FROM: U.S. JUSTICE DEPARTMENT
Tuesday, August 20, 2013
Alabama Tax Return Preparers and 19 Foreign Nationals Charged with Conspiring to Defraud the United States, Identity Theft and Money Laundering
Justice Department announced that a 14-count superseding indictment was unsealed today, charging JB Tax Professional Services Inc., Jacqueline J. Arias and Jose Bayron Estrada, of Spruce Pine, Ala., along with 19 foreign nationals, many of whom resided in the New Orleans area, with conspiracy to defraud the United States and conspiracy to commit mail and wire fraud by filing fraudulent income tax returns. The indictment also charges certain defendants with aggravated identity theft and conspiracy to commit money laundering. Most of the defendants were previously indicted in May 2013 and arrested in June 2013.
According to the indictment, members of the conspiracy obtained Forms W-2, often by purchasing them for cash, for the purposes of filing fraudulent income tax returns. Conspirators further obtained individual taxpayer identification numbers (ITINs) for use in filing fraudulent tax returns, in some cases using false applications filed with the assistance of Arias and JB Tax Professional Services. An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who do not have, and are not eligible to obtain, a social security number. Both Arias and the business were designated by the IRS as certified acceptance agents, which are entrusted by the IRS with the responsibility of reviewing the documentation of an ITIN applicant’s identity and alien status for authenticity, completeness and accuracy before submitting their application to the IRS.
The charging documents allege that the defendants used the social security numbers of real persons to conduct mail and wire fraud. The defendants also allegedly disguised and concealed the proceeds of their fraud by agreeing to conduct certain types of financial transactions.
An indictment merely alleges that crimes have been committed, and each defendant is presumed innocent until proven guilty. Each defendant faces a maximum potential sentence of five years in prison for the conspiracy charge. Each aggravated identity theft charge carries a mandatory two-year prison sentence, and the defendants charged in the money laundering conspiracy count face a possible maximum sentence of twenty years in prison. The defendants will also be subject to fines, mandatory restitution and forfeiture if convicted.
The case is being investigated by U.S. Immigration and Customs Enforcement, which oversees Homeland Security Investigations; IRS-Criminal Investigation; the U.S. Secret Service; the U.S. Postal Inspection Service; and the Social Security Administration, Office of the Inspector General, in partnership with the St. Tammany Parish, La. and Jefferson Parish, La. Sheriffs’ Departments. The case is being prosecuted by Tax Division Trial Attorneys Hayden Brockett and Kevin Lombardi.
Saturday, August 24, 2013
FINAL JUDGEMENTS ENTERED AGAINST DEFENDANTS IN STOCK MANIPULATION SCHEME
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Court Enters Final Judgments by Consent Against SEC Defendants Giuseppe Pino Baldassarre and Robert Mouallem
The Securities and Exchange Commission announced that on August 16, 2013, the Honorable Allyne R. Ross, United States District Court Judge for the Eastern District of New York, entered final judgments by consent against Defendants Giuseppe Pino Baldassarre and Robert Mouallem. The final judgments permanently enjoin Baldassarre and Mouallem from future violations of Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgments also (i) order Baldassarre and Mouallem to pay total combined disgorgement and prejudgment interest of $21,932.03, which is deemed satisfied by the forfeiture orders entered against them in a parallel criminal action, and (ii) bar Baldassarre and Mouallem from participating in any offering of penny stock. In addition, the judgment against Baldassarre prohibits him from acting as an officer or director of a public company.
On December 7, 2011, the SEC filed its complaint against Baldassarre, Mouallem, and Malcolm Stockdale alleging that from at least October 2009, they engaged in a fraudulent broker bribery scheme designed to manipulate the market for the common stock of Dolphin Digital Media, Inc. The complaint alleged that they engaged in an undisclosed kickback arrangement with an individual who claimed to represent a group of registered representatives with trading discretion over the accounts of wealthy customers.
Court Enters Final Judgments by Consent Against SEC Defendants Giuseppe Pino Baldassarre and Robert Mouallem
The Securities and Exchange Commission announced that on August 16, 2013, the Honorable Allyne R. Ross, United States District Court Judge for the Eastern District of New York, entered final judgments by consent against Defendants Giuseppe Pino Baldassarre and Robert Mouallem. The final judgments permanently enjoin Baldassarre and Mouallem from future violations of Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgments also (i) order Baldassarre and Mouallem to pay total combined disgorgement and prejudgment interest of $21,932.03, which is deemed satisfied by the forfeiture orders entered against them in a parallel criminal action, and (ii) bar Baldassarre and Mouallem from participating in any offering of penny stock. In addition, the judgment against Baldassarre prohibits him from acting as an officer or director of a public company.
On December 7, 2011, the SEC filed its complaint against Baldassarre, Mouallem, and Malcolm Stockdale alleging that from at least October 2009, they engaged in a fraudulent broker bribery scheme designed to manipulate the market for the common stock of Dolphin Digital Media, Inc. The complaint alleged that they engaged in an undisclosed kickback arrangement with an individual who claimed to represent a group of registered representatives with trading discretion over the accounts of wealthy customers.
REDWOODS IN DANGER
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| Fire consumes a once-healthy California redwood tree. Credit: USFS |
FROM: NATIONAL SCIENCE FOUNDATION
California's iconic redwoods in danger from fire and infectious disease
Pathogen that causes sudden oak death leaves redwoods vulnerable to fire
First it was sudden oak death, the oak disease caused by the plant pathogen Phytophthora ramorum, that threatened California's extensive coastal forests.
Now these forests' stately trees are facing a new menace: the combined effects of sudden oak death and fire. And this time, the iconic redwoods are at risk.
Usually resistant to the effects of wildfires, California's coast redwoods are now burning as fast as other trees. Why?
Into the redwood forest
To find answers, plant pathologist David Rizzo of the University of California at Davis (UC Davis) and colleagues monitored more than 80,000 hectares of forests near Big Sur, Calif. In their plots, tanoaks, California bay laurels and coast redwoods grow.
The study began in 2006. "In 2008, almost half our plots were burned by wildfires that lasted the better part of a month," says Rizzo.
That was the beginning of the end for many coast redwoods, surprising researchers who expected the trees to be fire-proof.
The key to the redwood deaths, discovered Rizzo, Margaret Metz and Kerri Frangioso of UC Davis, along with Morgan Varner of Mississippi State University and Ross Meentemeyer of North Carolina State University, lies in the sudden oak death pathogen.
"If redwoods didn't live in forests affected by the disease," says Metz, "they could withstand fires just fine."
The biologists recently reported their results online in the journal Ecology, published by the Ecological Society of America.
After the fires were under control, the scientists returned to their study plots. Half had long been infested with the sudden oak death pathogen; half had been spared. The redwoods' mortality risk, it turned out, was four times higher in the sudden oak death plots as in healthy plots.
"The disease likely created more fuel for wildfires as dead tanoak branches fell," says Rizzo. "The loss of the oaks also would have decreased the amount of shade, drying out the forest and turning it into a tinder box, one not even redwoods could survive."
Pathogens + fires = dead redwoods
The forest ecosystem disturbance that happens when a pathogen like sudden oak death becomes established and starts killing trees, says Rizzo, "clearly isn't the only one that may be important to that forest."
Sudden oak death has killed millions of trees in the coastal forests of California and Oregon. It was first linked with the mortality of tanoaks and coast live oaks in the San Francisco Bay area in the mid-1990s. In 2000, Phytophthora ramorum was confirmed as the causal agent.
Analyses of the pathogen's genetic structure indicate that a single introduction sparked the wave of disease. It likely originated at a nursery in Santa Cruz, Calif.
Since then, scientists have found that the pathogen has infected plants in 45 genera, including ferns. "These host species are important parts of the forests along the California coast and at the wildland-urban interface," says Rizzo.
The pathogen's current range extends more than 435 miles from the Big Sur area in central California north to Mendocino County, with smaller affected areas in Humboldt County, Calif., and Curry County, Ore. Forests along Big Sur are among the most affected, with 100 percent of tanoaks infected in some stands.
Many of those forests are also prone to wildfires. "There's a growing concern that dead trees from the disease may make wildfires worse," Metz says.
The 2008 wildfires were the first in forests affected by sudden oak death. The largest fire, called the Basin Complex, was ignited by a lightning storm in June. It burned more than 95,000 hectares in the Big Sur region.
In September, the Chalk Fire started south of the Basin Complex perimeter; it burned an additional 16,000 acres. "More than 40 percent of our 280 plots went up in flames, 98 in the Basin Fire, and 23 in the Chalk Fire," says Rizzo.
