SECRETARY KERRY, FRENCH FOREIGN MINISTER FABIUS MAKE REMARKS IN PARIS

FROM:  U.S. STATE DEPARTMENT
Remarks with French Foreign Minister Laurent Fabius
Remarks
John Kerry
Secretary of State
Quai d'Orsay
Paris, France
March 7, 2015

FOREIGN MINISTER FABIUS: (In French.)

SECRETARY KERRY: Laurent, thank you very, very much. Thank you for hosting us here today. I really appreciate the welcome, as always. It’s always wonderful to be in Paris, though obviously only for a few hours today.

I want to begin by expressing President Obama’s and my deepest condolences to the families of the French, Belgian, and Malian victims of this appalling shooting in Bamako this morning. As Foreign Minister Fabius made clear just now in his comments, this is an act of cowardice. And these horrific and cowardly attacks, these acts of terrorism, which Paris experienced too much of most recently, but an act of opening fire in a restaurant filled with innocent civilians – in the end, that only strengthens our resolve to fight terrorism in all of its forms wherever it exists. And we are pleased that together with France we have a present-day manifestation of an old relationship as we join together to express our revulsion at this kind of act, and our unity, our partnership, and our alliance in standing up to it and continuing to fight.

So rather than intimidate us, it has the exact opposite effect. It strengthens our partnership and it strengthens our commitment to see this moment, this generational challenge, through. And we will.

Today, we talked at some length – in a short span of time, obviously, but we talked about Daesh. We talked about the challenge in Syria, in Iraq, and the need to continue, and ways in which we can strengthen what we’re doing. We talked also about the need for transition in Syria and the increased efforts with respect to the Assad regime and the need to leverage him to a negotiation. We talked about Libya – the threat, obviously, of Daesh and other extremist groups taking advantage of the lack of adequate governance and the adequate resolution politically of the challenges there. And we committed to redouble our efforts together in order to focus on that.

As many of you know, I’ve spent the past week traveling in Europe and in the Middle East discussing a number of important issues. But obviously, my primary focus for this week has really been the Iran nuclear talks. And after a couple of days of very intense negotiations with the Iranians in Switzerland, I traveled to Saudi Arabia, where I updated our allies and our partners in Riyadh and throughout the Gulf. And here in Paris today, I appreciate Foreign Minister Fabius bringing people together and hosting us for our opportunity to be able to have a discussion about what is a partnership. This is not a bilateral negotiation; this is a multilateral P5+1 negotiation. And all of our partners are consistently exchanging and sharing information, sharing ideas, working together, meeting, and helping to try to drive this to the good conclusion that we want.

As Foreign Minister Fabius said a moment ago, we want an agreement that’s solid. We want an agreement that will guarantee that we are holding any kind of program that continues in Iran accountable to the highest standards so that we know that it is, in fact, a peaceful program. All of us in the P5+1 are deeply committed to ensuring that Iran does not obtain a nuclear weapon. And we continue to believe that a comprehensive deal that includes intrusive access and verification measures, and blocks each of the pathways to securing fissile material for a bomb and then to try and make a bomb itself, that the best way to achieve the goal is to shut off those pathways.

Now, I agree with Laurent. We have exactly the same assessment. We have made progress, but there remain gaps – divergences, as he said. And we need to close those gaps. And that is our goal over the course of the next days. We have a critical couple of weeks ahead of us. We’re all mindful that the days are ticking by. But we’re not feeling a sense of urgency that we have to get any deal. We have to get the right deal. And it is frankly up to Iran – that wants this program, that wants a peaceful program, that asserts that they have a peaceful program – to show the world that it is indeed exactly what they say. That’s the measure here. And we planned a return to the talks. Starting next Sunday, different folks will be having different conversations, and we look forward to trying to drive this thing to an appropriate conclusion. And we will find out whether or not Iran is prepared to take the steps to answer the questions that the world has a right to get answers to.

I’d be happy to take any questions. Laurent, you --

FOREIGN MINISTER FABIUS: (In French.)

Hello. Madam (inaudible).

QUESTION: Thank you. Mr. Foreign Minister, you said yesterday the deal doesn’t go far enough in the extent and duration of Iran’s commitments. What are your primary areas of concern? Is it enrichment capacity, breakout time, how long Iran will accept constraints on its enrichment activities, what happens when the agreement expires? Did you make specific suggestions to Mr. Kerry today on how the agreement can be improved?

And Mr. Secretary, also relating to the Foreign Minister’s comments yesterday, do you agree the deal does not go far enough in terms of the extent and duration of commitments? What will you say to your partners today to reassure them about the progress of the talks? Also, Iran’s nuclear chief, Ali Akbar Salehi, said today Iran has put forward technical proposals to the U.S. to overcome their concerns. He said the impasse over technical issues is over. Do you share this assessment? Thank you.

FOREIGN MINISTER FABIUS: (In French.)

Under no circumstances Iran will never seek nor possess any nuclear weapon.

(In French.)

SECRETARY KERRY: I agree completely with the comments of Foreign Minister Fabius, particularly with respect to the picture that he just drew of what happens if you don’t have a good, solid agreement. All of us have an interest in making certain that the countries in the region feel sufficiently convinced that this agreement is meaningful – that it will hold, that it’s real, and that they’re secure – so that they don’t in fact make matters worse by all engaging in the development of a program because they feel threatened.

So our obligation is, as Laurent just said, not to each other, not just to those of us in the talks. It’s to a much broader community – in fact, to the world. Because we are also deeply involved in trying to denuclearize North Korea, and there are any number of other players in the world who might at some point think that they would be advantaged by proceeding down this road. So this – the stakes here are higher than just this P5+1-plus-Iran negotiation.

I also agree – and I said at the beginning of my comments, we are on the same page. If we didn’t think that there was further to go, as Laurent said, we’d have had an agreement already. The reason we don’t have an agreement is we believe there are gaps that have to be closed. There are things that have to be done to further strengthen this. We know this. And we have not resolved – now, like Laurent, I’m not going to stand here now and negotiate with you in public and give you a whole bunch of differentials. That’s what we’re going to go do, all of us together.

But the bottom line is that everybody knows what matters here: the length of this – the length and duration, the levels of visibility, the control, as Laurent said, the issue of verification and knowledge. All of these are key. This is an arms control agreement. They have been negotiated for a long period of time, particularly before between the Western world and the former Soviet Union. So we know something about these. We have a track record of standards. We have a track record of IAEA requirements. We have a track record of mistakes and we understand what we need to do.

So the proof will be in an agreement if it is reached. And none of us are going to, I think, publicly start to lay out numbers and equations here. We know what we’re chasing after, and we’re chasing after the same thing, all of us in the P5+1. That’s what’s important.

FOREIGN MINISTER FABIUS: (In French.)

QUESTION: (Inaudible), Al Arabiya (inaudible). Secretary Kerry, you have said on Thursday that Iran is still supporting terrorism, while General Dempsey was telling senators that Iran’s role in Iraq might be positive. Does that mean that according to the United States, Iran is fighting terrorism in Iraq and supporting it in Syria and in Yemen? Would you clarify this divergence between the two statements?

(In French.)

SECRETARY KERRY: Well, let me answer that very directly. The advance on Tikrit is an Iraqi-designed and an Iraqi-controlled advance. And Prime Minister Abadi himself went out to the front several days beforehand. He briefed our people and others on what their plans were. There are Sunni tribes involved in this effort. There are Iraqi armed forces involved. And yes, there are some militias involved, and yes, some of those militias are receiving direction from General Soleimani and from Iran. That’s a fact.

But we’re not coordinating with them. We’re not discussing this with them. I think what General Dempsey said is a matter of pure common sense and fact. If Iran kills a bunch of ISIL/Daesh on the ground, and it serves the interests of Iraq and the rest of us, that might wind up helping, but it doesn’t mean that we accept in any way their behavior with respect to other things they’re doing in Yemen, in Beirut, in Damascus, elsewhere.

So yes, they have been engaged in these other activities. That’s why they are a designated country. And the truth is that’s not on the table in this discussion. Our goal is ultimately to change the behavior and ultimately try to affect these other places. But for the moment, the key is to prevent them from having a nuclear weapon. Because if this country that is engaged in these other activities has a nuclear weapon, you got a whole different ballgame.

So let’s keep our eye on the priority. Priority number one is to not have a pathway to a nuclear weapon and guarantee that this program is peaceful. And as I have said to our friends in the region and elsewhere, the next day, if we get an agreement, we continue to have disagreements over these other kinds of activities. And that will be the next layer of effort, is to try to work at changing the whole dynamic. But that’s not what’s on the table here right now. And I think General Dempsey was simply speaking to a kind of common sense judgment about one moment, but only a moment in this unfolding process.

FOREIGN MINISTER FABIUS: (In French.)

ASHTON CARTER SWORN IN AS SECRETARY OF DEFENSE

FROM:  U.S. DEFENSE DEPARTMENT

Right Supreme Court Justice Elena Kagan administers the oath of office to Defense Secretary Ash Carter as his wife, Stephanie, holds the Bible and their children, Ava and Will, look on during a ceremonial swearing-in at the Pentagon, March 6, 2015. Vice President Joe Biden officially swore in Carter as the 25th secretary of defense last month. DoD screen shot .

Carter: It’s Time to Seize ‘Bright Opportunities’
By Claudette Roulo
DoD News, Defense Media Activity

WASHINGTON, March 6, 2015 – Focusing on the difficulties that lie ahead of the Defense Department is easy, but now is also the time to embrace opportunity, Defense Secretary Ash Carter said today.

