DEPUTY SECRETARY OF THE TREASURY SPEAKS BERORE SENATE COMMITTEE ON WALL STREET REFORM

FROM:  U.S. DEPARTMENT OF TREASURY
Testimony by Deputy Secretary Neal Wolin before the Senate Committee on Banking, Housing, and Urban Affairs on “Implementing Wall Street Reform: Enhancing Bank Supervision and Reducing Systemic Risk”

As prepared for delivery
WASHINGTON – Chairman Johnson, Ranking Member Shelby, and members of the Committee, thank you for the opportunity to appear here today to discuss progress implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).

The Dodd-Frank Act represents the most significant set of financial reforms since the Great Depression.  Its full implementation will help protect Americans from the excessive risk, fragmented oversight, and poor consumer protections that played such leading roles in bringing about the recent financial crisis.

That crisis, and the recession that accompanied it, cost nearly 9 million jobs, erased a quarter of families’ household wealth, and brought GDP growth to a low of nearly negative 9 percent.

Today, our economy has improved substantially, although more work remains ahead.  More than 4.3 million private sector jobs have been created over the past 27 months and, since mid-2009, our economy has grown at an average annual rate of 2.4 percent.

As part of our broader efforts to strengthen the economy, Treasury is focused on fulfilling its role in implementing the Dodd-Frank Act to build a more efficient, transparent, and stable financial system—one that contributes to our country’s economic strength, instead of putting it at risk.

The Dodd-Frank Act’s reforms address key failures in our financial system that precipitated and prolonged the financial crisis.  The Act’s core elements include:

Tougher constraints on excessive risk-taking and leverage across the financial system.  To lower the risk of failure of large financial institutions and reduce damage to the broader economy in the event a large financial institution does fail, the Dodd-Frank Act provides authority for regulators to impose tougher safeguards against risks that could threaten the stability of the financial system and the broader economy.

The Federal Reserve has proposed new standards to require banks to hold greater capital against risk and fund themselves more conservatively.  New rules restricting proprietary trading under the Volcker Rule and limits to the size of financial institutions relative to the total financial system have been proposed or will be proposed in the coming months.  Safeguards against excessive risk-taking and leverage will not only apply to the biggest banks, but also designated nonbank financial companies.  Importantly, the bulk of these requirements do not apply to small and community banks, and help level the playing field for these smaller participants by helping eliminate distortions that previously favored the biggest banks that held the most risk.

The Dodd-Frank Act also established the Financial Stability Oversight Council (the Council) to coordinate agencies’ efforts to monitor risks and emerging threats to U.S. financial stability, and the Office of Financial Research (OFR) to collect and standardize financial data, perform essential research, and develop new tools for measuring and monitoring risk in the financial system.

Orderly liquidation authority.  The Dodd-Frank Act created a new orderly liquidation authority to resolve a failed or failing financial firm if its failure would have serious adverse effects on the financial stability of the United States.  The statute makes clear that taxpayers will not be put at risk in the event a large financial firm fails.  Investors and management, not taxpayers, will be responsible for the cost of the failure.

The FDIC has completed most of the rules necessary to implement the orderly liquidation authority, and is engaging in planning exercises with Treasury and other regulators to coordinate how it would work in practice.  This summer, the largest bank holding companies will submit the first set of “living wills” to regulators and the Council.  These documents will lay out plans for winding down a firm if it faces failure.

Comprehensive oversight of derivatives.  The Dodd-Frank Act created a new regulatory framework for over-the-counter derivatives markets to increase oversight, transparency, and stability in this previously unregulated area of the financial system.

Regulators have proposed almost all the necessary rules to implement comprehensive oversight of the derivatives markets, and we expect most to be finalized this year.  We are already seeing signs of standardized derivatives moving to central clearing, and substantial work is being done to build out new financial infrastructure to move trades into clearing and onto electronic trading platforms.

Stronger consumer financial protection.  The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) to consolidate consumer financial protection responsibilities that had been fragmented across several federal regulators into a single institution dedicated solely to that purpose.  The CFPB’s mission is to help ensure consumers have the information they need to make financial decisions appropriate for them, enforce Federal consumer financial laws, and restrict unfair, deceptive, or abusive acts and practices.

The CFPB is currently working to improve clarity and choice in consumer financial products through the Know Before You Owe project, which aims to simplify mortgage forms, credit card disclosures, and student financial aid offers.  The CFPB is also focused on helping improve consumer financial protections for groups like servicemembers and older Americans, as well as bringing previously unregulated consumer financial institutions, like payday lenders, credit reporting bureaus, and private mortgage originators, under federal supervision for the first time.  Earlier this year, the CFPB commenced its supervision of debt collectors and credit reporting agencies.

Transparency and market integrity.  The Dodd-Frank Act included a number of measures that increase disclosure and transparency of financial markets, including new reporting rules for hedge funds, trade repositories to collect information on derivatives markets, and improved disclosures on asset-backed securities.

This summer, the largest hedge funds and private equity funds will be required to report important information about their investments and borrowing for the first time, helping regulators understand exposures at these significant investment vehicles.  New swaps data repositories are being created that will provide regulators and market participants with a stronger understanding of the scale and nature of exposures within previously opaque derivatives markets.

Treasury’s core responsibilities in implementing the Dodd-Frank Act include the Secretary’s role as Chairperson of the Council, standing up the Office of Financial Research and Federal Insurance Office, and coordinating the rulemaking processes for risk retention for asset-backed securities and the Volcker Rule.

The Financial Stability Oversight Council
The Dodd-Frank Act created the Financial Stability Oversight Council to identify risks to the financial stability of the United States, promote market discipline, and respond to emerging threats to the stability of the U.S. financial system.

The Council is actively engaged in these activities and has begun to institutionalize its role.  To date, the Council has held 17 principals meetings, four since I last testified in December.  In recent months, the Council’s principals have come together to share information on a range of important financial developments as the Council, its members, and staff have actively engaged in monitoring the situation in Europe, in housing markets, the interaction of the economy and energy markets, and the lessons to be drawn from recent errors in risk management at several major financial institutions, including the failure of MF Global and trading losses at JPMorgan Chase.  In addition to regular engagement at the principals level, the Council has active staff discussions through twice monthly deputies level meetings and ongoing staff work on individual committee and project workstreams.

The Council expects to release its second annual report on financial market and regulatory developments and potential emerging threats to our financial system in July.  In addition to providing new recommendations, the report will include an update on the progress made on last year’s recommendations, which focused on enhancing the integrity, efficiency, competitiveness, and stability of U.S. financial markets, promoting market discipline, and maintaining investor confidence.

One of the duties of the Council is to facilitate information-sharing and coordination among its members regarding rulemaking, examinations, reporting requirements, and enforcement actions.  Through meetings among principals, deputies, and staff, the Council has served as an important forum for increasing coordination among the member agencies.  Some argue that the Council should be able to ensure particular outcomes in independent agencies’ rules, or perfect harmony between rules with disparate statutory bases.  While the Council serves a very important role in bringing regulators together, the Dodd-Frank Act did not eliminate the independence of regulators to write rules within their statutory mandates.

Nonetheless, the Dodd-Frank Act implementation process has brought about unprecedented cooperation among agencies in writing new rules for our financial system.  As Chair of the Council, Treasury continues to make it a top priority that the work of the regulators is well-coordinated.

The Treasury Secretary, as Chairperson of the Council, is coordinating the rulemaking required for the Dodd-Frank Act’s risk retention requirements, which are designed to improve the alignment of interests between originators of risk and securitizers of, and investors in, asset-backed securities.  After the proposed rule was released, the rule-writers received over 13,000 comment letters, and they are continuing to review feedback as they work towards a final rule.

The Council has also made progress on two of its direct responsibilities under the Dodd-Frank
Act: designating financial market utilities (FMUs) and nonbank financial companies for enhanced prudential standards and supervision.

In July 2011, the Council finalized a rule setting the process and criteria for designating FMUs and, in August, began working to identify FMUs for consideration in accordance with the statue and the rule.  In January 2012, an initial set of FMUs were notified that they would be under consideration for designation.  In May, the Council unanimously voted to propose the designation of an initial set of FMUs as systemically important.  This vote is not a final determination, and FMUs may request a hearing before the Council to contest a proposed designation.  The Council expects to make final determinations on an initial set of FMU designations as early as this summer.

In April 2012, the Council issued a final rule and interpretive guidance establishing quantitative and qualitative criteria and procedures for designations of nonbank financial companies.  The Council has begun work to apply the process described in the guidance.  The Council recognizes that the designation of nonbank financial companies is an important part of the Dodd-Frank Act’s implementation and intends to proceed with due care as expeditiously as possible.

The Dodd-Frank Act also provides for limits on the growth and concentration of our largest financial institutions.  The Council has released a study and recommendations on the effective implementation of these limitations, and the Federal Reserve is expected to propose a rule to implement concentration limits later this year.

The Office of Financial Research
The Dodd-Frank Act established the Office of Financial Research to collect and standardize financial data, perform essential research, and develop new tools for measuring and monitoring risk in the financial system.

In December 2011, President Obama nominated Richard Berner to be the OFR’s first Director.  I appreciate this committee’s support of Mr. Berner’s nomination.  Confirmation by the full Senate is important to ensure the OFR can fulfill its critical role.