A month after containment of the Basin Complex fire, the researchers surveyed 61 plots to measure burn severity before the forest could change with the onset of California's winter rains. "These measurements serve as our baseline data on ecosystem responses to interactions between fire and infectious disease," says Rizzo.
Key hidden high in the forest canopy
When sudden oak death kills tanoaks, it alters the trees in ways that leave neighboring redwoods vulnerable, the researchers found.
Flames are carried high into the tree canopy by the dead tanoaks; they then scorch the crowns of surrounding redwoods. Injury to the redwoods' crowns is what likely caused the trees to die in the 2008 fires, the scientists believe.
"Humans are causing widespread changes throughout our world, including greater wildfires related to changing climate and from increasing infectious diseases due to more modes of transportation," says Sam Scheiner, program director at the National Science Foundation (NSF) for the joint NSF-NIH Ecology and Evolution of Infectious Diseases Program, which funded the research.
"This study shows that these changes can combine in unexpected ways that can be very destructive. More such research is needed if we are to prepare for what's to come."
Rizzo agrees. "We're moving species around the globe at high rates, and global warming has increased fire severity. There may be all sorts of consequences, among them, dead and dying coast redwoods."
-- Cheryl Dybas, NSF
Friday, August 23, 2013
DEFENSE SECRETARY HAGEL MAKES ANOTHER VISIT TO ASIA
FROM: U.S. DEFENSE DEPARTMENT
Growing Engagement, Cooperation Mark Hagel's Second Asia Visit
By Cheryl Pellerin
American Forces Press Service
HONOLULU, Aug. 23, 2013 - Defense Secretary Chuck Hagel arrived here yesterday on the first leg of a trip to the Asia-Pacific region to meet with counterparts and leaders from several countries and to attend a defense ministers meeting of the Association of Southeast Asian Nations, or ASEAN.
This is the secretary's second trip to the region since June.
Before visiting Malaysia, Indonesia, Brunei and the Philippines in the days ahead, Hagel stopped at Marine Corps Base Hawaii-Kaneohe Bay here to thank 200 Marines and sailors for their service to the nation and to honor their part in President Barack Obama's strategic U.S. rebalance to the Asia-Pacific region.
"This rebalance is not only about our security interests in this area, it's about a partnership of prosperity for this region of the world -- over 6 billion global citizens today," the secretary said.
Threats that confront the world today are not unique to a region, a country, a religion or an ethnic group, he added. The threats are universal and they make alliances even more important than they have been in the past.
"You are all part of it," Hagel told the Marines and sailors. "You are at the front end, ... the cutting edge, ... and what you do and how you do it is particularly important as to how the world sees America and how they view our ... intentions."
On Aug. 25 in Kuala Lumpur, Malaysia, a senior defense official said, Hagel will meet with his recently appointed counterpart, Defense Hishammuddin Tun Hussein. Hagel first met with Hishammuddin in June at the annual Shangri-La Dialogue in Singapore. During the meeting, both leaders emphasized the importance of working bilaterally and multilaterally toward greater stability in Southeast Asia. They also discussed cyber issues and transnational threats.
"Malaysia-U.S. defense ties have dramatically improved over the last several years," the defense official said. "We're doing a lot more cooperative activity, [and] we're doing a lot more together. This is an opportunity for them to really touch base on the bilateral defense relationship and see where we're headed in the years ahead."
Hagel also will meet with Malaysian Prime Minister Najib Razak to discuss overall defense relations and regional issues, including Hagel's recent consultations with Chinese Defense Minister Gen. Chang Wanquan, "which I think will be of great interest throughout the region," the defense official said.
Later in the week, in Jakarta, Indonesia, Hagel will meet with his Defense Minister Purnomo Yusgiantoro, whom the secretary also met with during the Shangri-La Dialogue. There, they reaffirmed the importance of deepening ties in support of the U.S.-Indonesia Comprehensive Partnership, an initiative of Presidents Barack Obama and Susilo Bambang Yudhoyono calling for closer ties between the two governments and societies.
In Singapore, the defense leaders also reviewed progress made in recent years to increase exercises, training and regular defense policy dialogues.
"With Indonesia, we also have a significant increase in defense cooperation over the last several years," the senior defense official said.
From Sept. 5 to Sept. 13, the United States and Indonesia will co-chair a counterterrorism ground exercise agreed upon by the ASEAN Defense Ministers Meeting plus eight countries, or ADMM Plus, the defense official said.
ASEAN was formed in 1967. Its 10 member states are Burma, Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Defense ministers from these nations are attendees of the annual ASEAN Defense Ministers Meeting, or ADMM. The ADMM-Plus is made up of the 10 ASEAN members and its eight dialogue partners: the United States, China, Japan, South Korea, Australia, India, New Zealand and Russia.
In Jakarta, Hagel will meet with Yudhoyono, a respected leader with great influence in the region, the defense official said. "He's entering his last year in office," the official added, "so it's a nice opportunity to thank Indonesia for a lot of tremendous cooperation over the last several years."
The ADMM Plus meeting begins Aug. 28 in Brunei. This is only the second time the full 18-member ADMM Plus ministerial meeting will be held, and another senior defense official said it's important for the United States to be there for two reasons.
The first, he said, the forum is proving to be extremely action focused.
"The ADMM countries have three multilateral exercises this year, [and] one of our focuses in the rebalance to Asia is shifting from a history of almost [all] bilateral engagements to do more multilateral engagements, to do more with groups of countries to meet common challenges," he said. "ADMM is giving us a very good way to do that."
Brunei recently hosted a major humanitarian assistance-disaster response-military medicine exercise that included all 18 of the countries that will be at the ADMM Plus meeting, the official said, and will involve more than 3,000 personnel.
"We see those as part of the wave of the future -- how common challenges are going to be handled in this region," he explained. "So being at ADMM is an opportunity to continue focusing with this group of countries on doing those kinds of action-oriented [activities] on the defense side."
The second reason, the official said, is that ADMM offers a good opportunity to engage with partners all in one place.
"The secretary will be able to have bilateral engagements ... [and] he'll also see a few other of his ministerial counterparts for short side meetings," the official said.
After the ADMM Plus meeting, the secretary's final stop will be Manila in the Philippines.
There, Hagel will talk with President Benigno S. Aquino III, Defense Minister Voltaire Gazmin and Foreign Secretary Albert F. del Rosario about ongoing negotiations for a framework agreement that would allow U.S. forces to operate on Philippine military bases and in Philippine territory and waters to help build Philippine armed forces capacity in maritime security and maritime domain awareness.
"The negotiations just got underway a week ago and will be ongoing for some time," the defense official said.
Growing Engagement, Cooperation Mark Hagel's Second Asia Visit
By Cheryl Pellerin
American Forces Press Service
HONOLULU, Aug. 23, 2013 - Defense Secretary Chuck Hagel arrived here yesterday on the first leg of a trip to the Asia-Pacific region to meet with counterparts and leaders from several countries and to attend a defense ministers meeting of the Association of Southeast Asian Nations, or ASEAN.
This is the secretary's second trip to the region since June.
Before visiting Malaysia, Indonesia, Brunei and the Philippines in the days ahead, Hagel stopped at Marine Corps Base Hawaii-Kaneohe Bay here to thank 200 Marines and sailors for their service to the nation and to honor their part in President Barack Obama's strategic U.S. rebalance to the Asia-Pacific region.
"This rebalance is not only about our security interests in this area, it's about a partnership of prosperity for this region of the world -- over 6 billion global citizens today," the secretary said.
Threats that confront the world today are not unique to a region, a country, a religion or an ethnic group, he added. The threats are universal and they make alliances even more important than they have been in the past.
"You are all part of it," Hagel told the Marines and sailors. "You are at the front end, ... the cutting edge, ... and what you do and how you do it is particularly important as to how the world sees America and how they view our ... intentions."
On Aug. 25 in Kuala Lumpur, Malaysia, a senior defense official said, Hagel will meet with his recently appointed counterpart, Defense Hishammuddin Tun Hussein. Hagel first met with Hishammuddin in June at the annual Shangri-La Dialogue in Singapore. During the meeting, both leaders emphasized the importance of working bilaterally and multilaterally toward greater stability in Southeast Asia. They also discussed cyber issues and transnational threats.
"Malaysia-U.S. defense ties have dramatically improved over the last several years," the defense official said. "We're doing a lot more cooperative activity, [and] we're doing a lot more together. This is an opportunity for them to really touch base on the bilateral defense relationship and see where we're headed in the years ahead."