“Being back, I’m reminded how easy it is in Washington -- and in this building -- to focus solely on our challenges,” Carter said. “And it is indeed a turbulent, rough world out there. But as a nation and as a department, this is also a moment to continue to shine the beacon of American leadership and to seize the many bright opportunities in front of us.”

Carter was speaking at his ceremonial swearing in as the 25th secretary of defense, an event hosted by Chairman of the Joint Chiefs of Staff Army Gen. Martin E. Dempsey at the Pentagon.

"As we know from Secretary Carter's long experience in the department, he is the right person to lead the Department of Defense at this point in our history -- not just for what he's done, but in particular for how he's done it,” Dempsey said.
“Secretary Carter's known for bringing judgment and candor to decisions, and for explaining those decisions in clear and honest language. This is something those of us in the armed forces very much appreciate,” the general noted.

Besides Dempsey, speakers included William J. Perry, the 19th defense secretary, and Justice Elena Kagan, who swore Carter in at the ceremony.
"Since 1947, there have been 24 people sworn in as the secretary of defense. None of them, none of them better qualified for this job than Ash Carter. Qualified by intellect, by temperament and by experience," Perry said before Carter was sworn in.

Carter served under Perry during the Clinton administration, and today called him “the model of a modern secretary of defense.”

“Our nation and the world are safer because of your leadership and intellect -- and also because of your civility,” Carter said of Perry.

Kagan said of Carter that, “If you walk around this town and talk to people, what everybody says is … he is the perfect man for this job, the consummate public servant, the person who by virtue of his experience and his judgment and his good sense and his brilliance will be able to deal with the challenges that this important office has.”

Highest Honor

It is the highest honor to serve as America's 25th secretary of defense, Carter said.

“The men and women of this department will not only continue to protect our country, but also ensure we leave a more peaceful, prosperous and promising world to our children to live their lives, raise their families, dream their dreams,” he said.

American service members, DoD civilian employees and contractors are serving at home and abroad in support of U.S. national security interests, the secretary said.

“We are standing with our friends and allies against savagery in the Middle East,” Carter said. “In the Asia-Pacific, where new powers rise and old tensions still simmer and where half of humanity resides, we are standing up for a continuation of a decades-long miracle of development and progress underwritten by the United States.

“And in cyberspace,” he added, “we are standing with those who create and innovate against those who seek to steal, destroy and exploit.”
Think Outside the ‘Five-sided Box’

With budgets tightening and technology and globalization revolutionizing how the world works, the Pentagon has an opportunity to open itself to new ways of operating, recruiting, buying, innovating and much more, the secretary said.

“America is home to the world’s most dynamic businesses and universities. We have to think outside this five-sided box and be open to their best practices, ideas and technologies,” he said.

“… In realizing all these opportunities, previous generations and my recent predecessors … have blessed us with a remarkable inheritance: a more secure country, a stronger institution, and the world’s greatest military,” Carter said.
This generation owes the same legacy to those who come after it, the defense secretary said, something he will remember every day he is in office.

“Just as I wake up every day committed to putting in a day of service worthy of our extraordinary men and women in uniform,” he added.

Carter said his greatest obligations as defense secretary will be to help the commander in chief make wise and caring decisions about sending troops into harm’s way, to ensure troops have what they need to fight and win, and to ensure the welfare and dignity of service members and their families.

“Thank you for all that you do,” the defense secretary said to service members in the audience. “Thank you for the trust that you place in me. I will do my best to live up to it.”

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U.S. CYBER COMMANDER REMARKS ON "CYBERSECURITY DILEMMAS"

FROM:  U.S. DEFENSE DEPARTMENT

Right:  Navy Adm. Michael S. Rogers, commander of U.S. Cyber Command and director of the National Security Agency, testifies before the House Armed Services Committee improving the military cyber security posture in an uncertain threat environment, March 4, 2015. DoD photo by Cheryl Pellerin.  

Cybercom Chief: Cyber Threats Blur Roles, Relationships
By Cheryl Pellerin
DoD News, Defense Media Activity

WASHINGTON, March 6, 2015 – Over five years of U.S. Cyber Command operations, global movement of threat activity through cyberspace has blurred roles and relationships among government agencies, as well as between the public and private sectors and the real and virtual worlds, the Cybercom commander told a House panel.

Navy Adm. Michael S. Rogers testified March 4 before the House Armed Services Committee on cyber operations and improving the military’s cybersecurity posture.

“There is no Department of Defense solution to our cybersecurity dilemmas,” Roger said in written testimony. “The global movement of threat activity in and through cyberspace blurs the U.S. government’s traditional understanding of how to address domestic and foreign military, criminal and intelligence activities.”
Similarly, he said, the public and private sectors need each other’s help.
Responding to Cyber Attacks

“The U.S. government, the states and the private sector can’t defend their information systems on their own against the most powerful cyber forces,” the admiral said.

“We saw in the recent hack of Sony Pictures Entertainment that we have to be prepared to respond to cyber attacks with concerted actions across the whole of government,” he added, “using our nation’s unique insights and complete range of capabilities in cooperation with the private sector.”

Cyberspace is more than a challenging environment, Rogers said.

“It is now part of virtually everything we in the U.S. military do in all domains of the battle space and each of our lines of effort,” he said. “There is hardly any meaningful distinction to be made now between events in cyberspace and events in the physical world, as they are so tightly linked.”

Cybercom is growing and operating at the same time, he said, performing many tasks across a diverse and complex mission set.

Guarding DoD Networks

Three years ago, the command lacked capacity, Rogers said. Today, new teams are guarding DoD networks and are prepared to help combatant commands deny freedom of maneuver to adversaries in cyberspace, he added.

Cybercom’s Cyber Mission Force, or CMF, was formed to turn strategy and plans into operational outcomes, the admiral said.

“With continued support from Congress, the administration and the department,” Rogers said, “Cybercom and its service cyber components are now about halfway through the force build for the CMF, [and] many of its teams are generating capability today.”

He added, “We have a target of about 6,200 personnel in 133 teams, with the majority achieving at least initial operational capability by the end of fiscal year 2016.”

Cybercom has been normalizing its operations in cyberspace, he said, to provide an operational outlook and attitude to running the department’s 7 million networked devices and 15,000 network enclaves.

Implementing the Joint Information Environment

The department’s legacy architecture, created during times when security was not a core design element, is being transitioned to a more secure and streamlined architecture that is part of what ultimately will be the Joint Information Environment, or JIE.

“While the JIE is being implemented,” Rogers said, “our concerns about our legacy architecture collectively have spurred the formation of our new Joint Force Headquarters to defend the department’s information networks.”

The Joint Force Headquarters recently achieved initial operational capability, the admiral added, working at the Defense Information Systems Agency under Rogers’ operational control at Cybercom. Its mission is to oversee the day-to-day operation of DoD networks, he added, “and mount an active defense of them, securing their key cyber terrain and being prepared to neutralize any adversary who manages to bypass their perimeter defenses.”

Managing Risk

“It gets us closer to being able to manage risk on a systemwide basis across DoD,” Rogers added, “balancing warfighter needs for access to data and capabilities while maintaining the overall security of the enterprise.”
The admiral said the new headquarters is a stopgap measure while the department migrates its systems to a cloud architecture that’s more secure and facilitates data sharing across the enterprise.

As network security has advanced, so has the maturity of the cyber force, which has gained what Rogers called priceless experience in cyberspace operations.
“That experience has given us something even more valuable -- insight into how force is and can be employed in cyberspace. We have had the equivalent of a close-in fight with an adversary that taught us how to maneuver and gain the initiative that means the difference between victory and defeat,” he explained.
Every Conflict Has a Cyber Dimension

Such insight is increasingly urgent, because every conflict in the world has a cyber dimension, the admiral said, adding that the command sees patterns in cyber hostilities that indicate four main trends:

-- Autocratic governments that view the open Internet as a lethal threat to their regimes;

-- Ongoing campaigns to steal intellectual property;

-- Disruptions by a range of actors that range from denial-of-service attacks and network traffic manipulation to the use of destructive malware; and

-- States that develop capabilities and attain system access for potential hostilities, perhaps with the idea of enhancing deterrence or as a beachhead for future cyber sabotage.

“We believe potential adversaries might be leaving cyber fingerprints on our critical infrastructure, partly to convey a message that our homeland is at risk if tensions ever escalate toward military conflict,” Rogers said.
Heartbleed and Shellshock

For instance, he told the House panel, “I can tell you in some detail how Cybercom and our military partners dealt with the Heartbleed and Shellshock vulnerabilities that emerged last year.”

The Heartbleed Bug is a serious vulnerability that allows attackers to steal information, usually encrypted, that’s used to secure the Internet for applications such as Web, e-mail and instant messaging, among others. Attackers can eavesdrop on communications, steal data directly from the services and users, and impersonate services and users.

Shellshock is a vulnerability that gives attackers the ability to run remote commands on a system.

The admiral said these serious flaws inadvertently were left in the software that millions of computers and networks in many nations depend on.

Responsible developers discovered both security holes, Rogers said. They kept their findings quiet and worked with trusted colleagues to develop software patches that system administrators could use to get a jump on those who read the same vulnerability announcements and devised ways to identify and exploit unpatched computers, he said.