A key component of the OFR’s mission is supporting the Council and its member agencies by analyzing financial data to monitor risk within the financial system.  Currently, the OFR is working on a number of projects with the Council, including providing analysis related to the Council’s evaluation of nonbank financial companies for potential designation for Federal Reserve supervision and enhanced prudential standards; providing data and analysis in support of the Council’s second annual report on financial market and regulatory developments and potential emerging threats to our financial system; and, in collaboration with Council member agencies, developing metrics and indicators related to financial stability.

To avoid duplicating existing government collection efforts or imposing unnecessary burdens on financial institutions, the OFR is focused on ensuring it relies on data already collected by regulatory agencies whenever possible.  The OFR is working with regulators to catalogue the data they already collect, along with exploring ways it could promote stronger data sharing for the regulatory community to generate efficiencies and improved interagency cooperation.

As part of its mission, the OFR is also promoting standards to improve the quality and scope of financial data, which in turn should help regulators and market participants mitigate risks to the financial system and provide firms with important efficiencies and cost-savings.  One ongoing priority is establishing a Legal Entity Identifier (LEI), or unique, global standard for identifying parties to financial transactions, to improve data quality and consistency.  The OFR is playing a lead role in the international process coordinated by the Financial Stability Board (FSB) to develop an LEI.  Just last week, the FSB endorsed recommendations the OFR developed in conjunction with its international counterparts to establish a global LEI system.  This recognition allows market participants to begin preparing for the implementation of the global LEI next year.

A more comprehensive understanding of the largest and most complex financial firms’ exposures is critical to identifying risks to the financial system and mitigating future crises.  However, some have expressed concerns about the OFR—involving its accountability, access to personal financial information, and ability to secure sensitive data—that are unfounded.

First, Congress has oversight authority over the OFR, and the statute requires the Director to testify regularly before Congress.  Consistent with requirements under the Dodd-Frank Act, the OFR will provide the Congress with its first Annual Report on its activities this summer and a second report, on the Office’s human resources practices, later this year.  In addition, the Dodd-Frank Act provides authority for Treasury’s Inspector General, the Government Accountability Office, and the Council of Inspectors General on Financial Oversight to oversee the activities of the OFR.

Second, regarding data collection, the Dodd-Frank Act does not contemplate and the OFR will not collect personal financial information from consumers.  The OFR, like other banking regulators, only has the authority to collect information from financial institutions, not individual citizens.  The OFR will only utilize data required to fulfill its mission—assessing threats to stability across the financial system.

Lastly, data security is the highest priority for the OFR.  As an office of the Department of the Treasury, the OFR utilizes Treasury’s sophisticated security systems to protect sensitive data.  The OFR is also implementing additional controls for OFR-specific systems, including a secure data enclave within Treasury’s IT infrastructure.  Access to confidential information will only be granted to personnel that require it to perform specific functions, and the OFR will regularly monitor and verify its use to protect against unauthorized access.  In addition, the OFR is working in collaboration with other Council members to develop a mapping among data classification structures and tools to support secure collaboration and data sharing. Such tools include a data transmission protocol currently used by other Council members that will enable interagency data exchange and a secure collaboration tool for sharing documents.

The Federal Insurance Office
The Dodd-Frank Act created the Federal Insurance Office to monitor all aspects of the insurance industry, identify issues or gaps in regulation that could contribute to a systemic crisis in the insurance industry or financial system, monitor the accessibility and affordability of non-health insurance products to traditionally underserved communities, coordinate and develop federal policy on prudential aspects of international insurance matters, and contribute expertise to the Council.

As a member of the Council, FIO, in addition to two additional Council members that focus on insurance, has been actively involved in the rulemaking establishing the process for the designation of nonbank financial companies.  FIO will be engaged in the review of nonbank financial companies as this process moves forward.

Until the establishment of FIO, the United States was not represented by a single, unified federal voice in the development of international insurance supervisory standards.  FIO is providing important leadership in developing international insurance policy.  Recently, FIO assumed a seat on the executive committee of the International Association of Insurance Supervisors (IAIS).  The IAIS, in cooperation with the Financial Stability Board (FSB), is developing the methodology and indicators to identify global systemically important insurers, and FIO is actively engaged in that process.  Additionally, FIO established and has provided necessary leadership in the EU-U.S. insurance dialogue regarding such matters as group supervision, capital requirements, reinsurance, and financial reporting.  FIO also participated in the recent U.S.-China Strategic and Economic Dialogue in Beijing.  Importantly, FIO has and will continue to work closely and consult with state insurance regulators and other federal agencies in its work.

Priorities Ahead
Under the Dodd-Frank Act, Treasury is charged with coordinating the implementation of the Volcker Rule.  Treasury is actively engaged with the independent regulatory agencies in their work to finalize the Volcker Rule and make sure it is implemented effectively to prohibit proprietary trading activities and limit investments in and sponsorship of hedge funds and private equity funds.

The five Volcker Rule rulemaking agencies released substantially identical proposed rules, which reflect the commitment of Treasury and the regulators to a coordinated approach.  The comment periods for all five rulemaking agencies are now complete, and we are reviewing and analyzing over 18,000 public comment letters.  Treasury is hosting and actively participates in weekly interagency meetings to review those comments, and remains committed to fulfilling our coordination role and working with the rulemaking agencies to achieve a strong and consistent final rule.

Regulators are still in the process of conducting their evaluation of what happened with respect to recent losses at JPMorgan Chase, and why.  The lessons learned from the recent failures in risk management at JPMorgan are an important input into the ongoing efforts to design strong safeguards and reforms, including, of course, those in the Volcker Rule.

The Volcker Rule, as reflected in the statutory language enacted as part of the Dodd-Frank Act and in the proposed rule, explicitly exempts from the prohibition on proprietary trading the ability of firms to engage in “risk-mitigating hedging activities in connection with and related to individual or aggregated positions…designed to reduce the specific risks to the banking entity.”  To that end, the final rule should clearly prohibit activity that, even if described as hedging, does not reduce the risks related to specific individual or aggregate positions held by a firm.

The exposures accumulated by JPMorgan, in the words of its executives, resulted in potential losses that exceeded its internal limits and those estimated by its internal risk management systems.  This raises concerns that go well beyond the scope of the Volcker Rule.  Among other things, regulators should require that banks’ senior management and directors put in place effective models to evaluate risk, strengthen reporting structures to ensure risks are assessed independently and at appropriately senior levels, and establish clear accountability for failures in risk management.  Regulators should make sure that they have a clear understanding of exposures and that banks and their senior management are held accountable for the thoroughness and reliability of their risk management systems.  To further accountability, there should also be appropriate public transparency of risk management systems and internal limits.

Ultimately, the true test of reform is not whether it prevents firms from taking risk or from making mistakes, but whether our financial regulatory system is tough enough and designed well enough to prevent those mistakes from hurting the broader economy or costing taxpayers money.  We all have an interest in achieving this outcome.

I emphasize the broader framework of reforms because our ability to protect the economy from financial mistakes in banks depends on the authority and resources we have to enforce tougher capital, leverage, and liquidity requirements on banks and the largest, most complex nonbank financial companies.

It depends on our ability to put in place the full framework of protections in the Dodd-Frank Act on derivatives, from margin requirements and central clearing of standardized derivatives to greater transparency into risks and exposures.

It depends on the resources available to the SEC, the CFTC, the CFPB and the other enforcement authorities to police and deter manipulation, fraud, and abuse.

It depends on our ability to protect taxpayers from future financial failures, in particular our ability to safely unwind a large firm without the broad collateral damage and risk to the taxpayer that we experienced in 2008.

And it depends on making sure that no exception built into the law is allowed to swallow the rule, frustrate the core purpose of the legislation, or otherwise undermine the impact of the tough safeguards we need.

The challenges our economy continues to experience since the financial crisis in 2008 only increase our commitment to make sure we meet our responsibility to the American public to implement lasting financial reform.

Recent events provide an additional reminder that comprehensive reform must continue to move forward.  The Administration will continue to resist all efforts to roll back reforms already in place or block progress for those that remain to be implemented.  The lessons of the financial crisis should not be left unlearned or forgotten, nor should American workers—or American taxpayers—be left unprotected from the consequences of future financial instability.

I appreciate the opportunity to discuss the priorities and progress associated with our work implementing the Dodd-Frank Act, and the leadership and support of this committee in those efforts.

Thank you.

OFFICE ON VIOLENCE AGAINST WOMEN ANNOUNCES AGREEMENT TO CROSS-DESIGNATE TRIBAL PROSECUTORS IN SOME STATES

FROM:  U.S. DEPARTMENT OF JUSTICE
Tuesday, June 5, 2012
Office on Violence Against Women Announces Agreements to Cross-Designate Tribal Prosecutors in Nebraska, New Mexico, Montana, North Dakota and South Dakota

WASHINGTON – The Justice Department’s Office on Violence Against Women (OVW) announced today that four tribes in Nebraska, New Mexico, Montana, North Dakota and South Dakota will be awarded cooperative agreements to cross-designate tribal prosecutors to pursue violence against women cases in both tribal and federal courts.

The goal of the Tribal Special U.S. Attorney (SAUSA) program is to train eligible tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable criminal offense is prosecuted in tribal court, federal court or both.  The program  enables tribal prosecutors to bring violence against women cases in federal court and to serve as co-counsel with federal prosecutors on felony investigations and prosecutions of offenses arising out of their respective tribal communities.
“We know that violence against Native women has reached epidemic proportions,” said OVW Director Bea Hanson.  “Restoring safety for Native women requires the type of sustained cooperation between the federal and tribal justice systems that we see in the jurisdictions participating in our Tribal SAUSA project.”