Hagel also will meet with Malaysian Prime Minister Najib Razak to discuss overall defense relations and regional issues, including Hagel's recent consultations with Chinese Defense Minister Gen. Chang Wanquan, "which I think will be of great interest throughout the region," the defense official said.
Later in the week, in Jakarta, Indonesia, Hagel will meet with his Defense Minister Purnomo Yusgiantoro, whom the secretary also met with during the Shangri-La Dialogue. There, they reaffirmed the importance of deepening ties in support of the U.S.-Indonesia Comprehensive Partnership, an initiative of Presidents Barack Obama and Susilo Bambang Yudhoyono calling for closer ties between the two governments and societies.
In Singapore, the defense leaders also reviewed progress made in recent years to increase exercises, training and regular defense policy dialogues.
"With Indonesia, we also have a significant increase in defense cooperation over the last several years," the senior defense official said.
From Sept. 5 to Sept. 13, the United States and Indonesia will co-chair a counterterrorism ground exercise agreed upon by the ASEAN Defense Ministers Meeting plus eight countries, or ADMM Plus, the defense official said.
ASEAN was formed in 1967. Its 10 member states are Burma, Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Defense ministers from these nations are attendees of the annual ASEAN Defense Ministers Meeting, or ADMM. The ADMM-Plus is made up of the 10 ASEAN members and its eight dialogue partners: the United States, China, Japan, South Korea, Australia, India, New Zealand and Russia.
In Jakarta, Hagel will meet with Yudhoyono, a respected leader with great influence in the region, the defense official said. "He's entering his last year in office," the official added, "so it's a nice opportunity to thank Indonesia for a lot of tremendous cooperation over the last several years."
The ADMM Plus meeting begins Aug. 28 in Brunei. This is only the second time the full 18-member ADMM Plus ministerial meeting will be held, and another senior defense official said it's important for the United States to be there for two reasons.
The first, he said, the forum is proving to be extremely action focused.
"The ADMM countries have three multilateral exercises this year, [and] one of our focuses in the rebalance to Asia is shifting from a history of almost [all] bilateral engagements to do more multilateral engagements, to do more with groups of countries to meet common challenges," he said. "ADMM is giving us a very good way to do that."
Brunei recently hosted a major humanitarian assistance-disaster response-military medicine exercise that included all 18 of the countries that will be at the ADMM Plus meeting, the official said, and will involve more than 3,000 personnel.
"We see those as part of the wave of the future -- how common challenges are going to be handled in this region," he explained. "So being at ADMM is an opportunity to continue focusing with this group of countries on doing those kinds of action-oriented [activities] on the defense side."
The second reason, the official said, is that ADMM offers a good opportunity to engage with partners all in one place.
"The secretary will be able to have bilateral engagements ... [and] he'll also see a few other of his ministerial counterparts for short side meetings," the official said.
After the ADMM Plus meeting, the secretary's final stop will be Manila in the Philippines.
There, Hagel will talk with President Benigno S. Aquino III, Defense Minister Voltaire Gazmin and Foreign Secretary Albert F. del Rosario about ongoing negotiations for a framework agreement that would allow U.S. forces to operate on Philippine military bases and in Philippine territory and waters to help build Philippine armed forces capacity in maritime security and maritime domain awareness.
"The negotiations just got underway a week ago and will be ongoing for some time," the defense official said.
SECRETARY OF DEFENSE HAGEL'S REMARKS AT MARINE CORPS BASE KANEOHE
FROM: U.S. DEFENSE DEPARTMENT
Presenter: Secretary of Defense Chuck Hagel and Lieutenant General Terry Robling August 22, 2013
Remarks by Secretary Hagel at a Troop Event at Marine Corps Base Kaneohe Bay, Hawaii
Lt. Gen. Terry Robling: Good afternoon, Marines. I'm Lt. Gen. Terry Robling, the commander of Marine Corps Forces Pacific, and I'd like to welcome you here today.
Before we start, I'd like to recognize a few special guests. We got Senator Mazie Hirono and members of her staff here, Senator Brian Schatz and members of his staff here, Representative Colleen Hanabusa and members of her staff here, and representing Representative Tulsi Gabbard is Mike Miyagi and a member of his staff. So, thank you all for being here.
This is a very historic day for us. It's the first time we've been able to really meet and speak with our secretary of defense on Marine Corps Base Kaneohe. But before I introduce him to you, I'd like to introduce you to him. So when I call out your unit, I'd like you to shout out with an oorah. Where are my Marine Corps Base Hawaii Marines?
MARINES: Oorah!
LT. GEN. ROBLING: How about headquarters battalion?
MARINES: Oorah!
LT. GEN. ROBLING: combat logistics battalion?
MARINES: Oorah.
LT. GEN. ROBLING: That's it? combat logistics battalion?
MARINES: Oorah.
LT. GEN. ROBLING: First Battalion, 12th Marines?
MARINES: Oorah!
LT. GEN. ROBLING: There you go. Marine Corps Group 24?
MARINES: Oorah!
LT. GEN. ROBLING: First Battalion, Third Marines?
MARINES: Oorah!
LT. GEN. ROBLING: And, finally, where are my wounded warriors?
MARINES: Oorah!
LT. GEN. ROBLING: Okay, outstanding. Well, I'm very proud of all of you on this historic occasion, and this time I'd like you to join me in welcoming our 24th United States Secretary of Defense, the Honorable Chuck Hagel.
SECRETARY CHUCK HAGEL: Thank you, General. Oorah, Marines!
MARINES: Oorah!
SEC. HAGEL: Thank you for allowing me to first thank you and your families for what you're doing. And I want you to know how much we appreciate your service and your sacrifice to our country. I also want to acknowledge your congressional delegation, who is here today, who has already been announced. I want to thank them for their support. You have no stronger congressional delegation in Washington who supports you more than your delegation from Hawaii, and they are very helpful to all of us.
So, senators, congressmen, thank you very much. Appreciate it. Thank you.
I know something about you all. I know the kind of work you do. I know what you mean to our country, but I also know what you mean to our presence in this part of the world. You are at the front end. You are at the cutting-edge of security, of stability, of prosperity. That's a big task. That's a big responsibility. And we're very proud of what you're doing.
I want to particularly acknowledge the wounded warriors for your sacrifices and what you continue to do for our country.
I'm also much aware of the Lava Dogs, as they have made our country proud with -- with their outstanding performance in the exercises in Thailand and Korea. Thank you. The Marine Aircraft Group 24, your exceptional work -- all of you, every day, do so much for all of us. And I want to acknowledge that.
I'm on my way to the ASEAN Defense Ministers Plus, which will be held in Brunei later this week. I'm going to stop first in Malaysia and Indonesia and then Brunei for the ministers meeting and then to the Philippines and then go back -- back to Washington.
I'm going to try and reinforce much of what your leaders here in this part of the world, and particularly headquarters here, the general, all your commanders, Admiral Locklear, all of our institutions headquartered here in Hawaii are doing to promote our interests in stability and friendship and partnership in this part of the world.
You're all much aware of our rebalance that President Obama initiated a couple of years ago. And I wanted to talk directly to some of our friends in this area of the world about that. I had my first opportunity to directly assess and discuss our rebalancing when I was at the -- in Singapore at the Shangri-La Dialogue, with many of the ASEAN leaders, and other nations, like Russia, European allies, China, who -- some will be in Brunei.
But this rebalancing is not only about security. It is not only about our security interests in this area. It's about a partnership of prosperity for this region of the world. Over six billion global citizens today. We are all now a part of one market. And the threats that confront the world are not unique to a region, to a country, to a religion, to an ethnic group. These are universal threats, and alliances become even more important than they've been in the past.
That means coalitions of common interests, partnerships, recognizing that prosperity and a future for all people and freedom depends on many pillars of construction. Certainly, security is one. But it's not the only one.
So this is a partnership that we are working through and enhancing and strengthening in this part of the world. You are all part of that. As I said, you are at the front end of that. You are at the cutting edge of that. And what you do and how you do it is particularly important as to how the world sees America and how they view our interests.
But probably more important is how they view our intentions. And that's always important in dealing with people around the world. So, thank you again for what you do.
That's a little bit about what I'm doing out here, other than the congressional delegation, and Governor Abercrombie gave me a visa to come in for a day and 24 hours so I can swim tonight before dinner, and then go on further west. But it's always a pleasure being here.