Checking for Vulnerabilities

“We at Cybercom and [the National Security Agency] learned of Heartbleed and Shellshock at the same time that everyone else did,” the admiral said.
Military networks are probed for vulnerabilities thousands of times an hour, he added, so it wasn’t long before they detected new probes checking their websites and systems for vulnerabilities.

“By this point, our mission partners had devised ways to filter such probes before they touched our systems,” Rogers explained. “We were sheltered while we pushed out patches across DoD networks and monitored implementation,” directing administrators to start with the most vulnerable systems.

“Thanks to the efforts we have made in recent years, our responses … were comparatively quick, thorough and effective, and in both cases they helped inform corresponding efforts on the civilian side of the federal government,” the admiral added.

“We also know that other countries, including potential adversaries, struggled to cope with the Heartbleed and Shellshock vulnerabilities,” he noted.
Cyber Military Capabilities

Rogers said this operational approach must be built in many more places.
“The nation’s government and critical infrastructure networks are at risk as well,” he said, “and we are finding that computer security is really an enterprisewide project.”

The admiral added, “We in the U.S. government and DoD must continue learning and developing new skills and techniques … [and] the nation must continue to commit time, effort and resources to building cyber military capabilities.”

DOCTOR PLEADS GUILTY FOR ROLE IN $14.2 MILLION MEDICARE FRAUD

FROM:  U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Friday, March 6, 2015
New York Doctor Pleads Guilty in $14.2 Million Medicare Fraud Scheme

A New York doctor pleaded guilty today for his involvement in a scheme to fraudulently bill Medicare for $14.2 million in claims for medically unnecessary treatments.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) New York Field Office made the announcement.

Roman Johnson, 40, formerly of Buffalo, New York, pleaded guilty before U.S. Magistrate Judge Marilyn D. Go in the Eastern District of New York to one count of conspiracy to commit health care fraud.  Sentencing will be scheduled at a later date.  As part of the plea, Johnson agreed to pay $5,386,363 in restitution to the Medicare program, which represents the total amount of money Medicare paid as the result of the fraudulent claims.

In connection with his guilty plea, Johnson admitted that he and other medical providers at the clinic submitted approximately $14.2 million in false and fraudulent claims to Medicare for medically unnecessary vitamin infusions, physical therapy, and occupational therapy that did not qualify for reimbursement by Medicare.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  The case was prosecuted by Trial Attorney Bryan D. Fields of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Erin E. Argo of the Eastern District of New York.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, HHS’ Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

THREE CHARGED FOR ROLES IN HACKING EMAIL SERVICE PROVIDERS IN U.S.

FROM:  U.S. JUSTICE DEPARTMENT
Friday, March 6, 2015
Three Defendants Charged with One of the Largest Reported Data Breaches in U.S. History
One Of The Defendants Has Already Pleaded Guilty

An indictment was unsealed yesterday against two Vietnamese citizens who resided in the Netherlands, for their roles in hacking email service providers throughout the United States.  The guilty plea of one of the defendants was also unsealed at the same time.  In addition, a federal grand jury returned an indictment this week against a Canadian citizen for conspiring to launder the proceeds obtained as a result of the massive data breach.

Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Acting U.S. Attorney John A. Horn of the Northern District of Georgia, Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office, Special Agent in Charge Reginald Moore of the United States Secret Service’s (USSS) Atlanta Field Office and Special Agent in Charge Veronica F. Hyman-Pillot with the Internal Revenue Service-Criminal Investigation’s (IRS-CI) made the announcement.

“These men — operating from Vietnam, the Netherlands, and Canada — are accused of carrying out the largest data breach of names and email addresses in the history of the Internet,” said Assistant Attorney General Caldwell.   “The defendants allegedly made millions of dollars by stealing over a billion email addresses from email service providers.  This case again demonstrates the resolve of the Department of Justice to bring accused cyber hackers from overseas to face justice in the United States.”

“This case reflects the cutting-edge problems posed by today’s cybercrime cases, where the hackers didn’t target just a single company; they infiltrated most of the country’s email distribution firms,” said Acting U.S. Attorney Horn.  “And the scope of the intrusion is unnerving, in that the hackers didn’t stop after stealing the companies’ proprietary data—they then hijacked the companies’ own distribution platforms to send out bulk emails and reaped the profits from email traffic directed to specific websites.”

“Large scale and sophisticated international cyber hacking rings are becoming more problematic for both the law enforcement community that is faced with the challenges of identifying them and laying hands on them, but also the fortune 500 companies that are so often their targets,” said Special Agent in Charge Johnson.  “The federal indictments, apprehensions and extraditions in this case represents several years of hard work as the FBI and its cadre of cyber trained agents and technical experts acted quickly to stop the ongoing damage to the numerous victim companies as a result of these individuals’ hacking activities.  In August 2012, the FBI, with the assistance of its legal attaches stationed abroad and in conjunction with Dutch law enforcement officials, executed a search warrant in the Netherlands that disrupted continued compromises of those companies while allowing U.S. authorities to advance its investigation.  That investigation targeted not only the hackers but the businesses that helped monetize the data that was stolen from those victim companies.  This case further reflects the productive partnership of the FBI and the U.S. Secret Service in aggressively addressing this 21st century crime problem.”

“Our success in this case and other similar investigations is a result of our close work with our law enforcement partners,” said Special Agent in Charge Moore.  “The Secret Service worked closely with the Department of Justice and the FBI to share information and resources that ultimately brought these cyber criminals to justice.  This case demonstrates there is no such thing as anonymity for those engaging in data theft and fraudulent schemes.”

“Those individuals who line their pockets with money gained through deceiving others should know they will not go undetected and will be held accountable,” said Special Agent in Charge Hyman-Pillot.  “IRS Criminal Investigation is committed to unraveling financial transactions to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”

According to allegations in the indictments, between February 2009 and June 2012, Viet Quoc Nguyen, 28, a citizen of Vietnam, allegedly hacked into at least eight email service providers (ESPs) throughout the United States and stole confidential information, including proprietary marketing data containing over one billion email addresses.  Nguyen, along with Giang Hoang Vu, 25, also a citizen of Vietnam, then allegedly used the data to send “spam” to tens of millions of email recipients.  The data breach was the largest in U.S. history and was the subject of a Congressional inquiry in June 2011.

David-Manuel Santos Da Silva, 33, of Montreal, Canada, was also indicted by a federal grand jury on March 4, 2015, for conspiracy to commit money laundering for helping Nguyen and Vu to generate revenue from the “spam” and launder the proceeds.

According to allegations in the indictments, Da Silva, the co-owner, president and a director of 21 Celsius Inc., a Canadian corporation that ran Marketbay.com, entered into an affiliate marketing arrangement with Nguyen that allowed the defendants to generate revenue from the computer intrusions and data thefts.

As an affiliate marketer, Nguyen allegedly received a commission on sales generated from Internet traffic that he directed to websites promoting specific products.  Nguyen allegedly used the information stolen from the ESPs to send “spam” emails to tens of millions of customers and provided hyperlinks to allow the purchase of the products.  These products were marketed by Da Silva’s Marketbay.com.

Between approximately May 2009 and October 2011, Nguyen and Da Silva received approximately $2 million for the sale of products derived from Nguyen’s affiliate marketing activities.

Vu was arrested by Dutch law enforcement in Deventer, Netherlands, in 2012 and extradited to the United States in March 2014.  On Feb. 5, 2015, Vu pleaded guilty to conspiracy to commit computer fraud.  He is scheduled to be sentenced on April 21, 2015, before U.S. District Judge Timothy C. Batten Sr. of the Northern District of Georgia.  Nguyen is a fugitive.

Da Silva was arrested based upon charges set forth in a criminal complaint at Ft. Lauderdale International Airport on Feb. 12, 2015, and is scheduled to be arraigned today in Atlanta before Magistrate Judge E. Clayton Scofield III.

The charges contained in an indictment are merely accusations, and defendants are presumed innocent unless and until proven guilty.

This case is being investigated by the FBI with the assistance of the USSS and IRS-CI.  Law enforcement in the Netherlands and the Criminal Division’s Office of International Affairs also provided valuable assistance.  This case is being prosecuted by Trial Attorney Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Steven D. Grimberg of the Northern District of Georgia.

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EX-IM BANK CHAIRMAN'S STATEMENT ON RELEASE OF EXPORT DATA

FROM:  U.S. EXPORT-IMPORT BANK
Export-Import Bank Chairman Fred P. Hochberg’s Statement on the Release of Export Data from the Commerce Department
U.S. Exports Reach $189.4 Billion in January

Washington, D.C. – Ex-Im Bank Chairman and President Fred P. Hochberg issued the following statement with respect to January’s export data released today by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department. According to BEA, the United States exported $189.4 billion of goods and services in January, 2015.

“American exporters, when competing on a level playing field, will always excel,” said Hochberg. “At Ex-Im Bank, we will continue to support American exporters so they can introduce their goods and services to new global markets and create more middle class jobs here at home.”

ABOUT EX-IM BANK:

Ex-Im Bank is an independent federal agency that supports and maintains U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms, including working capital guarantees and export credit insurance, to promote the sale of U.S. goods and services abroad. Ninety percent of its transactions directly serve American small businesses.

In fiscal year 2014, Ex-Im Bank approved $20.5 billion in total authorizations. These authorizations supported an estimated $27.5 billion in U.S. export sales, as well as approximately 164,000 American jobs in communities across the country.

