MEN CHARGED FOR ILLEGAL CAPTURE AND MAIMING OF MOUNTAIN LIONS AND BOBCATS

FROM:  JUSTICE DEPARTMENT 
Wednesday, January 8, 2014
Colorado Big Game Outfitter and Assistant Guide Charged with Conspiracy for Illegal Capture and Maiming of Mountain Lions and Bobcats in Colorado and Utah

Christopher W. Loncarich, 55, of Mack, Colo., and Nicholaus J. Rodgers, 30, of Medford, Or., were charged yesterday in the District of Colorado with conspiracy to violate the Lacey Act, interstate felony transportation and sale of unlawfully taken wildlife, and felony creation of false records concerning wildlife that was sold in interstate commerce.   The 17-count indictment was based on the pair’s practice between 2007 and 2010 of illegally capturing and maiming mountain lions and bobcats as part of a scheme to make hunting the cats easier for their clients.

The indictment alleges Christopher Loncarich is a big game outfitter and hunting guide who operates mainly in   western Colorado on the border with Utah.  Mr. Loncarich outfits and guides hunts for mountain lions and bobcats in the Bookcliffs Mountains, which span the Colorado-Utah border.  Mountain lion and bobcat hunting are labor-intensive pursuits.  The hunting seasons for the cats stretch from November to March when snow is likely to be on the ground.   Guides commonly release highly-trained dogs on the track of the cats after the guides discover a track in the snow.  The process is for the hunting dogs to follow the cat’s scent in the snow, then tree, corner or bay the pursued cat.   At that point a hunter arrives and kills the treed cat.

The allegations include that Mr. Loncarich and his assistant guides devised a scheme whereby they would trap the cats in cages prior to hunts and release the cats when the client was nearby.   Mr. Loncarich, Mr. Rodgers and other guides would communicate by radio to ensure that they took their clients to the location where the cats had been released.   In order to keep the cats in the areas of potential hunts Mr. Loncarich, Mr. Rodgers and other guides would sometimes shoot the cats in the paws or legs or attach leghold traps to them.  Many of the clients Mr. Loncarich and Mr. Rodgers guided did not have proper tags or licenses to take mountain lions or bobcats in Utah.   Despite knowing that the clients were hunting in Utah without proper licenses or tags, the pair continued to guide the hunts.  Ultimately, Mr. Loncarich, Mr. Rodgers and other guides brought the animals taken in Utah back to Colorado.   Mr. Loncarich often took the client to “check in” the illegally taken mountain lions with the Colorado Division of Wildlife (now “Colorado Parks and Wildlife”) where Mr. Loncarich would provide false records to obtain seals for the hides.   Many of the cats were then transported back to the clients’ home states.   To date, four assistant guides have pleaded guilty to offenses arising from the conspiracy.

An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The case was investigated by the U.S. Fish and Wildlife Service Office of Law Enforcement, Colorado Parks and Wildlife, and Utah Division of Wildlife Resources, and is being prosecuted by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

MAN PLEADS GUILTY TO LACY ACT VIOLATIONS IN COLORADO

North American Elk.  Credit:  Wikiomedia Commons.

FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, February 13, 2013

Colorado Big Game Outfitter Sentenced to Prison for Six Lacey Act Felonies

Big game hunting outfitter Dennis Eugene Rodebaugh, 72, of Meeker, Colo., was sentenced in Denver today to 41 months in prison to be followed by three years supervised release for six felony counts of violating the Lacey Act, announced the Department of Justice Environment and Natural Resources Division, the U.S. Fish and Wildlife Service and Colorado Parks and Wildlife. District Judge Christine M. Arguello also sentenced Rodebaugh, to pay a $7,500 fine to the Lacey Act reward fund and $37,390 in restitution to the state of Colorado for the value of illegally taken elk and deer.

Rodebaugh was found guilty by a jury in September 2012 of aiding and abetting six violations of the Lacey Act by providing outfitting and guiding services from salt-baited tree-stands between 2005 and 2007. Beginning in 1988, Mr. Rodebaugh began offering multi-day elk and deer hunts to out-of-state clients on the White River National Forest through his outfitting business, called "D&S Guide and Outfitter," for between $1,200 and $1,600.

Rodebaugh's assistant guide, Brian Kunz, was also sentenced today. He previously pleaded guilty to two misdemeanor counts of violating the Lacey Act while working for Rodebaugh. Based on his acceptance of responsibility and the government’s motion for downward departure based on his cooperation, the court sentenced Mr. Kunz to time served (one day) and one year of probation plus a $2,000 fine

Each spring and summer, Mr. Rodebaugh placed hundreds of pounds of salt as bait near the tree-stands from which his clients would hunt deer and elk with archery equipment. The placement and use of salt to aid in the taking of big game is unlawful in Colorado. The interstate sale of big game outfitting and guiding services for the unlawful taking of big game with the aid of bait constitutes a violation of the Lacey Act.

This case was investigated by Colorado Parks and Wildlife and the U.S. Fish and Wildlife Service.

The case was prosecuted by Senior Trial Attorney J. Ronald Sutcliffe and Trial Attorney Mark Romley, of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.