And before I take your questions, I want to also thank the people of Hawaii. The people of Hawaii, who have hosted our installations and all of you, the magnificent and gracious hospitality and support they've given us all should be acknowledged, and I want to let the people of Hawaii know how much we all appreciate them for what they have done and what they continue to do for all of us.
Okay. General, I'd be glad to respond to questions or any advice that you have for me. I know Marines are very tentative and bashful, hardly ever say what they think.
Q: Yes, sir. Sergeant Jensen, 1st Battalion, 3rd Marines, Charlie Company. My question pertains to the transferring of the Montgomery G.I. Bill benefits to your dependents and whether or not that program will stick around due to all the financial constraints going on. And additionally, when that service member goes to apply to transfer those benefits to their dependents on the VA website, they're not allowed to do that without committing to another four years' obligation, even though they've already met the regulated terms. I'm just wondering if that's something that can be fixed on the website or not, sir.
SEC. HAGEL: Okay. Well, that's -- first of all, it's a VA website, did you say?
Q: Yes, sir.
SEC. HAGEL: I'll ask Secretary Shinseki about that, since I don't have anything to do with his website. But I was just with him twice this week. And as you know, Secretary Shinseki is a former chief staff of the United States Army and a great, great American and great leader and made many sacrifices in Vietnam. As a matter of fact, he and I served in the same division in Vietnam in the same year. I didn't know Shinseki then, but we've gotten to be good friends. I'll find out about the website.
Back to your bigger question. I was one of the four co-sponsors of that bill when I was in the United States Senate. And we passed that bill in 2008. It's a piece of legislation I'm very proud of. I had been involved in that effort for many years before we got it passed.
There was a very significant Marine and United States senator at the time who led the charge by the name of Jim Webb, who you all know wrote the first really defining book on Vietnam, won a Pulitzer Prize for it, who has been a good friend of mine for 30 years. He and I were the two Vietnam veterans that teamed up on that with two World War II veterans, John Warner, another tremendous leader for our country and former secretary of the Navy, and Frank Lautenberg from New Jersey, who just passed away a couple months ago.
So I know something about that bill, since I helped write it. That bill was intended to do exactly what you just asked in your first sentence, among other things. It needed to be brought up to date from the time the Montgomery Bill was passed, because when the Montgomery Bill was passed -- and that was appropriate, I thought, at the time -- I wasn't in the Congress -- but it was a different time. It was an all-volunteer service, and so on.
And, by the way, I used the G.I. Bill when I came back from Vietnam, used it, as did my brother.
So it was time to do that. And there were some clear intentions that we had that we wanted that we wrote it, and one was the transferability of benefits. Now, as to one of the specific parts of your question about our budget issues and sequester, in particular, which has forced us all to re-evaluate programs. And as you know, we've had to make some tough decisions and choices.
That bill, that law is one that we want to protect in every way we can, because we think it is -- is the right thing to do for our people. We've committed to do that for our people. And we think it enhances our people, it enhances our country. It's a smart investment in our country. It's a smart investment in you, in your families. Education can't be disconnected from security -- from the future of our country.
So we'll continue to do everything we can to protect every element and fund every part of that bill. And I'll check on the website. Thank you.
Q: Good afternoon, sir. Lance Corporal Stacey from CAS. My question is, due to the downsizing of the Marine Corps or military-wide, what is the challenges that you face as far as keeping the appearance to the public of our military polished?
SEC. HAGEL: I'm sorry. The last part -- of our military what?
Q: Just keeping -- as far as the public eye, keeping our military looking strong without any, I guess, lack of confidence?
SEC. HAGEL: Yes, I get it. Good question. Important question. In fact, that question is one that I deal with, as well as our leaders deal with every day, for the -- for the very reasons you asked, but the implications that were present in your questions on projecting -- are we projecting weakness and lack of confidence when we -- when we talk about the downsizing and the limitations of financial resources?
There is a balance to that, and you're exactly right as to how we tell the story. First, I think it's important that, as always, every leader -- no matter what area that you lead in -- you first have to be honest, and you have to be direct, and you must be clear with the situation. You couldn't be effective Marines without those things. First of all, you wouldn't follow a leader who was not clear, direct, honest, if for no other reason you wouldn't trust him. You would have no confidence in him.
So I start there in answering your question. We've got to be honest with the American people. We have to be honest with the Congress. The Congress has to know our best assessment as leaders of our national security institution, what and how our capacity, our capabilities would be affected with large cuts in our budget.
Second, can we do things better? Can we do things more effectively, more efficiently? It is a different world. We've just come out of one war in Iraq; we're winding down the second war in Afghanistan. Doesn't that mean that resources will be freed up? Yes. We've been through this kind of downsizing in the history of our country before, as we have unwound from Desert Storm and Vietnam and Korea and World War II and so on.
But we've made it very clear, as direct and honest and clear as we can be, whether it's the chairman of the Joint Chiefs of Staff, General Dempsey, or your leaders here, or leaders all over the world in this institution, that even with these cuts -- and they are severe -- and they may be even more severe -- that there is no question, America has the most significant military capability in the world. There is no military close to this military.
And we have made it very clear to the American people, to our friends and allies, and to our adversaries that that is the case. And we are not without resources. We are not without capability. And you can measure that by any metric. You start with the strength of any institution, first, is your people. You are the best-trained, the smartest, the best-led, most professional military force this country's ever had, and that is not to minimize the service of every generation of military men and women who've served the United States of America. That's not to marginalize their service at all.
What I've just said is a fact. Our NCO Corps -- is a corps enlisted like no other armed force in the world has. No one is even close to having an enlisted NCO corps like we have in our institution. The technological superiority, every element of that, no one's even close to it. Even with our downsized budget, and projected to even more downsize, there's not a country in the world even close to our military budget. We have alliances which don't diminish our strength and our interests, but they enhance our strength in our alliances.
So when you look at the balance sheet here, we are going to be the best, most capable, strongest military force in the -- in the world for a long time to come. At the same time, as I said, we've got to be clear and direct with the reality of the consequences of continued significant budget cuts and how fast those budget cuts are coming, because they give us very little flexibility in the tough decisions that are going to have to be made.
Institutions as big as our Defense Department -- I don't know of one bigger in the world -- but any institution is constantly re-evaluating -- has to -- its effectiveness, its efficiency. How can you do it better? And there are different threats in the world.
I mean, 10 years ago, how many of us would have thought too much about cyber warfare as a threat? Cyber warfare represents one of the greatest threats to the security of America of any threat out there. Certainly, nuclear war is a clear and large and overwhelming threat, the damage a nuclear exchange could do.
But cyber is this quiet, insidious attack on our systems, our country. Without any nation firing a shot, invading us, sailing a ship against us, putting a bomber in the air against us, sending a missile against us, my point is, the threats are changing, the challenges are changing.
Ten years ago, yes, terrorism was a threat, but what's going on today in the Middle East, for example, what's going on in North Africa, elements of terrorism and the coordination of the coalition of terrorist groups is -- is now something we've never seen before. That's going to require different kinds of strategies and thinking.
And that doesn't mean we're going to not need our Army or our Marines or ground forces, for example. We'll always need those forces. But it's new strategic thinking, new strategic reviews. And we'll get there. We'll come out of this stronger and better than we went in. Thank you.
Q: Good afternoon, sir. Lance Corporal Wasser, HMLA-367. Last month, you gave a speech at the Pentagon on the topic of sequestration. And in your speech, you brought up ideas that you had on making major military cuts to all the branches. So to go off of basically all of what you just said, how soon are -- do you expect us to be reaching the goal of the cuts that you've been talking about, sir?
SEC. HAGEL: Well, I think reductions, realignments, all that go into what we just went through in a 90-day exercise, which I noted in that speech, the Strategic Choices and Management Review, which gave us some sense of what the realities are, based on three budget options, how that would then direct our choices, how that would direct our cuts, how that would direct reductions and consolidations, as we prepare for our budget year, as we move into the fall, as we present to the Congress a new budget early next year, as well as the quadrennial review, which is mandated by Congress every four years to essentially red team and put in a group of experienced, respected experts to come in and take a look at what we're doing, how we're doing it, and come up with suggestions and ideas as we move forward.
And I just met with the group this week, as a matter of fact, and present that to the Congress and to me and to our leaders. It all flows right into the same intersection. To answer your question, we're making consolidations and reductions now. Part of that is as a result of what the Congress mandated over the last couple of years on reduction of forces. We are bringing our force structure down with Marines, with Army. That's not new.