2 FORMER CIVILIAN MILITARY EMPLOYEES AND A MILITARY CONTRACTOR CONVICTED IN BRIBERY SCHEME

FROM:  U.S. JUSTICE DEPARTMENT
Tuesday, March 3, 2015
Two Former Civilian Military Employees and One Military Contractor Convicted in Bribery Scheme at Georgia Military Base

Two former civilian employees at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, and one military contractor were convicted by a federal jury today of bribery and fraud charges related to military trucking contracts, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.

Christopher Whitman, 48, co-owner of United Logistics, an Albany-based trucking company and freight transportation broker, was convicted of 43 counts of honest services wire fraud, five counts of bribery, five counts of obstructing justice and one count of theft of government property.  Shawn McCarty, 36, of Albany, Georgia, a former employee at the MCLB-Albany, was convicted of 15 counts of honest services wire fraud, one count of bribery and one count of obstructing justice.  Bradford Newell, 43, of Sylvester, Georgia, also a former employee at the MCLB-Albany, was convicted of 13 counts of honest services wire fraud, one count of bribery and one count of theft of government property.

According to evidence presented at trial, Whitman paid more than $800,000 in bribes to three former officials of the Defense Logistics Agency (DLA) at the MCLB-Albany, including the head of the DLA Traffic Office and McCarty, to obtain commercial trucking business from the base.  The transportation contracts were loaded with unnecessary premium-priced requirements, including expedited service, expensive trailers and exclusive use, which requires that freight be shipped separately from other equipment, even if that results in a truck not being filled to capacity.  As a result of these contracts, Whitman’s company grossed more than $37 million over less than four years.

The evidence further demonstrated that Whitman paid approximately $200,000 in bribes to the former inventory control manager of the Distribution Management Center at MCLB-Albany, Newell and others, who used their official positions to help Whitman steal more than $1 million in surplus equipment from the base, including bulldozers, cranes and front-end loaders.  In exchange for the bribes, Newell and the inventory control manager removed the surplus items from Marine Corps inventory and arranged to have them transported off the base by Whitman’s company.  Whitman then arranged to improve and paint the stolen equipment, and sell it to private purchasers.  

One former United Logistics employee, a business partner of Whitman’s, two former DLA officials and another MCLB official previously pleaded guilty for their roles in the fraud and corruption scheme.

The case was investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit, Defense Criminal Investigative Service, DLA Office of the Inspector General, and the Department of Labor Office of the Inspector General.  The case is being prosecuted by Deputy Chief J.P. Cooney and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.  The associated forfeiture litigation is being handled by Assistant Deputy Chief Darrin McCullough of the Asset Forfeiture and Money Laundering Section and the Middle District of Georgia.



Tuesday, March 3, 2015
Three Florida Men and a Corporation Convicted for Running Illegal International Gambling Enterprise
A federal jury in Oklahoma City convicted three Florida men and a Florida corporation today for their participation in an illegal international gambling and money laundering enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sanford C. Coats of the Western District of Oklahoma.

“In the age of the internet, what used to be a crime conducted by bookies on street corners is now an international criminal enterprise,” said Assistant Attorney General Caldwell.  “Operating on-line but off-shore, the individuals convicted in this case raked in more than a billion dollars in illegal gambling proceeds.  But as these convictions demonstrate, no matter where or how organized criminals operate, the Criminal Division will bring them to justice.”

“This is a great result in this important case,” said U.S Attorney Coats.   “I applaud the tremendous, collaborative efforts of our law enforcement partners and the prosecution team.”

Paul Francis Tucker, 50, of Mount Dora, Florida, Luis Robles, 50, of St. Pete Beach, Florida, and Zapt Electrical Sales Inc., a corporation registered in Florida and owned by Tucker, were found guilty of engaging in a racketeering conspiracy, conducting an illegal gambling business and conspiracy to commit money laundering.  Christopher Lee Tanner, 58, of Sarasota, Florida, was found guilty of conducting an illegal gambling ring.  A sentencing date will be set by the court in approximately 90 days, and the hearing will take place before U.S. District Judge Stephen P. Friot of the Western District of Oklahoma.

According to evidence presented at trial, from 2003 to 2013, Tanner, Tucker, Robles and Zapt Electrical Sales conspired with others to operate internet and telephone gambling services from Panama City, Panama through an enterprise known as Legendz Sports.  The international gambling enterprise took more than $1 billon in illegal wagers, almost exclusively from gamblers in the United States on American sporting events.

The evidence demonstrated that Tanner and Tucker worked as bookies in Florida, and illegally solicited and accepted sports wagers and settled gambling debts.  Tucker also used Zapt Electrical Sales and its bank account to launder gambling proceeds collected from losing bettors.  

The evidence showed that Robles worked as a runner for the enterprise, delivering cash to Legendz Sports bookies to make payouts and picking up cash profits from the bookies.  According to the evidence at trial, bookies and runners for Legendz Sports transported millions of dollars of gambling proceeds in cash and checks from the United States to Panama.  The checks were made out to various shell companies created by Legendz Sports all over Central America to launder gambling proceeds.

The case was investigated by the FBI and Internal Revenue Service-Criminal Investigation, with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Marshals Service.  The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Susan Dickerson Cox and Travis D. Smith of the Western District of Oklahoma.

TV MARKETER TO PAY $ 8 MILLION FOR DECEPTIVE FEES & SENDING EXTRA PRODUCT

FROM:  U.S. FEDERAL TRADE COMMISSION
Direct Marketer Agrees to Pay $8 Million for Deceiving Consumers
Company Pitched Snuggies and Other Products on TV, Often Billing Consumers without Their Consent

A direct marketing company selling “as-seen-on-TV” type products such as Snuggies and the Magic Mesh door cover has agreed to pay $7.5 million to the Federal Trade Commission for consumer restitution to settle FTC charges in connection with its deceptive “buy-one-get-one-free” promotions.

The FTC’s settlement with Allstar Marketing Group, LLC, was reached alongside actions by the New York State Office of the Attorney General, which is announcing a separate state case today. In addition to the $7.5 million paid to the FTC, Allstar will pay $500,000 to the Attorney General’s Office for penalties, costs, and fees to settle that action.

“Marketers must clearly disclose all costs. That includes processing fees, handling fees, and any other fees they think up,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Working with the New York Attorney General, we’ll return millions of dollars to consumers that Allstar collected in undisclosed fees.”

“This agreement returns money to thousands of consumers in New York and across the nation who believed they were buying items at the price advertised on television, but ended up with extra merchandise and hidden fees they didn’t bargain for,” Attorney General Eric T. Schneiderman said. “The settlement also brings much needed reforms to a major firm in the direct marketing industry. Those who use small print and hidden fees to inflate charges to unwitting consumers must be held accountable.”

According to the FTC’s complaint, since at least 1999, Allstar, based in Hawthorne, New York, has been in the direct marketing business, using television commercials to sell its products, many of which are familiar to consumers such as Magic Mesh, Cat’s Meow, Roto Punch, Perfect Tortilla, Forever Comfy, and Snuggies. While the products have varied, Allstar’s pitch is often the same -- a “buy-one-get-one-free” offer without additional costs disclosed.

In a recent commercial for Magic Mesh, for example, the company promised that it would “double the offer” for consumers, if they just paid “processing and handling fees.” While consumers were led to believe that they would then be getting two $19.95 products for “less than $10 each,” in fact, the total cost with the undisclosed $7.95“processing and handling” fees jumped from the advertised price of $19.95 to $35.85, according to the complaint.

As alleged in the FTC’s complaint, consumers who called Allstar were often immediately instructed to enter their personal and billing information, and were charged for at least one “set” of products, based on the “buy-one-get-one-free” offer, before they had a chance to indicate how many products they wanted to buy. Because the sales pitch was often confusing, some consumers purchased more “sets” than they actually wanted.

Allstar then attempted to upsell consumers additional products via automated voice prompts that requested the consumer accept the offer. Many times, the only way a consumer could decline the offer was to say nothing. At the end of the calls, Allstar sometimes routed consumers to other third-party sellers who made additional sales pitches. Once all of the offers ended, consumers were not told the total number of items they’d “agreed” to buy, or the total amount they would be billed, according to the complaint. The Commission has alleged that Allstar even charged those consumers who hung up mid-call, not intending to complete a sale.

According to the FTC’s complaint, consumers who opted to buy Allstars’ products online faced similar problems, including separate “processing and handling” fees which were only disclosed in very fine print at the bottom of the page, and a barrage of upsell offers. Consumers were not provided with the total price of their purchases, and despite a “30 day money-back guarantee” (less processing and handling fees) full refunds were difficult for consumers to obtain.

Based on this alleged conduct, the FTC’s complaint charges Allstar with two violations of the FTC Act and three violations of the agency’s Telemarketing Sales Rule (TSR), including the following:

Billing consumers without their express informed consent;
Failing to make adequate disclosures about the total number and cost of products before billing consumers;
In connection with the up-selling of goods and services, violating the TSR by failing to disclose material information about the total cost of the products and that the purpose of the call is to sell goods or services; and
During telemarketing, illegally billing consumers without first getting their consent.
nt order prohibits Allstar from failing to obtain consumers’ written consent before billing them for any product or service. It also requires the company to clearly and conspicuously disclose – before billing consumers – the total number of products they have ordered, all related fees and costs, and material conditions related to the products purchased.