STATE MARIJUANA LAWS VS FEDERAL LAW AND UNIFORM CODE OF MILITARY JUSTICE

On election day, the state of Colorado voted to legalize marijuana; however, its use is still against federal law and the Uniform Code of Military Justice, even for service members stationed in the state. (U.S. Air Force graphic by Staff Sgt. Nicholas Rau)

FROM: U.S. DEPARTMENT OF DEFENSE

Caution urged to service members after Colorado legalizes marijuana

by Staff Sgt. Nicholas Rau
460th Space Wing Public Affairs

11/16/2012 - BUCKLEY AIR FORCE BASE, Colo. -- On election day, the state of Colorado voted to legalize marijuana; however, its use is still against federal law and the Uniform Code of Military Justice, even for service members stationed in the state.

This should come as no surprise to military members as the use of narcotics, in or out of uniform, is illegal. For family members and civilians with access to the base, they need to remember one crucial fact if they do participate in recreational marijuana use -- marijuana is not allowed on Buckley or any other military base.

"Once they cross over that threshold and enter a federal installation, they are under our jurisdiction and will be prosecuted," stated 1st Lt. David Bruton, 460th Security Forces Squadron acting commander. "There is no give, no fine line; it's black and white."

There are many scenarios that could place an Airman in the crossfire when it comes to marijuana exposure, especially now that there may be increased usage by civilians within the state. Military members should be continuously cautious of their surroundings and know when they're at a house where the drug is present, be aware if marijuana is baked into food, or realize when they are in an establishment that allows recreational use of the drug. All of these situations are potential pitfalls a service member could fall into if not careful, but Bruton offers advice to Team Buckley to stay out of trouble.

"Play it smart and just stay away from it," explained the 460th SFS acting commander. "Be aware of your surroundings and who you hang out with, because it is usually that other person that gets you in trouble."

The passing of the new amendment will have no affect on the Drug Demand Reduction Program, and random drug testing will continue as scheduled to ensure individuals are in compliance with the UCMJ.

"Amendment 64 does not change the UCMJ," said Chief Master Sgt. William Ward, 460th Space Wing command chief. "If our members are engaging in the use of marijuana and are found out through random urinalyses or other investigative means, I would expect commanders to bring the full force of the UCMJ. Marijuana use immediately jeopardizes their continued service in the United States Air Force."

With a drug that is federally illegal, tested for regularly and ends military careers, the best option is to simply avoid marijuana.

"You're saving yourself a lot of trouble by just staying away from it all together," stated Capt. Eric McCutchen, 460th Space Wing Judge Advocate Office chief of military justice.


　

BUCKLEY AIR FORCE BASE POWERS FORWARD TOWARD ENERGY GOALS

Space supports
Space Duty Technician Staff Sgt Cristina Kavanagh, deployed from Buckley Air Force Base, Colo., and Space Duty Officer 1st Lt. Tanya Frazier, deployed from F.E. Warren AFB, Wyo., provide space-based theatre ballistic warning to U.S. forces in the Southwest Asia theatre from the Combat Operations Space Cell inside the Combined Air Operations Center. They also run Global Positioning Satellite predictions to ensure GPS accuracy and support Personnel Recovery/Combat Search and Rescue missions when necessary via space support. (U.S. Air Force photo by Master Sgt. Scott Wagers)

FROM: U.S. AIR FORCE SPACE COMMAND
Buckley endeavors to meet, exceed energy goals
by Staff Sgt. Kali L. Gradishar
460th Space Wing Public Affairs

11/1/2012 - BUCKLEY AIR FORCE BASE, Colo. -- For a base with a main mission that requires immense power sources and an abundance of electricity, the task of reducing energy consumption is no easy feat. However, Buckley is on par with researching the latest and greatest in efficient technologies and implementing them if found cost effective.

"The Air Force is known for its innovation, and researchers and scientists in our labs are working diligently to help develop the game-changing technologies that will be essential to future operations," said Secretary of the Air Force Michael B. Donley at the National Clean Energy Summit 5.0 - Power of Choice in Las Vegas in August.

"Experts in the 460th Civil Engineer Squadron are doing their part as they research efforts in the commercial industry, new and improved technologies, and initiatives within Air Force Space Command," said Ken Webb, 460th CES energy manager. "They explore how much energy the technology saves and if such schemes are employable at Buckley. They also research how much it would cost to run and if the technology is cost effective."

All efforts to reduce Buckley's use of resources fall in line with requirements to reduce energy and water consumption.

"Per federal mandates and Defense Department guidance, we have to reduce energy (intensity) by 30 percent by 2015 and water (intensity) by 26 percent by 2020," Webb said. "That's an intensity metric. It's not necessarily a complete reduction. Since Buckley Air Force Base is growing - we get new base partners and we're also growing the mission - the goal is to build new energy-efficient facilities.

"By building low energy-intensity buildings," Webb noted, "we're being more responsible with the energy we consume."

Webb explained that Buckley is trying to exceed mandated goals to bolster command-wide achievements. Within AFSPC, Buckley accounts for four percent of energy usage.

"In terms of energy efficiency and intensity we're actually below the Air Force average, and we're one of the more energy efficient bases in Space Command currently," Webb said. "Our concern now is energy demand - reducing our consumption during peak periods."

Reducing peak-hour energy consumption can be especially important in a four-season state where residents see all types of weather. Buckley's location requires extra consideration for heating and cooling technology and costs to accommodate for both cold and hot temperatures.

"We see all temperature ranges, for the most part, so we have to be prepared for hot climates and cold climates," Webb explained. "That increases our workload. Geographical location makes us have to be more creative for renewable technologies."