What is new is the abruptness and the steepness that we'll be forced to make those reductions if we're not allowed to bring this down year after year and give us some time to strategically plan for it. So we're making the reductions now. We're making some decisions now. They'll continue to be made as we -- as we flow out.
One of the other biggest problems we have is the uncertainty of what our resource base is going to be. I don't have to ask the members of Congress for clarification on this. They are as frustrated, I suspect, as I am in our leaders. We don't know what kind of budget we're going to get next year. Is sequestration going to play out, which is now the law of the land? That means another $52 billion to $54 billion cut in the next fiscal year for us, if that continues. So we have to plan for that. That is the law of the land, unless something changes.
Will there be an adjustment made by a budget -- a new budget agreement by the Congress and the president before that occurs? I don't know. Will we have a continuing resolution based on the numbers for this fiscal year? Next fiscal year begins in about six weeks, October 1st. I don't know.
You can't turn an enterprise like the Defense Department, as big as this is, around in a -- in a year or two or three months or four months. So that uncertainty is -- is as big a problem for us as anything else.
We're not whining about it. It's -- it's what it is. And what the Strategic Choice Management Review was all about when I directed that a few months ago, let's get on with it. These are the realities. Life's tough. I wish I controlled more things than I do. So do you. But I don't.
And so I'm living in a world of reality. I'm not living in a world like you all, either. You're not living in any -- any world but what is the real world, not the world that you wish it would be, not the world that you hope it would be, or not the world that maybe you think will be. It's the world of what it is.
So we have to plan for that. And I -- and I think this is going to make you stronger. I have tremendous faith in our people, in our culture, in the commitment of all of you, and people all over the world to our values and who we are as a people and as a nation. So we'll come out of this stronger than we went in.
Q: Thank you, sir.
STAFF: One more.
SEC. HAGEL: One more question? Okay.
Q: Good afternoon, sir. Sergeant Okimsy, Headquarters Battalion. My question was actually going to pertain to sequestration and cutbacks, but now I ask about, what does the future look like in retirement in the military since there are talks of changes to that?
SEC. HAGEL: Well, thank you. You see, that's the advantage of being a former senator -- and no offense, Senators -- is that when you get one question, you take the opportunity and you just answer six or seven, whether you're asked or not. So I'm glad I was able to answer part of that question that you had.
But the future for retirement, there's no question that -- not unlike our entitlement programs in the United States, Social Security and Medicare -- they are unsustainable with the path they're on, for the reasons I suspect most of you know. Now, that doesn't mean that we're going to cut off retirement benefits, but if we address those adjustments that are going to be required out into the future, just like in Social Security or Medicare, if we make some adjustments now and we're smart, then we can adjust what we need to adjust and assure that the benefits that you've earned that we've promised are going to be there.
For all of you, when you retire, your benefits should not be impacted by whatever tough choices that we're going to have to make, but there are things we can do now with TRICARE. Health care benefits for retirees, for example, are -- are the biggest part of the increases that are growing year by year by year, not unlike in the civilian world. So how do we adjust to that and assure those benefits? The people have earned them, and we've committed to them. We're do it. They're going to be there.
But we're going to have to adjust and make some changes on how we come at it in the out-years on the formulas used. They won't hurt anybody. You can make these kinds of things whether it's in Social Security -- I had introduced over the years in Social Security bills on just a cost-of-living allowance. If you just take that for Social Security, for example, and you make some adjustments there, it's astounding how many billions of dollars you save over the course of just a few years, if you make just a tiny adjustment there, take one index or another.
Now, I'm not going to play games with you on saying that your benefits are going to increase. They're probably not going to increase. But you're not going to be hurt. You're not going to be hurt.
Okay. Thank you very much.
STAFF: Thank you very much.
STAFF: Thank you.
SEC. HAGEL: Thank you.
All right, now -- first of all, I want you to know I want to get a picture taken with each of you, but you don't have to have your picture taken with me. It might -- it might hurt your reputation. So if you want a picture taken with me, it would be my honor. And we'll line up over here. Thank you. Semper Fi, Marines. Thank you.
MARINES: Oorah!
Presenter: Secretary of Defense Chuck Hagel and Lieutenant General Terry Robling August 22, 2013
Remarks by Secretary Hagel at a Troop Event at Marine Corps Base Kaneohe Bay, Hawaii
Lt. Gen. Terry Robling: Good afternoon, Marines. I'm Lt. Gen. Terry Robling, the commander of Marine Corps Forces Pacific, and I'd like to welcome you here today.
Before we start, I'd like to recognize a few special guests. We got Senator Mazie Hirono and members of her staff here, Senator Brian Schatz and members of his staff here, Representative Colleen Hanabusa and members of her staff here, and representing Representative Tulsi Gabbard is Mike Miyagi and a member of his staff. So, thank you all for being here.
This is a very historic day for us. It's the first time we've been able to really meet and speak with our secretary of defense on Marine Corps Base Kaneohe. But before I introduce him to you, I'd like to introduce you to him. So when I call out your unit, I'd like you to shout out with an oorah. Where are my Marine Corps Base Hawaii Marines?
MARINES: Oorah!
LT. GEN. ROBLING: How about headquarters battalion?
MARINES: Oorah!
LT. GEN. ROBLING: combat logistics battalion?
MARINES: Oorah.
LT. GEN. ROBLING: That's it? combat logistics battalion?
MARINES: Oorah.
LT. GEN. ROBLING: First Battalion, 12th Marines?
MARINES: Oorah!
LT. GEN. ROBLING: There you go. Marine Corps Group 24?
MARINES: Oorah!
LT. GEN. ROBLING: First Battalion, Third Marines?
MARINES: Oorah!
LT. GEN. ROBLING: And, finally, where are my wounded warriors?
MARINES: Oorah!
LT. GEN. ROBLING: Okay, outstanding. Well, I'm very proud of all of you on this historic occasion, and this time I'd like you to join me in welcoming our 24th United States Secretary of Defense, the Honorable Chuck Hagel.
SECRETARY CHUCK HAGEL: Thank you, General. Oorah, Marines!
MARINES: Oorah!
SEC. HAGEL: Thank you for allowing me to first thank you and your families for what you're doing. And I want you to know how much we appreciate your service and your sacrifice to our country. I also want to acknowledge your congressional delegation, who is here today, who has already been announced. I want to thank them for their support. You have no stronger congressional delegation in Washington who supports you more than your delegation from Hawaii, and they are very helpful to all of us.
So, senators, congressmen, thank you very much. Appreciate it. Thank you.
I know something about you all. I know the kind of work you do. I know what you mean to our country, but I also know what you mean to our presence in this part of the world. You are at the front end. You are at the cutting-edge of security, of stability, of prosperity. That's a big task. That's a big responsibility. And we're very proud of what you're doing.
I want to particularly acknowledge the wounded warriors for your sacrifices and what you continue to do for our country.
I'm also much aware of the Lava Dogs, as they have made our country proud with -- with their outstanding performance in the exercises in Thailand and Korea. Thank you. The Marine Aircraft Group 24, your exceptional work -- all of you, every day, do so much for all of us. And I want to acknowledge that.
I'm on my way to the ASEAN Defense Ministers Plus, which will be held in Brunei later this week. I'm going to stop first in Malaysia and Indonesia and then Brunei for the ministers meeting and then to the Philippines and then go back -- back to Washington.
I'm going to try and reinforce much of what your leaders here in this part of the world, and particularly headquarters here, the general, all your commanders, Admiral Locklear, all of our institutions headquartered here in Hawaii are doing to promote our interests in stability and friendship and partnership in this part of the world.
You're all much aware of our rebalance that President Obama initiated a couple of years ago. And I wanted to talk directly to some of our friends in this area of the world about that. I had my first opportunity to directly assess and discuss our rebalancing when I was at the -- in Singapore at the Shangri-La Dialogue, with many of the ASEAN leaders, and other nations, like Russia, European allies, China, who -- some will be in Brunei.
But this rebalancing is not only about security. It is not only about our security interests in this area. It's about a partnership of prosperity for this region of the world. Over six billion global citizens today. We are all now a part of one market. And the threats that confront the world are not unique to a region, to a country, to a religion, to an ethnic group. These are universal threats, and alliances become even more important than they've been in the past.
That means coalitions of common interests, partnerships, recognizing that prosperity and a future for all people and freedom depends on many pillars of construction. Certainly, security is one. But it's not the only one.