It also prohibits Allstar from violating the TSR by: 1) failing to disclose the true costs of any goods or products it sells; 2) failing to promptly disclose the identity of the seller to consumers and that the purpose of the call is to sell a product or service; and 3) causing billing information to be submitted for payment without consumers’ express authorization.

Finally, the order imposes a monetary judgment of $7.5 million, which, in consultation with the New York Attorney General’s Office, may be used to provide refunds to defrauded consumers.

The Commission’s vote approving the complaint and the stipulated final order was 5-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois and the stipulated final order submitted to the court for approval.

The FTC appreciates the assistance of the New York State Attorney General’s Office in bringing this action.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the district court judge.

PRESS AVAILABILITY: SECRETARY KERRY AND SAUDI ARABIAN FOREIGN MINISTER AL-FAISAL

FROM:  U.S. STATE DEPARTMENT
03/05/2015 12:57 PM EST
Press Availability with Saudi Arabian Foreign Minister Saud al-Faisal
Press Availability
John Kerry
Secretary of State
Riyadh Air Base
Riyadh, Saudi Arabia
March 5, 2015

FOREIGN MINISTER AL-FAISAL: (Via interpreter) In the name of Allah, the most gracious, the most merciful. At the beginning, it pleases me to extend thanks and appreciation to the custodian of the two holy mosques, King Salman Bin Abd al-Aziz for the care and attention the – accorded to me during my recent treatment period recently. I also express sincere love and cordiality to the current Saudi people for their noble feelings. Moreover, I would like to seize this opportunity to express the national happiness for the return of the Saudi diplomat, Abdullah al-Khalidi, to homeland with the protection and care of Allah. In this connection, I extend many thanks and appreciation and great (inaudible) to all the government, but as – and security agencies that participated in his safe return with direction from the generous leadership, particularly His Royal Highness, the deputy crown prince, second deputy premier, and minister of interior, Prince Muhammad Bin Nayef Bin Abd al-Aziz, who accorded this issue extreme care since the first day of the diplomat’s abduction.

I welcome now Secretary John Kerry and his accompanying delegation to Saudi Arabia. His extensive schedule was full of meetings that started this morning by meeting the GCC foreign ministers, then he was received by King – by the king, and then we held bilateral talks. Overall, the talks were fruitful, constructive, in-depth, and transparent, as always the case of our meetings. We examined a wide range of bilateral relations, issues, between our two countries, in addition to discussing the regional and international issues of mutual interest. The meeting explored the developments in Yemen, Syria, Libya, and the efforts of the international coalition for countering terrorism, in addition to the developments of talks on Iranian nuclear program, the Middle East peace process, and other issues.

With regard to Yemen, as you all see there is full international accord on rejecting the Houthi coup d’etat on the legitimacy and their endeavors to impose the status quo with force and refusal of the procedures resulting from this coup d’etat, including the so-called constitutional declaration by the Houthi militia. The international community expressed its full support to the legitimate government in Yemen led by President Abd Rabu Mansour Hadi. This is clearly reflected in the statements issued by GCC, the Arab League, and the UN Security Council.

Noting these positions and efforts and resulting resolutions and measures, Saudi Arabia renews its emphasis upon the importance of resuming the political process based on the GCC initiative and its executive mechanisms and the outcomes of the Yemeni national dialogue. Saudi Arabia stresses the importance of helping the (inaudible) Yemeni people out of their ordeal that led to these hazardous actions in a way that maintains Yemen’s stability, territorial integrity, stability in the region. We discussed the efforts of the international coalition to fight terrorism, and the ISIL in particular, including the ongoing military efforts to fight the organization, the ongoing military security, intellectual, financial and media actions. Saudi Arabia underscores the importance of this coalition in fighting ISIL both in Iraq and Syria.

Meanwhile, Saudi Arabia opines the importance of providing the military the necessary means – necessary military means to fight this challenge on the ground, and that campaign should have comprehensive strategic perspective fighting terrorism, wherever it may be, and whatever the organizations that stands behind it in order to uproot terrorism. Our talks included as well the negotiations of the Iranian nuclear program. Saudi Arabian Government supports the efforts of 5+1 in view of its keenness to solve this file peacefully, to reach successful agreement that dissipates the doubts and ensures not shifting to a military program that threatens the region and the world. Saudi Arabia also supports the 5+1 position in seeking a firm international and inspection system to ensure that Iran is not seeking manufactured opposition of nuclear weapons, together with maintaining Iran’s right and all regions – countries of the region rights to the peaceful use of nuclear energy according to IAEA standards, requirements, and inspection.

As for the Syrian crisis and its common efforts here, we all feel – I think that we all felt that the continuity of this crisis not only led to the destruction of Syria, displacement of its people, and deepening their humanitarian suffering, it also made Syria a safe haven for terrorist organizations with endorsement of the legitimate – of the illegitimate Bashar al-Assad’s regime. This entails a threat to Syria, the region, and the world – the whole world. This urges us to intensify efforts to promote and support the moderate opposition with all ordnance and training to counter al-Assad’s terrorism and the terrorist organizations as well. And to expel the foreign occupier from the Syrian territories, we – at the same time, we stress that reaching the business solution, based on Geneva I conference, requires a military balance on the ground.

We have also discussed the peace process in the Middle East within the framework of the efforts exerted by the United States recently to revive the peace negotiations to reach a just, permanent, and comprehensive solution. These efforts are supported by the Arabs, Palestinians, and with patronage of the Arab League. Our view of the desired solution will always be based on the principles of the international legitimacy, its resolutions, and the Arab Peace Initiative aiming at creation of a viable, independent Palestinian state.

Unfortunately, these efforts are still not yielding its fruits. This is due to the Israeli stubbornness and procrastination and its unilateral forcible measures against the rights of the Palestinian people. A case in point: The recent Israeli detention of a 14-year-old girl, Malak al-Khatib – not exceeding 14 years old – and indicted by an Israeli military court and imprisonment for two months and a fine with the pretext of hurling stones. This verdict calls for severe rejection and grief. Particularly, it’s being passed under the sight and hearing of all the world and its justice organizations in a flagrant defiance to all human rights and agreements and women and children rights agreements.

On our part, we stress the importance of international community shouldering of its responsibility towards the inhumane practices of Israel against the Palestinian people, also to obligate Israel to respect the peace process and its principles and not to infringe the legitimate rights of the Palestinian people.

I reiterate this is long, I renew my welcome of Secretary Kerry, and I leave the floor to him.

SECRETARY KERRY: Let me begin by saying how very pleased I am to be back here in the Kingdom of Saudi Arabia here in Riyadh, and I am particularly pleased to be able to be here with His Royal Highness, Prince Saud al-Faisal, as he comes back from a brief period of dealing with medical issues and now returning to his full responsibility. And all of us, all of the ministers here today, we’re really pleased to be able to welcome Prince Saud back. We value his wisdom. He’s the longest-serving foreign minister of any country, and he has become a very good friend as well as a good counselor with respect to issues in this region. So I’m particularly personally appreciative that we are here today.

I want to begin by underscoring an important point that is on a issue different from those we discussed here today. The safety and security of our diplomats abroad is a top priority for me and for President Obama. And even as we join in congratulating Saudi Arabia on the skillful return of their diplomat from detention – and I congratulate Deputy Crown Prince Minister Mohammed bin Nayef on his role together with the foreign ministry – but we in the United States were deeply concerned to learn about a very vicious attack on our ambassador in South Korea in the Republic of Korea – Mark Lippert. And this attack took place earlier this morning, and I want to be very, very clear to anybody who contemplates or thinks about this kind of tactic – the United States of America will never be intimidated or deterred by threat or by anybody who harms any American diplomat. We will remain as resolved as ever to pursue what we believe is in the interests of our country and with respect to universal rights and values. And whoever threatens or harms our diplomats, I can assure them, will be prosecuted to the fullest extent of the law.

I had the opportunity to talk to Mark earlier this morning. He was in the hospital. I’m enormously relieved to be able to report that thanks to the care and the support that he is receiving in South Korea, he’s doing okay. I’ve known Mark for years, as has President Obama. One thing both of us could tell anybody is this man is as tough as they come. And as I told him over the phone this morning, the State Department is a family, and so we are all sending the thoughts of a family his way, we’re sending our prayers his way to his wife, Robyn, and to their baby boy, and we are wishing him a fast and complete recovery.

This morning, as Prince Saud said, we have discussed a great many issues. We’ve had a very full day. And that’s partly because we have a very full agenda, not all of it by our choice, but all of it we are determined to deal with. We joined with our counterparts from the rest of the GCC, the UAE, Bahrain, Qatar, Oman, and Kuwait, in order to meet for the second time in the past month, which tells you something about the order of priority and the importance of the challenges we face. President Obama and I know that partnerships with the Gulf nations are absolutely essential in meeting any number of urgent challenges. It’s critical that we therefore keep in very close touch, particularly at such a complicated time when there are so many moving pieces in so many different places.

For that same reason, I also met today with His Majesty King Salman, with whom the United States looks forward to pursuing the very same kind of close and very personal relationship that we enjoyed with his predecessor, King Abdullah. And I also had a very productive lunch just now, a working lunch with Deputy Crown Prince Mohammed bin Nayef as well as with His Royal Highness, the Foreign Minister Prince Faisal.