Through this special initiative, OVW will support salary, travel and training costs of four tribal SAUSAs, who will work in collaboration with the U.S. Attorneys Offices in the Districts of Nebraska, New Mexico, Montana, North Dakota and South Dakota.  Specifically, OVW will award cooperative agreements to four federally recognized tribes to select qualified applicants in cooperation with the U.S. Attorney Offices to serve as cross-designated prosecutors.  These prosecutors will maintain an active violence against women crimes caseload, in tribal and/or federal court, while also helping to promote higher quality investigations, improved training and better inter-governmental communication.

Tailored to meet the particular needs of the participating jurisdiction, these pilot programs are designed to improve the quality of cases, the coordination of resources and the communication of priorities both within and between the various law enforcement agencies working in this area.

The Tribal SAUSA Pilot Project was largely driven by input gathered from the Justice Department's 2009 Tribal Nation Listening Session on Public Safety and Law Enforcement, and its annual tribal consultation on violence against women.  The Tribal SAUSA initiative is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities, and represents a partnership between OVW, the Executive Office of US Attorney's and the US Attorney's Offices in Montana, Nebraska, New Mexico, North Dakota and South Dakota.

OPPENHEIMER FUNDS INC., CHARGED BY SEC WITH MAKING MISLEADING STATEMENTS

Photo:  NYSE.  Credit:  U.S. Government.
FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., June 6, 2012 – The Securities and Exchange Commission today charged investment management company OppenheimerFunds Inc. and its sales and distribution arm with making misleading statements about two of its mutual funds struggling in the midst of the credit crisis in late 2008.

The SEC’s investigation found that Oppenheimer used derivative instruments known as total return swaps (TRS contracts) to add substantial commercial mortgage-backed securities (CMBS) exposure in a high-yield bond fund called the Oppenheimer Champion Income Fund and an intermediate-term, investment-grade fund called the Oppenheimer Core Bond Fund. The 2008 prospectus for the Champion fund didn’t adequately disclose the fund’s practice of assuming substantial leverage in using derivative instruments. And when declines in the CMBS market triggered large cash liabilities on the TRS contracts in both funds and forced Oppenheimer to reduce CMBS exposure, Oppenheimer disseminated misleading statements about the funds’ losses and their recovery prospects.

Oppenheimer agreed to pay more than $35 million to settle the SEC’s charges.

“Mutual fund providers have an obligation to clearly and accurately convey the strategies and risks of the products they sell,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Candor, not wishful thinking, should drive communications with investors, particularly during times of market stress.”

Julie Lutz, Associate Director of the SEC’s Denver Regional Office, added, “These Oppenheimer funds had to sell bonds at the worst possible time to raise cash for TRS contract payments and cut their CMBS exposure to limit future losses. Yet, the message that Oppenheimer conveyed to investors was that the funds were maintaining their positions and the losses were recoverable.”

According to the SEC’s order instituting settled administrative proceedings against OppenheimerFunds and OppenheimerFunds Distributor Inc., the TRS contracts allowed the two funds to gain substantial exposure to commercial mortgages without purchasing actual bonds. But they also created large amounts of leverage in the funds. Beginning in mid-September 2008, steep CMBS market declines drove down the net asset values (NAVs) of both funds. These losses forced Oppenheimer to raise cash for month-end TRS contract payments by selling securities into an increasingly illiquid market.

According to the SEC’s order, the funds’ portfolio managers under instruction from senior management began executing a plan in mid-November to reduce CMBS exposure. Just as they began to do so, however, the CMBS market collapse accelerated, creating staggering cash liabilities for the funds and driving their NAVs even lower.

The SEC’s order found that continued CMBS declines forced the funds to sell more portfolio securities in order to raise cash for anticipated TRS contract payments. This task became increasingly difficult for the Champion fund, ultimately prompting Oppenheimer to make a $150 million cash infusion into the fund on November 21. Over the next two weeks, the funds continued to reduce their CMBS exposure to avoid further losses.
According to the SEC’s order, Oppenheimer advanced several misleading messages when responding to questions in the midst of these events. For instance, Oppenheimer
communicated to financial advisers (whose clients were invested in the funds) and fund shareholders directly that the funds had only suffered paper losses and their holdings and strategies remained intact. Oppenheimer also stressed that absent actual defaults, the funds would continue collecting payments on the funds’ bonds as they waited for markets to recover. These communications were materially misleading because the funds were committed to substantially reducing their CMBS exposure, which dampened their prospects for recovering CMBS-induced losses. Moreover, the funds had been forced to sell significant portions of their bond holdings to raise cash for anticipated TRS contract payments, resulting in realized investment losses and lost future income from the bonds.
The SEC’s investigation found that the Champion fund’s 2008 prospectus was materially misleading in describing the fund’s “main” investments in high-yield bonds without adequately disclosing the fund’s practice of assuming substantial leverage on top of those investments. While the prospectus disclosed that the fund “invested” in “swaps” and other derivatives “to try to enhance income or to try to manage investment risk,” it did not adequately disclose that the fund could use derivatives to such an extent that the fund’s total investment exposure could far exceed the value of its portfolio securities and, therefore, that its investment returns could depend primarily upon the performance of bonds that it did not own.

The SEC’s order finds that OppenheimerFunds violated Section 34(b) of the Investment Company Act of 1940, Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act), and Section 206(4) of the Investment Advisers Act of 1940 and Rule 205(4)-8 promulgated thereunder. The order finds that OppenheimerFunds Distributor violated Sections 17(a)(2) and 17(a)(3) of the Securities Act.

Without admitting or denying the SEC’s findings, OppenheimerFunds agreed to pay a penalty of $24 million, disgorgement of $9,879,706, and prejudgment interest of $1,487,190. This money will be deposited into a fund for the benefit of investors. OppenheimerFunds and OppenheimerFunds Distributor also agreed to provisions in the order censuring them and directing them to cease and desist from committing or causing any violations or future violations of these statutes and rules.

The SEC’s investigation was conducted by Coates Lear, Jeffrey E. Oraker, Hugh C. Beck, Patricia E. Foley, and Mary S. Brady in the Denver Regional Office. The related examination of Oppenheimer was conducted by Francesco Spinella, Tracy O’Sullivan, C. Michael Hooper, Kathleen A. Raimondi, and Paula S. Weisz under the supervision of branch chief Kenneth O’Connor and assistant director Dawn Blankenship in the New York Regional Office.

RIPPLES IN THE FABRIC OF SPACE HURDLE MASSIVE BLACK HOLE FROM HOME GALAXY

Photo:  Intermediate Black Hole.  Credit NASA
FROM:  NASA
GIANT BLACK HOLE KICKED OUT OF HOME GALAXY
WASHINGTON -- Astronomers have found strong evidence that a massive
black hole is being ejected from its host galaxy at a speed of
several million miles per hour. New observations from NASA's Chandra
X-ray Observatory suggest that the black hole collided and merged
with another black hole and received a powerful recoil kick from
gravitational wave radiation.

"It's hard to believe that a supermassive black hole weighing millions
of times the mass of the sun could be moved at all, let alone kicked
out of a galaxy at enormous speed," said Francesca Civano of the
Harvard-Smithsonian Center for Astrophysics (CfA), who led the new
study. "But these new data support the idea that gravitational waves
-- ripples in the fabric of space first predicted by Albert Einstein
but never detected directly -- can exert an extremely powerful
force."

Although the ejection of a supermassive black hole from a galaxy by
recoil because more gravitational waves are being emitted in one
direction than another is likely to be rare, it nevertheless could
mean that there are many giant black holes roaming undetected out in
the vast spaces between galaxies.

"These black holes would be invisible to us," said co-author Laura
Blecha, also of CfA, "because they have consumed all of the gas
surrounding them after being thrown out of their home galaxy."

Civano and her group have been studying a system known as CID-42,
located in the middle of a galaxy about 4 billion light years away.
They had previously spotted two distinct, compact sources of optical
light in CID-42, using NASA's Hubble Space Telescope.

More optical data from the ground-based Magellan and Very Large
Telescopes in Chile supplied a spectrum (that is, the distribution of
optical light with energy) that suggested the two sources in CID-42
are moving apart at a speed of at least 3 million miles per hour.

Previous Chandra observations detected a bright X-ray source likely
caused by super-heated material around one or more supermassive black
holes. However, they could not distinguish whether the X-rays came
from one or both of the optical sources because Chandra was not
pointed directly at CID-42, giving an X-ray source that was less
sharp than usual.

"The previous data told us that there was something special going on,
but we couldn't tell if there were two black holes or just one," said
another co-author Martin Elvis, also of CfA. "We needed new X-ray
data to separate the sources."

When Chandra's sharp High Resolution Camera was pointed directly at
CID-42, the resulting data showed that X-rays were coming only from
one of the sources. The team thinks that when two galaxies collided,
the supermassive black holes in the center of each galaxy also
collided. The two black holes then merged to form a single black hole
that recoiled from gravitational waves produced by the collision,
which gave the newly merged black hole a sufficiently large kick for
it to eventually escape from the galaxy.

The other optical source is thought to be the bright star cluster that
was left behind. This picture is consistent with recent computer
simulations of merging black holes, which show that merged black
holes can receive powerful kicks from the emission of gravitational
waves.

There are two other possible explanations for what is happening in
CID-42. One would involve an encounter between three supermassive
black holes, resulting in the lightest one being ejected. Another
idea is that CID-42 contains two supermassive black holes spiraling
toward one another, rather than one moving quickly away.