So this is a partnership that we are working through and enhancing and strengthening in this part of the world. You are all part of that. As I said, you are at the front end of that. You are at the cutting edge of that. And what you do and how you do it is particularly important as to how the world sees America and how they view our interests.
But probably more important is how they view our intentions. And that's always important in dealing with people around the world. So, thank you again for what you do.
That's a little bit about what I'm doing out here, other than the congressional delegation, and Governor Abercrombie gave me a visa to come in for a day and 24 hours so I can swim tonight before dinner, and then go on further west. But it's always a pleasure being here.
And before I take your questions, I want to also thank the people of Hawaii. The people of Hawaii, who have hosted our installations and all of you, the magnificent and gracious hospitality and support they've given us all should be acknowledged, and I want to let the people of Hawaii know how much we all appreciate them for what they have done and what they continue to do for all of us.
Okay. General, I'd be glad to respond to questions or any advice that you have for me. I know Marines are very tentative and bashful, hardly ever say what they think.
Q: Yes, sir. Sergeant Jensen, 1st Battalion, 3rd Marines, Charlie Company. My question pertains to the transferring of the Montgomery G.I. Bill benefits to your dependents and whether or not that program will stick around due to all the financial constraints going on. And additionally, when that service member goes to apply to transfer those benefits to their dependents on the VA website, they're not allowed to do that without committing to another four years' obligation, even though they've already met the regulated terms. I'm just wondering if that's something that can be fixed on the website or not, sir.
SEC. HAGEL: Okay. Well, that's -- first of all, it's a VA website, did you say?
Q: Yes, sir.
SEC. HAGEL: I'll ask Secretary Shinseki about that, since I don't have anything to do with his website. But I was just with him twice this week. And as you know, Secretary Shinseki is a former chief staff of the United States Army and a great, great American and great leader and made many sacrifices in Vietnam. As a matter of fact, he and I served in the same division in Vietnam in the same year. I didn't know Shinseki then, but we've gotten to be good friends. I'll find out about the website.
Back to your bigger question. I was one of the four co-sponsors of that bill when I was in the United States Senate. And we passed that bill in 2008. It's a piece of legislation I'm very proud of. I had been involved in that effort for many years before we got it passed.
There was a very significant Marine and United States senator at the time who led the charge by the name of Jim Webb, who you all know wrote the first really defining book on Vietnam, won a Pulitzer Prize for it, who has been a good friend of mine for 30 years. He and I were the two Vietnam veterans that teamed up on that with two World War II veterans, John Warner, another tremendous leader for our country and former secretary of the Navy, and Frank Lautenberg from New Jersey, who just passed away a couple months ago.
So I know something about that bill, since I helped write it. That bill was intended to do exactly what you just asked in your first sentence, among other things. It needed to be brought up to date from the time the Montgomery Bill was passed, because when the Montgomery Bill was passed -- and that was appropriate, I thought, at the time -- I wasn't in the Congress -- but it was a different time. It was an all-volunteer service, and so on.
And, by the way, I used the G.I. Bill when I came back from Vietnam, used it, as did my brother.
So it was time to do that. And there were some clear intentions that we had that we wanted that we wrote it, and one was the transferability of benefits. Now, as to one of the specific parts of your question about our budget issues and sequester, in particular, which has forced us all to re-evaluate programs. And as you know, we've had to make some tough decisions and choices.
That bill, that law is one that we want to protect in every way we can, because we think it is -- is the right thing to do for our people. We've committed to do that for our people. And we think it enhances our people, it enhances our country. It's a smart investment in our country. It's a smart investment in you, in your families. Education can't be disconnected from security -- from the future of our country.
So we'll continue to do everything we can to protect every element and fund every part of that bill. And I'll check on the website. Thank you.
Q: Good afternoon, sir. Lance Corporal Stacey from CAS. My question is, due to the downsizing of the Marine Corps or military-wide, what is the challenges that you face as far as keeping the appearance to the public of our military polished?
SEC. HAGEL: I'm sorry. The last part -- of our military what?
Q: Just keeping -- as far as the public eye, keeping our military looking strong without any, I guess, lack of confidence?
SEC. HAGEL: Yes, I get it. Good question. Important question. In fact, that question is one that I deal with, as well as our leaders deal with every day, for the -- for the very reasons you asked, but the implications that were present in your questions on projecting -- are we projecting weakness and lack of confidence when we -- when we talk about the downsizing and the limitations of financial resources?
There is a balance to that, and you're exactly right as to how we tell the story. First, I think it's important that, as always, every leader -- no matter what area that you lead in -- you first have to be honest, and you have to be direct, and you must be clear with the situation. You couldn't be effective Marines without those things. First of all, you wouldn't follow a leader who was not clear, direct, honest, if for no other reason you wouldn't trust him. You would have no confidence in him.
So I start there in answering your question. We've got to be honest with the American people. We have to be honest with the Congress. The Congress has to know our best assessment as leaders of our national security institution, what and how our capacity, our capabilities would be affected with large cuts in our budget.
Second, can we do things better? Can we do things more effectively, more efficiently? It is a different world. We've just come out of one war in Iraq; we're winding down the second war in Afghanistan. Doesn't that mean that resources will be freed up? Yes. We've been through this kind of downsizing in the history of our country before, as we have unwound from Desert Storm and Vietnam and Korea and World War II and so on.
But we've made it very clear, as direct and honest and clear as we can be, whether it's the chairman of the Joint Chiefs of Staff, General Dempsey, or your leaders here, or leaders all over the world in this institution, that even with these cuts -- and they are severe -- and they may be even more severe -- that there is no question, America has the most significant military capability in the world. There is no military close to this military.
And we have made it very clear to the American people, to our friends and allies, and to our adversaries that that is the case. And we are not without resources. We are not without capability. And you can measure that by any metric. You start with the strength of any institution, first, is your people. You are the best-trained, the smartest, the best-led, most professional military force this country's ever had, and that is not to minimize the service of every generation of military men and women who've served the United States of America. That's not to marginalize their service at all.
What I've just said is a fact. Our NCO Corps -- is a corps enlisted like no other armed force in the world has. No one is even close to having an enlisted NCO corps like we have in our institution. The technological superiority, every element of that, no one's even close to it. Even with our downsized budget, and projected to even more downsize, there's not a country in the world even close to our military budget. We have alliances which don't diminish our strength and our interests, but they enhance our strength in our alliances.
So when you look at the balance sheet here, we are going to be the best, most capable, strongest military force in the -- in the world for a long time to come. At the same time, as I said, we've got to be clear and direct with the reality of the consequences of continued significant budget cuts and how fast those budget cuts are coming, because they give us very little flexibility in the tough decisions that are going to have to be made.
Institutions as big as our Defense Department -- I don't know of one bigger in the world -- but any institution is constantly re-evaluating -- has to -- its effectiveness, its efficiency. How can you do it better? And there are different threats in the world.
I mean, 10 years ago, how many of us would have thought too much about cyber warfare as a threat? Cyber warfare represents one of the greatest threats to the security of America of any threat out there. Certainly, nuclear war is a clear and large and overwhelming threat, the damage a nuclear exchange could do.
But cyber is this quiet, insidious attack on our systems, our country. Without any nation firing a shot, invading us, sailing a ship against us, putting a bomber in the air against us, sending a missile against us, my point is, the threats are changing, the challenges are changing.
Ten years ago, yes, terrorism was a threat, but what's going on today in the Middle East, for example, what's going on in North Africa, elements of terrorism and the coordination of the coalition of terrorist groups is -- is now something we've never seen before. That's going to require different kinds of strategies and thinking.
And that doesn't mean we're going to not need our Army or our Marines or ground forces, for example. We'll always need those forces. But it's new strategic thinking, new strategic reviews. And we'll get there. We'll come out of this stronger and better than we went in. Thank you.
Q: Good afternoon, sir. Lance Corporal Wasser, HMLA-367. Last month, you gave a speech at the Pentagon on the topic of sequestration. And in your speech, you brought up ideas that you had on making major military cuts to all the branches. So to go off of basically all of what you just said, how soon are -- do you expect us to be reaching the goal of the cuts that you've been talking about, sir?
SEC. HAGEL: Well, I think reductions, realignments, all that go into what we just went through in a 90-day exercise, which I noted in that speech, the Strategic Choices and Management Review, which gave us some sense of what the realities are, based on three budget options, how that would then direct our choices, how that would direct our cuts, how that would direct reductions and consolidations, as we prepare for our budget year, as we move into the fall, as we present to the Congress a new budget early next year, as well as the quadrennial review, which is mandated by Congress every four years to essentially red team and put in a group of experienced, respected experts to come in and take a look at what we're doing, how we're doing it, and come up with suggestions and ideas as we move forward.