As all of you know, I came here to Riyadh directly from Montreux, Switzerland where I spent the past few days engaged in with – negotiations with Iran on the nuclear issue that Prince Saud just discussed. Obviously, the outcome of these negotiations will be of major consequence to the United States, yes, but really to the entire world – and particularly to this region, and we understand that. With that fact comes a responsibility to all of us in the P5+1 to get it right. Preventing a nuclear-armed Iran will, as Prince Saud just said, address many of the concerns of the region. It will alleviate tension and remove barriers to regional security. It will reduce the pressure for a regional nuclear arms race, and it will increase the strength of the international nonproliferation regime. It will also vastly improve the prospects for peace both here and elsewhere.

So a large part of why I wanted to come to Riyadh today is to update our Gulf partners on exactly where the negotiations stand, on what our standards are, on what we are looking to achieve, and what we have done since the talks first started. And let me underscore: We are not seeking a grand bargain; nothing will be different the day after this agreement if we were to reach one with respect to all the other issues that challenge us in this region, except that we will have taken steps to guarantee that Iran will not have a nuclear weapon. And that is a critical component of security for the region and for the world.

We are seeking to show that Iran’s program is exclusively peaceful and that we can block all of the pathways necessary to acquire the fissile material for a nuclear weapon and then to be able to move towards the production of that weapon. To date, we have made progress, but there do remain serious gaps, and those need to be resolved. We still don’t know whether we’ll get there. I said that in Switzerland; I say it again today. It may be that Iran cannot say yes to the type of deal that provides assurances that the international community requires. But we plan to return to the talks on the 15th of March, and we expect soon thereafter to know whether Iran will, in fact, be able to make the tough decisions that are required to get where we need to be.

Now, I also want to make clear, as I did in every one of my meetings today: Even as we engage with these discussions with Iran around its nuclear program, we will not take our eye off of Iran’s other destabilizing actions in places like Syria, Lebanon, Iraq, and the Arabian Peninsula – Yemen particularly. And whether or not we are able to reach a deal on the nuclear program, the United States will remain fully committed to addressing the full slate of issues that we have with Iran, including its support for terrorism.

Beyond Iran, we also discussed the situation in Yemen, where we recognize that it’s more important than ever for the United States and the GCC states to coordinate closely and where we need to continue to press all of the political parties, especially the Houthis, to commit to a consensus political solution that is based on the GCC initiative and the national dialogue outcomes.

We also, as Prince Saud said, discussed the situation in Syria. I think the whole world needs to see the war in Syria come to an end. Three quarters of the country are now displaced people, and the country is being torn apart by a leader who places his personal preservation ahead of the preservation of the state or the preservation of all of the people of his state. As President Obama and I have repeatedly made clear that we don’t see how a man who has gassed his people; dropped barrel bombs on children and on women, on schools; a man who has tortured more than 10,000 people, according to the evidence of photographs – how that person can become a leader in the future is beyond our consideration or capacity. He has lost any semblance of legitimacy.

But we have no higher priority than disrupting and defeating Daesh and other terror networks in order to give the people of Syria the chance that they deserve to recover and to build – rebuild their country. Ultimately, a combination of diplomacy and pressure will be needed to bring about a political transition. Military pressure particularly may be necessary, given President Assad’s unwillingness to negotiate seriously. And what we must do is strengthen the capacity for this political solution.

Now, obviously, everything we have just talked about emphasizes the fact that there is no shortage of urgent and complex challenges that face Saudi Arabia, the United States, the Gulf states, and our allies and friends. In the weeks and months and even years ahead, we will remain in close contact with our partners on the issues that I mentioned and more. And I am confident that based on the conversations with the king today, with all of our meetings, with the determination of the Gulf states, we will remain united and we will continue to examine how to best coordinate our efforts and bring the peace and the stability and the possibilities of the future that this region so deserves. Thank you.

MODERATOR: Let’s go to the American press first.

MS. PSAKI: Arshad Mohammed from Reuters.

QUESTION: Your Royal Highness, what concerns did you and your fellow GCC foreign ministers express today about the emerging Iran nuclear deal? And specifically, are you concerned that giving Iran sanctions relief will simply allow it to pursue its regional agenda in countries like Syria and Yemen more aggressively? Are you concerned that any deal would have an expiration date? And has the United States offered you and your fellow GCC countries any additional security assurances to guarantee your security once a deal has expired?

And Secretary Kerry, the State Department has said that it will review for public release the emails provided by former Secretary Clinton. My question is: Why shouldn’t the Department review all of the emails, including those that former Secretary Clinton has withheld from the Department, so that it is the U.S. Government that is determining what should ultimately go to the national archives or what should be released publicly rather than former Secretary Clinton’s office that is making that judgment?

FOREIGN MINISTER AL-FAISAL: (Inaudible) Iran (off-mike).

SECRETARY KERRY: He asked about Iran.

FOREIGN MINISTER AL-FAISAL: I don’t think I can be more specific in relating what guarantees the Secretary gave and he himself has done in this press conference. He has been very clear in the assurances he gave the country. And he has been very transparent in saying what the United States will adhere to in negotiating a deal with Iran. He has specifically specified that Iran – the intent is to keep it from developing an atomic bomb, which is to the good of all, international community as well as the Gulf countries. But he said that is not at the expense of forgetting everything else that Iran does. And that is really the main concern of the Gulf Cooperation Council.

We are, of course, worried about atomic energy and atomic bomb. But we’re equally concerned about the nature of action and hegemonistic tendencies that Iran has in the region. And these elements are the elements of instability in the region. We see Iran involved in Syria and Lebanon and Yemen and Iraq and God knows where. This (inaudible) must stop if Iran is to be part of the solution of the region and not part of the problem.

SECRETARY KERRY: If I can, Arshad, I’m just going to comment very quickly on that also, because I want to emphasize a couple of things. First of all, making the Gulf states safer and providing for greater security begins, notwithstanding Iran’s other activities, which we all object to – it begins by preventing them from having a nuclear weapon. So the first step is make sure they don’t have a nuclear weapon.

But nothing else changes the next day with respect to our joint commitment to stand up against any other kind of interference or violation of international law or support for terrorism. And Iran remains a labeled state supporter of terrorism. So those efforts will continue.

And in order to make sure that everybody is clear as we go forward and we work together cooperatively, we are inviting our GCC friends to come to Washington sometime in the next month or so – somewhere in the next months, certainly in next couple of months – in order to continue to review together those cooperative efforts and arrangements that can be made with respect to security and cooperation as we go forward in this endeavor.

We have a long task ahead of us, and it’s not going to be solved by one agreement, nor deterred by one agreement. And I think we’re all in agreement on that.

With respect to Secretary Clinton’s emails, the State Department has had access to a wide array of Secretary Clinton’s records, including emails, between her and Department officials with the state.gov accounts, as well as cables, as they do for every secretary of state. And last year, the Department sent a letter to representatives of the former secretaries of state requesting that they submit any records in their possession for proper preservation. In response, Secretary Clinton provided the Department with the emails that span her time at the State Department. And after reviewing those emails, the Department produced about 300 responsive to the requests from the select committee.

So we are now in the process of appropriately reviewing those for public release, as we do for any document for public release. And we will undertake this task as rapidly as possible in order to make sure that we’re dealing with the sheer volume of this in a responsible way and we’ll conclude it as soon as we can and get those released publicly.

QUESTION: But my question is why couldn’t the Department look at all these emails and make its own judgment about which ones should go to the archives.

SECRETARY KERRY: Well, the Department has the emails. We’re --

QUESTION: Has every one of them, or just the ones that were provided?

SECRETARY KERRY: I’d have to check on that. I believe we have all the ones that – I think we have all the ones that are state.gov, which are appropriately the ones in the purview of the Department. But let me check on that when I actually have time to pay attention to such an important issue when I get home.

QUESTION: (Via interpreter) (inaudible) newspaper. Your Highness, what is – what are you going to do since the stubbornness of the Houthis in Yemen?

FOREIGN MINISTER AL-FAISAL: (Via interpreter) In fact, GCC countries took the initiative in taking procedures in this direction since the Houthi coup d’etat of the state, as the president was held a legitimate president. We are trying to stress the legitimacy and this is the only way for the safety of Yemen.

Consequently, we were happy for the arrival of Mr. – President Hadi to Aden, to southern Yemen, and the statements he made from that, that he stresses his legitimacy and he stresses not accepting any of the procedures taken by the Houthis, so that even GCC countries took the initiative to support this president. And the secretary general of GCC went to Aden, other ambassadors of GCC countries were supported this position of the president, and as you know, the president is holding meetings outside of Yemen and he wants – and particularly the meeting for the negotiations will be most likely in Saudi Arabia. If he asks this, we agree to this. We will take the help of what is in the GCC initiative to help him restore the order in Yemen.

MS. PSAKI: Jo Biddle from AFP.

QUESTION: Thank you very much. (Inaudible) thank you for your gracious hospitality to us all today. Shukran. Could I ask you how concerned Saudi Arabia is about the reports of deep Iranian involvement in Iraq at the moment, particularly for the battle of Tikrit, with reports that General Qasem Soleimani is actually on the ground, the head of the Qods Force, coordinating the battle?

And if I may, could I also ask you: After your talks today, have your received assurances from Secretary Kerry that the United States is committed to regime change in Syria? And what role do you believe Saudi Arabia could do to help the Syrian people?

And Secretary Kerry, if I could just quickly ask for your view on what is happening in Tikrit. What is the U.S. involvement? How much are you monitoring the situation? And how concerned are you about the civilians who are trapped in the town?