Both of these alternate explanations would require at least one of the
supermassive black holes to be very obscured, since only one bright
X-ray source is observed. Thus the Chandra data support the idea of a
black hole recoiling because of gravitational waves.

These results will appear in the June 10 issue of The Astrophysical
Journal.

NASA's Marshall Space Flight Center in Huntsville, Ala., manages the
Chandra Program for the agency's Science Mission Directorate in
Washington. The Smithsonian Astrophysical Observatory in Cambridge,
Mass., controls Chandra's science and flight operations

D-DAY LANDINGS REMEMBERED

FROM:  AMERICAN FORCES PRESS SERVICE
Task Force 68, which is made up of paratroopers from U.S., Germany, France, Holland, and the United Kingdom, re-enacted the D-Day airborne operation on the La Fiere fields near Sainte-Mere-Eglise, France, June 3, 2012. U.S. Army photo by Staff Sgt. Sharilyn Wells  

Veterans, Contemporary Warriors Salute D-Day Landings
By Army Staff Sgt. Rick Scavetta
American Forces Press Service
SAINTE-MÈRE-EGLISE, France, June 6, 2012 - When Eugene Cook jumped into Normandy during the predawn hours of June 6, 1944, he landed several miles from his intended drop zone.

Alone in the dark French countryside, the young 101st Airborne Division paratrooper from Georgia assembled his rifle, got his bearings and began looking for other Americans among Normandy's hedgerows. In the days and weeks that followed, Cook took part in the now-famous battles that began the liberation of France and led to Allied victory over Nazi Germany.

Cook, 87, was among the handful of World War II veterans who attended the 68th anniversary of the D-Day landings here this week. U.S. service members from all the military branches took part in honoring the veterans, something Cook said he was glad to see.

"We have to commemorate the lives of the guys we left here," Cook said. "They gave their lives for us, and we should show them thanks."

Known as Operation Overlord, the D-Day landings of June 6, 1944, combined U.S. and Allied air drops with beach landings along Normandy's coast. U.S. paratroopers from the 82nd and 101st Infantry Divisions dropped onto the Cotenin peninsula to secure bridges, roads and towns vital to allowing the troops landing at nearby Utah Beach to move inland.
"That day, 68 years ago, as American blood mixed with French soil, it cemented even further the strong bonds between our two nations," said U.S. Army Secretary John McHugh said as visited the La Fiere drop zone.

For the returning veterans there was a mix of feelings -- glad to be alive and sharing good times and sorrowful memories of those who'd died.

Yesterday -- a cold and overcast day -- John Perrozi walked between rows of white marble gravestones at the Normandy American Cemetery, overlooking Omaha Beach. He stopped at one cross and then another, paying his respects to several buddies who died fighting in Normandy. As an 82nd Airborne Division paratrooper, Perozzi fought on D-Day with the 505th Parachute Infantry Regiment. It was his first trip back since the war.
During a June 3 ceremony at the La Fière drop zone, a battlefield where Perozzi fought, he received France's highest military medal, the Légion d'Honneur. Before the ceremony, thousands of spectators watched as U.S. and international paratroopers recreate D-Day's airborne operations -- jumping from U.S. Air Force planes onto the "Iron Mike" drop zone near the La Fière bridge -- at the Mederet River just west of Sainte-Mère-Eglise.
Soldiers from the Fort Bragg, N.C.,-based U.S. Army Civil Affairs & Psychological Operations Command and the Kaiserslautern, Germany-based 5th Quartermaster Detachment were among the hundreds of paratroopers who took part.

The Liberty Jump Team, which includes veterans from other conflicts and civilian parachutists, also jumped. Dave De Soucy, a retired officer from California who served in combat with the 101st Airborne Division during Vietnam, was one of the first to land in La Fiere's marshy drop zone -- an area that was flooded on D-Day where several 82nd paratroopers drowned on D-Day, stuck in their chutes and harnesses. Packing up his chute, De Soucy said commemorative jumps honor World War II paratroopers, but also remind people about our current military operations.

"It's an almost overwhelming experience," said De Soucy, pausing as emotions welled inside him. "We've got to remember the folks who did it and those who still do it -- the one percent who go into harm's way for the benefit of the [other] 99 percent."

Afterward, Charles Rivkin, U.S. Ambassador to France, jumped with the Golden Knights, the U.S. Army's parachute demonstration team. Then spectators, dignitaries, soldiers and veterans gathered on the grassy slope nearby for a series of commemorative speeches and wreath presentations.

John Roman, 87, who came ashore with the 4th Infantry Division, was surprised to hear a German military band at the ceremony, playing "Glory, Glory Hallelujah." Seeing German troops didn't bother him, he said.

"You've got to forget, some time," Roman said. "It's good that they are here. Maybe, the world will be better off."

Toward the end of the war, Roman met a young French woman, Jacqueline, at a café. They've been married 66 years and had six children, she said. Each year, they come back, as Roman wants to remember buddies he lost, she said.

When wind gusts caught the beret of a German soldier, Jacqueline Roman watched in amazement as Lt. Gen. Mark Hertling, commander of U.S. Army Europe, walked over and knelt down to pick up the beret off the dirt, then handed it back to the German.
"That's the American way," she said. "That was wonderful."

After World War II, there were 16 million living American veterans. Now, many are reaching their final years. U.S. troops cherished the opportunity to speak with them, to shake their hands and hear their stories.

"You can learn firsthand about history from these veterans," Hertling said. "Not a lot has changed. They had the same fears and anxiety as they went into combat and the trauma from the things they faced. They teach our soldiers a lot about what that means."
One older paratrooper hugged Army Staff Sgt. Rachel Medley, 34, of Eureka, Calif., who serves with the Golden Knights. Meeting soldiers from World War II is humbling, she said.

"They paved the path for the way the world is today," Medley said. "The time is rapidly approaching when it won't be living history anymore. It will be just something we read about in books because there will be no one who witnessed this. For us to be here and say thank you, it's a huge honor to be in their presence."

U.S. troops and veterans marched through Sainte-Mère-Eglise, where they were honored with a banquet in the town square. Similar events were held throughout the area during the days leading up to this year's D-Day commemoration.

Earlier in the week, on June 2, U.S. Special Operations Forces demonstrated a high altitude, low opening jump near the historic Norman town of Mont Saint Michel. Army Capt. Stephen Cargill, an officer from the Stuttgart, Germany-based 1st Battalion, 10th Special Forces Group, said free falling above Normandy meant a lot to him.
"It's just amazing to get the opportunity to see something so incredible," Cargill said. "It hits that much closer to home, to land on hallowed ground."

One evening, Cargill and fellow Special Forces soldiers relaxed outdoors near the Stop Café, a famous gathering spot in Sainte-Mère-Eglise. Troops mingled with French people wearing old-fashioned uniforms. One Dutch teen, Rob Van Meel, 13, cautiously approached the Green Berets in his authentic World War II uniform of a 101st Airborne Division soldier.

While many French children ask U.S. troops for a souvenir, Van Meel just asked about their patches. Impressed with Van Meel's detailed uniform, Army Master Sgt. Damon Storey got down and presented Van Meel with a set of combat jump wings -- a treasured possession. Van Meel attended D-Day anniversaries in Normandy every year of his life, he said. In fact, his first costume was as a World War II ammunition box at just 3 months old. He thanked Storey, but said he wouldn't wear the jump wings on the Screaming Eagles uniform, as it wouldn't have been historically correct.

A handful of aging U.S. and Allied veterans attended several ceremonies over the course of week. Ellan Levitsky Orkin, 92, and her sister Dorothy, 95, who served together in Normandy as U.S. Army nurses, were offered honorary French citizenship during a June 4 ceremony in Bolleville. They helped unveil a new memorial to World War II medics, near where they served with the 164th Field Hospital. They come back every year, but they don't quite understand all the excitement, Orkin said.

"We came and had a job to do and we went home," she said. "When we went home, nobody asked us questions then and we didn't talk about it. It was too painful."
Still, some veterans are willing to share their tales. And they don't mind using newer technology if it means bridging the gap of miles. Milt Staley, 93, of Redding, Calif., waded through chest-deep surf onto Utah Beach on D-Day with the 4th Infantry Division. He first returned in 2011 and has since kept in touch with his French friends on Facebook.
When Staley visits the church at Sainte-Mère-Eglise, he remembers occupying foxholes dug earlier by 82nd Airborne Division paratroopers. Afterward, Staley fought with the 90th Infantry Division and was wounded in combat. Coming back to France is not about reliving the horrors of war, he said. It's about sharing time with people in France.
"I was never hugged and kissed and thanked so much for what we did," Staley said. "It amazed and overwhelmed me and I think I'll never forget it."

Cook, on the other hand, has returned many times. He also looks forward to seeing people he's met before, plus reflecting on some of his wartime thoughts, he said.

"This brings back the memories of the guys we were with here," Cook said. "It's important that we rededicate ourselves to their sacrifice and D-Day helps us do that."

SECRETARY OF DEFENSE PANNETA WANTS TO DEEPEN U.S.-INDIA RELATIONS

FROM:  AMERICAN FORCES PRESS SERVICE

Panetta Says U.S.-India Relations Must Deepen, Grow for Peace

By Jim Garamone

DELHI, India, June 6, 2012 - The U.S.-India relationship must deepen and grow to truly provide security for the Asia-Pacific region and the world, Defense Secretary Leon E. Panetta told the Institute for Defense Studies and Analyses here today.