Projects recently completed and those currently being implemented create a more energy-thrifty installation.

Solar panels topping some base buildings and a solar field supply a portion of the energy for the base. Programmed systems regulate temperatures during off times to reduce heating costs. Also, new LED lights now line Aspen Street. The rest of the 460th Space Wing parking lot and street lights will gradually follow suit.

"After replacing nearly 500 light fixtures on base, expected savings from the LED project alone reach $42,000 a year," Webb said. "With the solar panels, temperature regulation and LED lighting projects, you can find a lot of buildings have subtle technologies added to them."

Less subtle is the potential project to update the Buckley Exchange. Tested previously at shoppettes in the continental U.S., energy-minded professionals brainstormed and implemented ways to make the quick-stop shops less of an energy sponge.

"Estimated savings in the shoppettes was around 30 to 40 percent. They ended up receiving about 45 percent actual savings, and now they're rolling out those changes that they made to 270 or so shoppettes across the CONUS," Webb noted. "There is hope that if they get the same sort of results at the Buckley Exchange, we'll have one of the most efficient exchanges in the Air Force.

Another major project currently funded for design under the energy manager's scope is a geothermal system shared between 10 AFSPC facilities, a potential endeavor should it prove cost effective after design and analysis.

"Not only is it a shared geothermal system, it also shares the heating, ventilation and air conditioning system already installed," Webb explained. "It's developing five technologies into one project."
"We're still developing, so it's not 100 percent, but it's what we like to call our second generational projects. We're trying things that are more unique," Webb said. "We feel that the need to be creative on an already energy-efficient base is what we should be doing."

While there are a number of highly technical and large projects ongoing to decrease resource consumption, all Team Buckley members can contribute to consumption reduction efforts.

"Air Force driven initiatives are important, but it is critical to remember that Airmen play a key role in achieving our energy objectives," Donley said during the National Clean Energy Summit. "We will look to their continued creativity and focus on energy to obtain an assured energy advantage in air, space, and cyberspace."

Webb advises people to practice basic energy-saving habits such as turning off lights when not in the room and turning off monitors at the end of the day or when not in use. Offices should also consolidate appliances in the work center and consider replacing old, inefficient appliances if possible, he said. Using windows for lighting when feasible during the day can also reduce electricity usage.

"Additionally, people can report any deficient items, such as leaking water fixtures and improper lighting, their facility managers who then report to the 460th CES customer service. For example, a leaking toilet can waist more than 35,000 gallons, equating to approximately $400 per month," Webb added.

Across the board, the energy manager works with a team of professionals to ensure Buckley is taking the right steps to becoming as energy efficient as possible.

"We're looking at our mission operations and how we can do it more efficiently, and that's a big part of Air Force Space Command as a whole," Webb noted. "We know we can, but the question is how. That's the next big hurdle for us."

　

　

　

FEMA RELEASES MONEY TO FIGHT HYDE PARK FIRE

Photo:  File, C-130 Fighting Fire.  Credit:  U.S. Air Force
FROM:  FEDERAL EMERGENCY MANAGEMENT AGENCY
FEMA Authorizes Funds to Help Fight Colorado's Hyde Park Fire
DENVER, Co. -- The U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA) has authorized the use of federal funds to help with firefighting costs for the Hyde Park Fire located in Larimer County.
FEMA Regional Administrator Robin Finegan approved the state’s request for a Federal Fire Management Assistance Grant (FMAG) at 7:19 p.m on June 9, 2012. The fire has burned in excess of 4,000 acres of federal and state/private lands.

At the time of the request the fire was threatening 150 homes in and around Fort Collins, population 299,630. The fire is also threatening campgrounds in the area, the Stove Canyon and Poudre Canyon watersheds and an unknown amount of other infrastructure.

The authorization makes FEMA funding available to pay 75 percent of the state’s eligible firefighting costs under an approved grant for managing, mitigating and controlling designated fires.

FMAGs are provided through the President's Disaster Relief Fund and made available by FEMA to assist in fighting fires that threaten to cause a major disaster. Eligible items can include expenses for field camps; equipment use, repair and replacement; mobilization and demobilization activities; and tools, materials and supplies.

These grants do not provide assistance to individual home or business owners and do not cover other infrastructure damage caused by the fire.

U.S. OFFICIAL MAKES REMARKS AT WORLD TRADE WEEK

Photo Credit: Wikimedia. 
FROM:  U.S. DEPARTMENT OF STATE
Promoting American Economic Leadership
Remarks Jose W. Fernandez
Assistant Secretary, Bureau of Economic and Business Affairs Denver, CO
May 17, 2012
It is great to be in Denver, and celebrate World Trade Week with you. Denver’s unique location - midway between key trading partners Canada and Mexico and the exact midpoint between Tokyo and Frankfurt – makes it the perfect place to discuss the importance of trade and investment to our nation’s security and prosperity.

Secretary Clinton has made Economic Statecraft a central pillar of U.S. foreign policy. She has made it clear to anyone who is willing to listen that as emerging nations increasingly deal in economic power as their primary means of measuring and exercising influence, how we think and practice U.S. foreign policy, and what we do in the commercial realm, must adapt. And she also made clear that many of the strategic and military challenges facing the United States today must be met with economic solutions. In short, the United States’ global leadership is critically linked to the vitality of our economy, and now more than ever, U.S. foreign policy must be a force for U.S. economic renewal.