And finally, just one other quick question, my apologies. The King Faisal Foundation has just given a $200,000 award to a leading Islamic scholar from India who apparently called the 9/11 attacks in the United States an inside job, suggesting that the Bush Administration was behind it. Could I have your reaction to that? Thank you.

SECRETARY KERRY: Whose reaction?

QUESTION: That was for you, sir.

SECRETARY KERRY: Can I have the – what foundation? The King Faisal --

QUESTION: The King Faisal Foundation. And the name of the scholar was Zakir Naik.

SECRETARY KERRY: And they gave it to whom?

QUESTION: To this gentlemen, who is an Islamic scholar who claims that the 9/11 attacks were an inside job. Thank you.

FOREIGN MINISTER AL-FAISAL: (Inaudible) if you keep asking more than one question we tend to forget. (Inaudible) I’ve already forgotten the second question.

And the situation in Tikrit is a prime example of what we’re worried about. Iran is taking over the country. The act of the war and peace is no longer in the hand of the countries involved with Iran (inaudible) but in the hands of Iran. And these (inaudible) in Iraq. This is what is fomenting sectarian struggles in Iraq. We shared no sectarian struggles before the involvement of Iran in Iraq (inaudible).

The second question was --

QUESTION: Syria. Syria. Whether you have assurances now that the United States will (inaudible) regime change.

FOREIGN MINISTER AL-FAISAL: Well, we all agree with the United States that Bashar al-Assad has lost legitimacy. We all agree that the solution – and it must be based on Geneva I. That means that the transition government is going to be established, and that means that Saddam Hussein and those involved --

PARTICIPANT: Bashar al-Assad.

FOREIGN MINISTER AL-FAISAL: -- that Bashar – it’s the same, anyways – (laughter) – that they have to follow the political solution, as is suggested by the Geneva conference. We don’t have any differences at all on the basis of a solution or settlement in Syria. We want a political settlement. We want a political settlement giving peace and stability to Syria and unity of (inaudible) and territorial integrity. We want the troops that are illegally there to be withdrawn. We want the Syrians to unite under one house where there is no difference between Shia and Sunni, a Christian or (inaudible) nationality or sects in Iraq, and that is what we hope for.

SECRETARY KERRY: So with respect to Tikrit, Prime Minister Abadi himself has confirmed that this is an operation of Iraqi forces, consisting of a regular Iraqi Security Force militia – regular Iraqi Security Force contingent of militias and tribes, and it is specifically underway in order to liberate the Salahuddin province from ISIL control, and it is an Iraqi-led operation – Iraqi-designed, Iraqi-led. Is General Soleimani – has he been on the ground, is he playing a role? The answer’s yes. We’ve got information to that effect. But we are encouraged that as part of this operation, Prime Minister Abadi ensured the support of the Sunni leaders, including the governor of Salahuddin province and other local tribal leaders, as well as the speaker of the parliament, Salim al-Jubouri.

Now, there’s close coordination between the national and the local leaders throughout this operation. That’s the only way it’s ultimately going to be successful. Everybody has known that there are some movement of Iranian forces, both in and out of the northern part of Iraq, who have been engaged in fighting since the very beginning. But it is not coordinated. We are not coordinating with them. And Prime Minister Abadi went to the front a day or two before this initiative began and made it clear that this is Iraqi-sanctioned and Iraqis’ design and Iraqis’ desire to achieve.

Additionally, the spokesman for the Sunni tribal council of Salahuddin province issued a statement calling for all of the tribes of Salahuddin who are Sunni to stand side by side with the Security Forces and support the restoration of the province and stressing that they want to avoid any kind of risk to unarmed civilians and to do as much as possible to preserve homes and property.

Prime Minister Abadi also committed to take the upmost care to protect civilian lives during this operation, and we have urged all Iraqi forces to avoid and prevent the abuse to civilians of any kind of activity that violates international norms, fuels the sectarian fears, and promotes sectarian divides, and that includes Iran in terms of their activities or perception or whatever.

So I think it’s clear as the Iraqi army stands up more and more, militias and external actors are going to be less and less imperative and needed. But that’s not where they are, and this is – and I emphasize this is not American-designed operation. This was put together by the Iraqis, formulated by the Iraqis, executed by the Iraqis, and that’s the best thing all of us could, frankly, ask for. So we take it the way it is and we’ll hope for the best results and move from there.

With respect to your other question, I really don’t know anything about the award, the process, the – I know, obviously, something of the individual, but let me find out more before I make any comment on it.

QUESTION: (Via interpreter) (inaudible) from Riyadh Radio. Your Highness, so far Iran was not nominated as a terrorism-supporting country, despite Iran is occupying two islands from Emirates and an Arab country as well, also Syria. You’re always blessing the Iranian fight. So far, you have not talked about the Iranian – the Israeli nuclear file. Israel is acting against the human rights. You say the – are trying – so as not to attack any civilians in Iraq. Israel is always infringing the rights of the population in Palestine. The nuclear – the Israeli nuclear file have not been – has not been studied here.

FOREIGN MINISTER AL-FAISAL: (Via interpreter) Let me tell you, Iran doing what it is doing, interference in affairs of Arab countries, it is always a neighbor – it’s also a neighbor. We do not harvest any antagonism against it. If it’s – if it continues on its current positions, (inaudible) it will place itself directly against the Arab interest and against the moral values the international – against the international values. It promotes terrorism and occupies lands. These are not the features of countries which want peace and seeks to improve its relations with the neighboring countries.

We hope that Iran – before the situation develops and antagonism takes place between its neighbors, Iran should stop and listen to the advices of the wise Iranians and leave intervening in the internal affairs of Arab nations. Thank you.

SECRETARY KERRY: Is that it?

FOREIGN MINISTER AL-FAISAL: (In Arabic.) Thank you.

DOD REPORTS ON AIRSTRIKES AGAINST ISIL

FROM:  U.S. DEFENSE DEPARTMENT
Coalition Continues Airstrikes Against ISIL in Syria, Iraq

From a Combined Joint Task Force Operation Inherent Resolve News Release
SOUTHWEST ASIA, March 6, 2015 – U.S. and coalition military forces have continued to attack Islamic State of Iraq and the Levant terrorists in Syria and Iraq, Combined Joint Task Force Operation Inherent Resolve officials reported today.

Officials reported details of the latest strikes, which took place between 8 a.m. yesterday and 8 a.m. today, local time, noting that assessments of results are based on initial reports.

Airstrikes in Syria

Attack and fighter aircraft conducted four airstrikes in Syria:

-- Near Dayr az Zawr, an airstrike struck an ISIL crude oil collection point.

-- Near Kobani, two airstrikes struck an ISIL tactical unit and destroyed four ISIL fighting positions and an ISIL vehicle.

-- Near Tal Hamis, an airstrike struck an ISIL tactical unit and destroyed an ISIL fighting position.

Airstrikes in Iraq

Attack, fighter and remotely piloted aircraft conducted 12 airstrikes in Iraq:

-- Near Qaim, two airstrikes struck two ISIL tactical units and destroyed an ISIL bulldozer.

-- Near Fallujah, four airstrikes struck an ISIL tactical unit, an ISIL headquarters and destroyed two ISIL buildings and an ISIL vehicle.

-- Near Haditha, an airstrike struck an ISIL tactical unit and destroyed an ISIL fighting position.

-- Near Mosul, two airstrikes struck an ISIL tactical unit and destroyed an ISIL vehicle and an ISIL anti-aircraft artillery system.

-- Near Samarra, an airstrike neutralized an ISIL vehicle-borne improvised explosive device.

-- Near Taji, an airstrike struck an ISIL tactical unit.

-- Near Tal Afar, an airstrike struck an ISIL tactical unit.

Part of Operation Inherent Resolve

The strikes were conducted as part of Operation Inherent Resolve, the operation to eliminate the ISIL terrorist group and the threat they pose to Iraq, Syria, the region, and the wider international community. The destruction of ISIL targets in Syria and Iraq further limits the terrorist group's ability to project terror and conduct operations, officials said.

Coalition nations conducting airstrikes in Iraq include the United States, Australia, Belgium, Canada, Denmark, France, the Netherlands and the United Kingdom. Coalition nations conducting airstrikes in Syria include the United States, Bahrain, Jordan, Saudi Arabia and the United Arab Emirates.

MARINE COMMANDANT TELLS CONGRESS BUDGET CONSTRAINTS CAUSING PRIORITIZING OF READINESS

FROM:  U.S. DEFENSE DEPARTMENT
Marine Commandant Outlines Budget-based Priority Shifts
By Amaani Lyle
DoD News, Defense Media Activity

WASHINGTON, March 5, 2015 – The Marine Corps has adjusted to budget constraints by prioritizing the readiness of forward deployed forces, the service’s top officer told Congress yesterday.

Marine Corps Commandant Gen. Joseph F. Dunford Jr. told the Senate Appropriations Committee’s defense subcommittee that amid budget uncertainty, the Marine Corps will strive to meet America’s expectations to successfully operate forward, engage with partners, deter potential adversaries and respond to crises, with 31,000 Marines currently forward deployed and engaged.

Recent Marine Corps missions, Dunford reported, include support to U.S. citizen evacuations in Sudan, Libya and Yemen, ongoing strikes in Syria and Iraq, Iraqi army training and U.S. Embassy protection in Baghdad.