And I just met with the group this week, as a matter of fact, and present that to the Congress and to me and to our leaders. It all flows right into the same intersection. To answer your question, we're making consolidations and reductions now. Part of that is as a result of what the Congress mandated over the last couple of years on reduction of forces. We are bringing our force structure down with Marines, with Army. That's not new.
What is new is the abruptness and the steepness that we'll be forced to make those reductions if we're not allowed to bring this down year after year and give us some time to strategically plan for it. So we're making the reductions now. We're making some decisions now. They'll continue to be made as we -- as we flow out.
One of the other biggest problems we have is the uncertainty of what our resource base is going to be. I don't have to ask the members of Congress for clarification on this. They are as frustrated, I suspect, as I am in our leaders. We don't know what kind of budget we're going to get next year. Is sequestration going to play out, which is now the law of the land? That means another $52 billion to $54 billion cut in the next fiscal year for us, if that continues. So we have to plan for that. That is the law of the land, unless something changes.
Will there be an adjustment made by a budget -- a new budget agreement by the Congress and the president before that occurs? I don't know. Will we have a continuing resolution based on the numbers for this fiscal year? Next fiscal year begins in about six weeks, October 1st. I don't know.
You can't turn an enterprise like the Defense Department, as big as this is, around in a -- in a year or two or three months or four months. So that uncertainty is -- is as big a problem for us as anything else.
We're not whining about it. It's -- it's what it is. And what the Strategic Choice Management Review was all about when I directed that a few months ago, let's get on with it. These are the realities. Life's tough. I wish I controlled more things than I do. So do you. But I don't.
And so I'm living in a world of reality. I'm not living in a world like you all, either. You're not living in any -- any world but what is the real world, not the world that you wish it would be, not the world that you hope it would be, or not the world that maybe you think will be. It's the world of what it is.
So we have to plan for that. And I -- and I think this is going to make you stronger. I have tremendous faith in our people, in our culture, in the commitment of all of you, and people all over the world to our values and who we are as a people and as a nation. So we'll come out of this stronger than we went in.
Q: Thank you, sir.
STAFF: One more.
SEC. HAGEL: One more question? Okay.
Q: Good afternoon, sir. Sergeant Okimsy, Headquarters Battalion. My question was actually going to pertain to sequestration and cutbacks, but now I ask about, what does the future look like in retirement in the military since there are talks of changes to that?
SEC. HAGEL: Well, thank you. You see, that's the advantage of being a former senator -- and no offense, Senators -- is that when you get one question, you take the opportunity and you just answer six or seven, whether you're asked or not. So I'm glad I was able to answer part of that question that you had.
But the future for retirement, there's no question that -- not unlike our entitlement programs in the United States, Social Security and Medicare -- they are unsustainable with the path they're on, for the reasons I suspect most of you know. Now, that doesn't mean that we're going to cut off retirement benefits, but if we address those adjustments that are going to be required out into the future, just like in Social Security or Medicare, if we make some adjustments now and we're smart, then we can adjust what we need to adjust and assure that the benefits that you've earned that we've promised are going to be there.
For all of you, when you retire, your benefits should not be impacted by whatever tough choices that we're going to have to make, but there are things we can do now with TRICARE. Health care benefits for retirees, for example, are -- are the biggest part of the increases that are growing year by year by year, not unlike in the civilian world. So how do we adjust to that and assure those benefits? The people have earned them, and we've committed to them. We're do it. They're going to be there.
But we're going to have to adjust and make some changes on how we come at it in the out-years on the formulas used. They won't hurt anybody. You can make these kinds of things whether it's in Social Security -- I had introduced over the years in Social Security bills on just a cost-of-living allowance. If you just take that for Social Security, for example, and you make some adjustments there, it's astounding how many billions of dollars you save over the course of just a few years, if you make just a tiny adjustment there, take one index or another.
Now, I'm not going to play games with you on saying that your benefits are going to increase. They're probably not going to increase. But you're not going to be hurt. You're not going to be hurt.
Okay. Thank you very much.
STAFF: Thank you very much.
STAFF: Thank you.
SEC. HAGEL: Thank you.
All right, now -- first of all, I want you to know I want to get a picture taken with each of you, but you don't have to have your picture taken with me. It might -- it might hurt your reputation. So if you want a picture taken with me, it would be my honor. And we'll line up over here. Thank you. Semper Fi, Marines. Thank you.
MARINES: Oorah!
PRECIOUS METALS TRADING COMPANY RECEIVES $2.2 MILLION JUDGEMENT FOR ROLE IN FRAUD SCHEME
FROM: COMMODITY FUTURES TRADING COMMISSION
August 22 2013
Federal Court Enters $2.2 Million Default Judgment Order against Florida-based Global Precious Metals Trading Company and its Owner, Michael Ghaemi, for Operating a Fraudulent Off-Exchange Precious Metals Scheme
Defendants Misappropriated over $800,000 of Customer Funds, Virtually All of the Customer Funds Solicited and Accepted to Purchase Precious Metals
Washington, DC – The U.S. Commodity Futures Trading Commission today announced that it obtained a federal court default judgment Order against Global Precious Metals Trading Company, LLC (GPMT) of Coral Gables, Florida, and its principal Michael Ghaemi of Miami, Florida, charged with running a fraudulent precious metals scheme and misappropriating customers’ funds (see CFTC Press Release 6587-13, May 13, 2013).
The Order, entered by Federal District Judge Ursula Ungaro on August 12, 2013, requires GPMT and Ghaemi to pay a $1.26 million civil monetary penalty, $736,979 in restitution, and to disgorge $186,860 in ill-gotten gains. The Order also imposes permanent trading and registration bans against them and prohibits them from violating the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Order finds that, from at least July 16, 2011 to August 2012, GPMT and Ghaemi illegally solicited and accepted approximately $800,000 from nine U.S. retail customers to purchase physical precious metals, such as gold, silver, platinum, and palladium, on a financed basis, and defrauded the customers in connection with the precious metals transactions.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded the CFTC’s jurisdiction over transactions like these and requires that such transactions be executed on or subject to the rules of a board of trade, exchange, or commodity market. This new requirement took effect on July 16, 2011. According to the Order, the financed precious metals transactions offered by GPMT and Ghaemi were off-exchange and therefore illegal.
The Order further finds that GPMT and Ghaemi defrauded their retail customers by claiming to sell actual physical metals, making loans to customers to purchase those physical metals, and arranging for storage of the physical precious metals, when, in fact, they did not purchase or store precious metals, even as they charged customers interest on their loans and storage fees.
The Order further finds that GPMT and Ghaemi misappropriated virtually all of their customers’ funds and lost virtually all of those funds to either personal or other unauthorized use of the funds or through speculative margin trading in an account at a London brokerage. As a result, customers were left with no precious metals and with only a fraction of their funds having been returned to them, according to the Order.
The CFTC thanks the U.K. Financial Conduct Authority for its assistance in this matter.
CFTC Division of Enforcement Staff responsible for this case are Camille Arnold, Heather Johnson, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
CFTC’s Precious Metals Fraud Advisory and Enforcement Actions
In January 2012, the CFTC issued a Precious Metals Consumer Fraud Advisory to alert customers to precious metals fraud. The Advisory states that the CFTC had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals. The Advisory specifically warns that companies often fail to purchase any physical metals for their customers, instead simply keeping the customer’s funds. The CFTC’s Advisory further cautions customers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.
In recent months, the CFTC has brought several actions against entities and individuals who purport to buy precious metals and transfer ownership of those metals to customers, when insufficient metal, or no metal at all, is in fact purchased and delivered
August 22 2013
Federal Court Enters $2.2 Million Default Judgment Order against Florida-based Global Precious Metals Trading Company and its Owner, Michael Ghaemi, for Operating a Fraudulent Off-Exchange Precious Metals Scheme
Defendants Misappropriated over $800,000 of Customer Funds, Virtually All of the Customer Funds Solicited and Accepted to Purchase Precious Metals
Washington, DC – The U.S. Commodity Futures Trading Commission today announced that it obtained a federal court default judgment Order against Global Precious Metals Trading Company, LLC (GPMT) of Coral Gables, Florida, and its principal Michael Ghaemi of Miami, Florida, charged with running a fraudulent precious metals scheme and misappropriating customers’ funds (see CFTC Press Release 6587-13, May 13, 2013).