This intersection of economic strength at home and security abroad is what we try to work on every day at the State Department. Much of what I do is work to break down barriers, so companies can invest, trade, and compete on equal footing through the world. What we are trying to do is: 1) promote U.S. exports, 2) attract foreign investment into the U.S., which sometimes get short shrift, and 3) help U.S. companies take advantage of opportunities. I will discuss each of these areas today.

Promoting U.S. Exports
Let’s start by talking about exports. Ninety-five percent of the world’s consumers live outside of the United States. Given this reality, exports are critically important for the health of our economy. Here in Colorado you are no strangers to exports. Nearly one-quarter of all manufacturing workers depend on exports for their jobs. Companies like the 2011 recipients of the “Governor’s Award for Excellence in Exporting” – StoneAge Inc., Abound Solar, Magnolia Trade, and RNL. And this is why two years ago in 2009, President Obama launched the National Export Initiative, with the goal of doubling U.S. exports in five years. This month’s trade data shows that U.S. exports have continued to increase this year, despite some really difficult economic conditions abroad. We are on track to meet the President’s goal. U.S. exports over the past 12 months have reached historic highs, and represent an increase of nearly 36 percent over the levels we started with. Although U.S. exporters are facing headwinds, particularly from what’s going on in Europe, the U.S. is well on pace to again achieve record levels of exports in 2012. And remember, the President’s export goal was coupled with a promise that those exports would support as many as two million good, high-paying, export-related jobs here at home. In fact, record-breaking levels of U.S. exports have already supported an additional 1.2 million U.S. jobs.

Free Trade Agreements
Free trade agreements are an important piece of meeting this export and jobs goal. Last year the three agreements that passed – South Korea, Colombia, and Panama – were the result of years of negotiations. They are vital for ensuring the United States does not fall behind competitor countries in our market access. The U.S.-South Korea agreement – entered into force March 15, and American companies are already reaping the benefits. The Colombia agreement entered into force just this past Tuesday, May 15, – a fitting event for World Trade Week. And we are working with Panama to get their agreement into force, hopefully this year.

Let me take a minute to talk about Korea and Colombia and why these two agreements are so important.
Colombia is the third largest economy in Central and South America. This comprehensive trade agreement eliminates tariffs and other barriers to U.S. exports, expands bilateral trade and promotes economic growth for both countries. Since last Tuesday, 80 percent of U.S. industrial and consumer goods enter Colombia duty free. And this agreement does all of this while ensuring protections for labor, the environment, and intellectual property. Something else it did and we spent a lot of time negotiating with the Colombians on. The Agreement also creates market access for the services sector, which is a $180 billion market in Colombia.

KORUS was the largest U.S. trade agreement in almost two decades, basically since NAFTA, and our first with a north Asian partner. The entry into force of the agreement meant countless new opportunities for U.S. exports in goods, services, and agricultural products. Experts in the know estimate the reduction in Korean tariffs and tariff-rate quotas on goods alone will increase merchandise exports to Korea by $10 billion annually. The KORUS FTA will also provide U.S. suppliers with greater access to the Korean government procurement market – a major market in Korea. This is good news for Colorado since Korea is one of your top ten export markets.

Now Colorado is no export neophyte. You exported over $7 billion worth of goods last year. Your largest export markets of Canada, Mexico, China, the Netherlands, and Germany represent an impressive geographic mix. And while one-third of your exports go to NAFTA partners, China is one of your fastest growing markets. This pivot to Asia, while maintaining the importance of the Western Hemisphere, mirrors what we are trying to do with respect to our economic foreign policy.

We are starting to think of the increasingly interconnected regions of the Americas and Asia as an integrated whole – a broader Pacific with commonalities beyond geographic proximity. And I’ll get into this later as I talk about the next agreement coming down the pike. This Broader Pacific already includes more than half of the world’s population, many of its most important economies, key allies, and emerging powers. More on that in a minute.

Closer to home, the Americas are a natural complement to our strategy in the 21st century Pacific. Nearly all nations of the Americas are growing markets. We export over three times as much to Latin America as we do to China. We sell more to Colombia than to Russia. And last year our trade with Latin America increased by 20 percent. In fact, the increase in trade between Canada and the U.S. last year alone was double our entire bilateral trade with India, which shows the importance of the Western Hemisphere.
With the passage of the Colombia and Panama free trade agreements, we move closer to our ultimate goal of a hemispheric trade partnership reaching from the Arctic to the tip of South America. What this will do is turn to our advantage as Secretary Clinton has said, the power of proximity, our shared history and geography, to turn growth across the Americas into recovery and jobs here at home.

But we are not standing still on trade, we are looking ahead to the next generation of trade agreements, and this is where the Broader Pacific comes in. We are aiming to craft a high-standard agreement that addresses new and emerging trade issues and challenges, including those in agricultural market access. And this new agreement is the Trans-Pacific Partnership (TPP). Even as I speak, the TPP countries are in Dallas negotiating the details.

The United States, along with eight other countries, is negotiating this high-standard, broad-based, regional agreement that we call a 21st century trade agreement. The Trans-Pacific Partnership will bring together both developed and developing countries’ economies from across the Pacific into a single trading community.