Panetta met with Indian leaders to explore ways to expand the defense and security relationship between the two natural allies. His speech at the institute, the oldest Indian defense think tank, was to inform opinion-makers of the background behind the new strategic guidance and why it is important to both countries.

The secretary is building on President Barack Obama's statement that the relationship between the United States and India "will be one of the defining partnerships of the 21st century."

The United States is at a turning point, Panetta said, and it is now rebalancing its military forces in the critical Asia-Pacific region. Earlier this week in Singapore, the secretary announced that 60 percent of the U.S. naval fleet would be based in the Asia-Pacific. "In particular, we will expand our military partnerships and our presence in the arc extending from the Western Pacific and East Asia into the Indian Ocean region and South Asia," Panetta said in prepared remarks.

Defense cooperation with India is a linchpin in this strategy, he said. India is one of the largest and most dynamic countries in the region and the world, with one of the most capable militaries. The Indian military has more than 1.3 million members on active service and another 1 million in reserve. In addition, the countries share a set of values.

"We share a commitment to open and free commerce; to open access by all to our shared domains of sea, air, space, and cyberspace; and to resolving disputes without coercion or the use of force, in accordance with international law," Panetta said.

The two nations also share a commitment to abide by international standards and norms -- "rules of the road" -- that promote international peace and stability, the secretary said.

The two countries also face many of the same threats. Panetta listed the challenges coming from violent extremism and terrorism to piracy on the high seas and from the proliferation of weapons of mass destruction to regional instability. "Handling these challenges requires a forward-looking vision for our defense partnership, and a plan for advancing it month-by-month and year-by-year," he said.

The two militaries have built a strong foundation; U.S. and Indian troops from all services routinely exercise together. And Indian forces participate in United Nations missions.

But more should be done. "In particular, I believe our relationship can and should become more strategic, more practical, and more collaborative," Panetta said.

The U.S.-Indian defense cooperation is strategic in that the two nations consult and share views on all major regional and international security developments. "Our defense policy exchanges are now regular, candid and invaluable," he said.

The military exercises and exchanges now underway show the relationship is practical and "our defense relationship is growing ever more collaborative as we seek to do more advanced research and development, share new technologies and enter into joint production of defense articles," the secretary said.

At a strategic level, the United States and India have worked to counter piracy and terrorism. Panetta wants to expand that cooperation. "We can do more to drive the creation of a rules-based order that protects our common interests in new areas like cybersecurity and space," he said. "We need to develop 'rules of the road' in these domains to help confront dangerous activities by states and non-state actors alike."

Within the region, the U.S. vision is a peaceful Indian Ocean supported by growing Indian military capabilities. "America will do its part through the rotational presence of Marines in Australia, littoral combat ships rotating through Singapore and other U.S. military deployments in the region," he said.

China is obviously a factor in the region, and Panetta said both India and the United States must do all they can to strengthen relations with China. "We recognize that China has a critical role to play advancing security and prosperity in this region," he said. "The United States welcomes the rise of a strong, prosperous and a successful China that plays a greater role in global affairs -- and respects and enforces the international norms that have governed this region for six decades."

Pakistan is another regional player that must be kept in mind. The Indians have fought three major wars with Pakistan since 1947. "India and the United States will need to continue to engage Pakistan, overcoming our respective -- and often deep -- differences with Pakistan to make all of South Asia peaceful and prosperous," the secretary said.

On a practical aspect, Panetta wants U.S.-Indian military exercises to become more regular and more complex.

India and the United States may not always agree on every aspect of their relationship, Panetta said. But the two nations share so much in common that they are natural partners.

"Our two nations may not agree on the solution to every challenge facing us, and we both face the challenge of political gridlock at home that sometimes prohibits advancing our broader strategic objectives," he said. "But I am sure that we will continue to draw closer together because we share the same values, the same challenges and threats, and the same vision of a just, stable and peaceful regional order."

MIDWAY WREATH-LAYING CEREMONY AT ARIZONA MEMORIAL

FROM:  U.S. NAVY  
120604-N-XD424-012 PEARL HARBOR (June 4, 2012) Sailors and a Marine stand by Arizona Memorial-dedicated wreaths during a wreath laying ceremony at the memorial at Joint Base Pearl Harbor-Hickam. The ceremony was held to commemorate the 70th anniversary of the Battle of Midway. (U.S. Navy photo by Mass Communication Specialist 3rd Class Dustin W. Sisco/Released) 

Arizona Memorial Hosts Battle Of Midway Wreath-Laying Ceremony 
By Mass Communication Specialist 3rd Class Dustin W. Sisco, Commander, Navy Region Hawaii Public Affairs
PEARL HARBOR, Hawaii (NNS) -- In commemoration of the 70th anniversary of the Battle of Midway, service members and civilians attended a wreath-laying ceremony on the Arizona Memorial on board Joint Base Pearl Harbor-Hickam.

The ceremony featured parading of the colors from the Navy and Marine Corps Color Guard and a singing of the national anthem and Hawaii Ponoi from Amanda Carona, historian for the World War II Valor in the Pacific National Monument, as well as a flyover from an SNJ-5B vintage aircraft.

"It is a great privilege for me to join you to honor those who fought at the Battle of Midway 70 years ago today," said Rear Adm. James Caldwell, guest speaker and commander, Submarine Forces and U.S. Pacific Fleet. "Today, we reflect on and celebrate the accomplishments of one of America's greatest generations; those brave men and women that served our country in a time of war."

The ceremony was held on the Arizona Memorial as recognition for the starting place of the Pacific War.

"It is fitting because this is the place where our nation was thrust in to war," Caldwell said. "It is also a place where the American fighting spirit was reaffirmed, as it has been many times in our history.

The Battle of Midway was a turning point in the Pacific War, crippling Japan's ability to launch further large-scale attacks against the Allied Forces.

"So we continue to serve this great nation. We must pick up the mantle and remember the importance of their service and their sacrifices," said Caldwell.

The wreaths were dedicated from U.S. Pacific Fleet, Marine Forces Pacific Fleet, Pearl Harbor Naval Shipyard and Joint Base Pearl Harbor-Hickam.

Capt. Sal Aguilera, chaplain of Navy Region Hawaii and Naval Surface Group Middle Pacific said, "Knowing that understanding our past will empower us to overcome future challenges, we now rightly commemorate this great naval battle."

APPENDAGE
FROM:  NAVAL HISTORY AND HERITAGE COMMAND
The Battle of Midway, fought near the Central Pacific island of Midway, is considered the decisive battle of the war in the Pacific. Before this battle the Japanese were on the offensive, capturing territory throughout Asia and the Pacific. By their attack, the Japanese had planned to capture Midway to use as an advance base, as well as to entrap and destroy the U.S. Pacific Fleet. Because of communication intelligence successes, the U.S. Pacific Fleet surprised the Japanese forces, sinking the four Japanese carriers, that had attacked Pearl Harbor only six months before, while only losing of one carrier. After Midway, the Americans and their Allies took the offensive in the Pacific.
Source: Naval History and Heritage Command

GEN. JANET WOLFENBARGER BECOMES FIRST FEMALE FOUR-STAR GENERAL IN THE AIR FORCE

FROM:  U.S. AIR FORCE
In the time-honored military tradition signifying assumption of command, Air Force Chief of Staff Gen. Norton Schwartz passes the Air Force Materiel Command guidon, or unit flag, to Gen. Janet Wolfenbarger. Wolfenbarger assumed command of AFMC June 5, 2012, in a ceremony at the National Museum of the U.S. Air Force. (U.S. Air Force photo/Michelle Gigante)

Wolfenbarger receives fourth star, assumes leadership of AFMC
by Kim Dawley
Air Force Materiel Command Public Affairs

6/5/2012 - WRIGHT-PATTERSON AIR FORCE BASE, Ohio (AFNS) -- Gen. Janet Wolfenbarger became the first female four-star general in the Air Force and assumed the top position of Air Force Materiel Command during ceremonies here June 5, 2012.

Wolfenbarger took the reins of the major command responsible for the technology, acquisition, test and sustainment of the service's current and future weapon systems from Gen. Donald Hoffman during a change of command ceremony held at the National Museum of the United States Air Force. Prior to the change of command, Wolfenbarger received her fourth star during a promotion ceremony.

Air Force Chief of Staff Gen. Norton Schwartz presided over the ceremony, during which he lauded AFMC's excellence in keeping Air Force weapon systems ready, available and effective, and expressed his confidence that the command is in capable hands with Wolfenbarger.

"We honor Janet Wolfenbarger, an extraordinary public servant and a model Air Force officer," Schwartz said. "Based on her record, Secretary of the Air Force Michael Donley and I are entirely confident that she is up to the task of commanding this great organization."

Wolfenbarger thanked Schwartz and Donley for their faith in her ability to lead AFMC and said she was looking forward to once again being part of the AFMC team.

"This opportunity only really exists because the Air Force has embraced a culture of diversity," she said. "This culture has been cultivated over many years, driven by leadership at every level who acknowledge and appreciate the value of contributions from every Airman.

"I promise I will serve in my role as AFMC commander with my absolute best effort," Wolfenbarger continued. "What's more, I have total confidence in the men and women of this command. We will always rise to the occasion and accomplish our difficult mission with determination and enthusiasm."

Schwartz also highlighted Hoffman's dedication to both AFMC's mission and its workforce.