Concurrently, 22,500 Marines remain west of the International Date Line in support of the U.S. rebalance to the Pacific region, the general said.
Budget Informs Decisions

The budget informs how the Marine Corps mans, trains and equips, Dunford said, and also informs how it prioritizes and allocates resources Congress allows.
“I can assure that your forward-deployed Marines are well-trained, well-led and well-equipped,” he told the senators, “but we’ve had to make tough choices to deal with the effects of two wars, sequestration in 2013, and reduced budgets in 2014 and 2015.”

But forward-deployed force readiness, Dunford acknowledged, has come at the expense of investments in home-station readiness, modernization, infrastructure sustainment and quality-of-life programs.

“Approximately half of our nondeployed units … who would respond to unforeseen contingencies suffer personnel, equipment or training shortfalls,” the general said. “In a major conflict, those shortfalls will result in a delayed response and/or the unnecessary loss of young American lives.”

Failure to Modernize Threatens Competitive Advantage

Over time, underinvesting in modernization will force the Marine Corps to maintain older, degraded or obsolete equipment at a higher cost, the commandant said. “It will eventually ruin our competitive advantage,” he added, “and we don’t ever want our Marines and sailors in a fair fight.”

Ultimately, the Marine Corps can meet defense strategic guidance requirements with the president’s fiscal year 2016 budget request, but there is no margin attached to that bottom line, Dunford emphasized.

“Funding below the president’s budget level will require we develop a new strategy,” the general told the Senate panel.

Budget Control Act funding levels, which currently require a return to sequestration spending cuts, would exacerbate the current readiness state, forcing of the Marine Corps to reduce the size of battalions and squadrons required to respond immediately to crises involving diplomatic posts, Americans citizens or U.S. interests.

WHITE HOUSE VIDEO: WEST WING WEEK: 03/06/2015

U.S. CONGRATULATE PEOPLE OF GHANA ON THEIR INDEPENDENCE DAY

FROM:  U.S. STATE DEPARTMENT
Celebrating Ghanaian Independence
Press Statement
John Kerry
Secretary of State
Washington, DC
March 6, 2015

On behalf of President Obama and the people of the United States, I congratulate the people of Ghana as you celebrate 58 years of independence on March 6.

The United States has stood by Ghana’s side ever since you peacefully earned independence and Kwame Nkrumah declared Ghana free forever. When the Organization of African Unity met in Ghana, the American embassy donated its typewriters. When Nkrumah arrived in Washington, President John F. Kennedy was on the tarmac waiting to shake his hand. And six years ago, President Obama traveled to Accra to declare that the 21st century will not just be shaped in Washington, but in African capitals like Accra, as well.

To this day, Ghanaian and American citizens are united in our commitment to democracy, human rights, free enterprise, and peace and security.

We have forged a strong partnership, reinforced by our joint effort to stop the spread of Ebola in West Africa. Ghana remains a critical partner and contributor to UN peacekeeping operations around the world. And we will continue to work closely with the Ghanaian people to strengthen your investment climate in order to expand trade and increase prosperity for all.

On this joyous occasion, I send warm wishes to the people of Ghana.

NASA VIDEO: DAWN NEARS CERES

FDA SAYS 99% OF MILK SAMPLES "FREE OF DRUG RESIDUES THAT ARE OF CONCERN"

FROM:  U.S. FOOD AND DRUG ADMINISTRATION
FDA’s Survey of Milk Finds Few Drug Residues
March 5, 2015

The U.S. Food and Drug Administration today announced results from its milk sampling survey, involving the testing of nearly 2,000 dairy farms for drug residues in milk. More than 99 percent of the samples are free of drug residues of concern-- underscoring the safety of the US milk supply. These findings provide evidence that the nation’s milk safety system is effective in helping to prevent drug residues of concern in milk, even in those limited instances when medications are needed to maintain the health of dairy cattle.

The agency initiated the study to determine whether dairy farms with previous drug residue violations in tissue derived from dairy cows were more likely to have violative drug residues in milk than other dairy farms. The FDA tested samples from two groups: a “targeted” list of farms with known previous tissue residue violations and a control group of farms. Results show that the occurrence of drug residues in milk is very low, even in the targeted group. However, the limited number of residues detected involved drugs that are not included in routine testing under the current milk safety program.

Despite the finding of a small number of drug residues in samples collected, the FDA intends to take steps to maintain the strongest possible system to ensure milk safety. The FDA will work closely with state regulators to consider modifying testing to include collecting samples as necessary from milk tanks on farms when investigating illegal drug residues in tissues involving culled dairy cows. The agency is also working with its milk regulatory partners to update the existing milk safety program, as necessary, to include testing for a greater diversity of drugs and to educate dairy producers on best practices to avoid drug residues in both tissues and milk.

NAVY SECRETARY GIVES TESTIMONY TO SENATE APPROPRIATIONS COMMITTEE DEFENSE SUBCOMMITTEE

FROM:  U.S. DEFENSE DEPARTMENT

Right:  Navy Secretary Ray Mabus testifies before the Senate Appropriations Committee's defense subcommittee on the proposed budget for fiscal year 2016 in Washington, D.C., March 4, 2015. U.S. Navy photo by Chief Sam Shavers.  

Navy Secretary Explains Significance of Sea Power
By Amaani Lyle
DoD News, Defense Media Activity

WASHINGTON, March 4, 2015 – National security interests face heightened threats and demands as budget woes grow more challenging and complex, but the Navy and Marines Corps remain the best value to advance global security and presence, Navy Secretary Ray Mabus told a Senate panel today.
The secretary testified before the Senate Appropriations Committee’s defense subcommittee to reinforce the significance of the naval forces’ rapid, self-contained response and latitude to execute missions.

Power of Presence

“Uniquely, the Navy and Marine Corps provide presence around the world, around the clock,” Mabus said. “We are the nation’s first line of defense, ready for anything that might come over the horizon.”

Mabus cited Article 1 of the Constitution, which he explained authorizes Congress to raise an Army when needed but directs them to provide and maintain a Navy.

“From the first six frigates to our growing fleet today, from Tripoli to Afghanistan, sailors and Marines have proven the founder’s wisdom,” the secretary said.

He also noted that senior U.S. leaders recognize the value of sea power.
“We are truly America’s ‘away team,’” Mabus said. “We deploy just as much in peace as we do in war, and our role in the last 70 years in securing sea lanes and freedom of commerce has boosted our own and the world’s economy.”

Nearly half the world’s population lives within 100 miles of the sea, 90 percent of global trade goes by sea and 90 percent of all voice and data go under the sea, Mabus said.

According to the secretary, some 38 million jobs in America are directly linked to seaborne international trade.

Mabus described the Navy and Marine Corps as the “primary protectors” of an international system that has created unprecedented economic growth.

“While we’ve led this effort,” he said, “we’ve worked with allies and partners, increasing interoperability, establishing relationships that also help keep the peace.”

As a result, the national defense strategy, Mabus said, is focused on the maritime domain and requires investment in maritime assets.

People, Platforms, Power, Partnership

Still, in recent years, the Navy has braced in the wake of budget turbulence marked by numerous continuing resolutions and the specter of sequestration’s return. The environment, he recounted, has spurred difficult but critical choices, which have helped mold the foundations of presence: people, platforms, power and partnership.

Mabus praised sailors and Marines, whom he described as adaptable and armed with independent judgment.

“We remain committed to providing our sailors, Marines, and our civilians with the training and support they need to maintain our naval presence -- and we include in this their dedicated families and our wounded,” he said. “We’ve launched a comprehensive approach to assure the world’s healthiest, fittest, most resilient and best-educated force, truly representing America’s diversity.”

But people, no matter how prepared, need platforms -- ships, submarines, aircraft, systems and equipment -- to perform their jobs, Mabus said.

Quantity has a quality of its own, he said, adding this philosophy calls for a properly sized and balanced fleet.

On Sept. 11, 2001, the Navy’s battle force stood at 316 ships, Mabus said, before a sharp drop in 2008 to 278 ships. He said the focus on two ground wars over the past decade only partly explains the decline.

Mabus said in the five years before hetook over as Navy secretary, the Navy contracted for only 27 ships, which he maintained was not enough to stanch the decline in the fleet size.

Mabus reported the Navy contracted for 70 ships during his first five years on the job, halting and reversing the decline. And by decade’s end, the service expects to be at 304 ships.

“We accomplished this with a direct and fundamental business approach,” he said, “increasing competition, relying more on fixed-price contracts … and multi-year block buys.”

But budget instability, Mabus said, hampers the Navy’s ability to manage and grow the fleet and maintain the industrial base.

Cutting ships, he added, is the most “damaging, dangerous and least reversible” course of action.

“Fueling those ships, aircraft and vehicles of our Navy and Marine Corps is a vital operation of concern and enables the global presence necessary to keep the nation secure,” Mabus said.

The Navy therefore has a history of innovation, particularly in energy, from sail, to steam, to oil and nuclear pioneering, the secretary said.

“Our national security interests in the Navy and Marine Corps to meet their missions,” he said, “must be enhanced by increasing our energy diversity.”

Additionally, presence and global security will be augmented through partnerships and cooperation, ensuring the Navy remains an immediate, capable and adaptable option when a crisis develops, the secretary said.

Though President Barack Obama’s proposed fiscal year 2016 budget balances current readiness while sustaining a highly capable fleet, Mabus said, the current budget climate demands a rigorous examination of every dollar spent and aggressive efforts to cut unnecessary costs from tail to tooth.