The Order, entered by Federal District Judge Ursula Ungaro on August 12, 2013, requires GPMT and Ghaemi to pay a $1.26 million civil monetary penalty, $736,979 in restitution, and to disgorge $186,860 in ill-gotten gains. The Order also imposes permanent trading and registration bans against them and prohibits them from violating the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Order finds that, from at least July 16, 2011 to August 2012, GPMT and Ghaemi illegally solicited and accepted approximately $800,000 from nine U.S. retail customers to purchase physical precious metals, such as gold, silver, platinum, and palladium, on a financed basis, and defrauded the customers in connection with the precious metals transactions.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded the CFTC’s jurisdiction over transactions like these and requires that such transactions be executed on or subject to the rules of a board of trade, exchange, or commodity market. This new requirement took effect on July 16, 2011. According to the Order, the financed precious metals transactions offered by GPMT and Ghaemi were off-exchange and therefore illegal.
The Order further finds that GPMT and Ghaemi defrauded their retail customers by claiming to sell actual physical metals, making loans to customers to purchase those physical metals, and arranging for storage of the physical precious metals, when, in fact, they did not purchase or store precious metals, even as they charged customers interest on their loans and storage fees.
The Order further finds that GPMT and Ghaemi misappropriated virtually all of their customers’ funds and lost virtually all of those funds to either personal or other unauthorized use of the funds or through speculative margin trading in an account at a London brokerage. As a result, customers were left with no precious metals and with only a fraction of their funds having been returned to them, according to the Order.
The CFTC thanks the U.K. Financial Conduct Authority for its assistance in this matter.
CFTC Division of Enforcement Staff responsible for this case are Camille Arnold, Heather Johnson, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
CFTC’s Precious Metals Fraud Advisory and Enforcement Actions
In January 2012, the CFTC issued a Precious Metals Consumer Fraud Advisory to alert customers to precious metals fraud. The Advisory states that the CFTC had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals. The Advisory specifically warns that companies often fail to purchase any physical metals for their customers, instead simply keeping the customer’s funds. The CFTC’s Advisory further cautions customers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.
In recent months, the CFTC has brought several actions against entities and individuals who purport to buy precious metals and transfer ownership of those metals to customers, when insufficient metal, or no metal at all, is in fact purchased and delivered
DEFENSE SECRETARY HAGEL AND GEORGIAN DEFENSE MINISTER ALASANIA MEET AT PENTAGON
FROM; U.S. DEFENSE DEPARTMENT
Hagel, Georgian Defense Minister Meet at Pentagon
American Forces Press Service
WASHINGTON, Aug. 22, 2013 - Defense Secretary Chuck Hagel met at the Pentagon yesterday with Georgian Defense Minister Irakli Alasania, Pentagon Press Secretary George Little said.
"Secretary Hagel praised Georgia's efforts to enhance civilian oversight of the armed forces, as these actions are a strong example of democratic progress through defense reform," he said.
Hagel expressed U.S. support for Georgia's Euro-Atlantic integration efforts, Little said, and highlighted its holding fair elections and continuing to consolidate democratic gains as effective measures to advance those efforts.
The two leaders agreed to continue to broaden U.S.-Georgian defense cooperation, he added.
Hagel, Georgian Defense Minister Meet at Pentagon
American Forces Press Service
WASHINGTON, Aug. 22, 2013 - Defense Secretary Chuck Hagel met at the Pentagon yesterday with Georgian Defense Minister Irakli Alasania, Pentagon Press Secretary George Little said.
"Secretary Hagel praised Georgia's efforts to enhance civilian oversight of the armed forces, as these actions are a strong example of democratic progress through defense reform," he said.
Hagel expressed U.S. support for Georgia's Euro-Atlantic integration efforts, Little said, and highlighted its holding fair elections and continuing to consolidate democratic gains as effective measures to advance those efforts.
The two leaders agreed to continue to broaden U.S.-Georgian defense cooperation, he added.
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT FOR WEEK ENDING AUGUST 17, 2013
FROM: U.S. LABOR DEPARTMENT
SEASONALLY ADJUSTED DATA
In the week ending August 17, the advance figure for seasonally adjusted initial claims was 336,000, an increase of 13,000 from the previous week's revised figure of 323,000. The 4-week moving average was 330,500, a decrease of 2,250 from the previous week's revised average of 332,750.
The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending August 10, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 10 was 2,999,000, an increase of 29,000 from the preceding week's revised level of 2,970,000. The 4-week moving average was 2,985,750, a decrease of 1,000 from the preceding week's revised average of 2,986,750.
UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 279,026 in the week ending August 17, a decrease of 3,997 from the previous week. There were 311,857 initial claims in the comparable week in 2012.
The advance unadjusted insured unemployment rate was 2.2 percent during the week ending August 10, unchanged from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,876,094, an increase of 16,087 from the preceding week's revised level of 2,860,007. A year earlier, the rate was 2.5 percent and the volume was 3,167,174.
The total number of people claiming benefits in all programs for the week ending August 3 was 4,438,656, a decrease of 148,207 from the previous week. There were 5,594,498 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered "on" the Extended Benefits program the week ending August 3.
Initial claims for UI benefits filed by former Federal civilian employees totaled 1,437 in the week ending August 10, a decrease of 276 from the prior week. There were 2,361 initial claims filed by newly discharged veterans, an increase of 126 from the preceding week.
There were 21,208 former Federal civilian employees claiming UI benefits for the week ending August 3, a decrease of 622 from the previous week. Newly discharged veterans claiming benefits totaled 33,235, a decrease of 1,235 from the prior week.
States reported 1,501,068 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending August 3, a decrease of 51,842 from the prior week. There were 2,326,635 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.
The highest insured unemployment rates in the week ending August 10 were in Puerto Rico (5.0), New Jersey (3.6), Alaska (3.5), Connecticut (3.4), New Mexico (3.2), Pennsylvania (3.2), California (3.0), Nevada (2.8), Rhode Island (2.8), and Virgin Islands (2.8).
The largest increases in initial claims for the week ending August 10 were in South Carolina (+907), New York (+762), Oregon (+685), Mississippi (+419), and Indiana (+400), while the largest decreases were in California (-4,105), Ohio (-1,554), Texas (-894), Florida (-881), and Georgia (-712).
SEASONALLY ADJUSTED DATA
In the week ending August 17, the advance figure for seasonally adjusted initial claims was 336,000, an increase of 13,000 from the previous week's revised figure of 323,000. The 4-week moving average was 330,500, a decrease of 2,250 from the previous week's revised average of 332,750.
The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending August 10, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 10 was 2,999,000, an increase of 29,000 from the preceding week's revised level of 2,970,000. The 4-week moving average was 2,985,750, a decrease of 1,000 from the preceding week's revised average of 2,986,750.
UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 279,026 in the week ending August 17, a decrease of 3,997 from the previous week. There were 311,857 initial claims in the comparable week in 2012.
The advance unadjusted insured unemployment rate was 2.2 percent during the week ending August 10, unchanged from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,876,094, an increase of 16,087 from the preceding week's revised level of 2,860,007. A year earlier, the rate was 2.5 percent and the volume was 3,167,174.
The total number of people claiming benefits in all programs for the week ending August 3 was 4,438,656, a decrease of 148,207 from the previous week. There were 5,594,498 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered "on" the Extended Benefits program the week ending August 3.
Initial claims for UI benefits filed by former Federal civilian employees totaled 1,437 in the week ending August 10, a decrease of 276 from the prior week. There were 2,361 initial claims filed by newly discharged veterans, an increase of 126 from the preceding week.
There were 21,208 former Federal civilian employees claiming UI benefits for the week ending August 3, a decrease of 622 from the previous week. Newly discharged veterans claiming benefits totaled 33,235, a decrease of 1,235 from the prior week.
States reported 1,501,068 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending August 3, a decrease of 51,842 from the prior week. There were 2,326,635 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.
The highest insured unemployment rates in the week ending August 10 were in Puerto Rico (5.0), New Jersey (3.6), Alaska (3.5), Connecticut (3.4), New Mexico (3.2), Pennsylvania (3.2), California (3.0), Nevada (2.8), Rhode Island (2.8), and Virgin Islands (2.8).
The largest increases in initial claims for the week ending August 10 were in South Carolina (+907), New York (+762), Oregon (+685), Mississippi (+419), and Indiana (+400), while the largest decreases were in California (-4,105), Ohio (-1,554), Texas (-894), Florida (-881), and Georgia (-712).
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