It will address new cross-cutting issues, such as helping small- and medium-sized enterprises to take advantage of this FTA. And we are working to ensure TPP, includes protections for workers rights, the environment, and intellectual property. The TPP aims to promote a level playing field to ensure that private companies have just as much of a chance to compete as state-owned enterprises. Our hope is basically that the Trans-Pacific Partnership can serve as the gold standard for future trade agreements, and will serve as a platform for broader regional integration and eventually a Free Trade Area of the Asia-Pacific. That’s exports.

Foreign Investment
Let’s talk about something related to it – foreign investment. Foreign investment flows are vital currents of the global economy. Foreign investment, both inward and outward, contributes to economic growth and job creation in the United States and around the globe. Foreign firms investing in the United States create jobs, spend money on research and development, and make capital investments. They also fuel American exports. In 2009, 55 percent of exports flowed from U.S. firms that invest abroad, and 21 percent of all exports came from U.S. subsidiaries of foreign firms. Firms that had invested in the United States.

In Colorado, you know the value of investment from abroad. Foreign investment is responsible for nearly five percent of Colorado’s private industry employment. Renewable energy companies from Denmark and Japan have headquarters in this state for solar and wind products. Firms from the United Kingdom, Canada, France and Germany are leading investors in your economy.

And so we’re doing two things in the investment realm that I’d like to talk about – a new Model Bilateral Investment Treaty and a program called SelectUSA.

Bilateral Investment Treaties, or BITs, promote a level playing field for U.S. companies abroad when they invest abroad, promote market access and the rule of law, and provide fair dispute settlement procedures when our investors get into trouble abroad. Negotiating new BITs also helps us keep pace with economic competitors that have entered into, or are negotiating investment agreements with major economic players, such as China, India, and Russia. High-quality Bilateral Investment Treaties not only support our engagement with the major emerging economies, they can help our developing country partners attract foreign investment that boosts economic development.

For two years, about since I came into office, we negotiated with ourselves on a new model. The 2012 U.S. model BIT provides the basis for all new BIT negotiations. It improves protections for U.S. firms, enhances transparency and public participation, and strengthens the protection of labor rights and the environment. These agreements will not only protect overseas investments by American firms, but they will also make it easier to invest in America. Now that we have agreed on a model for negotiations, we will be in a position to restart BIT negotiations with China, India, and other large markets. That’s investment treaty.

Let’s go to the other side of the coin and talk about foreign direct investment. Last year, $220 billion in foreign direct investment flowed into the United States. That was #2 in the world. Through our new SelectUSA initiative, we are working to attract more investment to the United States. Because investment means jobs. We want to let everyone know that the United States, including states like yourselves and cities like Denver, has an attractive business and investment climate, is one of the easiest places in the world to do business, the world’s center of innovation, has transparent and predictable legal system, and has a highly educated workforce.

This September, President Obama will host the first annual SelectUSA Investment Summit in Washington, DC. Hundreds of foreign firms looking to expand their operations in the U.S. are expected to be in attendance. State and local economic development professionals, including from Colorado, will also be invited to attend. This first-of-its kind Summit will create an opportunity for state and local leaders to meet directly with an array of foreign firms. Details of the Summit will be available soon on the SelectUSA website. I encourage you to look at the SelectUSA website run by Commerce.

How We Support Business
We are committed to helping our small- and medium-sized businesses take advantage of the great opportunities that exist overseas. Eighty-eight percent of companies exporting from Colorado are small and medium-sized enterprises. We know that it is not always easy for these companies to develop the know-how to break into overseas markets. Now, we also know that it can be a challenge for SME’s to learn about opportunities abroad or how to take advantage of them. That is why the State Department recently started a program called Direct Line. This program provides a unique opportunity for American businesses, particularly small- and medium-sized enterprises, to engage directly via teleconferences with U.S. ambassadors overseas. Each call is specific to a country and a sector, and often includes a local government official as well. There is always time to ask questions. For example, our embassy in Peru held a call focused on infrastructure, while our embassy in Turkey used their call to discuss on investment incentives promulgated by the Turkish government. I personally participated in both of these calls, and I really would encourage you to find out more information and register by visiting the State Department’s website.
This brings me to infrastructure. There are huge opportunities in these markets. Infrastructure projects are an area where the U.S. should be more present. On a trip this past winter to Peru and Colombia, I kept hearing the same thing: there are lots of infrastructure opportunities, but U.S. companies are not showing up. Countries are spending billions of dollars on infrastructure projects. I visited Brazil a month ago with Secretary Clinton, and Brazil alone is investing $100 billion in the run up to the World Cup and Olympics. The Indians have announced $1 trillion in the next five years. We’re trying to find ways to make sure American architects, construction management and engineering companies, and U.S. suppliers are positioned to compete for overseas contracts and benefit from the global construction boom – believe best opportunity for American companies for years to come. I could on with North Africa – Tunisia, Morocco.
We are helping companies take advantage of these opportunities by talking directly with our counterparts in foreign governments who are often the decision-makers in large infrastructure contracts. We are also coordinating with our partners in the federal government, such as the Department of Commerce and the Small Business Administration, to make sure U.S. companies know about these opportunities. Just two weeks ago, I took 30 American companies to Libya to explore infrastructure opportunities in the Libyan reconstruction. I hadn’t been there since before the revolution and slept next to a flack jacked, but there are opportunities. If you take anything away from my talk this morning, it is get involved in infrastructure. If you don’t, other countries will.

