engaged, by reading the disclosure with a critical eye and by holding management’s feet to the fire when they believe there is more to the story that ought to be told. Ask yourself, what do I know about the company’s performance that cannot be reasonably inferred from the financial statements?
You are the investor’s voice and as the company’s stewards, you should also be their advocate as well. You play such a crucial role in ensuring that the company’s true story is told, and that’s the story that investors deserve to hear.
And disclosure has other positive effects. Full disclosure is a hallmark of good corporate governance — which should serve to help create the positive corporate culture that results in effective processes and procedures necessary to reveal the important information that your investors need to know. You can only be successful at good governance if you are also successful at disclosure.
Better disclosure equals better markets. It really can be that simple. I hope, as I conclude today, that you’ll always keep the investor — and of course, especially my dear Aunt Millie — at the forefront of your mind each and every time you embrace your important role in the disclosure process.
Thank you.
MAN AND COMPANY CHARGED WITH MAKING MISTATEMENTS OF FDA'S VIEW OF COMPANY
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., June 26, 2013 — The Securities and Exchange Commission today announced that it filed fraud charges on Tuesday against Burbank, Calif.-based Imaging3, Inc., and its founder and chief executive Dean Janes for misleading shareholders about the Federal and Drug Administration (FDA)’s view of the company’s medical device
The SEC’s complaint alleges that Janes held a conference call with investors in November 2010 after the FDA denied clearance for Imaging3, Inc. to market its proprietary scanner, which provides three-dimensional images for use in medical diagnosis. The denial was the product’s third, as the FDA denied clearance in 2008 and earlier in 2010. Even though the FDA cited concerns about the safety of the device and the quality of the images, Janes told investors that the FDA’s issues were "not substantive" and largely "administrative."
"Shareholders have a right to trust corporate officers to tell them the truth about the business. When CEOs abuse that trust and make misstatements, innocent shareholders are victimized," said Michele Wein Layne, Regional Director of the SEC’s Los Angeles Regional Office. "The SEC will hold corporate officers accountable for misleading shareholders."
According to the SEC’s complaint, filed in the U.S. District Court for the Central District of California, on the conference call, Janes did not discuss the issues raised by the FDA in an October 2010 letter, such as the device’s potential for over-heating, and the fact that some sample images the company submitted were "scientifically invalid and useless."
Even when asked on the call whether any of the FDA’s concerns were "safety-related" or involved image quality, Janes said, "Nope," and that there was "really and honestly not one question about the technology or its consistency. It just doesn’t make sense to me."
After an investor obtained the FDA’s denial letter and posted it on an Internet blog in early 2011, Janes used his personal Facebook page in another effort to mischaracterize the denial, the SEC alleged. Janes and his company didn’t officially issue the full text of the denial letter until earlier this year, more than two years after the call to discuss it.
The SEC's action charges Imaging3, Inc. and Janes with fraud and seeks a court order to bar them from future violations of federal securities laws, require them to pay civil monetary penalties, and bar Janes from serving as a public company officer or director.
Alka Patel and Katharine Zoladz of the Los Angeles Regional Office conducted the SEC’s investigation and David Van Havermaat will lead the litigation.
Washington, D.C., June 26, 2013 — The Securities and Exchange Commission today announced that it filed fraud charges on Tuesday against Burbank, Calif.-based Imaging3, Inc., and its founder and chief executive Dean Janes for misleading shareholders about the Federal and Drug Administration (FDA)’s view of the company’s medical device
The SEC’s complaint alleges that Janes held a conference call with investors in November 2010 after the FDA denied clearance for Imaging3, Inc. to market its proprietary scanner, which provides three-dimensional images for use in medical diagnosis. The denial was the product’s third, as the FDA denied clearance in 2008 and earlier in 2010. Even though the FDA cited concerns about the safety of the device and the quality of the images, Janes told investors that the FDA’s issues were "not substantive" and largely "administrative."
"Shareholders have a right to trust corporate officers to tell them the truth about the business. When CEOs abuse that trust and make misstatements, innocent shareholders are victimized," said Michele Wein Layne, Regional Director of the SEC’s Los Angeles Regional Office. "The SEC will hold corporate officers accountable for misleading shareholders."
According to the SEC’s complaint, filed in the U.S. District Court for the Central District of California, on the conference call, Janes did not discuss the issues raised by the FDA in an October 2010 letter, such as the device’s potential for over-heating, and the fact that some sample images the company submitted were "scientifically invalid and useless."
Even when asked on the call whether any of the FDA’s concerns were "safety-related" or involved image quality, Janes said, "Nope," and that there was "really and honestly not one question about the technology or its consistency. It just doesn’t make sense to me."
After an investor obtained the FDA’s denial letter and posted it on an Internet blog in early 2011, Janes used his personal Facebook page in another effort to mischaracterize the denial, the SEC alleged. Janes and his company didn’t officially issue the full text of the denial letter until earlier this year, more than two years after the call to discuss it.
The SEC's action charges Imaging3, Inc. and Janes with fraud and seeks a court order to bar them from future violations of federal securities laws, require them to pay civil monetary penalties, and bar Janes from serving as a public company officer or director.
Alka Patel and Katharine Zoladz of the Los Angeles Regional Office conducted the SEC’s investigation and David Van Havermaat will lead the litigation.
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