"Don, thank you for presiding over an impressive effort here at AFMC," Schwartz said. "During your tenure, AFMC continued its longstanding excellence in research and development, test and evaluation, acquisition management and logistics support.

"During some of the most challenging and turbulent times for our Air Force, General Hoffman has inspired mission success," he continued. "Don and Jacki, thank you for your combined service to our Air Force, and for your very important contributions to our nation's security."

Hoffman said he would most miss the quality of the people one finds in the Air Force, and the unquestioned level of trust that Airmen exude.

"When you meet someone in the Air Force, you know they've taken an oath to defend the Constitution and a pledge to live by core values of integrity, service and excellence," he said. "Thanks to all of our Airmen, it has been my good fortune to be part of the best Air Force in the world. It was the best when I joined it. It's smaller now, its missions have changed, but it's still the best. And I have total confidence that those who follow me will keep it the best Air Force in the world."

Hoffman, who had served as the commander of AFMC since November 2008, is retiring after 42 years of service.

After serving as the military deputy of the Office of the Assistant Secretary of the Air Force for Acquisition at the Pentagon for the past eight months, Wolfenbarger becomes the eighth AFMC commander since AFMC stood up on July 1, 1992. She will now lead a workforce of approximately 81,000 people and manage an annual budget of about $60 billion.

THE MAN WHO CHRONICLED LIFE ON MARS DECADES AGO IS DEAD AT AGE 91.

FROM:  U.S. LIBRARY OF CONGRESS
"Ray Bradbury and Pogo
June 6th, 2012 by Jennifer Gavin
Ray Bradbury, the towering writer of science fiction, died today at age 91. Talk about an author who will be missed …

In the United States, our lives been steeped in science fiction, from the days of “Buck Rogers” and the cheesy B-movies of the 1950s to the phenomena of “Star Trek,” “The Matrix” and more recent films based on a variety of sci-fi and fantasy works.  Yet, for many decades, the genre was sneered at.

Ray Bradbury turned that around.
He elevated the form to literature.  He packed it with humanity, and he pointed out – to paraphrase the cartoon character Pogo – that we humans had “met the enemy, and he is us.”

An uncomfortable portion of the world Bradbury created, in novels such as “Fahrenheit 451,” has come to pass.  Every time I see someone shambling down the street, staring blankly into a hand-held device, I visualize those two telescreen figures from the movie version of “Fahrenheit 451” looking down at Julie Christie and saying, “Linda, you’re absolutely fantastic!”

And I visualize her, staring back, vacuously."

NSF AND THE TREE OF LIFE BRANCHES AND EVOLUTION

FROM:  NATIONAL SCIENCE FOUNDATION
June 4, 2012
A new initiative aims to build a comprehensive tree of life that brings together everything scientists know about how all species are related, from the tiniest bacteria to the tallest tree. Researchers are working to provide the infrastructure and computational tools to enable automatic updating of the tree of life, as well as develop the analytical and visualization tools to study it.

Scientists have been building evolutionary trees for more than 150 years, since Charles Darwin drew the first sketches in his notebook.

Darwin's theory of evolution explained that millions of species are related and gave biologists and paleontologists the enormous challenge of discovering the branching pattern of the tree of life.

But despite significant progress in fleshing out the major branches of the tree of life, today there is still no central place where researchers can go to visualize and analyze the entire tree.

Now, thanks to grants totaling $13 million from the National Science Foundation's (NSF) Assembling, Visualizing, and Analyzing the Tree of Life (AVAToL) program, three teams of scientists plan to make that a reality.

"The AVAToL awards are an exciting new direction for an area that's a foundation of much of biology," says Alan Townsend, director of NSF's Division of Environmental Biology. "That's critical to understanding a changing relationship between human society and Earth's biodiversity."

Figuring out how the millions of species on Earth are related to one another isn't just important for pinpointing an antelope's closest kin, or determining if tuna are more closely related to starfish or hagfish.

Information about evolutionary relationships is fundamental to comparative biology research. It helps scientists identify promising new medicines; develop hardier, higher-yielding crops; and fight infectious diseases such as HIV, anthrax and influenza.
If evolutionary trees are so widely used, why has assembling them across all life been so hard to achieve?

It's not for lack of research, or data. Advances in DNA sequencing and evolutionary analysis, discovery of pivotal early fossils, and novel methods and tools have enabled thousands of new evolutionary trees to be published in scientific journals each year.

However, most of these focus on specific, disconnected branches of the tree of life.
Part of the difficulty lies in the sheer enormity of the task. The largest evolutionary trees to date contain roughly 100,000 groups of organisms.

Assembling the branches for all species of animals, plants, fungi and microbes--and the countless more still being named or discovered--will require new computational tools for analyzing large data sets, for combining diverse kinds of data, and for connecting vast numbers of published trees into a synthetic whole.

Another difficulty lies in how scientists typically disseminate their results. A tiny fraction of all evolutionary trees have been published.  Researchers estimate a mere four percent end up in a database in a digital form.

Most of the knowledge is locked up in figures in static journal articles in file formats that may be difficult for other researchers to download, reanalyze or merge with new information.

AVAToL aims to change that.
What makes this program different from previous efforts, scientists say, is its scope: its focus on creating an open, dynamic, evolutionary framework that can be continually refined as new biodiversity data is collected, and its development of computational and visualization tools to scale up tree-based evolutionary analyses.

Researchers will be able to go online and compare their trees to others that have already been published, or download trees for further study.

They'll also be able to expand the tree, filling in the missing branches and placing newly named or discovered species among their relatives.

The goal is to incorporate new trees automatically, so the complete tree can be continuously updated.

In addition to the creation of an updatable tree of life, AVAToL scientists will create new tools for the kinds of research that rely on evolutionary trees and for the collection and analysis of important evolutionary data, including from fossils critical to the placement of many branches in the tree of life.

The three NSF-funded AVAToL projects are:
Automated and Community-Driven Synthesis of the Tree of Life
Principal Investigator: Karen Cranston, Duke University and the National Evolutionary Synthesis Center
This project will produce the first online, comprehensive first-draft tree of all 1.8 million named species, accessible to both the public and scientists.  Assembly of the tree will incorporate previously published results and efforts to develop, test and improve methods of data synthesis. This initial tree of life, called the Open Tree of Life, will not be static. Scientists will develop tools for researchers to update and revise the tree as new data come in.

Arbor: Comparative Analysis Workflows for the Tree of Life
Principal Investigator: Luke Harmon, University of Idaho
Scientists deal with daunting volumes of data.  One of the most basic challenges facing researchers is how to organize that information into a usable format that can inspire new scientific insights. This project team is working to develop a way to visually portray evolutionary data so scientists can see, at a glance, how organisms are related. The team will create software tools that will enable researchers to visualize and analyze data across the tree of life, enabling research in all areas of comparative biology at multiple evolutionary, space and time scales. The results have the potential to transform the way biologists test evolutionary and ecological hypotheses, enabling new research in fields from medicine to public health, from agriculture to ecology to genetics.

Next Generation Phenomics for the Tree of Life
Principal Investigator: Maureen O'Leary, SUNY-Stony Brook
This team of biologists, computer scientists and paleontologists will extend and adapt methods from computer vision, machine learning and natural language processing to enable rapid and automated study of species' phenotypes on a vast scale across the tree of life. The team's goal is to develop large phenomic datasets using new methods, and to provide the scientific community and the public with tools for future such work. Phenomics is an area of biology that measures the physical and biochemical traits of organisms as they change in response to genetic mutations and environmental influences.

Enormous phenomic datasets, many with images, will foster public interest in biodiversity and the fossil record. Phenotypic data allow scientists to reconstruct the evolutionary history of fossil species, in turn crucial for an understanding of the history of life. This project will leverage recent advances in image analysis and natural language processing to develop novel approaches to rapidly advance the collection and analysis of phenotypic data for the tree of life.

TEXAS RESIDENT GOES TO PRISON FOR SCHEME TO DEFRAUD THE EXPORT-IMPORT BANK

FROM:  U.S. DEPARTMENT OF JUSTICE
Tuesday, June 5, 2012
Texas Resident Sentenced to 15 Months in Prison for Scheme to Defraud the U.S. Export-import Bank
WASHINGTON – A Fabens, Texas, resident was sentenced today to 15 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of more than $690,624.

The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Robert Pitman of the Western District of Texas; Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank; and Acting Special Agent in Charge Dennis A. Ulrich of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in El Paso, Texas.
Hector Cuevas, 42, was also sentenced by Judge Kathleen Cardone in U.S. District Court in El Paso to three years of supervised release and was ordered to pay $553,148 in restitution and $690,624 in forfeiture.  Cuevas pleaded guilty on Oct. 13, 2011, to conspiracy to commit wire fraud, wire fraud and money laundering conspiracy.  Cuevas admitted that he participated in a scheme to defraud the Ex-Im Bank of more than $690,624.

According to court documents, Cuevas was the owner of CT Implement Inc., a farm equipment sales company in Fabens that purported to be in the business of exporting U.S. agricultural equipment to Mexico.  During his plea hearing, Cuevas admitted that he helped others prepare and submit false applications, financial records and export documents to two lending banks to assist co-conspirators in Mexico in obtaining two Ex-Im insured loans purportedly for the purchase of equipment from Cuevas’ company.  Once the loans were approved, Cuevas admitted that he acted as a money launderer by illegally transferring Ex-Im Bank insured proceeds to both borrowers and others in Mexico.  Both loans defaulted and caused Ex-Im Bank to pay claims totaling $583,430 to the lending banks.

Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing.  Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.

The case is being prosecuted by Trial Attorneys Patrick Donley and William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Spitzer of the Western District of Texas, El Paso Office.  The case was investigated by the Ex-Im Bank Office of Inspector General and ICE-HSI El Paso.  The Financial Crimes Enforcement Network (FinCEN) also provided valuable assistance and financial analysis in this investigation.

DEATH OF AL-QAIDA SECOND-IN-COMMAND CONFIRMED BY WHITE HOUSE

Photo:  9-11 Memorial at Pentagon.  Credit:  U.S. Navy.

FROM:  AMERICAN FORCES PRESS SERVICE

White House Confirms Death of Al-Qaida's Second-in-Command

By Army Sgt. 1st Class Tyrone C. Marshall Jr.

WASHINGTON, June 6, 2012 - The U.S. government has confirmed the death of Abu Yahya al-Libi, the second in command of al-Qaida, a senior White House spokesman said yesterday.

"I can tell you that our intelligence community has intelligence that leads them to believe that al-Qaida's No. 2 leader, al-Libi, is dead," White House Press Secretary Jay Carney said.

Carney didn't provide details on how or where al-Libi was killed but he said the deceased terrorist had "served as al-Qaida's general manager" overseeing the group's day-to-day operations in the tribal areas of Pakistan and managing regional outreach.

"I can simply say that he was the No. 2 leader in al-Qaida, and this is the second time in less than a year that the No. 2 leader of al-Qaida has been removed from the battlefield," he said.

Al-Libi was deputy to Ayman al-Zawahiri, who assumed leadership of the terrorist network after Osama bin Laden, the mastermind of the 9/11 attacks, was killed during an assault by U.S. Navy SEALs on a compound in Abbottabad, Pakistan in May of last year.

"[Al-Libi's] death is part of the degradation that has been taking place to core al-Qaida during the past several years," Carney said. "[This] degradation has depleted the ranks to such an extent that there is now no clear successor to take on the breadth of his responsibilities."

Carney noted the loss of al-Libi adds pressure to al-Zawahiri to effectively manage the group. "We believe al-Libi's death is a major blow to core al-Qaida, removing the No. 2 leader for the second time in less than a year and further damaging the group's morale and cohesion, and bringing it closer to its ultimate demise than ever before," he said.

Carney added that al-Libi's death represents another serious blow to al-Qaida in the wake of the demise of bin Laden, in what is an ongoing effort to disrupt, dismantle and defeat a foe that brought terror and death to the United States on 9/11, and has perpetrated acts of terrorism against innocent civilians around the globe.

F-22 FLIGHTS REMAIN NEAR POTENTIAL DESPITE HYPOXIA-LIKE SYMPTONS CONCERN

Photo:  F-22 Raptor.  Credit:  U.S. Air Force.

FROM:  AMERICAN FORCES PRESS SERVICE

New Flight Restrictions Haven't Curbed F-22 Operations

By Claudette Roulo

WASHINGTON, June 5, 2012 - Safety measures put in place last month on F-22 Raptor flights have had no impact on operations, Pentagon spokesman Navy Capt. John Kirby told reporters today.

Kirby and Pentagon Press Secretary George Little last month announced restrictions to F-22 flight operations after 12 pilots reported hypoxia-like symptoms.

In response, Secretary of Defense Leon E. Panetta directed the retrofitting of automatic backup oxygen systems in the Raptor.

The Air Force is investigating the issue and providing monthly reports to Panetta.

In addition, all F-22 flights were ordered to remain near potential landing locations to enable quick recovery and landing should a pilot encounter problems during flight, Little said last month.

There are no plans to ground the aircraft, but Kirby said the Defense Department remains prepared for all possibilities.

"It's a safety-of-flight issue," he said. "Secretary Panetta understands that, and he's not taking any options off the table with respect to the future of the aircraft."

"Right now the aircraft is performing very well in an operational setting and ... we're just going to continue to watch this as we move forward," Kirby said.

U.S. NAVAL SHIP FROM ANOTHER CENTURY COMMEMORATES BATTLE OF MIDWAY

FROM:  U.S. NAVY
USS Constitution gets underway for her first turnaround cruise of 2012. The underway commemorated the 70th anniversary of the Battle of Midway and recognized members of the Wounded Warrior Project. Constitution is the world's oldest commissioned warship afloat. She defended the sea lanes against threat from 1797 to 1855, much like the mission of today's Navy. U.S. Navy photo by Seaman Michael Achterling (Released) 120604-N-BJ178-118

NATO CENTRAL ASIAN NATIONS HAVE APPROVED AFGHANISTAN ROUTES

Photo Credit:  U.S. Navy
FROM:  AMERICAN FORCES PRESS SERVICE
NATO: Central Asian Nations Approve Afghanistan Exit Routes
By Cheryl Pellerin
WASHINGTON, June 5, 2012 - NATO has reached agreements with Kazakhstan, Kyrgyzstan and Uzbekistan to allow troops and equipment to transit these Central Asian nations to and from Afghanistan, NATO's secretary general said yesterday.

"These agreements will give us a range of new options and the robust and flexible transport network we need. I thank all three partner countries for their support," Rasmussen told reporters during his monthly briefing from NATO headquarters in Brussels.

"NATO will continue to actively engage with Afghanistan's neighbors," he added, "to build wider support for the country's stability."

During a briefing at the Pentagon today, spokesman Navy Capt. John Kirby said the United States also has bilateral agreements with the three nations through the Northern Distribution Network, to move goods in and out of Afghanistan.

"We are very appreciative for those arrangements and continue to use them," Kirby added.
Such ground routes are needed to supply the war in Afghanistan and will be critical as the combat role of NATO's International Security Assistance Force comes to an end in 2014, and troops and equipment begin to make their way home.

Shorter routes through Pakistan have been closed since November, after a cross-border incident involving NATO troops in Afghanistan mistakenly killed 24 Pakistani soldiers.  Defense Department and NATO officials have said that negotiations are underway with Pakistan to reopen the routes.

Kirby said defense officials "do believe having the ground gates open at Chaman and the Torkham gates [on the border between Pakistan and Afghanistan] for the flow of coalition traffic in and out of Afghanistan remains valuable."

He added, "And we continue to be in discussions with our Pakistani counterparts about trying to get those gates open and, in general, trying to improve the relationship with Pakistan writ large."

In Brussels, Rasmussen said he invited Pakistan President Asif Ali Zardari to last month's NATO summit in Chicago, during which "President Zardari confirmed that it is his clear intention, it is the intention of Pakistan, to engage positively in finding solutions to the conflict in Afghanistan."

The secretary general declined to comment on details of the negotiations with Pakistan, adding, "I'll just reiterate that I still hope that a solution can be found in the very near future."

At the same time, he said, "we actually concluded a number of very important transit agreements at the Chicago summit and of course that will contribute in a very positive way to our operation in Afghanistan as we gradually wind down our combat operation towards the end of 2014."

NATO already has a reverse transit arrangement with Russia, Rasmussen added, "and the fact that we have now concluded ... three concrete transit arrangements with Central Asian countries at the Chicago summit will make the use of the Russian transit arrangement even more effective."

The secretary general also declined to comment on details of the Central Asian transit agreements but said, " ... We have concluded agreements that are of mutual satisfaction of the involved partners."

U.S. AIR FORCE TRAINING AT STANFORD, ENGLAND

FROM:  U.S. AIR FORCE
STANFORD TRAINING AREA, England – Senior Airman Steven Trimble, 820th Base Defense Squadron close precision engagement team member, scouts an area during Regiment-hosted sniper training Feb. 28. The lush environment and rainy weather conditions of England provided a new element to the training atmosphere as the team learned to utilize the foliage and fog to discreetly stake out the village and observe their targets. (U.S. Air Force photo by Airman 1st Class Cory D. Payne) (Released)

DEFENSE SECRETARY PANETTA EXPLAINS NEW U.S.DEFENSE FOCUS TO INDIAN LEADERS

FROM:  AMERICAN FORCES PRESS SERVICE

Panetta Explains New Strategic Guidance to Indian Leaders

By Jim Garamone

NEW DELHI, June 5, 2012 - Defense Secretary Leon E. Panetta met with Indian leaders today to explain how the U.S. strategic guidance will shift American focus to the Asia-Pacific region.

Panetta landed at a military airport and immediately went into meetings with Indian Prime Minister Manmohan Singh and National Security Advisor Shivshankar Memon.

Panetta discussed U.S. military initiatives to rebalance to the Asia-Pacific region and the importance the United States places on India, Pentagon Press Secretary George Little said. A senior defense official said the U.S. has excellent military-to-military relations with India and would like to build on the success of the last decade. In 2011, the United States participated in more than 50 exercises with the Indian military. This is in addition to a robust exchange program and multilateral operations.

India, in fact, is the only country specifically mentioned as a key partner in DOD's strategic guidance issued in January.

The secretary underscored the link India provides between eastern and western Asia and how the United States views the country as a provider of security from the Indian Ocean to Afghanistan and beyond, Little said in a written statement following the meetings.

The leaders also discussed the U.S.-India defense relationship including shared security challenges.

U.S. officials say Panetta was very encouraged by the Indian government's support for resuming the recovery of remains of Americans lost over northeastern India during World War II.