Conclusion
Colorado already takes advantage of its strategic geographic location to export to Asia, Europe, and the Americas. But we need to help you do more. We need to help all states take advantage of each state’s unique attributes to take advantage of opportunities out there to maximize exports and encourage foreign investment.

At the State Department, with our far-reaching platform overseas and Washington-based expertise, we are uniquely positioned to promote American economic leadership around the world. We have over 1,000 economic officers at our embassies and consulates and a staff of 200 in Washington working on these issues. We intend to use all of the tools at our disposal, especially the tools of diplomacy and business advocacy, to support American economic priorities. Our goal is to promote a world where open, free, transparent, and fair trade and investment is the norm of the world and if we can do that, I’m sure our companies will benefit.
Thank you.

SEC COMMISSIONER COMMENTS IN COLORADO ON SEC'S NEED FOR IMPROVED ENFORCEMENT

SPEECH FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION
The Mountains Denver, Photo credit:  Tom Lianza 
Denver, Colorado
April 13, 2012
Commissioner Daniel M. Gallagher:
Thanks George [Curtis], for your generous introduction and years of good counsel – to say nothing of your hospitality. And thank you too, Don [Hoerl], for a great visit to the SEC’s dynamic Denver office yesterday. It’s good to be here among friends this morning – and, as for the rest of you, I’m happy to share my Friday-the-thirteenth with you.
Before I begin, I must tell you that my remarks today are my own and do not necessarily reflect the views of the Commission or my fellow Commissioners. 

It is especially nice to be here with you in Denver because, in addition to enabling my participation in this important conference, it gave me a perfect opportunity to make my first official visit as an SEC Commissioner to a regional office. In meeting yesterday with the staff of our Denver office, I was quickly reminded of the excellent talent that the SEC is able to attract in our regional offices.

Having a regional presence is of key importance to the Commission. Thank heavens, American business and the entrepreneurial energy that drives it are not confined to our financial capitals. Sadly, neither are the misfeasance and outright fraud that we are charged with rooting out in order to promote the vitality of our capital markets and their attractiveness to investors of all sorts.

Our regional presence literally extends our physical reach across the country, making it far more efficient to have Enforcement and OCIE staffers on-site in far-flung places. And history has demonstrated that our well-placed regional offices and our expert staff in each of those locations are wise investments, significantly enhancing our ability to protect investors in a timely and effective manner.
***
In the five months that I’ve been back at the SEC, I have enjoyed the special vantage point afforded to Commissioners. Upon my return, I brought with me an awareness of how things were when I last served at the Commission as Deputy Director of the Division of Trading and Markets until early 2010. During my previous stint at the SEC, I had the opportunity to work directly with each of the SEC’s two most recent Chairmen. So I thought I would share with you some perspectives on where we are, in the context of where we’ve been, as an agency, with a special focus on the Division of Enforcement.
The financial crisis that took hold in 2008 had a major impact on the SEC. In fact, that’s a pretty big understatement. Not only did it call into question the role of the agency with respect to oversight of market participants, but it was the “low tide” that exposed the fraudulent schemes of many scoundrels, Madoff and Stanford in particular. It was into this firestorm that our Chairman, Mary Schapiro, arrived in 2009. Her willingness to return to the federal government at such a time is a terrific example of the strength of her commitment to public service.

One of the Chairman’s immediate tasks was to address perceived shortcomings in the agency’s Division of Enforcement. This task was assigned in large part to one man, Rob Khuzami, who came to us as Enforcement division director in 2009. Like the Chairman, Rob is a committed public servant, having been a federal prosecutor in New York who handled many of the most important cases of the day, including the trial and conviction of the infamous “blind sheik.” Rob has a long and exemplary record of public service – if you don’t believe me, just ask him, he’ll tell you!—and it was this commitment that brought him to the SEC.

I want, in particular, to commend Chairman Schapiro and Rob Khuzami for restructuring the Division into specialty groups and for eliminating what they found to be a redundant layer of management. The securities laws and many of their interconnected implementing rules are far too complex for us to have persisted in pretending that some degree of substantive specialization and knowledge-capture weren’t necessary. The Chairman and Rob [Khuzami] realized that and made the change, despite the reservations of many who preferred things as they had been. We move a bit slowly at times, but, as University of Maryland Terrapin fans back home insist, “fear the turtle!”

Don’t get me wrong; Enforcement already worked pretty well. I do not believe it was “broken,” in any ordinary sense, and so it did not need “fixing.” It didn’t need to be restructured in order to bring good cases, or to attract good lawyers. Many of you are living testaments to that incontrovertible fact. So, making full allowance for the ways of Washington, where a convenient bit of press coverage can be reason enough to do just about anything, the “whys” behind the restructuring are important. But it is hard to disagree with the idea that a change – a new way of approaching problems both old and new – was necessary, and in light of that I believe the restructuring was a success.

Many inside and outside the building asked “why restructure Enforcement?” The answer is, it seems to me, because we need to do more – faster – with the resources, both human and material, that we already have. You may, like me, have noticed over the past few years an SEC refrain that is very Washington – that we need more “resources.” That means money and, derivatively, people and neat, new technology – in that order.
The problem is that the “give me more and I will do more for you” argument is ultimately circular. In practice, it can be translated something like this – “I can’t do better until you give me more” – and in that form, particularly as applied to the Division of Enforcement, this should not be the case. We cando more with – and without overburdening – the very fine staff we have by increasing our efficiency, for example, by choosing our cases carefully, terminating unfruitful investigations quickly, and harnessing the full benefits of technology. Although my mind is still open as to whether we captured all of the appropriate areas with our selection of specialty groups, I find that the Division’s restructuring itself is a good example of positioning ourselves to do more, better, with the expertise and technology we already have.

I assume that, as markets, market participants, and market practices change, so too will the composition and focus of our specialty groups. Indeed, the recent restructuring builds on the successful records of earlier working groups like the “Hedge Fund Task Force” and the “Microcap Fraud Task Force.” In fact, back when I worked for Chairman Cox, I served as his liaison to an interdivisional “Subprime Working Group” he established. I am proud to see that many cases started in that working group are coming to fruition today.
All of these were creative responses to the need to foster, in the SEC’s Division of Enforcement and throughout the SEC, not only greater expertise, but also efficiency. The positive results of these earlier experiments in interdisciplinary analysis were a solid foundation on which to build the recent full-blown specialty group restructuring in Enforcement. The need to increase our efficiency is a way to make our requests for additional resources more credible. The familiar plea for more “boots on the ground” is a good deal more persuasive amidst the competing demands and vagaries of the budget process when we can show that we are using our staff expertise and technology as effectively as possible – even when that may require us to change our longstanding work habits.

Ultimately, of course, our financial condition is out of our control. So, we should focus on what is under our control -- enhancing our Enforcement staff’s expertise and efficiency. Again, organizing the Division into specialist groups is an important step in the direction of enhancing both expertise and efficiency, for obvious reasons.
On the technological side, I want to commend another very worthwhile innovation, creation of a computer-based “tips, complaints, and referrals” system, inevitably nicknamed “TCR.” The primary idea was to get tips and complaints to the desks of those who might need and could evaluate them, quickly and across all internal frontiers. I gather that we’re almost there, with the significant caveat that having a large volume of unevaluated tips hit your electronic desk every day is not a gift in any ordinary sense – especially when, from experience, we know that many of them, for various reasons, will not yield fruit. However, that one tip, that proverbial needle in the haystack, might just lead you to the next major Ponzi scheme.

A secondary purpose of the TCR system is, frankly, not yet realized. TCR has not yielded any useful dataset for analysis. It remains, for us, the ultimate unstructured database. What we hope will someday be a stream of timely information on suspected market misfeasance, prompting not only fruitful investigations, but also guiding our market inspection and market surveillance efforts cannot now be mined. For an apt analogy, that is the difference between a few million sticky-notes and Google. So as to TCR, well begun, but not yet done. I look forward to the day when our experts in the Division of Risk, Strategy, and Financial Innovation will have brought that system up to its full potential as an interdivisional analytic resource.
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As many of you know, the Division of Enforcement turns 40 this year. Although today’s Division is very different from the group that former Commissioner Irv Pollack led in 1972, some things remain exactly the same. One of those things is the Division’s role in giving effect to the Commission’s commitment to due process.
It was, in fact, just before Chairman Casey established the Division of Enforcement that the “Wells Committee” issued its report – one of whose 43 recommendations endorsed what we now refer to as “Wells notices” and “Wells submissions,” the pre-litigation procedural hallmark of SEC practice. And, although the Wells Committee’s endorsement was the news, what the Wells Committee really did was to underscore the importance of a procedural norm that Chairman Hamer Budge had announced in a memorandum to division and office heads two years earlier – two years before a stand-alone Division of Enforcement came into existence.

Chairman Budge, and later the Wells Committee, simply said that a prospective respondent should be given advance notice of the likely charges and have an opportunity to respond to them in a writing that would accompany any recommendation the staff might make for Commission action. Our “Wells process” is, in other words, a matter of procedural decency and fairness – of “due process” – and, for us, a very good last minute check on investigative enthusiasm. Wells submissions help us decide whether to go forward as recommended, and so assist us in deploying our always scarce staff resources in productive directions.
Now – full disclosure, here – I play for the SEC. That’s my team, and I want us to win. None of us has any other objective when we take the field. But, to extend the metaphor, the game isn’t solitaire and you can’t win it by yourself. There’s no game without, rules, a referee, and – not least – an opponent. And the rules I’m talking about are not SEC rules implementing the Securities, Exchange, and Investment Company Acts – or even Dodd-Frank and, soon, the JOBS Act. I’m talking about the procedural rules that guide and constrain our conduct in the enforcement arena.

The most important of those are administered by the courts; we did not create them and we are not the arbiters of whether we – or others – have met their requirements. The constitutionally assured right to due process is preeminent among such procedural norms. Now, no one would begin to pretend that the Wells Committee invented either due process, or our adversarial legal system. Still, lurking within that obvious point lies, it seems to me, a more subtle point, one that sometimes goes unacknowledged. Procedural due process was already an explicit part of the Commission’s enforcement practices when the Division of Enforcement was brought into being. It is, in a sense, the mark of legitimacy of our enforcement system. Our commitment to it in all we do must be unequivocal. But, we must also recognize that, for most of those who find themselves defendants in SEC proceedings, the assurance of due process would mean very little if it were only observed in the courts, or if they were left to themselves to try to respond effectively to our Wells notices.