DOD believes there are about 400 unaccounted-for service members from some 90 aircraft crashes in the area during the war. The airmen were flying "The Hump" -- an air bridge over the Himalayas to China, a region that is home to some of the world's worst weather.   "This is a critical step toward bringing home our service members lost during World War II," Panetta said. "The United States and India, working together, can help provide comfort to the families of Americans who were lost during the war."

The United States has information on 16 known crash sites and continues to develop information on others.

Planting Trees for a Cleaner Chesapeake Bay

Planting Trees for a Cleaner Chesapeake Bay

REMERBERANCE OF WWI VETERANS AT ST. MIHIEL CEMETERY

FROM:  U.S. AIR FORCE
THIAUCOURT, France -- The Ramstein Air Base, Germany, Honor Guard colors detail advances to position during the Memorial Day event at the St. Mihiel American Cemetery May 27, 2012. The 40.5-acre World War I cemetery, about 24 miles southwest of Metz, France, contains the graves of 4,153 of U.S. military dead. It is the third largest of the eight World War I American military cemetery memorials in Europe. (U.S. Air Force photo by Tech. Sgt. Francesca Popp)

MORGAN STANLEY ORDERED TO PAY $5 MILLION FOR UNLAWFUL TRADES

FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION
CFTC Orders Morgan Stanley & Co. LLC to Pay $5 Million Civil Monetary Penalty for Unlawful Noncompetitive Trades
Morgan Stanley had inadequate supervisory systems and controls to detect and deter the unlawful conduct that occurred repeatedly over 18-months
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an order filing and settling charges that, over an 18-month period, Morgan Stanley & Co. LLC (Morgan Stanley), a registered futures commission merchant (FCM), unlawfully executed, processed, and reported numerous off-exchange futures trades to the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT) as exchanges for related positions (EFRPs). The CFTC order requires Morgan Stanley to pay a $5 million civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

According to the CFTC order, because the futures trades were executed noncompetitively and not in accordance with exchange rules governing EFRPs, they constituted “fictitious sales” and resulted in the reporting of non-bona fide prices, in violation of the CEA and CFTC regulations. The order also finds that Morgan Stanley had related supervisory and recordkeeping violations.

The commodity futures trading laws generally require that futures trades be executed on a futures exchange. The laws allow for exceptions to that requirement, such as when the futures trade is part of an EFRP, which is where parties exchange futures contracts for a related cash or over-the-counter (OTC) derivative position, such as an option or a swap. As long as the legal requirements are met, parties are permitted to execute EFRPs away from an exchange but then must report their EFRPs to an exchange after execution.
“The laws requiring that futures trades be executed on an exchange serve important price discovery and transparency principles,” said David Meister, Director of the CFTC’s Division of Enforcement. “As today’s action should demonstrate, when an FCM reports that it properly conducted an off-exchange futures trade as part of an EFRP, that report had better be accurate. In all cases, firms must have appropriate systems and controls in place designed to detect and prevent the conduct described in the order.”
According to the CFTC’s order, from at least April 18, 2008 through October 29, 2009, Morgan Stanley noncompetitively executed numerous futures trades and improperly reported them as EFRPs, since they did not have the required corresponding cash or OTC derivative positions.

The order finds that Morgan Stanley’s supervisory systems and internal controls were not adequate to detect and deter the noncompetitive trading of futures contracts improperly designated as EFRPs. For example, although Morgan Stanley’s Futures Operations department had the responsibility to report EFRPs to the CME and CBOT, that department was not required to verify that the EFRPs had the required corresponding related cash or OTC derivative positions, nor was any other operations department required to do so. The order further finds that Morgan Stanley failed to ensure that its employees involved in the execution, handling and processing of EFRPs understood the requirements for executing bona fide EFRPs. Moreover, the order finds that Morgan Stanley lacked sufficient surveillance systems to identify trades improperly designated as EFRPs. The order also finds that Morgan Stanley failed to designate the trades as EFRPs on all orders, records, and memoranda pertaining to EFRPs, as required.

The order recognizes Morgan Stanley’s significant cooperation in the Division of Enforcement’s investigation of this matter.

In a related proceeding, the CME Group is issuing a notice of disciplinary action against Morgan Stanley today. The CFTC thanks the CME Group for its assistance.
CFTC Division of Enforcement staff members responsible for this case are Brian G. Mulherin, Timothy M. Kirby, Brandon T. Tasco, Gretchen L. Lowe, and Vincent A. McGonagle.

SECRETARY OF AGRICULTURE TO APPOINT SOCIALLY-DISADVANTAGED FARMERS AS VOTING MEMBERS OF COUNTY COMMITTEES

Photo:  Angus Cow.  Credit:  USDA
FROM:  U.S. DEPARTMENT OF AGRICULTURE
Agriculture Secretary Vilsack Intends to Appoint Socially-Disadvantaged Farmers as Voting Members of County Committees

WASHINGTON, June 4, 2012—Agriculture Secretary Tom Vilsack announced today that he intends to appoint voting members from socially disadvantaged (SDA) communities to serve on county committees in county jurisdictions that lack fair SDA representation.USDA’s Farm Service Agency (FSA), which works collaboratively with county committees, published an interim rule today in the Federal Register that is open for public comment for 60 days.

County committees have served as a direct link between the farm community and USDA for more than 75 years, helping to deliver FSA farm programs at the local level. Eligible farmers serving on committees provide feedback to USDA on the types of FSA agricultural programs that best serve the needs of local producers.

“As we continue to build a USDA that is responsive to the needs of an evolving, 21st century agricultural economy, we must ensure a strong and sustainable future for these important committees,” said Vilsack. “Appointing new voting members to committees that lack representation will help ensure that county committees continue to play a vital and relevant role in delivering important federal farm programs to citizens of rural communities across our nation.”

County committees were formed in the 1930s to oversee federal farm programs, a tool for grassroots engagement whereby locally elected committees give farmers effective self-government authority. That authority continues today, making farmers primary stewards of farm programs passed by Congress, including administration and outreach to all farmers and ranchers in their area.

Secretarial appointments would add SDA voting members to county jurisdictional areas where representation is lacking, according to a statistical review conducted by USDA. The appointments will supplement the existing election process where currently there are 7,700 elected county committee members representing 2,244 county jurisdictions.

“We are proud of the great diversity that makes up our rural communities,” said FSA Administrator Bruce Nelson, “and appointing voting members to committees that lack representation is an important step in helping to maintain a robust county committee system for all producers.”

Authority to appoint voting SDA members was granted in the 2002 Farm Bill passed by Congress. The interim rule allows the Secretary of Agriculture to ensure fair representation on county committees by appointing a voting member in areas identified under-representing the diversity of area producers. Each year, USDA will conduct a fresh statistical analysis, and appointments with voting authority will continue to occur in areas identified under-representing the diversity of area producers.

A copy of this interim rule is on display in today’s Federal Register. To submit comments, use any of the following methods:

The Obama Administration, with Agriculture Secretary Vilsack’s leadership, has worked tirelessly to strengthen rural America, implement the Farm Bill, maintain a strong farm safety net, and create opportunities for America’s farmers and ranchers. U.S. agriculture is currently experiencing one of its most productive periods in American history thanks to the productivity, resiliency, and resourcefulness of our producers. A strong farm safety net is important to sustain the success of American agriculture. For example, in response to tighter financial markets, USDA has expanded the availability of farm credit, helping struggling farmers refinance loans. In the past 3 years, USDA provided 103,000 loans to family farmers totaling $14.6 billion. Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers.

NEWS FROM THE AFGHANISTAN FRONT

Photo:  Helicopter Flying Over Afghanistan.  Credit:  U.S. Air Force

FROM:  AMERICAN FORCES PRESS SERVICE

Afghan-led, Coalition-supported Force Detains Taliban Leader

Compiled from International Security Assistance Force Joint Command News Releases

WASHINGTON, June 5, 2012 - An Afghan-led, coalition-supported security force detained a Taliban leader and several suspected insurgents in the Kandahar district of Afghanistan's Kandahar province today, military officials reported.

The leader directed the placement of improvised explosive devices and coordinated the delivery of weapons and explosives to insurgents throughout the district, officials said.

The security force also confiscated several AK-47 rifles and other weapons.

In other Afghanistan operations today:

-- A combined force detained a Taliban leader and two suspects in the Zharay district of Kandahar province. The detained insurgent leader was responsible for attacks against Afghan and coalition forces and transported explosives and weapons to insurgents throughout the province.

-- A combined force detained several suspects during a search for a Haqqani leader in the Khost district of Khost province. The Haqqani leader is suspected of planning the attack against Forward Operating Base Salerno on June 1. He is also an explosives expert suspected of building the vehicle-born IEDs that the insurgents detonated at the Salerno gate.

-- A combined force detained several suspects during a search for a Haqqani leader in the Pul-e 'Alam district of Logar province. The Haqqani leader supplies insurgent fighters with weapons and executes attacks against Afghan and coalition forces.

In Afghanistan operations yesterday:

-- In the Waygal district of Nuristan province, a combined force called in an airstrike that killed several insurgents.

-- A combined force requested airstrike killed two Taliban leaders in the Wali Muhammad Shahid Khugyani district of Ghazni province. One deceased insurgent was the senior Taliban leader in the Wali Muhammad Shahid Khugyani and Ghazni districts. He led an improvised explosive device cell and conducted attacks against coalition and Afghan forces throughout the region. The second deceased Taliban leader directed the placement of IED's against coalition and Afghan forces throughout the district.