I am, of course, alluding to the indispensable role of defense counsel in SEC enforcement proceedings. Without their expert and active assistance to their clients, the SEC’s longstanding commitment to due process for those involved in our proceedings would ring hollow. We expect and encourage defense counsel to act zealously on behalf of their clients – during our investigations, no less than in court. Expert opposition, moreover, contributes indirectly to our own efficiency, encouraging, for example, a client’s cooperation to engender a mutually advantageous settlement and by knowing, in the context of the facts, what would be productive to contest in furtherance of the client’s interests, while avoiding time consuming skirmishes over the tangential and non-germane.

Make no mistake, there is a limit, and last year Rob Khuzami reminded everyone publicly of how counsel have occasionally crossed that line. But in the majority of our investigations, that’s not what we see. Time and again, the careful and creative analyses of defense counsel compel us to examine both how we apply our rules and the limits of their elasticity. Put another way, there is a point beyond which our rules must not be stretched in our effort to enforce the securities laws. The upshot is that we should have to consider and adopt new, closer-fitting rules for truly novel situations. That seems to me implicit, at least, in the SEC’s commitment to procedural fairness.

Let me take a simple, but currently very common example. The Commission is regularly asked to approve sanctions based on the Dodd-Frank Act that would preclude defendants from future participation, temporary or permanent, in the financial services industry – the collateral bars authorized in section 925 of Dodd-Frank. Many cases that are brought to our attention for Commission action still relate to conduct that occurred before Dodd-Frank’s enactment. Where the new sanctions would apply to pre-enactment conduct, we face a question of basic fairness. With that in mind, I believe we should reject as inappropriate a reading of section 925 that would permit us to apply these collateral bars to pre-enactment conduct. In showing such restraint, we would demonstrate that our purpose is not only to deter bad conduct and to safeguard markets and investors, but to afford procedural fairness to those whose conduct subjects them to legitimate SEC enforcement action.

Let’s stipulate, in other words, that a great many of the defendants against whom the Commission authorizes enforcement action richly deserve whatever sanction we can levy on them. Even so, there is a limit. Their due process interests and our commitment to procedural fairness should be vindicated in our imposition of sanctions. Just as defendants should not be held accountable by reference to a standard that makes unlawful conduct that was lawful when it occurred, defendants should not be subjected to sanctions that didn’t exist at the time of their conduct. I want my team to win, and most days I’m pretty sure my team deserves to win, but I want my team to win fair-and-square.
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Let me close with a somewhat more general thought. It is critically important that our enforcement program be extremely efficient. Each time the Division opens an investigation, which it is free to do without Commission approval, it has made at least a tacit decision to devote scarce resources to it, rather than some other investigation or case. So, recognizing that it is unrealistic to imagine we will ever achieve a one-to-one correspondence between incidents of misfeasance and SEC Enforcement staff, we’d better plan to do everything we can to increase our hit-rate per investigation opened, and should commit our staff resources carefully, which is to say, consciously.

That’s not a question merely of shunning low-percentage investigations, much less low-gain cases. Experience teaches us, for example, that fraud tends to proliferate in smaller entities that may lack highly developed compliance programs. It also means thinking carefully about what we might, borrowing again from the world of sports, call “shot selection.” It can be tempting to tangle with prominent institutions. But chasing headlines and solving problems are two different things. The question is what will do most good – where our focus should be. And the record seems to suggest that we can do most to protect smaller, unsophisticated investors by focusing more attention on smaller entities, where Ponzi schemes and microcap fraud have seemed to flourish unimpeded.

With that in mind, the SEC’s Microcap Fraud Working Group is a promising initiative. It is a creative effort to focus expertise from across the agency to pool knowledge and resources in an effort to detect, investigate, and deter fraud in the microcap market. That’s a practical way to leverage what we have in the fight against fraud in the service of markets and investors alike. I applaud the work of the group, and I am encouraged that such a talented team is on the front lines fighting for investors.

And, finally, while we’re talking about putting more heft in key areas, it is important to note the role played by the Division’s trial unit. Our trial unit has developed into one of the top groups of litigators in the country, and –in addition to their courtroom duties – they are key advisors to the Commission as we consider litigation risk and related strategy issues in our enforcement proceedings. As such, I am glad to see that their ranks have grown in number and expertise over the years, and I hope that trend continues. I will note that we just announced last night the addition of Matt Solomon as the Deputy Chief Litigation Counsel in Enforcement. Matt will report to another Matt – Matt Martens. Go look up their resumes and tell me I am wrong about our expertise in that group!

Our willingness to negotiate settlements must be matched by an explicit willingness to take our cases to trial in order to maximize results for investors. The extreme form of that argument, is that the Commission should not approve any settlement recommendation if the staff would not also be able and willing to proceed to trial. On the contrary, a trial-ready posture would alter defendants’ operating assumptions and actually increase the likelihood of prompt and advantageous settlements.
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I want, in closing, to return to first things – our heritage of procedural fairness and the need to vindicate it in all that we do. What the vision of Chairman Budge and the Wells Committee began forty years ago, our expert Enforcement staff has since fostered. We, on the Commission, derive great benefit from the Wells submissions so carefully prepared by so many defendants’ counsels. They enhance significantly our ability to evaluate facts and the complexities of the law applicable to them in the fair and balanced manner the public has a right to expect, by virtue of both our oath and inclination. We all have complementary roles to play in promoting strong, fair, and effective enforcement to help keep our markets strong and our investors confident in participating in them.
Once again, thank you for this opportunity to share my thoughts with you – and I wish you an interesting and enjoyable conference.